Sales Lecture 1

THE LAW ON SALES

Art. 1458 CONTRACT OF CONTRACT TO

SALE
By the contract of sale one of the contracting parties obligates Non-payment of the purchase
himself to transfer the ownership of and to deliver a price is a negative resolutory
determinate thing, and the other to pay therefor a price certain condition, meaning, the sale
in money. becomes ineffective upon the
happening of such condition
STAGES OF A CONTRACT OF SALE (non-payment)
After delivery of the object,
1. Preparation the seller loses ownership
over it
-also known as conception or generation
SELL
The payment in full is a
positive suspensive condition,
meaning, if the price is not
paid, the obligation to deliver
and to transfer ownership
does not become effective
Whether there is delivery or
not, the seller retains the
ownership of the object

-the period of negotiation and bargaining, ending at the Art. 1479

moment of agreement of the parties
-A promise to buy and sell a determinate thing for a price
2. Perfection certain is reciprocally demandable (bilateral reciprocal
contract)
-also known as the birth of the contract
-An accepted unilateral promise to buy or to sell a determinate
3. Consummation thing for a price certain is binding upon the promissor if the
promise is supported by a consideration distinct from the
- otherwise called the death of the contract
price.
- the fulfilment or performance of the terms agreed upon in the
OPTION CONTRACT
contract
- a privilege existing in one person, for which he had paid a
CHARACTERISTICS
consideration, which gives him the right to buy a certain
 Bilateral merchandise or property from another person at any time
within the agreed period at a fixed rate
 Consensual
 Commutative – the thing sold is equivalent to the - separate and distinct contract from the contract where the
price paid and vice versa parties may enter into upon the consummation of the option
 Onerous – the thing sold is conveyed in consideration
of the purchase price Art. 1482
 Principal
 Nominate Whenever earnest money is given in a contract of sale, it shall
be considered as part of the price and as proof of he perfection
ABSOLUTE SALE of the contract.

- No condition is imposed and ownership passes to the vendee EARNEST MONEY OPTION MONEY
upon delivery of the thing subject of the sale Part of the purchase price A distinct consideration for
an option contract which
- Neither a stipulation in the deed that title to the property sold fives the buyer a specific
is reserved in the seller until full payment of the price, nor one period within which to
giving the vendor the right to unilaterally resolve the contract purchase the thing
the moment the buyer fails to pay within a fixed period When it is given, the buyer is Even if option money is paid
bound to pay the balance of by the would-be-buyer, he is
CONDITIONAL SALE the agreed purchase price not bound to buy the thing
If the sale does not If the buyer decides not to
-Subject to a certain contingency or condition materialize, the earnest buy the thing he cannot
money paid must be returned, recover the option money he
-Ownership is not to vest in the buyer until the happening of unless a contrary agreement paid as consideration for the
the condition had been stipulated option contract

CONTRACT OF
SALE
Title over the property passes
to the buyer upon delivery
unless there is a contrary
agreement
CONTRACT TO
SELL
Ownership is retained by the
seller whether or not there is
delivery. Ownership passes to
buyer only upon full payment
of price.

