SALES

Chapter 1 – Nature and Form of the Contract

CHAPTER 1
c. Onerous – to acquire the rights, valuable
NATURE AND FORM OF THE CONTRACT consideration must be given.

Article 1458 . By contract of sale one of the d. Commutative – the values exchanged are almost
contracting parties obligate himself to transfer the equivalent to each other.
ownership and to deliver a determinate thing, and
Note: By way of exception, some contracts are aleatory.
the other to pay therefore a price certain in money or
Ex: Sale of a genuine sweepstakes ticket.
its equivalent.
e. Principal (as distinguished from accessory
Sales – a contract where one party (seller or vendor)
contract) – there is no necessity for it to depend
obligates himself to transfer the ownership of and to deliver
upon the existence of another valid contract. (Ex:
a determinate thing, while the other party (buyer or vendee)
Contracts of pledge and mortgage)
obligates himself to pay for said thing a price certain in
money or its equivalent.
f. Nominate (as distinguished from an innominate
Under Roman Law, sale was termed avenditio. Today the contract) – a special designation or name. (Ex: the
contract of sale)
French refer to the contract as a venta
Elements of the Contract of Sale
 The vendor need not be the owner at the time the
sale is perfected. It is sufficient that he is the owner a. Essential elements (those without which there
at the time the thing sold is deliver. can be no valid sale)

 Suppose Art. 1458 did not specify that the seller 1. Consent or meeting of the minds – (Ex:
must transfer the ownership of the object, he still consent to transfer ownership I exchange for
have this obligation for after all the transfer of the price.
ownership is the fundamental aim of the contract. A
buyer is not interested in a mere physical transfer, 2. Determinate subject matter (generally
he is after the ownership. there is no sale of generic thing; moreover, if
the parties differ as to the object, there can
Essential Characteristics of the Contract of Sale be no meeting of the minds.

a. Consensual – perfected by mere consent. 3. Price certain in money or its equivalent –

(This is the cause or consideration) (The price
b. Bilateral reciprocal – both parties are bound by need not be in money.)
obligations dependent upon each other.
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b. Natural elements (those which are inherent in c. As to whether the object is tangible or
the contract, and which in the absence of any intangible
contrary provision, are deemed to exist in the
contract.) 1. sale of property (tangible or corporeal)

1. warranty against eviction (deprivation of the 2. sale of a right (assignment of a right or a credit, or
property bought) some other intangibles such as a copyright, a
trademark, or goodwill.)
2. warranty against hidden defects
tangible – chose of
c. Accidental elements (those which may be present or
absent in the stipulation, such as the place or time of possession. intangible – chose
payment, or the presence of conditions.)
of action.
Stages in the Contract of Sale
 The term “goods” as used in the Uniform Sales Act
a. Generation or negotiation does not ordinarily include choses in action (things in
action). Neither does the term include money.
b. Perfection – meeting of the minds
d. As to the validity or defect of the transaction
c. Consummation – when the object is delivered and
the price is paid. 1. valid sale
Kinds of Sales 2. rescissible sale
a. As to the nature of the subject matter 3. voidable sale
1. sale of real property 4. unenforceable sale
2. sale of personal property 5. void sale
b. As to the value of the things exchanged e. As to the legality of the object
1. commutative sale 1. sale of a licit object
2. aleatory sale 2. sale of an illicit object
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f. As to the presence or absence of conditions Sale distinguished from “Dation in Payment”

(Adjudicacion en Pago, or Dacion en Pago or Dacion
1. absolute sale (no condition)
en Solutum)
2. conditional sale (as to whether there is a sale with a
SALE DATION IN PAYMENT
pacto de retro, a right to repurchase or redeem; or
when there are suspensive conditions, or when the 1. There is no pre-existing 1. There is a pre-existing
things sold merely possess a potential existence, credit. credit.
such as the sale of the future harvest of a designated
parcel of land; or when, for example, all the personal 2. Gives rise to obligations. 2. extinguishes obligations.
properties in an army depot would be sold “except all
3. The cause or 3. The cause or
combat materials” that may be found therein.
consideration here is the consideration here, from the
Therefore such combat materials should be excluded
price, from the viewpoint of viewpoint of the person
from sale.)
the seller, or the obtaining of offering the dation in
g. As to whether wholesale or resale the object, for the viewpoint payment, is the extinguishin
of the buyer. of his debt; from the
1. wholesale –if to be resold for a profit the goods being viewpoint of the4 creditor, it
unaltered when resold, the quantity being large. 4. There is greater freedom is the acquisition of the
in the determination of the object offered in lieu of the
2. retail – if otherwise (also sold to tailors) price. original credit.
h. A to the proximate inducement for the sale 5. The giving of the price 4. There is less freedom in
may generally end the the determination of the
1. sale by description obligation of the buyer. price.
2. sale by sample
5. The giving of the object in
3. sale by description and sample lieu of the credit may
extinguish completely or
i. As to whether the price is tendered partially the credit
(depending on the
1. cash sale agreement)
2. sale on the installment plan
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Sale distinguished from Assignment of Property in

Favor of Creditors (Cession or Cession de Bienes)
Contract of Sale distinguished from Contract to Sell
SALE CESSION

1. As defined, there is 1. The assignee or creditor

CONTRACT OF SALE CONTRACT TO SELL transfer of ownership and does not acquire ownership
delivery of a determinate over the things assigned, but
1. The non-payment of price 1. The payment in full of the
thing. only the right to sell said
is a resolutory condition. (ex: price is a positive suspensive
things.
the contract of sale may by condition. Hence, if the price
such occurrence put an end is not paid, it is as if the
to a transaction that once obligation of the seller to
upon a time existed.) deliver and to transfer Cession – consists in the abandonment of all the
ownership never became property of the debtor for the benefit of his creditors in
2. Title to the property effective and binding. order that the latter may apply the proceeds thereof to
generally passes to the the satisfaction of their credits.
buyer upon delivery. 2. Ownership is retained by
the seller, regardless of Dacion in payment distinguished from Cession
3. After delivery has been delivery and is not to pass
made, the seller has lost until full payment of the DATION IN PAYMENT CESSION
ownership and cannot price. 1. One creditor is sufficient. 1. There must be two or
recover it unless the contract
more creditors.
is resolved or rescinded. 3. Since the seller retains 2. Not all properties of the
ownership, despite delivery, debtor are conveyed. 2. All the debtor’s properties
he is enforcing and not are conveyed.
rescinding the contract if he 3. Debtor may be solvent or
seeks to oust the buyer for insolvent. 3. Cession takes place only if
failure to pay. the debtor is insolvent.
4. The creditor becomes the
owner of the thing conveyed. 4. The creditors do not
become owners of the thing
conveyed.

