ART ANNOTATION NOTES

FORM & INTERPRETATION

1458. By the contract of sale, one of the contracting parties obligates himself to transfer Characteristics of a contract of sale: *Correlate w/:
the ownership of & to deliver a determinate thing, & the other to pay therefor a price 1. Consensual perfected by mere consent - 1459, 1460, re: determinate thing
certain in money or its equivalent. 2. Bilateral parties are bound to fulfill correlative oblis toward each other - 1469, 1472, re: price
3. Onerous the thing sold is conveyed in consideration of the price & vice versa
4. Commutative thing sold is considered equivalent of the price paid & vice versa Contract to Sell a bilateral contract of conditional sale whereby the prospective seller,
5. Nominate given a special name & designation while expressly reserving the ownership of the subject prop despite delivery thereof to the
6. Principal it does not depend for its existence & validity upon another contract prospective buyer, binds himself to sell the said prop exclusively to the prospective buyer
upon fulfillment of the condition agreed upon.
Essential requisites of sale:
1. Consent or meeting of the minds (1475) Dignos v CA, A deed of sale is absolute in nature although denominated as a Deed of
2. Object or subject matter (1460) Conditional Sale where nowhere in the contract in question is a proviso or stipulation to
3. Cause or consideration (1458) the effect that title to the prop sold is reserved in the vendor until full payment of the
purchase price, nor is there a stipulation giving the vendor the right to unilaterally rescind
Absence of Price v Non-Payment of Price the contract the moment the vendee fails to pay w/in a fixed period.
Absence of price will render the contract void while non-payment of price is a resolutory
condition for w/c the seller may choose b/w rescission or specific performance. In the case of Peoples Homesite & Housing Corp v CA, it would appear that in a conditional
sale, there is no perfected contract of sale until the fulfillment of the suspensive condition.
Kinds of contract of sale: It is the willingness of the seller to sell the object w/c is dependent upon the condition. So
1. Absolute not subject to condition. Ownership is transferred upon constructive or if the condition is not fulfilled, there is NO MEETING OF THE MINDS hence there is no
actual delivery. perfected contract of sale.
2. Conditional subject to a contingency. Ownership is reserved until fulfillment of a *This gives us another difference b/w contract to sell & conditional sale. In a contract to
suspensive condition or extinguished upon the happening of a resolutory condition. sell, the sale is perfected but the transfer of ownership depends upon the fulfillment of
the suspensive condition, the full payment of the purchase price.
Contract of Absolute Sale Contract to Sell
Title passes upon delivery Title shall not pass until buyer has paid
the price
Non-payment of the price is a negative Full payment of the price is a positive
resolutory condition (b/c ownership will suspensive condition. (b/c ownership will
revert to the seller if he chooses to be vested upon the buyer only when he
rescind the contract) pays the price)
Seller loses ownership of the thing & Seller retains ownership until buyers
delivered unless the sale is rescinded fulfillment of the condition, payment
Remedy of rescission available (b/c Remedy of rescission not available
rescission found in 1191 is not based
upon the non-payment of the price but
rather on the failure of the debtor to
comply w/ an ALREADY EXISTING obli)

Contract to Sell Conditional Sale

Similar to the nature of a conditional sale,
since transfer of title is conditioned upon
the full payment of the purchase price
Full payment of the purchase price does
not automatically vest ownership or title
to the prospective buyer as the
prospective seller explicitly reserves its
transfer. Seller still has to convey title.
If seller sells the object of sale to a 3rd
person once condition is fulfilled, 3rd
persons right is better than original
Willingness of the vendee to sell is
dependent upon a condition not
necessarily the payment of the purchase
price
Fulfillment of the suspensive condition
makes the sale absolute. If there has
been previous delivery to the buyer,
ownership/title automatically transfers to
the buyer.
If seller sells the object of sale to a 3rd
person once condition is fulfilled, 3rd
persons right cannot defeat that of the

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 buyer but seller incurs damages. original owner & the latter may even ask
for reconveyance if the object is delivered
to such 3rd person.
1459. The thing must be licit & the vendor must have a right to transfer the ownership Requisites of Object: Read the cases of Artates v Urbi, Heirs of Zambales v CA for examples of sales involving
thereof at the time it is delivered. 1. It must be determinate things illicit per accidens
2. It must be licit
3. It must be w/in the commerce of men *When the thing is sold in violation of a right of 1st refusal of another person, the sale is
4. As to rights, it must be transmissible or personal valid but rescissible

