LAW ON SALES

2
SALE DACION EN PAGO
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefore a price certain Difference Source of Obligation extinguishes an obligation
in money or its equivalent.
there is a need fo PRE-
Requirement no requirement
EXISTING obligation.
Characteristics of a contract of Sales:
C CONSENSUAL - Perfected by mere consent; 3 SALE BARTER
B BILATERAL contract; Consideration money > value money < value
C COMMUTATIVE;
P PRINCIPAL; ORDER OF PRIORITY
O ONEROUS; and 1. Manifest intention
N NOMINATE.
2. what parties will
*Delivery constitutes tranfer of ownership; receive
*Subject matter must be determinate thing;
4
SALE AGENCY TO SELL

DISTINGUISHMENT Ownership transeferred upon delivery not transferred

SALE CONTRACT FOR A PIECE

1
OF WORK risk of loss is with the buyer risk of loss remains with the
after delivery
mftd in ordinary manufactured specially for the already principal-owner
Goods are: course of business customer
Subject matter thing & delivery service *RES PERIT DOMINO
Importance of Distinction: for purposes of applying the Statute of Frauds
 TO TAKE CARE OF THE THING AFTER THE SALE HAS BEEN PERFECTER, PRIOR TO DELIVERY
VENDOR/ TO DELIVER AGAINST EVICTION
SELLER TO WARRANT THE THING HIDDEN DEFECTS
OBLIGATION & RIGHTS OF MERCHANTABILITY
PARTIES TO TRANSFER OWNERSHIP FITNESS OF GOODS
TO PAY TAXES AND INCIDENTS OF THE SALE
ON INSTALLMENT
VENDEE/ PAYMENT TERMS (personal & real property)
BUYER TO ACCEPT DELIVERY
W/ REDEMPTION
(conventional & legal)
by sample
WHAT OBJECT by description
by sample AND description

AS STIPULATED
TO DELIVER WHEN if buyer pays seller shd deliver otherwise: seller=delay
IF NO STIPULATION
if seller delivers buyer shd pay except: IF stipulated

AS STIPULATED 1. Accept 1000 

HOW MANY & Reject 200 
DIFFERENT FROM STIPULATION
divisible B's option 2. Accept 1200 
illust: B buys 1000pcs at P100 & Pay for 1200 
1200
3. Reject 1200 
indivisible B's option 1. Accept 1200 
Seller delivers
2. Reject 1200 
1. Accept 800 
800 B's option
2. Reject 800 
(buyer cannot be compelled to accept partial delivery if that was
stipulated)
 Actual Delivery Traditio Longa Manu long-hand delivery e.g., the thing is leased by another.
Consitutum Posessorium e.g. Sale and lease-back (nakay seller parin)
MODES OF Constructive delivery Brevi Manu Short-hand delivery e.g. lessee who buys the thing leased.
DELIVERY Symbolic Delivery seller merely gives the key to a warehouse
Execution of the required Formality e.g. by execution of a public instrument.
Delivery to a common carrier
By execution of an instrument
As to rights Quasi Traditio

if object is entirely lost the contract shall be without any effect.

LOSS OF THE THING withdraw

pending delivery if partly lost buyer may: OR
demand the remaining part &
pay its price proportionately

goods perished w/o knowledge buyer may treat the as avoided

of the seller sale: as valid

GR: the thing perishes with the owner, following the principle of RES PERIT DOMINO
RISK OF LOSS
exceptions: a. Stipulation
b. Security title
c. Delay in the delivery whoever causes the delay shall bear the risk of loss.

GR: the buyer acquires no better title to the goods than the seller had.

SELLER IS NOT THE

OWNER a. Authorized seller
b. Statutory or judicial authority to sell
exceptions: c. Estoppel Estoppel in pais owner led the buyer to believe that the seller had authority to sell.
Estoppel by deed if after the sale, the seller acquired ownership, such ownership automatically passes to the buyer as to
the thing already delivered
d. Sale of an Apparent owner
e. Purchase from a Merchant Store, market or fair
 EXPRESS - as stipulated illust: to vacate
B refused 2027
1 Buyer is deprived of the object 2023 B 2024 W->court W vs. B
2 Deprivation = lawful -> COURT A squatters- concept of A sells A defend title
1. against Evition 2055
3 Due to a right already existing at (reg owners
the time of sale owner) C 2026 Y->court Y vs C
TO WARRANT to vacate
4 Seller was given the opportunity C refused
THE THING to defend his title Spanish Title
IMPLIED (not registered at Land
Reg Act) W 
Except if waiver FMV of property at 1. Registered LRA -> Special Law -A 
S liable=
in case of breach warrant, waived consiente time of eviction Y 
Remedies of the vendee: COURT decision
A. withdraw waiver S no longer liable in 2. NOT reg LRA General law
B. Accion quanti minoris intencionada case of eviction (Spanish title) (Civil Code)

