EXCERPT - LAW ON SALES – Notes 13

Ref. book: Law on Sales, by Hector De Leon.

ART.1582-1591

CHAPTER 5 - OBLIGATIONS OF THE VENDEE

Art. 1582. The vendee is bound to accept delivery and to pay the price of the thing sold at the
time and place stipulated in the contract.

If the time and place should not have been stipulated, the payment must be made at the time
and place of the delivery of the thing sold.

Art. 1583. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof
by installments.

Where there is a contract of sale of goods to be delivered by stated installments, which are to
be separately paid for, and the seller makes defective deliveries in respect of one or more
installments, or the buyer neglects or refuses without just cause to take delivery of or pay for
one more installments, it depends in each case on the terms of the contract and the
circumstances of the case, whether the breach of contract is so material as to justify the injured
party in refusing to proceed further and suing for damages for breach of the entire contract, or
whether the breach is severable, giving rise to a claim for compensation but not to a right to
treat the whole contract as broken. (n)

Rules governing delivery in installment.

(1) In an ordinary contract for the sale of goods, the buyer is not bound to receive
delivery of the goods in installment. He is entitled to delivery of all the goods at the same time
and, it may be added, is bound to receive delivery of all at the same time. Similarly, a buyer has
no right to pay the price installments. Neither can he be required to make partial payments. By
agreement, however, the goods may be deliverable by installment or the price payable in
installment. (see Art. 1248.)
(2) Where the contract provides for the delivery of goods by installments and a separate
price has been agreed upon each installment, it depends in each case on the terms of the
contract and the circumstances of the case whether the breach thereof is severable or not.
(3) If the seller makes defective deliveries or the buyer wrongfully neglects or refuses to
accept delivery or fails to pay any installment, the injured party may sue for damages for breach
of the entire contract if the breach is so material (e.g.; breach of one installment prevents the
further performance of the contract) as to affect the contract as a whole. Where the breach is
severable, it will merely give rise to a claim for compensation for the particular breach but not a
right to treat the whole contract as a broken.

Art. 1584. Where goods are delivered to the buyer, which he has not previously examined, he is
not deemed to have accepted them unless and until he has had a reasonable opportunity of
examining them for the purpose of ascertaining whether they are in conformity with the contract
if there is no stipulation to the contrary.

Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound,
on request, to afford the buyer a reasonable opportunity of examining the goods for the
purpose of ascertaining whether they are in conformity with the contract.

Where goods are delivered to a carrier by the seller, in accordance with an order from or
agreement with the buyer, upon the terms that the goods shall not be delivered by the carrier to
the buyer until he has paid the price, whether such terms are indicated by marking the goods
with the words "collect on delivery," or otherwise, the buyer is not entitled to examine the
goods before the payment of the price, in the absence of agreement or usage of trade permitting
such examination. (n)

Buyer’s right to examine the goods.

Acceptance, as used in Article 1584, is assent to become owner of the specific goods when
delivery of them is offered to the buyer. (3 Williston, op. cit., Sec. 482, p. 31.)

(1) It is to be noted that the delivery referred to in said article, as can be gathered from
its context, is actual delivery. In other words, the ownership of the goods shall be transferred
only upon actual delivery subject to a reasonable opportunity of examining them to determine if
they are in conformity with the contract. (par.1; see Arts. 1481, 1501, par.2.) The right of
examination or inspection under paragraph 1 is thus a condition precedent to the transfer of
ownership unless there is a stipulation to the contrary,

Waiver of right to examine before payment.

The right of inspection may, of course, be given up by the buyer by stipulation.(ibid.)

Art. 1585. The buyer is deemed to have accepted the goods when he intimates to the seller that
he has accepted them, or when the goods have been delivered to him, and he does any act in
relation to them which is inconsistent with the ownership of the seller, or when, after the lapse
of a reasonable time, he retains the goods without intimating to the seller that he has rejected
them.

Modes of manifesting acceptance.

Article 1585 expresses a definition of acceptance. It may be manifested either expressly or
impliedly.
(1) Express acceptance takes place when the buyer, after delivery of the goods, intimates to the
seller, verbally or in writing, that he has accepted them.
(2) Implied acceptance takes place:
(a) when the buyer, after delivery of goods, does any act inconsistent with the seller’s
ownership, as when he sells or attempts to sell the goods, or he uses (see Smith Bell & Co. [Phils.],
Inc. vs. Gimenez, 8 SCRA 407 [1963]; Pan Pacific Company [Phils.] vs. Advertising Corporation, 23
SCRA 977 [1968].) or makes alteration in them in a manner proper only for an owner; or
(b) when the buyer, after the lapse of a reasonable time, retains the goods without intimating
his rejection.

ART. 1586. In the absence of express or implied agreement of the parties, acceptance
of the goods by the buyer shall not discharge the seller from liability in damages or other
legal remedy for breach of any promise or warranty in the contract of sale. But, if, after
acceptance of the goods, the buyer fails to give notice to the seller of the breach in any
promise of warranty within a reasonable time after the buyer knows, or ought to know of
such breach, the seller shall not be liable therefor. (n)

Acceptance, not a bar to action for damages.

