Section 2 - Delivery of the Thing Sold

(Article 1497-1544)
Article 1521:
The article provides for:
1. Place of delivery (this depends on the…)
a) Agreement
i. Express: Clearly stated in the contract
ii. Implied: inferred from the circumstances or conduct of the parties
b) If no agreement - get the USAGE of trade
i. Usage of Trade is the usual course of business ni Seller, door to door ang method nila,
automatic na ganun lapa (in this case sa mismong residence ni Buyer)
ii. If ever naman like Pickup yung Usage of Trade nila (si Buyer na mismo kukuha sa Shop
ni Seller)
c) If no usage & no agreement - the BUYER must get them at the SELLER’S Business place
i. In any other case sa Residence ni Seller

Exception: Contract of sale of specific goods - in the place where the specific goods are found
- Where the contract was made, that’s the place for delivery

NOTE: there is sufficient delivery when a fortuitous event prevents delivery at the actual place agreed
upon, forcing a delivery at a place near the original one. Further there is also sufficient delivery when
the original place is changed but the buyer accpeted the goods at a different place without complaint
so long as the seller was in good faith.

2. Time of delivery
a) Delivery (if to be made by seller) must be within a REASONABLE TIME (if not express
agreement)
i. So kung walang agreement basta dapat within reasonable time
b) Circumstances to consider to conclude what reasonable time is:
i. Character of the goods
1. Baka eto yung limited shelf life/freshness ng isang product
2. Imagine mangga, yung hilaw na fruit baka maging hinog na
ii. Purpose intended
1. Baka time-sensitive product, Birthday cake, tas lumipas na birthday nung client
iii. Ability of seller to produce the goods
1. Production capacity ni seller at kung meron ba sa kanya yung necessary raw
materials
iv. Transportation facilities
1. Gaano kadali magtransport
2. Baka yung mode of transfer rin (Air, Sea, Land)
v. Distance thru which the goods must be carried
1. Gaano kalayo si Seller & Buyer sa isa’t isa
2. Must take into consideration delays due to far distances
vi. Usual course of business in that particular trade
1. Meron bang historical trades kay buyer, if so pwede gawing basis yun
3. Where the goods at the time of sale are in the possession of a third person
a) The Seller has not fulfilled his obligations until the 3rd person acknowledges to the buyer
that he holds the goods on the buyer’s behalf

Note: The Seller has a duty to put goods in deliverable condition

- Buyer is not bound to paying if Seller doesn’t comply to his obligations
ARTICLE 1522:
- Provides for the rules when the quantity is less or more that what was agreed

Rules when the Quanitity is LESS that that Agreed Upon

A. Buyer may Reject
B. Or buyer may ACCEPT what has been delivered at the Contract rate
a) Knowing na di na macocompleted ni Seller yung delivery. For example sasabihin ni Seller na:
sorry Buyer nagshutdown production namin, eto na lang mabibigay ko
i. Example: 100 Kilo or rice na 1k peso each kilo
ii. 50 lang nadeliver edi kalahati lang din need nya bayarin, so 50k peso
b) If d naman alam ni Buyer at nagamit nya na, Fair Value lang ipapay ni Buyer
i. Imbes na 50k dun sa 50 Kilo, it’ll be 45k peso nalang (example)
ii. Never dapat over 50k peso yung Fair Value

Rules when the Quantity is MORE than that Agreed Upon

A. Buyer may REJECT ALL
B. Buyer may ACCEPT the goods agreed upon and reject the rest
C. If he gets all, he must pay for the excess at contract rate
a) Same example, pero nadeliver is 120kilos so 120k Peso need ipay

- Dito sa case nato dapat merong prior agreement sa fixed amount to determine kung
nagexcess sya, same din dun sa Less

Rules when the Quality is Different:

- eto yung nagmix si Seller ng ibang quality na agreed upon sa dineliver nya
The buyer may:
A. Accept the goods which are in accordance with the contract
B. Reject the rest

Note: If the sale is indivisible, the buyer may reject the whole of the goods

Article 1523
- Deals with “delivery to a carrier on behalf of the buyer”
- General Rule: delivery to carrier is delivery to buyer, if it is the duty of the seller to send the
goods to the buyer

Kinds of Delivery to Carrier

1. C.I.F. (Cost, Insurance, Freight)
- since the selling price includes insurance and freight, it is understood that said insurance &
freight should now be paid by the seller; all charges up to place of destination must be paid by
the seller
2. F.O.B. (Freed on Board) there are three types:
a) F.O.B. at the place of shipment - the buyer must pay the freight
b) F.O.B. alongside the vessel - from the moment the goods are brought alongside the vessel,
the buyer must pay for the freight or expense
c) F.O.B. at the place of destination - the seller must pay the freight

GR (General Rule) in free on board or free alongside sale: property PASSES as soon as the goods are
delivered aboard the carrier or alongside the vessel, and that the buyer as the owner of the goods is
to bear all expenses after they are so delivered

Note however: F.O.B. or F.A.S. may be used only in connection with the fixing of the price, and in such
a case, they will NOT be construed as fixing the place of delivery
Article 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

Q: what is the effect if period is fixed for payment

A: If a period has been fixed for the payment the seller must deliver the thing sold even if said period
has not yet arrived. He will then have to wait for the end of the period before he can demand the
price, except if the buyer has lost the benefit of the term.

- Basically, if fixed period at maaga nagdeliver si Seller, need nya iwait out yung deadline bago sya
pwede magask ng payment
- Buyer losing benefit of the term, is like nawala nya yung nadeliver na item, nabankrupt/insolvent sya.
In this case sabi eh pwede na agad magask si Seller ng payment regardless if nagpass Deadline

Articl 1525
Provides for the meaning of an UNPAID SELLER:
- If only part of the price has been paid or tendered
- When a bill of exchange or other negotiable instrument is received as conditional payment,
it means that the transaction is dependent on the successful clearance of that instrument. If
the condition is broken, several implications arise:
 Dishonor of the Instrument: If the bill or instrument is dishonored (i.e., it is not paid upon
presentation), the seller may not be able to rely on it as payment
 Insolvency of the Buyer: If the buyer becomes insolvent, the seller's ability to recover payment
may be compromised, even if the instrument was originally accepted in good faith or other
condition

- In the case of Breach of Conditional payment, the Seller may reverse the transaction

Q: who are considered sellers?

