CHAPTER 4

OBLIGATIONS OF THE VENDOR

GENERAL PROVISIONS
Art. 1495. The vendor is bound to transfer the ownership of
and deliver, as well as warrant the thing which is the
object of the sale. (1461a)

PRINCIPAL OBLIGATIONS OF THE VENDOR

1. To transfer ownership of the determinate thing sold
2. To deliver the thing
3. To warrant against eviction and hidden defects
4. To take care of the thing, pending delivery with proper
diligence
5. To pay for the expenses for the execution and registration of
the deed of sale, unless there is a stipulation to the contrary.

DELIVERY is the concurrent transfer of two things – possession

and ownership.
Art. 1496. The ownership of the things 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.

WAYS OF EFFECTING DELIVERY:

1. By actual or real delivery occurs when the thing sold is under the control and
possession of the vendee.
2. By constructive or legal delivery- it is equivalent to actual delivery. It may be
effected in any of the following:
a) By the execution of public instrument
b) By symbolical tradition or tradition symbolica
c) By traditio longa manu- takes place by the mere consent or agreement (ART.1499)
d) By tradition brevi manu- vendee has already the possession of the thing sold by
virtue of another title. (ART.1499)
e) By tradition constitutum possessorium- opposite of brevi manu. It takes place
when the vendor continues in possession of the property sold not as owner but in
some other capacity. (ART.1500.)
f) By quasi-delivery or quasi-traditio (ART.1501)
3. By delivery in any other manner signifying an agreement that the possession
is transferred to the vendee.
OBLIGATIONS OF THE VENDOR

DELIVERY OF THE THING SOLD

Art. 1497. The thing sold shall be understood as delivered,
when it is placed in the control and possession of the vendee.

Tradition or delivery - is a derivative mode of acquiring

ownership by virtue of which one who has the right and
intention to alienate a corporeal thing, transmits it by virtue
of a just title to one who accepts the same.
Importance of tradition.
(1) Transfer of ownership.
(2) Liability in case of loss
(3) Right of vendor to claim payment.
(4) Consummation of contract.
(5) Enjoyment of thing sold
ART. 1498. When the sale is made through a public
instrument, the execution thereof shall be equivalent
to the delivery of the thing which is the object of the
contract, if from the deed the contrary does not
appear or cannot clearly be inferred. With regard to
movable property, its delivery may also be made by
the delivery of the keys of the place or depository
where it is stored or kept. (1463)

Public instrument is a document prepared by a notary

public in the presence of the parties who sign it before the
witnesses.
Execution of a public instrument or document.
(1) Possession transferred to buyer by notarized deed of conveyance
(2) Delivery presumptive only.- the mere execution of the deed of sale in a
public document is equivalent to the delivery of the property “if from the
deed the contrary does not appear or cannot clearly be inferred.” Therefore,
prior physical delivery or possession is not required
(3) Sale of thing not subject to control of vendor. — Symbolic delivery by the
execution of a public instrument is equivalent to actual delivery only where
the thing is subject to the control of the vendor and there is no impediment
that may prevent the passing of the property from the hands of the vendor
into those of the vendee
(4) Sale of registered land
(5) Possession of a part as constructive possession of whole. — Where apart
from the delivery de jure of a land sold by symbolic tradition resulting from
the execution of a public instrument of sale, the evidence shows that the
purchaser took actual possession of the considerable portion of the land
sold by the exercise of possessory acts of clearing the area of trees and of
cultivating the same through tenants, such possession and cultivation of a
part is logically and legally constructive possession of the whole
ART. 1499. The delivery of movable property
may likewise be made by the mere consent
or agreement of the contracting parties, if
the thing sold cannot be transferred to the
possession of the vendee at the time of the
sale, or if the latter already had it in his
possession for any other reason. (1463a)

ART. 1500. There may also be tradition

constitutum possessorium. (n)
Art. 1501. With respect to incorporeal property, the
provisions of the first paragraph of article 1498 shall
govern. In any other case wherein said provisions
are not applicable, the placing of the titles of
ownership in the possession of the vendee or the use
by the vendee of his rights, with the vendor's
consent, shall be understood as a delivery. (1464)

Delivery of incorporeal property

1. Execution of public instrument
2. The placing of the titles of ownership in the possession
of the vendee
3. The use by the vendee of his rights, with the vendor’s
consent
Art. 1502. When goods are delivered to the buyer "on sale or
return" to give the buyer an option to return the goods instead
of paying the price, the ownership passes to the buyer of
delivery, but he may revest the ownership in the seller by
returning or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a reasonable
time. (n)
When goods are delivered to the buyer on approval or on trial or
on satisfaction, or other similar terms, the ownership therein
passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or
does any other act adopting the transaction;
(2) If he does not signify his approval or acceptance to the
seller, but retains the goods without giving notice of rejection,
then if a time has been fixed for the return of the goods, on
the expiration of such time, and, if no time has been fixed, on
the expiration of a reasonable time. What is a reasonable time
is a question of fact. (n)
Sale on approval
There is no transfer of ownership notwithstanding delivery of the goods

Sale or return
the ownership passes to the buyer on delivery

“Sale or return” distinguished from sale on trial. The distinctions are the following:
(1) “Sale or return” is a sale subject to a resolutory condition, while sale on trial is
subject to a suspensive condition;
(2) “Sale or return” depends entirely on the will of the buyer, while sale on trial
depends on the character or quality of the goods;
(3) In “sale or return,” the ownership of the goods passes to the buyer on delivery
and subsequent return of the goods reverts ownership in the seller, while in
sale on trial, the ownership remains in the seller until the buyer signifies his
approval or acceptance to the seller; and
(4) In “sale or return,” the risk of loss or injury rests upon the buyer, while in sale
on trial, the risk still remains with the seller.
(5) Note: Article 1502 uses the phrase “on sale or return.” If the contract uses
instead the phrase “for sale or return,” the intention may be to enter into a
contract of agency.
Art. 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the
contract, reserve the right of possession or ownership in the goods until certain conditions have
been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the
delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to
the buyer.

Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his
agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the
goods. But, if except for the form of the bill of lading, the ownership would have passed to the
buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for
the purpose of securing performance by the buyer of his obligations under the contract.

Where goods are shipped, and by the bill of lading the goods are deliverable to order of the
buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the
seller thereby reserves a right to the possession of the goods as against the buyer.

Where the seller of goods draws on the buyer for the price and transmits the bill of exchange
and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange,
the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he
wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of
lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is
indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good
faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods,
although the bill of exchange has not been honored, provided that such purchaser has received
delivery of the bill of lading indorsed by the consignee named therein, or of the goods, without
notice of the facts making the transfer wrongful. (n)
Art. 1504. Unless otherwise agreed, the goods remain at
the seller's risk until the ownership therein is
transferred to the buyer, but when the ownership
therein is transferred to the buyer the goods are at the
buyer's risk whether actual delivery has been made or
not, except that:
(1) Where delivery of the goods has been made to the
buyer or to a bailee for the buyer, in pursuance of the
contract and the ownership in the goods has been
retained by the seller merely to secure performance by
the buyer of his obligations under the contract, 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 the goods are at the
risk of the party in fault. (n)