CIVIL LAW REVIEW

Quiz #5
4C

1. A contract of sale is consensual, bilateral, onerous, nominate, principal, preparatory, and

commutative. FALSE. It is not preparatory. Characteristics if a contract of sale :
nominate, principal, consensual, reciprocal, onerous, and commutative.

2. When the consideration is partly in money and partly in kind, the contract is one of sale if the
parties intended it to be a sale even if the thing given as part of the consideration is greater in
value than the money given.
TRUE. Article 1468.

3. A bilateral promise to sell is binding as an executory agreement of sale.

TRUE

4. A unilateral promise to sell is binding as a contract of sale if a separate consideration

independent of the price is given.
FALSE. Basis: Second paragraph of Article 1479 states that an accepted unilateral
promise to buy or to sell a determinate thing for a price certain is binding upon the
promisor if the promise is supported by a consideration distinct from the price.

5. A conditional contract of sale may be an executed contract or an executory contract.

True? In a conditional sale, the sale is subject to certain conditions and the delivery does
not transfer ownership until the condition is fulfilled. An executed contract refers to a
contract that has been fully performed by both parties. While an executory contract is one
in which the conditions of the contract are not fully performed. So a conditional contract
of sale may be an executed contract when all the conditions have been fulfilled by the
parties, or it may also be executory when the conditions of the contract are not fully
performed yet. (Hindi ko sure to sorry)

6. Things under resolutory condition of destruction may be objects of a valid sale.

TRUE. Art. 1465 provides that things subject to a resolutory condition may be the object
of the contract of sale. I'm not sure kung ano meaning ng “resolutory condition of
destruction”

7. Sale of a losing lotto ticket for a past draw date is necessarily void because the hope of
winning is vain. FALSE

8. Sale of inheritance before partition is void because the heir could not pre-determine what he
will receive after the partition proceedings.
FALSE. In the case of Carvajal v. CA, the SC upheld the validity of the sale. However, the
interests acquired by buyers are limited only to parts that may be ultimately assigned to
the heirs upon partition of the estate. Correlate it to rules on co-ownership where a co-
owner may dispose of his undivided share.

9. Subsequent acquisition of a title by a vendor without title validates the sale even if the
acquisition depends on contingency.
TRUE.(*Not Sure) Subsequent acquisition of title by a vendor without title validates the
sale.
Explanation: Seller must be the owner of the thing rationale: one can sell only what he
owns nemodat quad non habet nobody can dispose of that which does not belong to him
only at a time of consummation since tradition transfers ownership but to have a
perfected contract of sale, vendor need not be owner of thing; can be validated/ratified by
subsequent acquisition of title by seller reason: since future goods or goods whose
acquisition by the seller depends upon a contingency may be the subject matter of sale, it
would be inconsistent to require that it must be owned at the time of sale (not possible to
own a thing or right not in existence)

10. If a third party tasked to give the price of the sale refuses to fix the price, the court may fix
the price. -FALSE. Art. 1469. (2nd and 3rd Par.) Should such person or persons be unable
or unwilling to fix it (price), the contract shall be inefficacious, unless the parties
subsequently agree upon the price. If the third person or persons acted in bad faith or by
mistake, the courts may fix the price.

11. If the price is simulated, the sale shall be considered a donation.

FALSE. Art. 1471. If the price is simulated, the sale is void, but the act may be shown to
have been in reality a donation, or some other act or contract.

12.The sale may be rescinded if the inadequacy of the price results in lesion by more than ¼ of
the value of the thing sold by the owner.
FALSE. Art 1381 contemplates contracts of sale entered into by a guardian (property of
his ward) or a representative of an absentee, and not the owner himself.

13 by agreement, an option money may be considered part of the purchase price should the
buyer exercise the option to buy.
TRUE. (De Leon, page 122)

14. A verbal sale of a parcel of land by an agent is valid provided that his authority to sell is in
writing. - TRUE. (Paras, page 35)

15. A contract of sale is perfected where the acceptance was made if different from the place of
offer. –FALSE, must be at the place of offer

16. A deterioration of the thing sold at the time of perfection may render the contract
inoperative.
TRUE
17. If the loss of the thing sold at the time of perfection was by fault of the seller, the sale shall
still be valid.
FALSE

18. If the loss of the thing sold at the time of perfection is by a fortuitous event, the risk is on
the buyer if the sale is conditional.
FALSE. The risk is on the seller.