Sale distinguished from lease

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Chapter 1 – Nature and Form of the Contract

In a sale, the seller transfers ownership; in a lease, the Things may be illicit:
lessor or landlord transfers merely the temporary
possession and use of the property. 1. per se (of its nature) Ex: Sale of human flesh for human
pleasure.
Kinds of Extrajudicial Foreclosure Sale
2. per accidens (made illegal by provision of the law) Ex:
1. Ordinary execution – governed by the sale of land to an alien after the effective date of the
pertinent provisions of Rule 39 of the Rules Constitution; Sale of illegal lottery tickets.
of Court.
* If the object of sale is illicit, the contract is null and void.
2. Judicial foreclosure – governed by Rule 68 (Art 1409), and cannot, be ratified.
of the Rules of Court.
* The right of redemption may be sold. So also may literary,
3. Extrajudicia foreclosure – governed by Act artistic, and scientific works. A usufruct may also be sold.
3135, as amended by Act 4118, otherwise
known as “An Act to Regulate the Sale of Transfer of Ownership
Property Under Special Powers Inserted In or
Annexed to Real Estate Mortgages.” a. It is essential for a seller to transfer ownership (Art. 1458)
and, therefore, the seller must be the owner of the subject
sold. Nemo dat quad non habet – nobody can dispose of
that which does not belong to him.
Article 1459. The thing must be licit and the vendor
must have a right to transfer the ownership thereof b. But although the seller must be the owner, he need not
at the time it is delivered. be the owner at the time of the perfection of the contract. It
is sufficient that he is the owner at the time the object is
Lawfulness of the Object and Right to Transfer delivered; otherwise he may be held liable for breach of
Ownership warranty against eviction.

Two rules: * The contract of sale by itself, is not a mode of acquiring

ownership.
a. The object must be LICIT.
* The contract transfers no real rights; it merely causes
b. The object must have the RIGHT to transfer
certain obligations to arise.
OWNERSHIP at the time the object is delivered.
c. The seller need not be the owner at the time of perfection
Licit – lawful, within the commerce of man.
because, after all, “future things or goods” inter alia, ,may
be sold.
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* While there can be sale of future property, there can The efficacy of the sale of a mere hope or expectancy
generally be no donation of future property. is deemed subject to the condition that the thing will
come into existence.
d. A person has a right over a thing (although he is not the
owner of the thing itself) may sell such right. Hence, a The sale of a vain hope or expectancy is void.
usufructuary may generally sell his usufructuary right/
Selling a thing having a potential existence – this is a
e. If the buyer was already the owner of the thing sold at the future thing that may be sold.
time of sale, there can be no valid contract.
Examples:
Article 1460. A thing is determinate when it is
particularly designated or physically segregated from a. young animals not yet in existence or still ungrown fruits.
all others of the same class.
b. the wine that a particular vineyard is expected to
The requisite that a thing be determinate is satisfied produce.
if at the time the contract is entered into, the thing is
capable of being made determinate without the c. the wool that shall, thereafter, grow upon a sheep
necessity of a new or further agreement between the
parties. d. the expected goodwill of a business enterprise

Determinate – specific, but it is not essential really that at the sale of “a mere hope or expectancy” – should refer
the time of perfection, the object be already specific. It is to a sale of “an expected thing” not to the hope or
sufficient that it be capable of being determinate without expectancy for the hope or expectancy already exists.
need of any new agreement. Thus, there can be a sale of 20
kilos of sugar of a named quality.

 However, from the viewpoint of risk or loss, not until

the object has really been made determinate can we
say that the object has been lost, for as is well
known, “generic thins cannot be lost.”

Article 1461. Things having a potential existence may

be the object of the contract of sale.
Emptio Rei Sperati (Sale of an expected thing)
distinguished form Emptio Spei (Sale of the hope itself)

Emptio Rei Sperati (Sale of Emptio Spei (Sale of the

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an expected thing) hope itself) a. Those still to be manufactured (like a future airplane) or
printed (like a subscription to a newpaper)
1. If the expected thing does 1. It does not matter whether
not materialize, the sale is the expected thing b. Those still to be raised (like young animals, whether
not effective. materialized or not, what is already conceived or not at the same time of perfection of
important is that the hope the contract), or future agricultural products (like copra still
2. Deals with a future thing itself validly existed. to be manufactured.)
– that which is expected.
2. Deals with a present thing c. Those still to be acquired by seller after the perfection of
Ex: Sale of a valid – for certainly the hope or the contract (like land which the seller expects to buy.) This
sweepstakes ticket whether expectancy already exists. is also referred to as the sale of “hereafter-acquired”
it wins or not, the sale itself property.)
is valid.
d. Things whose acquisition depends upon a contingency
which may or may not happen. Ex: I can sell you now a
* If the hope or expectancy itself is vain, the sale is itself specific car which my father promised to give me, should I
void. BE it noted that this is not an aleatory contract for pass the bar next year. The moment I get the car however,
while in an aleatory contract there is an element of chance, in accordance with my father’s promise you do not
here, there is completely no chance. (Ex: Sale of a losing necessarily become its owner, for before title can pass to
ticket for a sweepstakes already run. Except if the ticket be you, I must first deliver the car to you, actually or
a collector’s item) constructively.

Article 1462. The goods which form the subject of a Article 1463. The sole owner of a thing may sell an
contract of sale may be either existing goods, owned undivided interest therein.
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.”
Example of Sale of undivided interest
There may be a contract of sale of goods, whose
acquisition by the seller depends upon a contingency a. If I own a house, I may sell an aliquot part thereof (say ½
which may or may not happen. or 1/3) to somebody, in which case he and I will become co-
owners.
 Goods may be future or existing goods.
b. A full owner may sell the usufruct of his land leaving the
Future goods naked ownership to himself.
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Article 1464. In the case of fungible goods, there may Article 1466. In construing a contract containing
be a sale of an undivided share of a specific mass, provisions characteristic of both the contract of sale
though the seller purports to sell and the buyer to and of the contract of agency to sell, the essential
buy a definite number, weight or measure of the clauses of the whole instrument shall be considered.
goods in the mass, and though the number, weight or
measure of the goods in the mass undetermined. By
such a sale the buyer becomes owner in common of
such a share of the mass as the number, weight or Contract of Sale distinguished from Agency to Sell
measure bought bears to the number, weight or (like a Consignment for Sale)
measure of the mass. If the mass contains less than
the number, weight or measure bought, the buyer CONTRACT OF SALE AGENCY TO SELL
becomes the owner of the whole mass and the seller 1. The buyer pays the price. 1. The agent delivers the
is bound to make good the deficiency from goods of price which in turn he got
the same kind and quality, unless a contrary intent 2. The buyer after delivery from his buyer.
appears. becomes the owner.
2. The agent who is
Example of Share in a Specific Mass 3. The seller warrants. supposed to sell does not
become the owner, even if
In a stock of rice, the exact number of cavans which is still
the property has already
unknown, Jose buys 100 cavans. If there are really 150, Jose
been delivered to him.
becomes co-owner of the whole lot, his own share being 2/3
thereof. The sale is of a specific object since the mass is 3. The agent who sells
specific. assumes no personal liability
as long as he acts within his
Article 1465. Things subject to a resolutory condition
authority and in the name of
may be the object of the contract sale.
the principal.

