SALES: MIDTERMS
GEN RULE: Delivery to carrier is delivery to buyer, if it is
the duty of the seller to send the goods to the buyer.
EXCEPTION: Upon RESERVATION of his right to
ownership as stated in Art. 1503
KINDS of DELIVERY to CARRIER
a. C.I.F (cost, insurance, freight) – must be paid by
the seller
NOTE: in a C.I.F. contract the place of delivery is
presumptively at the BUYER’S place.
b. F.O.B. (free on board)
i. The sale may be:
1. f.o.b. at the place of shipment – the
buyer must pay the freight
2. f.o.b. alongside the vessel (f.a.s.) –
the moment the goods are brought
alongside the vessel, the buyer must
pay for the freight or expenses.
3. f.o.b. at the place of destination – the
seller must pay the freight.
QUESTION:
When is the vendor not obliged to make
delivery after the perfection of the contract of sale?
Ans:
The vendor is not obliged to make said delivery
in the following cases:
a. if the vendee has not paid him the price
b. if no period for the payment has been fixed in
the contract
c. Even if a period for such payment has been
fixed in the contract – if the vendee has lost the
right to make use of the period and still refuses
to pay.
RIGHTs of an UNPAID SELLER
a. Possessory lien (in the nature of pledge)
b. Right of stoppage in transit
c. Right or resale
d. Right to rescind the sale
RIGHT of STOPPAGE in TRANSITU
- Available to the unpaid seller
o If he has parted with the possession of
the goods
o AND if the buyer is or becomes
insolvent.
 The insolvency referred to need not be
judicially declared. It is enough that
the obligations exceed a man’s assets.
GOODs are in TRANSIT
1. From the time they are delivered to a carrier by
land, water, or air, or other bailee for the
purpose of transmission to the buyer, until the
buyer, or his agent in that behalf, takes delivery
of them from such carrier or other bailee;
2. If the good are rejected by the buyer, and the
carrier or other bailee continues in possession
of them, even if the seller has refused to receive
them back.
GOODs NO LONGER in TRANSIT
1. If the buyer, or his agent in that behalf, obtains
delivery of the goods before their arrival at the
appointed destination;
2. If, after the arrival of the goods at the
appointed destination, the carrier or other
bailee acknowledges to the buyer or his agent
that he holds the goods on his behalf and
continues in possession of them as bailee for
the buyer or his agent; and it is immaterial that
further destination for the goods may have
been indicated by the buyer;
3. If the carrier or other bailee wrongfully refuses
to deliver the goods to the buyer or his agent in
that behalf.
PARTIAL Delivery of Goods:
 Remainder may be stopped in transit UNLESS
partial delivery has been made under such
circumstances as to show an agreement with
the buyer to give up possession of the whole of
the goods.
NOTE: The Right to get back the goods exists only when
the goods are still in transit.
: The taking of the property in transit by an
unauthorized agent of the buyer does not extinguish
the right of stoppage in transitu.
The RIGHT to STOPPAGE in TRANSITU may be Exercised
by:
a. Obtaining actual possession
b. Giving notice of the claim
To WHOM NOTICE is Given:
 a. To the person in actual possession of the goods;
or
b. to his principal
i. The notice, to be effectual,
must be given at such time and
under such circumstances that
the principal, by the exercise of
reasonable diligence, may
prevent a delivery to the buyer.
EFFECTS of the Exercise of the RIGHT to STOPPAGE:
a. The goods are no longer in transitu;
b. The contract of carriage ends; instead, the
carrier now becomes a mere bailee, and will be
liable as such;
c. The carrier should not deliver anymore to the
buyer or the latter’s agent; otherwise, he will
clearly be liable for damages;
d. The carrier must redeliver to, or according to
the directions of, the seller;
 The expenses must be borne by the seller
RIGHT of RESALE Exist When:
a. perishable goods;
 Goods are perishable if they are of a nature
that they deteriorate rapidly
b. express stipulation; or
c. unreasonable default or default in payment for
an unreasonable time
 What is UNREASONABLE TIME?
a. Count begins from the demand
b. Notice is made at demand
EFFECTS
a. The seller is no longer liable to original buyer
upon the contract of sale or for any profit made
by such resale;
b. The seller may recover damages for any loss
occasioned by the breach of the contract of
sale;
c. Buyer acquires a good title as against the
original buyer.
