BUSLAW4 – Lesson 5
 If vendee is in default from the time of demand for payment of
RULES GOVERNING DELIVERY IN INSTALLMENT
 The buyer or goods is not bound to accept delivery by
installment, unless stipulated.
 Where separate price has been fixed for each installment, the
buyer may reject the succeeding installment in case of
defective deliveries, and sue for breach of contract
 Where the buyer unjustly refuse to accept delivery or to pay
one or more installments, seller may sue for breach of contract
if the breach is so material as to affect the whole contract.
 Where breach is severable, it will give rise to claim for
compensation for the particular breach but will not affect the
whole contract.
BUYER’S RIGHT TO EXAMINE THE GOODS
Arises:
 In actual delivery of goods
 In goods delivered COD/not COD, if stipulated or if permitted
under usage of trade
MODES OF MANIFESTING ACCEPTANCE
 Express acceptance – verbal or in writing
 Implied acceptance – buyer does any act inconsistent with the
seller’s ownership
– buyer retains the goods after the lapsed
of reasonable time
BREACH OF PROMISE OR WARRANTY
 Buyer should give notice to seller of any such breach within
reasonable time
 Failure to give notice to the seller within reasonable time shall
discharge the seller of his liability
EFFECT OF REFUSAL TO ACCEPT DELIVERY
Valid refusal
 Buyer should notify the seller of his refusal to accept the goods
 Buyer has the obligation to take reasonable care of the goods
 Seller has the duty to take delivery of the goods
 Risk of loss is on the seller
 Buyer may resell goods if seller ails to take delivery of the goods
Wrong refusal
 Title passes to the buyer
 Risk of loss is borne by the buyer
LIABILITY OF THE VENDEE FOR INTEREST
Vendee is liable for the interest from the time of delivery to the
payment of the price:
 If interest is stipulated
 If the thing sold and delivered produce fruits or income
the price
RIGHTS OF VENDEE TO SUSPEND PAYMENT
1. If vendee is disturbed in the possession or ownership of the
thing bought
2. If the vendee has well-grounded fear that his possession would
be disturbed by a vindicatory action or foreclosure of mortgage
CAUSES WHEN VENDEE MAY NOT SUSPEND PAYMENT
1. If the vendor gives security for the return of the price in a
proper case
2. If it has been stipulated that notwithstanding any such
contingency, the vendee must make payment
3. If the vendor has caused the disturbance or danger to cease
4. If the disturbance is a mere act of trespass
5. If the vendee has fully paid the price
RULE ON RESCISSION OF SALE OF REAL PROPERTY
General Rule:
Vendor may sue for rescission of the contract should the vendee fail
to pay the agreed price
Exceptions:
 If there is a stipulation to the contrary
 If the vendee pay even after the stipulated time but before
demand for rescission has been made by the vendor
RESCISSION OF SALE OF MOVABLE PROPERTY
Cases when vendor may rescind contract of sale:
1. Failure of the vendee to appear to receive delivery
2. Having appeared, failed to tender the price of the same, unless,
a longer period for its payment has been stipulated
REMEDIES OF THE SELLER FOR BREACH OF CONTRACT OF SALE
1. Action for payment of the price
2. Action for damages for non-acceptance of the goods
3. Action for rescission
ACTION OF THE SELLER FOR PAYMENT OF THE PRICE
1. When ownership of the goods has passed to the buyer and he
wrongfully neglects or refuse to pay for the price.
2. When the price is payable on a certain day and he wrongfully
neglects or refuses to pay such price irrespective of delivery or
transfer of title.
3. When the goods cannot readily be resold for a reasonable price
and the buyer wrongfully refuses to accept them even before
the ownership in the goods has passed.
ACTION OF THE SELLER FOR DAMAGES FOR NON-ACCEPTANCE OF 3. The buyer has the right to hold the goods as bailee for the seller
THE GOODS should the latter refuse the return of the goods.
4. The buyer may have lien on the goods for any portion of the
1. In case of wrongful neglect or refusal by the buyer to accept or price already paid
pay for the thing sold
2. In an executory contract, where the ownership in the goods has MODES OF EXTINGUISHMENT OF SALE
not passed, and the seller cannot maintain an action to recover
the price. 1. Common – those causes which are also the means of
3. If the goods are not yet identified at the time of the contract or extinguishing all other contracts
subsequently 2. Special – those causes which are recognized by the law of sales
3. Extra-special – Conventional redemption
ACTION OF THE SELLER FOR RESCISSION – Legal redemption

1. When the buyer has repudiated the contract of sale CONVENTIONAL REDEMPTION
2. When the buyer has manifested his inability to perform his
obligation thereunder 1. Seller reserved the right to repurchase thing sold
3. When the buyer has committed a breach of the contract of sale 2. Coupled with obligation to return price of the sale, expenses of
contract and other legitimate payments and the necessary and
REMEDIES OF THE BUYER FOR BREACH OF CONTRACT OF SALE useful expenses made on the thing sold
3. Right must be recognized in the deed of sale
 Action for specific performed
 Action for rescission or damages for breach of warranty INSTANCES OF EQUITABLE MORTGAGE

