Obligations of the Vendor

Principal Obligations of the Vendor (Art. 1495)

 to transfer ownership of the determinate thing sold

 to deliver the thing with its accessions and accessories, if any, condition in which they were
upon the perfection of the contract (art. 1537)
 to warrant against eviction and against hidden defects (art. 1547)
 to take care of the thing, pending delivery, with proper diligence (art 1163)
 to pay expenses of the deed of sale, unless there is a stipulation to the contrary (art. 1487)

A. To transfer ownership of the determinate thing sold

o The primary obligation of the seller after the perfection of the contract of sale is to
transfer ownership and deliver the thing sold.
o The obligation is a right; with delivery, the seller will be entitled to collect the
purchase price and delivery is the means by which the seller can free himself from
the obligation to TAKE CARE of the thing sold.
o The action of the vendee to cause the fulfilment of the sale does not involve adverse
claim of ownership because the vendor’s title is recognized and he/she is merely
being asked to deliver or transfer by any of the modes of delivery.
o When property is unlawfully taken the owner has the right of action against the
taker to recover property. The right may be transferred by sale or assignment.

**The vendor need not be the owner of the thing at the time of perfection of the contract; it
suffices that he has the right to transfer the ownership at the time it is delivered.

o Transfer of ownership and delivery of the thing sold is not essential to the perfection
of the contract, but if the seller does not deliver at the time stipulate the buyer may
ask for RESCISSION of the contract or FULFILLMENT with the RIGHT TO
DAMAGES in both cases.
o The purchases in execution sales is not entitled to immediate possession of the
property sold. Conveyance of land is issued only after the period of redemption has
expired.
o In a sale of registered land, the vendee has a right to receive and the vendor has the
obligation to transfer to him not only the possession and employment but also the
certificate of title.
o The purchaser is entitled to recover the money paid by him where the contract is
set aside by reason of the mutual material mistake of the parties as to the identity
or quantity of the land sold.

B. To deliver the thing with its accessions and accessories, if any, condition in which they
were upon the perfection of the contract (art. 1537)

o The parties should take into consideration not only the particular thing which is the
subject matter, but also the condition at the time such contract was perfected.
 o The vendor is obliged to preserve the thing pending delivery because the thing sold
plus its accessions and accessories must be in the condition in which they were
upon the perfection of the contract.
o The thing sold should be delivered in a condition suitable for its enjoyment by the
buyer for the purposes contemplated.
o A sale of a determinate thing includes all its accessions and accessories even though
they are not mention.
o Accessions are fruits of a thing; or additions to, or improvements upon, a thing.
o Accessories are anything attached to a principal thing for its completion, ornament,
or better use such as picture frame.

I. Right of a Vendee to the Fruits

 The vendee has a right to the fruits of the thing sold from the time the
obligation to DELIVER arises. The obligation arises upon the perfection of
sale.
 S sold his horse to B for 20K, while S was still in possession of the
horse it gave birth to a colt. Who has a right to the colt?
 B because the colt was born after the perfection of the contract.
 S will have a right to the colt if it was born before his obligation to
deliver the horse has arisen and B has not yet paid the price.

II. Vendee is Not Entitled

 In par 2 of 1537, “All fruits shall pertain to the vendee from the day on
which the contract was perfected” unless modified by the parties.
 If the vendee rescinds the contract of sales instead of exacting fulfillment,
he is only entitled to damages.
 In a contract of promise to sell, the vendee is not entitled to the fruits. He
can only demand fulfillment of the contract.

C. To warrant against eviction and against hidden defects (art. 1547)

o Implied Warranty – derived by an implication or inference 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.
 If the buyer based his claim of warranty upon affirmations by the seller
made without use of technical words of warranty but with the apparent
intent to warrant then it is an implied warranty.

 Implied by law – seller guarantees that he has a right to sell the thing sold
and to transfer ownership to the buyer who shall not be disturbed in his legal
and peaceful possession.
  Implied warranty against hidden defects or unknown encumbrance –
seller guarantees that the thing sold is free from any hidden faults or defects
or any charge or encumbrance not declared or known to the buyer.

 Implied warranty as to fitness or mechantable quality – seller guarantees

that the thing sold is reasonably fit for the known particular purpose for
which it was acquired by the buyer or , where it was bought by description.

