sales de leon compiled inc

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Sales: Theory and PracticeI. Introduction

A. Governing lawB. History of law on salesC. Source of law on sales

II. Concept of contract of sale A. Concept of sale (Art. 1458)B. Caracteristics of contract of saleC. !ssential ele"ents of contract of sale# an overview (Art. 1$18)

i. Consent (Art. 1$1%)ii. &'ect (Arts. 1$4*1$4%)iii. Cause (Art. 1$5+)

,. -ins of contract of salei. A'soluteii. Conitional

III. Parties to the contract of sale A. /ersons wo "ay enter into a contract of sale (Art. 148%)B. 0ype of incapacity

i. A'soluteii. elative

C. ules applica'le to specific sellers

i. 2inors (Art. 1$3 1$%+ 6a"ily Coe art. 3%+)ii. Hus'an an wife (Arts. 14+% 14%+ 14%3)iii. /ersons is7ualifie to 'uy specific properties (Art. 14+% 14%1 14%3)iv. &ter persons

,. /ractice notes# parties to contract of salei. Hus'an or wifeii. Corporation

IV. Formation and perfection of contract of sale A. Consentoffer an acceptance

i. 9n general (Arts. 1$1%*1$3:)a) &ffer

* certain (Art. 1$1%)

* fi;ing ter"s of offer (Art. 1$31)* wen offer 'eco"es ineffective (Art. 1$3$)* perio for acceptance (Art. 1$34)* wen offer accepte wen acceptance "ae 'y letter or telegra" or offer "ae troug agent

(Arts. 1$1% 1$33)* 'usiness avertise"ents (Arts. 1$35*1$3:)

') Acceptance* a'solute vs. 7ualifie acceptance (Art. 1$1%)* e;press or i"plie (Art. 1$3+)

ii. /ractice notes# offer an acceptance* counterpart signing

B. &'ect or su'ect "atter i. 0ing "ust 'e eter"inate (Arts. 1$18<3= 1$4% 1458 14:+)ii. 0ing "ust 'e licit (Art. 145%)

a) 9n general') 9llicit tings (Art. 14+%)

iii. 0ing "ust 'e witin te co""erce of "en (Art. 1$4)iv. 0ing "ust not 'e i"possi'le (Art. 1$48)v. 0ing "ust 'e an e;isting goo or a future goo (Arts. 1$4 14:1 14:3)

a) Sale of tings aving a potential e;istence (Arts. 14:1)') Sale of "ere ope of e;pectancy (Art. 14:1)c) Sale of vain ope or e;pectancy (Art. 14:1)

vi. Sales of specific tingsa) Sale of tings in litigation (Art. 1$81(4))') Sale of an univie interest in a ting (Art. 14:$)c) Sale of univie sare of a specific "ass (Art. 14:4)) Sale of tings su'ect to a resolutory conition (Art. 14:5)

vii. /ractice notes# o'ect or su'ect "atter of te contracta) Sale of sares > sale of no"inee sares sale at less tan fair "ar?et value sale of sares in a

corporation engage in a partly*nationali@e activity rigt of first refusal pre*e"ptive rigts tag*along rigtsrag*along rigts ta; re7uire"ents registration re7uire"ents

') Sale of lan * sale of lan to aliens ta; re7uire"ents registration re7uire"ents sale of lan ac7uire'y o"estea or free patent

c) Sale of assets > sale of all or su'stantially all of te assets sale in 'ul?) Sale of "otor veicles > registration re7uire"ents

C. Cause or consierationi. /rice certain (Art. 14:% 143 14$ 144)

a) en price certain (Art. 14:% 143 14$)

1



') !ffect wen price not certain (Art. 144)ii. ac? of cause or consieration (Art. 14+%($))iii. 9nae7uacy of te price (Art. 14+)

a)en price inae7uate') !ffect of inae7uate price

* on voluntary sales* on involuntary sales

iv. Si"ulate price (Art. 141)a) en price si"ulate') !ffect of si"ulate price

vi. /ractice notes# cause or consieration* ow pay"ent effecte# cas cec? wire transfer etc.

,. /erfection of contract (Art. 145)i. &ffer an Acceptance (Arts. 1$1%*1$3:)

* stages of a contract of sale* concept of perfection perfection in consensual contracts vs. real contracts* necessity for pay"ent or elivery of ting* necessity for written agree"ent* re7uire"ents for offer an acceptance* ow perfection "ay 'e prove* "anner of pay"ent as a re7uire"ent for perfection* effect of non*pay"ent on perfecte contract

ii. /ay"ent of earnest "oney as proof of perfection (Art. 1483)

iii. /erfection of sale 'y auction (Art. 14:)iv. !;propriation (Art. 1488)

6. Consu""ation of contract

V. Formalities of contract of sale A. 9n General (Arts. 1$5: 148$)

i. er'alii. ritten

B. 6or" re7uire for enforcea'ility# Statute of 6raus (Art. 14+$ 14+5 14+:)i. conceptii. purposeiii. scopeiv. ratification of contract

C. 6or" re7uire for valiity (Art. 1$5:)i. Sale of a piece of lan or any interest terein is "ae troug an agent (Art. 184),. 6or" re7uire for convenience of te parties (Art. 1$58)!. 9te"s to note# !lectronic Co""erce Act6. /ractice notes# for"alities of contract of sale

* notari@ation* consulari@ation or autentication

VI. Covenants: obligations of the seller A. &'ligations uner te Civil Coe

i. 0a?e care of ting pening elivery (Art. 11:$)ii. /ay for e;penses for te e;ecution an registration of te sale unless tere is stipulation to te contrary (art.

148)* practice notes# pay"ent of inco"e ta; sta"p ta; local transfer ta; legal fees egister of ,ees e;pensesiii. 0ransfer ownersip (Arts. 1458 14%5)

a) &wner "ust ave rigt to transfer ownersip (Arts. 145%)') en rigt to transfer ownersip "ust e;ist (Art. 145%)c) How effecte (Arts. 14 148 14%:)

iv. ,eliver te ting wit accessions an accessories (Art. 15$)a) Concept of elivery intention to eliver ') Conse7uence of eliveryc) ,elivery an non*pay"ent of te price) ays of effecting elivery (Arts. 14%*15+1)

* actual elivery* constructive (e;ecution of pu'lic instru"ent traditio symbolica traditio longa manu traditio

brevi manu traditio constitutum possesorium)e) en seller not 'oun to eliver (Arts. 1534 15$: 11%8)

f) 9ncients of elivery* /lace of elivery (Art. 1531)* 0i"e of elivery (Arts. 1531)* !;penses of elivery (Art. 1531)* /roof of elivery

g) Special rules* Contract of sale or return (Art. 15+3)* Contract of sale or approval (Art. 15+3)* ,elivery to carrier (Arts. 15+$ 153$)

B. /ractice notes# usual covenants of te seller

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i. /re*closing covenants# (a) access (') conuct of operations prior to closing (c) approvals () notification to'uyer (e) oters

ii. /ost*closing covenants# (a) confientiality (') covenant not to co"pete (c) anti*poacing covenant ()pay"ent of inco"e ta; (e) oters

iii. Affir"ative covenants an negative covenants

VII. Covenants: obligations of the buyer A. &'ligations uner te Civil Coe

i. Accept elivery (Art. 1583)a) "eaning of acceptance') "oe of "anifesting acceptance (Art. 1585)

* e;press* i"plie

c) elivery 'y install"ents (Art.158$)) rigt to e;a"ine goos prior to elivery (Art. 1584)

* type of elivery conte"plate* purpose of inspection* rigt not a'solute* waiver of rigt* ow rigt e;ercise (ti"e place "anner e;penses)* 'uyerDs rigt to reect goos* Collect on elivery

e) effect of acceptance (Art. 158:)

* acceptance not a 'ar to action for a"ages* notice to seller for 'reac of pro"ise or warranty

f) wen 'uyerDs refusal to accept ustifiewrongful (Arts. 158 1588)ii. /ay te price (Art. 1583)

a) were an wen (Art. 1583)') 'uyerDs lia'ility to pay interest (Art. 158%)c) rigt of venee to suspen pay"ent of price (Art. 15%+)) effect of failure to pay price

B. /ractice notes# usual covenants of te 'uyer i. /re*closing covenants# (a) approvals (') otersii. /ost*closing covenants # (a) pay"ent of sta"p ta; (') o'taining B9 Certificate Autori@ing egistration (c)

otersiii. Affir"ative covenants an negative covenants

VIII. Conditions A. 2eaning of conition (Art. 1545)B. 0ypes of conitions

i. Conitions preceent vs. conitions su'se7uentii. Conitions for perfection vs. conitions for perfor"ance

C. !ffect of non*fulfill"ent of conition,. /ractice notes# conitions in contract of sale

i. Esual contractual conitionsa) Conitions preceent# (i) accuracy of representations (ii) perfor"ance of all covenantsno 'reac (iii)

consents (iv) no litigationsuit (v) elivery of ocu"ents (vi) oters') Conitions su'se7uent

ii. 0i"e fra"e for "eeting conitions# rop ea atelong stop ateiii. esult if closing conition not satisfie# (a) no closing (') closing elaye (c) conition waive an closing

occurs () conition cange to post*closing covenant an closing occurs (e) oters

IX. epresentations and !arranties A. 2eaning of representations an warrantiesB. 0ype of warranties

i. !;press > "eaning effectii. 9"plie > "eaning effect nature wen not applica'le

C. Categories of representations an warrantiesi. elating to te contract itself ii. elating to te su'ect "atter of te contractiii. elating to te parties

,. ,istinguise fro" oter ter"si. Conitions

ii. &pinion ealerDs tal?!. epresentations an warranties of te seller

i. !;press > Art. 154:a) "eaning') ter"inology usec) ti"e of warranty for" sellerDs goo fait

ii. 9"pliea) i"plie warranty of title (Art. 154)

* warranty in case of eviction (Art. 1548*15:+)* "eaning of eviction (Art. 1548)* essential ele"ents of warranty against eviction

$



* eviction vs. trespass in fact* re7uire"ent of final ug"ent uty to appeal (Arts. 155 1558 155% 154%)* venor as party to te suit for eviction (Art. 155%)* effect of prescription (Art. 155+)* rigts an lia'ilities in case eviction occurs rigts in case of partial eviction (Arts. 1555 155:)* waiver of warranty in case of eviction ?ins effect presu"ption (Arts. 1548 155$ 1554)* eviction for nonpay"ent of ta;es (Art. 1551)* uicial sales (Art. 1553)* encu"'rance wit non*apparent 'uren (Art. 15:+)

') i"plie warranty against ien encu"'rances an efects (Art. 154(') 15:1 15:: 153*1581)* re7uisites for warranty against ien efects (Arts. 15:1 15::)* re"eies# accion rei'itoria accion 7uanti "inoris (Arts. 15: 15+)* warranty in sales of ani"als (Arts. 153* 1581)* uicial sales (Art. 15+)

c) i"plie warranty as to fitness or "ercanta'ility or "ercanta'le 7uality (Art. 15:3 15:$ 15:4 15:515+)

* i"plie warranty of 7ualityfitness > particular purpose of goos test sale uner trae na"eusage of trae sale 'y sa"ple re"eies (Art. 15:3*15:4 15:5)

* i"plie warranty of "ercanta'ility"ercanta'le 7uality (Art. 15:3)* re"eies# accion rei'itoria accion 7uanti "inoris (Arts. 15: 15+)

6. epresentations of te 'uyer G. /ractice notes# representations of te seller an te 'uyer

i. 0ypical contractual representations of te seller# (a) corporate e;istence power an autority (') consents no

violation (c) financial state"ents no unisclose lia'ility () "aterial averse cange (e) title (f) litigation (g) otersii. 0ypical contractual representations of te 'uyer iii. en representations "ae (e.g. ti"e of e;ecution ti"e of closing etc.)iv. Bring*own representations > concept wy re7uirev. Survival of representations

X. ules on ris" of loss and deterioration A. 0eories of ris?s of loss

i. 0eory of traition vs. teory of perfectionii. 0eory followe 'y te Spanis Civil Coe an te /ilippine Civil Coe

B. /rinciple of res perit dominoC. ules on ris? of loss an eterioration

i. /rior to perfection of contract

ii. At ti"e of perfection (Arts. 14+%($) 14%$ 14%4)iii. After perfection of contract 'ut 'efore elivery* 6ortuitous event (Art. 148+ 11:$*11:5 13:3*13:$ 13:% 15+4 15$*15$8 118%<1$=)* SellerDs fault (Arts. 148+ 11:5 13:3*13:$ 15+4<3= 15$8 118%)

iv. After elivery (Arts. 15+4 15:8 15:%),. /ractice notes# ris? of loss an eterioration

* rafting notes to aress issues of loss an eterioration

XI. #ctions and remedies for breach of agreement A. 9n general (Art. 15%4)

i. Actions availa'le to seller a) pay"ent of price (Art. 15%5)') a"ages (Arts. 15%:)c) rescission of contract (Art. 15%)

ii. Actions availa'le to te 'uyer a) specific perfor"ance (Art. 15%8)') a"ages (Art. 15%%)

B. e"eies availa'lei. e"eies availa'le to te seller

a) lien on te goos (Arts. 1535*153% 15$5)') rigt of stoppage of goos in transitu (Art. 15$+*15$3 15$5)c) rigt of resale (Art. 15$$)) rigt of rescission (Art. 15$4)e) rescission in case of loss of i""ova'le property (Art. 15%1)(f) rescission in case of sale of "ova'le property (Art. 15%$)

ii. e"eies availa'le to 'uyer a) re"eies in sale of goos 'y escription anor sa"ple (Art. 1481)

') re"eies in case of loss of specific goos (Art. 14%4)c) re"eies in case of elivery of goos less tan te 7uantity contracte (Art. 1533)) re"eies in case of a sale of real property 'y unit of "easure (Arts. 15$% 154+ 1541 154$)e) re"eies in case of sale of real property "ae of a lu"p su" (Arts. 1543 154$)f) suspension of pay"ents (Art. 15%+)g) re"eies in sale of i""ova'le property (Art. 15%3)

C. Special awsi. 0e ecto aw (Arts. 1484*148:) re sale of personal property paya'le in install"ents

a) 0ransactions covere an not covere') /urpose of te lawc) e"eies availa'le to te venor

4



!lection of re"eiesii. 0e 2acea aw (.A. Fo. :553)

a) 0ransactions covere an not covere (Sec. $)') /urpose of te law (Sec. 3)c) igts grante to te 'uyer

* at least two years of install"ents (Sec. $)* less tan two years of install"ents (Sec. 4)* oter rigts of te 'uyer (Secs. 5 :)

) Cancellation of sale 'y te seller * re7uire"ents* perio

e) Calculation of install"ent pay"entsf) Stipulation to te contrary (Sec. )

,. /ractice notes# actions an re"eiesi. 0ypical contractual stipulations in case of 'reacii. Breac of covenantiii. Breac of warranty

XII. $%tinguishment of sale A. 9n generalB. Causes of e;tinguis"ent (Art. 1:++)C. Conventional ree"ption

i. Concept of conventional ree"ption (Art. 1:+1)

ii. Su'ect "atter of conventional ree"ptioniii. ,istinguise fro" option to 'uyiv. /erio to reee" (Art. 1:+:)

a) e;press agree"ent') no e;press agree"entc) court ug"ent# true sale wit rigt to repurcase

iv. !;ercise of rigt to reee"a) ow rigt e;ercise (Art. 1:1:)

* "anner of e;ercise* a"ounts tat soul 'e pai* re7uire"ent of tener of pay"ent an consignation

') wo e;ercises rigt* venor is assigns an eirs

* venorDs creitor (Art. 1:1+)* co*owners an co*eirs (Arts. 1:13 1:1$ 1:14)c) fro" wo" to reee" (Arts. 1:+8 1:15

* venee* veneeDs assigns (Art. 1:+8)* veneeDs eirs (Art. 1:15)

v. !ffect of ree"ption an non*ree"ption (Art. 1:1 1:18 1:+ 1:+% 1:11)* consoliation of ownersip (Art. 1:+)* su'rogation of venee (Art. 1:+%)* ree"ption of entire property (Art. 1:11)* istri'ution of fruits (Art. 1:1)* return free fro" liens an encu"'rances (Art. 1:18)

,. egal ree"ptioni. Conceptii. en applica'le

a) Co*owners (Art. 1:3+)') Aoining lan*owners of rural lan (Art. 1:31)c) Aoining lan*owners of ur'an lan (Art. 1:33)

iii. /erio to reee" (Art. 1:3$)iv. !;ercise of rigt to reee" (Art. 1:3$)v. ee"ptionpre*e"ption uner special laws

a) lan ac7uire uner free patent or o"estea (C.A. Fo. 141 sec. 11%)') e;tra*uicial foreclosure of "ortgage (Act Fo. $1$5 sec. :)c) agricultural lan (.A. Fo. $844 sec. 13)

!. /ractice notes# ter"ination of contract of salei. Grouns for ter"inationii. 2anner of ter"ination

XIII. Special problems in sales A. Sale 'y non*owner (Arts. 55% 15+5 14$4)

i. wen ownersip re7uirea) perfection') consu""ation

ii. rule on ac7uisition of ownersip 'y te 'uyer in case of sale 'y non*owner principle 'ein te rule (ne"o at7uo non a'et)

iii. e;ceptions to te rulea) estoppel') recoring laws

5



c) uicial power an statutory sale) "ercant store

iv. su'se7uent ac7uisition of title (Art. 14$4)iv. rule wit respect to i""ova'le propertyv. status of contract

B. Sale 'y owner wit voia'le title non*owner (Arts. 55% 15+:)i. rule on ac7uisition 'y ownersip 'y te 'uyer principle 'ein te ruleii. Art. 55% in relation to Arts. 15+5 an 15+:

C. ,ou'le sales (Art. 1544)i. re7uisites for applica'ility of Article 1544ii. rules uner Article 1544

a) "ova'les* possession ow ac7uire (see Art. 55%)

') i""ova'les* "eaning of registration* re7uire"ent of goo fait* "eaning of possession* "eaning of olest title

iii. applica'ility of Art. 1544 to unregistere lansiv. Article 1544 an e;ecution sales

XIV. Sale contract distinguished from other contracts A Dacion en pago (Art. 1345)

i. conceptii. istinguise fro" a contract of sale

B. Contract to sellcontract of conitional salei. conceptii. istinguise fro" a contract of sale

C. Agency to 'uy an sell (Art. 14::)i. conceptii. istinguise fro" a contract of sale

,. Contract for a piece of wor? (Art. 14:)i. conceptii. istinguise fro" a contract of sale

!. Barter an e;cange (Arts. 1:$8*1:41 14:8)i. concept (Art. 1:$8)

ii. wen perfecte an consu""ateiii. effect if giver not te lawful owner of ting elivere (Art. 1:$%)iv. effect of eviction (Art. 1:4+)v. test for eter"ining weter transaction is sale or 'arter (Art. 14:8)

6. !7uita'le "ortgage (Arts. 1:+3*1:+5)i. conceptii. pacto e retro vs. "ortgage istinguiseiii. re7uisites for presu"ption tat te transaction is an e7uita'le "ortgage (Arts. 1:+3 1:+4)iv. 'ages of e7uita'le "ortgage (Art. 1:+$)v. effect if contract is an e7uita'le "ortgagevi. re"ey of refor"ation (Art. 1:+5)

H. ,onation (Arts. 35 141)i. concept

ii. istinguise fro" a contract of sale9. ease (Art. 1:4$)i. conceptii. istinguise fro" a contract of sale

I. Assign"ent of creits an incorporeal rigts (Arts. 1:34*1:$)i. conceptii. perfection (Art. 1:34)iii. 'ining effect (Art. 1:3:)iii. nee for e'torDs consent effect of pay"ent 'y e'tor 'efore an after notice (Art. 1:3:)iv. effect of assign"ent of creit on accessory rigts (Art. 1:3) fruits an e;penses (Arts. 1:$3 1:$$)v. warranties of te assignor of te creit

a) in general (art. 1:38)') were e'torDs insolvency guarantee (Art. 1:3%)c) sale of ereitary rigt (Art. 1:$+)) sale of wole of certain rigts rents or proucts (Art. 1:$1)

vi. legal ree"ption in te sale of creit in litigation (Arts. 1:$4 1:$5)

XV. &ocuments of title '#rt. ()*+,()-* A. Concept (Art. 15+)B. 6unction of ocu"ents of titleC. !;a"ples of ocu"ents of title,. Classes of ocu"ents of title!. Fegotia'le ocu"ents of title

i. wo negotiates (Art. 1513)ii. ow negotiate

:



a) 'y elivery (Art. 15+8)') 'y inorse"ent an elivery (Art. 15+%)

iii. effect of negotia'le ocu"ents of title "ar?e non*negotia'le (Art. 151+)iv. effect of negotiation (Art. 151$)

a) rigts ac7uire 'y te 'uyer of te negotia'le ocu"ent of title wen properly negotiate (Art. 151$)') effect were negotiation i"paire 'y 'reac of uty etc. (Art. 1518)c) effect were ocu"ent of title not properly negotiate (Art. 1514 1st par. Art. 1515)

v. warranties 'y seller of te ocu"ents of title (Art. 151:*151)vi. rigts of creitors against te goos (Arts. 151%*153+)

6. Fon*negotia'lei. ow transferre (Art. 1511)ii. effect of transfer (Art. 1514)

XVI. Special /a!s A. /resiential ,ecree Fo. %5 secs. 3$*34B. Bul? Sales aw (Act Fo. $%53)C. etail 0rae i'erali@ation Act (epu'lic Act Fo. 8:3) sec. $ an 5

XVII. Practice notes: overvie! of the typical sale transaction0contract A. at appens in a typical sale transaction

i. ,ue iligenceii. Fegotiation an rafting of contractiii. !;ecution of contract

iv. Co"pliance wit (or waivers of) conitions preceentv. Closingvi. /erfor"ance of post*closing covenants

B. &verview# ow a typical sale an purcase agree"ent loo?s li?ei. /artiesii. ecitalsiii. &perative provisions on saleiv. Conitions for closingv. Covenantsvi. epresentations an warrantiesvii. 0er"inationviii. 2iscellaneous provisionsi;. Signature page

;. Fotari@ation



S#/$S #SSI123$2T #2& #22452C$3$2TSClass #ssignment for 6une (7&n Iune 14 we will cover parts 9 99 an 999 of te course outline. /lease stuy#(a) te following articles of te Civil Coe# Arts. 1458 148% 14%+ 14%1 14%3 [Reference guide: De Leon, pp. 1-18, pp.155-1!" (') te following cases#

1. Coo? vs. 2c2ic?ing 3 /il. 1+ (1%14)3. Cing vs. Goyan?o G.. Fo. 1:58% Fove"'er 1+ 3++:$. ,istao vs. Court of Appeals G.. Fo. 113%54 August 35 3+++4. 6iestan vs. Court of Appeals G.. 81553 2ay 38 1%8+5. 2acariola vs. Asuncion A.2. Fo. 1$$*I 2ay $1 1%83:. alencia vs. Ca'anting A.2. 1$+3 April 3: 1%%1. 6a'illo vs. 9nter"eiate Appelate Court G.. Fo. *:88$8 2arc 11 1%%18. u'ias vs. Batiller G.. Fo. *$5+3 2ay 3% 1%$%. Halili vs Court of Appeals G.. Fo. 11$5$% 2arc 13 1%%8.

/lease also rea te following provisions# Civil Coe Arts. 1$18 1$1% 1$3 1$4*1$5+ 1$%+ 14+%() 6a"ily Coeart. 1%4. 0ere is no nee to rea co""entaries on tese provisions.

Class #ssignment for 6une -(&n Iune 31 we will cover part 999 until part 9.C of te course outline. 9n aition to te "atters tat we ave not finiseiscussing last wee? please stuy#(a) te following articles of te Civil Coe# Arts. 145%*14:5 14:%*144 [Reference guide: De Leon, pp. #-#$, %#-&5, pp.

5%-'" (') te following cases#

1. a. e Ca'alu vs. 0a'u G.. Fo. 18841 Septe"'er 34 3+133. 2elli@a vs. City of 9loilo G.. Fo. *34$3 April $+ 1%:8$. Fational Grains Autority vs. 9nter"eiate Appellate Court G.. Fo. 44+ 2arc 8 1%8%4. Buenaventura vs. Court of Appeals G.. Fo. 13:$: Fove"'er 3+ 3++$5. Heirs of Ereta vs. Heirs of Ereta G.. Fo. 1:548 Septe"'er 14 3+11:. 9ntac vs. Court of Appeals G.. Fo. 1$311 &cto'er 11 3+13. 2ate vs. Court of AppealsG.. Fo. 13+34*35 2ay 31 1%%88. &ng vs. &ng G.. Fo. *:888 &cto'er 8 1%85.

/lease also rea te following provisions# Civil Coe Arts. 1$18(3) 1$1%*1$3: 1$4 1$4% 1$81(4) 14+%($)(4)().0ere is no nee to rea co""entaries on tese provisions.

Class #ssignment for 6une -8&n Iune 38 we will cover part 9.B until part 9.6 of te course outline. 9n aition to te "atters tat we ave notfinise iscussing last wee? please stuy#(a) te following Civil Coe provisions# Arts. 145*14: 1483 1488 [Reference guide: De Leon, pp. '-8&, 1#!-1#1,15& " (') te following cases#

1. o'ern ,evelop"ent Corporation vs. /eopleDs anless Association G.. 1$:33 2arc 11 3+1$ (Art. 145).3. i"?et?ai Sons 2illing 9nc. vs. Court of Appeals G.. Fo. 1185+%. 2arc 3% 1%%: (Art. 145)3. Heirs of 9gnacio vs. Ho"e Ban?ers Savings an 0rust Co"pany G.. 18$ Ianuary 3$ 3+1$ (Art. 145).4. illonco ealty Co"pany vs. Bor"aeco 9nc. G.. Fo. *3:83 Iuly 35 1%5 (Art. 145)5. ,i@on vs. ,i@on G.. Fo. 15:5$% Septe"'er 5 3++ (Art. 14:):. /rovince of Ce'u vs. Heirs of 2orales G.. Fo. 1+115 6e'ruary 1% 3++8 (Art. 14:). 2anila 2etal Container Corporation vs. /ilippine Fational Ban? G.. Fo. 1::8:3 ,ece"'er 3+ 3++: (Art.

1483)./lease also rea te following Civil Coe provisions# Arts. 1$1%*1$3:. 0ere is no nee to rea co""entaries on teseprovisions.

Class #ssignment for 6uly )&n Iuly 5 we will finis part 9.B an will try to cover until part 9.A.iv.(c) of te course outline. 9n aition to te "atterstat we ave not finise iscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 148$ 148 145% 14*148 14%5 [Reference guide: De Leon, pp. 1##-1%#, 15#-15&, #$-%#, 85-88, 1&-1'" (') te following cases#

1. ,alion vs. Court of Appeals G.. Fo. 8%+$ 6e'ruary 38 1%%+ (Art. 1$58)3. i"?et?ai Sons 2illing 9nc. vs. Court of Appeals G.. Fo. 1185+% 2arc 3% 1%%: (Art. 148$)$. &rtega vs. eonaro G.. Fo. *11$11 2ay 38 1%58 (Art. 148$)4. &'aJa vs. Court of Appeals G..Fo. *$:34% 2arc 3% 1%85 (Art. 14)5. &ceo /ere@ K Co. vs. 0e 9nternational Ban?ing Corporation G.. Fo. *1+:58 6e'ruary 14 1%18 (Art. 14%:).

/lease also rea te following Civil Coe provisions# Arts. 11:$ 1$5: 14+$ 14+5 14+:. 0ere is no nee to reaco""entaries on tese provisions.

Class #ssignment for 6uly (-&n Iuly 13 we will finis part an will try to cover until part 9.A.iv.() of te course outline. 9n aition to te "atterstat we ave not finise iscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 14%: 15+5*15+: 15$ 14%*15+1 <eference guie# ,e eon pp. 1*1%311*33+ 3::*3:8 18+*1%:=(') te following cases#

1. Cavite ,evelop"ent Ban? vs. i" G.. Fo. 1$1:% 6e'ruary 1 3+++ (Art. 15+5)8

http://deleonsales2013a.wordpress.com/2013/06/02/class-assignment-for-june14/

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http://href.li/?http://sc.judiciary.gov.ph/jurisprudence/2013/march2013/173622.pdf

http://href.li/?http://sc.judiciary.gov.ph/jurisprudence/2013/january2013/177783.pdf

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http://href.li/?http://sc.judiciary.gov.ph/jurisprudence/2013/january2013/177783.pdf



http://deleonsales2013a.wordpress.com/2013/06/02/class-assignment-for-june14/



3. !,CA /u'lising K ,istri'uting Corp. vs. Santos G.. Fo. 8+3%8 April 3: 1%%+ (Art. 15+:)$. a. e Sar"iento vs. esaca G.. Fo. *15$85 Iune $+ 1%:+ (Art. 14%8)4. Santiago vs. illa"or G.. 1:84%% Fove"'er 3: 3+13 (Art. 14%8)5. illa"ar vs. 2angaoil G.. Fo. 188::1 April 11 3+13 (Art. 14%8):. /ower Co""ercial an 9nustrial Corporation vs. Court of Appeals G.. Fo. 11%45 Iune 3+ 1%% (art. 14%8). /asagui vs. illa'lanca G.. Fo. *31%%8 Fove"'er 1+ 1%5 (Art. 14%8).

/lease also rea te following Civil Coe provisions# Arts. 55% 14$4. 0ere is no nee to rea co""entaries on teseprovisions.

Class #ssignment for 6uly (9&n Iuly 1% we will finis part 9.A.iv.g of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 1534 15$: 1531 15+3 15+$ 153$ <Reference guide: De Leon, pp. #&5-#&, #'&-#'', #%&-#%8, 1$'-#!', #&#-#&5 =(') te following cases#

1. agon vs. Hooven Co"alco 9nustries 9nc.G.. Fo. 1$5:5. Ianuary 1 3++1 (Art. 1531)3. allarta vs. Court of Appeals G.. Fo. *4+1%5 2ay 3% 1%8 (Art. 15+3)$. 9nustrial 0e;tile 2anufacturing Co. of te /ilippines vs. /I !nterprises G.. Fo. ::14+ Ianuary 31

1%%$ (Art. 15+3)4. Ben 2eyer K Co vs. Langco G.. Fo. 1$3+$ Septe"'er 18 1%18 (Art. 153$)5. General 6oos Corporation vs. Fational Coconut Corporation G.. Fo. *81 Fove"'er 3+ 1%5: (Art. 153$):. ,avi vs. 2isa"is &cciental 99 !lectric Cooperative 9nc. G.. Fo. 1%485 Iuly 11 3+13 (Art. 153$).

/lease also rea Article 11%8 of te Civil Coe. 0ere is no nee to rea co""entaries on Article 11%8.

Class #ssignment for 6uly -&n Iuly 3: we will try to cover part 999 of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 1583*15%+ 1545 <Reference guide: De Leon, pp. %5$-%#( %!$-%1#"((') te following cases#

1. 9ntegrate /ac?aging Corporation vs. Court of AppealsG.. Fo. 11511 Iune 8 3+++ (Art. 158$)3. 6ule vs. Court of Appeals G.. Fo. 113313 2arc 3 1%%8 (Arts. 1584 1585 158%)$. ,evelop"ent Ban? of te /ilippines vs. 2erano G.. Fo. 1:++4 6e'ruary 3+11 (Art. 1545)4. i" vs. Court of Appeals G.. Fo. 118$4 &cto'er 34 1%%: (Art. 1545) an5. ,elta 2otors Corporation vs. Genuino G.. Fo. *55::5 6e'ruary 8 1%8% (Art. 1545).

/lease also rea#(a) Sections 5 : an 8 of te sa"ple Stoc? /urcase Agree"ent (pp. $%*44) foun in te 2aterials page of tis site

(') ,HDs Basic &verview of 9ncoter"s 3+1+ foun in te 2aterials page of tis site.

#nnouncement for #ugust - As iscusse we will ave te "i*ter" e;a"ination on August 3.Coverage0e e;a" will cover /arts 1 to : of te course outline. Muestions will 'e source fro" Civil Coe provisions te assignecases te co""entaries an "atters iscusse in class.0e e;a" will not cover# (a) te sa"ple stoc? purcase agree"ent an (') te ,H sipping ter"s (e;cept tat yousoul ?now te concept of 6&B an C96). 0e e;a" will also not cover Arts. 15+5 an 15+: of te Civil Coe (an teassigne cases on tese articles) we will iscuss tese articles in su'se7uent classes.Certain 7uestions (an te correct response to tese 7uestions) assu"e ?nowlege of 'asic provisions of &'ligationsan Contracts. 9n tis regar please ensure tat you ?now wic contracts are rescissi'le voia'le unenforcea'le anvoi.0e purpose of te e;a" is to test# (a) your ?nowlege of legal concepts an octrines an (') your a'ility to apply legalconcepts an octrines to particular situations. As suc 9 will not as? factual "atters a'out te assigne cases (e.g. ateof sale o'ect of te sale a"ount of purcase price etc.). 9t is sufficient to ?now te 'asic fact pattern a'out te casesan wat legal concepts an octrines were applie to te cases.The ;uestionnaire1. 0e 7uestionnaire consists of fifty (5+) "ultiple coice 7uestions (2CMs) nu"'ere 1 up to 5+ containe in eigt (8)pages. !ac 7uestion is wort two points.3. 0e e;a" perio is one our. (0is is si"ilar to te 3+13 'ar e;a"inations in Civil aw were an e;a"inee is giventwo ours to answer 1++ 2CMs.) Fo e;tra ti"e will 'e given to tose wo will arrive late.$. Lour answers soul 'e written in te 'lue 'oo? (not in te 7uestionnaire). &nly answers written in te 'lue 'oo? will'e consiere.4. Lou "ay write on te 7uestionnaire an use it as scratc paper.5. /lease insert te 7uestionnaire insie your 'lue 'oo? an return wit your 'lue 'oo?.: ,o not e;plain any answer in te 'lue 'oo?. 6or e;a"ple in response to 7uestion no. 1 you only nee to write 1.

followe 'y a letter (i.e. a ' c or ) epening on wic is te correct answer.. 9f an answer contains "ore tan one letter no point will 'e given for tat 7uestion. 9n tis regar please "ini"i@eerasures an if you nee to "a?e an erasure please "a?e sure to inicate clearly wat is te final answer.4ther matters1. ,uring te e;a" all 'oo?s notes electronic e7uip"ent 'ags an oter ite"s of possession soul 'e place in frontor at te 'ac? of te classroo". 0e only ite"s on your es? soul 'e te 7uestionnaire te 'lue 'oo? an your pen.3. 9f you finis te e;a" 'efore te en of te e;a" perio you "ay alreay turn over te 'lue 'oo?7uestionnaire anleave te classroo". However if you finis early 9 suggest tat you review your answers 'efore surrenering te 'lue'oo?.9f you ave 7uestions please let "e ?now.Stuy wellN

%



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http://deleonsales2013a.wordpress.com/2013/07/28/announcement-for-august-2/





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Class #ssignment for #ugust (&n August 1: we will try to cover until part 9O.!.i of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) Art. 154: of te Civil Coe <Reference guide: De Leon, pp. %1#-%1'"((') te following cases#

1. Harrison 2otors Corp vs. Favarro G.. Fo. 1$33:% April 3 3+++ (Art. 154:) an3. /ower Co""ercial an 9nustrial Corp. vs. Court of Appeals G.. Fo. 11%45 Iune 3+ 1%% (Art. 154:).

