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Sales - Title I - Introduction - Coggle Diagram

- - - - Object
        
        Subject matter of the contract. Must be: Licit, possible, determinate.
        
        If future object - (1) Conditional - contract is subject to it coming into existence before or at the time indicated; (2) Aleatory - one of the parties bears the risk of it coming into existence.
      - Cause
        
        the immediate, direct and proximate reason which justifies the creation of an obligation through the will of the contracting parties”
        
        Differs from object in that cause deals with why the respective parties to a contract enter into it. Whereas the object of a contract remains the same.
        E.g. in a contract of sale involving a piece of land, the object is the subject matter i.e. the land. Whereas the cause for the buyer it is the obligation of the vendor to deliver the land, whereas for the vendor the cause is the obligation of the buyer to pay the price for the land.
      - Consent
        
        Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute.
        
        Presumption that the consent is given - intelligently, freely, and spontaneously.
        
        Consent can either by express, implied or presumptive.
        
        Offer
        
        An offer is a unilateral proposition which one party makes to the other for the celebration of a contract. It exists only if the contract can come into existence by mere acceptance by the offeree, without any further act on the part of the offeror.
        
        Must be: Definite, Complete and Intentional.
        
        Counter Offer - if it changes the terms of the offer, then counter-offer. (Villongco)
        
        Acceptance
        
        “It is necessary that the acceptance be unequivocal and unconditional, and the acceptance and the proposition shall be without any variation whatsoever; and any modification or variation from the terms of the offer annuls the latter and frees the offeror” (Tolentino)
        
        Concurrence of the minds on the object and cause of the contract
- - - - Nominate - because given a special name/designation by the CC
      - Principal - because it does not depend on another contract for existence.
      - Commutative - the thing sold is considered the equivalent of the price. (Contract may be aleatory such as lottery tickets - sale of hope)
      - Onerous - the thing sold is conveyed in consideration of the price.
      - Bilateral - because both contracting parties bound to fulfill correlative obligations (deliver and transfer ownership vs pay price
      - Consensual - perfected by mere consent without further act.
      - Other Elements
        
        Natural - those deemed to exist in certain contracts even without stipulation (e.g. warranty in NCC 1548)
        
        Accidental - those which may be present or absent depending on the stipulation of the parties
  - - - Determinate or capable of being made determinate; covers both real and personal property. (NCC 1460)
        
        Buyer can only claim right over the object of the deed of sale.
        
        Sale of credit and other incorporeal rights covered by other provisions, not contract of sale.
        
        If onerous governed by provisions on sale
    - - Generally -
        
        Seller - buyer's promise to pay the price;
        
        Buyer - seller's promise to deliver the thing sold. (1458)
        
        Price can be in money or its equivalent. Excludes goods or merchandise
    - - Meeting of the minds; Requires capacity to contract.
        
        Generally: Acceptance of payment indicates consent
        
        Exception: No consent needed in cases of:
        
        Expropriation;
        
        Ordinary execution sale;
        
        Judicial foreclosure;
        
        Extra-judicial foreclosure
        
        Exception - Even if with consent, void - Sale of conjugal property without the consent of one of the spouses.
        
        Stages of contracts - Article 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.
        
        From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. (1450a)
    - - General Rule - title passes to the buyer upon delivery of the thing sold.
        Exception - if there is a condition stipulating that the buyer reserves ownership upon a condition such as full payment.
        
        Article 1461. Things having a potential existence may be the object of the contract of sale.
        The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
        The sale of a vain hope or expectancy is void. (n)
        Article 1462. The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
        There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. (n)
        Article 1465. Things subject to a resolutory condition may be the object of the contract of sale. (n)
        Article 1503. When there is a contract of sale of specific goods, the seller may, by the terms of the contract, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission to the buyer.
        Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in the goods. But, if except for the form of the bill of lading, the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be deemed to be only for the purpose of securing performance by the buyer of his obligations under the contract.
        Where goods are shipped, and by the bill of lading the goods are deliverable to order of the buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent, the seller thereby reserves a right to the possession of the goods as against the buyer.
        Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the goods, although the bill of exchange has not been honored, provided that such purchaser has received delivery of the bill of lading indorsed by the consignee named therein, or of the goods, without notice of the facts making the transfer wrongful. (n)
- - - - Contracts between Spouses (NCC 1490 and 1492)
        