 Right to transfer title at time of delivery – right of the seller to sell the
thing need not reside in him at the time the contract is perfected. It is
sufficient that vendor has a right AT THE TIME OWNERSHIP IS
TRANSFEREED DURING DELIVERY.

 Nature of Implied Warranty – Natural, not an essential element of a

contract. Presumed to exist even though nothing has been said in the
contract on the subject.

 Caveat Emptor applies to execution sales.

 Implied warranty is not applicable

 As is and where is sale – means nothing more than that the vendor
makes no warranty as to the quality or workable condition of the
goods and that the vendee takes them in the condition in which they
are found and from the place where they are located. As is in public
auction refers to the physical condition of the merchandise and not
the legal situation
 Sale of second hand articles – no implied warranty because as to the
condition, adaptation, fitness or sustainability for the purpose for
which made or the quality of an article sold as and for a second-hand
article.
 Sale by virtue of authority in fact or law – no warranty of title is
implied in sale by one not professing to be the owner.

o Warranty in case of Eviction (art. 1548)

 Eviction is defined as the judicial process, whereby the vendee is deprived

of the whole or part of the thing purchased by virtue of a final judgment
based on a right prior to the sale or an act imputable to the vendor.
 The vendor’s obligation is generally not extinguished upon the delivery of
a thing. The vendor guarantees the vendee’s peaceful possession of thing
sold and must generally defend against attacks of third persons, based on
defect in the rights of the vendor.

 Elements of Warranty Against Eviction

  Vendee is deprived in whole or in part of the thing purchased
 He is so deprived by virtue of a final judgment
 The judgment is based on a right prior to the sale or an act imputable
to the vendor
 The vendor was summoned in the suit for eviction and made a co-
defendant at the instance of the vendee.
 There is no waiver on the part of the vendee.
 In the absence of these requisites a breach of warranty against eviction
cannot be declared.

 Types of Eviction

 Total – when the vendee is deprived of the whole of the thing

purchased
 Partial – a) the vendee is deprived of part of the thing purchased; b)
the vendee is deprived of some items that were jointly sold with
other items; c) if the immovable sold should be encumbered with
any non-apparent burden or servitude, not mentioned in the
agreement, of such a nature that it must be presumed that the vendee
would not have acquired it had he been aware.

 Warranty against eviction is generally applicable to the sale of all classes of

property except: a) the sale of an inheritance, in which the seller shall only
be answerable for his character as an heir, but not ownership of all the things
supposedly comprise the inheritance; b) sale of lump sum of the whole of
certain rights, rents, or products, in which the vendor is not obliged to
warrant each of the various parts of which it may be composed.

D. To take care of the thing, pending delivery, with proper diligence (art 1163)

o The seller is obliged to give something and to take care of the thing sold with the
proper diligence of a good father of a family, unless the law or the stipulation of
the parties requires another standard of care.
o The seller is bound to deliver the thing sold and its accessions and accessories in a
condition in which they were upon the perfection of the contract.

E. To pay expenses of the deed of sale, unless there is a stipulation to the contrary (art.
1487)

Ways if Effecting Delivery (art. 1496)

 The ownership of the thing sold shall be transferred to the vendee upon the delivery which
may be affected in the following ways
o By actual or real delivery (art. 1497)
 o By constructive or legal delivery (art. 1498-1501)
o By delivery in any other manner signifying an agreement that the possession is
transferred to the vendee. (art.1494-1499)

 The critical factor which gives legal effect to the act is the actual intention of the vendor to
deliver and its acceptance by the vendee.
 Delivery remains an indispensable requisite
 Delivery must be made to the vendee or his authorized representative.

A. Actual Delivery (art. 1497)

o Tradition is a derivative mode of acquiring ownership by virtue of which one who

has the right and intention to alienate a corporeal thing, transmits it by virtue of a
just title to one who accepts the same.
o Delivery may be actual or constructive but both forms contemplate the absolute
giving up of the control and custody of the property on the part of the vendor and
the assumption of the same by the vendee.

o Importance of Tradition

 Transfer of Ownership – delivery of movable property made by mere

consent or agreement if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale.
 Ownership is not transferred by mere delivery actual or constructive,
the important thing is intention to give and acceptance by the
vendee.

 Contracts only constitutes titles or rights to the transfer of or

acquisition of ownership, delivery or tradition is the method of
accomplishing the same.

