CHAPTER 1 - N ATU RE AN D FORM OF CON TRACT of contract are present.

Additionally, if the law requires that the contract

may be in some form in order to be valid, or enforceable, or that contract be
Article 1458 - By the contract of sale one of the contracting parties obligates proved in a certain way, that requirement is absolute and indispensable.
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. Article 1483 - Subject to the provisions of the Statute of Frauds and of any other
A contract of sale may be absolute or conditional. applicable statute, a contract of sale may be made in writing, or by word of
Parties in contract of sale: mouth (orally), or partly in writing and partly by word of mouth (orally), or may
Vendor/Seller - obligates himself to deliver the determinate thing be inferred from the conduct of the parties.
Vendee/Buyer - obligates himself to pay a price certain in money If Art. 1318 is present, - that is there is no contract unless the
following requisites concur: 1. Consent of the contracting parties; 2. Object
Price certain in money or its equivalent - refers to the legal tender and any other certain which is the subject matter of the contract; 3. Cause of the obligation
mercantile documents such as promissory notes and any other negotiable which is established; - there is a contract of sale.
instruments 2. Nominate - there is a special name given by the law
3. Bilateral - two parties to the agreement and both parties are reciprocally
Characteristics of contract of sale: obligated to perform an obligation arising from the contract of sale
1. Consensual - perfected by mere consent of the parties; 4. Commutative - the consideration of one is equivalent to the consideration of
Exception: the other. As contrast with aleatory contracts.
1. If the sale is made by an agent, the authority of the agent must be in Aleatory contracts - the consideration is not equal, but even if subject to
writing, otherwise the contract of sale is considered void. certain conditions or contingency, the contract is already valid notwithstanding
2. If in case the agreement or contract of sale falls within the coverage of the fact that the condition may or may not happen.
statute of frauds - wherein the contract must be in writing, otherwise the If contract of sale is subject to a condition - the happening of the condition
contract is unenforceable. will give rise to a contract.
Cases covered by Statute of Frauds: Condition imposed upon the perfection of the contract.
A. Sale of personal property not having a value of not less than The existence, or effectivity of the contract is dependent upon the
500 pesos. happening of the suspensive condition.
B. Sale of real property or any interest therein. Condition imposed in the obligations arising in the contract of sale.
C. Sale which is not to be performed within a year from the The contract is valid but the parties are given the following options:
making thereof. 1. To refuse to proceed with the contract if the condition is not
Exception to the statute: if in case there is already a delivery, or there is a fulfilled
payment, there is already a ratification of unenforceable contract therefore it 2. To waive the condition and proceed with the contract of sale
will removed from Statute of Frauds. 5. Onerous - there is a consideration and both parties are required to render the
As provided by the Art. 1356, contract shall be obligatory in whatever consideration
form they may have been entered into provided all the essential requisites 6. Principal - it does not need any other contract to exist
Elements of Contract of Sale: Article 1475 - The contract of sale is perfected at the moment there is a meeting
A. Essential Elements of minds upon the thing which is the object of the contract and upon the price.
- consent, object, consideration - in the absence of any of the three, From that moment, the parties may reciprocally demand performance, subject to
consider the contract inexistent or void. the provisions of the law governing the form of contracts.
B. Accidental Elements Seller may demand for the payment and buyer may demand for the delivery
- product of the stipulation of the parties, e.g., mode of payment, and transfer of ownership. But payment and delivery are not requisites for the
interests perfection of a contract, these are required for the consummation of the contract
C. Natural Elements of sale.
- inherent in every contract, unless waived by the parties to the Stages of contract:
agreement, e.g., warranty against eviction, warranty against hidden defects 1. Negotiation - bargain for the terms and conditions of the contract
Note: Failure to concur any accidental and natural elements do not render the 2. Perfection - acceptance of negotiation
contract of sale void. It will not affect the validity of the contract, but it will affect 3. Consummation - obligations arising from the contract is already
the fulfillment, or effectivity of the contract. performed

Essential Elements - COC ( Consent, Object, Consideration) Article 1479 - A promise to buy and sell a determinate thing for a price certain
1. CON SEN T - there is consent if there is a manifestation of the offer and is reciprocally demandable.
the acceptance upon the thing which are to constitute the contract of sale. An accepted unilateral promise to buy or to sell a determinate thing for a price
Offer must be certain, and acceptance must be absolute. certain is binding upon the promissor if the promise is supported by a
- If offer is floating, that is, there is no acceptance yet, the offer can be consideration distinct from the price.
withdrawn anytime.
- If the offer is subject to a term, or a period, general rule is, the offer can In the first paragraph, there is mutual promise, which is as good as a
still be withdrawn anytime. However, the withdrawal must not be arbitrary perfected contract of sale, and parties may reciprocally demand the performance
otherwise the offerer may be held liable for damages. of obligation.
- If the offer is subject to a condition, the happening or non-happening of In the second paragraph, there is only a unilateral accepted promise,
such will extinguish the offer, or will give rise to the offer. wherein the promissor can withdraw anytime because it is not binding upon the
- If the offer has no period, no condition, the validity of the offer is promissor.
dependent upon the circumstances of the case. In correlation to Art. 1324, when the offerer has allowed the offeree a
As per Art. 1323, an offer becomes ineffective upon the death, civil certain period to accept, the offer may be withdrawn at anytime before
interdiction, insanity, or insolvency of either party before acceptance is acceptance by communicating such withdrawal, except when the option is
conveyed. founded upon a consideration, as something paid or promised.
- If there is an offer, and there is a counter-offer, the counter-offer must be Option - privilege itself given to the offeree to accept an offer within a
accepted otherwise there is no perfected contract of sale. certain period.
Option period - period given within which the offeree must decide whether
or not to enter into the principal contract. its specie
Option money - money paid or promised to be paid as a distinct Under fortuitous event, if the thing to be delivered is a specific thing, the
consideration for an option contract. loss of the thing by such event, as long as there is no delay, or the debtor has no
2. OBJECT obligation to two or more person having the same interest, obligation is
A. Rights - if transmissible, and lawful, it can be a subject of a contract extinguished, and no party will bear the loss of the thing due.
of sale. But if the thing to be delivered is a generic thing, loss of the thing by reason
Note: Contract of future inheritance is void, as expressly provided by the law. of same event will not extinguish the obligation, for the seller may still be able to
Services can not be the subject of contract of sale as ownership cannot be deliver the thing as long as it is from the same class, or kind, on the basis of the
transferred through service. principle genus nunquam perit - genus never perishes.
B. Goods/Things Note: It is not required that at the time of the perfection of the contract the object
Requisites: is already determinate, as long as it can be capable of being made determinate
1. It must be lawful. without the need of new or further agreement between the parties.

Article 1459 - The thing must be licit and the vendor must have a right to Article 1461 - Things having a potential existence may be the object of the
transfer the ownership thereof at the time it is delivered. contract of sale.
Ownership, neither delivery and payment, is not required at the time of The efficacy of the sale of a mere hope or expectancy is deemed subject to the
perfection, because contract of sale do not only pertain to present things, but condition that the thing will come into existence.
also to future things (e.g., crops planted). The sale of a vain hope or expectancy is void.
Delivery and payment is only required for the consummation of the First paragraph deals with sale of future things, or expected things - emptio
obligation, while ownership is required at the time of delivery. If ownership is not rei speratae - if the expected thing will not come into existence, there is no
available upon delivery, the general principle nemo dat quod non-habet - one contract to speak of, and the buyer is not required to make payment.
cannot transmit or dispose of that which he does not have, - is violated, the sale Second paragraph deals with sale of hope or expectancy - emptio spei - this
is already considered void, as there is already the absence of the object. is a sale of present things and the contract is already valid, thus the buyer is
2. It must be determinate. required to make the payment.
Note#1: If the intention of the parties that the sale is dependent upon the
Article 1460 - A thing is determinate when it is particularly designated or existence of that thing, it is emptio rei speratae. If the intention is to treat the
physically segregated from all others of the same class. contract as valid and binding notwithstanding the fact that the hope or
The requisite that a thing be determinate is satisfied if at the time the contract is expectancy will come to existence, it is emptio spei.
entered into, the thing is capable of being made determinate without the Note#2: In case of doubt, the presumption is in favor of emptio rei speratae
necessity of a new or further agreement between the parties. which is more in keeping with the commutative characteristic of the contract.
Specific or determinate thing - particularly deisgnated or physically segregated Cases where emptio spei is considered void:
from all others of the same class, it is identified by its individuality 1. If it a sale of vain hope or expectancy.
Generic or indeterminate thing - belongs to same kind or specie, it is identified by 2. Parties intended that if the hope or expectancy will not come into
 existence, the sale is not valid.
But if after determining the true number,
Article 1462 - The goods which form the subject of a contract of sale may be weight or measure of the goods is less than the
either existing goods, owned or possessed by the seller, or goods to be number, weight or measure of what was sold,
manufactures, raised, or acquired by the seller after the perfection of the 100% the buyer will become the owner of the whole
contract of sale, in this Title called “future goods.” mass, and the seller is required to pay the
There may be a contract of sale of goods, whose acquisition by the seller depends deficiency.
upon a contingency which may or may not happen.
Goods that can be the object of the contract of sale:
- Existing goods - goods owned or possessed by the seller Note: Sale of things under litigation, without the approval of the court, or without
- Future goods - to be manufactured, raised, or acquired. the consent of the litigants, the contract is considered as rescissible.

