OBLIGATIONS OF THE VENDOR

1. The principal obligations of the vendor.

Principal obligations of the vendor.(Art. 1495)
a. To transfer ownership of the determinate thing
b. To deliver the thing
c. To warrant against eviction and hidden defects
d. To preserve the thing from perfection to delivery with proper diligence
e. To pay for the expenses for the execution and registration of the deed of sale, unless
there is stipulation to the contrary.
2. How is ownership of the thing transferred to the vendee?
The ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him (actual or constructive) or in any other manner signifying an agreement
that the possession is transferred from the vendor to the vendee. (Art. 1496)
3. So that ownership is transferred, must the vendor have ownership at the time of
perfection of the contract?
No, in order to validly transfer the ownership of the thing sold the vendor must have the
right to transfer it upon the actual or constructive delivery thereof.
4. What are the kinds of delivery?
a. By actual or real delivery- The thing sold shall be understood as delivered, when it is
placed in the control and possession of the vendee.
b. By constructive or legal delivery-
1) legal formalities. (Art. 1498, Civil Code).
2) symbolical tradition or traditio simbolica (such as the delivery of the key of
the place where the movable sold is being kept). (Art. 1498, par. 2, Civil
Code).
3) traditio longa manu (by mere consent or agreement) if the movable sold
cannot yet be transferred to the possession of the buyer at the time of the
sale. (Art. 1499, Civil Code).
4) traditio brevi manu (if the buyer had already the possession of the object
even before the purchase, as when the tenant of a car buys the car, that is,
his possession as an owner). (Art. 1499, Civil Code).
5) traditio constitutum possessorium (opposite of traditio brevi manu)
possession as owner changed, for example, to possession as a lessee.

c. By delivery in any other manner signifying an agreement that the possession is

transferred to the vendee. - Quasi-tradition — delivery of rights, credits, or
incorporeal property, made by:
1) placing titles of ownership in the hands of a lawyer; or
2) allowing the buyer to make use of the rights. (Art. 1501, Civil Code).

5. Does actual or real delivery always pass ownership to the vendee?

No, according to Art. 1478, Civil Code: “The parties may stipulate (expressly or implied)
that ownership in the thing shall not pass to the purchaser until he has fully paid the
price.”
6. What is a sale or return?
 It is a contract by which property 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.
7. When is a sale considered to be a "sale on trial or approval”?
This is a sale really dependent on the quality of the goods; it is a sale with suspensive
condition. the buyer may in time become the owner under the conditions specified in
the law; otherwise, the seller is still the owner.
8. Within what time shall the buyer notify the seller of his approval?
Period within which buyer must signify his acceptance commences to run only when all
the parts essential for the operation of the object have been delivered.
9. In a sale of specific goods, when does ownership pass to the buyer?
General Rule: Ownership of the goods sold passes to the buyer upon their delivery to
the carrier
10. What are the exceptions to the rule that delivery to the carrier is delivery to the buyer?
Instances When Seller Is Still Owner Despite Delivery
(a) Express stipulation.
(b) If under the bill of lading the goods are deliverable to seller or agent or their order.
(Reason –– the buyer cannot get.)
[NOTE: This is, of course, not conclusive. Thus, although the bill of lading was in the
sellers name, still if it is agreed in the contract that the buyer should receive and dispose
of the goods, it is evident that the buyer generally cannot do this unless previously
ownership has been transferred to him.]
(c) If bill of lading, although stating that the goods are to be delivered to buyer or his
agent, is KEPT by the seller or his agent. (Reason –– The buyer also cannot get.)
(d) When 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 exchange sent along with it.
But of course innocent third parties (innocent holders and purchasers for value) should
not be adversely affected.

11. Can a seller who has no ownership over the thing sold transfer ownership to the buyer?
General Rule: Where goods are sold by a person who is not the owner thereof, and who
does not sell them under authority or with the consent of the owner, the buyer acquires
no better title to the goods than the seller had (Art. 1505)
12. What are the exceptions to the above rule?
Exception:
a. The owner of the goods is by his conduct precluded from denying the seller's authority
to sell.
b. The provisions of any factors' act, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true owner
thereof;
c. The validity of any contract of sale under statutory power of sale or under the order
of a court of competent jurisdiction;
d. Purchases made in a merchant’s store, or in fairs, or markets, in accordance with the
Code of Commerce and special laws.
e. Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided
 he buys them in good faith, for value, and without notice of the seller’s defect of title.
(Art. 1506)
f. Where the seller subsequently acquires title

