SALES SALE A nominate contract whereby one of the contracting parties obligates himself to transfer the ownership of and

to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent. NOTES !elivery and payment in a contract of sale are so interrelated and intertwined with each other that without delivery of the goods there is no corresponding obligation to pay. The two complement each other. "t is clear that the two elements cannot be dissociated# for the contract of purchase and sale is essentially a bilateral contract# as it gives rise to reciprocal obligations. $%io &arretto Sons# "nc. vs. 'ompania (aritima# )* S'+A ,)-.. Neither is the delivery of the thing bought nor the payment of the price necessary for the perfection of the contract of sale.&eing consensual# it is perfected by mere consent.

Elements Essential elements those without which# there can be no valid sale 'onsent or meeting of minds A !eterminable sub/ect matter %rice certain in money or its equivalent Natural elements inherent in the contract# and which in the absence of any contrary provision# are deemed to e0ist in the contract 1arranty against eviction 1arranty against hidden defects Accidental elements may be present or absent depending on the stipulation of the parties $e.g.conditions# interest# penalty# time or place of payment# etc.. 'haracteristics %rincipal 'onsensual2 &ilateral2 Nominate2 'ommutative2 "n some cases# aleatory $emptio spei.2 Onerous. 3 Aleatory contract 4 one of the parties or both reciprocally bind themselves to give or to do something in consideration of what the other shall give or do upon the happening of an event which is uncertain# or which is to occur at an indeterminate time. $E0. Sale of sweepsta5es tic5et. 'ontract to sell 4e0clusive right and privilege to purchase an ob/ect. 4a bilateral contract whereby the prospective seller# while e0pressly reserving the ownership of the sub/ect property despite delivery thereof to the prospective buyer binds himself to sell the said property e0clusively to the prospective buyer upon fulfillment of the condition agreed upon# that is# full payment of the purchase price. NOTE Absent a proviso in the contract that the title to the property is reserved in the vendor until full payment of the purchase price or a stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay within the fi0ed period# the transaction is an absolute contract of sale and not a contract to sell. $!ignos vs. 'A 6,7889. 3 The contract of sale by itself is not a mode of acquiring ownership. The contact transfers no real rights2 it merely causes certain obligations to arise.

'ontract of Sale vis4:4vis 'ontract to Sell ,. Title passes to the buyer upon delivery of the thing sold ,. Ownership is reserved in the seller and is not to pass until full payment of the purchase price *. Non4payment of the price is a negative resolutory condition and the remedy of the seller is to e0act fulfilment or to rescind the contract *. ;ull payment is a positive suspensive condition# the failure of which is not a breach casual or serious but simply prevents the obligation of the vendor to convey title from having binding force <. =endor loses and cannot recover ownership of the thing sold and delivered until the contract of sale is resolved and set aside <. Title remains in the vendor if the vendee does not comply with the condition precedent of ma5ing payment at the time specified in the contract

'onditional Sale 'ontract to Sell As to reservation of title to the sub/ect property "n both cases the seller may reserve the title to the sub/ect property until fulfillment of the suspensive condition i.e. full payment of the price As to effect of fulfillment of suspensive condition ,.>pon fulfillment of the suspensive condition# the contract of sale is thereby perfected# such that if there had been previous delivery of the sub/ect property to the buyer# ownership thereto automatically transfers to the buyer by operation of law without any further act by the seller. ,. >pon fulfillment of the suspensive condition# which is the full payment of the purchase price# ownership will not automatically transfer to the buyer although the property may have been previously delivered to him.The prospective seller still has to convey title to the prospective buyer by entering into a contract of absolute sale. As to effect of sale of the sub/ect property to <rd persons ,.'onstructive ?actual 5nowledge on the part of the *nd buyer of the defect in the sellers title renders him not a registrant in good faith.Such second buyer cannot defeat the first buyers title.+atio ;ulfilment of the suspensive conditions affects the sellers title to the property and previous delivery of the property automatically transfers ownership?title to the buyer. ,.Third person buying the property despite fulfilment of the suspensive condition cannot be deemed a buyer in bad faith and prospective buyer cannot see5 the relief of reconveyance of property. E0ception"f There was no previous sale of the property. O&@E'TS O; SALE +equisites ,.TA"NBS a. determinate or determinable $Arts. ,CD8# ,C)E. b. lawful $Arts ,<C-# ,CE6,#C9 c. should not be impossible $Art. ,<C8. e.g. must be within the commerce of man *. +"BATS must be transmissible E0ceptions 4future inheritance 4 service Emptio rei speratae Emptio spei ,. Sale of an e0pected thing ,. Sale of a mere hope or e0pectancy that the thing will come to e0istence2 Sale of the hope itself Sale is sub/ect to the condition that the thing will e0ist2 if it does not# there is no contract *. Sale produces

effect even if the thing does not come into e0istence# unless it is a vain hope <. The uncertainty is with regard to the quantity and quality of the thing and not the e0istence of the thing <. The uncertainty is with regard to the e0istence of the thing C. Ob/ect is a future thing C. Ob/ect is a present thing which is the hope or e0pectancy NOTE"n case of doubt the presumption is in favor of emptio rei speratae which is more in 5eeping with the commutative character of the contract Boods which may be Ob/ect of Sale E0isting goods goods owned or possessed by the seller. ;uture goods goods to be manufactured# raised or acquired by the seller after the perfection of the contract. NOTES A sale of future goods is valid only as an e0ecutory contract to be fulfilled by the acquisition and delivery of goods specified. 1hile there can be sale of future property# there can generally be no donation of future property $Article-D, 'ivil 'ode. ;uture inheritance cannot be sold. A contract of sale or purchase of goods to be delivered at a future time# if entered into without the intention of having any goods pass from one party to another# but with an understanding that at the appointed time# the purchaser is merely to receive or pay the difference between the contract and the mar5et prices# is illegal. Such contract falls under the definition of futures in which the parties merely gamble on the rise or fall in prices and is declared null and void by law. $Art. *E,8# N''. $Onapal %hil. 'ommodities# "nc. vs. 'A 6,77<9. "nstances when the 'ivil 'ode recogniFes sale of things not actually or already owned by the seller at the time of the sale Sale of a thing having potential e0istence $Article ,C),. Sale of future goods $Article ,C)*. 'ontract for the delivery at a certain price of an article which the vendor in the ordinary course of the business manufactures or procures for the general mar5et# whether the same is on hand at the time or not $Article ,C)-. Sale Agency to sell ,. &uyer receives the goods as owner ,. Agent receives the goods as goods of the principal who retains his ownership over them *. &uyer pays the price *. Agent delivers the price which in turn he got from his buyer <. &uyer# as a general rule# cannot return the ob/ect sold <. Agent can return the goods in case he is unable to sell the same to a third person C. Seller warrants the thing sold C. Agent ma5es no warranty for which he assumes personal liability as long as he acts within his authority and in the name of the seller D. &uyer can deal with the thing sold as he pleases being the owner D. Agent in dealing with the thing received# must act and is bound according to the instructions of the principal 'ontract for %iece of 1or5 Sale ,. The thing transferred is one not in e0istence and which never would have e0isted but for the order of the party desiring to acquire it ,. The thing transferred is one which would have e0isted and would have been the sub/ect of sale to some other person# even if the order had not been given *. The services dominate the contract even though there is a sale of goods involved *. The primary ob/ective of the contract is a sale of the manufactured item2 it is a sale of goods even though the item is manufactured by labor furnished by the seller and upon previous order of the customer <. Not within the Statute of ;rauds <. 1ithin the Statute of ;rauds

+ules to determine if the contract is one of Sale or %iece of wor5 "f ordered in the ordinary course of business sale "f manufactured specially for the customer and upon his special order# and not for the mar5et piece of wor5 S'AOOLS O; TAO>BAT (assachusetts rule"f specifically done at the order of another# this is a contract for a piece of wor5. $%hilippine application. New Gor5 rule"f thing already e0ists4SALE2 if not41O+H English rule"f material is more valuable4SALE2 if s5ill is more valuable41O+H &A+TE+ contract whereby one of the parties binds himself to give one thing in consideration of the otherIs promise to give another thing. NOTE The only point difference between contract of sale and barter is in the element which is present in sale but not in barter# namelyprice certain in money or its equivalent NOTE "f the consideration is partly in money and partly in another thing# determine The manifest intention of the parties "f the intent is not clear# apply the following rules "f the thing is more valuable than money barter "f the money and the thing are of equal value sale "f the thing is less valuable than money sale Sale !ation in %ayment No pre4e0isting credit ,. %re4e0isting credit *. Obligations are created *.Obligations are e0tinguished <. 'onsideration on the part of the seller is the price2 on the part of the buyer is the acquisition of the ob/ect <. 'onsideration of the debtor is the e0tinguishment of the debt2 on the part of the creditor# it is the acquisition of the ob/ect offered in lieu of the original credit Breater freedom in determining the price Less ;reedom in determining the price &uyer still has to pay the price The payment is received by the debtor before the contract is perfected. %+"'E The sum stipulated as the equivalent of the thing sold and also every incident ta5en into consideration for the fi0ing of the price# put to the debit of the vendee and agreed to by him. +equisites 'ertainty or ascertainable at the time of perfection +eal# not fictitious "n some cases# must not be grossly inferior to the value of the thing sold. %aid in money or its equivalent 'ertainty "t is not necessary that the certainty of the price be actual or determined at the time of the e0ecution of the contract. The price is certain in the following cases "f the parties have fi0ed or agreed upon a definite amount2 NOTE The fi0ing of the price can never be left to the discretion of one of the contracting parties.Aowever if the price fi0ed by one of the parties is accepted by the other# the sale is perfected. "f it be certain with reference to another thing certain "f the determination of the price is left to the /udgment of a specified person or persons even before such determination

"n the cases provided under Art. ,C-* N''

Effect when the price is fi0ed by the third person designated $BENE+AL +>LE%rice fi0ed by a third person designated by the parties is binding upon them. $EJ'E%T"ONS 1hen the third person acts in bad faith or by mista5e 1hen the third person disregards the specific instructions or the procedure mar5ed out by the parties Effect when the price is not fi0ed by the third person designated "f the third person refuses or cannot fi0 the price# the contract shall become ineffective# unless the parties subsequently agree upon the price "f the third person is prevented from fi0ing the price by the fault of the seller or buyer# the party not in fault may obtain redress against the party in fault Effect of Bross "nadequacy of %rice =oluntary sales $BENE+AL +>LE(ere inadequacy of the price does not affect validity of the sale. A valuable consideration# however small or nominal# if given or stipulated in good faith is# in the absence of fraud# sufficient.$+odrigueF vs. 'A# *E- S'+A DD<. ;uture inheritance cannot be sold. $EJ'E%T"ONS 1here low price indicates vice of consent# sale may be annulled2 or contract is presumed to be an equitable mortgage 1here the price is so low as to be shoc5ing to conscience# sale may be set aside. "nvoluntary or ;orced sales $BENE+AL +>LE(ere inadequacy of the price is not a sufficient ground for the cancellation of the sale if property is real.

