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Flashcards in RFBT - SALES Deck (155)
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1
Q

What is sale?

A

Sale is a contract whereby one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay therefor a price certain in money or its equivalent.

2
Q

What are the essential elements of a contract of sale?

A
  1. ) Consent of the contracting parties.
  2. ) Subject Matter which should be a determinate thing.
  3. ) Price certain in money or its equivalent.
3
Q

What are the natural elements of a contract of sale?

A
  1. ) Warranty against eviction

2. ) Warranty against hidden defects and encumbrances.

4
Q

What are accidental elements?

A

These refer to particular stipulations of the parties such as terms, place and other conditions agreed upon.

5
Q

Differentiate contract of sale vs a contract for a piece of work.

A

Contract of sale - vendor in the ordinary course of business manufactures for the general market.

Contract for a piece of work - goods are made specially for the customer upon his special order.

6
Q

Differentiate barter and sale.

A

Sale - cause or consideration is in money.

Barter - cause or consideration is another thing.

7
Q

What happens if the consideration is partly in money and party in another thing? Is it barter or sale? What should be considered in this situation?

A

1.) The contract shall be one of sale or barter depending upon the manifest intention of the parties, such as when they indicate SELLER AND BUYER.

  1. ) If their intention is not clear:
    a. ) It is barter if the value of the thing exceeds the amount given.

b.) It is sale if the money given is MORE THAN OR EQUAL TO the value of the thing given in consideration. (10k worth of goods and 10k cash)

8
Q

Differentiate contract of sale from contract to sell.

A

Contract of sale - title passes upon the delivery of the thing sold, risk of loss is on the buyer.

Contract to sell - title passes upon the full payment agreed upon, risk of loss is on the seller.

9
Q

What are the rules on the object of the contract of sale?

A
  1. ) Requisites of object of a contract of sale:
    a. ) Thing must be within the commerce of men
    b. ) Thing must be licit
    c. ) The thing must be determinate
  2. ) The vendor must have the right to transfer the ownership of the thing at the time that it is delivered.
  3. ) Things having a potential existence may be the object of sale.

4.) The goods which form the subject of a contract of sale may be either:
a.) Existing goods possessed by seller
b.) Goods to be manufactured/raised or acquired after
perfection.

  1. ) The sole owner of a thing may sell an undivided interest therein, making the seller and buyer co-owners of the thing sold.
  2. ) Rules on fungible goods.
10
Q

What is Emptio rei speratae?

A

Emptio rei speratae is the sale of a future thing which must come into existence. (Sale of the to-be-born animals)

11
Q

What is Emptio spei?

A

Emptio spei is the sale of a present thing - the hope or expectancy such as a lottery ticket. It produces effects even if the thing hoped for does not come into existence.

SALE OF VAIN HOPE IS VOID.

12
Q

What are fungible goods?

A

Fungible goods refer to INTERCHANGEABLE goods. Goods are fungible depending on the intention of the parties.

If A lends B his G-tech pen and B must return the exact same pen, the pen is non-fungible.

On the other hand, if their agreement is that B may return to A any kind of pen, the G-tech pen is considered fungible.

13
Q

What is the rule when quantity of the mass is more than the quantity sold?

A

The parties shall become CO-OWNERS of the mass, or simply, the excess belongs to the seller.
Example:
S sells to B 200 sacks of corn from a mass stored in S’ warehouse. The mass actually consisted of 300 sacks of corn, thus they will co-own the mass to the extent of 2/3 for B and 1/3 for S.

14
Q

What is the rule when the quantity of the mass is less than the quantity sold?

A

The buyer becomes the OWNER OF THE WHOLE MASS, with the SELLER BEING BOUND TO MAKE GOOD ON THE DEFICIENCY, unless a contrary intent appears.

15
Q

May things subject to a resolutory condition be the object of a contract of sale?

A

Yes. For example:
S sold to lot to B with a right to repurchase within 5 years, with such sale and right registered in the Registry of Deeds. Later, B sold the lot to X. X’s ownership of the lot is subject to the right of S to repurchase.

16
Q

What are the rules on price?

A
  1. ) THE PRICE OF THE THING MUST BE CERTAIN, fixing of the price can never be left to the discretion of one of the parties, but if the price is fixed by one of the parties and the other accepts, the sale is perfected. If it is UNCERTAIN, THE SALE IS VOID BY REASON OF ABSENCE OF MEETING OF MINDS
  2. ) GROSS INADEQUACY OF PRICE DOES NOT AFFECT A CONTRACT OF SALE, except as it may indicate a defect in consent, or that the contract is actually a donation. (S sold to B a car worth 2M for 1M. Interpreting this, it could have been a donation, or that the consent of S was vitiated because of the unreasonably low selling price.)
  3. ) A SIMULATED PRICE RENDERS THE SALE VOID, but the act may be shown to actually be a different contract such as donation.
17
Q

What is the rule if the determination of the price is left to the judgement of a specified person aside from the parties to a contract of sale?

A
  1. ) If such person is unable/unwilling to fix a price, contract shall be inefficacious unless subsequently they agree on a price.
  2. ) If the 3rd person acted in bad faith or mistake, the COURTS MAY FIX THE PRICE.
  3. ) If such 3rd person are prevented from fixing a price by seller or buyer, the party not at fault may have such remedies against the guilty party as are allowed the seller or buyer as the case may be.
18
Q

When is there a gross inadequacy of price?

A

When a reasonable man will not agree to dispose of his property considering the price in question.

19
Q

When is a contract of sale perfected?

A

It is perfected at the moment there is a meeting of minds upon the thing which is the object and the price. From that moment, both parties may reciprocally demand performance, subject to the provisions of law governing the form of contracts.

20
Q

What type of sale needs to be in writing to be enforceable under the Statute of Frauds?

A
  1. ) Sale of real property

2. ) Sale of goods, chattels, things in action the price of which is 500.00 or more.

21
Q

What are the rules on the sale of a piece of land through an agent?

A

The authority of the agent to sell a piece of land MUST BE IN WRITING, otherwise the sale is void.

If the authority of agent to sell land is not in writing, the sale is VOID whatever the form the sale was in.

If the authority of agent is in a private or public instrument and the sale was:

a. ) entered into orally - unenforceable
b. ) private instrument - valid
c. ) public instrument - valid

22
Q

What are the rules in case of sale by auction?

A

Sale of auction is perfected when the auctioneer announces its perfection by the fall of the hammer or in any other manner.

1.) Rights of parties before perfection
a.) Any bidder may retract his bid.
b.) The auctioneer may withdraw the goods from sale
unless it has been announced to be without reserve.

