Villanueva - Partial Sales Lecture

7/28/2019 Villanueva - Partial Sales Lecture

http://slidepdf.com/reader/full/villanueva-partial-sales-lecture 1/20

Sales Review – August 4, 2005

1. Option Contract

a. SM must also have all 7 requisites

b. Contracted Certain Offer c. Key word – anything other than a purchase price will suffice

d. Twice borrowed consideration –

2. Ang Yu Asuncion -

a. Pre-1994 years b. I hereby oblige myself not to offer to anyone during the option period.

c. Came out with the following rules in the slide

i. No separate consideration – option contract void

1. But it is still a certain offer despite the void K if it has all 7

requisites

ii. If w/drawal – whimsically, arbitrarily, could give rise to damage

claim under Art 19 of Civil Code. (Abuse of Rights Doctrine)

3. Ang Yu Asuncion – 2nd Slide

a. When there is a separate consideration

i. Exercised within period – gives rise to Contract of Sale

1. Cannot be exercised after – because there would be nothing

more after the option period.

ii. Would be a breach of the option contract to w/draw the offer

during the agreed period.4. Ang Yu Asuncion

a. Optioner offeror withdraws offer before its acceptancei. Optionee-Offeree may not sue for

1. Specific performance of the saleii. Optionee-Oferee, can sue for damages based on breach of option.

b. The SC is very castidious – technically and legally correct but

commercially wrong

i. Because the very logic of an option contract is to be able to BE

SURE that you have that offer valid and subsisting during that

period.

5. Right of First Refusal

a. There is a meeting of the minds s

i. Offeror bounds himself to first offer sM to offeree for sale (

Conditional)

ii. In event offeror ever decides to sell itiii. SM – possible, licit, determinate/determinable

iv. For price that will then be agreed upon.1. No price yet agreed upon.

2. Because the time of sale is not yet definite.

3. Still has to be bargained.

b. Central is commitment –



c. Giving a Right of First Refusal a separate consideration will not make It K

of Sale because of the lack of price. (Ang Yu v. Asuncion)

d. Not an option K, K of sale, not even a K.

e. Ang Yu went on the say – how are you going to enforce the K?

i. Can the one who gave money sue you? Even when you return themoney?

ii. ON what grounds?iii. You will be asking the court to build the contract when there is

none.6. Doctrines on rights of First Refusal

a. Innovative juridical relation – never reached the level of privity – so you

cannot ask for recission – damages will not be based on breach of contract

but on abuse of rights.

7. Doctrines on RFR

a. Equatorial Development – promulgated after Ang Yu v. Asuncion

i. When RFR attached to a principal contract – it enforcement

takes its vitality from the obligatory force of the main contract

ii. Solution as to the lack of price - Such RFR, when breached may

be enforced, at the price at which SM sold to 3rd party.

iii. The 3rd party buyer’s purchase may be rescinded under accion

pauliana - K only binds the parties to the contract on the principle

of relativity.

iv. Highest values in the Commercial world – purchasers and holdersin good faith are always protected.

v. Accion pauliana must be based to actions in fraud of creditors.vi. “People don’t buy on the basis of title” emerging doctrine in

Mapala and even Atilano. When you purchase or lease, younormally look at the real property. If you don’t do that, you are in

bad faith.

b. When it comes to pedro, you are buying a piece of land. Going to the

property, he would have seen Juan who has the RFR leasing the land. He

would be in fraud because he didn’t take the steps which a prudent man

would take.

8. Doctrines on RFR

a. Paranaque Kings

i. RFR is complied with the seller going into sales negotiation Bona

Fide.ii. Test – what price you sell to the RFR buyer can be sold at the same

price to the 3rd

persons. I must sell it at a price higher than what I

would offer to RFR buyer.

