1

CI VI L LAW ( SALES) MEMORY AID

CHAPTER 1: INTRODUCTION
CONTRACT OF SALE One of the contracting parties obligates himself to transfer the
ownership of and to delier a determinate thing! and the other to pa" therefor a price
certain mone" or its e#$ialent% A contract of sale ma" be absol$te or conditional%
SALES
1% Contract of sale &absol$te'
real obligation obligation to gie
remedies aailable(
a% specific performance
b% rescission
c% damages
)% Contract to sell &conditional'
personal obligation obligation to do
remedies aailable(
a% resol$tion
b% damages
ESSENT*AL RE+,*S*TES OF A CONTRACT OF SALE
1% consent
)% s$b-ect matter
.% price
C/ARACTER*ST*CS OF CONTRACT OF SALE(
1% Nominate 0 law gae it a name
)% 1rincipal 0 can stand on its own2 $nli3e accessor" contract
.% 4ilateral 0 imposes obligation on both parties
a% obligation of seller transfer ownership 5 delier
b% obligation of b$"er pa" for price
Conse#$ence( power to rescind is implied in bilateral contracts
6% Onero$s with al$able consideration
Conse#$ence( all do$bts in constr$ing contract to be resoled in greater
reciprocit" of interest
7% Comm$tatie e#$al al$e is e8changed for e#$al al$e
Test( s$b-ectie as long as parties in all honest" that he is receiing e#$al al$e
then it complies with test 5 wo$ld not be deemed a donation2 b$t m$st not be
abs$rd%
*nade#$ac" of price or aleator" character not s$fficient gro$nd to cancel contract
of sale2 inade#$ac" can show itiation of consent 5 sale ma" be ann$lled based
on ice b$t not on inade#$ac"
9% Consens$al meeting of minds ma3es a perfect contract of sale b$t needs delier" to
cons$mmate%
:% Title 5 not a mode gies rise to an obligation to transfer2 it is delier" w;c act$all"
transfer ownership2 mode which act$all" transfer ownership%
STA<ES *N L*FE OF CONTRACT OF SALE(
1% negotiation
)% perfection b" mere consent2 performance ma" be demanded & specific
performance '
.% cons$mmation
=*ST*N<,*S/E= FRO> OT/ER CONTRACTS(
1% =onation
donation is grat$ito$s2 sale is onero$s
donation is formal contract2 sale is consens$al
donation is goerned b" law on donation2 sale is goerned b" law on sales
)% 4arter
)
CI VI L LAW ( SALES) MEMORY AID
in barter! the consideration is the giing of a thing2 in sale! it is giing of mone" as
pa"ment
both are goerned b" law on sales2 both are species of the gen$s sales
if consideration consists part" in mone" 5 partl" b" thing loo3 at manifest
intention2 if intention is not clear &169? '(
a% al$e of thing is e#$al or less than amo$nt of mone" sale
b% al$e of thing is more than amo$nt of mone" barter
)% Contract for piece of wor3
test in article 169:(
a% contract for delier" of an article which the endor in the ordinar" co$rse of
b$siness man$fact$res or proc$res for general mar3et & whether on hand or
not ' sale
b% goods are to be man$fact$red speciall" for a c$stomer and $pon special order
and not for the general mar3et contract for piece of wor3%
-$rispr$dence(
a% Timing test $nder art 169:2 Inchausti; whether the thing transferred wo$ld
hae neer e8isted b$t for the order contract for piece of wor3 &abandoned'
b% /abit$alit" test en$nciated in Celestino v CIR2 contract of sale if
man$fact$rer engages in actiit" witho$t need to emplo" e8traordinar" s3ills
and e#$ipment2 contract for piece of wor3 is sale of serice2 contract of sale is
sale of things%
c% Nat$re of the ob-ect test en$nciated in EEI v CIR2 each prod$ct@s nat$re of
e8ec$tion differs from the others2 prod$cts are not ordinar" prod$cts of
man$fact$rer%
main factor in decision of the SC( essence of wh" parties enter into it(
a% essence is ob-ect contract of sale
b% essence is serice contract for piece of wor3
.% Agenc" to sell
in sale! b$"er pa"s for price of ob-ect2 in agenc" to sell! agent not obliged to pa"
for price! merel" obliged to delier price receied from b$"er%
in sale! b$"er becomes owner of thing2 in agenc"2 principal remains owner een if
ob-ect deliered to him
in sale! seller warrants2 in agenc"! agent ass$mes no ris3;liabilit" as long as within
a$thorit" gien
in sale! not $nilaterall" reocable2 in agenc"! ma" be reo3ed $nilaterall" beca$se
fid$ciar" 5 een w;o gro$nd
in sale! seller receies profit2 in agenc"! agent not allowed to profit
TEST( essential cla$ses of whole instr$ment & art 1699 motherhood statement!
not good law '
Agenc" is a personal contract2 sale is real contract & to gie ' rescission not
aailable in agenc"
4. Dacion en pago
dacion: contract where propert" is alienated to satisf";e8ting$ish obligation to pa"
debt
in dacion: noates creditor0debtor relationship into seller0b$"er
in dacion: delier" is re#$ired & real contract '
7% Lease
in sale( obligation to absol$tel" transfer ownership of thing2 in lease( $se of thing
is for specified period onl" with obligation to ret$rn
in sale( consideration is price2 in lease( consideration is rent
in sale( seller needs to be owner of thing to transfer ownership2 in lease( lessor
need not be owner
lease with option to b"( reall" a contract of sale b$t designated as lease in name
onl"2 it is a safe b" installments
CHAPTER 2: PARTIES TO A CONTRACT OF SALE
<ENERAL R,LE( All parties with capacit" to contract can enter into a alid contract of sale
1% Nat$ral
.
CI VI L LAW ( SALES) MEMORY AID
)% A$dicial 0 corporation;partnership;associations;Cooperaties
Stat$s of contract alid
Remedies aailable therefore are(
a% specific performance
b% rescission
c% damages
EBCE1T*ON TO <ENERAL R,LE(
1% >inors
stat$s of contract( oidable onl"! therefor ratifiable
remed" is action for ann$lment &with partial restit$tion in so far as the minor is
benefited'
)% SALE 4C 5 4ETDEEN S1O,SES
a% Contract with .
