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Arts.

1539-1547
SALE OF IMMOVABLES [Arts. 1539, 1543]
(a) Sale at a fixed rate per unit of measure
(i) Seller bound to deliver entire land, i.e., the entire area stated in the contract
(ii) If the area is less than that stated, buyer may rescind or demand a proportionate
reduction in price
(iii) If a part of the land is not of the quality stated in the contract, buyer may
rescind or demand a proportionate reduction in price
(iv) Buyer may only avail of rescission if the area deficiency is 10% or more of total
area or if the inferior value of the part of the land exceeds 10% of the price agreed
upon. [Art. 1539]
(v) If the area turns out to be greater than that stated, buyer may accept area
included and reject the excess or accept all and pay a proportionate increase in
price [Art. 1540]
(b) Sale for a lump sum
(i) Follows the same rule as the sale of a specific mass which is explained above
(ii) There is no change in price even if area or number turns out to be greater or
lesser than that stated [Art. 1542]
Exception: when the excess or deficiency is no longer reasonable [Asian v Jalandoni,
1923: 644 m2 was unreasonable]
Exception to the exception: when buyer expressly assumes risk on actual area of
the land. [Garcia v Veloso, 1941]
(iii) If the price per unit or measure is not provided for in the contract, then the rules
of lump sum sale should prevail. [Sta. Ana v Hernandez, 1966] If sale for lump sum,
the cause of the contract is the thing sold, independent of number/measure. The
law presumes that the purchaser had in mind a determinate price for real estate
and the ascertained area and quality. The purchaser intended to buy thing in
entirety, not just any unit of measure or number. [De Leon] When there is conflict
between the area stipulated in the contract, the area included within the stipulated
boundaries prevails, provided such boundaries are certain, and no alteration thereof
has been proven.
DOUBLE SALES
General Rule: Prior tempore, potior jure (he who is first in time is preferred in
right) applies.
Requisites [Cheng v Genato, 1998]: (1) 2 or more valid sales; (2) Same subject
matter; (3) 2 or more buyers with conflicting interests at odds over the rightful
ownership of the thing sold; (4) Same seller

RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND UNREGISTERED


LANDS
(1) Sale of Movables Ownership shall be transferred to the person who may have
first taken possession in good faith.
(2) Immovables (a) Ownership belongs to the person who: (i) In good faith first
recorded it in the Registry of Property; OR (ii) If there is no inscription, ownership
passes to the person who in good faith was first in possession; OR (iii) In the
absence thereof, to the person who presents the oldest title, PROVIDED there is
good faith.
Oldest Title any public document showing acquisition of the land in good faith.
To constitute title, the transmission of ownership must appear in a public
document [Art. 1358 (1)]
Examples: Deed of Sale, Deed of Donation, Deed of Trust
(b) Registration includes any entry made in the Primary Entry Book of the registry,
including both registration in its ordinary and strict sense and cancellation,
annotation, and even marginal notes. [Cheng v. Genato, 1998] i. Pencilled entries on
the title are not considered registration [AFPMBAI v. Court of Appeals, 1999].
(3) Sale by Virtue of Execution and Attachment Art. 1544 does NOT apply to the sale
of unregistered land at an execution sale because a buyer of unregistered land at an
execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latter's interest in the property sold as of the time the property was
levied upon. [Carumba v. CA, 1970] (a) Unregistered by both buyers: the first sale is
preferred (b) Registered by both buyers: the second sale is preferred (c) If the first
buyer did not register but the second buyer registered property, then the first buyer
is preferred.
(4) Sale of Unregistered Land (a) Instrument or deeds establishing, transmitting,
acknowledging, modifying or extinguishing rights with respect to lands not
registered under the Land Registration Act or the Spanish Mortgage Law, are
required to be registered in the Registry of Property to prejudice 3rd persons,
although such registration is understood to be w/o prejudice to a 3rd party with a
better right. [PD 1528 Sec 113] (b) Art. 1544 applies to unregistered land subject
to a conventional sale (because of Art. 1358) but NOT to unregistered land subject
to judicial sale. (c) Unregistered by both buyers, the first buyer is preferred. (d) If
first buyer did not register but second buyer registerd property, second buyer is
preferred.
Warranties
A statement or representation made by the seller contemporaneously and as part of
the contract of sale, having reference to the character, quality, or title of the goods,
and by which he promises or undertakes to ensure that certain facts are or shall be
as he then represents.

Not every false representation voids the contract, only those matters substantially
affecting the buyers interest, not matters of opinion, judgment, probability, or
expectation. When the buyer undertakes his own investigation, and the seller does
nothing to prevent it from being as full as the buyer chooses, the buyer cannot
afterwards allege misrepresentations. [Songco v. Sellner (1917)]

EXPRESS WARRANTIES
For there to be express warranty, the following requisites must concur: (APIR) (1) An
affirmation of fact or any promise relating to the thing sold; (2) The natural
tendency of such affirmation or promise is to induce the buyer to buy; (3) The buyer
buys the thing relying thereon. [Art. 1546] (4) Made before the sale not upon
delivery or any other point
An express warranty can be made by and also be binding on the seller even in the
sale of a second hand article. [Moles v. IAC, 1989]
IMPLIED WARRANTIES
An implied warranty is derived by law by implication or inference from the nature of
the transaction or relative situation, or circumstances of the parties, irrespective of
any intention of the seller to create it.[De Leon]
(TODS) (1) Implied Warranty of Title (2)Implied Warranty against Encumbrance/ NonApparent Servitudes (3) Implied Warranty against Hidden Defects [Art. 1547] (a)
Implied warranty as to Merchantable Quality and Fitness of Goods (b) Implied
warranty against Redhibitory Defect in the Sale of Animals [Art. 1572] (c) Quality
and Fitness of Goods in Sale by Sample or Description (4) Other Warranties