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ART. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.A contract of sale
may be absolute orconditional.
Essential - COC
Natural
Accidental
4. If a conjugal property is sold, may the husband give his consent to such sale
without the consent of her wife or vice versa?
The sale of conjugal property requires the consent of both the husband and the
wife. The absence of the consent of one renders the sale null and void (see Art.
124, Family Code.) while the vitiation thereof (see Art. 1390.) makes it merely
voidable. (Guiang vs.Court of Appeals, 95 SCAD 264, 290 SCRA 372 [1998].)
5. When is a sale perfected and when is the ownership deemed transferred to the
buyer?
Sale is perfected by mere consent but the transfer of title is effected only by
payment of the entire purchase price by the vendee and by delivery of the thing
by the vendor.
YES.
9. Distinguish contract to sell and conditional sale.
On the other hand, a contract to sell is not a conditional sale because the
fulfillment of the suspensive condition which is the full payment of the price,
ownership will not automatically transfer to the buyer although the property is
already delivered unto him. Ownership, in such a case, will only conveyed by the
seller to the buyer by entering an absolute sale to consummate the transaction.
1. Where the subject matter is not determinate (Arts. 1458,1460.) or the price is
not certain (Art. 1458.), the agreement is merely a contract to sell.
2. A sale of future goods (see Art. 1462.) even though thecontract is in the form
of a present sale operates as a contract tosell the goods.
11. What is the requirement as to the thing and as to the vendor in a valid sale.
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.
— All rights which are not intransmissible or personal may also be the object of
sale (Art. 1347.), like the right of usufruct (Art. 572.), the right of conventional
redemption (Art.1601.), credit (Art. 1624.), etc.
The thing may be illicit per se (of its nature) or per accidens (because of some
provisions of law declaring it illegal).
14. What is the status of a sale contracted in violation of the right of first refusal?
Emptio rei speratae (sale of thing expected) is the sale of a thing not yet in
existence subject to the condition that the thing will exist and on failure of the
condition, the contract becomes in effective and hence, the buyer has no
obligation to pay the price.
On the other hand, emptio spei is the sale of the hope itself that the thing will
come into existence.
In emptio rei speratae, the future thing is certain as to itself but uncertain as to
its quantity and quality. Such sale is subject to the condition that the thing will
come into existence (see Art. 1545,par. 2.), whatever its quantity or quality.
In emptio spei (like the sale of a sweepstake ticket), it is not certain that the thing
itself(winning a prize) will exist, much less its quantity and quality.
In emptio rei speratae, the sale is subject to the condition that the thing
should exist, so that if it does not, there will be no contract by reason of the
absence of an essential element. On the other hand,in emptio spei produces
effect even though the thing does not come into existence because the object of
the contract is the hope itself,unless it is a vain hope or expectancy.
18. If there is an ambiguity whether the sale is a emptio rei speratae and emptio spei,
what is the presumption?
21. What is the rule in construing a contract having provisions of both the contract of
sale and of a contract of agency?
ART. 1466 ─ the essential clauses of the whole instrument shall be considered.
o IN AN AGENCY TO SELL:
o 1. the agent retains the goods for benefit of his principal.
o 2. the agent simply account for the proceeds of the sale on the principals
behalf.
o 3. the agent can return the object in case he is unable to sell the same to
a third person.
o 4. the agent makes no warranty.
o 5. the agent in dealing with the thing received, must act and is bound
according to the instructions of his principal.
23. Differentiate sale from a contract for a piece of work.
o ART. 1467 ─
o
o It is a contract of sale if the thing is delivered:
o 1. at a certain price;
o 2. in the ordinary course of the vendor's business; and
o 3. is manufactured or procured for the general market.
If such intention does not appear, it shall be considered as barter if the value of
the thing given as part of the consideration exceeds the amount of money given;
otherwise it is a sale.
o IN DATION IN PAYMENT :
o 1. there is pre-existing credit.
o 2. obligations are extinguished.
o 3. the cause is the extinguishment of the debt.
o 4. freedom to fix the price may be impaired.
o 5. payment is received by the debtor before the contract is perfected.
