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VI. OBLIGATIONS OF THE VENDOR/SELLER A. IN GENERAL - Coggle Diagram

- - - - TRANSFER OWNERSHIP
        (Arts. 1458-1459, 1478, 1495-1501)
        
        DELIVER THE THING
        (Art. 1477, 1495-1497)
        
        DELIVERY -> OWNERSHIP
        
        ACTUAL
        
        CONSTRUCTIVE
        Article 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. (n)
        
        VENDOR BOUND TO
        
        TRANSFER OWNERSHIP
        
        DELIVER THE THING
        
        WARRANT THE THING
        Article 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale. (1461a)
        
        RECKONING POINT:
        OWNERSHIP TRANSFERRED ON
        DELIVERY TO VENDEE
        Article 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him
        in any of the ways specified in articles 1497 to 1501,
        or
        in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. (n)
        
        WHEN DELIVERED:
        PLACED IN VENDEE'S
        CONTROL & POSSESSION
        Article 1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. (1462a)
        
        WAYS OF DELIVERY
        
        1497-1501
        
        ANY OTHER MANNER SIGNIFYING AN AGREEMENT THAT POSSESSION FROM VENDOR TO VENDEE
        
        What is an example of
        actual or constructive delivery?
        
        CONSTRUCTIVE DELIVERY
        Article 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
        With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept. (1463a)
        
        CONSTRUCTIVE DELIVERY:
        EXECUTION OF DOAS PUBLIC INSTRUMENT
        Possession was already transferred to Miranda, through constructive delivery when the Deed of Absolute Sale, a public instrument, was executed conformably to Article 1498 of the Civil Code.
        (Miranda vs. Spouses Mallari)
        
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        CONTRACT OF SALE
        
        ONE OBLIGATES HIMSELF TO
        a. TRANSFER OWNERSHIP
        b. DELIVER DETERMINATE! THING (OBJECT)
        
        OTHER TO PAY
        a. PRICE CERTAIN IN:
        -MONEY
        -EQUIVALENT
        Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
        
        RIGHT TO TRANSFER
        UPON DELIVERY
        Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)
        
        RESERVATION UNTIL FULL PAYMENT
        Article 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price. (n)
        
        VENDOR'S OBLIGATIONS:
        
        TRANSFER OWNERSHIP
        
        DELIVER
        
        WARRANT
        Article 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale. (1461a)
        
        RECKONING POINT:
        DELIVERY = OWNERSHIP
        Article 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. (n)
        
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        ABSOLUTE OR CONDITIONAL
        A contract of sale may be absolute or conditional. (1445a)
        
        a. Owner must have right to transfer ownership (Art. 1459)
        Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)
        
        b. Sale by a person not the owner at the time of delivery (Art. 1505)
        
        SELLER:
        NOT OWNER
        NOT AUTHORIZED
        BUYER:
        ACQUIRES NO BETTER TITLE
        THAN SELLER
        Article 1505. Subject to the provisions of this Title, 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 to the goods than the seller had,
        
        ii. Factors Act, Recording Laws, Torrens System
        
        (1) The provisions of any factors' act, recording laws, or any other provision of law enabling the apparent owner of goods to dispose of them as if he were the true owner thereof;
        
        iii. Validity of the sale under statutory power or Court Order to Sell
        
        (2) The validity of any contract of sale under statutory power of sale or under the order of a court of competent jurisdiction;
        
        iv. Sale in merchant’s store, market, or fair
        
        (3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the Code of Commerce and special laws. (n)
        
        i. Exception: Estoppel (Arts. 1434, 1437)
        
        IF LATER SELLER BECOMES OWNER,
        TITLE PASSES TO BUYER/GRANTEE
        BY OPERATION OF LAW
        Article 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee.
        
        IF A PERSON MISLED THIRD PERSONS WITH RESPECT TO OWNERSHIP/REAL RIGHT
        THEN PRECLUDED FROM ASSERTING
        LEGAL TITLE/INTEREST, PROVIDED:
        Article 1437. When in a contract between third persons concerning immovable property, one of them is misled by a person with respect to the ownership or real right over the real estate, the latter is precluded from asserting his legal title or interest therein, provided all these requisites are present:
        
        KNOWLEDGE
        -FRAUDULENT/WRONGFUL CONCEALMENT of FACTS
        -KNOWN TO PARTY ESTOPPED
        (1) There must be fraudulent representation or wrongful concealment of facts known to the party estopped;
        
        INTENTION
        (2) The party precluded must intend that the other should act upon the facts as misrepresented;
        
        PARTY MISLED WAS:
        -UNAWARE OF TRUE FACTS
        -ACTING IAW MISREPRESENTATION
        (3) The party misled must have been unaware of the true facts; and
        (4) The party defrauded must have acted in accordance with the misrepresentation.
        
        EXCEPTION:
        OWNER PRECLUDED FROM DENYING SELLER'S AUTHORITY TO SELLER
        unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell.
        
