Professional Documents
Culture Documents
(a) The Register of Deeds for each province or city shall 1. EXPRESS – an affirmation of fact or any promise
keep a Primary Entry Book and a Registration Book. The made by a vendor in relation to the thing sold.
Primary Entry Book shall contain, among other – has the natural tendency to induce the vendee to
particulars, the entry number, the names of the parties, the purchase the thing
nature of the document, the date, hour and minute it was
presented and received. The recording of the deed and Article 1546. Any affirmation of fact or any promise by
other instruments relating to unregistered lands shall be the seller relating to the thing is an express warranty if the
effected by any of annotation on the space provided natural tendency of such affirmation or promise is to
therefor in the Registration Book, after the same shall induce the buyer to purchase the same, and if the buyer
have been entered in the Primary Entry Book. purchases the thing relying thereon. GR:No affirmation of
the value of the thing, nor any statement purporting to be
(b) If, on the face of the instrument, it appears that it is a statement of the seller's opinion only, shall be construed
sufficient in law, the Register of Deeds shall forthwith as a warranty, XPN:unless the seller made such affirmation
record the instrument in the manner provided herein. In or statement as an expert and it was relied upon by the
case the Register of Deeds refuses its administration to buyer. (n)
record, said official shall advise the party in interest in
writing of the ground or grounds for his refusal, and the » Requisites:
latter may appeal the matter to the Commissioner of Land 1. there must be an affirmation of fact or any
Registration in accordance with the provisions of Section promise by the seller relating to the thing
117 of this Decree. It shall be understood that any 2. the natural tendency of such is to induce the
recording made under this section shall be without buyer to purchase the same (principal factor)
prejudice to a third party with a better right. 3. buyer purchases the thing relying thereon
4. the affirmation or promise must be made before
(c) After recording on the Record Book, the Register of the perfection of the COS
Deeds shall endorse among other things, upon the original
of the recorded instruments, the file number and the date a. Distinguished from Condition
as well as the hour and minute when the document was – an operative act that sets into motion the
received for recording as shown in the Primary Entry compliance by either party of his own obligation.
Book, returning to the registrant or person in interest the
duplicate of the instrument, with appropriate annotation, Article 1545. Where the obligation of either party to a
certifying that he has recorded the instrument after contract of sale is subject to any condition which is not
reserving one copy thereof to be furnished the provincial performed, such party may arefuse to proceed with the
or city assessor as required by existing law. contract or bhe may waive performance of the condition.
If the other party has promised that the condition should
(d) Tax sale, attachment and levy, notice of lis pendens, happen or be performed, such first mentioned party may
adverse claim and other instruments in the nature of also treat the nonperformance of the condition as a breach
involuntary dealings with respect to unregistered lands, if of warranty.
made in the form sufficient in law, shall likewise be
admissible to record under this section. Where the ownership in the thing has not passed, the
buyer may treat the fulfillment by the seller of his
(e) For the services to be rendered by the Register of obligation to deliver the same as described and as
Deeds under this section, he shall collect the same amount warranted expressly or by implication in the contract of
of fees prescribed for similar services for the registration sale as a condition of the obligation of the buyer to
of deeds or instruments concerning registered lands. perform his promise to accept and pay for the thing. (n)
VI. WHEN A SALE IS FORGERY 1st par.: the operative act which converts condition to
warranty is the promise of the obligor that the condition
GR: forged deed is null and void; therefore, it cannot would happen or be performed
convey a title – ergo, non-performance = breach
XPN: innocent purchaser for value (from forger → – for rescission: breach must be substantial
innocent buyer)
2nd par.: payment is conditioned upon delivery
B. de Leon | SALES (2017) | Atty. RRD 3
b. Distinguished from Opinion, Dealer’s Talk is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;
Article 1546. Any affirmation of fact or any promise by
the seller relating to the thing is an express warranty if the (2) An implied warranty that the thing shall be free from
natural tendency of such affirmation or promise is to any hidden faults or defects, or any charge or
induce the buyer to purchase the same, and if the buyer encumbrance not declared or known to the buyer.