19. The expenses of execution and registration of the sale are borne by the seller.
TRUE. Article 1487.

20. Before the fall of the hammer in an auction sale, bidder may retract his bid but the
auctioneer could not withdraw the goods from the sale.
FALSE. The auctioneer may withdraw the goods before the fall of the hammer in an
auction sale if the sale is with reserve.

21. In a sale of a car, vendor can cancel the sale if the vendee fails to pay the 1st installment.
FALSE. Under Article 1484 (Recto Law), the option to cancel the sale is available only if
the vendee fails to pay 2 or more installments.

22. A legally separated husband may sell a car to his wife.

TRUE. (One of the effects of LS is the dissolution of conjugal partnership [CP]. Once the
CP ends, separation of property system will prevail, and here the sale can be validly done.
Paras 2008 p. 94)
23. A sale between persons in trust relations is necessarily void.
FALSE. (Voidable only. Paras 2008 p. 102, De Leon 2005 p. 48)

24-26: Enumerate three obligations of the seller:

24. To transfer ownership
25. To deliver the thing
26. To warrant the object sold against eviction and hidden defects (De Leon p. 55, Paras p.
106)

27. Delivery by the seller’s retention of the thing he is possessing by another right subordinate
to the buyer is known as Traditio Constitutum possessorium.

28. When the seller is not the owner, the buyer who purchased the property in a fair has no
better right than that of the seller.
FALSE. Art 1505.

Two ways of negotiating a negotiable document of title to goods:

29. Indorsement and delivery
30. Delivery
31. A negotiable document of title to goods indorsed in blank may be subsequently indorsed to
a specified person but could not thereafter be indorsed in blank.
FALSE. Art. 1509

32. Where a negotiable document of title was transferred for value by mere delivery instead of
the required indorsement, the transferee may compel the transferor to indorse the document
TRUE. Basis: Art. 1515 NCC (Rule if Indorsement is Needed for Negotiation) Where a
negotiable document of title is transferred for value by delivery, and the indorsement of
the transferor is essential for negotiation, the transferee acquires a right against the
transferor to compel him to indorse the document unless a contrary intention appears.

33. The validity of negotiation is not affected by the fact that the owner of the document was
deprived thereof by theft even if the holder had notice, prior to negotiation, of the unlawful
deprivation. Ans: FALSE. Basis: Art. 1518 NCC (Effect if Owner Was Deprived of It) Art.
1518 only applies if the person to whom the document was negotiated or a person to whom
the document was subsequently negotiated paid value therefor in GOOD FAITH, without
notice of the unlawful deprivation.

34. The transferee of a non negotiable document of title to goods may hold the bailee liable for
the possession of the goods provided he notifies the bailee before the latter was notified by the
transferor of a subsequent sale of the goods.
TRUE. Basis: Art. 1514 NCC (Rights of Mere Transferee) The transferee does not acquire
directly the obligation of the bailee to hold for him tje goods. To acquire the direct
obligation of the bailee, the transferee must NOTIFY the bailee.

35. In the absence of a stipulation, the goods sold must be delivered at any time.
FALSE. Basis: Art. 1521 (Time of Delivery) Delivery (if to be made by the seller) must be
within a REASONABLE TIME, in the absence of express agreement.

36. If by agreement the seller is required to send the goods to the buyer, delivery to the carrier is
deemed delivery to the buyer if by the bill of lading, the goods are deliverable to the order of
the buyer, whether or not the seller retains possession of the bill of lading.
FALSE. Basis: Art. 1523 NCC in rel. to Art. 1503 NCC Gen. Rule: Delivery to carrier is
delivery to buyer, if it is the duty of the seller to send the goods to buyer. Exception: In the
cases provided for in Art. 1503, first, second and third paragraphs. In 1503 (Instances
When Seller is Still Owner Despite Delivery) When the buyer although the goods are
deliverable to order of buyer, and although the bill of lading is given to him, does not
honor the bill of exchange sent along with it.

