SALES

Leandro Angelo Y. Aguirre

U.P. College of Law
2nd Semester AY 2015-2016
I.

Introduction
A. Essential Requirements of Contracts
Arts. 1305, 1306, 1318 & 1356.
B. Definitions
1. Contract of Sale Art. 1458
2. Contract to Sell Arts. 1478, 1479
3. Conditional Contract of Sale Arts. 1461, 1462, 1465, 1503
Spouses Herrera v. Caguiat, G.R. No. 139173, 28 February
2007
Reyes v. Tuparan, G.R. No. 188064, 1 June 2011
Spouses Reyes v. Salvador, G.R. No. 139047 (2008)
Lim v. Court of Appeals, 182 SCRA 566 (1990)
Pingol v. Court of Appeals, 226 SCRA 118 (1993)
C. Sale distinguished from other contracts
1. Donation Arts. 725 & 1471
2. Barter and ExchangeArts. 1468, 1638 & 1641
Fule v. Court of Appeals, 286 SCRA 698 (1998)
3. Contract for a Piece of Work Arts. 1467, 1713-1715
Engineering & Machinery Corp. v. CA, 252 SCRA 156 (1996)
4. Agency to Buy and Sell Arts. 1466 & 1868
Quiroga v. Parsons Hardware, 38 Phil. 501 (1918)
5. Dacion en Pago Art. 1245
Dao Heng Bank, Inc. v. Spouses Laigo, 571 SCRA 434 (2008)
6. Lease Arts. 1484-1485
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Filinvest Credit Corp. v. Court of Appeals, 178 SCRA 188

(1989)
PCI Leasing v. Giraffe-X Creative, G.R. No. 143618, 12 July
2007
7. Chattel Mortgage Art. 2140
Section 3, Chattel Mortgage Law
II.

Parties to a Contract of Sale

A.

Capacity of Parties Arts. 44, 46, 1489

B.

Absolute Incapacity Arts. 1327, 1390, 1393, 1397, 1399 1489;

Art. 194, Family Code

C.

Relative Incapacity: Married Persons

1. Contract with Third Parties Arts. 73, 96 & 124, Family Code
2. Between Spouses Arts. 1490 & 1492
Medina v. CIR, 1 SCRA 302 (1961)
3. Applicability to Common Law Spouses Arts. 147-148, Family
Code

D.

Special Disqualifications Arts. 1491-1492

1. Guardians, Agents and Administrators
2. Judges and Lawyers
Rubias v. Batiller, 51 SCRA 120 (1973)
3. Public Officers
Maharlika Publishing v. Tagle, G.R. No. L-65594, 9 July 1986
4. Other Disqualifications

III.

Subject Matter of the Sale

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A.
Requisites of a Valid Subject Matter Arts. 1459, 1347, 1306,
1409, 1411, 1416
1. Must be Existing, Future or Contingent Arts. 1347, 1348 &
1462
a.

Emptio Rei Speratae/Emptio Spei Arts. 1461 & 1347

Pichel v. Alonzo, 111 SCRA 34 (1982)

b.

Subject to a Resolutory Condition Arts. 1465, 1608

2. Must be Licit Arts. 1347, 1459, 1575

Martinez v. CA, 56 SCRA 647 (1974)
3. Must be Determinate or Determinable Art. 1460, 1349
Melliza v. City of Iloilo, 23 SCRA 477 (1968)
Atilano v. Atilano, 28 SCRA 231 (1969)
B.

Particular Kinds
1. Generic Things
Yu Tek & Co. v. Gonzales, 29 Phil. 384 (1915)
2. Future Goods Art. 1461 & 1462
3. Undivided Interest/Share Arts. 1463-1464, 493
Gaite v. Fonacier, 2 SCRA 831 (1961)
4. Things in Litigation -- Arts. 1381 (4), & 1385 (2); Rule 13, Section
14, Rules of Court
Laroza v. Guia, G.R. No. L-45252, January 31, 1985

IV.