A: it indcludes (1) an agent of the seller to whom the bill of lading has been indorsed, (2)
consignor/agent who has himself paid, or is directly responsible for the price, (3) or any other person
who is in the position of a selelr

Payment of part of price - payment of part only of the price does not destroy a seller’s lien
(2 Wilhiston, op.cit., pp 96-76). The seller remains an unpaid seller even if title has passed to buyer

Article 1526
Rights of an unpaid seller:
1. Possessory lien: A lien on the goods or right to retain them for the price while he is in possession
of them
a) This just makes the seller retain possession of the goods as security for the purchase price
b) In case nadeliver na, while his Lien on the goods is lost, meron parin syang lien on the price
2. Right of Stoppage in Transitu: available aftering Seller parted with the possession and Buyer has
been gone insolvent
3. Right of resale as limited by this Title
4. Right to rescind the sale as likewise limited by this Title

Note: In addition if he has yet to pass ownership to buyer he has a right to withhold delivery similar to
and co-extensive with his right no.1 & 2

Lien: A legal right to keep possession of the goods until the obligation (in this case, payment) is
fulfilled
Article 1527
When seller has possessory lien (retain possession of them until payment or tender of the price in
following cases:
 Where the goods have been sold without any stipulationa as to credit
 In this case since walang credit, upon transfer of possession, Seller is entitled to the
payment of the goods
 Where the goods have been sold on credit, but the term of credit has expired
 Need magexpire yung term of credit, the seller’s right of lien may be exercised
 Where the buyer becomes insolvent.

Article 1528
GR: Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on
the remainder
Exception: if the delivery of the part is intended as symbolical delivery of the whole, and, therefore, a
waiver of any right of retention as to the remainder, the lien is lost.

Article 1529
When Unpaid Seller’s lien is lost:
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
a) Similar to the Delivery to Carrier is Delivery to Buyer
2. When the buyer or his agent lawfully obtains possession of the goods
a) If the item is already owns possession of the item, note the Lien is not destroyed if they
took it without Seller’s consent
b) if the goods are put into the possession of the buyer merely for the purpose of allowing the
latter to examine them, this would not amount to an assent to a surrender of the lien.
3. By waiver thereof.
a) Seller’s express agreement to surrender his rights

The lion lost is only the POSSESSORY LIEN and not the vendor’s lien on the Price

Article 1530
Stoppage in Transitu
- When Buyer becomes insolvent, possesion resumes back to the Seller as if he has not parted with it.
- May be done by actually reclaiming it or by giving notice of his claim to the carrier/other bailee in
possesion
- The buyer’s insolvency must be juridically declared

Article 1531
Goods are considered in transit when:
1. From the time when they are delivered to a carrier by land, water, or air, or other bailee for the
purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery
of them from such carrier or other bailee
2. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of
them, even if the seller has refused to receive them back

Goods are no longer in transit when:

1. If the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival at the
appointed destination;
2. If, after the arrival of the goods at the appointed destination, the carrier or other bailee
acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in
possession of them as bailee for the buyer or his agent; and it is immaterial that further
destination for the goods may have been indicated by the buyer
3. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in
that behalf.
Note: right to get back the goods exists only when the goods are still in transitu

Taking of the property in transit by an unauthorized agent of the buyer does not extinguish the right
to stoppage at transitu

Article 1532
Provides for how the right of stoppage in transitu may be exercised:
 Obtaining actual possession of the goods
 Giving notice of his claim to the carrier or other bailee in whose possession the goods are

There must be an intent to repossess the goods

Q: to whom should the notice be given?

A: Either (1) to the person in actual possession of the goods, or (2) to his principal

Effects of evoking this right:

1. The goods are no longer in transitu
2. The contract of carriage ends; instead the carrier now become a mere bailee, and will be liable as
such
3. The carrier should not deliver anymore to the buyer or the latter’s agent; otherwise, he will clearl
be liable for damages
4. The carrier must redeliver to, or accordin to the direction of the seller

Article 1533
Right of resale exists:
1. Perishable goods
2. Express stipulation - sinabi mismo ni seller
3. Unreasonable default

- Seller shall not thereafter be liable to the original buyer upon the contract of sale for any profit
made by such resale, but may recover from the buyer damages for any loss occasioned by the breach
of the contract of sale.

Article 1534
This article refers to the right to RESCIND the transfer of Title and to Resume the ownership of the
Goods, applies in case there has been:
1. Express stipulation or reservation
2. Unreasonable default
Note: Damage may be received for breach in contract

Q: what should be done in order to rescind the transfer of title?

A: There must be notice to the buyer or there must be an overt act showing an intention to rescind
(ex. Replevin suit is an implied recission of the sale of the goods sought to be recoverd)

Replevin is an action seeking return of personal property wrongfully taken or held by the defendant.

Article 1535
Effect if buyer has already sold the goods:
 Generally, the unpaid seller’s right of LIEN or Stoppage in Transitu remains if even if the buyer
has sold otherwise disposed of the goods
 Exceptions:
 When the seller has given his consent thereto
 If, however, the goods are covered by a negotiable document of title, the seller’s lien
cannot prevail against the rights of a purchaser for value in good faith to whom the
document has been indorsed.
Article 1536
The vendor is not bound to deliver the thing sold in case the vendee should lose the right to make use
of the term as provided in article (Art. 1198)
1. “When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debts
2. When he does not furnish to the creditor [vendor] the guaranties or securities which he has
promised
3. When by his own acts he has impaired said guaranties or securities after their establishment, and
when through a fortuitous event they disappear, unless he immediately gives new ones equally
satisfactory;
4. When the debtor [vendee] violates any undertaking, in consideration of which the creditor agreed
to the period;
5. When the debtor [vendee] attempts to abscond.”

EXAMPLE: S sold to B a car on credit. S has a right to withhold delivery in any of the following
situations:
1. B becomes insolvent, unless B gives sufficient guaranty or security; or
2. B promised to mortgage his house to secure the purchase price and he failed to furnish said
security as promised; or
3. If the payment of the purchase price is secured by a mortgage on the house of B, but the house was
partially burned because of B’s fault; or was totally destroyed without B’s fault, unless B gives a new
security, equally satisfactory; or
4. Where in consideration of the sale on credit, B obliged himself, say, to repair the piano of S, and B
failed to comply with such undertaking; or
5. Where B shows an intent not to pay the price after the car is delivered to him.

Kinopya ko lang book :)

Article 1537
 Vendor is bound to deliver the thing sold and its acccession and accessories
 All the fruits shall pertain to the vendee from the day on when the contract was perfected.
However, a contrary stipulation may be agreed upon, or a later date may be set.

