Article 1561

Redhibition is the avoidance of a sale on account of some vice or defect in the thing sold. Yung
thing na nasold is impossible to use or inconvenient and imperfect that kung nalaman ni buyer ng
mas maaga ay hindi na niya bibilhan.

Redhibitory action - is an action instituted to avoid a sale on account of some vice or defect in
the thing sold which renders its use impossible, or so inconvenient and imperfect that it must be
supposed that the buyer would not have purchased it had he known of the vice. The object is
recission of the contract or accion quanti or estimatoris.

Redhibitory vice or defect - is a defect in the article sold against which defect the seller is bound
to warrant. The vice or defect must constitute an imperfection, a defect in its nature, of certain
importance; and a minor defect does not give rise to redhibition.

Requisites for warranty against hidden defects.

(1) The defect must be important or serious; hindi mo magagamit sa gustomong gamitin.
Babaratin niya na sana or hindi na lang binili.
(2) It must be hidden/latent; hindi dapat visible, hindi magiging liable si seller kahit hidden kapag
expert si vendee who, by reason of his trade or profession, should have known it.
* hidden to the eyes and cannot be discovered by ordinarily careful inspection or examination.
(3) It must exist at the time of the sale;
(4) The vendee must give notice of the defect to the vendor within a reasonable time
(5) The action for rescission or reduction of the price must be brought within the proper period —
6 months from the delivery of the thing sold. or within 40 days from the date of the delivery in case
of animals.

Where defect patent or made known.

(1) A warranty, in general terms, does not cover defects which the buyer must have observed.
(2) The same rule is applicable to a defect which is not obvious but of which the seller tells the
buyer, or which the buyer knows or should have known
(3) As a general rule, there is no implied warranty against hidden defects in the sale of second-
hand goods. Exception is when the seller has been shown to have made misinterpretation or
acted in bad faith.
(4) The seller may bind himself against patent or obvious defects (manifest upon casual
inspection) if the intent to do so is clearly evident.

Article 1562
Implied warranties of quality. Quality of goods, state or condition. Dapat may warranty sa
quality. Honest dealing ni seller.
1. implied warranty of fitness There is no implied warranty as to the quality or fitness for
any particular purpose of goods under a contract of sale.
Excpt: (a) Particular purpose of goods – expressly or by implications manifest to the seller the
particular purpose for which goods are required. (b) the buyer relies upon the seller’s skill or
judgment.
2. Implied warranty of merchantability
Where goods are bought by description, the seller impliedly warrants that the goods are
of merchantable quality.
Merchantability fitness to its purpose for normal usage according with any statements or
promises made on the packaging or label - Not a warranty to quality.

(a) Causes of unmerchantability - Goods may be unmerchantable not because of any defect in
their physical condition but because of some other circumstances. their infringement of
trademarks of others renders them unsalable. Other goods than food may be unmerchantable
because the use of them is dangerous or injurious in ways not to be expected from the goods of
the kind.
(b) Saleability in a particular market. Dapat general market, dahil ayun ang winawarrant nila.
(c) Applicability to goods in that description. — It must be made clear that the warranty that
the goods are of merchantable quality applies to all goods bought from a seller who deals in goods
in that description, whether they are sold under a patent or trade name or otherwise.

Article 1563
Rules regarding sale under a patent or trade name.
(1) By exactly defining what he wants, the buyer has exercised his own judgment instead of relying
upon that of the seller. By means of giving a trade name. Description must be the buyer’s choice.
It precludes warranty.
(2) Excpt. If the buyer relies on the seller’s judgment rather than the patent or trade name. there
is still an implied warranty of fitness for a particular purpose.
(3) The provision does not preclude an implied warranty of merchantability or fitness for a purpose
for which such specified article is ordinarily or generally sold. Kahit na bumili ng may patent or
trade name basta it fits to the general use then there is still an implied warranty of merchantability
or fitness for a purpose.

Article 1564
A warranty as to the quality or fitness for a particular purpose may be attached by usage to a
contract containing no express provision in regard to warranty, though in the absence of usage
no warranty would be implied. Dahil naka sanayan mo ng bumili ng trade or brand nayun, kahit
na walang sinabing there is warranty as to the quality or fitness for a particular purpose
magkakaroon na iyon dahil sa matagal mo naman na kasi itong binibili or ginagamit. But also
remember that A usage in order to bind both parties must be known to both or, if unknown to one,
the other must be justified in assuming knowledge on the part of the person with whom he is
dealing. The presumption is that the parties are aware of the usage of trade.
Article 1565
(1) Where sample not merchantable. — As a general rule, all the buyer is entitled to, in case of
a sale or contract to sell by sample, is that the goods be like the sample, so he has no right to
have the goods merchantable if the sample which he has inspected is not.

