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Contract of Sale. 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.
Object Must be Licit or Lawful. There are two kinds of illicit things:
a. Illicit per se—when by its nature it is heinous, immoral or wrongful
b. Illicit per accidens—when it is prohibited by law
Emptio rei speratae—a sale of an expected thing subject to the condition that the thing will come
to existence. If the thing did not come into existence, the contract is not effective and the buyer
has no obligation to pay the price. Presumption is in favor of this kind of sale, because it is more
in keeping with the commutative character of a sale.
Emptio spei—a sale of a hope or expectancy. The contracting parties intended that contract of
sale to exist at all events, whether or not the expected thing will come into existence such that the
buyer will have to pay the purchase price, such that the contract becomes aleatory in nature.
Contract for a Piece of Work—The article sold is specially manufactured and upon the special
order of the customer. Article is not sold in the ordinary course of business. (See. Concrete
Aggregates vs. CTA)
Money Exchange.
If local currency is exchanged for foreign currency—there is purchase and sale.
If the local currency is exchanged with other denominations of the local currency also,
there is barter (Same rule if Foreign Currency exchanged in the Philippines for another
foreign currency)
PRICE
- the sum stipulated as the equivalent of the thing sold and also every incident taken into
consideration for the fixing of the price, which was agreed upon by both parties.
Effect when the price is not fixed by the 3rd person designated
1. If the 3rd person refuses or cannot fix the price, the contract shall become ineffective, unless
the parties subsequently agree upon the price
2. If the 3rd person is prevented from fixing the price by the fault of the seller or buyer, the party
not in fault may obtain redress against the party in fault.
Effect of Simulated Price. Sale is void, unless it could be shown that the parties intended a
donation or some other act of liberality.
Price Simulated- No price to support a contract of sale, such that neither party had any
intention that the amount will be paid—void
Price is False- there is a real price not declared—contract is valid, but the underlying deed
is subject to reformation to indicate the real price upon which the minds of the parties have met.
PERFECTION OF CONTRACT OF SALE. Meeting of the minds upon the thing and price.
Effect: Parties may reciprocally demand performance
OPTION CONTRACT. A Privilege existing in one person, for which he had paid a consideration,
which gives him the right to buy, certain merchandise or property from another person at anytime
within the agreed period at a fixed price. In case of breach of promise to buy or to sell, injured
party can only seek damages. (See Art. 1479)
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Test to Determine whether a Contract is A contract of Sale or An Option. Whether or not the
agreement could be specifically enforced. If such stipulation could be independently enforced
from the contract, then such stipulation is an option.
Art. 1163. Every person obliged to give something is also obliged to take care
of it with the proper diligence of a good father of a family, unless the law or the
stipulation of the parties requires another standard of care
Art. 1164. The creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, he shall acquire no real right over it
until the same has been delivered to him.
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in
addition to the right granted him by Article 1170, may compel the debtor to
make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be
complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more
persons who do not have the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery
Art. 1262. An obligation which consists in the delivery of a determinate thing
shall be extinguished if it should be lost or destroyed without the fault of the
debtor, and before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the
loss of the thing does not extinguish the obligation, and he shall be responsible
for damages. The same rule applies when the nature of the obligation requires
the assumption of risk.
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II. 1504 Applicability. Principle of Res Perit Domino. Vendor bears risk of loss until ownership
is transferred by delivery.
Exceptions: a) Where delivery of goods has been made but ownership is retained by
the seller merely to secure performance of buyer’s obligation
b) Where actual delivery is delayed through fault of the buyer.
Sale of Goods By Description- where a seller sells a thing as being of a certain kind verbally
describing them and the buyer simply relies on the seller’s descriptions of the things, not knowing
whether the seller’s representations are true or not.
Sale by Sample- Where the seller warrants that the bulk of goods being sold correspond with the
sample or samples exhibited not only in kind but also in quality and character.