26. 1. When is the price considered certain?
2. What will happen if the person so fixing the price is unable or unwilling to fix it?
the sale will be inefficacious UNLESS the parties subsequently upon a price or if
in case the third person had acted in bad faith or by mistake, then the court may
fix the price.
ART. 1470. Gross inadequacy of price 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.
28. What will be the effect if the price is so low as to be shocking to the conscience
of the court?
The sale may be set aside and may be declared an equitable mortgage. ( De
Leon vs. Salvador, 36 SCRA 507)
ART. 1471. If the price is simulated, the sale is void,but the act may be shown to
have been in reality a donation, or some other act or contract.
30. How may price of securities, grains, liquids and other things be considered
certain?
o ART. 1472 -
o if the price fixed for the thing sold :
o 1. would have on a definite day, or
o 2. in a particular exchange or market, or
o 3. when an amount is fixed above or below the price fixed on such day, or
o 4. in such exchange or market provided that said amount is certain.
31. Discuss the principle of mutuality as to the fixing of the price.
32. If the price cannot be determined in accordance with provisions of the Civil Code
or in any other manner, what will happen to the sale?
it will be inefficacious but should the thing have been delivered to the buyer, he
must pay a reasonable price therefor with regards to the question of fact
dependent on the circumstances of each particular case.
33. If the consent as to the sale has been reluctantly given by any of the parties,
what is the status of the sale?
Still valid for there is no difference in law where a person gives his consent
reluctantly and even against his good sense and judgment as when he acts
voluntarily and freely.
Non-payment of the purchase price is not among the instances where the law
declares a contract of sale to be null and void. (Peñalosa vs. Santos, 153 SCAD
531)
And this will give rise to the right of the seller to rescind the sale or to ask
fulfillment, with indemnification of damages in either case.
35. if the price is not stated in the contract, what is the status of the sale?
Valid but subject to reformation.
38. Does a perfected sale gives any equittable title in favor of the buyer?
ART. 1479. A promise to buy and sell a determinate thing for a price certain is
reciprocally demand-able.
40. what do you call a unilateral promise or order to sell or to buy a thing which is not
accepted that creates no juridical or legal bond?
It is a policitacion.
What will happen if there is a lack or absence of any proof evidencing the
presence of consideration in a option?
42. Can the promissor withdraw an option to sell, after acceptance, if the option is
not supported by any consideration?
‘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
44. Rules on who shall bear the loss or deterioration of the thing.
(1) If the thing is lost before perfection, the seller and not the one who intends to
purchase it bears the loss (see Roman vs.Grimalt, 6 Phil. 96 [1906].) in
accordance with the principle that the thing perishes with the owner (res perit
domino);
(2) If the thing is lost at the time of perfection, the contract is void or inexistent.
(Art. 1409[3].) The legal effect is the same as when the object is lost before the
perfection of the contract of sale(see Art. 1493.);
(3) If the thing is lost after perfection but before its delivery, that is, even before
the ownership is transferred to the buyer, the risk of loss is shifted to the buyer as
an exception to the rule of res perit domino (Arts. 1480, pars. 1 and 2, 1538,
1189, and 1269.); and
(4) If the thing is lost after delivery, the buyer bears the risk of loss following the
general rule of res perit domino.
Earnest money is something of value given by the buyer to the seller to show that
the buyer is really in earnest, and to bind the bargain. It is actually a partial
payment of the purchase price and is considered as proof of the perfection of the
contract.
o OPTION MONEY IS :
o 1. not part of the purchase price.
o 2. applied on a sale not yet perfected.
o 3. something given by the buyer in order him to decide to buy or not.
48. What are those sales which must comply with the requirements pertaining to the
statute of frauds?
o (a) Sale of personal property at a price not less thanP500.00;
o (b) Sale of real property or an interest therein regardless of the price
involved; and
o (c) Sale of property not to be performed within a year from the date thereof
regardless of the nature of the property and the price involved.
49. What is the status of the sale of a parcel of land contracted by an agent who has
no written authority?
