Ateneo

de Naga University College of Law

COURSE SYLLABUS

COURSE TITLE : LAW ON SALES INSTRUCTOR:
NO. OF UNITS : TWO (2) Atty. Racquel Sienna A. Vergara
SEMESTER/SY : FIRST SEMESTER/2019-2020

Reference: Law on Sales by Cesar L. Villanueva & Teresa V. Tiansay (2016)

Breakdown of Grade:
Recitation/Quizzes/Activity - 40%
Midterm Exam - 20%
Final Exam - 40%

No laptop/tablet/iPad/phone/recorder/gadget policy.

Course Outline:

Week X • Bucton v. Gabar, 55 SCRA
C. OBLIGATIONS OF BUYER 499 (1974)
• Tagatac v. Jimenez, 53
1. Buyer Must Pay the Price (Art. 1582)
O.G. 3792 (1957)
2. Buyer is Obliged to Accept Delivery of the • EDCA Publishing v.
Subject Matter (Arts. 1582-1585) Santos, 184 SCRA 614
(1990)
a. Buyer’s Right to Inspect Before Acceptance • Aznar v. Yapdiangco, 13
(Arts. 1481 and 1584[1]); EXCEPT: When SCRA 486 (1965)
Carrier Delivers under COD Terms • Cruz v. Pahati, 98 Phil.
788 (1956)
b. When Buyer Refuses to Accept (Art. 1588)
• Dizon v. Suntay, 47 SCRA
160 (1972)
VII. DOCUMENTS OF TITLE (Arts. 1507-1520) • Roman v. Grimalt, 6 Phil.
96 (1906)
1. Definition (Art. 1636) • Lawyer's Coop v. Tabora,
2. Purpose of Documents of Title 13 SCRA 762 (1965)
• Delta Motor Sales Corp.
3. Negotiable Documents of Title v. Niu Kim Duan, 213
SCRA 259 (1992).
a. How Negotiated (Arts. 1508-1509) • Tajanglangit v. Southern
b. Who Can Negotiate (Art. 1512) Motors, 101 Phil. 606
(1957)
c. Effects of Negotiation (Art. 1513) • Nonato v. IAC, 140 SCRA
d. Unauthorized Negotiation (Art. 1518) 255 (1985)
• Zayas v. Luneta Motors,
4. Non-Negotiable Documents of Title
117 SCRA 726 (1982).
a. How Transferred or Assigned (Art. 1514) • Ridad v. Filipinas
 b. Effects of Transfer (Art. 1514). Investment, 120 SCRA
246 (1983)
5. Warranties of Seller Through a Documents of • Equitable Savings Bank v.
Title (Art. 1516) Palces, 787 SCRA 260
(2016)
6. Rules of Levy/Garnishment of Goods (Arts. • Macondray & Co. v.
1514, 1519, 1520) Eustaquio, 64 Phil. 446
(1937)
VIII. SALE BY NON-OWNER OR ONE • Northern Motors v.
HAVING VOIDABLE TITLE: “THE LIFE Sapinoso, 33 SCRA 356
OF A CONTRACT OF SALE” (1970)
• Cruz v. Filipinas
1. RULES ON THE SALE EFFECT BY NON-OWNER: Investment & Finance
a. Where Seller Is Not Owner at Perfection: Corp., 23 SCRA 791
Contract Is Valid, For Ownership by Seller at (1968)
Perfection Is Not One of the Requisites for • Borbon II v. Servicewide
Subject Matter Specialists, 258 SCRA 634
(1996)
b. Where Seller Is Not Owner at Delivery: Buyer • Filipinas Investment. v.
Acquires No Better Title to the Goods Than Ridad, 30 SCRA 564
the Seller Had. (Art. 1505) (1969)
c. Remedy of Buyer in Either of the Two • PCI Leasing and Finance
Situations: Rescission of the Contract of Sale v. Giraffe-X Creative
with Damages, But Not An Action for Imaging, 527 SCRA 405
Declaration of Nullity Thereof. (2007)
• Legarda v. Saldaña, 55
2. EXCEPTIONS: When Non-Owner’s Act of “Selling” Transfers Title
SCRA 324 (1974)
to Buyer • Jestra Dev. and
a. Sales by Co-Owners (Art. 493) Management Corp. v.
Pacifico, 513 SCRA 413
b. Estoppel on the True Owner (Art. 1434) (2007)
c. Recording Laws; Torrens System (P.D. 1529) • McLaughlin v. CA, 144
SCRA 693 (1986)
d. Exercise by the Courts of Statutory Power to • Garcia v. CA, 619 SCRA
Make Sale Effective 280 (2010)
• Adelfa Properties v.
e. Sales in Merchants Stores, Fairs or Markets
Court of Appeals, 240
(Arts. 85 and 86, Code of Commerce)
SCRA 575 (1995)
• Coronel v. CA, 263 SCRA
3. SALE BY SELLER HAVING VOIDABLE TITLE (Art. 1506, as
15, 27 (1996)
an exception to Art. 559)
• PNB v. Court of Appeals,
262 SCRA 464 (1996)
IX. LOSS, DETERIORATION, FRUITS AND OTHER
BENEFITS

