Atty. Teodoro A.

Pastrana
Law on Sales
Accion Redhibitoria is an action instituted by the vendee against the vendor to avoid a sale on account of
some vice or defect in the thing sold which renders it unfit for the use intended or which will diminish its
fitness for such use to such an extent that had the vendee been ware thereof, he would not have acquired
it.
Accion Quanti Minoris is an action to procure the return of a part of the purchase price paid by the
vendee to the vendor by reason of such defect.
Conditional Redemption is that which takes place when the vendor reserves the right to repurchase the
thing sold with the obligation to reimburse to the vendee the price of the sale, the expense of the contract,
and other legitimate payments made by reason of the sale, as well as necessary and useful expenses made
on the thing sold.
Legal Redemption is the right to be subrogated upon the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other
transaction whereby ownership is transmitted by onerous title.
Stoppage in Transitu is the right of the unpaid seller to resume possession of the goods at anytime while
they are in transit by virtue of which he will then be entitled to the same rights in regard to the goods as
he would have had if he had never parted with the possession
Negotiable Document of Title A document in which it is stated that the good referred to therein will be
delivered to the bearer, or to the order of any person named in such document is a negotiable document of
title
Priority of Right is based upon the principles of prius tempore potior jure, that is first in time, stronger in
right
arranty in case of !"iction is an implied warranty in contracts of sale, by virtue of which if the vendee
is deprived of the whole or a part of the thing purchased by a final judgment based on a right prior to the
sale or an act imputable to the vendor, such vendor shall answer for the eviction.
ai"er of !"iction Consciente is a voluntary renunciation made by the vendee of the right to warranty in
case of eviction. The effects of such eviction is that the liability of the vendor in case of eviction shall
extend only to the payment of the value of the thing sold at the time of eviction
ai"er of !"iction #ntencionada is a voluntary renunciation made by the vendee of the right to warranty
in case of eviction, with knowledge of the risk of eviction and assuming the consequences thereof.
An e$uitable mortgage is defined as one that, although lacking some formality or form, nevertheless
reveals the intention of the parties to charge a real property as security for a debt.
A pre%emption right, or right of pre%emption, is a contractual right to acquire certain property newly
coming into existence before it can be offered to any other person or entity.
Conditon an uncertain event or contingency on the happening of which the obligation or right of the
contract depends. In such case, the obligation of the contract does not attach until the condition is
performed
arranty A statement or representation made by the seller contemporaneously as part of the contract of
sale, having reference to the character, quality, or title of the goods, and by which he promises or
undertakes to insure that certain facts are or shall be as he then represents
#mplied arranty is that which the law derives from the nature of the transaction or the relative situation
or circumstances of the parties, irrespective of any intention of the seller to create it.
arranty against hidden defects the seller guarantees that the thing sold is free from any hidden defaults
or defects or any charge or encumbrance not declared or know to the buyer
WARRANTIES: 1. Seller has right to sell 2. Against Eviction 3. Against Hidden Defects 4. Against
non-apparent burden or servitudes 5. Against redhibitor defects on ani!als ". #or consu!er goods
Kitem Duque Kadatuan Jr. 1 | P a g e
Distinguish Redemption from Pre-Emption
Perfection of Sale
1. $n rede!ption% the sale to a third person has alread been perfected% $n pre-e!ption the
sale to a third person has not et been perfected
Scope of Right
2. &he right of 'ede!ption has a !uch broader scope than the right of pre-e!ption. &he
'ight of (re-e!ption can onl be e)ercised *here there is a prospective resale of a s!all
piece of urban land originall bought b the prospective vendor !ere for speculation
Directed against whom
