WEEK-7-12 - math PDF

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OBLIGATIONS OF THE VENDEEARTICLE 1582: Principal obligations of the vendee Accept delivery Pay the price of the thing Bear the expenses for execution and registration of sale and putting the goods in a deliverable state if such is the stipulation IF STIPULATED : Vendee is bound to accept delivery an...

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OBLIGATIONS OF THE VENDEE ARTICLE 1582: Principal obligations of the vendee

1.Accept delivery 2.Pay the price of the thing 3.Bear the expenses for execution and registration of sale and putting the goods in a deliverable state if such is the stipulation IF STIPULATED: Vendee is bound to accept delivery and pay the price at time and place stated. OTHERWISE: Vendee is bound to pay at the time and place of delivery. SALE ON CREDIT -Vendor is entitled to its delivery though the price be not first paid. No stipulation: It shall be made wherever the thing might be at the moment the contract was perfected. If only the time for delivery has been fixed, vendee is required to pay even before the thing is delivered to him. Since SALE is a reciprocal obligation, from the moment either party performs his obligation, the other must comply with his part otherwise he will be guilty of delay. ARTICLE 1583 Delivery of goods by installment GENERAL RULE: Buyer is not bound to receive delivery of the goods in installments. Buyer is bound to receive delivery of all the goods at the same time. Buyer has no right to pay the price in installments. EXCEPTION: if stipulated. The contract provides for the delivery of goods by installment and separate price has been agreed upon for each installment: depends in each case whether the breach is divisible or not. Breach affects whole contract: injured party may sue for damages for breach of entire contract if the breach is so material as to affect the contract as a whole. Breach divisible: merely give rise to a claim for compensation for the particular breach but not a right to treat the whole contract as broken. Single price was agreed for all installments: injured party may choose between fulfillment and rescission with payment of damages in either case. Remedy for rescission not available for casual (a question of fact) breaches of contract. ARTICLE 1584 Applicable to goods delivered to buyer which has not previously examined. GENERAL RULE: Buyer is entitled to a fair opportunity to inspect or examine the article tendered to determine whether it conforms to the contract. Ownership of the goods shall be transferred only upon actual delivery subject to a reasonable opportunity of examining them to determine if they are in conformity with the contract. Since the seller is bound to provide the buyer a reasonable opportunity of examining the goods only on request , buyer does not have an absolute right of examination . Opportunity to examine should be availed of within a reasonable time in order that the seller may not suffer undue delay or prejudice. If seller refused to allow opportunity for inspection, buyer may rescind the contract and recover the price or any part if it that he has paid. RELATED RULE: The right of examination or inspection is condition precedent to the transfer of ownership. EXCEPTION: 1.There is a stipulation to the contrary. Seller required to send the goods to buyer by a carrier: delivery of the goods to a carrier for the purpose of transmission to the buyer is deemed to be delivery to the buyer, hence title passes to buyer. The buyer, unless COD, has the right to examine the goods before paying. The right to examine the goods is a condition precedent to paying the price after ownership has passed.

2.If agreed upon or permitted by usage. Even in COD sale, buyer is allowed to examine the goods before payment of the price.

Rejection of goods: when proved to be unsuitable or fail to conform to the contract. The buyer not bound to return them to the seller and is sufficient if he notifies the seller that he refuses to accept them. Option to reject and notice of rejection must be exercised within a reasonable time unless a definite period is fixed. Note: If the right of rejection not exercised within a reasonable time, receipt of goods constitutes acceptance. ARTICLE 1585 What constitutes acceptance Acceptance - assent to delivery as transferring possession and ownership in the goods. Implied acceptance: 1.Buyer does any act inconsistent with seller’s ownership (attempts to sell, uses it, makes alteration) 2.Buyer after lapse of reasonable time, retains the goods without intimating his rejection. Acceptance of the buyer may precede actual delivery. ARTICLE 1586 Acceptance of the goods shall not discharge the seller from liability for breach of warranty GENERAL RULE: Acceptance does not carry with it the additional agreement that the property in the goods shall be taken in full satisfaction of all obligations. Therefore, seller not discharged from liability for breach of promise or warranty. EXCEPTION: If there is a stipulation to the contrary; reasonable time lapsed. In order to hold the seller for breach of promise or warranty, give notice to seller within a reasonable time. Time is counted from the moment the buyer ought to have known the breach. ARTICLE 1587 If buyer’s refusal to accept is justified:

1. He is in the position of a bailee who is in possession of the goods thrust upon him without his assent. He has the obligation to take reasonable care of the goods, but nothing more can be demanded of him.