Article 1463 - The sole owner of a thing may sell an undivided interest therein. Article 1465 - Things subject to a resolutory condition may be the object of the
contract of sale.
Article 1464 - In the case of fungible goods, there may be a sale of an undivided Suspensive Condition - the happening of the event will give rise to the obligation,
share of a specific mass, though the seller purports to sell and the buyer to buy a and if in case the event will not happen, there is no juridical or legal tie.
definite number, weight or measure of the goods in the mass, and though the The right of the party over the suspensive condition is only a mere
number, weight or measure of the goods in the mass is undetermined. By such a expectancy.
sale the buyer becomes owner in common of such a share of the mass as the Resolutory Condition - the happening of the event will extinguish the obligation,
number, weight, or measure of the mass. If the mass contains less than the and if in case the condition will not happen, there will be consolidation of
number, weight or measure bought, the buyer becomes the owner of the whole ownership.
mass and the seller is bound to make good the deficiency from goods of the same The right of the party is already acquired.
kind and quality, unless a contrary intent appears. 3. PRICE CERTAIN IN M ON EY OR ITS EQU IVALEN T
Fungible goods - refers to goods which cannot be used without being The price must be certain and definite.
consumed.
Article 1469 - In order that the price may be considered certain, it shall be
sufficient that it be so with reference to another thing certain, or that the
If buyer wants to buy 40% of the fungible goods, determination thereof be left to the judgment of a specified person or persons.
e.g., sacks of rice, he will become a co-owner, Should such person or persons be unable or unwilling to fix it, the contract shall
thus there will be a co-ownership. be inefficacious, unless the parties subsequently agree upon the price.
60% If the third person or persons acted in bad faith or by mistake, the courts may fix
the price.
Where such third person or persons are prevented from fixing the price or terms
by fault of the seller or the buyer, the party not in fault may have such remedies the will of one of them - otherwise, it is considered void. However, if the other
against the party in fault as are allowed the seller or the buyer, as the case may party accepted the price fixed by the other party, the price is already considered
be. valid and binding upon the parties.
The price is certain if: The owner of the thing is given the right to impose for the price, whether or
1. Agreed upon by the parties. not the price is reasonable, it is dependent upon the buyer to accept.
2. If in case with reference to another thing that is certain.
3. If in case the determination is left with the judgment of a third person. Article 1474 - Where the price cannot be determined in accordance with the
i. The determination is communicated to the seller and the buyer preceding articles, or in any other manner, the contract is inefficacious.
ii. The determination is not manifestly inequitable However, if the thing or any part thereof has been delivered to and appropriated
Exception: If the third person is unable to fix the price, the contract by the buyer, he must pay a reasonable price therefor. What is a reasonable price
shall become ineffective, as if no price has been agreed upon - unless the is a question of fact dependent on the circumstances of each particular case.
parties subsequently agree upon the price.
Note: If the third person or persons acted in bad faith or by mistake, Article 1470 - Gross inadequacy of price does not affect a contract of sale,
the court shall fix the price. except as it may indicate a defect in the consent, or that the parties really
In the third paragraph, if in case the third person or persons are intended a donation or some other act or contract.
prevented from fixing the price by reason of one of the conduct of the Exceptions to the rule, where gross inadequacy is considered is void:
parties, the innocent party can run after the party who is liable for the 1. If there is a defect in the consent.
prevention. 2. If in case the parties really intended the donation or some other
contract - onerous donation.
Article 1472 - The price of securities, grain, liquids, and other things shall also Ex: Suppose X painted Y’s room, the latter sold to X a motorcycle
be considered certain, when the price fixed is that which the thing sold would as a consideration. There is an onerous donation.
have on a definite day, or in a particular exchange or market, or when an 3. If the price is shocking to the conscience of the court.
amount is fixed above or below the price on such day, or in such exchange or - If in case a reasonable man would not have agreed to the price.
market, provided said amount be certain. Ex: A house worth 1, 000, 000 pesos was sold for 50, 000 pesos.
Note: If in case the price of the reference is not certain, there is no price to speak
of, therefore the contract of sale is void. Art. 1466 - In construing a contract containing provisions characteristic of both
the contract of sale and of the contract of agency to sell, the essential clauses of
Article 1473 - The fixing of the price can never be left to the discretion of one of the whole instrument shall be considered.
the contracting parties. However, if the price fixed by one of the parties is Contract of Sale vs. Contract of Agency
accepted by the other, the sale is perfected. If in case a contract contains both the characteristics of contract of sale and
If the fixing of the price is left with one of the contracting parties, the contract of agency to sell, in order to determine what contract is entered into by
principle of mutuality of contract is violated, as per Art. 1308, - the contracts the parties, take into consideration the clauses of the whole instrument in order
must bind both contracting parties; its validity or compliance cannot be left to to construe what is the true intention of the parties.
 In interpretation of contracts, “If there is no doubt as to the words of the - In a contract of sale, some contracts may fall within the scope of the Statute
contract, the words shall be applied literally. However, if there is doubt between of Frauds, but in a contract for a piece of work, it is not within the Statute of
the words and the intention of the parties, the intention shall prevail.” Frauds, hence it is demandable and enforceable regardless of its form.
- In a contract of sale, once there is a delivery, there is a transfer of
ownership, in a case of agency to sell, even though it is delivered to an agent, Art. 1468 - If the consideration of the contract consists partly in money, and
there is no transfer of ownership. partly in another thing, the transaction shall be characterized by the manifest
- The parties in a contract of sale are seller and buyer, the parties in an intention of the parties. If such intention does not clearly appear, it shall be
agency to sell are principal and agent. considered a barter if the value of the thing given as a part of the consideration
- In a contract of sale, the seller warrants the thing sold, but in the case of exceeds the amount of the money or its equivalent; otherwise, it is a sale.
agency to sell, the agent does not make any warranty as long as the agent is Contract of Sale vs. Contract of Barter or Exchange
acting in the scope of his authority. In determination if it is a contract of sale or a contract of barter, it is a
- In a contract of sale, once there is a delivery, as a rule, the buyer cannot requirement to ascertain what is the intention of the parties based on the terms
return the subject matter of the sale, however in an agency to sell, the agent is of the contract.
given the right to return the subject matter of the contract of agency to sell. - In a contract of sale, it uses the terms “vendor,” “vendee,” “buyer,” and
- In a contract of sale, buyer pays for the price, in the case of agency to sell, “seller.” In a contract of barter, it uses the term “exchange.”
the agent does not pay for the price. If the agreement provides that the agent is If the intention of the parties cannot be ascertained, follow the rules:
required to make the payment, that is already considered a contract of sale 1. If the value of the thing given is more than the value of money, it is
notwithstanding the fact that there is a commission. considered as a contract of barter.
- In a contract of sale, there is freedom with respect to the terms and 2. If the value of the thing given is less than the value of money, it is
conditions of the parties, but in an agency to sell, there is none. The agent is considered as a contract sale.
bound to the instructions of the principal. 3. In remote circumstances where they are considered equal, it is a
contract of sale.
Art. 1467 - A contract for the delivery at a certain price of an article which the
vendor in the ordinary course of his business manufactures or procures for the Art. 1476 - In the case of a sale by auction:
general market, whether the same is on hand at the time or not, is a contract of 1. Where goods are put up for sale by auction in lots, each lot is the subject
sale, but if the goods are to be manufactured specially for the customer and upon of a separate contract of sale.
his special order, and not for the general market, it is a contract for a piece of 2. A sale by auction is perfected when the auctioneer announces its
work. perfection by the fall of the hammer, or in other customary manner. Until such
Contract of Sale vs. Contract for a Piece of Work announcement is made, any bidder may retract his bid; and the auctioneer may
- In a contract of sale, the subject matter is procured and manufactured in withdraw the goods from the sale unless the auction has been announced to be
the ordinary course of business and for the general market, whether or not that without reserve.
is available, in a contract for a piece of work, the subject matter is specially 3. A right to bid may be reserved expressly by or on behalf of the seller,
manufactured upon the request of a customer. unless otherwise provided by law or by stipulation.
 4. Where notice has not been given that a sale by auction is subject to a Art. 1163 states that “every person obliged to give something is also obliged
right to bid on behalf of the seller, it shall not be lawful for the seller to bid to take care of it with the proper diligence of a good father of a family, unless the
himself or to employ or induce any person to bid at such sale on his behalf or for law or stipulation of the parties requires another standard of care.”
the auctioneer, to employ or induce any person to bid at such sale on behalf of Art. 1164 states that “the creditor has a right to the fruits of the thing from
the seller or knowingly to take any bid from the seller or any person employed the time the obligation to deliver it arises. However, he shall acquire no real right
by him. Any sale contravening this rule may be treated as fraudulent by the over it until the same has been delivered to him.”
buyer. Delivery is an essential requirement to the transfer of ownership.
Illustration: Art. 1165 states that “when what is to be delivered is a determinate thing,
X did not pay for his tax, as a result, the BIR collected his cars and was the creditor, in addition to the right granted him by Article 1170, may compel
subject to an auction sale. Assuming X has a total of 5 cars, if it was subject to an the debtor to make the delivery. If the thing is indeterminate or generic, he may
auction sale, each car will be subject to a separate contract of sale if sold, unless ask that the obligation be complied with at the expense of the debtor. If the
it was stipulated that five cars will be sold as one. obligor delays, or has promised to deliver the same thing to two or more persons
As a general rule, X, being the owner, as well as the seller in an auction sale, who do not have the same interest, he shall be responsible for any fortuitous
cannot bid. The seller can only bid if his right to bid is expressly granted to him, event until he has effected the delivery.”
and his right must be accompanied by a notification to the bidders that the seller - If in case before perfection, there is loss or deterioration, seller bears the
has the right to bid. loss, res perit domino - the thing perishes with the owner.
If in case that right is not granted, and no notice is given to the bidders, the - At the time of perfection, there is loss or deterioration, the seller bears the
seller cannot bid. He can neither employ a third person to bid on his behalf, or loss, res perit domino, and there is no contract since subject is inexistent.
even the auctioneer cannot employ a third person to bid on behalf of the seller. - If there already a perfected contract of sale, before delivery, there is loss or
The rule is that, the buyer may treat the sale as fraudulent, and his remedy is deterioration, ascertain who is responsible for the loss as per Arts. 1163 - 1165
annulment. if it is the seller, the seller bears the loss, if it is the buyer, the buyer bears the
loss, and if the seller has assumed the risk, or the seller is in delay, or has
Art. 1480 - Any injury to or benefit from the thing sold, after the contract has promised to deliver the same thing to two or more persons not having the same
been perfected, from the moment of the perfection of the contract to the time of interest, it is the seller who bears the loss.
delivery, shall be governed y articles 1163 to 1165, and 1262. - If there is already a perfected contract of sale, before delivery, there is a
This rule shall apply to the sale of fungible things, made independently and for a loss or deterioration by reason of fortuitous event or force majeure, there are
single price, or without consideration of their weight, number, or measure. two views. Under the first view, the seller bears the loss under the principle of
Should fungible things be sold for a price fixed according to weight, number, or res perit domino. Under the second view, it is the buyer who bears the loss,
measure, the risk shall not be imputed to the vendee until they have been under the roman law, there is reciprocal obligations, and the seller’s obligation is
weighed, counted, or measured, and delivered, unless the latter has incurred in separate and distinct to that of the buyer, so if the obligation of the seller is loss,
delay. or is already extinguished by reason of force majeure, the obligation of the buyer
There is already a perfected contract of sale, and before the delivery, there remains, which is to pay for the price.
is loss, deterioration, or injury. Art. 1262 states that “an obligation which consists in the delivery of a
determinate thing shall be extinguished if it should be lost or destroyed without Sale of Personal Property by Installment
the fault of the debtor, and before he has incurred in delay. When by law or Remedies available to the parties of the agreement:
stipulation, the obligor is liable even for fortuitous events, the loss of the thing Recto Law - otherwise known as Installment Sales Law, and its main purpose is
does not extinguish the obligation, and he shall be responsible for the damages. to prevent potential abuses by the seller in the event that the buyer is unable to
The same rule applies when the nature of obligation requires assumption of make further installments for a property.
risk.” Illustration:
If in case X bought a car in installment, and eventually, was not able to
Art. 1481 - In the contract of sale of goods by description or by sample, the pay on the first, or second, or third installment, the vendor, Y, may compel
contract may be rescinded if the bulk of the goods delivered do not correspond X for the exact fulfillment of the obligation. This remedy can only be applied
with the description or the sample, and if the contract be by sample as well as by in case there is only one default.
description, it is not sufficient that the bulk of goods correspond with the sample Note: Chattel mortgage means recording of personal property as security for the
if they do not also correspond with the description. performance of an obligation.
The buyer shall have a reasonable opportunity of comparing the bulk with the Assuming X, upon his purchase, Y executed a chattel mortgage, the car
description of the sample. being the subject matter, and X defaulted on two or more installments, Y is
Sale by sample, sale by description, sale by sample and description. given the right to foreclose the car that is a chattel mortgage constituted on
Sale by Sample - the goods delivered must conform with the sample. the thing sold, and he can no longer recover the deficiency from X.
Sale by Description - the goods delivered must conform with the description. Maceda Law - pertains to sale of real property by installment, applicable only to
Sale by Sample and Description - it must not only conform with the sample, sale of residential lots.
as well as with the description. Important provision under Maceda Law:
- If in case it does not correspond to the sample, neither to the description, 1. If in case the buyer has paid for atleast two years, he is entitled for a
nor to the sample and description, the buyer can rescind the contract of sale. The mandatory grace period of 1 month for every year of installment. However, if the
buyer must also given the opportunity to examine the goods. buyer still defaulted within the mandatory grace period, the contract shall be
cancelled and the buyer is entitled to the refund of the cash surrender value
Art. 1484 - In a contract of sale of personal property the price of which is amounting to 50%.
payable in installments, the vendor may exercise any of the following remedies: 2. If in case the buyer has paid for more than 5 years, the buyer is entitled
1. Exact fulfillment of the obligation, should the vendee fail to pay; to an additional 5% for every year of payment, but shall not exceed 90% of the
2. Cancel the sale should the vendee’s failure to pay cover two or more total payments made.
installments; 3. If in case the buyer has paid for less than 2 years, he shall be entitled for
3. Foreclose the chattel mortgage on the thing sold; if one has been a mandatory grace period of 60 days. In case of failure to pay within grace period,
constituted, should the vendee’s failure to pay cover two or more installments. In the seller has to cancel the sale, and he has to notify the buyer that he is
this case, he shall have no further action against the purchaser to recover any rescinding the contract by a notarial act. The buyer is not entitled for a refund.
unpaid balance of the price. Any agreement to the contrary shall be void.
Art. 1485 - The preceding article shall be applied to contracts purporting to be
leases of personal property with option to buy, when the lessor has deprived the into contract of sale, it it unenforceable.
lessee of the possession or enjoyment of the thing. As an exception to the rule, if necessaries are delivered to the minor, the
Recto Law is also applicable to leases of personal property by installment. contract is considered valid, and the minor has to pay for the reasonable price.
Necessaries are needed for the sustenance, dwelling, clothing, medical assistance,
Art. 1486 - In the cases referred to in the two preceding articles, a stipulation education and transportation in keeping with the financial capacity of the family
that the installments or rents paid shall not be returned to the vendee or lessee of the incapacitated person.
shall be valid insofar as the same may not be unconscionable under the
circumstances. Art. 1490 - The husband and the wife cannot sell property to each other, except:
If there is a stipulation that the installment shall not be returned in case of 1. When a separation of property was agreed upon in the marriage
default, that is a valid stipulation. settlements; or
2. When there has been a judicial separation of property under article 191.
Art. 1487 - The expenses for the execution and registration of the sale shall be Husband and wife are relatively incapacitated to enter into a contract of sale.
borne by the vendor, unless there is a stipulation to the contrary. Exceptions to the rule:
1. If there is a separation of the properties agreed upon by the parties. If
CHAPTER 2 - CAPACITY TO BU Y OR SELL there is no marriage settlements, it is covered by the Absolute Community of
Property, if there is one, it is either Conjugal Partnership of Gains or Absolute
Art. 1489 - All persons who are authorized in this Code to obligate themselves, Separation of Property.
may enter into a contract of sale, saving the modifications contained in the 2. If there is a judicial separation of property. Once the marriage is annulled,
following articles. there is already a judicial separation of properties, and both can now enter into a
Where necessaries are sold and delivered to a minor or other person without contract of sale with each other.
capacity to act, he must pay a reasonable price therefor. Necessaries are those 3. If there is a legal separation.
referred to in article 290. Illustration:
If one is capacitated to enter into a contract, he is likewise capacitated to enter H sold his townhouse to his wife, W. Later on, they filed an annulment for
into a contract of sale. their marriage, and H wants to declare the nullity of the sale between husband
Kinds of incapacity: and wife.
1. Absolute incapacity - one does not have any right to enter into a Can the husband declare the nullity of the sale?
contract, e.g., minors No, by the reason of the principle of pari delicto, if both parties are at fault,
2. Relative incapacity - one is capacitated to enter into a contract but they cannot go to court.
in some cases, he is prohibited to enter into a certain contract of sale, e.g., Assuming H sold his townhouse to his wife, W, and later on, borrowed 1, 000,
aliens since they cannot enter into a sale of real property, but can enter into 000 pesos to X. A week after the delivery of money, X learned the sale of both H
a sale of goods and W. In that case, X can no longer go after the townhouse should the husband
As a general rule, a minor cannot enter into a contract of sale. If a minor enters and wife defaulted the payment for the loan.
into a contract of sale, the status of the sale is voidable, if two minors entered Can X question the validity of the sale?
 No. The defense of the illegality of the contract is not available to third 2. Agents with respect to properties under his administration, or the
persons whose interest is not directly affected. property entrusted to him by the principal.
Same facts from above, only that the husband and wife borrowed first to X 3. Executors and administrators with respect to the estate under his
before entering into a contract of sale to each other. administration.
Can X declare the nullity of the sale? Note: The items enumerated above are considered voidable. Only private interest
Yes. X’s interest is already affected therefore he can declare the nullity of is affected.
the contract. 4. Public officers and employees, or any employees of the State, or
Note: The heirs are allowed to question the sale because their inheritance can be government, with respect to the property of the State or property under their
prejudiced. administration.
5. Justices, judges, prosecuting attorneys, with respect to property under
Art. 1491 - The following persons cannot acquire by purchase, even at a the administration of the court, even lawyers with respect to the property of
public or judicial auction, either in person or through the mediation of another; their client by reason of their profession.
1. The guardian, the property of the person or persons who may be under 6. Persons disqualified by the law.
his guardianship; Note: Items 4-6, the status of the contract is void as public interest is affected.
2. Agents, the property whose administration or sale may have been
entrusted to them, unless the consent of the principal has been given; Art. 1492 - The prohibitions in the two preceding articles are applicable to sales
3. Executors and administrators, the property of the estate under by virtue of legal redemption, compromises, and renunciations.
administration; Compromise - agreed upon or the parties settled the dispute to put an end to a
4. Public officers and employees, the property of the State or of any litigation
subdivision thereof, or of any government owner or controlled corporation, or Renunciation - waiver
institution, the administration of which has been entrusted to them; this Legal Redemption - is the right to be subrogated, upon the same terms and
provision shall apply to judges and government experts who, in any manner conditions stipulated in the contract, in the place of one who acquires a thing by
whatsoever, take part in the sale; purchase or dation in payment, or by any other transaction whereby ownership
5. Justices, judges, prosecuting attorneys, clerks of superior and inferior is transferred by onerous title. (thnx google)
courts, and other officers and employees connected with the administration of
justice, the property and rights in litigation or levied upon an execution before CHAPTER 3 - EFFECT OF THE CON TRACT WHEN THE THIN G SOLD HAS
the court within those jurisdiction or territory they exercise their respective BEEN LOST
functions; this prohibition includes the act of acquiring by assignment and shall
apply to lawyers, with respect to the property and rights which may be the object Art. 1493 - If at the time the contract of sale is perfected, the thing which is the
of any litigation in which they may take part by virtue of their profession; object of the contract has been entirely lost, the contract shall be without any
6. Any others specially disqualified by law. effect.
The following are relatively incapacitated to enter into contract: But if the thing should have been lost in part only, the vendee may choose
1. The guardian, with respect to the property of the ward or the minor. between withdrawing from the contract and demanding the remaining part,
paying its price in proportion to the total sum agreed upon.
If at the time of the perfection of the contract of sale, the thing is lost, the Art. 1482 - Whenever earnest money is given in a contract of sale, it shall be
contract is without any effect, it is considered void. considered as part of the price and as proof of the perfection of the contract.
If the thing is lost in part, the buyer can demand the withdrawal of the contract
or demand for the proportionate deduction of the price. Art. 1488 - The expropriation of property for public use is governed by special
Lost - it perishes or goes out of commerce or disappears in such a way that its laws.
existence is unknown or can not be recovered.
CHAPTER 4 - OBLIGATION S OF THE VEN DOR
Art. 1494 - Where the parties purport a sale of specific goods, and the goods SECTION 1 - GEN ERAL PROVISION S
without the knowledge of the seller have perished in part or have wholly in a
material part so deteriorated in quality as to be substantially changed in Art. 1495 - The vendor is bound to transfer the ownership of and deliver, as well
character, the buyer may at his option treat the sale: as warrant the thing which is the object of the sale.
1. as avoided; or Primary obligations of the seller:
2. as valid in all of the existing goods, or in so much thereof as have not 1. Deliver the determinate thing.
deteriorated, and as binding the buyer to pay the agreed price for the goods in 2. Transfer the ownership.
which the ownership will pass, if the sale was divisible. 3. Warrant the thing sold.
Sale of Specific Goods 4. Take care of the thing sold with the proper diligence of a good father
If in case the goods, without the knowledge of the seller, have perished in part or of a family.
in whole, or have been materially deteriorated in quality as to substantially 5. Pay for the expenses of the sale or the execution of the contract.
change the character of the goods, the buyer has the following options: If in case the seller cannot deliver the thing sold at the date agreed upon, the
1. Treat the sale as avoided. buyer can demand for rescission and payment of damages.
2. Demand the delivery of the existing goods. Note: At the time of perfection, ownership is not required, payment is not
Note: Item 2 is only available is the sale is divisible. If the sale is indivisible, the required, and delivery is not required. Ownership is required at the time of
only remedy of the buyer is to treat the sale as avoided. delivery. Payment and delivery are required to consummate the obligation.

