sales doctrines (sienna flores).doc

8/14/2019 Sales Doctrines (SIENNA FLORES).doc

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FABILLO VS. IAC Art. < prohibits lawyers from purchasing their clients% properties w/c are

the ob6ects of litigation in w/c they may tae part by virtue of their profession.owever, this prohibition only applies during the pendency of the case.

A contract stipulating a contingent fee is not covered by the prohibition under

Art. =< )0 because the payment of said fee is not made during thependency of the litigation but only after 6udgment has been rendered in thecase handled by the lawyer.

As long as the lawyer does not e$ert undue influence on his client, that no

fraud is committed, or that compensation is not e$cessive, a contract forcontingency fee is valid & enforceable.

A lawyer may have a lien over funds & property of his client & may apply so

much thereof as may be necessary to satisfy his lawful fees & disbursements.

RUBIAS VS. BATILLER ?nly contracts between guardians, agents, administrators & e$ecutors can be

ratified by means of a new contract. In this case, what transpires is a privatewrong between the parties, and therefore the private parties may condonesuch wrong through e$ecuting a new contract. owever, the new contract,doesn%t retroact to the date of the


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JOHANNES SCHUBACK & SONS PHIL. TRADING CORP. VS. CA The opening of a letter of credit in favor of a vendor is only a mode of

payment. It is not among the essential re3uisites of a sale & therefore doesn%tprevent the perfection of a contract between the parties.

The offer by Bohannes was manifested when it submitted its proposal

containing the item number, 3uantity, part number, description, the unit price& total to 4an Bose. 4an Bose informed Bohannes of his desire to avail of theprices of the parts at the same time & simultaneously enclosed its Purchase?rder D w/c signified his acceptance.

8uantity is immaterial in the perfection of a sales contract. :hat is important

is the meeting of the minds as to the ob6ect & cause of the sale.Dy: Quality takes precedence over quantity. But quantity is still essential.

NOOL VS. CA :here the sellers can no longer deliver the ob6ect of the sale to the buyers, as

the buyers themselves have already ac3uired title and delivery thereof fromthe rightful owner, such contract may be deemed to be inoperative & maythus be considered 'those w/c contemplate an impossible service. The vendormust have a right to transfer ownership of the ob6ect of sale at the time it isdelivered. ere, delivery of ownership is no longer possible. It has becomeimpossible.

?ne 'repurchases only what one has previously sold. The right to repurchase

presupposes a valid contract of sale between the same parties. A contract of repurchase arising out of a contract of sale where the seller

didn%t have any title to the property 'sold is not valid. 4ince there wasnothing sold, there%s nothing to repurchase.

CHAPTER ": PRICE AND OTHER CONSIDERATION

MAPALO VS. MAPALO nder the ?ld & New #ivil #ode, contracts w/o a cause or consideration

produce no effect whatsoever. A contract of purchase & sale is void & produces no effect whatsoever where

the same is w/o cause or consideration in that the purchase price, w/c appearsthereon as paid, has in fact never been paid by the purchaser to the vendor.

nder the ?ld #ivil #ode, the statement of a false consideration renders the

contract voidable, unless it is proven that it is supported by another real & licitconsideration. A contract that states a false consideration is one that has in fact a real

consideration but the same is not the one stated in the document. The action for annulment of a contract on the ground of falsity of

consideration shall last = years, the term to run from the date of theconsummation of the contract.

MATE VS. CA The sale was valid. There was a consideration in the form of a chec for

P=@*. This was his fee for having e$ecuted the pacto de retro document. Itwas not only his indness that impelled him to cede his properties, it was alsohis interest for profit.

The filing of a criminal case for violation of "P@@0 was a tacit admission by

petitioner that there was a consideration of the pacto de retro sale

ONG VS. ONG The conveyance of property for P


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To convert an offer into a contract, the acceptance must be absolute and must

not 3ualify the terms of the offer D it must be plain, une3uivocal, unconditional& w/o variance of any sort from the proposal.