9. Mutual Promise to Buy and Sell

a. Policitacion or perfection?

i. It dependsii. Contract of conditional sale – perfection has come in but not

demandability



iii. Contract to Sell – Obligation to do, not a species of Sale –

Policitacion stage of sell

b. ON what stage will depend your remedies

10. Perfection Stage

a. Certain offer with Absolute Acceptance b. Contractual Principles

i. Consensualityii. Relativity

iii. Mutuality11. Form of Sale

a. Generally no form

b. For enforceability not Validity

i. 3 types of K of sales which are governed by Statutes of Frauds

1. Sale – not to be performed within a year

2. Sale of movables, at least 500

3. Sale of immovables, at any price (even 1 peso)

ii. Never get involved with SOF issues before you VERIFY that the

K is Valid. – because SOF deals with the world of performance. –

You can never enter it unless you’ve gone through perfection

stage.

iii. Evidence of Memorandum must be

1. Writing

2. Contains the signature by the “party sought to be charged ”a. This party refers to the one denying that the sale

never existed12. Form of Sale

a. Memo must contain all 7 requisites b. You can file a case in court – BUT you cannot submit PAROLE evidence.

c. Second Exception

i. Failure to object to the presentation – Waiver of adducement of

Oral Evidence

ii. Partially Executed (estoppel)

13. Form of Sale

a. Shave, marry and 20 M – Juan only accepted Shave and 20 M – CLV wins

because of NO K of Sale

b. Ortega – partial execution must involve SM, Price, Not “other

consideration”c. If he shaves and marries – there is still no K – CLV still wins – It must be

either SM or price.

d. Another example – he pays the 20 T and consigns with the court – CLV

still wins because consignation involves no act from the “party sought to

be charged”. Because partial execution is based on Estoppel of the “party

sought to be charged”.e. Another example – 20 T Friday 3’o clock – next day he got hold of the

table – seller denies any sale – CLV as seller still wins – because his possession has no complicity from the party sought to be charged.



14. Forms that void Contract of Sale

a. Sale of Realty through agent – authority must be in writing

i. Void because it is declared so by law

15. Sales of Immovables

a. Mandated Rules b. Claudel

i. Sale is consensual – valid by meeting of the mindsii. But it is unenforceable even between the parties if it is not in

private documentiii. Except – partial execution/ waiver

c. Public Instrument

i. To bind the the public

ii. To be registrable with Registry of Deeds

iii. Torrens System Cases are related.

d. Registration – only way to involve 3rd

parties.

16. Earnest Money

a. Why is earnest money in the chapter on perfection when it is part of

purchase price.

i. Clear evidence of perfection of contract of sale

ii. Reminder: Never jump into performance before you are sure that

there is perfection of Valid K of sale

iii. Example: 30T – 5k earnest money – but let’s talk in Friday on

manner of payment – Juan even took it home – Friday came - Juansues for specific performance – because NO manner and terms of

payment – there is no K to start with.1. Earnest money provisions can never come in before the

question of perfection of contract.iv. Also, remember the 3rd exception where delivery and appropriation

– can give the courts the power

17. Knowledge of the offeror is the key.

a. I bought a car, dealer issued me a receipt –

b. Receipt – does not include the 7 – that judge is wrong because there is

partial payment – You need 7 for it to be fully executory. Judge should

have allowed adducement of parole evidence.

c. This is the problem with Toyota Shaw v. CA case.

Midterms Answer TIPS

1. I will rule in favor of Mila.

a. The offer to purchase made by Mila was a certain offer.

b. Because it covered the purchase of

i. a subject matter that was legal and determinate withii. a price that was real, certain

iii. with terms of payments.



c. When Jovy replied “accepted” it was deemed to be an absolute

acceptance because there was no varying of the subject matter and the

price, and the additional injunction “but you must take care of him like

a son,” is deemed to be a plea rather than an additional consideration.

d. In fact, it cannot be deemed an additional consideration because it hadno monetary value equivalent and

e. It is not even deemed to be a condition because it does not modifyeither the contract or the obligations since it is intended to happen after

the sale is fully consummated.f. Even if we deem it a resolutory condition, it cannot prevent the

contract of sale from being immediately demandable, and can only

extinguish the contract if indeed Mila in the future treats the dog not

like a son, as for example prepares it as a dish.

2. The item placed by Daniel in the classified ads of PDI constituted a valid and

certain offer.

a. Although generall, advertisements are not considered offers “but merly

invitations to make an offer” (Art 1326 of CC), such that the

acceptance thereof really amounts to an initial offer, nevertheless,

Article 1326 CC expressly provides “unless it appears otherwise.”

b. The wordings of the ad item clearly was addressed to

i. A definite offeree and gave the address.

ii. It contained a SM there were existing, legal, and determinable

1. SMC A shares could be determinate because quantitygiven at 2300 shares from all the rest of the SMC equity

without need of the parties entering into a newagreement) and

iii. The price was ascertainable being the quoted rate of shares atthe PSE on a definite time and date, and more importantly, the

item itself provided that it to be clearly a certain offer.

