ARTICLE 1544 RULES AS TO DOUBLE SALE:

REQUISITES:

1. 2 same valid sales

2. Different buyers
3. Same object of the contract
4. Conflicting interest between buyers
5. Same seller

1. MOVABLE PROPERTY –
The first person who takes possession of the thing sold in good faith becomes the owner of the
thing.
2. IMMOVABLE PROPERTY –
a. First person who registers the sale in good faith becomes the owner
b. If both buyers fail to register the property in the Registry of Deeds, then the first person who
takes possession of the property takes ownership of the property
c. If failure to perform the aforementioned things above, then the person who has the oldest
title takes ownership provided he is in good faith.

In cases where the first buyer fails to register and take possession of the property wherein
he is evicted in the property he was supposed to claim, his only remedy is to bring an action
against warranty against eviction to the seller.
But it must noted that the 2nd buyer be in good faith, meaning he had no prior knowledge of
the defect in the title even before buying the property, after buying and even in the
registration of the property.
If the first vendee is aware of the fact that there is a double sale, he still has the rights to the
property provided that he registered the property already.

ARTICLE 1582 OBLIGATIONS OF THE VENDEE

1. To accept the delivery

2. To pay for the price and interest
3. And if stipulated, he must also bear the expenses in the registration and execution of the
contract of sale and putting the goods in a deliverable state.

PERTINENT RULES AS PER ART. 1582

1. The vendor is not required to deliver until the thing sold is paid nor the vendee is not required
to pay until the delivery of the thing. NOTE THAT WHEN THE OTHER PARTY HAS FULFILLED HIS
OBLIGATION, THE OTHER PARTY MUST ALSO PERFORM HIS OTHERWISE HE WILL BE GUILTY OF
DELAY.
2. If stipulated, vendee is required to pay and accept the delivery of the thing sold at the time and
place designated in the contract.
 3. If not stipulated, vendee is to pay at the time and place of the delivery (meaning when the
vendor has made delivery already, the vendee must pay at such time where delivery happened).
4. If there is no stipulation, the delivery shall be made where the perfection of the contract
happened.
5. If time was the only thing stipulated, then vendee must pay for the thing before it is delivered to
him. HOWEVER, if the thing is sold on credit, vendor is bound to deliver the thing even before
payment of the vendee.

ART. 1583 – GR: Vendee is not required to accept delivery in installments. He is entitled to receive all
the goods at the same time. As well as the vendor is not required to accept payment by installments.

EXC: When installment (delivery or payment) has been stipulated by both parties.

RULES ON DELIVERY BY INSTALLMENTS:

1. Breach affects whole contract – If vendor makes defective delivery installments or when buyer
wrongfully refuses to pay, injured party may sue for damages if the damage is so material that it
affects the whole contract.
2. Breach is divisible – the breach in here will only give rise to compensation for a particular breach
but not to the entire contract.
3. Separate price was not fixed for each installment. Hence, single price must be paid – if the
buyer or the seller fails to pay the price on the period agreed upon and fails to deliver the
installment, injured party has the remedy of either fulfillment of the obligation plus damages.

ART. 1584 – GR: Buyer must be given a chance to inspect the goods before actually accepting them
which the transfer of ownership happens.

EXC: When it is delivered to a carrier which normally asks for the payment first before the buyer has
the opportunity to examine them.

1. Regardless of actual delivery of the goods, it does not constitute transfer of ownership to the
buyer if he is still about to examine the goods if it conforms or corresponds as per request or as
per contract. If it does not correspond, he may refuse to accept the goods.
2. However, if it is delivered thru carrier, and the carrier asks for payment first before the buyer
gets to examine the thing. But in cases where there is an agreement or the usage of trade
permits the buyer to examine the thing first.
3. Buyer’s right to examine the goods as he must reserve this right within a reasonable time.
4. But the right to examine goods may be waived by stipulation. No need for express terms.

REJECTION OF GOODS

- If the goods do not conform to the contract, the buyer may refuse to accept them in which the
buyer does not have the obligation to return the goods to the seller. It is sufficient that he has
notified the seller of his refusal.
- Option to reject by the buyer must be exercised within a reasonable time unless there is a period
fixed in the contract.
 - Receipt of goods under a contract of sale equates acceptance if the buyer does not exercise his
right to reject within a reasonable time.

ART. 1585

1. The buyer has accepted the goods if he explicitly says so.

2. He has also accepted it when he does an act that is the same to that of sellers or when he does
not notify the seller of his refusal of the products after lapse of time.