2. against Hidden not hidden - Caveat emptor possed tenant W 

1
Defects (Let buyer beware) by B&C agent -A 
Redhibitory defects in animal caretaker Y
*must be exercised w/n 40 days. hidden - Caveat Venditor W
* must die w/n 3days after purchase (Let Seller beware) >30years squatter <30yrs -A 
*Sale of large cattle is governed by owner becomes 2 squatters Y
special laws. If waived --- S aware of defect = VOID squatter >30yrs -B 
-C 
not aware of defect = valid W
VOID sale of animals: "As is where is" Is A liable for breach of sale ------2055
B=31yrs -W 
1) animal suffering from warranty against eviction? possession-2024
contagious disease the thing does its purpose
2) unfit for its purpose 3. Merchantability the object sold is w/n commerce Y
if perishable goods are sold, warranty must also be sale ------2055
C=29yrs -Y 
perishable. possession-2026
general purpose (at the time of sale C has no right yet. So Y
4. FITNESS OF GOODS should have defended his title before
prescription.)
specific purpose -- if stipulated
5. Warranty against non-apparent encumbrances -remedies w/n 1 year to rescind & ask damages.
 VALID no defect
contract voidable
illust:
M=16yo good faith- NO defect
TO TRANFER TITLE = 2027 B sells K(18yo) pays title:
2023 sells 4M H&L
OWNERSHIP SELLER bad faith- w/ DEFECT
B=legal age -- pays (may be anuled by
M)
VOID
contract GF Title Can O recover? Is O req to reimburse?
illust: B Void   (B goes to jail for violating antifencinfg law)

O's necklace S store Void   (S store will be incarcerated)

Buyer from
stolen by T T sells S Store
Valid  
VOID Buyer from (Owner has better right)
public Sale
Valid  

RECTO LAW
PAYMENT W/ TERMS ON INSTALLMENT OF PERSONAL PROPERTY
illust:
possession
S sell car (500k) B ownership B
(contract of sale) chattel mortgage -security of seller in case of default

1 default S to exact fulfillment to demand payment for the balance

no longer seller
Installment = 5 years B defaults in to exact fulfillment S becomes a creditor
payment of lost the right to foreclose the mortgage
installment (3ook)
2/more cancel the sale seller/buyer returns payment made and object
300 S
340 40 S
to foreclose the chattel mortgage =proceeds 250 S
250 50 S (stip -- B) 
illust 2:
S leases Machine B for 1 year

rent = P200/month (hence, considered installment payment)

terms
with option to buy (considered sale of property in installment)

S demands B to pay P4000

pays Jan-Sep (2k*9mos) = P18000 balance

B DEC -S repossessed the Machince
defaults Oct & Nov = P4000
B demands return of P18000


MACEDA LAW
PAYMENT W/ TERMS ON INSTALLMENT OF REAL PROPERTY
illust: Possession = B
S sells H&L to B installment = 25 yrs contracts to sell Ownership/ Title = S

>Industrial Land >Tenants under Agrarian Reform >Housing Loans of PAG-IBIG,

Sale / Financing
B defaults payment in NOT applicable >Commercial Bldg >Bank Financing GSIS, and others
Installment Sale to tenants under Land Reform Code

residential H&L
APPLICABLE Sale/ Financing
Condominium (residential, industrial, commercial)
Realty Inst. Buyer
Protection act add'l interest
(MACEDA LAW) Grace period to pay unpaid NO Penalty
installment less than 2 yrs = 2 months
Remedy for: (paid installment Payment 2 yrs/more = 1 month / yr of payment Remedy for:(paid installment
for less than 2 years) for more than 2 years)
available once every 5 yrs
50% of paid installments &
If S cancels the contract =S should return CSV max=90%
5% per year of payment
illust: illust: CSV
300 S 5 yrs = 50%
340
40 B 8 yrs 65% = P650000
to foreclose =proceeds 250 S 3yrs x 5% = 15%
250
50 B payment P1M
5yrs =50%
18 yrs 90% = P900000
13yrs x5% = 65%

CONVENTIONAL =by agreement as stip

if w/ stip
up to when is the period
Pacto de retro Sale = Sale w/ right to repurchase to repurchase?
max=10yrs

TERMS OF PAYMENT W/ REDEMPTION if NO stip = 4 yrs

co-owners
LEGAL =by operation of law
adjorning land owners

W/ CONVENTIONAL REDEMPTION -known as "Pacto De Retro Sale "

illust: 2033
@ 2/25/23 25 25-Feb-33
when is the last day to 24 - 3 days 3 leap years (24,28,32)
FEB
S PDRS B repurchase? 23 22-Feb-33
22 
(w stip = S can repurchase w/n 10yrs)
HEIRS:
can W repurchase? 
W 1/3
1/3 
can W repurchase the 1 whole 
S dies before the
repurchase Y 1/3
Right to repurchase whole 
(1'1'2033) B can require W to
1/3 
repurchase
B has no right to 
Z 1/3 decline repurchase
illust 2:
1) WYZ PDRS B {Can W alone repurchase?}  but w/ NO right to dictate how big / small to repurchase
1/3 W
VALID
1/3 Y
W PDRS 1/3 B 
2) Y PDRS 1/3 B  Independent contracts
1/3 Z
Z PDRS 1/3 B 

