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Law on SalesArticle 1526 - 1550

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Subject to the provisions of thisTitle, notwithstandin that theownership in the oods !a" havepassed to the bu"er, the unpaid sellerof oods, as such, has#

1$ A lien on the oods or ri ht toretain the! for the price while he isin possession of the!%

2$ &n case of the insolvenc" of thebu"er, a ri ht of stoppin the oodsin transitu after he has parted with

A'T&(L) 1526

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*$ A ri ht of resale as li!ited b" thisTitle%

+$ A ri ht to rescind the sale as

li ewise li!ited b" this Title.here the ownership in the oods

has not passed to the bu"er, the

unpaid seller has, in addition to hisother re!edies, a ri ht ofwithholdin deliver" si!ilar to andcoe/tensive with his ri hts of lienand stoppa e in transitu where the

A'T&(L) 1526

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Subject to the provisions of thisTitle, the unpaid seller of oods whois in possession of the! is entitled toretain possession of the! untilpa"!ent or tender of the price in thefollowin cases, na!el"%

1$ .here the oods have been soldwithout an" stipulation as tocredit%

2$ .here the oods have been sold

A'T&(L) 152

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*$ .here the bu"er beco!esinsolvent

The seller !a" e/ercise hisri ht of lien notwithstandinthat he is in possession of theoods as a ent or bailee forthe bu"er

A'T&(L) 152

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)/a!ple#(1) S sold B a specifc ring to be paid 6

months later. No term o credit wasgiven.

(2) S sold B a specifc ring to be paid 6months later. By mutual agreement, B

is made already the owner, but S willact as depositary o the ring in themeantime. I the term expires, and Bhas not yet paid because he isinsolvent, may S still continuepossessing the ring even i he is nolonger the owner?

)S

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.here an unpaid seller had!ade part deliver" of the

oods, he !a" e/ercise hisri ht of lien on the re!ainder,unless such part deliver" hasbeen !ade under suchcircu!stances as to show anintent to waive the lien or ri htof retention

A'T&(L) 152

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The unpaid seller of oods loseshis lien thereon#1$ .hen he delivers the oods to a

carrier or other bailee for thepurpose of trans!ission to thebu"er without reservin theownership in the oods or the

ri ht to the possession thereof%2$ .hen the bu"er or his a ent

lawfull" obtains possession of

oods%

A'T&(L) 1524

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The unpaid seller of oods,

havin a lien thereon, does notlose his lien b" reason onl"that he has obtained jud !ent

for decree for the price ofoods

A'T&(L) 1524

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)/a!ples#!"# delivered the goods to the carrier or

the transmission to the buyer withoutreserving his right to the ownership inthe goods.

$"%n unpaid seller, who possessed thegoods thru a warehouseman, delivered tothe buyer a negotiable warehouse

receipt.

&"%n unpaid seller still in possession o thegoods sold brought an action to get thepurchase price. 'oes he lose his lien?

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Subject to the provision of thisTitle, when the bu"er of oods is orbeco!es insolvent, the unpaid sellerwho has parted with the possessionof the oods has the ri ht of stoppinthe! in transitu, that is to sa", he

!a" resu!e possession of the oodsat an" ti!e while the" are in transit,and he will then beco!e entitled to

the sa!e ri hts in re ard to the

A'T&(L) 15*0

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)/a!ple#

# sell his laptop to B or (!),))) with theagreement that B should pay the priceupon delivery to him. *hile the laptop isin transitu , # notice that B becomesinsolvent and lose the capacity to paythe price at the time o delivery.

# can exercise his right o stoppage intransitu .

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7oods are in transit within the !eaninof the precedin article#

81$9ro! the ti!e when the" are deliveredto a carrier b" land, water, or air, orother bailee for the purpose oftrans!ission to the bu"er, until thebu"er, or his a ent in that behalf, ta es

deliver" of the! fro! such carrier orother bailee%82$&f the oods are rejected b" the bu"er,

the carrier or other bailee continues in

possession of the!, even if the seller

A'T&(L) 15*1

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)/a!ple#

# sell his laptop to B. # delivered thelaptop to +, a carrier, so he woulddeliver it to B. (rovided that B or hisagent haven t received the laptop yet,then it is still in transitu.

