Sales and Lease UCC 2B Final

SALES AND LEASE
Course Outline (Part 1)

UCC 1st Semester
Course Description : Sales basically is covered by Book IV, Title VII of the Civil Code
of the Philippines. It deals with the basic principles, rights and obligations of the
parties to a contract of sale; remedies in case of breach and the modes of
extinguishment of this contract.
Art 1458 to 1603
Course Objectives:
1. Understand the basic principles applicable to contracts of sale and contract of
lease.
2. Identify the rights and obligations of parties to a contract of sale and lease.
3. Appreciate and apply these fundamental principles to actual business
transactions.
4. Encourage diligence and the observance of honesty and fair dealings at all time.
5. Develop self - confidence and positive outlook in dealing with pressure and
stressful situations.
6. Learn tips and techniques in answering law school questions and the BAR.
Grades:
1. Midterm 30
2. Finals 30
3. Quizzes and Recitation 30
4. Attendance 10
CONTRACT OF SALE
CONCEPTS AND GENERAL PRINCIPLES
Definition of Sale
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.
Characteristics of Sale
A. Characteristics (consensual, bilateral, onerous, commutative, nominate,
principal)
1. Consensual (Art. 1475)

2. Bilateral (Art. 1458)
3. Onerous (Art. 1350)
4. Commutative (Art. 2010)
5. Principal
6. Nominate (Art. 1458)
CASES:
1) EQUATORIAL REALTY DEVT vs Mayfair Theater, 370 scra 56 (2001)
2) San Lorenzo Devt Corp vs CA, 449 scra 99, 114 (2005)
3) VDA. DE APE vs CA, 456 SCRA 193, April 15, 2005
4) Torcuator vs Bernabe, 459 SCRA 439, June 8, 2005
5) Ang Yu Asuncion vs CA, 238 SCRA 602, December 2, 1994
6) Gaite vs Fonacier, 2 SCRA 830, July 31, 1961
Sale distinguished with other Contracts
a) Barter or Exchange ( NCC Arts 1954, 1683 to 1468)
b) Donation
c) Contract of Piece of Work (Massachusetts Rule) (NCC 1467)
d) Agency to Sell (NCC 1466)
e) Contract of Lease with Option to Buy
f) Dacion en Pago (1245)
Stages:
A. Negotiation or Preparation
i. Takes when parties signify their intention to buy or sell
ii. There is no agreement yet
iii. A failure of negotiation does not give any a right of action against
the other
iv. If there is abuse of right – may file damages under art 19, 20
and 21 of the CC
B. Perfection (1315, 1475)

