LAW ON SALES The seller warrant the The agent makes no warranty as

thing sold long as he acts within the scope

DEFINITION OF CONTRACT OF SALE of his authority and in the name
of the seller
- A contract of sale is a contract whereby one of the parties The buyer can deal with The agent must act and is bound
(SELLER/VENDOR) obligates himself to deliver something the thing sold as he according to the instruction of his
(DETERMINATE) to the other (BUYER/VENDEE), who on his part, pleases being the principal
binds himself to pay thereof a sum of money or its equivalent. owner
(PRICE).
- It is one where the two parties called vendor/seller and the CONTRACT OF SALE vs. PAYMENT BY CESSION
vendee/buyer had a meeting of the minds over the subject matter
or the object of sale as well as the price thereof. No pre-existing credit There is a pre-existing credit
Creates obligations Extinguished obligations
CONTRACT OF SALE vs. DACION EN PAGO The cause is the price The cause is the extinguishment
(seller) (debtor)
No pre-existing credit There is a The cause is the The cause is the assignment of
pre-existing credit delivery of the object the things to be sold (creditor)
Obligation arise Obligation extinguished (buyer)
Consideration is price Cause is extinguishment of Greater freedom in Less freedom in fixing the price
obligation fixing the price because of the pre-existing credit
The parties engaged has The price of the thing is dictated Ownership is Creditors do not become the
more freedom in the by the pre-existing credit transferred to the buyer owner of the property assigned
fixing of the price to them but merely given the
The payment of the The payment of the price is right to sell
price is equivalent into equivalent into a fulfillment of
a fulfillment of a resolutory condition.
suspensive condition. CONTRACT OF SALE vs. CONTRACT TO SELL w/ reserved title

CONTRACT OF SALE vs. CONTRACT OF LEASE Title passes to the If it is stipulated that the thing
Seller transfer Merely transferred the USE & buyer upon delivery of ownership shall not pass until he
ownership to buyer POSSESSION of the thing leased the thing(IF SILENT: the has fully paid, ownership is
Has contingencies Lease Purchase: Option fee buyer took possession reserved in the seller
Obligates both parties Lease Purchase: Obligates the of the property upon
to act seller does not obligate the buyer execution, it is an
to buy. absolute sale)
Non-payment of the Payment in full of the price is a
CONTRACT OF SALE vs. PIECE OF WORK price is a negative POSITIVE SUSPENSIVE
RESOLUTORY CONDITION (prevent the seller to
The thing transferred is Labor or materials for a piece of
CONDITION (exact convey title)
the one which would work, transferred is one not in
fulfillment/ rescind)
have existed even if the existence & which never would
Note: if it executes a Note: automatic rescission upon
order have not given have existed but for the order of
deed of sale upon full non-payment within the period is
the other party desiring to
payment of the price it valid
acquire it
is a contract to SELL
The risk of loss is borne The risk of loss is borne by the
If the thing is lost the When the thing is lost, the seller
by the buyer worker/ contractor not by
buyer shall suffer the shall suffer the loss
employer
loss
Within the Statute of Not within the Statute of Frauds.
Frauds
If it is manufactured for It is only manufacture because of
ELEMENTS OF A CONTRACT OF SALE
the general market the employer
Essential Natural Accidental
CONTRACT OF SALE vs. BARTER CONSENT refers to the Deemed to exist Present only if
The consideration is in The consideration is another meeting of the minds unless excluded stipulated
money thing or the exchange of 2 things by the parties over the
subject matter and
with respect to the
transfer of ownership
IN THE CASE IN WHICH THE THING GIVEN IN EXCHANGE CONSISTS OF PARTLY and payment of price
IN MONEY AND PARTLY IN ANOTHER THING. OBJECT refers to the Warranty against Time & place of
- Take in to account the MANIFESTATION of the parties by taking into subject matter of eviction payment
account the contemporaneous and subsequent acts of the parties. contract
- If the intention cannot be ascertained it is barter if the value of the PRICE should be in Warranty against
thing excess the amount of the money or its equivalent. sum certain in money. hidden defects
- Note: if one of the essential elements of sale is absent, there can
be no contract of sale. (VOID)

