Business Law - Sales - 22 Jan 2020 (DGT) Final

NOTES ON
SALES
Atty. Daisy B. Garcia-

Tingzon
22 January 2020
Doha, Qatar
Sales – Outline
 CONCEPTS
 CHARACTERISTICS
 ESSENTIAL ELEMENTS
 Price
 FORMS OF CONTRACT OF
SALES
 RULES ON AUCTION SALE
 EARNEST MONEY VERSUS
OPTION MONEY
Notes on Sales - Atty. Daisy Garcia TIngzon 2
Sales - Outline
 OBLIGATIONS OF THE
VENDOR
 RIGHTS OF UNPAID SELLER
 OBLIGATIONS OF THE
VENDEE
 RULES ON PREFERENCE ON
DOUBLE SALE
 KINDS OF WARRANTIES
 EXTINGUISHMENT OF SALE
Sales - Outline
 KINDS OF REDEMPTION
 EQUITABLE MORTGAGE
 INSTALLMENT SALE OF
PERSONAL PROPERTY
(RECTO LAW)
 INSTALLMENT SALE OF REAL
PROPERTY (MACEDA LAW)

Sales - Definition
Contract of Sales –
 Is a contract whereby -
 seller/vendor
obligates himself to transfer the
ownership of and to deliver a
determinate thing to the
buyer/vendee
 buyer/vendee
obligates himself to pay therefor a
price certain in money or its
equivalent.

Sales - Characteristics
Characteristics of a Contract of Sale
1) Consensual –perfected by mere consent of the

parties
2) Principal – can exist by itself; not dependent

upon other contract
3) Bilateral – parties bound by reciprocal

obligations
4) Onerous – valuable considerations given by

parties to acquire rights
5) Commutative – parties exchange almost

equivalent values Notes on Sales - Atty. Daisy Garcia TIngzon 6
Sales – Essential Elements
Essential Elements of a Contract of Sale:
1) Consent of the contracting parties (refer to

contracts)
2) Subject matter which must be a determinate

thing
3) Cause which is the price certain in money

or its equivalent

Price - 3rd element of Sale
Price
o the sum stipulated as the equivalent
of the thing sold
Rules on Price:
1. Rule on certainty of price

2. Rule on gross inadequacy of price
3. Rule on simulated price

Rules on Price
1. Rule on certainty of price –
a) the price of the thing sold must be certain or

capable of being ascertained in money
(currency); or
b) its equivalent (promissory notes, checks,

etc.); otherwise the sale is void by reason of
the absence of meeting of minds between the
parties

Rules on Price
 The price is considered certain if:
a. The parties have agreed upon a definite
amount for the sale
Ex 1: S sold to B a specific wristwatch. The

parties agreed that B will pay P3,000 for
it.
 The price is certain because the parties have

agreed on a definite amount for the thing
sold.
 Fixing of the price can never be left to the

discretion of one of the contracting parties.
But if the price fixed by one of the parties is
accepted by the other, the sale is perfected.
Rules on Price
a. The parties have agreed upon a definite

amount for the sale
Ex 2: S sold his car to B at a price to be fixed by

S 10 days after their agreement. On the
10th day, S fixed the amount of P100,000.
 If B accepts the said price, the sale is perfected

(there is meeting of minds).
 If B does not accept, there is no sale.

Rules on Price
b. If it be certain with reference to

another thing certain
Ex1: S sells to B a certain ring the price

of which is the price of 20 bags of
Island Cement being sold at a certain
store.

Price - 3rd element of Sale
c. If the determination of the price is left to

the judgment of a specific person/persons
 If such person/persons are unable/unwilling to
fix the price - the contract shall be
inefficacious/ineffective unless parties
subsequently agree upon the price
 If the 3rd person acted in bad faith or by

mistake – courts may fix the price
 If such 3rd person is prevented from fixing the

price by the fault of the seller or buyer – party
not at fault has remedies against the party at
fault Notes on Sales - Atty. Daisy Garcia TIngzon 13
Rules on Price
2. Rule on gross inadequacy of price
a) This does not affect a contract of sale except

as it may indicate a defect in the consent or
that the parties really intended a donation or
some other act or contract.
Ex: S sells to B for P80,000 a certain car whose

actual value is P100,000.
 The fact that the price is inadequate does
not affect the validity of the contract.
 But if S agreed to sell the car at P80,000
because B used insidious words so that S
would sell the car for the said price, then S
may annul the sale on the ground of vitiated
consent due to fraud.
Rules on Price
3. Rule on simulated price
a) if the price is simulated, the sale is void, but

the act may be shown to have been in reality
a donation or some other act or contract
Ex: S & B entered into a contract where they

made it appear that S sold his car to B for
P100,000.
 In reality however, B did not give S P100,000.
 The sale here is void by reason of the
absence of an essential requisite which is the
price.
 The parties may, however, show that S really
donated the car to B, in which case, the
contract shall be one of donation, not a sale.
Sales versus dacion en pago
Sale Dacion en Pago
1) No pre-existing credit 1) There is pre-existing
credit
2) Creates obligations 2) Extinguishes obligations
3) Cause: 3) Cause:
Seller: Price Creditor: delivery of the
Buyer: Delivery of object given in place of
the object the credit
Debtor: Extinguishment
of the obligation
4) There is greater 4) There is less freedom in

freedom in fixing the fixing the price because
price there is pre-existing
credit
Sales versus Payment by
Cession
Sale Payment by Cession
1) There is no pre- 1) There are pre-existing
existing credit credits
2) Creates obligations 2) Extinguishes obligations
3) Cause: 3) Cause:
Seller: Price Debtor: extinguishment
Debtor: delivery of of the obligation
the object Creditor: assignment of
the things to be sold
4) There is greater 4) There is less freedom in
freedom in fixing the fixing the price because
price there is pre-existing credit
5) Ownership of the thing 5) Creditors do not become
is transferred to the the owners of the property
buyer assigned (just given the
right to sell the property
assigned) & apply the
proceeds
Notes on Sales to the claim 17
- Atty. Daisy Garcia TIngzon
Sales versus Barter
Sale Barter
1) Cause/consideration is 1) Cause/consideration is
money another thing
Rules to observe to determine whether the contract is
a sale or barter when the consideration is partly in
money & partly in another thing:
1) The contract is one of sale or barter depending
upon the manifest intention of the parties
2) If the intention of the parties does not clearly
appear:
a. The contract is one of barter if the value of the
thing given as part of the consideration exceeds
the monetary consideration
b. The contract is one of sale if the monetary
consideration is more than or equal to the value
of the thing given as part of the consideration
Sales versus Barter
Illustration:
Ex1: S & B entered into a contract whereby

S transferred his car to B in exchange
for P100,000 and a diamond ring.
 The contract is a sale if S & B intended it

to be so regardless of whether the value
of the diamond ring is more or less than
or equal to P100,000.

