Sales

San Beda College of Law
113
MEMORY AID IN CIVIL LAW
SALES
SALE 5. Commutative; In some
A nominate contract whereby cases, aleatory (emptio spei);
one of the contracting parties 6. Onerous.
obligates himself to transfer the
ownership of and to deliver a * Aleatory contract: one of the parties
determinate thing and the other or both reciprocally bind themselves
to pay therefor a price certain in to give or to do something in
money or its equivalent. consideration of what the other shall
give or do upon the happening of an
NOTES: Delivery and payment in a event which is uncertain, or which is
contract of sale are so interrelated to occur at an indeterminate time. (Ex:
and intertwined with each other that Sale of sweepstakes ticket)
without delivery of the goods there
is no corresponding obligation to Contract to sell
pay. The two complement each exclusive right and privilege to
other. It is clear that the two purchase an object.
elements cannot be dissociated, for a bilateral contract whereby the
the contract of purchase and sale is prospective seller, while
essentially a bilateral contract, as it expressly reserving the
gives rise to reciprocal obligations. ownership of the subject
(Pio Barretto Sons, Inc. vs. Compania property despite delivery thereof
Maritima, 62 SCRA 167). to the prospective buyer binds
Neither is the delivery of the himself to sell the said property
thing bought nor the payment of exclusively to the prospective
the price necessary for the buyer upon fulfilment of the
perfection of the contract of sale. condition agreed upon, that is,
Being consensual, it is perfected full payment of the purchase
by mere consent. price.
Elements: NOTE: Absent a proviso in the

contract that the title to the
a. Essential elements – those
without which, there can be no property is reserved in the vendor
valid sale: until full payment of the purchase
1.Consent or meeting of price or a stipulation giving the
minds vendor the right to unilaterally
2.A Determinable subject rescind the contract the moment the
matter vendee fails to pay within the fixed
3.Price certain in money or its period, the transaction is an
equivalent absolute contract of sale and not a
contract to sell. (Dignos vs. CA
b. Natural elements – inherent in [1988])
the contract, and which in the * The contract of sale by itself is not a
absence of any contrary
mode of acquiring ownership. The
provision, are deemed to exist in
the contract: contact transfers no real rights; it
1.Warranty against eviction merely causes certain obligations to
2.Warranty against hidden arise.
defects
Contract of Contract to
c. Accidental elements – may be
Sale Sell
present or absent depending on
Ownershi
the stipulation of the parties 1. Title passes to the 1. p is
(e.g.: conditions, interest, buyer upon delivery reserved in the
penalty, time or place of seller and is not
payment, etc.) of the thing sold to
pas
Characteristics: s until full
paymen
1. Principal
t of the
2. Consensual; purchase
3. Bilateral; price
4. Nominate; 2. Non-payment of 2. Full payment is a
the price is a suspensiv and the remedy of
negative positive e the failure of which is
resolutory condition
condition , the
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen
Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)

114

The
seller. prospective
t
selle
seller is o exact not a breach –
r still has
fulfilmen
to
t or to casual or serious
convey title
rescind the contract but simply
to the
prevents the
prospecti
obligation of the ve
vendo buye
r to convey r by
title from having entering into a
binding force contract of
3. Vendor 3. Title remains absolute sale.
loses and in
canno vendo
t recover the r if the As to effect of sale of the subject
ownershi vende property to 3rd persons
p of the e does not
compl
thing sold and y with the
delivere
d until the condition
sal
Contract of e is precedent of
resolved and set making payment
aside at
time
the specified
in the
contract
Conditional Sale Contract to

Sell
As to reservation of title to the
subject
property
In both cases the seller may reserve
the title to the subject property until
fulfillment of the suspensive condition
i.e. full payment of the price
As to effect of fulfillment of
suspensive
condition
1. Upon fulfillment
of 1. Upon
the suspensive fulfillment of the
condition suspensiv
, the e
sal condition
Contract of e is , which
Thereby perfected, is the full
such that if there paymen
had t of the
been previous purchas
delivery e price,
ownershi
of the subject p will
property to the not
buyer, automatically
ownersh
ip thereto transfer to the
buye
automatically r although
Transfer the property
s to the may
buye
r by operation have been
previousl
of law without any y
furthe ac delivered to
r t by the him.
c) should not be impossible (Art.
1. Constructive 1. Third person 1348) e.g. must be within the
knowledg commerce of man
/actual e on buying the 2. RIGHTS – must be
propert despit transmissible
the part of the 2nd y e Exceptions:
buyer of the defect fulfilmen -future
in t of the inheritance -
seller’
service
the s title suspensive
no conditio
renders him t a n cannot Emptio rei Emptio spei
registran be Speratae
t in good deemed a 1. Sale of an expected 1. Sale of a mere
ba hope or
faith. Such second buyer in d Thing expectancy
canno an that the thing will
buyer t defeat faith d come to
the first buyer’s title. prospective existence;
Fulfilmen Sale of the hope
Ratio: t of buyer cannot itself
seek the relief 2. Sale is subject to 2. Sale produces
the suspensive of the condition even
that effect if the
condition reconveyan
the thing will thing does not
s affects the ce of
exist int
seller’ property
; if it does come o
s title to the . existence, unless
propert not, there is no it
y and previous Exception: If is a vain
deliver contract hope
y of the There was no 3. The uncertainty is 3. The uncertainty
property previou sal with regard to the is with regard to
automatically s e of quantity and quality the existence of
the of the
transfers property. the thing and not the thing
ownership/title to the existence of the thing
buyer. 4. Object is a
future 4. Object is a
present thing
OBJECTS OF SALE Thing which
Requisites: is the hope or
1. THINGS: expectancy
a) determinate or determinable NOTE: In case of doubt the
(Arts. 1458, 1460) presumption is in favor of emptio rei
b) lawful (Arts 1347, 1409 [1,4] speratae which is
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115
more in keeping with the 1. Buyer receives Agen

commutative character of the the 1.t receives
contract good
goods as owner the s as goods
of the principal who
Goods which may be Object of
retains his
Sale ownership
a. Existing goods – goods owned or over
possessed by the seller. them
b. Future goods – goods to be 2. Buyer pays the 2. Agent delivers
manufactured, raised or acquired the price which
by the seller after the perfection price in
of the contract. turn he got from
NOTES: his
buyer
A sale of future goods is valid 3. Buyer, as a 3. Agent can return
only as an executory contract to general rule, the goods in case
be fulfilled by the acquisition and cannot he
delivery of goods specified. is unable to sell
While there can be sale of future return the object the
property, there can generally be same to a
Sold third
no donation of future property
person
(Article 751 Civil Code) 4. Seller warrants 4. Agent makes no
Future inheritance cannot be the thing sold warranty for which
sold. A contract of sale or he assumes
personal
purchase of liability as long as
goods to be delivered at a future he
time, if entered into without the acts within his
intention of having any goods pass authority and in the
from one party to another, but name of the seller
with an understanding that at the Buye
5. r can deal 5. Agent in dealing
appointed time, the purchaser is
thin
merely to receive or pay the with the g sold with the thing
difference between the contract h please
and the market prices, is illegal. as e s being received, must act
Such contract falls under the the
definition of “futures” in which the owner and is bound
parties merely gamble on the rise accordin
or fall in prices and is declared null g to the
and void by law. (Art. 2018, NCC) instruction
s of the
(Onapal Phil. Commodities, Inc. vs.
principal
CA [1993])
Contract for
Sal
Instances when the Civil Piece
e
Code recognizes sale of of
things not actually or already Work
owned by the seller at the Th
1. The thing 1. e thing
time of the sale: transferre transferre
1. Sale of a thing having potential d is one d is one
existence (Article 1461) not in existence which have
2. Sale of future goods (Article and would
never an
1462)
which would existed d would
3. Contract for the delivery at a have existed but hav bee the
certain price of an article which for e n
the vendor in the ordinary course o sal
of the business manufactures or the order of the subject f e to
procures for the general market, part desirin to som other person,
whether the same is on hand at y g e
eve
the time or not (Article 1467)
acquire it n if the order
had not been given
2. The services 2. The primary
dominate the objective of the
contract even contract is a sale
of previou
thoug s order of
h there is a the manufactured the
sale of goods item; it is a sale of customer
good eve 3. Withi
involved s n though Not within the 3. n the
the item is Statute of
manufactur Statute of Frauds Frauds
ed by
labo furnishe
r d by
and
the seller upon
Rules to determine if the
Sale Agency to sell contract is
one of Sale or Piece of work:
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part
the acquisition of
a. If ordered in the ordinary course the of the creditor, it is
of business – sale
b. If manufactured specially for the
customer and upon his special
order, and not for the market –
piece of work
SCHOOLS OF THOUGHT:
a) Massachusetts rule: If
specifically done at the order
of another, this is a contract
for a piece of work. (Philippine
application)
b) New York rule: If thing
already exists-SALE; if not-
WORK
c) English rule: If material is
more valuable-SALE; if skill is
more valuable-WORK
BARTER
contract whereby one of the
parties binds himself to give
one thing in
consideration of the other's
promise to give another thing.
NOTE: The only point difference
between contract of sale and barter
is in the element which is present in
sale but not in barter, namely: price
certain in money or its equivalent
NOTE: If the consideration is partly

in money and partly in another
thing, determine:
a. The manifest intention
of the parties
b. If the intent is not
clear, apply the following
rules:
1. If the thing is more
valuable than money –
barter
2. If the money and the
thing are of equal value –
sale
3. If the thing is less
valuable than money –
sale
Dation in
Sale Payment
1. Pre-existing
1. No pre- credit
existing credit
2. Obligations are 2. Obligations
are
created Extinguished
3. Consideration Consideratio
on 3. n of
the part of the
seller the debtor is the
is the price; on the Extinguishment of
part of the buyer is the debt; on the
3. In some cases, must
the acquisition of not be grossly inferior to the
object the value of the thing sold.
object offered in 4. Paid in money or its
lieu equivalent
of the original credit
4. Greater freedom 4. Less Freedom in Certainty
in determining determining the It is not necessary that the
pric certainty of the price be actual
the price e or determined at the time of the
payment
execution of the contract. The
5. Buyer still has to 5. The is price is certain in the
receive following cases:
pay the price d by the 1. If the parties have
debtor before fixed or agreed upon a
contrac definite amount;
the t is
NOTE: The fixing of the price
perfected.
can never be left to the
discretion of one of the
PRICE contracting parties. However if
The sum stipulated as the the price fixed by one of the
equivalent of the thing sold and parties is accepted by the other,
also every incident taken into the sale is perfected.
consideration for the fixing of the 2. If it be certain with
price, put to the debit of the reference to another thing
vendee and agreed to by him. certain
3. If the determination of
Requisites: the price is left to the
1. Certainty or judgment of a specified
ascertainable at the time of person or persons even
perfection before such determination
2. Real, not fictitious
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4. In the cases providedGENERAL RULE: Mere inadequacy of the

price is not a sufficient ground for
under Art. 1472 NCC the
cancellation of the sale if
property is
real.
Effect when the price is fixed by 2. Involuntary or Forced sales

the third person designated:
GENERAL RULE: Price fixed by a
third person designated by the
parties is binding upon them.
EXCEPTIONS:
1. When the third person
acts in bad faith or by
mistake
2. When the third
person
disregards the specific
instructions or the procedure
marked out by the parties
Effect when the price is not

fixed by the third person
designated:
1. If the third person
refuses or cannot fix the
price, the contract shall
become ineffective, unless
the parties subsequently
agree upon the price
2. If the third person is
prevented from fixing the
price by the fault of the seller
or buyer, the party not in
fault may obtain redress
against the party in fault
Effect of Gross Inadequacy of

