SALES

SALE A nominate contract whereby 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. Sale
1. 1itle passes upon delivery of the thing sold . %on2payment of the price is a negative resolutory condition and the remedy of the seller is to e&act fulfilment or to rescind the contract

Sell
1. 0wnership is reserved in the seller and is not to pass until full payment of the purchase price . 3ull payment is a positive suspensive condition, the failure of which is not a breach casual or serious but simply prevents the obligation of the vendor to convey title from having binding force #. 1itle remains in the vendor if the vendee does not comply with the condition of ma5ing payment at the time specified in the contract

Elements:

a. Essential elements those without which, there can be no valid sale: 1. Consent or meeting of minds . A !eterminable sub"ect matter #. $rice certain in money or its equivalent b. %atural elements inherent in the contract, and which in the absence of any contrary provision, are deemed to e&ist in the contract: 1. 'arranty against eviction . 'arranty against hidden defects c. Accidental elements may be present or absent depending on the stipulation of the parties

#. 4endor loses and cannot recover ownership of the thing sold and delivered until the contract of sale is resolved and set aside

Conditional 6ale

Contract to 6ell

Characteristics:
1. . #. *. +.

$rincipal Consensual( )ilateral( %ominate( Commutative( ,n some cases, aleatory -emptio spei.( /. 0nerous.

Contract to sell e&clusive right and privilege to purchase an ob"ect. a bilateral contract whereby the prospective seller, while e&pressly reserving the ownership of the sub"ect property despite delivery thereof to the prospective buyer binds himself to sell the said property e&clusively to the prospective buyer upon fulfilment of the condition agreed upon, that is, full payment of the purchase price.

As to reservation of title to the subject property ,n both cases the seller may reserve the title to the sub"ect property until fulfillment of the suspensive condition i.e. full payment of the price As to effect of fulfillment of suspensive condition 1. 7pon fulfillment of 1. 7pon fulfillment of the suspensive the suspensive condition, the contract of condition, which is the sale is thereby full payment of the perfected, such that if purchase price, there had been previous ownership will not delivery of the sub"ect automatically transfer to property to the buyer, the buyer although the ownership thereto property may have been automatically previously delivered to transfers to the buyer him. 1he prospective by operation of law seller still has to without any further act convey title to the by the seller. prospective buyer by entering into a contract of absolute sale.

OBJECTS OF SALE Contract of Contract to Emptio rei speratae Emptio spei

1. 6ale e&pected

of

thing

. 6ale is sub"ect to the condition that the thing will e&ist( if it does not, there is no contract #. 1he uncertainty is with regard to the quantity and quality of the thing *. 0b"ect is a future thing

1. 6ale of a mere hope or e&pectancy that the thing will come to e&istence . 6ale produces effect even if the thing does not come into e&istence, unless it is a vain hope #. 1he uncertainty is with regard to the e&istence of the thing

. )uyer has to pay the price

#. )uyer, as a general rule, cannot return the ob"ect sold *. 6eller warrants the thing sold

*. 0b"ect is a present thing which is the hope or e&pectancy NOTE: ,n case of doubt the presumption is in favor of emptio rei speratae which is more in 5eeping with the commutative character of the contract Goods which may e O !ects of Sale a. E&isting goods goods owned or possessed by the seller. b. 3uture goods goods to be manufactured, raised or acquired by the seller after the perfection of the contract. NOTES: A sale of future goods is valid only as an e&ecutory contract to be fulfilled by the acquisition and delivery of goods specified. 'hile there can be sale of future property, there can generally be no donation of future property -Article 751 Civil Code. 3uture inheritance cannot be sold. "nstances when the Ci#il Code reco$ni%es sale of thin$s not act&ally or already owned y the seller at the time of the sale: 1. 6ale of a thing having potential e&istence -Article 1461. . 6ale of future goods -Article 1462. #. Contract for the delivery at a certain price of an article which the vendor in the ordinary course of the business manufactures or procures for the general mar5et, whether the same is on hand at the time or not (Article 1*/8.

+. )uyer can deal with the thing sold as he pleases being the owner

his ownership over them . Agent has to account for the proceeds of the sale he may ma5e on the principal9s behalf #. Agent can return the goods in case he is unable to sell the same to a third person *. Agent ma5es no warranty for which he assumes personal liability as long as he acts within his authority and in the name of the seller +. Agent in dealing with the thing received, must act and is bound according to the instructions of the principal Sale 1. 1he thing transferred is one which would have e&isted and would have been the sub"ect of sale to some other person, even if the order had not been given . 1he primary ob"ective of the contract is a sale of the manufactured item( it is a sale of goods even though the item is manufactured by labor furnished by the seller and upon previous order of the customer #. 'ithin the 6tatute of 3rauds

Contract for 'iece of (or) 1. 1he thing transferred is one not in e&istence and which never would have e&isted but for the order of the party desiring to acquire it . 1he services dominate the contract even though there is a sale of goods involved

#. %ot within 6tatute of 3rauds

the

Sale 1. )uyer receives the goods as owner

A$ency to sell 1. Agent receives the goods as goods of the principal who retains

*&les to determine if the contract is one of Sale or 'iece of wor): a. ,f ordered in the ordinary course of business sale

b. ,f manufactured specially for the customer and upon his special order, and not for the mar5et piece of work BA*TE* contract whereby one of the parties binds himself to give one thing in consideration of the other:s promise to give another thing. NOTE: 1he only point difference between contract of sale and barter is in the element which is present in sale but not in barter, namely: price certain in money or its equivalent NOTE: ,f the consideration is partly in money and partly in another thing, determine: a. 1he manifest intention of the parties b. ,f the intent is not clear, apply the following rules: 1. ,f the thing is more valuable than money barter . ,f the money and the thing are of equal value sale #. ,f the thing is less valuable than money sale Sale 1. %o pre2e&isting credit . ;ives rise to obligations #. Consideration on the part of the seller is the price( on the part of the buyer is the acquisition of the ob"ect *. ;reater freedom in determining the price +ation in 'ayment 1. $re2e&isting credit . E&tinguishes obligations #. Consideration of the debtor is the e&tinguishment of the debt( on the part of the creditor, it is the acquisition of the ob"ect offered in lieu of the original credit *. <ess 3reedom in determining the price

*. $aid in money or its equivalent Certainty ,t is not necessary that the certainty of the price be actual or determined at the time of the e&ecution of the contract. 1he price is certain in the following cases: 1. ,f the parties have fi&ed or agreed upon a definite amount( NOTE: 1he fi&ing of the price can never be left to the discretion of one of the contracting parties. >owever if the price fi&ed by one of the parties is accepted by the other, the sale is perfected. . ,f it may be determined with reference to another certain thing or to a certain fact( #. ,f the determination of the price is left to the "udgment of a specified person or persons even before such determination Effect when the price is fi-ed y the third person desi$nated: GE E!A" !#"E$ $rice fi&ed by a third person designated by the parties is binding upon them. E%CE&'() *$ 1. 'hen the third person acts in bad faith or by mista5e . 'hen the third person disregards the specific instructions or the procedure mar5ed out by the parties Effect when the price is not fi-ed y the third person desi$nated: 1. ,f the third person refuses or cannot fi& the price, the contract shall become ineffective, unless the parties subsequently agree upon the price . ,f the third person is prevented from fi&ing the price by the fault of the seller or buyer, the party not in fault may obtain redress against the party in fault Effect of Gross "nade,&acy of 'rice: ./ 0ol&ntary sales GE E!A" !#"E$ ?ere inadequacy of the price does not affect validity of the sale.

'*"CE 1he sum stipulated as the equivalent of the thing sold and also every incident ta5en into consideration for the fi&ing of the price, put to the debit of the vendee and agreed to by him.

*e,&isites:

1. Certainty or ascertainable at the time of perfection . =eal, not fictitious #. ,n some cases, must not be grossly inferior to the value of the thing sold.

E%CE&'() *$ a. 'here low price indicates vice of consent, sale may be annulled(

b. 'here the price is so low as to be @shoc5ing to conscienceA, sale may be set aside. 1/ "n#ol&ntary sales GE E!A" !#"E$ ?ere inadequacy of the price is not a sufficient ground for the cancellation of the sale. E%CE&'() *$ a. 'here the price is so low as to be shoc5ing to the moral conscience, "udicial sale personal property will be set aside b. ,n the event of a resale, a better price can be obtained NOTE: 1he validity of the sale is not necessarily affected where the law gives to the owner the right to redeem, upon the theory that the lesser the price, the easier it is for the owner to effect redemption. Effect where price is sim&lated 1+ (, it is sho-n to have .een in reality a donation or some other act or contract 1he sale is void but the act or contract shall be valid as such 2+ (, not 1he contract is void and ine&istent Effect of Fail&re to determine price: 1+ /here contract e0ecutory 1he contract is inefficacious 2+ /here the thing has .een delivered to and appropriated .y the .uyer 1he buyer must pay a reasonable price therefore 'E*FECT"ON OF SALE GE E!A" !#"E$ ,t is perfected at the moment there is meeting of the minds upon a determinate thing -ob"ect., and a certain price -consideration., even if neither is delivered. NOTE: 6ale is a consensual contract( >ence, delivery and payment are not essential for its perfection E%CE&'() $ 'hen the sale is sub"ect to a suspensive condition by virtue of law or stipulation. *e,&irements for perfection a. When parties are face to face 'hen an offer is accepted conditions or qualifications

NOTES: A conditional acceptance is a counter2 offer when negotiated thru phone it is as if it is negotiated face to face b. When contract is thru correspondence or thru telegram 'hen the offeror receives or has 5nowledge of the acceptance by the offeree NOTE: ,f the buyer has already accepted but the seller does not 5now yet of the acceptance, the seller may still withdraw c. When a sale is subject to a suspensive condition 3rom the moment the condition is fulfilled T*ANSFE* OF O(NE*S2"' GE E!A" !#"E$ 'hile a contract of sale is consensual, ownership of the thing sold is acquired only upon its delivery, actual or constructive, to the buyer. (1aus v+ *ps+ 1e "eon2 16 3une 24456 E%CE&'() $ 1. Contrary stipulation or Pactum reservati dominii -contractual reservation of title. a stipulation, usually in sales by installment, whereby, despite delivery of the property sold, ownership remains with the seller until full payment of the price is made. 2+ Contract to sell #. Contract o, insurance a perfected contract of sale, even without delivery, vests in the vendee an equitable title, an e&isting interest over the goods sufficient to be the sub"ect of insurance EFFECT OF '*O3"SE T*EATE+ 4N+E* A*T/ .567 Ci#il Code: 1. Accepted &nilateral promise to sell or &y 0nly one ma5es the promise, this promise is accepted by the other. E0ample: A promises to sell to ), ) accepts the promise, but does not in turn promise to buy. does not bind the promissor even if accepted and may be withdrawn anytime. NOTE: $ending notice of its withdrawal, the accepted promise parta5es the nature of an offer to sell which if accepted, results in a perfected contract of sale -*anches vs+ !igos 45*C!A567.. ,n other words, if the acceptance is made before withdrawal, it constitutes a binding contract of sale although the option is given without consideration.

without

 if

the promise is supported by a consideration distinct and separate from the price -option money., its acceptance will give rise to a perfected contract.

