Professional Documents
Culture Documents
Sales Finals Reviewer Chan PDF
Sales Finals Reviewer Chan PDF
CHAN 1
LAW 103
SALES LAW
PROF. GERARD L. CHAN
Sale of Thing Expected vs. Sale of Hope Itself Art. 1465 Things subject to a resolutory condition may be the
Sale of thing expected Sale of hope itself object of the contract of sale. (n)
(Emptio rei speratae) (Emptio sipei)
Sale of a thing not yet in Sale of the hope itself that Sale of thing subject to a resolutory condition.
existence subject to the the thing will come into - If the resolutory condition attaching to the object of the
condition that the thing will exist existence, where it is agreed contract, which object may include things as well as rights,
and on failure of the condition, that the buyer will pay the should happen, then the vendor cannot transfer the
contract becomes ineffective price even if the thing does ownership of what he sold since there is no object
hence, the buyer has no not eventually exist
obligation to pay the price Art. 1503 When there is a contract of sale of specific goods,
Deals with a future thing Deals with a thing that the seller may, by the terms of the contract, reserve the right of
actually exists - the hope or possession or ownership in the goods until certain conditions
expectancy have been fulfilled. The right of possession or ownership may be
Sale is subject to the condition Produces effect even thus reserved notwithstanding the delivery of the goods to the
that the thing should exist, so though the thing does not buyer or to a carrier or other bailee for the purpose of
that if it does not, there will be come into existence transmission to the buyer.
no contract by reason of the because the object of the
absence of an essential element contract is the hope itself Where goods are shipped, and by the bill of lading the goods
are deliverable to the seller or his agent, or to the order of the
Presumption in case of doubt. seller or of his agent, the seller thereby reserves the ownership
- In case of doubt, presumption is in favor of emptio rei in the goods. But, if except for the form of the bill of lading, the
speratae (more in keeping with the commutative contract) ownership would have passed to the buyer on shipment of the
goods, the seller's property in the goods shall be deemed to be
Art. 1462 The goods which form the subject of a contract of only for the purpose of securing performance by the buyer of his
sale may be either existing goods, owned or possessed by the obligations under the contract.
seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, in this Title Where goods are shipped, and by the bill of lading the goods
called "future goods." are deliverable to order of the buyer or of his agent, but
possession of the bill of lading is retained by the seller or his
There may be a contract of sale of goods, whose acquisition by agent, the seller thereby reserves a right to the possession of
the seller depends upon a contingency which may or may not the goods as against the buyer.
happen. (n)
A. Capacity of Parties
ISSUE/S:
Art. 1492 The prohibitions in the two preceding articles are
WON there was an absolute separation of property as their
applicable to sales in legal redemption, compromises and
property regime, thereby making the tax assessment invalid
renunciations. (n)
HELD: There was no absolute separation of property.
Notes from Baviera - The property regime alleged does not exist between them;
- Husband and wife cannot sell property to each other, the circumstantial evidence does not point to its existence
except when a separation of property was agreed upon, or - The spouses did not have any property or business before
when there has been a judicial separation of property the marriage, and hence, no reason to enter into such a
- This is to protect third persons who may have contracted property regime.
with a spouse, believing in the existence of certain - A pre-nuptial agreement to have such property regime
properties, and who could easily by defrauded cannot be effective until the marriage is celebrated, and
- In case of a disagreement between spouses (w/regard to therefore, could not have been recorded.
administration, alienation or encumbrance of community - The spouses still acted as if they had absolute community
property or conjugal partnership property), husband’s of property; Antonia’s proceeds were to be given to
decision shall prevail, without prejudice to wife’s remedy of Antonio’s agent or deposited to Antonio’s bank account.
recourse to the courts within 5 years from execution - The sale of the logs between spouses being violative of Art.
- Any alienation or encumbrance by one spouse without the 1490, the Collector was correct in disregarding them and
consent of the other shall render the contract void assessing the sales as original sales taxable.