Price:
1. Voluntary sales
GENERAL RULE: Mere inadequacy of
the price does not affect validity of the
sale.
A valuable consideration,
however small or nominal, if
given or stipulated in good faith
is, in the absence of fraud,
sufficient. (Rodriguez vs. CA, 207
SCRA 553)
Future inheritance cannot be sold.
EXCEPTIONS:
a. Where low price indicates
vice of consent, sale may be
annulled; or contract is
presumed to be an equitable
mortgage
b. Where the price is so low as
to be “shocking to
conscience”, sale may be set
aside.
The contract is void and
EXCEPTIONS: inexistent
a. Where the price is so
Effect of Failure to determine
low as to be shocking to the
price:
moral conscience, judicial
sale of personal property will 1. Where contract executory
be set aside The contract is
b. In the event of a inefficacious
resale, a better price can be 2. Where the thing has been
obtained delivered to and appropriated by
the buyer
NOTE: The validity of the sale is not The buyer must pay a
necessarily affected where the law reasonable price therefore
gives to the owner the right to
redeem, upon the theory that the Reasonable price – generally the
lesser the price, the easier it is for market price at the time and place
the owner to effect redemption. fixed by the contract or by law for
the delivery of the goods
Effect where price is simulated
1. If it is shown to have been in PERFECTION OF SALE
reality a donation or some other GENERAL RULE: It is perfected at
act or contract the moment there is meeting of the
The sale is void but minds upon a determinate thing
the act or contract may be (object), and a certain price
valid as a donation (consideration), even if neither is
2. If not delivered. A choice between
rescission and fulfilment, with
damages in either case)
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Manufacturers, Inc. 93 SCRA
420)
NOTE: Sale is a consensual
contract;
Hence, delivery and payment are
not
essential for its perfection
EXCEPTION: When the sale is subject
to
a suspensive condition by virtue of law
or
stipulation.
* The terms and conditions of
payment are merely accidental, not
essential elements of the contract of
sale except where the partied
themselves stipulate that in addition
to the subject-matter and the price,
they are essential or material to the
contract.
Requirements for perfection

a. When parties are face to face
When an offer is
accepted without conditions or
qualifications
NOTES:
A conditional acceptance is a
counter-offer
when negotiated thru phone
it is as if it is negotiated face
to face
b. When contract is thru
correspondence or thru
telegram
When the offeror receives or
has knowledge of the
acceptance by the offeree
NOTE: If the buyer has already
accepted but the seller does not
know yet of the acceptance, the
seller may still withdraw
c. When a sale is subject to a
suspensive condition
From the moment the
condition is fulfilled
TRANSFER OF OWNERSHIP
GENERAL RULE: While a contract of
sale is consensual, ownership of the
thing sold is acquired only upon its
delivery, actual or constructive, to the
buyer. (Daus vs. Sps. De Leon, 16 June
2003)
This is true even if the
purchase has been made on
credit. Payment of the
purchase price is not
essential to the transfer of
ownership, as long as the
property sold has been
delivered. (Sampaguita
Pictures, Inc vs. Jalwindor
1. Sales of separate lots by auction
are separate contracts of sale.
Nonpayment only creates a
2. Sale is perfected by the fall of
right to demand payment or
the hammer
to rescind
3. Seller has the right to bid in the
the contract, or to criminal auction, provided:
prosecution in the case of a) such right was reserved
bouncing checks. (EDCA b) notice was given that the sale
Publishing and Distributing was subject to a right to bid on
Corp. vs. Santos, 184 SCRA behalf of the seller
614) c) right is not prohibited by law
or by stipulation
EXCEPTIONS: 4. Advertisements for bidders are
1. Contrary stipulation or Pactum simply invitations to make
reservati dominii (contractual proposals, and the advertiser is not
reservation of title) – a bound to accept the highest or
stipulation, usually in sales by lowest bidder, unless the contrary
installment, whereby, despite appears.
delivery of the property sold,
ownership remains with the EFFECT OF PROMISE TREATED
seller until full payment of the UNDER ART. 1479 Civil Code:
price is made. Accepted unilateral promise to
2. Contract to sell sell or buy
3. Contract of insurance – a Only one makes the promise,
perfected contract of sale, even this promise is accepted by the
without delivery, vests in the other. Example: A promises to
vendee an equitable title, an sell to B, B accepts the promise,
existing interest over the goods but does not in turn promise to
sufficient to be the subject of buy.
insurance
RULES GOVERNING AUCTION SALES

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does not bind the promissor supported by a consideration, the

even if accepted and may be moment it was accepted, a
withdrawn perfected contract of sale resulted,
anytime. applying Art. 1324 of the NCC. In
NOTE: Pending notice of its view of the ruling of the Supreme
withdrawal, the accepted promise Court, the only importance of the
partakes the nature of an offer to consideration for an option is that
sell which if accepted, results in a the option cannot be withdrawn by
perfected contract of sale (Sanchez the grantor after acceptance.
vs. Rigos 45 SCRA3 68). In other * In an option to buy, the party who
words, if the acceptance is made has an option may validly and
before withdrawal, it constitutes a effectively exercise his right by
binding contract of sale although the merely notifying the owner of the
option is given without former’s decision to buy and
consideration. expressing his readiness to pay the
if the promise is supported by a stipulated price.
consideration distinct and
separate from the price (option Right of First Refusal
money), its acceptance will give It is a right of first priority all
rise to a perfected contract. things and conditions being
equal; there should be identity of
the terms and conditions to be
Bilateral promise to buy and sell
offered to the optionee and all
One party accepts the other’s other prospective buyers, with
promise to buy and the latter, optionee to enjoy the right of
the former’s promise to sell a first priority. A deed of sale
determinate thing for a price executed in favor of a third party
certain who cannot be deemed a
it is reciprocally demandable purchaser in good faith, and
It requires no consideration which is in violation of the of the
distinct from the selling price right of first refusal granted to
NOTE: this is as good as a the optionee is NOT voidable
perfected under the Statute of Frauds,
sale. No title of dominion is such contract is valid BUT
transferred as yet, the parties rescissible under Article 1380 to
being given only the right to 1381(3) of the New Civil Code
demand fulfillment or damages. (Guzman Bocaling & Co. vs.
Bonnavie; Riviera Filipina, Inc vs.
Policitation CA et.al. GR No. 117355, April 5,
An unaccepted unilateral 2002).
promise to buy or sell. Even if The basis of the right of first
accepted by the other party, it refusal must be the current offer
does not bind the promissor and to sell of the seller or offer to
maybe withdrawn anytime. This purchase of any prospective
is a mere offer, and has not yet buyer. Only after the optionee
been converted into a contract. fails to exercise its right of first
priority under the same terms
Option contract and within the period
A contract granting a privilege in contemplated could the owner
one person, for which he has validly offer to sell the property
paid a consideration, which gives to a third person, again, under
him the right to buy certain the same terms as offered to the
merchandise, at anytime within optionee (Paranaque Kings
the agreed period, at a fixed Enterprises, Inc. vs. CA GR No.
price. 111538, February 26, 1997)
An option without consideration is The lessee’s right of first option
to buy the leased property in
void and the effect is the same
case of its sale is but a part of
as if there was no option
the bigger right to lease the said
* However, in Sanchez vs. Rigos
property from the lessor. The
(1972), even though the option was
option was given to the lessee
not
because she was the lessee of
the subject property. It was a
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b. The thing sold is lost at the
component of the consideration time of perfection:
of the lease. The option was by Contract is void or inexistent.
no means an independent right c. The thing sold is lost after
which can be exercised by the perfection, but before
lessee. If the lessee is barred by delivery:
the contract from assigning her
right to lease the subject
property to any other party, the
lessee is similarly barred to
assign her first option to buy the
leased property to another.
(Bangayan et.al vs. CA and Lim
GR No.123581, August 29, 1997)
Earnest money – or “ARRAS” is

something of value to show that the
buyer was really in earnest, and given
to the seller to bind the bargain. It is
considered as:
a) part of the purchase price
b) proof of perfection of the
contract
*It shall be deducted from the total
price.
Earnest
money Option money
1. Title passes to 1. Ownership is
reserved to the
the buyer upon seller
and is not to
delivery of the pass
thing until full
sold payment
2. In case of 2. In case of
non- non-payment,
payment, an there
action
for specific can be action for
performance or specific
for performance
rescissio ca
n n be
filed by the
injured party
3. Part of the 3. Money given as a
distinct
purchase price consideration
for an option
contract
4. When given,
the 4. The would-be
buyer is not
buyer is bound to required
to
pay the balance buy
5. Given when 5. Applies to a sale
there is already a not yet
perfected sale
RULES ON RISK OF LOSS AND

DETERIORATION:
a. The thing sold is lost before
perfection: Seller bears the
loss.
by fortuitous event before
delivery, the vendor suffers the
GENERAL RULE: Who bears the risk
loss and cannot recover the price
of loss is governed by the
from the
stipulations in the contract
vendee (Commentaries and
In the absence of any
Jurisprudence on the Civil Code
stipulation:
of the Philippines, Tolentino)
First view:
Buyer bears the loss as an exception
to the rule of res perit domino.
d. The thing is lost after delivery:
EXCEPTIONS: Buyer bears the loss.
1. when object sold consists
of fungible goods for a price fixed Question: If one does not
according to weight, number or comply, the other need not pay?
measure Answer: True. But this only applies
2. seller is guilty of fraud, when the seller is able to deliver but
negligence, default or violation of does not.
contractual terms
3. object sold is generic EFFECT OF LOSS AT THE TIME OF
(Civil Code of the Philippines, Paras) SALE:
NOTE: This view conforms with a. Thing entirely lost at the
Manresa’s view. Buyer would have time of perfection: Contract is
been the one to profit from the thing void and inexistent
had it not been lost or destroyed.
b. Thing only partially lost:
Vendee may elect between
Contrary view:
withdrawing from the contract or
Where the ownership is transferred by
demanding the
delivery, as in our code, the
remaining part, paying its
application of the axiom res perit
proportionate price
domino, imposes the risk of loss upon
the vendor; hence, if the thing is lost
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Sale by description 3. Sale of property not to

A sale where a seller sells things be performed within a year
as being of a certain kind, buyer from the date thereof
merely relying on the seller’s 4. “Applicable statute”
representations or descriptions. requires that the contract of
There is warranty that the thing sale be in a certain form
sold corresponds to the NOTE: Statute of Frauds is
representations or descriptions. applicable only to executory
contracts and not to contracts which
are totally or partially performed.
Sale by sample
A sale where a small quantity of
a commodity is exhibited by the
seller as a fair specimen of the
CAPACITY TO BUY OR SELL
bulk, which is not present and as
GENERAL RULE: All persons who
to which there is no opportunity
to inspect or examine. can bind themselves also have legal
capacity to buy and sell.
NOTE: The mere exhibition of EXCEPTIONS:
the sample does not necessarily 1. Absolute incapacity
make it a sale by sample. This (minors, demented persons,
exhibition must have been the imbeciles, deaf and dumb,
sole basis or inducement of the prodigals, civil interdictees) -
sale. party cannot bind themselves
There is warranty that the bulk in any case.
of the commodity will correspond
in kind, quality, and character 2. Relative incapacity –
with the sample exhibited. incapacity exists only with
reference to certain persons
NOTE: In a sale by sample and by or a certain class of property
description, there is a two-fold
warranty. Relative Incapacity
A. Husband and wife (Art. 1490):
RIGHTS OF BUYER: Generally, a sale by one spouse to
1) Return the thing and recover the another is void.
money paid, or The husband and wife cannot
2) Retain the thing and sue for the sell property to each other
breach of warranty. except:
1. When a separation of
PURCHASE BY MINORS: Contract property was agreed upon by
is generally voidable but in case of the spouses
necessaries, “where necessaries are 2. When there has been
sold and delivered to a minor or a judicial separation of
other person without capacity to act, property under Article 134
he must pay a reasonable price and 135 of the Family Code
therefore. Necessaries are those in
Art. 290.” B. Incapacity by reason of
relation to property (Art. 1491)
FORMALITIES OF CONTRACT OF The following persons cannot
SALE acquire property by purchase,
GENERAL RULE: Sale is a even at a public auction, either
consensual contract and is perfected in person or through the
by mere consent. mediation of another:
EXCEPTIONS: In order to be (GAEP-JO)
enforceable by action, the following
1. the guardian, with respect to
must be in writing:
the property of his ward;
1. Sale of personal 2. agents, with respect to the
property at a price not less property whose
than P500
administration or sale may
2. Sale of real property
have been entrusted to
or an interest therein
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mandated by the order
them, unless the consent of authorizing the
the principal has been given;
3. executor or administrator,
with respect to the property
of the estate under
administration;
4. public officers and
employees, with respect to
the properties of the
government, its political
subdivisions, or GOCCs, that
are entrusted to them;
5. judges, justices, prosecuting
attorneys, clerks of courts,
etc., with respect to the
property in custogia legis;
and
6. any other person specially

disqualified by law.
Examples of persons
especially disqualified by
law:
a. Aliens who are disqualified
to purchase agricultural lands
b. An unpaid seller having a
right of lien or having stopped
the goods in transitu, who is
prohibited from buying the
goods either directly or
indirectly in the resale of the
same, at public or private sale
which he may make
c. The officer holding the
execution, or his deputy.
NOTE: While those
disqualified under Arts. 1490
and 1491 may not become
lessees (Art. 1646), still
aliens may become lessees
even if they cannot buy
lands.
Effect of violation:
a) With respect to nos. 1
to
3: the sale is VOIDABLE.
Reason: only private rights,
which are subject to
ratification are violated
NOTE: In the case of Lao vs.
Genato, 137 SCRA 77, the
Supreme Court found that
the sale by the administrator
of certain properties of the
estate in order to settle the
existing obligations of the
estate was made to the
administrator’s son for a
grossly low price.
Furthermore, the said sale
was not submitted to the
probate court for approval as
5. Pay for the expenses of the deed
administrator to sell. The sale of sale, unless there is
was indubitably illegal, stipulation to the contrary
irregular and fictitious, and
the court’s approval of the DELIVERY
assailed compromise Is a mode of acquiring
agreement violated Article ownership, as a consequence of
1491 and cannot work to certain contracts such as sale, by
ratify a fictitious contract virtue of which, actually or
which is non-existent and constructively, the object is
void from the very beginning placed in the control and
possession of the vendee.
b) With respect to nos. 4 to
6: the sale is NULL AND VOID.
Reason: violation of public Delivery of the thing together
policy cannot be subject to with the payment of the
ratification price, marks the
consummation of the
OBLIGATIONS OF THE VENDOR: contract of sale(PNB vs. Ling,
(WPD-TT) 69 Phil. 611)
1. Transfer ownership (cannot be In all forms of delivery, it is
waived) necessary that the act of
2. Deliver the thing sold (cannot be delivery be coupled with the
waived) intention of delivering the
3. Warrant against eviction and thing. The act without the
against hidden defects (can be intention is insufficient.
waived or modified since (Norkis Distributor, Inc. vs.
warranty is not an essential CA, 195 SCRA 694)
element of the contract of sale)
4. Take care of the thing, pending Kinds:
delivery, with proper diligence
(Article 1163)
CIVIL LAW COMMITTEE