0ne party accepts the other9s promise to

. Bilateral promise to &y and sell

buy and the latter, the former9s promise to sell a determinate thing for a price certain it is reciprocally demandable ,t requires no consideration distinct from the selling price NOTE : this is as good as a perfected sale. %o title of dominion is transferred as yet, the parties being given only the right to demand fulfillment or damages.

Policitation An unaccepted unilateral promise to buy or sell. Even if accepted by the other party, it does not bind the promissor and maybe withdrawn anytime. Option contract A contract granting a privilege in one person, for which he has paid a consideration, which gives him the right to buy certain merchandise, at anytime within the agreed period, at a fi&ed price. An option without consideration is void and the effect is the same as if there was no option *i$ht of First *ef&sal ,t is a right of first priority all things and conditions being equal( there should be identity of the terms and conditions to be offered to the optionee and all other prospective buyers, with optionee to en"oy the right of first priority. A deed of sale e&ecuted in favor of a third party who cannot be deemed a purchaser in good faith, and which is in violation of the of the right of first refusal granted to the optionee is %01 voidable under the 6tatute of 3rauds, such contract is valid )71 rescissible under Article 1#BC to 1#B1-#. of the %ew Civil Code -Gu8man 9ocaling : Co+ vs+ 9onnavie; !iviera <ilipina2 (nc vs+ CA et+al+ G! o+ 1175552 April 52 2442.. 1he basis of the right of first refusal must be the current offer to sell of the seller or offer to purchase of any prospective buyer. 0nly after the optionee fails to e&ercise its right of first priority under the same terms and within the period contemplated could the

owner validly offer to sell the property to a third person, again, under the same terms as offered to the optionee - &aranaque =ings Enterprises2 (nc+ vs+ CA G! o+ 1115572 <e.ruary 262 1>>7. 1he lessee9s right of first option to buy the leased property in case of its sale is but a part of the bigger right to lease the said property from the lessor. 1he option was given to the lessee because she was the lessee of the sub"ect property. ,t was a component of the consideration of the lease. 1he option was by no means an independent right which can be e&ercised by the lessee. ,f the lessee is barred by the contract from assigning her right to lease the sub"ect property to any other party, the lessee is similarly barred to assign her first option to buy the leased property to another. -9angayan et+al vs+ CA and "im G! o+1255712 August 2>2 1>>7.

Earnest money partial payment of the purchase price and considered as proof of perfection of the sale( it shall be deducted from the total price Earnest money 1. 1itle passes to the buyer upon delivery of the thing sold Option money 1. 0wnership is reserved to the seller and is not to pass until full payment . ,n case of non2 . ,n case of non2 payment, an action for payment, there can be specific performance action for specific or for rescission can performance be filed by the in"ured party #. $art of the purchase #. ?oney given as a price distinct consideration for an option contract *. 'hen given, the *. 1he would2be buyer buyer is bound to pay is not required to buy the balance +. ;iven when there is +. Applies to a sale not already a sale yet perfected *4LES ON *"S8 OF LOSS AN+ +ETE*"O*AT"ON: a. 1he thing sold is lost before perfection : 6eller bears the loss. b. 1he thing sold is lost at the time of perfection: Contract is void or ine&istent. c. 1he thing sold is lost after perfection, but before delivery:

GE E!A" !#"E$ 'ho bears the ris5 of loss is governed by the stipulations in the contract "n the a sence of any stip&lation: First view: )uyer bears the loss as an e&ception to the rule of res perit domino. E%CE&'() *$ 1. when ob"ect sold consists of fungible goods for a price fi&ed according to weight, number or measure . seller is guilty of fraud, negligence, default or violation of contractual terms #. ob"ect sold is generic -Civil Code o, the &hilippines2 &aras. NOTE: 1his view conforms with ?anresa9s view
ontrary view: 'here the ownership is transferred by delivery, as in our code, the application of the a&iom res perit domino, imposes the ris5 of loss upon the vendor( hence, if the thing is lost by fortuitous event before delivery, the vendor suffers the loss and cannot recover the price from the vendee -Commentaries and 3urisprudence on the Civil Code o, the &hilippines2 'olentino. d. 1he thing is lost after delivery: )uyer bears the loss. EFFECT OF LOSS AT T2E T"3E OF SALE: a. 1hing entirely lost at the time of perfection: Contract is void and ine&istent b. 1hing only partially lost: 4endee may elect between withdrawing from the contract or demanding the remaining part, paying its proportionate price Sale y description A sale where a seller sells things as being of a certain 5ind, buyer merely relying on the seller9s representations or descriptions. 1here is warranty that the thing sold corresponds to the representations or descriptions.

NOTE: 1he mere e&hibition of the sample does not necessarily ma5e it a sale by sample. 1his e&hibition must have been the sole basis or inducement of the sale. 1here is warranty that the bul5 of the commodity will correspond in 5ind, quality, and character with the sample e&hibited.

NOTE : ,n a sale by sample and by description, there is a two2fold warranty. FO*3AL"T"ES OF CONT*ACT OF SALE GE E!A" !#"E$ 6ale is a consensual contract and is perfected by mere consent. E%CE&'() *$ ,n order to be enforceable by action, the following must be in writing: 1. 6ale of personal property at a price not less than $+CC . 6ale of real property or an interest therein #. 6ale of property not to be performed within a year from the date thereof NOTE: 6tatute of 3rauds is applicable only to e&ecutory contracts and not to contracts which are totally or partially performed. CA'AC"T9 TO B49 O* SELL GE E!A" !#"E$ All persons who can bind themselves also have legal capacity to buy and sell. E%CE&'() *$ 1. Absolute incapacity -minors, demented persons, imbeciles, deaf and dumb, prodigals, civil interdictees. 2 party cannot bind themselves in any case. . =elative incapacity incapacity e&ists only with reference to certain persons or a certain class of property *elati#e "ncapacity A/ 2&s and and wife :Art/ .57;< 1he husband and wife cannot sell property to each other e-cept: 1. 'hen a separation of property was agreed upon by the spouses . 'hen there has been a "udicial separation of property under Article 1#* and 1#+ of the 3amily Code B/ "ncapacity y reason of relation to property :Art/ .57.< 1he following persons cannot acquire property by purchase, even at a public auction, either in person or through the mediation of another: :GAE'=JO<

Sale y sample A sale where a small quantity of a commodity is e&hibited by the seller as a fair specimen of the bul5, which is not present and as to which there is no opportunity to inspect or e&amine.

1. the $uardian, with respect to the property of his ward( . agents, with respect to the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given( #. e&ecutor or administrator, with respect to the property of the estate under administration( *. public officers and employees, with respect to the properties of the government, its political subdivisions, or ;0CCs, that are entrusted to them( +. !udges, "ustices, prosecuting attorneys, cler5s of courts, etc., with respect to the property in custogia legis( and /. any other person specially disqualified by law. Effect of #iolation: a. 'ith respect to nos. . to >: the sale is !"#$A%&'+ *eason: only private rights, which are sub"ect to ratification are violated NOTE: ,n the case of &ao vs. (enato, )*+, -A++, the 6upreme Court found that the sale by the administrator of certain properties of the estate in order to settle the e&isting obligations of the estate was made to the administrator?s son ,or a grossly loprice. 3urthermore, the said sale -as not su.mitted to the pro.ate court ,or approval as mandated .y the order authori8ing the administrator to sell . 1he sale was indubitably illegal, irregular and fictitious, and the court9s approval of the assailed compromise agreement violated Article 1*D1 and cannot wor5 to ratify a fictitious contract which is non.e/istent and void from the very beginning b. 'ith respect to nos. 5 to ?: the sale is 01&& A0$ !"#$+ *eason: violation of public policy cannot be sub"ect to ratification

+. $ay for the e&penses of the deed of sale, unless there is stipulation to the contrary +EL"0E*9 %ot only a necessary condition for the en"oyment of the thing, but also the mode of transferring ownership.