Article 1467. A contract for the delivery at a certain

Sale of things subject to a Resolutory Condition price of an article which the vendor in the ordinary
course of his business manufactures or procures for
a. A property subject to reserve troncal may be sold. the general market, whether the same is on hand at
the time or not, is a contract of sale, but if the goods
b. A usufruct that may end when the naked owner becomes are to be manufactured specially for the customer
a lawyer may be sold. and upon his special order, and not for the general
market, it is a contract for a piece of work.
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Rules to Determine if the Contract is One of Sale or a 2. If 50-50 – SALE

Piece of Work
3. If thing is less valuable than the money – SALE
a. If ordered in the ordinary course of business - SALE
Article 1469. In order that the price may be
b. If manufactured specially and not for the market piece of considered certain, it shall be sufficient that it be so
work contract with reference to another thing certain, or that the
determination thereof be left to the judgment of a
Schools of Thought
specified person or persons.
a. Massachusetts Rule – If specially done at the order of
Should such person or persons be unable or unwilling
another, this is a contract for a piece of work.
to fix it, the contract shall be inefficacious, unless
b. New York Rule – If the thing already exists, it is a SALE; if the parties subsequently agree upon the price.
not, WORK.
If the third person or persons acted in bad faith, or
c. English Rule – If material is more valuable, sale; if skill is by mistake, the courts may fix the price.
more valuable, work.
Where such third person or persons are prevented
Article 1468 – If the consideration of the contract from fixing the price or terms by fault of the seller or
consists partly in money, and partly in another thing, the buyer, the party in fault as are allowed the seller
the transaction shall be characterized by the or the buyer, as the case may be.
manifest intention of the parties. If such intention
Certainty of the Price
does not clearly appear, it shall be considered a
barter if the value of the thing given as a part of the
 The price must be certain; otherwise, there is no true
consideration exceeds the amount of the money or
consent between the parties.
its equivalent; otherwise, it is a sale.
 There can be no sale without a price.
Rules to determine whether contract is one of Sale or
Barter  If the price is fixed but is later on remitted or
condoned, this is perfectly all right, for then the price
a. First rule – Intent.
would not be fictitious.
b. If intent does not clearly appear –
 The failure to pay the agreed price does not cancel a
1. If thing is more valuable than money – BARTER sale for lack of consideration, for the consideration is
still there, namely, the price.
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 If the money paid is counterfeit, the sale would still It is possible that a donation, not a sale, was really intended.
be valid for we cannot say that the consideration or In such a case, the parties may prove that the low price is
cause of the contract is the illegal currency. The real sufficiently explained by the consideration of liberality.
consideration or caused is still the VALUE or price
agreed upon. Article 1471. If the price is simulated, the sale is
void, but the act may be shown to have been in
When no specific amount is stipulated reality a donation, or some other act or contract.
If no specific amount has been agreed upon, the price is Simulated price
still considered certain:
a. The price must not be fictitious. Therefore if the price is
a. If it be certain with reference to another thing certain. merely simulated, the contract as a sale is void. It may
however be valid as a donation or some other agreement,
b. If the determination of the price is left to the
provided the requirements of donations or other
judgment of a specified person or persons.
agreements have been complied with. If these requirements
c. In the cases provided for under Art. 1472, Civil Code. do not exist, then, as a sale, the contract is absolutely void,
not merely voidable. An action for annulment is therefore
Article 1470. Gross inadequacy of price does not not essential.
affect a contract of sale except as it may indicate a
defect in the consent, or that the parties really b. A simulated price is fictitious. There being no price, there
intended a donation or some other act or contract. is no cause or consideration; hence, the contract is void as a
sale. However, it is enough that the price be agreed on at
Effect of Gross Inadequacy of Price the time of perfection. A rescission of the price will not
invalidate the sale.
a. In ordinary sale, the sale remains valid even if the price is
very low. If there was vitiated consent (such as fraud, or
undue influence is present) the contract may be annulled
but only due to such vitiated consent. Fictitious sale

b. In execution of judicial sales – While mere inadequacy of If the sale of conjugal property is fictitious and therefore
price will not set aside a judicial sale of real property, still if non-existent, the widow who has an interest in the property
the price is so inadequate as to shock the conscience of the subject of the sale may be allowed to contest the sale, even
Court, it will not be set aside. BEFORE the liquidation of the conjugal partnership, making
the executor a party-defendant if he refuses to do so.
In case Contract was really a Donation
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Article 1472. The price of securities, grain, liquids, price is a question of fact dependent on the
and other things shall also be considered certain, circumstances of each particular case.
when the price fixed is that which the thing sold
would have on a definite day, or in a particular Effect if the price cannot be determined
exchange or market, or when an amount is fixed
above or below the price on such day, or in such a. If the price cannot really be determined, the sale is void
exhange or market, provided said amount be certain. for the buyer cannot fulfill his duty to pay.