DEFICIENCY or EXCESS in the Price
NOTE: the deficiency in the price may be obtained as
damages. This happens when the resale price is lower
than the original selling price. On the other hand, any
excess in the price goes to the seller.
RIGHT to RESCIND the Transfer of Title
This applies in case there has been:
a. Express stipulation or reservation;
b. Unreasonable default – manifestation under
notice and other overt act to rescind
NOTE: DAMAGES may be recovered for the breach of
contract
Question: What should be done in order to rescind the
transfer of title?
ANS: There must be notice to the buyer /or there must
be an overt act showing an intention to rescind.
IMPLIED Rescission
a. Replevin Suit
b. If ownership is claimed over the property, and it
is subsequently offered to a third person.
EFFECT if the BUYER has already SOLD the GOODs
GEN. RULE: The unpaid seller’s right of lien or stoppage
in transitu remains even if the buyer has sold or
otherwise disposed of the goods.
EXCEPTION:
1. When the seller has given his consent thereto.
2. When the purchaser or the buyer is a purchaser
for value in good faith of a negotiable document
of title.
When SELLER is NOT BOUND to DELIVER because BUYER
has LOST the Benefit of the Term
Under Art. 1198, the debtor shall lose every right to
make use of the period:
a. When after the obligation has been contracted,
be becomes insolvent, unless he gives a
guaranty or security for the debts;
b. When he does not furnish to the creditor the
guaranties which he has promised;
c. When by his own acts he has impaired said
guaranties or securities after their
establishment, and when through a fortuitous
event they disappear, unless he immediately
gives new ones equally satisfactory;
d. When the debtor violates any undertaking, in
consideration of which the creditor agreed to
the period;
e. When the debtor attempts to abscond;
NOTE: In the cases enumerated, the vendor is not
bound to deliver.
Example:
A purchased goods from B. A promised to give
certain securities, as a result of which, A was given one
year within which to pay. A failed to give the securities.
Can B be compelled to deliver?
ANS: NO.
ART. 1537 ACCESSIONs and ACCESSORIES
“the accessory follows the principal”
Obligation of the SELLER
- Delivery of the thing sold and its accessions and
accessories in the condition in which they were
upon the perfection of the contract
o Implies duty to preserve
- Example of Accession : FRUITS
- Example of Accessories : in the sale of car, the
jack is considered an accessory
ART. 1538
GEN. RULE: from the time of perfection to delivery, the
risk is borne by the buyer.
… however BEFORE DELIVERY ART. 1189
applies.
NOTE: the VENDOR is considered as the DEBTOR
ART. 1539: Sale of Real Estate by Unit
DELIVERY – placing in the control of the vendee the
thing sold
SALE of Real Estate by Unit – made with a statement of
its area, at the rate of a certain price for a unit of
measure or number
 Delivery – all that is stated in the contract (
quality, quantity)
A. Lesser Area or Inferior Quality
o Proportional reduction of price; or
o Rescission of contract
Provided that:
 The lack in the area be not less
than one-tenth of that stated
 If any part of the immovable is
not of the quality specified in
the contract
NOTE: Rescission shall only take place at the will of the
vendee, WHEN the inferior value of the thing sold
exceeds one-tenth of the price agreed upon
NOTE: the one-tenth referred to in the article applies to
1/10 of the area stated in the contract, not to 1/10 pf
the true or actual area.
…however if the area of the property sold does
not reach 1/10 still the vendee can opt to rescind if the
he WOULD NOT BOUGHT the land had HE KNOWN of its
smaller area
B. Greater Area
 Accept area included in contract and reject the
rest; or
 Accept the whole area and pay at contract rate
UNIT PRICE CONTRACT vs LUMP SUM CONTRACT
Unit Price Contract Lump Sum Contract
 The amount agreed  No increase or
upon is generally decrease of price,
merely an estimate, although there be a
and may be reduced greater or less area
or increased or number than that
depending upon the stated in the contract
quantities performed
multiplied by the unit
prices previously
agreed upon
SALE of TWO or MORE IMMOVABLES for a SINGLE Price
 Apply rule on sale of real estate for a lump sum
 BUT IF the area or number is designated in the
contract, the vendor must deliver all that is
included within the boundaries, even when it
exceeds the area or number specified in the
contract
 OTHERWISE, reduction in price UNLESS vendee
opt for rescission (does not accede to the
failure to deliver what has been stipulated)
EXAMPLE of SALE for LUMP SUM ( a cuerpo
cierto or por precio alzado)
1. …A buys a piece of land from B at the lump
sum of P10milliom. In the contract, the area is
stated to be 1,000 sq. m. The boundaries are of
course mentioned in the contract. Now then it
was discovered that the land within the
boundaries really contains 1,500 sq.m.