Sales versus Barter
Illustration:
 If such intention does not clearly appear,

the contract is barter if the value of the
diamond ring is more than the monetary
consideration of P100,000.
 If the value of the diamond ring is less

than or equal to P100,000, the contract
shall be one of sale.

Sale Contract to Sell
1) Title to the goods is 1) Title to the goods does
transferred to the buyer not pass to the buyer
upon delivery of the until some future time
thing sold when certain conditions
are complied with
2) The risk of loss is on 2) The risk of loss is on the
the buyer seller
Sale Agency to Sell

1) Title to the goods is 1) Title to the goods is not
transferred upon transferred to the agent
delivery of the thing upon delivery
sold
2) Buyer is required to pay 2) Agent is required to
the price turn over to the
principal the price of
the goods which he
received from the buyer
Earnest money versus Option
money
Earnest money
 money given as part of the purchase price &

as proof of the perfection of the contract
 something of value to show that the buyer
was really in earnest & given to the seller to
bind the bargain.
Option money
 the consideration paid for the purpose of

holding one to his promise to buy or sell a
determinate thing for a certain period of time

Earnest Money Option Money
1) Is part of the purchase 1) Is separate & distinct

price from the purchase price
2) Is paid upon the

2) Is paid for a sale that is
perfection of a contract
not yet to be perfected
of sale
Illustration on Earnest Money:
 B purchased the car of S for P100,000 payable w/in

30 days from the date of sale.
 To show that he is really in earnest, B gives S
P1,000 upon the execution of their agreement.
 There is here a perfected contract of sale between
B & S.
 Accordingly, on the due date for the payment of the
price, B will have to pay S the amount of P99,000
only
Contract of Sale - Forms
1) Subject to the provisions of the Statute of

Frauds or other applicable laws, contract of sales
may be:
a. In writing or
b. By word of mouth
c. Partly in writing & partly by word of mouth
d. May be inferred from the conduct of the
parties

Forms of Contract of Sale
2) Under the Statute of Frauds, the sale involving

the following must be in writing to be enforceable:
a. Sale of real property or of any interest

therein (regardless of the price)
b. Sale of goods, chattels or things in action the

price of which is P500 or more

Forms of Contract of Sale
3) Sale of a piece of land through an agent
a. the authority of the agent to sell a piece

of land must be in writing, otherwise the
sale is void

Rules - when Contract of Sale
is perfected
Contract of sale is perfected

 at the moment there is meeting of minds
upon the thing which is the object of the
contract & upon the price.
 from that moment - parties may

reciprocally demand performance,
subject to the provisions governing the law
on contracts

Rules on Auction Sale
1) Sale of separate lots by auction –
 each lot is the subject of a separate

contract of sale.
2) When sale by auction is perfected –

 when the auctioneer announces its
perfection:
a) by the fall of the hammer; or
b) in any other manner

Rights of parties before perfection:
1) any bidder may retract the bid -

 this is so because a bid is merely an
offer & an offer may be withdrawn at
anytime before acceptance
2) auctioneer may withdraw the goods from

the sale unless the auction has been
announced to be without reserve –
 withdrawal of goods is equivalent to a
rejection of the offer made by any
bidder
Rights of parties after perfection:
1) winning bidder cannot retract his bid nor

can the auctioneer withdraw the goods since
there is already a perfected contract
Rights of seller to bid –

Seller may bid at the auction provided the
following requisites are present:
a. right to bid must have been reserved
expressly by or on behalf of the seller
b. his right to bid must not be prohibited by
law or stipulation
c. notice must be given that the sale is
subject to a right to bid by or on behalf of
the seller Notes on Sales - Atty. Daisy Garcia TIngzon 30
Rules on preservation of, injury to or benefit
from the thing sold before or after perfection
Rules
1) Duty of seller to preserve thing after perfection
but before delivery -
 the seller is obliged to take care of the thing with the
diligence of a good father of a family unless the law
or the stipulation of the parties requires another
standard of care.
2)Right of the buyer to the fruits –

 buyer has a right to the fruits of the thing from the
time of the perfection of the contract, unless a
contrary stipulation has been agreed upon or a later
date is set by the parties when such right will accrue
such as when the obligation to deliver arises at some
future date.
 however, the buyer shall acquire no real right over
the thing & its fruits until the same have been
delivered to him. Notes on Sales - Atty. Daisy Garcia TIngzon 31
Rules
3) Loss of or injury to the thing –
a. Loss before perfection (deterioration) –

1. In case of complete loss, the sale is void
because of the absence of the object.
2. In case of partial loss, the buyer may choose

between:
a. withdrawal from the contract (rescission) and
b. demanding the remaining part & paying its
proportionate price

Rules
3) Loss of or injury to the thing –
b. Loss after perfection – two views:

1. 1st view – buyer bears the risk of loss (i.e., he
must pay the price)
2. 2nd view – seller bears the risk of loss (i.e.,

buyer is not obliged to pay the price)
Note:
Weight of authority is on the 2nd view because it is
consistent with the principle of “res perit domino” which
means that “the loss of property falls upon the owner.”

When ownership of thing sold
is transferred
 Ownership of the thing sold is transferred –
upon the actual or constructive delivery
of the thing sold
 Time when ownership is transferred is

important to determine the party who
shall bear the loss
 Parties may however stipulate that

ownership in the thing sold shall not pass
to the purchaser until he has fully paid
the price

Kinds of Delivery
Delivery or tradition –
o is the mode of acquiring ownership whereby
the object of the contract is placed in the
control & possession of the vendee,
either actually or constructively
Kinds of delivery or tradition:
1. Actual or real delivery

2. Constructive or legal delivery

Kinds of Delivery
1) Actual or real delivery –
o delivery by physically placing the thing
sold in the hands of the vendee (in case of
movables) or physically placing it in his
possession & control (in case of
immovables).
2) Constructive or legal delivery –

a. by legal formalities –
o when sale is made through a public
instrument, the execution thereof
shall be equivalent to the delivery of the
thing sold (applies to both movable &
immovable property)
Kinds of Delivery
2) Constructive or legal delivery –
b. symbolic delivery (traditio simbolica) –

o delivery that takes place by delivering
the keys of the place or depository
where the movable is stored or kept
c. Traditio longa manu –

o delivery of a movable by mere consent
or agreement of the parties if the thing
cannot be transferred to the possession of
the vendee at the time of sale

Kinds of Delivery
d. Traditio brevi manu –
o delivery that takes place when the
vendee is already in the possession
of the thing sold even before the sale
& thereafter continues in possession
thereof in the concept of an owner
(applies to movables only)
e. Traditio constitum possesorium –

o delivery that takes place when the vendor
continues in possession of the thing
sold after the sale but in another
capacity such as that of a lessee
(applies to movable & immovables
property) Notes on Sales - Atty. Daisy Garcia TIngzon 38
Kinds of Delivery
 Delivery of incorporeal property –
Incorporeal property
o is a legal right in intangible property which
have value but lacking in physical existence
o Examples:
patents, copyrights, lease or mortgage,
brand identity, licenses, intellectual
property & other property rights
a. By constructive tradition –
o delivery of incorporeal property by the
execution of a public instrument
Kinds of Delivery
 Delivery of incorporeal property –
b. Placing the titles of ownership in the

possession of the vendee (such as
delivering the stock of certificate covering
the shares of stock sold)
c. Use by the vendee of his rights, with

the consent of the vendor (such as when
the seller authorizes the buyer of shares of
stock to vote during the stockholders’
meeting)

Obligations of the Vendor/Seller
1)To transfer the ownership of the thing sold –
 ownership of the thing sold is acquired by the
vendee from the moment the thing is
delivered to him.
2) To deliver the thing sold –

 Vendor is bound to deliver the thing sold & its
accessions & accessories in the condition in
which they were upon the perfection of the
contract.
 All the fruits shall pertain to the vendee from

the day on which the contract is perfected.