  1. ) Rights of parties after perfection
    a. ) Winning bidder cannot retract his bid
    b. ) Auctioneer cannot withdraw goods

Withdrawal from the contract by either parties after perfection is a violation of the PRINCIPLE OF MUTUALITY OF CONTRACTS.

23
Q

When is ownership of the thing sold transferred?

A

It is transferred upon the actual or constructive delivery thereof.

24
Q

What is Policitation? What happens if the promisee accepts the promise of the promissor?

A

It occurs in a unilateral promise to buy or sell, and the offer is not accepted by the promise. (A promises to B that A will buy his car. Here B may accept or reject A’s promise. It becomes policitation if B rejects A’s promise)

If B accepts A’s promise:
a. and is supported by a consideration, the promise is binding

b. If not supported by a consideration, it does not become binding

25
Q

Differentiate earnest money and option money.

A

Earnest money - given as part of the purchase price and proof of the perfection of the contract.

Option money - given for the purpose of holding one to his promise to buy or sell a determinate thing for a certain period of time.

26
Q

What is Recto Law?

A

Recto Law is the remedy of vendors in the case of INSTALLMENT SALES OF PERSONAL PROPERTY and CONTRACTS PURPORTING TO BE LEASES OF PERSONAL PROPERTY WITH OPTION TO BUY, when the lessor has deprived lessee of possession/enjoyment of the thing.

27
Q

What are the remedies of the vendor in installment sales of personal property and remedies of the lessor of personal properties with option to buy under Recto Law?

A
  1. ) Exact fulfillment of obligation should vendee fail to pay, regardless of the number of installments defaulted.
  2. ) If the vendee fails to pay TWO OR MORE INSTALLMENTS, vendor may, at his option avail the first remedy or do EITHER of the following:

a.) CANCEL THE SALE - vendor returns to vendee
sums received minus reasonable rent, but they may
stipulate the sums not be returned provided such
stipulation is not unconscionable.

b.) FORECLOSE THE CHATTEL MORTGAGE ON
THING SOLD IF ONE HAS BEEN CONSTITUTED - in
this case, vendor shall have no further action against
the vendee; any stipulation against the contrary is
VOID. NOTE: IT MUST BE A CHATTEL MORTGAGE.

28
Q

What is Maceda Law?

A

Maceda Law, known as “Realty Installment Buyer Act”, has the objective of protecting buyers of real estate on installment payments against onerous and oppressive conditions.
It covers sale or financing of real estate on installment payments including RESIDENTIAL CONDOMINIUM AND APARTMENTS, (excluding commercial and industrial lots) where the BUYER HAS PAID AT LEAST TWO YEARS OF INSTALLMENTS.

29
Q

What are the rights of the buyer under Maceda Law?

A

1.) Grace period to pay installment in case of default
a.) If at least 2 years of installment had been paid at
the time of the default
1.) To pay without additional interest the unpaid installments due within total grace period earned which is fixed at the rate of:

    1 month grace period for every 1 year of installment paid, which is exercisable ONLY ONCE EVERY 5 YEARS.

b.) If the contract is cancelled, entitled to a refund of the cash surrender value equivalent to 50% of the total payments made, and after 5 years of installments, an additional 5% every year but not to exceed 90% of total payments made.

CANCELLATION SHALL TAKE PLACE ONLY AFTER 30 DAYS FROM THE RECEIPT BY BUYER OF THE NOTICE OF CANCELLATION AND UPON FULL PAYMENT OF THE CASH SURRENDER VALUE. DOWNPAYMENTS, OPTIONS AND DEPOSITS SHALL BE INCLUDED IN THE COMPUTATION.

2.) IF LESS THAN 2 YEARS OF INSTALLMENT HAD BEEN PAID:
Buyer shall be given a grace period of not more than 60 days from the date the installment became due to pay. Cancellation takes place if the buyer fails to pay the installment due upon the expiration of the grace period 30 days from the receipt by buyer of notice of cancellation or demand for rescission. Buyer shall have additional rights such as to:
a.) sell rights to another by notarial act
b.) Assign rights to another by notarial act
c.) Reinstate the contract by updating the account
d.) To pay in advance any installment or full unpaid
balance w/o interest.
e.) To ask for annotation of full payment.

30
Q

What are instances of relative incapacity in a contract of sale?

A
  1. ) Sales between husband and wife, except when:
    a. ) there is separation of property
    b. ) there has been a judicial separation of property.

2.) Persons prohibited from acquiring by purchase

a.) Guardian, the property of the person under his
guardianship - VOIDABLE

b.) Agents, property whose administration is entrusted
to them, unless consent by principal was given -
VOIDABLE

c. ) Executors/administrators, the property of the estate.
- VOIDABLE

d.) Public officers/employers - the property of the State - VOID

e.) Justices/judges/prosecuting attorneys/others
connected with administration of justice in cases where the property is under litigation - VOID

f.) Others specially disqualified by law (Aliens acquiring lands in the PH, except by succession or in case of a former natural born Filipino citizen who has lost his citizenship.

31
Q

What is Symbolic delivery?

A

Symbolic delivery (traditio simbolica/traditio clavium) - delivery that takes place by delivering the keys of the place

32
Q

What is Traditio longa manu?

A

Traditio longa manu (delivery by the long hand) - delivery by mere consent if the thing cannot be transferred to the possession of the vendee at the time of sale.

33
Q

What is Traditio Brevi Manu?

A

Traditio Brevi manu (delivery by short hand)- takes place when the vendee is already in possession of the thing sold even before the sale

34
Q

What is Traditio constitutum possessorium?

A

Traditio constitutum possessorium - delivery that takes place when the vendor continues in possession of the thing sold after the sale. (sale and leaseback)

35
Q

What is the rule on time and place of delivery of thing sold?

A
  1. ) Time and place stipulated
  2. ) If no stipulation, place fixed by usage/trade
  3. ) Seller’s place of business, if none, his domicile
36
Q

When is a vendor not bound to deliver the thing sold?

A
  1. ) If the vendee has not paid him the price
  2. ) If no period for the payment of the price has been fixed on the contract.
  3. ) If a period has been fixed for the payment of the price, the vendor is bound to deliver the thing sold. However he is not bound to deliver if the vendee loses the right to make use of the period when:
    a. ) When the vendee becomes insolvent unless he can furnish a guaranty or security
    b. ) When he fails to furnish guaranty or security that he promised
    c. ) When the guaranties or securities promised are impaired, unless he gives one equally satisfactory
    d. ) When vendee violate any undertaking stipulated
    e. ) When vendee attempts to abscond.
37
Q

What are the rules when the quantity delivered is more than what was agreed upon?

A

Buyer may:

  1. ) Accept the goods agreed upon and reject the rest
  2. ) Accept the whole at the contract rate.
  3. ) Reject the whole of the goods if it is indivisible.
38
Q

What are the rules when the quantity delivered is mixed with goods of different description?