QUES: Is B bound to deliver the extra 500?
 ANS: YES, furthermore, the price should not be
increased. This is because B should deliver all
which are included in the boundaries.
QUES: If B does not deliver the remaining 500,
what are the rights of A?
ANS: A has the right to---
a. Either to rescind the contract for the seller’s
failure to deliver what has been stipulated;
or
b. To pay a reduced proportional price,
namely 2/3 of the original price. This is so
because he really gets only 2/3 of the land
included within the boundaries (1,000 sq.
m. out of 1,500 sq. m.)
2. … A buys a piece of land a cuerpo cierto. The
contract states a certain number of square meters but
the land included in the boundaries happen to be LESS.
QUES: Is A entitled to rescind and to pay a reduced
price?
ANS: NO to both.
The Civil Code presumes that the purchaser had in mind
a determinate piece of land and that he ascertained its
area and quality before the contract was perfected. If
he did not do so, or if having done so, he made no
objection and consented to the transaction, he can
blame no one but himself.
ART. 1543: PRESCRIPTIVE PERIOD is SIX Months
ART. 1544: DOUBLE SALE
DOCTRINE: First in Time, Stronger in Right
Rule of Preference:
a. Movable Property
- The ownership shall be transferred to the
person who may have first taken possession
thereof in good faith
o Possessor in good faith
b. Immovable Property
- The ownership shall belong to the person
acquiring it who in good faith first recorded it in
the registry of Property
o Registrant in good faith
o Possessor in good faith
c. If No Inscription
- The ownership shall pertain to the person who
in good faith was first in the possession; and in
the absence thereof, to the person who
presents the oldest title, provided there is good
faith
o Person with the oldest title in good faith
GOOD FAITH- is one who buys the property of another
without notice that some other property of another
without notice that some other person has a right to, or
interest in such property, at the time of such purchase,
or before he has notice of the claim or interest of some
other person in the property.
NOTE: Registration here requires actual recording;
hence if the property was never really registered as
when the registrar forgot to do so although he has been
handed the document, there is no registration.
- The rule as to registration covers ALL KINDS OF
IMMOVABLES, including land, and makes no
distinction as to whether the immovable is
registered under the Land Registration Law or
not so registered.
NOTE: A mere “anotacion preventiva ” (preventive
precautionary notice) is not equivalent to registration,
unless within 30 days thereafter there is made an actual
recording.
REGISTRATION- in general as the law uses the word
means any entry made in the books of the Registry,
including both registration in its ordinary and strict
sense, and cancellation, annotation, and even the
marginal notes. In its strict acceptation, it is the entry
made in the registry which records solemnly and
permanently the right of ownership and other real
rights.
NOTE: Title in this article means title because of the
SALE, and not any other title or mode of acquiring
property.
SITUATIONS:
A. TWO Certificates of Title are issued to DIFFERENT
Persons covering the same land in whole or in part
ANS: the earlier in date must prevail as between
original parties
B. In case of SUCCESSIVE REGISTRATION, in where more
than one certificate is issued over the land
ANS: the person holding under the prior certificate is
entitled to the land as against the person who relies on
the second certificate.

REMEDY: The purchaser from the owner of the later
certificate and his successor should resort to his vendor
for redress, rather than molest the holder of the first
certificate and his successors, who should be permitted
to rest secure in their title.
This Article does not apply to:
a. Judicial attachment or executions
b. No double sale was made
c. If one sale was an absolute one but the other
was a pacto de retro transaction where the
period to redeem has not yet expired
d. Where one of the sales was one subject to a
suspensive condition which condition was not
complied with
e. Where the property is first donated, then sold
i. But it applies to a double
donation and to sales made by
a principal and his agent pf the
same property
NOTE: Read the Cases in ART 1544 (Damu examples si
Paras)
Art. 1545: CONDITIONS and WARRANTIES
a. Conditions may be waived
b. Conditions may be considered as warranties
Non-performance of the condition in a contract of sale-
o Breach of warranty
o May waived the performance of contract; or
o Such party may refused to proceed with the
contract
ART. 1546: Express Warranty
o Any affirmation of fact or any promise by the
seller relating to the thing, if the natural
tendency of such affirmation or promise is to
induce the buyer to purchase the same, and if
the buyer purchases the thing relying thereon
GOOD TEST:
a. If the buyer is ignorant, there is a warranty
b. If the buyer is expected to have an opinion AND
the seller has no special opinion, there is no
warranty:
EXCEPTION:
1. The seller made such affirmation or
statement as an expert, and
2. It was relied upon by the buyer
NOTE: a little exaggeration is apparently allowed by the
law as a concession to human nature.