/lease also rea Sections $ an 4 of te sa"ple Stoc? /urcase Agree"ent foun in te 2aterials page of tis site.Here is te list of cases for #ugust -<#

1. Songco vs. Sellner G.. Fo. 1151$. ,ece"'er 4 1%1 (Art. 154)3. 9nvest"ent K ,evelop"ent 9nc. vs. Court of Appeals G.. Fo. *51$ Iune 3 1%88 (Art. 154)$. 2oles vs. 9nter"eiate Appellate Court G.. Fo. $%1$ Ianuary $1 1%8% (Art. 154)4. !scaler vs. Court of Appeals G.. Fo. *43:$: August 1 1%85 (Art. 1548 1558 155%)5. Ey vs. Ari@a G.. Fo. 158$+ August 1 3++:. (Art. 1548 1558 155%):. Muirong vs. ,B/ G.. Fo. 1$441 ,ece"'er $ 3++% (Arts. 1548 155:). Anaya vs. 2anansala G.. Fo. *1414 April $+ 1%:+ (Art. 1554) an8. I2 0uason Co. 9nc vs. Court of Appeals G.. Fo. *413$$ Fove"'er 31 1%%. (Art. 1555).

Class #ssignment for #ugust -<&n August 3$ we will try to cover until part 9O.!.ii.a of te course outline. 9n aition to te "atters tat we ave notfinise iscussing uring te last class please stuy Arts. 154*15:+ of te Civil Coe <Reference guide: De Leon, pp.%1'-%%'".

As previously announce please stuy te following cases#1. Songco vs. Sellner G.. Fo. 1151$. ,ece"'er 4 1%1 (Art. 154)3. 9nvest"ent K ,evelop"ent 9nc. vs. Court of Appeals G.. Fo. *51$ Iune 3 1%88 (Art. 154)$. !scaler vs. Court of Appeals G.. Fo. *43:$: August 1 1%85 (Arts. 1548 1558 155%)4. Ey vs. Ari@a G.. Fo. 158$+ August 1 3++:. (Arts. 1548 1558 155%)5. Muirong vs. ,B/ G.. Fo. 1$441 ,ece"'er $ 3++% (Arts. 1548 155:):. Anaya vs. 2anansala G.. Fo. *1414 April $+ 1%:+ (Art. 1554) an. I2 0uason Co. 9nc vs. Court of Appeals G.. Fo. *413$$ Fove"'er 31 1%%. (Art. 1555).

/lease also rea# (a) Article 14%5 of te Civil Coe an (') Sections $ an 4 of te sa"ple Stoc? /urcase Agree"entfoun in te 2aterials page of tis site.

Class #ssignment for #ugust <*&n August $+ we will try to cover part 9O.!.3.c of te course outline. 9n aition to te "atters tat we ave not finise

iscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 15:1*1581 <Reference guide: De Leon, pp. %%'-%58"((') te following cases#

1. Futri"i; 6ees Corporation vs. Court of Appeals G.. Fo. 15331% &cto'er 35 3++4 (Art. 15:1)3. Supercars 2anage"ent K ,evelop"ent Corporation vs. 6lores G.. Fo. 1481$ ,ece"'er 1+ 3++4 (Arts.

154 15:1 an 15::)$. -nect vs. Court of Appeals G.. Fo. *:5114 6e'ruary 3$ 1%88 (Art. 15:1)4. Consoliate /lywoo 9nustries 9nc. vs. 96C easing an Acceptance Corporation G.. Fo. 35%$ April $+

1%8 (Arts. 15:1. 15:3 15:4 15:: 15:)5. Sc"i K &'erly 9nc. vs. I 2artine@ 6ising Corp. G.. Fo. Fo. 51%8 &cto'er 18 1%88 (Arts 15:1 15:$):. /ilippine Fational Ban? vs. 2ega /ri"e ealty an Holings Corporation G.. Fo. 1$454 &cto'er : 3++8

(Arts. 154 15:1). a 6uer@a 9nc. vs. 0e Honora'le Court of Appeals G.. Fo. *34+:% Iune 38 1%:8 (Arts. 15:: 151)8. 2oles vs. 9nter"eiate Appellate Court G.. Fo. $%1$ Ianuary $1 1%8% (Art. 15:1 151)%. ,e Gu@"an vs. 0oyota Cu'ao 9nc. G.. Fo. 14148+ Fove"'er 3% 3++: (Arts. 15:1 15:: 151)1+. Ang vs. Court of Appeals G.. Fo. 184 Septe"'er 3% 3++8 (Art. 151)11. Coca Cola Bottlers /ilippines 9nc. vs. Court of Appeals G.. Fo. 11+3%5 &cto'er 18 1%%$ (Art. 15:)13. illostas vs. Court of Appeals G.. Fo. %:31 Iune 3: 1%%3 (Art. 151)

0an? you.

Class #ssignment for September &n Septe"'er : we will try to cover part O9.A of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 148+ 14%$ to 14%4 15+4 15$8 15:8*15:% 15%4*15%% <Reference guide:De Leon, pp. 111-118, 11-1%, #!'-#11, #'8-#$, %&$-%51, %85-%$8)(') te following cases#

1. o"an vs. Gri"alt G.. Fo. *3413 April 11 1%+:

3. For?is ,istri'utors 9nc. vs. Court of Appeals G.. Fo. %1+3% 6e'ruary 1%%1$. Crysler /ilippines Corporation vs. Court of Appeals G.. Fo. *55:84 ,ece"'er 1% 1%844. awyerDs Cooperative vs. 0a'ora G.. Fo. *313:$. April $+ 1%:5.

/lease also rea tew following provisions of te Civil Coe# Art. 11:$*11:5 118% 13:3*13:$ 13:% 15$ an 1:$: (reefinition of goos).

Class #ssignment for September (<&n Septe"'er 1$ we will try to cover part O9.B of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 1535*15$5 1481 14%4 1533 15$%*154$ 15%+*15%$ <Reference guide: DeLeon, pp. #&-#'&, 118-1#!, 1#-1%, #%8-#&1, #'$-#8!, %#-%8&"(

1+








(') te following cases#1. isayan Saw"ill Co"pany 9nc. vs. Court of Appeals G.. Fo. 1$1+42arc $ 1%%$ (Art. 15%)3. 2eno@a vs. ,avi G.. Fo. 1455 &cto'er 33 3++4 (Art. 1481)$. iet@ vs. Court of Appeals G.. Fo. 1334:$ ,ece"'er 1% 3++5 (Arts. 15$% 1543)4. Ce'u inlan ,evelop"ent Corporation vs. &ng G.. Fo. 1$315 2ay 31 3++% (Arts. 15$% 1543 154$)5. ,el /rao vs. Car'allero G.. Fo. 148335 2arc $ 3+1+ (Art. 1543).

0an? you.

Class #ssignment for September -*&n Septe"'er 3+ we will try to cover part O99 of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 1484*148: 1:++*1:+1 1:+:*1:3$ <Reference guide: De Leon, pp. 1%#-1&',1&$-15#, %$$-&!%, &%1-&$&"((') epu'lic Act Fo. :553 <Reference guide: De Leon, pp. 1&'-1&$, %8!-%8%, 5&8-55!"((C) te following cases#

1. evy Her"anos 9nc. vs. Gervacio :% /il. 53 (1%$%)(Art. 1484)3. Fonato vs. 9AC 14+ SCA 355 (1%85) (Art. 1484<3=)$. ,elta 2otor Sales Corp vs. Fiu -i" ,uan 31$ SCA 35% (1%%3)(Art. 1484<3=)4. 0aanlangit vs. Soutern 2otors 9nc. 1+1 /il. :+: (1%5)(Art. 1484<$=)5. Fortern 2otors 9nc. vs. Sapinoso $$ SCA $5: (1%+)(Art. 1484<$=):. Cru@ vs. 6ilipinas 9nvest"ent an 6inance Corporation 3$ SCA %1 (1%:8)(Art. 1484<$=). Bor'on 99 vs. Servicewie Specialists 9nc. 358 SCA :$4 (1%%:)(Art. 1484<$=)8. Garcia vs. Court of Appeals :1% SCA 38+ (3+1+)(.A. Fo. :553)

%. Iestra ,evelop"ent an 2anage"ent Corp vs. /acifico 51$ SCA 41$ (3++)(.A. Fo. :553)1+. 2cauglin vs. Court of Appeals 144 SCA :%$ (1%8:)(.A. Fo. :553)11. 2isterio vs. Ce'u State College of Science an 0ecnology 4:1 SCA 133 (3++5)(Art. 1:+:) an13. 6rancisco vs. Boiser $$3 SCA $+5 (3+++)(Art. 1:3$).

/lease also rea# Civil Coe art. 1+88 Co""onwealt Act Fo. 141 sec. 11% Act Fo. $1$5 sec. : epu'lic Act Fo.$844 sec. 13.0an? you.

Class #ssignment for September -+&n September -+ we will try to cover part O9.B of te course outline. 9n aition to te "atters tat we ave not finiseiscussing uring te last class please stuy#(a) te following Civil Coe provisions# Arts. 15+5 15+: 1544 <Reference guide: De Leon, pp. #11-##!, #8!-%!8, 18-#"((') te following cases#

1. SunBroters K Co vs. elasco <CA= 54 &.G. 51+$ (Art. 15+5)3. A@nar vs. Lapiangco G.. Fo. *185$: 2arc $1 1%:5 (Arts. 55% 15+5 15+:)$. !,CA /u'lising K ,istri'uting Corp. vs. Santos G.. Fo. 8+3%8 April 3: 1%%+ (Art. 15+:)4. Car'onnell vs. Court of Appeals G.. Fo. *3%%3 Ianuary 3: 1%: (Art. 1544)5. Ceng vs. Genato G.. Fo. 13%:+ ,ece"'er 3% 1%%8 (Art. 1544):. Consoliate ural Ban? vs. Court of Appeals G.. Fo. 1$31:1 Ianuary 1 3++5 (Art. 1544). ,agupan 0raing vs. 2aca" G.. Fo. *184% 2ay $1 1%:5 (Art. 1544)8. Caru"'a vs. Court of Appeals G.. Fo. *358 6e'ruary 18 1%+ (Art. 1544)%. A'rigo vs. e era G.. Fo. 1544+% Iune 31 3++4 (Art. 1544)10.osaroso vs. ,oria G.. Fo. 1%484: Iune 1% 3+1$ (Art. 1544)11. o"an Catolic Curc vs. /ante G.. Fo. 14118 April 11 3+13 (Art. 1544) an13. Aelfa /roperties 9nc vs. Court of Appeals G.. Fo. 1113$8 Ianuary 35 1%%5.

/lease also rea# Civil Coe arts. 55% 14$4 1345.

Class #ssignment for 4ctober 7&n &cto'er 4 we will finis te rest of te ite"s in te course outline. /lease stuy#(a) te following Civil Coe provisions# Arts. 14::*14:8 1:+3*1:+5 1:34*1:$5 1:$8*1:41 1:4$ 15+*153+<Reference guide: De Leon, pp. 1'-#, &5-5%, &$5-51#, 51-5#!, &!%-&%1, '!#, ##!-#%&( 5#1-5%1"((') te following cases#

1. Celestino K Co"pany vs. Collector G.. Fo. *85+: August $1 1%5: (Art. 14:)3. Co""issioner vs. !ngineering !7uip"ent K Supply Co"pany G.. Fo. *3+44 Iune $+ 1%5 (Art. 14:)$. Muiroga vs. /arsons Harware Co. G.. Fo. *114%1 August 3$ 1%18 (Arts. 14:: 18:8)4. /uyat vs. Arco A"use"ent Co G.. Fo. *45$8 Iune 3+ 1%41 (Arts. 14:: 18:8)5. o vs. -IS !co*6or"wor? Syste" /il. 9nc. G.. Fo. 14%43+ &cto'er 8 3++$ (Art. 1:38):. o'erts vs. /apio G.. Fo. 1::14 6e'ruary % 3++ (Art. 1:+3)7. 2artires vs. Cua G.. 1434+ 2arc 3+ 3+1$ (Arts. 1:+3 3+88)8. Soli Ho"es 9nc. vs. Court of Appeals G.. Fo. 115+1 Iuly 8 1%% (Art. 3+88)%. A. 6rancisco ealty vs. Court of Appeals G.. Fo. 135+55 &cto'er $+ 1%%8 (1%%8)(Art. 3+88)1+. A'illa vs. Go'onseng G.. Fo. 14::51 Ianuary 1 3++3 (Arts. 1:+3 1:+:)11. ,evelop"ent Ban? of te /ilippines vs. egional 0rial Court of 2anila 8: &.G. Fo. : 11$ (1%8).

/lease also rea# Civil Coe arts. 35 141 1345 3+88 /resiential ,ecree Fo. %5 secs. 3$*34 Bul? Sales aw (ActFo. $%53) etail 0rae i'erali@ation Act (epu'lic Act Fo. 8:3) secs. $ an 5.

As &cto'er 4 is our class we "ay nee to e;ten te class a little 'it if necessary to finis te course outline.0an? you.

#nnouncement for 4ctober 9

11

http://href.li/?http://sc.judiciary.gov.ph/jurisprudence/2013/june2013/194846.pdf



http://href.li/?http://sc.judiciary.gov.ph/jurisprudence/2013/june2013/194846.pdf




As iscusse te final e;a" will 'e given on enesay &cto'er %. /lease coorinate wit te &ffice of te CollegeSecretary (&CS) wit respect to te venue of te e;a". 9 will sen te 7uestionnaire to te &CS 'efore enesay. 9ave also re7ueste te &CS to provie a proctor for te essay e;a". 9f any pro'le" arises uring te ay of te e;a"please o not esitate to contact "e.

Coverage

1. 0e 2CM e;a" on Sales will cover te entire course an will 'e given 'y te &ffice of te ,ean.

6or te 2CM e;a" 9 o not ave infor"ation weter so"e of te 7uestions will 'e 'ase on Supre"e Court ecisions.9n te event tat te 7uestion is 'ase on a Supre"e Court ecision (wic we ave opefully ta?en up) your answersoul 'e 'ase on te Supre"e CourtDs ruling (an te applica'le provisions of law) an not on "y view on wat soulave 'een te correct ruling.

3. 0e 7uestions for te essay portion will 'e fro" topics iscusse after te "i*ter"s e;a". 2ost of te 7uestions will'e situational owever so"e of te 7uestions will 'e o'ective (e.g. su""ari@e te rules on PPPPPPPPPPP). 9 will notas? 7uestions on /ractice Fotes.

9n reviewing for te e;a" it woul 'e very i"portant for you to ?now an unerstan te provisions of law. 0is incluesan unerstaning of wen a particular provision applies. 6or e;a"ple# (a) so"e provisions "ay apply only wen te saleinvolves a certain type of property (real vs. personal property) or a particular for" of pay"ent (full pay"ent vs. install"entpay"ent) (') so"e actions an re"eies "ay apply only uner certain situations (e.g. 'uyer is insolvent goos not yetelivere to te 'uyer etc.).

en you review 9 suggest tat you go over te course outline an test your ?nowlege against te ite"s liste in tecourse outline. 6or tose wo were not a'le to finis stuying te class assign"ents 9 suggest tat you finis stuyingte" tis wee?en. 0uesay an enesay soul 'e evote to a review of wat you ave alreay learne.

!ssay e;a"

0e 7uestionnaire consists of twelve (13) 7uestions (nu"'ere 1 to 13) containe in two (3) pages.

Begin your answer to eac nu"'ere 7uestion on a separate page of te 'lue 'oo?.

Answer te 7uestion irectly an concisely. ,o not repeat te 7uestion. rite legi'ly.

/lease write your na"e an stuent nu"'er on te insie 'ac? cover of te 'lue 'oo?. en you are finise wit tee;a" please put te 7uestionnaire insie te 'lue 'oo? an give te 'lue 'oo? to te proctor.

2CM

As state a'ove te 2CM e;a" will 'e given 'y te &ffice of te ,ean.

&ter "atters

,uring te essay e;a" all 'oo?s notes "o'ile pones electronic e7uip"ent 'ags an oter ite"s of possessionsoul 'e place in front or at te 'ac? of te classroo". 0e only ite"s on your es? soul 'e te 7uestionnaire te'lue 'oo? an your pen.

6or te 2CM e;a" please follow te irections tat will 'e given 'y te proctor.

9f you ave 7uestions please let "e ?now.

Stuy wellN

13



Sales: Theory and Practice9. 9ntrouction

A. Governing lawB. History of law on salesC. Source of law on sales

99. Concept of contract of sale A. Concept of sale (Art. 1458)

#rt. (7)8. By te contract of sale one of te contracting parties o'ligates i"self to transfer te ownersip an to eliver a eter"inate

ting an te oter to pay terefor a price certain in "oney or its e7uivalent. A contract of sale "ay 'e a'solute or conitional. (1445a)

B. Caracteristics of contract of saleC. !ssential ele"ents of contract of sale# an overview (Art. 1$18)

#rt. (<(8. 0ere is no contract unless te following re7uisites concur#(1) Consent of te contracting parties(3) &'ect certain wic is te su'ect "atter of te contract($) Cause of te o'ligation wic is esta'lise. (13:1)

i. Consent (Art. 1$1%)#rt. (<(9. Consent is "anifeste 'y te "eeting of te offer an te acceptance upon te ting an te cause wic are to constitutete contract. 0e offer "ust 'e certain an te acceptance a'solute. A 7ualifie acceptance constitutes a counter*offer. Acceptance "ae 'y letter or telegra" oes not 'in te offerer e;cept fro" te ti"e it ca"e to is ?nowlege. 0e contract in suc acase is presu"e to ave 'een entere into in te place were te offer was "ae. (13:3a)

ii. &'ect (Arts. 1$4*1$4%)S!C09&F 3. * &'ect of Contracts#rt. (<7+. All tings wic are not outsie te co""erce of "en incluing future tings "ay 'e te o'ect of a contract. All rigtswic are not intrans"issi'le "ay also 'e te o'ect of contracts.Fo contract "ay 'e entere into upon future ineritance e;cept in cases e;pressly autori@e 'y law. All services wic are not contrary to law "orals goo custo"s pu'lic orer or pu'lic policy "ay li?ewise 'e te o'ect of a contract.(131a)#rt. (<78. 9"possi'le tings or services cannot 'e te o'ect of contracts. (133)#rt. (<79. 0e o'ect of every contract "ust 'e eter"inate as to its ?in. 0e fact tat te 7uantity is not eter"inate sall not 'e ano'stacle to te e;istence of te contract provie it is possi'le to eter"ine te sa"e witout te nee of a new contract 'etween teparties. (13$)

iii. Cause (Art. 1$5+)

S!C09&F $. * Cause of Contracts #rt. (<)*. 9n onerous contracts te cause is unerstoo to 'e for eac contracting party te prestation or pro"ise of a ting or service'y te oter in re"uneratory ones te service or 'enefit wic is re"unerate an in contracts of pure 'eneficence te "ereli'erality of te 'enefactor. (134)

,. -ins of contract of salei. A'soluteii. Conitional

999. /arties to te contract of sale A. /ersons wo "ay enter into a contract of sale (Art. 148%)

#rt. (789. All persons wo are autori@e in tis Coe to o'ligate te"selves "ay enter into a contract of sale saving te"oifications containe in te following articles.

ere necessaries are tose sol an elivere to a "inor or oter person witout capacity to act e "ust pay a reasona'le priceterefor. Fecessaries are tose referre to in Article 3%+. (145a)

B. 0ype of incapacityi. A'soluteii. elative

C. ules applica'le to specific sellersi. 2inors (Art. 1$3 1$%+ 6a"ily Coe art. 3+%)

#rt. (<-+. 0e following cannot give consent to a contract#(1) Ene"ancipate "inors(3) 9nsane or e"ente persons an eaf*"utes wo o not ?now ow to write. (13:$a)#rt. (<9*. 0e following contracts are voia'le or annulla'le even toug tere "ay ave 'een no a"age to te contracting parties#(1) 0ose were one of te parties is incapa'le of giving consent to a contract(3) 0ose were te consent is vitiate 'y "ista?e violence inti"iation unue influence or frau.0ese contracts are 'ining unless tey are annulle 'y a proper action in court. 0ey are suscepti'le of ratification. (n)

#rt. -*9. /ursuant to te natural rigt an uty of parents over te person an property of teir une"ancipate cilren parentalautority an responsi'ility sall inclue te caring for an rearing te" for civic consciousness an efficiency an te evelop"ent ofteir "oral "ental an pysical caracter an well*'eing. (n)

ii. Hus'an an wife (Arts. 14+% 14%+ 14%3)#rt. (7*9. 0e following contracts are ine;istent an voi fro" te 'eginning#(1) 0ose wose cause o'ect or purpose is contrary to law "orals goo custo"s pu'lic orer or pu'lic policy(3) 0ose wic are a'solutely si"ulate or fictitious($) 0ose wose cause or o'ect i not e;ist at te ti"e of te transaction(4) 0ose wose o'ect is outsie te co""erce of "en(5) 0ose wic conte"plate an i"possi'le service(:) 0ose were te intention of te parties relative to te principal o'ect of te contract cannot 'e ascertaine

1$



'+ Those e%pressly prohibited or declared void by la!.0ese contracts cannot 'e ratifie. Feiter can te rigt to set up te efense of illegality 'e waive.

#rt. (79*. 0e us'an an te wife cannot sell property to eac oter e;cept#(1) en a separation of property was agree upon in te "arriage settle"ents or(3) en tere as 'een a uicial separation or property uner Article 1%1. (1458a)

#rt. (79-. 0e proi'itions in te two preceing articles are applica'le to sales in legal ree"ption co"pro"ises an renunciations.(n)

iv. /ersons is7ualifie to 'uy specific properties (Art. 14+% 14%1 14%3)

#rt. (7*9. 0e following contracts are ine;istent an voi fro" te 'eginning#(1) 0ose wose cause o'ect or purpose is contrary to law "orals goo custo"s pu'lic orer or pu'lic policy(3) 0ose wic are a'solutely si"ulate or fictitious($) 0ose wose cause or o'ect i not e;ist at te ti"e of te transaction(4) 0ose wose o'ect is outsie te co""erce of "en(5) 0ose wic conte"plate an i"possi'le service(:) 0ose were te intention of te parties relative to te principal o'ect of te contract cannot 'e ascertaine'+ Those e%pressly prohibited or declared void by la!.0ese contracts cannot 'e ratifie. Feiter can te rigt to set up te efense of illegality 'e waive.

#rt. (79(. 0e following persons cannot ac7uire 'y purcase even at a pu'lic or uicial auction eiter in person or troug te"eiation of anoter#

(1) 0e guarian te property of te person or persons wo "ay 'e uner is guariansip(3) Agents te property wose a"inistration or sale "ay ave 'een entruste to te" unless te consent of te principal as 'eengiven($) !;ecutors an a"inistrators te property of te estate uner a"inistration(4) /u'lic officers an e"ployees te property of te State or of any su'ivision tereof or of any govern"ent*owne or controllecorporation or institution te a"inistration of wic as 'een intruste to te" tis provision sall apply to uges an govern"ente;perts wo in any "anner watsoever ta?e part in te sale(5) Iustices uges prosecuting attorneys cler?s of superior an inferior courts an oter officers an e"ployees connecte wit tea"inistration of ustice te property an rigts in litigation or levie upon an e;ecution 'efore te court witin wose urisiction orterritory tey e;ercise teir respective functions tis proi'ition inclues te act of ac7uiring 'y assign"ent an sall apply to lawyerswit respect to te property an rigts wic "ay 'e te o'ect of any litigation in wic tey "ay ta?e part 'y virtue of teir profession.(:) Any oters specially is7ualifie 'y law. (145%a)

#rt. (79-. 0e proi'itions in te two preceing articles are applica'le to sales in legal ree"ption co"pro"ises an renunciations.(n)

iv. &ter persons,. /ractice notes# parties to contract of sale

i. Hus'an or wifeii. Corporation

S#/$S $VI$=$ =$$> II,III 'update !ith outlineIV. Formation and perfection of contract of sale

#. Consent0offer and acceptancei. 9n general

a) 6or" of offer#rt. (<-). Enless it appears oterwise 'usiness avertise"ents of tings for sale are not efinite offers 'ut "ere invitations to "a?e

an offer.#rt. (<-. Avertise"ents for 'iers are si"ply invitations to "a?e proposals an te avertiser is not 'oun to accept te igest orlowest 'ier unless te contrary appears.

') 6or" of acceptanceii. /ro"ise to 'uy an sell

#rt. (7+9. A pro"ise to 'uy an sell a eter"inate ting for a price certain is reciprocally demandable. An accepted unilateral promise to 'uy or to sell a eter"inate ting for a price certain is binding upon te pro"issor if te pro"ise issupporte 'y a consideration istinct fro" te price.

iii. /ractice notes# offer an acceptance* counterpart signing

?. 4b@ect or sub@ect matter: &$T$3I2#T$A /ICITA $XISTI210F5T5$ 144&SA 4=2$ =0 I1BT T4 T#2SF$4=2$SBIP

i. 0ing "ust 'e determinate a) en ting eter"inate

#rt. (7)8. By te contract of sale one of te contracting parties o'ligates i"self to transfer te ownersip an to deliver adeterminate thing an te oter to pay terefor a price certain in "oney or its e7uivalent. A contract of sale "ay 'e a'solute or conitional.

#rt. (7*. A ting is ,!0!29FA0! !hen it is particularly designated or physical segregated from all other of the same class .0e re7uisite tat a ting 'e eter"inate is satisfie if at te ti"e te contract is entere into te ting is capa'le of 'eing "aeeter"inate !ithout the necessity of a ne! or further agreement bet!een the parties. (n)

&$FI2ITI42 4F &$T$3I2#T$: wen it is particularly esignate or pysical segregate fro" all oter of te sa"e class

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(3) 0ose wic are a'solutely si"ulate or fictitious($) 0ose wose cause or o'ect i not e;ist at te ti"e of te transaction(4) 0ose wose o'ect is outsie te co""erce of "en(5) 0ose wic conte"plate an i"possi'le service(:) 0ose were te intention of te parties relative to te principal o'ect of te contract cannot 'e ascertaine() 0ose e;pressly proi'ite or eclare voi 'y law.0ese contracts cannot 'e ratifie. Feiter can te rigt to set up te efense of illegality 'e waive.

iii. 0ings "ust 'e e%isting goods or future goods (potential e;istence "ere ope of e;pectancy tings in litigation tingssu'ect to a resolutory conition)

#rt. (7(. 0ings aving a potential e%istence "ay 'e te o'ect of te contract of sale.0e efficacy of te sale of a mere hope or e%pectancy is ee"e su'ect to te conition tat te ting will co"e into e;istence. 0esale of a vain ope or e;pectancy is voi.

#rt. (7-. 0e goos wic for" te su'ect of a contract of sale "ay 'e eiter e%isting goods owne or possesse 'y te seller orgoos to 'e "anufacture raise or ac7uire 'y te seller after te perfection of te contract of sale in tis 0itle calle futuregoods.R 0ere "ay 'e a contract of sale of goos wose ac7uisition 'y te seller epens upon a contingency !hich may or maynot happen.

144&S =BICB 3# ?$ TB$ 4?6$CT 4F S#/$:(1) !;isting goos or goos owne or possesse 'y te seller(3) 6uture goos or goos to 'e 2AFE6AC0E!, (li?e te sale of "il? 'ottles to 'e "anufacture wit te na"e of te 'uyer

presse in te glass) A9S!, (sale of te future arvest of palay fro" a rice fiel) or ACME9!, (sale of a efinite parcel oflan te seller e;pects to 'uy) A60! te perfection of te contract of sale

F5T5$ 144&S #S 4?6$CT 4F S#/$ A sale of future goos even toug te contract is in te for" of a present sale is A9, only as an !O!CE0&L contract to

be fulfilled by the ac;uisition and delivery of the goods specified.,G /roperty or goos wic at te ti"e of te sale are not owne 'y te seller 'ut wic tereafter are to 'e ac7uire 'y i" cannotbe the sub@ect of an e%ecuted sale but may be the sub@ect of a contract for the future sale and delivery thereof even toug teac7uisition of te goos epens upon a contingency wic "ay or "ay not appen. enor ASSE2!S 9S- of ac7uiring title an"a?ing te conveyance or responing in a"ages for te veneeDs loss of is 'argain.

(1) /ar. 1 oes not apply if te goos are to 'e "anufacture especially for te 'uyer an not reaily salea'le to oters in te"anufacturerDs regular course of 'usiness. 0e contract in suc case "ust 'e consiere as one for a piece of wor?. ( e.uy a table from a person +o outsources it from some+ere / future good 0* if buy a table from +im +o ma2es itspecifically for me, 34* contract of sale future good but 643*R76* for piece of or2 )

(3) Art. 14:3 conte"plates a contract of sale of S/!C969C goos were one of te parties 'ins i"self to transfer te ownersip

of an eliver a eter"inate ting an te oter to pay a price certain. e7uires tat tere 'e A ,!9!L &6 G&&,Sactual or constructive to 'e applica'le. ,oes not apply to a transaction were tere was no suc elivery neiter was tereany intention to eliver a eter"inate ting.

a) Sale of tings aving a potential e%istence#rt. (7(. 0ings aving a potential e%istence "ay 'e te o'ect of te contract of sale.0e efficacy of te sale of a "ere ope or e;pectancy is ee"e su'ect to te conition tat te ting will co"e into e;istence. 0esale of a vain ope or e;pectancy is voi.

P4T$2TI#/ $XIST$2C$# 9t is reasona'ly certain to co"e into e;istence as te natural incre"ent or usual incient of so"eting ine;istence alreay 'elonging to te seller an te title will vest in te 'uyer te "o"ent te ting co"es into e;istence. (eg. Bii? sa'untis na 'a'oy wine fro" a vine grain a fiel "ay grow "il? of a cow wool fro" a seep wat "ay 'e cast fro" a fiser"anDs netgoowill of a trae)* 0e ting sol "ust 'e S/!C969C an 9,!F0969!,. 0ey "ust also 'e &F!, BL 0H! !F,& at te ti"e.

') Sale of mere hope of e%pectancy#rt. (7(. 0ings aving a potential e;istence "ay 'e te o'ect of te contract of sale.0e efficacy of the sale of a mere hope or e%pectancy is ee"e SEBI!C0 to te conition tat te ting will co"e into e;istence.0e sale of a vain ope or e;pectancy is &9,.* Sale refers to an !O/!C0!, 0H9FG wic is not yet in e;istence an not to te ope or e;pectancy wic alreay e;ists in viewof te conition tat te ting will co"e into e;istence.* A9, even if te ting ope or e;pecte oes not co"e into e;istence EF!SS te ope or e;pectancy is A9F in wic case tesale is &9,* eg. winnings in a uge"ent ope of winning a pri@e in sweepsta?es tic?et

S#/$ 4F TBI21 $XP$CT$& or $3PTI4 $I SP$#T#$ S#/$ 4F B4P$ ITS$/F or $3PTI4 SP$I

Sale of ting not yet in e;istence su'ect to te conition tat teting will e;ist an on failure of te conition te contract'eco"es ineffective an ence te 'uyer as no o'ligation to payte price.

Sale of te ope itself tat te ting will co"e into e;istencewere it is agree tat te 'uyer will pay te price even if te tingoes not eventually e;ist.

6uture ting is certain as to itself 'ut uncertain as to its 7uantityan 7uality. Suc sale is su'ect to te conition tat te ting willco"e into e;istence watever

its 7uantity or 7uality

9t is not certain tat te ting itself will e;ist "uc less its 7uantityan 7uality

Contract eals wit a future ting Contract relates to a ting wic e;ists or is present > te ope ore;pectancy

Sale is su'ect to te conition tat te ting soul e;ist so tatif it oes not tere will 'e no contract 'y reason of te a'sence ofan essential ele"ent

/rouces effect even toug te ting oes not co"e intoe;istence 'ecause te o'ect of te contract is te ope itselfunless it is a vain ope or e;pectancy (li?e sale of falsifiesweepsta?e tic?et wic can never win)

P$S53PTI42 I2 C#S$ 4F &45?T# /resu"ption is in favor of emptio rei speretae wic is in ?eeping wit co""utativecaracter of te contract

1:



o A contract of sale is nor"ally co""utative an onerous# not only oes eac one of te parties assu"e a correlativeo'ligation 'ut suc party anticipates perfor"ance 'y te oter fro" te very start

o ere in a sale te o'ligation of one party can 'e lawfully su'orinate to an uncertain event so tat te oterunerstans tat e assu"es tat ris? of receiving noting for wat e gives as in te case of a sale of opes ore;pectations (emptio spei ) it is not in te usual course of 'usiness to o so ence te contingent caracter of teo'ligation "ust clearly appear.

c) Sale of things in litigation#rt. (<8(. 0e following contracts are rescissi'le#(1) 0ose wic are entere into 'y guarians wenever te wars wo" tey represent suffer lesion 'y "ore tan one*fourt of tevalue of te tings wic are te o'ect tereof(3) 0ose agree upon in representation of a'sentees if te latter suffer te lesion state in te preceing nu"'er($) 0ose unerta?en in frau of creitors wen te latter cannot in any oter "anner collect te clai"s ue te"'7 Those !hich refer to things under litigation if they have been entered into by the defendant !ithout the "no!ledge andapproval of the litigants or of competent @udicial authorityE(5) All oter contracts specially eclare 'y law to 'e su'ect to rescission.

) Sale of tings sub@ect to a resolutory condition#rt. (7). 0ings su'ect to a resolutory condition "ay 'e te o'ect of te contract of sale.

$S4/5T4 C42&ITI42# is an uncertain event upon te appening of wic te o'ligation (or rigt) su'ect to it is e;tinguise.Hence te rigt ac7uire in virtue of te o'ligation is also e;tinguise.

