CHAPTER 2: CAPACITY TO BUY OR SELL
ART. 1489. All persons who are authorized in this
Code to obligate themselves, may enter into a
contract of sale, saving the modifications contained in
the following articles. Where necessaries are sold and
delivered to a minor or other person without capacity
to act, he must pay a reasonable price therefore.
Necessaries are those referred to in article 290. (1457)
Explanation:
Contract of Sale:
- A contract of sale is an agreement where one
party (the seller) commits to transferring
ownership of a property to another party (the
buyer).
- The buyer agrees to pay a certain price for the
property.
- However, the contract itself does not instantly
transfer ownership; additional conditions must
be met.
Example:
- You agree to sell your car to a friend for a
specific amount, but the actual transfer of
ownership happens later.
Necessaries:
- When necessaries (essential goods or services)
are sold and delivered to a minor or someone
lacking capacity to act, they must pay a
reasonable price.
- Necessaries include items like food, clothing,
medicine, and basic utilities.
Example:
- A minor buys groceries, and even though they
can’t legally enter into contracts, they must pay
a fair price for the essentials they received.
Sample Questions (with Answers):
1. What is a contract of sale?
Answer: A contract where a seller promises to transfer
ownership, and the buyer agrees to pay a price.
2. Does signing a contract of sale immediately
transfer ownership?
Answer: No, additional conditions must be fulfilled.
3. What are necessaries?
Answer: Essential goods or services (e.g., food, clothing,
medicine).
4. Who pays for necessaries when sold to a
minor?
Answer: The minor must pay a reasonable price.
5. Give an example of necessaries.
Answer: Buying groceries or medicine.
6. What happens if a buyer fails to fulfill
obligations in a contract to sell?
Answer: The earnest money may be forfeited in favor of
the seller.
7. Who pays utility bills and taxes in a contract
to sell?
Answer: The seller is responsible for pending utility
bills and taxes.
8. What document signifies the actual sale after
fulfilling conditions?
Answer: The Deed of Absolute Sale.
9. What’s the purpose of a contract to sell?
Answer: It signifies an intention to sell in the future.
10. What’s the difference between a contract of
sale and a contract to sell?
Answer: A contract of sale transfers ownership
immediately, while a contract to sell sets conditions
before ownership changes hands
●
Person who may enter into a contract of sale.
Legal Capacity to Buy and Sell:
- Generally, anyone who can legally bind
themselves (both natural persons and legal
entities) has the capacity to buy and sell.
- Exceptions exist when the law recognizes
absolute or relative incapacity.
●
Kinds of incapacity.
Absolute Incapacity:
- Applies to individuals who cannot legally bind
themselves at all.
Example:
- Minors (those below the age of legal
competence) have absolute incapacity.
Relative Incapacity:
- Pertains to specific persons or certain types of
property.
Example:
- A mentally impaired person may have relative
incapacity.
Sample Questions (with Answers):
1. Who has legal capacity to buy and sell?
Answer: Anyone who can legally bind themselves.
2. What is absolute incapacity?
Answer: It applies to individuals who cannot legally
enter into contracts (e.g., minors).
3. Give an example of relative incapacity.
Answer: A mentally challenged person’s limited
capacity to contract.
4. What determines relative incapacity?
Answer: It varies based on specific persons or property
types.
5. Can incapacities be extended beyond what
the law provides?
Answer: No, the law defines the limits of incapacity.
6. What happens if a minor enters into a
contract to buy necessaries?
Answer: The minor must pay a reasonable price for the
essentials.
7. What is the purpose of Article 1489?
Answer: It outlines rules for contracts of sale.
8. When does ownership transfer in a contract
of sale?
Answer: After fulfilling conditions specified in the
contract.
9. What are necessaries?
Answer: Essential goods or services (e.g., food,
clothing).
10. How does relative incapacity affect property
transactions?
Answer: It limits the ability to buy or sell certain types
of property .
●
Liability for necessaries of minor or other
person without capacity to act.
Necessaries:
- Necessaries are essential items needed for
sustenance, dwelling, clothing, medical care,
education, and transportation.
- Their nature depends on the incapacitated
person’s financial capacity and family
circumstances.
Contracts with Minors and Incapacitated Persons:
- Contracts entered into by minors or
incapacitated individuals are generally voidable.
- However, if necessaries are sold directly to them
(without parental intervention), they must pay a
reasonable price.
Valid Sale by Minors:
- Minors who falsely claim adulthood but have
not legally reached majority can still validly sell
real estate.
- They cannot later avoid their obligations arising
from the sale.
Sample Questions (with Answers):
1. What are necessaries?
Answer: Essential goods like food, clothing, and
medical care.
2. Are contracts with minors always valid?
Answer: No, they are generally voidable.
3. When must a minor pay for necessaries?
Answer: If they receive them directly (without parental
involvement).
