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August 20, 2011


Y is obliged to pay for the car. While the general rule in contracts is that the fixing of the price can never be left to the discretion of one of the contracting parties, a different rule applies when there is already a delivery of the thing and appropriation by the buyer. In such case, the buyer must pay a reasonable price for it. Y therefore is obliged to pay for a reasonable price of the car, reasonable price being a question of fact based on the circumstances, which may generally be the market price of the car at the time of the delivery.

2. At the time of the attachment, X was the owner of the TV. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery therof. A thing is understood as delivered when it is placed in the control and possession of the vendee. In this case, Y paid the price with the knowledge that he cannot yet take possession of the thing. Y, therefore, cannot oppose the attachment. However, he may avail of the remedy of rescission of the contract of sale, in which case, Y shall demand the return of the amount he already paid plus damages. 3. Y cannot compel X to accept the P2,200,000.00 first offered and execute a deed of sale. In this case, there was no perfected contract of sale. Instead, it was a unilateral promise to sell by X. While X made the offer of the thing certain and the price, there was no acceptance from the part of Y. This is a case of an unaccepted unilateral promise to sell also called policitacion, which creates no juridical effect or legal bond. Nevertheless, assuming that there was acceptance by Y, he still cannot compel X to execute a deed of sale in the absence of consideration. The 2nd paragraph of Article 1479 states that an accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. 4. Y cannot seek reimbursement for the amount he already paid. The general principle applied to loss of things is res perit domino meaning, the thing perishes with the owner. The case at hand however is an exception. Article 1480 provides that any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the perfection of the contract to the time of the delivery, shall be governed by Articles 1163 to 1165, and 1262. Article 1262 states that an obligation which consist in the delivery of a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor and before he has incurred in delay. Y assumes the risk of loss of the painting, which is a determinate thing, by fortuitous event, without the fault of the seller, and before he has incurred in delay, after the perfection of the contract to the time of delivery.

5. In a contract of sale of personal property the price of which is payable in installments, in case of breach on the part of the vendee, the vendor may exercise the following remedies: a. Exact fulfillment of the obligation, should the vendee fail to pay; b. Cancel the sale, should the vendees failure to pay cover two or more installments; c. Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendees failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover the price. Any agreement to the contrary shall be void. These remedies are not cumulative or successive. They are alternative, which means than an election of one is a waiver of the right to resort to the others. (Art. 1484)


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 than the seller had. However, this general rule is subject to the following exceptions: a. When the owner of the goods is by his conduct precluded from denying the sellers authority to sell; b. Where the law enables the apparent owner to dispose of the goods as if he were the true owner thereof; c. Where the sale is sanctioned by statutory or judicial authority; d. Where the sale is made at merchants stores, fairs or markets; e. Where the seller has a voidable title which has not been avoided at the time of sale and the buyer is in good faith, purchases for value and without notice of the defect; f. Where the seller subsequently acquires title. (Art. 1505, 1506, 1507) A negotiable document of title is a document of title in which it is stated that the goods referred to therein will be delivered to the bearer, or to the order of any person named in such document. (Art. 1511) A person to whom a negotiable document of title has been negotiated acquires the following: a. Such title to the goods as the person negotiating the document to him had or had ability to convey to a purchaser in good faith for value b. Such title to the goods as the person to whose order the goods were to be delivered by the terms the document had or had ability to convey to a purchaser in good faith for value c. The direct obligation of the bailee issuing the document to hold possession of the goods for him according to the terms of the document as fully as of such bailee had contracted directly with him. (Art. 1513) A person who for value negotiates or transfers a document of title by indorsement or delivery warrants:


a. That the document is genuine; b. That he has a legal right to negotiate or transfer it; c. That he has knowledge of no fact that would impair the validity or worth of the document; and d. That he has a right to transfer title to the goods and that the goods are merchantable or fit for a particular purpose, whenever such warranties would have been implied if the contract of the parties had been to transfer without a document of title the goods represented thereby. (Art. 1516) 8. A seller of goods is deemed an unpaid seller when: a. The whole of the price has not been paid or tendered; b. A bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise. The term seller includes an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price, or any other person who is in the position of a seller.(Art. 1525) According to Article 1526, notwithstanding that the ownership in the goods may have passed to the buyer, the unpaid seller has: a. A lien on the goods or right to retain them for the price while he is in possession of them; b. In case of the insolvency of the buyer, a right of stopping the goods in transit after he has parted with the possession of them; c. A right of resale as limited by this Title; d. A right to rescind the sale as likewise limited by this Title Where the ownership in the goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the ownership has passed to the buyer. (Art. 1526) 9. The unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases: a. Where the goods have been sold without any stipulation as to credit; b. Where the goods have been sold on credit, but the term of credit has expired; and c. Where the buyer becomes insolvent. The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer. (Art. 1527) The unpaid seller loses his lien on or right of retention over the goods 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 the possession of goods; c. By waiver thereof. (Art. 1529)

10. The right of stoppage in transit given to an unpaid seller, in case the buyer is or becomes insolvent, and the former who has already parted with the possession of the goods may resume possession 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 with the possession. (Art. 1530). This right is exercised either by: a. Obtaining actual possession of the goods; b. Giving notice of his claim to the carrier or other bailee who is in possession thereof. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case, the notice to be effective, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may prevent a delivery to the buyer. After notice of stoppage in transit, the carrier or bailee, must redeliver the goods to, or according to the instructions of the seller. Expenses for such delivery must be borne by the seller. If a negotiable document of title representing the goods has been issued by the carrier or bailee, he shall not be obliged to deliver or justified in delivering the goods to the seller unless such document is first surrendered for cancellation. (Art. 1532).