Sales #1

Atty. Stephanie Joy A. Rolusta

ART. 1458. By the contract of sale one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent. A contract of sale may be absolute
or conditional.
Characteristics of a contract of sale.
The contract of sale is:
(1) Consensual, because it is perfected by mere consent without any further act;
(2) Bilateral, because both the contracting parties are bound to fulfill correlative obligations
towards each other the seller, to deliver and transfer ownership of the thing sold and the
buyer, to pay the price;
(3) Onerous, because the thing sold is conveyed in consideration of the price and vice versa;
(4) Commutative, because the thing sold is considered the equivalent of the price paid and
vice versa. (5) Nominate, because it is given a special name or designation in the Civil Code,
namely, sale; and
(6) Principal, because it does not depend for its existence and validity upon another
contract.
Essential requisites of a contract of sale
(1) Consent or meeting of the minds;
(2) Object or subject matter;
(3) Cause or consideration.
Effect of absence of price/nonpayment of price
(1) There can be no sale without a price.
(2) Non-payment of the purchase price is a resolutory condition for which the remedy is
either rescission or specific performance under Article 1191 of the Civil Code.
Kinds of contract of sale.
As to presence or absence of conditions.
(a) Absolute. where the sale is not subject to any condition whatsoever and where title
passes to the buyer upon delivery of the thing sold.
(b) Conditional. where the sale contemplates a contingency (Arts. 1461, 1462, par. 2;
Art. 1465.), and in general, where the contract is subject to certain conditions (see

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Atty. Stephanie Joy A. Rolusta

Art. 1503, par. 1.), usually, in the case of the vendee, the full payment of the agreed
purchase price (Art. 1478; see Peoples Homesite & Housing Corp. vs. Court of
Appeals, 133 SCRA 777 [1984].) and in the case of the vendor, the fulfillment of
certain warranties, e.g., the timely eviction of squatters on the property sold. (Romero
vs. Court of Appeals, 65 SCAD 621, 250 SCRA 223 [1995].)
Contract of sale and contract to sell with reserved title distinguished.
(1) Transfer of title. In a contract of sale, title passes to the buyer upon delivery of the
thing sold, while in a contract to sell (or of exclusive right and privilege to
purchase), where it is stipulated that ownership in the thing shall not pass to the
purchaser until he has fully paid the price (Art. 1478.), ownership is reserved in the
seller and is not to pass until the full payment of the purchase price. In the absence
of such stipulation, especially where the buyer took possession of the property upon
execution of the contract, indicates that what the parties contemplated is a contract
of absolute sale.
(2) Payment of price. In the first case, non-payment of the price is a negative
resolutory condition (see Art. 1179.), and the remedy of the seller is to exact
fulfillment or to rescind the contract (see Arts. 1191, 1592.), while in the second
case, full payment is a positive suspensive condition, the failure of which is not a
breach, casual or serious, of the contract but simply an event that prevents the
obligation of the vendor to convey title from acquiring binding force.
(3) Ownership of vendor. Being contraries, their effect in law cannot be identical. In
the first case, the vendor has lost and cannot recover the ownership of the thing sold
and delivered, actually or constructively (see Art. 1497.), until and unless the
contract of sale itself is resolved and set aside. In the second case, however, the title
remains in the vendor if the vendee does not comply with the condition precedent of
making payment at the time specified in the contract.
ART. 1459. The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered.
Requisites concerning object
(1) Things. Aside from being (a) determinate (Arts. 1458, 1460.), the law requires that the
subject matter must be (b) licit or lawful, that is, it should not be contrary to law,
morals, good customs, public order, or public policy (Arts. 1347, 1409[1, 4].), and
should (c) not be impossible. (Art. 1348.) In other words, like any other object of a

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Atty. Stephanie Joy A. Rolusta

contract, the thing must be within the commerce of men. If the subject matter of the
sale is illicit, the contract is void and cannot, therefore, be ratified.
(2) Rights. All rights which are not intransmissible or personal may also be the object of
sale (Art. 1347.), like the right of usufruct (Art. 572.), the right of conventional
redemption (Art. 1601.), credit (Art. 1624.), etc. Examples of intransmissible rights are
the right to vote, right to public office, marital and parental rights, etc.
Right to transfer ownership.
(1) Seller must be owner or authorized by owner of thing sold. It is essential in order
for a sale to be valid that the vendor must be able to transfer ownership (Art. 1458.)
and, therefore, he must be the owner or at least must be authorized by the owner of
the thing sold. This rule is in accord with a well-known principle of law that one can
not transmit or dispose of that which he does not have nemo dat quod non
habet. Accordingly, one can sell only what one owns or is authorized to sell, and the
buyer can acquire no more than what the seller can transfer legally.
(2) Right must exist at time of delivery. Article 1459, however, does not require that
the vendor must have the right to transfer ownership of the property sold at the time
of the perfection of the contract.
ART. 1460. A thing is determinate when it is particularly designated or physically
segregated from all others of the same class. The requisite that a thing be
determinate is satisfied if at the time the contract is entered into, the thing is
capable of being made determinate without the necessity of a new or further
agreement between the parties.
Subject matter must be determinate.
(1) When thing determinate. A thing is determinate or specific (not generic) when it is
particularly designated or physically segregated from all others of the same class.
(see Art. 1636[1].) This requisite that the object of a contract of sale must be
determinate is in accordance with the general rule that the object of every contract
must be determinate as to its kind. (Art. 1349.) A determinate thing is identified by
its individuality, e.g., my car (if I have only one); the watch I am wearing; the house
located at the corner of Rizal and Del Pilar Streets, etc.;
(2) Sufficient if subject matter capable of being made determinate. It is not necessary

that the thing sold must be in sight at the time the contract is entered into. It is

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Atty. Stephanie Joy A. Rolusta

sufficient that the thing is determinable or capable of being made determinate