rd
parties
stat$s of contract is alid
b% Sale between parties
Stat$s not proided for b" law b$t EO*= according to case law
Reason(
i% preent defra$dation of creditors
ii% aoid sit$ation where dominant spo$se ta3e adantage of others
iii% aoid circ$mention on prohibition of donation between spo$ses
E8ception
i% separation of propert" agreed &marriage settlement'
ii% -$dicial separation of propert"
c% Common Law Spo$ses &1aramo$rs'
Stat$s of contract( EO*= &per case law'
Rationale( eil so$ght to be aoided is present
.% OT/ERS 1ER S1EC*F*C 1ROE*S*ONS OF LAD
a% <$ardian with regards to propert" of ward d$ring period of g$ardianship
b% Agent with regards to propert" of principal
c% E8ec$tor;administrator with regards to the estate of the deceased
d% 1$blic officers with regards to the propert" of the estate
e% Officer of co$rt 5 emplo"ee with regards to propert" in litigation
LE<AL STAT,S OF CONTRACT(
1% EO*= &1ER CASE LAD' g$ardian; e8ec$tor;p$blic officers ; officers of the co$rt
)% EO*=A4LE &1ER C*E*L CO=E' agent2 and if with consent! EAL*=
TDO <RO,1S OF 1RO/*4*TE= 1ART*ES FRO> EN<A<*N< *N CONTRACT OF SALE(
1% <$ardian ; Agent ; E8ec$tors ratifiable in the sense that onl" priate wrong is
inoled
)% 1$blic Officials ; Officers of Co$rt not ratifiable in the sense that p$blic wrong is
concerned
<,AR=*AN;A<ENT;A=>*N*STRATOR
1% Legal stat$s of contract( EO*= &case law'
)% =irect or indirect
.% *f mediator no need to proe coll$sion2 in$tile
6% Een if co$rt approed sale
7% Reason( fid$ciar" relationship is based on tr$st
ATTORNECS
RE+,*S*TES(
1% Law"er0client relationship e8ists
)% S$b-ect matter propert" in litigation &all t"pes'
.% =$ration while in litigation &from filing of complaint to final -$dgment'2 ma" be f$t$re
litigation
Reason( d$e to p$blic polic"2 gro$nd for mal practice
a% Client is at the merc" of the law"er
b% Law is a noble profession
6
CI VI L LAW ( SALES) MEMORY AID
c% ) >asters ) interest2 one cannot sere ) masters at the same time
E8ception( CONT*N<ENT FEE ARRAN<E>ENT
a% Amo$nt of legal fees is based on a al$e of propert"
b% 1ropert" itself is inoled
Not a sale b$t serice contract
* gie that "o$ ma" do &innominate contract' so has to be goerned b" law on
sales b$t beca$se of p$blic polic"! considered EAL*=
Reason wh" contingent fee is followed(
i% constit$tional prohibition impairment of contract
ii% s$b-ect to control of co$rts &ma" be red$ced if $nconscionable or n$llified'
iii% canons of legal ethics
i% higher p$blic polic" litigants
CHAPTER 3: SUBJECT MATTER OF SALE
TO 4E A EAL*= 5 4*N=*N< S,4AECT >ATTER! T/E FOLLOD*N< >,ST CONC,R(
1% E8isting! F$t$re 5 Contingent
)% Licit
.% =eterminate or determinable
EB*ST*N<! F,T,RE! CONT*N<ENT
Refers to s$b-ect matter that are e8isting 5 not e8isting b$t capable of e8istence
&p$rs$ant to present! technolog"'
1% if this is present! stat$s of contract( EAL*=
)% if absent ( NO CONTRACT S*T,AT*ON! T/EREFORE NO CA,SE OF ACT*ON
.% if mere pipe dream ( EO*=
a% SALE OF T/*N<S /AE*N< 1OTENT*AL EB*STENCE &Emptio Rei Speratae'
Sale of f$t$re things2 no ph"sical e8istence "et
A resol$tor" condition that thing will come into e8istence
Non happening of condition( RES,L,TORC( EBT*N<,*S/ T/E CONTRACT
Remed"( can recoer what has been paid
b% SALE OF /O1E &Emptio Spei'
Eer" sale of f$t$re thing is s$b-ect to condition that the" will come into
e8istence
*f hope does not come tr$e NO RECOEERC OF 1AC>ENT;NO
RESC*SS*ON
Aleator" character b$t alid
L*C*T 5 EEN=OR >,ST /AEE A R*</T TO TRANSFER S,4AECT >ATTER
1% L*C*T m$st be within the commerce of men
EO*= S,4AECT >ATTER(
a% Contrar" to law
b% Sim$lated;fictitio$s
c% =id not e8ist at a time of transaction
d% O$tside commerce of men
e% *mpossible serice
f% *ntention can not be ascertained
g% 4" proision of law
)% SELLER >,ST 4E ODNER onl" at a time of cons$mmation since tradition transfers
ownership b$t to hae a perfected contract of sale! Eendor need not be owner of thing2
can be alidated;ratified b" s$bse#$ent ac#$isition of title b" seller
=ETER>*NATE 5 =ETER>*NA4LE
Absence( EO*=2 there is s$b-ect matter b$t *ntention regarding s$b-ect matter can not
be ascertained EO*=
Finds of s$b-ect matter(
1% Specific 0 =eterminate
1artic$larl" designated or segregated from all others of the same class
)% <eneric 0 =eterminable
7
CI VI L LAW ( SALES) MEMORY AID
Test( reach a point of description where both minds conc$r
At the time the contract is entered in to the thing is capable of being made
determinate witho$t the necessit" of a new or f$rther agreement between
parties
E8act #$antit" not essential
Sale of generic things EAL*=2 still e8ec$tor"
There can onl" be contract of sale when s$b-ect is finall" chosen for delier"
alread" segregated or designated2 b$t before designation! alid F of sale
alread" e8ists
.% ,ndiided interest &4,CER becomes co0owner'
6% ,ndiided share in mass of f$ngible goods &4,CER becomes co0owner'
CHARTER 4: PRICE s!"#$s %&$ s'( s%)'*+%$, +s $-'.+*$"% /# %&$ %&"! s/*,
C/ARACTER*ST*CS OF EAL*= 1R*CE
1% >$st be real
)% >$st be in mone" or its e#$ialent
.% >$st be certain or ascertainable at the time of the perfection of the contract
6% >anner of pa"ment proided for
REAL
1% Dhen price stated is one intended b" parties
*f fictitio$s( no intention with respect to price 0 EO*=
*f False;sim$lated( what appears in contract is not the tr$e price
a% EAL*= if there is tr$e consideration
b% EO*= b$t if none &beca$se it is fictitio$s'
)% Eal$able
Dhen not al$able EO*=
Dhen contract is onero$s! pres$med to hae al$able consideration
Nominal consideration w;c is common law concept does not appl" &11%GG'
<ross inade#$ac" of price in ordinar" sale does not render contract oid $nless it
is shoc3ing to conscience of man%
Except:
a% A$dicial sale
Shoc3ing to conscience of man
/igher price can be obtained at re0sale
b% Rescissible contracts d$e to lesion
c% Sales with right to rep$rchase &raises pres$mption of e#$itable mortgage'
Remed" is reformation
CERTA*N OR ASCERTA*NA4LE
CERTA*N
1% S$fficient that it is fi8ed with reference to another thing certain
That thing will hae on a definite da"! or in a partic$lar e8change or mar3et! or
when an amo$nt is fi8ed aboe or below the price on s$ch da"! or in s$ch
e8change or mar3et proided said amo$nt be certain
)% =etermination be left to -$dgment of specified person;s
*f contract states that price is to be determined b" .
rd
part"! contract is alread"
perfected &there is -$st a s$spensie condition act$al fi8ing of price'
.
rd
part" fi8es price in bad faith or mista3e co$rt remed" can be made
.
rd
part" is $nable or $nwilling to fi8 price parties hae no ca$se of action
Reason(
a% s$spensie condition does not happen "et co$rts hae no -$risdiction
b% enforceable contract hae not "et arisen co$rt with no -$risdiction to create
contract between parties
Res$lt( *NEFF*CAC*O,S
Dhen price can not be determined in accordance with an" of the preceding r$les!
contract of sale in *NEFF*CAC*O,S
9
CI VI L LAW ( SALES) MEMORY AID
/oweer! when S> deliered! 4,CER m$st pa" reasonable rice therefore co$rt
can fi8 price
>ANNER OF 1AC>ENT >,ST 4E A<REE= ,1ON
=eemed to be an essential re#$isite beca$se it is part of the presentation of the
contract
*ntegral part of concept of price
*f there is fail$re to meet minds as regards term of pa"ment( CAS/ 4AS*S
>$st be certain or at least ascertainable
Effect is absent( NO CONTRACT S*T,AT*ON
CHAPTER 0: FORMATION OF CONTRACT OF SALE
. STA<ES *N L*FE OF A CONTRACT OF SALE
1% Policitacion;negotiation Stage offer is floated! acceptance is floated b$t the" do not
meet2 time parties indicate their interest b$t no conc$rrence of offer 5 acceptance
)% 1erfection conc$rrence of all re#$isites2 meeting of the minds
.% Cons$mmation parties perform their respectie $nderta3ings
POICI!"CIO#
1% offer is floated b$t not absol$te
)% acceptance is li3ewise floated b$t conditional
R,LES(
1% offer is floated prior to acceptance! ma" be withdrawn at will b" offeror
)% offer floated with a period witho$t acceptance! e8ting$ished when period has ended
5 ma"be withdrawn at will b" offeror2 right to withdrawn m$st not be arbitrar"
otherwise! liable to damage $nder Art 1H! )G! )1 of ciil code
.% offer floated with a condition e8ting$ished b" happening;non0happening of condition
6% offer floated witho$t period;witho$t condition contin$es to be alid depending $pon
circ$mstances of time! place 5 person
7% offer is floated 5 there is co$nter0offer original offer is destro"ed! there is a new offer2
can not go bac3 to original offer
9% offer is floated no a$thorit" of offeror to modif" offer
:% offer is accepted absol$tel" proceed to perfected stage
O1T*ON CONTRACT
floats in the policitacion stage
offer with a period b$t fo$nded $pon a separate consideration distinct from the price
no pres$mption of consideration! needs to be proen
Characteristics(
a% not the contract of sale b" itself! distinct
b% nominate
c% principal2 b$t can be attached to other principal contracts
d% onero$s
e% comm$tatie
f% $nilateral vs contract of sale which is bilateral
to be perfected 5 gie rise to action! the following m$st conc$r
a% s$b-ect matter of sale m$st be agreed $pon
b% price of sale 5 manner of pa"ment m$st be agreed $pon
c% consideration separate 5 distinct from price
d% period as per contract2 if period not proided prescribes in 1G "ears &written
contract'
e% how e8ercised( notice of acceptance sho$ld be comm$nicatie to offeror witho$t
act$al pa"ment as long as there is delier" of pa"ment in cons$mmation stage
) S*T,AT*ONS *N AN O1T*ON CONTRACT(
1% with separate consideration
Legal conse#$ence(
a% option contract is alid
:
CI VI L LAW ( SALES) MEMORY AID
b% offeror can not withdrawn offer $ntil after e8pir" period
c% s$b-ect to rescission! damages b$t not to specific performance beca$se this is
not an obligation to gie
)% witho$t separate consideration
Legal conse#$ence(
OL= R,LE(
a% offer is still alid! b$t
b% option contract is oid
c% not s$b-ect to rescission! damages
NED R,LE( Right if first ref$sal recogniIed
R*</T OF F*RST REF,SAL(
creates a promise to enter into a contract of sale and it has no separate consideration!