37. A seller who was conditionally paid with the buyer’s personal check can have the rights of
an unpaid seller of goods if the check is dishonoured.
TRUE. “Art. 1525 (2) The seller of goods is deemed to be an unpaid seller xxx (2) When a
bill of exchange or other negotiable instrument has been received as conditional payment,
and the condition on which it was received has been broken by reason of the dishonor of
the instrument, the insolvency of the buyer, or otherwise. xxx”

38. An unpaid seller of goods has the right to retain the goods even if the same were already
delivered to the carrier.
FALSE. He only has the right to retain the goods while he is in possession of them. “Art.
1526. xxx notwithstanding that the ownership in the goods may have passed to the buyer,
the unpaid seller of goods, as such, has: (1) A lien on the goods or right to retain them for
the price while he is in possession of them; xxx” Take note of the difference between the
right to retain & right of stoppage

39. The unpaid seller has a lien on the goods when the buyer becomes insolvent provided that
the seller is still in possession of the goods.
TRUE. “Art. 1527. xxx the unpaid seller of goods who is in possession of them is entitled to
retain possession of them until payment or tender of the price in the following cases,
namely: xxx (3) Where the buyer becomes insolvent. xxx”

40. Exceptionally, the seller may exercise the right of stoppage in transit even if the buyer
already accepted delivery.
FALSE, no exception

41. If the carrier wrongfully withholds possession from the buyer, the seller can still exercise
the right of stoppage.
FALSE. In such case, the goods are no longer in transit and the carrier is not allowed to
enlarge the seller’s right by refusing to deliver. An unpaid seller only has a right of
stopping the goods in transitu. “Art. 1531. Par. 2 Goods are no longer in transit within the
meaning of the preceding article: xxx (3) If the carrier or other bailee wrongfully refuses
to deliver the goods to the buyer or his agent in that behalf. xxx”

42. The right of stoppage in transit may be exercised by obtaining actual possession of the
goods from the carrier.
TRUE (Article 1532, Par. 1)

43. The unpaid seller may resell the goods without notice to the buyer if the latter has been in
default in the payment of the purchase price for an unreasonable time.
FALSE. The unpaid seller must also have a right of lien or has stopped the goods in
transit before he may resell the goods. (Art. 1533)

44. The unpaid seller may rescind the sale where the buyer fails to pay the price after a year
from the delivery.
FALSE. There must be notice or some overt act of intention to rescind before the unpaid
seller may rescind. (Article 1534, Par. 2)
45. The unpaid seller’s right of stoppage in transit is not affected by a subsequent disposition of
the goods by the original buyer except where the disposition was with the consent of the seller.
TRUE. (Article 1535)

46. The buyer was in need of a 1000 square meter of land required by a franchisor for the
opening of a business. He purchased a 1000 square meter property from the seller at a price of
100,000 per square meter. Thereafter, he discovered that the total area of the land delivered to
him was only 975 square meter. The buyer can opt to rescind the sale.
TRUE. (Article 1539, last par.)

47. If on the other hand (in 46) the land has an area of 1,100 square meters, the buyer has no
other option but to return the excess area.
FALSE, he may still accept the whole and pay the contract price. (Art. 1540)

48. If a parcel of land believed to be 1,000 square meters was sold at a lump sum of P1,000,000,
the buyer should pay more if the land turns out to be 1,025 square meters to avoid unjust
enrichment.
FALSE, there is no adjustment of price in case of lump sum sales. (Art. 1542)

49. As a rule the buyer of goods is not bound to accept delivery by instalment.
TRUE. (Art. 1583)

50. In cash sale the seller is excused from making delivery if no payment is tendered by the
buyer unless a period for payment is fixed.
TRUE. (Art. 1524)

51. The rules on double sale will apply to a sale made by the principal and another sale made by
the agent to different buyers.
TRUE. (Requisites for double sale: xxx 3. Bought from the same or immediate seller)

52. A previous buyer who was informed of a subsequent sale in favor of another buyer rushed
to the Register of Deeds to register the sale in his name. Who has the better right to the land
sold if the subsequent buyer was first in possession of the same?
FIRST BUYER. Knowledge gained by the first buyer of the second sale cannot defeat the
first buyer's right EXCEPT when the second buyer registers in good faith the second sale
ahead of the first. Thus, the first buyer will not lose priority if he registers the first sale
ahead of the secobd sale with the first buyer knowing the existence of the second sale.
(Uraca v. CA; Gabriel v. Sps. Madamba)

