1504.

Unless otherwise agreed, the goods remain at the seller’s risk until the

ownership therein is transferred to the buyer, but when the ownership therein

is transferred to the buyer, the goods are at the buyer’s risk whether actual

delivery has been made or not, except that:

(1) Where delivery of the goods has been made to the buyer or a bailee for the

buyer, in pursuance of the contract and the ownership in the goods has been

retained by the seller merely to secure performance by the buyer of his

obligation under the contract, ! the goods are at the BUYER’S RISK from the

time of such delivery;

(2) Where actual delivery has been delayed through the fault of either the

buyer or seller the goods ! are at the RISK OF THE PARTY IN FAULT
1505. Subject to the provisions of this title, where the goods are sold by a

person who is not the owner thereof, and who does not sell them under

authority or with the consent of the owner, the buyer acquires no better title to

the goods than the seller had, unless the owner of the goods by is his conduct

precluded from denying the seller’s authority.

Nothing in this title, however, shall affect:

(1) The provisions of any factors’ acts, recording, laws or any other provision

of law enabling the apparent owner of goods to dispose of them, as if he were

the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or under

the order of a court of competent jurisdiction

(3) Purchases made in a merchant’s store, or in fairs, or markets, in

accordance with the Code of Commerce and special laws

SALE BY A PERSON NOT THE OWNER

• GR: Fundamental doctrine of law that no one can give what he has not or

transfer a greater right to another than himself has ! person can sell only

what he owns or is authorized to sell

• A derivative right (contract of sell) cannot exist higher than its source

• EXCEPTIONS:

1. Where the owner of the goods, is by his conduct, precluded from

denying the seller authority to sell

2. Where the law enables the apparent owner to dispose of the goods as

if he were the true owner thereof

3. Where the sale is sanctioned by statutory or judicial authority

4. Where the sale is made at merchant’s stores, fairs, or markets

5. Where the seller has a voidable title which has not be avoided at the

time of sale (1506)

6. Where the seller subsequently acquires title

ART. 1506. Where the seller of goods has a voidable title thereto, but his title

has not yet 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.

SALE BY ONE HAVING A VOIDABLE TITLE

REQUISITES FOR ACQUISITION OF GOOD TITLE BY BUYER

1. He buys them before the title of the seller has been avoided

2. In GF for value

3. Without notice of the seller’s defect of title

BASIS OF RULE

• Where the loss has happened which must fall on one of the 2 innocent

persons ! it shall be borne by him who is caused the loss

• Similar to Innocent Purchaser for Value (Property Registration Decree)

• Similar to a holder in due course to whom a negotiable instrument is

negotiated for value and in GF (Negotiable instruments Law)