Professional Documents
Culture Documents
Art. 1458
9
CIVIL CODE OF THE PHILIPPINES
Ortigas and Co. v. Herrera
GR 36098, Jan. 21, 1983
If a lot owner in a subdivision sues for a refund
of a certain sum for having complied with certain
conditions imposed upon him, the action is one
for
specifi c performance incapable of pecuniary
estimation
(and, therefore, within the jurisdiction of the
Regional Trial Court). The suit cannot be
regarded
as merely one for a sum of money. If no
conditions
had been imposed, the action would have been
merely for a sum of money and, therefore,
capable
of pecuniary estimation, there being no specifi c
fact
or fulfi llment of a condition to be proved.
(7) Sale Distinguished from Dation in
Payment (Adjudicacion
en Pago, or Dacion en Pago or Dacion en
Solutum)
SALE DATION IN PAYMENT
1. There is a pre-existing
credit.
2. Extinguishes obligations.
3. The cause or consideration
here, from the viewpoint
CESSION
(1) There must be two or more
creditors.
DATION IN PAYMENT
(1) One creditor is sufficient.
Art. 1458
CIVIL CODE OF THE PHILIPPINES
12
(11) Sale Distinguished from a Loan
In a loan, the amount is substantially smaller
than the
value of the security given. (Facundo, et al., CAGR 833-R,
Nov. 13, 1947). If a person, however, borrows a
sum of money,
and with it purchases in his own name a car, said
purchaser
would really be considered the buyer, and not the
person
who lent the money to him. (Collector of Int. Rev.
v. Favis,
L-11651, May 30, 1960).
(12) Sale Distinguished from Lease
In a sale, the seller transfers ownership; in a
lease, the
lessor or landlord transfers merely the temporary
possession
and use of the property.
(13) Kinds of Extrajudicial Foreclosure Sale
These are:
1. an ordinary execution sale is governed by the
pertinent
COMMENT:
(1) Things With a Potential Existence
Sale of a thing having a potential existence:
This is a future thing that may be sold.
Art. 1461
CIVIL CODE OF THE PHILIPPINES
20
Example: all my rice harvest next year.
[NOTE: Future inheritance cannot be sold,
however.
(Art. 1347, par. 2, Civil Code).]
Other examples of thing possessed of a potential
existence:
(a) young animals not yet in existence or still
ungrown
fruits
(b) the wine that a particular vineyard is expected
to produce
(c) the wool that shall, thereafter, grow upon a
sheep
(d) the expected goodwill of a business enterprise.
(Sibal v.
Valdez, 50 Phil. 512).
[NOTE: The second paragraph speaks of the sale
of a mere hope or expectancy. It is believed that
this
cannot be what the Code Commission or
Congress meant
in view of the word subject to the condition that
the
thing will come into existence. The hope or
expectancy
Example:
If I need a particular size (Size 9 1/2) of Bally
Shoes,
and the same is not available (for the present),
but I place an
order for one, the transaction would be one of
sale. If upon
the other hand, I place an order for Size 13,
colored violet
Art. 1467
27
CIVIL CODE OF THE PHILIPPINES
(something not ordinarily made by the company),
the resultant
transaction is a contract for a piece of work.
Inchausti v. Cromwell
20 Phil. 435
FACTS: Hemp which was to be sold had to be
baled. Is
the cost of baling compensation for work or is it
part of the
selling price? (The distinction is important for if it
be part
of the selling price, it is subject to the sales tax
under Sec.
139 of Act 1189.)
HELD: Since it was proved that it was customary
to
sell hemp which is already baled, it follows that
the cost of
baling is part of the selling price, and should be
subject to
Obana v. CA
GR 36249, Mar. 29, 1985
FACTS: A rice miller accepted the offer of a
person to
buy 170 cavans of clean rice at P37.26 per cavan.
They agreed
that the rice will be delivered the following day at
the buyers
store, where the buyer will pay the purchase
price to the
Art. 1475
37
CIVIL CODE OF THE PHILIPPINES
millers representative. As agreed upon, the miller
did deliver
the 170 cavans of rice to the buyers store, but
the buyer was
nowhere to be found when the millers
representative tried
to collect the purchase price.
HELD: There was a perfected sale. Ownership of
the
rice, too, was transferred to the buyer when the
millers
representative delivered it to the buyers store. At
the very
least, the buyer had a rescissible title to the
goods, since he
did not pay the purchase price when the rice was
delivered
to him.
Lu v. IAC, Heirs of Santiago
balance?
HELD: To both questions, the answer is YES, for
the
stipulation is based on a sound policy in
commercial conditional
sales and is not contrary to law or to morals or to
public order, good customs, or public policy.
