ARELLANO UNIVERSITY SCHOOL OF LAW S.Y. 2022 – 2023 THE LAW ON SALES By: Atty. Wayne A. Tugadi, LLM Outline: Nature and Form of the Contract I. Definition and Elements of a Contract of Sale Cases: 1. 2. 3. 4. 5. 6. 7. 8. II. Spouses Firme vs. Bukal Enterprises, G.R. No. 146608, October 23, 2003 Yason vs. Arciaga, G.R. No. 145017, January 28, 2005 Sps. Ramos vs. Spouses Heruela, G.R. No. 145330, October 14, 2005 Sps. Cruz vs. Sps. Fernando, G.R. No. 145470, December 9, 2005 Cabrera vs. Isaac, G.R. No. 166790, November 19, 2014 Ursal vs. Court of Appeals, G.R. No. 142411, October 14, 2005 Ace Foods vs. Micro Pacific, G.R. No. 200602, December 11, 2013 Ventura vs. Endaya, G.R. No. 190016, October 2, 2013 Object of sale Cases: 1. Cavite Development Bank vs. Lim, G.R. No. 131679, February 1, 2000 2. Heirs of San Miguel vs. Court of Appeals, G.R. No. 136054, September 5, 2001 3. PNB vs. Court of Appeals, G.R. No. 118357, May 6, 1997 4. Heirs of Juan San Andres vs. Vicente Rodriguez, G.R. No. 135634, May 31, 2000 5. Naranja vs. Court of Appeals, G.R. No. 160132, April 17, 2009 6. Samson vs. Court of Appeals, G.R. No. 108245, November 25, 1994 7. Javier vs. Court of Appeals, G.R. No. 48194, March 15, 1990 8. Vda. De Rigonan vs. Derecho, G.R. No. 159571, July 15, 2005 III. Price or consideration of the contract of sale Cases: 1. Spouses Buenaventura vs. Court of Appeals, G.R. No. 126376, November 20, 2003 2. Boston Bank vs. Manalo, G.R. No. 158149, February 9, 2006 3. Serra vs. Court of Appeals, G.R. No. 103338, January 4, 1994 4. Abapo vs. Court of Appeals, G.R. No. 128677, March 2, 2000 5. Bravo-Guerrero vs. Bravo, G.R. No. 152658, July 29, 2005 6. Ramos vs. Heirs of Ramos, G.R. No. 14048, April 25, 2002 7. Heirs of Pangan vs. Spouses Perreras, G.R. No. 157374, August 27, 2009 IV. Perfection and Form of a contract of sale Cases: 1. Toyota Shaw vs. Court of Appeals, G.R. No. 116650, May 23, 1995 2. Estate of Gonzales vs. Heirs of Perez, G.R. No. 169681, November 5, 2009 3. 4. V. Orduña vs. Fuentebella, G.R. No. 176841, June 29, 2010 First Optima vs. Securitron, G.R. No. 199648, January 28, 2015 Contract of sale differentiated with: - agency to sell contract for a piece of work barter or exchange Cases: 1. Rosa Lim vs. Court of Appeals, G.R. No. 102784, February 28, 1996 2. Lourdes Lim vs. People, G.R. No. L-34338, November 21, 1984 3. Commissioner of Internal Revenue vs. Constantino, G.R. No. L-25926, February 27, 1970 4. Engineering and Machinery Corp. vs. Court of Appeals, G.R. No. 52267, January 24, 1996 5. Del Monte vs. Aragones, G.R. No. 153033, June 23, 2005 6. Tan Queto vs. Court of Appeals, G.R. No. L-35648, May 16, 1983 7. Tan Queto vs. Court of Appeals, G.R. No. L-35648, February 27, 1987 (Resolution on Motion for Reconsideration) VI. Delivery; the operative act which transfers ownership Cases: 1. San Lorenzo vs. Court of Appeals, G.R. No. 124242, January 21, 2005 2. Ten Forty Realty vs. Cruz, 410 SCRA 484 (G.R. No. 151212, Sep. 10, 2003) VII. Options and Right of First Refusal Cases: 1. Vasquez vs. Ayala