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113

MEMORY AID IN CIVIL LAW

SALES
SALE 5. Commutative; In some cases,
A nominate contract whereby one of aleatory (emptio spei);
the contracting parties obligates 6. Onerous.
himself to transfer the ownership of
and to deliver a determinate thing * Aleatory contract: one of the parties or
and the other to pay therefor a price both reciprocally bind themselves to give
certain in money or its equivalent. or to do something in consideration of
what the other shall give or do upon the
NOTES: Delivery and payment in a happening of an event which is uncertain,
contract of sale are so interrelated and or which is to occur at an indeterminate
intertwined with each other that without time. (Ex: Sale of sweepstakes ticket)
delivery of the goods there is no
corresponding obligation to pay. The two Contract to sell
complement each other. It is clear that exclusive right and privilege to
the two elements cannot be dissociated, purchase an object.
for the contract of purchase and sale is a bilateral contract whereby the
essentially a bilateral contract, as it prospective seller, while expressly
gives rise to reciprocal obligations. (Pio reserving the ownership of the
Barretto Sons, Inc. vs. Compania subject property despite delivery
Maritima, 62 SCRA 167). thereof to the prospective buyer
Neither is the delivery of the thing binds himself to sell the said
bought nor the payment of the price property exclusively to the
necessary for the perfection of the prospective buyer upon fulfilment of
contract of sale. Being consensual, it the condition agreed upon, that is,
is perfected by mere consent. full payment of the purchase price.

Elements: NOTE: Absent a proviso in the contract

that the title to the property is reserved
a. Essential elements – those without
which, there can be no valid sale: in the vendor until full payment of the
1. Consent or meeting of minds purchase price or a stipulation giving the
2. A Determinable subject matter vendor the right to unilaterally rescind
3. Price certain in money or its the contract the moment the vendee
equivalent fails to pay within the fixed period, the
transaction is an absolute contract of
b. Natural elements – inherent in the sale and not a contract to sell. (Dignos
contract, and which in the absence of any vs. CA [1988])
contrary provision, are deemed to exist in the * The contract of sale by itself is not a mode of
contract:
acquiring ownership. The contact transfers no
1. Warranty against eviction
real rights; it merely causes certain obligations
2. Warranty against hidden
to arise.
defects
c. Accidental elements – may be
present or absent depending on the
Contract of Contract to
stipulation of the parties (e.g.: conditions,
interest, penalty, time or place of payment, Sale Sell
etc.) 1. Title passes to the 1. Ownership is
buyer upon delivery reserved in the
Characteristics: of the thing sold seller and is not to
pass until full
1. Principal
payment of the
2. Consensual;
3. Bilateral; purchase price
2. Non-payment of 2. Full payment is a
4. Nominate; the price is a negative positive suspensive
resolutory condition condition, the
and the remedy of the failure of which is
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

seller is to exact not a breach – 1. Constructive 1. Third person

fulfilment or to casual or serious /actual knowledge on buying the
rescind the contract but simply the part of the 2nd property despite
prevents the buyer of the defect in fulfilment of the
obligation of the the seller’s title suspensive
vendor to convey renders him not a condition cannot
title from having registrant in good be deemed a
binding force faith. Such second buyer in bad
3. Vendor loses and 3. Title remains in buyer cannot defeat faith and
cannot recover the vendor if the the first buyer’s title. prospective
ownership of the vendee does not Ratio: Fulfilment of buyer cannot
thing sold and comply with the the suspensive seek the relief of
delivered until the condition conditions affects the reconveyance of
contract of sale is precedent of seller’s title to the property.
resolved and set aside making payment at property and previous Exception: If
the time specified delivery of the There was no
in the contract property automatically previous sale of
transfers the property.
ownership/title to the
Conditional Sale Contract to
buyer.
Sell
As to reservation of title to the subject
property OBJECTS OF SALE
In both cases the seller may reserve the Requisites:
title to the subject property until 1. THINGS:
fulfillment of the suspensive condition i.e. a) determinate or determinable (Arts.
full payment of the price 1458, 1460)
As to effect of fulfillment of suspensive b) lawful (Arts 1347, 1409 [1,4]
condition c) should not be impossible (Art. 1348)
1. Upon fulfillment of 1. Upon e.g. must be within the commerce of man
the suspensive fulfillment of the 2. RIGHTS – must be transmissible Exceptions:
condition, the suspensive -future inheritance
contract of sale is condition, which - service
thereby perfected, is the full
such that if there had payment of the
been previous delivery purchase price, Emptio rei Emptio spei
of the subject ownership will speratae
property to the buyer, not automatically 1. Sale of an expected 1. Sale of a mere
ownership thereto transfer to the thing hope or expectancy
automatically buyer although that the thing will
transfers to the the property may come to existence;
buyer by operation have been Sale of the hope
of law without any previously itself
further act by the delivered to him. 2. Sale is subject to 2. Sale produces
seller. The prospective the condition that effect even if the
the thing will thing does not
seller still has
exist; if it does come into
to convey title
not, there is no existence, unless it
to the
prospective contract is a vain hope
3. The uncertainty is 3. The uncertainty with
buyer by
regard to the is with regard to
entering into a
quantity and quality of the existence of the
contract of the thing and not the thing
absolute sale. existence of the thing
4. Object is a future 4. Object is a
thing present thing which
As to effect of sale of the subject
is the hope or
property to 3rd persons expectancy
NOTE: In case of doubt the presumption is
in favor of emptio rei speratae which is
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

more in keeping with the commutative 1. Buyer receives the 1. Agent receives
character of the contract goods as owner the goods as goods
of the principal who
Goods which may be Object of Sale retains his ownership
over them
a. Existing goods – goods owned or
2. Buyer pays the 2. Agent delivers
possessed by the seller. price the price which in
b. Future goods – goods to be turn he got from his
manufactured, raised or acquired by buyer
the seller after the perfection of the 3. Buyer, as a 3. Agent can return
contract. general rule, cannot the goods in case he
NOTES: return the object is unable to sell the
A sale of future goods is valid only as sold same to a third
an executory contract to be fulfilled person
4. Seller warrants 4. Agent makes no
by the acquisition and delivery of
the thing sold warranty for which
goods specified. he assumes personal
While there can be sale of future liability as long as he
property, there can generally be no acts within his
donation of future property (Article authority and in the
751 Civil Code) name of the seller
5. Buyer can deal 5. Agent in dealing
Future inheritance cannot be sold. A with the thing sold with the thing
contract of sale or purchase of as he pleases being received, must act
goods to be delivered at a future time, the owner and is bound
if entered into without the intention of according to the
instructions of the
having any goods pass from one party
principal
to another, but with an understanding
that at the appointed time, the
purchaser is merely to receive or pay
the difference between the contract Contract for Piece
and the market prices, is illegal. Such Sale
contract falls under the definition of of Work
“futures” in which the parties merely 1. The thing 1. The thing
gamble on the rise or fall in prices and transferred is one transferred is one
is declared null and void by law. (Art. not in existence and which would have
2018, NCC) (Onapal Phil. which never would existed and would
Commodities, Inc. vs. CA [1993]) have existed but for have been the
the order of the subject of sale to
party desiring to some other person,
Instances when the Civil Code acquire it even if the order
recognizes sale of things not had not been given
actually or already owned by the
2. The services 2. The primary
seller at the time of the sale:
dominate the objective of the
1. Sale of a thing having potential contract even contract is a sale of
existence (Article 1461) though there is a the manufactured
2. Sale of future goods (Article 1462) sale of goods item; it is a sale of
3. Contract for the delivery at a certain involved goods even though
price of an article which the vendor in the the item is
ordinary course of the business manufactures manufactured by
or procures for the general market, whether labor furnished by
the same is on hand at the time or not the seller and upon
(Article 1467) previous order of
the customer
3. Not within the 3. Within the
Statute of Frauds Statute of Frauds

Sale Agency to sell Rules to determine if the contract is

one of Sale or Piece of work:
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

a. If ordered in the ordinary course of object the acquisition of the

object offered in lieu
business – sale
of the original credit
b. If manufactured specially for the 4. Greater freedom 4. Less Freedom in
customer and upon his special order, and not in determining determining the
for the market – piece of work the price price

SCHOOLS OF THOUGHT: 5. Buyer still has to 5. The payment is

a) Massachusetts rule: If specifically pay the price received by the
done at the order of another, this is a contract debtor before
for a piece of work. (Philippine application) the contract is
b) New York rule: If thing already perfected.
exists-SALE; if not-WORK
c) English rule: If material is more PRICE
valuable-SALE; if skill is more valuable-WORK The sum stipulated as the equivalent
of the thing sold and also every
BARTER incident taken into consideration for
contract whereby one of the parties the fixing of the price, put to the
binds himself to give one thing in debit of the vendee and agreed to by
consideration of the other's promise him.
to give another thing.
NOTE: The only point difference Requisites:
between contract of sale and barter is in 1. Certainty or ascertainable at
the element which is present in sale but the time of perfection
not in barter, namely: price certain in 2. Real, not fictitious
money or its equivalent 3. In some cases, must not be
grossly inferior to the value of the thing sold.
NOTE: If the consideration is partly in 4. Paid in money or its
money and partly in another thing, equivalent
determine:
a. The manifest intention of Certainty
the parties It is not necessary that the certainty
b. If the intent is not clear, of the price be actual or determined
apply the following rules: at the time of the execution of the
1. If the thing is more contract. The price is certain in the
valuable than money – barter following cases:
2. If the money and the 1. If the parties have fixed or
thing are of equal value – sale agreed upon a definite amount;
3. If the thing is less NOTE: The fixing of the price can
valuable than money – sale never be left to the discretion of one
of the contracting parties. However
Sale Dation in Payment if the price fixed by one of the
1. No pre- 1. Pre-existing credit parties is accepted by the other, the
existing credit sale is perfected.
2. Obligations are 2. Obligations are 2. If it be certain with reference
created extinguished to another thing certain
3. Consideration on 3. Consideration of
3. If the determination of the
the part of the seller the debtor is the
is the price; on the extinguishment of
price is left to the judgment of a specified
part of the buyer is the debt; on the part person or persons even before such
the acquisition of the of the creditor, it is determination

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

4. In the cases providedGENERAL RULE: Mere inadequacy of the

under Art. 1472 NCC price is not a sufficient ground for the
cancellation of the sale if property is
real.