Artilce 1538
Provides for the effect of loss, deterioration or improvements before delivery (Article 1189):
1. If lost without fault of vendor: obligation shall be extinguished
2. If lost (perishes, goes out of commerce, disappears in such a way that it cannot be recovered )
through fault of vendor: obliged to pay damages
3. When the thing deteriorates without fault of vendor: impairment is to be borne by buyer
4. Detoriates through fault of vendor: buyer may choose between the rescission of the obligation or
its fulfillment, with indemnity for damages in either case
5. If the thing is improved by nature or by time, the improvement shall inure to the benefit of the
buyer
6. If it is improved at the expense of the debtor, he shall have no other right than that granted to the
usurfructuary

Article 1539
 Refers to sale of real estate BY THE UNIT (Unit price contract)
 In this case, payment will be made only on the basis of contractual items actually performed, in
accordance with the given plans and specifications
 If what can be delivered is less than what was in the contract the vendee may choose between:
 A proportional reduction of the price
 Rescission of the contract (the lack in area be not less than 1/10 of that state; or vendee
would not have bought had he known of it’s smaller or inferior quality)
 The same shall be done, even when the area is the same, if any part of the immovable is not of
the quality specified in the contract.
 Rescission shall only take place at the will of the vendee
Article 1540
If area is actually greater than what was stipulated, vendee may:
1. Accept the area included in the contract and reject the rest
2. Or if he accepts the whole are, he must pay for the excess at the contract rate

Article 1541
The provisions of Articles 1539 and 1540 are applicable to both private (voluntary) and judicial sales
when the immovable sold is lacking in area or is of inferior quality or is greater in area than stated in
the contract.

Article 1542
 Mistake in area stated in contract immaterial. — If the sale is made for a lump sum, and not so
much per unit of measure or number, the cause of the contract is the thing sold independent
and irrespective of its number or measure.
 Vendor is obligated to deliver all the land included within the boundaries, regardless of whether
the real area should be greater or smaller than that recited in the deed

Q: what happens if vendor does not deliver what is included in boundaries

A: buyer can either rescind the contract or he may pay a reduced proportional price

Q: what happens if the land included in the boundaries happens to be less that what was stipulated?
A: Buyer cannot rescind the contract and he is not entitled to pay a reduced price for the civil code
presumes that purchaser has ascertained its area and quality before the perfection of the contract

- Inaassume ng Korte na nainspect na ni Purchaser yung general land, and while Si vendor nagkamali
sa inistate na Area, wala paring Right si Vendee dahil nainspect nya na.

“More or Less”: used in connection with quantity or distance, are words of safety and caution,
intended to cover some slight or unimportant inaccuracy

Articl 1543
The actions arising from articles 1539 and 1542 shall prescribe in six months, counted from the day of
delivery

Article 1544
Provides for the rules of preference in case of double sale
1. If the property sold is movable, the ownership shall be acquired by the vendee who first takes
possession in good faith
2. If the property sold is immovable, the ownership shall belong, in the order hereunder stated, to:
a) The vendee who first registers the sale in good faith in the Registry of Property (Registry of
Deeds) has a preferred right over another vendee who has not registered his title even if
the latter is in actual possession of the immovable property.
b) Registry > Actual Possession
c) In the absence of Registry we go to First Posession
d) In the absence of both Registry & Possession, we go to vendee who presents the oldest title
(who first bought the property) in good faith.

Note:
1. There must be GOOD FAITH
2. Registration here requires actual recording: if the land is registered under the Land Registration Act,
and it is sold but the subsequent sale is registered under Act 3344 instead, as amended, such sale is
not considered registered.
3. The registration of a forged deed of sale cannot grant the preference adverted to in this Article in
as much as among other things, there were NO GOOD FAITH
4. Possession here is either actual or constructive

Napakarami pa pero sa book nyo na lapa tignan :)

 SECTION 3 - Conditions & Warranties

Article 1545
 Applies only to CONDITIONAL sales
 Articles speaks of presence of conditions & warranties:
 Conditions may be waived
 Condition may be considered warranties
1. If condition is not performed, party may refuse to proceed with the contract or he may waive
performance of the condition
2. If the condition is in the nature of a promise that it should happen, the non-performance of such
condition may be treated by the other party as a breach of warranty. (see Art. 1546.)
Ex. B (buyer) entered into a contract with S for the purchase of certain machinery. The arrival
of the goods to be shipped from Japan is made a condition of the bargain, there being no promise by
S that the goods will arrive. If the machinery does not arrive, S is not guilty of breach of contract.

But if S promises or warrants that the machinery will be shipped or that it was already on its
way, the non-arrival constitutes a breach of contract. B is entitled to claim damages

Article 1546
Express Warranty: any affirmation of fact or any promise by the seller relating to the thing is an
epxress 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

Note: di need specifically sabihin yung word na “warranty” or “warant” para maconsider as Express
Warranty

Ex. S sells to B an automobile for P90,000.00, telling the latter that it is a 1977 model and that it is
worth about P100,000.00. B sees the automobile and after a test run, expresses satisfaction over its
condition. The automobile is really of 1976 vintage and is only worth about P80,000.00.

In this case, B has no right of action for breach of warranty because the inducing cause of the
purchase is not the erroneous statement as to its model and value, but B’s reliance on its appearance
and demonstrated condition. But the statement that the automobile is in excellent running condition
constitutes a violation of warranty if such is not the fact.

[Bat parang ganto questions nung exam?]

Effects of Expressions of Opinion

1. Expressions or advertisements like: “This drink will make you young” are mere sales talk
a) They are not warranties because the buyer knows they are mere exaggerations
2. For example if S found a ring, believing it to be a diamond sold it to B. Not knowing it was glass,
then S is not liable for expressing an opinion, as it was in Good faith.
a) If S however was an expert, then it is construed as a warranty

1547
In a contract of sale, unless a contrary intention appears, there is what is called implied warranties
against EVICTION and against HIDDEN DEFECT
1. Implied warranty as to seller’s title. — that the seller guarantees that he has a right to sell the
thing sold and to transfer ownership to the buyer who shall not be disturbed in his legal and
peaceful possession thereof (Art. 1548.)
2. Implied warranty against hidden defects or unknown encumbrance. — that the seller guarantees
that the thing sold is free from any hidden faults or defects or any charge or encumbrance not
declared or known to the buyer (Art. 1561.);
3. Implied warranty as to fitness or merchantability. — that the seller guarantees that the thing
sold is reasonably fit for the known particular purpose for which it was acquired by the buyer or,
where it was bought by description, that it is of merchantable quality. (Art. 1562.)
Nature of Implied warranty: is natural, not an essential, element of contract.

When implied warranty not applicable.

