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Chapter 5 - OBLIGATIONS OF THE VENDEE

1. Right of the buyer to examine goods before accepting them


GENERAL RULE: The buyer has the right to examine the goods before accepting them.
PROBLEM: On March 26, 2012, B ordered from S 500 sets of pyrex trays. Prior to April 27,
2012, S delivered some of the items but B outrightly rejected them. After making the proper
corrections, S made subsequent deliveries on April 27, April 30, May 1, May 3, May 12 and
May 27, 2012. B’s caretaker duly received the deliveries. On several occasions, S
demanded payment for the total value of the deliveries but B asked for extension of time
within which to pay. On June 20, 2012, B sent a letter to S, telling S that he rejects the items
delivered. Because of this, S sued B for payment. Will the action prosper?

ANSWER:

The delay in the advice or notice of rejection — almost two months after receipt — was
rather too late.
Art. 1584 accords the buyer the right to a reasonable opportunity to examine the
goods to ascertain whether they are in conformity with the contract. Such
opportunity to examine, however, should be availed of within a reasonable time in
order that the seller may not be subjected to undue delay or prejudice in the payment
of his raw materials, workers and other damages which may be incurred due to the
deterioration of his products. The buyer is deemed to have accepted the goods when,
after the lapse of a reasonable time he retains them without intimating to the seller
that he has rejected them.
2. When buyer deemed to have accepted the goods
PROBLEM: Buyer accepted goods despite delay. Buyer also promised later on to pay.
Subsequently, buyer asked for damages on account of the delay. Will the action prosper?
ANSWER:
Buyer is estopped because of the acceptance without reservation at the time of acceptance.
Art. 1585. The buyer is deemed to have accepted the goods when he intimates to the
seller that he has accepted them, or when the goods have been delivered 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 goods without
intimating to the seller that he has rejected them.
The Article gives three ways of accepting the goods:
(a) express acceptance
(b) when buyer does an act which only an owner can do
(c) failure to return after reasonable lapse of time

3. The buyer may suspend the payment of the price (Art. 1590)
PROBLEM: S sold and delivered to B a parcel of land for P2,000,000 payable within 30
days from the date of the contract. Soon after the sale, X claims ownership over the land
by virtue of a prescriptive title. May B suspend the payment of price? Why? If, in order to
avoid trouble, B pays off X to settle the latter’s claim to the land, may B recover the amount
paid as against S upon S’s warranty in case of eviction? Reason.
ANSWER:
Yes, B may suspend the payment of the price because of a reasonable fear that an accion
reivindicatoria will be brought against him. It is not necessary that the vindicatory action has
already been brought: reasonable fear thereof is suffi cient. (10 Manresa 274-276, 280-

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281). Should B and X come to an amicable settlement, B cannot recover from S because
there really was no eviction. B was indeed not deprived of the thing purchased.
Art. 1590. Should the vendee be disturbed in the possession or ownership of the
thing acquired, or should he have reasonable grounds to fear such disturbance, by
a vindicatory action or a foreclosure of mortgage, he may suspend the payment of
the price until the vendor has caused the disturbance or danger to cease, unless the
latter gives security for the return of the price in a proper case, or it has been
stipulated that, notwithstanding any such contingency, the vendee shall be bound to
make the payment. A mere act of trespass shall not authorize the suspension of the
payment of the price.
(1) When Buyer May Suspend the Payment of the Price
The buyer may SUSPEND the payment of the price if:
(a) There is a well-grounded fear (fundado temor).
(b) The fear is because of:
1) a vindicatory action or action to recover, or
2) a foreclosure of mortgage.
NOTE:
(a) The fear must not be the result of any other ground, like the vendor’s insanity.
(b) A mere act of trespass is made by one claiming no legal right whatsoever. Here, the
buyer is not authorized to suspend the payment of the price.

4. PROBLEM: S sold to B a specific parcel of land at a price of P100,000 to be paid after 30


days. The contract provides that the sale shall be automatically rescinded if B failed to pay
the price on due date. B failed to pay on due date, but tendered payment three days after.
S, however, refused to accept the payment asserting that their contract was automatically
rescinded according to their stipulation when B defaulted on due date. Is S correct?
ANSWER:
No, S is not correct. Their agreement is a Pactum commissorium.
It is an agreement between the vendor and the vendee in the sale of an immovable that
rescission of the contract shall of right take the place if the vendee fails to pay the price at
the time agreed upon. (Art. 1592)
This agreement is not valid, hence, the vendee may pay even after the expiration of the
period for payment as long as no demand for rescission has been made upon him
either judicially or by notarial act.
In this case, there was no demand (judicial or extra-judicial by notarial act) yet before B
made payment.
Art. 1592. In the sale of immovable property, even though it may have been stipulated
that upon failure to pay the price at the time agreed upon the rescission of the
contract shall of right take place, the vendee may pay even after the expiration of the
period, as long as no demand for rescission of the contract has been made upon him
either judicially or by a notarial act. After the demand, the court may not grant him a
new term.

5. Realty Installment Buyer Act (Maceda Law)


PROBLEM: B bought from S Realty Inc. a residential house and lot for P600,000. The terms
of the contract provided for the following: down payment of P60,000, balance payable in 15
years in installments of P3,000 per month. After paying the down payment and 84 monthly
installments, B defaulted in the payment of the 85th and succeeding installments. As a

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consequence, S Realty Inc. cancelled the sale. How much cash surrender value is B entitled
to received.
ANSWER:
REPUBLIC ACT 6552 (The Maceda Law)
Sec. 3. In all transactions or contracts involving the sale or financing of real estate
on installment payments, including residential condominium apartments but
excluding industrial lots, commercial buildings and sales to tenants under Republic
Act Numbered Thirty-eight hundred forty-four as amended by Republic Act
Numbered Sixty-three hundred eighty-nine, where the buyer has paid at least two
years of installments, the buyer is entitled to the following rights in case he defaults
in the payment of succeeding installments:
(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to fifty percent of the total
payments made and, after five years of installments, an additional five percent every
year but not to exceed ninety per cent of the total payments made: Provided, That
the actual cancellation of the contract shall take place after thirty days from receipt
by the buyer of the notice of cancellation or the demand for rescission of the contract
by a notarial act and upon full payment of the cash surrender value to the buyer.
Downpayments, deposits or options on the contract shall be included in the
computation of the total number of installments made.

6. Grounds for immediate rescission of sale of movables


a. Failure of the vendee to appear at the time stipulated for the delivery of the thing
b. Failure of the vendee to tender the price at the time of delivery, unless a longer period
is stipulated for its payment. (Art. 1593)
When sale rescinded
The sale is not automatically rescinded when any of the foregoing grounds is present.
Rescission shall take place only in the interest if the vendor, i.e., if the vendor so desires.
Hence, instead of rescission, the vendor may opt to demand payment of the price.
EXAMPLE: On March 1, S sold his laptop computer to B for P50,000. The parties agreed
that the delivery of the computer and the payment of the price shall be made on March 10
at the store of S. if on March 10, B does not appear at the store of S, or having appeared,
does not tender payment of the price, S may elect specific performance (payment of the
price), or the rescission of the contract.

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