Civil Law Maxim:
a. Simplex commendation non-obligat
b. Caveat emptor (let the buyer beware)
ART. 1547: IMPLIED WARRANTY
o Warranty against Eviction- that the seller has
the right to sell the thing at the time when the
ownership is to pass, and that the buyer shall at
the time have and enjoy the legal and peaceful
possession of the thing
o The action based on the implied warranties
prescribe in 10 years
This article does not apply to:
 Sheriff,
 Auctioneer,
 Mortgage,
 Pledgee, or
 Other person professing to sell by virtue of
authority in fact or law, for the sale of a thing in
which a third person has a legal right or
equitable interest
ART. 1548: WARRANTY in case of EVICTION
- a Natural Element in the contract of sale;
hence, the vendor answers for the eviction
- May be increased, diminished, or suppressed on
the part of the seller
EVICTION – whenever by a final judgment based on a
right prior to the sale or an act imputable to the vendor,
the vendee is deprived of the whole or part of the thing
purchased
ELEMENTS:
1. Final Judgment;
2. Purchaser has been deprived in whole or in part
of the thing sold;
3. Deprivation by virtue of a right prior to the sale
effected by the seller or one imputable to the
seller;
4. Prior notice of the complaint for eviction from
the buyer to the seller
NOTE: It is only the buyer in good faith who may sue for
the breach of warranty against eviction. If he knew of
possible dangers, chances are that he assumed the risk
of eviction.
Responsibilities of the Seller
 Own acts; and
  Acts of predecessor-in-interest
Seller not Liable for:
 Acts imputable to the buyer; and
 Fortuitous event
ART. 1549: Buyer need not appeal from the decision of
eviction (Seller is still liable)
MOREOVER….
ART. 1551: The seller is liable for eviction if the property
is sold for non-payment of taxes due and not made
known to the vendee before the sale.
HOWEVER…
ART. 1550: The seller is not liable for eviction if
 the adverse possession started before the sale
and
 the prescriptive period is completed after the
transfer
NOTE: the RULE applies only if there was reasonable
opportunity to interrupt the prescription; otherwise, it
would be unfair
ART. 1552: Judgment Debtor in a Judicial Sale is liable
for Eviction unless otherwise decreed in a judgment
ART. 1553-1554: Effects of Stipulation Waiving Liability
for Eviction
a. If seller was in good faith – if the exemption is
VALID, but without prejudice to Art. 1554
1. WAIVER CONSCIENTE – the waiver of buyer
may have been made without knowledge
of risk of eviction
 if eviction takes place, the seller
shall only pay the value which the
thing sold had at the time of
eviction (to prevent solution
indebiti- undue payment)
2. WAIVER INTENCIONADA – with knowledge
of risk of eviction
 if eviction takes place, the seller
shall not be liable. This is aleatory in
nature, and buyer assumes the
consequences.
b. If seller was in bad faith – the stipulation VOID
PRESUMPTION: WAIVER was only one in
CONSCIENTE
ART. 1555: What can be demanded of the Seller if
the Buyer is Evicted?: (VICED)
1. VALUE – the return of the value which the thing
sold had at the time of the eviction, be it greater or
less than the price of sale;
2. INCOME – the income or fruits, if he has been
ordered to deliver them to the party who won the
suit against him;
3. COST – the costs of the suit which caused the
eviction, and, in a proper case, those of the suit
brought against the vendor for the warranty;
4. EXPENSES – the expenses of the contract, if the
vendee has paid them;
5. DAMAGES – the damages and interests, and
ornamental expenses, if the sale was made in bad
faith.
NOTE: Rescission is NOT a remedy
Reason: the buyer can no longer restore the thing
sold to the vendor.
