ARELLANO UNIVERSITY SCHOOL OF LAW
CIVIL LAW DEPARTMENT
COURSE OUTLINE
Prepared by: Atty. Prime A. Ramos
LAW ON SALES
I. GENERAL PRINCIPLES:
A. Definition (Article 1458[1], NCC)
II. CHARACTERISTICS:
A. Consensual (Art. 1475, NCC)
B. Bilateral (Art. 1458, NCC)
C. Onerous (Art. 1350, NCC)
D. Commutative (Art. 2010, NCC)
E. Principal
F. Nominate (Art. 1458, NCC)
III. STAGES:
A. Negotiation
B. Perfection (Arts. 1315, 1475, NCC)
C. Performance (Arts. 1191, 1403[2], NCC)
D. Consummation
IV. KINDS OF SALE (Articles 1458[2], 1488, 1544, 1403, 1477 [Maceda Law], 1501
[Recto Law])
A. As to the nature of the subject matter
1. Sale of real property
2. Sale of personal property
B. As to whether the object is tangible or intangible/corporeal or incorporeal
1. Sale of a thing
2. Sale of a right
C. As to validity or defect of the transaction
1. Valid Sale
2. Rescissible
3. Voidable
4. Unenforceable
5. Void
D. As to the presence or absence of condition
1. Absolute Sale
2. Conditional sale (Art. 1458)
3. Contract to sell
E. Distinguished from other transactions
1. Contract for a Piece of Work [Massachusetts Rule] (Art. 1467, NCC)
2. “Contract of Lease with Option to Buy”
3. Dacion en Pago (Art. 1245, NCC)
4. Barter or Exchange (Arts. 1468, 1638, 1954, NCC)
5. Agency to Sell (Art. 1466, NCC)
V. ELEMENTS OF A CONTRACT OF SALE:
A. Essential Elements
1. Consent of the contracting parties
a. Parties to the Contract
b. Capacity of Parties (Arts. 1489, 1390, 1403, NCC)
1) Absolute (Arts. 1327-1328, NCC; Art. 234, Family Code (FC) as amended by
RA 6809)
2) Relative (Art. XII, Secs. 7 & 8, 1987 Constitution; Arts. 1490-1492, 1533(5),
1476(4), 124FC)
2. Subject matter (things & rights) (Arts. 1347, 1311, 1636(goods), NCC)
a. Requisites (Arts. 1458[1], 1459-1462, 1347-1349, NCC)
b. Rules on the object of a contract of sale (Arts. 1463-1465, NCC)
c. Assignment of Credit and Other Incorporeal Rights (Arts. 1624-1635, NCC)
3. Cause - Arts. 1350, 1352-1353
a. Price certain in money (Arts. 1469, 1471-1474, 1308, NCC; RA No. 529, RA No.
8183, PD No. 72)
b. Earnest Money (Art. 1482, NCC)
c. Lesion (Arts. 1470, 1355, NCC)
B. Natural Elements
1. Warranties
2. Subrogation
C. Accidental Elements
VI. PERFECTION OF THE CONTRACT:
A. When perfected (Arts. 1475-1476, 1479[1], NCC)
B. Contract of Option (Arts. 1479, 1324, NCC)
C. Formalities of Contract of Sale [Statutes of Fraud] (Arts. 1483, 1403, 1625, 1356-1358,
1874, NCC; Sec. 22, Act No. 1147 [Cattle Registration Act])
VII. RIGHTS AND OBLIGATIONS OF THE VENDOR (Article 1495, NCC)
A. To transfer ownership
1. Who can transfer ownership?
a. General Rule (Arts. 1505-1506, 1547, NCC
b. Exceptions: Art. 1505
1) Estoppel- Arts. 1431, 1433-1434
2) Sale by an apparent owner
3) Purchase at Merchant’s Store, Market or Fair – Art. 559
B. When/How transfer is effected? (Arts. 1477, 1459, 1496, 1547, 1588, NCC)
1. General Rule:
2. Exceptions:
a. Sale or return (Art. 1502[1], NCC)
b. Sale on approval or trial (Art. 1502[2], NCC)
c. Conditional sales (Arts. 1478, 1503[1], 1458[2], NCC)
C. Risk of Loss or Deterioration [Total/Partial] (Arts. 1504, 1480, 1493-1494, 1538(1189),
1163, 1174, NCC)
