Law On Sales

LAW ON SALES
Atty. Abigail Co
TITLE VI after the perfection of the contract of sale, in

SALES this Title called "future goods."
There may be a contract of sale of goods, whose
acquisition by the seller depends upon a
CHAPTER 1 contingency which may or may not happen. (n)
Nature and Form of the Contract
Article 1458. Article 1463.
By the contract of sale one of the contracting The sole owner of a thing may sell an undivided
parties obligates himself to transfer the interest therein. (n)
ownership and to deliver a determinate thing,
and the other to pay therefor a price certain in Article 1464.
money or its equivalent. In the case of fungible goods, there may be a
A contract of sale may be absolute or sale of an undivided share of a specific mass,
conditional. (1445a) though the seller purports to sell and the buyer
to buy a definite number, weight or measure of
Article 1459. the goods in the mass, and though the number,
The thing must be licit and the vendor must weight or measure of the goods in the mass, and
have a right to transfer the ownership thereof though the number, weight or measure of the
at the time it is delivered. (n) goods in the mass is undetermined. By such a
sale the buyer becomes owner in common of
Article 1460. such a share of the mass as the number, weight
A thing is determinate when it is particularly or measure bought bears to the number, weight
designated or physical segregated from all or measure of the mass. If the mass contains
others of the same class. less than the number, weight or measure
The requisite that a thing be determinate is bought, the buyer becomes the owner of the
satisfied if at the time the contract is entered whole mass and the seller is bound to make
into, the thing is capable of being made good the deficiency from goods of the same kind
determinate without the necessity of a new or and quality, unless a contrary intent appears.
further agreement between the parties. (n) (n)

Things having a potential existence may be the Things subject to a resolutory condition may be
object of the contract of sale. the object of the contract of sale. (n)
The efficacy of the sale of a mere hope or
expectancy is deemed subject to the condition
that the thing will come into existence. Article 1466.
The sale of a vain hope or expectancy is void. In construing a contract containing provisions
(n) characteristic of both the contract of sale and
of the contract of agency to sell, the essential
clauses of the whole instrument shall be
considered. (n)
Article 1462.
The goods which form the subject of a contract Article 1467.
of sale may be either existing goods, owned or A contract for the delivery at a certain price of
possessed by the seller, or goods to be an article which the vendor in the ordinary
manufactured, raised, or acquired by the seller course of his business manufactures or procures
for the general market, whether the same is on
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hand at the time or not, is a contract of sale,

but if the goods are to be manufactured Article 1472.
specially for the customer and upon his special The price of securities, grain, liquids, and other
order, and not for the general market, it is a things shall also be considered certain, when
contract for a piece of work. (n) the price fixed is that which the thing sold
would have on a definite day, or in a particular
Article 1468. exchange or market, or when an amount is fixed
If the consideration of the contract consists above or below the price on such day, or in such
partly in money, and partly in another thing, exchange or market, provided said amount be
the transaction shall be characterized by the certain. (1448)
manifest intention of the parties. If such
intention does not clearly appear, it shall be Article 1473.
considered a barter if the value of the thing The fixing of the price can never be left to the
given as a part of the consideration exceeds the discretion of one of the contracting parties.
amount of the money or its equivalent; However, if the price fixed by one of the parties
otherwise, it is a sale. (1446a) is accepted by the other, the sale is perfected.
(1449a)
Article 1469.
In order that the price may be considered Article 1474.
certain, it shall be sufficient that it be so with Where the price cannot be determined in
reference to another thing certain, or that the accordance with the preceding articles, or in
determination thereof be left to the judgment any other manner, the contract is inefficacious.
of a special person or persons. However, if the thing or any part thereof has
Should such person or persons be unable or been delivered to and appropriated by the
unwilling to fix it, the contract shall be buyer he must pay a reasonable price therefor.
inefficacious, unless the parties subsequently What is a reasonable price is a question of fact
agree upon the price. dependent on the circumstances of each
If the third person or persons acted in bad faith particular case. (n)
or by mistake, the courts may fix the price.
Where such third person or persons are Article 1475.
prevented from fixing the price or terms by The contract of sale is perfected at the moment
fault of the seller or the buyer, the party not in there is a meeting of minds upon the thing
fault may have such remedies against the party which is the object of the contract and upon the
in fault as are allowed the seller or the buyer, price.
as the case may be. (1447a) From that moment, the parties may reciprocally
demand performance, subject to the provisions
Article 1470. of the law governing the form of contracts.
Gross inadequacy of price does not affect a (1450a)
contract of sale, except as it may indicate a
defect in the consent, or that the parties really Article 1476.
intended a donation or some other act or In the case of a sale by auction:
contract. (n) (1) Where goods are put up for sale by auction
in lots, each lot is the subject of a
Article 1471. separate contract of sale.
If the price is simulated, the sale is void, but (2) A sale by auction is perfected when the
the act may be shown to have been in reality a auctioneer announces its perfection by the
donation, or some other act or contract. (n) fall of the hammer, or in other customary
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manner. Until such announcement is made, This rule shall apply to the sale of fungible
any bidder may retract his bid; and the things, made independently and for a single
auctioneer may withdraw the goods from price, or without consideration of their weight,
the sale unless the auction has been number, or measure.
announced to be without reserve. Should fungible things be sold for a price fixed
(3) A right to bid may be reserved expressly by according to weight, number, or measure, the
or on behalf of the seller, unless otherwise risk shall not be imputed to the vendee until
provided by law or by stipulation. they have been weighed, counted, or measured
(4) Where notice has not been given that a and delivered, unless the latter has incurred in
sale by auction is subject to a right to bid delay. (1452a)
on behalf of the seller, it shall not be
lawful for the seller to bid himself or to Article 1481.
employ or induce any person to bid at such In the contract of sale of goods by description or
sale on his behalf or for the auctioneer, to by sample, the contract may be rescinded if the
employ or induce any person to bid at such bulk of the goods delivered do not correspond
sale on behalf of the seller or knowingly to with the description or the sample, and if the
take any bid from the seller or any person contract be by sample as well as description, it
employed by him. Any sale contravening is not sufficient that the bulk of goods
this rule may be treated as fraudulent by correspond with the sample if they do not also
the buyer. correspond with the description.
The buyer shall have a reasonable opportunity
Article 1477. of comparing the bulk with the description or
The ownership of the thing sold shall be the sample. (n)
transferred to the vendee upon the actual or
constructive delivery thereof. (n) Article 1482.
Whenever earnest money is given in a contract
Article 1478. of sale, it shall be considered as part of the
The parties may stipulate that ownership in the price and as proof of the perfection of the
thing shall not pass to the purchaser until he has contract. (1454a)
fully paid the price. (n)
Article 1483.
Article 1479. Subject to the provisions of the Statute of
A promise to buy and sell a determinate thing Frauds and of any other applicable statute, a
for a price certain is reciprocally demandable. contract of sale may be made in writing, or by
An accepted unilateral promise to buy or to sell word of mouth, or partly in writing and partly
a determinate thing for a price certain is by word of mouth, or may be inferred from the
binding upon the promisor if the promise is conduct of the parties. (n)
supported by a consideration distinct from the
price. (1451a) Article 1484.
In a contract of sale of personal property the
Article 1480. price of which is payable in installments, the
Any injury to or benefit from the thing sold, vendor may exercise any of the following
after the contract has been perfected, from the remedies:
moment of the perfection of the contract to the (1) Exact fulfillment of the obligation,
time of delivery, shall be governed by articles should the vendee fail to pay;
1163 to 1165, and 1262.
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(2) Cancel the sale, should the vendee's Where necessaries are those sold and delivered
failure to pay cover two or more to a minor or other person without capacity to
installments; act, he must pay a reasonable price therefor.
(3) Foreclose the chattel mortgage on the Necessaries are those referred to in article 290.
thing sold, if one has been (1457a)
constituted, should the vendee's
failure to pay cover two or more Article 1490. T
installments. In this case, he shall he husband and the wife cannot sell property to
have no further action against the each other, except:
purchaser to recover any unpaid (1) When a separation of property was
balance of the price. Any agreement agreed upon in the marriage
to the contrary shall be void. (1454-A- settlements; or
a) (2) When there has been a judicial
separation of property under article
Article 1485. 191.
The preceding article shall be applied to Article 1491.
contracts purporting to be leases of personal The following persons cannot acquire by
property with option to buy, when the lessor purchase, even at a public or judicial auction,
has deprived the lessee of the possession or either in person or through the mediation of
enjoyment of the thing. (1454-A-a) another:
1. The guardian, the property of the
Article 1486. person or persons who may be under
In the case referred to in the two preceding his guardianship;
articles, a stipulation that the installments or 2. Agents, the property whose
rents paid shall not be returned to the vendee administration or sale may have been
or lessee shall be valid insofar as the same may intrusted to them, unless the consent
not be unconscionable under the circumstances. of the principal has been given;
(n) 3. Executors and administrators, the
property of the estate under
Article 1487. administration;
The expenses for the execution and registration 4. Public officers and employees, the
of the sale shall be borne by the vendor, unless property of the State or of any
there is a stipulation to the contrary. (1455a) subdivision thereof, or of any
government-owned or controlled
Article 1488. corporation, or institution, the
The expropriation of property for public use is administration of which has been
governed by special laws. intrusted to them; this provision shall
apply to judges and government
experts who, in any manner
CHAPTER 2 whatsoever, take part in the sale;
Capacity to Buy or Sell 5. Justices, judges, prosecuting
attorneys, clerks of superior and
Article 1489. inferior courts, and other officers and
All persons who are authorized in this Code to employees connected with the
obligate themselves, may enter into a contract administration of justice, the property
of sale, saving the modifications contained in and rights in litigation or levied upon
the following articles. an execution before the court within
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whose jurisdiction or territory they in which the ownership will pass, if