[NOTE: Although generally delivery should not be
made
till after payment, still if it is stipulated that
payment will
be made only after a certain period, delivery must
be made,
even before payment. (Warner, Barnes & Co. v.
Inza, 43 Phil.
505).]
Art. 1479. A promise to buy and sell a
determinate thing
for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to
sell a
determinate thing for a price certain is
binding upon the
promissor if the promise is supported by a
consideration
distinct from the price.
COMMENT:
(1) Distinction Between the First (Mutual
Promise) and the
Second
Paragraphs
(Accepted
Unilateral
Promise)
59
CIVIL CODE OF THE PHILIPPINES
qualifi ed acceptance with terms different from
the offer,
there is no acceptance, that is, there is no
promise to
buy and there is no perfected sale. (Beaumonth v.
Prieto,
41 Phil. 670).
(b) If an option is granted, how long is the offer
bound by
his promise?
ANS.: If no period has been stipulated, the court
will fi x the term.
(c) Is the right to buy, a right that may be
transmitted to
others?
ANS.: Yes, unless it was granted for purely
personal
considerations. (See 10 Manresa 65-70).
(d) What is an Option?
ANS.: It is a contract granting a person the
privilege
to buy or not to buy certain objects at any time
within the
agreed period at a fi xed price. The contract of
option is
a separate and distinct contract from the contract
which
the parties may enter into upon the
consummation of the
is not extinguished.)
Queries:
a) But is not the contract of sale reciprocal, and
therefore if one does not comply, the other
need not pay?
ANS.: True, but this happens only when
the seller is able to deliver but does not. In
such a case, the buyer is not required to pay,
for lack of reciprocity. It is different if the law
excuses the seller, but not the buyer. (Thus, in
class, if a student does not take an examination,
the teacher is not compelled to give him
a grade; but if the student is exempted from
the examination by, let us say, the authorities,
the professor is not exempted from the duty
of giving the grade.)
b) Why should a buyer pay if he does not receive
the object; is this not a case where there is no
cause or consideration?
ANS.: There was really a cause or consideration
because at the time the contract was
perfected, the thing purchased still existed.
3) Art. 1583 says: In case of loss, deterioration,
or
improvement of the thing before its delivery, the
rule in Art. 1189 shall be observed, the vendor
being
considered the debtor. Art. 1189, in turn, says
in part:
If the thing is lost without the fault of the
debtor, the obligation shall be extinguished.
required to buy.)
San Miguel Properties Phils., Inc. v.
Sps. Alfredo Huang & Grace Huang
GR 137290, Jul. 31, 2000
FACTS: Petitioner offered certain real properties
for sale
to respondents, who counter-offered to pay
earnest money and
the payment of the balance in eight equal
monthly installments.
Petitioner refused the counter-offer. Respondents
then
made another proposal to buy the properties, and
petitioners
accepted the earnest-deposit in the amount of
P1 Million.
However, the parties failed to agree on the
manner of payment
of the purchase price, and petitioner thereafter
refunded the
performance, but the same was dismissed by the
trial court
upon motion of petitioner. The Court of Appeals
(CA), however,
reversed the judgment of the trial court on the
ground that
there existed a perfected contract of sale between
petitioner
and respondents. On appeal, the Supreme Court
reversed the
CA.
HELD:
The
earnest-deposit
money
of
respondents was
not given as the earnest money contemplated
under Art. 1482.
It was given not as part of the purchase price and
as proof
of the perfection of the sale but only as a
guarantee that
respondents would not renege on the sale. Thus,
such earnestdeposit did not give rise to a perfected sale but
merely
to an option or an accepted unilateral promise on
the part of
respondents to buy the subject properties within
30 days from
the date of acceptance of the offer. For a contract
of sale to
exist, all the essential elements thereof, including
the mode
of payment of the purchase price, should be
present.
Art. 1482
CIVIL CODE OF THE PHILIPPINES
72
Vicente & Michael Lim v. CA & Liberty H.
Luna
GR 118347, Oct. 24, 1996
FACTS: In a contract of sale of a parcel of land,
Liberty
Luna, as seller, received earnest money from
buyers Vicente
69 Phil. 52).
(7) Compounding of a Criminal Prosecution
United General Industries, Inc. v.
Jose Paler and Jose de la Rama
L-30205, Mar. 15, 1982
FACTS: Paler and his wife bought a TV set on
installment,
executed a promissory note, and as security,
constituted
a chattel mortgage on said TV set. Because they
violated the
terms of the mortgage, the buyers were accused
of estafa.
