I.

SALES
A. CONCEPT
Art 1458 By the contract of sale one of the contracting parties obligates himself to transfer
the ownership of and to deliver a determinate thing, and the other to pay therefore a price
certain in money or its equivalent.
A contract may be absolute or conditional.
Absolute = ownership passed to buyer immediately
Conditional = have to wait (i.e. cars installment)
CHARACTERISTICS
Consensual: it is perfected by mere consent without any further act.
Bilateral: both contracting parties are bout to fulfill obligations reciprocally towards each
other.
Onerous: the thing sold is conveyed in consideration of the price and vv.
Commutative: the thing sold is considered the equivalent of the price paid and vv.
Nominate: it is given a special name in the Civil Code, namely Sale.
Principal: it does not depend for its existence and validity upon another contract.
REQUISITIES
Consent
o As to the thing and price
o Acceptance = indication of consent
o Exceptions
Expropriation of property (gov takes private property for public use)
Execution sale to enforce a judgment of court
Foreclosure sale
o Vitiated consent: not complete void
Object
o Determinate/specific (laptop must have serial no)
o Cannot be services
Cause / Consideration / Price
NATURAL v ACCIDENTAL ELEMENTS
Natural: exists in certain contracts, in the absence of any contrary stipulations
Accidental: present/absent depending on stipulation such as conditions, interest,
penalty, time or place of payment
B. DISTINGUISH FROM OTHERS determine the relationship
SALE v CONTRACT TO SELL
Sale: ownership passed immediately upon execution of contract
Contract to sell: have to wait (installments, etc)
Art 1466 In constructing a contract containing provisions characteristic of both the contract
of sale and of agency to sell, the essential clauses of the whole instrument shall be
considered.
SALE v AGENCY TO SELL
SALE
Buyer receives the good as owner.
Buyer has to pay the price.
Buyer cannot return the object sold.

AGENCY TO SELL
Agent receives the goods as the goods of the
principal who retains his ownership over them.
Agent has to account for the proceeds of the sale
he may make on the principals behalf.
Agent can return the object in case he is unable
to sell the same to a third person.

Seller warrants the thing sold.

Buyer can deal with the thing sold as he
pleases, being the owner.

Agent makes no warranty for which he assumes

personal liability as long as he acts within his
authority and in the name of the seller.
Agent dealing with the thing received is bound
according to the instructions of his principal.

Art 1467 A contract for the delivery at a certain price of an article which the vendor in the
ordinary course of his business manufactures or procures for the general market, whether the
same is on hand at the time or not, is a contract of sales, but if the goods are to be
manufactured specially for the customer and upon his special order, and not for the general
market, it is a contract for a piece of work.
SALE v CONTRACT FOR A PIECE OF WORK
SALE
CONTRACT FOR A PIECE OF WORK
The thing transferred would have
The thing transferred is not in existence.
existed and been the subject of sale.
The risk of loss is borne by the seller.
The risk of loss before the delivery is borne by
worker or contractor not employer.
Within the Statute of Frauds.
Not within the Statute of Frauds.
Art 1468 If the consideration of the contract consists partly in money, and partly in another
thing, the transaction shall be characterized by the manifest intention of the parties. If such
intention does not clearly appear, it shall be considered a barter if the value of the thing given
as a part of the consideration exceeds the amount of the money or its equivalent; otherwise it
is a sale.
SALE v BARTER
SALE
Vendor gives the thing in consideration
for a price in money.

BARTER
One of the parties binds himself to give on thing
in consideration of the others promise to give
another thing.
If partly money and partly another thing, transaction is characterized by the manifest
intentions of the parties if the original intention was BARTER, then it is barter.
If intentions are not clear, it shall be considered a barter if the value of the thing given as a
part of the consideration exceeds the amount of the money or its equivalent.
C. ELEMENTS OF A SALE
1. CONSENT
Art 1475 The contract of sale is perfected at the moment there is a meeting of minds
upon the thing which is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.
RIGHT OF THE OWNER TO FIX HIS OWN PRICE
Reasonable or unreasonable.
Nominal (small) or larger consideration.
EFFECT OF FAILURE TO PAY PRICE/ABSENCE OF PRICE
Price stipulated Failure to pay the stipulated price after the execution of the
contract does not convert the contract into one without case or consideration.
Such failure does not ipso facto resolve the contract in the absence of any
agreement to that effect. The vendor remedy in such case is generally to demand
specific performance or rescission plus damages in either cases.
No price stipulated No meeting of minds. No price = no sale.

AUCTION
Art 1476 In case of a sale by auction:
(1) Where goods are put up for sale by auction in lots, each lot is the subject of separate
contract of sale.
(2) A sale by auction is perfected when the auctioneer announces its perfection by the
fall of the hammer, or in other customary manner. Until each announcement is made,
any bidder may restrict his bid.
(3) A right to bid may be reserved expressly by or on behalf of the seller, unless
otherwise provided by law or by stipulation.
(4) Where notice has not been given that a sale by auction is subject to a right to bid on
behalf of the seller, it shall not be lawful for the seller to bid himself or to employ or
induce any person to bid at such sale on his behalf or for the auctioneer, to employ or
induce any person to bid at such sale on behalf of the seller or knowingly to take any
bid from the seller or any personal employed by him. Any sale contravening this rule
may be treated as fraudulent by the buyer.
RULES GOVERNING AUCTION OF SALE
1. Sale of separate lots by auction are separate sales.
2. Sale perfected by the fall of the hammer.
3. Right of seller to bid in the auction. The seller or his agent may bid in an auction sale
provided: a) such right was reserved; b) notice was given that the sale is subject to a
right to bid on behalf of the seller; c) the right to bid by the seller is not prohibited by
law or stipulation.
PROMISE
Art 1479 A promise to buy and sell a determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promisor if the promise is supported by a consideration distinct from the
price.
KINDS OF PROMISES
1. An accepted unilateral promise to sell, which the acceptor (promisee) elects to buy;
2. An accepted unilateral promise to buy, which the acceptor (promisee) elects to sell;
3. A bilateral promise to buy and sell reciprocally accepted, which either of the parties
chooses to exact fulfillment
EFFECTS OF UNACCEPTED UNILATERAL PROMISE
Policitation - not contemplated in Art 1479.
OPTION - A privilege existing in one person for which he has paid a consideration which
gives him the right to buy/sell.
EFFECT OF ACCEPTED UNILATERAL PROMISE
A unilateral promise to sell/buy for a price certain does not bind the promisor even
if accepted and may be withdrawn at any time. It is only if the promise supported
by a consideration distinct and separate from the price of the thing, then its
acceptance will give rise to a perfected contract (produced consent).
EFFECT OF BILATERAL PROMISE TO BUY/SELL
When the seller accepts the others promise to buy, it generates a binding
contract of sale.
2. OBJECT
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.
REQUISITES CONCERNING OBJECT
1. Things Determinate, lawful, possible.

