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CHAPTER 1
NATURE AND FORM OF THE CONTRACT
(ARTS. 1458-1637)
ARTICLE 1458
CONCEPT OF CONTRACT OF SALE
-contract of sale is a contract whereby one of the contracting
parties (SELLER) obligates himself to transfer the ownership and to deliver a
determinate thing, and the other party (BUYER) obligates himself to pay a
sum of money or its equivalent (PRICE)
CHARACTERISTICS OF A CONTRACT OF SALE
1. CONSENSUAL- it is perfected by mere consent of the parties.
2. BILATERAL- the parties are bound by reciprocal obligations
SELLER- to deliver and transfer ownership of the thing sold
BUYER- to pay the price
3. ONEROUS- the thing sold is conveyed in consideration of the price.
4. COMMUTATIVE- the thing sold is considered the equivalent of the
price paid
(the contract may be ALEATORY- depending on an uncertain
event or contingency)
5. NOMINATE- it has a special name given to it by law namely SALE
6. PRINCIPAL- it can exist by itself without being dependent upon
another contract.
ELEMENTS OF A CONTRACT OF SALE
1. ESSENTIAL ELEMENTS/ REQUISITES
A. CONSENT OR MEETING OF THE MINDS
-It refers to the consent on the part of the SELLER to transfer
and deliver and on the part of the buyer to pay the
price.
-The parties must have legal capacity to give consent and to
obligate themselves.
-when there is an offer of one party, without the acceptance of
the other, THERE IS NO CONSENT
B. OBJECT OR SUBJECT MATTER
- It refers to the determinate thing which is the object of the
contract.
- If the seller and the buyer differ in regard to the thing sold,
there is no meeting of the minds therefore, there is
no sale
C. CAUSE OR CONSIDERATION
-It refers to the price certain in money or its equivalent
ARTICLE 1460
SUBJECT MATTER MUST BE DETERMINATE
1. WHEN THING DETERMINATE
-A thing is determinate or specific when it is particularly
designated or physically segregated from all others of the same class.
In accordance with the general rule that the object of every contract
must be determinate as to its kind.
-it is identified by its individuality
Ex: the watch I am wearing, my car
2. SUFFICIENT IF SUBJECT MATTER CAPABLE OF BEING MADE
DETERMINATE
-it is sufficient that the thing is determinable or capable of being
made determinate without the necessity of a new or further agreement
between the parties to ascertain its identity, quantity, or quality. It
cannot be known what may have been sold; the contract shall be null
and void.
ARTICLE 1461
SALE OF THINGS HAVING POTENTIAL EXISTENCE
-future thing not existing at the time the contract is entered into, may
be the object of sale provided it has a potential or possible existence. It
is reasonably certain to come into existence as the natural increment
or usual incident of something in existence already belonging to the
seller, and the title will vest in the buyer the moment the thing comes
into existence. The thing sold, however must be specific and identified
and it must be also owned by the vendor at the time.
SALE OF HOPE OR EXPECTANCY
The sale refers to an expected thing which is not yet in existence,
and not to the hope or expectancy which is already exists, in view of
the condition that the thing will come into existence, But the SALE OF
HOPE OR EXPECTANCY itself is valid even if the thing hoped or
expected does not come into existence, unless the hope or expectancy
is VAIN, in which case the sale is void.
ARTICLE 1462
GOODS WHICH MAY BE THE OBJECT OF SALE
Goods which form the subject of a contract of sale may be either:
a. EXISTING GOODS OWNED OR POSSESSED BY THE SELLER
ex: the sale of bathroom fixtures currently stored in the
sellers
warehouse is a sale of existing
goods
b. FUTURE GOODS OR GOODS TO BE MANUFACTURED, RAISED
OR ACQUIRED
BY THE SELLER
EXAMPLES:
MANUFACTURED- like the sale of milk bottles to be manufactured
with the name of the buyer pressed in the glass
RAISED- sale of chickens that may be raised in a poultry farm and
sale of the future harvest of palays from a ricefield
IN SALE:
*the
*the
*the
*the
*the
owner
IN AGENCY TO SELL:
*the agent receives the goods as the goods of the principal who
retains his
ownership over them.
