Sales Uribe

SALES Articles / Laws to Remember: 1458, 1467, 1477 transfer of ownership, 1505, 559 who can transfer xxx,
1504, 1544, 1484 Recto Law, R.A. 6552, 1602, 1606, 1620, 1623, Rede ption xxx Q: A obliged himself to deliver a certain thing to B. Upon delivery, B would pay a sum of money to A. Is that a contract of sale? A! "ot necessari#$. %&en if there is an o'#i(ation to de#i&er, if there is no o'#i(ation to transfer ownership, it wi## not 'e a contract of sa#e. )t a$ 'e a contact of #ease. Memorize: Art. 1458 Note: *a#e is a contract, so the (enera# princip#es in o'#icon are app#ica'#e to sa#e '+t note that there are pro&isions which are contrar$. Characteristics of Contract of Sale (COS) 1. Consens al (1!"#) , -.* is consens+a#, it is perfected '$ ere eetin( of the inds of the parties as to the o'/ect and price. Note: 0here is 1 specia# #aw which re1+ires a partic+#ar for for the &a#idit$ of a contract of sa#e , in that sa#e, it can 'e said that 2ind of sa#e is a for a# contract 3 -att#e Re(istration 4ecree. )n a sa#e of #ar(e catt#e, the #aw pro&ides that the contract of sa#e of #ar(e catt#e +st 'e! in a p+'#ic instr+ ent, re(istered and a certificate of tit#e sho+#d 'e o'tained in order for the sa#e to 'e &a#id. 5+t otherwise, the other contracts are perfected '$ ere consent or ere eetin( of the inds. $. %rinci&al , sa#e is a principa# contract, it can stand on its own. )t does not depend on other contracts for its existence and &a#idit$. '. (ilateral (1!#)) , necessari#$ in a -.*, 'oth parties wi## 'e o'#i(ated. )t is not possi'#e that on#$ 1 part$ is o'#i(ated 'eca+se a contract of sa#e is essentia##$ onero+s. !. Onero s (1'#*) , -.* is essentia##$ onero+s. .therwise, it a$ 'e another contract or an$ other act #i2e it a$ 'e a donation if there is no co pensation for the transfer of ownership to the other part$. #. Comm tati+e ($*1*) , eanin( there is e1+i&a#enc$ in the &a#+e of the prestation to 'e perfor ed '$ 'oth parties. "or a##$, the thin( so#d wo+#d 'e e1+a# to the price paid '$ the other part$ 6'+$er7. %xception! a contract of sa#e which is an a#eator$ contract #i2e sa#e of hope. )n sa#e of hope, the o'#i(ation of 1 part$ wi## arise +pon the happenin( of a certain e&ent or condition. Example Sale of Hope: *a#e of a #otto tic2et, 8-*. wi## ha&e the o'#i(ation to pa$ $o+ on#$ if $o+ (ot a## the 4 or 6 n+ 'ers which are drawn Another Example of Aleatory: )ns+rance ,. Nominate (1!#)) Classification of Contract of Sale 1. As to Nat re of S b-ect Matter a. 9o&a'#e '. ) o&a'#e Q: hy there is a need to determine? A! 5eca+se so e concepts wi## app#$ if the o'/ect is wi## app#$ if the o'/ect is i o&a'#e. o&a'#e or so e #aws
2. 4ation in 8a$ ent 64)87 &s. -.* 3. -ontract for a 8iece of <or2 6-8<7 &s. -.* 4. 5arter &s. -.* 5. A(enc$ to *e## 6A0*7 &s. -.* .ee/ of Absol te Sale (.AS) +s. Con/itional Sale (CS) +s. Contract to Sell (C0S) .AS , se##er does not reser&e his tit#e o&er the thin( so#d and th+s, +pon de#i&er$ of the thin(, ownership passes re(ard#ess of whether or not the '+$er has paid. CS = condition>s are i posed '$ the se##er 'efore ownership wi## pass. "or a##$, the condition is the f+## pa$ ent of the price. )n -*, ownership a+to atica##$ passes to the '+$er fro the o ent the condition happens. 0here is no need for another contract to 'e entered into. B!: "eceipt was issued by A to B. #he receipt$s tenor %&ate of the receipt ''' "eceived from B the sum of ()*,+++.++ as partial payment for the car ''' the balance to be paid at the end of the month ''',. -ontract to .ell? *A! "o. )t does not pertain to a -0* 'eca+se in a -0* ownership is reser&ed '$ the se##er despite de#i&er$ to the '+$er. 0he '+$er does not ac1+ire ownership. 0his is an A'so#+te *a#e. Q: In a -#., upon the happening of the condition/s imposed by the seller, would ownership automatically pass to buyer? A! "o. <hi#e a -0* is considered a specia# 2ind of conditiona# sa#e, it is a pec+#iar 2ind of sa#e 'eca+se despite the happenin( of the condition and act+a# de#i&er$, the '+$er does not a+to atica##$ ac1+ire ownership. )n -0*, if condition>s happen, the ri(ht of the '+$er is to co pe# the se##er to exec+te a fina# deed of sa#e. *o ownership does not a+to atica##$ pass. .ation in %a1ment (.2%) +s. COS .2% (1$!#) , where'$ propert$ is a#ienated to the creditor. )t is pro&ided that the #aw on sa#es sha## (o&ern s+ch transaction. )t is specifica##$ pro&ided that the pre=existin( o'#i(ation +st 'e in one$. )f not in one$ and there is 4)8, it wi## not 'e (o&erned '$ the #aw on sa#es '+t '$ the #aw on no&ation 'eca+se practica##$ there is a chan(e in the o'/ect of the contract. Example 1: )f A owes 5 8100,000.00 instead of pa$in( 8100,000, he offers 5 and 5 accepts the car of A as an e1+i&a#ent perfor ance 3 this is 4)8 and wi## 'e (o&erned '$ the #aw on sa#es. Example 2: )f the pre=existin( o'#i(ation is to de#i&er a specific horse '+t instead of de#i&erin( the horse, the de'tor to#d his creditor and the creditor accepted, that he wi## instead de#i&er his car 3 it is sti## 4)8 '+t it wi## not fa## on 1245 '+t on no&ation 'eca+se there is a chan(e in the o'/ect of the o'#i(ation which wo+#d extin(+ish the o'#i(ation. Note: A (+ide to distin(+ish one concept fro nat+re, re1+isites and effects. 1. As to Nat re .2% , a specia# for of pa$ ent COS = it is a contract $. As to Re3 isites .2% , with a pre=existin( o'#i(ation COS , not a re1+ire ent '. As to 4ffect .2% , to extin(+ish the o'#i(ation either who##$ or partia##$. COS , o'#i(ation wi## arise instead of 'ein( extin(+ished. Contract for a %iece of 5or6 (C%5) +s. COS B!: A team if bas0etball players went to a store to buy shoes and out of the 1+ members, * of them were able to choose the shoes. #hey agreed to pay the price upon delivery. #he other 2 members were able to choose but the shoes were not available at that time but they are normally manufactured. #he last member could not find shoes that could fit his 13 inches feet and therefore he has to order for such 0ind of shoes. hat transactions were entered into by these players? *A! 1467 3 the first 2 transactions in&o#&in( a tota# of 9 p#a$ers wo+#d 'e considered a -.* 'eca+se the shoes which the$ ordered are 'ein( an+fact+red or proc+red in the ordinar$ co+rse of '+siness for the (enera# ar2et. ?owe&er, the #ast transaction which wi## 'e an+fact+red on#$ 'eca+se of the specia# order of the p#a$er and is not ordinari#$ an+fact+red for the (enera# ar2et wi## 'e considered a -8< which is 2nown as the 9assach+setts r+#e. another is to 2now the
Examples: :nder the *tat+te of ;ra+ds, $o+ ha&e to deter ine if the o'/ect if o&a'#e or i o&a'#e in order that stat+te of fra+ds wi## app#$. 0he Recto #aw wi## app#$ if the o'/ect is o&a'#e. 0he 9aceda #aw wi## app#$ if the o'/ect is rea#t$. Artic#e 1544 or 4o+'#e *a#e wi## re1+ire $o+ to deter ine the nat+re of the s+'/ect atter. $. As to Nat re a. 0hin( '. Ri(ht Q: hy there is a need to determine? A! Re#e&ant in the ode of de#i&er$ .istinctions 1. 4eed of A'so#+te *a#e 64A*7 &s. -onditiona# *a#e 6-*7 &s. -ontract to *e## 6-0*7
;a$e 9arie -. 9artine@ , -hato -a'i(as , Aessica A. Lope@ , 4ian Rosapapan "o&e 'er 2008
9assach+setts r+#e , r+#e in deter inin( whether the contract is a -.* or a -8<. (arter +s. COS Q: A obliged himself to deliver a determinate car with a mar0et value of (4*+,+++.++. B obliged himself to deliver his watch and (1*+,+++.++ in cash. hat 0ind of contract? A! ;irst, $o+ ha&e to consider the intention of the parties. 0he$ a$ want this transaction to 'e considered as a sa#e or 'arter and that wi## pre&ai#. 5+t if the intention of the parties is not c#ear fro their a(ree ent then the nat+re of the contract wi## depend on the &a#+e of the watch. )f the &a#+e of the watch is (reater than 8150,000 then this is 'arter. )f the &a#+e of the watch is e1+a# or #ess than 8150,000 then this is sa#e. 0he &a#+e of the car is irre#e&ant. <hat is on#$ re#e&ant is the &a#+e of the thin( 6watch7 in re#ation to the cash to 'e (i&en '$ one of the parties. A7enc1 to Sell (A0S) +s. COS B!: A gave B the e'clusive right to sell his maong pants 5he has his own brand of maong pants6 in Isabela. It was stipulated in the contract that B has to pay the price of maong within 7+ days from delivery to B. It was stipulated that B will receive 4+8 commission 5discount6 on sale. #he maong pants were delivered to B. 9owever, before B could sell the goods, the store was burned without fault of anyone. -an B be compelled to pay the price? ;ro the wordin(s of the pro'#e $o+ a$ ha&e an idea that this is an a(enc$ to se##. )f this is an A0*, the fact that the a(ent has not $et so#d the aon( pants when the$ were '+rned wi## not res+#t in a #ia'i#it$ on his part, there 'ein( no ne(#i(ence on his part 'eca+se with the de#i&er$ of the thin( fro the principa# to the a(ent, ownership does not pass. :nder the princip#e in the -i&i# -ode , res perit do ino , it wi## 'e the se##er 6owner7 who wi## 'ear the #oss. 5+t if this transaction is sa#e then with the de#i&er$ of the aon( pants to 5, ownership passed to 5 'eca+se he did not reser&e ownership o&er the pants despite the fact that the other part$ has not paid the price. *o when the pants were '+rned, it wo+#d now 'e 5 as the owner who wi## 'ear the #oss. *A! 0his is exact#$ the case of 8 iro7a +s. %arsons. Artic#e 1466 , in constr+in( a contract containin( pro&isions characteristics of 'oth a -.* and A0*, $o+ ha&e to (o into the essentia# c#a+ses of the who#e instr+ ent. )n this pro'#e , one of the c#a+ses B5 has to pa$ the price within 30 da$sC. 0hat wo+#d a2e the contract -.* and not A0* 'eca+se in 30 da$s fro de#i&er$, whether or not 5 has a#read$ so#d those pants to other persons, he is a#read$ o'#i(ed to pa$ a price. 0hat is not an A0*. 5ein( a -.*, therefore, after ha&in( 'een de#i&ered, ownership passed to the '+$er and hence +nder res perit do ino r+#e, the '+$er 'ears the #oss and therefore he can 'e co pe##ed to pa$ the price. 4ssential 4lements of a Contract of Sale 1. Consent of the Contractin7 %arties $. Ob-ect or S b-ect Matter , which is a deter inate thin( or ri(ht Note: *er&ice cannot 'e the s+'/ect atter of sa#e. '. Ca se or Consi/eration , as far as se##er is concerned, it is the price in one$ or the e1+i&a#ent of the pa$ ent of the price. CONS4N0 O9 0:4 CON0RAC02N; %AR024S A. No consent of one or both of the &arties 3 the contract is &oid. :nder the #aw on sa#es, it is a fictitio+s contract where the si(nat+re of one of the parties was for(ed. "or a##$, the se##erDs si(nat+re is for(ed. )f the si(nat+re of the se##er is for(ed, that wo+#d 'e a fictitio+s contract. 0he a##e(ed se##er wi## not ha&e participation in the exec+tion of the contract. 5+t another 2ind of contract reco(ni@ed in the -i&i# -ode is a si +#ated contract. *i +#ated , parties to this contract act+a##$ wo+#d ha&e participation. 0he$ wo+#d &o#+ntari#$ si(n in the deed of sa#e. ?owe&er, the$ do not intend to 'e 'o+nd at a## or the$ a$ intend to 'e 'o+nd to another contract '+t the$ exec+ted a deed of sa#e. 0h+s, the #aw wo+#d ratif$ these contracts considerin( there is a si +#ated sa#e. <in/s of Sim late/ Contracts 1. A'so#+te#$ *i +#ated , the$ do not intend to 'e 'o+nd at a##. Q: hy would they enter into this 0ind of sale? A! 0o defra+d creditors 2. Re#ati&e#$ *i +#ated , sa#e where the$ act+a##$ intended another contract which nor a##$ wo+#d 'e a donation. (. 2f consent was 7i+en
3 )f consent was (i&en, it does not necessari#$ ean that the -.* is &a#id. 0he consent a$ 'e (i&en '$ an incapacitated person or one with capacit$ to (i&e consent. )f (i&en '$ an incapacitated person, consider the nat+re of the incapacit$. )t a$ 'e! a. A'so#+te )ncapacit$ , the part$ cannot (i&e consent to an$ and a## contracts. '. Re#ati&e )ncapacit$ , the part$ is prohi'ited fro enterin( so eti es with specific persons and so eti es o&er specific thin(s. <in/ of Ca&acit1 1. A+ridica# -apacit$ , it is the fitness to 'e the s+'/ect of #e(a# re#ations. )f a part$ to a sa#e has no /+ridica# capacit$, the contract is &oid. "ote that a## nat+ra# #i&in( persons ha&e /+ridica# capacit$. %&en if he is a 1 da$ o#d 'a'$, he has /+ridica# capacit$. 0he 'a'$ can 'e the s+'/ect of donation. %&en if he is concei&ed, he has pro&isiona# persona#it$. Example: .ne exa p#e of a part$ to a sa#e witho+t /+ridica# capacit$ wo+#d 'e a corporation not re(istered with the *%-. 0he contract entered '$ this corporation is a &oid contract 'eca+se one of the parties has no /+ridica# capacit$ to enter into that contract. 2. -apacit$ to Act , it is the power to do acts with #e(a# effects. )f the incapacit$ on#$ pertains to capacit$ to act, the contract wo+#d nor a##$ 'e &oida'#e. <itho+t capacit$ to act or there are restrictions with oneDs capacit$ to act s+ch as inorit$, insanit$, deaf +te and does not 2now how to write and ci&i# interdiction. Note: :nder R.A. 6809 64ece 'er 19897 there is no ore creat+re 2nown as B+ne ancipated inorC. 5efore 1989, the a(e of a/orit$ was 21. C. 2f both &arties are inca&acitate/ 3 not on#$ &oida'#e '+t +nenforcea'#e. Q: hat if one of the parties in a -:. is a minor and the minor actively misrepresented as to his age? A! 0he *- said that the inor wi## 'e 'o+nd to s+ch contract +nder the princip#e of estoppe#. Att1. =ribe>s Comment: %stoppe# is not a (ood (ro+nd 'eca+se the is not aware. inor
Sale of Necessaries )n sa#e of necessaries s+ch as food, c#othin( and edicine to a inor, the inor has to pa$ a reasona'#e price. 0his contract is not &oida'#e. 0he sa#e of necessaries wi## 'ind the inor and he wi## 'e co pe##ed to pa$ not rea##$ the contract price '+t on#$ to reasona'#e price. Relati+e 2nca&acit1 (Articles 1!?* an/ 1!?1) 1. *a#e 'etween spo+ses , it is &oid except! a. 0he spo+ses exec+ted a arria(e sett#e ent and in the arria(e sett#e ent the$ a(reed for a co p#ete separation of propert$ re(i e. 0hen the$ can se## to each other. '. )f no arria(e sett#e ent, the$ a$ ha&e o'tained /+dicia# dec#aration of separation of propert$. After that, the$ can se## to each other. 2. 0hose entioned in Artic#e 1491 a. A (+ardian cannot '+$ the propert$ of the ward. 0he (+ardian is not act+a##$ prohi'ited fro enterin( into an$ and a## contracts. )t is /+st that he cannot 'e the '+$er of a propert$ of his ward. '. An a(ent cannot '+$ witho+t the consent of the principa# a propert$ which he was s+pposed to se## or ad inister. c. 0he exec+tors and ad inistrators of the estate cannot '+$ a propert$ which is part of the estate. d. 8+'#ic officers, /+d(es, their staff, c#er2 of co+rt, steno(raphers and #aw$ers are prohi'ited fro '+$in( those properties which are the s+'/ect of #iti(ation d+rin( the pendenc$ of the case. Q: A! hat is the status of the contracts under 12;1? 8rof. 0o#entino , &oida'#e A+stice Eit+( F 8rof. 5a&iera , &oid 8rof. 8ineda F 8rof. de Leon , the first 3 are &oida'#e and the #ast 3 are &oid. 0he 'etter answer is &oid 'eca+se these persons are prohi'ited fro enterin( into these contracts. :nder Artic#e 1409, if the contract is prohi'ited, it is &oid. 3. A#iens are prohi'ited fro ac1+irin( '$ p+rchase pri&ate #ands , 0a2e note Bac1+irin(C which eans '+$in( not se##in(. 0he$ can se##.