Effect when the price is fixed by the

third person designated: EXCEPTIONS:
GENERAL RULE: Price fixed by a third a. Where the price is so low as
person designated by the parties is to be shocking to the moral conscience,
binding upon them. judicial sale of personal property will be set
EXCEPTIONS: aside
1. When the third person b. In the event of a resale, a
acts in bad faith or by mistake better price can be obtained
2. When the third person
disregards the specific NOTE: The validity of the sale is not
instructions or the procedure necessarily affected where the law gives
marked out by the parties to the owner the right to redeem, upon
the theory that the lesser the price, the
Effect when the price is not fixed by easier it is for the owner to effect
the third person designated: redemption.
1. If the third person
refuses or cannot fix the price, the contract Effect where price is simulated
shall become ineffective, unless the parties 1. If it is shown to have been in reality a
subsequently agree upon the price donation or some other act or contract
2. If the third person is The sale is void but the
prevented from fixing the price by the fault act or contract may be valid as a
of the seller or buyer, the party not in fault donation
may obtain redress against the party in fault 2. If not
The contract is void and
Effect of Gross Inadequacy of Price: inexistent
1. Voluntary sales
GENERAL RULE: Mere inadequacy of the Effect of Failure to determine price:
price does not affect validity of the sale. 1. Where contract executory
A valuable consideration, however The contract is
small or nominal, if given or inefficacious
stipulated in good faith is, in the 2. Where the thing has been delivered to
absence of fraud, sufficient. and appropriated by the buyer
(Rodriguez vs. CA, 207 SCRA 553) The buyer must pay a reasonable
Future inheritance cannot be sold. price therefore

EXCEPTIONS: Reasonable price – generally the market

a. Where low price indicates vice of price at the time and place fixed by the
consent, sale may be annulled; or contract is contract or by law for the delivery of the
presumed to be an equitable mortgage goods
b. Where the price is so low as to
be “shocking to conscience”, sale may be set PERFECTION OF SALE
aside. GENERAL RULE: It is perfected at the
moment there is meeting of the minds
2. Involuntary or Forced sales upon a determinate thing (object), and a
certain price (consideration), even if
neither is delivered. A choice between
rescission and fulfilment, with damages
in either case)
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

Nonpayment only creates a right

NOTE: Sale is a consensual contract; to demand payment or to rescind
Hence, delivery and payment are not the contract, or to criminal
essential for its perfection prosecution in the case of
EXCEPTION: When the sale is subject to bouncing checks. (EDCA
a suspensive condition by virtue of law or Publishing and Distributing
stipulation. Corp. vs. Santos, 184 SCRA 614)
* The terms and conditions of payment
are merely accidental, not essential elements EXCEPTIONS:
of the contract of sale except where the
partied themselves stipulate that in addition
1. Contrary stipulation or Pactum reservati
dominii (contractual reservation of title) – a
to the subject-matter and the price, they are
stipulation, usually in sales by installment,
essential or material to the contract.
whereby, despite delivery of the property
sold, ownership remains with the seller until
Requirements for perfection
full payment of the price is made.
a. When parties are face to face
2. Contract to sell
When an offer is
accepted without conditions or 3. Contract of insurance – a perfected
qualifications contract of sale, even without delivery, vests
NOTES: in the vendee an equitable title, an existing
A conditional acceptance is a interest over the goods sufficient to be the
subject of insurance
counter-offer
when negotiated thru phone it is RULES GOVERNING AUCTION SALES
as if it is negotiated face to face 1. Sales of separate lots by auction are
b. When contract is thru separate contracts of sale.
correspondence or thru telegram 2. Sale is perfected by the fall of the
When the offeror receives or has hammer
knowledge of the acceptance by the 3. Seller has the right to bid in the auction,
offeree provided:
NOTE: If the buyer has already a) such right was reserved
accepted but the seller does not b) notice was given that the sale was
know yet of the acceptance, the subject to a right to bid on behalf of the
seller may still withdraw seller
c. When a sale is subject to a c) right is not prohibited by law or by
suspensive condition stipulation
From the moment the condition 4. Advertisements for bidders are simply
is fulfilled invitations to make proposals, and the
advertiser is not bound to accept the highest
TRANSFER OF OWNERSHIP or lowest bidder, unless the contrary
GENERAL RULE: While a contract of sale appears.
is consensual, ownership of the thing sold
is acquired only upon its delivery, actual or EFFECT OF PROMISE TREATED UNDER
constructive, to the buyer. (Daus vs. Sps. ART. 1479 Civil Code:
De Leon, 16 June 2003) Accepted unilateral promise to sell or
This is true even if the purchase buy
has been made on credit. Only one makes the promise, this
Payment of the purchase price is promise is accepted by the other.
not essential to the transfer of Example: A promises to sell to B, B
ownership, as long as the accepts the promise, but does not in
property sold has been turn promise to buy.
delivered. (Sampaguita Pictures,
Inc vs. Jalwindor Manufacturers,
Inc. 93 SCRA 420)
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

does not bind the promissor even if supported by a consideration, the

accepted and may be withdrawn moment it was accepted, a perfected
anytime. contract of sale resulted, applying Art.
NOTE: Pending notice of its withdrawal, 1324 of the NCC. In view of the ruling of
the accepted promise partakes the the Supreme Court, the only importance
nature of an offer to sell which if of the consideration for an option is that
accepted, results in a perfected contract the option cannot be withdrawn by the
of sale (Sanchez vs. Rigos 45 SCRA3 68). grantor after acceptance.
In other words, if the acceptance is * In an option to buy, the party who has an
made before withdrawal, it constitutes a option may validly and effectively exercise
binding contract of sale although the his right by merely notifying the owner of the
option is given without consideration. former’s decision to buy and expressing his
if the promise is supported by a readiness to pay the stipulated price.
consideration distinct and separate
from the price (option money), its Right of First Refusal
acceptance will give rise to a It is a right of first priority all things
perfected contract. and conditions being equal; there
should be identity of the terms and
conditions to be offered to the
Bilateral promise to buy and sell
optionee and all other prospective
One party accepts the other’s
buyers, with optionee to enjoy the
promise to buy and the latter, the
right of first priority. A deed of sale
former’s promise to sell a executed in favor of a third party
determinate thing for a price certain who cannot be deemed a purchaser
it is reciprocally demandable in good faith, and which is in
It requires no consideration distinct violation of the of the right of first
from the selling price refusal granted to the optionee is
NOTE: this is as good as a perfected NOT voidable under the Statute of
sale. No title of dominion is Frauds, such contract is valid BUT
transferred as yet, the parties being rescissible under Article 1380 to
given only the right to demand 1381(3) of the New Civil Code
fulfillment or damages. (Guzman Bocaling & Co. vs.
Bonnavie; Riviera Filipina, Inc vs. CA
Policitation et.al. GR No. 117355, April 5, 2002).
An unaccepted unilateral promise to The basis of the right of first refusal
buy or sell. Even if accepted by the must be the current offer to sell of
other party, it does not bind the the seller or offer to purchase of any
promissor and maybe withdrawn prospective buyer. Only after the
anytime. This is a mere offer, and optionee fails to exercise its right of
has not yet been converted into a first priority under the same terms
contract. and within the period contemplated
could the owner validly offer to sell
Option contract the property to a third person,
A contract granting a privilege in one again, under the same terms as
person, for which he has paid a offered to the optionee (Paranaque
consideration, which gives him the Kings Enterprises, Inc. vs. CA GR No.
right to buy certain merchandise, at 111538, February 26, 1997)
anytime within the agreed period, at The lessee’s right of first option to
a fixed price. buy the leased property in case of its
An option without consideration is sale is but a part of the bigger right
to lease the said property from the
void and the effect is the same as if
lessor. The option was given to the
there was no option
lessee because she was the lessee of
* However, in Sanchez vs. Rigos (1972),
the subject property. It was a
even though the option was not
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

component of the consideration of GENERAL RULE: Who bears the risk

the lease. The option was by no of loss is governed by the
means an independent right which stipulations in the contract
can be exercised by the lessee. If In the absence of any
the lessee is barred by the contract stipulation:
from assigning her right to lease the First view:
subject property to any other party, Buyer bears the loss as an exception
the lessee is similarly barred to to the rule of res perit domino.
assign her first option to buy the EXCEPTIONS:
leased property to another. 1. when object sold consists of
(Bangayan et.al vs. CA and Lim GR fungible goods for a price fixed according to
No.123581, August 29, 1997) weight, number or measure
2. seller is guilty of fraud,
Earnest money – or “ARRAS” is something negligence, default or violation of
of value to show that the buyer was really contractual terms
in earnest, and given to the seller to bind 3. object sold is generic
the bargain. It is considered as: (Civil Code of the Philippines, Paras)
a) part of the purchase price NOTE: This view conforms with
b) proof of perfection of the Manresa’s view. Buyer would have
contract been the one to profit from the thing
*It shall be deducted from the total price. had it not been lost or destroyed.

Contrary view:
Earnest money Option money Where the ownership is transferred by
1. Title passes to 1. Ownership
delivery, as in our code, the
application of the axiom res perit
the buyer upon reserved to the seller
domino, imposes the risk of loss upon
delivery of the and is not to pass
the vendor; hence, if the thing is lost
thing sold until full payment
by fortuitous event before delivery,
the vendor suffers the loss and cannot
2. In case of 2. In case recover the price from the
non-payment, an non-payment, there vendee (Commentaries and
action for specific can be action Jurisprudence on the Civil Code of
performance or for specific performance the Philippines, Tolentino)
rescission can be
filed by the d. The thing is lost after delivery:
injured party Buyer bears the loss.
3. Part of the 3. Money given as a
purchase price distinct consideration Question: If one does not comply,
for an option
contract
the other need not pay?
4. When given, the 4. The would-be Answer: True. But this only applies when
buyer is bound to buyer is not required the seller is able to deliver but does not.
pay the balance to buy
5. Given when 5. Applies to a sale EFFECT OF LOSS AT THE TIME OF SALE:
there is already a not yet perfected
sale a. Thing entirely lost at the time of
perfection: Contract is void and inexistent
RULES ON RISK OF LOSS AND b. Thing only partially lost: Vendee may
DETERIORATION: elect between withdrawing from the contract or
a. The thing sold is lost before demanding the
perfection: Seller bears the loss. remaining part, paying its
proportionate price
b. The thing sold is lost at the time of
perfection: Contract is void or inexistent.
c. The thing sold is lost after
perfection, but before delivery:

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

Sale by description 3. Sale of property not to be

A sale where a seller sells things as performed within a year from the date
being of a certain kind, buyer merely thereof
relying on the seller’s 4. “Applicable statute” requires
representations or descriptions. that the contract of sale be in a certain form
There is warranty that the thing sold NOTE: Statute of Frauds is applicable
corresponds to the representations only to executory contracts and not to
or descriptions. contracts which are totally or partially
performed.
Sale by sample
A sale where a small quantity of a
commodity is exhibited by the seller
CAPACITY TO BUY OR SELL
as a fair specimen of the bulk, which
GENERAL RULE: All persons who can
is not present and as to which there
is no opportunity to inspect or bind themselves also have legal capacity
examine. to buy and sell.
EXCEPTIONS:
NOTE: The mere exhibition of the 1. Absolute incapacity (minors,
sample does not necessarily make it demented persons, imbeciles,
a sale by sample. This exhibition deaf and dumb, prodigals, civil
must have been the sole basis or interdictees) - party cannot bind
inducement of the sale. themselves in any case.
There is warranty that the bulk of
the commodity will correspond in 2. Relative incapacity –
kind, quality, and character with the incapacity exists only with reference to
sample exhibited. certain persons or a certain class of property

NOTE: In a sale by sample and by Relative Incapacity

description, there is a two-fold warranty. A. Husband and wife (Art. 1490):
Generally, a sale by one spouse to
RIGHTS OF BUYER: another is void.
1) Return the thing and recover the The husband and wife cannot sell
money paid, or property to each other except:
2) Retain the thing and sue for the 1. When a separation of
breach of warranty. property was agreed upon by the spouses
2. When there has been a
PURCHASE BY MINORS: Contract is judicial separation of property under Article
generally voidable but in case of 134 and 135 of the Family Code
necessaries, “where necessaries are sold
and delivered to a minor or other person B. Incapacity by reason of relation to
without capacity to act, he must pay a property (Art. 1491)
reasonable price therefore. Necessaries The following persons cannot acquire
are those in Art. 290.” property by purchase, even at a
public auction, either in person or
FORMALITIES OF CONTRACT OF SALE through the mediation of another:
GENERAL RULE: Sale is a consensual
(GAEP-JO)
contract and is perfected by mere
1. the guardian, with respect to the
consent.
property of his ward;
EXCEPTIONS: In order to be
2. agents, with respect to the property
enforceable by action, the following
whose administration or sale may have been
must be in writing:
entrusted to
1. Sale of personal property
at a price not less than P500
2. Sale of real property or
an interest therein
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

them, unless the consent of the administrator to sell. The sale

principal has been given; was indubitably illegal, irregular
3. executor or administrator, with and fictitious, and the court’s
respect to the property of the estate under approval of the assailed
administration; compromise agreement violated
4. public officers and employees, Article 1491 and cannot work to
with respect to the properties of the ratify a fictitious contract which
government, its political subdivisions, or is non-existent and void from
GOCCs, that are entrusted to them; the very beginning
5. judges, justices, prosecuting b) With respect to nos. 4 to
attorneys, clerks of courts, etc., with respect 6: the sale is NULL AND VOID.
to the property in custogia legis; and Reason: violation of public policy
cannot be subject to ratification
6. any other person specially
disqualified by law. OBLIGATIONS OF THE VENDOR: (WPD-
Examples of persons especially TT)
disqualified by law: 1. Transfer ownership (cannot be waived)
a. Aliens who are disqualified to 2. Deliver the thing sold (cannot be waived)
purchase agricultural lands 3. Warrant against eviction and against
b. An unpaid seller having a right hidden defects (can be waived or modified
of lien or having stopped the goods in transitu, since warranty is not an essential element of
who is prohibited from buying the goods either the contract of sale)
directly or indirectly in the resale of the same, 4. Take care of the thing, pending delivery,
at public or private sale which he may make with proper diligence (Article 1163)
c. The officer holding the 5. Pay for the expenses of the deed of sale,
execution, or his deputy. unless there is stipulation to the contrary
NOTE: While those disqualified
under Arts. 1490 and 1491 may DELIVERY
not become lessees (Art. 1646), Is a mode of acquiring ownership, as
still aliens may become lessees a consequence of certain contracts
even if they cannot buy lands. such as sale, by virtue of which,
actually or constructively, the object
Effect of violation: is placed in the control and
a) With respect to nos. 1 to possession of the vendee.
3: the sale is VOIDABLE.
Reason: only private rights, Delivery of the thing together
which are subject to ratification with the payment of the price,
are violated marks the consummation of the
NOTE: In the case of Lao vs. contract of sale(PNB vs. Ling, 69
Genato, 137 SCRA 77, the Phil. 611)
Supreme Court found that the
sale by the administrator of In all forms of delivery, it is
certain properties of the estate necessary that the act of
in order to settle the existing delivery be coupled with the
obligations of the estate was intention of delivering the thing.
made to the administrator’s son The act without the intention is
for a grossly low price. insufficient. (Norkis Distributor,
Furthermore, the said sale was Inc. vs. CA, 195 SCRA 694)
not submitted to the probate
court for approval as mandated Kinds:
by the order authorizing the
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