EXCEPT in Partial Eviction (Art. 1556)
REMEDY in Partial Eviction
a. Rescission, or
b. Enforcement of warranty
Rescission instead of enforcement of seller’s liability for
eviction
 If the part lost is of such importance, in relation
to the whole, that the buyer would not have
bought it without said part
 Buyer must return the thing without other
encumbrances than those which it had when he
acquired it
 Also applies in sale of two or more things a
cuerpo cierto or for a separate price for each of
them, if it should clearly appear that the vendee
would not have purchased one without the
other.
ART. 1557: ENFORCEMENT of WARRANTY
The warranty cannot be enforced until a final judgment
has been rendered whereby the buyer loses the thing or
part thereof
ART. 1558: CONDITION SINE QUA NON for Enforcement
of Warranty
- The seller is summoned in the suit for eviction
of the buyer
 REASON: To give the seller the opportunity to show
that the action against the buyer is unjust.
- Defense of the seller is immaterial
- Once the summons and notice was given to the
seller, the buyer was considered to have done
all that he had to do
- The notice must be the notice for the suit for
eviction, NOT the notice in the suit for the
breach of the warranty
- It is sufficient that the buyer notifies the seller
of:
o His application
o Any opposition thereto
Art. 1559: SELLER must be made CO-DEFENDANT with
the BUYER
ART. 1560: RULES in case of NON-APPARENT SERVITUDE
o The thing sold is an immovable
o The non-apparent burden or servitude is not
mentioned in the agreement
o It is such nature that it must be presumed that
the vendee would not have acquired the thing if
he had been aware thereof; and
o It is not recorded in the Registry of Property, or
although recorded, there is an express warranty
that the thing is free from liens and
encumbrances
REMEDIES if made within a year
a. Rescission;
b. Damages;
NOTE: After one year, only damages provided that it is
within one year from the date of his discovery of the
burden or servitude
ART. 1561: SCOPE of WARRANTY against HIDDEN
DEFECT
- Defect renders the thing unfit for the use for
which it is intended; or
- It diminishes the fitness for such use to such an
extent that, had the vendee been aware
thereof, he would not have acquired it or would
have given a lower price for it
REQUISITES to Recover because of Hidden Defects
a. The defect must be hidden (not known and
could not have been known)
b. The defect must exist at the time the sale was
made;
c. The defect must ordinarily have been excluded
from the contract;
d. The defect must be important ( renders thing
UNFIT or considerably decreases FITNESS);
e. The action must be instituted within the statute
of limitations.
“UNFIT FOR THE USE INTENDED”
- The use must have been stated in the contract
itself, or can be inferred from the nature of the
object or from the trade or occupation of the
buyer
“HIDDEN”
a. What may be hidden with respect to one
person may not be hidden with respect to
another
b. Just because there is a difference is grade or
quality, it does not necessarily mean that the
defect is hidden
c. Defects are sometimes referred to as
“redhibitory defects”
ART. 1562: IMPLIED Warranty or CONDITION as to the
QUALITY or FITNESS of the Goods
 IMPLIED WARRANTY of FITNESS FOR PURPOSE
o Buyer, expressly or by implication, makes
known to the seller the particular purpose for
which the goods are acquired
o Buyer relied on the seller’s skill or judgment
(whether he be the grower or manufacturer or
not)
 IMPLIED WARRANTY of MERCHANTABILITY
o Goods bought by description
 It is bought from a seller who deals in goods
of that description (whether he be the
grower, manufacturer or not)
o Goods bought by sample
 Seller is a dealer in goods of that kind;
 Defect rendering goods unmerchantable is
not apparent on reasonable examination of
the sample
MEANING of Merchantable Quality
- Fit for the general purpose of a thing, and not
necessarily the particular purpose for which it
has been acquired
ART. 1563: SALE under the PATENT NAME or TRADE
NAME
 - No Warranty as to the fitness for any particular
purpose, unless there is a stipulation to the
contrary
ART. 1564: USAGE of TRADE
- May annex an implied warranty or condition as
to the quality or fitness for a particular purpose
REASON: parties are presumed to be acquainted with
the usages of trade
ART. 1565: SALE by SAMPLE
- There is an implied warranty that the goods
shall be free from any defect rendering them
unmerchantable which would not be apparent
on reasonable examination of the sample
ART. 1566: LIABILITY of the SELLER for HIDDEN DEFECT
even in GOOD FAITH
- The object of the law is reparation and not
punishment