$EJ'E%T"ONS 1here the price is so low as to be shoc5ing to the moral conscience# /udicial sale of personal property will be set aside "n the event of a resale# a better price can be obtained NOTEThe validity of the sale is not necessarily affected where the law gives to the owner the right to redeem# upon the theory that the lesser the price# the easier it is for the owner to effect redemption. Effect where price is simulated "f it is shown to have been in reality a donation or some other act or contract The sale is void but the act or contract may be valid as a donation "f not The contract is void and ine0istent Effect of ;ailure to determine price 1here contract e0ecutory The contract is inefficacious 1here the thing has been delivered to and appropriated by the buyer The buyer must pay a reasonable price therefore

+easonable price generally the mar5et price at the time and place fi0ed by the contract or by law for the delivery of the goods %erfection of Sale $BENE+AL +>LE"t is perfected at the moment there is meeting of the minds upon a determinate thing $ob/ect.# and a certain price $consideration.# even if neither is delivered. A choice between rescission and fulfilment# with damages in either case. NOTE Sale is a consensual contract2 Aence# delivery and payment are not essential for its perfection $EJ'E%T"ON1hen the sale is sub/ect to a suspensive condition by virtue of law or stipulation. 3 The terms and conditions of payment are merely accidental# not essential elements of the contract of sale e0cept where the partied themselves stipulate that in addition to the sub/ect4matter and the price# they are essential or material to the contract. +equirements for perfection 1hen parties are face to face 1hen an offer is accepted without conditions or qualifications NOTES A conditional acceptance is a counter4offer when negotiated thru phone it is as if it is negotiated face to face 1hen contract is thru correspondence or thru telegram 1hen the offeror receives or has 5nowledge of the acceptance by the offeree NOTE "f the buyer has already accepted but the seller does not 5now yet of the acceptance# the seller may still withdraw 1hen a sale is sub/ect to a suspensive condition ;rom the moment the condition is fulfilled Transfer of Ownership $BENE+AL +>LE1hile a contract of sale is consensual# ownership of the thing sold is acquired only upon its delivery# actual or constructive# to the buyer. $!aus vs. Sps. !e Leon# ,) @une *EE<. This is true even if the purchase has been made on credit. %ayment of the purchase price is not essential to the transfer of ownership# as long as the property sold has been delivered. $Sampaguita %ictures# "nc vs. @alwindor (anufacturers# "nc. 7< S'+A C*E. Nonpayment only creates a right to demand payment or to rescind the contract# or to criminal prosecution in the case of bouncing chec5s. $E!'A %ublishing and !istributing 'orp. vs. Santos# ,8C S'+A ),C. $EJ'E%T"ONS 'ontrary stipulation or %actum reservati dominii $contractual reservation of title. a stipulation# usually in sales by installment# whereby# despite delivery of the property sold# ownership remains with the seller until full payment of the price is made. 'ontract to sell 'ontract of insurance a perfected contract of sale# even without delivery# vests in the vendee an equitable title# an e0isting interest over the goods sufficient to be the sub/ect of insurance +>LES BO=E+N"NB A>'T"ON SALES ,.Sales of separate lots by auction are separate contracts of sale. *.Sale is perfected by the fall of the hammer <.Seller has the right to bid in the auction# provided a.such right was reserved b. notice was given that the sale was sub/ect to a right to bid on behalf of the seller c. right is not prohibited by law or by stipulation C.Advertisements for bidders are simply invitations to ma5e proposals# and the advertiser is not bound to accept the highest or lowest bidder# unless the contrary appears.

E;;E'T O; %+O("SE T+EATE! >N!E+ A+T. ,C-'ivil 'ode Accepted unilateral promise to sell or buy Only one ma5es the promise# this promise is accepted by the other. E0ampleA promises to sell to &# & accepts the promise# but does not in turn promise to buy. does not bind the promissor even if accepted and may be withdrawn anytime. NOTE %ending notice of its withdrawal# the accepted promise parta5es the nature of an offer to sell which if accepted# results in a perfected contract of sale $SancheF vs. +igos CD S'+A< )8.."n other words# if the acceptance is made before withdrawal# it constitutes a binding contract of sale although the option is given without consideration. if the promise is supported by a consideration distinct and separate from the price $option money.# its acceptance will give rise to a perfected contract. &ilateral promise to buy and sell One party accepts the others promise to buy and the latter# the formers promise to sell a determinate thing for a price certain it is reciprocally demandable "t requires no consideration distinct from the selling price NOTEthis is as good as a perfected sale.No title of dominion is transferred as yet# the parties being given only the right to demand fulfillment or damages. %olicitation An unaccepted unilateral promise to buy or sell. Even if accepted by the other party# it does not bind the promissor and maybe withdrawn anytime. This is a mere offer# and has not yet been converted into a contract. Option contract A contract granting a privilege in one person# for which he has paid a consideration# which gives him the right to buy certain merchandise# at anytime within the agreed period# at a fi0ed price. An option without consideration is void and the effect is the same as if there was no option 3 Aowever# in SancheF vs. +igos $,7-*.# even though the option was not supported by a consideration# the moment it was accepted# a perfected contract of sale resulted# applying Art. ,<*C of the N''. "n view of the ruling of the Supreme 'ourt# the only importance of the consideration for an option is that the option cannot be withdrawn by the grantor after acceptance. 3 "n an option to buy# the party who has an option may validly and effectively e0ercise his right by merely notifying the owner of the formers decision to buy and e0pressing his readiness to pay the stipulated price. +ight of ;irst +efusal "t is a right of first priority all things and conditions being equal2 there should be identity of the terms and conditions to be offered to the optionee and all other prospective buyers# with optionee to en/oy the right of first priority.A deed of sale e0ecuted in favor of a third party who cannot be deemed a purchaser in good faith# and which is in violation of theof the right of first refusal granted to the optionee is NOT voidable under the Statute of ;rauds# such contract is valid &>T rescissible under Article ,<8to ,<8,$<. of the New 'ivil 'ode $BuFman &ocaling 'o. vs. &onnavie2 +iviera ;ilipina# "nc vs. 'A et.al. B+ No. ,,-<DD# April D# *EE*.. The basis of the right of first refusal must be the current offer to sell of the seller or offer to purchase of any prospective buyer.Only after the optionee fails to e0ercise its right of first priority under the same terms and within the period contemplated could the owner validly offer to sell the property to a third person# again# under the same terms as offered to the optionee $%aranaque Hings Enterprises# "nc. vs. 'A B+ No. ,,,D<8# ;ebruary *)# ,77-. The lessees right of first option to buy the leased property in case of its sale is but a part of the bigger right to lease the said property from the lessor.The option was given to the lessee because she was the lessee of the sub/ect property."t was a component of the consideration of the lease.The option was by no means an independent right which can be e0ercised by the lessee."f the lessee is barred by the contract from assigning her right to lease the sub/ect property to any other party# the lessee is similarly barred to

assign her first option to buy the leased property to another. $&angayan et.al vs. 'A and Lim B+ No.,*<D8,# August *7# ,77-. Earnest money or A++AS is something of value to show that the buyer was really in earnest# and given to the seller to bind the bargain. "t is considered as part of the purchase price proof of perfection of the contract 3"t shall be deducted from the total price. Earnest money Option money ,. Title passes to the buyer upon delivery of the thing sold ,. Ownership is reserved to the seller and is not to pass until full payment *. "n case of non4payment# an action for specific performance or for rescission can be filed by the in/ured party *. "n case of non4payment# there can be action for specific performance <. %art of the purchase price <. (oney given as a distinct consideration for an option contract C. 1hen given# the buyer is bound to pay the balance C. The would4be buyer is not required to buy D. Biven when there is already a sale D. Applies to a sale not yet perfected +>LES ON +"SH O; LOSS AN! !ETE+"O+AT"ON The thing sold is lost before perfectionSeller bears the loss. The thing sold is lost at the time of perfection'ontract is void or ine0istent. The thing sold is lost after perfection# but before delivery $BENE+AL +>LE1ho bears the ris5 of loss is governed by the stipulations in the contract "n the absence of any stipulation ;irst view &uyer bears the loss as an e0ception to the rule of res perit domino. $EJ'E%T"ONS when ob/ect sold consists of fungible goods for a price fi0ed according to weight# number or measure seller is guilty of fraud# negligence# default or violation of contractual terms ob/ect sold is generic $'ivil 'ode of the %hilippines# %aras. NOTE This view conforms with (anresas view. &uyer would have been the one to profit from the thing had it not been lost or destroyed. 'ontrary view 1here the ownership is transferred by delivery# as in our code# the application of the a0iom res perit domino# imposes the ris5 of loss upon the vendor2 hence# if the thing is lost by fortuitous event before delivery# the vendor suffers the loss and cannot recover the price from the vendee $'ommentaries and @urisprudence on the 'ivil 'ode of the %hilippines# Tolentino. The thing is lost after delivery&uyer bears the loss. Kuestion"f one does not comply# the other need not payL AnswerTrue. &ut this only applies when the seller is able to deliver but does not. Effect of loss at the time of sale Thing entirely lost at the time of perfection'ontract is void and ine0istent Thing only partially lost=endee may elect between withdrawing from the contract or demanding the remaining part# paying its proportionate price Sale by description A sale where a seller sells things as being of a certain 5ind# buyer merely relying on the sellers representations or descriptions.

There is warranty that the thing sold corresponds to the representations or descriptions. Sale by sample A sale where a small quantity of a commodity is e0hibited by the seller as a fair specimen of the bul5# which is not present and as to which there is no opportunity to inspect or e0amine. NOTEThe mere e0hibition of the sample does not necessarily ma5e it a sale by sample.This e0hibition must have been the sole basis or inducement of the sale. There is warranty that the bul5 of the commodity will correspond in 5ind# quality# and character with the sample e0hibited. NOTE "n a sale by sample and by description# there is a two4fold warranty. +"BATS O; &>GE+ ,. +eturn the thing and recover the money paid# or *. +etain the thing and sue for the breach of warranty. %>+'AASE &G ("NO+S'ontract is generally voidable but in case of necessaries# where necessaries are sold and delivered to a minor or other person without capacity to act# he must pay a reasonable price therefore. Necessaries are those in Art. *7E. ;O+(AL"T"ES O; 'ONT+A'T O; SALE $BENE+AL +>LESale is a consensual contract and is perfected by mere consent. $EJ'E%T"ONS"n order to be enforceable by action# the following must be in writing Sale of personal property at a price not less than %DEE Sale of real property or an interest therein Sale of property not to be performed within a year from the date thereof Applicable statute requires that the contract of sale be in a certain form NOTE Statute of ;rauds is applicable only to e0ecutory contracts and not to contracts which are totally or partially performed.