exercise their respective functions; the sale was divisible. (n)
this prohibition includes the act of
acquiring by assignment and shall
apply to lawyers, with respect to the CHAPTER 4
property and rights which may be the Obligations of the Vendor
object of any litigation in which they
may take part by virtue of their
profession; SECTION 1
6. Any others specially disqualified by General Provisions
law. (1459a) Article 1495.
The vendor is bound to transfer the ownership
Article 1492. of and deliver, as well as warrant the thing
The prohibitions in the two preceding articles which is the object of the sale. (1461a)
are applicable to sales in legal redemption,
compromises and renunciations. (n) Article 1496.
The ownership of the thing sold is acquired by
the vendee from the moment it is delivered to
CHAPTER 3 him in any of the ways specified in articles 1497
Effects of the Contract When the Thing Sold to 1501, or in any other manner signifying an
Has Been Lost agreement that the possession is transferred
from the vendor to the vendee. (n)
Article 1493.
If at the time the contract of sale is perfected,
the thing which is the object of the contract has SECTION 2
been entirely lost, the contract shall be without Delivery of the Thing Sold
any effect.
But if the thing should have been lost in part Article 1497.
only, the vendee may choose between The thing sold shall be understood as delivered,
withdrawing from the contract and demanding when it is placed in the control and possession
the remaining part, paying its price in of the vendee. (1462a)
proportion to the total sum agreed upon.
(1460a) Article 1498.
When the sale is made through a public
Article 1494. instrument, the execution thereof shall be
Where the parties purport a sale of specific equivalent to the delivery of the thing which is
goods, and the goods without the knowledge of the object of the contract, if from the deed the
the seller have perished in part or have wholly contrary does not appear or cannot clearly be
or in a material part so deteriorated in quality inferred.
as to be substantially changed in character, the With regard to movable property, its delivery
buyer may at his option treat the sale: may also be made by the delivery of the keys of
(1) As avoided; or the place or depository where it is stored or
(2) As valid in all of the existing goods or kept. (1463a)
in so much thereof as have not
deteriorated, and as binding the buyer Article 1499.
to pay the agreed price for the goods The delivery of movable property may likewise
be made by the mere consent or agreement of
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the contracting parties, if the thing sold cannot Article 1503.

be transferred to the possession of the vendee When there is a contract of sale of specific
at the time of the sale, or if the latter already goods, the seller may, by the terms of the
had it in his possession for any other reason. contract, reserve the right of possession or
(1463a) ownership in the goods until certain conditions
have been fulfilled. The right of possession or
Article 1500. ownership may be thus reserved
There may also be tradition constitutum notwithstanding the delivery of the goods to the
possessorium. (n) buyer or to a carrier or other bailee for the
purpose of transmission to the buyer.
Article 1501. Where goods are shipped, and by the bill of
With respect to incorporeal property, the lading the goods are deliverable to the seller or
provisions of the first paragraph of article 1498 his agent, or to the order of the seller or of his
shall govern. In any other case wherein said agent, the seller thereby reserves the ownership
provisions are not applicable, the placing of the in the goods. But, if except for the form of the
titles of ownership in the possession of the bill of lading, the ownership would have passed
vendee or the use by the vendee of his rights, to the buyer on shipment of the goods, the
with the vendor's consent, shall be understood seller's property in the goods shall be deemed to
as a delivery. (1464) be only for the purpose of securing performance
by the buyer of his obligations under the
Article 1502. contract.
When goods are delivered to the buyer "on sale Where goods are shipped, and by the bill of
or return" to give the buyer an option to return lading the goods are deliverable to order of the
the goods instead of paying the price, the buyer or of his agent, but possession of the bill
ownership passes to the buyer on delivery, but of lading is retained by the seller or his agent,
he may revest the ownership in the seller by the seller thereby reserves a right to the
returning or tendering the goods within the time possession of the goods as against the buyer.
fixed in the contract, or, if no time has been Where the seller of goods draws on the buyer
fixed, within a reasonable time. (n) for the price and transmits the bill of exchange
When goods are delivered to the buyer on and bill of lading together to the buyer to
approval or on trial or on satisfaction, or other secure acceptance or payment of the bill of
similar terms, the ownership therein passes to exchange, the buyer is bound to return the bill
the buyer: of lading if he does not honor the bill of
(1) When he signifies his approval or exchange, and if he wrongfully retains the bill
acceptance to the seller or does any of lading he acquires no added right thereby. If,
other act adopting the transaction; however, the bill of lading provides that the
(2) If he does not signify his approval or goods are deliverable to the buyer or to the
acceptance to the seller, but retains order of the buyer, or is indorsed in blank, or to
the goods without giving notice of the buyer by the consignee named therein, one
rejection, then if a time has been who purchases in good faith, for value, the bill
fixed for the return of the goods, on of lading, or goods from the buyer will obtain
the expiration of such time, and, if no the ownership in the goods, although the bill of
time has been fixed, on the expiration exchange has not been honored, provided that
of a reasonable time. What is a such purchaser has received delivery of the bill
reasonable time is a question of fact. of lading indorsed by the consignee named
(n) therein, or of the goods, without notice of the
facts making the transfer wrongful. (n)
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Article 1506.
Article 1504. Where the seller of goods has a voidable title
Unless otherwise agreed, the goods remain at thereto, but his title has not been avoided at
the seller's risk until the ownership therein is the time of the sale, the buyer acquires a good
transferred to the buyer, but when the title to the goods, provided he buys them in
ownership therein is transferred to the buyer good faith, for value, and without notice of the
the goods are at the buyer's risk whether actual seller's defect of title. (n)
delivery has been made or not, except that:
(1) Where delivery of the goods has been Article 1507.
made to the buyer or to a bailee for the A document of title in which it is stated that the
buyer, in pursuance of the contract and goods referred to therein will be delivered to
the ownership in the goods has been the bearer, or to the order of any person named
retained by the seller merely to secure in such document is a negotiable document of
performance by the buyer of his title. (n)
obligations under the contract, the goods
are at the buyer's risk from the time of Article 1508.
such delivery; A negotiable document of title may be
(2) Where actual delivery has been delayed negotiated by delivery:
through the fault of either the buyer or (1) Where by the terms of the document
seller the goods are at the risk of the the carrier, warehouseman or other
party in fault. (n) bailee issuing the same undertakes to
deliver the goods to the bearer; or
Article 1505. (2) Where by the terms of the document
Subject to the provisions of this Title, where the carrier, warehouseman or other
goods are sold by a person who is not the owner bailee issuing the same undertakes to
thereof, and who does not sell them under deliver the goods to the order of a
authority or with the consent of the owner, the specified person, and such person or a
buyer acquires no better title to the goods than subsequent indorsee of the document
the seller had, unless the owner of the goods is has indorsed it in blank or to the
by his conduct precluded from denying the bearer.
seller's authority to sell. Where by the terms of a negotiable
Nothing in this Title, however, shall affect: document of title the goods are
(1) The provisions of any factors' act, deliverable to bearer or where a
recording laws, or any other provision negotiable document of title has been
of law enabling the apparent owner of indorsed in blank or to bearer, any holder
goods to dispose of them as if he were may indorse the same to himself or to
the true owner thereof; any specified person, and in such case
(2) The validity of any contract of sale the document shall thereafter be
under statutory power of sale or negotiated only by the indorsement of
under the order of a court of such indorsee. (n)
competent jurisdiction;
(3) Purchases made in a merchant's store, Article 1509.
or in fairs, or markets, in accordance A negotiable document of title may be
with the Code of Commerce and negotiated by the indorsement of the person to
special laws. (n) whose order the goods are by the terms of the
document deliverable. Such indorsement may
be in blank, to bearer or to a specified person.
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If indorsed to a specified person, it may be

