4 Sales

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SALES
LEASE
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By the CONTRACT
OF SALE one of the contracting
parties obligates himself to transfer
the ownership of and to deliver a
determinate thing, and the other to
pay therefor a price certain in
money or its equivalent.
A contract of sale may be
absolute or conditional.
(Art. 1458 NCC).
CONTRACT OF SALE CONTRACT TO SELL

(exclusive right & privilege to
purchase an object)
1. title passes to the buyer 1. ownership is reserved to
upon deliver y of the thing the seller & is not to pass
sold; until full payment of the
price;
2. in case of non-payment, 2. in case of non-payment,
an action for specific there can be no action for
performance or for specific performance but
rescission can be filed by only for damages;
injured party;
3. non-payment of the price 3. full payment is a positive
is a negative resolutory suspensive condition;
condition;
4. vendor has lost and 4. title remains in the
cannot recover the vendor if the vendee does
ownership of the thing not comply with the
sold until & unless the condition precedent of
contract of sale itself is making payment at the
resolved and set aside. time specified in the
contract.
RODRIGUEZ vs. Sps. SIOSON,

G.R. 199180, July 27, 2016
3
3/20/97 – DOS with purchase
Thelma p
price of P1,243,000.00; paid
P442,293.50 only.
Neri Spouses
owner of a lot DOS dated 11/27/2002; TCT
w/ TCT in his name Sioson issued in their names;
Q: Was the contract entered into by Thelma and Neri

a Contract of Sale OR a Contract To Sell?
A: IT IS A CONTRACT TO SELL. Neri agreed to sell the lot to

Thelma on the condition that title shall pass only upon full payment of
the purchase price. A Contract To Sell is a "bilateral contract
whereby the prospective seller, while expressly reserving the
ownership of the property despite delivery thereof to the
prospective buyer, binds himself to sell the property exclusively
to the prospective buyer upon fulfillment of a suspensive
condition, i.e., THE FULL PAYMENT OF THE PURCHASE PRICE.”
ACE FOODS, INC. vs. MICROPACIFIC

TECHNOLOGIES CO, LTD.,
G.R. 200602, DEC.. 22, 2013
MTCL Ace Foods

(letter proposal for the
delivery and sale of Accepted MTL’s
computer equipment) proposal; issued
PO amounting to
P646,464.00
Invoice Receipt: “title to
sold property is reserved failed to pay the
in MTCL until full purchase price
compliance of the terms despite demand
and conditions and
payment of the price.”
Bearing in mind its consensual nature, a

Contract of Sale had been perfected at the precise
moment ACE Foods, as evidenced by its act of
sending MTCL the Purchase Order, accepted the
latter’s proposal to sell the subject products in
consideration of the purchase price of P646,464.00.
From that point in time, the reciprocal obligations
of the parties – i.e., of MTCL to deliver the said
products to ACE Foods, and, of ACE Foods to pay
the purchase price therefor within thirty (30) days
from delivery – already arose and consequently
may be demanded.
Sacobia Hills Dev. Corp.,et.al. vs. Ty,

G.R. 165889, Sept. 20, 2005
In a Contract to Sell, the payment of the

purchase price is a positive suspensive condition,
the failure of which is not a breach, casual or
serious, but a situation that prevents the obligation
of the vendor to convey title from acquiring an
obligatory force. Thus, for its non-fulfillment there will
be no contract to speak of, the obligor having failed to
perform the suspensive condition which enforces a
juridical relation. There can be NO rescission of an
obligation that is still non-existent, the suspensive
condition not having occurred as yet.
In a contract to sell, the prospective seller does not

consent to transfer ownership of the property to the
buyer until the happening of an event, which for
present purposes, is the full payment of the purchase
price. What the seller agrees or obliges himself to do
is to fulfill his promise to sell the subject property when
the entire amount of the purchase price is delivered to
him. Upon the fulfillment of the suspensive
condition, ownership will not automatically
transfer to the buyer although the property may
have been previously delivered to him. The
prospective seller still has to convey title to the
prospective buyer by entering into a contract of
absolute sale.
In the present case, respondent's failure to

fulfill this suspensive condition prevented the
perfection of the contract to sell. With an
ineffective contract, Ty had not acquired the status
of a shareholder but remained, at most, a
prospective investor. In the absence of a juridical
tie between the parties, Ty cannot claim the rights
and privileges accorded to Sacobia's full-fledged
members and shareowners, including the full
enjoyment of the amenities being offered.
Unfortunately for Ty, he cannot avail of
rescission as envisioned by Article 1191 of
the Civil Code. However, he can withdraw his
investment subject to the restrictions under the
terms and conditions pertinent to a reneging
investor.
CONTRACT OF SAL
LE TRACT
(Art. 1466) CONT
OF AGENCY TO SELL
1. buyer receivess the goods 1. agent receives s th
he goods s
as owner; as goods of the princ cipal;
2. buyer has to pay the 2. agent simply ha as to
price; accoount for the proceeds s
of sale to prin
ncipaal;
3. buyer, as a general rule,
cannot return the objeect 3. agen nt, if unable to selll,
sold; can return the goo ods;
4. seller warrants the thing
g 4.. agent doe es not ma ake
sold; warranty for whiich h he
asssummes personal
liability, for as long
g as
s he
acts within hiis authority
and in the name of seller;
5. buyer can deal with the 5. agent, in dealing wiith the
thing as he pleases being hing received
th d, must act
the owner. & is bound accordiing to
uctions of the
the instru
principal.
CONTRACT OF SALE CONTRACT for A PIECE

OF WORK (Art. 1467)
1. thing subject of the 1. thing transfer red is not
contract would have one in existence & which
existed and been the would never have existed
subject of sale to some but for the order of the
other person even if the person desiring it;
order had not been given; manufactured especially
available to all in the according to the order of a
general course of business specific person/entity;
2. risk of loss before deliver y 2. risk of loss before delivery
is borne by buyer; is borne by the
worker/contractor, not by
the one who ordered;
3. primary object of a 3. services dominate the
contract is a sale of contract even though there
manufactured item already is a sale of goods involved.
existing, even though the
item is installed by labor
fur nished by seller.
CONTRACT OF SALE BARTER

(Art. 1467)
1. consideration is price 1. consideration is another
certain or equivalent; thing;
2. buyer can enforce vendor’s 2. in case of eviction by an
liability in case of eviction. innocent 3rd person,
injured party can sue for
damages only.
• To determine whether contract is sale

or barter:
1st – intent of the parties
2nd – if intent is not clear:
1. thing more valuable - barter
2. 50 - 50 in value - sale
3. thing less valuable - sale
SALE LEASE
1. seller transfers ownership 1. owner transfers temporary
of the thing sold possession & enjoyment of
the thing leased.
SALE DACION EN PAGO

