SALES

(Arts. 1458-1637, Civil Code)

larry p. Ignacio
I.

Nature, Purpose, Characteristics and Types

A.

Nature and Purpose (Art. 1458)

Case: 1) Villonco Realty v. Bormaheco, Inc., 25 July 1975, 65 SCRA 352

- "By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to
deliver a determining thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may
be absolute or conditional" (Art. 1458, Civil Code).
"The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object
of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts" (Art. 1475, Ibid.).
"Contracts are perfected by mere consent, and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be
in keeping with good faith, usage and law" (Art. 1315, Civil Code).
"Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are
to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a
counter-offer" (Art. 1319, Civil Code). "An acceptance may be express or implied" (Art. 1320, Civil Code).

B.

Characteristics of sale

Cases:1) Salonga v. Farrales,10 July 1981, 105 SCRA 359

- It is elementary that consent is an essential element for the existence of a contract, and where it is wanting,
the contract is non-existent. The essence of consent is the conformity of the parties on the terms of the contract, the
acceptance by one of the offer made by the other. The contract to sell is a bilateral contract. Where there is merely an
offer by one party, without the acceptance of the other, there is no consent.

2) Gaite v. Fonacier, 31 July 1961, 2 SCRA 830

- A contract of sale is normally commutative and onerous: not only does each one of the parties assume a
correlative obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price),but each
party anticipates performance by the other from the very start. While in a sale the obligation of one party can be lawfully
subordinated to an uncertain event, so that the other understands that he assumes the risk of receiving nothing for what
he gives (as in the case of a sale of hopes or expectations, emptio spei), it is not in the usual course of business to do so;
hence, the contingent character of the obligation must clearly appear.

C.

Absolute Sale vs Conditional Sale

Cases:1) Babasa v. CA, 21 May 1998, 290 SCRA 532

- A deed of sale is absolute in nature although denominated a conditional sale absent such stipulations
reserving title to the vendor until full payment of the purchase price, nor any stipulation giving them the right to unilaterally
rescind the contract in case of non-payment; in such cases, ownership of the thing sold passes to the vendee upon the
constructive or actual delivery thereof.

2) Laforteza v. Machuca, 16 June 2000, 333 SCRA 643

- There is nothing contained in the Memorandum Agreement from which it can reasonably be deduced that the
parties intended to enter into a contract to sell, i.e. one whereby the prospective seller would explicitly reserve the transfer
of title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of
the property subject of the contract to sell until the full payment of the price, such payment being a positive suspensive
condition, the failure of which is not considered a breach, casual or serious, but simply an event which prevented the
obligation from acquiring any obligatory force. There is clearly no express reservation of title made by the petitioners over
the property, or any provision which would impose non-payment of the price as a condition for the contracts entering into
force. Although the memorandum agreement was also denominated as a "Contract to Sell", we hold that the parties
contemplated a contract of sale. A deed of sale is absolute in nature although denominated a conditional sale in the
absence of a stipulation reserving title in the petitioners until full payment of the purchase price. In such cases, ownership
of the thing sold passes to the vendee upon actual or constructive delivery thereof. The mere fact that the obligation of the
respondent to pay the balance of the purchase price was made subject to the condition that the petitioners first deliver the
reconstituted title of the house and lot does not make the contract a contract to sell for such condition is not inconsistent
with a contract of sale.

3) Heirs of San Andres v. Rodriguez, 31 May 2000, 332 SCRA 769

- A deed of sale is considered absolute in nature where there is neither a stipulation in the deed that title to the
property sold is reserved in the seller until full payment of the price, nor one giving the vendor the right to unilaterally
resolve the contract the moment the buyer fails to pay within a fixed period.
Applying these principles to this case, it cannot be gainsaid that the contract of sale between the parties is
absolute, not conditional. There is no reservation of ownership nor a stipulation providing for a unilateral rescission by
either party. In fact, the sale was consummated upon the delivery of the lot to respondent. Thus, Art. 1477 provides that
the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.
The stipulation that the "payment of the full consideration based on a survey shall be due and payable in five (5)
years from the execution of a formal deed of sale" is not a condition which affects the efficacy of the contract of sale. It
merely provides the manner by which the full consideration is to be computed and the time within which the same is to be

paid. But it does not affect in any manner the effectivity of the contract. Consequently, the contention that the absence of
a formal deed of sale stipulated in the receipt prevents the happening of a sale has no merit.