123
1. Actual or real – placing the thing 2. If no period for payment has

under the control and possession been fixed in the contract
of the buyer. 3. Even if a period for payment has
2. Legal or constructive – delivery is been fixed in the contract, if the
represented by other signs or vendee has lost the right to
acts indicative thereof make use of the same.
a.delivery by the execution
of a public instrument. Sale or return
NOTE: Gives rise only to a prima Property is sold, but the buyer,
facie presumption of delivery who becomes the owner of the
which is destroyed when actual property on delivery, has the
delivery is not effected because option to return the same to the
of a legal impediment (Ten Forty seller instead of paying the price.
Realty vs. Cruz, 10 Sept. 2003)
b. traditio symbolica - to
effect delivery, the parties NOTES:
make use of a token or It is a kind of sale with a
symbol to represent the thing condition subsequent.
delivered The buyer must comply with
c. traditio longa manu – the express or implied conditions
seller pointing out to the attached to the return privilege;
buyer the things which are otherwise, the sale becomes
transferred, which at the absolute.
time must be in sight. Buyer, being the owner,
d. traditio brevi manu – bears the risk of loss
buyer simply continues in
possession of the thing but Sale on trial, approval, or
under title of ownership. satisfaction
e. traditio constitutum A contract in the nature of an
possessorium – seller option to purchase if the goods
continues in possession but prove to be satisfactory, the
under a different title other approval of the buyer being a
than ownership. condition precedent.
3. Quasi-tradition – delivery of
rights, credits or incorporeal Rules:
property, made by:
a. placing titles of ownership in 1. title remains in the seller
the hands of buyer 2. risk of loss remains with seller
b. allowing buyer to make use when the buyer is at fault
of rights except or
4. Tradition by operation of law has agreed to bear the loss
3. buyer must give goods a trial,
Constructive delivery requires except where it is evident that it
three things before ownership cannot perform the work
may be transferred: 4. period within which buyer must
1. The seller must have control signify his acceptance runs only
over the thing when all the parts essential for
2. The buyer must be put under the operation of the object have
control been delivered.
3. There must be the intention to 5. if it is stipulated that a third
deliver the thing for purposes of person must satisfy approval or
ownership satisfaction, the provision is
valid, but the third person must
When is the vendor not bound be in good faith. If refusal to
to deliver the thing sold: accept is not justified, seller may
1. If the vendee has not paid him still sue.
the price 6. Generally, the sale and delivery
to a buyer who is an expert on
the object
CIVIL LAW COMMITTEE


124

quid non habet (“You cannot give
purchased is not a sale on what you do not have”).
approval, trial, or satisfaction. EXCEPTIONS: (SMERVS)
Sale or Sale on
return Trial
1. Subject to a 1. Subject to a
resolutory suspensive
condition condition
Depends
2. entirely 2. Depends on the
on the will of the character or quality of
buyer the goods
Ownership
3. passes 3. Ownership remains
in the seller until
to the buyer on buyer
deliver signifies his approval
y and or
subseque
nt return acceptance to the
reverts ownership
in seller
the seller
los
4. Risk of s or 4. Risk of loss remains
with the
injury rests upon seller
the buyer
Instances where Seller is still
the Owner despite Delivery:
1. Sale on trial, approval or
satisfaction
2. Contrary intention appears by
the term of the contract;
3. Implied reservation of ownership
(Article 1503)
a. If under the bill of lading, the
goods are deliverable to
seller or agent or their order;
b. If the bill of lading,
although
stating that the goods are to
be delivered to the buyer or
his agent, is kept by the
seller or his agent;
a. When the buyer, although the
goods are deliverable to
order of buyer, and although
the bill of lading is given to
him, does not honor the bill
of exchange sent along with
it.
Transfer of ownership where

goods sold delivered to carrier
General Rule: Delivery to the
carrier is deemed to be delivery to
the buyer Exception: Where the
right of possession or ownership of
specific goods sold is reserved
SALE OF GOODS BY A NON-

OWNER
GENERAL RULE: Buyer acquires no
title even if in good faith and for
value under the maxim Nemo dat
2. Where there is no agreement,
1.Owner is estopped or place of delivery determined by
precluded by his conduct usage of trade
2.When sale is made by the 3. Where there is no agreement
registered owner or apparent and no prevalent usage, place of
owner in accordance with delivery is the seller’s place
recording or registration laws 4. In any other case, place of
3.Sales sanctioned by judicial delivery is the seller’s residence
or statutory authority 5. In case of specific goods, which
4.Purchases in a merchant's to the knowledge of the parties
store, fairs or markets at the time the contract was
5. When a person who is made were in some other place,
not the owner sells and that place is the place of
delivers a thing, delivery, in the absence of
subsequently acquires title agreement or usage of trade to
thereto (Art. 1434) the contrary
6. When the seller has a
Time of delivery of goods
voidable title which has not
been avoided at the time of 1. Stipulated time
the sale (Art. 1506) 2. In the absence thereof, within a
* “Unlawful deprivation” is no longer reasonable time
limited to a criminal act. There is
NEGOTIABLE DOCUMENT OF TITLE
Unlawful Deprivation where there is
(NDT)
no valid transmission of ownership.
A document of title in which it is
Place of delivery of goods stated that the goods referred to
1. Where there is an agreement, therein will be delivered to the
place of delivery is that agreed bearer, or to the order of any
upon person named in such document.
May be negotiated by delivery or
indorsement.
CIVIL LAW COMMITTEE

125
The document is negotiable if: RULES WHEN QUANTITY IS LESS

1. The goods are deliverable to the THAN AGREED UPON:
bearer; or 1. Buyer may reject; or
2. If the goods are deliverable to 2. Buyer may accept
the order of a certain person what has been delivered, at
the contract rate
Persons who may negotiate
NDT: RULES WHEN QUANTITY IS MORE
1. The owner; or THAN AGREED UPON:
2. Any person to whom the 1. Buyer may reject all; or
possession or custody thereof has 2. Buyer may accept the
been entrusted by the owner, if by goods agreed upon and
the terms of the document the reject the rest; or
bailee issuing the document 3. Buyer may accept all
undertakes to deliver the goods to and must pay for them at the
the order of the person to whom contract rate
the possession or custody of the NOTE: Acceptance, even if not
document has been entrusted or if express may be implied when the
at the time of such entrusting the buyer exercises acts of ownership
document in such form that it may over the excess goods.
be negotiated by delivery.
RULES WHEN GOODS MIXED
* If the holder of a negotiable WITH GOODS OF DIFFERENT
document of title (deliverable to DESCRIPTION:
bearer) entrusts the document to a Buyer may accept the goods
friend for deposit, but the friend which are in accordance with the
betrays the trust and negotiates the contract and reject the rest
document by delivering it to another
who is in good faith, the said owner NOTE: If the subject matter is
cannot impugn the validity of the indivisible, in case of delivery of
negotiation. As between two larger quantity of goods or of mixed
innocent persons, he who made the goods, the buyer may reject the
loss possible shall bear the loss,
whole of the goods
without prejudice to his right to
recover from the wrongdoer. DELIVERY TO THE CARRIER
GENERAL RULE: Where the seller is
RIGHTS OF PERSON TO WHOM
authorized or required to send the
DOCUMENT HAS BEEN
goods to the buyer, delivery to the
NEGOTIATED:
carrier is delivery to the buyer.
1) The title of the person negotiating
EXCEPTIONS:
the document, over the goods
1. When a contrary intention
covered by the document;
appears
2) The title of the person (depositor
2. Implied reservation of
or owner) to whose order by the
terms of the document the goods ownership under pars. 1,2,3
were to be delivered, over such of Art. 1503
goods;
Kinds of Delivery to the Carrier
3) The direct obligation of the bailee
to hold possession of the goods for a. C.I.F. (cost, insurance,
him, as if the bailee had contracted freight) – signify that the
to him directly NOTE; Mere price fixed covers not only
transferee does not acquire directly the costs of the goods, but
the obligation of the bailee (in Art. the expense of the freight
1513). To acquire it, he must notify and the insurance to be paid
the bailee. by the seller
b. F.O.B. (free on board) –
WHO CAN DEFEAT RIGHTS OF goods are to be delivered free
TRANSFEREE: of expense to the buyer to the
1. Creditor of transferor point
2. Transferor
3. Subsequent purchaser
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126

Sale for a Lump Sum (A Cuerpo
where they are F.O.B. The Cierto)
point of F.O.B., either at the
point of shipment or the point
of destination, determines
when the ownership passes.
NOTE: the terms C.I.F. and
F.O.B.
merely make rules of
presumption
c. C.O.D. (collect on delivery)
– the carrier acts for the
seller in collecting the
purchase price, which the
buyer must pay to obtain
possession of the goods.
SELLER’S DUTY AFTER DELIVERY

TO CARRIER
1. To enter on behalf of buyer into
such
contract reasonable under the
circumstances
2. To give notice to buyer
regarding necessity of insuring the
goods
PAYMENT OF THE PURCHASE

PRICE
GENERAL RULE: The seller is not
bound to deliver the thing sold
unless the purchase price has been
paid.
EXCEPTION: The seller is bound to
deliver even if the price has not
been paid, if a period of payment
has been fixed.
Sale of Real Property by Unit

Entire area stated in the contract
must be delivered
When entire area could not be
delivered, vendee may:
1. Enforce the contract
with the corresponding
decrease in price
2. Rescind the sale:
a. If the lack in area is at
least 1/10 than that
stated or stipulated
b. If the deficiency in quality
specified in the contract
exceeds 1/10 of the price
agreed upon
c. If the vendee would not
have bought the
immovable had he known
of its smaller area of
inferior quality
irrespective of the extent
of lack of area or quality
they must pertain exactly to the
Vendor is obligated to deliver all same object or subject matter;
the land included within the they must be bought from the same
or immediate seller; AND
boundaries, regardless of
two or more buyers who are at odds
whether the real area should be
over the rightful ownership of
greater or smaller
the subject matter must
Ordinarily, there can be no represent conflicting interests.
rescission or reduction or
increase whether the Rules of preference:
area be greater or lesser, unless 1. Personal Property
there is gross mistake. a. first possessor in good faith
NOTE: The Civil Code presumes that 2. Real Property
the purchaser had in mind a a. first registrant in good
particular piece of land and that he faith
ascertained its area and quality b. first possessor in good
before the contract of sale was faith
perfected. If he did not do so, or if c. person with oldest
having done so he made no title in good faith
objection and consented to the
transaction, he can blame no one NOTES:
but himself (Teran vs. Villanueva Purchaser in Good Faith – one
Viuda de Riosa 56 Phil 677). who buys the property of
What is important is the another without notice that some
delivery of all the land included in the other person has a right to or
boundaries. interest in such property and
pays a full and fair price for the
DOUBLE SALE (Art. 1544) same at the time of such
Requisites: VOCS purchase or before he has notice
two or more transactions must of the claim or interest of some
constitute valid sales; other person in the property
(Veloso vs. CA).
CIVIL LAW COMMITTEE


