Sharon F.

Gonzales
LAW ON SALES
 Chapter 1
NATURE AND FORM OF THE CONTRACT

 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
therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional. (1445a)

 *It is an agreement between two parties whereby one,

who is the seller or vendor, obligates himself to deliver
something to the other party who is the buyer or vendee
who is bound to pay a sum of money or its equivalent.
 Characteristics of a contract of sale.
The contract of sale is:
(1)Consensual, because it is perfected by mere consent without any
further act;
(2) Bilateral,1 because both the contracting parties are bound to fulfill
correlative obligations towards each other — the seller, to deliver
and transfer ownership of the thing sold and the buyer, to pay the
price;
(3) Onerous, because the thing sold is conveyed in consideration of
the price and vice versa (see Gaite vs. Fonacier, 2 SCRA 820
[1961].);
(4) Commutative, because the thing sold is considered the equivalent
of the price paid and vice versa. (see Ibid.) However, the contract
may be aleatory 2 as in the case of the sale of a hope (e.g.,
sweepstakes ticket);
(5) Nominate, because it is given a special name or designation in the
Civil Code, namely, “sale”; and
(6) Principal, because it does not depend for its existence and validity
upon another contract,unlike guarnty,pledge, and mortgage.
 ILLUSTRATIVE CASES:
1. Trial Court decided that there was no payment by buyer of lumber covered by invoices of
seller but Court of Appeals held that delivery of lumber was not duly proved because counter-
receipts issued by buyer merely certified to receipt of certain statement on claims for the
lumber allegedly delivered.
Facts: S filed a complaint for collection of a sum of money against B for lumber purchased on
credit and received by B. B denied all the material allegations of the complaint. The trial court
rendered judgment in favor of S. On appeal, the Court of Appeals reversed the judgment on the
ground that the delivery of the lumber to B was not duly proved.
S asserts that the case having been tried and decided by the trial court on the issue of whether or
not there was payment by B of the lumber covered by invoices of S and counter receipts issued
by B, it is alone on this issue that the Court of Appeals should have decided the case and not on
the issue of whether or not there was delivery of the lumber in question. The Court of Appeals
found that the counter-receipts merely certified the fact of having received from S certain
statements on claims for lumber allegedly delivered.
Issue: Did the Court of Appeals decide the case on a new issue not raised in the pleadings before
the lower court?
Held: No. The issue of delivery is no issue at all. For delivery and payment in a contract of sale, or
for that matter in quasi contracts, are so interrelated and interwined with each other that without
delivery of the goods there is no corresponding obligation to pay. The two complement each
other. (see Art. 1458, par. 1.) It is clear that the two elements cannot be dissociated, for the
contract of purchase and sale is, essentially, a bilateral contract, as it gives rise to reciprocal
obligations. (Pio Barretto Sons, Inc. vs. Compania Maritima, 62 SCRA 167 [1975].)
 2. To secure payment of the balance of the purchase price of iron ore, buyer executed a
surety bond in favor of seller, the buyer, however, claiming that such payment was subject
to a suspensive condition — the sale of the iron ore by buyer.
Facts: B, owner of a mining claim, appointed S as attorney in-fact to enter into a contract
with any individual or juridical person for the exploration and development of said claim on a
royalty basis. S himself embarked upon the exploitation of the claim.
Subsequently, B revoked the authority granted by him to S who assented thereto subject to
certain conditions. As a result, a document was executed wherein S transferred to B all of S’s
rights and interests over the “24 tons of iron ore, more or less” that S had already extracted
from the mineral claims in consideration of the sum of P75,000.00, P10,000.00 of which was
paid upon the signing of the agreement, and “the balance of P65,000.00 will be paid from
and out of the first letter of credit covering the first shipment of iron ores and of the first
amount derived from the local sale of iron ore” from said claims.
To secure the payment of the balance, B executed in favor of S a surety bond. No sale of
approximately 24,000 tons of iron ore had been made nor had the balance of P65,000.00
been paid to S.
Issue: Is the shipment or local sale of the iron ore a condition precedent (or suspensive
condition) to the payment of the balance, or only a suspensive period or term?
Held: (1) Obligation of B one with a term. — The words of the contract express no
contingency in the buyer’s obligation to pay. There is no uncertainty that the payment will
have to be made sooner or later; what is undetermined is merely the exact date at which it
will be made. By the very terms of the contract, therefore, the existence of the obligation to
pay is recognized; only its maturity or demandability is deferred.