13. If the seller has a voidable title to the goods, will the buyer acquire a good title thereto?
Where the seller of goods has a voidable title thereto, but his title has not been avoided
at the time of the sale, the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller’s defect of title.
14. Under the obligation of the seller to delivery, who shall bear the expenses in order to
place the thing in a deliverable state?
The seller bears the expenses unless otherwise stipulated.
15. What are the options of the buyer in the event he seller delivers a quantity of goods less
than he contracted to sell?
a. When the quantity delivered is less than that which the parties had agreed upon, the
buyer may:
i. Reject the goods
ii. Accept the goods
16. What are the options of the buyer in case the seller delivers a quantity of goods larger
than he contracted to sell?
b. When the quantity delivered is more than that which the parties agreed upon, the
buyer may:
i. Accept the goods agreed upon and reject the rest.
ii. Accept the whole of the goods delivered and pay for them at the contract rate.
iii. Reject the whole of the goods if they are indivisible.
17. In the event the seller delivers to the buyer the goods he contract to sell mixed with
goods of a different description not included in the contract, what remedies has the
buyer?
c. When the seller delivers agreed upon but are mixed with goods of different
description, the buyer may:
i. Accept he goods agreed upon and reject the rest, if the sale is divisible.
ii. Reject the whole of the goods, if the sale is indivisible.
18. When shall delivery of goods by the seller to the carrier be considered delivery to the
buyer?
GENERAL RULE: Delivery to carrier is delivery to buyer, if it is in the duty of the seller to
send the goods to the buyer.
19. What are the exceptions to the above rule?
They are those provided for in paragraphs 1, 2, and 3 of Article 1503 and when a
contrary intent appears, that is, the parties did not intend the delivery of the goods to
the buyer through the carrier. The seller is not responsible for misdelivery by the carrier
where the carrier was chosen and authorized by the buyer to make the delivery
20. Define these terms: FOB and CIF

a. C.I.F. (cost, insurance, freight) - Since the selling price includes insurance and freight,
it is understood that said insurance and freight should now be paid by the seller.
b. F.O.B. (free on board) - the sale may be:

i. f.o.b. at the place of shipment - buyer must pay the freight

 ii. f.o.b. alongside (the vessel) - the moment the goods are brought alongside the
vessel, the buyer must pay for the freight or expenses
iii. f.o.b. at the place of destination - the seller must pay the freight, since the
contract states “free on board till destination
21. When is the vendor not bound to deliver the thing sold?
The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him
the price, or if no period for the payment has been fixed in the contract. (Art 1524)
22. Who is considered an unpaid seller?
Unpaid seller:
a. When the whole of the price has not been paid or tendered; and
b. When a bill of exchange or other negotiable instrument has been received as a
conditional payment and the condition was broken by reason of dishonor, insolvency
of the buyer or otherwise. (Art. 1525)
23. What are the remedies of an unpaid seller?
Rights of an unpaid seller
a. Possessory lien on the goods or right to retain them for the price while he is in
possession of them;
b. In case of insolvency of the buyer, right of stoppage in transitu after he has parted
with the possession of them;
c. Right of resale; and
d. Right to rescind sale.
24. Under what cases may the unpaid seller's possessory lien be exercised?
Instances where the unpaid seller may retain the goods
a. Where the goods have been sold without any stipulation as to credit
b. Where the goods have been sold on credit, but the term of credit has expired
c. Where the buyer becomes insolvent
 The seller may exercise his right of lien or retention notwithstanding that he is in
possession of the goods as agent or bailee for the buyer (Art. 1527)
25. Does the unpaid seller lose his lien if he makes part delivery of the goods?
The unpaid seller of goods, having lien thereon, does not lose his lien by reason only that
he has obtained judgment for the price of the goods (Art. 1529)
26. Under what circumstances does an unpaid seller of goods lose his lien thereon?
a. When he delivers the goods to a carrier or other bailee for transmission to the buyer
without reserving ownership in the goods or the right to possession thereof;
b. When the buyer or his agent lawfully obtains possessions of the goods; and
c. By waiver thereof.
27. What are the requisites so that the unpaid seller can exercise his right of stoppage in
transitu?
a. The seller must be unpaid
b. The buyer must be insolvent
c. The goods must be in transit
d. The seller must either actually take possession of the goods sold or give notice of his
claim to the carrier or other person in possession
e. The seller must surrender the negotiable document of title, if any, issued by the carrier
or bailee
 f. The seller must bear the expenses of delivery of the goods after the exercise of the
right.
28. How does an unpaid seller stop the goods in transit?
The unpaid seller may exercise his right of stoppage in transitu either by:
a. obtaining actual possession of the goods, or
b. giving notice of his claim to the carrier or other bailee in whose possession the goods
are.
29. Under what cases is a resale of the goods allowed?
When resale is allowable (Art. 1533)
a. Where the goods are perishable in nature
b. When the right to resell is expressly reserved in case the buyer should make a default;
and
c. Where the buyer delays in the payment of the price for an unreasonable time.
30. Is notice of resale essential to make the resale valid?
Not essential to the validity of resale that notice of an intention to resell the goods be
given by the seller to the original buyer but giving or failure to give such notice shall
be relevant in any issue involving the question whether the buyer had been in default
for an unreasonable time before the resale was made.
31. What are the effects of resale?
Effect of resale
a. The seller is not liable for any profit made by such resale, but may recover from the
buyer damages for any loss occasioned by the breach of the contract of sale.
b. It is not essential to the validity of resale that notice of an intention to resell the goods
be given by the seller to the original buyer. But where the right to resell is not based
on the perishable nature of the goods or upon an express provision of the contract of
sale, the giving or failure to give such notice shall be relevant in any issue involving the
question whether the buyer had been in default for an unreasonable time before the
resale was made.
c. It is not essential to the validity of a resale that notice of the time and place of such
resale should be given by the seller to the original buyer.
d. The seller is bound to exercise reasonable care and judgment in making a resale, and
may make a resale either by public or private sale. He cannot, however, directly or
indirectly buy the goods. (Art. 1533)