purchases the thing relying thereon. GR:No affirmation of
the value of the thing, nor any statement purporting to be This article shall not, however, be held to render liable a
a statement of the seller's opinion only, shall be construed sheriff, auctioneer, mortgagee, pledgee, or other person
as a warranty, XPN:unless the seller made such affirmation professing to sell by virtue of authority in fact or law, for
or statement as an expert and it was relied upon by the the sale of a thing in which a third person has a legal or
buyer. (n) equitable interest. (n)
Article 1340. The usual exaggerations in trade, when the a. Seller has Right to Sell
other party had an opportunity to know the facts, are not
in themselves fraudulent. (n) Article 1547. In a contract of sale, unless a contrary
intention appears, there is:
Article 1341. GR:A mere expression of an opinion does (1) An implied warranty on the part of the seller that he
not signify fraud, XPN:unless made by an expert and the has a right to sell the thing at the time when the ownership
other party has relied on the former's special knowledge. is to pass, and that the buyer shall from that time have and
(n) enjoy the legal and peaceful possession of the thing;
Decisive Test: Whether the vendor assumes to assert a (2) An implied warranty that the thing shall be free from
fact of which the vendee is ignorant any hidden faults or defects, or any charge or
encumbrance not declared or known to the buyer.
Opinion, Dealer’s Talk and Usual Exaggerations are not
necessarily true but if you tell it as a fact or truth and it This article shall not, however, be held to render liable a
was relied upon by the buyer, it becomes an express sheriff, auctioneer, mortgagee, pledgee, or other person
warranty. professing to sell by virtue of authority in fact or law, for
the sale of a thing in which a third person has a legal or
c. Distinguished from False Representation equitable interest. (n)
Article 1342. Misrepresentation by a third person does 1st par.: the seller warrants his right to sell the thing
not vitiate consent, unless such misrepresentation has during the consummation stage since ownership is
created substantial mistake and the same is mutual. (n) transferred to the buyer by delivery.
– “caveat emptor” because the buyer acquires no better
2. IMPLIED – a natural element of a COS that is deemed title than the seller has
included in such contract by operation of law
– no prior knowledge and stipulation needed 3rd par.: not applicable because it is established that they
– GR: parties may waive or modify such warranty are not the owners and they only sell through operation of
XPN: specific implied warranties that cannot be law
waived by express provision of law. i.e. against eviction
b. Warranty Against Eviction – “eviction”: vendee is
Implied Warranties: deprived of the whole or of a part of the thing
(1) Seller has the Right to Sell purchased.
(2) Warranty Against Eviction
(3) Warranty Against Non-apparent Servitude Article 1548. Eviction shall take place whenever by a
(4) Warranty Against Hidden Defects final judgment based on a right prior to the sale or an act
(5) Warranty in Sale of Animals imputable to the vendor, the vendee is deprived of the
(6) Implied Warranty of Quality whole or of a part of the thing purchased.
Article 1547. In a contract of sale, unless a contrary The vendor shall answer for the eviction even though
intention appears, there is: nothing has been said in the contract on the subject.
(1) An implied warranty on the part of the seller that he The contracting parties, however, may increase, diminish,
has a right to sell the thing at the time when the ownership or suppress this legal obligation of the vendor. (1475a)
Article 1549. The vendee need not appeal from the (4) The expenses of the contract, if the vendee has paid
decision in order that the vendor may become liable for them;
eviction. (n)
(5) The damages and interests, and ornamental expenses,
Article 1551. If the property is sold for nonpayment of if the sale was made in bad faith. (1478)
taxes due and not made known to the vendee before the
sale, the vendor is liable for eviction. (n) Article 1556. Should the vendee lose, by reason of the
eviction, a part of the thing sold of such importance, in
Article 1552. The judgment debtor is also responsible for relation to the whole, that he would not have bought it
eviction in judicial sales, unless it is otherwise decreed in without said part, ahe may demand the rescission of the
the judgment. (n) contract; but with the obligation to return the thing
without other encumbrances that those which it had when
Article 1557. The warranty cannot be enforced until a he acquired it.
final judgment has been rendered, whereby the vendee b
loses the thing acquired or a part thereof. (1480) He may exercise this right of action, instead of enforcing
the vendor's liability for eviction.
