Professional Documents
Culture Documents
2010 - 2015 - Donor's Tax
2010 - 2015 - Donor's Tax
2010 - 2015 - Donor's Tax
Definition(of warranty):
A statement or representation made by the seller contemporaneously and
as part of the contract of sale, having reference to the character, quality, or title
of the goods, and by which he promises or undertakes to ensure that certain
facts are or shall be as he then represents.
EXPRESS WARRANTIES
For there to be express warranty, the following requisites must concur:
(1) An affirmation of fact or any promise relating to the thing sold;
(2) The natural tendency of such affirmation or promise is to induce the
buyer to buy;
(3) The buyer buys the thing relying thereon. [Art. 1546] (4) Made before the
sale not upon delivery or any other point
An express warranty can be made by and also be binding on the seller even
in the sale of a second hand article. [Moles v. IAC, 1989]
Warranties
Condition Warranty
Goes into the performance of an
Pertains to and affects the existence obligation and may, in itself, be an
of the obligation obligation
Non-happening does not amount to Non-fulfillment constitutes breach of
breach of contract contract
(3) Sale by Virtue of Execution and Attachment Art. 1544 does NOT apply
to the sale of unregistered land at an execution sale because a buyer of
unregistered land at an execution sale only steps into the shoes of the judgment
debtor, and merely acquires the latter's interest in the property sold as of the
time the property was levied upon. [Carumba v. CA, 1970]
(4) Sale of Unregistered Land
(a) Instrument or deeds establishing, transmitting, acknowledging,
modifying or extinguishing rights with respect to lands not registered
under the Land Registration Act or the Spanish Mortgage Law, are
required to be registered in the Registry of Property to prejudice 3rd
persons, although such registration is understood to be “w/o prejudice to
a 3rd party with a better right”. [PD 1528 Sec 113]
(b) Art. 1544 applies to unregistered land subject to a conventional sale
(because of Art. 1358) but NOT to unregistered land subject to judicial
sale.
PROPERTY REGISTRATION DECREE
(1) REQUISITES FOR REGISTRATION OF DEED OF SALE IN GOOD
FAITH
Purchaser in good faith
(a) GeneralCharacteristics
One who buys the property of another, without notice that some
other person has a right to or interest in such property, and who pays a
full and fair price for the sale, at the time of the purchase or before he
has notice of the claim/interest of some other person in the property.
[Agricultural and Home Extension Development Group v CA, 1992]
(b) Presumption
General Rule: As a rule, he who asserts the status of a
purchaser in good faith and for value has the burden of proving such
assertion. This onus probandi cannot be discharged by mere
invocation of the legal presumption of good faith, i.e., that everyone is
presumed to act in good faith [Mathay v CA, 1998]
When buyer is presumed to be in bad faith:
1) Annotation of adverse claim: Places any subsequent buyer of the
registered land in bad faith. [Balatbat v CA, 1996]
2) Annotation of Lis Pendens: Buyer cannot be considered an innocent
purchaser for value where it ignored the lis pendens on the title.
3) A purchaser of a parcel of land cannot close his eyes to facts which
should put a reasonable man upon his guard, such as when the property
subject of the purchase is in the possession of persons other than the seller. A
buyer who could not have failed to know or discover that the land sold to him
was in the adverse possession of another is a buyer in bad faith. (Heirs of
Ramon Durano v Uy, 2010)
Lis Pendens vs Annotation of Adverse Claim
Lis Pendens- May be cancelled even before the action is finally terminated
forcauses which may not be attributable to the claimant
Adverse Claim -May be cancelled only in one instance, i.e., after the claim
is adjudged invalid or unmeritorious by the Court .
Lis Pendens & Adverse claim:
Both are intended to protect the interest of a claimant by notifying and
cautioning other persons that said property is subject to a claim.
The two are not contradictory or repugnant to one another; nor does the
existence of one automatically nullify the other, and if any of the
registrations should be considered unnecessary or superfluous, it would
be the notice of lis pendens [A. Doronila Resources Development Inc v
CA, 1988]
(2) ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE OF TITLE,
PAYMENT OF CAPITAL GAINS TAX, AND DOCUMENTARY TAX
REGISTRATION FEES
Must be accompanied by:
(a) Vendor’s duplicate certificate of title
(b) Payment of capital gains tax – 6% of the selling price or zonal value,
whichever is higher
(c) Documentary tax registration fees – 1.5% of the selling price or zonal
value, whichever is higher
Risk of Loss
RISK OF LOSS:
GENERAL RULE – ARTS . 1263, 1189
Res perit domino: Owner bears risk of loss
BASIS: Ownership is not transferred until delivery.
