Jhaysylyne P.

Estima
BSA 2 RFBT 3

Explain the ff. Articles and present a certain scenario

1. Art. 1458. By the contract of sale, one of the contracting parties obliges himself
to transfer the ownership and to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent. A contract of sale is maybe
absolute or conditional.
Article 1458 of the New Civil Code states that a contract of sale is a contract where
one party obligates himself to deliver a determinate thing to another party, who in turn,
obligates himself to the other to pay a sum of money or its equivalent. In simpler terms, a
contract of sale is the delivery of the goods to be sold and the payment for the goods to
be delivered. For example, Jhas asked Lyn to deliver her 10 sacks of rice for her business.
They came to an agreement that Jhas will pay 10,000 Pesos for the 10 sacks of rice to
be delivered by Lyn on November 1, 2022. Lyn agreed with the terms and is ready to
deliver the goods. So, is there a contract of sale there? There is. The three requisites or
elements of a contract of sale were met. There is consent which is the meeting of the
offer and the acceptance of the things and the cause. In addition, the object is present
and was specified, that is, 10 sacks of rice. Furthermore, the price was agreed upon which
is 10,000 Pesos.
Under Article 1458, a contract of sale may be absolute or conditional. An absolute
contract of sale constitutes no condition or is not subject to any condition or does not
require any condition for the transfer of ownership while a conditional contract of sale
requires certain conditions attached to the contract. A conditional contract of sale follows
then that the delivery of the determinate thing does not necessarily transfer ownership
unless contingency or condition is met. In the above example, suppose that Lyn and Jhas
agreed with no stipulation about the transfer of ownership, it means that both parties have
satisfied the conditions of the contract of sale and a transfer certificate will be issued from
the seller to the buyer since the absolute sale is free and clear of all title defects, liabilities,
obligations, liens, encumbrances charges and any claims. But what if Lyn stated in the
contract that the ownership shall not be transferred until Jhas pays in full the price of the
10 sacks of rice? So, Jhas needs to pay first in full the 10,000 pesos to Lyn before having
ownership of the 10 sacks of rice. For a more direct example, let's suppose that Jhas
entered into an installment plan with Lyn for a Tractor. The contract stated that 2,000 per
month should be paid within 2 years. Therefore, before Jhas can have full ownership of
the tractor, she first must pay the price within 2 years. Suppose that Jhas failed to pay the
full price within 2 years, can Lyn repossess the Tractor? Yes, because the seller has the
right to do so since the buyer failed the full payment of the tractor within the agreed time
limit. In simpler terms, until the condition is met, the ownership will be achieved.
2. Art. 1473. The fixing of the price can never be left to the discretion of one of the
contracting parties. However, if the price fixed by one of the parties is accepted by
the other, the sale is perfected.
Article 1473 stated the fixing of price by one of the contracting parties is not allowed
for the reason that the other could not have consented to the price, for he did not know
what it was. If consent is essential to a contract of sale, the determination of the price
cannot be left to the discretion of one of the contracting parties. The validity or compliance
of the contract cannot be made to depend upon the will of one party. The price must be
determined by both parties or left to the judgment of a specified person or persons
however, where the price fixed by one party is accepted by the other, the contract is
deemed perfected because in this case, there exists a true meeting of minds upon the
price.
For example, Jhas and Lyn entered into a contract for the sale of a carabao. The
carabao which is three years old and a male shall be delivered to Jhas’s home located at
Bonfal West, Bayombong, Nueva Viscaya at exactly 3 pm on November 1, 2022. Lyn, the
owner of the carabao to be sold, didn't discuss with Jhas the price of the Carabao because
of an emergency. He then delivered the carabao and stated that the price is 100,000.
Jhas, who is uninformed was shocked by the price. He was not informed and there was
no negotiation. In reference to Article 1473, it is prohibited that the price will be fixed by
one party, which in this case, the seller. Article 1474 will explain how to solve this problem
or what will be the ways how to settle this.

