2
LAW ON SALES SALE DACION EN PAGO
Characteristics of a contract of Sales:
Difference
Art. 1458. By the contract of sale one of the contracting parties obligates himself to Source of Obligation extinguishes an obligation
transfer the ownership and to deliver a determinate thing, and the other to pay
therefore a price certain in money or its equivalent. Requirement no requirement there is a need fo PRE
EXISTING obligation.
C 3 CONSENSUAL - Perfected by mere consent;
SALE
BARTER
BCPON Considerationmoney
BILATERAL contract; COMMUTATIVE;
PRINCIPAL; 1. Manifest intention
ONEROUS; and
NOMINATE.
2. what parties will
*Delivery constitutes tranfer of ownership; CONTRACT FOR A PIECE
*Subject matter must be determinate thing;
OF WORK SALE
1
4 Ownership transeferred upon delivery not transferred
receive
after delivery risk of loss is with the risk of loss remains
buyer already with the principal-
SALE AGENCY TO SELL owner
DISTINGUISHMENT
Subject matter thing & delivery service
Goods are: mftd in manufactured specially for
ordinary the customer Importance of Distinction: for purposes of applying the Statute of Frauds
course of
business
*RES PERIT DOMINO
TO TAKE CARE OF THE THING AFTER THE SALE HAS BEEN PERFECTER, PRIOR TO DELIVERY
OBLIGATION &
RIGHTS OF PARTIES
VEND
OR/
SELLE
R
TO DELIVER
TO WARRANT THE THING TO
TRANSFER OWNERSHIP
AGAINST EVICTION
HIDDEN DEFECTS
MERCHANTABILITY
FITNESS OF GOODS
TO PAY TAXES AND INCIDENTS OF THE SALE
PAYMENT ON INSTALLMENT
TO ACCEPT DELIVERY
VEND
by sample (personal & real property) TO DELIVER
EE/
BUYE WHEN
by description
R by sample AND description
IF NO STIPULATION
W/ REDEMPTION if buyer pays
seller shd deliver otherwise:
WHAT OBJECT AS STIPULATED TERMS (conventional & legal) seller=delay
if seller delivers buyer shd pay except: IF stipulated
HOW MANY DIFFERENT FROM STIPULATION
AS STIPULATED 1. Accept 1000 ✔ & Reject 200 ✔
3. Reject 1200 🗷 1. Accept 800 ✔ 2. Reject 800 ✔
illust: B buys 1000pcs at P100 indivisible
divisible
1. Accept 1200 ✔ 2. Reject 1200 ✔
800 B's option
2. Accept 1200 ✔ B's option B's option
& Pay for 1200 ✔ Seller delivers
1200
(buyer cannot be
compelled to accept
partial delivery if that was
stipulated)
Actual Delivery long-hand delivery e.g., the thing is leased by another. Traditio Longa Manu
Consitutum Posessorium (nakay seller parin)
e.g. Sale and lease-back
MODES OF leased. Brevi Manu
Constructive delivery Short-hand delivery e.g. lessee who buys the thing
DELIVERY Symbolic Delivery seller merely gives the key to a warehouse
e.g. by execution of a public instrument. Delivery to a common carrier
Execution of the required Formality
LOSS OF THE THING if object is entirely lost the contract shall be without any effect.
By execution of an instrument withdraw
As to rights Quasi Traditio
pending delivery buyer may:
if partly lost OR
demand the remaining
part & pay its price
proportionately
goods perished w/o knowledge of the seller buyer may treat the sale: as avoided as valid
RISK OF LOSS exceptions: a. Stipulation
b. Security title
c. Delay in the delivery whoever causes the delay shall bear the risk of
loss.
GR: the buyer acquires no better title to the goods than the seller had.
SELLER IS NOT THE OWNER
GR: the thing perishes with the owner, following the principle of RES a. Authorized seller
PERIT DOMINO b. Statutory or judicial authority to sell
exceptions: c. Estoppel Estoppel in pais owner led the buyer to believe that the
seller had authority to sell.
Estoppel by deed if after the sale, the seller acquired ownership, such ownership automatically passes to the
buyer as to the thing already delivered
d. Sale of an Apparent owner
e. Purchase from a Merchant Store, market or fair
EXPRESS - as stipulated 4 Seller was given the
opportunity to defend his
title
1 Buyer is deprived of the
object
illust: to vacate
2 Deprivation = lawful ->B refused 2027
COURT B
2024
3 Due to a right already
existing at the time of sale
2023 A squatters- concept of A sells W->court W vs. B A defend title
TO WARRANT THE owner) (not registered at Land C refused
Reg Act) 2026 2055 ✔
THING
owners Y->court Y vs C W
IMPLI 1. against Evition Spanish Title
ED (reg C
to vacate
Except if
waiver
consien
te
S liable=
FMV of property at time of
eviction
1. Registered LRA ->
Special Law -A ✔
in case of breach warrant, Y ✔
waived
COURT
Remedies of the vendee: decision
waiver
intencionad S no longer liable in
a
A. withdraw 2. NOT reg LRA General law case of eviction
B. Accion quanti minoris (Spanish title) (Civil Code)
2. against Hidden Defects
er Y
possed Y✔
not hidden - Caveat emptor
by B&C 1 <30yrs >30yrs
W -B ✔
tenant
W
(Let buyer beware) agent -A -C ✔
Redhibitory defects in animal caretak -A
*must be exercised w/n 40 days. hidden - Caveat Venditor
* must die w/n 3days after purchase (Let Seller 2
beware) *Sale of large cattle is governed by 🡪owner becomes squatter
squatter s
>30years
squatter
special laws. W
If waived --- S aware of defect = VOID Is A liable for breach of
warranty against eviction?