1. “As is and where is” sale. — The phrase “as is and where is” (which has been adopted from
dispositions of army surplus property) means nothing more than that the vendor makes no warranty
as to the quality or workable condition of the goods, and that the vendee takes them in the
conditions in which that they are found and from the place where they are located.
2. Sale of second-hand articles. — There is no implied warranty as to the condition, adaptation,
fitness or suitability for the purpose for which made, or the quality of an article sold as and for a
second-hand article.
3. Sale by virtue of authority in fact or law. — No warranty of title is implied in a sale by one not
professing to be the owner

Subsection 1 - Warranty in Case of Eviction

Article 1548.
Q: When does Eviction take place?
A: whenever by a final judgement 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.

 Warranty in case of eviction is a natural elemental of a contract, hence, vendor answers for the
eviction
 Vendor’s Liability for warranty against eviction is Generally Waivable and may be renounced by
the vendee
 Since the government cannot be held liable the owner of the property sold under execution at
the instance of the judgement creditor is liable for eviction, unless otherwise decreed in the
judgement
 The buyer is allowed to enforce the warranty against the seller or against the seller of his own
immediate seller
 Even if buyer does not appeal judgement for eviction, seller remains liable for eviction (For as
long as the buyer is defeated in any case, the seller would be liable)

Note: What is important is the imputability or fault of the seller, hence, seller is still liable even if the
act be made after the sale (Ex. Double Sale)

Responsibility of Seller
Responsible for;
1. His own act, and
2. Those of his predecessors-in-interest
He is not responsible for dispossession due to:
1. Acts of imputable to the buyer himself
2. Fortuitous events
a) For example, bumagyo nasira yung apartment mo, no choice si Vendor na ievict ka. Alangan
naman kasuhan mo pa sya

Essential Elements for Eviction

1. The vendee is deprived in whole or in part of the thing purchased
2. There is final judgement
3. The deprivation was by virtue of a right prior to the sale affected by the seller
4. The vendor was summoned in the suit for eviction at the instance of the vendee (Art. 1558.); and
5. There is no waiver on the part of the vendee

Plaintiff in Suit
- In general, it is only the buyer in good faith who may sue for the breach of warranty against eviction
Defendant in Suit
- Suit for breach can be directed only against the IMMEDIATE seller, not sellers of the seller unless
such sellers had promised to warrant in favor of the later buyers or unless immediate seller has
expressly assigned to the buyer his own right to sue his own seller

Article 1549
The vendee need not appeal from the decision in order that the vendor may become liable for
eviction
- However, the decision for the court must be FINAL

Article 1550
When adverse possession had been commenced before the sale but the prescriptive period is
completed after the transfer, the vendor SHALL NOT be liable for eviction

Effect of Prescription
By prescription, one acquires ownership and other real rights through the lapse of time in the manner
and under the conditions prescribed by law. In the same way, rights and actions are lost by
prescription. (Art. 1106.)
1. Completed before Sale: The vendee may lose the thing purchased to a third person who has
acquired title thereto by prescription. When prescription has commenced to run against the
vendor and was already complete before the sale, the vendee can enforce the warranty against
eviction
2. Completed after sale. — Even if prescription has started before the sale but has reached the
limit prescribed by law after the sale, the vendor is not liable for eviction.

Q: Why is this so?

A: because the tile arising out of adverse possession is not yet perfected, in which case, the vendee
through the use of diligence could efficiently interrupt the running of the prespictive period

Exception: If the property sold, however, is land registered under the Torrens system, Article 1550 will
have no application. Under the Torrens system, ownership of land is not subject to prescription.

Article 1551
If the property is sold for nonpayment of taxes due and not made known to the vendee before the
sale, the vendor is liable for eviction.
- required, however, that at the time of the sale, the non-payment of taxes was not known to the
vendee.

Article 1552
The judgment debtor is also responsible for eviction in judicial sales, unless it is otherwise decreed in
the judgment.

Judgement Debtor
- 1549 ay hindi applicable sa kanya, however responsible sya for eviction
- May right si buyer to recover price paid with interest

Judgement Creditor
- If the sale was effected by the judgment creditor, the latter should not be permitted to retain the
proceeds of the sale, at the expense of the purchaser.
Article 1553
Provides for the effect of stipulation waiving liability for eviction:
 If seller was in Good Faith - The exemption is Valid, but without prejudice to Art. 154
 If seller was in Bad Faith - stipulation is Void

Article 1554
Waiver by the buyer may have been made:
 WITHOUT knowledge of rish of eviction (waiver consciente): Presumption
 WITH knowledge of risk of eviction (waiver intencionada): Waiver mus be clearly Proved

Effects of Waiver
1. In the first case, VALUE at the Time of Eviction should be returned (why? Solution indebiti)
2. In the second case, nothing need be returned. PROVIDED that said stipulation is understood by the
parties merely pro forma, and PROVIDE further that it is proved that the vendor never intended to be
bound by said warranty

Article 1555
In case of eviction, the vendee shall have the right to deman of the vendor:
1. Return the VALUE which the thing sold had at the time of the eviction
2. INCOME or FRUITS (should be declared or ordered to)
3. COST OF SUIT which caused the eviction (does not include transportation and other incidental
expenses)
4. EXPENSES of the contract, if vendee has paid them
5. DAMAGES & INTERESTS and ornamental expenses, if the sale was made in BAD FAITH

Q: why is rescission not a remedy in case of TOTAL eviction?

A: because vendee can no longer restore the subject matter of the sale to the vendor. Note that there
should be mutual restituition in case of rescission

Articl 1556
This article deals with a case of Partial Eviction
Remedy her is EITHER:
1. Rescission
a) If one chooses rescission, there should be no new encumbrances, like a mortgage
b) Note ulit, sa partial lang ang rescission bawal sa Total eviction
2. Enforcemenet of warranty
a) If walang encumbrances, eto lang remedy

Alternative rights of vendee

1. When the vendee is deprived of a part of the thing sold if such part is of such importance to the
whole that he would not have bought the thing without said part (par. 1.); or
2. When two or more things are jointly sold whether for a lump sum or for a separate price for each,
and the vendee would not have purchased one without the other.

Article 1557
 Finality of judgement is necessary before one can enforce warranty
 A judgement becomes final if on appeal, the deicision decreeing the eviction is affirmed; or if
within the period in which to appeal, no appeal was made

Note: Eviction may take place by virtue of a final judgment of an administrative office or board, and it
is not indispensable that it be rendered by a court, provided it was rendered by competent authority
and in conformity with the procedure prescribed by law.
- So hindi specifically need na court ang magsabi
Article 1558
 The vendor shall not be obliged to make good the proper warranty, unless he is summoned in
the suit for eviction at the instance of the vendee
 This is preparation for the suit - a condition sine qua non

Note: the notice must be the notice for the suit of eviction, NOT the notice in the suit for the breach
of warranty

Q: why is it necessary to serve the summons?