8inds:

1. Actual or real placing the thing under the control and possession of the buyer. . <egal or constructive delivery is represented by other signs or acts indicative thereof a. delivery by the e0ecution o, a pu.lic instrument+ NOTE: ;ives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not effected because of a legal impediment ('en <orty !ealty v+ Cru82 14 *ept+ 24456 b. traditio sym.olica 2 to effect delivery, the parties ma5e use of a to5en or symbol to represent the thing delivered c. traditio longa manu seller pointing out to the buyer the things which are transferred, which at the time must be in sight. d. traditio .revi manu buyer simply continues in possession of the thing but under title of ownership. e. traditio constitutum possessorium seller continues in possession but under a different title other than ownership. #. Euasi2tradition delivery of rights, credits or incorporeal property, made by: a. placing titles of ownership in the hands of buyer b. allowing buyer to ma5e use of rights *. 1radition by operation of law Constr&cti#e deli#ery re,&ires three thin$s efore ownership may e transferred: 1. 1he seller must have control over the thing . 1he buyer must be put under control #. 1here must be the intention to deliver the thing for purposes of ownership (hen is the #endor not o&nd to deli#er the thin$ sold: 1. ,f the vendee has not paid him the price . ,f no period for payment has been fi&ed in the contract #. Even if a period for payment has been fi&ed in the contract, if the vendee has lost the right to ma5e use of the same.

OBL"GAT"ONS OF T2E 0EN+O*: 1. 1ransfer ownership . !eliver the thing sold #. 'arrant against eviction and against hidden defects *. 1a5e care of the thing, pending delivery, with proper diligence -Article 1165.

Sale or ret&rn $roperty is sold, but the buyer, who becomes the owner of the property on delivery, has the option to return the same to the seller instead of paying the price. NOTES: ,t is a 5ind of sale with a condition subsequent. 1he buyer must comply with the e&press or implied conditions attached to the return privilege( otherwise, the sale becomes absolute. )uyer, being the owner, bears the ris5 of loss Sale on trial@ appro#al@ or satisfaction A contract in the nature of an option to purchase if the goods prove to be satisfactory, the approval of the buyer being a condition precedent.

a. ,f under the bill of lading, the goods are deliverable to seller or agent or their order( b. ,f the bill of lading, although stating that the goods are to be delivered to the buyer or his agent, is 5ept by the seller or his agent( a. 'hen the buyer, although the goods are deliverable to order of buyer, and although the bill of lading is given to him, does not honor the bill of e&change sent along with it. SALE OF GOO+S B9 A NON=O(NE* GE E!A" !#"E$ )uyer acquires no title even if in good faith and for value under the ma&im 0emo dat 2uid non habet -@Fou cannot give what you do not haveA.. E%CE&'() *$ -6?E=46. 1. 0wner is estopped or precluded by his conduct . 'hen sale is made by the registered owner or apparent owner in accordance with recording or registration laws #. 6ales sanctioned by "udicial or statutory authority *. $urchases in a merchant:s store, fairs or mar5ets +. 'hen a person who is not the owner sells and delivers a thing, subsequently acquires title thereto -Art. 1*#*. /. 'hen the seller has a #oidable title which has not been avoided at the time of the sale -Art. 1+C/. NEGOT"ABLE +OC43ENT OF T"TLE :N+T< A document of title in which it is stated that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document. ?ay be negotiated by delivery or indorsement. The doc&ment is ne$otia le if: 1. 1he goods are deliverable to the bearer( or . ,f the goods are deliverable to the order of a certain person 'ersons who may ne$otiate N+T: 1. 1he owner( or . Any person to whom the possession or custody thereof has been entrusted by the owner, if by the terms of the document the bailee issuing the document underta5es to

*&les:

1. title remains in the seller . ris5 of loss remains with seller e&cept when the buyer is at fault or has agreed to bear the loss #. buyer must give goods a trial, e&cept where it is evident that it cannot perform the wor5 Sale or ret&rn 1. 6ub"ect to a resolutory condition . !epends entirely on the will of the buyer #. 0wnership passes to the buyer on delivery and subsequent return reverts ownership in the seller *. =is5 of loss or in"ury rests upon the buyer Sale on Trial 1. 6ub"ect to a suspensive condition . !epends on the character or quality of the goods #. 0wnership remains in the seller until buyer signifies his approval or acceptance to the seller *. =is5 of loss remains with the seller

"nstances where Seller is still the Owner despite +eli#ery: 1. 6ale on trial, approval or satisfaction . Contrary intention appears by the term of the contract( #. ,mplied reservation of ownership -Article 1+C#.

deliver the goods to the order of the person to whom the possession or custody of the document has been entrusted or if at the time of such entrusting the document in such form that it may be negotiated by delivery. 'lace of deli#ery of $oods 1. 'here there is an agreement, place of delivery is that agreed upon . 'here there is no agreement, place of delivery determined by usage of trade #. 'here there is no agreement and no prevalent usage, place of delivery is the seller9s place *. ,n any other case, place of delivery is the seller9s residence +. ,n case of specific goods, which to the 5nowledge of the parties at the time the contract was made were in some other place, that place is the place of delivery, in the absence of agreement or usage of trade to the contrary Time of deli#ery of $oods 1. 6tipulated time . ,n the absence thereof, within a reasonable time *4LES (2EN A4ANT"T9 "S LESS T2AN AG*EE+ 4'ON: 1. )uyer may re"ect( or . )uyer may accept what has been delivered, at the contract rate *4LES (2EN A4ANT"T9 "S 3O*E T2AN AG*EE+ 4'ON: 1. )uyer may re"ect all( or . )uyer may accept the goods agreed upon and re"ect the rest( or #. )uyer may accept all and must pay for them at the contract rate NOTE: Acceptance, even if not e&press may be implied when the buyer e&ercises acts of ownership over the e&cess goods. *4LES (2EN GOO+S 3"BE+ ("T2 GOO+S OF +"FFE*ENT +ESC*"'T"ON: )uyer may accept the goods which are in accordance with the contract and re"ect the rest NOTE: ,f the sub"ect matter is indivisible, in case of delivery of larger quantity of goods or of mi&ed goods, the buyer may re"ect the whole of the goods

+EL"0E*9 TO T2E CA**"E* GE E!A" !#"E$ 'here the seller is authoriGed or required to send the goods to the buyer, delivery to the carrier is delivery to the buyer. E%CE&'() *$ 1. 'hen a contrary intention appears . ,mplied reservation of ownership under pars. 1, ,# of Art. 1+C#

8inds of +eli#ery to the Carrier

a. C.,.3. (cost2 insurance2 ,reight6 signify that the price fi&ed covers not only the costs of the goods, but the e&pense of the freight and the insurance to be paid by the seller b. 3.0.). (,ree on .oard6 goods are to be delivered free of e&pense to the buyer to the point where they are 3.0.). 1he point of 3.0.)., either at the point of shipment or the point of destination, determines when the ownership passes. NOTE: the terms C.,.3. and 3.0.). merely ma5e rules of presumption c. C.0.!. (collect on delivery6 the carrier acts for the seller in collecting the purchase price, which the buyer must pay to obtain possession of the goods.

'A93ENT OF T2E '4*C2ASE '*"CE GE E!A" !#"E$ 1he seller is not bound to deliver the thing sold unless the purchase price has been paid. E%CE&'() $ 1he seller is bound to deliver even if the price has not been paid, if a period of payment has been fi&ed. Sale of *eal 'roperty y 4nit Entire area stated in the contract must be delivered 'hen entire area could not be delivered, vendee may: 1. Enforce the contract with the corresponding decrease in price . =escind the sale: a. ,f the lac5 in area is at least 1H1C than that stated or stipulated a. ,f the deficiency in quality specified in the contract e&ceeds 1H1C of the price agreed upon b. ,f the vendee would not have bought the immovable had he 5nown of its smaller area of inferior

quality irrespective of the e&tent of lac5 of area or quality Sale for a L&mp S&m 3A uerpo ierto4 4endor is obligated to deliver all the land included within the boundaries, regardless of whether the real area should be greater or smaller 0rdinarily, there can be no rescission or reduction or increase whether the area be greater or lesser, unless there is gross mista5e. NOTE: 1he Civil Code presumes that the purchaser had in mind a particular piece of land and that he ascertained its area and quality before the contract of sale was perfected. ,f he did not do so, or if having done so he made no ob"ection and consented to the transaction, he can blame no one but himself -1e leon vs @illanueva @iuda de !iosa 56 &hil 677.. 'hat is important is the delivery of all the land included in the boundaries. +O4BLE SALE :Art/ .C55< *e,&isites: 0OCS 1. two or more transactions must constitute #alid sales( . they must pertain e&actly to the same ob"ect or sub"ect matter( #. they must be bought from the same or immediate seller( A%! *. two or more buyers who are at odds over the rightful ownership of the sub"ect matter must represent conflicting interests. *&les of preference: 1. $ersonal $roperty a. first possessor in good faith . =eal $roperty a. first registrant in good faith b. first possessor in good faith c. person with oldest title in good faith NOTES: '&rchaser in Good Faith one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property (@eloso v+ CA6+ =egistration requires actual recording( if the property was never really registered as when the registrar forgot to do so although

he has been handed the document, there is no registration. $ossession is either actual or constructive since the law made no distinction - *anches vs+ !amos 44 &hil614. $ossession in Art.1+** includes not only material but also symbolic possession ('en <orty !ealty v+ Cru82 14 *ept+ 2445+6 1itle means title because of sale, and not any other title or mode of acquiring property -"ichauco vs+ 9erenguer 5> &hil 642.

CON+"T"ON Effect of Non=f&lfillment of Condition 1. ,f the obligation of either party is sub"ect to any condition and such condition is not fulfilled, such party may either: a. refuse to proceed with the contract b. proceed with the contract , waiving the performance of the condition. . ,f the condition is in the nature of a promise that it should happen, the non2 performance of such condition may be treated by the other party as breach of warranty. (A**ANT9 a statement or representation made by the seller of goods, contemporaneously and as a part of the contract of sale, having reference to the character, quality, or title of the goods, and by which he promises or underta5es to insure that certain facts are or shall be as he then represents.

8inds:

1. EB'*ESS 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 NOTE: A mere e&pression of opinion, no matter how positively asserted, does not import a warranty unless the seller is an e&pert and his opinion was relied upon by the buyer. . "3'L"E+ 2 that which the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties a. 'arranty against eviction b. 'arranty against hidden defects

c.