4. What happens if a minor pays more than a
reasonable price?
Answer: They can recover the excess amount.
5. Can minors sell real estate?
Answer: Yes, if they falsely claim adulthood.
6. What is the doctrine related to minors’ real
estate sales?
Answer: They cannot later avoid their obligations.
7. What determines the validity of a contract for
necessaries?
Answer: The specific circumstances of each case.
8. What is the role of parental intervention in
necessaries contracts?
Answer: If absent, the minor must pay a reasonable
price.
9. What legal provisions support the doctrine of
estoppel?
Answer: Rules of Court (Rule 131, Sec. 1) and the Civil
Code (Art. 1431).
10. What’s the key principle for minors’ real
estate transactions?
Answer: Honoring obligations assumed during
-
ART. 1490. The husband and the wife cannot sell
property to each other, except: (1) When a separation
of property was agreed upon in the marriage
settlements; or Art. 1490 147 (2) When there has
been a judicial separation of property under article
191.* (1458a)
Explanation:
Spousal Property Sale:
- Generally, spouses cannot sell property to each
other.
Exceptions:
- Separation of Property: If agreed upon in
marriage settlements.
- Judicial Separation of Property: When legally
separated under Article 191.
Examples:
- Valid Sale: If spouses agreed to separate their
property, they can sell to each other.
- Invalid Sale: Without separation, direct
property sale between spouses is prohibited.
Sample Questions (with Answers):
1. Can spouses sell property to each other?
Answer: Generally no, except under specific conditions.
2. What’s the exception to this rule?
Answer: Separation of property or judicial separation.
3. What’s the purpose of Article 1490?
Answer: To regulate spousal property transactions.
4. What if spouses don’t have a separation
agreement?
Answer: They cannot directly sell property to each other.
5. What’s the effect of judicial separation of
property?
Answer: It allows spousal property sales.
6. Give an example of a valid sale between
spouses.
Answer: Selling a house after agreeing to separate
property.
7. Why is direct sale without separation invalid?
Answer: To prevent conflicts of interest.
8. What’s the role of marriage settlements?
Answer: They define property rights and exceptions.
9. What’s the consequence of violating Article
1490?
Answer: Invalid sale, unless separation exists.
10. What’s the key condition for spousal
property sale?
Answer: Separation agreement or judicial order
●
Relative incapacity of husband and wife.
Relative Incapacity:
- Refers to specific situations where certain
persons or classes of property are affected.
Example:
- A husband and wife cannot sell property to each
other directly due to Article 1490. Such sales are
void.
However, exceptions exist:
-
If there’s a separation of property agreed upon in
marriage settlements.
When there’s a judicial separation of property
decreed by the court.
In these cases, they can buy from or sell to
each other.
Marriage Settlements (Ante-Nuptial Contracts):
- Agreements made by soon-to-be-married
individuals.
- Define property relations during marriage.
- Purpose: Clarify ownership, rights, and
responsibilities.
Example:
- Spouses agree to keep their finances separate
.
Questions with Answers:
Q: Why are sales between husband and wife void?
A: Article 1490 expressly prohibits such sales.
Q: What exceptions allow sales between them?
A: Separation of property or court-decreed separation.
Q: What’s the purpose of a marriage settlement?
A: To fix property relations during marriage.
Q: Can spouses make moderate gifts to each other?
A: Yes, on family rejoicing occasions.
Q: When are sales between them allowed?
A: With separation of property agreements.
Q: What if there’s no separation of property?
A: Direct sales remain void.
Q: What’s the legal term for psychological incapacity?
A: It’s a legal concept, not medical1.
Q: Does psychological incapacity affect children’s
legitimacy?
A: No, it doesn’t impact their legitimacy2.
Q: What are “necessaries” in relation to minors?
A: Essential items needed for sustenance, clothing, etc.
Q: Can minors sell real property if they’ve reached
adulthood?
A: Yes, if they pretended to be of age
●
Reason for prohibition under Article 1490.
Article 1490 of the Civil Code of the Philippines deals
with the capacity of individuals to buy or sell
property. Here’s a concise explanation:
Prohibition:
- The law prohibits husbands and wives from
selling property to each other, except under
specific circumstances.
Exceptions:
- When a separation of property was agreed upon
in the marriage settlements.
- When there has been a judicial separation of
property under Article 191.
Purpose:
- The primary reason for this prohibition is to
protect third parties who might rely on the
supposed ownership of a property by either
spouse. Imagine someone entering into a
contract with one spouse, only to discover that
the property they relied upon was actually
transferred to the other spouse.
Examples:
-
-
Valid: If a husband and wife agreed to separate
their property, they can sell property to each
other.
Invalid: If there’s no separation agreement,
selling property between spouses is generally
prohibited.
Questions and Answers:
Q: What does Article 1490 of the Civil Code prohibit?
