11.26.

19

ART 1523

General rule: Delivery to the carrier is the delivery to the buyer

Exception: Unless stipulated otherwise by the parties/contrary agreement
Carrier accepts the good but has no intention to deliver to the buyer

General Rule: no payment no delivery  no obligation to pay

No date of payment, no delivery
 If there is no date set, then there can be no delivery, and no payment made

ART 1525
Unpaid seller
- one who has not been paid or tendered the whole price who has received a bill of
exchange
- The seller who has not been paid
- If the bill of exchange is made as a condition for payment, then if the condition is not
met, then the seller becomes an unpaid seller  equivalent to no payment
- Partial payment  unpaid seller only with regard to the balance

ART 1526
Powers of the Unpaid Seller (1523 to 1534)
 Powers retained by the unpaid seller until payment is made
1. Retention of the lien
 An unpaid seller has a lien/claim on the property/goods  has to be reserved
 Partial payment does not extinguish the lien even if the title has transferred to the
buyer
2. Right of stoppage in transitu
 The goods are on the way to the buyer
 Unpaid seller has the right to stop the transit of the good to the buyer
 Small window: Point from the goods are actually travelling towards the buyer to just
before the goods are in possession of the buyer/carrier
 ? Why is the right to stoppage in transit useless once the goods reach the
post/warehouse/buyer?  because there is nothing else to stop and the goods are in
the possession of the bailey
3. Right to resale
4. Right to rescind the sale

ART 1527
When to exercise the Lien
1. When goods were sold without any stipulation as to credit
o No clear provision as to payment
2. When the goods have been sold on credit and the term of credit has expired
3. When the buyer becomes insolvent
o Bankrupt
o When he has more liabilities than assets
o Possibility of recovery becomes nil except maybe when the buyer enters receivership
 o But there is a prioritization of creditor and you might still end up without any
payment
o ? is there a need for a court declaration of insolvency wrt to buyer/debtor?  no need
for the determination of the court that the buyer is insolvent
o ?how to determine insolvency of the buyer? 

ART 1528
Effect of partial payment on the lien
o Lien is not lost by virtue of partial payment
o Refers/extends to the unpaid/remaining portion
 Since it is unfair to put liens on goods that have been paid  unjust enrichment
o Exception: unless partial payment be considered a symbolic gesture for the payment of
the complete debt/obligation

ART 1529
Loss of the lien
1. When the goods have been delivered to the bailey without any reservation (reserving
ownership)
a. There must be a reservation that even if the delivery is effected, then the possessory
lien will still exist as long as the payment has not been done
2. When the buyer lawfully obtains the goods
3. Waiver of lien

Recovery of the lien (when lost)

1. When the buyer refuses the delivery and the goods are still with the carrier  the lien is revived
2. When there is repudiation of the sale by the buyer  possessory lien is revived
o Revived so that the seller may have protection

? what if the goods were just returned to the seller for repair?  the lien will still not be revived

ART 1530
Right to stoppage in transitu
o Requirements:
1. The seller was unpaid
2. When the buyer is insolvent
3. The goods are in transit

? what if the goods were stuck in the pier?  then the goods are still considered to be in transit and the
right to stoppage can be exercised by the seller

?what if the goods were on the ship of the carrier?  then consider whether the bill of lading was
already issued
 Bill of lading is a document which acknowledges the receipt of the carrier of the goods
 Seller loses control
 Considered delivery to the carrier thus delivery to the buyer

4. the seller must take actual possession of the goods

5. the seller must surrender the negotiable instrument to the carrier/bailee
 6. the seller must bear the expenses of the delivery after the exercise of the right
 Cash sales are not subject to stoppage in transitu and are only applicable to sales on credit

ART 1531
When to consider goods are or are not in transit

IN TRANSIT
1. When the goods are delivered to the carrier either by land, sea, or air
2. When the goods are rejected by the buyer

NOT IN TRANSIT
1. When the goods are with the buyer
2. When the carrier retains goods on behalf of the buyer
3. When the carrier refuses to deliver goods to the buyer

ART 1532
Stoppage in transitu rehashed

1. When the goods are physically reclaimed by the seller

2. When there is a document executed to exercise stoppage in transitu

ART 1533
Right of Resale
 Standard: article 19
 Additional Standard: Resale is made according to the customs of the area
 When the resale may be done: within reasonable time from the default of payment
 Where the resale may be done: the place where the goods were delivered in the first place

*ART 1534 – 1544 -

*ART 1545 - 1581 - warranties
*ART 1582 onwards – obligations of the vendee
ART 1545
Conditions or warranties