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Sales Lecture 2
The Law on Sales
Art. 1459
The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered.
Art. 1347
All things which are not outside the commerce of men,
including future things, may b the objet of a contract. All
rights which are not intransmissible may also be the object of
contracts.
TRANSMISSIBLE RIGHTS
 Right to usufruct
 Right to inheritance already acquired, but not future
inheritance
INTRANSMISSIBLE RIGHTS
 Right to suffrage
 Right to support
 Marital rights
Can services be the object of sale?
No. Services are not determinate things and no transfer of
ownership is available in services.
CLASSIFICATION OF ILLICIT THINGS
Illicit per Se
-by its nature, it is heinous, immoral, and wrongful
-house of prostitution
Illicit per Accidens
-illegal only because there is a law prohibiting it
-sale of parcel of land to a disqualified alien
Art. XII, 1987 Constitution
Sec. 7. Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands
of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has lost
his Philippine citizenship may be a transferee of private lands,
subject to limitations provided by law.
Art. 1459
The thing must be licit and the vendor must have a right to
transfer the ownership thereof at the time it is delivered.
At the time of perfection of the contract, the seller need not be
the owner of the thing or right sold.
At the time of delivery, he must be the owner of the object of
the contract of sale.
Art. 1460
 A thing is determinate when it is particularly
designated or physical segregated from all other of
the same class.
 The requisite that a thing be determinate is satisfied if
at the time the contract is entered into, the thing is
capable of being made determinate without the
necessity of a new or further agreement between the
parties
Art. 1461
 Things having a potential existence may be the object
of the contract of sale.
 The efficacy of the sale of a mere hope or expectancy
is deemed subject to the condition that the thing will
come into existence.
 The sale of a vain hope or expectancy is void.
Emptio Rei Speratae
- The purchase of an expected thing subject to the condition
that the thing will come into existence
If the contract of sale is made dependent upon the existence of
the thing such that if it did not come into existence, the
contract is not effective, and the buyer will have no obligation
to pay the price
Emptio Spei
-The purchase of a hope or expectancy
If the contracting parties intended the contract of sale to exist
at all events, whether or not the expected thing will come into
existence such that the buyer will have to pay the purchase
price, the contract becomes aleatory in nature
Art. 1466
In construing a contract containing provisions characteristic of
both the contract of sale and of the contract of agency to sell,
the essential clauses of the whole instrument shall be
considered.
QUIROGA V. PARSONS HARDWARE CO.
Facts:
The defendant was granted by the plaintiff of the exclusive
right to sell as an “agent” Quiroga Beds in the Visayas at the
invoice price in Manila. The agreement was for the defendant
to pay for the bed with a discount from 20% to 25% as
commission on the sales.
The defendant shall pay the plaintiff whether the beds are sold
or not. The plaintiff claims that the defendant is his “agent”
while defendant says he was merely a purchaser.
Issue:
Is there a contract of sale or a contract of agency to sell?
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Ruling: - When delivery is effected not by actually transferring
the possession of the thing but by legal formalities or
There is a contract of sale in the instant case. The plaintiff was by symbolic tradition
under obligation to supply the bed and the defendant was
under obligation to pay the price regardless of whether or not CONSTRUCTIVE DELIVERY
he sold the beds.
1. Tradicion Symbolica
If it were an agency, the agent receives the thing for - Delivery of certain symbols or things representing the
the purpose of selling it, and does not pay the price. He merely thing being delivered
delivers the price he realized from the sale of the thing to a - Keys or titles
third person. He returns the thing, if he failed to sell it. The 2. Tradicion Instrumental
fact that “discount” or so-called commission has been given is - Delivery of the instrument of conveyance to the
immaterial. grantee by the grantor
3. Tradicion Longa Manu
SALE AGENCY - Delivery through pointing of the thing (movable)
The buyer cannot return the The agent returns the within sight, by the grantor to the grantee but at the
goods/property when the sale goods/property if he was not time of the transaction, the thing could not be placed
is defective. able to sell the same. yet in the hands of the grantee, or on order be
The seller warrants the The agent does not make any delivered to his house or designated place
goods/property sold. warranty as long as he acts
within his authority and in the 4. Tradicion Brevi Manu
name of the principal. - Delivery through the grantee’s continuation of is
The seller has full freedom to The agent must follow the possession over which the thing delivered but now
enter into any terms and instructions of the principal. under the title or ownership
conditions on the contract of 5. Tradicion Constitutum Possessorium
sale. - owner’s continuous possession of he property he had
sold o another person, and his present possession
thereof is no longer that of an owner but under the
PRIMORDIAL TEST
capacity like that of a lessee
Art. 1470 6. Tradicion by operation of law
- Delivery of the things by operation of law such as
 Gross inadequacy of price does not affect a contract intestate succession where inheritance is transferred
of sale, except as it may indicate a defect in the to the heir upon death of the decedent
consent, or that the parties really intended a donation
or some other act or contract. Transfer of possession does not necessarily mean transfer of
ownership.
General Rule
RIGHT OF FIRST REFUSAL
Gross inadequacy of price does not affect a contract
of sale - A contractual grant, not of the sale of the property,
but of the first priority to buy the property in the
Exceptions event the owner sells the same
- When the lease contains the right of first refusal, the
1. If consent is vitiated such as by fraud, mistake, lessor has the legal duty to the lessee not to sell the
violence, intimidation, or undue influence; leased property to anyone at any price until after the
2. If the parties intended a donation or some other act or lessor has made an offer to sell the property to the
contract; or lessee an the lessee has failed to accept it
3. If the price is so low as to be “shocking to the
conscience”, the sale shall be set aside. Art. 1480