Obligations of the Vendor/Seller
3) To warrant the thing sold –

 Vendor is liable for breach of warranty
against eviction & warranty against hidden
defects
4) To take care of the thing sold –

 w/ the diligence of a good father of a family
unless the law or the stipulation of the
parties requires another standard of care

Who bears the risk of loss
 General rule:
1) The goods remain at the seller’s risk
until the ownership is transferred to the
buyer (unless otherwise agreed upon by
the parties)
2) When the ownership of the goods is
transferred to the buyer, the goods are at
the buyer’s risk whether actual delivery
has been made or not.

 Exceptions:
1) where delivery of the goods has been
made to the buyer & ownership has been
retained by the seller merely to secure
performance by the buyer of his
obligation under the contract -
o the goods are at the buyer’s risk from
the time of such delivery
2) Where actual delivery has been delayed
through the fault of either the buyer or
seller –
o the goods are at the risk of the party
in default.
Thus, the general rule:
 If the thing is lost by fortuitous event -

o the risk is borne by the owner of the
thing at the time of the loss (res
perit domino)

Sale by a person who is not
the owner
 Fundamental rule:
 no one can give what he has not

 buyer gets only such rights as the seller had
 Thus, when the goods are sold by a person

who is not the owner thereof, the buyer
acquires no better title than the seller had,
except in the following cases:
1. When the sale is made under authority

or with the consent of the owner

Sale by a person who is not
the owner
2. When the owner is precluded by his
conduct from denying the seller’s
authority to sell
3. When the sale is made under the

provisions of any factory’s acts,
recording laws or any other provisions of
law enabling the apparent owner to
dispose of the goods as if he were the
true owner thereof (laws that have a
bearing on the validity of a sale made by
a person who is not the owner or agent
of the owner – i.e. P.D.1529 – Property
Registration Decree; Land Transportation
& Traffic Code, etc.).
Sale by a person who is not the
owner
3. When the sale is made under the provisions of
any factory’s acts, recording laws or any other
provisions of law enabling the apparent owner
to dispose of the goods as if he were the true
owner thereof (laws that have a bearing on the
validity of a sale made by a person who is not
the owner or agent of the owner – i.e. P.D.1529
– Property Registration Decree; Land
Transportation & Traffic Code, etc.).
4. When the sale is sanctioned by a statutory or

judicial authority – Ex: Art 559 of the Civil Code
– “possession of movable property acquired in
good faith is equivalent to title.”
owner
4. When the sale is sanctioned by a statutory
or judicial authority – Ex: Art 559 of the Civil
Code – “possession of movable property
acquired in good faith is equivalent to title.”
5. Where the sale is made at merchant’s

stores, fair or markets – to give stability to
business transactions
6. Where the seller has a voidable title w/c has

not been avoided at the time of sale
7. Where the seller subsequently acquires title

to the goods
owner of the thing sold
Problem 1:
1. S stole the ring of O & sells the same to B who does not
have any knowledge that the ring was stolen. Did B
acquire title to the ring?
A: No, because the title of S is that of a thief & B, the buyer

acquires no better title than S had over it.
O may therefore recover the ring from B w/o obligation
on his part to reimburse B.
Whoever loses a movable or has been unlawfully
deprived thereof may recover it from the person in
possession of the same w/o such possessor being
entitled to reimbursement, except if the acquisition in
good faith had been made in a public sale or auction.
Problem 2:
2. Suppose the ring found its way into a jewelry store & it was
from that jewelry store that B bought the ring in good faith.
(a) Did B acquire title to the ring?

(b) Can O recover the ring from B?
A: (a) Yes, because when the purchase is made from a

merchant’s store or fair or market, title to the thing is
transferred to the buyer notwithstanding that the seller
is not the owner thereof. This is because a contrary
ruling would be in restraint of trade.
(b) No, he cannot recover even if he offers to reimburse.
The right to reimburse is available to the owner only if
the acquisition was in a public sale.

Problems 3 & 4:
3) O authorized S to sell his ring. Thereafter, S sells the ring of

O to B. Did B acquire title to the ring?
A. Yes, because the sale was made under the authority of

the owner.
4) O gave his ring to S for safekeeping. Later, S sold the ring to

B in the presence of O but w/o O’s express authority. O did
not make any objection while S was selling the ring to B. Did
B acquire title to the ring?
A. Yes, because O is precluded by his conduct from denying

S’ authority to sell the ring.

owner of the
thing sold
Problem 5:
5) O, the owner of certain parcel of land, sold the same to B in a

public instrument. B, however, did not register the sale.
Subsequently, O sold the land to C who was not aware of the
previous sale to B and who registered the transfer of the land
to his name with the Register of Deeds. Who has a better
right to the land, B or C?
A. C has a better right to the land. While O was no longer the

owner of the land at the time he sold it to C, still O was the
apparent owner in the records of the Register of Deeds. This
enabled him to dispose of it as if he were the true owner
thereof. Also, in the sale of immovables to different vendees,
ownership thereof shall belong to the person who in good
faith first registered the sale in the Registry of Property.

When seller’s title to the goods is voidable
 If the seller’s title is voidable but the same
has not been avoided at the time of sale, the
buyer acquires a good title to the goods,
provided he buys them in good faith, for value,
and w/o notice of the seller’s defect of title.
Illustration:
S, a minor of 17 years, sold his wristwatch for P1,500 to B, 30
years old. The guardian of S was not aware of the sale;
hence, no action for annulment has yet been filed.
Subsequently, B sold the wristwatch to T, who acquired it in
good faith. Did T acquire title to the wristwatch?
A. Yes, because although the title of B was voidable, T

acquired the wristwatch in good faith, for value, and w/o
notice that the title of B was defective.