&ne of te o'ligations of te venor is to transfer te ownersip of te ting o'ect of te contract . If the resolutory conditionattacing to te o'ect of te contract wic o'ect "ay inclue tings as well as rigts should happen ten te vendor cannottransfer the o!nership of !hat he sold since there is no ob@ect.

!g. S sol to B parcel of lan wit conition tat S can repurcase wn 3 years B sol lan to C 'efore 3 years S repurcase 'eforeto years Sale of B to C falls.

iv. &wner "ust ave right to transfer o!nership#rt. (7)9. 0e ting "ust 'e licit an te venor "ust ave a right to transfer the o!nership tereof at te ti"e it is delivered .

(1) Seller "ust 'e &F! or AE0H&9T!, 'y owner of te ting sol.* one cannot trans"it or ispose of tat wic oes not 'elong to i" (nemo dat uod non-+abet )* one can sell only wat one owns or is autori@e to sell an te 'uyer can ac7uire no "ore tan wat te seller cantransfer legally

-9 Loo2 at aviera and missing page

(5) ere real property su'ect of unrecore sale su'se7uently "ortgage 'y seller wic "ortgage was registere* 0e "ortgageeDs registere "ortgage rigt over te property is inferior to tat of te 'uyerDs unregistere rigt. 0e unrecore sale'etween te 'uyer an te seller is preferre for te reason tat if te seller (original owner) a parte wit is ownersip of te tingsol ten e no longer a ownersip an free isposal of tat ting so as to 'e a'le to "ortgage it again.

#rt. (7<. 0e sole owner of a ting "ay sell an undivided interest terein.-9 Loo2 at aviera and missing page

a) 9n general

') en rigt to transfer ownersip "ust e;istc) Sale 'y a'solute owner ) Sale 'y co*owner e) Sale 'y agentf) Sale 'y trusteeg) Sale 'y one wit voidable title

#rt. ()*. ere te seller of goos as a voidable title tereto 'ut is title as not been avoided at the time of the sale te 'uyerac7uires a good title to te goos provie e 'uys te" in good faith for value an !ithout notice of te sellerQs efect of title.

$D5ISIT$S F4 V#/I& C42T#CT 4F S#/$:

6or S!!o oia'le title of goos (not &9, 'ecause no rigt fro" te start)

o Fot avoie at ti"e of sale (if annulle no rigt any"ore)

6or BEL!o

Goo faito 6or value

o itout notice of te sellerDs efect of title

) Sale 'y non,o!ner #rt. ()*). Su'ect to te provisions of tis 0itle were goos are sol 'y a person !ho is not the o!ner tereof an wo does notsell them under authority or !ith the consent of the o!ner te 'uyer ac7uires no better title to te goos tan te seller aEF!SS te owner of te goos is by his conduct preclue fro" enying te sellerQs autority to sell.

Foting in tis 0itle owever sall affect#(1) 0e provisions of any factorsH actA recording la!sA or any other provision of la! ena'ling te apparent owner of goos toispose of te" as if e were te true owner tereof(3) 0e valiity of any contract of sale uner statutory po!er of sale or uner te order of a court of competent @urisdiction

1



($) /urcases "ae in a merchantHs storeA or in fairsA or mar"etsA in accorance wit te Coe of Co""erce an special laws.

1$2$#/ 5/$: 9f seller is not owner or as no autority or consent fro" owner 'uyer ac7uires no 'etter title to goos tan teseller a$XC$PTI42: '!stoppel to eny sellerDs autority) 9f 'y conuct of owner e is preclue fro" enying sellerDs autority24T #FF$CT: (oo? at ,e eon an Baviera)

* 6actors acts recoring laws

* Iuicial sale

* /urcase at "ercantDs store "ar?et or fair

v. /ractice notes# o'ect or su'ect "atter of te contracta) Sale of sares > sale of no"inee sares sale at less tan fair "ar?et value sale of sares in a corporation

engage in a partly*nationali@e activity rigt of first refusal pre*e"ptive rigts tag*along rigts rag*along rigts ta;re7uire"ents registration re7uire"ents

') Sale of lan * sale of lan to aliens ta; re7uire"ents registration re7uire"ents sale of lan ac7uire 'yo"estea or free patent

c) Sale of assets > sale of all or su'stantially all of te assets sale in 'ul?) Sale of "otor veicles > registration re7uire"ents

C. Cause or considerationi. /rice certain

a) en price certain#rt. (79. 9n orer tat te price "ay 'e consiere certain it sall 'e sufficient tat it 'e so !ith reference to another thing certain or tat te eter"ination tereof 'e left to the @udgment of a special person or persons.

Soul suc person or persons 'e unable or un!illing to fi% it te contract sall 'e 9F!669CAC9&ES 03L;; te partiessubse;uently agree upon te price.

9f te third person or persons acte in bad faith or by mista"e te C&E0S "ay fi; te price.ere suc tir person or persons are prevente fro" fi;ing te price or ter"s 'y fault of te seller or te 'uyer te party not

in fault "ay ave suc remedies against the party in fault as are allowe te seller or te 'uyer as te case "ay 'e.

=B$2 PIC$ C42SI&$$& C$T#I2(1) Fo sale if price not certain or ascertaina'le.

* /rice ougt to 'e settle for tere can 'e no sale witout a price* 9t "ust 'e capa'le of 'eing ascertaine in "oney or its e7uivalent

U 2&F!L# currency 90S !ME9A!F0# pro"issory notes cec?s an oter "ercantile instru"ents generallyaccepte as representing "oney* 0e fact tat te e;act a"ount to 'e pai for te ting sol is not precisely fi%ed is no 'ar to an action to recover suc

co"pensation provie te contract 'y its ter"s furnises a 'asis for ascertaining te a"ount agree upon. (3) Cases wen price consiere certain* /arties ave fi;e or agree upon a efinite a"ount* 9t 'e reference to anoter ting certain (eg. gas fi;e price nung 'arrel sa worl "ar?et pero gas ini nagfafluctuate in

reference sa 'arrel price certain pa rin yung sa gas usu. !;a"ple ito yung "ga finise prouct na ini fi;e ang price pero yungraw "aterial na ginaga"it para sa ?anila ay fi;e)

$FF$CT =B$$ PIC$ FIX$& ? TBI& P$S42 &$SI12#T$&G!F!A E!# 0e price fi;e 'y a tir person esignate 'y te tir parties is B9F,9FG upon te"!OC!/09&FS#

(1) en tir person acts in BA, 6A90H or 'y 29S0A-! as wen te tir person fi;e te price aving in "in not teting wic is te o'ect of te sale 'ut anoter analogous or si"ilar ting* court can ten fi; te price* 2ere error in uge"ent cannot serve as 'asis for i"pugning te price fi;e

(3) en te tir person isregars specific instructions or te proceure "ar?e out 'y te parties or te ata given i"

tere'y fi;ing an ar'itrary price* court "ay fi; te price

$FF$CT =B$$ PIC$ 24T FIX$& ? TBI& P$S42 &$SI12#T$&

9f reason is tat e !6ES!S or CAFF&0 69O 90 (wout fault of seller or 'uyer)o C&F0AC0 9S 9F!669CAC9&ES as if no price a 'een agree upon !OC!/0 if parties agree on price

9f reason is tat e is /!!F0!, (troug fault of seller or 'uyer)o /arty not in fault "ay o'tain reress against te party in fault# !SC9SS9&F or 6E692!F0 wit a"ages in

eiter caseo 9f 6E692!F0 courts will fi; te price

#rt. (7+-. 0e price of securities grain li7uis an oter tings sall also 'e consiere C!0A9F !hen the price fi%ed is that!hich the thing sold !ould have on a definite day or in a particular e%change or mar"et or wen an amount is fi%ed above orbelo! the price on such day or in such e%change or mar"etA provided said amount be certain.

PIC$ 42 # 1IV$2 &# #T P#TIC5/# 3#>$T- 6ollows te principle in Article 14:% tat a price is consiere C!0A9F if it coul 'e eter"ine wit reference to anoter

ting certain- <rovided said amount be certain. en an a"ount is fi;e above or belo te price on a given ay or in a particular

e;cange or "ar?et te sai a"ount "ust 'e C!0A9F oterwise te sale is inefficacious 'ecause te price cannot 'eeter"ine

- 0is article is especially applica'le to fungi'le tings li?e securities grain li7uis etc. te price of wic are su'ect tofluctuations of te "ar?et

#rt. (7+<. 0e fi;ing of te price can F!! 'e left to te iscretion of one of te contracting parties. However if te price fi;e 'y oneof te parties is accepted by the otherA the sale is perfected.

18



FIXI21 4F PIC$ ? 42$ 4F TB$ C42T#CTI21 P#TI$SA 24T #//4=$&eason: 24 C42S$2T or meeting of minds

(1) 9f consent is essential to a contract of sale te eter"ination of te price cannot 'e left to te iscretion of one of tecontracting parties oterwise it cannot 'e sai tat te oter consente to a price e i not an coul not previously ?now.The validity of compliance of the contact cannot be made to depend upon the !ill of one party.

(3) 2oreover to 'e IES0 te price "ust 'e eter"ine 92/A09AL 'y 'ot parties or left to te uge"ent of a specifieperson or persons.

However. ere te price fi;e 'y one party is accepte 'y te oter te contract is ee"e perfecte 'ecause in tis case teree;ists a true "eeting of "ins upon te price.

') !ffect wen price not certain

#rt. (7+7. ere te price cannot 'e eter"ine in accorance wit te preceing articles or in any oter "anner te contract is9F!669CAC9&ES. However if te ting or any part tereof as 'een delivered to and appropriated 'y te 'uyer e must pay a$#S42#?/$ PIC$ therefore. at is a reasona'le price is a ;uestion of fact dependent on the circumstances of eachparticular case.

$FF$CT 4F F#I/5$ T4 &$T$3I2$ PIC$(1) =+ere contract eecutory . 9f te price cannot 'e eter"ine in accorance wit FCC 14:% an FCC 143 or in any oter

"anner an te 'argain is still e;ecutory te contract is witout effect. /rice certain is an essential ele"ent of te contract ofsale. Conse7uently tere is no o'ligation on te part of te venor to eliver te ting an on te part of te venee to pay.

>#) =+ere delivery +as been made

ii. ac? of cause or consieration#rt. (7*9. 0e following contracts are ine;istent an voi fro" te 'eginning#($) 0ose wose cause or o'ect i not e;ist at te ti"e of te transaction0ese contracts cannot 'e ratifie. Feiter can te rigt to set up te efense of illegality 'e waive.

iii. 9nae7uacy of te price#rt. (7+*. Gross inae7uacy of price does not affect a contract of sale !OC!/0 as it "ay inicate a defect in the consent or tatthe parties really intended a donation or so"e oter act or contract.

a) en price inae7uate1$2$#/ 5/$: ,oes not affect contract of sale$XC$PTI42: 9f it "ay inicate a efect of consent or parties really intene a onation or so"e oter act or contract

') !ffect of inae7uate price* on voluntary sales (sales wit contract etc.)

1$2$#/ 5/$: 2ere inae7uacy of te price or allege arness of te 'argain oes not affect its valiity wen 'ot parties are ina position to for" an inepenent ug"ent concerning te transaction (if free fro" invaliating efects)

A valua'le consieration owever s"all or no"inal if given or stipulate in G&&, 6A90H is in te a'sence of frau

sufficient H!F 0& ,!0!29F! 96 /9C! A,!MEA0!# /rice o'taining at te ate of e;ecution of contract not tose o'taining a

nu"'er of years later H!! & /9C! 9F,9CA0!S ,!6!C0 9F C&FS!F0

o en frau "ista?e or unue influence is present (contract annulle not 'ec. of inae7uacy 'ut 'ec. consent isvitiate)

o Contracts of sale entere into 'y guarians or representatives of a'sentees wenever te wars or a'sentees wo"tey represent suffer !S9&F 'y "ore tan V of te value of te tings wic are te o'ect tereof (!SC9SS9B!)

H!! & /9C! ,&!S F&0 9F,9CA0! ,!6!C0o Fot proven. Allegation of inae7uacy of price "ust 'e proven

o en parties agree on a price as te actual consieration te sale is not si"ulate an terefore vali espiteinae7uacy of price

H!! /9C! S& & AS 0& B! SH&C-9FG 0& C&FSC9!FC!o a "an in is senses an not uner a elusion# Sale "ay 'e set asie an eclare an e7uita'le "ortgage to secure

a loano But were te price pai is "uc iger tan te assesse value of property an sale is effecte 'y a fater to is

augter in wic filial love "ust 'e ta?en into account te price is not to 'e construe as so inae7uate

, on involuntary sales (auction sale uicial sale)$g. A uicial or e;ecution sale is one "ae 'y a court wit respect to te property of a e'tor for

te satisfaction of is ine'teness (e;trauicial foreclosure sale uicial foreclosure sale orinary e;ecution sale)1$2$#/ 5/$: 2ere inae7uacy of price is not a sufficient groun for te cancellation of an e;ecution sale if tere is no sowingtat in te event of a resale a 'etter price can 'e o'taine.

H!! S!! 9S G9!F 0H! 9GH0 0& !/ECHAS! (ali)o aliity is not affecte were te law gives to te owner te rigt to reee" as wen a sale is "ae at pu'lic

auction upon te teory tat te lesser te price te easier it is for te owner to effect te ree"ptiono He "ay reac7uire property or also sell is rigt to reee" an tus recover te loss e clai"s e suffere 'y reason

of te price o'taine at te e;ecution sale$XC$PTI42: ere price is so low as to 'e soc?ing to te conscience ("ay 'e set asie)

iv. Si"ulate price#rt. (7+(. 9f te price is si"ulate te sale is &9, 'ut te act may be sho!n to have been in reality a donationA or some otheract or contract.

a) en price si"ulateSI35/#TI42: &ccurs wen an apparent contract is a eclaration of a fictitious will eli'erately "ae 'y agree"ent of te parties inorer to prouce for te purpose of eception te appearance of a uriical act wic oes not e;ist or is ifferent fro" tat wic wasreally e;ecute

$D5ISIT$S:

An outwar eclaration of will ifferent fro" te will of te parties

1%



0e false appearance "ust ave 'een intene 'y "utual agree"ent 0e purpose is to eceive tir persons

') !ffect of si"ulate price1$2$#/ 5/$: oi if a'solute

(1) 9f contract is not sown to 'e a onation or any oter act or contract transferring ownersip 'ecause te parties o not intento 'e 'oun at all# &wnersip not transferre C&F0AC0 &9, action oes not prescri'e

(3) /urcase price not pai altoug ee of sale states it as 'een pai# FE an &9, for lac? of consieration* Fonpay"ent of price oes not prove si"ulation at "ost it gives te seller te rigt to sue for collection (owever if it isstate in te ee tat it as alreay 'een pai * 0en si"ulate). 9n a contract of sale pay"ent of te price is a resolutoryconition an te re"ey of te seller is to e;act fulfill"ent or in case of su'stantial 'reac to rescin te contract

($) 9f tere is no "eeting of te "ins of te parties as to te price 'ecause te price stipulate in te contract is si"ulate tecontract is &9,. Art. 141 states tat if te price is si"ulate SA! 9S &9,.

$XC$PTI42: ali if (1) en te venor really intene to transfer te ting gratuitously# Sale is &9, 'ut contract A9, as onation(3) 0e fact tat te seller continues to pay realty ta;es on te lan sol even after te e;ecution of te contract oes not

necessarily prove ownersip "uc less si"ulation of sai contract($) !A09! S92EA09&F# en te parties intene to 'e 'oun 'y te contract of sale e;cept tat te ee i not reflect

te actual purcase price. Contract re"ains A9, an !F6&C!AB!.* Su'ect to !6&2A09&F in orer tat te contract "ay e;press te true intention of te parties

v. /ay"ent of earnest "oney#rt. (78-. enever earnest "oney is given in a contract of sale it sall 'e consiere as part of the price an as proof of theperfection of the contract.

$#2$ST 342$ '&4=2P#3$2T: is so"eting of value given 'y te 'uyer to te seller to sow tat te 'uyer is really inearnest an to 'in te 'argain. 9t is actually a partial pay"ent of te purcase price an is consiere proof of te perfection of tecontract.

9t for"s part of te consieration only if te sale is perfecte an te sale is consu""ate upon full pay"ent of te purcaseprice.

Since earnest "oney constitutes an avance or own pay"ent it "ust 'e eucte fro" te total price

By agree"ent te a"ount "ay 'e "erely a eposit of wat woul eventually 'eco"e earnest or ownpay"ent an not aspart of te purcase price or perfection of contract 'ut only as a GEAAF0!! tat te 'uyer woul not 'ac? out. 9f tatDs tecase itDs not really !AF!S0 2&F!L 'ut proof of te concurrence of all essential ele"ents of contract wic esta'lisese;istence of perfecte contract. 0H!! 9S F& SA! H!! 0H! /A09!S S09 HA! 0& AG!! &F 0H! ACC!/0AB! 0!2S &6 /AL2!F0.

A0. 1454. ,elivery of part of te purcase price soul not 'e unerstoo as constituting earnest "oney to 'in teagree"ent in te a'sence of so"eting in te contract sowing tat suc was te intention of te parties

$#2$ST 342$ 4PTI42 342$ '(7+9A par -/art of te purcase price 2oney given as istinct consieration for an option contractGiven only were tere is alreay a perfecte sale Applies to a sale not yet perfecte

A to notes 1483 /g 133

vi. /ractice notes# cause or consieration* ow pay"ent effecte# cas cec? wire transfer etc.

&. Perfection of contractE consummation of contract#rt. (7+). 0e contract of sale is perfecte at te "o"ent tere is a meeting of minds upon te ting wic is te o'ect of tecontract an upon te price. 6ro" tat "o"ent te parties may reciprocally demand performance su'ect to te provisions of te

law governing te for" of contracts.

P$F$CTI42 4F C42T#CT 'follo!s the general rule that contracts are perfected by mere consent'( 3oment of consent

* C&FS!FSEA# 9t is perfect at te "o"ent of consent witout te necessity of any oter circu"stances* /!6!C0!,# At te "o"ent of "eeting of "ins upon 0H9FG (su'ect of contract) an te /9C!* reciprocal o'ligations of te parties arise even wen neiter as 'een elivere

a. Contract not invali "erely 'ecause no signature of venee !ssence of contract is confor"ity of te parties on0!2S of contract an te ACC!/0AFC! 'y one of te offer

'. !;istence of 2E0EA C&FS!F0 ('eing a state of "in) inferre fro" te confluence of 0& AC0Si. An offer certain as to te o'ect of te contract an its consierationii. An acceptance of te offer wic is a'solute in tat it refers to te e;act o'ect an consieration e"'oie

in sai offer (F& C&EF0! &66!)c. 9FCA/AC90A0!,# Fot inco"petent 'y "ere avance years 'ut if tese ave i"paire "ental faculties so as to

prevent a person fro" intelligently protecting is property rigts te 9FCA/AC90A0!,

(3) Conduct of parties: Appropriate conuct "ay sow consenta. Action of parties "ay inicate tat a 'ining o'ligation as 'een unerta?en'. Fo perfecte sale if conitional an conition is not fulfillec. A letter of intent to 'uy an sell is neiter a contract to sell nor a conitional contract of sale

'< Transfer of o!nershipa. Sale 'y itself oes not transfer or affect ownersip. 9t ust creates te o'ligation to transfer ownersip.'. &wnersip is not transferre until te elivery of te ting.c. 0e parties "ay owever stipulate tat te ownersip of te ting even if elivere sall not pass to purcaser until

full pay"ent.(4) 6or" of contract

G!F!A E!# Bining regarless of for"!OC!/09&F# ("ust co"ply wit for")

3+



* 6alls witin Statute of 6raus* 6alls witin any oter applica'le statute wic re7uires a certain for" for its enforcea'ility of valiity

!OA2/!S# Contract of sale in private instru"ent * contract 'ining 'etween parties upon perfection an a party "ay co"pel te oter to

e;ecute a pu'lic instru"ent e"'oying te contract Sale of real estate * egally effective against tir persons only fro" te ate of its registration

(5) Consent reluctantly given Still voluntary A9,

(:) Fotari@e ee of sale states receipt of price 0o overco"e a pu'lic ocu"ent sole"nly e;ecute 'efore te notary pu'lic te evience to te contrary "ust 'e clear

strong an convincing. /A& !9,!FC! not suffice

() ApplicantDs 7ualification to 'uy still su'ect to investigation 2ere application to 'uy 'ecause still su'ect to revocation

(8) Cattel "ortgage of car 'y "ortgagor*'uyer prior to transfer of title to is na"e

,oes not rener te sai "ortgage 'y te 'uyers invali 'ecause te "ortgagors were alreay te owner of te car wen te"ortgage was e;ecute

egistration for transfer "erely a"inistrative proceeing wic oes not 'ear relation to te contract of sale

(%) Breac of contract 'y one party 9nure party "ay sue fulfill"ent or rescission wit pay"ent of a"ages in eiter case iolation of reciprocity 'etween te parties 'rougt a'out 'y a 'reac of o'ligation 'y one of te"

=B$2 &$FI2IT$ #1$$3$2T 42 3#22$ 4F P#3$2T $SS$2TI#/1$2$#/ 5/$: 9t is not te act of pay"ent of price tat eter"ines te valiity of te contract so espite te "anner of pay"entor even 'reac of tat a contract is 'ining$XC$PTI42: (Courts "ay fi; perio or perios of pay"ent were tere is lac? of agree"ent to te sa"e)

(1) 9n 9FS0A2!F0S# Fot perfecte contract of sale if te parties still ave to agree on ow an wen ownpay"ent aninstall pay"ents are to 'e "ae

(3) en parties stipulate tat in aition to te su'ect "atter an te price conitions an ter"s of pay"ent are essentialor "aterial to te contract (usu ter"s an conitions are acciental not essential BE0 not ere)

($) MEA969!, ACC!/0AFC!(4) An agree"ent on te price 'ut a isagree"ent on te "anner of its pay"ent will not result in consent. 0is lac? of

consent is separate an istinct fro" lac? of consieration. An agree"ent on ter"s of pay"ent is integral to te ele"entof a price certain.

$FF$CT 4F F#I/5$ T4 P# STIP5/#T$& PIC$

1$2$#/ 5/$# aliity of contract not vitiateF#I/5$ T4 P# C42SI&$#TI42 /#C> 4F C42SI&$#TI42

0ere is a consieration 'ut it as not 'een pai 0ere is no price & /rice state as pai never 'een pai(si"ulate)

esults in a rigt to e"an fulfill"ent or cancellation of teo'ligation uner an e;isting vali contract

/revents te e;istence of a vali contract

A9, e"an fulfill"ent FE AF, &9, Fo effect

$3$& 4F V$2&4o ,e"an specific perfor"ance or rescission wit a"ages in eiter case

o Best evience of pay"ent of purcase price is official receipt not sales invoices

I1BT 4F 4=2$ T4 FIX BIS 4=2 PIC$

!ven if unreasona'les"all or no"inal consieration it is up to prospective 'uyer to accept or reect it

$. Items to note

i. /erfection of sale 'y auction#rt. (7+. 9n te case of a sale 'y auction#(1) ere goos are put up for sale 'y auction in lots eac lot is the sub@ect of a separate contract of sale.(3) A sale 'y auction is /!6!C0!, !hen the auctioneer announces its perfection by the fall of the hammerA or in othercustomary manner. Entil suc announce"ent is "ae any 'ier "ay retract is 'i an te auctioneer "ay witraw te goosfro" te sale unless te auction as 'een announce to 'e witout reserve.($) A rigt to 'i "ay 'e reserved e%pressly 'y or on 'ealf of te seller EF!SS oterwise provie 'y law or 'y stipulation.(4) ere notice has not been given tat a sale 'y auction is su'ect to a right to bid on behalf of the seller it sall not 'e lawful forte seller to 'i i"self or to e"ploy or inuce any person to 'i at suc sale on is 'ealf or for te auctioneer to e"ploy or inuce

any person to 'i at suc sale on 'ealf of te seller or ?nowingly to ta?e any 'i fro" te seller or any person e"ploye 'y i". Anysale contravening tis rule "ay 'e treate as fraudulent by the buyer . (n)

5/$S 14V$2I21 #5CTI42 S#/$S(1) Sales of separate lots 'y auction are separate sales.- ere separate lots are su'ect of separate 'iings an are separately ?noc?e own tere is a separate contract in regar

to eac lot.- As soon as te a""er falls on te first lot te purcaser of tat lot as a co"plete an separate 'argain. He nee not "ale

anoter.- en te 3n lot is put up an ?noc?e own to te igest 'ier tere is a separate co"plete contract as to te sai lot

weter te 'ier wo secure te first lot or weter anoter person appens to 'e te igest 'ier.

31



- /ossi'le tat te parties "ay su'se7uently consoliate all te purcases into one transaction > as 'y giving a single note > forte aggregate price

(3) Sale perfecte 'y te fall of te a""er - 9n putting up te goos for sale te seller is "erely "a?ing an invitation to tose present to "a?e offers wic tey o 'y

"a?ing 'is one of wic is ulti"ately accepte.- !ac 'i is an offer an te contract is perfecte only 'y te fall of te a""er or in oter custo"ary "anner.- 9t follows tat te 'ier "ay retract is 'i an te auctioneer "ay witraw te goos fro" sale any ti"e 'efore te a""er

falls.- However if te sale as 'een announce to 'e witout reserve te auctioneer cannot witraw te goos fro" sale once a

'i as 'een "ae an te igest 'ier as a rigt to enforce is 'i.

($) igt of seller to 'i in te auction- 0e seller or is agent "ay 'i in an auction sale provie

a. Suc rigt was reserve'. Fotice was given tat te sale is su'ect to a rigt to 'i on 'ealf of te seller

i. 9f no notice# EFA6E 6& S!!* unlawful to 'i eiter irectly or inirectly or for te auctioneer to e"ploy or inuce any person to 'i on'ealf of te seller

ii. !AS&F# /revent puffing or secret 'iing 'y or on 'ealf of te seller 'y people wo are not te"selves'oun* 0e e"ploy"ent of a puffer or 'y 'ier to enance or inflate te price of te goos sol is a 6AE, uponte purcaser an a sufficient groun for relieving i" fro" is 'i an avoiing te sale.* 0is is true even if te e"ploy"ent of te puffer 'y te auctioneer was ;;;

c. igt to 'i 'y te seller is not proi'ite 'y law or stipulation

F&0!S# putol pg 84

ii. !;propriation#rt. (788. 0e e;propriation of property for pu'lic use is governe 'y special laws. (145:)$XP4PI#TI42 4F P4P$T F4 P5?/IC 5S$* 0e proceure for te e;ercise of te power of e"inent o"ain is provie for in ule : &C. !;propriation "ust 'e ecree 'yco"petent autority an for pu'lic use an always upon te pay"ent of ust co"pensation. (Art. 4$5 par. 1 Civil Coe Art. 999 Sec. %C&FS0.)* #rt. 7<). Fo person sall 'e eprive of is property e;cept 'y co"petent autority an for pu'lic use an always upon pay"ent of ust co"pensation. Soul tis re7uire"ent 'e not first co"plie wit te courts sall protect an in a proper case restore te ownerin is possession. ($4%a)Section 9. /rivate property sall not 'e ta?en for pu'lic use witout ust co"pensation.

iii. Iuicial sales#rt. ()7(. 0e provisions of te two preceing articles sall apply to uicial sales. (n)

#rt. ()<9. 0e o'ligation to eliver te ting sol inclues tat of placing in te control of te venee all tat is "entione in tecontract in confor"ity wit te following rules#9f te sale of real estate soul 'e "ae wit a state"ent of its area at te rate of a certain price for a unit of "easure or nu"'er tevenor sall 'e o'lige to eliver to te venee if te latter soul e"an it all tat "ay ave 'een state in te contract 'ut soultis 'e not possi'le te venee "ay coose 'etween a proportional reuction of te price an te rescission of te contract provietat in te latter case te lac? in te area 'e not less tan one*tent of tat state.0e sa"e sall 'e one even wen te area is te sa"e if any part of te i""ova'le is not of te 7uality specifie in te contract.0e rescission in tis case sall only ta?e place at te will of te venee wen te inferior value of te ting sol e;cees one*tent ofte price agree upon.Feverteless if te venee woul not ave 'ougt te i""ova'le a e ?nown of its s"aller area of inferior 7uality e "ay rescinte sale. (14:%a)

#rt. ()7*. 9f in te case of te preceing article tere is a greater area or nu"'er in te i""ova'le tan tat state in te contract tevenee "ay accept te area inclue in te contract an reect te rest. 9f e accepts te wole area e "ust pay for te sa"e at te

contract rate.

iv. Bilateral pro"ise to 'uy an sell#rt. (7+9. A pro"ise to 'uy an sell a eter"inate ting for a price certain is reciprocally e"ana'le. An accepte unilateral pro"iseto 'uy or to sell a eter"inate ting for a price certain is 'ining upon te pro"issor if the promise is supported by a considerationdistinct from the price. (1451a)

< >I2&S 4F P43IS$ T$#T$& I2 TBIS #TIC/$(1) An accepte unilateral pro"ise to sell in wic te pro"isee (acceptor) elects to 'uy(3) An accepte unilateral pro"ise to 'uy in wic te pro"isee (acceptor) elects to sell an($) A 'ilateral pro"ise to 'uy an sell reciprocally accepte in wic eiter of te parties cooses to e;act fulfill"ent

$FF$CT 4F 52#CC$PT$& 52I/#T$#/ P43IS$* Fo uriical effect or legal 'on* /&9C90AC9&F# Enaccepte i"perfect pro"ise or offer

* A perio "ay 'e given to te offeree witin wic to accept te offer.

v. &ptions3$#2I21 4F 4PTI42: is a contractual privilege e;isting in one person for wic e as pai a consieration wic gives i" te rigtto 'uysell for e;a"ple a certain "ercanise or a certain specifie property fro"to anoter person if e cooses at any ti"e witinte agree perio at a fi;e price or uner or in co"pliance wit certain ter"s an conitions.

2#T5$ 4F 4PTI42 C42T#CT(1) An option is a contract. 9t is a preparatory contract separate an istinct fro" te "ain contract itself (su'ect "atter of te

option) wic te parties "ay enter into upon te consu""ation of te option. 9t "erely secures te privilege to 'uysell.(3) 9t gives te party grante te &/09&F or te rigt to ,!C9,! weter or not to enter into a principal contract wile it B9F,S

te party wo as given te option not to enter into a principal contract wit any oter person ,E9FG te agree ti"e an

33



witin tat perio to !F0! into suc contract wit te one to wo" te option was grante if te latter soul ecie to usete option.

- 9GH0 &6 69S !6ESA# wile te o'ect "igt 'e "ae eter"inate te e;ercise of te rigt woul 'e epenent notonly on te grantorDs eventual intention to enter into a 'ining uriical relation wit anoter 'ut also on ter"s incluing teprice tat are yet to 'e fir"e up.

($) &/09&F v !AF!S0# en !AF!S0 2&F!L is given te 'uyer is B&EF, to /AL te 'alance wile te &E,*B!BEL! wo gives &/09&F 2&F!L is not re7uire to 'uy 'ut "ay even forfeit it epening on te ter"s of te option.

- &/09&F 2&F!L B!C&2! !AF!S0 2&F!L# 9f te parties so agree or it "ay actually 'e in te nature of earnest "oneywen consiere wit te oter ter"s or wors use in te contract.

- F&0!# Art. 1483 spea?s of a contract of sale note of earnest given in a contract to sell. !arnest "oney is consiere part ofte purcase price only if te sale is consu""ate upon full pay"ent of te purcase price.

vi. Contract to sellC42T#CT 4& S#/$ C42T#CT T4 S$//0$XC/5SIV$ I1BT #2&

PIVI/$1$ T4 P5CB#S$

Transfer of title 0itle passes to 'uyer upon elivery of te tingsol

90H S09/EA09&F tat ownersip in te ting sall notpass to te purcaser until e as fully pai te price#&wnersip is reserve in te seller an is not to pass untilthe full payment of the purchase90H&E0 S09/EA09&F (especially were te 'uyer too?possession of te property upon e;ecution of contract)# atte parties conte"plate is contract of a'solute sale

Payment ofprice

Fonpay"ent of price is a negative resolutoryconition an re"ey of seller is to e;act

fulfill"ent or to rescin te contract

6ull pay"ent is positive suspensive conition te failure ofwic is not a 'reac casual or serious of te contract 'ut

si"ply an event tat prevents te o'ligation of te venor toconvey title fro" ac7uiring 'ining force.* ere te seller pro"ises to e;ecute a ,ee of a'solutesale upon full pay"ent of te purcase price te agree"entis only a contract to sell.

4!nership ofvendor

enor as lost an cannot recover teownersip of te ting sol an elivere actuallyor constructively EF09 an EF!SS tecontract of sale itself is resolve an set asie

0itle re"ains in te venor if te venee oes not co"ply witte conition preceent of "a?ing pay"ent at te ti"especifie in te contract. 0ere is no actual sale EF!SS anEF09 full pay"ent of te price is "ae

escission ofthe contract

9f te venor soul eect te venee for failure to "eet teconition preceent e is enforcing ;;; (-ulang)

vi. Assign"ent of creits an incorporeal rigts#rt. (-7. An assign"ent of creitors an oter incorporeal rigts sall 'e perfected in accordance !ith the provisions of #rticle

(7+). (n)* 145# "eeting of te "ins

#rt. (-). An assign"ent of a creit rigt or action sall prouce no effect as against third person EF!SS it appears in a publicinstrument or te instrument is recorded in the egistry of Property in case te assign"ent involves real property. (153:)

#rt. (-. 0e e'tor wo before having "no!ledge of the assignment pays is creitor sall 'e released fro" te o'ligation.(153)

#rt. (-+. 0e assign"ent of a creit includes all the accessory rights suc as a guaranty "ortgage plege or preference. (1538)

#rt. (-8. 0e vendor in good faith sall 'e responsible for the e%istence and legality of the credit at te ti"e of te saleEF!SS it soul ave 'een sol as ou'tful 'ut 24T for the solvency of the debtor EF!SS it as 'een so e%pressly stipulatedor EF!SS te insolvency was prior to te sale an of co""on ?nowlege.!ven in tese cases e sall only 'e liable for the price received an for te e%penses specifie in Fo. 1 of Article 1:1:.