A

Buyer may:

  1. ) Accept the goods agreed upon and reject the rest, if it is indivisible
  2. ) Reject the whole of the goods if indivisible.
39
Q

What is an unpaid seller?

A

Unpaid seller is one who has not been paid or tendered the whole of the price or who has received a bill of exchange or other instrument as conditional payment and the condition under which has been broken by reason of dishonor of the instrument, insolvency of buyer or otherwise.

40
Q

What are the rights of an unpaid seller?

A

Possessory lien - right to retain the goods while he is in possession of them

Right of stoppage in transitu - right to resume possession of the goods at any time while they are in transit. This right is available AFTER THE UNPAID SELLER HAS PARTED WITH THE POSSESSION OF THE GOODS AND THE BUYER BECOMES INSOLVENT

41
Q

What are the rules on sale of real estate AT A CERTAIN PRICE PER UNIT, when the actual area mentioned is more or less than the area specified in the contract?

A

1.) If actual area is LESS than that stated in contract:

a.) Ask for proportionate reduction in price IF LACK IN
AREA IS LESS THAN 1/10th OF THAT STATED IN THE
CONTRACT, unless vendee would not have bought
the thing had he known of its smaller area.

b.) Rescind the sale if the lack in area is not less than
1/10th of area stated.

2.) If the actual area is more than that stated in the
contract:

a.) Accept the area stated and reject the rest
b.) Accept the whole area and pay at the contract
rate.

3.) If the area is the same, but a part of the immovable is not of the quality specified in the contract:

a.) Ask for a proportionate reduction of price if inferior
value of the thing does not exceed 1/10th of the price
agreed upon, unless the buyer would not have
bought the thing had he known of its inferior quality.

b.) Rescind the sale if the inferior value of the thing
exceeds 1/10th of the price agreed upon.

42
Q

What are the rules on sale of real estate for a LUMP SUM and not at a certain rate for a unit of measurement/ but instead describing the boundaries?

A
  1. ) Vendor is bound to deliver all that is included within the boundaries stated in the contract although there be a greater or lesser area stated in the contract.
  2. ) Vendee shall pay the lump sum stipulated w/ no changes in price even though the area is lesser/greater.
  3. ) Buyer’s remedies if the vendor does not deliver the area within the boundaries stated in the contract:
    a. ) Reduction in price
    b. ) Rescission
43
Q

What are the rules of preference in cases of double sales of MOVABLE PROPERTIES?

A

Ownership shall be transferred to the person who FIRST TOOK POSSESSION OF THE THING IN GOOD FAITH(whether actual or constructive)

44
Q

What are the rules of preference in cases of double sales of IMMOVABLE PROPERTIES?

A

In the order of preference: (GOOD FAITH ESSENTIAL IN ALL CASES)
1.) Ownership shall belong to the person who registered it first with the Registry of Property.

  1. ) Ownership shall belong to the person who first took possession of it in good faith.
  2. ) Ownership shall belong to the person who presents the oldest title in good faith.
45
Q

What are the kinds of warranties? Explain each.

A

Express Warranty - refers to any affirmation of fact or any promise by the seller relating to the thing whose natural tendency is to induce the buyer to purchase the same, and if the buyer purchases the thing relying on such affirmation or promise.

Implied Warranty - those that are inherent in contracts of sale and accompany them unless they are suppressed by the parties. 2 kinds:

a. ) Warranty against eviction - implied warranty that seller has right to sell and that the buyer shall have and enjoy the legal and peaceful possession of the thing.
b. ) Warranty against hidden defects - implied warranty that the thing shall be free from any hidden defects, or any charge or encumbrance not declared or known to the buyer.

46
Q

Who are the persons not liable for breach of warranty?

A
  1. ) Sheriff
  2. ) Auctioneer
  3. ) Mortgagee
  4. ) Pledgee
  5. ) Others professing to sell by virtue of authority in fact or law
47
Q

What is eviction?

A

Eviction is the deprivation of the vendee of the whole or a part of the thing sold by virtue of a final judgment based on a right prior to the sale or an act imputable to the vendor.

48
Q

What are the requisites on order that the seller’s warranty against eviction may be enforced?

A
  1. ) The purchaser has been deprived of the whole or part of the thing sold.
  2. ) The eviction is by final judgment
  3. ) The deprivation is based on a right prior to the sale or an act imputable to the vendor.
  4. ) The vendor must have been notified of the suit for eviction at the instance of the vendee.
49
Q

What are the vendor’s liability in case of eviction?

A

If there is a stipulation exempting vendor from answering for the eviction and the vendor acted in:

  1. ) BAD FAITH - the waiver is void and shall be liable for
    - value of the thing
    - income or fruits
    - cost of the suit
    - expenses of the contract
    - damages and interest
  2. ) GOOD FAITH - vendor’s liability shall be as follows:
    a. ) (Waiver Consciente) Vendee made the waiver without knowledge of the risks - vendor liable for the value of the thing only

b.) (Waiver Intencionada) Vendee made the waiver with knowledge of risks - vendor is not liable.

50
Q

What is easement or servitude?

A

It is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner.

51
Q

What are the requisites for vendor’s liability should the immovable sold be encumbered with easement or servitude?

A
  • The easement must be NON-APPARENT
  • It must not have been mentioned in the agreement
  • It must be of such nature that it must be presumed that the vendee would not have acquired the immovable had he been aware thereof.
52
Q

What are the kinds of easement or servitude?

A

Apparent - made known by signs and continually kept in view.

Non-apparent - shows no external indication of its existence.

53
Q

What are the vendee’s remedies should the immovable sold be encumbered with any NON-APPARENT easement or servitude?

A
  1. ) Within 1 year from the execution of the deed of sale, ask for the
    a. ) Rescission or
    b. ) damages

2.) After 1 year from the execution of the deed of sale, ask for damages within a period of 1 year from the discovery of the easement.

54
Q

When is the vendor not liable for easement or servitude?

A
  1. ) The easement is APPARENT.
  2. ) The non-apparent easement is RECORDED IN REGISTRY OF PROPERTY, unless there is express warranty that the thing is free from all burdens and encumbrances.
  3. ) When the vendee had knowledge at the time of sale of the existence of the easement even though it was non-apparent.
55
Q

What are the requisites for enforcement of vendor’s liability against hidden defects?

A
  1. ) Defect must exist at the time of sale.
  2. ) The defect must be hidden/ not patently visible.
  3. ) The defect must render the thing unfit for the use for which it was intended or diminishes its fitness, so much so that had the vendee been aware thereof he would not have purchased it, or would have given a lower price for it.
  4. ) The action to enforce it must be made within the period provided by law which is 6 MONTHS FROM THE DELIVERY OF THE THING SOLD.
56
Q

What is the general rule for hidden defects? What is its exception?