1. Actual or real – placing the thing 2. If no period for payment has been fixed
under the control and possession of the in the contract
buyer. 3. Even if a period for payment has been
2. Legal or constructive – delivery is fixed in the contract, if the vendee has lost
represented by other signs or acts indicative the right to make use of the same.
thereof
a.delivery by the execution Sale or return
of a public instrument. Property is sold, but the buyer, who
NOTE: Gives rise only to a prima becomes the owner of the property
facie presumption of delivery which on delivery, has the option to return
is destroyed when actual delivery is the same to the seller instead of
not effected because of a legal paying the price.
impediment (Ten Forty Realty vs.
Cruz, 10 Sept. 2003)
b. traditio symbolica - to NOTES:
effect delivery, the parties make use of a It is a kind of sale with a
token or symbol to represent the thing condition subsequent.
delivered The buyer must comply with the
c. traditio longa manu – express or implied conditions
seller pointing out to the buyer the things attached to the return privilege;
which are transferred, which at the time otherwise, the sale becomes
must be in sight. absolute.
d. traditio brevi manu – Buyer, being the owner, bears
buyer simply continues in possession of the the risk of loss
thing but under title of ownership.
e. traditio constitutum Sale on trial, approval, or satisfaction
possessorium – seller continues in possession but A contract in the nature of an option
under a different title other than ownership. to purchase if the goods prove to be
3. Quasi-tradition – delivery of rights, satisfactory, the approval of the
credits or incorporeal property, made by: buyer being a condition precedent.
a. placing titles of ownership in the
hands of buyer Rules:
b. allowing buyer to make use of
1. title remains in the seller
rights
2. risk of loss remains with seller
4. Tradition by operation of law
except when the buyer is at fault or
has agreed to bear the loss
Constructive delivery requires three
3. buyer must give goods a trial, except
things before ownership may be
where it is evident that it cannot perform the
transferred:
work
1. The seller must have control over
4. period within which buyer must signify
the thing
his acceptance runs only when all the parts
2. The buyer must be put under control
essential for the operation of the object have
3. There must be the intention to
been delivered.
deliver the thing for purposes of ownership
5. if it is stipulated that a third person must
satisfy approval or satisfaction, the provision
When is the vendor not bound to
is valid, but the third person must be in good
deliver the thing sold:
faith. If refusal to accept is not justified,
1. If the vendee has not paid him the
seller may still sue.
price
6. Generally, the sale and delivery to a
buyer who is an expert on the object

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

purchased is not a sale on approval, 1. Owner is estopped or precluded by

trial, or satisfaction. his conduct
2. When sale is made by the
Sale or return Sale on Trial registered owner or apparent owner in
1. Subject to a 1. Subject to a accordance with recording or registration
resolutory condition suspensive condition laws
2. Depends entirely 2. Depends on the 3. Sales sanctioned by judicial or
on the will of the character or quality of
statutory authority
buyer the goods
4. Purchases in a merchant's store,
3. Ownership passes 3. Ownership remains
to the buyer on in the seller until buyer fairs or markets
delivery and signifies his approval or 5. When a person who is not the
subsequent return acceptance to the owner sells and delivers a thing, subsequently
reverts ownership in seller acquires title thereto (Art. 1434)
the seller
6. When the seller has a
4. Risk of loss or 4. Risk of loss remains voidable title which has not been avoided at
injury rests upon with the seller the time of the sale (Art. 1506)
the buyer * “Unlawful deprivation” is no longer
Instances where Seller is still the limited to a criminal act. There is
Owner despite Delivery: Unlawful Deprivation where there is no
1. Sale on trial, approval or satisfaction valid transmission of ownership.
2. Contrary intention appears by the
term of the contract; Place of delivery of goods
3. Implied reservation of ownership 1. Where there is an agreement, place of
(Article 1503) delivery is that agreed upon
a. If under the bill of lading, the 2. Where there is no agreement, place of
goods are deliverable to seller or agent or delivery determined by usage of trade
their order; 3. Where there is no agreement and no
b. If the bill of lading, although prevalent usage, place of delivery is the
stating that the goods are to be seller’s place
delivered to the buyer or his 4. In any other case, place of delivery is the
agent, is kept by the seller or his seller’s residence
agent; 5. In case of specific goods, which to the
a. When the buyer, although the knowledge of the parties at the time the
goods are deliverable to order of contract was made were in some other place,
buyer, and although the bill of that place is the place of delivery, in the
lading is given to him, does not absence of agreement or usage of trade to
honor the bill of exchange sent the contrary
along with it.
Time of delivery of goods
Transfer of ownership where goods 1. Stipulated time
sold delivered to carrier 2. In the absence thereof, within a
General Rule: Delivery to the carrier is reasonable time
deemed to be delivery to the buyer
Exception: Where the right of possession NEGOTIABLE DOCUMENT OF TITLE (NDT)
or ownership of specific goods sold is A document of title in which it is
reserved stated that the goods referred to
therein will be delivered to the
SALE OF GOODS BY A NON-OWNER bearer, or to the order of any person
GENERAL RULE: Buyer acquires no title named in such document.
even if in good faith and for value under May be negotiated by delivery or
the maxim Nemo dat quid non habet indorsement.
(“You cannot give what you do not
have”).
EXCEPTIONS: (SMERVS)
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

The document is negotiable if: RULES WHEN QUANTITY IS LESS THAN

1. The goods are deliverable to the AGREED UPON:
bearer; or 1. Buyer may reject; or
2. If the goods are deliverable to the 2. Buyer may accept what has
order of a certain person been delivered, at the contract rate

Persons who may negotiate NDT: RULES WHEN QUANTITY IS MORE THAN
1. The owner; or AGREED UPON:
2. Any person to whom the possession or 1. Buyer may reject all; or
custody thereof has been entrusted by the 2. Buyer may accept the goods
owner, if by the terms of the document the agreed upon and reject the rest; or
bailee issuing the document undertakes to 3. Buyer may accept all and
deliver the goods to the order of the person to must pay for them at the contract rate
whom the possession or custody of the NOTE: Acceptance, even if not express
document has been entrusted or if at the time may be implied when the buyer exercises
of such entrusting the document in such form acts of ownership over the excess goods.
that it may be negotiated by delivery.
RULES WHEN GOODS MIXED WITH
* If the holder of a negotiable document GOODS OF DIFFERENT DESCRIPTION:
of title (deliverable to bearer) entrusts the Buyer may accept the goods which
document to a friend for deposit, but the are in accordance with the contract
friend betrays the trust and negotiates the and reject the rest
document by delivering it to another who is in
good faith, the said owner cannot impugn the NOTE: If the subject matter is
validity of the negotiation. As between two indivisible, in case of delivery of larger
innocent persons, he who made the loss quantity of goods or of mixed goods, the
possible shall bear the loss, without prejudice buyer may reject the whole of the goods
to his right to recover from the wrongdoer.
DELIVERY TO THE CARRIER
RIGHTS OF PERSON TO WHOM GENERAL RULE: Where the seller is
DOCUMENT HAS BEEN NEGOTIATED: authorized or required to send the goods
1) The title of the person negotiating the to the buyer, delivery to the carrier is
document, over the goods covered by the delivery to the buyer.
document; EXCEPTIONS:
2) The title of the person (depositor or 1. When a contrary intention
owner) to whose order by the terms of the appears
document the goods were to be delivered,
2. Implied reservation of
over such goods;
ownership under pars. 1,2,3 of Art. 1503
3) The direct obligation of the bailee to
hold possession of the goods for him, as if the Kinds of Delivery to the Carrier
bailee had contracted to him directly NOTE;
Mere transferee does not acquire directly the a. C.I.F. (cost, insurance,
obligation of the bailee (in Art. 1513). To freight) – signify that the price fixed covers
acquire it, he must notify the bailee. not only the costs of the goods, but the
expense of the freight and the insurance to
WHO CAN DEFEAT RIGHTS OF be paid by the seller
TRANSFEREE: b. F.O.B. (free on board) – goods
1. Creditor of transferor are to be delivered free of expense to the buyer
2. Transferor to the point
3. Subsequent purchaser
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

where they are F.O.B. The point Vendor is obligated to deliver all the
of F.O.B., either at the point of land included within the boundaries,
shipment or the point of regardless of whether the real area
destination, determines when should be greater or smaller
the ownership passes. Ordinarily, there can be no rescission
NOTE: the terms C.I.F. and F.O.B. or reduction or increase whether the
merely make rules of presumption
area be greater or lesser, unless
c. C.O.D. (collect on delivery) – there is gross mistake.
the carrier acts for the seller in NOTE: The Civil Code presumes that the
collecting the purchase price, purchaser had in mind a particular piece
which the buyer must pay to of land and that he ascertained its area
obtain possession of the goods. and quality before the contract of sale
was perfected. If he did not do so, or if
having done so he made no objection
SELLER’S DUTY AFTER DELIVERY TO and consented to the transaction, he can
CARRIER blame no one but himself (Teran vs.
1. To enter on behalf of buyer into such Villanueva Viuda de Riosa 56 Phil 677).
contract reasonable under the What is important is the delivery
circumstances of all the land included in the boundaries.
2. To give notice to buyer regarding
necessity of insuring the goods DOUBLE SALE (Art. 1544)
PAYMENT OF THE PURCHASE PRICE Requisites: VOCS
GENERAL RULE: The seller is not bound two or more transactions must constitute
to deliver the thing sold unless the valid sales;
purchase price has been paid. they must pertain exactly to the same
EXCEPTION: The seller is bound to object or subject matter;
deliver even if the price has not been they must be bought from the same or
paid, if a period of payment has been immediate seller; AND
fixed. two or more buyers who are at odds over
the rightful ownership of the subject
Sale of Real Property by Unit matter must represent conflicting
interests.
Entire area stated in the contract
must be delivered
Rules of preference:
When entire area could not be 1. Personal Property
delivered, vendee may: a. first possessor in good faith
1. Enforce the contract 2. Real Property
with the corresponding decrease in price a. first registrant in good
2. Rescind the sale: faith
a. If the lack in area is at b. first possessor in good
least 1/10 than that stated faith
or stipulated c. person with oldest title in
b. If the deficiency in quality good faith
specified in the contract
exceeds 1/10 of the price NOTES:
agreed upon Purchaser in Good Faith – one who
c. If the vendee would not buys the property of another without
have bought the immovable had he known of notice that some other person has a
its smaller area of inferior quality right to or interest in such property
irrespective of the extent of lack of area or and pays a full and fair price for the
quality same at the time of such purchase or
before he has notice of the claim or
Sale for a Lump Sum (A Cuerpo Cierto) interest of some other person in the
property (Veloso vs. CA).

