Art. 1476.

In the case of a sale by auction:

(1) Where goods are put up for sale by auction in lots, each lot is the subject of a
separate contract of sale.
- So yung lot po na tinutukoy dito sa number 1 is yung property. Kumbaga
eto yung magiging subject natin for sale sa public auction regardless of
its quantity. So pwede siyang jewelries, car, at marami pang iba.
- Sinasabi din sa Article na ito, na each lot is the subject of a separate
contract of sale, So, kahit pa na merong two or more lot which pertains
to one owner. So, meron tayong one seller and yung highest bidder ng
lahat ng lots is isang tao lang din.
- Same seller and same buyer ng ibat ibang lot. Kapag ganito po kase,
syempre magkakaroon tayo ng separate sale.
- For example, si "A" is may dalawa siyang Car na pwede niyang ibenta as
one lot or two lot. Kapag two lot siya, syempre, magkakaroon yung
dalawang car na iyan ng separate contract of sale.
(2) A sale by auction is perfected when the auctioneer announces its perfection by
the fall of the hammer, or in other customary manner. Until such
announcement is made, any bidder may retract his bid; and the auctioneer may
withdraw the goods from the sale unless the auction has been announced to be
without reserve.
- Dito sa number 2 is about naman siya sa sale by auction is perfected by
the fall of the hammer or in other customary manner for example yung
pag-aannounce nila ng highest bidder. Kapag kase nagkaroon ng Fall of
the Hammer it means yung decisions na yun is Final. Mapupunta na sa
highest bidder yung subject.
- Sinasabi din dito na pwede mag-retract ng bid si bidder since every
bidding naman is just a mere offer bastat wala pang perfection ng
contract.
- Eto namang si auctioneer is pwede din naman niyang i-withdraw yung
goods from sale like kung walang nag-bid. Pero, meron tayong
exception, ang exception is, if the auction is announced to be without
reserve hindi na pwedeng mag withdraw si auctioneer.

(3) A right to bid may be reserved expressly by or on behalf of the seller, unless
otherwise provided by law or by stipulation.
 - Si seller pwede siya mag bid in auction sale and pwede din siya mag
employ ng mga buy bidders to bid para sa kanya, bastat yung right ni
seller to bid in that auction must be reserved and dapat may notice.
Notice na magpapakita na yung sale is subject to a right to bid on behalf
of the seller. And lastly dapat hindi siya prohibited by law or by
stipulation.
(4) Where notice has not been given that a sale by auction is subject to a right to
bid on behalf of the seller, it shall not be lawful for the seller to bid himself or
to employ or induce any person to bid at such sale on his behalf or for the
auctioneer, to employ or induce any person to bid at such sale on behalf of the
seller or knowingly to take any bid from the seller or any person employed by
him. Any sale contravening this rule may be treated as fraudulent by the buyer.
- So, sinasabi lang po dito na kapag walang notice means it shall not be
lawful for the seller to bid himself. Any sale contravening this rule may
be treated as fraudulent or panloloko by the buyer.

Sale by auction is perfected

A sale by auction is perfected when the auctioneer announces its perfection by the fall
of the hammer, or in other customary manner.
- Alam naman natin na every bidding is just a mere offer, so yung sale by auction
dito is hindi pa siya perfected. Unless if the hammers falls or kapag nag-
announce na sila ng highest bidder ibig sabihin meron ng perfection yung
contract na naganap. Kapag kase nagkaroon ng Fall of the Hammer it means
Final na yun.

BEFORE the fall of the hammer

1. Any bidder may retract his bid; and
2. The auctioneer may withdraw the goods from the sale unless the auction has
been announced to be without reserve.
 So, before the Fall of the Hammer pwede pa mag-retract si bidder ng bid
niya and in case naman kay auctioneer pwede niya pa bawiin yung goods
from the sale bastat hindi pa perfected yung contract.
Art. 1477. The ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof.
- This Article talks about the transfer of ownership. Payment of the price,
delivery of the object is not essential to the perfection of the contract. Yung
ownership is transferred only upon delivery of the thing.
- It is only after the delivery of the thing sold that the po purchaser acquires real
rights or ownership over it. And also Non-payment only creates a right to
demand payment or rescind the contract, in case naman na bouncing checks
ang pinangbayad mo "Criminal prosecution".