- Must be within commerce of men, cannot be public ownership.

2. Rights All rights which are transmissible or impersonal may be object of sale.
RIGHT OF VENDOR TO TRANSFER OWNERSHIP
1. One can sell only what he owns.
2. Sufficient if right exists at time of delivery, not at the time of perfection of the contract.
Art 1460 A thing is determinate when it is particularly designated or physical
segregated from all others 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.
SUFFICIENT IF SUBJECT MATTER CAPABLE OF BEING MADE DETERMINATE
The fact that such an agreement is still necessary constitutes an obstacle to the
existence of the contract and renders it void.
A person may validly sell all the sacks of rice in a bodega, but if the bodega is not
specified and the seller has more than one bodega, then it cannot be known what
may have been sold. The contract is null and void.
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.
SALE OF THINGS HAVING POTENTIAL EXISTENCE
Wine a vine is expected to produce, grain a field may grow in a given time, milk a
cow may yield during the coming year, wool that shall grow upon a sheep = valid
SALE OF HOPE OR EXPECTANCY
The efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.
Ex. S binds himself to sell for a specified price to B a parcel of land if S wins the
case for the recovery of said land = valid.
Sale of a vain hope falsified sweepstakes ticket = void
Ex. B buys sweepstakes ticket in the hope of winning a prize. The object of the
contract is the hope itself = valid.
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, in this Title called future goods.
There may be a contract of sale of goods whose acquisition by the seller depends upon
contingency which may or may not happen.
SALE OF FUTURE GOODS
Only valid as an executory contract to be fulfilled by the acquisition and delivery
of the goods specified.
Property or goods, which at the time of the sale, are not owned by the seller but
are to be acquired by him, cannot be subject of an executed sale but may be the
subject of a contract for the future sale and delivery thereof.
Art 1463 The sole owner of a thing may sell an undivided interest therein.
SALE OF UNDIVIDED INTEREST
1. By sale owner. The legal effect of the sale of an undivided interest in a thing is to
make the buyer a co-owner in the thing sold.

2. By co-owner. The co-owner of a thing can dispose his share even without consent
of the other co-owner/s.
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 brought bears to
the number, weight or measure of the mass. If the mass contains less than the number,
weight or measure brought, the buyer becomes the owner of the whole mass and the
seller is bound to make good and deficiency from goods of the same kind and quality,
unless a contrary intent appears.
SALE OF AN UNDIVIDED SHARE OF A SPECIFIC MASS
Meaning of fungible goods. any unit is treated as the equivalent of any other unit
(grain, oil, wine, gas)
Effect of sale. The owner of a mass of goods may sell only an undivided share
thereof, provided the mass is specific.
Risk of loss. If buyer becomes co-owner, then the whole mass is at the risk of all
the parties interested in it, in proportion to their various holdings.
3. FORM
Art 1483 Subject to the provisions of the Statute of Frauds and of any other applicable
statute, a contract of sale may be made in writing, or by word of mouth, or partly in writing
and partly by word of mouth, or may be inferred from the conduct of the parties.
GENERAL RULE: Contracts may be entered into in any form provided all the essential
requisites for its validity are present.
Except:
Required for the convenience of the parties in order that the sale may be
registered in the Registry of Deeds to make effective as against third persons the
right acquired under such sale;
When contract is covered by stature of frauds.
IF CONTRACT COVERED BY STATUTE OF FRAUDS
Contract should be in writing subscribed by the party charged, otherwise the
contract cannot be enforced by action.
STATUTE OF FRAUDS [Art 1403]
The ff contracts must be in writing otherwise they cannot be enforced in court
litigation:
1. Sale of personal property at a price P500 above;
2. Sale of a real property or an interest therein regardless of the price involved;
3. Sale of a property not to be performed within a year from the date thereof
regardless of the nature of the property and the price involved.
Only applicable to executory contracts.
Art 1403 The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the
following cases an agreement hereafter made shall be unenforceable by action,
unless the same, or some note or memorandum, thereof, be in writing, and
subscribed by the party charged, or by his agent; evidenced, therefore, of the

agreement cannot be received without the writing, or a secondary evidence of its

contents:
a. An agreement that by its terms is not to be performed within a year from the
making thereof;
b. A special promise to answer for the debt, default, or miscarriage of another;
c. An agreement made in consideration of marriage, other than mutual property
to marry;
d. An agreement for the sale of goods, chattels or things in action, at a price not
less than P500, unless the buyer accepts and receive part of such goods or
chattels, or the evidences, or some of them, of such things in action or pay at
the time some part of the purchase money; but when a sale is made by
auction and entry is made by the actioneer in his sales book, at the time of
the sale, of the amount and kind of property sold, terms of sale, price, names
of the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;
e. An agreement of the leasing for a longer period than one year, or for the sale
of real property or of an interest therein;
f. A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract.
WHEN CONTRACT IS UNENFORCEABLE:
1. Those entered into by a person without authority or in excess of his authority
2. Those violating the statute of frauds requirement
3. Those where both parties are incapacitated
** unenforceable =/= void
CONTRACTS VIOLATING STATUTE OF FRAUDS [#2]
Statute of frauds: requires certain contracts to be in writing
o Only applies to executory contracts
o Only applies to action for specific performance or for damages arising from
violation of agreement
Not applicable on damages arising from contractual breach
o Exclusive
Contracts not found in the enumeration are not covered by the statute of
frauds; contract of loans is not covered even if above P500
o Personal defense; may be waived
If did not put in writing, statute of frauds is waived
CONTRACTS UNDER THE STATUTE OF FRAUDS
If these are not in writing, they are unenforceable. All other contracts are
enforceable if made orally.
Form is required mainly for evidentiary purposes. Non-compliance with the
requirements does not affect the contracts validity.
1. Contracts which are not to be performed within a year
2. Special promise to answer the debt of another
3. An agreement made in consideration of marriage other than a mutual promise to
marry, except the mutual promise to marry
4. Sale of real property regardless of price
5. Sale of goods, chattels or things in action, at a price not less than P500
If price is P499.99, the contract would be valid and enforceable even if made
orally.
6. Leases longer than one year (applicable on real property)
7. A representation as to credit of a third person
Quasi-delict example: Gino thought Ludi was solvent, and Gino vouched for Ludi
orally. Jeff loaned Ludi money. Gino cannot be liable without a written contract.