 It is during the delivery that law requires the seller to have the right
to transfer ownership of the thing sold.

 Enjoyment of the Thing Sold – Delivery is also necessary to enable the

vendee to enjoy and make use of the property purchased.

 Liability in case of loss – when the thing subject of the sale is placed in the
control and possession of the vendee or his agent then the delivery is
complete and the vendee cannot avoid liability in case the thing is
subsequently lost without fault of the vendor.

 Right of Vendor to Claim Payment – delivery produces its natural effects in

law, the principal and most important of which being the transfer of
ownership without prejudice to the right of the vendor to claim payment of
 the price. If the buyer has not become the owner because of lack of delivery,
his action is not accion reinvindicatoria but to exact performance or
rescission with damages in both cases.

 Ownership shall not pass to the purchaser until he has fully paid the price,
ownership of the thing shall pass from the vendor upon actual or
constructive delivery even in the price has not been paid fully.

 Delivery of the thing sold with the acceptance of payment of the price
consummates the contract of sale.

o Actual Delivery – when the thing sold is placed in the control and possession of
the vendee or his agent. This involves physical delivery of the thing and is usually
done by the passing of a movable thing from hand to hand.

 Actual or Manual delivery of an article sold is not always essential to the

passing of title. The parties may agree when and on what conditions the
ownership in the subject of the contract shall pass to the buyer.
 Proof of delivery is evidence by a handwritten acknowledgement of a
person that he or she actually received the thing or the goods, as in delivery
of receipts.
 A bill of lading cannot substitute for a delivery receipt

B. By constructive or legal delivery (art. 1498-1501)

1. Constructive Delivery
o Execution of a public instrument as a manner of delivery applies to both immovable
and movables.
o This manner of delivery is symbolic. The buyer uses a document as proof of his
ownership of the property sold.
o Possession along with ownership is transferred to the vendee by virtue of the
notarized deed of conveyance.
o If an agreement was made and it is analogous to a deed of sale and has been made
through a public instrument then its execution is equivalent to the delivery of the
property.
o Mere execution of the deed of sale in a public instrument is equivalent to the
delivery of the property.
o If it appears or can be inferred from the document that it was not the intention of
the parties to make delivery then no tradition can be deemed to have taken place.
o The execution of a public instrument only gives rise to a prima facie presumption
of delivery thus it can be rebutted by means of clear and convincing evidence.
o The failure of the vendee to take actual possession negates the presumption.
o Delivery contemplated in the law refers to 1) possession; and 2) ownership.
 o The vendor cannot give more than what he has, and the vendor cannot place the
buyer in possession of a thing that is not in the vendor’s possession. This lack of
possession cannot be cured by a public instrument.
o For symbolic delivery to have the effect of tradition, it is necessary that the vendor
shall have had such control over the thing sold that, at the moment of the sale, its
material delivery could have been made.
o The execution of a public instrument is equivalent to delivery notwithstanding the
fact that the vendor may not have control of the property sold.
o Symbolic Tradition is symbolic when to effect delivery the parties make use of a
token symbol to represent the thing delivered.

2. Traditio Longa Manu and Brevi Manu (Long Hand Delivery and Short Hand art.
1499)

o Traditio Longa Manu

 This mode takes place by the mere consent or agreement of the contracting
parties as when the vendor merely points to the thing sold which shall
thereafter be at the control and disposal of the vendee.
 The mere pointing of the property sold manifests that he has transferred
ownership of the thing sold.
 Delivery by mere consent or agreement of the contracting parties is
qualified by the phrase “if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale”.

o Tradition Brevi Manu

 Happens when the vendee has already the possession of the thing sold by
virtue of another title as when the lessor sells the thing leased to the lessee.

**The modes of delivery mentioned in 1499 applies to movable property notwithstanding

that traditio longa manu can be applied to immovable property.

3. Traditio Constitutum Possessorium (art. 1500)

o This mode of delivery is the opposite of traditio brevi manu, it takes place when the
vendor continues in possession of the property sold not as owner but in some other
capacity, as for example when the vendor stays as a tenant of the vendee.
o The vendor delivering the thing to the vendee so that the vendee may in turn deliver
it back to the vendor. All these have taken place by mere consent or agreement of
the parties.