Article 1559. The defendant vendee shall ask, within the
time fixed in the Rules of Court for answering the The same rule shall be observed when two or more things
complaint, that the vendor be made a co-defendant. have been jointly sold for a lump sum, or for a separate
(1482a) price for each of them, if it should clearly appear that the
vendee would not have purchased one without the other.
Pertinent Rules Regarding Waiver: (1479a)
Article 1553. Any stipulation exempting the vendor from
the obligation to answer for eviction shall be void, if he Article 1558. The vendor shall not be obliged to make
acted in bad faith. (1476) good the proper warranty, unless he is summoned in the
suit for eviction at the instance of the vendee. (1481a)
Article 1554. If the vendee has arenounced the right to
warranty in case of eviction, and eviction should take Warranty Against Eviction is Not Applicable When:
place, the vendor shall only pay the value which the thing (1) There is no deprivation of property
sold had at the time of the eviction. Should the vendee (2) The reason of the deprivation of the property was
have bmade the waiver with knowledge of the risks of not deliberately caused by the seller
eviction and assumed its consequences, the vendor shall (3) Art. 1558
not be liable. (1477)
The warrantor will not be required to perform the above Article 70. Professional Services. – The provision of this
duties if he can show that the defect, malfunction or Act on warranty shall not apply to professional services of
failure to conform to a written warranty was caused by certified public accountants, architects, engineers,
damage due to unreasonable use thereof. lawyers, veterinarians, optometrists, pharmacists, nurses,
nutritionists, dietitians, physical therapists, salesmen,
e) Duration of warranty. – The seller and the consumer medical and dental practitioners and other professionals
may stipulate the period within which the express engaged in their respective professional endeavors.
warranty shall be enforceable. If the implied warranty on
merchantability accompanies an express warranty, both Article 72. Prohibited Acts. – The following acts are
will be of equal duration. prohibited:
Any other implied warranty shall endure not less than a) refusal without any valid legal cause by the total
sixty (60) days nor more than one (1) year following the manufacturer or any person obligated under the warranty
sale of new consumer products. or guarantee to honor a warranty or guarantee issued;
a) Any person who shall violate the provisions of Article Article 1578. If the animal should die within three days
67 shall be subject to fine of not less than Five hundred after its purchase, the vendor shall be liable if the disease
pesos (P500.00) but not more than Five thousand pesos which cause the death existed at the time of the contract.
(P5,000.00) or an imprisonment of not less than three (3) (1497a)
months but not more than two (2) years or both upon the
discretion of the court. A second conviction under this Article 1581. The form of sale of large cattle shall be
paragraph shall also carry with it the penalty or revocation governed by special laws. (n)
of his business permit and license.
Article 1574. There is no warranty against hidden defects
b) Any person, natural or juridical, committing any of the of animals sold at fairs or at public auctions, or of live
illegal acts provided for in Chapter III, except with stock sold as condemned. (1493a)
respect to Article 67, shall be liable for a fine of not less
than One thousand pesos (P1,000.00) but not more than Article 1575. The sale of animals suffering from
Fifty thousand pesos (P50,000.00) or imprisonment for a contagious diseases shall be void.
period of at least one (1) year but not more than five (5)
years, or both, at the discretion of the court. A contract of sale of animals shall also be void if the use
or service for which they are acquired has been stated in
The imposition of any of the penalties herein provided is the contract, and they are found to be unfit therefor.
without prejudice to any liability incurred under the (1494a)
warranty or guarantee.
Redhibitory Defect:
f. Warranty in Sale of Animals Article 1576. If the hidden defect of animals, even in case
a professional inspection has been made, should be of
Requisites: such a nature that expert knowledge is not sufficient to
(1) The defect must be redhibitory; discover it, the defect shall be considered as redhibitory.