3. The sending of the telegram of acceptance by Hilario that Monday amounted

to a valid acceptance, and would be binding on Daniel the moment he had

knowledge of it.

a. Although the offer given by Daniel contained a provision that only an

acceptance published in the classified ads section of the PDI would

constitute a binding acceptance,

i. the provision did not go into the SM or its manner of delivery,

andii. Did not go into price or manner of payment.

iii. Much less did it go of affect any other consideration apart from

the price.

b. It was meant to affect the manner of perfection of the contract, without

being a condition, either suspensive or resolutory.

c. The principle of Villongco v. Bormahecoi. Is that acceptance that contains deviation, but such deviations

do not affect, modify nor touch the subject matter or the mainobligation of the seller to give nor the price or consideration, or



the main obligation of the buyer, would be considered

“nominal” changes that do not prevent such acceptance from

being still an absolute acceptance.

4. I would rule in favor of Daniel.

a. The main doctrine applicable for the resolution of this problem is thatthe offer, the effects thereof, including the effect of acceptance, must

all be taken into legal account ONLY FROM THE VIEWPOINT OFTHE OFFEREOR and not the offeree.

b. Therefore, although the item published by Daniel constituted a validand certain offer that if and when absolutely accepted would give rise

to a valid sale;

i. Although the acceptance both by telegram and the reply ad in

PDI constituted an absolute acceptance, nevertheless,

1. the rule is that acceptance made by letter or telegram or

in this case also the ad in PDI, do not bind the offeror

(Daniel) except from the time it came to his knowledge;

2. and the power to destroy a certain offer is absolutely in

the hands of the offeror (Daniel) at any time before he

learns of an absolute acceptance.

c. In the cae at bar, although the acceptance was conveyed by Hilario on

Monday, it came to the knowledge of Daniel only on Thursday; and

yet the day before (Wednesday, while in Cebu) he had already

withdrawn the offer and had withdrawal effected through his secretary.i. The withdrawal of the offer on Wednesday effectively

destroyed it even when knowledge of such withdrawal came toHilario only on Friday, because the effectivity of the

withdrawal comes about by the act of the offeror and not on theknowledge thereof by the offeree.

5. There was never an valid option contract perfected between Reolino and

Dionicio.

a. Although there was a valid consideration agreed upon, and actually

paid of 20T which was separate and distinct from the purchase price of

2M nevertheless,

i. For an option to be valid and enforceable, it must contain all

the elements of a certain offer, it must contain upon its

perfection all the four requisites of “Price” including the terms

of payment thereof.ii. When the option contract was agreed upon, the terms of

payment “was to be agreed upon by the parties” only when the

option was to exercised by Dionicio, which means there is no

meeting meeting of the minds as to the price yet. There was

never an valid option contract; it did not even constitute a

certain offer. b. Even on Friday, when Dionicio exercised the option an indicated the

manner of payment of 20,000 option consideration and the total purchase price, there was still no valid option contract because the



exercise by Dionicio of the alleged option (which was void)

constituted essentially a counter-offer because it then contained terms

of payment of the price, which were accepted by Reolino, to constitute

a valid and binding sale contract.

c. The insistence by Reolino that the option consideration be paid byMonday did not validate an option that did not exist, but could not

affect the validity and enforceability of a contract of sale that hasarisen.

6. The written notice given that Sunday could not produce any legalconsequence.

a. First, the written notice could not have extinguished the option

contract, since no valid option contract ever existed, not even a certain

offer;

b. There was nothing to extinguish, much less to rescind.

c. Second, even presuming that a valid option contract was constituted by

exchanges between Reolion and Dionicio that Friday, and although it

may be true that with or without breach, a valid option could have

been extinguished by notice by the offeror to the offeree at any time

prior to its being exercised (Ang Yu Asuncion doctrine)

d. But the truth is the counter offer of Dionicio to purchase the Jaguar for

a total price of 2M that coming Monday, was absolutely accepted by

Reolino which perfected at that point a valid and binding contract of

sale.e. The condition on the payment of the option consideration, which was

separate and distinct from the purchase price of the Jaguar, did notaffect the coming into perfection of the valid contract of sale; at most

it merely constituted a further bargaining on how the separateconsideration on the option contract was to be paid.