A counter2offer is considered a re6ection of the original offer & an attempt to

end the negotiation between the parties on a different basis. #ontracts or acts of a corporation must be made ether by the board of

directors or by a corporate agent duly authori-ed by the board D absent suchvalid delegation/authori-ation, the rule is that the declarations of an individualdirector relating to the affairs of the corporation, but not in the course of, orconnected w/ the performance of authori-ed duties of such director, are heldnot binding on the corporation.

Absent proof of concurrence of all the essential elements of a contract of sale,

the giving of earnest money cannot establish the e$istence of a perfectedcontract of sale.

CARCELLER VS. CA An option is a separate agreement distinct from the contract w/c the parties

may enter into upon the consummation of the option. The delay of


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Perfected option contract 2 an accepted unilateral promise w/c specifies the

thing to be sold and the price to be paid, when coupled w/ valuableconsideration distinct and separate from the price.

The option is not the contract of sale itself. The optionee has the right, but not

the obligation to buy. once the option is e$ercised timely, a bilateral promiseto sell & buy ensues and both parties are then reciprocally bound to comply w/their respective undertaings.

If a period is given to the offeree w/in w/c to accept the offer, and the period

is not itself founded upon or supported by a consideration, the offeror is stillfree & has the right to withdraw the offer before its acceptance, or, if anacceptance has been made, before the offeror%s coming to now of such fact,by communicating that withdrawal to the offeree.

owever, the right to withdraw must not be e$ercised whimsically or

arbitrarily. The remedy in case the withdrawal was made capriciously &arbitrarily would be to sue on the basis of abuse of right.

If the period has a separate consideration, a contract of 'option is deemed

perfected, & it would be a breach of contract to withdraw the offer during theagreed period. owever the option is an independent contract by itself. If theofferor withdraws the offer before its acceptance by the offeree, the latter maynot sue for specific performance on the proposed contract. "ut the offerorrenders himself liable for damages for breach of the option.

EQUATORIAL REALTY DEV. INC. VS MAYFAIR THEATER INC. The deed of option or the option clause in a contract in order to be valid and

enforceable must indicate the definite price at w/c the person granting theoption is willing to sell.

The option is not the contract of sale itself.

An option is a contract granting a privilege to buy or sell w/in an agreed time

& a determined price. The clause in the lease agreement was not an option contractG it was a right of


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DALION VS. CA The provision of Art.


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CHAPTER $: CONSUMMATION

SANTOS V. SANTOS It is true that neither ta$ receipts nor declarations of ownership for ta$ation

purposes constitute sufficient proof of ownership. They must be supported byother effective proofs.

The circumstances that, despite the alleged sale, the vendors D the parents of

the vendee D still continued to possess & administer the property and en6oy itsfruits by leasing it to 9 rdpersons, the vendee did not e$ercise any right ofownership over it, after the vendee registered the property in his name, hesurrendered the title to his mother, are clear indications that ownership stillremained w/ the original owners.

The vendor%s continued possession of the property maes dubious the contract

of sale between the parties. Nowhere in the ## does it provide that e$ecution of a deed of sale is a

conclusive presumption of delivery of possession. 5or the e$ecution of a public instrument to effect tradition, the purchaser must

be placed in control of the thing sold. :hen there is no impediment to preventthe thing sold from converting to tenancy of the purchaser by the sole will ofthe vendor, symbolic delivery through the e$ecution of a public instrument issufficient.

If, notwithstanding the e$ecution of the instrument, the purchaser cannot have

the en6oyment & material tenancy nor mae use of it himself or thoughanother in his name, then delivery has not been effected.

The critical factor in the different modes of effecting delivery, w/c gives legal

effect to the act, is the actual intention of the vendor to delivery, & it%sacceptance by the vendee D w/o the intention, there is no tradition.