Price or Consideration Arts. 1469-1474; 1350-1355

A. Must be Real Art. 1471
1. Adequacy of Price Arts. 1355 & 1470
Bagnas v. CA, 176 SCRA 159 (1989)
Vda. de Gordon v. CA, 109 SCRA 88 (1981)
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2. False Consideration Arts.1353-1354, 1471

Ong v. Ong, 139 SCRA 133 (1985)
3. Must be in Money or its Equivalent Arts. 1458 & 1468
4. Must be Certain or Ascertainable at the Time of Perfection Art.
1469
Velasco v. CA, G.R. No. L-31018, 51 SCRA 439 (1973)
Toyota Shaw v. CA, 244 SCRA 320 (1995)
V.

Formation of the Contract of Sale Arts. 1475-1488

A.

Preparatory Art. 1479 (cf. Art. 1324)

1. Offer Art. 1475
Villonco v. Bormaheco, 65 SCRA 352 (1975)
a. Forms of Offer Arts. 1319, 1325, 1326
b. Forms of Acceptance Art. 1319
2. Vices of Consent Arts. 1330, 1338, 1331
Asiain v. Jalandoni, 45 Phil 296 (1923)
3. Option Contract Arts. 1479, 1324
Adelfa Properties, Inc. v. CA, 240 SCRA 565 (1995)
Carceller v. CA, 302 SCRA 718 (1999)
a. Meaning of Consideration
Sanchez v. Rigos, 45 SCRA 368 (1972)
4. Right of First Refusal
Ang Yu Asuncion v. CA, 238 SCRA 602 (1994)
Equatorial Realty Devt. v. Mayfair Theater, 264 SCRA 483

(1996)
Paranaque Kings v. CA, 268 SCRA 727 (1997)
Tanay Recreation v. Fausto, 455 SCRA 436 (2005)
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5. Mutual Promise to Buy and Sell Art. 1479

B.
Perfection Arts. 1475, 1319, 1325, 1326, 1330, 1338, 1476,
1479
Coronel v. CA, G.R. No. 103577, October 7, 1996
San Lorenzo Devt Corp. v. CA, G.R. No. 124242, January 21,
2005
Manila Metal Container Corp. v. PNB, 511 SCRA 444 (2006)
1. When deviation allowed
Villonco v. Bormaheco, supra
2. Sale by Auction Arts. 1476, 1403 (d), 1326
3. Earnest Money vs. Option Money Art. 1482
Limson v. CA, 357 SCRA 209 (2001)
San Miguel Properties v. Huang, 336 SCRA 737 (2000)
4. Place of Perfection Art. 1391
C.

Formalities of the Contract

1. General Rule: Form Not Important Arts. 1483, 1358
Dalion v. CA, 182 SCRA 872 (1990)
2. Exception: When Form Important
a.

Form Important for Enforceability

1. Statute of Frauds Arts. 1403 & 1405
Paredes v. Espino, 22 SCRA 1000 (1968)

b.

Form Important for Validity

1. Sale of Realty through an Agent Art. 1874
2. Sale of Large Cattle Art. 1581, Section 529, Revised
Administrative Code
3. Secondary Evidence Sections 5 & 9, Rule 130, Rules of
Court
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4. Electronic Commerce Act Sections 7, 8 & 11, R.A. 8792

VI.

Obligations of the Vendor

Arts. 1495-1506, 1536-1543
A.

Transfer Ownership to the Vendee

Arts. 1459, 1477, 1478, 1487, 1496-1501, see also Art. 1164
1. General Rule Arts. 1477, 1496, 1497
Ocejo Perez & Co. v. International Bank, 37 Phil. 631 (1918)
2. Exceptions
a.

Sale on Approval, Trial or Satisfaction Art. 1502

Vallarta v. Court of Appeals, 150 SCRA 336 (1987)

b.

Executory Sales
1.

Express Reservation Art. 1478

Luzon Brokerage v. Maritime Bldg., 43 SCRA 93

(1972)
2.