3. &he right of 'ede!ption is directed against the third person *ho bought the propert. &he
right of (re-e!ption is directed against the prospective vendor *ho is about to resell his
propert
Effect
4. &he effect of 'ede!ption is to e)tinguish the contract that has alread been perfected or
consu!!ated% &he effect of (re-e!ption is to prevent the birth or perfection of a contract
Art !"#" Where the price cannot $e determined in accordance with the preceding articles%
or in an& other manner% the contract is inefficacious 'owe(er% if the thing or an& part
thereof has $een deli(ered to and appropriated $& the $u&er he must pa& a reasona$le
price therefor What is a reasona$le price is a )uestion of fact dependent on the
circumstances of each particular case *n+
Art !"#, The contract of sale is perfected at the moment there is a meeting of minds upon
the thing which is the o$-ect of the contract and upon the price
.rom that moment% the parties ma& reciprocall& demand performance% su$-ect to the
pro(isions of the law go(erning the form of contracts
Art !"## The ownership of the thing sold shall $e transferred to the (endee upon the
actual or constructi(e deli(er& thereof *n+
Art !"#/ The parties ma& stipulate that ownership in the thing shall not pass to the
purchaser until he has full& paid the price *n+
Art !"#0 A promise to $u& and sell a determinate thing for a price certain is reciprocall&
demanda$le
An accepted unilateral promise to $u& or to sell a determinate thing for a price certain is
$inding upon the promissor if the promise is supported $& a consideration distinct from the
price *!",!a+
Kitem Duque Kadatuan Jr. 2 | P a g e
Recto 1aw
Art !"/" In a contract of sale of personal propert& the price of which is pa&a$le in
installments% the (endor ma& e2ercise an& of the following remedies:
*!+ E2act fulfillment of the o$ligation% should the (endee fail to pa&3
*4+ 5ancel the sale% should the (endee6s failure to pa& co(er two or more
installments3
*7+ .oreclose the chattel mortgage on the thing sold% if one has $een constituted%
should the (endee6s failure to pa& co(er two or more installments In this case% he
shall ha(e no further action against the purchaser to reco(er an& unpaid $alance of
the price An& agreement to the contrar& shall $e (oid *!","-A-a+
Art !"/, The preceding article shall $e applied to contracts purporting to $e leases of
personal propert& with option to $u&% when the lessor has depri(ed the lessee of the
possession or en-o&ment of the thing *!","-A-a+
Art !"/8 In the case referred to in two preceding articles% a stipulation that the
installments or rents paid shall not $e returned to the (endee or lessee shall $e (alid insofar
as the same ma& not $e unconsciona$le under the circumstances *n+
Art !,9" :nless otherwise agreed% the goods remain at the seller6s ris; until the ownership
therein is transferred to the $u&er% $ut when the ownership therein is transferred to the
$u&er the goods are at the $u&er6s ris; whether actual deli(er& has $een made or not%
e2cept that:
*!+ Where deli(er& of the goods has $een made to the $u&er or to a $ailee for the
$u&er% in pursuance of the contract and the ownership in the goods has $een
retained $& the seller merel& to secure performance $& the $u&er of his o$ligations
under the contract% the goods are at the $u&er6s ris; from the time of such deli(er&3
*4+ Where actual deli(er& has $een dela&ed through the fault of either the $u&er or
seller the goods are at the ris; of the part& in fault *n+
MACEDA LAW
All transactions involving sale or fnancing of real estate on instalment
payments, including residential condominium apartments ut e!cluding
"ndustrial #ots, $ommercial lots and %ales to tenants under &A '()) and &A
*'(+.
,uyer -as paid atleast 2 ./A&% of instalments
1. 0o pay 1it-out additional interest t-e unpaid instalments 1it- t-e total
grace period earned y -im. 1 mont-21year. /!ercised only once
123years and its e!tensions if any
2. "f contract is cancelled, t-e seller s-all refund t-e uyer t-e $as-
%urrender 4alue of t-e payments on t-e property equivalent to 5 367
and after 3 .ears of instalments, an additional 37 every year ut not to
e!ceed +67 of t-e total payments made. 0-e cancellation s-all ta8e
place after '6 days from receipt y t-e uyer of t-e notice of
cancellation or t-e demand for rescission of t-e contract y a
9:0A&"A# A$0 and ;P:9 <;## PA.=/9 of t-e case %urrender 4alue to
t-e uyer.