To prevent prosecution and to settle the matter
extrajudicially,
Paler and a friend Jose de la Rama (who acted as
accommodation party) executed a second
promissory note in
favor of the seller. They were unable to pay, and
the seller
sued them. They contend however, that the case
should be
dismissed because the obligation sought to be
enforced was
incurred in consideration of the compounding of
a crime. Are
they liable?
HELD: The agreement to stifl e a criminal
prosecution
is contrary to public policy, is VOID, and cannot
be enforced
of the sale?
ANS.: Although the sale is void, not everybody is
given the right to assail the validity of the
transaction.
For instance, the spouses themselves, since they
are
parties to an illegal act, cannot avail themselves
of the
illegality of the sale, the law will generally leave
them
as they are. And then also, the creditors who
became
such only after the transaction cannot attack the
validity
of the sale for the reason that they cannot be said
to have been prejudiced. (Cook v. McMicking, 27
Phil.
10). Thus, the only people who can question the
sale
Art. 1490
CIVIL CODE OF THE PHILIPPINES
94
are the following: the heirs of either spouse, as
well as
prior creditors (persons who were already
creditors at
the time of the transfer). (Ibid.).
Example:
A husband sold his land to his wife. Later, he
borrowed money from C. The loan matured.
When C
Art. 1491
CIVIL CODE OF THE PHILIPPINES
98
by acquiring an interest in land involved in a
litigation in
which he had appeared as attorney. It was
proved, however,
that said interest had been acquired PRIOR to his
acting as
such attorney.
HELD: The complaint for disbarment is WITHOUT
MERIT, the interest having been acquired PRIOR
to the attorneys
intervention as counsel in the case.
[NOTE: Similarly, if the attorney participates in
the
sale, not as buyer but as AGENT for the buyer
there is no
violation of the law. (See Diaz v. Kapunan, 46 Phil.
842 and
Tuason v. Tuason, 88 Phil. 428).]
Fabillo v. IAC
GR 68838, Mar. 11, 1991
FACTS: In her will, Justina Fabillo bequeathed to
her
brother, Florencio, a house and lot in San
Salvador and to
her husband Gregorio, a piece of land in
Pugahanay. After
Justinas death, Florencio fi led a petition for the
probate of
Art. 1491
CIVIL CODE OF THE PHILIPPINES
100
ity, a lawyer may have a lien over funds and
property of his
client and may apply so much thereof as may be
necessary
to satisfy his lawful fees and disbursements. As
long as the
lawyer does not exert undue infl uence on his
client, that no
fraud is committed or imposition applied, or that
the compensation
is clearly not excessive as to amount to extortion,
a
contract for contingent fee is valid and
enforceable. Moreover,
contingent fees are impliedly sanctioned by 13 of
the Canons
of Professional Ethics which governed lawyerclient relationships
when the contract of services was entered into
between
the Fabillo spouses and Murillo.
However, this Court disagrees with the courts
below that
the contingent fee stipulated between Fabillo and
Murillo is
forty percent of the properties subject of the
litigation for
which Murillo appeared for the Fabillos. Under
the contract,
legal redemption.
(2) Cross-Reference
Refer to the following articles.
(a) legal redemption (Art. 1619, Civil Code);
(b) compromises (Art. 2028, Civil Code);
(c) renunciation (Arts. 6 and 1270, Civil Code).
Art. 1492
CIVIL CODE OF THE PHILIPPINES
104
Chapter 3
EFFECTS OF THE CONTRACT WHEN THE
THING
SOLD HAS BEEN LOST
Art. 1493. If at the time the contract of sale is
perfected,
the thing which is the object of the contract
has been entirely
lost, the contract shall be without any effect.
But if the thing should have been lost in part
only the
vendee may choose between withdrawing from
the contract
and demanding the remaining part, paying its
price in proportion
to the total sum agreed upon.
COMMENT:
(1) Loss of Object Before Sale
This refers to a case of loss of the object even
before the
perfection of the contract. It is evident that there
would be no
GENERAL PROVISIONS
Art. 1495. The vendor is bound to transfer the
ownership
of and deliver, as well as warrant the thing
which is
the object of the sale.
COMMENT:
(1) Obligations of Vendor
(a) to transfer ownership (cannot be waived)
(b) to deliver (cannot be waived)
(c) to warrant the object sold (this can be waived
or modifi
ed since warranty is not an essential element of
the
contract of sale)
(d) to preserve the thing from perfection to
delivery, otherwise
he can be held liable for damages. (See Art. 1163,
Civil Code).
(2) Case
Hermogena G. Engreso with
Spouse Jose Engreso v.