I B re-ect the laptop or some reason,

and # re used to receive it bac . %nd +is still in the possession o the laptop,the laptop is still in transitu .

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7oods are no lon er in transit within the!eanin of the precedin article#81$&f the bu"er or his a ent in that behalf

obtains deliver" of the oods before

their arrival at the appointeddestination%82$&f, after the arrival of the oods at the

appointed destination, the carrier or

other bailee ac nowled es to the bu"eror his a ent that he holds the oods onhis behalf and continues in possessionof the! as bailee for the bu"er or hisa ent% and it is i!!aterial that further

A'T&(L) 15*1

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)/a!ple## sell his laptop to B, and let +, a baileeto deliver it to B. /pon arrival to itsdestination + ac nowledge to B that hewill hold or eep the laptop until Bcomes to pic it up.

In this case the laptop is no longer intransit.

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8*$ &f the carrier or the baileewron full" refuses to deliver theoods to the bu"er or his a ent inthat behalf

&f the oods are delivered to a ship,

frei ht train, truc , or airplanechartered b" the bu"er, it is a:uestion dependin on thecircu!stances of a particular case,whether the" are in the possession of

A'T&(L) 15*1

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)/a!ple## sell his car to B, B chartered a ship todeliver the car to him, even though the

ship is the carrier, i it holds the car onbehal o B then the car is no longer intransit.

But i the ship0s purpose is to -ustdeliver the car to B then the car is stillin transit.

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&f part deliver" of the oods hasbeen !ade to the bu"er, or hisa ent in that behalf, the re!ainderof the oods !a" be stopped intransitu, unless such part deliver"has been under such circu!stancesas to show an a ree!ent with thebu"er to ive up possession of thewhole of the oods

A'T&(L) 15*1

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)/a!ple#

# sell 1 cavans o rice to B. $ cavanswere already delivered and inpossession o B. *hen # ound outthat B is already insolvent # maystopped in transitu the remainingcavans o rice.

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The unpaid seller !a" e/ercise hisri ht of stoppa e in transitu either b"obtainin actual possession of theoods or b" ivin notice of his clai!to the carrier or other bailee in whosepossession the oods are Such notice!a" be iven either to the person in

actual possession of the oods or to isprincipal &n the latter case the notice,to be e;ectual, !ust be iven at suchti!e and under such circu!stancesthat the principal, b" the e/ercise of

A'T&(L) 15*2

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.hen notice of stoppa e in transitu is iven b" the seller to the carrier, orother bailee in possession of theoods, he !ust redeliver the oodsto, or accordin to the directions of,the seller The e/penses of suchdeliver" !ust be borne b" the seller

&f, however, a ne otiable docu!ent oftitle representin the oods has beenissued b" the carrier or other bailee,he shall not be obli ed to deliver or

justi

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)/a!ple#

# sell his car to B. # deliver the carto +, a carrier who will deliver thecar to B. #oon # was in ormed that B

is already insolvent.

# may exercise his right either byobtaining in actual possession or bygiving notice o his claim to thecarrier or other bailee.

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Art 15** .here the oods are onperishable nature, or where the sellere/pressl" reserves the ri ht of resalein case the bu"er should !a e

default, or where the bu"er has beenin default in the ti!e of pa"!ent ofthe price, for an unreasonable ti!e,an unpaid seller havin a ri ht of lienor havin stopped the oods intransitu !a" resell the oods =e shallnot thereafter be liable to an" pro

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for an unreasonable ti!e, an unpaidseller havin a ri ht of lien or havinstopped the oods in transitu !a"resell the oods =e shall notthereafter be liable to an" pro

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&t is not essential to the validit" ofa resale that notice of an intentionto resell the oods be iven b" the

seller to the ori inal bu"er 3utwhere the ri ht to resell is not basedon the perishable nature of theoods or upon an e/pressed

provision of the contract of sale, theivin or failure to ive such noticeshall be relevant in an" issueinvolvin the :uestion whether thebu er had been in default for an

A'T&(L) 15**

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&t is not essential to the validit" ofresale that notce of the ti!e andplace of such resale should be ivenb" the seller to the ori inal bu"er