again negotiated by the indorsement of such Article 1513.
person in blank, to bearer or to another A person to whom a negotiable document of
specified person. Subsequent negotiations may title has been duly negotiated acquires thereby:
be made in like manner. (n) 1. Such title to the goods as the person
negotiating the document to him had or
Article 1510. had ability to convey to a purchaser in
If a document of title which contains an good faith for value and also such title to
undertaking by a carrier, warehouseman or the goods as the person to whose order the
other bailee to deliver the goods to bearer, to a goods were to be delivered by the terms of
specified person or order of a specified person the document had or had ability to convey
or which contains words of like import, has to a purchaser in good faith for value; and
placed upon it the words "not negotiable," "non- 2. The direct obligation of the bailee issuing
negotiable" or the like, such document may the document to hold possession of the
nevertheless be negotiated by the holder and is goods for him according to the terms of the
a negotiable document of title within the document as fully as if such bailee had
meaning of this Title. But nothing in this Title contracted directly with him. (n)
contained shall be construed as limiting or
defining the effect upon the obligations of the Article 1514.
carrier, warehouseman, or other bailee issuing a A person to whom a document of title has been
document of title or placing thereon the words transferred, but not negotiated, acquires
"not negotiable," "non-negotiable," or the like. thereby, as against the transferor, the title to
(n) the goods, subject to the terms of any
agreement with the transferor.
Article 1511. If the document is non-negotiable, such person
A document of title which is not in such form also acquires the right to notify the bailee who
that it can be negotiated by delivery may be issued the document of the transfer thereof,
transferred by the holder by delivery to a and thereby to acquire the direct obligation of
purchaser or donee. A non-negotiable document such bailee to hold possession of the goods for
cannot be negotiated and the indorsement of him according to the terms of the document.
such a document gives the transferee no Prior to the notification to such bailee by the
additional right. (n) transferor or transferee of a non-negotiable
document of title, the title of the transferee to
Article 1512. the goods and the right to acquire the obligation
A negotiable document of title may be of such bailee may be defeated by the levy of
negotiated: an attachment of execution upon the goods by a
(1) By the owner thereof; or creditor of the transferor, or by a notification to
(2) By any person to whom the possession or such bailee by the transferor or a subsequent
custody of the document has been purchaser from the transferor of a subsequent
entrusted by the owner, if, by the terms of sale of the goods by the transferor. (n)
the document the bailee issuing the
document undertakes to deliver the goods Article 1515.
to the order of the person to whom the Where a negotiable document of title is
possession or custody of the document has transferred for value by delivery, and the
been entrusted, or if at the time of such indorsement of the transferor is essential for
entrusting the document is in such form negotiation, the transferee acquires a right
that it may be negotiated by delivery. (n) against the transferor to compel him to indorse
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the document unless a contrary intention