*the agent simply to account for the proceeds of the sale he may
make on
the principal behalf;
*the agent can return the object in case he is unable to sell the
same to a
third person; and
*the agent makes no warranty for which he assumes personal
liability as
long as he acts within his authority and in the
name of the seller;
*the agent in dealing with the thing received, must act and is
bound
according to the instructions of his
principal
ARTICLE 1467
SALE DISTINGUISHED FROM CONTRACT FOR A PIECE OF WORK
-a contract for a piece of work, the contractor binds himself to
execute a piece of work for the employer, in consideration of a certain
price or compensation
CONTRACT OF SALE
-which the vendor in the ordinary course of business
manufactures or procures for the general market, whether the same is
on hand or not.
(within the statute of frauds)
CONTRACT FOR A PIECE OF WORK
-if the goods are manufactured specially for the customer and
upon his special order, and not for the general market.
(are not within the statute of frauds)
RISK OF LOSS
ARTICLE 1470
EFFECT OF GROSS INADEQUACY OF PRICE IN VOLUNTARY SALES
-gross adequacy does not affect a contract of sale, except as it may
indicate a defect in the consent, or that the parties really intended a
donation or some other act or contract.
EFFECT OF GROSS INADEQUACY OF PRICE IN VOLUNTARY OR EXECUTION
SALES
1. GENERAL RULE
Judicial or execution sale is one made by a court with respect to
the property of a debtor for the satisfaction of his unpaid indebtedness.
2.WHERE PRICE IS SO LOW AS TO BE SHOCKING TO THE
CONSCIENCE
A judicial sale, say of real property will be set aside by the court.
3.WHERE SELLER GIVEN THE RIGHT TO REPURCHASE
-the validity of the sale is not necessarily affected where the law
gives to the owner the right to redeem, as when a sale is made at
public auction, upon the theory that the lesser the price, the easier it is
for the owner to buy back the property.
ARTICLE 1471
EFFECT WHERE THE PRICE SIMULATED
1. IF THE PRICE IS SIMULATED OR FALSE
Then the sale is void but the contract shall be valid as a donation
2. IF THE CONTRACT IS NOT SHOWN TO BE DONATION OR ANY OTHER
ACT OR CONTRACT TRANSFERRING OWNERSHIP
-because the parties do not bound at all the ownership of the
thing is not transferred. The contract is void and inexistent
ARTICLE 1472
PRICE ON A GIVEN DAY AT PARTICULAR MARKET
-It follows the principle in ARTICLE 1469 that price is considered if it
could be determined with reference to another thing certain
-provided said amount be certain when an amount is fixed ABOVE or
BELOW the price on a given day or in a particular exchange or market,
the said amount must be certain, otherwise THE SALE IS
INEFFICACIOUS because the price cannot be determined.
-this article is applicable to fungible things, the prices of which are
subject to fluctuations of the market.
ARTICLE 1473
FIXING OF PRICE BY ONE OF THE CONTRACTING PARTIES NOT ALLOWED
2. NO PRICE STIPULATED
-in such case, the sale is void and non-existent as without cause
or consideration. Of course, if there is no stipulation or meeting of
minds regarding the purchase price, there is no contract of sale.
ARTICLE 1476
RULES GOVERNING AUCTION SALES
1. SALES OF SEPARATE LOTS BY AUCTION ARE SEPARATE SALES
Each lot is the subject of a separate contract of sale.
2. SALE PERFECTED BY THE FALL OF THE HAMMER
-the seller is making an invitation to those present to make offers
which they do by making bids, one of which is ultimately accepted. It
follows that the bidder may retract his bid and the auctioneer may
withdraw the goods from sale any time before the hammer falls.
However, if the sale has been announced to be without reserve, the
auctioneer cannot withdraw the goods from sale once a bid has been
made and the highest bidder has a right to enforce his bid
3. RIGHT OF THE SELLER TO BID IN THE AUCTION
The seller or his agent may bid in an auction sale provided:
1. such right was reserved
2. notice was given that the sale is subject to a right to bid
in
behalf of the seller; and
3. the right to bid by the seller is not prohibited by law or
stipulation
a. WHEN NO NOTICE GIVEN OF RIGHT TO BID
it shall be unlawful for the seller to bid either
directly or indirectly or for the
auctioneer to employ
or induce any person to
bid on behalf of the seller.