'arranty as ?erchantability

to

3itness

and

of eviction and assumption of its consequences NOTE: vendor not liable B/ (arranty a$ainst hidden defects 'arranty in which the seller guarantees that the thing sold is free from any hidden faults or defects or any charge or encumbrance not declared or 5nown to the buyer.

A/ (arranty a$ainst e#iction 'arranty in which 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.

Elements:

Elements: :S2EN'(<
1. . #. *.

1. vendee is deprived, in whole or in part, of the thing purchased( . the deprivation is by virtue of a final "udgment( #. the "udgment is based on a prior right to the sale or an act imputable to the vendor( *. the vendor was summoned in the suit for eviction at the instance of the vendee( A%! +. no waiver of warranty by the vendee.

defect must be Serious or important( it must be 2idden( it must E&ist at the time of the sale( vendee must give Notice of the defect to the vendor within a reasonable time( +. action for rescission or reduction of price must be brought within the proper 'eriod -within / mos. from delivery of the thing or *C days from date of delivery in case of animals.( and /. no (aiver of the warranty.

*emedies of the 0endee:

0endorDs lia ility shall consist of:

1. 5otal eviction: 3!# '$4 a. 0alue of the thing at the time of eviction( b. "ncome or fruits if he has been ordered to deliver them to the party who won the suit( c. Costs of the suit( d. E&penses of the contract( AN+ e. +amages and interests if the sale was in bad faith. . Partial eviction: a. to enforce vendor9s liability for eviction -4,CE!.( O* b. to demand rescission of contract. 4endor9s liability is waivable but any stipulation e&empting the vendor from the obligation to answer for eviction shall be void if he acted in bad faith. 8inds of (ai#er: a. onsciente voluntarily made by the vendee without the 5nowledge and assumption of the ris5s of eviction NOTE: vendor shall pay only the value which the thing sold had at the time of eviction d. #ntencionada made by the vendee with 5nowledge of the ris5s

a. Accion redhi.itoria -rescission. b. Accion quanti minoris -reduction of the price. NOTES: >idden faults or defects pertain only to those that ma5e the ob"ect unfit for the use for which it was intended at the time o, the sale+ 1his warranty in 6ales is applicable in <ease -Aap vs+ 'iaoqui 15&hil455. Effect of loss of thin$ on acco&nt of hidden defects: 1. ,f vendor was aware of hidden defects, he shall bear the loss and vendee shall have the right to recover: :'E+< a. the price paid b. e&penses of the contract c. damages . ,f vendor was not aware, he shall be obliged to return: :'"E< a. price paid b. interest thereon c. e&penses of the contract if paid by the vendee Effect if the ca&se of loss was not the hidden defect ,f the thing sold had any hidden fault at the time of the sale, and should thereafter

be lost by a -1. fortuitous event 0= - . through the fault of the vendee: the vendee may demand of the vendor the price which he paid less the value of the thing at the time of its loss. NOTE: the difference between the price paid and the value of the thing at the time of its loss represents the damage suffered by the vendee and the amount which the vendor enriched himself at the e&pense of the vendee ,f the vendor acted in bad faith: vendor shall pay damages to the vendee

aveat !enditor :ELet the seller ewareF<: the vendor is liable to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof. aveat 'mptor :ELet the &yer ewareF<: requires the purchaser to be aware of the supposed title of the vendor and one who buys without chec5ing the vendor9s title ta5es all the ris5s and losses consequent to such failure. OBL"GAT"ONS OF T2E 0EN+EE: A/ 'rincipal O li$ations: 1. 1o accept delivery . 1o pay the price of the thing sold in legal tender unless another mode has been agreed upon NOTE: A grace period granted the vendee in case of failure to pay the amountHs due is a right not an obligation. 1he grace period must not be li5ened to an obligation, the non2payment of which, under Article 11/D of the Civil Code, would still generally require "udicial or e&tra2 "udicial demand before @defaultA can be said to arise -9ricBto-n 1ev?t Corp vs+ Amor 'ierra 1ev?t Corp+ 57*C!A457. B/ Other O li$ations 1. 1o ta5e care of the goods without the obligation to return, where the goods are delivered to the buyer and he rightfully refuses to accept NOTES: 1he buyer in such a case is in the position of a bailee who has had goods thrust upon him without his assent. >e has the obligation to ta5e reasonable care of the goods but nothing more can be demanded of him. 1he goods in the buyer9s possession under these circumstances are at the seller9s ris5 . 1o be liable as a depositary if he voluntarily constituted himself as such #. 1o pay interest for the period between delivery of the thing and the payment of the price in the following cases: a. 6hould it have been stipulated b. 6hould the thing sold and delivered produce fruits or income c. 6hould he be in default, from the time of "udicial or e&tra2"udicial demand for the payment of the price 'ertinent *&les:

C/ "mplied (arranties of A&ality (arranty of Fitness 'arranty in which the seller guarantees that the thing sold is reasonably fit for the 5nown particular purpose for which it was acquired by the buyer

GE E!A" !#"E$ 1here is no implied warranty as to the quality or fitness for any particular purpose of goods under a contract of sale E%CE&'() *$ 1. 'here the buyer, e&pressly or by implication manifests to the seller the particular purpose for which the goods are required . 'here the buyer relies upon the seller9s s5ill or "udgment
(arranty of 3erchanta ility 'arranty in which the seller guarantees, where the goods were bought by description, that they are reasonably fit for the general purpose for which they are sold ,t requires identity between -hat is descri.ed in the contract A%! -hat is tendered, in the sense that the latter is of such quality to have some value "nstances where implied warranties are inapplica le: 1. As is and where is sale 2 vendor ma5es no warranty as to the quality or wor5able condition of the goods, and that the vendee ta5es them in the condition in which they are found and from the place where they are located. . 6ale of second2hand articles #. 6ale by virtue of authority in fact or law

1. 1he vendor is not required to deliver the thing sold until the price is paid nor the vendee to pay the price before the thing is delivered in the absence of an agreement to the contrary -Article 1524.. . ,f stipulated, the vendee is bound to accept delivery and to pay the price at the time and place designated( #. ,f there is no stipulation as to the time and place of payment and delivery, the vendee is bound to pay at the time and place of delivery *. ,n the absence of stipulation as to the place of delivery, it shall be made wherever the thing might be at the moment the contract was perfected -Article 1251. +. ,f only the time for delivery has been fi&ed in the contract, the vendee is required to pay even before the thing is delivered to him( if only the time for payment has been fi&ed, the vendee is entitled to delivery even before the price is paid by him -Article 1524. (ays of acceptin$ $oods: 1. E&press acceptance . ,mplied acceptance a. 'hen buyer, after delivery of goods, does an act inconsistent with the seller9s ownership and which only an owner can do b. 3ailure to return after reasonable lapse of time NOTES: !elivery and acceptance are two separate and distinct acts of different parties +eli#ery is an act of the vendor and one of the vendor9s obligations( vendee has nothing to do with the act of delivery by the vendor Acceptance is an obligation of the vendee( acceptance cannot be regarded as a condition to complete delivery( seller must comply with the obligation to deliver although there is no acceptance yet by the buyer Acceptance by the buyer may precede actual delivery( there may be actual receipt without acceptance and there may be acceptance without receipt 7nless otherwise agreed upon, acceptance of the goods by the buyer does not discharge the seller from liability for damages or other legal remedy li5e for breach of any promise or warranty

(hen #endee may s&spend payment of the price: 1. ,f he is disturbed in the possession or ownership of the thing bought . ,f he has well2grounded fear that his possession or ownership would be disturbed by a vindicatory action or foreclosure of mortgage NOTES: ,f the thing sold and the price is already in the hands of the vendor, the sale is a consummated contract and Article 1+DC is no longer applicable. Article 1+DC, presupposes that the price or any part thereof has not yet been paid and the contract is not yet consummated. 7nder Article 1+DC, the vendee has no cause of action for rescission before final "udgement, otherwise the vendor might become a victim of machinations between the vendee and the third person !isturbance must be in possession and ownership of the thing acquired ,f the disturbance is caused by the e&istence of non2apparent servitude, the remedy of the buyer is rescission, not suspension of payment. (hen #endee cannot s&spend payment of the price e#en if there is dist&r ance in the possession or ownership of the thin$ sold: 1. if the vendor gives security for the return of the price in a proper case . if it has been stipulated that notwithstanding any such contingency, the vendee must ma5e payment -see Article 1547 par+5. #. if the vendor has caused the disturbance or danger to cease *. if the disturbance is a mere act of trespass +. if the vendee has fully paid the price *E3E+"ES FO* B*EAC2 OF CONT*ACT A/ *emedies of the seller 1. Action for payment of the price -Art. 1+D+. . Action for damages for non2acceptance of the goods -Art. 1+D/. #. Action for rescission -Art. 1+D8 B/ *emedies of the &yer 1. Action for specific performance -Art. 1+DB. . Action for rescission or damages for breach of warranty -Art 1+DD. A/ *E3E+"ES OF T2E SELLE* B*EAC2 OF CONT*ACT FO*

 #0 A,' "F 6"!A%&', ). "rdinary -emedies a. ?ovables in ;eneral 3ailure of the vendee to appear to receive delivery or, having appeared, failure to tender the price at the same time, unless, a longer period for its payment has been stipulated action to rescind the sale -Art. 1+D#. b. 6ale of ;oods action for the price -Art. 1+D+. action for damages -Art. 1+D/. 7.