D. EFFECTS
OBLIGATION OF THE SELLER
1. DELIVERY
Art 1495 The vendor is bound to transfer the ownership of and deliver, as well as
warrant the thing which is the object of the sale.
PRINCIPAL OBLIGATIONS OF THE VENDOR
1. Transfer the ownership of the determinate thing sold;
2. Deliver the thing;
3. Warrant against eviction and hidden defects;
4. Take care of the thing, pending delivery, with proper diligence;
5. Pay for the expenses for the execution and registration of the deed of sale,
unless there is a stipulation.
Art 1537 The vendor is bound to deliver the thing sold and its accessions and
accessories in the condition in which they were upon the perfection of the contract.
All fruits shall pertain to the vendee from the day on which the contract was perfected.
CONDITIONS OF THING TO BE DELIVERED
Seller is obliged to preserve the thing pending delivery [1163].
Thing and its accessions and accessories must be in the condition in which they
were upon perfection of contract.
RIGHT OF BUYER TO FRUITS
Buyer has right to fruits from the time the obligation to deliver arises.
Obligation to deliver arises upon perfection of the contract, or may be stipulated.
MODES
Art 1477 The ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof.
Art 1478 The parties may stipulate that ownership in the thing shall not pass to the
purchaser until he has fully paid the price.
GENERAL RULE: Ownership transferred by delivery.
Exceptions: Stipulation (non-payment, etc); sale on trial
Art 1496 The ownership of the thing sold is acquired by the vendee from the moment it
is delivered to him in any of the ways specified in articles 1497 to 1501, or in any other
manner signifying an agreement that possession is transferred from the vendor to the
vendee.
WAYS OF EFFECTING DELIVERY
(1) By actual or real delivery
(2) By constructive or legal delivery
(3) By delivery in any other manner signifying an agreement that the possession is
transferred to the vendee
WAYS OF EFFECTING CONSTRUCTIVE DELIVERY
(1) Equivalent to actual delivery
a. By execution of public instrument [1498 par 1]
b. By symbolic tradition or traditio symbolica [1498 par 2]
c. By traditio longa manu [1499]
d. By traditio brevi manu [1499]
e. By traditio constitutum possessorium [1500]
f. By quasi-delivery or quadi-traditio [1501]
(2) Contrary may be stipulated [1478]

Art 1497 The thing sold shall be understood as delivered, when it is placed in the
control and possession of the vendee.
Tradition is a derivative mode of acquiring ownership by virtue of which one who
has the right and intention to alienate a corporeal thing, transmits it by virtue of a
just title to one who accepts the thing.
Delivery and payment marks the consummation of the contract of sale.
Art 1498 When the sale is made through a public instrument, the execution thereof
shall be a equivalent to the delivery of the thing which is the object of the contract, if from
the deed the contrary does not appear or cannot clearly be inferred.
With regard to movable property, its delivery may also be made by the delivery of the
keys of the place or depository where it is stored or kept.
Art 1499 The delivery of movable property may likewise be made by the mere consent
of agreement of the contracting parties, if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale, or if the latter already had it in his
possession for any other reason.
TRADITIO LONGA MANU
Takes place by the mere consent or agreement of the contracting parties as when
the vendor merely points to the thing sold which shall thereafter be at the control
and disposal of the vendee.
TRADITIO BREVI MANU
Vendee has already the possession of the thing sold by virtue of another title as
when the lessor sells the thing leaser to the lessee. Instead of the vendee turning
over the thing to the vendor so the vendor may deliver it back to the vendee, all
these are considered done by fiction of law.
Art 1500 There may also be tradition constitutum possessorium.
TRADITIO CONSITUTUM POSSESSORIUM
Opposite of tradition brevi manu.
Takes place when the vendor continues in possession of property sold not as
owner.
o Vendor stays as tenant on the vendee
Art 1501 With respect to incorporeal property, the provisions of the first paragraph of
article 1498 shall govern. In any other case wherein said provisions are not applicable,
the placing of the titles of ownership in the possession of the vendee or the use by the
vendee of his rights with vendors consent, shall be understood as a delivery.
QUASI-TRADITIO
Tradition can only be made with respect to corporeal things.
If incorporeal things, delivery is effected:
(1) By the execution of a public instrument;
(2) When that mode of delivery is not applicable, by the placing of the titles of
ownership in the possession of the vendee;
(3) By allowing the vendee to use his rights as new owner with the consent of the
vendor
Delivery of incorporeal things = quasi-traditio
Art 1503 Where there is a contact of sale of specific goods, the seller may, by the
terns of the contract, reserve the right of possession or ownership in the good until certain
conditions have been fulfilled. The right of possession or ownership may be thus reserved
notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the
purpose of transmission to the buyer.

Where goods are shipped, and by the bail of lading the goods are deliverable to the
seller or his agent, or to the order of the seller or his agent, the seller thereby reserves the
ownership in the goods. But if, except for the form od the bull of lading, the ownership
would have passes to the buyer on shipment of the goods, the sellers property in the
goods shall be deemed to be only for the purpose of securing performance by the buyer
of his obligations under the contract.
Where goods are shipped, and by the bill of lading the goods are deliverable to the order
of the buyer or of his agent, but possession of the bill of lading is retained by the seller or
his agent, the seller thereby reserves a right to the possession of the goods as against
the buyer.
Where the seller of the goods draws on the buyer for the price and transmits the bill of
exchange and the bill of lading together to the buyer to secure acceptance or payment of
the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the
bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right
thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer
or to the order of the buyer, or is indorsed in blank, or to the buyer by consignee named
therein, one who purchases in good faith, for value, the bill of lading, or goods from the
buyer will obtain the ownership in the goods, although the bill of exchange has not been
honored, provided that such purchaser has received delivery of the bill of lading indorsed
by the consignee named therein, or of the goods, without notice of the facts making the
transfer wrongful.