ACTION OF BUYER FOR SPECIFIC PERFORMANCE
1. Where the seller has broken the contract to deliver specific or
ascertained goods
2. The judgment or decree may be unconditional, or upon such
terms and conditions as to damages, payment of the price and
otherwise as the court may deem just.
ACTION OF BUYER FOR RESCISSION OR DAMAGES FOR BREACH OF
WARRANTY
1. Price of sale with right to repurchase is unusually inadequate.
2. Seller remains in possession as a lessee or otherwise.
3. Upon/after expiration of right to repurchase, another
instrument extending the period of redemption is executed.
4. Buyer retains for himself a part of the purchase price.
5. Seller binds himself to pay taxes on thing sold.
6. Real intention of parties is to secure the payment of a debt or
performance of other obligation
EFFECT OF FAILURE TO EXERCISE RIGHT OF REDEMPTION

1. Recoupment – accept the goods and set up the seller’s breach
to reduce or extinguish price.
2. Action for damages – accept the goods and maintain an action
for damages for breach of warranty.
3. Counterclaim for damages – refuse to accept the goods and
maintain an action for damages for breach of warranty.
4. Rescission – rescind the contract by returning or offering the
return of the goods and recover the price already paid.
INSTANCES WHEN RESCISSION BY BUYER ARE NOT ALLOWED
1. If the buyer accepted the goods knowing of the breach of
warranty without protest
2. If he fails to notify the seller within a reasonable time of his
election to rescind
3. If he fails to return or offer to return the goods in substantially
a good condition as they were in at the time of the transfer of
ownership to him
RIGHTS AND OBLIGATIONS OF THE BUYER IN CASE OF RESCISSION
1. The buyer cease to be liable for the price, his obligation is to
return the goods
2. The buyer may recover the price he has paid
1. Buyer a retro automatically acquires full ownership
2. There must be judicial order before ownership of real property
is consolidate in the buyer a retro
RIGHTS OF VENDEE A RETRO
1. To be subrogated to the vendor’s right and actions.
2. Right against creditor of the vendor not to exercise the right of
redemption until after they have exhausted the property of the
vendor.
3. To compel the vendor of a part of undivided immovable to
redeem the whole property in case the vendee a retro of such
part acquires the entire immovable.
REDEMPTION IN JOINT SALE BY CO-OWNERS/CO-HEIRS
Rule:
1. When an undivided thing is sold by co-owners/co-heirs,
vendors a retro may only exercise his right over his respective
share.
2. Vendee a retro may demand that they must come to an
agreement first and may not be compelled to consent to a
partial redemption.
3. When rights of co-owners over an undivided thing is sold as RIGHT OF LEGAL REDEMPTION OF ADJACENT OWNERS OF RURAL
regards to their own share – vendee a retro cannot compel one LANDS
to redeem the whole property.
1. Both the land of the one exercising the right of redemption and
REDEMPTION AGAINST HEIRS OF VENDEE the land sought to be redeemed must be rural
2. The lands must be adjacent
Rules: 3. There must be an alienation
4. The rural land must not exceed one (1) hectare
1. The vendor a retro can exercise the right to redeem against the
5. The vendee must also own some rural land
heirs of the vendee a retro with respect only to their respective
6. The rural land must not be separated by brooks, drains, ravines,
share.
roads, and other apparent servitudes from the adjoining land.
2. If the property has been divided and the thing sold has been
awarded to one of the heirs, the vendor can exercise the right PRE-EMPTION VS REDEMPTION
to redeem against such heir.
PRE-EMPTION REDEMPTION
EFFECT OF RIGHT OF REDEMPTION Arises before sale Arises after sale
No rescission because no sale There can be rescission of the
Vendor a retro must return first the following: as yet exists original sale
The action is directed against Action is directed against the
1. The price of the thing sold the prospective seller buyer
2. Expenses of the contract and other legitimate payments made
by reason of the sale
3. Necessary and useful expenses made on thing sold PERIOD OF REDEMPTION

RIGHTS OF PARTNERS AS TO FRUITS OF LAND 1. Right of legal pre-emption of redemption shall be exercised
within 30 days from notice by the buyer.
Rules: 2. Deed of sale not to be recorded in Registry of Deeds unless
accompanied by affidavit that buyer has given notice to
1. If there were fruits at the time of sale and the vendee paid for redemptioners.
them, he must be reimbursed at the time of redemption.
2. If no indemnity was paid, there shall be no reimbursement at
the time of redemption.
3. If the property has no fruit at the time of sale and there are
some at the time of redemption, the vendee shall received a
prorated portion corresponding to the last year he possessed
the property.

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 the thing
by purchase or by dation in payment or by other transaction
whereby ownership is transmitted by onerous title.

RIGHT OF LEGEL REDEMPTION OF CO-OWNER

Requisites:

1. There must be a co-ownership

2. There must be alienation of all or of any of the shares of the
other co-owners
3. The sale must be to a 3rd person

RIGHT OF LEGAL REDEMPTION

1. Any co-owner may exercise right of redemption by paying

reasonable price of property to the buyer.
2. If 2 or more co-owners desire to exercise right of redemption,
they may only do so in proportion to the share they may
respectively have in the thing owned in common.