Types:

1npaid ,eller

a. 1he seller of the goods who has not been paid or to whom the price has not been tendered b. 1he seller of the goods, in case a bill of e&change or other negotiable instrument has been received as conditional payment, A%! the condition on which it was received has been bro5en by reason of the dishonor of the instrument, insolvency of the buyer or otherwise. *emedies: 1. $ossessory lien over the goods . =ight of stoppage in transitu after he has parted with the possession of the goods and the buyer becomes insolvent #. 6pecial =ight of resale *. 6pecial =ight to rescind the sale +. Action for the price /. Action for damages

1. *peci,ic per,ormance upon vendee?s ,ailure to pay NOTE: !oes not bar full recovery for "udgment secured may be e&ecuted on all personal and real properties of the buyer which are not e&empt from e&ecution (&alma v+ CA+6 . !escission o, the sale i, vendee shall have ,ailed to pay t-o or more installments NOTES: %ature of the remedy which requires mutual restitution bars further action on the purchase price ( onato v+ (AC+6 GE E!A" !#"E$ cancellation of sale requires mutual restitution, that is all partial payments of price or rents must be returned E%CE&'() *$ a stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstan2 ces -Article 1476.. #. <oreclosure o, the chattel mortgage on the thing sold i, vendee shall have ,ailed to pay t-o or more installments+ (n this case2 there shall .e no ,urther action against the purchaser to recover unpaid .alance o, the price+ NOTES: 3urther recovery barred only from the time of actual sale at public auction conducted pursuant to foreclosure (Cacondray v+ 'an+6 0ther chattels given as security cannot be foreclosed if they are not sub"ect of the installment sale -!idad vs+ <ilipinas investment and <inance Corp+ G! 5>7462 3an+ 272 1>75. ,f the vendor assigns his right to a financing company, the latter may be regarded as a collecting agency of the vendor and cannot therefore recover any deficiency from the vendee (Dayas vs+ "uneta Cotors Co+6 'hen the vendor assigns his credit to another person, the latter is li5ewise bound by the same law. Accordingly, when the assignee forecloses on the mortgage, there can be no further recovery of the deficiency and the vendor2mortgagee is deemed to have renounced any right thereto - 9or.on (( vs+ *ervice-ide *pecialist2 (nc+

>/ Article .5G5 or *ecto Law !emedies o, vendor in sale o, personal property .y installments *e,&isites: 1. Contract of sale . $ersonal property #. $ayable in installments *. ,n the case of the second and third remedies, that there has been a failure to pay two or more installments NOTE: Apply li5ewise to contracts purporting to be leases of personal property with option to buy Art/ .5G5 does not apply to a sale: 1. $ayable on straight terms -partly in cash and partly in one term. . 0f =eal property *emedies:

257*C!A657. NOTE: >owever, Article 1*B*-#. does NOT ar one to whom the vendor has assigned on -ith a recourse .asis his credit against the vendee from reco#erin$ from the #endor the assi$ned credit in f&ll although the vendor may have no right of recovery against the vendee for the deficiency -<ilipinas (nvest+ : <inance Corp+ vs+ @itug2 3r+ 27*C!A657. NOTE: =emedies e-cl&si#e are alternati#e and

#0 A,' "F #66"!A%&',

./ Ordinary *emedies a. ,n case of anticipatory breach rescission -Article 15>1. b. 3ailure to pay the purchase price rescission upon "udicial or notarial demand for rescission -Article 15>2. the vendee may pay, even after the e&piration of the period, as long as no demand for rescission has been made upon him NOTE: Article 1+D does not apply to: 1. 6ale on instalment of real estate . Contract to sell #. Conditional sale *. Cases covered by =A /++ : =ealty ,nstallment buyer protection act 1/ */A/ No/ ?CC1 or 3aceda Law An Act to $rovide $rotection to buyers of =eal Estate on ,nstallment $ayments "a- governing sale or ,inancing o, real estate on installment payments *e,&isites: 1. transactions or contracts involving the sale 0= financing of real estate on installment payments, including residential condominium apartments( and . buyer defaults in payment of succeeding installments. *i$hts of the &yer: A. #f %uyer has paid at least two 374 years of installments 1. 1he buyer must pay, -ithout additional interest, the unpaid installments due within the total grace period earned by him. 1here shall be one -1. month grace period for every one -1. year of installment payments made

NOTE: 1his right shall be e&ercised by the buyer 0%<F once in every + years of the life of the contract A%! its e&tensions. . Actual cancellation can only ta5e place a,ter 54 days ,rom receipt .y the .uyer o, the notice o, cancellation )! demand ,or rescission .y a notarial act A 1 upon ,ull payment o, the cash surrender value to the buyer ()lympia Eousing v+ &anasiatic2 16 3anuary 2445+6 NOTE: 1he seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to +CI of the total payments made. After five -+. years of installments, there shall be an additional +I every year but not to e&ceed DCI of the total payments made #. 1he buyer shall have the right to sell his rights or assign the same to another person 0= to reinstate the contract by updating the account during the grace period and before actual cancellation of the contract *. 1he buyer shall have the right to pay in advance any installment or the full unpaid balance of the purchase price any time without interest and to have such full payment of the purchase price annotated in the certificate of title covering the property. %. #f %uyer has paid less than 7 years of installments 1. 1he seller shall give the buyer a grace period of %01 less than /C days from the date the installment became due. ,f the buyer fails to pay the installments due at the e&piration of the grace period, the seller may cancel the contract after #C days from receipt by the buyer of the notice of cancellation or the demand for rescission of contract by a notarial act. . ,ame 0o. * and 8 paragraph A above NOTE: !own payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made *emedies of 4npaid Seller i/ 'ossessory Lien (hen may e e-ercised:

1. 'here the goods have been sold without any stipulation as to credit . 'hen the goods have been sold on credit, but the term of credit has e&pired #. 'here the buyer becomes insolvent (hen lost: 1. !elivery of the goods to a carrier or bailee for the purpose of transmission to the buyer without reserving ownership or right of possession . 'hen the buyer lawfully obtains possession of the goods #. )y waiver of the lien NOTE: $ossessory lien is lost after the seller loses possession but his lien as an unpaid seller remains( hence he is still an unpaid creditor with respect to the price of specific goods sold. >is preference can only be defeated by the governments claim to the specific ta& on the goods themselves -Arts+ 2247 and 2241.. NOTE: 1he bringing of an action to recover the purchase price is not one of the ways of losing the possessory lien. An unpaid seller does not lose his lien by reason that he has obtained a money "udgement or decree for the price of goods -Art+ 152>2 last paragraph.. ii/ Stoppa$e of $oods in transitu *e,&isites: 1. 6eller must be unpaid . )uyer must be insolvent #. ;oods must be in transit *. 6eller must either: a. actually ta5e possession of the goods sold 0= b. give notice of his claim to the carrier or other person in possession +. 6eller must surrender the negotiable document of title, if any, issued by the carrier or bailee /. 6eller must bear the e&penses of delivery of the goods after the e&ercise of the right Effects of the e-ercise of the ri$ht 1. 1he goods are no longer in transit. . 1he contract of carriage ends( instead the carrier now becomes a mere bailee, and will be liable as such. #. 1he carrier should not deliver anymore to the buyer or the latter9s agent( otherwise he will clearly be liable for damages. *. 1he carrier must redeliver to, or according to the directions of the seller. iii/ Special *i$ht of *esale

?ay be e&ercised only when the unpaid

seller has either a right of lien 0= has stopped the goods in transitu A%! under A%F of the following conditions: 1. 'here the goods are perishable in nature . 'here the right to resell is e&pressly reserved in case the buyer should ma5e a default #. 'here the buyer delays in the payment of the price for an unreasonable time

i#/ *escission Types: 1. *pecial !ight to !escind #nder Art+ 1554 ,f the seller has either the right of lien 0= a right to stop the goods in transitu A%! under either of situations: a. 'here the right to rescind on default has been e&pressly reserved b. 'here the buyer has been in default for an unreasonable time 2+ #nder Art+ 15>7 (Ftechnical rescissionG6 #/ Action for the price (hen may e e-ercised: 1. 'here the ownership has passed to the buyer A%! he wrongfully neglects 0= refuses to pay for the price . 'here the price is payable on a day certain A%! he wrongfully neglects 0= refuses to pay for the price, irrespective of the delivery or transfer of title #. 'here the goods cannot readily be resold for a reasonable price A%! the buyer wrongfully refuses to accept them even before the ownership of the goods has passed, if Article 1+D/ is inapplicable. #i/ Action for dama$es (hen may e e-ercised: 1. ,n case of wrongful neglect or refusal by the buyer to accept or pay for the thing sold -Art. 1+D/ par.1. . ,n an e&ecutory contract, where the ownership in the goods has not passed, and the seller cannot maintain an action to recover the price -Art 1+D+. #. ,f the goods are not yet identified at the time of the contract or subsequently B/ *E3E+"ES OF T2E B49E* B*EAC2 OF CONT*ACT FO*

./ Action for specific performance :Art/ .C7G< 'here the seller has bro5en the contract to deliver specific or ascertained goods 1he "udgment 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 "ust 1/ *emedies of &yer for reach of warranty y seller :Art/ .C77<: 1. -ecoupment accept the goods and set up the seller9s breach to reduce or e&tinguish the price . Accept the goods and maintain an action for damages for breach of warranty #. =efuse to accept the goods and maintain an action for damages for breach of warranty *. =escind the contract by returning or offering the return of the goods, and recover the price of any part thereof NOTE: 1hese are alternative remedies. EBT"NG4"S23ENT OF SALE 1. 6ame causes as in all other obligations . Conventional =edemption #. <egal =edemption

+. 4endor binds himself to pay the T a&es of the thing sold( /. Any Other case where the parties really intended that the transaction should secure the payment of a debt or the performance of any obligation( or 8. 'hen there is +oubt as to whether contract is contract of sale with right of repurchase or an equitable mortgage. E,&ita le 3ort$a$e 0ne which lac5s the proper formalities, form of words, or other requisites prescribed by law for a mortgage, but shows the intention of the parties to ma5e the property sub"ect of the contract as security for a debt and contains nothing impossible or contrary to law -Cachola vs+ CA 247*C!A4>6. *edemption 'eriod a. if there is an agreement: period agreed upon cannot e&ceed 1C years b. if no agreement as to the period: * years from the date of the contract c. the vendor who fails to repurchase the property within the period agreed upon may, however, e&ercise the right to repurchase within #C days 3=0? the time final "udgment was rendered in a civil action on the basis that the contract was a true sale with right of repurchase 1his refers to cases involving a transaction where the issue or controversy between the parties concern or involve the "uridical nature or character of the contract in question -i.e. whether as a pacto de retro sale or an equitable mortgage. A%! the court ma5es an e&press finding that the contract is one of pacto de retro - 'apia vs+ CA 6>*C!A54>. NOTE: 1ender of payment is sufficient to compel redemption, but is not in itself a payment that relieves the vendor from his liability to pay the redemption price (&ae8 v+ Cagno+6 LEGAL *E+E3'T"ON 1he right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by -1. purchase or - . dation in payment, or -#. by any other transaction whereby ownership is transferred by onerous title.

