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F.A.S Sales (Free alongside ship): Delivery alongside the Where it is stipulated that deliveries must be made to the
vessel completes the effect of the tradition. buyer or his duly authorized representative named in the
F.O.B Sales (Free on Board): Delivery of the goods to contacts, the seller is bound to deliver in such manner only,
the carrier is equivalent to delivery to the buyer. unless the buyer specifically designated someone to receive
Risk of loss pertains to the delivery. - Lagoon V. Hooven Comalco Industries.Inc
buyer.
C.I.F Sales (Cost Insurance and Freight): Price fixed D. WHEN BUYER REFUSES TO ACCEPT
covers not only the cost of the goods, but the expense of
freight and insurance to be paid by the seller. Article 1588 to the Civil Code:
Delivery must be made pursuant to a valid sale 1. Rules on Effect of Delivery for Movable
Delivery must be effected when seller has Article 1522 of the Civil Code Provides the rules covering
ownership over the subject matter of sale so the delivery of goods.
delivered.
Article 1537, in the sale of movables, the seller is obliged
David vs. Misamis Occidental II Electric Cooperative, Inc. to deliver the accessories and accessions in the condition in
which they were upon the perfection of the contract.
“ the title to the property sold passes to the
vendee upon the delivery of the thing sold;
vendor loses the ownership over the property and A. WHEN GOODS HELD BY THIRD PARTY
cannot recover it until and unless the contract is
resolved or rescinded” Where the goods at the time of sale are in the
possession of a third person, the seller has not fulfilled
A. delivery must be made pursuant to a valid sale his obligation to deliver to the buyer unless and until
such third person acknowledges to the buyer that he
Delivery would produce the effect of transferring holds the goods on the buyer’s behalf.
ownership to the buyer only when it is made pursuant to a
valid sale. B. Reservation of ownership
When sale is fictituos and void, no title over the subject Ownership will not transfer to the buyer in case of express
matter of the sale can be conveyed. reservation, despite actual delivery.
Nemo Potest Nisi Quod de Jure Potest- no man When the parties stipulate that the ownership will
can do anything except what he can do lawfully not transfer until the purchase price is fully paid,
or until certain conditions are fulfilled.
B. Delivery must be made by the seller who has ownership over
the subject matter Article 1503 of the civil code gives instances
when there is an implied reservation of
Delivery would produce the effect of transferring ownership.
ownership only if at the time of delivery the seller still had
ownership over the subject matter. C. sale by description and/or sample
There is sale by sample when a small quantity is exhibited II. If the buyer does not signify his
by the seller as a fair specimen of the bulk, which is not approval or acceptance, but retains the
present and there is no opportunity to inspect or examine goods without giving notice of
the same thus: rejection, then if a time has been fixed
or the return of the goods, on the
“to constitute a sale by sample, it must appear expiration of a reasonable time.
that the parties treated the sample as the standard
of quality and that they contracted with the F. Form of such special sales
reference to the sample with the understanding
that the product to be delivered would correspond For a sale to be considered and construed s a “sale or
the sample.” return” or a “sale on approval,”
It held the term “sale by sample” does not include there must be a clear agreement to either of such
an agreement to manufacture goods to correspond effect, otherwise the provisions of Article 1502 of
with the pattern, especially where in that case the the Civil Code governing such sales cannot be
three sets of furniture were manufactured invoked by either party to the contract,
according to the specifications provided by the
buyer, and not in accordance with the replicas must be in writing, and cannot be proved by parol
displayed in the seller’s shop. - Mendoza vs. evidence
David
Parol or extrinsic testimony cannot be
Sale of goods by description: admitted for the purpose of showing
that an invoice or bill of sale without
One where a seller sells things as being a particular kind, condition or restriction constituted a
the buyer not knowing the seller’s representations are true contract of sale or return.
or false, but relying on them as true;
G. Written proof of delivery
Otherwise stated, where the buyer has not seen the article
sold and relies on the description given to him by the seller, In case of goods, delivery is generally evidenced by a
or has seen the goods, but the wants of identity is not written acknowledgement (delivery receipts) of a person
apparent on inspection. that he has actually received the thing or the goods, under
the following rules:
Even in sales by description or by sample, the purchaser
will not be released from his obligation to accept and pay A bill of ladding cannot substitute for a delivery
for the goods by deviation on the part of the seller from the receipt
exact terms of the contract, if the purchaser has acquiesced
to such deviations. - Engel vs. Mariano Velasco and Co. A factory consignment invoice is not evidence of
actual delivery of the goods
When the machine delivered by the seller is in accordance
with the description stated in the sales contract, the buyer H. Time, place and expenses of delivery
cannot refuse to pay the balance of the purchase price and
the cost of installation even if it proves that the machine Article 1521 of the Civil Code
cannot be used satisfactorily for the purposes for which he
bought it when such purpose was not made known to the Provides for the rules on the time, place, and
seller. - Pacific Commercial Co. vs. Ermita Market & expenses of delivery of movables.
Cold Stores
Depends in each case on the contract, express or
D. on sale or return Article 1502 of the Civil Code: implied, between the parties
when goods are delivered to the buyer on the sale Place of delivery is the seller’s place of business,
or return to give the buyer an option to return the if he has one, if not, his residence
goods instead of paying the price, the ownership
when the contract or the sale was made were in within the use of qualifying words of “more or
some other place, that place is the place of less” in describing the area
delivery
The same rule applies when two or more
If no time for sending the goods is fixed, seller is immovables are sold for a single price
bound to send them within reasonable time.
