OBLIGATIONS OF THE BUYER
(ARTS. 1582-1593)
1. Accept delivery of the thing sold
2. Pay the price of the thing sold (Art.1582)
ACCEPTANCE
Modes of accepting goods:
a. Buyer intimates to the seller that he has
accepted the goods.
b. Goods delivered to the buyer and he does
any act in relation to them which is
inconsistent with the ownership of the
seller.
c. After the lapse of a reasonable time, the
buyer retains the goods without
intimating to the seller that he has
rejected them. (Art 1585)
RIGHTS OF THE BUYER (UNLESS
otherwise agreed):
1. Not bound to accept delivery of goods by
installments (Art. 1583)
2. Reasonable opportunity to examine the goods
upon delivery to ascertain whether or not they
are in conformity with the contract before
accepting the same
 BUT when the seller delivers the goods to
a carrier upon the terms that the same
shall not be delivered to the buyer until
he has paid the price, the buyer has no
right to examine the goods before
payment unless there is an agreement or
usage of trade permitting such
examination. (Art.1584)
3. Acceptance of the goods shall not discharge
the seller from liability for breach of any
promise or warranty
 BUT the buyer must give the seller notice
of the breach of promise or warranty
within a reasonable time after the buyer
knows or ought to know of such breach,
otherwise the seller shall not be liable
therefor. (Art.1586)
4. Reject delivery of a wrong quantity of goods
or of goods of a different description not
included in the contract which are mixed with
the goods sold. (Art.1522)
5. If he refuses to accept the goods, having the
right to do so, he is not bound to return them to
the seller; it being sufficient that he notifies the
seller of his refusal to accept.
 If he voluntarily constitutes himself a
depositary of the goods, he shall be liable
as such. (Art.1587)
 Effect of refusal to accept goods
without just cause: title to the goods
passes to the buyer from the moment
they are placed at his disposal, except if
ownership has been reserved by the seller
(Art.1588)
PAYMENT
Three cases where the buyer is liable for
interest for the period between delivery
and payment: (STD)
a. It is stipulated;
b. Thing sold produces fruits or income;
c. Buyer is in default (interest accrues from
the time of judicial or extrajudicial demand for
the payment of the price) (Art. 1589)
RIGHTS OF THE BUYER
1. Suspend payment
WHEN:
a. He is disturbed in the possession or
ownership of the thing acquired or has
reasonable grounds to fear such
disturbance,
b. by a vindicatory action or a foreclosure of
mortgage
UNTIL WHEN:
 until the seller has caused the
disturbance or danger to cease
EXCEPTIONS TO SUSPENSION OF
PAYMENT:
a. When the seller gives security for the
return of the price in a proper case
b. When it has been stipulated that,
notwithstanding any such contingency,
the buyer shall be bound to pay
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A mere act of trespass shall not authorize the
suspension of the payment. (Art.1590)
2. In the sale of immovable property, to pay even
after the expiration of the period agreed upon,
 as long as no demand for rescission of the
contract has been made upon him either
judicially or by a notarial act,
 even though it may have been stipulated
that rescission shall of right take place
upon failure to pay the price at the time
agreed upon. (Art.1592)
ACTIONS FOR BREACH OF CONTRACT
OF SALE OF GOODS
A. Action for the price of goods
 Available when:
1. Ownership has passed to buyer and buyer
wrongfully neglects or refuses to pay;
2. Price payable on a certain day irrespective of
delivery and buyer wrongfully neglects or
refuses to pay although ownership in the goods
has not passed; or
3. Buyer notifies seller of his repudiation of the
contract after the seller has completed the
manufacture of the goods or had procured the
goods to be delivered, and the goods cannot
readily be resold for a reasonable price.
(Art.1595)
B. Action for damages for non-
acceptance, where the buyer wrongfully
neglects or refuses to accept and pay for
the goods (Art.1596)
Measure of damages:
- estimated loss directly and naturally resulting
in the ordinary course of events from the buyer’s
breach
- where there is an available market for the
goods (in the absence of special circumstances):
difference between the contract price and the
market price at the time the goods ought to have
been accepted or if no time fixed, at the time of
refusal to accept
- labor performed and expenses made by the
seller before receiving notice of the buyer’s
repudiation or countermand
- profit the seller would have made if sale had
been fully performed
2. Rescission by giving notice of election to
rescind to the buyer (Arts.1597&1593)
 Where the goods have not been delivered
to the buyer and the buyer has
repudiated the contract of sale, or has
manifested his inability to perform his
obligations thereunder or has committed
breach thereof, the seller may totally
rescind the contract by giving notice of
his election to do so to the buyer.
C. Action for specific performance
(Art. 1598)
WHEN:
Where the seller has broken the contract to
deliver specific or ascertained goods.
D. Remedies of buyer for breach of
warranty by seller (Art. 1599)
1. Recoupment – accept the goods and set up
the seller’s breach to reduce or extinguish the
price
2. Accept the goods and maintain an action for
damages for breach of warranty
3. Refuse to accept the goods and maintain an
action for damages for breach of warranty
4. Rescind the contract by returning or offering
the return of the goods, and recover the price of
any part thereof
NOTE: These are alternative remedies.
When rescission by buyer not allowed:
1. If the buyer accepted the goods knowing of the
breach of warranty without protest
2. If he fails to notify the seller within a
reasonable time of his election to rescind
3. If he fails to return or offer to return the goods
in substantially as good condition as they were
in at the time of the transfer of ownership to him
NOTE in relation to number 3: But if the
deterioration or injury of the goods is due to
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breach of warranty, such deterioration or injury upon, the period of redemption shall be 4