The purpose of
the notice is to prevent puffing or
secret
bidding by or on behalf of the seller by people
who are not themselves bound
b. WHEN NOTICE GIVEN OF RIGHT TO BID
a right to bid may be expressly reserved by or
on
behalf of the seller. It is, therefore, the secrecy
of
puffing which renders it a fraud upon
bidding. Where
there is notice of the intention to
bid by the seller,
the bidding in such case
would not operate as fraud.
ARTICLE 1477-1478
OWNERSHIP OF THE THING TRANSFERRED BY DELIVERY
-delivery of the thing sold is essential in a contract of sale, without it
the buyer may not enjoy the thing sold to him. After the delivery of the
thing sold that the buyer acquires a real right or ownership over it.
-delivery may be actual or constructive
EXCEPTION TO THIS RULE
-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.
ARTICLE 1479
1. SALE BY DESCRIPTION
-where a seller sells things as being of a particular kind, where
the purchaser has not seen the article sold and relies on the
description given him by the vendor. If the bulk of the goods delivered
do not correspond with the description, the contract may be rescinded.
2. SALE BY SAMPLE
-in a sale by sample, the seller warrants that the thing sold and
to be delivered by him shall conform with the sample in kind,
character, and quality.
3. SALE BY DESCRIPTION AND SAMPLE
-when a sale is made both by sample and by description, the
goods must satisfy all the warranties appropriate to either kind of sale,
and it is not sufficient that the bulk of the goods correspond with the
sample if they do not correspond with the description and vice versa.
ARTICLE 1482
MEANING OF EARNEST MONEY
-is money given by the buyer to the seller to bind the bargain. It is
actually a partial payment of the purchase price and is considered
as a proof of the perfection of the contract.
-advance payment it must be deducted from the total price
EARNEST MONEY AND OPTION MONEY DISTINGUISHED
EARNEST MONEY
-is part of purchase price
-is given only where there is already a sale
-when earnest money is given, the buyer is bound to pay the
balance
OPTION MONEY
-is the money given as distinct consideration for the option
contract
-applies to a sale not yet perfected
-while when the would-be buyer gives option money, he is not
required to buy.
BUT OPTION MONEY MAY BECOME EARNEST MONEY, IF THE PARTIES
SO AGREE.
ARTICLE 1483
FORM OF CONTRACT OF SALE
1. GENERAL RULE
-a contract may be entered into in any form provided all
the essential requisites for its validity are present.
-the vendor has the duty to pay not only the expenses for the
execution of the sale but also for the registration of the same in the absence
of any agreement between the parties to the contrary.
-expenses incurred subsequent to the transfer of title are borne by the
buyer, unless caused by the fault of the seller.
ARTICLE 1488
EXPROPRIATION OF PROPERTY FOR PUBLIC USE
-it covers the procedure for the exercise of the power of eminent
domain. Expropriation must be decreed by competent authority and for
public use and always upon paymentof just compensation.
______________________________________________________________________________
____________________________________CHAPTER 2
CAPACITY TO BUY AND SELL
ARTICLE 1489
PERSON WHO MAY ENTER INTO A CONTRACT OF SALE
General rule: all persons, whether natural or juridical, who can bind
themselves
by contract have also legal capacity to
buy and sell.
Exceptions: when the law determines that party suffers from either
absolute or
relative incapacity.
KINDS OF INCAPACITY
Absolute incapacity- in the case of persons who cannot bind
themselves; and
Relative incapacity- where it exists only with reference to certain
persons or a
certain class of property
LIABILITY FOR NECESSARIES OF MINOR OR OTHER PERSON WITHOUT
CAPACITY TO ACT
Necessaries are those things which are needed for sustenance,
dwelling, clothing and medical attendance, in keeping with the financial
capacity of the family of the incapacitated person.
-generally, the contracts entered into by a minor and other
incapacitated persons are voidable. However, where necessaries are sold
and delivered to him (without intervention of the parent or guardian) he must
pay a reasonable price therefor, the contract is valid, but the minor has the
right to recover any excess above a reasonable value paid by him.
SALE BY MINORS
-when the minors pretend that they are now in adult age while in fact
they have not, the sale is valid. They cannot be permitted to excuse
themselves from compliance with the obligations assumed by them or to
seek their annulment.