Art. 1477 - Any injury to or benefit from the thing sold, after the
contract has been perfected, from the moment of the
The ownership of the thing sold shall be transferred to the perfection of the contract to the time of delivery,
vendee upon the actual or constructive delivery thereof. shall be governed by Articles 1163 to 1165, and
1262.
Art. 1478
- This rule shall apply to the sale of fungible things,
The parties may stipulate that ownership in the thing shall not made independently and for a single price, or without
pass to the purchaser until he has fully paid the price. consideration of their weight, number, or measure.
- Should fungible things be sold for a price fixed
KINDS OF DELIVERY according to weight, number, or measure, the risk
shall not be imputed to the vendee until they have
1. Actual or real delivery been weighed, counted, or measured and delivered,
- When the thing is placed in the control and position unless the latter has incurred in delay.
of the vendee
2. Constructive or legal delivery Res Perit Domino

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 - Owner bears the loss Sales Lecture 3
- In the absence of a perfected contract between the
supposed parties, the loss, destruction, or CAPACITY TO BUY OR SELL
deterioration of the thing shall be borne by the owner
Art. 1489
by virtue of this principle
All persons who are authorized in this Code to
Consequences of loss or deterioration
obligate themselves, may enter into a contract of sale, saving
Before the perfection Vendor the modifications contained in the following articles.
At the time of perfection Vendor
Where necessaries are those sold and delivered to a
(The contract is inexistent minor or other person without capacity to act, he must pay a
because the object did not reasonable price therefor. Necessaries are those referred to in
exist. It follows that the Article 290.
contract will have no legal
effect.) KINDS OF INCAPACITY

Absolute Incapacity
After the perfection of the contract but before delivery of the
thing to the vendee - A person cannot bind himself in any contract
- Minority, insanity, imbecility, etc. ( Art. 38)
Due to the fault of the vendor Vendor
Due to the fault of the vendor Vendee Relative Incapacity
Seller (a) was in delay, Vendor
(b) assumed the loss or - A person cannot buy a certain property because of a
deterioration by stipulation, special prohibition
or - Arts. 1490-1491
(c) he promised to deliver the
thing two or more persons Art. 1490
who do not have the same
interest over the thing The husband and the wife cannot sell property to each other,
except:
Art. 1484 (1) When a separation of property was agreed upon in the
marriage settlements; or
In a contract of sale of personal property the price of
which is payable in installments, the vendor may exercise any
(2) When there has been a judicial separation or property
of the following remedies: under Article 191.
(1) Exact fulfillment of the obligation, should the vendee fail
Rationale behind the Prohibition
to pay;
(1)Prevent the stronger spouse from exploiting the weaker
(2) Cancel the sale, should the vendee's failure to pay cover spouse;
two or more installments;
(2)Prevent donations disguised as sales; and
(3) Foreclose the chattel mortgage on the thing sold, if one has
been constituted, should the vendee's failure to pay cover two (3)Protect third persons, especially creditors, against fraud
or more installments. In this case, he shall have no further through the transfer of properties of one spouse to the other to
action against the purchaser to recover any unpaid balance of evade payment of obligations
the price. Any agreement to the contrary shall be void.
Donations In Marriage Settlement
 The three remedies are alternative, not cumulative
 The election of one remedy is a waiver of the right to Do not exceed one-fifth of the donor’s present property (Arts.
resort to the other remedies. 82 and 84, Family Code)

Art. 1485 Persons Qualified to Question the Sale

The preceding article shall be applied to contracts
purporting to be leases of personal property with option to
buy, when the lessor has deprived the lessee of the possession
or enjoyment of the thing.
Art. 1486
In the case referred to in two preceding articles, a
stipulation that the installments or rents paid shall not be
returned to the vendee or lessee shall be valid insofar as the
same may not be unconscionable under the circumstances.
 The validity of the sale can only questioned by
persons who bear relationship with the seller in such
a manner that their rights or interests are adversely
affected by the sale.
 The heirs of either spouse and creditors whose credit
existed before the transfer may challenge the validity
of the sale.
When spouses are allowed to sell or lease properties to each
other