ADDISON V. FELI It is the duty of the vendor to deliver the thing sold. 4ymbolic delivery by the

e$ecution of a public instrument is e3uivalent to actual delivery only when thething sold is sub6ect to the control of the vendor.

If the vendor fails to deliver the thing sold the vendee may elect to rescind the

contract.

DANGUILAN V. IAC The conveyances in the case at bar being onerous donations are not covered by

the rule in Art. => of the ## re3uiring donations of real properties to beeffected through a public instrument.

?wnership does not pass by mere stipulation but only by delivery.

The e$ecution of a public document does not constitute sufficient delivery where

the property involve is in the actual & adverse possession of 9rdpersons.

In order that symbolic delivery may produce the effect of tradition, it is

necessary that the vendor shall have control over the thing sold that, at themoment of sale, its material delivery could have been made.

PASAGUI V. VILLABLANCA It is true that the e$ecution of the deed of absolute sale in a public instrument is

e3uivalent to delivery of the land sub6ect of the sale. This presumptivedelivery only holds true when there is no impediment that may prevent thepassing of the property from the hands of the vendor into those of the vendee.

It can be negated by the reality that the vendees actually failed to obtainmaterial possession of the land sub6ect of the sale.

POWER COMMERCIAL AND INDUSTRIAL CORP. V. CA If the parties intended to impose on respondent spouses the obligation to e6ect

the tenants from the lot sold, it should have included such provision in thecontract.

Hescission was not allowed as the breach was not substantial and fundamental

to the fulfillment by the petitioners of the obligation to sell. 4ymbolic delivery, as a species of constructive delivery, effects the transfer of

ownership through the e$ecution of a public document. Its efficacy can beprevented if the vendor does not possess control over the thing sold.

In order that this symbolic delivery may produce the effect of tradition, it is

necessary that the vendor shall have had such control over the thing sold. It is

not enough to confer upon the purchaser the ownership & the right ofpossession. The thing sold must be placed in his control.

Prior physical delivery of possession is not legally re3uired and the e$ecution of

the deed of sale is deemed e3uivalent to delivery. This deed operates as aformal or symbolic delivery of the property sold & authori-es the buyer to usethe document as proof of ownership.

CHUA VS. CA Art.


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VIVE EAGLE LAND INC. VS. CA The e$penses for the registration of the sale should be shouldered by the vendor

unless there is a stipulation to the contrary. The vendor is obliged to transfer title over the property & deliver the same to

the vendee.

DY( JR. V. CA The mortgagor who gave the property as security under the chattel mortgage

did not part w/ the ownership over the same. e had the right to sell italthough he was under the obligation to secure the written consent of themortgagee or he lays himself open to criminal prosecution under Art. 9 ofthe HP#.

BEHN MEYER & CO. V. YANGCO If the contract be silent as to the person or mode by w/c the goods are to be

sent, delivery by the vendor to a common carrier in the usual & ordinarycourse of business, transfers the property to the vendee.

If the buyer is to pay the freight, it is reasonable to suppose that he does so

because the goods become his at point of shipment. ?n the other hand, if theseller is to pay the freight, the inference is that title to property not pass untilthe goods have reached their destination.

The letters 'c.i.f. stands for costs, insurance, and freight. They signify that the

price fi$ed covers not only the cost of the goods, but the e$pense of freight &insurance to be paid by the seller.

The letters 'f.o.b. stand for the words 'free on board. The meaning is that the

seller shall bear all e$penses until the gods are delivered where they are to be5.?.".

GENERAL FOODS V. NACOCO :here the arties agreed that the payment of the price of the copra sold was to

be according to the 'net landed weight upon arrival in NJ, the vendor has theburden of proof to show that the shortage was due to riss of the voyage &not to the natural drying up of the copras while in transit, or to reasonableallowances for errors in the weighing of the gross cargo & emptying bags inCanila. In the absence of such proof the net landed weight of the agreement,the vendor should be held liable for the amount w/c it had overdrawn from the

vendee%s letter of credit covering the price.