4) Lim v. CA, GR No. 118347, 24 Oct. 1996

- There is a distinction between a condition imposed on the perfection of the contract and a condition imposed
on the performance of an obligation. Failure to comply with the first condition results in the failure of a contract, while
failure to comply with the second condition only gives the other party the option to either refuse to proceed with the sale or
to waive the condition.

5) Romero v. CA, GR No. 107207, 23 Nov. 1995

- Under the agreement, private respondent is obliged to evict the squatters on the property. The ejectment of
the squatters is a condition the operative act of which sets into motion the period of compliance by petitioner of his own
obligation, i.e., to pay the balance of the purchase price. Private respondents failure to remove the squatters from the
property within the stipulated period gives the petitioner the right to either refuse to proceed with agreement oor waive
that condition in consonance with Art 1545 of the Civil Code.

D.

Absolute Sale, distinguished from conditional and other types of sales

1) Contract to sell
Case: 1) Orden v. Aurea, GR No. 172733, 20 August 2008

- The distinction between a contract of sale and a contract to sell is well-settled. In a contract of sale,
the title to the property passes to the vendee upon the delivery of the thing sold; in a contract to sell,
ownership is, by agreement, reserved to the vendor and is not to pass to the vendee until full
payment of the
purchase price. Otherwise stated, in a contract of sale, the vendor loses ownership over
the property and
cannot recover it until and unless the contract is resolved or rescinded; whereas, in
a contract to sell, title is
retained by the vendor until full payment of the price. In the latter
contract, payment of the price is a positive
suspensive condition, failure of which is not a breach but an
event that prevents the obligation of the vendor to
convey title from becoming effective.

2) Laforteza v. Machuca, 16 June 2000, 333 SCRA 643

- Although the memorandum agreement was also denominated as a "Contract to Sell", we hold that
the parties contemplated a contract of sale. A deed of sale is absolute in nature although
denominated a
conditional sale in the absence of a stipulation reserving title in the petitioners until full
payment of the purchase
price. In such cases, ownership of the thing sold passes to the vendee upon
actual or constructive delivery
thereof. The mere fact that the obligation of the respondent to pay the balance of
the purchase price was made
subject to the condition that the petitioners first deliver the reconstituted title of
the house and lot does not make
the contract a contract to sell for such condition is not inconsistent with a contract
of sale.

3) Peoples Homesite and Housing v. CA, 133 SCRA 777 (1984)

- A contract to sell may not even be considered as a conditional contract of sale where the
seller may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition,
because in a conditional contract of sale, the first element of consent is present, although it is conditioned upon
the happening of a contingent event which may or may not occur. If the suspensive condition is not fulfilled, the
perfection of the contract of sale is completely abated.
However, if the suspensive condition is fulfilled, the contract of sale is thereby perfected, such that if
there had already been previous delivery of the property subject of the sale to the buyer, ownership thereto
automatically transfers to the buyer by operation of law without any further act having to be performed by the
seller.
- In a contract to sell, upon the fulfillment of a the suspensive condition which is the full payment of
the purchase price, ownership will not automatically transfer to the buyer although the property may
have been
previously delivered to him. The prospective seller still has to convey the title to the
prospective buyer by
entering into a contract of absolute sale (Coronel v. CA, GR No. 103577, 07 Oct.
1996).

2) Auction sale (Art. 1476)

3) Lease (Art. 1485)
4) Sale or return (Art. 1502)
5) Sale on approval (Art. 1502)
6) Sale with right to repurchase
7) Dacion en pago (Art. 1245)
8) Cession (Art. 1245)
E.

