LAW ON SALES (Art.
1458- immovable property, the vendor
may immediately sue for
1637) rescission.
180 Articles
e. In the sale of immovable property,
OBLIGATIONS OF THE VENDEE: even though it may have been
stipulated that upon failure to pay
1. TO PAY THE PRICE the price at the time agreed upon
a. At the time and place stipulated; the rescission of the contract may
or if none was stipulated, the be had, the vendee may pay, even
payment must be made at the after the expiration of the period, as
time and place of the delivery of long as no demand for rescission of
the thing sold. the contract has been made upon
him either judicially or by a notarial
b. The vendee shall be liable for act. After the demand, the court
interest for the period between may not grant him a new term.
the delivery of the thing and the
payment of the price in the 2. TO ACCEPT DELIVERY
following cases:
a. The buyer is not bound to accept
(1) Should it have been so stipulated; delivery by installments, unless
(2) Should the thing sold and
otherwise agreed upon.
delivered produce fruits or
income; b. If it was agreed that delivery be
(3) Should he be in default, from done in installments and
the time of judicial or payments separately made, and
extrajudicial demand for the the seller makes defective
payment of the price. deliveries in respect of one or
more instalments, or the buyer
c. Suspension of payments: if the neglects or refuses without just
vendee is disturbed in the cause to take delivery of or pay for
possession or ownership of the one or more instalments, it
thing acquired, or should he have depends in each case on the
reasonable grounds to fear such terms of the contract and the
disturbance, by a vindicatory circumstances of the case,
action or a foreclosure of whether the breach of contract is
mortgage, he may suspend the so material as to justify the injured
payment of the price until the party in refusing to proceed further
vendor has caused the and suing for damages for breach
disturbance or danger to cease, of the entire contract, or whether
unless: the breach is severable, giving rise
(1) The seller gives security for the to a claim for compensation but
return of the price in a proper not to a right to treat the whole
case, or contract as broken.
(2) It has been stipulated that,
notwithstanding any such
contingency, the vendee shall be
bound to make the payment.
A mere act of trespass shall c. Deemed Acceptance: the buyer
not authorize the suspension of is deemed to have accepted the
the payment of the price. delivery if:
(1) He intimates to the seller that he
d. However, if the fear of loss covers has accepted the thing;
(2) He does any act which is examining the goods for the
inconsistent with the ownership of purpose of ascertaining whether
the seller; they are in conformity with the
(3) After the lapse of a reasonable contract.
time, he retains the goods without
intimating to the seller that he has (3) Where goods are delivered to a
rejected them. carrier by the seller, in
accordance with an order from or
d. In the absence of express or agreement with the buyer, upon
implied agreement of the parties, the terms that the goods shall not
acceptance of the goods by the be delivered by the carrier to the
buyer shall not discharge the seller buyer until he has paid the price,
from liability in damages or other
whether such terms are indicated
legal remedy for breach of any
by marking the goods with the
promise or warranty in the contract
of sale. But, if, after acceptance of words "collect on delivery," or
the goods, the buyer fails to give otherwise, the buyer is not
notice to the seller of the breach in entitled to examine the goods
any promise of warranty within a before the payment of the price,
reasonable time after the buyer in the absence of agreement or
knows, or ought to know of such usage of trade permitting such
breach, the seller shall not be examination.
liable therefor.
g. With respect to movable property,
e. Unless otherwise agreed, where the rescission of the sale shall be
goods are delivered to the buyer, an available remedy to the
and he refuses to accept them, vendor, if the vendee, upon the
having the right so to do, he is not expiration of the period fixed for
bound to return them to the seller, the delivery of the thing, should
but it is sufficient if he notifies the not have appeared to receive it,
seller that he refuses to accept or, having appeared, he should
them. If he voluntarily constitutes not have tendered the price at the
himself a depositary thereof, he same time, unless a longer period
shall be liable as such.
has been stipulated for its
f. Right to Examine: payment.