The fact that the notarization of a deed of sale of real property is false is of no
consequence, for it need not be notarized; it is enough that it be in writing. (Heirs
of Amparo del Rosario vs.Santos)
51. If A orally sold and delivered to B his land, will the sale between them be deemed
unenforceable if said sale will not be reduced into writing and violated the
provisions of the Statutes of Fraud?
53. In relation to ART. 1484, may the vendor recover any deficiency after foreclosure
of the chattel mortgage?
NO.
ART. 1489 - All persons who are authorized in the Civil Code to obligate
themselves, may enter into a contract of sale.
A minor may enter a contract of sale if what he has purchased are necessaries
and that he must have paid a reasonable price therefor.
o ADDITIONAL NOTES :
o The persons disqualified to buy referred to in Articles 1490 and 1491 are
also disqualified to become lessees of the things mentioned therein. (Art.
1646.)see page 159 of this book.
o MEANING: If the husband and wife is prohibited in selling their property to
each other, then it also follows that they cannot also lease said property to
each other.
59. Discuss ART. 1491.
o 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:
o (1) The guardian, the property of the person orpersons who may be
under his guardianship;
o (2) Agents, the property whose administration or
sale may have been entrusted to them, unless the consent of the
principal has been given;
o (3) Executors and administrators, the property of the estate under
administration;
o (4) Public officers and employees, the property of the State or of any
subdivision thereof, or of any government owned or controlled corporation,
or institu-tion, the administration of which has been entrusted to them; this
provision shall apply to judges and government experts who, in any
manner whatsoever, take part in the sale;
o (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;
o (6) Any others specially disqualified by law.
60. What is the status of the sales in violation of ART. 1491 ?
o The purchase of the following properties are VOIDABLE:
o 1. property of the ward purchased by the guardian.
o 2. property of a principal purchased by his agent.
o 3. property under administration purchased by the executor or
administrator.
o The purchase of the following properties are NULL AND VOID:
o 1. property of the State or any of its subdivision entrusted to and
purchased by a public officer and employee.
o 2. property under litigation purchased by the judge, by a lawyer, by clerks
of court and other officers and employees who are charged with the
administration of justice.
o 3. property purchased by aliens and other person specially disqualified by
law.
61. If a part of thing sold is lost or deteriorated, what are those remedies available to
the vendee?
o ART. 1493.
o The vendee may :
o 1. withdraw from the contract or
o 2, demand the remaining part by paying its price in proportion to the total
sum agreed upon.
62. What are the remedies available to the vendee if the specific thing which was
subject to the sale has perished in part or so deteriorated as to substantially
changed in character?
o If the specific thing has perished in part or so deteriorated as to be
substantially changed in character, the buyer may treat the sale:
o 1. AS AVOIDED.
o 2. AS VALID as to the goods which have not deteriorated, if the obligation
is divisible.
63. What are the obligations of the vendor?
o (1) to transfer the ownership of the determinate thing sold;
o (2) to deliver the thing, with its accessions and accessories, ifany, in the
condition in which they were upon the perfection ofthe contract (Art.
1537.);
o (3) to warrant against eviction and against hidden defects(Arts. 1495,
1547.);
o (4) to take care of the thing, pending delivery, with properdiligence (see
Art. 1163.); and
o (5) to pay for the expenses of the deed of sale, unless there isa stipulation
to the contrary.
64. What are the ways of effecting constructive delivery?
o (a) by the execution of a public instrument (Art. 1498,par. 1.);
o (b) by symbolical tradition or traditio symbolica (ibid., par.2.);
o (c) by traditio longa manu (Art. 1499.);
o (d) by traditio brevi manu (Ibid.);
o (e) by traditio constitutum possessorium (Art. 1500.); or
o (f) by quasi-delivery or quasi-traditio. (Art. 1501.)
65. When can we say that the thing is already delivered to the buyer?
ART. 1497 - when it is placed in the control and pos-session of the vendee.
67. Does the delivery of the thing consummates the sale even if the price has not
been fully paid?
Delivery of the thing together with the payment of the price, marks the
consummation of the contract of sale. (Phil. National Bank vs. Ling, 69 Phil.
611 [1940];
YES, if from the deed the contrary does not appear or cannot clearly be inferred.