EXCEPTION – there is a contrary stipulation and the
seller was not aware of the hidden defect
ART. 1567: In cases of Art. 1561, 1562, 1564, 1565, and
1566, the buyer has the following remedies:
a. Withdrawal or rescission (accion redhibitoria)
plus damages
b. Proportionate reduction in price (accion
quantiminores/estimatoria) plus damages
ART. 1568: LIABILITY of seller in case of LOSS due to
HIDDEN DEFECTS
o Unaware of Defects – return price and interest
thereon, reimburse expenses of the contract
which the buyer might have paid;
o Aware of Defect – bear the loss, return the
price, and refund the expenses of the contract,
with damages
NOTE: in case of IGNORANCE, the seller is not liable for
the damages
ART. 1569: LOSS of the thing with HIDDEN DEFECT
through a FURTUITOUS EVENT or the BUYER’S FAULT
 If the seller is in good faith – the buyer may
demand price paid less value of thing when it
was lost
 If the seller is in bad faith – he shall pay
damages to the buyer
NOTE: the decrease in value due to wear and tear
should not be compensated
ART. 1570: Provisions on warranty against Hidden
Defects
- Is applicable to judicial sales, except that the
judgment debtor shall not be liable for damages
NOTE:
ART. 1571: Prescription for Hidden Defects is only for
SIX MONTHS from the time of Delivery
ART. 1572: REDHIBITORY DEFECT on the SALE of
ANIMALS
 A hidden defect of animals, even in case a
professional inspection has been made, that is
of such nature that expert knowledge is not
sufficient to discover (ART. 1576)
- Veterinarian is liable for damages if,
through ignorance or bad faith, he/she
fails to discover or disclose it (Art. 1576)
 Sale of Two or More Animals Together, whether
for a lump sum or a separate price for each
- A defect of one should not affect the
sale of the others
- Redhibitory defect of one shall give rise
to its redhibition UNLESS it should
appear that the buyer would not have
bought the sound animal/animals
without defective one
ART. 1573: The rule stated in ART. 1572 has been made
applicable to the sale of other things
ART. 1574: NO WARRANTY AGAINST HIDDEN DEFECTS
of animals sold at fairs or at public auctions, or of
livestock sold as condemned.
ART. 1575: VOID SALES of ANIMALS
a. If the animals are suffering from contagious
disease
b. If the use or servise for which they are acquired
has been stated in the contract, and they are
found to be unfit therefor.
PRESCRIPTIVE PERIOD
ART. 1577
a. 40 days – the redhibitory action, based on the
frauds or defects of animals
 b. Six months – 1. Breach of warranty against
hidden defects; rescission of the contract
because of the same; or proportionate
reduction in the price because of the same
2. rescission or proportionate reduction in the
price foe sales of real estate either by the unit
or for a lump sum, because of failure to comply
with the provisions of the contract
ART. 1578:
Three (3) days – if the animal dies after
purchase, the vendor shall be liable if the
disease which caused the death existed at the
time of the contract
ART. 1579 – RESCISSION of SALE of ANIMALS
- The animal shall be returned in the
conditioned in which it was sold and
delivered; the buyer is liable for injury
due to negligence and not arising from
redhibitory defect
Art. 1580: REMEDIES of the BUYER of ANIMALS with
REDHIBITORY DEFECTS
a. Withdrawal or rescission plus damages
b. Proportionate reduction in price plus damage
PRESCRIPTIVE PERIOD for the Remedies is 40 DAYS from
date of delivery to the buyer
ART. 1581: The Sale of LARGE CATTLE shall be governed
by SPECIAL LAWS
ART. 1582: OBLIGATIONS OF THE BUYER
Principal obligations of the Buyers
a. Accept Delivery
b. Pay the Price
NOTE: Unless the deed of conveyance is executed, the
buyer as a rule is not required to pay the price
: Tender of Payment ought to be in Legal Tender
Legal Tender- the currency which is in circulation and
when offered to the creditor he cannot refuse.
(E.T.Reyes)
When NO Time and Place of Payment was Stipulated
- The payment must be made at the time
and place of the delivery of the thing
sold
ART. 1583: GENERALLY NO DELIVERY BY INSTALLMENT
Reason: performance must generally be complete
Exception: express provision
Installment Deliveries:
a. Delivery by stated instalments, separately paid
for; and
b. Seller makes defective deliveries in respect of
one or more instalments; or
c. Buyer neglects or refuse without just cause to
take delivery of or pay for one or more
instalments
o Determine if breach of contract is:
 Material so as to justify the injured party to
refuse to proceed further and sue for damages
for breach of entire contract; or
 Severable, giving rise to a claim for
compensation but not to a right to treat the
whole contract broken.