1. General Rule: Res perit domino
2. Exceptions:
a. Stipulation
b. Security Title
c. Delay
D. Double Sales (Art.1544, NCC)
1. Rule (Movables/Immovables)
2. When not applicable?
a) unregistered lands
E. To deliver the object and its accessions (Art. 1537[1164], NCC)
1. Kinds of Delivery of Incorporeal Property (Quasi-tradition) (Arts. 1501, 2095, NCC)
2. Kinds of Delivery of Corporeal Property [Tradition] (Art. 1477, NCC)
a. Actual [Real or Material] (Art. 1497, NCC)
b. Constructive (Symbolic or Formal)
c. Delivery by the execution of a public instrument (Art. 498[1], NCC)
d. Tradition longa manu (Arts. 1498[2], 1499, NCC)
e. Tradition brevi manu (Art. 1499, NCC)
f. Tradition constitutum possessorium (Art. 1500, NCC)
g. Delivery to a common carrier (Arts. 1503, 1523, 1582, NCC)
h. When goods are in the possession of a third person (Art. 521[3], NCC)
F. Quality/Quantity (Arts. 1481, 1522, 1539-1543, 1630, 1632-1633, NCC)
G. Not bound to deliver when? (Arts. 1524, 1536[1198], NCC)
Visayan Distributors, Inc. v. Flores, 92 Phil 145
H. Place of Delivery [f.o.b., c.i.f., f.a.s.] (Arts. 1521(1), 1251, 1582, NCC)
I. Time of Delivery (Art. 1521[2], NCC)
J. Prescription (Art. 1543, NCC)
VIII. WARRANTIES (Articles 1495, 1567, 1571, 1628, 1629, 1631, NCC)
A. Express (Art. 1546, NCC)
B. Distinguished from:
1. Condition (Art. 1545, NCC)
2. Dealer’s talk
3. False representation
C. Implied warranties
1. Warranty against eviction [warranty of title] (Arts. 1548-1559, NCC)
2. Warranty against hidden encumbrances or defects (Arts. 1560, 1561, 1567-1581,
613, 615, NCC)
3. Warranty of quality (Arts. 1562-1565, 1586, 1599[5], NCC)
4. Others - Arts. 1480, 1163, 1538, 1537, 1164, 1487, 1521 last par., NCC)
IX. RIGHTS AND OBLIGATIONS OF THE VENDEE
A. Payment of Price (Arts. 1582, 1590, 1593, NCC)
1. Time and Place
2. Liability for interest (Art. 1589, NCC)
B. Right of Inspection/Examination (Arts. 1584, 1481, NCC)
C. Right to the fruits (Arts. 1537, 1164, NCC)
D. Acceptance (Arts. 1582-1583, 1585-1588, 1593, NCC)
1. The Maceda Law (RA 6552)– Sale of Immovables on Installment
X. REMEDIES FOR BREACH OF CONTRACT
A. Remedies of an Unpaid Seller (Arts. 1525-1526, NCC)
1. Withhold delivery [possessory lien] (Arts.1527-1529, 1535, 2241[3], NCC)
2. Stoppage in transitu (Art. 1530-1532, 1535, 1636[2], NCC)
3. Resell the goods (Art. 1533, NCC)
4. Rescission (Arts. 1534, 1597, 1591-1593, 1191, 1556, 1484, 1532, 1567, 1580, NCC)
5. Action for the price [specific performance] (Art. 1595, NCC)
6. Action for damages (Art. 1596, NCC)
B. Remedies of the Buyer (Arts. 1539, 1542-1543, 1567, 1571, 1599, NCC)
1. Specific performance (Arts. 1598, NCC)
2. Damages
3. Rescission (Arts. 1481, NCC)
4. Recto Law – Sale of Movables on Installment (Arts. 1484-1486, NCC)
XI. EXTINGUISHMENT OF SALE
A. Causes (Arts. 1600, 1231, 1626, 1634-1635, NCC)
B. Redemption
1. Conventional (Art. 1601, NCC)
2. Pacto de Retro Sale (Arts. 1607, 1609, 1611-1518, 1676-1677, NCC)
3. Equitable Mortgage (Arts. 1602-1605, NCC)
4. Period to Redeem (Art. 1606, NCC)
5. Who may exercise the right to redeem? (Arts. 1608, 1610, 1612, 1614-15, NCC)
6. Legal (Arts. 1619-1623, NCC)
GRADING SYSTEM:
Class Standing 20%
Midterms 35%
Finals 45%
Total 100%
PROJECT:
Instructions:
1. The project will be submitted on the last meeting of the class. No extensions will be allowed.
2. Each student, will be required to digest the cases listed in Annex “A”. If the case is repeated,
please take note of the topic which is under consideration.