A: objective of summon is to give the vendor an opportunity to intervene and defend the title that he
has transferred, for, after all, he alone would know the circumstances or reasons behind the claim of
the plaintiff and be in a position to defend the validity of his title.

Article 1559
The defendant vendee shall ask that the vendor be made a co-defendant
- within the time fixed in the Rules of Court

In an eviction suit, it is permissable for the buyer to file a cross-claim against the seller for the
enforcement of the warranty should the buyer lose. If the buyer wins, there is no necessity for the
enforcement of the warranty since there has been no breach thereof
- This article applies only when the buyer is the DEFENDANT

Article 1560
Provides for the rules in case of NON-APPARENT SERVITUDES (hidden defect- but remedy is the
similar to the provided in case of eviction):
 Remedies: if within a year
 Rescission
 Damages
 If after one year
 Damages only

Q: what is the effect if the burden or easement is registered

A: This operates as a constructive notice to the vendee. Hence, the vendor is relieved from liability
unless there is an express warranty that the immovable is free from any such burden or encumbrance.
If the burden is known to the vendee, there is no warranty.
 Subsection 2 - Warranty Against Hidden Defects of, or Encumbrances Upon, the Thing Sold

Aricle 1561
Vendor shall be responsible for warranty against the hidden defects

Requisites to Recover because of hidden defects

1. The defect must be hidden (not know and could not have bene known)

Note: the defect need not be hidden if vendee is an expert who, by reason of his trade or profession,
should have known the defect.
Further note that difference in grade or quality does not necessarily mean that the defect is hidden

2. The defect must exist at the time the sale was made
3. The defect must be important (render thing UNFIT or Consideredable DECREASES FITNESS)

Note: The use must have been stated in the contract itself, or can be inferred from the measure of the
object or from the trade or occupation of the buyer

4. The vendee must give notice of the defect to the vendor within a reasonable time (Art. 1586.);
5. The action for rescission or reduction of the price must be brought within the proper period — 6
months from the delivery of the thing sold (Art. 1571.) or within 40 days from the date of the delivery
in case of animals (Art. 1577, par. 1.); and
6. There must be no waiver of warranty on the part of the vendee. (Art. 1548, par. 3.)

Article 1562
Implied warranty or condition as to the quality or fitness of the goods in the following cicumstances:
(refer to provision)
 Buyer makes known to the seller the particular purpose for which the goods are acquired and
buyer relies on the seller’s skill or judgement, there is an implied warranty that the goods shall
be reasonably fit for such purpose
 Goods are brought by description from a seller who deals in goods of that description, there is
an implied warranty that the goods shall be MERCHANTABLE quality

Q: What does Merchantable quality mean?

A: It means fit for the GENERAL PURPOSE of a thing, and not necessarily the particular purpose for
which it has been acquired

Note: where the agreement involved is the Quality of goods alone, the obligation is absolute and does
not depend upon the quality of the goods delivered.

Article 1563
In the case of contract of sale of a specified article under its PATENT or other TRADE NAME, there is
NO WARRANTY as to its fitness for any particular purpose, unless there is a stipulation to the
contrary

Example: B went to Western Motors, Inc. to buy a car. After he was shown cars of different models
and makes, he chose a Cougar car model 1982. B intended to enter the car in a race but this fact was
not made known to the seller.

If the car should not run as fast as B had expected, Western Motors, Inc. is not liable because in
buying the Cougar car, B relied upon his own judgment. But if the seller was informed of the purpose
of B and B was assured that the car had a maximum speed of, say, 150 kilometers per hour, there is
an express warranty for a particular purpose and Western Motors is liable if the car should not be fit
for such purpose.

- So kung d sinabi ni buyer kung for what purpose yung bibilhin, di liable si Seller. Pero kung sinabi and
thru Seller inassure nya yung particular product and d sya pasok sa sinabi ni buyer, liable si Seller.
Article 1564
An implied warranty or condition as to the quality or fitness for a particular purpose may be annexed
by the usage of trade.
- Di necessary na sabihin ni Buyer kung for what purpose yung bibilhin nya if under the basis of usage
of trade

If for example, bibili si Buyer sa isang Shop na renowned for their high quality. D na need sabihin ni
buyer na high quality bibilhin nya
- If ever nagdeliver si Seller ng lower quality than what his store is often trading, that’s grounds for
laibility

Article 1565
There is an implied warranty of merchantability in case of a contract of SALE by SAMPLE
1. Where sample not merchantable - GR: entitled si buyer na yung good nya is dapat same dun sa
sample na ininspect
2. Where sample subject to latent defect - if thru inspection d sya nareveal, and nagrely si Buyer sa
skills & judgement ni Seller. Entitled siya sa representation nung goods as well

Article 1566
Vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he
was not aware thereof

Q: why is the seller responsible even if he is in GOOD FAITH?

A: because he has to repair the damage done. The object of the law is reparation, not punishment

Exception: The parties, however, may provide otherwise in their contract (see Art. 1581, par. 3.)
provided the vendor acted in good faith, that is, he was unaware of the existence of the hidden fault
or defect.

If aware si Vendor, edi Bad Faith na yun

Article 1567
Remedies in case of Hidden Defects:
 Withdrawal or rescision (accion redhibitoria) plus damages
 Proportionate reduction (action quanti minors or estimatoria): reduction in the price, plus
damages
This warranty in sales is applicable in LEASE

Article 1568
Provides for the effect of loss of the thing because of hidden defects:
 If vendor was aware of defect: return the price, refund the expenses of the contract, plus
damages
 If vendor was not NOT aware: return the price and interest and reimburse the expense of
contract (no damages)
No damages because he is not guilty of Bad Faith

Article 1569
Speaks of a situation where there is a hidden defect known to the vendor but the loss was due to
fortitous event or thru the fault of the buyer

Q: What can the vendee do against the vendor?

A: The difference between the price paid for the thing and the value at the time of the loss,
represents the damage suffered by the vendee and is at the same time the amount with which the
vendor enriched himself at the expense of the vendee.

Note however: that the decrease in value due to wear and tear should not be compensated
Example:
S & B, selling a ship for 5 Million. Defects were hidden, and S planned on using 500k of the price to
make the ship sea-worthy. If ever B wrecked the ship.
- S is still liable for the hidden defect but only 4,500,000 (5 Mil - 500k)

Article 1570
The preceding articles apply to judical sales, however, no liability for damages will be assessed againt
the judgement debtor in view of the compulsory nature of the sales.

