Obligations and Remedies of Vendor and Vendee PDF

OBLIGATIONS AND REMEDIES OF VENDOR AND VENDEE OBLIGATIONS OF VENDOR Principal obligations: Transfer ownership of the determinate thing sold Deliver the thing Warrant against eviction and hidden defects Take care of the thing, pending delivery, with proper diligence Pay fo...

OBLIGATIONS AND REMEDIES OF VENDOR AND VENDEE OBLIGATIONS OF VENDOR Principal obligations: Transfer ownership of the determinate thing sold Deliver the thing Warrant against eviction and hidden defects Take care of the thing, pending delivery, with proper diligence Pay for the expenses for the execution and registration of the deed of sale, unless there is a stipulation to the contrary Not engage in double sale OBLIGATIONS OF VENDOR A.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. A.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. OBLIGATIONS OF VENDOR A.1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. This may be effected by: Actual or real delivery – physical delivery; done by passing a movable thing from hand to hand Constructive or legal delivery – equivalent to delivery Delivery in any other manner signifying an agreement that the possession is transferred to the vendee  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 1. Execution of a public instrument 2. Symbolical tradition or traditio symbolica – derivative mode of acquiring ownership by virtue of which one who has the right and intention to alienate a corporeal thing, transmits it by virtue of a just title to one who accepts the same 3. Traditio longa manu 4. Traditio brevi manu 5. Traditio constitutum possessorium 6. Quasi-delivery or quasi-traditio  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 1. EXECUTION OF A PUBLIC INSTRUMENT – one which is acknowledged before a notary public or any official authorized to administer oaths by the person who executed the same A. 1498,par1. 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. Thing should be under control of vendor; otherwise vendor fails in his obligation to deliver if vendee is unable to enjoy the thing because a third party, who is in actual possession of the thing, is resisting the vendee’s possession of the thing  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 2. SYMBOLICAL TRADITION OR TRADITIO SYMBOLICA – derivative mode of acquiring ownership by virtue of which one who has the right and intention to alienate a corporeal thing, transmits it by virtue of a just title to one who accepts the same Parties make use of a token symbol to represent the thing delivered A.1498, par2. 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.  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 3. TRADITIO LONGA MANU – more commonly referred to as pointing to the thing A. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties [such as pointing to the thing which shall thereafter be under the control of the vendee], 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.  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 4. TRADITIO BREVI MANU A. 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. If the vendee is already in possession of the thing in another capacity (e.g. lessee), vendee need not return the thing to the vendor who will in turn deliver it back to the vendee  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 5. TRADITIO CONSTITUTUM POSSESSORIUM A.1500. There may also be tradition constitutum possessorium. Opposite of tradition brevi manu Takes place when vendor continues in possession of the property sold not as owner but in some other capacity (e.g. lessee of the vendee)  OBLIGATIONS OF VENDOR Constructive or legal delivery – equivalent to delivery 6. QUASI-DELIVERY OR QUASI-TRADITIO A.1501. With respect to incorporeal property, the provisions of the first paragraph of article 1498 shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's consent, shall be understood as a delivery. OBLIGATIONS OF VENDOR Delivery is necessary to transfer ownership; this cannot be done by mere consent. There must be an act of delivery with the intention of delivering the thing sold. Parties may however agree that delivery will not transfer ownership until vendee paid the full price or fulfilled certain conditions.  OBLIGATIONS OF VENDOR A.1502. When goods are delivered to the buyer "on sale or return" to give the buyer an option to return the goods instead of paying the price, the ownership passes to the buyer on delivery, but he may revest the ownership in the seller by returning or tendering the goods within the time fixed in the contract, or, if no time has been fixed, within a reasonable time. (n) When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms, the ownership therein passes to the buyer: (1) When he signifies his approval or acceptance to the seller or does any other act adopting the transaction; (2) If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact. (n)  OBLIGATIONS OF VENDOR A. 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer. Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract. Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer. Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods, although the bill of exchange has not been honored, provided that such purchaser has received delivery of the bill of lading indorsed by the consignee named therein, or of the goods, without notice of the facts making the transfer wrongful.  OBLIGATIONS OF VENDOR A. 1503. how seller reserves ownership (1) When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer.  OBLIGATIONS OF VENDOR A. 1503. cont. how seller reserves ownership (2) Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract.  OBLIGATIONS OF VENDOR A. 1503. cont. how seller reserves ownership (3) Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer.  OBLIGATIONS OF VENDOR A. 1503. cont. how seller reserves ownership (4) Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods, although the bill of exchange has not been honored, provided that such purchaser has received delivery of the bill of lading indorsed by the consignee named therein, or of the goods, without notice of the facts making the transfer wrongful.  OBLIGATIONS OF VENDOR A. 1504. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is transferred to the buyer, but when the ownership therein is transferred to the buyer the goods are at the buyer's risk whether actual delivery has been made or not, except that: (1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery; (2) Where actual delivery has been delayed through the fault of either the buyer or seller the goods are at the risk of the party in fault.  OBLIGATIONS OF VENDOR A. 1505. Subject to the provisions of this Title, where goods are sold by a person who is not the owner thereof, and who does not sell them under authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell. Nothing in this Title, however, shall affect: (1) The provisions of any factors' act, recording laws, or any other provision of law enabling the apparent owner of goods to dispose of them as if he were the true owner thereof; (2) The validity of any contract of sale under statutory power of sale or under the order of a court of competent jurisdiction; possession of movable property acquired in good faith = title; (3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the Code of Commerce and special laws.  OBLIGATIONS OF VENDOR A. 1506. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith, for value, and without notice of the seller's defect of title. Illustrations: S, minor, sold his car to G, person of legal age. G sold the same car to B who acquired it in GF, without knowledge of the acquisition of G. S, in GF, bought a car stolen from C. C has better right over the car, and can recover without paying anything, EXC if S bought the car in public sale.  OBLIGATIONS OF VENDOR A. 1507. A document of title in which it is stated that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document is a negotiable document of title.  OBLIGATIONS OF VENDOR A. 1521. Whether it is for the buyer to take possession of the goods or of the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, express or implied, or usage of trade to the contrary, the place of delivery is the seller's place of business if he has one, and if not his residence; but in case of a contract of sale of specific goods, which to the knowledge of the parties when the contract or the sale was made were in some other place, then that place is the place of delivery.  OBLIGATIONS OF VENDOR A. 1521. Where by a contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time. Where the goods at the time of sale are in the possession of a third person, the seller has not fulfilled his obligation to deliver to the buyer unless and until such third person acknowledges to the buyer that he holds the goods on the buyer's behalf.  OBLIGATIONS OF VENDOR A. 1521. Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact. Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.  OBLIGATIONS OF VENDOR A. 1522. Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the seller is not going to perform the contract in full, he must pay for them at the contract rate. If, however, the buyer has used or disposed of the goods delivered before he knows that the seller is not going to perform his contract in full, the buyer shall not be liable for more than the fair value to him of the goods so received. Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate. Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest. In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject the whole of the goods. The provisions of this article are subject to any usage of trade, special agreement, or course of dealing between the parties.  OBLIGATIONS OF VENDOR A. 1522. Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the seller is not going to perform the contract in full, he must pay for them at the contract rate. If, however, the buyer has used or disposed of the goods delivered before he knows that the seller is not going to perform his contract in full, the buyer shall not be liable for more than the fair value to him of the goods so received.  OBLIGATIONS OF VENDOR A. 1522. Situation: Seller delivers LESS than what was sold Buyer’s rights/actions: Reject the entire delivery Accept the goods delivered and pay the contract price [IF buyer knows that the seller will not deliver/perform in full If the buyer used or disposed the insufficient goods delivered WITHIUT knowing that seller will not deliver in full, buyer is liable only for the FV of the goods received  OBLIGATIONS OF VENDOR A. 1522. Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest. In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject the whole of the goods. The provisions of this article are subject to any usage of trade, special agreement, or course of dealing between the parties.  OBLIGATIONS OF VENDOR A. 1522. Situation: seller delivers goods mixed with goods of a different description not included in the contract Buyer’s rights/actions ACCEPT the goods which are in accordance with the contract and REJECT the rest if the subject matter is indivisible, the buyer may reject the whole of the goods. The provisions of this article are subject to any usage of trade, special agreement, or course of dealing between the parties.  OBLIGATIONS OF VENDOR A. 1523. Where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of the goods to the buyer, except in the cases provided for in article 1503, first, second and third paragraphs, or unless a contrary intent appears.  OBLIGATIONS OF VENDOR A. 1523. Delivery to carrier for delivery to buyer = delivery to buyer EXC: exceptions discussed in Article 1503  OBLIGATIONS OF VENDOR A. 1523. Unless otherwise authorized by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the other circumstances of the case. If the seller omit so to do, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages.  OBLIGATIONS OF VENDOR A. 1523. Obligation: enter into REASONABLE contracts with the carrier on behalf of the buyer, taking into account nature of goods and other circumstances EXCEPTION: if buyer authorized other contract Effect if seller did not enter into reasonable contracts AND the goods are lost while in transit: buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages.  OBLIGATIONS OF VENDOR A. 1523. Unless otherwise agreed, where goods are sent by the seller to the buyer under circumstances in which the seller knows or ought to know that it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their transit, and, if the seller fails to do so, the goods shall be deemed to be at his risk during such transit.  