Sale by Description and Sample- Where the seller has to satisfy the requirements in sale by
description and sample. There are two-fold warranty here: (a) the goods purchased matched with
the description and (b) the goods also matched in kind, quality and character with that of the
sample or samples exhibited to the buyer or his representative
The stipulation that the instalments or rents shall not be returned to the vendee or
lessee shall be valid as long as it is not unconscionable. (1486)
ART. 1489.
Two Kinds of Incapacity:
1. Absolute Incapacity- Party cannot bind himself in any case.
2. Relative Incapacity- Certain Persons under certain circumstances cannot buy certain
property.
Necessaries—those things which are needed for sustenance, dwelling, clothing and medical
attendance, in keeping with the financial capacity of the family of the incapacitated person.
** Either spouse may not assail illegality because they are parties thereto.
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** A spouse designated as agent of the other spouse may sell the latter’s exclusive property.
ART. 1492. 1490 and 1491 Applicable to Legal Redemption, Compromises and
Renunciations.
ART. 1493. Loss of Object Before Sale. Complete and Partial Loss.
Partial Loss Rules:
1. Vendee may withdraw from the contract
2. Demand the remaining part, paying its price in proportion to the total sum agreed upon
**Execution sales do not require the delivery of thing since a one year period of redemption is
available to seller.
KINDS OF DELIVERY
1. Actual or Real. (1497)
2. Legal or Constructive
a. Legal Formalities (1498); execution of public instrument.
b. Symbolical Tradition (1498 par 2)- keys delivered.
c. Traditio Longa Manu- by mere consent /agreement. If the movable sold cannot yet be
transferred to the possession of the buyer at the time of the sale. (1499)
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d. Traditio Brevi Manu- if the buyer had already the possession of the object even before the
purchase. (lessee becomes owner)
e. Traditio constitutum possessorium- possession as owner changed. (Owner becomes
lessee)
ART. 1502.
Transaction on Sale or Return. Subject to Resolutory Condition.
Difference with “Delivery with option to purchase”- Ownership is transferred in Sale or
Return
4. Where the seller has a voidable title which has not been avoided at the time of the sale.
5. Where seller subsequently acquires title.
6. Where the sale is sold at merchant’s stores, fairs or markets.
ART. 1506. SALE BY ONE HAVING A VOIDABLE TITLE-BUYER ACQUIRES GOOD TITLE.
1. Bought before the title of seller has been avoided.
2. in GF for value
3. without notice of the seller’s defect of title.
Document of Title of Goods—includes any bill of lading, dock warrant, quedan, or warehouse
receipt or order for the delivery of goods, or any other document used in the ordinary course of
business in the sale or transfer of goods, or authorizing or purporting to authorize the possessor
of the document to transfer or receive, either by indorsement or by delivery, goods represented
by such document.
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1. Bill of Lading- It is a contract or receipt for the transport of goods and their delivery to the
person named therein, to order or to bearer. It usually involves three persons: the carrier, the
shipper and the consignee.
2. Dock Warrant- it is an instrument given by dock owners to an importer of goods warehoused
on the dock as a recognition of the importers title to the said goods, upon production of the bill of
lading.
3. Quedan- a warehouse receipt for commodities or goods such as sugar, tobacco, rice or hemp
4. Warehouse Receipt—A receipt wherein it is stated that certain goods were received by the
bailee to be delivered to the bearer or to the order of any person named in such receipt or to a
specified person
5. Letter of Credit—it is nothing more than a commitment by the issuer that the party in whose
favor it is issued and who can collect upon it will have his credit against the applicant of the letter
duly paid in the amount therein specified.
Rights acquired:
1. Title to the goods as against the transferor.
2. The right to notify the bailee of the transfer thereof.
3. The right, thereafter to acquire the obligation of the bailee to hold the goods for him.
**Rights not absolute. They are subject to the terms of any agreement with the transferor.
**Before Notification the bailee is not bound to the transferee whose right may be defeated by a
levy of an attachment or execution upon the goods by the creditor of the transferor or by a
notification to such bailee of the subsequent sale of the goods.