ARTICLE 1490
RELATIVE INCAPACITY OF HUSBAND AND WIFE
1. they are prohibited by the article 1490 from selling property to each
other.
2. they are also prohibited from making donations to each other during
the marriage except moderate gifts on the occasion of any family rejoicing. If
there has been a separation of property agreed upon in the marriage
settlements, or when there has been a judicial separation of property
decreed between them by the court, THE SALES BETWEEN THEM, ARE
ALLOWED.
REASON FOR PROHIBITION UNDER ARTICLE 1490
-the possibility that the husband will induce his wife to engage in
ruinous operations. The prohibition is primarily for the protection of 3rd
person who relying upon supposed property of either spouse enters into a
contract with either of them only to find out that the property relied upon
was transferred to the other spouse.
PERSONS PERMITTED TO QUESTION SALE
1. the heirs of either spouse, as well as creditors at the time of the
transfer, can attack the validity of the sale but not creditors who became
such only after the transaction
2. the government
ARTICLE 1491
INCAPACITY BY REASON OF RELATION TO PROPERTY
-the persons who, because of their position and relation with the
persons under their charge or property under their control, are prohibited
from acquiring said property under their control.
They are the: guardians, agents, executors and administration, public
officers and employees; judicial officers and employees and lawyers and
others especially disqualified by law.
REASON FOR PROHIBITION
-is to prevent frauds on the part of the persons enumerated therein
and minimize temptations to the exertion of undue and improper influence.
OTHER PERSONS ESPECIALLY DISQUALIFIED
1. aliens who are disqualified to purchase private agricultural lands
2. unpaid seller, having a right of lien or having stopped the goods in
transit
3. the officer conducting an execution sale of property to enforce a
court
judgment rendered against the owner.
ARTICLE 1492
PROHIBITION IN EXTENDS TO SALE IN LEGAL REDEMPTION
1. COMPROMISE-is a contract whereby the parties, by reciprocal
concessions, avoid a litigation or put an end to one already commenced. It is
the amicable settlement of a controversy.
2. by renunciation- a creditor gratuitously abandons his right against
his creditor. The other terms used by the law are condonation and remission.
ARTICLE 1493
EFFECT OF LOSS OF THING AT THE TIME OF SALE
1. THING ENTIRELY LOST
ARTICLE 1494
EFFECT OF LOSS IN CASE OF SPECIFIC GOODS
-ARTICLE 1494 applies only to sales of goods, that is, the object of the
sale consists of a mass of specific goods
2 remedies to the buyer:
1. SALE DIVISIBLE- a contract is DIVISIBLE when its
consideration is
made up of several parts.
2. SALE INDIVISIBLE- when the consideration is entire and
single.
The object may be considered as a
specific thing.
CHAPTER 4
OBLIGATIONS OF THE VENDOR
ARTICLE 1495
PRINCIPAL OBLIGATIONS OF THE VENDOR
1. to transfer the ownership
2. to deliver the thing
3. to warrant against eviction and hidden defects
4. to take care of the thing, pending delivery, with proper diligence
5. to pay for the expenses for the execution and registration of the
deed of sale,
unless there is a stipulation to the contrary
ARTICLE 1496
WAYS OF EFFECTING DELIVERY
1. BY ACTUAL OR REAL DELIVERY
2. BY CONSTRUCTIVE OR LEGAL DELIVERY
3. BY DELIVERY IN ANY OTHER MANNER SIGNIFYING AN AGREEMENT
WAYS OF EFFECTING CONSTRUCTIVE DELIVERY
1. EQUIVALENT TO ACTUAL DELIVERY
It may be effected in any of the following ways:
a. by the execution of public instrument
b. by symbolica tradition/ tradition symbolica
c. by traditio longa manu
d. by tradition brevi manu
e. by tradition constitutum possessorium
or
f. by quasi-delivery or quasi-traditio
2. CONTRARY MAY BE STIPULATED
to the
conditions.
The parties may stipulate that ownership in the thing shall pass
buyer only after he has fully paid the price or fulfilled
-it takes place when the vendor continues in possession of the property
sold as owner but in some other capacity, as for example, when the vendor
stays as a tenant on the vendee.