1. no pre-existing credit; 1. there is pre-existing credit
2. obligations between 2. obligations between
parties are created; parties are extinguished;
3. more freedom in fixing the 3. less freedom in fixing the
price. price.
CONCEPTS/PRINCIPLES RELATED
TO SALES:
1. POLICITATION - unaccepted unilateral
promise to buy or sell.
2. OPTION CONTRACT (Art. 1479) - an
accepted unilateral promise to buy or sell
a determinate thing for a price certain
supported by a consideration (option
money) distinct from the price. The
optioner-offeror is bound to comply with
his undertaking but the optionee has the
right but not the obligation to buy or sell.
In case of breach, the optionee can sue for
damages only – he cannot sue for specific
performance. (Asuncion vs. CA).
3. EARNEST MONEY (Art. 1482 NCC)

- partial payment of the
purchase price and is
considered as proof of the
perfection of the contract of
sale. Option money may
become earnest money, if the
parties so agree.
EARNEST MON
NEY OPTION MON
NEY
1. part of the purchase price; 1. money y given as distinct
consideration foor an option
contract;
2. given only when there is a 2. sale not yet perfected;
perfected sale;
3. buyer is bound to pay the 3. optionee is not required to
balance off the price
e. buy.
4. RIGHT OF FIRST REFUSAL - an

innovattiv
ve juridical relation. Iff such
right is incorporated in a contra act, it
is enforceaable by specificc
performance. Oth herwise, the injure ed
party can only sue for damage es.
OPTION CONTRACT
An option is a preparatory contract in

which one party grants to another, for a
fixed period and at a determined price,
the privilege to buy or sell, or to decide
whether or not to enter into a principal
contract. It is a separate and distinct contract
from that which the parties may enter into
upon the consummation of the option. It must
be supported by a consideration distinct
from the price.
RIGHT OF FIRST REFUSAL
While the object might be made

determinate, the exercise of the right
would be dependent not only on the
grantor’s eventual intention to enter into
a binding juridical relation with another
but also on terms, including the price,
that are yet to be firmed up. (Vasquez et.
al., vs. Ayala Corporation, G.R. 149734,
Nov. 19, 2004).
5. PACTUM RESERVATI DOMINII

(Contractual Reservation of Title)
- a stipulation where parties agree that
despite delivery, the ownership of the
thing shall remain with the seller until
the purchaser has fully paid the price.
(Art. 1478 NCC)
PACTUM RESERVATI CONTRACT TO
DOMINII SELL
1. a form of a conditional sale; 1. a contract preparatory
to a contract of sale;
2. delivery of the object has been 2. no delivery;
made;
3. in case of non-payment, action 3. in case of non-payment,
for specific performance or for there can be no action
rescission can be filed by the for specific
injured party. performance.
6. SALE BY DESCRIPTION - seller sells

things as being of a cer tain kind,
buyer merely relying on the seller’s
REPRESENTATION OR DESCRIPTIONS
WITHOUT SEEING THE THING.
7. SALE BY SAMPLE - seller warrants

that the bulk of the goods shall
correspond with the SAMPLE IN
KIND, QUALITY AND CHARACTER.
8. SALE BY SAMPLE & DESCRIPTION

- must satisfy BOTH requirements.
ART.1475. The contract of sale is

perfected at the moment there is a
meeting of minds upon the thing which
is the object of the contract and upon
the price.
From that moment, the parties may

reciprocally demand performance, subject
to the provisions of the law governing the
form of contracts.
ART.1477. The ownership of the thing
shall be transferred to the vendee upon
the actual or constructive delivery
thereof.
KINDS OF DELIVERY
1. Actual or real delivery - when the thing sold is
placed in the control and possession of the
vendee (Art. 1477 NCC).
2. Constructive or legal delivery - acts which
have been held by construction of law
equivalent to actual delivery.
a. execution of a public
instrument (Art. 1498 par.1 NCC);
b. traditio symbolica – parties make
use of a token symbol to represent
the thing delivered.
(Art. 1498 par. 2 NCC);
c. traditio longa manu – by mere consent of

the parties if the thing sold cannot be
transferred to the possession of the
vendee at the time of the sale
[Art. 1499(1) NCC]; vendor merely
points to the thing sold which
shall thereafter be at the
control and disposal of the vendee;
d. traditio brevi manu – when vendee has

already the possession of the thing sold by
virtue of another title. [Art. 1499(2) NCC].
Ex. vendee was lessee at the time of sale.
e. traditio constitutum possesorum – when the

vendor continues in possession of the thing
sold not as owner but in some other capacity
(Art.1500 NCC). Vendor as tenant of vendee;
f. Quasi-traditio – in case of incorporeal rights

(Art. 1501), the vendee to use his rights as
new owner with the consent of the vendor.
Ex: delivery to a person of a negotiable
document of title where the goods referred
therein will be delivered to the bearer
amounts to delivery of the goods to such
person.
Sps. BADILLA vs. BRAGAT,

G.R. 187013, April 22, 2015
Sps. Ledesma Sps. Badilla

original
owners of
Pastrano 1970 - Sale of 200
1,015 sq. m. 11/18/68 - Deed of sq. m. lot “on
lot #19986; Definite Sale of installment basis”;
11/18/80 -OCT Unregistered not in writing;
# P-2035 Coconut and possession
issued in the Residential Land. transferred to Sps.
name of Azur Badilla.
Pastrano. Sps. Bragat
5/5/84 – DOAS of 1,015 sq.m. 4/18/78 – DOAS of 991 sq.m.
registered land covered by OCT # residential lot 2 TDs issued:
P-2035 (1) 642 sq.m. – Lot #19986-A
10/2/87- DOS of 1,015 sq. m. (2) 349 sq.m. – Lot #19986-B
Registered land; TCT # 47759
Issued in the name of Bragat
Q: Who has a better right of ownership over the land?

It is not disputed that Spouses Pastrano had

previously sold on November 18, 1968, via a Deed
of Definite Sale of Unregistered Coconut and
Residential Land, the property to Ledesma. As early
as such date, the Pastranos no longer had
ownership over said land.
Ledesma subsequently sold, in 1970, a

portion of the property to Spouses Badilla, who
immediately took delivery and possession,
ownership of this portion had also been
transferred to Spouses Badilla. Although that sale
appears to be merely verbal, and payment therefor
was to be made on installment, it is a partially
consummated sale, with the Badillas paying the initial
purchase price and Ledesma surrendering
possession.
Ledesma even delivered to the Badillas the

owner's duplicate copy of OCT No. P-2035.
The Civil Code states that ownership of the

thing sold is transferred to the vendee upon the
actual or constructive delivery of the same. The
thing is understood as delivered when it is placed in
the control and possession of the vendee. Payment of
the purchase price is not essential to the transfer of
ownership as long as the property sold has been
delivered; and 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.
NFF INDUSTRIAL CORP. vs. G & L ASSOCIATED

BROKERAGE and/or GERARDO TRINIDAD,
G.R. 178169, January 12, 2015
NFF Ind. Corp.