0e vendor in bad faith sall always 'e answera'le for te payment of all e%pensesA and for damages. (153%)

#rt. (-9. 9n case te assignor in good faith soul ave "ae i"self responsible for the solvency of the debtor an tecontracting parties soul not ave agree upon te uration of te lia'ility it sall last for one year only fro" te ti"e of teassign"ent if te perio a already e%pired.9f te creit soul 'e paya'le witin a ter" or perio wic as not yet e;pire te liability shall cease one year after the maturity.(15$+a)

#rt. (<*. &ne wo sells an inheritance witout enu"erating te tings of wic it is co"pose sall only 'e ans!erable for hischaracter as an heir. (15$1)

#rt. (<(. &ne wo sells for a lump sum te wole of certain rigts rents or proucts sall co"ply 'y ans!ering for the legitimacyof the !hole in general 'ut e sall not be obliged to !arrant each of te various parts of wic it "ay 'e co"pose !OC!/0 inte case of eviction fro" te wole or te part of greater value. (15$3a)

#rt. (<-. Soul te venor ave profited by some of the fruits or received anything from the inheritance sold e sall pay thevendee tereof if te contrary as not 'een stipulate. (15$$)

#rt. (<<. 0e venee sall on is part reimburse the vendor for all that the latter may have paid for the debts of and chargeson the estate an satisfy te creits e "ay ave against te sa"e EF!SS tere is an agree"ent to te contrary. (15$4)

#rt. (<7. en a creit or oter incorporeal rigt in litigation is sol te e'tor sall ave a right to e%tinguish it 'y reimbursing teassignee for te price te latter pai terefor the @udicial costs incurre 'y i" an te interest on te price fro" te ay on wicte sa"e was pai. A creit or oter incorporeal rigt sall 'e consiere in litigation fro" te time the complaint concerning the same is ans!ered.0e e'tor "ay e;ercise is rigt !ithin thirty days from the date the assignee demands payment fro" i".

3$



#rt. (<). 6ro" te provisions of te preceing article sall 'e !OC!/0!, te assign"ents or sales "ae#(1) 0o a co,heir or co,o!ner of te rigt assigne(3) 0o a creditor in pay"ent of is creit($) 0o te possessor of a tene"ent or piece of lan wic is su'ect to te rigt in litigation assigne.

#rt. (<. 9n te preceing articles in tis 0itle governing te sale of goos unless te conte;t or su'ect "atter oterwise re7uires#(1) R&ocument of title to goods inclues any 'ill of laing oc? warrant R7ueanR or wareouse receipt or orer for te elivery ofgoos or any oter ocu"ent use in te orinary course of 'usiness in te sale or transfer of goos as proof of te possession orcontrol of te goos or autori@ing or purporting to autori@e te possessor of te ocu"ent to transfer or receive eiter 'yenorse"ent or 'y elivery goos represente 'y suc ocu"ent.1oods inclues all cattels personal 'ut not tings in action or "oney of legal tener in te /ilippines. 0e ter" inclues growing

fruits or crops.4rder relating to ocu"ents of title "eans an orer 'y enorse"ent on te ocu"ents.Duality of goods inclues teir state or conition.RSpecific goods "eans goos ientifie an agree upon at te ti"e a contract of sale is "ae. An anteceent or pre*e;isting clai" weter for "oney or not constitutes Rvalue were goos or ocu"ents of title are ta?en eiter insatisfaction tereof or as security terefor.(3) A person is insolvent witin te "eaning of tis 0itle wo eiter as ceased to pay his debts in te orinary course of 'usiness orcannot pay his debts as tey 'eco"e ue weter insolvency proceeings ave 'een co""ence or not.($) Goos are in a deliverable stateR witin te "eaning of tis 0itle wen tey are in suc a state tat te 'uyer woul uner tecontract 'e 'oun to ta?e elivery of te". (n)

#rt. (<+. 0e provisions of tis 0itle are su'ect to te rules lai own 'y te 2ortgage /a! and the /and egistration /a! witregar to i""ova'le property. (15$a)

S#/$S $VI$=$

V. Formalities of contract of sale

#. In 1eneral '#rts. (<)A (78<#rt. (<). Contracts sall 'e obligatoryA in !hatever form tey "ay ave 'een entere into provided all the essential re;uisitesfor teir valiity are present. However wen te la! re7uires tat a contract 'e in so"e for" in orer tat it "ay 'e valid orenforceable or tat a contract 'e proved in a certain !ay tat re7uire"ent is a'solute an inispensa'le. 9n suc cases te rigt ofte parties state in te following article cannot 'e e;ercise. (138a)

#rt. (78<. Su'ect to te provisions of te Statute of Frauds an of any oter applica'le statute a contract of sale "ay 'e "ae in

!riting or 'y !ord of mouth or partly in !riting an partly by !ord of mouth or "ay 'e inferred from the conduct of te parties.(n)

F43 4F C42T#CT 4F S#/$* 0e for" of a contract refers to te "anner in wic it is e;ecute or "anifeste. A contract of sale as no prescri'e for". 9t neenot contain a tecnical escription of te su'ect property real or personal. (Faraya v CA)

(1) 1$2$#/ 5/$: Contract vali in any for" provie all te essential re7uisites are present. 9t "ay 'e in writing it "ay 'eoral it "ay 'e partly in writing an partly oral. 9t "ay even 'e inferre fro" te conuct of parties. Sale is a consensualcontract an is perfecte 'y "ere consent.

$XC$PTI42S:(3) =+ere form is reuired in order t+at a contract may enforceable. 9n case te contract of sale soul 'e covere 'y te Statute

of 6raus te law re7uires tat te agree"ent (or so"e note or "e"oranu" tereof) 'e in writing su'scri'e 'y te partycarge or 'y is agent oterwise te contract cannot 'e enforce 'y action (14+$<3=).

($) =+ere form is reuired in order t+at a contract may be valid . ere te applica'le statute re7uires tat te contract of sale'e in a certain for" for its valiity te re7uire for" "ust 'e o'serve in orer tat te contract "ay 'e 'ot vali anenforcea'le (Art. 1$5:)

(4) =+ere form is reuired only for t+e convenience of t+e parties. 9n certain cases a certain for" (ie. pu'lic instru"ent) isre7uire for te convenience of te parties in orer tat te sale "ay 'e registere in te egistry of ,ees to "a?e effectiveas against tir persons te rigt ac7uire uner suc sale. As 'etween te contracting parties te for" is not inispensa'lesince tey are allowe 'y law to co"pel eac oter to o'serve tat for" (1$5 1$58<1=). Hence te fact tat te ,ee of Saleof a parcel of lan still a to 'e signe an notari@e an recore in te egistry of ,ees oes not "ean tat no contracta alreay 'een perfecte. A sale of lan is vali regarless of te for" it "ay ave 'een entere into as long as tere7uisites for a vali contract of sale are present.

&n te oter an te fact tat a ee of sale is a notari@e ocu"ent oes not necessarily ustify te conclusion tat te saisale is a true conveyance to wic te parties tereto are irrevoca'le 'oun. 0oug its notari@ation vests in its favor te presu"ptionof regularity an ue e;ecution >?an@ano v <ere@), it is not te function of te notary pu'lic to valiate an "a?e 'ining an instru"entnever intene 'y te parties to ave any 'ining legal effect upon te".

0e intention of te parties still an always is te pri"ary consieration in eter"ining te true nature of te contract. erete venor i not personally appear 'efore te notary pu'lic suc fact raises ou't regaring te venorDs consent to te salenotwitstaning tat te ee states te contrary.

An invalily notari@e ee of sale "ust 'e consiere "erely as a private ocu"ent. !ven if valily notari@e te ee woulstill 'e classifie as a private ocu"ent if it is "erely su'scri'e an sworn to 'y way of Aurat 'ut was not properly ac?nowlege.

i. er'al

ii. ritten

?. Form re;uired for enforceability: Statute of Frauds '#rt. (7*<A (7*)A (7*

34



#rt. (7*<. 0e following contracts are 52$2F4C$#?/$ unless tey are #TIFI$&#(1) 0ose entere into in te na"e of anoter person 'y one wo as 'een given no autority or legal representation or wo as acte'eyon is powers(3) 0ose tat o not co"ply wit te Statute of 6raus as set fort in tis nu"'er. 9n te following cases an agree"ent ereafter "aesall 'e unenforcea'le 'y action unless te sa"e or so"e note or "e"oranu" tereof 'e in writing an su'scri'e 'y te partycarge or 'y is agent evience terefore of te agree"ent cannot 'e receive witout te writing or a seconary evience of itscontents#

(a) An agree"ent tat 'y its ter"s is not to 'e perfor"e witin a year fro" te "a?ing tereof(') A special pro"ise to answer for te e't efault or "iscarriage of anoter(c) An agree"ent "ae in consieration of "arriage oter tan a "utual pro"ise to "arry() An agree"ent for te sale of goos cattels or tings in action at a price not less tan five unre pesos unless te

'uyer accept an receive part of suc goos an cattels or te eviences or so"e of te" of suc tings in action or pay at te ti"eso"e part of te purcase "oney 'ut wen a sale is "ae 'y auction an entry is "ae 'y te auctioneer in is sales 'oo? at teti"e of te sale of te a"ount an ?in of property sol ter"s of sale price na"es of te purcasers an person on wose accountte sale is "ae it is a sufficient "e"oranu"

(e) An agree"ent of te leasing for a longer perio tan one year or for te sale of real property or of an interest terein(f) A representation as to te creit of a tir person.

($) 0ose were 'ot parties are incapa'le of giving consent to a contract.

#rt. (7*). Contracts infringing te Statute of 6raus referre to in Fo. 3 of Article 14+$ are ratified 'y te failure to o'ect to tepresentation of oral evience to prove te sa"e or 'y te acceptance of 'enefit uner te".

#rt. (7*. en a contract is enforcea'le uner te Statute of 6raus an a pu'lic ocu"ent is necessary for its registration in teegistry of ,ees te parties "ay avail te"selves of te rigt uner Article 1$5.

i. 6oncept Ener te Statute of 6raus te following contracts "ust 'e in writing oterwise tey sall 'e unenforcea'le 'y action#

(a) Sale of personal property at a price not less tan /5++.++(') Sale of real property or of an interest terein regarless of te price involve(c)Sale of property not to 'e perfor"e witin a year fro" te "a?ing tereof regarless of te nature of te property an te

price involve.

S#/$ 4F $#/ P4P$T 4 #2 I2T$$ST TB$$I2.(1) A sale of a piece of lan or interest terein wen "ae t+roug+ an agent is voi unless te agentDs autority is in writing. (Art.

184)(3) 6or te sale of real property to 'e effective against tir persons te sale "ust 'e registered in t+e Registry of Deeds (or

/roperty) of te province or city were te property is locate. 0e sale "ust 'e in a pu'lic ocu"ent (eg. ac?nowlege'efore a notary pu'lic or any pu'lic officer autori@e 'y law to a"inister oat) for oterwise te registration will 'e refuse.

($) 0e real purpose of registration of a contract of sale 'eing to give notice to tir persons an to protect te 'uyer againstclai"s of tir persons arising fro" su'se7uent alienations 'y te venor it is certainly not necessary to give efficacy to te

ee of sale as 'etween te parties to te contract an teir privies 'ecause actual notice is euivalent of registration. 9t issettle tat registration is not a "oe of ac7uiring ownersip.(4) 0e sale of lan in a private instru"ent is A9, an B9F,9FG upon te parties for te ti"e*onore rule is tat even a

verbal contract of sale of real estate prouces legal effects 'etween te parties since sale is a consensual contract an isperfecte 'y "ere consent.

(5) 0e fact tat te notari@ation of a ee of sale of real property is false is of no conse7uence for it need not be notari@ed it isenoug tat it 'e in writing.

34&$ 4F S#TISF#CTI42 4F TB$ ST#T5T$ 4F F#5&S0e statute specifies $ ways in wic contracts of sales of goos witin its ter"s "ay 'e 'ining na"ely#

(1) 0e giving of a "e"oranu"(3) Acceptance an receipt of part of te goos (or tings in action) sol an actual receipt of te sa"e (art. 1585)($) /ay"ent or acceptance at te ti"e so"e part of te purcase price

0e re7uire"ent of a "e"oranu" is o'viously suita'le eiter for a contract to sell or a sale. 0e oter 3 "oes of satisfaction

see" "ore naturally to apply to sales tan to e;ecutory contracts.0e Statute of 6raus applies not only to goos 'ut to tings in action as well. 0us an assign"ent of creit at a price not less

tan /5++.++ is witin te operation of te Statute.

ii. <urpose0e purpose of te Statute of 6raus is to prevent frau an perury in te enforce"ent of o'ligations epening for teir evienceupon te unassiste "e"ory of witnesses 'y re7uiring certain enu"erate contracts an transactions to 'e evience in writing.(Clauel v CA)

iii. ;cope0e Statute of 6raus refers to specific ?ins of transactions an cannot apply to any oter transaction tat is not enu"erate

terein. 0e application of te Statute presupposes te e;istence of a perfecte contract. A rigt of first refusal is not a"ong toseliste as unenforcea'le uner te statute.

At 'est it is a contractual grant not of te sale of te property involve 'ut of te rigt of first refusal over te property sougtto 'e sol. Hence a rigt of first refusal nee not 'e written to 'e enforcea'le an "ay 'e proven 'y oral evience. (osencor v

9n7uing)

ST#T5T$ 4F F#5&S #PP/IC#?/$ 42/ T4 $X$C5T4 C42T#CTS0e Statute of 6raus is applica'le only to e;ecutory contracts (were no perfor"ance ie. elivery an pay"ent as as yet

'een "ae 'y 'ot parties) an not to contracts !hich are totally 'consummated or partially performed.9t oes not for'i oral evience to prove a co"plete e;ecute or partially consu""ate sale.

$#S42: 0e reason is tat te partial perfor"ance li?e te writing furnises relia'le evience of te intention of te parties or tee;istence of te contract.

A contrary rule woul result in inustice or unfairness to te party wo as perfor"e is o'ligation an woul pro"ote frauan 'a fait on te part of te party wo as not perfor"e is o'ligation for it woul ena'le i" to ?eep te 'enefits alreay erive'y i" fro" te transaction an at te sa"e ti"e evae te responsi'ilities or lia'ilities assu"e or contracte 'y i".

35



CIC53ST#2C$S I2&IC#TI21 P#TI#/ P$F43#2C$. ere tere is partial perfor"ance of a parol contract of sale of realtyte principle e;cluing evience of suc contract oes not apply.

&ter circu"stances inicating partial perfor"ance of an oral contract of sale of realty are relin7uis"ent of rigts continuepossession 'y a purcaser wo is alreay in possession 'uiling or i"prove"ents tener of pay"ent renition of services pay"entof ta;es surveying of te lan at te veneeDs e;pense an acceptance of initial pay"ent.

#PP/IC#TI42 P$S5PP4S$S $XIST$2C$ 4F # P$F$CT$& C42T#CT. 0e application of te Statute of 6raus presupposeste e;istence of a perfecte contract an re7uires only tat a note or "e"oranu" su'scri'e 'y te party carge or 'y is agent 'ee;ecute in orer to co"pel uicial enforce"ent. ere tere is no perfecte contract tere is no 'asis for te application of teStatute.

iv. Ratification of contract

#rt. (7*). Contracts infringing te Statute of 6raus referre to in Fo. 3 of Article 14+$ are #TIFI$& 'y te failure to ob@ect to thepresentation of oral evidence to prove the same or 'y te acceptance of benefit uner te".

P4C$&5$: Contracts infringing te Statute of 6raus are ratifie wen te efense fails to o'ect to te introuction of parolevience or as?s 7uestions on cross*e;a"ination wic elicits evience proving te e;istence of a perfecte contract of sale.(i"?et?ai v CA)

P#4/ $VI&$2C$ 5/$ '(989 $VIS$& 5/$S 42 $VI&$2C$S$C. 9. Evidence of written agreements. > en te ter"s of an agree"ent ave 'een reuce to writing it is consiere ascontaining all the terms agree upon an tere can 'e 'etween te parties an teir successors in interest no evidence of suchterms other than the contents of the !ritten agreement.'1$2$#/ 5/$

However a party may present evidence to "oify e;plain or a to te ter"s of te written agree"ent if e puts in issue inis pleaing# '$XC$PTI42S

(a) An intrinsic a"'iguity "ista?e or i"perfection in te written agree"ent(') 0e failure of te written agree"ent to e;press te true intent an agree"ent of te parties tereto(c) 0e valiity of te written agree"ent or () 0e e;istence of oter ter"s agree to 'y te parties or teir successors in interest after te e;ecution of te written

agree"ent.0e ter" agree"ent inclues wills. (a)

C. Form re;uired for validity '#rt. (<)#rt. (<). Contracts sall 'e o'ligatory in watever for" tey "ay ave 'een entere into provie all te essential re7uisites forteir valiity are present. However wen te law re7uires tat a contract 'e in so"e for" in orer tat it "ay 'e vali or enforcea'le ortat a contract 'e prove in a certain way tat re7uire"ent is a'solute an inispensa'le. 9n suc cases te rigt of te parties statein te following article cannot 'e e;ercise. (138a)

i. ;ale of a piece of land or any interest t+erein is made t+roug+ an agent >7rt. 18&)

#rt. (8+7. en a sale of a piece of lan or any interest terein is troug an agent te autority of te latter sall 'e in writingoterwise te sale sall 'e void. (n)

&. Form re;uired for convenience of the parties '#rt. (<)8#rt. (<)8. 0e following "ust appear in a P5?/IC &4C53$2T#(1) Acts an contracts wic ave for teir o'ect te creation trans"ission "oification or e;tinguis"ent of real rigts overi""ova'le property sales of real property or of an interest terein a governe 'y Articles 14+$ Fo. 3 an 14+5(3) 0e cession repuiation or renunciation of ereitary rigts or of tose of te conugal partnersip of gains($) 0e power to a"inister property or any oter power wic as for its o'ect an act appearing or wic soul appear in a pu'licocu"ent or soul preuice a tir person(4) 0e cession of actions or rigts proceeing fro" an act appearing in a pu'lic ocu"ent. All oter contracts were te a"ount involve e;cees five unre pesos "ust appear in writing even a private one. But sales ofgoos cattels or tings in action are governe 'y Articles 14+$ Fo. 3 an 14+5. (138+a)

$. Items to note: $lectronic Commerce #ctT4 24T$.#. 8+9- * AF AC0 /&9,9FG AF, ES! &6 !!C0&F9C C&22!C9A AF, F&F*C&22!C9A 0AFSAC09&FS/!FA09!S 6& EFA6E ES! 0H!!&6 AF, &0H! /E/&S!S (Iune 14 3+++)

/$1#/ $C412ITI42 4F $/$CT42IC &#T# 3$SS#1$S #2& $/$CT42IC &4C53$2TS(1) aliity an enforcea'ility (9nfor"ation not enie ! solely on te groun tat it is in te for" of an electronic ata "essage

or electronic ocu"ent purporting to give rise to suc legal effect > Sec. :)* !lectronic ocu"ents sall ave te legal effect valiity or enforcea'ility as any oter ocu"ent or legal writing.

o A re7uire"ent uner law tat infor"ation is in writing is SA09S69!, if te infor"ation is in te for" of anelectronic ata "essage or electronic ocu"ent

o A re7uire"ent uner law for a person to provie infor"ation in writing to anoter person is satisfie 'y teprovision of te infor"ation in an electronic ata "essage or electronic ocu"ent

o A re7uire"ent uner law for a person to provie infor"ation to anoter person in a specifie non*electronic for"is satisfie 'y te provision of te infor"ation in an electronic ata "essage or electronic ocu"ent if teinfor"ation is provie in te sa"e or su'stantially te sa"e for"

o Foting li"its te operation of any re7uire"ent uner law for infor"ation to 'e poste or isplaye in specifie"anner ti"e or location or for any infor"ation or ocu"ent to 'e co""unicate 'y a specifie "eto unlessan until a functional e7uivalent sall ave 'een evelope installe an i"ple"ente

(3) 9ncorporation 'y reference* 9nfor"ation sall not 'e enie valiity or enforcea'ility solely on te groun tat it is not containe in an electronic ata

"essage or electronic ocu"ent 'ut is "erely incorporate 'y reference in tat electronic ata "essage.($) rit ing

3:



* ere te law re7uires a ocu"ent to 'e in writing or o'liges te parties to confor" to a writing or proviesconse7uences in te event infor"ation is not presente or retaine in its original for" an electronic ocu"ent is sufficientif te latter#

o "aintains its integrity an relia'ility an

o can 'e autenticate so as to 'e usa'le for su'se7uent reference in tat#

i. it as re"aine co"plete an unaltere apart fro" te aition of any enorse"ent an anyautori@e cange or any cange wic arises in te nor"al course of co""unication storage anisplay an

ii. it is relia'le in te ligt of te purpose for wic it was generate an in te ligt of all relevantcircu"stances.

(4) &riginal* ere te law re7uires tat a ocu"ent 'e presente or retaine in its original for" tat re7uire"ent is "et 'y anelectronic ocu"ent or electronic ata "essage if*

o i. 0ere e;ists a relia'le assurance as to te integrity of te electronic ocu"ent or electronic ata "essage fro"

te ti"e wen it was first generate in its final fro" an suc integrity is sown 'y evience aliunde (ifferentevience tan ocu"ent itself) an

o ii. 0e ocu"ent or "essage is capa'le of 'eing isplaye to te person to wo" it is to 'e presente#

o 6or te purpose of (i) a'ove#

(a) te criteria for assessing integrity sall 'e weter te infor"ation as re"aine co"plete anunaltere apart fro" te aition of any enorse"ent an any cange wic arises in te nor"alcourse of co""unication storage an isplay an

(') te stanar of relia'ility re7uire sall 'e assesse in te ligt of purpose for wic teinfor"ation was generate an in te ligt of all te relevant circu"stances.

* An electronic ata "essage or electronic ocu"ent "eeting an co"plying wit te re7uire"ents of Sec. : or of A8%3 sall 'e te 'est evience of te agree"ent an transaction containe terein.

(5) Sole"n contracts* Fo provision of .A. 8%3 sall apply to vary any an all re7uire"ents of e;isting laws on for"alities re7uire in te

e;ecution of ocu"ents for teir valiity.* Hence wen te law re7uires tat a contract 'e in so"e for" in orer tat it "ay 'e vali or enforcea'le or tat a

contract is prove in a certain way tat re7uire"ent is a'solute an inispensa'le.

/$1#/ $C412ITI42 4F $/$CT42IC SI12#T5$S* An electronic signature relating to an electronic ocu"ent or ata "essage sall 'e e7uivalent to te signature of a person on awritten ocu"ent if te signature#(1) 9s an electronic signature is efine in Sec. :(g) of te ules(3) is prove 'y sowing tat a prescri'e proceure not altera'le 'y te parties intereste in te electronic ocu"ent or ata"essage e;iste uner wic#

(a) A "eto is use to ientify te party sougt to 'e 'oun an to inicate sai partyDs access to te electronic ocu"ent ofelectronic ata "essage necessary for is consent or approval troug te electronic signature

(') Sai "eto is relia'le an appropriate for te purpose for wic te electronic ocu"ent or electronic ata "essage wasgenerate or co""unicate in ligt of all circu"stances incluing any relevant agree"ent

(c) 9t is necessary for te party sougt to 'e 'oun in orer to procee furter wit te transaction to ave e;ecute orprovie te electronic signature an

() 0e oter party is autori@e an ena'le to verify te electronic signature an to "a?e te ecision to procee wit tetransaction autenticate 'y te sa"e.

0e parties "ay agree to aopt supple"entary or alternative proceures provie tat te re7uire"ent of paragrap (') areco"plie wit

C43352IC#TI42 4F $/$CT42IC &#T# 3$SS#1$S #2& $/$CT42IC &4C53$2TS>1) Bormality and validity of electronic contracts

* &ffer an acceptance an oter re7uire"ents for for"ality an valiity "ay 'e e;presse in electronic or can 'e proveelectronic

* !;cept if stipulate

>#) 6onsummation of electronic transactions it+ ban2s* !lectronic transactions troug 'an?s is C&FSE22A0!, uner 9 of BS/ upon actual dispensing of cas+ or t+e debitof one account and t+e corresponding credit to anot+er, +et+er suc+ transaction is initiated by t+e depositor or by anaut+ori@ed collecting party (applies to A02 transactions)

* All electronic transactions involving 'an?s 7uasi*'an?s trust entities an oter institutions uner supervision of BS/ sall'e covere 'y 9 issue 'y BS/

>%) Recognition by parties of electronic data message* !lectronic eclaration of will or oter state"ent 'etween originator an aressee will not enie legal effect valiity or

enforcea'lity

F. Practice notes: formalities of contract of sale* notari@ation* consulari@ation or autentication

VI. Covenants: obligations of the seller

#. 4bligations under the Civil Code

PI2CIP#/ 4?/I1#TI42S 4F TB$ V$2&4(1) to transfer te ownersip of te eter"inate ting sol(3) to eliver te ting wit its accessions an accessories if any in te conition in wic tey were upon te perfection of te

contract($) to warrant against eviction an against ien efects(4) to ta?e care of te ting pening elivery wit proper iligence(5) to pay for te e;penses of te ee of sale unless tere is a stipulation to te contrary

3



i. Ta"e care of thing pending delivery '#rt. ((<#rt. ((<. !very person o'lige to give something is also o'lige to ta?e care of it !ith the proper diligence of a good father of afamily EF!SS te la! or te stipulation of te parties re7uires anoter stanar of care. (1+%4a)

ii. Pay for e%penses for the e%ecution and registration of the saleA unless there is stipulation to the contrary'art. (78+

#rt. (78+. 0e e;penses for te e;ecution an registration of te sale sall 'e 'orne 'y te venor unless tere is a stipulation to tecontrary. (1455a)

$XP$2S$S F4 $X$C5TI42 #2& $1IST#TI42

* enor as uty to pay not only te e;penses for te e;ecution of te sale 'ut also for te registration of te sa"e in te a'sence ofany agree"ent 'etween te parties to te contrary (ie. e;ecute an eliver te ee of a'solute sale an certificate of title)* !;penses incurre SEBS!ME!F0 to te transfer of te title are to 'e 'orne 'y te 'uyer EF!SS cause 'y te fault of te seller(ie. su'se7uent e;penses# pay"ent for notari@ing te ee an o'taining a new certificate title)

* practice notes# pay"ent of inco"e ta; sta"p ta; local transfer ta; legal fees egister of ,ees e;penses

iii. Transfer o!nership '#rts. (7)8A (79)#rt. (7)8. By te contract of sale one of the contracting parties obligates himself to transfer the o!nership an to eliver aeter"inate ting an te oter to pay terefor a price certain in "oney or its e7uivalent.

A contract of sale "ay 'e a'solute or conitional.

#rt. (79). 0e vendor is bound to transfer the o!nership of an eliver as well as warrant te ting wic is te o'ect of te sale.(14:1a)

24T$S:(1) &wnersip 'y venor at time of perfection of contract not essential.

• 9t is sufficient tat e as a rigt to transfer te ownersip tereof at the time it is delivered.

• 0e o'ligation to transfer ownersip an to eliver is really implied in every contract of sale

• &ne wo sells something he does not $T o!n is bound by the sale wen e ac7uires it later.

• en a property 'elonging to a person is unlawfully ta?en 'y anoter te for"er as te rigt of action against te latterfor te recovery of te property. Suc rigt "ay 'e transferre 'y te sale or assign"ent of te property an tetransferee can "aintain suc action against te wrongoer.

(3) 0ransfer not essential to perfection of contract

• But if te seller does not deliver at te ti"e stipulate te 'uyer "ay as? for te rescission of te contract or fulfillment

wit te rigt to damages in eiter case.($) Fo o'ligation to "a?e elivery uring period of redemption.

• 0e purcaser in e;ecution sales owever is not entitle to i""eiate possession of te property sol. 0e effectiveconveyance of te lan is acco"plise 'y te ee wic is issue only after the period of redemption has e%pired.

• 9n cases of e;trauicial foreclosure sale te "ortgagor "ay reee" te real property sol !ithin ( year from the date

of registration of te sale. 9n uicial foreclosure of real estate "ortgage te general rule is tat te "ortgagor cannote;ercise is rigt of ree"ption after te sale is confir"e 'y te court.

(4) igt of venee to transfer of certificate of title• Corresponing o'ligation to transfer not only possession an e"ploy"ent of lan 'ut also te certificate of title

(5) igt of 'uyer to recover te price pai• Can recover

o Epon representation tat e as certain autority to transfer property wen in fact e as no title or autorityten tere is no consieration for te pay"ent.

o ere contract is set asie 'y reason of te "utual "aterial "ista?e of te parties as to te ientity or 7uantityof te lan sol

o enor refuses or fails to eliver te title purcases is entitle to te interest on te "oney pai fro" te ti"e ofpay"ent

a) 4ner must +ave rig+t to transfer oners+ip >7rts. 1&5$)#rt. (7)9. 0e ting "ust 'e licit an te venor "ust ave a rigt to transfer te ownersip tereof at the time it is delivered. (n)

24T$S:(1) Seller "ust 'e &F! or AE0H&9T!, 'y owner of te ting sol.

* one cannot trans"it or ispose of tat wic oes not 'elong to i" (nemo dat uod non-+abet )* one can sell only wat one owns or is autori@e to sell an te 'uyer can ac7uire no "ore tan wat te seller cantransfer legally

($) ere property sol registere in na"e of seller wo e"ployer frau in securing is title* G!F!AL# A forge or frauulent ee is a nullity an conveys no title* H&!!# 0ere are instances wen suc a ocu"ent "ay 'eco"e te root of a vali title

•

ere te certificate of title was alreay transferre fro" te na"e of te true owner to te forger an wile it re"aine tatway te lan was su'se7uently sol to an innocent purcaser for value ('uyer not re7uire to e;plore furter tan 0orrenstitle)

• !C&ES!# 0rue owner of te property is to 'ring an action for a"ages against tose wo cause or e"ploye te frauan if te latter are insolvent an action against te 0reasurer of te /ilippines "ay 'e file for recovery of a"ages againstte Assurance 6un

(4) ere property sol in violation of a rigt of first refusal of anoter person* ,&C09F!# Contract of sale entere into in violation of a rigt of first refusal of anoter person wile vali is !SC9SS9B!* A rigt of first refusal is neiter a"orpous nor "erely preparatory an can 'e e;ecute accoring to its ter"s* BAS9S &6 9GH0 &6 6. . 9F C&F0AC0S &6 SA!# Current offer of te seller to sell or te offer to purcase of te prospective'uyer.

38



* &nly after te grantee fails to e;ercise is rigt uner te sa"e ter"s an witin te perio conte"plate can te owner valily offerto sell te property to a tir person again uner te sa"e ter"s as offere to te grantee* H&!!# en tere is no sowing of BA, 6A90H on te part of te venee te contract of sale "ay not 'e rescine an tere"ey of te person wit te rigt of first refusal is an action for a"ages against te venor

(5) ere real property su'ect of unrecore sale su'se7uently "ortgage 'y seller wic "ortgage was registere* 0e "ortgageeDs registere "ortgage rigt over te property is inferior to tat of te 'uyerDs unregistere rigt. 0e unrecore sale'etween te 'uyer an te seller is preferre for te reason tat if te seller (original owner) a parte wit is ownersip of te tingsol ten e no longer a ownersip an free isposal of tat ting so as to 'e a'le to "ortgage it again.

b) =+en rig+t to transfer oners+ip must eist >7rt. 1&5$)#rt. (7)9. 0e ting "ust 'e licit an te venor "ust ave a rigt to transfer te ownersip tereof at te ti"e it is elivere. (n)

24T$S:(3) 9GH0 2ES0 !O9S0 A0 092! &6 ,!9!L* Fot re7uire tat te venor "ust ave te rigt to transfer ownersip of te property at te ti"e of perfection* /erfection per se oes not transfer ownersip it occurs upon actual or constructive elivery* Sale 'eing a consensual contract is perfecte 'y "ere consent an ownersip of seller is not an ele"ent for its perfection* 9t is sufficient tat te seller as te rigt to transfer te ownersip at te ti"e it was elivere* Seller is ee"e only to impliedly !arrant tat e as a rigt to sell te ting at te ti"e wen te ownersip is to pass!AS&F#

Since future goos or goos wose ac7uisition 'y te seller epens upon a contingency "ay 'e te su'ect "atter of sale itwoul 'e inconsistent for te article to re7uire tat te ting sol "ust 'e owne 'y te seller at te ti"e of sale inas"uc as itis not possi'le for a person to own a ting or rigt not in e;istence

c) Co effected >7rts. 1&, 1&8, 1&$')#rt. (7++. 0e ownersip of te ting sol sall 'e transferre to te venee upon te actual or constructive elivery tereof. (n)#rt. (7+8. 0e parties "ay stipulate tat ownersip in te ting sall not pass to te purcaser until e as fully pai te price. (n)#rt. (79. 0e ownersip of te ting sol is ac7uire 'y te venee fro" te moment it is delivered to him in any of te waysspecifie in Articles 14% to 15+1 or in any other manner signifying an agreement that the possession is transferred fro" tevenor to te venee. (n)

1$2$#/ 5/$: &wnersip of ting transferre 'y elivery F&0 BL 2!! /AL2!F0(1) 3ecessity of delivery: ,elivery is essential in contract of sale. itout it te purcaser "ay not enoy te ting sol to i". 9t is

only after elivery tat purcaser ac7uires real rigt or ownersip over it. Contract consu""ate 'y elivery of te ting solan of te purcase "oney

(3) <urc+ase on credit # &wnersip passes upon elivery even if on creit

$XC$PTI42S:(1) Contrary stipulation

#rt. (7+8. 0e parties may stipulate tat ownersip in te ting sall not pass to te purcaser until e as fully pai teprice. (n)

/arties "ay stipulate tat ownersip of property sol "ay pass &FL wen purcaser as fully paid te priceo <actum reservati dominii or contractual reservation of title co""on in sales on install"ent. 9t is a stipulation of parties

in wic non pay"ent of te price after te ting is elivere prevents transfer of ownersipo A contract wic contains tis ?in of stipulation is a contract to sell agree"ent "ay 'e i"plie

9n case of loss seller is not lia'le &nly 'ining to contracting parties assigns an eir 'ut not upon tir persons witout notice !AS&F# Security for te 'enefit of venor wo as not 'een fully pai 9f tere is ou't# SES/!FS9! /!9&,SES/!FS9! C&F,909&F for te pay"ent of te stipulate price

'ecause ou't soul 'e resolve in favor of te greatest reciprocity of interests /arties "ay AS& stipulate tat ownersip of property sol "ay pass !!F wen purcaser as not fully paid te price

(3) Contract to sell# &wnersip re"ains wit seller an not pass until full pay"ent /ay"ent is positive suspensive conition te failure of wic is not a breac+ casual or serious 'ut si"ply an event tat

prevents te o'ligation of te venor to convey title fro" ac7uiring 'ining force Fonpay"ent not resolutory conition

Stipulations in contract for te reservation of ownersip of te ting sol until full pay"ent of its purcase price an for te lossor estruction of te ting 'eing for te account of te 'uyer > are vali an can e;ist in conunction wit te oter

($) Contract of insurance• A perfecte contract of sale even witout elivery vests in te vendee an euitable title an e;isting interest over te goos

sufficient to 'e te su'ect of insurance

iv. &eliver the thing !ith accessions and accessories '#rt. ()<+#rt. ()<+. 0e venor is 'oun to deliver the thing sold and its accessions and accessories in te conition in wic tey wereupon te perfection of te contract. All te fruits sall pertain to te venee fro" te ay on wic te contract was perfected. (14:8a)

C42&ITI42 4F TBI21 T4 ?$ &$/IV$$&* enor is o'lige to preserve te ting pening elivery 'ecause te ting sol an its accessions an te accessories "ust 'e inte conition in wic tey were upon te perfection of te contract* SellerDs uty to eliver te ting sol in a conition suita'le for its enoy"ent 'y te 'uyer for te purposes conte"plate* ile a sale of a eter"inate ting inclues all its accessions an accessories even toug tey "ay not ave 'een "entione asale of te latter is not sufficient to convey title or rigt to te for"er

&$FI2ITI42S

ACC!SS9&FS# are fruits of a ting or aitions to or i"prove"ents upon a ting suc as te young of ani"als ouse or trees ona lan

3%



ACC!SS&9!S# anyting attace to a principal ting for its co"pletion orna"ent or 'etter use suc as a picture fra"e ?ey ofouse

a) 6oncept of delivery( intention to deliver 6oncept # 0A,909&F is a erivative "oe of ac7uiring ownersip 'y virtue of wic one wo as te rigt an intention to alienate acorporeal ting trans"its it 'y virtue of a ust title to one wo accepts te sa"e

<resence of intention to deliver and to accept a transfer of possession: ,elivery soul 'e couple wit te 9F0!F09&F of eliveringte ting sol. 0e act witout te intention is insufficient tere is no traition. 9e. 9ssuance of a sales invoice oes not prove transfer ofownersip of te ting sol to te 'uyer an invoice 'eing noting "ore tan a etaile state"ent of te nature 7uantity an cost of teting sol an consiere not a 'ill of sale

b) 6onseuence of delivery (1) 0ransfer of ownersip* &wnersip is not transferre 'y "ere contract 'ut 'y elivery* Critical factor is actual intention of creitor to eliver an its acceptance 'y te venee* Contracts only constitute titles or rigts to transfer or ac7uire ownersip wile elivery or traition is "eto of acco"plising tesa"e te title an te "eto of ac7uiring it 'eing ifferent in our law. But not if stolen

(3) ia'ility in case of loss* 9f place in veneeDs control or is agent te elivery is co"plete an venee cannot avoi lia'ility in case of loss

($) igt of venor to clai" pay"ent* ,elivery prouces natural effects te principal of wic 'eing te transfer of ownersip witout preuice to te rigt off te venorto clai" pay"ent of te price

* ere 'uyer as not 'eco"e te owner for lac? of elivery is action is not accion reivindicatoria 'ut one against te venor forspecific perfor"ance or rescission wit a"ages

(4) Consu""ation of contract* ,elivery wit pay"ent "ar?s consu""ation of contract of sale. /erfection is wen "eeting of "ins 'etween parties ta?es place.