OBLIGATIONS OF VENDOR A. 1524. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him the price, or if no period for the payment has been fixed in the contract. If a period is fixed, vendor should deliver even if price was not yet paid.  OBLIGATIONS OF VENDOR A. 1525. The seller of goods is deemed to be an unpaid seller within the meaning of this Title: (1) When the whole of the price has not been paid or tendered; (2) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise. In articles 1525 to 1535 the term "seller" includes an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price, or any other person who is in the position of a seller.  OBLIGATIONS OF VENDOR A. 1525 When is a seller considered unpaid: (1) When the whole of the price has not been paid or tendered; (2) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise. In articles 1525 to 1535 the term "seller" includes an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price, or any other person who is in the position of a seller.  LIEN A. 1526. Subject to the provisions of this Title, notwithstanding that the ownership in the goods may have passed to the buyer, the unpaid seller of goods, as such, has: (1) A lien on the goods or right to retain them for the price while he is in possession of them; (2) In case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them; (3) A right of resale as limited by this Title; (4) A right to rescind the sale as likewise limited by this Title. Where the ownership in the goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies a right of withholding delivery similar to and coextensive with his rights of lien and stoppage in transitu where the ownership has passed to the buyer.  LIEN A. 1526. Rights of unpaid seller: (even if ownership already passed to the buyer) (1) A lien on the goods or right to retain them for the price while he is in possession of them;  LIEN A. 1527. Subject to the provisions of this Title, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely: (1) Where the goods have been sold without any stipulation as to credit; (2) Where the goods have been sold on credit, but the term of credit has expired; (3) Where the buyer becomes insolvent.  LIEN A. 1528. Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstances as to show an intent to waive the lien or right of retention.  LIEN A. 1529. The unpaid seller of goods loses his lien thereon: (1) When he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the ownership in the goods or the right to the possession thereof; (2) When the buyer or his agent lawfully obtains possession of the goods; (3) By waiver thereof.  LIEN A. 1526. Rights of unpaid seller: (even if ownership already passed to the buyer) (2) In case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them;  STOPPAGE IN TRANSITU A. 1530. Subject to the provisions of this Title, when the buyer of goods is or becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transitu, that is to say, he may resume possession of the goods at any time while they are in transit, and he will then become entitled to the same rights in regard to the goods as he would have had if he had never parted with the possession.  STOPPAGE IN TRANSITU A. 1531. Goods are in transit within the meaning of the preceding article: (1) From the time when they are delivered to a carrier by land, water, or air, or other bailee for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee; (2) If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.  STOPPAGE IN TRANSITU A. 1531. Goods are no longer in transit within the meaning of the preceding article: (1) If the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival at the appointed destination; (2) If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in possession of them as bailee for the buyer or his agent; and it is immaterial that further destination for the goods may have been indicated by the buyer; (3) If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf.  STOPPAGE IN TRANSITU A. 1531. If part delivery of the goods has been made to the buyer, or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been under such circumstances as to show an agreement with the buyer to give up possession of the whole of the goods.  STOPPAGE IN TRANSITU A. 1532. The unpaid seller may exercise his right of stoppage in transitu either by obtaining actual possession of the goods or by giving notice of his claim to the carrier or other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may prevent a delivery to the buyer.  STOPPAGE IN TRANSITU A. 1532. How to exercise right of stoppage in transit: by obtaining actual possession of the goods or by giving notice of his claim to the carrier or other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may prevent a delivery to the buyer.  STOPPAGE IN TRANSITU A. 1532. When notice of stoppage in transitu is given by the seller to the carrier, or other bailee in possession of the goods, he must redeliver the goods to, or according to the directions of, the seller. The expenses of such delivery must be borne by the seller. XXX  RIGHT OF RESALE A. 1526. Subject to the provisions of this Title, notwithstanding that the ownership in the goods may have passed to the buyer, the unpaid seller of goods, as such, has: (3) A right of resale as limited by this Title;  RIGHT OF RESALE A. 1533. when the right of resale may be exercised (3) A right of resale as limited by this Title; If the seller has a right of lien or right to stop the goods in transit Goods are perishable in nature Right to resell is expressly reserved Where the buyer delays in payment of the price for an unreasonable time  RIGHT OF RESALE A. 1533. when the right of resale may be exercised (3) A right of resale as limited by this Title; If seller sells for less than the price, seller may sue the buyer for the difference New buyer acquires better title to the goods than the old buyer Notice to the old buyer is prudent, except if goods are perishable  LIEN A. 1526. (4) A right to rescind the sale as likewise limited by this Title. IF seller has right of lien or right to stay the goods in transit Where the right to rescind is expressly reserved in case the buyer should make a default When the buyer delays in the payment of the price for an unreasonable time No notice to the buyer is required