'A%A'"TG TO &>G O+ SELL $BENE+AL +>LEAll persons who can bind themselves also have legal capacity to buy and sell. $EJ'E%T"ONS Absolute incapacity $minors# demented persons# imbeciles# deaf and dumb# prodigals# civil interdictees. 4 party cannot bind themselves in any case. +elative incapacity incapacity e0ists only with reference to certain persons or a certain class of property +elative "ncapacity A. Ausband and wife $Art. ,C7E.Benerally# a sale by one spouse to another is void. The husband and wife cannot sell property to each other e0cept 1hen a separation of property was agreed upon by the spouses 1hen there has been a /udicial separation of property under Article ,<C and ,<D of the ;amily 'ode &. "ncapacity by reason of relation to property $Art. ,C7,. The following persons cannot acquire property by purchase# even at a public auction# either in person or through the mediation of another$BAE%4@O. the guardian# with respect to the property of his ward2 agents# with respect to the property whose administration or sale may have been entrusted to them# unless the consent of the principal has been given2 e0ecutor or administrator# with respect to the property of the estate under administration2 public officers and employees# with respect to the properties of the government# its political subdivisions# or BO''s# that are entrusted to them2

/udges# /ustices# prosecuting attorneys# cler5s of courts# etc.# with respect to the property in custogia legis2 and any other person specially disqualified by law. E0amples of persons especially disqualified by law a. Aliens who are disqualified to purchase agricultural lands b. An unpaid seller having a right of lien or having stopped the goods in transitu# who is prohibited from buying the goods either directly or indirectly in the resale of the same# at public or private sale which he may ma5e c. The officer holding the e0ecution# or his deputy. NOTE1hile those disqualified under Arts. ,C7and ,C7, may not become lessees $Art. ,)C).# still aliens may become lessees even if they cannot buy lands. $ Effect of violation 1ith respect to nos. , to <the sale is voidable. +easononly private rights# which are sub/ect to ratification are violated NOTE "n the case of Lao vs. Benato# ,<- S'+A --# the Supreme 'ourt found that the sale by the administrator of certain properties of the estate in order to settle the e0isting obligations of the estate was made to the administrators son for a grossly low price.;urthermore# the said sale was not submitted to the probate court for approval as mandated by the order authoriFing the administrator to sell.The sale was indubitably illegal# irregular and fictitious# and the courts approval of the assailed compromise agreement violated Article ,C7, and cannot wor5 to ratify a fictitious contract which is non4e0istent and void from the very beginning 1ith respect to nos. C to )the sale is null and void. +easonviolation of public policy cannot be sub/ect to ratification O&L"BAT"ONS O; TAE =EN!O+$1%!4TT. Transfer ownership $cannot be waived. !eliver the thing sold $cannot be waived. 1arrant against eviction and against hidden defects $can be waived or modified since warranty is not an essential elementof the contract of sale. Ta5e care of the thing# pending delivery# with proper diligence $Article ,,)<. %ay for the e0penses of the deed of sale# unless there is stipulation to the contrary !EL"=E+G "s a mode of acquiring ownership# as a consequence of certain contracts such as sale# by virtue of which# actually or constructively# the ob/ect is placed in the control and possession of the vendee. !elivery of the thing together with the payment of the price# mar5s the consummation of the contract of sale$%N& vs. Ling# )%hil. ),,. "n all forms of delivery# it is necessary that the act of delivery be coupled with the intention of delivering the thing.The act without the intention is insufficient. $Nor5is !istributor# "nc. vs. 'A# ,7D S'+A )7C. Hinds Actual or real placing the thing under the control and possession of the buyer. Legal or constructive delivery is represented by other signs or acts indicative thereof delivery by the e0ecution of a public instrument. NOTEBives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not effected because of a legal impediment $Ten ;orty +ealty vs. 'ruF# ,Sept. *EE<. traditio symbolica 4 to effect delivery# the parties ma5e use of a to5en or symbol to represent the thing delivered traditio longa manu seller pointing out to the buyer the things which are transferred# which at the time must be in sight. traditio brevi manu buyer simply continues in possession of the thing but under title of ownership. traditio constitutum possessorium seller continues in possession but under a different title other than

ownership. Kuasi4tradition delivery of rights# credits or incorporeal property# made by placing titles of ownership in the hands of buyer allowing buyer to ma5e use of rights Tradition by operation of law 'onstructive delivery requires three things before ownership may be transferred The seller must have control over the thing The buyer must be put under control There must be the intention to deliver the thing for purposes of ownership 1hen is the vendor not bound to deliver the thing sold "f the vendee has not paid him the price "f no period for payment has been fi0ed in the contract Even if a period for payment has been fi0ed in the contract# if the vendee has lost the right to ma5e use of the same. Sale or return %roperty is sold# but the buyer# who becomes the owner of the property on delivery# has the option to return the same to the seller instead of paying the price.

NOTES "t is a 5ind of sale with a condition subsequent. The buyer must comply with the e0press or implied conditions attached to the return privilege2 otherwise# the sale becomes absolute. &uyer# being the owner# bears the ris5 of loss Sale on trial# approval# or satisfaction A contract in the nature of an option to purchase if the goods prove to be satisfactory# the approval of the buyer being a condition precedent. +ules title remains in the seller ris5 ofloss remains with seller e0ceptwhen the buyer is at fault or has agreed to bear the loss buyer must give goods a trial# e0cept where it is evident that it cannot perform the wor5 period within which buyer must signify his acceptance runs only when all the parts essential for the operation of the ob/ect have been delivered. if it is stipulated that a third person must satisfy approval or satisfaction# the provision is valid# but the third person must be in good faith. "f refusal to accept is not /ustified# seller may still sue. Benerally# the sale and delivery to a buyer who is an e0pert on the ob/ect purchased is not a sale on approval# trial# or satisfaction. Sale or return Sale on Trial ,. Sub/ect to a resolutory condition ,. Sub/ect to a suspensive condition *. !epends entirely on the will of the buyer *. !epends on the character or quality of the goods <. Ownership passes to the buyer on delivery and subsequent return reverts ownership in the seller <. Ownership remains in the seller until buyer signifies his approval or acceptance to the seller C. +is5 of loss or in/ury rests upon the buyer C. +is5 of loss remains with the seller "nstances where Seller is still the Owner despite !elivery Sale on trial# approval or satisfaction 'ontrary intention appears by the term of the contract2 "mplied reservation of ownership $Article ,DE<. "f under the bill of lading# the goods are deliverable to seller or agent or their order2

"f the bill of lading# although stating that the goods are to be delivered to the buyer or his agent# is 5ept by the seller or his agent2 1hen the buyer# although the goods are deliverable to order of buyer# and although the bill of lading is given to him# does not honor the bill of e0change sent along with it. Transfer of ownership where goods sold delivered to carrier Beneral +ule !elivery to the carrier is deemed to be delivery to the buyer E0ception 1here the right of possession or ownership of specific goods sold is reserved SALE O; BOO!S &G A NON4O1NE+ $BENE+AL +>LE&uyer acquires no title even if in good faith and for value under the ma0im Nemo dat quid non habet $Gou cannot give what you do not have.. $EJ'E%T"ONS$S(E+=S. Owner is estopped or precluded by his conduct 1hen sale is made by the registered owner or apparent owner in accordance with recording or registration laws Sales sanctioned by /udicial or statutory authority %urchases in a merchantIs store# fairs or mar5ets 1hen a person who is not the owner sells and delivers a thing# subsequently acquires title thereto $Art. ,C<C. 1hen the seller has a voidable title which has not been avoided at the time of the sale $Art. ,DE). 3 >nlawful deprivation is no longer limited to a criminal act. There is >nlawful !eprivation where there is no valid transmission of ownership. %lace of delivery of goods 1here there is an agreement# place of delivery is that agreed upon 1here there is no agreement# place of delivery determined by usage of trade 1here there is no agreement and no prevalent usage# place of delivery is the sellers place "n any other case# place of delivery is the sellers residence "n case of specific goods# which to the 5nowledge of the parties at the time the contract was made were in some other place# that place is the place of delivery# in the absence of agreement or usage of trade to the contrary Time of delivery of goods Stipulated time "n the absence thereof# within a reasonable time NEBOT"A&LE !O'>(ENT O; T"TLE $N!T. A document of title in which it is stated that the goods referred to therein will be delivered to the bearer# or to the order of any person named in such document. (ay be negotiated by delivery or indorsement. The document is negotiable if The goods are deliverable to the bearer2 or "f the goods are deliverable to the order of a certain person %ersons who may negotiate N!T The owner2 or Any person to whom the possession or custody thereof has been entrusted by the owner# if by the terms of the document the bailee issuing the document underta5es to deliver the goods to the order of the person to whom the possession or custody of the document has been entrusted or if at the time of such entrusting the document in such form that it may be negotiated by delivery. 3 "f the holder of a negotiable document of title $deliverable to bearer. entrusts the document to a friend for

deposit# but the friend betrays the trust and negotiates the document by delivering it to another who is in good faith# the said owner cannot impugn the validity of the negotiation. As between two innocent persons# he who made the loss possible shall bear the loss# without pre/udice to his right to recover from the wrongdoer. +"BATS O; %E+SON TO 1AO( !O'>(ENT AAS &EEN NEBOT"ATE! ,. The title of the person negotiating the document# over the goods covered by the document2 *. The title of the person $depositor or owner. to whose order by the terms of the document the goods were to be delivered# over such goods2 <. The direct obligation of the bailee to hold possession of the goods for him# as if the bailee had contracted to him directly NOTE2 (ere transferee does not acquire directly the obligation of the bailee $in Art. ,D,<.. To acquire it# he must notify the bailee. 1AO 'AN !E;EAT +"BATS O; T+ANS;E+EE ,. 'reditor of transferor *. Transferor <. Subsequent purchaser +>LES 1AEN K>ANT"TG "S LESS TAAN AB+EE! >%ON &uyer may re/ect2 or &uyer may accept what has been delivered# at the contract rate +>LES 1AEN K>ANT"TG "S (O+E TAAN AB+EE! >%ON &uyer may re/ect all2 or &uyer may accept the goods agreed upon and re/ect the rest2 or &uyer may accept all and must pay for them at the contract rate NOTEAcceptance# even if not e0press may be implied when the buyer e0ercises acts of ownership over the e0cess goods. +>LES 1AEN BOO!S ("JE! 1"TA BOO!S O; !";;E+ENT !ES'+"%T"ON &uyer may accept the goods which are in accordance with the contract and re/ect the rest NOTE"f the sub/ect matter is indivisible# in case of delivery of larger quantity of goods or of mi0ed goods# the buyer may re/ect the whole of the goods !EL"=E+G TO TAE 'A++"E+ $BENE+AL +>LE1here the seller is authoriFed or required to send the goods to the buyer# delivery to the carrier is delivery to the buyer. $EJ'E%T"ONS 1hen a contrary intention appears "mplied reservation of ownership under pars. ,#*#< of Art. ,DE< Hinds of !elivery to the 'arrier '.".;. $cost# insurance# freight. signify that the price fi0ed covers not only the costs of the goods# but the e0pense of the freight and the insurance to be paid by the seller ;.O.&. $free on board. goods are to be delivered free of e0pense to the buyer to the point where they are ;.O.&. The point of ;.O.&.# either at the point of shipment or the point of destination# determines when the ownership passes. NOTE the terms '.".;. and ;.O.&. merely ma5e rules of presumption '.O.!. $collect on delivery. the carrier acts for the seller in collecting the purchase price# which the buyer must pay to obtain possession of the goods. SELLE+S !>TG A;TE+ !EL"=E+G TO 'A++"E+

,.To enter on behalf of buyer into such contract reasonable under the circumstances *.To give notice to buyer regarding necessity of insuring the goods %AG(ENT O; TAE %>+'AASE %+"'E $BENE+AL +>LEThe seller is not bound to deliver the thing sold unless the purchase price has been paid. $EJ'E%T"ONThe seller is bound to deliver even if the price has not been paid# if a period of payment has been fi0ed. Sale of +eal %roperty by >nit Entire area stated in the contract must be delivered 1hen entire area could not be delivered# vendee may Enforce the contract with the corresponding decrease in price +escind the sale "f the lac5 in area is at least ,?,than that stated or stipulated b. "f the deficiency in quality specified in the contract e0ceeds ,?,of the price agreed upon c. "f the vendee would not have bought the immovable had he 5nown of its smaller area of inferior quality irrespective of the e0tent of lac5 of area or quality Sale for a Lump Sum $A 'uerpo 'ierto. =endor is obligated to deliver all the land included within the boundaries# regardless of whether the real area should be greater or smaller Ordinarily# there can be no rescission or reduction or increase whether the area be greater or lesser# unless there is gross mista5e. NOTE The 'ivil 'ode presumes that the purchaser had in mind a particular piece of land and that he ascertained its area and quality before the contract of sale was perfected."f he did not do so# or if having done so he made no ob/ection and consented to the transaction# he can blame no one but himself $Teran vs. =illanueva =iuda de +iosa D) %hil )--.. 1hat is important is the delivery of all the land included in the boundaries. !O>&LE SALE $Art. ,DCC. $+equisites=O'S two or more transactions must constitute valid sales2 they must pertain e0actly to the same ob/ect or sub/ect matter2 they must be bought from the same or immediate seller2 AN! two or more buyers who are at odds over the rightful ownership of the sub/ect matter must represent conflicting interests. $+ules of preference ,. %ersonal %roperty a. first possessor in good faith *. +eal %roperty first registrantin good faith first possessor in good faith person with oldest title in good faith NOTES %urchaser in Bood ;aith one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property $=eloso vs. 'A.. +egistration requires actual recording2 if the property was never really registered as when the registrar forgot to do so although he has been handed the document# there is no registration. %ossession is either actual or constructive since the law made no distinction $SancheF vs. +amos C%hil),C. %ossession in Art.,DCC includes not only material but also symbolic possession $Ten ;orty +ealty vs.