4. Quasi Traditio (art. 1501)

o It can only be made with respect to corporeal things. In case of incorporeal things,
delivery is affected : a) by the execution of a public instrument; or b) when that
mode of delivery is not applicable, by the placing of the titles of ownership in the
 possession of the vendee; or c) by allowing the vendee to use his rights as new
owner with the consent of the vendor.
o The placing of the titles of ownership in the possession of the vendee or the use
which he may make his right with the consent of the vendor shall be considered as
delivery.
o It is necessary that the act be coupled with intention of delivering the thing.

Contract of Sale or Return and Sale on Trial or Approval or Satisfaction (art. 1502)

 General Rule
o The parties may agree that the buyer shall temporarily take the goods into his
possession to see whether they are satisfactory to him and if not they may refuse to
become owner. The same object may be attained by an agreement that the property
shall pass to the buyer on delivery but that he may return the goods if they are
unsatisfactory.
o The duty of the buyer in returning would be to return the object or property in a
reasonable time and in the same or substantially the same condition as they were
when the contract was made.

 Sale or Return
o A contract by which property is sold but the buyer, who becomes the owner upon
delivery, has the option to return the same to the seller instead of paying the price.
o The purchase or return of the good rests on the buyer without reference of the
quality of the goods.
o The loss or destruction of the goods prior to the exercise of the buyer’s option to
return falls upon the buyer and renders him responsible to the seller for the purchase
price or that which remained unpaid.
o The buyer may indicate that the he is no longer returning the goods. The sale would
now be an absolute sale.

 Sale on Trial or Approval

o A contract in the nature of an option to purchase if the goods prove satisfactory,
approval of the buyer is a condition.
o The title shall remain to be with the seller until the sale has become absolute either
by the buyer’s approval of the goods or by his failing to comply with the express
or implied conditions of the contract as to giving notice of dissatisfaction or as to
returning the goods.
o The buyer cannot accept part and reject the rest.

 Sale or Return Distinguished from Sale on Trial

Sale or Return Sale on Trial

Sale subject to a resolutory condition Sale subject to a suspensive condition
Depends on the will of the buyer Depends on the character or quality of the
goods
 The ownership of the goods passes to the Ownership remains in the seller until the
buyer on delivery and subsequent return of buyer signifies his approval or acceptance
the goods reverts ownership to the seller. to the seller
Risk of loss or injury rests upon the buyer Risk still remains with the seller.

Ownership Not Transferred Upon Delivery (art. 1503)

 General Rule
o Sale of specific goods, the ownership in the goods sold passes to the buyer upon
delivery to the carrier. Subject to the following exceptions: a) if contrary intention
appears by the terms of the contract (art. 1523)
o Paragraphs 2nd and 3rd of art 1523

 Transfer of Ownership Where Goods Sold Delivered to Carrier

o Delivery, if constructive, passes title in the thing sold and delivery to the carrier is
deemed to be a delivery to the buyer. The risk of loss is therefore, as between the
buyer and the seller, falls upon the buyer.
o If the seller directs the carrier to redeliver the goods at their destination to the
seller himself, or to his order, it indicates an intention that the carrier shall be the
bailee for the seller and ownership will remain with the seller.
o The form of bill of lading will not necessarily pass ownership to the buyer, if the
shipper does not own the goods, or the authority from the seller to sell the goods,
ownership to the goods will not pass to the consignee by the mere fact that the
consignee’s name was inserted in the bill of lading.

 Seller or his Agent is Consignee

o Where goods are shipped and by the bill of lading, the goods are deliverable to the
seller or his agent or to the order of the seller or his agent, the seller thereby
reserves the ownership in the goods and the carrier is a bailee for him and not the
buyer.
o The seller may not only retain the goods until the buyer performs his obligation
under the contract, but he may, even in violation of the contract dispose of them
to third persons.

Risk of Loss (art. 1504)

 General Rule
o If the thing is lost by fortuitous event the risk is borne by the owner of the thing at
the time of the loss under the principle of res perit domino except:
 Where the seller reserves the ownership of the goods merely to secure the
performance by the buyer of his obligations under the contract, the
 ownership is considered transferred to the buyer who, therefore, assumes
the risk from the time of delivery.
 Where the actual delivery had been delayed through the fault of either the
buyer or seller, the goods are at the risk of the party at faults with respect
to any loss which might not have occurred but for such fault.