Furthermore, to subordinate B’s obligation to the sale or shipment of the ore as a condition
precedent would be tantamount to leaving the payment at his discretion (Art. 1182.), for the
sale or shipment could not be made unless he took steps to sell the ore.
 (2) A contract of sale is normally commutative and onerous.
— In a contract of sale, not only does each one of the parties
assume a correlative obligation, but each party anticipates
performance by the other from the very start.
 Nothing is found in the record to evidence that S desired or
assumed to run the risk of losing his right over the ore without
getting paid for it, or that B understood that S assumed any
such risk. This is proved by the fact that S insisted on a bond to
guarantee the payment of the P65,000.00 and the fact that B
did put such bond, indicated that he admitted the definite
existence of his obligation to pay the balance of P65,000.00.
The only rational view that can be taken is that the sale of the
ore to B was a sale on credit, and not an aleatory contract,
where the transferor, S, would assume the risk of not being
paid at all by B. (Gaite vs. Fonacier, 2 SCRA 830 [1961].)
 Essential requisites of a contract of sale.
The rules of law governing contracts in general are applicable to
sales. Like every contract, “sale” has the following requisites or
elements:
(1) Consent or meeting of the minds. — This refers to the consent
on the part of the seller to transfer and deliver and on the part of
the buyer to pay. (see Art. 1475.) The parties must have legal
capacity to give consent and to obligate themselves. (Arts. 1489,
1490, 1491.) The essence of consent is the conformity of the parties
on the terms of the contract, the acceptance by one of the offer
made by the other. The contract to sell is a bilateral contract.
Where there is merely an offer by one party without the
acceptance of the other, there is no consent. (Salonga vs.
Farrales, 105 SCRA 359 [1981].) The acceptance of payment by a
party is an indication of his consent to a contract of sale, thereby
precluding him from rejecting its binding effect. (Clarin vs. Rulova,
127 SCRA 512 [1984].)
 There may, however, be a sale against the will of the owner in case of
expropriation(force sale) (see Art. 1488.) and the three different kinds of
sale under the law, namely: an ordinary execution sale (see Rules of Court,
Rule 39, Sec. 15.), judicial foreclosure sale (Ibid., Rule 68.), and extra-
judicial foreclosure sale. (Act No. 3135, as amended.) A different set of law
applies to each class of sale mentioned. (see Fiestan vs. Court of Appeals,
185 SCRA 751 [1990].)
 The sale of conjugal property requires the consent of both the husband
and the wife. The absence of the consent of one renders the sale null and
void (see Art. 124, Family Code.) while the vitiation thereof (see Art. 1390.)
makes it merely voidable. (Guiang vs. Court of Appeals, 95 SCAD 264, 290
SCRA 372 [1998].)
(2) Object or subject matter. — This refers to the determinate thing which is the object
of the contract. (Art. 1460.) The thing must be determinate or at least capable of
being made determinate because if the seller and the buyer differ in regard to the
thing sold, there is no meeting of the minds; therefore, there is no sale. The subject
matter may be personal or real property. The terms used in the law are “thing” (e.g.,
Art. 1458), “article” (Art. 1467), “goods” (e.g., Art. 1462), “personal property” (e.g.,
Art. 1484), “property” (e.g., Art. 1490), “movable property” (e.g., Art. 1498), “real
estate” (e.g., Art. 1539), “immovable” (e.g., Ibid.), “immovable property” (e.g., Art.
1544), and “real property.” (Art. 1607.)
A buyer can only claim right of ownership over the object of the deed of sale and
nothing else. Where the parcel of land described in the transfer certificate of title is
not in its entirety the parcel sold, the court may decree that the certificate of title
be cancelled and a correct one be issued in favor of the buyer, without having to
require the seller to execute in favor of the buyer an instrument to effect the sale
and transfer of the property to the true owner. (Veterans Federation of the
Philippines vs. Court of Appeals, 138 SCAD 50, 345 SCRA 348 [2000].)
(3) Cause or consideration. — This refers to the “price certain in money or its
equivalent” (Art. 1458.) such as a check or a promissory note, which is the
consideration for the thing sold. It does not include goods or merchandise
although they have their own value in money. (see Arts. 1468, 1638.) However, the
words “its equivalent” have been interpreted to mean that payment need not be
in money, so that there can be a sale where the thing given as token of payment
has “been assessed and evaluated and [its] price equivalent in terms of money
[has] been determined.” (see Republic vs. Phil. Resources Dev. Corp., 102 Phil. 968
[1958].)