CONTRACT OF SALE vs. AGENCY TO SELL 3 STAGES IN A CONTRACT OF SALE

Ownership passes to Ownership is retained by the
the buyer principal 1. PREPARATION – negotiation in progress
Cannot return the The agent can return the object 2. PERFECTION – meeting of minds, birth of contract
object sold (as a rule) in case he is unable to sell it
 3. CONSUMMATION – when the object is delivered & the price is b) Note: it is determinable if it is capable of being made
paid; this is the death of the contract without the necessity of a new or further agreement to
ascertain its identity otherwise, VOID.
CLASSIFICATION OF SALE 3. It must be licit or lawful
a) Q: can be an owner of a specific thing sell an undivided
1. As to the nature of the subject matter
share or interest of the specific thing?
a. Sale of REAL or IMMOVABLE
A: YES, if you became a co-owner of a thing (undivided),
b. Sale of PERSONAL or MOVABLE
you can sell your share even without the consent of the
2. As to the nature of the object of sale
other co-owner
a. CHOSE IN POSSESSION - Sale of PROPERTY (tangible or
b) Note: an owner of a mass of goods may sell only an
corporal)
undivided share thereof,: if the later on it be discovered
b. CHOSE IN ACTION - Sale of RIGHT (copyright, trademark,
that the mass of goods contains less than what was sold,
goodwill)
the buyer becomes the owner of the whole mass. The
3. As to validity or defect of the transaction (validity)
seller shall supply whatever is lacking.
a. Valid sale d. Unenforceable sale
c) Note: the ownership passes to the buyer by the
b. Rescissible sale e. Void sale
intention of the parties. Also, the risk of loss is borne by
c. Voidable sale
the owner & co-owner.
4. As to presence or absence of condition
a. Absolute sale – no condition attached CAN A THING SUBJECT TO RESOLUTORY CONDITION BECOME AN OBJECT OF
b. Conditional sale – subject to contingent event A SALE?
5. As to whether wholesale or retail
a. Wholesale – goods are sold for profit, large in quantity - YES
b. Retail – goods are sold directly to the general public - Note: in defining the contract of sale, we simply define the object
(small quantity) buyer becomes the owner. or the prestation.
6. As to payment of price o Seller prestation – DELIVER & TRANSFER OWNERSHIP
a. Cash sale – under a cash sale, the payment is tendered o Buyer prestation – PAY THE PRICE CERTAIN IN MONEY
by the buyer upon the delivery of the thing. It is OR ITS EQUIVALENT
simultaneously happening, you pay as you receive the
object. E.g. canteen or cashier. IF THE PRICE IS SIMULATED WHAT HAPPENS
b. Installment sale – there is a division in payments. There
- The sale is VOID. But can be valid as donation otherwise VOID. If
is a down payment or it depends on the agreed term.
there is no intention to be bound at all.
You pay down payment and receive the object and pay
the remaining in installment CAN THERE BE A SITUATION WHEREIN A PRICE IS SIMULATED AND YET THE
c. Straight term – it is a one-time deferred payment. It is a CONTRACT OF SALE IS VALID? WHEN?
deferred payment or deferred cash sale. It is a sales
transaction where the parties agreed to a one-time - Yes, when there is a relative simulation, because in relative
deferred payment. simulation there is an intention to be bound by obligation.
7. As to proximate inducement for the sale
a. Sale by sample – the contract solely w/ reference to the EXAMPLE (RELATIVE): I HAVE SOLD TO YOU A PARCEL OF LAND BECAUSE YOU
sample if it does not correspond with the sample shown OFFERED TO BUY IT. I OFFERED TO YOU A PRICE OF 100 MILLION BUT THEN I
the contract is RESCISSIBLE. SAID THAT I WILL ONLY SELLD THE LAND FOR YOU FOR 100 MILLION BUT WE
b. Sale by description – the goods must correspond to the WILL MAKE IT APPEAR IN THE DEED OF SALE AS AMOUNT OF ONLY 50,000,000.
description otherwise RESCISSIBLE. However, if the
FACTS: THE PRICE IS SIMULATED. WHEN I PAY THE CAPITAL GAINS TAX, I WILL
goods delivered tally with the description even if the
EITHER PAY AT A PRICE OF 50,000,000 OR THE ZONAL VALUE, WHICHEVER IS
intention of the buyer is not fitted, the contract
HIGHER (TAX EVASION) NOT AT 100 MILLION.
CANNOT BE RESCINDED
c. Sale by sample and description – if it does not NOTE: ALWAYS REMEMBER IT IS NOT THE PAYMENT THAT TRANSFERS
correspond to both, the contract may be RESCINDED. OWNERSHIP, IT IS THE DELIVERY OF THE THING.
d. –
e. – EXAMPLE (ABSOLUTE): ATTY PADILLA SAID “NO ONE OF YOU WILL GET A
PASSING GRADE IN THIS SUBJECT IF YOU CANT CREATE A DEED OF SALE”. ALL
WHAT ARE THE REQUISITES FOR A VALID OBJECT OF THE STUDENTS FINDS THEMSELVES A PAIR AND CREATED A DEED OF SALE.
EVERYTHING WILL BEE SIMULATED INCLUDING THE PRICE. IN THIS CASE, YOU
1. It must exist or with a potential existence
DON’T REALLY INTEND TO BE BOUND BY AN OBLIGATION TO SELL
o Rule: the sale of a mere hope or expectancy is deemed
SOMETHING, THEREFORE IT IS ABSOLUTE SIMULATED (VOID).
subject to the condition that the thing will come into
existence (VALID). The sale of VAIN HOPE is VOID
o Note: the thing sold must be specific and identified and
they must also owned by the seller at the time of HOW DO YOU KNOW WHETHER THE PRICE IS CERTAIN IN MONEY OR ITS
delivery. EQUIVALENT?
o Note: the sale of future goods is valid only as an
executory contract to be fulfilled by delivery and - Instances when the price is certain.
acquisition o When it is stipulated
o Note: if goods manufactured is made especially and not o When it is with reference to another thing which is
in the normal course of business it must be considered certain
for a PIECE OF WORK o When it is fixed by a third person
2. It must be determinate or at least determinable o When it is fixed by the court
a) Note: it is not necessary that the thing sold must be in o In cases of securities, there is a fixed price on such day
sight available in the market or the said amount is certain.
 - Note: a mere inadequacy in price does not affect its validity. MACEDA LAW (REALTY INSTALLMENT BUYERS PROTECTION ACT)
However low price indicates defect in the consent. The contract
may be annulled not because of the low price but because of the - Applicable to sale of immovable property
vitiated consent. - Situation: when you purchase a car payable in 60 months and after
12 months you stop payment. You can found the remedy of the
WHO SHALL FIX THE PRICE? seller in 1484 and the buyers protection in recto or maceda law
(depends on whether movable or immovable)
- Third party
- Left to the judgment of a specified (not a contracting party) IF IN A CONTRACT OF LEASE THERE IS AN OPTION TO PURCHASE, WILL YOU
APPLY THE SAME RULE; PROVIDED FOR UNDER 1484 IN CONNECTION WITH
IF THE PRICE IS NOT FIXED BUT THE OBJECT HAS BEEN DELIVERED AND MACEDA OR RECTO LAW
APPROPRIATED BY THE BUYER. WHAT IS THE RULE TO BE FOLLOWED?
- YES
- The buyer must pay a REASONABLE price therefore. It is generally
the market price at the time and place fixed by the contract or by WHO SHALL BEAR THE COST OF SALE?
law.
- Shall be borne by the seller unless there is a stipulation to the
WHAT WILL BE THE RULE WHICH MUST PREVAIL WHEN THERE HAS BEEN AN contrary, it can be the buyer or shared expenses
OFFER TO SELL OR OFFER TO BUY WHICH IS ACCEPTED?
WHAT IS AN EXPROPRIATION SALE?
1. Perfection, it is perfected by the fall of the hammer.
2. Owner’s right to withdraw goods from auction sale - Involuntary sale – the state can takeover private properties for
o Before – can withdraw unless there was an public use. YOU HAVE NO CHOICE.
announcement that it is WITHOUT RECOURSE
o After – owner can no longer withdraw LAW ON SALES (ATTY PADILLA)
3. Bidder’s right to retract his bid
SCENARIO: JOB, JEMAR, AND JOE (SELLER) AGREED TO SELL THEIR PSP TO ATTY
o before – can retract
PADILLA, THEY AGREED THAT ATTY WILL BE THE ONE WHO WILL FIX THE PRICE.
o after – can no longer retract
SELLERS DELIVERED THE THING TO ATTY. ATTY STARTED TO USE THE PSP,
WHEN A UNILATERAL OFFER TO SELL OR AN OFFER TO BUY WHICH IS SELLERS GOES TO ATTY PADILLA AFTER A WEEK TO ASK FOR PAYMENT OF THE
ACCEPTED AND UNACCEPTED? PSP. THEN ATTY PADILLA SAID “YOU SAID TO ME THAT AND WE AGREED THAT
I WILL BE THE ONE WHO WILL FIX THE PRICE, SORRY I HAVE NOT DECIDED YET
- Not accepted: does not produce legal effect ON HOW MUCH I MUST PAY YOU”
- Accepted: if acceptance is made before withdrawal it is a binding
sale. IS THE CONTRACT OF SALE VALID? IF IT IS VALID, THAT MEANS I HAVE A
- OPTION CONTRACT – giving a person a certain period to accept the PRESTATION TO PAY. IF IT IS OTHERWISE, THAT MEANS I HAVE NO RIGHT TO
offer USE THE PROPERTY AND YOU HAVE NO RIGHT TO ASK ME FOR PAYMENT. IF
- OPTION PERIOD – period given within the offeree to accept the IT IS VALID WHAT IS YOUR BASIS OF THE PRICE CERTAIN THAT I NEED TO
offer PAY?
OPTION MONEY vs. EARNEST MONEY
- If the price has not been fixed/ascertained based on (1469-1473).
Paid in consideration Proof of perfection (deducted
1474 is signed by law to protect the seller who has delivered the
for the option from the total price)
object. To protect against any available taking advantage by the
Distinct consideration Partial payment
for the money paid buyer by simple reasoning that “there is no price fixed”. The buyer
Not required to buy Bound to pay the balance must pay the price based on fair market value.
Not yet a sale Already a sale
WHEN CAN A SELLER DEMAND PAYMENT FOR A PRICE BASED ON FMV?
- Note: under 1480, the rule is the buyer must still pay for the price - When there is no price which has been fixed in accordance with the
if the object loss after perfection before the delivery. 1504, the rule agreement of the parties, or in accordance with the decision of the
“RES PERIT DOMINO” – whoever the owner shall bear the burden party designated by the parties. However, 1474 can only be used if
of loss the thing delivered has been USED. He must pay a price based on
FMV of the object.
EXAMPLES OF CONTRACT OF SALES WHICH ARE VALID BUT CANNOT BE
- Note: if the buyer had not appropriated (use) it, you cannot
ENFORCED BECAUSE IT VIOLATES THE STATURE OF FRAUDS. (Analyze!!!)
demand a price from the buyer.
1. Sale of personal property at a price not less than 500
EXPLANATION OF THE PRECEEDING ARTICLES BEFORE
2. Sale of real property orally
3. Sale of property not be performed within 1 year - Note: under 1473, fixing of the price cannot be designated to one
of the contracting parties alone. (General rule)
WHAT ARE THE RIGHTS OF THE SELLER IN CASE THE BUYER BECOME IN
Because contract of sale is a consensual contract and that means
ARREARS AND WHEN THE BUYER FAILS TO PAY THE PRICE? WHAT ARE THE
there is a meeting of the minds, if only one of the parties will
AVAILABLE PROTECTION TO HIM UNDER THE LAW? (1484)
determine the price how can there be a meeting of the minds.
1. Exact fulfillment - Note: the general rule is the one who shall fix the price is both
2. Cancel the sale if fail to cover 2 or more installments buyer and seller
3. Foreclosure of the chattel mortgage if fail to cover 2 or more
CAN THERE BE AN EXEMPTION?
installments.
- Yes, if the parties stipulated that only one of the parties will be the
RECTO LAW (INSTALLMENT OF BUYERS MOVABLE)
one who shall fix it subject to the ACCEPTANCE of the other.
- To remedy the abuses committed in connection with the
foreclosure chattel mortgage.
 - Note: under the characteristic of the “mutuality” of the contract, 4. Undue influence
the will of one of that parties cannot be imposed by the other. 5. Mistake / Error
Mutuality refers to the participation by both of the parties.
- Note: under 1469, the price shall be considered certain in money IF THE CONTRACT IS DEFECTIVE DUE TO VITIATED CONSENT WHAT WILL BE
in the following: THE RIGHT OF THE VICTIM?
o The parties have fixed/agreed upon a definite amount - Voidable = annulment
o If be certain with reference with another thing –
“stipulation” if he insist that you have a series of WHAT ARE THE REQUISITES FOR A VALID OBJECT?
transactions in the past let us say 5 transactions, 1. It must be TRUE / it must EXIST or with potential existence
whatever is the price in the 5th transaction that will be 2. It must be DETERMINATE or at least determinable
the price certain. 3. It must be LICIT, lawful, legal, within the commerce of man
o The determination of the price is left to the judgment of - True means it exist. However, things with potential existence MAY
a specified person also become a valid object in a contract of sale.

