Real Property Law: Sale of Immovable Property

Insolvency and Bankruptcy

• A person who has ceased to pay debts in the ordinary course of business or cannot pay debts as they become due is considered insolvent.
• A bankrupt is a person who has been declared insolvent by a court.

Types of Goods

• Specific goods are goods identified and agreed upon at the time a contract of sale is made.
• Goods include all chattels personal, but not things in action or money of legal tender in the Philippines.
• Goods also include growing fruits or crops.

Assignment of Credits

• Assignment of credits is an agreement where the owner of a credit, known as the assignor, transfers his credit and accessory rights to another, known as the assignee, without the consent of the debtor.
• The assignee acquires the power to enforce the credit to the same extent as the assignor could enforce it against the debtor.
• The vendor in good faith is responsible for the existence and legality of the credit at the time of the sale, unless it was sold as doubtful.
• The vendor in good faith is not responsible for the solvency of the debtor, unless it was so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.

Redemption

• Conventional redemption is a right to repurchase reserved by the vendor in a deed of sale, with the obligation to return to the vendee the price of the sale, the expenses of the contract, and the necessary and useful expenses made on the thing sold.
• Legal redemption is a right to redeem granted by law to co-owners, adjoining owners, or creditors.
• In conventional redemption, if there is no period of redemption agreed upon, it shall last for one year only from the time of the assignment.
• In legal redemption, the right of redemption of co-owners excludes that of adjoining owners.

Documents of Title

• A document of title of goods is a document that proves the possession or control of goods, or authorizes the possessor of the document to transfer or receive the goods.

Warranty of Assignor

• The assignor warrants the existence of the credit at the time of assignment, and its legality, unless the assignor sold it as doubtful.
• The assignor also warrants the solvency of the debtor, unless it was so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.

Effects of Breach of Warranty

• The buyer may accept or keep the goods and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price.
• The buyer may refuse to accept the goods and maintain an action against the seller for damages for the breach of warranty.

Acceptance of Goods

• The buyer is bound to accept delivery and to pay the price of the thing sold at the time and place stipulated in the contract.
• The buyer has a reasonable opportunity to examine the goods upon delivery to ascertain whether they are in conformity with the contract before accepting the same.
• Acceptance of the goods by the buyer shall discharge the seller from liability in damages for breach of any warranty in the contract of sale.

Implied and Express Acceptance

• Implied acceptance occurs when the buyer does any act in relation to the goods which is inconsistent with the ownership of the seller.
• Express acceptance occurs when the buyer intimates to the seller that he has accepted the goods.
• Implied acceptance also occurs when, after the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that he has rejected them.### Delivery of Goods
• Traditio brevi manu is a mode of delivery where the buyer already has possession of the object but under another title (e.g., lessee in a contract of lease).
• Actual delivery occurs when the thing sold is placed under the control and possession of the vendee.
• Symbolical tradition involves the use of a symbol to represent the thing delivered.
• Traditio constitutum possessorium is a mode of delivery where the buyer already has possession of the object but under another capacity.

Obligations of the Vendor

• The vendor's obligations include:
  • To deliver the thing sold
  • To warrant the object sold against eviction and hidden defects
  • To take care of the object sold pending delivery
  • To transfer ownership of the thing sold at the time of meeting of the minds

Warranty Against Hidden Defects

• A warranty is a statement or representation made by the seller relating to the character, quality, or title of the goods.
• Express warranty is a statement or representation made by the seller contemporaneously and as part of the contract of sale.
• Implied warranty is a warranty that arises from the nature of the transaction or the relative situation or circumstances of the parties.

Liability of the Vendor

• The vendor is liable for eviction if the buyer is deprived of the whole of the thing sold.
• The vendor's liability for eviction can be enforced if the buyer has been deprived of the whole of the thing sold and the vendor has been summoned and made a co-defendant in the suit for eviction.

Unpaid Seller's Rights

• An unpaid seller has a right of lien or a right to retain the goods for the price while he is in possession of them.
• An unpaid seller can stop the goods in transit if the buyer has become insolvent.
• An unpaid seller can resell the goods if the buyer has been in default in the payment of the price for a reasonable time.

Negotiable Documents of Title

• A negotiable document of title is a document that can be negotiated by delivery.
• Examples of documents of title to goods include negotiable instruments, bills of lading, dock warrants, and warehouse receipts.
• A negotiable document of title can be negotiated by delivery, and the buyer acquires good title to the goods.

Sale of Immovable Property

• In the sale of immovable property, the buyer acquires good title to the property if he is a purchaser in good faith.
• The first registrant in good faith acquires good title to the property.

Breach of Warranty

• The prescriptive period for actions based on breach of implied warranty is 6 months from the date of delivery.
• The prescriptive period for actions based on breach of warranty against eviction is 6 months from the date of delivery.

Other Key Points

• A buyer acquires good title to the goods if he buys from a store in good faith and for value.
• Quasi-delivery is the delivery of rights, credits, or incorporeal property.
• An action for breach of contract of sale can be filed if the seller sells the same goods to another buyer.
• The seller has the obligation to execute a public instrument if the contract of sale is enforceable.### Sale and Return
• In a sale or return transaction, the vendee (buyer) has no right to demand the return of the value of the thing sold if it is greater or less than the price of the sale.
• The vendee is also not entitled to the income or fruits of the thing sold, or the costs of the suit which caused the eviction.

Implied Reservation of Ownership

• Implied reservation of ownership is a correct answer, indicating that the seller retains ownership of the goods until the buyer has paid the full price.

Eviction

• Eviction occurs when the vendee is deprived of the whole or part of the thing purchased due to a final judgment based on a right prior to the sale or an act imputable to the vendor.

Delivery

• Delivery is the act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the possession of the same.

Traditio Brevi Manu

• Traditio brevi manu is the opposite of constitutum possessorium, which means the transfer of possession of a movable thing.

Unpaid Seller

• An unpaid seller is deemed to be such when the whole or part of the purchase price has not been paid or tendered.
• An unpaid seller having the right of lien or having stopped the goods in transitu, may rescind the transfer of title and resume the ownership in the goods.

Lien

• The unpaid seller of goods loses their lien under certain circumstances, except when the buyer or their agent lawfully obtains possession of the goods.

Breach of Express Warranty

• The prescriptive period for instituting actions based on a breach of express warranty is 4 years.

Loss of Thing

• A thing is lost when it perishes, goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered.

Contract of Sale

• If the thing which is the object of the contract has been entirely lost at the time of perfection of the sale, the contract shall be without any effect.
• If the thing should have been lost in part only, the vendee may choose between withdrawing from the contract or specific performance.

Incapacity

• Absolute incapacity includes minors, insane, or demented persons.
• Relative incapacity includes guardians, public officers, and agents, among others.
• Necessaries include everything indispensable for sustenance, dwelling, clothing, medical attendance, education, and transportation.

Price

• The price must be certain in money or its equivalent, and must not be left to the discretion of one of the contracting parties.
• The price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.

Contract to Sell

• In a contract to sell, the seller agrees to fulfill the promise to sell the subject property when the entire amount of the purchase price is delivered to them.

Earnest Money

• Earnest money is given by the buyer to the seller to bind the bargain, and constitutes an advance payment that must be deducted from the total price.

Option

• An option is a contract by which the owner of property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time.

Dation in Payment

• Dation in payment is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.

This quiz is about the rules and regulations related to the sale of immovable property, specifically when the sale is made by the unit area. It covers the vendor's obligations and the vendee's options in case of discrepancies in the area agreed upon.