ART. 1517. INDORSER NOT GUARANTOR. THEREFORE NOT LIABLE FOR BAILEE’S
FAILURE OR PREVIOUS INDORSERS.
ART. 1518. WHEN NEGOTIATION NOT IMPAIRED BY FRAUD, MISTAKE, DURESS, LOSS,
THEFT, OR CONVERSION. OR THERE WAS BREACH OF DUTY OF TRANSFEROR.
--If the transferee paid value, without notice of such factors, therefore in Good Faith
ART. 1521.
A. PLACE OF DELIVERY OF GOODS
1. Agreement.
2. Usage of trade.
3. Seller’s place of business
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4. Seller’s residence.
5. Specific Goods: Place where goods are at the time of contract known to parties.
ART. 1522
A. DELIVERY OF GOODS LESS THAN THE QUANTITY CONTRACTED.
1. Buyer may reject.
2. Buyer may accept by paying:
a. price at the contract rate if he knew that no more were to be delivered
b. fair value (reasonable market value) of the goods if he did not know that the seller is going
to be guilty of breach of contract.
** If goods are indivisible the buyer may reject the whole of the goods.
** Rules may be controlled by usage or agreement.
ART. 1524. NO DUTY TO DELIVER IF VENDEE HAS NOT PAID OR NO PERIOD FOR
PAYMENT FIXED IN THE CONTRACT.
“Seller”- includes agent of the seller to whom the BOL has been indorsed; or a consignor or agent
who has himself paid or is directly responsible for the price.
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ART. 1527. WHEN UNPAID SELLER’S POSSESSORY LIEN MAY BE EXERCISED. [SEI]
1. Sales without stipulation as to credit.
2. Expiration of term of credit.
3. Insolvency of the buyer.
ART. 1528. LIEN ON THE REMAINDER WHEN THERE’S PART DELIVERY, UNLESS INTENT
TO WAIVE THE LIEN OR RIGHT OF RETENTION.
*** When unpaid seller becomes judgment creditor he does not lose his lien.
*** Goods delivered to a ship, freight, train, truck or airplane chartered by the buyer—
circumstantial whether they are in possession of the carrier or as agent of the buyer.
*** Part of Delivery made to buyer or agent—remainder may be stopped in transitu, unless there
is showing an agreement with buyer to give up possession of the whole of goods.
--Notice to be effectual must be given in such time and circumstance that the principal by the
exercise of reasonable diligence may prevent a delivery to the buyer.
--Redelivery necessary according to directions of seller.
--If goods are covered by negotiable document of title carrier or bailee has no obligation to
deliver to seller unless document is cancelled.
1. Where Goods not covered by negotiable document of title.—Seller can give no larger right than
he has. Also with a buyer who sold goods to another.
2. Where Goods covered by negotiable document of title—Seller’s lien cannot prevail against the
rights of a purchaser for value in GF to whom the document is indorsed.
Article 1536—Right to Withhold delivery of thing sold by the vendor in case the vendee lose the
right to make use of the term, as provided in Art. 1198: (IFIVA)
1. When after the obligation has been contracted vendee becomes insolvent, unless he
gives a guaranty or security for the price
2. When he does not furnish to the vendor the guaranties or securities which he has
promised
3. When by his own acts he has impaired said guaranties or securities after their
establishment, and when through fortuitous event they disappear, unless he immediately gives
new ones equally satisfactory
4. When the vendee violates any undertaking, in consideration of which the vendor agreed
to the period
5. When the vendee attempts to abscond
Article 1537—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 pertain to vendee from
the day on which the contract was perfected.
6. If it is improved at the expense of the seller, he shall have no other right than that granted
to the usufructuary
Article 1539—What delivery includes? It includes the placing in the control of the vendee all that
is stated in the contract in conformity with the following rules:
a. Sale OF REAL ESTATE by unit of measure or number: The vendor must deliver all that
may have been stated in the contract. If it is not possible to deliver all, the vendee may choose
between:
LACKING/SMALLER AREA OR NUMBER
1. Proportional reduction of the price or
2. Rescission of the contract provided the lack in area is at least 1/10 of the area stated
in the contract
The above rules are applicable also in case there is no lack in area but the quality is
not the same as specified in the contract. Rescission shall take place only if inferior
value of the thing sold exceeds 1/10 of the price.