DO YOU FOLLOW THE SAME RULE IN THE SALES OF THE SHARES OF STOCK IN SUBJECT TO WHAT CONDITION THAT A THING WITH POTENTIAL EXISTENCE
THE STOCK OF EXCHANGE? (LIQUID, GRAINS, AND OTHER THINGS). WHAT IS MAY BECOME A VALID OBJECT OF A CONTRACT OF SALE?
THE RULE IN DETERMINING THE PRICE OF THOSE OBJECTS?
- Under 1461 par. 2 the efficacy of sale of mere hope or expectancy
- Under 1472, the price will become a certain price, based on is deemed subject to condition that the thing will come into
whatever price may be obtained in a particular place at a existence.
particular time. - Under 1462 the object of a contract of sale may be either EXISTING
GOODS or FUTURE GOODS
SCENARIO: UNDER 1472, YOU SOLD TO ME 100 CAVANS OF RICE, WE AGREED - EXISTING GOODS are owned and possessed by the vendor
THAT THE PRICE WOULD BE WHATEVER THE PRICE OF “MAHARLIKA RICE IN - FUTURE GOODS are yet to be manufactured, raised or acquired by
TONDO” AT THE END OF THE MONTH. the seller
- A thing with potential existence under 1461 par. 2, refers to the
WHEN CAN YOU DEMAND PAYMENT FROM ME?
thing covered by 1462 (those that are yet to be manufactured,
- At the end of the month, it will only be in the end of the month that raised, or acquired)
the price will be certain.
SCENARIO: G-ANN IS A GARMENT MAKER AND JEMAR PLANNED TO BUY
FACTS: AT THE TTIME THE CAVANS OF RICE WERE DELIVERED IT HAS A PRICE SEVERAL DOZENS OF TSHIRT TO G-ANN THAT SHE IS PRODUCING IN HER
OF 1500 BUT BY THE END OF THE MONTH IT HAS INCREASED TO 2500. “NORMAL COURSE OF BUSINESS”, UNFORTUNATELY AT THE TIME JEMAR
CAME TO HER FACTORY, THE TSHIRT HE WANT TO BUY IS OUT OF STOCK BUT
HOW MUCH CAN YOU DEMAND? STILL, WE ENTERED INTO A CONTRACT OF SALE, THE OBJECT (DOZENS OF
TSHIRT), AT THE TIME THOSE TSHIRT DOES NOT EXIST BUT G-ANN CAN
- 2500 MANUFACTURE IT. SUPPOSING JEMAR PAID TO MANUFACTURE IT, WILL THE
CONTRACT OF SALE BETWEEN G-ANN & JEMAR BECOME EFFECTIVE?
WHAT IS THE CONNECTION BETWEEN 1469 & 1472? ***
WILL IT BECOME EFFECTIVE?
- It is the basis on how will you determine whether the price is
certain in money under the last sentence/portion of 1458 “or its - Yes if it is produced. Under 1461 par. 2, the efficacy of a contract of
equivalent” sale involving mere hope or expectancy shall be rendered
ineffective if the future thing/ thing with potential existence did not
SCENARIO: IF THE PRICE IS GROSSLY INADEQUATE, THE VALUE OF THE OBJECT
materialized.
IS 1,000,000 BUT THE PRICE IS ONLY 10,000.
- Note: it has to be understood in that context because there is
IS THE CONTRACT INVALID? something you called ALEATORY contract.
- We classify contract of sale as to the value of the thing exchange
- No, the contract cannot be invalidated between the buyer and seller. When the value received by the
buyer and seller are equivalent/equal from each other it is
WHY? CUMMUTATIVE. A contract of sale are generally commutative.

