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Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. (n) Rule: Ownership is not transferred by perfection but by delivery. Kinds of delivery: 1. Actual (Art. 1497)- refers to the physical transfer 2. Constructive (Arts. 1498-1501), including any other manner signifying an agreement that the possession is transferred. (Art. 1496) Art. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price. (n) General Rule: Ownership is transferred upon delivery, actual or constructive. Exceptions: 1. Pactum reservati dominii or contractual reservation of title- even if the thing is delivered, the ownership may still be with the seller till full payment of the price is made, if there is stipulation to this effect (autonomy of contracts). 2. Contract to sell 3. Contract of insurance Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable. An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. (1451a) 1st par: Mutual Promise- bilateral promise to buy and sell reciprocally accepted. Note. This is as good as a perfected sale. Parties are given the right to exact fulfillment or damages in case of non-fulfillment. It is reciprocally demandable; hence, requires NO consideration separate from the price. 2nd par: Accepted Unilateral Promise (to buy/to sell) - only one makes the promise. Note: It is binding on the promissor only only if the promise is supported by a consideration distinct from the price (option money). The acceptance must be plain, clear and unconditional. Policitation- unaccepted imperfect promise or offer Option- privilege existing in one person for which he has paid a consideration that gives him the right to buy/sell a thing from another person. Option contract- a contract granting a person the privilege to buy or not to buy certain objects at any time within the agreed period at a fixed price. Note the following cases: Reconciling cases Atkins Kroll & Co. vs. Cu Hian Tek and Southwestern Sugar & Molasses Co. vs. A.G. & P. Co: A bilateral promise to buy and sell requires

NO consideration distinct from the selling price; it is only the accepted unilateral promise to BUY or SELL that needs such distinct consideration. There is really difference between acceptance of an offer to sell (without promising to buy) and an acceptance that impliedly promise to buy. Sanchez vs. Rigos: In an accepted unilateral promise to sell, since there may be no valed contract without cause or consideration, the promissor is not bound by his promise and may, accordingly withdraw it. Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted results in a perfected contract of sale. Natino vs. IAC: Repurchase (or resale) vs. Redemption. The promise or assurance given by the bank, to the effect that petitioners can redeem the property as soon as they have the money, took place after the expiration of the redemption period this could only relate to a matter of resale of the property (only an accepted unilateral promise to sell). There being no consideration separate from the price, it will not bind the promissor. Art. 1480. Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the perfection of the contract to the time of delivery, shall be governed by Articles 1163 to 1165, and 1262. This rule shall apply to the sale of fungible things, made independently and for a single price, or without consideration of their weight, number, or measure. Should fungible things be sold for a price fixed according to weight, number, or measure, the risk shall not be imputed to the vendee until they have been weighed, counted, or measured and delivered, unless the latter has incurred in delay. (1452a) Who bears the risk of loss? 1. Before perfection- seller bears the loss 2. After delivery- buyer bears the loss Reason for 1 & 2: Res perit domino Principle- the owner bears the loss 3. At the time of perfection- Contract is void and inexistent. [Art. 1409(3)] 4. After perfection but before delivery- buyer bears the loss as exception to res perit domino principle. (Art 1262 & 1163-65) BUT General Rule: Who bears the risk of loss is governed by stipulations of the contract. In the absence of any stipulation, the buyer bears the loss under Art. 1262, except when: a. Object sold consists of fungibles for a price fixed according to weight, number or measure; b. Seller is guilty of fraud, negligence, default or violation of contractual terms; or