%xceptions > when a#iens can '+$! a. ;or er nat+ra# 'orn ;i#ipino citi@en. :nder the -onstit+tion the$ are a##owed to '+$ s a## #and which the$ can +se for residentia# p+rpose. '. Another wa$ of ac1+irin( is '$ s+ccession '+t this is not a sa#e .. 4+en if consent was 7i+en b1 one with ca&acit1 to 7i+e consent b t if the consent is +itiate/ 3 &oida'#e. ;)E:9 4. 2f the &art1 7a+e s ch consent in the name of another witho t a thorit1 of that &erson or no a thorit1 of law 3 +nenforcea'#e. 0a2e note a$ 'e a+thori@ed '$ the person or '$ #aw. Example of authorized by law: notar$ p+'#ic has the ri(ht to se## in p#ed(e 'eca+se he has the a+thorit$ to se## +nder the #aw. O(@4C0 OR S=(@4C0 MA004R 0he re1+isites in sa#e as to thin( wo+#d a# ost 'e the sa e as the re1+isites of contracts in (enera#. 1. 0he thin( +st 'e within the co erce of en Examples: sa#e of a na&i(a'#e ri&er is &oid, sa#e of a cada&er is &oid '+t donation of a cada&er is a##owed, sa#e of h+ an or(ans is &oid, thin(s which are not appropriated #i2e air is &oid '+t if appropriated it can 'e the o'/ect of a &a#id sa#e. 2. 0he thin( +st 'e #icit , not contrar$ to #aw Examples: sa#e of prohi'ited dr+(s or sha'+ is &oid, sa#e of &oid, sa#e of wi#d f#owers or wi#d ani a#s is &oid 3. 9+st 'e deter inate Read Artic#e 1460 R=L4S AS 0O O(@4C0 O9 COS Q: A obliged himself to deliver and transfer ownership over the palay that will be harvested from a specific parcel of rice land in <ay 4++=. hat if by <ay 4++=, no palay was harvested? a. hat is the status of the sale? b. <ay the seller %A, be held liable for damages for failure to comply with his obligation? A! a. A#wa$s consider that in a -.* there are on#$ 3 re1+isites. As #on( as these 3 were co p#ied, there is a &a#id sa#e. )n fact, '$ express pro&ision of #aw, sa#e of thin(s ha&in( potentia# existence 6e ptio rei sperati7 is &a#id. '. "ot necessari#$ 'eca+se there are exc+ses to non=perfor ance s+ch as pesti#ence, t$phoon, f#ood and therefore his fai#+re to co p#$ is an exc+se. 5+t if the reason of the se##er is 'eca+se of his ne(#i(ence, he cannot find s+pport +nder Art. 1174. Sale of :o&e (4m&tio S&ei) Example: *a#e of a #otto tic2et Q: .ale of a land to B with a right to repurchase within 1 year which A delivered. :n the 7rd month, B sold the land to -. 9owever, on the ; th month, A offered to repurchase the land. 5a6 hat is the status of the sale between A and -? 5b6 ho will have a better right over the land? 5.ale with a right to repurchase6 A! 6a7 5e (+ided '$ the fact that a -.* is a consens+a# contract. 0he ere eetin( of the inds as to the o'/ect and the price, then there is a &a#id and perfected sa#e. ?ence, this is a &a#id sa#e e&en if the o'/ect of the sa#e is a sa#e with a ri(ht to rep+rchase. Artic#e 1465 pro&ides that thin(s s+'/ect to a reso#+tor$ condition a$ 'e the o'/ect of a -.*. Att1. =ribe: 9as ta an( sa'ihin , since the ownership thereof is s+'/ect to a reso#+tor$ condition. ?indi na an $+n( thin( is the s+'/ect of reso#+tor$ condition, it is the ownership o&er the thin(. )f A exercises the ri(ht to rep+rchase and s+ch wo+#d 'e a &a#id exercise of s+ch ri(ht then the ownership of 5 wo+#d 'e extin(+ished. 0he exercise of the ri(ht is considered a reso#+tor$ condition as to the ownership of 5. 0he fact that the o'/ect of the sa#e is s+'/ect to a rep+rchase wi## not affect the &a#idit$ of the sa#e. 6'7 As a r+#e, it wo+#d 'e A as a se##er a retro 'eca+se he has the ri(ht to rep+rchase ass+ in( his rep+rchase is &a#id. - a$ ha&e a 'etter ri(ht if he can c#ai that he is an innocent p+rchaser for &a#+e. Example: a$'e the ri(ht to rep+rchase was not annotated at the 'ac2 of the tit#e of the #and and he has no act+a# 2now#ed(e. )f that is the case, - a$ ha&e a 'etter ri(ht. SAL4 O9 R2;:0 / ASS2;NM4N0 O9 R2;:0 ari/+ana is
Assi(n ent of ri(ht is not necessari#$ a sa#e. )f there is a &a#+a'#e consideration for the assi(n ent, it is a sa#e. )f there is no &a#+a'#e consideration, it a$ 'e a donation or dacion en pa(o. Examples of right: credit, shares of stoc2 Re3 isite of a ri7ht 3 the on#$ re1+ire ent is that the ri(ht +st not 'e intrans issi'#e ;.R.: As a r+#e, ri(hts and o'#i(ations arisin( fro contracts are trans issi'#e. 4Ace&tions: 1. 2ntransmissible b1 Nat re $. 2ntransmissible beca se of Sti& lation '. 2ntransmissible beca se of Law CA=S4 OR %R2C4 C4R0A2N 2N MON4B OR 20S 48=2CAL4N0 Q: A deed of sale was entered into by A and B. #he price agreed upon was 1< yen. 5a6 <ay that be a valid sale? 5b6 -an the seller compel the buyer to pay in yen? A! 6a7 Ges, it is &a#id. 5asis is Artic#e 1458 'eca+se the on#$ re1+ire ent of the #aw is Bin one$C. %&en Aapanese $en is in one$. 0he #aw states that it a$ not e&en 'e in one$, it a$ 'e Be1+i&a#entC #i2e pro issor$ notes whether or not ne(otia'#e or #etters of credit. 6'7 )f the contract was entered into toda$, $es it is &a#id 'eca+se of R.A. 8183 which repea#ed R.A. 529 in 1996. )f -.* was entered 'efore R.A. 8183, the se##er cannot co pe# e&en tho+(h the contract is &a#id. 0he pa$ ent has to 'e ade in 8hi#ippine one$. -onsider the date of the sa#e. )f parties fai#ed to stip+#ate as to which c+rrenc$, it has to 'e in 8hi#ippine c+rrenc$. %rice M st be Certain Q: ho can fi' the price? A! 617 0he 'est wa$ is for the parties to a(ree as to the price. 627 0he$ a(ree that one of the wi## fix the price. a$
Q: <ay the sale be perfected if the agreement of the parties was for one of them to fi' the price? A! Ges, it a$ 'e perfected on#$ if the price fixed '$ the part$ who was as2ed to fix the price was accepted '$ the other part$. )f not accepted, there was no eetin( of the inds. Note: 0he perfection wi## on#$ 'e considered at the ti e of the acceptance of the price fixed '$ the other part$ not fro the ti e of the first a(ree ent of the parties. Q: hat if a 7rd person was as0ed to fi' the price > A and B agreed that ? will fi' the price, may the sale be void? A! Ges, the sa#e a$ 'e &oid if the third person does not want to fix the price or +na'#e to fix the price. ?ence, there was no eetin( of the inds. Q: If the 7rd person fi'ed the price but it was too high or too low or maybe there was fraud committed by the 7 rd person or he was in connivance with one of the parties, may the sale be void? A! "o, 'eca+se the re ed$ of the other part$ is to (o to co+rt for the co+rt to fix the price. Note: Lesion or (ross inade1+ac$ of the price does not as a r+#e in&a#idate a contract +n#ess otherwise specified '$ #aw. %xception! when otherwise pro&ided '$ #aw. Example: Artic#e 1381. Note: :nder the #aw on sa#es, if there is (ross inade1+ac$, it a$ ref#ect &itiation of consent so the *- wo+#d nor a##$ en/oin the #ower co+rts to 'e warned of the possi'i#it$ of fra+d in case of #esion. Lesion +st 'e pro&en as a fact. )t is not pres+ ed. )f there is (ross inade1+ac$, it a$'e 'eca+se act+a##$ the$ intended another contract and that wo+#d a2e the sa#e a si +#ated sa#e and therefore the sa#e is &oid. Example! 0he &a#+e of the propert$ is 819 '+t on#$ 810,000 was written in the contract 'eca+se the$ intended it to 'e a donation 3 &oid. 02M4 O9 0:4 %4R94C02ON O9 0:4 CON0RAC0 A ction Sale A+ction sa#e is perfected +pon the fa## of the ha er or an$ other c+sto ar$ anner. 0h+s, 'efore the fa## of the ha er in an a+ction sa#e,
the 'idder e&en if he has a#read$ ade a 'id, he can sti## withdraw the 'id as #on( as he wo+#d do that 'efore the fa## of the ha er. .therwise, 6if after the fa## of the ha er7, there is a#read$ a perfected sa#e. Q: -an the auctioneer withdraw the goods before the fall of the hammer? A! As a r+#e, $es 'eca+se the sa#e has not 'een perfected at the o ent +n#ess the 'iddin( or a+ction has 'een anno+nced to 'e witho+t reser&e. Note: 5efore perfection, there is one contract which a$'e perfected. 5efore perfection eanin( in the ne(otiation sta(e 3 this contract is 2nown as the option contract. O&tion Contract .anche@ vs. "igos ;acts! 9rs. Ri(os offered to se## her #and to *anche@ for a certain price. Ri(os (a&e *anche@ 2 $ears within which to decide. 6 Note: 0he optionee or pro isee or offeree is not 'o+nd to p+rchase '+t he has the option to '+$ or p+rchase7. )n this case, *anche@ has the option. 5efore the #apse of 2 $ears, *anche@ to#d Ri(os that he is '+$in( and offered the price a(reed +pon '+t Ri(os ref+sed c#ai in( that she was not 'o+nd '$ the written option a(ree ent 'eca+se no option one$ 6consideration7 was (i&en '$ *anche@. Accordin( to Ri(os, the option contract is &oid. ?e#d! *ince *anche@ accepted the offer and decided to '+$ within the period 'efore the offer was withdrawn, a perfected -.* was created e&en witho+t option one$. )n this case, there was no option contract 'eca+se it was ere#$ an option a(ree ent. 0herefore, there was ere#$ an offer on the part of Ri(os and once the offer was accepted 'efore it was withdrawn, re(ard#ess of whether option one$ was (i&en and in this case no option one$ was (i&en, a perfected -.* was created. Note: )'a pa( a$ option one$ Q: 4 years within which to decide > assuming there was option money, before the offeree could decide to buy, the offeror withdraw on the 3th month. 5a6 -an the offeree on the 1+ th month say %I would li0e to buy,? 5b6 -an the buyer compel the seller to sell? A! 6a7 "o. 6'7 "o, an action for specific perfor ance wi## not prosper 'eca+se when he said he wi## '+t there was not ore offer to 'e considered. "a=withdraw na eh. Q: If the offeree files an action for damages, may that action prosper there being option money given? A! Ges, 'eca+se with the option one$, an option contract is perfected, the offeror is 'o+nd to (i&e the offeree, 2 $ears within which to decide and fai#+re to that he is #ia'#e not 'ased on perfected -.* '+t on perfected contract of option. O&tion Mone1 (OM) +s. 4arnest Mone1 (4M) .9 is not part of the price whi#e %9 is part of the price and at the sa e ti e, it is a proof of the perfection of the contract. ;.R.: A -.* a$ 'e in an$ for . Artic#e 1483 pro&ides that a -.* a$ 'e in writin(, part#$ in writin( xxx. 0his pro&ision is exact#$ the sa e as Artic#e 1356 in contracts which pro&ides that contracts a$ 'e o'#i(ator$ in whate&er for the$ a$ ha&e 'een entered into pro&ided a## the essentia# re1+isites are present. 5+t then a(ain e&en Artic#e 1356 /+st #i2e Artic#e 1475 wo+#d pro&ide for exceptions. 4Ace&tions: 0he #aw a$ re1+ire a partic+#ar for for its &a#idit$. 0he -att#e Re(istration 4ecree is an exa p#e = where the #aw itse#f pro&ides for a partic+#ar for for the &a#idit$ of the sa#e. 5+t the #aw a$ re1+ire partic+#ar for for its enforcea'i#it$ of the sa#e and that wo+#d 'e 1403 or the stat+te of fra+ds. -oncrete#$, the sa#e of a parce# of #and if not in writin( is &a#id '+t +nenforcea'#e. )t is not &oid. "ote that the price of the #and is irre#e&ant if i o&a'#e. Example: 5efore, the sa#e of a #and for 8300 is &a#id and enforcea'#e e&en if not in writin(. 5+t present#$, it has to 'e in writin( to 'e enforcea'#e. 0he price is sti## irre#e&ant. )f the o'/ect of the sa#e is o&a'#e, $o+ ha&e to consider not the &a#+e of the thin( '+t the price a(reed +pon. 0he &a#+e a$ 'e different fro the price. Go+ can se## a thin( worth 81,000 for 8400 '+t the #aw pro&ides for the price. )f the price is at #east 8500 and the sa#e is not in writin(, it wi## 'e +nenforcea'#e. (aredes vs. !spino
;acts! 8aredes was a prospecti&e '+$er. %spino owns a #and in 8a#awan. 8aredes is fro "orthern L+@on. 0heir ne(otiation was thr+ #etters and te#e(ra s. %spino sent a #etter to 8aredes statin( that he and his wife a(reed to se## the #and to 8aredes, that the deed of sa#e wi## 'e exec+ted +pon the arri&a# of 8aredes in 8a#awan. <hen 8aredes arri&ed, %spino said he is no #on(er interested in se##in(. 8aredes fi#ed a case to co pe# %spino to se## the #and. %spino contended that the contract is +nenforcea'#e 'eca+se it is not in writin(. ?e contended that +nder the stat+te of fra+ds it is +nenforcea'#e. ?is contention was s+stained '$ the tria# co+rt. ?e#d! 0his contract is no #on(er co&ered '$ the stat+te of fra+ds 'eca+se there was a #etter. Artic#e 1403 pro&ides that a note or e orand+ si(ned '$ the part char(ed wo+#d 'e s+fficient to ta2e that contract o+t of the operation of the stat+te of fra+ds. )n this case, the defendant wrote a #etter with his si(nat+re on it. 0he #etter too2 that contract o+t of the operation of the stat+te of fra+ds and therefore he a$ 'e co pe##ed to exec+te the fina# deed of sa#e. R2;:0S AN. O(L2;A02ONS O9 0:4 C4N.OR )n a deed of sa#e 64.*7, there can 'e h+ndreds of o'#i(ations of the &endor '+t those o'#i(ations wo+#d 'e 'eca+se of the stip+#ation. 5+t there are on#$ few o'#i(ations i posed '$ #aw. 0he 3 ost i portant! 1. 0o transfer ownership 2. 0o de#i&er 3. 0o warrant the thin( 0here are other o'#i(ations! 4. .'#i(ation to ta2e care of the thin( so#d with the di#i(ence of a (ood father of a fa i#$ prior to de#i&er$. 5. ;ro the ti e of the perfection +p to the ti e of de#i&er$ then there wo+#d 'e o'#i(ation to pa$ for the expenses for the exec+tion and re(istration of the sa#e and o'#i(ation to pa$ the capita# (ains tax wo+#d 'e on the se##er as a r+#e. 6. .'#i(ation to de#i&er the fr+its which is re#ated to the o'#i(ation to de#i&er the thin( O(L2;A02ON 0O .4L2C4R 0:4 9R=20S B!: A sold a mango plantation to B but they stipulated that delivery will be after the signing of the deed of sale. After the e'piration of the 3Amonth period, B demanded for the delivery. #he vendor was able to deliver 1 month after the date when he was supposed to deliver the mango plantation. &uring this period, the vendor harvested mango fruits and sold them to ?. #he vendor was able to deliver only after the other fruits were harvested and sold to B. -an B recover the mango fruits from B during the 3th month period? *A! 4eter ine first whether 5 is entit#ed to the fr+its 'eca+se if he is not entit#ed, then he cannot reco&er the fr+its. )s he entit#ed to the fr+its after 6= onth period d+rin( the 1= onth period prior to de#i&er$H Ges, in fact, +nder 1537, the fr+its of the thin( so#d fro the ti e of perfection sha## pertain to the '+$er. O(L2;A02ON 0O 0A<4 CAR4 O9 0:4 0:2N; ;.R.: 0he thin( so#d sho+#d 'e deter inate 'eca+se if (eneric 61460, 2nd para(raph7 then there is nothin( to 'e ta2en cared of. )t wi## 'eco e deter inate on#$ +pon de#i&er$. 4Ace&tions: 0here are sa#es transactions wherein the &endor wo+#d not ha&e this o'#i(ation! a. -onstr+cti&e de#i&er$ = 're&i an+ , 0here wo+#d 'e no o'#i(ation on the part of the se##er to ta2e care of the thin( fro the ti e of perfection 'eca+se at the ti e of perfection, the '+$er was a#read$ in possession of the thin(. 9a$'e he 'orrowed the thin(. Example: he 'orrowed the car and he decided to '+$ it , the thin( was a#read$ in his possession. O(L2;A02ON 0O %AB 4D%4NS4S / 0AD4S 0hese o'#i(ations a$ 'e the s+'/ect of stip+#ation. 5$ a(ree ent, it wo+#d 'e the '+$er who wi## pa$ xxx "or a##$, dito hindi nat+t+#o$ an( sa#e dahi# hindi a(2as+ndo 2+n( sino a('a'a$ad n( tax. O(L2;A02ON 0O 0RANS94R O5N4RS:2% B!: <ay a person sell something which does not belong to him? ould the sale be valid? ould the buyer acCuire ownership over the thing sold, if seller does not own the thing? *A! Ges. .wnership o&er the thin( so#d is not an essentia# re1+isite for the sa#e to 'e &a#id. 5+t if the se##er does not own the thin(, he a$ ha&e a pro'#e on his o'#i(ation to transfer ownership. 0he pro'#e wo+#d 'e whether or not the '+$er wo+#d ac1+ire ownership o&er the thin( so#d if the person who so#d the thin( is not the owner.