"SALE ON TRIAL" is where the goods are delivered to the buyer on approval
and satisfaction, the ownership passes to the buyer when he signifies his
approval or acceptance to the seller or when he does not signify his
approval and acceptance but he retains the goods and fails to give notice
of such to the seller within a fixed or reasonable time.
o IN "SALE OR RETURN"
o 1. there is a resolutory condition.
o 2. this depends entirely on the will of the buyer.
o 3. ownership passes to the buyer on delivery but he may subsequently
revest it back to the seller.
o 4. risk of loss is borne by the buyer.
o IN A SALE ON TRIAL :
o 1. there is a suspensive condition.
o 2. this depends on the character or quality of the goods.
o 3. ownership remains to the seller until buyer signifies his approval.
o 4. risk of loss is borne by the seller.
71. In what instances where the seller reserves his ownership in a contract of sale of
specific goods?
o ART. 1503 -
o 1. where the goods are delivered to the buyer or to the carrier or other
bailee but the right of possession or ownership of the goods is reserved
until certain conditions have been fulfilled.
2. where the shipped goods and the B/L are deliverable to the seller or his agent.
3. where the shipped goods and B/L are deliverable to the order of the buyer but
possession of the B/L is retained by the seller.
72. what will happen as to the title of a buyer who purchased goods sold by a person
who is not the owner thereof and who does not have authority to sell them?
ART. 1505 - where 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 is by his conduct precluded from denying the seller’s authority to
sell.
73. what will happen to the title of a buyer who shall buy goods from a seller who has
voidable title thereto and such title has not yet avoided?
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. 1507 - it is a document of title in which it is stated that the goods referred
to therein will be delivered tothe bearer, or to the order of any person named in
such document.
Notice that the provisions as to the Negotiable Document of title are somehow
the same with the provisions as to the Warehouse Receipts Law. It is better to
read them jointly.
I had skipped the provisions of the Negotiable Document of Title and just
proceeded with ART. 1522.
78. 1. Where the seller delivers to the buyer a quantity of goods less than he
contracted to sell, what may the buyer do?
2. Where the seller delivers to the buyer a quantity of goods larger than he
contracted to sell, what may the buyer do?
3. Where the seller delivers the goods with goods of a different description not
included in the contract, what may the buyer do?
1. 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.
2. the buyer may accept the goods included in the contract and reject the rest.
3. the buyer may accept the goods included in the contract and reject the rest.
ART. 1529 - What are the instances where the unpaid seller loses his
possessory lien to the goods?
o ART. 1527 -
o (1) Where the goods have been sold without any stipulation as to credit;
o (2) Where the goods have been sold on credit, but the term of credit has
expired;
o (3) Where the buyer becomes insolvent.
o ART. 1529 -
o (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;
o (2) When the buyer or his agent lawfully obtains possession of the goods;
o (3) By waiver thereof.
o
o
83. When may the seller of the goods has the right of stopping them in transitu?
ART. 1530 - 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 goodsat any time
while they are in transit.
o The following are the requisites for the existence of the right:
o (1) The seller must be unpaid (Art. 1525.);
o (2) The buyer must be insolvent;
o (3) The goods must be in transit (Art. 1531.);
o (4) The seller must either actually take possession of the goods sold
or give notice of his claim to the carrier or other person inpossession (Art.
1532, par. 1.);
o (5) The seller must surrender the negotiable document of title, if any,
issued by the carrier or bailee (Ibid., par. 2.); and
o (6) The seller must bear the expenses of delivery of the goods after the
exercise of the right.
84. When are the goods considered in transit?
ART. 1535. the unpaid seller’s right of lien or stoppage in transitu is not affected
by any sale, or other disposition of the goods which the buyer may have made,
unlessthe seller has assented thereto.
If the goods are covered by a negotiable document of title, the right of stoppage
in transitu shall be defeated by the right of any third person who purchased for
value and in good faith the said document which has been negotiated to him.
