Sales Tsn - Final Coverageword

8/11/2019 Sales Tsn - Final Coverageword

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SALES TSN Atty. Jazzy Sarona (3RDCOVERAGE)Compiled by: Arafol, Canada, Cervantes and Javier (ADDU College Of Law Class of 20!"

By: Madel Malone-Cervantes

CONSUMMATION STAGE

So we are now with the 3rdstage in a Contract of Sale(CoS).

As we have emphasized last time, saconsummation

stage what you have is the parties exercising theirrespective oligations. !or the seller to transfer, asedon "#$%, the possession and deliver the ownership ofthe su&ect matter and for the uyer to pay the price.

'ow lets go specically to the oligations of the seller.*viously, nandyan na yong"#$%, diba+

ART. 145.y the contract of sale one of thecontracting parties oligates himself to transfer theownership of and to deliver a determinate thing, and theother to pay therefor a price certain in money or itse-uivalent.

A contract of sale may e asolute or conditional.("##$a)

ut of course there are also other oligations of theseller. ememer, we are still dealing with a CoS. So, wecan still apply the provisions under *liCon.

*ne oligation of the seller, of course, he still has theoligation is to preserve the su&ect matter (S/). 0hat isunder ""13.

ART. 11!". 2very person oliged to give something isalso oliged to tae care of it with the proper diligenceof a good father of a family, unless the law or thestipulaton of the parties re-uires another standard ofcare. ("45#a)

6iewise, if you rememer under ""1#, ""11 in yourcontract, delivery of the fruits as well as its accessories.

ART. 11!4.0he creditor has a right to the fruits of thething from the time the oligation to deliver it arises.7owever, he shall ac-uire no real right over it until thesame has een delivered to him ("45$)

ART. 11!!.0he oligation to give a determinate thingincludes that of delivering all its accessions andaccessories, even though they may not have eenmentioned. ("458a)

3rd, of course delivery of the S/ as provided in "#$% aswell as you can also see it under "#88.

ART. 14##.0he ownership of the thing sold shall etransferred to the vendee upon the actual orconstructive delivery thereof.

ememer that what is involved in a CoS is a 2A6oligation. So it is susceptile of specic performance.Again, while a CoS is a consensual contract perfected ymere consent it involves real oligations. ememerwhen you had olicon you must e ale to distinguished9yungperfection of a contract is a real $ontra$tperfected y mere delivery. ut its di:erent when wesay real o%l&'at&on. 7ere in a contract of sale we havea consensual contract involving real oligations.

#th

oligation of a seller is to warrant the S/. ;f you looat the outline we will get to that with regard towarranties and conditions.

And then lastly, with regards to the expenses andexecutions and registrations of the thing sold thegeneral rule is that the seller ears the expensesthereof.

'ow, where not going to dwell much on the preservationthe oligation to preserve and the oligation to deliver

the fruits and accessories.


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latin maxim, =nemo dat quod non habet> no one cangive that which he does not have.

So with regard to tradition or delivery as mentioned itcan e actual or constructive. 7owever tae note thatthere is that CoS as provided in "#8%. As the partiesmay stipulate that ownership shall not pass to the uyeruntil he has fully paid.

;n other words, even if there was already delivery, aslong as the parties agreed that ownership will not etransferred until it has een fully paid, then you onlyhave a contract to sell and no transfer of ownership.


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payment of the price is di:erent from the oligation todeliver. 0he sale of the su&ect tractor wasconsummated upon the execution of the pulicinstrument. And at this time constructive delivery wasalready a:ected.

So that is with regard to movales, we have "#5%, "#55.Another thing that we can also consider is "$"3, withregard to negotiale documents of title. ;n our nextmeeting well have rief discussion sa documents oftitle. 'ow, with the person to whom the negotiale titlehas een negotiated ac-uires the right of the person towhom delivery shall e maid y the terms of thedocument.

So we have here already three (3) types of constructivedelivery.

'ow again rememer, revi manu is not the opposite oflonga manu ut what is the opposite of revi manu isconstituum possessorium.0his is the opposite ofrevi manu. Sa revi manu, the uyer is already inpossession of the property, so constructive delivery isy traditio revi manu.


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to the uyer on delivery, ut he may revest theownership in the seller y returning or tendering thegoods within the time xed in the contract, or, if no timehas een xed, within a reasonale time.

descrie lang sa inyo ng seller, sige ilhino yon, description lang. Second is, sale by sample!may pinaita sayo si seller and ased on that you agreeto enter into a CoS. ut what was shown to you is notreally what will e delivered to you.


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prescriptive period from the last delivery of the S/. Sohere Iuly "514. year prescriptive periodapplies to contract generally, ut since "$8" isapplicale to sales in particular, then we have to apply"$8", the 1>mos. delivery prescriptive period. So taenote of this case of 6a !uerza.

'ow, with regard to sale y description, y sample oracceptance, the uyer tae note, has the right to

inspect the S/ efore acceptance. 0his was provided in"#%" and "$%#.

;n fact, in the case of 6a !uerza this is very clear, 6a!uerza could have refuse to accept the thingimmediately, ut failed to act and therefore nag>prescrie na 9yong anilang right to -uestion thedelivery. 7owever, this right to inspect is su&ect toexception when the carrier delivers cash ondeliveryNcollect on delivery (C*E). So you have thereArticle "$%#. Again, we must give the uyer the right toinspect efore acceptance, as a L.

"ale per unit price or number

7ow aout the case of immovales, you have toconsider a land, a parcel of land is the S/ in a CoS. 0heparcel of land may e sold per unit or y numer, liefor example 3,444 per s- m, or it can e sold as a lumpsum, for this property covered y this title, the purchaseprice is this much.

So you have Articles "$35 and "$#4 with regard toimmovales, which are sold per unit or numer. Soexample, 3,444 per s- m parcel of land. ;n a unit pricesale, the statement of the area of immovale is notconclusive and the price may e reduced or increase,depending on the area actually deliver. So again, if youragreement etween the seller and the uyer is per unit,3,444 per s- m. Dahit for example sa contract ilagay

ninyo 3,444 per s- m, sa "44 s- m. 7ow much wouldthat e+ 344 thousand, tama+ Ei ayo sure+ So, "44 s-m x 3,444, so 344 thousand.