G & L Associated Brokerage
(P)
(R)
All deliveries were duly
ordered 2,000 pcs of bulk bags acknowledged by
from NFF for delivery to “G & L representatives of R and
Associated Brokerage Inc. c/o covered by sales invoices
Hi-Cement Corp., Norzagaray, w/ delivery receipts
Bulacan to Mr. Raul Ambrosio, rubber-stamped, dated &
company checker and signed by the security
authorized representative.” guard on duty & other
company representatives.
Q: Was there delivery of the bulk bags despite

failure to strictly comply with instructions to
deliver to the specified person?
A: YES. Under the Civil Code, the vendor is bound to

transfer the ownership of and deliver, as well as
warrant the thing which is the object of the sale. The
ownership of thing sold is considered acquired by the vendee
once it is delivered to him in the following wise:
Art. 1496. The ownership of the thing sold is

acquired by the vendee from the moment it is delivered
to him in any of the ways specified in Articles 1497 to
1501, or in any other manner signifying an agreement
that the possession is transferred from the vendor to
the vendee.
Art. 1497. The thing sold shall be understood as delivered,

when it is placed in the control and possession of the vendee.
It is clear that petitioner has actually delivered

the bulk bags to respondent company, albeit the
same was not delivered to the person named in
the Purchase Order. By allowing petitioner’s
employee to pass through the guard-on-duty, who
allowed the entry of delivery into the premises of Hi-
Cement, which is the designated delivery site,
respondents had effectively abandoned whatever
infirmities may have attended the delivery of the bulk
bags. If respondents were wary about the manner
of delivery, such issue should have been brought
up immediately after the first delivery was made.
Instead, Mr. Trinidad acknowledged receipt of the first
batch of the bulk bags and even followed up the
remaining balance of the orders for delivery.
Despite Petitioner’s failure to strictly comply with the

instruction to deliver the bulk bags to the specified
person, acceptance of delivery may be inferred from the
conduct of the respondents. Accordingly, respondents
may be held liable to pay for the price of the bulk bags
pursuant to Article 1585 NCC ,which provides that:
ARTICLE 1585. The buyer is deemed to have

accepted the goods when he intimates to the seller
that he has accepted them, or when the goods
have been delivered to him, and he does any act in
relation to them which is inconsistent with the
ownership of the seller, or when, after the lapse of
a reasonable time, he retains the goods without
intimating to the seller that he has rejected them.
LOSS/DETERIORATION OF
THE OBJECT (Art.1480 NCC)
Who bears the risk of loss?
Principle of “RES PERIT DOMINO”
1. lost before perfection - SELLER
2. lost at the time of perfection,
contract is void or inexistent -
SELLER
3. lost after perfection but before
delivery – BUYER (as exception
to the rule of “res perit
domino”)
4. lost after delivery - BUYER
AN UNPAID SELLER IS (Art. 1525)

1. one has not been paid or tendered the whole
price;
2. one who has received a bill of exchange or

other negotiable instrument as conditional
payment and the condition on which it was
received has been broken by reason of the
dishonor of the instrument.
REMEDIES OF AN UNPAID SELLER

A. IN GENERAL, an unpaid seller has 2 remedies:
an action for specific performance or an action
for rescission, with damages in either case.
B. SPECIAL REMEDIES:
SALE OF PERSONAL PROPERTY
IN INSTALLMENT ( Art. 1484 NCC )
(RECTO LAW) – seller has the following
alternative remedies:
a. Exact fulfillment of the obligation, should the
vendee fail to pay;
b. Cancel the sale, should the vendee’s failure
to pay cover two (2) or more installments;
c. Foreclose the chattel mortgage on the thing
sold, if one has been constituted, should the
vendee’s failure to pay cover 2 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.
Equitable Savings Bank (BDO Unibank)

vs. Palces, G.R. 214752, March 9, 2016
In this case, there was no vendor-vendee relationship

between respondent and petitioner. The records would
reveal that respondent never bought the subject vehicle from
petitioner but from a 3rd party, and merely sought financing
from petitioner for its full purchase price. In order to
document the loan transaction between petitioner and
respondent, a Promissory Note with Chattel Mortgage
dated August 18, 2005 was executed wherein,
respondent acknowledged her indebtedness to
petitioner in the amount of P1,196,100.00 and placed
the subject vehicle as a security for the loan.
Indubitably, a loan contract with the accessory chattel
mortgage contract - and not a contract of sale of personal
property in installments – was entered into by the parties,
hence, Article 1484 NCC is not applicable.
SALE OF REAL ESTATE IN

INSTALLMENTS – R.A. 6552 OR THE
REALTY INSTALLMENT BUYER
PROTECTION ACT (MACEDA LAW).
Applicable ONLY to:
1. transactions or contracts of
sale or financing of real estate
on installment payments,
including sale of residential and
condominium units;
2. buyer has paid at least 2 years

of installments.
A. right of SPECIFIC PERFORMANCE – seller

must observe the grace period granted
to the buyer to pay, WITHOUT
ADDITIONAL INTEREST, the unpaid
installments.
1. GRACE PERIOD IS ONE MONTH/YEAR OF

INSTALLMENTS PAID;
2. in case of installment payments LESS
THAN 2 YEARS, PERIOD SHALL NOT BE
LESS THAN 60 DAYS from the date the
installment became due;
3. failure to pay within the grace period
allows the seller to proceed to (B).
B. right of RESCISSION – cancellation can

only take place AFTER 30 DAYS FROM
RECEIPT of the notice of cancellation or
demand for rescission by a notarial act
PLUS FULL PAYMENT OF CASH
SURRENDER VALUE TO THE BUYER.
1. seller shall refund to buyer CASH

SURRENDER VALUE of payments
equal to 50% OF THE TOTAL
PAYMENTS made and AFTER 5
YEARS OF INSTALLMENTS, an
ADDITIONAL 5% every year but NOT
TO EXCEED 90% OF THE TOTAL
PAYMENTS MADE.
C. right to RETAIN INSTALLMENTS –

seller can retain NOT MORE THAN 50%
of the installments paid. But if
installments paid were LESS THAN
TWO YEARS, seller can have
ABSOLUTE FORFEITURE OVER THE
INSTALLMENTS PAID.
* down-payments, deposits or options
paid are included in the computation of
total payments made.
Gatchalian Realty Inc. vs. Angeles,