Judgement debtor is only tasked to sell, no liabilities fall on him

Article 1571
 Provides for the prescriptive period: Within 6 Months from the Date of Delivery
 Outside this period the action is barred
 If not breach of warranty but quasi-delict or negligence, the prescriptive period is 4 Years
 With respect to an express warranty, in accordance with the general rule on rescission of
contract, the prescriptive period which is four (4) years, shall apply

- Mere notification will not stop the running of prescription

- One should notify then sue

Article 1572
Provides for the rule with regards to sale of two or more animals together:
 Generally, a defect in one should not affect the sale of the others
 This is true whether the price was a lump sum, or separate for each animal
 Exception: if it appears that the vendee would not have purchased the sound animal without the
defective one. This is presumed when a team, yoke, pair of set is bought.

Article 1573
Provision of Art. 1572 is applicable to the sale of other things
- Di lang sa animals daw applicable

Article 1574
There is no warranty against hidden defects of animals sold at fairs or public auctions, or of livestock
sold as condemned
- Limitations of Art 1570, it assumes that in these cases the defects is clearly known to the buyer

Article 1575
Speaks of two kinds of void sales with respect to animals:
 Sale of animals suffering from contagious diseases
 If the use or serving for which they are acquired has been stated in the contract, and they are
found to be unfit thereof.

Article 1576
REDHIBITORY DEFECT: hidden defect of animals, even in case a professional inspection has been
made, should be of such nature that expert knowledge is not sufficient to discover

In the case that the Veterinarian, through ignorance or bad faith, should fail to discover or disclose it,
he shall be liable for damages. (1495)
- In this case the liability passes to the Vet and none to the Seller

Article 1577
Prescriptive period of redhibitory defect based on the faults or defects of animals: Within 40 DAYS
FROM THE DATE OF DELIVERY TO THE VENDEE
This action can only be exercised with respect to faults and defects which are determined by law or by
local customs
Limitation of action in sale of animals
 The redhibitory action based on the faults of animals shall be barred unless brought within forty
days from the date of their delivery to the vendee.

Article 1578
If the animal should die within three days after its purchase, the vendor shall be liable if the disease
which caused the death existed at the time of contract
- Dying after the 3rd makes the Vendor NOT LIABLE
- The vendee’s claim must be based on a finding of an expert that the disease causing the death
existed at the time of the contract.

Article 1679
If the sale be rescinded, the animal shall be returned in the CONDITION IN WHICH IT WAS SOLD AND
DELIVERED (must generally be the same), the vendee being answerable for any injury due to his
negligence, and not arising from redhibitory fault or defect.

- If the Vendee avails the remedies under Art. 1567, then he has an obligation to return the Animal in
Generally the same state it was delivered.

Article 1580
Remedies of buyer of animals with redhibitory defects:
 Withdrawal or rescission (plus damages)
 Proportionate reduction in price (plus damages)
Prescriptive period for either remedy is 40 Days from the date of delivery to the buyer

Article 1581
The form of sale of large cattle shall be governed by special laws

The special law governing the sale of large cattle is Act No. 4117, now found in Sections 511 to 536 of
the Revised Administrative Code, as amended, providing for the registration, branding, conveyance,
and slaughter of large cattle. The sale must appear in a public document. (see Art. 1358.)
 Chapter 5
Obligations of the Vendee
Article 1582
Principal obligation of the vendee
1. To accept deliver;
2. to pay the price1 of the thing sold at the time and place stipulated in the contract; and
3. to bear the expenses for the execution and registration of the sale and putting the goods in a
deliverable state, if such is the stipulation

When & Where to Pay

1. If stipulated, Vendee must accept delivery = Payment of price at the time and place designated
a) Delivered na yung item, pero d pa need magbayad
2. No stipulation of time & place of payment and delivery = pay at the time of delivery
a) Dahil walang stipulation sa payment, assume na sa delivery na yung pagbayad
3. No Stipulation on Delivery = Assume na nandun sa place of Contract Perfection
4. If only the time for delivery of the thing sold has been fixed in the contract, the vendee is
required to pay even before the thing is delivered to him; if only the time for payment of the
price has been fixed, the vendee is entitled to delivery even before the price is paid by him. (see
Art. 1524.)

Liability of vendee for obligations of company bought out

1. Obligation not of considerable amount or value. — In some cases, the buyer may be said to
assume the obligations of the company bought out when said obligations are not of
considerable amount or value, especially when incurred in the ordinary course of trade and
when the business of the bought company is continued.
2. Obligation of considerable amount or value. — When said obligations are of extraordinary value
and the company was brought out not to continue its business but to stop its operation in order
to eliminate competition, it cannot be said that the vendee assumed all the obligations of the
rival company

Article 1583
Rules in Installments
General Rule:
 The buyer is NOT BOUND TO ACCEPT delivery of the goods in installments, instead is entitled to
full delivery
 The buyer has NO RIGHT to pay the price in installments, nor pay in partial payments
 Exception: By agreement, however, the goods may be deliverable by installments or the
price payable in installments.
Rule
1. Where separate price has been fixed for each installments
 Where the contract provides for the delivery of goods by installments and a separate price has
been agreed upon for each installments
i. It depends in each case on the term of the contract and the circumstances of the case
whether the breach thereof is severable or not

A. Where breach affects the whole contract

 If the seller makes defective, partial or incomplete deliveries or the buyer wrongfully neglects or
refuses to accept delivery or fails to pay any installment, the injured party may sue for damages
for breach of the entire contract if the breach is so material (e.g., breach of one installment
prevents the further performance of the contract) as to affect the contract as a whole

B. Where breach severable.

 Where the breach is severable, it will merely give rise to a claim for compensation for the
particular breach but not a right to treat the whole contract as broken.
Article 1584
Buyer’s right to examine the goods
 Where goods are delivered to the buyer (actual delivery), which he has not yet previously
examined, he is NOT Deemed to have Accepted

Unless & Until

He has had a reasonable opportunity of examing them for the purpose of ascertaining them whether
they are in conformity w/the contract
If there is no stipulation to the contrary (par. 1)

The seller is bound to afford the buyer a reasonable opportunity of examining the goods only on
“Request” (par. 2)

Where goods are delivered to a carrier by the seller, in accordance w/an order from or agreement
w/the buyer, upon the terms that the goods shall not be delivered by carrier to the buyer until he has
paid the COD
- The buyer is not entitled to examine the goods before the payment of the price
In the absence of agreement or usage of trade permitting such examination (par. 3)

Right to be examination is not absoluted

- Given that the seller has afforded reasonable opportunity of examining only on request
- Failure to allow inspection may allow the buyer to rescind and recover the price/part of it he paid

