University of San Jose-Recoletos

School of Law

Sales - Judge Ygnacio

Quiz – June 23, 2018

1. As a sign of his loyalty and gratitude for their everlasting relationship, Bert gave to his
girlfriend, Angelie, a diamond ring worth P1 million. In turn, his girlfriend gave to him boxer
shorts worth P1,500. Is the transaction a valid contract?
Answer: Yes, the transaction it is a valid contract.

It is possible that a donation, not a sale, was really intended. In such a case, the parties may prove
that the low price is sufficiently explained by the consideration of liberality.

Based on the foregoing facts, act by which Bert the owner of the P1 million worth of diamond ring,
voluntarily transfers the possession of the same as a sign of his loyalty and gratitude. This is sufficient
proof that the price is by the consideration of liberality, a gift. The fact that Angelie gave P1,500 worth of
boxer, which musch lower compared to that of diamond ring is immaterial since the intent clearly, is not
that of a sale but that of a donation.

From the foregoing, it can be deduced that, the contract is valid.

2. Jes Soon sold his antique musical Organ to Ruby Cas and it was agreed that the latter will fix
the price a month after. At the appointment time, Ruby names the price – P50,000 and Jes
agreed. Is the sale perfected?
Answer: Yes, the sale is perfected.

The law provides, that the contract of sale is perfected at the moment there is a meeting of the
minds upon the thing which is the object of the contractt and upon the price. From that moment, the
parties may reciprocally demand performance, subject to the provisions of the law governing the forms of
contract. (Art.1475, NCC). Moreover, the law explicitly provides that: the fixing of the price can never be
left to the discretion of one of the contracting parties. However, if the price fixed by one of the party is
accepted by the other, the sale is perfected.

In the case at bench, there was meeting of the minds between Jes and Ruby when they agreed that
Ruby will fix the price. The moment Jes agreed to P50,000 which was named by Ruby at the appointed
time, the sale was perfect.

Therefore, there is perfection of the sale.

3. A) If the price is simulated, is the sale valid?

Answer: Sale is void, unless it could be shown that the parties intended a donation or some other act of
liberality. Article 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.

B) if the price is very low, is the sale valid?

Answer: The general rule is mere inadequacy of the price does not affect validity of the sale. Except
where the price is so low as to be “shocking to conscience”, sale may be set aside.

4. Kenny sold to Roach a parcel of land, which at the time of sale did not belong to the former. Is
the transaction valid?
Answer: Yes, the transaction is valid.

He need not be the owner of at the time of the perfection; but he must be the owner at the time of
the delivery, because it is only when the object is delivered that the vendee acquires ownership. (Art.
1459, Civil Code). In Martin vs. Reyes, 91 Phil 666, it was said that the vendor need not own the property at
the time of the execution of the contract. It is sufficient that he is the owner at the time the obligation to
deliver arises.

In conclusion, the transaction between Kenny and Roach is valid.

5. A) Explain the difference between emptio rei sperati and emptio spei.
Answer: The sale of a thing having a potential existence (emptio rei speratae) and the sale of hope
(emptio spei), both recognized in Art 1461 of the CC, may be distinguished from each other in the following
ways:

Emptio rei speratae refers the sale of a thing having the potential existence, whereas Emptio spei, refers
sale of a mere hope of expectancy.

In Emptio rei speratae, the uncertainty is with regard to the quantity and quality but not with regard to the
existence of the thing while in Emptio spei, the uncertainty of the thing is with regard to its existence.

In Emptio rei speratae, the contract deals with a future thing, whereas in Emptio spei the contract deals
with a present thing – the hope or expectancy.
 University of San Jose-Recoletos
School of Law

Sales - Judge Ygnacio

Quiz – June 23, 2018

Finally, in Emptio rei speratae , the sale is subject to the condition that the thing should exist, so that if it
does not, there is no contract for lack of essential requisite while in Emptio spei, the sale produces effects
even though the thing itself does not come into existence, since the subject matter is the hope itself.

B) Give at least five(5) examples of things having a potential existence.

Answer: The following things having a potential existence:
a. young animals not yet in existence or still ungrown fruits.
b. the wine that a particular vineyard is expected to produce.
c. the wool that shall, thereafter, grow upon a sheep
d. the expected goodwill of a business enterprise
e. of the grain the field is expected to yield

6. A) Mary owns a house and lot located in Prince Court Town Mandaue City. Can Mary sell 1/3 of
the said house to Pedrie?
Answer: Yes. Mary can sell 1/3 of the said house to Pedro.