not aware of defect = valid
VOID sale of animals: "As is where is" sale ------2055 animal suffering
B=31yrs -W ✔
from
1) possession-2024
contagious disease the thing does its purpose
2) unfit for its purpose the object sold is w/n commerce Y 3. Merchantability
if perishable goods are sold,
-Y 🗷
sale ------2055 possession-2026 C=29yrs
warranty must also be perishable.
4. FITNESS OF GOODS specific purpose -- if stipulated (at the time of sale C has no right yet. So Y should have
defended his title before prescription.)
general purpose
5. Warranty against non-apparent encumbrances
-remedies w/n 1 year to rescind & ask damages.
TO TRANFER M=16yo good faith- NO defect 2027 B sells
VAL K(18yo) pays title:
ID TITLE =
contr no defect
act voidable
illust:
OWNERSHIP bad faith- w/ DEFECT
SELLER 2023 sells
4M H&L
t
(may be anuled by
B=legal age -- pays M)
VOID
contrac
GF Is O req to reimburse?
Title Can O recover?
illust: RECTO LAW S store Void
O's necklace PAYMENT W/ TERMS ON INSTALLMENT OF ✔
PERSONAL PROPERTY
Buyer
🗷
stolen by T T sells Valid
B Void
✔ from S
VOID
Store
(Owner has better right)
Buyer Valid
from ✔
public (B goes to jail for violating antifencinfg law) (S store will be
Sale incarcerated)
illust: B
possession S sell car (500k) B ownership (contract of sale) chattel
mortgage -security of seller in case of default
S to exact fulfillment
to demand payment for the balance no longer
1
B defaults in
default seller
Installment = 5 years S becomes a creditor
payment of 2/more 340
to exact fulfillment
250
lost the right to foreclose the mortgage
installment (3ook) seller/buyer returns payment made and object
cancel the sale
300 S
to foreclose the chattel mortgage 40 S
=proceeds 250 S
S (stip -- B) 🗷
50
illust 2: pays Jan-Sep (2k*9mos) = P18000 DEC
S leases Machine B for 1 year B -S repossessed the Machince defaults Oct &
Nov = P4000
rent = P200/month (hence, considered
installment payment)
terms MACEDA LAW
with option to buy (considered sale of property in
installment) PAYMENT W/ TERMS ON INSTALLMENT OF
REAL PROPERTY
illust: Possession = B S sells H&L to B
installment = 25 yrs contracts to sell Ownership/ S demands B to pay P4000 balance B demands return of P18000
✔🗷
Title = S
Sale / Financing >Industrial Land >Tenants under Agrarian Reform>Housing Loans of PAG-IBIG,
B defaults payment in Installment Financing Sale to tenants under Land Reform GSIS, and others
NOT applicable >Commercial Bldg >Bank Code
Grace period to pay unpaid NO Penalty 50% of paid installments &
installment
Realty Inst.
Buyer Remedy for: (paid installment for less
Protection act than 2 years)
residential H&L
Condominium (residential, industrial,
commercial) less than 2 yrs = 2 months
(MACEDA LAW)
APPLICABLE Sale/ Financing Payment 2 yrs/more = 1 month / yr Remedy for: (paid installment for more
of payment than 2 years)
add'l interest
available once every 5 yrs
If S cancels the contract =S should return CSV max=90% 5% per year of
payment
illust: illust: CSV
250
340
300 S 5 yrs = 50% 40 B 8 yrs 65% = P650000
to foreclose =proceeds 250 S 3yrs x 5% = 15% 50 B payment P1M
5yrs =50%
18 yrs 90% = P900000
13yrs x5% = 65%
CONVENTIONAL =by agreement as stip
up to when is the period if w/ stip
TERMS OF PAYMENT W/ REDEMPTION LEGAL =by operation of law
Pacto de retro Sale = Sale w/ right to repurchase max=10yrs to repurchase?
if NO stip = 4 yrs
co-owners
adjorning land owners
W/ CONVENTIONAL REDEMPTION -known as "Pacto De Retro Sale "
illust: 2033 @ 2/25/23 25 25-Feb-33
repurchase? FEB
PDRS 24 - 3 days 3 leap years (24,28,32)
when is the last day to
(w stip = S can repurchase w/n 10yrs)
HEIRS:
1/3 🗷
W 1/3 can W repurchase?
