S A L E S

ELEMENTS OF A CONTRACT OF SALE

 Essential Elements
 Consent
 Subject Matter
 Price certain in money or its equivalent
 Natural Elements
 Warranty against eviction
 Warranty against hidden defects and encumbrances
 Accidental Elements
 Terms
 Place
 Time of payment

SALE DACION EN PAGO PAYMENT BY CESSION

No pre-existing credit
Creates obligation
CAUSE OR CONSIDERATION:
Seller’s POV = price
Buyer’s POW = delivery of the object
Greater freedom in fixing the price
Ownership is transferred to the buyer
There is a pre-existing credit
Extinguishes obligation
CAUSE OR CONSIDERATION
Debtor’s POV = extinguishment of
obligation
Creditor’s POV = delivery of the
object
Less freedom in fixing the price
There is a pre-existing credit
Extinguishes obligation
CAUSE OR CONSIDERATION
Debtor’s POV = extinguishment of
obligation
Creditor’s POV = assignment of the
things to be sold
Less freedom in fixing the price
Creditors do not become the owners of
the properties assigned to them but are
merely given the right to sell and apply
the proceeds to their claims

* Vendor must have the right to transfer the ownership at the time that it is delivered

SALE OF AN EXPECTED THING SALE OF HOPE

EMPTIO REI SPERATAE EMPTIO SPEI
Sale of a future thing Deals with a present thing – hope or expectancy
Things sold must come into existence; otherwise, Sale produces effects even if the thing hoped for does not
ineffective come into existence

* Authority of the agent to sell a piece of land must be in writing; otherwise, the sale is VOID

* If the authority of the agent is in a private/public instrument and the sale was entered into orally, the sale is
UNENFORCEABLE

* Auctioneer may withdraw the goods from the sale UNLESS the auction has been announced to be WITHOUT reserve

* A unilateral promise, even if accepted, is ONLY binding if supported by a consideration

* The buyer has a right to the fruits of the thing from the time of the perfection of the contract. However, the buyer shall
acquire no real right over the thing and its fruits until the same have been delivered to him

Res Perit Domino – the loss of property falls upon the owner

IF THE VENDEE’S FAILURE TO PAY COVERS OR MORE INSTALLMENTS (PERSONAL PROPERTY)

A. Exact Fulfillment of obligation
B. Cancel the sale – vendor shall return to the vendee the sums received minus reasonable rent
C. Foreclose the chattel mortgage on the thing sold, if one has been constituted. In this case, he shall have no further
action against the purchaser to recover any unpaid balance of the price.
WHEN DEFICIENCY MAY BE RECOVERED
 Sale on straight-term
 If security foreclosed is other than the chattel mortgage constituted on the thing sold
 In the case of sale on execution of judgment in favor of the seller

Realty Installment Buyer Act – protect buyers of real estate on installment payments against onerous and oppressive
conditions

SALE OF REAL PROPERTY IN INSTALLMENT

A. At least 2 years of installments had been paid at the time of default
 Pay without additional interest the unpaid installments due within the total grace period earned by him (1
month grace period for every 1 year of installments paid). This right shall be exercised by the buyer only
once in every 5 years of the life of contract
 If the contract is cancelled, entitled to the refund of the cash surrender value = 50% of total payments
made and after 5 yrs of installments, an additional 5% every year but not to exceed 90% of the total
payments made
B. Less than 2 years of installments had been paid at the time of default
 Buyer shall be given a grace period of NOT LESS THAN 60 DAYS from the date the installment became
due to pay

Traditio Longa Manu – delivery by mere consent or agreement of the parties if the thing cannot be transferred to the
possession of the vendee at the time of sale

Traditio Brevi Manu – vendee is already in the possession of the thing sold even before the sale and thereafter continues
in possession thereof in the concept of an owner

Traditio Constitutum Possessorium – vendor continues in possession of the thing sold after the sale but in another
capacity

GR: Delivery of specific goods to a carrier or other bailee for the purpose of transmission to the buyer transfers ownership
to the buyer
XPN:
 There is a stipulation
 When by the terms of the bill of lading, goods are to be delivered to the seller/his agent/to the order of the
seller/his agent
 When by the terms of the bill of lading, goods are to be delivered to the order of the buyer/his agent but the bill of
lading is retained by the seller/his agent
 When the seller draws on the buyer a bill of exchange for the price of the good and transmits the bill of exchange
and the bill of lading to the buyer to secure acceptance or payment of the bill of exchange, but the buyer dishonors
such bill of exchange

* Whoever loses a movable or has been unlawfully deprived thereof may recover it from the person in possession of the
same without such possessor being entitled to reimbursement, except if the acquisition in good faith had been made in a
public sale or auction

* A document of title which is a bearer document of title on its face becomes an order document if specially indorsed.

* A negotiable instrument payable to bearer remains a bearer instrument even if specially indorsed

Bearer = delivery; order = indorsement + delivery

* A negotiable document of title even if marked “non-negotiable” remains to be negotiable

* A non-negotiable document of title cannot be negotiated. It can only be transferred or assigned