Right to be exercised within reasonable time

- Reasonable time, so as not to delay delivery

Waiver of right to examine before payment

- This is in relation to the above COD, where by agreement buyer may examine before payment

Article 1585
Modes of manifesting acceptance
1. Express acceptance: when the buyer, after delivery of the goods intimates to the seller, verbally or
in writing, that he has accepted the goods;
2. Implied acceptance:
a) When the buyer, after delivery of the goods, does any act inconsistent w/the seller’s
ownership, i.e. he sells or attempts to sell the goods; uses or makes alteration in them;
b) When the buyer, after lapse of a reasonable time, retains the goods without intimating his
rejection

Article 1586
Acceptance, not a bar to action for damages
- In the absence of express or implied agreement of the parties

Acceptance of the goods by the buyer SHALL NOT DISCHARGE THE SELLER FROM LIABILITY
(unless otherwise agreed)
i. In damages or
ii. Other legal remedy for breach of any promise or warranty in the contract of sale

BUT.
If after acceptance of the goods, the buyer FAILS to give NOTICE to the seller of the breach in any
promise of warranty w/in a reasonable time
i. After the buyer knows, or
ii. Ought to know such breach

The seller shall not be liable thereafter

Article 1587
Where the buyer’s refusal to accept justified
 Buyer not bound to retun them to the seller but he must notify the seller that he refuses to
accept (unless otherwise agreed)
 Apart from taking reasonable care of the goods, nothing more can be demanded of him
 Seller has the duty to take delivery of the goods - seller’s risk of loss
 Si Seller mismo kukuha nung item
 The buyer is not liable as a depositary, unless he voluntarily constitutes himself as
such
 Buyer may resell the goods if the seller fails to take delivery (Art. 1533)

Article 1588
Effects of Buyer’s Wrongful Refusal to Accept
- the title passes to the buyer from the moment they are placed at his disposal
(risk of loss is borne by the buyer)
- As a general rule, delivery to carrier is delivery to buyer, without just cause for refusal, the risk of
loss is still the buyer’s

Article 1589
Liability of vendee for interest
 The vendee shall owe INTEREST for the period between the delivery of the thing and the
payment of the price in the following 3 cases:
1. Should it have been stipulated
 If the parties failed to fix the rate, then the legal rate of interest shall be due.
2. Should the thing sold and delivered produce fruits of income;
3. Should he be in default, from the time of juridical of extrajuridical demand for the payment of the
price
 If the vendee incurs delay in the payment of the agreed price (see Art. 1169.), the interest is due
from the time of judicial or extrajudicial demand by the vendor for the payment of the price

Article 1590
When vendee can suspend payment for the price
1. If he is disturbed in the possession or ownership of the thing bought;
2. If he has a well-grounded fear that his possession or ownership would be disturbed by a vindicatory
action or foreclosure of mortgage
a) The vendee has no cause of action for recsission before final judgement
b) The remedy of the buyer is rescission, not suspension of payment, where the disturbance is
caused by the existence of a non-appraent servitude (Art. 1560)
- Vendee is only entitled to retain the price that has not been paid to the vendor. He is not entitled to
recover what has already been paid. (Suspension nga ng pagbayad)
- Buyer of condominium is justified if Seller repeatedly fails to give the contract to sell per demanded.

When vendee cannot suspend payment for the price

1. If the vendor gives security for the retun of the price in a proper case;
2. If it had been stipulated that notwithstanding any such contingency, the vendee must make
payment (see Art. 1548, par. 3.);
3. if the vendor has caused the disturbance or danger to cease
4. if the disturbance is a mere act of trespass; and
5. if the vendee has fully paid the price.

Note: If the thing sold is in the possession of the vendee and the price is already in the hands of the
vendor, the sale is a consummated contract and Article 1590 is no longer applicable.
Article 1591
When vendor may rescind sale of immovable property
(where there has been a delivery of the immovable property but the vendee has not yet paid the
price)

When the vendor have reasonable grounds to fear the loss of immovable property sold and its price
- he may immediately sue for rescission of

Note: applicable to cash sales and installments

“Suppose the vendee has not yet paid the price, but he destroys the building sold, pulls out the plants
on the land, cuts down the forest, or places himself on the brink of insolvency. In other words, the
subject matter of the sale is going to perish. To think of demanding payment from the vendee is
something useless, because the vendee has shown signs of irresponsibility. The only remedy that can
guarantee the vendor against such damage is the rescission of the contract.” (10 Manresa 282-284.)

Article 1592
Where automatic rescission of sale of immovable property stipulated
 In the sale of immovable property,
- even though it may have been stipulated that upon failure to pay the price at the time agreed upon
the rescission of the contract shall or right take place
The vendee MAY PAY,
- even after the expiration of the period, as long as NO DEMAND FOR RESCISSION of the contract has
been made upon him either judicially or by a notarial act.

So still acceptable na magpay is Vendee kahit expired na yung period, so long as hindi pa
nagdedemand ng rescissionn si Vendor

- Hindi applicable Sale on installment of real estate

- Di rin applicable sa Contract to sell/conditional sale of real estate (Mere promise to sell)

Articl 1593
Where automatic rescission of sale or movable property stipulated

 With respect to movable property,

The RESCISSION OF THE SALE shall of right take place in the interest of the vendor;
IF the vendee, upon the expiration of the period fixed for the delivery of the thing,
i. Should not have appeared to receive it
Or
ii. Having appeared, he should not have tendered the price at the same time UNLESS a longer
period has been stipulated for its payment

The mere failure of the vendee to comply with the terms of the contract does not rescind the same. It
is necessary that the vendor should take some affirmative action indicating his intention to rescind.
- However pweding mag-agree ang parties na violation of the terms of the contract would cause
cancellation thereof, kahit wala na yung juridical intervention/permission

Example:
S sold his piano to B for P30,000.00; said piano is to be delivered on October 18. If on October 18, B
does not accept delivery or pay the price without lawful cause, then S may elect to enforce
compliance or to rescind the contract with the right to damages in either case.

Why is there a difference in Movable & Immovable Property?

The reason for the difference is that personal properties are not capable of maintaining a stable price
in the market. Their prices are so changeable that any delay in their disposal might cause the vendor a
great prejudice.
 Chapter 6
Actions for Breach of Contract of Sale of Goods
Halos Copy-paste lang :)
Article 1594
Actions for breach of the contract of sale of goods shall be governed particularly by the provisions of
this Chapter, and as to matters not specifically provided for herein, by other applicable provisions of
thi Title.

Provisions governing breach of contract of sale of goods

“Goods” include all chattels personal but not things in action or money of legal tender in the
Philippines. The term includes growing fruits or crops.