A: It prohibits husbands and wives from selling property
to each other, except under specific circumstances.
Q: When can spouses sell property to each other?
A: They can do so if there’s a separation of property
agreement or a judicial separation of property.
Q: Why is this prohibition in place?
A: To protect third parties who might rely on property
ownership.
Q: Can a husband sell his property to his wife
without any special conditions?
A: Generally, no. Exceptions apply.
Q: What if the property was transferred to the other
spouse without the buyer’s knowledge?
A: The transaction may be voidable, and the buyer can
seek remedies.
Q: Is this prohibition absolute?
A: No, there are specific situations where property sales
between spouses are allowed.
Q: What’s the purpose of Article 1490?
A: To prevent unfair situations where third parties are
misled about property ownership.
Q: Can spouses sell property during marriage
without any restrictions?
A: Not without meeting the exceptions outlined in the
law.
Q: What if a husband sells property to his wife
secretly?
A: Such a transaction may be legally challenged.
Q: How does this law impact property transactions?
A: It ensures transparency and protects innocent parties
from unintended consequences.
Remember, legal matters can be complex, and seeking
professional advice is essential for specific cases.
●
Persons permitted to question sale.
Article 1490 of the Civil Code:
- This article deals with transfers (sales) between
husband and wife.
- It prohibits such transfers, except under specific
circumstances.
-
However, this prohibition can only be invoked
by individuals who have a direct interest in the
transfer.
Examples of those who can challenge the sale:
- Heirs of either spouse.
- Creditors existing at the time of the transfer.
- Cannot be challenged by creditors who
became such after the transaction.
Government’s Role:
- The government has a vested interest in taxable
transactions.
- It can question the validity or legitimacy of sales
between spouses.
- This is to prevent tax evasion.
- The government can impugn such sales.
Examples:
- Valid Sale: If a husband sells property to his
wife, and they had a premarital agreement for
separate property.
- Invalid Sale: If a husband sells property to his
wife without any legal basis.
Questions and Answers:
Q: Who can challenge a sale between spouses?
A: Heirs or creditors existing at the time of the transfer.
Q: Can creditors who became such after the
transaction challenge the sale?
A: No, they cannot.
Q: Why is the government interested in sales between
spouses?
A: To prevent tax evasion.
Q: Under what circumstances can a husband sell
property to his wife?
A: When there’s a premarital agreement for separate
property.
Q: What if there’s no legal basis for the sale?
A: It would be considered invalid.
Q: Can heirs challenge such sales?
A: Yes, they can.
Q: What about creditors?
A: Only those existing at the time of the transfer.
Q: Is there any exception for creditors who became
such after the transaction?
A: No, they cannot challenge the sale.
Q: What’s the role of Article 1490?
A: It governs transfers between spouses.
Q: Why is this relevant for the government?
A: To ensure proper taxation and prevent evasion.
ART. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either
in person or through the mediation of another: (1)
The guardian, the property of the person or persons
who may be under his guardianship; (2) Agents, the
property whose administration or sale may have been
entrusted to them, unless the consent of the principal
has been given; (3) Executors and administrators, the
property of the estate under administration; (4)
Public officers and employees, the property of the
State or of any subdivision thereof, or of any
government owned or controlled corporation, or
institution, the administration of which has been
entrusted to them; this provision shall apply to
judges and government experts who, in any manner
whatsoever, take part in the sale; (5) Justices, judges,
prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected
with the administration of justice, the property and
rights in litigation or levied upon an execution before
the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall
apply to lawyers, with respect to the property and
rights which may be the object of any litigation in
which they may take part by virtue of their
profession; (6) Any others specially disqualified by
law. (1459a)
Explanation:
Guardians:
- A guardian cannot buy the property of the
person(s) under their guardianship.
Agents:
- Agents who manage property cannot purchase it
unless the principal consents.
Executors and Administrators:
- Those handling an estate under administration
cannot acquire its property.
Public Officers and Employees:
- They cannot buy state-owned or governmentcontrolled property, including judges and
experts involved in sales.
Justice System Personnel:
- Judges, clerks, and lawyers cannot acquire
property involved in litigation they handle.
Other Disqualifications:
- Any other disqualifications specified by law
apply.
Examples:
-
A guardian cannot buy the land owned by their
ward.
A government employee cannot purchase stateowned land.
A lawyer handling a lawsuit cannot acquire the
disputed
property.
Questions:
1. Who is disqualified from acquiring property
under Article 1491?
Answer: Guardians, agents, executors, public officers,
justice system personnel, and others specified by law.
2. What type of property can a guardian not
purchase?
Answer: Property of the person(s) under their
guardianship.
3. Can a government employee buy state-owned
land?
Answer: No, it’s prohibited.
4. Which professionals are restricted from
acquiring litigated property?
Answer: Judges, clerks, and lawyers.