53. The warranty against eviction may be validly waived by the buyer with knowledge of the
risk.
TRUE. But it must be accompanied by some circumstance, which reveals the vendee's
knowledge of the risks of eviction and his intention to submit to such consequences. (El
Banco Nacional Filipino v. Silo)
54. In case of breach of the warranty against eviction, the buyer may also demand ornamental
expenses even if the sale was made in good faith.
FALSE

54(b) the warranty against hidden encumbrances may still apply even if the encumbrance is
recorded.
TRUE. Generally, warranty is not applicable if the non-apparent burden or servitude is
recorded in RoD, EXCEPT when there is an express warranty that the thing is free from
all burdens and encumbrances.

55-56. Give two remedies of the buyer in case of breach of the warranty against hidden
encumbrances. ART. 1567:
55. accion redhibitoria - the buyer withdraws from the contract;
56. accion quanti minoris - proportionate reduction of the price, with damages.

57-63 Give the requisites of warranty against redhibitory vices. (According to De Leon page
337)
57. The defect must be serious or important
58. It must be hidden
59. It must exist at the time of the sale
60. The vendee must give notice of the defect to the vendor within reasonable time (Article
1580 and 1586) Art. 1580. In the sale of animals with redhibitory defects, the vendee shall
also enjoy the right mentioned in article 1567; but he must make use thereof within the
same period which has been fixed for the exercise of the redhibitory action. 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.
61. The action for rescission or reduction of the price must be brought within the proper
period – 6 months from delivery of the thing sold(Article 1571) or within 40 days from the
date of delivery in case of animals (Article 1577 par. 1) Art. 1571. Actions arising from the
provisions of the preceding ten articles shall be barred after six months, from the delivery
of the thing sold. Art. 1577. The redhibitory action, based on the faults or defects of
animals, must be brought within forty days from the date of their delivery to the vendee.
This action can only be exercised with respect to faults and defects which are determined
by law or by local customs.
62. There must be no waiver of warranty on the part of the vendee (Article 1548 par. 3)
Art. 1548. Eviction shall take place whenever by a final judgment based on a right prior to
the sale or an act imputable to the vendor, the vendee is deprived of the whole or of a part
of the thing purchased. The vendor shall answer for the eviction even though nothing has
been said in the contract on the subject. The contracting parties, however, may increase,
diminish, or suppress this legal obligation of the vendor.
63. The vendee has no knowledge of the defect in the thing he buys or lack of title of the
vendor because by then, he is deemed to have willfully and voluntarily assumed the risk
attendant to the sale. (Martinez v. CA) - **wild guess, just added this based on p. 347 of
De Leon

64. If an animal sold was classified as condemned, there is no warranty against hidden vices
provided that the animal was examined by an expert.
FALSE. Sale of animals as condemned precludes all idea of warranty against hidden
defects. Such animals are bought not because of their quality or capacity for work; and
such fact is assumed to be known by the buyer. Article 1574. There is no warranty against
hidden defects of animals sold at fairs or at public auctions, or of livestock sold as
condemned. Art. 1576. If the hidden defect of animals, even in case a professional
inspection has been made, should be of such a nature that expert knowledge is not
sufficient to discover it, the defect shall be considered as redhibitory. But if the
veterinarian, through ignorance or bad faith should fail to discover or disclose it, he shall
be liable for damages

65. The disease is presumed covered by the warranty if it causes death after 7 days from
purchase. FALSE. If the animal should die within three days after its purchase, the vendor
shall be liable if the disease which cause the death existed at the time of the contract (Art.
1578, NCC).

66.-67. When may a buyer suspend payment?

66. Should the vendee be disturbed in possession or ownership of the thing acquired;
67. Should the vendee have reasonable grounds to fear such disturbance, by a vindicatory
action or a foreclosure of mortgage (Art. 1590, NCC).

