Sales PowerPoint in

Sales Law Review for Seniors PowerPoint Presentations and Lectures of Atty. Maria Christina S.
Sagmit
(PowerPoint Presentations in Bold Letters;
Additional Notes based on 4
th
Year Lectures not in Bold Letters )
PART ONE: CONCEPT OF SALE
CONCEPT
Article 145! Ci"il Code
B# t$e contract o% sale! one o% t$e contractin& 'arties
o(li&ates $i)sel% to trans%er t$e owners$i' o% and to
deli"er a deter)inate t$in&! and t$e ot$er to 'a# t$ere%or
a 'rice certain in )one# or its e*+i"alent,
A contract o% sale )a# (e a(sol+te or conditional,
Take note: A conditional sale is not the same as a contract to sell
Sale "s, Ot$er Contracts
Sale ", -onation
-onation . an act o% li(eralit# w$ic$ is &rat+ito+s in
c$aracter
/ain consideration: lo"e and a%%ection
A donation is a transfer of ownership of ones property wherein the
main consideration is not money !t is an act of liberality of the
donor
"ain consideration of a contract of sale: purchase price
Sale ", Barter
Barter . contract w$ere )a0orit# o% t$e consideration
is in t$e %or) o% anot$er t$in& and a )inor 'art o% t$e
consideration is in )one#
Sale ", Contract %or a Piece o% 1or2
Contract %or a 'iece o% wor2 . contractor (inds $i)sel%
to e3ec+te a 'iece o% wor2 %or t$e e)'lo#er! in consideration
o% a certain 'rice or co)'ensation,
test: t$in& is s'eciall#
)an+%act+red %or t$e c+sto)er and +'on $is s'ecial
order (-ino ", CA! 4+ne 56! 56617
Sale . i% t$e article is )an+%act+red or 'roc+red %or
t$e &eneral )ar2et in t$e ordinar# co+rse o%
(+siness! 18ET8ER T8E SA/E 9S ON 8AN- AT T8E
T9/E OR NOT
Test: t$in& is )an+%act+red in t$e ordinar# co+rse o%
(+siness (14:;7
This means that the #thin$ is specially manufactured for you%
&uantity will not determine if it is a piece of work
!f anyone can buyt it' it is a contract of sale !f it is e(clusi)e' it
is a contract for a piece of work !f it is displayed thereafter' it is a
sale
A*T!+L, -4./ A contract for the deli)ery at a certain price of an
article which the )endor in the ordinary course of his business
manufactures or procures for the $eneral market' whether the same
is on hand at the time or not' is a contract of sale' but if the $oods
are to be manufacture specially for the customer and upon his
speciar order' and not for the $eneral market' it s a contract for a
piece of work 0n)
,(ample: A cake which has a face of you on it 1 contract for a piece
of work
Sale ", Dacion en Pago
Dacion En Pago < -ation in 'a#)ent . 'ro'ert# is
alienated to t$e creditor in satis%action o% a de(t in )one#,
T$is contract is &o"erned (# t$e law on sales (15457
A*T!+L, -243 4ation in payment' whereby property is alienated to
the creditor in satisfaction of a debt in money' shall be $o)erned by
the law on sales 0n)
This is different from pactum commissorium' wherein there is
automatic appropriation Be able to distin$uish it dacion en pa$o
from pactum commissorium
SSS ", A=>P! A'ril ?6! 566
Dacion en pago is t$e deli"er# and trans)ission o%
owners$i' o% a t$in& (# t$e de(tor to t$e creditor as an
acce'ted e*+i"alent o% t$e 'er%or)ance o% t$e o(li&ation,
S'ecial )ode o% 'a#)ent w$ere t$e de(tor o%%ers
anot$er t$in& to t$e creditor w$o acce'ts it as e*+i"alent o%
'a#)ent o% an o+tstandin& de(t,
Parta2es in one sense o% t$e nat+re o% sale! t$at is t$e
creditor is reall# (+#in& t$e t$in& or 'ro'ert# o% t$e de(tor!
'a#)ent %or w$ic$ is to (e c$ar&ed a&ainst t$e de(tor@s de(t,
T$e essential ele)ents o% a contract o% sale! na)el#!
consent! o(0ect certain! and ca+se or consideration )+st (e
'resent,
9n its )odern conce't! w$at act+all# ta2es 'lace in
dacion en pago is an o(0ecti"e no"ation o% t$e o(li&ation
w$ere t$e t$in& o%%ered as an acce'ted e*+i"alent o% t$e
'er%or)ance o% an o(li&ation is considered as t$e o(0ect o%
t$e contract o% sale! w$ile t$e de(t is considered as t$e
'+rc$ase 'rice, 9n an# case! co))on consent is an essential
'rere*+isite! (e it sale or no"ation! to $a"e t$e e%%ect o%
totall# e3tin&+is$in& t$e de(t or o(li&ation,
*ules on sale will apply
SSS "s, A=P (A'ril ?6! 5667
FACTS: 5laintiff informed the 666 in writin$ of its premiums and loan
amorti7ation delin8uencies A9:5 chose to settle its obli$ation with the
666 throu$h dacion en pa$o A9:5 was' thereafter' directed by the
defendant to submit certain documents' such as Transfer +ertificate of Title'
Ta( 4eclaration co)erin$ the sub;ect lot' and the proposed subdi)ision plan'
which re8uirements A9:5 immediately complied 666 appro)ed A9:5s
proposal to settle its and 6,"!*A*As delin8uencies throu$h dacion en
pa$o A 4eed of Assi$nment has to be e(ecuted between the plaintiffs
and the defendant Because of 666 failure to come up with the re8uired
4eed of Assi$nment to effect said transfer' A9:5 prepared the draft and
submitted it to the <ffice of the =ice>5resident ?nfortunately' the defendant
failed to take any action on said 4eed of Assi$nment causin$ A9:5 to re>
submit it to the same office
"ore than a year after the appro)al of A9:5s proposal' defendant
sent the re)ised copy of the 4eed of Assi$nment to A9:5 @owe)er' the
amount of the plaintiffs obli$ation appearin$ in the appro)ed 4eed of
Assi$nment has ballooned alle$edly because of the additional interests and
penalty char$es assessed on plaintiffs outstandin$ obli$ation from April
2AA-' the date of appro)al of the proposal' up to Banuary 2AAC
A9:5 demanded for the wai)er and deletion of the additional
interests on the $round that delay in the appro)al of the deed and the
subse8uent delay in con)eyance of the property in defendants name was
solely attributable to the defendant 4efendant' howe)er' refused to accept
the payment throu$h dacion en pa$o' unless plaintiffs also pay the
additional interests and penalties bein$ char$ed
666 mo)ed for the dismissal of the complaint for lack of ;urisdiction
and non>e(haustion of administrati)e remedies
9SSAE: Dhich body has ;urisdiction to entertain a contro)ersy arisin$ from
the non>implementation of a dacion en pa$o a$reed upon by the parties as
a means of settlement of pri)ate respondents liabilities
8EL-: The action then is one for specific performance which case law
holds is an action incapable of pecuniary estimation fallin$ under the
;urisdiction of the *e$ional Trial +ourt' and does not fall within the
;urisdiction of the 6ocial 6ecurity +ommission
4acion en pa$o is the deli)ery and transmission of ownership of a
thin$ by the debtor to the creditor as an accepted e8ui)alent of the
performance of the obli$ation !t is a special mode of payment where the
debtor offers another thin$ to the creditor who accepts it as e8ui)alent of
payment of an outstandin$ debt The undertakin$ really partakes in one
sense of the nature of sale' that is the creditor is really buyin$ the thin$ or
property of the debtor' payment for which is to be char$ed a$ainst the
debtorEs debt As such' the essential elements of a contract of sale'
namely' consent' ob;ect certain' and cause or consideration must be
present !n its modern concept' what actually takes place in dacion en pa$o
is an ob;ecti)e no)ation of the obli$ation where the thin$ offered as an
accepted e8ui)alent of the performance of an obli$ation is considered as
the ob;ect of the contract of sale' while the debt is considered as the
purchase price !n any case' common consent is an essential prere8uisite'
be it sale or no)ation' to ha)e the effect of totally e(tin$uishin$ the debt or
obli$ation
The contro)ersy' instead' lies in the non>implementation of the
appro)ed and a$reed dacion en pa$o on the part of the 666 As such'
respondents filed a suit to obtain its enforcement which is' doubtless' a suit
for specific performance and one incapable of pecuniary estimation beyond
the competence of the +ommission
0Ba77ie 6arona )
Sale ", Lease
LeaseB +se o% t$in& %or a 'rice and ret+rn o% t$e sa)e a%ter
t$e 'eriod
Prepared by !a""ie M. Sarona #for $%Manresa &''(%&'')*
1
Sales Law Review for Seniors PowerPoint Presentations and Lectures of Atty. Maria Christina S. Sagmit
RENT TO O1N B 1$en t$e lease &i"es t$e lessee t$e
o'tion to (+# %or a s)all consideration at t$e end o% t$e ter)!
a%ter creditin& to t$e 'rice all t$e soBcalled rents! s+c$ contract
)a# (e re&arded a contract o% sale on install)ents, Articles
144 and 145 will a''l# (Filinvest v. CA, 178 SCRA 188)
F9L9NCEST CRE-9T "s, CA 1; SCRA 1
FACTS: 5ri)ate respondents spouses Bose and !luminada are
en$a$ed in the sale of $ra)el and ac8uired the ser)ices of 9emini
"otor 6ale to look for a rock crusher 5ri)ate respondents applied
for financial assitance from Filin)est +redit with the conditions that
the machinery be purchased in the name of Filin)est and that it be
leased for 2 years with option to purchase upon the termination of
the lease period to pri)ate respondent Filin)est foreclosed the
mort$a$ed property e(ecuted by pri)ate respondent 5ri)ate
respondent filed a complaint for the rescission of the contract of
lease
8EL-: +ontracts in the form of lease' either with an option for the
buyer to purchase for a small consideration at the end of the term
pro)ided all installments are paid or with stipulation that if the rent
throu$ht the term is paid' title shall )est in the lessee' are loans in
name only Contracts o% t$is nat+re are act+all# contracts o%
sale The intent of the parties to the sub;ect contract is for the so>
called rentals to be the installment payments ?pon completion of
payment' the machinery would become the property of the pri)ate
respondent
A*T!+L, -4G4 !n a contract of sale of personal property the price
of which is payable in instalments' the )endor may e(ercise any of
the followin$ remedies:
0-) ,(act fulfilment of the obli$ation' should the )endee fail to payH
02) +ancel the sale' should the )endees failure to pay co)er two
or more instalmentsH
0C) Foreclose the chattel mort$a$e on the thin$ sold' if one has
been constituted' should the )endees failure to pay co)er two or
more instalments !n this case' he shall ha)e no further action
a$ainst the purchaser to reco)er any unpaid balance of the price
Any a$reement to the contrary shall be )oid 0-434>A>a)
A*T!+L, -4G3 The precedin$ article shall be applied to contract
purportin$ to be leases of personal property with option to buy'
when the lessor has depri)ed the lessee of the possession or
en;oyment of the thin$
144 and 145
144 . relie% a"aila(le to an +n'aid install)ent seller
145B 144 is a''lica(le i% t$ere is lease o% 'ersonal
'ro'ert# and lessor de'ri"es t$e lessee o%
'ossession or en0o#)ent o% t$e S/
S+))ar#
SALE SALE SALE SALE SALE
4onation 9ratuitous
Barter +onsideration
mostly in
another thin$

5iece of
work
Thin$ is
specially
manufactured

Lease No transfer
of
ownership

Dacion en
Pago
Transfer of
ownership
to satisfy
obli$ation
PART T1O: ELE/ENTS OF A CONTRACT OF SALE
Essential Ele)ents
consent or )eetin& o% t$e )inds;
deter)inate s+(0ect )atter; and
'rice certain in )one# or its e*+i"alent
1st ele)ent: CONSENT
I Basic 're)ise: Onl# ca'acitated 'arties can &i"e t$eir
consent to (+# or sell
I Art, 14D : an# 'erson w$o is a+t$oriEed in t$e Ci"il
Code to o(li&ate $i)sel%
A*T!+L, -4GJ All persons who are authori7ed in the +ode to obli$ate
themsel)es' may enter into a contract of sale' sa)in$ the modifications
contained in the followin$ articles
Dhere necessaries are sold and deli)ered to a minor or other
person without capacity to act' he must pay a reasonable price
therefore Necessaries are those referred to in Article 2JA 0-43/ a)
9nca'acitated Parties
=ENERAL RALE: Contracts entered into (# )inors!
insane and de)ented 'ersons! dea%)+tes w$o cannot
read and write are CO9-ABLE (1?5;7
T$e "oida(le contract cannot (e a"oided (# ca'acitated
'art# (1?D;7
A*T!+L, -C2/ The followin$ cannot $i)e consent to a contract:
0-) ?nemancipated minorsH
02) !nsane or demented persons' and deaf>mutes who do not know
how to write 0-2.Ca)
A*T!+L, -CJ/ The action for the annulment of contracts may be
instituted by all who are thereby obli$ed principally or subsidiarily
@owe)er' persons who are capable cannot alle$e the incapacity of
those with whom they contractedH nor can those who e(erted
intimidation' )iolence' or undue influence' or employed fraud' or
caused mistake base their action upon these flaws of the contract
0-CA2a)
EFCEPT9ON: 9% contracts o% t$ese inca'acitated 'ersons
are %or NECESSAR9ES or t$ose t$in&s w$ic$ are
indis'ensa(le %or $is s+''ort! t$e# )+st 'a# a
reasona(le 'rice t$ere%or (14D7
Sale (etween s'o+ses
=eneral r+le: NO (Article 14D67! ANLESS
w$en a se'aration o% 'ro'ert# was a&reed +'on in t$e
)arria&e settle)ents; OR
w$en t$ere $as (een a 0+dicial se'aration o% 'ro'ert#
+nder Article 1D1 (w$en s'o+se is sentenced to a 'enalt#
w$ic$ carries wit$ it ci"il interdiction or $as (een declared
a(sent or in case o% le&al se'aration7
!f the spouses are separated only in fact' apply the $eneral rule that
they cannot sell property to each other
&: !f they are not le$ally separated' can they still sell to each otherE
A: Yes' if they $o for a )oluntary separation of property
Sale a&ainst '+(lic 'olic#
+ Persons w$o cannot ac*+ire (# '+rc$ase! e"en at a
'+(lic or 0+dicial a+ction t$e %ollowin& 'ro'ert#: (Article
14D17
&+ardians! 'ro'ert# o% $is ward
a&ents! 'ro'ert# w$ose ad)inistration or sale
$as (een entr+sted to $i)! +nless 'rinci'al
consents
e3ec+tors! 'ro'ert# o% state +nder
ad)inistration
'+(lic o%%icers > e)'lo#ees! 'ro'ert# o% t$e
state or s+(di"ision or =OCC entr+sted to
t$e) incl+des 4A-=ES and =OC@T EFPERTS
0may naisip na 8uestion si maam dito na part )
0+stices! 0+d&es! 'rosec+tin& attorne#s! cler2s
o% in%erior and s+'erior co+rts! ot$er o%%icers
and e)'lo#ees connected wit$ t$e
ad)inistration o% 0+stice! 'ro'ert# and ri&$ts in
liti&ation < le"ied wit$in t$eir 0+risdiction, S$all
a''l# to law#ers
STATAS: contracts "iolati"e o% Art, 14D6 > 14D1 are n+ll and
"oid (Medina v. Collector, 1 SCRA !")
A*T!+L, -4J- The followin$ persons cannot ac8uire by purchase'
e)en at a public or ;udicial auction' either in person or throu$h the
mediation of another:
0-) The $uardian' the property of the person or persons who may
be under his $uardianshipH
2
02) A$ents' the property whose administration or sale may ha)e
been entrusted to them' unless the consent of the principal
has been $i)enH
0C) ,(ecutors and administrators' the property of the estate
under administrationH
04) 5ublic officers and employees' the property of the 6tate or of
any subdi)ision thereof' or of any $o)ernment>owned or
controlled corporation' or institution' the administration of
which has been intrusted to themH this pro)ision shall apply
to ;ud$es and $o)ernment e(perts who' in any manner
whatsoe)er' take part in the saleH
03) Bustices' ;ud$es' prosecutin$ attorneys' clerks of superior and
inferior courts' and other officers and employees connected
with the administration of ;ustice' the property and ri$hts in
liti$ation or le)ied upon an e(ecution before the court within
whose ;urisdiction or territory they e(ercise their respecti)e
functionsH this prohibition includes the act of ac8uirin$ by
assi$nment and shall apply to lawyers' with respect to the
property and ri$hts which may be the ob;ect of any liti$ation
in which they may take part by )irtue of their profession
0.) Any others specially dis8ualified by law 0-43Ja)
Take note: #unless with consent% only applies to a$ent and principalH
others are considered null and )oid
6ale made in )iolation of Articles -4JA and -4J2
/E-9NA "s, COLLECTOR OF 9NTERNAL RECENAE and T8E
COART OF TAF APPEALS, (4an+ar# 5! 1D:17
FACTS: 5etitionin$ ta(payer Antonio "edina married Antonia
*odri$ue7 Before -J4.' the spouses had neither property nor
business of their own Later' howe)er' petitioner' ac8uired forest
concessions in the municipalities of 6an "ariano and 5alanan in
the 5ro)ince of !sabela From -J4. to -J4G' the lo$s cut and
remo)ed by the petitioner from his concessions were sold to
different persons in "anila throu$h his a$ent' "ariano <sorio
6ome time in -J4J' Antonia * "edina' petitionerKs wife'
started to en$a$e in business as a lumber dealer' and up to around
-J32' petitioner sold to her almost all the lo$s produced in his 6an
"ariano concession "rs "edina' in turn' sold in "anila the lo$s
bou$ht from her husband throu$h the same a$ent' "ariano <sorio
The proceeds were' upon instructions from petitioner' either
recei)ed by <sorio for petitioner or deposited by said a$ent in
petitionerKs current account with the 5hilippine National Bank
<n the thesis that the sales made by petitioner to his wife were
null and )oid pursuant to the pro)isions of Article -4JA of the +i)il
+ode of the 5hilippines 0formerly' Art -43G' +i)il +ode -GGJ)' the
+ollector considered the sales made by "rs "edina as the
petitionerKs ori$inal sales ta(able under 6ection -G. of the National
!nternal *e)enue +ode and' therefore' imposed a ta( assessment
on petitioner
5etitioner protested the assessmentH howe)er' respondent
+ollector insisted on his demand 5etitioner filed a petition for
reconsideration' re)ealin$ for the first time the e(istence of an
alle$ed premarital a$reement of complete separation of properties
between him and his wife' and contendin$ that the assessment for
the years -J4. to -J32 had already prescribed
5etitioner appealed to the +ourt of Ta( Appeals' which
rendered ;ud$ment upholdin$ a ta( assessment of the +ollector of
!nternal *e)enue e(cept with respect to the imposition of so>called
compromise penalties
9SSAE: Dhether or not the sales made by the petitioner to his wife
could be considered as his ori$inal ta(able sales
RAL9N=: +ircumstantial e)idence is a$ainst petitionerKs claim !t
appears that at the time of the marria$e between the petitioner and
his wife' they neither had any property nor business of their own' as
to ha)e really ur$ed them to enter into the supposed property
a$reement 6econdly' the testimony that the separation of property
a$reement was recorded in the *e$istry of 5roperty three months
before the marria$e' is patently absurd' since such a pre>nuptial
a$reement could not be effecti)e before marria$e is celebrated' and
would automatically be cancelled if the union was called off !n the
third place' despite their insistence on the e(istence of the ante>
nuptial contract' the couple' stran$ely enou$h' did not act in
accordance with its alle$ed co)enants !t was pro)ed that e)en
durin$ their ta(able years' the ownership' usufruct' and
administration of their properties and business were in the husband
And e)en when the wife was en$a$ed in lumber dealin$' and she
and her husband contracted sales with each other as aforestated'
the proceeds she deri)ed from her alle$ed subse8uent disposition
of the lo$s L incidentally' by and throu$h the same a$ent of her
husband' "ariano <sorio L were either recei)ed by <sorio for the
petitioner or deposited by said a$ent in petitionerKs current account
with the 5hilippine National Bank Fourth' althou$h petitioner' a
lawyer by profession' already knew that the primary reason why the
sales of lo$s to his wife could not be considered as the ori$inal ta(able
sales was because of the e(press prohibition found in Article -4JA of
the +i)il +ode of sales between spouses married under a community
systemH yet it was not until Buly of -J34 that he alle$ed' for the first
time' the e(istence of the supposed property separation a$reement
Finally' the 4ay Book of the *e$ister of 4eeds on which the a$reement
would ha)e been entered did not show that the document in 8uestion
was amon$ those recorded therein
5etitionerKs contention that the respondent +ollector cannot assail
the 8uestioned sales' he bein$ a stran$er to said transactions' is
likewise untenable The $o)ernment' as correctly pointed out by the
Ta( +ourt' is always an interested party to all matters in)ol)in$ ta(able
transactions and' needless to say' 8ualified to 8uestion their )alidity or
le$itimacy whene)er necessary to block ta( e)asion +ontracts
)iolati)e of the pro)isions of Article -4JA of the +i)il +ode are null and
)oid 0?y 6ui 5in )s +antollas' /A 5hil 33H ?y +o8ue )s 6ioca' 43
5hil 4C) Bein$ )oid transactions' the sales made by the petitioner to
his wife were correctly disre$arded by the +ollector in his ta(
assessments that considered as the ta(able sales those made by the
wife throu$h the spousesK common a$ent' "ariano <sorio !n
upholdin$ that stand' the +ourt below committed no error
0Ba77ie 6arona )
5nd ELE/ENT: SAB4ECT /ATTER
/AST BE:
5 e3istin&! or it )a# (e %+t+re or e"en contin&ent (Art,
14:57;
5 licit (Art, 145D7; and
5 deter)inate or at least deter)ina(le (Art, 14:67,
A*T!+L, -4.2 The $oods which form the sub;ect of a contract of sale
may be either e(istin$ $oods' owned or possessed by the seller' or
$oods to be manufactured' raised' or ac8uired by the seller after the
perfection of the contract of sale' in this Title called Mfuture goodsM
There may be a contract of sale of $oods' whose ac8uisition by
the seller depends upon a contin$ency which may or may not happen
0n)
A*T!+L, -43J The thin$ must be licit and the )endor must ha)e a
ri$ht to transfer the ownership thereof at the time it is deli)ered 0n)
A*T!+L, -4.A A thin$ is determinate when it is particularly
desi$nated or physical se$re$ated from all other of the same class
The re8uisite that a thin$ be determinate is satisfied if at the time
the contract is entered into' the thin$ is capable of bein$ made
determinate without the necessity of a new or further a$reement
between the parties 0n)
EF9ST9N=
+ S/ )+st (e e3istin&! %+t+re t$in& or (ased on a
contin&enc#
FATARE: -o not "iew as to '$#sical e3istence
or nonBe3istence
BAT c$ec2 i% Science and tec$nolo&# will allow
said S/ to co)e into e3istence
t$in&s s+(0ect to a resol+tor# condition )a#
(e a "alid S/
e,&, 'ro'ert# in a reser"a troncal! S/ +nder
le&al rede)'tion
E#ptio Rei Speratae v. E#ptio Spei
E)'tio Rei . s+(0ect $as 'otential e3istence and t$e
+ncertaint# lies in t$e *+antit# or *+alit# o% t$e t$in&, 9%
t$e t$in& co)es into e3istence! t$ere is a CAL9-
contract
E)'tio S'eiB s+(0ect )atter is a "ain $o'e or
e3'ectanc# and t$e +ncertaint# lies in t$e e3istence o%
t$e t$in&, T$e contract is CO9-
L9C9T
+ S/ )+st (e L9C9T: (Art, 1?4;7
licit . not o+tside t$e co))erce o% )an!
incl+des all ri&$ts w$ic$ are trans)issi(le
sale o% %+t+re in$eritance! sale o% ani)als
s+%%erin& %ro) conta&io+s disease ARE "oid
A*T!+L, -C4/ All thin$s which are not outside the commerce of men'
includin$ future thin$s' may be the ob;ect of a contract All ri$hts which
are not intransmissible may also be the ob;ect of contracts
No contract may be entered into upon future inheritance e(cept in
cases e(pressly authori7ed by law
3
All ser)ices which are not contrary to law' morals' $ood customs'
public order or public policy may likewise be the ob;ect of a contract
0-2/-a)
-ETER/9NATE
+ S/ )+st (e deter)inate OR at least deter)ina(le
(Art, 14:67
deter)inate . 'artic+larl# desi&nated or
'$#sicall# se&re&ated %ro) all ot$ers o% t$e
sa)e class
-ETER/9NABLE . ca'a(le o% (ein& )ade
deter)inate wit$o+t t$e necessit# o% a new
or %+rt$er a&ree)ent (etween t$e 'arties

-ETER/9NATE: &eneric o(0ects! +ndi"ided
interested o% a sole owner (14:?7! +ndi"ided
s$are o% a s'eci%ic )ass (14:47
A*T!+L, -4.C The sole owner of a thin$ may sell an undi)ided
interest therein 0n)
A*T!+L, -4.4 !n the case of fun$ible $oods' there may be a sale
of an undi)ided share of a specific mass' thou$h the seller
purports to sell and the buyer to buy a definite number' wei$ht
or measure of the $oods in the mass' and thou$h the number'
wei$ht or measure of the $oods in the mass is undetermined
By such a sale the buyer becomes owner in common of such
a share of the mass as the number' wei$ht or measure
bou$ht bears to the number' wei$ht or measure of the mass
!f the mass contains less than the number' wei$ht or measure
bou$ht' the buyer becomes the owner of the whole mass and
the seller is bound to make $ood the deficiency from $oods of
the same kind and 8uality' unless a contrary intent appears
0n)
-eter)ina(le
Atilano v. Atilano . wron& desi&nation o% a lot does
not "itiate t$e sale since t$e 'arties (e%ore enterin&
into t$e contract saw t$e act+al settin& and )etes
and (o+nds o% t$e s+(0ect )atter
AT9LANO "s, AT9LANO (/a# 51! 1D:D7
FACTS: !n -J-.' ,ulo$io Atilano ! ac8uired' by purchase from one
9erardo =illanue)a' lot No 3C3 of the then municipality of
Namboan$a cadastre !n -J2A he had the land subdi)ided into fi)e
parts ,ulo$io Atilano !' for the sum of 5-3AAA' e(ecuted a deed of
sale co)erin$ lot No 3C3>, in fa)or of his brother ,ulo$io Atilano !!'
who thereupon obtained transfer certificate of title No C-2J in his
name Three other portions were likewise sold to other persons' the
ori$inal owner' ,ulo$io Atilano !' retainin$ for himself only the
remainin$ portion of the land ?pon his death the title to this lot
passed to Ladislao Atilano
<n 4ecember .' -J32' ,ulo$io Atilano !! ha)in$ become a
widower upon the death of his wife Luisa Bautista' he and his
children obtained transfer certificate of title No 4GGJ o)er lot No
3C3>, in their names as co>owners They had the land resur)eyed
so that it could properly be subdi)idedH and it was then disco)ered
that the land they were actually occupyin$ on the stren$th of the
deed of sale e(ecuted in -J2A was lot No 3C3>A and not lot 3C3>,'
as referred to in the deed' while the land which remained in the
possession of the )endor' ,ulo$io Atilano !' and which passed to his
successor' defendant Ladislao Atilano' was lot No 3C3>, and not
lot No 3C3>A
The heirs of ,ulo$io Atilano !! ' filed the present action in the
+ourt of First !nstance of Namboan$a' alle$in$' inter alia' that they
had offered to surrender to the defendants the possession of lot No
3C3>A and demanded in return the possession of lot No 3C3>,' but
that the defendants had refused to accept the e(chan$e
The trial court rendered ;ud$ment for the plaintiffs on the sole
$round that since the property was re$istered under the Land
*e$istration Act the defendants could not ac8uire it throu$h
prescription
9SSAE: Dhether or not the heirs of Atilano !! are entitled to Lot No
3C3>,' the bi$$er lot
RAL9N=: The lo$ic and common sense of the situation lean hea)ily
in fa)or of the defendantsK contention Dhen one sells or buys real
property L a piece of land' for e(ample L one sells or buys the
property as he sees it' in its actual settin$ and by its physical metes
and bounds' and not by the mere lot number assi$ned to it in the
certificate of title !n the particular case before us' the portion
correctly referred to as lot No 3C3>A was already in the possession
of the )endee' ,ulo$io Atilano !!' who had constructed his residence
therein' e)en before the sale in his fa)or e)en before the subdi)ision of
the entire lot No 3C3 at the instance of its owner' ,ulo$io Atillano ! !n
like manner the latter had his house on the portion correctly identified'
after the subdi)ision' as lot No 3C3>,' e)en addin$ to the area thereof
by purchasin$ a portion of an ad;oinin$ property belon$in$ to a
different owner The two brothers continued in possession of the
respecti)e portions the rest of their li)es' ob)iously i$norant of the
initial mistake in the desi$nation of the lot sub;ect of the -J2A until
-J3J' when the mistake was disco)ered for the first time
The mistake did not )itiate the consent of the parties' or
affect the )alidity and bindin$ effect of the contract between them The
new +i)il +ode pro)ides a remedy for such a situation by means of
reformation of the instrument This remedy is a)ailable when' there
ha)in$ been a meetin$ of the funds of the parties to a contract' their
true intention is not e(pressed in the instrument purportin$ to embody
the a$reement by reason of mistake' fraud' ine8uitable conduct on
accident !n this case' the deed of sale e(ecuted in -J2A need no
lon$er reformed The parties ha)e retained possession of their
respecti)e properties conformably to the real intention of the parties to
that sale' and all they should do is to e(ecute mutual deeds of
con)eyance 0Ba77ie 6arona )
-eter)ina(le des'ite lac2 o% s'eci%ic *+antit#
$ational %rains v. &AC . s+(0ect )atter was t$e rice to
(e $ar"ested %ro) seller@s %ar)land
T$e %act t$at t$e *+antit# is not deter)inate s$all not (e
an o(stacle to t$e e3istence o% t$e contract 'ro"ided it
is 'ossi(le to deter)ine t$e sa)e wit$o+t t$e need %or a
%+rt$er a&ree)ent
NAT9ONAL =RA9NS AAT8OR9TG! CABAL "s, 9AC! SOR9ANO
(/arc$ ! 1DD7
FACTS: National 9rains Authority 0now National Food Authority' NFA
for short) is a $o)ernment a$ency wherein one of its incidental
functions is the buyin$ of palay $rains from 8ualified farmers
6oriano offered to sell palay $rains to the NFA' throu$h Dilliam
+abal' the 5ro)incial "ana$er of NFA stationed at Tu$ue$arao'
+a$ayan 5ri)ate respondent 6orianoKs documents were processed
and accordin$ly' he was $i)en a 8uota of 2'.4A ca)ans of palay The
8uota noted in the FarmerKs !nformation 6heet represented the
ma(imum number of ca)ans of palay that 6oriano may sell to the NFA
!n the afternoon of Au$ust 2C' -J/J and on the followin$ day'
Au$ust 24' -J/J' 6oriano deli)ered .CA ca)ans of palay The palay
deli)ered durin$ these two days were not reba$$ed' classified and
wei$hed when 6oriano demanded payment of the .CA ca)ans of
palay' he was informed that its payment will be held in abeyance since
"r +abal was still in)esti$atin$ on an information he recei)ed that
6oriano was not a bona tide farmer and the palay deli)ered by him was
not produced from his farmland but was taken from the warehouse of a
rice trader' Ben de 9u7man
+abal wrote 6oriano ad)isin$ him to withdraw from the NFA
warehouse the .CA ca)ans 6oriano deli)ered statin$ that NFA cannot
le$ally accept the said deli)ery on the basis of the subse8uent
certification of the BA,O technician' Napoleon +allan$an that 6oriano
is not a bona fide farmer
6oriano insisted that the palay $rains deli)ered be paid @e then
filed a complaint for specific performance andPor collection of money
with dama$es The trial court rendered ;ud$ment orderin$ petitioner
National Food Authority' its officers and a$ents to pay respondent
6oriano The !A+ upheld the findin$s of the trial court
9SSAE: Dhether or not there was a contract of sale in the case at bar
RAL9N=: The petition is not impressed with merit !n the case at bar'
6oriano initially offered to sell palay $rains produced in his farmland to
NFA Dhen the latter accepted the offer by notin$ in 6orianoKs
FarmerKs !nformation 6heet a 8uota of 2'.4A ca)ans' there was already
a meetin$ of the minds between the parties The ob;ect of the contract'
bein$ the palay $rains produced in 6orianoKs farmland and the NFA
was to pay the same dependin$ upon its 8uality The fact that the
e(act number of ca)ans of palay to be deli)ered has not been
determined does not affect the perfection of the contract Article -C4J
of the New +i)il +ode pro)ides: M The fact that the 8uantity is not
determinate shall not be an obstacle to the e(istence of the contract'
pro)ided it is possible to determine the same' without the need of a
new contract between the partiesM !n this case' there was no need for
NFA and 6oriano to enter into a new contract to determine the e(act
number of ca)ans of palay to be sold 6oriano can deli)er so much of
his produce as lon$ as it does not e(ceed 2'.4A ca)ans
The acceptance referred to which determines consent is the
acceptance of the offer of one party by the other and not of the $oods
deli)ered as contended by petitioners
The reason why NFA initially refused acceptance of the .CA
ca)ans of palay deli)ered by 6oriano is that it 0NFA) cannot le$ally
accept the said deli)ery because 6oriano is alle$edly not a bona fide
4
farmer The trial court and the appellate court found that 6oriano
was a bona fide farmer and therefore' he was 8ualified to sell palay
$rains to NFA 0Ba77ie 6arona )
9lle&al Sale d+e to 9lle&al S+(0ect /atter
narcotics (RA :4557
wild (ird < )a))al (Art No, 5D567
rare wild 'lants (Art No, ?D?7
'oisono+s 'lants < %r+its (RA 157
d#na)ited %is$ (RA 457
&+n'owder and e3'losi"es (Act No,55557
%irear)s and a))+nitions (P-HD7
?rd ELE/ENT: PR9CE
+ Price . s+) sti'+lated as t$e e*+i"alent o% t$e t$in&
sold and also e"er# incident ta2en into consideration
%or t$e %i3in& o% t$e 'rice '+t to t$e de(it o% t$e (+#er
and a&reed to (# $i)
Price )+st (e:
+ real
+ in )one# or its e*+i"alent
+ certain or ascertaina(le at 'er%ection (#:
+ a t$ird 'erson
+ t$e co+rts
+ re%erence to a de%inite
da#<'artic+lar
e3c$an&e or )ar2et
+ re%erence to anot$er t$in& certain
+ ne"er (# one 'art# to t$e
contract (CO9-7

E%%ect i%:
T$ere is no 'rice . "oid contract %or lac2 o%
consideration
Mapalo v. Mapalo . illiterate %ar)ers si&ned a
contract w$ic$ 'ro"ided %or P566 consideration w$en
t$e a)o+nt was ne"er 'aid, Since t$ere was no real
consideration! t$e contract is CO9-
/APALO CS, /APALO
FACTS: 6ps "i$uel and +andida "apalo' 0illiterate) farmers' were
re$istered owners of a -'.C3 s8uare>meter residential land in
"anaoa$' 5an$asinan with <+T No 4.3AC They decided to donate
the eastern half of the property to "a(imo 0brother of "i$uel) who
was about to $et married The <+T was deli)ered As a result
howe)er' they were decei)ed into si$nin$ a deed of absolute sale
o)er the entire land in his 0ma(imo) fa)or Their si$nature thereto
were procured by fraud' that is' they were made to belie)e by
"a(imo "apalo and the attorney who acted as notary public who
MtranslatedM the document' that the same was a deed of donation in
"a(imoKs fa)or co)erin$ one half 0the eastern half) of their land
Althou$h the document of sale stated a consideration of Fi)e
@undred 053AAAA) 5esos' the aforesaid spouses did not recei)e
anythin$ of )alue for the land
Followin$ the e(ecution of the afore>stated document the
spouses "i$uel "apalo and +andida &uiba immediately built a
fence of permanent structure in the middle of their land se$re$atin$
the eastern portion from its western portionNot known to them'
meanwhile' "a(imo' on "arch -3' -JCG' re$istered the deed of sale
in his fa)or and obtained in his name Transfer +ertificate of Title
o)er the entire land <n <ctober 2A' -J3-' he sold for 52'3AAAA
said entire land in fa)or the Narcisos' which was subse8uently
re$istered and a T+T issued in their name o)er the entire property
The Narcisos took possession only of the eastern portion of
the land in -J3-' after the sale <n February /' -J32 they filed suit
in the +ourt of First !nstance of 5an$asinanto be declared owners
of the entire landH for possession of its western portionH for
dama$esH and for rentals !t was brou$ht a$ainst the "apalo
spouses as well as a$ainst Floro 9uieb and *osalia "apalo 9uieb
who had a house on the western part of the land with the consent of
the spouses "apalo
+F! ruled in fa)or of spouses "apalo but +A re)ersed the
decision upon appeal' solely on the $round that the consent of the
"apalo sps to the deed of sale ha)in$ been obtained by fraud' was
)oidable' not )oid ab initio @ence' the action to annul the same had
lon$ prescribed !t reckoned said notice of the fraud from the date of
re$istration of the sale on "arch -3' -JCG The +ourt of First
!nstance and the +ourt of Appeals are therefore unanimous that the
spouses "apalo and &uiba were definitely the )ictims of fraud !t
was only on prescription that they lost in the +ourt of Appeals
9SSAE: DPN the sale 0as to the western portion) was )oid or )oidable
0Appelants contention was that it was )oid for bein$ absolutely
simulated)
8EL-: The sale is )oid The +ourt of Appeals is ri$ht in that the
element of consent is present as to the deed of sale of <ctober -3'
-JC. For consent was admittedly $i)en' albeit obtained by fraud
Accordin$ly' said consent' althou$h defecti)e' did e(ist !n such case'
the defect in the consent would pro)ide a $round for annulment of a
)oidable contract' not a reason for nullity ab initioThe parties are
a$reed that the second element of ob;ect is likewise present in the
deed of <ctober -3' -JC.' namely' the parcel of land sub;ect matter of
the sameNot so' howe)er' as to the third element of cause or
consideration And on this point the decision of the +ourt of Appeals is
silent
As to the sale of the eastern portion of the land' there is no
8uestion' it bein$ admitted that said land was donated to "a(imo
@owe)er' as re$ards the western portion' the 8uestion is whether or
not there was a cause or consideration to support the e(istence of a
contract of sale
The rule under the +i)il +ode' a$ain be it the old or the new' is
that contracts without a cause or consideration produce no effect
whatsoe)er Nonetheless' under the <ld +i)il +ode' the statement of a
false consideration renders the contract )oidable' unless it is pro)en
that it is supported by another real and licit consideration And it is
further pro)ided by the <ld +i)il +ode that the action for annulment of
a contract on the $round of falsity of consideration shall last four years'
the term to run from the date of the consummation of the contract
Accordin$ly' since the deed of sale of -JC. is $o)erned by the
<ld +i)il +ode' it should be asked whether its case is one wherein
there is no consideration' or one with a statement of a false
consideration !f the former' it is )oid and ine(istentH if the latter' only
)oidable' under the <ld +i)il +ode As obser)ed earlier' the deed of
sale of -JC. stated that it had for its consideration Fi)e @undred
053AAAA) 5esos !n fact' howe)er' said consideration was totally
absent The problem' therefore' is whether a deed which states a
consideration that in fact did not e(ist is a contract without
consideration' and therefore )oid ab initio' or a contract with a false
consideration' and therefore' at least under the <ld +i)il +ode'
)oidable
From the fore$oin$ it can be seen that where' as in this case'
there was in fact no consideration' the statement of one in the deed will
not suffice to brin$ it under the rule of Article -2/. of the <ld +i)il
+ode as statin$ a false consideration
0@anniyah 6e)illa )
E%%ect i%:
Si)+lated . re'resented to $a"e (een 'aid BAT was
NOT in %act 'aid
9% 'rice is S9/ALATE-! t$e sale is CO9- (+t t$e contract
)a# (e s$own to $a"e (een in realit# a donation or
so)e ot$er contract (14;17
!t is )oid because the third element 0price) is lackin
For e(ample: the contract in reality is a donation but it was simulated
as a contract of sale to pay lesser ta(es
A*T!+L, -4/- !f the price is simulated' the sale is )oid' but the act
may be shown to ha)e been in reality a donation' or some other act or
contract 0n)
9ll+stration:
'ng v. 'ng B IP1,66 and ot$er "al+a(le considerationsJ
. "oid sale (+t )a# (e a donation
(agnas v. CA B &ross dis'ro'ortion (etween
consideration sti'+lated and "al+e o% t$e t$in& s$ows
t$at t$e 'rice is %alse and %ictitio+s, T$e contract is CO9-
ON= CS ON=
FACTS: *ecords show that on February 23' -J/. !melda <n$' for and
in consideration of <ne 05-AA) 5eso and other )aluable
considerations' e(ecuted in fa)or of pri)ate respondent 6andra
"aru77o' then a minor' a &uitclaim 4eed whereby she transferred'
released' assi$ned and fore)er 8uitclaimed to 6andra "aru77o' her
heirs and assi$ns' all her ri$hts' title' interest and participation in the
<N,>@ALF 0-P2) undi)ided portion of the parcel of land consistin$ of
an area of -23 s8 m
<n No)ember -J' -JGA' !melda <n$ re)oked the aforesaid 4eed
of &uitclaim and' thereafter' on Banuary 2A' -JG2 donated the whole
property described abo)e to her son' *e( <n$ Bimene7
<n Bune 2A'-JGC' 6andra "aru77o' throu$h her $uardian ad litem
Alfredo <n$' filed with the *e$ional Trial +ourt of "akati' "etro "anila
an action a$ainst petitioners' for the reco)ery of ownershipPpossession
and nullification of the 4eed of 4onation o)er the portion belon$in$ to
her and for Accountin$
5
<n 4ecember -2' -JGC' the trial court rendered ;ud$ment in
fa)or of respondent "aru77o and held that the &uitclaim 4ead is
e8ui)alent to a 4eed of 6ale and' hence' there was a )alid
con)eyance in fa)or of the latter 5etitioners appealed to the
respondent !ntermediate Appellate +ourt They reiterated their
ar$ument below and' in addition' contended that the <ne 05-AA)
5eso consideration is not a consideration at all to sustain the rulin$
that the 4eed of &uitclaim is e8ui)alent to a sale
<n Bune 2A' -JG4' respondent !ntermediate Appellate +ourt
promul$ated its 4ecision affirmin$ the appealed ;ud$ment and held
that the &uitclaim 4eed is a con)eyance of property with a )alid
cause or considerationH that the consideration is the <ne 05-AA)
5eso which is clearly stated in the deed itselfH that the apparent
inade8uacy is of no moment since it is the usual practice in deeds
of con)eyance to place a nominal amount althou$h there is a more
)aluable consideration $i)en
9SSAE: wPn the 8uitclaim was a deed of sale' and if so wPn the
same was )alid 0Y,6)
8EL-: A careful perusal of the sub;ect deed re)eals that the
con)eyance of the one>half 0Q) undi)ided portion of the abo)e
described property was for and in consideration of the <ne 05lAA)
5eso and the other )aluable considerations paid by pri)ate
respondent 6andra "aru77o' throu$h her representati)e' Alfredo
<n$' to petitioner !melda <n$ 6tated differently' the cause or
consideration is not the <ne 5eso alone but also the other )aluable
considerations As aptly stated by the Appellate +ourt M( ( (
althou$h the cause is not stated in the contract it is presumed that it
is e(istin$ unless the debtor pro)es the contrary 0Article -C34 of the
+i)il +ode) <ne of the disputable presumptions is that there is a
sufficient cause of the contract 06ection 3' 0r)' *ule -C-' *ules of
+ourt) !t is a le$al presumption of sufficient cause or consideration
supportin$ a contract e)en if such cause is not stated therein This
presumption cannot be o)ercome by a simple assertion of lack of
consideration especially when the contract itself states that
consideration was $i)en' and the same has been reduced into a
public instrument with all due formalities and solemnities To
o)ercome the presumption of consideration the alle$ed lack of
consideration must be shown by preponderance of e)idence in a
proper action 0@anniyah 6e)illa )
BA=NAS "s, CA! RETON9L! ENCARNAC9ON AN- NA/BAGAN
FACTS: @ilario "ateum of Rawit' +a)ite' died on "arch --' -J.4'
sin$le' without ascendants or descendants' and sur)i)ed only by
collateral relati)es' of whom petitioners herein' his first cousins'
were the nearest "ateum left no will' no debts' and an estate
consistin$ of twenty>nine parcels of land in Rawit and !mus' +a)ite'
ten of which are in)ol)ed in this appeal
<n April C' -J.4' the pri)ate respondents' themsel)es
collateral relati)es of "ateum thou$h more remote in de$ree than
the petitioners' re$istered with the *e$istry of 4eeds for the
5ro)ince of +a)ite two deeds of sale purportedly e(ecuted by
"ateum in their 0respondentsK) fla)or co)erin$ ten parcels of land
Both deeds were in Ta$alo$' sa)e for the ,n$lish descriptions of
the lands con)eyed under one of themH and each recited the
consideration of 5-AA and ser)ices rendered to and for "ateumKs
benefit
<n "ay 22' -J.4 the petitioners commenced suit a$ainst the
respondents in the +ourt of First !nstance of +a)ite' seekin$
annulment of the deeds of sale as fictitious' fraudulent or falsified'
or' alternati)ely' as donations )oid for want of acceptance embodied
in a public instrument +laimin$ ownership pro indi)iso of the lands
sub;ect of the deeds by )irtue of bein$ intestate heirs of @ilario
"ateum' the petitioners prayed for reco)ery of ownership and
possession of said lands' accountin$ of the fruits thereof and
dama$es
4efendants a)er that they were collateral relati)es of @ilario
"ateum and had done many $ood thin$s for him' nursin$ him in his
last illness' which ser)ices constituted the bulk of the consideration
of the sales
Trial court dismissed the petition on the $round that the
plaintiffKs e)idence of alle$ed fraud was insufficient' the fact that the
deeds of sale each stated a consideration of only 5- AA not bein$
in itself e)idence of fraud or simulation Also on the $round 0laid
down in Armential )s 5atriarca) that the plaintiffs as mere collateral
relati)es could not le$ally 8uestion the disposition made by the
deceased durin$ his life time +A affirmed the decision
9SSAE: wPn the deeds of sale were )oid or ine(istent from teh
be$innin$ or merely )oidable
Sf they were only )oidable' then it is a correct proposition that
since the )endor "ateum had no forced hairs whose le$itimes may
ha)e been impaired' and the petitioners' his collateral relati)es' not
bein$ bound either principally or subsidiarily to the terms of said
deeds' the latter had and ha)e no actionable ri$ht to 8uestion those
transfers
<n the other hand' if said deeds were )oid ab initio because to all
intents and purposes without consideration' then a different le$al
situation arises since if there has no cause or consideration' the
property alle$edly con)eyed ne)er really lea)es the patrimony of the
transferor' and upon the death without testament' such property would
ha)e passed to the transferorsK heirs intestate and can be reco)erable
by them' or by the Administrator of the transferorKs estate 0so in this
case pwede ma>reco)er n$ petitioners)T
8EL-: The deeds of sale are )oid and of no force or effect
whatsoe)er ?pon the consideration alone that the apparent $ross' not
to say enormous' disproportion between the stipulated price 0in each
deed) of 5- AA plus unspecified and un8uantilled ser)ices and the
undisputably )aluable real estate alle$edly sold > worth at least
5-A'3AAAA $oin$ only by assessments for ta( purposes which' it is
well>known' are notoriously low indicators of actual )alue > plainly and
un8uestionably demonstrates that they state a false and fictitious
consideration' and no other true and lawful cause ha)in$ been shown'
the +ourt finds both said deeds' insofar as they purport to be sales' not
merely )oidable' but )oid ab initio
T$e trans%ers in *+estion (ein& "oid! it %ollows as a
necessar# conse*+ence and con%or)a(l# to t$e conc+rrin&
o'inion in Ar)entia! wit$ w$ic$ t$e Co+rt %+ll# a&rees! t$at
t$e 'ro'erties '+r'ortedl# con"e#ed re)ained 'art o% t$e
estate o% 8ilario /ate+)! said trans%ers notwit$standin&!
reco"era(le (# $is intestate $eirs! t$e 'etitioners $erein!
w$ose stat+s as s+c$ is not c$allen&ed,
0@anniyah 6e)illa )
E%%ect i% Price is
+ Ancertain B t$e K is ine%%icacio+s (+t i% (+#er
ne"ert$eless a''ro'riates t$e o(0ect $e )+st 'a#
reasona(le 'rice (Art, 14;47
+ /anner o% 'a#)ent )+st (e a&reed +'on
A*T!+L, -4/4 Dhere the price cannot be determined in accordance
with the precedin$ articles' or in any other manner' the contract is
inefficacious @owe)er' if the thin$ or any part thereof has been
deli)ered to and appropriated by the buyer he must pay a reasonable
price therefor Dhat is a reasonable price is a 8uestion of fact
dependent on the circumstances of each particular case 0n)
9nade*+ac# o% 'rice: E%%ect
+ Col+ntar# sale B does not a%%ect t$e "alidit# o% sale
But the price must not be $rossly disproportionate
9nade*+ac# o% Price: 4+dicial Sale
+ =eneral r+le: )a# a"oid t$e 0+dicial sale w$en it is
s$oc2in& to t$e conscience o% )an
+ E3ce'tion: w$en t$ere@s a ri&$t o% rede)'tion
9nade*+ac# o% Price: Sales A Retro
+ Raises t$e 'res+)'tion o% e*+ita(le )ort&a&e
9nade*+ac# o% Price: 1ards and =+ardians
+ sale (# &+ardians or (# re'resentati"es w$en
wards<'ersons re'resented s+%%er lesion o% L M o% t$e
"al+e o% t$e t$in&s . rescissi(le contract +nless
a''ro"ed (# co+rt (Art,1?1! Art,1?:7
A*T!+L, -CG- The followin$ contracts are rescissible:
0-) Those which are entered into by $uardians whene)er the wards
whom they represent suffer lesion by more than one>fourth of the )alue
of the thin$s which are the ob;ect thereofH
02) Those a$reed upon in representation of absentees' if the latter
suffer the lesion stated in the precedin$ numberH
0C) Those undertaken in fraud of creditors when the latter cannot in any
other manner collect the claims due themH
04) Those which refer to thin$s under liti$ation if they ha)e been
entered into by the defendant without the knowled$e and appro)al of
the liti$ants or of competent ;udicial authorityH
03) All other contracts specially declared by law to be sub;ect to
rescission 0-2J-a)
A*T!+L, -CG. *escission referred to in Nos - and 2 of Article -CG-
shall not take place with respect to contracts appro)ed by the courts
0-2J.a)
6
Lesion as to wards and $uardians: !f the price is 5 /3A'AAA of 5 -"'
it is still )alid Lesion suffered is e8ual 0not more) to U of the )alue
of the thin$
SA//ARG
CONSENT SAB4ECT /ATTER PR9CE
6pouses ,mptio rei ) ,mptio
spei
*ules on inade8uacy
"inors' insane'
demented' deaf mute
who cant read and
write
9eneric No price
9uardians' ;ud$es'
attorneys' a$ents'
public officers'
e(ecutors
!lle$al ob;ects 6imulated
4eterminate uncertain
FOR/AT9ON OF A CONTRACT OF SALE
STA=ES
STA=ES
F9RST P8ASE: PREPARATORG
+ 'eriod o% ne&otiation and (ar&ainin& endin& at t$e
)o)ent o% a&ree)ent o% t$e 'arties
CONTRACTS 9N T8E F9RST P8ASE
O Policitation
O 'ption Contract
O Rig)t o* First Re*+sal
O Contract to Sell
P',&C&-AC&'$
ANACCEPTE- +nilateral 'ro)ise to (+# or sell, E"en i%
acce'ted (# t$e ot$er 'art#! it is not (indin& +'on t$e
'ro)issor and )a# (e wit$drawn at an# ti)e,
"iolation does not &i"e rise to an# relie% on t$e 'art o%
t$e ot$er 'art# since t$ere is no "alid contract
There is no remedy in case of breach because there is lack of
consent
BAR 1DDD
O A 'ro)ised to sell 'ro'ert# to B i% B 'asses t$e Bar
E3a)
O A sold $o+se to C (e%ore B 'assed t$e Bar
O 9s t$e sale CAL9-N
O 9s B entitled to rentals since $e t$ere was a 'ro)ise to
sellN
ANS1ER
O Ges! t$e sale to C is "alid, A )erel# )ade an +nacce'ted
+nilateral 'ro)ise to sell to B in t$e nat+re o% a
'olicitacion, T$is contract does not &i"e rise to an#
o(li&ation, 9t does not 're"ent t$e owner %ro) sellin&
t$e t$in& to anot$er,
O No! B is not entitled to rentals, AOs 'ro)ise to sell was
+nilateral and +nacce'ted, 8ence! t$ere was no
'er%ected contract o% sale t$at will trans%er owners$i'
o"er t$e t$in& to B, B is not entitled to rentals (eca+se
$e does not own t$e 'ro'ert#,
7
OPT9ON CONTRACT
ACCEPTE- +nilateral 'ro)ise to (+# or sell a
deter)inate t$in& w$ic$ is s+''orted (# a
consideration distinct %ro) t$e 'rice
i% wit$ consideration &i"es rise to a case %or da)a&es
(+t NOT %or s'eci%ic 'er%or)ance
O O'tion contract )+st $a"e consideration se'arate
and distinct %ro) t$e '+rc$ase 'rice, Ot$erwise! t$e
o'tion contract is CO9- (S+gar Molasses case7
O 9% t$ere is no consideration! t$e contract is CO9- BAT
o%%er can still (e acce'ted +ntil it is wit$drawn
(Sanc)e. v. Rigos)
,&MS'$ /. CA
O An o'tion is a contin+in& o%%er or contract (# w$ic$
t$e owner sti'+lates wit$ anot$er t$at t$e latter s$all
$a"e t$e ri&$t to (+# t$e 'ro'ert# at a %i3ed 'rice
wit$in a ti)e certain! or +nder! or in co)'liance wit$!
certain ter)s and conditions! or w$ic$ &i"es to t$e
owner o% t$e 'ro'ert# t$e ri&$t to sell or de)and a
sale, An o'tion is not itsel% a '+rc$ase! (+t )erel#
sec+res t$e 'ri"ile&e to (+#, 9t is not a sale o%
'ro'ert# (+t a sale o% ri&$t to '+rc$ase,

L9/SON CS C,A,( ?5; s 56D 7
FACTS: 5etitioner Limson filed a complaint alle$in$ that in Buly
-J/G' 6pouses de =era' throu$h their a$ent "arcosa 6anche7'
offered to sell to petitioner a parcel of land
5etitioner a$reed to buy the property and $a)e 52Ak as
earnest money *espondent spouses si$ned a receipt and $a)e
petitoner a -A>day option period to purchase the property and
informed them that the property was mort$a$e to *amoses' and
asked Limson to pay the balance of the purchase price to enable to
settle their obli$ation with *amoses
<n Au$ 3' -J/G' 5etitioner a$reed to meet respondent
spouses and the *amoses to consummate the transaction but due
to failure of respondent spouses and the *amose to appear' no
transaction was formali7ed
<n Au$ --'-J/G' petitioner claimed that she was willin$ to pay
the balance but the transaction a$ain did not materiali7ed as
respondent spouse failed to pay the back ta(es 6ubse8uently'
petitioner $a)e C checks 05C.'-/AAA) for the settlement of the back
ta(es and for payment of the 8uitclaims of the C tenants The
amount was considered part of the purchase price with a receipt
si$ned by respondent spouses
<n 6ept 3 -J/G' petitioner was surprised to learn that the
property was the sub;ect of a ne$otiation for the sale to 6un)ar
*ealty 4e)t +orp represented by +uenca As a conse8uence'
petitoner filed an affida)it of Ad)erse +laim with the *e$istry of
4eeds and informed +uenca of her contract to purchase the
property
<n 6ept -3 -J/G' the 4eed of 6ale was e(ecuted between
respondent spouses and 6un)ar' and a T+T was issued in fa)or of
6un)ar with the ad)erse claim annotated therein
9SSAE: D<N there was perfected contract to sell between
petitioner and respondent spousesE N<
8EL-: The a$reement between the parties was a contract of
option and not a contract to sell
An option' is a continuin$ offer or contract by which the owner
stipulates with another that the latter shall ha)e the ri$ht to buy the
property at a fi(ed price within a time certain' or under certain terms
and conditions or which $i)es to the owner the ri$ht to sell or
demand a sale !t is also called an #unaccepted offer% !t is not itself
a purchase' but merely secures the pri)ile$e to buy !t is not a sale
of property but a sale of the ri$ht to purchase An option imposes no
bindin$ obli$ation on the person holdin$ the option' aside from the
consideration for the offer
<n the other hand' a contract' like a contract to sell' in)ol)es
the meetin$ of minds between two persons whereby one binds
himself with respect to the other' to $i)e somethin$ or to render
some ser)ice +ontracts' in $eneral' are reflected by mere consent'
which is manifested by the meetin$ of the offer and the acceptance
upon the thin$ and the cause which are to constitute the contract
The offer must be certain and the acceptance absolute
!n this case' the receipt readily shows that the parties entered
into was a contract of option' which respondent spouses a$reed
with petitioner the ri$ht to buy the formers property at a fi(ed price
within -A>days' and did not sell their propertyH they did not also
a$ree to sell itH but they sold somethin$' and the a$reement
imposed no bindin$ obli$ation on petitioner' aside from the
consideration for the offer
The consideration of 52Ak paid by petitioner to respondent
spouses was not earnest money but option money
,arnest money and option money are not the same but
distin$uished thus:
,arnest money is part of the purchase price' while option money
is the money $i)en as a distinct consideration for an option contractH
,arnest money is $i)en only where there is already a sale' while
option money applies to a sale not yet perfectedH
Dhen earnest money is $i)en' the buyer is bound to pay the
balance' while when the would 1be buyer $i)es option money' he is
not re8uired to buy' but may e)en forfeit it dependin$ on the terms of
the option
!n this case' there is nothin$ in the receipt which indicates that the
52Ak was part of the purchase price "oreo)er' it was not shown that
there was a perfected sale between the parties where earnest money
was $i)en Finally' the receipt did not re)eal that petitioner was bound
to pay the balance of the purchase price !n fact' respondent spouses
could e)en forfeit the money $i)en if the terms of the option were not
met The option period ha)in$ e(pired and acceptance was not made
by petitioner' the purchase of sub;ect property by 6un)ar was perfectly
)alid and entered into in $ood faith
0from: ,rwin =icente)
BAR 1DD:! 1DD
A &a"e B an o'tion to '+rc$ase $is a'art)ent %or P5/
B o%%ered to (+# %or P4,5 /
Co+nterBo%%er was not acce'ta(le to A
A sold to C w$o (o+&$t it at P5 /
Can B co)'el A to cancel sale to C and e3ec+te deed
in $is %a"orN
ANS1ER
O B cannot co)'el A to e3ec+te a deed in $is %a"or
(eca+se w$at B onl# $ad was an o'tion contract, Said
contract was not a "alid one since it was not s+''orted
(# a consideration distinct %ro) t$e '+rc$ase 'rice,
O E"en i% wit$ consideration! B can onl# s+e A %or
da)a&es (+t not %or s'eci%ic 'er%or)ance
BAR 5665
O 9% t$e 'arties entered into an o'tion K w$ic$ is
s+''orted (# a se'arated consideration %ro) t$e
'+rc$ase 'rice and t$e o'tion K is not res'ected! can
t$e wo+ldB(eB(+#er as2 %or s'eci%ic 'er%or)anceN
O Can t$e seller esca'e lia(ilit# (# sa#in& $onorin& t$e
o'tion K wo+ld (e %inanciall# disad"anta&eo+s to $i)N
ANS1ER
O An o'tion contract wit$ se'arate consideration will onl#
&i"e rise to a case %or da)a&es and not %or s'eci%ic
'er%or)ance,
O Seller cannot esca'e lia(ilit# (# clai)in& econo)ic
lesion since seller w$o enters into an o'tion contract
$as t$e o(li&ation to s+stain o%%er +ntil t$e end o%
a&reed 'eriod,
R9=8T OF F9RST REFASAL
contract 0)ic) grants a person t)e rig)t to 1+2 a
propert2 1e*ore it is o**ered to anot)er. -)is doesn3t need a
separate consideration since s+c) stip+lation is part and
parcel o* t)e entire contract
This is usually present if you are the lessee
9%
o%%eree and o%%error@s ter)s are 9-ENT9CAL
o%%eror "iolates t$e a&ree)ent
SPEC9F9C PERFOR/ANCE
9%
o%%eree and o%%error@s ter)s are -9FFERENT
o%%eror "iolates t$e a&ree)ent
-A/A=ES
O A o0ns a )o+se 0)ic) is leased to (
O ( 0as given t)e rig)t o* *irst re*+sal 4 P5M
O ( o**ered to 1+2 *or P6.5 M 4 not accepta1le co+nter4o**er
O A sold t)e )o+se to C *or P5 M
O Can ( co#pel A to cancel t)e sale 0it) C and sell t)e )o+se to
)i#7
8
ANS1ER
O B cannot co)'el A to e3ec+te a deed o% sale in $is
%a"or (eca+se B@s co+nterBo%%er is not t$e sa)e as
A@s 'rice,
O 8owe"er! since t$ere was a (reac$ o% t$e ri&$t o% %irst
re%+sal since t$e 'ro'ert# was not sold to B as t$e
lessee! B )a# %ile a case %or da)a&es,
CONTRACT TO SELL
O Bilateral contract w$ere(# t$e 'ros'ecti"e seller!
w$ile e3'ressl# reser"in& t$e owners$i' o% t$e
s+(0ect 'ro'ert# des'ite deli"er# t$ereo% to t$e
'ros'ecti"e (+#er! (inds $i)sel% to sell t$e said
'ro'ert# e3cl+si"el# to t$e 'ros'ecti"e (+#er +'on
%+l%ill)ent o% t$e condition a&reed +'on! t$at is! %+ll
'a#)ent o% t$e '+rc$ase 'rice
Take note a$ain: +ontract to sell is different from conditional sale
CONTRACT TO SELL 9S NOT A CONTRACT OF SALE
O T$e %irst essential ele)ent o% consent o% 'arties is
ABSENT
T$e seller does not consent to trans%er
owners$i' to t$e (+#er +ntil t$e $a''enin& o% an
e"ent! w$ic$ )a# (e t$e %+ll 'a#)ent o% 'rice w$ic$
is a s+s'ensi"e condition! t$e nonB%+l%ill)ent o%
w$ic$ 're"ents t$e o(li&ation %ro) arisin& (Coronel
v. CA, 'ct. 7,1889)
CORONEL "s CA (5:? S 15 . Octo(er ;! 1DD:7
FACTS:This case has its roots in a complaint for specific
performance to compel herein petitioners to consummate the sale
of a parcel of land with its impro)ements located alon$ *oose)elt
A)e' &+ entered in to by the parties sometime in Banuary -JG3 for
the price of 5-'24A'AAAAA
<n Banuary -J' -JG3' +oronel' et al e(ecuted a document
entitled #*eceipt of 4own 5ayment% in fa)or of plaintiff *amona
5atricia Alcara7 after plaintiff>appellee +oncepcion Alcara7' mother
of *amona' paid the down payment of 53A'AAAAA @owe)er' on
February -G' -JG3' the +oronels sold the property to inter)enor>
appellant +atalina "abana$ for 5-'3GA'AAAAA after the latter has
paid 5CAA'AAAAA For this reason' +oronels cancelled and
rescinded the contract with *amona by depositin$ the down
payment paid in the bank in trust for *amona
<n February 22' -JG3' +oncepcion' etal filed a complaint for
specific performance a$ainst the +oronels
*T+>&+ rendered ;ud$ment fa)orable to +oncepcion and
ordered the cancellation of sale to "abana$ +oncepcions "otion
for *econsideration was deniedH hence an appeal was made to +a
which affirmed *T+s decision
@ence' this petition where +oncepcion contended that the
#*eceipt of 4own 5ayment% embodied a perfected contract of sale'
while +oronels insisted that what the document si$nified was a
mere e(ecutory contract to sell' sub;ect to certain suspensi)e
conditions' and because of the absence of *amona' who left for the
?6A' said contract could not possibly ripen into a contract of
absolute sale
9SSAE: D<N the #*eceipt of 4own 5ayment% was a bindin$
contract of saleE 0contract of sale )s contract to sellH contract to sell
and conditional contract of sale)
RAL9N=: The document entitled #*eceipt of 4own 5ayment% which
was offered in e)idence by both the parties embodied the bindin$
contract between *amona and the +oronels' pertainin$ to a
particular house and lot
Art -CA3 A contract is a meetin$ of minds between two
persons whereby one binds himself' with respect to the other' to
$i)e somethin$ or render some ser)ice
Art -43G by the contract of sale one of the contractin$ parties
obli$ates himself to transfer the ownership of and to deli)er a
determinate thin$' and the other to pay therefore a price certain in
money or its e8ui)alent
6ale' by its )ery nature' is a consensual contract because it is
perfected by mere consent The essential elements of a contract of
sale are the followin$:
+onsent or meetin$ of the minds' that is' consent to transfer
ownership in e(chan$e for the priceH
4eterminate sub;ect matterH and
5rice certain in money or its e8ui)alent
+ontract to sell may not be considered as a +ontract of 6ale
because the first essential element is lackin$ !n +ontract to 6ell'
the prospecti)e seller e(plicitly reser)es the transfer of title to the
prospecti)e buyer' meanin$' the prospecti)e seller does not as yet
a$ree or consent to transfer ownership of property sub;ect of the
contract to sell until the happenin$ of an e)ent' which for present
purposes we shall take as the full payment of the purchase price Dhat
the seller a$rees or obli$es himself to do is to fulfill his promise to sell
the sub;ect property when the entire amount of the purchase price is
deli)ered to him !n other words' the full payment of the purchase price
partakes of a suspensi)e condition' the non>fulfillment of which
pre)ents the obli$ation to sell from arisin$ and thus' ownership is
retained by the prospecti)e seller without further remedies by the
prospecti)e buyer
A +ontract to 6ell may thus be defined as a bilateral contract
whereby the prospecti)e seller while e(pressly reser)in$ the ownership
of the sub;ect property despite deli)er thereof to the prospecti)e buyer'
binds himself to sell the property e(clusi)ely to the prospecti)e buyer
upon fulfillment of the condition a$reed upon' that is full payment of the
purchase price
!n a contract to sell' upon the fulfillment of the suspensi)e
condition which is the full payment of the purchase price' ownership
will not automatically transfer to the buyer althou$h the property may
ha)e been pre)iously deli)ered to him The prospecti)e seller still has
to con)ey the title to the prospecti)e buyer by enterin$ into a contract
of absolute sale
!n conditional contract of sale' howe)er' upon the fulfillment of the
suspensi)e condition' the sale becomes absolute and this will definitely
affect the sellers title thereto !n fact' if there had been pre)ious
deli)ery of the sub;ect property' the sellers ownership or title to the
property is automatically transferred to the buyer such that' the seller
will no lon$er ha)e nay title to transfer to any third person Applyin$
Art -344 of the ++' such second buyer of the property who may ha)e
had actual or constructi)e knowled$e of such defect in the sellers title'
or atleast was char$ed with the obli$ation to disco)er such defect'
cannot be a re$istrant in $ood faith 6uch second buyer cannot defeat
the first buyers title !n case the title is issued to the second buyer' the
first buyer may seek recon)eyance of the property sub;ect of the sale
Dhen the #*eceipt of 4own 5ayment% is considered in its entirety'
it becomes more manifest that there was a clear intent on the part of
petitioners to transfer title to the buyer' but since the Transfer
+ertificate of Title 0T+T) was still in the name of petitioners father' they
could not fully effect such transfer althou$h the buyer was then willin$
and able to immediately pay the purchase price
The a$reement could not ha)e been a contract to sell because
the seller herein made no e(press reser)ation of ownership or title to
the sub;ect parcel of land
Dhat is clearly established by the plain lan$ua$e of the sub;ect
document is that when the said #*eceipt of 4own 5ayment% was
prepared and si$ned by petitioners *omeo +oronel' et al' the parties
had a$reed to a conditional contract of sale' consummation of which is
sub;ect only to the successful transfer of the certificate of title from the
name of petitioners father' +onstancio +oronel' to their names
6ince the condition contemplated by the parties which is the
issuance of a certificate of title in petitioners name was fulfilled on
February .'-JG34' the respecti)e obli$ations of the parties under the
contract of sale became mutually demandable' that is' petitioners' as
sellers' were obli$ed to present the transfer certificate of title already in
their names to pri)ate respondent *amona Alcara7' the buyer' and to
immediately e(ecute the 4eed of Absolute 6ale' while the buyer on her
part' was obli$ed to forthwith pay the balance of the purchase price
amountin$ to 5-'-JA'AAAAA
0Ba77ie 6arona )
CONTRACT OF SALE C, CONTRACT TO SELL
CONTRACT TO SELL 9S NOT
A CON-9T9ONAL SALE
O 9n a conditional sale! t$e %irst ele)ent o% consent is
'resent alt$o+&$ it is conditioned on t$e $a''enin& o%
an e"ent,
O T$ere is no consent to trans%er owners$i' in a contract
to sell
CORONEL C, CA
O IRecei't o% -own'a#)entJ contains t$e %%:
Title re)ains in t$e "endor
and $e can e0ect "endee %or
nonBco)'liance wit$
s+s'ensi"e condition
Cendor $as lost control and
can reco"er onl# i% K is
rescinded
F+ll 'a#)ent is a 'ositi"e
resol+tor# condition
NonB'a#)ent is a ne&ati"e
resol+tor# condition
Cendor reser"es owners$i'
and will not 'ass +ntil %+ll
'a#)ent o% 'rice
Title 'asses to t$e (+#er
+'on deli"er# o% S/
9
4+an $as &i"en /aria P56!666 as
down'a#)ent %or a lot o% /aria
Since t$e lot is +nder t$e na)e o% /aria@s
%at$er w$o is deceased! /aria will $a"e t$e lot
trans%erred +nder $er na)e
A%ter /aria $as t$e TCT in $er na)e! s$e
will e3ec+te a deed o% sale
4+an will t$en 'a# t$e (alance o% P1!11D!666
/aria sold t$e lot to Pedro
Can 4+an s+e /aria %or s'eci%ic
'er%or)anceN
Contract to sell or conditional saleN
ANS1ER: Conditional sale
O Recei't s$ows t$at /aria intended to trans%er title to
4+an i% not %or t$e %act t$at lot was still +nder t$e
na)e o% /aria@s %at$er
O /aria did not reser"e title to t$e lot and a&reed to
e3ec+te a deed o% a(sol+te sale in t$e na)e o% 4+an
O 4+an can s+e %or s'eci%ic 'er%or)ance wit$ da)a&es

BAR 1DD;
O Co)'are a conditional sale %ro) an a(sol+te sale
ANS1ER
O An a(sol+te sale is a contract w$ere t$e seller $as
trans%erred owners$i' o"er a 'ro'ert# to t$e (+#er
and t$e latter $as &i"en t$e seller t$e %+ll
consideration %or t$e sale
O A conditional sale is li2ewise a contract o% sale w$ere
t$e seller a&rees to trans%er owners$i' to t$e (+#er!
$owe"er! s+(0ect to t$e $a''enin& o% s+s'ensi"e
condition,
SECON- P8ASE B PERFECT9ON
18AT 8APPENS
I)eetin& o% t$e )indsJ
IconsentJ . o%%er )+st (e certain and acce'tance a(sol+te
)eetin& o% o%%er and acce'tance
*+ali%ied acce'tance is )erel# a co+nterBo%%er w$ic$
in t+rn )+st (e a(sol+tel# acce'ted to &i"e rise to a
"alid and (indin& contract
!f A is sellin$ his property for 5 3" and B is willin$ to pay 5 4" for
it' there is no meetin$ of the minds The counter>offer has to
be accepted by the seller before we can say that there is a
meetin$ of the minds
18AT 8APPENS
acce'tance (# letter < tele&ra) . (eco)es e%%ecti"e
%ro) t$e ti)e acce'tance co)es to t$e 2nowled&e o%
o%%eror
earnest )one# . considered 'art o% t$e 'rice and
'roo% o% t$e 'er%ection o% a K
!f you sell your laptop for 5 .AT and buyer will inform you' throu$h
e>mail that he will buy it for 5.AT' there is perfection if you $et
the acceptance of the buyer !f you did not open your inbo( to
read the buyers acceptance' there is no perfection of the
contract of sale
SECON- P8ASE: PERFECT9ON
Earnest /one# O'tion /one#
5art of the purchase price 4istinct and separate from the
purchase price
5resupposes perfected contract of
sale
No perfected contract of sale
yet
Buyer is bound to pay the balance
after the earnest money is paid
<ptioner is not re8uired to pay
BAR 566:
O (iong and ,inda are spo+ses 0)o o0n real propert2.
O Ra2 prepared a deed o* sale and a #anager3s c)ec: *or P"
M.
O A*ter receiving t)e P"M, (iong signed t)e deed o* sale 1+t
,inda 0as a1road
O ;)en ,inda ret+rned, s)e re*+sed to sign since s)e c)anged
)er #ind.
O ,inda *iled a case to n+lli*2 t)e sale and *or da#ages against
Ra2
O ;ill t)e case prosper7
ANS1ER
O Linda@s case to ann+l t$e sale will not 'ros'er since all
t$e ele)ents o% a 'er%ected contract o% sale are 'resent,
O 1$en t$e co+'le@s o%%er was acce'ted (# Ra# and t$e
acce'tance was )ade 2nown to t$e co+'le! t$ere was
alread# a 'er%ected contract o% sale, A(sent an# &ro+nd
to ann+l! Linda@s action will not 'ros'er
FOR/ OF SALES
+ =eneral R+le: no %or) re*+ired
E3ce'tion:
a7 stat+te o% %ra+ds (Art 146? and 14657
(7 sale o% realt# t$ro+&$ a&ent
A*T!+L, -4AC The followin$ contracts are unenforceable' unless they
are ratified:
0-) Those entered into in the name of another person by one who has
been $i)en no authority or le$al representation' or who has acted
beyond his powersH
02) Those that do not comply with the 6tatute of Frauds as set forth in
this number !n the followin$ cases an a$reement hereafter made shall
be unenforceable by action' unless the same' or some note or
memorandum' thereof' be in writin$' and subscribed by the party
char$ed' or by his a$entH e)idence' therefore' of the a$reement cannot
be recei)ed without the writin$' or a secondary e)idence of its
contents:
0a) An a$reement that by its terms is not to be performed within a
year from the makin$ thereofH
0b) A special promise to answer for the debt' default' or
miscarria$e of anotherH
0c) An a$reement made in consideration of marria$e' other than a
mutual promise to marryH
0d) An a$reement for the sale of $oods' chattels or thin$s in
action' at a price not less than fi)e hundred pesos' unless the buyer
accept and recei)e part of such $oods and chattels' or the e)idences'
or some of them' of such thin$s in action or pay at the time some part
of the purchase moneyH but when a sale is made by auction and entry
is made by the auctioneer in his sales book' at the time of the sale' of
the amount and kind of property sold' terms of sale' price' names of
the purchasers and person on whose account the sale is made' it is a
sufficient memorandumH
0e) An a$reement of the leasin$ for a lon$er period than one year'
or for the sale of real property or of an interest thereinH
0f) A representation as to the credit of a third person
0C) Those where both parties are incapable of $i)in$ consent to a
contract
A*T!+L, -4A3 +ontracts infrin$in$ the 6tatute of Frauds' referred to
in No 2 of Article -4AC' are ratified by the failure to ob;ect to the
presentation of oral e)idence to pro)e the same' or by the acceptance
of benefit under them
STATATE OF FRAA-S 146?(57
O ANENFORCEABLE +nless in writin&:
Sale a&ree)ent w$ic$ is not to (e 'er%or)ed
wit$in 1 #ear %ro) )a2in& o% a&ree)ent
A&ree)ent %or sale o% &oods! c$attels or
)o"a(les "al+ed at P566 or )ore
Sale o% real 'ro'ert# or an# interest t$erein
T89R- P8ASE: CONSA//AT9ON and PERFOR/ANCE
+ O(li&ations o% t$e Seller
+ O(li&ations o% t$e B+#er
+ -o+(le Sales
+ Sale (# nonBowner
+ Sale (# one $a"in& "oida(le title
O(li&ations o% t$e seller
1 Preser"e t$e t$in& (11:?7
1 -eli"er t$e s+(0ect )atter
A*T!+L, --.C ,)ery person obli$ed to $i)e somethin$ is also obli$ed
to take care of it with the proper dili$ence of a $ood father of a family'
unless the law or the stipulation of the parties re8uires another
standard of care 0-AJ4a)
1$# -eli"erN
10
1 Owners$i' is trans%erred to t$e (+#er +'on act+al or
constr+cti"e deli"er# (14;;7
1 owners$i' o% S/ is ac*+ired (# t$e "endee %ro) t$e
)o)ent it is deli"ered to $i) in an# o% t$e wa#s
s'eci%ied in articles 14D;B1561 (14D:7
A*T!+L, -4// The ownership of the thin$ sold shall be transferred
to the )endee upon the actual or constructi)e deli)ery thereof 0n)
A*T!+L, -4J. The ownership of the thin$ sold is ac8uired by the
)endee from the moment it is deli)ered to him in any of the ways
specified in Articles -4J/ to -3A-' or in any other manner si$nifyin$
an a$reement that the possession is transferred from the )endor to
the )endee 0n)
A*T!+L, -4J/ The thin$ sold shall be understood as deli)ered'
when it is placed in the control and possession of the )endee
0-4.2a)
A*T!+L, -4JG Dhen the sale is made throu$h a public instrument'
the e(ecution thereof shall be e8ui)alent to the deli)ery of the thin$
which is the ob;ect of the contract' if from the deed the contrary
does not appear or cannot clearly be inferred
Dith re$ard to mo)able property' its deli)ery may also be
made by the deli)ery of the keys of the place or depository where it
is stored or kept 0-4.Ca)
A*T!+L, -4JJ The deli)ery of mo)able property may likewise be
made by the mere consent or a$reement of the contractin$ parties'
if the thin$ sold cannot be transferred to the possession of the
)endee at the time of the sale' or if the latter already had it in his
possession for any other reason 0-4.Ca)
A*T!+L, -3AA There may also be tradition constitutum
possessorium 0n)
A*T!+L, -3A- Dith respect to incorporeal property' the pro)isions
of the first para$raph of article -4JG shall $o)ern !n any other case
wherein said pro)isions are not applicable' the placin$ of the titles
of ownership in the possession of the )endee or the use by the
)endee of his ri$hts' with the )endorKs consent' shall be understood
as a deli)ery 0-4.4)
-eli"ered (+t no trans%er o% owners$i'N
1 14; . 'arties )a# sti'+late t$at owners$i' s$all not
'ass to t$e (+#er +ntil $e $as %+ll# 'aid
T#'es o% -eli"er#
P$#sical -eli"er# (14D;7 . w$en t$e S/ is 'laced in t$e
'ossession and control o% t$e "endee
Constr+cti"e deli"er#B 9//OCABLES
O sale t$ro+&$ '+(lic instr+)ent! e3ec+tion o%
instr+)ent P deli"er# i% t$e contrar# does not a''ear
in t$e deed (14D7
O Placin& t$e title o% owners$i' in "endee@s 'ossession
wit$ "endorOs consent (15617
Constr+cti"e deli"er#B/OCABLES
1 deli"er# o% t$e
2e#s or de'ositor# w$ere it is stored (14D7
1 deli"er# (#
consent o% t$e 'arties i% S/ cannot (e trans%erred to
(+#er at t$e ti)e o% sale or t$e (+#er alread# $ad
'ossession (e%ore sale (14DD7
1 'erson to
w$o) ne&otia(le doc+)ent o% title $as (een
ne&otiated ac*+ires t$e ri&$t o% 'erson to w$o)
deli"er# s$all (e )ade (# t$e ter)s o% t$e doc+)ent
(151?7
A*T!+L, -3-C A person to whom a ne$otiable document of title
has been duly ne$otiated ac8uires thereby:
0-) 6uch title to the $oods as the person ne$otiatin$ the document
to him had or had ability to con)ey to a purchaser in $ood faith for
)alue and also such title to the $oods as the person to whose order
the $oods were to be deli)ered by the terms of the document had or
had ability to con)ey to a purchaser in $ood faith for )alueH and
02) The direct obli$ation of the bailee issuin$ the document to hold
possession of the $oods for him accordin$ to the terms of the
document as fully as if such bailee had contracted directly with him
0n)
-oc+)ents o% Title
1 Bill o% ladin&! doc2 warrant! *+edan! ware$o+se recei't
or an# doc+)ent +sed in t$e ordinar# co+rse o%
(+siness in t$e sale or trans%er o% &oods as 'roo% o%
'ossession and control or a+t$oriEin& or '+r'ortin& to
a+t$oriEe t$e 'ossessor o% t$e doc+)ent to trans%er or
recei"e eit$er (# endorse)ent or deli"er# t$e &oods
co"ered (# t$e doc+)ent (1:?:7
A*T!+L, -.C. !n the precedin$ articles in this Title $o)ernin$ the sale
of $oods' unless the conte(t or sub;ect matter otherwise re8uires:
0-) "Document of title to goods" includes any bill of ladin$' dock
warrant' M8uedan'M or warehouse receipt or order for the deli)ery of
$oods' or any other document used in the ordinary course of business
in the sale or transfer of $oods' as proof of the possession or control of
the $oods' or authori7in$ or purportin$ to authori7e the possessor of
the document to transfer or recei)e' either by endorsement or by
deli)ery' $oods represented by such document
"Goods" includes all chattels personal but not thin$s in action or money
of le$al tender in the 5hilippines The term includes $rowin$ fruits or
crops
"Order" relatin$ to documents of title means an order by endorsement
on the documents
"Quality of goods" includes their state or condition
"Specific goods" means $oods identified and a$reed upon at the time a
contract of sale is made
An antecedent or pre>e(istin$ claim' whether for money or not'
constitutes M)alueM where $oods or documents of title are taken either
in satisfaction thereof or as security therefor
02) A person is insol)ent within the meanin$ of this Title who either has
ceased to pay his debts in the ordinary course of business or cannot
pay his debts as they become due' whether insol)ency proceedin$s
ha)e been commenced or not
0C) 9oods are in a "deliverable state" within the meanin$ of this Title
when they are in such a state that the buyer would' under the contract'
be bound to take deli)ery of them 0n)
-oc+)ents o% Title . P+r'ose
1 E"idence o% control and 'ossession or control o% &oods
descri(ed
1 /edi+) o% trans%errin& 'ossession and control o% &oods
descri(ed wit$o+t $a"in& to +nderta2e act+al deli"er#
T#'es o% -oc+)ents o% Title
1 Ne&otia(le . states t$at &oods will (e deli"ered to
(earer or to t$e order o% one 'erson
1 NonBNe&otia(leB does not state t$at t$e &oods re%erred
to t$erein will (e deli"ered to t$e (earer or t$e order o%
an# 'erson
-eli"er# t$ro+&$ Carrier
1 155? B deli"er# o% &oods to t$e carrier is dee)ed
deli"er# o% &oods to t$e (+#er
A*T!+L, -32C Dhere' in pursuance of a contract of sale' the seller is
authori7ed or re8uired to send the $oods to the buyer' deli)ery of the
$oods to a carrier' whether named by the buyer or not' for the purpose
of transmission to the buyer is deemed to be a deli)ery of the $oods to
the buyer' e(cept in the case pro)ided for in Article -3AC' first' second
and third para$raphs' or unless a contrary intent appears
?nless otherwise authori7ed by the buyer' the seller must make such
contract with the carrier on behalf of the buyer as may be reasonable'
ha)in$ re$ard to the nature of the $oods and the other circumstances
of the case !f the seller omit so to do' and the $oods are lost or
dama$ed in course of transit' the buyer may decline to treat the
deli)ery to the carrier as a deli)ery to himself' or may hold the seller
responsible in dama$es
?nless otherwise a$reed' where $oods are sent by the seller to the
buyer under circumstances in which the seller knows or ou$ht to know
that it is usual to insure' the seller must $i)e such notice to the buyer
as may enable him to insure them durin$ their transit' and' if the seller
fails to do so' the $oods shall be deemed to be at his risk durin$ such
transit 0n)
1 F,A,S, sales B seller 'a#s all c$ar&es and is s+(0ect to all
ris2s +ntil t$e &oods are 'laces alon&side t$e "essel
1 F,O,B, sales B I%ree on (oardJ seller s$all (ear all
e3'enses +ntil t$e &oods are deli"ered w$et$er at t$e
'oint o% s$i')ent or t$e 'oint o% destination
1 C,9,F, sales B Icost! ins+rance > %rei&$tJ 'rice co"ers
cost o% &oods and %rei&$t and ins+rance costs 'aid (#
t$e seller
S'ecial /odes o% -eli"er#
O constit+t+# possessori+# (15667 B
)ode o% deli"er# ta2es e%%ect w$en at t$e ti)e o%
11
'er%ection o% t$e contract t$e seller $eld 'ossession
o% t$e S/ in t$e conce't o% an owner and a%ter t$e
contract! $e contin+es to $old S/ no lon&er in t$e
conce't o% an owner
O tradition 1revi #an+ B o''osite o% constit+t+); (e%ore
t$e contract! t$e wo+ldB(eB(+#er is alread# is
'ossession o% t$e S/ (+t not in t$e conce't o% an
owner and '+rs+ant to t$e sale! $e now $olds
'ossession o% t$e S/ in t$e conce't o% an owner
O tradition longa #an+ B deli"er# )erel# (# a&ree)ent
s+c$ as w$en t$e seller 'oints t$e S/ wit$o+t
act+all# deli"erin& '$#sical 'ossession B e,&, 14DD
OBL9=AT9ONS OF T8E BAGER
Pa# 'rice o% t$in& sold (1557
Acce't deli"er# o% t$in& sold (155B1557
Pa# e3'enses o% deli"er#
A*T!+L, -3G2 The )endee is bound to accept deli)ery and to pay
the price of the thin$ sold at the time and place stipulated in the
contract
!f the time and place should not ha)e been stipulated' the payment
must be made at the time and place of the deli)ery of the thin$ sold
0-3AAa)
A*T!+L, -3GC ?nless otherwise a$reed' the buyer of $oods is not
bound to accept deli)ery thereof by installments
Dhere there is a contract of sale of $oods to be deli)ered by stated
installments' which are to be separately paid for' and the seller
makes defecti)e deli)eries in respect of one or more instalments' or
the buyer ne$lects or refuses without ;ust cause to take deli)ery of
or pay for one more instalments' it depends in each case on the
terms of the contract and the circumstances of the case' whether
the breach of contract is so material as to ;ustify the in;ured party in
refusin$ to proceed further and suin$ for dama$es for breach of the
entire contract' or whether the breach is se)erable' $i)in$ rise to a
claim for compensation but not to a ri$ht to treat the whole contract
as broken 0n)
A*T!+L, -3G4 Dhere $oods are deli)ered to the buyer' which he
has not pre)iously e(amined' he is not deemed to ha)e accepted
them unless and until he has had a reasonable opportunity of
e(aminin$ them for the purpose of ascertainin$ whether they are in
conformity with the contract if there is no stipulation to the contrary
?nless otherwise a$reed' when the seller tenders deli)ery of $oods
to the buyer' he is bound' on re8uest' to afford the buyer a
reasonable opportunity of e(aminin$ the $oods for the purpose of
ascertainin$ whether they are in conformity with the contract
Dhere $oods are deli)ered to a carrier by the seller' in accordance
with an order from or a$reement with the buyer' upon the terms that
the $oods shall not be deli)ered by the carrier to the buyer until he
has paid the price' whether such terms are indicated by markin$ the
$oods with the words Mcollect on deli)ery'M or otherwise' the buyer is
not entitled to e(amine the $oods before the payment of the price'
in the absence of a$reement or usa$e of trade permittin$ such
e(amination 0n)
A*T!+L, -3G3 The buyer is deemed to ha)e accepted the $oods
when he intimates to the seller that he has accepted them' or when
the $oods ha)e been deli)ered 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
$oods without intimatin$ to the seller that he has re;ected them 0n)
-OABLE SALES
Ele)ents
5 or )ore sales )+st (e "alid sales
5 or )ore sales )+st 'ertain to e3actl# t$e sa)e
s+(0ect 0possible 8uestion sa e(am )
5 (+#ers )+st eac$ re'resent con%lictin& interests
5 (+#ers )+st eac$ $a"e (o+&$t %ro) t$e "er#
sa)e seller
&: Dhat if spouses sell property to different personsE Dhat if
each spouse sells property to another set of spouse separatelyE
0Dalay answer baka related dito an$ 8uestion toynkV )
-o+(le Sales . /o"a(les
Person w$o $as 'ossession in &ood %ait$ s$all (e t$e
owner
All elements of double sale must be present
-o+(le Sales . 9))o"a(les
recorded in Re&istr# o% Pro'ert# in &ood %ait$
i% t$ereOs no inscri'tion! w$o in &ood %ait$ was %irst in
'ossession
in a(sence t$ereo%! to t$e 'erson w$o 'resents t$e
oldest title! 'ro"ided t$ere@s &ood %ait$
9% not all ele)ents o% do+(le sales are 'resent
PR9NC9PLE:
Prior te)'ore! Prior 4+re
QFirst in ti)e! stron&er in ri&$tR
0pwede i>theme sa conflicts haha )
4o not apply this principle if all the elements of double sale are
present
BAR 5661! 5665
1 A sold land to B B 4+ne 15! 1DD5
1 A sold sa)e land to C B 4+ne ?6! 1DD5
1 1$o $as a (etter ri&$t i%:
B@s sale was re&istered (e%ore C@s sale (+t B
2new t$e sale to C
C@s sale was re&istered (e%ore B@s sale (+t C
2new t$e sale to B
ANS1ER
1 B $as a (etter ri&$t (eca+se $e was a(le to record t$e
sale in &ood %ait$ since $e recorded (e%ore t$e sale to C
$a''ened
1 E"en i% B recorded t$e sale 2nowin& o% t$e s+(se*+ent
sale to C! B is still in &ood %ait$ since in do+(le sale!
w$at creates (ad %ait$ is 2nowled&e o% a 'rior sale! not
o% a later sale
1 B still $as a (etter ri&$t o"er C since C +ndertoo2
re&istration in (ad %ait$ $a"in& 2nowled&e o% t$e PR9OR
sale to B (Art, 1544! Ci"il Code7
A*T!+L, -344 !f the same thin$ should ha)e been sold to different
)endees' the ownership shall be transferred to the person who may
ha)e first taken possession thereof in $ood faith' if it should be
mo)able property
6hould it be immo)able property' the ownership shall belon$ to the
person ac8uirin$ it who in $ood faith first recorded it in the *e$istry of
5roperty
6hould there be no inscription' the ownership shall pertain to the
person who in $ood faith was first in the possessionH and' in the
absence thereof' to the person who presents the oldest title' pro)ided
there is $ood faith 0-4/C)
BAR 5664
1 A sold a lot to B (+t t$e deed o% sale was not re&istered,
1 One #ear later! A sold sa)e lot to C and C was a(le to
re&ister t$e sa)e and o(tain a TCT o"er t$e lot in $is
na)e,

1 1$o $as t$e (etter ri&$t o"er t$e lotN E3'lain t$e le&al
(asis %or #o+r answer,
ANS1ER
1 C will $a"e a (etter ri&$t to t$e lot 'ro"ided t$at $e was
a(le to re&ister t$e lot +nder $is na)e in &ood %ait$,
1 Ander t$e Ci"il Code! in case o% do+(le sale o% real
'ro'ert#! t$e one w$o was a(le to re&ister t$e 'ro'ert#
in $is na)e in &ood %ait$ will (e dee)ed t$e owner
SELLER 9S NONBO1NER
STATASBCO9-
1 Article 1565 B &oods are sold (# a nonBowner or does not
sell +nder a+t$orit# or wit$ t$e consent o% t$e owner!
t$e (+#er ac*+ires no (etter title to t$e &oods t$an t$e
seller $ad
1 Stat+s o% t$e contract is "oid B D(P v. CA, 'ct. 19, 1885
A*T!+L, -3A3 6ub;ect to the pro)isions of this Title' where $oods are
sold by a person who is not the owner thereof' and who does not sell
them under authority or with the consent of the owner' the buyer
ac8uires no better title to the $oods than the seller had' unless the
owner of the $oods is by his conduct precluded from denyin$ the
sellerKs authority to sell
Nothin$ in this Title' howe)er' shall affect:
0-) The pro)isions of any factorsK act' recordin$ laws' or any other
pro)ision of law enablin$ the apparent owner of $oods to dispose of
them as if he were the true owner thereofH
02) The )alidity of any contract of sale under statutory power of sale or
under the order of a court of competent ;urisdictionH
12
0C) 5urchases made in a merchantKs store' or in fairs' or markets' in
accordance with the +ode of +ommerce and special laws 0n)
4AR9SPRA-ENCE
A ta2es B@s car wit$o+t consent
A sells it to C w$o does not 2now a(o+t t$e t$e%t
1 R+lin&:
C does not ac*+ire &ood title to t$e car
B was +nlaw%+ll# de'ri"ed o% $is car +nder
Art, 55D
C is not an 9PC since it is essential t$at A
s$o+ld $a"e at least a "oida(le title to t$e
car (A.nar v. <apdiangco)
ASNAR "s, GAP-9AN=CO (1? S 4:7
FACTS: Buyer "arella was short of 52'AAA' so asked 6antos to
allow her to show the re$istration of the car on her name "arella
ran off with the re$istration and sold the car to A7nar 6antos now
wants to reco)er the car from A7nar 4efense of A7nar:
#Article -3A.: Dhere the seller of $oods has a )oidable title thereto'
but his title has not been )oided at the time of the sale' the buyer
ac8uired a $ood title to the $oods' pro)ided he buys them in $ood
faith' for )alue and without notice of the sellers defect or title%
8EL-: there is unlawful deprivation since there was no valid
transfer
?nder Art -3A.' it is essential that the seller should ha)e a
)oidable title at least !t is )ery inapplicable where' as in this case'
the seller had not title at all
"arella did not ha)e any title to the property under liti$ation
because the same was ne)er deli)ered to him @e sou$ht
ownership or ac8uisition of it by )irtue of the contract "arella could
ha)e ac8uired ownership or title to the sub;ect matter thereof by the
deli)ery or tradition of the car to him The car in 8uestion was ne)er
deli)ered to the )endee by the )endor as to complete or
consummate the transfer of ownership by )irtue of the contract !t
should be recalled that while there was indeed a contract of sale
between 6antos and "arella' the latter as the )endee' took
possession of the sub;ect matter thereof by stealin$ the same while
it was in the custody of the formers son
0From Atty Batacans *e)iew Notes)
E3ce'tions
w$en t$e owner! (# $is cond+ct! is 'recl+ded %ro)
den#in& seller@s a+t$orit#
w$en t$e contrar# is 'ro"ided %or in recordin& laws
(Torrens S#ste)7
w$en t$e sale is )ade +nder stat+tor# 'ower o% sale
or +nder t$e order o% a co+rt o% co)'etent
0+risdiction
w$en t$e sale is )ade in a )erc$ant@s store (S+n
(ros. /. /elasco, 56 '% 516)
For one to be considered an innocent purchaser for )alue 0!5=)' the
seller should ha)e a )oidable title
ESTOPPEL (14?47
1 w$en a nonBowner sells a t$in& and deli"ers it
1 Later on! $e (eco)es t$e owner
1 Title 'asses to t$e (+#er or &rantee (# o'eration o%
law
A*T!+L, -4C4 Dhen a person who is not the owner of a thin$
sells or alienates and deli)ers it' and later the seller or $rantor
ac8uires title thereto' such title passes by operation of law to the
buyer or $rantee
BAR 566?
1 ;)at is t)e stat+s o* a sale 12 a non4o0ner7
BAR 5665
1 -C- is le*t inside a ta=i
1 -a=i driver gets it and dra*ts a deed o* sale 0)ere t)e lot is
sold to )i#.
1 Driver *orges t)e signat+re o* t)e o0ner and 0as a1le to
register t)e lot in )is na#e.
1 Driver sells it to A 0)o is a 1+2er in good *ait) and *or val+e
0)o 0as also a1le to register t)e lot in )is na#e.
1 Did driver get good title to t)e lot7 E=plain
1 Disc+ss t)e rig)ts o* A over t)e lot, i* an2.
ANS1ER
1 -)e ta=i driver did not ac>+ire good title to t)e lot 1eca+se )e
*orged t)e signat+re o* t)e real o0ner.
1 Since t)e vendor 0as a non4o0ner, A did not ac>+ire
o0ners)ip or good title to t)e lot despite )is registration. ?e
ac>+ires no 1etter title t)an t)e non4o0ner 0)o sold t)e lot to
)i#. $one o* t)e e=ceptions is availing.
SELLER 8AS CO9-ABLE T9TLE
ELE/ENTS (156:7
O BSeller $as a "oida(le title
O BTitle $as not (een a"oided at t$e
ti)e o% t$e sale
O BT$e (+#er ac*+ires a &ood title to
t$e &oods! 'ro"ided $e (+#s t$e)
in &ood %ait$
%or "al+e and
wit$o+t notice o% seller@s de%ect o%
title
1$at does Iti)e o% t$e saleJ )eanN
1 T$e '$rase )eans at t$e ti)e o% t$e deli"er# o% t$e
s+(0ect )atter since it is t$e %act o% -EL9CERG w$ic$
trans%ers owners$i'
SCENAR9O 1
1 A and B alread# a&reed on a sale
1 A $as "oida(le title! B does not 2now a(o+t it
1 A@s title is ann+lled a%ter 'er%ection (+t BEFORE deli"er#
1 P B does not o(tain &ood title o"er t$e t$in&
SCENAR9O 5
1 A and B alread# a&reed on a sale
1 A $as "oida(le title! B does not 2now a(o+t it
1 ann+l)ent ta2es 'lace a%ter 'er%ection and AFTER
deli"er#
1 B o(tains &ood title o"er t$e t$in& as lon& as $e is an
innocent '+rc$aser %or "al+e
9NNOCENT PARC8ASER FOR CALAE
One w$o (+#s 'ro'ert# o% anot$er!
wit$o+t notice t$at so)e ot$er
'erson $as a ri&$t to! or an interest in s+c$
'ro'ert#
'a#s a %+ll and %air 'rice %or t$e sa)e
at t$e ti)e o% s+c$ '+rc$ase! or (e%ore $e $as
notice o% t$e clai) or interest o% so)e ot$er 'erson
in t$e 'ro'ert#
4AR9SPRA-ENCE
A sold $is car to B! B iss+ed a c$ec2
C$ec2 (o+nced
C (o+&$t t$e car %ro) B! in &ood %ait$ and %or "al+e
1 R+lin&:
C ac*+ires &ood title to t$e car
A can onl# rescind (+t sale )+st (e set aside
(# t$e co+rt %irst (e%ore A can reco"er title
BAT A )+st rei)(+rse C t$e 'rice 'aid
(-agatac v. @i#ene.)
TA=ACTAC CS, 49/ENES
FACTS: Ta$actac sold the car to Feist' who sold it to 6anche7' who
sold it to Bimene7 Feist failed to pay' so Ta$actac wants to reco)er the
)ehicle from Bimene7 on the $round that she had been unlawfully
depri)ed of it by reason of Feists deception
8EL-: no unlawful deprivation since there was delivery
The point of in8uiry is whether plaintiff>appellant Trinidad +
Ta$actac has been unlawfully depri)ed of her car At first blush' it
would seem that she was unlawfully depri)ed thereof' considerin$ that
she was induced to part with it by reason of the chicanery practiced on
her by Feist +ertainly' swindlin$' like robber is an ille$al method of
depri)ation of property !n a manner of speakin$' plaintiff>appellant was
Mille$ally depri)edK of her car' for the way by which Feist induced her to
part with it is ille$al and punishable by law But does this #unlawful
depri)ation% come within the scope of Article 33J of the New +i)il
+odeE
The fraud and deceit practiced by Feist earmarks this sale as a
)oidable contract 0Art -CJA) Bein$ a )oidable contract' it is susceptible
13
of either ratification or annulment !f the contract is ratified' the
action to annul it is e(tin$uished 0Art -CJ2) and the contract is
cleansed from all its defects 0Article -CJ.' N++)H if the contract is
annulled' the contractin$ parties are restored to their respecti)e
situations before the contract and mutual restitution follows as a
conse8uence 0Art -CJG)
@owe)er' as lon$ as no action is taken by the party entitled'
either that of annulment or of ratification' the contract of sale
remains )alid and bindin$ Dhen plaintiff>appellant Ta$actac
deli)ered the car to Feist by )irtue of said )oidable contract of sale'
the title to the car passed to Feist <f course' the title that Feist
ac8uired was defecti)e and )oidable Ne)ertheless' at the time he
sold the car to Feli( his title was a)oided and he therefore conferred
$ood title on the latter' pro)ided he bou$ht the car in $ood faith' for
)alue and without notice of the defect in Feists title 0Art -3A.)
BAR 1DD
1 A sold car to (
1 ( paid 12 +sing a *alsi*ied c)ec:
1 ( registered t)e sale 0it) ,-'
1 ( sold t)e car to C 0)o :ne0 not)ing a1o+t t)e c)ec:
ANS1ER
1 A can recover *ro# C onl2 0)en t)e co+rt ann+ls t)e sale
1et0een ( and C
1 &n t)is case, ( )ad a voida1le title 0)ic) 0as not 2et
ann+lled at t)e ti#e C p+rc)ased t)e car. C ac>+ired t)e car
*or val+e, in good *ait) and 0it)o+t notice as to de*ect in (As
title. ?ence, C )as good title to t)e car and A can onl2
recover t)e car 12 rei#1+rsing C t)e p+rc)ase price t)e
latter paid.
BAR 5661
1 A 1o+g)t condo#ini+# *ro# developer
1 A 0as not given C-C
1 developer #ortgaged condo#ini+# to 1an: and #ortgage
0as *oreclosed, valid a+ction sale7
1 $'. (an: is not an &P/, a *inancial instit+tion is +nli:e a
nor#al 1+2er since S'P re>+ires a 1an: to loo: 1e2ond t)e
title and investigate
*emember +redit Transactions: "ort$a$or must be the owner
A*T!+L, 2AG3 The followin$ re8uisites are essential to the
contracts of pled$e and mort$a$e:
0-) That they be constituted to secure the fulfillment of a principal
obli$ationH
02) That the pled$or or mort$a$or be the absolute owner of the
thin$ pled$ed or mort$a$edH
0C) That the persons constitutin$ the pled$e or mort$a$e ha)e the
free disposal of their property' and in the absence thereof' that
they be le$ally authori7ed for the purpose
Third persons who are not parties to the principal obli$ation
may secure the latter by pled$in$ or mort$a$in$ their own property
PART FOAR:
LOSS! -ETER9ORAT9ON! FRA9TS AN- OT8ER BENEF9TS
R+les:
T9/E LOSS -ETER9ORAT9ON FRA9TS
PREPARATORG
STA=E
SELLER SELLER SELLER
CONSA//AT9ON BAGER BAGER BAGER
BEFORE
-EL9CERG AFTER
PERFECT9ON
SELLER BAGER BAGER
AFTER
PERFECT9ON AN-
AFTER -EL9CERG
BAGER BAGER BAGER
*emember: res perit domino 0owner bears the loss)
14
PART F9CE: RE/E-9ES 9N CASE OF BREAC8
Breac$ (# Seller:
Breac$ Relie%
NonBdeli"er# S'eci%ic
'er%or)ance
wit$ da)a&es
1arrant#
BB Seller $as
ri&$t to sell
BB A&ainst
e"iction
BB 8idden
de%ects
BB NonB
a''arent
ser"it+de
Acce't &oods
'l+s
reco+')ent
Acce't &oods
'l+s da)a&es
-on@t
acce't 'l+s
da)a&es
Rescind!
re%+se to
acce't or
ret+rn
-ist+r(ance
in 'ossession
S+s'end
'a#)ent o%
'rice +ntil
end o%
dist+r(ance
NOTE:
Tres'assin&
is not
dist+r(ance
To know that seller committed breach' know first the obli$ations of
the seller 0see pre)ious discussion)
*ecoupment 1 means to $et e)erythin$ back' restored to the place
where you were before the contract
Arrow 0mutally e(clusi)e) means that you cannot do e)erythin$
You must choose your option
BAR 566:
- S'o+ses Bion& and Linda are sellin& t$eir $o+se,
Linda ne&otiated wit$ Ra# and t$e# a&reed on a %air
'rice o% P5 /
- Ra# con%ir)ed $is intention o% (+#in& t$e $o+se
t$ro+&$ a letter,
- Ra# 're'ared a deed o% sale and a )ana&er@s c$ec2
%or P5 /, A%ter recei"in& t$e P5/! Bion& si&ned t$e
deed o% sale (+t Linda was a(road
- 1$en Linda ret+rned! s$e re%+sed to si&n since s$e
c$an&ed $er )ind,
- -oes Ra# $a"e an# ca+se o% action a&ainst Bion& and
LindaN Can $e reco"er da)a&esN
ANS1ER
Ra# can %ile a case %or s'eci%ic 'er%or)ance or rescission
wit$ a clai) %or da)a&es in eac$ case considerin& t$at Linda
co))itted a (reac$ o% a 'er%ected contract o% sale,
Be able to distin$uish $uaranty from warranty
Breac$ (# B+#er
Breac$ Relie%
/o"a(le is
sold and
deli"er# is
+nacce'ted
Rescission
-eli"er# is
acce'ted (+t
no 'rice is
'aid
Rescission
Title is
'assed (+t
'rice is not
'aid
S+e %or 'rice
'l+s da)a&es

Re'+diation
o% sale (e%ore
deli"er#
Rescission
wit$ da)a&es

9na(ilit# to
'a# (e%ore
deli"er#
Rescission
wit$ da)a&es

-oes not 'a#
'rice
Possessor#
Lien
Sto''a&e in
transit+
S'ecial
ri&$t to
resale
S'ecial
ri&$t to
rescind
Conce't: An'aid Seller
w$ole o% t$e 'rice $as not (een 'aid or tendered
ne&otia(le doc+)ent o% title was recei"ed as conditional
'a#)ent and condition was (ro2en
S'ecial Re)edies
- Possessor# Lien
- Sto''a&e in transit+
- S'ecial ri&$t o% resale
- S'ecial ri&$t to rescind
S'ecial Ri&$ts ?>4 0resale and rescind) can onl#
(e +sed w$en Ri&$t 1 or 5 $as (een e3ercised
As special ri$hts' you must first choose either possessory lien or
stoppa$e in transitu before you can choose between resale or rescind
Possessor# Lien (155:7
owners$i' $as (een trans%erred to t$e (+#er
Seller is still +n'aid
seller )a# retain &oods %or t$e 'rice w$ile still
in 'ossession o% t$e &oods
Can onl# (e e3ercised w$en
&oods were sold wit$o+t an# sti'+lation as to
credit OR
&oods were sold on credit (+t ter) o% credit
$as e3'ired OR
(+#er (eco)es insol"ent
A*T!+L, -32. 6ub;ect to the pro)isions of this Title' notwithstandin$
that the ownership in the $oods may ha)e passed to the buyer' the
unpaid seller of $oods' as such' has:
0-) A lien on the $oods or ri$ht to retain them for the price while he is in
possession of themH
02) !n case of the insol)ency of the buyer' a ri$ht of stoppin$ the $oods
in transitu after he has parted with the possession of themH
0C) A ri$ht of resale as limited by this TitleH
04) A ri$ht to rescind the sale as likewise limited by this Title
Dhere the ownership in the $oods has not passed to the buyer' the
unpaid seller has' in addition to his other remedies a ri$ht of
withholdin$ deli)ery similar to and coe(tensi)e with his ri$hts of lien
and stoppa$e in transitu where the ownership has passed to the buyer
0n)
Sto''a&e in Transit+ (155:! 15?67
- Seller no lon&er $as 'ossession o% t$in&
- B+#er (eco)es insol"ent
- Seller can sto' t$e &oods in transit+ or res+)e
'ossession at an# ti)e w$ile &oods are in transit
- Seller en0o#s sa)e ri&$ts as i% $e ne"er 'arted
'ossession wit$ t$in&
=oods are dee)ed in transit
Period (etween deli"er# to t$e carrier %or
trans)ission to t$e (+#er +ntil (+#er clai)s t$e)
%ro) t$e carrier
=oods are re0ected (# t$e (+#er and carrier
contin+es to $a"e 'ossession e"en i% t$e seller
re%+ses to ta2e &oods (ac2
A*T!+L, -3CA 6ub;ect to the pro)isions of this Title' when the buyer
of $oods is or becomes insol)ent' the unpaid seller who has parted
with the possession of the $oods has the ri$ht of stoppin$ them in
transitu' that is to say' he may resume possession of the $oods at any
time while they are in transit' and he will then become entitled to the
same ri$hts in re$ard to the $oods as he would ha)e had if he had
ne)er parted with the possession 0n)
!n this case' time is of the essence
Stat+s o% Sale /ade (# B+#er w$ile in transit+
- &* 1+2er sells t)ing 0it)o+t consent o* seller 0)ile in
transit+, t)e sellerAs rig)t o* stoppage in transit+ &S $'-
AFFEC-ED (155)
- Rig)t o* stoppage D'ES $'- de*eat title o* an innocent
p+rc)aser *or val+e 0)o is iss+ed a negotia1le
doc+#ent o* title (155)
"utually e(clusi)e
15
A*T!+L, -3C3 6ub;ect to the pro)isions of this Title' the unpaid
sellerKs ri$ht of lien or stoppa$e in transitu is not affected by any
sale' or other disposition of the $oods which the buyer may ha)e
made' unless the seller has assented thereto
!f' howe)er' a ne$otiable document of title has been issued for
$oods' no sellerKs lien or ri$ht of stoppa$e in transitu shall defeat
the ri$ht of any purchaser for )alue in $ood faith to whom such
document has been ne$otiated' whether such ne$otiation be prior
or subse8uent to the notification to the carrier' or other bailee who
issued such document' of the sellerKs claim to a lien or ri$ht of
stoppa$e in transitu 0n)
S'ecial ri&$t to Resell =oods
- A"aila(le onl# a%ter e3ercise o% eit$er 'ossessor# lien
or sto''a&e in transit+
- Can (e e3ercised w$en:
&oods are 'eris$a(le in nat+re
seller e3'ressl# reser"es t$e ri&$t to resell
in case o% (+#er@s de%a+lt
(+#er $as (een in de%a+lt %or an
+nreasona(le 'eriod o% ti)e
S'ecial Ri&$t to Rescind . 155:! 15?4
- A%ter e3ercise o% 'ossessor# lien or sto''a&e
- /a# $old (+#er lia(le %or da)a&es
A*T!+L, -3C4 An unpaid seller ha)in$ the ri$ht of lien or ha)in$
stopped the $oods in transitu' may rescind the transfer of title and
resume the ownership in the $oods' where he e(pressly reser)ed
the ri$ht to do so in case the buyer should make default' or where
the buyer has been in default in the payment of the price for an
unreasonable time The seller shall not thereafter be liable to the
buyer upon the contract of sale' but may reco)er from the buyer
dama$es for any loss occasioned by the breach of the contract
The transfer of title shall not be held to ha)e been rescinded by an
unpaid seller until he has manifested by notice to the buyer or by
some other o)ert act an intention to rescind !t is not necessary that
such o)ert act should be communicated to the buyer' but the $i)in$
or failure to $i)e notice to the buyer of the intention to rescind shall
be rele)ant in any issue in)ol)in$ the 8uestion whether the buyer
had been in default for an unreasonable time before the ri$ht of
rescission was asserted 0n)
Rescission o% Sale o% 9))o"a(le
I 15D5 B in t$e sale o% i))o"a(les! e"en i% it was
sti'+lated t$at +'on %ail+re to 'a# t$e 'rice at t$e ti)e
a&reed +'on t$e rescission o% t$e contract s$all o% ri&$t
ta2e 'lace! t$e "endee )a# 'a#! e"en a%ter t$e e3'iration
o% t$e 'eriod FOR AS LON= AS NO -E/AN- FOR
RESC9SS9ON OF T8E CONTRACT 8AS BEEN /A-E APON
89/ E9T8ER 4A-9C9ALLG OR BG A NOTAR9AL ACT
A*T!+L, -3J2 !n the sale of immo)able property' e)en thou$h it
may ha)e been stipulated that upon failure to pay the price at the
time a$reed upon the rescission of the contract shall of ri$ht take
place' the )endee may pay' e)en after the e(piration of the period'
as lon$ as no demand for rescission of the contract has been made
upon him either ;udicially or by a notarial act After the demand' the
court may not $rant him a new term 0-3A4a)
BAR 566?
- F and G a&reed to a sale o% land
- 'a#)ent and deli"er# will (e on Fe(r+ar# 1! 5665
- CLAASE: i% no 'a#)ent is done on Fe(r+ar# 1! 5665!
t$e sale is AATO/AT9CALLG RESC9N-E-
- G did not 'a# on Fe(r+ar# 1! 5665 (+t o%%ered to 'a# ?
da#s later
- 9s t$e contract RESC9N-E-N
ANS1ER
- No, Ander Article 15D5! w$en an i))o"a(le is sold
and t$ere is a sti'+lation t$at +'on %ail+re to 'a# t$e
'rice at t$e ti)e a&reed +'on t$e rescission o% t$e
contract s$all o% ri&$t ta2e 'lace! t$e "endee )a#
'a#! e"en a%ter t$e e3'iration o% t$e 'eriod FOR AS
LON= AS NO -E/AN- FOR RESC9SS9ON OF T8E
CONTRACT 8AS BEEN /A-E APON 89/ E9T8ER
4A-9C9ALLG OR BG A NOTAR9AL ACT
SALE ON 9NSTALL/ENT
RECTO LA1 . 144
O'tions w$en seller discontin+es instal)ents
e3act %+l%ill)ent o% t$e o(li&ation
cancel t$e sale i% t$e (+#er %ails to 'a# T1O OR
/ORE install)ents
%oreclose t$e c$attel )ort&a&e i% t$e (+#er %ails to 'a#
T1O OR /ORE install)ents (wit$o+t ri&$t to s+e %or
+n'aid (alance7
Recto Law: Sale o% /o"a(les on 9nstall)ents
Re)edies +nder 144 are alternati"e and not c+)+lati"e,
T$is is (ased on t$e 'rinci'le t$at no one s$o+ld enric$ $i)sel%
at t$e e3'ense o% anot$er,
1$en t$e +n'aid seller $as alread# en%orced t$e K (#
collectin& t$e a)o+nt d+e! $e can no lon&er rescind or cancel t$e
sa)e, 8e cannot also %oreclose t$e )ort&a&e o"er t$e S/, For
t$e e3ercise o% one in %+ll %orecloses t$e ri&$t to e3ercise
re)edies ($onato v. CA, $ov. "", 1885)
Recto Law: Sale o% /o"a(les on 9nstall)ents
- 9% t$e seller %orecloses t$e c$attel )ort&a&e! it can no
lon&er s+e %or de%icienc#<(alance o% '+rc$ase 'rice
- 9% t$e seller c$oses s'eci%ic 'er%or)ance in a re'le"in
s+it %or da)a&es! seller is still entitled to alias writ o%
e3ec+tion %or +nsatis%ied (alance (&nd+strial v. Ra#ire.7
*ecall: !n chattel mort$a$e' the $eneral rule is that there is ri$ht to the
balance and to the e(cess The e(ception is the *ecto law
Take note: <ptions are mutually e(clusi)e
/ACE-A LA1 . RA :555
COCERE- SALES
residential real estate
sales on install)ents
%inancin& o% real estate on install)ent 'a#)ents
residential condo)ini+) a'art)ents
1$en t$e (+#er de%a+lts
N+)(er o%
install)ents
O'tion 1 O'tion 5
Less t$an 5
ann+al
=race 'eriod o% :6
da#s
9% no 'a#)ent wit$in
&race 'eriod! sale will
(e cancelled wit$in ?6
da#s %ro) recei't o%
notice o% cancellation
5 or )ore
ann+al
Pa# wit$o+t interest
wit$in &race 'eriod
CAS8 SARREN-ER
CALAE P 56T
=race 'eriod: 1 )ont$
%or e"er# #ear o%
install)ent )ade
PLAS 5T %or e"er# #ear
in e3cess o% 5 #ears
BAT
=race 'eriod: +sed
once e"er# 5 #ears
NOT /ORE T8AN D6T
o% install)ents )ade
9nstall)ents incl+de
o'tion )one#!
down'a#)ent

Cas$ S+rrender Cal+e
4 #ears o% install)ents at P166!666 'er #ear P 56T o%
P466!666 P P566!666
: #ears o% install)ents at P166!666 a #ear P 56T o%
P:66!666 P P?66!666 U 5T (P:66!6667 P P??6!666
1$en de"elo'er co))its (reac$ o% contract: P- D5;
B+#er desists %ro) 'a#in& %+rt$er install)ents (eca+se
Owner or de"elo'er %ails to de"elo' t$e s+(di"ision or
condo)ini+) accordin& to a''ro"ed 'lans and wit$in
t$e ti)e li)it
B+#er is entitled to rei)(+rse)ent o% all install)ents
)ade
BAR 5665
A (o+&$t a residential s+(di"ision lot
A 'aid install)ents %or 4 )ont$s
-e"elo'er %ailed to de"elo' t$e s+(di"ision accordin& to
a''ro"ed 'lans and s'eci%ications wit$in t$e ti)e %ra)e,
A wrote t$e de"elo'er t$at $e will sto' 'a#)ent,
-e"elo'er cancelled t$e sale and in%or)ed A t$at $is
'a#)ents are %or%eited,
1as t$e action o% t$e de"elo'er 'ro'erN
-isc+ss t$e ri&$ts o% A +nder t$e circ+)stances,
16
S+''osin& de"elo'er de"elo'ed t$e s+(di"ision (+t
A a%ter 'a#in& 4 )ont$s o% install)ents sto''ed
'a#in&! disc+ss t$e ri&$ts and o(li&ations o% t$e
'arties,
ANS1ER
NO, t$e action o% t$e de"elo'er is wron&, Ander P-
D5;! a (+#er o% a s+(di"ision lot )a# desist %ro)
'a#in& %+rt$er install)ents w$en t$e de"elo'er %ails
to de"elo' t$e s+(di"ision accordin& to t$e a''ro"ed
'lans and wit$in t$e 'eriod a&reed on, T$e (+#er )a#
&et all t$e install)ents $e )ade and t$ese are NOT
dee)ed %or%eited,
Ass+)in& t$e de"elo'er de"elo's t$e s+(di"ision
(+t A re%+ses to 'a# a%ter 4 )ont$l# install)ents! $e
s$all (e entitled to 'a# wit$o+t interest $is
install)ents in arrears wit$in a &race 'eriod o% 4
)ont$s or 1 )ont$ %or e"er# ann+al install)ent,
9% $e %ails to 'a# wit$in t$e &race 'eriod! $e is entitled
to (e rei)(+rsed 56T o% $is 'a#)ents since $e $as
)ade at least 5 ann+al install)ents,
PART SECEN : EFT9N=A9S8/ENT OF SALE
=ROAN-S
'a#)ent<'er%or)ance
loss o% S/
condonation<re)ission
con%+sion<)er&er o% rts o% creditor > de(tor
co)'ensation
no"ation
ann+l)ent
rescission
con"entional<le&al rede)'tion 0additional)
*ecall: 5acto de *etro 0sale with ri$ht to repurchase) 1 seller has
ri$ht to redeem
RE-E/PT9ON
*i$ht to redeem must already be incorporated in the contract of sale
!t must reduced in public instrument 06tatute of Frauds)
&: +an you redeem if there is no period pro)idedE
A: Yes' the law will automatically set it at 4 years
A)on& CoB8eirs (167
An $eir sells $is $ereditar# ri&$ts to a stran&er (e%ore
'artition
An# or all coB$eirs )a# (e s+(ro&ated to (+#erOs
ri&$ts (# rei)(+rsin& $i) %or t$e 'rice
CoB$eirs )+st redee) wit$in 1 )ont$ %ro) ti)e t$e#
were noti%ied in writin& o% t$e sale
A*T!+L, -AGG 6hould any of the heirs sell his hereditary ri$hts to
a stran$er before the partition' any or all of the co>heirs may be
subro$ated to the ri$hts of purchaser by reimbursin$ him for th price
of the sale' pro)ided they do so within the period of one month from
the time they were notified in writin$ of the sale by the )endor
0-A./a)
A)on& CoBOwners (1:567
9% a coBowner sells $is s$are to a t$ird 'erson
A coBowner )a# redee) %ro) t$e t$ird 'erson
R+le in case o% rede)'tion (# two or )ore coBowners:
Rede)'tion s$all (e in 'ro'ortion to t$e s$are t$e# )a#
$a"e in t$e t$in& owned in co))on
A*T!+L, -.2A A co>owner of a thin$ may e(ercise the ri$ht of
redemption in case the shares of all the other co>owners or of
any of them' are sold to a third person !f the price of the
alienation is $rossly e(cessi)e' the redemptioner shall pay only a
reasonable one
6hould two or more co>owners desire to e(ercise the ri$ht of
redemption' they may only do so in proportion to the share they
may respecti)ely ha)e in the thin$ owned in common 0-322a)
BAR 5661! 5665
1$en can a coBowner le&all# redee) 'ro'ert#N
A)on& Ad0oinin& Owners
R+ral Land . area s$o+ld not e3ceed 1 $ectare +nless
&rantee does not own r+ral land
Ar(an Land . s)all +r(an land is sit+ated t$at a )a0or
'ortion cannot (e +sed %or an# 'ractical '+r'ose wit$in
a reasona(le 'eriod
Sale o% Credit in Liti&ation (1:?47
Creditor assi&ns $is ri&$t to credit to a t$ird 'erson
-e(tor )a# e3tin&+is$ t$e credit (# rei)(+rsin& t$e
assi&nee %or t$e 'rice $e 'aid %or t$e credit
-e(tor )a# rei)(+rse wit$in ?6 da#s %ro) ti)e
assi&nee de)ands 'a#)ent %ro) $i)
A*T!+L, -.C4 Dhen a credit or other incorporeal ri$ht in liti$ation is
sold' the debtor shall ha)e a ri$ht to e(tin$uish it by reimbursin$
the assi$nee for the price the latter paid therefore' the ;udicial
costs incurred by him' and the interest on the price from the day
on which the same was paid
A credit or other incorporeal ri$ht shall be considered in liti$ation
from the time the complaint concernin$ the same is answered
The debtor may e(ercise his ri$ht within thirty days from the date
the assi$nee demands payment from him 0-3C3)
,(ample: A borrows 5 -" from B B sues A to $et 5 -" plus interest
B cannot wait and sells his ri$ht to + to $et the 5 -" for 5 /AA'AAA A
can talk to + that instead of payin$ 5-"' A will instead pay + 5
/AA'AAA
Take note: #assi$nment% in sales is different
Period o% Rede)'tion
Ri&$t to redee) s$all not (e e3ercised e3ce't wit$in ?6
da#s %ro) notice in writin& (# 'ros'ecti"e seller or
seller
-eed o% sale s$all not (e recorded in Re&istr# o%
Pro'ert# +nless wit$ sellerOs a%%ida"it t$at $e $as sent
written notices to all 'ossi(le rede)'tioners (1:5?7
A*T!+L, -.2C The ri$ht of le$al pre>emption or redemption shall not
be e(ercised e(cept within thirty days from the notice in writin$ by the
prospecti)e )endor' or by the )endor' as the case may be The deed
of sale shall not be recorded in the *e$istry of 5roperty' unless
accompanied by an affida)it of the )endor that he has $i)en written
notice thereof to all possible redemptioners
The ri$ht of redemption of co>owners e(cludes that of ad;oinin$
owners
6eller is obli$ated to co>owner' ad;oinin$ owner' debtor' co>heir to said
a written notice if he sells to a stran$er
This is not strictly followed but it is nonetheless the law
!f you were not informed' you can file an action for breach of this
pro)ision
*edemption W repurchase
PARTG E9=8T . BALK SALE LA1
This is still $ood law 1 a fa)orite of Bar ,(aminers
Transactions Co"ered
Sale! trans%er! )ort&a&e or assi&n)ents o%:
(a7 all or s+(stantiall# all stoc2 o% &oods! wares! )erc$andise!
'ro"isions or )aterials ot$erwise t$an in t$e ordinar# co+rse o%
trade
((7 all or s+(stantiall# all o% t$e (+siness or trade t$ereto
cond+cted (# t$e seller! )ort&a&e! trans%eror or assi&nor and
17
(c7 all or s+(stantiall# all! o% t$e %i3t+res and e*+i')ent +sed
in > a(o+t t$e (+siness o% t$e seller! )ort&a&or! trans%eror or
assi&nor
O(li&ations o% Seller
I -eli"er# o% sworn state)ent o% listin& o% creditors
I 'roBrata a''lication o% 'roceeds
I written ad"ance disclos+re to creditors

Penalt# %or Ciolation
9)'rison)ent P not less t$an : )os, OR
Fine P not e3ceedin& P5!666,66 OR (ot$
BAR 566;
I See2in& to strea)line its o'erations and to (ail o+t
its losin& "ent+res! t$e stoc2$olders o% F Cor'oration
+nani)o+sl# ado'ted a 'ro'osal to sell s+(stantiall#
all o% t$e )ac$ineries and e*+i')ent +sed in and o+t
its )an+%act+rin& (+siness and to sin2 t$e 'roceeds
o% t$e sale %or t$e e3'ansion o% its car&o trans'ort
ser"ices,
I 1o+ld t$e transaction (e co"ered (# t$e 'ro"isions
o% t$e B+l2 Sales LawN
ANS1ER
I Ges! t$e 'ro'osed sale is co"ered (# t$e B+l2 Sales
Law, T$e sale in"ol"es all or s+(stantiall# all! o% t$e
%i3t+res and e*+i')ent +sed in > a(o+t t$e (+siness
o% t$e seller, 8ence! F Cor' )+st deli"er a sworn
state)ent o% listin& o% creditors! )a2e a 'roBrata
a''lication o% 'roceeds and a written ad"ance
disclos+re to creditors

That is still the duty of the corporation despite the fact that there is
no mention of creditors
RA ;:5 . RETA9L TRA-E L9BERAL9SAT9ON ACT OF 5666
Retail Trade )eans an# act! occ+'ation or callin& o%
$a(it+all# sellin& direct to t$e &eneral '+(lic )erc$andise!
co))odities or &ood %or cons+)'tion,
&: Are sales of cars includedE
A: Not included because it is not for consumption 0"aam asked
Atty 4uremdes and this was his answer)
#for consumption% must be read in entirety 1 public
merchandise for consumption' commodities for consumption or
$ood for consumption
T$e restriction o% t$is law s$all not a''l# to t$e
%ollowin&::
(a7 Sales (# a )an+%act+rer! 'rocessor!
la(orer! or wor2er! to t$e &eneral '+(lic t$e
'rod+cts )an+%act+red! 'rocessed or 'rod+ced
(# $i) i% $is ca'ital does not e3ceed P
166!666,66;
((7 Sales (# a %ar)er or a&ric+lt+rist sellin&
t$e 'rod+cts o% $is %ar);
(c7 Sales in resta+rant o'erations (# a $otel
owner or innB2ee'er irres'ecti"e o% t$e a)o+nt
o% ca'ital: Pro"ided! T$at t$e resta+rant is
incidental to t$e $otel (+siness: and
(d7 Sales w$ic$ are li)ited onl# to 'rod+cts
)an+%act+red! 'rocessed or asse)(led (# a
)an+%act+rer t$ro+&$ a sin&le o+tlet!
irres'ecti"e o% ca'italiEation,
I8i&$Bend or l+3+r# &oodsJ s$all re%er to &oods
w$ic$ are not necessar# %or li%e )aintenance and w$ose
de)and is &enerated in lar&e 'art (# t$e $i&$er inco)e
&ro+'s, L+3+r# &oods s$all incl+de! (+t are not li)ited to!
'rod+cts s+c$ as: 0ewelr#! (randed or desi&ner clot$in&
and %ootwear! wearin& a''arel! leis+re and s'ortin&
&oods! electronics and ot$er 'ersonal e%%ects
Treat)ent o% Nat+ralBBorn CitiEens
Nat+ralB(orn citiEen o% t$e P$ili''ines w$o $as lost
$is P$ili''ine citiEens$i' (+t w$o resides in t$e
P$ili''ines s$all (e &ranted t$e sa)e ri&$ts as
Fili'ino citiEens %or '+r'oses o% t$is Act,
Forei&n E*+it# Partici'ation
Cate&or# Ca'italiEation Owners$i' Co))ent
A V ASW5,5 / 1$oll# (#
Fili'i
nos

B ASW5,5/B
VASW;,5/
1st 5 #ears
%ro)
t$is
lawB
:6T
%orei&
n
T$erea%terB
166T
%orei&
nB
owne
d
9n"est)ent
s$all
not
(e
9% %orei&n
e*+it#
L6T!
)+st
o%%er
?6T
o%
t$eir
e*+it#
to
Fili'in
os
wit$in
ei&$t
#ears
%ro)
C ASW;,5 / or
)ore
1$oll#
%orei&
nB
owne
d
less
t$an
ASW?6!
666
start o%
o'era
tions
- ASW556!666 or
)ore
8i&$Bend or
l+3+r#
'rod+ct
s

/aintenance o% Ca'ital
Forei&n in"estor )+st )aintain t$e %+ll a)o+nt o% t$e
'rescri(ed )ini)+) ca'ital
ANLESS %orei&n in"estor $as noti%ied t$e SEC and t$e
-T9 o% its intention to re'atriate its ca'ital and cease
o'erations in t$e P$ili''ines,
Fail+re to )aintain t$e %+ll a)o+nt o% t$e 'rescri(ed
)ini)+) ca'ital 'rior to noti%ication o% SEC and t$e -T9
P 'enalties or restrictions on an# %+t+re tradin&
acti"ities<(+siness in t$e P$ili''ines,
Forei&n retail stores s$all sec+re a certi%ication %ro) t$e
Ban&2o Sentral n& Pili'inas and t$e -T9! w$ic$ will
"eri%# or con%ir) inward re)ittance o% t$e )ini)+)
re*+ired ca'ital in"est)ent,
X+ali%ications o% Forei&n Retailers
(a7 A )ini)+) o% ASW566 /illion net wort$ in its 'arent
cor'oration %or Cate&ories B and C! and ASW56 /illion
net wort$ in its 'arent cor'oration %or Cate&or# -;
((7 Fi"e retailin& (ranc$es or %ranc$ises in o'eration
an#w$ere aro+nd t$e world +nless s+c$ retailer $as at
least one store ca'italiEed at a )ini)+) o% ASW55
/illion;
(c7 Fi"e (57B#ear trac2 record in retailin&; and
(d7 Onl# nationals %ro)! or 0+ridical entities %or)ed or
incor'orated in co+ntries w$ic$ allow t$e entr# o%
Fili'ino retailers s$all (e allowed to en&a&e in retail
trade in t$e P$ili''ines, 0based on the principle of
reciprocity)
These 8ualifications are cumulati)e
Pro)otion o% Locall#B/an+%act+red Prod+cts
For 16 #ears a%ter t$e e%%ecti"it# o% t$is Act! at least ?6T
o% t$e a&&re&ate cost o% t$e stoc2 in"entor# o% %orei&n
retailers %allin& +nder Cate&ories B and C and 16T %or
Cate&or# - s$all (e )ade in t$e P$ili''ines,
X+ali%ied %orei&n retailers s$all not (e allowed to en&a&e
in certain retailin& acti"ities o+tside t$eir accredited
stores t$ro+&$ t$e +se o% )o(ile or rollin& stores or
carts! t$e +se o% sales re'resentati"es! doorBtoBdoor
sellin&! resta+rants and sariBsari stores and s+c$ ot$er
si)ilar retailin& acti"ities: Pro"ided! T$at a detailed list
o% 'ro$i(ited acti"ities s$all
$erea%ter (e %or)+lated (# t$e -T9,
18
Penalties
9)'rison)ent o% not less t$an : #ears and 1 da# (+t
not )ore t$an #ears! and a %ine o% not less t$an P1
/illion (+t not )ore t$an 56 /illion ,
9n t$e case o% associations! 'artners$i's or
cor'orations . 'enalt# i)'osed on 'artners!
'resident! directors! )ana&er and ot$er o%%icers
res'onsi(le %or t$e "iolation,
Forei&n o%%ender B de'orted i))ediatel# a%ter ser"ice
o% sentence,
Fili'ino '+(lic o%%icer o%%enderB 'enalt# 'l+s
dis)issal and 'er)anent dis*+ali%ication %ro) '+(lic
o%%ice,
Keep smiling - it makes people wonder what you've been up to.
-- Author Unknown
19

Sales PowerPoint in

Caricato da

Informazioni sul documento

Descrizione originale:

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Sales PowerPoint in

Caricato da

Copyright:

Formati disponibili

Sales Law Review for Seniors PowerPoint Presentations and Lectures of Atty. Maria Christina S.

Potrebbero piacerti anche