Unpaid Seller - concept
 Unpaid seller - one who has not been paid
or tendered the whole price or who has
received a bill of exchange or other negotiable
instrument as conditional payment & the
condition under which it was received has
been broken by reason of the dishonor of the
instrument, the insolvency of the buyer, or
otherwise.
 Basis of rights of unpaid seller – an unpaid

seller is allowed a lien & remedies because of
the inherent injustice of depriving him of goods
with which he has finally parted where it is
evident that he has not been or will not be paid
the price for them when it is due
 Notwithstanding that the ownership in the goods
may have passed to the buyer, the unpaid seller
may exercise the following rights:
1) Possessory lien – lien on the goods or right

to retain the goods while in possession of the
goods
2) Right of stoppage in transitu – right to

resume possession of the goods while in
transit in case the buyer is or becomes
insolvent; after seller has parted with the
possession of the goods
3) Right of resale
4) Right to rescind the sale
 Where ownership in the goods has not

passed to the buyer:
o the unpaid seller has (in addition to the

above) a right of withholding delivery
similar to & coextensive with his rights
of lien & stoppage in transitu where the
ownership has passed to the buyer

Rights of Unpaid Seller – right
of resale
Illustration:
S sold to B a tractor payable at P5,000 upon delivery & and
the balance of P7,000 w/in 60 days. B failed to take delivery
of the tractor & to pay the purchase price. S was forced to sell
the same to a third person for only P10,000.
Issue: Is B liable for the difference of P2,000?

Answer:
 Yes. In a contract of sale which is executory as to both
parties, the vendor is entitled to resell the goods if the
purchaser fails to take delivery & pay the purchase price.
 If he is obliged to sell for less than the contract price, he
holds the buyer for the difference; if he sells for as much or
more than the contract price, the breach of contract by the
original buyer is damnum absque injuria (damage without
injury). Notes on Sales - Atty. Daisy Garcia TIngzon 58
to rescind the sale
 Right of seller to rescind the sale –
 this right is available to an unpaid seller
only if he has either a right of lien or a right
to stay the goods in transitu & under either
of 2 situations when the following requisites
are present:
(1) Where the right to rescind is expressly

reserved in case the buyer should make
default
(2) Where the buyer delays in the payment
of the price for an unreasonable time
to rescind the sale
 Effect of rescission – the seller resumes
ownership of the goods
 While the seller shall not be liable to the

buyer upon the contract of sale, the buyer
may be made liable to the seller for
damages for any loss occasioned by the
breach of contract.

Obligations of the Vendee
(buyer)
 Principal obligations of the vendee/buyer:
1) To accept the delivery of the thing sold
2) To pay the price of the thing
 Pertinent rules on the obligations of the

vendee:
1) In a contract of sale, the vendor is not required
to deliver the thing sold until the price is paid
nor the vendee to pay the price before the
thing is delivered in the absence of an
agreement to the contrary
2) If stipulated, then the vendee is bound to
accept delivery & to pay the price at the time
& place designated Notes on Sales - Atty. Daisy Garcia TIngzon 61
(buyer)
 Pertinent rules on the obligations of the
vendee:
3) If there is no stipulation as to the time & place

of payment & delivery, the vendee is bound to
pay at the time & place of delivery
4) In the absence of stipulation, as to the place of
delivery, it shall be made wherever the thing
might be at the moment the contract was
perfected
5) If only the time for delivery of the thing sold
has been fixed in the contract, the vendee is
required to pay even before the thing is
delivered to him.
(buyer)
Illustrations:
1) S sold to B a specific refrigerator for P8,000. S is not
bound to deliver the refrigerator until payment by B;
neither is B required to pay P8,000 until the delivery
by S. From the moment either party performs his
obligation, the other must comply with his part
otherwise, he will be guilty of delay.
2) If it has been stipulated that B must accept the

refrigerator & pay the price at the house of S on October
10, then B is bound to accept delivery & to pay the price
on October 10 at the house of S.

(buyer)
Illustrations:
3) If there is no stipulation, as to the time & place of delivery &
S delivers the refrigerator at the house of B on October 10,
then B is bound to pay at the same time & place.
4) If there is also no stipulation, S is not required to deliver the
refrigerator at the house of B because in such case the place
of delivery shall be where the refrigerator was at the
moment the contract was perfected. So, if it was at the
house of S at that time, then that is the place of delivery and
also the place of payment.
5) If the obligation of S to deliver is subject to a period which
has not yet arrived, B is bound to pay even before the
refrigerator is delivered to him. On the other hand, if the
sale is on credit, B is entitled to its delivery though the price
be not first paid.

(buyer)
 Effect of acceptance of goods on seller’s
liability for breach of warranty
 General rule – seller is not discharged from

liability in damages or other remedy for breach
of warranty by acceptance of the goods
 Exceptions – seller is discharged in the

following cases:
1. if there is an agreement, whether express
or implied
2. If the buyer fails to give notice to the seller
of any breach of warranty w/n a reasonable
time after the buyer knows or ought to know
of such breach Notes on Sales - Atty. Daisy Garcia TIngzon 65
(buyer)
 Effect when buyer refuses to accept
delivery –
1. If refusal to accept delivery is

justified –
a) Buyer has no duty to return goods to the

seller unless otherwise agreed
b) Title to the goods does not pass on to the
buyer
c) He shall not be obliged to pay the price
d) If he constitutes himself as depositary of
(buyer)
 Effect when buyer refuses to accept
delivery –
2. If refusal to accept delivery is not

justified –
a) Title to the goods passes to the buyer

from the moment the goods are placed at
his disposal except in the following:
 Where there is a stipulation to the
contrary
 When seller has reserved the good’s
ownership as security for the
payment of the price
Double Sale - Rules of
preference
Movable property
 Ownership shall be transferred to the person
who first took possession of the property in good
faith.
 Possession may either be actual or constructive
Example 1:
1) S sold his computer to B who told S that he would obtain
delivery of the computer after 3 days. Before the third day,
S sold that same computer to X who immediately took
physical possession of the computer. X was not aware of the
previous sale to B. Neither was B aware of the sale made to
X because the sale to X had not yet taken place at the time
that he (B) purchased the computer. Who has better right to
the computer? B or X?
A. X, because he first took possession of the computer in good

faith.
Double Sale - Rules of preference
Movable property
Example 2:
2) S sold his ring to B in a public instrument. However, B
informed S that he would obtain actual delivery of the
ring after 3 days. The day after the sale to B, S sold
the same ring to X in a private instrument. X
immediately took actual possession of the ring. X was
not aware of the previous sale to B. Neither was B
aware of the sale to X at the time that he (B) purchased
the ring since the sale to X had not taken place. Who
has a better right to the ring? B or X?
A. B, because although he did not take actual possession of

the ring, the sale to him was in a public instrument, the
execution of which resulted in the constructive delivery
of the ring to him.
preference
Immovable property
1. First registrant in good faith –
 ownership shall belong to the person who

in good faith first registered the sale in the
Registry of Property
2. First possessor in good faith –
 If there was no registration, ownership

shall belong to the person who first took
possession thereof in good faith
(possession is either actual or constructive)
preference
Immovable property
3. Oldest title in good faith –
 In the absence of both registration &

possession, ownership shall belong to the
person who presents the oldest title in good
faith

preference
Immovable property
Example 1
1) On May 1, S sold his lot to X. The deed of sale was in
a private instrument. On May 3, S sold the same lot to
Y in a public instrument. On May 5, S sold again the
said lot to Z in a public instrument. Z immediately
registered the sale with the Register of Deeds. X, Y
and Z did not know of the sale made to the other two
and none of them took possession of the lot.
a) Who has a better right to the lot?