Q: ho would have the right to sell and therefore they can transfer ownership by way of sale? A! ;irst, is the owner. %&en if he is not the owner, he a$ ha&e the ri(ht to se## 'eca+se! 617 ?e was (i&en the a+thorit$ '$ the owner. Example: A(ent 627 ?e a$ 'e the owner '+t he a$ ha&e the a+thorit$ of the #aw to se##, 2nown as B*tat+tor$ 8ower to *e##C 6Artic#e 15057. Examples: "otar$ p+'#ic in p#ed(e, #i1+idators, (+ardians and recei&ers. 637 0hose who ha&e the a+thorit$ of the co+rt. Example: *heriff. Note: it is as if the$ ha&e the a+thorit$ of #aw 'eca+se not e&en the /+d(e can &a#id#$ se## so ethin( if it is not consistent with the #aw. Q: <ay a buyer acCuire ownership over the thing sold if the seller has no right to sell? A! 0he answer '$ wa$ of exception is $es. 5+t the 7eneral r le here is +nder 1505 , the '+$er ac1+ires no 'etter tit#e than what the se##er had. )f the se##er is neither the owner nor does he ha&e the a+thorit$ to se##, the '+$er ac1+ires no 'etter tit#e than what the se##er had. )f his ri(ht is on#$ as a #essee that is the ost that can 'e transferred to the '+$er. )f he has no tit#e then no tit#e can 'e transferred to the '+$er. 4Ace&tions: 6<hen the '+$er can ac1+ire a 'etter tit#e than what the se##er had. %&en if the se##er does not ha&e the ri(ht to se##, the '+$er a$ ac1+ire ownership o&er the thin( so#d 'eca+se the #aw so pro&ides and not 'eca+se the se##er was a'#e to transfer ownership to the '+$er.7 1. 5$ %stoppe# 2. %stoppe# '$ 4eed 3. %stoppe# '$ Record 4. *a#e '$ an Apparent .wner 5. "e(otia'#e 4oc+ ent of 0it#e 6. 8+rchases fro a 9erchantDs *tore xxx 1. (1 4sto&&el , '$ the princip#e of estoppe#, a person is prec#+ded fro den$in( that another person has a+thorit$ to se## 'eca+se of his acts. A#so 2nown as B%stoppe# in 8aisC which is a 2ind of e1+ita'#e estoppe# 'eca+se of the acts > representation of the owner, he a$ not #ater on den$ the a+thorit$ of the 3rd person. $. 4sto&&el b1 .ee/ B!: A and B coAowners of land sold 5sale is verbal6 to ? their land. ? subseCuently sold the land to B. ould B be considered to have acCuired ownership over the land? *A! :nder 1434 which is considered as B%stoppe# '$ 4eedC 6technica# estoppe#7 , when the se##er who was not the ownerat the ti e of the sa#e, ac1+ires ownership, a+to atica##$, ownership passes to the '+$er '$ operation of #aw. ?owe&er, Artic#e 1434 re1+ires de#i&er$ to the '+$er. And +nder the facts, 1434 wo+#d not app#$ 'eca+se! a7 0here was no showin( there was pa$ ent '7 "o showin( that there was de#i&er$ of the #and to I. )t cannot 'e said that '$ operation of #aw, G #i2ewise ac1+ired ownership '$ wa$ of estoppe# '$ deed. '. 4sto&&el b1 Recor/ Durisprudence: *a#e '$ nephew of the owner of the #and. *ince the nephew co+#d not de#i&er the #and, the '+$er s+ed the nephew for estafa. ;or the acc+sed to 'e ac1+itted, he as2ed his +nc#e to testif$ that he act+a##$ had the a+thorit$ to se##. <hen the +nc#e testified in co+rt, the nephew is ac1+itted. After ac1+itta#, the '+$er de anded fro the +nc#e the de#i&er$ of the #and. 0he +nc#e ref+sed, c#ai in( that Bsa totoo #and, ) did not a+thori@ed $ nephewC. Q: -ase was filed against the uncle, would that action prosper? A! *- said $es 'eca+se he cannot 'e a##owed now to c#ai that his nephew was not a+thori@e to se## after he testified in co+rt that he (a&e s+ch a+thorit$. 0his is estoppe# '$ record which is considered a technica# estoppe#. !. Sale b1 an A&&arent Owner A. ;actorDs Act 5. Recordin( Laws -. An$ other pro&ision of #aw ena'#in( the apparent owner of the (oods to dispose of the as if he was rea##$ the owner. A. ;actorDs Act %&en if a(ent has no ri(ht to se##, a third person a$ ac1+ire ownership 'eca+se he a$ re#$ on the power of attorne$ as written. 5. Recordin( Laws J ost co on 1+estion in the 'ar exa
Rea/! <apalo vs. <apalo #. Ne7otiable .oc ment of 0itle )f (oods are co&ered '$ a ne(otia'#e doc+ ent of tit#e and it was thereafter ne(otiated. )f the '+$er 'o+(ht it in (ood faith and for &a#+e, he wi## 'e protected +nder the #aw. ?e wi## ac1+ire ownership e&en if the se##er did not ha&e the ri(ht to se##. Example: 0he se##er a$ ha&e ac1+ired tit#e '$ &io#ence. 5in+('o( n$a $+n( owner n( (oods. 8ero 2+n( ne(otia'#e doc+ ent of tit#e $an and proper#$ ne(otiated, #a#o na 2+n( 'earer doc+ ent of tit#e, then the '+$er a$ ac1+ire ownership e&en if the se##er has no ri(ht to se##. ,. % rchases from a Merchant>s Store / Mar6ets / 9airs .un Brothers vs. Eelasco ;acts! *+n 5rothers was the owner of a refri(erator. *+n 5rothers was en(a(ed in the '+siness of se##in( refri(erator. *+n 5rothers so#d a ref to Lope@ on insta## ent 'asis. As stip+#ated, *+n 5rothers reser&ed ownership +nti# f+## pa$ ent. Lope@ on#$ paid 8300 o+t of 81,500. 0he 'a#ance to 'e paid on insta## ent. Lope@ then so#d the ref to Ee#asco. Q: ould Eelasco acCuire ownership? A! "o 'eca+se Artic#e 1505 pro&ides that the '+$er ac1+ired no 'etter tit#e than what the se##er had. ?owe&er, Ee#asco was the owner of a store. .n the next da$, Ee#asco so#d the ref to Ko Kan( -h+ who paid in f+##. <hen *+n 5rothers #earned this transaction, it fi#ed an action to reco&er the ref fro Ko Kan( -h+. B!: F lost her diamond ring in a holdAup. Gater on, this ring was an obHect of a public sale of one pawnshop. -an F recover the ring from the buyer in that public sale? *A! Ges, Artic#e 559 pro&ides that e&en if the '+$er is in (ood faith so #on( as the owner is wi##in( to rei '+rse the '+$er of the price paid in that sa#e. Note: A(ain in 1505, there is no ri(ht to reco&er as #on( as the '+$er 'o+(ht it in (ood faith fro a erchantDs store, there can 'e no reco&er$ as a atter of ri(ht. Q: 9ow transfer of ownership is effected? A! :nder the #aw, as far as thin(s are concerned, it is effected '$ de#i&er$! 6a7 Act+a# 6'7 -onstr+cti&e 0here can 'e no transfer of ownership witho+t de#i&er$. Notes: 6a7 0here a$ 'e a period a(reed +pon '$ the parties within which the '+$er wo+#d ha&e to decide. %&en if he fai#ed to si(nif$ his acceptance '$ the ere #apse of the period, he is dee ed to ha&e accepted 6i p#ied#$ accepted7 hence, ownership passes to hi . 6'7 %&en 'efore the #apse of the period, he a$ 'e considered to ha&e accepted if he did an act wherein he wo+#d 'e considered to ha&e adopted the transaction then ownership passed to hi . Example: %&en if he has 10 da$s within which to decide '+t on the 2nd da$, he so#d the car to another. .'&io+s#$, he is dee ed to ha&e accepted the thin( 'eca+se he did an act which is inconsistent with the ownership of the se##er #i2e he donated or destro$ed the thin(. 6c7 )f there is no period a(reed +pon, the #aw sa$s if he did not si(nif$ his acceptance he wi## 'e considered to ha&e accepted after the #apse of a reasona'#e ti e. Reasona'#e ti e wi## depend on the circ+ stances of the sa#e, p+rpose of the sa#e, nat+re of the thin( so#d. Example: 8erisha'#e (oods. Sale or Ret rn Q: :wnership passes upon delivery? A! Ges. ?owe&er, the '+$er is (i&en the ri(ht to re&est the tit#e 'ac2 to the se##er nor a##$ within a certain period. Example: -#a+ses in s+'scription a(a@ine which sa$s that $o+ can ret+rn within 30 da$s witho+t pa$ ent. B!: A car was sold for (1*+,+++. ()*,+++ paid upon the e'ecution of &:.. #he balance payable on a monthly basis. ()*,+++ was paid. #he car was delivered to the buyer. 9owever, before he could pay the balance, the car was destroyed due to a fortuitous event or was burned ''' -an he still be compelled to pay the balance? *A! Ges. :pon the de#i&er$ of the car to the '+$er, there 'ein( no retention of ownership '$ the se##er. 6 Note: <a#a sa facts na na=retain n( se##er and ownership7. 0herefore, ownership passed to the '+$er. :nder the princip#e of res perit do ino , Artic#e 1504 , the owner 'ears the #oss and hence it can 'e co pe##ed to pa$ the price. ;.R.: Res perit do ino , 1504.