(5) !noy"ent of te ting sol* ,elivery is also necessary

c) Delivery and non-payment of t+e price3onpayment of purc+ase price# /ay"ent of purcase price not essential to te transfer of ownersip as long as te property sol as'een elivere. Fonpay"ent only creates a rigt to e"an pay"ent or to rescin te contract or to cri"inal prosecution in te case of'ouncing cec?s.

d) =ays of effecting delivery >7rts. 1&$-15!1)

#rt. (79+. 0e ting sol sall 'e unerstoo as elivere wen it is placed in the control and possession of the vendee . (14:3a)(AC0EA ,!9!L)

#rt. (798. en te sale is "ae troug a public instrument te !O!CE09&F tereof sall 'e e;uivalent to the delivery of teting wic is te o'ect of te contract if fro" te ee te contrary oes not appear or cannot clearly 'e inferre.it regar to movable property its elivery "ay also 'e "ae 'y te &$/IV$ of the "eys of te place or epository were it isstore or ?ept. (14:$a)

#rt. (799. 0e elivery of movable property "ay li?ewise 'e "ae 'y te mere consent or agreement of the contracting parties ifte ting sol cannot 'e transferre to te possession of te venee at te ti"e of te sale or if te latter already had it in hispossession for any oter reason. (14:$a)

#rt. ()**. 0ere "ay also 'e traition constitutum possessorium. (n)

#rt. ()*(. it respect to incorporeal property te provisions of te first paragraph of article (798 sall govern. 9n any oter case

werein sai provisions are not applica'le te placing of the titles of o!nership in the possession of te venee or te use 'y tevenee of is rigts wit te vendorHs consent sall 'e unerstoo as a elivery. (14:4)

24T$S:$ffected in ff !ays:

(1) 'y actual or real elivery(3) 'y constructive or legal elivery($) 'y elivery in any oter "anner signifying an agree"ent tat te possession is transferre to te venee

* 9n all ifferent "oes of elivery te critical factor is te actual intention of the vendor to deliver an its acceptance 'y te venee.0e act witout te intention is insufficient* Altoug transfer of ownersip is te pri"ary purpose of sale elivery re"ains an inispensa'le re7uisite as our law oes not a"itte octrine of transfer of ownersip of property 'y "ere consent.* 0e elivery "ust 'e "ae to te venee or is autori@e representative. ere te venee i not na"e any person to wo" teelivery sall 'e "ae in is 'ealf te venor is 'oun to eliver e;clusively to i".

* actual elivery(1) en ee"e "ae > 0ere is actual elivery wen te ting sol is place in te control an possession of te venee or

is agent. 0is involves te pysical elivery of te ting an isusually one 'y te passing of a "ova'le ting fro" an to an(3) 3ot alays essential to passing of title

* /arties "ay agree wen an on wat conitions te ownersip in te su'ect of te contract sall pass to te 'uyer. 9e. /ass afterfull pay"ent

* constructive (e;ecution of pu'lic instru"ent traditio symbolica traditio longa manu traditio brevimanu traditio constitutum possesorium)

=ays of effecting constructive delivery

$+



(1) !7uivalent to actual elivery > Constructive elivery is a general ter" co"preening all tose acts wic altoug notconferring pysical possession of te ting ave 'een el 'y construction of law to 'e e7uivalent to acts of real elivery.!ffecte 'y#

a. By te e;ecution of a pu'lic instru"ent (14%8) /ossession is transferre to 'uyer 'y notari@e ee of conveyance (applies to "ova'le an i""ova'le)

o As a specie of constructive elivery te e;ecution of a pu'lic ocu"ent is also a for" of sy"'olic

eliveryo /ossession W ownersip is transferre

o As it is e7uivalent to elivery prior pysical possession is not re7uire. -ey wor is XcontrolD notpossession

,elivery presu"ptive only

o if fro" te ee te contrary oes not appear or cannot clearly 'e inferre.

o /rior pysical elivery or possession is not re7uire

o Can 'e re'utte 'y evience to te contrary

o /resu"ption is estroye wen elivery is not effecte 'ecause of a legal i"pei"ent

Fot intention stipulation

6ailure to ta?e "aterial possession Sale of ting not su'ect to control of venor ("ust 'e in control for elivery to 'e effecte) Sale of registere lan ("oifie 'y /roperty egistration ,ecree "ust 'e registere 'ut as 'etween 'uyer an

seller transfer of ownersip ta?es effect) /ossession of a part as constructive possession of wole

'. By sy"'olical traition or traditio symbolicai. /arties "a?e use of a to?en sy"'ol to represent ting elivere

ii. 9e. -ey elivery orersc. By traditio longa manui. 0e elivery of movable property "ay li?ewise 'e "ae 'y te mere consent or agreement of the

contracting parties

enor "erely points Mualifie 'y if te ting sol cannot 'e transferre to te possession of te venee at te ti"e of

te sale. By traditio brevi manu

i. 0e elivery of movable property "ay li?ewise 'e "ae ;;; if te latter alreay a it in is possession forany oter reason.

essor sells ting to lesseee. By traditio constitutum possessorium

i. &pposite of traditio brevi manu

enor continues in possession of te property sol not as owner 'ut in so"e oter capacity

9e. venor stays as a tenant of venee

f. By 7uasi*elivery or uasi-traditioi. 0raition "ae only wit corporeali i. 9ncorporeal

!;ecution of pu'lic instru"ent en tat "oe is not applica'le 'y placing titles of ownersip in possession of venee Allowing venee to use is rigts as new owner wit consent of venor

a. ,elivery of negotia'le ocu"ent of title

(3) Contrary "ay 'e stipulate > 2ay stipulate tat transfer of ownersip only after full pay"ent or fulfill"ent of conitions

e) en seller not 'oun to eliver (Arts. 15$: 11%8)#rt. ()<. 0e venor is not 'oun to eliver te ting sol in case the vendee should lose the right to ma"e use of the terms asprovie in Article 11%8. (14:a)

#rt. ((98. 0e e'tor sall lose every right to ma"e use of the period#(1) en after te o'ligation as 'een contracte e becomes insolvent unless e gives a guaranty or security for te e't(3) en e does not furnish to the creditor the guaranties or securities wic e as pro"ise($) en 'y is own acts e has impaired said guaranties or securities after teir esta'lis"ent an wen troug a fortuitousevent tey isappear EF!SS e i""eiately gives new ones e7ually satisfactory(4) en te e'tor violates any underta"ingA in consideration of wic te creitor agree to te perio(5) en te e'tor attempts to abscond. (113%a)

24T$S:0e venor is not 'oun to eliver te ting sol in case te venee soul lose te rigt to "a?e use of te ter" stipulate in tefollowing cases#

(1) en after te o'ligation as 'een contracte e becomes insolvent unless e gives a guaranty or security for te e't* 9nsolvency oes not conte"plate a uicially eclare insolvency or suspension of pay"ents 'ecause te e'tor

cannot give a guaranty or security in suc a case

(3) en e does not furnish to the creditor the guaranties or securities wic e as pro"ise($) en 'y is own acts e has impaired said guaranties or securities after teir esta'lis"ent an wen troug a

fortuitous event tey isappear EF!SS e i""eiately gives new ones e7ually satisfactory(4) en te e'tor violates any underta"ingA in consideration of wic te creitor agree to te perio(5) en te e'tor attempts to abscond. (113%a)

f) 9ncients of elivery (/lace 0i"e 2anner Conition 9nstall"ents)* /lace of elivery (Art. 1531)

#rt. ()-(. eter it is for te 'uyer to ta?e possession of te goos or of te seller to sen te" to te 'uyer is a ;uestiondepending in each case on the contract epress or implied 'etween te parties. Apart fro" any suc contract e;press or i"plieor usage of trae to te contrary te place of elivery is te sellerQs place of 'usiness if e as one an if not is resience 'ut in case

$1



24T$S: #&&

* ,elivery to carrier (Art. 153$)#rt. ()*<. en tere is a contract of sale of specific goos te seller "ay 'y te terms of the contract reserve the right ofpossession or o!nership in the goods until certain conditions have been fulfilled. 0e rigt of possession or ownersip "ay 'etus reserve notwitstaning te elivery of te goos to te 'uyer or to a carrier or oter 'ailee for te purpose of trans"ission to te'uyer.

=here goods are shipped an 'y te B9 &6 A,9FG te goos are elivera'le to the seller or his agent & to te order of the seller or of his agent te seller thereby $S$V$S the o!nership in the goods . But if e;cept for te for" of te 'illof laing te ownersip woul ave passe to te 'uyer on sip"ent of te goos te sellers property in t+e goods s+all be deemedto be only for t+e purpose of securing performance by t+e buyer of +is obligations under t+e contract.

ere goos are sippe an 'y te 'ill of laing te goos are deliverable to order of the buyer or of his agentA BE0possession of te 'ill of laing is retaine 'y te seller or is agent te seller tere'y reserves a right to the possession of te goosas against te 'uyer.

ere te seller of goos raws on te 'uyer for te price an trans"its te 'ill of e;cange an 'ill of laing togeter to te'uyer to secure acceptance or payment of the bill of e%change te 'uyer is 'oun to return te 'ill of laing if e oes not onorte 'ill of e;cange an if e wrongfully retains te 'ill of laing e ac7uires no ae rigt tere'y. 9f owever te 'ill of laingprovies tat te goods are deliverable to the buyer or to the order of the buyerA or is indorsed in blan"A or to the buyer by theconsignee na"e terein one wo purchases in good faith for value te 'ill of laing or goos fro" te 'uyer will o'tain teownersip in te goos altoug te 'ill of e;cange as not 'een onore provie tat suc purchaser has received delivery ofthe bill of lading indorsed by the consignee named thereinA or of the goodsA !ithout notice of te facts "a?ing te transferwrongful. (n)

#rt. ()-<. ere in pursuance of a contract of sale te seller is authoried or re;uired to send the goods to the buyer elivery ofte goos to a carrier weter na"e 'y te 'uyer or not for te purpose of trans"ission to te 'uyer is ee"e to 'e a elivery ofte goos to te 'uyer !OC!/0 in te case provie for in #rticle ()*<A firstA second and third paragraps or EF!SS a contraryintent appears.

EF!SS oterwise autori@e 'y te 'uyer te seller "ust "a?e suc contract wit te carrier on 'ealf of te 'uyer as "ay'e reasona'le aving regar to te nature of te goos an te oter circu"stances of te case. If the seller omit so to do an tegoos are lost or a"age in course of transit te buyer may decline to treat the delivery to the carrier as a delivery to himselfAor may hold the seller responsible in damages.

EF!SS oterwise agree were goos are sent 'y te seller to te 'uyer uner circu"stances in wic te seller "no!s orought to "no! that it is usual to insure te seller "ust give such notice to the buyer as "ay ena'le i" to insure te" uringteir transit an if te seller fails to o so te goos sall 'e ee"e to 'e at his ris" during such transit. (n)

24T$S:When Ownership not transferred upon delivery DG!F!A E!# &wnersip passes to 'uyer upon elivery to carrier !OC!/09&FS#

* Contrary intention appears 'y te ter"s of te contract as were te seller is re7uire to eliver te goos to te 'uyer at te

point of estination* Cases provie in 3n an $r paragraps of Art. 153$o Seller o"its to contract wit carrier on 'ealf of 'uyer an goos were lost or a"age

o Seller i not notify 'uyer as to ena'le te latter to insure goos uring transit wen te for"er ?nows or ougt to?now tat it is usual to insure

* Cases provie in te 1st 3n an $r paragrap of Art. 15+$o By te ter"s of te contract seller reserves rigt of possession or ownersip

By te for" of te 'ill of laing te seller reserve title wit intent to re"ain te owner for all purposes annot "erely for te sole purpose of securing pay"ent

o en goos are lost or a"age in te course of transit an te seller i not "a?e contract wit te carrier on

'ealf of te 'uyer as "ay 'e reasona'le aving regar to te nature of te goos an te oter circu"stances ofte case

o en goos are lost or a"age in te course of transit an te seller i not give notice to the buyer as "ayena'le i" to insure te" uring teir transit wen te seller "no!s or ought to "no! that it is usual to insure

Delivery to Carrier: Transfer of ownership where goods sold delivered to carrier 1$2$#/ 5/$: ,elivery of goos to te carrier is elivery to te 'uyer

* /&9,!,# Seller is autori@e or re7uire uner te contract to trans"it te goos to te 'uyer troug a co""oncarrier

* !66!C0S# 0itle passe to te 'uyer at te point of sip"ento 9S- &6 &SS falls upon 'uyer

o A09&FA!# 9f a seller consigns goos to anoter specifie person it inicates an intention to eliver to tecarrier as bailee for te person na"e an if suc sip"ent was autori@e 'y tat person as a 'uyer teownersip vests in i"

o &n te oter an if reserve 'y seller as in e irects carrier to reeliver te goos at teir estination to te

seller i"self or to is orer it inicates an intention tat carrier shall be bailee for te seller an teownersip will re"ain in te latter

=+ere ;eller or +is agent is consignee(1) Carrier 'eco"es 'ailee for seller

a. Bill of laing goos are elivera'le to seller or is agent or to te orer of seller or is agent'. Sows reservation of ownersipc. Applica'le even goos sippe in 'uyerDs vessel

(3) igts of seller a. etain goos until 'uyer perfor"s o'ligation uner contract'. 9n violation of contract ispose of goos to tir persons

i. ia'le for a"ages to 'uyer 'ut secon purcaser fro" selller ac7uires a 'etter rigt

=+ere ;ellerEs *itle is only for purpose of security (1) 6or" of 'ill of laing not conclusive

$$



i. igt to e;a"ine is conition preceent to paying te price after ownersip as passeii. F&0 ABS&E0!# on re7uestiii. itin reasona'le ti"e

'. C&,i. aiver "ay 'e "ae 'efore pay"entii. Buyer still entitle to e;a"ine goos after elivery an pay"ent of priceiii. igt of e;a"ination is conition su'se7uent after transfer of ownersip

c) effect of acceptance >7rt. 158')#rt. ()8. 9n te a'sence of e;press or i"plie agree"ent of te parties acceptance of te goos 'y te 'uyer sall not dischargethe seller from liability in damages or oter legal remedy for breach of any pro"ise or warranty in te contract of sale. But if after

acceptance of te goos te 'uyer fails to give notice to te seller of te 'reac in any pro"ise of (or) warranty !ithin a reasonabletime after te 'uyer ?nows or ougt to ?now of suc 'reac te seller sall not be liable terefor. (n)

/E/&S!# /rotect seller against 'elate clai"sof "ust 'e rea as or

d) +en buyerEs refusal to accept Austifiedrongful >7rts. 158, 1588)#rt. ()8+. Enless oterwise agree were goos are elivere to te 'uyer an e refuses to accept them aving te right so too e is not bound to return them to the seller 'ut it is sufficient if e notifies te seller tat e refuses to accept te". 9f evoluntarily constitutes i"self a depositary tereof e sall 'e liable as suc. (n) * IES0969!,

#rt. ()88. 9f tere is no stipulation as specifie in te first paragrap of article 153$ wen te 'uyerQs refusal to accept te goos is!ithout @ust cause te title thereto passes to i" fro" te "o"ent tey are placed at his disposal. (n)

ii. Pay the price Art. !"#$%

a) +ere and +en >7rt. 158#)#rt. ()8-. 0e venee is 'oun to accept elivery an to pay te price of te ting sol at the time and place stipulated in thecontract. 9f te ti"e an place soul not ave 'een stipulate te pay"ent "ust 'e "ae at the time and place of the delivery of the thingsold. (15++a)

b) buyerEs liability to pay interest >7rt. 158$)#rt. ()89. 0e venee sall owe interest for te period bet!een the delivery of the thing and the payment of the price in tefollowing tree cases#

(1) Soul it ave 'een so stipulated(3) Soul te ting sold and delivered produce fruits or income($) Soul e be in default fro" te ti"e of uicial or e;trauicial e"an for te pay"ent of te price. (15+1a)

c) rig+t of vendee to suspend payment of price >7rt. 15$!)#rt. ()9*. Soul te venee 'e disturbed in the possession or o!nership of te ting ac7uire or soul e ave reasonablegrounds to fear suc istur'ance 'y a vindicatory action or a foreclosure of mortgage e "ay S5SP$2& te pay"ent of teprice until te venor as cause te istur'ance or anger to cease EF!SS te latter gives security for te return of te price in aproper case or it as 'een stipulated tat notwitstaning any suc contingency te venee sall 'e 'oun to "a?e te pay"ent. Amere act of trespass sall not authorie te suspension of te pay"ent of te price. (15+3a)

d) effect of failure to pay price

?. Practice notes: usual covenants of the buyer i. <re-closing covenants:

(a) approvals(') oters

ii. <ost-closing covenants : (a) pay"ent of sta"p ta;(') o'taining B9 Certificate Autori@ing egistration(c) oters

iii. 7ffirmative covenants and negative covenants

VIII. Conditions#. 3eaning of conditions

?. Types of conditionsi. 6onditions precedent >7rt. 15&5)

#rt. ()7). ere te o'ligation of eiter party to a contract of sale is sub@ect to any condition wic is not performed suc party

"ay refuse to proceed !ith the contract or e "ay !aive performance of te conition. 9f te oter party as pro"ise tat teconition soul appen or 'e perfor"e suc first "entione party "ay also treat the nonperformance of the condition as abreach of !arranty.

ere te o!nership in the thing has not passed te 'uyer "ay treat te fulfill"ent 'y te seller of is o'ligation to eliverte sa"e as escri'e an as warrante e;pressly or 'y i"plication in te contract of sale as a condition of the obligation of thebuyer to perform his promise to accept and pay for the thing. (n)

ii. 6onditions subseuent

C. Practice notes: conditions in contract of salei. 0sual contractual conditions

a) Conitions preceent#

$:



(i) accuracy of representations(ii) perfor"ance of all covenantsno 'reac(iii) consents(iv) no litigationsuit(v) elivery of ocu"ents(vi) oters

') Conitions su'se7uent

ii. *ime frame for meeting conditions: drop dead datelong stop date

iii. Result if closing condition not satisfied:

(a) no closing(') closing elaye(c) conition waive an closing occurs() conition cange to post*closing covenant an closing occurs(e) oters

IX. epresentations and !arranties 7. ?eaning of representations and arranties. *ype of arranties

i. !;press > "eaning effectii. 9"plie > "eaning effect nature wen not applica'le

6. 6ategories of representations and arrantiesi. elating to te contract itself ii. elating to te su'ect "atter of te contractiii. elating to te parties

D. Distinguis+ed from ot+er termsi. Conitionsii. &pinion ealerDs tal?

. Representations and arranties of t+e seller i. !;press > Art. 154:

#rt. ()7. Any affir"ation of fact or any pro"ise 'y te seller relating to te ting is an e;press warranty if te natural tenency of sucaffir"ation or pro"ise is to inuce te 'uyer to purcase te sa"e an if te 'uyer purcase te ting relying tereon. Fo affir"ationof te value of te ting nor any state"ent purporting to 'e a state"ent of te sellerQs opinion only sall 'e construe as a warrantyunless te seller "ae suc affir"ation or state"ent as an e;pert an it was relie upon 'y te 'uyer. (n)

a) "eaning') ter"inology usec) ti"e of warranty for" sellerDs goo fait

ii. 9"pliea) i"plie warranty of title (Art. 154)

#rt. ()7+. 9n a contract of sale unless a contrary intention appears tere is#

(1) An i"plie warranty on te part of te seller tat e as a rigt to sell te ting at te ti"e wen te ownersip is to pass an tatte 'uyer sall fro" tat ti"e ave an enoy te legal an peaceful possession of te ting(3) An i"plie warranty tat te ting sall 'e free fro" any ien faults or efects or any carge or encu"'rance not eclare or?nown to te 'uyer.0is Article sall not owever 'e el to rener lia'le a seriff auctioneer "ortgagee plegee or oter person professing to sell 'yvirtue of autority in fact or law for te sale of a ting in wic a tir person as a legal or e7uita'le interest. (n)

* warranty in case of eviction (Art. 1548*15:+)#rt. ()78. !viction sall ta?e place wenever 'y a final ug"ent 'ase on a rigt prior to te sale or an act i"puta'le to te venorte venee is eprive of te wole or of a part of te ting purcase.0e venor sall answer for te eviction even toug noting as 'een sai in te contract on te su'ect.0e contracting parties owever "ay increase i"inis or suppress tis legal o'ligation of te venor. (145a)#rt. ()79. 0e venee nee not appeal fro" te ecision in orer tat te venor "ay 'eco"e lia'le for eviction. (n)#rt. ())*. en averse possession a 'een co""ence 'efore te sale 'ut te prescriptive perio is co"plete after te transfer

te venor sall not 'e lia'le for eviction. (n)#rt. ())(. 9f te property is sol for nonpay"ent of ta;es ue an not "ae ?nown to te venee 'efore te sale te venor is lia'lefor eviction. (n)#rt. ())-. 0e ug"ent e'tor is also responsi'le for eviction in uicial sales unless it is oterwise ecree in te ug"ent. (n)#rt. ())<. Any stipulation e;e"pting te venor fro" te o'ligation to answer for eviction sall 'e voi if e acte in 'a fait. (14:)#rt. ())7. 9f te venee as renounce te rigt to warranty in case of eviction an eviction soul ta?e place te venor sall onlypay te value wic te ting sol a at te ti"e of te eviction. Soul te venee ave "ae te waiver wit ?nowlege of te ris?sof eviction an assu"e its conse7uences te venor sall not 'e lia'le. (14)#rt. ())). en te warranty as 'een agree upon or noting as 'een stipulate on tis point in case eviction occurs te veneesall ave te rigt to e"an of te venor#(1) 0e return of te value wic te ting sol a at te ti"e of te eviction 'e it greater or less tan te price of te sale(3) 0e inco"e or fruits if e as 'een orere to eliver te" to te party wo won te suit against i"($) 0e costs of te suit wic cause te eviction an in a proper case tose of te suit 'rougt against te venor for te warranty(4) 0e e;penses of te contract if te venee as pai te"(5) 0e a"ages an interests an orna"ental e;penses if te sale was "ae in 'a fait. (148)

#rt. ()). Soul te venee lose 'y reason of te eviction a part of te ting sol of suc i"portance in relation to te wole tate woul not ave 'ougt it witout sai part e "ay e"an te rescission of te contract 'ut wit te o'ligation to return te tingwitout oter encu"'rances tat tose wic it a wen e ac7uire it.He "ay e;ercise tis rigt of action instea of enforcing te venorQs lia'ility for eviction.0e sa"e rule sall 'e o'serve wen two or "ore tings ave 'een ointly sol for a lu"p su" or for a separate price for eac ofte" if it soul clearly appear tat te venee woul not ave purcase one witout te oter. (14%a)#rt. ())+. 0e warranty cannot 'e enforce until a final ug"ent as 'een renere were'y te venee loses te ting ac7uire ora part tereof. (148+)#rt. ())8. 0e venor sall not 'e o'lige to "a?e goo te proper warranty unless e is su""one in te suit for eviction at teinstance of te venee. (1481a)#rt. ())9. 0e efenant venee sall as? witin te ti"e fi;e in te ules of Court for answering te co"plaint tat te venor 'e"ae a co*efenant. (1483a)

$



#rt. ()*. 9f te i""ova'le sol soul 'e encu"'ere wit any non*apparent 'uren or servitue not "entione in te agree"ent ofsuc a nature tat it "ust 'e presu"e tat te venee woul not ave ac7uire it a e 'een aware tereof e "ay as? for terescission of te contract unless e soul prefer te appropriate ine"nity. Feiter rigt can 'e e;ercise if te non*apparent 'urenor servitue is recore in te egistry of /roperty unless tere is an e;press warranty tat te ting is free fro" all 'urens anencu"'rances.itin one year to 'e co"pute fro" te e;ecution of te ee te venee "ay 'ring te action for rescission or sue for a"ages.&ne year aving elapse e "ay only 'ring an action for a"ages witin an e7ual perio to 'e counte fro" te ate on wic eiscovere te 'uren or servitue. (148$a)

* "eaning of eviction (Art. 1548)#rt. ()78. !viction sall ta?e place wenever 'y a final ug"ent 'ase on a rigt prior to te sale or an act i"puta'le to te venorte venee is eprive of te wole or of a part of te ting purcase.

0e venor sall answer for te eviction even toug noting as 'een sai in te contract on te su'ect.

0e contracting parties owever "ay increase i"inis or suppress tis legal o'ligation of te venor. (145a)* essential ele"ents of warranty against eviction* eviction vs. trespass in fact* re7uire"ent of final ug"ent uty to appeal (Arts. 155 1558 155% 154%)

#rt. ())+. 0e warranty cannot 'e enforce until a final ug"ent as 'een renere were'y te venee loses te ting ac7uire ora part tereof. (148+)#rt. ())8. 0e venor sall not 'e o'lige to "a?e goo te proper warranty unless e is su""one in te suit for eviction at teinstance of te venee. (1481a)#rt. ())9. 0e efenant venee sall as? witin te ti"e fi;e in te ules of Court for answering te co"plaint tat te venor 'e"ae a co*efenant. (1483a)#rt. ()79. 0e venee nee not appeal fro" te ecision in orer tat te venor "ay 'eco"e lia'le for eviction. (n)

* venor as party to te suit for eviction (Art. 155%)#rt. ())9. 0e efenant venee sall as? witin te ti"e fi;e in te ules of Court for answering te co"plaint tat te venor 'e"ae a co*efenant. (1483a)

* effect of prescription (Art. 155+)#rt. ())*. en averse possession a 'een co""ence 'efore te sale 'ut te prescriptive perio is co"plete after te transferte venor sall not 'e lia'le for eviction. (n)

* rigts an lia'ilities in case eviction occurs rigts in case of partial eviction (Arts. 1555 155:)#rt. ())). en te warranty as 'een agree upon or noting as 'een stipulate on tis point in case eviction occurs te veneesall ave te rigt to e"an of te venor#(1) 0e return of te value wic te ting sol a at te ti"e of te eviction 'e it greater or less tan te price of te sale(3) 0e inco"e or fruits if e as 'een orere to eliver te" to te party wo won te suit against i"($) 0e costs of te suit wic cause te eviction an in a proper case tose of te suit 'rougt against te venor for te warranty(4) 0e e;penses of te contract if te venee as pai te"(5) 0e a"ages an interests an orna"ental e;penses if te sale was "ae in 'a fait. (148)#rt. ()). Soul te venee lose 'y reason of te eviction a part of te ting sol of suc i"portance in relation to te wole tate woul not ave 'ougt it witout sai part e "ay e"an te rescission of te contract 'ut wit te o'ligation to return te ting

witout oter encu"'rances tat tose wic it a wen e ac7uire it.He "ay e;ercise tis rigt of action instea of enforcing te venorQs lia'ility for eviction.0e sa"e rule sall 'e o'serve wen two or "ore tings ave 'een ointly sol for a lu"p su" or for a separate price for eac ofte" if it soul clearly appear tat te venee woul not ave purcase one witout te oter. (14%a)

* waiver of warranty in case of eviction ?ins effect presu"ption (Arts. 1548 155$ 1554)#rt. ()78. !viction sall ta?e place wenever 'y a final ug"ent 'ase on a rigt prior to te sale or an act i"puta'le to te venorte venee is eprive of te wole or of a part of te ting purcase.0e venor sall answer for te eviction even toug noting as 'een sai in te contract on te su'ect.0e contracting parties owever "ay increase i"inis or suppress tis legal o'ligation of te venor. (145a)#rt. ())<. Any stipulation e;e"pting te venor fro" te o'ligation to answer for eviction sall 'e voi if e acte in 'a fait. (14:)#rt. ())7. 9f te venee as renounce te rigt to warranty in case of eviction an eviction soul ta?e place te venor sall onlypay te value wic te ting sol a at te ti"e of te eviction. Soul te venee ave "ae te waiver wit ?nowlege of te ris?sof eviction an assu"e its conse7uences te venor sall not 'e lia'le. (14)

* eviction for nonpay"ent of ta;es (Art. 1551)#rt. ())(. 9f te property is sol for nonpay"ent of ta;es ue an not "ae ?nown to te venee 'efore te sale te venor is lia'le

for eviction. (n)* uicial sales (Art. 1553)

#rt. ())-. 0e ug"ent e'tor is also responsi'le for eviction in uicial sales unless it is oterwise ecree in te ug"ent. (n)* encu"'rance wit non*apparent 'uren (Art. 15:+)

#rt. ()*. 9f te i""ova'le sol soul 'e encu"'ere wit any non*apparent 'uren or servitue not "entione in te agree"ent ofsuc a nature tat it "ust 'e presu"e tat te venee woul not ave ac7uire it a e 'een aware tereof e "ay as? for terescission of te contract unless e soul prefer te appropriate ine"nity. Feiter rigt can 'e e;ercise if te non*apparent 'urenor servitue is recore in te egistry of /roperty unless tere is an e;press warranty tat te ting is free fro" all 'urens anencu"'rances.

itin one year to 'e co"pute fro" te e;ecution of te ee te venee "ay 'ring te action for rescission or sue for a"ages.&ne year aving elapse e "ay only 'ring an action for a"ages witin an e7ual perio to 'e counte fro" te ate on wic eiscovere te 'uren or servitue. (148$a)

') i"plie warranty against ien encu"'rances an efects (Art. 154(') 15:1 15:: 153*1581)#rt. ()7+. 9n a contract of sale unless a contrary intention appears tere is#

(1) An i"plie warranty on te part of te seller tat e as a rigt to sell te ting at te ti"e wen te ownersip is to pass an tatte 'uyer sall fro" tat ti"e ave an enoy te legal an peaceful possession of te ting(3) An i"plie warranty tat te ting sall 'e free fro" any ien faults or efects or any carge or encu"'rance not eclare or?nown to te 'uyer.0is Article sall not owever 'e el to rener lia'le a seriff auctioneer "ortgagee plegee or oter person professing to sell 'yvirtue of autority in fact or law for te sale of a ting in wic a tir person as a legal or e7uita'le interest. (n)#rt. ()(. 0e venor sall 'e responsi'le for warranty against te ien efects wic te ting sol "ay ave soul tey rener itunfit for te use for wic it is intene or soul tey i"inis its fitness for suc use to suc an e;tent tat a te venee 'eenaware tereof e woul not ave ac7uire it or woul ave given a lower price for it 'ut sai venor sall not 'e answera'le for patentefects or tose wic "ay 'e visi'le or for tose wic are not visi'le if te venee is an e;pert wo 'y reason of is trae orprofession soul ave ?nown te". (1484a)

$8



#rt. (). 0e venor is responsi'le to te venee for any ien faults or efects in te ting sol even toug e was not awaretereof.0is provision sall not apply if te contrary as 'een stipulate an te venor was not aware of te ien faults or efects in teting sol. (1485)#rt. ()+-. 9f two or "ore ani"als are sol togeter weter for a lu"p su" or for a separate price for eac of te" te rei'itoryefect of one sall only give rise to its rei'ition an not tat of te oters unless it soul appear tat te venee woul not avepurcase te soun ani"al or ani"als witout te efective one.0e latter case sall 'e presu"e wen a tea" yo?e pair or set is 'ougt even if a separate price as 'een fi;e for eac one of teani"als co"posing te sa"e. (14%1)#rt. ()+<. 0e provisions of te preceing article wit respect to te sale of ani"als sall in li?e "anner 'e applica'le to te sale ofoter tings. (14%3)

#rt. ()+7. 0ere is no warranty against ien efects of ani"als sol at fairs or at pu'lic auctions or of live stoc? sol as cone"ne.(14%$a)#rt. ()+). 0e sale of ani"als suffering fro" contagious iseases sall 'e voi. A contract of sale of ani"als sall also 'e voi if te use or service for wic tey are ac7uire as 'een state in te contract antey are foun to 'e unfit terefor. (14%4a)#rt. ()+. 9f te ien efect of ani"als even in case a professional inspection as 'een "ae soul 'e of suc a nature tate;pert ?nowlege is not sufficient to iscover it te efect sall 'e consiere as rei'itory.But if te veterinarian troug ignorance or 'a fait soul fail to iscover or isclose it e sall 'e lia'le for a"ages. (14%5)#rt. ()++. 0e rei'itory action 'ase on te faults or efects of ani"als "ust 'e 'rougt witin forty ays fro" te ate of teirelivery to te venee.0is action can only 'e e;ercise wit respect to faults an efects wic are eter"ine 'y law or 'y local custo"s. (14%:a)#rt. ()+8. 9f te ani"al soul ie witin tree ays after its purcase te venor sall 'e lia'le if te isease wic cause te eate;iste at te ti"e of te contract. (14%a)#rt. ()+9. 9f te sale 'e rescine te ani"al sall 'e returne in te conition in wic it was sol an elivere te venee 'einganswera'le for any inury ue to is negligence an not arising fro" te rei'itory fault or efect. (14%8)#rt. ()8*. 9n te sale of ani"als wit rei'itory efects te venee sall also enoy te rigt "entione in article 15: 'ut e "ust"a?e use tereof witin te sa"e perio wic as 'een fi;e for te e;ercise of te rei'itory action. (14%%)#rt. ()8(. 0e for" of sale of large cattle sall 'e governe 'y special laws. (n)

* re7uisites for warranty against ien efects (Arts. 15:1 15::)#rt. ()(. 0e venor sall 'e responsi'le for warranty against te ien efects wic te ting sol "ay ave soul tey rener itunfit for te use for wic it is intene or soul tey i"inis its fitness for suc use to suc an e;tent tat a te venee 'eenaware tereof e woul not ave ac7uire it or woul ave given a lower price for it 'ut sai venor sall not 'e answera'le for patentefects or tose wic "ay 'e visi'le or for tose wic are not visi'le if te venee is an e;pert wo 'y reason of is trae orprofession soul ave ?nown te". (1484a)#rt. (). 0e venor is responsi'le to te venee for any ien faults or efects in te ting sol even toug e was not awaretereof.0is provision sall not apply if te contrary as 'een stipulate an te venor was not aware of te ien faults or efects in teting sol. (1485)

* re"eies# accion rei'itoria accion 7uanti "inoris (Arts. 15: 15+)

#rt. ()+. 9n te cases of Articles 15:1 15:3 15:4 15:5 an 15:: te venee "ay elect 'etween witrawing fro" te contract ane"aning a proportionate reuction of te price wit a"ages in eiter case. (148:a)#rt. ()+*. 0e preceing articles of tis Su'section sall 'e applica'le to uicial sales e;cept tat te ug"ent e'tor sall not 'elia'le for a"ages. (148%a)

* warranty in sales of ani"als (Arts. 153* 1581)#rt. ()+-. 9f two or "ore ani"als are sol togeter weter for a lu"p su" or for a separate price for eac of te" te rei'itoryefect of one sall only give rise to its rei'ition an not tat of te oters unless it soul appear tat te venee woul not avepurcase te soun ani"al or ani"als witout te efective one.0e latter case sall 'e presu"e wen a tea" yo?e pair or set is 'ougt even if a separate price as 'een fi;e for eac one of teani"als co"posing te sa"e. (14%1)#rt. ()+<. 0e provisions of te preceing article wit respect to te sale of ani"als sall in li?e "anner 'e applica'le to te sale ofoter tings. (14%3)#rt. ()+7. 0ere is no warranty against ien efects of ani"als sol at fairs or at pu'lic auctions or of live stoc? sol as cone"ne.(14%$a)#rt. ()+). 0e sale of ani"als suffering fro" contagious iseases sall 'e voi.