7. I will rule in favor of Dionicio to enforce the sale on the Jaguar, and will rule

in favor of Reolino for damages for “abuse of right” on the non-payment in

due course of the “option consideration.”

a. Although there may have been a “breach” of the option arrangement,

nevertheless the non-payment of the 20T option consideration may be

considered a substantial breacho only of the option arrangement,

i. But, had nothing to do with the contract of sale over the Jaguar

for which there was no breach.

b. As the SC has often said an option contract, though valid and binding,is totally different from the contract of sale that may arise by reason

thereof.

c. There being no breach of the sale contract, the terms thereof became

binding and obligatory upon Reolino, and he cannot use the breach of

an entirely separate arrangement to undermine compliance of his

obligation to transfer ownership and delivery possession of the Jaguar,there having been full compliance by Dionicio of his obligation to pay

the entire purchase price.



d. The payment of the option consideration by Saturday may been

assumed by Dionicio, but without enabling words clearly so stating, it

did not constitute a condition upon a contract of sale.

8. The sale is not void by reason that it is covered under Article 1491(2) of the

Civil code. Although the originial agreement between Pedro and Pilar isdenominated as “Agency Agreement,” essentially Pilar was not a mere agent

of Pedro, but actually assumed the role of a would be buyer.a. The SC has held that a true agent does not assume any personal risk or

liability as to the SM of the agency; and when the contract makes theagent assume such risk, the true relationship is that of a would-be

seller and would-be buyer, almost like a contract to sell.

b. Consequently the relationship between Pedro and Pilar is not that of

agency governed by the prohibition under Article 1491 of the CC.

c. But also, even if there was an agency-principal, the clause making

Pilar assume the risk of loss after 90-day period is equivalent to an

authority for her to buy the subject matter of the sale, an exception

expressly allowed in Article 1491.

9. 8B. I will decide the suit in favor of Pedro.

a. Even if the relationship between Pedro and Pilar is that of would-be

seller and would-be buyer, nevertheless for purposes of meeting of

minds to constitute a valid perfection of a contract of sale, it is

necessary that there is a meeting of minds as to the terms of payment.

b. As the setting of the price cannot be left to the will of either party, soalso with the terms of payment.

c. Therefore the setting by Pilar of the terms of payment of the purchase price, not having been accepted by Pedro did not give rise to a Valid

Contract of Sale.10. 9. I would declare the sale void for having a consideration that is nominal,

equivalent to be none at all.

a. Although the ruling in Ong v. Ong is that there is a presumption in a

contract of sale that being onerous and commutative, valuable

consideration was indeed agreed upon and paid, nevertheless

according to

b. Bagnas v. CA, that presumption no longer holds true if during trial it is

shown that in fact no valuable consideration was paid. Even if the

1.00 was real (as opposed to simulated) and certain in money.

c. It is considered to be a nominal consideration applying the civil lawdoctrine and was to be equivalent to no consideration for the sale

which makes it void.

d. The transaction is not also a valid donation because was embodied in a

private document, and being a public document is a requisite for

validity of donations.

e. I will rule for the fixing of the reasonable price by the court andordering the parties to comply thereafter with the terms of a valid sale.

It is true that the designation of a third party to fix the price makes the price “ascertainable” and will support a valid contract of sale, but it is



deemed a suspensive condition, ie. That the third party will fix the

price.

i. Such then when he fixed the price by mistake or in bad faith,

these are the only instances when the courts are allowed to fix a

reasonable price, because the suspensive condition is deemedto have been fulfilled.

ii. Generally therefore when the 3rd

party designated fails or refuses to fix the price, there is no cause fo the courts to fix the

price because the non-happening of the suspensive condition isdeemed to have extinguished the contract

f. Therefore, the failure of Gabelo to fix the price before his untimely

death may itself be deemed to constitute as non-fulfillment of a

suspensive condition that would have extinguished the sale.

Nevertheless, in the case at bar, a principle in the Law on Obligations

and Contracts will be applied, namely Article 1186 of the CC which

provides that “The condition shall be deemed fulfilled when the

obligor voluntarily prevents its fulfillment.”

g. In this case, it was the seller who caused the non-fulfillment of the

suspensive condition; and therefore for all intents and purposes, the

condition is deemed fulfilled to have brought about the demandability

of the contract of sale as to authorize the court to fix a reasonable

price.

h.