;f upon delivery what was delivered is less than"44s- m, if the vendor delivers less than the area agreedupon, the vendee may oliged the vendor to deliver allthat is stated in the contract 9yong "44 s- m or demandfor the proportionate reduction of the purchase price.add si vendee.

0ae note ha, in this case, the vendee may resort torescission if the di:erence is more than "N"4 of whatwas agreed upon etween the parties.

Also tae note that if is more than, what was deliveredis more than what was agreed upon, the vendee cannot

withdraw from the sale. Ang choice nya is, to deliverwhat was agreed upon, or to deliver everything ut thevendee will have to pay the additional price.

&ump "um "ale

Ei:erentiate it from Article "$#, where the property issold for a lump sum. ;n a lump sum salewhen the landdelivered to the uyer is exactly as that descried and

covered within the oundaries designated, covered ytitle numer. 0he di:erence in actual area would notauthorize the uyer to rescind the contract, ecause theseller has complied with delivering S/ agreed upon,9yong covered sa title. 'ow, this true when evidenceshows that the parties never gave importance to thearea of the land in xing the price.

7owever, if it turns out that it was made nown to theseller, na kung hindi ganito kalaki angparcel of land,lie for example, the example, ; can give you is with9yongmag>franchise ka nggasoline station, ; thin theyhave specic area and youre going to purchase thisproperty and you inform the seller you are going to useit as a gasoline station, thats why you need this much

of land. ;f it turns out that yong0C0 not specic as toagreement as to the price is not to per s- m ut as tothe property itself. ut since your intention was madenown to the seller, if there is a discrepancy whichwould result na hindi mo makuha yongfranchise kasihindi s+ya e-uivalent to what is re-uired, then you canas for rescission, otherwise, hindi p+wede. Again, showyour intention in a lump sum sale so that you can-uestion if there is di:erence as to the -uantity of theparcel of property.

7owever tae note, maye youve seen this in a deed ofasolute sale, when sold in gross or with a description=more or less, it covers only reasonale excess ordeciency. So tae note, reasonale excess ordeciency will not a:ect a sale in lump sum unless ofcourse ali ayo doon sa intention of the parties.

'o% about the place o delivery o "#?Article"$", as provided or agreed upon y the parties. *r,ung walang agreement, sellers place of usiness orresidence.

;f you are taling aout movable goods, at the timewhere the specic goods are located, or place at thetime of the perfection of contract. 0his is similar to theL in contracts.

Double "ales


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!irst, there must e two or more sales which are valid.So again, important pa rin 9yon, so the sales heremust e valid.

Second, these two or more sales must pertain exactly tothe same S/. Again, exactly the same S/.

0hird, the uyers must represent conPicting interest.prolema usually+ Saanmaraming aso+

Sa real property/immovables. register, rst inpossession in L!, ung walang registration or walang inpossession, oldest title in L!.

What do %e mean by oldest title? )ino yong unangnag-perfection of CoS.

Eo not apply this "$## if not all elements on doule saleare present, alright.

'ow, registration sa real property.


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should approve the Assumption of /ortgage, hence theyentered into a Contract to Sell. ;n as much asrespondents applied loan, the condition did not ariseand conse-uently the Sale was not perfected thereforehe can freely dispose it.

0CG Sale was never perfected. CAG Contract executeddid not impose condition and they entered into a

Contract of Sale. 7ence, petitioners no longer ownedthe properties when they sold it to Jilloria.

So we have here contracts. 0he "stwas executed/arch "553 in favor with espondent *ng. 0he ndwasafter that, no date, in favor of Jilloria.

0he "stdeed executed stated that petitioner sold theproperty to respondent in a manner asolute andirrevocale for the sum of @"." /. 'othing implied thatthere was condition imposed or that petitioner reservedownership until full payment of purchase price. Also,there was constructive fulllment or transfer ofownership. 0hus we can apply "$##. So who has etterright+ *ngH conveyance of the southern portion, withdamages.

0C favored petitioners.

CA however reversed the decision and ruled that whilethe registration of the southern portion in the name of*CK/A sps. had created an implied trust in favor ofAgaton @agaduan, petitioners, however, failed to showthat they had taen possession of the said portion.7ence, the appellate court concluded that prescriptionhad set in, therey precluding petitioners recovery ofthe disputed portion.

So there was valid Contract of Sale.

;n this case there was a "stsale y 2?2S to ALA0*'@ALAEKA' and a ndsale y 2?2S to *CK/A sps. !or anduyer lie the *cuma sps. to successfully invoe the

nd

paragraph of Article "$## of the Civil Code, it mustpossess L! from the time of the sale in its favor untilthe registration of the same. 0hey sorely failed to meetthis re-uirement of L! since they had actual nowledgeof eye prior sale of the southern portion property tothe petitioners, a fact antithetical to good faith.

0his cannot e denied since in the SA/2 unilateral Eeedof Sale that eyes sold them the northern portion to*uma sps. and southern portion to @agaduan. 0hus thesuse-uent 0C0 to the extent that it a:ects the@agaduans portion conferred no etter right that theregistration which was the source of the authority toissue the said title. Dnowledge gained y respondents ofthe rst sale defeats their rights even if they were rst

to register the second sale. 3no


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'ow with regard with L!N!, this is the usual issue indetermining "$##. ;t is important to note that L!N!,how+ ingnankaninongL! ang gina>determine, whetherits with "stof nduyer. Also tae note, ! will onlyresult if it was caused y nowledge of =prior sale.

Again as ; emphasized last time, this is a very importantprovision. ;t will most liely e ased in the ar (yayH)

and also important in practice ito yung maramingissuesnoh you will most liely encounter this. Ksually ecausethe "stsale was not registered.