Art. 1471 - If the price is simulated, the sale is void, but the act may be shown to Art. 1496 - The ownership of the thing sold is acquired by the vendee from the
have been in reality a donation, or some other act or contract. moment it is delivered to him in any of the ways specified in articles 1497 to
1501, or in any other manner signifying an agreement that the possession is
Art. 1477 - The ownership of the thing sold shall be transferred to the vendee transferred from the vendor to the vendee.
upon the actual or constructive delivery thereof. Ownership is transferred from the seller to the buyer by the following:
1. Actual Delivery
Art. 1478 - The parties may stipulate that ownership in the thing shall not pass 2. Constructive Delivery
to the purchaser until he has fully paid the price. 3. Any other manner signifying the intention to transfer the
 possession of the thing sold. Art. 1499 - The delivery of movable property may likewise be made by the mere
Requisites of delivery: consent or agreement of the contracting parties, if the thing sold cannot be
1. There must be an intention to deliver. transferred to the possession of the vendee at the time of the sale, or if the latter
2. The delivery must be by actual or constructive delivery, or in any already had it in his possession for any other reason.
other manner signifying the intention to transfer the possession. Other forms of constructive delivery: (applicable only to movable
3. The delivery must be to the buyer, or the agent of the buyer. properties)
4. The delivery must be accepted by the buyer. 1. Traditio Longa Manu
- delivery by the long hand, vendor merely points to the thing sold
SECTION 2 - DELIVERY OF THE THIN G SOLD (turo-turo)
2. Traditio Brevi Manu.
Art. 1497 - The thing sold shall be understood as delivered, when it is placed in - delivery by the short hand, usually the lessor sells the thing leased to
the control and possession of the vendee. the lessee; from lessee to owner.
Actual Delivery - the thing sold is placed in the control and possession of the
buyer. Art. 1500 - There may also be tradition constitutum possessorium.
Traditio Constitutum Possessorium - vendor constinues in possession of the
Art. 1498 - When the sale is made through a public instrument, the execution property sold not as owner but in some other capacity, as for example, when the
thereof shall be equivalent to the delivery of the thing which is the object of the vendor stays as a tenant of the vendee. This law is applicable both to movable
contract, if from the deed the contrary does not appear or cannot clearly be and immovable properties. From owner to lessee.
inferred.
With regard to movable property, its delivery may also be made by the delivery Art. 1501 - With respect to incorporeal property, the provisions of the first
of the keys of the place or depository where it is stored or kept. paragraph of article 1498 shall govern. In any other case wherein said
Under first paragraph, it provides the “tradition instrumental,” whereby the provisions are not applicable, the placing of the titles of ownership in the
execution of a public instrument, that is equivalent to a constructive delivery. By possession of the vendee or the use by the vendee of his rights, with the vendor’s
legal fiction, this will only hold through if in case there is no legal impediment in consent, shall be understood as a delivery.
the transfer of the property. If private document is executed, it should be Delivery of incorporeal or intangible properties is effected: (Quasi-traditio)
accompanied by an actual delivery. Therefore, under tradition instrumental, it is 1. By the execution of a public instrument. (Art. 1498)
a requirement not only to transfer the title of the property but also to transfer 2. If the execution is not applicable, the title can be placed in the hands
the control over the property. Otherwise, tradition instrumental is not applicable. of the buyer.
This is applicable to both immovable and movable property. 3. The buyer can be allowed to make use of his rights as long as it is
Under second paragraph, it provides the “tradition symbolica,” whereby the with the consent of the seller.
delivery of the keys, the tokens representing the ownership, that is equivalent to
a constructive delivery. This is only applicable to movable property. Art. 1502 - When goods are delivered to the buyer “on sale or return” to give the
buyer an option to return the goods instead of paying the price, the ownership
passes to the buyer on delivery, but he may revest the ownership in the seller by 3. If in case the buyer exerted any act manifesting the approval.
returning or tendering the goods within the time fixed in the contract, or, if no Difference between the two:
time has been fixed, within a reasonable time. - As to condition, in sale or return, it is subject to a resolutory condition,
When goods are delivered to the buyer on approval or on trial or on satisfaction, while in sale on trial, it is subject to a suspensive condition.
or other similar terms, the ownership therein passes to the buyer. - As to the premise, sale or return is dependent upon the discretion or
(1.) When he signifies his approval or acceptance to the seller or does any the will of the buyer, while sale on trial is dependent upon the approval,
other act adopting the transaction. satisfaction or the suitability of the quality or character of the subject
(2.) If he does not signify his approval or acceptance to the seller, but matter of the sale.
retains the goods without giving notice of rejection, then if a time has been fixed - As to the revesting of ownership, in the sale or return, there is
for the return of the goods, on the expiration of such time, and, if no time has revesting of ownership, but in the case of sale on trial, there is no revesting
been fixed, on the expiration of a reasonable time. What is a reasonable time is a of ownership since ownership is not transferred to the buyer.
question of fact. - As to transfer of ownership, in sale or return, once there is a delivery,
Sale or Return and Sale on Trial or Approval or Satisfaction. there is transfer of ownership, while on sale on trial, upon delivery, there is
Sale or Return. - it is subject to a resolutory condition. no transfer of ownership since it is only upon the approval that there is a
Illustration: transfer of ownership.
X sold her dress to Y on a sale or return agreement. Upon delivery of - As to risk of loss or injury, in the case of sale or return, once there is a
the dress, Y acquires ownership over the dress. Since ownership is delivery, the buyer bears the loss, while in sale on trial, even though there is
transferred, Y bears the loss. However, the latter has given the discretion to a delivery, the buyer does not bear the loss it is the seller who bears the
return the dress within the period agreed upon. If Y fails to return the dress same, exception the rule: the buyer bears the loss if the buyer is responsible
within that period of time, the sale becomes absolute. for the loss.
Sale on Trial, Approval or Satisfaction. - this sale is subject to a
suspensive condition. The condtion is the approval, the satisfaction, the Art. 1503 - Where there is a contract of sale of specific goods, the seller may, by
suitability of the quality and character of the subject matter of the sale. the terms of the contract, reserve the right of possession or ownership in the
Illustration: goods until certain conditions have been fulfilled. The right of possession or
X sold her dress to Y on a sale on trial, approval or satisfaction ownership may be thus reserved notwithstanding the delivery of the goods to the
agreement. Upon delivery of the dress, X retains the ownership of the dress. buyer or to a carrier or other bailee for the purpose of transmission to the buyer.
Y, on the other hand, can return the dress if only it does not fit to the Where goods are shipped, and by the bill of lading the goods are deliverable to
approval or satisfaction of the buyer. Therefore, the seller bears any loss of the seller or his agent, or to the order of the seller or of his agent, the seller
the thing sold. thereby reserves the ownership in the goods. But if, except for the form of the
Note: The sale only becomes absolute in the following cases: bill of lading, the ownership would have passed to the buyer on shipment of the
1. Buyer tendered or communicated the approval. goods, the seller’s property in the goods shall be deemed to be only for the
2. Buyer failed to notify their rejection or disapproval within the purpose of securing the performance by the buyer of his obligations under the
period agreed upon. contract.
Where goods are shipped, and by the bill of lading the goods are deliverable to acquires no added right thereby. But however, if the bill of exchange is
the order of the buyer or of his agent, but possession of the bill of lading is negotiated to a third person, and the bill of lading is likewise delivered to
retained by the seller or his agent, the seller thereby reserves a right to the the third person, and such third person is qualified as a purchaser in good
possession of the goods as against the buyer. faith and for value, without notice of the fact making the transfer wrongful,
Where the seller of the goods draws on the buyer for the price and transmits the such third person will acquire a better and superior title over the goods.
bill of exchange and bill of lading together to the buyer to secure acceptance or
payment of the bill of exchange, the buyer is bound to return the bill of lading if Art. 1504 - Unless otherwise agreed, the goods remain at the seller’s risk until
he does not honor the bill of exchange, and if he wrongfully retains the bill of the ownership therein is transferred to the buyer, but when the ownership
lading he acquires no added right thereby. If, however, the bill of lading provides therein is transferred to the buyer, the goods are at the buyer’s risk whether
that the goods are deliverable to the buyer or to the order of the buyer, or is actual delivery has been made or not, except that:
indorsed in blank, or to the buyer by the consignee named therein, on who 1. Where delivery of the goods has been made to the buyer or to a bailee for the
purchases in good faith, for value, the bill of lading, or goods from the buyer will buyer, in pursuance of the contract and the ownership in the goods has been
obtain the ownership in the goods, although the bill of exchange has not been retained by the seller merely to secure performance by the buyer of his
honored, provided that such purchaser has received delivery of the bill of lading obligations under the contract, the goods are at the buyer’s risk from the time of
indorsed by the consignee named therein, or of the goods, without notice of the such delivery;
facts making the transfer wrongful. 2. Where actual delivery has been delayed through the fault of either the buyer
General rule: Delivery to the carrier is delivery to the buyer. or seller the goods are at the risk of the party in fault.
Exceptions to the general rule: If there is no delivery, there is no transfer of ownership, therefore the seller
- if in case there is a reservation of the right of possession or ownership bears the loss. However, if there is already a delivery, actual or constructive, it is
over the goods. (par. 1 ) the buyer who bears the loss.
- if in case the goods are shipped or transported by the seller to the Exceptions to the rule:
carrier, and the bill of lading is deliverable to the order of the seller or the 1. Even though the goods have already been delivered to the buyer, and the
agent of the seller, except for the form of the bill of lading, the ownership seller retains the possession over the goods for the purposes of securing the
would have been passed to the buyer on shipment, and the seller’s property performance of the obligation, it is still the buyer who bears the loss.
over the goods is only to secure the performance of the obligation, it is the 2. If in case there is a delay in the actual delivery, determine who is at fault.
buyer who bears the loss. (par. 2)
- if the goods are transported, but the bill of lading is deliverable to the Art. 1505 - Subject to the provisions of this Title, where goods are sold by a
order of the buyer or the agent of the buyer, but however, the bill of lading is person who is not the owner thereof, and who does not sell them under authority
retained by the seller. or with the consent of the owner, the buyer acquires no better title to the goods
- if seller of goods draws on the buyer for the price, he transmitted or than the seller had, unless the owner of the goods is by his conduct precluded
transferred the bill of lading together with the bill of exchange, and the bill from denying the seller’s authority to sell.
of exchange is not honored, is not accepted by the buyer, the buyer has to Nothing in this title, however, shall affect:
return the bill of lading together with the bill of exchange, otherwise he (1.) The provisions of any factors’ acts, recording laws, or any other provision of
law enabling the apparent owner of goods to dispose of them as if he were the Art. 1506 - Where the seller of goods has a voidable title thereto, but his title has
true owner thereof: not been avoided at the time of the sale, the buyer acquires a good title to the
(2.) The validity of any contract of sale under statutory power of sale or under goods, provided he buys them in good faith, for value, and without notice of the
the order of a court of competent jurisdiction; seller’s defect of title.
(3.) Purchases made in merchant’s store, or in fairs, or markets, in accordance Illustration:
with the Code of Commerce and special laws. M, a minor, sold his car to X. The status of the contract, as well as the title of
If a person sells a thing without ownership or without authority, the buyer X is voidable. The latter, having a voidable title, and the same has not been
acquires no better title than the seller had. The article applies the principle of avoided, sold the same car to Y. As a result, Y will acquire a better title to the car
nemo dat quad non habet. than X, as long as he is a purchaser in good faith, for value, and he has no notice
Even though the seller has no authority to sell or dispose the subject matter that the seller’s title is defective.
of the sale, the buyer acquires better title over the seller in the following cases: However, if Y has knowledge of X’s title, Y is considered to have a voidable
1. If the owner of the thing is precluded from denying the seller’s authority title as well, applying the principle of nemo dat quad non habet, the buyer
to sell. succeeds only to the rights of the seller.
2. If in case the sale is made by any factors’ acts, recording laws, and other
provisions of laws enabling the apparent owner to dispose the property. SKIP 1507 - 1520
3. If in case the sale is made under the statutory power of sale or made
under the authority of court of a competent jurisdiction. Art. 1521 - Whether it is for the buyer to take possession of the goods or for the
Illustration: seller to send them to the buyer is a question depending in each case on the
X died with a total of 5 properties without heirs. As a result, the State contract, express or implied, between the parties. Apart from any such contract,