Implied Reservation Art. 1503 (1)

3. Sale by a Person Not the Owner at the Time of Delivery Arts.

1462, 1459, 1505
Aznar v. Yapdiangco, 13 SCRA 486 (1965)
Exceptions:
a. Estoppel Arts. 1431 1433, 1434; see also, 1437, 1439 and
1911
Hernaez v. Hernaez, 32 Phil 214 (1915)
Bucton v. Gabar, 55 SCRA 499 (1974)
b. Factors Act, Recording Laws, Torrens System

c. Validity of the Sale under Statutory Power or Court Order to

Sell
d. Sale in Merchants Store, Market or Fair
Sun Bros. v. Velasco, 54 OG 5143, January 13, 1958
4. Sale by a Person Having a Voidable Title Arts. 1506, 559
EDCA Publishing v. Santos, 184 SCRA 614 (1990)
B.

Delivery of the Thing with Fruits and Accessions

Arts. 1537, 1163, 1164, 1477 and 1495, see also Art. 1521
1. Place, time and Manner of Delivery Arts. 1524, 1169, 1521,
1523 (2) (3), 1537, 1164, 443
a. Reasonable Time
Smith Bell v. Matti, 44 Phil. 874 (1922)
b. When time is of the essence
Soler v. Chesley, 43 Phil. 529 (1922)
Republic v. Litton, 94 Phil. 52 (1953)
c. When Vendor not bound to deliver Arts. 1524, 1536, 1198
d. Acceptance not a condition to delivery
La Fuerza v. CA, 23 SCRA 1217 (1968)
2. Sale of Goods Arts. 1522, 1537, 1480
a. Delivery of Wrong Quantity Art. 1522
b. Delivery by Installments Art. 1583
3. Sale of Immovables
a. Where price is at certain rate per unit of measure Arts.
1539, 1540
b. Sale for a Lump Sum Art. 1542
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Azarraga v. Gay, 52 Phil. 599 (1928)

Esguerra v. Trinidad, 518 SCRA 186 (2007)
4. Inspection and Acceptance
a. Right of Inspection Art. 1584 (2)(3)
b. Manifestation of Acceptance Art. 1585
c. Breach of Warranty Art. 1586
d. Refusal to Accept Arts. 1587-1589
5. Kinds of Delivery
a. Real or Actual Delivery -- Art. 1497
Alfredo v. Borras, 404 SCRA 145 (2003)
b. Constructive Delivery
1.
Symbolic Delivery/Delivery by Public Instrument
Art. 1498
Sarmiento v. Lesaca, 108 Phil 900 (1960)
Santos v. Santos, 366 SCRA 395 (2001)
2.

Traditio Longa Manu Arts. 1498, 1499, 1513, 1514

Board of Liquidator v. Floro, 110 Phil. 482 (1960)

3.

Traditio Brevi Manu Art. 1499

Abuan v. Garcia, 14 SCRA 759 (1965)
Heirs of Pedro Escanlar v. CA, 281 SCRA 176

(1997)
4.

Traditio Constitutum Possessorium Art. 1500

Amigo v. Teves, 96 Phil 252 (1954)

5.

Delivery to Common Carrier Art. 1523, 1503

Behn Meyer v. Yangco, 38 Phil 602 (1918)

C.

Double Sale Arts. 1544 (1), 526, 527

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Express Credit v. Velasco, 473 SCRA 590 (2005)