VALLARTA V. COURT OF APPEALS In a 'sale on return, the ownership passes to the buyer on delivery. ;elivery or

tradition, as a mode of ac3uiring ownership must be in conse3uence of acontract.

SANTA ANA V. HERNANDEZ To hold the buyer to no more than the area recited in the deed, it must be made

clear that the sale was made by unit of measure at a definite price for eachunit. As bet. the absence of a recital of a given price per unit of measurement& the specification of the total area sold, the former must prevail & itdetermines the applicability of the norms concerning sales for a lump sum

NAAWAN COMMUNITY RURAL BANK( INC. V. CA :hen a person claims to have superior proprietary rights over another on the

ground that he derived his title from a sheriff%s sale registered in the Hegistryof Property, Art. (.

nder the Torrens 4ystem, registration is the operative act that gives validity to

the transfer or creates a lien upon the land. Issuance of a certificate of title had the effect of relieving the land of all claims

e$cept those noted thereon. Cere registration of title in case of double sale is not enough D good faith must

concur w/ the registration. The 'priority in time principle being invoed by petitioner is misplaced because

its registration referred to land not w/in the Torrens 4ystem but under Act99==. on the other hand, when respondents bought the sub6ect property, thesame was already registered under the Torrens 4ystem.

NAVAL V. COURT OF APPEALS Art.


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the


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7ven if a co2owner sells the whole property as his, the sale will affect only his

own share but not those of the other co2owners who did not consent to thesale.

4ince a co2owner is entitled to sell his undivided share, sale of the entire

property by one co2owner w/o the consent of the other co2owners is not null &void.

CHAPTER ': SALE BY NON-OWNER OR BY ONE HAVING VOIDABLE TITLE:THE LIFE OF A CONTRACT OF SALE

MINDANAO V. YAP A contract of sale is entirely null & void where it purports to sell properties of

w/c the sellers were not the only owners & the prestation involved wasindivisible, and therefore incapable of partial fulfillment.

Dy: hat was null # void was the purported transfer of ownership.

ESTOQUE V. PAJIMULA :here the seller was not the owner of a thing sold later ac3uires title thereto,

the transaction was validate and became fully effective.Dy: the sale %transfer of ownership& was ineffective as of the date of e!ecution of thedeed" since the seller could not validly transfer a specific '() portion w(c he didn*t own.

BUCTON V. GABAR The sale of land in a private instrument is binding upon the parties.

?ne who sells something he does not as yet own is bound by the sale when he

ac3uires the thing later.

CITY OF MANILA VS. BUGSUK LUMBER CO. The placing of an order for goods & the maing of payment thereto at a principal

office does not transform said office into a store, for it is a necessary elementthat there must also be goods or wares stored therein or on display, & providealso that the firm or person maintaining that office is actually engaged in thebusiness of buying & selling.

SUN BROS. & CO. V. VELASCO A person who buys a thing at a merchant%s store after the same has been put on

display, ac3uires a valid title to the thing although his predecessors in interestdid not have any right of ownership over it.

The policy of the law has always been that where the rights & interests of a

vendor come into clash w/ that of an innocent buyer for value, the latter mustalways be protected.

TAGATAC V. JIMENEZ In a case where there is no proof of illegal or unlawful deprivation, there is no

6ustification in applying the Art. ))> of the N##. The rights of a stranger in good faith, ac3uired before the resolution of the

contract, are entitled to protection.

EDCA PUBLISHING V. SANTOS Possession of movable property ac3uired in good faith is e3uivalent to a title.

Non2payment creates a right to demand payment or to rescind the contract, or

to criminal prosecution.

CRUZ VS. PAHATI( ET AL. A person illegally deprived of any movable may recover it from the person in

possession of the same & the only defense the latter may have is if he hasac3uired it in good faith at a public sale, in w/c case, the owner cannot obtainits return w/o reimbursing the price paid therefore.