The price must be real, not fictitious; otherwise, the sale is void although the
transaction may be shown to have been in reality a donation or some other
contract. (Art. 1471.) A seller cannot render invalid a perfected contract of sale by
merely contradicting the buyer’s allegation regarding the price and subsequently
raising the lack of agreement as to the price. (David vs. Tiongson, 111 SCAD 242,
313 SCRA 63 [1999].)
The absence of any of the above essential elements negates the existence of a
perfected contract of sale.3 Sale, being a consensual contract (see Art. 1475.), he
who alleges it must show its existence by competent proof. (Dizon vs. Court of
Appeals, 302 SCRA 288 [1999].)
 Natural and accidental elements.
The above are the essential elements of a contract of sale or
those without which no sale can validly exist. They are to be
distinguished from:
(1) Natural elements or those which are deemed to exist in
certain contracts, in the absence of any contrary
stipulations, like warranty against eviction (Art. 1548.) or
hidden defects (Art. 1561.); and
(2) Accidental elements or those which may be present or
absent depending on the stipulations of the parties, like
conditions, interest, penalty, time or place of payment, etc.
 ILLUSTRATIVE CASES:
1. Supposed sale was evidenced by a receipt acknowledging receipt of
P1,000.00.
Facts: B bought on a partial payment of P1,000.00, evidenced by a receipt, a
portion of a subdivision from S, administrator of the testate estate of his
deceased spouse. Subsequently, S was authorized by the court to sell the
subdivision. In the meantime, PT Co. became the new administrator. It sold
the lot to another which sale was judicially approved.
B files a complaint which seeks, among other things, for the quieting of title
over the lot in question.
Issue: Was there a valid and enforceable sale to B?
Held: No. An examination of the receipt reveals that the same can neither be
regarded as a contract of sale nor a promise to sell. There was merely an
acknowledgment of the sum P1,000.00. There was no agreement as to the
total purchase price of the land nor to the monthly installments to be paid
by B. The requisites for a valid contract of sale are lacking. (Leabres vs. Court
of Appeals, 146 SCRA 158 [1986].)
 TWO KINDS OF CONTRACT TO SALE

As to presence or absence of condition, a sale maybe either;

Absolute sale is a sale in which property passes to a buyer upon
completion of an agreement or bargain between the parties. An
absolute sale takes place without conditions. The title is transferred
by the seller to the buyer without any restrictions other than
payment of an agreed-upon amount of money.

Conditional - This refers to a contract of sale that contemplates

contingency, or is subject to a condition. It follows then that the
delivery of the determinate thing does not necessarily transfer
ownership, unless the contingency or condition is fulfilled.
 ART. 1459. The thing must be licit and the vendor must
have a right to transfer the ownership thereof at the time
it is delivered. (n)
 Requisites concerning objects.
1. Things- aside from being (a.)determinate ( Art.
1458,1460),the law requires that the subject matter must
be (b) licit or lawful, that is, it should not be in the
contrary to law, morals, good customs, public order and
should (c) not be impossible.(Art.1348).
In other words, like any other object of a contract ,the
thing must be within the commerce on men. If the
subject matter of the sale is illicit, the contract is void
and ,therefore be ratified.
(2) Rights- all rights which are not intransmissible or personal or
personal may also be the object of sale.( Art 1347),like the right
of usufract (Art 572), the right of conventional redemption (Art.
1601) ,etc. however , the services maybe the object of a
contract.( Art. 1347 par. 3)they cannot be the object of a
contract of sale. (art. 1458,see Art. 1467)
Example of rights which are intransmissible by law are the right to
vote, the right to public office ,marital and parental rights, etc.
Example of rights which are personal in character are the right
to be a partner in a partnership(Art. 1767.), the right to act as
an agent of another. (Art. 1868.), the right of the bailee to use
the loaned in a contract of commondatum. )Art.1933,1939.)
 Kinds of illicit things.
The thing may be illicit per se (of its nature) or per accidens
(because of some provisions of law declaring it illegal).
Article 1459 refers to both. Decayed food unfit for
consumption is illicit per se, while lottery tickets (Art. 195,
Revised Penal Code.) are illicit per accidens. Land sold to
an alien is also per accidens because the sale is
prohibited by the Constitution.7
The rule is well-settled that the mortgagor (or pledgor)
continues to be the owner of the property mortgaged,
and, therefore, has the power to alienate the same;
however, he is obliged, under pain of penal liability, to
secure the consent of the mortgagee. (Service Specialist,
Inc. vs. Intermediate Appellate Court, 174 SCRA 80 [1989].)