127
Registration requires actual perfection of a contract and a

recording; if the property was condition imposed merely on the
never really registered as when performance of an obligation. The
the registrar forgot to do so failure to comply with the first
although he has been handed condition would prevent the juridical
the document, there is no relation itself from coming into
registration. existence, while failure to comply
Possession is either actual or with the second merely gives the
constructive since the law made option either to refuse or proceed
no distinction (Sanchez vs. with the sale or to waive the
Ramos 40 Phil614) condition.
Possession in Art.1544 includes
The mere fact that the second
not only material but also
contract of sale was perfected in
symbolic possession (Ten Forty
good faith is not sufficient if,
Realty vs. Cruz, 10 Sept. 2003.)
before title passes, the second
Title means title because of sale, vendee acquires knowledge of
and not any other title or mode the first transaction. The good
of acquiring property (Lichauco faith or innocence of the
vs. Berenguer 39 Phil 642) posterior vendee needs to
Hernandez vs. Katigbak Rule: continue until his contract ripens
When the property sold on into ownership by tradition or
execution is registered under registration. (Palanca vs. Dir. Of
Torrens, registration is the Lands, 46 PHIL 149)
operative act that gives validity to
the transfer or creates a lien on
the land, and a purchaser on
execution sale is not required to EFFECT IF BUYER HAS ALREADY
go behind the registry to SOLD THE GOODS:
determine the conditions of the General Rule: The unpaid seller’s
property. Exception: Where the right to lien or stoppage in transitu
purchaser had knowledge, prior to remains even if buyer has sold the
or at the time of the levy, of such goods.
previous lien or encumbrance, his Except:
knowledge is equivalent to 1) When the seller has given
registration. consent thereto, or
2) When the buyer is a purchaser in
good faith for value of a negotiable
CONDITION
document of title.
Effect of Non-fulfillment of
Condition WARRANTY
1. If the obligation of
a statement or representation made
either party is subject to any
condition and such condition is by the seller of goods,
not fulfilled, such party may contemporaneously and as a
either: part of the contract of sale,
a. refuse to proceed with having reference to the
the contract character, quality, or title of the
b. proceed with the goods, and by which he promises
contract , waiving the or undertakes to insure that
performance of the certain facts are or shall be as he
condition. then represents.
2. If the condition is in
the nature of a promise that Kinds:
it should happen, the non-
1. EXPRESS – any affirmation of
performance of such
fact or any promise by the seller
condition may be treated by
relating to the thing if the
the other party as breach of
natural tendency of such
warranty. affirmation or promise is to
induce the buyer to purchase the
NOTE: A distinction must be made
same and if the buyer purchases
between a condition imposed on the the thing relying thereon
CIVIL LAW COMMITTEE

128

4. the vendor was
summoned in the suit for
NOTE: A mere expression of eviction
opinion, no matter how positively
asserted, does not import a
warranty unless the seller is an
expert and his opinion was relied
upon by the buyer.
2. IMPLIED - that which the law

derives by implication or
inference from the nature of the
transaction or the relative
situation or circumstances of the
parties, irrespective of any
intention of the seller to create
it.
a. Warranty against
eviction
b. Warranty against
hidden
defects
c. Warranty as to
Fitness
and Merchantability
NOTE: An implied warranty is a
natural, not an essential element of
a contract, and is deemed
incorporated in the contract of sale.
It may however, be waived or
modified by express stipulation. (De
Leon)
There is no implied warranty as to
the condition, adaptation, fitness or
suitability or the quality of an article
sold as a second-hand article. But
such articles might be sold under
such circumstances as to raise an
implied warranty.
* A certification issued by a vendor
that a second-hand machine was in
A-1 condition is an express warranty
binding on the vendor. (Moles vs.
IAC [1989])
A. Warranty against eviction

Warranty in which the seller
guarantees that he has the right
to sell the thing sold and to
transfer ownership to the buyer
who shall not be disturbed in his
legal and peaceful possession
thereof.
Elements:
1. vendee is deprived, in
whole or in part, of the thing
purchased;
2. the deprivation is by
virtue of a final judgment;
3. the judgment is based
on a prior right to the sale or
an act imputable to the
vendor;
Answer: Rescission contemplates
at the instance of the that the one demanding it is able to
vendee; AND return whatever he has received
5. no waiver of warranty under the contract. Since the
by the vendee. vendee can no longer restore the
subject-matter of the sale to the
Vendor's liability shall consist of: vendor, rescission cannot be carried
out.
1. Total eviction: (VICED)
a. Value of the thing at * The suit for the breach can be
the time of eviction; directed only against the immediate
b. Income or fruits if he seller, not sellers of the seller unless
has been ordered to deliver such sellers had promised to
them to the party who won warrant in favor of later buyers or
the suit; unless the immediate seller has
c. Costs of the suit; expressly assigned to the buyer his
d. Expenses of the contract; own right to sue his own seller.
AND NOTE: The disturbance referred to
in the case of eviction is a
e. Damages and disturbance in law which requires
interests if the sale was in that a person go to the courts of
bad faith.
justice claiming the thing sold, or
part thereof and invoking reasons.
2. Partial eviction:
Mere trespass in fact does not give
a. to enforce vendor’s rise to the application of the
liability for eviction doctrine of eviction.
(VICED);
OR Vendor’s liability is waivable but
b. to demand rescission any stipulation exempting the
of contract. vendor from the obligation to
answer for
Question: Why is rescission not a
remedy in case of total eviction?
CIVIL LAW COMMITTEE

129
eviction shall be void if he acted 3. it must Exist at the time of

in bad faith. the sale;
Kinds of Waiver: 4. vendee must give Notice of
a. Consciente – the defect to the vendor
voluntarily made by the within a reasonable time;
vendee without 5. action for rescission or
theknowledgeand reduction of price must be
assumption of the risks of brought within the proper
eviction Period (within 6 mos. from
NOTE: vendor shall pay only delivery of the thing or 40
the value which the thing days from date of delivery in
sold had at the time of case of animals); and
eviction 6. no Waiver of the warranty.
b. Intencionada – made by
the vendee with Remedies of the Vendee:
knowledge of a. Accion redhibitoria (rescission)
the risks of eviction b. Accion quanti minoris
and (reduction of the price)
assumption of its NOTES:
consequences Hidden faults or defects pertain
EFFECT: vendor not liable only to those that make the
NOTE: Every waiver is presumed to object unfit for the use for which
be consciente. To consider it it was intended at the time of the
intencionada, it must be sale.
accompanied by some
This warranty in Sales is applicable in
circumstance which reveals the
vendor’s knowledge of the risks of Lease (Yap vs. Tiaoqui 13Phil433)
eviction and his intention to submit Effect of loss of thing on account
of hidden defects:
to such consequences.
1. If vendor was aware of hidden
WHERE IMMOVABLE SOLD defects, he shall bear the loss
ENCUMBERED WITH NON- and vendee shall have the right
APPARENT BURDEN to recover: (PED)
1. Right of vendee a. the price paid
a) recission, or b. expenses of the contract
b) indemnity c. damages
2. If vendor was not aware, he shall
2. When right cannot be be obliged to return: (PIE)
exercised: a. price paid
a) if the burden or servitude is
apparent b. interest thereon
b) if the non-apparent burden or c. expenses of the
servitude is registered contract if paid by the
c) if vendee had knowledge of vendee
the encumbrance, whether it is
registered or not Effect if the cause of loss was
3. When action must be brought not the hidden defect
- within ONE YEAR from the If the thing sold had any
execution of the deed of sale hidden fault at the time of the
sale, and should thereafter be
B. Warranty against hidden lost by a (1) fortuitous event OR
defects (2) through the fault of the
Warranty in which the seller vendee:
guarantees that the thing sold is the vendee may demand of
free from any hidden faults or the vendor the price which he
defects or any charge or paid less the value of the
encumbrance not declared or thing at the time of its loss.
known to the buyer. NOTE: the difference between
the price paid and the value of
Elements: (SHENPW) the thing
1. defect must be Serious or
important;
2. it must be Hidden;
CIVIL LAW COMMITTEE

130
at the time of its loss represents 3. Sale by virtue of authority in fact

the damage suffered by the or law
vendee and the amount which
the vendor enriched himself at Caveat Venditor (“Let the seller
the expense of the vendee beware”): the vendor is liable to
If the vendor acted in bad the vendee for any hidden faults or
faith: vendor shall pay defects in the thing sold, even
damages to the though he was not aware thereof.
vendee
Caveat Emptor (“Let the buyer
beware”): requires the purchaser to
C. Implied Warranties of
be aware of the supposed title of the
Quality Warranty of
vendor and one who buys without
Fitness
checking the vendor’s title takes all
Warranty in which the seller
the risks and losses consequent to
guarantees that the thing sold is
such failure.
reasonably fit for the known
particular purpose for which it
RULES IN CASE OF SALE OF
was acquired by the buyer
ANIMALS
1. When two or more animals have
GENERAL RULE: There is no been sold at the same time and the
implied warranty as to the quality or redhibitory defect is in one, or some
fitness for any particular purpose of of them but not in all, the general
goods under a contract of sale rule is that the redhibition will not
EXCEPTIONS: affect the others without it. It is
1. Where the buyer, expressly immaterial whether the price has
or by implication manifests to been fixed for a lump sum for all the
the seller the particular animals or for a separate price for
purpose for which the goods each.
are required 2. No warranty against hidden
defects of animals sold at fairs or at
2. Where the buyer public auctions, or of livestock sold
relies upon the seller’s skill or as condemned. This is based on the
judgment assumption that the defects must
have been clearly known to the
Warranty of Merchantability buyer.
Warranty in which the seller 3. Sale of animals shall be void when:
guarantees, where the goods a) animals sold are suffering
were bought by description, that from contagious disease
they are reasonably fit for the b) if the use or service for which
general purpose for which they they are acquired has been stated in
are sold the contract, and they are found to
It requires identity between what be unfit therefor
is described in the contract AND 4. Limitation of the action: 40 days
what is tendered, in the sense from the date of their delivery to the
that the latter is of such quality vendee
to have some value 5. Vendor shall be liable if the
animal should die within 3 days after
Instances where implied its purchase if the disease which
warranties are inapplicable: caused the death existed at the time
1. As is and where is sale - vendor of the contract
makes no warranty as to the
OBLIGATIONS OF THE VENDEE:
quality or workable condition of
A. Principal Obligations:
the goods, and that the vendee
1. To accept delivery
takes them in the condition in
2. To pay the price of the thing sold
which they are found and from
in legal tender unless another
the place where they are
mode has
located.
been agreed upon
2. Sale of second-hand articles
NOTE: A grace period granted the
vendee in case of failure to pay the
amount/s due is a right not an
obligation.
CIVIL LAW COMMITTEE

131
The grace period must not be 3. If there is no stipulation as to the

likened to an obligation, the non- time and place of payment and
payment of which, under Article delivery, the vendee is bound to
1169 of the Civil Code, would still pay at the time and place of
generally require judicial or extra- delivery
judicial demand before “default” can 4. In the absence of stipulation as
be said to arise (Bricktown Dev’t to the place of delivery, it shall
Corp vs. Amor Tierra Dev’t Corp. be made wherever the thing
57SCRA437) might be at the moment the
contract was perfected (Article
B. Other Obligations 1251)
1. To take care of the goods 5. If only the time for delivery has
without the obligation to return, been fixed in the contract, the
where the goods are delivered to vendee is required to pay even
the buyer and he rightfully before the thing is delivered to
refuses to accept him; if only the time for payment
has been fixed, the vendee is
NOTES: entitled to delivery even before
The buyer in the price is paid by him (Article
such a case is in the position 1524)
of a bailee who has had
goods thrust upon him Ways of accepting goods:
without his assent. He has 1. Express acceptance
the obligation to take 2. Implied acceptance
reasonable care of the goods
but nothing more can be
a. When buyer does an act
which only an owner can do,
demanded of him.
b. Failure to return goods after
The goods in
reasonable lapse of time
the buyer’s possession under
these circumstances are at NOTES:
the seller’s risk
The retention of goods is strong
2. To be liable as a depositary if he
evidence that the buyer has
voluntarily constituted himself as
accepted ownership of the
such
goods.
3. To pay interest for the period
between delivery of the thing Delivery and acceptance are
and the payment of the price in two separate and distinct acts of
the following cases: different parties
a. Should it have been Delivery is an act of
stipulated the vendor and one of the
b. Should the thing sold and vendor’s obligations; vendee
delivered produce fruits or has nothing to do with the
income act of delivery by the vendor
c. Should he be in default, from Acceptance is an
the time of judicial or extra- obligation of the vendee;
judicial demand for the acceptance cannot be
payment of the price regarded as a condition to
complete delivery;
Pertinent Rules:
seller must comply
1. The vendor is not required to with the obligation to deliver
deliver the thing sold until the although there is no
price is paid nor the vendee to acceptance yet by the buyer
pay the price before the thing is Acceptance by the buyer may
delivered in the absence of an precede actual delivery; there
agreement to the contrary may be actual receipt without
(Article 1524). acceptance and there may be
2. If stipulated, the vendee is acceptance without receipt
bound to accept delivery and to
pay the price at the time and
place designated;
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132