not s$b-ect to specific performance beca$se there is no contract$al relationship here 5
it is not an obligation to gie &not a real contract'
New doctrine( ma" be s$b-ect to specific performance
Effect of new doctrine( t$rned the world of policitacion $pside down beca$se while
alid option contract is not s$b-ect to specific performance! right of first ref$sal which
does not een hae a separate consideration ma" be s$b-ect to specific performance
O1T*ON CONTRACT 5 R*</T OF F*RST REF,SAL =*ST*N<,*S/E=
O1T*ON CONTRACT R*</T OF F*RST REF,SAL
1rincipal contract2 stands on its own Accessor"2 can not stand on its own
Needs separate consideration =oes not need separate consideration
S$b-ect matter 5 price m$st be alid There m$st be s$b-ect matter b$t price not
important
Not conditional Conditional
Not s$b-ect to specific performance S$b-ect to specific performance
RecogniIes recoer" of damage based on ab$se of rights doctrine
1ERFECT*ON( OFFER 5 ACCE1TANCE
1ERFECT*ON
Sale is a consens$al contract! perfected b" meeting of minds regarding s$b-ect matter
5 price
>eeting of >inds(
1% Offer certain
)% Acceptance absol$te
+$alified acceptance merel" a co$nter0offer which needs to be absol$tel"
accepted to gie rise to perfected contract of sale
4$siness ads are mere initations to ma3e an offer e8cept when it appears to
be otherwise
Acceptance b" letter;telegram binds onl" at time it came to 3nowledge of
SELLER2 prior thereto offer ma" still be withdrawn
>$st be e8act terms to be considered absol$te
Dhen deiations allowed(
a% an"thing that refers to price is material
b% small items are insignificant! does not ma3e acceptable $nconditional
when sale is s$b-ect to s$spensie condition! no perfected contract of sale "et2
becomes perfected onl" $pon happening of condition
*n sales at a$ction! perfected when a$ctioneer anno$nces its perfection b" the fall of
the hammer or in other c$stomar" manner ma" impose terms $nder bidder ma"
retract his bid2 owner of propert" sold at a$ction ma" impose terms $nder w;c the
a$ction will proceed 5 it shall be binding w;n the bidders are aware
1lace of perfection( where the meeting of minds happen2 when acceptance sent b"
mail! perfection is deemed where the offer is made
1erformance has nothing to do with perfection stage
EARNEST >ONEC
1% mone" gien as part of p$rchase price
?
CI VI L LAW ( SALES) MEMORY AID
)% its acceptance is proof that contract of sale e8ists
nothing in law preents parties from treating earnest mone" differentl"
old concept( s$b-ect to forfeit$re when 4,CER bac3s o$t
new concept( can not be forfeited part of p$rchase price2 m$st be restored
#$alification( if old concept is stip$lated EAL*=
pres$mption of perfection of contract of sale and s$ch earnest mone" as art of
p$rchase price is disp$table
FOR> OF SALES
1% Form not important in alidit" of sale
Sale being consens$al! ma" be oral or written! perfected b" mere consent as to
price 5 s$b-ect matter
*f partic$lar form is re#$ired $nder the stat$te of fra$ds(
a% alid 5 binding between parties
b% not binding to .
rd
persons onl"
Reason( p$rposes of conenience onl" 5 not for alidit" 5 enforceabilit"2 ca$se of
action is granted to s$e 5 compel other part" to e8ec$te the doc$ment
)% Dhen form is important for alidit"2 e8ception b" specific proision of law2
a% power to sell a piece of land granted to an agent otherwise EO*=
b% sale of large cattle2 m$st also be registered with >$nicipal treas$rer otherwise
EO*=
c% sale of land b" non0Christian if not approed b" <oernor EO*=
.% Dhen form is important for enforceabilit" &STAT,TE OF FRA,=S'
a% sale to be performed 1 "ear after
b% Agreement to sell things with al$e of 7GG and $p
c% Sale of real propert" or interest therein
E8ception(
i% Dhen there is a note or memorand$m in writing 5 s$bscribe b" part" or his
agent &contains essential terms of the contract'
ii% Dhen there has been partial performance;e8ec$tion &seller deliers with intent
to transfer title;receies price'
iii% when there has been fail$re to ob-ect to presentation of eidence &oral'
&constit$te waier'
CHAPTER 1: CONCUMMATION STA2E3PERFORMANCE STA2E
Stage where parties both compl" with their obligation
Nat$re of diligence re#$ired( diligence of good father of famil" $nless other
re#$irement is stip$lated
Conse#$ence( Seller will g$ilt" of breach if thing is lost thro$gh his fa$lt
=EL*EERC OF T/E T/*N<
Transfer ownership &tradicion' twin obligation(
1% transfer title&ownership' SELLER m$st be owner of thing at the time of
cons$mmation to alidl" transfer title
)% delier" of the thing
=ifferent 3inds of delier"(
1% Act$al
when thing sold is placed in the control 5 possession of the b$"er
)% Constr$ctie
=*FFERENT FOR>S OF CONSTR,CT*EE =EL*EERC(
$. !raditio onga %anu
=elier" of thing b" mere agreement2 when SELLER points to the propert" witho$t
need of act$all" deliering
$. !raditio &revi %anu
1% 4efore contract of sale! the wo$ld be b$"er was alread" in possession of the
wo$ld be s$b-ect matter of sale &e8( as lessee'
)% S"mbolic delier"
As to moables e8( delier" of the 3e"s to a car
H
CI VI L LAW ( SALES) MEMORY AID
'. Constitutum possessarium
at the time of perfection of contract! seller contin$es to hols possession merel" as
a holder
6% E8ec$tion(
E8ception(
a% when there is stip$lation to contrar"! e8ec$tion does not prod$ce effect of
delier"
b% when at the time of e8ec$tion of instr$ment! s$b-ect matter was not s$b-ect to
control of the seller
s$b-ect matter sho$ld be within control of seller2 he sho$ld hae capacit" to
delier at the time of e8ec$tion of p$blic instr$ment when he wants to effect
act$al delier"
s$ch capacit" sho$ld s$bsist for reasonable time after e8ec$tion of
instr$ment &reason time depends on circ$mstances of persons! places 5
things'
Effect when ) re#$isites do not conc$r( no constr$ctie delier"2 no compliance on
part of SELLER to delier
Een when thing is mortgaged! seller can still delier beca$se na3ed title still
belongs to him 5 can still do acts of ownership incl$ding cone"ance
7% Negotiable doc$ments of title 5 non negotiable instr$ments
transferee ac#$ires title of transferor
when deliered witho$t negotiation! it is a mere assignment
9% *ntangibles; incorporeal propert"
thro$gh p$blic instr$ment
e8ec$tion is e#$ialent to delier" if from the deed! contrar" does not appear
=EL*EERC OF FR,*TS 5 ACCESS*ONS; ACCESSOR*ES
Right to fr$its 5 accessions;accessories accr$e from time sale is perfected
b$t no real right oer it $ntil it is deliered
=EL*EERC T/RO,</ CARR*ER
1% FAS FREE ALON< S*=E
Dhen goods deliered alongside the ship! there is alread" delier" to the b$"er
&twin effects deemed f$lfilled'
)% FO40FREE ON 4OAR=
a% Shipment when goods are deliered at ship at point of shipment2 delier" to
carrier b" placing goods on essel is delier" to b$"er
b% =estination when goods reach the port een if not disembar3ed "et from the
essel! there is delier" to the b$"er
.% C*F COST! *NS,RANCE! FRE*</T
a% when b$"ers pa"s for serices of carrier delier" to carrier is delier" to b$"er2
carrier is agent of the b$"er
b% when b$"er pa"s seller the price from moment the essel is at port of
destination! there is alread" delier" to b$"er%
CO>1LETENESS OF =EL*EERC
1% >OEA4LES delier" of thing pl$s accessories 5 accessions in the condition in which
the" were $pon the perfection of the contract incl$ding the fr$its
a% LESS b$"er has ) options(
i% re-ect
ii% accept
&1' when accepts with 3nowledge that seller is not going to perform contract in
f$ll! he m$st pa" at price stip$lated
&)' when accepts 5 cons$mes before 3nowledge that b$"er will both perform
contract in f$ll! liable onl" for fair al$e of goods deliered
b% LAR<ER b$"er has ) options2
i% accepts per contract 5 re-ect the rest
ii% accept the whole pa" price stip$lated
iii% re-ect whole if s$b-ect matter is indiisible
c% >*BE= D*T/ <OO=S OF =*FFERENT =ESCR*1T*ON b$"er has ) options(
1G
CI VI L LAW ( SALES) MEMORY AID
i% accepts good w;c are in accordance with contract 5 re-ect the rest
ii% re-ect goods entirel" if indiisible
)% *>>OEA4LES
a% sold per $nit or n$mber
with statement of its area! rate at certain price
delier all that ma" heae been stated in the contract
if impossible! remedies of b$"er(
LESS *N AREA
i% rescission
ii% proportional red$ction of price LACF *N AREA S/L= NOT 4E LESS
T/AN 1;1G OF AREA A<REE= ,1ON
<REATER *N AREA
i% accept per stip$lation 5 re-ect the rest
ii% accept whole area pa" at contract rate
Not applicable to -$dicial sales
b% sold for l$mp s$m
Dhen price per $nit not indicated
*s area deliered is either greater or lesser price will not be ad-$sted
accordingl"
T*>E 5 1LACE OF =EL*EERC
1% follow stip$lation in contact! or
)% follow $sage of trade! or
.% seller@s place of b$siness or his residence
6% specific goods place where the thing is
7% at reasonable ho$r
EFFECTS OF =EL*EERC( Title to thing is transferred;ownership is transferred
Except: contrar" is stip$lated as in the case of(
1% contract to sell
)% sale on acceptance;approal
.% sale or ret$rn
6% there is implied reseration of ownership
D/O 4EARS EB1ENSES OF =EL*EERC Seller
Sale b" description;sample
1% Sample goods m$st correspond with sample shown
)% =escription goods m$st correspond with description or sample
Effect if there is no compliance( RESC*SS*ON ma" be aailed of b" the b$"er
O4L*<AT*ON OF 4,CER
1% 1a" the price
4$"er is obligated to pa" price according to terms agreed $pon regarding time!