OBIGATIONS O, T0E BU+ER0he main oligationsunder Art&$le 15:

". 0he vendee is ound to accept delivery

. @ay the price of the thing sold at thetime and place stipulated in the contract

Another thing that we may also notice, another oli as

we go along is to

". @ay expenses with regard to delivery.

Art. 15.0he vendee is ound to accept delivery andto pay the price of the thing sold at the time and placestipulated in the contract.

;f the time and place should not have een stipulated,the payment must e made at the time and place of thedelivery of the thing sold. ("$44a)'ow Article "$% ndparagraph says if time and place should not have eenstipulated, the agreement must e made at the timeand place of delivery of the thing sold.

0ae note, unless the parties of the sale agreed to the

payment of purchase price to any other party or 3 rdperson, then payment should e made to the seller for itto e e:ective. 0his is in accordance with Art&$le 14)under your *liCon which provides that payment shalle made to the person in whose favor the oligation haseen constituted or his successors>in>interest or anyperson authorized.

;f you will pay,pagpunta mo sa bahay wala si seller ehayoko ng bumalik kasi magastos kapy hago iniwan mosa kapitbahaypero hindi naman ibinigay dun kay seller.Can the seller compel you to pay the purchase price+?es ecause that was not a valid payment, the one tothe neighor.(ng problema mo habulin mo yung

kapitabahay. ut you cannot refuse to pay the seller asyou had not made valid payment yet.

ememer that a CoS is a reciprocal contract as wevediscussed, so a vendor is not re-uired to deliver su&ectmatter until the price is paid nor the vendee to pay theprice efore the S/ is delivered to him. So general ruleit is reciprocal noh, delivery, bayad kaagain sabi natinnohreciprocal, if the other party is ready to comply witholi and the other is not then rescission can e resortedto.

elate this to Art&$le 154.

Art. 154. 0he vendor shall not e ound to deliver the

thing sold, if the vendee has not paid him the price, or ifno period for the payment has een xed in thecontract. ("#11)Jendor shall not e ound to deliver thething sold if the vendee has not paid him the price or ifno period to pay has een xed in the contract. ;fstipulated, the vendee is ound to accept delivery andto pay the price in the place designated. ;f there is nostipulation as to the time and place of payment thevendee is ound to pay at the time and place ofdeliveryM And in the asence of stipulation as to theplace of delivery, you apply Art&$le 151.

Art. "$". @ayment shall e made in the placedesignated in the oligation.

0here eing no express stipulation and if theundertaing is to deliver a determinate thing, thepayment shall e made wherever the thing might e atthe moment the oligation was constituted.

;n any other case the place of payment shall e thedomicile of the detor.

;f the detor changes his domicile in ad faith or afterhe has incurred in delay, the additional expenses shalle orne y him.

0hese provisions are without pre&udice to venue underthe ules of Court. (""8"a)@ayment shall e made inthe place designated in the oligation there eing noexpress stipulation and if the undertaing is to deliver adeterminate thing, payment shall e made whereverthat thing might e at the moment the oli wasconstituted. ;n any other case, place of payment shalle the domicile of the detor.

'ow if only the time of delivery of the thing sold haseen xed in the contract, the vendee is re-uired to pay

even if efore the thing is delivered to him. 0his is withregard to Conditional Sales.

'ow if only the time for payment has een xed, thevendee is entitled to delivery even efore the price ispaid y him.


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delivery.


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that he refuses to accept them. ;f he voluntarilyconstitutes himself a depositary thereof, he shall eliale as such. (n)So the oligations of the uyer in thisarticle will not e as a uyer already ut as a9depositary, thats contract of deposit. 0ae note hedoes not have the oli to deliver ac to the seller utas long as it is in his possession it is considered asdepositary which is essentially he still has to pay a XXXX

or the said goods.

Art. 15.;f there is no stipulation as specied in therst paragraph of article "$3, when the uyerYs refusalto accept the goods is without &ust cause, the titlethereto passes to him from the moment they are placedat his disposal. (n)So ung walang stipulation then angagreement is delivery to carrier, if the uyer has no&ustiale reason to refuse acceptance then ahitnaali sa carrier ang goods asi nga hindi nag>acceptsi uyer, title already passes to the uyer and thus incase of loss it is the uyer who shall ear it. Aryt+

Art. 15(.0he vendee shall owe interest for the periodetween the delivery of the thing and the payment of

the price, in the following three casesG (") Should it have een so stipulatedM

() Should the thing sold and delivered produce fruitsor incomeM

(3) Should he e in default, from the time of &udicialor extra&udicial demand for the payment of the price.("$4"a)0his one is with regard to ;'022S0. 0he vendeeshall hold interest for the period etween the delivery ofthe thing and the payment of the price in 3 casesG

". ;f it has een stipulatedM

. Should the thing sold and deliveredproduce fruits or incomeM

3. Should he e in default from time of&udicial or extra&udicial demand for payment ofthe price.

Art. 15(). Should the vendee e distured in thepossession or ownership of the thing ac-uired, or shouldhe have reasonale grounds to fear such disturance,y a vindicatory action or a foreclosure of mortgage, hemay suspend the payment of the price until the vendorhas caused the disturance or danger to cease, unlessthe latter gives security for the return of the price in aproper case, or it has een stipulated that,notwithstanding any such contingency, the vendee shall

e ound to mae the payment. A mere act of trespassshall not authorize the suspension of the payment of theprice. ("$4a)0his article gives the uyer a ground tosuspend the payment of the price.


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(&ust read the provi elow, same as what she said)

Art. "131. ;n the preceding articles in this 0itlegoverning the sale of goods, unless the context orsu&ect matter otherwise re-uiresG

(") VEocument of title to goodsV includes any ill oflading, doc warrant, V-uedan,V or warehouse receipt ororder for the delivery of goods, or any other document

used in the ordinary course of usiness in the sale ortransfer of goods, as proof of the possession or controlof the goods, or authorizing or purporting to authorizethe possessor of the document to transfer or receive,either y endorsement or y delivery, goodsrepresented y such document.

VLoodsV includes all chattels personal ut not thingsin action or money of legal tender in the @hilippines. 0heterm includes growing fruits or crops.