G.R. 202358, Nov. 27, 2013
Ev
Evelyn
Gatchalian Realty, Inc.
Angeles
An
gave Angeles 12 notices for
payment in a span of 3 yrs;
gave a total of 51 months
1994 – purchased H & L
grace period for both
under CTS #s2272 &
contracts; issued a notice
2271 valued at P750K &
of notarial rescission dated
P450K, respectively,
9/11/03 received by Angeles
with 24% interest p./a.,
on 9/19/03; made a demand
payable w/in 10 years;
for payment of P112,304.42
was able to pay only 35
as reasonable rent for the
and 48 monthly
use & occupation of H & L
amortizations for said
as of Aug. 2003 after
properties.
deducting 50% of Angeles’
refundable amount.
Was there a valid rescission of the

Contract of Sale under RA 6552
(Maceda Law)?
For a valid and effective cancellation/rescission
under RA 6552 (Maceda Law) it must comply with the
mandatory twin requirements of a notarized notice of
cancellation AND a refund of the cash surrender
value.
The actual cancellation of the contract can only

be deemed to take place upon the expiry of a 30-
day period following the receipt by the buyer of
the notice of cancellation or demand for
rescission by a notarial act AND the full payment
of the cash surrender value.
Mandatory Twin Requirements:

Notarized Notice of Cancellation
& Refund of Cash Surrender Value
In Olympia Housing, Inc. v. Panasiatic Travel

Corp., 443 Phil. 385, 398-399 (2003), the SC ruled
that the notarial act of rescission must be
accompanied by the refund of the cash surrender
value.
x x x The actual cancellation of the contract can only

be deemed to take place upon the expiry of a 30-
day period following the receipt by the buyer of the
notice of cancellation or demand for rescission by a
notarial act and the full payment of the cash
surrender value.
In Pagtalunan v. Dela Cruz Vda. De Manzano, 559

Phil. 658, 669-670 (2007), the SC ruled that there is
no valid cancellation of the Contract to Sell in the
absence of a refund of the cash surrender value. The
SC stated that:
x x x Sec. 3 (b) of R.A. No. 6552 requires refund of the

cash surrender value of the payments on the
property to the buyer before cancellation of the
contract. The provision does not provide a different
requirement for contracts to sell which allow possession of
the property by the buyer upon execution of the contract
like the instant case. Hence, petitioner cannot insist on
compliance with the requirement by assuming that
the cash surrender value payable to the buyer had
been applied to rentals of the property after
respondent failed to pay the installments due.
Remedies of the Buyer

in the Absence of a Valid
Cancellation of a Contract to Sell
In view of the absence of a valid cancellation, the

Contract to Sell between GRI and Angeles remains
valid and subsisting, hence Angeles has 2 options:
1. The option to pay, within 60 days from the MeTC’s

determination of the proper amounts, the unpaid
balance of the full value of the purchase price of the
subject properties plus interest at 6% per annum
from 11 November 2003, the date of filing of the
complaint, up to the finality of this Decision, and
thereafter, at the rate of 6% per annum. Upon payment
of the full amount, GRI shall immediately execute
Deeds of Absolute Sale over the subject properties
and deliver the corresponding transfer certificate of
title to Angeles.
In the event that the subject

properties are no longer available, GRI
should offer substitute properties of
equal value. Acceptance of the suitability
of the substitute properties is Angeles’
sole prerogative. Should Angeles refuse
the substitute properties, GRI shall
refund to Angeles the actual value of the
subject properties with 6% interest per
annum computed from 11 November
2003, the date of the filing of the
complaint, until fully paid; and
2. The option to accept from GRI

P574,148.40, the cash surrender value
of the subject properties, with interest
at 6% per annum, computed from 11
November 2003, the date of the filing of the
complaint, until fully paid. Contracts to
Sell Nos. 2271 and 2272 shall be
deemed cancelled 30 days after
Angeles’ receipt of GRI’s full payment
of the cash surrender value. No rent is
further charged upon Angeles as GRI
already had possession of the subject
properties on 10 October 2006.
OBLIGATIONS OF THE CONTRACTING

PARTIES:
A. VENDOR:
Art. 1495. 1. Transfer ownership of the thing s
sold;
2. Deliver the thing inclu
including
accessions and accessories;
3. Warrant against eviction and hidden
defects;
4. Take care of the thing pending
delivery;
Art. 1487. 5. Pay for the expenses of the deed of
sale, unless otherwise stipulated;
B. VENDEE:
1. Accept delivery ) Art. 1582
2. Pay the price )
PLACE OF DELIVERY OF GOODS SOLD

(Art. 1521 NCC)
1. As per agreement, whether express or
implied;
2. No agreement as to place of delivery –
usage of trade;
3. No agreement, no prevalent usage –
seller’s place of business;
4. In any other case – seller’s residence;
5. In case of specific goods, which to the
knowledge of the parties at the time of
the contract were in some other place
– that place is the place of delivery, in
the absence of any agreement or
usage of trade to the contrary.
TIME OF DELIVERY OF GOODS SOLD

(Art. 1521 NCC)
GENERAL RULE:
1. Agreement of the parties;
2. No agreement – usage of trade
If NO TIME is fixed by the contract –
REASONABLE TIME which is a question of fact
dependent upon the circumstances attending
the particular transaction, such as the
character of the goods, purpose of the
transaction, ability of the seller to produce the
goods if they are to be manufactured,
transportation facilities and distance to be
traveled, etc.
PAYMENT OF THE PRICE:

(Article 1524 NCC)
GENERAL RULE:
1. DELIVERY SIMULTANEOUS
WITH PAYMENT OF THE
PRICE.
EXCEPTION:
Even without payment, delivery
must be made if a period for
payment has been fixed by the
parties.
(Art. 1502 NCC) GOODS DELIVEREDD TO BUYER

GOODS DELIVERED TO BUYER “ON TRIAL/ON APPROVVAL/ON
“ON SALE OR RETURN” SATISFACTION”
1. ownership passes to buyer 1. ownersh hip remaains wiith
on delivery but subseq quent seller until buyer signifies
return of goods to seller his approval or satisfaction
revests ownership in the
seller;
2. sale subject to a 2. sale subject to suspensive
resolutory conditionn condition (approval or
(return/tender of goods to satisfa
action of the buyer);
the seller within time fixed
in the contract, or if no
time has been fixed, within
a reasonable time);
3. depends entirely on the 3. depends on the ch haracte
er
will of buyer without andd quality of the go
oods
reference to the quality of delliv
vered;
goods;
4. risk of loss or injur y rests 4. risk of loss or injur y
upon buyer. remains with seller.
RULES IN CASE OF DOUBLE

SALE (Art. 1544 NCC)
1. PERSONAL PROPERTY - to the first
possessor in GF.
2. REAL PROPERTY
a. to the first registrant in the
Registry of Property, in GF;
b. if no inscription, to the first
possessor, in GF;
c. if none of the above, to the
person with the oldest title, in GF.
SPS. PUDADERA vs. MAGALLANES, et. al., GR