place 5 amo$nt
*f pa"ment of interest is stip$lated m$st pa"2 if amo$nt of interest not mentioned
appl" legal rate
Dhen b$"er defa$lts constit$tes breach( s$b-ect to specific
performance;rescission 5 damages 2 interest to be paid also from of defa$lt
)% Accept delier" of thing sold
Dhere to accept( at time 5 place stip$lated in the contract2 if none specified at
the time 5 place of delier"
<oods2 there is acceptance when(
a% /e intimates to seller that he has accepted
b% Dhen deliered 5 does an" act inconsistent with ownership of seller
c% Retains witho$t intimating to seller that he has re-ected
Sale of <oods on installment(
a% <oods m$st be deliered in f$ll! e8cept when stip$lated
b% Dhen not e8amined b" b$"er not accepted $ntil e8amined or at least had
reasonable time to e8amine
11
CI VI L LAW ( SALES) MEMORY AID
Acceptance of goods in general! absent contrar" e8press stip$lation! does not
discharges seller from liabilit" in case of breach of warranties &$nless no notice or
fail$re to gie it within reasonable time'
Dhen b$"er has a right to ref$se goods! no need to ret$rn2 shall be considered as
depositar"2 $nless there is stip$lation to contrar"
=O,4LE SALE
<eneral R$le( F*RST *N T*>E! 1R*OR*TC *N R*</T
Dhen does it appl"( when not all re#$isites embodied in 1766 conc$r
S1EC*AL R,LE( 1766
Re#$isites2
1% e8actl" same s$b-ect matter
)% e8actl" same immediate seller
.% the" b$"ers represent conflicting interest
6% both sales are alid
R,LES ACCOR=*N< TO 1766(
1% >OEA4LE
owner is first to posses in good faith
)% *>>OEA4LE
First to register in good faith
No inscription! first to possess in good faith
No inscription 5 no possession in good faith 1erson who presents oldest title in
good faith
<OO= FA*T/
1% one who b$"s propert" witho$t notice that another person has a right or interest in
s$ch propert"
)% one who has paid price before notice that another has claim or interest
lis pendens notice that s$b-ect matter is in litigation
aderse claim notice that somebod" is claiming better right
1OSSESS*ON
4oth act$al or constr$ctie
RE<*STRAT*ON
1% registered $nder Torrens s"stem
1766 applies
)% not registered $nder the Torrens s"stem
1766 still applies
decided case which e8cl$ded $nregistered land dealt with -$dicial sale whereb"
b$"er ac#$ires right of transferor2 o$tside of s$ch sit$ation m$st appl" to
conflicting sale oer same $nregistered parcel of land
.% when sit$ation is sale 1 deals with land when not "et registered 5 sale ) is done when
land alread" registered appl" F*RST *N T*>E! 1R*OR*TC *N R*</T
CHAPTER 4: DOCUMENTS OF TITLE
=OC,>ENTS OF T*TLE
not creations of law b$t b" merchants to allow them to deal with merchandise
witho$t haing to ph"sicall" carr" them aro$nd
pertains to specific t"pe of moables onl" ( <OO=S
) F,NCT*ONS
1% eidence of e8istence 5 possession of goods described therein
)% medi$m b" which seller is able to transfer possession of goods
) FOR>S
1% negotiable
a% delier to bearer &negotiation b" mere delier"'
1)
CI VI L LAW ( SALES) MEMORY AID
b% delier to specific person or his order &negotiation b" endorsement J delier"'
een if face of instr$ment sa"s NON0NE<OT*A4LE it is still NE<OT*A4LE2
limiting words not to destro" negotiabilit"
if order instr$ment 5 no endorsement was made e#$ialent to assignment
*>1ORTANT CONS*=ERAT*ONS
1% Negotiation gies better right than assignment
NE<OT*AT*ON ASS*<N>ENT
transferor;holder ac#$ires title to goods ac#$ires title to goods against transferor
bailee has direct obligation to holder as if
directl" dealt with him
ac#$ires right to notif" bailee so that he
ac#$ires obligation of bailee to hold goods
for him
)% Assignee ta3es doc$ment with defects of the assignor
.% Obligation of bailee bailee is immediatel" bo$nd to the doc$ment
DARRANT*ES ON NE<OT*AT*ON;ASS*<N>ENT T/E SA>E
1% the doc$ment is gen$ine
)% he has legal right to negotiate or transfer it
.% he has 3nowledge of no fact which wo$ld impair the alidit" or worth of the doc$ment
6% he has right to transfer title to goods and goods are merchantable;fit
R,LES OF LEEC;<ARN*S/>ENT OF <OO=S COEERE= 4C =OC,>ENTS OF T*TLE
1% Non negotiable
Notification is operatie act to transfer title;possession of goods in faor assignee
4efore notification can be garnished b$t not when there is notification alread"
)% Negotiable
Can not be leied or garnished when docs alread" with p$rchaser in good faith!
$nless(
a% =oc$ment is first s$rrendered
b% =oc$ment is po$nded b" co$rt
c% Negotiation is en-oined
CHAPTER 5: SALE BY NON6OWNER OR BY ONE HAVIN2 VOIDABLE TITLE
1% SALE 4C NON0ODNER
Per(ection Stage
a% sale b" owner alid
b% sale b" non0owner alid2
beca$se ownership is necessar" onl" transfer title to goods2 at perfection stage! no
obligation on part of seller to transfer ownership
law on estoppel f$rther bolster it( title passes b" operation of law to grantee when
person who is not owner of goods sold deliers it and later on ac#$ires title thereto
since alid! action to ann$l is improper2 there is perfected contract
Consummation Stage
Contract of sale is alid beca$se it has passed perfected stage! despite(
a% seller is not owner
b% seller has no a$thorit" to sell
Dhat is oid is the transfer of title; ownership did not pass
Effect( b$"er ac#$ired no better right than transferor
Legal effect( CAEEAT E>1TOR 4,CER 4EDARE
a% co0owner sells whole propert" prior to partition sale is oid as to his spirit$al
share
b% co0owner sells definite portion to partition sale is oid as to other co0owner
b$t alid as to his spirit$al share
E8ception(
a% owner b" his cond$ct is precl$ded from den"ing seller@s a$thorit" &ESTO11EL'
b% contrar" is proided for in recording laws &pd 17)H'
c% sale is made $nder stat$tor" power of sale or $nder a co$rt of competent
-$risdiction
1.