Corporation, G.R. No. 149734, November 19, 2004 2. Ang Yu Asuncion vs. Court of Appeals, G.R. No. 109125, December 2, 1994 3. Equitorial Realty vs. Mayfair Theater, G.R. No. 106063, November 21, 1996 4. Rosencor vs. Inquing, G.R. No. 140479, March 8, 2001 5. Tanay Recreation Center vs. Fausto, G.R. No. 140182, April 12, 2005 VIII. Sale by description and sale by sample Case: Mendoza vs. David, G.R. No. 147575, October 22, 2004 IX. Sale of personal property in instalments Cases: 1. Magna Financial Services vs. Colarina, G.R. No. 158635, December 9, 2005 2. Rillo vs. Court of Appeals, G.R. No. 125347, June 19, 1997 3. Spouses dela Cruz vs. Asian Consumer, G.R. No. 94828, September 18, 1992 4. Southern Motors vs. Moscoso, L-14475, May 30, 1961 X. Sale of real estate on installment (RA 6552) Cases: 1. 2. 3. 4. Spouses Ramos vs. Spouses Heruela, supra. Olympia Housing vs. Panasiatic, G.R. No. 140468, January 16, 2003 Layug vs. Intermediate Appellate Court, 167 SCRA 627 (1988) Spouses Sebastian vs. BPI Family Bank, G.R. No. 160107, October 22, 2014 XI. Capacity to Buy or Sell 1. 2. Capacity and incapacity to enter into a contract of sale Relative incapacity of husband and wife to sell property to each other Case: Calimlim-Canullas vs. Fortun, 129 SCRA 675 (1984) Prohibition with respect to guardians Prohibition with respect to agents Case: Distajo vs. Court of Appeals, G.R. No. 112954, August 25, 2000 Prohibition with respect to executors and administrators Prohibition with respect to public officials and employees Case: Maharlika Publishing vs. Tagle, 142 SCRA 553 (1986) Prohibition with respect to judges, etc., and lawyers 3. 4. 5. 6. 7. Cases: 1. 2. 8. Fabillo vs. IAC, G.R. No. 68838, March 11, 1991 In re: Atty. Melchor Ruste, 70 Phil 243 (1940) Other persons especially disqualified XII. Effects of the Contract When the Thing Sold Has Been Lost Art. 1480, in rel. to Arts. 1163-1165, 1262, Civil Code (Obligations of seller before delivery) ➢ Art. 1493, Civil Code (Loss at the time of perfection) ➢ Art. 1504, Civil Code (Who bears the risk of loss) Cases: 1. Norkis Distributors vs. Court of Appeals, G.R. No. 91029, February 7, 1991 2. Gausano Cagayan vs. Insurance Co. of North America, G.R. No. 147839, June 8, 2006 XIII. Obligations of the Vendor 1. Principal obligations of the vendor Cases: 1. Zaide vs. Court of Appeals, L-46715-16, July 29, 1988 2. Chua vs. Court of Appeals, G.R. No. 119255, April 9, 2003 3. Goods delivered “on sale or return” 4. Goods delivered “on approval or on trial” 5. Seller’s reservation of possession or ownership 6. Sale by a person not the owner Cases: 1. Alfredo vs. Borras, 404 SCRA 145 (2003) 2. Liu vs. Loy, 405 SCRA 316 (2003) 3. Nool vs. Court of Appeals, G.R. No. 116635, July 24, 1997 XIV. Rights of Unpaid Seller Sale of Real Property by Unit Measure or by Lump Sum, Double Sales 1. The Unpaid Seller o Special Remedies of an unpaid seller (Art. 1526) o When the possessory lien may be exercised (Art. 1527) o The possessory lien is lost (Art. 1528) o Requisites for the exercise