        Applicability to common law spouses (FC 133, 147-148)
        
        Art. 133. From the common mass of property support shall be given to the surviving spouse and to the children during the liquidation of the inventoried property and until what belongs to them is delivered; but from this shall be deducted that amount received for support which exceeds the fruits or rents pertaining to them. (188a)
        Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.
        In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former’s efforts consisted in the care and maintenance of the family and of the household.
        Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation.
        When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation. (144a)
        Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit.
        If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding Article.
        The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith. (144a)
        
        D. Special Disqualifications (NCC 1491-1492)
        
        Judges and Lawyers + other employees in judiciary
        
        Cannot acquire: Property whose sale or assignment is the subject of litigation wherein parties are involved. - General Rule: So long as litigation is on-going, any sale/acquisition of property is prohibited.
        
        In litigation - from the moment it becomes subject to judicial action.
        
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        Public Officers and Experts
        
        Public officers - Cannot acquire: Property of the State or any subdivision thereof or of any GOCC under their administration.
        
        P. Officer - property being sold or owned by agency where P. Officer works.
        
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        Void Sale - public interest (1409 par. 1) Nullity cant be cured because even if subsequent contract, same limitations apply (e.g. property of state, etc.)
        
        Guardians, Agents and Administrators
        
        Guardians - Cannot acquire: Property of persons under their guardianship
        
        Agents - Cannot acquire: property whose administration or sale has been entrusted to them. UNLESS consent of the principal is given.
        Does not apply to extra-judicial foreclosure of mortgage - mortgagee can purchase at his own sale. (bc power to foreclose is not an ordinary agency)
        
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        Voidable - private property - can be ratified by execution of a new contract. (technically, void on its face first contract, but if 2nd contract executed without defects then valid from date of 2nd contract)
        
        Other Disqualifications
        
         Aliens who are disqualified to purchase private agricultural lands
         Unpaid seller having a right of lien or having estopped the goods in transit, who is prohibited from buying the goods
         Officer conducting the execution sale or his deputies.
        
        Ancestral domains of ICCs/IPs cannot be sold or disposed of, except to/among members of the same, subject to their customary laws and traditions (RA 8371, Sec. 5, 8a) .
        Under RA 6731, Sec. 6 (Organic Act for the ARMM) and RA 6766, Sec. 7 (Organic Act for the CAR), lands of ancestral domain titled or owned by an ICC shall not be disposed of to non members, unless authorized by the Regional Assembly
        
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        Art. 1491.The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:
        (1) The guardian, the property of the person or persons who may be under his guardianship;
        (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given;
        (3) Executors and administrators, the property of the estate under administration;
        (4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been entrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale;
        (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession.
        (6) Any others specially disqualified by law.
        Art. 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption, compromises and renunciations.
        
        Due to fiduciary relationship between persons disqualified and owners of the properties.
        
        Article 1490. The husband and the wife cannot sell property to each other, except:
        (1) When a separation of property was agreed upon in the marriage settlements; or
        (2) When there has been a judicial separation of property under article 191. (1458a)
        Article 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption, compromises and renunciations. (n)
      - Art. 73. Either spouse may exercise any legitimate profession, occupation, business or activity without the consent of the other. The latter may object only on valid, serious, and moral grounds.
        In case of disagreement, the court shall decide whether or not:
        (1) The objection is proper; and
        (2) Benefit has occurred to the family prior to the objection or thereafter. If the benefit accrued prior to the objection, the resulting obligation shall be enforced against the separate property of the spouse who has not obtained consent.
        The foregoing provisions shall not prejudice the rights of creditors who acted in good faith. (117a)
        Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.
        In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (206a)
        Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.
        In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (165a)
        Art. 125. Neither spouse may donate any conjugal partnership property without the consent of the other. However, either spouse may, without the consent of the other, make moderate donations from the conjugal partnership property for charity or on occasions of family rejoicing or family distress. (174a)