- Because, the rule is SUFFICIENCY OF THE CONSIDERATION RATHER WHY A CONTRACT OF SALE IS HAS A CHARACTERISTICES OF COMMUTATIVE?
THAN ADEQUACY OF THE CONSIDERATION.
- Note: sufficiency is anything that has value. - Because normally a person will not sell a property unless he gets an
equivalent value from the buyer.
WHAT IS CONSIDERATION?
WHAT IS THE EXCEPTION?
- Anything of value which is sufficient
- Note: under 1470, the general rule is even if the price is not - ALEATORY CONTRACT, because in aleatory the subject of sale is
commensurate/adequate to the value of the object, it shall not be mere hope or expectancy. (ALEATORY CONTRACT or EMPTIO SPEI)
a reason to disregard the contract of sale - EMPTIO SPEI (sale of hope or expectancy)
WHAT IS THE EXCEPTION?
“THE THING WILL COME INTO EXISTENCE”
- If there is a VITIATED CONSENT
- When you entered into a contract of sale involving future goods
WHAT IS A VITIATED CONSENT? which pursuant to 1462 may either be subject to manufacturing,
raising, or acquisition. It must materialized. Therefore, if NOT
1. Fraud PRODUCED, RAISED OR ACQUIRED, it is deemed as if there is no
2. Intimidation contract or sale. It is called EMPTIO REI SPERATAE or EPTIO REI
3. Violence SEPARATI
- Note: ALEATORY SALE pertains to EMPTIO SPEI
WHAT IS THE SUBJECT MATTER OF SALE OF HOPE OR EPECTANCY? - Note: the object must be determinate or at least capable of being
determinate. As a RULE, the object must be specific. Even if the
- The “Chance” of winning what motivated you to enter into a object is generic but can be identified it is still valid.
contract of sale.
- Note: in the 3rd paragraph of 1461, this will be the basis why there SCENARIO: I HAVE 3 CARS MERCEDEZ BENZ, BMW, & VIOS. WE ENTERED INTO
is EMPTIO SPEI. “the sale of VAIN hope or expectancy is VOID” A CONTRACT OF SALE. IT MERELY DESCRIBES “I AM SELLING TO YOU A CAR”.
AS A RULE, A CAR IS GENERIC THEREFORE THE SALE IS VOID. HOWEVER BY
HOW DO YOU KNOW WHETHER THE HOPE OR EXPECTANCY IS A HOPE VAIN? WAY OF PERCEPTION IF A GENERIC THING CAN BE PARTICULARIZED IT CAN BE
VALID BECAUSE UNDER 1460 IT ALLOWS AT LEAST DETERMINABLE, SO
- When there is NO CHANCE of winning what motivated you to enter
THEREFORE THE SALE IS REALLY VALID.
into a contract of sale
IF YOU DEMAND A MERCEDEZ BENZ, IT WILL BE IN YOUR FAVOR BECAUSE IT
WHY DO YOU BUY A LOTTO TICKET?
IS MORE VALUABLE THAN VIOS. ON MY PART, I WILL INSIS ON THE VIOS
- What you are buying is the hope or expectation of winning the BECAUSE IT IS MORE FAVORABLE TO ME
prize. You paid 200 but did not win. How much did you give 200,
HOW CAN THEY RESOLVE THIS?
how much did you receive none.
- An ALEATORY CONTRACT of sale has an “element of contingency” - Go back to 1346, under oblicon, when the subject matter is generic,
because the value will be dependent upon whether the the rule is do not allow the creditor to insist the most expensive,
contingency will happen or not. While in EMPTIO REI SPERATAE, do not allow it. Do not allow the debtor to insist in the least
what you are buying did not exist at the time of perfection. It is expensive. But if they insist on what is favorable to them, THERE IS
allowed under the law as long as it can be manufactured, raised, or NO MEETING OF THE MINDS.
acquired. Therefore, if NOT MATERIALIZED, 1461 par. 2 states that - Note: under the law, if you can establish of the parties therefor you
the contract will rendered it ineffective contract of sale. There is no can make a generic thing become a specific thing. By simply prove
rule like that in sale of hope or expectancy, when what you are the intention of the parties.
buying is hope or expectancy. As long as it is not in vain it exist at
the time of perfection it is VALID. CONTIUATION SCENARIO: WHY DO I SELL IT TO YOU? WHY DO YOU WANT TO
BUY? IF THERE IS A PROOF THAT IT IS BECAUSE YOU WANT TO OPERATE FOR
EMPTIO SPEI EMPTIO REI SPERATAE A TAXI, THEREFOR THE “VIOS” IS MORE APPROPRIATE FOR THAT PURPOSE.
OBJECT OBJECT THEREFORE, EVEN IF THE THING IS GENERIC, YOU CANNOT ESCAPE YOUR
- Hope - Not needed to be exist at OBLIGATION AS BUYER TO PAY A PRICE CERTAIN IN MONEY.
- Expectancy the perfection
- Need to exist at CAN THE OWNER OF THE THING SELL HIS UNDIVIDED INTEREST ON A THING
perfection OR HIS UNDIVIDED INTEREST ON A SPECIFIC MASS?

- Yes
SCENARIO: (CONTRACT OF SALE W/ THE OWNERSHIP BELONGS TO ANOTHER
PERSON) I AM SELLING TO YOU A CELLPHONE (W/ OWNERSHIP BELONGS TO SCENARIO: I SOLD TO YOU ¼ OF THE 5 HEACTARES OF RICE FIELD
ANOTHER PESON). I HAVE NO AUTHORITY TO SELL THE CELLPHONE. THE
CONTRACT IS VALID BUT IT CANNOT BE ENFORCED BECAUSE THERE IS NO WHAT WILL HAPPEN?
AUTHORITY FROM THE OWNER. IF THE OWNER AUTHORIZED ME TO SELL THE
- We will become co-owner to the proportion of his interest.
THING, THEN THE CONTRACT CAN BE ENFORCED.
Therefore, when you purchase a portion of a specific thing, it is
WHAT IF I SELL IT THAT EXCEEDS MY AUTHORITY, WILL THE CONTRACT STILL better have it divided to avoid co-ownership. The same rule apply
BE ENFORCED? to specific mass.
- Note: specific mass refers to the thing that you mix like GRAIN of
- NO the same variety.

WHAT ARE THE OTHER THINGS I CAN DO AT THE TIME OF DELIVERY FOR THE WHAT ABOUT THINGS SUBJECT TO A RESOLUTORY CONDITION? CAN IT
CONTRACT BE ENFORCED IF HE DOES NOT AUTHORIZE TO SELL IT? BECOME A SUBJECT MATTER OF SALE?

- Buy from him the cellphone, so that at the time of delivery I have - Yes
the capacity to transfer ownership.
WHAT IS A RESOLUTORY CONDITION?
DOEST IT NEED THAT A SELLER HAS OWNERSHIP OF THE THING?
- One which extinguished the obligation once condition fulfilled
- Under 1459, the law said the seller need not because the owner of
the thing. What is important is at THE TIME OF DELIVERY, he has EXAMPLE: CAMILLE SOLD HIS CAR TO RYZEL BUT CAMILLE HAS THE RIGHT TO
the capacity to transfer ownership of the thing. BUY BACK THE CAR WITHIN 2 YEARS. (PACTO DE RETRO SALE – CONTRACT OF
- Note: it also said that the object must be lawful/licit/legal/. SALE WITH A RIGHT TO REPURCHASE)

2 KINDS OF ILLICIT THINGS DOES IT MEANT THAT CAMILLE HAD A RIGHT TO SELL THE CAR AS LONG AS
SHE SELLS WITHIN 2 YEARS
ILLICIT PER SE ILLICIT PER ACCIDEN
By its NATURE it is illegal By the power of law, it becomes - No, because it will become a double sale
illicit. - Ryzel is the one who can sell it within 2 years, the car she sold is
Example: Sold her flesh for a Example: Selling of prohibited subject to resolutory condition.
pleasure of another person drugs
- Note: you can donate any organs of your body but you CANNOT WHAT IS THE RESOLUTORY CONDITION THERE?
SELL IT
 - That if within the period of 2 years, Camille did not exercise her A CONTRACT WHEREIN IT CANNOT STAND ALONE?
right of conventional redemption, the obligation is EXTINGUISHED.
(Obligation of Ryzel to sell it again to Camille.) - Accessory contract (mortgage / pledge)
- In the meantime, when ryzel waits for the 2 years, ryzel can sell it
WHY A SALE HAS A CHARACTERISTIC OF NOMINATE?
to other person but if the car was purchased by other person within
2 years, camille can buy it again from that other person. - It has a name given by the law (contract of sale)
- 1465 contemplates that the sale of the thing subject to resolutory
condition pertains to one with a period over the condition. WHAT’S THE DIFFERENCE BETWEEN ESSENTIAL AND NATURAL ELEMENT
Therefore, if sold to another person within the period, it can be
repurchased by the one who has the right to repurchase. - An essential element, if absent shall render the contract void.
Natural elements need not be stipulated, in form part in any
CAN YOU TRANSFER OWNERSHIP EVEN THOUGH YOU ARE NOT THE OWNER? contract of sale (warrant against hidden defects/eviction)
- Unlike in accidental elements, they are stipulated by the parties.
- Yes, if you have the authority of the owner to sell it. (agency to sell)
- Note: the attribute of ownership is the right to dispose CAN A NATURAL ELEMENTS CAN BE AN ACCIDENTAL ELEMENT AND VICE
VERSA?
ONE OF THE CHARACTERISTICS OF CONTRACT OF SALE IS BILATERAL OR
RECIPROCAL. WHY? - A natural element can be an accidental but an accidental cannot be
a natural element.
- Because in a contract of sale the contracting parties assume an
undertaking in favor of another. Therefore, in a reciprocal contract, WHAT IS NEGOTIATION?
the price is treated as the cause or consideration.
- Refers to the parties goes to the process of preliminary talks.
CAN THE PRICE BECOME AN OBJECT?
WHAT THE PRELIMINARY TALKS/NEGOTIOTAION IS CONCLUDED, IT GIVES
- Yes, because a contract of sale is a bilateral/reciprocal contract BIRTH TO WHAT?

