SHELA MAE C.

CAMPOMANES BSA-2

I. Key Terms. Define or give the meaning of the following:

1. Unpaid seller of goods

- A seller that has not been paid the full price of the goods that have been

sold or that has received a bill of exchange or other negotiable instrument

as conditional payment, and the condition on which it was received has

not been fulfilled

2. Traditio brevi manu - give an example

- When the grantee is already in possession of the thing under a title which

is not of ownership, such as when the lessee purchases from the lessor

the object of the lease.

- Example: Elijah is renting a specific phone belonging to Klare. Klare tells

Elijah that she is selling the phone for only P5, 000 and Elijah accepts it.

3. Sale or return

- A contract by which the property is sold but the buyer, who becomes the

owner of the property on delivery, has the option to return the same to the

seller instead of paying the price.

4. Tradition; - in the legal sense

- A derivative mode of acquiring ownership by virtue of which one who has

the right and intention to alienate a corporeal thing, transmits it by virtue of

a just title to one who accepts the same.

5. Redhibitory defect

- Is a hidden defect of an animal of such a nature that expert knowledge is

not sufficient to discover it, even when a professional inspection has

already made.
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6. Implied warranty of fitness

- Refers to a warranty implied by law that if a seller knows or has reason to

know of a particular purpose for which some item is being purchased by

the buyer, the seller is guaranteeing that the item is fit for that particular

purpose. 

7. Eviction

- Is the deprivation of the vendee of the whole or a part of the thing sold by

virtue of a final judgement based on a right prior to the sale or an act

imputable to the vendor

8. Caveat venditor

- A Latin term which means “let the seller beware” which further means that

the seller is responsible for any problem that the buyer might

encounter with a service or product.

II. Discussions. Discuss the following:

1. Give the cases when a sale of property is valid although the seller is not

the owner thereof.

- Where the owner of the goods is, by his own conduct, precluded from

denying the seller’s authority to sell (Estoppel)

- Where the law enables the apparent owner to dispose of the goods as if

he were the true owner thereof

- Where the sale is sanctioned by statutory or judicial authority

- Where the sale is made at merchant’s stores, fairs, or markets

- Where the seller has a voidable title which has not been avoided at the

time of the sale;

- Where the seller subsequently acquires title

2. What are the different ways for effecting delivery to the buyer of the thing

sold?

- The thing sold shall be understood as delivered, when it is placed in the

control and possession of the vendee. The different ways of effecting

delivery to the buyer are the following:

1. Actual or real delivery – physical delivery of the thing

2. Constructive or legal delivery

 By execution of a public instrument

 By traditio symbolica

 By traditio longa manu

 By traditio brevi manu

 By traditio constitutum possessorium

 By quasi-delivery or quasi-traditio
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3. Delivery in any other manner signifying an agreement that the

possession is transferred to the vendee.

3. Give the requisites for the exercise by an unpaid seller of his right of

stoppage in transitu.

- Requisites for exercise of right of stoppage in transitu:

▪ Seller must be unpaid

▪ Buyer must be insolvent

▪ Goods must be in transit

▪ Seller must either actually take possession of the goods sold or give

notice of his claim to the carrier or other person in possession

▪ the seller must surrender the negotiable document of title, if any, issued

by the carrier or bailee

▪ the seller must bear the expenses of delivery of the goods after the

exercise of the right

4. What are the implied warranties in a contract of sale?

- Implied warranty as to seller’s title

- Implied warranty against hidden defects or unknown encumbrances

- Implied warranty as to fitness or merchantability

5. Distinguish “sale or return” from “sale on trial.”

o In sale or return, the sale is subject to a resolutory condition, while

in sale on trial, the sale is subject to a suspensive condition.

o In sale or return, it depends entirely on the will of the buyer, while

sale on trial depends on the character or quality of the goods.

o In sale or return. The ownership of the goods passes to the buyer

on delivery and subsequent return of the goods reverts ownership

in the seller, while in sale on trial, the ownership remains in the

seller until the buyer signifies his approval or acceptance to the

seller.

o In sale or return, the risk of loss rests upon the buyer, while in sale

on trial, the risk still remains with the seller.

6. Suppose the parties failed to stipulate the place of delivery of the thing

sold. Where is the place of delivery?

- If there no stipulation of the parties on where to deliver the thing sold, the

seller may deliver the thing at such place as circumstances show to be

suitable and convenient for the purpose intended and presumptively in the

contemplation of the parties when the contract was made.

- Apart from any such contract, express or implied, or usage of trade to the

contrary, the place of delivery is the seller's place of business if he has

one, and if not his residence.

7. What are the principal obligations of the vendor?

Principal obligations of the vendor:

 To transfer the ownership of the determinate thing sold;

 To deliver the thing;

 To warrant against eviction and hidden defects;

 To take care of the thing, pending delivery, with proper

diligence;

 To pay for the expenses for the execution and registration of the

deed of sale, unless there is a stipulation to the contrary.

8. Suppose the thing sold is lost after perfection of the sale but before its

delivery to the buyer? Who shall bear the loss by a fortuitous event?

Explain.

- If the thing sold is lost after perfection of the sale but before its delivery to

the buyer and the reason is because of a fortuitous event, Article 1538, in

case of loss, deterioration and improvement of the thing before its

delivery, the rules in Article 1189 shall be observed. Article 1189, if the

thing is lost without the fault of the debtor, the obligation shall be

extinguished. No one should bear the loss and the obligation therefore is

extinguished.
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III. Problems. Explain or state briefly the rule or reason for your answer.