2. Goods are at seller’s risk. 3. Buyer is not deemed and is not liable as a depositary, unless he volunteers as such. Buyer has no obligation to return the goods to the seller. Seller, after notice that goods will not be accepted, have the burden of taking delivery of said goods. Seller, after notice, failed to take delivery of goods, buyer may resell the goods. (1533 will apply) ARTICLE 1588 Buyer refused to accept without just cause. GENERAL RULE: Delivery of the goods to a carrier is deemed delivery to the buyer. Applies even the buyer refuses to accept the goods without just cause. ARTICLE 1589 Interest for the period between delivery and payment by the vendee

1.Interest stipulated: stipulation may be oral 2.Fruits or income received by the vendee from the thing sold: principle of bilaterality 3.Vendee guilty of default: interest is due from the time of judicial or extrajudicial demand by vendor. Note: Under 1&2 no demand is necessary. Partial payment applies. ARTICLE 1590 When vendee can suspend payment 1.If he is disturbed in the possession or ownership of the thing bought. 2.If he has well-grounded fear that his possession or ownership would be disturbed by a vindicatory action or foreclosure of mortgage. Here, the vendee has no cause of action for rescission before final judgment. But the remedy of buyer is rescission where the disturbance is caused by existence of nonapparent servitude. When vendee cannot suspend payment even if there is disturbance in his possession: 1.Vendor gives security for return of price 2.It has been stipulated that notwithstanding any such contingency the vendee must pay 3.Vendor has cause disturbance to cease 4.If disturbance mere act of trespass 5.Vendee fully paid the price

ARTICLE 1591

When vendor may rescind sale of immovable property When vendor has good reasons to fear the loss of the property and its price. 1.There has been a delivery but the vendee has not yet paid the price. 2.If the subject matter of the sale is going to perish, to think of demanding payment from the vendee is something useless, the only remedy is rescission. Applicable to both cash sales and sales in installments. ARTICLE 1592 When automatic rescission of sale of immovable property is stipulated. GENERAL RULE: Vendor may sue for rescission of the contract should the vendee fail to pay agreed price. EXCEPTION: In the sale of real property, it is subject to the stipulations by the parties. Failure to pay at the time agreed upon will cause rescission. EXCEPTION TO THE EXCEPTION: Vendee may still pay before the demand for rescission has been made by vendor, either judicially or by notarial act, notwithstanding stipulation that failure to pay on the stipulated date ipso facto resolves the sale. Court may extend period for payment, however once a demand for rescission by suit or by notarial act is made, the court may not grant the vendee a new period. When 1592 not applicable: 1.Sales on installments of real property where they have their own terms. 2.Mere promise to sell where title remains with the vendor until full payment of price. Vendee in above cases may no longer pay the price after expiration of time agreed upon although no demand has yet been made upon him by suit or notarial act. ARTICLE 1593 When automatic rescission of sale of movable property stipulated In the case of personal property which has not yet been delivered, the vendor can rescind the contract if the vendee without just cause: 1.Does not accept delivery 2.Does not pay the price unless a credit period for its payment has been stipulated. Mere failure of the vendee to comply with terms of contract does not rescind sale. It is necessary that vendor should take some affirmative action indicating his intention to rescind.