A contract of sale of ani"als sall also 'e voi if te use or service for wic tey are ac7uire as 'een state in te contract antey are foun to 'e unfit terefor. (14%4a)#rt. ()+. 9f te ien efect of ani"als even in case a professional inspection as 'een "ae soul 'e of suc a nature tate;pert ?nowlege is not sufficient to iscover it te efect sall 'e consiere as rei'itory.But if te veterinarian troug ignorance or 'a fait soul fail to iscover or isclose it e sall 'e lia'le for a"ages. (14%5)#rt. ()++. 0e rei'itory action 'ase on te faults or efects of ani"als "ust 'e 'rougt witin forty ays fro" te ate of teirelivery to te venee.0is action can only 'e e;ercise wit respect to faults an efects wic are eter"ine 'y law or 'y local custo"s. (14%:a)#rt. ()+8. 9f te ani"al soul ie witin tree ays after its purcase te venor sall 'e lia'le if te isease wic cause te eate;iste at te ti"e of te contract. (14%a)#rt. ()+9. 9f te sale 'e rescine te ani"al sall 'e returne in te conition in wic it was sol an elivere te venee 'einganswera'le for any inury ue to is negligence an not arising fro" te rei'itory fault or efect. (14%8)#rt. ()8*. 9n te sale of ani"als wit rei'itory efects te venee sall also enoy te rigt "entione in article 15: 'ut e "ust"a?e use tereof witin te sa"e perio wic as 'een fi;e for te e;ercise of te rei'itory action. (14%%)#rt. ()8(. 0e for" of sale of large cattle sall 'e governe 'y special laws. (n)

* uicial sales (Art. 15+)#rt. ()+*. 0e preceing articles of tis Su'section sall 'e applica'le

c) i"plie warranty as to fitness or "ercanta'ility or "ercanta'le 7uality (Art. 15:3 15:$ 15:4 15:5 15+)#rt. ()-. 9n a sale of goos tere is an i"plie warranty or conition as to te 7uality or fitness of te goos as follows#(1) ere te 'uyer e;pressly or 'y i"plication "a?es ?nown to te seller te particular purpose for wic te goos are ac7uirean it appears tat te 'uyer relies on te sellerQs s?ill or ug"ent (weter e 'e te grower or "anufacturer or not) tere is ani"plie warranty tat te goos sall 'e reasona'ly fit for suc purpose(3) ere te goos are 'rougt 'y escription fro" a seller wo eals in goos of tat escription (weter e 'e te grower or"anufacturer or not) tere is an i"plie warranty tat te goos sall 'e of "ercanta'le 7uality. (n)#rt. ()<. 9n te case of contract of sale of a specifie article uner its patent or oter trae na"e tere is no warranty as to its fitnessfor any particular purpose unless tere is a stipulation to te contrary. (n)

$%



#rt. ()7. An i"plie warranty or conition as to te 7uality or fitness for a particular purpose "ay 'e anne;e 'y te usage of trae.(n)#rt. ()). 9n te case of a contract of sale 'y sa"ple if te seller is a ealer in goos of tat ?in tere is an i"plie warranty tat tegoos sall 'e free fro" any efect renering te" un"ercanta'le wic woul not 'e apparent on reasona'le e;a"ination of tesa"ple. (n)#rt. ()+*. 0e preceing articles of tis Su'section sall 'e applica'le

* i"plie warranty of 7ualityfitness > particular purpose of goos test sale uner trae na"e usage oftrae sale 'y sa"ple re"eies (Art. 15:3*15:4 15:5)

#rt. ()-. 9n a sale of goos tere is an i"plie warranty or conition as to te 7uality or fitness of te goos as follows#(1) ere te 'uyer e;pressly or 'y i"plication "a?es ?nown to te seller te particular purpose for wic te goos are ac7uirean it appears tat te 'uyer relies on te sellerQs s?ill or ug"ent (weter e 'e te grower or "anufacturer or not) tere is an

i"plie warranty tat te goos sall 'e reasona'ly fit for suc purpose(3) ere te goos are 'rougt 'y escription fro" a seller wo eals in goos of tat escription (weter e 'e te grower or"anufacturer or not) tere is an i"plie warranty tat te goos sall 'e of "ercanta'le 7uality. (n)#rt. ()<. 9n te case of contract of sale of a specifie article uner its patent or oter trae na"e tere is no warranty as to its fitnessfor any particular purpose unless tere is a stipulation to te contrary. (n)#rt. ()7. An i"plie warranty or conition as to te 7uality or fitness for a particular purpose "ay 'e anne;e 'y te usage of trae.(n)#rt. ()). 9n te case of a contract of sale 'y sa"ple if te seller is a ealer in goos of tat ?in tere is an i"plie warranty tat tegoos sall 'e free fro" any efect renering te" un"ercanta'le wic woul not 'e apparent on reasona'le e;a"ination of tesa"ple. (n)

* i"plie warranty of "ercanta'ility"ercanta'le 7uality (Art. 15:3)#rt. ()-. 9n a sale of goos tere is an i"plie warranty or conition as to te 7uality or fitness of te goos as follows#(1) ere te 'uyer e;pressly or 'y i"plication "a?es ?nown to te seller te particular purpose for wic te goos are ac7uirean it appears tat te 'uyer relies on te sellerQs s?ill or ug"ent (weter e 'e te grower or "anufacturer or not) tere is ani"plie warranty tat te goos sall 'e reasona'ly fit for suc purpose(3) ere te goos are 'rougt 'y escription fro" a seller wo eals in goos of tat escription (weter e 'e te grower or"anufacturer or not) tere is an i"plie warranty tat te goos sall 'e of "ercanta'le 7uality. (n)

* re"eies# accion rei'itoria accion 7uanti "inoris (Arts. 15: 15+)#rt. ()+. 9n te cases of Articles 15:1 15:3 15:4 15:5 an 15:: te venee "ay elect 'etween witrawing fro" te contract ane"aning a proportionate reuction of te price wit a"ages in eiter case. (148:a)#rt. ()+*. 0e preceing articles of tis Su'section sall 'e applica'le to uicial sales e;cept tat te ug"ent e'tor sall not 'elia'le for a"ages. (148%a)

B. Representations of t+e buyer F. <ractice notes: representations of t+e seller and t+e buyer

i. 0ypical contractual representations of te seller# (a) corporate e;istence power an autority (') consents no violation (c)financial state"ents no unisclose lia'ility () "aterial averse cange (e) title (f) litigation (g) oters

ii. 0ypical contractual representations of te 'uyer iii. en representations "ae (e.g. ti"e of e;ecution ti"e of closing etc.)

iv. Bring*own representations > concept wy re7uirev. Survival of representations

X. ules on ris" of loss and deterioration A. 0eories of ris?s of loss

i. 0eory of traition vs. teory of perfectionii. 0eory followe 'y te Spanis Civil Coe an te /ilippine Civil Coe

B. /rinciple of res perit domino

C. ules on ris? of loss an eteriorationi. /rior to perfection of contract

ii. At ti"e of perfection (Arts. 14+%($) 14%$ 14%4)#rt. (7*9. 0e following contracts are ine;istent an voi fro" te 'eginning#

($) 0ose wose cause or ob@ect did not e%ist at the time of te transaction#rt. (79<. 9f at te ti"e te contract of sale is perfecte te ting wic is te o'ect of te contract as 'een entirely lostA te contractsall 'e !ithout any effect.But if te ting soul ave 'een lost in part only te venee "ay coose 'etween !ithdra!ing fro" te contract an demandingthe remaining part paying its price in proportion to te total su" agree upon. (14:+a)#rt. (797. ere te parties purport a sale of specific goos an te goos witout te ?nowlege of te seller ave perished in partor ave wolly or in a "aterial part so deteriorated in ;uality as to 'e su'stantially cange in caracter te 'uyer "ay at is optiontreat te sale#(1) As avoided or(3) As valid in all of te eisting goods & in so "uc tereof as ave not deteriorated an as binding te 'uyer to pay te agreeprice for te goos in wic te ownersip will pass if te sale was divisible. (n)

24T$S:G!F!A E!# 9f at te ti"e te sale of a specific ting is perfecte te ting a 'een entirely lost te contract sall 'e ineffective.(Fo o'ect no contract)

• 0e loss "ust ave occurre 'efore te contract was entere into witout te ?nowlege of 'ot parties.• 9f /A09A &SS# enee as option of witrawing fro" te contract or 'uying te re"ainer at a proportionate price.

• 9f ,!0!9&A0!, 2A0!9AL 9F MEA90L# enee as sa"e option

• 0ese rules presuppose tat te ris? of loss or eterioration a not yet passe to te 'uyer.

iii. After perfection of contract 'ut 'efore elivery* Fortuitous event (Art. 148+ 11:$*11:5 13:3*13:$ 13:% 15+4 15$*15$8 118%<1$=)

#rt. (78*. Any in@ury to or benefit fro" te ting sol A60! te contract as 'een perfecte fro" te "o"ent of te /!6!C09&Fof te contract to te ti"e of ,!9!L sall 'e governe by #rticles ((< to (()A and (--.0is rule sall apply to te sale of fungible things "ae inepenently an for a single price or witout consieration of teir weigtnu"'er or "easure.

4+



Soul fungi'le tings 'e sol for a price fi%ed according to !eightA numberA or measure te 9S- sall F&0 'e i"pute to tevenee EF09 tey ave 'een weige counte or "easure an elivere EF!SS te latter as incurre in elay.#rt. ((<. !very person o'lige to give so"eting is also obliged to ta"e care of it wit te proper diligence of a good father of afamily EF!SS te law or te stipulation of te parties re7uires anoter stanar of care. (1+%4a)#rt. ((7. 0e C!,90& as a rigt to te fruits of the thing fro" te ti"e te o'ligation to ,!9! it arises. However e sallac7uire F& !A 9GH0 over it EF09 te sa"e as 'een ,!9!!, to i". (1+%5)#rt. ((). en wat is to 'e elivere is a &$T$3I2#T$ thing te creitor in aition to te rigt grante i" 'y #rticle ((+*2AL C&2/! te ,!B0& to "a?e te elivery.9f te ting is I2&$T$3I2#T$ 4 1$2$IC e "ay as? tat te o'ligation 'e C&2/9!, wit at the e%pense of the debtor.9f te o'ligor ,!ALS or as pro"ise to ,!9! 0H! SA2! 0H9FG to two or "ore persons wo o not ave te sa"e interest esall 'e responsible for any fortuitous event EF09 e as effecte te elivery. (1+%:)

#rt. (--. An o'ligation wic consists in te elivery of a ,!0!29FA0! ting sall 'e $XTI215ISB$& if it soul 'e &S0 &,!S0&L!, !ithout the fault of te e'tor an B!6&! e as incurre in delay.en 'y law or stipulation te o'ligor is 9AB! even for fortuitous events te &SS of te ting does not e%tinguish teo'ligation an e sall 'e responsi'le for damages. 0e sa"e rule applies wen te nature of te o'ligation re7uires te assu"ptionof ris?. (1183a)#rt. (-<. 9n an o'ligation to eliver a G!F!9C ting te &SS or ,!S0EC09&F of anyting of te SA2! -9F, oes note%tinguish te o'ligation. (n)#rt. (-9. 0e o'ligation aving 'een e%tinguished by the loss of te ting te creitor sall ave all te rights of action !hich thedebtor may have against third persons 'y reason of te loss. (118:)#rt. ()*7. EF!SS oterwise agree te goos re"ain at te sellerHs ris" EF09 te o!nership therein is transferred to te 'uyer'ut wen te oners+ip t+erein is transferred to t+e buyer te goos are at te buyerHs ris" weter actual elivery as 'een "ae ornot !OC!/0 tat#(1) ere elivery of te goos as 'een "ae to te 'uyer or to a 'ailee for te 'uyer in pursuance of te contract an teownersip in te goos as 'een retained by the seller merely to secure performance 'y te 'uyer of is o'ligations uner tecontract te goos are at te 'uyerQs ris? fro" te ti"e of suc elivery(3) ere actual delivery has been delayed troug te fault of eiter te 'uyer or seller te goos are at te ris? of te party in fault.(n)#rt. ()<+. 0e venor is 'oun to eliver te 0H9FG sol an its ACC!SS9&FS AF, ACC!SS&9!S in te condition in !hich they!ere upon the perfection of te contract. All te 6E90S sall pertain to te venee fro" te ay on wic te contract !as perfected. (14:8a)#rt. ()<8. 9n case of lossA deterioration or improvement of te ting B!6&! its elivery te rules in #rticle ((89 sall 'eo'serve te venor 'eing consiere te e'tor. (n)#rt. ((89. en te conitions ave 'een i"pose wit te intention of suspending the efficacy of an obligation to give tefollowing rules sall 'e o'serve in case of te improvementA loss or deterioration of te ting uring te penency of te conition#(1) 9f te ting is &S0 witout te fault of te e'tor te o'ligation sall 'e !O09FGE9SH!,($) en te ting ,!0!9&A0!S witout te fault of te e'tor te impairment is to be borne by the creditor

24T$S:

• G!F!A E!# &wner 'ears te ris? of loss in te a'sence of stipulation to te contrary. ,elivery is re7uire to transfer

ownersip to te 'uyer. 0erefore 'uyer oes not 'ear te ris? of loss EF09 ,!9!L.• 9nas"uc as te contract gave rise to reciprocal o'ligations te e;tinguis"ent of te o'ligation to eliver 'y virtue of a fortuitous

event necessarily carrie wit it te e;tinguis"ent of te o'ligation of te venee to pay te price 'y virtue of Art. 118%. Altougtis article refers to conitions i"pose wit te intention of suspening te efficacy of te o'ligation to give it was "aeapplica'le to sales 'y Art. 15$8.

* SellerJs fault (Arts. 148+ 11:5 13:3*13:$ 15+4<3= 15$8 118%)#rt. (78*. Any inury to or 'enefit fro" te ting sol after te contract as 'een perfecte fro" te "o"ent of te perfection of tecontract to te ti"e of elivery sall 'e governe 'y Articles 11:$ to 11:5 an 13:3.0is rule sall apply to te sale of fungi'le tings "ae inepenently an for a single price or witout consieration of teir weigtnu"'er or "easure.Soul fungi'le tings 'e sol for a price fi;e accoring to weigt nu"'er or "easure te ris? sall not 'e i"pute to te veneeuntil tey ave 'een weige counte or "easure an elivere unless te latter as incurre in elay. (1453a)

#rt. ((). en wat is to 'e elivere is a eter"inate ting te creitor in aition to te rigt grante i" 'y Article 11+ "ayco"pel te e'tor to "a?e te elivery.9f te ting is ineter"inate or generic e "ay as? tat te o'ligation 'e co"plie wit at te e;pense of te e'tor.9f te o'ligor elays or as pro"ise to eliver te sa"e ting to two or "ore persons wo o not ave te sa"e interest e sall 'eresponsi'le for any fortuitous event until e as effecte te elivery. (1+%:)#rt. (--. An o'ligation wic consists in te elivery of a eter"inate ting sall 'e e;tinguise if it soul 'e lost or estroyewitout te fault of te e'tor an 'efore e as incurre in elay.en 'y law or stipulation te o'ligor is lia'le even for fortuitous events te loss of te ting oes not e;tinguis te o'ligation ane sall 'e responsi'le for a"ages. 0e sa"e rule applies wen te nature of te o'ligation re7uires te assu"ption of ris?. (1183a)#rt. (-<. 9n an o'ligation to eliver a generic ting te loss or estruction of anyting of te sa"e ?in oes not e;tinguis teo'ligation. (n)#rt. ()*7. 0nless ot+erise agreed te goos re"ain at te sellerQs ris? until the o!nership therein is transferred to the buyer 'utwen te o!nership therein is transferred to the buyer te goos are at te 'uyerQs ris? weter actual elivery as 'een "ae ornot e%cept tat# (3) ere actual elivery as 'een ,!AL!, troug te fault of eiter te 'uyer or seller te goos are at te ris"of the party in fault. (n)#rt. ()<8. 9n case of loss eterioration or i"prove"ent of te ting 'efore its elivery te rules in Article 118% sall 'e o'serve tevenor 'eing consiere te e'tor. (n)#rt. ((89. en te conitions ave 'een i"pose wit te intention of suspening te efficacy of an o'ligation to give te followingrules sall 'e o'serve in case of te i"prove"ent loss or eterioration of te ting uring te penency of te conition#(1) 9f te ting is lost witout te fault of te e'tor te o'ligation sall 'e e;tinguise(3) 9f te ting is lost troug te fault of te e'tor e sall 'e o'lige to pay a"ages it is unerstoo tat te ting is lost wen itperises or goes out of co""erce or isappears in suc a way tat its e;istence is un?nown or it cannot 'e recovere'< =hen the thing deteriorates !ithout the fault of the debtorA the impairment is to be borne by the creditor (4) 9f it eteriorates troug te fault of te e'tor te creitor "ay coose 'etween te rescission of te o'ligation an its fulfill"entwit ine"nity for a"ages in eiter case(5) 9f te ting is i"prove 'y its nature or 'y ti"e te i"prove"ent sall inure to te 'enefit of te creitor(:) 9f it is i"prove at te e;pense of te e'tor e sall ave no oter rigt tan tat grante to te usufructuary. (1133)

41



iv. After elivery (Arts. 15+4 15:8 15:%)#rt. ()*7. Enless oterwise agree te goos re"ain at te sellerHs ris" until t+e oners+ip t+erein is transferred to t+e buyer, 'utwen te oners+ip t+erein is transferred to t+e buyer te goos are at te buyerHs ris" weter actual elivery as 'een "ae or note%cept tat#(1) ere elivery of te goos as 'een "ae to te 'uyer or to a 'ailee for te 'uyer in pursuance of te contract an teownersip in te goos as 'een retaine 'y te seller merely to secure performance by the buyer of is o'ligations uner tecontract te goos are at te 'uyerQs ris? fro" te ti"e of suc elivery(3) ere actual elivery as 'een elaye troug te fault of either the buyer or seller te goos are at te ris? of te party infault. (n)#rt. ()8. 9f te ting sol soul 'e &S0 in conse7uence of te hidden faults an te !F,& AS AA! of te" he shall

bear the loss an sall 'e o'lige to return the price an refund the e%penses of te contract wit damages. 9f e was F&0 AA! of te" e sall only return the price and interest tereon an reimburse the e%penses of te contract wic te venee"igt ave pai. (148a)#rt. ()9. 9f te ting sol a any H9,,!F 6AE0 at te ti"e of te sale an soul tereafter 'e lost by a fortuitous event ortroug te fault of the vendee te latter "ay e"an of te venor te price wic e pai !SS te value wic te ting awen it was lost.9f te venor acte in BA, 6A90H e sall pay damages to te venee. (1488a)

24T$S:G!F!A E!# is? of loss of te goos sall 'e 'orne 'y te owner EF!SS te contrary is agree upon. 9nas"uc as eliverytransfers ownersip te ris? of loss sall 'e 'orne 'y te 'uyer &FL A60! te goos ave 'een elivere to i" or is 'ailee.!OC!/09&FS#• Stipulation to te contrary

o Fotwitstaning tat title re"aine wit seller it can 'e valily agree tat te ris? of loss sall 'e 'orne 'y te

'uyer • Security title

o 9f title retaine 'y seller only to secure pay"ent of te price te ris? of loss is on te 'uyer fro" te ti"e of suc

elivery as te 'eneficial owner o Ai"e at conitional sales were te goos were elivere to te 'uyer an use 'y i" 'ut t itle was retaine 'y

seller instea of accepting a "ortgage on te goos sol.o B!F!69C9A 9F0!!S0 is in te 'uyer an te ris? soul 'e on i"

• ,elay

o 9f actual elivery is ,!AL!, troug te fault of 'uyer or seller te goos are at te ris? of te party in fault.

,. /ractice notes# ris? of loss an eterioration* rafting notes to aress issues of loss an eterioration

XI. #ctions and remedies for breach of agreement A. 9n general (Art. 15%4)

#rt. ()97. Actions for 'reac of te contract of sale of goos sall 'e governe particularly 'y te provisions of this Chapter an asto "atters not specifically provie for erein 'y oter applica'le provisions of tis 0itle. (n)

i. Actions availa'le to S!!a) payment of price (Art. 15%5)

#rt. ()9). ere uner a contract of sale te ownersip of te goos as passe to te 'uyer an e wrongfully neglects or refusesto pay for te goos accoring to te ter"s of te contract of sale te seller "ay "aintain an action against i" for te price of tegoos.ere uner a contract of sale te price is paya'le on a certain ay irrespective of elivery or of transfer of title an te 'uyerwrongfully neglects or refuses to pay suc price te seller "ay "aintain an action for te price altoug te ownersip in te goosas not passe. But it sall 'e a efense to suc an action tat te seller at any ti"e 'efore te ug"ent in suc action as "anifestean ina'ility to perfor" te contract of sale on is part or an intention not to perfor" it. Altoug te ownersip in te goos as not passe if tey cannot reaily 'e resol for a reasona'le price an if te provisions ofarticle 15%: fourt paragrap are not applica'le te seller "ay offer to eliver te goos to te 'uyer an if te 'uyer refuses to

receive te" "ay notify te 'uyer tat te goos are tereafter el 'y te seller as 'ailee for te 'uyer. 0ereafter te seller "aytreat te goos as te 'uyerQs an "ay "aintain an action for te price. (n)

') damages (Arts. 15%:)#rt. ()9. ere te 'uyer wrongfully neglects or refuses to accept an pay for te goos te seller "ay "aintain an action againsti" for a"ages for nonacceptance.0e "easure of a"ages is te esti"ate loss irectly an naturally resulting in te orinary course of events fro" te 'uyerQs 'reacof contract.ere tere is an availa'le "ar?et for te goos in 7uestion te "easure of a"ages is in te a'sence of special circu"stancessowing pro;i"ate a"age of a ifferent a"ount te ifference 'etween te contract price an te "ar?et or current price at te ti"eor ti"es wen te goos ougt to ave 'een accepte or if no ti"e was fi;e for acceptance ten at te ti"e of te refusal to accept.9f wile la'or or e;pense of "aterial a"ount is necessary on te part of te seller to ena'le i" to fulfill is o'ligations uner tecontract of sale te 'uyer repuiates te contract or notifies te seller to procee no furter terewit te 'uyer sall 'e lia'le to teseller for la'or perfor"e or e;penses "ae 'efore receiving notice of te 'uyerQs repuiation or counter"an. 0e profit te sellerwoul ave "ae if te contract or te sale a 'een fully perfor"e sall 'e consiere in awaring te a"ages. (n)

c) rescission of contract (Art. 15%)#rt. ()9+. ere te goos ave not 'een elivere to te 'uyer an te 'uyer as repuiate te contract of sale or as "anifesteis ina'ility to perfor" is o'ligations tereuner or as co""itte a 'reac tereof te seller "ay totally rescin te contract of sale'y giving notice of is election so to o to te 'uyer. (n)

ii. Actions availa'le to te BEL!a) specific performance (Art. 15%8)

#rt. ()98. ere te seller as 'ro?en a contract to eliver specific or ascertaine goos a court "ay on te application of te 'uyerirect tat te contract sall 'e perfor"e specifically witout giving te seller te option of retaining te goos on pay"ent of

43



a"ages. 0e ug"ent or ecree "ay 'e unconitional or upon suc ter"s an conitions as to a"ages pay"ent of te price anoterwise as te court "ay ee" ust. (n)

') damages (Art. 15%%)#rt. ()99. ere tere is a 'reac of warranty 'y te seller te 'uyer "ay at is election#(1) Accept or ?eep te goos an set up against te seller te 'reac of warranty 'y way of recoup"ent in i"inution or e;tinction ofte price(3) Accept or ?eep te goos an "aintain an action against te seller for a"ages for te 'reac of warranty($) efuse to accept te goos an "aintain an action against te seller for a"ages for te 'reac of warranty(4) escin te contract of sale an refuse to receive te goos or if te goos ave alreay 'een receive return te" or offer toreturn te" to te seller an recover te price or any part tereof wic as 'een pai.

en te 'uyer as clai"e an 'een grante a re"ey in anyone of tese ways no oter re"ey can tereafter 'e grante witoutpreuice to te provisions of te secon paragrap of Article 11%1.ere te goos ave 'een elivere to te 'uyer e cannot rescin te sale if e ?new of te 'reac of warranty wen e acceptete goos witout protest or if e fails to notify te seller witin a reasona'le ti"e of te election to rescin or if e fails to return or tooffer to return te goos to te seller in su'stantially as goo conition as tey were in at te ti"e te ownersip was transferre to te'uyer. But if eterioration or inury of te goos is ue to te 'reac or warranty suc eterioration or inury sall not prevent te 'uyerfro" returning or offering to return te goos to te seller an rescining te sale.ere te 'uyer is entitle to rescin te sale an elects to o so e sall cease to 'e lia'le for te price upon returning or offering toreturn te goos. 9f te price or any part tereof as alreay 'een pai te seller sall 'e lia'le to repay so "uc tereof as as 'eenpai concurrently wit te return of te goos or i""eiately after an offer to return te goos in e;cange for repay"ent of te price.ere te 'uyer is entitle to rescin te sale an elects to o so if te seller refuses to accept an offer of te 'uyer to return tegoos te 'uyer sall tereafter 'e ee"e to ol te goos as 'ailee for te seller 'ut su'ect to a lien to secure pay"ent of anyportion of te price wic as 'een pai an wit te re"eies for te enforce"ent of suc lien allowe to an unpai seller 'y Article153:.(5) 9n te case of 'reac of warranty of 7uality suc loss in te a'sence of special circu"stances sowing pro;i"ate a"age of agreater a"ount is te ifference 'etween te value of te goos at te ti"e of elivery to te 'uyer an te value tey woul ave aif tey a answere to te warranty. (n)

B. e"eies availa'lei. e"eies availa'le to te S!!

a) lien on the goods (Arts. 1535*153% 15$5)#rt. ()-). 0e seller of goos is ee"e to 'e an unpai seller witin te "eaning of tis 0itle#(1) en te wole of te price as not 'een pai or tenere(3) en a 'ill of e;cange or oter negotia'le instru"ent as 'een receive as conitional pay"ent an te conition on wic it wasreceive as 'een 'ro?en 'y reason of te isonor of te instru"ent te insolvency of te 'uyer or oterwise.9n Articles 1535 to 15$5 te ter" RsellerR inclues an agent of te seller to wo" te 'ill of laing as 'een inorse or a consignor oragent wo as i"self pai or is irectly responsi'le for te price or any oter person wo is in te position of a seller. (n)#rt. ()-. Su'ect to te provisions of tis 0itle notwitstaning tat te ownersip in te goos "ay ave passe to te 'uyer teunpai seller of goos as suc as#(1) A lien on te goos or rigt to retain te" for te price wile e is in possession of te"

(3) 9n case of te insolvency of te 'uyer a rigt of stopping te goos in transitu after e as parte wit te possession of te"($) A rigt of resale as li"ite 'y tis 0itle(4) A rigt to rescin te sale as li?ewise li"ite 'y tis 0itle.ere te ownersip in te goos as not passe to te 'uyer te unpai seller as in aition to is oter re"eies a rigt ofwitoling elivery si"ilar to an coe;tensive wit is rigts of lien an stoppage in transitu were te ownersip as passe to te'uyer. (n)#rt. ()-+. Su'ect to te provisions of tis 0itle te unpai seller of goos wo is in possession of te" is entitle to retain possessionof te" until pay"ent or tener of te price in te following cases na"ely#(1) ere te goos ave 'een sol witout any stipulation as to creit(3) ere te goos ave 'een sol on creit 'ut te ter" of creit as e;pire($) ere te 'uyer 'eco"es insolvent.0e seller "ay e;ercise is rigt of lien notwitstaning tat e is in possession of te goos as agent or 'ailee for te 'uyer. (n)#rt. ()-8. ere an unpai seller as "ae part elivery of te goos e "ay e;ercise is rigt of lien on te re"ainer unless sucpart elivery as 'een "ae uner suc circu"stances as to sow an intent to waive te lien or rigt of retention. (n)#rt. ()-9. 0e unpai seller of goos loses is lien tereon#

(1) en e elivers te goos to a carrier or oter 'ailee for te purpose of trans"ission to te 'uyer witout reserving te ownersipin te goos or te rigt to te possession tereof(3) en te 'uyer or is agent lawfully o'tains possession of te goos($) By waiver tereof.0e unpai seller of goos aving a lien tereon oes not lose is lien 'y reason only tat e as o'taine ug"ent or ecree for teprice of te goos. (n)#rt. ()<). Su'ect to te provisions of tis 0itle te unpai sellerQs rigt of lien or stoppage in transitu is not affecte 'y any sale oroter isposition of te goos wic te 'uyer "ay ave "ae unless te seller as assente tereto.9f owever a negotia'le ocu"ent of title as 'een issue for goos no sellerQs lien or rigt of stoppage in transitu sall efeat terigt of any purcaser for value in goo fait to wo" suc ocu"ent as 'een negotiate weter suc negotiation 'e prior orsu'se7uent to te notification to te carrier or oter 'ailee wo issue suc ocu"ent of te sellerQs clai" to a lien or rigt of stoppagein transitu. (n)

') right of stoppage of goods in transitu (Art. 15$+*15$3 15$5)#rt. ()<*. Su'ect to te provisions of tis 0itle wen te 'uyer of goos is or 'eco"es insolvent te unpai seller wo as parte

wit te possession of te goos as te rigt of stopping te" in transitu tat is to say e "ay resu"e possession of te goos atany ti"e wile tey are in transit an e will ten 'eco"e entitle to te sa"e rigts in regar to te goos as e woul ave a if ea never parte wit te possession. (n)#rt. ()<(. Goos are in transit witin te "eaning of te preceing article#(1) 6ro" te ti"e wen tey are elivere to a carrier 'y lan water or air or oter 'ailee for te purpose of trans"ission to te 'uyeruntil te 'uyer or is agent in tat 'ealf ta?es elivery of te" fro" suc carrier or oter 'ailee(3) 9f te goos are reecte 'y te 'uyer an te carrier or oter 'ailee continues in possession of te" even if te seller as refuseto receive te" 'ac?.Goos are no longer in transit witin te "eaning of te preceing article#(1) 9f te 'uyer or is agent in tat 'ealf o'tains elivery of te goos 'efore teir arrival at te appointe estination

4$



(3) 9f after te arrival of te goos at te appointe estination te carrier or oter 'ailee ac?nowleges to te 'uyer or is agent tate ols te goos on is 'ealf an continues in possession of te" as 'ailee for te 'uyer or is agent an it is i""aterial tatfurter estination for te goos "ay ave 'een inicate 'y te 'uyer($) 9f te carrier or oter 'ailee wrongfully refuses to eliver te goos to te 'uyer or is agent in tat 'ealf.9f te goos are elivere to a sip freigt train truc? or airplane cartere 'y te 'uyer it is a 7uestion epening on tecircu"stances of te particular case weter tey are in te possession of te carrier as suc or as agent of te 'uyer.9f part elivery of te goos as 'een "ae to te 'uyer or is agent in tat 'ealf te re"ainer of te goos "ay 'e stoppe intransitu unless suc part elivery as 'een uner suc circu"stances as to sow an agree"ent wit te 'uyer to give up possessionof te wole of te goos. (n)#rt. ()<-. 0e unpai seller "ay e;ercise is rigt of stoppage in transitu eiter 'y o'taining actual possession of te goos or 'ygiving notice of is clai" to te carrier or oter 'ailee in wose possession te goos are. Suc notice "ay 'e given eiter to te

person in actual possession of te goos or to is principal. 9n te latter case te notice to 'e effectual "ust 'e given at suc ti"e anuner suc circu"stances tat te principal 'y te e;ercise of reasona'le iligence "ay prevent a elivery to te 'uyer.en notice of stoppage in transitu is given 'y te seller to te carrier or oter 'ailee in possession of te goos e "ust reeliver tegoos to or accoring to te irections of te seller. 0e e;penses of suc elivery "ust 'e 'orne 'y te seller. 9f owever anegotia'le ocu"ent of title representing te goos as 'een issue 'y te carrier or oter 'ailee e sall not o'lige to eliver or ustifie in elivering te goos to te seller unless suc ocu"ent is first surrenere for cancellation. (n)#rt. ()<). Su'ect to te provisions of tis 0itle te unpai sellerQs rigt of lien or stoppage in transitu is not affecte 'y any sale oroter isposition of te goos wic te 'uyer "ay ave "ae unless te seller as assente tereto.9f owever a negotia'le ocu"ent of title as 'een issue for goos no sellerQs lien or rigt of stoppage in transitu sall efeat terigt of any purcaser for value in goo fait to wo" suc ocu"ent as 'een negotiate weter suc negotiation 'e prior orsu'se7uent to te notification to te carrier or oter 'ailee wo issue suc ocu"ent of te sellerQs clai" to a lien or rigt of stoppagein transitu. (n)

c) right of resale (Art. 15$$)#rt. ()<<. ere te goos are of perisa'le nature or were te seller e;pressly reserves te rigt of resale in case te 'uyer soul"a?e efault or were te 'uyer as 'een in efault in te pay"ent of te price for an unreasona'le ti"e an unpai seller aving arigt of lien or aving stoppe te goos in transitu "ay resell te goos. He sall not tereafter 'e lia'le to te original 'uyer upon tecontract of sale or for any profit "ae 'y suc resale 'ut "ay recover fro" te 'uyer a"ages for any loss occasione 'y te 'reacof te contract of sale.ere a resale is "ae as autori@e in tis article te 'uyer ac7uires a goo title as against te original 'uyer.9t is not essential to te valiity of resale tat notice of an intention to resell te goos 'e given 'y te seller to te original 'uyer. Butwere te rigt to resell is not 'ase on te perisa'le nature of te goos or upon an e;press provision of te contract of sale tegiving or failure to give suc notice sall 'e relevant in any issue involving te 7uestion weter te 'uyer a 'een in efault for anunreasona'le ti"e 'efore te resale was "ae.9t is not essential to te valiity of a resale tat notice of te ti"e an place of suc resale soul 'e given 'y te seller to te original'uyer.0e seller is 'oun to e;ercise reasona'le care an ug"ent in "a?ing a resale an su'ect to tis re7uire"ent "ay "a?e a resaleeiter 'y pu'lic or private sale. He cannot owever irectly or inirectly 'uy te goos. (n)

) right of rescission (Art. 15$4)#rt. ()<7. An unpai seller aving te rigt of lien or aving stoppe te goos in transitu "ay rescin te transfer of title an resu"ete ownersip in te goos were e e;pressly reserve te rigt to o so in case te 'uyer soul "a?e efault or were te 'uyeras 'een in efault in te pay"ent of te price for an unreasona'le ti"e. 0e seller sall not tereafter 'e lia'le to te 'uyer upon tecontract of sale 'ut "ay recover fro" te 'uyer a"ages for any loss occasione 'y te 'reac of te contract.