Answer: Z because he was the first to register the sale in
good faith.

Rules of preference in case of
double sale
Immovable property
Example
1) On May 1, S sold his lot to X. The deed of sale was in a
private instrument. On May 3, S sold the same lot to Y in
a public instrument. On May 5, S sold again the said lot to
Z in a public instrument. Z immediately registered the
sale with the Register of Deeds. X, Y and Z did not know
of the sale made to the other two and none of them took
possession of the lot.
b) Suppose Z did not register the sale or he registered the

sale but he was in bad faith (he was aware of one or both
of the previous sales), who has a better right to the lot?
Answer: Y will have a better right because he was the first to
take possession in good faith. Since the sale to him was
in a public instrument, the lot was deemed constructively
delivered to him.
preference
Immovable property
Example
1) On May 1, S sold his lot to X. The deed of sale was in a
private instrument. On May 3, S sold the same lot to Y in
a public instrument. On May 5, S sold again the said lot to
Z in a public instrument. Z immediately registered the
sale with the Register of Deeds. X, Y and Z did not know
of the sale made to the other two and none of them took
possession of the lot.
c) Suppose all the sales were in a private instrument and all

are in good faith, who has a better right to the lot?
c) Since no one registered the sale or took possession of the

lot, X shall be the owner because he has the oldest title.
Rules in Installments
 Delivery of goods in installments –
General Rule:
 Buyer is not bound to receive delivery of the

goods in installments unless otherwise
agreed (consistent with the rule that
payment must be complete). He is entitled
to the delivery of all the goods at the same
time & is bound to receive delivery of all the
goods at the same time.
 Buyer also has no right to pay the price in

installments; neither can he be required to
make partial payment.
Rules in Installments
 Right of buyer to examine goods before
accepting them
General rule:
 Buyer has the right to examine the goods
before accepting them.
Exceptions:
1) when there is an agreement to that effect
2) when there is a stipulation that the goods

shall not be delivered to the buyer until he
has paid the price such as when the goods
are marked with the words “collect on
delivery” – unless there is an agreement or
usage of trade permitting such examination
Conditions & Warranties
 Conditions –
 If the obligation of a party is subject to a

condition which is not fulfilled, the other
party may choose to do any of the following:
o Refuse to proceed with the contract – he
may also treat the non-performance of the
conditions as a breach of warranty
o Waive the performance of the condition
 Kinds of warranties:
1) Express warranties
2) Implied warranties
Kinds of Warranties
 Express warranties –
 refers to any affirmation of fact or any

promise by the seller relating to the thing
whose natural tendency is to induce the
buyer to purchase the same, & the buyer
purchases the thing relying on such
affirmation or promise
 Implied warranties –
 those that are inherent in a contract of sale
& accompany them unless they are
suppressed by the parties.

Kinds of Warranties
 Two kinds of Implied warranties –
1) warranty against eviction –

 seller’s implied warranty that he has the
right to sell the thing at the time when
ownership is to pass & that the buyer
shall from that time, have & enjoy the
legal & peaceful possession of the thing
2) warranty against hidden defects –

 seller’s implied warranty that the thing
is free from any hidden faults or defects,
or of any change or encumbrance not
declared or known to the buyer
Warranties against Eviction
 Eviction –
 the deprivation of the vendee of the whole or
a part of the thing sold by virtue of a final
judgment based on a right prior to the sale or
an act imputable to the vendor
 Requisites in order that the seller’s warranty

against eviction may be enforced:
1. There must be final judgment depriving the
vendee of the whole or part of the thing
sold
2. Deprivation is based on a right prior to the
sale or an act imputable to the vendor
3. The vendor must have been notified of the
suit for eviction at the instance of the
vendee Notes on Sales - Atty. Daisy Garcia TIngzon 80
Warranties against hidden defects
 Hidden defects –
 any hidden faults or defects, or of any change

or encumbrance not declared or known to the
buyer
 Requisites for enforcement of vendor’s

liability against hidden defects:
1. The defect must exist at the time of sale
2. The defect must be hidden
3. The action to enforce it must be made w/in
the period provided by law

Warranties against hidden defects
 Hidden defects –
 Requisites for enforcement of vendor’s

liability against hidden defects:
4. The defect must render the thing unfit for

the use for which it is intended or
diminishes its fitness for such use to such
an extent, that had the vendee been aware
thereof, he would not have acquired it or
would not have given a lower price for it.

Extinguishment of Sale
 Sales are extinguished:
1. By the same causes as all other obligations

2. By the various causes of extinguishment
such as:
a) cancellation of sale of personal property
payable in installments
b) resale of the goods by the unpaid seller
c) rescission of the sale by the unpaid
seller
d) rescission by the buyer in case of partial
Extinguishment of Sale
 Sales are extinguished:
1. By the same causes as all other obligations

2. By the various causes of extinguishment
such as: (continuation)
e) rescission by the buyer in case of breach
of warranty against hidden defects
f) rescission by the buyer of the sale of
animals with redhibitory defects
3. By redemption, whether conventional or

legal
Kinds of Redemption
 Conventional redemption –
 takes place (by voluntary agreement

between parties) as when the vendor
reserved the right to repurchase the thing
sold with the obligation to comply with the
following:
a. To return to the vendee:
1. the price of the sale
2. the expenses of the contract & any
other legitimate payments made by
reason of the sale; and
3. the necessary & useful expenses made
on the thing sold
b. to comply with other stipulations which
may have been agreed upon
Notes on Sales - Atty. Daisy Garcia TIngzon
85
Conventional Redemption
 Both real & personal property may be the
subject matter of sales with the right to
repurchase although there are certain
articles which are applicable only to
immovable
 Period of redemption –
a. If no period is stated in the agreement –
right may be exercised w/n 4 years from
date of the contract
b. If a period is stated in the agreement –

period cannot exceed 10 years

86
 Effect of failure to exercise right of
repurchase:
 Ownership is consolidated in the vendee

 However in case of real property, a judicial
order, after the vendor has been duly heard,
is required for the purpose o recording the
consolidation in the Registry of Property.
 Who may avail themselves of the right to

repurchase:
1) The vendor a retro (original seller)

2) Creditors of the vendor – but they can not
make use of the right of redemption against
the vendee (buyer) until they have
Examples:
a) S sold his lot to B reserving his right to
repurchase the same within 5 years. S himself
may repurchase the lot from B.
2) A, B & C are co-owners of a lot.