collected his properties and sold the same in an auction sale. 2 months from the express or implied, or usage of trade to the contrary, the place of delivery is the
time of sale, Y, an illegitimate son of X, appeared. seller’s place of business if he has one, and if not, his residence; but in case of a
Can Y question the sale of X’s properties? contract of sale of specific goods, which to the knowledge of the parties when the
No. The sale is valid as it is made under the statutory power of sale. contract or the sale was made were in some other place, then that place is the
However, his only remedy is to get the proceeds of the sale. place of delivery.
4. Sale made in a merchant’s store, or in fairs, or markets. Where by a contract of sale the seller is bound to send the goods to the buyer, but
Illustration: no time for sending them is fixed, the seller is bound to send them within a
X bought a pair of shoes in SM Manila. Afterwards, he went to SM Megamall, reasonable time.
and unfortunately, he left the shoes he bought in SM Manila in Megamall’s Where the goods at the time of sale are in the possession of a third person, the
department store. Y, a staff from Megamall, saw the shoes of X and put it back in seller has not fulfilled his obligation to deliver to the buyer unless and until such
the store’s display, and was eventually bought by B. third person acknowledges to the buyer that he holds the goods on the buyer’s
Can X question the sale to B? behalf.
No. It is a valid sale because it is made in a merchant’s store, fair or market. Demand or tender of delivery may be treated as ineffectual unless made at a
reasonable hour. What is a reasonable hour is a question of fact.
Unless otherwise agreed, the expenses of and incidental to putting the goods into accept the goods which are in accordance with the contract and reject the rest.
a deliverable state must be borne by the seller. In the preceding two paragraphs, if the subject matter is indivisible, the buyer
Place of Delivery, Time of delivery, and Expenses of putting the goods into a may reject the whole of the goods.
deliverable state. The provisions of this article are subject to any usage of trade, special agreement,
Place of Delivery or course of dealing between the parties.
Follow the stipulation there is one, otherwise, the place of delivery is Lesser Delivery, Larger Delivery, and Mixed Delivery
the place of the seller’s residence or business. However if it involves specific Lesser Delivery
goods, and both the parties have the knowledge as to the goods, the place of - The goods delivered is less than the goods contracted. The buyer may
delivery is where the goods might be at the time of perfection of the contract reject the goods, and at the same time the buyer will not incur any liability.
of sale. If the buyer accepted the lesser goods, with the knowledge that the seller
Time of Delivery can no longer deliver the remaining goods, the buyer shall pay the contract
Follow the stipulation if there is one, otherwise, delivery must be held price. However, if the buyer accepted, and has consumed the lesser goods,
within a reasonable time and what is a reasonable time is always a question without the knowledge that the seller can no longer deliver the remaining
of fact. goods, the buyer is only required to pay the fair value of the goods, and not
Under the third paragraph, it is wherein the goods are in the possession of a the contract price. Normally, fair value is lesser than the contract price.
third person, the seller’s obligation is yet to be fulfilled until the third person Larger Delivery
acknowledges the goods on behalf of the buyer. - The goods delivered is more than the goods contracted. The buyer
Expenses of putting the goods into a deliverable state may reject the goods because he has no burden of segregation. The buyer
The seller bears the same unless otherwise provided. may also accept only what has been contracted for and reject the excess.
However, if the buyer accepted all the goods, he has to pay for the contract
Art. 1522 - Where the seller delivers to the buyer a quantity of goods less than he price.
contracted to sell, the buyer may reject them, but if the buyer accepts or retains M ixed Delivery
the goods to be delivered, knowing that the seller is not going to perform the act - The goods delivered are mixed with some other goods. The buyer may
contract in full, he must pay for them at the contract rate. If, however, the buyer accept only what he has contracted and reject the rest.
has used or disposed of the goods delivered before he knows that the seller is not Under both larger and mixed delivery, the buyer can only accept and reject the
going to perform his contract in full, the buyer shall not be liable for more than goods if it pertains to divisible goods.
the fair value to him of the goods so received.
Where the seller delivers to the buyer a quantity of goods larger than he Art. 1523 - Where, in pursuance of a contract of sale, the seller is authorized or
contracted to sell, the buyer may accept the goods included in the contract and required to send the goods to the buyer, delivery of the goods to a carrier,
reject the rest. If the buyer accepts the whole of the goods so delivered he must whether named by the buyer or not, for the purpose of transmission to the buyer
pay for them at the contract rate. is deemed to be a delivery of the goods to the buyer, except in cases provided for
Where the seller delivers to the buyer the goods he contracted to sell mixed with in the article 1503, first, second, and third paragraphs, or unless a contrary
goods of a different description not included in the contract, the buyer may intent appears.
Unless otherwise authorized by the buyer, the seller must make such contract Art. 1524 - The vendor shall not be bound to deliver the thing sold, if the vendee
with the carrier on behalf of the buyer as may be reasonable, having regard to has not paid him the price, or if no period for the payment has been fixed in the
the nature of the goods and the other circumstances of the case. If the seller contract.
omits so to do, and the goods are lost or damaged in course of transit, the buyer The vendor is not obliged to deliver the thing under the following cases:
may decline to treat the delivery to the carrier as a delivery to himself, or may 1. If the buyer has not paid the price; and
hold the seller responsible for damages. 2. There is no period for the payment of the price
Unless otherwise agreed, where goods are sent by the seller to the buyer under
circumstances in which the seller knows or ought to knows that it is usual to Art. 1525 - The seller of goods is deemed to be an unpaid seller within the
insure, the seller must give such notice to the buyer as may enable him to insure meaning of this Title:
them during their transit, and, if the seller fails to do so, the goods shall be 1. When the whole of the price has not been paid or tendered;
deemed to be at his risk during such transit. 2. When a bill of exchange or other negotiable instrument has been received as
Reiteration of the delivery to carrier is the delivery to the buyer. See article conditional payment, and the condition on which it was received has been
1503. The article only states that after the goods have been delivered to the broken by reason of the dishonor of the instrument, the insolvency of the buyer,
carrier, the seller’s obligation is not yet extinguished. The seller has two more or otherwise.
obligations after delivery to the carrier: In articles 1525 and 1535 the term “seller” includes an agent of the seller to
1. Enter into contract with the carrier. Should the seller fails to do so, the whom the bill of lading has been indorsed, or a consignor or agent who has
same shall bear the risk of loss. himself paid, or is directly responsible for the price, or any other person who is
2. If in case it is usual to insure the goods while in transit, the seller has to in the position of a seller.
notify the buyer that there is need to insure the goods, otherwise, in case of loss, Unpaid Seller - one where the whole of the goods has not been paid, or if in
the seller bears the loss. case the bill of exchange or other negotiable instrument has been received as
Trade terms: conditional payment, and the condition on which it was received has been
A. COD - “collect on delivery;” it does not prevent the transfer of ownership broken by reason of the dishonor of the instrument and insolvency.
B. FOB - “free on board;” there is already a transfer of ownership to the Covers the agent of seller to whom the bill of lading was indorsed, consignee
buyer but consider the type of FOB: who has paid for the price or is directly responsible for the price, and any person
i. FOB Shipping point - buyer bears the loss; in the position of the seller.
ii. FOB Destination - seller bears the loss;
C. CIF - “cost, insurance and freight” seller pays the costs but buyer bears Art. 1526 - Subject to the provisions of this Title, notwithstanding that the
the loss since there is alrealy transfer of ownership ownership in the goods may have passed to the buyer, the unpaid seller of goods,
D. FAS - “free alongside;” seller pays all charges and bear the risk until the as such, has:
goods are placed alongside overseas vessel 1. A lien on the goods or right to retain them for the price while he is in
E. Ex factory, Ex Warehouse, etc. (named point of origin) possession of them;
F. Ex Dock (named port of importation 2. In case of the insolvency of the buyer, a right of stopping the goods in
transitu after he has parted with the possession of them;
 3. A right of resale as limited by this Title; One can exercise the right of retention notwithstanding the fact that he is an
4. A right to rescind the sale likewise limited by this Title. agent or a bailee of the buyer.
Where the ownership in the goods has not passed to the buyer, the unpaid seller
has, in addition to his other remedies, a right of withholding delivery similar to Art. 1528 - Where an unpaid seller has made part delivery of the goods, he may
and co-extensive with his rights of lien and stoppage in transitu where the exercise his right of lien on the remainder, unless such part delivery has been
ownership has passed to the buyer. made under such circumstances as to show an intent to waive the lien or right of
Rights of Unpaid Seller: retention.
1. Right of retention When a partial delivery of the goods has been made, the seller can still
2. Right of stoppage in transitu - only available if the buyer is insolvent exercise his right of retention over the remaining goods. Exception to the rule:
3. Right of resale upon the intention of the parties, when partial delivery has been made, the seller
4. Right to rescind is waiving his right of retention over the remaining goods, that upon delivery of
What is contemplated from article 1525 and first paragraph of this article is that partial goods, there is already an extinguishment of the possessory lien.
ownership has been transferred to the buyer.
But if ownership has not yet been transferred, the unpaid seller is given the right Art. 1529 - The unpaid seller of goods loses his lien thereon:
which is similar and co-extensive with the right of lien and right in stoppage in 1. When he delivers the goods to a carrier or other bailee for the purpose of
transitu, and otherwise known as right of withholding the goods. transmission to the buyer without reserving the ownership in the goods or the
right of the possession thereof;
Art. 1527 - Subject to the provisions of this Title, the unpaid seller of goods who 2. When the buyer or his agent lawfully obtains possession of the goods;
is in possession of them is entitled to retain possession of them until payment or 3. By waiver thereof.
tender of the price in the following cases, namely: The unpaid seller of goods, having a lien thereon, does not lose his lien by reason
1. Where the goods have been sold without any stipulation as to credit; only that he has obtained judgment or decree for the price of the goods.
2. Where the goods have been sold on credit, but the term of credit has Cases that the right of lien is considered lost:
expired; 1. When the seller delivers the goods to the carrier or other bailee for
3. Where the buyer becomes insolvent. the purposes of transmission to the buyer without reserving his ownership
The seller may exercise his right of lien notwithstanding that he is in possession or possession.
of the goods as agent or bailee for the buyer. 2. When the buyer or agent lawfully obtains the goods.
Right of retention or Possessory Lien 3. By the waiver thereof.
Available in the following cases: Mere judgment by a court obtained by the unpaid seller for the price of the
1. When the good have been sold without any stipulation as to goods is not a ground for the loss of his lien.
credit.
2. When the goods have been sold with any stipulation as to credit, Art. 1530 - Subject to the provisions of this Title, when the buyer of goods is or
the credit has expired becomes insolvent, the unpaid seller who has parted with the possession of the
3. The buyer is insolvent. goods has the right of stopping them in transitu, that is to say, he may resume
possession of the goods at any time while they are in transit, and he will then delivery has been under such circumstances as to show an agreement with the
become entitled to the same rights in regard to the goods as he would have had if buyer to give up possession of the whole of the goods.
he had never parted with the possession. Goods in transit:
Right of Stoppage in Transitu 1. Goods have been delivered to the carrier through land, air, or water
If the buyer is insolvent, the unpaid seller can exercise his right of for the purposes of transmission to the buyer until and unless the buyer
stoppage in transitu. took possession of the same.
Consequences of the right: 2. If the goods are rejected by the buyer and the carrier is continuing
1. Seller can resume the possession of the goods while in transit. to possess the same even though the seller has refused to accept the goods.
2. Seller can exercise all the rights as if he has never parted with Goods are no longer in transit:
the goods. (right of lien, resale and rescind) 1. Premature delivery - the goods have been delivered and before the
arrival of the destination the buyer was able to take possession of the goods
Art. 1531 - Goods are in transit within the meaning of the preceding article: 2. If the goods have arrived at the point of destination, and the carrier
1. From the time when they are delivered to a carrier by land, water or air, acknowledges the goods on behalf of the buyer even though there is an
or other bailee for the purpose of transmission to the buyer, until the buyer, or indication of a further destination.
his agent in that behalf, takes delivery of them from such carrier or other bailee; 3. If the carrier or other bailee wrongfully refuses to deliver the goods
2. If the goods are rejected by the buyer, and the carrier or other bailee to the buyer.
continues in possession of them, even if the seller has refused to receive them If in case the partial goods have arrived to the destination, the seller can
back; still exercise his right of stoppage in transitu as to the remaining goods still in
Goods are no longer in transit within the meaning of the preceding article: transit.
1. If the buyer, or his agent in that behalf, obtains delivery of the goods