(2) The defect is one determined by law or local
customs or usage; But if the veterinarian, through ignorance or bad faith
(3) The sale is not one in fairs, public auction nor should fail to discover or disclose it, he shall be liable for
does it refer to animals sold as condemned; damages. (1495)
(4) The action is brought within the prescriptive
period; Remedies:
(5) There is no waiver of warranty by the vendee
Article 1579. If the sale be rescinded, the animal shall be
returned in the condition in which it was sold and
When Two or More Animals are Sold Together:
delivered, the vendee being answerable for any injury due
Article 1572. If two or more animals are sold together, to his negligence, and not arising from the redhibitory
whether for a lump sum or for a separate price for each of fault or defect. (1498)
them, GR:the redhibitory defect of one shall only give rise
to its redhibition, and not that of the others; XPN:unless it Article 1580. In the sale of animals with redhibitory
should appear that the vendee would not have purchased defects, the vendee shall also enjoy the right mentioned in
the sound animal or animals without the defective one. article 1567; but he must make use thereof within the
same period which has been fixed for the exercise of the
The latter case shall be presumed when a team, yoke pair, redhibitory action. (1499)
or set is bought, even if a separate price has been fixed for
each one of the animals composing the same. (1491)
(a) Withdraw from the contract + damages
(b) Demand a proportional reduction of the
Article 1573. The provisions of the preceding article with price + damages
respect to the sale of animals shall in like manner be
applicable to the sale of other things. (1492)
Article 1564. An implied warranty or condition as to the (1) Accept or keep the goods and set up against the seller,
quality or fitness for a particular purpose may be annexed the breach of warranty by way of recoupment in
by the usage of trade. (n) diminution or extinction of the price;
(1) "Document of title to goods" includes any bill of Negotiation Not Impaired by Fraud:
lading, dock warrant, "quedan," or warehouse receipt or Article 1518. The validity of the negotiation of a
order for the delivery of goods, or any other document negotiable document of title is not impaired by the fact
used in the ordinary course of business in the sale or that the negotiation was a breach of duty on the part of the
transfer of goods, as proof of the possession or control of person making the negotiation, or by the fact that the
the goods, or authorizing or purporting to authorize the owner of the document was deprived of the possession of
possessor of the document to transfer or receive, either by the same by loss, theft, fraud, accident, mistake, duress, or
indorsement or by delivery, goods represented by such conversion, if the person to whom the document was
document. negotiated or a person to whom the document was
subsequently negotiated paid value therefor in good faith
Rules on Levy or Garnishment of Goods that are Covered (2) In case of the insolvency of the buyer, a right of
by a Document of Title: stopping the goods in transitu after he has parted with the
Article 1519. If goods are delivered to a bailee by the possession of them;
owner or by a person whose act in conveying the title to
them to a purchaser in good faith for value would bind the (3) A right of resale as limited by this Title;
owner and a negotiable document of title is issued for
them they cannot thereafter, while in possession of such (4) A right to rescind the sale as likewise limited by this
bailee, be attached by garnishment or otherwise or be Title.
levied under an execution unless the document be first
surrendered to the bailee or its negotiation enjoined. The Where the ownership in the goods has not passed to the
bailee shall in no case be compelled to deliver up the buyer, the unpaid seller has, in addition to his other
actual possession of the goods until the document is remedies a right of withholding delivery similar to and
surrendered to him or impounded by the court. (n) coextensive with his rights of lien and stoppage in transitu
where the ownership has passed to the buyer. (n)
Article 1520. A creditor whose debtor is the owner of a
negotiable document of title shall be entitled to such aid 1. LIEN – possessory lien: seller is entitled to retain
from courts of appropriate jurisdiction by injunction and possession of the goods until the price has been paid or
otherwise in attaching such document or in satisfying the tendered in full.