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(1)They have chosen absolute separation of property as their
property regime;
(2)They have obtained a judicial separation of the property in
accordance with Articles 134 and 135 of the Family Code
Sale of Conjugal Property
- The absence of the consent of one spouse in the sale
of a conjugal property renders the sale null and void
- When consent is vitiated, the sale is voidable
Art. 1491.
The following persons cannot acquire by purchase, even at a
public or judicial auction, either in person or through the
mediation of another:
(1) The guardian, the property of the person or persons who
may be under his guardianship (voidable);
(2) Agents, the property whose administration or sale may
have been entrusted to them, unless the consent of the
principal has been given (voidable);
(3) Executors and administrators, the property of the estate
under administration (voidable);
(4) Public officers and employees, the property of the State or
of any subdivision thereof, or of any government-owned or
controlled corporation, or institution, the administration of
which has been intrusted to them; this provision shall apply to
judges and government experts who, in any manner
whatsoever, take part in the sale (void);
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees
connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
profession (void);
(6) Any others specially disqualified by law (void).
Other Persons Especially Disqualified by Law
(1) The officer conducting the execution of a judgment cannot
be a purchaser, or be interested directly or indirectly in any
purchase at an execution sale;
(2) An unpaid seller who stopped the goods in transitu is
prohibited from buying the goods either directly or indirectly
in the resale of said goods at a public or private sale which he
may initiate; and
(3) In a sale by auction, the seller cannot bid unless notice has
been given that such sale by auction is subject to a right to bid
on behalf of the seller.
EFFECTS OF THE CONTRACT WHEN THE THING SOLD
HAS BEEN LOST
Art. 1493
If at the time the contract of sale is perfected, the
thing which is the object of the contract has been entirely lost,
the contract shall be without any effect.
But if the thing should have been lost in part only, the
vendee may choose between withdrawing from the contract
and demanding the remaining part, paying its price in
proportion to the total sum agreed upon.
Loss
A thing is considered lost when it perishes, or goes out of
commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered (Art. 1189, par. 2)
Art. 1494
Where the parties purport a sale of specific goods, and the
goods without the knowledge of the seller have perished in
part or have wholly or in a material part so deteriorated in
quality as to be substantially changed in character, the buyer
may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof
as have not deteriorated, and as binding the buyer to pay the
agreed price for the goods in which the ownership will pass, if
the sale was divisible.
OBLIGATIONS OF THE VENDOR
Art. 1495
The vendor is bound to transfer the ownership of and deliver,
as well as warrant the thing which is the object of the sale.
Art. 1496
The ownership of the thing sold is acquired by the vendee
from the moment it is delivered to him in any of the ways
specified in Articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from
the vendor to the vendee.
DELIVERY OF THE THING SOLD
Art. 1497
The thing sold shall be understood as delivered, when it is
placed in the control and possession of the vendee.
Art. 1498
When the sale is made through a public instrument,
the execution thereof shall be equivalent to the delivery of the
thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred.
With regard to movable property, its delivery may
also be made by the delivery of the keys of the place or
depository where it is stored or kept.
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Art. 1499 Sales Lecture 4

The delivery of movable property may likewise be made by
the mere consent or agreement of the contracting parties, if the
thing sold cannot be transferred to the possession of the
vendee at the time of the sale, or if the latter already had it in
his possession for any other reason.
Art. 1506. Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the time of the
sale, the buyer acquires a good title to the goods, provided he
buys them in good faith, for value, and without notice of the
seller's defect of title

Art. 1502 Purchaser in Good Faith

When goods are delivered to the buyer "on sale or
return" to give the buyer an option to return the goods instead
of paying the price, the ownership passes to the buyer of
delivery, but he may revert the ownership in the seller by
returning or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a reasonable
time.
- one who purchased a property of another without knowledge
that some other person or persons have any right to or any
interest in such property, and who paid a full and fair price for
it, at the time of the purchase or before he has notice of the
claim of the latter
“for value”

When goods are delivered to the buyer on approval or Buyer must pay a valuable consideration
on trial or on satisfaction, or other similar terms, the
“value”
ownership therein passes to the buyer:
- Antecedent or pre-existing claim, whether for money or not,
(1) When he signifies his approval or acceptance to the seller
where goods are taken either in satisfaction thereof or as a
or does any other act adopting the transaction;
security therefor (Art. 1636)
(2) If he does not signify his approval or acceptance to the
RATIONALE
seller, but retains the goods without giving notice of rejection,
then if a time has been fixed for the return of the goods, on the The reasons why the buyer in good faith acquires a good title:
expiration of such time, and, if no time has been fixed, on the
expiration of a reasonable time. What is a reasonable time is a a. A voidable contract is valid until annulled;
question of fact.
and

b. Where one of two innocent parties must suffer, he

who placed the offender in a position to do wrong
must be the one who should suffer

Art. 1521

 Place of Delivery

The following, in order of enumeration, shall be the place of

delivery of he goods purchased:

1. The place stipulated upon if any stipulation has been

made;
2. The place determined by usage of trade;
3. The seller’s place of business; or
4. The seller’s place of residence.

