ART. 1458.

By the contract of sale one of the contracting parties obligates 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.

A contract of sale may be absolute or conditional.

Concept of contract of sale.

The contract of sale is an agreement whereby :

Seller / vendor obligates himself to transfer ownership and deliver something to the other (called the buyer or
purchaser or vendee).

Buyer or purchaser or vendee on his part, binds himself to pay therefor a sum of money or its equivalent (known
as the price).

It is required in the proposed Code that the seller transfers the ownership of the thing sold. (Arts. 1458, 1459,
1495,1547).

De Leon : In the present Code (Art. 1445.), his obligation is merely to deliver the thing, so that even if the seller is not the
owner, he may validly sell, subject to the warranty (Art. 1474.) to maintain the buyer in the legal and peaceful possession
of the thing sold.

Paras : The Civil Code requires not only delivery but also the transfer of the ownership of the thing sold. However, the
vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the owner at the time the thing sold
is delivered. (See Art. 1459, Civil Code).

Query: Suppose Art. 1458 did not specify that the sellermust transfer the ownership of the object, does he still havethis
obligation?

Answer: Yes, for after all, this transfer of ownership is clearly the fundamental aim of the contract. A buyer is not
interested in a mere physical transfer: he is after ownership.(See 3 Castan 12-13).

Characteristics of a contract of sale.

1. Consensual because it is perfected by mere consent.

*Once there is a meeting of the minds as to the price, the sale is valid If the real price is not stated in the contract, then the
sale is valid but subject to reformation; if there is no meeting of the minds as to the price, because the price stipulated is
simulated, then the contract is void.

2. Bilateral reciprocal - because both parties are bound by obligations dependent upon each other. the seller, to
deliver and transfer ownership of the thing sold and the buyer, to pay the price;

Villanueva : The legal effects and consequences of sale being a bilateral contract composed of reciprocal obligations are as follows:

(a) The power to rescind is implied, and such power need not be stipulated in the contracting order for the innocent party to
invoke the remedy;

(b) Neither party incurs delay if the other party does not comply, or is not ready to comply in a proper manner, with what is
incumbent upon him; and

(c) From the moment one of the parties fulfills his obligation, the default by the other begins, without the need of prior
demand.

Since both parties in a sale are bound by their respective obligations which are reciprocal in nature, then a party cannot simply choose
not to proceed with the sale by offering also the other party not to be bound by his own obligation; that each party has the remedy of
specific performance; and that rescission or resolution cannot be enforced by defaulting party upon the other party who is ready and
willing to proceed with the fulfillment of his obligation.

3. Onerous - because it imposes a valuable consideration as a prestation, which ideally is a price certain in money or its
equivalent.
In Gaite v. Fonacier, the Court ruled that the stipulation in a contract of sale on the payment of the balance of the purchase price must
be deemed to cover a suspensive period rather than a condition since there can be no question that greater reciprocity obtains if the
buyers obligation is deemed to be actually existing, with only its maturity (due date) postponed or deferred, than if such obligation were
viewed as non-existing or not binding until the ore was sold. The Court held that the rules of interpretation would incline the scales in
favor of the greater reciprocity of interests, since sale is essentially an onerous contract.

** Suspensive (ex die)- when the obligation becomes demandable only upon the arrival of the period.

4. Commutative - because the thing sold is considered the equivalent of the price paid and vice versa.

i.e., ideally the value of the subject matter is equivalent to the price paid. Nevertheless, there is no requirement that the price
be equal to the exact value of the subject matter; all that is required is for the seller to believe that what was received was of
the commutative value of what he gave.

NOTE: By way of exception, some contracts of sale are aleatory, i.e., what one receives may in time be greater or smaller than what he
has given. Example: The sale of a genuine sweepstakes ticket.

5. Nominate - Sale is a nominate contract since it has been given a particular name by law; namely, sale;

6. Principal- because it can stand on its own, and does not depend on another contract for its validity or existence.

Elements of Contract of Sale

(a) Essential elements (those without which there can be no valid sale)
(a) CONSENT, or meeting of the minds to transfer ownership in exchange for the price;
(b) SUBJECT MATTER; This refers to the determinate thing which is the object of the contract ; and
(c) PRICE, certain in money or its equivalent.

*all three elements of consent, subject matter and consideration must be present for a valid sale to exist; and that in a situation
where any of the elements is not present, [t]there was no perfected contract of sale, and that the absence of any of these
essential elements negates the existence of a perfected contract of sale, rather than using the technical term void.