CON0ENT"ONAL *E+E3'T"ON 1he right which the vendor reserves to himself, to reacquire the property sold provided he returns to the vendee: b. the price of the sale( c. e&penses of the contract( d. any other legitimate payments made therefore and( e. the necessary and useful e&penses made on the thing sold( and f. fulfills other stipulations which may have been agreed upon. %01E: A sale with conventional redemption is deemed to be an equita.le mortgage in any of the following cases: :"'E*TO+< 1. 7nusually "nadequate purchase price( . 'ossession by the vendor remains, as lessee or otherwise( #. E&tension of redemption period after e&piration( *. *etention by the vendee of part of the purchase price(

 ,t must be e&ercised within thirty -#C. days

from the notice in writing by the vendor. NOTE: 'ritten notice under Article 1/ # is mandatory for the right of redemption to commence (&*C v+ *ps+ @alencia 1> August 2445+6 1ender of payment is not necessary( offer to redeem is enough. '*E=E3'T"ON 1. arises before sale . no rescission because no sale as yet e&ists #. the action is directed against the prospective seller

*E+E3'T"ON 1. arises after sale . there can be rescission of the original sale #. action is directed against the buyer

1. transfers the right to collect the full value of the credit, even if he paid a price less than such value . transfers all the accessory rights #. debtor can set up against the assignee all the defenses he could have set up against the assignor Effect of payment y the de tor after assi$nment of credit 1+ 9e,ore otice o, the assignment $ayment to the original creditor is valid and debtor shall be released from his obligation 2+ A,ter otice $ayment to the original creditor is not valid as against the assignee >e can be made to pay again by the assignee (arranties of the assi$nor of credit: a. >e warrants the e&istence of the credit b. >e warrants the legality of the credit at the perfection of the contract NOTE: 1here is no warranty as to the solvency o, the de.tor unless it is e&pressly stipulated 0= unless the insolvency was already e&isting and of public 5nowledge at the time of the assignment NOTE: 1he seller of an inheritance warrants only the fact of his heirship but not the ob"ects which ma5e up his inheritance. Lia ilities of the assi$nor of credit for #iolation of his warranties 1+ Assignor in good ,aith <iability is limited only to the price received and to the e&penses of the contract, and any other legitimate payments by reason of the assignment 2+ Assignor in .ad ,aith <iable not only for the payment of the price and all the e&penses but also for damages Le$al *edemption in Sale or Credit or other incorporeal ri$ht in liti$ation *e,&isites: 1. 1here must be a sale or assignment of credit . 1here must be a pending litigation at the time of the assignment #. 1he debtor must pay the assignee: a. price paid by him

"nstances of le$al redemption: A/ 4nder the Ci#il Code :le$al redemption<: 1. 6ale of a co2owner of his share to a stranger -Article 1624. . 'hen a credit or other incorporeal right in litigation is sold -Article 1654. #. 6ale of an heir of his hereditary rights to a stranger -Article 1477. *. 6ale of ad"acent rural lands not e&ceeding one hectare -Article 1621. +. 6ale of ad"acent small urban lands bought merely for speculation -Article 1622. B/ 4nder special laws: 1. An equity of redemption in cases of "udicial foreclosures . A right of redemption in cases of e&tra2 "udicial foreclosures #. =edemption of homesteads *. =edemption in ta& sales +. =edemption by an agricultural tenant of land sold by the landowner ASS"GN3ENT OF C*E+"T a contract by which the owner of a credit transfers to another his rights and actions against a third person in consideration of a price certain in money or its equivalent NOTE: 1ransfer of rights by assignment ta5es place by the perfection of the contract of assignment without the necessity of delivering the document evidencing the credit. this rule does not apply to negotiable documents and documents of title which are governed by special laws.

Effects of Assi$nment:

b. "udicial cost incurred by him( A%! c. interest on the price from the date of payment *. 1he right must be e&ercised by the debtor within #C days from the date the assignee demands -"udicially or e&tra2"udicially. payment from him SALE OF C*E+"T O* OT2E* "NCO*'O*EAL *"G2TS "N L"T"GAT"ON GE E!A" !#"E$ !ebtor has the right of legal redemption in sale of credit or incorporeal rights in litigation E%CE&'() *$ a. 6ale to a co2heir or co2owner b. 6ale to a co2owner c. 6ale to the possessor of property in question

As to matters not provided for by the

provisions on barter, the provisions on sales will apply suppletorily

B4L8 SALES LA( :Act No/ >7C1<

(hen Sale or Transfer in B&l): Any sale2 trans,er2 mortgage2 or assignment$ 1. 0f a stoc5 of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade and the regular prosecution of business( or . 0f all or substantially all, of the business or trade( or #. 0f all or substantially all, of the fi&tures and equipment used in the business of the vendor, mortgagor, transferor or assignor -section . (hen sale or transfer in &l) not co#ered y B&l) Sales Law: 1. ,f the sale or transfer is in the ordinary course of trade and the regular prosecution of business of the vendor( . ,f it is made by one who produces and delivers a written waiver of the provisions of the )ul5 6ales Act from his creditors #. ,f it is made by an e&ecutor, administrator, receiver, assignee in insolvency, or public officer, acting under "udicial process -*ection 7.( and *. ,f it refers to properties e&empt from attachment or e&ecution -!ules o, Court2 !ule 5>2 *ection 12. 'rotection Accorded to Creditors y B&l) Sales Law: 1. ,t requires the vendor, mortgagor, transferor or assignor to deliver to the vendee, mortgagee, or to his or its agent or representative a sworn written statement of names and addresses of all creditors to whom said vendor, etc. may have been indebted together with the amount due or to be due -*ection 5. . ,t requires the vendor, mortgagor, transferor or assignor, at least 1C days before the sale, transfer, mortgage, assignment to ma5e a full detailed inventory showing the quantity and the cost of price of goods, and to notify every creditor of the price terms and conditions of the sale, etc. -*ection 5. Effects of False Statements in the Sched&le of Creditors: ). Without knowledge of buyer

BA*TE*
BA*TE* contract whereby one of the parties binds himself to give one thing in consideration of the other:s promise to give another thing -Article 1657. NOTE: )arter is similar to a sale with the only difference that instead of paying a price in money, another thing is given in lieu of the purchase price 'E*FECT"ON and CONS433AT"ON 'erfected from the moment there is a meeting of minds upon the things promised by each party in consideration of the other

Cons&mmated from the time of mutual

delivery by the contracting parties of the things promised

NOTES: 'here the giver of the thing bartered is not the lawful owner thereof, the aggrieved party cannot be compelled to deliver the thing which he has promised and is also entitled to damages. 'here a party is evicted of the thing e&changed, the in"ured party is given the option, either to recover the property he has given in e&change with damages or only claim an indemnity for damages.

,f the statement is fair upon its face and the buyer has no 5nowledge of its incorrectness and nothing to put him on inquiry about it, he will be protected in its purchase 1he remedy of the creditor is not against the goods but to prosecute the seller criminally 7. With knowledge or imputed knowledge of buyer 1he vendee accepts it at his peril 1he sale is valid only as between the vendor and the vendee but void against the creditors *. With names of certain creditors without notice are omitted from the list 1he sale is void as to such creditors, whether the omission was fraudulent or not, 8. With respect to an innocent purchaser for a value from the original purchaser An innocent purchaser for value from the original purchaser is protected >owever if the circumstances are such as to bind the subsequent purchaser with constructive notice that the sale to the vendor -original purchaser. was fraudulent, the property will be liable in his hands to creditors of the original vendor Effect of #iolation of law on Transfer: ). As between the parties 1he )ul5 6ales <aw does not in any way affect the validity of the transfer as between the intermediate parties thereto A sale not in compliance with the )ul5 6ales <aw is valid against all persons other than the creditors. 7. As against creditors A purchaser in violation of the law acquires no right in the property purchased as against the creditors of the seller >is status is that of a trustee or receiver for the benefit of the creditors of the seller( as such, he is responsible for the disposition of the property *emedies A#aila le to creditors: 1he proper remedy is one against the goods to sub"ect them to the payment of the debt, such as e&ecution, attachment, garnish2 ment, or by a proceeding in equity An ordinary action against the purchaser to obtain money "udgement will not lie, unless the purchaser has sold or otherwise

disposed of, or dealt with the property, so as to become personally liable to creditors for value of it. Acts '&nished y B&l) Sales Law: 1. Jnowingly or wilfully ma5ing or delivering a statement required by the Act which does not include the names of all the creditors of the vendor, etc. with the correct amount due or to become due or which contains any false or untrue statement( and . 1ransferring title to any stoc5 of goods, wares, merchandise, provisions or materials sold in bul5 without consideration or for nominal consideration -*ection 7.