Rule for Specific Goods

If specific goods are involved in the sale, the place where they
are found shall be the place of delivery, in the absence of any
agreement or applicable usage of trade

Waiver

If the goods were accepted by the buyer in some other place

not specified in the contract, the latter is deemed to have
waived his right to receive the goods at the proper place of
delivery

Time and Manner of Delivery

1. If there is a specific date and time agreed upon for the

delivery, this shall be controlling

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 2. If none, the delivery must be made within a
reasonable time
Reasonable Time
What is reasonable time will depend upon the circumstances
attending the particular transaction, such as the character of
the goods, their purpose, ability of the seller to manufacture,
facilities of the transportation, distance of the place of
delivery, and the usual course of business
Goods in Possession of Third Person
 The seller is not discharged from his responsibility
where the goods are in the possession of a third
person, unless and until the third person
acknowledged to the buyer that he holds the goods in
behalf of the said buyer.
 The third person acts as a bailee for the buyer.
 Until then, the seller must take time and exert efforts
to cause the delivery of the goods to the buyer as long
as the buyer manifested his readiness to accept and to
pay for the price of the goods.
Expenses
Expenses incurred to put the goods into a deliverable state
shall be borne by the seller, unless otherwise agreed upon.
Goods in Deliverable State
Goods are in deliverable state if they are in such condition that
they satisfy the specifications agreed upon in the contract and
the buyer would, under the contract, be bound to accept or
take delivery of them
Art. 1522
Where the seller delivers to the buyer a quantity of
goods less than the contracted to sell, the buyer may reject
them, but if the buyer accepts or retains the goods so
delivered, knowing that the seller is not going to perform the
contract in full, he must pay for them at the contract rate. If,
however, the buyer has used or disposed of the goods
delivered before he knows that the seller is not going to
perform his contract in full, the buyer shall not be liable for
more than the fair value to him of the goods so received.
Lesser Goods Delivered
1. Buyer may reject the goods delivered and he shall have no
liability; or
2. The buyer may accept what has been delivered, but he will
pay at the contract price, if he knew that the seller is not going
to deliver all the goods contracted for.
(Larger Goods Delivered)
Where the seller delivers to the buyer a quantity of
goods larger than he contracted to sell, the buyer may accept
the goods included in the contract and reject the rest. If the
buyer accepts the whole of the goods so delivered he must pay
for them at the contract rate.
(Mixed Goods Delivered)
Where the seller delivers to the buyer the goods he
contracted to sell mixed with goods of a different description
not included in the contract, the buyer may accept the goods
which are in accordance with the contract and reject the rest.
In the preceding two paragraphs, if the subject matter
is indivisible, the buyer may reject the whole of the goods.
The provisions of this article are subject to any usage
of trade, special agreement, or course of dealing between the
parties.
Usage of Trade
- Any practice or method of dealing having such regularity of
observance in a place, vocation, or trade as to justify an
expectation that it will be observed with respect to the
transaction in question
Special Agreement
- Any stipulation of the parties which will govern their
relationship in case of lesser or larger delivery of
goods.
- It must be made in good faith
Course of Dealing
- A sequence of previous acts and conduct between the parties
to a particular transaction which is fairly to be regarded as
establishing a common basis of understanding for interpreting
their expressions and other conduct
Art. 1523
This Article applies only to cases where the buyer has agreed
to the shipment of the goods by the seller through a carrier for
the purpose of transmission to the buyer.
GENERAL RULE
Delivery to the carrier is delivery to the buyer
EXCEPTIONS
1. Where the seller reserves his right of ownership over the
goods until certain conditions have been fulfilled;
2. When delivery is directed by the seller to the place of
destination, to himself or his agent;
3. When the bill of lading is deliverable to the buyer, but the
seller retains the possession of the bill of lading;
Bill of Lading
- A detailed document issued by a carrier to acknowledge the
receipt of cargo for shipment
4. When the parties have a different intention as when the
parties did not intend to have the goods delivered to the buyer
through the carrier.
Seller’s Exercise of Due Diligence
 After the delivery of the goods by the seller through
the carrier, unless otherwise authorized by the buyer
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 himself, the seller has still the following duties to
fulfill to avoid liability:
(1)He must enter into a contract of carriage with the carrier in
behalf of the buyer as may be necessary and reasonable for the
protection and safe carriage of the goods.
If the seller failed to do so, and the goods are lost or
damaged, the seller is liable for damages for his lack of
diligence.