 Right to transfer ownership.

(1) Seller must be owner or authorized by owner of thing sold. — It is essential in

order for a sale to be valid that the vendor must be able to transfer
ownership (Art. 1458.) and, therefore, he must be the owner or at least
must be authorized by the owner of the thing sold. This rule is in accord
with a well-known principle of law that no body can dispose of that which
he does not have. (Azcona vs. Reyes & Larracas, 59 Phil. 446; see Art. 1505)
Thus, a sale of paraphernal (separate) property of the deceased wife by the
husband who was neither an owner nor administrator of the property at
the time of sale is void ab initio. Such being the case, the sale cannot be
the subject of ratification by the administrator or the probate court.
(Manotok Realty, Inc. vs. Court of Appeals, 149 SCRA 372 [1987].) Only so
much of the share of the vendor-co-owner can be validly acquired by the
vendee even if he acted in good faith in buying the shares of the other co-
owners. (Segura vs. Segura, 165 SCRA 368 [1988].) Where the sale from one
person to another was fictitious as there was no consideration, and,
therefore, void and inexistent, the latter has no title to convey to third
persons. (Traders Royal Bank vs. Court of Appeals, 80 SCAD 12, 269 SCRA 15
[1997].)
 (2) Right must exist at time of delivery. — Article 1459, however,
does not require that the vendor must have the right to transfer
ownership of the property sold at the time of the perfection of
the contract. It is sufficient if he has the right to sell the thing at
the time when the ownership is to pass. (Art. 1547)
The reason for the rule is obvious. Since future goods (Arts. 1461,
par. 1; 1462 par. 1.) or goods whose acquisition by the seller
depends upon a contingency (Art. 1462, par. 2.) may be the
subject matter of sale, it would be inconsistent for the article to
require that the thing sold must be owned by the seller at the
time of the sale inasmuch as it is not possible for a person to own
a thing or right not in existence. An agreement providing for the
sale of property yet to be adjudicated by a court is thus valid
and binding. (Republic vs. Lichauco, 46 SCRA 305 [1972].)
 ART. 1460. A thing is determinate when it is particularly
designated or physically 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. (n)
 Subject matter must be determinate.
(1) When thing determinate. —
A thing is determinate or specific (not
generic) when it is particularly designated or physically
segregated from all others of the same class. (see Art. 1636[1].)
This requisite that the object of a contract of sale must be
determinate is in accordance with the general rule that the
object of every contract must be determinate as to its kind. (Art.
1349.)
A determinate thing is identified by its individuality, e.g., my car (if I
have only one); the watch I am wearing; the house located at
the corner of Rizal and Del Pilar Streets, etc.;
(2) Sufficient if subject matter capable of being made determinate.
— It is not necessary that the thing sold must be in sight at the time the
contract is entered into. It is sufficient that the thing is determinable or
capable of being made determinate without the necessity of a new or
further agreement between the parties (Art. 460, par. 2; see Melliza vs.
City of Iloilo, 23 SCRA 477 [1968].) to ascertain its identity, quantity, or
quality. The fact that such an agreement is still necessary constitutes an
obstacle to the existence of the contract (Art. 1349.) and renders it void.
(Art. 1409[3].)
Thus, a person may validly sell all the cavans of rice in a particular bodega
or a parcel of land located at a particular street but if the bodega is not
specified and the seller has more than one bodega or owns more than
one parcel of land at the particular street, and it cannot be known
what may have been sold, the contract shall be null and void. (Arts.
1378, par. 2; 1409[6].) Similarly, an obligation by a person to sell one of
his cars is limited to the cars owned by him. The subject matter is
determinable; it becomes determinate the moment it is delivered.
Illustrative cases:
(1)A quantity of hemp delivered by the vendor into warehouse of the
vendee and thus set apart and distinguished from all other hemp
was sold although the purchase price which had been agreed
upon, had not yet been paid. (see Tan Leoncho vs. Go Inqui, 8 Phil.
531)
(2)A contract whereby a party obligates himself to sell for a price
certain (P3000) a specified quantity of sugar (600 piculs ) of given
quantity (of The first grade and second grade) without designating
a particular lot of sugar, is not perfected until the quantity agreed
upon has been selected and is capable of being physically
designated and distinguished from all sugar. (Yu Tek & Co. vs.