CI VI L LAW ( SALES) MEMORY AID
d% sale is made $nder merchant@s store in accordance with code of commerce 5
special laws
)% SALE 4C SELLER D*T/ EO*=A4LE T*TLE
Per(ection Stage
Ealid sale b$"er ac#$ires title of goods
Consummation Stage
Ealid sale if title has not "et been aoided b$"er b$"s goods $nder following
condition(
a% in good faith
b% for al$e
c% witho$t notice of seller@s defect of title
T*TLE AS TO >OEA4LE 1RO1ERT*ES
R$le( 1OSSESS*ON *S E+,*EALENT TO T*TLE
Re#$isites(
a% 1ossession of a moable
b% *n good faith
E8ception(
a% Owner lost moable owner can recoer w;o reimb$rsing price
b% Owner is $nlawf$ll" depried owner can recoer w;o reimb$rsing price
E8ception to E8ception(
a% moable is bo$ght at p$blic sale owner can onl" recoer after reimb$rsing price
b% in good faith 5 for al$e
CHAPTER 7: LOSS8 DETERIORATION8 FRUITS 9 OTHER BENEFITS
C*E*L LAD CO>>ON LAD
No alid contract inoling generic s$b-ect
matter2
1erfection of F of sale which is not
conditional coers good that are
determinable
To hae a alid contract of sale! s$b-ect
matter m$st be determinate &law on loss!
deterioration! fr$its! applies onl" to
determine s$b-ect matter'
1erfection is the mode which transfers
ownership to b$"er2
Not a title b$t a mode Tradition is merel" a means to perform
obligation
1erfection of contract of sale which is not Res perit domino2 owner bears ris3 of loss
Conditional incl$de goods which are not
delierable2 transfers ris3 to b$"er
D/O 4EARS R*SF OF LOSS;=ETER*ORAT*ON;FR,*TS
1% 4efore perfection
Res perit domino
Owner is seller so seller bears ris3 of loss
)% At 1erfection
Res perit domino
Contract is merel" inefficacio$s beca$se loss of the s$b-ect matter does not affect
the alidit" of the sale
Seller cannot an"more compl" with obligation so b$"er cannot an"more be
compelled
.% After 1erfection b$t before delier"
a% Loss conf$sed state
) vie*s:
1aras( 4,CER
Tolentino( SELLER
b% =eterioration 5 fr$its 0 4$"er bears loss
6% After delier"
Res perit domino
Owner is b$"er so b$"er bears ris3 of loss
16
CI VI L LAW ( SALES) MEMORY AID
=elier" e8ting$ish ownership vis+a+vis the seller 5 creates a new one in faor of
the b$"er
CHAPTER 1:: REMEDIES OF PARTIES FOR BREACH OF CONTRACT OF SALE
S,4AECT >ATTER( >OEA4LES &*N <ENERAL'
RE>E=*ES OF ,N1A*= SELLER
An" man ma" not ta3e law in his own hands! m$st see3 remed" thro$gh co$rts
E8ception(
1% =OCTR*NE OF SELF /EL1
)% S1EC*AL RE>E=*ES
Re#$isites(
1% S$b-ect matter goods
)% Seller is $npaid not completel" paid or receied negotiable instr$ment $nder a
condition 5 condition has been breached b" reason of dishonor
.% 1h"sical possession is with seller
1% possessor" lien
)% stoppage in transitu
.% special right of re0sale Can onl" be e8ercised when ) prior rights
6% special right to rescind hae been e8ercised
1OSSESSORC L*EN
Seller not bo$nd to delier if b$"er has no paid him the price
Right to retain2 cannot be aailed when seller does not hae c$stod"
E8ercisable onl" in following circ$mstances(
a% goods sold witho$t stip$lation as to credit
b% goods sold on credit b$t term of credit has e8pired
c% b$"er becomes insolent
Dhen part of goods deliered! ma" still e8ercise right on goods $ndeliered
*nstances when possessor" lien lost(
a% seller deliers goods to carrier for transmission to b$"er witho$t resering
ownership in goods or right to possess them
b% b$"er or agent lawf$ll" obtains possession of goods
c% waier
loses lien when he parts with goods &still has stoppage in transitu'
notice b" seller to b$"er not essential
STO11A<E I# !R"#SI!,
Re#$isites(
1% <oods are in transit
Dhen goods are in transit
From the time goods are deliered to carrier for p$rpose of transmission to
b$"er
<oods re-ected b" b$"er 5 carrier contin$es to possess them
Dhen goods no longer in transit
Reached point of destination
4efore reaching destination! b$"er met seller along the wa"
<oods are s$pposed to hae been deliered to b$"er b$t carrier ref$sed
)% Shown b" seller that b$"er is insolent & fail$re to pa" when debts come d$e '
/ow is right e8ercised(
a% Obtain act$al possession of goods
b% <ie notice of claim to carrier ; bailee in possession thereof
Notice b" seller to b$"er is not re#$ired2 notice to carrier is essential
S1EC*AL R*</T TO RESELL T/E <OO=S
Re#$isites(
1% goods are perishable
17
CI VI L LAW ( SALES) MEMORY AID
)% stip$lated the right of resale in case b$"er defa$lts in pa"ment
.% b$"er in defa$lt for $nreasonable time
notice b" seller to b$"er not essential
wh" special there are things which seller cannot do in ordinar" sale(
1% ownership is with b$"er b$t seller can sell goods
)% title accorded to b$"er is destro"ed een witho$t co$rt interention
S1EC*AL R*</T TO RESC*N=
wh" special ownership of goods alread" with b$"er b$t seller ma" still rescind2
ownership is destro"ed een witho$t co$rt interention b$t in ordinar" sale! need to go
to co$rt to destro" transfer of ownership
Re#$isites(
1% E8pressl" stip$lated
)% 4$"er is in defa$lt for $nreasonable time
Notice needed to be gien b" seller to b$"er
RE>E=*ES OF 4,CER
Dhen Seller fails to delier! b$"er ma" see3 S1EC*F*C 1ERFOR>ANCE D*T/O,T
<*E*N< SELLER O1T*ON TO RETA*N <OO=S ON 1AC>ENT OF =A>A<ES
19
CI VI L LAW ( SALES) MEMORY AID
SALE OF >OEA4LES ON *NSTALL>ENT
RE>E=*ES OF ,N1A*= SELLER &16?6'
1% E8act f$lfillment sho$ld the b$"er fail to pa"
)% Cancel the sale if b$"er fails to pa" ) or more installments
.% Foreclose on chattel mortgage if b$"er fails to pa" ) or more installments
*f b$"er chooses foreclos$re! no f$rther action against b$"er to recoer an"
$npaid balance of the price
Dhen is law is applicable( Sale on moables b" installment
Sale on installment( pa"ment b" seeral partial pa"ments in small amo$nt
Rationale of the law( 4$"er is l$lled into thin3ing that he co$ld afford beca$se of
small amo$nts per installment 5 at the same time remed" ab$se of commercial
ho$ses
Nat$re of remedies( alternatie 5 not c$m$latie
Coerage( sale 5 financing transaction 5 contracts of lease with option to
p$rchase
Action ( A$dicial 5 E8tra-$dicial
S1EC*F*C 1ERFOR>ANCE
*f alread" chose specific performance! cannot an"more choose other remedies
E8cept( after choosing! it has become impossible! rescission ma" be p$rs$ed
RESC*SS*ON
Dhen chosen! there is correlatie obligation to restit$te
4$t stip$lation that installments paid are forfeited are alid if not $nconscionable
=eemed chosen when(
a% Notice of rescission is sent
b% Ta3es possession of s$b-ect matter of sale
c% Files action for rescission
4arring effect on recoer" of balance
FORECLOS,RE
4arring effect on recoer of balance
E8tent of barring effect( p$rchase price
E8ception( mortgagor ref$ses to delier propert" to effect foreclos$re2 e8penses
inc$rred in attorne"s fees! etc%
*>>OEA4LES &*N <ENERAL'
RE>E=*ES OF SELLER
1% Anticipator" breach
Seller has reasonable gro$nds to fear loss of immoable sold 5 its price s$e for
RESC*SS*ON
)% Non pa"ment of price
RESC*SS*ON
RE>E=*ES OF 4,CER
1% =ist$rbed in possession or with reasonable gro$nds to fear dist$rbance
S,S1EN= 1AC>ENT
)% *n case of s$bdiision or condo pro-ects
*f real estate deeloper fails to compl" with obligation according to approed plan(
a' RESC*N=
b' S,S1EN= 1AC>ENT ,NT*L SELLER CO>1L*ES
*>>OEA4LES &4C *NSTALL>ENT'
17H) Applies onl" to contract of sale
>aceda Law applies to COS 5 CTS 5 Financing
>ACE=A LAD
Coerage( REAL ESTATE defines space CON=O not defined space &w;
common areas'
1:
CI VI L LAW ( SALES) MEMORY AID
1% contract of sale
)% contract to sell
.% financing transactions
E8cl$ded(
1% ind$strial
)% commercial
.% sale to tenants $nder agrarian laws
R*</TS <RANTE= TO 4,CERS(
1% 4$"er paid at least ) "ears installment