(2) Where sample subject to latent defect - Where the defect in the goods is of such a character
that inspection will not reveal it, so in the case of a sale by sample, if the sample is subject to a
latent defect, and the buyer reasonably relies on the seller’s skill or judgment hindi lang entitle si
buyer sa goods like the sample but also a merchantable goods of that kind and character.

Article 1566
Responsibility of vendor for hidden defects.
(1) Effect of ignorance of vendor. — The ignorance of the vendor does not relieve him from
liability to the vendee for any hidden faults or defects in the thing sold. In other words, good faith
cannot be availed of as a defense by the vendor.
(2) Exception. — The parties, however, may provide otherwise in their contract provided the
vendor acted in good faith, that is, he was unaware of the existence of the hidden fault or defect.
By stipulation.
(3) Where vendee aware of the defect. — If the vendee is aware of the defect in the thing he
buys or lack of title in the vendor, he cannot later complain thereof. Willingly and voluntarily
concented to the risk. Doctrines of “caveat venditor” and “caveat emptor.”

● caveat venditor – let the seller beware. Giving the seller the liability even if he’s not aware
that the thing sold is in fault or defect. Kung maniningil ka ng tamang presyo, ibigay mo
yung tamang quality or expected usage of the thing sold.
● caveat emptor – let the buyer beware. the buyer purchases at his own risk in the absence
of an express warranty in the contract.

Article 1567
Accion Redhibitoria – an action to withdraw from the contract with right to damages.
Accion Quanti Minoris or Accion quanti estimatoria – an action to demand proportionate
reduction of the price with right to damages.

Article 1568
(1) Vendor aware of hidden defects. — If the vendor was aware of the hidden defects in
consequence of which the thing sold was lost, he shall bear the loss because he acted in bad
faith. In such case, the vendee has the right to
recover:
(a) the price paid;
(b) the expenses of the contract; and
(c) damages.

(2) Vendor not aware of hidden defects. — If the vendor was not aware of them,
he shall be obliged only to return:
(a) the price paid;
(b) interest thereon; and
(c) expenses of the contract if paid by the vendee. He is not made liable for damages because he
is not guilty of bad faith.

Represents the damage suffered by the vendee and is at the same time the amount with which
the vendor enriched himself at the expense of the vendee.

Article 1570
While in the preceeding articles apply to judicial sales, still no liability for damages will be
assessed against the judgment debtor in view of the compulsory nature of sales. Since involuntary
ang sales, walang pananagutan sa damages si judgment debtor.

Article 1571
Actions arising from the provisions of the preceding ten articles shall be barred after six months,
from the delivery of the thing sold. Prescription of actions in cases of implied/express warranty.

(1) The action for rescission of the contract or reduction of the purchase price outside this period
the action is barred. prescribes six months from the date of delivery of the thing sold

(2) With respect to an express warranty, in accordance with the general rule on rescission of
contract, the prescriptive period which is four (4) years, shall apply unless another period is
specified in the express warranty.

Article 1672
When two or more animals have been sold at the same time and the redhibitory defect is in one,
or some of them but not in all, the general rule is that the redhibition will not affect the others
without it. It is immaterial whether the price has been fixed for a lump sum for all the animals or
for a separate price for each.

Except: The exception is when it can be shown by the vendee that he would not have purchased
the sound ones without those which are defective. Such intention need not be established by the
vendee but shall be presumed when a team, yoke, pair or set is bought unless the vendor proves
the contrary. Pwede irescind ang entire sale

Article 1673
The points considered in the preceding article apply also to sale of two or more things where only
one or more of them but not all have hidden defects.

Article 1674
This article is a limitation to the provisions of Article 1570. It is based on the assumption that the
defects must have been clearly known to the buyer. Sale of animals as condemned precludes all
idea of warranty against hidden defects. (Art. 1561.) Such animals are bought not because of
their quality or capacity for work. Walang warranty ang sale na ito dahil hindi sila binibili for their
quality or capacity to work.

Article 1675
The sale of animals suffering from contagious diseases shall be void and not merely subject to
rescission or reduction of the price. This article contemplates a sale that has been perfected and
consummated.