Note! 4eter ination of when ownership passed is i portant 'eca+se if at the ti e of the #oss, the '+$er is not $et the owner, as a r+#e, the '+$er wi## not 'ear the #oss #i2e in sa#e on appro&a# and he has 10 da$s within which to decide and the thin( was #ost thro+(h a fort+ito+s e&ent within the 10=da$ period witho+t fa+#t on his part, the se##er wi## 'ear the #oss. 4Ace&tions: 1. Rea/ Gawyers$ -ooperative vs. #abora $. .ela1 in the .eli+er1 <hen there is de#a$ in the de#i&er$ d+e to the fa+#t of one of the parties, whoe&er was at fa+#t wi## 'ear the #oss. "ote that either '+$er or se##er a$ 'e at fa+#t. Example 1: 0he '+$er and the se##er a$ ha&e a(reed that the (oods are to 'e o'tained '$ the '+$er at the wareho+se of the se##er on a specific date. .n the date a(reed +pon, the se##er de anded the '+$er to (et the (oods. 4espite s+ch, the '+$er fai#ed to (et the (oods. .n the next da$, the wareho+se was destro$ed d+e to fort+ito+s e&ent. Q: ho is the owner at that time? A! 0he se##er '+t there was de#a$ on the part of the '+$er hence +nder 1504 it is the '+$er who wi## 'ear the #oss. Example 2: 0he se##er hi se#f a$'e the one at fa+#t. 0h+s, he is in de#a$ in de#i&erin( the (oods to the '+$er. Q: hy would this be an e'ception to the res perit domino rule? A! An( pre ise dito, the ownership has a#read$ passed to the '+$er '+t the (oods are sti## with the se##er. -an this happen? Ges, 'eca+se of constr+cti&e de#i&er$. )f there was constr+cti&e de#i&er$, ownership passes to the '+$er '+t ph$sica# possession is sti## with the se##er. 0he$ a$ ha&e a(reed this ti e that the se##er wi## 'e the one to de#i&er the (oods to the '+$er at a certain date. <hen the date arri&ed, despite de and fro the '+$er, there was no de#i&er$ on the part of the se##er. %&en if the (oods are destro$ed the next da$ d+e to fort+ito+s e&ent, ta2e note an( owner a$ an( '+$er na '+t who will bear the loss? 0he se##er 'eca+se he was in de#a$ in de#i&erin( the (oods. .O=(L4 SAL4 (AR02CL4 1#!!) B!: F sold a registered parcel of land to " who did not register the sale. #hereafter, F sold the very same parcel of land to - who registered and obtained a new #-# in his name. ho would have a better right? *A! Att1. =ribe: ) f+##$ a(ree with the :8 Law -enterDs answer. )t depends on whether or not - re(istered the sa#e in (ood faith. Re(istration is on#$ one of the re1+ire ents (ood faith is e1+a##$ an i portant re1+ire ent. Note: )n 1544 6do+'#e sa#e7, as to which r+#e app#ies wi## depend on the thin( so#d if o&a'#e or i o&a'#e. Q: If the thing is sold twice, who would have the better right? A! )f o&a'#e, the '+$er who first too2 possession in (ood faith wi## ha&e the 'etter ri(ht. )f i o&a'#e, the '+$er, who first re(istered in (ood faith, wi## ha&e the 'etter ri(ht. )f there was no re(istration, it wi## 'e the first who too2 possession in (ood faith. )f no possession in (ood faith, the '+$er who has the o#dest tit#e in (ood faith. %&en the 1st '+$er is re1+ired to 'e in (ood faith. .'&io+s#$, the first '+$er wo+#d ha&e the o#dest tit#e. G+n( (ood faith ditto o'&io+s#$ wo+#d not pertain to a'sence of 2now#ed(e of the 2 nd sa#e 2asi s$e pre 1 st '+$er s$a. ?e is nonethe#ess re1+ired to ha&e 'o+(ht the thin( in (ood faith. Lood faith eans that he had no 2now#ed(e of the defect of the tit#e of the se##er. 5arnin7: Please be careful when you recite land! Rea/: Bautista vs. .ioson -arumba vs. -A ;acts! *a#e of #and to 5 who too2 ph$sica# possession '+t did not re(ister. ?e is the first '+$er. ?owe&er, the se##er 6A7 is a /+d( ent de'tor in one case to a certain creditor na ed -. 0he #and 'eca e the s+'/ect of an exec+tion sa#e. 0he '+$er 'eca e - who re(istered the sa#e. Q: ho would have a better right between - and B 5- had no 0nowledge of the sale6? A! *- *aid 3 5 'eca+se this #and was not re(istered +nder the 0orrens *$ste . 1544 wo+#d not app#$ to +nre(istered #ands. O(L2;A02ON 0O .4L2C4R 0:4 O(@4C0 O9 0:4 SAL4 you register the sale not the
4eter ine the s+'/ect atter if it is a thin( or a ri(ht 'eca+se there are different odes of de#i&er$ as to thin( and as to ri(ht. 0hin7s <in/s of /eli+er1 of thin7s as a conse3 ence of sale 6nown as Etra/itionF G n/er the law: 1. Act+a# 4e#i&er$ > 9ateria# 4e#i&er$ > 8h$sica# 4e#i&er$ > Rea# 4e#i&er$ , the thin( is in the possession and contro# of the &endee. 0a2e note Bcontro#C. 0a2e note Bto the &endeeC. Q: hat if the thing was delivered to a 7 rd person? A! A+rispr+dence , *- said 3 $es, there a$'e act+a# de#i&er$ if the third person has a+thorit$ to recei&e fro the &endee. 0h+s, a2in( hi an a(ent of the &endee and that wo+#d sti## 'e act+a# de#i&er$. Note: 8hi#ippine #aw does not on#$ re1+ire act+a# de#i&er$ , constr+cti&e de#i&er$ a$ res+#t in transfer of ownership. 2. -onstr+cti&e , '$ the exec+tion of a p+'#ic instr+ ent if the contrar$ intention does not appear on the doc+ ent. 5$ the ere exec+tion of the p+'#ic instr+ ent that is e1+i&a#ent to de#i&er$. ?ence, ownership passes to the '+$er. Iuen@le J .treiff vs. <ac0e J -handler ;acts! 0he ori(ina# owner here *tan#e$ and Lriffindor 6paran( ?arr$ 8otter 7 and the propert$ in&o#&ed here are fixt+res of a sa#oon. 9ac2e and -hand#er are /+d( ent creditor of *tan#e$ and Lriffindor. 5eca+se of a /+d( ent in fa&or of 9ac2e and -hand#er, the sheriff #e&ied +pon these properties which was sti## in the possession of *tan#e$ and Lriffindor. 0he properties +nder exec+tion were 1+estioned '$ K+en@#e and *treiff. K+en@#e and *treiff c#ai ed that these thin(s were so#d to the prior to the #e&$. )f the$ c#ai ed that the properties were so#d to the , the properties sho+#d 'e in their possession. 0a2e note that *tan#e$ and Lriffindor were sti## in possession of the (oods ph$sica##$. ?ence, there was no act+a# de#i&er$. ?e#d! )n order that ownership wo+#d pass, it has to 'e in a p+'#ic instr+ ent if that wo+#d 'e '$ constr+cti&e de#i&er$. <in/s of Constr cti+e .eli+er1 1. 4e#i&er$ of the Ke$s , of the p#ace where the (oods are #ocated #i2e a wareho+se. 8rof. 4e Leon! this a#so ca##ed as s$ 'o#ic de#i&er$. 2. 5$ 9ere -onsent or A(ree ent of the 8arties , if at the ti e of the sa#e, possession to the (oods cannot 'e transferred to the '+$er. 0here +st 'e a reason wh$ it cannot 'e transferred at the ti e of the sa#e. 0his is a#so 2nown as tradition #on(a an+. Example 1: 0he thin( was the s+'/ect atter of a #ease with a 3 rd person +nti# the expiration of the #ease, the thin( cannot 'e de#i&ered. Example 2: 0he thin( was the s+'/ect atter of co period of co odat+ has to 'e respected. odat+ . As a r+#e,
3. 5re&i 9an+ , this is a 2ind of constr+cti&e de#i&er$ 'eca+se the '+$er was a#read$ in possession of the thin( so#d at the ti e of the perfection of the sa#e so he wi## contin+e to 'e in possession after the sa#e, no #on(er as a #essee '+t this ti e as the owner. *o dati #essee #an( s$a that is wh$ he was in possession or a$'e depositar$ #an( s$a or a$'e he was the a(ent at the ti e prior to the sa#e. 4. -onstit+t+ 8ossessori+ , the se##er wi## contin+e to 'e in the possession of the thin( after the sa#e '+t no #on(er as an owner '+t in another capacit$ #i2e #essee. Bautista vs. .ioson 5eca+se a #ease a(ree ent was entered into '$ the '+$er and se##er after the sa#e then the '+$er 'eca e the #essor and the se##er 'eca e #essee. 0herefore, the #essee wo+#d contin+e with the possession no #on(er as an owner. Ri7hts <in/s of .eli+er1 of 2ncor&oreal %ro&ert1 / 8 asi G 0ra/ition: 1. %xec+tion of 8+'#ic )nstr+ ent 2. 8#acin( the 0it#e of .wnership in the 8ossession of Eendee , a ri(ht wo+#d nor a##$ 'e co&ered '$ a certificate. Example: de#i&er$ of the certificate of shares of stoc2s. 3. :se '$ the Eendee of ?is Ri(hts with the EendorDs -onsent
Example: *a#e of shares of stoc2s 3 the &endee a$ not a#wa$s ha&e the ri(ht to exercise his ri(hts +nder the shares of stoc2s. -oncrete#$, if there is a stoc2ho#dersD eetin(, the 'oo2s of the corporation wi## 'e c#osed for 30 da$s 'efore the eetin(. 0h+s, if the sa#e occ+rred when the 'oo2s are a#read$ c#osed, no one wi## 'e reco(ni@ed except those re(istered owners. *o if $o+ are the '+$er of those stoc2s, $o+ can on#$ +se $o+r ri(ht with the consent of the &endor. R=L4S ON SAL4 AS 0O 8=AN020B / 8=AL20B O9 0:4 0:2N; SOL. Q: In a sale involving 1,+++ pairs of shoes with a specific design as agreed upon. #he seller delivered 1,4++ pairs of shoes instead of only 1,+++. -an the buyer reHect everything? A! "o. ?e has the ri(ht to re/ect on#$ the excess. Re/ect the 200 '+t he can 'e co pe##ed to accept the 1,000. Q: hat if instead of 1,+++, =++ was only delivered? A! 0he '+$er cannot 'e co pe##ed to recei&e 800 'eca+se partia# perfor ance is non=perfor ance. Go+ cannot co pe# the creditor to accept partia# f+#fi## ent as a r+#e 'eca+se it can 'e a s+'/ect of a stip+#ation that there can 'e partia# de#i&er$. Q: #he obligation to deliver 1,+++ cavans of <ilagrosa rice. Instead of delivering 1,+++ cavans of <ilagrosa, the seller delivered 1,1++ cavans of both <ilagrosa and Burmese rice. <ay the buyer reHect everything? A! Ges, if the (oods are indi&isi'#e. 9eanin( each sac2 of rice, 9i#a(rosa and 5+r ese rice were ixed. ?owe&er, if it is c#ear that per sac2 it is 9i#a(rosa rice and the 100 sac2s, it is c#ear that those are 5+r ese rice that wo+#d not 'e considered as indi&isi'#e. ?e can 'e co pe##ed to accept 1,000 sac2s 9i#a(rosa and he has the ri(ht to re/ect 100 sac2s 5+r ese rice. SAL4 O9 R4AL0B Q: .ale of a parcel of land. (rice agreed upon is (1<. <ore or less 1++ sCm. #he actual area delivered by the seller was only ;* sCm. hat are the remedies of the buyer? A! 617 *pecific perfor ance , wo+#d 'e a re ed$ if the se##er is sti## in the position to de#i&er the 'a#ance. *i(+ro $+n( 2ata'in( #+pa sa se##er din, hence, he can afford to (i&e additiona# 5 s1 . 627 Q: If specific performance is not possible, is proportional reduction a remedy? A! )t depends on whether the sa#e is considered as a sa#e with a state ent of an area of a rate of a certain eas+re or if it is a #+ p s+ sa#e. Q: Under the facts, ;* sCm was delivered, would rescission be a remedy? A! As a r+#e no 'eca+se rescission wo+#d on#$ 'e a re ed$ if the area #ac2in( is ore than 10M of that area a(reed +pon. *o 2+n( 100 s1 , dapat 11 s1 or 15 s1 an( 2+#an(, so o+t of 100 2+n( 85 #an( an( na= de#i&er, then rescission is a atter of ri(ht. %LAC4 O9 .4L2C4RB Read 1524, 1525 and 1198 0he se##er de#i&ered the (oods to the p#ace of '+siness of the '+$er. )f the '+$er ref+ses to recei&e the (oods, the '+$er wi## 'e considered in de#a$ and therefore wi## 'e #ia'#e to the se##er 'eca+se of +n/+st ref+sa#. Q: <ay the buyer be considered in delay for his refusal to accept if there is no place stipulated in the contract? A! )t depends on the 2ind of thin(. 4eter ine if it is deter inate or (eneric. )f the thin( is deter inate, the #aw pro&ides that it wi## 'e the p#ace where the thin( is #ocated at the ti e of the perfection of the contract. Q: hat if the obHect of the sale is a generic thing? A! *e##erDs p#ace of '+siness or residence. Note: )f there is no stip+#ation when to 'e de#i&ered, the se##er cannot 'e co pe##ed to de#i&er. Q: hat if at the time of the perfection of sale, though the thing is determinate, it was on board a ship while in transit. here will be the place of delivery? A! 4ependin( on the shippin( arran(e ent a(reed +pon '$ the parties. 9.O.(. , ;ree on 5oard C.2.9. , -ost, )ns+rance, ;rei(ht ;...5. and -.).; are r+#es of pres+ ption which wo+#d ha&e to (i&e wa$ to the rea# intention of the parties. *o after a##, the ;...5. or -.).;. arran(e ents do not rea##$ deter ine the p#ace of de#i&er$, the$ on#$ a2e r+#es of pres+ ption.
*o in a -.).;. arran(e ent, it is on#$ pres+ ed that the p#ace of de#i&er$ is the port of ori(in. )n a ;...5. destination, it is on#$ pres+ ed that the point of destination is the p#ace of de#i&er$. Q: hat really determines the place of delivery? A! .- said this indication as to the intention of the parties as to the p#ace of de#i&er$ is the anner and p#ace of pa$ ent. )f there is an a(ree ent as to where and how the price is to 'e paid that wo+#d 'e the p#ace considered for p+rposes of de#i&er$ and therefore for transfer of ownership. Read 1582 Obli7ations which cannot be 5ai+e/: 1. .'#i(ation to transfer 2. .'#i(ation to de#i&er Obli7ation which can be 5ai+e/: 1. .'#i(ation to warrant the thin( <in/s of 5arranties n/er the Law: 1. %xpress 2. ) p#ied 1. 4A&ress , an$ affir ation of fact or an$ pro ise '$ the se##er re#atin( to the thin(, the nat+ra# tendenc$ is to ind+ce to p+rchase the thin(. Re3 isites: 6a7 0here is an affir ation of fact 6'7 0he fact +st pertain to the thin( either to the 1+a#it$, character or tit#e of the thin( An$ other atter a$ not 'e considered as an express warrant$.