32. Under what circumstances may the unpaid seller exercise his right to rescind?
Instances where the unpaid seller has the right of rescission
a. Where he expressly reserved the right to do so in case the buyer should make default;
and
b. Where the buyer has been in default in the payment of the price for unreasonable
length of time.

33. Is the unpaid seller's right of lien or stoppage in transitu affected by any sale or
disposition of the goods by the buyer?
The unpaid seller’s right of lien or stoppage in transitu is not affected by any sale, or
other disposition of the goods which the buyer may have made, unless the seller has
assented thereto.
34. In case of sale on credit, when has the vendor the right to withhold delivery?
the vendor may not be compelled to make delivery, in case the vendee should lose the
right to make use of the term as provided in Article 1198 of the Civil Code and such
vendee has not yet paid the price.
35. In what condition shall the thing object of the contract be delivered to the vendee?
The vendor is bound to deliver the thing sold and its accessions and accessories in the
condition in which they were upon the perfection of the contract.
36. In the sale of real estate, when is the vendor said to have delivered the thing?

37. In the event the vendor cannot deliver everything as mentioned in the contract, what
are the remedies of the vendee?
38. When is the vendee entitled to rescind the sale?
39. Under what cases may the vendee choose proportionate reduction of the price?
40. Should the vendor deliver a greater area or number in the immovable than that stated
in the contract, what is the right of the vendee?
41. In case of sale of real estate for a lump sum and not at the rate of a certain sum for a
unit of measure or number, what rules shall apply in case of either a greater or lesser area
or number than that stated in the contract?
42. If the sale involves 2 or more immovables for a single price which, aside from the
boundaries being mentioned, its area or number is designated in the contract, when is the
vendor considered to have complied with his obligation to deliver?
43. What are the rights of the vendee in case the vendor could not deliver everything
designated in the contract?
44. Within what time shall the action for either rescission of the contract or the
proportionate reduction of the price expire?
45. In case of sale of the same property to 2 or more vendees, to whom shall ownership of
the thing pertain?
46. Where the obligation of either the vendor or the vendee to a contract of sale is subject
to any condition which is not performed, what are the remedies of the parties?
47. What are the kinds of warranties in a contract of sale?
48. Define express warranty
49. Is an affirmation of the value of the thing or the seller's expression of opinion
considered express warranty?
50. What are the implied warranties in a contract of sale?
51. Does the rule on implied warranty apply to all persons who make a sale?
52. What is eviction?
53. What are the essential requisites of the warranty against eviction?
54. In the event the vendee is evicted by final judgment of the thing he bought, can he hold
the vendor liable for eviction even though nothing was agreed upon in the contract
regarding the warranty against eviction?
55. Are there cases where the vendor shall not be liable for eviction?
56. Does this warranty against eviction apply to judicial sales?
57. What is the effect of the stipulation exempting the vendor from the obligation to
answer for eviction?
58. What are the kinds of waiver of eviction?
59. In case eviction takes place but the vendee has made a consciente waiver, can he hold
the vendor liable?
60. In the event eviction takes place but the vendee has made an intencionada waiver, can
he hold the vendor liable?
61. In case the warranty against eviction has been expressly agreed upon or nothing has
been stipulated on this point, but eviction takes place, what can the vendee demand from
the vendor?
62. What are the rights of the vendee in case of partial eviction?
63. In case the immovable sold is encumbered with any non-apparent burden or servitude,
what are the rights of the vendee?
64. What circumstances must be present to enable the vendee to avail of any of the above
remedies?
65. What are the remedies available to the vendee should the immovable sold be
encumbered with any non-apparent servitude?
66. When shall these alternative remedies be not available to the vendee?
67. What circumstances must be present so that the vendor shall be responsible for his
warranty against hidden defects?
68. For what defects is the vendor not liable?
69. What are the implied warranties in the case of sale of goods?
70. When does the implied warranty as to fitness or quality apply?
71. When does the implied warranty of merchantability apply?
72. warranty for fitness vs. warranty of merchantability
73. Is there an implied warranty in the case of a sale of specified article under its patent or
trade name?
74. What warranty exists in case the sale is a sale by sample?
75. Shall the vendor be responsible for any hidden defects in the thing sold, even though he
was not aware thereof?
76. What are the alternative remedies of the buyer to enforce the warranty?
77. Within what time shall the vendee bring either the action to withdraw from the contract
or the action to demand proportionate reduction of the price?