W repurchase his 1/3?  FMV > 25M

CAN 1) SP - unusually inadequate
B require W to repurchase the whole?  SP = 8M

illust 3: 2) Buyer retain part of the purchase price

A
possess
8M PDRS -w/ stip A can repurchase up to due date: 2/25/27
retains the right use
B enjoy fruits
3) Seller
mortgage @ 2/25/27 {is B the Contracts purporting to PDRS
FMV>25M A fails to absolute will only be considered pays for taxes
repurchase owner?} EQUITABLE MORTGAGE if
 4) The period to repurchse was extended
5) Can be inferred that the true agreement is merely Equitable
Mortgage

W/ LEGAL REDEMPTION
illust:
Co-owners W 1/4 If a co-owner sells his share to a third person, the other
Deed of Absolute
1) WX B = 1/2 co-owner can repurchase thru redemption even if not
1/4 W Sale
X 1/4 PDRS
Y repurchase what W & X sold to B? 
1/4 X
Can Z repurchase what W&X sold to B? 
Y & Z repurchase?  Proportionately
1/4 Y
2) WX DOAS W 1/4 1/4 If a co-owner sells his share to another co-
1/4 Z Y 3/4
X 1/4 1/2 owner then the other co-owner cannot
repurchase
Can Z repurchase what W & X sold to Y? 
 area = not more than 1 hectare ALO can repurchase
&
RURAL -agricultural sold to buyer 2/more = owner w/ smallest area
&
buyer already owns rural land tie = fist to offer to repurchase

So situated that majority part of Right of pre-emption

Residential the land has NO practical use (right of first refusal)
LEGAL URBAN Commercial ALO
REDEMPTION Industrial Previously acquired for If not given:
speculation Right of redemption

ADJORNING 2/more= most beneficial

LAND OWNERS

Dominant Estate paty gaining beneift of

w/ EASEMENT OR (inner) easement
SERVITUDE COURT determines: LEAST injury
(right of Way) Servient Estate if will not voluntarily give
(outer) the right of way
*If dominant estate sells its land=
Serviant will be given Pre-emption

Lump Sum NO  even if there's  in area

area
TERMS not lump sum -unique as to value

upon delivery Loss due to FE

(ownership) (RES PERIT DOMINO)
Sale/Return B B
except if stip
On trial or satisfaction S S
LUMP SUM
illust:
S Contract:
sells land Approximately 1000 sqm
B SP=Lumpsum P1M

no decrease in price it should be exactly 1000sqm

950 sqm S delivers land 950sqm Except if Stip
B pays P1M B wil not buy if not 1000sqm
Actual Area
no increase in price
1100 sqm S delivers land 1100 sqm
B pays P1M Cancel the sale + damages
S insists to deliver 1000 sqm -B's option
B pays in proportion to land
delivered + damages

Actual -> Proportionate Reduction only (ACCION QUANTI MINORIS)

<
area 1/10
< Proportionate reduction
Actual ->Either or
NOT LUMP SUM Rescission
Prescriptive period:
Actual ->Proportionate reduction only 6 months
< from delivery
value 1/10
< Propportionate reduction
Actual ->Either or
Rescission
Co-owners SUBJECT MATTER PAYMENT FOR REDEMPTION MULTIPLE REDEMPTIONERS
Real Property Purchase price, unless grossly excessive all, pro-rata
Adjacent Rural Rural land Purchase price 1. Small lot area
land owners 2. if same area, first
Adjacent Urban Urban Land Purchase price One whose use is best justified
land owners
 1. Possessory lien mututally
RIGHTS OF AN 2. Stoppaage in transitu exclusive
UNPAID SELLER 3. Resale
4. Rescission

sales w/o any stipulation as to credit

Grounds: the term of credit has expired

buyer is insolvent
Possessory Lien

When the seller delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without
reserving the ownership in the goods or the right to the possession thereof;

Loss on possessory When the buyer or his agent lawfully obtains possession of the goods;
lien
By waiver.

seller already parted w/ the possession of the goods

Stoppage in Transitu Requisites: goods are already in transit

buyer is insolvent
intention to resell
goods are perishable in nature notice shall be given to original buyer the date, time and place of resale
Grounds: seller expressly reserves the right of resale in case the buyer should make default failure to give notice does not affect the validity
buyer has been in default for an unreasonable time of the resale.
Resale
LESS = S can recover from B difference
Proceeds damages
MORE = S is entitled

right to rescind is expressly reserved by the seller;

Rescission Grounds: buyer has been in default in the payment of the price for an unreasonable time.
seller may recover from B for damages for breach of contract