(2)He must notify the buyer of the necessity of insuring the
goods during the transit if it is usual under the circumstances
that insurance should be taken.
Otherwise, the seller bears the risk of loss unless the
buyer had already the need information to cause the insurance
of the goods as when he used to do so in similar pas
transactions with the seller.
CLASSIFICATION OF DELIVERY OF GOODS
TO THE CARRIER
Cost, Insurance, and Freight (CIF)
- CIF contract of sale is one were the buyer pays a fixed price
which the seller furnishes the goods, pays the freight and
insurance to the point of delivery, and all risks while the goods
are in transit are for the account of the buyer
Free on Board (FOB)
- Seller shall bear all expenses until goods are delivered where
they are to be FOB at the point of shipment or at the point of
destination and determines the time when property passes
FOB CIF
If the sale is FOB at the place In CIF contract, the buyer is
of shipment, the buyer must to pay a fixed price for which
pay the freight, provided the the seller furnishes the goods,
seller complies his part of the pays the freight and insurance
contract. to the point of delivery.
If the sale is FOB at the place
of destination, the freight
must be paid by the seller.
Art. 1524
The vendor shall not be bound to deliver the thing sold, if the
vendee has not paid him the price, or if no period for the
payment has been fixed in the contract.
Art. 1525
The seller of goods is deemed to be an unpaid seller
within the meaning of this Title:
(1)When the whole of the price has not been paid or tendered;
(2) When a bill of exchange or other negotiable instrument has
been received as conditional payment, and the condition on
which it was received has been broken by reason of the
dishonor of the instrument, the insolvency of the buyer, or
otherwise.
Unpaid Seller
The term unpaid seller used in Arts. 1525 to 1535
includes the following:
1. Agent of the seller;
2. Consignor or agent who has himself paid the price or
is responsible for the price; or
3. Any other person in the position of the seller.
RIGHTS AND REMEDIES OF AN UNPAID SELLER
1. Possessory Lien. Right to retain the goods as
security for the payment of the price while he
remains in possession of them.
2. Stoppage in transitu. Right to stopping the goods
while they are in transit in case of insolvency of the
buyer so that the seller can resume his possession of
the goods. Insolvency may be existing at the time of
or after the transaction.
3. Right to resell the goods when the same are of
perishable nature; if resale is agreed upon in case of
default; or when the buyer is in default in the payment for
an unreasonable length of time provided the seller himself
does not buy the goods.
4. Right to rescind the sale if this right is reserved, the
buyer has defaulted in the payment for an unreasonable
length of time.
Art. 1526
- provides for an additional right. This is the right of
the seller in case title to the goods has not yet passed
to the buyer, in which case, he still retains the
ownership over the goods.
- Though he has no possessory lien, he being the
possessor can withhold the delivery of the goods to
the prospective buyer.
Art. 1527
Subject to the provisions of this Title, the unpaid seller of
goods who is in possession of them is entitled to retain
possession of them until payment or tender of the price in the
following cases, namely:
(1) Where the goods have been sold without any stipulation as
to credit;
(2) Where the goods have been sold on credit, but the term of
credit has expired;
(3) Where the buyer becomes insolvent.
Art. 1529
The unpaid seller of goods loses his lien thereon:
(1) When he delivers the goods to a carrier or other bailee for
the purpose of transmission to the buyer without reserving the
ownership in the goods or the right to the possession thereof;
(2) When the buyer or his agent lawfully obtains possession of
the goods;
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(3) By waiver thereof.

Art. 1530

Subject to the provisions of this Title, when the buyer of

goods is or becomes insolvent, the unpaid seller who has
parted with the possession of the goods has the right of
stopping them in transitu, that is to say, he may resume
possession of the goods at any time while they are in transit,
and he will then become entitled to the same rights in regard
to the goods as he would have had if he had never parted with
the possession.

Double Sale

Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it
should be movable property

 Should it be immovable property, the ownership shall

belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
 Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the
person who presents the oldest title, provided there is
good faith.

Principle of Prius Tempore, Prius Jure

- First in time, stronger in right

Buyer in Good Faith

- One who buys the property of another without notice that

some other person has a right to or interest in such property
and pays a full and fair price for the same at the time of such
purchase or before he has notice of the claim or interest of
some other person in the property

Applicability of Art. 1544

Requisites:

1. The vendor has an existing right over the property

and power of disposal;
2. There are at least to sales executed by the same
vendor;
3. The sales involve the same property; and
4. There are two or more vendees of the same property
sold