But if the vendee would not have bought the immovable had he known of its smaller
area or inferior quality he may rescind the sale.
The Above Rules (Art. 1539 and 1540 shall be applicable to judicial sales)
Movable or Personal Property: Owner is the one who is in first possession in good faith.
Immovable
1. First to register in good faith
2. No inscription, first to possess in good faith
3. No inscription and no possession in good faith—Person who presents oldest title in good
faith
What is REGISTRATION? It is any entry made in the books of the Registry, including both
registration in its ordinary and strict sense, and cancellation, annotation, and even the marginal
notes. It is the entry which records solemnly and permanently the right of ownership and other
real rights.
Article 1545.
What are the options of a party to a contract of sale subject to a condition, when such
condition was not fulfilled by the other party?
a. Refuse to proceed with the contract OR
b. Waive performance of the condition and proceed with the contract
What if the condition agreed upon is in the nature of a promise that it should happen? Then
the non-fulfillment of such condition is considered a breach of warranty.
Express Warranty—any affirmation of fact or any promise by the seller relating to the thing 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.
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Affirmation of the value of the thing or statement of the seller’s opinion is not warranty,
unless the seller made such affirmation or statement as an expert and it was relied upon
by the buyer.
Implied Warranty—It is inherent in a contract of sale and presumed to exist although nothing
has been mentioned about it.
WARRANTY AGAINST EVICTION—The seller guarantees that he has the right to sell the thing
sold and to transfer ownership to the buyer who shall not be disturbed in his legal and peaceful
possession thereof.
Eviction—A judicial process by virtue of which the vendee is deprived of the ownership of the
whole or part of the thing he purchased by final judgment or by an act imputable to the vendor.
Elements (DVJ-SW)
1. Vendee is deprived in whole or in part of the thing purchased
2. The deprivation is by virtue of a final judgment (1557)
3. The judgment is based on a prior right to the sale or an act imputable to the vendor
4. The vendor was summoned in the suit for eviction at the instance of the vendee (1558)
5. No waiver of warranty by the vendee
Failure of the vendee to appeal does not relieve vendor from responsibility [1549]
If Property is sold for non-payment of taxes due and not made known to the vendee
before the sale, vendor is liable for eviction (1551)
Judgment debtor is responsible for eviction in judicial sales unless otherwise decreed in
judgment (1552)
Any stipulation exempting vendor from responsibility for eviction is void if he acted in
bad faith (1553)
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* Rescission is not a remedy in case of Total eviction because rescission contemplates that the
one demanding it is able to return whatever he has received under the contract. Since the vendee
can no longer restore the subject-matter of the sale to the vendor, rescission cannot be carried
out.
Applicability: A part of the thing sold of such importance was lost because of eviction,
that the vendee would not have bought it w/o said part.
Same rules apply to a case where two or more things are jointly sold for a lump sum or
for separate price for each, when the vendee would not have bought one w/o the other.
Requisites:
1. Immovable sold is encumbered with non-apparent burden or servitude not mentioned in the
agreement
2. Nature of non-apparent servitude or burden is such that it must be presumed that the buyer
would not have acquired it had he been aware thereof.
Requisites: (HIPANN)
1. Defect must be hidden. –it cannot be discovered by an ordinary inspection or
examination.
2. Defect must be important or grave. –a) defect renders the thing sold unfit for the use for
w/c it is intended; b) diminishes its fitness for the use intended, to such an extent that the
vendee would not have acquired if he had been aware thereof or would have given a lower
price for it.
3. Defect must be present at the time of the execution of the sale.
4. Action for rescission or reduction of price must be filed w/in the prescriptive period.
5. No waiver of the warranty against hidden defects.
6. Notice by the vendee to the vendor within a reasonable time.
REDHIBITION--claim against the seller of a product in which the buyer demands a full
refund or a reduction of the purchase price due to a hidden defect that prevents the product
from performing the task for which it was purchased.