Sale distinguished from other contracts

1) Promise to buy or sell (Art. 1479)
Case: 1) Eulogio v. Sps. Apeles, GR No. 167884, 20 January 2009
2

- An option is a contract by which the owner of the property agrees with another person that the latter
shall have the right to buy the formers property at a fixed price within a certain time. It is a condition
offered or
contract by which the owner stipulates with another that the latter shall have the right to buy
the property at a
fixed price within a certain time, or under, or in compliance with certain terms and
conditions; or which gives to
the owner of the property the right to sell or demand a sale. An option is not of
itself a purchase, but merely
secures the privilege to buy. It is not a sale of property but a sale of the right to
purchase. It is simply a contract
by which the owner of the property agrees with another person that he
shall have the right to buy his property at
a fixed price within a certain time. He does not sell his land; he does
not then agree to sell it; but he does sell
something, i.e., the right or privilege to buy at the election or option of
the other party. Its distinguishing
characteristic is that it imposes no binding obligation on the person
holding the option, aside from the
consideration for the offer.
- There is no question that under Article 1479 of the new Civil Code an option to sell, or a promise
to buy or to sell, as used in said article, to be valid must be supported by a consideration distinct from the
price. This is clearly inferred from the context of said article that a unilateral promise to buy or to sell, even if
accepted, is only binding if supported by a consideration. In other words, an accepted unilateral promise can
only have a binding effect if supported by a consideration, which means that the option can still be withdrawn,
even if accepted, if the same is not supported by any consideration. Here it is not disputed that the option is
without consideration. It can therefore be withdrawn notwithstanding the acceptance made of it by
appellee (Southwestern Sugar and Molasses Company v. Atlantic Gulf and Pacific Co. 97 Phil. 241, 251-252
[1955]).

2) Adelfa Properties Inc vs CA GR 111238

- Exceptions to the rule (1) Contrary stipulation. The ownership of things is transferred by
delivery, and not by mere payment. However, the parties may stipulate that despite the delivery, the ownership
of the thing shall remain with the seller until the purchaser has fully paid the price. (see Art. 1503.)
In other words, non-payment of the price, after the thing has been delivered, prevents the transfer of
ownership only if such is the stipulation of the parties. This stipulation is usually known as pactum reservati
dominii or contractual reservation of title, and is common in sales on the installment plan.
A contract which contains this kind of stipulation is considered a contract to sell. The agreement may
be implied.
When earnest money is given, the buyer is bound to pay the balance, while the would-be buyer who
gives option money is not required to buy.

2) Contract of agency to sell (Art. 1466)

Case: Ker & Co Ltd. v. Lingad, 30 April 1971, 38 SCRA 524
- The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has
led to the establishment of rules by the application of which this difficulty may be solved. The
decisions say the
transfer of title or agreement to transfer it for a price paid or promised is the essence of
sale. If such transfer
puts the transferee in the attitude or position of an owner and makes him liable to
the transferor as a debtor for
the agreed price, and not merely as an agent who must account for the proceeds
of a resale, the transaction is
a sale; while the essence of an agency to sell is the delivery to an agent, not as
his property, but as the property
of the principal, who remains the owner and has the right to control sales, fix the
price, and terms, demand and
receive the proceeds less the agent's commission upon sales made.
-"Since the company retained ownership of the goods, even as it delivered possession unto the
dealer for resale to customers, the price and terms of which were subject to the company's control,
the
relationship between the company and the dealer is one of agency, ... .

3) Contract for a Piece of work (Arts. 1467, 1642, 1644)

4) Donation (Arts. 725, 1470, 1471)
Case: Gaite v. Fonacier, 31 July 1961, 2 SCRA 830
5) Barter or exchange (Arts. 1638 & 1468)
6) Bailment
7) Expropriation
F.