of the right of stoppage in transitu o When goods are in transit and when they are no longer in transit o When the right of resale may be exercised (Art. 1533) o When the right of rescission may be exercised (Art. 1534) 2. Sale of real property by unit of measure or number 3. Sale of real property for a lump sum or an estimate Case: Lietz vs. Court of Appeals, G.R. No. 122463, December 19, 2005 4. Double Sales Cases: 1. Gabriel vs. Mabanta, 399 SCRA 573 (G.R. No. 142403, March 26, 2003) 2. Ten Forty Realty vs. Cruz, 410 SCRA 484 (G.R. No. 151212, Sep. 10, 2003) 3. Uraca vs. Court of Appeals, 278 SCRA 702 (G.R. No. 115158, Sep. 5, 1997) 4. Radiowealth Finance vs. Palileo, G.R. No. 83432, May 20, 1991 5. Spouses Roque vs. Aguada, G.R. No. 193787, April 7, 2014 XV. Conditions and Warranties 1. Conditions Case: Lim vs. Court of Appeals, G.R. No. 118347, October 24, 1996. 2. In case of non-performance of a condition Case: Romero vs. Court of Appeals, G.R. No. 107207, November 23, 1995 3. Warranty Case: Goodyear vs. Sy, G.R. No. 154554, November 9, 2005 4. Express warranty 4.1. Affirmations and exaggerations of the seller Cases: 1. Trinidad vs. Intermediate Appellate Court, G.R. No. 65922, December 3, 1991 2. Philippine Steel vs. Quinones, G.R. No. 194533, April 19, 2017 5. Implied warranty 6. What is an “as is, where is” sale? Case: NDC vs. Madrigal, G.R. No. 148332, September 30, 2003 7. Sale of second hand articles Case: Moles vs. Intermediate Appellate Court, 169 SCRA 777 (1989). 8. Sale by virtue of authority in fact or law 9. Consumer Act of the Philippines (Republic Act 7394), Title III, Chapter III 10. Philippine Lemon Law (Republic Act 10642) XVI. Implied Warranties, Obligations of the Vendee and Extinguishment of Sale 1. 2. 3. Warranty against Eviction Cases: 1. Escaler vs. Court of Appeals, 138 SCRA 1 (1985) 2. J.M. Tuason & Co. vs. Court of Appeals, 94 SCRA 413 (1979) Warranty against Hidden Defects Cases: 1. Nutrimix vs. Court of Appeals, G.R. No. 152219, October 25, 2004 2. De Ysasi vs. Arceo, G.R. No. 136586, November 22, 2001. Warranty of Fitness and Merchantability Case: Beltran vs. PAIC Finance Corporation, 209 SCRA 105 (1992) 3. Remedies of Buyer to Enforce Warranty against Hidden Defects and as to Quality 4. Principal Obligations of the Vendee 5. Buyer’s Right of Examination Case: Grageda vs. Intermediate Appellate Court, 155 SCRA 95 (1987) 6. Right of Buyer to Suspend Payment of Price Case: Adelfa Properties vs. Court of Appeals, G.R. No. 111238, January 25, 1995 7. Extinguishment of Sale 8. Conventional Redemption Case: Diamante vs. Court of Appeals, 206 SCRA 52 (1992) 8.1 Equitable Mortgage Cases: 1. Vda. De Caruzo vs. Court of Appeals, 174 SCRA 330 (1989) 2. Vda. De Zulueta vs. Octaviano, 121 SCRA 314 (1983) 3. Banga vs. Bello, G.R. No. 156705, September 30, 2005 17. Legal Redemption Cases: 1. 2. 3. Uy vs. Court of Appeals, G.R. No. 107439, July 20, 1995 Si vs. Court of Appeals, G.R. No. 122047, October 12, 2000 Fabia vs. Intermediate Appellate Court, G.R. No. 66101, November 21, 1984