WHEN LOSS OCCURRED BEFORE PERFECTION Such loss is borne by
seller
WHEN LOSS OCCURRED AT TIME OF PERFECTION – ARTS. 1493 AND
1494
Loss must have occurred before the contract was entered into, without the
knowledge of both parties
EFFECT OF LOSS OF THE SUBJECT:
Total Loss - Contract is ineffective.
Because there can be no contract without an object
Partial Loss (Or loss which results in substantial change in character)
Buyer may withdraw from the contract OR Buy the remainder at a
proportionate price
Risk of Loss
(3) Rescission by giving the buyer notice of the election to rescind [Art. 1597]
Under this rule, rescission would bar an action on the contract because it means
cancellation of the contractual obligations between the parties. [Baviera]
(4) Special rule for sale of movables by installments – Recto Law [Arts. 1484, 1485]
Applies in cases of:
(a) Sale of movables in installment
1) The rule is intended to apply to sales of movables, the price of which is
payable in two or more installments, but not to straight-term sales where the price
is payable in full, after making a down payment because the law aims to protect
improvident buyers who may be tempted to buy beyond their means. [Levy
Hermanos vs. Gervacio, 1939]
(b) Lease of personal property with option to buy
1) When lessor has deprived the lessee of the possession or enjoyment of
the thing (Ex.: When lessor files a complaint for replevin against lessee)
2) Also applies when seller assigns his credit to someone else
Performance of Contract
DELIVERY OF THING SOLD
(1) SALE OF MOVABLES – ARTS. 1522, 1537, 1480
(a) When Quantity less than expected i. Buyer may reject all ii. Buyer
accepts with knowledge of seller’s inability to deliver the rest – buyer pays at
contract price iii. Buyer has used or disposed prior to knowing seller’s inability to
deliver the rest – buyer pays fair value
(b) Quantity more than expected i. If divisible, buyer may reject excess ii.
If indivisible, buyer may reject all
(c) Quality different or different goods i. If divisible, buyer may accept the
goods compliant with contract and reject those that are not ii. If indivisible,
buyer may reject all [Art. 1522]
(d) Sale of specific mass of goods i. In the sale of fungibles where the
measure or weight has not been agreed upon nor is there a fixed rate based
upon a measurement, the subject matter of the sale is a determinate object –
the specific mass; seller is merely required to deliver such mass even if actual
quantity falls short of parties’ estimate [Art. 1480]
(e) Delivery by installments i. By default, buyer is not bound to accept
delivery of goods by installments
Performance of Contract
Delivery by installments
1) By default, buyer is not bound to accept delivery of goods by installments
2) In a contract of delivery by installment to be paid by installment as well, delay or
breach may not necessarily mean breach of the entire contract; depending on the
circumstances, breach may be severable and the aggrieved party is entitled to
damages and not rescission. [Art. 1583]
(2) SALE OF IMMOVABLES – ARTS. 1539, 1543
(a) Sale at a fixed rate per unit of measure
1) Seller bound to deliver entire land
2) If the area is less than that stated, buyer may rescind or demand a
proportionate reduction in price
3) If a part of the land is not of the quality stated in the contract, buyer may
rescind or demand a proportionate reduction in price
4) Buyer may only avail of rescission if the area deficiency is 10% or more of
total area or if the inferior value of the part of the land exceeds 10% of the price
agreed upon. [Art. 1539] v. If the area turns out to be greater than that stated, buyer
may accept area included and reject the excess or accept all and pay a proportionate
increase in price [Art. 1540]
Performance of Contract
Period of Redemption
(a) No stipulation: 4 years from the date of contract
(b) When there is agreement: Period not to exceed 10 years
(c) General Rule: Period starts to run from the date of the execution of the
contract
(d) Exception: When the efficacy of the sale is subject to a suspensive
condition, period should be counted not from the date appearing on the
instrument, but from the date when the condition is fulfilled, marking the
consummation of the sale [Tolentino citing Manresa].
Additional 30 days for Repurchase The last paragraph of Art. 1606 giving the
vendor the right to repurchase within 30 days from the time of the rendition of
final judgment applies only where the nature and the character of the
transaction, whether as a pacto de retro or an equitable mortgage, was put in
issue before the court [Gonzales v. De Leon, 4 SCRA 33
EQUITABLE MORTGAGE
EXERCISE OF THE RIGHT TO REDEEM – ART. 1616
The seller can avail himself of the right of repurchase by returning to the buyer:
(a) the price of the sale
(b) the expenses of the contract and any other legitimate payments made by reason of
the sale
(c) the necessary and useful expenses made on the thing sold [Art.1616].
How redemption is exercised
(a) The vendor de retro must complete the repurchase before the expiration of the
redemption period [Panganiban v. Cuevas, 7 Phil 477].