5. What does Article 1491 aim to prevent?
Answer: Conflicts of interest and abuse of power.
6. Give an example of a disqualified acquisition.
Answer: A lawyer buying land involved in a case
they’re handling.
7. Does Article 1491 apply to all property
transactions?
Answer: No, only specific situations as outlined.
8. Can an executor purchase estate property?
Answer: No, it’s disallowed.
9. What’s the purpose of this provision?
Answer: To maintain fairness and prevent misuse.
10. Who else can be disqualified under Article
1491?
Answer: Anyone specifically barred by law.
Incapacity by reason of relation to property.
- Certain individuals are prohibited from
acquiring property due to their special
roles or control over it.
These include:
- Guardians
- Agents
- Executors and administrators
- Public officers and employees
- Judicial officers, employees, and
lawyers
- Others disqualified by law
Example:
- A guardian cannot buy property from their ward.
●
Question:
Who are the persons disqualified from
acquiring property directly or indirectly?
Answer: Guardians, agents, executors, public officers,
and others listed in the law.
●
Reasons for Prohibitions (Article 1491):
- These restrictions are based on public
policy:
- Fiduciary
relationship:
These
individuals have a duty of trust.
- Control over property: They can exploit
their position.
- The goal is to prevent fraud and undue
influence.
Example:
- A lawyer buying property from their client.
Question: Why does Article 1491 disqualify certain
persons from property transactions?
Answer: To prevent abuse of trust and maintain fairness.
●
Prohibition with respect to guardians.
- What It Means: When someone is a
guardian (like a parent or legal
guardian), they are responsible for
taking care of another person (often a
minor or someone unable to take care of
themselves).
-
The Rule: Guardians cannot buy
property or assets from the person they
are guarding. This is because the
relationship is so close and dependent
that there’s a risk of exploitation.
Example:
- A parent cannot buy their child’s house because
it might not be in the child’s best interest.
Question:
- Can a parent buy their minor child’s
property?
Answer: No, due to prohibition with respect to
guardians.
Prohibition with Respect to Agents:
- What It Means: An agent represents
someone else (the principal) in
transactions (like selling a house).
- The Rule: Agents cannot buy property
they are supposed to be selling on behalf
of their principal. This avoids conflicts
of interest.
Example:
- If an agent is hired to sell a house, they cannot
buy it themselves while still representing the
seller.
Question:
- Is an agent allowed to purchase the property
they’re hired to sell?
Answer: No, there’s a prohibition against this unless
after termination of agency.
●
●
Prohibition with respect to executors and
administrators.
-
Executors and administrators are like caretakers
of someone’s property after they pass away.
- The rule says they can’t buy the same property
they’re taking care of.
- But there’s an exception: If they’re buying
hereditary rights (like a share in an inheritance),
that’s okay.
Example:
- If an executor manages an estate, they can buy a
share of the inheritance without breaking the
rule.
● Public Officials and Employees:
- This rule applies to government workers.
- They can’t buy properties owned by the
government or its agencies.
Example:
- A governor can’t buy land owned by the
province they govern.
- But if they’re not in charge of that property (like
a school superintendent), they’re not affected.
- Judges and government experts also need to
follow
this
rule.
Questions and Answers:
1. Can an executor buy part of an inherited
estate they manage?
Yes, they can buy hereditary rights (like a share in the
estate).
2. Can a governor buy land owned by their
province?
No, that’s not allowed.
3. Does this rule apply to judges and
government experts?
Yes, they must follow it too.
-
Besides judges and lawyers, there are
others who can't buy certain types of
property:
- Aliens can't buy private agricultural
lands.
- Sellers who haven't been paid and still
have rights over goods they sold can't
buy those goods again.
- Officers in charge of selling property
through legal processes can't buy that
property themselves.
Example:
- An alien named Sam wants to buy a
farm in the Philippines, but the law says
he can't because he's not a Filipino
citizen.
2. The reason a governor (or any public official) is
not allowed to buy land owned by their province (or
any government property) is to prevent conflicts of
interest and ensure fairness.
3. These rules exist to uphold transparency, prevent
conflicts, and maintain public trust in our institutions
●
Prohibition with respect to judges, etc., and
lawyers.
- Prohibition for Judges and Lawyers:
Judges and lawyers are not allowed to
buy or take property that's part of a legal
case they're involved in. For example, if
a lawyer helps someone with a lawsuit,
they can't then buy the property
involved in that lawsuit.
- When Property is Considered "In
Litigation": Property is considered "in
litigation" from the moment it's involved
in a legal action until that action is
completely finished.
- Consequences for Violating the
Prohibition: If judges or lawyers ignore
this rule and buy the property anyway,
the sale might be declared invalid.
Whether it's just voidable or completely
void depends on the situation.
- Other Disqualified People: The law also
lists other people who are not allowed to
buy certain types of property, like aliens
buying agricultural land.