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

Registration requires actual perfection of a contract and a condition

recording; if the property was never imposed merely on the performance of
really registered as when the an obligation. The failure to comply with
registrar forgot to do so although he the first condition would prevent the
has been handed the document, juridical relation itself from coming into
there is no registration. existence, while failure to comply with
Possession is either actual or the second merely gives the option
constructive since the law made no either to refuse or proceed with the sale
distinction (Sanchez vs. Ramos 40 or to waive the condition.
Phil614)
The mere fact that the second
Possession in Art.1544 includes not
contract of sale was perfected in
only material but also symbolic
good faith is not sufficient if, before
possession (Ten Forty Realty vs.
title passes, the second vendee
Cruz, 10 Sept. 2003.)
acquires knowledge of the first
Title means title because of sale, transaction. The good faith or
and not any other title or mode of innocence of the posterior vendee
acquiring property (Lichauco vs. needs to continue until his contract
Berenguer 39 Phil 642) ripens into ownership by tradition or
Hernandez vs. Katigbak Rule: When registration. (Palanca vs. Dir. Of
the property sold on execution is Lands, 46 PHIL 149)
registered under Torrens, registration
is the operative act that gives validity
to the transfer or creates a lien on the
land, and a purchaser on execution
EFFECT IF BUYER HAS ALREADY SOLD
sale is not required to go behind the THE GOODS:
registry to determine the conditions of
General Rule: The unpaid seller’s right
the property. Exception: Where the
to lien or stoppage in transitu remains
purchaser had knowledge, prior to or
even if buyer has sold the goods.
at the time of the levy, of such
Except:
1) When the seller has given consent
previous lien or encumbrance, his
thereto, or
knowledge is equivalent to
2) When the buyer is a purchaser in good
registration.
faith for value of a negotiable document of
title.
CONDITION
Effect of Non-fulfillment of Condition WARRANTY
1. If the obligation of either a statement or representation made
party is subject to any condition and such
condition is not fulfilled, such party may either: by the seller of goods,
a. refuse to proceed with contemporaneously and as a part of
the contract the contract of sale, having
b. proceed with the reference to the character, quality,
contract , waiving the or title of the goods, and by which
performance of the he promises or undertakes to insure
condition. that certain facts are or shall be as
2. If the condition is in the he then represents.
nature of a promise that it should happen,
the non-performance of such condition may Kinds:
be treated by the other party as breach of 1. EXPRESS – any affirmation of fact or any
warranty. promise by the seller relating to the thing if
the natural tendency of such affirmation or
NOTE: A distinction must be made
promise is to induce the buyer to purchase
between a condition imposed on the the same and if the buyer purchases the thing
relying thereon
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

at the instance of the vendee;

NOTE: A mere expression of opinion, no AND
matter how positively asserted, does not 5. no waiver of warranty by the
import a warranty unless the seller is an vendee.
expert and his opinion was relied upon
by the buyer. Vendor's liability shall consist of:
1. Total eviction: (VICED)
2. IMPLIED - that which the law derives
by implication or inference from the nature
a. Value of the thing at the time
of eviction;
of the transaction or the relative situation or
circumstances of the parties, irrespective of b. Income or fruits if he has
any intention of the seller to create it. been ordered to deliver them to the party
a. Warranty against eviction who won the suit;
b. Warranty against hidden c. Costs of the suit;
defects d. Expenses of the contract;
c. Warranty as to Fitness AND
and Merchantability e. Damages and interests if the
NOTE: An implied warranty is a natural, sale was in bad faith.
not an essential element of a contract,
and is deemed incorporated in the 2. Partial eviction:
contract of sale. It may however, be a. to enforce vendor’s liability
waived or modified by express for eviction (VICED);
stipulation. (De Leon) OR
There is no implied warranty as to the b. to demand rescission of
condition, adaptation, fitness or
contract.
suitability or the quality of an article
sold as a second-hand article. But such Question: Why is rescission not a remedy
articles might be sold under such in case of total eviction?
circumstances as to raise an implied Answer: Rescission contemplates that
warranty.
the one demanding it is able to return
* A certification issued by a vendor that whatever he has received under the
a second-hand machine was in A-1 condition contract. Since the vendee can no longer
is an express warranty binding on the vendor. restore the subject-matter of the sale to
(Moles vs. IAC [1989]) the vendor, rescission cannot be carried
out.
A. Warranty against eviction
Warranty in which the seller * The suit for the breach can be directed only
guarantees that he has the right to against the immediate seller, not sellers of
sell the thing sold and to transfer the seller unless such sellers had promised to
ownership to the buyer who shall not warrant in favor of later buyers or unless the
be disturbed in his legal and immediate seller has expressly assigned to
peaceful possession thereof. the buyer his own right to sue his own seller.
NOTE: The disturbance referred to in
Elements: the case of eviction is a disturbance in
1. vendee is deprived, in law which requires that a person go to
whole or in part, of the thing purchased; the courts of justice claiming the thing
2. the deprivation is by sold, or part thereof and invoking
virtue of a final judgment; reasons. Mere trespass in fact does not
3. the judgment is based on give rise to the application of the
a prior right to the sale or an act imputable doctrine of eviction.
to the vendor;
4. the vendor was summoned Vendor’s liability is waivable but any
in the suit for eviction stipulation exempting the vendor
from the obligation to answer for
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

eviction shall be void if he acted in 3. it must Exist at the time of the sale;
bad faith. 4. vendee must give Notice of the
Kinds of Waiver: defect to the vendor within a reasonable
a. Consciente – voluntarily time;
made by the vendee without 5. action for rescission or reduction of
theknowledgeand price must be brought within the proper
assumption of the risks of Period (within 6 mos. from delivery of the
eviction thing or 40 days from date of delivery in case
NOTE: vendor shall pay only the of animals); and
value which the thing sold had at 6. no Waiver of the warranty.
the time of eviction
b. Intencionada – made by the Remedies of the Vendee:
vendee with knowledge of a. Accion redhibitoria (rescission)
the risks of eviction and b. Accion quanti minoris (reduction of
assumption of its the price)
consequences NOTES:
EFFECT: vendor not liable Hidden faults or defects pertain only
NOTE: Every waiver is presumed to be to those that make the object unfit
consciente. To consider it intencionada, for the use for which it was intended
it must be accompanied by some at the time of the sale.
circumstance which reveals the This warranty in Sales is applicable in
vendor’s knowledge of the risks of
Lease (Yap vs. Tiaoqui 13Phil433)
eviction and his intention to submit to
Effect of loss of thing on account of
such consequences.
hidden defects:
WHERE IMMOVABLE SOLD ENCUMBERED 1. If vendor was aware of hidden defects,
WITH NON-APPARENT BURDEN he shall bear the loss and vendee shall have
1. Right of vendee the right to recover: (PED)
a) recission, or a. the price paid
b) indemnity b. expenses of the contract
c. damages
2. When right cannot be exercised: 2. If vendor was not aware, he shall be
a) if the burden or servitude is obliged to return: (PIE)
apparent a. price paid
b) if the non-apparent burden or
b. interest thereon
servitude is registered
c) if vendee had knowledge of the c. expenses of the contract if
encumbrance, whether it is registered or not paid by the vendee
3. When action must be brought
- within ONE YEAR from the Effect if the cause of loss was not the
execution of the deed of sale hidden defect
If the thing sold had any hidden
B. Warranty against hidden defects fault at the time of the sale, and
Warranty in which the seller should thereafter be lost by a (1)
guarantees that the thing sold is free fortuitous event OR (2) through the
from any hidden faults or defects or fault of the vendee:
any charge or encumbrance not the vendee may demand of the
declared or known to the buyer. vendor the price which he paid
less the value of the thing at the
Elements: (SHENPW) time of its loss.
NOTE: the difference between the
1. defect must be Serious or
price paid and the value of the thing
important;
2. it must be Hidden;
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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at the time of its loss represents the 3. Sale by virtue of authority in fact or law
damage suffered by the vendee and
the amount which the vendor Caveat Venditor (“Let the seller
enriched himself at the expense of beware”): the vendor is liable to the
the vendee vendee for any hidden faults or defects
If the vendor acted in bad faith: in the thing sold, even though he was not
vendor shall pay damages to the aware thereof.
vendee
Caveat Emptor (“Let the buyer
C. Implied Warranties of Quality beware”): requires the purchaser to be
Warranty of Fitness aware of the supposed title of the vendor
Warranty in which the seller and one who buys without checking the
guarantees that the thing sold is vendor’s title takes all the risks and losses
reasonably fit for the known consequent to such failure.
particular purpose for which it was
acquired by the buyer RULES IN CASE OF SALE OF ANIMALS
1. When two or more animals have been sold
at the same time and the redhibitory defect
GENERAL RULE: There is no implied is in one, or some of them but not in all, the
warranty as to the quality or fitness for general rule is that the redhibition will not
any particular purpose of goods under a affect the others without it. It is immaterial
contract of sale whether the price has been fixed for a lump
EXCEPTIONS: sum for all the animals or for a separate price
1. Where the buyer, expressly or for each.
by implication manifests to the 2. No warranty against hidden defects of
seller the particular purpose for animals sold at fairs or at public auctions, or
which the goods are required of livestock sold as condemned. This is based
on the assumption that the defects must have
2. Where the buyer relies been clearly known to the buyer.
upon the seller’s skill or judgment 3. Sale of animals shall be void when:
a) animals sold are suffering from
Warranty of Merchantability contagious disease
Warranty in which the seller b) if the use or service for which they are
guarantees, where the goods were acquired has been stated in the contract, and
bought by description, that they are they are found to be unfit therefor
reasonably fit for the general 4. Limitation of the action: 40 days from the
purpose for which they are sold date of their delivery to the vendee
It requires identity between what is 5. Vendor shall be liable if the animal
described in the contract AND what should die within 3 days after its purchase if
is tendered, in the sense that the the disease which caused the death existed
latter is of such quality to have some at the time of the contract
value
OBLIGATIONS OF THE VENDEE:
Instances where implied warranties are A. Principal Obligations:
inapplicable: 1. To accept delivery
1. As is and where is sale - vendor 2. To pay the price of the thing sold in legal
makes no warranty as to the quality or tender unless another mode has
workable condition of the goods, and that the been agreed upon
vendee takes them in the condition in which NOTE: A grace period granted the vendee
they are found and from the place where in case of failure to pay the amount/s due
they are located. is a right not an obligation.
2. Sale of second-hand articles
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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The grace period must not be likened to 3. If there is no stipulation as to the time
an obligation, the non-payment of and place of payment and delivery, the
which, under Article 1169 of the Civil vendee is bound to pay at the time and place
Code, would still generally require of delivery
judicial or extra-judicial demand before 4. In the absence of stipulation as to the
“default” can be said to arise (Bricktown place of delivery, it shall be made wherever
Dev’t Corp vs. Amor Tierra Dev’t Corp. the thing might be at the moment the
57SCRA437) contract was perfected (Article 1251)

B. Other Obligations
5. If only the time for delivery has been
fixed in the contract, the vendee is required
1. To take care of the goods without
to pay even before the thing is delivered to
the obligation to return, where the goods are
him; if only the time for payment has been
delivered to the buyer and he rightfully fixed, the vendee is entitled to delivery even
refuses to accept before the price is paid by him (Article 1524)
NOTES: Ways of accepting goods:
The buyer in 1. Express acceptance
such a case is in the position of a 2. Implied acceptance
bailee who has had goods thrust
upon him without his assent. He a. When buyer does an act which only
an owner can do,
has the obligation to take
b. Failure to return goods after
reasonable care of the goods but
nothing more can be demanded reasonable lapse of time
of him.
NOTES:
The goods in
the buyer’s possession under The retention of goods is strong
these circumstances are at the evidence that the buyer has
seller’s risk accepted ownership of the goods.
2. To be liable as a depositary if he Delivery and acceptance are two
voluntarily constituted himself as such separate and distinct acts of
3. To pay interest for the period different parties
between delivery of the thing and the Delivery is an act of the
payment of the price in the following cases: vendor and one of the vendor’s
a. Should it have been stipulated obligations; vendee has nothing
b. Should the thing sold and to do with the act of delivery by
delivered produce fruits or income the vendor
c. Should he be in default, from Acceptance is an
the time of judicial or extra-judicial demand obligation of the vendee;
for the payment of the price acceptance cannot be regarded
as a condition to complete
Pertinent Rules: delivery;
1. The vendor is not required to deliver seller must comply with
the thing sold until the price is paid nor the the obligation to deliver
vendee to pay the price before the thing is although there is no acceptance
delivered in the absence of an agreement to yet by the buyer
the contrary (Article 1524). Acceptance by the buyer may
2. If stipulated, the vendee is bound to precede actual delivery; there may
accept delivery and to pay the price at the be actual receipt without
time and place designated; acceptance and there may be
acceptance without receipt