BREACH OF A CONTRACT OF SALE GOODS Article 1594. Actions for breach of the contract of sale of goods shall be governed particularly by the provisions of this Chapter, and as to matters not specifically provided for herein, by other applicable provisions of this Title Article 1595. Where, under a contract of sale, the ownership of the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract of sale, the seller may maintain an action against him for the price of the goods. Where, under a contract of sale, the price is payable on a certain day, irrespective of delivery or of transfer of title and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price although the ownership in the goods has not passed. But it shall be a defense to such an action that the seller at any time before the judgment in such action has manifested an inability to perform the contract of sale on his part or an intention not to perform it. Although the ownership in the goods has not passed, if they cannot readily be resold for a reasonable price, and if the provisions of article 1596, fourth paragraph, are not applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer refuses to receive them, may notify the buyer that the goods are thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer's and may maintain an action for the price. (n) Article 1596. Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for nonacceptance. The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the buyer's breach of contract. Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances showing proximate damage of a different amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept. If, while labor or expense of material amount is necessary on the part of the seller to enable him to fulfill his obligations under the contract of sale, the buyer repudiates the contract or notifies the seller to proceed no further therewith, the buyer shall be liable to the seller for labor performed or expenses made before receiving notice of the buyer's repudiation or countermand. The profit the seller would have made if the contract or the sale had been fully performed shall be considered in awarding the damages. (n) Article 1597. Where the goods have not been delivered to the buyer, and the buyer has repudiated the contract of sale, or has manifested his inability to perform his obligations thereunder, or has committed a breach thereof, the seller may totally rescind the contract of sale by giving notice of his election so to do to the buyer. (n) Article 1598. Where the seller has broken a contract to deliver specific or ascertained goods, a court may, on the application of the buyer, direct that the contract shall be performed specifically, without giving the seller the option of retaining the goods on payment of damages. The judgment or decree may be unconditional, or upon such terms and conditions as to damages, payment of the price and otherwise, as the court may deem just. (n) Article 1599. Where there is a breach of warranty by the seller, the buyer may, at his election: (1) 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; (2) Accept or keep the goods and maintain an action against the seller for damages for the breach of warranty; (3) Refuse to accept the goods, and maintain an action against the seller for damages for the breach of warranty; (4) Rescind the contract of sale and refuse to receive the goods or if the goods have already been received, return them or offer to return them to the seller and recover the price or any part thereof which has been paid. When the buyer has claimed and been granted a remedy in anyone of these ways, no other remedy can thereafter be granted, without prejudice to the provisions of the second paragraph of article 1191.

Where the goods have been delivered to the buyer, he cannot rescind the sale if he knew of the breach of warranty when he accepted the goods without protest, or if he fails to notify the seller within a reasonable time of the election to rescind, or if he fails to return or to offer to return the goods to the seller in substantially as good condition as they were in at the time the ownership was transferred to the buyer. But if deterioration or injury of the goods is due to the breach or warranty, such deterioration or injury shall not prevent the buyer from returning or offering to return the goods to the seller and rescinding the sale. Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to be liable for the price upon returning or offering to return the goods. If the price or any part thereof has already been paid, the seller shall be liable to repay so much thereof as has been paid, concurrently with the return of the goods, or immediately after an offer to return the goods in exchange for repayment of the price. Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to hold the goods as bailee for the seller, but subject to a lien to secure the payment of any portion of the price which has been paid, and with the remedies for the enforcement of such lien allowed to an unpaid seller by article 1526. (5) In the case of breach of warranty of quality, such loss, in the absence of special circumstances showing proximate damage of a greater amount, is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.

SUMMATIVE DISCUSSION OF THE ARTICLES: Actions available to the seller

I .

Action for payment of price

1.Ownership has passed to buyer and he wrongfully neglects or refuses to pay the price; 2.Price is payable on a certain day and buyer did not pay, even if there is no transfer of title; or 3.If the goods can’t be readily be resold for a reasonable price and buyer wrongfully refuses to accept them before ownership has passed.

I I . I I I .

Action for damages Action for rescission

1.When buyer repudiated the contract of sale; 2.When buyer manifested his inability to perform his obligation; and 3.When buyer has committed a breach in the contract.

Actions available to the Buyer

I .

Bring an action for specific performance, if the seller has broken the contract to deliver specific or ascertained goods. I I . In case of breach of warranty by seller:

1.Accept the goods and ask to reduce or extinguish the price 2.Accept goods and maintain an action for damages 3.Refuse to accept the goods and maintain an action for damages 4.Rescind the contract by the return of goods and recover of price When rescission by Buyer not allowed:

1.If buyer accepted the goods knowing of the breach of warranty without protest; 2.If he fails to notify the seller within a reasonable time 3.Fails to return or offer to return the goods to the seller in substantially as good condition as they were in the time of delivery

Rights and Obligation in Rescission

1.Buyer 2.Obliged to return the goods, and cease to be liable for the price;

3.If paid the price or any part thereof, he may recover it; 4.Right to hold the goods as bailee if the seller refuse the return of goods; 5.Right to have a lien of the goods for any portion of price paid, as if he were an unpaid seller. 6.Seller: When seller may rescind before delivery: 7.When the buyer repudiated the contract of sale; 8.When buyer manifested his inability to perform his obligation 9.When buyer committed a breach of the contract.