Questions:
-
-
-
-
●
1. Who is prohibited from buying
property that's part of a legal case?
Judges and lawyers involved in the case.
2. When is property considered "in
litigation"?
From the moment it's involved in a legal action
until the action is finished.
3. What are the consequences of
violating the prohibition?
The sale might be declared invalid, depending
on the situation.
4. Besides judges and lawyers, who else
is disqualified from buying certain
types of property?
Aliens when it comes to buying agricultural land,
for example.
Other
persons
especially
disqualified
●
Effect of Violating the Prohibition:
- If someone ignores these rules and buys
the property anyway:
-
If it's about private interests (like a seller
buying back their goods), the sale might
be voidable, meaning it could be
canceled. But it could also be fixed if
the seller agrees.
- If it's about public interests (like officers
buying property they're supposed to sell
impartially), the sale is completely void,
meaning it's invalid from the start.
Example:
- Sarah, a court officer, buys a house that
was supposed to be auctioned off. Her
purchase is considered invalid because
it's against the law.
●
Nullity of Prohibited Contracts Explained:
- Contracts made by public officers,
judges, lawyers, etc., involving their
official duties are permanently invalid
and can't be fixed later.
- Contracts made by guardians, agents, or
administrators can be fixed if both
parties agree to a new contract that
meets legal requirements.
Example:
- David, acting as a guardian, sells
property illegally. Later, both parties
agree to a new, legal contract for the
sale. This new contract is valid, but it
doesn't change the fact that the original
sale was illegal.
Question:
1. Who are some other people besides judges
and lawyers who can't buy certain types of
property?
Other disqualified persons include aliens, unpaid sellers
with rights over the goods they sold, and officers
conducting execution sales.
2. What happens if someone buys property
they're not supposed to?
-
If someone buys property they're not supposed
to, the consequences vary based on the situation:
- If it involves private interests, like a seller
buying back their goods, the sale might be
voidable, meaning it could be canceled. But it
could also be fixed if both parties agree.
- If it involves public interests, like officers
buying property they're supposed to sell
impartially, the sale is completely void, meaning
it's invalid from the start.
3. How do the consequences differ for violations
involving private interests versus public
interests?
Violations involving private interests may result in
voidable sales that can potentially be rectified with
agreement from both parties. Violations involving public
interests lead to sales being completely void, meaning
they're invalid from the outset and cannot be corrected.
4. Explain the difference in the permanence of
nullity for contracts involving public officers
versus guardians or agents.
Contracts involving public officers, judges, lawyers, etc.,
are permanently invalid and cannot be rectified later. On
the other hand, contracts made by guardians, agents, or
administrators can potentially be rectified if both parties
agree to a new contract that meets legal requirements.
5. Give an example of a situation where a sale
might be voidable, and another where it
would be completely void.
-
-
Example of a voidable sale: A seller buys back
goods they previously sold without being paid
for them. If both parties agree, the sale might be
canceled.
Example of a completely void sale: An officer
conducting an execution sale buys the property
themselves. This sale is invalid from the
beginning due to public interest concerns.
ART. 1492. The prohibitions in the two preceding
articles are applicable to sales by virtue of legal
redemption, compromises and renunciations. (n)
-
In simple terms, Art. 1492 states that the
restrictions mentioned in the previous articles
(Art. 1490 and 1491) also apply to certain types
of sales, compromises, and renunciations.
Examples:
- Let's say you have a piece of land, and according
to the law, certain people are restricted from
buying it. If you decide to sell that land through
a legal redemption process, those same
restrictions still apply.
-
Imagine two people are in a legal dispute over a
car accident. Instead of going to court, they
agree to compromise. Even in this compromise
agreement, the same restrictions on who can buy
or own things still hold true.
Questions and Answers:
Q: What does Art. 1492 say about the prohibitions
mentioned in previous articles?
A: Art. 1492 states that the restrictions mentioned in
previous articles also apply to sales through legal
redemption, compromises, and renunciations.
Q: Can you give an example of how this applies in a
real-life situation?
A: Sure! Let's say there are restrictions on who can buy a
particular type of property. Even if someone tries to buy
that property through a compromise or renunciation
process, those same restrictions still apply.
Q: What is a compromise according to Art. 1492?
A: A compromise is a contract where parties make
concessions to avoid a legal dispute or settle one that has
already begun. It's like a friendly agreement to solve a
disagreement.
Q: How does Art. 1492 relate to the qualifications of
lessees?
A: Art. 1492 states that the same disqualifications for
buying property mentioned in previous articles also
apply to becoming lessees (renters) of those same
properties.
ART. 1493. If at the time the contract of sale is
perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be
without any effect. But if the thing should have been
lost in part only, the vendee may choose between
withdrawing from the contract and demanding the
remaining part, paying its price in proportion to the
total sum agreed upon. (1460a)
Basic Explanation:
● If something you're trying to sell is completely
destroyed before you agree to sell it, then the
sale contract is canceled because there's nothing
to sell anymore.