Bailee = a person to whom goods are delivered for a purpose, such as custody or
repair, without transfer of ownership.
Bill of Lading = a detailed list of a shipment of goods in the form of a receipt given
by the carrier to the person consigning the goods
Bill of Exchange = a written order to a person requiring the person to make a
specified payment to the signatory or to a named payee; a promissory note

GEN RULE: DELIVERY OF SPECIFIC GOODS SOLD PASSES TITLE

1. Delivery to carrier As a general rule, delivery (even if constructive) passes title in
the thing sold [1496]. Delivery to the carrier is deemed to be delivery to the buyer
[1523].
2. Redelivering by carrier to seller himself -- If the seller directs the carrier to redeliver
the goods back to him (the seller), carrier shall be bailee for the seller. Ownership will
remain with the seller.
Exceptions: RESERVATION OF RIGHT OF POSSESSION OR OWNERSHIP WHEN
SPECIFIC GOODS ARE SHIPPED
1. If a contrary intention appears by the terms of the contract [1523, 1503, 1478]
2. SELLER reserves right to possession
a. If possession of the BOL is retained by the seller
b. Even if BOL are deliverable to the order of the buyer [1503 par 2]
3. BUYER bound to return BOL if he does not accept BOE
a. if seller sets the price, transmits BOE and BOL to buyer. [1503 par 3]
4. EXCEPTION: BUYER obtains ownership
a. If BOL provides that goods are deliverable to buyer (or indorsed in blank, or
to consignee assigned)
b. if buyer purchases in GF
c. Even if BOE is not yet honored
d. Buyer has received BOL indorsed by the consignee, or of the goods, without
notice of the facts making the transfer wrongful
5. SELLERS DUTY AFTER DELIVERY TO CARRIER [1523]
To enter on behalf of buyer into such contract reasonable under the
circumstances
o Seller must contact carrier on behalf of the buyer as may be reasonable
under the circumstances

If seller omits to contact carrier,

Buyer may decline to treat the delivery to the carrier as a delivery to
himself in case the goods are lost or damaged.
Buyer may hold seller liable for damages.
To give notice to buyer regarding necessity to insure goods
o Seller must give notice to buyer to insure him (seller).
o If seller does not give notice, risks will be borne by seller.
Seller is not liable if buyer had all the info necessary to insure.
These two obligations of the seller are subject to any specific instructions of the
buyer or any agreement.
o

ON RETURN / TRIAL OF SATISFACTION

Art 1502 When goods are delivered to the buyer on sale or return to give the buyer an
option to return the goods instead of paying the price, the ownership passes to the buyer
on delivery, but he may revest the ownership in the seller by returning or tendering the
goods within the time fixed in the contract, or, if no time has been fixed, within a
reasonable time.
When goods are deliverable to the buyer on approval or in trial or on satisfaction, or
other similar terms, the ownership therein passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or does any other act
adopting the transaction;
(2) If he does not signify his approval or acceptance to the seller, but retains the goods
without giving notice of rejection, then if a time has been fixed for the return of the
goods, on the expiration of such time, and, if no time has been fixed, on the expiration
of a reasonable time. What is a reasonable time is a question of fact.
CONTRACT OF SALE OR RETURN, AND OF SALE ON TRIAL / APPROVAL /
SATISFACTION
1. Sale or return.
a. Buyer has the option to return the property to the seller instead of paying the
price.
b. Option to purchase OR return the goods rests entirely on the buyer without
reference to the quality of the goods [1504].
2. Sale on trial or approval.
a. Option to purchase if the goods prove satisfactory, the approval of the buyer
being a condition precedent
b. Ownership belongs to seller until sale becomes absolute-i. by buyers approval
ii. by failing to comply with the express/implied conditions of the
contract as to giving notice of dissatisfaction
iii. by returning the goods
SALE OR RETURN DISTINGUISHED FROM SALE ON TRIAL
Sale or return
Sale on trial
Subject to resolutory condition (happening Subject to suspensive condition
which will extinguish an obligation)
(happening which will give rise to
obligation)
Depends entirely on will of buyer
Depends on quality
Delivery passes ownership to buyer; return Ownership remains with seller until buyer
reverts ownership
signifies approval/acceptance
Risk of loss rests on buyer
Risk of loss rests on seller
PLACE AND TIME OF DELIVERY
Art 1521 Whether it is for the buyer to take the possession of the goods or the seller to
send them to the buyer is a question depending in each case on the contract, express or

implied, between the parties. Apart from any such contract, express or implied, or usage
of trade to the contrary, the place of delivery is the sellers place of business if he has
one, and if not his residence; but in case of contract of sale of specific goods, which to the
knowledge of the parties when the contract or the sale was made were in some other
place, then that place is the place of delivery.
Where by a contract of sale the seller is bound to send the goods to the buyer, but no
time for sending them is fixed, the seller is bound to send them within a reasonable time.
Where the goods at time of sale are in the possession of a third person, the seller has
not fulfilled his obligation to deliver to the buyer unless and until such third person
acknowledges to the buyer that he holds the goods on the buyers behalf.
Demand or tender of delivery may be treated as ineffectual unless made at a reasonable
hour. What is a reasonable hour is a question of fact.
Unless otherwise agreed, the expenses of incidental to putting the goods into deliverable
state must be borne by the seller.
PLACE OF DELIVERY OF GOODS SOLD
Rules
Agreement, express or implied
No agreement

No agreement, no prevalent usage

Etc etc etc
No agreement, no prevalent usage
Specific goods, which to the knowledge of
the parties at the time of the contract
was made in some other place [1251]

Place of delivery
Wherever agreed upon
Usage of trade
Place used so commonly that an
expectation arises that it will be
observed in a particular transaction
Sellers place of business
Sellers residences
Wherever the contract was made

TIME OF DELIVERY OF GOODS SOLD

Rules
Time of delivery
No time fixed
Reasonable amount of time
Fixed time for performance
If time is of the essence whether correct
performance was offered within that time
If time is not of the essence whether performance
was offered within reasonable time
No specified time for delivery Reasonable amount of time
Time is not of the essence
Buyer cannot make time the essence of contract
without giving the seller notice of his intention to
cancel unless delivery was made on/before a
fixed time.
DELIVERY OF GOODS IN POSSESSION OF A THIRD PERSON
Seller can hardly be discharged from his obligation where the goods are in the
possession of a third person by bailee to deliver to the buyer.
It is not enough to discharge the seller that the bailee has become the agent of the
buyer.
To affect third persons, the person holding the goods must acknowledge being the
bailee for the buyer.