ARTICLE 1501
QUASI-TRADITIO/ QUASI-DELIVERY
Tradition can only be made with respect to corporeal things. In case of
incorporeal things, delivery is effected:
1. by the execution of a public instrument
2. by the placing of the titles of ownership in the possession of the
vendee,
3. by allowing the vendee to use his rights as new owner with the
consent of the
vendor
Thus, the delivery to a person of a negotiable document of title in
which it is stated that the goods referred to therein will be delivered to the
bearer amounts to delivery of the goods to such person.
ARTICLE 1502
CONTRACTS OF SALE OR RETURN, AND OF SALE ON TRIAL OR APPROVAL OR
SATISFACTION
1. SALE OR RETURNthe buyer has an option to purchase or return
the same to the seller instead of paying the price. Without reference to the
quality of goods,
2. SALE ON TRIAL OR APPROVAL- the buyer has an option to purchase
the if the goods prove satisfactory. The title shall continue in the seller until
the sale has become absolute either by the buyers approval of the goods, or
by his filing to comply with the express or implied conditions of the contract
as to giving notice of dissatisfaction.
SALE OR RETURN DISTINGUISHED FROM SALE ON TRIAL
SALE OR RETURN
1. subject to resolutory condition
2. depends entirely on the will of the buyer
3. the ownership of the goods passes to the buyer on delivery
and
subsequent return of the goods reverts
ownership in the seller
4. the risk of loss or injury rests upon the buyer
SALE ON TRIAL
1.subject to suspensive condition
2. depends on the character or quality of the goods
3. the ownership remains in the seller until the buyer signifies his
approval or acceptance to the
seller
4. the risk still remains with the seller
ARTICLE 1503
DELIVERY OF SPECIFIC GOODS SOLD GENERALLY PASSES TITLE
-this article relates to a sale of specific goods
1. DELIVERY TO A CARRIER
General rule: if the thing is lost by fortuitous event the risk is borne by
the owner of the thing at the time of the loss
Exceptions:
1. The ownership is considered transferred to the buyer who,
therefore, assumes the risk from the time of delivery.
2. Where actual delivery has been delayed through the fault of
either the buyer or the seller. In this case, the law punishes the party at fault.
RISK OF LOSS BY FORTUITOUS EVENT AFTER PERFECTION BUT BEFORE
DELIVERY
-if the thing is lost after perfection of the contract but before its
delivery, even before the ownership is transferred to the buyer, the risk of
loss by a fortuitous event without the sellers fault is borne by the buyer.
Taken from the American Law on Sales it provides that Unless otherwise
agreed, the goods remain at the sellers risk until the ownership therein is
transferred to the buyer the risk of loss is shifted from the seller to the
buyer even though the buyer has not yet acquired ownership thereof, this
conflict can only be resolved by legislation.
ARTICLE 1505
SALE BY THE PERSON NOT THE OWNER
1. WHERE THE OWNER OF THE GOODS IS, BY HIS CONDUCT,
PRECLUDED FROM DENYING THE SELLERS AUTHORITY TO SELL
Where a property is sold by one not the owner or the agent of
the owner, but the real owner states that he authorized such sale so that the
vendor was acquitted of the charge against him, a buyer in good faith
acquires a valid title to the property as it is not lawful nor permissible for said
owner to deny or retract his former sworn statement that he had consented
to said sale
2. WHERE THE LAW ENABLES THE APPARENT OWNER TO DISPOSE OF
THE GOODS
AS IF HE WERE THE TRUE OWNER
THEREOF
-has no such law as the Factors Act. The law referred to here,
therefore, must
be found in the provisions of our Civil
Code on Agency.
3. WHERE THE SALE IS SANCTIONED BY STATUTORY OR JUDICIAL
AUTHORITY
- one who has lost any movable, or has been unlawfully deprived
thereof, may recover it from the person in possession of the same. If the
possessor of a movable lost or of which the owner has unlawfully been
deprived has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefore.
4. WHERE THE SALE IS MADE AT MERCHANTS STORES, FAIRS, OR
MARKETS
-the rule is necessary not only to facilitate commercial sales on
movables but also to give stability to business transactions especially in our
country where free enterprise prevails for a buyer.