1. General Rule prior tempore, prior jure
Carbonell v. CA, 69 SCRA 99 (1976)
Tanglao v. Parungao, 535 SCRA 123 (2007)
2. Requisites
Cheng v. Genato, 300 SCRA 722 (1998)
3. Purchaser in Good Faith Arts. 526, 527, 528
Paylago v. Jarabe, 22 SCRA 1247 (1968)
Agricultural & Home Extension v. CA, 213 SCRA 536 (1992)
4. Sale of Movables Arts. 1544, 1497-1501
Rivera v. Ong, 37 Phil. 355 (1917)
5. Sale of Immovables Art. 1544 (2)
Consolidated v. CA, 448 SCRA 347 (2005)
6. Sale by Virtue of Execution or Attachment
Carumba v. CA, 31 SCRA 558 (1970)
Dagupan v. Macam, 14 SCRA 179 (1965)
7. Unregistered Land PD 1529, Section 113
Hanopol v. Pilapil, 7 SCRA 452 (1963)
8. First Possession in Good Faith
Sanchez v. Ramos, 40 Phil. 614 (1919)
Quimson v. Rosete, 87 Phil. 159 (1950)
Beatingo v. Gasis, G.R. No. 179641, 9 February 2011
9. Oldest Title Art. 1544 (3)
D.

Risk of Loss
1. General Rule Art. 1263
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2. Loss Before Perfection

Roman v. Grimalt, 6 Phil. 96 (1906)
3. Loss at the Time of Perfection Arts. 1493, 1494
Norkis v. CA, 193 SCRA 694 (1991)
4. Loss After Perfection but Before Delivery Arts. 1480 in relation
to Arts. 11631165; Arts. 1189 and 1262
a.

General Rule res perit domino

b.

Loss by fault of a party Arts. 1480, 1504, 1538, 1636

c.
Loss by fortuitous events Arts. 1480, 1163, 1165, 1504,
1538, 1189
d.

Fruits or Improvements Art. 1537

5. After Delivery Art. 1504

Sun Bros. v. Perez, 7 SCRA 977 (1963)
Lawyers Coop. v. Tabora, 13 SCRA 762 (1965)
Song Fo v. Oria, 33 Phil. 3 (1915)
E.

Warranties
Ang v. Court of Appeals, G.R. No. 177874, 29 September 2008
1. Express Warranties
Filinvest Credit Corp. v. Court of Appeals, 178 SCRA 188
(1989), supra
Harrison Motor Co. v. Navarro, 331 SCRA 202 (2000)
Guinhawa v. People, 468 SCRA 278 (2005)
a.

Distinguished from Condition Arts. 1545, 1599

b.

Distinguished from Opinion, Dealers Talk Art. 1546, 1341

Songco v. Sellner, 37 Phil. 254 (1917)

c.

Distinguished from False Representation

10

Gochangco v. Dean, 47 Phil. 687 (1925)

PMC v. Go Jucco, 48 Phil. 621 (1926)
2. Implied Warranties
a.

Implied Warranty of Title - 1590

1.
Eviction by Judgment Arts. 1547, 1548, 1550,
1551, 1555, 1557
Power Commercial & Industrial Corp. v. CA, 274
SCRA 597 (1997)
2.

Waiver Art. 1554

3.

Effects of Eviction Arts. 1555, 548, 1556, 1599

b.
Implied Warranty Against Encumbrances or Defects Art.
1567
1.

Hidden Encumbrances or Defects Arts. 1561-1580

Engineering Machinery Corp. v. CA, 252 SCRA 156

(1996), supra
Nutrimix Feeds Corp. v. CA, 441 SCRA 357 (2004)
De Guzman v. Toyota Cubao, Inc., G.R. No. 141480, 29
November
2006
2.
Warranties in Sales of Animals/Redhibitory Defects
Arts. 1574- 1580
3.
Sale by Sample or Description/Merchantable Quality
Arts. 1574, 1481, 1562(2), 1565
c.

Implied Warranty of Quality

1.
Fitness for a Particular Purpose Arts. 1562 (1),
1564, 1563
Rodriguez v. Findlay, 14 Phil. 294 (1909)

d.
VII.

Consumer Act, RA 7394, Section 68 (4)

Obligations of the Vendee

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A.
Obligation to Accept Delivery Arts. 1524, 1169, 1521, 1536,
1198, 1522, 15841588
B.

Obligation to Pay the Price

Torcuator v. Bernabe, 459 SCRA 439 (2005)
1. Liability for Interests Arts. 1582, 1589
Bareng v. CA, 107 Phil. 641 (1960)
2. Suspension of Payments Arts. 1590, 1560, 1664
Spouses Mahusay v. B.E. San Diego Inc., G.R. No. 179675, 8
June 2011

VIII.