appears. The negotiation shall take effect as of Article 1519.
the time when the indorsement is actually If goods are delivered to a bailee by the owner
made. (n) or by a person whose act in conveying the title
to them to a purchaser in good faith for value
Article 1516. would bind the owner and a negotiable
A person who for value negotiates or transfers a document of title is issued for them they cannot
document of title by indorsement or delivery, thereafter, while in possession of such bailee,
including one who assigns for value a claim be attached by garnishment or otherwise or be
secured by a document of title unless a contrary levied under an execution unless the document
intention appears, warrants: be first surrendered to the bailee or its
(1) That the document is genuine; negotiation enjoined. The bailee shall in no case
(2) That he has a legal right to negotiate or be compelled to deliver up the actual possession
transfer it; of the goods until the document is surrendered
(3) That he has knowledge of no fact which to him or impounded by the court. (n)
would impair the validity or worth of the
document; and Article 1520.
(4) That he has a right to transfer the title to A creditor whose debtor is the owner of a
the goods and that the goods are negotiable document of title shall be entitled to
merchantable or fit for a particular such aid from courts of appropriate jurisdiction
purpose, whenever such warranties would by injunction and otherwise in attaching such
have been implied if the contract of the document or in satisfying the claim by means
parties had been to transfer without a thereof as is allowed at law or in equity in
document of title the goods represented regard to property which cannot readily be
thereby. (n) attached or levied upon by ordinary legal
process. (n)
Article 1517.
The indorsement of a document of title shall Article 1521.
not make the indorser liable for any failure on Whether it is for the buyer to take possession of
the part of the bailee who issued the document the goods or of the seller to send them to the
or previous indorsers thereof to fulfill their buyer is a question depending in each case on
respective obligations. (n) the contract, express or implied, between the
parties. Apart from any such contract, express
Article 1518. or implied, or usage of trade to the contrary,
The validity of the negotiation of a negotiable the place of delivery is the seller's place of
document of title is not impaired by the fact business if he has one, and if not his residence;
that the negotiation was a breach of duty on the but in case of a contract of sale of specific
part of the person making the negotiation, or by goods, which to the knowledge of the parties
the fact that the owner of the document was when the contract or the sale was made were in
deprived of the possession of the same by loss, some other place, then that place is the place
theft, fraud, accident, mistake, duress, or of delivery.
conversion, if the person to whom the document Where by a contract of sale the seller is bound
was negotiated or a person to whom the to send the goods to the buyer, but no time for
document was subsequently negotiated paid sending them is fixed, the seller is bound to
value therefor in good faith without notice of send them within a reasonable time.
the breach of duty, or loss, theft, fraud, Where the goods at the time of sale are in the
accident, mistake, duress or conversion. (n) possession of a third person, the seller has not
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fulfilled his obligation to deliver to the buyer goods to the buyer, delivery of the goods to a
unless and until such third person acknowledges carrier, whether named by the buyer or not, for
to the buyer that he holds the goods on the the purpose of transmission to the buyer is
buyer's behalf. deemed to be a delivery of the goods to the
Demand or tender of delivery may be treated as buyer, except in the cases provided for in
ineffectual unless made at a reasonable hour. article 1503, first, second and third paragraphs,
What is a reasonable hour is a question of fact. or unless a contrary intent appears.
Unless otherwise agreed, the expenses of and Unless otherwise authorized by the buyer, the
incidental to putting the goods into a seller must make such contract with the carrier
deliverable state must be borne by the seller. on behalf of the buyer as may be reasonable,
(n) having regard to the nature of the goods and
the other circumstances of the case. If the
Article 1522. seller omit so to do, and the goods are lost or
Where the seller delivers to the buyer a damaged in course of transit, the buyer may
quantity of goods less than he contracted to decline to treat the delivery to the carrier as a
sell, the buyer may reject them, but if the delivery to himself, or may hold the seller
buyer accepts or retains the goods so delivered, responsible in damages.
knowing that the seller is not going to perform Unless otherwise agreed, where goods are sent
the contract in full, he must pay for them at the by the seller to the buyer under circumstances
contract rate. If, however, the buyer has used in which the seller knows or ought to know that
or disposed of the goods delivered before he it is usual to insure, the seller must give such
knows that the seller is not going to perform his notice to the buyer as may enable him to insure
contract in full, the buyer shall not be liable for them during their transit, and, if the seller fails
more than the fair value to him of the goods so to do so, the goods shall be deemed to be at his
received. risk during such transit. (n)
Where the seller delivers to the buyer a
quantity of goods larger than he contracted to Article 1524.
sell, the buyer may accept the goods included in The vendor shall not be bound to deliver the
the contract and reject the rest. If the buyer thing sold, if the vendee has not paid him the
accepts the whole of the goods so delivered he price, or if no period for the payment has been
must pay for them at the contract rate. fixed in the contract. (1466)
Where the seller delivers to the buyer the goods
he contracted to sell mixed with goods of a Article 1525.
different description not included in the The seller of goods is deemed to be an unpaid
contract, the buyer may accept the goods which seller within the meaning of this Title:
are in accordance with the contract and reject (1) When the whole of the price has not
the rest. been paid or tendered;
In the preceding two paragraphs, if the subject (2) When a bill of exchange or other
matter is indivisible, the buyer may reject the negotiable instrument has been
whole of the goods. received as conditional payment, and
The provisions of this article are subject to any the condition on which it was received
usage of trade, special agreement, or course of has been broken by reason of the
dealing between the parties. (n) dishonor of the instrument, the
insolvency of the buyer, or otherwise.
Article 1523. In articles 1525 to 1535 the term "seller"
Where, in pursuance of a contract of sale, the includes an agent of the seller to whom the bill
seller is authorized or required to send the of lading has been indorsed, or a consignor or
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agent who has himself paid, or is directly on the remainder, unless such part delivery has
responsible for the price, or any other person been made under such circumstances as to show
who is in the position of a seller. (n) an intent to waive the lien or right of retention.
(n)
Article 1526.
Subject to the provisions of this Title, Article 1529.
notwithstanding that the ownership in the goods The unpaid seller of goods loses his lien
may have passed to the buyer, the unpaid seller thereon:
of goods, as such, has: (1) When he delivers the goods to a
(1) A lien on the goods or right to retain carrier or other bailee for the purpose
them for the price while he is in of transmission to the buyer without
possession of them; reserving the ownership in the goods
(2) In case of the insolvency of the buyer, or the right to the possession thereof;
a right of stopping the goods in (2) When the buyer or his agent lawfully
transitu after he has parted with the obtains possession of the goods;
possession of them; (3) By waiver thereof.
(3) A right of resale as limited by this The unpaid seller of goods, having a lien
Title; thereon, does not lose his lien by reason only
(4) A right to rescind the sale as likewise that he has obtained judgment or decree for the
limited by this Title. price of the goods. (n)
Where the ownership in the goods has not
passed to the buyer, the unpaid seller has, in Article 1530.
addition to his other remedies a right of Subject to the provisions of this Title, when the
withholding delivery similar to and coextensive buyer of goods is or becomes insolvent, the
with his rights of lien and stoppage in transitu unpaid seller who has parted with the
where the ownership has passed to the buyer. possession of the goods has the right of stopping
(n) them in transitu, that is to say, he may resume
possession of the goods at any time while they
Article 1527. are in transit, and he will then become entitled
Subject to the provisions of this Title, the to the same rights in regard to the goods as he
unpaid seller of goods who is in possession of would have had if he had never parted with the
them is entitled to retain possession of them possession.
until payment or tender of the price in the
following cases, namely: Article 1531.
(1) Where the goods have been sold Goods are in transit within the meaning of the
without any stipulation as to credit; preceding article:
(2) Where the goods have been sold on (1) From the time when they are
credit, but the term of credit has delivered to a carrier by land, water,
expired; or air, or other bailee for the purpose
(3) Where the buyer becomes insolvent. of transmission to the buyer, until the
The seller may exercise his right of lien buyer, or his agent in that behalf,
notwithstanding that he is in possession of the takes delivery of them from such
goods as agent or bailee for the buyer. (n) carrier or other bailee;
(2) If the goods are rejected by the
Article 1528. buyer, and the carrier or other bailee
Where an unpaid seller has made part delivery continues in possession of them, even
of the goods, he may exercise his right of lien
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if the seller has refused to receive at such time and under such circumstances that
them back. the principal, by the exercise of reasonable
Goods are no longer in transit within the diligence, may prevent a delivery to the buyer.
meaning of the preceding article: When notice of stoppage in transitu is given by
(1) If the buyer, or his agent in that the seller to the carrier, or other bailee in
behalf, obtains delivery of the goods possession of the goods, he must redeliver the
before their arrival at the appointed goods to, or according to the directions of, the
destination; seller. The expenses of such delivery must be
(2) If, after the arrival of the goods at the borne by the seller. If, however, a negotiable
appointed destination, the carrier or document of title representing the goods has
other bailee acknowledges to the been issued by the carrier or other bailee, he
buyer or his agent that he holds the shall not be obliged to deliver or justified in
goods on his behalf and continues in delivering the goods to the seller unless such
possession of them as bailee for the document is first surrendered for cancellation.
buyer or his agent; and it is (n)
immaterial that further destination
for the goods may have been Article 1533.
indicated by the buyer; Where the goods are of perishable nature, or
(3) If the carrier or other bailee where the seller expressly reserves the right of
wrongfully refuses to deliver the resale in case the buyer should make default, or
goods to the buyer or his agent in that where the buyer has been in default in the
behalf. payment of the price for an unreasonable time,
an unpaid seller having a right of lien or having
If the goods are delivered to a ship, freight stopped the goods in transitu may resell the
train, truck, or airplane chartered by the buyer, goods. He shall not thereafter be liable to the
it is a question depending on the circumstances original buyer upon the contract of sale or for
of the particular case, whether they are in the any profit made by such resale, but may recover
possession of the carrier as such or as agent of from the buyer damages for any loss occasioned
the buyer. by the breach of the contract of sale.
Where a resale is made, as authorized in this
If part delivery of the goods has been made to article, the buyer acquires a good title as
the buyer, or his agent in that behalf, the against the original buyer.
remainder of the goods may be stopped in It is not essential to the validity of resale that
transitu, unless such part delivery has been notice of an intention to resell the goods be
under such circumstances as to show an given by the seller to the original buyer. But
agreement with the buyer to give up possession where the right to resell is not based on the
of the whole of the goods. (n) perishable nature of the goods or upon an
express provision of the contract of sale, the
Article 1532. giving or failure to give such notice shall be
The unpaid seller may exercise his right of relevant in any issue involving the question
stoppage in transitu either by obtaining actual whether the buyer had been in default for an
possession of the goods or by giving notice of his unreasonable time before the resale was made.
claim to the carrier or other bailee in whose It is not essential to the validity of a resale that
possession the goods are. Such notice may be notice of the time and place of such resale
given either to the person in actual possession should be given by the seller to the original
of the goods or to his principal. In the latter buyer.
case the notice, to be effectual, must be given
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The seller is bound to exercise reasonable care