'ruF# ,Sept. *EE<.. Title means title because of sale# and not any other title or mode of acquiring property $Lichauco vs. &erenguer <%hil )C*. AernandeF vs. Hatigba5 +ule1hen the property sold on e0ecution is registered under Torrens# registration is the operative act that gives validity to the transfer or creates a lien on the land# and a purchaser on e0ecution sale is not required to go behind the registry to determine the conditions of the property. E0ception1here the purchaser had 5nowledge# prior to or at the time of the levy# of such previous lien or encumbrance# his 5nowledge is equivalent to registration. 'ON!"T"ON $ Effect of Non4fulfillment of 'ondition "f the obligation of either party is sub/ect to any condition and such condition is not fulfilled# such party may either refuse to proceed with the contract proceed with the contract # waiving the performance of the condition. "f the condition is in the nature of a promise that it should happen# the non4performance of such condition may be treated by the other party as breach of warranty. NOTEA distinction must be made between a condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. The failure to comply with the first condition would prevent the /uridical relation itself from coming into e0istence# while failure to comply with the second merely gives the option either to refuse or proceed with the sale or to waive the condition. The mere fact that the second contract of sale was perfected in good faith is not sufficient if# before title passes# the second vendee acquires 5nowledge of the first transaction.The good faith or innocence of the posterior vendee needs to continue until his contract ripens into ownership by tradition or registration. $%alanca vs. !ir. Of Lands# C) %A"L ,C7.

E;;E'T "; &>GE+ AAS AL+EA!G SOL! TAE BOO!S Beneral +uleThe unpaid sellers right to lien or stoppage in transitu remains even if buyer has sold the goods. E0cept ,. 1hen the seller has given consent thereto# or *. 1hen the buyer is a purchaser in good faith for value of a negotiable document of title. 1A++ANTG a statement or representation made by the seller of goods# contemporaneously and as a part of the contract of sale# having reference to the character# quality# or title of the goods# and by which he promises or underta5es to insure that certain facts are or shall be as he then represents. Hinds EJ%+ESS any affirmation of fact or any promise by the seller relating to the thing if the natural tendency of such affirmation or promise is to induce the buyer to purchase the same and if the buyer purchases the thing relying thereon NOTE A mere e0pression of opinion# no matter how positively asserted# does not import a warranty unless the seller is an e0pert and his opinion was relied upon by the buyer. "(%L"E!4 that which the law derives by 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. 1arranty against eviction 1arranty against hidden defects 1arranty as to ;itness and (erchantability

NOTEAn implied warranty is a natural# not an essential element of a contract# and is deemed incorporated in the contract of sale. "t may however# be waived or modified by e0press stipulation. $!e Leon. There is no implied warranty as to the condition# adaptation# fitness or suitability or the quality of an article sold as a second4hand article. &ut such articles might be sold under such circumstances as to raise an implied warranty. 3 A certification issued by a vendor that a second4hand machine was in A4, condition is an e0press warranty binding on the vendor. $(oles vs. "A' 6,7879. 1arranty against eviction 1arranty in which the seller guarantees that he has the right to sell the thing sold and to transfer ownership to the buyer who shall not be disturbed in his legal and peaceful possession thereof. Elements vendee is deprived# in whole or in part# of the thing purchased2 the deprivation is by virtue of a final /udgment2 the /udgment is based on a prior right to the sale or an act imputable to the vendor2 the vendor was summoned in the suit for eviction at the instance of the vendee2 AN! no waiver of warranty by the vendee. =endorIs liability shall consist of Total eviction$="'E!. =alue of the thing at the time of eviction2 "ncome or fruits if he has been ordered to deliver them to the party who won the suit2 'osts of the suit2 E0penses of the contract2 AN! !amages and interests if the sale was in bad faith. %artial eviction to enforce vendors liability for eviction$="'E!.2 O+ to demand rescission of contract. Kuestion1hy is rescission not a remedy in case of total evictionL Answer+escission contemplates that the one demanding it is able to return whatever he has received under the contract. Since the vendee can no longer restore the sub/ect4matter of the sale to the vendor# rescission cannot be carried out. 3 The suit for the breach can be directed only against the immediate seller# not sellers of the seller unless such sellers had promised to warrant in favor of later buyers or unless the immediate seller has e0pressly assigned to the buyer his own right to sue his own seller. NOTEThe disturbance referred to in the case of eviction is a disturbance in law which requires that a person go to the courts of /ustice claiming the thing sold# or part thereof and invo5ing reasons. (ere trespass in fact does not give rise to the application of the doctrine of eviction. =endors liability is waivable but any stipulation e0empting the vendor from the obligation to answer for eviction shall be void if he acted in bad faith. Hinds of 1aiver 'onsciente voluntarily made by the vendee without the 5nowledge and assumption of the ris5s of eviction NOTE vendor shall pay only the value which the thing sold had at the time of eviction b."ntencionada made by the vendee with 5nowledge of the ris5s of eviction and assumption of its consequences E;;E'T vendor not liable NOTEEvery waiver is presumed to be consciente. To consider it intencionada# it must be accompanied by some circumstance which reveals the vendors 5nowledge of the ris5s of eviction and his intention to

submit to such consequences. 1AE+E "((O=A&LE SOL! EN'>(&E+E! 1"TA NON4A%%A+ENT &>+!EN ,. +ight of vendee a.recission# or b.indemnity *. 1hen right cannot be e0ercised a. if the burden or servitude is apparent b. if the non4apparent burden or servitude is registered c. if vendee had 5nowledge of the encumbrance# whether it is registered or not <. 1hen action must be brought 4 within ONE GEA+ from the e0ecution of the deed of sale 1arranty against hidden defects 1arranty in which the seller guarantees that the thing sold is free from any hidden faults or defects or any charge or encumbrance not declared or 5nown to the buyer. Elements$SAEN%1. defect must be Serious or important2 it must be Aidden2 it must E0ist at the time of the sale2 vendee must give Notice of the defect to the vendor within a reasonable time2 action for rescission or reduction of price must be brought within the proper %eriod $within ) mos. from delivery of the thing or Cdays from date of delivery in case of animals.2 and no 1aiver of the warranty. +emedies of the =endee Accion redhibitoria $rescission. Accion quanti minoris $reduction of the price. NOTES Aidden faults or defects pertain only to those that ma5e the ob/ect unfit for the use for which it was intended at the time of the sale. This warranty in Sales is applicable in Lease $Gap vs. Tiaoqui ,<%hilC<<. Effect of loss of thing on account of hidden defects "f vendor was aware of hidden defects# he shall bear the loss and vendee shall have the right to recover$%E!. the price paid e0penses of the contract damages "f vendor was not aware# he shall be obliged to return$%"E. price paid interest thereon e0penses of the contract if paid by the vendee Effect if the cause of loss was not the hidden defect "f the thing sold had any hidden fault at the time of the sale# and should thereafter be lost by a $,. fortuitous event O+ $*. through the fault of the vendee the vendee may demand of the vendor the price which he paid less the value of the thing at the time of its loss. NOTE the difference between the price paid and the value of the thing at the time of its loss represents the damage suffered by the vendee and the amount which the vendor enriched himself at the e0pense of the vendee "f the vendor acted in bad faith vendor shall pay damages to the vendee

"mplied 1arranties of Kuality 1arranty of ;itness 1arranty in which the seller guarantees that the thing sold is reasonably fit for the 5nown particular purpose for which it was acquired by the buyer $BENE+AL +>LEThere is no implied warranty as to the quality or fitness for any particular purpose of goods under a contract of sale $EJ'E%T"ONS 1here the buyer# e0pressly or by implication manifests to the seller the particular purpose for which the goods are required 1here the buyer relies upon the sellers s5ill or /udgment 1arranty of (erchantability 1arranty in which the seller guarantees# where the goods were bought by description# that they are reasonably fit for the general purpose for which they are sold "t requires identity between what is described in the contract AN! what is tendered# in the sense that the latter is of such quality to have some value "nstances where implied warranties are inapplicable As is and where is sale 4 vendor ma5es no warranty as to the quality or wor5able condition of the goods# and that the vendee ta5es them in the condition in which they are found and from the place where they are located. Sale of second4hand articles Sale by virtue of authority in fact or law 'aveat =enditor $Let the seller beware.the vendor is liable to the vendee for any hidden faults or defects in the thing sold# even though he was not aware thereof. 'aveat Emptor $Let the buyer beware.requires the purchaser to be aware of the supposed title of the vendor and one who buys without chec5ing the vendors title ta5es all the ris5s and losses consequent to such failure. +>LES "N 'ASE O; SALE O; AN"(ALS ,.1hen two or more animals have been sold at the same time and the redhibitory defect is in one# or some of them but not in all# the general rule is that the redhibition will not affect the others without it."t is immaterial whether the price has been fi0ed for a lump sum for all the animals or for a separate price for each. *.No warranty against hidden defects of animals sold at fairs or at public auctions# or of livestoc5 sold as condemned.This is based on the assumption that the defects must have been clearly 5nown to the buyer. <.Sale of animals shall be void when a. animals sold are suffering from contagiousdisease b.if the use or service for which they are acquired has been stated in the contract# and they are found to be unfit therefor C.Limitation of the action Cdays from the date of their delivery to the vendee D.=endor shall be liable if the animal should die within < days after its purchase if the disease which caused the death e0isted at the time of the contract O&L"BAT"ONS O; TAE =EN!EE %rincipal Obligations To accept delivery To pay the price of the thing sold in legal tender unless another mode has been agreed upon NOTE A grace period granted the vendee in case of failure to pay the amount?s due is a right not an obligation.The grace period must not be li5ened to an obligation# the non4payment of which# under Article

