Chapter 5 – Obligations of the Vendee Articles 1582 to 1593 the property used in the operation of the same, should be

approved by the Public Service Commission –– for the protection

Article 1582. Principal Obligations of the Buyers af the public, still as between A and B, the contract is effi cacious
as all the essential requisites of the contract were present at the
The vendee is bound to accept delivery and to pay the price of the thing time of the perfection thereof.
sold at the time and place stipulated in the contract.
Note: Unless the deed of conveyance is executed, the buyer as a
If the time and place should not have been stipulated, the payments rule is not required to pay the price. (Lafont v. Pascasio, 5 Phil.
must be made at the time and place of the delivery of the thing sold. 391)

Principal Obligations of the Buyers Effect of Delivery When No Time Has Been Fixed for Payment of the
The buyers must: Price
a) accept delivery; If seller has delivered but no time has been fixed for the payment of
b) pay the price the price, the seller may require payment to be made at any time
after delivery. The buyer here has the duty to pay the price
Bar Question immediately upon demand. (Ocejo v. Int. Bank, 37 Phil. 631).
On Jan. 5, A sold and delivered his truck, together with the
corresponding certificate of public convenience to B for the sum of Effect of Deviations from the Contract
P600,000, payable within 60 days. Two weeks after the sale, and If the seller is forced to deviate from the provision of the contract,
while the certificate of public convenience was still in the name of A, but the purchaser consents or agrees to such deviations, the
it (the certificate) was revoked by the Public Service Commission thru purchaser should still pay the price. (Engel v. Velasco & Co., 47 Phil.
no fault of A. Upon the expiration of the 60-day period, A demanded 15)
payment of the price from B. B refused to pay, alleging that the
contract of sale was VOID for the reason that the certificate of public
convenience which was the main consideration of the sale no longer
existed. Is the contention of B tenable? Reasons.

ANS.: Under the circumstances, the contention of B is NOT tenable.

a) Firstly, it cannot be correctly contended that the sale is void,

since the consideration actually existed at the time of the
perfection of the sale. The subsequent revocation of the
certificate thru no fault of A is immaterial.
b) Secondly, what B should have done immediately after the sale
was to take steps to have the Public Service Commission transfer
the certificate to his name. (Serrano v. Miave, et al., L-14678,
Mar. 31, 1965).
c) Thirdly, while the Public Service Law requires that the sale or
assignment of a certifi cate of public convenience, together with

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Article 1583. Generally No Delivery By Installments goods shall not be delivered by the carrier to the buyer until he has paid
the price, whether such terms are indicated by marking the goods with
Unless otherwise agreed, the buyer of goods is not bound to accept the words “collect on delivery,” or otherwise, the buyer is not entitled to
delivery thereof by installments. examine the goods before the payment of the price, in the absence of
agreement or usage of trade permitting such examination.
Where there is a contract of sale of goods to be delivered by stated
installments, which are to be separately paid for, and the seller makes Generally, the buyer is entitled to examine the goods prior to
defective deliveries in respect of one or more installments, or the buyer delivery. And this is true even if the goods are shipped F.O.B. (free
neglects or refuses without just cause to take delivery of or pay for one on board). (See Decezo v. Chandler, 206 N.Y.S.).
or more installments, it depends to each case on the terms of the
contract and the circumstances of the case, whether the breach of When Buyer Has No Right to Examine
contract is so material as to justify the injured party in refusing to a) when there is a stipulation to this effect. (Art. 1584, par. 1).
proceed further and suing for damages for breach of the entire contract, b) when the goods are delivered C.O.D. — unless there is an
or whether the breach is severable, giving rise to a claim for agreement or a usage of trade PERMITTING such examination.
compensation but not to a right to treat the whole contract as broken. (Art. 1584, par. 2).

Generally No Delivery By Installments Article 1585. When There is Acceptance of the Goods
Reason: performance must generally be complete.
Exception to Rule: express provisions. The buyer is deemed to have accepted the goods when he intimates to
the seller that he has accepted them, or when the goods have been
Rule in Case of Installment Deliveries delivered to him, and he does any act in relation to them which is
The second paragraph states the rules for delivery by installments, inconsistent with the ownership of the seller, or when, after the lapse of
and distinguishes whether the breach is severable or not. a reasonable time, he retains the goods without intimating to the seller
that he has rejected them.
Article 1584. When Buyer Has Right to Examine
The Article gives three ways of accepting the goods:
Where goods are delivered to the buyer, which he has not previously a) express acceptance
examined, he is not deemed to have accepted them unless and until he b) when buyer does an act which only an owner can do
has had a reasonable opportunity of examining them for the purpose of c) failure to return after reasonable lapse of time
ascertaining whether they are in conformity with the contract if there is
no stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of goods to the
buyer, he is bound, on request, to afford the buyer a reasonable
opportunity of examining the goods for the purpose of ascertaining
whether they are in conformity with the contract.