88. When will the vendor have the right to withhold delivery in sale on credit?
ART. 1536 - if the vendee should lose the right to make use of the term.
o The debtor shall lose the right to make use of the period or term
under the following circumstances: IFIVA
o (1) When after the obligation has been contracted, he be-comes insolvent,
unless he gives a guaranty or security for the debt [price];
o (2) When he does not furnish to the creditor [vendor] the guaranties or
securities which he has promised;
o (3) When by his own acts he has impaired said guaranties or securities
after their establishment, and when through a for-tuitous event they
disappear, unless he immediately gives newones equally satisfactory;
o (4) When the debtor [vendee] violates any undertaking,in consideration of
which the creditor agreed to the period;
o (5) When the debtor [vendee] attempts to abscond.”
89. ART. 1539 -
1. if the sale of a real estate should be made with a statement of area and if the
buyer cannot possibly deliver the same which has been stated in the contract,
what should the buyer do?
2. The rescission, in this case, shall only take place at the will of the vendee,
when the inferior value of the thing sold exceeds one-tenth of the price agreed
upon.
90. If a greater area or number of immovable than that stated in the contract is
delivered to the vendee, what may he do?
ART. 1540 - the vendee may accept the area included in the contract and reject
the rest. If he accepts the whole area, he must pay for the same at the contract
rate.
1. such party may refuse to proceed with the contract or he may waive
performance of the condition.
2. If the other party has promised that the condition should happen or be
performed, such first mentioned party may also treat the non-performance of the
condition as a breach of warranty.
ART. 1546 - any affirmation of fact or any promise by the seller relating to the
thing is an express warranty if the natural tendency of such affirmation or
promise is to induce the buyer to purchase the same, and if the buyer
purchases the thing relying thereon.
1. Implied warranty of the seller that he has a right to sell and that the buyer shall
have and enjoy the legal and peaceful possession.
2. implied warranty that the thing shall be free from any hidden faults, defects, or
any charge or encumbrance not known to the buyer.
NO.
1. Eviction shall take place whenever by a final judgment based on a right prior to
the sale or an act imputable to the vendor, the vendee is deprived of the whole or
of a part of the thing purchased.
2. YES.
102. if eviction should take place, what are those which the vendee has a right
to demand to the vendor?
keyword: RICED
o (1) The return of the value which the thing sold had at the time of the
eviction, be it greater or less than the price of the sale;
o (2) The income or fruits, if he has been ordered to deliver them to the
party who won the suit against him;
o (3) The costs of the suit which caused the eviction and, in a proper case,
those of the suit brought against the vendor for the warranty;
o (4) The expenses of the contract, if the vendee has paid them;
o (5) The damages and interests and ornamental expenses, if the sale
was made in bad faith.
103. 1. If by reason of eviction, a part of the thing sold of such importance, in
relation to the whole, that he would not have bought it without said, what may the
vendee do?
2. when two or more things have been jointly sold for a lump sum or for a
separate price for each of them, and one or more of those things has been
deprived from the buyer, what shall he do?
He may ask for rescission of the contract, unless he should prefer appropriate
indemnity or if the non-apparent burden is recorded in the Registry of Property.
Within one year, to be computed from the execution of the deed. OR said one
year having elapsed, he may only bring an action for damages within one year to
be counted from the date of discovery of the non-apparent burden or servitude.
106. ART. 1561 - when shall the vendor be responsible for warranty against
hidden defects?
If such defects render it unfit the thing for the use for which it is intended or
should they diminish its fitness for such use to such an extent that had the
vendee been aware thereof, he would not have acquired it or would have given a
lower price for it, provided that these defects are invisible or if visible but the
vendee is not an expert to know them.
Redhibitory vice or defect is a defect in the article sold against which defect the
seller is bound to warrant.
2. Where the goods are bought by description from a seller who deals in
goods of that description.
A warranty of merchantability is a warranty that goods are reasonably fit for the
general purpose for which they are sold. On the other hand, a warranty of
fitness is a warranty that the goods are suitable for the special purpose of the
buyer which will not be satisfied by mere fitness for general purposes.
He is not bound to return them to the seller, but it is sufficient if he notifies the
seller that he refuses to accept them. If he voluntarily constitutes himself a
depositary thereof, he shall be liable as such.