claim by means thereof as is allowed at law or in equity in
regard to property which cannot readily be attached or When Entitled to Retain Possession:
levied upon by ordinary legal process. (n) Article 1527. Subject to the provisions of this Title, the
– if an injunction has been issued but the negotiable unpaid seller of goods who is in possession of them is
document of title is negotiated to an innocent person, the entitled to retain possession of them until payment or
transfer is effectual. tender of the price in the following cases, namely:
IX. REMEDIES OF AN UNPAID SELLER (1) Where the goods have been sold without any
stipulation as to credit;
Article 1525. The seller of goods is deemed to be an
(2) Where the goods have been sold on credit, but the
unpaid seller within the meaning of this Title:
term of credit has expired;
(1) When the whole of the price has not been paid or
(3) Where the buyer becomes insolvent.
tendered;
The seller may exercise his right of lien notwithstanding
(2) When a bill of exchange or other negotiable
that he is in possession of the goods as agent or bailee for
instrument has been received as conditional payment, and
the buyer. (n)
the condition on which it was received has been broken
by reason of the dishonor of the instrument, the
insolvency of the buyer, or otherwise. When Unpaid Seller Loses His Lein:
Article 1529. The unpaid seller of goods loses his lien
In articles 1525 to 1535 the term "seller" includes an thereon:
agent of the seller to whom the bill of lading has been
indorsed, or a consignor or agent who has himself paid, or (1) When he delivers the goods to a carrier or other bailee
is directly responsible for the price, or any other person for the purpose of transmission to the buyer without
who is in the position of a seller. (n) reserving the ownership in the goods or the right to the
possession thereof;
Article 1535. Subject to the provisions of this Title, the (1) If the buyer, or his agent in that behalf, obtains
unpaid seller's right of lien or stoppage in transitu is not delivery of the goods before their arrival at the appointed
affected by any sale, or other disposition of the goods destination;
which the buyer may have made, unless the seller has
assented thereto. (2) If, after the arrival of the goods at the appointed
destination, the carrier or other bailee acknowledges to
If, however, a negotiable document of title has been the buyer or his agent that he holds the goods on his
issued for goods, no seller's lien or right of stoppage in behalf and continues in possession of them as bailee for
transitu shall defeat the right of any purchaser for value in the buyer or his agent; and it is immaterial that further
good faith to whom such document has been negotiated, destination for the goods may have been indicated by the
whether such negotiation be prior or subsequent to the buyer;
notification to the carrier, or other bailee who issued such
document, of the seller's claim to a lien or right of (3) If the carrier or other bailee wrongfully refuses to
stoppage in transitu. (n) deliver the goods to the buyer or his agent in that behalf.
The transfer of title shall not be held to have been Par. 4 It is not essential to the validity of a resale that
rescinded by an unpaid seller until he has manifested by notice of the time and place of such resale should be
notice to the buyer or by some other overt act an intention given by the seller to the original buyer.
to rescind. It is not necessary that such overt act should be
communicated to the buyer, but the giving or failure to Essentials to the Validity of Resale:
give notice to the buyer of the intention to rescind shall be Par. 5 The seller is bound to exercise reasonable care and
relevant in any issue involving the question whether the judgment in making a resale, and subject to this
buyer had been in default for an unreasonable time before requirement may make a resale either by public or private
the right of rescission was asserted. (n) sale. He cannot, however, directly or indirectly buy the
goods. (n)
Effects of Subsequent Sale of Goods to Unpaid Seller’s
Possessory Lien or Right of Stoppage in Transitu: 4. RESCISSION
Article 1535. Subject to the provisions of this Title, GR:the
unpaid seller's right of lien or stoppage in transitu is not When Can Rescission Be Exercised and the Effects::
affected by any sale, or other disposition of the goods Article 1534. An unpaid seller having the right of lien or
which the buyer may have made, XPNs: 1unless the seller having stopped the goods in transitu, may rescind the
has assented thereto. transfer of title and resume the ownership in the goods,
2
where ahe expressly reserved the right to do so in case the
If, however, a negotiable document of title has been buyer should make default, or where bthe buyer has been
issued for goods, no seller's lien or right of stoppage in in default in the payment of the price for an unreasonable
transitu shall defeat the right of any purchaser for value in time. The 1seller shall not thereafter be liable to the buyer
good faith to whom such document has been negotiated, upon the contract of sale, but 2may recover from the buyer
whether such negotiation be prior or subsequent to the damages for any loss occasioned by the breach of the
notification to the carrier, or other bailee who issued such contract.