HOUR OF DELIVERY OF GOODS SOLD

To demand delivery must be made at a reasonable hour of the day [1521 par 4].
DUTY OF SELLER TO PUT GOODS IN DELIVERABLE CONDITION
Seller bears expenses to place the thing in deliverable state [1521 par 5], unless
otherwise stipulated.
Art 1524 The vendor shall not be bound to deliver the thing sold, if the vendee has not
paid him the price, or if no period for the payment has been fixed in the contract.
GENERAL RULE: Delivery simultaneous with payment.
The obligation to deliver the thing arises from the moment of contracts perfection
and from the time obligation may be enforced [1315].
But contract of purchase and sale is bilateral and from it arises not only he obligation
to delivery the thing but also that of paying reciprocal obligations.
EXCEPTION: When delivery must be made before payment of price
If time for payment has been fixed in contract
o if period was fixed, even it has not terminated nor has vendor collected payment,
vendor is still obliged to deliver the thing sold.
o Example: S sold to B a horse for P3M. No date is fixed by parties for performance
of their respective obligations.
- S is not bound to deliver horse if B does not pay.
- But if a time for payment has been fixed, then S is obliged to deliver the horse
regardless of payment.
INCORRECT QUALITY AND/OR QUANITITY
Art 1481 In the contract of sale of goods by description or by sample, the contract may
be rescinded if the bulk of goods delivered do not correspond with the description or by
sample, and if the contract be by sample as well as by description, it is not sufficient that
the bulk of goods correspond with the sample if they do not also correspond with the
description.
The buyer shall have reasonable opportunity of comparing the bulk with the description
or sample.
SALE OF GOODS BY DESCRIPTION AND/OR SAMPLE
Bulk of goods: goods themselves as distinguished from sample and/or
description not a greater portion
1. Sale by description: If bulk of goods do not correspond with the description, contract
may be rescinded [1481]
2. Sale by sample
a. Parties contracted solely with reference to the sample, with the understanding
that the bulk was like it.
b. Vendor warrants the thing sold and to be delivered by him shall conform with the
sample in kind, character, and quality.
3. Sale by description and sample
a. Goods must satisfy all the warranties appropriate to either kind of sale [1565]
b. Bulk must correspond to both description and sample, not to either one.
2. RISK OF LOSS
Art 1409 The following contracts are inexistent and void from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;

(2)
(3)
(4)
(5)
(6)

Those which are absolutely simulated or fictitious;

Those whose cause or object did not exist at the time of transaction;
Those whose object is outside the commerce of men;
Those which contemplate an impossible service;
Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the right to set up the defense of
illegality be waived.

A void or inexistent contract has no force from the beginning and produces no effect
either against or in favor of anyone.
Generally, a contract is void either because it is totally lacking one or more requisites of
contractconsent, object, or cause; or it is expressly declared void by law.
1. Consent
a. Those which are absolutely simulated or fictitious
b. Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained
2. No cause/object
a. Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy
b. Those whose cause or object did not exist at the time of transaction
c. Those whose object is outside the commerce of men
d. Those which contemplate an impossible service
3. Expressly prohibited or declared void by law
a. Certain persons are prohibited from entering into contracts
i. Husband and wife cannot sell property to each other
ii. The ff persons cannot acquire by purchase in the enumerated situations:
- The guardian, wrt the property of the person/s who is under
guardianship
- Agents, the property whose administration or sale is entrusted to
them; unless the consent of the principal has been given
- Executors and administrators, as to the property of the estate under
admin
- Public officers and employees, the property of the State, the
administration of which has been entrusted to them
- Justices, judges, prosecuting attys, clerks of courts, and lawyers, wrt
the property and rights which may be the object of any litigation in
which they may take part by virtue of their profession
iii. Donations between husband and wife, or between those who live together
iv. Donations between those who committed adultery or concubinage
v. Sale of future inheritance
vi. Sale by an agent of real property without written authority
vii. Sale of conjugal property without spousal consent
viii. Sale by a tenant beneficiary of the land grant under PD 27 to persons not
enumerated in the law

Art 1493 If at the time the contract of sale is perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be without any effect.
But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in
proportion to the total sum agreed upon.

1493 applies to a sale of a specific thing.

EFFECT OF LOSS OF THONG AT THE TIME OF SALE

Loss/injury in 1493 is one which has taken place before or at the time the contract of sale
is perfected. It must be distinguished from loss/injury mentioned in 1480 and 1504, which
occurs after the contract is perfected but prior to the time of delivery.

1. Things entirely lost. Where the thing is entirely lost at the time of perfection, the contract
is inexistent and void [1493 par 3] because there is no object [1318 par 2].
2. Thing only partially lost. if the thing is only partially lost, buyer may choose between
withdrawing from the contract or demanding the remaining part, paying a proportionate
price.
Art 1480 Any injury to or benefit from the thing sold, after the contract has been perfected,
from the moment of the perfection of the contract of the time of delivery, shall be governed by
articles 1163, 1165, and 1262.
This rule shall apply to the sale of fungible things, made independently and for a single price,
or without consideration of their weight, number, or measure.
Should fungible things be sold for a price fixed according to weight, number, or measure, the
risk shall not be imputed to the vendee until they have been weighted, counted, or measured,
and delivered, unless the latter has incurred in delay.
RISK OF LOSS OR DETERIORATION
1. Lost before perfection seller bears loss; contract is void [1493]
2. Lost at the time of perfection contract is void [1493]
3. Lost after perfection, but before delivery buyer bears loss
4. Lost after delivery buyer bears loss
perfection
Seller bears loss
Buyer bears loss
Void contract
Void contract

delivery
Buyer bears loss

SCOPE OF ARTICLE 1480

Two scopes
1. Non-fungible things and fungible things sold independently and for a single/fixed price
without consideration for their weight, number, or measure.
a. Risk passes to buyer, even if thing is not yet delivered to him. If a house sold be
destroyed by fire, the loss falls upon the buyer who must pay the price, even though
he has nor received the thing. For the seller is not liable for anything which happens
without his fraud/negligence. But if after the sale, any alluvion for the benefit ought to
belong to him who has the risk.
b. Buyer assumes risk of fortuitous events, without the fault of the seller, and before
seller incurs in delay, after perfection of contract to the time of delivery.
c. Wrt the fruits, buyer has the right to the same from the time the obligation to deliver the
thing arises. If the risk ought to belong to the buyer before the delivery, the benefits
ought to belong to him who has the risk.
2. Fungible things sold for a single/fixed price in relation to weight, number, or measure.
a. Seller bears risk until they have been weighted, counted, or measured, and delivered,
unless the latter has incurred in delay
Art 1504 Unless otherwise agreed, the goods remain at the sellers risk until the ownership
therein is transferred to the buyer, but when the ownership therein is transferred to the buyer,
the goods are at the buyers risk whether actual delivery has been made or not, except that:
(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in
pursuance of the contract and the ownership in the goods has been retained by the seller
merely to secure performance by the buyer of his obligations under the contract, the goods
are at the buyers risk from the time of such delivery;
(2) Where actual delivery has been delayed through the fault of either the buyer or seller the
goods are at the risk of the party in fault.