The seller is bound to e/ercisereasonable care and jud e!ent in!a in a resale, and subject to thisre:uire!ent !a" !a e a resaleeither b" public or private sale =ecannot, however, directl" or

indirectl" bu" the oods

A'T&(L) 15**

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An unpaid seller havin the ri htof lien or havin stopped the oodsin transitu, !a" rescind the transferof title and resu!e the ownership in

the oods, where he e/pressl"reserved the ri ht to do so in casethe bu"er should !a e default, orwhere the bu"er has been in defaultin the pa"!ent of the price for anunreasonable ti!e The seller shallnot thereafter be liable to the bu"er

upon the contract of sale, but !a"

A'T&(L) 15*+

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The transfer of title shall not beheld to have been rescinded b" anunpaid seller until he has !anifestedb" notice to the bu"er or b" so!e

overt act an intention to rescind &tis not necessar" that such overt actshould be co!!unicated to thebu"er of the intention to rescindshall be relevant in an" issueinvolvin the rescind shall berelevant in an" issue involvin the

:uestion whether the bu"er had

A'T&(L) 15*+

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)/a!ple#B agree to buy # land or !)

million at the time o agreed date Bre use to buy the land o #. #resumes the ownership o the goods

and B is liable i their is a lossoccasionedby the breach ocontract.

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Subject to the provisions ofthis title, the unpaid seller?sri ht of lien or stoppa e intransitu, is not a;ected b"an" sale, or other disposition

of the oods which the bu"er!a" have !ade, unless theseller has assented thereto

A'T&(L) 15*5

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&f, however, a ne otiable docu!entof title has been issued for oods, noseller?s lien or ri ht to stoppa e intransitu shall defeat the ri ht of an"purchaser for value in ood faith towho! such docu!ent has beenne otiated, whether such

ne otiation be prior or subse:uentto the noti

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)/a!ple#

# sold to B cavan o rice or$)),))). But be B sell the cavan orice to 2. # has the right to recoverthe goods. But i the negotiabledocument is sell by B. # shall lose

the right to recover the goods and2 is having the right o the goods,

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The vendor is not bound todeliver the thin sold in case the

vendee should lose the ri ht to!a e use of the ter! asprovided in article 114

A'T&(L) 15*6

)/ ! l #

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)/a!ple#

# sold to B 3uitar or credit. # has

right to withhold delivery in any o theollowing situations4!" B becomes insolvent a ter theobligation in contract unless B givesguaranty or securities . 5xample4 2ar ,land house etc.$" B promise to mortgage his

appartment building to secure theprice but at the time the appartmentis not owned by B. B shall lose everyright to ma e use o the period..

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)/a!ple#

&" B promise to mortgage his car to

secured the payment but their is astorm at that time.*as totally destroyed by the storm. Bshall lose every right to ma e use othe period unless he gives a new onee ually satis actory.7" B obliged to repaint the car o #,

But B ailed to paint the car o #.1" B drive the car a ter the time odelivery and go to other country toavoid the payment.

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A'T&(L) 15*

The vendor is bound to deliverthe thin sold and its accessionsand accessories in the condition inwhich the" were upon theperfection of the contract

All the fruits shall pertain to thevendee fro! the da" on which thecontract was perfected 81+6 a$

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)/a!ple#

#abrina sold a cow to Bryanworth (!),))) No otherstipulations or conditions statedon the contract. *hile it0s still inthe possession o #abrina, thecow gave birth to a cal .

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A'T&(L) 15*

&n case of loss, deteriorationor i!prove!ent of the thin

before its deliver", the rules inarticle 11 4 shall be observed,the vendor bein considered thedebtor 8n$

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)/a!ple#

8s. 2orina sold her ring

to 8r. Nic o worth(9),))).

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A'T&(L) 15*4but, should this be not possible, thevendee !a" choose between aproportional reduction of the price andthe rescission of the contract,provided that, in the latter case, thelac in the area be not less than one-tenth of that stated

The obli ation to deliver the thin soldincludes that of placin in the controlof the vendee all that is !entioned in

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A'T&(L) 15*4The sa!e shall be done, even when

the area is the sa!e, if an" part of thei!!ovable is not of the :ualit"speci

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)/a!ple##usan sold to Bentong a lot consisting

o 1, 00 s uare meters at the rate o@1,000 00 per s uare meter.%. :he actual area being delivered is only 1,500

s . meters. :he rights o Bentong are4

!. Bentong may as or proportionatereduction in the price since the lac in area is lessthan the !;!) th o that stated in the contract.