In a contract of sale, the title to the property passes to the vendee upon the
constructive or actual delivery thereof, as provided for in Article 1477 of the New Civil
Code. The vendor loses ownership over the property and cannot recover it until and
unless the contract is rescinded by a notarial deed or by judicial action as provided
for in Article 1592 of the New Civil Code. A contract of sale is absolute, absent any
stipulation therein reserving title over the property to the vendee until full payment
of the purchase price nor giving the vendor the right to unilaterally rescind the
contract in case of non-payment. In a contract of sale, the non-payment of the price is
a resolutory condition which extinguishes the transaction that, for a time existed, and
discharges the obligations created thereunder.
In a contract of sale, until and unless the contract is resolved or rescinded in
accordance with law, the vendor cannot recover the thing sold even if the vendee
failed to pay in full the initial payment for the property. The failure of the buyer to
pay the purchase price within the stipulated period does not by itself bar the
transfer of ownership or possession of the property sold, nor ipso facto rescind the
contract. Such failure will merely give the vendor the option to rescind the contract
of sale judicially or by notarial demand as provided for by Article 1592 of the New
Civil Code:
Art 1592. In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the
rescission of the contract shall of right take place, the vendee may pay, even after
the expiration of the period, as long as no demand for rescission of the contract
has been made upon him either judicially or by a notarial act After the demand,
the court may not grant him a new term.
- Pero may exception, the parties may stipulate that the despite the delivery, the
ownership of the thing shall remain with the seller until the buyer has fully
 paid the price. This stipulation is usually known as contractual reservation of
title and is common in sales on the installment plan.

Problem:
In her complaint, R averred that she bought the hereditary shares (consisting of
10 lots) of X and the heirs of L; that said vendors executed a contract of sale dated
April 10, 1990 in her favor; that X and the heirs of L received a down payment or
earnest money in the amount of P102,169.86 and P450,000, respectively; that it was
agreed in the contract of sale that the vendors would secure certificates of title
covering their respective hereditary shares; that the balance of the purchase price
would be paid to each heir upon presentation of their individual certificates of title;
that X refused to receive the other half of the down payment which is P100,000; that
X refused and still refuses to deliver to R the certificates of title covering his share on
the two lots; that with respect to the heirs of L, they also refused and still refuse to
perform the delivery of the two certificates of title covering their share in the disputed
lots; that R was and is ready and willing to pay X and the heirs of L upon presentation
of their individual certificates of title, free from whatever lien and encumbrance.
As to C, in spite of her knowledge that the disputed lots have already been sold by
X to R, it is alleged that a simulated deed of sale involving said lots was affected by X
in her favor; and that the simulated deed of sale by X to C has raised doubts and clouds
over R's title.
X and the heirs of L argue that the contract is a contract to sell, not a contract of
sale. The real character of the contract is not the title given, but the intention of the
parties. They intended to reserve ownership of the property to X and the heirs of L
pending full payment of the purchase price. Further, R failed to faithfully fulfill her
part of the obligation. Thus, X had the right to sell his properties to C who exercised
due diligence in ascertaining ownership of the properties sold to her.
Is the contract of sale between X and the heirs of L and R valid?
Answer:
Indeed, they have entered into a contract of sale. Not only has the title to the
subject properties passed to R upon delivery of the thing sold, but there is also no
stipulation in the contract that states the ownership is to be reserved in or "retained
by the vendor until full payment of the price."
In fact, earnest money has been given by R. "It shall be considered as part of the
price and as proof of the perfection of the contract. It constitutes an advance payment
to "be deducted from the total price. "Article 1477 of the same Code also states that
"the ownership of the thing sold shall be transferred to the vendee upon actual or
constructive delivery thereof." In the present case, there is actual delivery as
manifested by acts simultaneous with and subsequent to the contract of sale when R
not only took possession of the subject properties but also allowed their use as
parking terminal for jeepneys and buses.

