ART.
1491
Persons who connot acquire by purchase:
1. Guardians
2. Agents
3. Executors and administrators
4. Public officers and employees
5. Judicial officers and employees, and
lawyers
6. Others especially disqualified by law
If the sale is made, would the transaction be
void or merely voidable?
A. For 1 to 3, voidable
B. For 4 to 6, null and void
ART. 1492
Relative incapacity provided in Arts. 1490-
1491 also applies to:
1. Sales by virtue of legal redemption
2. Compromises
a. Contract whereby parties
avoid litigation
3. Renunciation
a. Creditor gratuitously
abandons his right against his
creditor
ART. 1493
Effect of loss of thing at the time of sale:
1. Thing entirely lost
a. Inexistent, or
b. void
2. Thing only partially lost
a. Withdrawing from the
contract, or
b. Demanding the remaining
part (pay proportionate price)
A thing is lost when it perishes or goes out
of commerce or disappears in such a way
that its existence is unknown or it cannot be
recovered
ART. 1494
Effect of loss in case of specific goods:
Two alternative remedies
1. Avoid the sale
2. Make the sale valid
As to divisibility:
1. Sale divisible – 2nd option only
2. Sale indivisible – object considered
as a specific thing
ART. 1495
Principal obligations of the vendor:
1. To transfer the ownership of the
determinate thing sold
2. To deliver the thing
3. To warrant against eviction and
hidden defects
4. To take care of the thing, pending
delivery, with proper diligence
5. To pay for the expenses for the
execution and registration of the
deed of sale, unless there isa
stipulation to the contrary
ART. 1496
Transfer of ownership effected by delivery
1. Ways of effecting delivery
a. By actual or real delivery
b. By constructive or legal
delivery
c. By delivery in any other
manner signifying an
agreement that the possession
is transferred to the vendee
2. Intention to deliver essential
3. Delivery to proper person
Ways of effecting constructive delivery
1. Equivalent to actual delivery
a. By the execution of a public
instrument
b. By symbolical tradition or
traditio symbolica
c. By traditio longa manu
d. By traditio brevi manu
e. By traditio constitutum
possessorium
f. By quasi-delivery or quasi-
traditio
2. Contrary may be stipulated
ART. 1497
Delivery of the thing, together with the
payment of the price, marks the
consummation of the contract of sale.
There is actual delivery when the thing sold
is in the control and possession of the
vendee
Delivery is generally evidenced by a written
acknowledgement of a person
ART. 1498
Public insrument
- One which is acknowledged before a
notary public or any official
authorized to administer oath, by the
person who executed the same
GR. Execution of public instrument applies
to movable as well as immovable property
EX. Stipulation that there was no intention
of delivery
ART. 1499
Traditio longa manu
- Takes place by the mere consent or
agreement of the contracting parties
as when the vendor merely points to
the thing sold which shall thereafter
be at the control and disposal of the
vendee
Traditio brevi manu
- Take plae when the vendee has
already the possession of the thing
sold by virtue of another title. When
 the lessor sells the thing leased to the
lessee
ART. 1500
Traditio constitutum possessorium
- Opposite of traditio brevi manu
- Takes place when the vendor
continues in possession of the
property sold not as owner but in
some other capacity
ART. 1501
Quasi-traditio
In case of incorporeal things
1. By the execution of a public
instrument
2. By the placing of the titles of
ownership in the possession of the
vendee
3. By allowing the vendee to use his
rights as new owner with the consent
of the vendee
ART. 1502
Contracts of sale or return, and of sale on
trial or approval or satisfaction
1. Sale or return – the option to
purchase or return the goods rests
entirely on the buyer without
reference to the quality of the goods.
Resolutory condition
2. Sale on trial or approval – the title
shall continue in the seller until the
sale has become absolute either by
the buyer’s approval of the goods, or
by his failing to comply with the
express or implied conditions of the
contract as to giving notice of
dissatisfaction or as to returning the
goods, suspensive condition
ART. 1503
Delivery of specific goods sold generally
passes title
1. Delivery to the carrier – deemed to
be a delivery to the buyer
2. Redelivering by carrier to seller
himself – carrier shall be the bailee
for the seller and the ownership will
remain to the seller
Where seller or his agent is consignee
1. Carrier becomes bailee to seller
2. Rights of the seller – not only retain
the goods but he may dispose of
them to third persons (with damages)
Where buyer or his agent is consignee but
seller retains the bill of lading
1. Right to possession of goods as
against buyer
2. Effect of retention – buyer is unable
to obtain the goods without the bill
Where bill of lading is sent forward with
draft attached
1. Delivery conditional – regarded as
retained in the seller until the bill of
exchange is paid
2. Duty of buyer if draft not honored –
buyer is bound to return the bill of
lading if he does not honor the bill of
exchange
3. Right of innocent third persons – a
purchaser in good faith for value of
the bill of lading or goods from the
buyer will obtain the ownership in
the goods although the bill of
exchange is not honored
ART. 1504
Risk of loss generally attends title
GR. Thing is lost by fortuitous event, the
risk is borne by the owner of the thing at the
time of loss (res perit domino)
EX.