Certainty of Price of Securities b. If the buyer has made use of it, he should not be allowed
to enrich himself unjustly at another’s expense. So he must
Ex: I can sell to you today my Mont Blanc fountain pen at pay a “reasonable price.” The seller’s price, however, must
the price equivalent to the stock quotation two days from be the one paid if the buyer knew how much the seller was
today of 100 shares of PLDT. charging and there was an acceptance of the goods
delivered. Here, there is an implied assent to the price fixed.
If stock market price cannot be ascertained
Article 1475. The contract of sale is perfected at the
If the stock quotation price two days later cannot really be moment there is a meeting of minds upon the thing
ascertained at that time (2 days later), the sale is which is the object of the contract and upon the
inefficacious. price.
Article 1473. The fixing of the price can never be left From that moment, the parties may reciprocally
to the discretion of one of the contracting parties. demand performance, subject to the provisions of the
However, if the price fixed by one of the parties is law governing the form of contracts.
accepted by the other, the sale is perfected.
Nature of Contract
Price cannot be left to one’s party’s discretion
Sale is a consensual contract (perfected by mere consent).
Reason: The other could not have consented to the price, Therefore, delivery or payment is not essential for
for he did not know what is was. perfection.
Article 1474. Where the price cannot be determined Note: The contract of sale is consummated upon
in accordance with the preceding articles, or in any delivery and payment.
other manner, the contract is inefficacious. However,
if the thing or any part thereof has been delivered to Requirements for Perfection
and appropriated by the buyer, he must pay a
reasonable price therefore. What is a reasonable
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a.When parties are face to face, when an offer is accepted parties unless the contrary is stipulated. The mere fact
without conditions and without qualifications. (A conditional that the seller thereafter sells an object of the same kind
acceptance is a counter-offer.) to another at a lesser price is no ground for the previous
buyer to be entitled to claim the excess, his contract
Note: if negotiated thru a phone, it is as if the parties are
being independent of the other.
face to face.
Formalities for Perfection
b.When contract is thru correspondence or thru telegram,
there is perfection when the offeror receives or has Under the statute of Frauds, the sale of:
knowledge of the acceptance by the offeree.
a. Real Property (regardless of the amount)
Note: If the buyer has already accepted, but the seller does
not know yet of the acceptance, the seller may still b. Personal Property (if 500 or more must be in writing to be
withdraw. enforceable.

c.When a sale is made subject to a suspensive condition, * If orally made, it cannot be enforced by a judicial action,
perfection is had from the moment the condition is fulfilled. except if it has been completely or partially executed, or
except if the defense of the Statute of Frauds is waived.
Before perfection
Note: Also in writing should be sales which are to be
 Before perfection of the contract of sale, no mutual performed only after more than one year (from the time
rights and obligations exist between the would-be the agreement was entered into) – regardless as to
buyer and the would-be seller. The same thing is true whether the property is real or personal, and regardless of
when perfection is conditioned upon something, and the price involved.
that thing is not performed.

Accepted Bilateral Promise to Buy and Sell

Perfection in the Case of Advertisements
 In a sense similar to, but not exactly the same as, a
perfected contract of sale.  Advertisements are mere invitations to make an offer
(Art. 1325, Civil Code) and, therefore, one cannot
Note: From the moment the parties have agreed upon compel the advertiser to sell.
the kind of rice and the price thereof, they are deemed
to have entered into a perfected contract of purchase
and sale, the terms and conditions of which may not be
held to depend on subsequent events or acts of the Transfer of Ownership
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a.Mere perfection of the contract does not transfer after altering them by using his skill (as when he
ownership. Ownership of the object sold is transferred only transforms them to shirts), the original sale is retail.
after delivery (tradition), actual, legal or constructive. Same rule applies in the case of the retail of the
following:
The rule is, therefore, this: After delivery of the object,
ownership is transferred. 1. Copra for the manufacture of soap or
oleomargarine.
b.It is valid If it is stipulated that even with delivery there
will be no change or transfer of ownership till the purchase 2. Hemp used to make twine or rope
price has been fully paid. (But the stipulation is not binding
on innocent third persons such as customers at a store. The 3. In general, raw materials that are used in or
customers must not be prejudiced. that entered into the manufacture of finished
products.
The Sales Tax
Effect of Perfection
Even if the object sold has not yet been delivered, once
there has been a meeting of the minds, the sale is After perfection the parties must now comply with their
perfected and, therefore, the sales tax (15% on the gross) mutual obligations. Thus, for example, the buyer can now
is already due. It accrues on perfection, not on the compel the seller to deliver to him the object purchased. In
consummation of the sale. the meantime, the buyer has only the personal, not a real
right. Hence, if the seller sells again a parcel of land to a
 Retail sales of flour to bakeries to be manufactured stranger who is in good faith, the proper remedy of the
into bread are subject to tax; if wholesale, they are buyer would be to sue for damages.
not subject to tax.

 To determine if a sale is wholesale or retail, we must

not consider the quantity sold, but the character of
the purchase. If the buyer buys the commodity for
his own consumption, the sale is RETAIL, if for
resale, the sale is deemed wholesale, regardless of
quantity, and is not subject to the particular tax
referred to.

 In sales of textiles, if it be bought for resale at a

profit, the goods being unaltered when resold, the
original sale is wholesale. If he resells the goods only Article 1476. In the case of a sale by auction:
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(1) Where goods are put up for sale by auction in signified on the part of the seller by knocking down
lots, each lot is the subject of a separate contract of the hammer.
sale.
- The Auctioneer may withdraw the goods from the
(2) A sale by auction is perfected when the sale, unless the auction has been announced to be
auctioneer announces its perfection by the fall of the without reserve. Reason: The bid is merely an offer,
hammer, or in other customary manner. Until such not an acceptance of an offer to sell. Therefore, it
announcement is made, any bidder may retract his can be rejected. What the auctioneer does in
bid; and the auctioneer may withdraw the goods from withdrawing is merely reject the offer.
the sale unless the auction has been announced to be
without reserve. Conditions when a seller may bid

(3) A right to bid may be reserved expressly by on a. Provided such a right to bid was reserved;
behalf of the seller, unless otherwise provided by law
or by stipulation. b. and notice was given that the sale by auction is
subject to a right to bid on behalf of the seller.
(4) Where notice has not been given that a sale by
auction is subject to a right to bid on behalf of the  A seller may employ others to bid for him provided
seller, it shall not be lawful for the seller to bid he has notified the public that the auction is subject
himself or to employ or induce any person to bid at to the right to bid on behalf of the seller. People who
such sale on behalf of the seller or any person bid for the seller, but are not themselves bound, are
employed by him. Any sale contravening this rule called “by-bidders” or “puffers.” In view of the
may be treated as fraudulent by the buyer. notice, there would not be any fraud, and the
transaction with the rest should be considered as
When Sale by Auction is Perfected valid. Without the notice, any sale contravening the
rule may be treated by the buyer as fraudulent. In
 The sale is perfected when the auctioneer announces
other words, the purchaser could be relieved from his
its perfection by the fall of the hammer or in other
bid.
customary manner.
Note: It may happen that the owner is not himself
Before the Fall of the Hammer
the auctioneer. Now then if the auctioneer employs
- The bidder may retract hi bid because every bidding puffers and gives no notice to the public, the sale
is merely an offer and, therefore, before it is would still be fraudulent, whether or not the owner of
accepted, it may be withdrawn. The assent is the goods knew what the auctioneer had don
 SALES
Chapter 1 – Nature and Form of the Contract

Article 1478. The parties may stipulate that

ownership in the thing shall not pass to the
Rule in case of a Private Sale purchaser until he has fully paid the price.