GENERAL RULE: Risk loss attends title.

The general rule is if the thing lost by a fortuitous event, the risk is borne by the owner of
the thing at the time of the loss
EXCEPT:
1. Seller reserves ownership of the goods merely to secure performance by the buyer of
his obligations under the contract, the ownership is considered transferred to the buyer
who assumes the risk from the time of delivery.
2. Where the delivery has been delayed through the fault of either buyer or seller, the
goods are at the risk of the party at fault wrt any loss which might not have occurred but
for such fault. In this case, the law punishes the party at fault.
Conflict: Seller bears loss until ownership is transferred vs buyer bears loss after perfection
and before delivery.
Art 1494 Where the parties purports a sale of specific goods, and the goods without the
knowledge of the seller have perished in part or have wholly or in a material part so deteriorated
in quality as to be substantially changed in character, the buyer may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not deteriorated, and as
binding the buyer to pay the agreed price for the goods in which the ownership will pass,
if the sale was divisible.
EFFECTS OF LOSS IN CASE OF SPECIFIC GOODS
1493 applies to a sale of a specific thing; article 1494 applies only to sales of goods
1493 and 1494 both have the same essence providing two alternative remedies to the
buyer in case of deterioration or partial loss of the object prior to the sale.
1. Sale divisible
a. A contract is divisible when its consideration is made of several parts. When
consideration is entire and single, the contract is indivisible.
b. The sale is valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the goods in which
the ownership will pass.
2. Sale indivisible
a. Buyer should be made to pay only the proportionate price of the remaining goods.
b. Object may be considered as a specific thing.
3. SALE BY NON-OWNER
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 acquire no better title to the goods than the seller had, unless the owner of the goods is
by his conduct precluded from denying the sellers authority to sell.
Nothing in this Title shall affect:
(1) The provisions of any factors acts, recordings 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 merchants store, or in fairs, or markets, in accordance with the Code of
Commerce and special laws.
GENERAL RULE: no one can give what he has not.
Exceptions:
(1) Where the owner of the good cannot deny the sellers authority to sell, by his own conduct
Purchaser in gf acquires a valid title to the property as it is not lawful or permissible for
said owner to deny or retrach his former sworn statement the he consented the sale.
(2) Where the law enables the apparent owner to dispose of the goods as if he were the true
owner.
Property Registration Decree
Land Transportation and Traffic Code

 Revised Administrative Code with regard to sale of large cattle and sale of vessels
(3) Where the sale is sanctioned by statutory or juridical authority.
The possession of movable property acquired in gf is equivalent to title
One who has lost any movable (or has been unlawfully deprived of) property may
recover it from the person in possession of the property.
If the possessor acquired the property in gf, owner needs to reimburse.
(4) Where the sale is made at merchants store, fairs, or markets.
(5) Where the seller has a voidable title which has not been avoided at the time of sale [1506].
(6) Where seller subsequently acquires title.
4. DOUBLE SALE
Art 1544 If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in possession; and, in the absence thereof, to the person who presents the oldest title,
provided there is good faith.
RULES AS TO PREFERENCE OF OWNERSHIP IN CASE OF A DOUBLE SALE
Seller sells to two different buyers conflict
1. Movable property
Ownership belongs to buyer who first takes possession in gf.
2. Immovable property, ownership belongs to:
Buyer who first registers the sale in gf in Registry of Property
If no registration, buyer who first takes possession in gf
If no registration and no possession, buyer who first bought the property in gf
5. CONDITIONS AND WARRANTIES
Art 1545 Where the obligation of either party to a contract of sale is subject to any condition
which is not performed, such party may refuse to proceed with the contract or he may waive
performance of the condition. If the other party has promised that the condition should happen or
be performed, such first mentioned party may also treat the non-performance of the condition as a
breach of warranty.
Where the ownership in the thing has not passed, the buyer may treat the fulfillment by the seller
or his obligation to deliver the same as described and was warranted expressly or by implication
in the contract of sale as condition of the obligation of the buyer to perform his promise to accept
and pay for the thing.

Condition means an uncertain event or contingency on the happening of which the obligation
of the contract depends.

EFFECT OF NON-FULFILLMENT OF CONDITION

Contract of sale may be absolute or conditional [1458].
1. If obligation of either party is subject to a condition and is not fulfilled, party may either
a. Refuse to proceed with contract; or
b. Proceed with contract, but waive the performance of condition
2. If condition is in the nature of a promise that it should happen, the non-performance may be
treated as a breach of warranty.

Art 1546 Any affirmation of fact or any promise by the seller relating to the thing is an express
warranty if the natural tendency of such affirmation or promise is to induce the buyer to purchase
the same, and if the buyer purchases the thing relying thereon. No affirmation of the value of the
thing, nor any statement purporting to be a statement of sellers opinion only, shall be construed
as warranty, unless the seller made such affirmation or statement as an expert and it was relied
upon the buyer.
Warranty is any representation made by the seller wrt its character, quality, or ownership, by
which he induces the buyer to purchase the thing.
KINDS OF WARRANTIES
Implied or express
Seller is liable of his express and implied warranties, absence of hidden defects, fitness of
merchantability, description, and sample.
EFFECT OF EXPRESS WARRANTY
No intent is necessary to make the seller liable for his warranty.
Example: S sells B a car for P60k
- S says car is worth P70k
- B test runs the car, expresses satisfaction over condition.
- Car is only worth P50k.
- In this case, B has no right of action for breach of warranty.
EFFECT OF EXPRESSION OF OPINION
Not held to create a warranty
Art 1547 In a contract to sale, unless a contrary intention appears, there is:
(1) An implied warranty on the part of the seller that he has a right to sell the thing at the time
when the ownership is to pass, and that the buyer shall from the time have an enjoy the legal
and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults or defects, or any
charge or encumbrance not declared or known to the buyer.
This article shall not, however, be held to render liable a sheriff, auctioneer, mortagee, pledgee,
or other person professing to sell by virtue of authority in fact or law, for the sale of a thing in
which a third person has a legal or equitable interest.