Article 1676
To be considered redhibitory, the defect must not only be hidden. It must be of such a nature that
expert knowledge is not sufficient to discover it. However, if the veterinarian failed to discover it
through his ignorance, or failed to disclose it to the vendee through bad faith, he shall be liable
for damages. The responsibility is his and not the vendor’s.

Article 1677
The redhibitory action based on the faults of animals shall be barred unless brought within forty
days from the date of their delivery to the vendee. The only considered redhibitory defects in the
sale of animals are only those determined by law or by local customs.

If the defect is patent or obvious is no warranty against. Kahit na may defect yung animal na iyon,
wala siyang warranty kasi patent or obvious naman ‘yon.

Article 1678
If the animal sold is suffering from any disease at the time of the sale, the vendor is liable should
it die of said disease within three days from the date of the sale (not date of delivery).

If the death occurs after three days or the defect is patent or visible, he is not liable.

Article 1679
If the vendee avails himself of the remedies granted by Article 1567, the vendee must return the
animal in the condition in which it was sold and delivered.

In case of injury due to his negligence, the vendee shall be responsible pero hindi iyon magiging
obstacle para hindi matuloy ang pagrerescind sa sale. the buyer may not ask for rescission where
he has created new encumbrances upon the thing sold.

Article 1580
The vendee has the same right to bring at his option, either a redhibitory action or an action quanti
minoris. The action must be brought within forty days from the date of the delivery of the animals
to the vendee.
Article 1581
The special law governing the sale of large cattle is Act No. 4117, now found in Sections 511 to
536 of the Revised Administrative Code, as amended, providing for the registration, branding,
conveyance, and slaughter of large cattle. The sale must appear in a public document.

ARTICLE 1582
Principal Obligations of the Vendee
1. To accept delivery
2. To pay the price of the thing sold

Pertinent rules:
1. Vendor is not required to deliver the thing sold until the price is paid nor the vendee to pay
the price before the thing is delivered in the absence of an agreement to the contrary.
2. If stipulated, vendee is bound to accept delivery and to pay the price at the time and place
designated.
3. No stipulation as to the time and place of delivery, vendee is bound to pay at the time and
place of delivery
4. No stipulation as to the place of delivery, payment must be made wherever the thing might
be at the moment the contract was perfected
5. Only time of delivery is stipulated, vendee is required to pay even before the thing is
delivered to him.

ARTICLE 1583
Rules governing delivery in installments
General Rule: The buyer is not bound to accept delivery of the goods in installments. (Buyer has
no right to pay the price in installments; neither can he be required to make partial payments)

Exception: If there is an agreement — the goods may be deliverable by installments or the price
payable in installments.
Where separate price has been fixed for each installment (Whether the breach is severable or
not depends on each case on the terms of the contract and the circumstances of the case)

1) BREACH AFFECTS WHOLE CONTRACT

 seller makes defective delivered
 or the buyer wrongfully neglects or refuses to accept delivery
 or fails to pay any installment — the party may sue for damages for breach of the entire
contract if the breach is so material as to affect the contract as a whole

2) BREACH IS DIVISIBLE
 Where breach is severable, will give rise to a claim for compensation but not a right to
treat the whole contract as broken
 Where separate price was not fixed for each installment
 1. Seller fails to deliver an installment — buyer to choose between rescission and fulfillment
(damages with either case)
2. Buyer fails to pay the purchase price within the agreed period — SAME AS ABOVE
REMEDY

Note: Rescission not applicable for slight or casual breaches.

ARTICLE 1584
Buyer’s right to examine the goods
Acceptance is assent to become owner of the specific goods when delivery of them is offered to
the buyer.

General Rule: The buyer has the right to examine the goods before accepting them. (Buyer may
reject if the article or commodity does not correspond in kind, quality, condition or amount agreed
upon)

Exception: If there is an agreement to that effect; stipulation that good shall not be delivered until
price is fully paid (such as when goods are marked C.O.D.) — buyer is not entitled to examine
the goods unless there is an agreement or is permitted by usage

Rejection of goods
Upon inspection, the goods are proved to be unsuitable or fail to conform to the contract, buyer
may refuse to accept them
a. Buyer not bound to return to the seller, notice of rejection to the seller is sufficient
b. Option to reject must be exercised, notice of rejection be given to the seller within a
reasonable time or agreed period
c. Receipt of goods constitutes acceptance if the right of rejection is not exercised within a
reasonable time

ARTICLE 1585
What constitutes acceptance?
1. EXPRESS ACCEPTANCE
 Buyer intimates/communicates to the seller of his acceptance — verbal or written

2. IMPLIED ACCEPTANCE
 Buyer does any act in relation to the goods which is inconsistent with the seller’s ownership
as when he sells, attempts to sell, uses, or makes alteration to the goods.
 Buyer retains the goods after the lapse of a reasonable time without communicating his
rejection

Note: Delivery and acceptance are two distinct and separate acts of different
parties.
  Acceptance not a condition to complete delivery — delivery is an act of the vendor; vendee
has nothing to do with the act of delivery by the vendor; acceptance is an obligation on
the part of the vendee.