ART. 1584: BUYER HAS RIGHT TO EXAMINE
Gen. RULE: Buyer has the right to examine even if the
goods are shipped f.o.b.
EXCEPTION:
1. Contrary stipulation;
2. Goods are delivered C.O.D., unless there is an
agreement or usage of trade permitting the
examination
NOTE: The Right to Examine must be availed within a
reasonable time in order that the seller mat not be
subjected to undue delay or prejudice in the payment of
his products OTHERWISE he is deemed to have
accepted the goods
ART. 1585: ACCEPTANCE OF GOODS
When there is Acceptance of the Goods
1. Express acceptance;
2. Performance by the buyer of an act of
ownership;
3. Failure to return the thing after a reasonable
lapse of time
ART. 1586: SELLER is STILL LIABLE for BREACH of
PROMISE or WARRANTY
- Even if the goods have been accepted by the
BUYER unless there is an express or implied
agreement of the parties
NOTE: the Buyer is allowed to set up the breach of the
warranty or promise as a set-off or counterclaim for the
price.
BUT SELLER shall NO LONGER be LIABLE if:
1. After the buyer has accepted the goods; and
2. The buyer fails to give notice to seller of breach
within a reasonable time after he/she had
known or should have known of such breach
REASON: to prevent afterthoughts or belated claims
ART 1587: EFFECTS of JUSTIFIABLE REFUSAL of the
BUYER to ACCEPT the DELIVERY
a. The buyer has no duty to return the goods to
the seller
b. But the buyer mat make himself a voluntary
depository – in which case he must safely take
care of them in the mean time
ART. 1588: EFFECTS of UNJUSTIFIABLE REFUSAL of the
BUYER to ACCEPT the DELIVERY
Gen. RULE: The Buyer becomes the owner
EXCEPTION:
1. There is a contrary stipulation; or
2. The seller reserves ownership as security for the
payment of the price
ART. 1589: BUYER has to PAY for INTEREST on the PRICE
if:
1. There is a stipulation;
- Demand is not needed
2. The thing sold and delivered produce fruits or
income;
REASON: fruits or income is sufficient to
warrant the payment of interest
3. The buyer is in default, from the time of judicial
or extrajudicial demand for the payment of the
price
ART. 1590: SUSPENSION of PAYMENT by the BUYER
If:
1. Disturbance in the possession or ownership of
the thing or there is a well-grounded fear
(fundado temor)
2. The fear is because of :
a. A vindicatory action or action to
recover; or
b. A foreclosure or mortgage
NOTE:
- The fear must not be the result of any other
ground, like the seller’s insanity
- A mere act of trespass is made by one claiming
no legal right whatsoever. Here, the buyer is not
authorized to suspend the payment of the price
EXCEPTION:
1. Seller gives security for the return of the price in
a proper case; or
2. There is a stipulation that the buyer is bound to
make the payment notwithstanding such
contingency
ART. 1591. SELLER may IMMEDIATELY SUE for the
RESCISSION of the SALE
The seller must have reasonable grounds to fear:
1. LOSS of the immovable property sold, and
2. LOSS of the price
RULE: If neither ground exists, Art. 1191 applies:
“The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him …. (READ art.
1191)”
ART. 1592: RESCISSION of SALE of REAL PROPERTY
The Buyer may still pay the price after the expiration of
the period in the case of:
a. In the SALE of IMMOVABLE Property or REAL
Property.
o This is not applicable to a Contract To
SELL or a Promise to Sell, where the title
remains with the seller until fulfillment
of a positive suspensive condition, such
as full payment of price
b. Even if there is a stipulation that upon failure to
pay the price at the time agreed upon, the
rescission of the contract shall right after takes
place;
c. There is no demand for rescission of the
contract made upon him/her either judicially or
through a notarial act.
NOTE: the Demand is not for the payment of the price,
but for the RESCISSION of the contract
ART. 1593: RESCISSION of SALE of PERSONAL PROPERTY
o This article should apply only if the object sold
has not been delivered to the buyer
o If upon expiration of the period fixed for the
delivery of the thing:
 The buyer should not have appeared to
receive it; or
 Having appeared, he should not have
tendered the price at the time, unless a
longer period has been stipulated for its
payment

(PLEASE READ the CASES)