Transfer of ownership

The ownership of a thing sold is acquired by the vendee from the moment it is delivered to him. A thing sold
shall be understood as delivered when it is placed in the control and possession of the vendee (Art. 1496 in relation to
Art 1497, Civil Code) (Estate of Gonzales et al., v. Heirs of Perez, GR No. 169681, 05 November 2009).
Ownership of thing transferred by delivery This is true even if the purchase has been made on credit.
Payment of the purchase price is not essential to the transfer of ownership, as long as the property sold has been
delivered (Sampaguita Picturesvs Jalwindor Manufacturers, 93 SCRA 420).
Exceptions to the rule (1) Contrary stipulation. The ownership of things is transferred by delivery, and not by
mere payment. However, the parties may stipulate that despite the delivery, the ownership of the thing shall remain with
the seller until the purchaser has fully paid the price. (see Art. 1503). In other words, non-payment of the price, after the
thing has been delivered, prevents the transfer of ownership only if such is the stipulation of the parties. This stipulation is
usually known as pactum reservati dominii or contractual reservation of title, and is common in sales on the installment
plan. A contract which contains this kind of stipulation is considered a contract to sell. The agreement may be implied
(Adelfa Properties Inc vs CA, GR 111238).

II.

Parties, Requisites of the Contract and Form

A.

The vendor/seller and the vendee/buyer (Art. 1458)

B.

Requisites of validity
1)

Consent
a) sale is consensual
- sale by auction (Art. 1476)
- sale of large cattle (Act No. 1147, Sec. 22)
b) capacity of the parties
- relative incapacity
- absolute incapacity
- necessaries (Art. 194, Family Code)
Cases:1. Sotto v. Samson, 5 SCRA 733, 31 July 1962
- The conveyance of the property in litigation by the litigant to his counsel during the
existence of attorney-and-client relationship is void. The statute prohibiting such sale is designed to
undue influence of the lawyer upon his client on account of their confidential association.

curtail any

2. Maharlika Publishing v. Tagle, 142 SCRA 553

- The wife of the Chief of the Retirement Division of GSIS is prohibited from bidding for the
purchase of land foreclosed by the GSIS. The sale to her is void.

3. Uy Siu Pin v. Cantollas, 70 Phil 55

- The sale from Uy Siu Pin to his wife Chua Hue is null and void not only because the
former had no right to dispose of the land in controversy in view of the existence of the contract
because such sale comes within the prohibition of article 1458 of the Civil Code.

Exhibit A but

4. Medina v. CIR, 1 SCRA 303, 28 Jan. 1961

- Sales between husband and wife are void.

5. Cruz v. CA, 281 SCRA 491 (1997)

- The husband and the wife cannot sell property to each other; this sale is void. The
incapacity or prohibition applies to common law spouses.

2)

Object
a) It maybe existing, or future, or contingent
- emptio rei speratei and emptio spei
Case: Winkleman v. Veluz, 43 Phil 604, 03 July 1922

just the

- That the plaintiff's actual knowledge of the lease in question and of the stipulation that it
should stand in case the property was sold has, in this particular case and so far as she is concerned,
same effect as those of the registration of the said lease in registry of property.

b) It must be licit (Art. 1459)

- illicit per se
- illicit per accidens
c) It must be determinate, or at least determinable (Art. 1460)
- quantity (Arts. 1480, 1539, 1540, 1542, 1463, 1464, 493)
- quality [sale of goods by sample or description (Art. 1481)
Case: Melizza v. City of Ilo-ilo, 23 SCRA 477

- The requirement of the law that a sale must have for its objecta determinate thing, is
fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of being

made
CivilCode;

determinate without the necessity of a new or further agreement between the parties (Art. 1273, old
Art. 1460, New Civil Code).

d) Service is not proper object of sale; it is proper object of a

contract of labor (Arts. 1642 and 1700)
e) Risk of loss (Arts. 1493, 1494, 1163-1165, 1262, 1480, 1537,
1538)
What may be objects of sale?
1. Existing Goods owned/ possessed by seller at the time of perfection
2. Future Goods goods to be manufactured, raised, acquired by seller after perfection of the contract or
whose acquisition by seller depends upon a contingency (Art. 1462)
Note: Sale of future goods is valid only as an executory contract to be fulfilled by the acquisition & delivery of
goods specified.
3. Sale of Undivided Interest or Share
a. Sole owner may sell an undivided interest. (Art. 1463) Ex. A fraction or percentage of such property
b. Sale of an undivided share in a specific mass of fungible goods makes the buyer a co-owner of the entire
mass in proportion to the amount he bought. (Art. 1464)
c. A co-owner cannot sell more than his share (Yturralde v. CA)
4. Sale of Things in Litigation
a. Sale of things under litigation is rescissible if entered into by the defendant , without the approval of the
litigants or the court (Art. 1381)
b. No rescission is allowed where the thing is legally in the possession of a 3rd person who did not acted in bad
faith.
5. Things subject to Resolutory Condition.
Ex. Things acquired under legal or conventional right of redemption, or subject to reserva troncal. (Art. 1465)
6. Indeterminate Quantity of Subject Matter
The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract provided it
is possible to determine the same, without need of a new contract. (Art. 1349)