CAN YOU GIVE ME AN EXAMPLE OF UNILATERAL CONTRACT? - Perfection

- Promissory note, the promisor and promisee is the parties. The CAN YOU GIVE ME EXAMPLES OF CONTRACT WHICH IS VALID BECAOUSE IT
promisor only had an obligation to pay. IS PERFECTED YET IT NEVER REACH THE EXECUTION STAGE?

WHAT IS AN ALEATORY CONTRACT OF SALE? - If it violates the statute of fraud. When it requires a specific form
to be valid.
- The value of thing given to each other is not commensurate
EXECUTION REFERS TO WHAT
EXAMPLE OF THINGS TO BE ACQUIRED: IF YOU PASS THE CPALE, I PROMISE TO
SELL THE LAND TO YOU. THAT LAND THAT I PROMISE TO YOU, WHICH YOU - Enforcement/ implementation
WILL BE ABLE TO ACQUIRE SUBJECT TO CERTAIN CONDITONS.
CLASSIFY THE CONTRACT OF SALE ACCORDING TO SUBJECT MATTER?
WHY A CONTRACT IS CONSENSUAL?
- Sale of PERSONAL (movable) & real (immovable) property
- Sale is perfected by mere meeting of the minds. The rule
CLASSIFY THE CONTRACT OF SALE ACCORDING TO THE VALUE OF THE THINGS
IS THERE A SALE THAT CANNOT BE PERFECTED BY MERE MEETING OF THE EXCHANGED?
MINDS (NOT CONSENSUAL) EXCEPTION
- Commutative / aleatory
- There can be a sell without perfection if the sale is an AUCTION
SALE/PUBLIC BIDDING. The sale is perfected when the auctioneer CONTRACT OF SALE WHERE IT CANNOT BE ENFORCED?
“bangs his hammer”
1. When the object is a real property
WHY IS A CONTRACT OF SALE IS RECIPROCAL? 2. When the object is a personal property which value exceeds
500 pesos
- Based on 1458, definition of sale. 1479 1st paragraph, if there’s an 3. When the execution of contract of sale is fixed after 1 year
offer to buy and sell, the parties shall be reciprocally bound.
WHEN WILL A CONTRACT OF SALE VOIDABLE?
WHY IS ONEROUS A CHARACTERISTIC OF SALE?
- FIVUM
- Because both of the parties assumed an undertaking. Because
valuable consideration is given. WHAT IS A CONDITION?

WHAT IS THE OPPOSITE OF AN ONEROUS CONTRACT? - Uncertain event

- Gratuitous contract, only the donor assume an undertaking IS A CONTRACT TO SELL A PREPARATORY CONTRACT?

BY ONEROUS ACQUISITION OF PROPERTY - Yes it is a preparatory contract to a contract of sale

- Note: a contract of sale is a final contract
1. “I Bought it …” – contract of sale
2. “I accepted it” – by way of dacion en pago WHY IS ACONTRACT OF SALE A FINAL CONTRACT?
3. “I acquired it” – to barter (I exchange another thing)
- You need not execute any other contract. In contract to sell, after
WHY CONTRACT HAS A CHARACTERISTIC OF PRINCIPAL? signing it, you need to comply with the conditions thereof.

- It can stand on its own. It does not depend on another contract

WHAT ARE THE CONDITION? WITH WHAT THEY HAVE MANUFACTURED BUT YOU CAN EASILY DISPOSE IT IN
GENERAL MARKET.
- The seller will deliver the object, the buyer will pay a price in
installment. After full payment of price, that Is the time the buyer WHAT DO YOU CALL THE PARTIES IN THE CONTRACT OF PIECE OF WORK?
become the owner.
- In a contract to sell, the transfer of ownership over the object is - EMPLOYER & CONTRACTOR
conditioned upon the full payment of the price
CONSIGNMENT SALE vs. CONTRACT OF AGENCY TO SELL

Consignee sells it in his own behalf The agency sell on behalf of the
SCENARIO: WE ENTERED INTO A CONTRACT TO SELL A CONDO UNIT. I AM A principal
REALTOR, I OWN SEVERAL CONDO UNITS. AND NOW, YOU IS SUBJECT INTO A
CONTRACT TO SELL, UPON SIGNING OF THE CONTRACT, UPON PAYMENT OF
SCENARIO: IF YOU BUY SHOES IN SM. THE SM IS NOT THE OWNER, THE OWNER
THE DOWNPAYMENT, YOU CAN NOW HAVE THE CONDO UNIT.
IS THE CONSIGNOR. IF SM DOES NOT SOLD ANYTHING SM DOES NOT HAVE
DID YOU BECOME THE OWNER? ANY OBLIGATION TO PAY THE CONSIGNOR

- Not yet because in a contract to sell, ownership is conditioned upon IN AN AUCTION SALE, CAN THE OWNER OF THE THING BID?
the full payment of the price. Whereas, in the contract of sale, the
- It depends if there is a reservation made and provided further that
ownership is immediately transferred once the object has
there is notification to the public that the owner is reserving his
delivered. Therefore, in a contract of sale is a final contract.
right to bid.
Whereas in the contract to sell, after full payment you need to
- Note: 1479, I am not bound with any offer unless there is a
execute a deed of sale.
consideration
CONTINUATION: WHEN YOU BUY A CONDO UNIT, WHAT YOU WILL SIGN IS A
WHEN THERE ARE CONTRADICTING PROVISIONS IN A CONTRACT, HOW CAN
CONTRACT TO SELL. IF YOU SIGN A CONTRACT OF DEED OF SALE, THEN IT IS
IT BE INTERPRETED?
NOT A CONTRACT TO SELL BUT A CONTRACT OF SALE. BUT FOR THE
PROTECTION OF THE SELLER, YOU WILL BE OR MAY BE REQUIRED TO ENTER - It should be interpreted in such manner which will give way to
INTO A REAL ESTATE MORTGAGE. whatever is fair, just, and reasonable to the parties.