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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Unless otherwise agreed upon, 5. if the vendee has fully paid the price
acceptance of the goods by the REMEDIES FOR BREACH OF CONTRACT
buyer does not discharge the seller
from liability for damages or other A. Remedies of the seller
legal remedy like for breach of any 1. Action for payment of the price (Art.
promise or warranty 1595)
2. Action for damages for non-acceptance of
When vendee may suspend payment of the goods (Art. 1596)
the price: 3. Action for rescission (Art. 1597)
1. If he is disturbed in the possession or B. Remedies of the buyer
ownership of the thing bought 1. Action for specific performance (Art.
2. If he has well-grounded fear that his 1598)
possession or ownership would be disturbed 2. Action for rescission or damages for
by a vindicatory action or foreclosure of breach of warranty (Art 1599)
mortgage
A. REMEDIES OF THE SELLER FOR
NOTES: BREACH OF CONTRACT
If the thing sold is in the possession of IN CASE OF MOVABLES
the vendee and the price is already in 1. Ordinary Remedies
the hands of the vendor, the sale is a a. Movables in General – Failure
consummated contract and Article of the vendee to appear to receive delivery
1590 is no longer applicable. Article or, having appeared, failure to tender the
1590, presupposes that the price or price at the same time, unless, a longer
any part thereof has not yet been paid period for its payment has been stipulated
and the contract is not yet action to rescind the sale
consummated. (Art. 1593)
Under Article 1590, the vendee has b. Sale of Goods –
no cause of action for rescission action for the price (Art.
before final judgement, otherwise 1595)
the vendor might become a victim of
action for damages (Art.
machinations between the vendee
and the third person 1596)
2. Unpaid Seller
Disturbance must be in possession
Types:
and ownership of the thing acquired
a. The seller of the goods who
If the disturbance is caused by the
has not been paid or to whom the price has
existence of non-apparent servitude,
not been tendered
the remedy of the buyer is rescission,
not suspension of payment. b. The seller of the goods, in
case a bill of exchange or other negotiable
instrument has been received as conditional
When vendee cannot suspend payment payment, AND the condition on which it was
of the price even if there is received has been broken by reason of the
disturbance in the possession or dishonor of the instrument, insolvency of the
ownership of the thing sold: buyer or otherwise.
1. if the vendor gives security for the Remedies:
return of the price in a proper case 1. Possessory lien over the
2. if it has been stipulated that goods
notwithstanding any such 2. Right of stoppage in transitu
contingency, the vendee must make after he has parted with
payment (see Article 1548 par.3)
3. if the vendor has caused the
disturbance or danger to cease
4. if the disturbance is a mere act of
trespass
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

the possession of the goods and 3. Foreclosure of the chattel

the buyer becomes insolvent mortgage on the thing sold if vendee shall
3. Special Right of resale have failed to pay two or more installments.
4. Special Right to rescind In this case, there shall be no further action
the sale against the purchaser to recover unpaid
5. Action for the price balance of the price.
6. Action for damages
NOTES:
3. Article 1484 or Recto Law Further recovery barred only from
Remedies of vendor in sale of the time of actual sale at public auction
personal property by installments conducted pursuant to foreclosure
Requisites: (Macondray vs. Tan.)
1. Contract of sale Other chattels given as security
2. Personal property cannot be foreclosed if they are not
3. Payable in installments subject of the installment sale (Ridad vs.
4. In the case of the second Filipinas investment and Finance Corp.
and third remedies, that there has been a GR 39806, Jan. 28, 1983)
failure to pay two or If the vendor assigns his right to a
more installments financing company, the latter may be
NOTE: Apply likewise to contracts regarded as a collecting agency of the
purporting to be leases of personal vendor and cannot therefore recover any
property with option to buy deficiency from the vendee (Zayas vs.
Art. 1484 does not apply to a sale: Luneta Motors Co.)
1. Payable on straight When the vendor assigns his credit to
terms (partly in cash and partly in one term) another person, the latter is likewise
2. Of Real property bound by the same law. Accordingly,
Remedies: when the assignee forecloses on the
1. Specific performance upon mortgage, there can be no further
vendee’s failure to pay recovery of the deficiency and the
NOTE: Does not bar full recovery for vendor-mortgagee is deemed to have
judgment secured may be executed renounced any right thereto (Borbon II
on all personal and real properties of vs. Servicewide Specialist, Inc.
the buyer which are not exempt 258SCRA658)
from execution (Palma v. CA.) NOTE: However, Article 1484(3) does
2. Rescission of the sale if NOT bar one to whom the vendor has
vendee shall have failed to pay two or more assigned on with a recourse basis his
installments credit against the vendee from
NOTES: recovering from the vendor the
Nature of the remedy – which assigned credit in full although the
requires mutual restitution – bars vendor may have no right of recovery
further action on the purchase against the vendee for the deficiency
price (Nonato vs. IAC.) (Filipinas Invest. & Finance Corp. vs.
GENERAL RULE: cancellation of Vitug, Jr. 28SCRA658)
sale requires mutual restitution,
that is all partial payments of NOTE: Remedies are alternative and
price or rents must be returned exclusive
EXCEPTIONS: a stipulation that
the installments or rents paid IN CASE OF IMMOVABLES
shall not be returned to the 1. Ordinary Remedies
vendee or lessee shall be valid a. In case of anticipatory breach
insofar as the same may not be –
unconscionable under the rescission (Article 1591)
circumstan-ces (Article 1486).
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

b. Failure to pay the 2. Actual cancellation can only

purchase price – take place after 30 days from receipt by the
rescission upon judicial buyer of the notice of cancellation OR demand
or notarial demand for for rescission by a notarial act AND upon full
rescission (Article 1592) payment of the cash surrender value to the
the vendee may pay, buyer (Olympia Housing vs. Panasiatic,
even after the expiration of 16 January 2003.)
the period, as long as no NOTE: The seller shall refund to
demand for rescission has the buyer the cash surrender value
been made upon him of the payments on the property
NOTE: Article 1592 does not equivalent to 50% of the total
apply to: payments made. After five
1) Sale on instalment of real (5) years of installments, there
estate shall be an additional 5% every
2) Contract to sell year but not to exceed 90% of
3) Conditional sale the total payments made
4) Cases covered by RA 6552: 3. The buyer shall have the
Realty Installment buyer protection act right to sell his rights or assign the same to
another person OR to reinstate the contract
2. R.A. No. 6552 or Maceda Law by updating the account during the grace
An Act to Provide period and before actual cancellation of the
Protection to buyers of Real Estate contract
on Installment Payments 4. The buyer shall have the right
Law governing sale or to pay in advance any installment or the full
financing of real estate on unpaid balance of the purchase price any time
installment payments without interest and to have such full payment
Requisites: of the purchase price annotated in the
certificate of title covering the property.
1. transactions or contracts
involving the sale OR financing of real estate on B. If Buyer has paid less than 2 years
installment payments, including residential of installments
condominium apartments; and 1. The seller shall give the buyer a grace
2. buyerdefaultsin period of NOT less than 60 days from the date
payment of succeeding the installment became due. If the buyer fails
installments. to pay the installments due at the expiration of
the grace period, the seller may cancel the
Rights of the buyer: contract after 30 days from receipt by the
A. If Buyer has paid at least two buyer of the notice of cancellation or the
(2) years of installments demand for rescission of contract by a notarial
1. The buyer must pay, act.
without additional interest, the unpaid
installments due within the total grace period 2. Same No. 3 and 4 paragraph A
earned by him. There shall be one (1) month above
grace period for every one
(1) year of installment payments NOTE: Down payments, deposits or
made options on the contract shall be included
NOTE: This right shall be in the computation of the total number
exercised by the buyer ONLY of installment payments made
once in every 5 years of the life
of the contract AND its
extensions.
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

6. Seller must bear the expenses

Remedies of Unpaid Seller of delivery of the goods after the exercise of
I. Possessory Lien the right
When may be exercised:
1. Where the goods have GOODS ARE CONSIDERED IN TRANSITU:
been sold without any stipulation as to credit 1. after delivery to a carrier or other bailee
2. When the goods have and before the buyer or his agent takes
been sold on credit, but the term of credit delivery of them; and
has expired 2. If the goods are rejected by the buyer,
3. Where the buyer and the carrier or other bailee continues in
becomes insolvent possession of them
When lost:
GOODS ARE NO LONGER CONSIDERED IN
1. Delivery of the goods to
TRANSITU:
a carrier or bailee for the purpose of
1. after delivery to the buyer or his agent
transmission to the buyer without reserving
in that behalf;
ownership or right of possession
2. if the buyer or his agent obtains
2. When the buyer lawfully
possession of the goods at a point before the
obtains possession of the goods
destination originally fixed;
3. By waiver of the lien
3. if the carrier or the bailee
NOTE: Possessory lien is lost after the
acknowledges to hold the goods on behalf of
seller loses possession but his lien as an
the buyer; and
unpaid seller remains; hence he is still an
4. if the carrier or bailee wrongfully refuses
unpaid creditor with respect to the price
to deliver the goods to the buyer
of specific goods sold. His preference can
only be defeated by the governments claim
Effects of the exercise of the right
to the specific tax on the goods themselves
(Arts. 2247 and 2241). 1. The goods are no longer in transit.
NOTE: The bringing of an action to 2. The contract of carriage ends; instead
recover the purchase price is not one of the carrier now becomes a mere bailee, and
the ways of losing the possessory lien. An will be liable as such.
unpaid seller does not lose his lien by 3. The carrier should not deliver anymore to
reason that he has obtained a money the buyer or the latter’s agent; otherwise he
judgement or decree for the price of will clearly be liable for damages.
goods (Art. 1529, last paragraph). 4. The carrier must redeliver to, or
according to the directions of the seller.
II. Stoppage of goods in transitu
WAYS OF EXERCISING THE RIGHT TO
Requisites:
STOP:
1. Seller must be unpaid 1. By taking actual possession of the goods
2. Buyer must be insolvent 2. By giving notice of his claim to the
3. Goods must be in transit carrier or bailee
4. Seller must either:
a. actually take possession III. Special Right of Resale
of the goods sold OR May be exercised only when the
b. give notice of his claim unpaid seller has either a right of
to the carrier or other person in possession lien OR has stopped the goods in
5. Seller must surrender transitu AND under ANY of the
the negotiable document of title, if any, following conditions:
issued by the carrier or bailee
1. Where the goods are
perishable in nature