● But if only part of the thing is lost, the buyer can
choose to either cancel the contract or ask for the
remaining part, paying a fair price for it.
Examples:
Total Loss: You agree to sell your laptop to a
friend, but before you finalize the sale, the
laptop gets dropped and completely smashed.
Since the laptop doesn't exist anymore, the sale
agreement is canceled, and your friend doesn't
have to buy it or pay anything.
Partial Loss: You agree to sell a painting to
someone, but before you can complete the sale,
the painting gets slightly damaged. Now, the
buyer can decide if they still want to buy the
painting as it is, perhaps at a reduced price, or
they can cancel the deal altogether.
● Option 2: You can still buy the remaining 80
boxes of apples, but you'll only pay for those 80
boxes, not the full $10,000.
Questions & Answers:
Q: What happens if the thing being sold is completely
destroyed before the sale agreement is finalized?
A: The sale contract becomes void because there's
nothing left to sell.
Q: If only part of the thing being sold is lost, what
options does the buyer have?
A: The buyer can either cancel the sale or choose to buy
the remaining part, paying a fair price for it.
Q: Can you give an example of a partial loss scenario?
A: Sure, if you agree to sell a set of chairs, but one of
them breaks before the sale is complete, the buyer can
decide whether to proceed with the purchase of the
remaining chairs or cancel the deal.
ART. 1494. Where the parties purport a sale of
specific goods, and the goods without the knowledge
of the seller have perished in part or have wholly or
in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at
his option treat the sale: (1) as avoided; or (2) as valid
in all of the existing goods or in so much thereof as
have not deteriorated, and as binding the buyer to
pay the agreed price for the goods in which the
ownership will pass, if the sale was divisible. (n)
What does Article 1494 say?
-
Article 1494 deals with what happens when
goods that were supposed to be sold are
damaged or lost before the sale happens.
Questions and Answers:
1. What happens if the goods are completely lost
or damaged before the sale?
● The buyer can choose to cancel the sale
and not pay anything.
2. What if only some of the goods are lost or
damaged?
● The buyer can still buy the undamaged
goods but only needs to pay for those.
3. Can the buyer be forced to pay for goods that
were lost before the sale?
● No, the buyer cannot be forced to pay
for goods that were lost or damaged
before the sale.
4. What determines if the buyer can continue
with the purchase?
● Whether the sale was for specific goods
and if the remaining goods are still
usable.
ART. 1495. The vendor is bound to transfer the
ownership of and deliver, as well as warrant the thing
which is the object of the sale. (1461a)
Ownership Transfer and Delivery:
-
-
Option 1: Avoiding the Sale
● If the goods are damaged or lost before the sale,
the buyer can choose to cancel the sale
altogether.
Warranty against Eviction and Defects:
-
Option 2: Continuing with the Sale
● If the goods are only partially damaged or lost,
the buyer can still choose to go through with the
sale but only for the goods that are left
undamaged. They would only have to pay for
the undamaged goods.
Example:
Let's say you agreed to buy 100 boxes of apples for $100
each, making a total of $10,000. However, before you
could finalize the purchase, 20 boxes of apples got
spoiled.
● Option 1: You can cancel the entire purchase
and not pay anything.
When someone sells something, they have to
make sure the buyer becomes the rightful owner
of that thing and actually gets it. Example:
If I sell you my bicycle, I need to make sure you
legally own it and actually get the bicycle in
good condition.
-
The seller promises that the buyer won't lose the
thing they bought due to someone else's claim,
and there won't be any hidden problems with it.
Example:
If I sell you a house, I promise that no one will
come and say it's theirs after you buy it, and I
also promise there are no hidden issues like a
leaky roof.
Taking Care of the Thing:
-
-
Until the buyer gets the thing, the seller has to
look
after
it
responsibly.
Example:
If I sell you a puppy but it's not old enough to
leave its mother yet, I have to take good care of
it until it's ready to go home with you.
Paying for Sale Expenses: Unless we agree
otherwise, I, as the seller, have to pay for things
like
the
paperwork
for
the
sale.
Example: If I sell you my old phone, unless we
agree otherwise, I have to pay for the paperwork
to transfer ownership to you.
Questions:
What are the main responsibilities of a seller
according to Article 1495?
According to Article 1495,
responsibilities of a seller are:
●
the
According to the law, unless there is an
agreement otherwise, the seller is responsible for
paying for the expenses related to the sale,
including paperwork.
ART. 1496. The ownership of the thing sold is
acquired by the vendee from the moment it is
delivered to him in any of the ways specified in
articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is
transferred from the vendor to the vendee. (n)
main
To transfer ownership of the item sold.