V*rderV relating to documents of title means an ordery endorsement on the documents.

VUuality of goodsV includes their state or condition.

VSpecic goodsV means goods identied and agreed

upon at the time a contract of sale is made. An antecedent or pre>existing claim, whether formoney or not, constitutes VvalueV where goods ordocuments of title are taen either in satisfactionthereof or as security therefor.

() A person is insolvent within the meaning of this0itle who either has ceased to pay his dets in theordinary course of usiness or cannot pay his dets asthey ecome due, whether insolvency proceedings haveeen commenced or not.

(3) Loods are in a Vdeliverale stateV within themeaning of this 0itle when they are in such a state thatthe uyer would, under the contract, e ound to tae

delivery of them.'ow what is the purpose with thesedocuments of title+ 0hese are evidence of control andaccession or control of goods descried in the saiddocument. ;t is also a medium of transferring title orpossession over the goods descried in the saiddocument without having to e:ect 9actual delivery.ememer when we taled aout delivery ; referred toscenarios with documents of title. negotiale.

NEGOTIABEQ ;t is stated in the document of title that

the goods shall e delivered to the earer in which,sinong may hawa. 'egotiation y mere delivery, soung anino mo ipasa yung goods, that is already anegotiation of document of title.

;t is also negotiale y the order of " person. So what dowe mean y =order here, you have endorsement, mysignature for example, iaw naapangalan sawarehouse receipt and naalagay dun =it is negotialeso =y order (+), so para itransfer mo to another

person, you have to endorse it aFxing your signatureand deliver the document of title. Actually yung earerand order its the same with negotiale instruments.7owever, and di:erent sa doc of title is, even if maynaalagay na sa doc of title na =non>negotiale it canstill e negotiale as long as merong indication doon naearer xa or 9order. 0his is " of the distinguishing marof doc of title sa negotiale instruments. /ere words sa

doc of title E*2S '*0 E2S0*? negotiaility. ?ou cannotassail the same thing sa negotiale instruments.

'ow what if we have =*E2 ;'S0K/2'0 sai oelangan merong endorsement, you aFx yoursignature. ut what if it is an =*E2 E*CK/2'0 ut itwas delivered wNo endorsement, so what is the e:ect+ ;tis merely an assignment and not a negotiation.

'ow it is also possile that the document of title isB

NON-NEGOTIABE > ;t does not state that the goodsreferred therein would e delivered to the earer or tothe order of any person. So merong word na earer oforder, ahit na may naalagay &an ana =non>negotiale,

negotiale par in yan xa. 'gayon once walangnaalagay na =delivered to the earer or order to anyperson then that doc of title is considered non>nego.

'ow what happens if you have an =unauthorizednegotiation+ 0he validity of the negotiaility of thenegotiale document is not impaired y the fact thatthe negotiation was done in reach of duty or that theowner of the doc was deprived y the same.

2x. earer doc xa, nawala, so sino ang talagang earer,yung naaitaB what if yung earer magpunta sawarehouse iclaim nya yung goods what is the e:ect+ ;fthe person to whom the doc was delivered was in goodfaith and wNo notice of the said irregularity, in other

words si warehouse man pagtingin nya earer>instrument pagtingin nya sino yung nagpresent dun nyaiigay ang goods. 0hus he will not e liale in this case.Dc ung magrefuse din naman si warehouse man, xa narin ang may liaility. So that is the e:ect if it is anegotiale doc of title.

0ae note that the negotiation is a etter right than anassignment ecause in assignment, you only step in tothe shoes of the assignor. ?ou cannot have etter rightsover the assignor. ut if its negotiation, you can have aetter right than the one who negotiated it to you.

'ow what are the parties (+) on a negotiation of a doc of

title+". 0hat the document is XXXX

. 0he one who negotiated it to you had alegal right to negotiate

3. 0he one who negotiated it to you hadnowledge of no fact which could impair thevalidity or worth of the doc

#. 0hat he has the right to transfer title togoods

$. Loods are merchantale or XXXX

;f theres any violation of those warranties, the one towhom doc was negotiated can go after the person whonegotiated such doc of title to him.

So those are the general concepts with regard doc oftitle so &ust tae note of that.

'ow with regard to delivery through carrier, &ust taenote ofB

#age 13of 33


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Art&$le 15".owned dia wala namangspecied portion dia na eto ang sayo. So ideal sharexa, T of the property and meron. 7owever tae note ofthe exceptions wherein ownership can nevertheless etransferred or soldG

;f the property is indivisile

;f there is consent of other co>owners

;f y operation of law he ecomes the owner ofthe other parcels he co>owned.

So tae note of that. ;f it happens that the sale wasmade y non>owner, and he delivers it even if he is notthe ownerB GR: 'o transfer of ownership. E/CETION:ownerG

". 2stoppel y true owner

. 0orrens system

3. y order of courts

#. Sale of merchant store and marets.

By: Glor&a Ara=ol

#age 14of 33


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SALES TSN Atty. Jazzy Sarona (3r$COVERAGE)Compiled by: Arafol, Canada, Cervantes and Javier (ADDU College Of Law Class of 20!"

*o@%le Sales

Art&$le 1544.;f the same thing should have een soldto di:erent vendees, the ownership shall e transferredto the person who may have rst taen possessionthereof in good faith, if it should e movale property.

Should it e immovale property, the ownership shallelong to the person ac-uiring it who in good faith rstrecorded it in the egistry of @roperty.