- Note: you cannot mortgage something you did not own. SCENARIO: I SOLD TO YOU A SPECIFIC THING AND WE HAVE AN AGREEMENT
- Note: in a contract of sale, the payment of price is not material to THAT UNTIL YOU FULLY PAID THE PRICE. I WILL BECOME THE OWNER OF THE
transfer of ownership. In a contract to sell the payment of price is THING. BEFORE THE COMPLETION OF THE PAYMENT OF THE PRICE, THE THING
material to transfer ownership. IS LOST. YOU ARE THE BUYER (THE CAR WAS DELIVERED) BUT YOU ALSO DO
NOT OWN IT YET.
SCENARIO: IN A CONTRACT OF EXCHANGE, OCAY DELIVERS TO TAYAG A
SPECIFIC CELLPHONE WORTH 5000, IN RETURN TAYAG GAVE OCAY A BALLPEN WHO SHALL SUFFER THE LOSS?
WORTH 2500 AND CASH AMOUNTING TO 2500
- Buyer, under 1504, as an exemption to the rule, if the intention of
WHAT CONTRACT TRANSPIRED the seller to remain the owner to merely secure the payment of the
obligation, the buyer shall suffer the risk of loss.
- Contract of barter, 1468 is very clear, unless the intention of the
parties are not clearly manifested, the transaction shall become a SCENARIO: KRISTINE’S HOUSE & LOT WAS LEASED TO MR OCAY. MR OCAY
sale if the parties received equal value of the thing and money MADE THE HOUSE AND LOT INTO A SHOP. THE PERIOD OF LEASE IS 10 YEARS.
which accompanies each other. In exchange in another thing given KRISTINE SOLD IT TO MARVIN, KRISTINE HAS THE RIGHT TO SELL THE HOUSE
by the opposite party, it shall become a barter if the combination AND LOT. THE CONTRACT OF SALE BETWEEN KRISTINE AND MARVIN IS IN
of the things given (money & thing), the value of the thing given is WRITING BUT NOT IN A PUBLIC INSTRUMENT, ONLY A PRIVATE INSTRUMENT.
higher than that the money.
- Partly money partly thing = intention of the parties CAN MARVIN TELL TO MR OCAY TO MOVE OUT IMMEDIATELY?
- If the intention is not clearly manifested THING > MONEY it is barter
and if it clearly states that it is a barter. Otherwise, (same amount - No because the instrument between Kristine & Marvin is not in
or lower) it is a sale. public instrument.

SCENARIO: DONATO INCORPORATION, PLACED AN ORDER WITH PIMPING IF IT IS IN PUBLIC INSTRUMENT, CAN THE CONTRACT OF SALE BE BINDING TO
MANUFACTURING COMPANY INVOLVING 100 ROUND NECK SHIRTS. THE MR. OCAY?
PURCHASE ORDER ISSUED BY DONATO CORP CONTAINS THE DETAILS “FOR
- Under the rule, it will be binding to him unless Marvin has
EXCLUSIVE DISTRIBUTION, FOR USE IN THE EMPLOYEES OF DONATO CORP IN
knowledge between Kristine and Ocay’s contract. The contract of
CONNECTION TO THE CHRISTMAS PARTY”
lease between Kristine and Ocay’s contract is binding to them but
WHAT IS THE CONTRACT EXIST? it’s not binding to 3rd person (marvin) unless the contract of lease
is in public instrument.
- Contract of sale
- Note: a purchase order is an evidence of contract of sale & contract GIVE AN EXAMPLE OF SALES TRANSACTION, EVEN THOUGH THEY HAVE
of piece of work MEETING OF THE MINDS, IN WRITING BUT VOID IF NOT IN PUBLIC
- Because what is ordered is fit for general consumption. It is general INSTRUMENT?
consumption when the object is fitted for anybody’s interest, it is a
- Sale of SHIPS, and sale of large CATTLE. If not in PUBLIC
sale.
INSTRUMENT (VOID)
CONTINUATION: SUPPOSING DONATO COPR BACKET OUT. THERE IS A BREACH
OF CONTRACT. NOW, PIMPING MANUFACTURING CORP. IS NOW STOCKED
1484 GIVES 3 REMEDIES IN FAVOR OF THE VENDOR & 1 REMEDY IN FAVOR SCENARIO REVERSED: THE ONE I FORECLOSE IS THE MORTGAGE OVER THE
OF THE VENDEE. PRE-OWNED VEHICLE, THE RESULT DEFICIENCY SALE.

1. Exact fulfillment CAN I STILL RECOVER THE DEFICIENCY FROM YOU?

2. Cancellation / Rescission of Sale
3. Foreclosure of Chattel Mortgage - Yes, because the other mortgage is governed under chattel
mortgage law, when there is deficiency, you can recover, when
WHEN CAN EXACT FULFILLMENT BE AVAILED? there is excess you must return.

- If delayed in ONE installment THE FORECLOSURE OF THE CHATTEL MORTGAGE OVER THE INSTALLMENT
- Note: if there is a chattel mortgage constituted over the object of OBJECT RESULTED INTO AN EXCESS SALE, CAN THE EXCESS BE RETAINED?
sale to secure the payment of the price & the buyer is in arrears for
at least 2 installments. - No, the seller cannot retain because the RECTO LAW is a protection
to the buyer
IF THE BUYER IS IN AREEARS FOR 2 INSTALLMENTS, WHAT REMEDIES CAN BE - Note: when the security is pledge or a real estate mortgage, forget
AVAILED? about RECTO LAW. Recto law strictly applies to the chattel
mortgage instituted over the object of the installment buyer. In all
- Cancellation or Foreclosure of chattel mortgage other cases It is the mortgage law will apply
- Note: the MACEDA LAW, is the counterpart of RECTO LAW, the
WHEN THE CONTRACT OF SALE IS RESCINDED/CANCELLED CAN THE
subject matter of maceda law, installment sales of IMMOVABLES.
INSTALLMENTS ALREADY PAID CAN BE RETURNED?
Most of the buyers or realty buys in installment.
- It depends
WHAT ARE THE PROTECTIONS AVAILABLE TO THE BUYER WHO DEFAULTED
WHAT IS THE RULE? SHOULD THE INSTALLMENT BE RETURNED? IN PAYMENT FOR THE IMMOVABLE?

- Yes, unless there is a stipulation provided it is not unconscionable 1. Entitled for 60 days grace period to pay w/o interest. After having
(unacceptable or immoral) to the other party paid installments for at least 2 years, the buyer is entitled for a
- Note: it will be unconscionable even if there is a stipulation that the mandatory grace period of one month for every year of
seller cannot return what has been paid if there is a situation installments made to pay w/o interest
inequitable to the buyer.
SCENARIO: THE BUYER COMPLETED PAYMENT OF 60 MONTHS/5 YEARS.
- Note: chattel mortgage is a security contract whereby movables
UNFORTUNATELY ON THE 70TH MONTH HE STARTED DEFAULTING UNTIL HE
constituted as security for the payment of the indebted
COULDN’T CONTINUE PAYMENT.
money/obligation to pay
- Note: under the chattel mortgage law, if the proceeds is over that CAN HE STILL UPDATE HIS ARREARS? WHAT WOULD BE THE GRACE PERIOD?
the obligation to pay, the excess shall be returned to the original
owner. If less than the amount, under RECTO LAW, you cannot - Yes, without interest. 5 months (2 years = 2months, 3-5 years = 3
demand for deficiency of payment. months)
- Note: if you default happened within 2 years, your grace period
NOTE: UNDER 1484 APPLIES TO INSTALLMENT SALES OF MOVABLE, IF THE w/o interest are 2 months. The seller can give more than 2 months
BUYER DELAYS 1 INSTALLMENT, THE SELLER CAN AVAIL SPECIFIC but not less than 2 months.
PERFORMANCE/EXACT FULFILLMENT BUT IF THE DEFAULT INVOLVES 2 OR
MORE INSTALLMENTS THE SELLER CAN CHOOSE BETWEEN CANCELLATIONS HE DEFAULTED PAYMENT ON THE 3OTH MONTH, CAN THE SELLER GIVE YOU
OF SALE OR IN CASE WHEN THERE IS A CHATTEL MORTGAGE CONSTITUTED 3 MONTHS?
OVER THE MOVABLE, HE MAY DECIDE TO FORECLOSE THE MORTGAGE.
AVAILMENT OF ANY OF THE 3 SHALL EXCLUDE THE OTHER. - Yes but you cannot demand for 3 months because you haven’t
completed the 1 year after 2 years.
NOTE: UNDER RECTO LAW, SHOULD THE AUCTION SALE RESULTED INTO A - Note: the buyer is entitled to update his account after grace period
DEFICIENCY SALE, THE OBLIGATION OF THE BUYER IS NOW EXTINGUISHED but with interest
- Note: seller is entitled to cancel the obligation provided that the
SCENARIO: I SOLD TO YOU A SPECIFIC CAR FOR A PRICE OF 5,000,000 PAYABLE seller will return 50% of what the buyer has been paid. Plus 5% of
IN INSTALLMENTS. I REQUIRED YOU TO SECURE IT WITH A CHATTEL what the buyer has been paid. Plus 5% after 5 years. 6th year = 55%
MORTGAGE OVER THE CAR ITSELF PLUS ANOTHER CHATTEL MORTGAGE OVER but the limit is only 90%
YOUR PRE-OWNED VEHICLE. YOU DEFAULTED FOR 2 OR MORE INSTALLMENT.
SO I SELECTED TO FORECLOSE THE MORTGAGE CONSTITUTED OVER THE SCENARIO: THE BUYER HAS COMPLETED 15 YEARS INSTALLMENT BUT
INSTALLMENT OBJECT UNFORTUNATELY IT RESULTED INTO A DEFICIENCY DEFAULTED ON THE 16TH YEAR
SALE. I CAN NO LONGER DEMANDING RECOVERY OF THE DEFICIENCY BECAUSE
THERE IS ANOTHER CHATTEL MORTGAGE WHICH I WANT TO FORECLOSE. HOW MUCH WOULD BE HIS REFUND?

