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NATURE AND FORM OF THE CONTRACT
Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the 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.
(1) ‘Sale’ Defined
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. (See Art. 1458, Civil Code).
(2) Historical Notes
Under Roman Law, a sale was termed avenditio. Today,
the French refer to the contract as a venta, while the Spaniards call it a venta. The definition of the contract of sale in
Art. 1458 is taken from Art. 1445 of the Spanish Civil Code,
except that under said Spanish Code, the obligation of the
vendor was merely to “deliver” the thing sold, so that even
if the seller was not the owner, he might still validly sell,
subject to the warranty to maintain the buyer in the legal and
peaceful possession of the thing sold. The Civil Code requires
1 Art. 1458 CIVIL CODE OF THE PHILIPPINES not only delivery but also the transfer of the ownership of the
thing sold. (Report of the Code Commission, p. 141). However,
the vendor need not be the owner at the time the sale is
perfected. It is sufficient that he is the owner at the time the
thing sold is delivered. (See Art. 1459, Civil Code).
Query: Suppose Art. 1458 did not specify that the seller
must transfer the ownership of the object, does he still have
Answer: Yes, for after all, this transfer of ownership is
clearly the fundamental aim of the contract. A buyer is not
interested in a mere physical transfer: he is after ownership.
(See 3 Castan 12-13).
(3) Essential Characteristics of the Contract of Sale
(a) Consensual (as distinguished from real), because the
contract is perfected by mere consent.
(NOTE: A real contract is one perfected by delivery,
e.g., the contract of deposit or commodatum.) (b) Bilateral reciprocal, because both parties are bound by
obligations dependent upon each other. (c) Onerous, because to acquire the rights, valuable consideration must be given. (d) Commutative, as a rule, because the values exchanged
are almost equivalent to each other.
(NOTE: By way of exception, some contracts of
sale are aleatory, i.e., what one receives may in time
be greater or smaller than what he has given. Example:
The sale of a genuine sweepstakes ticket.) (e) Principal (as distinguished from an accessory contract),
because for the contract of sale to validly exist, there
is no necessity for it to depend upon the existence of
another valid contract. (Examples of accessory contracts
are those of pledge and mortgage.) (f) Nominate (as distinguished from an innominate contract)
because the Code refers to it by a special designation or
name, i.e., the contract of sale.
2 CIVIL CODE OF THE PHILIPPINES Art. 1458 (4) Elements of the Contract of Sale
(a) Essential elements (those without which there can be no
1) Consent or meeting of the minds, i.e., consent to
transfer ownership in exchange for the price. 2) Determinate subject matter (generally, there is no
sale of generic thing; moreover, if the parties differ as to the object, there can be no meeting of the
minds). 3) Price certain in money or its equivalent (this is the
cause or consideration). (The price need not be in
money.) (Republic v. Phil. Resources Dev. Corp.,
L-10414, Jan. 31, 1958).
Aguinaldo v. Esteban
GR 27289, Apr. 15, 1985
A contract of sale of property, without consideration, and executed by a person who is of low
intelligence, illiterate, and who could not sign his
name or affix his thumbmark, is void.
Leabres v. CA
GR 41837, Dec. 12, 1986
A receipt which merely acknowledges the sum
of P1,000, without any agreement as to the total
purchase price of the land supposedly purchased,
nor to the monthly installment to be paid by the
buyer lacks the requisites of a valid contract sale,
namely: (a) consent or meeting of the minds of the
parties; (b) determinate subject matter; (c) price
certain in money or its equivalent, and, therefore,
the “sale” is not valid nor enforceable. (b) Natural elements (those which are inherent in the contract, and which in the absence of any contrary provision,
are deemed to exist in the contract).
3 Art. 1458 (c) CIVIL CODE OF THE PHILIPPINES 1) warranty against eviction (deprivation of the property bought) 2) warranty against hidden defects Accidental elements (those which may be present or
absent in the stipulation, such as the place or time of
payment, or the presence of conditions). (5) Stages in the Contract of Sale
(a) generation or negotiation (b) perfection –– meeting of the minds (c) consummation –– when the object is delivered and the
price is paid (6) Kinds of Sales
(a) (b) (c) As to the nature of the subject matter:
1) sale of real property 2) sale of personal property As to the value of the things exchanged:
1) commutative sale 2) aleatory sale As to whether the object is tangible or intangible:
1) sale of property (tangible or corporeal) 2) sale of a right (assignment of a right or a credit,
or some other intangibles such as a copyright, a
trademark, or goodwill)
(NOTE: If the object is tangible, it is called
a chose in possession; if the object is intangible, as
the case of a right, it is a chose in action.)