Moreover, the execution itself of the contract of sale is constructive delivery.

Consequently, X could no longer sell the subject properties to C, after having sold
them to R. "In a contract of sale, the vendor loses ownership over the property and
cannot recover it until and unless the contract is resolved or rescinded x x x. "The records
do not show that X asked for a rescission of the contract. What he adduced was a belated
revocation of the special power of attorney he executed. "In the sale of immovable
property, even though it may have been stipulated that upon failure to pay the price at
the time agreed upon the rescission of the contract shall of right take place, the vendee
may pay, even after the expiration of the period, as long as no demand for rescission of
the contract has been made upon him either judicially or by a notarial act."

Two aspects of delivery

The term "delivery" or tradition has two aspects:
1. The de jure delivery or the execution of deeds of conveyance; and
2. The delivery of the material possession.

Art. 1478. The parties may stipulate that ownership in the thing shall not pass
to the purchaser until he has fully paid the price.
- Dito sa Article 1478, na nadeliver na yung object pero di pa nata-transfer yung
ownership
Under the Civil Code, unless the contract contains a stipulation that ownership
of the thing sold shall not pass to the purchaser until he has fully paid the price,
ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof. In other words, payment of the purchase price is not
essential to the transfer of ownership as long as the property sold has been delivered.
Such delivery (traditio) operated to divest the vendor of title to the property which
may not be regained or recovered until and unless the contract is resolved or
rescinded in accordance with law.
- Dito sa Article 1478, na nadeliver na yung object pero di pa nata-transfer yung
ownership. Sinasabi din dito na yung payment ng purchase price is hindi
 importante para ma-transfer yung ownership hanggat hindi pa man
nadedeliver yung object kay Buyer.
- Unless yung parties pwede silang mag-usap about doob sa pagtatransfer ng
ownership kung saan kapag di ka pa fully paid yung ownership di pa din
mapupunta sayo.

Article 1478 of the civil code does not require that such a stipulation be
expressly made. Consequently, an implied stipulation to that effect is considered
valid and, therefore, binding and enforceable between the parties. It should be noted
that under the law and jurisprudence, a contract which contains this kind of stipulation
is considered a contract to sell.

Art. 1479. A promise to buy and sell a determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a
price certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price.
- This Article 1479 talks about the Mutual Promise and Unilateral Promise. So,
yung first sentence na "A promise to buy and sell a determinate thing for a price
certain is reciprocally demandable" is actually a Mutual Promise. For example,
si "A" promise to buy something from "B" and "B" promise to sell it at an agreed
price. Kaya yung contract between A and B is good as a perfected contract of
sale.
- So, both parties are bound by their contract kaya kapag yung isa sa kanila is
hindi niya nagawa yung obligation, yung isang party is may right siya na mag-
demand ng fulfillment or recession ng obligation with payment of damages.
- Next paragraph talks about the Rules of a Unilateral Promise to buy or to sell.
Kapag walang acceptance by the offery, yung unilateral promise ay walang
legal effect. But if it is accepted by the offery bago pa magkaroon ng withdrawal
from the offeror then it constitute a binding sale. Kahit pa hindi pa supported
yung auction by a sufficient consideration.
- On the other hand, if the promise is supported by a consideration distinct from
the price, yung acceptance ng promise is magbubuo siya ng binding force doon
sa nag promise.
- For example, nag-offer si "A" na ibenta yung car niya sa halagang 1million and
yung offer na yun is meron lang 10 day period para tanggapin ni "B" yung mula
January 1.
So, kapag umabot na ng January 9 or January 11 pwede pa i-withdraw ni "A"
yung offer kase nga mere offer lang siya. Pero kung si "B" is nagbayad na ng
1,000 pesos sa offer, it means di na pwedeng ma-withdraw ni "A" yung offer
dahil nagbigay na ng consideration si "B" na 1,000 na distinct doon sa price na
pasok doon sa offer na 10 day period.
Art. 1480. Any injury to or benefit from the thing sold, after the contract has
been perfected, from the moment of the 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 price fixed according to weight like yung
mga 100 pesos per kilo, or according to number like 100 pesos for 10 pieces, or
according 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 talks about who bears the risk of loss. Ang exception kase dito is
kapag hindi pa name-measure or naka-counted and nadedeliver yung fungible
things kay buyer, then, yung loss is kay seller pa din since siya pa din yung
owner. Another exception na hindi si buyer ang magkakaroon ng loss is kapag
si Seller is guilty siya ng Fraud, negligence, default, or violation of contractual
term. Pero sabi dun sa last phrase na, if the buyer has incurred in delay means
si Buyer na din yung magbe-bear ng loss.