●
To deliver the item in the condition it
was in when the contract was made.
●
To provide warranty against eviction
and hidden defects.
●
To take care of the item until it is
delivered.
Delivery in Sales Simplified:
-
When you buy something, you need to actually
get it from the seller. That's what delivery means
in sales. There are different ways this can
happen.
To pay for the expenses related to the
sale unless there is an agreement
otherwise.
Can a seller sell something they don't own yet?
Actual Delivery: This is when the seller
physically hands over the item to you. For
example, if you buy a book from a bookstore
and they give it to you at the counter, that's
actual delivery.
Yes, a seller can sell something they don't own
at the time of the sale, as long as they have the
right to transfer ownership when the item is
delivered.
What happens if the seller doesn't deliver the item as
agreed upon?
Constructive Delivery: Sometimes, you can't
physically hand over the item, but there are other
ways to show that it's yours now. This could be
through legal documents, symbols, or other
arrangements that mean the item belongs to you
even if you don't have it in your hands right
away.
●
If the seller fails to deliver the item as agreed
upon, the buyer may ask for the rescission of the
contract or demand fulfillment with the right to
damages in either case.
Explain the concept of warranty against eviction and
hidden defects with an example.
Warranty against eviction means the seller guarantees
that the buyer won't lose the item due to someone else's
claim of ownership. For example, if I sell you a piece of
land and someone else later claims they own it, I am
responsible for that issue.
Hidden defects warranty means the seller
guarantees that there are no hidden problems
with the item. For example, if I sell you a car
and it has a hidden engine problem that I didn't
tell you about, I am responsible for fixing it or
compensating you.
When does the obligation to take care of the thing
end for the seller?
The obligation to take care of the item ends
when it is delivered to the buyer.
Who typically pays for the paperwork in a sale
transaction, according to the law?
Agreed-upon Delivery: Sometimes, the buyer
and seller agree on a different way for the item
to be given to the buyer. It could be something
like leaving the item in a specific place for the
buyer to pick up later.
Examples:
● Actual Delivery: Buying a pizza and having it
delivered to your house.
● Constructive Delivery: Buying a house through
a real estate agent, where the keys are handed
over through legal documents.
● Agreed-upon Delivery: Buying concert tickets
online and having them held at the box office for
you to pick up.
Questions and Answers:
What is delivery in sales?
● Delivery in sales means physically
giving the purchased item from the
seller to the buyer.
What are the different ways delivery can
happen?
Right of the Seller to Get Paid: Even after
delivering the item, the seller can still ask for
payment if the buyer hasn't paid yet.
● Delivery can be actual (physically
● Question: Can a seller ask for
handing over the item), constructive
(using legal or symbolic means), or as
agreed upon between the buyer and
seller.
payment even after delivering the
item?
● Answer: Yes, the seller can still ask for
Can you give examples of each type of
delivery?
payment even after delivering the item.
Completion of the Sale: Delivery, along with
payment, completes the sale.
● Sure, examples include: receiving a
package in the mail (actual delivery),
transferring property ownership through
legal documents (constructive delivery),
or arranging to pick up tickets at a venue
(agreed-upon delivery).
● Question: When is a sale complete?
● Answer: A sale is complete when the
item is delivered, and payment is made.
Enjoyment of the Item: Delivery allows the
buyer to use and enjoy the item they bought.
Why is delivery important in sales?
● Question: Why is delivery important
● Delivery
is important because it
completes the transaction, transferring
ownership of the item from the seller to
the buyer. It ensures that the buyer gets
what they paid for.
ART. 1497. The thing sold shall be understood as
delivered, when it is placed in the control and
possession of the vendee. (1462a)
What is Tradition or Delivery?
-
Tradition or delivery is how ownership of
something (like an item or property) is passed
from one person to another when they buy or
sell it. It's like physically handing over the thing
that was sold.
Example: You sell your old bike to a friend. When you
give them the bike and they accept it, that's tradition or
delivery.
Importance of Tradition:
Transfer of Ownership: Ownership of the item
isn't transferred just by agreeing to buy and sell
it; it happens when the buyer gets possession of
it.
● Question: When does ownership of a
sold item transfer from the seller to
the buyer?
● Answer: Ownership transfers when the
buyer gets control and possession of the
item.
Liability in Case of Loss: Once the buyer gets
control of the item, they're responsible for it. If it
gets lost without the seller's fault, the buyer still
has to pay.
● Question: Who is responsible if a sold
item gets lost after the buyer receives
it?
● Answer: The buyer is responsible, even
if it's lost without the seller's fault.
for the buyer?
● Answer: Delivery allows the buyer to
use and enjoy the item they bought.
Actual Delivery of the Thing Sold:
-
When it's deemed made: Actual delivery
happens when the item is physically handed over
to the buyer or their representative.
● Question: When does actual delivery happen?