,,)of the 'ivil 'ode# would still generally require /udicial or e0tra4/udicial demand before default can be said to arise $&ric5town !evt 'orp vs. Amor Tierra !evt 'orp. D-S'+AC<-. Other Obligations To ta5e care of the goods without the obligation to return# where the goods are delivered to the buyer and he rightfully refuses to accept NOTES The buyer in such a case is in the position of a bailee who has had goods thrust upon him without his assent.Ae has the obligation to ta5e reasonable care of the goods but nothing more can be demanded of him. The goods in the buyers possession under these circumstances are at the sellers ris5 To be liable as a depositary if he voluntarily constituted himself as such To pay interest for the period between delivery of the thing and the payment of the price in the following cases Should it have been stipulated Should the thing sold and delivered produce fruits or income Should he be in default# from the time of /udicial or e0tra4/udicial demand for the payment of the price %ertinent +ules The vendor is not required to deliver the thing sold until the price is paid nor the vendee to pay the price before the thing is delivered in the absence of an agreement to the contrary $Article ,D*C.. "f stipulated# the vendee is bound to accept delivery and to pay the price at the time and place designated2 "f there is no stipulation as to the time and place of payment and delivery# the vendee is bound to pay at the time and place of delivery "n the absence of stipulation as to the place of delivery# it shall be made wherever the thing might be at the moment the contract was perfected $Article ,*D,. "f only the time for delivery has been fi0ed in the contract# the vendee is required to pay even before the thing is delivered to him2 if only the time for payment has been fi0ed# the vendee is entitled to delivery even before the price is paid by him $Article ,D*C. 1ays of accepting goods E0press acceptance "mplied acceptance 1hen buyer does an act which only an owner can do# ;ailure to return goods after reasonable lapse of time NOTES The retention of goods is strong evidence that the buyer has accepted ownership of the goods. !elivery and acceptance are two separate and distinct acts of different parties !elivery is an act of the vendor and one of the vendors obligations2 vendee has nothing to do with the act of delivery by the vendor Acceptance is an obligation of the vendee2 acceptance cannot be regarded as a condition to complete delivery2 seller must comply with the obligation to deliver although there is no acceptance yet by the buyer Acceptance by the buyer may precede actual delivery2 there may be actual receipt without acceptance and there may be acceptance without receipt >nless otherwise agreed upon# acceptance of the goods by the buyer does not discharge the seller from liability for damages or other legal remedy li5e for breach of any promise or warranty 1hen vendee may suspend payment of the price "f he is disturbed in the possession or ownership of the thing bought "f he has well4grounded fear that his possession or ownership would be disturbed by a vindicatory action or foreclosure of mortgage

NOTES "f the thing sold is in the possession of the vendee and the price is already in the hands of the vendor# the sale is a consummated contract and Article ,D7is no longer applicable.Article ,D7E# presupposes that the price or any part thereof has not yet been paid and the contract is not yet consummated. >nder Article ,D7E# the vendee has no cause of action for rescission before final /udgement# otherwise the vendor might become a victim of machinations between the vendee and the third person !isturbance must be in possession and ownership of the thing acquired "f the disturbance is caused by the e0istence of non4apparent servitude# the remedy of the buyer is rescission# not suspension of payment.

1hen vendee cannot suspend payment of the price even if there is disturbance in the possession or ownership of the thing sold if the vendor gives security for the return of the price in a proper case if it has been stipulated that notwithstanding any such contingency# the vendee must ma5e payment $see Article ,DC8 par.<. if the vendor has caused the disturbance or danger to cease if the disturbance is a mere act of trespass if the vendee has fully paid the price +E(E!"ES ;O+ &+EA'A O; 'ONT+A'T +emedies of the seller Action for payment of the price $Art. ,D7D. Action for damages for non4acceptance of the goods $Art. ,D7). Action for rescission $Art. ,D7-. +emedies of the buyer Action for specific performance $Art. ,D78. Action for rescissionor damages for breach of warranty $Art ,D77. +E(E!"ES O; TAE SELLE+ ;O+ &+EA'A O; 'ONT+A'T "N 'ASE O; (O=A&LES Ordinary +emedies (ovables in Beneral ;ailure of the vendee to appear to receive delivery or# having appeared# failure to tender the price at the same time# unless# a longer period for its payment has been stipulated action to rescind the sale $Art. ,D7<. Sale of Boods action for the price $Art. ,D7D. action for damages $Art. ,D7). *.>npaid Seller Types The seller of the goods who has not been paid or to whom the price has not been tendered The seller of the goods# in case a bill of e0change or other negotiable instrument has been received as conditional payment# AN! the condition on which it was received has been bro5en by reason of the dishonor of the instrument# insolvency of the buyer or otherwise. +emedies %ossessory lien over the goods +ight of stoppage in transitu after he has parted with the possession of the goods and the buyer becomes insolvent Special +ight of resale Special +ight to rescind the sale Action for the price Action for damages Article ,C8C or +ecto Law

+emedies of vendor in sale of personal property by installments +equisites 'ontract of sale %ersonal property %ayable in installments "n the case of the second and third remedies# that there has been a failure to pay two or more installments NOTE Apply li5ewise to contracts purporting to be leases of personal property with option to buy Art. ,C8C does not apply to a sale %ayable on straight terms $partly in cash and partly in one term. Of +eal property +emedies Specific performance upon vendees failure to pay NOTE!oes not bar full recovery for /udgment secured may be e0ecuted on all personal and real properties of the buyer which are not e0empt from e0ecution $%alma v. 'A.. +escission of the sale if vendee shall have failed to pay two or more installments NOTES Nature of the remedy which requires mutual restitution bars further action on the purchase price $Nonato vs. "A'.. $BENE+AL +>LE cancellation of sale requires mutual restitution# that is all partial payments of price or rents must be returned $EJ'E%T"ONSa stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstan4ces $Article ,C8).. ;oreclosure of the chattel mortgage on the thing sold if vendee shall have failed to pay two or more installments. "n this case# there shall be no further action against the purchaser to recover unpaid balance of the price. NOTES ;urther recovery barred only from the time of actual sale at public auction conducted pursuant to foreclosure $(acondray vs. Tan.. Other chattels given as security cannot be foreclosed if they are not sub/ect of the installment sale $+idad vs. ;ilipinas investment and ;inance 'orp. B+ <78E)# @an. *8# ,78<. "f the vendor assigns his right to a financing company# the latter may be regarded as a collecting agency of the vendor and cannot therefore recover any deficiency from the vendee $Mayas vs. Luneta (otors 'o.. 1hen the vendor assigns his credit to another person# the latter is li5ewise bound by the same law.Accordingly# when the assignee forecloses on the mortgage# there can be no further recovery of the deficiency and the vendor4mortgagee is deemed to have renounced any right thereto $&orbon "" vs. Servicewide Specialist# "nc. *D8S'+A)D8. NOTE Aowever# Article ,C8C$<. does NOT bar one to whom the vendor has assigned on with a recourse basis his credit against the vendee from recovering from the vendor the assigned credit in full although the vendor may have no right of recovery against the vendee for the deficiency $;ilipinas "nvest. ;inance 'orp. vs. =itug# @r. *8S'+A)D8. NOTE+emedies are alternative and e0clusive "N 'ASE O; "((O=A&LES Ordinary +emedies "n case of anticipatory breach rescission $Article ,D7,. ;ailure to pay the purchase price rescission upon /udicial or notarial demand for rescission $Article ,D7*. the vendee may pay# even after the e0piration of the period# as long as no demand for rescission has been made upon him NOTE Article ,D7* does not apply to

Sale on instalment of real estate 'ontract to sell 'onditional sale 'ases covered by +A )DD* +ealty "nstallment buyer protection act +.A. No. )DD* or (aceda Law An Act to %rovide %rotection to buyers of +eal Estate on "nstallment %ayments Law governing sale or financing of real estate on installment payments +equisites transactions or contracts involving the sale O+ financing of real estate on installment payments# including residential condominium apartments2 and buyer defaults in payment ofsucceeding installments. +ights of the buyer "f &uyer has paid at least two $*. years of installments The buyer must pay# without additional interest# the unpaid installments due within the total grace period earned by him.There shall be one $,. month grace period for every one $,. year of installment payments made NOTE This right shall be e0ercised by the buyer ONLG once in every D years of the life of the contract AN! its e0tensions. Actual cancellation can only ta5e place after <days from receipt by the buyer of the notice of cancellation O+ demand for rescission by a notarial act AN! upon full payment of the cash surrender value to the buyer $Olympia Aousing vs. %anasiatic# ,) @anuary *EE<.. NOTEThe seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to DEN of the total payments made.After five $D. years of installments# there shall be an additional DN every year but not to e0ceed 7EN of the total payments made The buyer shall have the right to sell his rights or assign the same to another person O+ to reinstate the contract by updating the account during the grace period and before actual cancellation of the contract The buyer shall have the right to pay in advance any installment or the full unpaid balance of the purchase price any time without interest and to have such full payment of the purchase price annotated in the certificate of title covering the property. "f &uyer has paid less than * years of installments The seller shall give the buyer a grace period of NOT less than )days from the date the installment became due."f the buyer fails to pay the installments due at the e0piration of the grace period# the seller may cancel the contract after <days from receipt by the buyer of the notice of cancellation or the demand for rescission of contract by a notarial act. Same No. < and C paragraph A above NOTE !own payments# deposits or options on the contract shall be included in the computation of the total number of installment payments made +emedies of >npaid Seller %ossessory Lien 1hen may be e0ercised 1here the goods have been sold without any stipulation as to credit 1hen the goods have been sold on credit# but the term of credit has e0pired 1here the buyer becomes insolvent 1hen lost !elivery of the goods to a carrier or bailee for the purpose of transmission to the buyer without reserving ownership or right of possession 1hen the buyer lawfully obtains possession of the goods &y waiver of the lien NOTE %ossessory lien is lost after the seller loses possession but his lien as an unpaid seller remains2 hence he is still an unpaid creditor with respect to the price of specific goods sold.Ais preference can only

be defeated by the governments claim to the specific ta0 on the goods themselves $Arts. **C- and **C,.. NOTE The bringing of an action to recover the purchase price is not one of the ways of losing the possessory lien.An unpaid seller does not lose his lien by reason that he has obtained a money /udgement or decree for the price of goods $Art. ,D*7# last paragraph.. Stoppage of goods in transitu +equisites Seller must be unpaid &uyer must be insolvent Boods must be in transit Seller must either actually ta5e possession of the goods sold O+ give notice of his claim to the carrier or other person in possession Seller must surrender the negotiable document of title# if any# issued by the carrier or bailee Seller must bear the e0penses of delivery of the goods after the e0ercise of the right BOO!S A+E 'ONS"!E+E! "N T+ANS"T> ,.after delivery to a carrier or other bailee and before the buyer or his agent ta5es delivery of them2 and *."f the goods are re/ected by the buyer# and the carrier or other bailee continues in possession of them BOO!S A+E NO LONBE+ 'ONS"!E+E! "N T+ANS"T> ,.after delivery to the buyer or his agent in that behalf2 *.if the buyer or his agent obtains possession of the goods at a point before the destination originally fi0ed2 <.if the carrier or the bailee ac5nowledges to hold the goods on behalf of the buyer2 and C.if the carrier or bailee wrongfully refuses to deliver the goods to the buyer Effects of the e0ercise of the right The goods are no longer in transit. The contract of carriage ends2 instead the carrier now becomes a mere bailee# and will be liable as such. The carrier should not deliver anymore to the buyer or the latters agent2 otherwise he will clearly be liable for damages. The carrier must redeliver to# or according to the directions of the seller. 1AGS O; EJE+'"S"NB TAE +"BAT TO STO% ,.&y ta5ing actual possession of the goods *.&y giving notice of his claim to the carrier or bailee Special +ight of +esale (ay be e0ercised only when the unpaid seller has either a right of lien O+ has stopped the goods in transitu AN! under ANG of the following conditions 1here the goods are perishable in nature 1here the right to resell is e0pressly reserved in case the buyer should ma5e a default 1here the buyer delays in the payment of the price for an unreasonable time +escission Types Special +ight to +escind >nder Art. ,D<C "f the seller has either the right of lien O+ a right to stop the goods in transitu AN! under either of * situations 1here the right to rescind on default has been e0pressly reserved 1here the buyer has been in default for an unreasonable time >nder Art. ,D7- $technical rescission. Action for the price