0e transfer of title sall not 'e el to ave 'een rescine 'y an unpai seller until e as "anifeste 'y notice to te 'uyer or 'yso"e oter overt act an intention to rescin. 9t is not necessary tat suc overt act soul 'e co""unicate to te 'uyer 'ut te givingor failure to give notice to te 'uyer of te intention to rescin sall 'e relevant in any issue involving te 7uestion weter te 'uyera 'een in efault for an unreasona'le ti"e 'efore te rigt of rescission was asserte. (n)

e) rescission in case of loss of immovable property (Art. 15%1)#rt. ()9(. Soul te venor ave reasona'le grouns to fear te loss of i""ova'le property sol an its price e "ay i""eiatelysue for te rescission of te sale.Soul suc groun not e;ist te provisions of Article 11%1 sall 'e o'serve. (15+$)

f) rescission in case of sale of movable property (Art. 15%$)#rt. ()9<. it respect to "ova'le property te rescission of te sale sall of rigt ta?e place in te interest of te venor if tevenee upon te e;piration of te perio fi;e for te elivery of te ting soul not ave appeare to receive it or aving appearee soul not ave tenere te price at te sa"e ti"e unless a longer perio as 'een stipulate for its pay"ent. (15+5)

ii. e"eies availa'le to BEL!a) remedies in sale of goods by description and0or sample (Art. 1481)

#rt. (78(. 9n te contract of sale of goos 'y escription or 'y sa"ple te contract "ay 'e rescine if te 'ul? of te goos elivereo not correspon wit te escription or te sa"ple an if te contract 'e 'y sa"ple as well as escription it is not sufficient tat te'ul? of goos correspon wit te sa"ple if tey o not also correspon wit te escription.0e 'uyer sall ave a reasona'le opportunity of co"paring te 'ul? wit te escription or te sa"ple. (n)

') remedies in case of loss of specific goods (Art. 14%4)#rt. (797. ere te parties purport a sale of specific goos an te goos witout te ?nowlege of te seller ave perise in partor ave wolly or in a "aterial part so eteriorate in 7uality as to 'e su'stantially cange in caracter te 'uyer "ay at is option

treat te sale#(1) As avoie or(3) As vali in all of te e;isting goos or in so "uc tereof as ave not eteriorate an as 'ining te 'uyer to pay te agree pricefor te goos in wic te ownersip will pass if te sale was ivisi'le. (n)

c) remedies in case of delivery of goods less than the ;uantity contracted (Art. 1533)#rt. ()--. ere te seller elivers to te 'uyer a 7uantity of goos less tan e contracte to sell te 'uyer "ay reect te" 'ut ifte 'uyer accepts or retains te goos so elivere ?nowing tat te seller is not going to perfor" te contract in full e "ust pay forte" at te contract rate. 9f owever te 'uyer as use or ispose of te goos elivere 'efore e ?nows tat te seller is notgoing to perfor" is contract in full te 'uyer sall not 'e lia'le for "ore tan te fair value to i" of te goos so receive.ere te seller elivers to te 'uyer a 7uantity of goos larger tan e contracte to sell te 'uyer "ay accept te goos inclue inte contract an reect te rest. 9f te 'uyer accepts te wole of te goos so elivere e "ust pay for te" at te contract rate.

44



ere te seller elivers to te 'uyer te goos e contracte to sell "i;e wit goos of a ifferent escription not inclue in tecontract te 'uyer "ay accept te goos wic are in accorance wit te contract an reect te rest.9n te preceing two paragraps if te su'ect "atter is inivisi'le te 'uyer "ay reect te wole of te goos.0e provisions of tis article are su'ect to any usage of trae special agree"ent or course of ealing 'etween te parties. (n)

) remedies in case of a sale of real property by unit of measure (Arts. 15$% 154+ 1541 154$)#rt. ()<9. 0e o'ligation to eliver te ting sol inclues tat of placing in te control of te venee all tat is "entione in tecontract in confor"ity wit te following rules#9f te sale of real estate soul 'e "ae wit a state"ent of its area at te rate of a certain price for a unit of "easure or nu"'er tevenor sall 'e o'lige to eliver to te venee if te latter soul e"an it all tat "ay ave 'een state in te contract 'ut soultis 'e not possi'le te venee "ay coose 'etween a proportional reuction of te price an te rescission of te contract provie

tat in te latter case te lac? in te area 'e not less tan one*tent of tat state.0e sa"e sall 'e one even wen te area is te sa"e if any part of te i""ova'le is not of te 7uality specifie in te contract.0e rescission in tis case sall only ta?e place at te will of te venee wen te inferior value of te ting sol e;cees one*tent ofte price agree upon.Feverteless if te venee woul not ave 'ougt te i""ova'le a e ?nown of its s"aller area of inferior 7uality e "ay rescinte sale. (14:%a)#rt. ()7*. 9f in te case of te preceing article tere is a greater area or nu"'er in te i""ova'le tan tat state in te contract tevenee "ay accept te area inclue in te contract an reect te rest. 9f e accepts te wole area e "ust pay for te sa"e at tecontract rate. (14+a)#rt. ()7(. 0e provisions of te two preceing articles sall apply to uicial sales. (n)#rt. ()7<. 0e actions arising fro" Articles 15$% an 1543 sall prescri'e in si; "onts counte fro" te ay of elivery. (143a)

) remedies in case of sale of real property made of a lump sum (Arts. 1543 154$)#rt. ()7-. 9n te sale of real estate "ae for a lu"p su" an not at te rate of a certain su" for a unit of "easure or nu"'er teresall 'e no increase or ecrease of te price altoug tere 'e a greater or less area or nu"'er tan tat state in te contract.

0e sa"e rule sall 'e applie wen two or "ore i""ova'les as sol for a single price 'ut if 'esies "entioning te 'ounarieswic is inispensa'le in every conveyance of real estate its area or nu"'er soul 'e esignate in te contract te venor sall 'e'oun to eliver all tat is inclue witin sai 'ounaries even wen it e;cees te area or nu"'er specifie in te contract ansoul e not 'e a'le to o so e sall suffer a reuction in te price in proportion to wat is lac?ing in te area or nu"'er unless tecontract is rescine 'ecause te venee oes not accee to te failure to eliver wat as 'een stipulate. (141)

#rt. ()7<. 0e actions arising fro" Articles 15$% an 1543 sall prescri'e in si; "onts counte fro" te ay of elivery. (143a)f) suspension of payments (Art. 15%+)

#rt. ()9*. Soul te venee 'e istur'e in te possession or ownersip of te ting ac7uire or soul e ave reasona'le grounsto fear suc istur'ance 'y a vinicatory action or a foreclosure of "ortgage e "ay suspen te pay"ent of te price until tevenor as cause te istur'ance or anger to cease unless te latter gives security for te return of te price in a proper case or itas 'een stipulate tat notwitstaning any suc contingency te venee sall 'e 'oun to "a?e te pay"ent. A "ere act oftrespass sall not autori@e te suspension of te pay"ent of te price. (15+3a)

g) remedies in sale of immovable property (Art. 15%3)

#rt. ()9-. 9n te sale of i""ova'le property even toug it "ay ave 'een stipulate tat upon failure to pay te price at te ti"eagree upon te rescission of te contract sall of rigt ta?e place te venee "ay pay even after te e;piration of te perio as longas no e"an for rescission of te contract as 'een "ae upon i" eiter uicially or 'y a notarial act. After te e"an te court"ay not grant i" a new ter". (15+4a)C. Special aws

i. 0e ecto aw (Arts. 1484*148:) re sale of personal property paya'le in install"ents#rt. (787. 9n a contract of sale of personal property te price of wic is paya'le in install"ents te venor "ay e;ercise any of tefollowing re"eies#(1) !;act fulfill"ent of te o'ligation soul te venee fail to pay(3) Cancel te sale soul te veneeQs failure to pay cover two or "ore install"ents($) 6oreclose te cattel "ortgage on te ting sol if one as 'een constitute soul te veneeQs failure to pay cover two or "oreinstall"ents. 9n tis case e sall ave no furter action against te purcaser to recover any unpai 'alance of te price. Anyagree"ent to te contrary sall 'e voi. (1454*A*a)#rt. (78). 0e preceing article sall 'e applie to contracts purporting to 'e leases of personal property wit option to 'uy wen telessor as eprive te lessee of te possession or enoy"ent of te ting. (1454*A*a)

#rt. (78. 9n te case referre to in two preceing articles a stipulation tat te install"ents or rents pai sall not 'e returne to tevenee or lessee sall 'e vali insofar as te sa"e "ay not 'e unconsciona'le uner te circu"stances. (n)

a) 0ransactions covere an not covere') /urpose of te lawc) e"eies availa'le to te venor ) !lection of re"eies

ii. 0e 2acea aw (.#. 2o. ))-)a) 0ransactions covere an not covere (Sec. $)

Section <. 9n all transactions or contracts involving te sale or financing of real estate on install"ent pay"ents incluing resientialcono"iniu" apart"ents 'ut e;cluing inustrial lots co""ercial 'uilings an sales to tenants uner epu'lic Act Fu"'ere 0irty*eigt unre forty*four as a"ene 'y epu'lic Act Fu"'ere Si;ty*tree unre eigty*nine were te 'uyer as pai at least twoyears of install"ents te 'uyer is entitle to te following rigts in case e efaults in te pay"ent of succeeing install"ents#(a) 0o pay witout aitional interest te unpai install"ents ue witin te total grace perio earne 'y i" wic is ere'y fi;e atte rate of one "ont grace perio for every one year of install"ent pay"ents "ae# /rovie 0at tis rigt sall 'e e;ercise 'y te

'uyer only once in every five years of te life of te contract an its e;tensions if any.(') 9f te contract is cancele te seller sall refun to te 'uyer te cas surrener value of te pay"ents on te property e7uivalentto fifty per cent of te total pay"ents "ae an after five years of install"ents an aitional five per cent every year 'ut not to e;ceeninety per cent of te total pay"ents "ae# /rovie 0at te actual cancellation of te contract sall ta?e place after tirty ays fro"receipt 'y te 'uyer of te notice of cancellation or te e"an for rescission of te contract 'y a notarial act an upon full pay"ent ofte cas surrener value to te 'uyer.,own pay"ents eposits or options on te contract sall 'e inclue in te co"putation of te total nu"'er of install"ent pay"ents"ae.

') /urpose of te law (Sec. 3)Section -. 9t is ere'y eclare a pu'lic policy to protect 'uyers of real estate on install"ent pay"ents against onerous an oppressiveconitions.

c) igts grante to te 'uyer

45



* at least two years of install"ents (Sec. $)Section <. 9n all transactions or contracts involving te sale or financing of real estate on install"ent pay"ents incluing resientialcono"iniu" apart"ents 'ut e;cluing inustrial lots co""ercial 'uilings an sales to tenants uner epu'lic Act Fu"'ere 0irty*eigt unre forty*four as a"ene 'y epu'lic Act Fu"'ere Si;ty*tree unre eigty*nine were te 'uyer as pai at least twoyears of install"ents te 'uyer is entitle to te following rigts in case e efaults in te pay"ent of succeeing install"ents#(a) 0o pay witout aitional interest te unpai install"ents ue witin te total grace perio earne 'y i" wic is ere'y fi;e atte rate of one "ont grace perio for every one year of install"ent pay"ents "ae# /rovie 0at tis rigt sall 'e e;ercise 'y te'uyer only once in every five years of te life of te contract an its e;tensions if any.(') 9f te contract is cancele te seller sall refun to te 'uyer te cas surrener value of te pay"ents on te property e7uivalentto fifty per cent of te total pay"ents "ae an after five years of install"ents an aitional five per cent every year 'ut not to e;ceeninety per cent of te total pay"ents "ae# /rovie 0at te actual cancellation of te contract sall ta?e place after tirty ays fro"

receipt 'y te 'uyer of te notice of cancellation or te e"an for rescission of te contract 'y a notarial act an upon full pay"ent ofte cas surrener value to te 'uyer.,own pay"ents eposits or options on te contract sall 'e inclue in te co"putation of te total nu"'er of install"ent pay"ents"ae.

* less tan two years of install"ents (Sec. 4)Section 7. 9n case were less tan two years of install"ents were pai te seller sall give te 'uyer a grace perio of not less tansi;ty ays fro" te ate te install"ent 'eca"e ue.9f te 'uyer fails to pay te install"ents ue at te e;piration of te grace perio te seller "ay cancel te contract after tirty aysfro" receipt 'y te 'uyer of te notice of cancellation or te e"an for rescission of te contract 'y a notarial act.

* oter rigts of te 'uyer (Secs. 5 :)Section ). Ener Section $ an 4 te 'uyer sall ave te rigt to sell is rigts or assign te sa"e to anoter person or to reinstatete contract 'y upating te account uring te grace perio an 'efore actual cancellation of te contract. 0e ee of sale orassign"ent sall 'e one 'y notarial act.Section . 0e 'uyer sall ave te rigt to pay in avance any install"ent or te full unpai 'alance of te purcase price any ti"ewitout interest an to ave suc full pay"ent of te purcase price annotate in te certificate of title covering te property.

) Cancellation of sale 'y te seller * re7uire"ents* perio

e) Calculation of install"ent pay"entsf) Stipulation to te contrary (Sec. )

Section +. Any stipulation in any contract ereafter entere into contrary to te provisions of Sections $ 4 5 an : sall 'e null anvoi.

,. /ractice notes# actions an re"eiesi. 0ypical contractual stipulations in case of 'reacii. Breac of covenantiii. Breac of warranty

XII. $%tinguishment of sale A. 9n generalB. Causes of e;tinguis"ent (Art. 1:++)#rt. (**. Sales are e;tinguise 'y te sa"e causes as all oter o'ligations 'y tose state in te preceing articles of tis 0itle an'y conventional or legal ree"ption. (15+:)

C. Conventional ree"ptioni. Concept of conventional ree"ption (Art. 1:+1)

#rt. (*(. Conventional ree"ption sall ta?e place wen te venor reserves te rigt to repurcase te ting sol wit te o'ligationto co"ply wit te provisions of Article 1:1: an oter stipulations wic "ay ave 'een agree upon. (15+)

ii. Su'ect "atter of conventional ree"ptioniii. ,istinguise fro" option to 'uyiv. /erio to reee" (Art. 1:+:)

#rt. (*. 0e rigt referre to in Article 1:+1 in te a'sence of an e;press agree"ent sall last four years fro" te ate of te

contract.Soul tere 'e an agree"ent te perio cannot e;cee ten years.However te venor "ay still e;ercise te rigt to repurcase witin tirty ays fro" te ti"e final ug"ent was renere in a civilaction on te 'asis tat te contract was a true sale wit rigt to repurcase. (15+8a)

a) e;press agree"ent') no e;press agree"entc) court ug"ent# true sale wit rigt to repurcase

iv. !;ercise of rigt to reee"a) ow rigt e;ercise (Art. 1:1:)

#rt. ((. 0e venor cannot avail i"self of te rigt of repurcase witout returning to te venee te price of te sale an inaition#(1) 0e e;penses of te contract an any oter legiti"ate pay"ents "ae 'y reason of te sale(3) 0e necessary an useful e;penses "ae on te ting sol. (1518)

* "anner of e;ercise

* a"ounts tat soul 'e pai* re7uire"ent of tener of pay"ent an consignation

') wo e;ercises rigt* venor is assigns an eirs* venorDs creitor (Art. 1:1+)

#rt. ((*. 0e creitors of te venor cannot "a?e use of te rigt of ree"ption against te venee until after tey ave e;austete property of te venor. (1513)

* co*owners an co*eirs (Arts. 1:13 1:1$ 1:14)#rt. ((-. 9f several persons ointly an in te sa"e contract soul sell an univie i""ova'le wit a rigt of repurcase none ofte" "ay e;ercise tis rigt for "ore tan is respective sare.0e sa"e rule sall apply if te person wo sol an i""ova'le alone as left several eirs in wic case eac of te latter "ay onlyreee" te part wic e "ay ave ac7uire. (1514)

4:



#rt. ((<. 9n te case of te preceing article te venee "ay e"an of all te venors or co*eirs tat tey co"e to an agree"entupon te purcase of te wole ting sol an soul tey fail to o so te venee cannot 'e co"pelle to consent to a partialree"ption. (1515)#rt. ((7. !ac one of te co*owners of an univie i""ova'le wo "ay ave sol is sare separately "ay inepenently e;ercisete rigt of repurcase as regars is own sare an te venee cannot co"pel i" to reee" te wole property. (151:)

c) fro" wo" to reee" (Arts. 1:+8 1:15)* venee* veneeDs assigns (Art. 1:+8)

#rt. (*8. 0e venor "ay 'ring is action against every possessor wose rigt is erive fro" te venee even if in te seconcontract no "ention soul ave 'een "ae of te rigt to repurcase witout preuice to te provisions of te 2ortgage aw an te

an egistration aw wit respect to tir persons. (151+)

* veneeDs eirs (Art. 1:15)#rt. ((). 9f te venee soul leave several eirs te action for ree"ption cannot 'e 'rougt against eac of te" e;cept for isown sare weter te ting 'e univie or it as 'een partitione a"ong te".But if te ineritance as 'een ivie an te ting sol as 'een aware to one of te eirs te action for ree"ption "ay 'einstitute against i" for te wole. (151)

v. !ffect of ree"ption an non*ree"ption (Art. 1:1 1:18 1:+ 1:+% 1:11)* consoliation of ownersip (Art. 1:+)

#rt. (*+. 9n case of real property te consoliation of ownersip in te venee 'y virtue of te failure of te venor to co"ply wit teprovisions of article 1:1: sall not 'e recore in te egistry of /roperty witout a uicial orer after te venor as 'een uly ear.(n)

* su'rogation of venee (Art. 1:+%)#rt. (*9. 0e venee is su'rogate to te venorQs rigts an actions. (1511)

* ree"ption of entire property (Art. 1:11)#rt. (((. 9n a sale wit a rigt to repurcase te venee of a part of an univie i""ova'le wo ac7uires te wole tereof in tecase of article 4%8 "ay co"pel te venor to reee" te wole property if te latter wises to "a?e use of te rigt of ree"ption.(151$)

* istri'ution of fruits (Art. 1:1)#rt. ((+. 9f at te ti"e of te e;ecution of te sale tere soul 'e on te lan visi'le or growing fruits tere sall 'e norei"'urse"ent for or prorating of tose e;isting at te ti"e of ree"ption if no ine"nity was pai 'y te purcaser wen te sale wase;ecute.Soul tere ave 'een no fruits at te ti"e of te sale an so"e e;ist at te ti"e of ree"ption tey sall 'e prorate 'etween teree"ptioner an te venee giving te latter te part corresponing to te ti"e e possesse te lan in te last year counte fro"te anniversary of te ate of te sale. (151%a)

* return free fro" liens an encu"'rances (Art. 1:18)#rt. ((8. 0e venor wo recovers te ting sol sall receive it free fro" all carges or "ortgages constitute 'y te venee 'ut esall respect te leases wic te latter "ay ave e;ecute in goo fait an in accorance wit te custo" of te place were te

lan is situate. (153+)

,. egal ree"ptioni. Conceptii. en applica'le

a) Co*owners (Art. 1:3+)#rt. (-*. A co*owner of a ting "ay e;ercise te rigt of ree"ption in case te sares of all te oter co*owners or of any of te"are sol to a tir person. 9f te price of te alienation is grossly e;cessive te ree"ptioner sall pay only a reasona'le one.Soul two or "ore co*owners esire to e;ercise te rigt of ree"ption tey "ay only o so in proportion to te sare tey "ayrespectively ave in te ting owne in co""on. (1533a)

') Aoining lan*owners of rural lan (Art. 1:31)#rt. (-(. 0e owners of aoining lans sall also ave te rigt of ree"ption wen a piece of rural lan te area of wic oes note;cee one ectare is alienate unless te grantee oes not own any rural lan.0is rigt is not applica'le to aacent lans wic are separate 'y 'roo?s rains ravines roas an oter apparent servitues forte 'enefit of oter estates.

9f two or "ore aoining owners esire to e;ercise te rigt of ree"ption at te sa"e ti"e te owner of te aoining lan of s"allerarea sall 'e preferre an soul 'ot lans ave te sa"e area te one wo first re7ueste te ree"ption. (153$a)

c) Aoining lan*owners of ur'an lan (Art. 1:33)#rt. (--. enever a piece of ur'an lan wic is so s"all an so situate tat a "aor portion tereof cannot 'e use for anypractical purpose witin a reasona'le ti"e aving 'een 'ougt "erely for speculation is a'out to 'e re*sol te owner of anyaoining lan as a rigt of pre*e"ption at a reasona'le price.9f te re*sale as 'een perfecte te owner of te aoining lan sall ave a rigt of ree"ption also at a reasona'le price.en two or "ore owners of aoining lans wis to e;ercise te rigt of pre*e"ption or ree"ption te owner wose intene use ofte lan in 7uestion appears 'est ustifie sall 'e preferre. (n)

iii. /erio to reee" (Art. 1:3$)#rt. (-<. 0e rigt of legal pre*e"ption or ree"ption sall not 'e e;ercise e;cept witin tirty ays fro" te notice in writing 'y teprospective venor or 'y te venor as te case "ay 'e. 0e ee of sale sall not 'e recore in te egistry of /roperty unlessacco"panie 'y an affiavit of te venor tat e as given written notice tereof to all possi'le ree"ptioners.0e rigt of ree"ption of co*owners e;clues tat of aoining owners. (1534a)

iv. !;ercise of rigt to reee" (Art. 1:3$)#rt. (-<. 0e rigt of legal pre*e"ption or ree"ption sall not 'e e;ercise e;cept witin tirty ays fro" te notice in writing 'y teprospective venor or 'y te venor as te case "ay 'e. 0e ee of sale sall not 'e recore in te egistry of /roperty unlessacco"panie 'y an affiavit of te venor tat e as given written notice tereof to all possi'le ree"ptioners.0e rigt of ree"ption of co*owners e;clues tat of aoining owners. (1534a)

v. ee"ptionpre*e"ption uner special lawsa) lan ac7uire uner free patent or o"estea (C.A. Fo. 141 sec. 11%)

Sec. ((9. !very conveyance of lan ac7uire uner te free patent or o"estea provisions wen proper sall 'e su'ect torepurcase 'y te applicant is wiow or legal eirs witin a perio of five years fro" te ate of te conveyance.

') e;tra*uicial foreclosure of "ortgage (Act Fo. $1$5 sec. :)

4



Sec. . 9n all cases in wic an e;trauicial sale is "ae uner te special power erein 'efore referre to te e'tor is successorsin interest or any uicial creitor or ug"ent creitor of sai e'tor or any person aving a lien on te property su'se7uent to te"ortgage or ee of trust uner wic te property is sol "ay reee" te sa"e at any ti"e witin te ter" of one year fro" an afterte ate of te sale an suc ree"ption sall 'e governe 'y te provisions of Sections 4:4 to 4:: inclusive of te Coe of Civil/roceure in so far as tese are not inconsistent wit te provisions of tis Act.

c) agricultural lan (.A. Fo. $844 sec. 13)Section (-. esseeQs igt of ee"ption * 9n case te lanoling is sol to a tir person witout te ?nowlege of te agriculturallessee te latter sall ave te rigt to reee" te sa"e at a reasona'le price an consieration# /rovie 0at te entire lanolingsol "ust 'e reee"e# /rovie furter 0at were tese are two or "ore agricultural lessees eac sall 'e entitle to sai rigt ofree"ption only to te e;tent of te area actually cultivate 'y i". 0e rigt of ree"ption uner tis Section "ay 'e e;ercise witintwo years fro" te registration of te sale an sall ave priority over any oter rigt of legal ree"ption.

!. /ractice notes# ter"ination of contract of salei. Grouns for ter"inationii. 2anner of ter"ination

XIII. Special problems in sales 7) ;ale by non-oner >7rts. 55$, 15!5, 1&%&)

#rt. ))9. 0e possession of "ova'le property ac;uired in good faith is e;uivalent to a title. Feverteless one wo as lost any"ova'le or as 'een unlafully deprived tereof may recover it from the person in possession of the same.9f te possessor of a "ova'le lost or wic te owner as 'een unla!fully deprivedA as ac7uire it in good faith at a pu'lic sale teowner cannot o'tain its return witout reimbursing te price pai terefor. (4:4a)

#rt. ()*). Su'ect to te provisions of tis 0itle were goods are sold by a person !ho is not the o!ner tereof an wo oes notsell them under authority or !ith the consent of te owner te buyer ac;uires no better title to the goods than the seller aEF!SS te owner of te goos is by his conduct preclue fro" enying te sellerQs autority to sell.2othing in tis 0itle owever sall affect: (1) 0e provisions of any factorsQ act recoring laws or any oter provision of law ena'ling te apparent owner of goos to ispose ofte" as if e were te true owner tereof(3) 0e valiity of any contract of sale uner statutory power of sale or uner te orer of a court of co"petent urisiction($) /urcases "ae in a "ercantQs store or in fairs or "ar?ets in accorance wit te Coe of Co""erce an special laws. (n)

#rt. (7<7. en a person wo is not te owner of a ting sells or alienates an elivers it an later te seller or grantor ac;uires titletereto such title passes by operation of la! to the buyer or grantee.

i. wen ownersip re7uirea) perfection') consu""ation

ii. rule on ac7uisition of ownersip 'y te 'uyer principle 'ein te rule (ne"o at 7uo non a'et)1$2$#/ 5/$: Fo one can transfer a 'etter title tan wat e as over te property sol &nly owner of goos or one autori@e 'y

owner to sell can transfer title tereto to te 'uyer (15+5)* !ven owner of a lost "ova'le or of wic e as 'een unlawfully eprive "ay recover it even fro" a purcaser in goo fait (55%)* A erivative rigt cannot e;ist iger tan its sourceB4=$V$: 9f e soul su'se7uently ac7uire ownersip tereof is conveyance is ee"e vali an is title passes 'y operation oflaw to is 'uyer (14$4)

• PI2CIP/$: !stoppel 'y ,ee

iii. e;ceptions to te rule(1) !S0&//! (=+ere oner , by +is conduct, precluded from denying )* 9f o!ner is precluded by his conduct fro" enying te sellerDs autority to sell te 'uyer "ay ac7uire a 'etter title altoug teseller a neiter te title nor te autority to sell te goos (15+5 31:)* ere true owner of property ols out anoter or allows anoter to appear as te owner or one wit full autority to ispose of teproperty an innocent tir parties are "isle into ealing wit suc apparent owner or agent suc $ r parties will 'e protecte. e;.en e ?nowingly per"its is property to sol at uicial sale as property of uge"ent e'tor witout asserting is title

(3) 6AC0&S AC0 !C&,9FG AS (=+ere la enables t+e apparent oner to dispose of t+e goods as if +e ere t+e true onert+ereof )* Fo law as 6actorDs Act. aw referre ere are foun in Civil Coe on Agency# &ne eals wit an agency at is own ris?* 0a?en fro" Enifor" Sales Act

a. 6actors Acts are esigne to protect tir persons wo eal wit an agent 'elieving i" to 'e owner of goos'. ecoring laws are laws relating to goos wic woul ena'le te registere owner to ispose of te" as if e were te true

owner. !;a"ples of recoring laws wic "ay ave a 'earing on te valiity of a sale "ae 'y a person wo is not te owneror agent of te owner# /, 153% (/roperty egistration ,ecree) A 41$: (an 0ransportation an 0raffic Coe) evise A"in. Coe as to sale of large cattle an vessels.

c. Any oter provision of law# Act 3+$1 (Fegotia'le 9nstru"ents aw) Act 31$ (areouse eceipts aw). 9e. stolen car 'ougt 'y a person ten i"poune. an 0ransportation Co""ission as not rigt to i"poun suc as only

tat for proper enforce"ent of lien upon "otor veicles of unpai fees for registration re*registration is proper e. 9e. eal property# A forge ocu"ent of sale "ay 'eco"e root of vali title if certificate of title as alreay 'een transferre

fro" na"e of true owner to forger f. !2!,L# ,a"ages

($) Iuicial /ower an Statutory Sale (A9,90L &6 SA! EF,! S0A0E0&L /&! & &6 C&E0 &,! 0& S! )* A9,# Sale of seriff pu'lic officer autori@e 'y law of goos uner e;ecution or foreclosure* H&!!# See 55% All te fruits sall pertain to te venee fro" te ay on wic te contract was perfected. (14:8a)

• 9t oes not follow tat if goos sol i not 'elong to te uge"ent e'tor or plegor or "ortgagor tat te innocent purcaserat suc sale ac7uire a 'etter title for e steps "erely into te soes of te uge"ent e'tor plegor or "ortagor. 0e ownercan recover fro" te purcaser 'y rei"'ursing i" te price pai terefor

• &rinary e;ecution sale

• Iuicial foreclosure sale

• !;trauicial foreclosure sale

48



• Govern"ent owever oes not warrant tile to properties sol 'y te seriff at pu'lic auction or uicial sales. (ug"ente'tor sall not 'e lia'le for a"ages)

(4) /ECHAS! A0 2!CHAF0DS S0&! 2A-!0 & 6A9* 9"perfect or voi title ripening into a vali one as a result of so"e intervening ue causes* Buyer cannot 'e reasona'ly e;pecte to loo? 'ein te title of every article wen e 'uys at a store* 0a?en 'y Coe Co""ission fro" Spanis Coe of Co""erce an ae to Enifor" Sales Act

(5) SA! BL &F! 90H &9,AB! 090! F&0 A&9,!, (15+:)

(:) S!! SEBS!ME!F0L ACME9!S 090!* Su'se7uent ac7uisition valiates previous conveyance* Seller ac7uires title upon elivery Fonpay"ent "ay not transfer title only if stipulate

iv. Su'se7uent ac7uisition of title (Art. 14$4)#rt. (7<7. en a person wo is not te owner of a ting sells or alienates an elivers it an later te seller or grantor ac;uires titletereto such title passes by operation of la! to the buyer or grantee.

iv. ule wit respect to i""ova'le propertyv. Status of contract

) ;ale by oner it+ voidable title non-oner >7rts. 55$, 15!')* rule on ac7uisition 'y ownersip 'y te 'uyer principle 'ein te rule

#rt. ()*. ere te seller of goos as a voia'le title tereto 'ut is title as not 'een avoie at te ti"e of te sale te 'uyerac7uires a goo title to te goos provie e 'uys te" in goo fait for value an witout notice of te sellerQs efect of title. (n)

#rt. ))9. 0e possession of "ova'le property ac;uired in good faith is e;uivalent to a title. Feverteless one wo as lost any"ova'le or as 'een unlafully deprived tereof may recover it from the person in possession of the same.9f te possessor of a "ova'le lost or wic te owner as 'een unla!fully deprivedA as ac7uire it in good faith at a pu'lic sale teowner cannot o'tain its return witout reimbursing te price pai terefor. (4:4a)

24T$S: So long as still wit first 'uyer wit voia'le title original seller can recover BE0 F&0 if sol to an innocent purcaser for value

$D5ISIT$S F4 ?5$ T4 #CD5I$ TIT/$

He 'uys te" 'efore te title of te seller as 'een avoie 9n goo fait for value itout notice of te sellerDs efect of title

$#S42:

ere loss as appene wic "ust fall on one of 3 innocent persons it soul 'e 'orne 'y i" wo is te occasion of te loss 0e avantage to trae an sta'ility of title ustifies te i"inution of te privilege of infants an lunatics

i. rule on ac7uisition 'y ownersip 'y te 'uyer principle 'ein te ruleii. Art. 55% in relation to Arts. 15+5 an 15+:

6) Double sales >7rt. 15&&)#rt. ()77. 9f te sa"e ting soul ave 'een sol to ifferent venees te ownersip sall 'e transferre to te person wo "ayave first ta?en possession tereof in goo fait if it soul 'e "ova'le property.