1. Where the seller reserves the
ownership of the goods merely to
secure the performance by the buyer
of his obligations (ownership
transferred to the seller)
2. Actual delivery has been delayed
through the fault of either buyer or
seller, goods are at he risk of the
party at fault
Risk of loss by fortuitous event after
perfection but before delivery
1. Exception to the rule “res perit
domino”
ART. 1505
Sale by a person not the owner
1. Where the owner of the goods is, by
his conduct, precluded from denying
the seller’s authority to sell
2. Where the law enables the apparent
owner to dispose of the goods as if
he were the true owner thereof
3. Where the sale is sanctioned by
statutory or judicial authority
4. Where the sale is made at merchant’s
stores, fairs, or markets
5. Where the seller has a voidable title
which has not been avoided at the
time of sale
6. Where seller subsequently acquires
title
ART. 1506
Sale by one having a voidable title
1. Requisites for acquisition of good
title by buyer
a. Before the title of the seller
has ben avoided
b. In good faith for value
 c. Without notice of the seller’s
defect of title
2. Basis of rule
a. The principle that where loss
has happened which must fall
on one of two innocent
persons, it should be borne by
him who is the occasion of
the loss
Definition of terms
1. Document of title to goods – any bill
of lading, dock warrant, “quedan,” or
warehouse receipt or order for the
delivery
2. Goods – all chattels personal but not
things in action or money of legal
tender in the Philippines
3. Order – an order by indorsement on
the documents
ART. 1507
Nature and function of documents of title
1. Receipts of, or orders upon, a bailee
of goods represented
2. Evidence of transfer of title and
possession of goods and contract
between the parties
a. Transfer of title
b. Transfer of possession
c. Contract between the parties
who are bound by its terms
Most common forms of documents of title
1. Bill of lading
2. Dock warrant
3. Warehouse receipt
Classes of documents of titles
1. Negotiable documents of title
2. Non-negotiable documents of title
ART. 1508
Negotiation of negotiable document by
delivery
If the goods are deliverable to the
bearer, or when it is indorsed in blank or to
the bearer by the person to wose order the
goods are deliverable or by a subsequent
indorsee
ART. 1509
Negotiation of negotiable document by
indorsement
1. If indorsed in blank or to bearer, the
document becomes negotiable by
delivery
2. If indorsed to specific person, it may
be again negotiated by the
indorsement of such person in blan,
to bearer, or to another specified
person. Delivery alone is not
sufficient
ART. 1510
Negotiable documents of title marked “non-
negotiable”
The words ‘not negotiable,” “non-
negotiable,” and the like when placed upon a
document of title in which the goods are to
be delivered to “order” or to ‘bearer” have
no effect and the document continues to be
negotiable
ART. 1511
Transfer of non-negotiable documents
Cannot be negotiated. Nevertheless,
it can be transferred or assigned by delivery.