document, of the seller's claim to a lien or right of
stoppage in transitu. (n) Essentials for the Validity of Rescission
Par. 2 The transfer of title shall not be held to have been
3. RESALE – special right because court intervention is rescinded by an unpaid seller until he has manifested by
not needed notice to the buyer or by some other overt act an intention
to rescind. It is not necessary that such overt act should be
Instances When the Seller is Allowed to Resell the Goods communicated to the buyer, but the giving or failure to
and the Effects of Resale: give notice to the buyer of the intention to rescind shall be
Article 1533. Where the agoods are of perishable nature, relevant in any issue involving the question whether the
or where bthe seller expressly reserves the right of resale buyer had been in default for an unreasonable time before
in case the buyer should make default, or where cthe the right of rescission was asserted. (n)
buyer has been in default in the payment of the price for
an unreasonable time, an unpaid seller having a right of Rescission Requires Mutual Restitution:
lien or having stopped the goods in transitu may resell the
Article 1385. Rescission creates the obligation to 1return
goods. 1He shall not thereafter be liable to the original
the things which were the object of the contract, 2together
buyer upon the contract of sale or for any profit made by
with their fruits, and 3the price with its interest;
such resale, but 2may recover from the buyer damages for
consequently, it can be carried out only when he who
any loss occasioned by the breach of the contract of sale.
demands rescission can return whatever he may be
obliged to restore.
Where a resale is made, as authorized in this article, 3the
buyer acquires a good title as against the original buyer.
In this case, indemnity for damages may be demanded Article 1583. XPN:Unless otherwise agreed, GR:the buyer of
from the person causing the loss. (1295) goods is not bound to accept delivery thereof by
installments.
Article 1596. Where the buyer wrongfully neglects or
refuses to accept and pay for the goods, the seller may Where there is a contract of sale of goods to be delivered
maintain an action against him for damages for non- by stated installments, which are to be separately paid for,
acceptance. and the aseller makes defective deliveries in respect of one
or more installments, or the bbuyer neglects or refuses
The measure of damages is the estimated loss directly and without just cause to take delivery of or pay for one or
naturally resulting in the ordinary course of events from more installments, it depends in each case on the terms of
the buyer's breach of contract. the contract and the circumstances of the case, whether
the breach of contract is so material as to justify the
Where there is an available market for the goods in injured party in 1refusing to proceed further and 2suing for
question, the measure of damages is, in the absence of damages for breach of the entire contract, or whether the
special circumstances showing proximate damage of a breach is severable, giving rise to a 1claim for
different amount, the difference between the contract compensation but not to a right to treat the whole contract
price and the market or current price at the time or times as broken. (n)
when the goods ought to have been accepted, or, if no
time was fixed for acceptance, then at the time of the GR: the buyer of the goods is not bound to accept
refusal to accept. delivery thereof by installments
XPN: unless otherwise agreed
If, while labor or expense of material amount is necessary → installment contract – delivery of goods in
on the part of the seller to enable him to fulfill his installments or separate lots
obligations under the contract of sale, the buyer
repudiates the contract or notifies the seller to proceed no Default on the Part of Either Party:
further therewith, the buyer shall be liable to the seller for The determination of what constitutes default and the
labor performed or expenses made before receiving notice applicable remedy will depend upon the 1agreement of the
of the buyer's repudiation or countermand. The profit the parties and the 2circumstances of the case.
seller would have made if the contract or the sale had → in the absence of any stipulation, a failure to pay and
been fully performed shall be considered in awarding the to make a delivery may constitute breach
damages. (n)
In cases of installment contracts, if:
5. WITHHOLD DELIVERY a. seller makes defective deliveries in respect of
one or more installments; or
X. RIGHTS AND OBLIGATIONS OF THE VENDEE b. buyer neglects or refuses without just cause to
take delivery of or pay for one or more
Article 1582. The vendee is bound to 1accept delivery and installments
to 2pay the price of the thing sold at the time and place it will depend on each case of the contract to determine
stipulated in the contract. whether the breach is:
a. material – to justify the injured party in refusing
If the time and place should not have been stipulated, the to proceed further and suing damages
payment must be made at the time and place of the b. severable – giving a rise to claim for
delivery of the thing sold. (1500a) compensation but not a right to treat the whole
contract as broken.