 A private sale authorized by a probate court (and When ownership is not transferred despite delivery
without objection on the part of the heirs or
creditors) cannot be assailed by a person who is not Generally, ownership is transferred upon delivery, but even
an “interested party” (such as an heir or creditor). if delivered, the ownership may still be with the seller till
One who merely offered a higher price (without full payment of the price is made, if there is a stipulation to
actually buying the property) is not “interested this effect. This stipulation is usually known as pactum
party.” It would have been different had there been a reservati dominii and is common in sales on the
public auction. installment plan. But of course, innocent third parties cannot
be prejudiced.
Article 1477. The ownership of the thing sold shall be
transferred to the vendee upon the actual or Article 1479. A promise to buy and sell a determinate
constructive delivery thereof. thing for a price certain is reciprocally demandable.

When Ownership is Transferred An accepted unilateral promise to buy or to sell a

determinate thing for a price certain is binding upon
Ownership is not transferred by perfection but by delivery. the promissory if the promise is supported by a
consideration distinct from the price.
(This is true even f the sale has been made on credit;
payment of the purchase price is NOT essential to the First paragraph Second paragraph
transfer of ownership, as long as the property sold has been (MUTUAL PROMISE) (ACCEPTED UNILATERAL
delivered. (Gabriel et. al. v. Encarnacion et. al.) A contrary PROMISE)
stipulation is, however, VALID. A promise to buy something Only one makes the promise.
and B promises to sell it at This promise is accepted by
KINDS OF DELIVERY an agreed price. (This is a the other. Hence, A promise
promise to buy and sell, to sell to B accepts the
a. Actual (Art. 1497, Civil Code)
clearly a bilateral reciprocal promise, but does not in turn
b. Constructive (Arts. 1498 – 1601, Civil Code), including contract.) promise to buy.
“any other manner signifying an agreement that the
possession is transferred.” (Art. 1496, Civil Code) Policitacion – a unilateral promise to buy or to sell which is
not accepted. This produces no juridical effect, and creates
no legal bond. This is a mere offer, and has not yet been
conversed into a contract.
 SALES
Chapter 1 – Nature and Form of the Contract

Article 1480.Any injury to or benefit from the thing

sold, after the contract has been perfected, from the
Bilateral Promise – to buy and sell a certain thing for a moment of the perfection of the contract to the time
price certain gives to the contracting parties personal rights of delivery, shall be governed by Articles 1163 to
in that each has the right to demand from the other the 1166, and 1262.
fulfillment of the obligation.
(Art. 1163. Every person obliged to give something is also
Unilateral Promise – The acceptance of a unilateral obliged to take care of it with the proper diligence of a good
promise to sell must be plain, clear, and unconditional. father of a family, unless the law or the stipulation of the
Therefore, if there is a qualified acceptance with terms parties requires another standard of care. (1094a))
different from the offer, there is no acceptance, that is,
there is no promise to buy and there is no perfected sale. (Art. 1164. The creditor has a right to the fruits of the thing
from the time the obligation to deliver it arises. However, he
Option – a contract granting a person the privilege to buy shall acquire no real right over it until the same has been
or not to buy certain objects at any time within the agreed delivered to him. (1095))
period at a fixed price.
(Art. 1165. When what is to be delivered is a determinate
The contract of option is a separate and distinct contract thing, the creditor, in addition to the right granted him by
from the contract which the parties may enter into upon the Article 1170, may compel the debtor to make the delivery.
consummation of the contract; therefore, an option must
have its own cause or consideration. If the thing is indeterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
Contract to SELL is NOT an Absolute Sale
If the obligor delays, or has promised to deliver the same
A contract or promise to sell, a parcel of land for example, thing to two or more persons who do not have the same
is not a contract of sale. Such a contract to sell would interest, he shall be responsible for any fortuitous event
exist when for instance, land is promised to be sold, and until he has effected the delivery. (1096))
title given only after the down payment and the monthly
installment therefor shall have all been paid. Failure to (Art. 1166. The obligation to give a determinate thing
make the needed payment is failure to comply with the includes that of delivering all its accessions and accessories,
even though they may not have been mentioned. (1097a))
needed suspensive condition. Hence, promissor was never
really obliged to convey title. Nothing wrong if he sells the
(Art. 1262. An obligation which consists in the delivery of a
property to another, after an unsuccessful demand for said
determinate thing shall be extinguished if it should be lost
price.
 SALES
Chapter 1 – Nature and Form of the Contract

or destroyed without the fault of the debtor, and before he

has incurred in delay.

When by law or stipulation, the obligor is liable even for

fortuitous events, the loss of the thing does not extinguish Exceptions to the rule that between perfection and
the obligation, and he shall be responsible for damages. The delivery, the buyer bears the loss:
same rule applies when the nature of the obligation requires
the assumption of risk. (1182a)) a. If the object sold consists of fungibles sold for a price
fixed according to weight, number, or measure. (Here, if
This rule shall apply to the sale of fungible things, there has been no delivery yet, the seller bears the loss,
made independently and for a single price or without unless the buyer is in mora accipiendi.) Last par. 1480
consideration of their weight, number, or measure.
b. If the seller is guilty of fraud, negligence, default, or
violation of contractual term. Arts. 1165, 1262, 1170)
Should fungible things be sold for a price fixed
according to weight, number, or measure, the risk c. When the object sold is generic because “genus does not
shall not be imputed to the vendee until they have perish” (genus nunquam perit) Note: the unfortunate effect
been weighed, counted, or measured, and delivered, of Art. 1504 on the question of the risk of loss is discussed
unless the latter has incurred delay. under said article.)