Caveat Venditor—“Let the Seller Beware” Vendor is liable eventhough not aware of hidden
defects
Caveat Emptor—“Let the Buyer Beware” Requires the purchaser to be aware of the
supposed title of the vendor and one who buys without checking the vendor’s title takes all the
risks and losses consequent to such failure.
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Loss of Thing Sold w/ Hidden defects through fortuitous event or vendee’s fault (1569)
* Vendee may demand price paid less value of the thing at the time of loss plus damages if
vendor acted in bad faith.
Warranties against hidden defects, merchantability and fitness are applicable to judicial
sales but judgment debtor is not liable for damages, because the latter is only forced to
sell and therefore did not take part in the conduct of the sale and determination of price
which precludes possibility of bad faith (1570)
Prescription of Actions: 6 Months from delivery of thing (1571)
* There is no warranty against hidden defects of animals sold at fairs or at public auctions or of
livestock sold as condemned.(1574) Rationale: Animals are not bought because of their quality or
capacity for work; and in such circumstance defects are clearly known to buyer.
Payment shall be made at the stipulated time and place of delivery. If there is no stipulation
at the time and place of delivery of the thing.
*** The failure of the vendee to pay the price after delivery if ownership had been transferred,
does not cause the ownership to revert back to the seller until and unless the bilateral contract of
sale is first rescinded. [Chua Hoi vs. Kapunan]
Article 1583.
Rules in case of Contract of Sale of goods to be delivered in stated instalments.
Two instances contemplated:
a. Seller makes defective deliveries in one or more instalments—Buyer may reject the
defective portion and accept the good ones
b. Buyer refuses w/o just cause to take delivery or pay one or more instalments—determine
whether breach is material to warrant refusal to proceed with the entire contract of sale. When the
breach is severable the injured party can seek damages or compensation but not to rescind the
whole contract.
Article 1585. Signs or Evidence of Acceptance by the buyer of Goods delivered to him.
(CPR)
a. When he communicates with the seller expressly manifesting his acceptance thereof.
b. When he performs an act in relation to the goods inconsistent with the ownership of the
seller. Examples: (a) continuous possession and use of goods (b) reselling the goods (c)
mortgaging the goods
c. When after the lapse of a reasonable time following the delivery, he retains the goods w/o
complaining to the seller or w/o intimating that he has rejected them.
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Purpose of Notice: To insulate the seller from belated claims of defects and to allow him to
make urgent investigation on the validity of claims.
Article 1588. Effect of Unjustifiable Refusal to accept goods by the buyer: Title or ownership
passes to him from the time goods were placed at his disposal.
Exceptions: a. If there is contrary agreement
b. If the seller reserves ownership as security for payment of the price [1503 &
1523]
Article 1589. When vendee is bound to pay interest (period b/w date of delivery and date of
payment) after delivery:
a. if the parties stipulated
b. if the thing sold and delivered produces fruits or income
c. if the vendee is in default, from the time demand is made upon him either juidicially or
extra-judicially.
Article 1590. When can the vendee suspend payment of the price (total or remaining)?
1. If he is disturbed in his possession or ownership of the thing brought
2. If he has a well-grounded fear that his possession or ownership would be disturbed by a
vindicatory action or foreclosure of mortgage.
Article 1591. Immediate rescission in sale of immovables, if the vendor has reasonable
ground to fear the loss of the immovable.
** Vendor however has the alternative of compelling specific performance if the ground to
fear loss does not exist.
Article 1592. Exception to the general rule on rescission in case of sale of immovables.
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General Rule on Rescission: The court may fix the period of payment when there is just
cause.
Exception: Court is not allowed to grant a new period. Once there is a judicial demand by
notarial act received by the vendee, the court may not grant him a new term. The reason is that
the vendee already enjoyed the advantage of paying beyond the time originally fixed in the
contract, during the time when no demand for rescission either judicially or extra-judicially has
taken place.