SELLER MUST COMPLY WITH HIS OBLIGATION TO DELIVER ALTHOUGH THERE IS NO

ACCEPTANCE YET BY THE BUYER.

 Acceptance and actual receipt do not imply the other — acceptance of the buyer may
precede actual delivery; there may be an actual receipt without any acceptance, and there
may be acceptance without receipt.

ARTICLE 1586
General Rule: Seller is not discharged from liability in damages or other remedy for breach of
warranty by the acceptance of the goods.

Exception: If there is an express or implied agreement; if the buyer fails to give notice to the seller
of any breach of warranty within a reasonable time after the buyer knows or ought to know of such
breach.

ARTICLE 1587
Effect when buyer refuses to accept delivery
1. JUSTIFIED REFUSAL (quantity not complete or goods do not conform to the contract)
a. Buyer has no duty to return the goods to the seller unless otherwise agreed (buyer
has obligation to take reasonable care of the goods, but nothing more can be
demanded from him)
b. Title to the goods does not pass on to him
c. Buyer not obliged to pat the price
d. Buyer voluntarily constitutes himself as depositary of the goods, shall be liable as
such (goods remain in the buyer’s possession, but the seller bears the risk of loss)

OBLIGATION OF THE BUYER: Buyer should notify the seller that he refuses to accept the goods
so that he can take action on them.

ARTICLE 1588
2. UNJUSTIFIED REFUSAL
Title to the goods passes to the buyer from the moment the goods are placed at his
disposal (risk of loss is borne by the buyer) except
o When there is a stipulation
o When the seller reserved the ownership of the goods as security for the payment
of the price
Buyer is obliged to pay the price
ARTICLE 1589
Liability of vendee for interest where payment made after delivery
 Article presupposes that delivery of the thing sold and the payment of the price were not
made simultaneously.

Vendee – is liable to pay interest from the delivery of the thing until the payment of the price in
the following cases:
 Interest is stipulated (rate stipulated governs; if none, the legal rate of interest shall be due
 Thing sold and delivered produces fruits or income
 If vendee is guilty of default, from the time of judicial or extrajudicial demand for the
payment of the price

Note: If none of the three cases mentioned above applies, payment of the balance will not obligate
the buyer to pay interest.

ARTICLE 1590
Suspension of payment of the price by the vendee can be made available in two cases only:
1. Disturbance in the possession or ownership of the thing acquired;
2. Reasonable grounds to fear such disturbance by a vindicatory action or foreclosure
mortgage

Suspension of payment not available under the following cases even if there is
disturbance in his possession or ownership of the thing sold:
1. Vendor gives security for the return of the price in a proper case
2. Stipulation that vendee must make payment notwithstanding any such contingency
3. Vendor caused the disturbance or danger to cease
4. Disturbance is a mere act of trespass (Vendor is not liable; vendee has a direct action
against the intruder)
5. Vendee has fully paid the price

ARTICLE 1591
Rescission of Immovable/Real Property
 Refers only to a sale of real property when vendor has good reasons to fear the loss of
the property and its price (a situation when there is delivery of the immovable but vendee
does not yet pay the price) — vendor may immediately sue for rescission of the sale

 If one or both grounds do not exist — vendor is to choose between fulfillment and
rescission

ARTICLE 1592
Automatic rescission of the sale of immovable stipulated
General Rule: Vendor may sue for rescission of the contract should the vendee fail to pay the
agreed price.
Pactum Commissorium (agreement between the vendor and the vendee in the sale of immovable
that rescission of the contract shall of right take place if the vendee fails to pay the price at the
time agreed upon) is not valid.

Vendee may pay even after stipulated period for payment has expired as long as no demand for
rescission has been made upon him either judicially or by notarial act.