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

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MEMORY AID IN CIVIL LAW

2. Where the right to resell 3. If the goods are not yet identified at
is expressly reserved in case the buyer should the time of the contract or subsequently
make a default B. REMEDIES OF THE BUYER FOR BREACH
3. Where the buyer delays OF CONTRACT
in the payment of the price for an
unreasonable time 1. Action for specific performance (Art.
1598)
IV. Rescission W
Types: here the seller has broken the
1. Special Right to Rescind contract to deliver specific or
Under Art. 1534 – If the seller has either the ascertained goods
right of lien OR a right to stop the goods in T
transitu AND under either of 2 situations: he judgment or decree may be
a. Where the right to unconditional, or upon such terms
rescind on default has been expressly and conditions as to damages,
reserved payment of the price and otherwise
b. Where the buyer has as the court may deem just
been in default for an unreasonable time
2. Under Art. 1597 2. Remedies of buyer for breach of
(“technical rescission”) warranty by seller (Art. 1599):
1. Recoupment – accept the goods and set
V. Action for the price up the seller’s breach to reduce or extinguish
When may be exercised: the price
2. Accept the goods and maintain an action
1. Where the ownership has for damages for breach of warranty
passed to the buyer AND he wrongfully 3. Refuse to accept the goods and maintain
neglects OR refuses to pay for the price an action for damages for breach of warranty
2. Where the price is 4. Rescind the contract by returning or
payable on a day certain AND he wrongfully offering the return of the goods, and
neglects OR refuses to pay for the price, recover the price of any part thereof
irrespective of the delivery or transfer of title NOTE: These are alternative remedies.
3. Where the goods cannot
readily be resold for a reasonable price AND When rescission by buyer not allowed:
the buyer wrongfully refuses to accept them 1. if the buyer accepted the goods knowing
even before the ownership of the goods has of the breach of warranty without protest
passed, if Article 1596 is inapplicable. 2. if he fails to notify the seller within a
reasonable time of his election to rescind
VI. Action for damages 3. if he fails to return or offer to return the
When may be exercised: goods in substantially as good condition as
1. In case of wrongful neglect or they were in at the time of the transfer of
refusal by the buyer to accept or pay for the ownership to him
thing sold (Art. 1596 par.1)
EXTINGUISHMENT OF SALE
2. In an executory contract, where
1. Same causes as in all other obligations
the ownership in the goods has not passed,
2. Conventional Redemption
and the seller cannot maintain an action to
3. Legal Redemption
recover the price (Art 1595)
CONVENTIONAL REDEMPTION
The right which the vendor reserves
to himself, to reacquire the property
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

sold provided he returns to the NOTE: In the cases referred to in Arts.

vendee: 1602 and 1604, the apparent vendor may
b. the price of the sale; ask for the reformation of the
c. expenses of the contract; instrument.
d. any other legitimate payments Remedy of Reformation: To correct the
made therefore and; instrument so as to make it express the
e. the necessary and useful true intent of the parties.
expenses made on the thing sold; and
f. fulfills other stipulations which Redemption Period
may have been agreed upon. a. if there is an agreement: period
agreed upon cannot exceed 10 years
b. if no agreement as to the period: 4 years
A sale with conventional redemption is
from the date of the contract
deemed to be an equitable mortgage
c. the vendor who fails to repurchase the
in any of the following cases: (IPERTOD)
property within the period agreed upon may,
1. Unusually Inadequate purchase price; however, exercise the right to repurchase
within 30 days FROM the time final judgment
2. Possession by the vendor remains, as
was rendered in a civil action on the basis
lessee or otherwise;
that the contract was a true sale with right of
3. Extension of redemption period after repurchase
expiration; This refers to cases involving a
4. Retention by the vendee of part of transaction where one of the
the purchase price; parties contests or denies that
5. Vendor binds himself to pay the the true agreement is one of sale
Taxes of the thing sold; with right to repurchase; not to
6. Any Other case where the parties cases where the transaction is
really intended that the transaction should conclusively a pacto de retro
secure the payment of a debt or the sale. Example: Where a buyer a
performance of any obligation; or retro honestly believed that he
entered merely into an Equitable
7. When there is Doubt as to whether
Mortgage, not a pacto de retro
contract is contract of sale with right of
transaction, and because of such
repurchase or an equitable mortgage.
belief he had not redeemed
Equitable Mortgage within the proper period.
NOTE: Tender of payment is
One which lacks the proper
sufficient to compel redemption, but
formalities, form of words, or other
is not in itself a payment that
requisites prescribed by law for a
relieves the vendor from his liability
mortgage, but shows the intention of
to pay the redemption price (Paez
the parties to make the property
vs. Magno.)
subject of the contract as security
for a debt and contains nothing
impossible or contrary to law LEGAL REDEMPTION
(Cachola vs. CA 208SCRA496) The right to be subrogated, upon the
same terms and conditions stipulated
* When can there be presumption as to in the contract, in the place of one
Equitable Mortgage? who acquires a thing by (1) purchase
1) Parties must have entered into a or (2) dation in payment, or (3) by
contract denominated as a contract of sale any other transaction whereby
2) The intention of the parties was to ownership is transferred by onerous
secure an existing debt by way of mortgage title.
May be effected against movables or
immovables.

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

It must be exercised within thirty 3. Redemption of homesteads

(30) days from the notice in writing
by the vendor.\ 4. Redemption in tax sales
5. Redemption by an
agricultural tenant of land sold by the
NOTE: Written notice under Article 1623 landowner
is mandatory for the right of redemption
to commence (PSC vs. Sps. Valencia 19
August 2003.) ASSIGNMENT OF CREDIT
a contract by which the owner of a
BASIS OF LEGAL REDEMPTION: Not on credit transfers to another his rights
any proprietary right, which after the and actions against a third person in
sale of the property on execution, leaves consideration of a price certain in
the judgment debtor and vests in the money or its equivalent
purchaser, but on a bare statutory
privilege to be exercised only by the NOTE: Transfer of rights by assignment
persons named in the statute. takes place by the perfection of the
contract of assignment without the
Tender of payment is not necessary; necessity of delivering the document
offer to redeem is enough. evidencing the credit.
this rule does not apply to
PRE-EMPTION REDEMPTION negotiable documents and
1. arises before 1. arises after sale documents of title which are
sale governed by special laws.
2. no rescission 2. there can be
because no sale as rescission of Effects of Assignment:
yet exists original sale 1. transfers the right to collect the full
3. the action is 3. action is directedvalue of the credit, even if he paid a price
directed against against the buyer less than such value
the prospective
2. transfers all the accessory rights
seller
3. debtor can set up against the assignee all
Instances of legal redemption: the defenses he could have set up against the
A. Under the Civil Code (legal assignor
redemption):
Effect of payment by the debtor after
1. Sale of a co-owner of his
assignment of credit
share to a stranger (Article 1620)
1. Before Notice of the assignment
2. When a credit or other
incorporeal right in litigation is sold (Article Payment to the original
1634) creditor is valid and debtor shall
3. Sale of an heir of his be released from his obligation
hereditary rights to a stranger (Article 1088) 2. After Notice
4. Sale of adjacent rural Payment to the original
lands not exceeding one hectare (Article 1621) creditor is not valid as against
5. Sale of adjacent small the assignee
urban lands bought merely for speculation He can be made to pay
(Article 1622) again by the assignee
B. Under special laws:
1. An equity of redemption in Warranties of the assignor of credit:
cases of judicial foreclosures a. He warrants the existence of
2. A right of redemption in the credit
cases of extra-judicial b. He warrants the legality of
foreclosures the credit at the perfection of the contract

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

NOTE: There is no warranty as to the

solvency of the debtor unless it is
expressly stipulated OR unless the BARTER
insolvency was already existing and of
public knowledge at the time of the BARTER
assignment contract whereby one of the parties
binds himself to give one thing in
NOTE: The seller of an inheritance consideration of the other's promise
warrants only the fact of his heirship but to give another thing (Article 1638)
not the objects which make up his
inheritance. NOTE: Barter is similar to a sale with the
only difference that instead of paying a
Liabilities of the assignor of credit for price in money, another thing is given in
violation of his warranties lieu of the purchase price
1. Assignor in good faith
Liability is limited only PERFECTION and CONSUMMATION
to the price received and to the Perfected from the moment there is
expenses of the contract, and a meeting of minds upon the things
any other legitimate payments promised by each party in
by reason of the assignment consideration of the other
2. Assignor in bad faith
Liable not only for the Consummated from the time of
payment of the price and all the mutual delivery by the contracting
expenses but also for damages parties of the things promised

Legal Redemption in Sale or Credit or NOTES:

other incorporeal right in litigation Where the giver of the thing
Requisites: bartered is not the lawful owner
1. There must be a sale or assignment thereof, the aggrieved party cannot
of credit be compelled to deliver the thing
2. There must be a pending litigation at which he has promised and is also
the time of the assignment entitled to damages.
3. The debtor must pay the assignee: Where a party is evicted of the thing
a. price paid by him exchanged, the injured party is given
b. judicial cost incurred by him; the option, either to recover the
AND property he has given in exchange
c. interest on the price from the with damages or only claim an
date of payment indemnity for damages.
As to matters not provided for by the
4. The right must be exercised by the
provisions on barter, the provisions
debtor within 30 days from the date the
on sales will apply suppletorily
assignee demands (judicially or extra-
judicially) payment from him
BULK SALES LAW (Act No. 3952)
SALE OF CREDIT OR OTHER When Sale or Transfer in Bulk:
Any sale, transfer, mortgage, or
INCORPOREAL RIGHTS IN LITIGATION
assignment:
GENERAL RULE: Debtor has the right of
1. Of a stock of goods, wares, merchandise,
legal redemption in sale of credit or
provisions, or materials otherwise than in the
incorporeal rights in litigation
ordinary course of trade and the regular
EXCEPTIONS:
prosecution of business; or
a. Sale to a co-heir or co-
2. Of all or substantially all, of the business
owner
or trade; or
b. Sale to a co-owner
c. Sale to the possessor of
property in question
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

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MEMORY AID IN CIVIL LAW

3. Of all or substantially all, of the The remedy of the

fixtures and equipment used in the business creditor is not against the goods
of the vendor, mortgagor, transferor or but to prosecute the seller
assignor (section 2) criminally
2. With knowledge or imputed knowledge
When sale or transfer in bulk not of buyer
covered by Bulk Sales Law: The vendee accepts it at his peril
1. If the sale or transfer is in the The sale is valid only as between
ordinary course of trade and the regular the vendor and the vendee but
prosecution of business of the vendor; void against the creditors
2. If it is made by one who produces
and delivers a written waiver of the 3. With names of certain creditors
provisions of the Bulk Sales Act from his without notice are omitted from the list
creditors The sale is void as to such
3. If it is made by an executor, creditors, whether the omission
administrator, receiver, assignee in was fraudulent or not,
insolvency, or public officer, acting under 4. With respect to an innocent purchaser
judicial process (Section 8); and for a value from the original purchaser
4. If it refers to properties exempt An innocent purchaser for value
from attachment or execution (Rules of from the original purchaser is
Court, Rule 39, Section 12) protected
However if the circumstances are
Protection Accorded to Creditors by such as to bind the subsequent
Bulk Sales Law: purchaser with constructive
1. It requires the vendor, mortgagor, notice that the sale to the vendor
transferor or assignor to deliver to the (original purchaser) was
vendee, mortgagee, or to his or its agent or fraudulent, the property will be
representative a sworn written statement of liable in his hands to creditors of
names and addresses of all creditors to whom the original vendor
said vendor, etc. may have been indebted Effect of violation of law on Transfer:
together with the amount due or to be due 1. As between the parties
(Section 3) The Bulk Sales Law does not in
any way affect the validity of
2. It requires the vendor, mortgagor,
the transfer as between the
transferor or assignor, at least 10 days before
intermediate parties thereto
the sale, transfer, mortgage, assignment to
A sale not in compliance with the
make a full detailed inventory showing the
Bulk Sales Law is valid against all
quantity and the cost of price of goods, and
to notify every creditor of the price terms persons other than the creditors.
and conditions of the sale, etc. (Section 5) 2. As against creditors
A purchaser in violation of the
Effects of False Statements in the law acquires no right in the
Schedule of Creditors: property purchased as against
1. Without knowledge of buyer the creditors of the seller
If the statement is fair His status is that of a trustee or
upon its face and the buyer has receiver for the benefit of the
no knowledge of its creditors of the seller; as such,
incorrectness and nothing to put he is responsible for the
him on inquiry about it, he will disposition of the property
be protected in its purchase
Remedies Available to creditors:
The proper remedy is one against
the goods to subject them to the
payment of the debt, such as
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
141