A sells his undivided interest of 1/3 on the lot
with right to repurchase to X.
Sometime later, B also sells his 1/3 undivided
interest to X with right to repurchase.
Thereafter, C also sells his 1/3 undivided
interest to X with right of repurchase.
A, B and C may each exercise his right to repurchase
only with respect to his share and no one of
them can be compelled by X to redeem the
whole property. 88
Legal Redemption
 Legal redemption –
 the right to be subrogated upon the same

terms & 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 the
ownership is transmitted by onerous title
(proceeds from operation of law)
 This right is not available if the transfer of

ownership is by gratuitous title.
89
Instances of Legal Redemption
 Instances of Legal redemption –
1) legal redemption by co-owner

2) Legal redemption by adjoining owner of
urban land
3) Legal redemption by adjoining owner of rural
land
 Legal redemption by co-owner
(a) A co-owner of a thing may exercise the

right of redemption in case the shares of all
the other co-owners or of any of them, are
sold to a third person
90
Legal Redemption by co-owner
 Purpose of the grant of right to co-
owners –
 This rule is such in order to reduce co-
owners since co-ownership is not
favored upon.
(b) If two or more co-owners desire to exercise

the right of redemption, they may only do
so in proportion to the share they may
respectively have in the thing owned in
common.

91
Legal Redemption by co-owner
Example:
 A, B, and C are co-owners of a lot. A sells

his 1/3 undivided interest in the property
to X.
 B or C may redeem the share of A from X.
 If both of them (B & C) desire to redeem

the share of A, each can redeem only 1/6
of the property (they halve the share of A).

Legal Redemption by adjoining
owner – rural land
 Legal redemption by adjoining owner of
rural land
(a) If a piece of rural land not exceeding 1

hectare is alienated, the adjoining owner
shall have the right of legal redemption
unless the grantee (buyer) does not own any
rural land.
(b) If two or more adjoining owners desire to

exercise the right of redemption:
1. the owners of the adjoining land of
smaller area shall be preferred
2. if both lands have the same area, the
one who first requested the redemption,
shall be preferred 93
owner – urban land
 When right is not available -

if adjacent lands are separated by brooks,
drains, ravines, roads & other apparent
servitudes for the benefit of other estates.
 Legal redemption by adjoining owner of

urban land
(a) if a small piece of urban land which was

bought for speculation has been resold, the
owner of the adjoining land has a right of
redemption at a reasonable price

 Right of pre-emption by adjoining owner
–
(a) If such small piece of urban land is about to
be resold, the adjoining owner shall have
the right of pre-emption at a reasonable
price (the adjoining owner shall be given
the right to buy the property before it is
offered to others)
(b) If 2 or more adjoining co-owners wish to

exercise the right of redemption or pre-
emption –
 preference to be given to the owner
whose intended use of the land appears
best justified
 Period to exercise of right of pre-

emption or redemption (owners of
adjoining urban lands) -
 to be exercised within thirty (30) days from

notice in writing by the prospective vendor,
or by the vendor
 the Deed of Sale shall not be recorded in
the Registry of Property unless
accompanied by an affidavit of the vendor
that he has given written notice thereof to
all possible redemptioners
 right of redemption of co-owners excludes
that of adjoining owners
Equitable Mortgage
 Equitable mortgage –
 It is one which, although lacks the formalities

of a mortgage, shows the real intention of the
parties to make the specific property, subject
of the contract, as a security for the
fulfillment of an obligation
 Essential requisites of Equitable

Mortgage:
1. The parties enter into what appears to be

a contract of sale
2. Their intention is to secure an existing
debt by way of a mortgage.
97
Equitable Mortgage
 The contract shall be presumed to be an
equitable mortgage, in any of the
following cases:
1) When the price of a sale with a right to
repurchase is unusually inadequate
2) When the vendor remains in possession as
lessee or otherwise
3) When the period for the exercise of the right
to repurchase is extended
4) When the purchaser retains for himself a
part of the purchase price 98
Equitable Mortgage
 The contract shall be presumed to be an
equitable mortgage, in any of the
following cases:
5) When the vendor binds himself to pay the
taxes on the thing sold
6) When the real intention of the parties is that
the transaction shall secure the payment of
a debt or the performance of any other
obligation
99
Equitable Mortgage
 In any of the above cases, any money, fruits
or other benefit to be received by the
vendee as rent or otherwise shall be
considered as interest which shall be
subject to the usury laws.
 In contracts of sale with the right to

repurchase, the real intention of the parties
is that the pretended purchase price is
money loaned (by the seller), and in order
to secure the payment of the loan, a
contract purporting to be a sale with pacto
de retro is drawn up.

Equitable Mortgage
 The reason for this requirement is that the
transaction may not be a genuine pacto de
retro but only an equitable mortgage. Thus,
the requirement provides additional
protection to debtors.
 Rule in case of doubt

 A contract purporting to be a sale with right
to repurchase shall be construed as an
equitable mortgage
 Right to reformation
 Parties may ask for reformation if they really
intended a mortgage but the instrument
states that the property is sold absolutely or
with a right of repurchase
101
Equitable Mortgage
 Common practice in these so-called

contracts of sale with pacto de retro is to
draw up another contract purporting to be
a lease of property to the supposed
vendor, who pays in money or in crops a
so-called rent.
 This simulated rent is in truth & in fact

interest on the money loaned.

Equitable Mortgage
Illustration:
Facts: S & B entered into a transaction which purported to
be a sale of a lot & building by S with the right to
repurchase.
Issue: Whether the contract was really an equitable
mortgage.
Held: The following circumstances were held as indicating
that the transaction was intended by the parties to secure
the payment of a debt:
(1) S did not intend in any way to sell his lot & building
(2) S was greatly alarmed when B registered the deed, and

had a new title issued in B’s name;
103
Equitable Mortgage
Illustration:
(3) The money that S borrowed from B was partly to finish
the construction of the building; and
(4) S made a strong argument to B when the document

was explained to him by his interpreter, but B
appeased S that it made no difference as he could get
back his property within 8 years if he had the money.
104
Equitable Mortgage
 In a contract of sale with pacto de retro, the
practice is to fix a relatively reduced price of
the property to make it easier for the vendor
a retro to redeem the property.
 Period to exercise right of redemption
1. No agreement/granting right of redemption –

there is no right of redemption since the
sale should be considered an absolute sale