The law provides, that Seller must be owner or authorized by owner of thing sold. It is essential in
order for a sale to be valid that the vendor must be able to transfer ownership (Art. 1458.) and, therefore,
he must be the owner or at least must be authorized by the owner of the thing sold. This rule is in accord
with a well-known principle of law that one can not transmit or dispose of that which he does not have —
nemo dat quod non-habet.

In the given facts, Mary is the owner of said property, it follows therefore that she has the right to
sell and legally transfer the ownership thereof.

Indubitably, the sale is valid.

B) Distinguish a contract of sale from an agency to sell.

Answer:
(1) In a contract of sale, the buyer pays the price, while in a contract of agency to sell, the agent
does not pay;
(2) In a contract of sale, the buyer acquires ownership over the object of the contract; in an
agency to sell, the agent does not;
(3) In a contract to sell, the seller warrants while in a contract of agency to sell, the agent does
not, unless he agrees.

7. Aga requested his friend to construct a house for him amounting to 6 Million Pesos and the
latter agreed. Is the contract a contract of sale or a contract for a piece of work?
Answer: Its is contract for a piece of work.

Under Article 1713 of the Civil Code, a construction contract falls within the general classification of
a contract for a piece of work whereby the contractor “binds himself to execute a piece of work for the
employer, in consideration of a certain price or compensation. The contractor may either employ only his
labor or skill, or also furnish the material.”

Given the prevailing facts, Aga made and agreement with his friend to construct his house. In the
construction of the house contractor may either employ his labor or skill, or also furnish the material.

In the light the circumstances, it can be said that the contract is for piece of work.

8. Herson sold to Hardy 3 kilos of Shabu in the amount of P500,000. Herson however failed to
deliver the Shabu on the agreed date. Aggrieved, Hardy filed a case in court against Herson for
violations of the contract of sale. Will the action prosper?
Answer: No. The action will not prosper.

The law explicitly provides under Article 1459, Civil Code that the thing must be licit. It means that
the object of a contract of sale must be something within the commerce of man; something that can be
sold, mortgaged or be the object of contract.

From the facts givin, it is noteworthy that Herson is selling Shabu, a prohibited drugs. An illegal contract is
a contract that was made for an illegal purpose and, consequently, violates the law.

Undoubtedly, the case is not tenable.

9. A) When can you consider a price as certain?

Answer: The price is certain in the following cases:
 University of San Jose-Recoletos
School of Law

Sales - Judge Ygnacio

Quiz – June 23, 2018

1. If the parties have fixed or agreed upon a definite amount; NOTE: The fixing of the price can
never be left to the discretion of one of the contracting parties. However if the price fixed by one
of the parties is accepted by the other, the sale is perfected.
2. If it be certain with reference to another thing certain
3. If the determination of the price is left to the judgment of a specified person or persons even
before such determination
4. In the cases provided under Art. 1472 NCC

B) When is a thing considered determinate?

Answer: According to Article 1460 of the Civil Code, A thing is determinate when it is particularly
designated or physically segregated from all others of the same class.

A thing must be determinate or specific, but it is not essential that at the time of perfection, the
object be already specific. It is sufficient that it be capable of being determinate without need of any new
agreement. Thus, there can be a sale of 20 kilos of sugar of a named quality.

10. A) What is a contract of sale?

Answer: By the contract of sale, one of the contracting party obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional. ART. 1458, Civil Code.

B) Enumerate and briefly explain the three(3) elements of a Contract of Sale.

Answer: The elements of the Contract of Sale are:
1. Consent or meeting of the minds – (Ex: consent to transfer ownership I exchange for the price.

2. Determinate subject matter (generally there is no sale of generic thing; moreover, if the parties
differ as to the object, there can be no meeting of the minds.

3. Price certain in money or its equivalent – (This is the cause or consideration) (The price need
not be in money.)

Without which there can be no valid sale.

Contract of Sale distinguished from Contract to Sell

In Contract of Sale:
1. The non-payment of price is a resolutory condition, occurrence of such puts an end to a transaction that
once upon a time existed.
2. Title to the property generally passes to the buyer upon delivery.
3. After delivery has been made, the seller has lost ownership and cannot recover it unless the contract is
resolved or rescinded.

While in Contract to Sell

1. The payment in full of the price is a positive suspensive condition. Hence, if the price is not paid, it is as if
the obligation of the seller to deliver and to transfer ownership never became effective and binding.
2. Ownership is retained by the seller, regardless of delivery and is not to pass until full payment of the price.
3. Since the seller retains ownership, despite delivery, he is enforcing and not rescinding the contract if he
seeks to oust the buyer for failure to pay.