1. S sold to B a parcel of land with an area of 500 sq. meters at P2000 per

sq. meter. It turns out that the area is only 451 sq. meters. Has B the right

to cancel or rescind the sale even if S is willing to accept a proportionate

reduction of the price, or only P902, 000?

No, B has no right to rescind the sale.

Article 1539, 2nd paragraph, states that If the sale of real estate

should be made with a statement of its area, at the rate of a certain price

for a unit of measure or number, the vendor shall be obliged to deliver to

the vendee, if the latter should demand it, all that may have been stated in

the contract; but, should this be not possible, the vendee may choose

between a proportional reduction of the price and the rescission of the

contract, provided that, in the latter case, the lack in the area be not less

than one-tenth of that stated.

In this case, the lack in the area is only 49 sq. meters which does

not exceed to 50 sq. meters (1/10 of 500 sq. meters). As a rule, the buyer

can ask for rescission and proportionate decrease of price if the lack is at

least one-tenth of the area stated. Therefore, B has no right to rescind the

sale even if S is willing to accept a proportionate reduction of the price.

2. Same example, but the price is fixed at P1, 000,000 without a statement

of the price per sq. meter. Has B the right to enforce the contract with the

corresponding reduction of the price to P902, 000?

No, B has no right to enforce the contract.

Article1542 states that in the sale of real estate, made for a lump

sum and not at the rate of a certain sum for a unit of measure or number,

there shall be no increase or decrease of the price, although there be a

greater or less area or number than that stated in the contract.

In this case, the price is fixed at P1, 000, 000 without a statement

of price per sq. meter. Therefore, B has no right to enforce the contract

with the corresponding reduction of the price to P902, 000.

3. Same example. The only problem is that S subsequently sold the same

property to C who immediately registered the sale in his name. a. Who

has a better right to the property: B or C? b. Suppose C did not also

register the sale. To whom should the property be awarded?

a) C has a better right to the property.

Article 1544 states that if an immovable property is sold, the first

order of priority, the ownership shall belong to the vendee who first

registers the sale in good faith in the Registry of Property.

Therefore, in this case, C immediately registered the sale so he has

a better right to the property.

b) The property should be awarded to C.

Article 1544 states that if an immovable property is sold, in the

absence of registration, the vendee that take first the possession of the

property in good faith shall have the ownership.

Therefore, in this case, C is the first one to take the possession so

he has a better right and he should be awarded of the property.

4. Same example. C was declared by a court to have a better right. Is S

liable to B for the former’s failure to comply with his warranty against

eviction?

Yes, S is liable to B.

Article 1548 states that eviction shall take place whenever by a final

judgment based on a right prior to the sale or an act imputable to the

vendor, the vendee is deprived of the whole or of a part of the thing

purchased, the vendor shall answer for the eviction even though nothing

has been said in the contract on the subject.

In this case, S sold the same property to C and the final decision is

that C has a better right to the property, depriving B of his ownership to

the thing he purchased. The remedy of B is to sue S for the breach of

warranty against eviction. Therefore, S is liable to B.

5. S sold to B a piano for P10, 000. It was agreed that payment shall be

made within 10 days. Has B the right to demand delivery even before he

has paid?

Yes, B has the right to demand delivery.

Article 1524 states that the vendor shall not be bound to deliver the

thing sold, if the vendee has not paid him the price, or if no period for the

payment has been fixed in the contract. Exception to the rule is when a

time for the payment has been fixed in the contract.

In this, there is a fixed agreement that the payment shall be within

10 days. Therefore, S is obliged to deliver the piano where the term of

credit has not expired although B has not yet paid the price.
SHELA MAE C. CAMPOMANES BSA-2

6. B, through fraud, made S sign a contract of sale of a parcel of land. Here,

B’s title is voidable which may be declared void by the court in an action

by S. However, B was able to sell the property to C. Has B the right to

recover the property from C?

No, B has no right to recover the property from C.

Article 1390 renders a contract voidable if one of the parties is

incapable of giving consent to the contract or if the contracting party's

consent is vitiated by mistake, violence, intimidation, undue influence or

fraud.

In this case, the contract of sale of a parcel of land that B brought

from S through fraud is a voidable contract that can be a void contract at

any time which you may not enforce. In a void contract, you cannot

recover anything because essentially there was no valid contract.

Therefore, B has no right to recover the property.

7. B bought a bottle of medicine from a drugstore. Its label says that it

provides a “very effective relief from asthma.” However, B continues to

suffer from asthma attacks. Has B the right to complain for

misrepresentation against the drug manufacturer?

Yes, B has the right to complain.

Article 1561, the vendor shall be responsible for warranty against

hidden defects with the thing sold may have. Article 1566, the vendor is

responsible for the vendee for any hidden defects in the thing sold even

though he was not aware thereof.

In this case, making and producing drugs for medical purposes is

the trade and profession of the drug manufacturer and he should have
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known it. Therefore, B has the right to complain for misrepresentation

against the drug manufacturer.

8. S sold to B a parcel of land located in Quezon City under a public

instrument signed by the parties and notarized in Manila. Is B considered

already the owner of the property?

Yes, B is considered already the owner of the property.

Article 1498 states that when the sale is made through a public

instrument, the execution thereof shall be equivalent to the delivery of the

thing which is the object of the contract, if from the deed the contrary does

not appear or cannot clearly be inferred.

In this case, S sold the parcel of land to B under public instrument

signed by both parties and notarized in Manila. Therefore, B is considered

the owner of the property located in Quezon City.