before their arrival at the appointed destination; Art. 1532 - The unpaid seller may exercise his right of stoppage in transitu
2. If, after the arrival of the goods at the appointed destination, the carrier either by obtainng actual possession of the goods or by giving notice f his claim to
or other bailee acknowledges to the buyer or his agent that he hold he goods on the carrier or other bailee in whose possession the goods are. Such notice may be
his behalf and continues in possession of them as bailee for the buyer or his given either to his principal. In the latter case, the notice, to be effectual, must be
agent; and it is immaterial that further destination for the goods may have been given at such time and under such circumstances that the principal, by the
indicated by the buyer; exercise of reasonable diligence, may prevent a delivery to the buyer.
3. If the carrier or other bailee wrongfully refuses to deliver the goods to When notice of stoppage in transitu is given by the seller to the carrier, or other
the buyer or his gent in that behalf. bailee in possession of the goods, he must redeliver the goods to, or according to
If the goods are delivered to a ship, freight train, truck, or airplane chartered by the directions of, the seller. The expenses of such delivery must be borne by the
the buyer, it is a question depending on the circumstances of the particular case, seller. If, however, a negotiable document of title representing the goods has
whether they are in possession of the carrier as such or as agent of the buyer. been issued by the carrier or other bailee, he shall not be obliged to deliver or
If part delivery of the goods has been made to the buyer, or his agent on his justified in delivering the goods to the seller unless such document is first
behalf, the remainder of the goods may be stopped in transitu, unless such part surrendered for cancellation.
 Exercise of Right of Resale: Requisites of Right of Resale (ownership has been transferred):
1. Actual possession of the goods. 1. If he has the right of lien and right of stoppage in transitu.
2. Notify the carrier or the principal of the carrier. Notification to the 2. The right of resale is under the following cases: (whether public or
latter requires notification to the extent that such notification can also be private auction)
brought to the carrier. a) The goods are all perishable in nature.
If in case the goods are covered by bill of lading and the bill of lading has b) There is an express reservation that if in case of default,
been transferred from one person to another, and the third person is a purchaser there is a resale.
in good faith and for value, the goods have to be delivered to that third person. c) If the buyer is in default for unreasonable length of time.
Such third person, upon negotiation of a negotiable instrument, acquires a By the resale, the seller is not liable for the price. He can hold the buyer
superior title over the goods. liable for the damages or loss on the basis of the breach of the contract.
Illustration:
Art. 1533 - Where the goods are of perishable nature or where the seller X sold to Y a table worth 50, 000. Assuming Y failed to pay X
expressly reserves the right of resale in case the buyer should make default, or within 3 months, X decided to sell the same to B, for 60, 000.
where the buyer has been in default in the payment of the price for an Is X liable for the excess of contract price of 10, 000 to Y?
unreasonable time, an unpaid seller having a right of lien or having stopped the No, the seller is not liable for the price.
goods in transitu may resell the goods. He shall not thereafter be liable to the Same facts from above, but X sold the table for 40, 000.
original buyer upon the contract of sale for any profit made by such resale, but Is Y liable for the 10, 000 deficiency?
may recover from the buyer damages for any loss occasioned by the breach of Yes. Damnum absque injuria - loss or damage without injury.
the contract of sale. Note: No notice is needed for the seller to resell the goods if such resale is not due
Where a resale is made, as authorized in this article, the buyer acquires a good to buyer’s default in payment. Such notice is also not needed for the place and
title as against the original buyer. time of the resale.
It is not essential to the validity of a resale that notice of an intention to resell
the goods be given by the seller to the original buyer. But where the right to Art. 1534 - An unpaid seller having the right of lien or having stopped the goods
resell is not based on the perishable nature of the goods or upon an express in transitu, may rescind the transfer of title and resume the ownership in the
provision of the contract of sale, the giving or failure to give such notice shall be goods, where he expressly reserved the right to do so in case the buyer should
relevant in any issue involving the question whether the buyer had been in make default in the payment of the price for an unreasonable time. The seller
default for an unreasonable time before the resale was made. shall not thereafter be liable to the buyer upon the contract of sale, but may
It is not essential to the validity of a resale that notice of the time and place of recover from the buyer damages for any loss occasioned by the breach of the
such resale should be given by the seller to the original buyer. contract.
The seller is bound to exercise reasonable care and judgment in making a resale, The transfer of title shall not be held to have been rescinded by an unpaid seller
and subject to this requirement may make a resale either by public or private until he has manifested by notice to the buyer or by some other overt act an
sale. He cannot, however, directly or indirectly buy the goods. intention to rescind. It is not necessary that such overt act should be
communicated to the buyer, but the giving or failure to give notice to the buyer of
the intention to rescind shall be relevant in any issue involving the question insolvent. Unless, he gives guaranty or security.
whether the buyer had been in default for an unreasonable time before the right 2. The buyer does not furnish the guaranty or security which he has
of rescission was asserted. promised.
Requisites of Right to Rescind (ownership has been transferred): 3. By the act of the buyer, he has impaired said guaranties or
1. If in case the unpaid seller has the right of lien or right of stoppage securities, or through fortuitous event, it disappeared.
in transitu. 4. When the buyer violates any undertaking in consideration of which
2. Right to rescind is under the following cases: the creditor agreed to the giving of the period
a) The right to rescind is expressly reserved in the contract. 5. When the buyer attempts to abscond.
b) If the buyer is in default for an unreasonable length of time.
Consequences of Rescission: Art. 1537 - The vendor is bound to deliver the thing sold and its accessions and
1. The unpaid seller cannot be held liable for the original contract. But accessories in the condition in which they were upon the perfection of the
the buyer can be held liable for the breach of contract. contract.
2. Notification to rescind is only needed for case (2) above. All the fruits shall pertain to the vendee from the day on which the contract was
perfected.
Art. 1535 - Subject to the provision of this Title, the unpaid seller’s right of lien Exception to the rule: when there is a contrary stipulated.
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. Art. 1538 - In case of loss, deterioration, or improvement of the thing before its
If, however, a negotiable document of title has been issued for goods, no seller’s delivery, the rules in article 1189 shall be observed, the vendor being considered
lien or right of stoppage in transitu shall defeat the right of any purchaser for the debtor.
value in good faith to whom such document has been negotiated, whether such Loss
negotiation be prior or subsequent to the notification to the carrier, or other - If the thing is lost without the fault of the seller, obligation
bailee who issued such document, of the seller’s claim to a lien or right of extinguished.
stoppage in transitu. - If the thing is lost through the fault of the seller, he is liable for the
Notwithstanding the disposition or the alienation made by the buyer it does damages.
not affect the right of lien and right of stoppage in transitu of the seller. Deterioration
Unless there is already a transfer of negotiable instrument to a third person, - If the thing deteriorates without the fault of the seller, such
being the purchaser in good faith and for value,such third person acquires a deterioration shall be borne by the buyer.
superior title over the goods. - If the thing deteriorates through the fault of the seller, buyer isgiven
the right to seek for: fulfillment plus damages or rescission plus damages.
Art. 1536 - The vendor is not bound to deliver the thing sold in case the vendee - If the thing improves by its nature, buyer bears the improvement.
should lose the right to make use of the term as provided in article 1198. - If the thing improves at the expense of the seller, the seller has no
Cases where the buyer has lost the right to make use of the period/term: other right than the right granted to the usufructuary.
1. If the buyer, after the obligations have been contracted, becomes
Art. 1539 - The obligation to deliver the thing sold includes that of placing in the Hence, the buyer can accept what has been contracted for, and reject the excess
control of the vendee all that is mentioned in the contract, in conformity with the of what has been delivered.
following rules:
If the sale of real estate should be made with a statement of its area, at the rate of Art. 1542 - In the sale of real estate, made for a lump sum and not at the rate of a
a certain price for a unit of measure or number, the vendor shall be obliged to certain sum for a unit of measure or number, there shall be no increase or
deliver to the vendee, if the latter should demand it, all that may have been decrease of the price, although there be a greater or less area or number than
stated in the contract; but, should this be not possible, the vendee may choose that stated in the contract.
between a proportional reduction of the price and the rescission of the contract, The same rule shall be applied when two or more immovables are sold for a
provided that, in the latter case, the lack in the area be not less than one-tenth of single price; but if, besides mentioning the boundaries, which is indispensable in
that stated. every conveyance of real estate, its area or number should be designated in the
The same shall be done, even when the area is the same, if any part of the contract, the vendor shall be bound to deliver all that is included within said
immovable is not of the quality specified in the contract. boundaries, even when it exceeds the area or number specified in the contract;
The rescission, in this case, shall only take place at the will of the vendee, when and should he not be able to do so, he shall suffer a reduction in the price, in
the inferior value of the thing sold exceed one-tenth of the price agreed upon. proportion to what is lacking in the area or number, unless the contract is
Nevertheless, if the vendee would not have bought the immovable had he known rescinded because the vendee does not accede to the failure to deliver what has
of its smaller area or inferior quality, he may rescind the sale. been stipulated.
Under first paragraph, if there is a delivery of the thing sold, it requires Sale of Real Estate in Lump Sum
to deliver all those that have been mentioned in the contract. If in case the - There shall be no increase or decrease of the price. If the area or the
seller fails to deliver all those mentioned in the contract, the buyer may real estate examined contains more than what has been contracted for, the
choose his remedy between proportion reduction of the price, or rescission - seller has to deliver the same, and the buyer has to pay for the price stated
if in case what has been delivered lacks one-tenth of the stated unit of in the contract.
measure or number. - However, where there are two or more immovables sold at a single
Rescission can also be applied if in case what has been delivered has price, its boundaries, as well as the area of land is stated, and there has been
an inferior quality, and should the inferior value of the thing sold exceeds a conflict as to its boundaries and area, the boundaries should be followed as
one-tenth. Buyer can also rescind the same if he would not have bought the it is the true intention of the parties. If in case what has been delivered to
immovable had he known of its smaller area or inferior quality irrespective the buyer is not equal to the boundary, he can ask for a proportionate
of the extent of the lack in area or quality. reduction of the price, or rescission if in case the buyer do not accede to the
failure to deliver what has been stipulated.
Art. 1540 - If, in the case of the preceding article, there is a greater area or
number in the immovable than the stated in the contract, the vendee may accept Art. 1544 - If the same thing should have been sold to different vendees, the
the area included in the contract and reject the rest. If he accepts the whole area, ownership shall be transferred to the person who may have first taken
he must pay for the same at the contract rate. possession thereof in good faith, if it should be movable property.
In this article, the buyer is not prejudiced by the omission of the seller. Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of Property. Condition
Should there be no inscription, the ownership shall pertain to the person, who in - uncertain event which may or may not happen, which will either give
good faith was first in the possession; and, in the absence thereof, to the person rise, or extinguish and obligation.
who presents the oldest title, provided there is good faith. Contract has already been perfected, but the obligations of the parties
Double Sales arising from the contract are subject to a condition.
- If the same thing sold by the same person to two or more buyers. - If the condition did not happen, they can refuse to proceed with the
Personal Property contract of sale, or waive the condition and proceed with the contract of
- The ownership is transferred to the first possessor in good faith. sale.
Real Property - If the contract of sale, is subordinated or dependent upon the
1. The owner is the first registrant in good faith. happening of the condition, no contract of sale is perfected until the
a) If not available, the first possessor in good faith, if no happening of the condition.
possessor, the one with the oldest title. - If that condition is in a nature of a promise that it would be performed,
Note: If the property is registered, double sale is not applicable. Also, if one of the the non-happening of the condition may be treated by the buyer as breach of
buyers have the knowledge of the previous or after sales, he is not a buyer in contract.
good faith. Under second paragraph, when ownership has not been passed, the buyer
Note: If there may have been an execution of an instrument to one of the buyers, may treat the fulfillment of the seller of his obligation as a condition of his
such buyer is the owner of the goods as there is already a constructive delivery. obligation to pay for the price.

