Sales Law: Ownership and Delivery

• The vendor must transfer ownership, deliver, and warrant the object of the sale.
• Ownership transfer by the vendor at contract perfection isn't essential, only a right to transfer ownership upon delivery.
• Transferring ownership is not essential for the contract's perfection.

Ownership and Delivery

• Ownership transfers to the vendee upon delivery, as specified in Articles 1497-1501, or as agreed.
• Ownership transfers upon delivery, which can be actual, constructive/legal, or as agreed upon.
• Delivery occurs when the thing sold is placed under the vendee's control and possession.

Public Instruments and Movable Property

• Sale via public instrument equates to delivery if no contrary intention is clear.
• Movable property delivery can be done via key delivery of storage location.

Constructive Delivery

• It encompasses acts equivalent to real delivery without physical possession and can occur via:
• Public instrument execution
• Symbolical tradition (traditio symbolica)
• Traditio longa manu
• Traditio brevi manu
• Traditio constitutum possessorium
• Quasi-delivery or quasi-traditio

Symbolic Delivery

• Executing a public document counts as a form of it.
• Delivery of movable property can occur via consent if the item can't be transferred physically or if the vendee already possesses it.

Traditio Longa Manu

• Itdelivery occurs via mere consent when the vendor points out the item, giving the vendee control.
• Delivery by mere consent requires that the sold item can't be physically transferred to the vendee.

Traditio Brevi Manu

• Legal delivery occurs when the vendee already possesses the item via another title.
• Legal actions are considered done when a lessor sells the leased item to the lessee, avoiding physical transfer.

Traditio Constitutum Possessorium

• Delivery occurs when the vendor remains in possession but under a different capacity, like a tenant.
• The law deems delivery complete via agreement when the vendor retains possession as a tenant, avoiding physical transfer.

Incorporeal Property

• Delivery is governed by Article 1498's first paragraph.
• Delivery occurs by placing ownership titles with the vendee or allowing the vendee to use their rights with consent.
• Quasi-traditio involves incorporeal things, effected via public instrument or placing ownership titles with the vendee.
• Vendee using their rights with the vendor's consent is also a form of Quasi-traditio.

Goods on Sale or Return

• Ownership transfers upon delivery but can revert if the buyer returns the goods within a fixed or reasonable time.
• For goods delivered on approval, ownership transfers upon buyer's approval or retention without rejection after a fixed or reasonable time.

Delivery Responsibilities

• Whether the buyer collects or the seller delivers depends on the contract.
• Without a contract, delivery occurs at the seller's business place, or residence.
• For specific goods known to be elsewhere, that place is the delivery location.
• If no delivery time is fixed, the seller must send the goods within a reasonable time.
• If goods are with a third party, the seller must ensure the third party acknowledges holding them for the buyer.
• Delivery demand must be at a reasonable hour.
• The seller covers expenses to make goods deliverable unless agreed otherwise.

Place of Delivery

• Delivery place is determined by agreement, trade usage, seller's business place/residence, or the location of specific goods known to both parties.
• Delivery time is set by agreement, or within a reasonable time if unspecified.
• Third-party possession requires acknowledgment to the buyer for delivery fulfillment.

Delivery Quantity Issues

• Regarding the Delivery Quanity, the buyer can reject goods if the quantity is less than agreed.
• Buyers must pay the contract rate if they knowingly accept a partial delivery the seller won't complete.
• If the buyer uses or disposes of goods before realizing the delivery is incomplete, they pay the fair value.
• For larger deliveries, the buyer can accept the agreed quantity and reject the rest.
• Accepting the entire over-delivery means paying the contract rate for all.
• A buyer can accept conforming goods and reject the rest when mixed with different, non-contractual items.
• If the subject matter is indivisible, the buyer can reject the entire delivery in the preceding cases.
• All delivery provisions are subject to trade usage, special agreements, or course of dealing.

ART. 1537.

• The vendor must deliver the sold item with its accessories in the original condition, and the vendee receives all fruits from the contract's perfection date.

Vendee's Right to Fruits

• Vendees are entitled to fruits from the time the delivery obligation arises, which is at contract perfection.

Sale to Multiple Vendees

• Ownership is with the first possessor in good faith for movables.
• For immovables, ownership belongs to the first good-faith registrant.
• Without registration, it goes to the first good-faith possessor, or the one with the oldest title if possession is absent.

Conditional Sales

• A party can refuse to proceed or waive conditions if the obligation depends on an unfulfilled condition.
• Non-performance of a promised condition can be treated as a breach of warranty.
• Buyers can treat the seller's delivery as a condition for acceptance/payment if ownership hasn't passed.
• A condition is an uncertain event that triggers the contract's obligations.
• Contracts are either absolute or conditional.

Non-fulfillment Consequences

• Parties may refuse to continue or waive the condition of the contract.
• Non-performance can be a warranty breach if the condition is a promise.

Express Warranty

• Express Warranties are affirmations or promises inducing purchase, resulting in a purchase induced affirmation.
• Statements of opinion are not warranties unless the seller is an expert relied upon by the buyer.