*ETA"L T*A+E L"BE*AL"HAT"ON ACT :*A G6?1<

*etail Trade Any act occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption, but the restrictions of this law shall not apply to the following: 1. 6ales by manufacturer, processor, laborer, or wor5er, to the general public the products manufactured, processed produced by him if his capital does not e&ceed $1CC,CCC( . 6ales by a farmer or agriculturalist selling the products of his farm #. 6ales in restaurant operations by a hotel owner or inn25eeper irrespective of the amount of capital( provided that the restaurant is incidental to the hotel business( and *. 6ales which are limited only to products manufactured, processed or assembled by a manufacturer through a single outlet, irrespective of capitaliGation

2i$h=End or L&-&ry Goods ;oods which are not necessary for life maintenance and whose demand is generated in large part by the higher income groups 6hall include but not limited to: "ewelry, branded or designer clothing and footwear, wearing apparel, leisure and sporting goods, electronics and other personal effects NOTE: A naturalH.orn citi8en o, the &hilippines who has lost his citiGenship but who resides in

the $hilippines shall be $ranted the same ri$hts as Filipino citi%ens Forei$n E,&ity 'articipation: 3oreign2owned partnerships, associations and corporations formed and organiGed under the laws of the $hilippines may, upon registration with 6EC and !1,, or in case of 3oreign2owned single proprietorship with the !1,, engage or invest in retail trade business, sub"ect to the following categories: ). ategory A: $aid2up capital of the equivalent in $hilippine $eso of: I J1@C;;@;;; 4S +ollars =eserved e&clusively for 3ilipino citiGens and corporations wholly owned by citiGens 7. ategory %: ?inimum paid2up capital of the equivalent in $hilippine $eso of J1@C;;@;;; 4S +ollars@ &t IJ6@C;;@;;; ?ay be wholly owned by foreigners e0cept for the first two years after the effectivity of this Act wherein foreign participation shall be limited to not K ?;L of total equity. *. ategory : $aid2up capital of the equivalent in $hilippine $eso of: J6@C;;@;;; 4S +ollars or more ?ay be wholly owned by foreigners NOTE: ,n no case shall the investments ,or esta.lishing a store in Cate$ories B and C be less than the equivalent in $hilippine $eso of: 4S JG>;@;;; 8. ategory $: Enterprises specialiGing in high2end or lu&ury products with paid2up capital of the equivalent in $hilippine $eso of: J1C;@;;; 4S +ollars per store ?ay be wholly owned by foreigners NOTES: 3oreign investor shall be required to maintain in the $hilippines the 37<< amount of the prescribed minimum capital, 7%<E66 the foreign investor has notified the 6EC and the !1, of its intention to repatriate its capital and cease operations in the $hilippines 3ailure to maintain the full amount of the prescribed minimum capital prior to

notification of the 6EC and the !1, shall sub"ect the foreign investors to penalties or restrictions on any future trading activitiesHbusiness in the $hilippines NOTE: 3oreign ,nvestors Acquiring 6hares of 6toc5 of e&isting retail stores whether or not publicly listed whose net worth is in e&cess of the $eso equivalent of 76 K ,+CC,CCC may purchase only up to the ma0imum o, 64I o, the equity thereo, -ithin the ,irst 2 years2 and therea,ter2 they may acquire the remaining percentage consistent -ith the allo-a.le ,oreign participation as herein provided NOTE: All retail 1rade enterprises under categories ) and C in which foreign ownership e&ceeds BCI of equity shall o,,er a minimum o, 54I o, their equity to the pu.lic through any stocB e0change in the &hilippines -ithin 7 years ,rom the start o, the operations A&alification of Forei$n *etailers 1. ?inimum of K CC,CCC,CCC 76 !ollars net worth in its parent corporation for Categories ) and C and K+C,CCC,CCC net worth in its parent corporation for Categories ! . + retailing branches or franchises in operation anywhere around the world unless such retailer has at least 1 store capitaliGed at a minimum of K +,CCC,CCC 76 !ollars #. +2year trac5 record in retailing( and *. 0nly nationals from, or "uridical entities formed or incorporated in Countries which allow to engage in retail trade in the $hilippines

'/+/ No/ 7C6

=egulating the 6ale of 6ubdivision <ots and Condominiums, providing penalties for violations thereof -3uly 122 1>76.

*e$istration of 'ro!ects 1he registered owner of a parcel of land who wishes to convert the same into a subdivision pro"ect shall submit his subdivision plan to the >076,%; A%! <A%!276E =E;7<A10=F )0A=!, which shall act upon and approve the same, upon a finding that the plan complies with the 6ubdivision 6tandards: and =egulations enforceable at the time the plan is submitted. 1he same procedure shall be followed in the case of a plan for a

condominium pro"ect e&cept that, in addition, said Authority shall act upon and approve the plan with respect to the building or buildings included in the condominium pro"ect in accordance with the %ational )uilding Code -!+A+ o+ 6541.. 1he subdivision plan, as so approved, shall then be submitted to the !irector of <ands for approval in accordance with the procedure prescribed in 6ection ** of the <and =egistration Act -Act %o. *D/, as amended by =.A. %o. **C.: $rovided, that it case of comple& subdivision plans, court approval shall no longer be required. 1he condominium plan as li5ewise so approved, shall be submitted to the =egister of !eeds of the province or city in which the property lies and the same shall be acted upon sub"ect to the conditions and in accordance with the procedure prescribed in 6ection * of the Condominium Act -=.A. %o. *8 /..

#. >as been or is engaged or is about to engage in fraudulent transactions( or *. >as made any misrepresentation in any prospectus, brochure, circular or other literature about the subdivision pro"ect or condominium pro"ect that has been distributed to prospective buyers( or +. ,s of bad business repute( or /. !oes not conduct his business in accordance with law or sound business principles.

LEASE
LEASE consensual, bilateral, onerous, and commutative contract by virtue of which one person binds himself to grant temporarily the use of the thing or to render some service to another who underta5es to pay some rent.

License to sell/ 6uch owner or dealer to whom has been issued a registration certificate shall not, however, be authoriGed to sell any subdivision lot or condominium unit in the registered pro"ect unless he shall have first obtained a license to sell the pro"ect within two wee5s from the registration of such pro"ect. E-empt transactions A license to sell and performance bond shall not be required in any of the following transactions: 1. 6ale of a subdivision lot resulting from the partition of land among co2owners and co2 heirs. . 6ale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of the same lot. #. 6ale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the ordinary course of business when necessary to liquidate a bona fide debt. Gro&nds for *e#ocation of re$istration certificate and license to sell of owners or dealers 1. ,s insolvent( or . >as violated any of the provisions of this !ecree or any applicable rule or regulation of the Authority, or any underta5ing of hisHits performance bond( or

8inds of Leases :From the #iew point of the s& !ect matter 1. <ease of things . <ease of service #. <ease of wor5 Characteristics or *e,&isites for Lease of Thin$s 1. Consensual . $rincipal #. %ominate *. $urpose is to allow en"oyment or use of a thing -the person to en"oy is the lessee( the person allowing the en"oyment by another is the lessor +. 6ub"ect matter must be within the commerce of man /. $urpose to which the thing will be devoted should not be immoral 8. 0nerous -there must rent or price certain. B. $eriod is 1emporary -not perpetual2 hence2 the longest period is >> years. D. $eriod is either definite or indefinite ,f no term is ,i0ed, we should apply Art.1/B -for rural leases. and Art. 1/B8 -for urban leases. ,f the term is ,i0ed .ut inde,inite, the court will fi& the term under the law of obligations and contracts 1C. <essor need not be the owner

NOTE: A usufructuary may thus lease the premises in favor of a stranger, such lease to end at the time that the usufruct itself ends *ent 1he compensation either in money, provisions, chattels, or labor, received by the lessor from the lessee. NOTES: 'hen a student boards and lodges in a dormitory, there is no contract of lease. 1he contract is not designated specifically in the Civil Code. ,t is an innominate contract. ,t is however, believed that the contract can be denominated as the contract of board and lodging. 1here is a contract of lease when the use and en"oyment of a safety deposit bo& in a ban5 is given for a price certain. 1his is certainly not a contract of deposit.

performed by the lessor . the result is generally not important, hence the laborer is entitled to be paid even if there is destruction of the wor5 through fortuitous event

. the result is generally important( generally, the price is not payable until the wor5 is completed, and said price cannot be lawfully demanded if the wor5 is destroyed before it is finished and accepted A$ency ,t is based on representation agent represents his principal and enters into "uridical acts. $reparatory contract

Lease of Ser#ices ,t is based on employment the lessor of services does not represent his employer nor does he e&ecute Juridical acts. $rincipal contract

LEASE 1. only use en"oyment transferred . transfer temporary #. lessor need not the owner

or is is be

SALES 1. ownership transferred

is

*. the price of the ob"ect, distinguished from the rent, is usually not mentioned Lease of Thin$s 1. ob"ect of contract is a thing . lessor has to deliver the thing leased #. in case of breach, there can be an action for specific performance Lease of Ser#ices 3locatio operatum4 1. the important ob"ect is the labor

. transfer is permanent #. seller must be the owner at the time the property is delivered *. usually, the selling price is mentioned

*&le for Lease of Cons&ma le Goods GE E!A" !#"E$ Consumable goods cannot be the sub"ect matter of a contract of lease of things E%CE&'() *$ a. ,f they are merely e&hibited b. ,f they are accessory to an industrial establishment *ECO*+"NG OF LEASE OF 'E*SONAL '*O'E*T9 GE E!A" !#"E$ <ease of real property is personal right E%CE&'() *$ <ease parta5es of the nature of real right if: a. <ease of real property is more than 1 year b. <ease of real property is registered regardless of duration NOTE: <ease of personal property cannot be registered. 1o be binding against third persons, the parties must e&ecute a public instrument. 'ersons +is,&alified to e Lessees Beca&se +is,&alified to B&y 1. A husband and a wife cannot lease to each other their separate properties e&cept: a. if separation of property was agreed upon b. if there has been "udicial separation of property

Lease of Ser#ices 1. ob"ect is some wor5 or service . lessor has to perform some wor5 or service #. in case of breach, no action for specific performance Contract for a 'iece of (or) 3locatio operas4 1. the important ob"ect is the wor5 done