1. No Application When Subject Matter Is

“Determinable” (Generic) (Art. 1263)
2. Effect of Loss/Deterioration of Thing Sold:

a. Before Perfection.

b. At the Time of Perfection (Arts. 1493 and 1494)

c. After Perfection But Before Delivery (Arts.

1164, 1189, and 1262).

(1) General Rule: Before delivery, risk of loss is
borne by seller under the rule of res perit
domino.

(2) Loss by Fault of a Party (Arts. 1480, 1504,
1538)

(3) Loss by Fortuitous Event (Arts. 1480,
1163, 1164, 1165, 1504, 1538, and 1189;
READ Comments of PARAS, TOLENTINO,
PADILLA, and BAVIERA).

(4) Deterioration (Arts. 1480, 1163-65, and
1262; Arts. 1189 and 1538)

(5) Fruits or Improvements from time of
perfection pertain to buyer (Arts. 1480,
1537-1538)

d. After Delivery (Art. 1504)

X. REMEDIES FOR BREACH OF CONTRACT OR SALE

(Arts. 1594-1599)

A. REMEDIES OF THE SELLER

1. In Case of Movables (Arts. 1593, 1595 to 1597)

2. Unpaid Seller of Goods (Arts. 1524-1535)

a. Who Is an “Unpaid Seller”? (Art. 1525)
b. Rights of the Unpaid Seller:
• Possessory Lien (Arts. 1526-1529, 1503(1),
1535)
• Right of Stoppage in Transitu (Arts. 1530-
1532, 1535, 1636[2])
• Special Right of Resale (Art. 1533)
• Special Right to Rescind (Art. 1534)

a. When Is There “Installment Sale”?

 b. Contracts to Sell Movables Not Covered
c. Unpaid Seller’s Remedies Not Cumulative,
But Alternative and Exclusive.
d. Remedy of Specific Performance
e. Remedy of Rescission
f. Remedy of Foreclosure
g. Purported Lease with Option to Buy

4. IN CASE OF IMMOVABLES:
a. Anticipatory Breach (Art. 1591)
b. Sales of Subdivision Lots and Condominium
Units (P.D. 957)

5. MACEDA LAW: SALES OF RESIDENTIAL REALTY ON

INSTALLMENTS (R.A. 6552)

a. “Role” of Maceda Law

b. Transactions Covered
c. How to Determine Years of Installments
d. How Cancellation of Contract Can Be
Effected

6. RESCISSION ON SALES OF NON-RESIDENTIAL

IMMOVABLES ON INSTALLMENTS (Arts. 1191 and 1592)

B. REMEDIES OF THE BUYER

1. In the Case of Movables (Arts. 1598-1599)

2. In the Case of Immovables (Arts. 1191; Secs.

23 and 24, P.D. 957)
3. Suspension of Payment (Art. 1590)

XI. REMEDY OF RESCISSION IN SALES OF

IMMOVABLES: CONTRACT OF SALE VERSUS
CONTRACT TO SELL

A. NATURE OF REMEDY OF RESOLUTION (Arts. 1191,

1479, 1592)
1. Distinguishing from Other Remedy of Rescission
2. Remedy of Rescission (Resolution) Is Inherent in
the Reciprocity of Sale
 3. Power to Rescind Generally Judicial in Nature
4. Mutual Restitution and Forfeiture (Art. 1385)

B. DISTINCTIONS BETWEEN CONTRACT OF SALE AND

CONTRACT TO SELL

1. CONTRACT OF SALE versus CONTRACT TO SELL (Art.

1458)

***Read pp. 274 to 450 of Reference