(1) Where goods are delivered to the
buyer, which he has not previously
examined, he is not deemed to
BREACH OF CONTRACTOF SALE:
have accepted them unless and 1.Where, under a contract of sale, the
until he has had a reasonable ownership of the goods has
opportunity of examining them for passed to the buyer and he
the purpose of ascertaining wrongfully neglects or refuses to
whether they are in conformity with pay for the goods according to the
the contract if there is no terms of the contract of sale, the
stipulation to the contrary. seller may maintain an action
against him for the price of the
(2) Unless otherwise agreed, when goods.
the seller tenders delivery of
goods to the buyer, he is bound, on
request, to afford the buyer a
reasonable opportunity of 2.Where, under a contract of sale, the
price is payable on a certain day, 7. If, while labor or expense of
irrespective of delivery or of material amount is necessary on
transfer of title and the buyer the part of the seller to enable
wrongfully neglects or refuses to him to fulfill his obligations under
pay such price, the seller may the contract of sale, the buyer
maintain an action for the price repudiates the contract or notifies
although the ownership in the the seller to proceed no further
goods has not passed. But it shall therewith, the buyer shall be
be a defense to such an action that
liable to the seller for labor
the seller at any time before the
performed or expenses made
judgment in such action has
before receiving notice of the
manifested an inability to perform
the contract of sale on his part or an buyer's repudiation or
intention not to perform. countermand. The profit the seller
would have made if the contract
3.Although the ownership in the goods or the sale had been fully
has not passed, if they cannot performed shall be considered in
readily be resold for a reasonable awarding the damages.
price, the seller may offer to deliver
the goods to the buyer, and, if the 8. Where the goods have not been
buyer refuses to receive them, may delivered to the buyer, and the
notify the buyer that the goods are buyer has repudiated the contract
thereafter held by the seller as of sale, or has manifested his
bailee for the buyer. Thereafter the inability to perform his obligations
seller may treat the goods as the thereunder, or has committed a
buyer's and may maintain an breach thereof, the seller may
action for the price. totally rescind the contract of sale
4. Where the buyer wrongfully by giving notice of his election so
neglects or refuses to accept and to do to the buyer.
pay for the goods, the seller may 9. Where the seller has broken a
maintain an action against him for
contract to deliver specific or
damages for non- acceptance.
ascertained goods, a court may,
5. The measure of damages is the on the application of the buyer,
estimated loss directly and naturally direct that the contract shall be
resulting in the ordinary course of performed specifically, without
events from the buyer's breach of giving the seller the option of
contract. retaining the goods on payment
of damages. The judgment or
6. Where there is an available market
for the goods in question, the decree may be unconditional, or
measure of damages is, in the upon such terms and conditions
absence of special circumstances as to damages, payment of the
showing proximate damage of a price and otherwise, as the court
different amount, the difference may deem just.
between the contract price and the
10. Where there is a breach of
market or current price at the time
warranty by the seller, the buyer
or times when the goods ought to
may, at his election:
have been accepted, or, if no time
a. Accept or keep the goods and set
was fixed for acceptance, then at
up against the seller, the breach
the time of the refusal to accept.
of warranty by way of recoupment
in diminution or extinction of the
price; rescind the sale and elects to do
b. Accept or keep the goods and so, if the seller refuses to accept
maintain an action against the an offer of the buyer to return the
seller for damages for the breach goods, the buyer shall thereafter
of warranty; be deemed to hold the goods as
c. Refuse to accept the goods, and bailee for the seller, but subject to
maintain an action against the a lien to secure payment of any
seller for damages for the breach portion of the price which has
of warranty; been paid, and with the remedies
d. Rescind the contract of sale and for the enforcement of such lien
refuse to receive the goods or if allowed to an unpaid seller.
the goods have already been
received, return them or offer to 14. In the case of breach of warranty
return them to the seller and of quality, such loss, in the
recover the price or any part absence of special circumstances
thereof which has been paid. showing proximate damage of a
greater amount, is the difference
11. Where the goods have been between the value of the goods at
delivered to the buyer, he cannot the time of delivery to the buyer
rescind the sale if he knew of the and the value they would have
breach of warranty when he had if they had answered to the
accepted the goods without warranty.