Object is lost before perfection

 If the object has been lost before perfection, the seller bears the loss.
- Syempre kung wala pa namang perfection of contract at di pa nata-
transfer yung ownership si seller yung magkakaroon ng loss. So, wala
pang kinalaman dito si buyer.
Object is lost after delivery to the buyer
 If the object was lost after delivery to the buyer, the buyer bears the loss.
- Kung kanina si Seller yung may loss, dito naman, obviously si buyer yung
magbe-bear or magkakaroon ng loss since na deliver na sakanya yung
object. So, nung nadeliver yung object kay Buyer, yung ownership is na-
transfer na sakanya.
Object is lost after perfection but before delivery
 If the object was lost after perfection but before delivery, the buyer bears
the loss. This is an exception to the principle of res perit domino.
- So, dito sa case na ito is perfected na yung contract pero hindi pa
nadedeliver yung object kay buyer. Ang tanong dito, sino ang magbe-
bear ng loss? Si Seller ba? Or si Buyer?
 Sa exception ng res perit domino (owner bears the loss), si Buyer ang magbe-
bear ng loss, kase during that intervening period din naman si Buyer ang
magbebenefit if meron or siya din yung magkakaroon ng loss.

What is res perit domino?

● Property lost to the owner.
Means the thing 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. For example, Si Seller nagbenta siya ng book kay Buyer. At etong book
is nadeliver na sakanya it means yung ownership is na-transfer na din. At kapag
nasira yung book na iyon si Buyer ang magbe-bear ng loss since siya na yung
may ari ng object na yun.

What are fungible goods?

● Goods that are interchangeable with one another; goods that, by nature or
trade usage, are the equivalent of any other like unit, such as coffee or grain.
So, eto yung mga bagay na madaling palitan since may pagkakapareho sila sa
isat Isa for practical purposes like yung mga ommodities, common shares,
options at marami pang iba.

Art. 1481. In the contract of sale of goods by description or by sample, the

contract may be rescinded if the bulk of the goods delivered do not correspond
with the description or the sample, and if the contract be by sample as well as
description, it is not sufficient that the bulk of goods correspond with the
sample if they do not also correspond with the description. The buyer shall have
a reasonable opportunity of comparing the bulk with the description or the
sample.
- So, Article 1481 is about siya sa Sale by Sample or Sale by Description. Etong
dalawang ito is dapat pareho silang present sa contract of sale. Hindi pwedeng
yung isa present, tapos yung isa hindi.
- For example, Nag-agree si "C" na bumili ng 100 sacks of rice by sample kay "A".
And etong si A dineliver niya na yung order ni C na 100 sacks of rice. But then,
nung inexamine na ni "C" yung mga bigas napansin at nalaman niya na hindi
ito equal or pareho doon sa sample na binigay sakanya ni "A" kaya nagreklamo
eto. So, ang pwedeng gawin dito ni "C" is ibalik niya yung 100 sacks of rice kay
"A" in a reasonable period of time for the purpose of re-examination.
 - Kapag kase sinabi nating "Sale by Description" means si seller sells the thing
and si buyer naman is nagrerely lang siya doon sa description ng thing na
binebenta sakanya. On the other hand, kapag sinabi nating Sale by Sample ibig
sabihin only sample is exhibited or shown, So, walang opportunity si Buyer na
i-examine or i-inspect yung bulk. The seller only warrants that the bulk of the
goods shall constant with the sample.