2 kinds of illicit things: *Relate w/ Arts. 1347-48, 1460, CC

1. Illicit per se
2. Illicit per accidens

Seller need not own the thing to be sold, all that is required of him is the right to transfer
ownership thereof at the time it is delivered.
1460. A thing is determinate when it is particularly designated or physically segregated from all others of the same class. *Relate w/ Art. 1349, CC
1461. Things having a potential existence may be the object of the contract of sale. Things having a potential existence something that is reasonably certain to come into existence as the natural increment or usual incident of something in existence already
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition belonging to the seller
that the thing will come into existence. - The moment the thing does come into existence, title is vested upon the buyer.
The sale of a vain hope or expectancy is void.
Emptio Rei Speratae Emptio Spei
Sale of a thing not yet in existence subject to the condition that the thing will exist & on Sale of hope itself that the thing will come into existence even if the thing does not
failure of the condition, the contract becomes ineffective & hence, the buyer has no eventually exist
obligation to pay the price
Future thing is certain as to itself but uncertain as to its quantity & quality It is not certain that the thing itself will exist, much less its quantity & quality
Deals w/ a future thing Deals w/ a present thing the hope or expectancy
Subject to the condition that the thing should exist
1462. The goods w/c 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.
1463. The sole owner of a thing may sell an undivided interest therein.
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 & the buyer to buy a definite number, weight or
measure of the goods in the mass, & though the number, weight or measure of the goods
in the mass is undetermined. By such 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 & the seller is bound to make
good the deficiency from goods of the same kind & quality, unless a contrary intent
appears.
1465. Things subject to a resolutory condition may be the object of the contract of sale. *Resolutory condition condition w/c extinguishes a right already acquired
1466. In construing a contract containing characteristics of bothe the contract of sale & of Contract of sale v Contract of agency to sell Atty. Busmente: Is there a case wherein a contract is both a contract of sale & a contract
the contract of agency to sell, the essential clauses of the whole instrument shall be of agency to sell at the same time?
considered. Transaction b/w car dealerships & manufacturers. The dealers will own the cars sold by
the manufacturers but are still able to give the warranties of the manufacturers when they
sell the cars in turn.
1467. A contract for the delivery at a certain price of an art w/c the vendor in the ordinary Contract of sale v Contract for a piece of work
course of his business manufactures or procures for the genl market, whether the same is
on hand at the time or not, is a contract of sale, but if the goods are to be manufactured
specially for the customer & upon his special oprder, & not for the genl market, it is a
contract for a piece of work.
1468. If the consideration of the contract consists partly in money, & partly in another Contract of sale v Barter
thing, the transaction shall be characterized by the manifest intention of the parties. If
SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 such intention does not clearly appear, it shall be considered a barter if the value of the Value of thing given > amount of money or its equivalent = BARTER
thing given as a part of the consideration exceeds the amount of the money or its Value of thing given < amount of money or its equivalent = SALE
equivalent; o/w, it is a sale. What if equal? Manifest intention of the parties?
1469. In order that price may be considered certain, it shall be sufficient that it be so w/
reference to another thing certain, or that the determination thereof be left to the
judgment of a specified person or persons.
Should such person/s be unable or unwilling to fix it, the contract shall be inefficacious,
unless the parties subsequently agree upon the price.
If the 3rd person/s acted in BF or by mistake, the courts may fix the price.
Where such 3rd person/s are prevented from fixing the price or terms by fault of the seller
or the buyer, the party in fault may have such remedies against the party in fault as are
allowed the seller or the buyer, as the case may be.
1470. Gross inadequacy of price does not affect a contract of sale, except as it may
indicate a defect in the consent, or that the parties really intended a donation, or some
other act or contract.
1471. If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.
1472. The price of securities, grain, liquid, & other things shall also be considered certain,
when the price fixed is that w/c the thing sold would have on a definite day, or a particular
exchange or market or when an amount fixed is above or below the price on such day, or
in such exchange or market, provided said amount be certain.
1473. The fixing of the price can never be left to the discretion of one of the contracting Acceptance by one of the parties of the price fixed by the other produces a meeting of the
parties. However, if the price fixed by one of the parties is accepted by the other, the sale minds b/w the parties as to the price
is perfected.
1474. Where the price cannot be determined in accordance w/ the preceding arts, or in
any other manner, the contract is inefficacious. However, if the thing or any part thereof
has been delivered to & appropriated by the buyer, he must pay a resonable price
therefor. What is a reasonable price is a question of fact dependent on the circumstances
of each particular case.
1475. The contract of sale is perfected at the moment there is a meeting of minds upon Perfection Consummation 1358. The ff must appear in a public docu:
the thing w/c is the object of the contract & upon the price. 1. Acts & contract w/c have for their object the creation, transmission, modification or
From that moment, the parties may reciprocally demand performance, subject to the Validity of contract enforceability of the contract extuingishment of real rights over immovable prop or of an interest therein are
provisions of the lawgoverning the form of contracts. governed by Arts 1403, No. 2 & 1405;
*Even if the sale of goods, chattels or things in action is at a price not less than P500, it is 2. The cession, repudiation or renunciation of hereditary rights or of those of the
enforceable even if it is NOT in writing IF: conjugal partnership of gains;
- the buyer has accepted or received part of such goods & chattels or the evidences or 3. The power to administer prop, or any other power w/c has for its object & act
some of them appearing or w/c should appear in a public docu, or should prejudice a 3rd person;
- the buyer paid at the time some part of the purchase money. 4. The cession of actions or rights proceeding from an act appearing in a public docu.
- sale is made by auction & entry is made by the auctioneer in his sales book. All other contracts where the amount involved exceeds P500 must appear in writing, even
a private one. But sales of goods, chattels or things in action are governed by Arts 1403,
No. 2 & 1405.
1403. The ff contracts are unenforceable, unless they are ratified:
1. Those entered into the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;
2. Those that do not comply w/ the Statute of Frauds as set forth in this number. In the
ff cases an agreement hereafter shall be unenforceable by action, unless the same, or
some note or memorandum thereof, be in writing, & subscribed by the party charged,
or by his agent; evidence, therefore, of the agreement cannot be received w/o the
writing, or a secondary evidence of its contents:
a. An agreement that by its terms is not to be performed w/in a year from the
making thereof;
b. A special promise to answer for the debt, default, or miscarriage of another;
c. An agreement made in consideration of marriage, other than a mutual promise to