and judgment in making a resale, and subject to Article 1536.
this requirement may make a resale either by The vendor is not bound to deliver the thing
public or private sale. He cannot, however, sold in case the vendee should lose the right to
directly or indirectly buy the goods. (n) make use of the terms as provided in article
1198. (1467a)
Article 1534.
An unpaid seller having the right of lien or Article 1537.
having stopped the goods in transitu, may The vendor is bound to deliver the thing sold
rescind the transfer of title and resume the and its accessions and accessories in the
ownership in the goods, where he expressly condition in which they were upon the
reserved the right to do so in case the buyer perfection of the contract.
should make default, or where the buyer has All the fruits shall pertain to the vendee from
been in default in the payment of the price for the day on which the contract was perfected.
an unreasonable time. The seller shall not (1468a)
thereafter be liable to the buyer upon the
contract of sale, but may recover from the Article 1538.
buyer damages for any loss occasioned by the In case of loss, deterioration or improvement of
breach of the contract. the thing before its delivery, the rules in article
The transfer of title shall not be held to have 1189 shall be observed, the vendor being
been rescinded by an unpaid seller until he has considered the debtor. (n)
manifested by notice to the buyer or by some
other overt act an intention to rescind. It is not Article 1539.
necessary that such overt act should be The obligation to deliver the thing sold includes
communicated to the buyer, but the giving or that of placing in the control of the vendee all
failure to give notice to the buyer of the that is mentioned in the contract, in conformity
intention to rescind shall be relevant in any with the following rules:
issue involving the question whether the buyer If the sale of real estate should be made with a
had been in default for an unreasonable time statement of its area, at the rate of a certain
before the right of rescission was asserted. (n) price for a unit of measure or number, the
vendor shall be obliged to deliver to the
Article 1535. vendee, if the latter should demand it, all that
Subject to the provisions of this Title, the may have been stated in the contract; but,
unpaid seller's right of lien or stoppage in should this be not possible, the vendee may
transitu is not affected by any sale, or other choose between a proportional reduction of the
disposition of the goods which the buyer may price and the rescission of the contract,
have made, unless the seller has assented provided that, in the latter case, the lack in the
thereto. area be not less than one-tenth of that stated.
If, however, a negotiable document of title has The same shall be done, even when the area is
been issued for goods, no seller's lien or right of the same, if any part of the immovable is not of
stoppage in transitu shall defeat the right of any the quality specified in the contract.
purchaser for value in good faith to whom such The rescission, in this case, shall only take place
document has been negotiated, whether such at the will of the vendee, when the inferior
negotiation be prior or subsequent to the value of the thing sold exceeds one-tenth of the
notification to the carrier, or other bailee who price agreed upon.
issued such document, of the seller's claim to a Nevertheless, if the vendee would not have
lien or right of stoppage in transitu. (n) bought the immovable had he known of its
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smaller area of inferior quality, he may rescind transferred to the person who may have first
the sale. (1469a) taken possession thereof in good faith, if it
should be movable property.
Article 1540. Should it be immovable property, the ownership
If, in the case of the preceding article, there is shall belong to the person acquiring it who in
a greater area or number in the immovable than good faith first recorded it in the Registry of
that stated in the contract, the vendee may Property.
accept the area included in the contract and Should there be no inscription, the ownership
reject the rest. If he accepts the whole area, he shall pertain to the person who in good faith
must pay for the same at the contract rate. was first in the possession; and, in the absence
(1470a) thereof, to the person who presents the oldest
title, provided there is good faith. (1473)
Article 1541.
The provisions of the two preceding articles
shall apply to judicial sales. (n) SECTION 3
Conditions and Warranties
Article 1542.
In the sale of real estate, made for a lump sum Article 1545.
and not at the rate of a certain sum for a unit of Where the obligation of either party to a
measure or number, there shall be no increase contract of sale is subject to any condition
or decrease of the price, although there be a which is not performed, such party may refuse
greater or less area or number than that stated to proceed with the contract or he may waive
in the contract. performance of the condition. If the other party
The same rule shall be applied when two or has promised that the condition should happen
more immovables as sold for a single price; but or be performed, such first mentioned party
if, besides mentioning the boundaries, which is may also treat the nonperformance of the
indispensable in every conveyance of real condition as a breach of warranty.
estate, its area or number should be designated Where the ownership in the thing has not
in the contract, the vendor shall be bound to passed, the buyer may treat the fulfillment by
deliver all that is included within said the seller of his obligation to deliver the same
boundaries, even when it exceeds the area or as described and as warranted expressly or by
number specified in the contract; and, should implication in the contract of sale as a condition
he not be able to do so, he shall suffer a of the obligation of the buyer to perform his
reduction in the price, in proportion to what is promise to accept and pay for the thing. (n)
lacking in the area or number, unless the
contract is rescinded because the vendee does Article 1546.
not accede to the failure to deliver what has Any affirmation of fact or any promise by the
been stipulated. (1471) seller relating to the thing is an express
warranty if the natural tendency of such
Article 1543. affirmation or promise is to induce the buyer to
The actions arising from articles 1539 and 1542 purchase the same, and if the buyer purchases
shall prescribe in six months, counted from the the thing relying thereon. No affirmation of the
day of delivery. (1472a) value of the thing, nor any statement purporting
to be a statement of the seller's opinion only,
Article 1544. shall be construed as a warranty, unless the
If the same thing should have been sold to seller made such affirmation or statement as an
different vendees, the ownership shall be expert and it was relied upon by the buyer. (n)
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completed after the transfer, the vendor shall

Article 1547. not be liable for eviction. (n)
In a contract of sale, unless a contrary intention
appears, there is: Article 1551.
(1) An implied warranty on the part of If the property is sold for nonpayment of taxes
the seller that he has a right to sell due and not made known to the vendee before
the thing at the time when the the sale, the vendor is liable for eviction. (n)
ownership is to pass, and that the
buyer shall from that time have and Article 1552.
enjoy the legal and peaceful The judgment debtor is also responsible for
possession of the thing; eviction in judicial sales, unless it is otherwise
(2) An implied warranty that the thing decreed in the judgment. (n)
shall be free from any hidden faults or
defects, or any charge or Article 1553.
encumbrance not declared or known Any stipulation exempting the vendor from the
to the buyer. obligation to answer for eviction shall be void, if
This article shall not, however, be held to he acted in bad faith. (1476)
render liable a sheriff, auctioneer,
mortgagee, pledgee, or other person Article 1554.
professing to sell by virtue of authority in If the vendee has renounced the right to
fact or law, for the sale of a thing in warranty in case of eviction, and eviction should
which a third person has a legal or take place, the vendor shall only pay the value
equitable interest. (n) which the thing sold had at the time of the
eviction. Should the vendee have made the
SUBSECTION 1. Warranty in Case of Eviction waiver with knowledge of the risks of eviction
and assumed its consequences, the vendor shall
Article 1548. not be liable. (1477)
Eviction shall take place whenever by a final
judgment based on a right prior to the sale or Article 1555.
an act imputable to the vendor, the vendee is When the warranty has been agreed upon or
deprived of the whole or of a part of the thing nothing has been stipulated on this point, in
purchased. case eviction occurs, the vendee shall have the
The vendor shall answer for the eviction even right to demand of the vendor:
though nothing has been said in the contract on (1) The return of the value which the
the subject. thing sold had at the time of the
The contracting parties, however, may increase, eviction, be it greater or less than the
diminish, or suppress this legal obligation of the price of the sale;
vendor. (1475a) (2) The income or fruits, if he has been
ordered to deliver them to the party
Article 1549. who won the suit against him;
The vendee need not appeal from the decision (3) The costs of the suit which caused the
in order that the vendor may become liable for eviction, and, in a proper case, those
eviction. (n) of the suit brought against the vendor
for the warranty;
Article 1550. (4) The expenses of the contract, if the
When adverse possession had been commenced vendee has paid them;
before the sale but the prescriptive period is
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(5) The damages and interests, and contract, unless he should prefer the
ornamental expenses, if the sale was appropriate indemnity. Neither right can be
made in bad faith. (1478) exercised if the non-apparent burden or
servitude is recorded in the Registry of
Article 1556. Property, unless there is an express warranty
Should the vendee lose, by reason of the that the thing is free from all burdens and
eviction, a part of the thing sold of such encumbrances.
importance, in relation to the whole, that he Within one year, to be computed from the
would not have bought it without said part, he execution of the deed, the vendee may bring
may demand the rescission of the contract; but the action for rescission, or sue for damages.
with the obligation to return the thing without One year having elapsed, he may only bring an
other encumbrances that those which it had action for damages within an equal period, to
when he acquired it. be counted from the date on which he
He may exercise this right of action, instead of discovered the burden or servitude.
enforcing the vendor's liability for eviction.
The same rule shall be observed when two or SUBSECTION 2. Warranty Against Hidden
more things have been jointly sold for a lump Defects of or Encumbrances Upon the Thing
sum, or for a separate price for each of them, if Sold
it should clearly appear that the vendee would Article 1561.
not have purchased one without the other. The vendor shall be responsible for warranty
(1479a) against the hidden defects which the thing sold
may have, should they render it unfit for the
Article 1557. use for which it is intended, or should they
The warranty cannot be enforced until a final diminish its fitness for such use to such an
judgment has been rendered, whereby the extent that, had the vendee been aware
vendee loses the thing acquired or a part thereof, he would not have acquired it or would
thereof. (1480) have given a lower price for it; but said vendor
shall not be answerable for patent defects or
Article 1558. those which may be visible, or for those which
The vendor shall not be obliged to make good are not visible if the vendee is an expert who,
the proper warranty, unless he is summoned in by reason of his trade or profession, should have
the suit for eviction at the instance of the known them. (1484a)
vendee. (1481a)
Article 1562.
Article 1559. In a sale of goods, there is an implied warranty
The defendant vendee shall ask, within the time or condition as to the quality or fitness of the
fixed in the Rules of Court for answering the goods, as follows:
complaint, that the vendor be made a co- (1) Where the buyer, expressly or by
defendant. (1482a) implication, makes known to the seller
the particular purpose for which the
Article 1560. goods are acquired, and it appears that
If the immovable sold should be encumbered the buyer relies on the seller's skill or
with any non-apparent burden or servitude, not judgment (whether he be the grower or
mentioned in the agreement, of such a nature manufacturer or not), there is an implied
that it must be presumed that the vendee would warranty that the goods shall be
not have acquired it had he been aware reasonably fit for such purpose;
thereof, he may ask for the rescission of the
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(2) Where the goods are brought by of them, he shall bear the loss, and shall be
description from a seller who deals in obliged to return the price and refund the
goods of that description (whether he be expenses of the contract, with damages. If he
the grower or manufacturer or not), was not aware of them, he shall only return the
there is an implied warranty that the price and interest thereon, and reimburse the
goods shall be of merchantable quality. expenses of the contract which the vendee
(n) might have paid. (1487a)