Implied warranty is irrespective of the sellers intention to create it. Not expresses in any
words.

IMPLIED WARRANTIES IN SALE

1. Implied warranty as to sellers title. Seller guarantees that he has a right to sell the thing
sold and to transfer ownership to the buyer.
2. Implied warranty against hidden defects. Seller guarantees the thing is free from any hidden
faults.
3. Implied warranty as to fitness or merchantability. Seller guarantees the thing is reasonably
fir for the known particular purpose for which it was acquired by the buyer.
WHEN IMPLIED WARRANTY NOT APPLICABLE
1. As is and where is sale. Seller makes no warranty as to the condition of the goods. Buyer
takes the in the conditions in which the are found and from the place they are located.
2. Sale of secondhand articles.
3. Sale by virtue of authority in fact or law. Sheriff, auctioneer, mortgagee, pledgee are not
liable to a person with a legal interest in the thing sold.
OBLIGATION OF BUYER

Art 1582 The vendee is bound to accept delivery and to pay the price of the thing at the time
and place stipulated in the contract.
If the time and lace should not have been stipulated, the payment must be made at the time and
place of the delivery of the thing sold.
PRINCIPAL OBLIGATIONS OF THE BUYER
1. To accept delivery
2. To pay the price
3. To bear the expenses for the executing and registration of the sale and putting the goods in a
deliverable state (if such is the stipulation)
PERTINENT RULES
1. In contract of sale, seller is not required to deliver the thing sold until the price is paid nor the
buyer to pay the price before the thing is delivered in the absence of any stipulation [1524].
2. If stipulated, buyer is bound to accept delivery and to pay at the time and place designated.
3. If not stipulated as to the time and place of payment and delivery, buyer is bound to pay at at
the time and place of delivery.
4. If not stipulated, as to place of delivery, it shall be made wherever the thing might be at the
moment the contract was perfected.
5. If only the time for delivery of the thing has been fixed in the contract, buyer is required to pay
even before the thing is delivered to him.
Examples:
1. S sold to B a specific refrigerator for P8k.
- S is not bound to deliver until payment of B. B is not required to pay P8k until delivery by S.
- From the moment either party performs his obligation, the other must comply with his part.
Otherwise, he is guilty of delay [1169].
2. If it is stipulated that B must accept refrigerator and pay the price at the house of S on
October 10,
- then B is bound to accept delivery and pay the price on October 10 at the house of S.
3. If no stipulation, as to time and place of delivery, and S delivers the refrigerator at the house
of B on October 10, then B is bound to pay at the same time and place.
4. If no stipulation, S is not required to deliver the refrigerator at the house of B because in such
case the place of delivery shall be where the refrigerator was at the moment of perfection of
contract.
5. If obligation to S to deliver is subject to a period which has not yet expired, B is bound to pay
even before the refrigerator is delivered to him.
- If the sale is on credit, B is entitled to its delivery through the price be not first paid.
1. ACCEPTANCE OF DELIVERY
Art 1522 Where the seller delivers to the buyer a quantity of goods less than he contracted to
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered,
knowing that the seller is not going to perform the contract in full, he must pay for them at the
contract rate. If, however, the buyer has used or disposed of the goods delivered before he knows
that the seller is not going to perform his contract in fill, the buyer shall not be liable for more that
the fair value to him of the goods so received.
Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the
buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the
whole of the goods so delivered he must pay for them at the contract rate.
Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of
different description not included in the contract, the buyer may accept the goods which are in
accordance with the contract and reject the rest.
In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject the
whole of the goods.

The provision of this article are subject to any usage of trade, special agreement, or course of
dealing between the parties.
DELIVERY OF GOODS LESS THAN QUANTITY CONTRACTED
Buyer may reject the goods delivered [1233]
Buyer may accept the goods, and must pay for their
1. price at contract rate if he knew that no more were to be delivered
2. fair value if he did not know seller is going to be guilty of breach
DELIVERY OF GOODS MORE THAN QUANTITY CONTRACTED
Buyer may accept the quantity contracted and reject the excess
Buyer may accept all and pay for all
DELIVERY OF GOODS MIXED WITH OTHERS
Buyer may accept those in accordance with contract and reject the rest
Buyer may accept all
EXCESS OF INDIVISIBILITY OF THING
If delivery more than quantity contracted or of mixed goods, and thing is indivisible, buyer may
reject the whole goods.
Examples:
o S agreed to sell a 100-120 kg carabao to B. S delivered a 130kg carabao. B may reject
the carabao.
o S agreed to deliver wagwag rice mixed with corn of a particular variety and the rice or
corn delivered is of a different variety, B may reject the whole of goods.
RULES MAY BE CONTROLLED BY USAGE OF TRADE
The provision of this article are subject to any usage of trade, special agreement, or course
of dealing between the parties.
Art 1583 - Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof
by installments.
Where there is contract of sale of goods to be delivered by stated installments, which are to be
separately paid for, and the seller makes defective deliveries in respect to one or more
installments, or the buyer neglects or refuses without just cause to take delivery of or pay for one
or more installments, it depends in each case on the terms of the contract and circumstances of
each case, whether the breach of contract is so material as to justify the injured party in refusing
to proceed further and suing for damages for breach of the entire contract, or whether the breach
is severable, giving rise to a claim for compensation but not a right to treat the whole contract as
broken.
GENERAL RULE: Buyer is not bound to receive delivery of the goods in installment.
- Buyer has no right to pay and cannot be forced to pay the prince in installments.
EXCEPTIONS: Rules governing delivery in installments
1. Where separate price has been fixed for each installment. Where the contract provides for
the delivery of goods by installments and a separate price has been agreed upon for each
installment, it depends in each case on the terms of the contract and the circumstances of the
case whether the breach is divisible or not.
2. Where breach effects whole contract. If seller makes defective deliveries or buyer
wrongfully neglects or refuses to accept delivery or fails to pay any installment, the injured
party may sue for damages for breach of entire contract if the breach is so material as to
affect the whole contract.
3. Where breach divisible. Where the breach is divisible, it merely gives rise to ca claim for
compensation for the particular breach but not a right to treat the whole contract as broken.