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016

1476. In the case of a sale by auction:
1. Where goods are put up for sale by auction in lots, each lot is the subject of a
separate contract of sale.
2. A sale by auction is perfected when the auctioneer announces its perfection by the
fall of the hammer, or in other customary manner. Until such announcement is made,
any bidder may retract his bid; & the auctioneer may w/draw the goods from the sale
unless the auction has been announced w/o reserve.
3. A right to bid may be reserved expressly by or on behalf of the seller, unless o/w
provided by law or by stipulation.
4. Where notice has not been given that a sale by auction is subject to a right to bid on
behalf of the seller, it shall not be lawful for the seller to bid himself or to employ or
induce any person to bid at such sale on his behalf or for the auctioneer, to employ or
induce any person to bid at such sale on behalf of the seller or knowingly to take any
bid from the seller or any person employed by him. Any sale contravening this rule may
be treated as fraudulent by the buyer.
1477. The ownership of the thing sold shall be transferred to the vendee upon the actual
or constructive delivery thereof.
1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser
until he has fully paid the price.
1479. A promise to buy & sell a determinate thing for a price cerain is reciprocally
demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promissor if the promise is supported by a consideration distinct from
the price.
1480. Any injury to or benefit from the thing sold, after the contract has been perfected,
SALES & LEASE reviewer Atty. Busmente
marry;
d. An agreement for the sale of goods, chattels or things in action, at a price not less
than P500, unless the buyer accept & receive part of such goods & chattels or the
evidences, or some of them, of such things in action, or pay at the time some part of
the purchase money; but when a sale is made by auction & entry is made by the
auctioneer in his sales book, at the time of the sale, of the amount & kind of prop
sold, terms of sale, price, names of the purchasers & persons on whose account the
sale is made, it is a sufficient memorandum;
e. An agreement for the leasing for a longer period than one year, or for the sale of
real prop of an interest therein;
f. A representation as to the credit of a 3rd person.
3. Those where both parties are incapable of giving consent to a contract.
If the vendee/buyer fails to pay, & the thing has already been delivered, ownership of the Addison v Felix: In order that this symbolic delivery may produce the effect of tradition, it
thing DOES NOT automatically revert back to the vendor. In this case, the vendor has 2 is necessary that the vendor shall have had such control over the thing sold that, at the
options: 1, to demand payment of the price; & 2, rescission. moment of the sale, its material delivery could have been made. It is not enough to confer
upon the purchaser the ownership & the right of possession. The thing sold must be
*Correlate w/: placed in his control. When there is no impediment whatever to prevent the thing sold
- 1496 passing into the tenancy of the purchaser by the sole will of the vendor, symbolic tradition
- 1497, re: actual delivery thru the execution of a public instrument is sufficient. But if notwithstanding the
- 1498-1501, re: constructive delivery execution of the instrument, the purchaser cannot have the enjoyment & material
tenancy of the thing & make use of it himself or thru another in his name, b/c such
tenancy & enjoyment are opposed by the interposition of another will, then fiction yields
to reality.
Norkis Distributors v CA: In all forms of delivery, it is necessary that the act of delivery
whether constructive or actual, be coupled w/ the intention of delivering the thing. The
act, w/o the intention, is insufficient.
Contract of Absolute Sale v Contract to Sell *General rule is 1477. 1478 works only if there is a stipulation to that effect. (Read: EDCA
Publishing v. Santos)
Atkins, Kroll & Co. v Cua Hian Tek: If the option is given w/o consideration, it is a mere
offer of a contract of sale, w/c is not binding until accepted. If, however, acceptance is
made before a withdrawal, it constitutes a binding contract of sale, even though the
option was not supported by a sufficient consideration.
Sanchez v Rigos: Since there may be no valid contract w/o cause or consideration, the
promisor is not bound by his promise & may accordingly, w/draw it. Pending notice of its
w/drawal, his accepted promise partakes, however, of the nature of an offer to sell, w/c, if
accepted, results in a perfected contract of sale.
Who bears the loss: 1163. Every person obliged to give something is also obliged to take care of it w/ the
San Beda College Alabang School of Law Block C Batch 2016
 from the moment of the perfection of the contract to the time of delivery, shall be
governed by Arts 1163 to 1165, & 1262.
This rule shall apply to the sale of fungible things, made independently & for a single price,
or w/o considerration of their weight, number, or measure.
Should fungible things be sold for a price fixed accdg to weight, number or measure, the
risk shall not be imputed to the vendee until they have been weighed, counted, or
measured, & delivered, unless the latter has incurred in delay.
1481. In the contract of sale of goods by description or by sample, the contract may be
rescinded if the bulk of the goods delivered do not correspond w/ the description or the
sample, & if the contract be by sample as well as by description, it is not sufficient that the
bulk of goods correspond w/ the sample if they do not also correspond w/ the description.
The buyer shall have a reasonable opportunity of comparing the bulk w/ the description or
the sample.
1482. Whenever earnest money is given in a contract of sale it shall be considered as part
of the price & as proof of the perfection of the contract.
1483. Subject to the provisions of the Statute of Frauds & of any other applicable statute,
a contract of sale may be made in writing, or by word of mouth, or partly in writing &
partly by word of mouth, or may be inferred from the conduct of the parties.
1484. In a contract of sale of personal prop the price of w/c is payable in installments, the
vendor may exercise any of the ff remedies:
1. Exact fulfillment of the obli, should the vendee fail to pay;
2. Cancel the sale, should the vendees failure to pay cover 2 or more installments.
3. Foreclose the chattel mortgage on the thing sold, if one has been constituted, should
the vendees failure to pay cover 2 or more installments. In this case, he shall have no
further action against the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void.
1485. The preceding art shall be applied to contracts purporting to be leases of personal
SALES & LEASE reviewer Atty. Busmente
1. After perfection, before delivery If basis is 1480, buyer, regardless w/n ownership has
been transferred. But if 1504, seller, if ownership is yet to be transferred. If ownership has
been transferred, buyer.
Remedies are alternative. If seller has chosen any one of the remedies enumerated herein,
it bars the election of the others.
San Beda College Alabang School of Law
proper diligence of a good father of a family, unless the law or the stipulation of the
parties requires another standard of care.
1164. The creditor has a rights to the fruits of the thing from the time the obli to deliver it
arises. However, he shall acquire no real right over it until the same has been delivered to
him.
1165. When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Art 1170, may compel the debtor to make the delivery. (1170 = right
to damages in case of fraud, negligence, delay or cototo in the performance of oblis)
1262. An obli w/c consists in the delivery of a determinate thing shall be extinguished if it
should be lost or destroyed w/o the fault of the debtor, & before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the
thing does not extinguish the obli, & he shall be responsible for damages. The same rule
applies when the nature of the obli requires the assumption of risk.
Atty. Busmente: 1480 v 1504. I dont know w/c should prevail over the other. If your client
is the seller, use 1480. If its the buyer, 1504.
Layug v IAC & Gabuya: RA 6552 governs sales of real estate on installments. x x x Where
the buyer has paid at least 2 years of installments, the buyer is entitled to the ff rights in
case he defaults in the payment of succeeding installments:
grace period to pay, w/o additional interest, the unpaid installments due w/in the
total grace period earned by him w/c is hereby fixed at the rate of one month grace
period for every year of installment payments made; Provided, that this right shall be
exercised by the buyer only once in every 5 years of the life of the contract & its
extensions, if any;
refund of cash surrender value if the contract is cancelled, the seller shall refund
to the buyer the cash surrender value of the payments on the prop equivalent to 50%
of the total payments made, &, after 5 years of installments, an additional 5% every
year but not to exceed 90% of the total payments made; Provided, that the actual
cancellation of the contract shall take 30 days from receipt by the buyer of the notice
of cancellation or the demand for rescission of the contract by a notarial act & upon
full payment of the cash surender value to the buyer.
Southern Motors v Moscoso:
Foreclosure incident to 1st remedy Foreclosure of chattel mortgage (3rd
remedy)
Procedure is those prescribed for Procedure is outlined in 14 of Chattel
ordinary civil actions, under the RoC Mortgage Law
Pascual v Universal Motors Corp: Sellers cannot go after guarantors if they have already
chosen 3rd remedy. B/c if they did, guarantors would have a right to go after the original
debtors, w/c would result in the situation the law seeks to prevent (double recovery).
Block C Batch 2016
 prop w/ option to buy, when the lessor has deprived the lessee of the possession or
enjoyment of the thing.
1486. In the cases referred to in the 2 preceding arts, 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 circumstances.
1487. The expenses for the execution & registration of the sale shall be borne by the
vendor, unless there is a stipulation to the contrary.
1488. The expropriation of prop for public use is governed by special laws.
CAPACITY TO BUY OR SELL
1489. All persons who are authorized in this Code to obligate themselves, may enter into a
contract of sale, saving the modifications contained in the ff arts.
Where necessaries are sold & delivered to a minor or other person w/o capacity to act, he
must pay a reasonable price therefor. Necessaries are those referred in Art 290.
1490. The husband & the wife cannot sell propo to each other, except:
1. When a separation of prop was agreed upon in the marriage settlements; or
2. When there has been a judicial separation of prop under Art. 191.
1491. The ff persons cannot acquire by purchase, even at public or judicial auction, either Pars. 1-3 = unenforceable, capable of ratification (b/c it involves private interests) Fiestan v CA: The prohibition mandated by par 2 of Art 1491 does not apply where the
in person or thru the mediation of another: Pars. 4-6 = void (b/c it involves public interests) sale of the prop in dispute was made under a special power inserted in or attached to the
1. The guardian, the prop of the person/s who may be under his guardianship; real estate mortgage pursuant to Act No. 3135, as amended. Under Act No. 3135, as
2. Agents, the prop whose administration or sale may have been intrusted to them, amended, a mortgagee-creditor is allowed to participate in the bidding & purchase under
unless the consent of the principal have been given; the same conditions as any other bidder.
3. Executors & administrators, the prop of the estate under administration; Act No. 3135 An Act to Regulate the Sale of Prop under Special Powers inserted in or
4. Public officers & employees, the prop of the State or of any subdivision thereof, or of Annexed to Real Estate Mortgages. (applies in cases of extrajudicial foreclosure sales)
any gocc, or institution, the administration of w/c has been intrusted to them; this
provision shall apply to judges & govt experts who, in any manner whatsoever take
part in the sale;
5. Justices, judges, prosecuting attorneys, clerks of superior & inferior courts, & other
officers & employees connected w/ the administration of justice, the prop & rights in
litigation or levied upon an execution before the court w/in whose jurisdiction or
territory they exercise their respective fxns; this prohibition includes the act of
acquiring by assignment & shall apply to lawyers, w/ respect to the prop & rights w/c
may be the object of any litigation in w/c they may take part by virtue of their
profession;
6. Any others specially dqd by law.
1492. The prohibitions in the 2 preceding arts are applicable to sales in legal redemption,
compromises & renunciations.
EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST
1493. If at the time the contract of sale is perfected, the thing w/c is the object of the
contract has been entirely lost, the contract shall be w/o any effect.
But if the thing should have been lost in part only, the vendee may choose b/w w/drawing
from the contract & demanding the remaining part, paying its price in proportion to the
total sum agreed upon.
1494. Where the parties purport a sale of specific goods, & the goods w/o the knowledge
of the seller have perished in part or have wholly or in a material part so deteriorated in
quality as to be substantially changed in character, the buyer may at his option, treat the
sale:
1. As avoided; or
2. As valid in all of the existing goods or in so much thereof as have not deteriorated, &
as binding the buyer to pay the agreed price for the goods in w/c the ownership will
pass, if the sale was divisible.
OBLIGATIONS OF THE VENDOR
Section 1. General Provisions
1495. The vendor is bound to transfer the ownership of & deliver, as well as warrant the Principal oblis of a vendor:

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 thing w/c is the object of the sale. To transfer the ownership of the determinate thing sold;
To deliver the thing, w/ its accessions & accessories, if any, in the condition in w/c
they were upon the perfection of the contract; (1537)
To warrant against eviction & against hidden defects; (1495, 1547)
To take care of the thing, pending delivery, w/ proper diligence; (1163)
To pay for the expenses of the deed of sale, unless there is a stipulation to the
contrary. (1487)

Seller need not be the owner of the thing at the time of perfection of the contract; 1459
provides that it is sufficient that he has a right to transfer the ownership thereof at the
time it is delivered.
1496. The ownership of the thing sold is acquired by the vendee frm the moment it is Ways of effecting delivery:
delivered to him in any of the ways specified in arts 1497 to 1501, or in any other manner Actual or real delivery (1497);
signifying an agreement that the possession is transferred from the vendor to the vendee. Constructive or legal delivery (1498-1501); or
Any other manner signifying an agreement that the possession is transferred to
the vendee. (1496-1499)

Delivery must be made to vendor or his authorized representative, if any.

Constructive delivery a general term comprehending all those acts w/c, although not
conferring physl possession of the thing, have been held by construction of law equivalent
to acts of real delivery.

Ways of effecting constructive delivery:

Execution of a public instrument (1498, par. 1);
Symbolic tradition or tradition symbolica (1498, par. 2);
Traditio Longa Manu (1499, par. 1);
Traditio Brevi Manu (1499, par. 2);
Traditio Constitutum Possessorium (1500);
Quasi-traditio or quasi-delivery (1501).

In all forms of delivery, it is necessary that the act be coupled w/ the interntion of
delivering the thing. For the same reason, any act, although not provided for in the
preceding arts, but accompanied by the evident intention of the vendor to deliver or of
the vendee to receive the thing sold, will be considered as constituting tradition. It is the
intention w/c is essential.
Section 2. Delivery of the Thing Sold
1497. The thing sold shall be understood as delivered, when it is placed in the control & Tradition is a derivative mode of acquiring ownership by virtue of w/c one who has the
possession of the vendee. right & intention to alienate a corporeal thing, transmits it by virtue of a just title to one
who accepts the same.
(Actual delivery)
Ownership is not transferred by contract merely but by delivery, actual or constructive.
Contracts only constitute title or rights to the transfer or acquisition of ownership, while
delivery or tradition is the method of accomplishing the same. Note however, that the
parties to the contract may agree when & on what conditions the ownership in the subject
of the contract shall pass to the buyer.

Remedies of buyer if seller fails to deliver:

Specific performance
Rescission, w/ damages

Delivery of thing sold + payment of purchase price = consummation of contract of sale.

Since perfection consummation, delivery is not essential to the perfection of the
SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016

1498. When the sale is made thru a public instrument, the execution thereof shall be
equivalent to the delivery of the thing w/c is the object to the contract, if from the deed
the contrary does not appear or cannot clearly be inferred.
W/ regard to movable prop, its delivery may also be made by the delivery of the keys of
the place or depository where it is stored or kept.
contract of sale.
1st par applies both to movable & immovable prop.
Delivery here is only PRESUMPTIVE & can be rebutted by evidence to the contrary.
A seller cannot deliver constructively if he cannot actually deliver even if he wants to.
In order to bind 3rd parties to the sale, the public instrument needs to be recorded in the
Register of Deeds & a certificate of title must be issued in the name of the buyer over the
prop. But, as b/w the buyer & seller, the execution of the public instrument is enough to
bind the 2 of them.
Addison v Felix: Symbolic delivery by the execution of a public instrument is equivalent to
actual delivery only where the thing is subject to the control of the vendor & there is no
impediment that may prevent the passing of the prop from the hands of the vendor into
those of the vendee. xxx It is not enough to confer upon the purchaser the ownership &
the right of possession. The thing sold must be placed in his control in order that it can be
said that delivery has been effected.
Note the cases of Roman v Grimalt, Norkis Distributors v CA