68.-71. Give the legal guarantees of the seller for the payment of the price by the buyer:
68. A lien on the goods or right to retain them for the price while he is in possession of
them;
69. In case of the insolvency of the buyer, a right of stopping the goods in transitu after he
has parted with the possession of them;
70. A right of resale;
71. A right to rescind the sale (Art. 1526).

72-75. Give some causes for the extinguishment of sale.

Art. 1600. Sales are extinguished by:
72. the same causes as all other obligations
73. conventional obligation
74. legal redemption
75. fortuitous events
76-77. What is meant by "conventional redemption?"
This is called Sale Con Pacto De Retro. By express agreement, the seller is given the right
to repurchase the thing sold. (page 581, Aquino reviewer)

78-81 Nature of conventional redemption

1. It is purely contractual because it is created by virtue of a contract
2. It is an accidental stipulation
3. It is a real right when registered because it binds third persons
4. It is a resolutory condition because when exercised, the right of ownership acquired
by the vendee is extinguished
5. It is potestative becase it depends on the will of the vendor

82-85 Instances when sale with a right to repurchase shall be presumed to be an equitable
mortgage:
1. When the price of the sale with a right to repurchase is unusually inadequate
2. When the vendor remains in possession as lessee or otherwise
3. When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed
4. When the purchaser retains for himself a part of the purchase price
5. When the vendor binds himself to pay the taxes on the thing sold
6. In any other case where it may be fairly inferred that the real intention of the parties
is that the transaction shall secure the payment of a debt or the performance of any
other obligation

86-88. Who may exercise the right of redemption

(assumed: legal redemption)
86. A co-owner in case the other co-owner sold his share to a stranger
87. The debtor in case a credit or other incorporeal right in litigation is sold or assigned
88. A co-heir in case the other heir sold his hereditary rights to a stranger before partition
of the estate

89. A vendee a retro has a right to be subrogated to the vendor's rights and obligations?
TRUE. Ownership is immediately transferred to vendee a retro upon perfection of sale
with pacto de retro which means the vendee a retro acquires all the rights and obligations
of vendor a retro except the latter's right of redemption over the property. OR
FALSE. Not all rights and obligations are transferred to the vendee a retro upon the
perfection of a sale with pacto de retro, the right of redemption remains with the vendor a
retro for a specific period of time.

90-93. What are the requisites of Legal Redemption by co-owners?

(i) the sale must be Before partition
(ii) the vendee must be Reimbursed for the price of the sale
(iii) there must be Alienation of all or any of the shares of the co-owners
(iv) there must be subsisting Co-ownership
(v) the right must be Exercised withing the period provided in Art. 1623 of the NCC
(within 30days from notice)
(vi) the sale must be made to a Stranger.
(Mnemonics: BRACES. Memaid p.362) (tayo na lang bahala magpaikli to fit 3 numbers
grin emoticon )

94. A valid assignment of credit transfers title to the assigned credit to the assignee, even if the
debtor is unaware thereof.
TRUE

95. The assignor in good faith answers for the solvency of the debtor unless the insolvency of
the debtor was prior to the sale and of common knowledge.
FALSE. Art. 1628. The vendor in good faith shall be responsible x x x; but NOT for the
solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency
was prior to the sale and of common knowledge.

96-100. Give some instances of legal redemption

Under NCC
1. Sale of a co-owner of his share to a stranger (art. 1620)
2. Sale of adjacent rural lands not exceeding one hectare (art. 1621)
3. Sale of adjacent small urban lands bought merely for speculation (art. 1622)
4. When a credit or other incorporeal right in litigation is sold (art. 1634)
5. Sale of an heir of his hereditary rights to a stranger (art 1088)
Under special laws
1. Equity of redemption in cases of judicial foreclosures
2. Right of redemption in cases of extrajudicial foreclosures
3. Redemption of homesteads ( public land act, sec 119)
4. Redemption in taxes sales(NIRC, sec. 214)
5. Redemption by an agricultural tenant of land sold by the landowner ( Agrarian
Reform Code, sec 12.)
6. Redemption in foreclosurr by rural banks ( RA 720)

101. A contract of lease is consensual, nominate, bilateral, onerous, and commutative although
exceptionally, it could be gratuitous.
FALSE. There must always be rent or price certain . It is the cause of the contract of
lease.