Should there e no inscription, the ownership shallpertain to the person who in good faith was rst in thepossessionM and, in the asence thereof, to the personwho presents the oldest title, provided there is goodfaith. ("#83)

L2'2A6 K62G @rior tempore, @rior Iure Z!irst in time,stronger in right[

". e-uisitesG efore you apply, you must tae noteof the re-uisites "st.

a.) or more sales must e valid sales

.) or more sales must pertain to exactly the samesu&ect

c.) uyers must each represent conPicting interests

d.) uyers must each have ought from the very sameseller

'ote G if one of these re-uisites is present, thats thetime you apply "$##

K62S ACC*E;'L 0* 072 "$##

/*JA62S

o ownership shall e conrmed to the person whomay have taen possession in good faith

;//*JA62So person who in good faith recorded it in egistryof @roperty

o if thereYs no inscription, person who in goodfaith was rst in possession

o in asence thereof, to the person who presentsthe oldest title, provided theres good faith

'ow, the provision of doule sales, presumes the title orownership passes to the "st uyer. 6ets Lo to the cases

CORONE 6S. CA

CA' appellants omuloCoronel, et al. (Coronels) executed a document entitledVeceipt of Eown @aymentV in favor of plainti: amona@atricia Alcaraz (hereinafter referred to as amona)

Clearly, the conditions appurtenant to the sale are thefollowingG

". amona will mae a down payment @$4,444.44 uponexecution of the document aforestatedM

. 0he Coronels will cause the transfer in their names ofthe title of the property registered in the name of their

deceased father upon receipt of the @$4,444.44 downpaymentM

3. Kpon the transfer in their names of the su&ectproperty, the Coronels will execute the deed of asolutesale in favor of amona and the latter will pay theformer the whole alance of @","54,444.44.

*n the same date (Ianuary "$, "5%$), Concepcion E.Alcaraz (Concepcion), mother of amona, paid the downpayment of @$4,444.44.

*n !eruary 1, "5%$, the property originally registeredin the name of the CoronelsY father was transferred intheir names under 0C0'o. 384#3.

*n !eruary "%, "5%$, the Coronels sold the propertycovered y 0C0 'o. 384#3 to intervenor>appellantCatalina . /aanag (Catalina) for @",$%4,444.44 afterthe latter has paid @344,444.44. !or this reason,Coronels canceled and rescinded the contract withamona y depositing the down payment paid yConcepcion in the an in trust /or 1amona 2atricia(lcara3.

*n !eruary , "5%$, Concepcion, et al., led acomplaint for specic performance against the Coronelsand caused the annotation of a notice of lis pendens atthe ac of 0C0 'o. 38#43.

*n April , "5%$, Catalina caused the annotation of anotice of adverse claim covering the same property with

the egistry of Eeeds of Uuezon City (2xh. V!VM 2xh. V1V).*n April $, "5%$, the Coronels executed a Eeed ofAsolute Sale over the su&ect property in favor ofCatalina to which a new title over the su&ect propertywas issued in her name.

Iss@e:


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At te t&9e o= re'&strat&on tere=ore ?et&t&onerMa%ana' >ne< tat te sa9e ?ro?erty adalready %een ?rev&o@sly sold to ?r&vateres?ondents or at least se respondents herein, theSpouses 6u.

*n "5 Ianuary "554, herein petitioner San 6orenzoEevelopment Corporation (S6EC) led a !otion /or

Intervention1efore the trial court. S6EC alleged that ithad legal interest in the su&ect matter under litigationecause on 3 /ay "5%5, the two parcels of landinvolved, had een sold to it in a Eeed of Asolute Salewith /ortgage. S6EC stressed that after the execution ofthe sale in its favor it immediately too possession ofthe property and asserted its rights as new owner asopposed to aasanta who has never exercised acts of

ownership. Since the titles ore no adverse claim,encumrance, or lien at the time it was sold to it, S6ECargued that it had every reason to rely on thecorrectness of the certicate of title and it was notoliged to go eyond the certicate to determine thecondition of the property.

*n the other hand, respondent aasanta argued thatS6EC could not have ac-uired ownership of the propertyecause it failed to comply with the re-uirement ofregistration of the sale in good faith. 7e emphasizedthat at the time S6EC registered the sale in its favor on34 Iune "554, there was already a notice of lispendensannotated on the titles of the property made asearly as Iune "5%5. 7ence, petitioners registration of

the sale did not confer upon it any right.ISSUE:


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until the registration of the same. espondents sorelyfailed to meet this re-uirement of good faith since theyhad actual nowledge of 2ugenias prior sale of thesouthern portion property to the petitioners, a factantithetical to good faith. 0his cannot e denied yrespondents since in the same deed of sale that 2ugeniasold them the northern portion to the, 2ugenia also soldthe southern portion of the land to @agaduan. 0hus the

suse-uent issuance of 0C0, to the extent that it a:ectsthe @agaduans portion, conferred no etter right thanthe registration which was the source of the authority toissue the said title. Dnowledge of the rst sale lacensthis prior registration with ad faith. Lood faith mustconcur with the registration.

As the respondents gained no rights over the land, it ispetitioners who are the rightful owners, havingestalished that their successor>in>interest Agaton@agaduan had purchased the property from 2ugeniaeyes on 'ovemer 1, "51" and in fact toopossession of the said property. 0he action to recoverthe immovale is not arred y prescription, as it wasled a little over 8 years after the title was registered in

ad faith y the *cumas as per Article ""#" of the CivilCode.

CA*'26 vs CA

7ere, the "st purchaser registered the sale after thenowledge of the nd sale. 0his does not result to aregistration in ad faith. 0he fact that you registered itafter the ndsale does not a:ect you position as goodfaith. Caronel has a etter right here than infante.

SK//A?

;t may sound so simple pero hindi sya. So all re-uisitesmust e present. So here sa mga cases ,we have seen

that you cannot apply "$## in a contract to sell. ut wehave seen that it can e applied in a conditional contractof sale. tignan muna ong aninnong good faith or ad faithand gina-uestion.

nd>ad faith would only re-uest to a prior nowledge ofa prior sale.

LL'G ;f not all elements of doule sales are present

@;'C;@62G

@rior tempore, @rior Iure

Z!irst in time, stronger in right[

Eo not apply this principle if all the elements of doulesale are present.

A 44", 44$

". A sold land to > Iune "$, "55$

. A sold same land to C > Iune 34, "55$

3. *demand.

Sale is a reciprocal contract so the vendor is notre-uired to deliver the su&ect matter until the price ispaid. 'or the vendee to paid the price until the su&ectmatter is delivered to him in the asence of anyagreement.