[NOTE: The term “goods” as used in the Uniform
Sales Act does not ordinarily include choses in action (things in action). Neither does the term include
money. (See Comment of the Code Commission).]
4 CIVIL CODE OF THE PHILIPPINES Art. 1458 [NOTE: There can be a sale of “foreign exchange,” and sale is consummated upon payment to
the creditor by the bank concerned of the amount
in foreign currency authorized to be paid under
the letter of credit. The exchange tax is, therefore,
determined as of the date of such payment or delivery. (Marsman and Co., Inc. v. Central Bank, et al.,
L-13945, May 31, 1960). However, the sale of said
foreign exchange is perfected as of the moment the
Bangko Sentral authorizes the purchase, even if
the foreign bank has not yet honored the letter of
credit. The margin fee — at the time this was still
enforced — accrues as of this moment of perfection.
(Pacific Oxygen and Acetylene Co. v. Central Bank,
L-21881, Mar. 1, 1968, cited in the comments under
(d) (e) (f) As to the validity or defect of the transaction:
1) valid sale 2) rescissible sale 3) voidable sale 4) unenforceable sale 5) void sale As to the legality of the object:
1) sale of a licit object 2) sale of an illicit object As to the presence or absence of conditions:
1) absolute sale (no condition) 2) conditional sale (as when there is a sale with a pacto
de retro, a right to repurchase or redeem; or when
there are suspensive conditions, or when the things
sold merely possess a potential existence, such as
the sale of the future harvest of a designated parcel of land; or when, for example, all the personal
properties in an army depot would be sold “except
all combat materials” that may be found therein.
5 Art. 1458 CIVIL CODE OF THE PHILIPPINES Such a stipulation is necessarily valid and, therefore,
such combat materials should be excluded from sale.
(Celestino v. Aud. Gen., L-12183, May 29, 1959).
People’s Homesite v. Court of Appeals
L-61623, Dec. 26, 1984
If subdivision lot is sold to a buyer on condition
that higher authorities would approve the same,
there is as yet no perfected sale.
Zambales v. Court of Appeals
GR 54070, Feb. 28, 1983
If during the 5-year period when a homestead
cannot be sold, it is promised to be sold (in a compromise agreement), will this promise be regarded
HELD: The promise will be void
sale is actually made after the 5-year
even if the Minister (now Secretary) of
approves the same after the lapse of
period. even if the
said 5-year Almendra v. IAC
GR 76111, Nov. 21, 1991
FACTS: Petitioners contend principally that
the appellate court erred in having sanctioned the
sale of particular portions of yet undivided real
HELD: While petitioners’ contention is basically correct, there is, however, no valid, legal and
convincing reason for nullifying the questioned deeds
of sale. Petitioner had not presented any strong
proof to override the evidentiary value of the duly
notarized deed of sale. Moreover, the testimony of
the lawyer who notarized the deeds of sale that he
saw not only Aleja (the mother) signing and affixing
her thumbmark on the questioned deeds but also
Angeles (one of the children) and Aleja “counting
6 CIVIL CODE OF THE PHILIPPINES Art. 1458 the money between them,” deserves more credence
that the self-serving allegations of the petitioners.
Such testimony is admissible as evidence without
further proof of the due execution of the deeds in
question and is conclusive as to the truthfulness of
their contents in the absence of clear and convincing
evidence to the contrary. The petitioners’ allegation
that the deeds of sale were obtained thru fraud,
undue influence and misrepresentation and that
there was a defect in the consent of Aleja in the
execution of the documents because she was then
residing with Angeles, had not been fully substantiated. They failed to show that the uniform price
of P2,000 in all the sales was grossly inadequate.
The sales were effected between a mother and two
of her children in which case filial more must be
taken into account. The unquestionability of the due
execution of the deeds of sale notwithstanding, the
Court may not put an imprimatur on the instrinsic
validity of all the cases. The Aug. 10, 1973 sale to
Angeles of one-half portion of the conjugal property
may only be considered valid as a sale of Aleja’s
one-half interest therein. Aleja could not have sold
the particular hilly portion specified in the deed
of sale in the absence of proof that the conjugal
partnership property had been partitioned after the
death of Santiago (the husband of Aleja). Before
such partition, Aleja could not claim title to any
definite portion of the property for all she had was
an ideal or abstract quota or proportionate share in
the entire property. The sale of the one-half portion
of land covered by Tax Declaration 27190 is valid
because said property is paraphernal. As regards
the sale of property covered by Tax Declaration
115009, Aleja could not have intended the sale of
the whole property, since said property had been
subdivided. She could exercise her right of ownership only over Lot 6366 which was unconditionally
adjudicated to her in said case. Lot 6325 was given
to Aleja subject to whatever may be the rights of
her son Magdaleno Ceno. The sale is subject to the
7 Art. 1458 CIVIL CODE OF THE PHILIPPINES condition stated above. Hence, the rights of Ceno
are amply protected. The rule on caveat emptor
Sps. Vivencio Babasa and Elena Cantos
Babasa v. CA, et al.