a% 1a" witho$t interest the balance within grace period of 1 month for eer" "ear
of installment pa"ment
<race to be e8ercised once eer" 7 "ears
b% Dhen no pa"ment 0 cancelled2 b$"er entitled to 7GK of what he has paid J 7K
for eer" "ear e8ceeding HGK of pa"ments made
Cancellation to be effected .G da"s from notice 5 $pon pa"ment of cash
s$rrender al$e
)% 4$"er paid lees than ) "ears installment
a% <race period is 9G da"s
b% Cancellation if fail$re to pa" within 9G da"s grace
c% .G da"s notice before final cancellation
b$"er can still pa" within the .G da"s period
with interest
1$rpose of law ( 1rotect b$"ers in installment against oppressie conditions
Notice needed waier thereof id oppressie
Appl" to contracts een before law was enacted
Stip$lation to contrar" is oid
Other rights(
a% Sell rights to another
b% Reinstate contract b" $pdating within .G da"s before cancellation
c% =eed of Sale to be done b" notarial act
d% To pa" f$ll installment in adance the balance of price an"time witho$t interest
e% /ae f$ll pa"ment annotated in certificate of title
CHAPTER 11: REMEDY OF RESCISSION IN CONTRACTS COVERIN2 IMMOVABLES
RESC*SS*ON &RESOL,T*ON' 11H1 RESC*SS*ON 1.?7
legal basis is s$bstantial breach legal basis is lesion &rescissible contract'
principal remed"! retaliator" vs. $n-$st part" s$bsidiar" remed" cannot be instit$ted
e8cept when other remedies e8ha$sted
m$t$al restit$tion m$t$al restit$tion
Nat$re( A$dicial
E8tra -$dicial Rescission
allowed if stip$lated2 b$rden to s$e shifts to part" who do not li3e rescission
co$rt still has final sa" as to propriet" of rescission
Forfeit$re of amo$nts alid being in nat$re of penal cla$se
CONTRACT OF SALE CONTRACT TO SELL
<oerned b" gen$s SALE <oerned b" gen$s SALE
Ownership passes beca$se of tradition Ownership passes $pon f$ll pa"ment
Non0pa"ment is resol$tor" condition which
ma" be basis of breach
Non pa"ment is s$spensie non0pa"ment
e8ting$ishes contract to sell
1erfection gies rise to reciprocal demandable
obligation
1erfection gies rise to reciprocal conditional
obligation
CONTRACT OF SALE RESC*SS*ON *S A11L*CA4LE
CONTRACT TO SELL RESC*SS*ON NOT A11L*CA4LE
Non pa"ment of p$rchase price wo$ld a$tomaticall" cancel een witho$t f$rther
action for rescission
E8cept( *f s$b-ect matter is residential lots! law on rescission applies when there is
s$bstantial breach
1?
CI VI L LAW ( SALES) MEMORY AID
CHAPTER 12: CONDITION 9 WARRANTIES
A% CON=*T*ON
Dhen a contract contains a condition! the non0happening of which wo$ld not
constit$te a breach b$t e8ting$ishes the obligation
/oweer! if part" to the sales contract has promised that the condition sho$ld happen
or be performed! the non0performance of which ma" be treated b" parties as breach
CON=*T*ON DARRANTC
1$rports to e8istence of obligation 1$rports to performance of obligation
Obligation m$st be stip$lated to form part
of the obligation
Need not be stip$lated2 ma" form part of
obligation b" proision of law
>a" attach itself to obligation of seller to
delier possession 5 transfer
Relates to the s$b-ect matter itself or to
obligation of the seller as to the s$b-ect
matter of the sale
4% EB1RESS DARRANT*ES & RE+,*S*TES '
1% it m$st be an affirmation of fact or an" promise b" seller relating to the s$b-ect
matter of sale
)% nat$ral tendenc" of affirmation or promise is to ind$ce b$"er to p$rchase s$b-ect
matter
.% b$"er p$rchases the s$b-ect matter rel"ing thereon
when breached! seller is liable for damages
C% *>1L*E= DARRANT*ES deemed incl$ded in all contracts of sale whether parties are
act$all" aware or not aware or whether the" were intended or not2 b" operation of law
1% warrant" that seller has a right to sell
refers to cons$mmation stage since in cons$mmation stage! it is where
ownership is transferred b" tradition
not applicable to sheriff! a$ctioneer! mortgagee! pledgee
)% warrant" against eiction
$nless contrar" proision appears in contract
when ownership is transferred! b$"er shall en-o" the legal and peacef$l
possession of the thing
RE+,*S*TES OF 4REAC/ OF DARRANTC A<A*NST EE*CT*ON(
1% b$"er is eicted in whole or in part from the s$b-ect matter of sale
)% there is a final -$dgement
.% basis of eiction is a right prior to sale or an act imp$table to endor
6% seller has been s$mmoned in he s$it for eiction at the instance of
b$"er2 or made .
rd
part" defendant thro$gh .
rd
part" complaint bro$ght
b" b$"er
no appeal needed nor a need to resist eiction for right to accr$e2 eno$gh that
aforementioned re#$isites are complied with
warrant" cannot be enforced $ntil aforementioned re#$isites conc$r
applies to -$dicial sale2 -$dgement debtor responsible for eiction $nless
otherwise decreed in -$dgement
endor not liable for eiction if aderse possession had been commenced
before sale b$t prescriptie period is completed after transfer
L*A4*L*TC OF SELLER( &eiction w;c ca$sed b$"er to lose whole s$b-ect matter'
1% al$e of thing at time of eiction & whether or not 0;J of price of sale '
)% al$e of income of fr$its
.% cost of s$it which ca$sed the eiction
6% e8penses of contract if b$"er paid for them
7% damages 5 interests and ornamental e8penses if sale was made in bad faith
R*</TS OF 4,CER D/EN =E1R*EE= OF ONLC 1ART OF T/E S,4AECT >ATTER 4,T DO,L=
NOT /AEE 4O,</T S,C/ 1ART *F NOT *N RELAT*ON FOR T/E D/OLE(
1% rescission
)% m$t$al restit$tion
1H
CI VI L LAW ( SALES) MEMORY AID
.% DARRANTC A<A*NST ENC,>4RANCES &non0 apparent' re#$isites(
a% immoable sold is enc$mbered with non apparent b$rden or serit$de not
mentioned in the agreement
b% nat$re of non apparent serit$de or b$rden is s$ch that it m$st be pres$med
that the b$"er wo$ld not hae ac#$ired it had he been aware thereof
when breach of warrant" e8ist( b$"er ma" as3 for rescission or indemnit"
warrant" not applicable when non apparent b$rden or serit$de is recorded
in the Registr" of 1ropert" $nless there is e8pressed warrant" that the thing
is free from all b$rdens 5 enc$mbrances
6% DARRANTC A<A*NST /*==EN =EFECTS
SELLER does not warrant patent defect2 caeat emptor
E8cept when hidden
a% s$b-ect matter ma" be moable or immoable
b% nat$re of hidden defect is s$ch that it sho$ld render the s$b-ect matter $nfit
for the $se of which it was intended or sho$ld diminish its fitness
c% had the b$"er been aware! he wo$ld not hae ac#$ired it or wo$ld hae
gien a lower price
when defect is isible or een if isible if the b$"er is an e8pert b" reason of his
trade or profession! seller is not liable
obligation of seller for breach depends on whether he has 3nowledge of s$ch
defect or not
a% seller is aware seller sho$ld ret$rn price 5 ref$nd e8penses of contract
with damages
b% seller is not aware 0 seller sho$ld ret$rn price and interest 5 ref$nd
e8penses & no damages '
b$"er ma" elect between withdrawing from contract or demanding
proportionate red$ction of price with damages in either case
applicable to -$dicial sale e8cept -$dgement debtor not liable for damages
action to prescribe 9 months from delier" of s$b-ect matter
7% =EFECTS ON AN*>ALS
een in the case of professional inspection b$t hidden defect is of s$ch nat$re that
e8pert 3nowledge is not s$fficient 0 defect shall be considered as RE=/*4*TORC
if et fails to discoer thro$gh ignorance or bad faith he is liable for damages
a% sale of animals on teams & ) or more '
when onl" one is defectie! onl" one is redhibited 5 not the others
e8ception( when it appears that p$rchase of team will not be done
witho$t the defectie one
appl" to sale of other things
b% sale of animals at fair or p$blic a$ction
no warrant" against hidden defects
c% sale of animals with contagio$s disease is oid
d% sale of $nit of animal