1499. The delivery of movable prop may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale, or if the latter already had it in his
possession for any other reason.
1500. There may also be tradition constitutum possessorium.
1501. W/ respect to incorporeal prop, the provisions of the 1st par of art 1498 shall govern.
In any other case wherein said provisions are not applicable, the placing of the titles of
ownership in the possession of the vendee or the use by the vendee of his rights, w/ the
vendors consent, shall be understood as a delivery.
1502. When goods are delivered to the buyer on sale or return to give the buyer an
option to return the goods instead of paying the price, the ownership passes to the buyer
on delivery, but he may revest the ownership in the seller by returning or tendering the
goods w/in the time fixed in the contract, or, if no time has been fixed, w/in reasonable
time.
When goods are delivered to the buyer on approval or on trial or on satisfaction, or other
similar terms, the owership therein passes to the buyer:
1. When he signifies his approval or acceptance to the seller or does any other act
adopting the transaction;
2. If he does not signify his approval or acceptance to the seller, but retains the goods
w/o giving notice of rejection, then if a time has been fixed for the return of the
goods, on the expiration of such time, &, if no time has been fixed, on the expiration
of a reasonable time. What is a reasonable time is a question of fact.
1503. When there is a contract of sale of specific goods, the seller may, by the terms of the
contract, reserve the right of possession or ownership in the goods until certain conditions
have been fulfilled. The right of possession or ownership may be thus reserved
Symbolic tradition when parties, to effect delivery, make use of a token symbol to
represent the thing delivered. (e.g. Delivery of car keys)
Traditio Longa Manu takes place by mere consent or agreement of the contracting
parties IF the thing sold cannot be transferred to the possession vendee at the time of the
sale (e.g. A buys Bs car, however, such car is the subject of a lease contract b/w B & C)
Traditio Brevi Manu happens when the vendee has already the possession of the thing
sold by virtue of another title (e.g. Lessor sells thing leased to lessee)
Traditio Constitutum Possessorium takes place when the vendor continues in possession
of the prop sold not as owner but in some other capacity. (e.g. A sells his land to B. Instead
of delivering the land to B, A continues to occupy the land as Bs tenant.)
Quasi-traditio delivery of incorporeal things thru:
Execution of a public instrument;
If (1) is inapplicable, the placing of titles of ownership in the possession of the
vendee; or
Allowing vendee to use his rights as new owner w/ the consent of the vendor.
Sale or Return a contract by w/c prop is sold but the buyer, who becomes the owner of
the prop on delivery, has the option to return the same to the seller instead of paying the
price. If buyer does not return w/in the time fixed in the contract, or if no time has been
fixed, w/in reasonable time, sale is absolute & he is liable to pay the seller.
Sale on Trial or Approval a contract in the nature of an option to purchase if the goods
prove satisfactory, the approval of the buyer being a condition precedent. *Buyer cannot
accept part & reject the rest of the goods.
In both cases, if the goods are injured or damaged substantially thru the negligence or
misuse of the buyer, his right to return is lost & the sale becomes absolute.
Sale or Return Sale on Trial/Approval
Subject to resolutory condition Subject to suspensive condition
Depends entirely on the will of the buyer Depends on the character or quality of
the goods
Ownership of the goods passes to the Ownership remains in the seller until the
buyer on delivery & subsequent return of buyer signifies his approval or acceptance
the goods reverts ownership in the seller. to the seller
Risk of loss/injury rests upon buyer Risk still remains w/ the seller except
when buyer is at fault or there is a
contrary agreement.
GENERAL RULE: ownership in the goods sold passes to the buyer upon their delivery to the carrier. This is so b/c the carrier is presumed to be a bailee for the buyer.
EXCEPTIONS: 1st, 2nd, & 3rd pars of 1503