Reason why judicial or notarial act not required: Personal things do not generally keep a stable
price in the market, any delay in their disposal may prejudice the vendor.
Article 1594. Actions available to vendor when there is breach of contract of sale on the part of
the vendee: (PDR)
1. Action for payment of the price of the goods [1595]
2. Action for damages due to wrongful neglect and refusal to accept and pay for the goods
[1596]
3. Action for rescission if buyer has repudiated the contract or has manifested his inability to
perform his obligation [1597]
Article 1595. Action for collection of price, available in the following cases: (OPR)
1. When the ownership of the goods has passed to the buyer and he wrongfully neglects or
refuses to pay for the price according to the terms of the contract
2. When the price is payable irrespective of delivery or transfer of title, on a certain day and the
buyer wrongfully neglects or refuses to pay such price.
Defense of Buyer: He may establish the fact that the seller has at anytime before judgment,
manifested his inability not to comply with the contract
3. When the goods cannot readily be resold for a reasonable price and the buyer refuses to
receive the goods when offered for delivery except when 1596 par. 4 is applicable (there is notice
of stopping the contract), with notification that the seller is holding them as bailee for the buyer
Measure of damages:
1. As a rule: estimated loss directly and naturally resulting in the ordinary course of events from
the buyer’s breach (no available market)
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2. When there is available market: “difference” between contract price and market or current price
at the time when the goods ought to have been accepted or if not time has been fixed at the time
of refusal (If there are special circumstances establishing proximate damages of a different
amount than the “difference” described then liability is based on the proximate damages)
Proximate Damages: refer to damages other than unrealized profits
* Repudiation of the contract or notice of stopping the contract, such as in the case of a
sale where goods are to be manufactured. Buyer here shall be liable for the cost of:
1. labor performed
2. expenses for materials used before receiving the notice of repudiation for stoppage
3. unrealized profits
Article 1597. When seller may rescind contract in case there is no delivery yet
1. When buyer repudiated the contract
2. When the buyer has manifested his inability to perform his obligations
3. When the buyer has committed a breach of the contract
Article 1598. Remedy of buyer in Contract to deliver specific goods: Specific Performance
w/o giving the seller option to retain the goods on payment of damages.
Extinguishment of Sales
CONVENTIONAL REDEMPTION.
b. He shall shoulder the expenses of the contract and other legitimate payments made by
the buyer.
c. He shall pay the value of the necessary and useful expenses made on the thing incurred
by the buyer
d. He shall comply with other stipulations agreed upon.
e. He shall return the price of the sale
Equitable Mortgage—one which lacks the proper formalities, form of words or other requisites
prescribed by law for a mortgage, but however shows the intention of the contracting parties to
make the property subject of the contract as security for a debt and contains nothing impossible
or contrary to law.
2. Title remains in the vendor or if the title has already been transferred to the vendee, the same
must be revested into the vendor by a deed of reconveyance.
3. Any money fruits or other benefits received thereafter by the vendee are considered interests
on the loan.
4. If the vendor does not redeem on time the remedy of the vendee is to foreclose the mortgage.
Art. 1603—In case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage.
Rationale: Least transmission of rights.
*Although in conflict with Art. 1378, where it provides that if the contract is onerous, the
doubt shall be settled in favor of the greatest reciprocity of interests, Art. 1603 is the exception.
This is justified by the condemnation of pactum commissorium (which is a stipulation that creditor
automatically becomes owner of a property upon non-payment by the debtor)
Art. 1605—Vendor may ask for reformation of instrument in cases referred to in 1602 & 1604
Art. 1607—Judicial Order is required for the registration of the consolidation of ownership of a
real property in the vendee by failure of the vendor to redeem.
Rationale: To accord the vendor the maximum safeguards for the protection of his legal
rights under the true agreement of the parties.
Art. 1608—The vendor may exercise his right of redemption against every possessor
whose right is derived from the vendee, even if the second contract does not mention of the right
of redemption.
Art. 1610—Creditors of the vendor must exhaust first all the other properties of vendor
before they could exercise the right of redemption against the vendee.