shall not prevent the buyer from returning or years. If there is no express agreement,
offering to return the goods to the seller and the same shall also be 4 years. Should
rescinding the sale. there be an agreement and they agreed
on the number of years, the period of
EXTINGUISHMENT OF SALE redemption cannot exceed 10 years.
CAUSES:  The vendor who fails to repurchase the
1. Payment/performance property within the period agreed upon
2. Prescription may, however, exercise the right to
3. Loss of thing due repurchase within 30 days FROM the
4. Annulment time final judgment was rendered in a
5. Novation civil action on the basis that the contract
6. Condonation/remission was a true sale with right of repurchase.
7. Confusion/merger  This refers to cases involving a
8. Compensation transaction where one of the parties
9. Rescission contests or denies that the true
10.Resolutory condition fulfilled agreement is one of sale with right to
11.Redemption repurchase; not to cases where the
a. Legal transaction is conclusively a pacto de
b. Conventional retro sale. Example: Where a buyer a
retro honestly believed that he entered
CONVENTIONAL REDEMPTION A.K.A merely into an Equitable Mortgage, not a
(PACTO DE RETRO SALE) pacto de retro transaction, and because
(Arts.1601-1618) of such belief he had not redeemed
within the proper period.
 A pacto de retro sale is a sale with right to
repurchase. It is a sale wherein the
This right is available to:
vendor may buy back the property within
1. Seller (or his agent/heirs/assigns)
the time agreed upon.
2. Creditors of seller, AFTER they have
 Available when the seller reserves the
exhausted the seller’s property
right to repurchase the thing sold in the
 If co-owners, each may redeem only his
same instrument of sale as one of the
respective share
stipulations of the contract.
 Also, if a sole owner sells an immovable
 The right which the vendor reserves to
himself, to reacquire the property sold and leaves several heirs, each heir may
provided he returns to the vendee: redeem only his share.
a. the price of the sale; NOTE: In these 2 cases, the buyer a retro may
b. expenses of the contract; demand all the sellers a retro or heirs to buy or
c. any other legitimate payments made redeem the whole thing and he cannot be
therefore and; compelled to agree to a partial redemption.
d. the necessary and useful expenses made
on the thing sold; and Enforceable against:
e. fulfills other stipulations which may have 1. Buyer (or his agent/heirs/assigns)
been agreed upon.  If the land is registered, the right to
redeem must be annotated in the title in
PERIOD OF REDEMPTION
order to prejudice a subsequent buyer
 If the parties agree that there is right of from the buyer a retro.
redemption but no period was agreed
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2. A buyer of a part of an undivided immovable
who acquires the whole thereof may compel the
seller to redeem the whole property.
3. If the buyer leaves several heirs, action to
redeem may be brought against each heir only
for his own share, whether or not the thing has
been partitioned, UNLESS in the partition, one
heir was awarded with the thing sold, in which
case he may be sued for redemption of the whole
thing
NOTE: The general rule in redemption is that it
is not sufficient that a person offering to redeem
manifests his desire to do so. The statement of
intention must be accompanied by an actual and
simultaneous tender of payment for the full
amount of the repurchase price.
Effects of redemption:
1. The seller shall receive the thing free
from all charges or mortgages
constituted by the buyer BUT he shall
respect leases executed by the buyer in
good faith and in accordance with local
custom.
2. If there are growing fruits at the time of
sale and at the time of redemption: no
reimbursement or prorating if the buyer
did not pay indemnity at the time of sale
3. If there were no growing fruits at the time
of sale, but some exist at the time of
redemption: fruits prorated (buyer
entitled to part corresponding to time he
possessed the land in the last year,
counted from the anniversary of the date
of sale)
Effect of non-redemption: Ownership
consolidated in the buyer BUT the consolidation
shall not be recorded in the Registry of property
w/o a judicial order, after the vendor has been
duly heard.
CONTRACT OF SALE (with right to
repurchase or absolute) vis-à-vis EQUITABLE
MORTGAGE
 One which lacks the proper formalities,
form of words, or other requisites
prescribed by law for a mortgage, but
shows the intention of the parties to
make the property subject of the contract
as security for a debt and contains
nothing impossible or contrary to law
 A contract of sale (whether with right of
purchase or purported as absolute) is
presumed to be an equitable mortgage in
ANY of the following cases:
1. Price unusually inadequate;
2. Possession retained by the seller as lessee or
otherwise;
3. Period of redemption extended (or granted
anew) upon or after the expiration of the right to
repurchase;
4. Part of the purchase price retained by the
seller;
5. Payment of taxes on the thing sold borne by
the seller;
6. Any other case where it may be fairly inferred
that the real intention of the parties is for the
transaction to secure a debt or other obligation.
When can there be presumption as to
Equitable Mortgage?
Under Art 1602, 2 requisites must concur:
1) Parties must have entered into a contract
denominated as a contract of sale
2) The intention of the parties was to secure an
existing debt by way of mortgage.
NOTE: In case of doubt, a contract purporting
to be a sale with right to repurchase shall be
construed as an equitable mortgage.
Remedy of apparent vendor if equitable
mortgage is the real intention:
REFORMATION OF THE INSTRUMENT
LEGAL REDEMPTION (Arts. 1619-1623)
 The right to be subrogated, upon the
same terms and conditions stipulated in
the contract, in the place of one who
acquires a thing by (1) purchase or (2)
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 dation in payment, or (3) by any other
transaction whereby ownership is
transferred by onerous title.
 May be effected against movables or
immovables.
Instances of legal redemption and periods for their exercise