0he +se of the words > ter ino#o(ies is not conc#+si&e as to whether or not there is an express warrant$. Example: B) (+arant$ > warrant$ $o+ that $o+ wi## 'e happ$ if $o+ '+$ this car at 8100,000C3 this does not res+#t in an express warrant$ A(ain, if the affir ation of fact pertains to the 1+a#it$ of the thin(, it is an express warrant$. Example: 0hese 10 sac2s of ferti#i@er wo+#d res+#t in 200 ca&ans of rice. 0he state ent of the se##erDs opinion is not as a r+#e considered an express warrant$. Example: B0his is the 'est piNa c#othC 3 it a$ t+rn o+t that there are 'etter piNa c#oth. As #on( as the se##er is not an expert on that fie#d, that wo+#d 'e treated ere#$ as an opinion and there can 'e no #ia'i#it$ for 'reach of an express warrant$. B!: %A, sold a land to B for (1< in Antipolo. As agreed upon (1++,+++ will be paid upon the signing of the &:.. #he balance will be paid within 7+ days from the time the occupants 5sCuatters6 of the land are evicted. It was so stipulated that if within 3 months, the sCuatters have not yet been evicted, the seller should return the (1++,+++. Another stipulation states > within the 3Amonth period, the value of the land doubled. &espite the filing of an eviction suit by the seller and the lapse of the 3Amonth period, the sCuatters were still occupying the land. #he seller offers to return the (1++,+++ to the buyer. #he buyer refused to accept the (1++,+++ and told the seller %never mind even if the sCuatters are still there. I will still buy the land,. .o the buyer offered to pay the balance (;++,+++ and demanded that a &:. be e'ecuted by the seller. #he seller refused to accept the (;++,+++. hat he did is to file an action to rescind the contract. ould the action prosper? *A! )f the answer is 'ased on rescission, the action wi## not prosper 'eca+se rescission a$ on#$ 'e in&o2ed '$ the a((rie&ed part$. 0he se##er is not an a((rie&ed part$. $. 2m&lie/ , %rof. .e Leon: 'eca+se of this i p#ied warrant$, it cannot 'e said that 8hi#ippine #aw does not adopt ca&eat e ptor B'+$er 'ewareC. 6;a$eDs -a&eat ! 8#ease chec2 the 'oo2 of 8rof. 4e Leon re(ardin( this state ent. 0han2s 7
%&en if there is no stip+#ation as to these warranties, the #aw itse#f wo+#d pro&ide for these warranties and hence if there are hidden defects he wo+#d ha&e re edies +nder the #aw or e&en if he was depri&ed of the thin( he 'o+(ht he wo+#d ha&e a re ed$ a(ainst the se##er. ?ence, it is not correct to sa$ that 8hi#ippine #aw has adopted ca&eat e ptor. 5+t there are certain instances when there wo+#d 'e no s+ch i p#ied warrant$ a(ainst hidden defects. 0here a$ 'e warrant$ as to tit#e or a(ainst e&iction '+t there is no warrant$ a(ainst hidden defects +nder certain circ+ stances. 5arrant1 A7ainst 4+iction / 0itle Q: If the seller was able to transfer ownership to the buyer may the seller nonetheless be held liable for breach of warranty against eviction? A! Ges. 0hese are 2 different o'#i(ations! the o'#i(ation to transfer ownership and the o'#i(ation to warrant the thin(. Example: 0his warrant$ a(ainst e&iction wo+#d inc#+de the warrant$ that the '+$er fro the o ent of the sa#e ha&e and en/o$ the #e(a# and peacef+# possession o&er the thin( so#d. Re3 isites of warrant1 a7ainst e+iction: 1. 0here has to 'e fina# /+d( ent depri&in( hi of s+ch thin( either who##$ or partia##$. )n other words, a case was fi#ed '$ a 3 rd person a(ainst the '+$er which res+#ted in a fa&ora'#e decision as to the p#aintiff res+#tin( in the depri&ation of the propert$ '$ the '+$er. 2. 4epri&ation +st 'e either! 62.17 5ased on a 3rd personDs prior ri(ht o&er the thin( prior to the sa#e or 62.27 5ased on an act after the sa#e '+t i p+ta'#e to the &endor. 3. 0here sho+#d 'e no &a#id wai&er 4. 0he action to ho#d the &endor #ia'#e sho+#d 'e fi#ed within the period prescri'ed '$ #aw. 5ARRAN0B A;A2NS0 :2..4N .494C0S Re3 isites: 1. 0he defect +st exist at the ti e of the sa#e. )f the defect started after the sa#e there can 'e no s+ch #ia'i#it$. 2. 0he defect +st 'e hidden. )f the defect is patent and the '+$er nonethe#ess 'o+(ht the thin( then he can no #on(er ho#d the se##er #ia'#e. )f the se##er is not aware of the hidden defects, he can 'e he#d #ia'#e. )f he was aware, his #ia'i#it$ wi## 'e (reater 'eca+se that a2es hi a 'ad faith se##er. Q: !ven if there is such a hidden defect, is it possible that the vendee cannot hold the vendor liable despite the fact that there was hidden defect even if he was not informed because maybe the seller was not aware? A! Ges, he a$ not 'e a'#e to ho#d the se##er #ia'#e if he is an expert on the thin(. ?e is expected to 2now the defect. 3. 0he defect +st res+#t in the thin( 'ein( +nfit for the p+rpose of the '+$er or at #east it di inish the fitness of the thin( s+ch that the '+$er wo+#d not ha&e 'o+(ht it at the price had he 2nown of s+ch defect. Q: If the thing which has a hidden defect was lost or destroyed, can the vendee hold the vendor liable for this breach of warranty? &oes it matter if the loss was due to a fortuitous event or maybe the loss was due to the fault of the buyer himself, nonetheless, can he hold the vendor liable? A! Ges. 0he &endee can ho#d the &endor #ia'#e for 'reach of warrant$ a(ainst hidden defects e&en if the thin( was #ost d+e to fort+ito+s e&ent or d+e to the fa+#t of the &endee hi se#f 'eca+se of the hidden defects. 5+t of co+rse, if the ca+se of the #oss was the defect itse#f, the #ia'i#it$ is (reater than if the ca+se of the #oss was a fort+ito+s e&ent or fa+#t of the '+$er. )f there wo+#d 'e a pro'#e here as to the extent of the #ia'i#it$ of the &endor, he sho+#d first consider the ca+se of the #oss, a$'e it was #ost d+e to the defect itse#f or #ost thro+(h fort+ito+s e&ent or #ost thro+(h the fa+#t of the &endee. After that, he sho+#d deter ine whether the &endor was aware of the defects or he was not aware. A(ain, if he was aware, da a(es a$ 'e reco&ered. )f he was not aware, he a$ not 'e he#d #ia'#e for da a(es +n#ess he can on#$ 'e he#d #ia'#e for interest.
)f the defect was the ca+se of the #oss, the &endor wo+#d 'e #ia'#e for the ret+rn of the price, not on#$ the price #ess &a#+e '+t a#so to ref+nd the expenses and da a(es 'eca+se the &endor was aware of the defects. )f the &endor was not aware of the defects, he cannot 'e he#d #ia'#e for da a(es '+t he wo+#d on#$ 'e he#d #ia'#e for the price. )f the ca+se of the #oss of the thin( was a fort+ito+s e&ent, he can on#$ 'e he#d #ia'#e for the price #ess &a#+e. ANB C:AR;4 OR NON G A%%AR4N0 4NC=M(RANC4 NO0 .4CLAR4. OR <NO5N 0O 0:4 (=B4R Q: ould there be an encumbrance over an immovable which is a form of easement or servitude? A! An exa p#e of this is a road ri(ht of wa$. Q: If the buyer bought the land which turned out to have a road right of way in favor of a 7 rd person, can he claim breach of warranty against any charge or non > apparent encumbrance? A! .f co+rse there are re1+isites! 617 0he enc+ 'rance or ease ent or '+rden or the road ri(ht of wa$ has to 'e non , apparent. Q: If there is an encumbrance, what are the remedies of the buyer? A! 6a7 ?e can see2 for the red+ction of the price. 6'7 Rescission = the #aw re1+ires that the action for rescission +st 'e fi#ed within 1 $ear fro the date of the contract. )f after 1 $ear, no ore rescission. 6c7 )f he 'eca e aware ore than a $ear, he a$ fi#e an action for da a(es, 5+t the #aw re1+ires that the action for da a(es has to 'e fi#ed within 1 $ear a#so '+t fro the ti e of the disco&er$ of enc+ 'rance. )f he fi#ed it for exa p#e, after 2 $ears fro disco&er$ , no reco&er$ of da a(es. 5ARRAN0B O9 8=AL20B %rof. .eleonH %rof. Cit 7H %rof. (a+iera: there is another warrant$ which is 5ARRAN0B O9 8=AL20B which inc#+des! 617 <arrant$ of ;itness 627 <arrant$ of 9erchanta'i#it$ 0o so e a+thors the warrant$ of 1+a#it$ is considered +nder the warrant$ of hidden defects. Att1. =ribe: ) cannot a(ree that the warrant$ of 1+a#it$ is in the warrant$ of hidden defects. ) a(ree with 8rof. 4e Leon, 8rof. Eit+( and 8rof, 5a&iera that there is a warrant$ of 1+a#it$. 5ARRAN0B O9 920N4SS 9OR A %AR02C=LAR %=R%OS4 0he thin( 'o+(ht a$ not act+a##$ ha&e an$ defect and for 1 i##ion '+$ers it wo+#d 'e fit for their p+rpose. ?owe&er, it a$ not 'e fit for the p+rpose of 1 '+$er and if a## the re1+isites for this warrant$ are present, then he a$ ho#d the se##er #ia'#e for 'reach of warrant$ of fitness for a partic+#ar p+rpose a#tho+(h there is no hidden defect '+t it is not fit for the p+rpose of the '+$er. )n order for the se##er a$ 'e he#d #ia'#e! 1. 0he '+$er has to infor the se##er of the partic+#ar p+rpose for which the thin( is to 'e +se and 2. 0he se##er anifested that the thin( wo+#d 'e fit for the p+rpose and the '+$er re#ied on s+ch representation of the se##er. Note: )f the thin( is so#d +nder the trade na e there can 'e no warrant$ of fitness for a partic+#ar p+rpose. 5ARRAN0B O9 M4RC:AN0A(2L20B )t pertains to the fact that it is fit for the (enera# p+rpose. )f the thin( was so#d '$ description or '$ sa p#e, it is considered that there is s+ch a thin( as warrant$ of erchanta'i#it$. SAL4 O9 AN2MALS 520: .494C0S G R=L4S: 1. 0he defect is a redhi'itor$ defect , it is s+ch 2ind of defect that e&en '$ exa ination of expert it cannot 'e disco&ered. Q: If one of the animals has redhibitory defect, can the buyer rescind the entire contract pertaining to all the animals? A! ;.R.! "o. ?e can on#$ rescind the contract pertainin( to the ani a# with redhi'itor$ defect. ?e cannot rescind the entire contract pertainin( to a## ani a#s. 4Ace&tion: )f he can pro&e that he wo+#d not ha&e 'o+(ht the others had he 2nown the defect of one then he can rescind the entire contract.
Q: ho has the burden of proof that he would not have bought the others had he 0nown of the defect of one? A! "or a##$, it wo+#d 'e the '+$er. 5+t the #aw +nder certain circ+ stances wo+#d pro&ide for this pres+ ption that it is pres+ ed that he wo+#d ha&e 'o+(ht the others had he 2nown of the defect of one. Examples! ?e 'o+(ht the ani a#s in tea s or in pairs then the pres+ ption arises. = Lo&e 'irds 6An( (a #o&e 'irds, 2apa( na ata$ $+n( isa #ater on a ata$ din $+n( isa. 9insan n(a (s+icide pa s$a pa( a( isa na #an( s$a. )++nto( n$a +#o n$a sa ca(e n$a. 7 2nstances whether there wo l/ be no warrant1 a7ainst hi//en /efects an/ therefore ca+eat em&tor ma1 be in+o6e/: 1. *a#e which is an Bas is where isC sa#e which eans sa#e where it is fo+nd xxx 'aha#a 2a sa '+ha$ o if $o+ want to '+$ the thin( and $o+ cannot #ater on c#ai that there were hidden defects. 6;a$e! p#s. research the co p#ete eanin( of Bas is where isC sa#e. Att$. :ri'e wi## as2 the eanin(. 7 2. *a#e of 2nd hand ite s 3. *a#e of ani a#s in fairs 4. *a#e in p+'#ic a+ction Note! 0here wo+#d sti## 'e warrant$ a(ainst e&iction. Note: R+#es on warrant$ a#so app#$ to /+dicia# sa#e. Q: In sale by authority of law or in e'ecution sale, can there be breach of warranty against eviction? A! Ges. 0he /+d( ent de'tor and not the sheriff sha## 'e #ia'#e. 0he #aw wo+#d specifica##$ exe pt certain persons fro #ia'i#it$ for 'reach of warrant$ #i2e sheriff, a+ctioneer, ort(a(ee, p#ed(e and other persons who se## '$ &irt+es of an a+thorit$ of #aw #i2e notar$ p+'#ic 'eca+se the$ are not rea##$ se##in( for the se#&es, the$ are se##in( on 'eha#f of another person. R2;:0S AN. O(L2;A02ONS O9 0:4 C4N.44 1. .'#i(ation to accept the thin( de#i&ered. 2. .'#i(ation to pa$ the price 6if warranted, with interest7 1. Obli7ation to acce&t the thin7 /eli+ere/ Q: If the buyer received the goods delivered, does it mean that he already accepted? A! "o 'eca+se recei&in( is pre#i inar$ to acceptin(. )n fact, this is consistent to the ri(ht pro&ided '$ #aw to the '+$er which is the ri(ht of inspection or the ri(ht of exa ination. 0hereafter, he a$ re/ect the (oods if defecti&e. $. Obli7ation to &a1 the &rice Q: hen? A! 617 As stip+#ated 627 )f there is no stip+#ation, it wo+#d 'e at the ti e and p#ace of de#i&er$. Ri7ht to 2ns&ect / 4Aamine 0his a$ 'e wai&ed. Example: -...4. arran(e ent. MAC4.A LA5 *t+d$ 9aceda Law and its essentia# feat+res 6see 'oo2 of 8rof. 5a&iera7 Q: Are the remedies under the <aceda Gaw alternative? -an the buyer be able to e'ercise 4 or more remedies all at the same time? A! Ges. Re edies +nder the 9aceda Law are c+ +#ati&e. R4M4.24S 9OR (R4AC: O9 CON0RAC0 R4M4.24S O9 AN =N%A2. S4LL4R (AR02CL4 1#$,) 617 Ri(ht to retain the thin( in his possession 6possessor$ #ien7 627 Ri(ht of stoppa(e in transit+ > ri(ht to res+ e possession of the (oods 637 Ri(ht of resa#e 647 Ri(ht to rescind Q: Are there other remedies aside 1*43? A! Ges. 0he se##er a$ opt to fi#e an action for specific perfor ance or an action for da a(es. =n&ai/ seller , is one who has not 'een f+##$ paif of the price.
Note: re edies of the +npaid se##er are not necessari#$ a#ternati&e. 0he ri(ht of resa#e and the ri(ht to rescind a$ on#$ 'e exercised if the se##er has possessor$ #ien. %OSS4SSORB L24N Q: hy is it called possessory lien? A! 'eca+se there another #ien in the #aw. 0his is the #ien +nder the r+#es on conc+rrence and preference of credit. Note: 0he '+$er is not re1+ired to 'e inso#&ent. Q: A! hen would the seller be considered to have lost his lien? 617 627 637 )f he wai&es his ri(ht )f the '+$er #awf+##$ o'tained possession o&er the (oods <hen the thin( is de#i&ered to a co on carrier and the se##er did not prefer his ownership and possession o&er the (oods.