What is sale by sample?

There is a sale by sample when a small quantity is exhibited by the seller as a fair
specimen of the bulk, which is not present and there is no opportunity to inspect or
examine the same. To constitute a sale by sample, it must appear that the parties
treated the sample as the standard of quality and that they contracted with reference
to the sample with the understanding that the product to be delivered would
correspond with the sample. In a contract of sale by sample, there is an implied
warranty that the goods shall be free from any defect which is not apparent on
reasonable examination of the sample and which would render the goods
unmerchantable.
● Kapag sinabi nating Sale by Sample ibig sabihin only sample is exhibited or
shown, So, walang opportunity si Buyer na i-examine or i-inspect yung bulk.
The seller only warrants that the bulk of the goods shall be consistent with the
sample. Kaya dapat yung quality na ipinakita niya at idedeliver niya kay Buyer
is parehas lang.

What is sale by description?

There is a sale of goods by description where "a seller sells things as being of a
particular kind, the buyer not knowing whether the seller's representations are true
or false, but relying on them as true; or as otherwise stated, where the buyer has not
seen the article sold and relies on the description given to him by the seller, or has
seen the goods, but the want of identity is not apparent on inspection." A seller's
description of the goods which is made part of the basis of the transaction creates a
warranty that tht goods will conform to that description. Where the goods are bought
by description from a seller who deals in the goods of that description, there is an
implied warranty that the goods are of merchantable quality.
● Kapag kase sinabi nating "Sale by Description" means si seller sells the thing
and si buyer naman is nagrerely lang siya doon sa description ng thing na
binebenta sakanya ni Seller. So, a sale that is made without the buyer seeing
the goods.
Art. 1482. Whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as a proof of the perfection of the contract.
● Yung earnest money na sinasabi dito is part talaga siya ng purchase price, Isa
ito sa mga proof ng perfection of the contract. For example, "A" sells his car to
"C" for 1 million pesos payable within 1 month. And, So, for "C" to show his
earnestness, nagbayad agad siya ng 100,000 pesos upon the perfection of
contract. So, yung 100,000 dito is part na siya ng purchase price, eto yung
earnest money and at the end of 1 month period kailangan nalang magbayad
ni "C" ng 900,000 pesos kay "A"
What is earnest money ("areas")?
A deposit paid (often in escrow) by a prospective buyer (esp. of real estate) to
show a good-faith intention to complete the transaction, and ordinarily forfeited if the
buyer defaults.
● So, earnest money is applied in perfected sale since part po siya ng purchase
price kaya eto so Buyer is required siya na bayaran yung mga natitirang
balance.
Art. 1483. Subject to the provisions of the Statute of Frauds and of any other
applicable statute, a contract of sale may be made in writing, or by word of
mouth, or partly in writing and partly by word of mouth, or may be inferred
from the conduct of the parties. (n)
General Rule:
A contract of sale may be made in writing, or by word of mouth, or partly in
writing and partly by word of mouth, or may be inferred from the conduct of the
parties.
- Sale is a consensual contract and is perfected by mere consent. For validity
purposes, a contract of sale may be entered in whatever form like pwede siya
through writing, or word of mouth, or partly in writing and partly by word of
mouth.
Exceptions:
When a sale of a piece of land or any interest therein is through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void.
- Yung term na statute of frauds is a descriptive of those laws, statutes or
provisions which require certain agreements to be in writing before they can
be proved and enforced in a judicial action. Furthermore, the contract cannot
be enforced if it does not comply with the writing or memorandum provided
by the statute of Frauds. So, kailangan nasusunod lahat ng mga nakasulat sa
Article 1403 about sa Statute of Frauds kung kailangan may pirma ng mga
parties or agent yung writing agreement otherwise the contract be enforced by
action.