✔
S dies before the repurchase
(1'1'2033) Right to repurchase
Y can W repurchase the 1 whole 🗷 1/3
B can require W to
whole ✔ 1/3 ✔
Z
1/3
repurchase B has no right to
decline repurchase
✔
illust 2: but w/ NO right to dictate how big / small to repurchase
1) WYZ B {Can W alone repurchase?} ✔
1/3 1/3 Z Z PDRS
W PDRS 1/3
W 1/3
Y PDRS Y PDRS
1/3 VALID
B✔
1/3 1) SP - unusually inadequate FMV > 25M
CAN W repurchase his 1/3? ✔
2) B ✔ B ✔ Independent contracts
SP = 8M
B require W to repurchase the whole? 🗷
illust 3: 2) Buyer retain part of the purchase price A
8M date: 2/25/27
PDRS
-w/ stip A can repurchase up to due possess
retains the right use
B enjoy fruits
{is B the absolute PDRS will only be 3) Seller
FMV>25M owner?} considered
@ 2/25/27 A fails to
mortgage repurchase EQUITABLE
Contracts purporting to MORTGAGE if pays for taxes
W/ LEGAL REDEMPTION illust:
🗷🗷🗷
W 1/4 Deed of
Co-owners Absolute Sale
4) The period to repurchse was 5) Can be inferred that the true If a co-owner sells his share to a
extended agreement is merely Equitable third person, the other
Mortgage
1/4 1/4 X Z Y repurchase what W & X sold to B?
✔
W Y co-owner can repurchase thru
1) WX B = 1/2 X 1/4 redemption even if not PDRS
Can
Z repurchase what W&X sold to B? ✔ Y & Z repurchase? ✔
1/4 Proportionately
2) WX W 1/4 1/4 If a co-owner sells his share to another co
1/4
DOA
S
Y 3/4
X 1/4 1/2
owner then the other co-owner
cannot repurchase
Can Z repurchase what W & X sold to Y? 🗷
area = not more than 1 hectare the land has NO practical use
& ALO can repurchase
RURAL -agricultural sold to buyer
& 2/more = owner w/ smallest area
buyer already owns rural land
tie = fist to offer to repurchase
So situated that majority part of
Right of pre-emption
LEGAL Residential (right of first refusal) URBAN Commercial ALO
REDEMPTION Industrial If not given: Previously acquired for
Dominant Estate 2/more= most beneficial COURT determines: LEAST
(inner) injury
ADJORNING paty gaining beneift of
w/ EASEMENT OR
LAND easement
SERVITUDE
OWNERS Right of redemption
speculation
(right of Way) Servient Estate (outer) the right of way
if will not voluntarily give *If dominant estate sells its land=
Serviant will be given Pre-emption
Lump Sum NO 🡩🡫 even if there's 🡩🡫 in area
area
TERMS not lump sum -unique as to value
upon delivery Loss due to FE
(ownership) (RES PERIT DOMINO)
Sale/Return B
B
except if stip
On trial or satisfaction SS
LUMP SUM 950 sqm S delivers land 950sqm Except if Stip
illust: B pays P1M B wil not buy if not 1000sqm
S
sells land
B no increase in price
1100 sqm S delivers land 1100 sqm
no decrease in price it should be exactly 1000sqm B pays P1M Cancel the sale + damages S insists to deliver 1000 sqm -B's
option
Contract:
Approximately 1000
sqm SP=Lumpsum
P1M
Actual Area
B pays in proportion to land
delivered + damages
Actual area 1/10
< -> Proportionate Reduction only (ACCION QUANTI MINORIS)
NOT LUMP SUM Actual ->Either or
<
Proportionate reduction
Actual ->Either or
Rescission
Prescriptive period:
Actual ->Proportionate reduction only 6 months
<
from delivery value 1/10
< Rescission
Propportionate reduction
Co-owners SUBJECT MATTERPAYMENT FOR REDEMPTIONMULTIPLE REDEMPTIONERS
Real Property Purchase price, unless grossly excessive all, pro-rata
Adjacent Rural land Purchase price 1. Small lot area
Rural land 2. if same area, first
owners
Adjacent Urban Land Purchase price One whose use is best justified
Urban land
owners
RIGHTS OF AN UNPAID SELLER 2. Stoppaage in transitu 3. Resale mututally exclusive
1. Possessory lien 4. Rescission
Possessory Lien buyer is insolvent
sales w/o any stipulation as to credit
Grounds: the term of credit has expired When the seller 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;
Loss on possessory lien seller already parted w/ the possession of the goods
When the buyer or his agent lawfully obtains possession of the goods; By
waiver.
Stoppage in Transitu goods are perishable in nature notice shall be given to original buyer the
Requisites: goods are already in transit date, time and place of resale
buyer is insolvent
Resale
intention to resell
Rescission
Grounds: seller expressly reserves the right of resale in case the buyer
should make default failure to give notice does not affect the validity
buyer has been in default for an unreasonable time of the resale.
LESS = S can recover from B difference
Proceeds damages
MORE = S is entitled
right to rescind is expressly reserved by the seller;
Grounds: buyer has been in default in the payment of the price for an
unreasonable time.
seller may recover from B for damages for breach of contract