5.WHERE THE SELLER HAS A VOIDABLE TITLE WHICH HAS NOT BEEN
AVOIDED AT THE TIME OF SALE
ARTICLE 1510
NEGOTIABLE DOCUMENTS OF TITLE MARKED NON-NEGOTIABLE
-the words not negotiable, non negotiable and the like when placed
upon a document of title in which the goods are to be delivered to order or
to bearer have no effect and the document continues to be negotiable.
ARTICLE 1511
TRANSFER OF NON-NEGOTIABLE DOCUMENTS
-a non-negotiable of title cannot be negotiated. It can be transferred or
assigned by delivery. In such case, the transferee or assignee acquires only
the rights stated in Article 1514
-even if the document is indorsed, the transferee acquires no
additional right.
ARTICLE 1512
PERSONS WHO MAY NEGOTIATE A DOCUMENT
-it will be noticed that the provision does not give a power to negotiate
documents of title equal to that allowed in the case of bills of exchange and
promissory notes under the Negotiable Instruments Law
-however, if the owner of the goods permits another to have the
possession or custody of negotiable receipts running to the order of the latter
or to bearer, it is a representation or title upon which bona fide purchasers
-the loss must fall upon him whose misplaced confidence made the
loss possible
ARTICLE 1513
RIGHTS OR PERSON TO WHOM DOCUMENT HAS BEEN NEGOTIATED
-it specifies the rights of a person to whom a negotiated document of
title has been duly negotiated, in the case of a document of title to bearer, or
by indorsement and delivery, in the case of a document of title. Such person
acquires:
1. the title of the person negotiating the document, over the goods covered
by the document
2.the title of the person (depositor or owner) to whose order by the terms of
the document the goods were to be delivered, over such goods; and
3. the direct obligation of the bailee (warehouseman or carrier) to hold
possession of the goods for him, as if the bailee had contracted directly with
him
ARTICLE 1514
RIGHTS OF PERSON TO WHOM DOCUMENT HAS BEEN TRANSFERRED
It refers to the rights of a person to whom a negotiable document of
title (not duly negotiated) has been transferred or of the transferee of a nonnegotiable document. Such person acquires:
1. the title to the goods as against the transferor
2. the right to notify the bailee of the transfer thereof
3. the right, thereafter, to acquire the obligation of the bailee to hold the
goods for him.
RIGHTS OF THE THIRD PERSON TO GOODS WHERE DOCUMENT HAS BEEN
TRANSFERRED
1. the transfer does not effect the delivery of the goods covered it. Before
notification, the bailee is not bound to the transferee whose right may be
defeated by a levy of an attachment or execution upon the goods by the
creditor or the transferor
2.if the document is negotiable, the goods cannot be attached or be levied
under an execution unless the document be first surrendered to the bailee or
its negotiation enjoined.
ARTICLE 1515
TRANSFER OF ORDER DOCUMENT WITHOUT INDORSEMENT
-it specifies the right of a person to whom an order document of title,
which may not properly be negotiated by mere delivery, has been delivered,
without indorsement. They are:
1.the right to the goods against the transferor and
2. the right to compel the transferor to indorse the indorsement
(if the intention of the parties is that the document should be merely
transferred, the transferee has no right to acquire the transferor to indorse
the document)
SUBSEQUENT INDORSEMENT OF NEGOTIABLE DOCUMENT TRANSFERRED
-the negotiation shall take effect as of the time when the indorsement
is actually made, not at the time the document is delivered. The reason is
because the negotiation becomes complete only at the time of indorsement.
ARTICLE 1516
WARRANTIES ON SALE OF DOCUMENTS
-it treats of the warranties or liabilities of a person negotiating or
transferring a document. The liability is limited only to a violation of the 4
warranties.
ARTICLE 1517
INDORSER NOT A GUARANTOR
-the indorsement of a negotiable instrument has a double effect; the
indorser will pay the instrument if the party primarily liable fails to do so. The
ATTACHMENT OR LEVY
BY A NEGOTIABLE
DOCUMENT
-in the possession of such bailee, the goods cannot be attached or
levied under an execution unless the document be first surrendered or its
negotiation prohibited by law.
-this provision is for the protection of the bailee since he could be
made liable to a subsequent purchaser for value in good faith.
ARTICLE 1520
CREDITORS REMEDIES TO REACH NEGOTIATE DOCUMENTS
-this article expressly gives the court full power to aid by injunction (a
restraining order) and otherwise a creditor seeking to get a negotiate
document covering such goods.
