Chapter 7 – Extinguishment of Sale

I. Definitions Legal Redemption – is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or
by any transaction whereby ownership is transmitted by onerous title Equitable Mortgage – is one
which, although it lacks the proper formalities of a mortgage, shows the intention of the parties to make
the property subject of the contract as a security for the fulfillment of an obligation Conventional
Redemption – is the right which the vendor reserves to himself, to reacquire the property sold provided
he reimburses the vendee of the price, the expenses of the contract, any other legitimate payments
made therefor and the necessary and useful expenses made on the thing sold and fulfills other
stipulations which may have been agreed upon

II. Discussions Requisites for the right of legal redemption of a co-owner to exist o There must be co-
ownership

o There must be alienation of all or of any of the shares of the other co-owners o Sale must be to a third
person or stranger o Sale must the before partition o Right must be exercised within the period provided
in Article 1623 o Vendee must be reimbursed for the price of the sale

Cases when the contract shall be presumed to be an equitable mortgage: o When the price of a sale
with right to repurchase is unusually inadequate o When the vendor remains in possession as lesee or
otherwise o When upon or after the expiration of the right to repurchase another instrument extending
the period of redemption or granting a new period is executed o When the purchaser retains for himself
a part of the purchase price o When the vendor binds himself to pay the taxes on the thing sold o In any
other case where it may be fairly inferred that the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of any other obligation Obligations of a vendor
a retro in case of redemption o The vendor must return to the vendee: Price of the sale (not the value
of the thing) Expenses of contract and other legitimate expenses Necessary expenses – those
incurred for the preservation of the thing Useful expenses – those which increase the value of the
thing or create improvements thereon

Chapter 8 – Assignment of Credits and Other Incorporeal Rights

I. Definitions Assignment of credit – a contract by which one person transfers to another his rights and
actions against a third person (debtor) in consideration of a price certain in money or its equivalent
II. Discussions Warranties of the assignor of credit o The assignor of credit only warrants the existence
and legality of the credit at the perfection of the contract o There is no warranty as to solvency of the
debtor unless expressly stipulated or unless the insolvency was already

existing (and of public knowledge) at the time of the assignment Liabilities of the assignor of credit o
The liability of the assignor in good faith is limited only to the price received and to the expenses of the
contract, and any other legitimate payments by reason of the assignment o The assignor in bad faith is
liable not only for the payment of the price and all expenses, but also for damages. Nature of
assignment of credit o It is really a sale Subject matter: credit or right assigned Consideration: Price
paid for the credit or right Consent: The agreement of the parties to the assignment at the agreed
price

Chapter 9 – General Provisions

I. Definitions Legal tender – is that currency which a debtor can legally compel a creditor to accept in
payment of a debt in money when tendered by the debtor in the right amount Thing or chose in action
– is any claim or right which may be pleaded in a suit at law, such as claim of reparation for a tort or
right guaranteed under certain types of contracts

II. Discussions Objects included in the phrase “document of title to goods” according to Art. 1636: Any
o Bill of Lading; o Dock Warrant; o Warehouse receipt or; o Order for the delivery of goods or; o Any
other document used in the ordinary course of business as proof of the possession and control of the
goods A person is deemed insolvent when: o A person who was ceased to pay his debt in the ordinary
course of business Goods are in a deliverable state when: o They are in such a state that the buyer
would, under the contract, be bound to take delivery of them

Chapter 10 – Barter or Exchange

I. Definitions Barter – one of the parties binds himself to give one thing in consideration of the other’s
promise to give another thing.

II. Discussions Similarities to Sale and Barter o Barter is similar to sale with the only difference is that
instead of paying a price in money, another thing is given in lieu thereof Perfection and Consummation
of the Contract of Barter o Perfected from the moment there is a meeting of minds upon the things
promised by each party in consideration of the other o It is consummated from the time of mutual
delivery by the contracting parties of things they promised Chapter 11 – The Bulk Sales Law
I. Definitions Fixtures – merchandise usually possessed and annexed to the premises occupied by
merchants to enable them better to store, handle, and display their wares Merchandise – must be
construed to mean such things as are usually bought and sold in trade by merchants II. Discussions
When sale or transfer in bulk o Sale, transfer, mortgage or assignment of A stock of goods, wares, and
merchandise otherwise than in the ordinary course of trade and the regular prosecution of the business
All or substantially all, of the business or trade All or substantially all, of the fixtures and equipment
used in the business of the vendor, mortgagor, transferor, or assignor Purpose of the Law o Designed
to prevent defrauding of creditors by the secret sale in bulk of all or substantially all of a merchant’s
stock of goods Scheme of the law o That such Bulk Sales are fraudulent and void as to creditors of the
vendor, or presumptively so, unless specified formalities are observed such as Demanding and giving
list of creditors Giving of actual or constructive notice to such creditors Making of an inventory