ART. 1586

Acceptance does not bar the seller of his liability in case of breach of warranty or any promise unless
otherwise agreed. Provided that the buyer was able to notify the seller of the breach within a reasonable
time.

ART. 1587 (IT MUST BE REASONABLE TO BE CONSIDERED RIGHTFUL REFUSAL)

Buyer’s justified refusal:

1. Buyer does not have the obligation to return the goods to the seller, it is sufficient that he has
notified the seller but he has the obligation to take care of the goods.
2. Risk of loss is shouldered by the seller.
3. Duty of seller to take delivery of the goods.
4. Buyer has the right to resell the goods if seller fails to take delivery even when he has already
notified his refusal or when the seller is in default.

ART. 1588 – wrongful refusal of the buyer will make the goods be at his disposal. (in which the title
passes to him and the risk of loss is borne to him)

ART. 1589 – INTEREST

This article lies on the presumption that delivery and price payment were not done simultaneously and
so thru lapse of time, buyer is liable to pay interest in the following cases:

1. Expressly stipulated – If no rate was stipulated then the legal rate (6%) should be used.
2. After the seller has delivered the goods, it bore fruits and income.
3. If there is demand of payment by the seller and buyer did not pay, he is guilty of default.

ART. 1590 – SUSPENSION OF PRICE DEPENDS ON CIRCUMSTANCES

Where vendee can suspend payment:

a. Vendee has a well-grounded fear that he will be evicted from his possession of the property
by a vindicatory action or a foreclosure of mortgage.
b. If he is disturbed on his possession of the property.

Action to rescission cannot be availed unless there is final judgement by the court to protect seller from
collusion. In case where the disturbance is non apparent servitude, buyer can only avail rescission and
not suspension of payment.
 Where vendee cannot suspend:

a. Seller has given him security to return the price in a proper case
b. Vendor is the cause of the disturbance or danger to cease
c. It has been stipulated that notwithstanding any circumstances, vendee shall pay the
purchase price.
d. Disturbance is mere trespass in which vendee can enforce his rights to the intruder and not
to the vendor.
e. Vendee has fully paid the price.

ART. 1591 – VENDOR CAN RESCIND THE SALE OF IMMOVABLE PROPERTY

1. He must have a good reason in rescinding the sale like insolvency of the buyer in which there is a
risk of losing the property.

ART. 1592 – In sale of immovable property, the vendee can still pay the price even after the stipulated
period for payment has expired. (GR: Rescission takes place when vendee fails to pay the price).
However, if rescission has already been demanded then the court can no longer grant the vendee a new
term/period.

ART. 1593 – VENDOR’S RESCISSION TO MOVABLE PROPERTY

Vendor can rescind the sale of a personal property without having to demand for rescission given that
buyer has wrongfully or without valid cause refuse to (1) accept delivery (2) pay for the price unless a
credit period for its payment has been stipulated.

Reason for the rule with respect to movable property – these properties do not have a stable price in
the market on the lapse of time, thus, it depreciates unlike immovable properties.

UNPAID SELLER

ART. 1525 – An unpaid seller is an unpaid seller when he has not received any payment of the thing sold
or where the negotiable instrument received as a conditional payment has been dishonored by the
buyer. A seller remains unpaid whether the title has passed or not.

1. Tender of payment destroys the seller’s lien.

2. Payment of part of price does not destroy lien regardless if the title has been passed or not.
3. Payment by negotiable instrument will only be recognized if it has been cashed out.

ART. 1526 – RIGHTS OF AN UNPAID SELLER

1. Lien on the goods or right to retain them for the price

2. Stoppage in transit, in case of insolvency of the buyer
3. Right of resale
4. Right to rescind the sale
5. Right to withhold delivery, if not yet delivered
ART. 1527 – unpaid seller’s possessory lien may be exercised when:

1. There is no stipulation as to credit sales in which the seller has the right to receive payment at
the time of delivery. But lien remains until he has received payment or tender.
2. Expiration of credit term
3. Insolvency of buyer

ART. 1528 – Lien not generally lost on part delivery

ART. 1529 – owner’s lien on goods is lost when:

1. When he deliver to bailee with the purpose of transmission to the buyer without reserving his
right of ownership of the goods
2. When the goods has been accepted by the buyer or his agent
3. By waiver

ART. 1530 – RIGHT OF SELLER TO STOP THE GOODS IN TRANSIT

In case of insolvency of the buyer, the seller has the right to retain ownership of the goods in transit by
actual possession of the goods or by giving notice to the carrier.