4. if the disturbance is a mere act
of trespass
Unless otherwise agreed upon,
acceptance of the goods by the
buyer does not discharge the
seller from liability for damages
or other legal remedy like for
breach of any promise or
warranty
When vendee may suspend

payment of the price:
1. If he is disturbed in the
possession or ownership of the
thing bought
2. If he has well-grounded fear that
his possession or ownership
would be disturbed by a
vindicatory action or foreclosure
of mortgage
NOTES:
If the thing sold is in the
possession of the vendee and the
price is already in the hands of the
vendor, the sale is a consummated
contract and Article 1590 is no
longer applicable. Article 1590,
presupposes that the price or any
part thereof has not yet been paid
and the contract is not yet
consummated.
Under Article 1590, the vendee
has no cause of action for
rescission before final
judgement, otherwise the vendor
might become a victim of
machinations between the
vendee and the third person
Disturbance must be in
possession and ownership of the
thing acquired
If the disturbance is caused by the
existence of non-apparent
servitude, the remedy of the buyer
is rescission, not suspension of
payment.
When vendee cannot suspend

payment of the price even if
there is disturbance in the
possession or ownership of the
thing sold:
1. if the vendor gives security for
the return of the price in a
proper case
2. if it has been stipulated that
notwithstanding any such
contingency, the vendee must
make payment (see Article 1548
par.3)
3. if the vendor has caused the
disturbance or danger to cease
action to rescind the
5. if the vendee has fully paid the sale (Art. 1593)
b. Sale of Goods –
price REMEDIES FOR BREACH OF
action for the price
CONTRACT (Art. 1595)
A. Remedies of the seller action for damages (Art.
1. Action for payment of the price 1596)
(Art. 1595) 2. Unpaid Seller
2. Action for damages for non- Types:
acceptance of the goods (Art. a. The seller of the
1596) goods who has not been paid
3. Action for rescission (Art. 1597) or to whom the price has not
B. Remedies of the buyer been tendered
1. Action for specific performance
(Art. 1598)
b. The seller of the
goods, in case a bill of
2. Action for rescission or damages
exchange or other negotiable
for breach of warranty (Art 1599)
instrument has been received
as conditional payment, AND
A. REMEDIES OF THE SELLER
the condition on which it was
FOR received has been broken by
BREACH OF CONTRACT reason of the dishonor of the
IN CASE OF MOVABLES instrument, insolvency of the
1. Ordinary Remedies buyer or otherwise.
a. Movables in General – Remedies:
Failure of the vendee to 1. Possessory lien over the
appear to receive delivery or, goods
having appeared, failure to 2. Right of stoppage in
tender the price at the same transitu after he has parted
time, unless, a longer period with
for its payment has been
stipulated
CIVIL LAW COMMITTEE

133

unconscionable under the
the possession of the goods circumstan-ces (Article
and the buyer becomes 1486).
insolvent
3. Special Right of resale
4. Special Right to
rescind
the sale
5. Action for the price
6. Action for damages
3. Article 1484 or Recto Law

Remedies of vendor in sale of
personal property by
installments
Requisites:
1. Contract of sale
2. Personal property
3. Payable in
installments
4. In the case of the
second and third remedies,
that there has been a failure
to pay two or
more installments
NOTE: Apply likewise to
contracts purporting to be leases
of personal property with option
to buy
Art. 1484 does not apply to a
sale:
1. Payable on straight
terms (partly in cash and
partly in one term)
2. Of Real property
Remedies:
1. Specific performance
upon vendee’s failure to pay
NOTE: Does not bar full
recovery for judgment secured
may be executed on all personal
and real properties of the buyer
which are not exempt from
execution (Palma v. CA.)
2. Rescission of the sale if
vendee shall have failed to
pay two or more installments
NOTES:
Nature of the remedy – which
requires mutual restitution –
bars further action on the
purchase price (Nonato vs.
IAC.)
GENERAL RULE:
cancellation of sale requires
mutual restitution, that is all
partial payments of price or
rents must be returned
EXCEPTIONS: a stipulation
that the installments or rents
paid shall not be returned to
the vendee or lessee shall be
valid insofar as the same
may not be
likewise bound by the same law.
3. Foreclosure of the chattel Accordingly, when the assignee
mortgage on the thing sold if forecloses on the mortgage, there
vendee shall have failed to can be no further recovery of the
pay two or more installments. deficiency and the vendor-
In this case, there shall be no mortgagee is deemed to have
further action against the renounced any right thereto (Borbon
purchaser to recover unpaid II vs. Servicewide Specialist, Inc.
balance of the price. 258SCRA658)
NOTE: However, Article 1484(3)
NOTES: does NOT bar one to whom the
Further recovery barred only vendor has assigned on with a
from the time of actual sale at public recourse basis his credit against the
auction conducted pursuant to vendee from recovering from the
foreclosure (Macondray vs. Tan.) vendor the assigned credit in
full although the vendor may have
Other chattels given as security no right of recovery against the
cannot be foreclosed if they are not vendee for the deficiency (Filipinas
subject of the installment sale Invest. & Finance Corp. vs. Vitug, Jr.
(Ridad vs. Filipinas investment and 28SCRA658)
Finance Corp. GR 39806, Jan. 28,
1983) NOTE: Remedies are alternative
If the vendor assigns his right to and exclusive
a financing company, the latter may
be regarded as a collecting agency IN CASE OF IMMOVABLES
of the vendor and cannot therefore 1. Ordinary Remedies
recover any deficiency from the a. In case of anticipatory
vendee (Zayas vs. Luneta Motors breach –
Co.) rescission (Article 1591)
When the vendor assigns his
credit to another person, the latter is
CIVIL LAW COMMITTEE

134
b. Failure to pay the 2. Actual cancellation can

purchase price – only take place after 30 days
rescission upon from receipt by the buyer of
judicial or notarial the notice of cancellation OR
demand for rescission demand for rescission by a
(Article 1592) notarial act AND upon full
the vendee may pay, payment of the cash surrender
even after the expiration value to the buyer (Olympia
of the period, as long as Housing vs. Panasiatic,
no demand for rescission 16January 2003.)
has NOTE: The seller shall refund
to the buyer the cash
been made upon him
surrender value of the
NOTE: Article 1592 does
payments on the property
not
equivalent to 50% of the total
apply to:
payments made. After five
1) Sale on instalment of real
estate (5) years of installments,
2) Contract to sell there shall be an additional
3) Conditional sale 5% every year but not to
4) Cases covered by RA exceed 90% of the total
payments made
6552: Realty Installment
buyer protection act 3. The buyer shall have
the right to sell his rights or
2. R.A. No. 6552 or Maceda Law assign the same to another
An Act to Provide person OR to reinstate the
Protection to buyers of Real contract by updating the
Estate on Installment Payments account during the grace
Law governing sale or period and before actual
financing of real estate on cancellation of the contract
installment payments 4. The buyer shall have
the right to pay in advance any
Requisites:
installment or the full unpaid
1. transactions or balance of the purchase price
contracts involving the sale OR any time without interest and
financing of real estate on to have such full payment of
installment payments, the purchase price annotated
including residential in the certificate of title
condominium apartments; and covering the property.
2. buyer defaults in
payment of B. If Buyer has paid less
succeeding than 2 years of
installments. installments
1. The seller shall give the buyer
Rights of the buyer: a grace period of NOT less
A. If Buyer has paid at least than 60 days from the date the
two installment became due. If the
(2) years of installments buyer fails to pay the
1. The buyer must pay, installments due at the
without additional interest, the expiration of the grace period,
unpaid installments due within the seller may cancel the
the total grace period earned contract after 30 days from
by him. There shall be one (1) receipt by the buyer of the
month grace period for every notice of cancellation or the
one demand for rescission of
(1) year of installment contract by a notarial act.
payments made
NOTE: This right shall be 2. Same No. 3 and 4
exercised by the buyer ONLY paragraph A above
once in every 5 years of the
life of the contract AND its NOTE: Down payments, deposits or
extensions. options on the contract shall be
included in the computation of the
total number of installment payments made
CIVIL LAW COMMITTEE


135
6. Seller must bear the

Remedies of Unpaid Seller expenses of delivery of the
I. Possessory Lien goods after the exercise of
When may be exercised: the right
1. Where the goods have
been sold without any GOODS ARE CONSIDERED IN
stipulation as to credit TRANSITU:
2. When the goods have 1. after delivery to a carrier or
been sold on credit, but the other bailee and before the buyer or
term of credit has expired his agent takes delivery of them;
3. Where the buyer and
becomes insolvent 2. If the goods are rejected by the
When lost: buyer, and the carrier or other
bailee continues in possession of
1. Delivery of the goods
them
to a carrier or bailee for the
purpose of transmission to
GOODS ARE NO LONGER
the buyer without reserving
CONSIDERED IN TRANSITU:
ownership or right of
1. after delivery to the buyer or his
possession
agent in that behalf;
2. When the buyer
2. if the buyer or his agent obtains
lawfully obtains possession of
possession of the goods at a point
the goods
before the destination originally
3. By waiver of the lien
fixed;
NOTE: Possessory lien is lost after the
3. if the carrier or the bailee
seller loses possession but his lien as
acknowledges to hold the goods on
an unpaid seller remains; hence he is
behalf of the buyer; and
still an unpaid creditor with respect to
4. if the carrier or bailee wrongfully
the price of specific goods sold. His
preference can only be defeated by refuses to deliver the goods to the
the governments claim to the specific buyer
tax on the goods themselves (Arts.
2247 and 2241).
Effects of the exercise of the right
NOTE: The bringing of an action to 1. The goods are no longer in transit.
recover the purchase price is not 2. The contract of carriage ends;
one of the ways of losing the instead the carrier now becomes
possessory lien. An unpaid seller a mere bailee, and will be liable
does not lose his lien by reason that as such.
he has obtained a money judgement 3. The carrier should not deliver
or decree for the price of goods (Art. anymore to the buyer or the
1529, last paragraph). latter’s agent; otherwise he will
clearly be liable for damages.
II. Stoppage of goods in 4. The carrier must redeliver to, or
transitu according to the directions of the
Requisites: seller.
1. Seller must be unpaid WAYS OF EXERCISING THE
2. Buyer must be RIGHT TO STOP:
insolvent 1. By taking actual possession of
3. Goods must be in the goods
transit 2. By giving notice of his claim to
4. Seller must either: the carrier or bailee
a. actually take
possession of the goods III. Special Right of Resale
sold OR May be exercised only when the
b. give notice of his unpaid seller has either a right of
claim to the carrier or lien OR has stopped the goods in
other person in transitu AND under ANY of the
possession following conditions:
5. Seller must surrender
the negotiable document of 1. Where the goods are
title, if any, issued by the perishable in nature
carrier or bailee
CIVIL LAW COMMITTEE

