Effects and Completeness

of Delivery
. Transfer Ownership to Vendee Upon
Deliver.(Articles 1477, 1478,
and 1496)
Article 1477.
The ownership
of the thing sold shall be
transferred to the vendee
upon the actual or
constructive delivery thereof.

Article 1478.
The parties
may stipulate that
ownership in the thing
shall not pass to
the purchaser until he has
fully paid the price.

Effects and Completeness

of Delivery

Can delivery be made without

transferring ownership?

Effects and Completeness

of Delivery
Can delivery be made without
transferring ownership?.
Ans. You can reserve it under Art. 1478
The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid
the price.
Ex. You purchased appliance payable in 6
months but you were not able to pay.
They can recover that.

2 Things Must Be Present to make

delivery produce its legal
effect:
1. Delivery must be made
pursuant to a valid sale.

Tradition pertains to the consummation stage of sale,

thus, it presupposes a valid sale.

When a sale is fictitious, no title over the subject

matter
of the sale can be conveyed.

2 Things Must Be Present to make delivery produce its legal

effect:

2. Delivery must be made when

seller has ownership over the subject
matter of sale so delivered.

No man can dispose of that which does not belong to

him.

To Whom Delivery Must Be Made.

General Rule:
Delivery must be made to the buyer
or his duly authorized representatives
named in the contract. Lagoon v. Hooven
Comalco Industries, Inc., 349 SCRA 363.

To Whom Delivery Must Be Made.

Exception: However, parties can
validly stipulate how delivery is to be
made and to whom.

The buyer specifically designated someone to receive

delivery.

When Buyer Refuses to Accept.

(Article 1588)
Even if the buyer refuses to accept,
the delivery by the seller will produce
its legal effects. However, the seller
is still legally obliged to take certain
steps as not to be held liable for
consequent loss or damage to the
goods.

Rules on Effects of Delivery for

Movables

When Goods Held by Third Party

When goods are in the possession of a
third party at the time of the sale, the
seller has not fulfilled his obligation
to deliver unless and until the third
person acknowledges to the buyer
that he holds the goods on the buyers
behalf. (Article 1521)

When Goods Held by Third Party

When the contract does not provide for the measuring or
weighing of a sold specific mass, and the price agreed upon was
not based on such measurement, then the subject matter of
the sale is, therefore, a determinate object, the mass, and not
the actual number of units or tons contained therein, so that all
that is required of seller was to deliver in good faith to his buyer
all of those found in the mass, notwithstanding that the
quantity delivered is less than the amount estimated in the
contract. xGaite v. Fonacier, 2 SCRA 831 (1961).

Reservation of Ownership
Ownership will not transfer to the
buyer in case of express reservation
in the contract, such as when the
parties stipulate that ownership will
not transfer until the purchase price
is full paid, or until certain
conditions are fulfilled. (Article
1478; Article 1503)

Reservation of Ownership
Article 1478.
The parties may stipulate
that ownership in the thing shall not
pass to the purchaser until he has
fully paid the price.

Reservation of Ownership
Technically speaking, this does not refer
to conditional contracts of sale or
contracts to sell where the
conditions refer to the perfection of the
contract.
The Conditions mentioned here refer to
the consummation stage of the contract.

Article 1503 of the Civil Code gives

instances
where
reservation
of
ownership is implied:
. Goods are shipped, and by the bill of lading the goods
are deliverable to the seller or his agent, the seller
reserves ownership of the goods. But, if except from the
form of the bill of lading, ownership would have passed
to the buyer, the sellers property in the goods shall be
deemed to be only for purpose of securing performance
of the buyers obligation, in which case the buyer bears
the risk of loss.

Article 1503 of the Civil Code gives

instances
where
reservation
of
ownership is implied:
.

Goods are shipped, and by the bill of lading the

goods
are deliverable to the buyer, but possession of the
bill of
lading is retained by the seller, the seller reserves a
right
to the possession of the goods, and ownership is
still
transferred to the buyer.

Article 1503 of the Civil Code gives

instances
where
reservation
of
ownership is implied:
.