'. Do1n payments, Deposits or options on t-e contract s-all e included
on t-e computation of t-e total numer of instalments made
Kitem Duque Kadatuan Jr. ' | P a g e
). "n case less t-an 2 ./A&% of instalments 1ere made, uyer s-all e
given a >&A$/ P/&":D of not less t-an *6 days. 0-en ,uyer cancels
same procedure
Art !,48 Su$-ect to the pro(isions of this Title% notwithstanding that the ownership in the
goods ma& ha(e passed to the $u&er% the unpaid seller of goods% as such% has:
*!+ A lien on the goods or right to retain them for the price while he is in possession
of them3
*4+ In case of the insol(enc& of the $u&er% a right of stopping the goods in transitu
after he has parted with the possession of them3
*7+ A right of resale as limited $& this Title3
*"+ A right to rescind the sale as li;ewise limited $& this Title
Where the ownership in the goods has not passed to the $u&er% the unpaid seller has% in
addition to his other remedies a right of withholding deli(er& similar to and coe2tensi(e
with his rights of lien and stoppage in transitu where the ownership has passed to the
$u&er *n+
Art !,4# Su$-ect to the pro(isions of this Title% the unpaid seller of goods who is in
possession of them is entitled to retain possession of them until pa&ment or tender of the
price in the following cases% namel&:
*!+ Where the goods ha(e $een sold without an& stipulation as to credit3
*4+ Where the goods ha(e $een sold on credit% $ut the term of credit has e2pired3
*7+ Where the $u&er $ecomes insol(ent
The seller ma& e2ercise his right of lien notwithstanding that he is in possession of the
goods as agent or $ailee for the $u&er *n+
Art !,4/ Where an unpaid seller has made part deli(er& of the goods% he ma& e2ercise his
right of lien on the remainder% unless such part deli(er& has $een made under such
circumstances as to show an intent to wai(e the lien or right of retention *n+
Art !,40 The unpaid seller of goods loses his lien thereon:
*!+ When he deli(ers the goods to a carrier or other $ailee for the purpose of
transmission to the $u&er without reser(ing the ownership in the goods or the right
to the possession thereof3
*4+ When the $u&er or his agent lawfull& o$tains possession of the goods3
*7+ <& wai(er thereof
The unpaid seller of goods% ha(ing a lien thereon% does not lose his lien $& reason onl& that
he has o$tained -udgment or decree for the price of the goods *n+
Art !,79 Su$-ect to the pro(isions of this Title% when the $u&er of goods is or $ecomes
insol(ent% the unpaid seller who has parted with the possession of the goods has the right of
stopping them in transitu% that is to sa&% he ma& resume possession of the goods at an& time
while the& are in transit% and he will then $ecome entitled to the same rights in regard to
the goods as he would ha(e had if he had ne(er parted with the possession *n+
Kitem Duque Kadatuan Jr. ) | P a g e
Art. 1533. Where the goods are of perishale nat!re" or where the seller
e#pressly reser$es the right of resale in %ase the !yer sho!ld &a'e
defa!lt" or where the !yer has een in defa!lt in the pay&ent of the
pri%e for an !nreasonale ti&e" an !npaid seller ha$ing a right of lien or
ha$ing stopped the goods in transit! &ay resell the goods. (e shall not
thereafter e liale to the original !yer !pon the %ontra%t of sale or for
any pro)t &ade y s!%h resale" !t &ay re%o$er fro& the !yer da&ages
for any loss o%%asioned y the rea%h of the %ontra%t of sale.
The seller is o!nd to e#er%ise reasonale %are and *!dg&ent in &a'ing a
resale" and s!*e%t to this re+!ire&ent &ay &a'e a resale either y p!li%
or pri$ate sale. (e %annot" howe$er" dire%tly or indire%tly !y the goods.