SECTION 3 - CON DITION S AN D WARRAN TIES Art. 1546 - Any affirmation of fact or any promise by the seller relating to the
thing is an express warranty if the natural tendency of such affirmation or
Art. 1545 - Where the obligation of either party to a contract of sale is subject to promise is to induce the buyer to purchase the same, and if the buyer purchases
any condition which is not performed, such party may refuse to proceed with the the thing relying thereon. No affirmation of the value of the thing, nor any
contract or he may waive the performance of the condition. If the other party statement purporting to be a statement of the seller’s opinion only, shall be
has promised that the condition should happen or be performed, such first construed as a warranty, unless the seller made such affirmation or statement
mentioned party may also treat the non-performance of the condition as a as an expert and it was relied upon by the buyer.
breach of warranty. Kinds of Warranties:
Where the ownership in the thing has not passed, the buyer may treat the Express Warranties - any affirmation of fact or any promise by the seller
fulfillment by the seller of his obligation to deliver the same as described and as relating to the subject matter of the sale, which has induced, or has the tendency
warranted expressly or by implication in the contract of sale as a condition of the to induce the buyer, and by relying from the promise or affirmation, he has
obligation of the buyer to perform his promise to accept and pay for the thing. purchased the goods.
Warranty Cases where there are no express warranty:
- collateral undertaking in a contract of sale, that is a representation as 1. That is the statement as to the value of the goods.
to the quality and the character of the goods. 2. That is a mere statement or opinion of the seller. Exception to the
 rule: If the seller is an expert and the buyer has relied thereon. SU BSECTION 1 - WARRAN TY IN CASE OF EVICTION
Note: Error in good faith renders the contract valid, but the law also states that
such misrepresentation in good faith is also equivalent to a mistake, which Art. 1548 - Eviction shall take place whenever by a final judgment based on a
makes the contract voidable, while Fraud, since coming from the expert, renders right prior to the sale or an act imputable to the vendor, the vendee is deprived
the contract as voidable. (Mistake, Violence, Intimidation, Undue Influence, of the whole or of a part of the thing purchased.
Fraud) Error in good faith do not have a violation in warranty, hence, lesser The vendor shall answer for the eviction even though nothing has been said in
damages, while in fraud, there is a violation of warranty, since as a general rule, the contract on the subject.
a statement of opinion is not a warranty, however, if it is given by an expert, and The contracting parties, however, may increase, diminish, or suppress this legal
the buyer has relied on that promise, therefore it is considered a warrant. obligation of the vendor.
Inherent in every contract of sale unless otherwise provided. Implied
Art. 1547 - In a contract of a sale, unless a contrary intention appears, there is: warranty is subject to any suppression or modification.
1. An implied warranty on the part of the seller that he has a right to sell Requisites:
the thing at the time when the ownership is to pass, and that the buyer shall 1. The buyer is deprived of the thing sold, in whole or in part.
from that time have and enjoy the legal and peaceful possession of the thing; 2. Cause of eviction is final judgment.
2. An implied warranty that the thing shall be free from any hidden faults 3. A right prior to the sale, or an act imputable to the vendor.
or defects, or any charge or encumbrance not declared or known to the buyer. 4. No waiver of warranty.
This article shall not, however, be held to render liable a sheriff, auctioneer, 5. Make the vendor a co-defendant in order to give him the oppotunity
mortgagee, pledgee, or other person professing to sell by virtue of authority in to provide his effort.
fact or law, for the sale of a thing in which a third person has a legal or equitable Buyer may demand the seller the following:
interest. 1. Price of the goods at the time of eviction.
Cases of Implied Warranty: 2. Pay for the fruits and income if in case the court has decreed.
1. Warranty against eviction - the seller warrants that he has a title 3. Seller is responsible to pay for the expenses of the suit.
over the goods 4. Ornamental expenses, damages, if in case the vendor is in bad faith.
2. Warranty against hidden defects, fault, or encumbrances
3. Warranty as to fitness or merchantability Art. 1549 - The vendee need not appeal from the decision in order that the
Cases where there are no implied warranty: vendor may become liable for eviction.
1. Sale is under “as is” and “where is” - no warranty as to quality or
workable condition of the goods Art. 1550 - When adverse possession had been commenced before the sale but
2. Sale of secondhand articles - no warranty as to the fitness or the prescriptive period is completed after the transfer, the vendor shall not be
suitability liable for eviction.
3. Sale by (sheriff, auctioneer, mortgagee, pledgee,) virtue of authority
in fact or law Art. 1551 - If the property is sold for nonpayment of taxes due and not made
known to the vendee before the sale, the vendor is liable for eviction.
 He may exercise this right of action, instead of enforcing the vendor’s liability for
Art. 1552 - The judgment debtor is also responsible for eviction in judicial sales, eviction.
unless it is otherwise decreed in the judgment. The same rule shall be observed when two or more things have been jointly sold
Judgment debtor - one who is obligated to pay damages in accordance with a for a lump sum, or for a separate price for each of them, if it should clearly
judgment entered by a court. appear that the vendee would not have purchased one without the other.

