Part IV - Obligations of the Vendor (Delivery of the Thing Sold) Flashcards
What is the obligation of the seller?
The vendor is bound to transfer the ownership and deliver, as well as warrant the thing which is the object of the sale.
When is an object of a contract of sale considered as delivered?
What are other four instances when the object is considered to be delivered?
Generally, an object of a contract of sale is considered as delivered if it is placed in the control and possession of the buyer.
However, there are also instances where the object is considered to be delivered, such as:
1.) When made through a public instrument, the execution of the public instrument is considered to be a delivery, unless otherwise stated.
2.) With regards to movable properties, the delivery is also made through the delivery of the keys of the place or depository to where the object is kept.
3.) Mere consent or agreement of the parties is also considered as a delivery if the object cannot be transferred to the possession of the buyer at the time of the sale, or if the buyer already had the object in his possession.
4.) With regards to intangible properties, the execution of public instrument will constitute delivery, otherwise, the placing of the titles of ownership in the possession of the buyer or the use of the buyer of his rights with the seller’s consent is also understood as delivery.
What is the rule when the goods are delivered to the buyer “on sale or return” basis?
How about “trial” basis?
In a sale of “on sale or return”, when the goods are delivered to the buyer, the ownership passes to the buyer. But the ownership of the thing returns back to 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.
In a trial basis on the other hand, the ownership is only passed on to the buyer when:
1.) He signifies his approval or acceptance to the seller or does any act adopting the transaction.
2.) He does not signify his approval or acceptance, 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.
Can a seller reserve the right of possession or ownership of the specific goods until certain conditions have been fulfilled?
Yes.
The seller, by the terms of the contract, may reserve the right of possession or ownership of specific 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.
What is the rule with regards to the shipping of goods with a bill of lading?
The seller thereby reserves the ownership of the goods when the bill of lading is deliverable to:
1.) The seller or his agent
2.) To the order of the seller or his agent
3.) To the order of the buyer or his agent but possession of the bill of lading is retained by the seller or his agent
What is the rule with regards to who bears the risk of the goods?
Generally, the goods remains 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:
1.) When the goods are already delivered to the buyer but the seller retained the ownership of the goods merely to secure performance by the buyer of his obligations, the goods are at the buyer’s’ risk from the time of such delivery.
3.2.) 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.
What is the rule regarding the selling of goods by a person who is not the owner of such goods?
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.
One notable exception to this is when the goods is purchased in a merchant’s store, or in fairs, or markets.
What is the rule when the seller has a voidable title of the goods?
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.
Is the vendor bound to deliver the thing sold if the vendee has not paid yet?
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.
What are the rights of an unpaid seller with regards to the thing sold (notwithstanding that the ownership has already passed to the buyer)?
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
4.) A right to rescind the sale
What is the rule when the buyer of goods is or becomes insolvent?
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 transit. Meaning to say, the seller 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 of the possession.
When does the unpaid seller of goods lose his lien?
(a) 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
(b) When the buyer or his agent lawfully obtains possession of the goods
(c) By waiver thereof
What are the rules on double sale?
If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who is in good faith was first in the posession, and in the absence thereof, to the person who presents the oldest title, provided there is good faith.
What are the requisites for the double sale rule to apply?
(a) The two or more sales transactions must be valid.
(b) The two or more sales transactions must pertain to the same subject matter
(c) The two or more buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests
(d) The two or more buyers at odds over the rightful ownership of the subject matter must have bought from the very same seller
When should the double sale rule not apply?
(a) Not applicable if one of the sales is void.
(b) Not applicable for contracts to sell.
(c) Not applicable if first sale is the subject matter and the second sale is the redemption to the subject matter