EXTI NGUI SHMENTOFSALE Caus esofext i ngui s hmentofs al e 1.Samec ausesasal lot herobl i gat i ons; a.Paymentorper f or manceofobl i gat i on; b.Lossoft hi ngdue; c .Condonat i onorr emi s si onofdebt ; d.Conf usi onormer geroft her i ght sofcr edi t oranddebt or ; e.Compensat i on f . Nov at i on g.Annul ment h.Resci s si on i . Ful fi l l mentofar esol ut or ycondi t i on j . Pr escr i pt i on 2.Conv ent i onalr edempt i on 3.LegalRedempt i on

Conv ent i onalRedempt i on( Ri ghtt or edeem orPact oder et r osal e)  I ti st her i ghtwhi c ht hev endorr eser vest ohi msel f ,t or eacqui r et hepr oper t ys ol dpr ovi dedhe r et ur nst ot hev endeet hepr i ceoft hesal e,expensesoft hecont r act ,anyot herl egi t i mat e payment smadet her ef or e,t henecessar yandusef ulexpensesmadeont het hi ngsol dand f ul fi l l s.

WhatCons t i t ut esConv ent i onalRedempt i on? When t he sel l err eser v ed t he r i ghtt or epur chase whathe sol d wi t ht he obl i gat i on t or et ur nt he f ol l owi ng: 1.pur chasepr i ce; 2.expensesoft hecont r act ; 3.l egi t i mat epayment smadebyr easonofsal e; 4.necessar yandusef ulexpensesmadeont het hi ngsol d;and, 5.ot herst i pul at i onswhi chmayhav ebeenagr eedupon. NOTE:r eser vat i onoft her i ghtofr epur chases t ay st hebuy er sel l err el at i onshi pwi t hr espectt osuc h r eser v at i onunt i l i t sper i odexpi r esorwheni ti sex er ci sed.

TheEssenceofaPact oder et r osal e 

Thet i t l eandowner shi poft hepr oper t ysol dt r ansf er si mmedi at el yt ot hev endeear et r o. Howev eri ti ss t i l lsubj ectt ot her esol ut or ycondi t i onofr epur chaseoft hesubj ectpr oper t ybya v endorar et r owi t hi nt heper i odagr eeduponbyt hem,or ,i nt heabsencet her eof ,aspr ovi ded byl aworel sei twoul dv est supont hev endeear et r oabsol ut et i t l eandowner shi pov ert he pr oper t ysol dbyoper at i onofl aw.

Equi t abl eMor t gage  I ti samor t gagewhi ch,al t houghl acki ngi nsomef or mal i t yorot herr equi si t esdemandedbya st at ut e,nev er t hel essr ev eal st hei nt ent i onoft hepar t i est ochar ger ealpr oper t yassecur i t yf or adebt ,andcont ai nsnot hi ngi mposs i bl eorcont r ar yt ol aw( Mat angui hanv .CA) .

Pr esumpt i onofequi t abl emor t gage;r equi si t es : 

Thepar t i esent er edi nt oacont r actdenomi nat edasacont r actofsal e;and



Thei nt ent i onoft hepar t i esi st osecur eanexi st i ngdebtbywayofamor t gage

Wheni saSal ePr esumedt obeEqui t abl eMor t gage ? Thecont r actofsal ewi t hr i ghtt or epur chase( sal ear et r o& shal lbepr esumedt obeanequi t abl e mor t gage,i nanyoft hef ol l owi ngcases: 1.Whent hepr i ceofunderasal ear et r oi sunus ual l yi nadequat e; 2.Whent hesel l err emai nsi nposs essi onasl esseeorot her wi se; 3.Whent heper i odofr edempt i oni sext endedorr enewedunderasepar at ei nst r ument ; 4.Whent hebuy err et ai nspar toft hepur chasep...