Art. 1553 - Any stipulation exempting the vendor from the obligation to answer Art. 1557 - The warranty cannot be enforced until a final judgment has been
for eviction shall be void, if he acted in bad faith. rendered, whereby the vendee loses the thing acquired or a part thereof.

Art. 1554 - If the vendee has renounced the right to warranty in case of eviction, Art. 1558 - The vendor shall not be obliged to make good the proper warranty,
and eviction should take place, the vendor shall only pay the value of which the unless he is summoned in the suit for eviction at the instance of the vendee.
thing sold had at the time of the eviction. Should the vendee have made the
waiver with knowledge of the risks of eviction and assumed its consequences, the Art. 1559 - The defendant vendee shall ask, within the time fixed in the Rules of
vendor shall not be liable. Court for answering the complaint, that the vendor be made a co-defendant.

Art. 1555 - When the warranty has been agreed upon or nothing has been Art. 1560 - If the immovable sold should be encumbered with any non-apparent
stipulated on this point, in case eviction occurs, the vendee shall have the right burden or servitude, not mentioned in the agreement, of such a nature that it
to demand of the vendor: must be presumed that the vendee would not have acquired it had he been aware
1. The return of the value which the thing sold had at the time of the thereof, he may ask for the rescission of the contract, unless he should prefer the
eviction, be it greater or less than the price of the sale; appropriate indemnity. Neither right can be exercised if the non-apparent
2. The income or fruits, if he has been ordered to deliver them to the party burden or servitude is recorded in the Registry of Property, unless there is an
who won the suit against him; express warranty that the thing is free from all burdens and encumbrances.
3. The costs of the suit which caused the eviction and, in a proper case, Within one year, to be computed from the execution of the deed, the vendee may
those of the suit brought against the vendor for the warranty; bring the action for rescission, or sue for damages.
4. The expenses of the contract, if the vendee has paid them; One year having elapsed, he may only bring an action for damages within an
5. The damages and interests and ornamental expenses, if the sale was equal period, to be counted from the date on which he discovered the burden or
made in bad faith. servitude.