Example:
Facts: S agreed to deliver to B, for a period of 10 years, a specified amount of gas tar. S failed
to make delivery up to a certain date and flatly refuses to make any delivery under the
contract/
Issue: May B sue for breach of entire contract?
Held: Yes. A contract to do several things at several times is divisible in nature, so as to entitle
the injured party to damages from time to time for breaches as they occur. But an unqualified
and positive refusal to perform a contract, through the performance of the contract is not yet
due, may be treated as a complete breach entitling and requiring the injured party to recover
all his damages in one suit.
Art 1584 Where goods are delivered to the buyer, which he has not previously examined, he is
not deemed to have accepted them unless and until has had reasonable opportunity of examining
them for the purpose of ascertaining whether they are in conformity with the contract, if there is no
stipulation to the contrary.
Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on
request, to afford the buyer a reasonable opportunity of examining the goods for he purpose
ascertaining whether they are in conformity with the contract.
Where goods are delivered to a carrier by the seller, in accordance with an order from or
agreement with the buyer, upon the terms that the goods shall not be delivered by the carrier to
the buyer until he has paid the price, whether such terms are indicated by marking the goods with
the words collect on delivery, or otherwise, the buyer is not entitled to examine the goods before
the payment of the price, in the absence of agreement or usage of trade permitting such
examination.
BUYERS RIGHT TO EXAMINATION
1. Actual delivery contemplated. Ownership of the goods shall be transferred only upon actual
delivery subject to a reasonable opportunity of examining them to determine if they are in
conformity with the contract. The right of examination is a condition precedent to the transfer
of ownership unless contrary stipulated.
2. Goods delivered C.O.D / not C.O.D. When the seller is authorized or required to send the
goods to the buyer, delivery of the goods to a carrier for the purpose of transmission is
deemed delivery to the buyer [1523, 1].
a. Although title passes to the buyer by the mere delivery to the carrier, the buyer unless
the goods are sent COD which is the normal procedure in importations, has the right
to examine the goods before paying. In this case, the right to examine is a condition
precedent to paying the price after ownership has passed.
b. Even in a COD sale, the buyer is allowed to examine the goods before payment of
the price should it have been so agreed upon or if it is permitted by usage.
RIGHT OF EXAMINATION NOT ABSOLUTE
Buyer does not have an absolute right of examination since seller is bound to afford the
buyer a reasonable opportunity of examining the goods only on request. Such opportunity
to examine should be availed of within reasonable time in order that the seller may not suffer
undue delay.
If seller refused to allow opportunity for examination, the buyer may rescind the contract.
WAIVE OF RIGHT TO EXAMINE BEFORE PAYMENT
Waiver does not need to be express.
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 an 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 the he has rejected them.

MODES OF ACCEPTANCE
1. Express
2. Implied buyer did not reject after a lapse of reasonable time
- retention of goods is strong evidence that the buyer accepted ownership.
** DELIVERY =/= ACCEPTANCE
Art 1586 In the absence of express or implied agreement of the parties, acceptance of the
goods by the buyer shall not discharge the seller from liability in damages or other legal remedy
for breach of any promise or warranty in the contract of sale. But, if, after acceptance of the
goods, the buyer fails to give notice to the seller of the breach in any promise of warranty within a
reasonable time after the buyer knows, or ought to know of such breach, the seller shall not be
liable therefor.
GENERAL RULE: Acceptance not a bar to action for damages.
Acceptance does not carry with it the additional agreement that the property in the goods
shall be taken in full satisfaction of obligations.
Art 1587 Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to
accept them, having the right so to do, he is not bound to return them to the seller, but it is
sufficient if he notifies the seller that he refuses to accept them. If he voluntarily constitutes
himself a depositary thereof, he shall be liable as such.
BUYERS REFUSAL TO ACCEPT JUSTIFIED
1. Duty of buyer to take care of goods without obligation to return.
- Goods have been sent to buyer.
- Goods not of kind and quality agreed upon buyer refuses to accept.
- Buyer position of bailee; take reasonable care of the goods; no oblig to return the
goods to seller
2. Duty of seller to take delivery of goods.
- After notice goods are not accepted
3. Sellers risk of loss.
- Goods remain in the buyers possession.
- But buyer is not liable as depositary unless he voluntarily constitutes as such.
4. Right of buyer to resell goods. [1533]
- If seller fails to take delivery of goods, after notified.

Art 1588 If there is not stipulation as specified in the first paragraph of article 1523, when the
buyers refusal to accept the goods is without just cause, the title thereto passes to him from the
moment they are placed at his disposal.
GENERAL RULE: Delivery transfers ownership [1523]
Exception: 1587 refusal with just cause; depositary
2. PAYMENT OF PRICE
Art 1589 The buyer shall owe interest for the period between the delivery of the thing and the
payment of the price, in the ff three cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of
the price.
** when delivery and payment are not simultaneous

GEN RULE: LIABILITY OF BUYER FOR INTEREST WHERE PAYMENT MADE AFTER
DELIVERY
1. Interest expressly stipulated.
- Rate stipulated governs
- If not stipulated, 12% (legal rate)
- No demand necessary
2. Fruits or income received by buyer from thing sold.
- TWO conditions: (1) delivery and (2) thing produces fruits or income
- No demand necessary
3. Buyer guilty of default
- Buyer incurs in delay in payment of price interest is due from the time of extra/judicial
demand by seller for the payment of price
- Demand necessary
Art 1590 Should the vendee be disturbed in the possession of ownership of the thing acquired,
or should he have reasonable grounds to fear such disturbance, by a vindicatory action or
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.
EXCEPTION: Buyer can suspend payment.
1. Buyer disturbed in the ownership
2. Buyer has reasonable fear ownership would be disturbed by a vindicatory action or
foreclosure of mortgage
WHEN BUYER CANNOT SUSPEND PAYMENT
1. If seller gives security for the return of the price in a proper case
2. If stipulated buyer pays regardless [1548]
3. If seller case the disturbance or danger to cease
4. If disturbance is merely trespassing
5. If buyer fully paid the price
Art 1591 Should the seller have reasonable grounds to fear the loss of immovable property
sold and its price, he may immediately sue for rescission of the sale. Should such ground not
exist, the provision of article 1191 shall be observed.

Seller has good reasons to fear the loss of property and price
there was delivery, but no payment yet

WHEN SELLER CAN RESCIND SALE OF IMMOVABLE PROPERTY

Ex: Buyer has not yet paid, but destroyed the building. To think of demanding the payment from
the buyer is something useless, because buyer shows signs of irresponsibility. The only remedy of
the seller is RESCISSION.