Equitable Mortgage
 Period to exercise right of redemption
2. Agreement merely grants right – if the

parties agree only on the right to redeem on
the part of the vendor but there is a total
absence of express stipulation as to the time
w/n w/c the repurchase should be made,
then period of redemption shall be four (4)
years from the date of the contract
3. Definite period of redemption agreed upon –

if parties agreed on a definite period of
redemption, then the right to redeem must
be exercised w/n the period fixed provided it
does not exceed ten (10) years
Equitable Mortgage
4. Period of redemption agreed upon not
specified – if parties agreed that the vendor
shall have a right to redeem and they intend
a period which, however, is not specified,
then the redemption period is ten (10)
years.
5. Final judgment rendered that contract is

pacto de retro – from the time the final
judgment is rendered in a civil action on the
basis that the contract is a true sale with
right to repurchase, the vendor a retro has
thirty (30) days w/n which to exercise the
right to repurchase.
107
Equitable Mortgage
 Necessity of judicial order for recording of

consolidation of ownership –
 If real property is involved & the vendor
failed to redeem w/n the agreed period,
the vendee’s title becomes irrevocable.
 However, the consolidation of ownership

in the vendee shall not be recorded in the
Registry of property w/o a judicial order &
until after the vendor has been duly heard

Installment Sales of Personal
Property (Recto Law)
 General rule –
 In ordinary contract for sale of goods, the
buyer is not bound to receive delivery of the
goods in installments.
 Buyer is entitled to the delivery of all the
goods at the same time; he is bound to
receive delivery of all the goods at the same
time
 Buyer has no right to pay the price in
installments; neither can he be required to
make partial payments
 By agreement – the goods may be deliverable
by installments or the price payable in
 Where separate price has been fixed for each
installment –
 Where the contract provides for the delivery of
goods by installments & a separate price has been
agreed upon for each installment, it depends in
each case on the terms of the contract & the
circumstances of the case whether the breach
thereof is severable or not
 Where the breach effects whole contract –
 If the seller makes defective deliveries or the
buyer wrongfully neglects/refuses to accept
delivery or fails to pay any installment, the injured
party may sue for damages for breach of the
entire contract if the breach is so material as to
affect the contract as a whole
Installment Sales of Personal Property
(Recto Law)
 Where the breach is divisible –

 Where the breach is severable, it will
merely give rise to a claim for
compensation for the particular breach but
not a right to treat the whole contract as
broken.

Installment Sales of Personal Property
Illustration:
Facts: S agreed to deliver to B monthly for a period of
10 years a specified amount of water gas tar & coal gas
tar. S failed to make delivery up to a certain date and
“flatly refused to make any delivery under the
contract.”
Issue: May B sue for breach of the entire contract?
Held: Yes. As a general rule, a contract to do several
things at several times is divisible in nature, so as to
entitle the injured party to damages from time to time
for breaches as they occur. But an unqualified &
positive refusal to perform a contract, though
performance thereof is not yet due, may be treated as a
complete breach entitling & requiring the injured party
to recover all his damages in one suit.
Remedies of Vendor in Installment
Sales of Personal Property (Recto Law)
 Vendor of personal property payable in
installments may exercise any of the
following remedies:
1) elect fulfillment upon the vendee’s failure to
pay – applicable regardless of the number of
installments defaulted
2) if the vendee fails to pay two or more
installments – vendor may either:
a) cancel the sale – vendor shall return to the
buyer the sums received minus reasonable
rent but the parties may stipulate that the
installments or rents paid shall not be
returned provided the stipulation is not
unconscionable.
Remedies of Vendor in Installment
Sales of Personal Property (Recto
Law)
 Vendor of personal property payable in
installments may exercise any of the
following remedies:
b) foreclose the chattel mortgage, if chattel
mortgaged has been constituted on the thing
sold – there is no further action of the vendor
against the buyer to recover any unpaid balance
of the price; any agreement to the contrary is
void.
Note:
Remedies are alternative & are not exercised
cumulatively or successively & the election of one is a
waiver of the right to resort to the others.
Remedies of Vendor in Installment Sales
of Personal Property (Recto Law)
Illustrations:
Facts: S sold his only car for P100,000 payable in 10
equal monthly installments of P10,000 each. As security,
B executed a chattel mortgage on the car.
1) After paying the first 3 installments, B defaulted in the

payment of the 4th installment. What remedy/remedies
are available to S?
Answer:
S can exact fulfillment of the obligation, i.e. he can
demand payment of the installment defaulted only unless
there is an acceleration clause (the whole shall become
due upon default of the payment of an installment) or
that the default of the buyer is under such circumstance
as to make him lose the right to make use of the period
given to him.
Remedies of Vendor in
Illustrations:
Facts: S sold his only car for P100,000 payable in 10
equal monthly installments of P10,000 each. As
security, B executed a chattel mortgage on the car.
2) May S cancel the sale or foreclose the chattel

mortgage on the car?
Answer:
No, because the remedy of cancelling the sale or
foreclosing the chattel mortgage constituted on the
thing is available only when the default covers 2 or
more installments.

Remedies of Vendor in
Illustrations:
3) B defaulted in the payment of the fourth & fifth
installments and as a result, S foreclosed the chattel
mortgage constituted on the car. At the public
auction, the car was sold only for P50,000. Can S
recover the deficiency from B?
Answer:
No. Since S chose the 3rd remedy, he shall have no
further action against the buyer for any deficiency. This
is true even if there was agreement between S and B
that S could go after B should the purchase price at the
auction sale be less than the balance of the original
purchase price.

Sale of Real Property in
Installment (R.A. 6552 –
the Maceda Law)
 “Realty Installment Buyer Act” -
 to protect buyers of real estate on
installment payments against onerous &
oppressive conditions
 Transactions covered –
 sale or financing of real estate on
installment payments, including residential
condominium apartments, but excluding
industrial lots, commercial buildings & sales
to tenants under the Land Reform Law,
where the buyer has paid at least 2 years of
installments 118
Installment (R.A. 6552 –
the Maceda Law)
 Rights of the buyer -
1. Grace period to pay installment in case

of default –
(a) if at least 2 years of installments had

been paid at the time of default
(b) If less than 2 years of installments had

been paid at the time of default –
119
Installment (R.A.
6552 – the Maceda Law)
 if at least 2 years of installments had been
paid at the time of default -
(1) to pay, w/o additional interest, the unpaid

installments due w/n the total grace period
earned by him, w/c is fixed at the rate of 1
month grace period for every one year of
installments paid. This right shall be
exercised by the buyer only once in every 5
years of the life of the contract & its
extensions, if any

Installment (R.A.
 if at least 2 years of installments had
been paid at the time of default -
(2) If the contract is cancelled, he shall be

entitled to the refund of the cash surrender
value of the payments on the property
equivalent to 50% of the total payments
made, & after 5 years of installments, an
additional 5% every year but not to exceed
90% of the total payments made

Sale of Real Property in Installment
(R.A. 6552 – the Maceda
Law)
 When cancellation made – actual
cancellation shall take place after 30 days
from receipt by the buyer of the notice of
cancellation or the demand for rescission of
the contract by notarial act & upon full
payment of the cash surrender value to the
buyer.
Note: down payments, deposits or options on

the contracts shall be included in the
computation of the total number of
installments.