A

GR: Vendor shall be liable to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof.

EX: The vendor shall not be liable if there is a stipulation exempting him from such defects and he was not aware thereof.

57
Q

What are the remedies of the vendee in case of breach of warranty against hidden defects?

A
  1. ) Withdrawing from the contract or rescission

2. Demanding a proportionate reduction in price.

58
Q

What are the rules in case of loss of the thing with hidden defects?

A
  1. ) If the cause of the loss is the defect and the vendor was AWARE of it, he shall be obliged to:
    - return the price
    - refund expenses of contract
    - pay damages
  2. ) If the cause of the loss is the defect and the vendor was NOT AWARE of it, he shall be obliged to:
    - return the price
    - refund expenses of the contract
    - pay interest thereon
  3. ) If the cause of loss is a fortuitous event or fault of the vendee and the vendor was AWARE of the defect he shall be obliged to:
    - return the price paid less value of thing at time of loss.
    - pay damages.
  4. ) If the cause of loss is a fortuitous event or fault of the vendee and the vendor was NOT AWARE of the defect he shall be obliged to:
    - return the price paid less value of the thing at time of loss.
59
Q

What is the period for filing action in cases of breach of warranty against hidden defects?

A

6 months from the delivery of the thing sold.

60
Q

What is a redhibitory defect?

A

A defect of such nature that expert knowledge, even after a professional inspection was made, is not sufficient to discover it.

If a veterinarian, THROUGH IGNORANCE OR BAD FAITH should fail to discover it, he shall be liable for damages.

61
Q

What is the rule on sale of animals with redhibitory defect?

A

GR: If 2 or more animals are sold together, the redhibitory defect of one shall only give rise to its redhibition, accordingly vendee may only ask for:

a. ) Rescission of the sale of defective animal
b. ) Ask for proportionate deduction in price

EX: If vendee had known of the defect and would not have bought all the animals, where he intended to buy them as a team, yoke, pair, or set, the vendee may ask rescission for the whole contract.

B bought 6 horses from S, but 1 horse was found to have a redhibitory defect. B can ask rescission of the sale of one horse w/ defect.

But if B intended to use the 6 horses as a team for a race, he may ask rescission for the 6 horses.

62
Q

When must redhibitory action be filed?

A

Within 40 DAYS FROM DATE OF DELIVERY TO VENDEE.

63
Q

When are sale of animals void?

A
  1. ) When it is suffering from a contagious disease

2. ) When the animals are found to be unfit for the use for which they were acquired.

64
Q

When is a vendor liable in case the animal dies of disease?

A

Requisites:

  1. Disease existed at time of sale
  2. Disease is the cause of death
  3. Animal dies within 3 DAYS from the time of purchase.
65
Q

When is an express warranty operative?

A

All written warranties or guarantees issued by a manufacturer, producer or importer shall be OPERATIVE FROM THE MOMENT OF SALE.

66
Q

Explain the liability of retailer, distributor and manufacturer in warranties.

A

The retailer shall be liable only subsidiarily when the manufacturer or distributor fails to honor the warranty. In that case, he may proceed against the manufacturer.

67
Q

When is a warrantor not required to perform warranty?

A

When the warrantor can show that the defect, malfunction, or failure to conform to a written warranty was caused by the damage due to unreasonable use thereof.

68
Q

What are the obligations of the vendee?

A
  1. ) To accept the delivery of the thing sold.

2. ) To pay the price of the thing

69
Q

What is the general rule on the rights of buyers examining goods before accepting them?

A

GR: Buyer has the right to examine
EX:
1. There is an agreement to that effect
2. There is stipulation that goods shall not be delivered to buyer until he has paid the price.

70
Q

What is Pactum Commissorium?

A

An agreement in a sale of an immovable that rescission shall take place if the vendee fails to pay the price at the time agreed upon. This is VOID.

71
Q

What is conventional redemption?

A

Conventional redemption takes place when the vendor reserved the right to repurchase the thing sold with the obligation to

  1. ) return to the vendee:
    a. ) The price of sale
    b. ) expenses of the contract and any other payments
    c. ) Necessary and useful expenses made on the thing sold
  2. ) To comply with other stipulations agreed upon.
72
Q

When no period is fixed in a conventional redemption, the period shall be?

A

The period shall be 4 years from the date of the contract.

73
Q

What is the maximum period for a conventional redemption?

A

10 years. Anything beyond is Void. If the stipulation was 11 years, or “right to repurchase at any time”, then the period shall be 10 years, the excess 1 year being void.

74
Q

A, B and C are co-owners of a lot situated on a hillside and that subdividing it among the owners would render the lot unproductive hence indivisible. A sells his share to X with right to repurchase. B and C subsequently sell their share to X. Can A be compelled by X to repurchase the share of B and C?

A

Yes, X may compel A to redeem not only A’s share but that of B and C as well.

75
Q

A, B and C are co-owners of a lot situated on a hillside and that subdividing it among the owners would render the lot unproductive hence indivisible. A,B and C sell their share to X with right to repurchase. What are the options of A B and C?

A

A B and C may only each repurchase their 1/3 undivided interest.

76
Q

What is Legal Redemption?

A

Legal redemption is the right to be subrogated upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase, or dation in payment or by any other transaction whereby the ownership is transmitted by onerous title.

77
Q

What are the instances of legal redemption?

A

1.) A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners are sold to a 3rd person. If two or more co-owners desire to exercise the right of redemption, they may do so only in proportion to the share they respectively own.

2.) Legal redemption by adjoining of rural land
If a piece of rural land NOT EXCEEDING ONE HECTARE, is alienated, the adjoining owners shall have the right of redemption. In case 2 or more adjoining owners show interest to exercise their rights,
a.) owner of smaller adjoining land is preferred
b.) if their lands are of the same area, whoever first requested redemption shall be preferred.

3.) Legal redemption by adjoining owner of urban land
If two or more adjoining owners are interested, the one with best justification shall be preferred.

78
Q

What is an equitable mortgage?

A

Equitable mortgage is one which although lacking in some formality or form or words, or other requisites demanded by statute, nevertheless reveals the intention of the parties to charge real property as security for a debt and contains nothing impossible or contrary to law. Its essential elements are:

a. ) Parties enter into what appears to be a contract of sale
b. ) Intention is to secure an existing debt by way of mortgage.

79
Q

What are the rules when the quantity delivered is less than what was agreed upon?

A

Buyer may:
1.) Reject the goods, since buyer cannot be compelled to accept partial payment.

2.) Accept the goods at contract rate.