3)

Consideration
Case: 1) Inchausti v. Cromwell, 20 Phil 345, 16 Oct. 1911

- The word "price" signifies the sum stipulated as the equivalent of the thing sold and also
every incident taken into consideration for the fixing of the price, put to the debit of the vendee and
agreed to by
him. It is quite possible that the plaintiff, in this case in connection with the hemp which he sold, had
himself
already paid the additional expense of baling as a part of the purchase price which he paid and that
he himself
had received the hemp baled from his vendor. It is quite possible also that such vendor of
the plaintiff may have
received the same hemp from his vendor in baled form, that he paid the additions
cost of baling as a part of the
purchase price which he paid. In such case the plaintiff performed no service
whatever for his vendee, nor did
the plaintiff's vendor perform any service for him.

2) Montecillo v. Reynes, 385 SCRA 244, 26 July 2002

will not

- In contract of sale, the parties must agree not only on the price but alos on the manner of
payment of the price. An arrangement on the price but a disagreement on the manner of its payment
result in consent, thus preventing the existence of a valid contract for lack of consent.

3) Boston Bank v. Manalo, 482 SCRA 108, 09 Feb. 2006

paid to the

- For a perfected contract of sale or contract to sell to exist in law, there must be an
agreement of the parties in the price of the property sold, but also in the manner the price is to be
vendee.

4) Modina v. CA, G.R. No. 109355. October 29, 1999

contract is that
juridical effects
contract by accion
enforce the transfer.

- Under Article 1409] of the New Civil Code, enumerating void contracts, a contract
without consideration is one such void contract. One of the characteristics of a void or inexistent
it produces no effect. So also, inexistent contracts can be invoked by any person whenever
founded thereon are asserted against him. A transferor can recover the object of such
reivindicatoria and any possessor may refuse to deliver it to the transferee, who cannot

a) It must be in money or its equivalent (Arts. 1458, 1468 1636)

b) It must be actual (Arts. 1470 and 1471)
c) It must be certain or ascertainable at time of perfection of
contract (Arts. 1469, 1472, 1473 and 1474)
d) Payment term
-earnest money vs. option money (Art. 1482)
5

Cases: 1) Eulogio v. Sps. Apeles, GR No. 167884, 20 Jan. 2009

- An option is a contract by which the owner of the property agrees with another person that
the latter shall have the right to buy the formers property at a fixed price within a certain time. It is a condition
offered or contract by which the owner stipulates with another that the latter shall have the right to buy
the
property at a fixed price within a certain time, or under, or in compliance with certain terms and
conditions; or
which gives to the owner of the property the right to sell or demand a sale. An option is not
of itself a purchase,
but merely secures the privilege to buy. It is not a sale of property but a sale of the right to
purchase. It is simply
a contract by which the owner of the property agrees with another person that he shall have
the right to buy his
property at a fixed price within a certain time. He does not sell his land; he does not then
agree to sell it; but he
does sell something, i.e., the right or privilege to buy at the election or option of
the other party. Its
distinguishing characteristic is that it imposes no binding obligation on the person
holding the option, aside from
the consideration for the offer.

2) Laforteza v. Machuca, 16 June 2000, 333 SCRA 643

- Failure to comply with the condition imposed upon the perfection of the contract
the failure of a contract, while failure to comply with a condition imposed on the performance of an
only gives the other party the option to either refuse to proceed with the sale or to waive the

results in
obligation
condition.

- Earnest money is something of value to show that the buyer was really in earnest, and
given to the seller to bind the bargain, and whenever earnest money is given in a contract of sale, it is
considered part of the purchase price.