S0O%%A;4 2N 0RANS20= Re3 isites: 617 )nso#&enc$ of the '+$er 627 0he se##er +st ha&e parted possession o&er the (oods 637 0he (oods +st 'e in transit :ow ri7ht is eAercise/: 617 5$ o'tainin( act+a# possession of the (oods 627 0his a$ 'e exercised '$ ere notice to the co
on carrier
)f the se##er &a#id#$ exercised the ri(ht of stoppa(e in transit+, he wi## 'e considered to ha&e re(ained his possessor$ #ien. R2;:0 O9 R4SAL4 Q: hen would the seller have this right? A! 617 )f the (oods are perisha'#e 627 0he ri(ht is express#$ reser&ed in the contract 637 0he '+$er has 'een in defa+#t for an +nreasona'#e ti e. Note: 0he se##er sho+#d send a notice of the intention to rese## to the '+$er. Note: 0he resa#e a$ 'e a pri&ate sa#e or a p+'#ic sa#e. 0he on#$ #i itation here is that the se##er cannot '+$ direct#$ or indirect#$. R4C0O LA5 8#s. read *a#es '$ 8rof. 5a&iera 4D02N;=2S:M4N0 O9 SAL4 8#s. read *a#es '$ 8rof. 5a&iera 1. 2. 3. 8a$ ent "o&ation Loss of the thin(
=n/er the law on sales 1. 0he exercise of the ri(ht of resa#e wi## res+#t in the extin(+ish ent of the 1st sa#e. 0he ownership of the 1 st '+$er wi## 'e ter inated and s+ch ownership wi## 'e &ested to the 2nd '+$er 2. Rescission or cance##ation wi## extin(+ish -.* 3. Rede ption <in/s of Re/em&tion 1. -on&entiona# 2. Le(a#
LEASE Note: Read the 4efinition of Lease +nder Artic#es 1643, 1644, 1713. -onsider a#so on ;or a#ities! Artic#es 1647, 1724 in re#ation to 1403 on *tat+te of ;ra+ds and 1403, 1878 on A(enc$ to Lease. Assi(n ent and *+'#ease! Artic#es 1649, 1650 ) p#ied new #ease or tacita rec+nd+cion! Artic#e 1670 "important#
Ri(hts and .'#i(ation of the Lessor and Lessee! Artic#es 1673, 1678, 1680, 1723 "ta$e note se%eral &uestions in the bar ha%e appeared under these pro%isions# 8eriod of the Lease if the parties fai#ed to ;ixed the 8eriod! Artic#es 1682, 1687 Ri(hts of 0hird 8erson! Artic#e 1729 "ex: rights of owner of materials against the owner of the building#
A! "or a##$ when a cons+ a'#e thin( is +se in accordance with its nat+re it is cons+ ed, as a r+#e therefore cons+ a'#e thin(s cannot 'e the s+'/ect atter of #ease of thin(s. 0he exception is, when the +se of the thin(s is on#$ for exhi'ition, or when the$ are accessor$ to an ind+stria# esta'#ish ent then it a$ 'e a s+'/ect of #ease. 3. -A:*% 9ORMAL2024S Lease of *er&ice , there is no partic+#ar for re1+ired '$ #aw for the &a#idit$ of the #ease not e&en for the enforcea'i#it$ as a r+#e. Rea/: .onal/ .1 +s. CA Lease of 0hin(s , certain pro&ision of the #aw which re1+ires certain for s to 'e enforcea'#e. Note: the pro'#e and #ease. in #ease wo+#d nor a##$ 'e a co 'ination of an a(enc$
"ote! 0he first thin( to consider in #ease is to consider the 2ind of #ease. <in/s of Lease: 1. Lease of 0hin(s 2. Lease of <or2 or *er&ice 3. Lease of Ri(ht "ote! )n #ease of *er&ice, there are fo+r 647 of the '+t three 637 wi## not 'e co&ered '$ -i&i# Law, which are ?o+seho#d *er&ice and -ontract of La'or 6co&ered '$ La'or Law7, and -ontract of -arria(e 6co&ered '$ -o ercia# Law7. 0he on#$ 2ind of Lease of *er&ice that wi## 'e disc+ss +nder the -i&i# Law is the -ontract for a 8iece of <or2. .efinition: Q: If a party binds himself to give another the enHoyment or use of thing, does that ma0e the contract one of lease of things? A! "o, the ost i portant distinction here with that of co odat+ is that in #ease, it +st 'e for a price certain, otherwise if there is no &a#+a'#e consideration for the +se or en/o$ ent of the thin( it wi## 'e co odat+ . .istin7 ish a Contract for %iece of 5or6 from Contract of A7enc1 Rea/: Frensel vs. <ariano "ote! )n A(enc$, the contro# of the principa# o&er the a(ent is so per&asi&e that the principa# can contro# not on#$ the res+#t '+t a#so the anner and ethod of the perfor ance of the o'#i(ation which is not present in this case and therefore 9erit was not considered an a(ent of 9ariano. Q: As to the relationship of the ta'i driver with his operator, is this a contract of lease? A! *-, r+#ed that this is in fact a #ease '+t not a #ease of thin(, '+t #ease of ser&ice specifica##$ an e p#o$ ent contract, this is 'eca+se of the contro# of the operator o&er the taxi dri&er, as to when, what ti e the dri&e operates the &ehic#e. Note: A(ain, to distin(+ish #ease contract fro other #e(a# re#ationship $o+ ha&e to consider the characteristic of the contract. 0he 'est wa$ to re e 'er the 2inds of contract is to 2now '$ heart what are the rea# contract 6 +t++ , co odat+ , deposit, p#ed(e7 and for a# contract 6antichresis, donation7. Aside fro that it a$ 'e safe to consider as a r+#e a## the other contract as consens+a# contract, where no partic+#ar for is re1+ired except in exceptiona# case! e.(. sa#e of #ar(e catt#e. As a r+#e #ease, therefore is a consens+a# contract '$ ere eetin( of the ind as to the o'/ect and to the consideration the contract is perfected. Note: Lease of thin(s is not essentia##$ persona#. 9eirs of Fausto &imaculangan vs. IA-. :pon the death of parties #i2e death of #essee, the contract is not there'$ ter inated. 0he heirs of the #essee a$ contin+e to occ+p$ the pre ises '$ &irt+e of the #ease 'eca+se it is not extin(+ish +pon death of #essee. Characteristic of Lease of thin7s -onsens+a# -ontract .nero+s 5i#atera# "o inate 8rincipa#. 4ssential Re3 isites of Contract of Lease 1. -."*%"0 2. .5A%-0 Q: In lease of things, may a consumable thing be the subHect matter of lease?
B!: Agreement for the repair of a private plane and for a certain sum of money, however additional wor0 was reCuested by a person who has the authority of a duly recogni@e representative of the owner of the plane and the reCuest was merely verbal, when the additional wor0 was completed, the one who rendered the wor0 demanded additional payment, the defense raise was under 1)42 in order that a claim for additional payment for the additional wor0, the agreement for the additional wor0 must be in writing and the changes should be authori@ed in writing *A! 0he s+((ested answer of :8 wi## s+stain the defense 'eca+se of 1724O s+ch chan(e not 'ein( a+thori@ed in writin(, the re1+est was ere#$ &er'a# then the c#ai a$ not prosper. R2;:0S AN. O(L2;A02ON O9 0:4 L4SSOR As to necessar$ repairs of the thin( #ease, this is an o'#i(ation of the #essor, +nder the #aw the #essor is o'#i(e to a2e the necessar$ repairs. Rea/: Kon@ales vs. <ateo R2;:0S AN. O(L2;A02ONS O9 0:4 L4SS44 Note: 0wo 627 fa&orite artic#es are 1649 pertainin( to assi(n ent of #ease, and 1650 on s+'#ease. 0he 1+estion in the 5ar a$ 'e as si p#e as a$ a #essee s+'#ease the propert$ witho+t the consent of the #essor and what are the respecti&e #ia'i#ities of the #essee and s+'#essee. Artic#es 1649 and 1650 wo+#d te## +s that a #essee a$ not assi(n his ri(ht on the #ease witho+t the consent of the #essor howe&er he a$ s+'#ease the propert$ in who#e or in part e&en witho+t the 2now#ed(e of the #essor as #on( as he was not prohi'ited fro s+'#easin( the pre ises. Rea/: <alacat vs. .ala@ar Frensel vs. <ariano 04RM2NA02ON O9 0:4 L4AS4 B!: &iscuss the effect of death of lessee, lessor, agent and principal. *A! )n a #ease of thin(, death of the #essee does not ter inate the contract. A contract of #ease is not essentia##$ a persona# contract therefore +pon the death of the #essee, it a$ 'e contin+ed +nti# the expiration of period of the #ease '$ the heirs. 6-ase! ?eirs of 4i ac+#an(an &s. )A-7 2M%L24. N45 L4AS4 Note: one of the ost fa&orite in the 'ar exa . Re3 isites! 1. 0he #ease period has expired and 2. 0he #essee contin+es to 'e in possession of the #ease for at #east 15 da$s fro the ti e of the expiration of the #ease and 3. "o notice to the contrar$ fro the #essor and the #essee. B!: (ertain to contract of lease entered into for period of 7 years Dan 1, =1 up to 1;=2. "entals were paid on monthly basis. It was stipulated that the lessee has the option to buy property at a certain price within a certain period 5option to buy6. &espite the lapse of the 7
10
year period, the lessee did not e'ercise the option, but continued to be in possession of the property and paying the monthly rentals and the lessor accepting the same. #his continued until Dune 1;=2 when the lessee stated that he would now buy the property in accordance with the option to buy. #he lessor refuse, claiming there was no more option. as the lessor correct? Ges. as it correct to say that there was e'tension of the lease under the facts? *A! Ges, there was an extension 2nown was i p#ied new #ease. ?owe&er, with the i p#ied new #ease it does not ean that a## the ter s and condition of the contract in the ori(ina# #ease contin+e a#so. ;irst as to the ter , +nder the #aw, the ter of the renewed #ease wo+#d not 'e the ter a(reed +pon '+t on#$ 'e of a period dependin( on the anner the renta#s are paid. )f the pa$ ent is on ann+a# 'asis, the renewa# wo+#d on#$ 'e for a $ear and if onth#$ pa$ ent of renta# is ade, the i p#ied new #ease wo+#d on#$ #ast for 30 da$s. As to the option, it was renews, *- he#d, in an i p#ied new #ease, on#$ those ter s and conditions which are (er ane in a contract of #ease are dee ed renewed as to the rest #i2e option to '+$, wi## not 'e considered renewed. %&en in the facts of the case itse#f, it was stip+#ated that the option a$ 'e exercise within the period a(reed +pon 63 $ears7. AGENCY 4efinition 1868, 1874 and 1878= for a#ities -o@ a for is re1+ired for the &a#idit$ or for the enforcea'i#it$ of the contract entered '$ the a(ent=1878, 1874 1892= pertain to appoint ent of the s+'stit+te= effect= a$ the a(ent nonethe#ess 'e he#d #ia'#e for the #oss that inc+rred '$ the princip#e as the res+#t of the appoint ent of the s+'stit+te. .ther pro&isions pertain to the ri(ht and o'#i(ations of co ission a(ent or ore i portant#$ the (+arant$ co ission a(ent=1907=1908 %ffect of death=1919, 1930 and 1931 %ither of the a(ent or principa# Re&ocation=2ind of a(enc$= a(enc$ co+p#ed with interest=1927 (4: A as6e/ her best frien/ to ( b 1 for her certain items in a 7rocer1 store. 2s there a nominate contract create/ between A an/ (I *A! 5etter answer, if 5 a(reed to the re1+est of A, an a(enc$ re#ationship has 'een created, a no inate contract has 'een created. Rea/: Quiroga vs (arsons 4istin(+ishin( contact of a(enc$ fro other contract and other #e(a# re#ationship. -onsider the characteristics of a contract of a(enc$ as a contract and as a #e(a# re#ationship '+siness or(ani@ation. Rea/: Gepanto <ining case <ariano case
Q: A letter was sent by B to ?, informing ? that A has the authority to enter into a contract with ? specifically to obtain goods from ?, li0e copra, abaca which goods will be sold by A, after the sale a portion can be deducted as a commission and the restaurant to be delivered to ?. after a certain period, the goods obtain by A from ? remained unpaid. In other words A will get the goods from ?, A did not deliver the proceeds of the sale. ? demanded payment from B. #he defense of B was as of that moment from that certain period he has already revo0ed the authority of the agent and therefore be bound by any contract entered into by A in representation of B with 7 rd person. Is the claim of B tenable? *A! "o. 1873 so far as 3 rd person are concern, this notice iton( #etter n$a 2a$ I re ain in f+## force and effect +nti# it is rescinded in the sa e anner it was (i&en. ' Act al a7enc1 0he #aw itse#f c#assif$ act+a# a(enc$ into as anner of creation, express > i p#ied. 0here is no pro'#e with express a(enc$. 3. %xpress a(enc$=it is a 2ind of a(enc$ the consent of 'oth parties were express#$ (i&en. 4. ) p#ied a(enc$= were the consent of one parties was on#$ i p#ied#$ (i&en on the part of principa#= the #eadin( case is &ela (ena vs. 9idalgo Q: If a person was as0ed to administer the property of another to sell the property, and he said nothingA by his silence, by his inactions may be deemed accept agency? A! "ot necessari#$. :nder the #aw, $o+ ha&e to a2e distinction to deter ine the scenario +nder which the said appoint ent was ade, o2ieP 0he #aw wo+#d sa$ when the 2 parties are a'sent, and when the 2 parties are present. <hen 2 parties are a'sent= 1 is in 9ani#a and the other is in -e'+. <hen 2 parties are present= present in the sa e roo 6a7 2 persons present= present in the sa e conference ha## 6'7 )f 2 persons are in different p#ace, one in 9ani#a and the other one in -e'+ Com&ensation As to the co pensation in a contract of a(enc$ consider if the a(enc$ is (rat+ito+s or onero+s. Rea/: 1909 = the #ia'i#it$ of the a(ent for da a(e to the principa# d+e to his ne(#i(ence or e&en 'ad faith or fra+d co itted a(ainst the principa# a$ 'e iti(ated if the a(enc$ is (rat+ito+s in character. B!: .cope of authority of the agent whether it only pertains to the acts of administration or acts of anu yun dominion? *A! :nder this pro&ision 1877 if the a(enc$ is co es in (enera# ter this on#$ co prise acts of ad inistration e&en if the principa# 'eho#ds power to the a(ent or it is stated that the a(ent a$ exec+te an$ act as a$ 'e dee ed appropriate. 0hat wi## sti## 'e an a(enc$ pertainin( to act of ad inistration. As to for , the #aw is c#ear that it a partic+#ar for . a$ 'e ora# howe&er the #aw a$ re1+ire
Some a thors wo l/ classif1 contract of a7enc1 into threeH not conce&ts. 1. Act+a# a(enc$ 2. Apparent > dor ant 3. %stoppe# 1. 4sto&&el Iang case ;acts! ;#ores appears to ha&e f+## contro# of a resta+rant, owned '$ Kan( and in the ad inistration of the resta+rant he 'o+(ht certain ite s fro 9ac2, ite s needed for resta+rant '+t a portion > price to 'e paid, not '$ ;#ores, so 9ac2 6 se##er 7 went after the owner of the resto. 0he on#$ defense raised '$ the owner was that ;#ores was not his a(ent. 0a6e note! it is &er$ diffic+#t to pro&e act+a# a(enc$, 'eca+se an a(ree ent 'etween 2 persons, eh 2+n( &er'a# #an( an( a(ree ent d+n, how wo+#d $o+ 'e a'#e to pro&e, the owner of the resta+rant can 'e he#d #ia'#e '$ estoppe# 'eca+se he c#oth ;#ores with f+## power as if he has the a+thorit$ to '+$ those ite s necessar$ for the ad inistration of resta+rant aside fro that 9ac2 was a'#e to pro&e pieces of e&idence #i2e in the #ease a(ree ent o&er the '+i#din( where resta+rant was #ocated and co es the owner of the resta+rant as #essee and ;#ores si(n as an a(ent of the #essee with a## this the ?e#d! 0he owner of the resta+rant is #ia'#e +nder the 8rincip#e of %stoppe#. $. A&&arent / Ostensible
4SS4N02AL 4L4M4N0S O9 A CON0RAC0 O9 A;4NCB Rea/: "allos case 0he *- en+ erated the essentia# e#e ents or the a##e(ed essentia#s e#e ents of a contract of a(enc$. 1. -onsent 2. %xec+tion of the /+ridica# act= s+'/ect atter 3. Acts within the scope of a+thorit$ 4. 0he acts +st 'e in representation of the principa# 0his are a##e(ed#$ the essentia# e#e ent a(ain so e a+thors wo+#d disc+ss in their 'oo2s with d+e respect to the ponente of this case, ed$o a#i a#i an( en+ eration, first there was nothin( ention a'o+t the ca+se or consideration as a contract, a contract wi## ne&er &a#id#$ ha&e a ca+se or consideration we## it a$ 'e #i'era#it$ pwede na an ca+se $an '+t there +st ha&e a ca+se if on#$ for that the en+ eration 'e defecti&e ore than that that #ast 2 ention that the a(ent act within the scope and that the a(ent +st act in representation are not essentia# e#e ents of a contract of a(enc$ the$ are act+a##$ o'#i(ations of a(ent which eans the$ ha&e 'een a#read$ perfected of contract of a(enc$, no o'#i(ation wi## arise 2+n( &oid +n( 2ontrata 2+n( wa#a pan( &a#id contract, so essentia# e#e ents are on#$ those e#e ents necessari#$ for the &a#idit$ of the contract, once the contract is &a#id then the o'#i(ations wi## arise e&en if the agent acted outside the