(b) A sincere or genuine tender of payment is enough. The deposit of the amount of the
repurchase money with the Clerk of Court was simply and additional security [Legazpi v. Court
of Appeals, 1986]
(c) When tender of payment cannot be validly made because the buyer cannot be located,
it becomes imperative for the seller a retro to file a suit for consignation with the courts of the
redemption price [Catangcatang v. Legayada, 1978].
(d) If the offer or tender of payment for repurchase is refused, it is not necessary for the
vendor a retro to consign in court or make judicial deposit of the repurchase price [Rosales v.
Reyes, 25 Phil 495].
EQUITABLE MORTGAGE
Taxpayer in case of tax sale [Sec. 215, NIRC] 1 year from date of forfeiture
Judgment debtor successor–in- interest, or 1 year from the date of registration of the
creditor with subsequent lien, in case of certificate of sale
execution sale [Rule 39, Sec.27, ROC]
Debtor-mortgagor, successors-in- interest,
judicial/judgment creditor, any person having 1 year from the date of the sale
a lien on the property, in case of extrajudicial
foreclosure of mortgage [Act No. 3135. Sec.
6.]
Debtor-mortgagor in case of judicial 90 days from finality of judgment
foreclosure of real estate mortgage IF the
mortgagee is a bank or a banking institution.
[The General Banking Law of 2000]
Agricultural lessee w/o knowledge of sale of 2 years from the registration of the sale
EQUITABLE MORTGAGE
INSTANCES OF LEGAL REDEMPTION
(1) Redemption by Co-owners [Art. 1621]
A co-owner of a thing may exercise the right of redemption in case the shares of all
the coowners or any of them are sold to a third person
(a) “Third person” refers to all persons who are not heirs of the vendor, by will or
intestate succession
(b) The right is available not only to original coowners, but to those who had later
acquired the share of the co-owner
(c) But the right of redemption may be exercised by a co-owner only when part of
the community property is sold to a stranger. When the portion is sold to another co-
owner, the right does not arise because a new participant is not added to the co-
ownership [Fernandez v. Tarun, 2002]
If the price of the alienation is grossly excessive, the redemptioner shall pay only a
reasonable one.
Should two or more co-owners desire to exercise the right, they may also do so in
proportion to the share they may respectively have in the thing owned in common.
Rationale: Public Policy, since co-ownership is a hindrance to the development and
administration of the property. [Baviera]
EQUITABLE MORTGAGE
(2) Redemption by Adjoining Land-owners of rural land [Art. 1621]
The ff. Requisites must concur:
(a) A piece of rural land is alienated (b) Area does not exceed one hectare
When not applicable:
(a) The grantee does not own any rural land
(b) Adjacent lands are separated by brooks, drains, roads and other apparent
servitudes for the benefit of other estates
Order of preference if two or more wishes to exercise the right:
(a) Owner with smaller land area
(b) If same land area, then the one who first requested the redemption
What constitutes “rural” or “urban” is to be determined from the character of the
community or vicinity in which it is found, and NOT from the nature of the land itself
nor the purpose to which it is devoted. [Ortega v. Orcine, 1971]
EQUITABLE MORTGAGE
(3) Redemption by adjoining land-owners of urban land (applies only to small
portions of urban land) [Art. 1621]
(4) Redemption of Credit Available when it is sold while in litigation (From the
time the complaint is answered)
NOT available when the assignment is in favor of:
(a) Co-heir/co-owner of right assigned
(b) Creditor in payment of his credit (c) Possessor of a tenement or piece of
land which is subject to the right assigned
How exercised: reimburse the assignee for the:
(a) Price paid
(b) Judicial expenses incurred
(c) Interest on the price from date of payment
EQUITABLE MORTGAGE
(5) Under the Public Land Act
Coverage:
(a) Every conveyance of land acquired under a free patent or homestead
(b) The ownership of the land must have been transferred to another. If the
transaction is a mere promise to sell, there is no right yet to redeem
(c) This refers to conveyances made after the prohibited 5 years from the issuance
of the patent or grant
Period:
(a) Within 5 years from the date of conveyance
(b) If pacto de retro sale, the period to redeem cannot be less than 5 years
Who may redeem:
(a) General Rule: Applicant, widow, or heirs
(b) Exception: land is sold to another member of the family of the applicant, or his
direct descendant or heir (c) From whom: Subsequent purchasers
EQUITABLE MORTGAGE
6) Redemption in Foreclosure and Execution Sales
Who may redeem
In extra judicial foreclosure
(a) Debtor
(b) Successor in interest
(c) Judicial or judgment creditor of said debtor
In execution sales
(a) Judgment debtor
(b) Successor in interest
(c) Creditor having a lien on the property sold by attachment, judgment or
mortgage on the property subsequent to the judgment Period
EQUITABLE MORTGAGE
(