Fungibles – personal property which may be replaced with

equivalent things.
Who Bears the Risk of Loss
Consumables and non-consumables distinguished
a. If the object has been lost before perfection, the seller
from fungibles and non-fungibles
bears the loss. Reason: There was no contract, for there was
no cause or consideration. Being the owner, the seller bears The former is based on the nature of the thing, while the
the loss. This means that he cannot demand payment of the latter is based on the intention.
price.
Article 1481. In the contract of goods by description
b. If the object was lost after delivery to the buyer, clearly or by sample, the contract may be rescinded if the
the buyer bears the loss. (Res perit domino – the owner bulk of the goods delivered do not correspond with
bears the loss.) the description or the sample, and if the contract be
by sample as well as by description, it is not
c. If the object is lost after perfection but before delivery,
sufficient that the bulk of goods correspond with the
the buyer bears the loss, as exception to the rule of res perit
sample if they do not also correspond with the
domino.
description.
 SALES
Chapter 1 – Nature and Form of the Contract

The buyer shall have a reasonable opportunity of b. Proof of the perfection of the contract.
comparing the bulk with the description or the
sample. Option money – applies to a sale not yet perfected; the
money is not part of the purchase price; the would be buyer
Sale by description – Where seller sells things as being of is not required to buy.
a certain kind, the buyer merely relying on the seller’s
representations or descriptions. Generally, the buyer has When arras must be returned
not previously seen the good, or even if he has seen them,
he believes (sometimes erroneously) that the description If merchandise cannot be delivered, the arras must be
tallies with the goods he has seen. returned. Of course, this right may be renounced since
neither the law nor public policy is violated.
Sale by sample – that where the seller warrants that the
bulk (not the major part or the majority of the goods but
the goods themselves) of the goods shall correspond with Article 1483. Subject to the provisions of the Statute
the sample in kind, quality, and character. On the sample of Frauds and of any other applicable statute, a
is exhibited. The bulk is not present, and so there is no contract of sale may be made in writing, or by word
opportunity to examine or inspect it. of mouth, or partly in writing and partly by word of
mouth, or may be inferred from the conduct of the
Sale by description and sample – must satisfy the parties.
requirements in both, and not in only one.

Article 1482. Whenever earnest money is given in a If sale is made thru an Agent
contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract. The sale of a piece of land or interest therein when made
thru an agent is void. (not merely unenforceable) unless the
Earnest money – (“arras”) something of value to show agent’s authority is in writing. (Art. 1874). This is true even
that the buyer was really in earnest, and given to the if the sale itself s in a public instrument, or even registered.
seller to bind the bargain.
Interest therein – refers to easement or usufruct for
Significance of earnest money example.

a. Part of the purchase price. (Hence, from the total price  If notary public is not authorized, the sale would still
must be deducted the arras; the balance is all that has to be be valid since for validity of the sale, a public
paid.) instrument is not even essential.
 SALES
Chapter 1 – Nature and Form of the Contract

Article 1484. In a contract of sale of personal Purpose of the Rules For Sale of Personal Property on
property the price of which is payable in the Installment Plan
installments, the vendor may exercise any of the
following remedies: - To prevent abuse in the foreclosure of chattel
mortagages by selling at a low price and then suing
(1) Exactfulfillment of the obligation, should the for the deficiency, is the precise purpose of this
vendee fail to pay; article. Otherwise, the buyer would find himself
without the property, and still indebted.
(2) Cancel the sale, should the vendee’s failure to pay
cover two or more installments; Cancellation requires mutual restitution
(3) Foreclose the chattel mortgage on the thing sold,
- It is clear that when the remedy of cancellation is
if one has been constituted, should the vendee’s availed of, there must be a mutual restitution of
failure to pay cover two or more installments. In this whatever had been received by either party.
case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Ex: When the seller of a car on installment asks for
Any agreement to the contrary shall be void. cancellation of the sale, the car must be returned to
him, and he in turn must give back all installments
he has received, including the downpayment.
Requisites before Art. 1484 may be applied

a. There must be a contract Instances when Art. 1484 cannot be applied

b. The contract must be one of sale (absolute sale, not a a.Real estate mortgage because it can only be foreclosed
pacto de retro transaction, where redemption is effected in only in conformity with special provisions.
installments)
b. Sale of personal property on straight terms, in which the
c. What is sold is personal property (sale of real property in balance, after the payment of the initial sum should be paid
installments is governed by RA 6552 – the Maceda Law – in its totality at the time specified. Therefore, in a sale on
which took effect on the date of its approval Sept. 14, 1972. straight terms, the mortgagee-seller will still be entitled to
recover the unpaid balance.
d. The sale must be on the installment plan (an installment
– is any part or portion of the buying price, including the
down payment)
Article 1485. The preceding article shall be applied to
contracts purporting to be leases of personal
 SALES
Chapter 1 – Nature and Form of the Contract

property with option to buy, when the lessor has b. However, by way of exception, it is valid to stipulate
deprived the lessee of the possession or enjoyment that there should be NO returning of the price that has been
of the thing. partially paid or of the “Rents” given, provided the
stipulation is not unconscionable.
Leases of Personal Property with Option to Buy
SALE OF REAL PROPERTY IN INSTALLMENTS
- This may really be considered a sale of personal
property in installments. Therefore, the purpose of
Art. 1485 is to prevent an indirect violation of Art. REPUBLIC ACT No. 6552
1484.
AN ACT TO PROVIDE PROTECTION TO BUYERS OF
“when the lessor has deprived lessee of the REAL ESTATE ON INSTALLMENT PAYMENTS. (Rep. Act
No. 6552)
possession or enjoyment of the thing”

For failure to pay, the lessor is apparently exercising the Section 1. This Act shall be known as the "Realty
Installment Buyer Act."
right of an unpaid seller, and has taken possession of the
property. This is so even if the property had been given up
Section 2. It is hereby declared a public policy to protect
in obedience to the lessor’s extrajudicial demand, such
buyers of real estate on installment payments against
surrender not really being voluntary. onerous and oppressive conditions.
When lease construed as sale
Section 3. In all transactions or contracts involving the sale
or financing of real estate on installment payments,
Even if the word lease is employed, when a sale on
including residential condominium apartments but excluding
installment is evidently intended, it must be construed as a industrial lots, commercial buildings and sales to tenants
sale. under Republic Act Numbered Thirty-eight hundred forty-
four, as amended by Republic Act Numbered Sixty-three
Article 1486. In the cases referred to in the two hundred eighty-nine, where the buyer has paid at least two
preceding articles, a stipulation that the installments years of installments, the buyer is entitled to the following
or rents paid shall not be returned to the vendee or rights in case he defaults in the payment of succeeding
lessee shall be valid insofar as the same may be installments:
unconscionable under the circumstances.
(a) To pay, without additional interest, the unpaid
Non-return of Installments Paid installments due within the total grace period earned
by him which is hereby fixed at the rate of one
a. As a general rule, it is required that a case of rescission or month grace period for every one year of installment
cancellation of the sale requires mutual restitution, that is, payments made: Provided, That this right shall be
all partial payments of price or “rents” must be returned.
 SALES
Chapter 1 – Nature and Form of the Contract