- Prohibition of transfer of property between spouses can
only be taken advantage of by persons who bear such a
relationship to the spouses making the transfer of to the
property itself that such transfer interferes with their rights
or interests (ex. Creditor of the husband who became such
after transfer, cannot set up claim of nullity)
B2017 Herrera-Lim | Husmillo | Santos “FRONNIE NOTES”
LAW 103 SALES | PROF. CHAN 23
3. Applicability to Common Law Spouses who acted in bad faith is not validly married to another, his or
her shall be forfeited in the manner provided in the last
Art. 133, FC From the common mass of property support shall paragraph of the preceding Article.
be given to the surviving spouse and to the children during the
liquidation of the inventoried property and until what belongs to The foregoing rules on forfeiture shall likewise apply even if
them is delivered; but from this shall be deducted that amount both parties are in bad faith. (144a)
received for support which exceeds the fruits or rents pertaining
to them. (188a) Why It Should Apply to Common-Law Spouses
1. Family Code answer: No consent of the spouse
Art. 147, FC When a man and a woman who are capacitated 2. Civil Code answer: Contrary to public policy
to marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void Calimlim-Canullas v. Fortun
marriage, their wages and salaries shall be owned by them in FACTS:
equal shares and the property acquired by both of them 1. Mercedes and Fernando Canullas were married and living
through their work or industry shall be governed by the rules on together with their 5 children in a small house on a
co-ownership. residential land in Pangasinan. Fernando inherited the land
from his father when he passed away.
In the absence of proof to the contrary, properties acquired 2. Fernando abandoned the family to live with Corazon
while they lived together shall be presumed to have been Daguines. They were later on convicted of Concubinage.
obtained by their joint efforts, work or industry, and shall be 3. Later on, Fernando sold the house and lot to Corazon.
owned by them in equal shares. For purposes of this Article, a Corazon, however, could not take possession of the
party who did not participate in the acquisition by the other property as Mercedes and her children were living on the
party of any property shall be deemed to have contributed house built there. Corazon then filed an action to quiet title
jointly in the acquisition thereof if the former's efforts consisted to which Mercedes raised the defense that the house was
in the care and maintenance of the family and of the household. conjugal property and without her consent, the sale should
be null and void.
Neither party can encumber or dispose by acts inter vivos of his 4. The trial court first ruled for Corazon but reversed itself
or her share in the property acquired during cohabitation and upon Mercedes’ motion for reconsideration.
owned in common, without the consent of the other, until after
the termination of their cohabitation. ISSUE/S:
1. WON the construction of the conjugal home on the
When only one of the parties to a void marriage is in good faith, exclusive property of Fernando gave it a conjugal character
the share of the party in bad faith in the co-ownership shall be as well
forfeited in favor of their common children. In case of default of 2. WON under the circumstances, the sale of the lot was valid
or waiver by any or all of the common children or their
descendants, each vacant share shall belong to the respective HELD:
surviving descendants. In the absence of descendants, such 1. Court held: Both the land and the building belong
share shall belong to the innocent party. In all cases, the to the conjugal partnership
forfeiture shall take place upon termination of the cohabitation. - The land became conjugal in character but now the CPG
(144a) became indebted to Fernando for the value of the land,
pursuant to Article 158 of the Civil Code. Hence, Fernando
Art. 148, FC In cases of cohabitation not falling under the could not have validly disposed of the property to Daguines
preceding Article, only the properties acquired by both of the without the consent of Mercedes.
parties through their actual joint contribution of money,
property, or industry shall be owned by them in common in 2. Court held: The contract of sale was null and void
proportion to their respective contributions. In the absence of - The sale is void for being contrary to law, morals, good
proof to the contrary, their contributions and corresponding customs, public order and public policy, as stated by Art.
shares are presumed to be equal. The same rule and 1352.