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 notw/standing the delivery of the goods to the buyer or to a carrier or other bailee for the
purpose of transmission to the buyer.
Where goods are shipped, & by the bill of lading the goods are deliverable to the seller or
his agent, or to the order of the seller or of his agent, the seller thereby reserves the
ownership in the goods. But, if except for the form of the bill of lading, the ownership
would have passed to the buyer on shipment of goods, the sellers prop in the goods shall
be deemed only for the purpose of securing performance by the buyer of his oblis under
the contract.
Where goods are shipped, & by the bill of lading the goods are deliverable to order of the
buyer or of his agent, but possession of the bill of lading is retained by the seller or his
agent, the seller thereby reserves a right to the possession of the goods as against the
buyer.
Where the seller of goods draws on the buyer for the price & transmits the bill of
exchange & bill of lading together to the buyer to secure acceptance or payment of the bill
of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of
exchange, & if he wrongfully retains the bill of lading he acquires no added right thereby.
If, however, the bill of lading provides that the goods are deliverable to the buyer or to the
order of the buyer, or is indorsed in blank, or to the buyer by the consignee named
therein, one who purchases in GF, for value, the bill of lading or goods from the buyer will
obtain the ownership in the goods, although the bill of exchange has not been honored,
provided that such purchaser has received delivery of the bill of lading indorsed by the
consignee named therein, or of the goods, w/o notice of the facts making tbhe transfer
wrongful.
1504. Unless o/w agreed, the goods remain at the sellers risk until the ownership therein
is transferred to the buyer, but when the ownership therein is transferred to the buyer the
goods are at the buyers risk whether actual delivery has been made or not, except that:
1. Where delivery of the goods has been made to the buyer or to a bailee for the buyer,
in pursuance of the contract & the ownership in the goods has been retained by the
seller merely to secure performance by the buyer of his oblis under the contract, the
goods are at the buyers risk from the time of such delivery;
2. Where actual delivery has been delayed thru the fault of either the buyer or seller
the goods are at the risk of the party in fault.
1505. Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, & who does not sell them under authority or w/ the consent of the
owner, the buyer acquires no better title to the goods than the seller had, unless the
owner of the goods is by his conduct precluded from denying the sellers authority.
Nothing in this Title, however, shall effect:
1. The provisions of any factors acts, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true
owner thereof;
2. The validity of any contract of sale under statutory power of sale or under the order
of a court of competent jurisdiction;
3. Purchases made in a merchants store, or in fairs, markets, in accordance w/ the
Code of Commerce & special laws.
1506. Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he
SALES & LEASE reviewer Atty. Busmente
*BILL OF LADING - A docu acknowledging the receipt of goods by a carrier or by the shipper's agent & the contract for the transportation of those goods; a docu that indicates the
receipt of goods for shipment & that is issued by a person engaged in the business of transporting or forwarding goods. (BLD 9th Ed.)
Scenarios wherein SELLER reserves the right of possession or ownership
1st Scenario (2nd par): By the BoL the goods are DELIVERABLE TO THE SELLER OR HIS ORDER for the purpose of retaining ownership
Effects:
1. The carrier is deemed as a bailee of the SELLER, not the buyer
2. The seller will bear the risk of loss, res perit domino
3. The seller may retain the goods until the buyer performs his obli
4. The seller may dispose of the goods to a 3rd person (but he will be liable for damages; the 2nd buyer though obtains a better right against the original buyer.)
*The BoL may be deliverable to the seller or his order but his purpose is not to retain ownership but to secure the performance of the buyers obli. In such cases, the buyer will bear the
risk of loss & he will also have an action based on ownership against anyone except an innocent purchaser for value of the BoL from the consignee.
2nd Scenario (3rd par): BoL is DELIVERABLE TO THE ORDER OF THE BUYER, but the SELLER RETAINS POSSESSION OF THE BoL.
Effect:
1. Buyer, even if the BoL is deliverable to him, cannot recover the goods until he presents the BoL (w/c he cannot do KASI NGA na kay Seller ang putang inang BoL)
2. Who bears the risk of loss? DI KO ALAM PUTA
De Leon: A 3rd person may be named as consignee in the BoL. In this case, the buyer can only obtain the goods when the consignee surrenders the BoL to the carrier/buyer or he
indorses the bill in blank or specially to the buyer. The consignee will only do so upon payment of the price (b/c if he would do so nonetheless, then USELESS! Seller might as well save
himself the trouble by naming the buyer the consignee in the BoL)
3rd Scenario (4th par): Seller transmits the BoL, together w/ a bill of exchange. (In the BoE, drawer & payee is seller, drawee is buyer)
Effects:
1. Title is retained by the seller until the BoE is paid.
2. Delivery of goods is conditioned upon the payment/acceptance of the BoE
3. If BoE is not paid, buyer is BOUND to return the BoL.
4. If the buyer wrongfully retains the BoL, he acquires no additional right thereby.
5. If the BoL names the buyer as consignee or is indorsed in blank or specially to the buyer, a purchaser in GF for value of the BoL from the buyer will obtain ownership in the
goods even if BoE is not honored.
(De Leon: safe move for the seller is to send the BoL & BoE to a 3rd person b/c if sent to the buyer, he may obtain the goods & forget about honoring the BoE w/c would compel the
seller to enter upon litigation)
This provision states 2 exceptions to the principle of Res Perit Domino (it is the owner of
the thing who bears the risk). In the 1st par, the owner is the seller but merely to secure
the performance of the buyer of his oblis. In this par, the buyer is the one who bears the
risk. In the 2nd par, the risk is borne by the party at fault.
San Beda College Alabang School of Law Block C Batch 2016
 buys them in good faith, for value, & w/o notice of the seller's defect of title.
1507. A docu of title in w/c 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 docu is a nego docu of title.
1508. A nego docu of title may be negod by delivery:
(1) Where by the terms of the docu the carrier, warehouseman or other bailee issuing the
same undertakes to deliver the goods to the bearer; or
(2) Where by the terms of the docu the carrier, warehouseman or other bailee issuing the
same undertakes to deliver the goods to the order of a specified person, & such
person or a subsequent indorsee of the docu has indorsed it in blank or to the bearer.
Where by the terms of a nego docu of title the goods are deliverable to bearer or where a
nego docu of title has been indorsed in blank or to bearer, any holder may indorse the
same to himself or to any specified person, & in such case the docu shall thereafter be
negod only by the indorsement of such indorsee.
1509. A nego docu of title may be negod by the indorsement of the person to whose
order the goods are by the terms of the docu deliverable. Such indorsement may be in
blank, to bearer or to a specified person. If indorsed to a specified person, it may be again
negod by the indorsement of such person in blank, to bearer or to another specified
person.
Subsequent negotiations may be made in like manner.
1510. If a docu of title w/c contains an undertaking by a carrier, warehouseman or other
bailee to deliver the goods to bearer, to a specified person or order of a specified person
or w/c contains words of like import, has placed upon it the words "not nego," "non-nego"
or the like, such docu may nevertheless be negod by the holder & is a nego docu of title
w/in the meaning of this Title. But nothing in this Title contained shall be construed as
limiting or defining the effect upon the obligations of the carrier, warehouseman, or other
bailee issuing a docu of title or placing thereon the words "not nego," "non-nego," or the
like.
1511. A docu of title w/c is not in such form that it can be negod by delivery may be
transferred by the holder by delivery to a purchaser or donee. A non-nego docu cannot be
negod & the indorsement of such a docu gives the transferee no additional right.
1512. A nego docu of title may be negod:
(1) By the owner thereof; or
(2) By any person to whom the possession or custody of the docu has been entrusted by
the owner, if, by the terms of the docu the bailee issuing the docu undertakes to
deliver the goods to the order of the person to whom the possession or custody of
the docu has been entrusted, or if at the time of such entrusting the docu is in such
form that it may be negod by delivery.
1513. A person to whom a nego docu of title has been duly negod acquires thereby:
(3) Such title to the goods as the person negotiating the docu to him had or had ability
to convey to a purchaser in good faith for value & also such title to the goods as the
person to whose order the goods were to be delivered by the terms of the docu had
or had ability to convey to a purchaser in good faith for value; &
(4) The direct obligation of the bailee issuing the docu to hold possession of the goods
for him according to the terms of the docu as fully as if such bailee had contracted
directly w/ him.
1514. A person to whom a docu of title has been transferred, but not negod, acquires
thereby, as against the transferor, the title to the goods, subject to the terms of any
agreement w/ the transferor.
If the docu is non-nego, such person also acquires the right to notify the bailee who issued
the docu of the transfer thereof, & thereby to acquire the direct obligation of such bailee
to hold possession of the goods for him according to the terms of the docu.
Prior to the notification to such bailee by the transferor or transferee of a non-nego docu
of title, the title of the transferee to the goods & the right to acquire the obligation of such