80
Q

A acquired a condominium unit from by exchanging his car worth 500k and giving cash of 500. There was no stipulation as to whether it was a barter or a sale. Is the transaction a barter or a sale?

A

It is a sale. It is sale if the money given is MORE THAN OR EQUAL TO the value of the thing given in consideration, and the parties did not specify their intention. (10k worth of goods and 10k cash)

81
Q

S and B entered into a written contract stating that S, seller, transfers his ring worth 20k for 8k cash and phone worth 12k from B, buyer. Is the transaction a sale or a barter?

A

It is a sale, because they specified in the contract that they are seller and buyer.

82
Q

S and B entered into a written contract stating that S, transfers his ring worth 20k for 8k cash and phone worth 12k from B. Is the transaction a sale or a barter?

A

Barter, since their intention was not clear and that the value of the phone is more than the cash paid.

83
Q

T or F

A contract to sell partakes of the nature of a contract preparatory to the execution of a contract of sale.

A

True.

84
Q

T or F
Where the seller promises to execute a deed of absolute sale upon the completion by the buyer of the payment of purchase price, the contract is only a contract to sell even if their agreement is denominated as a deed of conditional sale.

A

True.

85
Q

What are by-bidders or puffer?

A

It refers to persons employed by the seller to bid in his behalf, the purpose of which is to raise the price, but the said persons are not in themselves bound by their bids. Their bids may be treated as FRAUDULENT by the buyer thus the buyer may annul the sale on the ground of fraud.

86
Q

When may the seller bid at the auction?

A

A seller may bid at the auction provided the following requisites are present:

a. The right to bid must not be prohibited by law or stipulation
b. His right to bid must have been reserved expressly by or on behalf of the seller
c. Notice must be given that the sale is subject to a right to bid by or on behalf of the seller.

87
Q

What are by-bidders or puffer?

A

It refers to persons employed by the seller to bid in his behalf, the purpose of which is to raise the price, but the said persons are not in themselves bound by their bids. Their bids may be treated as FRAUDULENT by the buyer thus the buyer may annul the sale on the ground of fraud.

88
Q

T or F

The time as to the ownership of the thing sold is important to determine as to which party shall bear the loss.

A

True.

89
Q

T or F

An accepted unilateral promise can only have a binding effect if supported by a consideration.

A

True.
A promises to buy B’s car. B may reject or accept A’s promise. If A does not give any consideration to B, the promise is not binding, thus B may withdraw. However, if A gave a consideration to B, the promise then becomes binding to B.

90
Q

When does the buyer have a right to the fruits of the thing?

A

The buyer has a right to the fruits of the thing from the time of the perfection of the contract unless a contrary stipulation has been agreed upon.

91
Q

Discuss sale by sample, description and sample plus description.

A

The parties contract solely with reference to the sample, description or sample plus description of the bulk of the goods sold, and the buyer shall have reasonable opportunity to compare.

If the goods delivered do not correspond with the sample, description, or sample plus description, the buyer may ask for RESCISSION OF THE SALE.

92
Q

What are the instances wherein husband and wife may sell properties to each other?

A

Generally, sale between H and W is VOID, except when:

  1. When there is separation of property
  2. When there is a judicial separation of property
93
Q

What are the obligations of the vendor?

A
  1. To transfer the ownership of the thing sold
  2. To deliver the thing sold
  3. To warrant the thing sold
  4. To take care of the thing sold with the diligence of a good father of a family unless the law or the stipulation of the parties requires another standard of care.
94
Q

What is delivery or tradition?

A

It is a mode of acquiring ownership whereby the object of the contract is placed in the control and possession of the vendee either actually or constructively.

95
Q

Give the general rules as to transfer of ownership when goods are transferred to the carrier.

A

GR: Delivery of goods to a carrier or bailee for the purpose of transmission to the buyer transfers ownership to the buyer
EX:
1. When there is a stipulation to that effect
2. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent or to the order of the seller or agent
3. When by the terms of the bill of lading the goods are to be delivered to the order of the buyer or his agent, but the bill of lading is retained by the seller or his agent
4. When the seller draws on the buyer a bill of exchange for the price of the goods and transmits the bill of exchange and the bill of lading to the buyer to secure acceptance or payment of the bill of exchange, but the buyer dishonors such bill of exchange.

96
Q

T or F

When goods are sold by a person who is not the owner thereof, the buyer acquires no better title than the seller had.

A

True.

When goods are sold by a person who is not the owner thereof, the buyer acquires no better title than the seller had, EXCEPT IN THE FOLLOWING CASES:

  1. When the sale is made under authority or with the consent of the owner
  2. When the owner is precluded by his conduct from denying the seller’s authority to sell
  3. When the sale is made under the provisions of any factor’s acts, recording laws or any other provisions of law enabling the apparent owner to dispose of the goods as if he were the true owner thereof
  4. When the sale is made under a statutory power of sale or under the order of court of competent jurisdiction
  5. When the purchase is made in a merchant’s store/fair/markets.
97
Q

T or F
In the case of sale of immovable to different vendees, ownership thereof shall belong to the person who in good faith registered the sale in the Registry of Property.

A
True.
Order of priority:
1. First registrant in good faith
2. First possessor in good faith
3. OLDEST TITLE
98
Q

When is the right of possessory lien available to an unpaid seller?

A

The right to possessory lien is available to the unpaid seller notwithstanding that he may be in possession of the goods as agent or bailee for the buyer in the following instances:

a. Where the goods have been SOLD WITHOUT STIPULATION AS TO CREDIT
b. Where the goods have been SOLD ON CREDIT BUT THE CREDIT TERM HAS EXPIRED
c. Where the BUYER IS INSOLVENT

99
Q

What is possessory lien?

A

A possessory lien grants a creditor the right to remain in possession of a property under the lien until the debtor has satisfied his or her debt.

100
Q

When does the unpaid seller lose the possessory lien?

A

The unpaid seller loses his lien on the goods when:

a. 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.

Note: The unpaid seller having a lien on the goods does not lose his lien by reason only that he has obtained judgment or decree for the price of the goods.

101
Q

How is the right of stoppage in transitu exercised? What are its effects?

A

The unpaid seller may exercise this right by:

  1. Obtaining actual possession of the goods
  2. Giving notice of his claim to the carrier or other bailee in whose possession the goods are.

Its effects are:

  1. The goods are no longer in transit
  2. The contract of carriage ceases and the carrier shall be liable as depositary or bailee
  3. The carrier must redeliver the goods according to the instructions of the seller.
102
Q

T or F

If the price is simulated, the contract of sale becomes void.

A

True.

103
Q

What is the right of resale? When is it available? How is it made? What are its effects?

