Professional Documents
Culture Documents
4th
LAW ON SALES
YEAR REVIEW CLASS
Exception
i. separation of property agreed
(marriage settlement)
ii. judicial separation of property
2. Licit
3. Determinate or determinable
EXISTING, FUTURE, CONTINGENT
Full
Title
and he
with suspensive
---
Distinct and
from
the purchase P
Presupposes a perfected
Contract of Sale
Contract
---
No perfected
of Sale
Buyer is bound to pay
the balance after
earnest money is paid
--Buyer should
pay the entire purchase price
Bert offers to buy Simeons property under the following
terms and conditions: P1 million purchase price, 10%
option money, the balance payable in cash upon the
clearance of the property of all illegal occupants. The
option money is promptly paid and Simeon clears the
property of illegal occupants in no time at all. However,
when Bert tenders payment of the balance and ask
Simeon for the deed for absolute sale, Simeon suddenly
has a change of heart, claiming that the deal is
disadvantageous to him as he has found out that the
property can fetch three time the agreed purchase price.
Bert seeks specific performance but Simeon contends that
he has merely given Bert an option to buy and nothing
more, and offers to return the option money which Bert
refuses to accept.
A. Explain the nature of an option contract. (2%)
B. Will Berts action for specific performance prosper?
Explain. (4%)
C. May Simeon justify his refusal to proceed with the sale
by the fact that the deal is financially disadvantageous to
him? Explain. (4%)
Ubaldo is the owner of a building which has been leased
by Remigio for the past 20 years. Ubaldo has repeatedly
assured Remigio that if he should decide to sell the
building, he will give Remigio the right of first refusal. On
June 30, 1994, Ubaldo informed Remigio that he was
willing to sell the building for P5 Million. The following day,
Remigio sent a letter to Ubaldo offering to buy the
building at P4.5 Million. Ubaldo did not reply. One week
later, Remigio received a letter from Santos informing him
that the building has been sold to him by Ubaldo for P5
Million, and that he will not renew Remigio's lease when it
expires. Remigio filed an action against Ubaldo and Santos
for cancellation of the sale, and to compel Ubaldo to
execute a deed of absolute sale in his favor, based on his
right of first refusal.
a) Will the action prosper? Explain.
b) If Ubaldo had given Remigio an option to purchase the
building instead of a right of first refusal, will your answer
be the same? Explain.
In a 20-year lease contract over a building, the lessee is
expressly granted a right of first refusal should the lessor
decide to sell both the land and building. However, the
lessor sold the property to a third person who knew about
the lease and in fact agreed to respect it. Consequently,
the lessee brings an action against both the lessor-seller
and the buyer (a) to rescind the sale and (b) to compel
specific performance of his right of first refusal in the
sense that the lessor should be ordered to execute a deed
of absolute sale in favor of the lessee at the same price.
The defendants contend that the plaintiff can
neither seek rescission of the sale nor compel specific
performance of a "mere" right of first refusal. Decide the
case. [5%]
FORM OF SALES
1. Form not important in validity of sale
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2. When form is important for validity; exception by
specific provision of law;
Art 748
Donation of
movable
Art 749
Donation of
immovable
Art 1874
Sale of piece of land
through an agent
Art 2134
Contract of antichresis;
amount of principal
and
of the interest
Art 1771
Partnership; immovable
property or real
rights are contributed
Art 1773
Partnership; inventory of
immovable property
contributed
Art 1956
Interest for using
someone elses money
Art 2140
Chattel mortgage
3. When form is important for enforceability (STATUTE OF
FRAUDS)
a. Sale to be performed 1 year after
b. Agreement to sell things with value of 500 and up
c. Sale of real property or interest therein
Exception:
i. When there is a note or memorandum in writing &
subscribe by party or his agent (contains essential terms
of the contract)
ii. When there has been partial performance/execution
(seller delivers with intent to transfer title/receives price)
iii. When there has been failure to object to presentation
of evidence (oral)
CONSUMMATION / PERFORMANCE
DELIVERY OF THE THING
Transfer ownership (tradicion) twin obligation:
1. transfer title(ownership)
2. delivery of the thing
Different kinds of delivery:
1. Actual - when thing sold is placed in the control &
possession of the buyer
2. Constructive
DIFFERENT FORMS OF CONSTRUCTIVE DELIVERY:
1. Traditio Longa Manu - when SELLER points to the
property without need of actually delivering
2. Traditio Brevi Manu - before contract of sale, the would
be buyer was already in possession of the would be
subject matter of sale
3. Symbolic delivery ex: delivery of the keys to a car
4. Constitutum possessarium - at the time of perfection of
contract, seller continues to hold possession merely as a
holder
5. Execution- subject matter should be within control of
seller; he should have capacity to deliver at the time of
execution of public instrument when he wants to effect
actual delivery :
Exception:
a. when there is stipulation to contrary, execution does
not produce effect of delivery
b. when at the time of execution of instrument, subject
matter was not subject to control of the seller
Note: Transfer of ownership could still be effected even
when thing is mortgaged.
6. Negotiable documents of title & non negotiable
instruments
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Where to accept: at time & place
stipulated in the contract; if none
specified at the time & place of delivery
Exceptions:
Estoppel
Recording laws
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from E's garage with no fault on E's part and was never
recovered.
Is E legally bound to pay the said unpaid balance of
P75.000.00? Explain your answer.