i. The contract is perfected when there is meeting of minds over the
object and the price
ii. Meeting of the minds takes place when there is a concurrence.
C. Performance (1191, 1403(2)) or Consummation
Cases:
7. Ainza vs Padua, 462 SCRA 614
8. Firme vs Bukal Enterprises and Dev Corp. 414 SCRA 190 (2003)
9. Manila Container Corp. vs PNB 511 SCRA 444 (2006)
10. San Miguel Properties Philippines vs Huang 336 scra 743 (2000)
11. Fule vs Court of Appeals 286 scra 698 (1998)
12. Toyota Shaw, Inc vs CA Gr No. L-116650, May 23, 1995
13. Sps. Edrada vs Sps Ramos, Gr No. 154413, August 31, 2005
14. Biñ an Steel Corp vs CA 391 SCRA 90 (2002)
15. National Housing Authority vs Grace Baptist Church 424 scra 147 (2004)
16. Almocera vs Ong, 546 scra 164 (2008)
17. Almira vs CA, 399 scra 351 (2003)
18. Carrascoso Jr. vs Court of Appeals 477 scra 666, 686 (2005)
19. Manongsong vs Estimo, 404 scra 683 (2003)
20. Polytechnic University of the Philippines vs CA, 368 scra 691 (2001)
21. Llyod’s Enterprises and Credit Corp. vs Dolleton 555 SCRA 143
22. Sanchez vs Rigos, GR No. L- 25494, June 14, 1972
23. Riviera Filipina, Inc. vs CA et al., GR No. 117355, April 5, 2002
2|Page
24. Parañ aque Kings Enterprises Inc vs CA Gr No. 111538, February 26, 1997
- End of Meeting -
A. Consent
Formation/ Perfection of Contract of Sale (NCC 1475)
1. Option Contract (NCC 1479)
2. Mutual Promise to buy and sell (NCC 1479)
3. Status of Advertisement (NCC 1325 – 26)
4. Acceptance by letter or telegram (NCC 1319)
5. Perfection of sale by Auction (NCC 1476)
6. Earnest Money (NCC 1458)
7. Form of Sales (NCC 1483, 1874, 1581, 1403)
8. Right to Refusal
B. Object
Object of SALE (NCC 1306)
1. Subject Matter must be Licit (NCC 1459)
2. Subject Matter must be Determinate (NCC 1460)
3. Sale of Things having Potential Existence (NCC 1461)
4. Sale of Hope or Expectancy (NCC 1461)
5. Emptio Rei Speratae
6. Emptio Spei
7. Sale of Existing and Future Goods (NCC 1462)
8. Sale of Undivided Interest (NCC 1463)
9. Sale of Things subject of a resolutory condition (NCC 1465)
Cases:
25. Ereñ eta vs Bezore 54 scra 13 (1973)
26. Buenaventura vs CA, 416 scra 263 (2003)
C. Cause - Prestation
PRICE
1. Certainty of Price (NCC 1469)
2. Who may determine price (NCC 1473-74)
3. Effect of gross inadequacy of price (NCC 1470)
4. Effect where price is simulated (NCC 1470)
5. Certainty of Price of securities, grains, liquids, etc. (NCC 1472)
6. Effect of Failure to determine price (Art 1474)
7. Meeting of minds as to price
Case:
DASMARIÑ AS T. ARCAINA and MAGANI T. BANTA vs. NOEMI L. INGRAM
represented by MA. NENETTE L. ARCHINUE G.R. No. 196444, February 15,
2017
DILIGENCE
a. Sellers diligence over the thing prior to delivery
3|Page
b. Buyers right to the fruits
i. Natural
ii. Civil
iii. Industrial
c. Effect of loss of the thing
i. Prior to delivery
ii. After delivery
1. Exceptions
- End of Meeting -
Obligations of the Vendor
a. To pay the price
b. Accept delivery
i. Actual
ii. Constructive or legal
1. Real property – public instrument
iii. Any other manner
c. Interest- if stipulated in writing
GROUNDS FOR SUSPENSION OF PAYMENT
a. If the buyer is disturbed in the possession or ownership of the thing
acquired; or
b. If he has reasonable ground to fear such disturbance by a vindicatory
action of a foreclosure of mortgage – must be attributed to the acts of
the seller
*Double Sale
a. There is no double sale when one contract is a sale while the other is a
mere promise to sell or a contract to sell (San Lorenzo development vs. CA)
b. While one deed of sale was registered ahead of the other will not apply
here where said deed is found to be a forgery (carmelit fudot vs cattleya land GR.
171008, Sept 13, 2007)
c. Does not apply if the property is not registered under the torrens system
(sps. Abrigo vs. de vera)
Case:
SPRING HOMES SUBDIVISION CO., INC., SPOUSES PEDRO L. LUMBRES and
REBECCA T. ROARING vs. SPOUSES PEDRO TABLADA, JR. and ZENAIDA
TABLADA
G.R. No. 200009, January 23, 2017
Remedies
a. Action for Specific Performance
b. Recission
i. In sale of real property
1. Absolute sale – 1191 and 1592
4|Page
a. Right of preemption
b. Right of extension
2. Sale on Installment/Contract to Sell – RA 6552 (MacedaLaw)
ii. In sale of personal property – Art. 1593 - refund

1. The vendee, upon the expiration of the period fixed for the
delivery of the thing purchase, refused to receive it without justifiable cause;
or
2. Failed to pay the price, unless granted a longer period within which
to pay
3. Note: in case of Sale of Personal Property on Installment –
apply 1484 (Recto Law)
c. Action for damages (Art 1596, 1599, CC)
- End of Meeting -
WARRANTIES
a)Express
b) Implied
i. Implied warrantied in Sales
1. Against eviction
2. Against hidden defects
3. Fitness or merchantability
Cases:
PHILIPPINE STEEL COATING CORP. vs. EDUARD QUINONES G.R. No. 194533, April
19, 2017
PILIPINAS MAKRO, INC. vs. COCO CHARCOAL PHILIPPINES, INC. and LIM KIM SAN
G.R. No. 196419, October 4, 2017
LEASE (2 Meetings)
Definition: Art 1643
(Reyes vs.Court of Appeals, G.R. No. 127608, September 30, 1999)
(Tatad vs. Garcia, Jr., G.R. No. 114222, April 6, 1995)
(Jovellanos vs. Court of Appeals, G.R. No. 100728, June 18, 1992)
(Roxas vs. Court of Appeals, G.R. No. 92245, June 26, 1991)
(Bugatti vs. Court of Appeals, G.R. No. 138113, October 17, 2000)
Lease of Work or Services