protest, or if he fails to notify the
seller within a reasonable time of
the election to rescind, or if he
fails to return or to offer to return EXTINGUISHMENT OF A CONTRACT
the goods to the seller in OF SALE:
substantially as good condition as
they were in at the time the SALES are extinguished by the
ownership was transferred to the same causes as all other
buyer. But if deterioration or injury
obligations, and by conventional
of the goods is due to the breach or legal redemption.
or warranty, such deterioration or
injury shall not prevent the buyer
from returning or offering to return CONVENTIONAL REDEMPTION:
the goods to the seller and ➢ otherwise known as “right
rescinding the sale. of repurchase” shall take place
when the vendor reserves the
12. Where the buyer is entitled to right to repurchase the thing sold,
rescind the sale and elects to do with the obligation to return the
so, he shall cease to be liable for price, expenses related thereto
the price upon returning or and useful and necessary
offering to return the goods. If the expenses, and other stipulations
price or any part thereof has which may have been agreed
already been paid, the seller shall upon.
be liable to repay so much thereof
as has been paid, concurrently The sale, with a right of
with the return of the goods, or repurchase, is also known as
immediately after an offer to pacto de retro sale.
return the goods in exchange for
repayment of the price. OWNERSHIP: transfers to the
13. Where the buyer is entitled to vendee a retro upon delivery.
However, this ownership is not instrument extending the period
absolute but only conditional. This of redemption or granting a new
is because the seller a retro may period is executed;
be able to exercise the right to 4. When the purchaser retains for
repurchase and the ownership of himself a part of the purchase
the buyer will be terminated. price;
AMOUNT TO BE PAID AT THE 5. When the vendor binds himself to
TIME THE RIGHT IS EXERCISED: pay the taxes on the thing sold;
1. The purchase price; 6. In any other case where it may be
2. The expenses of the contract, fairly inferred that the real
and any other legitimate intention of the parties is that the
payments made by reason of the transaction shall secure the
sale; and payment of a debt or the
3. Useful and necessary performance of any other
expenses (e.g., fencing of the obligation.
land)
In any of the foregoing cases,
Fruits: If at the time of the any money, fruits, or other benefit
execution of the sale there should to be received by the vendee as
be on the land, visible or growing rent or otherwise shall be
fruits, there shall be no considered as interest which shall
reimbursement for or prorating of be subject to the usury laws. The
those existing at the time of remedy would be to ask for the
redemption, if no indemnity was reformation of the instrument
paid by the purchaser when the purporting to be a contract of sale
sale was executed. with right of repurchase or a
Should there have been no fruits contract of absolute sale.
at the time of the sale and some
exist at the time of redemption, In case of doubt, a contract
they shall be prorated between purporting to be a sale with right to
the redemptioner and the vendee, repurchase shall be construed as
giving the latter the part an equitable mortgage.
corresponding to the time he
possessed the land in the last
year, counted from the
anniversary of the date of the sale.
PERIOD TO EXERCISE RIGHT OF
REPURCHASE:
1. That which was agreed upon
EQUITABLE MORTGAGE: a sale
which cannot exceed 10 years;
with a right of repurchase (or even
2. If no agreement as to the period, it
a contract of absolute sale) is shall be four years from the date
presumed to be an equitable of the contract.
mortgage in the following cases:
1. When the price of a sale with right The vendor may still exercise
to repurchase is unusually the right to repurchase within thirty
inadequate; days from the time final judgment
2. When the vendor remains in was rendered in a civil action on
possession as lessee or the basis that the contract was a
otherwise; true sale with right to repurchase.