Article 4578.he vendor shall not be bound to deliverthe thing sold, i/ the vendee has not paid him the price,or i/ no period /or the payment has been &ed in thecontract.

if stiulated the vendee is ound to accept theprice at the time and place stipulated. ;f theres none,the vendee is ound to pay at the time and place ofdelivery. ;n the asence of agreement of the placedelivery, follow article "$"

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Article 4754.2ayment shall be made in the placedesignated in the obligation.

here being no e&press stipulation and i/ theundertaking is to deliver a determinate thing, thepayment shall be made wherever the thing might be atthe moment the obligation was constituted.

In any other case the place o/ payment shall be thedomicile o/ the debtor.

I/ the debtor changes his domicile in bad /aith or a/terhe has incurred in delay, the additional e&penses shallbe borne by him.

hese provisions are without pre0udice to venue underthe 1ules o/ #ourt.

;f only the time of the delivery of the thing soldis stipulated in the contract the vendee is re-uired topay even efore the thing is delivered. 0his is withregard to conditional sales.

;f only the time of payment is made x, thevendee is re-uired to delivery even fore the price ispaid y him.

2xample, utang or sales on credit. Dung ungdetor di magayad ut at the time agreed upon, thevendee nevertheless entitled to delivery , there was asale on credit. Dung nadelivery muna tapos di magayadang uyer, pwede mo ang asta3x unin ang property+7indi. ;f the uyer refuses to return the property, youremedy is a &udicial recession of the sale or specicperformance

Article 456:.;nless otherwise agreed, the buyer o/goods is not bound to accept delivery thereo/ byinstallments.


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promise or warranty in the contract o/ sale. %ut, i/, a/teracceptance o/ the goods, the buyer /ails to give noticeto the seller o/ the breach in any promise o/ warrantywithin a reasonable time a/ter the buyer knows, orought to know o/ such breach, the seller shall not beliable there/or.

2ven if uyer Accepts, Seller Can Still e 6iale

eason for the last sentence. 0o preventafterthoughts or elated claims.

0he uyer is allowed to set up the reach ofthe war> ranty or promise as a set>o: or counterclaim forthe price.

2xceptionG ;f there has een an inaction on the part ofthe uyer for a considerale length of time.

Article 456 ery

uyer has no duty to return the goods to theseller

mere noti+cation to seller of refusal will suf+ce

ut uyer may mae himself a voluntarydepositary QQ in which case he must safely tae care ofthem in the mean time

Article 4566.I/ there is no stipulation as specied inthe rst paragraph o/ article 45@A, when the buyerBs

re/usal to accept the goods is without 0ust cause, thetitle thereto passes to him /rom the moment they areplaced at his disposal

"$3 refers to the delivery of carriage

2:ect if uyer Kn&usti+aly efuses to Acceptthe Eelivery Lenerally, the uyer ecomes the owner.

2xception \ when there is a contrarystipulation or when the seller reserves the ownership asa sort of security for the payment of the price.

Article 456=.he vendee shall owe interest /or theperiod between the delivery o/ the thing and thepayment o/ the price, in the /ollowing three casesC

4" )hould it have been so stipulated8

@" )hould the thing sold and delivered produce /ruits orincome8

A" )hould he be in de/ault, /rom the time o/ 0udicial ore&tra0udicial demand /or the payment o/ the price.

a. 0his refers to the interest.

%4#, 'ov. 5, "5$$).[

072 0722 CAS2S C*'02/@6A02E". ;n 'o. ("), no demand is needed.

. ;n 'o. (), the reason for the law is that the fruitsor income is suf+cient to warrant the payment of inter>est.

3. ;n 'o. (3), =default is mora, called =in delayunder the provisions of the Civil Code.

K62 !* /*'20A? *6;LA0;*'S > ;n a monetaryoligation (lie the oligation to pay the purchase price)in the asence of stipulation, legal interest taes the

place of damages. 0his is so even if the damages areactually more or less. 0he possiility of gain ecause ofan investment should e discountedM instead of a gain,there might e a loss. 0herefore, the law hascompromised on legal interest. (Uuiros v. 0an Luinlay, 1@hil. 18$).

Article 45=9.)hould the vendee be disturbed in thepossession or ownership o/ the thing acquired, or should

he have reasonable grounds to /ear such disturbance,by a vindicatory action or a /oreclosure o/ mortgage, hemay suspend the payment o/ the price until the vendorhas caused the disturbance or danger to cease, unlessthe latter gives security /or the return o/ the price in aproper case, or it has been stipulated that,notwithstanding any such contingency, the vendee shallbe bound to make the payment. ( mere act o/ trespassshall not authori3e the suspension o/ the payment o/ theprice.

81, %4>%"). Should and W come to an amicale settlement, cannot recover from S ecause there really was noeviction. was indeed not deprived of the thingpurchased.

Article 45=4.)hould the vendor have reasonablegrounds to /ear the loss o/ immovable property sold and

its price, he may immediately sue /or the rescission o/the sale.

)hould such ground not e&ist, the provisions o/ article44:4 shall be observed.

a. 'oteG when can "$5" e applied+ *nly whenthere is 6*SS of an immovale property. Anong meronthe "$54+ *nly disturance of possession or ownershipor reasonale fear for disturance.

. 7ere in "$5", there can e a ground forrescission of the sale.

0he seller must havereasonale grounds to fearG

(a) 6*SS of the immovale property sold, and

() 6*SS of the price. So, if the uyer is s-uanderinghis money, ut the immovale property remainsuntouched, this article can> not apply.

;f neither ground exists, Art. ""5" applies. Art. ""5"providesG =0he power to rescind oligations is implied inreciprocal ones, in case one of the oligors should notcomply with what is incument upon him. 0he in&uredparty may choose etween the ful+llment and therescission of the oligation, with the payment ofdamages in either case. 7e may also see rescission,

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even after he has chosen ful+ llment, if the latter shouldecome impossile. =0he court shall decree therescission claimed, unless there e &ust causeauthorizing the + xing of a period. =0his is understood toe without pre&udice to the rights of third persons whohave ac-uired the thing, in accordance with articles"3%$ and "3%% and the /ortgage 6aw.

