Week 3 - Covenants - Obligations of Seller Flashcards
What are the principal obligations of the Vendor?
The principal obligations of a vendor are:
- To transfer the ownership of the determinate thing sold (Art. 1458);
- To deliver the thing, with its accessions and accessories, if any, in the condition in which they were upon the perfection of the contract (Art. 1537);
- To warrant against eviction nd against hidden defects (Arts. 1495, 1547);
- To take care of the thing, pending delivery, with proper diligence (see Art. 1163); and
- To pay for the expenses of the deed of sale, unless there is a stipulation to the contrary. (Art. 1487).
What is the standard of care required of the obligor under the law?
According to Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a famiy, unless the law or the stipulation of the parties requires anoother standard of care.
When will the rights of the creditor to the fruits of the thing begin?
According to Art. 1164. The creditor has a right to the fruits of a thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him.
When will the debtor lose the right to make use of the period?
Art. 1198. The debtor shall lose every right to make use of the period:
(1) when after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt;
(2) when he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period; and
(5) When the debtor attempts to abscond.
Art. 1458 NCC. By the contract of sale …
Art. 1458. By the contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
What is the requirement as to the vendor vis-a-vis the thing sold?
Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.
When will the ownership of the thing sold transfer to the vendee?
Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.
May the vendor reserve the ownership of the thing despite delivery?
Yes. Art. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price.
As a general rule, who shall bear the expenses of the execution and registration of the sale?
The vendor. Art. 1487 provides: The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary.
Art. 1495. The vendor is bound to […], as well as […] the thing which is the object of the sale.
Art. 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.
Art. 1496. The ownership of the thing sold is acquired by the vendee from […] in any of the ways specified in Articles […], or in any other manner […].
Art. 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.
What are the requisites for delivery?
Requisites:
a. Identity – between what must be delivered and what is actually delivered
b. Integrity – in a condition suitable for enjoyment
c. Intentional
When is a thing sold understood as delivered?
A thing sold is understood as delivered when:
(1) it is placed in the control and possession of the vendee [Art. 1497];
(2) execution of public instrument if sale is made through a public instrument if the contrary does not appear [Art. 1498];
(3) delivery of the keys of the place or depositary, with regard to movable property [Art. 1498];
(4) mere consent or agreement of the contracting parties, if it cannot be delivered at the time of sale or if property is already with the vendee [Art. 1499];
(5) constitutum possessorium [Art. 1500];
(6) with respect to incorporeal property, execution of public instrument or if not possible, placing the titles of ownership in the possession of the vendee, or use by the vendee of his rights with the vendor’s consent [Art. 1501].
Is ownership of the thing sold transferred by payment?
No. Ownership of the things is transferred by delivery, and not by mere payment. (Art. 1477). However, the parties may stipulate that despite the deliverym the ownership of the thing shall remain with the seller until the purchaser has fully paid the price. (Art. 1503).
What are the two kinds of delivery?
Actual and constructive delivery (Art. 1477)
What is constructive delivery?
Constructive delivery is the general term comprehending all those acts which , although not conferring physical possession of the thing, have been held by construction of law equivalent to acts of delivery.
Is payment of purchase price essential to the transfer of ownership?
No. Payment of purchase price is not essential to the transfer of ownership, as long as the property sold has been delivered. Nonpayment only creates a right to demand payment or to rescind the contract or to criminal prosecution in case of bouncing checks
Who shall bear the expenses for the execution and registration of the sale?
The vendor, unless there is a stipulation to the contrary (Art. 1487NCC)
Is ownership by the vendor necessary at the time of the perfection of the contract?
No. What is necessary is only that the vendor has the right to transfer the ownership of the contract. Art. 1459 states “The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.”
Art. 1497. The thing sold shall be understood as delivered, when […].
Art. 1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee.
Art. 1498. When the sale is made through a public instrument, the execution thereof shall be […] which is the object of the contract, if from the deed […].
With regard to movable property, its delivery may also be made by the […] where it is stored or kept.
Art. 1498. 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.
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.
Art. 1499. The delivery of movable property may likewise be made by […], if the thing sold […] to the possession of the vendee at the time of the sale, or if the latter already […] for any reason.
Art. 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 reason.
Art. 1500. There may also be tradition […].
Art. 1500. There may also be tradition constitutum possessorium.
What is constitutum possessorium?
Constitutum possessorium is the opposite of traditio brevi manu.
It takes place when the vendor continues in possession of the property sold not as owner but in some other capacity as for example, when the vendor stays as a tenant of the vendee or as a depositary of the vendee.