1hen may be e0ercised 1here the ownership has passed to the buyer AN! he wrongfully neglects O+ refuses to pay for the price 1here the price is payable on a day certain AN! he wrongfully neglects O+ refuses to pay for the price# irrespective of the delivery or transfer of title 1here the goods cannot readily be resold for a reasonable price AN! the buyer wrongfully refuses to accept them even before the ownership of the goods has passed# if Article ,D7) is inapplicable. Action for damages 1hen may be e0ercised "n case of wrongful neglect or refusal by the buyer to accept or pay for the thing sold $Art. ,D7) par.,. "n an e0ecutory contract# where the ownership in the goods has not passed# and the seller cannot maintain an action to recover the price $Art ,D7D. "f the goods are not yet identified at the time of the contract or subsequently +E(E!"ES O; TAE &>GE+ ;O+ &+EA'A O; 'ONT+A'T Action for specific performance $Art. ,D78. 1here the seller has bro5en the contract to deliver specific or ascertained goods The /udgment or decree may be unconditional# or upon such terms and conditions as to damages# payment of the price and otherwise as the court may deem /ust +emedies of buyer for breach of warranty by seller $Art. ,D77. +ecoupment accept the goods and set up the sellers breach to reduce or e0tinguish the price Accept the goods and maintain an action for damages for breach of warranty +efuse to accept the goods and maintain an action for damages for breach of warranty +escind the contract by returning or offering the return of the goods# and recover the price of any part thereof NOTEThese are alternative remedies. 1hen rescission by buyer not allowed ,.if the buyer accepted the goods 5nowing of the breach of warranty without protest *.if he fails to notify the seller within a reasonable time of his election to rescind <. if he fails to return or offer to return the goods in substantially as good condition as they were in at the time of the transfer of ownership to him EJT"NB>"SA(ENT O; SALE Same causes as in all other obligations 'onventional +edemption Legal +edemption 'ON=ENT"ONAL +E!E(%T"ON The right which the vendor reserves to himself# to reacquire the property sold provided he returns to the vendee the price of the sale2 e0penses of the contract2 any other legitimate payments made therefore and2 the necessary and useful e0penses made on the thing sold2 and fulfills other stipulations which may have been agreed upon. A sale with conventional redemption is deemed to be an equitable mortgage in any of the following cases $"%E+TO!. >nusually "nadequate purchase price2 %ossession by the vendor remains# as lessee or otherwise2 E0tension of redemption period after e0piration2 +etention by the vendee of part of the purchase price2

=endor binds himself to pay the Ta0es of the thing sold2 Any Other case where the parties really intended that the transaction should secure the payment of a debt or the performance of any obligation2 or 1hen there is !oubt as to whether contract is contract of sale with right of repurchase or an equitable mortgage. Equitable (ortgage One which lac5s the proper formalities# form of words# or other requisites prescribed by law for a mortgage# but shows the intention of the parties to ma5e the property sub/ect of the contract as security for a debt and contains nothing impossible or contrary to law $'achola vs. 'A *E8S'+AC7). 3 1hen can there be presumption as to Equitable (ortgageL ,. %arties must have entered into a contract denominated as a contract of sale *. The intention of the parties was to secure an e0isting debt by way of mortgage NOTE"n the cases referred to in Arts. ,)E* and ,)EC# the apparent vendor may as5 for the reformation of the instrument. +emedy of +eformationTo correct the instrument so as to ma5e it e0press the true intent of the parties. +edemption %eriod if there is an agreementperiod agreed upon cannot e0ceed ,years if no agreement as to the periodCyears from the date of the contract the vendor who fails to repurchase the property within the period agreed upon may# however# e0ercise the right to repurchase within <days ;+O( the time final /udgment was rendered in a civil action on the basis that the contract was a true sale with right of repurchase This refers to cases involving a transaction where one of the parties contests or denies that the true agreement is one of sale with right to repurchase2 not to cases where the transaction is conclusively a pacto de retro sale. E0ample1here a buyer a retro honestly believed that he entered merely into an Equitable (ortgage# not a pacto de retro transaction# and because of such belief he had not redeemed within the proper period. NOTETender of payment is sufficient to compel redemption# but is not in itself a payment that relieves the vendor from his liability to pay the redemption price $%aeF vs. (agno.. LEBAL +E!E(%T"ON 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 transferred by onerous title. (ay be effected against movables or immovables. "t must be e0ercised within thirty $<E. days from the notice in writing by the vendor.

NOTE1ritten notice under Article ,)*< is mandatory for the right of redemption to commence $%S' vs. Sps. =alencia ,August *EE<.. &AS"S O; LEBAL +E!E(%T"ONNot on any proprietary right# which after the sale of the property on e0ecution# leaves the /udgment debtor and vests in the purchaser# but on a bare statutory privilege to be e0ercised only by the persons named in the statute. Tender of payment is not necessary2 offer to redeem is enough. %+E4E(%T"ON +E!E(%T"ON ,. arises before sale ,. arises after sale *. no rescission because no sale as yet e0ists *. there can be rescission of the original sale <. the action is directed against the prospective seller <. action is directed against the buyer

"nstances of legal redemption A. >nder the 'ivil 'ode $legal redemption. Sale of a co4owner of his share to a stranger $Article ,)*E. 1hen a credit or other incorporeal right in litigation is sold $Article ,)<C. Sale of an heir of his hereditary rights to a stranger $Article ,E88. Sale of ad/acent rural lands not e0ceeding one hectare $Article ,)*,. Sale of ad/acent small urban lands bought merely for speculation $Article ,)**. &.>nder special laws An equity of redemption in cases of /udicial foreclosures A right of redemption in cases of e0tra4/udicial foreclosures +edemption of homesteads +edemption in ta0 sales +edemption by an agricultural tenant of land sold by the landowner

ASS"BN(ENT O; '+E!"T a contract by which the owner of a credit transfers to another his rights and actions against a third person in consideration of a price certain in money or its equivalent NOTETransfer of rights by assignment ta5es place by the perfection of the contract of assignment without the necessity of delivering the document evidencing the credit. this rule does not apply to negotiable documents and documents of title which are governed by special laws. Effects of Assignment transfers the right to collect the full value of the credit# even if he paid a price less than such value transfers all the accessory rights debtor can set up against the assignee all the defenses he could have set up against the assignor Effect of payment by the debtor after assignment of credit &efore Notice of the assignment %ayment to the original creditor is valid and debtor shall be released from his obligation After Notice %ayment to the original creditor is not valid as against the assignee Ae can be made to pay again by the assignee 1arranties of the assignor of credit Ae warrants the e0istence of the credit Ae warrants the legality of the credit at the perfection of the contract NOTE There is no warranty as to the solvency of the debtor unless it is e0pressly stipulated O+ unless the insolvency was already e0isting and of public 5nowledge at the time of the assignment NOTE The seller of an inheritance warrants only the fact of his heirship but not the ob/ects which ma5e up his inheritance. Liabilities of the assignor of credit for violation of his warranties Assignor in good faith Liability is limited only to the price received and to the e0penses of the contract# and any other legitimate payments by reason of the assignment Assignor in bad faith Liable not only for the payment of the price and all the e0penses but also for damages Legal +edemption in Sale or 'redit or other incorporeal right in litigation +equisites

There must be a sale or assignment of credit There must be a pending litigation at the time of the assignment The debtor must pay the assignee price paid by him /udicial cost incurred by him2 AN! interest on the price from the date of payment The right must be e0ercised by the debtor within <days from the date the assignee demands $/udicially or e0tra4/udicially. payment from him SALE O; '+E!"T O+ OTAE+ "N'O+%O+EAL +"BATS "N L"T"BAT"ON $BENE+AL +>LE!ebtor has the right of legal redemption in sale of credit or incorporeal rights in litigation $EJ'E%T"ONS Sale to a co4heir or co4owner Sale to a co4owner Sale to the possessor of property in question &A+TE+ &A+TE+ contract whereby one of the parties binds himself to give one thing in consideration of the otherIs promise to give another thing $Article ,)<8. NOTE &arter is similar to a sale with the only difference that instead of paying a price in money# another thing is given in lieu of the purchase price %E+;E'T"ON and 'ONS>((AT"ON %erfected from the moment there is a meeting of minds upon the things promised by each party in consideration of the other 'onsummated from the time of mutual delivery by the contracting parties of the things promised NOTES 1here the giver of the thing bartered is not the lawful owner thereof# the aggrieved party cannot be compelled to deliver the thing which he has promised and is also entitled to damages. 1here a party is evicted of the thing e0changed# the in/ured party is given the option# either to recover the property he has given in e0change with damages or only claim an indemnity for damages. As to matters not provided for by the provisions on barter# the provisions on sales will apply suppletorily &>LH SALES LA1 $Act No. <7D*. 1hen Sale or Transfer in &ul5 Any sale# transfer# mortgage# or assignment Of a stoc5 of goods# wares# merchandise# provisions# or materials otherwise than in the ordinary course of trade and the regular prosecution of business2 or Of all or substantially all# of the business or trade2 or Of all or substantially all# of the fi0tures and equipment used in the business of the vendor# mortgagor# transferor or assignor $section *. 1hen sale or transfer in bul5 not covered by &ul5 Sales Law "f the sale or transfer is in the ordinary course of trade and the regular prosecution of business of the vendor2 "f it is made by one who produces and delivers a written waiver of the provisions of the &ul5 Sales Act from his creditors "f it is made by an e0ecutor# administrator# receiver# assignee in insolvency# or public officer# acting under

/udicial process $Section 8.2 and "f it refers to properties e0empt from attachment or e0ecution $+ules of 'ourt# +ule <7# Section ,*. %rotection Accorded to 'reditors by &ul5 Sales Law "t requires the vendor# mortgagor# transferor or assignor to deliver to the vendee# mortgagee# or to his or its agent or representative a sworn written statement of names and addresses of all creditors to whom said vendor# etc. may have been indebted together with the amount due or to be due $Section <. "t requires the vendor# mortgagor# transferor or assignor# at least ,days before the sale# transfer# mortgage# assignment to ma5e a full detailed inventory showing the quantity and the cost of price of goods# and to notify every creditor of the price terms and conditions of the sale# etc. $Section D. Effects of ;alse Statements in the Schedule of 'reditors 1ithout 5nowledge of buyer "f the statement is fair upon its face and the buyer has no 5nowledge of its incorrectness and nothing to put him on inquiry about it# he will be protected in its purchase The remedy of the creditor is not against the goods but to prosecute the seller criminally 1ith 5nowledge or imputed 5nowledge of buyer The vendee accepts it at his peril The sale is valid only as between the vendor and the vendee but void against the creditors 1ith names of certain creditors without notice are omitted from the list The sale is void as to such creditors# whether the omission was fraudulent or not# 1ith respect to an innocent purchaser for a value from the original purchaser An innocent purchaser for value from the original purchaser is protected Aowever if the circumstances are such as to bind the subsequent purchaser with constructive notice that the sale to the vendor $original purchaser. was fraudulent# the property will be liable in his hands to creditors of the original vendor Effect of violation of law on Transfer As between the parties The &ul5 Sales Law does not in any way affect the validity of the transfer as between the intermediate parties thereto A sale not in compliance with the &ul5 Sales Law is valid against all persons other than the creditors. As against creditors A purchaser in violation of the law acquires no right in the property purchased as against the creditors of the seller Ais status is that of a trustee or receiver for the benefit of the creditors of the seller2 as such# he is responsible for the disposition of the property +emedies Available to creditors The proper remedy is one against the goods to sub/ect them to the payment of the debt# such as e0ecution# attachment# garnishment# or by a proceeding in equity An ordinary action against the purchaser to obtain money /udgement will not lie# unless the purchaser has sold or otherwise disposed of# or dealt with the property# so as to become personally liable to creditors for value of it. Acts %unished by &ul5 Sales Law Hnowingly or wilfully ma5ing or delivering a statement required by the Act which does not include the names of all the creditors of the vendor# etc. with the correct amount due or to become due or which contains any false or untrue statement2 and Transferring title to any stoc5 of goods# wares# merchandise# provisions or materials sold in bul5 without consideration or for nominal consideration $Section -. +etail Trade LiberaliFation Act $+A 8-)*. +etail Trade

