Define contract of sale.
1. Sale is a contract where one party (seller or vendor) obligates himself to transfer the ownership of and to deliver a determinate thing, while the other party (buyer or vendee) obligates himself to pay for said thing a price certain in money or its equivalent (NCC, Art. 1458)
The perfection of the contract of sale gives rise to two sets of obligations. What are these two sets of obligations? Explain
2. The perfection of the contract of sale gives rise to two sets of obligations. These obligations are to transfer the ownership of and to deliver a determinate thing as to the seller or vendor and to pay for said thing a price certain in money or its equivalent as to the buyer or vendee (Art. 1458, NCC).
What are the elements of a contract of sale? Explain each element.
3. Elements of a contract of sale [as to its Essential Elements] are:
a. Consent – meeting of the minds to transfer ownership in exchange for the price;
b. Determinate subject matter – determinate thing which is the object of the contract; and
c. Consideration – price certain in money or its equivalent.
Distinguish between a conditional sale, on the one hand, and an absolute sale, on the other hand.
4. In conditional sale ownership remains with the vendor and does not pass to the vendee until full payment of the purchase price; the full payment of the purchase price partakes of a suspensive condition, and non-fulfillment of the condition prevents the obligation to sell from arising; while sale is absolute when there is no stipulation in the contract that title to the property remains with the seller until full payment of the purchase price [Uy vs Valbueco, G.R. No. 179594].
In conditional sale, the seller is granted the right to unilaterally rescind the contract predicated on the fulfillment or nonfulfillment, as the case may be, of the prescribed condition [Romero vs CA, G.R. No. 107207]; whereas in an absolute sale, the title to the property is not reserved to the seller or if the seller is not granted the right to rescind the contract based on the fulfillment or non-fulfillment, as the case may be, of the prescribed condition.
Distinguish between a contract of sale and a contract to sell.
5. A contract to sell has been defined as "a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price." In a contract to sell, "ownership is retained by the seller and is not to pass until the full payment of the price ." It is "commonly entered into so as to protect the seller against a buyer who intends to buy the property in installments by withholding ownership over the property until the buyer effects full payment therefor [Sps Tumibay vs Sps Lopez, G.R. No.171692].
An agreement which stipulates that the seller shall execute a deed of sale only upon or after the payment of the purchase price is a contract to sell, not a contract of sale.
In a contract of sale, the vendor has lost ownership of the thing sold and cannot recover it, unless the contract of sale is rescinded and set aside. In a contract to sell, however, the vendor remains the owner for as long as the vendee has not complied fully with the condition of paying the purchase price. If the vendor should eject the vendee for failure to meet the condition precedent, he is enforcing the contract and not rescinding it [Diego vs Diego, G.R. No. 179965].
Explain: Sale is a form of “title” not a “mode”
6. Sale is a form of “title” not a “mode” means that “he contract of sale by itself, is not a mode of acquiring ownership (Art. 712, New Civil Code). The contract transfers no real rights; it merely causes certain obligations to arise.
A transferred to B a parcel of land for the price of 1million pesos. It was agreed in the contract that B will pay 400,000 in cash and that for the remaining amount, he will convey his old Ford Ranger Wildtrak, now valued at 600,000. What kind of contract is this?
7. The different between sale and barter is that it is a contract of sale when intention is not clear, and the value of thing is equal or less than amount of money; while in barter, when the intention is not clear, and the value of thing is more than amount of money [Art. 1468, NCC].
In the given problem; the intention of the parties could not be ascertained whether it is a contract of sale or that of a barter; hence the reference is the value of the thing and the amount of money. Ford Ranger Wildtrak valued 600K while the amount of money is 400K; hence the value of the thing (Ford Ranger is more than the value of money.
Thus, it is respectfully submitted that the contract is that of a barter. [Philippine Operations vs Auditor General, G.R. No. L-3659]
A granted B the exclusive right to sell his assembled bicycles in Butuan City, the price is payable within 60 days from delivery, and promising B a commission of 20% on all sales. After the delivery of the bicycles to B, but before he could sell any of the bicycles, B’s store was completely burned without his fault, together with all of the bicycles. Must B pay A for his lost bicycles. Why?
8. In a given case, the contract entered into by A and B is a contract to sell. In a contract to sell, the vendor remains the owner for as long as the vendee has not complied fully with the condition of paying the purchase price. The payment of the price is a positive suspensive condition. Failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.
Since B did not sold anything with respect to the bicycles and the same were burned without his fault. It is submitted that B has no liabilities whatsoever because the event of burning B’s store is a fortuitous event; and fortuitous event extinguished obligations. Thus B should NOT pay A for his lost bicycles.
Spouses Kim and Kara wanted to sell their house. They found a prospective buyer Rey. Kara negotiated with Rey for the sale of the property. They agreed on a fair price of 2 million pesos. Rey sent Kara a letter confirming his intention to buy the property. Rey then prepared a deed of sale to be signed by the couple and a manager’s check for 2 million. After receiving the 2 million, Kim signed the Deed of Sale. However, Kara was not able to sign it because she was abroad. On her return she refused to sign the document saying she changed her mind. Kara filed a suit for nullification of the Deed of Sale and for moral and exemplary damages against Rey. Will the suit prosper?
9. Since Kara was the one who negotiated with Rey; yet Kara was not able to sign the Dead of Sale but only his husband. Kara is estopped from assailing the validity of such Dead of Sale. Estoppel arises when one, by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts [PNB vs IAC, G.R. No. 66715].
Therefore; Kara’s suit for nullification of the Deed of Sale and for moral and exemplary damages against Rey will not prosper.
In 1999, Vicente Salavador married Ignacia Avila but had been separated de facto in 2001. Lot was registered under the name of the spouses. Vicente filed a petition for administration and appointment of guardian where he misrepresented that his wife, Ignacia died in 2002 and that he and their minor children were her only heirs.
In March 2004, respondent Spouses Mijares bought the lot thus a new title was issued to them. In December 2005, Ignacia sent a letter demanding the return of her ½ share in the lot. Failing to settle amicably, Ignacia instituted a complaint for Annulment of Sale against Spouses Mijares and Vicente.
The Spouses Mijares claimed that they are purchasers in good faith and that the sale was valid.
What is the status of the sale of the lot to respondent spouses, and should it be annulled in its entirety or only with respect to the share of Ignacia? Were the respondents innocent purchasers for value?
10. In the case at Bar; there is no indication as to the marriage stipulation entered by Vicente Salavador and Ignacia Avila; hence it accordance with the Family Code; such property regime is an absolute community (Article 91, Family Code).
Therefore the status of the sale of the lot to respondent spouses is a null and void and cannot be ratified [Dadis vs Sps De Guzman, G.R. No. 206008,]and should it be annulled in its entirety [Guiang v. CA, G.R. No. 125172].
The respondents cannot be considered buyers in good faith. Art. 124 of the FC categorically requires the consent of both spouses before the conjugal property may be disposed of by sale, mortgage, or other modes of disposition.
The Supreme Court declared in Bautista v. Silva that in order to prove good faith in such a situation, the buyers must show that they inquired not only into the title of the seller but also into the sellers capacity to sell. Thus, the buyers of conjugal property must observe two kinds of requisite diligence, namely: (a) the diligence in verifying the validity of the title covering the property; and (b) the diligence in inquiring into the authority of the transacting spouse to sell conjugal property in behalf of the other spouse [Sps. Aggabao v. Sps. Parulan, G.R. No. 165803].
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