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 bailee may be defeated by the levy of an attachment of execution upon the goods by a
creditor of the transferor, or by a notification to such bailee by the transferor or a
subsequent purchaser from the transferor of a subsequent sale of the goods by the
transferor.
1515. Where a nego docu of title is transferred for value by delivery, & the indorsement of
the transferor is essential for negon, the transferee acquires a right against the transferor
to compel him to indorse the docu unless a contrary intention appears. The negon shall
take effect as of the time when the indorsement is actually made.
1516. A person who for value negotiates or transfers a docu of title by indorsement or
delivery, including one who assigns for value a claim secured by a docu of title unless a
contrary intention appears, warrants:
1. That the docu is genuine;
2. That he has a legal right to negotiate or transfer it;
3. That he has knowledge of no fact w/c would impair the validity or worth of the docu; &
4. That he has a right to transfer the title to the goods & that the goods are merchantable
or fit for a particular purpose, whenever such warranties would have been implied if the
contract of the parties had been to transfer w/o a docu of title the goods represented
thereby.
1517. The indorsement of a docu of title shall not make the indorser liable for any failure
on the part of the bailee who issued the docu or previous indorsers thereof to fulfill their
respective obligations.
1518. The validity of the negon of a nego docu of title is not impaired by the fact that the
negon was a breach of duty on the part of the person making the negon, or by the fact
that the owner of the docu was deprived of the possession of the same by loss, theft,
fraud, accident, mistake, duress, or conversion, if the person to whom the docu was
negod or a person to whom the docu was subsequently negod paid value therefor in
good faith w/o notice of the breach of duty, or loss, theft, fraud, accident, mistake, duress
or conversion.
1519. If goods are delivered to a bailee by the owner or by a person whose act in
conveying the title to them to a purchaser in good faith for value would bind the owner &
a nego docu of title is issued for them they cannot thereafter, while in possession of such
bailee, be attached by garnishment or o/w or be levied under an execution unless the
docu be first surrendered to the bailee or its negon enjoined. The bailee shall in no case
be compelled to deliver up the actual possession of the goods until the docu is
surrendered to him or impounded by the court.
1520. A creditor whose debtor is the owner of a nego docu of title shall be entitled to such
aid from courts of appropriate jurisdiction by injunction & o/w in attaching such docu or in
satisfying the claim by means thereof as is allowed at law or in equity in regard to property
w/c cannot readily be attached or levied upon by ordinary legal process.
1521. Whether it is for the buyer to take possession of the goods or of the seller to send
them to the buyer is a question depending in each case on the contract, express or
implied, b/w the parties. Apart from any such contract, express or implied,
or usage of trade to the contrary, the place of delivery is the seller's place of business if he
has one, & if not his residence; but in case of a contract of sale of specific goods, w/c to
the knowledge of the parties when the contract or the sale was made were in some other
place, then that place is the place of delivery.
Where by a contract of sale the seller is bound to send the goods to the buyer, but no time
for sending them is fixed, the seller is bound to send them w/in a reasonable time.
Where the goods at the time of sale are in the possession of a third person, the seller has
not fulfilled his obligation to deliver to the buyer unless & until such third person
acknowledges to the buyer that he holds the goods on the buyer's behalf.
Demand or tender of delivery may be treated as ineffectual unless made at a reasonable
hour. What is a reasonable hour is a question of fact.