Acceptance, as used in this article, has the meaning explained previously — assent to receive
delivery as transferring possession and ownership in the goods; but it does not carry with it the
additional agreement that the property in the goods shall be taken in full satisfaction of all obligations.
(3 Williston, op. cit., p. 37.)
Therefore, unless otherwise agreed, acceptance of the goods by the buyer (Art. 1585.) does not
discharge the seller from liability in damages or other legal remedy (like rescission) for breach of any
promise

2
Notice to seller of breach of promise or warranty.
(1) Necessity. — Article 1586 requires the buyer, in order to hold the seller liable for breach of
promise or warranty, to give notice to the seller of any such breach within a reasonable time. (2nd
sentence.) Time is counted not simply from the moment the buyer knows of the defect, but from the
time when he ought to have known it. Prompt exercise of opportunity for discovering defects is,
therefore, essential.

(2) Purpose. — The purpose is to protect the seller against belated claims which prevent him from
making prompt investigation to determine the cause and extent of his liability and also to enable him to
take any other immediate steps that his interest may require.

ART. 1587. Unless otherwise agreed, where goods are delivered to the buyer, and he
refuses to accept them, having the right so to do, he is not bound to return them to the
seller, but it is sufficient if he notifies the seller that he refuses to accept them. If he
voluntarily constitutes himself a depositary thereof, he shall be liable as such. (n)

Where buyer’s refusal to accept justified.

(1) Duty of buyer to take care of goods without obligation to return.
— If the goods have been sent to the buyer and he rightfully refuses to accept them, as in the case
where the goods are of not the kind and quality agreed upon, he is in the position of a bailee who has
had goods thrust upon him without his assent. Doubtless, he has the obligation to take reasonable care
of the goods, but nothing more can be demanded of him. Accordingly, he is under no obligation to
return the goods to the seller.
(2) Duty of seller to take delivery of goods. — After notice that the goods have not been and will not
be accepted, the seller must have the burden of taking delivery of said goods.
(3) Seller’s risk of loss of goods. — While the goods remain in the buyer’s possession under these
circumstances, they are, of course, at the seller’s risk. But the buyer is not deemed and is not liable as
a depositary, unless he voluntarily constitutes himself as such.
(4) Right of buyer to resell goods. — Should the seller, when notified to take delivery of the goods
fails to do so, the buyer may resell the goods. The provisions governing resale by the seller when the
buyer is in default, it seems, will generally apply. (see Art. 1533.)

ART. 1588. If there is no stipulation as specified in the first paragraph of article 1523,
when the buyer’s refusal to accept the goods is without just cause, the title thereto
passes to him from the moment they are placed at his disposal. (n)

Where buyer’s refusal to accept wrongful.

Under this article, the buyer’s refusal to accept the goods is without just cause while under Article
1587, the refusal is with a right to do so.
As a general rule, the delivery of the goods to a carrier is deemed to be a delivery of the goods to the
buyer. (Art. 1523, par. 1.) This is true even if the buyer refuses to accept the goods in case his refusal
is without just cause. The title passes to the buyer and, therefore, the risk of loss is borne by him (Art.
1504.) from the moment they are placed at his disposal.

ART. 1589. The vendee shall owe interest for the period between the delivery of the
thing and the payment of the price, in the following three cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the
 payment of the price.

Art. 1590. Should the vendee be disturbed in the possession or ownership of the thing
acquired, or should he have reasonable grounds to fear such disturbance, by a vindicatory
action or a foreclosure of mortgage, he may suspend the payment of the price until the vendor
has caused the disturbance or danger to cease, unless the latter gives security for the return of
the price in a proper case, or it has been stipulated that, notwithstanding any such contingency,
the vendee shall be bound to make the payment. A mere act of trespass shall not authorize the
suspension of the payment of the price.

When vendee can suspend payment of price.

The vendee, under this article, may suspend the payment of the price in two cases only:

(a) if he is disturbed in the possession or ownership of the thing bought; or

(b) if he has a well-grounded fear that his possession or ownership would be disturbed by a
vindicatory action or foreclosure of mortgage.
Under the circumstances provided for by Article 1590, the vendee is only entitled to retain the price
that has not been paid to the vendor. He is not entitled to recover what has already been paid. Under
the second case, it is not necessary that an action be brought against the vendee.

When vendee cannot suspend payment of price.

In the following cases, the vendee cannot suspend the payment of the price even if there is disturbance
in his possession or ownership of the thing sold:

(a) if the vendor gives security for the return of the price in a proper case;
(b) if it has been stipulated that notwithstanding any such contingency, the vendee must make
payment (see Art. 1548, par. 3.);
(c) if the vendor has caused the disturbance or danger to cease
(d) if the disturbance is a mere act of trespass; and
(e) if the vendee has fully paid the price.

ART. 1591. Should the vendor have reasonable grounds to fear the loss of immovable
property sold and its price, he may immediately sue for the rescission of the sale.
Should such ground not exist, the provisions of article 1191 shall be observed.