118. ART. 1589 - In what cases will the vendee shall owe interest for the period
between the delivery of the thing and the payment of the price?
o (1) Should it have been so stipulated;
o (2) Should the thing sold and delivered produce fruits or income;
o (3) Should he be in default, from the time of judicial or extrajudicial
demand for the payment of the price.
119. ART. 1590 - When may the vendee be allowed to suspend the payment of
the price?
o (a) if he is disturbed in the possession or ownership of the thing bought; or
o (b) if he has a well-grounded fear that his possession or ownership would
be disturbed by a vindicatory action or foreclosure of mortgage. UNLESS
the vendor gives security for the return of the price or if it has been
stipulated that the vendee shall be bound to make such payment.
120. when will the vendee cannot suspend the payment of the price?
o (a) if the vendor gives security for the return of the price in a proper case;
o (b) if it has been stipulated that notwithstanding any such contingency, the
vendee must make payment (see Art. 1548,par. 3.);
o (c) if the vendor has caused the disturbance or danger to cease (see
Bareng vs. Court of Appeals, 107 Phil. 641 [1960].);
o(d) if the disturbance is a mere act of trespass; and
o(e) if the vendee has fully paid the price.
121. Read 1591, 1592, 1593.
122. What are the actions available in case of breach of the contract of sale of
goods?
o (1) action by the seller for payment of the price (Art. 1595.);
o (2) action by the seller for damages for non-acceptance of the goods.
o (3) action by the seller for rescission of the contract for breach thereof (Art.
1597.);
o (4) action by the buyer for specific performance (Art. 1598.);and
o (5) action by the buyer for rescission or damages for breachof warranty.
123. ART. 1595 - when shall the vendor have an action for the price of the
goods?
1. Where, under a contract of sale, the ownership of the goods has passed to
the buyer, and he wrongfully neglects or refuses to pay.
3. when the goods cannot readily be resold for a reasonable price and the buyer
wrongfully refuses to accept them even before the ownership in the goods has
passed.
124. ART. 1596 - when shall the seller maintain an action for damages against
the buyer?
The measure of damages is the estimated loss directly and naturally resulting in
the ordinary course of events, from the buyer’s breach of contract or where
there is an available market for the goods in question, the measure of damages
is the difference between the contract price and the market or current price at the
time or times when the goods.
125. ART. 1597 - when shall the seller have an action for rescission in contract
of sale of goods?
o 1. when the buyer has repudiated the contract of sale;
o 2. when the buyer has manifested his inability to perform his obligations
thereunder; and
o 3. when the buyer has committed a breach of the contract of sale.
NOTE : that in order for rescission to be given effect, there must be notice of
such by the seller to the buyer.
126. ART. 1598 - when shall the buyer have a right of action for specific
performance against the seller?
Where the seller has broken a contract to deliver specific or ascertained goods, a
court may,on the application of the buyer, direct that the contract shall be
performed specifically, without giving the seller the option of retaining the goods
on payment of damages.
127. ART. 1599 - what are the rights of the buyer in case there is a breach of
warranty?
o (1) Accept or keep the goods and set up against
the seller, the breach of warranty by way of recoupment in diminution
or extinction of the price;
o (2) Accept or keep the goods and maintain an action against the seller for
damages for the breach of warranty;
o (3) Refuse to accept the goods, and maintain an action against the seller
for damages for the breach of warranty;
o (4) Rescind the contract of sale and refuse to receive the goods or if the
goods have already been received, return them or offer to return them to
the seller and recover the price or any part thereof which has been paid.
NOTE: That only one of these remedies can be exercised by the buyer.
128. ART. 1599 - When can the buyer not allowed to rescind the contract of
sale?
2. if he fails to notify the seller within a reasonable time of the election to rescind,
or
As to the payment of the price, he shall cease to be liable for the price upon
returning or offering to return the goods or if the price has been paid by him, the
seller shall be liable to repay the price to the buyer.