Actions available.
In general, are the following:
1. Action by the seller for payment of the price (Art. 1595);
2. Action by the seller for damages for non-acceptance of the goods (Art. 1596);
3. Action by the seller for rescission of the contract for breach thereof (Art. 1597.);
4. Action by the buyer for specific performance (Art. 1598.); and
5. Action by the buyer for rescission or damages for breach of warranty. (Art. 1599.)

Article 1595
Seller’s right of action for the price
1. When the ownership of the goods has passed to the buyer and he wrongfully neglects or refuses to
pay for the price (par. 1.);
2. When the price is payable on a certain day and the buyer wrongfully neglects or refuses to pay such
price, irrespective of delivery or of transfer of the title (par. 2.); and (3)
a) Here, basta lumagpas na fixed period of payment at d pa sya nagpayad, regardless of
delivery/transfer period
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, if the provisions of Article 1596,
4th paragraph (infra.) are not applicable. (par. 3.

Where ownership in goods has not passed

Unless contrary, presumption is price and delivery is concurrent and shall be performed
simultaneously.

Note: under Art. 1588, passing of title to buyer under his disposal, and refusal to accept without just
cause = The seller may, therefore, bring an action for the price upon wrongful refusal of the buyer.

If ever different naman si Date of Payment and Delivery

- Yung nakaset na una yung need iheed first
- While yung latter, will only be done upon the doing of the first

Article 1596
Seller’s right of action for damages
1. If the buyer without lawful cause neglects or refuses to accept and pay for the goods he agreed to
buy, the seller may maintain an action against him for damages for non-acceptance. (par. 1.)
2. In an executory contract, where the ownership in the goods has not passed, and the seller cannot
maintain an action to recover the price (see Art. 1595.), the seller’s remedy will be also an action for
damages.
3. If the goods are not yet identified at the time of the contract or subsequently, the seller’s right is
necessarily confined to an action for damages.
Measure of damages for non-compliance
1. Difference between contract price and market price:
- Estimated loss directly & naturally resutling from the buyer’s breach of contract
- Formula of Contract Price minus & Market/Current Price
a) Because Market price varies, it is fixed at the time when and the place where the goods
ought to have been accepted or, if no time was fixed, at the time of refusal to accept.
b) As the burden is upon the seller to show what damage, if any, he has suffered, it is
incumbent upon him, in order to make out a case for recovery of more than nominal
damages, to show that the market value of the goods is less than the contract price
2. Full amount of damage: If there is no available market in which the goods can be sold at the time,
the seller is “entitled to the full amount of damage which he has really sustained by a breach of the
contract.
3. Proximate damages: Article 1596 (par. 3.) allows the seller under “special circumstances”
proximate damages of a greater amount than the difference between the contract price and market
price when such damages “may be reasonably attributed to the non-performance of the obligation.”

Measure of damages for repudiation or countermand.

In case the buyer repudiates the contract or notifies the seller to proceed no further therewith, the
measure of damages to which the seller is entitled would include:
1. The labor performed and expenses incurred for materials before receiving notice of the buyer’s
repudiation; and
2. The profit he would have realized if the sale had been fully performed. (Art. 1596, par. 4.)

Article 1597
Seller’s right of rescission before delivery
1. When the buyer has repudiated the contract of sale;
2. When the buyer has manifested his inability to perform his obligations thereunder; and
3. When the buyer has committed a breach of the contract of sale.

Required mag-give notice

Note: Di absolute and rescission, it is specially not permitted for only slight/casual breach.

Article 1598
When the seller has broken a contract to deliver specific or ascertained goods, the court may, on the
behalf of the buyer, direct that the contract be performed specifically.

Buyer’s right to specific performance

- Right to rescission and the fulfillment of the specific/ascertained goods

Article 1599
Where there is a breach of warranty by the seller, the buyer may, at his election;
1. accept the goods and set up the seller’s breach to reduce or extinguish the price;
2. Accept or keep the goods and maintain an action for damages for the breach of warranty;
3. Refuse to accept the goods, and maintain an action for damages for the breach of warranty;
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.
a) when the buyer has claimed and been granted a remedy of any of the above, no other
remedy can be granted thereafter.
b) If it was delivered, d pwedeng irescind if inaccept ni buyer knowing may breach of warranty
i. Or if ever nafail inotify si seller w/in reasonable time
ii. In fact liable ngayon si buyer na ireturn yung good in the similar condition it was sent
 c) If buyer chooses to rescind, he loses the obligation to pay upon the return of the goods.
i. However, if nagbayad na sya partial or full prior, required naman ngayon si seller ibalik
the same time upon return of goods, or immediately upon the offer of returning
d) If buyer rescinds, and seller refuses to the offer of the buyer to return the goods, the buyer
will act as bailee, but subject to lien to secure payment of any portion na nabayad na, plus
remedies for enforcement nung lien
5. In the case of breach of warranty of quality, such loss, in the absence of special circumstances
showing proximate damage of a greater amount, is the difference between the value of the goods at
the time of delivery to the buyer and the value they would have had if they had answered to the
warranty

Recoupment in diminution of the price

In this case, if only a portion of the goods are deemed a breach of warranty, buyer may only be
obligated to pay the Contract Price minus the Portion of goods under breach

Example:
S sells 50 boxes of apples to B for 20,000 pesos. It was found na 15 boxes dun ay rotten ang laman, so
20k - 6k (15/50) = 14,000 Pesos lang babayaran

When rescission by the buyer is not allowed

The basis of the remedy is that the buyer has not received what he has bargained for. It cannot be
availed of, however, in the following cases:
1. if the buyer accepted the goods knowing of the breach of warranty without protest;
2. if he fails to notify the seller within a reasonable time of his election to rescind; and
3. if he fails to return or offer to return the goods in substantially as good condition as they were in at
the time of the transfer of ownership to him. But where the injury to the goods was caused by the
very defect against which the seller warranted, the buyer may still rescind the sale. (par. 3.)

Rights and Obligations of buyer in case of rescission

1. In case of rescission, the buyer shall cease to be liable for the price, his only obligation being to
return the goods;
2. If he has paid the price or any part thereof, he may recover it from the seller (par. 4; see Embee
Transportation Corp. vs. Camacho, 80 SCRA 477 [1977].);
3. He has the right to hold the goods as bailee for the seller should the latter refuse the return of the
goods; and
4. He has the right to have a lien on the goods for any portion of the price already paid which lien he
may enforce as if he were an unpaid seller. (par. 5.)
 Chapter 7
Extinguishment of Sale
Ako na lang I-extinguish nyo Pls :)