But if besides mentioning the boundaries which is
Demand or tender of delivery may be treated indispensable in every conveyance of real estate,
ineffectual unless made at a reasonable hour; its area or number should be designated in the
reasonable hour is a question of fact contract, the vendor shall be bound to deliver all
that is included within said boundaries, even
Expenses of delivery are borne by the seller when it exceeds the area or number specified in
unless otherwise agreed. the contract
Pricing methods of sales over immovables: Judicial sale in mass of separate known lots will not be set
aside, unless it is made appear that a larger sum could have
a) Unit price contract been realized from a sale in parcels or that a sale of less
than the whole would have been sufficient to satisfy the
- purchase price is debt.
determined by way of reference to a
stated rate per unit area E. Expenses of delivery and registration on real estate
a) Lump sum contract Registration of the title of the buyer over the purchased real
estate is not an ingredient necessary for tradition to have
- states a full purchase price full effect.
for an immovable the area of which
may be declared based on the estimate ownership is transferred not by issuance of a new
or where both area and boundaries are certificate of title in the name of the buyer but by
stated the execution of the instrument of sale in a public
document.
o Particular mode of sale chosen by the parties also
determines the completeness of the delivery when the Payment of capital gains tax
subject matter is immovable
not a prerequisite to the transfer of ownership to
A. Where immovables sold per unit or number the buyer, it took effect upon the signing and
notarization of the deed of absolute sale.
Article 1539 of the Civil Code
Article 1487:
provides for the obligations of the seller if the
sale of the real estate should be made with a Expenses for the sale for registration of the sale
statement of its area, at the rate of a certain price should be shouldered by the seller unless there is
for a unit of measure or number. a contrary stipulation.
o If he accepts the whole area, he must pay for the General Rule: First In Time, Priority in Right
same at the contract rat. When does it apply: When not all requisites embodied in Art 1544
concur
B. Where immovables sold for a lump sum
a) Subject Matter is movable
Rules for the sale of real estate made for a lump To the buyer who may first taken possession thereof in good
sum under Article 1542 of the Civil Code: faith;
There is no Double Sale if: Article 1544 does not apply to sales involving unregistered land. The
issue of buyer's good faith and bad faith is relevant only when the
1) Sale to Different Vendees subject of the sale is registered land, and the purchase is buying the
same from the registered owner whose title to the land is clean.
There is no double sale after the sale of the property in favor of a In Such case, the purchaser who relies on the clean title of the
person, the vendor did not execute another sale over the same registered owner is protected if he is purchaser in good faith for value
property in favor of another ( Land Authority V De Leon.) (Sabitsana vs Muertegi, 703 SCRA 145)
c Article 1544 Rules on Double Sales. -The Court that the rules on double sales under Article 1544 are not
applicable to a contract to sell because the circumstances that must
concur in order for the provision to Article 1544 on double sales to
a. Registration in good faith under P.D 1529 apply.
Exception: Can not apply to unregistered land
b. Principle Applicable to buyer at Auction Sale under the rules of There must be sameness of the Subject Matter
Court
Rule: can pertain only to cases involving unregistered land. -In a case where on buyer bought the parcel of land and other buyer
bought the right to redeem the same parcel of land, Article 1544 was
deemed to be inapplicable, beacause the subject of the second sale is
not the land itself, but the right to redeem.
Article 1544 had no application to double sales which both covered In Land registration law, the issue of whether the buyer of realty in
the same unregistered land. good faith is relevant only where the subject of the sale is registered
Act no. 3344 land and the purchase was made from the registered owner, whose
-provides for the registration of all instruments on land neither title to the land is clean, in which case the purchaser who relied on
covered by the Spanish Mortgage Law or the Torrens System. the clean title of the purchaser is protected if he is a purchaser in
-The registration by the first buyer is constructive notice to the good faith for value.
second buyer that can defeat it right as the second buyer in good If the land is unregistered and the sell it, the purchaser bought the
faith. property at its own peril.
- Registry of deeds creates constructive notice and binds third person
who may subsequently deal with the same property. a. good faith of the first buyer
b. good faith of the second buyer
c. burden of proof
C. Article 1544 Rules on Double Sales d purchase must be for valuable consideration
e. actual knowledge
- Strictly applicable to double sales only when they are valid and d. duty of the purchaser to look beyond the certificate
demandable and the issues arise only in consumation stage.
-Not only the rule pertaining to double sales.
Main rule: First in time, priority in right (Pruis tempore potior jure)
Requisites of Prior Registration 1. Registration in Good Faith Always Pre-empts Possession in
GOOD FAITH
“Registration” Basis: Article 1544, NCC
• Means any entry made in the books of the registry, • … that in double sales of real property, the buyer
including both registration in its ordinary and strict sense, who has in possession the Torrens Title and had
and cancellation, annotation, and even marginal notes. the deed of sale registered must prevail.
1. Prior registration by the second buyer must always be in GOOD • … that buyer-registrant in good faith always has
FAITH preference to the buyer-possessor in good faith,
even when in point in time, the possession in
2. The need for the second buyer to do Positive Act under Article good faith happened ahead of the registration in
1544 good faith.
Aceron, April V
Candia, Mercidelen
Filler, Nicole
Rabadon, Kaye