MEMORY AID IN CIVIL LAW

execution, attachment, garnishment, Goods which are

or by a proceeding in equity not necessary for life maintenance
An ordinary action against the and whose demand is generated in
purchaser to obtain money large part by the higher income
judgement will not lie, unless the groups
purchaser has sold or otherwise Shall include but
disposed of, or dealt with the not limited to: jewelry, branded or
property, so as to become personally designer clothing and footwear,
liable to creditors for value of it. wearing apparel, leisure and sporting
Acts Punished by Bulk Sales Law: goods, electronics and other
1. Knowingly or wilfully making or personal effects
delivering a statement required by the Act NOTE: A natural-born citizen of the
which does not include the names of all the Philippines who has lost his citizenship
creditors of the vendor, etc. with the correct but who resides in the Philippines shall
amount due or to become due or which
be granted the same rights as Filipino
contains any false or untrue statement; and
citizens
2. Transferring title to any stock of
goods, wares, merchandise, Foreign Equity Participation:
provisions or materials sold in bulk Foreign-owned partnerships,
without consideration or for nominal associations and corporations formed
consideration (Section 7) and organized under the laws of the
Philippines may, upon registration
RETAIL TRADE LIBERALIZATION ACT with SEC and DTI, or in case of
(RA 8762) Foreign-owned single proprietorship
with the DTI, engage or invest in
Retail Trade retail trade business, subject to the
Any act occupation or calling of following categories:
habitually selling direct to the 1. Category A:
generalpublicmerchandise, Paid-up capital of the
commodities or goods for equivalent in Philippine Peso of:
consumption, but the restrictions of < $2,500,000 US Dollars
this law shall not apply to the
Reserved exclusively for
following:
Filipino citizens and corporations
1. Sales by manufacturer, processor,
wholly owned by citizens
laborer, or worker, to the general public the
products manufactured, processed produced 2. Category B:
by him if his capital does not exceed Minimum paid-up capital
P100,000; of the equivalent in Philippine
2. Sales by a farmer or agriculturalist Peso of $2,500,000 US Dollars,
selling the products of his farm but <$7,500,000
3. Sales in restaurant operations by a May be wholly owned by
hotel owner or inn-keeper irrespective foreigners except for the first
of the amount of capital; provided two years after the effectivity of
that the restaurant is incidental to the this Act wherein foreign
hotel business; and participation shall be limited to
4. Sales which are limited only to not > 60% of total equity.
products manufactured, processed or 3. Category C:
assembled by a manufacturer through a single Paid-up capital of the
outlet, irrespective of capitalization equivalent in Philippine Peso of:
$7,500,000 US Dollars or more
High-End or Luxury Goods
May be wholly owned by
foreigners
NOTE: In no case shall the
investments for establishing a
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
142

MEMORY AID IN CIVIL LAW

store in Categories B and C be 2. 5 retailing branches or franchises in

less than the equivalent in operation anywhere around the world unless
Philippine Peso of: US $830,000 such retailer has at least 1 store capitalized
4. Category D: at a minimum of $25,000,000 US Dollars
Enterprises specializing in 3. 5-year track record in retailing; and
high-end or luxury products with 4. Only nationals from, or juridical entities
paid-up capital of the equivalent formed or incorporated in Countries which
in Philippine Peso of: $250,000 allow to engage in retail trade in the
US Dollars per store Philippines
May be wholly owned by
foreigners
PD 957 (SUBDIVISION AND
CONDOMINIUM BUYERS’ PROTECTIVE
NOTES:
DECREE
Foreign investor shall be required to
maintain in the Philippines the FULL Registration of Projects
amount of the prescribed minimum The registered owner of a parcel of
capital, UNLESS the foreign investor land who wishes to convert the same
has notified the SEC and the DTI of its into a subdivision project shall submit
intention to repatriate its capital and his subdivision plan to the HOUSING
cease operations in the Philippines AND LAND-USE REGULATORY BOARD,
Failure to maintain the full amount which shall act upon and approve the
of the prescribed minimum capital same, upon a finding that the plan
prior to notification of the SEC and complies with the Subdivision
the DTI shall subject the foreign Standards' and Regulations
investors to penalties or restrictions enforceable at the time the plan is
on any future trading submitted. The same procedure shall
activities/business in the Philippines be followed in the case of a plan for
a condominium project except that,
NOTE: Foreign Investors Acquiring Shares in addition, said Authority shall act
of Stock of existing retail stores whether or upon and approve the plan with
not publicly listed whose net worth is in respect to the building or buildings
excess of the Peso equivalent of US included in the condominium project
$2,500,000 may purchase only up to the in accordance with the National
maximum of 60% of the equity thereof Building Code (R.A. No. 6541).
within the first 2 years, and thereafter, The subdivision plan, as so approved,
they may acquire the remaining shall then be submitted to the Director
percentage consistent with the allowable of Lands for approval in accordance
foreign participation as herein provided with the procedure prescribed in
Section 44 of the Land Registration Act
NOTE: All retail Trade enterprises under (Act No. 496, as amended by R.A. No.
categories B and C in which foreign 440): Provided, that it case of complex
ownership exceeds 80% of equity shall subdivision plans, court approval shall
offer a minimum of 30% of their equity no longer be required. The
to the public through any stock condominium plan as likewise so
exchange in the Philippines within 8 approved, shall be submitted to the
years from the start of the operations Register of Deeds of the province or
city in which the property lies and the
Qualification of Foreign Retailers same shall be acted upon subject to
1. Minimum of $200,000,000 US Dollars the conditions and in accordance with
net worth in its parent corporation for the procedure prescribed in Section 4
Categories B and C and $50,000,000 net of the Condominium Act (R.A. No.
worth in its parent corporation for Categories 4726).
D
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

6. Does not conduct his business in

National Housing authority (now accordance with law or sound business
Housing and Land Use Regulatory principles.
Board) has the exclusive jurisdiction
to regulate the real estate trade and
business. LEASE
License to sell LEASE
Such owner or dealer to whom has consensual, bilateral, onerous, and
been issued a registration certificate commutative contract by virtue of
shall not, however, be authorized to which one person binds himself to
sell any subdivision lot or grant temporarily the use of the thing
condominium unit in the registered or to render some service to another
project unless he shall have first who undertakes to pay some rent.
obtained a license to sell the project Kinds of Leases (From the view point of
within two weeks from the the subject matter
registration of such project. 1. Lease of things
2. Lease of service
Exempt transactions 3. Lease of work
A license to sell and performance
bond shall not be required in any of NOTE: Since lease is consensual and is
the following transactions: not imposed by law, only the lessor has
1. Sale of a subdivision lot resulting the right to fix the rents. However, the
from the partition of land among co-owners increasing of the rent is not an absolute
and co-heirs. right on the part of the lessor.
2. Sale or transfer of a subdivision lot
by the original purchaser thereof and any Characteristics or Requisites for Lease
subsequent sale of the same lot. of Things
3. Sale of a subdivision lot or a 1. Consensual
condominium unit by or for the account of a 2. Principal
mortgagee in the ordinary course of business 3. Nominate
when necessary to liquidate a bona fide debt. 4. Purpose is to allow enjoyment or use
of a thing (the person to enjoy is the lessee;
Grounds for Revocation of registration the person allowing the enjoyment by
certificate and license to sell of owners another is the lessor
or dealers 5. Subject matter must be within the
1. Is insolvent; or commerce of man
2. Has violated any of the provisions of 6. Purpose to which the thing will be
this Decree or any applicable rule or devoted should not be immoral
regulation of the Authority, or any 7. Onerous (there must rent or price
undertaking of his/its performance bond; or certain)
3. Has been or is engaged or is about to 8. Period is Temporary (not perpetual,
engage in fraudulent transactions; or hence, the longest period is 99 years)
4. Has made any misrepresentation in 9. Period is either definite or indefinite
any prospectus, brochure, circular or other If no term is fixed, we should
literature about the subdivision project or apply Art.1682 (for rural leases)
condominium project that has been and Art. 1687 (for urban leases)
distributed to prospective buyers; or
5. Is of bad business repute; or If the term is fixed but
indefinite, the court will fix the

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
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MEMORY AID IN CIVIL LAW

term under the law of 2. lessor has to 2. lessor has to

obligations and contracts deliver the perform some
10. Lessor need not be the owner thing leased work or service
3. in case of 3. in case of breach,
NOTE: A usufructuary may thus lease breach, there no action for
the premises in favor of a stranger, can be an action specific
such lease to end at the time that for specific performance
the usufruct itself ends performance

Rent
Lease of Contract for a
The compensation either in
money, provisions, chattels, or Services Piece of Work
labor, received by the lessor (locatio (locatio operas)
from the lessee. operatum)
1. the 1. the important
object is the
NOTES: important
When a student boards and lodges in object is the work done
a dormitory, there is no contract of labor
lease. The contract is not designated performed by
specifically in the Civil Code. It is an the lessor
innominate contract. It is however, 2. the result is 2. the result is
believed that the contract can be generally generally
denominated as the contract of not important;
board and lodging. important, generally, the
hence the price is not
There is a contract of lease when the
laborer is payable until
use and enjoyment of a safety entitled to the work is
deposit box in a bank is given for a be paid even completed, and
price certain. This is certainly not a if there is said price
contract of deposit. destruction cannot be
A lease of personal property with of the work lawfully
option to buy (at a nominal amount) through demanded if
fortuitous the work is
at the end of the lease can be
event destroyed
considered a sale. before it is
finished and
accepted

LEASE SALES
1. only use or 1. ownership is
Lease of Agency
enjoyment is transferred
transferred Services
2. transfer is 2. transfer It is based on It is based on
temporary permanent employment – representation –
3. lessor need not 3. seller must be the lessor of agent represents his
be the owner the owner at the services does not principal and enters
time the property represent his into juridical acts.
is delivered
employer nor
4. the price of the 4. usually, the
object, selling price does he execute
distinguished from mentioned juridical acts.
the rent, is usually Principal Preparatory
not mentioned contract contract

Rule for Lease of Consumable Goods

Lease of Lease of Services GENERAL RULE: Consumable goods
Things cannot be the subject matter of a
1. object of 1. object contract of lease of things.
contract is a some work Why? To use or enjoy hem, they will have
thing service to be consumed. This cannot be done by a
lease since ownership over them is not
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
145

MEMORY AID IN CIVIL LAW

transferred to him by the contract of

lease. LEASE
EXCEPTIONS: 1. there are two 1. there is only one
a. If they are merely leases and two juridical
exhibited distinct juridical relationship, that of
b. If they are accessory to relationships the lessor and the
an industrial establishment although assignee, who is
immediately converted into a
RECORDING OF LEASE OF PERSONAL
connected and lessee
PROPERTY
related to each
GENERAL RULE: Lease of real property
other
is personal right
2. the personality 2. the personality of
EXCEPTIONS: Lease partakes of the
of the lessee does the lessee
nature of real right if:
a. Lease of real property is not disappear disappears
more than 1 year
b. Lease of real property is 3.the lessee does 3. the lessee
registered regardless of duration not transmit transmits absolutely
absolutely his his rights to the
NOTE: Lease of personal property cannot rights and assignee
be registered. To be binding against obligations to the
third persons, the parties must execute a sublessee
public instrument. 4. the sublessee, 4. the assignee has a
generally, does direct action against
* Lease may be made orally, but if the not have any the lessor
lease of Real Property is for more than 1 direct action
year, it must be in writing under the Statue against the lessor
of Frauds.
RIGHTS OF LESSOR IF SUBLEASE
Persons Disqualified to be Lessees
PROHIBITED BUT ENTERED INTO BY
Because Disqualified to Buy
LESSEE:
1. A husband and a wife cannot lease to 1) Rescission and damages, or
each other their separate properties except: 2) Damages only (Contract will be allowed to
a. if separation of property was remain in force)
agreed upon 3) Ejectment
b. if there has been judicial
separation of property Instances when sublessee is liable to
Persons referred to in Art. 1491 are the lessor:
disqualified because of fiduciary a. All acts which refer to the
relationships use and preservation of the thing leased in
the manner stipulated between the lessor
SUBLEASE and the lessee
A separate and distinct contract of b. The sublessee is subsidiarily
lease wherein the original lessee liable to the lessor for any rent due from the
becomes a sublessor to a sublessee. lessee.
Allowed unless expressly prohibited. NOTE: The sublessee shall not be
The sublessee is subsidiarily liable for responsible beyond the amount of rent
due from him.
any rent due. The lessor has an
accion directa against the sublessee Accion Directa: direct action which the
for unpaid rentals and improper use lessor may bring against a sublessee who
of the object. misuses the subleased property.