REMEDIES OF PARTIES FOR BREACH OF CONTRACT
OF SALE
REMEDIES OF UNPAID SELLER: Movables
Requisites:
1. Subject matter goods
2. Seller is unpaid
When to exercise:
a. goods sold without stipulation as to credit
b. goods sold on credit but term of credit has expired
c. buyer becomes insolvent
Reached point of
destination
Before reaching
destination, buyer met
seller along the way
SPECIFIC PERFORMANCE
RESCISSION
FORECLOSURE
RESCISSION
Rescission under Art. 1592
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What is needed is demand for rescission and not
demand for payment
SUSPEND PAYMENT
2. In case of subdivision or condo projects
Sales on installments
with interest
What else to remember:
Other rights:
a. Sell rights to another
b. Reinstate contract by updating within 30 days before
cancellation
c. Deed of Sale to be done by notarial act
d. To pay full installment in advance the balance of price
anytime without interest
e. Have full payment annotated in certificate of title
What are the so-called "Maceda" and "Recto" laws in
connection with sales on installments? Give the most
important features of each law. (5%)
X sold a parcel of land to Y on 01 January 2002, payment
and delivery to be made on 01 February 2002. It was
stipulated that if payment were not to be made by Y on
01February 2002, the sale between the parties would
automatically be rescinded. Y failed to pay on 01 February
2002, but offered to pay three days later, which payment
X refused to accept, claiming that their contract of sale
had already been rescinded. Is Xs contention correct?
Why? 5%
Priscilla purchased a condominium unit in Makati City from
the Citiland Corporation for a price of P10 Million, payable
P3 Million down and the balance with interest thereon at
Includes
Defect on animals
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1. Warranty that seller has a right to sell
Requisites:
1. buyer is evicted in whole or in part from
the subject matter of sale
2. there is a final judgment
3. basis of eviction is a right prior to sale or
an act imputable to vendor
4. seller has been summoned in the suit for
eviction at the instance of buyer; or
made 3rd party defendant through 3rd
party complaint brought by buyer
LIABILITY OF SELLER:
However:
1. seller in bad faith & there is waiver
against eviction null & void
2. buyer without knowledge of a particular
risk made general renunciation of
warranty not waiver but merely limits
liability of seller in case of eviction
3. buyer with knowledge of risk of eviction
assumed its consequences & made a
waiver vendor not liable (applicable
only to waiver of warranty against
eviction)
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1.
by purchase or
by dation in payment or
Among co-heirs
Among co-owners
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a. Rural land
Sale of business
3. The sale, transfer, mortgage or assignment of all, or
substantially all of the fixtures and equipment used in
and about the business.
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Seller subject to
penal sanctions
Penalty
Imprisonment Not less than 6 months
Fine Not exceeding P5,000
Imprisonment and Fine
Seeking to streamline its operations and to bail out its
losing ventures, the stockholders of X corporation
unanimously adopted a proposal to sell substantially all of
the machineries and equipment used in and about its
manufacturing business and to sink the proceeds of the
sale for the expansion of its cargo transport services.
a) Would the transaction be covered by the
provisions of the Bulk Sales Law?
b) How would X corporation effect a valid sale?
PD 957
Subdivision and Condominium buyer's Protective Decree
to guarantee
contracts to sell,
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subdivision project and effective measures have
been provided to ensure such utilization.
SECTION 19. Advertisements.
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interests in the common areas or, in a proper case, the
membership or shareholdings in the condominium
corporation:
Can you effect transfer to non-Filipino Citizens?
Where the common areas in the condominium project are
owned by the owners of separate units as co-owners
thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens, or
corporations at least sixty percent of the capital stock of
which belong to Filipino citizens, except in cases of
hereditary succession. (Sec. 5)
How can a corporation effect a valid transfer of common
areas in a condominium project?
Where the common areas in a condominium project are
held by a corporation, no transfer or conveyance of a unit
shall be valid if the concomitant transfer of the
appurtenant membership or stockholding in the
corporation will cause the alien interest in such
corporation to exceed the limits imposed by existing laws.
(Sec. 5)
What are the incidents of a condominium grant in
connection to sale and other form of alienation?
(f) Each condominium owner shall have the exclusive
right to mortgage, pledge or encumber his condominium
and to have the same appraised independently of the
other condominiums but any obligation incurred by such
condominium owner is personal to him.
(Sec. 8)
(g) Each condominium owner has also the absolute right
to sell or dispose of his condominium unless the master
deed contains a requirement that the property be first
offered to the condominium owners within a reasonable
period of time before the same is offered to outside
parties (Sec. 8)
Can a unit owner demand partition by sale of the
condominium project?
Sec. 8. Where several persons own condominiums in a
condominium project, an action may be brought by one or
more such persons for partition thereof by sale of the
entire project, as if the owners of all of the condominiums
in such project were co-owners of the entire project in the
same proportion as their interests in the common areas.
What are the conditions before a unit owner demand
partition by sale of the condominium project?
(a) That three years after damage or destruction to the
project which renders material part thereof unit for its use
prior thereto, the project has not been rebuilt or repaired
substantially to its state prior to its damage or
destruction, or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that condominium owners holding in
aggregate more than thirty percent interest in the
common areas are opposed to repair or restoration of the
project; or
(c) That the project has been in existence in excess of fifty
years, that it is obsolete and uneconomic, and that
condominium owners holding in aggregate more than fifty
percent interest in the common areas are opposed to
repair or restoration or remodeling or modernizing of the
project; or
(d) That the project or a material part thereof has been
condemned or expropriated and that the project is no
longer viable, or that the condominium owners holding in
aggregate more than seventy percent interest in the
common areas are opposed to continuation of the
condominium regime after expropriation or condemnation
of a material portion thereof; or
(e) That the conditions for such partition by sale set forth
in the declaration of restrictions, duly registered in
accordance with the terms of this Act, have been met.
What is the duty of the project owner prior to the
conveyance of any condominium unit?
Sec. 9. The owner of a project shall, prior to the
conveyance of any condominium therein, register a
declaration of restrictions relating to such project, which