Principal Obligations of the Vendee:
II. Buyer’s Opportunity to Examine the Goods
1) To accept delivery; and
2) To pay the price of the thing sold
Article 1584. Where goods are delivered to the buyer,
Time and Place of Acceptance and Payment: which he has not previously examined, he is not deemed
GR: at the time and place stipulated in the contract to have accepted them unless and until he has had a
XPN: if no stipulation, at the time and place of the reasonable opportunity of examining them for the purpose
delivery of the thing sold. of ascertaining whether they are in conformity with the
contract if there is no stipulation to the contrary.
Article 1585. The buyer is deemed to have accepted the VI. Effects of Acceptance
goods when he 1intimates to the seller that he has
accepted them, or 2when the goods have been delivered to Article 1588. If there is no stipulation as specified in the
him, and he does any act in relation to them which is first paragraph of article 1523, when the buyer's refusal to
inconsistent with the ownership of the seller, or when, accept the goods is without just cause, the title thereto
3
after the lapse of a reasonable time, he retains the goods passes to him from the moment they are placed at his
without intimating to the seller that he has rejected them. disposal. (n)
(n)
Article 1523(1). Where, in pursuance of a contract of
Badges of Acceptance by the Buyer: sale, the seller is authorized or required to send the goods
a) he intimates to the seller that he has accepted to the buyer, delivery of the goods to a carrier, whether
them named by the buyer or not, for the purpose of
GR: the acceptance of the goods by the buyer does not When the vendee may suspend payment:
discharge the seller from liability in damages or other a) he is disturbed in the possession or ownership of
legal remedy for breach of any promise or warranty in the the thing acquired
contract of sale b) he has reasonable grounds to fear such
XPNs: disturbance is by a vindicatory action or a
1. the presence of an express or implied agreement foreclosure of mortgage
of the parties to the contrary
2. the buyer fails to give notice to the seller of the When the vendee cannot suspend payment:
breach in any promise of warranty within a a) the vendor gives security for the return of the
reasonable time after the buyer knows, or ought price in a proper case
to know of such breach b) it has been stipulated that, notwithstanding any
such contingency, the vendee shall be bound to
B. PAY PRICE / REMEDIES make the payment
– the rule on fortuitous event does not apply when the
obligation is pecuniary in nature, like the buyer’s Duration: only until the vendor has caused the disturbance
obligation to pay or danger to cease
Article 1589. The vendee shall owe interest for the period Article 1560. If the immovable sold should be
between the delivery of the thing and the payment of the encumbered with any non-apparent burden or servitude,
price, in the following three cases: not mentioned in the agreement, of such a nature that it
must be presumed that the vendee would not have
(1) Should it have been so stipulated; acquired it had he been aware thereof, he may ask for the
rescission of the contract, unless he should prefer the
(2) Should the thing sold and delivered produce fruits or appropriate indemnity. Neither right can be exercised if
income; the non-apparent burden or servitude is recorded in the
Registry of Property, unless there is an express warranty
(3) Should he be in default, from the time of judicial or that the thing is free from all burdens and encumbrances.
extrajudicial demand for the payment of the price.