● Answer: Actual delivery happens when the item
is placed in the control and possession of the
buyer or their agent.
Example Case: Seller delivers sugar to buyer's
warehouse. Buyer fails to pay but a bank takes
possession of the sugar as security for the buyer's debt.
Later, the buyer goes bankrupt.
● Question: Who owns the sugar in the
warehouse?
● Answer: The buyer owns the sugar, even though
they haven't paid yet, because the seller
delivered it to their warehouse.
ART. 1498. When the sale is made through a public
instrument, the execution thereof shall be equivalent
to the delivery of the thing which is the object of the
contract, if from the deed the contrary does not
appear or cannot clearly be inferred. With regard to
movable property, its delivery may also be made by
the delivery of the keys of the place or depository
where
it
is
stored
or
kept.
(1463)
- In simple terms, Article 1498 of the Civil Code states
that when you sell something using a written document
signed by a public official (like a notary public), that
document is considered as good as physically handing
over the item you're selling. This applies to both
movable (like a car or furniture) and immovable (like
land or a house) property.
For example, let's say you sell your car to someone.
Instead of physically giving them the car keys, you both
sign a document at a notary public's office saying you're
selling the car. According to Article 1498, that document
counts as if you handed over the keys to the buyer.
Here are some questions and answers about this topic:
Q: What does Article 1498 of the Civil Code say
about selling things with written documents?
A: It says that when you sell something using a written
document signed by a public official, it's like physically
handing over the item.
Q: Does this apply to both movable and immovable
property?
A: Yes, it applies to both. Whether you're selling a car or
a piece of land, a written document can count as delivery.
Q: Can you give an example of how this works?
A: Sure! Let's say you sell your house. Instead of
physically handing over the keys, you and the buyer go
to a notary public and sign a document saying you're
selling the house. That document counts as if you
handed over the keys.
Q: Are there any exceptions to this rule?
A: Yes, there are situations where the written document
doesn't count as delivery. For example, if it's clear from
the document that delivery wasn't intended, or if a third
person (like a squatter) is in possession of the property
and prevents the transfer of ownership.
ART. 1499. The delivery of movable property may
likewise be made by the mere consent or agreement
of the contracting parties, if the thing sold cannot be
transferred to the possession of the vendee at the time
of the sale, or if the latter already had it in his
possession for any other reason. (1463a)
-
Article 1499 deals with the delivery of movable
property (like a bike, phone, or laptop) from the
seller to the buyer.
It says that delivery can happen in two ways:
- By mere consent or agreement: If the thing sold
can’t be physically handed over to the buyer at
the time of sale.
- If the buyer already has it: For instance, if the
buyer already had the item (maybe they were
borrowing it) before the sale.
Traditio Longa Manu:
- This mode of delivery occurs when the seller
merely points to the thing sold without
physically transferring it to the buyer.
- The thing sold remains under the seller’s control,
but the buyer gains the right to use and manage
it.
Example: Imagine you’re selling a bicycle. Instead of
physically handing it over, you point to the bicycle and
say, “This is yours now.” The buyer- can ride the
bicycle, even though it’s still physically with you.
Traditio Brevi Manu:
- In this case, the buyer already possesses the
thing sold due to a different legal reason (such as
a lease or rental agreement).
- The seller doesn’t need to physically transfer the
item because the buyer already has it.
Example: Suppose you’re leasing a car, and the lessor
decides to sell it to you. Since you’re already driving the
car, the legal ownership shifts to you without any
additional physical handover.
ART. 1500. There may also be tradition constitutum
possessorium. (n)
What Is Traditio Constitutum Possessorium?
- Traditio constitutum possessorium is a legal
concept related to property transfer.
- It occurs when the seller (vendor) continues to
possess the sold property after the sale, but not
as the owner. Instead, they remain in possession
in some other capacity (like a tenant of the
buyer).
- Unlike the usual delivery process, where the
seller hands over the property directly to the
buyer, traditio constitutum possessorium
happens by mutual agreement between the
parties.
Examples:
- Imagine you sell your car to someone but
continue using it as a driver. You’re no longer
the owner, but you still drive it.
- Or consider a landlord who sells a house to a
tenant. The tenant becomes the owner, but the
landlord remains in possession as a tenant.
Questions and Answers:
- Q: What’s the key difference between traditio
constitutum possessorium and regular
delivery?
- A: In regular delivery, ownership and possession
change hands immediately. In traditio
constitutum possessorium, the seller remains in
possession
after
the
sale.
Q: Can the buyer object to this arrangement?
A: No, because both parties agree to it. The law
treats it as if the necessary transfers happened by
consent.
- Q: Is this common?
- A: It’s less common but can occur in specific
situations,
especially
when
practical
arrangements make it more convenient.
Remember, traditio constitutum possessorium is like
a legal handshake where both parties nod and say,
“You keep using it, but it’s mine now!”
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