Form Is required for enforceability

Under the Statute of Frauds, the following contract of sale must be in writing to
he enforceable:
So, para maging unenforceable yung contract of sale dapat
1. #1 Sale of real property
- Or immovable property or of an interest therein must be in writing,
otherwise the sale is unenforceable. Moreover, yung sale ng real
property, kahit na verbal or orally made valid pa din siya between the
parties. Pero para maging unenforceable kailangan naka writing siya,
kailangan nakalagay siya sa public instrument to bind other persons na
hindi part ng contract.
2. Sale of personal property at a price not less than P500.
 - So, kapag yung price is nasa 500 pesos or more, it must be in writing to
be enforceable. Pero if the price is less than 500 pesos, oral or verbal
contract is enforceable.
3. Sale of property not to be performed within a year from the date thereof.
- Regardless of the nature of the property and the price involved bastat
kapag lumagpas na Ng 1 year it should be in writing.

Art. 1484. In a contract of sale of personal property the price of which is

payable In installments, the vendor may exercise any of the following remedies:
- So, what is sold in Article 1484 is Personal Property and Sale is in the
installments plan kung saan monthly may binabayaran ka.

So, yung mga remedies available for the seller in case hindi na nakakabayad Ng
installments yung buyer
(1) #1 Exact fulfillment of the obligation, should the vendee fail to pay;
In case of remedy of specific performance. Dahil hindi nakabayad so buyer,
etong si seller naman is magdedemanda. Syempre si buyer is liable siya na
bayaran yung mga natitirang balance doon sa purchase price. So, he may still
recover from the purchaser the unpaid balance of the price, if any, on the real
and personal properties of the purchaser not exempt by law from attachment
or execution.
(2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;
#2 is about the remedy of cancellation. If the vendor choose rescission or
cancellation of the contract upon the vendee's failure to pay two or more
installments, the latter can demand the return of payments already made
unless there is a stipulation about forfeiture. So, there shall be mutual
restitution. Pero pwede nama magkaroon Ng forfeiture if the stipulation is not
unconscionable.
(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to
the contrary shall be void.
3rd remedy if there is a chattel mortgage constituted to secure yung payment
ng obligation. So, pwedeng i-foreclose yung chattel mortgage na Yan at hindi
 na kailangan magbalik Ng mga installment payment. Pero kung merong mga
deficiency, the seller cannot also recover unpaid balance of the price meaning
after the foreclosure sale any agreement to the contrary is void.

Art. 1485. The preceding article shall be applied to contracts purporting to be

leases of personal property with option to buy, when the lessor has deprived
the lessee of the possession or enjoyment of the thing.
- Article 1485 is about naman siya sa lease of personal property with option to
buy is also considered as a sales of personal property payable in installments.
Rules in 1484 will also apply as well.
- For example, bumili si "A" ng kotse na huhulog-hulugan niya ng 30,000 every
month hanggang sa mabayaran niya ng buo so seller. Pero kapag dumating
yung araw na di na talaga kayang magbayad ni buyer, etong si seller is
magdedemanda siya sa korte ng fulfillment na bayaran yung natitirang
balance. And syempre kapag umabot yan sa korte sigurado na mananalo si
seller. And ofcourse, the seller can foreclose the property na pagmamay-ari ni
buyer. So, makukuha pa din no seller yung balance.

Art. 1486. In the case referred to in two preceding articles, a stipulation that
the installments or rents paid shall not be returned to the vendee or lessee shall
be valid insofar as the same may not be unconscionable under the
circumstances.
- Article 1486 talks about the stipulation authorizing the forfeiture of
installments or rent paid. Where in sales of personal property by installments
or leases of personal property with option to buy, the parties may stipulate that
the installments or rents paid are not to be returned. Such stipulation is
valid"insofar as the same may not be unconscionable under the
circumstances"; otherwise, the court has the power to order the return of a
portion of the total amount paid in installments or rents.