*On the other hand, when all three elements are present, but there is defect or illegality constituting any of such elements, the
resulting contract is either voidable when the defect constitutes a vitiation of consent, or void as mandated under Article 1409 of
the Civil Code.

(b) Natural elements (those which are deemed to exist in certain contracts, in the absence of any contrary stipulations)
1. Warranty against eviction (Art. 1548)
2. Warrant against Hidden defects (Art.1561.)

Stages in the contract of sale

a. Policitacion, negotiation, or preparation - the period from the time the prospective contracting parties
indicate their interests in the contract to the time the contract is perfected.
 Donation Sale sale
Barter
act of liberality whereby a one of the parties one of the parties
person disposes binds himself to binds himself
gratuitously of a thing or right give one thing in to deliver a thing in
in favor of another person, who consideration of the consideration of the
accepts it. others promise to others undertaking to
give another thing. pay the price in
donation is a gratuitous Sale is essentially an money or its
contract. onerous contract. equivalent.
being a solemn contract, is perfected by mere Rules to determine whether contract is sale or barter
although consent.
consent is also required, must 1. Manifest Intention of the Parties
comply with the formalities
mandated by law for its 2. When Intention Does Not Appear and
validity. Consideration Consists Partly in Money and Partly
in Another Thing :
Barter if the value of the thing given exceeds the amount
Agency to sell/buy Sale of money given or its equivalent.
- the agent is not obliged to - the buyer himself pays for
pay the price, and is the price of the object, Sale - where the value of a thing given is less than or
merely obliged to which constitutes his main equal to the amount of money given.
deliver the price which he obligation.
may receive from the
AGENCY TO SELL TO BUY/
buyer.
SELL--person binds himself to
- the agent does not the buyer, after delivery, give something or to render
become becomes the owner of the service, in representation or on
the owner of the thing Subject matter. behalf of the principal with the
subject of the agency, even consent or authority of the latter.
if the object is
service, in representation or on
delivered to him.
behalf of the principal with the
In Ker & Co., Ltd. v. Lingad , the company entered into
-In an agency, the agent In sale, the seller warrants. consent or authority of the latter.
a contract with an American company, whereby Ker & Co.,
who effects the sale specifically designated as Distributor.
assumes no personal
liability as long as he acts It was specifically stipulated in the contract that all goods on
within his authority and in consignment shall remain the property of the Company until sold by the
the name of the principal. Distributor to the purchaser or purchasers, but all sales made by the
Distributor shall be in his name.
(In an agency to sell, the
agent is disqualified from
receiving any personal profit It was further stipulated that the contract does not constitute the
from the transaction covered Distributor the agent or legal representative of the Company for any
by the agency, and any profit purpose whatsoever. Distributor is not granted any right or authority to
received should pertain to the assume or to create any obligation or responsibility, express or
principal) implied in behalf of or in the name of the Company, or to bind the
The transfer of title or agreement to transfer it for a Company in any manner or thing whatsoever.
price paid or promised is the essence of sale. If such
transfer puts the transferee in the attitude or position of The Court held that in spite of the disclaimer in the agreement, it was
an owner and makes him liable to the transferor as a still an agent of the American company. The decisive test for the Court
debtor for the agreed price, and not merely as an agent was the retention of the ownership of the goods delivered to the
who must account for the proceeds of a resale, the possession of the dealer, like herein petitioner, for resale to customers,
transaction is a sale; while the essence of an agency the price and terms remaining subject to the control of the firm
to sell is the delivery to an agent, not as his property, consigning such goods..
but as the property of the principal, who remains the
owner and has the right to control the sale, fix the price,
and terms, demand and receive the proceeds less the
agents commission upon sales made.

Dacion en pago (dacion in payment) is one whereby property is alienated to the creditor in full satisfaction of a debt in money.
It constitutes the delivery and transmission of a thing by the debtor to the creditor as an accepted equivalent of the performance of the
obligation.
In order that there be a valid dation in payment, there must be:

(a) Performance of the prestation in lieu of payment (animo solvendi) which may consist in the delivery of a corporeal
thing or a real right or a credit against the third person;

(b) Some difference between the prestation due and that which is given in substitution (aliud pro alio); and

(c) An agreement between the creditor and debtor that the obligation is immediately extinguished completely or
partially by reason of the performance of a presentation different from that due.

**It is essential that the transfer must be accompanied by a meeting of the minds between the parties on
whether the loan ... would be extinguished by dacion en pago.