3) San Miguel Properties v. Huang, 336 SCRA 737, 31 July

2000
- Option giving respondents the exclusive right to buy the properties within the period
agreed upon is separate and distinct from the contract of sale which the parties may enter.
- Consideration in an option contract may be anything of value, unlike in sale where it must
be the price certain in money of its equivalent.
- The manner of payment of the purchase price is an essential element before a valid and
binding contract of sale can exist.
- It is not the giving of earnest money, but the proof of the concurrence of all the elements
of the contract of sale which establishes the existence of a perfected sale.

4) Limson v. CA, 357 SCRA 209, 20 April 2001

- An option, as used in the law of sales, is a continuing offer or contract by which the owner
stipulates with another that the latter shall have the right to buy the property at a fixed price within a time
certain, or under, or in compliance with, certain terms and conditions, or which gives to the owner of the
property the right to sell or demand a sale. It is also sometimes called an "unaccepted offer." An option is not of
itself a purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to
purchase. It is simply a contract by which the owner of property agrees with another person that he shall have
the right to buy his property at a fixed price within a certain time. He does not sell his land; he does not then
agree to sell it; but he does sell something, i.e., the right or privilege to buy at the election or option of the other
party. Its distinguishing characteristic is that it imposes no binding obligation on the person holding the option,
aside from the consideration for the offer. Until acceptance, it is not, properly speaking, a contract, and does not
vest, transfer, or agree to transfer, any title to, or any interest or right in the subject matter, but is merely a
contract by which the owner of the property gives the optionee the right or privilege of accepting the offer and
buying the property on certain terms.
- "Earnest money" and "option money" are not the same but distinguished thus: (a) earnest
money is part of the purchase price, while option money is the money given as a distinct consideration for an
option contract; (b) earnest money is given only where there is already a sale, while option money applies to a
sale not yet perfected; and, (c) when earnest money is given, the buyer is bound to pay the balance, while when
the would-be buyer gives option money, he is not required to buy, but may even forfeit it depending on the terms
of the option.

5) Navarro v. Sugar Producers, 1 SCRA 1180, 29 April 1961

- An accepted unilateral promise to sell, not supported by any consideration distinct from
the price, does not produce a binding and enforceable contract of sale.

e)
C.

Form (and recording or registration)

1)

(consummated) or
not forbid oral

Buyer bears expenses for execution of the sale unless there

is a contrary stipulation (Art. 1487).

Statute of frauds (Art. 1483)

The Statute of Frauds is applicable only to executory contracts (where no performance, i.e., delivery
and payment, has as yet been made by both parties) and not to contracts which are totally
partially performed. (see Vda. de Espiritu vs. CFI of Cavite, 47 SCRA 354 [1972]) It does
evidence to prove a consummated sale. (Diama vs. Macalebo, 74 Phil. 70 [1942].)

Case: Interprovincial Autobus v. CIR, 98 Phil 290, 31 Jan. 1956

- The term bill of lading is frequently defined, especially by the order authorities, as a writing signed
by the master of a vessel acknowledging the receipt of goods on board to be transported to a certain part and there
delivered to a designated person or on his order. This definition was formulated at a time when goods were principally

transported by sea and, while adequate in view of the conditions existing at that early day, is too narrow to suit present
conditions. As comprehending all methods of transportation, a bill of lading may be defined as a written acknowledgment
of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his
order. Such instruments are sometimes called shipping receipts, forwarders receipts and receipts for transportation.
The designation, however, is not material, and neither is the form of the instrument. If it contains an acknowledgment by
the carrier of the receipt of goods for transportation, it is, in legal effect, a bill of lading. (9 Am. Jur. 662, Italics supplied.)

2)
III.

IV.

Documents of title (Art. 1636)

Implied Obligations of the Parties

A.

Obligations of the Seller (Arts. 1537, 1495, 1163, 1494, 1521[5], 1545,
1487)

B.

Obligations of the Buyer (Arts. 1582[1], 1589, 1584)

Performance by the Seller of His Obligations

A.