,n-
Art !,7" An unpaid seller ha(ing the right of lien or ha(ing stopped the goods in transitu%
ma& rescind the transfer of title and resume the ownership in the goods% where he e2pressl&
reser(ed the right to do so in case the $u&er should ma;e default% or where the $u&er has
$een in default in the pa&ment of the price for an unreasona$le time The seller shall not
thereafter $e lia$le to the $u&er upon the contract of sale% $ut ma& reco(er from the $u&er
damages for an& loss occasioned $& the $reach of the contract
The transfer of title shall not $e held to ha(e $een rescinded $& an unpaid seller until he
has manifested $& notice to the $u&er or $& some other o(ert act an intention to rescind It
is not necessar& that such o(ert act should $e communicated to the $u&er% $ut the gi(ing or
failure to gi(e notice to the $u&er of the intention to rescind shall $e rele(ant in an& issue
in(ol(ing the )uestion whether the $u&er had $een in default for an unreasona$le time
$efore the right of rescission was asserted *n+
Art !,7, Su$-ect to the pro(isions of this Title% the unpaid seller6s right of lien or stoppage
in transitu is not affected $& an& sale% or other disposition of the goods which the $u&er
ma& ha(e made% unless the seller has assented thereto
If% howe(er% a negotia$le document of title has $een issued for goods% no seller6s lien or right
of stoppage in transitu shall defeat the right of an& purchaser for (alue in good faith to
whom such document has $een negotiated% whether such negotiation $e prior or
su$se)uent to the notification to the carrier% or other $ailee who issued such document% of
the seller6s claim to a lien or right of stoppage in transitu *n+
Art !,7# The (endor is $ound to deli(er the thing sold and its accessions and accessories
in the condition in which the& were upon the perfection of the contract
All the fruits shall pertain to the (endee from the da& on which the contract was perfected
Art !,"# In a contract of sale% unless a contrar& intention appears% there is:
*!+ An implied warrant& on the part of the seller that he has a right to sell the thing
at the time when the ownership is to pass% and that the $u&er shall from that time
ha(e and en-o& the legal and peaceful possession of the thing3
*4+ An implied warrant& that the thing shall $e free from an& hidden faults or
defects% or an& charge or encum$rance not declared or ;nown to the $u&er
This Article shall not% howe(er% $e held to render lia$le a sheriff% auctioneer% mortgagee%
pledgee% or other person professing to sell $& (irtue of authorit& in fact or law% for the sale
of a thing in which a third person has a legal or e)uita$le interest *n+
Kitem Duque Kadatuan Jr. 3 | P a g e
Art. 15./. E$i%tion shall ta'e pla%e whene$er y a )nal *!dg&ent ased on
a right prior to the sale or an a%t i&p!tale to the $endor" the $endee is
depri$ed of the whole or of a part of the thing p!r%hased.
Art. 155/. The $endor shall not e oliged to &a'e good the proper
warranty" !nless he is s!&&oned in the s!it for e$i%tion at the instan%e of
the $endee. ,1./1a-
The $endor &!st e s!&&oned in the s!it for e$i%tion at the
instan%e of the $endee
Art. 155.. 0f the $endee has reno!n%ed the right to warranty in %ase of
e$i%tion" and e$i%tion sho!ld ta'e pla%e" the $endor shall only pay the
$al!e whi%h the thing sold had at the ti&e of the e$i%tion. Sho!ld the
$endee ha$e &ade the wai$er with 'nowledge of the ris's of e$i%tion and
ass!&ed its %onse+!en%es" the $endor shall not e liale.
Art. 1551. Sho!ld the $endee lose" y reason of the e$i%tion" a part of the
thing sold of s!%h i&portan%e" in relation to the whole" that he wo!ld not
ha$e o!ght it witho!t said part" he &ay de&and the res%ission of the
%ontra%t2 !t with the oligation to ret!rn the thing witho!t other
en%!&ran%es that those whi%h it had when he a%+!ired it.