As to the goods, the buyer shall thereafter be deemed to hold the goods as
bailee for the seller but subject to a lien to secure the payment of the price or of
any part of it.
o In other words:
o 1. it is by Common causes or those causes which are also the means of
extinguishing all other contracts like payment, loss of the
thing,condonation, etc.
o 2. by Special causes or those causes which are recognized by the law on
sales (such as those covered by Articles 1484, 1532, 1539, 1540,1542,
1556, 1560, 1567, and 1591.); and
o 3. by Extra-special causes or those causes which are given special
discussion by the Civil Code and these are conventional redemption and
legal redemption.
131. ART. 1601 - when shall conventional redemption takes place?
it is when the vendor reserves the right to repurchase the thing sold, with
the obligation to complywith the provisions of article 1616 and other stipulations
which may have been agreed upon.
An equitable mortgage is one which lacks the proper formalities, form or words,
or other requisites prescribed by law for a mortgage, but shows the intention of
the parties to make the property subject of the contract as security for a debt and
contains nothing impossible or contrary to law.
o IN A MORTGAGE:
o 1. ownership is not transferred but the property is merely subject to a
charge or lien as security for the compliance of a principal obligation,
usually a loan.
o 2. the mortgagor does not lose his interest in the property if he fails to pay
the debt at its maturity.
o 3. the mortgagee has the right to foreclose.
136. What are the requisites of equitable mortgage?
o 1. that the parties entered into a contract denominated as a contract of
sale with a right of repurchase or purporting to be an absolute sale (Art.
1604.); and
o 2. that their intention was to secure an existing debt by way of mortgage.
137. In case of doubt, a contract purporting to be a sale with right to repurchase
shall be construed as WHAT?
138. what is the effect where the contract is held as an equitable mortgage?
o (1) Formal requirements of mortgage deemed complied with.
o (2) Contract subordinate to a subsequent registered mortgage.
o (3) Title of property remains in supposed vendor.
o (4) Remedy of creditor is to foreclose.
o (5) Conveyance of land not to affect mortgagor’s right of redemption.
139. ART. 1605 - what may the apparent vendor do in order to correct a
contract referred to in articles 1602 and 1604?
141. what is the prescriptive period for the exercise of conventional redemption
mentioned in ART. 1601?
The vendor may still exercise the right to repurchase within 30 days from the final
judgment was rendered in a civil action.
How about if such stipulation is agreed before the expiration of the period of
redemption?
It may be extended but in no case be extended for more than 10 years; otherwise
the extension is void as to the excess.
143. ART. 1610 - when can a creditor of the vendor make use of the seller's
right of redemption against the vendee?
The creditor of the vendor may not make use of the seller's right of redemption
against the vendee, until after he exhausted the property of the vendor.
ART. 1612. If several persons, jointly and in the same contract, should sell an
undivided immovable with a right of repurchase, none of them may exercise
this right for more than his respective share.The same rule shall apply if the
person who sold an immovable alone has left several heirs, in which case each
of the latter may only redeem the part which he may have acquired.
ART. 1614. Each one of the co-owners of an undivided immovable who may
have sold his share separately, may independently exercise the right of
repurchase as regards his own share, and the vendee
cannot compel him to redeem the whole property.
ART. 1615. If the vendee should leave several heirs,the action for redemption
cannot be brought against each of them except for his own share, whether the
thing be undivided, or it has been partitioned among them.But if the inheritance
has been divided, and the thing sold has been awarded to one of the heirs, the
action for redemption may be instituted against him for the whole. (1517)
145. ART. 1616 - What should the vendor do in order to avail for himself the
right of repurchase?
o 1. to return to the vendee the price of the sale.
o 2. return the expenses of the contract and any other legitimate payments
made by reason of the sale.
o 3. pay the necessary and useful expenses made on the thing sold.
146. 1. Upon the exercise of the right to repurchase. will the encumbrances of
the thing sold de retro be passed to the vendor a retro?
2. In the event that the right of repurchase has been exercised, may a vendor a
retro eject the tenants who are allowed by the vendee a retro to lease the thing
sold?
o ART. 1618.
o NO. The vendor who recovers the thing sold
shall receive it free from all charges or mortgages constituted by the
vendee, but he shall respect the leases which the latter may have
executed in good faith, and in accordance with the customs of the
place where the land is situated.