3. When upon or after the expiration
of the right to repurchase another OTHER RULES ON
CONVENTIONAL REDEMPTION: purchase of the whole thing sold;
1. In case of real property, the and should they fail to do so, the
consolidation of ownership in the vendee cannot be compelled to
vendee by virtue of the failure of consent to a partial redemption.
the vendor to pay the required 7. Each one of the co-owners of an
amounts shall not be recorded in undivided immovable who may
the Registry of Property without a have sold his share separately,
judicial order, after the vendor has may independently exercise the
been duly heard. right of repurchase as regards his
2. The vendor may bring his action own share, and the vendee cannot
against every possessor whose compel him to redeem the whole
right is derived from the vendee, property.
even if in the second contract no If the vendee should leave several
mention should have been made heirs, the action for redemption
of the right to repurchase, without cannot be brought against each of
prejudice to the provisions of the them except for his own share,
Mortgage Law and the Land whether the thing be undivided, or
Registration Law with respect to it has been partitioned among
third persons. them.
3. The vendee is subrogated to the 8. But if the inheritance has been
vendor's rights and actions. divided, and the thing sold has
4. The creditors of the vendor cannot been awarded to one of the heirs,
make use of the right of the action for redemption may be
redemption against the vendee, instituted against him for the
until after they have exhausted the whole.
property of the vendor. 9. The vendor who recovers the thing
sold shall receive it free from all
5. In a sale with a right to repurchase, charges or mortgages constituted
the vendee of a part of an by the vendee, but he shall respect
undivided immovable who the leases which the latter may
acquires the whole thereof, may have executed in good faith, and in
compel the vendor to redeem the accordance with the custom of the
whole property, if the latter wishes place where the land is situated.
to make use of the right of
redemption. LEGAL REDEMPTION: is the right
6. If several persons, jointly and in to be subrogated, upon the same
the same contract, should sell an terms and conditions stipulated in
undivided immovable with a right the contract, in the place of one
of repurchase, none of them may who acquires a thing by purchase
exercise this right for more than or dation in payment, or by any
his respective share. The same other transaction whereby
rules apply to a person who sold ownership is transmitted by
an immovable alone but left onerous title.
several heirs, in which case, the
heirs may only redeem the part THE RIGHT OF LEGAL
which he may have acquired. REDEMPTION IS AVAILABLE
The vendee may demand of all the TO:
vendors or co-heirs that they come 1. CO-OWNERS – a co-owner of a
to an agreement upon the thing may exercise the right of
redemption in case the shares of smaller area shall be preferred;
all the other co-owners or of any of and
them, are sold to a third person. b. Should both lands have the same
area, the one who first requested
: redemption.
➢ may be movable or immovable
property. REDEMPTION AND PRE-
EMPTION OF URBAN LAND;
REQUISITES:
a. The subject is urban land;
➢ is the purchase price, unless the b. The area of the land is so small
price of alienation is grossly and so situated that a major
excessive, in which case, the portion thereof cannot be used for
redemptioner shall pay only a any practical purpose within a
reasonable one. reasonable time, having been
bought merely for speculation;
c. The one exercising the right of
: redemption or pre-emption is an
➢ should two or more co-owners adjoining land owner.
desire to exercise the right of
redemption, they may only do so in WHEN REDEMPTION, WHEN
proportion to the share they may PRE-EMPTION:
respectively have in the thing a. Pre-emption is the right exercised
owned in common. by the adjoining land owner if the
sale is NOT YET perfected;
2. OWNERS OF ADJOINING LANDS – b. Redemption is the right exercised
have the right of redemption in if the sale is already perfected.
case of transfers of land.
RURAL LAND; REQUISITES:
a. The subject is rural land;
b. The land does not exceed one
hectare;
c. The redemptioner is an owner of a
land adjoining the subject rural
land;
➢ the one whose intended use is
d. The adjacent lands is not
best justified shall be preferred.
separated by brooks, drains,
ravines, roads and other apparent
servitudes for the benefit of other
estates; and ➢ 30 days from NOTICE in writing by
e. The grantee does not own any the prospective vendor, or by the
rural land; vendor. The deed of sale shall not
be recorded in the Registry of
Property, unless accompanied by
an affidavit of the vendor that he
has given written notice thereof to
➢ in case two or more adjoining
all possible redemptioners.
owners desire to exercise the right
of redemption at the same time:
a. The owner of the adjoining land of :
➢ the right of redemption of the co-
owners excludes that of adjoining
owners.