11
scope of authority does it mean that the contract of agency is void? .f co+rse not, he can 'e he#d #ia'#e for actin( o+tside the scope of a+thorit$ or if he acted not in conte p#ation of the principa#, does it mean that there was no agency at all? .f co+rse not, there is a contract of a(enc$. :nder the r+#e the conse1+ences if the a(ent did not act in the representation of the principa#. %AR024S Loin( to the consent of the parties, we## 1 a+thor c#ai s that there are 3 parties in a contract of a(enc$ that is tota##$ wron(P 0here are on#$ 2 parties in a contract of a(enc$ the principa# and the a(ent, howe&er in pro'#e s in&o#&in( a(enc$ there a$ 'e there wo+#d 'e nor a##$ three persons in&o#&e, the third persons with who the a(ent transacted, no #on(er part of the concept a(enc$, this is the a(enc$, the contract entered into 'etween '$ the principa# and the a(ent, '+t when the a(ent entered into a contract it a$ 'e a sa#e, #ease or other contract and the 3 rd person is not a part$ to this contract, the 3rd person is a part$ to a 2 nd contract, that a(ain the parties is the principa# and the a(ent, the$ a$ 'e ca##ed in another na es the principa#= e p#o$er, constit+ent, chiefO the a(ent a$ 'e ca##ed attorne$=in= fact, prox$, representati&e. O(@4C0 As to the o'/ect of the contract of a(enc$ = this is the exec+tion of /+ridica# act. 9ORM A(enc$ a$ 'e ora#. )t does not atter, the contract of a(enc$ wo+#d 'e &a#id '+t the parties e&en if it is '$ &er'a# a(ree ent, howe&er an$ effect of the &er'a# a+thori@ation, the a(ree ent 'etween the a(ent and the principa# if it was on#$ &er'a# wi## 'e in the contract entered into '$ the a(ent. Read 1874 Contracts which re3 ire a S%A , see coda# Dimene@ vs. "abot ;acts! Ai ene@ was the owner of a certain parce#s of #and in 8an(asinan, he was then in the pro&ince of "orth L+@on, he sent a #etter to his sister as2in( his sister to se## one of his parce#s of #and and with that #etter the sister indeed so#d one of his parce#s of #and to Ra'ot, howe&er the sister did not re it the proceeds of th sa#e, 'in+#sa #n( n$a, so when Ai ene@ went 'ac2 to 8an(asinan, he de anded the propert$, $+n a$ na 2a$ Ra'ot na, so he fi#ed an action a(ainst Ra'ot, the defense raised '$ hi that the #etter wo+#d not 'e s+fficient a power of attorne$ to 'ind hi as a principa# the sa#e of the parce#s of #and. ?e#d! A #etter s+ffices as a power of attorne$. <hen $o+ sent a #etter to $o+r 'rothers or sisters $o+ do not notari@e first. Obli7ations of the A7ent: 1. 0o carr$ o+t the a(enc$ 2. )n carr$in( o+t the a(enc$, there are 2 o'#i(ations of the a(ent, he sho+#d a#wa$s re e 'er! a. to act within the scope a+thorit$ '. to act in 'eha#f of the principa# a. Actin7 within the sco&e of a thorit1 Q: how would you 0now if the agent was acting within the scope of authority? A! 5e (+ided '$ the power of a+thorit$. )n fact as a 3 rd person, $o+ can de and the power of a+thorit$, so that $o+ wi## 2now whether in fact he had a+thorit$ to enter into a contract '+t sa totoo #n( there are so e *8A which wo+#d 'e s+'/ect of the case +p to the *- pertainin( to the scope of a+thorit$ of the a(ent. Rea/: Ginal vs. (uno Rea/: Insular vs. (LB B!: A authori@e B to borrow sum of money from any ban0 and he also authori@e B to mortgage specific property specific parcel of land to secure that loan what B did he borrow money for himself from a certain ban0 without disclosing his principal, later on he defaulted the Cuestion was can the ban0 go after the principal? A! .f co+rse "o, the contract is 'etween the a(ent and the 'an2 on#$ the principa# has nothin( to do with the contract, +nder the facts, the a(ent 'orrow for hi se#f s$a ta#a(a, howe&er if $o+ ha&e read the s+((ested answer, $ 2nd para(raph to the effect that the 'an2 can at #east forec#ose the ort(a(e the$ can after the propert$ of the principa#. )f $o+ re e 'er the 1+estion, di tinatanon( n( exa iner can the 'an2 (o after the principa# as far as the thin( is concerned. 0he on#$ 1+estion pertains to the pa$ ent of #oan. Another thin( of the s+((ested answer it is tota##$ wron(, +nder the
facts, the principa# a+thori@e the a(ent to ort(a(e the propert$ for the #oan that wi## 'e o'tain '$ the a(ent in the na e of the principa#. Q: If indeed he mortgaged the land for a loan in his name, would that mortgage be valid? A! 4efinite#$ not. )f he ort(a(ed it as a ort(a(or the ort(a(e is &oid, the #aw re1+ires that the ort(a(or +st 'e the a'so#+te owner of the thin( ort(a(e. Q: :n other hand even if the agent mortgaged the thing on behalf of the principal, the principal is the mortgagor, would that be a valid and binding mortgage as against the principal? A! A#so not, a#so his a+thorit$ to ha&e the propert$ to ort(a(e to sec+re a #oan, not to sec+re an$ other persons #oan and that therefore it cannot 'e within the a+thorit$ of the a(ent and therefore an$ forec#os+re of s+ch ort(a(e wi## not prosper. Q: If the agent acted within the scope of his authority and in representation of the principal, who will be bound in that such contract? A! Aside fro the 3rd person, it wi## 'e the principa# 'eca+se a(ain the a(ent ere#$ representin( the principa#. 9owever, it is possible for the agent himself to be bound in such contract be held liable under such contract? A! Ges, one if he express#$ 'inds hi se#f to that contract. Rea/: &omingo vs. &omingo Rea/: U. vs. "eyes Obli7ation to ren/er an acco ntin7 )f this ti e the principa# a+thori@e the a(ent to se## his car for 3002, the description of the car was ention in the *8A at #east 3002 howe&er 'efore the a(ent wo+#d se## the car, the principa# ca##ed hi '$ phone instr+cted hi to se## the cart in Q- to a e 'er of )58 e 'er chapter, instead of se##in( the car in Q- )58 e 'er chapter he so#d the car in 9ani#a not 2nown '$ the principa# for 3002, 516 -an the principal recover the car from the buyer if that car is already delivered to the buyer? 546Any remedy provided by the law to the seller or to the principal? 1. )t depends, if that '+$er has no 2now#ed(e of that instr+ction of the principa# then he has a## the ri(ht to retain the car and that sa#e wi## 'e &a#id and 'indin( as a(ainst the principa#. As pro&ided +nder Art. 1900 so far as 3rd persons are concerned the$ on#$ re#$ on the *8A as written the$ ha&e no o'#i(ation to in1+ire on the specia# instr+ctions ade '$ the principa# which are not ention in the *8A, eh wa#a na an d+n sa *8A na it wi## 'e so#d to an )58 e 'er chapter in Q-. 2. Lo after the a(ent or da a(es if there is an$ da a(e s+stain '$ hi for his fai#+re to fo##ow the instr+ctions of the principa#. Rea/: 1898 A&&ointment of S bstit te Rea/: *+'stit+te &s. *+' A(ent 68rof. 4e LeonDs 'oo27
PARTNERSHIP B!: A, using all his savings in the total amount f (hp4,+++, decided t establish a restaurant. B, however, gave (hp2,+++ as %financial assistance, with the agreement that B will have 448 share of the profits of the business. After 44 years, B filed an action to compel A to deliver to him his share in the profits claiming that he was a partner. A denied that B was his partner. Is B a partner of A? *A! Ges, 5 was a partner in the '+siness 'eca+se there was a contri'+tion of one$ to a co on f+nd and there was an a(ree ent to di&ide the profit a on( the se#&es. Att1. =ribe: ) do not a(ree with the answer. )Dd rather a(ree with the a#ternati&e answer. <?G! )n the a#ternati&e answer as can 'e seen fro the facts, 5 (a&e 8hp4,000 on#$ as a financia# assistance. )t was not a contri'+tion to a co on f+nd. As s+ch, he act+a##$ 'eca e a creditor of A. 0herefore, he did not contri'+te to a co on f+nd. Q: hat about the stipulation that B will have 448 share of the profits?
12
A! 0he #aw on partnership is &er$ c#ear that a sharin( in the profits does not necessari#$ does not res+#t in a partnership contract 'eca+se the sharin( of the profits a$ on#$ 'e a wa$ of co pensatin( the other person, in fact that can 'e a ode of pa$ ent of the #oan. Kasi $+n( #oan, s+pposed#$ pwede pa$a'#e e&er$ onth with a fixed a o+nt. 5+t as a(anda an( a(ree ent na ito, 22M of the profits, so that if wa#an( profit sa isan( taon, wa#a +nan( 'a$ad. R4i 'a thatDs reasona'#e a(ree ent. .n#$ 2+n( a$ profit, sa2a #an( 'a'a$aran. K+ 'a(a, friend#$ #oan ito. 0he sharin( in the profits as express#$ pro&ided '$ #aw does not necessari#$ res+#t in a partnership contract. 0h+s, it can 'e said that rea##$ 5 was not a partner '+t is act+a##$ a creditor of A. .efinition of %artnershi& Q: hat if two or more persons agreed to put up a partnership but they never intended to divide the profits among themselves, would that still be considered a valid partnership contract? A! Ges. :nder the second para(raph of the artic#e, two or ore persons can for a partnership for the exercise of a profession. %artnershi& +s. CoJownershi& -onsider the essentia# feat+res! CR4A02ON 8artnership is o'&io+s#$ created '$ a(ree ent. -o=ownership a$ 'e created '$ a(ree ent, '+t it a$ a#so 'e created '$ operation of #aw. )n fact, '$ express pro&ision of the #aw, the fact that there is co=ownership does not necessari#$ ean that there is a partnership existin( 'etween two persons. %x.! two persons a$ inherit a propert$ fro their father or other, and +nder the #aw, the$ a$ 'e considered as co=owners of the sa e propert$. %=R%OS4 8artnership! either to di&ide profits or exercise a profession. -o=ownership! -o on en/o$ ent of the thin( or ri(ht owned in co ere#$ to en/o$ the propert$, th+s the$ a$ ha&e different p+rposes.
corporation a$ en(a(e in ins+rance and 'an2in( '+siness, therefore there can 'e no partnership en(a(in( in s+ch '+siness! 'an2in( and ins+rance. Ca se 0he pro ise of each partner to contri'+te either one$, propert$ or ind+str$. 9ormalities Q: If the agreement of the parties to a contract of partnership was only a verbal agreement, would that be a valid and binding contract? ill there be a Huridical personality created? A! As a r+#e, $es. %&en if +nder Art. 1772, the #aw pro&ides that e&er$ contract of partnership, ha&in( a capita# of ore than 8hp3,000 or ore, sha## 'e in a p+'#ic instr+ ent and +st 'e re(istered with the *%-. 0he 2nd para(raph of Art. 1772 pro&ides that despite fai#+re to co p#$ with the re1+ire ents in the precedin( para(raph, this is witho+t pre/+dice to the #ia'i#it$ of the partnership and the indi&id+a# partners to third persons. ;ro that artic#e a#one, it is c#ear that despite non=co p#iance with the re1+ire ents of the #aw as to for , there is a partnership created, 'eca+se this is witho+t pre/+dice to the #ia'i#it$ of the partnership 62+n( a$ partnership7. 5+t ore direct#$, Art. 1768, the #aw pro&ides, the partnership has a /+ridica# persona#it$ separate and distinct fro that of each if the partners, e&en in case of fai#+re to co p#$ with the re1+ire ents of Art. 1772, par.1. After a##, a &er'a# partnership contract is &a#id and 'indin( 'etween the parties. Conse3 ences: se&arate an/ /istinct &ersonalit1 1.7 )t can own its propertiesO 2.7 )t can s+e and 'e s+edO 3.7 )t a$ 'e fo+nd (+i#t$ of an act of inso#&enc$O 4.7 )t a$ 'e disso#&ed for co ittin( an act of inso#&enc$. Rea/: -amposA"ueda vs. (acific -ommercial
onO CLASS292CA02ON O9 %AR0N4RS:2%: As to the o'/ect of the partnership is on#$ to deter ine whether a person a$ enter s+ch partnership, there is a need to distin(+ish whether a partnership is a :")E%R*AL or 8AR0)-:LAR partnership 2 Kinds of :ni&ersa# 8artnership! 1.7 :ni&ersa# 8artnership of 8ropert$ 2.7 :ni&ersa# 8artnership of 8rofit 04RM O9 %AR0N4RS:2%: Q: If the partners failed to fi' a period, does it mean that the partners agreed a partnership at will and may be dissolved at any time without any liability so long as they acted in good faith? A! "o, 'eca+se a partnership a$ 'e a partnership for a partic+#ar +nderta2in( e&en if no period was fixed '$ the parties. )n one case, a partner, disso#&ed a partnership, c#ai in( it to 'e a partnership at wi##, the partnership 'ein( in&o#&ed in a 'ow#in( '+siness. 0he *- r+#ed that e&en if the partners fai#ed to fix a period, the partnership cannot 'e considered as a partnership at wi## 'eca+se there was a stip+#ation in the partnership a(ree ent that the de't of the partnership sha## paid o+t of the profits that wi## 'e o'tained '$ the 'ow#in( '+siness. 0h+s, after a##, it cannot 'e disso#&ed at wi##, for the de'ts wi## ha&e to 'e paid. 0herefore, the *- r+#ed that the said partnership is a partnership for a partic+#ar +nderta2in(. CLASS292CA02ON O9 %AR0N4RS: Accordin( to the #ia'i#it$ of the partners! 1.7 Lenera# 2.7 Li ited 0his c#assification is re#e&ant on#$ in #i ited partnership. "ote! A #i ited partner cannot 'e he#d persona##$ #ia'#e for partnership o'#i(ations '+t there are exceptions As to the contri'+tion! 1.7 capita#ist 2.7 ind+stria# Q: An industrial partner, may be a general partner? A! Ges. A capita#ist partner a$ either 'e an ind+stria# or (enera# partner. Q: <ay an industrial partner be a limited partner? A.! "o. A #i ited partner can on#$ contri'+te one$ or propert$. ?e cannot contri'+te ser&ice.
A &er$ i portant feat+re of partnership in re#ation to co=ownership, it has a /+ridica# persona#it$, separate and distinct fro the indi&id+a# partner which is o'&io+s#$ not present in co=ownership. )n co=ownership, the$ ha&e their respecti&e persona#ities and no new persona#it$ wi## 'e created. %O54RS O9 0:4 M4M(4RS 8artnership! :n#ess otherwise a(reed +pon, each partner is an a(ent of the other partners and of the partnership. -o=ownership! As a r+#e, a co=owner cannot act as an a(ent of the other co= owners +n#ess otherwise a(reed +pon 'etween the co=owners. 8R.;)0*! -o=owner! 9as a#a2i an( profits, as a#a2i an( interest. 5+t not necessari#$ in partnership, 'eca+se the sharin( in the profits a$ 'e stip+#ated +pon '$ the parties. 8ero 2+n( wa#an( stip+#ation, it a$ 'e 'ased on the capita# contri'+tion. Q: ill death e'tinguish coAownership? A! "o, Kapa( na ata$ an( isan( co=owner, his heirs wi## 'e the co=owners of the s+r&i&in( co=owners at pweden( t+#o+=t+#o$ #an( $an. ?owe&er in partnership, if it is a (enera# partnership, if one of the partners dies, the partnership is disso#&ed. 4SS4N02AL 4L4M4N0S O9 %AR0N4RS:2% Li2e an$ other contract, it sho+#d ha&e the three essentia# re1+isites! 1.7 -onsent 2.7 .'/ect! to en(a(e to a #awf+# acti&it$, whether a '+siness or profession. 3.7 -a+se or consideration! the pro ise of each partner to contri'+te one$, propert$ or ind+str$ Consent of the contractin7 &arties: 0he r+#es in contract wo+#d 'e e1+a##$ app#ica'#e '+t, /+st #i2e in sa#es and #ease, there are persons who are prohi'ited fro enterin( into a contract of partnership. Ob-ect 0o en(a(e in a #awf+# acti&it$. Q: If the obHect is to engage in a lawful activity, necessarily the partnership is valid? A! "o. 0here are specific '+siness acti&ities wherein the #aw wo+#d re1+ire partic+#ar '+siness or(ani@ation which a$ en(a(e in s+ch '+siness acti&it$, specifica##$ the -orporation -ode which pro&ides that on#$
13
Q: But can a partner be both capitalist and industrial? A! Ges, he can contri'+te 'oth one$ and ind+str$. ?e can 'e 'oth capita#ist and ind+stria# and there wi## 'e conse1+ences to that. %RO%4R0B R2;:0S 3 9a/or propert$ ri(hts of a partner! 1.7 ri(ht in specific partnership propert$O 2.7 interest in the partnershipO and 3.7 the ri(ht of the partner to participate in the of the partnership.