170073 , October 18, 2010.
The 1st buyer is the owner. Mere registration

is not enough to confer ownership. The law
requires that the 2nd buyer must have acquired &
registered the property in GF. For the 2nd buyer to
displace the 1st buyer, the ff must be shown: (1)
ignorance of the 1st sale and of the 1st buyer’s rights from
the time of acquisition until title is transferred to him by
registration or failing registration, by delivery of
possession; and (2) 2nd buyer’s continuing GF and or lack
of knowledge of the 1st sale until his contract ripens into
full ownership through prior registration as provided by
law.
Roque vs. Aguado, GR 193787,

April 17, 2014
The requisites for Art. 1544 NCC to apply are: (1). The 2
or more sales transactions in issue must pertain to exactly
the same subject matter and must be valid sales
transactions; (2). The 2 or more buyers at odds over the
rightful ownership of the subject matter must each represent
conflicting interests; and (3). The 2 or more buyers at odds
over the rightful ownership of the subject matter must each
have bought from the same seller. In this case, Article
1544 NCC is inapplicable as petitioners base their right
of ownership over the property on a Contract to Sell, not
a Contract of Sale (even if denominated as a Deed of
Conditional Sale) as the seller promised to execute a
Deed of Absolute Sale upon the completion by the buyer
of the purchase price, hence, it is only a Contract to
Sell.
MIRROR DOCTRINE - one

CANNOT close his eyes to
facts which should put a
reasonable and prudent man
upon his guard, and then
claim that he acted in good
faith under the belief that
there was no defect in the
title of the vendor.
Heirs of Cabigas, et. al. vs. Limbaco

et. al., G.R. 175291, July 27, 2011
The law protects to a greater degree a purchaser

who buys from the registered owner himself. It
requires a higher degree of prudence from one who
buys from a person who is not the registered owner,
although the land object of the transaction is
registered. While one who buys from the registered
owner does not need to look behind the certificate of
title, one who buys from one who is not the
registered owner is expected to examine not
only the certificate of title but all factual
circumstances necessary for one to determine
if there are flaws in the title of the transferor,
or in the capacity to transfer the land.
HEIRS OF SARILI vs. LAGROSA,

GR 193517, Jan. 15, 2014
(+) Victorino
Pedro &
Owners Ramon & Isabel
Amelia
of lot ; Rodriguez Sarili
residents Lagrosa BGF
of Cal.,
USA; Discovered falsified SPA with
irregularity in
DOS in the names of
its Ack.
Spouses Sarili
A higher degree of prudence is required from one who buys

from a person who is not the registered owner, although the
land object of the transaction is registered. The buyer is
expected to examine not only the TCT but all factual circumstances
necessary for him to determine if there are any flaws in the title of
the transferor. He also has the duty to ascertain the identity of
the person with whom he is dealing with and the latter’s legal
authority to convey the property.
FLORENTINO AND ELENA LEONG,, et.al. vs.

EDNA C. SEE, G.R. 194077, Dec. 3, 2014
Florentino - Carmelita immigrated to USA;

Elena
dissolved their
owners of Quiapo prop. marriage; Marital
Florentino’s w/TCT in their names Settlement
sister-in-law; “Florentino shall
occupying the convey/quit-claim all
prop. rental- rights xxx may not
free for over 2 11/14/96 – sold prop. To be alienated w/o
decades. Edna; presented Florentino 1st
Florentino’s notarized obtaining clean title
nullity of waiver of Interest over Malabon prop.”
contract, title dated 3/11/96; TCT was
& damages transferred in Edna’s
“sale w/o his name
consent”.
Issue: WON Edna is a purchaser in GF & for value?

Respondent is a purchaser in good

faith for value who exercised the necessary
diligence in purchasing the property.
First, good faith is presumed, and

petitioners did not substantiate their bold
allegation of fraud. Second, respondent did
not rely on the clean title alone precisely
because of the possession by third parties,
thus, she also relied on Florentino’s waiver of
interest. Respondent even verified the
authenticity of the title at the Manila Register of
Deeds with her father and Carmelita. These
further inquiries prove respondent’s good faith.
An innocent purchaser for value

refers to someone who “buys the
property of another without notice that
some other person has a right to or
interest in it, and who pays a full and fair
price at the time of the purchase or
before receiving any notice of another
person’s claim.” One claiming to be an
innocent purchaser for value has the
burden of proving such status.
Respondent exerted due diligence when

she ascertained the authenticity of the
documents attached to the deed of sale such
as the marital settlement agreement with
Florentino’s waiver of interest over the
property. She did not rely solely on the
title. She even went to the Registry of Deeds
to verify the authenticity of the title. These
further inquiries were considered by the
lower courts in finding respondent to be
an innocent purchaser in good faith and
for value.
Sps. SUNTAY vs. Keyser Mercantile, Inc.,

G.R. 208462, Dec. 10, 201
14
Keyser Bayfront Sps. Suntay

(Gocolay) Dev. Corp. 7/7/90 – CTS of condo units;
CTS of Unit G in Bayfront paid full purchase price but
Tower condominium w/ Bayfront failed to deliver
CCT#15802; CTS not said condo units; HLURB
registered w/ Mla. RD; rescinded the CTS & ordered
CCT#15802 remained in the refund of the purchase price
name of Bayfront + interest to Sps. Suntay;
writ execution & levy of
Bayfront’s properties;
auction sale w/ Sps. Suntay
as highest bidder.
Q: Were Spouses Suntay purchasers in GF?

Any buyer or mortgagee of realty covered by a

Torrens certificate of title, in the absence of any
suspicion, is not obligated to look beyond the
certificate to investigate the title of the seller
appearing on the face of the certificate. And, he is
charged with notice only of such burdens and
claims as are annotated on the title.
In the case at bench, the subject property was

registered land under the Torrens System covered by
CCT No. 15802 with Bayfront as the registered owner.
At the time that the Notice of Levy was annotated on
January 18, 1995, the title had no previous
encumbrances and liens. Evidently, it was a clean title.
The Certificate of Sale, pursuant to an auction
sale, was also annotated on April 7, 1995,
with Bayfront still as the registered owner.
“The act of registration is the operative act

to convey or affect the land insofar as third
persons are concerned, hence, "it follows that
where there is nothing in the certificate of title
to indicate any cloud or vice in the ownership
of the property, or any encumbrance thereon,
the purchaser is not required to explore farther
than what the Torrens title upon its face
indicates in quest for any hidden defect or
inchoate right that may subsequently defeat
his right thereto. If the rule were otherwise, the
efficacy and conclusiveness of the certificate of title
which the Torrens system seeks to insure would
entirely be futile and nugatory. The public shall then
be denied of its foremost motivation for respecting
and observing the Torrens system of registration.
WARRANTY - is a statement or
representation made by the seller of
goods, contemporaneously and as a
part of the contract, having
reference to the character, quality
or kind of the thing sold, where he
promises or undertakes to insure
that certain facts are or shall be as
he then represents.
1. EXPRESS WARRANTY - any