oid if $se ; serice for which the" are ac#$ired has been stated in the
contract and the" are fo$nd to be $nfit thereof
prescription of action( 6G da"s from date of delier" to b$"er
if sale is rescinded! animals to be ret$rned in same condition when the" are
ac#$ired2 b$"er shall answer for in-$r" ; loss d$e to his fa$lt
b$"er ma" elect between withdrawing from sale or demanding
proportionate red$ction of price with damages in either case
=% S1EC*F*C *>1L*E= DARRANT*ES *N T/E SALE OF <OO=S
1% Darrant" as to fitness 5 #$alit"2 re#$isites(
a% b$"er ma3es 3nown to seller the partic$lar p$rpose for which goods are
ac#$ired and it appears that the b$"er relied on the seller@s s3ill or -$dgement
b% goods are bo$ght b" description from seller who deals in goods of that
description
)G
CI VI L LAW ( SALES) MEMORY AID
no warrant" $nless there is stip$lation in case of sale of specified article $nder
its patent or trade name
meas$re of damage( difference between al$e of goods at time of delier" and
al$e the" wo$ld hae had if the" had answered to the warrant"
)% Sale of <oods b" sample
*f seller is a dealer in goods of that 3ind! there is an implied warrant" that the
goods shall be free from defect rendering them $nmerchantable which wo$ld
not be apparent on reasonable e8amination of the sample
E% EFFECTS OF DA*EER
1arties ma" increase or diminish implied warrant" against eiction2 b$t effect
depends on good faith or bad faith on the part of the seller%
1% seller in bad faith 5 there is waier against eiction n$ll 5 oid
)% b$"er witho$t 3nowledge of a partic$lar ris3 made general ren$nciation of
warrant" not waier b$t merel" limits liabilit" of seller in case of eiction &pa"
al$e of s$b-ect matter at time of eiction'
.% b$"er with 3nowledge of ris3 of eiction ass$med its conse#$ences 5 made a
waier endor not liable &applicable onl" to waier of warrant" against
eiction'
when goods deliered to b$"er he cannot rescind sale
if he 3new of the breach of warrant" when he accepted goods witho$t protest
if he fails to ret$rn or offer to ret$rn goods to seller in s$bstantiall" as good
condition as the" were at time ownership was transferred
when goods deteriorated! b$"er can still ret$rn them in that condition if s$ch is d$e
to breach or warrant"
F% 4,CER@S O1T*ON *N CASE OF 4REAC/ OF DARRANTC
1% Accept goods 5 set $p breach of warrant" b" wa" of reco$pment in
dimin$tion or e8tinction or the price%
)% Accept goods 5 maintain action against seller for damages
.% Ref$se to Accept goods 5 maintain action against seller for damages
6% Rescind contract of sale 5 ref$se to receie goods;ret$rn them when
alread" receied%
CHAPTER 13: E;TIN2UISHMENT
<RO,N=S(
1% same gro$nds whereb" obligations in general are e8ting$ished(
a% pa"ment or performance
b% loss of the s$b-ect matter
c% condonation or remission
d% conf$sion or merger of rights or creditor and debtor
e% compensation
f% noation
g% ann$lment
h% rescission
i% f$lfillment of a resol$tor" condition
-% prescription
)% conentional redemption onl" applies to contract of sale
.% legal redemption onl" applies to contract of sale
CONEENT*ONAL RE=E>1T*ON
seller resered the right to rep$rchase thing sold
co$pled with obligation to ret$rn price of the sale! e8pensed of contract 5 other
legitimate pa"ments and the necessar" 5 $sef$l e8penses made on the thing sold
right m$st be recogniIed in the deed of sale2 m$st be the same contract
O1T*ON TO 1,RC/ASE
right to rep$rchase the thing sold granted to the endor in a separate instr$ment from
the deed of sale
)1
CI VI L LAW ( SALES) MEMORY AID
E+,*TA4LE >ORT<A<E
a contract with right to rep$rchase is e#$itable mortgage if the following re#$isites
conc$r(
1% price of sale with right to rep$rchase is $n$s$all" inade#$ate
)% seller remains in possession as a lessee or otherwise
.% $pon ; after e8piration of right to rep$rchase! another instr$ment e8tending the
period of redemption is e8ec$ted
6% b$"er retains for himself a part of the p$rchase price
7% seller binds himself to pa" ta8es on thing sold
9% real intention of parties is to sec$re the pa"ment of a debt or performance of other
obligation
IN CASE OF DOUBT IN DETERMININ2 WHETHER IT IS E<UITABLE MORT2A2E
OR SALE A RETRO (WITH RI2HT OF REPURCHASE IT SHALL BE CONSTRUED
AS E<UITABLE MORT2A2E)
D/AT TO LOOF FOR *N =ETER>*N*N< NAT,RE OF CONTRACT
1% lang$age of the contract
)% cond$ct of parties to reeal real intent
RE>E=C AEA*LA4LE TO EEN=OR( as3 for reformation of contract
RAT*ONALE 4E/*N= 1ROE*S*ON ON E+,*TA4LE >ORT<A<E(
1% Circ$mention of $s$r" law
)% Circ$mention of prohibition against pactum commissorium creditor cannot
appropriate the things gien b" wa" of pledge or mortgage2 remed" here is foreclos$re
real intention of parties is that the pretended p$rchase price is mone" loaned 5 to
sec$re pa"ment of the loan! sale with pacto de retro is drawn $p
1ER*O= OF RE=E>1T*ON
1% No period agreed $pon 6 "ears from date of contract
)% Dhen there is agreement sho$ld no e8ceed 1G "ears2 if it e8ceeded! alid onl" for
the first 1G "ears%
.% Dhen period to redeem has e8pired 5 there has been a preio$s s$it on the nat$re of
the contract seller shill has .G da"s from final -$dgement on the basis that contract
was a sale with pacto de retro( rationale( no redemption d$e to erroneo$s belief that it
is e#$itable mortgage which can be e8ting$ished b" pa"ing the loan%
6% Dhen period has e8pired 5 seller allowed the period of redemption to e8pire seller is
at fa$lt for not haing e8ercised his rights so sho$ld not be granted a new period
EFFECT D/EN T/ERE *S NO RE=E>1T*ON >A=E(
1% -$rispr$dence before the NCC( b$"er a retro a$tomaticall" ac#$ires f$ll ownership
)% $nder present art 19G:( there m$st be. -$dicial order before ownership of real propert"
is consolidate in the b$"er a retro
/OD *S RE=E>1T*ON EFFECTE=(
1% Seller a retro m$st ret$rn first pa" the following(
a% the price of the thing sold
b% e8pensed of the contract and other legitimate pa"ments made b" reason of
the sale
c% necessar" and $sef$l e8pensed made on the thing sold
)% Ealid tender of pa"ment is s$fficient
.% >ere sending of notice witho$t alid tender is ins$fficient
6% Fail$re to pa" $sef$l 5 $nnecessar" e8penses entitled endee to retain land $nless
act$al reimb$rsement is made
*N CASE OF >,LT*01ART*ES
1% Dhen an $ndiided thing is old beca$se co0owners cannot agree that it be allotted to
on of them endee a retro m" compel the endor to redeem the whole thing
))
CI VI L LAW ( SALES) MEMORY AID
)% Dhen an $ndiided thing is sold b" co0owners ; co0heirs! endors a retro ma" onl"
e8ercise his right oer his respectie share2 endee a retro ma" demand that the"
m$st come to an agreement first and ma" not be compelled to consent to a partial
redemption
.% Dhen rights for co0owners oer an $ndiided thins is sold as regards to their own
share endee retro cannot compel one to redeem the whole propert"
6% Sho$ld one of the co0heirs;co0owners s$cceed in redeeming the propert" s$ch
endor a retro shall be considered as tr$stee with respect to the share of the other co0
owners;co0heirs%
FR,*TS
1% what controls is the stip$lation between parties as regards the fr$its2 if none
)% at time of e8ec$tion of the sale a retro there sho$ld be isible or growing fr$its there
shall be no pro0rating at time of redemption of no indemnit" was paid b" the endee a
retro
.% at time of e8ec$tion sale a retro there sho$ld be no fr$its b$t there are fr$its at time of
redemption pro0rated between endor a retro 5 endee a retro giing the endee a
retro a part corresponding to the time he possessed the land%
LE2AL REDEMPTION
right to be s$brogated $pon the same terms and conditions stip$lated in the contract!
