OUTLINE 2 Sales

Subject Matter of Sale - Art. 1347 (Things and Rights) Art. 1461-1465
Art. 1347. All things which are not outside the commerce of men, including future things,
may be the object of a contract. All rights which are not intransmissible may also be the
object of contracts.
No contract may be entered into upon future inheritance except in cases expressly
authorized by law.
All services which are not contrary to law, morals, good customs, public order or public
policy may likewise be the object of a contract. (1271a)
Art. 1461. Things having a potential existence may be the object of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition
that the thing will come into existence.
The sale of a vain hope or expectancy is void. (n)
Art. 1462. The goods which form the subject of a contract of sale may be either existing
goods, owned or possessed by the seller, or goods to be manufactured, raised, or
acquired by the seller after the perfection of the contract of sale, in this Title called
"future goods."
There may be a contract of sale of goods, whose acquisition by the seller depends upon
a contingency which may or may not happen. (n)
Art. 1463. The sole owner of a thing may sell an undivided interest therein. (n)
Art. 1464. In the case of fungible goods, there may be a sale of an undivided share of a
specific mass, though the seller purports to sell and the buyer to buy a definite number,
weight or measure of the goods in the mass, and though the number, weight or measure
of the goods 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, weight or measure bought bears to
the number, weight or measure of the mass. If the mass contains less than the number,
weight or measure bought, the buyer becomes the owner of the whole mass and the
seller is bound to make good the deficiency from goods of the same kind and quality,
unless a contrary intent appears. (n)
Art. 1465. Things subject to a resolutory condition may be the object of the contract of
sale. (n)
Define and give examples of the following:
Must be licit (1459)
Art. 1459. The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered. (n)
Illicit per se v illicit per accidens - within the commerce of man (1347)
Art. 1347. All things which are not outside the commerce of men, including future things,
may be the object of a contract. All rights which are not intransmissible may also be the
object of contracts.
No contract may be entered into upon future inheritance except in cases expressly
authorized by law.
All services which are not contrary to law, morals, good customs, public order or public
policy may likewise be the object of a contract. (1271a)

Not impossible (1348)

Art. 1348. Impossible things or services cannot be the object of contracts. (1272)
Future inheritance vs interest in an inheritance (1347)
Determinate OR determinable things (1458, 1460; 1349)
Art. 1458. By the contract of sale one of the contracting parties obligates himself to
transfer the ownership and to deliver a determinate thing, and the other to pay therefor
a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
Art. 1460. A thing is determinate when it is particularly designated or physical
segregated from all other of the same class.
The requisite that a thing be determinate is satisfied if at the time the contract is entered
into, the thing is capable of being made determinate without the necessity of a new or
further agreement between the parties.
Art. 1349. The object of every contract must be determinate as to its kind. The fact that
the quantity is not determinate shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the need of a new contract
between the parties. (1273)
Generic things
Fungible goods (1464)
Art. 1464. In the case of fungible goods, there may be a sale of an undivided share of a
specific mass, though the seller purports to sell and the buyer to buy a definite number,
weight or measure of the goods in the mass, and though the number, weight or measure
of the goods 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, weight or measure bought bears to
the number, weight or measure of the mass. If the mass contains less than the number,
weight or measure bought, the buyer becomes the owner of the whole mass and the
seller is bound to make good the deficiency from goods of the same kind and quality,
unless a contrary intent appears. (n)
Thing having a potential existence (1461) - emptio rei speratae v emptio spei
Art. 1461. Things having a potential existence may be the object of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition
that the thing will come into existence.
The sale of a vain hope or expectancy is void. (n)
Goods whose acquisition by seller depends upon contingency (1462)
Art. 1462. The goods which form the subject of a contract of sale may be either existing
goods, owned or possessed by the seller, or goods to be manufactured, raised, or
acquired by the seller after the perfection of the contract of sale, in this Title called
"future goods."
There may be a contract of sale of goods, whose acquisition by the seller depends upon

a contingency which may or may not happen. (n)

Things subject to a resolutory condition (1465)

- acquired under legal or conventional redemption
- property subject to reserva troncal
Art. 1465. Things subject to a resolutory condition may be the object of the contract of
sale. (n)
Future goods (1347, 1462)
Undivided interest in a thing (1463)
Art. 1463. The sole owner of a thing may sell an undivided interest therein.
nemo dat quod non habet - "no one gives what he doesn't have" (1459 and 1434)
-Relate to transfer of ownership at time of delivery
Exceptions - 1505,1506 Relate to Art. 559
Art. 1459. The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered. (n)
Art. 1434. When a person who is not the owner of a thing sells or alienates and delivers
it, and later the seller or grantor acquires title thereto, such title passes by operation of
law to the buyer or grantee.
Art. 1505. Subject to the provisions of this Title, where goods 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 acquires no better title to the goods than the seller had, unless the
owner of the goods is by his conduct precluded from denying the seller's authority to
sell.
Nothing in this Title, however, shall affect:
(1) The provisions of any factors' act, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true owner
thereof;
(2) The validity of any contract of sale under statutory power of sale or under the order
of a court of competent jurisdiction;
(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the
Code of Commerce and special laws. (n)
Art. 1506. Where the seller of goods has a voidable title thereto, but his title has not
been avoided at the time of the sale, the buyer acquires a good title to the goods,
provided he buys them in good faith, for value, and without notice of the seller's defect
of title. (n)
Art. 559. The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof may recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor. (464a)

1. Yu Tek and Co. v Gonzales

2. Compana Gen. de Tabacos v CA
3. Heirs of San Andres v Rodriguez
4. Pichel v. Alonzo
5. EDCA Publishing v Santos
6. Tagatac v. Jimenez
7. Quijada v CA
Price - Arts. 1469-1474; Art 1355, 1381(1)(2) 1386
- price certain or capable of being ascertained in money or its equivalent
- includes manner of payment
- determination / fixing of price
8. Tan Tiah v Yu
9. Toyota Shaw Inc. v CA
- inadequacy of price in voluntary sales (gen rule and execptn)
10. Ong v Ong
11. Aguilar v Rubiato
- inadequacy of price in involuntary sales(gen rule and exceptn)
12. PNB v Gonzales
13. De Leon v Salvador
- absolute and relative simulation of contract 1345
false price - contract valid but subject to reformation Art 1359
simulated price - void contract 1471 and 1353
14. Heirs of Ureta vs Heirs of Ureta
Parties to a Sale
a. Consent - meeting of the minds upon the thing and the price
- consent that affects perfection of the contract
- when nonfulfillment of condition prevents perfection of the
contract
- when nonfulfillment of condition affects performance of the
obligation
15. Review: Peoples Homesite vs CA, Romero vs CA
16. Add: Lim vs CA
b. Capacity to give Consent
- General Rule - Art. 1489 (1)
- Absolute Incapacity - Art. 1327, 1390. Relate to Art 1489 (2)
- Relative Incapacity - Art 1490
(See Arts. 87, 96, 124, 194 Family Code) Arts.
1491, 1492
NOTE: Know the RATIONALE for the prohibitions and the EFFECTS on the legality
of the contract

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Guiang cs CA
Medina v Coll. of Int Rev
Ching v Goyanko Jr.
Cruz vs CA
Cook v McMicking
Malabuena vs Cervantes
Rubias v Batiller
Fornilda v Br. 164 Pasig RTC
Lao vs Genato
Maharlika Broadcasting v. Tagle
Paragas v Heirs of Balacano
Mercado v Espiritu
Fabillo v IAC