Any act occupation or calling of habitually selling direct to the general public merchandise# commodities or goods for consumption# but the restrictions of this law shall not apply to the following Sales by manufacturer# processor# laborer# or wor5er# to the general public the products manufactured# processed produced by him if his capital does not e0ceed %,EE#EEE2 Sales by a farmer or agriculturalist selling the products of his farm Sales in restaurant operations by a hotel owner or inn45eeper irrespective of the amount of capital2 provided that the restaurant is incidental to the hotel business2 and Sales which are limited only to products manufactured# processed or assembled by a manufacturer through a single outlet# irrespective of capitaliFation Aigh4End or Lu0ury Boods Boods which are not necessary for life maintenance and whose demand is generated in large part by the higher income groups Shall include but not limited to/ewelry# branded or designer clothing and footwear# wearing apparel# leisure and sporting goods# electronics and other personal effects NOTE A natural4born citiFen of the %hilippines who has lost his citiFenship but who resides in the %hilippines shall be granted the same rights as ;ilipino citiFens ;oreign Equity %articipation ;oreign4owned partnerships# associations and corporations formed and organiFed under the laws of the %hilippines may# upon registration with SE' and !T"# or in case of ;oreign4owned single proprietorship with the !T"# engage or invest in retail trade business# sub/ect to the following categories 'ategory A %aid4up capital of the equivalent in %hilippine %eso of O P*#DEE#EE>S !ollars +eserved e0clusively for ;ilipino citiFens and corporations wholly owned by citiFens 'ategory & (inimum paid4up capital of the equivalent in %hilippine %eso of P*#DEE#EE>S !ollars# but OP-#DEE#EEE (ay be wholly owned by foreigners e0cept for the first two years after the effectivity of this Act wherein foreign participation shall be limited to not Q )EN of total equity. 'ategory ' %aid4up capital of the equivalent in %hilippine %eso ofP-#DEE#EE>S !ollars or more (ay be wholly owned by foreigners NOTE"n no case shall the investments for establishing a store in 'ategories & and ' be less than the equivalent in %hilippine %eso of>S P8<E#EEE 'ategory ! Enterprises specialiFing in high4end or lu0ury products with paid4up capital of the equivalent in %hilippine %eso of P*DE#EE>S !ollars per store (ay be wholly owned by foreigners

NOTES ;oreign investor shall be required to maintain in the %hilippines the ;>LL amount of the prescribed minimum capital# >NLESS the foreign investor has notified the SE' and the !T" of its intention to repatriate its capital and cease operations in the %hilippines ;ailure to maintain the full amount of the prescribed minimum capital prior to notification of the SE' and the !T" shall sub/ect the foreign investors to penalties or restrictions on any future trading activities?business in the %hilippines NOTE ;oreign "nvestors Acquiring Shares of Stoc5 of e0isting retail stores whether or not publicly listed whose net worth is in e0cess of the %eso equivalent of >S P*#DEE#EEmay purchase only up to the ma0imum of )EN of the equity thereof within the first * years# and thereafter# they may acquire the remaining percentage consistent with the allowable foreign participation as herein provided NOTE All retail Trade enterprises under categories & and ' in which foreign ownership e0ceeds 8EN of equity shall offer a minimum of <EN of their equity to the public through any stoc5 e0change in the

%hilippines within 8 years from the start of the operations Kualification of ;oreign +etailers (inimum of P*EE#EEE#EE>S !ollars net worth in its parent corporation for 'ategories & and ' and PDE#EEE#EEnet worth in its parent corporation for 'ategories ! D retailing branches or franchises in operation anywhere around the world unless such retailer has at least , store capitaliFed at a minimum of P*D#EEE#EE>S !ollars D4year trac5 record in retailing2 and Only nationals from# or /uridical entities formed or incorporated in 'ountries which allow to engage in retail trade in the %hilippines

%! 7D- $S>&!"="S"ON AN! 'ON!O("N">( &>GE+S %+OTE'T"=E !E'+EE +egistration of %ro/ects The registered owner of a parcel of land who wishes to convert the same into a subdivision pro/ect shall submit his subdivision plan to the AO>S"NB AN! LAN!4>SE +EB>LATO+G &OA+!# which shall act upon and approve the same# upon a finding that the plan complies with the Subdivision StandardsI and +egulations enforceable at the time the plan is submitted. The same procedure shall be followed in the case of a plan for a condominium pro/ect e0cept that# in addition# said Authority shall act upon and approve the plan with respect to the building or buildings included in the condominium pro/ect in accordance with the National &uilding 'ode $+.A. No. )DC,.. The subdivision plan# as so approved# shall then be submitted to the !irector of Lands for approval in accordance with the procedure prescribed in Section CC of the Land +egistration Act $Act No. C7)# as amended by +.A. No. CCE.%rovided# that it case of comple0 subdivision plans# court approval shall no longer be required. The condominium plan as li5ewise so approved# shall be submitted to the +egister of !eeds of the province or city in which the property lies and the same shall be acted upon sub/ect to the conditions and in accordance with the procedure prescribed in Section C of the 'ondominium Act $+.A. No. C-*).. National Aousing authority $now Aousing and Land >se +egulatory &oard. has the e0clusive /urisdiction to regulate the real estate trade and business. License to sell Such owner or dealer to whom has been issued a registration certificate shall not# however# be authoriFed to sell any subdivision lot or condominium unit in the registered pro/ect unless he shall have first obtained a license to sell the pro/ect within two wee5s from the registration of such pro/ect. E0empt transactions A license to sell and performance bond shall not be required in any of the following transactions Sale of a subdivision lot resulting from the partition of land among co4owners and co4heirs. Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of the same lot. Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona fide debt. Brounds for +evocation of registration certificate and license to sell of owners or dealers "s insolvent2 or Aas violated any of the provisions of this !ecree or any applicable rule or regulation of the Authority# or any underta5ing of his?its performance bond2 or Aas been or is engaged or is about to engage in fraudulent transactions2 or Aas made any misrepresentation in any prospectus# brochure# circular or other literature about the subdivision pro/ect or condominium pro/ect that has been distributed to prospective buyers2 or

"s of bad business repute2 or !oes not conduct his business in accordance with law or sound business principles. LEASE LEASE consensual# bilateral# onerous# and commutative contract by virtue of which one person binds himself to grant temporarily the use of the thing or to render some service to another who underta5es to pay some rent. Hinds of Leases $;rom the view point of the sub/ect matter Lease of things Lease of service Lease of wor5 NOTESince lease is consensual and is not imposed by law# only the lessor has the right to fi0 the rents. Aowever# the increasing of the rent is not an absolute right on the part of the lessor. 'haracteristics or +equisites for Lease of Things 'onsensual %rincipal Nominate %urpose is to allow en/oyment or use of a thing $the person to en/oy is the lessee2 the person allowing the en/oyment by another is the lessor Sub/ect matter must be within the commerce of man %urpose to which the thing will be devoted should not be immoral Onerous $there must rent or price certain. %eriod is Temporary $not perpetual# hence# the longest period is 7years. %eriod is either definite or indefinite "f no term is fi0ed# we should apply Art.,)8* $for rural leases. and Art. ,)8- $for urban leases. "f the term is fi0ed but indefinite# the court will fi0 the term under the law of obligations and contracts Lessor need not be the owner NOTE A usufructuary may thus lease the premises in favor of a stranger# such lease to end at the time that the usufruct itself ends +ent The compensation either in money# provisions# chattels# or labor# received by the lessor from the lessee.

NOTES 1hen a student boards and lodges in a dormitory# there is no contract of lease.The contract is not designated specifically in the 'ivil 'ode."t is an innominate contract."t is however# believed that the contract can be denominated as the contract of board and lodging. There is a contract of lease when the use and en/oyment of a safety deposit bo0 in a ban5 is given for a price certain. This is certainly not a contract of deposit. A lease of personal property with option to buy $at a nominal amount. at the end of the lease can be considered a sale. LEASE SALES ,. only use or en/oyment is transferred ,. ownership is transferred *. transfer is temporary *. transfer is permanent <. lessor need not be the owner <. seller must be the owner at the time the property is delivered C. the price of the ob/ect# distinguished from the rent# is usually not mentioned C. usually# the selling price

is mentioned Lease of Things Lease of Services ob/ect of contract is a thing ob/ect is some wor5 or service lessor has to deliver the thing leased lessor has to perform some wor5 or service <. in case of breach# there can be an action for specific performance <. in case of breach# no action for specific performance Lease of Services $locatio operatum. 'ontract for a %iece of 1or5 $locatio operas. the important ob/ect is the labor performed by the lessor the important ob/ect is the wor5 done the result is generally not important# hence the laborer is entitled to be paid even if there is destruction of the wor5 through fortuitous event the result is generally important2 generally# the price is not payable until the wor5 is completed# and said price cannot be lawfully demanded if the wor5 is destroyed before it is finished and accepted

Lease of Services Agency "t is based on employment the lessor of services does not represent his employer nor does he e0ecute /uridical acts. "t is based on representation agent represents his principal and enters into /uridical acts. %rincipal contract %reparatory contract +ule for Lease of 'onsumable Boods $BENE+AL +>LE'onsumable goods cannot be the sub/ect matter of a contract of lease of things. 1hyL To use or en/oy hem# they will have to be consumed. This cannot be done by a lease since ownership over them is not transferred to him by the contract of lease. $EJ'E%T"ONS "f they are merely e0hibited "f they are accessory to an industrial establishment +E'O+!"NB O; LEASE O; %E+SONAL %+O%E+TG $BENE+AL +>LELease of real property is personal right $EJ'E%T"ONSLease parta5es of the nature of real right if Lease of real property is more than , year Lease of real property is registered regardless of duration NOTE Lease of personal property cannot be registered.To be binding against third persons# the parties must e0ecute a public instrument. 3 Lease may be made orally# but if the lease of +eal %roperty is for more than , year# it must be in writing under the Statue of ;rauds. %ersons !isqualified to be Lessees &ecause !isqualified to &uy A husband and a wife cannot lease to each other their separate properties e0cept if separation of property was agreed upon if there has been /udicial separation of property %ersons referred to in Art. ,C7, are disqualified because of fiduciary relationships S>&LEASE A separate and distinct contract of lease wherein the original lessee becomes a sublessor to a sublessee. Allowed unless e0pressly prohibited. The sublessee is subsidiarily liable for any rent due. The lessor has an accion directa against the sublessee for unpaid rentals and improper use of the ob/ect.