ARTICLE 1521
PLACE OF DELIVERY OF GOODS SOLD
1. RULES
a. where there is an agreement, express or implied, the place of
delivery
is that agreed upon
b. where there is no agreement, the place of delivery is that
determined
by usage of trade.
c. where there is no agreement and there is also no prevalent
usage, the
place of delivery is the sellers place of
business.
d. in any other case, the place of delivery is the sellers residence
e. which to the knowledge of the parties at the time the contract
was
made were in some other place, that place is the place of
delivery in the
absence of any agreement or usage of trade to
the contrary.
2. PRESUMPTION
-it can be seen that the presumption is that the buyer must take
goods
from the sellers place of business or residence
rather than the seller to
deliver them to the buyer.
TIME OF DELIVERY OF GOODS SOLD
ARTICLE 1525
MEANING OF UNPAID SELLER
-is one who has not been paid or tendered the whole price or who has
received a bill of exchange or other negotiable instrument as conditional
payment and the condition on which it was received has been broken by
reason of the dishonor of the instrument.
WHERE WHOLE OF THE PRICE HAS NOT BEEN PAID
1. TENDER OF PAYMENT OF BUYER
-bring an action subsequently for the price, which he has refused,
yet tender destroys the sellers lien. Accordingly, so far as concerns his rights
to the goods, he is not unpaid seller after the tender of price.
2. PAYMENT OF PART OF PRICE
-the seller remains an unpaid seller even if title has passed to the
buyer.
3. PAYMENT BY NEGOTIABLE INSTRUMENT
-the delivery of promissory notes payable to order, or bills of
exchange or other mercantile documents shall produce the effect of payment
only when they have been cashed or when through the fault of the creditor
they have been impaired
ARTICLE 1526
REMEDIES OF UNPAID SELLER
-if the unpaid seller still retains the ownership in the goods, he cannot
be said to have a lien (on his goods) but he does have, in addition to his
other remedies, right of withholding delivery.
BASIC RIGHTS OF UNPAID SELLER
-is allowed a lien and kindred remedies in inherent injustice of
depriving him of goods with which he has not finally parted where it is
evident that he has not been or will not be paid the price for them when it is
due.
ARTICLE 1527
WHEN UNPAID SELLERS POSSESSORY LIEN MAY BE EXERCISED
1. SALES WITHOUT STIPULATION AS TO CREDIT
-the seller binds himself to give the goods over to the buyer
without
receiving at that time payment for them. Where
there is stipulation as to
credit a period for payment of price has
been fixed in the contract. The
seller has always a lien upon
the goods which he sells until the payment or
tender of the entire
price.
2. EXPIRATION OF TERM OF CREDIT
-but if he fails to exercise his right until the term of credit has
expired
and the price becomes due, he loses the right which
he theretofore had.
3. INSOLVENCY OF THE BUYER
-this doctrine is applies only an application of a general principle
in the
law of contracts that when one party to a bilateral
contract is
incapacitated from performing his part of the
agreement, the other party
also is excused from performing his
part
ARTICLE 1528
LIEN NOT GENERALLY LOST BY PART DELIVERY
-if the part delivery of the goods is intended as symbolical
delivery of the
whole, and therefore, a waiver of any right of
retention as to remainder,
the lien is lost.
ARTICLE 1529
WHEN UNPAID SELLER LOSSES POSSESSORY LIEN
1. DELIVERY TO AGENT OR BAILEE OF BUYER
-it is true that the seller may stop the goods while on their way to
the
buyer after delivery to a bailee for the buyer but it cannot
be said that
the seller has still any lien upon him.
2. POSSESSION BY BUYER OR HIS AGENT
-it is plain that when the ownership is transferred the seller has
no lien
simply because he has no possession necessary for a
lien.
3. WAIVER OF LIEN
-the seller may lose his lien by express agreement to surrender
it. The
seller could no longer assert a lien.
ARTICLE 1530
RIGHT OF SELLER TO STOP GOODS IN TRANSITU
-he may resume possession of the goods while they are in transit,
when the buyer is or becomes insolvent. The right is exercised either by
obtaining actual possession of the goods or by giving notice of his claim to
the carrier or other bailee in possession.