in the place of one who ac#$ires the thing b" p$rchase or b" dation in pa"ment or b"
other transaction whereb" ownership is transmitted b" onero$s title%
1% among co0heirs
an" of heirs sells hereditar" right to stranger before partition
an" of the co0heirs ma" be s$brogated to the rights of the p$rchaser b" redeeming
said hereditar" right( reimb$rse b$"er of the price of the sale
co0heirs has 1 month from receipt of notice in writing
)% among co0owners
an" or all of co0owners sells their shared to .
rd
person
an" co0owner ma" e8ercise right of redemption b" pa"ing reasonable price of
propert" to the b$"er
if ) or more co0owners desire to e8ercise right of redemption! the" ma" onl" do so
in proportion to the share the" ma" respectiel" hae in the thing owned in
common
=*ST*NCT*ON 4ETDEEN R*</T OF RE=E>1T*ON OF CO0/E*RS FRO> CO0ODNERS
CO0/E*RS CO0ODNERS
/eir ma" redeem for himself alone the
hereditar" right sold b" a co0heir
Co0owner ma" redeem propert" b$t een if
$ses his own f$nds! redemption in$res to
the benefit of other co0owners
Sale of hereditar" right &1G??' oer no
partic$lar ob-ect
Sale of interest in partic$lar propert"
.% among ad-oining owners
a% r$ral land
where piece of r$ral land has an area not e8ceeding 1 hectare! ad-oining
owner has right to redeem $nless grantee does not own a r$ral land
if ) or more ad-acent lot owners desire to e8ercise right to redeem! owner of
ad-oining lot with smaller area shall be preferred
if ) or more ad-acent lit owners desire to e8ercise right to redeem 5 both hae
same lot area! one who first re#$ested shall be granted
b% $rban land
when piece of land is small 5 cannot be $sed for an" practical p$rpose 5
bro$ght merel" for spec$lation! owner of ad-oining land can redeem
) or more owners of ad-oining lot desire to e8ercise right to redeem! owner
whose intention towards $se of land shall be preferred%
c% sale of credit litigation
).
CI VI L LAW ( SALES) MEMORY AID
when a credit or other incorporeal right in litigation is sold! debtor shall hae a
right to e8ting$ish it b" reimb$rsing the assignee for the price the latter paid
therefor pl$s -$dicial costs! interest
debtor ma" e8ercise right within .G da"s from assignee demands pa"ment
from him
D/EN 1ER*O= OF RE=E>1T*ON 4E<*NS TO R,N
1% right of legal pre0emption of redemption shall be e8ercised within .G da"s from notice
b" the b$"er
)% deed of sale not to be recorded in R= $nless accompanied b" affidait that b$"er has
gien notice to redemptioners
.% when there is act$al 3nowledge! no need to gie written notice2 period of redemption
begins to r$n from act$al 3nowledge
OT/ER *NSTANCES D/EN R*</T OF LE<AL RE=E>1T*ON *S <RANTE=
1% Redemption of homesteads
1$blic Land Act
Land ac#$ired $nder free patent homestead
S$b-ect to rep$rchase b" wife! legal heirs within 7 "ears from date of cone"ance
<ranted b" law! need not be stip$lated
)% Redemption in ta8 sales
in case of ta8 delin#$enc";fail$re to pa" ta8 assessments! propert" is foreclosed
delin#$ent pa"er has 1 "ear to redeem b" pa"ing to the reen$e =istrict Officer the
amo$nt of ta8 delin#$encies! 5 interest or p$rchase price%
.% Redemption b" -$dgement debtor
1 "ear to redeem b" pa"ing p$rchaser at p$blic a$ction with interest
6% Redemption in e8tra-$dicial foreclos$re
1 "ear from date of sale and registration
7% Redemption in -$dicial foreclos$re of mortgage
no right to redeem is granted to debtor mortgagor
e8cept when mortgagee is ban3 of a ban3ing instit$tion
HG da"s after finalit" of -$dgement
CHAPTER 14: ASSI2NMENT
Sale of credits 5 other incorporeal things
Technical term b$t basicall" a sale
D/AT >AFES ASS*<N>ENT =*FFERENT FRO> S1EC*ES SALE(
ASS*<N>ENT SALE
S$b-ect matter *ntangibles Tangibles
Form Consens$al Consens$al
4inding effect to .
rd
persons
Recorded in registr" of
propert"
No recording needed to s$ch
effect
EFFECT OF ASS*<N>ENT
1% lac3 of 3nowledge or consent of debtor not essential for alidit" b$t has legal effect
)% assignment of rights made w;o 3nowledge of debtor debtor ma" set $p against
assignee the compensation w;c wo$ld pertain to him against assignor of all credits
prior to assignment and later ones $ntil he had 3nowledge of the assignment
.% debtor has consented to assignment cannot set $p compensation $nless assignor
was notified that he resered his right to the compensation
6% debtor has 3nowledge b$t no consent 0 compensation ma" still be set $p
TRANSFER OF ODNERS/*1
)6
CI VI L LAW ( SALES) MEMORY AID
b" tradition 5 not b" perfection
e8ec$tion of p$blic instr$ment beca$se intangibles cannot be ph"sicall" transferred
ACCESSOR*ES 5 ACCESS*ONS
incl$des all accessor" rights s$ch as g$arant"! mortgage! pledge or preference
DARRANT*ES
1% against hidden defect 0 N;A beca$se intangibles has no ph"sical e8istence
)% e8istence 5 legalit" of credit 0 there is warrant" e8cept when what is sold is do$btf$l
acco$nt
.% solenc" of debtor 0 no warrant"! $nless
a% there is stip$lation
b% insolenc" was prior to assignment 5 of common 3nowledge
shall onl" last for 1 "ear
6% one who assigns inheritance right w;o en$merating rights shall be answerable for his
character as an heir
7% one who sells certain rights for a l$mp s$m! shall be answerable for legitimac" of the
whole in general b$t not for each of the ario$s parts
4REAC/ OF DARRANTC
1% if in good faith 0 e8penses of the contract 5 other legitimate pa"ments made b"
reason of the assessment
)% if in bad faith 0 e8penses of contract 5 other legitimate pa"ments pl$s $sef$l 5
necessar" e8penses
ASS*<N>ENT OF CRE=*T OR *NCOR1OREAL R*</T *N L*T*<AT*ON
spec$latie
law wo$ld rather benefit the debtor of s$ch credits rather than the one who merel"
spec$lates for profit
when credit or incorporeal right in litigation is assigned or sold! debtor has a right to
e8ting$ish it b" reimb$rsing the assignee for the price the b$"er paid pl$s interest
right to redeem to be e8ercised within .G da"s from demand b" assignee for pa"ment
R*</T TO RE=EE> 4C =E4TOR NOT AEA*LA4LE *N T/E FOLLOD*N< *NSTANCES &NOT
CONS*=ERE= S1EC,LAT*EE'
1% assignment of credit ; incorporeal right to co0heir or co0wor3er
)% assignment to creditor in pa"ment for his credit
.% assignment to possessor of tenement or piece of land which is s$b-ect to the right in
litigation assigned
CHAPTER 10: BUL= SALES LAW
1rotect creditor of merchant stored
. t"pes of transactions(
1% Sale of goods other than in ordinar" co$rse of b$siness
)% Sale of b$siness
.% Sale of fi8t$res 5 e#$ipments
Sho$ld coer onl" merchants beca$se creditors cannot get ade#$ate sec$rit" beca$se
goods are sold ordinaril" in co$rse of b$siness
Not coered(
1% with waier of creditor of seller
)% receier! assignee in insolenc" proceeding
=$t" of seller to perform the following when transaction is within the coerage of the
law
1% ma3e sworn statement of listing of creditors
)% delier" of sworn statement to b$"er
.% appl" the proceeds pro0data to claims of creditors shown in erified statement
6% written adance disclos$re to creditors
EFFECTS OF NON0CO>1L*ANCE
)7
CI VI L LAW ( SALES) MEMORY AID
FA*L,RE TO(
ON TRANSACT*ON ON SELLER
1repare 5 delier sworn listing of creditors Fra$d$lent 5 oid Criminal Liabilit"
Appl" proceeds pro0rata to listed creditors Fra$d$lent 5 oid Criminal Liabilit"
>a3e adance written disclos$re of
transactions to creditors
Not oid No Criminal Liabilit"
Register sworn statement with =T* Not oid No Criminal Liabilit"
*ncl$de or omit names of creditors 5
correct amo$nt d$e in the statement
Eoid Criminal Liabilit"
Sale for no consideration Eoid Criminal Liabilit"
ANT*0=,>>C LAD
1enaliIes Filipinos who permit aliens to $se them as nominees or d$mmies to en-o"
priileges resered onl" for Filipinos
>anagement! operation as officers! emplo"ees or laborers
Control or non0control position