AZNAR V. YAPDIANGCO A person unlawfully deprived of the possession of his persona property has a

better right to the possession thereof as against a buyer in god faith for valuefrom a seller who had no title thereto.

nder Art. of the ##, there are @ e$ceptions to the general rule on

irrevindicability, to wito :hen the owner has lost the thing, or

o :hen the owner has been unlawfully deprived thereof

In these cases, the possessor cannot retain the thing as against the owner,who may recover it w/o paying any indemnity, e$cept when the possessorac3uired it in a public sale.

DIZON V. SUNTAY The owner of a diamond ring may recover the possession of the same from a

pawnshop where another person had pledged it w/o authority to do so. Art.))> of the ## applies & the defense that the pawnshop ac3uired possession ofthe ring w/o notice of any defect in the title of the pledgor is unavailing.

CHAPTER +: LOSS( DETERIORATION( FRUITS & OTHER BENEFITS

ROMAN V. GRIMALT The disappearance or loss of property w/c the owner intended or attempted to

sell can only interest the owner, who should suffer the loss, & not a 9

rd

partywho has ac3uired no rights nor incurred any liability w/ respect thereto.

LAWYERS COOP V. TABORA In a contract of sale where the seller agreed that the ownership of the boos

sold shall remain w/ it until the purchase price shall have been fully paid, it isheld that such stipulation cannot mae the seller liable in case of loss, not onlybecause such was agreed merely to secure the performance by the buyer ofhis obligation but also because in the very contract itself, it was agreed thatthe loss or damage to the boos after delivery to the buyer shall be borne bythe buyer.

The rule that an obligor should be held e$empt from liability when the loss

occurs thru a fortuitous event only holds true when the obligation consists inthe delivery of determinate thing & there is no stipulation holding him liableeven in case of fortuitous event. It doesn%t apply when the obligation is

SIENNAA. FLORES SALESDOCTRINES


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pecuniary in nature & the obligor binds himself to assume the loss afterdelivery of the goods to him.

CHAPTER 1,: REMEDIES FOR BREACH OF CONTRACT OF SALE

HERMANOS( INC. VS. GERVACIO In order to apply the provisions of Art.


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LEGARDA V. SALDAA :here one purchases from a subdivision owner @ lots & has paid more than the

value of < lot, the former is entitled to a certificate of title to < lot in case ofdefault.

JESTRA DEVELOPMENT & MANAGEMENT CORP. VS PACIFICO HA (==@ was enacted to protect buyers of real estate on installment against

onerous & oppressive conditions. :hile the seller has under the Act the option

to cancel the contract due to non2payment of installments, he must afford thebuyer a grace period to pay them and, if at least @ years installments havealready been paid, to refund the cash surrender value of the payments.

MCLAUGHLIN V. CA After a purchaser by installments has paid substantial portion of the purchase

price, it would be ine3uitable to have the amount paid forfeited as li3uidateddamages, particularly if tender of payment was made.

nder the Caceda Law, a lot installment buyer is given a grace period to pay

installments in arrears. In the case at bar, the grace period has not yete$pired when a tender of payment was made.

?ffer of payment by certified chec is valid tender of payment.

:here an obligor fails to follow a valid tender of payment w/ a court

consignation, the court may allow him time to pay his obligation w/o

rescinding the deed of sale.

CHAPTER 11: REMEDY OF RESCISSION IN SALES CONTRACTS COVERINGIMMOVABLES: CONTRACT OF SALE VS. CONTRACT TO SELL

ADELFA PROPERTIES( INC. V. CA A deed of sale is considered absolute where there is neither a stipulation in the

deed that title to the property sold is reserved in the seller until the fullpayment of the price, nor one giving the vendor the right to unilaterallyresolve the contract the moment the buyer fails to pay w/in a fi$ed period.