1 10th

o !,

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)/a!ple#

!. #uppose that $1) s . meters should be

valued at @4*0 00 per s uare meters because oin erior uality. In erior value is ( &).))"it0s less than !;!) th o the price agreed upon

which is (!)).)) (!,))) x !;!)". Bentong may as or proportionatereduction o the price by paying only@1,6 2,500 $1) x ( &).))" @ !,71) x(!,))).))",otherwise he may as or rescission

$. #uppose that $1) s . meters should bevalued only at @ 50 00 per s uare meterbecause o in erior uality.

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A'T&(L) 15+0

&f in case of the precedinarticle, there is a reater area ornu!ber in the i!!ovable than

that stated in the contract, thevendee !a" accept the areaincluded on the contract and

reject the rest &f he accepts thewhole area, he !ust pa" for thesa!e at the contract rate

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)/a!ple#

# sold B a lot consisting o $,1))

s uare meters at the rate o $,))) per

s uare meter. Aowever, the area beingdelivered by # is $,6)) s uare meters.

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A'T&(L) 15+1

The provisions of the two

precedin articles shall appl"

to judicial sales

)/ ! l #

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)/a!ple#

% is the creditor o B. B didn0t pay his debt to

%. %s a conse uence, % brought a court actionagainst B to compel him or payment. :hecourt rendered the -udgment in avor o % andagainst B who was ordered to sell his land.#uppose the land which contains $,))) s .meter was bought by 2 or (!,1)) per s .meter

I the land contains less than $,))) s . meter apply %rt. !1&I the land contains more than $,))) s .meter apply %rt. !17)

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A'T&(L) 15+2

&n the sale of real estate, !adefor a lu!p su! and not at the rateof a certain su! for a unit !easureor nu!ber, there shall be noincrease or decrease of the price,althou h there be a reater or lessarea or nu!ber than that stated in

the contract The sa!e rule shall be applied

when two or !ore i!!ovable are

sold for a sin le price% but if

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A'T&(L) 15+2

its area or nu!ber should bedesi nated in the contract, thevendor shall be bound to deliverall that is included within the saidboundaries, even when it e/ceedsthe area or nu!ber speci

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)/a!ple#

% buys a piece o land rom B at thelump sum o (!) million. In thecontract, the area is stated to be !,)))s uare meters. :he boundaries are o

course mentioned in the contract.Now then it was discovered that theland within the boundaries really

contains !,1)) s uare meters. Is Bbound to deliver the extra 1))?*hat i the land included in theboundaries happen to be C5##.

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A'T&(L) 15+*

The actions arisin fro!articles 15*4 and 15+2 shall

prescribe in si/ !onths,counted fro! the da" ofdeliver"

)/a!ple#

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)/a!ple#% bought a piece o land rom B at thelump sum o (!) million on Danuary !,$)!1. :he said land was delivered on

Danuary $7, $)!1. In the contract, the areais stated to be !,))) s uare meters. :heboundaries are o course mentioned in thecontract.Now then it was discovered that the landwithin the boundaries really contains

!,1)) s uare meters. Is B bound todeliver the extra 1))?*hat i the land included in theboundaries happen to be C5##.

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A'T&(L) 15++

&f the sa!e thin should havebeen sold to di;erent vendees, theownership shall be transferred tothe person who !a" have

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A'T&(L) 15++

Should there be no inscription,the ownership shall pertain to theperson who in ood faith was

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)/a!ple# Bovable propert"# sold his computer to B who told # that hewould obtain delivery o the delivery o thecomputer a ter & days. Be ore the third

day, # sold that same computer to + whoimmediately too physical possession othe computer. + was not aware o theprevious sale to B. Neither was B aware o

the sale made to + because the sale to +had not yet ta en place at the time that Bpurchased the computer. *ho has a betterright to the computer?