Consummation and performance of Contract – August 18, 2005

September 1, 2005

Documents of Title Lecture

1. Contract of Sales

a. There are basic principles

i. “first in time, priority in right”

• This great principle is only fourth wrung

• It goes below article 1544.

ii. 1544 CC• Addresed to the 2

ndBuyer

• When is First in time priority in right NOT Oldest Title

a. First in time priority in rights – refers to First Seller

b. But almost always, oldest title refers to “first in time,

priority in rights”

c. Why does this great value lower than First to register and first to possess.

i. Because the great principles are only great as between the two of them.

Daryl Chua!9/1/05 6:04 PM

Comment: Referring to the GLOBAL

RULES ON DOUBLE SALE FOR REAL

ESTATE



ii. The rest of the world has a manifestation –

either the 2nd buyer or the original owner.

iii. C1 – S1 – B1

iv. C2 – S1 – B2

1. As can be seen B1 is third party to C2and B2 is third party to C1

• What is the great principle embodied in First to register andFirst to possess.

a. Why should we let the first buyer win? b. Is it possible for the second buyer to win with oldest

title? YES – accdg to CLV

i. Title can be anything other than sale

ii. Prescription, it is possible that his is only the

subsequent purchase but her already has title to

the property (but very RARE)

c. “The law shall always protect the innocent purchaser”

i. IPV – one who has acquired the property in

good faith and for value.

ii. It’s not enough that you are in good faith. You

must pay value.

d. “Person in due diligence is first protected.”

i. You prefer the one who is not negligent.

ii. Innocent AND diligentiii. 2

ndbuyer cannot win by default. Knowledge by

first buyer will not constitute registration.Because a positive act is required from the 2nd

buyer.2. Global Rules on Double Sales are Traditions

a. Tradition comes about by

i. Valid Sale

ii. Seller had ownership at the time of delivery – NEMO

• subject matter of tradition is ownership

DOCUMENTS OF TITLE

“ In the twilight zone” - Nothing is what it should be.

1. Examples

a. Bill of Lading

b. Warehouse Receipt

c. Quedans

2. Documents of T go into the paradise called negotiations

3. Necessarily involves third party - bailee4. Two Types of DOT

a. Negotiable



i. Even if its stamped across the face that its non-negotiable, it is still

negotiable as long as there are words of negotiability.

ii. RULE OF UNITY

1. Where that document of title is is where the goods are.

2. You cannot affect the goods legally without the DOTiii. Even if originally to bearer, if endorsed specially, becomes order. –

Contrary to NILiv. Find out what Real Define means

b. Non- negotiablei. Rule of Separateness

1. No unity between goods and piece of paper – contrary to

above??? Rule of Unity???

5. 2 Species of Sale

a. Sale – tangibles

b. Assignment – intangibles

i. Effects of Assignment

1. Principles are very similar to that of sale

a. Assignment merely steps into the shoes…

i. This is similar to NEMO

b. The non-negotiable title merely represent …

i. Claim of title only … (open ended) !!!

2. Effects

a. Public Instrument is the greatest form of constructivedelivery.

b. Execution of public instrument – does not do it… evenenjoyment of the rights does not do it (Rules of

Tradition do not apply to DOT)

c. There is a need by the 3 rd party to acknowledge

ii. Effects of Negotiation

6. Negotiable DOT defies Sales Principles

7. Warranties a. 3 pertain to DOT

b. last 2 pertain to goods

c. people don’t enter a contract of Sale for the title, they go into a K of sale for

the goods.

d. Importance for Warranties

i. The only time that there is a breach of the warranties, is the only timeyou can hold the seller liable.

ii. Note that the Assignor does not warrant that the bailor will give the

goods. Not even God can guarantee the acts of man. It is up for the

state to guarantee the validity of the bill of lading.

iii. Defies breach of tradition

1. Possession of goods by third party (codal provision)

2. In other words – there is no delivery until there is confirmation

3. In this CASE – there is delivery even WITHOUTconfirmation!!

Daryl Chua! 9/1/05 6:35 PM

Comment: Elaborate More!!