GR 124045, May 21, 1993
A deed of sale is absolute in nature although
denominated a “conditional sale” absent such stipulations. In such cases, ownership of the thing sold
passes to the vendee upon the constructive or actual
Heirs of Romana Ingjugtiro, et al. v.
Spouses Leon V. Casals & Lilia
C. Casals, et al.
GR 134718, Aug. 20, 2001
It is essential that the vendors be the owners of
the property sold, otherwise they cannot dispose that
which does not belong to them. Nemo dat quod non
habet (“No one can give more than what he has”).
(g) (h) (i) As to whether wholesale or retail:
1) Wholesale, if to be resold for a profit the goods being
unaltered when resold, the quantity being large. 2) Retail, if otherwise (also if sold to tailors). (Sy Kiong
v. Sarmiento, L-2934, Nov. 29, 1951). As to the proximate inducement for the sale:
1) sale by description 2) sale by sample 3) sale by description and sample (Art. 1481, Civil
Code). As to when the price is tendered:
1) cash sale 2) sale on the installment plan
8 CIVIL CODE OF THE PHILIPPINES Art. 1458 Ortigas and Co. v. Herrera
GR 36098, Jan. 21, 1983
If a lot owner in a subdivision sues for a refund
of a certain sum for having complied with certain
conditions imposed upon him, the action is one for
specific performance incapable of pecuniary estimation (and, therefore, within the jurisdiction of the
Regional Trial Court). The suit cannot be regarded
as merely one for a sum of money. If no conditions
had been imposed, the action would have been
merely for a sum of money and, therefore, capable
of pecuniary estimation, there being no specific fact
or fulfillment of a condition to be proved.
(7) ‘Sale’ Distinguished from ‘Dation in Payment’ (Adjudicacion en Pago, or Dacion en Pago or Dacion en
SALE DATION IN PAYMENT 1. There is no pre-existing 1. There is a pre-existing
2. Gives rise to obligations. 2. Extinguishes obligations.
3. The cause or consid- 3. The cause or consideration
eration here is the price,
here, from the viewpoint
from the viewpoint of the
of the person offering the
seller; or the obtaining
dation in payment, is the
of the object, from the
extinguishing of his debt;
viewpoint of the buyer.
from the viewpoint of the
creditor, it is the acquisition of the object offered in
lieu of the original credit.
4. There is greater freedom 4. There is less freedom in
in the determination of
determining the price.
5. The giving of the price 5. The giving of the object in
may generally end the
lieu of the credit may exobligation of the buyer.
tinguish completely or partially the credit (depending
on the agreement).
9 Art. 1458 CIVIL CODE OF THE PHILIPPINES (NOTE: Example of dacion en pago: I owe Maria P1
million. But I ask her if she is willing to accept my solid gold
Rolex watch, instead of the money. If Maria agrees, my debt
will be extinguished. Please observe that in this example, although what has happened is a dation in payment, it is as if
I sold my watch for P1 millon. Hence, we have to distinguish
between the two kinds of transactions.)
(8) Bar Question
A has sold a baby grand piano to B, by private instrument for P500,000. In that contract of sale, which is the
object, and which is the cause?
ANS.: There are at least two viewpoints here, the latter
of which appears preferable. First view –– The object (subject
matter) of the sale is the piano, while the cause (consideration) is P500,000 (or, as one authority puts it, the giving of
the P500,000, at least insofar as the seller A is concerned).
Insofar as the buyer B is concerned, the object is the
P500,000, while the cause (the consideration for which he
parted with his money) is the piano (or, as the same authority puts it, the giving of the piano).
Second view –– Insofar as both the seller and the buyer
are concerned, there is only one subject matter, namely, the
piano. The cause or consideration for the seller is the price
paid; for the buyer, it is the delivery to him of the piano.