Seller draws on the buyer for the price, and

transmits the bill of exchange and the bill of
lading together to the buyer, the buyer is bound
to return the bill of lading if he does not honor the
bill of exchange. If he retains the bill of lading, he
does not acquire any added right.
o

If the bill of lading provides that the goods are

deliverable to the buyer, one who purchases in
good faith and for value the bill of lading or the
goods from the buyer, will obtain ownership,
provided that the bill of lading is indorsed to
such purchaser.

Obligation as to Accessories and

Accessions
The seller must deliver to the buyer a
quantity of goods that should not be less
than what he contracted to sell, otherwise
the buyer may reject them.

Sale in Mass of Movables

Sale of movables in Article 1522 must be

distinguished from the sale of specific
mass under Article 1480 which refers to
sale of fungible things.
o Which provides for the
sale fungible things, made
independently and for a single price, or without
consideration of their weight, number, or measure.

Sale in Mass of Movables

If there is no provision in the contract for the measuring
or
weighing of the fungible thing, nor is the price agreed upon
by
the parties to be based on such measurement, the
subject
matter of the sale is the mass itself, as a determinate
object.
The obligation therefore, of the seller is to deliver the
whole
mass, regardless of the quantity. Gaite v. Fonacier, 2 SCRA 831
(1961).

Sale on Approval, Trial or

Satisfaction (Article 1502)
When goods are delivered to the buyer on sale on approval or
on trial or on satisfaction, the ownership therein passes to
the buyer only:

When buyer signifies his approval or acceptance to the

seller or does any other act adopting the transaction; or

If the buyer does not signify his approval or acceptance,

but retains the goods without giving notice of rejection,
then if a time has been fixed for the return of the goods,
on the expiration of such time, and, if not time has been
fixed, on the expiration of a reasonable time.

Sale on Approval, Trial or

Satisfaction (Article 1502)
In a sale on approval (also called sale on acceptance, sale
on
trial or sale on satisfaction), the delivery of the object does
not transfer ownership to the buyer since the delivery was not
for purposes of transferring ownership, since the prestation to
effect a meeting of the minds to give rise to a valid contract is
incumbent on the buyer. Vallarta v. Court of Appeals, 150
SCRA 336 (1987).

Incumbent on the buyer since it is dependent on the

buyer on whether or not he will accept such. The
acceptance or rejection would be the determining
factor on whether or not a valid contract will rise.

For a sale to be a sale or return or

a sale on approval.
For a sale to be a sale or return or a sale on
approval, there
must be a clear agreement to either of such effect,
otherwise,
the provisions of Article 1502 of Civil Code
governing such sales
cannot be invoked by either party to the contract.
Industrial
Textile Manufacturing Co. v. LPJ Enterprises, Inc., 217 SCRA
322
(1993).

Sale by Description and/or Sample

Article 1481.
In the contract of sale of goods by description or by sample, the
contract may be rescinded if the bulk of the goods delivered do not
correspond with the description or the sample, and if the contract be
by sample as well as description, it is not sufficient that the bulk of
goods correspond with the sample if they do not also correspond with
the description.
The buyer shall have a reasonable opportunity of comparing the bulk
with the description or the sample.

Sale by Description and/or Sample

General Rule: Article 1481(1); There is a sale by sample when a
small quantity is exhibited by the seller as a fair specimen of the
bulk, which is not present and there is no opportunity to inspect
or examine the same; and the parties treated the sample as the
standard of quality and that they contracted with reference to
the sample with the understanding that the product to
be delivered would correspondent with the sample. Mendoza v.
David, 441
SCRA 172 (004)

If the delivered products does not

conform to the sample, the buyer may choose to return
the products or ask for a reduction of price.

Sale by Description and/or Sample

Exception: Even in
sales by description and/or
sample,
buyer will not be released from his obligation to
accept
and pay for the goods by deviations on the part of the
seller from the exact terms of the contract, if buyer
had
acquiesced to such deviations after due notice
thereof.
Engel v. Mariano Velasco & Co., 47 Phil. 115 (1924).

Time and Place of Delivery

Article 1521.
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.
Where by a contract of sale the seller is bound to send the goods to
the buyer, but no time for sending them is fixed, the seller is bound to
send them within a reasonable time.