presumption shall apply to joint deposits of money and - The sale was made by a husband in favor of a concubine
evidences of credit. after he had abandoned his family and left the conjugal
home where his wife and children lived and from whence
If one of the parties is validly married to another, his or her share they derived their support
in the co-ownership shall accrue to the absolute community or - The sale was subversive of the stability of the family, a basic
conjugal partnership existing in such valid marriage. If the party social institution which public policy cherishes and protects
(4) Where notice has not been given that a sale by auction is Art. 1483 Subject to the provisions of the Statute of Frauds
subject to a right to bid on behalf of the seller, it shall not be and of any other applicable statute, a contract of sale may be
lawful for the seller to bid himself or to employ or induce any made in writing, or by word of mouth, or partly in writing and
person to bid at such sale on his behalf or for the auctioneer, to partly by word of mouth, or may be inferred from the conduct of
employ or induce any person to bid at such sale on behalf of the the parties. (n)
seller or knowingly to take any bid from the seller or any person
employed by him. Any sale contravening this rule may be
treated as fraudulent by the buyer. (n)
ISSUE/S:
Art. 1338 There is fraud when, through insidious words or
WON the mistake as to area is sufficient ground to have the
machinations of one of the contracting parties, the other is
document avoided. (YES)
induced to enter into a contract which, without them, he would
not have agreed to. (1269)
HELD:
1. Yes. The mistake is sufficient ground.
Art. 1331 In order that mistake may invalidate consent, it - The Court held that Art. 1471, insofar as it refers to sales of
should refer to the substance of the thing which is the object of real estate for a lump sum, is the applicable law.
the contract, or to those conditions which have principally o In case of sale of real estate for a lump sum and not at
moved one or both parties to enter into the contract. the rate of specified price for each unit or measure,
there shall be no increase or decrease of the price even
Mistake as to the identity or qualifications of one of the parties if the area be found to be more or less than that stated
will vitiate consent only when such identity or qualifications have in the contract. Same rule applies when two or more
been the principal cause of the contract. estates are sold for a single price. But, if in addition to
a statement of the boundaries, which is indispensible in
A simple mistake of account shall give rise to its correction. every conveyance of real estate, the area of the estate
(1266a) should be designated in the contract, the vendor shall
be obliged to deliver all that is included within such
- Deceit need not be by misrepresentation in words boundaries, even should it exceed the area specified in
- Failure to disclose the facts, when there is a duty to reveal the contract; and should he not be able to do so, he
them, constitutes fraud shall suffer a deduction of the price in proportion to
what is lacking of the area, unless the contract be
Asiain v. Jalandoni annulled by reason of the vendee’s refusal to accept
FACTS: anything other than that which was stipulated.
1. Luis Asian, owner of hacienda Maria in Negros Occidental, - o The Court then noted that there are conflicting views
offered to sell to Benjamin Jalandoni a portion of the latter as to what Art. 1471 could mean. According to Manresa, the
for P55k. Asian indicated the tract of land with a hand wave, second view is an erroneous interpretation because the
affirmed that it contained between 25-30 ha, and that it vendor would lose in either case; should the area contain
would produce no less than 2k piculs. more than stipulated in the contract, the vendor loses the
HELD:
1. No. Purchase price need not be paid in full
- Garcia claims that: the checks for P84, 860 did not
constitute proper payment and was made beyond the 5-
year period
- The contract doesn’t say that Nietes had to pay P100,000
before exercising his option to buy the property. In case of
an option to buy, the creditor may validly and effectively
exercise his right by merely advising the debtor of his
decision to buy and expressing his readiness to pay the
ISSUES:
1. WON the complaint alleging breach of contractual right of
first option states a valid cause of action. (YES)
2. WON there is cause of action under PD 1517. (NO)
3. WON the Deed of Assignment included the option to
purchase. (YES)
4. WON Raymundo was privy to the Contract of Lease. (YES)
Art. 1319 Consent is manifested by the meeting of the offer (1) Where goods are put up for sale by auction in lots, each lot is
and the acceptance upon the thing and the cause which are to the subject of a separate contract of sale.
constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a (2) A sale by auction is perfected when the auctioneer
counter-offer. announces its perfection by the fall of the hammer, or in other
customary manner. Until such announcement is made, any
Acceptance made by letter or telegram does not bind the bidder may retract his bid; and the auctioneer may withdraw the
offerer except from the time it came to his knowledge. The goods from the sale unless the auction has been announced to
contract, in such a case, is presumed to have been entered into be without reserve.
in the place where the offer was made. (1262a)
(3) A right to bid may be reserved expressly by or on behalf of
- Consent is the concurrence of offer (which must be the seller, unless otherwise provided by law or by stipulation.
certain) and acceptance (which must be absolute and
unqualified) between the parties. (4) Where notice has not been given that a sale by auction is
- The Civil Code has adopted the theory of cognition subject to a right to bid on behalf of the seller, it shall not be
wherein the contract is perfected as soon as the acceptance lawful for the seller to bid himself or to employ or induce any
of the offeree once the offeror gains knowledge of it, person to bid at such sale on his behalf or for the auctioneer, to
whether actual or constructive. employ or induce any person to bid at such sale on behalf of the
- The theory of cognition is also applicable to the withdrawal seller or knowingly to take any bid from the seller or any person
of offers; an offer is validly withdrawn as soon as the employed by him. Any sale contravening this rule may be
withdrawal of the offer by the offeror comes into the treated as fraudulent by the buyer. (n)
knowledge of the offeree before the latter can
communicate his/her acceptance.
FACTS:
1. Aug 2 1988: Lea Zulueta-Laforteza executed special power of
attorney in favor of Roberto and Gonzalo Laforteza,
authorizing them to jointly sell the property for the
settlement of the late Francisco Laforteza; Michael Laforteza
granted the same authority to Roberto and Gonzalo
2. Oct 1988: Dennis Laforteza executed a Special Power of
attorney in favor of Roberto to sell the property, then a year
later, executed an agency instrument similar to that of Lea
and Michael.
3. Jan 1989: Heirs of the late Francisco Laforteza (Lea, Michael
and Dennis) represented by Gonzalo and Roberto entered
into a Memorandum of Agreement (Contract to sell) the
subject property with Alonzo Machuca for P630k payable as
follows:
- P30k earnest money, to be forfeited if sale is not
effected due to fault of Machuca
- P600k upon issuance of TCT in the name of Francisco
Laforteza and upon execution of extra-judicial
settlement of decedent’s estate with sale in favor of
Machuca
- Par. 4 of MoA stated that upon issuance of the new
title, Machuca shall be notified in writing and have 30
days to produce the P600k balance which shall be paid
to the heirs upon execution of the extrajudicial
settlement with sale
4. Jan 1989: Machuca paid earnest money of P30k plus rentals
5. Sept. 1989: Laforteza Heirs presented Machuca with a copy
of the reconstituted title to the subject property and the 30-
day notice to pay the P600k balance.
6. Oct. 1989: Machuca sent a letter requesting for an extension
of 30 days until Nov 15 1989 to produce the P600k. Roberto
Laforteza signed conformity to the extension, but Gonzalo
Laforteza did not.
7. Nov 1989: Machuca informed the Laforteza Heirs through
Roberto that he had the balance P600k covered by United
coconut Planters Bank Manager’s Check, but the Laforteza
heirs refused to accept the check, claiming the property was
no longer for sale.
8. Nov. 20: Laforteza Heirs informed Machuca that they were
cancelling the MoA on grounds of failure by Machuca to
comply with his obligation to pay the purchase price.
9. Machuca reiterated offer to tender payment but Laforteza
Heirs insisted on rescission of MoA, leading Machuca to file
an action for specific performance.
ISSUE:
WON the oral contract for the sale of land is enforceable (YES)
Art. 1874 When a sale of a piece of land or any interest therein ISSUES:
is through an agent, the authority of the latter shall be in writing; WON contract of sale was perfected between City-Lite and Roy?
otherwise, the sale shall be void. (n) (NO)
2.c. Executory Sales 3.a. Where Price is at Certain Rate per Unit of Measure
3. Maceda Law (RA 6552) 2.e. Under the Public Land Act