Where goods are delivered to a carrier by the seller, in accordance with

an order from or agreement with the buyer, upon the terms that the

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Article 1586. Even if Buyer Accepts, Seller Can Still Be Liable Article 1588. Effect if Buyer Unjustifi ably Refuses to Accept the
Delivery
In the absence of express or implied agreement of the parties,
acceptance of the goods by the buyer shall not discharge the seller from If there is no stipulation as specifi ed in the fi rst paragraph of article
liability in damages or other legal remedy for breach of any promise or 1523, when the buyer’s refusal to accept the goods is without just cause,
warranty in the contract of sale. But, if, after acceptance of the goods, the title thereto passes to him from the moment they are placed at his
the buyer fails to give notice to the seller of the breach in any promise of disposal.
warranty within a reasonable time after the buyer knows, or ought to
know of such breach, the seller shall not be liable therefor. Generally, the buyer becomes the owner. Exception — when there is a
contrary stipulation or when the seller reserves the ownership as a sort
Even if Buyer Accepts, Seller Can Still Be Liable of security for the payment of the price. (See Arts. 1523 and 1503, Civil
a) Reason for the last sentence. To prevent afterthoughts or belated Code).
claims.
b) The buyer is allowed to set up the breach of the warranty or promise Article 1589. When Buyer Has to Pay for Interest on the Price
as a set-off or counterclaim for the price. (William v. Perrota, 95
Conn. 629). The vendee shall owe interest for the period between the delivery of the
thing and the payment of the price, in the following three cases:
Article 1587. Effect if Buyer Justifiably Refuses to Accept the Delivery
1) Should it have been so stipulated;
Unless otherwise agreed, where goods are delivered to the buyer, and he 2) Should the thing sold and delivered produce fruits or income;
refuses to accept them, having the right to do, he is not bound to return 3) Should he be in default, from the time of judicial or extrajudicial
them to the seller, but it is sufficient if he notifies the seller that he demand for the payment of the price.
refuses to accept them. If he voluntarily constitutes himself a depositary
thereof, he shall be liable as such. This Article answers the question: “In what cases is the buyer liable
for interest on the price?”
Effect if Buyer Justifiably Refuses to Accept the Delivery
a) buyer has no duty to return the goods to the seller Note: If the buyer fails to give the money after the contract is
b) mere notification to seller of refusal will suffice notarized, although he had previously promised to do so, there is
c) but buyer may make himself a voluntary depositary –– in which case default with liability for legal interest. (De la Cruz v. Legaspi, L-8024,
he must safely take care of them in the mean time Nov. 29, 1955).

The Three Cases Contemplated

a) In No. (1), no demand is needed
b) In No. (2), the reason for the law is that the fruits or income is
sufficient to warrant the payment of interest.
c) In No. (3), “default” is mora, called “in delay” under the
provisions of the Civil Code.