Installment
(R.A. 6552 – the Maceda Law)
 If less than 2 years of installments had
been paid at the time of default –
(1) the buyer shall be given a grace period of
not less than 60 days from the date the
installment become due to pay.
 When cancellation shall take place –

if the buyer fails to pay the installment due
upon the expiration of the grace period, the
seller may cancel the sale after 30 days from
the receipt by the buyer of the notice of
cancellation or the demand for rescission of
the contract by notarial act.
Installment (R.A.
2. Additional rights
(a) the buyer shall have the right during the
grace period before the cancellation of
the contract:
(1) to sell his rights to another by
notarial act
(2) to assign his rights to another, by
notarial act; or
(3) to reinstate the contract by updating
the account
124
Installment (R.A.
2. Additional rights
(b) To pay in advance any installment or the
full unpaid balance any time w/o interest
(c) To ask for the annotation of the full

payment of the purchase price in the
certificate of title covering the property
125
Installment Sale of Subdivision
Lots & Condominium (P.D. 987 )
“ Subdivision & Condominium Buyers’
Protective Decree”
 Rights of buyer in case of default –
 Rights of the buyer in the event of his failure

to pay installments due for reasons other
than the failure of the owner/developer to
develop the project shall be governed by R.A
6552 (Maceda Law)

Installment Sale of Subdivision Lots &
Condominium (P.D. 987 )
 Rights of buyer in case of default –
 No installment payment made by the buyer

shall be forfeited in favor of the
owner/developer when the buyer, after due
notice to the owner/developer, desists from
further payment due to the failure of the
owner/developer to develop the
subdivision/condominium project according to
the approved plans & w/n the time limit for
complying with the same.
 Such buyer may, at his option, be reimbursed

the total amount paid including amortization
interests but excluding delinquency interests,
with legal rate of interest
Don't
Don't Quit
Quit
Poem
Poem by
by Edgar
Edgar A.
A. Guest
Guest
When
When things
things go
go wrong,
wrong, as
as they
they sometimes
sometimes will, will,
when the road you're trudging seems all
when the road you're trudging seems all uphill, uphill,
when
when the
the funds
funds are
are low
low and
and the
the debts
debts areare high,
high,
and
and you
you want
want to
to smile
smile but
but you
you have
have to to sigh,
sigh,
when
when care
care is
is pressing
pressing you
you down
down aa bit
bit -- rest
rest ifif you
you must,
must,
but
but don't
don't you
you quit.
quit.
Life
Life is
is queer
queer with
with its
its twists
twists and
and turns.
turns.
As
As everyone
everyone of of us
us sometimes
sometimes learns.
learns.
And
And many a fellow turns about when he
many a fellow turns about when he
might have won had he stuck
might have won had he stuck it out. it out.
Don't
Don't give
give up up though
though the
the pace
pace seems
seems slow
slow --
you
you maymay succeed
succeed with
with another
another blow.
blow.
Often
Often the
the goal
goal isis nearer
nearer than
than itit seems
seems
to a faint and faltering
to a faint and faltering man;man;
often
often the struggler
the struggler hashas given
given up
up when
when he
he
might have captured the victor's
might have captured the victor's cup; cup;
and
and he learned
he learned too
too late
late when
when the
the night
night came
came down,
down,
how close he was to the golden
how close he was to the golden crown. crown.
Success
Success is is failure
failure turned
turned inside
inside out
out --
the
the silver
silver tint
tint of
of the
the clouds
clouds of
of doubt,
doubt,
and
and when you never can tell how close you
when you never can tell how close you are,
are,
itit may
may be be near
near when
when itit seems
seems afar;
afar;
so
so stick
stick to to the
the fight
fight when
when you're
you're hardest
hardest hithit --
it's
it's when
when things
things seem
seem worst,
worst,
you
you must
must notnot quit.
quit.
128
Notes on Sales - Atty. Daisy Garcia Tingzon
Thank
you!

Business Law - Sales - 22 Jan 2020 (DGT) Final

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NOTES ON

Atty. Daisy B. Garcia-

Notes on Sales - Atty. Daisy Garcia TIngzon 4

Notes on Sales - Atty. Daisy Garcia TIngzon 5

1) Consensual –perfected by mere consent of the

2) Principal – can exist by itself; not dependent

3) Bilateral – parties bound by reciprocal

4) Onerous – valuable considerations given by

5) Commutative – parties exchange almost

1) Consent of the contracting parties (refer to

2) Subject matter which must be a determinate

3) Cause which is the price certain in money

Notes on Sales - Atty. Daisy Garcia TIngzon 7

1. Rule on certainty of price

Notes on Sales - Atty. Daisy Garcia TIngzon 8

1. Rule on certainty of price –

a) the price of the thing sold must be certain or

b) its equivalent (promissory notes, checks,

Notes on Sales - Atty. Daisy Garcia TIngzon 9

Ex 1: S sold to B a specific wristwatch. The

 The price is certain because the parties have

 Fixing of the price can never be left to the

 The price is considered certain if:

a. The parties have agreed upon a definite

Ex 2: S sold his car to B at a price to be fixed by

 If B accepts the said price, the sale is perfected

 If B does not accept, there is no sale.

Notes on Sales - Atty. Daisy Garcia TIngzon 11

b. If it be certain with reference to

Ex1: S sells to B a certain ring the price

Notes on Sales - Atty. Daisy Garcia TIngzon 12

c. If the determination of the price is left to

 If the 3rd person acted in bad faith or by

 If such 3rd person is prevented from fixing the

a) This does not affect a contract of sale except

Ex: S sells to B for P80,000 a certain car whose

a) if the price is simulated, the sale is void, but

Ex: S & B entered into a contract where they

4) There is greater 4) There is less freedom in

Ex1: S & B entered into a contract whereby

 The contract is a sale if S & B intended it

Notes on Sales - Atty. Daisy Garcia TIngzon 19

 If such intention does not clearly appear,

 If the value of the diamond ring is less

Notes on Sales - Atty. Daisy Garcia TIngzon 20

Sale Agency to Sell

 money given as part of the purchase price &

 the consideration paid for the purpose of

Notes on Sales - Atty. Daisy Garcia TIngzon 22

1) Is part of the purchase 1) Is separate & distinct

2) Is paid upon the

Illustration on Earnest Money:

 B purchased the car of S for P100,000 payable w/in

1) Subject to the provisions of the Statute of

Notes on Sales - Atty. Daisy Garcia TIngzon 24

2) Under the Statute of Frauds, the sale involving

a. Sale of real property or of any interest

b. Sale of goods, chattels or things in action the

Notes on Sales - Atty. Daisy Garcia TIngzon 25

3) Sale of a piece of land through an agent

a. the authority of the agent to sell a piece

Notes on Sales - Atty. Daisy Garcia TIngzon 26