exercised by the buyer only once in every five years Section 6. The buyer shall have the right to pay in advance
of the life of the contract and its extensions, if any. any installment or the full unpaid balance of the purchase
price any time without interest and to have such full
(b) If the contract is canceled, the seller shall refund payment of the purchase price annotated in the certificate
to the buyer the cash surrender value of the of title covering the property.
payments on the property equivalent to fifty per cent
of the total payments made, and, after five years of
Section 7. Any stipulation in any contract hereafter entered
installments, an additional five per cent every year
into contrary to the provisions of Sections 3, 4, 5 and 6, shall
but not to exceed ninety per cent of the total
be null and void.
payments made: Provided, That the actual
cancellation of the contract shall take place after
thirty days from receipt by the buyer of the notice of Section 8. If any provision of this Act is held invalid or
cancellation or the demand for rescission of the unconstitutional, no other provision shall be affected
contract by a notarial act and upon full payment of thereby.lawphi1™
the cash surrender value to the buyer.
Section 9. This Act shall take effect upon its approval.
Down payments, deposits or options on the contract shall be
included in the computation of the total number of Approved: August 26, 1972.
installment payments made.lawphi1™
Raison d’ Etre” of the Maceda Law
Section 4. In case where less than two years of
installments were paid, the seller shall give the buyer a - To help especially the low income lot buyers,
grace period of not less than sixty days from the date the delineating the rights and remedies of lot buyers and
installment became due. protect them from one-sided and pernicious contract
stipulations. The Act’s declared public policy is to
If the buyer fails to pay the installments due at the protect buyers or real estate or installment basis
expiration of the grace period, the seller may cancel the against onerous and oppressive conditions. More
contract after thirty days from receipt by the buyer of the
notice of cancellation or the demand for rescission of the specifically, the Act provided for the rights of the
contract by a notarial act. buyer in case of default in the payment of
succeeding installments, where he has already paid
Section 5. Under Section 3 and 4, the buyer shall have the at least two years of installments.
right to sell his rights or assign the same to another person
or to reinstate the contract by updating the account during - The act seeks to address the acute housing shortage
the grace period and before actual cancellation of the problem in our country that has prompted thousands
contract. The deed of sale or assignment shall be done by of middle or lower class buyers of houses, lots, and
notarial act. condominium units to enter into all sorts of contracts
 SALES
Chapter 1 – Nature and Form of the Contract

with private housing developers involving installment acquisition was against the will of the owner of the
schemes. property and there was no meeting of the minds
between the parties.
Art. 1487. The expenses for the execution and
registration of the sale shall be borne by the When Transaction is one of Sale
vendor, unless there is a stipulation to the
contrary. If the property owner voluntarily sells the property to the
government, this would be a sale, and not an example
Who Pays for Expenses in Execution and of expropriation.
Registration
Eminent Domain distinguished from Expropriation
Observe that as a rule the seller pays for the expenses
of: Eminent Domain refers to the right given to the state,
whereas, expropriation usually refers to the process.
a.The execution (of the deed) of sale;
Essential requisites for Expropriation
b. its registration.
1. Taking by competent authority
NOTE: There can, however, be a contrary stipulation.
2. Observance of due process of law.
Art. 1488. The expropriation of property for
public use is governed by special laws. 3. Taking for public use.

Expropriation – involuntary in nature, that is, the 4. Payment of just compensation.

owner may be compelled to surrender the property after
all the essential requisites have been complied with. Just Compensation – market value (the price which the
Therefore, generally expropriation does not result in a property will bring when it is offered for sale by one who
sale. desires but is not obliged to sell it, and is bought by one
who is under no necessity of having it) PLUS the
One exception to the rule consequential damages, if any, MINUS the consequential
benefits, if any. BUT the benefits may be set off only
Gutierrez v. CTA – SC held that the acquisition by the against the consequential damages, and not against the
government of private properties thru the exercise of basic value of the property taken.
eminent domain, said properties being justly
compensated, is a sale or exchange within the meaning  The fixing of just compensation in expropriation
of the income tax laws and profits derived therefrom are proceedings shall be made in accordance with Rule
taxable as capital gain; and this is so although the 67 of the Rules of Court and not on the basis of the
 SALES
Chapter 1 – Nature and Form of the Contract

valuation declared in the tax declaration of the other person without capacity to act, he must pay a
subject property by the owner or assessor which ahs reasonable price therefor.
been declared unconstitutional.
Necessaries – include everything that is indispensable for
CHAPTER 2 sustenance, dwelling, clothing, and medical attendance,
according to the social position of the family.
CAPACITY TO BUY OR SELL
Support – also includes education of the person entitled to
be supported until he completes his education or training for
Art. 1489. All persons who are authorized in this some profession, trade, or vocation, even beyond the age of
Code to obligate themselves, may enter into a majority.” (Art. 290, Civil Code)
contract of sale, saving the modifications contained
in the following articles. Husbands

Where necessaries are those sold and delivered to a Under this Code, the husband may sell, alienate, or
minor or other person without capacity to act, he encumber, even without the consent of his wife, his
must pay a reasonable price therefor. Necessaries exclusive property acquired before the effectivity of the Civil
are those referred to in Article 290. (1457a) Code. The wife cannot even ask for the annulment of the
sale on the ground that it is in fraud of her rights when the
Incapacity to Buy may be Absolute or Relative purpose of the transaction is to benefit the family, that is, to
raise money for a business venture. (See Arts. 166 and 173
a.Absolute incapacity – when party cannot bind himself in of the Code)
any case.
 If the deed of sale of the land lists as purchasers both
b.Relative incapacity – when certain person, under the husband and the wife, the presumption is that it
certain circumstances, cannot buy certain property. is paraphernal property. (Castillo v. Castillo)
(Wolfson v. Estate of Martinez)

Note: Among people relatively incapacitated are those

mentioned in Arts. 1490 and 491, Civil Code.)  If a Filipino sells a parcel of land to a Chinese who
later sells the same to another Filipino, the second
Purchase by Minors sale is VALID because the purpose of the Constitution
of preserving the land in favor of Filipinos has not
been frustrated.
 When minors buy, the contract is generally
voidable, but in the case of necessaries, “where
necessaries are sold and delivered to a minor or
 SALES
Chapter 1 – Nature and Form of the Contract

(Thus creditors who became such after the

transaction cannot assail its validity for the
Art. 1490. The husband and the wife cannot sell reason that they cannot be said to have been
property to each other, except: prejudiced. But prior creditors (creditors at the time
of transfer) as well as the heirs of either spouse may
(1) When a separation of property was agreed upon invoke the nullity of the sale.
in the marriage settlements; or
Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either
(2) When there has been a judicial separation or
property under Article 191. (1458a) in person or through the mediation of another:

(1) The guardian, the property of the person or

NOTE: Under these two exceptions, the sale is generally
persons who may be under his guardianship;
valid, but of course, should there be vitiated consent (as
in the case of undue influence) the sale is voidable.
(2) Agents, the property whose administration or sale
may have been entrusted to them, unless the
➢ Just as a married couple cannot generally sell to each consent of the principal has been given;
other, they also generally cannot donate to each
other. This prohibition also applies to common-law
husband and wife on the theory that here there can (3) Executors and administrators, the property
be an even greater degree of undue influence. of the estate under administration;

Reason why Generally a Husband and Wife cannot (4) Public officers and employees, the property
Sell to Each Other of the State or of any subdivision thereof, or of
any government-owned or controlled
corporation, or institution, the administration
1. To avoid prejudice to third persons;
of which has been intrusted to them; this
2. To prevent one spouse from unduly influencing the
provision shall apply to judges and government
other;
experts who, in any manner whatsoever, take
3. To avoid by indirection the violation of the prohibition
part in the sale;
against donations.
(5) Justices, judges, prosecuting attorneys,
Effect of Sale
clerks of superior and inferior courts, and
other officers and employees connected with
➢ Generally, a sale by one spouse to another is void. the administration of justice, the property and
However, not everybody can assail the validity of rights in litigation or levied upon an execution
the transaction. before the court within whose jurisdiction or
territory they exercise their respective
functions; this prohibition includes the act of
 SALES
Chapter 1 – Nature and Form of the Contract

acquiring by assignment and shall apply to NOTE: Under Art. 1459 of the old Civil code, an agent
lawyers, with respect to the property and or administrator was disqualified from purchasing
rights which may be the object of any litigation property in his hands for sale or management.
in which they may take part by virtue of their However, under Art. 1491 of the new Civil Code, this
profession. prohibition was modified in that the agent may now
buy the property placed in his hand for sale or
(6) Any others specially disqualified by law. administration, provided the principal gives his
(1459a) consent thereto.

This article refers to relative Purchase by Attorney

incapacity. Reason for the Law A lawyer is not allowed to purchase the property of
his client which is in litigation. To do otherwise would
➢ Public policy prohibits the transactions in view of the be a breach of professional conduct, and would
fiduciary relationship involved. constitute malpractice.

Purchase Thru Another But assigning the amount of judgment by the client
to his attorney, who did NOT take any part in the
“Thru the mediation of another” - this must be case where said judgment was rendered, is valid.
proved, that is, that there was really an agreement
between the intermediary and the person When a thing is said to be in litigation
disqualified; otherwise, the sale cannot be set aside.
(Rodriguez v. Mactual) A thing is said to be in litigation not only if there is
some contest or litigation over it in court, but also
Purchase by Agent for Himself from the moment that it became subject to the
judicial action of the judge.
An agent is not allowed, without his principal’s
permission, to sell to himself what he has been ➢ Art. 1491 does not prohibit a lawyer from acquiring a
ordered to buy; or to buy for himself what he has certain percentage of the value of the properties in
been ordered to sell. (Moreno v. Villones) litigation that may be awarded to his client. A
contingent fee based on such value is allowed.
-The fiduciary relations between them estop the
agent from asserting a title adverse to that of the If however the attorney participates in the sale, not
principal. And therefore such a sale to himself would as buyer but as agent for the buyer, there is no
be ineffectual and void, because it is expressly violation of the law.
prohibited by law. The agent may, of course, buy
after the termination of the agency.
 SALES
Chapter 1 – Nature and Form of the Contract

Meaning of “Any others specially disqualified by law” Cross Reference

This refers to prohibited by reason of the fiduciary Legal Redemption – the right to be subrogated upon the
relationship involved. same terms and conditions stipulated in the contract.
(Art. 1619, Civil Code)
➢ Aliens though not allowed to buy land under the Compromises – Contract whereby the parties, by making
Constitution, they do not fall under the above phrase.
reciprocal concessions, avoid a litigation or to put an end
Thus, while those disqualified under Art. 1490 and
491 may not become lessees (Art. 1646), still aliens to one already commenced. (Art. 2028, Civil Code)
may become lessees even if they cannot buy lands.
Renunciation – rights may be waived, unless the waiver is
Status of the Sale contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with right
Generally, sales entered into in disregard of the prohibition recognized by law. (Art. 6, Civil Code)
under this article are not void. They are merely voidable.
(Wolfson v. Estate of Martinez) Renunciation - condonation or remission is essentially
gratuitous and requires the acceptance by the obligor. May
Art. 1492. The prohibitions in the two preceding be made expressly or impliedly. (Art. 1270, Civil Code)
articles are applicable to sales in legal redemption,
compromises and renunciations.

Applicability of Relative Incapacity to Legal

Redemption, Compromises, and Renunciation

Example:

If a ward’s property is sold, the guardian, even if he be an

adjacent owner, and even if all the other requisites for legal
redemption are present, cannot exercise the right of legal
redemption.
 SALES
Chapter 1 – Nature and Form of the Contract

CHAPTER 3

EFFECTS OF THE CONTRACT WHEN THE THING SOLD

Art. 1494. Where the parties purport a sale of
HAS BEEN LOST
specific goods, and the goods without the knowledge
of the seller have perished in part or have wholly or
Art. 1493. If at the time the contract of sale is
in a material part so deteriorated in quality as to be
perfected, the thing which is the object of the substantially changed in character, the buyer may at
contract has been entirely lost, the contract shall be his option treat the sale:
without any effect.
(1) As avoided; or
But if the thing should have been lost in part only,
the vendee may choose between withdrawing from (2) As valid in all of the existing goods or in so much
the contract and demanding the remaining part, thereof as have not deteriorated, and as binding the
paying its price in proportion to the total sum agreed buyer to pay the agreed price for the goods in which
upon. (1460a) the ownership will pass, if the sale was divisible.

Loss of Specific Goods

Lost of the object before sale This article practically reiterates the principle involved in
the preceding article.s
This refers to a case of loss of the object even before the
perfection of the contract. It is evident that there would be REMEDIES:
no cause or consideration; hence, the contract is void.
Observe that it is the seller here who naturally will have to 1. Cancellation (avoidance);
bear the loss.
2. Specific performance as to the remaining existing
Complete Loss Distinguished from Partial Loss goods. (if the sale was divisible).

When the object has been Partly or Partially Lost

REMEDIES:

1. Withdrawal or rescission.
2. Specific performance as to remainder by payment of
proportional price.