Lecture on Second Global Rule on Double Sales - 10/4/05

1. 2nd

Double Sale applies to UNREGISTERED LAND

2. Rules of Court are used

3. Global Rules

a. Torrens System - Registration

b. Rules Of Court

c. 1544

i. First to register – Act 3344

1. Not covered by torrens registration -

d. First in time priority in rights

Article 1544 on Movables

Two overriding principles

“ The law protects the innocent purchaser for value” + “ The law protects one who acted

with diligence”

Article 559

550. - The possession of movable property acquired in good faith

a. IS equivalent to a TITLE.

i. NEVERTHELESS, one who has lost any movable OR

ii. has been unlawfully deprived thereof (General RULE )

1. MAY RECOVER IT from the person in possession of the

same. (RECOVERY OF POSSESSION)

2. If the possessor of a movable lost or which the owner has beenunlawfully deprived, (PUBLIC SALE) (Particular Case)

a. has acquired it in good faith at a public sale,i. the owner cannot obtain its return without

1. REIMBURSING the price paid therefor.(464a)

- The value between 1544 and 559 is registration in good faith

San Lorenzo is not controlling – it is naawan that is controlling.

Lecture on Loss deterioration and Fruits - 10/4/05

Retail Trade Naturalization Law



Comment: Check this out!

Comment: You have to ReMember this BYheart!! – Justice Hofilena



- Passed after the war

- Observation: Chinese Merchants controlled retail trade

- Has the retail Trade Naturalization Worked?

o To protect the small Filipinos? Yes. They have continued to make them

small.- After this they made the The Retail Trade Liberalization Act of 2000

o Because merchants were excluded from retail trade,o Retail trade

Act or business of habitually selling to the general public,

goods for consumption.o How did lawyers go around this for the BIG companies?

Habituality means that it is the PRIMARY thing that you do.

SMART (telecommunications provider) and RENTOKOLLER

(leasing tv’s) wanted to sell cellphones and TV’s

• They are not in the retail trade because such activities are

only ancillary acts.

Can the restaurant be owned by a foreigner?

• Yes. Not goods,

Tire case

• PD 714 – exception – the sale by manufacturers to

producers

• They eventually realized that this did not work.

Lecture on Retail Trade Liberalization Act (Sept 15,2005)

1. Principles Applied

2. Exempted Transactions

a. Mix of old and new exemptions

b. #4 some wording are not in the law but in the IRR

3. Liberalized Retailing Enterprises

a. All categories are now nationalized.4. Principles

5. Nationalized Retailing Enterprisea. Category A

b. Even in nationalized Retailing Enterprise – exemptions apply.

c. Chong v. Hernandez - 1st

page

6. 2 Forms of Engagement

a. To invest

b. To engage

7. Grandfather rule

a. Applies when there are two equities owning the retailing business

8. Examples 1

9. DOJ – SEC rule



a. 60 % refers to Filipino ownership (not indicated in slide)

10. DOJ – SEC Rule

a. Does not apply to engaging company

b. 60% rule does not apply to a foreign company that engages.

11. Example 2a. Because of partnership – there is mutual agency – makes him an engager

EVEN THOUGH he only wants to invest.12. Example 3

a. Here is where the DOJ rule applies b. Because John Cross is only investing not Engaging. The Rule applies

c. JDC is deemed 100% Filipino owned.

13. Example 4

a. Verdict

i. The moment you fall below the 60% ruling you apply the

proportionate ruling.

Bulk Sales Law

- made to confront Buyer in good faith and for value

- Beneficiary is the Creditor-supplier

- It is the seller who may be criminally liable in the bulk sales law.

- The contract is declared fraudulent – in order to give cause of action for accion

pauliana.- Check out PEOPLE V. WONG – part of book. CA ruling – Bulk Sales Law

covers only MERCHANT – Definition of merchant – permanent place, buy andsale …..

o Not applicable to a foundry shop.

Really for a contract for a piece of work

Machine shop.

- How about network shops like first quadrant.

o Not currently covered.o But if your not sure, assume that it exists and get a waiver.

Article 1484- Sale of movables on installments

- Remember definition by LEVY

- Cannot cover a K to Sell

- 3 remedieso Specific performance, 1 or more

o Rescission, 2 or moreo Foreclosure of the Chattel Mortgage , 2 or more

- Alternative and Exclusive but not Cumulative.

o Even if undeclared by SC, they would still be that way because they are

contrary to each other. They are all so diametrically OPPOSED.



o But 1 and 3 are both to COLLECT the purchase price –

That’s why there is vertical AND HORIZONTAL barring.

o You are deemed to choose the remedies

when you file in court

give notice of recission (not in specific performance)

take possession with clear manifestation of recission. (not in

specific performance)

• Because in the moment you choose recission you destroyed

the contract. But in specific performance you preservestatus quo. You can still demand recission technically.