Article 45=7.In the sale o/ immovable property, even

though it may have been stipulated that upon /ailure topay the price at the time agreed upon the rescission o/the contract shall o/ right take place, the vendee maypay, even a/ter the e&piration o/ the period, as long asno demand /or rescission o/ the contract has been madeupon him either 0udicially or by a notarial act. (/ter thedemand, the court may not grant him a new term.

a. 0his is only applicale on sale of immovaleproperty. 2ven if there is a failure to pay the priceagreed uponXX rescsion taes place, pwede parin dawmagayad c vendee even after the expiration of perioduntil walang demand ng rescission of contract. Eemandfor rescission under "$5 must e made &udicially orupon a notarial act. After the demand the court may not

grant him new term.e-uisitesG

". *nly to a contract of sale involving real property.Eli pwede contract to sell.

. ;f what is involved is a sale of immovaleproperty in installments , in which you will apply themaceda law, then you apply the maceda law and not the"$5.

3. 7ere the rescicion is not automatic. Eapat maydemand parin.

LlowingLloria'oteG from @arasG 0his is only applicale toa sale of real property, not to a contract 0* S266 real

property or to a promise 0* S266 real property, wheretitle remains with the vendor until ful+llment of apositive suspensive condition, such as the full paymentof the price. (/anuel v. odriguez, 6>"3#31, Iul. 8,"514). ;n the contract 0* S266, where ownership isretained y the seller and is not to pass until the fullpayment of the price, such payment is a positivesuspensive condition, the failure of which is not areach, casual or serious ut an event that prevents theoligation of the vendor to convey title from ac-uiringinding force. 0o argue that in case of failure to paythere is only a casual reach is to proceed from the falseassumption that the contract is one of asolute sale,where non>pay> ment a mere resolutory condition.

a. 0his article applies whether or not there is astipulation for automatic rescission. 0he law says =eventhough.

. 0he demand may eG ") &udicial ) extra&udicial(this must however e y notarial act).

c. the demand is not for the payment of the price,ut for the 2SC;SS;*' of the contract. ("4 /anresa%%). ;f the demand for such rescission comes onlyA!02 the o:er to pay the alance (accompanied y apostal money order for the amount due), the automaticrescission cannot of course legally tae place. (/aximo,et al. v. !aian, et al., 6>%4"$, Eec. 3, "5$$). (e) 0hedemand is not for the payment of the price K0 for the2SC;SS;*' of the contract. (/anresa, Jol. "4, p. %%).

E/AMEof this Article

*n Iul. ", A sold a piece of land, payment and deliveryto e made on Iul. "$. ;t was stipulated that shouldpayment not e made on Iul. "$, the contract wouldautomatically e rescinded. *n Iul. 4, can still pay+A'S.G ?es, as long as there has een no &udicial ornotarial demand for the rescission of the contract. ut if,

for example on Iul. "%, A had made a notarial demandfor such a rescission then will not e allowed to payanymore, and the court may not grant him a new term.

072 E2/A'E '22E2E> e it noted that the demand isnot for the payment of the price inasmuch as the sellerprecisely desires to rescind the contract. 0o say that it

should e the demand for the price would lead to theanomalous paradoxical result of re-uiring payment fromthe uyer for the very purpose of preventing him frompaying. ;t is, therefore, a demand for rescissionM theterm having expired, the seller does not want tocontinue with the contract. (Jillareal v. 0an Ding, #3 @hil.$", citing "4 /anresa %%).

Article 45=:. 0hisarticle should apply only if the o&ect sold has not eendelivered to the uyer.

;f there has already een delivery, other articles, lieArt. ""5" would e applicale. ;n this case automaticrescission is not allowed. An af+ rmative action is neces>sary (Luevarra v. @ascual, " @hil. 3""), the action eingone to rescind &udicially, if the uyer refuses to come toamicale settlement. (2scueta v. @ando, # *.L., 'o. "",p. 8$5).

E/AME O, T0E ARTICE0he seller and the uyeragreed that payment and delivery would e made on Iul."$, at the uyers house. ;f the uyer does not appearon said day, or having appeared, he should not havetendered the price at the same time, then the sale cane considered as automatically rescinded.

RIG0T NOT OBIGATION TO RESCIN* ;f in acontract the seller is authorized to rescind the sale incase of reach, this does not necessarily mean that he isoliged to do so. (amirez v. Court of Appeals ] /uller'ease, 6>1$31, Ian. $, "5$1, $ *.L. 885).

E*CK/2'0S *! 0;062

Article 4;:;.In the preceding articles in this itlegoverning the sale o/ goods, unless the conte&t orsub0ect matter otherwise requiresC

4" =Document o/ title to goods= includes any bill o/lading, dock warrant, =quedan,= or warehouse receipt ororder /or the delivery o/ goods, or any other documentused in the ordinary course o/ business in the sale ortrans/er o/ goods, as proo/ o/ the possession or controlo/ the goods, or authori3ing or purporting to authori3ethe possessor o/ the document to trans/er or receive,either by indorsement or by delivery, goods representedby such document.

=oods= includes all chattels personal but not things inaction or money o/ legal tender in the 2hilippines. heterm includes growing /ruits or crops.

=*rder= relating to documents o/ title means an order byindorsement on the documents.

=Euality o/ goods= includes their state or condition.

=)pecic goods= means goods identied and agreedupon at the time a contract o/ sale is made.

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(n antecedent or pre-e&isting claim, whether /or moneyor not, constitutes =value= where goods or documents o/title are taken either in satis/action thereo/ or assecurity there/or.

@" ( person is insolvent within the meaning o/ this itlewho either has ceased to pay his debts in the ordinarycourse o/ business or cannot pay his debts as theybecome due, whether insolvency proceedings have

been commenced or not.A" oods are in a =deliverable state= within themeaning o/ this itle when they are in such a state thatthe buyer would, under the contract, be bound to takedelivery o/ them. n)

session over the goods descried therein, withouthaving to e:ect actual delivery thereof.

negotiale

Ne'ot&a%le> A document of title in which it is statedthat the goods referred to therein are deliverale =toearer, or =to order of any person named in suchdocument, is a negotiale document of title. So statedsya na sa contract. 'egotiation y mere delivery , thiswill transfer possession, and control over the goods.