ana(e ent of the '+siness
%ro&ert1 ri7hts consi/ere/ as minor: 1.7 ri(ht to ha&e access to the 'oo2s of the partnershipO 2.7 ri(ht to de and for a for a# acco+ntin(. 0B%4S O9 MANA;4M4N0: 1.7 *o#idar$ 9ana(e ent! =witho+t specification as to each otherDs d+ties or witho+t stip+#ation that one of the sha## act witho+t the consent of a##. 2.7 Aoint 9ana(e ent! =two or ore ana(in( partners with the stip+#ation that none of the sha## act witho+t the consent of a## others. 0he incapacit$ of one of the partners, or his a'sence wi## not 'e a &a#id (ro+nd not to o'tain his consent to a contract. )t has to 'e '$ +nani o+s consent, +n#ess, in o'tainin( his consent 6he is a'sent or incapacitated7 it wo+#d res+#t in irrepara'#e da a(e to the partnership, then the consent of the a'sent or incapacitated ana(in( partner a$ 'e dispensed with. 0his is a#so 2nown as ana(e ent '$ consens+s. 3.7 )f there was ana(e ent arran(e ent a(reed +pon 'etween the partners, each partner is considered as an a(ent of the partnership. )nto these arran(e ents, if on#$ one partner is appointed as a ana(er, he can exec+te an$ acts of ad inistration e&en if opposed '$ a## the other partners. %x. )n a partnership of which the '+siness is into '+$in( and se##in( cars, the ana(in( partner decided to '+$ a &inta(e 9ercedes 5en@, to the opposition of the other partners for the$ consider it 'ad in&est ent, wi## the decision or the act of the ana(in( partner in '+$in( the said car 'ind the partnershipH Ans.! Ges, 'eca+se s+ch act is ere#$ an act of ad inistration. 0he pro'#e is, if the ana(in( partner contin+es to not consider the senti ents of the other partners, he a$ 'e re o&ed as a ana(in( partner. 0he 1+estion now is, can he 'e easi#$ 'e re o&edH Ans.! "o. 0he re1+ire ents for the re o&a# of a ana(in( partner wo+#d depend on whether he was constit+ted as s+ch in the artic#es of partnership or he was ere#$ appointed as ana(in( partners after the constit+tion of the partnership. )f he was constit+ted as a ana(in( partner in the artic#es f partnership, he can on#$ 'e &a#id#$ re o&ed +nder two conditions! 1.7 there has to 'e /+st ca+seO and 2.7 '$ those partners ha&in( contro##in( interests. A'sent one of these conditions, he cannot 'e &a#id#$ re o&ed. )n fact, e&en if there is /+st ca+se, if the ana(in( partner contro#s 51M of the partnership, he can ne&er 'e re o&ed. ?owe&er, if he was appointed as a ana(in( partner on#$ after the constit+tion of the partnership, he can 'e &a#id#$ re o&ed e&en witho+t /+st ca+se, so #on( as it was done '$ those partners ha&in( contro##in( interests. O(L2;A02ONS O9 0:4 %AR0N4RS AMON; 0:4MS4LC4S AN. AS 0O 0:4 %AR0N4RS:2% AN. 2N CAS4 O9 NONJ%4R9ORMANC4 O9 0:4 O(L2;A02ON ' Obli7ations of the &artners: 1.7 0o a2e (ood his pro ised contri'+tionO 2.7 ;id+ciar$ d+tiesO and 3.7 0o participate in the #osses inc+rred '$ the partnership '+siness. 0o ma6e 7oo/ his &romise/ contrib tion: A. Mone1: )n order to 2now the re edies that a$ 'e a&ai#ed of '$ the non= defa+#tin( partners and the partnership, it +st 'e 2nown first what was pro ised '$ the partner, whether he pro ised to contri'+te one$, propert$ or ind+str$.
)f the partner pro ised to contri'+te one$, for instance, the partners a(reed to contri'+te 8hp1 9i##ion with 4 partners, witho+t an a(ree ent as to respecti&e a o+nt to 'e contri'+ted, the #aw pro&ides that the$ wi## ha&e to share e1+a##$. 0h+s, in this exa p#e, 8hp1 9i##ion wi## ha&e to 'e di&ided into 4 or the respecti&e contri'+tion wi## 'e 8hp250,000. )f one partner fai#ed to a2e (ood his pro ised contri'+tion which is a s+ of one$, he can 'e he#d #ia'#e '$ the non=defa+#tin( partners +p to the a o+nt pro ised p#+s interest. )f no rate was stip+#ated '$ the parties, it wi## 'e the #e(a# rate of 12M, 'eca+se this is for'earance in one$. Aside fro pa$in( the interest, which is +n+s+a#, not on#$ wi## that defa+#tin( part$ 'e he#d #ia'#e to pa$ interest, he wi## a#so 'e #ia'#e to pa$ da a(es. "or a##$, in o'#i(ations in&o#&in( one$, in case of da a(e inc+rred '$ another part$, the #ia'i#it$ wi## on#$ 'e pa$ ent of interest. )n partnership, not on#$ wi## he 'e #ia'#e to pa$ interest, '+t a#so of da a(es. Reme/ies that ma1 be in+o6e/ b1 the nonJ/efa ltin7 &artners: 1.7 *pecific perfor ance= the other partners can co pe# hi to a2e (ood his pro ised contri'+tion. 2.7 4isso#+tion= a$ 'e an option '$ the non=defa+#tin( partners, if that is the on#$ a o+nt that the$ are expectin( for the partnership. (. %ro&ert1: )f a partner pro ised to contri'+te propert$, it +st 'e deter ined as to what was rea##$ contri'+ted! was it the propert$ itse#f or the +se of the propert$. )f it was the ownership of the propert$ that was contri'+ted then he wo+#d ha&e the o'#i(ation to de#i&er and transfer ownership, aside fro that, +nder the #aw, he wo+#d ha&e the o'#i(ation to warrant the thin(. Q: Before the delivery of the thing to the partnership, who will bear the loss? A! 0he partner wi## 'ear the #oss. 0he partnership wi## 'ear the #oss when the thin( is a#read$ in its possession C. 2n/ str1 Q: If a partner fails to render service as promised, will specific performance be a remedy? A! 4efinite#$ not. )t wo+#d 'e a &io#ation of his ri(hts a(ainst in&o#+ntar$ ser&it+de. 0he re ed$ wo+#d 'e to de and for the &a#+e of the ser&ice p#+s da a(es. )t can 'e easi#$ done 'eca+se there is an ind+str$ rate. 9i/ ciar1 . ties: 0he d+t$ to o'ser&e +t ost (ood faith, honest$, fairness, inte(rit$ in 'ein( with each other. 0his d+t$ co ences e&en d+rin( the ne(otiation sta(e. 0est to deter ine whether there was a &io#ation of this d+t$! <hether the partner has an ad&anta(e hi se#f at the expense of the partnership. )f he has s+ch ad&anta(e at the expense of the partnership, then there is a 'reach of the fid+ciar$ d+t$. 0here need not 'e a proof of e&i# oti&e so #on( as he has this ad&anta(e at the expense of the partnership. 0his d+t$ #asts, nor a##$, +nti# the ter ination of the partnership. Q: <ay a partner may be held liable for breach of fiduciary duty even after the termination of the partnership? A! Ges. 0he *- he#d that e&en if the act of a partner was ade after the ter ination of the partnership, if the fo+ndation of that act was ade d+rin( the existence of the partnership, that can sti## 'e considered as a 'reach of fid+ciar$ d+t$. )n other words, pina(handaan na n$a $+n act d+rin( the existence of the partnership, howe&er, it was exec+ted on#$ after the ter ination of the partnership. %artici&ate in the Losses: Q: hat will be the share of the partner in the losses incurred in the partnership? Ans.! -onsider first whether there was a stip+#ation as to #osses or there was no stip+#ation. O(L2;A02ONS O9 %AR0N4R R4: 'R. %4RSONS Q: hen would a contract entered into by a partner bind the partnership? %x.! )f a partner went to a f+rnit+re shop to '+$ f+rnit+re the of which is 8hp100,000, and s+ch a o+nt re ained +npaid, can the se##er de and pa$ ent fro the partnershipH
14
A! )t depends as to whether the contract was entered into in the na e of the partnership, for the acco+nt of the partnership, +nder its si(nat+re, '$ a partner who is a+thori@ed to enter into that contract to 'ind the partnership. 0h+s, in this exa p#e, if in the a(ree ent the '+$er was the partner hi se#f and not the partnership, that partner sho+#d 'e he#d #ia'#e, for the f+rnit+re was not 'o+(ht in the na e of the partnership. 0he pro'#e , if the contract wo+#d 'e 'indin( in the partnership, then wo+#d 'e, whether the partner who represented the partnership had the a+thorit$ to 'ind the partnership. "or a##$, if a partner wo+#d enter into a contract, a partnership reso#+tion is not necessar$. <hether or not a contract wo+#d 'ind the partnership wo+#d depend on the nat+re of the act of s+ch partner and the nat+re of the '+siness of the partnership. Q: -oncretely, if a partner bought a complete set of .-"A in the name of the partnership and signed by that partner, would that contract bind the partnership for the set was bought in the name of the partnership? A! )t wo+#d depend on the nat+re of the act and the nat+re of the '+siness of the partnership. )n this exa p#e, the partner 'o+(ht the set of *-RA, pero na an, and '+siness n( partnership a$ resta+rant, hindi na an ata na i='ind n$a an( partnership to s+ch contract, an( ne(os$o ni#a resta+rant. 5+t the se##er wo+#d raise the defense, Bhindi 2o na an a#a na resta+rant $+n( '+siness, e an( na(represent n( partnership si Att$. A5-, so a2a#a #aw fir .C Is that a valid defense? Ans.! "o. 0he *- wo+#d te## that the third part$ contractin( with the partnership has the o'#i(ation to 2now at #east the nat+re of the '+siness of the partnership. )n fact, he can de and for the presentation of the artic#es of partnership in order for the third part$ to 2now the nat+re of the '+siness of the partnership. ;or, if this ti e, the partnership is a #aw office, and the partner 'o+(ht a set of *-RA, that act of '+$in( a set of *-RA wi## 'e considered apparent#$ for carr$in( the '+siness of the partnership the +s+a# wa$. 0herefore, that contract wi## 'ind the partnership. .2SSOL=02ONH 52N.2N; =% AN. 04RM2NA02ON 0hese are three different concepts. :pon disso#+tion of the partnership, it is ".0 4%%9%4 disso#&ed. )t wi## sti## ha&e to (o thro+(h the process of windin( +p of the affairs of the '+siness of the partnership 'efore the partnership itse#f wi## 'e ter inated. Q: hen would there be a dissolution of a partnership? :nder the #aw, there wi## 'e a disso#+tion if there is a chan(e in the re#ation of the partners ca+sed '$ an$ of the partners ceasin( to 'e associated in the carr$in( on of the '+siness of the partnership. 0hat wi## res+#t in the disso#+tion of the partnership. A(ain, if one of the partners ceased to 'e associated in the carr$in( on of the '+siness of the partnership, that wi## res+#t in the disso#+tion of the partnership. CA=S4S O9 0:4 .2SSOL=02ON 1.7 %xtra/+dicia#O 2.7 A+dicia#. 4Atra- /icial ca ses: 1.7 &o#+ntar$O 2.7 in&o#+ntar$. A+dicia# ca+ses are necessari#$ &o#+ntar$ 'eca+se it is '$ app#ication. 2NCOL=N0ARB CA=S4S Q: If one of the partners in a partnership was elected a .enator, would this dissolve the partnership by operation of law? Ans.! "o. Q: !ven if it is a partnership of lawyers or a law office? Ans.! "o. @ /icial Ca ses: ;ro n/s: 1.7 )nsanit$ or incapacit$! =0he co+rts re1+ire that it sho+#d 'e per anent in characterO and =s+ch incapacit$ or insanit$ +st affect the perfor ance of s+ch partner of his o'#i(ations with respect to the partnership '+siness. )n other words, 2+n( wa#a s$an( pa2ia#a sa ana(e ent n( '+siness n( partnership, insanit$ or incapacit$ is not a &a#id (ro+nd. 2.7 Lross iscond+ct! a.7 wron(f+# exp+#sionO
'.7 if one partner wo+#d ref+se to a##ow another partner in the ana(e ent of the partnership '+siness, if he has s+ch ri(ht to participate in the ana(e ent O c.7 if the ana(in( partner wo+#d ref+se to distri'+te the profits of the partnership when there is s+ch o'#i(ation to distri'+te the profitsO d.7 isappropriation of the inco e of the partnership '+siness. Q: Upon the dissolution of the partnership, and there were assets left, how will these be distributed? #o whom these assets be given? A! As far as partnership assets are concerned! 1.7 8artnership creditors who are not partners. 2.7 8artnership creditors 3.7 )f there are re ainin( assets, to the capita#ist partnersO 4.7 %xcess profits = 'ased on their a(ree ent as to profits. TRUST $ <2N.S: 1.7 %xpress 2.7 ) p#ied 2m&lie/ 0r st: $ <in/s: 1.7 res+#tin( tr+stO 2.7 constr+cti&e tr+st 0he c#assification of tr+st into two 2inds 6express and i p#ied7 and i p#ied tr+st into two 2inds 6res+#tin( and constr+cti&e7 wo+#d 'e re#e&ant in two concepts! 1.7 app#ica'i#it$ of the paro#e e&idence r+#eO and 2.7 prescription, specifica##$, ac1+isiti&e prescription. ".5.! An express tr+st o&er an i o&a'#e a$ not 'e pro&en '$ paro#e e&idence. 0his eans that i p#ied tr+st o&er an i o&a'#e a$ 'e pro&en '$ paro#e e&idence or express tr+st o&er a o&a'#e, a$ 'e pro&ed '$ paro#e e&idence. 4D%R4SS 0R=S0 Q: <ay an e'press trust over an immovable be proven by mere testimony of the witness? A! Ges, if the #aw$er of the other part$ did not o'/ect to the presentation of the witness. 2M%L24. 0R=S0 Res ltin7 0r st B!: A and B, brother and sister respectively, inherited two identical parcels of land. For purposes of convenience, B, sister of A, agreed to have the land registered in the name of A. 9owever, when the parcels of land were registered in the name of A, A sold one of the parcels of land to a buyer in good faith and for value. -an B recover the land from the buyer? hat would be the remedy of B? *A! 0his 1+estion c#ear#$ pertains to a res+#tin( tr+st. 0his is specifica##$, Art. 1451 of the "--. 5 cannot reco&er the #and fro the '+$er. As disc+ssed in *a#es, a '+$er who had 'o+(ht the propert$ fro a se##er who has no ri(ht to se##, '+t he has apparent a+thorit$ to se##, who appears to 'e the owner and the '+$er 'o+(ht the propert$ in (ood faith, he wi## ac1+ire ownership o&er the thin( e&en if the se##er has no ri(ht to se##. 5Ds re ed$ wo+#d 'e to (o after her 'rother for 'reach of tr+st in se##in( the propert$ witho+t her consent. Res+#tin( tr+st inc#+des Artic#es 1448, 1451, 1449, 1450,1452,1453,1454. Constr cti+e 0r st: B!: A applied for the registration of a parcel of land in his name. 9owever, he was called in Lew Bor0 to be a chef in a hotel. .o, he as0ed his cousin to follow up his application for registration of land while he was in Lew Bor0. Instead of ensuring the registration of the property in the name of A, he had the property registered in his 5cousin6 name. After which, he sold the property to a thi2rd person who bought the land relying on the #-#. hen A returned to the (hils., he learned of what his cousin had done. <ay A recover the parcel of land from the 7 rd person who bought the property in good faith and for value? A! "o.
15
N.(.: Art. 1456, 1455. Q: In constructive trust, may the trustee acCuire the property by prescription by mere lapse of time, without repudiation? A! Ges.
16

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SALES Articles / Laws to Remember: 1458, 1467, 1477 transfer of ownership, 1505, 559 who can transfer xxx,

ana(e ent of the '+siness

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