3. The project shall be done in your own handwriting on a white legal size bond paper (8.5 x
13), observing the following margins: (a) Top Margin: 1 in. (b) Bottom Margin: 1 in. (c) Left
Margin: 1.5 in. and (d) Right Margin 1 in.;
4. Each page, except for the first page, the certification page and table of contents, must contain
a page number to be written at the lower right corner;
5. You may only use either black, blue or blue black signpens;
6. In compiling your project, the same must be scanned and converted to PDF.
7. The first page should have the following information:
Lower right page:
a. Full name, with the surname indicated first;
b. Section and student number;
c. Name of your instructor;
Top middle page in the following order:
a. Arellano University School of Law
b. Juris Doctor Program
c. Civil Law Department
Middle page:
a. The Law on Sales
8. The second page should have a certification signed by two (2) disinterested persons,
preferably your parents or spouse or immediate supervisor, with the following statements:
“We hereby certify that the contents of this project are
in accordance with the instructions given. We further
certify that we have read the contents of this project and
the same is complete and an original work of the author.
“We also understand that any violations of the rules
prescribed in the project will automatically penalize the
author with a deduction of two (2) points per violation.
__________________ ____________________
9. The third page should contain the Table of Contents. The Table of Contents should only
contain the Titles and the Chapters of the law and their page numbers.
This project is mandatory and is equivalent to ten (10) percent of your Class Standing.
Failure to submit the same will result in a grade of 65 in Project.
10. Each topic in the case list must be separated by a blank page. Each blank page should be
included in the page numbers.
11. Any violations on the instructions of the project will cause the deduction of two (2) points
for each violation.
12. All other contents, format or design not mentioned in the instruction is upon the discretion
of the project maker.
CASE DIGEST ANNEX A
GENERAL PRINCIPLES
1. Villonco Realty Company v. Bormaheco, Inc., 65 SCRA 352, July 25, 1975
2. Ang Yu Asuncion v. Court of Appeals, 238 SCRA 602, December 2, 1994
3. Vda. De Ape v. Court of Appeals, 456 SCRA 193, April 15, 2005
4. Torcuator v. Bernabe, 459 SCRA 439, June 8, 2005
CHARACTERISTICS
5. Gaite v. Fonacier, 2 SCRA 830, July 31, 1961
STAGES
6. Ainza v. Padua, 462 SCRA 614
KINDS OF SALES
7. McCullough v. Berger, 43 Phil 823, September 26, 1922
8. Dichoso v. Roxas, 5 SCRA 781, July 31, 1962
9. Luzon Brokerage v. Maritime Building, 43 SCRA 93, January 21, 1972
10. Portic v. Cristobal, 456 SCRA 577, April 22, 2005
11. Heirs of Jesus M. Mascunana v. Court of Appeals, 461 SCRA 186, June 23, 2005
12. Ursal v. Court of Appeals, 473 SCRA 52, October 14, 2005
13. Carrascoso, Jr. v. Court of Appeals, 477 SCRA 666, December 14, 2005
14. Quiroga v. Parsons Hardware, 38 Phil 501, August 23, 1918
15. Ker v. Lingad, 38 SCRA 524, April 30, 1971
16. Del Monte Phils. v. Aragones, 461 SCRA 139, June 23, 2005
ELEMENTS OF A CONTRACT OF SALE
17. Rodriguez v. Mactal, 60 Phil 13, April 4, 1934
18. Rubias v. Batiller, 51 SCRA 120, May 29, 1973
19. Miguel v. Catalino, 26 SCRA 234, November 29, 1968
20. Estate of Salvador Serra Serra v. Heirs of Primitivo Hernaez, 466 SCRA 120, August 9, 2005
21. Mapalo v. Mapalo, 17 SCRA 114, May 19, 1966
22. Martinez v. Court of Appeals, 56 SCRA 647
23. Melliza v. City of Iloilo, 23 SCRA 477
24. Villonco Realty Company v. Bormaheco, Inc., supra