Eelivery to a specic person or his order (negotiation yendorsement ^delivery). 'oteG even if on the face of thedocuments may naalagay non> negotiale sya, it is stillnegotiale if naalagay earer sya or order. 6imitingwords in the title does not destroy negotiaility.

negotiale, negotiale parin sya. Dung walangnaalagay dyan na delivery to the earer or order, thatdocument is considered as non>negotiale.


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c. 0he uyer purchases the thing relyingon the aFrmation.

GoteG e-uisites are important ecause in case ofreach, you can hold the seller liale for damages.

0ARRISON vs. NA6ARRO

0here was an express warranty in this case wherein7arrison made an aFrmation that taxes were alreadypaid and such aFrmation was relied upon y the uyer.7owever it turned out that di pa pala nabayran. So therewas reach of express warranty.

(ng nangyari anguyer nalang ang nagbayad sa;and he demanded reimursement from 7arrison. ;n facthe is also entitled to damages not &ust for the actualwith regard to the reimursement ut as well as otherdamages ecause there was that reach of expresswarranty.

7ere @ wouldnt have purchase the su&ect matterwere it not for the petitioners assertion and assurance

that all taxes on its imported parts were already settled.

GoteG 'ot &ust in personal property ut especially in realproperties, chec the realty taxespara di na umabot sakorte. /ae a acground chec efore entering intocontracts.

". ,mplied-


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;t is di:erent if the uyer new eforehand ofthe ac-uisitive prescription, then the uyer has deemedto have waived his right.

Art&$le 1551.;f the property is sold for nonpayment oftaxes due and not made nown to the vendee eforethe sale, the vendor is liale for eviction. (n)

Art&$le 155.0he &udgment detor is also responsilefor eviction in &udicial sales, unless it is otherwisedecreed in the &udgment. (n)!ailure to pay real estatetaxes can e su&ect to sale y the government and thevendor is liale for eviction.

rescind provided that he couldnt haveought the thing ung wala yung portion ung san naevict sya. 7e may exercise his right of action instead ofenforcing vendors liaility for eviction.

0his is also applicale if you ought or more thigns&ointly sold for a lump sum.

2xG love irds> /amatay daw ang isa once mamatay dinang isa.

Can there e a waiver of warranty against eviction+

?2S. ut the stipulation of waiver is void if the vendoracted in ad faith.

Art&$le 1554.;f the vendee has renounced the right towarranty in case of eviction, and eviction should taeplace, the vendor shall only pay the value which thething sold had at the time of the eviction. Should thevendee have made the waiver with nowledge of theriss of eviction and assumed its conse-uences, thevendor shall not e liale. ("#88)

ty?es o=


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apparent urden or servitude isrecorded in the egistry of @roperty, unless there is anexpress warranty that the thing is free from all urdensand encumrances.


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a.

explanatory.

tae>" ha. Anythinglie you uy towels na i>gift sa wedding 7is]7er, so youwill not uy one if defective ang isa.


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implied warranty that the goods shall e ofmerchantale -uality. (n)

By: Ca9&lle Re9oroFa

Art&$le 15#4.0here is no warranty against hiddendefects of animals sold at fairs or at pulic auctions, orof live stoc sold as condemned.

Art&$le 15#5.0he sale of animals su:ering fromcontagious diseases shall e void. A contract of sale ofanimals shall also e void if the use or service for whichthey are ac-uired has een stated in the contract, andthey are found to e unt therefor.

;n "$8$, we have discussed this in the su&ect mattertopic.


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stipulated, valid yan as long as hindi maglapas sa "4years.

EGA RE*EMTION J only a??l&$a%le to$ontra$t o= sales

Art&$le 1!1(.6egal redemption is the right to e

surogated, upon the same terms and conditionsstipulated in the contract, in the place of one whoac-uires a thing y purchase or dation in payment, ory any other transaction wherey ownership istransmitted y onerous title. ight to e surogatedupon the same terms and conditions stipulated in thecontract. heir.

owners. sa "4%% asi sells his hereditaryrights, rights nya to a stranger efore partition. So anyor all co heirs can repurchase y reimursing the uyer.@eriodG " month from the time the co>owners werenotied y the sale.

Art&$le 1!).A co>owner of a thing may exercise theright of redemption in case the shares of all the otherco>owners or of any of them, are sold to a third person.;f the price of the alienation is grossly excessive, theredemptioner shall pay only a reasonale one.

Should two or more co>owners desire to exercise theright of redemption, they may only do so in proportionto the share they may respectively have in the thingowned in common./ore or less same sya dito, insteadtreating A C as coheirs thay are co owners of suchproperty. So, what is the e:ect, i! one of the co ownerssells to ? a third person. A co owner may redeem theproperty from ?. ;n fact, a and can redeem theproperty from ? in proportion to their share. ;f the priceof the redemption is grossly excessive, theredemptioner should only pay the price that isreasonale. ight of preemption, you need not wait for thesale to e perfected ago pag magexecute ang sale.7indi na hintayin yung sale.Art&$le 1!".0he right of legal pre>emption orredemption shall not e exercised except within thirtydays from the notice in writing y the prospectivevendor, or y the vendor, as the case may e. 0he deedof sale shall not e recorded in the egistry of @roperty,unless accompanied y an aFdavit of the vendor thathe has given written notice thereof to all possile

redemptioners.

0he right of redemption of co>owners excludes that ofad&oining owners.0here must e notice in writing for the34 day period to egin running.

AFdavit of the vendor, that is provided y the law ut isnot really done in practice.

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;n case you are a co owner you are not informed youcan le an action for reach of this provision.

A"",@#)@T A@D &)A") @T ,@C&+D)D.

Sales Tsn - Final Coverageword

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