A

The right of resale is available to the unpaid seller when:

a. Buyer defaulted in the payment
b. Seller has the right of lien or has stopped the goods in transit
c. Title to the goods has passed on to the buyer
d. The grounds must be any of the following:
1. The goods are of a perishable nature
2. The seller has expressly reserved the right to resell the goods in case buyer defaults
3. Buyer has been in default for an unreasonable time.

Resale is made by the seller when he sells the goods in a public or private sale. He is bound to exercise reasonable care and judgment in making the resale, and HE CANNOT DIRECTLY OR INDIRECTLY BUY THE GOODS. Its effects are:

a. Seller shall not be liable to the original buyer upon the contract of sale or for any profit made by such resale
b. He may recover damages from the buyer for any loss occasioned by the breach of contract of sale.

104
Q

What is the right to rescind sale? When is it available? How is it made? What are its effects?

A

The right to rescind the sale is available to the unpaid seller when:

a. Buyer defaulted in the payment
b. Seller has the right of lien or has stopped the goods in transit
c. Title to the goods has passed on to the buyer
d. The grounds must be any of the following:
1. The seller has expressly reserved the right to rescind the sale in case buyer defaults
2. Buyer has been in default for an unreasonable time.

The rescission is made by:

a. Giving notice to the buyer of the intention to rescind
b. Doing an overt act manifesting the intention to rescind

Its effects are:
a. The seller shall not be liable to the buyer upon contract of sale
b. He may recover from the buyer damages for any loss occasioned by the breach of contract of sale
c .The seller resumes ownership of the goods.

105
Q

S sold a lot to B comprising of 1500sqm at the rate of 1000PHP/SQM.

a. Suppose the actual area was only 1400sqm, what are the rights of B?
b. Suppose the actual area was only 1300sqm, what are the rights of B?
c. Suppose the actual area was 1600sqm, what are the rights of B?
d. Suppose the actual area was 1500sqm, but 200sqm of the 1500sqm was of inferior quality, which should only cost 950php/sqm, what are B’s rights?
e. Suppose the actual area was 1500sqm, but 200sqm of the 1500sqm was of inferior quality, which should only cost 800php/sqm, what are B’s rights?

A

a. B may EITHER ask a proportionate reduction in the price, since the lack in area is LESS THAN 1/10TH of that stated in the contract (150sqm vs 100sqm lacking) for 1,400,000, OR he may rescind the sale if he would not have bought the lot had he known of its smaller area.
b. B may ask for rescission of the contract since what is lacking is more than 1/10th of the agreed area. (150sqm vs 200sqm lacking)
c. B may accept the area at the contract rate (1,600,000) OR accept only 1,500sqm and reject the excess 100sqm
d. B may EITHER ask for a proportionate reduction of the price for 10000 (Total to be paid is 1,490,000) since the inferior value of 50 (1k-950) does not exceed 1/10th of the price agreed upon, OR he may rescind the sale if he would not have bought the lot had he known of the inferior value.
e. B may ask for rescission of the contract.

106
Q

S sold to B a lot for a LUMP SUM of 1.5M. Aside from mentioning the boundaries of the lot, the deed of sale states that the area is 1,500sqm.

a. Suppose the lot area was actually only 1,400 sqm, what is the remedy of B?
b. Suppose the area was actually 1,600sqm, what is the remedy of B?
c. Suppose the area was actually 1,600sqm, but S only wants to deliver the 1,500 agreed upon lot, what is the right of B?

A

a. None. S will have to deliver the lot, and B will pay the lump sum of 1.5M
b. None. S will have to deliver the lot, and B will pay the lump sum of 1.5M
c. B may either RESCIND THE CONTRACT, or ASK FOR A PROPORTIONATE REDUCTION OF PRICE.

107
Q

S double-sold his laptop. He sold it first to B, and promised to deliver it in 3 days. He then sold it to X, who immediately took possession of the laptop. Who has a better right to the laptop?

A

X. In cases of double-sales, the person who took possession in good faith is preferred.

108
Q

S double-sold his house and lot. He sold it first to B, and promised to deliver it in 3 days. He then sold it to X, who immediately took possession of the immovable. Who has a better right to the immovable?

A

X. The order of priority in cases of double sales for immovable is:

  1. First registrant in good faith
  2. First possessor in good faith
  3. Oldest title
109
Q

S sold his lot as follows:

  1. First to X, in a private instrument
  2. Second to Y, in a public instrument
  3. Lastly, to Z who registered it in the Registry of Deeds.

a. Who has the better right to the lot?
b. Suppose Z was in bad faith or did not register the lot, who has a better right to the lot?
c. Suppose all of them recorded the sale in a private instrument, who has a better right to the lot?

A

The order of priority in cases of double sales for immovable is:

  1. First registrant in good faith
  2. First possessor in good faith
  3. Oldest title

a. Z, first registrant
b. Y, first possessor in good faith, because a public instrument is deemed constructive delivery.
c. X, oldest title.

110
Q

B bought a lot from S realty for 1.4M, giving a 600k downpayment and the balance to be paid in a year, and it was agreed that B could apply for a loan to pay the balance. In the meantime, B occupied the property and introduced improvements to the lot. B failed to pay the loan because S Realty refused to deliver the title to the property which was required in B’s loan application. S Realty then sold the lot to X, who forcibly opened the gates to the lot and thereafter registered the sale in X’s name. Who among X and b shall be preferred?

A

B shall be preferred since at the time of the 2nd sale there were improvements and occupants already. X was in bad faith here.

111
Q

What are the vendee’s remedies in case of partial eviction?

A

If the vendee loses, by reason of eviction a part of the thing sold of such importance, in relation to the whole that he would not have bought it without said part, he may demand:

a. Rescission of the contract
b. Enforcement of the vendor’s liability for eviction.

112
Q

RA 7394 is also known as?

A

Consumer Act, approved on Apr 13, 1992 and published on June 15, 1992.

113
Q

What shall be be expressed in a warranty under the Consumer Act?

A
  1. Terms of warranty in clear and readily understandable language
  2. Identify the party to whom the warranty is extended
  3. State the products covered
  4. State what the warrantor will do in the event of a defect, malfunction or failure to the written warranty and at whose expense
  5. State what the consumer must do to avail of the the rights under the warranty
  6. Stipulate the period within which after notice of defect/malfunction or failure to conform to the warranty, the warrantor will perform any obligation under the warranty.
114
Q

What are the minimum standards for warranties?

A
  1. Remedy consumer product within a reasonable time and without charge in case of a defect/malfunction/failure to conform to such written warranty
  2. Permit consumer to elect whether to ask for a refund or replacement without charge of such product or part, as the case may be, where after reasonable number of attempts to remedy the defect or malfunction, the product continues to have the defect or to malfunction.
115
Q

What is the period of the warranty?