Art !,,, When the warrant& has $een agreed upon or nothing has $een stipulated on this point% in
case e(iction occurs% the (endee shall ha(e the right to demand of the (endor:
*!+ The return of the (alue which the thing sold had at the time of the e(iction% $e it greater
or less than the price of the sale3
*4+ The income or fruits% if he has $een ordered to deli(er them to the part& who won the
suit against him3
*7+ The costs of the suit which caused the e(iction% and% in a proper case% those of the suit
$rought against the (endor for the warrant&3
*"+ The e2penses of the contract% if the (endee has paid them3
*,+ The damages and interests% and ornamental e2penses% if the sale was made in $ad faith
Art !,09 Should the (endee $e distur$ed in the possession or ownership of the thing
ac)uired% or should he ha(e reasona$le grounds to fear such distur$ance% $& a (indicator&
action or a foreclosure of mortgage% he ma& suspend the pa&ment of the price until the
(endor has caused the distur$ance or danger to cease% unless the latter gi(es securit& for
the return of the price in a proper case% or it has $een stipulated that% notwithstanding an&
such contingenc&% the (endee shall $e $ound to ma;e the pa&ment A mere act of trespass
shall not authori=e the suspension of the pa&ment of the price *!,94a+
Art !,04 In the sale of immo(a$le propert&% e(en though it ma& ha(e $een stipulated that
upon failure to pa& the price at the time agreed upon the rescission of the contract shall of
right ta;e place% the (endee ma& pa&% e(en after the e2piration of the period% as long as no
demand for rescission of the contract has $een made upon him either -udiciall& or $& a
notarial act After the demand% the court ma& not grant him a new term
Art. 1133. Sales are e#ting!ished y the sa&e %a!ses as all other
oligations" y those stated in the pre%eding arti%les of this Title" and y
%on$entional or legal rede&ption. ,1531-
Art !894 The contract shall $e presumed to $e an e)uita$le mortgage% in an& of the following
cases:
*!+ When the price of a sale with right to repurchase is unusuall& inade)uate3
*4+ When the (endor remains in possession as lessee or otherwise3
Kitem Duque Kadatuan Jr. * | P a g e
*7+ When upon or after the e2piration of the right to repurchase another instrument
e2tending the period of redemption or granting a new period is e2ecuted3
*"+ When the purchaser retains for himself a part of the purchase price3
*,+ When the (endor $inds himself to pa& the ta2es on the thing sold3
*8+ In an& other case where it ma& $e fairl& inferred that the real intention of the parties is
that the transaction shall secure the pa&ment of a de$t or the performance of an& other
o$ligation
In an& of the foregoing cases% an& mone&% fruits% or other $enefit to $e recei(ed $& the (endee as rent
or otherwise shall $e considered as interest which shall $e su$-ect to the usur& laws *n+
Art !897 In case of dou$t% a contract purporting to $e a sale with right to repurchase shall
$e construed as an e)uita$le mortgage
Art !898 The right referred to in Article !89!% in the a$sence of an e2press agreement%
shall last four &ears from the date of the contract
Should there $e an agreement% the period cannot e2ceed ten &ears
'owe(er% the (endor ma& still e2ercise the right to repurchase within thirt& da&s from the
time final -udgment was rendered in a ci(il action on the $asis that the contract was a true
sale with right to repurchase
Art. 1134. 0n %ase of real property" the %onsolidation of ownership in the
$endee y $irt!e of the fail!re of the $endor to %o&ply with the pro$isions
of arti%le 1111 shall not e re%orded in the 5egistry of Property witho!t a
*!di%ial order" after the $endor has een d!ly heard. ,n-
Art !8!8 The (endor cannot a(ail himself of the right of repurchase without returning to
the (endee the price of the sale% and in addition:
*!+ The e2penses of the contract% and an& other legitimate pa&ments made $& reason
of the sale3
*4+ The necessar& and useful e2penses made on the thing sold
Art !8!4 If se(eral persons% -ointl& and in the same contract% should sell an undi(ided
immo(a$le with a right of repurchase% none of them ma& e2ercise this right for more than
his respecti(e share
The same rule shall appl& if the person who sold an immo(a$le alone has left se(eral heirs%
in which case each of the latter ma& onl& redeem the part which he ma& ha(e ac)uired
Art !84! The owners of ad-oining lands shall also ha(e the right of redemption when a
piece of rural land% the area of which does not e2ceed one hectare% is alienated% unless the
grantee does not own an& rural land
This right is not applica$le to ad-acent lands which are separated $& $roo;s% drains%
ra(ines% roads and other apparent ser(itudes for the $enefit of other estates