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 Unless o/w agreed, the expenses of & incidental to putting the goods into a deliverable
state must be borne by the seller.
1522. Where the seller delivers to the buyer a quantity of goods less than he contracted to
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered,
knowing that the seller is not going to perform the contract in full, he must pay for them
at the contract rate. If, however, the buyer has used or disposed of the goods delivered
before he knows that the seller is not going to perform his contract in full, the buyer shall
not be liable for more than the fair value to him of the goods so received.
Where the seller delivers to the buyer a quantity of goods larger than he contracted to
sell, the buyer may accept the goods included in the contract & reject the rest. If the buyer
accepts the whole of the goods so delivered he must pay for them at the contract rate.
Where the seller delivers to the buyer the goods he contracted to sell mixed w/ goods of a
different description not included in the contract, the buyer may accept the goods w/c are
in accordance w/ the contract & reject the rest.
In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject
the whole of the goods.
The provisions of this art are subject to any usage of trade, special agreement, or course of
dealing b/w the parties.
1523. Where, in pursuance of a contract of sale, the seller is authorized or required to
send the goods to the buyer, delivery of the goods to a carrier, whether named by the
buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of
the goods to the buyer, except in the cases provided for in art 1503, first, second & third
paragraphs, or unless a contrary intent appears.
Unless o/w authorized by the buyer, the seller must make such contract w/ the carrier on
behalf of the buyer as may be reasonable, having regard to the nature of the goods & the
other circumstances of the case. If the seller omits so to do, & the goods are lost or
damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a
delivery to himself, or may hold the seller responsible in damages.
Unless o/w agreed, where goods are sent by the seller to the buyer under circumstances
in w/c the seller knows or ought to know that it is usual to insure, the seller must give such
notice to the buyer as may enable him to insure them during their transit, &, if the seller
fails to do so, the goods shall be deemed to be at his risk during such transit.
1524. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid
him the price, or if no period for the payment has been fixed in the contract.
1525. The seller of goods is deemed to be an unpaid seller w/in the meaning of this Title:
(1) When the whole of the price has not been paid or tendered;
(2) When a bill of exchange or other nego instrument has been received as conditional
payment, & the condition on w/c it was received has been broken by reason of the
dishonor of the instrument, the insolvency of the buyer, or o/w.
In arts 1525 to 1535 the term "seller" includes an agent of the seller to whom the bill of
lading has been indorsed, or a consignor or agent who has himself paid, or is directly
responsible for the price, or any other person who is in the position of a seller.
1526. Subject to the provisions of this Title, notwithstanding that the ownership in the
goods may have passed to the buyer, the unpaid seller of goods, as such, has:
(1) A lien on the goods or right to retain them for the price while he is in possession of
them;
(2) In case of the insolvency of the buyer, a right of stopping the goods in transitu after
he has parted w/ the possession of them;
(3) A right of resale as limited by this Title;
(4) A right to rescind the sale as likewise limited by this Title.
Where the ownership in the goods has not passed to the buyer, the unpaid seller has, in
addition to his other remedies a right of withholding delivery similar to & coextensive w/
his rights of lien & stoppage in transitu where the ownership has passed to the buyer.
1527. Subject to the provisions of this Title, the unpaid seller of goods who is in possession
SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 of them is entitled to retain possession of them until payment or tender of the price in the
ff cases, namely:
(1) Where the goods have been sold w/o any stipulation as to credit;
(2) Where the goods have been sold on credit, but the term of credit has expired;
(3) Where the buyer becomes insolvent.
The seller may exercise his right of lien notwithstanding that he is in possession of the
goods as agent or bailee for the buyer.
1528. Where an unpaid seller has made part delivery of the goods, he may exercise his
right of lien on the remainder, unless such part delivery has been made under such
circumstances as to show an intent to waive the lien or right of retention.
1529. The unpaid seller of goods loses his lien thereon:
(1) When he delivers the goods to a carrier or other bailee for the purpose of
transmission to the buyer w/o reserving the ownership in the goods or the right to
the possession thereof;
(2) When the buyer or his agent lawfully obtains possession of the goods;
(3) By waiver thereof.
The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that
he has obtained judgment or decree for the price of the goods.
1530. Subject to the provisions of this Title, when the buyer of goods is or becomes
insolvent, the unpaid seller who has parted w/ the possession of the goods has the right of
stopping them in transitu, that is to say, he may resume possession of the goods at any
time while they are in transit, & he will then become entitled to the same rights in regard
to the goods as he would have had if he had never parted w/ the possession.
1531. Goods are in transit w/in the meaning of the preceding art:
(1) From the time when they are delivered to a carrier by land, water, or air, or other
bailee for the purpose of transmission to the buyer, until the buyer, or his agent in
that behalf, takes delivery of them from such carrier or other bailee;
(2) If the goods are rejected by the buyer, & the carrier or other bailee continues in
possession of them, even if the seller has refused to receive them back.
Goods are no longer in transit w/in the meaning of the preceding art:
(1) If the buyer, or his agent in that behalf, obtains delivery of the goods before their
arrival at the appointed destination;
(2) If, after the arrival of the goods at the appointed destination, the carrier or other
bailee acknowledges to the buyer or his agent that he holds the goods on his behalf
& continues in possession of them as bailee for the buyer or his agent; & it is
immaterial that further destination for the goods may have been indicated by the
buyer;
(3) If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or
his agent in that behalf.
If the goods are delivered to a ship, freight train, truck, or airplane chartered by the buyer,
it is a question depending on the circumstances of the particular case, whether they are in
the possession of the carrier as such or as agent of the buyer.
If part delivery of the goods has been made to the buyer, or his agent in that behalf, the
remainder of the goods may be stopped in transitu, unless such part delivery has been
under such circumstances as to show an agreement w/ the buyer to give up
possession of the whole of the goods.
1532. The unpaid seller may exercise his right of stoppage in transitu either by obtaining
actual possession of the goods or by giving notice of his claim to the carrier or other bailee
in whose possession the goods are. Such notice may be given either to the person in actual
possession of the goods or to his principal. In the latter case the notice, to be effectual,
must be given at such time & under such circumstances that the principal, by the exercise
of reasonable diligence, may prevent a delivery to the buyer.
When notice of stoppage in transitu is given by the seller to the carrier, or other bailee in
possession of the goods, he must redeliver the goods to, or according to the directions of,
SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 the seller. The expenses of such delivery must be borne by the seller. If, however, a nego
docu of title representing the goods has been issued by the carrier or other bailee, he shall
not be obliged to deliver or justified in delivering the goods to the seller unless such docu
is first surrendered for cancellation.
1533. Where the goods are of perishable nature, or where the seller expressly reserves
the right of resale in case the buyer should make default, or where the buyer has been in
default in the payment of the price for an unreasonable time, an unpaid seller having a
right of lien or having stopped the goods in transitu may resell the goods. He shall not
thereafter be liable to the original buyer upon the contract of sale or for any profit made
by such resale, but may recover from the buyer damages for any loss occasioned by the
breach of the contract of sale.
Where a resale is made, as authorized in this art, the buyer acquires a good title as against
the original buyer.
It is not essential to the validity of resale that notice of an intention to resell the goods be
given by the seller to the original buyer.
But where the right to resell is not based on the perishable nature of the goods or upon an
express provision of the contract of sale, the giving or failure to give such notice shall be
relevant in any issue involving the question whether the buyer had been in default for an
unreasonable time before the resale was made.
It is not essential to the validity of a resale that notice of the time & place of such resale
should be given by the seller to the original buyer.
The seller is bound to exercise reasonable care & judgment in making a resale, & subject
to this requirement may make a resale either by public or private sale. He cannot,
however, directly or indirectly buy the goods.
1534. An unpaid seller having the right of lien or having stopped the goods in transitu, may
rescind the transfer of title & resume the ownership in the goods, where he expressly
reserved the right to do so in case the buyer should make default, or where the buyer has
been in default in the payment of the price for an unreasonable time. The seller shall not
thereafter be liable to the buyer upon the contract of sale, but may recover from the
buyer damages for any loss occasioned by the breach of the contract.
The transfer of title shall not be held to have been rescinded by an unpaid seller until he
has manifested by notice to the buyer or by some other overt act an intention to rescind.
It is not necessary that such overt act should be communicated to the buyer, but the
giving or failure to give notice to the buyer of the intention to rescind shall be relevant in
any issue involving the question whether the buyer had been in default for an
unreasonable time before the right of rescission was asserted.
1535. Subject to the provisions of this Title, the unpaid seller's right of lien or stoppage in
transitu is not affected by any sale, or other disposition of the goods w/c the buyer may
have made, unless the seller has assented thereto.
If, however, a nego docu of title has been issued for goods, no seller's lien or right of
stoppage in transitu shall defeat the right of any purchaser for value in good faith to whom
such docu has been negod, whether such negon be prior or subsequent to the
notification to the carrier, or other bailee who issued such docu, of the seller's claim to a
lien or right of stoppage in transitu.
1536. The vendor is not bound to deliver the thing sold in case the vendee should lose the
right to make use of the terms as provided in art 1198.
1537. The vendor is bound to deliver the thing sold & its accessions & accessories in the
condition in w/c they were upon the perfection of the contract.
All the fruits shall pertain to the vendee from the day on w/c the contract was perfected.
1538. In case of loss, deterioration or improvement of the thing before its delivery, the
rules in art 1189 shall be observed, the vendor being considered the debtor.
1539. The obligation to deliver the thing sold includes that of placing in the control of the
vendee all that is mentioned in the contract, in conformity w/ the ff rules:

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016
 If the sale of real estate should be made w/ a statement of its area, at the rate of a certain
price for a unit of measure or number, the vendor shall be obliged to deliver to the
vendee, if the latter should demand it, all that may have been stated in the contract; but,
should this be not possible, the vendee may choose b/w a proportional reduction of the
price & the rescission of the contract, provided that, in the latter case, the lack in the area
be not less than one-tenth of that stated.
The same shall be done, even when the area is the same, if any part of the immovable is
not of the quality specified in the contract.
The rescission, in this case, shall only take place at the will of the vendee, when the
inferior value of the thing sold exceeds 1/10th of the price agreed upon.
Nevertheless, if the vendee would not have bought the immovable had he known of its
smaller area of inferior quality, he may rescind the sale.
1540. If, in the case of the preceding art, there is a greater area or number in the
immovable than that stated in the contract, the vendee may accept the area included in
the contract & reject the rest. If he accepts the whole area, he must pay for the same at
the contract rate.
1541. The provisions of the two preceding arts shall apply to judicial sales.
1542. In the sale of real estate, made for a lump sum & not at the rate of a certain sum for
a unit of measure or number, there shall be no increase or decrease of the price, although
there be a greater or less area or number than that stated in the contract.
The same rule shall be applied when two or more immovables as sold for a single price;
but if, besides mentioning the boundaries, w/c is indispensable in every conveyance of
real estate, its area or number should be designated in the contract, the vendor shall
be bound to deliver all that is included w/in said boundaries, even when it exceeds the
area or number specified in the contract; &, should he not be able to do so, he shall suffer
a reduction in the price, in proportion to what is lacking in the area or number, unless the
contract is rescinded b/c the vendee does not accede to the failure to deliver what has
been stipulated.
1543. The actions arising from arts 1539 & 1542 shall prescribe in six months, counted
from the day of delivery.

SALES & LEASE reviewer Atty. Busmente San Beda College Alabang School of Law Block C Batch 2016