Nestoria de la Cruz & Herminio dela Cruz
GR 148727, Apr. 9, 2003
FACTS: Although the sale was made thru a public
document
and, hence, equivalent to delivery of the thing
sold,
petitioner Hermogena vehemently denied the fact
of the sale
and interposed the objection to private
respondents enjoyment
of the property.
107
CIVIL CODE OF THE PHILIPPINES
HELD: As such, fi ction must yield to reality and
petitioners
obligations to deliver the sold portion of Lot
10561,
or lot 10561-A, to private respondent remains.
Indeed, under
the law on sales, the vendor is bound to transfer
ownership
of and deliver the thing object of the sale to the
vendee. (Art.
1495).
(3) Failure to Deliver on Time
(a) If the seller promised to deliver at a stipulated
period,
and such period is of the essence of the contract,
but did
not comply with his obligation on time, he has no
right
to demand payment of the price. As a matter of
fact, the
vendee-buyer may ask for the rescission or
resolution of
the sale. (Sorer v. Chesley, 43 Phil. 529).
(b) If failure by seller to deliver on time is not due
to his
fault, as when it was the buyer who failed to
supply the
necessary credit for the transportation of the
goods, delay
for the simple reason that the seller here was not
guilty of
any negligence at all in view of her continued
watching of
the rice.)
[NOTE: Another point of the caretaker was that
Art. 1505
of the Civil Code must apply. Under said article,
purchases
made at a market are valid even if the seller was
not yet the
owner, and delivery of the same would transfer
ownership
because of the doctrine of ostensible ownership,
namely, that
the market seller appears to be the owner, and if
he is not,
the true owner is negligent for having allowed him
to appear
as the owner. The Court held that said provision
cannot apply
because the sale did not take place in the market
but only
on the street near it.]
(3) Meaning of Tradition
Tradition, or delivery, is a mode of acquiring
ownership,
as a consequence of certain contracts such as
sale, by virtue
of which, actually or constructively, the object is
placed in
the control and possession of the vendee.
134).
Art. 1498
115
CIVIL CODE OF THE PHILIPPINES
2) The buyer must be put under control. (Addison
v.
Felix, supra and Masallo v. Cesar, supra).
3) There must be the intention to deliver the thing
for
purposes of ownership (not, for example, of
merely
allowing the inspection or examination of the
keys,
nor for the purpose of having said keys repaired).
(10 Manresa 132).]
(2) Rules on Constructive Delivery
(a) If a seller has no actual possession, he cannot
transfer
ownership by constructive delivery. (Masallo v.
Cesar, 39
Phil. 134). The reason is that in every kind of
delivery,
the transferee should have control, but here
control
cannot be had since it is in the possession of
another.
(Addison v. Felix, 38 Phil. 404 and Vda. de
Sarmiento
v. Lesaca, L-15385, Jun. 30, 1960).
CASES:
Addison v. Felix
38 Phil. 404
Art. 1498
117
CIVIL CODE OF THE PHILIPPINES
only when there is no impediment that may
prevent the
turning over of the property.
Asuncion, et al. v. Hon. Plan
GR 52359, Feb. 24, 1981
In an action for partition, defendants agreed to
deliver to plaintiff 24 hectares of land. Plaintiffs
heirs
then executed lease contracts involving said 24
hectares
with certain persons, not parties in the partition
case.
When the lessees failed to pay the rent, the
plaintiffs
heirs moved for the issuance of an alias writ of
execution
in the partition case, asking in effect for the
delivery to
them of the 24 hectares. The motion cannot be
granted,
for by the execution of the lease contracts, the
judgment
in the partition case had already been executed.
A new
action is needed to out the lessees, since they
were not
parties in the partition case.
(b) There can be no constructive delivery by
means of a
transit.
(b) The right to get back the goods exists only
when the
goods are still in transitu. (See In re Arctic Store,
258
F. 688).
(c) Taking of the property in transit by an
unauthorized agent
of the buyer does not extinguish the right of
stoppage in
transitu. (Kingman and Co. v. Denison, 84 Mich.
608).
(2) Effect of Refusal to Receive
If upon arrival the buyer unjustifi ably refuses to
receive
the goods, the goods are still in transitu and
therefore,
the seller may still exercise the right of stoppage.
(Tufts v.
Sylvester, 79 Me. 213).
Art. 1532. The unpaid seller may exercise his
right of
stoppage in transitu either by obtaining
actual possession of
the goods or by giving notice of his claim to
the carrier or
other bailee in whose possession the goods
are. Such notice
may be given either to the person in actual
possession of
the goods or to his principal. In the latter case
the notice,