CAN I FORECLOSE THE CHATTEL MORTGAGE OVER YOUR PRE-OWNED - 90% of what has been paid for 15 years
VEHICLE? - Note: 1485 said that when the transaction refers to a contract of
lease with an option to buy/0purchase it shall also be governed by
- No, because when the obligation is already extinguished by the RECTO law.
foreclosure of the chattel mortgage constituted over the - Because it only purports to be a lease but in truth it is a sale by
installment object. There is no more obligation to be secured by installment.
the mortgage over your pre-owned vehicle and therefore if there
is no more obligation to be secured, there is no more mortgage to
be foreclosed.
SCENARIO: (READ CAREFULLY) YOU LEASED MY CAR, YOU PAID ME IN A OLDEST DOCUMENT OF SALE (first buyer). This rule shall apply if
DOWNPAYMENT OF 50,000 AND EVERYMONT THEREAFTER 10,000 UNTIL THE the several buyers are all in good faith. Anyone acted in BAD FAITH
AGREED PRICE HAS BEEN FULLY PAID. YOU DEFAULTED PAYING THE RENTAL. I hall be excluded in the consideration as who will be entitled to
RECOVERED THE CAR FROM YOU. BUT YOU STILL OWE ME A CERTAIN ownership.
AMOUNT OF MONEY.
SCENARIO: BEFORE C REGISTERED IT, HE WENT TO THE SITE TO ASCERTAIN
CAN I STILL RECOVER FROM YOU? FOR HIMSELF HOW GOOD THE LAND IS AND HE FOUND OUT THAT B IS IN
OCCUPATION OF THE LAND. WHEN THE 3 BUYERS CONTESTED OWNERSHIP. C
- No, it is as if it has been foreclosed INVOKED 1544

ASSUMING YOU HAVE PAID ME 90,000 OUT OF 100,000. YOU DEFAULTED IN WHO SHALL OWNERSHIP BELONG TO?
PAYMENT OF 10,000. SO I RECOVERED THE CAR FROM YOU. UNDER THE
LAW, I CANNOT RECOVER ANYTHING FROM YOU. BUT WHEN I REPOSSESSED - B acquires the ownership because C acted in bad faith
THE CAR THAT IS TANTAMOUNT/EQUAL TO CANCELLATION OF
TRANSACTION. AND UNDER THE LAW, WHEN YOU RESCINDED, THE RULE IS SCENARIO: ASSUMING THAT B KNEW OF HE PREVIOUS SALE OF X TO A, BUT
WHATEVER HAS BEEN RESCINDED BY PARTIES, THEY MUST RETURN IT TO SINCE THE VENDOR OFFERED TO B A VERY LUCRATIVE OFFER, B WAS INDUCED
THE FIVER MINUS A REASONABLE AMOUNT. IT’S UP TO THE COURT TO TO ACCEPT THE OFFER.
DETERMINE A REASONABLE AMOUNT.
WHO HAS THE RIGHT TO ACQUIRE THE OWNERSHIP?
WHY YOU THING UNDER 1487, THE LAW DO PROVIDES THAT THE EXPENSES
- A, because B was induced and acted in bad faith because of her
ON THE SALE SHALL BE IN ACCOUNT OF THE VENDOR AS A RULE UNLESS
knowledge in previous sale.
THERE IS A STIPULATION OTHERWISE
RULE ON SALE OF IMMOVABLES
- “Execution of the documentary sale, registration, doc stamp tax,
capital gains tax and etc. shall borne by the vendor because under 1. First registered it
1458 the vendor binds himself to deliver & transfer ownership & 2. Who took possession
1495 the vendor’s obligation is to deliver and transfer ownership 3. First buyer
to warrant.
SCENARIO: HOWEVER THE OBJECT IS A CAR (MOVABLE)
DOES IT NEED TO BE SPECIFIC IN A DEED OF SALE THAT THE VENDOR SHOULD
BE THE ONE TO SHOULDER THE COST OF SALE? RULE ON SALE OF MOVABLE

- Yes 1. Who took possession

- Note: if the documentation says “netted or net off” it shall be the 2. First buyer
buyer who shall shoulder the cost of sale - Exception when the movable requires registration, give the
ownership to the one who registered it (example car).
WHAT IS THE DIFFERENCE BETWEEN EMINENT DOMAIN AND
EXPROPRIATION? WHO WILL BE ENTITLED FOR THE OWNERSHIP?

- Eminent domain is the INHERENT POWER while expropriation is the - C, in the sale of car it requires registration for transfer of ownership
process of exercising eminent domain.
WHO CAN BE A BUYER/SELLER?
WHAT ARE THE REQUISITES FOR THE EXPROPRIATION?
- Any person who has the capacity to give consent to a contract
A. It must be taken by a competent authority
- Observance of due process of law WHO ARE PERSONS CAPACITATED TO GIVE CONSENT?

EXPROPRIATION SALE IS AN INVLOUNTARY SALE? - Natural and Juridical Persons

- Because the private property owner has no choice but to yield to SCENARIO: JOB IS INSANE, THIS CHRISTMAS, JOB RECEIVED 10,000 IN CASH,
the demand of the state WITH THAT MONEY HE BOUGHT ALL OF THE 10,000 INTO ICE CREAMS AND
GAVE IT ALL TO HIS CLASSMATES. DONATO IS THE GUARDIAN OF OCAY