In the case of contract of sale of a specified If the thing sold had any hidden fault at the
article under its patent or other trade name, time of the sale, and should thereafter be lost
there is no warranty as to its fitness for any by a fortuitous event or through the fault of the
particular purpose, unless there is a stipulation vendee, the latter may demand of the vendor
to the contrary. (n) the price which he paid, less the value which
the thing had when it was lost.
Article 1564. If the vendor acted in bad faith, he shall pay
An implied warranty or condition as to the damages to the vendee. (1488a)
quality or fitness for a particular purpose may
be annexed by the usage of trade. (n) Article 1570.
The preceding articles of this Subsection shall
Article 1565. be applicable to judicial sales, except that the
In the case of a contract of sale by sample, if judgment debtor shall not be liable for
the seller is a dealer in goods of that kind, there damages. (1489a)
is an implied warranty that the goods shall be
free from any defect rendering them Article 1571.
unmerchantable which would not be apparent Actions arising from the provisions of the
on reasonable examination of the sample. (n) preceding ten articles shall be barred after six
months, from the delivery of the thing sold.
Article 1566. (1490)
The vendor is responsible to the vendee for any
hidden faults or defects in the thing sold, even Article 1572.
though he was not aware thereof. If two or more animals are sold together,
This provision shall not apply if the contrary has whether for a lump sum or for a separate price
been stipulated, and the vendor was not aware for each of them, the redhibitory defect of one
of the hidden faults or defects in the thing sold. shall only give rise to its redhibition, and not
(1485) that of the others; unless it should appear that
the vendee would not have purchased the sound
Article 1567. animal or animals without the defective one.
In the cases of articles 1561, 1562, 1564, 1565 The latter case shall be presumed when a team,
and 1566, the vendee may elect between yoke pair, or set is bought, even if a separate
withdrawing from the contract and demanding a price has been fixed for each one of the animals
proportionate reduction of the price, with composing the same. (1491)
damages in either case. (1486a)
Article 1573.
Article 1568. The provisions of the preceding article with
If the thing sold should be lost in consequence respect to the sale of animals shall in like
of the hidden faults, and the vendor was aware
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manner be applicable to the sale of other

things. (1492) Article 1580.
In the sale of animals with redhibitory defects,
Article 1574. the vendee shall also enjoy the right mentioned
There is no warranty against hidden defects of in article 1567; but he must make use thereof
animals sold at fairs or at public auctions, or of within the same period which has been fixed for
live stock sold as condemned. (1493a) the exercise of the redhibitory action. (1499)

The sale of animals suffering from contagious The form of sale of large cattle shall be
diseases shall be void. governed by special laws. (n)
A contract of sale of animals shall also be void if
the use or service for which they are acquired
has been stated in the contract, and they are CHAPTER 5
found to be unfit therefor. Obligations of the Vendee
Article 1576. Article 1582. T

If the hidden defect of animals, even in case a he vendee is bound to accept delivery and to
professional inspection has been made, should pay the price of the thing sold at the time and
be of such a nature that expert knowledge is place stipulated in the contract.
not sufficient to discover it, the defect shall be If the time and place should not have been
considered as redhibitory. stipulated, the payment must be made at the
But if the veterinarian, through ignorance or time and place of the delivery of the thing sold.
bad faith should fail to discover or disclose it, (1500a)
he shall be liable for damages. (1495)
Article 1583.
Article 1577. Unless otherwise agreed, the buyer of goods is
The redhibitory action, based on the faults or not bound to accept delivery thereof by
defects of animals, must be brought within forty installments.
days from the date of their delivery to the Where there is a contract of sale of goods to be
vendee. delivered by stated instalments, which are to be
This action can only be exercised with respect separately paid for, and the seller makes
to faults and defects which are determined by defective deliveries in respect of one or more
law or by local customs. (1496a) instalments, or the buyer neglects or refuses
without just cause to take delivery of or pay for
Article 1578. one or more instalments, it depends in each
If the animal should die within three days after case on the terms of the contract and the
its purchase, the vendor shall be liable if the circumstances of the case, whether the breach
disease which cause the death existed at the of contract is so material as to justify the
time of the contract. (1497a) injured party in refusing to proceed further and
suing for damages for breach of the entire
Article 1579. contract, or whether the breach is severable,
If the sale be rescinded, the animal shall be giving rise to a claim for compensation but not
returned in the condition in which it was sold to a right to treat the whole contract as broken.
and delivered, the vendee being answerable for (n)
any injury due to his negligence, and not arising
from the redhibitory fault or defect. (1498) Article 1584.
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Where goods are delivered to the buyer, which or ought to know of such breach, the seller shall
he has not previously examined, he is not not be liable therefor. (n)
deemed to have accepted them unless and until
he has had a reasonable opportunity of Article 1587.
examining them for the purpose of ascertaining Unless otherwise agreed, where goods are
whether they are in conformity with the delivered to the buyer, and he refuses to accept
contract if there is no stipulation to the them, having the right so to do, he is not bound
contrary. to return them to the seller, but it is sufficient
Unless otherwise agreed, when the seller if he notifies the seller that he refuses to accept
tenders delivery of goods to the buyer, he is them. If he voluntarily constitutes himself a
bound, on request, to afford the buyer a depositary thereof, he shall be liable as such.
reasonable opportunity of examining the goods (n)
for the purpose of ascertaining whether they
are in conformity with the contract. Article 1588.
Where goods are delivered to a carrier by the If there is no stipulation as specified in the first
seller, in accordance with an order from or paragraph of article 1523, when the buyer's
agreement with the buyer, upon the terms that refusal to accept the goods is without just
the goods shall not be delivered by the carrier cause, the title thereto passes to him from the
to the buyer until he has paid the price, moment they are placed at his disposal. (n)
whether such terms are indicated by marking
the goods with the words "collect on delivery," Article 1589.
or otherwise, the buyer is not entitled to The vendee shall owe interest for the period
examine the goods before the payment of the between the delivery of the thing and the
price, in the absence of agreement or usage of payment of the price, in the following three
trade permitting such examination. (n) cases:
(1) Should it have been so stipulated;
Article 1585. (2) Should the thing sold and delivered
The buyer is deemed to have accepted the produce fruits or income;
goods when he intimates to the seller that he (3) Should he be in default, from the time
has accepted them, or when the goods have of judicial or extrajudicial demand for
been delivered to him, and he does any act in the payment of the price. (1501a)
relation to them which is inconsistent with the
ownership of the seller, or when, after the Article 1590.
lapse of a reasonable time, he retains the goods Should the vendee be disturbed in the
without intimating to the seller that he has possession or ownership of the thing acquired,
rejected them. (n) or should he have reasonable grounds to fear
such disturbance, by a vindicatory action or a
Article 1586. foreclosure of mortgage, he may suspend the
In the absence of express or implied agreement payment of the price until the vendor has
of the parties, acceptance of the goods by the caused the disturbance or danger to cease,
buyer shall not discharge the seller from unless the latter gives security for the return of
liability in damages or other legal remedy for the price in a proper case, or it has been
breach of any promise or warranty in the stipulated that, notwithstanding any such
contract of sale. But, if, after acceptance of the contingency, the vendee shall be bound to make
goods, the buyer fails to give notice to the the payment. A mere act of trespass shall not
seller of the breach in any promise of warranty authorize the suspension of the payment of the
within a reasonable time after the buyer knows, price. (1502a)
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wrongfully neglects or refuses to pay for the

