LAW ON SALES – Notes 7 readily be attached or levied upon by ordinary legal

Ref. book: Law on Sales, by Hector De Leon. process.

Creditor’s remedies to reach negotiable

ART. 1519. If goods are delivered to a bailee by the documents.
owner or by a person whose act in conveying the title
Inasmuch as the goods themselves cannot readily be
to them to a purchaser in good faith for value would
bind the owner and a negotiable document of title is attached or levied upon by ordinary legal process, as limited by the
issued for them they cannot thereafter, while in preceding article, this article expressly gives the court full power to
possession of such bailee, be attached by garnishment aid by injunction and otherwise a creditor seeking to get a
or otherwise or be levied under an execution unless the negotiable document covering such goods.
document be first surrendered to the bailee or its
negotiation enjoined. The bailee shall in no case be ART. 1521. Whether it is for the buyer to take
compelled to deliver up the actual possession of the possession of the goods or for the seller to send them
goods until the document is surrendered to him or to the buyer is a question depending in each case on
impounded by the court. the contract, express or implied, between the parties.
Apart from any such contract, express or implied, or
Attachment or levy upon goods covered by a usage of trade to the contrary, the place of delivery is
negotiable document. the seller’s place of business if he has one, and if not,
The bailee has the direct obligation to hold possession of the his residence; but in case of a contract of sale of
goods for the original owner or to the person to whom the specific goods, which to the knowledge of the parties
negotiable document of title has been duly negotiated. While in the when the contract or the sale was made were in some
possession of such bailee, the goods cannot be attached or levied other place, then that place is the place of delivery.
under an execution unless the document be first surrendered, or its Where by a contract of sale the seller is bound to
negotiation prohibited by the court. send the goods to the buyer, but no time for sending
The bailee cannot be compelled to deliver up the possession of them is fixed, the seller is bound to send them within a
the goods until the document is surrendered to him or impounded reasonable time.
by the court. This prohibition is for the protection of the bailee since
he could be made liable to a subsequent purchaser for value in Where the goods at the time of sale are in the
good faith. possession of a third person, the seller has not fulfilled
his obligation to deliver to the buyer unless and until
ART. 1520. A creditor whose debtor is the owner of a such third person acknowledges to the buyer that he
negotiable document of title shall be entitled to such holds the goods on the buyer’s behalf.
aid from courts of appropriate jurisdiction by injunction
and otherwise in attaching such document or in Demand or tender of delivery may be treated as
satisfying the claim by means thereof as is allowed at ineffectual unless made at a reasonable hour. What is a
law or in equity in regard to property which cannot reasonable hour is a question of fact.
1
 Unless otherwise agreed, the expenses of and delivered he must pay for them at the contract rate.
incidental to putting the goods into a deliverable state Where the seller delivers to the buyer the goods he
must be borne by the seller. contracted to sell mixed with goods of a different
description not included in the contract, the buyer may
accept the goods which are in accordance with the
Place of delivery of goods sold. contract and reject the rest.
Should the buyer take possession of the goods or should the In the preceding two paragraphs, if the subject
seller send them? In other words, where is the place of delivery? matter is indivisible, the buyer may reject the whole of
The following are the rules: the goods.
(1) Where there is an agreement, express or implied, the place The provisions of this article are subject to any
of delivery is that agreed upon; usage of trade, special agreement, or course of dealing
(2) Where there is no agreement, the place of delivery is that between the parties. (n)
determined by usage of trade;
Delivery of goods less than quantity
(3) Where there is no agreement and there is also no prevalent
contracted.
usage, the place of delivery is the seller’s place of business;
(4) In any other case, the place of delivery is the seller’s Where the seller is under a contract to deliver a specific
residence; and quantity of goods and he delivers a smaller quantity as full
(5) In case of specific goods, which to the knowledge of the performance of his obligation, the buyer may reject the goods so
parties at the time the contract was made were in some other delivered. (see Art. 1233.) The buyer may, however, accept the
place, that place is the place of delivery, in the absence of any goods in which case he must pay for their (1) price at the contract
agreement or usage of trade to the contrary. rate if he knew that no more were to be delivered or (2) the fair
value to him of the goods, if he did not know that the seller is going
ART. 1522. Where the seller delivers to the buyer a to be guilty of a breach of contract. (par. 1.)
quantity of goods less than he contracted to sell, the
buyer may reject them, but if the buyer accepts or
retains the goods so delivered, knowing that the seller ART. 1523. Where, in pursuance of a contract of
is not going to perform the contract in full, he must pay sale, the seller is authorized or required to send the
for them at the contract rate. If, however, the buyer has goods to the buyer, delivery of the goods to a carrier,
used or disposed of the goods delivered before he whether named by the buyer or not, for the purpose of
knows that the seller is not going to perform his transmission to the buyer is deemed to be a delivery of
contract in full, the buyer shall not be liable for more the goods to the buyer, except in the cases provided for
than the fair value to him of the goods so received. in article 1503, first, second and third paragraphs, or
Where the seller delivers to the buyer a quantity of unless a contrary intent appears.
goods larger than he contracted to sell, the buyer may
Unless otherwise authorized by the buyer, the seller
accept the goods included in the contract and reject the
must make such contract with the carrier on behalf of
rest. If the buyer accepts the whole of the goods so
the buyer as may be reasonable, having regard to the
 nature of the goods and the other circumstances of the contract.
case. If the seller omits so to do, and the goods are lost
or damaged in course of transit, the buyer may decline Delivery, simultaneous with payment of
to treat the delivery to the carrier as a delivery to price.
himself, or may hold the seller responsible in damages. As a general rule, the obligation to deliver the thing subject
Unless otherwise agreed, where goods are sent by matter of a contract arises from the moment of its perfection and
the seller to the buyer under circumstances in which from that time the obligation may be enforced. But the contract of
the seller knows or ought to know that it is usual to purchase and sale is bilateral and from it arises not only the
insure, the seller must give such notice to the buyer as obligation to deliver the thing but also that of paying the price. The
may enable him to insure them during their transit, and, obligations are reciprocal. Consequently, if the vendor is bound to
if the seller fails to do so, the goods shall be deemed to deliver the thing sold, it is no less certain that the vendee must pay
be at his risk during such transit. (n) the price.

Delivery to carrier on behalf of buyer. When delivery must be made before payment of Price.
Where the seller is authorized or required to send the goods The provisions of Article 1524 contain a rule and an
to the buyer (Art. 1521, par. 1.), the general rule is that delivery of exception:
such goods to the carrier6 constitutes delivery to the buyer, The rule is that the thing shall not be delivered unless the price be
whether the carrier is named by the buyer or not. paid; and The exception is that the thing must be delivered though
the price be not first paid, if time for such payment has been fixed
Seller’s duty after delivery to carrier. in the contract.
The fact that the ownership in the goods may have passed
to the buyer does not mean that the seller has already fulfilled his
duty to the buyer.
(1) To enter on behalf of buyer into such contract reasonable
under the circumstances. — The seller must make such contract
with the carrier on behalf of the buyer as may be reasonable under
the circumstances.

(2) To give notice to buyer regarding necessity to insure goods.

—The seller must give notice to the buyer as may enable him to
insure the goods during their transit if under the circumstances it is
usual to insure them.

ART. 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
3