Gonzales , 29 Phil. 348)
In such sale ,the contract is merely an executory contract to sell. its
subject matter being a generic or indeterminate thing. A thing is
generic when it is indicated only by its kind and cannot be pointed
out with particularity.
 ART. 1461. Things having a potential existence may be
the object of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is
deemed subject to the condition that the thing will
come into existence.
The sale of a vain hope or expectancy is void. (n)
 Sale of things having potential existence.
Even a future thing (Arts. 1461, par. 1; 1347, par. 1.) not existing at the
time the contract is entered into may be the object of sale provided
it has a potential or possible existence, that is, it is reasonably certain
to come into existence as the natural increment or usual incident of
something in existence already belonging to the seller, and the title
will vest in the buyer the moment the thing comes into existence.
Thus, a valid sale may be made of “the wine a vine is expected to
produce; or the grain a field may grow in a given time; or the milk a
cow may yield during the coming year; or the wool that shall
thereafter grow upon a sheep; or what may be taken at the next
cast of a fisherman’s net; or the goodwill of a trade, or the like. The
thing sold, however, must be specific and identified. They must be
also owned by the vendor at the time.” (Sibal vs. Valdez, 50 Phil. 522
[1927]; Pichel vs. Alonzo, 111 SCRA 341 [1982]; see 46 Am. Jur. 223.)
 Sale of a mere hope or expectancy
The efficacy of the sale of a mere hope or expectancy is deemed
subject to the condition that the thing contemplated or expected
will come into existence. (par. 2.)
The sale really refers to an “expected thing” which is not yet in
existence, and not to the hope or expectancy which already exists,
in view of the condition that the thing will come into existence. But
the sale of a mere hope or expectancy is valid even if the thing
hoped or expected does not come into existence, unless the hope
or expectancy is vain in which case, the sale is void.
A plan whereby prizes can be obtained without any additional
consideration (when a product is purchased at the usual price plus
the chance of winning a prize) is not a lottery. (Phil. Refining Co. vs.
Palomar, 148 SCRA 313 [1987].)
 EXAMPLES:
(1) S binds himself to sell for a specified price to B a parcel of
land if he wins a case for the recovery of said land pending
in the Supreme Court. Here, the obligation of S to sell will
arise, if the “expected thing,’’ the land, will come into
existence, i.e., if he wins the case. Before a decision is
rendered, there is only “the mere hope or expectancy’’
that the thing will come into existence.
(2) B buy a sweepstakes ticket in the hope of winning a prize..
Here, the object of the contract is the hope itself. The sale
is the condition that the hope will fulfilled .
 ART. 1462. The goods which form the subject of a
contract of sale may be either existing goods, owned or
possessed by the seller, or goods to be manufactured,
raised, or acquired by the seller after the perfection of
the contract of sale, in this Title called “future goods.”
There may be a contract of sale of goods, whose
acquisition by the seller depends upon a contingency
which may or may not happen. (n)
 Goods which may be the object of sale.
Goods which form the subject of a contract of sale may be
either:
(1) Existing goods or goods owned or possessed by the seller;
Or
(2) Future goods or goods to be manufactured (like the sale of
milk bottles to be manufactured with the name of the buyer
pressed in the glass), raised (like the sale of the future
harvest of palay from a ricefield), or acquired (like the sale
of a definite parcel of land the seller expects to buy).8 (Art.
1460.)
 Future goods as object of sale
A sale of future goods, even though the contract is in the form of a present sale, is valid
only as an executory contract to be fulfilled by the acquisition and delivery of the
goods specified.
In other words, “property or goods which at the time of the sale are not owned by the
seller but which thereafter are to be acquired by him, cannot be the subject of an
executed sale but may be the subject of a contract for the future sale and delivery
thereof,” even though the acquisition of the goods depends upon a contingency
which may or may not happen. In such case, the vendor assumes the risk of
acquiring the title and making the conveyance, or responding in damages for the
vendee’s loss of his bargain. (Martin vs. Reyes, 91 Phil. 666 [1952]; 77 C.J.S. 604.)
Article 1462 contemplates a contract of sale of specific goods where one of the
contracting parties binds himself to transfer the ownership of and deliver a
determinate thing and the other to pay therefor a price certain in money or its
equivalent. The said article requires that there be delivery of goods, actual or
constructive, to be applicable. It does not apply to a transaction where there was
no such delivery; neither was there any intention to deliver a determinate thing.