Article 1591. goods according to the terms of the contract of
Should the vendor have reasonable grounds to sale, the seller may maintain an action against
fear the loss of immovable property sold and its him for the price of the goods.
price, he may immediately sue for the rescission Where, under a contract of sale, the price is
of the sale. payable on a certain day, irrespective of
Should such ground not exist, the provisions of delivery or of transfer of title and the buyer
article 1191 shall be observed. (1503) wrongfully neglects or refuses to pay such price,
the seller may maintain an action for the price
Article 1592. although the ownership in the goods has not
In the sale of immovable property, even though passed. But it shall be a defense to such an
it may have been stipulated that upon failure to action that the seller at any time before the
pay the price at the time agreed upon the judgment in such action has manifested an
rescission of the contract shall of right take inability to perform the contract of sale on his
place, the vendee may pay, even after the part or an intention not to perform it.
expiration of the period, as long as no demand Although the ownership in the goods has not
for rescission of the contract has been made passed, if they cannot readily be resold for a
upon him either judicially or by a notarial act. reasonable price, and if the provisions of article
After the demand, the court may not grant him 1596, fourth paragraph, are not applicable, the
a new term. (1504a) seller may offer to deliver the goods to the
buyer, and, if the buyer refuses to receive
Article 1593. them, may notify the buyer that the goods are
With respect to movable property, the thereafter held by the seller as bailee for the
rescission of the sale shall of right take place in buyer. Thereafter the seller may treat the
the interest of the vendor, if the vendee, upon goods as the buyer's and may maintain an action
the expiration of the period fixed for the for the price. (n)
delivery of the thing, should not have appeared
to receive it, or, having appeared, he should not Article 1596.
have tendered the price at the same time, Where the buyer wrongfully neglects or refuses
unless a longer period has been stipulated for to accept and pay for the goods, the seller may
its payment. (1505) maintain an action against him for damages for
nonacceptance.
The measure of damages is the estimated loss
CHAPTER 6 directly and naturally resulting in the ordinary
Actions for Breach of Contract of Sale of course of events from the buyer's breach of
Goods contract.
Where there is an available market for the
Article 1594. goods in question, the measure of damages is,
Actions for breach of the contract of sale of in the absence of special circumstances showing
goods shall be governed particularly by the proximate damage of a different amount, the
provisions of this Chapter, and as to matters not difference between the contract price and the
specifically provided for herein, by other market or current price at the time or times
applicable provisions of this Title. (n) when the goods ought to have been accepted,
or, if no time was fixed for acceptance, then at
Article 1595. the time of the refusal to accept.
Where, under a contract of sale, the ownership If, while labor or expense of material amount is
of the goods has passed to the buyer and he necessary on the part of the seller to enable
20
LAW ON SALES
Atty. Abigail Co
him to fulfill his obligations under the contract already been received, return them or
of sale, the buyer repudiates the contract or offer to return them to the seller and
notifies the seller to proceed no further recover the price or any part thereof which
therewith, the buyer shall be liable to the seller has been paid.
for labor performed or expenses made before When the buyer has claimed and been
receiving notice of the buyer's repudiation or granted a remedy in anyone of these ways,
countermand. The profit the seller would have no other remedy can thereafter be
made if the contract or the sale had been fully granted, without prejudice to the
performed shall be considered in awarding the provisions of the second paragraph of
damages. (n) article 1191.
Where the goods have been delivered to
Article 1597. the buyer, he cannot rescind the sale if he
Where the goods have not been delivered to the knew of the breach of warranty when he
buyer, and the buyer has repudiated the accepted the goods without protest, or if
contract of sale, or has manifested his inability he fails to notify the seller within a
to perform his obligations thereunder, or has reasonable time of the election to rescind,
committed a breach thereof, the seller may or if he fails to return or to offer to return
totally rescind the contract of sale by giving the goods to the seller in substantially as
notice of his election so to do to the buyer. (n) good condition as they were in at the time
the ownership was transferred to the
Article 1598. buyer. But if deterioration or injury of the
Where the seller has broken a contract to goods is due to the breach or warranty,
deliver specific or ascertained goods, a court such deterioration or injury shall not
may, on the application of the buyer, direct prevent the buyer from returning or
that the contract shall be performed offering to return the goods to the seller
specifically, without giving the seller the option and rescinding the sale.
of retaining the goods on payment of damages. Where the buyer is entitled to rescind the
The judgment or decree may be unconditional, sale and elects to do so, he shall cease to
or upon such terms and conditions as to be liable for the price upon returning or
damages, payment of the price and otherwise, offering to return the goods. If the price or
as the court may deem just. (n) any part thereof has already been paid, the
seller shall be liable to repay so much
Article 1599. thereof as has been paid, concurrently
Where there is a breach of warranty by the with the return of the goods, or
seller, the buyer may, at his election: immediately after an offer to return the
(1) Accept or keep the goods and set up goods in exchange for repayment of the
against the seller, the breach of warranty price.
by way of recoupment in diminution or Where the buyer is entitled to rescind the
extinction of the price; sale and elects to do so, if the seller
(2) Accept or keep the goods and maintain an refuses to accept an offer of the buyer to
action against the seller for damages for return the goods, the buyer shall
the breach of warranty; thereafter be deemed to hold the goods as
(3) Refuse to accept the goods, and maintain bailee for the seller, but subject to a lien
an action against the seller for damages for to secure the payment of any portion of
the breach of warranty; the price which has been paid, and with
(4) Rescind the contract of sale and refuse to the remedies for the enforcement of such
receive the goods or if the goods have
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LAW ON SALES
Atty. Abigail Co
lien allowed to an unpaid seller by article parties is that the transaction shall
1526. secure the payment of a debt or the
(5) In the case of breach of warranty of performance of any other obligation.
quality, such loss, in the absence of special In any of the foregoing cases, any money, fruits,
circumstances showing proximate damage or other benefit to be received by the vendee as
of a greater amount, is the difference rent or otherwise shall be considered as interest
between the value of the goods at the time which shall be subject to the usury laws.
of delivery to the buyer and the value they
would have had if they had answered to Article 1603.
the warranty. (n) In case of doubt, a contract purporting to be a
sale with right to repurchase shall be construed
as an equitable mortgage. (n)
CHAPTER 7
Extinguishment of Sale Article 1604.
Article 1600. The provisions of article 1602 shall also apply to
Sales are extinguished by the same causes as all a contract purporting to be an absolute sale. (n)
other obligations, by those stated in the
preceding articles of this Title, and by Article 1605.
conventional or legal redemption. In the cases referred to in articles 1602 and
1604, the apparent vendor may ask for the
reformation of the instrument. (n)
SECTION 1 Article 1606.

Conventional Redemption The right referred to in article 1601, in the
Article 1601. absence of an express agreement, shall last four
Conventional redemption shall take place when years from the date of the contract.
the vendor reserves the right to repurchase the Should there be an agreement, the period
thing sold, with the obligation to comply with cannot exceed ten years.
the provisions of article 1616 and other However, the vendor may still exercise the right
stipulations which may have been agreed upon. to repurchase within thirty days from the time
(1507) ARTICLE 1602. The contract shall be final judgment was rendered in a civil action on
presumed to be an equitable mortgage, in any the basis that the contract was a true sale with
of the following cases: right to repurchase. (1508a)
1. When the price of a sale with right to
repurchase is unusually inadequate; Article 1607.
2. When the vendor remains in possession as In case of real property, the consolidation of
lessee or otherwise; ownership in the vendee by virtue of the failure
3. When upon or after the expiration of the of the vendor to comply with the provisions of
right to repurchase another instrument article 1616 shall not be recorded in the
extending the period of redemption or Registry of Property without a judicial order,
granting a new period is executed; after the vendor has been duly heard. (n)
4. When the purchaser retains for himself a
part of the purchase price; Article 1608.
5. When the vendor binds himself to pay the The vendor may bring his action against every
taxes on the thing sold; possessor whose right is derived from the
6. In any other case where it may be fairly vendee, even if in the second contract no
inferred that the real intention of the mention should have been made of the right to
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LAW ON SALES
Atty. Abigail Co
repurchase, without prejudice to the provisions and the vendee cannot compel him to redeem
of the Mortgage Law and the Land Registration the whole property. (1516)
Law with respect to third persons. (1510)
Article 1615.
Article 1609. If the vendee should leave several heirs, the
The vendee is subrogated to the vendor's rights action for redemption cannot be brought against
and actions. (1511) each of them except for his own share, whether
the thing be undivided, or it has been
Article 1610. partitioned among them.
The creditors of the vendor cannot make use of But if the inheritance has been divided, and the
the right of redemption against the vendee, thing sold has been awarded to one of the heirs,
until after they have exhausted the property of the action for redemption may be instituted
the vendor. (1512) against him for the whole. (1517)