ART. 1512
Persons who may negotiate a document
1. By the owner thereof
2. By any person to whom the
possession or custody of the
document has been entrusted by the
owner
ART. 1513
Rights of person to whom document has
been negotiated
1. Title of the person negotiating the
document, over the goods covered by
the document
2. Title of the person to whose order by
the term of the document the goods
were to be delivered, over such
goods
3. Direct obligation of the bailee to
hold of the goods for him, as if the
bailee has directly contracted directly
with him
ART. 1514
Rights of person to whom document has
been transferred
1. Title to goods as against transferor
2. In addition
a. The right to notify the bailee
of the transfer thereof
b. The right, thereafter, to
acquire the obligation of the
bailee to hold the goods for
him
3. Right of assignee – merely steps into
the shoes of the transferor
Rights of third person to goods where
document has been transferred
1. The transfer of a non-negotiable
document of title does not effect the
delivery of the goods covered by it
2. If the document is negotiable, the
goods cannot be attached or be
levied under an execution unless the
document be first surrendered to the
bailee or its negotiation enjoined
ART. 1515
Transfer of order document without
indorsement
1. The right to the goods as against the
transferor
2. The right to compel the transferor to
indorse the indorsement
ART. 1516
Warranties on sale of documents
1. The document is genuine
2. That he has a legal right to negotiate
or transfer it
3. That he has knowledge of no fact
which would impair the validity or
worth of the document
4. That he has a right to transfer the
title to the goods and that the goods
are merchantable or fit for a
particular purpose, whenever such
warranties would have been implied
if the contract of the parties had been
to transfer without a document of
title the goods represented thereby
ART. 1517
Indorser not a guarantor
The indorsement of a negotiable
instrument has a double effect
1. The indorser will pay the instrument
if the party primarily liable fails to
do so
2. Amounts merely to a conveyance by
the indorser, not a contract of
guaranty
ART. 1518
When negotiation not impaired by fraud,
mistake, duress, etc
It may be negotiated even by a thief
or finder and the holder thereof would
acquire a good title thereto if he paid value
therefor in good faith without notice of the
seller’s defect of title
ART. 1519
Attachment or levy upon goods covered by a
negotiable instrument
1. While in the possession of such
bailee, the goods cannot be attached
or levied under an execution unless
the document be first surrendered or
its negotiation prohibited by the
court
2. The bailee cannot be compelled to
deliver the possession of the goods
until the document is surrendered
ART. 1520
Creditor’s remedies to reach negotiable
documents
This article expressly gives the court
full power to aid by injunction and otherwise
a creditor seeking to get a negotiable
document covering such goods
However, if an injunction is issued
but the negotiable document of title is
negotiated to an innocent person, the transfer
is nevertheless effectual
ART. 1521
Place of delivery of goods sold
1. Rules
a. Where there is agreement,
express or implied, the place
of delivery is that agreed
upon
b. Where there is no agreement,
the place of delivery is that
determined by usage of trade
c. Where there is no agreement
and there is no prevalent
usage, the place of delivery is
the seller’s place of business
d. In any other case, the place of
delivery is the seller’s
residence
e. In case of specific goods,
which to the knowledge of
the parties at the time the
contract is made were in
some other place, that place
is the place of delivery
Time of delivery of goods sold
1. If no time is fixed by the contract,
then the seller is bound to send the
goods to the buyer within a
reasonable time
2. If the contract provides a fixed time
for performance
3. Where the contract does not specify
the time for delivery so that delivery
is to be made within a reasonable
time
Delivery of goods in possession of a third
person
It is not enough to discharge the
seller that the bailee has become the agent
for the buyer. To affect third persons, the
person holding the gods must acknowledge
being the bailee for the buyer
Hour of delivery of goods sold
1. What is the reasonable hour is a
question of fact largely dependent
upon the circumstances
2. In case of goods which are bulky or
needed special care, an hour might
be reasonable which would not be so
n an ordinary payment of a small
amount of money
Duty of the seller to put goods in a
deliverable condition
The seller bears the expenses to
place the thing in a deliverable state, unless
otherwise stated.
 One who has not been paid or
ART. 1522 tendered the whole price or who has
Delivery of goods less than quantity received a bill of exchange or other
contracted negotiable instrument as condition on which
1. Reject the goods it was received has been broken by reason of
2. Accept the goods and pay for the dishonor of the instrument
a. Price at contract rate Where whole of the price has not been paid
(knowledge of the buyer) 1. Tender of payment by buyer
b. Fair value 2. Payment of part of price
Delivery of gods more than quantity 3. Payment by negotiable instrument
contracted
1. Accept he quantity contracted for
and reject the excess
2. Accept all and pay all of them
Delivery of goods mixed with others
1. Accept what is contracted for and
reject the rest
2. Accept all and pay for all of them

ART. 1523
Delivery to carrier on behalf of buyer
GR. Delivery of such goods to the
carrier constitutes delivery to the buyer,
whether the carrier is named by the buyer or
not
EX. Provided for in paragraph 1,2
and 3 of art. 1503 and when a contrary intent
appears, that is, the parties did not intend the
delivery of the goods to the buyer through
the carrier
Seller’s duty after delivery to carrier
1. To enter on behalf of buyer into such
contract reasonable under the
circumstances
2. To give notice to buyer regarding
necessity to insure goods
Definition of trade terms
1. C.O.D. – “collect on delivery”
2. F.O.B. – “free on board”
3. C.I.F. – ‘cost insurance and freight”
4. F.A.S. – “free alongside vessel”
(named port of shipment)
5. Ex factory, Ex Warehouse, etc. –
(named point of origin0
6. Ex Dock – (named port of
importation)

ART. 1524
Delivery simultaneous with payment of
price
The contract of purchase and sale is
bilateral and from it arises not only the
obligation to deliver the thing but also that
of paying the price.
When delivery must be made before
payment of price
The thing must be delivered through
the price be not first paid, if a time for such
payment has been fixed in the contract

ART. 1525.
Meaning of unpaid seller