Definition 1644
Distinction between a Contract of Agency
(Nielson & Co. vs. Lepanto Consolidated Mining, L-21601, December 28, 1968)
Lease of Rural and Urban Lands
5|Page
General Considerations:
1. The persons who are disqualified to buy and sell under Articles 1490 and
1491 of the Civil Code are also disqualified to lease the property or things
mentioned therein (Art. 1646, Civil Code)
2. Lease of real property, to be binding on third persons, should be recorded

in the Registry of
Property (Art. 1648, Civil Code)
3. The lessee may sub-lease the property when there is no prohibition. (Art.
1650, Civil Code) But the lessee cannot assign the lease without the consent
of the lessor, unless there is a stipulation to the contrary. (Art. 1649, Civil
Code)
4. The warranty against hidden defects in sales is also applicable in lease.
(Art. 1653, Civil Code)
Rights and Obligations of Lessor and Lessee; Special Provisions for Lease of
Rural and Urban
Lands
Obligations of the Lessor:

1. Duty to maintain the lessee (Goldstein vs. Roces, 34 Phil. 562 [1916])
2. Remedy if tenants where lessor refuses to make an urgent repair of the
leased premises (Banzon vs. Ubay, 94 SCRA 454 [1979])
3. Lessor is not obliged to answer act of trespass which a third party may
cause on the use of the thing leased; (Article 1664)
Obligations of the Lessee
1. To pay rent;
2. To use thing leased as a diligent father of a family, devoting it to the use
stipulated;
3. To pay expenses for the deed of lease;
4. To notify the lessor of usurpation or untoward acts;
5. To notify the lessor of need for repairs;
6. To return the property leased upon termination of the lease.
Grounds for Suspension of Payment of Rent (Art. 1658, Civil Code):

1. In case the lessor fails to make the necessary repairs; or
2. When the lessor fails to maintain the lessee in peaceful and adequate enjoyment
of the property leased.
Grounds for Rescission:
1. If the lessor or lessee should not comply with his or her obligations (Art. 1659,
Civil Code);
2. If a dwelling place or any other building intended for human habitation is in such
a condition that its use brings imminent and serious danger to life or health (Art.
1660, Civil Code);
3. When the repair works shall render the portion which the lessee and his family
6|Page
need for their dwelling uninhabitable and the main purpose of the lease is to
provide a dwelling place for the lessee (Art. 1662, Civil Code)
Grounds for Ejectment:
A. Under Art. 1673, Civil Code:

1. When the period agreed upon, or that which is fixed for the duration of leases
under Art. 1682 and 1687, has expired;
2. Lack of payment of the price stipulated;
3. Violation of any of the conditions agreed upon in the contract;
4. When the lessee devotes the thing leased to any use or service not stipulated
which causes the deterioration thereof; or if he does not observe the requirement in
No. 2 of Art. 1657, as regards the use thereof.
B. Under R.A. No. 9653 (Rent Control Act of 2009):

1-5
Extrajudicial Repossession of the Premises
A stipulation in the written contract of lease which authorizes repossession of the
premises without court action is valid. It "is in the nature of a resolutory condition,
for upon the exercise by the lessor of his right to take possession of the leased
property, the contract is deemed terminated;" and that such a contractual provision
"is not illegal, there being nothing in the law prescribing such kind of agreement.
(Viray vs.Intermediate Appellate Court, G.R. No. 81015, July 4, 1991);
(Irao vs. By the Bay, Inc., G.R. No. 177120, July 14, 2008)
Improvements on Leased Premises:

Applicable law: Art. 1678, Civil Code
Tacita Reconduccion or Implied New Lease:
Applicable law: Art. 1670, Civil Code
Cases:
(Ledesma vs. Pictain, L-597, August 29, 1947)
(Dizon vs. Magsaysay, 57 SCRA 250 [1974])
*The period of the renewed lease shall be that time established in Arts. 1682
and 1687 of the Civil Code
Renewal of lease and Increase of Rentals
LL and Company vs. Huang Chao Chun, G.R. No. 142378, March 7, 2002)
7|Page

Sales and Lease UCC 2B Final

Uploaded by

Copyright:

Available Formats

Sales and Lease UCC 2B Final

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sales and Lease UCC 2B Final

Uploaded by

Copyright:

Available Formats

SALES AND LEASE

Course Outline (Part 1)

1. Consensual (Art. 1475)

B. Perfection (1315, 1475)

C. Performance (1191, 1403(2)) or Consummation

ii. In sale of personal property – Art. 1593 - refund

Lease of Work or Services

2. Lease of real property, to be binding on third persons, should be recorded

Obligations of the Lessor:

Grounds for Suspension of Payment of Rent (Art. 1658, Civil Code):

A. Under Art. 1673, Civil Code:

B. Under R.A. No. 9653 (Rent Control Act of 2009):

Improvements on Leased Premises:

You might also like