An implied stipulation that ownership shall not pass to the purchaser until he had

fully paid the price is valid & therefore binding & enforceable between theparties.

The important tas in contract interpretation is always the ascertainment of the

intention of the contracting parties. In a perfected contract to sell, Art. * would properly apply.

In Art. *, the vendor is bound to mae payment even w/ the e$istence of a

vindicatory action if the vendee should give a security for the return of theprice.

It is consignation w/c is essential in order to e$tinguish petitioner%s obligation t

pay the balance of the purchase price. A contract to sell involved theperformance of an obligation, not merely the e$ercise of a privilege or a right.Thus, performance of payment may be effected not by tender of paymentalone but by both tender & consignation.

Budicial action for rescission of a contract is not necessary where the contract

provides for automatic rescission in case of breach.

Hesolution of reciprocal contracts may be made e$tra6udicially unless

successfully impugned in court. If the debtor impugns the declaration, it shallbe sub6ect to 6udicial determination. ?therwise, if said party does not opposeit, the e$tra6udicial rescission shall have legal effect.

CORONEL V. CA A contract to sell may be defined as a bilateral contract whereby the prospective

seller, while e$pressly reserving the ownership of the sub6ect property despitedelivery thereof to the prospective buyer, binds himself to sell the said

property e$clusively to the prospective buyer upon fulfillment of the conditionagreed upon, that is, full payment of the purchase price.

A contract to sell may not even be considered as a conditional contract of sale

because in a conditional contract of sale, the < stelement of consent is present,although it is conditioned upon the happening of a contingent even w/c may ormay not occur.

In a contract to sell, upon the fulfillment of the suspensive condition, ownership

will not automatically transfer to the buyer D the prospective buyer still has toconvey title to the prospective buyer by entering into a contract of absolutesale.

In a contract to sell, there being no previous sale of the property, a 9 rdperson

buying such property despite the fulfillment of the suspensive condition suchas the full payment of the purchase price cannot be deemed a buyer in badfaith & the prospective buyer cannot see the relief of reconveyance of the

property D there is no double sale in such case. In a conditional contract of sale, upon the fulfillment of the suspensive condition,

the sale becomes absolute & this will definitely affect the seller%s title thereto. :hen the sellers declared in the 'Heceipt of ;own Payment that they received

an amount as purchase price for their house & lot w/o any reservation of titleuntil full payment of the entire purchase price, the natural & ordinary meaningidea conveyed is that they sold their property.

A seller cannot unilaterally & e$tra6udicially rescind a contract of sale where

there is no e$press stipulation authori-ing him to e$tra6udicially rescind

PNB V. CA A contract to sell is ain to a conditional sale where the efficacy or obligatory

force of the vendor%s obligation to transfer title is subrogated to the happeningof a future & uncertain event.

It is not enough to say that the contract of sale, being consensual becameautomatically & immediately effective.

CONTRACT OF SALE CONTRACT TO SELLThe title to the propertypasses to the vendee upon thedelivery of the thing sold

?wnership is, by agreement, reserved in thevendor and is not to pass to the vendee until fullpayment of the purchase price

The vendor loses ownershipover the property & cannotrecover it until & unless thecontract is resolved/rescinded

Payment of the purchase price is a positivesuspensive condition, failure of w/c is not a breachbut an event that prevents the obligation of thevendor to convey title from becoming effective

Non2payment of the price is anegative resolutory condition

5ull payment is a positive suspensive condition

SIENNAA. FLORES SALESDOCTRINES


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BABASA V. COURT OF APPEALS A deed of sale is absolute in nature although denominated a 'conditional sale

absent such stipulations reserving title to the vendor until full payment of thepurchase price, nor any stipulation giving them the right to unilaterally rescindthe contract in case of non2payment.

There is a distinction between a condition imposed on the perfection of a

contract & a condition imposed merely on the performance of an obligation.

:hile failure to comply w/ the

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