(1501a) Within one year, to be computed from the execution of
the deed, the vendee may bring the action for rescission,
II. Suspension of Payments or sue for damages.
Article 1590. Should the vendee be adisturbed in the One year having elapsed, he may only bring an action for
possession or ownership of the thing acquired, or should damages within an equal period, to be counted from the
he have breasonable grounds to fear such disturbance, by a date on which he discovered the burden or servitude.
vindicatory action or a foreclosure of mortgage, he may (1483a)
suspend the payment of the price until the vendor has Article 1591. Should the vendor have reasonable grounds
caused the disturbance or danger to cease, unless the to fear the loss of immovable property sold and its price,
a
latter gives security for the return of the price in a proper he may immediately sue for the rescission of the sale.
case, or bit has been stipulated that, notwithstanding any
B. de Leon | SALES (2017) | Atty. RRD 17
Should such ground not exist, the provisions of article Failure of the Vendee to Pay the Price at the Time Agreed
1191 shall be observed. (1503) Upon:
1. Rescission under Art. 1592
Article 1191. The power to rescind obligations is implied → previous rules apply
in reciprocal ones, in case one of the obligors should not → Art. 1191 is subordinated to the provisions of this
comply with what is incumbent upon him. Article when applied to sales of immovable property
→ still, in case of non-payment, the vendor has the
The injured party may choose between the fulfillment and right to demand for rescission of the contract either
the rescission of the obligation, with the payment of judicially or extrajudicially.
damages in either case. He may also seek rescission, even 2. R.A. 6552: Realty Installment Buyer Protection Act
after he has chosen fulfillment, if the latter should become (Maceda Law)
impossible.
AN ACT TO PROVIDE PROTECTION TO BUYERS
The court shall decree the rescission claimed, unless there OF REAL ESTATE ON INSTALLMENT
be just cause authorizing the fixing of a period. PAYMENTS. (Rep. Act No. 6552)
This is understood to be without prejudice to the rights of Section 1. This Act shall be known as the "Realty
third persons who have acquired the thing, in accordance Installment Buyer Act."
with articles 1385 and 1388 and the Mortgage Law.
(1124) Section 2. It is hereby declared a public policy to protect
buyers of real estate on installment payments against
Principle of Anticipatory Breach onerous and oppressive conditions.
→ right of the seller to rescind the contract of a sale of
immovable property when a circumstance gives rise to Section 3. In all transactions or contracts involving the
a reasonable ground to fear that such property and its sale or financing of real estate on installment payments,
price might be lost including residential condominium apartments but
excluding industrial lots, commercial buildings and sales
IV. When Vendee in a Sale of Immovable Property to tenants under Republic Act Numbered Thirty-eight
May Still Pay Despite the Expiration of the Period to hundred forty-four, as amended by Republic Act
Pay Numbered Sixty-three hundred eighty-nine, where the
buyer has paid at least two years of installments, the
Article 1592. In the sale of immovable property, even buyer is entitled to the following rights in case he defaults
though it may have been stipulated that upon failure to in the payment of succeeding installments:
pay the price at the time agreed upon the rescission of the
contract shall of right take place, the vendee may pay, (a) To pay, without additional interest, the unpaid
even after the expiration of the period, as long as no installments due within the total grace period earned by
demand for rescission of the contract has been made upon him which is hereby fixed at the rate of one month grace
him either judicially or by a notarial act. After the period for every one year of installment payments made:
demand, the court may not grant him a new term. (1504a) Provided, That this right shall be exercised by the buyer
only once in every five years of the life of the contract
1st: this contemplates a contract of sale of an immovable and its extensions, if any.
property with a stipulation in the contract that failure to
pay the price at the time agreed upon will cause the (b) If the contract is canceled, the seller shall refund to the
rescission of the contract buyer the cash surrender value of the payments on the
property equivalent to fifty per cent of the total payments
2nd: this is only applicable to an absolute contract of sale made, and, after five years of installments, an additional
five per cent every year but not to exceed ninety per cent
3rd: this permits the buyer to pay, even after the expiration of the total payments made: Provided, That the actual
of the period, as long as no demand for rescission of the cancellation of the contract shall take place after thirty
contract has been made upon him either judicially or by days from receipt by the buyer of the notice of
notarial act. cancellation or the demand for rescission of the contract
by a notarial act and upon full payment of the cash
4th: this applies also to a contract of absolute sale of surrender value to the buyer.
immovable property where no stipulation for automatic
rescission is made Down payments, deposits or options on the contract shall
be included in the computation of the total number of
installment payments made.lawphi1™