affirmation of fact or any
promise by the seller relating to
the thing, the natural tendency
of which is to induce the buyer
to purchase the thing, and if the
buyer purchases the thing
relying thereon. (Art. 1546 NCC).
*(Art. 1341). Mere opinion of a seller
does NOT import a warranty unless:
a. the seller is an expert;
b. it was relied upon by the buyer.
2. IMPLIED WARRANTY - that which

the law derives by imp pliicattion or
inference from the nature of th he
transaction or the relative situ uatiion
or circumstances of the par ties,
irrespective of any intention of the e
seller to create it.
In a contract of sale, unless a
contrary intention appears, there is
an implied warranty: (Art. 1547 NCC)
a. on the part of the seller that he
hass a right to sell the thing at the
time when own nershhip is to pass;
b. that the buyer shall, from that time,

have and enjoy the legal and
peaceful possession of the thing;
c. that the thing shall be free from any

hidden faults or defects, or any
charge or encumbrance not declared
or known to the buyer.
*NO implied warranty in auction

sales, “as is where is” sales and sales
of 2nd hand articles/items.
A. WARRANTY AG
GAINST
EVICT
TION
1. EVICTION - shall take pllace

whenever by a final judgment
based on n a right prior to the
e sale
or an act imputable to the e
venddor, the vendee is deprived of
the whole or of a partt of the
thing purrchased. (Art. 154 48 NC
CC)
B. WARRANTY AGAINST
HIDDEN DEFECTS:
1. ELEMENTS
a. defect must be serious or
important;
b. it must be hidden;
c. it must exist at the time of
the sale;
d. vendee must give notice of
the defect to the vendor
within a reasonable time;
2. REMEDIES OF the VENDEE:

(Art. 1567 NCC)
a. accion redhibitoria
(rescission);
b. accion quanti minores
(reduction of the price);
c. damages, in either case.
EQUITABLE MORTGAGE - is
one which lacks the
formalities, words or other
requisites prescribed by law
for a mortgage, but shows the
intention of the parties to
make the property as security
for a debt.
A conventional redemption is deemed to

be an EQUITABLE MORTGAGE in any of
the following: (Art. 1602 NCC)
1. Price of the sale is unusually inadequate;
2. Vendor remains in possession as lessee or
otherwise;
3. Period of redemption is extended after
expiration;
4. Purchaser retains part of purchase price;
5. Vendor binds himself to pay the taxes of the
thing sold;
6. Any other case where the parties really
intended that the transaction shall secure
the payment of a debt or the performance of
an obligation.
*** In case of doubt, a contract

purporting to be a sale with a
right of repurchase (Art. 1603
NCC), or an absolute sale (Art.
1604 NCC), shall be construed as
an EQUITABLE MORTGAGE.
*** The apparent vendor may

ask for the REFORMATION OF
THE INSTRUMENT.
Spouses SOLITARIOS vs. Spouses JAQUE,

G.R. 199852, Nov. 12, 2014
Gaston & Lilia

Jaque
Felipe & Julia
Solitarios Deed of Sale dated
May 8, 1981 and
40,608 sq. m. April 26, 1983;
Contract of
agricultural lot allowed the
Mortgage
originally w/ TCT Solitarios to retain
NOT
# 1249 in Felipe’s possession of the lot
a Contract
name but later in subject to delivery
of Sale.
Spouses Jaque’s of a portion of the
names under TCT properties’ produce
# 745. to them.
Q: Is this a Contract of Sale OR an

equitable mortgage?
The transaction between the parties is an

equitable mortgage. It was never denied by
respondents that Spouses Solitarios have remained
in possession of the subject property and exercised
acts of ownership over the said lot for almost 17
years even after the purported absolute sale until
their filing of the complaint.
To allow the transfer of the lot to the Jaques would

amount to condoning the prohibited practice of pactum
commissorium. Art. 2088 of the NCC provides that
the creditor cannot appropriate or consolidate
ownership over a mortgaged property upon failure
of the mortgagor to pay a debt obligation.
This Court had held that a purported

contract of sale where the vendor remains in
physical possession of the land, as lessee or
otherwise, is an indicium of an equitable
mortgage. In Rockville v. Sps. Culla, G.R.
155716, Oct. 2, 2009, We explained that the
reason for this rule lies in the legal reality that in
a contract of sale, the legal title to the property
is immediately transferred to the vendee. Thus,
retention by the vendor of the possession of
the property is inconsistent with the
vendee's acquisition of ownership under a
true sale. It discloses, in the alleged
vendee, a lack of interest in the property
that belies the truthfulness of the sale.
The Civil Code provisions that consider certain types of

sales as equitable mortgages are intended for the protection
of the unlettered such as the spouses Solitarios, who are
penurious vis-a-vis their creditors. In Cruz v. CA,
GR 143388, Oct. 6, 2003, the Court HELD:
Vendors covered by Art. 1602 NCC usually find

themselves in an unequal position when bargaining
with the vendees, and will readily sign onerous
contracts to get the money they need. Necessitous men
are not really free men in the sense that to answer a
pressing emergency they will submit to any terms that the
crafty may impose on them. This is precisely the evil that
Art. 1602 NCC seeks to guard against. The evident intent
of the provision is to give the supposed vendor
maximum safeguards for the protection of his legal
rights under the true agreement of the parties.
Without doubt, the spouses Solitarios need

the protection afforded by the Civil Code
provisions on equitable mortgage. Certainly,
the parties were negotiating on unequal
footing. As opposed to the uneducated and
impoverished farmer, Felipe Solitarios, Gaston
Jaque, was a 2nd Lieutenant of the Armed Forces of
the Philippines when he retired. Further, Felipe
Solitarios was constantly in financial distress. He
was constantly in debt and in dire financial need.
That he borrowed money from the PNB twice, first
in 1975 then in 1976, and mortgaged the subject
property to the Jaques suggest as much. We
cannot allow the transfer of ownership to the
Jaques and therefore declare their transaction
as equitable mortgage.
EXTINGUISH
HMENT OF SALE
*Same causes as alll otther
obligations,, and by conventtion
nal or
legal redemption.
A. CONVENTIONAL L
REDEMPTIO ON - when the
vendor reserves the right
to reppurchase the th hing
sold (Art. 16
601 NCC).
1. PROCEDURE IN REDEMPTION:
Vendor must pay (through tender
of payment or consignation) the
vendee: (Art. 1616 NCC)
a. the price of the sale;
b. the expenses of the contract;

c. the necessary and useful
expenses made on the thing
sold;
2. PERIOD FOR THE EXERCISE OF