• But the great principle of “rescission after impossibility of

specific performance” not applicable in seller buyer.

o You’ve chosen 3 if you’ve filed an action for foreclosure, but that does not

mean you have given up specific performance.

The only time you’ve given it up is when you’ve sold in the public

auction. Now you’re horizontally barred by Recto Law.

Manila Motor Co., Inc. v. Fernandez (1956)

o Situation: Another chattel mortgage by 3rd party

You cannot foreclose CM after foreclosing RM.

Borbon – Buyer first collected on RM then CM, (check this case

OUT) !!

Lecture on Assignment

1. Assignment – Genus salea. It is the nature of the SM that make the species Sale different from the Species

Assignment b. Intangibles – Species of assignment

2. Both are covered by the SOF

a. The species sales requires in writing

b. IN assignment requires public instrument TO

i. Take it out of the SOF

ii. Without the Public instrument

1. It is void as to 3rd parties.

2. REASON: That is the only way to protect the world.

a. Found in CLV book. (expounded)

iii. But in so far as the assignor and assignee –would it be enforceable

between them?1. CLV says even just in WRITING, it would be enforceable.

3. Right – Obligationa. Intangibles are actually expressed in ordinary language as a RIGHT.

b. Owner of right – obligee

i. There is always obligor

c. 3 persons

i. Owner



ii. Assignee

iii. Obligor

1. Example:

a. Documents of Title

i. Baileeii. Obligor

iii. Obligee2. Right without an obligor is no right at all.

4. When a PN is sold, the note belongs to the maker, the PN is sold by a seller to a buyer.

5. Stepping into the shoes of the assignee.

a. IN oblicon – assignment has the effect of Novation.

i. Substitution of the new obligee

1. Does not require for its validity the CONSENT of the obligor.

ii. Substition of the obligor

1. Requires for its validity the CONSENT of the obligee.

6. Usually, the execution of a public instrument is one of the best forms of delivery.

a. Ownership is transferred of a NON NEGOTIABLE DOT when there is

NOTICE. – (exception to the effectiveness of a PUBLIC INSTRUMENT)

b. (exception to the exception) Negotiation

i. Even without registration – it is effective as against the world.

7. Warranty

a. No implied warranty as the solvency of the debtor. b. Exception : express warranty & public knowledge

8. Assignment of Credit in Litigation (1634 CC)

a. It affords to the obligor the LEGAL RIGHT OF REDEMPTION (to be

taken up next week) b. When the assignment is assigned during litigation gives the right to the

obligor for redemption.

c. For speculation – (book discussion)

i. Benefit should go to the obligor-debtor not the speculator

d. Exception – not for speculation (1635 CC)

i. Co-ownership consolidation

ii. Assignment as dation

iii. Assignment is meant to consolidate full title in a tenement

e.

Immovables – Remedies – Lecture – Maceda LAW

1. Divided into two – Maceda Law and Non-Maceda Lawa. Maceda Law

i. Constitutional right to Dwelling

ii. Greater ends than mere legal technicalities

iii. Located IN

1. Residential real esatate



2. Residential condominium unit

iv. YOU Don’t struggle with

1. If it’s installment, financing, etc.

v. AS LONG AS it deals with residential real estate

vi. Confiscatory to a great extentvii. Benefits to the Buyer

1. Less than 2 yearsa. Grace Period – 60 days

i. No penalties – penalties are deemed void. b. Rescission / Cancellation can only take effect after 30

days of notarial notice

i. There is no such thing as automatic

extinguishment of the K.

ii. What you learn in K to sell does not apply here.

iii. SOURCE: Mclaughclin

2. Greater or equal than 2 years (3 periods)

a. Minimum of 60 days. Adds 30 days for every year of

installment

i. Can only avail every 5 years

b. Rescission / Cancellation can only take effect after 30

days of notarial notice

c. Cash Surrender value

i. 50 % + 5% every year but not to exceed 90%.

viii. Pre-termination penalty clause1. Maceda Law – one of the rights granted is pre-termination

WITHOUT PENALTY.