25. Spouses Doromal, Sr. and Salas v. Court of Appeals, 66 SCRA 575, September 5, 1975
26. Goldenrod v. Court of Appeals, 299 SCRA 141, November 24, 1998
27. De Leon v. Salvador, 36 SCRA 566, December 28, 1970
28. Velasco v. Court of Appeals, 51 SCRA 439, June 29, 1973
PERFECTION OF THE CONTRACT
29. Sanchez v. Rigos, 145 SCRA 368, June 14, 1972
30. Equatorial Realty Dev’t, Inc. v. Mayfair Theater, Inc., 264 SCRA 483, November 21, 1996
31. Paredes v. Espino, 22 SCRA 1000, March 13, 1968
32. Inigo v. Maloto, 21 SCRA 246, September 28, 1967
33. Cuyugan v. Santos, 34 Phil 100, March 3, 1916
34. Dalion v. Court of Appeals, 182 SCRA 872, February 28, 1990
35. Yuvienco v. Dacuycuy, 104 SCRA 668, May 27, 1981
36. Vda. De Jomoc v. Court of Appeals, 200 SCRA 74, August 2, 1991
37. Santos v. Manalili, 475 SCRA 679, November 22, 2005
RIGHTS AND OBLIGATIONS OF THE VENDOR
38. Cuison v. Remoto, 472 SCRA 274, October 11, 2005
39. Sun Bros. v. Velasco, 54 O.G. 5143, August 11, 1958
40. Salonga v. Concepcion, 470 SCRA 291, September 20, 2005
41. Sigaya v. Mayuga, 467 SCRA 341, August 18, 2005
42. Premiere Dev’t Bank v. Court of Appeals, 453 SCRA 630, March 18, 2005
43. Siy Cong Bieng and Co. v. HSBC, 56 Phil 598 [1932]
44. Masiclat v. Centeno, May 31, 1956
45. Ilao-Quianay v. Mapile, 474 SCRA 246
46. Vallarta v. Court of Appeals, 150 SCRA 336, May 29, 1987
47. Lawyer’s Cooperative v. Tabora, 13 SCRA 762, April 30, 1965
48. De Lizardi v. Yaptico, 30 Phil 211, March 22, 1915
49. Sun Bros. Appliances v. Perez, 7 SCRA 977, April 30, 1963
50. Cuison v. Remoto, supra
51. Ulep v. Court of Appeals, 472 SCRA 274, October 11, 2005
52. Sigaya v. Mayuga, supra
53. Bautista v. Sioson, 39 Phil 615, February 11, 1919
54. Lichauco v. Berenguer, 39 Phil 643, February 27, 1919
55. Paylago v. Jarabe, 22 SCRA 1247, March 27, 1968
56. Quimson v. Rosete, 87 Phil 159, August 9, 1950
57. Carumba v. Court of Appeals, 31 SCRA 558, February 18, 1970
58. Vda. De Jomoc v. Court of Appeals, supra
59. Hanopol v. Pilapil, 7 SCRA 452, February 28, 1963
60. Kuenzle & Streiff v. Macke & Chandler, 14 Phil 610
61. Dy, Jr. v. Court of Appeals, 198 SCRA 826
62. Power Commercial and Ind’l Corp. v. CA, 274 SCRA 597
63. Florendo v. Foz, 20 Phil 388
64. Philippine Suburban Dev’t. Corp. v. The Auditor General, 63 SCRA 397,
WARRANTIES
65. Carrascoso, Jr. v. Court of Appeals, supra
66. Philippine Manufacturing Co. v. Go Joco, 48 Phil 621
67. Guinhawa v. People, 468 SCRA 278
68. Power Commercial and Ind’l Corp. v. CA, supra
69. Bautista v. Lasam, 72 Phil 506
70. Mendoza v. Caparros, 94 Phil 317
RIGHTS AND OBLIGATIONS OF THE VENDEE
71. Ramos v. Heruela, 473 SCRA 79
72. Fabrigas v. San Francisco del Monte, Inc. 476 SCRA 247
REMEDIES FOR BREACH OF CONTRACT
73. Katigbak v. Court of Appeals, 4 SCRA 242
74. Song Fo & Co. v. Hawaiian-Phil. Co., 47 Phil 821
75. Luneta Motor C. v. Salvador, 108 Phil 1037
76. Industrial Finance Corp. v. Ramirez, 77 SCRA 152
77. Northern Motors, Inc. v. Sapinoso, 33 SCRA 1970
78. UMC v. Dy Hian Tat, 28 SCRA 161
79. Cruz v. Filipinas Investment & Finance Corp., 23 SCRA 791
EXTINGUISHMENT OF SALE
80. Cadungog v. Yap, 469 SCRA 561
81. Salonga v. Concepcion, supra
82. Go v. Bacaron, 472 SCRA 339
83. Gerardino, Sr. v. CFI Capiz Br. III, 80 SCRA 646
84. Yturralde v. CA, 43 SCRA 315
85. Marquez v. Valencia, 77 Phil 782
86. Spouses Doromal Sr. and Salas v. Court of Appeals, supra
87. Almendrada v. Ngo, 471 SCRA 311, September 30, 2005
88. Aguilar v. Aguilar, 478 SCRA 187, December 16, 2005
89. Villasor v. Medel, 81 Phil 546, September 29, 1948
90. Ortega v. Orcine, 38 SCRA 276, March 31, 1971