147. LEGAL REDEMPTION
ART. 1619 - Define Legal Redemption.
ART. 1619. Legal redemption is the right to be subrogated, upon the same terms
and conditions stipulated in the contract, in the place of one who acquires a thing
by purchase or dation in payment, or by any other transaction whereby
ownership is transmitted by onerous title.
2. What is the rule if two or more co-owners desire to exercise said right?
o ART. 1620 -
o 1. YES, he may do so provided that he pays the price of thing as paid by
the third person to acquire it, however, if the price is grossly excessive, he
may pay only a reasonable price therefor.
151. What are requisites in order for a co-owner exercise the right of legal
redemption mentioned in ART. 1620?
keyword: CATP
o 1. there should be co-ownership.
o 2. there must be alienation of all or any of the share of the co-owners.
o 3. the sale must be to a third person.
o 4. the sale must be before partition.
o ADDITIONAL NOTES:
o The sale must be made to a third person. A third person, within the
meaning of Art.1620, means any person who is not one of the co-owners.
o Hence, if the sale was made to a co-owner, then ART. 1620 cannot be
applied.
152. ART. 1621 - when can the owners of adjoining lands have the right of
legal redemption?
o The owners of adjoining lands shall also have the right of
redemption when:
o 1. a piece of rural land is alienated; and
o 2. the area of such land does not exceed one hectare, unless the
grantee/buyer does not own any rural land. (meaninig if the buyer
already owns other rural land, the adjacent/adjoining landowner may
exercise the right of redemption but if he does not, the right of legal
redemption cannot be exercised.)
o 3. The adjacent or adjoining lands must not be separated by brooks,
drains, ravines, roads and other apparent servitudes, for if so, the right of
redemption cannot be exercised.
153. ART. 1621(last par.) -
what is the rule if there are two or more landowners who desire to exercise the
right of redemption at the same time?
If both have the same area, the one who requested the redemption shall be
preferred.
154. What are the requisites for the exercise of the right of legal redemption of
the adjacent landowner?
o 1. both land of the owner exercising the right and land sought to be
redeemed must be rural.
o 2. the lands must be adjacent/ adjoining.
o 3. there must be alienation.
o 4. the area of the land alienated must not exceed 1 hectare.
o 5. the grantee/buyer must already own any other rural land.
o 6. the adjoining lands must not be separated by BDRRO.
155. Define rural land.
If the re-sale has been perfected, the owner of the adjoining land shall have a
right of redemption, also at a reasonable price.
2. the owner whose intended use of the land in question appears best justified
shall be preferred.
Give the requisites in order for ART. 1622 (referred in the preceding card) to
apply?
Pre-emption, which has been defined as the act or right of purchasing before
others.
Redemption, which is exercised after the sale has been perfected against the
vendee.
o The Following are the requisites in order for ART. 1622 be applicable:
o (a) The one exercising the right must be an adjacent owner;
o (b) The piece of land sold must be so small and so situated that a major
portion thereof cannot be used for any practical purpose within a
reasonable time; and
o (c) Such urban land was bought by its owner merely for speculation.
158. Distinguish rural land from urban land.
“Rural” means of, or pertaining to, the country as distinguished from a city or
town.
Urban lands are used for the purpose of dwelling, industry or commerce.
ART. 1623 - It shall exercised within 30 days from notice in writing by the
prospective vendor or by the vendor, as the case may be.
Agency involves representation, not transmission wherein the agent acts for the
principal.
Substitution is the change of a new debtor for the previous debtor with the credit
remaining in the same creditor.
o Subrogation is the change in the person of the creditor with the credit
being extinguished.
o
o
161. What is the duration of the assignor's liability when he guaranteed the
debtor's solvency?
ART. 1629 - it shall last for one year only, from the time of the assignment if the
period had already expired.
If the credit shoud be payable within a term which has not yet expired, the liability
of the assignor shall cease one year after the maturity,
ART. 1638. By the contract of barter or exchange one of the parties binds himself
to give one thing inconsideration of the other’s promise to give another thing.