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 Rule for Monetary Obligations he (Ruiz) was a co-owner of Alegria of the properties purchased, and
In a monetary obligation (like the obligation to pay the purchase that he was not in conformity with the sale. Suit was brought by
price) in the absence of stipulation, legal interest takes the place of Alegria for the recovery of the balance. While the suit was pending,
damages. This is so even if the damages are actually more or less. Alegria caused the disturbance over the ownership to cease by
The possibility of gain because of an investment should be compromising with Ruiz for the latter’s share. Issue: Aside from
discounted; instead of a gain, there might be a loss. Therefore, the paying the balance, does Bareng have to pay any legal interest
law has compromised on legal interest. (Quiros v. Tan Guinlay, 6 Phil. thereon? If so, from what time?
675).
HELD: Bareng is liable for interest, not from the time of demand —
Article 1590. When Buyer May Suspend the Payment of the Price for he was justifi ed in suspending payment from the time he learned
of Ruiz’s adverse claims –– but from the time Alegria had “caused the
Should the vendee be disturbed in the possession or ownership of the disturbance or danger to cease” by entering into compromise with
thing acquired, or should he have reasonable grounds to fear such Ruiz. The compromise Bareng knew about –– for he was a party in
disturbance, by a vindicatory action or a foreclosure of mortgage, he may the case.
suspend the payment of the price until the vendor has caused the
disturbance or danger to cease, unless the latter gives security for the Article 1591. When Seller May Immediately Sue for the Rescission of
return of the price in a proper case, or it has been stipulated that, the Sale
notwithstanding any such contingency, the vendee shall be bound to
make the payment. A mere act of trespass shall not authorize the Should the vendor have reasonable grounds to fear the loss of
suspension of the payment of the price. immovable property sold and its price, he may immediately sue for the
rescission of the sale.
The buyer may SUSPEND the payment of the price if:
a) There is a well-grounded fear (fundado temor). Should such ground not exist, the provisions of Article 1191 shall be
b) The fear is because of observed.
1) a vindicatory action or action to recover, or
2) a foreclosure of mortgage. The seller must have reasonable grounds to fear:
a) LOSS of the immovable property sold, and
Note: b) LOSS of the price.
a) The fear must not be the result of any other ground, like the
vendor’s insanity. So, if the buyer is squandering his money, but the immovable
b) A mere act of trespass is made by one claiming no legal right property remains untouched, this article cannot apply.
whatsoever. Here, the buyer is not authorized to suspend the
payment of the price. Rule if Neither Ground Exists
If neither ground exists, Art. 1191 applies.
Bareng v. Court of Appeals, et al. L-12973, Apr. 25, 1960
FACTS: Bareng bought cinematographic equipment from a certain
Alegria for P15,000. He paid P11,400 down, and executed a
promissory note for the balance. On the date of maturity, he refused
to pay the balance, alleging that a certain Ruiz had informed him that

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Article 1592. Rescission of Sale of Real Property objected to, without judicial intervention and determination. (Nera v.
Vacante, et al., L-16725, Nov. 29, 1961).
In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the Article 1593. Rescission of Sale of Personal Property
rescission of the contract shall of right take place, the vendee may pay
even after the expiration of the period, as long as no demand for With respect to movable property, the rescission of the sale shall of right
rescission of the contract has been made upon him either judicially or by take place in the interest of the vendor, if the vendee, upon the
a notarial act. After the demand, the court may not grant him a new expiration of the period fixed for the delivery of the thing, should not
term. have appeared to receive it, or having appeared he should not have
tendered the price at the time, unless a longer period has been stipulated
This is only applicable to a sale of real property, not to a contract TO for its payment.
SELL real property or to a promise TO SELL real property, where title
remains with the vendor until fulfillment of a positive suspensive This article should apply only if the object sold has not been
condition, such as the full payment of the price. (Manuel v. delivered to the buyer.
Rodriguez, L-13436, Jul. 27, 1960).
If there has already been delivery, other articles, like Art. 1191 would
This article applies whether or not there is a stipulation for automatic be applicable. In this case automatic rescission is not allowed. An
rescission. The law says “even though.” affirmative action is necessary (Guevarra v. Pascual, 12 Phil. 311),
the action being one to rescind judicially, if the buyer refuses to
The demand may be: come to amicable settlement. (Escueta v. Pando, 42 O.G., No. 11, p.
a) Judicial 2759).
b) extrajudicial (this must however be by notarial act).
Example of the Article
The demand is not for the payment of the price, but for the The seller and the buyer agreed that payment and deliv ery would be
RESCISSION of the contract. (10 Manresa 288). If the demand for made on Jul. 15, at the buyer’s house. If the buyer does not appear
such rescission comes only AFTER the offer to pay the balance on said day, or having appeared, he should not have tendered the
(accompanied by a postal money order for the amount due), the price at the same time, then the sale can be considered as
automatic rescission cannot of course legally take place. (Maximo, et automatically rescinded.
al. v. Fabian, et al., L-8015, Dec. 23, 1955).
Right, Not Obligation, to Rescind
The demand is not for the payment of the price BUT for the If in a contract the seller is authorized to rescind the sale in case of
RESCISSION of the contract. (Manresa, Vol. 10, p. 288). breach, this does not necessarily mean that he is obliged to do so.
(Ramirez v. Court of Appeals & Muller Nease, L-6536, Jan. 25, 1956,
Effect of Stipulation Allowing the Taking of Possession 52 O.G. 779).
Incidentally, a stipulation in a contract to sell realty entitling one
party to take possession of the land and building if the other party
violates the contract does NOT exproprio vigore (by its own force)
confer upon the former the right to take possession thereof if

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