&!! bl t"

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&!!ovable propert"

=n 8ay !, # sold his lot to B. :he deed o

sale was in a private instrument. =n 8ay&, # sold the same lot to + in a publicinstrument. =n 8ay 1, # sold again the

said lot to E in a public instrument. Eimmediately registered the sale withFegister o 'eeds. B, + and E din not

now o the sale made to the other twoand none o them too physicalpossession o the lot.

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%.*ho has a better right to the lot?B. #uppose E did not register the sale or

he registered the sale but he was in

bad aith, who has a better right to thelot?

2. #uppose all the sales were in a private

instrument and all buyers are in goodaith, who has a better right to the lot?

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A'T&(L) 15+5

.here the obli ation of eitherpart" to a contract of sale is subjectto an" condition which is notperfor!ed, such part" !a" refuseto proceed with the contract or he!a" waive perfor!ance of thecondition &f the other part" has

pro!ised that the condition shouldhappen or be perfor!ed, such

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)/a!ple#

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)/a!ple#

!" B buyer" entered into a contractwith # or the purchase o certainmachinery. :he arrival o the goodsto be shipped rom Dapan is made a

condition o the bargain, therebeing no promise by # that thegoods will arrive.

$" # promised to sell his parcel oland to B should # win a casepending in the #upreme 2ourt. #

lost the case.

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A'T&(L) 15+6An" aCr!ation of fact or an"

pro!ise b" the seller relatin to thethin is an e/press warrant" if thenatural tendenc" of such aCr!ation

or pro!ise is to induce the bu"er topurchase the sa!e, and if the bu"erpurchases the thin rel"inthereon o aCr!ation of the valueof the thin , nor an" state!entpurportin to be a state!ent of theseller?s opinion onl", shall be

construed as a warrant", unless the

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)/a!ple #

# sells to B an automobile or(6),))).)) telling the latter thatit is a ! ) model and that it isworth about (

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)/a!ple# !&7)

5xample 4 :he li uid soap that can washa thousand plates !&7!5xample 4 #, a armer, who nowsnothing about gems, tells B that in his#0s" opinion, his ring is embellishedwith diamond and that he is selling it. B

buys the ring believing that the ring isadorned with diamond. Cater, hediscovers that the gemstone is reallyemerald.

)/a!ple#

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)/a!ple#

!&7&

5xample 4 # has a ring which he honestlybelieves is adorned with diamond. AeoGers to sell the ring to B telling B thatthe gemstone is diamond. B buys the ringbelieving it to be so. Cater, he discoversthat the gemstone is emerald.

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A'T&(L) 15+

&n a contract of sale, unless acontrar" intention appears, thereis#

81$ An i!plied warrant" on thepart of the seller that he has aright to sell the thin at the ti!e

when the ownership is to passand that the bu"er shall fro!that ti!e have and enjo" the

le al and peaceful possession of

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)/a!ple#

# sold a parcel o land to Bowned by +. B entered andoccupied the property.#ubse uently, B was evictedo possession by court order.

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)/a!ple#

# sold to B a specifc car or (!)) ,))). *hile B is driving the car, thetwo ront tires gave away at thesame time. %t the time o the sale,these tires are already worn>out.2an B fle an action or warranty

against hidden de ect?

&( )

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A'T&(L) 15+)viction shall ta e place whenever

b" a

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)/a!ple#

# sold to B a parcel o land. Bregistered the sale. Cater, # sold thesame land to + and the latter

occupied the land. B fled an actionagainst + or ownership andpossession because it was + who isoccupying the land and re used todeliver the land to B. + as ed thecourt to summon # to defned theaction fled against to him.

A'T&(L) 15 4

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A'T&(L) 15+4

The vendee need notappeal fro! the decision in

order that the vendor !a"co!e liable for eviction

A'T&(L) 1550

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A'T&(L) 1550

.hen adverse possessionhad been co!!enced beforethe sale but the prescriptiveperiod is co!pleted after thetransfer, the vendor shall not

be liable for eviction

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)/a!ple#

# sold to B a parcel o land which isclaimed by 2 who has been inpossession o the property in the

concept o owner publicly andcontinuously or &) years. /nder thelaw, 2 is deemed to have ac uiredownership over the land byprescription without need o title oro good aith.