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c. Object sold is generic. Genus nunquam perit. Art. 1480 vs. Art. 1454: 1480 refers to the period between the perfection of the contract of sale but before actual of constructive delivery, whereas 1504 refers to the period when the goods had in fact been actually or constructively delivered. Art. 1481. In the contract of sale of goods by description or by sample, the contract may be rescinded if the bulk of the goods delivered do not correspond with the description or the sample, and if the contract be by sample as well as description, it is not sufficient that the bulk of goods correspond with the sample if they do not also correspond with the description. The buyer shall have a reasonable opportunity of comparing the bulk with the description or the sample. (n) Sale by description: There is a warranty that the thing sold corresponds to the representations or descriptions. Sale by sample: the exhibition must have been the sole basis or inducement of the sale. Sale by description AND sample: must satisfy the requirement in both, and not only one (two-fold warranty). Art. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract. (1454a) Earnest money or arras- something of value to show that buyer was really in earnest, and given to the seller to bind the bargain. It is considered: 1. Part of the purchase price 2. As proof of the perfection the contract. Distinguished from Option Money- EM applies to a perfected sale; the money is part of the purchase price; and buyer is required to pay the balance. On the other hand, OM applies to a sale not yet perfected; money is not part of the purchase price; and the would-be buyer is not required to buy. Art. 1483. Subject to the provisions of the Statute of Frauds and of any other applicable statute, a contract of sale may be made in writing, or by word of mouth, or partly in writing and partly by word of mouth, or may be inferred from the conduct of the parties. (n) Sale thru an Agent- Agent;s authority must be in writing, otherwise VOID. (Art. 1874). Note: Public instrument is not essential to the validity of the sale.

Art. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies: (1) Exact fulfillment of the obligation, should the vendee fail to pay; (2) Cancel the sale, should the vendee's failure to pay cover two or more installments; (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. (1454-A-a) RECTO LAW- provides remedies of vendor in sale of personal property by installment. The Note: remedy no. 1 excludes 2&3 but remedies 2&3 do not exclude 1. Requisites: C A P I (4) 1. The must be contract; 2. The contract must be one of absolute sale; 3. What is sold is personal property; and 4. Sale must be on installment plan Installment- any part or portion of the buying price, including the down payment Note: Rule does not apply to (1) sale on straight terms or cash sale (where after an initial payment, the balance is paid in its totality at the time specified, say, 2 or 3 months later, and also to (2) sale of real property as this is governed by Maceda Law. Rule: The remedies are alternative and exclusive. However, for this doctrine to apply, the remedy must already have been fully exercised. Remedy No. 1- refers to action for specific performance Remedy No. 2- refers to cancellation. Once exercised, it requires Mutual Restitution. Remedy No. 3- refers to foreclosure of chattel mortgage. There must be ACTUAL foreclosure to bar exercise of other remedies. No deficiency judgment (and any stipulation to this effect shall be void for being contrary to law). Foreclosure- sale of the goods at public auction. Art. 1485. The preceding article shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. (1454-A-a) PURPOSE: to prevent an indirect violation of 1484. Art. 1486. In the case referred to in two preceding articles, a stipulation that the installments or rents paid shall not be returned to the

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vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances. (n) Art. 1487. The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary. (1455a) Art. 1488. The expropriation of property for public use is governed by special laws. (1456). CHAPTER 2 CAPACITY TO BUY OR SELL Art. 1489. All persons who are authorized in this Code to obligate themselves, may enter into a contract of sale, saving the modifications contained in the following articles. Where necessaries are those sold and delivered to a minor or other person without capacity to act, he must pay a reasonable price therefor. Necessaries are those referred to in Article 290. (1457a) Art. 1490. The husband and the wife cannot sell property to each other, except: (1) When a separation of property was agreed upon in the marriage settlements; or (2) When there has been a judicial separation or property under Article 191. (1458a) Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: (1) The guardian, the property of the person or persons who may be under his guardianship; (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; (3) Executors and administrators, the property of the estate under administration; (4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale; (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with

the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. (6) Any others specially disqualified by law. (1459a) Art. 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption, compromises and renunciations. (n) CHAPTER 3 EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST Art. 1493. If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost, the contract shall be without any effect. But if the thing should have been lost in part only, the vendee may choose between withdrawing from the contract and demanding the remaining part, paying its price in proportion to the total sum agreed upon. (1460a) Art. 1494. Where the parties purport a sale of specific goods, and the goods without the knowledge of the seller have perished in part or have wholly or in a material part so deteriorated in quality as to be substantially changed in character, the buyer may at his option treat the sale: (1) As avoided; or (2) As valid in all of the existing goods or in so much thereof as have not deteriorated, and as binding the buyer to pay the agreed price for the goods in which the ownership will pass, if the sale was divisible. (n) CHAPTER 4 OBLIGATIONS OF THE VENDOR SECTION 1. - General Provisions Art. 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale. (1461a) Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified

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in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. (n)