TO WHOM GRANTED PERIOD TO REDEEM

Co-owner 30 days from notice
(Art.1620, CC) - in writing
- by the seller
- of the actual execution and delivery of
the deed of sale
*Actual knowledge of the sale immaterial

Adjoining owner of 30 days from notice

rural land - in writing
(Art.1621,CC) - by the seller
- of the actual execution and delivery of
the deed of sale
*Actual knowledge of the sale immaterial

Adjoining owner of 30 days from notice

urban land - in writing
(Art.1622,CC) - by the seller
- of the actual execution and delivery of
the deed of sale
*Actual knowledge of the sale immaterial

Taxpayer in case of 1 year from date of

tax sale (Sec. 215, forfeiture
NIRC)

Debtor-mortgagor, successors-in interest, 1 year from the

judicial/judgment creditor, any person date of the sale
having a lien on the property, in case of
extrajudicial foreclosure of mortgage (Act
No. 3135. Sec. 6. )

Debtor-mortgagor in case of judicial 90 days from

foreclosure of real estate mortgage IF finality of judgment
the mortgagee is a bank or a banking
institution. (The General Banking
Law of 2000)

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How exercised: by either a formal offer to use of the land appears to be best
redeem or the filing of an action in court justified
together with the consignation of the
redemption price within the reglementary
period.

Redemption by co-owner
 Available when the shares of any or all of
the other co-owners are sold to a 3rd
person (anyone not a co-owner)
 If price grossly excessive, the
redemptioner shall pay only a reasonable
one.
 If 2 or more co-owners want to redeem:
they may do so in proportion to their
respective shares
 The right of redemption of co-owners
excludes that of adjoining owners.

Redemption by adjoining owner of rural

land
 Available when the area of rural land is 1
hectare or less, unless the grantee does
not own any rural land.
 NOT available when the adjoining lands
are separated by brooks, drains, ravines,
roads, and other permanent servitudes
for the benefit of other estates
 Priority if 2 or more adjoining owners
want to redeem:
1. owner of smaller adjoining land; or
2. if with same area, owner who first requested
redemption

Redemption by adjoining owner of urban

land
 Granted in addition to right of pre-
emption
 Available when the urban land:
1. is so small and so situated that a major portion
of it cannot be used for any practical purpose
w/in a reasonable time;
2. was bought merely for speculation; and
3. was resold.
 Priority if 2 or more adjoining owners
want to redeem: owner whose intended
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