RIGHT OF CONVENTIONAL
REDEMPTION: (Art. 1606 NCC)
a. if there is an agreement – perio od
cannot exceed 10 years;
b. no agreement as to period – 4 years
from the date
e of conttract.
** However, the vendor may still exercise

the right to repurchase within n 30 days
from the time
e final judgment was rendered
in a civil action on the basis that the
contract was a true e sale with right of
repurchase.
B. LEGAL REDEMPTION the -

right to be subrogated, upon
the same terms and conditions
stipulated in the contract, in
the place of one who acquires
a thing by purchase or dation in
payment, or by any other
transaction whereby ownership
is transferred by onerous title.
(Art. 1619 NCC)
1. under the Civil Code

a. sale of a co-owner of his share to a
stranger (Art. 1620 NCC);
b. when a credit or other incorporeal
right in litigation is sold (Ar t. 1634
NCC);
c. sale by heir of his hereditary rights
to a stranger (Art. 1088 NCC);
d. sale of adjacent rural lands not

exceeding 1 hectare (Art. 1621 NCC).
e. sale of adjacent small urban lands

bought merely for speculation
(Art. 1622 NCC).
2. under Special Laws

a. an equity of redemption in case of
judicial foreclosures;
b. a right of redemption in case of
extra-judicial foreclosures.
LEASE
- contract by virtue of
which 1 person binds himself
to grant temporarily the use
of a thing or to render some
service to another who
undertakes to pay some rent,
compensation or price.
ASSIGNMENT OF LEASE
CONSENT of lessor is required,
UNLESS there is a
stipulation allowing it.
MORTGAGE OF LEASE RIGHT NO

CONSENT needed from lessor.
TO BIND 3RD PERSONS lease of

real estate must be recorded in
the Registry of Property
(Art. 1648 NCC).
SUBLEASE: ALLOWED, unless expressly

prohibited in the contract of lease of
things (Art. 1650 NCC).
SUBLESSEE is SUBSIDIARILY LIABLE to
the lessor for:
1. all acts which refer to the use and
preservation of the thing leased in the
manner stipulated between the lessor and
the lessee (Art. 1651 NCC);
2. any rent due from the lessee BUT the
sublessee shall NOT be responsible
BEYOND the amount of rent due from him in
accordance with the TERMS of the
sublease, at the time of the extra-judicial
demand by the lessor. (Art. 1652 NCC)
OBLIGATIONS OF LESSOR (Art. 1654 NCC)

1. Deliver the object of the lease fit for the use
intended;
** cannot ALTER the FORM of the thing as to impair
the use to which the thing is devoted under the
terms of the lease;
2. Make necessary repairs to keep it suitable
for the use intended, UNLESS there is a
stipulation to the contrary;
3. Maintain peaceful and adequate enjoyment
of the lessee for the entire duration of the
contract;
¾ only LEGAL DISTURBANCE; physical disturbance is
the problem of LESSEE based on Art. 1664 NCC. The
lessor is NOT obliged to answer for a mere act of
trespass (3rd person claims NO RIGHT whatever); the
lessee shall have a direct action against the intruder.
OBLIGATIONS OF LESSEE (Art. 1657 )

1. Pay the rent;
2. Use the thing leased as DFOAF, devoting it

to the use stipulated; absence of
stipulation that which may be
inferred from the nature of the thing
leased, according to the custom of the
place;
3. Pay expenses for the
Deed of Lease;
4. Notify lessor, within the SHORTEST
POSSIBLE TIME, of any usurpation or
untoward act of any 3rd person upon the
thing leased (Art. 1663 NCC).
5. Notify lessor, with the same urgency (as

#4) of the need of necessary repairs
(Art. 1663 NCC).
* in BOTH # 4 & 5, LESSEE shall be liable

for DAMAGES which, through his
negligence, may be suffered by
LESSOR/OWNER.
** if LESSOR fails to make urgent repairs,

LESSEE, in order to avoid an imminent
danger, MAY order the repairs, at the
LESSOR’S cost (Art. 1663 NCC).
6. Return the thing leased at the termination of

the contract just as he received it, save what
has been lost or impaired by the lapse of time
or by ordinary wear and tear, or from an
inevitable cause.
a. The law presumes LESSEE received the thing
in GOOD CONDITION, unless there is proof to
the contrary (Art. 1666 NCC);
b. LESSEE is responsible for the
deterioration/loss of the thing leased, unless
he proves he is NOT at FAULT;
¾ Burden of proof does NOT apply when the
destruction is due to a natural calamity (Art.
1667 NCC);
c. LESSEE is liable for deterioration caused by
c
members of his household, guests and
visitors (Art. 1668 NCC).
LESSEE MAY SUSPEND payment

of rent in case LESSOR fails to:
1. make necessary
repairs OR;
2. maintain lessee in peaceful and

adequate enjoyment of the
leased property. (Art. 1658 NCC)
Non-ccompliance by LESSOR OR
LESSEE of the obligations und der
Arts. 1654 and 1657 NCC, the
aggrieved par ty MAY ask for :
1. rescission of the contract AND
2. indemnificattion for damages
OR
3. payment of damages only,
allowin
ng the CONTRACT to
REMAIN IN FORCE.
(Art.1659 NCC)
TERMINATION OF THE LEASE

1. Expiration of the lease contract (Art.
1669 NCC);
** If lease was made for a determinate
time, it ceases upon the DAY FIXED,
WITHOUT NEED OF A DEMAND.
2. Total destruction of the thing leased

by a fortuitous event.
(1). Partial destruction LESSEE MAY
choose between:
a. proportional reduction of the rent;
b. OR rescission of the lease.

TACITA RECONDUCCION
A. Requisites (Art. 1670 NCC)

1. Original lease contract has expired;
2. Lessee continues possession of the
thing for 15 days;
3. Possession of lessee was with the
acquiescence of lessor;
4. No notice to the contrary has
previously been given by either party.
B. Characteristics of the NEW lease:

1. Period of the new lease is the time
established in Arts. 1682 & 1687 NCC, and
NOT for the period of the original contract:
Art. 1682 NCC. Lease of a piece of rural land,

when its duration has not been fixed
understood to have been made for all
the time necessary for the gathering of the
fruits which yield in 1 year.
Art. 1687 NCC. If the period for the lease has

not been fixed understood to be from:
a. year to year annual rent;
b. month to month monthly rent;
c. week to week weekly rent;
d. day to day daily rent.