3. Art. 1480. Any injury to or benefit from the thing sold, after the contract has been
perfected, from the moment of perfection of the contract to the time of delivery,
shall be governed by Articles 1163 to 1165, and 1262.
This rule shall apply to the sale of fungible things, made independently
and for a single price, or without consideration of their weight, number, or measure.
Should fungible things be sold for a fixed price according to weight,
number, or measure, the risk shall not be imputed to the vendee until they have
been weighed, counted, or measured and delivered unless the latter has incurred
in delay.
Article 1480 stated that the thing sold after and at the moment of perfection shall
be governed by article 1163 which is the obligation of diligence or due diligence on or
upon the delivery of the things sold. This article obliges the debtor to take care of the
goods with the proper diligence of a good father of the family unless the law or stipulation
requires another standard of care. Article 1164 stated also that the creditor or the buyer
has the right to the fruits of the thing from the time the obligation to deliver arises. For
example, the carabao to be delivered by Lyn on November 1, 2022, unexpectedly has a
baby in his belly. Jhas has the right to the carabao's baby upon the perfection of the
contract with Lyn. Article 1165 stated further that the creditor has the right to compel the
debtor to deliver a determinate or specific thing. In addition, in case of loss of a generic
or indeterminate thing, the creditor may ask for compliance with the obligation at the
expense of the debtor. Lastly, article 1262 stated that in case of loss of a determinate
thing, the obligation should be extinguished if the fault is not on the debtor and before he
incurred delay. However, if the obligor is at fault for the loss, he/she shall bear the
damages and the obligation will not be extinguished.
The articles discussed above shall be applied to fungible things which are goods
that are interchangeable with one another; goods that, by nature or trade usage, are the
equivalent of any other like units, such as coffee or grains. If the fungible thing or the
object is lost before perfection, the seller bears the loss. For example, Lyn and Jhas
entered into a contract for the sale of 10 sacks of Sinandomeng Rice. There is already a
meeting of minds and the object or subject matter. Before they could even decide on the
price, the sinandomeng rice was lost. Who bears the loss? It’s the seller of course. In
another case, if the object is lost after delivery to the buyer, the buyer bears the loss. In
the recent example, if the Sinandomeng Rice was lost after the delivery of Lyn to Jhas,
then Jhas has to bear the loss. In addition, if the object is lost after perfection but before
delivery, the buyer bears the loss. This is an exception to the principle of res perit domino.
Res perit domino means the thing or property is lost to the owner. This phrase is used to
express that when a thing is lost or destroyed, it is lost to the person who was the owner
of it at the time. In our previous example, let’s suppose that Lyn and Jhas perfected the
contract. Before the delivery of the Sinandomeng Rice, it was lost. Who bears the loss?
It is the buyer because the ownership at that time since the contract is perfected was
Jhas. Therefore, even if the thing is lost, the buyer must bear the loss.

4. Art. 1482. Whenever earnest money is given in a contract of sale, it shall be

considered as part of the price and as proof of the perfection of the contract.
In a contract, there are instances that a written contract is not enough to determine
one's sincerity in fulfilling what has been agreed on. That is when earnest money or
"arras" enters. Earnest money is a deposit paid (often in escrow) by a prospective buyer
(esp. of real estate) to show good-faith intention to complete the transaction and ordinarily
forfeited if the buyer defaults. The main purpose of earnest money is to bind the bargain.
It is also considered part of the purchase price and will be deducted from the total price.
Once the earnest money is given to the seller, it will perfect the contract of sale. Payment
will only be considered earnest money if it constitutes part of the purchase price. The
money will be refunded if the sale did not push through.
Here is a scenario. On October 22, 2022, Jhas, the owner of a 2,000-square-meter
lot at Lamut, Ifugao intended to sell her lot. Upon knowing this, Lyn talked to Jhas that
she will buy the lot for 1,500 pesos per square meter. Lyn then gave Jhas 150,000 pesos
as partial payment. In return, Jhas gave Lyn the corresponding receipt stating that Lyn
promised to pay the balance of the purchase price on or before December 29, 2023, is
there a perfection of the contract? Yes. Let us suppose that Lyn told Jhas that he will pay
the balance on June 20, 2023, but then on July 26, 2022, Jhas suddenly forfeited the
contract stating that her husband doesn’t want to sell the lot for personal purposes and is
willing to deposit the 150,000 on Lyn’s account. Is the contract a contract of sale or a
contract to sell? Can Lyn demand a specific performance against Jhas? No. It is because
the contract is a contract to sell. Jhas stated that Lyn must pay the remaining balance yet,
so it means, the Receipt of Partial Payment is a contract to sell. It is like a conditional
contract that ownership can be transferred only when the condition is met. Therefore, Lyn
cannot demand Jhas to execute the contract or release a deed of sale even if Lyn is
willing to pay the balance.
5. Art. 1502. When goods are delivered to the buyer “on sale or return” to give the
buyer an option to return the goods instead of paying the price, the ownership
passes to the buyer on delivery, but he may revest the ownership in the seller by
returning or tendering the goods within the time fixed in the contract, or, if no time
has been fixed, within a reasonable time.
When goods are delivered to the buyer on approval or trial or satisfaction,
or other similar terms, the ownership therein passes to the buyer:
1. When he signifies his approval or acceptance to the seller or does any act
adopting the transaction;
2. If he does not signify his approval or acceptance to the seller, but retains
the goods without giving notice of rejection, then if a time has been fixed for the
return of the goods, on the expiration of such time, and, if no time has been fixed,
on the expiration of a reasonable time. What is a reasonable time is a question of
fact.
In a sale or return, the ownership passes to the buyer on delivery. The subsequent
return of goods reverts ownership to the seller. Delivery or tradition as a mode of acquiring
ownership must be in consequence of a contract such as a sale. Therefore, when a good
is delivered to the buyer, and there is a stipulation or agreement that there the goods can
be returned on a fixed term, and the buyer decides to return the goods, he/she can do so.
In addition, a sale or return is subject to a resolutory condition which means, upon
fulfillment of the condition, the obligation comes to an end. It has no retroactive effect
unless the parties otherwise agree. Furthermore, the sale or return of the goods depends
entirely on the will of the buyer. However, the risk of loss rests upon the buyer. For
example, Jhas entered into a written contract with Faith Builders for the purchase and
delivery of construction supplies for the construction of her house. Faith Builders delivered
the goods with a sale receipt only. When Jhas and his workers checked the goods, they
found out that the goods are defective. They talked with Faith Builders for a return, but
Faith Builders refused. Can Jhas complain and insist on recovering her money? No,
because no stipulation or condition stated the right of Jhas to return goods. Take note
that if the purchaser desired to incorporate a stipulation securing him the right of return,
he should have done so at the time the contract was made. Furthermore, parol or extrinsic
testimony could not be admitted for the purpose of showing that an invoice or bill of sale
that was complete in every aspect and purporting to embody a sale without condition or
restriction constituted a contract of sale or return. Suppose that there is an agreement
that Jhas can return the goods, that is the time she can revert the ownership of the
construction supplies to faith Builders.
In a sale of approval or trial, there is no transfer of ownership notwithstanding the
delivery of the goods. It means that, in reference to the above example, if Faith Builders
delivers the construction supplies to Jhas on a sale on trial, the ownership won’t be
transferred to Jhas. Ownership passes to the buyer only in the following instances: (1)
when the buyer signifies approval or acceptance to the seller or does any other act
adopting the transaction. For example, Jhas and Faith Builders entered into a contract of
sale on trial or approval. They agreed that Faith Builders will deliver 10 bags of cement.
Afterward, Faith Builders delivered to Jhas the 10 bags of cement. In this case, there is
yet no transfer of ownership because there is no acceptance as such. Later, Jhas used
the 10 bags of cement from Faith Builders for the construction of her pavement. Is there
a transfer of ownership? Yes, because Jhas did an act adopting the transaction by using
the cement. (2) If the buyer does not signify his approval or acceptance to the seller, but
retains the goods without giving notice of rejection, then if a time has been fixed for the
return of the goods, on the expiration of such time, and, if no time has been fixed, on the
expiration of a reasonable time. What is a reasonable time is a question of fact. For
example, Jhas and Faith Builders entered into a contract of sale for 10 bags of cement
on October 20, 2022. In the stipulation indicated in the contract, Jhas is given until
November 30, 2022, to decide whether to accept or reject the 10 bags of cement. In case
she rejects it, she shall return the 10 bags of cement no later than November 30, 2022. If
the fixed term expires and there is no return of 10 bags of cement, that means that Jhas
has accepted the object and there is a transfer of ownership. In case there is no time
stipulated in the contract, Jhas shall return the 10 bags of cement within a reasonable
time; otherwise, there is a transfer of ownership upon the expiration of the reasonable
time. What is a reasonable time is a question of fact.