136
2. Where the right to 3. If the goods are not yet

resell is expressly reserved in identified at the time of the
case the buyer should make contract or subsequently
a default B. REMEDIES OF THE BUYER
3. Where the buyer FOR BREACH OF CONTRACT
delays in the payment of the
price for an unreasonable 1. Action for specific
time performance (Art. 1598)
W
IV. Rescission here the seller has broken the
Types: contract to deliver specific or
1. Special Right to ascertained goods
Rescind Under Art. 1534 – If T
the seller has either the right he judgment or decree may be
of lien OR a right to stop the unconditional, or upon such
goods in transitu AND under terms and conditions as to
either of 2 situations: damages, payment of the price
a. Where the right to and otherwise as the court may
rescind on default has deem just
been expressly reserved
b. Where the buyer has 2. Remedies of buyer for breach
been in default for an of warranty by seller (Art.
unreasonable time 1599):
2. Under Art. 1597 1. Recoupment – accept the
(“technical rescission”) goods and set up the seller’s
breach to reduce or extinguish
V. Action for the price the price
When may be exercised: 2. Accept the goods and maintain
an action for damages for breach
1. Where the ownership of warranty
has passed to the buyer AND 3. Refuse to accept the goods and
he wrongfully neglects OR maintain an action for damages
refuses to pay for the price for breach of warranty
2. Where the price is 4. Rescind the contract by
payable on a day certain AND returning or offering the return
he wrongfully neglects OR of the goods, and
refuses to pay for the price, recover the price of any part
irrespective of the delivery or thereof NOTE: These are alternative
transfer of title remedies.
3. Where the goods
cannot readily be resold for a When rescission by buyer not
reasonable price AND the allowed:
buyer wrongfully refuses to 1. if the buyer accepted the goods
accept them even before the knowing of the breach of warranty
ownership of the goods has without protest
passed, if Article 1596 is 2. if he fails to notify the seller within
inapplicable. a reasonable time of his election to
rescind
VI. Action for damages 3. if he fails to return or offer to
When may be exercised: return the goods in substantially as
1. In case of wrongful neglect or good condition as they were in at
refusal by the buyer to the time of the transfer of ownership
accept or pay for the thing to him
sold (Art. 1596 par.1)
2. In an executory contract, EXTINGUISHMENT OF SALE
where the ownership in the 1. Same causes as in all other
goods has not passed, and obligations
the seller cannot maintain an 2. Conventional Redemption
action to recover the price 3. Legal Redemption
(Art 1595)
CONVENTIONAL REDEMPTION
The right which the vendor
reserves to himself, to reacquire
the property
CIVIL LAW COMMITTEE

137
sold provided he returns to the NOTE: In the cases referred to in

vendee: Arts. 1602 and 1604, the apparent
b. the price of the sale; vendor may ask for the reformation
c. expenses of the contract; of the instrument.
d. any other legitimate Remedy of Reformation: To correct
payments made therefore the instrument so as to make it
and; express the true intent of the
e. the necessary and useful parties.
expenses made on the thing
sold; and Redemption Period
f. fulfills other stipulations a. if there is an agreement: period
which may have been agreed agreed upon cannot exceed 10
upon. years
b. if no agreement as to the period:
4 years from the date of the
A sale with conventional
contract
redemption is deemed to be an
c. the vendor who fails to
equitable mortgage in any of repurchase the property within
the following cases: (IPERTOD) the period agreed upon may,
1. Unusually Inadequate purchase however, exercise the right to
price; repurchase within 30 days FROM
the time final judgment was
2. Possession by the vendor rendered in a civil action on the
remains, as lessee or otherwise;
basis that the contract was a
3. Extension of redemption period true sale with right of repurchase
after expiration; This refers to cases involving
4. Retention by the vendee of part a transaction where one of
of the purchase price; the parties contests or
5. Vendor binds himself to pay the denies that the true
Taxes of the thing sold; agreement is one of sale with
6. Any Other case where the right to repurchase; not to
parties really intended that the cases where the
transaction should secure the transaction is conclusively a
payment of a debt or the pacto de retro sale.
performance of any obligation; Example: Where a buyer a
or retro honestly believed that
he entered merely into an
7. When there is Doubt as to
Equitable Mortgage, not a
whether contract is contract of
pacto de retro
sale with right of repurchase or
an equitable mortgage. transaction, and because of
such belief he had not
Equitable Mortgage redeemed within the proper
One which lacks the proper period.
formalities, form of words, or NOTE: Tender of payment is
other requisites prescribed by sufficient to compel redemption,
law for a mortgage, but shows but is not in itself a payment that
the intention of the parties to relieves the vendor from his
make the property subject of the liability to pay the redemption
contract as security for a debt price (Paez vs. Magno.)
and contains nothing impossible
or contrary to law (Cachola vs. LEGAL REDEMPTION
CA 208SCRA496) The right to be subrogated, upon
the same terms and conditions
* When can there be presumption as stipulated in the contract, in the
to Equitable Mortgage? place of one who acquires a
1) Parties must have entered into a thing by (1) purchase or (2)
contract denominated as a contract dation in payment, or (3) by any
of sale other transaction whereby
2) The intention of the parties was ownership is transferred by
to secure an existing debt by way of onerous title.
mortgage May be effected against
movables or immovables.
CIVIL LAW COMMITTEE

138
It must be exercised within thirty 3. Redemption of homesteads

(30) days from the notice in
writing by the vendor.\ 4. Redemption in tax sales
5. Redemption by an
agricultural tenant of land
NOTE: Written notice under Article sold by the landowner
1623 is mandatory for the right of
redemption to commence (PSC vs.
Sps. Valencia 19 August 2003.) ASSIGNMENT OF CREDIT
a contract by which the owner of
BASIS OF LEGAL REDEMPTION: a credit transfers to another his
Not on any proprietary right, which rights and actions against a third
after the sale of the property on person in consideration of a price
execution, leaves the judgment certain in money or its
debtor and vests in the purchaser, equivalent
but on a bare statutory privilege to
be exercised only by the persons NOTE: Transfer of rights by
named in the statute. assignment takes place by the
perfection of the contract of
Tender of payment is not assignment without the necessity of
necessary; offer to redeem is delivering the document evidencing
enough. the credit.
this rule does not apply to
PRE- negotiable documents and
EMPTION REDEMPTION documents of title which are
1. arises before 1. arises after sale governed by special laws.
Sale
2. no rescission 2. there can be Effects of Assignment:
because no sale 1. transfers the right to collect the
as rescission of the full value of the credit, even if he
yet original paid a price less than such value
exists sale
2. transfers all the accessory rights
3. the action is 3. action is directed
against the
3. debtor can set up against the
directed against buyer assignee all the defenses he
the prospective could have set up against the
seller assignor
Instances of legal redemption: Effect of payment by the debtor

A. Under the Civil Code (legal after assignment of credit
redemption): 1. Before Notice of the assignment
1. Sale of a co-owner of Payment to the
his share to a stranger original creditor is valid and
(Article 1620) debtor shall be released from
2. When a credit or other his obligation
incorporeal right in litigation 2. After Notice
is sold (Article 1634) Payment to the
3. Sale of an heir of his original creditor is not valid
hereditary rights to a as against the assignee
stranger (Article 1088)
He can be made to
4. Sale of adjacent rural
pay again by the assignee
lands not exceeding one
hectare (Article 1621)
5. Sale of adjacent small Warranties of the assignor of credit:
urban lands bought merely a. He warrants the existence
for speculation (Article 1622) of the credit
B. Under special laws: b. He warrants the
1. An equity of legality of the credit at the
redemption in cases of perfection of the contract
judicial foreclosures
2. A right of redemption in
cases of extra-judicial
foreclosures
CIVIL LAW COMMITTEE

139

c. Sale to the possessor
NOTE: There is no warranty as to of property in question
the solvency of the debtor unless it
is expressly stipulated OR unless the
insolvency was already existing and
of public knowledge at the time of
the assignment
NOTE: The seller of an inheritance

warrants only the fact of his heirship
but not the objects which make up
his inheritance.
Liabilities of the assignor of

credit for violation of his
warranties
1. Assignor in good faith
Liability is limited only
to the price received and to
the expenses of the contract,
and any other legitimate
payments by reason of the
assignment
2. Assignor in bad faith
Liable not only for the
payment of the price and all
the expenses but also for
damages
Legal Redemption in Sale or

Credit or other incorporeal right
in litigation
Requisites:
1. There must be a sale or
assignment of credit
2. There must be a pending
litigation at the time of the
assignment
3. The debtor must pay the
assignee:
a. price paid by him
b. judicial cost incurred by
him;
AND
c. interest on the price from the
date of payment
4. The right must be exercised by

the debtor within 30 days from
the date the assignee demands
(judicially or extra-judicially)
payment from him
SALE OF CREDIT OR OTHER

INCORPOREAL RIGHTS IN
LITIGATION
GENERAL RULE: Debtor has the
right of legal redemption in sale of
credit or incorporeal rights in
litigation
EXCEPTIONS:
a. Sale to a co-heir or co-
owner
b. Sale to a co-owner
Where the giver of the thing
bartered is not the lawful owner
thereof, the aggrieved party
BARTER cannot be compelled to deliver
the thing which he has promised
BARTER and is also entitled to damages.
contract whereby one of the Where a party is evicted of the
parties binds himself to give one thing exchanged, the injured
thing in consideration of the party is given the option, either
other's promise to give another to recover the property he has
thing (Article 1638) given in exchange with damages
or only claim an indemnity for
NOTE: Barter is similar to a sale damages.
with the only difference that instead As to matters not provided for by
of paying a price in money, another the provisions on barter, the
thing is given in lieu of the purchase provisions on sales will apply
price suppletorily
PERFECTION and CONSUMMATION BULK SALES LAW (Act No. 3952)

Perfected from the moment When Sale or Transfer in Bulk:
there is a meeting of minds upon Any sale, transfer, mortgage,
the things promised by each or assignment:
party in consideration of the 1. Of a stock of goods, wares,
other merchandise, provisions, or
materials otherwise than in the
Consummated from the time of ordinary course of trade and the
mutual delivery by the regular prosecution of business;
contracting parties of the things or
promised 2. Of all or substantially all, of the
business or trade; or
NOTES:
CIVIL LAW COMMITTEE

140
3. Of all or substantially all, of the The remedy of the

fixtures and equipment used in creditor is not against the
the business of the vendor, goods but to prosecute the
mortgagor, transferor or assignor seller criminally
(section 2) 2. With knowledge or imputed
knowledge of buyer
When sale or transfer in bulk The vendee accepts it at his
not covered by Bulk Sales Law: peril The sale is valid only as
1. If the sale or transfer is in the between the vendor and the
ordinary course of trade and the vendee but
regular prosecution of business void against the creditors
of the vendor;
2. If it is made by one who 3. With names of certain
produces and delivers a written creditors without notice are
waiver of the provisions of the omitted from the list
Bulk Sales Act from his creditors The sale is void as to such
3. If it is made by an executor, creditors, whether the
administrator, receiver, assignee omission was fraudulent or
in insolvency, or public officer, not,
acting under judicial process 4. With respect to an innocent
(Section 8); and purchaser for a value from
4. If it refers to properties exempt the original purchaser
from attachment or execution An innocent purchaser for
(Rules of Court, Rule 39, Section value from the original
12) purchaser is protected
However if the circumstances
Protection Accorded to are such as to bind the
Creditors by subsequent purchaser with
Bulk Sales Law: constructive notice that the
1. It requires the vendor, sale to the vendor
mortgagor, transferor or assignor (original purchaser) was
to deliver to the vendee, fraudulent, the property will
mortgagee, or to his or its agent be liable in his hands to
or representative a sworn written creditors of the original
statement of names and vendor
addresses of all creditors to Effect of violation of law on
whom said vendor, etc. may Transfer:
have been indebted together 1. As between the parties
with the amount due or to be The Bulk Sales Law does not
due (Section 3) in any way affect the validity
2. It requires the vendor, of the transfer as between
mortgagor, transferor or the intermediate parties
assignor, at least 10 days before thereto
the sale, transfer, mortgage, A sale not in compliance with
assignment to make a full the Bulk Sales Law is valid
detailed inventory showing the against all persons other than
quantity and the cost of price of the creditors.
goods, and to notify every 2. As against creditors
creditor of the price terms and A purchaser in violation of
conditions of the sale, etc. the law acquires no right in
(Section 5) the property purchased as
against the creditors of the
Effects of False Statements in seller
the His status is that of a trustee
Schedule of Creditors: or receiver for the benefit of
1. Without knowledge of buyer the creditors of the seller; as
If the statement is fair such, he is responsible for
upon its face and the buyer the disposition of the
has no knowledge of its property
incorrectness and nothing to
put him on inquiry about it, Remedies Available to creditors:
he will be protected in its The proper remedy is one
purchase against the goods to subject
them to the payment of the debt, such as
CIVIL LAW COMMITTEE

141

outlet, irrespective of
execution, attachment, capitalization
garnishment, or by a proceeding in
High-End or Luxury Goods
equity
An ordinary action against
the purchaser to obtain money
judgement will not lie, unless the
purchaser has sold or otherwise
disposed of, or dealt with the
property, so as to become
personally liable to creditors for
value of it.
Acts Punished by Bulk Sales
Law:
1. Knowingly or wilfully making or
delivering a statement required
by the Act which does not
include the names of all the
creditors of the vendor, etc. with
the correct amount due or to
become due or which contains
any false or untrue statement;
and
2. Transferring title to any stock
of
goods, wares, merchandise,
provisions or materials sold in
bulk without consideration or for
nominal consideration (Section
7)
RETAIL TRADE LIBERALIZATION