To deliver a determinate thing (Art. 1497)

Case: Aviles v. Arcega, 44 Phil 924, 18 Sep. 1922

V.

VI.

B.

To Transfer ownership of a thing (Arts. 1477, 1496, 1459, 559, 1189, 1505,
1506, 1478, 1504)

C.

Warranties
1)

Express warranties (Arts. 1340, 1341, 1546)

2)

Implied warranties (Arts. 1564, 1561)

Performance by the Buyer of His Obligations

A.

Pay a price certain in money or its equivalent (Arts. 1458, 1582)

B.

Inspection of the good sold (Art. 1584 [1])

C.

Acceptance of the goods sold (Arts. 1586-1588)

Breach by the Seller and Remedies of the Buyer

(Arts. 1598, 1191, 1545, 1481, 1522, 1521, 1539, 1540, 1542[1], 1544,
1590)

VII.

Breach by the Buyer and Remedies of the Seller

(Arts. 1191, 1591, 1593, 1526, 1531, 1530, 1533, 1534, 1527, 1528,1484,
1485, 1486)
- The Recto Law and the Maceda Law

payment of the
instalment as
[1939]).

62 Phil.
Corp., 23
Finance Corp.
[1985]).

Sale of personal property not payable in installments. Article 1484 does not apply to a sale of
personal property on straight term or partly in cash and partly in term. Where the balance, after
initial sum, should be paid in its totality at the time specified, the transaction is not by
contemplated in Article 1484.(Levi Hermanos, Inc. vs. Gervacio, 69 Phil. 52
These remedies are alternative and are not to be exercised cumulatively or successively and the
election of one is a waiver of the right to resort to the others (Pacific Commercial Co. vs. De la Rama,
380 [1935]; Erlanger & Galinger, Inc. vs. Flor, [C.A.] 57 O.G. 482; Cruz vs. Filipinas Invest. & Finance
SCRA 791 [1968]; Filipinas Invest. & Finance Corp. vs. Ridad, 30 SCRA 564 [1969]; Industrial
vs. Tobias, 78 SCRA 28 [1977]; Nonato vs. Intermediate Appellate Court, 140 SCRA 255

The remedy of rescission is not available in contracts to sell (Diego v. Diego, 691 SCRA 361, 20
February 2013).
In a contract of sale, the vendor cannot recover the thing sold even if the vendee failed to pay in full
the initial payment for the property. The failure of the buyer to pay the purchase price within the
stipulated
period does not by itself bar the transfer of ownership or possession of the property sold,
ipso facto rescind the
contract. Such failure will merely give the vendor the option to rescind the
contract of sale judicially or by
notarial demand as provided for by Article 1592 of the New Civil Code.
Under 1590 of the New Civil Code, a vendee may suspend the payment of the price of the property
sold (Arra Realty Corp. v. Guarantee Dev't. Corp. and Insurance Agency, GR No. 142310, 20
September 2004).

Cases: 1) Cruz v. Filipinas Investment, 23 SCRA 791, 27 May 1968

- Should the vendee or purchaser of a personal property default in the payment of two or more of the agreed
installments, the vendor or seller has the option to avail of any one of these three remedies either to exact fulfillment by
the purchaser of the obligation, or to cancel the sale, or to foreclose the mortgage on the purchased personal property, if
one was constituted. These remedies have been recognized as alternative, not cumulative, that the exercise of one would
bar the exercise of the others. It may also be stated that the established rule is to the effect that the foreclosure and actual
sale of a mortgaged chattel bars further recovery by the vendor of any balance on the purchaser's outstanding obligation
not so satisfied by the sale.

2) Luneta Motor Co. v. Dimagiba, 3 SCRA 884, 30 December 1961

- Vendor cannot avail of the three remedies under Art. 1484 at the same time.

3) Cagayan Communities, Inc. v. Sps. Nanol, GR No. 176791, 14 Nov.

2012
- Until and unless the seller complies with the twin requirements of notarized notice of cancellation and refund of
the cash surrender value, the contract to sell between the parties remain valid and subsisting.

VIII.

Extinguishment of Contracts of Sale

(Arts. 1600 to 1623)

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