Thus, a “futures” contract where the parties merely speculate on the rise and fall on
the price of the goods subject matter of the transaction is a form of gambling was
declared null and void by Article 2018 of the Civil Code. (see note 2.)
 ART. 1463. The sole owner of a thing may sell an
undivided interest therein. (n)
 Sale of undivided interest in a thing.
(1)By sale owner- Article 1463 covers only the sale by a sole
owner of a thing of an undivided share or interest thereof.
The sole owner of a thing may sell the entire thing; or only a
specific portion thereof; or an undivided interest therein and
such interest may be designated as an aliquot part of the
whole.
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. As co-owner,
the buyer acquires full ownership of his part and he may,
therefore, sell it. Such sale is, of course, limited to the portion
which may be allotted to him in the division of the thing upon
the termination of the co-ownership. (Article 493.)
(2) By co-owner (e.g., co-heir) of a thing being the owner of his
undivided interest therein, can dispose of his share even without the
consent of the other c0-owner/s. The effect of the alienation shall
be limited to the portion which maybe allotted to the vendor in the
division of the property upon termination of the co ownership.
EXAMPLE: S is the owner of a parcel of land with an area of 1,000
square meters. As the sole owner, S can sell to B the entire portion; or
only 500 square meters of the land by metes and bounds in which
case he becomes the sole owner of the remaining 500 meters and B
the portion sold; or he may sell an undivided half of the land without
specially designating or identifying the portion sold, in which case
they become co-owners.
As a co-owner, S or B can convey or transfer only the title pertaining to
the undivided half of the land, for vital to the validity of a contract of
sale is that the vendor be the owner of the thing sold. (Art. 1459.)
 ART. 1464. In the case of fungible goods, there may be a sale
of an undivided share of a specific mass, though the seller
purports to sell and the buyer to buy a definite number, weight
or measure of the goods in the mass, and though the number,
weight or measure of the goods in the mass is undetermined.
By such a sale the buyer becomes owner in common of such
a share of the mass as the number, weight or measure bought
bears to the number, weight or measure of the mass. If the
mass contains less than the number, weight or measure
bought, the buyer becomes the owner of the whole mass and
the seller is bound to make good the deficiency from goods of
the same kind and quality, unless a contrary intent appears.
(n)
 Sale of an undivided share of a specific mass
(1)Meaning of fungible goods. — It means goods of which any unit is,
from its nature or by mercantile usage, treated as the equivalent of
any other unit (Uniform Sales Act, Sec. 76.), such as grain, oil, wine,
gasoline, etc.
(2)Effect of sale. — The owner of a mass of goods may sell only an
undivided share thereof, provided the mass is specific or capable of
being made determinate. (Art. 1460.)
(a) By such sale, the buyer becomes a co-owner with the seller of the
whole mass in the proportion in which the definite share bought bears
to the mass.
(b) It must follow that the aliquot share of each owner can be
determined only by the measurement of the entire mass. If later on it
be discovered that the mass of fungible goods contains less than
what was sold, the buyer becomes the owner of the whole mass and
furthermore, the seller shall supply whatever is lacking from goods of
the same kind and quality, subject to any stipulation to the contrary.
(3) Risk of loss. — If the buyer becomes a co-owner, with
the seller, or other owners of the remainder of the mass,
it follows that the whole mass is at the risk of all the
parties interested in it, in proportion to their various
holdings
(4) Subject matter. — Take note that in the sale of an
undivided share, either of a thing (Art. 1463.) or of that of
mass of goods (Art. 1464.), the subject matter is an
incorporeal right. (Art. 1501.) Here, ownership passes to
the buyer by the intention of the parties.
EXAMPLE:
 S owns 1,000 cavans of palay stored in his warehouse. If S sells
to B 250 cavans of such palay which cavans are not
segregated from the whole mass, B becomes a co-owner of
the said mass to the extent of 1/4. If the warehouse happens
to contain only 200 cavans, S must deliver the whole 200
cavans and supply the deficiency of 50 cavans of palay of
the same kind and quality.
In the same example, the number of cavans in the warehouse
may be unknown or undetermined and S may sell only 1/4
share of the contents. The legal effect of such a sale is to
make B a co-owner in that proportion. It is obvious that in such
case, the obligation of the seller “to make good the
deficiency” will not arise.