Breach of Contract
A.

Remedies of Unpaid Vendor Art. 1525-1526, 1533-1534

1. Possessory Lien Arts. 1527-1529
2. Stoppage in Transitu Arts. 1531-1535, 1532 (2)
3. Resale Art. 1533
Katigbak v. CA, 4 SCRA 243 (1962)
4. Rescission Art. 1534

B. Sale of Movables
1. Action for Price
a. When ownership has passed Art. 1595 (1)
b. When ownership has not passed Art. 1595 (2)
2. Action for Damages for Non-Acceptance Art. 1596
3. Rescission Arts. 1597, 1593
4. Sale of Movables on Installment (Recto Law) Arts. 1484-1486
Borbon v. Servicewide, 258 SCRA 634 (1996)
Nonato v. IAC, 140 SCRA 255 (1985)
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Delta Motor Sales v. Niu Kim Duan, 213 SCRA 259 (1992)
Elisco Tool Manufacturing Corp. v. CA, 307 SCRA 731 (1999)
PCI Leasing and Finance, Inc. v. Giraffe-X Creative
Imaging, Inc., 527 SCRA 405 (2007), supra
C. Sale of Immovables
1. Anticipatory Breach Art. 1591
2. PD 957, Sections 23-24
Manila Banking Corp. v. Spouses Rabina, G.R. No. 145941,
16 December
2008
Luzon Development Bank v. Enriquez, G.R. No. 168646, 12
January 2011
3. Maceda Law (RA 6552): Sale of Immovables on Installment
Rillo v. Court of Appeals, 274 SCRA 46 (1997)
Active Realty v. Daroya, 382 SCRA 152 (2002)
Fabrigas v. San Francisco del Monte, 475 SCRA 247 (2005)
4. Rescission of Sale of Non-Residential Realty on Installment Arts.
1191, 1560, 1592
Song Fo v. Hawaiian Phil., 47 Phil. 821 (1925)
Luzon Brokerage v. Maritime Bldg., 43 SCRA 93 (1972),
supra
IX.

Extinguishment of Sale
A. Causes Arts. 1600, 1231
B. Conventional Redemption Art. 1601
Villarica v. CA, 26 SCRA 189 (1968)
Torres v. CA, 216 SCRA 287 (1992)
1. Distinguished from Equitable Mortgage Arts. 1602-1604, 2088
Roberts v. Papio, 515 SCRA 346 (2007)
Tan v. Valdehueza, 66 SCRA 61 (1976)
Arrofo v. Quino, 449 SCRA 285 (2005)
2. Distinguished from Option to Buy Art. 1602
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Adiarte v. Tumaneng, 88 Phil. 333 (1951)

3. Period of Redemption Art. 1606
Heirs of Arches v. Diaz, 50 SCRA 440 (1973)
4. Exercise of Right to Redeem Art. 1616
Gargollo v. Duero, 1 SCRA 1311 (1961)
a. Who can exercise Arts. 1610-1613
b. From whom to Redeem Art. 1615
c. Effect of Redemption Arts. 1617-1618
d. Effect of Non-redemption Art. 1607
C. Legal Redemption Art. 1619
1. Period to Redeem Art. 1623
Doromal v. CA, 66 SCRA 575 (1975)
Francisco v. Boiser, 332 SCRA 305 (2000)
Misterio v. Cebu State College of Science and Technology,
461 SCRA 122 (2005)
2. Instances of Legal Redemption
a. Co-owners Art. 1620
b. Co-heirs Art. 1088
c. Adjoining Landowners of Rural Land Art. 1621
d. Adjoining Landowners of Urban Land Art. 1622
e. Under the Public Land Act CA 141, Sections 118-119
f. Under Extrajudicial Foreclosure Act 3175, Section 6
g. Under Agrarian Land Reform Code RA 6389, Section 12.

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