Buyers in Good Faith CAN DONATO GO TO THE ICE CREAM VENDOR AND DEMAND FOR THE
RETURN OF THE 10,000 PESOS PAID FOR THE ICE CREAM?
A (January) – fully paid
- Considered VOIDABLE, because okay is insane.
X B (February) – no payment w/ possession
(Seller in (Physical delivery) SCENARIO: JOB IS INSANE, THIS CHRISTMAS JOB RECEIVED 10,000 IN CASH,
WITH THAT MONEY JOB BOUGHT THE MOST EXPENSIVE RICE WORTH 100 PER
Bad faith) C (March) – no payment w/ registration
KILO (JOB IS FUCKING RICH)
(Constructive delivery)
CAN DONATO DEMAND FOR THE RETURN?
Note: they are all contesting for ownership
- It depends on the financial status of job. Therefore if job is rich, it
WHO WILL HAVE THE RIGHT TO OWN THE LAND? is valid. If he is poor, it is still valid because what is purchased is a
necessity. Therefore, if the reasonable price is 5,000 then the
- When a vendor sells the object to 2 or more times to buyer in good excess 5,000 shall be returned.
faith, the ownership shall be given to the buyer WHO HAS
REGISTERED it ahead of the others. If the object is immovable (C is NOTE: THOSE WHO ARE INCAPACITATED TO GIVE CONSENT ARE THE ONES
the owner). In the absence of the registration to the buyer who WHO ARE ABSOLUTELY DISQUALIFIED BECAUSE THEY DON’T HAVE THE
took POSSESSION ahead and when there is NOBODY HAS A CAPACITY TO BECOME A BUYER & SELLER PF ANY OBJECT TO ANY PARTY.
REGISTRATION / POSSESSION, to the one who can show the THOSE WHO ARE SUFFERING FROM RELATIVE INCAPACITY IS NOT ABSOLUTE
BECAUSE THE HUSBAND CAN STILL BE A BUYER/SELLER PROVIDED THE OTHER SCENARIO: YOU PURCHASE FROM ME A CERTAIN QUANTITY OF A SPECIFIC
PARTY IS NOT HIS WIFE. THE AGENT, GUARANTOR, EXECUTOR, MERCHENDISE, I AM MANILA BASED, YOU ARE CEBU BASED, SO TO DELIVER
ADMINISTRATOR, PUBLIC OFFICERS, ARE ONLY DISQUALIFIED TO BE THE THE GOODS TO YOU, I ENGAGED THE SERVIDED OF A SHIPPING COMPANY.
BUYER OF THE THINGS UNDER THEIR FIDIUCARY RESPONSIBILITY. BUT IN ALL THE SHIPMENT IS COVERED BY A BILL OF LADING DELIVERABLE TO YOU (AS A
OTHE OBJECTS THEY ARE QUALIFIED BUYER)

NOTE: THE ARE ALSO NOT ALLOWED IN TRANSACTIONS LIKE LEGAL OTHER TERM FOR ACTUAL DELIVERY
REDEMPTION (RECOVERED), COMPROMISE, CONVENTIONAL REDEMPTION
(RESERVED RIGHT) - Physical/real delivery

NOTE: THE RULE IS A HUSBAND & WIFE CANNOT BECOME A BYER AND SELLER OTHER TERM FOR CONSTRUCTIVE DELIVERY?
TO EACH OTHER, THEY CANNOT BECCOME A DONOR & DONEE TO EACH
1. BY LEGAL FORMALITIES (DOCUMENTS OF SALE)
OTHER
2. BY SOMETHING THAT SYMBOLIZED THE THING (TRADITIO
SCENARIO: A HUSBAND AND WIFE WNTERED INTO A CONTRACT OF LEASE SYMBOLICA)
3. BY MERE POINTING THE OBJECT (TRADITIO LONGA MANU)
CAN THE CONTRACT OF LEASE BE VALID? 4. TRADITIO BRAVI MANU
5. TRADITIO CONSTITUTUM POSSESSORIUM
- No, because under the provisions of the urban land and rural land,
the prohibition under 1490 shall also apply. WHAT IS THE DIFFERENCE BETWEEN TRADITIO BRAVI MANU AND TRADITIO
CONSTITUTUM POSSESSORIUM
SCENARIO: KRISTINE & MARVIN ARE LIVED IN COMON LAW HUSBAND & WIFE
- When the object of sale is in possession of the buyer before and
CAN THEY BECOME A BUYER AND SELLER, BECAUSE TECHNICALLY THEY ARE after perfection of sale (BRAVI MANU) example, renting something,
BOTH SINGLE the owner decided to sold it to you
- While the CONSTITUTUM POSSESSORIUM, the possession before
- No, to allow a common law husband and wife to sell to each other
and after perfection of the sale is w/ the vendor. Before the sale,
and yet you prohibit it lawfully, it is like the law will be encouraging
as the owner, after the sale probably usufructuary or lessee.
immoral doings.
(Example I will sold to you under the condition that you will let me
- Note: the law will allow the husband and wife to be buyers and
lease it for 1 year.)
sellers to each other, if they had a marriage settlement contract/
- Note: the vendor can go after the vendee for the payment of the
pre-nuptial/ ante-nuptial agreement
price.
- Note: a marriage settlement agreement is an agreement to settle
their property relations (separation of property) CAN A BUYER ACQUIRE A RIGHT BETTER THAN THAT OF THE SELLER IN SO
- Note: even though w/o marriage settlement as long as they have FAR AS THE OBJECT IS CONCERNED?
legal separation it is allowed by the court.
- NO
4 OBLIGATIONS OF VENDOR
CAN A PERSON WHO HAS VOIDABLE TITLE OVER A SPECIFIC THING, SELL A
1. To deliver THING
2. To transfer ownership
3. To warrant - Yes, provided his title is not yet been voided or annulled.
4. To preserve the thing - Note: the real owner can reacquire the thing sold in a voidable sale,
the buyer in good faith can reimburse.
HOW DO YOU KNOW WHETHER THE VENDOR HAS DIRECTLY COMPLIED
WITH THE OBLIGATION TO DELIVER THE THING? SCENARIO: I HAVE ISSUED A BILL OF EXCHANGE FOR THE PAYMENT OF THE
MERCHENDISE YOU PURCHASED FROM ME WHICH I AM DELIVERING
- 1497, the thing is delivered when POSSESSION or CONTROL over it THROUGH A BILL OF LADING. SO THAT I WILL BE AASSURED OF PAYMENT, I
is transferred to the vendee SSUED A BOE ADDRESSED TO YOU AS THE DRAWEE PAYABLE TO MY CREDITOR
IN CEBU. SO WHEN YOU HONORED THE BILL OF LADING BY WITHDRAWING
HOW WILL YOU DELIVER AN INTANGIBLE OBJECT?
THE GOODS FROM THE SHIPPING COMPANY. MY CEBU BASED CREDITOR
- QUASI TRADITIO PRESENTED BOE FOR YOUR ACCEPTANCE BUT YOU DID NOT HONOR.
- Note: endorsement of shares of stock is quasi negotiable because
WHAT WOULD NOW BE THE CONSEQUENCES?
it is a negotiable document rather than instrument
- Note: a document of title becomes negotiable when it is - The vendee shall NOT acquire ownership even though he has
deliverable to the vendee or to order or to bearer. delivery
- Note: if one B/L is with a BOE and the vendee only honored is the
EXAMPLES OF “DOCUMENTS OF TITLE” – CAN TRANSFER THE GOODS W/O
B/L but dishonored BOE, he will not acquire ownership
PHYSICAL DELIVERY
CONTINUATION: SINCE THE B/L IS NEGOTIABLE, THE VENDEE NEGOTIATES IT
1. DOCK WARRANT – shipment of goods by SEA
TO A 3RD PERSON WHO HAS NOW THE COPY OF B/L. BUYER OF GOOD FAITH
2. BILL OF AIR WAIVEE – shipment of goods by AIR
WHO HAS NO KNOWLEDGE OF PREVIOUS DISHNORED BOE.
3. WAIVEE – shipment by courier???
4. WAREHOUSE RECEIPT – issued by warehouse man by - Note: in a case of a 3rd person, to whom the BOL may have been
acknowledging receipt of goods for delivery to a specified person/ sold, if the person is in good faith, he will become the owner,
to order/ to bearer otherwise he can become the owner.
DOCUMENTS OF TITLE IS WHAT KIND OF CONSTRUCTIVE DELIVERY?

- TRADITIO SYMBOLICA
MEANING OF NEGOTIABLE DOCUMENT OF TITLE

- It is the same with negotiable instrument except for the purpose.

In a negotiable instrument the purpose is the payment of money.
In document of title the purpose is delivery of goods.

WHEN DID THE DOCUMENTS OF TITLE BECOME NEGOTIABLE?

- When the doc of title

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