A

a. Period stipulated

b. Any other implied warranty shall endure NOT LESS THAN 60 DAYS NOR MORE THAN ONE YEAR FOLLOWING THE SALE.

116
Q

T or F

As a general rule, the buyer is not bound to accept delivery of goods in installments, unless otherwise agreed.

A

True.

117
Q

What is another name for traditio simbolica?

A

Traditio clavium

118
Q

What are the modes of delivery for incorporeal property (intangibles)?

A
  1. By constructive tradition - delivery of incorporeal property by execution of public document
  2. Placing the title of ownership in vendee’s possession (stock certificates)
  3. Use by vendee of his rights with consent of vendor (such as when the buyer of a copyright prints the book on authority of the seller)
119
Q

T or F

A contract for a piece of work is enforceable even if not in writing.

A

True.

120
Q

S sold his only car to B for 100,000 payable in 10 equal monthly installments of 10,000. As security, B executed a chattel mortgage on the car.

a. After paying the first 3 installments, B defaulted on the 4th. What is S’s remedy?
b. In connection with (A) above, may S cancel the sale or foreclose the cattle mortgage on the car?
c. Suppose B defaulted on the 4th and 5th installments, what are S’s remedies?

A

a. S can only exact fulfillment of the obligation which is demand payment of the installment defaulted only, UNLESS there is an acceleration clause wherein the whole shall become due upon default of the payment of an installment)
b. Not yet, because such remedies are available only when the default of B is 2 or more installments.

c. All remedies are now available to him under Recto Law and he must only pick one, which are:
1. Exact fulfillment of the obligation
2. Cancel the sale and S must return the sums received from B minus reasonable rent, unless their stipulations provide otherwise
3. Foreclose the chattel mortgage on the car, after which S shall no longer have an action against B, even if there is a deficiency.

121
Q

In Recto Law, when may deficiency be recovered?

A
  1. In cases of sale on straight-term
  2. If the security foreclosed is other than the chattel mortgage constituted on the thing sold
  3. In case of sale on execution of judgment in favor of seller.
122
Q

S sold his only ring to B for 50,000, with DP of 30,000 and the balance payable at month’s end. As security, B executed a chattel mortgage on the ring. B defaulted on the payment of the balance. S foreclose the chattel mortgage on the ring, but only 15,000 was realized in the foreclosure sale. May S proceed against B as to the deficiency of 5,000?

A

Yes, since this is a sale on a straight term

123
Q

S sold his only car to B for 100,000 payable in 10 equal monthly payments of 10,000. As security, B executed a chattel mortgage on the car, and another on his piano. B defaulted on the 3rd, 4th and 5th installments. As a consequence, S foreclosed the chattel mortgage on the piano which was sold for 75,000.

a. May S recover the deficiency of 5000?
b. May S foreclose the chattel mortgage on the car?

A

a. Yes because the prohibition of recovery of deficiency applies only when the chattel mortgage foreclosed was on the thing sold (car).
b. No. The act of S foreclosing the chattel mortgage of the piano is the first remedy, which is exacting fulfillment of the obligation. The three remedies available under the Recto Law are ALTERNATIVE, therefore by choosing the first alternative, he cannot foreclose the chattel mortgage on the car anymore.

124
Q

S sold his only car to B for 100,000 payable in 10 equal monthly payments of 10,000. As security, B executed a chattel mortgage on the car. B defaulted on the 3rd, 4th and 5th installments. As a consequence, S brought court action against B to recover the balance. The court rendered judgment in favor of S and against B who was ordered to pay. Since B had no other property except the car, S moved for the attachment of the car and its sale to satisfy the judgment. At the execution sale, the car was sold only for a net amount of 75,000. May S recover the 5000 deficiency?

A

Yes, because the prohibition to recover the deficiency applies only if S had the chattel mortgage on the car foreclosed. The prohibition does not apply if the thing is sold in an execution sale.

125
Q

T or F

Options are included in computing cash surrender value under Maceda Law.

A

True.

126
Q

What is assignment of credit?

A

Assignment of credit is a contract whereby a person transfers his credit/right/action against a third person to another person for a consideration.

An assignment of credit not only entitles the assignee to the credit itself, but also gives him the power to enforce it as against the debtor of the assignor.

127
Q

What are the warranties of an assignor in an assignment of credit?

A
  1. The legality and existence of the credit at the time of sale
  2. He does not warrant the debtor’s solvency, except when there is a stipulation or when the insolvency already existed prior to the sale and public knowledge.

D owes C 10k evidenced by a promissory note. C assigns his credit right to X.

1.) If X cannot collect from D because the note was issued for an illegal gambling debt, C will be liable to X because he warranted that the credit was legal when he assigned it to X.

If X cannot collect from D because debt had already prescribed, C shall also be liable to X

2.) If D cannot pay to X because D is insolvent, X cannot go after C, except if they stipulated such or if D’s insolvency was already known prior to the assignment.

128
Q

What are the liabilities of the assignor when warranties are violated?

A
  1. If he was in good faith:
    a. Price received
    b. Expenses of the contract
    c. Other legitimate payments by reason of assignment
  2. If he was in bad faith
    a. Price received
    b. Expenses of the contract
    c. Other legitimate payments by reason of assignment
    d. Damages
129
Q

When shall the credit right or other incorporeal right be considered in litigation?

A

From the time the complaint concerning the same was answered.

130
Q

In expropriation, which of the following essential requisites for a contract of sale is absent?

a. Consent
b. Cause
c. Object
d. Consideration

A

A. Consent

131
Q

T or F
Abdul entered into a contract of sale with Rashid over a parcel of land with fruit-bearing trees on August 1, 2021. The price was paid by Rashid on September 1, 2021. The transfer of title was made on October 1, 2021. The actual occupation was made by Rashid on November 1, 2021. The fruits accruing from August 1, 2021, shall belong to Rashid.

A

True. The buyer has a right to the fruits of the thing from the time of the perfection of the contract unless a contrary stipulation has been agreed upon.

132
Q

Give the order of priority as to the place of delivery in contracts of sales.

A
  1. Place stipulated by the parties
  2. Place of usage of trade
  3. Seller’s place of business
  4. Seller’s residence
133
Q

T or F

Delivery to a common carrier is, as a general rule, not tantamount to delivery to the buyer.

A

False. General rule is FOB shipping point, ownership of thing transfers to buyer upon delivery to common carrier.

134
Q

T or F
If the seller bears the expenses of transportation of the goods sold up to FOB point/destination, then the seller assumes the risk of loss while the goods are in transit.

A

True. FOB point = FOB destination, ownership is transferred only when the buyer receives the goods from the common carrier.

135
Q

T or F

A breach of warranty affects the validity of the contract of sale.

A

False.