Even though a monthly rent is paid,
COURTS may fix a longer term after the lessee
has occupied the premises for over ONE YEAR;
If rent is weekly COURTS may extend the

period after the lessee has been in possession
for OVER 6 MONTHS;
* daily rent lessee has been in

possession of the premises for OVER 1
MONTH.
1. Terms of the original contract shall be

REVIVED, but not incidental provisions;
2. Obligation contracted by a 3rd person for the
security of the principal contract shall cease.
CAUSES FOR JUDICIAL EJECTMENT

(Art. 1673 NCC)
1. Expiration of the period;

2. Non-payment of rent stipulated;
l t d
3. Violation of any of the conditions agreed
upon in the contract;
4. Devoting the thing to any use or service not
stipulated which causes the deterioration
thereof.
MALAYAN REALTY, INC. REPRESENTED BY

ALBERTO C. DY, vs. UY HAN YONG,
G.R. 163763, November 10, 2006
Under Article 1687 of the New Civil Code which reads:
Article 1687. If the period for the lease has not been
fixed, it is understood to be from year to year, if the rent
agreed upon is annual; from month to month, if it is
monthly; from week to week, if the rent is weekly; and
from day to day, if the rent is to be paid daily.
However, even though a monthly rent is paid,
and no period for the lease has been set, the
courts may fix a longer term for the lease after
the lessee has occupied the premises for over one
year. x x x,
If the period of a lease contract has not been

specified by the parties, it is understood to be
from month to month, if the rent agreed upon is
monthly. The lease contract thus expires at the end of
each month, unless prior thereto, the extension of said
term has been sought by appropriate action and
judgment is eventually rendered therein granting the
relief.
In the case at bar, the lease period was not

agreed upon by the parties. Rental was paid monthly,
and respondent has been occupying the premises
since 1958. A written notice was served upon
respondent on January 17, 2001 terminating the
lease effective August 31, 2001. As respondent
was notified of the expiration of the lease,
effectively his right to stay in the premises had
come to an end on August 31, 2001.
Where a petitioner has been deprived of its

possession over the leased premises for so long a
time, and it is shown that, the respondent was the
recipient of substantial benefits while the petitioner
was unable to have the full use and enjoyment of a
considerable portion of its property, such militates
against further deprivation by fixing a period of
extension.
In the present case, respondent has remained in
possession of the property from the time the
complaint for ejectment was filed on September 18,
2001 up to the present time. Effectively,
respondent's lease has been extended for more
than five years, which time is, under the
circumstances, deemed sufficient as an
extension and for him to find another place to
stay.
SALE OF THING LEASED:

1. If lease is NOT RECORDED in the Registry of
Property, BUYER may TERMINATE the lease
EXCEPT: IF
a. there is a stipulation to the contrary in the
Contract of Sale; OR
b. buyer knows the existence of the lease.
1.1. If buyer terminates the contract off

lease, the LESSEE may DEMAND
D that::
a. he be allowed to gather the fruits of
the harvest w/c corresponds to th he
current agricultural year;
b. the vendor indemnify him for damages
suffered.
1.2. If the sale is FICTITIOUS (just for the

purpose of extinguishing the lease), the
supposed vendee CANNOT TERMINATE the
contract of lease.
* Sale is PRESUMED FICTITIOUS if at the
time the supposed vendee demands the
termination of the lease, the sale is NOT
RECORDED IN THE REGISTRY OF
PROPERTY.
2. If sale is with a RIGHT OF REPURCHASE,

BUYER CANNOT EJECT the LESSEE until the
END OF THE PERIOD FOR REDEMPTION.
If LESSEE makes in GF USEFUL

IMPROVEMENTS, w/o altering the form or
substance of the property leased, upon the
termination of the lease, the LESSOR
shall: (Art. 1678 NCC)
PAY the lessee ½ of the value of the
1.
improvements at that time; OR
2. ALLOW the lessee to REMOVE the

improvements even though the principal
thing may suffer damage thereby (should
lessor refuse to reimburse the amount in #1).
LESSEE shall not however, cause anymore
impairment upon the property leased than is
necessary.
In ORNAMENTAL EX XPENSES,
the LESSEE : (Art. 1678 NCC)
1. SHALL NOT be entitled to any
y
reimbursem
ment; BUT
T
2. MAY remove the ornamental

objects, provided no DAMAGE is
caused to the e principal thing AND
the LESSOR does nott choose to
retaiin them by paying their value at
the time the le
ease is extiinguished.

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ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

CONTRACT OF SALE CONTRACT TO SELL

RODRIGUEZ vs. Sps. SIOSON,

Q: Was the contract entered into by Thelma and Neri

A: IT IS A CONTRACT TO SELL. Neri agreed to sell the lot to

ACE FOODS, INC. vs. MICROPACIFIC

MTCL Ace Foods

Bearing in mind its consensual nature, a

Sacobia Hills Dev. Corp.,et.al. vs. Ty,

In a Contract to Sell, the payment of the

In a contract to sell, the prospective seller does not

In the present case, respondent's failure to

CONTRACT OF SALE CONTRACT for A PIECE

CONTRACT OF SALE BARTER

• To determine whether contract is sale

SALE DACION EN PAGO

3. EARNEST MONEY (Art. 1482 NCC)

4. RIGHT OF FIRST REFUSAL - an

An option is a preparatory contract in

RIGHT OF FIRST REFUSAL

While the object might be made

5. PACTUM RESERVATI DOMINII

6. SALE BY DESCRIPTION - seller sells

7. SALE BY SAMPLE - seller warrants

8. SALE BY SAMPLE & DESCRIPTION

ART.1475. The contract of sale is

From that moment, the parties may

c. traditio longa manu – by mere consent of

d. traditio brevi manu – when vendee has

e. traditio constitutum possesorum – when the

f. Quasi-traditio – in case of incorporeal rights

Sps. BADILLA vs. BRAGAT,

Sps. Ledesma Sps. Badilla

Q: Who has a better right of ownership over the land?

It is not disputed that Spouses Pastrano had

Ledesma subsequently sold, in 1970, a

Ledesma even delivered to the Badillas the

The Civil Code states that ownership of the

NFF INDUSTRIAL CORP. vs. G & L ASSOCIATED

NFF Ind. Corp.

Q: Was there delivery of the bulk bags despite

A: YES. Under the Civil Code, the vendor is bound to

Art. 1496. The ownership of the thing sold is

Art. 1497. The thing sold shall be understood as delivered,

It is clear that petitioner has actually delivered

Despite Petitioner’s failure to strictly comply with the

ARTICLE 1585. The buyer is deemed to have

AN UNPAID SELLER IS (Art. 1525)

2. one who has received a bill of exchange or

REMEDIES OF AN UNPAID SELLER

Equitable Savings Bank (BDO Unibank)

In this case, there was no vendor-vendee relationship

SALE OF REAL ESTATE IN

2. buyer has paid at least 2 years

A. right of SPECIFIC PERFORMANCE – seller

1. GRACE PERIOD IS ONE MONTH/YEAR OF

B. right of RESCISSION – cancellation can

1. seller shall refund to buyer CASH

C. right to RETAIN INSTALLMENTS –

Gatchalian Realty Inc. vs. Angeles,

Was there a valid rescission of the

The actual cancellation of the contract can only

Mandatory Twin Requirements: