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onerous.
Articles / Laws to Remember: 1458, 1467,
4. Onerous (1350) – COS is essentially
1477 transfer of ownership, 1505, 559 who
onerous. Otherwise, it may be another
can transfer xxx, 1504, 1544, 1484 Recto
contract or any other act like it may be a
Law, R.A. 6552, 1602, 1606, 1620, 1623,
donation if there is no compensation for the
Redemption xxx
transfer of ownership to the other party.
Q: A obliged himself to deliver a certain
5. Commutative (2010) – meaning there is
thing to B. Upon delivery, B would pay a
equivalency in the value of the prestation to
sum of money to A. Is that a contract of
be performed by both parties. Normally, the
sale?
thing sold would be equal to the price paid
A: Not necessarily. Even if there is an
by the other party (buyer).
obligation to deliver, if there is no obligation
to transfer ownership, it will not be a
Exception: a contract of sale which is an
contract of sale. It may be a contact of
aleatory contract like sale of hope. In sale of
lease.
hope, the obligation of 1 party will arise
upon the happening of a certain event or
Memorize: Art. 1458
condition.
Note: Sale is a contract, so the general
Example Sale of Hope: Sale of a lotto ticket,
principles in oblicon are applicable to sale
PCSO will have the obligation to pay you
but note that there are provisions which are
only if you got all the 4 or 6 numbers which
contrary.
are drawn
Characteristics of Contract of Sale (COS)
Another Example of Aleatory: Insurance
1. Consensual (1475) – COS is
consensual, it is perfected by mere meeting
6. Nominate (1458)
of the minds of the parties as to the object
and price.
Classification of Contract of Sale
Note: There is 1 special law which requires
1. As to Nature of Subject Matter
a particular form for the validity of a contract
a. Movable
of sale – in that sale, it can be said that kind
b. Immovable
of sale is a formal contract → Cattle
Registration Decree. In a sale of large
Q: Why there is a need to determine?
cattle, the law provides that the contract of
A: Because some concepts will apply if the
sale of large cattle must be: in a public
object is movable or some laws will apply if
instrument, registered and a certificate of
the object is immovable.
title should be obtained in order for the sale
to be valid. But otherwise, the other
Examples: Under the Statute of Frauds, you
contracts are perfected by mere consent or
have to determine if the object if movable or
mere meeting of the minds.
immovable in order that statute of frauds will
apply. The Recto law will apply if the object
2. Principal – sale is a principal contract, it
is movable. The Maceda law will apply if the
can stand on its own. It does not depend on
object is realty. Article 1544 or Double Sale
other contracts for its existence and validity.
will require you to determine the nature of
the subject matter.
3. Bilateral (1458) – necessarily in a COS,
both parties will be obligated. It is not
2. As to Nature
possible that only 1 party is obligated
a. Thing
Q: What is the status of the contracts 2. The thing must be licit – not contrary to
under 1491? law
A: Prof. Tolentino – voidable
Note: Before perfection, there is one Q: If the offeree files an action for
contract which maybe perfected. Before damages, may that action prosper there
perfection meaning in the negotiation stage being option money given?
→ this contract is known as the option A: Yes, because with the option money, an
contract. option contract is perfected, the offeror is
bound to give the offeree, 2 years within
Option Contract which to decide and failure to that he is
Sanchez vs. Rigos liable not based on perfected COS but on
Facts: Mrs. Rigos offered to sell her land to perfected contract of option.
Sanchez for a certain price. Rigos gave
Sanchez 2 years within which to decide. Option Money (OM) vs. Earnest Money
(Note: The optionee or promisee or offeree (EM)
is not bound to purchase but he has the OM is not part of the price while EM is part
option to buy or purchase). In this case, of the price and at the same time, it is a
Sanchez has the option. Before the lapse of proof of the perfection of the contract.
2 years, Sanchez told Rigos that he is
buying and offered the price agreed upon G.R.: A COS may be in any form. Article
but Rigos refused claiming that she was not 1483 provides that a COS may be in writing,
bound by the written option agreement partly in writing xxx. This provision is exactly
because no option money (consideration) the same as Article 1356 in contracts which
was given by Sanchez. According to Rigos, provides that contracts may be obligatory in
the option contract is void. whatever form they may have been entered
Held: Since Sanchez accepted the offer and into provided all the essential requisites are
decided to buy within the period before the present. But then again even Article 1356
offer was withdrawn, a perfected COS was just like Article 1475 would provide for
created even without option money. In this exceptions.
case, there was no option contract because Exceptions: The law may require a
it was merely an option agreement. particular form for its validity. The Cattle
Therefore, there was merely an offer on the Registration Decree is an example - where
part of Rigos and once the offer was the law itself provides for a particular form
accepted before it was withdrawn, for the validity of the sale. But the law may
regardless of whether option money was require particular form for its enforceability
given and in this case no option money was of the sale and that would be 1403 or the
given, a perfected COS was created. statute of frauds. Concretely, the sale of a
Note: Iba pag may option money parcel of land if not in writing is valid but
Q: 2 years within which to decide – unenforceable. It is not void. Note that the
assuming there was option money, price of the land is irrelevant if immovable.
before the offeree could decide to buy,
the offeror withdraw on the 6th month. Example: Before, the sale of a land for P300
(a) Can the offeree on the 10th is valid and enforceable even if not in
month say “I would like to writing. But presently, it has to be in writing
buy”? to be enforceable. The price is still
(b) Can the buyer compel the irrelevant.
seller to sell?
A: (a) No. If the object of the sale is movable, you
have to consider not the value of the thing
2. By Mere Consent or Agreement of the 3. Use by the Vendee of His Rights with the
Parties – if at the time of the sale, Vendor’s Consent
possession to the goods cannot be
SALE OF REALTY
Q: What really determines the place of The statement of the seller’s opinion is not
delivery? as a rule considered an express warranty.
A: SC said this indication as to the Example: “This is the best piña cloth” → it
intention of the parties as to the place of may turn out that there are better piña cloth.
delivery is the manner and place of
payment. If there is an agreement as to As long as the seller is not an expert on that
where and how the price is to be paid that field, that would be treated merely as an
would be the place considered for purposes opinion and there can be no liability for
of delivery and therefore for transfer of breach of an express warranty.
ownership.
BE: “A” sold a land to B for P1M in
Read 1582 Antipolo. As agreed upon P100,000 will
be paid upon the signing of the DOS.
Obligations which cannot be Waived: The balance will be paid within 30 days
1. Obligation to transfer from the time the occupants (squatters)
2. Obligation to deliver of the land are evicted. It was so
stipulated that if within 6 months, the
Obligation which can be Waived: squatters have not yet been evicted, the
1. Obligation to warrant the thing seller should return the P100,000.
Another stipulation states – within the 6-
Kinds of Warranties under the Law: month period, the value of the land
1. Express doubled. Despite the filing of an eviction
If the defect was the cause of the loss, the WARRANTY OF QUALITY
vendor would be liable for the return of the Prof. Deleon, Prof. Vitug, Prof. Baviera:
price, not only the price less value but also there is another warranty which is
to refund the expenses and damages WARRANTY OF QUALITY which includes:
because the vendor was aware of the (1) Warranty of Fitness
defects. (2) Warranty of Merchantability
1. Obligation to accept the thing Unpaid seller – is one who has not been
delivered fully paif of the price.
Q: If the buyer received the goods Note: remedies of the unpaid seller are not
delivered, does it mean that he already necessarily alternative. The right of resale
accepted? and the right to rescind may only be
A: No because receiving is preliminary to exercised if the seller has possessory lien.
accepting. In fact, this is consistent to the
right provided by law to the buyer which is POSSESSORY LIEN
the right of inspection or the right of Q: Why is it called possessory lien?
examination. Thereafter, he may reject the A: because there another lien in the law.
goods if defective. This is the lien under the rules on
concurrence and preference of credit.
2. Obligation to pay the price
Q: When? Note: The buyer is not required to be
A: (1) As stipulated insolvent.
(2) If there is no stipulation, it would
be at the time and place of delivery. Q: When would the seller be considered
to have lost his lien?
Right to Inspect / Examine A:
This may be waived. (1) If he waives his right
Example: C.O.D. arrangement. (2) If the buyer lawfully obtained
possession over the goods
MACEDA LAW (3) When the thing is delivered to a
Study Maceda Law and its essential common carrier and the seller
features (see book of Prof. Baviera) did not prefer his ownership and
possession over the goods.
Q: Are the remedies under the Maceda
Law alternative? Can the buyer be able STOPPAGE IN TRANSITU
to exercise 2 or more remedies all at the Requisites:
same time? (1) Insolvency of the buyer
A: Yes. Remedies under the Maceda Law (2) The seller must have parted
are cumulative. possession over the goods
(3) The goods must be in transit
RIGHT OF RESALE
Q: When would the seller have this
right?
A:
(1) If the goods are perishable
(2) The right is expressly
reserved in the contract
(3) The buyer has been in default
for an unreasonable time.
RECTO LAW
Pls. read Sales by Prof. Baviera
EXTINGUISHMENT OF SALE
Pls. read Sales by Prof. Baviera
1. Payment
2. Novation
3. Loss of the thing
Kinds of Redemption
1. Conventional
2. Legal
Requisites:
1. The lease period has expired and
2. The lessee continues to be in possession
of the lease for at least 15 days from the
time of the expiration of the lease and
3. No notice to the contrary from the lessor
and the lessee.
ESSENTIAL ELEMENTS OF A
Q: If a person was asked to administer CONTRACT OF AGENCY
the property of another to sell the Read: Rallos case
property, and he said nothing- by his The SC enumerated the essential elements
silence, by his inactions may be deemed or the alleged essentials elements of a
accept agency? contract of agency.
A: Not necessarily. Under the law, you have 1. Consent
to make distinction to determine the 2. Execution of the juridical act-
scenario under which the said appointment subject matter
was made, okie! The law would say when 3. Acts within the scope of authority
the 2 parties are absent, and when the 2 4. The acts must be in
parties are present. representation of the principal
When 2 parties are absent- 1 is in Manila This are allegedly the essential element
and the other is in Cebu. again some authors would discuss in their
When 2 parties are present- present in the books with due respect to the ponente of
same room this case, medyo mali mali ang
enumeration, first there was nothing
(a) 2 persons present- present in the mention about the cause or consideration
same conference hall as a contract, a contract will never validly
(b) If 2 persons are in different place, have a cause or consideration well it may
one in Manila and the other one in Cebu be liberality pwede naman cause yan but
there must have a cause if only for that the
Compensation enumeration be defective more than that
As to the compensation in a contract of that last 2 mention that the agent act within
agency consider if the agency is gratuitous the scope and that the agent must act in
or onerous. representation are not essential elements of
a contract of agency they are actually
Read: 1909 - the liability of the agent for obligations of agent which means they have
damage to the principal due to his been already perfected of contract of
negligence or even bad faith or fraud agency, no obligation will arise kung void
committed against the principal may be ung kontrata kung wala pang valid contract,
so essential elements are only those
Definition of Partnership
PARTNERSHIP Q: What if two or more persons agreed
to put up a partnership but they never
BE: A, using all his savings in the total
intended to divide the profits among
amount f Php2,000, decided t establish a
themselves, would that still be
restaurant. B, however, gave Php4,000
considered a valid partnership contract?
as “financial assistance” with the
A: Yes. Under the second paragraph of the
agreement that B will have 22% share of
article, two or more persons can form a
the profits of the business. After 22
partnership for the exercise of a profession.
years, B filed an action to compel A to
deliver to him his share in the profits
Partnership vs. Co-ownership
claiming that he was a partner. A denied
Consider the essential features:
that B was his partner. Is B a partner of
CREATION
A?
Partnership is obviously created by
SA: Yes, B was a partner in the business
agreement. Co-ownership may be created
because there was a contribution of money
by agreement, but it may also be created by
to a common fund and there was an
operation of law. In fact, by express
agreement to divide the profit among
provision of the law, the fact that there is co-
themselves.
ownership does not necessarily mean that
there is a partnership existing between two
Atty. Uribe: I do not agree with the answer.
persons.
I’d rather agree with the alternative answer.
Ex.: two persons may inherit a property from
WHY: In the alternative answer as can be
their father or mother, and under the law,
seen from the facts, B gave Php4,000 only
they may be considered as co-owners of the
as a financial assistance. It was not a
same property.
contribution to a common fund. As such, he
actually became a creditor of A. Therefore,
PURPOSE
he did not contribute to a common fund.
Partnership: either to divide profits or
exercise a profession.
Q: What about the stipulation that B will
Co-ownership: Common enjoyment of the
have 22% share of the profits?
thing or right owned in common; merely to
A: The law on partnership is very clear that
enjoy the property, thus they may have
a sharing in the profits does not necessarily
different purposes.
does not result in a partnership contract
because the sharing of the profits may only
A very important feature of partnership in
be a way of compensating the other person,
relation to co-ownership, it has a juridical
in fact that can be a mode of payment of the
personality, separate and distinct from the
loan. Kasi yung loan, supposedly pwede
individual partner which is obviously not
payable every month with a fixed amount.
present in co-ownership. In co-ownership,
But mas maganda ang agreement na ito,
they have their respective personalities and
22% of the profits, so that if walang profit sa
no new personality will be created.
isang taon, wala munang bayad. ‘Di ba
that’s reasonable agreement. Only kung
POWERS OF THE MEMBERS
may profit, saka lang babayaran. Kumbaga,
Partnership: Unless otherwise agreed upon,
friendly loan ito. The sharing in the profits as
each partner is an agent of the other
expressly provided by law does not
partners and of the partnership.
necessarily result in a partnership contract.