Warranties in Sales

• Warranties are seller assurances about goods' character, quality, or title, ensuring factual representation.
• Warranties can be express (Art. 1546) or implied (Art. 1547).
• The seller is liable for express warranties, implied title warranties, and warranties against hidden defects, fitness, merchantability, description, and sample.

Express Warranty Defined

• This is a seller's affirmation or promise naturally inducing the buyer to purchase.

Implied Warranty

• A sale contract implies these warranties unless stated otherwise:
• The seller has the right to sell and transfer ownership.
• The buyer will have undisturbed, legal, and peaceful possession.
• The item is free from hidden, undeclared faults/defects.
• Sheriffs, auctioneers, mortgagees, or pledgees selling under authority are exempt from the warranty.

Implied Warranty Defined

• What the law infers from the transaction's nature or parties' circumstances.
• Implied warranties are natural elements presumed in a contract, waivable via express stipulation.

Types of Implied Warranties

• Implied warranty guarantees the seller's right to sell and transfer ownership, ensuring undisturbed possession.
• Guarantees that the item is free from hidden, undeclared defects.
• It guarantees the item is fit for its known purpose or is of merchantable quality if bought by description.

Eviction Warranty

• Eviction occurs when a final judgment deprives the vendee of the purchased item due to a pre-existing right or vendor's act.
• Essential elements include deprivation via final judgment based on a pre-existing right/vendor's act, with the vendor summoned and no vendee waiver.

Vendee's Rights After Eviction

• The Vendee has the Right to Demand of the vendor:
• Return of the item's value at eviction, regardless of the original price.
• Income/fruits delivered to the winning party.
• Eviction suit costs and warranty suit costs.
• Contract expenses paid by the vendee.
• Damages, interests, and ornamental expenses if bad faith is proven.
• The Vendor should pay excess value at eviction or suffer damage, and vendees are only liable for income/fruits if decreed by court.

Warranty Against Hidden Defects

• The vendor is liable for hidden defects rendering the item unfit or reducing its value, but not for patent defects or those known to experts.
• Requisites that must be met are that defects should be significant, hidden, and pre-existing at the time of sale, and the vendee must notify the vendor within a reasonable timeframe.

Legal Action Regarding Defect

• Legal action for price rescission/reduction must be brought within 6 months of delivery or 40 days for animals, with no warranty waiver.
• The seller bears the loss, returns the price, refunds expenses, and pays damages if they knew of hidden faults.
• If unaware, they only return the price, interest, and expenses.
• Actions are barred after six months from delivery.

Sale of Animals

• In sales of multiple item sales, the redhibitory defect in one doesn't affect others unless the vendee wouldn't have bought the others without it.
• The rule is presumed when animals are bought as a team even with separate pricing.
• General Rule is that Defects in some but not all of multiple animals sold simultaneously typically do not lead to overall redhibition, regardless of item pricing.

Vendee Obligations

• The buyer must accept the goods when intimating acceptance, acting inconsistently with the seller's ownership, or retaining goods without rejection after a reasonable time.

Delivery by Installment

• Buyers are not required to accept installment deliveries unless agreed upon.
• Injured parties can refuse further contract and sue for full breach or claim compensation for severable breaches if deliveries are defective, or the other party refuses/neglects without cause.

Buyer's Inspection Rights

• Buyers can inspect goods before acceptance unless agreed otherwise or goods are marked "collect on delivery" without inspection allowance.

Acceptance of the Goods

• Acceptance doesn't discharge the seller from warranty breach liability unless agreed or the buyer fails to report the breach within a reasonable time.
• Buyers don't need to return rejected goods unless agreed.
• Title doesn't transfer, and the buyer isn't obliged to pay.

Failure to Accept Delivery

• Buyers must notify the seller and may be liable as a depositary.
• Title transfers when goods are available, unless stipulated otherwise or the seller reserves ownership as security.
• The buyer must pay the price at the agreed time and place or at delivery without stipulation.
• Buyers pay interest if stipulated, legal rate applies if the rate is not specified.
• Buyers pay if items sold generate income or the buyer defaults after demand.
• Vendees can suspend payments if disturbed in possession/ownership due to a vindicatory action or foreclosure.
• Suspension lasts until the disturbance ceases but isn't allowed if the vendor provides security, it was stipulated to continue paying, or the disturbance is a mere trespass.

Rescission by Vendor

• For immovable property sales, the vendor can rescind if fearing loss of property or price.
• Pactum Commissorium is invalid, and the vendee can pay after the deadline if no demand for rescission has been made.
• Rescission can be triggered if the vendee doesn't appear or pay at the delivery time.

Payment Default

• If the lot was in danger of being eroded because B was cutting all the trees planted thereon and B was squandering his money in gambling, S may sue for the immediate rescission of the sale.
• The lot had been delivered to B, B was to pay the price after 2 months.
• S sold his lot to B for P50,000.00. Does not appear to receive or Having Appeared does not pay unless a longer peirod has been stipulated in the contract.
• If the vendee appears but is uanble to make payment.
• Sale may be immediately immediately rescinded if at the time fixed for the delviery of the thing, the vendee does not appear to receive the thing.