ACT
(RA 8762)
Retail Trade
Any act occupation or calling
of habitually selling direct to
the
generalpublicmerchandise,
commodities or goods for
consumption, but the restrictions
of this law shall not apply to the
following:
1. Sales by manufacturer,
processor, laborer, or worker, to
the general public the products
manufactured, processed
produced by him if his capital
does not exceed P100,000;
2. Sales by a farmer or
agriculturalist selling the
products of his farm
3. Sales in restaurant operations by
a
hotel owner or inn-keeper
irrespective of the amount of
capital; provided that the
restaurant is incidental to the
hotel business; and
4. Sales which are limited only to
products manufactured,
processed or assembled by a
manufacturer through a single
Paid-up capital of the
Goods which equivalent in Philippine Peso
of:
are not necessary for life
maintenance and whose demand < $2,500,000 US Dollars
is generated in large part by the Reserved exclusively
higher income groups for Filipino citizens and
corporations wholly owned by
Shall include
citizens
but not limited to: jewelry,
branded or designer clothing and 2. Category B:
footwear, wearing apparel, Minimum paid-up
leisure and sporting goods, capital of the equivalent in
electronics and other personal Philippine Peso of
effects $2,500,000 US Dollars,
NOTE: A natural-born citizen of the but <$7,500,000
Philippines who has lost his May be wholly owned
citizenship but who resides in the by foreigners except for the
Philippines shall be granted the first two years after the
same rights as Filipino citizens effectivity of this Act wherein
foreign participation shall be
Foreign Equity Participation: limited to not > 60% of total
Foreign-owned partnerships, equity.
associations and corporations 3. Category C:
formed and organized under the Paid-up capital of the
laws of the Philippines may, upon equivalent in Philippine Peso
registration with SEC and DTI, or of: $7,500,000 US Dollars
in case of Foreign-owned single or more
proprietorship with the DTI, May be wholly owned
engage or invest in retail trade by foreigners
business, subject to the
NOTE: In no case shall the
following categories:
investments for establishing
1. Category A:
a
CIVIL LAW COMMITTEE

142
store in Categories B and C 2. 5 retailing branches or franchises

be less than the equivalent in in operation anywhere around
Philippine Peso of: US the world unless such retailer
$830,000 has at least 1 store capitalized at
4. Category D: a minimum of $25,000,000 US
Enterprises specializing Dollars
in high-end or luxury products 3. 5-year track record in retailing; and
with paid-up capital of the 4. Only nationals from, or juridical
equivalent in Philippine Peso entities formed or incorporated
of: $250,000 in Countries which allow to
US Dollars per store engage in retail trade in the
May be wholly owned Philippines
by foreigners
PD 957 (SUBDIVISION AND

NOTES:
CONDOMINIUM BUYERS’
Foreign investor shall be required PROTECTIVE DECREE
to maintain in the Philippines the
FULL amount of the prescribed Registration of Projects
minimum capital, UNLESS the The registered owner of a parcel of
foreign investor has notified the land who wishes to convert the
SEC and the DTI of its intention to same into a subdivision project
repatriate its capital and cease shall submit his subdivision plan to
operations in the Philippines the HOUSING AND LAND-USE
Failure to maintain the full REGULATORY BOARD, which shall
amount of the prescribed act upon and approve the same,
minimum capital prior to upon a finding that the plan
notification of the SEC and the complies with the Subdivision
DTI shall subject the foreign Standards' and Regulations
investors to penalties or enforceable at the time the plan
restrictions on any future trading is submitted. The same
activities/business in the procedure shall be followed in
Philippines the case of a plan for a
condominium project except
NOTE: Foreign Investors Acquiring that, in addition, said Authority
Shares of Stock of existing retail shall act upon and approve the
stores whether or not publicly listed plan with respect to the building
whose net worth is in excess of the or buildings included in the
Peso equivalent of US $2,500,000 may condominium project in
purchase only up to the maximum of accordance with the National
60% of the equity thereof within the Building Code (R.A. No. 6541).
first 2 years, and thereafter, they may The subdivision plan, as so
acquire the remaining percentage approved, shall then be submitted
consistent with the allowable foreign to the Director of Lands for
participation as herein provided approval in accordance with the
procedure prescribed in Section 44
NOTE: All retail Trade enterprises of the Land Registration Act (Act
under categories B and C in which No. 496, as amended by R.A. No.
foreign ownership exceeds 80% of 440): Provided, that it case of
equity shall offer a minimum of 30% complex subdivision plans, court
of their equity to the public through approval shall no longer be
any stock exchange in the required. The condominium plan
Philippines within 8 years from the as likewise so approved, shall be
start of the operations submitted to the Register of Deeds
of the province or city in which the
Qualification of Foreign property lies and the same shall
Retailers be acted upon subject to the
1. Minimum of $200,000,000 US conditions and in accordance with
Dollars net worth in its parent the procedure prescribed in
corporation for Categories B and Section 4 of the Condominium Act
C and $50,000,000 net worth in (R.A. No. 4726).
its parent corporation for
Categories D
CIVIL LAW COMMITTEE

143
6. Does not conduct his business in

National Housing authority (now accordance with law or sound
Housing and Land Use business principles.
Regulatory Board) has the
exclusive jurisdiction to regulate
the real estate trade and
LEASE
business.
LEASE
License to sell consensual, bilateral, onerous,
Such owner or dealer to whom and commutative contract by
has been issued a registration virtue of which one person binds
certificate shall not, however, be himself to grant temporarily the
authorized to sell any subdivision use of the thing or to render some
lot or condominium unit in the service to another
registered project unless he shall who undertakes to pay some rent.
have first obtained a license to Kinds of Leases (From the view
sell the project within two weeks point of the subject matter
from the registration of such 1. Lease of things
project. 2. Lease of service
3. Lease of work
Exempt transactions
A license to sell and performance NOTE: Since lease is consensual
bond shall not be required in any and is not imposed by law, only the
of the following transactions: lessor has the right to fix the rents.
1. Sale of a subdivision lot resulting However, the increasing of the rent
from the partition of land among is not an absolute right on the part
co-owners and co-heirs. of the lessor.
2. Sale or transfer of a subdivision
lot by the original purchaser Characteristics or Requisites for
thereof and any subsequent sale Lease of Things
of the same lot. 1. Consensual
3. Sale of a subdivision lot or a 2. Principal
condominium unit by or for the 3. Nominate
account of a mortgagee in the 4. Purpose is to allow
ordinary course of business enjoyment or use of a thing
when necessary to liquidate a (the person to enjoy is the
bona fide debt. lessee; the person allowing
the enjoyment by another is
Grounds for Revocation of the lessor
registration certificate and 5. Subject matter must be
license to sell of owners or within the commerce of man
dealers 6. Purpose to which the thing
1. Is insolvent; or will be devoted should not be
2. Has violated any of the immoral
provisions of this Decree or any 7. Onerous (there must rent or
applicable rule or regulation of price certain)
the Authority, or any undertaking 8. Period is Temporary (not
of his/its performance bond; or perpetual, hence, the longest
3. Has been or is engaged or is period is 99 years)
about to engage in fraudulent 9. Period is either definite or
transactions; or indefinite
4. Has made any misrepresentation If no term is fixed, we should
in any prospectus, brochure, apply Art.1682 (for rural
circular or other literature about leases) and Art. 1687 (for
the subdivision project or urban leases)
condominium project that has
If the term is fixed but
been distributed to prospective
buyers; or indefinite, the court will fix
5. Is of bad business repute; or the
CIVIL LAW COMMITTEE


144
term under the law of 2. lessor has to 2. lessor has to

obligations and contracts delive
10. Lessor need not be the owner r the perform some
thing leased work or service
NOTE: A usufructuary may thus 3. in case of
3. in case of breach,
lease the premises in favor of a n
stranger, such lease to end at breach, there o action for
the time that the usufruct itself can be an action specific
ends for specific performance
performanc
Rent e
The compensation either in
money, provisions, chattels, Lease Contract for
or labor, received by the of a
lessor from the lessee. Service Piece of
s Work
(locatio (locatio operas)
NOTES: operatu
m)
When a student boards and
lodges in a dormitory, there is no
1. the 1. the important
importan object is the
contract of lease. The contract is t work
not designated specifically in the object is the done
Civil Code. It is an innominate labor
contract. It is however, believed performed by
that the contract can be the
lessor
denominated as the contract of
2. the result is 2. the result is
board and lodging. generall
There is a contract of lease when y generally
the use and enjoyment of a no important
safety deposit box in a bank is t ;
given for a price certain. This is important, generally, the
certainly not a contract of hence the price is not
unti
deposit.
laborer is payable l
A lease of personal property with wor
option to buy (at a nominal entitled to the k is
amount) at the end of the lease completed,
can be considered a sale. be paid even and
ther
if e is said price
destruction cannot be
of the work lawfully
demande
through d if
wor
fortuitous the k is
event destroyed
befor
e it is
finished and
accepted
4. the price of the 4. usually, the

LEASE SALES object, selling price is
1. only use or 1. ownership is distinguished
enjoyment is transferred from mentioned
transferred the rent, is usually
2. transfer is 2. transfer is not
temporary permanent mentioned
lessor selle mus
3. need not 3. r t be
th Lease of
be the owner e owner at the Lease of Services
time Things
the property 1. object of 1. object is
is delivered contract is a some work or
servic
thing e Lease of Agency
Services
It is based on It is based on
employmen
t – representation –
agent represents
the lessor of his
services does principal and
not enters
represent his into juridical acts.
employer nor
does he execute
juridical
acts.
Principal Preparatory
contract contract
Rule for Lease of Consumable Goods

GENERAL RULE: Consumable
goods cannot be the subject matter
of a contract of lease of things.
Why? To use or enjoy hem, they will
have to be consumed. This cannot be
done by a lease since ownership over
them is not
CIVIL LAW COMMITTEE

145
transferred to him by the contract of LEASE

lease. 1. there are two 1. there is only one
EXCEPTIONS: leases and two juridical
a. If they are merely distinc
exhibited t juridical
relationship, that of
b. If they are accessory relationshi lesso
ps the r and the
to an industrial establishment assignee
although , who is
RECORDING OF LEASE OF immediatel converte int
PERSONAL PROPERTY y d o a
GENERAL RULE: Lease of real connected and lessee
property is personal right relate
EXCEPTIONS: Lease partakes of d to each
other
the nature of real right if:
2. the 2. the personality
a. Lease of real property
personality of
is more than 1 year of the lessee
b. Lease of real property does the lessee
is registered regardless of disappea
duration not disappear rs
NOTE: Lease of personal property 3.the lessee

cannot be registered. To be binding does 3. the lessee
transmit
against third persons, the parties
not transmit s absolutely
must execute a public instrument. right
absolutely his his s to the
* Lease may be made orally, but if rights and assignee
the lease of Real Property is for obligations to
more than 1 year, it must be in the
writing under the Statue of sublessee
Frauds. sublessee 4. the assignee has
4. the , a
Persons Disqualified to be direct action
generally, does against
Lessees Because the
Disqualified to Buy not have any lessor
1. A husband and a wife cannot direct action
lease to each other their against the
separate properties except: lessor
a. if separation of property was
agreed upon RIGHTS OF LESSOR IF SUBLEASE
b. if there has been judicial PROHIBITED BUT ENTERED INTO
separation of property BY LESSEE:
Persons referred to in Art. 1491 are 1) Rescission and damages, or
disqualified because of fiduciary 2) Damages only (Contract will be
relationships allowed to remain in force)
3) Ejectment
SUBLEASE
A separate and distinct contract Instances when sublessee is
of lease wherein the original liable to the lessor:
lessee becomes a sublessor to a a. All acts which refer to
sublessee. the use and preservation of
the thing leased in the
Allowed unless expressly
manner stipulated between
prohibited. The sublessee is the lessor and the lessee
subsidiarily liable for b. The sublessee is
any rent due. The lessor has an subsidiarily liable to the
accion directa against the lessor for any rent due from
sublessee for unpaid rentals and the lessee.
improper use of the object. NOTE: The sublessee shall not be
responsible beyond the amount of
ASSIGNMENT rent due from him.
SUBLEASE OF
Accion Directa: direct action which
the lessor may bring against a
sublessee who misuses the a. Delivery of the object
subleased property. (cannot be waived)
b. Making of necessary
OBLIGATIONS OF THE LESSOR (DnM) repairs
CIVIL LAW COMMITTEE

