Article 1582.

Primary Obligations of the Vendee

a. To accept the delivery of the thing
b. To pay the purchase price simultaneously upon the delivery of the thing unless a period
or term has been agreed upon.

EXCEPTION TO SIMULTANEITY OF ACTS: if parties agreed, such as in sale by

installments. Payment shall be made at the stipulated time and place of delivery. If there is
no stipulation at the time and place of delivery of the thing. The failure of the vendee to pay
the price after delivery if ownership had been transferred, does not cause the ownership to
revert back to the seller until and unless the bilateral contract of sale is first rescinded.
Article 1583. Rules in case of Contract of Sale of goods to be delivered in stated
instalments.
- Two instances contemplated:
a. Seller makes defective deliveries in one or more installments
- Buyer may reject the defective portion and accept the good ones
b. Buyer refuses w/o just cause to take delivery or pay one or more installments determine
whether breach is material to warrant refusal to proceed with the entire contract of sale.
When the breach is severable the injured party can seek damages or compensation but not
to rescind the whole contract.
Article 1584. Buyer’s Right to examine goods.
a. Delivery w/o previous examination:
- The buyer is not deemed to have accepted the same unless he had a reasonable
opportunity of examining them for the purpose of finding out whether the conform
with the specifications agreed upon.
b. Tender of Delivery by the seller: If seller tenders delivery, he should give the buyer if the
latter requested, the reasonable opportunity of examining the goods to determine whether
they conform with the contract.
When right of examination not allowed?
a. If there is an express stipulation to the contrary
b. When the goods are delivers “collect on delivery”, the buyer cannot examine the goods,
unless he pays first the price.
Exception: He need not pay the price if there is a contrary agreement or the examination is
permitted by usage of trade at the place of delivery.
Article 1585. Signs or Evidence of Acceptance by the buyer of Goods delivered to him.
(CPR)
 a. When he communicates with the seller expressly manifesting his acceptance thereof.
b. When he performs an act in relation to the goods inconsistent with the ownership of
the seller.
Examples:
(a) continuous possession and use of goods
(b) reselling the goods
(c) mortgaging the goods.

c. When after the lapse of a reasonable time following the delivery, he retains the goods
w/o complaining to the seller or w/o intimating that he has rejected them.

Article 1586. Acceptance of Goods.

Mere Acceptance does not necessarily discharge the seller from liability for the breach of
any promise or warranty. However, to make the seller liable the buyer must notify the seller
w/in a reasonable time about the breach of promise or warranty.
Purpose of Notice:
To insulate the seller from belated claims of defects and to allow him to make urgent
investigation on the validity of claims.
Article 1587. Effects of Justifiable refusal to accept delivery by the buyer
1. Buyer has no duty to return the goods to the seller but must notify the seller of his
refusal to accept the goods. (Risk of Loss here is on the seller)
2. Buyer may voluntarily constitute himself as depositary of the goods, but he will be
liable for damages if he does not fulfil the duties of a depositary as required by law.
(Risk of loss is on the buyer)

Article 1588. Effect of Unjustifiable Refusal to accept goods by the buyer

Title or ownership passes to him from the time goods were placed at his disposal.
Exceptions:
a. If there is contrary agreement.
B. If the seller reserves ownership as security for payment of the price [1503 & 1523]

Article 1589. When vendee is bound to pay interest

(Period b/w date of delivery and date of payment) after delivery:
a. if the parties stipulated
b. if the thing sold and delivered produces fruits or income
 c. if the vendee is in default, from the time demand is made upon him either judicially or
extra-judicially.

Pactum commissorium - This is an agreement between the vendor and the vendee in the
sale of an immovable that rescission of the contract shall of right take place if the vendee
fails to pay the price at the time agreed. This agreement is not valid. Accordingly, the
vendee may pay even after the expiration of the period as long as no demand for rescission
has been made upon him either judicially or by notarial act. After the demand, the court
may not grant him a new term.

REMEDIES OF AN UNPAID SELLER

What are the remedies of an Unpaid Seller?
I. Ordinary
1. Action for Price Exercised when:
a. ownership has passed to buyer;
b. price is payable on a day certain
c. goods cannot readily be resold for reasonable price and Art. 1596 is inapplicable
2. Action for Damages – In case of wrongful neglect or refusal by the buyer to accept or pay for
the thing sold
II. Special
1. Possessory Lien – Seller not bound to deliver if buyer has not paid him the price. It is
exercisable only in following circumstances:
- When you buy anything on credit or with a loan, the creditor has a legal claim on it
until the debt is paid off. Most other types of liens, such as a home mortgage, give the
borrower possession before the obligation is entirely repaid.
a. goods sold without stipulation as to credit
b. goods sold on credit but term of credit has expired
c. buyer becomes insolvent
d. When part of goods delivered, may still exercise right on goods undelivered
EXAMPLE: X sells the goods to Y for 5,000,000. Y pays 2,500,000 and promises to
pay the remaining 2,500,000 after two months. X has a right of lien on the goods.

2. Stoppage in Transitu-
- a right that belongs only to the seller and is only valid between the seller and the
buyer. When an unpaid seller has abandoned ownership of the goods and the buyer
has become insolvent, the right is a helpful "self-help" remedy for enforcing payment.
Requisites:
a. Insolvent buyer
 b. Seller must Surrender the negotiable document of title, if any
c. Seller must bear the Expenses of delivery of the goods after the exercise of the right.
e. Seller must either actually take possession of the goods sold or give Notice of his claim to
the carrier or other person in possession
e. Goods must be in Transit
f. Unpaid seller
EXAMPLE: A sells 100 Kgs of RICE to B but delivery will be two stages. A delivers 50 Kgs rice
in first week of January and will deliver remaining in last week of January. Later on, he
comes know that B has become insolvent. A can stop delivery of remaining in transit and
can resume the same on the payment of price.

Difference between Right of Lien and Stoppage in Transit

- The seller can exercise his right of lien when the buyer is in default irrespective of his
solvency whereas right of stoppage in transit arises only when the buyer has become
insolvent.
- Right of Lien can be exercised by the seller only when the goods are in actual/physical
possession of the seller whereas right of stoppage in transit becomes available when the
seller has parted with possession and the goods are in the custody of an independent
carrier/bailee.
- The right of lien comes to an end once the seller hands over the possession of the goods to
the carrier for the purpose of transmission to the buyer whereas right of stoppage in transit
 becomes available when the seller has parted with possession and the goods are in the
custody of an independent carrier/bailee.
- The right of lien implies retaining the possession of the goods while the right of stoppage
implies regaining possession of the goods

3. Special Right to Resell the Goods Exercised when:

- Until the buyer pays him, he is considered the seller of the items. As a result, he has the
legal right to sell his goods, subject to a few conditions.
a. Goods are perishable,
b. Stipulated the right of resale in case of default, or
c. Buyer in default for unreasonable time

4. Special Right to Rescind Requisites:

a. Expressly stipulated OR buyer is in default for unreasonable time
b. Notice needed to be given by seller to buyer