136
Q

T or F

A warranty must be stipulated in order to bind the parties.

A

False

137
Q

T or F
Dealer’s talk is considered as a warranty only if it appears on the instrument evidencing the sale, made by the expert, and relied upon by the buyer.

A

False.
Dealer’s talk is only considered a warranty IF:
1. IT IS MADE BY AN EXPERT, AND
2. IT IS RELIED UPON BY THE BUYER.

138
Q

T or F

Warranty against redhibitory defects applies to animals and plants.

A

False, animals only.

139
Q

Abdul bought a parcel of land from Rashid. A month after occupying the land, it became the subject of dispute, putting in issue Rashid and Abdul’s title over the land based on a sale that occurred prior to Abdul’s purchase. Is Rashid liable for breach of warranty against eviction?

a. Yes, the right of claimant existed prior to the sale of the land to Abdul
b. No, not yet because there is no eviction by final judgment
c. Yes, Rashid is made a co-defendant in the suit for eviction
d. No, There was no showing that the act that caused the eviction is an act immutable to Rashid.

A

b. No, not yet because there is no eviction by final judgment

140
Q

In case there is a breach of an express warranty, what is the prescriptive period to rescind the contract in the absence of any stipulation?

A

4 years.

141
Q

What is PD 957? What are its rules?

A

PD 957 is the Subdivision and Condominium Buyers Protective Decree. It has the following rules:

  1. NON-FORFEITURE OF PAYMENTS - If the owner or developer fails to develop the subdivision or condominium project according to the approved plans within the limit or complying to the same, the buyer may:
    a. After due notice to the owner or developer, SUSPEND FURTHER PAYMENTS and there shall be NO FORFEITURE OF ANY PAYMENTS ALREADY MADE, or

b. CANCEL THE SALE and be reimbursed the TOTAL AMOUNT PAID including amortization interests but excluding delinquency interests, with the interest thereon at the legal rate.
2. FAILURE TO PAY INSTALLMENTS - the rights of the buyer in the event of this failure to pay the installments due for reasons other than the failure of the owner/developer to develop the project shall be governed by Maceda Law.

142
Q

RA 6552 is known as?

A

Maceda Law.

143
Q

What is res perit domino?

A

RES PERIT DOMINO. The thing is lost to the owner. This phrase is used to express that when a thing is lost or destroyed, it is lost to the person who was the owner of it at the time.

144
Q

Security title is an exception to the rule res perit domino. What is a security title?

A

It is stipulation where delivery of the goods has been made to the buyer or the bailee, in pursuance to the contract and the OWNERSHIP OF THE GOODS ARE RETAINED BY THE SELLER MERELY TO SECURE PERFORMANCE OF THE BUYER of his obligation under the contract, but the GOODS ARE AT THE BUYER’S RISK from the time of such delivery.
Example:
A sold to B computer parts. A shipped the goods to B with the agreement of a security title with courier C. The shipping cargo of C was lost at sea. Here, B bears the risk.

145
Q

When are contracts presumed to be an equitable mortgage?

A

A contract of sale with a right to repurchase and other contracts purporting to be an absolute sale, shall be presumed to be an equitable mortgage when:

a. Price of the sale w/ right to repurchase is unusually inadequate
b. Vendor remains possession as lessee or otherwise
c. When the period for the exercise of the right to repurchase is extended
d. When the purchaser retains for himself a part of the purchase price
e. When the vendor binds himself to pay the taxes on the thing sold
f. When the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

146
Q

What is the right of pre-emption?

A

It is the right of an adjoining owner of AN URBAN LAND to be given preference to the purchase of a small piece of urban land which is held for speculation before it is offered for sale to others.

147
Q

What are documents of title to goods? What are the common forms of documents of title?

A

These are documents used in the ordinary course of business in the sale or transfer of goods as proof of the possession or control of the goods, or authorizing or purporting to authorize the possessor of the document to transfer or receive, either by indorsement or by delivery, goods represented by the document. Common forms include:

a. Bill of lading
b. Dock Warrants
c. Warehouse receipt or order/Quedans

148
Q

What is a bill of lading?

A

It refers to written acknowledgments of the receipt of goods by a carrier, and an agreement to transport and to deliver the goods at a specified place to a person named therein, or to his order or to bearer. Other terms include:

a. Receipt for transportation
b. Forwarder’s receipt
c. Shipping receipt

149
Q

What is a dock warrant?

A

It is a warrant given by a dock owner to the owner of the goods imported and warehoused on the dock upon the faith of the bill of lading as a recognition of the title to the goods of the owner of such goods.

150
Q

What is a warehouse receipt?

A

It is a written acknowledgment by a warehouseman of the receipt of the goods which are placed in his possession.

151
Q

What are the classes of documents of title? Define each.

A
  1. Negotiable document of title - one in which it is stated that the goods will be delivered to bearer, or to the order of any person named in such document
    a. Bearer document of title - deliver goods to bearer
    b. Order document title - deliver to X or his order
  2. Non-negotiable document of title - one in which the goods are to be delivered to a specified person only - deliver to X
152
Q

How are negotiable documents of title negotiated? Explain each.

A
  1. By delivery -

A. If by the terms of the document of title, the carrier/warehouseman/other bailee issuing it undertakes to deliver the goods to bearer.
Example:
D deposits his goods in the warehouse of W, and W issues a receipt which provides that the goods are “deliverable to bearer”. D may negotiate the receipt to another by mere delivery.

B. If by the terms of the document of title, the carrier/warehouseman/other bailee issuing it undertakes to deliver the goods to the order of a specified person and such person or a subsequent indorsee of the document has indorsed it in blank or to bearer.
Example:
D deposits his goods in the warehouse of W, and W issues a receipt which provides that the goods are “deliverable to the order of D”. If D indorses the warehouse receipt in blank, he just writes his signature and nothing else, or he writes “deliverable to bearer” and signs his name and delivers the receipt to A, A may negotiate the instrument by mere delivery

  1. By indorsement plus delivery - if the document of title states that the goods are to be delivered only to a specified person, the document of title may be negotiated by him only by such indorsement coupled with delivery, which may be in the following forms:
    a. Blank indorsement - signature of indorser plus delivery to indorsee
    b. To bearer - Indorsment states that the goods are deliverable to bearer
    c. Special indorsement - Name of indorsee is specified
153
Q

T or F

A negotiable document of title even if marked “non-negotiable” remains to be negotiable.

A

True.

154
Q

T or F
Delivery of an order document of title without any indorsement does not constitute negotiation, but a mere assignment by the holder to the purchaser or donee.

A

True. A

155
Q

T or F
A non-negotiable document of title cannot be negotiated. It can only be transferred or assigned, and its indorsement does not constitute negotiation and gives the transferee no additional rights.

A

True.