Note: After the demand, the court may not grant the vendee a new term.
 Article 1592 not applicable 1) To sales on installments of real property where procedures
to be followed in the event of vendee’s failure to fulfill his obligation has been laid down
by the parties; 2) mere promise to sell where title remains with the vendor until full payment
— under these cases, vendee may no longer pay after expiration of the agreed period
even though no demand has yet been made
 Vendor must make a demand for rescission before he can have the right to rescind the
contract.

ARTICLE 1593
Automatic rescission of the sale of movables stipulated (rescission shall take place in the interest
of the vendor, at his option, if at the time fixed for the delivery of the thing, the vendee
1. Does not appear to receive the thing; or
2. Having appeared, but does not pay the price unless a credit period for its payment has
been stipulated

Reason for the rule: Personal properties are not capable of maintaining a stable price in the
market; so changeable that any delay in their disposal might prejudice the vendor. Real property
has more or less stable price in the market.

ARTICLE 1594
Goods include all chattels personal but not things in action or money of legal tender in the
Philippines; also includes growing fruits or crops.

Actions available
1. SELLER
a. Actions for payment of the price
b. Actions for damages for non-acceptance of the goods
c. Actions for rescission of the contract
2. BUYER
a. For specific performance
b. For rescission or damages for breach of warranty
ARTICLE 1595
3 cases when an action for the price of the goods can be maintained by the seller:
1. Ownership passes to the buyer but wrongfully neglects or refuses to pay
2. Price is payable on a certain day, buyer wrongfully neglects refuses to pay, although
ownership has not passed
3. Goods cannot readily be resold for a reasonable price, provisions of Article 1596 (par. 4)
does not apply — seller may offer to deliver the goods to the buyer, and if the buyer refuses
to receive them, seller may notify the buyer that the goods are held by the seller as bailee
for the buyer; thereafter the SELLER may treat the goods as the buyer’s and maintain
action for the price.

ARTICLE 1596
3 cases to maintain seller’s right of action for damages for non-acceptance
1. Buyer without lawful cause neglects or refuses to accept and pay for the goods
2. Where the ownership of the goods has not passed and the seller cannot maintain an action
for the price
3. Goods not yet identified at the time of the contract or subsequently

Measure of damages for non-acceptance (is the estimated loss directly and naturally resulting in
the ordinary course of events from the buyer’s breach of contract)

1. When there is an available market for the goods in question, measure of damages is the
difference between the contract price and market or current price at the time or times when
the goods ought to have been accepted or if no time was fixed for acceptance, then at the
time of refusal
2. FULL AMOUNT OF DAMAGES if there is no available market for the goods to be sold
3. PROXIMATE DAMAGES under special circumstances which can be greater than (No. 1)
when such damages may be reasonably attributed to the non-performance of the
obligation

In case of repudiation of the contract by the buyer, measure of damages would

include:
a. Labor performed and expenses incurred for materials before receiving notice of
repudiation
b. Profit that could have realized if the sale had been fully performed

ARTICLE 1597
Seller may totally rescind the contract of sale by giving notice of his election to
the buyer:
1. Goods not yet delivered, and the buyer has repudiated the contract of sale; or
2. Has manifested inability to perform his obligations; or
3. Has committed a breach

Note: Seller must give notice of his election to seek rescission.

ARTICLE 1598
Buyer’s right to specific performance
Article only applies where goods to be delivered are specific or ascertained
1. If the seller has broken a contract to deliver specific or ascertained goods, without giving
him the option to retain the goods on payment of damages (damages are imposed to
insure fulfillment, not to substitute for it)

ARTICLE 1599
Buyer’s remedies for breach of warranty by the seller:
1. Accept the goods and set up the seller’s breach to reduce or extinguish the price;
2. Accept the goods and maintain action for damages for breach if warranty;
3. Refuse to accept the goods and maintain action for damages for breach if warranty;
4. Rescind the contract by returning or offering the return of the goods and recover the price

Rescission by the buyer is not allowed

1. Buyer accepted the goods knowing of the breach of warranty without protest
2. Failure to notify the seller of his election to rescind within a reasonable time
3. Failure to return or offer to return the goods in substantially as good condition as they were
in at the time of the transfer of ownership to him

Rights and obligations of buyer in case of rescission

1. Buyer ceases to be liable for the price, should return the goods
2. Recover the price from the seller if he has paid for it
3. Right to hold the goods as bailee, should the seller refuse the return of the goods
4. Right to have a lien on the goods for any portion of the price already paid (lien may be
enforced as if he is an unpaid seller)