Art. 1556 - Should the vendee lose, by reason of the eviction, a part of the thing SU BSECTION 2 - WARRAN TY AGAIN ST HIDDEN DEFECTS OF, OR
sold of such importance, in relation to the whole, that he would not hvae bught it EN CU M BRAN CES U PON , THE THIN G SOLD
without said part, he may demand the rescission of the contract; but with the
obligation to return the thing without other encumbrances than those which it Art. 1563 - In the case of contract of sale of a specified article under its patent or
had when he acquired it. other trade name, there is no warranty as to its fitness for any particular
purpose, unless there is a stipulation to the contrary. been made, should be of such a nature that expert knowledge is not sufficient to
discover it, the defect shall be considered as redhibitory.
Art. 1564 - An implied warranty or condition as to the quality or fitness for a But if the veterinarian, through ignorance or bad faith, should fail to discover or
particular purpose may be annexed by the usage of trade. disclose it, he shall be liable for damages.

Art. 1565 - In the case of a contract of sale by sample, if the seller is a dealer in Art. 1577 - The redhibitory action, based on the faults or defects of animals,
goods of that kind, there is an implied warranty that the goods shall be free from must be brought within forty days from the date of their delivery to the vendee.
any defect rendering them unmerchantable which would not be apparent on The action can only be exercised with respect to faults and defects which are
reasonable examination. determined by law or by local customs.

Art. 1566 - The vendor is responsible to the vendee for any hidden faults or Art. 1578 - If the animal should die within three days after its purchase, the
defects in the thing sold, even though he was not aware thereof. vendor shall be liable if the disease which caused the death existed at time of
This provision shall not apply if the contrary has been stipulated, and the vendor contract.
was not aware of the hidden faults or defects in the thing sold.
Art. 1580 - In the sale of animals with redhibitory defects, the vendee shall also
Art. 1567 - In the cases of articles 1561, 1562, 1564, 1565, and 1566, the enjoy the right mentioned in article 1567; but he must make use thereof within
vendee may elect between withdrawing from the contract and demanding a the same period which he has been fixed for the exercise of the redhibitory
proportionate reduction of the price, with damages in either case. action.

Art. 1569 - If the thing sold had any hidden fault at the time of the sale, and Art. 1581 - The form of sale of large cattle shall be governed by special laws.
should thereafter be lost by a fortuitous event or through the fault of the vendee,
the latter may demand of the vendor the price which he paid, less the value Art. 1541 - The provisions of the two preceding articles shall apply to judicial
which the thing has when it was lost. sales.
If the vendor acted in bad faith, he shall pay damages to the vendee.
Art. 1571 - Actions arising from the provisions of the preceding ten articles shall Art. 1543 - The actions arising from articles 1539 and 1542 shall prescribe in
be barred after six months, from the delivery of the thing sold. six months, counted from the day of delivery.

Art. 1575 - The sale of animals suffering from contagious diseases shall be void.
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 contract, and they are found to be unfit
therefor.

Art. 1576 - If hidden defect of animals, even in case a professional inspection has