BALUCAN, LUIGI E.

Obligations of the Vendor

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

1. Unpaid seller of goods- the unpaid seller is one who has not been paid or

tendered the whole price or who has received the bill of exchange or another negotiable

instrument as conditional payment and the condition on.

2.Traditio brevi manu; - the vendee has already the possession of the thing sold by

virtue of another title as when the lessor sells the thing leased to the lessee.

EXAMPLE: Luigi is renting a two-storey house and lot located at Taguilon,Dapitan City

for two years now. On his third year, he decided to buy the house and lot for cash from

Conie. In this case, there is no need to deliver the house to Luigi because he already

holds the said property. He is now the owner of the house and lot and no longer a

lessee.

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; - is 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- defect in the article sold against which defect the seller is bound

to warrant. Must not only be hidden, but must also be of such nature that expert

knowledge is not sufficient to discover it.

6. Implied warranty of fitness; when the buyer, expressly or by implication,

manifests to the seller the particular purpose for which the goods are acquired; and the

buyer relies upon the seller’s skill or judgment

7. Eviction; As a judicial process whereby the vendee is deprived of the whole part

of the thing purchased by the virtue of a final judgment based on the right prior to the

sale or an act imputable to the vendor.

vendor is responsible to the vendee for any hidden faults or defects in the thing sold,

even though he was not aware thereof. This provision shall not apply if the contrary has

been stipulated, and the vendor was not aware of the hidden faults or defects in the

thing sold. (1485)

II. Discussions. Discuss the following:

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

the owner thereof.

As a general rule, No one can give what he has not. The buyer gets only such

rights as the seller had. A spring cannot rise higher than its source. Stated

below are the exemption to the general rule:

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

denying the seller’s authority to sell

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

he were the true owner thereof

c. Where the sale is sanctioned by statutory or judicial authority

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

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

time of the sale; and

f. Where the seller subsequently acquires title

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

sold?

The ownership of the thing sold shall be transferred to the vendee upon the delivery

thereof which may be affected in any of the following modes:

a) By actual or real delivery

b) By constructive or legal delivery

c) By 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.
a) The seller must be unpaid.

b) The buyer must be insolvent.

c) The goods must be in transit.

d) The seller must either actually take possession of the goods sold or give notice

of his claim to the carrier or other person in possession

e) The seller must surrender the negotiable document of title, if any, issued by the

carrier or bailee.

f) The seller must bear the expenses of the delivery of the goods after the exercise

of the right.

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

The implied warranties in sales are as follows:

a) implied warranties as to seller’s title

b) implied warranties against hidden defect or unknown encumbrance

c) implied warranties as to fitness or merchantability

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

• Sale or return – is 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

• Sale on trial or approval – a contract in the nature of an option to

purchase if the goods prove satisfactory, the approval of the buyer being a

condition precedent. Here, the title shall continue in the seller until the sale has

become absolute either by the buyer’s approval of the goods, or by his failing to

give notice of dissatisfaction to the seller within the time contemplated by the

parties.
 Sale or return Sale on trial
1. Sale subject to a resolutory condition 1. Sale subject to a suspensive condition
2. Depends entirely on the will of the 2. Depends on the character or quality
buyer of the goods
3. Ownership of the goods passes to the 3. Ownership remains in the seller until
buyer on delivery and subsequent the buyer signifies his approval or
return of the goods reverts acceptance to the seller
ownership in the seller 4. Risk still remains with the seller
4. The risk of loss rests upon the buyer

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

sold. Where is the place of delivery?

First paragraph of article 1521 states, whether it is for the buyer to take

possession of the goods or of the seller to send them to the buyer is a question

depending in each case on the contract, express or implied, between the parties. 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; but in

case of a contract of sale of specific goods, which to the knowledge of the parties when

the contract or the sale was made were in some other place, then that place is the

place of delivery.

7. What are the principal obligations of the vendor?

The principal obligations of the vendor are as follows:

a) To transfer the ownership of the determinate thing sold.

b) To deliver the thing, with its accessories and accessions, if any, in the condition

in which they were upon the perfection of the contract.

c) To warrant against eviction and against hidden defect

d) To take care of the thing, pending delivery with proper diligence.

e) To pay expenses 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 the delivery of the

thing, the buyer will bear the loss. An exception to the principle of Res Perit Domino, the

risk of loss by accident or by fortuitous event without the fault of the seller, it is to be

borne by the buyer.

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 can no longer cancel the sale.

Article 1539. The obligation to deliver the thing sold includes that of placing in the

control of the vendee all that is mentioned in the contract, in conformity with the

following rules:

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.

The same shall be done, even when the area is the same, if any part of the immovable

is not of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee, when the

inferior value of the thing sold exceeds one-tenth of the price agreed upon.

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?

with the corresponding reduction of the price mentioned because the price

stipulated is fixed

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?

C has the better right to the property.

Stated in the second paragraph of article 1544 that, Should it be immovable property,

the ownership shall belong to the person acquiring it who in good faith first recorded it in

the Registry of Property.

b. Suppose C did not also register the sale. To whom should the property be

awarded?

B is considered the owner.

In this case, if no one take possession or registered the sale, the person who have the

oldest title shall be considered the owner.

Therefore B is the owner because he have the oldest title.

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.

Under article 1548, 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.

The contracting parties, however, may increase, diminish, or suppress this legal

obligation of the vendor. (1475a)1548,

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.

Under article 1524, 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. (1466)

In general, the thing shall not be delivered unless the price is paid but there is an

exception to the rule. If the time is stated, then there is the right to demand exist

as long as the term of credit has not expired although B has not yet paid the

price.

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 sold provided that C bought the parcel of

land in good faith and the defect of the title is out of knowledge of C.

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?

No.

Under article 1546, any affirmation of fact or any promise by the seller relating to

the thing is an express warranty if the natural tendency of such affirmation or

promise is to induce the buyer to purchase the same, and if the buyer purchases

the thing relying thereon. No affirmation of the value of the thing, nor any

statement purporting to be a statement of the seller's opinion only, shall be

construed as a warranty, unless the seller made such affirmation or statement as

an expert and it was relied upon by the buyer.

A little exaggeration is apparently allowed by the law as a concession to human

nature. This is in accordance with the civil law maxim “simplex commendation
 non-obligat” or the principle “caveat emptor” (let the buyer beware).

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 already the owner of the parcel of land.

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.

With regard to movable property, its delivery may also be made by the delivery of

the keys of the place or depository where it is stored or kept. (1463a)