Time and Place of Delivery

Where the goods at the time of sale are in the possession of a third
person, the seller has not fulfilled his obligation to deliver to the buyer
unless and until such third person acknowledges to the buyer that he
holds the goods on the buyer's behalf.
Demand or tender of delivery may be treated as ineffectual unless
made at a reasonable hour. What is a reasonable hour is a question of
fact.
Unless otherwise agreed, the expenses of and incidental to putting the
goods into a deliverable state must be borne by the seller.

Expenses of Delivery for Movables

The expenses for delivery are to be borne by the

seller since
they are expenses pertaining to putting the
goods into a
deliverable state.

Rules on Effects of Delivery of

Immovables
Where Sold Per Unit or Number.
If the vendor delivers less than the area agreed upon,
the vendee may oblige the vendor to deliver all that is
stated in the contract or demand for the proportionate
reduction of the purchase price if delivery is not
possible.
If the vendor delivers more than the area stated in the
contract, the vendee has the option to accept only the
amount agreed upon or to accept the whole area,
provided he pays for the additional area at the contract
rate.

Where Immovables Sold for a Lump

Sum
General Rule: In a contract of sale of land in a mass, the specific
boundaries stated in the contract must control over any
statement with respect to the area contained within its
boundaries. Salinas v. Faustino, 566 SCRA 18 (2008).

In a lump sum sale, when the land delivered to the buyer is

exactly as that described in the deed and Covered Within The
boundaries designated, The difference in actual area (34 versus 10
hectares) will not authorize the buyer to rescind the contract
because the seller has complied with delivering the subject
matter agreed upon. Teran v. Villanueva, 56 Phil. 677 (1932);
this is the rule when evidence shows that the parties never gave
importance to the area of the land in fixing the price (97 versus
60 hectares). Azarraga v. Gay, 52 Phil. 599 (1928).

Where Immovables Sold for a Lump

Sum
Exception: A buyer of land, when sold in gross or with the
description more or less or similar words in designating
quantity covers only a reasonable excess of deficiency. In the
case at bar an area of 644 square meters more is not
reasonable excess or deficiency, to be deemed included in the
deed of sale. Roble v. Arbasa, 362 SCRA 69 (2001); Rudolf
Lietz, Inc. v. Court of Appeals, 478 SCRA 451 (2005)
Exception to Exception: When buyer, who has been occupying
the land for two years as lessee, actually is deemed to take risk
on the actual size of the property bought at lump sum. Garcia
v. Velasco, 72 Phil. 248 (1941).

Lump Sum Sale v. Sale by Unit of

Measure or Number
General Rule: If the price per unit of measure or
number is not
expressly provided for in the contract, the rules of
lump sum
sale shall prevail in the sale of real property.

Where Immovables Sold in Mass

A judicial sale in mass of separate known lots or
parcels will not
be set aside, unless it is made to appear that a
larger sum could
have been realized form a sale in parcels or that a
sale of less
than the whole would have been sufficient to satisfy
the debt.

Expenses of Delivery and

Registration on Real Estate
In the 2002 case of Jose Clavano v. HLURB, 378
SCRA 172
(2002), the SC held that a judgment on a sale that decrees
the
obligations of the seller to execute and deliver the deed
of
absolute sale and the certificate of title, does not
necessarily
include the obligation on the part of the seller to pay
for
expenses in notarizing the deed of sale and in obtaining a
new
certificate of title.

Expenses of Delivery and

Registration on Real Estate
In the 2003 case of Chua v. Court of Appeals, 401
SCRA 54
(2003) the Court held that the obligation of the seller is
to
transfer ownership which is done by the execution of a
public
instrument. Thus, expenses for registration in the Registry
of
Deeds, which merely binds third persons but does not
transfer
ownership, is to be borne by the buyer. Capital gains
tax
remains liability of the seller.

Expenses of Delivery and

Registration on Real Estate
In the 2004 case of Vive Eagle Land, Inc. v.
Court of Appeals,
444 SCRA 445 (2004) the SC held that
registration of the sale
should be shouldered by the seller unless there is
a contrary
stipulation.

Expenses of Delivery and

Registration on Real Estate
CLV doesnt say which case is correct, but he
seems to favor
Chua v. Court of Appeals since he keeps saying
that the other 2
cases are in stark contrast to Chua.