S>&LEASE ASS"BN(ENT O; LEASE ,. there are two leases and two distinct /uridical relationships although immediately connected and related to each other ,. there is only one /uridical relationship# that of the lessor and the assignee# who is converted into a lessee *. the personality of the lessee does not disappear *. the personality of the lessee disappears <.the lessee does not transmit absolutely his rights and obligations to the sublessee <. the lessee transmits absolutely his rights to the assignee C. the sublessee# generally# does not have any direct action against the lessor C. the assignee has a direct action against the lessor +"BATS O; LESSO+ "; S>&LEASE %+OA"&"TE! &>T ENTE+E! "NTO &G LESSEE ,. +escission and damages# or *. !amages only $'ontract will be allowed to remain in force. <. E/ectment "nstances when sublessee is liable to the lessor All acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. NOTEThe sublessee shall not be responsible beyond the amount of rent due from him. Accion !irectadirect action which the lessor may bring against a sublessee who misuses the subleased property. O&L"BAT"ONS O; TAE LESSO+ $!n(. !elivery of the ob/ect $cannot be waived. (a5ing of necessary repairs (aintenance in peaceful and adequate possession O&L"BAT"ONS O; TAE LESSEE $+*EN*>. to pay rent to use thing leased as a diligent father of a family# devoting it to the use stipulated to pay e0penses for the deed of lease to notify the lessor of usurpation or untoward acts to notify the lessor of need for repairs to return the property leased upon termination of the lease Effect of !estruction of the Thing Leased Total destruction by a fortuitous event Lease is e0tinguished

%artial destruction %roportional reduction of the rent# or +escission of the lease 1hen lessee may suspend payment of rent lessor fails to underta5e necessary repairs lessor fails to maintain the lessee in peaceful and adequate en/oyment of the property leased

NOTESuspend4 for the intervening period# the lessee does not have to pay the rent. E;;E'T"="TG O; TAE S>S%ENS"ON The right begins a. "n the case of repairs# from the time he made the demand for said repairs# and the demand went unheeded. b. "n the case of eviction# from the time the final /udgment for eviction becomes effective. Alternative remedies of Aggrieved party $Lessor?Lessee. in case of Non4fulfillment of duties +escission and damages !amages only# allowing the contract to remain in force Specific %erformance NOTE !amages +ecoverable in e/ectment cases are the rents or the fair rental value of the premises.The following cannot be successfully claimed %rofits plaintiff could have earned were it not for the possible entry or unlawful detainer (aterial in/ury to the premises Actual# moral# or e0emplary damages "mmediate termination of lease under Art. ,))applies only to dwelling place or any other building intended for human habitation even if at the time the contract was perfected# the lessee 5new of the dangerous condition or waived the right to rescind on account of this condition +ules on Alteration of the ;orm of the Lease The Lessor can alter provided there is no impairment of the use to which the thing is devoted under the terms of the lease Alteration can also be made by the Lessee so long as the value of the property is not substantially impaired +ules in case of >rgent +epairs The lessee is obliged to tolerate the wor5 although it may be very annoying to him and although during the same time he may be deprived of a part of the premises "f repairs last for more than Cdays Lessee cannot act for reduction of rent or rescission "f Cdays or more lessee can as5 for proportionate reduction NOTE"n either case# rescission may be availed of if the main purpose is to provide a dwelling place and the property becomes uninhabitable. Effects if Lessor fails to ma5e >rgent +epairs Lessee may order repairs at the lessors cost Lessee may sue for damages Lessee may suspend the payment of the rent Lessee may as5 for rescission# in case of substantial damage to him T+ES%ASS "N LEASE Trespass in fact $perturbacion de mere hecho. physical en/oyment is reduced Lessor will not be held liable. Trespass in law $perturbacion de derecho. A third person claims legal right to en/oy the premises Lessor will be held liable NOTE1hile the @apanese Occupation was a fortuitous event# the lessor is still not e0cused from his obligation to warrant peaceful legal possession. Lease is a contract that calls for prestations both reciprocal and repetitive2 and the obligations of either party are not discharged at any given moment# but must be fulfilled all throughout the term of the contract. $=illaruel vs. (anila (otor 'o..

!uration of Lease Lease made for a determinate time or fi0ed %eriod Lease will be for the said period and it ends on the day fi0ed without need of a demand "f there is no fi0ed period ;or +ural Lands $Article ,)8E. it shall be for all time necessary for the gathering of fruits which the whole estate may yield in , year# or which it may yield once ;or >rban Lands $Article ,)8-. "f rent is paid daily lease is from day to day "f rent is paid wee5ly lease is from wee5 to wee5 "f rent is paid monthly lease is from month to month "f rent is paid yearly lease is from year to year +>LES ON EJTENS"ON O; TAE LEASE %E+"O! ,. "f a lease contract for a definite term allows lessee to e0tend the term# there is no necessity for lessee to notify lessor of his desire to so e0tend the term# unless the contrary is stipulated. *. (ay be e0tended as stipulationlessee can e0tend without lessors consent but lessee must notify lessor. <. (ay be e0tended for ) years agreed upon by both parties as stipulationThis must be interpreted in favor of the lessee. Aence# ordinarily the lessee at the end of the original period may either leave the premises2 or remain in possession C. "n co4ownership# assent of all is needed2 otherwise# it is void or ineffective as against non4consenting co4owners. D. 1here according to the terms of the contract# the lease can be e0tended only by the written consent of the parties thereto# no right of e0tension can rise without such written consent. +ule if Lessor Ob/ects to the Lessees continued %ossession +equisites 'ontract has e0pired Lessee continued en/oying the thing Lessor Ob/ected to this en/oyment "f the three requisites are present# the lessee shall be considered a possessor in bad faith "(%L"E! NE1 LEASE $Tacita +econducion. lease which arises if at the end of the contract the lessee should continue en/oying the thing leased for ,D days with the acquiescence of the lessor# unless a notice to the contrary had previously been given by either party. +equisites the term of the original contract has e0pired the lessor has not given the lessee a notice to vacate the lessee continued en/oying the thing leased for at least ,D days with the acquiescence of the lessor 1hen there is no implied new lease 1hen before or after the e0piration of the term# there is a notice to vacate given by either party. 1hen there is no definite fi0ed period in the original lease contract as in the case of successive renewals. Effects The period of the new lease is not that stated in the original contract but the time in Articles ,)8* and ,)8-. Other terms of the original contract are revived. NOTETerms that are revived are only those which are germane to the en/oyment of possession# but not

those with respect to special agreements which are by nature foreign to the right of occupancy or en/oyment inherent in a contract of lease such as an option to purchase the leased premises $!iFon vs. (agsaysay B+ No. *<<77# (ay <,#,7-C. %erpetual Lease A lease contract providing that the lessee can stay in the premises for as long as he wants and for as long as he can pay the rentals and its increases. This is not permissible2 it is a purely potestative condition because it leaves the effectivity and en/oyment of leasehold rights to the sole and e0clusive will of the lessee NOTE "n @espa/o +ealty vs. 'A# *- Sept. *EE*# the S' upheld a lease contract# which provides that the lease contract shall continue for an indefinite period provided that the lessee is up4to4date in the payment of his monthly rentals for the contract is one with a period sub/ect to a resolutory condition. %>+'AASE O; TAE LEASE! %+O%E+TG $BENE+AL +>LE%urchaser of thing leased can terminate lease. $EJ'E%T"ONS lease is recorded in +egistry of %roperty there is stipulation in the contract of sale that purchaser shall respect the lease purchaser 5nows the e0istence of the lease sale is fictitious sale is made with right of repurchase B+O>N!S ;O+ E@E'T(ENT >N!E+ A+T. ,)-<$EL=>. E0piration of the period agreed upon or the period under Arts. ,)8* and ,)8-2 Lac5 of payment of the price stipulated2 =iolation of any of the conditions agreed upon in the contract2 and >nauthoriFed use or service by the lessee of the thing leased.

+ENTAL +E;O+( A'T O; *EE* $+.A. No. 7,),. Effectivity@anuary ,# *EE*. 'overage All residential units of N'+ and other highly urbaniFed cities# the total monthly rental for each of which does not e0ceed %-#DEE2 All residential units in other areas the total monthly rental for each of which does not e0ceed %C#EEas of ,?,?E*# without pre/udice to pre4e0isting contracts. Brounds for /udicial e/ectmentSANO+E Assignment of lease or subleasing of residential units including the acceptance of boarders or bedspacers without written consent of the owner or lessor2 Arrears in payment of rent for a total of < months2 Legitimate needs of the owner or lessor to repossess for his own use or for the use of any immediate member of his family as a residential unit# provided owner or immediate member not being owner of any other available residential unit within the same city or municipality2 lease for a definite period has e0pired2 lessor has given lessee formal notice < months in advance2 and owner or lessor is prohibited from leasing the residential unit or allowing its use by a third person for at least , year. Absolute ownership by the lessee of another dwelling unit in the same city or municipality which may be

lawfully used as his residence provided lessee is with formal notice < months in advance2 Need of the lessor to ma5e necessary repairs in the leased premises which is the sub/ect of an e0isting order of condemnation by appropriate authorities concerned in order to ma5e said premises safe and habitable2 and E0piration of period of the lease contract. NOTE E0cept when the lease is for a definite period# the provisions of Art. ,)-<$,. of the 'ivil 'ode $''.# insofar as they refer to residential units# shall be suspended during the effectivity of +.A. 7,),# but other provisions of the '' and the +ules of 'ourt on lease contracts insofar as they are not in conflict with the provisions of +.A. No. 7,), shall apply. No increase in monthly rental by more than ,EN is allowed. TE+("NAT"ON O; TAE LEASE "f made for a determinate time# it ceases upon the day fi0ed without the need of a demand. ,. &y the e0piration of the period *. &y the total loss of the thing <. &y the resolution of the right of the lessor C. &y the will of the purchaser or transferee of the thing D. &y rescission due to non4performance of the obligation of one of the parties Special %rovisions for +ural Lands Effect of loss due to fortuitous event Ordinary fortuitous event no reduction E0traordinary fortuitous event if more than of the fruits were lost# there shall be a reduction# unless there is a stipulation to the contrary if or less# there shall be no reduction Lease duration"f not fi0ed# it shall be for all time necessary for the gathering of fruits which the whole estate may yield in , year# or which it may yield once. Special %rovisions for >rban Lands +epairs for which urban lessor is liable special stipulation if none# custom of the place in case of doubt# the repairs are chargeable against him

Lease duration ,. "f there is a fi0ed period# lease will be for said period. *. "f no fi0ed period# apply the following rules "f rent is paid dailyday to day "f rent is paid wee5lywee5 to wee5 "f rent is paid monthlymonth to month "f rent is paid yearlyyear to year %ABE ,C8 *EED 'entraliFed &ar Operations

San &eda 'ollege of Law%ABE ,C7 (emory Aid in 'ivil Law *EED 'entraliFed &ar Operations E0ecutive 'ommittee and Sub/ect 'hairpersons (aricel Abarentos $Over4all 'hairperson.# +onald @almanFar $Over4all =ice 'hair.# Golanda Tolentino$='4

Acads.# @ennifer Ang$='4 Secretariat.# @oy "nductivo $='4;inance.# Elaine (asu5at $='4E!%.# Anna (argarita Eres $='4Logistics.. @onathan (angundayao $%olitical Law.# ;rancis &enedict +eotutar $Labor Law.# +omuald %adilla $'ivil Law.# 'harmaine Torres $Ta0ation Law.# (ar5 !avid (artineF $'riminal Law.# Barny Luisa Alegre $'ommercial Law.# @in5y Ann >y $+emedial Law.# @ac5ie Lou &autista $Legal Ethics. 'ivil Law 'ommittee $'hairperson+omuald %adilla $Asst.'hairperson=ida &ocar# @oyce =idad $E!%AlnaiFa Aassiman# !orothy Bayon $ Sub/ect Aeads'hristopher +ey (arasigan $%ersons and ;amily +elations.# Ale/andro 'asabar$%roperty.# (a. +hodora ;errer$1ills and Succession.# "an !ominic %ua$Obligations and 'ontracts.# Sha Eli/ah !umama$Sales and Lease.# @ohn Stephen Kuiambao$%AT.# 'hristopher 'abigao$'redit Transactions.# Ligaya Alipao$Torts and !amages.# Anthony %urganan$LT!.# (a. +icasion Tugadi $'onflicts of Law.