If two or more ad-oining owners desire to e2ercise the right of redemption at the same time%
the owner of the ad-oining land of smaller area shall $e preferred3 and should $oth lands
ha(e the same area% the one who first re)uested the redemption *!,47a+
Art !844 Whene(er a piece of ur$an land which is so small and so situated that a ma-or
portion thereof cannot $e used for an& practical purpose within a reasona$le time% ha(ing
$een $ought merel& for speculation% is a$out to $e re-sold% the owner of an& ad-oining land
has a right of pre-emption at a reasona$le price
Kitem Duque Kadatuan Jr. ? | P a g e
If the re-sale has $een perfected% the owner of the ad-oining land shall ha(e a right of
redemption% also at a reasona$le price
When two or more owners of ad-oining lands wish to e2ercise the right of
pre-emption or redemption% the owner whose intended use of the land in )uestion appears
$est -ustified shall $e preferred *n+
Art !847 The right of legal pre-emption or redemption shall not $e e2ercised e2cept within
thirt& da&s from the notice in writing $& the prospecti(e (endor% or $& the (endor% as the
case ma& $e The deed of sale shall not $e recorded in the Registr& of Propert&% unless
accompanied $& an affida(it of the (endor that he has gi(en written notice thereof to all
possi$le redemptioners
The right of redemption of co-owners e2cludes that of ad-oining owners *!,4"a+
Deli(er&
1. E)ecution of (ublic $nstru!ent
2. S!bolic Deliver +deliver of ,es of the place or depositor *here the !ovables are
,ept
3. -onstitutu! (ossessoriu!- the seller is in possession of the sub.ect !atter in the concept
of o*ner% and pursuant to the contract% the seller continue to hold possession no longer in
the concept of o*ner
4. &raditio /revi 0anu + lessee then o*ner
5. &raditio 1onga 0anu + Deliver of thing !erel b agree!ent% such as *hen the seller
points the propert sub.ect !atter of the sale b *a of deliver
-ontrol over the sub.ect !atter at the ti!e of e)ecution and the passage of reasonable ti!e for
the control to re!ain. 2nless there is ,no*ledge on the part of the purchaser that the vendor
cannot e)ercise actual control over the propert sold.
.AS > .ree alongside Ship - the seller pas all the charges and is sub.ect to ris, until the goods
are placed alongside the vessel
.?< > #ree on /oard + the sellers pas all the charges and e)penses up to the place of
destination *hether #ree on board that shipping point or #ree on /oard at point of destination. $f
destination the seller pas for the freight% if Shipping point the buer pas for the freight.
5I. > 5osts% Insurance and .reight > the buer pas a fi)ed price% *hich includes not onl the
purchase price of the goods but also the -osts% $nsurance and #reight.
Art !,"" If the same thing should ha(e $een sold to different (endees% the ownership shall
$e transferred to the person who ma& ha(e first ta;en possession thereof in good faith% if it
should $e mo(a$le propert&
Should it $e immo(a$le propert&% the ownership shall $elong to the person ac)uiring it who
in good faith first recorded it in the Registr& of Propert&
Should there $e no inscription% the ownership shall pertain to the person who in good faith
was first in the possession3 and% in the a$sence thereof% to the person who presents the
oldest title% pro(ided there is good faith *!"#7+
Art !,94 When goods are deli(ered to the $u&er &on sale or return& to gi(e the $u&er an
option to return the goods instead of pa&ing the price% the ownership passes to the $u&er of
deli(er&% $ut he ma& re(est the ownership in the seller $& returning or tendering the goods
within the time fi2ed in the contract% or% if no time has $een fi2ed% within a reasona$le time
*n+
Kitem Duque Kadatuan Jr. ( | P a g e
When goods are deli(ered to the $u&er on appro(al or on trial or on satisfaction% or other
similar terms% the ownership therein passes to the $u&er:
*!+ When he signifies his appro(al or acceptance to the seller or does an& other act
adopting the transaction3
*4+ If he does not signif& his appro(al or acceptance to the seller% $ut retains the
goods without gi(ing notice of re-ection% then if a time has $een fi2ed for the return
of the goods% on the e2piration of such time% and% if no time has $een fi2ed% on the
e2piration of a reasona$le time What is a reasona$le time is a )uestion of fact *n+
Art !"/! In the contract of sale of goods $& description or $& sample% the contract ma& $e
rescinded if the $ul; of the goods deli(ered do not correspond with the description or the
sample% and if the contract $e $& sample as well as description% it is not sufficient that the
$ul; of goods correspond with the sample if the& do not also correspond with the
description
The $u&er shall ha(e a reasona$le opportunit& of comparing the $ul; with the description
or the sample *n+
Kitem Duque Kadatuan Jr. + | P a g e