146
c. Maintenance in Alternative remedies of

peaceful and adequate Aggrieved party (Lessor/Lessee)
possession in case of Non-fulfillment of
duties:
OBLIGATIONS OF THE LESSEE 1. Rescission and damages
(R2EN2U) 2. Damages only, allowing the
a. to pay rent contract to remain in force –
Specific Performance
b. to use thing leased as NOTE: Damages Recoverable in
a diligent father of a family, ejectment cases are the rents or the
devoting it to the use fair rental value of the premises. The
stipulated following cannot be successfully
c. to pay expenses for claimed:
the deed of lease 1. Profits plaintiff could
d. to notify the lessor of have earned were it not for
usurpation or untoward acts the possible entry or unlawful
e. to notify the lessor of detainer
need for repairs 2. Material injury to the
f. to return the property premises
leased upon termination of 3. Actual, moral, or
the lease exemplary damages
Effect of Destruction of the Immediate termination of lease

Thing Leased: under
1. Total destruction by a fortuitous Art. 1660 applies:
event 1. only to dwelling place or any
Lease is extinguished other building intended for
human habitation
2. even if at the time the contract
was perfected, the lessee knew
of the
2. Partial destruction dangerous condition or waived
a. Proportional reduction of the the right to rescind on account of
rent, or this condition
b. Rescission of the lease Rules on Alteration of the Form
When lessee may suspend of the Lease
payment of rent: The Lessor can alter provided
1. lessor fails to undertake there is no impairment of the use
necessary repairs to which the thing is devoted
2. lessor fails to maintain the lessee under the terms of the lease
in peaceful and adequate Alteration can also be made by the
enjoyment of the property leased Lessee so long as the value of the
property is not substantially
NOTE: “Suspend”- for the impaired
intervening period, the lessee does
not have to pay the rent. Rules in case of Urgent Repairs
The lessee is obliged to tolerate
EFFECTIVITY OF THE the work although it may be
SUSPENSION: very
The right begins: annoying to him and although
a) In the case of repairs, from the during the same time he may be
time he made the demand for said deprived of a part of the
repairs, and the demand went premises
unheeded. 1. If repairs last for more than 40
b) In the case of eviction, from the days: Lessee cannot act for
time the final judgment for eviction reduction of rent or rescission
becomes effective. 2. If 40 days or more: lessee can
ask for proportionate reduction
NOTE: In either case, rescission
may be availed of if the main
purpose is to
CIVIL LAW COMMITTEE

147
provide a dwelling place and the a. If rent is paid daily: lease is

property becomes uninhabitable. from day to day
b. If rent is paid weekly: lease is
Effects if Lessor fails to make from week to week
Urgent Repairs c. If rent is paid monthly: lease
1. Lessee may order repairs at the is from month to month
lessor’s cost d. If rent is paid yearly: lease is
2. Lessee may sue for damages from year to year
3. Lessee may suspend the
payment of the rent RULES ON EXTENSION OF THE
4. Lessee may ask for rescission, in LEASE PERIOD:
case of substantial damage to 1) If a lease contract for a definite
him term allows lessee to extend the
term, there is no necessity for lessee
TRESPASS IN LEASE: to notify lessor of his desire to so
1. Trespass in fact extend the term, unless the contrary
(perturbacion de mere hecho): is stipulated.
physic 2) “May be extended” as
al enjoyment is stipulation: lessee can extend
without lessor’s consent but lessee
reduced
must notify lessor.
Lessor will not 3) “May be extended for 6 years
be held liable. agreed upon by both parties” as
2. Trespass in law stipulation: This must be interpreted in
(perturbacion de derecho): favor of the lessee. Hence, ordinarily
A third person claims the lessee at the end of the original
legal right to enjoy the period may either:
premises Lessor will be held a) leavethe
premises; or
liable
b) remainin
possession
NOTE: While the Japanese 4) In co-ownership, assent of all is
Occupation was a fortuitous event, needed; otherwise, it is void or
the lessor is still not excused from ineffective as against non-
his obligation to warrant peaceful consenting co-owners.
legal possession. Lease is a contract 5) Where according to the terms of
that calls for prestations both the contract, the lease can be
reciprocal and repetitive; and the extended only by the written
obligations of either party are not consent of the parties thereto, no
discharged at any given moment, right of extension can rise without
but must be fulfilled all throughout such written consent.
the term of the contract. (Villaruel
vs. Manila Motor Co.) Rule if Lessor Objects to the
Lessee’s continued Possession:
Duration of Lease Requisites:
1. Lease made for a
1. Contract has expired
determinate time or fixed
2. Lessee continued enjoying the thing
Period
3. Lessor Objected to this
Lease will be for the
enjoyment If the three requisites
said period and it ends on the
day fixed without need of a are present, the lessee shall be
demand considered a possessor in bad
faith
2. If there is no fixed period
IMPLIED NEW LEASE (Tacita
A. For Rural Lands (Article
1680) Reconducion)
lease which arises if at the end of
it shall be for all time
the contract the lessee should
necessary for the gathering
continue enjoying the thing leased
of fruits which the whole
estate may yield in 1 year, or for 15 days with the acquiescence
which it may yield once of the lessor,
B. For Urban Lands (Article
1687)
CIVIL LAW COMMITTEE

148

NOTE: In Jespajo Realty vs. CA, 27
unless a notice to the contrary had Sept. 2002, the SC upheld a lease
previously been given by either contract,
party.
Requisites:
a. the term of the
original contract has expired
b. the lessor has not
given the lessee a notice to
vacate
c. the lessee continued
enjoying the thing leased for
at least 15 days with the
acquiescence of the lessor
When there is no implied new

lease:
1. When before or after the
expiration of the term, there is a
notice to vacate given by either
party.
2. When there is no definite fixed
period in the original lease
contract as in the case of
successive renewals.
Effects:
a. The period of the new
lease is not that stated in the
original contract but the time
in Articles 1682 and 1687.
b. Other terms of the
original contract are revived.
NOTE: Terms that are revived are

only those which are germane to the
enjoyment of possession, but not
those with respect to special
agreements
which are by nature foreign to the

right of occupancy or enjoyment
inherent in a contract of lease – such
as an option to purchase the leased
premises (Dizon vs. Magsaysay GR
No. 23399, May 31,1974)
Perpetual Lease
A lease contract providing that the
lessee can stay in the premises for
as long as he wants and for as
long as he can pay the rentals and
its increases.
This is not permissible; it is a
purely potestative condition
because it leaves the effectivity
and enjoyment of leasehold
rights to the sole and exclusive
will of the lessee
1. Expiration of the period agreed
which provides that “the lease upon or the period under Arts.
contract shall continue for an 1682 and 1687;
indefinite period provided that the 2. Lack of payment of the price
lessee is up-to-date in the payment stipulated;
of his monthly rentals” for the 3. Violation of any of the conditions
contract is one with a period subject agreed upon in the contract; and
to a resolutory condition. 4. Unauthorized use or service by
the lessee of the thing leased.
PURCHASE OF THE LEASED
PROPERTY GENERAL RULE:
Purchaser of thing leased can
terminate lease. RENTAL REFORM ACT OF 2002
EXCEPTIONS: (R.A. No. 9161)
a. lease is recorded in Effectivity: January 1,
Registry of Property 2002. Coverage:
b. there is stipulation in
a. All residential units of NCR and
the contract of sale that
other highly urbanized cities, the
purchaser shall respect the
total monthly rental for each of
lease
which does not exceed P7,500;
c. purchaser knows the
existence of the lease b. All residential units in other
areas the total monthly rental
d. sale is fictitious
for each of which does not
e. sale is made with right exceed P4,000 as of 1/1/02,
of repurchase without prejudice to pre-existing
contracts.
GROUNDS FOR EJECTMENT UNDER
ART. Grounds for judicial ejectment:
1673: (ELVU)
SANORE
CIVIL LAW COMMITTEE


149
1. Assignment of lease or
subleasing of residential units TERMINATION OF THE LEASE
including the acceptance of If made for a determinate time, it
boarders or bedspacers without ceases upon the day fixed
written consent of the owner or without the need of a demand.
lessor; 1) By the expiration of the period
2. Arrears in payment of rent for a 2) By the total loss of the thing
total of 3 months; 3) By the resolution of the right of
3. Legitimate needs of the owner or the lessor
lessor to repossess for his own 4) By the will of the purchaser or
use or for the use of any transferee of the thing
immediate member of his family 5) By rescission due to non-
as a residential unit, provided: performance of the obligation of one
a. owner or immediate member of the parties
not being owner of any other
available residential unit within Special Provisions for Rural Lands
the same city or municipality; Effect of loss due to fortuitous
b. lease for a definite period has
event:
expired;
c. lessor has given lessee 1. Ordinary fortuitous event – no
formal notice 3 months in reduction
advance; and 2. Extraordinary fortuitous event
d. owner or lessor is prohibited a. if more than ½ of the fruits
from leasing the residential unit were lost, there shall be a
or allowing its use by a third reduction, unless there is a
person for at least 1 year. stipulation to the contrary
b. if ½ or less, there shall be no
4. Absolute ownership by the reduction
lessee of another dwelling unit in Lease duration: If not fixed, it
the same city or municipality shall be for all time necessary for
which may be lawfully used as the gathering of fruits which the
his residence provided lessee is
whole estate may yield in 1 year,
with formal notice 3 months in
or which it may yield once.
advance;
5. Need of the lessor to make Special Provisions for Urban Lands
necessary repairs in the leased
Repairs for which urban lessor is
premises which is the subject of
an existing order of liable:
condemnation by appropriate 1. special stipulation
authorities concerned in order to 2. if none, custom of the place
make said premises safe and 3. in case of doubt, the repairs are
habitable; and chargeable against him
6. Expiration of period of the lease
contract.
Lease duration:
NOTE: 1. If there is a fixed period, lease will
Except when the lease is for a be for said period.
definite period, the provisions of 2. If no fixed period, apply the
Art. 1673(1) of the Civil Code following rules:
(CC), insofar as they refer to a. If rent is paid daily: day
residential units, shall be to day
suspended during the effectivity b. If rent is paid weekly:
of R.A. 9161, but other week to week
provisions of the CC and the c. If rent is paid monthly:
Rules of Court on lease contracts month to month
insofar as they are not in conflict d. If rent is paid yearly:
with the provisions of R.A. No. year to year
9161 shall apply.
No increase in monthly rental by
more than 10% is allowed.
CIVIL LAW COMMITTEE

150
Please study the following uploaded

materials:
1. Study Notes (Pleadings)
2. Study Notes (Appeal Briefs)
3. Quotations by Prof. Rick Bales

CIVIL LAW COMMITTEE

151
4. Appellate Briefs -- A Reader's

Perspective by David E. Sorkin
5. Winning with the Facts by David

E. Sorkin
6. De Liano v. Court of Appeals
7. People v. Cortez
Additional reading materials and

assignment to be upoaded/posted.
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San Beda College of Law

MEMORY AID IN CIVIL LAW

Elements: NOTE: Absent a proviso in the

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Conditional Sale Contract to

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

more in keeping with the 1. Buyer receives Agen

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

NOTE: If the consideration is partly

CIVIL LAW COMMITTEE

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

4. In the cases providedGENERAL RULE: Mere inadequacy of the

Effect when the price is fixed by 2. Involuntary or Forced sales

Effect when the price is not

Effect of Gross Inadequacy of

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Requirements for perfection

RULES GOVERNING AUCTION SALES

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

does not bind the promissor supported by a consideration, the

CIVIL LAW COMMITTEE

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Earnest money – or “ARRAS” is

RULES ON RISK OF LOSS AND

CIVIL LAW COMMITTEE

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Sale by description 3. Sale of property not to

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

6. any other person specially

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

1. Actual or real – placing the thing 2. If no period for payment has

CIVIL LAW COMMITTEE

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Transfer of ownership where

SALE OF GOODS BY A NON-

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

The document is negotiable if: RULES WHEN QUANTITY IS LESS

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

SELLER’S DUTY AFTER DELIVERY

PAYMENT OF THE PURCHASE

Sale of Real Property by Unit

CIVIL LAW COMMITTEE

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW

Registration requires actual perfection of a contract and a

Ma. Ricasion Tugadi (Conflicts of Law)

MEMORY AID IN CIVIL LAW