In a sale with a right to repurchase, the vendee The vendor cannot avail himself of the right of
of a part of an undivided immovable who repurchase without returning to the vendee the
acquires the whole thereof in the case of article price of the sale, and in addition:
498, may compel the vendor to redeem the (1) The expenses of the contract, and any
whole property, if the latter wishes to make use other legitimate payments made by
of the right of redemption. (1513) reason of the sale;
(2) The necessary and useful expenses
Article 1612. made on the thing sold. (1518)
If several persons, jointly and in the same
contract, should sell an undivided immovable Article 1617.
with a right of repurchase, none of them may If at the time of the execution of the sale there
exercise this right for more than his respective should be on the land, visible or growing fruits,
share. there shall be no reimbursement for or
The same rule shall apply if the person who sold prorating of those existing at the time of
an immovable alone has left several heirs, in redemption, if no indemnity was paid by the
which case each of the latter may only redeem purchaser when the sale was executed.
the part which he may have acquired. (1514) Should there have been no fruits at the time of
the sale and some exist at the time of
Article 1613. redemption, they shall be prorated between the
In the case of the preceding article, the vendee redemptioner and the vendee, giving the latter
may demand of all the vendors or co-heirs that the part corresponding to the time he possessed
they come to an agreement upon the the land in the last year, counted from the
repurchase of the whole thing sold; and should anniversary of the date of the sale. (1519a)
they fail to do so, the vendee cannot be
compelled to consent to a partial redemption. Article 1618.
(1515) The vendor who recovers the thing sold shall
receive it free from all charges or mortgages
Article 1614. constituted by the vendee, but he shall respect
Each one of the co-owners of an undivided the leases which the latter may have executed
immovable who may have sold his share in good faith, and in accordance with the
separately, may independently exercise the custom of the place where the land is situated.
right of repurchase as regards his own share, (1520)
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LAW ON SALES
Atty. Abigail Co
re-sold, the owner of any adjoining land has a

right of pre-emption at a reasonable price.
SECTION 2 If the re-sale has been perfected, the owner of
Legal Redemption the adjoining land shall have a right of
redemption, also at a reasonable price.
Article 1619. When two or more owners of adjoining lands
Legal redemption is the right to be subrogated, wish to exercise the right of pre-emption or
upon the same terms and conditions stipulated redemption, the owner whose intended use of
in the contract, in the place of one who the land in question appears best justified shall
acquires a thing by purchase or dation in be preferred. (n)
payment, or by any other transaction whereby
ownership is transmitted by onerous title. Article 1623.
(1521a) The right of legal pre-emption or redemption
shall not be exercised except within thirty days
Article 1620. from the notice in writing by the prospective
A co-owner of a thing may exercise the right of vendor, or by the vendor, as the case may be.
redemption in case the shares of all the other The deed of sale shall not be recorded in the
co-owners or of any of them, are sold to a third Registry of Property, unless accompanied by an
person. If the price of the alienation is grossly affidavit of the vendor that he has given written
excessive, the redemptioner shall pay only a notice thereof to all possible redemptioners.
reasonable one. The right of redemption of co-owners excludes
Should two or more co-owners desire to exercise that of adjoining owners. (1524a)
the right of redemption, they may only do so in
proportion to the share they may respectively
have in the thing owned in common. (1522a) CHAPTER 8
Assignment of Credits and Other Incorporeal
Article 1621. Rights
The owners of adjoining lands shall also have
the right of redemption when a piece of rural Article 1624.
land, the area of which does not exceed one An assignment of creditors and other
hectare, is alienated, unless the grantee does incorporeal rights shall be perfected in
not own any rural land. accordance with the provisions of article 1475.
This right is not applicable to adjacent lands (n)
which are separated by brooks, drains, ravines,
roads and other apparent servitudes for the Article 1625.
benefit of other estates. An assignment of a credit, right or action shall
If two or more adjoining owners desire to produce no effect as against third persons,
exercise the right of redemption at the same unless it appears in a public instrument, or the
time, the owner of the adjoining land of smaller instrument is recorded in the Registry of
area shall be preferred; and should both lands Property in case the assignment involves real
have the same area, the one who first property. (1526)
requested the redemption. (1523a) ARTICLE
1622. Whenever a piece of urban land which is Article 1626.
so small and so situated that a major portion The debtor who, before having knowledge of
thereof cannot be used for any practical the assignment, pays his creditor shall be
purpose within a reasonable time, having been released from the obligation. (1527)
bought merely for speculation, is about to be
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LAW ON SALES
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The assignment of a credit includes all the Should the vendor have profited by some of the
accessory rights, such as a guaranty, mortgage, fruits or received anything from the inheritance
pledge or preference. (1528) sold, he shall pay the vendee thereof, if the
contrary has not been stipulated. (1533)
Article 1628.
The vendor in good faith shall be responsible for Article 1633.
the existence and legality of the credit at the The vendee shall, on his part, reimburse the
time of the sale, unless it should have been sold vendor for all that the latter may have paid for
as doubtful; but not for the solvency of the the debts of and charges on the estate and
debtor, unless it has been so expressly satisfy the credits he may have against the
stipulated or unless the insolvency was prior to same, unless there is an agreement to the
the sale and of common knowledge. contrary. (1534) ARTICLE 1634. When a credit or
Even in these cases he shall only be liable for other incorporeal right in litigation is sold, the
the price received and for the expenses debtor shall have a right to extinguish it by
specified in No. 1 of article 1616. reimbursing the assignee for the price the latter
The vendor in bad faith shall always be paid therefor, the judicial costs incurred by
answerable for the payment of all expenses, him, and the interest on the price from the day
and for damages. (1529) on which the same was paid.
A credit or other incorporeal right shall be
Article 1629. considered in litigation from the time the
In case the assignor in good faith should have complaint concerning the same is answered.
made himself responsible for the solvency of the The debtor may exercise his right within thirty
debtor, and the contracting parties should not days from the date the assignee demands
have agreed upon the duration of the liability, it payment from him. (1535)
shall last for one year only, from the time of the
assignment if the period had already expired. Article 1635.
If the credit should be payable within a term or From the provisions of the preceding article
period which has not yet expired, the liability shall be excepted the assignments or sales
shall cease one year after the maturity. (1530a) made:
(1) To a co-heir or co-owner of the right
Article 1630. assigned;
One who sells an inheritance without (2) To a creditor in payment of his credit;
enumerating the things of which it is composed, (3) To the possessor of a tenement or
shall only be answerable for his character as an piece of land which is subject to the right
heir. (1531) in litigation assigned. (1536)
Article 1631.
One who sells for a lump sum the whole of CHAPTER 9
certain rights, rents, or products, shall comply General Provisions
by answering for the legitimacy of the whole in Article 1636.
general; but he shall not be obliged to warrant In the preceding articles in this Title governing
each of the various parts of which it may be the sale of goods, unless the context or subject
composed, except in the case of eviction from matter otherwise requires:
the whole or the part of greater value. (1532a) (1) "Document of title to goods" includes
any bill of lading, dock warrant,
"quedan," or warehouse receipt or
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LAW ON SALES
Atty. Abigail Co
order for the delivery of goods, or any Land Registration Law with regard to immovable
other document used in the ordinary property. (1537a)
course of business in the sale or
transfer of goods, as proof of the
possession or control of the goods, or
authorizing or purporting to authorize
the possessor of the document to
transfer or receive, either by
indorsement or by delivery, goods
represented by such document.
(1) "Goods" includes all chattels
personal but not things in
action or money of legal tender
in the Philippines. The term
includes growing fruits or
crops.
(2) "Order" relating to documents
of title means an order by
indorsement on the documents.
(3) "Quality of goods" includes their
state or condition.
(4) "Specific goods" means goods
identified and agreed upon at
the time a contract of sale is
made.
(5) An antecedent or pre-existing
claim, whether for money or
not, constitutes "value" where
goods or documents of title are
taken either in satisfaction
thereof or as security therefor.
(2) A person is insolvent within the
meaning of this Title who either has
ceased to pay his debts in the
ordinary course of business or cannot
pay his debts as they become due,
whether insolvency proceedings have
been commenced or not.
(3) Goods are in a "deliverable state"
within the meaning of this Title when
they are in such a state that the buyer
would, under the contract, be bound
to take delivery of them. (n)
Article 1637.
The provisions of this Title are subject to the
rules laid down by the Mortgage Law and the
26

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LAW ON SALES

TITLE VI after the perfection of the contract of sale, in

Article 1461. Article 1465.

hand at the time or not, is a contract of sale,

whose jurisdiction or territory they in which the ownership will pass, if

the contracting parties, if the thing sold cannot Article 1503.

If indorsed to a specified person, it may be

the document unless a contrary intention

The seller is bound to exercise reasonable care

completed after the transfer, the vendor shall

Article 1563. Article 1569.

manner be applicable to the sale of other

Article 1575. Article 1581.

Article 1576. Article 1582. T

wrongfully neglects or refuses to pay for the

SECTION 1 Article 1606.

Article 1611. Article 1616.

re-sold, the owner of any adjoining land has a

Article 1627. Article 1632.

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