$ersons referred to in Art. 1*D1 are disqualified because of fiduciary relationships S4BLEASE A separate and distinct contract of lease wherein the original lessee becomes a sublessor to a sublessee. Allowed unless e&pressly prohibited. 1he sublessee is subsidiarily liable for any rent due. 1he lessor has an accion directa against the sublessee for unpaid rentals and improper use of the ob"ect. S4BLEASE 1. there are two leases and two distinct "uridical relationships although immediately connected and related to each other . the personality of the lessee does not disappear #.the lessee does not transmit absolutely his rights and obligations to the sublessee *. the sublessee, generally, does not have any direct action against the lessor ASS"GN3ENT OF LEASE 1. there is only one "uridical relationship, that of the lessor and the assignee, who is converted into a lessee . the personality of the lessee disappears #. the lessee transmits absolutely his rights to the assignee *. the assignee has a direct action against the lessor

c.

to maintain lessee in peaceful and adequate en"oyment of the lease for the entire duration of the contract

OBL"GAT"ONS OF T2E LESSEE :*1EN14< a. to pay rent b. to &se thing leased as a diligent father of a family, devoting it to the use stipulated c. to pay e&penses for the deed of lease d. to notify the lessor of usurpation or untoward acts e. to notify the lessor of need for repairs f. to return the property leased upon termination of the lease Effect of +estr&ction of the Thin$ Leased: 1+ 'otal destruction .y a ,ortuitous event <ease is e&tinguished 2+ &artial destruction a. $roportional reduction of the rent, or b. =escission of the lease (hen lessee may s&spend payment of rent: 1. lessor fails to underta5e necessary repairs . lessor fails to maintain the lessee in peaceful and adequate en"oyment of the property leased Alternati#e remedies of A$$rie#ed party :LessorMLessee< in case of Non=f&lfillment of d&ties: 1. =escission and damages . !amages only, allowing the contract to remain in force 6pecific $erformance NOTE: !amages =ecoverable in e"ectment cases are the rents or the fair rental value of the premises. 1he following cannot be successfully claimed: 1. $rofits plaintiff could have earned were it not for the possible entry or unlawful detainer . ?aterial in"ury to the premises #. Actual, moral, or e&emplary damages "mmediate termination of lease &nder Art/ .??; applies: 1. only to dwelling place or any other building intended for human habitation . even if at the time the contract was perfected, the lessee 5new of the dangerous condition or waived the right to rescind on account of this condition *&les on Alteration of the Form of the Lease

"nstances when s& lessee is lia le to the lessor: a. All acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee b. 1he sublessee is subsidiarily liable to the lessor for any rent due from the lessee. NOTE: 1he sublessee shall not be responsible beyond the amount of rent due from him. Accion $irecta$ direct action which the lessor may bring against a sublessee who misuses the subleased property. OBL"GAT"ONS OF T2E LESSO* :+N3< a. to deliver the thing in a condition as to render it fit for use intended b. to ma5e all necessary repairs on the thing

 1he &essor can alter provided there is no

c.

impairment of the use to which the thing is devoted under the terms of the lease Alteration can also be made by the &essee so long as the value of the property is not substantially impaired

,f rent is paid monthly: lease is from month to month d. ,f rent is paid yearly: lease is from year to year *&le if Lessor O !ects to the LesseeNs contin&ed 'ossession: =equisites: 1. Contract has e&pired . <essee continued en"oying the thing #. <essor 0b"ected to this en"oyment ,f the three requisites are present, the lessee shall be considered a possessor in bad faith "3'L"E+ NE( LEASE 35acita -econducion4 lease which arises if at the end of the contract the lessee should continue en"oying the thing leased for 1+ days with the acquiescence of the lessor, unless a notice to the contrary had previously been given by either party.

*&les in case of 4r$ent *epairs 1he lessee is obliged to tolerate the wor5 although it may be very annoying to him and although during the same time he may be deprived of a part of the premises 1. ,f repairs last for more than *C days: <essee cannot act for reduction of rent or rescission . ,f *C days or more: lessee can as5 for proportionate reduction Effects if Lessor fails to ma)e 4r$ent *epairs 1. <essee may order repairs at the lessor9s cost . <essee may sue for damages #. <essee may suspend the payment of the rent *. <essee may as5 for rescission, in case of substantial damage to him T*ES'ASS "N LEASE: 1. Trespass in fact (pertur.acion de mere hecho6$ physical en"oyment is reduced <essor will not be held liable. . Trespass in law (pertur.acion de derecho6$ A third person claims legal right to en"oy the premises <essor will be held liable +&ration of Lease ). &ease made for a determinate time or fi/ed Period <ease will be for the said period and it ends on the day fi&ed without need of a demand 7. #f there is no fi/ed period A. For -ural &ands 3Article )9:;4 it shall be for all time necessary for the gathering of fruits which the whole estate may yield in 1 year, or which it may yield once %. For 1rban &ands 3Article )9:+4 a. ,f rent is paid daily: lease is from day to day b. ,f rent is paid wee5ly: lease is from wee5 to wee5

*e,&isites:

a. the term of the original contract has e&pired b. the lessor has not given the lessee a notice to vacate c. the lessee continued en"oying the thing leased for at least 1+ days with the acquiescence of the lessor 1. 'hen before or after the e&piration of the term, there is a notice to vacate given by either party. . 'hen there is no definite fi&ed period in the original lease contract as in the case of successive renewals. a. 1he period of the new lease is not that stated in the original contract but the time in Articles 1/B and 1/B8. b. 0ther terms of the original contract are revived.

(hen there is no implied new lease:

Effects:

NOTE: 1erms that are revived are only those which are germane to the en"oyment of possession, but not those with respect to special agreements which are by nature foreign to the right of occupancy or en"oyment inherent in a contract of lease such as an option to purchase the leased premises (1i8on vs+ Cagsaysay G! o+ 255>>2 Cay 5121>746

'erpet&al Lease A lease contract providing that the lessee can stay in the premises for as long as he wants and for as long as he can pay the rentals and its increases. 1his is not permissible( it is a purely potestative condition because it leaves the effectivity and en"oyment of leasehold rights to the sole and e&clusive will of the lessee NOTE: ,n 3espaJo !ealty v+ CA2 27 *ept+ 2442 , the 6C upheld a lease contract, which provides that @the lease contract shall continue for an indefinite period provided that the lessee is up2 to2date in the payment of his monthly rentalsA for the contract is one with a period sub"ect to a resolutory condition.

Gro&nds for !&dicial e!ectment: SANO*E

'4*C2ASE OF T2E LEASE+ '*O'E*T9 GE E!A" !#"E$ $urchaser of thing leased can terminate lease. E%CE&'() *$ a. lease is recorded in =egistry of $roperty b. there is stipulation in the contract of sale that purchaser shall respect the lease c. purchaser 5nows the e&istence of the lease d. sale is fictitious e. sale is made with right of repurchase G*O4N+S FO* EJECT3ENT 4N+E* A*T/ .?6>: :EL04< 1. E&piration of the period agreed upon or the period under Arts. 1/B and 1/B8( . Lac5 of payment of the price stipulated( #. 0iolation of any of the conditions agreed upon in the contract( and *. 4nauthoriGed use or service by the lessee of the thing leased. *ENTAL *EFO*3 ACT OF 1;;1 :*/A/ No/ 7.?.< Effectivity: Lanuary 1, CC . Coverage: a. All residential units of NC* and other highly urbaniGed cities, the total monthly rental for each of which does not e0ceed &72544( b. All residential units in other areas the total monthly rental for each of which does not e0ceed &42444 as of 1H1HC , without pre"udice to pre2e&isting contracts.

1. Assignment of lease or subleasing of residential units including the acceptance of boarders or bedspacers without written consent of the owner or lessor( . Arrears in payment of rent for a total of # months( #. <egitimate needs of the owner or lessor to repossess for his own use or for the use of any immediate member of his family as a residential unit, pro#ided: a. owner or immediate member not being owner of any other available residential unit within the same city or municipality( b. lease for a definite period has e&pired( c. lessor has given lessee formal notice # months in advance( and d. owner or lessor is prohibited from leasing the residential unit or allowing its use by a third person for at least 1 year. *. Absolute ownership by the lessee of another dwelling unit in the same city or municipality which may be lawfully used as his residence provided lessee is with formal notice # months in advance( +. Need of the lessor to ma5e necessary repairs in the leased premises which is the sub"ect of an e&isting order of condemnation by appropriate authorities concerned in order to ma5e said premises safe and habitable( and /. E&piration of period of the lease contract. NOTE: E&cept when the lease is for a definite period, the provisions of Art. 1/8#-1. of the Civil Code -CC., insofar as they refer to residential units, shall be suspended during the effectivity of =.A. D1/1, but other provisions of the CC and the =ules of Court on lease contracts insofar as they are not in conflict with the provisions of =.A. %o. D1/1 shall apply. %o increase in monthly rental by more than 1CI is allowed. TE*3"NAT"ON OF T2E LEASE ,f made for a determinate time, it ceases upon the day fi&ed without the need of a demand. Special 'ro#isions for -ural Lands Effect of loss d&e to fort&ito&s e#ent:

1. 0rdinary fortuitous event no reduction . E&traordinary fortuitous event a. if more than M of the fruits were lost, there shall be a reduction, unless there is a stipulation to the contrary b. if M or less, there shall be no reduction Lease d&ration : ,f not fi&ed, it shall be for all time necessary for the gathering of fruits which the whole estate may yield in 1 year, or which it may yield once. Special 'ro#isions for 1rban Lands -epairs for which urban lessor is liable: 1. special stipulation . if none, custom of the place #. in case of doubt, the repairs are chargeable against him

&ease duration:

1. ,f there is a fi&ed period, lease will be for said period. . ,f no fi&ed period, apply the following rules: a. ,f rent is paid daily: day to day b. ,f rent is paid wee5ly: wee5 to wee5 c. ,f rent is paid monthly: month to month d. ,f rent is paid yearly: year to year