Art. 1611—Applicability.
1. The vendee entered a Pacto de Retro Sale of a part of an undivided immovable.
2. The vendee later acquired the whole of the property.
3. The vendor in the “Pacto de Retro Sale of a part” wishes to exercise his right of redemption
over the part.
If the abovementioned are present the vendee may compel the vendor in the Pacto de Retro Sale
of a part to redeem the whole property.
Rationale: Co-ownership is not favored, because the co-owners are reluctant to make
improvements on the property due to the state of instability in its ownership.
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Art. 1613—In the case referred to in Art. 1612, vendee may demand that all the vendors or
co-heirs come to an agreement upon the repurchase of the whole thing, if they failed to do so
vendee cannot be compelled to accept partial redemption.
Art. 1615—If the vendee dies and property is left to several heirs, the action for redemption
can only be brought to each of them independently with respect to their share, whether or not the
property is still undivided or already partitioned.
Art. 1617—Rule in case there is no agreement on the sharing of the fruits of the property.
1. If there are fruits at the time of the sale and the vendee paid them, he shall be reimbursed
by the vendor.
2. Where there are no fruits at the time of the sale but there are existing at the time of
redemption, the vendee shall be entitled to the fruits gathered for one year reckoned from the last
anniversary of the date of the effectivity of the contract of sale.
Art. 1618—The vendor who recovers the thing shall receive it free from all charges or
mortgages constituted by the vendee, but shall respect the lease contract constituted on the
property in good faith and in accordance with the customs of the place.
Art. 1620—A co-owner of a thing may exercise the right of redemption when the shares of all the
other co-owners or any of them are sold to a 3rd person. If the price of alienation is grossly
excessive, redemptioner shall pay only a reasonable price.
--If two or more co-owners desire to exercise right of redemption they may only do so in
proportion to their share.
If two or more adjoining owners desire to exercise the right of redemption at the same time, the
one with a smaller area shall be preferred. If both have same area, the one who first requested.
Art. 1622—Applicability: Piece of Urban Land which is so small and so situated that a major
portion cannot be used for any practical purpose w/in a reasonable time, having bought merely
for speculation and is about to resold.
*Speculation—means buying or selling with expectation of profiting by a rise and fall in price.
Pre-emption Redemption
Arises before sale Arises after sale
No Rescission because no sale as yet exists There can be rescission of the original sale
The action is directed against the prospective Action is directed against the buyer
seller
* Preference when two or more owners of adjoining lands wish to exercise the right of
redemption or pre-emption: To the owner whose intended use is best justified.
Nature of Assignment of Credits and other incorporeal rights: Has all the elements of a contract
of sale: (1) consent (2) Object which is the credit, right , action assigned and (3) consideration
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which is the price paid for the assignment, or liberality of the assignor if the assignment is
gratuitous.
Consent of debtor is not necessary for the assignment. He is therefore released from
the obligation if he pays the creditor before having knowledge of the assignment (1626)
Scope of Assignment: All accessory rights, such as guaranty, mortgage, pledge or
preference (1627)
Art. 1629 Duration of the Liability of the Assignor in Good Faith (in case there is no
agreement)
1. One year from the date of the assignment of the credit if the period of payment of the credit has
already expired
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2. One year after maturity of the credit if the period of payment has not yet expired
Sale of Hereditary Rights—presumes the existence of a contract or deed of sale between the
parties
Waiver of Hereditary Rights—a mode of extinction of ownership, where there is intentional
relinquishment of a known right with knowledge of its existence and intention to relinquish it in
favor of other persons who are co-heirs in the succession
Art. 1632—If vendor profited from the fruits or received anything from the inheritance sold he
must restore it by paying the vendee, unless there is a contrary stipulation.
Art. 1633—Charges and debts on the estate paid by the vendor must be reimbursed by the
vendee, unless there is a contrary stipulation.
When is credit or right in litigation? From the time the complaint concerning the same is
answered.
Prescriptive Period: 30 days from the date the assignee demands payment from debtor