b. Non-Maceda Law

i. Divided into Contract of Sale and Contract to Sell

1. Contract of Sale –

a. REMEDIES

i. Specific performance

ii. Rescission

2. Contract to Sell

1. Contractual Principles – Contained in CONTRACT TO

SELL

a. Consensuality b. Relativity

c. Mutuality

2. REMEDIES

a. No remedies

3. Specific Performance is not available because obligation is

a Contract to DO. – TO enter into a K of Sale4. If there is breach – NO REMEDY



a. Because breach is not really a breach – NON

happening of the Suspensive Condition –

extinguishes the K itself!!!

ii. Pure Contract Consideration

iii. Article 1592 in contrast to Article 11911. GR: in almost all K, the court can stay the recission.

2. Exception: 1592 – after notarial demand, recission will take place. (not cancellation)

iv. Cases1. Adelfa

a. MODE – delivery as a consequence of a VALID

contract of sale

2. Coronel

3. UP v. Delos Angeles

2. Extension of RECTO law to Lease with Option to Purchase

a. Decision of SC

i. Extension – in FORECLOSURE

ii. Purported Leased with Option to Purchase

1. NOT applicable to TRUE lease with Option to Purchase.

b. Equitable Mortgage

i. Mortgage disguised as a sale

ii. Public Policy – protect the buyer.c. Sale on Installements BUT DISGUISED as a Lease with Option to Purchase

i. Bars any RECOVERY whether under specific performance – recission.

Extinguishment of Sale

1. Features of a Retro

a. When K of Sale is void, Right a Retro is also void

b. Parol Evidence, when sale is already enforceable

i. But when valid but unenforceable, cannot be proved by parol

evidence

b. Take note of the non-redemption period – also cited in bar reviewer.

i. Take note of estoppel.

ii. Chuy1. Filing of an action regarding the right of redemption, tools the

running of the period of redemption.c. Right a retro is merely a feature of sale

i. Rightful and lawful exercise of right a retro binds Third party

1. Exception : torrens title

2. Right of redemption versus Option Contract



a. Differences

i. Exceeding of 10 years in Option period

ii. True right a retro

1. Needs tender or even consignation

2. Purpose : Destroy Sale Contractiii. Option Contract

1. Needs notice only2. Purpose: Give Birth to Sale Contract

3. Effects when redemption not made

a. Title consolidated in buyer

b. 30-Day Last Chance Under 1606

i. UP lawyer story – filing and losing a reformation case just to win 30

day last chance

ii. Belief of Equitable Mortgage Must couple –

4. Equitable Mortgage

a. 2 things why equitable mortgage is guarded against

i. circumvention of usury law

ii. against pactum commissorium arrangements. 2088 CC.

a. encumbrance does not transfer property to the buyer. It

is disposition.

b. Example about Debtor- gambler and 2 year redemption period – since it’s an equitable mortgage – does not

mean anything.2. constitutum possessorium

3. failure to redeem does not consolidate title4. Foreclosure of mortgage – rather than judicial consolidation.

5. So long as there is no foreclosure, even after the passage of

redemption period, “seller” can always extinguish the “sale” by

paying-off the Principal contract of Mutuum

5. Badges of Equitable Mortgage 1602 CC

a. Seller remains in possession as Lessee or otherwise – Constitutum

Possesorium.

b. Solemnities – for CM and REM do not apply –

6. Legal Redemptiona. 1619 CC

7. Legal Rights to Redeem

a. Doctrine: Law abhors co-ownership or its perpetuation

b. Co Heirs v. Co Owners – the SM shares are NOT quite the same.

c. Difference is in redemption.

d. Assignment of credit in litigationi. The one’s with no right to redeem – are NOT for speculation – which

the law is trying to prevent.8. Adjoining Owner of Rural Land


Comment: What case ?



9. Adjoining Owner of Urban Land

a. The thrust is to consolidate lots together.

b. Old Spanish provisions. – Runs with a different theory than Land Reform

Law.

10. Exercise of civil code rightsa. From the seller himself – Must not come from anybody else but Seller!!

b. Exceptioni. Actual knowledge – principle of laches – Alonzo v. IAC 1987

ii. Redemptioner brokered himself – also from a case11. Other Legal Rights of Redemption

a.

Date post:	03-Apr-2018
Category:	Documents
Upload:	edward-kenneth-kung
View:	216 times
Download:	0 times