(9) ‘Contract of Sale’ Distinguished from ‘Contract to
(a) In a Contract of Sale, the non-payment of price is a
resolutory condition, i.e., the contract of sale may by
such occurrence put an end to a transaction that once
upon a time existed; in a Contract to Sell, the payment
in full of the price is a positive suspensive condition.
Hence, if the price is not paid, it is as if the obligation
of the seller to deliver and to transfer ownership never
became effective and binding. (b) In the first, title over the property generally passes to
the buyer upon delivery; in the second, ownership is
10 CIVIL CODE OF THE PHILIPPINES Art. 1458 retained by the seller, regardless of delivery and is not
to pass until full payment of the price.
(c) In the first, after delivery has been made, the seller has
lost ownership and cannot recover it unless the contract
is resolved or rescinded; in the second, since the seller
retains ownership, despite delivery, he is enforcing and
not rescinding the contract if he seeks to oust the buyer
for failure to pay. (See Santos v. Santos, C.A. 47 O.G. 6372
and Manuel v. Rodriguez, L-13435, Jul. 27, 1960). (10) ‘Sale’ Distinguished from ‘Assignment of Property in
Favor of Creditors’ (Cession or Cesion de Bienes)
Sale differs from cession in much the same way as sale,
differs from dation in payment. Moreover, in cession the assignee (creditor) does not acquire ownership over the things
assigned, but only the right to sell said things. From the
proceeds of such sale, the creditors are to be paid what is
(NOTE: The concept of cession is found in Art. 1255 of
the Civil Code, which provides that “the debtor may cede or
assign his property to his creditors in payment of his debts.
This cession, unless there is a stipulation to the contrary,
shall only release the debtor from responsibility of the net
proceeds of the thing assigned. The agreements which, on the
effect of the cession, are made between the debtor and his
creditors shall be governed by special laws.”)
[NOTE: Manresa defines cession as that which “consists in
the abandonment of all the property of the debtor for the benefit
of his creditors in order that the latter may apply the proceeds
thereof to the satisfaction of their credits.” (8 Manresa 321).]
[NOTE: Dation in payment distinguished from Cession.]
DATION IN PAYMENT CESSION (1) One creditor is suffi- (1) There must be two or more
11 Art. 1458 CIVIL CODE OF THE PHILIPPINES (2) Not all properties of the (2) All the debtor’s properties
debtor are conveyed.
(3) Debtor may be solvent or (3) Cession takes place only
if the debtor is insolvent.
(4) The creditor becomes (4) The creditors do not bethe owner of the thing
come owners of the thing
(11) ‘Sale’ Distinguished from a ‘Loan’
In a loan, the amount is substantially smaller than the
value of the security given. (Facundo, et al., CA-GR 833-R,
Nov. 13, 1947). If a person, however, borrows a sum of money,
and with it purchases in his own name a car, said purchaser
would really be considered the buyer, and not the person
who lent the money to him. (Collector of Int. Rev. v. Favis,
L-11651, May 30, 1960).
(12) ‘Sale’ Distinguished from ‘Lease’
In a sale, the seller transfers ownership; in a lease, the
lessor or landlord transfers merely the temporary possession
and use of the property.
(13) Kinds of Extrajudicial Foreclosure Sale
1. an ordinary execution sale is governed by the pertinent
provisions of Rule 39 of the Rules of Court; 2. a judicial foreclosure sale is governed by Rule 68 of the
Rules of Court; 3. an extrajudicial foreclosure sale is governed by Act 3135,
as amended by Act 4118, otherwise known as “An Act
to Regulate the Sale of Property Under Special Powers
Inserted In or Annexed to Real Estate Mortgages.”
A different set of law applies to each class of sale
aforementioned. (DBP v. CA & Emerald Resort Hotel
Corp., GR 125838, Jun. 10, 2003).
12 CIVIL CODE OF THE PHILIPPINES Art. 1459 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.
(1) Lawfulness of the Object and Right to Tansfer Ownership
Two rules are given here: (2) (a) The object must be LICIT. (b) The vendor must have the RIGHT to transfer OWNERSHIP at the time the object is delivered. Licit Object
(a) The word licit means lawful, i.e., within the commerce
of man. (b) Things may be illicit:
1) per se (of its nature)
Example: Sale of human flesh for human
pleasure. 2) per accidens (made illegal by provision of the
Examples: Sale of land to an alien after the
effective date of the Constitution; sale of illegal
lottery tickets. (c) If the object of the sale is illicit, the contract is null and
void (Art. 1409), and cannot, therefore...
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- Fall '16