Soul it 'e i""ova'le property te ownersip sall 'elong to te person ac7uiring it wo in goo fait first recore it in teegistry of /roperty.

Soul tere 'e no inscription te ownersip sall pertain to te person wo in goo fait was first in te possession an inte a'sence tereof to te person wo presents te olest title provie tere is goo fait. (14$)

i. re7uisites for applica'ility of Article 1544ii. rules uner Article 1544

a) "ova'les* possession ow ac7uire (see Art. 55%)

#rt. ))9. 0e possession of "ova'le property ac;uired in good faith is e;uivalent to a title. Feverteless one wo as lostany "ova'le or as 'een unlafully deprived tereof may recover it from the person in possession of the same.9f te possessor of a "ova'le lost or wic te owner as 'een unla!fully deprivedA as ac7uire it in good faith at a pu'lic sale teowner cannot o'tain its return witout reimbursing te price pai terefor. (4:4a)

') i""ova'les* "eaning of registration* re7uire"ent of goo fait* "eaning of possession* "eaning of olest title

iii. applica'ility of Art. 1544 to unregistere lansiv. Article 1544 an e;ecution sales

XIV. Sale contract distinguished from other contracts 7. Dacion en pago >7rt. 1#&5)(#rt. (-7). ,ation in pay"ent were'y property is alienate to te creitor in satisfaction of a e't in "oney sall 'e governe 'y telaw of sales. (n)


. 6ontract to sellcontract of conditional salei. conceptii. istinguise fro" a contract of sale

4%



6. 7gency to buy and sell >7rt. 1&'')#rt. (7. 9n construing a contract containing provisions caracteristic of 'ot te contract of sale an of te contract of agency to sellte essential clauses of te wole instru"ent sall 'e consiere. (n)


D. 6ontract for a piece of or2 >7rt. 1&')#rt. (7+. A contract for te elivery at a certain price of an article wic te venor in te orinary course of is 'usiness"anufactures or procures for te general "ar?et weter te sa"e is on an at te ti"e or not is a contract of sale 'ut if te goosare to 'e "anufacture specially for te custo"er an upon is special orer an not for te general "ar?et it is a contract for a piece

of wor?. (n)i. conceptii. istinguise fro" a contract of sale

. arter and ec+ange >7rts. 1'%8-1'&1, 1&'8)#rt. (<8. By te contract of 'arter or e;cange one of te parties 'ins i"self to give one ting in consieration of te oterQspro"ise to give anoter ting. (15$8a)#rt. (<9. 9f one of te contracting parties aving receive te ting pro"ise i" in 'arter soul prove tat it i not 'elong to teperson wo gave it e cannot 'e co"pelle to eliver tat wic e offere in e;cange 'ut e sall 'e entitle to a"ages. (15$%a)#rt. (7*. &ne wo loses 'y eviction te ting receive in 'arter "ay recover tat wic e gave in e;cange wit a rigt to a"agesor e "ay only e"an an ine"nity for a"ages. However e can only "a?e use of te rigt to recover te ting wic e aselivere wile te sa"e re"ains in te possession of te oter party an witout preuice to te rigts ac7uire in goo fait in te"eanti"e 'y a tir person. (154+a)#rt. (7(. As to all "atters not specifically provie for in tis 0itle 'arter sall 'e governe 'y te provisions of te preceing 0itlerelating to sales. (1541a)#rt. (78. 9f te consieration of te contract consists partly in "oney an partly in anoter ting te transaction sall 'ecaracteri@e 'y te "anifest intention of te parties. 9f suc intention oes not clearly appear it sall 'e consiere a 'arter if tevalue of te ting given as a part of te consieration e;cees te a"ount of te "oney or its e7uivalent oterwise it is a sale. (144:a)

i. concept (Art. 1:$8)#rt. (<8. By te contract of 'arter or e;cange one of te parties 'ins i"self to give one ting in consieration of te oterQspro"ise to give anoter ting. (15$8a)

ii. wen perfecte an consu""ateiii. effect if giver not te lawful owner of ting elivere (Art. 1:$%)

#rt. (<9. 9f one of te contracting parties aving receive te ting pro"ise i" in 'arter soul prove tat it i not 'elong to teperson wo gave it e cannot 'e co"pelle to eliver tat wic e offere in e;cange 'ut e sall 'e entitle to a"ages. (15$%a)

iv. effect of eviction (Art. 1:4+)#rt. (7*. &ne wo loses 'y eviction te ting receive in 'arter "ay recover tat wic e gave in e;cange wit a rigt to a"agesor e "ay only e"an an ine"nity for a"ages. However e can only "a?e use of te rigt to recover te ting wic e as

elivere wile te sa"e re"ains in te possession of te oter party an witout preuice to te rigts ac7uire in goo fait in te"eanti"e 'y a tir person. (154+a)v. test for eter"ining weter transaction is sale or 'arter (Art. 14:8)

#rt. (78. 9f te consieration of te contract consists partly in "oney an partly in anoter ting te transaction sall 'ecaracteri@e 'y te "anifest intention of te parties. 9f suc intention oes not clearly appear it sall 'e consiere a 'arter if tevalue of te ting given as a part of te consieration e;cees te a"ount of te "oney or its e7uivalent oterwise it is a sale. (144:a)

B. uitable mortgage >7rts. 1'!#-1'!5)#rt. (*-. 0e contract sall 'e presu"e to 'e an e7uita'le "ortgage in any of te following cases#(1) en te price of a sale wit rigt to repurcase is unusually inae7uate(3) en te venor re"ains in possession as lessee or oterwise($) en upon or after te e;piration of te rigt to repurcase anoter instru"ent e;tening te perio of ree"ption or granting anew perio is e;ecute(4) en te purcaser retains for i"self a part of te purcase price(5) en te venor 'ins i"self to pay te ta;es on te ting sol

(:) 9n any oter case were it "ay 'e fairly inferre tat te real intention of te parties is tat te transaction sall secure te pay"entof a e't or te perfor"ance of any oter o'ligation.9n any of te foregoing cases any "oney fruits or oter 'enefit to 'e receive 'y te venee as rent or oterwise sall 'e consiereas interest wic sall 'e su'ect to te usury laws. (n)#rt. (*<. 9n case of ou't a contract purporting to 'e a sale wit rigt to repurcase sall 'e construe as an e7uita'le "ortgage. (n)#rt. (*7. 0e provisions of Article 1:+3 sall also apply to a contract purporting to 'e an a'solute sale. (n)#rt. (*). 9n te cases referre to in Articles 1:+3 an 1:+4 te apparent venor "ay as? for te refor"ation of te instru"ent. (n)

i. conceptii. pacto e retro vs. "ortgage istinguiseiii. re7uisites for presu"ption tat te transaction is an e7uita'le "ortgage (Arts. 1:+3 1:+4)

#rt. (*-. 0e contract sall 'e presu"e to 'e an e7uita'le "ortgage in any of te following cases#(1) en te price of a sale wit rigt to repurcase is unusually inae7uate(3) en te venor re"ains in possession as lessee or oterwise($) en upon or after te e;piration of te rigt to repurcase anoter instru"ent e;tening te perio of ree"ption or granting a

new perio is e;ecute(4) en te purcaser retains for i"self a part of te purcase price(5) en te venor 'ins i"self to pay te ta;es on te ting sol(:) 9n any oter case were it "ay 'e fairly inferre tat te real intention of te parties is tat te transaction sall secure te pay"entof a e't or te perfor"ance of any oter o'ligation.9n any of te foregoing cases any "oney fruits or oter 'enefit to 'e receive 'y te venee as rent or oterwise sall 'e consiereas interest wic sall 'e su'ect to te usury laws. (n)#rt. (*7. 0e provisions of Article 1:+3 sall also apply to a contract purporting to 'e an a'solute sale. (n)

iv. 'ages of e7uita'le "ortgage (Art. 1:+$)#rt. (*<. 9n case of ou't a contract purporting to 'e a sale wit rigt to repurcase sall 'e construe as an e7uita'le "ortgage. (n)

v. effect if contract is an e7uita'le "ortgage

5+



vi. re"ey of refor"ation (Art. 1:+5)#rt. (*). 9n te cases referre to in Articles 1:+3 an 1:+4 te apparent venor "ay as? for te refor"ation of te instru"ent. (n)

C. Donation >7rts. #5, 1&1)#rt. +-). ,onation is an act of li'erality were'y a person isposes gratuitously of a ting or rigt in favor of anoter wo accepts it.(:18a)#rt. (7+(. 9f te price is si"ulate te sale is voi 'ut te act "ay 'e sown to ave 'een in reality a onation or so"e oter act orcontract. (n)


. Lease >7rt. 1'&%)#rt. (7<. 9n te lease of tings one of te parties 'ins i"self to give to anoter te enoy"ent or use of a ting for a price certainan for a perio wic "ay 'e efinite or inefinite. However no lease for "ore tan ninety*nine years sall 'e vali. (154$a)


G. 7ssignment of credits and incorporeal rig+ts >7rts. 1'#&-1'%)#rt. (-7. An assign"ent of creitors an oter incorporeal rigts sall 'e perfecte in accorance wit te provisions of Article 145.(n)#rt. (-). An assign"ent of a creit rigt or action sall prouce no effect as against tir person unless it appears in a pu'licinstru"ent or te instru"ent is recore in te egistry of /roperty in case te assign"ent involves real property. (153:)#rt. (-. 0e e'tor wo 'efore aving ?nowlege of te assign"ent pays is creitor sall 'e release fro" te o'ligation. (153)#rt. (-+. 0e assign"ent of a creit inclues all te accessory rigts suc as a guaranty "ortgage plege or preference. (1538)#rt. (-8. 0e venor in goo fait sall 'e responsi'le for te e;istence an legality of te creit at te ti"e of te sale unless itsoul ave 'een sol as ou'tful 'ut not for te solvency of te e'tor unless it as 'een so e;pressly stipulate or unless teinsolvency was prior to te sale an of co""on ?nowlege.!ven in tese cases e sall only 'e lia'le for te price receive an for te e;penses specifie in Fo. 1 of Article 1:1:.0e venor in 'a fait sall always 'e answera'le for te pay"ent of all e;penses an for a"ages. (153%)#rt. (-9. 9n case te assignor in goo fait soul ave "ae i"self responsi'le for te solvency of te e'tor an te contractingparties soul not ave agree upon te uration of te lia'ility it sall last for one year only fro" te ti"e of te assign"ent if teperio a alreay e;pire.9f te creit soul 'e paya'le witin a ter" or perio wic as not yet e;pire te lia'ility sall cease one year after te "aturity.(15$+a)#rt. (<*. &ne wo sells an ineritance witout enu"erating te tings of wic it is co"pose sall only 'e answera'le for iscaracter as an eir. (15$1)#rt. (<(. &ne wo sells for a lu"p su" te wole of certain rigts rents or proucts sall co"ply 'y answering for te legiti"acy ofte wole in general 'ut e sall not 'e o'lige to warrant eac of te various parts of wic it "ay 'e co"pose e;cept in te case

of eviction fro" te wole or te part of greater value. (15$3a)#rt. (<-. Soul te venor ave profite 'y so"e of te fruits or receive anyting fro" te ineritance sol e sall pay te veneetereof if te contrary as not 'een stipulate. (15$$)#rt. (<<. 0e venee sall on is part rei"'urse te venor for all tat te latter "ay ave pai for te e'ts of an carges on teestate an satisfy te creits e "ay ave against te sa"e unless tere is an agree"ent to te contrary. (15$4)#rt. (<7. en a creit or oter incorporeal rigt in litigation is sol te e'tor sall ave a rigt to e;tinguis it 'y rei"'ursing teassignee for te price te latter pai terefor te uicial costs incurre 'y i" an te interest on te price fro" te ay on wic tesa"e was pai. A creit or oter incorporeal rigt sall 'e consiere in litigation fro" te ti"e te co"plaint concerning te sa"e is answere.0e e'tor "ay e;ercise is rigt witin tirty ays fro" te ate te assignee e"ans pay"ent fro" i". (15$5)#rt. (<). 6ro" te provisions of te preceing article sall 'e e;cepte te assign"ents or sales "ae#(1) 0o a co*eir or co*owner of te rigt assigne(3) 0o a creitor in pay"ent of is creit($) 0o te possessor of a tene"ent or piece of lan wic is su'ect to te rigt in litigation assigne. (15$:)#rt. (<. 9n te preceing articles in tis 0itle governing te sale of goos unless te conte;t or su'ect "atter oterwise re7uires#

(1) R,ocu"ent of title to goosR inclues any 'ill of laing oc? warrant R7ueanR or wareouse receipt or orer for te elivery ofgoos or any oter ocu"ent use in te orinary course of 'usiness in te sale or transfer of goos as proof of te possession orcontrol of te goos or autori@ing or purporting to autori@e te possessor of te ocu"ent to transfer or receive eiter 'yenorse"ent or 'y elivery goos represente 'y suc ocu"ent.RGoosR inclues all cattels personal 'ut not tings in action or "oney of legal tener in te /ilippines. 0e ter" inclues growingfruits or crops.R&rerR relating to ocu"ents of title "eans an orer 'y enorse"ent on te ocu"ents.RMuality of goosR inclues teir state or conition.RSpecific goosR "eans goos ientifie an agree upon at te ti"e a contract of sale is "ae. An anteceent or pre*e;isting clai" weter for "oney or not constitutes RvalueR were goos or ocu"ents of title are ta?en eiter insatisfaction tereof or as security terefor.(3) A person is insolvent witin te "eaning of tis 0itle wo eiter as cease to pay is e'ts in te orinary course of 'usiness orcannot pay is e'ts as tey 'eco"e ue weter insolvency proceeings ave 'een co""ence or not.($) Goos are in a Relivera'le stateR witin te "eaning of tis 0itle wen tey are in suc a state tat te 'uyer woul uner tecontract 'e 'oun to ta?e elivery of te". (n)

#rt. (<+. 0e provisions of tis 0itle are su'ect to te rules lai own 'y te 2ortgage aw an te an egistration aw witregar to i""ova'le property. (15$a)

i. conceptii. perfection (Art. 1:34)

#rt. (-7. An assign"ent of creitors an oter incorporeal rigts sall 'e perfecte in accorance wit te provisions of Article 145.(n)

iii. 'ining effect (Art. 1:3:)#rt. (-. 0e e'tor wo 'efore aving ?nowlege of te assign"ent pays is creitor sall 'e release fro" te o'ligation. (153)

iii. nee for e'torDs consent effect of pay"ent 'y e'tor 'efore an after notice (Art. 1:3:)#rt. (-. 0e e'tor wo 'efore aving ?nowlege of te assign"ent pays is creitor sall 'e release fro" te o'ligation. (153)

iv. effect of assign"ent of creit on accessory rigts (Art. 1:3) fruits an e;penses (Arts. 1:$3 1:$$)

51



#rt. (<-. Soul te venor ave profite 'y so"e of te fruits or receive anyting fro" te ineritance sol e sall pay te veneetereof if te contrary as not 'een stipulate. (15$$)#rt. (<<. 0e venee sall on is part rei"'urse te venor for all tat te latter "ay ave pai for te e'ts of an carges on teestate an satisfy te creits e "ay ave against te sa"e unless tere is an agree"ent to te contrary. (15$4)

v. warranties of te assignor of te creita) in general (art. 1:38)

#rt. (-8. 0e venor in goo fait sall 'e responsi'le for te e;istence an legality of te creit at te ti"e of te sale unless itsoul ave 'een sol as ou'tful 'ut not for te solvency of te e'tor unless it as 'een so e;pressly stipulate or unless teinsolvency was prior to te sale an of co""on ?nowlege.!ven in tese cases e sall only 'e lia'le for te price receive an for te e;penses specifie in Fo. 1 of Article 1:1:.

0e venor in 'a fait sall always 'e answera'le for te pay"ent of all e;penses an for a"ages. (153%)

') were e'torDs insolvency guarantee (Art. 1:3%)#rt. (-9. 9n case te assignor in goo fait soul ave "ae i"self responsi'le for te solvency of te e'tor an te contractingparties soul not ave agree upon te uration of te lia'ility it sall last for one year only fro" te ti"e of te assign"ent if teperio a alreay e;pire.9f te creit soul 'e paya'le witin a ter" or perio wic as not yet e;pire te lia'ility sall cease one year after te "aturity.(15$+a)

c) sale of ereitary rigt (Art. 1:$+)#rt. (<*. &ne wo sells an ineritance witout enu"erating te tings of wic it is co"pose sall only 'e answera'le for iscaracter as an eir. (15$1)

) sale of wole of certain rigts rents or proucts (Art. 1:$1)#rt. (<(. &ne wo sells for a lu"p su" te wole of certain rigts rents or proucts sall co"ply 'y answering for te legiti"acy ofte wole in general 'ut e sall not 'e o'lige to warrant eac of te various parts of wic it "ay 'e co"pose e;cept in te caseof eviction fro" te wole or te part of greater value. (15$3a)

vi. legal ree"ption in te sale of creit in litigation (Arts. 1:$4 1:$5)#rt. (<7. en a creit or oter incorporeal rigt in litigation is sol te e'tor sall ave a rigt to e;tinguis it 'y rei"'ursing teassignee for te price te latter pai terefor te uicial costs incurre 'y i" an te interest on te price fro" te ay on wic tesa"e was pai. A creit or oter incorporeal rigt sall 'e consiere in litigation fro" te ti"e te co"plaint concerning te sa"e is answere.0e e'tor "ay e;ercise is rigt witin tirty ays fro" te ate te assignee e"ans pay"ent fro" i". (15$5)#rt. (<). 6ro" te provisions of te preceing article sall 'e e;cepte te assign"ents or sales "ae#(1) 0o a co*eir or co*owner of te rigt assigne(3) 0o a creitor in pay"ent of is creit($) 0o te possessor of a tene"ent or piece of lan wic is su'ect to te rigt in litigation assigne. (15$:)

XV. &ocuments of title '#rt. ()*+,()-*

A. Concept (Art. 15+)#rt. ()*+. A ocu"ent of title in wic it is state tat te goos referre to terein will 'e elivere to te 'earer or to te orer of anyperson na"e in suc ocu"ent is a negotia'le ocu"ent of title. (n)B. 6unction of ocu"ents of titleC. !;a"ples of ocu"ents of title,. Classes of ocu"ents of title!. Fegotia'le ocu"ents of title

i. wo negotiates (Art. 1513)#rt. ()(-. A negotia'le ocu"ent of title "ay 'e negotiate#(1) By te owner terefor or(3) By any person to wo" te possession or custoy of te ocu"ent as 'een entruste 'y te owner if 'y te ter"s of teocu"ent te 'ailee issuing te ocu"ent unerta?es to eliver te goos to te orer of te person to wo" te possession orcustoy of te ocu"ent as 'een entruste or if at te ti"e of suc entrusting te ocu"ent is in suc for" tat it "ay 'e negotiate'y elivery. (n)

ii. ow negotiate

a) 'y elivery (Art. 15+8)#rt. ()*8. A negotia'le ocu"ent of title "ay 'e negotiate 'y elivery#(1) ere 'y te ter"s of te ocu"ent te carrier wareouse"an or oter 'ailee issuing te sa"e unerta?es to eliver te goos tote 'earer or(3) ere 'y te ter"s of te ocu"ent te carrier wareouse"an or oter 'ailee issuing te sa"e unerta?es to eliver te goos tote orer of a specifie person an suc person or a su'se7uent enorsee of te ocu"ent as inorse it in 'lan? or to te 'earer.ere 'y te ter"s of a negotia'le ocu"ent of title te goos are elivera'le to 'earer or were a negotia'le ocu"ent of title as'een inorse in 'lan? or to 'earer any oler "ay inorse te sa"e to i"self or to any specifie person an in suc case teocu"ent sall tereafter 'e negotiate only 'y te enorse"ent of suc enorsee. (n)

') 'y inorse"ent an elivery (Art. 15+%)#rt. ()*9. A negotia'le ocu"ent of title "ay 'e negotiate 'y te enorse"ent of te person to wose orer te goos are 'y teter"s of te ocu"ent elivera'le. Suc enorse"ent "ay 'e in 'lan? to 'earer or to a specifie person. 9f inorse to a specifieperson it "ay 'e again negotiate 'y te enorse"ent of suc person in 'lan? to 'earer or to anoter specifie person. Su'se7uentnegotiations "ay 'e "ae in li?e "anner. (n)

iii. effect of negotia'le ocu"ents of title "ar?e non*negotia'le (Art. 151+)

#rt. ()(*. 9f a ocu"ent of title wic contains an unerta?ing 'y a carrier wareouse"an or oter 'ailee to eliver te goos to'earer to a specifie person or orer of a specifie person or wic contains wors of li?e i"port as place upon it te wors Rnotnegotia'leR Rnon*negotia'leR or te li?e suc ocu"ent "ay neverteless 'e negotiate 'y te oler an is a negotia'le ocu"ent oftitle witin te "eaning of tis 0itle. But noting in tis 0itle containe sall 'e construe as li"iting or efining te effect upon teo'ligations of te carrier wareouse"an or oter 'ailee issuing a ocu"ent of title or placing tereon te wors Rnot negotia'leRRnon*negotia'leR or te li?e. (n)

iv. effect of negotiation (Art. 151$)#rt. ()(<. A person to wo" a negotia'le ocu"ent of title as 'een uly negotiate ac7uires tere'y#(1) Suc title to te goos as te person negotiating te ocu"ent to i" a or a a'ility to convey to a purcaser in goo fait forvalue an also suc title to te goos as te person to wose orer te goos were to 'e elivere 'y te ter"s of te ocu"ent aor a a'ility to convey to a purcaser in goo fait for value an

53



ere te transaction or contract was entere into prior to te effectivity of epu'lic Act Fo. :553 on August 3: 1%3 te efaulting'uyer sall 'e entitle to te corresponing refun 'ase on te install"ents pai after te effectivity of te law in te a'sence of anyprovision in te contract to te contrary.

. ul2 ;ales La >7ct 3o. %$5#) AF AC0 0& !GEA0! 0H! SA! 0AFS6! 2&0GAG! & ASS9GF2!F0 &6 G&&,S A!S 2!CHAF,9S!/&9S9&FS & 2A0!9AS 9F BE- AF, /!SC9B9FG /!FA09!S 6& 0H! 9&A09&F &6 0H! /&9S9&FS 0H!!&6 Approve# +1 ,ece"'er 1%3Section (. 0is Act sall 'e ?nown as R0e Bul? Sales aw.RSec. -. Sale an transfer in 'ul?. Y Any sale transfer "ortgage or assign"ent of a stoc? of goos wares "ercanise provisions or"aterials oterwise tan in te orinary course of trae an te regular prosecution of te 'usiness of te venor "ortgagor

transferor or assignor or sale transfer "ortgage or assign"ent of all or su'stantially all of te 'usiness or trae teretoforeconucte 'y te venor "ortgagor transferor or assignor or of all or su'stantially all of te fi;tures an e7uip"ent use in ana'out te 'usiness of te venor "ortgagor transferor or assignor sall 'e ee"e to 'e a sale an transfer in 'ul? in conte"plationof tis Act# /rovie owever 0at if suc venor "ortgagor transferor or assignor prouces an elivers a written waiver of teprovisions of tis Act fro" is creitors as sown 'y verifie state"ents ten an in tat case te provisions of tis section sall notapply.Sec. <. State"ent of creitors. Y 9t sall 'e te uty of every person wo sall sell "ortgage transfer or assign any stoc? of gooswares "ercanise provisions or "aterials in 'ul? for cas or on creit 'efore receiving fro" te venee "ortgagee or is or itsagent or representative any part of te purcase price tereof or any pro"issory note "e"oranu" or oter evience terefor toeliver to suc venee "ortgagee or agent or if te venee "ortgagee or agent 'e a corporation ten to te presient vice*presient treasurer secretary or "anager of sai corporation or if suc venee or "ortgagee 'e a partnersip fir" ten to a "e"'ertereof a written state"ent sworn to su'stantially as ereinafter provie of te na"es an aresses of all creitors to wo" saivenor or "ortgagor "ay 'e ine'te togeter wit te a"ount of ine'teness ue or owing or to 'eco"e ue or owing 'y saivenor or "ortgagor to eac of sai creitors wic state"ent sall 'e verifie 'y an oat to te following effect#

/H99//9F! 9SAF,S/&9FC! & C90L &6 PPPPPPPPPPPPPPPPPZBefore "e te unersigne autority personally appeare PPPPPPPPPPPPPPPPPP (venor "ortgagor agent orrepresentative as te case "ay 'e) 'earing ceula Fo. PPPPPPPPPPPP issue at PPPPPPPPPPP on te ay of PPPPPPPPPPPPP wo 'y "e 'eing first uly sworn upon is oat eposes an states tat te foregoing state"ent containste na"es of all of te creitors of PPPPPPPPPPPPPPPP (venor or "ortgagor) togeter wit teir aresses an tat tea"ount set opposite eac of sai respective na"es is te a"ount now ue an owing an wic sall 'eco"e ue anowing 'y PPPPPPPPPPPPP (venor or "ortgagor) to suc creitors an tat tere are no creitors oling clai"s ue or wicsall 'eco"e ue for or on account of goos wares "ercanise provisions or "aterials purcase upon creit or onaccount of "oney 'orrowe to carry on te 'usiness of wic sai goos wares "ercanise provisions or "aterials are apart oter tan as set fort in sai state"ent.Su'scri'e an sworn to 'efore "e tis PPPPPPP ay of PPPPPP 1%PPP at PPPPPPPP

Sec. 7. 6rauulent an voi sale transfer or "ortgage. Y enever any person sall sell "ortgage transfer or assign any stoc? ofgoos wares "ercanise provisions or "aterials in 'ul? for cas or on creit an sall receive any part of te purcase price orany pro"issory note or oter evience of ine'teness for sai purcase price or avance upon "ortgage witout aving first

elivere to te venee or "ortgagee or to is or its agent or representative te sworn state"ent provie for in section tree ereofan witout applying te purcase or "ortgage "oney of te sai property to te pro rata pay"ent of te 'ona fie clai" or clai"s ofte creitors of te venor or "ortgagor as sown upon suc sworn state"ent e sall 'e ee"e to ave violate tis Act an anysuc sale transfer or "ortgage sall 'e frauulent an voi.Sec. ). 9nventory. Y 9t sall 'e te uty of every venor transferor "ortgagor or assignor at least ten ays 'efore te sale transfer ore;ecution of a "ortgage upon any stoc? of goos wares "ercanise provisions or "aterials in 'ul? to "a?e a full etaile inventorytereof an to preserve te sa"e sowing te 7uantity an so far as is possi'le wit te e;ercise of reasona'le iligence te costprice to te venor transferor "ortgagor or assignor of eac article to 'e inclue in te sale transfer or "ortgage an notify everycreitor wose na"e an aress is set fort in te verifie state"ent of te venor transferor "ortgagor or assignor at least tenays 'efore transferring possession tereof personally or 'y registere "ail of te price ter"s conitions of te sale transfer"ortgage or assign"ent.Sec. . Any venor transferor "ortgagor or assignor of any stoc? of goos wares "ercanise provisions or "aterials in 'ul? orany person acting for or on 'ealf of any suc venor transferor "ortgagor or assignor wo sall ?nowingly or willfully "a?e oreliver or cause to 'e "ae or elivere a state"ent as provie for in section tree ereof wic sall not inclue te na"es of allsuc creitors wit te correct a"ount ue an to 'eco"e ue to eac of te" or sall contain any false or untrue state"ent sall 'e

ee"e to ave violate te provisions of tis Act.Sec. +. 9t sall 'e unlawful for any person fir" or corporation as owner of any stoc? of goos wares "ercanise provisions or"aterials in 'ul? to transfer title to te sa"e witout consieration or for a no"inal consieration only.Sec. 8. Foting in tis Act containe sall apply to e;ecutors a"inistrators receivers assignees in insolvency or pu'lic officersacting uner uicial process.Sec. 9. 0e sworn state"ent containing te na"es an aresses of all creitors of te venor or "ortgagor provie for in sectiontree of tis Act sall 'e registere in te Bureau of Co""erce. 6or te registration of eac suc sworn state"ent a fee of five pesossall 'e carge to te venor or "ortgagor of te stoc? of goos wares "ercanise provisions or "aterials in 'ul?.Sec. (*. 0e provisions of tis Act sall 'e a"inistere 'y te ,irector of te Bureau of Co""erce an 9nustry wo is ere'ye"powere wit te approval of te ,epart"ent Hea to prescri'e an aopt fro" ti"e to ti"e suc rules an regulations as "ay 'eee"e necessary for te proper an efficient enforce"ent of te provisions of tis Act.Sec. ((. Any person violating any provision of tis Act sall upon conviction tereof 'e punise 'y i"prison"ent not less tan si;"onts nor "ore tan five years or fine in su" not e;ceeing five tousan pesos or 'ot suc i"prison"ent an fine in teiscretion of te court.Sec. (-. 0is Act sall ta?e effect on its approval.

6. Retail *rade Liberali@ation 7ct >Republic 7ct 3o. 8'#), sec. % and 5 AF AC0 9B!A9T9FG 0H! !0A9 0A,! BES9F!SS !/!A9FG 6& 0H! /E/&S! !A9FG 6& 0H! /E/&S!!/EB9C AC0 F&. 118+ AS A2!F,!, AF, 6& &0H! /E/&S!S

Section <. ,efinition. * As use in tis Act.(1) Retail traeR sall "ean any act occupation or calling of a'itually selling irect to te general pu'lic "ercanise co""oities orgoo for consu"ption 'ut te restriction of tis law sall not apply to te following#(a) Sales 'y "anufacturer processor la'orer or wor?er to te general pu'lic te proucts "anufacture processe or proucts 'yi" if is capital ose not e;cee &ne unre tousan pesos(1+++++.++)(') Sales 'y a far"er or agriculturist selling te proucts of is far"

54



(c) Sales in restaurant operations 'y a otel owner or inn*?eeper irrespective of te a"ount capital# provie tat te restaurant isinciental to te otel 'usiness an() Sales wic are li"ite only to proucts "anufacture processe or asse"'le 'y a "anufacture processe or asse"'le 'y a"anufacturer toug a single outlet irrespective of capitali@ation.(3) RHig*en or lu;ury goosR sall refer to goos wic are not necessary for life "aintenance an wose e"an is generate inlarge part 'y te iger inco"e groups. u;ury goos sall inclue 'ut are not li"ite to proucts suc as ewelry 'rane oresigner cloting an footwear wearing apparel leisure an sporting goos electronics an oter personal effects.

Section ). 6oreign !7uity /articipation. * 6oreign*owne partnersips associations an corporation for"e an organi@e uner telaws of te /ilippines "ay upon registration wit te Securities an !;cange Co""ission (S!C) an te ,epart"ent of 0rae an9nustry (,09) or in case of foreign owne single proprietorsips wit te ,09 !ngage or invest in te retail trae 'usiness su'ect to

te following categories.Category A > !nterprises wit pai*up capital of te e7uivalent in /ilippine /eso of te tan 0wo "illion five unre

tousan ES ollars (ES[35+++++.++) sall 'e reserve e;clusively for 6ilipino citi@ens an corporations wolly owne 'y 6ilipinociti@ens.

Category B > !nterprises wit a "ini"u" pai*up capital of te e7uivalent in /ilippine /esos of two "illion five unretousan ES ollar (ES[35+++++.++) 'ut less tan Seven "illion five unre tousan ES ollars (ES[5+++++.++) "ay 'e wollyowne 'y foreigners e;cept for te first two (3) years after te effectivity of tis Act werein foreign participation sall 'e li"ite to not"ore tan si;ty percent (:+\) of total e7uity.

Category C > !nterprises wit a pai*up capital of te e7uivalent in /ilippine /esos of Seven "illion five unre tousanES ollars (ES[5+++++.++) or "ore "ay 'e wolly owne 'y foreigners# /rovie owever 0at in no case sall te invest"entsfor esta'lising a store in vest"ents for esta'lising a store in Categories B an C 'e less tan te e7uivalent in /ilippine pesos of!igt unre tirty tousan ES ollars (ES[8$++++.++).

Category , > !nterprises speciali@ing in ig*en or lu;ury proucts wit a pai*up capital of te e7uivalent in /ilippine/esos of 0wo unre fifty tousan ES ollars (ES[35++++.++) per store "ay 'e wolly owne 'y foreigners.

0e foreign investor sall 'e re7uire to "aintain in te /ilippines te full a"ount of te prescri'e "ini"u" capital unlesste foreign investor as notifie te S!C an te ,09 of its intention to repatriate its capital an cease operations in te /ilippines. 0eactual use in /ilippine operations of te inwarly re"itte "ini"u" capital re7uire"ent sall 'e "onitore 'y te S!C.

6ailure to "aintain te full a"ount of te prescri'e "ini"u" capital prior to notification of te S!C an te ,09 sall su'ectte foreign investor to penalties or restrictions on any future traing activities'usiness in te /ilippines.

6oreign retail stores sall secure a certification fro" te Bang?o Sentral ng /ilipinas (BS/) an te ,09 wic will verify orconfir" inwar re"ittance of te "ini"u" re7uire capital invest"ents.

XVII. Practice notes: overvie! of the typical sale transaction0contract A. at appens in a typical sale transaction

i. ,ue iligence

ii. Fegotiation an rafting of contract

iii. !;ecution of contract

iv. Co"pliance wit (or waivers of) conitions preceent

v. Closing

vi. /erfor"ance of post*closing covenants

B. &verview# ow a typical sale an purcase agree"ent loo?s li?ei. /arties

ii. ecitals

iii. &perative provisions on sale

iv. Conitions for closing

v. Covenants

vi. epresentations an warranties

vii. 0er"ination

viii. 2iscellaneous provisions

i;. Signature page

;. Fotari@ation

sales de leon compiled inc

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