SUBLEASE ASSIGNMENT OF OBLIGATIONS OF THE LESSOR (DnM)

a. Delivery of the object
(cannot be waived)
b. Making of necessary
repairs
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),
Ma. Ricasion Tugadi (Conflicts of Law)
San Beda College of Law
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MEMORY AID IN CIVIL LAW

c. Maintenance in peaceful Alternative remedies of Aggrieved

and adequate possession party (Lessor/Lessee) in case of Non-
fulfillment of duties:
OBLIGATIONS OF THE LESSEE (R2EN2U) 1. Rescission and damages
a. to pay rent 2. Damages only, allowing the contract to
remain in force – Specific Performance
b. to use thing leased as a NOTE: Damages Recoverable in ejectment
diligent father of a family, devoting it to the cases are the rents or the fair rental value
use stipulated of the premises. The following cannot be
c. to pay expenses for the successfully claimed:
deed of lease 1. Profits plaintiff could have
d. to notify the lessor of earned were it not for the possible entry or
usurpation or untoward acts unlawful detainer
e. to notify the lessor of 2. Material injury to the
need for repairs premises
f. to return the property 3. Actual, moral, or exemplary
leased upon termination of the lease damages

Effect of Destruction of the Thing Immediate termination of lease under

Leased: Art. 1660 applies:
1. Total destruction by a fortuitous 1. only to dwelling place or any other
event building intended for human habitation
Lease is extinguished 2. even if at the time the contract was
perfected, the lessee knew of the
dangerous condition or waived the
right to rescind on account of this
condition
2. Partial destruction Rules on Alteration of the Form of the
Lease
a. Proportional reduction of the
rent, or The Lessor can alter provided there
b. Rescission of the lease is no impairment of the use to which
When lessee may suspend payment of the thing is devoted under the terms
rent: of the lease
1. lessor fails to undertake necessary Alteration can also be made by the
repairs Lessee so long as the value of the
2. lessor fails to maintain the lessee in property is not substantially impaired
peaceful and adequate enjoyment of the
property leased Rules in case of Urgent Repairs
The lessee is obliged to tolerate the
NOTE: “Suspend”- for the intervening work although it may be very
period, the lessee does not have to pay annoying to him and although during
the rent. the same time he may be deprived
of a part of the premises
EFFECTIVITY OF THE SUSPENSION: 1. If repairs last for more than 40 days:
The right begins: Lessee cannot act for reduction of rent or
a) In the case of repairs, from the time rescission
he made the demand for said repairs, and the 2. If 40 days or more: lessee can ask for
demand went unheeded. proportionate reduction
b) In the case of eviction, from the time NOTE: In either case, rescission may be
the final judgment for eviction becomes availed of if the main purpose is to
effective.

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
147

MEMORY AID IN CIVIL LAW

provide a dwelling place and the a. If rent is paid daily: lease is from day
property becomes uninhabitable. to day
b. If rent is paid weekly: lease is from
Effects if Lessor fails to make Urgent week to week
Repairs c. If rent is paid monthly: lease is from
1. Lessee may order repairs at the month to month
lessor’s cost d. If rent is paid yearly: lease is from
2. Lessee may sue for damages year to year
3. Lessee may suspend the payment of
the rent RULES ON EXTENSION OF THE LEASE
4. Lessee may ask for rescission, in case PERIOD:
of substantial damage to him 1) If a lease contract for a definite term
allows lessee to extend the term, there is no
TRESPASS IN LEASE: necessity for lessee to notify lessor of his
1. Trespass in fact (perturbacion desire to so extend the term, unless the
de mere hecho): contrary is stipulated.
physical 2) “May be extended” as stipulation: lessee
enjoyment is reduced can extend without lessor’s consent but
lessee must notify lessor.
Lessor will not 3) “May be extended for 6 years agreed upon
be held liable. by both parties” as stipulation: This must be
2. Trespass in law (perturbacion interpreted in favor of the lessee. Hence,
de derecho): ordinarily the lessee at the end of the original
A third person claims period may either:
legal right to enjoy the premises a) leavethe
Lessor will be held liable premises; or
b) remainin
possession
NOTE: While the Japanese Occupation
4) In co-ownership, assent of all is needed;
was a fortuitous event, the lessor is still
otherwise, it is void or ineffective as against
not excused from his obligation to
non-consenting co-owners.
warrant peaceful legal possession. Lease
5) Where according to the terms of the
is a contract that calls for prestations
contract, the lease can be extended only by
both reciprocal and repetitive; and the
the written consent of the parties thereto, no
obligations of either party are not
right of extension can rise without such
discharged at any given moment, but
written consent.
must be fulfilled all throughout the term
of the contract. (Villaruel vs. Manila
Rule if Lessor Objects to the Lessee’s
Motor Co.)
continued Possession:
Duration of Lease Requisites:
1. Lease made for a determinate time 1. Contract has expired
or fixed Period 2. Lessee continued enjoying the thing
Lease will be for the said 3. Lessor Objected to this enjoyment If the
period and it ends on the day three requisites are present, the lessee shall
fixed without need of a demand be considered a possessor in bad faith

2. If there is no fixed period IMPLIED NEW LEASE (Tacita

A. For Rural Lands (Article 1680) Reconducion)
it shall be for all time lease which arises if at the end of the
necessary for the gathering of contract the lessee should continue
fruits which the whole estate enjoying the thing leased for 15 days
may yield in 1 year, or which it with the acquiescence of the lessor,
may yield once
B. For Urban Lands (Article 1687)
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
148

MEMORY AID IN CIVIL LAW

unless a notice to the contrary had which provides that “the lease contract
previously been given by either party. shall continue for an indefinite period
provided that the lessee is up-to-date in
Requisites: the payment of his monthly rentals” for
a. the term of the original the contract is one with a period subject
contract has expired to a resolutory condition.
b. the lessor has not given
the lessee a notice to vacate PURCHASE OF THE LEASED PROPERTY
c. the lessee continued GENERAL RULE: Purchaser of thing
enjoying the thing leased for at least 15 days leased can terminate lease.
with the acquiescence of the lessor EXCEPTIONS:
a. lease is recorded in Registry
When there is no implied new lease: of Property
1. When before or after the b. there is stipulation in the
expiration of the term, there is a notice to contract of sale that purchaser shall respect
vacate given by either party. the lease
2. When there is no definite fixed c. purchaser knows the
period in the original lease contract as in the existence of the lease
case of successive renewals. d. sale is fictitious
Effects: e. sale is made with right of
repurchase
a. The period of the new
lease is not that stated in the original GROUNDS FOR EJECTMENT UNDER ART.
contract but the time in Articles 1682 and 1673: (ELVU)
1687.
b. Other terms of the
1. Expiration of the period agreed upon or
the period under Arts. 1682 and 1687;
original contract are revived.
2. Lack of payment of the price stipulated;
NOTE: Terms that are revived are only 3. Violation of any of the conditions agreed
those which are germane to the upon in the contract; and
enjoyment of possession, but not those 4. Unauthorized use or service by the lessee
with respect to special agreements of the thing leased.

which are by nature foreign to the right

of occupancy or enjoyment inherent in a
contract of lease – such as an option to RENTAL REFORM ACT OF 2002
purchase the leased premises (Dizon vs. (R.A. No. 9161)
Magsaysay GR No. 23399, May 31,1974) Effectivity: January 1,
2002. Coverage:
Perpetual Lease
A lease contract providing that the a. All residential units of NCR and other
lessee can stay in the premises for as highly urbanized cities, the total monthly
long as he wants and for as long as he rental for each of which does not exceed
can pay the rentals and its increases. P7,500;
This is not permissible; it is a purely b. All residential units in other areas the
potestative condition because it total monthly rental for each of which does
leaves the effectivity and enjoyment not exceed P4,000 as of 1/1/02, without
of leasehold rights to the sole and prejudice to pre-existing contracts.
exclusive will of the lessee
Grounds for judicial ejectment:
NOTE: In Jespajo Realty vs. CA, 27 Sept. SANORE
2002, the SC upheld a lease contract,
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
149

MEMORY AID IN CIVIL LAW

1. Assignment of lease or subleasing of

residential units including the acceptance of TERMINATION OF THE LEASE
boarders or bedspacers without written If made for a determinate time, it
consent of the owner or lessor; ceases upon the day fixed without
2. Arrears in payment of rent for a the need of a demand.
total of 3 months; 1) By the expiration of the period
3. Legitimate needs of the owner or 2) By the total loss of the thing
lessor to repossess for his own use or for the 3) By the resolution of the right of the lessor
use of any immediate member of his family as 4) By the will of the purchaser or transferee
a residential unit, provided: of the thing
a. owner or immediate member not 5) By rescission due to non-performance of
being owner of any other available residential the obligation of one of the parties
unit within the same city or municipality;
b. lease for a definite period has Special Provisions for Rural Lands
expired; Effect of loss due to fortuitous
c. lessor has given lessee formal
event:
notice 3 months in advance; and
d. owner or lessor is prohibited 1. Ordinary fortuitous event – no reduction
from leasing the residential unit or allowing 2. Extraordinary fortuitous event
its use by a third person for at least 1 year. a. if more than ½ of the fruits were
lost, there shall be a reduction, unless there
4. Absolute ownership by the lessee of is a stipulation to the contrary
another dwelling unit in the same city or b. if ½ or less, there shall be no
municipality which may be lawfully used as reduction
his residence provided lessee is with formal Lease duration: If not fixed, it shall
notice 3 months in advance; be for all time necessary for the
5. Need of the lessor to make necessary gathering of fruits which the whole
repairs in the leased premises which is the estate may yield in 1 year, or which
subject of an existing order of it may yield once.
condemnation by appropriate
authorities concerned in order to Special Provisions for Urban Lands
make said premises safe and
Repairs for which urban lessor is
habitable; and
liable:
6. Expiration of period of the lease
1. special stipulation
contract.
2. if none, custom of the place
NOTE: 3. in case of doubt, the repairs are
Except when the lease is for a chargeable against him
definite period, the provisions of
Art. 1673(1) of the Civil Code (CC),
Lease duration:
insofar as they refer to residential
units, shall be suspended during the 1. If there is a fixed period, lease will be for
effectivity of R.A. 9161, but other said period.
provisions of the CC and the Rules of 2. If no fixed period, apply the following
Court on lease contracts insofar as rules:
they are not in conflict with the a. If rent is paid daily: day
provisions of R.A. No. 9161 shall to day
apply. b. If rent is paid weekly: week
to week
No increase in monthly rental by
c. If rent is paid monthly: month
more than 10% is allowed.
to month
d. If rent is paid yearly: year to
year
CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
150

MEMORY AID IN CIVIL LAW

Please study the following uploaded

materials:

1. Study Notes (Pleadings)

2. Study Notes (Appeal Briefs)

3. Quotations by Prof. Rick Bales

CIVIL LAW COMMITTEE
CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)

San Beda College of Law
151

MEMORY AID IN CIVIL LAW

4. Appellate Briefs -- A Reader's Perspective by David E. Sorkin

5. Winning with the Facts by David E. Sorkin

6. De Liano v. Court of Appeals

7. People v. Cortez

Additional reading materials and

assignment to be upoaded/posted.

CIVIL LAW COMMITTEE

CHAIRPERSON: Romuald Padilla ASST.CHAIRPERSON: Vida Bocar, Joyce Vidad EDP: Alnaiza Hassiman, Dorothy Gayon
SUBJECT HEADS: Christopher Rey Marasigan (Persons and Family Relations), Alejandro Casabar(Property), Ma. Rhodora
Ferrer(Wills and Succession), Ian Dominic Pua(Obligations and Contracts), Sha Elijah Dumama(Sales and Lease), John Stephen

Quiambao(PAT), Christopher Cabigao(Credit Transactions), Ligaya Alipao(Torts and Damages), Anthony Purganan(LTD),

Ma. Ricasion Tugadi (Conflicts of Law)