        EXCEPTIONS:
        Nothing in this Title, however, shall affect:
        
        APPARENT OWNER
        (1) The provisions of any factors' act, recording laws, or any other provision of law enabling the apparent owner of goods to dispose of them as if he were the true owner thereof;
        
        STATUTORY POWER OF SALE
        
        ORDER OF COURT
        (2) The validity of any contract of sale under statutory power of sale or under the order of a court of competent jurisdiction;
        
        PURCHASES UNDER SPECIAL LAWS:
        -MERCHANT'S STORE
        -FAIRS
        -MARKETS
        (3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the Code of Commerce and special laws. (n)
        
        EXPROPRIATION
        Titles acquired by the State by way of expropriation are deemed
        cleansed of whatever previous flaws may have attended these titles.
        [MANOTOK REALTY, INC. V. CLT REALTY DEVELOPMENT CORPORATION, 582 SCRA 583 (2009)]
        
        c. Sale by a person having a voidable title
        
        SELLER:
        VOIDABLE TITLE NOT AVOIDED AT SALE
        BUYER:
        
        GOOD FAITH
        
        FOR VALUE
        
        WITHOUT NOTICE OF SELLER'S DEFECT
        Article 1506. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith, for value, and without notice of the seller's defect of title. (n)
        
        EQUIVALENT TO TITLE
        
        POSSESSION
        
        MOVABLE
        
        GOOD FAITH
        Article 559. The possession of movable property acquired in good faith is equivalent to a title.
        
        UNLAWFUL DEPRIVATION -> RECOVERABLE
        Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same.
        
        PUBLIC SALE:
        RECOVERY REQUIRES IMBURSEMENT
        If the possessor of a movable lost or which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. (464a)
        
        So no reimbursement under this?
        
        d. Contract on Sale or Return;
        Contract on Approval (Art. 1502)
        
        "ON SALE or RETURN" DELIVERY -> OWNERSHIP PASSES ON DELIVERY
        Article 1502. When goods are delivered to the buyer "on sale or return" to give the buyer an option to return the goods instead of paying the price, the ownership passes to the buyer on delivery,
        
        REVEST OWNERSHIP BY
        
        RETURNING/TENDERING WITHIN
        
        FIXED/REASONABLE TIME
        but he may revest the ownership in the seller by returning or tendering the goods within the time fixed in the contract, or, if no time has been fixed, within a reasonable time. (n)
        
        IF OWNERSHIP PASSES ON:
        APPROVAL/TRIAL/SATISFACTION/SIMILAR TERMS, THEN:
        When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms, the ownership therein passes to the buyer:
        
        REASONABLE TIME = QUESTION OF FACT
        What is a reasonable time is a question of fact. (n)
        
        WHEN HE SIGNIFIES ACCEPTANCE
        (1) When he signifies his approval or acceptance to the seller or does any other act adopting the transaction;
        
        IF NOT SIGNIFIED:
        
        RETAINS GOODS
        
        NO NOTICE OF REJECTION
        
        EXPIRATION OF FIXED/REASONABLE TIME
        (2) If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time.
        
        i. Express Reservation (Art. 1478)
        
        STIPULATION:
        OWNERSHIP SHALL NOT PASS
        UNTIL FULLY PAID THE PRICE
        Article 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price. (n)
        
        ii. Implied Reservation (Art. 1503)
        
        CONDITIONAL SALE:
        SELLER MAY RESERVE POSSESSION/OWNERSHIP
        UNTIL CONDITIONS FULFILLED
        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.
        RESERVATION MAY BE DONE
        DESPITE DELIVERY
        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.
        
        BILL OF LADING
        
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      - VENDOR IS BOUND TO
        
        TRANSFER OWNERSHIP
        
        DELIVER OBJECT OF THE SALE
        
        WARRANT OBJECT OF THE SALE
        Article 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale. (1461a)
    - - UNLESS OTHERWISE STIPULATED
        unless there is a stipulation to the contrary. (1455a)
        
        DST
        CAN BE PAID BY BUYER
        The contract here which is alleged to include the condition that the buyer shall shoulder the taxes is a Contract of Sale. In the Busuego case, there was merely a Contract to Sell for the duration of which the party who shall be liable for the taxes about to be due is the buyer as per agreement. In the case at bar, what was assumed by the vendee was the liability for taxes and other expenses "relative to the execution and/or implementation" of the Deed of Absolute Sale "including among others, documentation, documentary and science stamps, expenses for registration and transfer of titles . . ." This clause was stipulated for the purpose of clarifying which of the parties should bear the costs of execution and implementation of the sale and to comply with Article 1487 of the Civil Code which states:
        "ART. 1487 — The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is a stipulation to the contrary."
        Moreover, the taxes mentioned in the clause here refer to those necessary to the completion of the sale and accruing after the making of such sale on April 11, 1990 such as documentary stamp tax and capital gains tax.
        ||| (Testate Estate of Lim v. City of Manila, G.R. No. 90639, [February 21, 1990], 261 PHIL 602-612)
        
        RPT = ACTUAL USE
        In the Busuego case, the assumption by the vendee of the liability for real estate taxes prospectively due was in harmony with the tax policy that the user of the property bears the tax. In the instant case, the interpretation that the plaintiff-appellant assumed a liability for overdue real estate taxes for the periods prior to the contract of sale is incongruent with the said policy because there was no immediate transfer of possession of the properties previous to full payment of the repurchase price.||| (Testate Estate of Lim v. City of Manila, G.R. No. 90639, [February 21, 1990], 261 PHIL 602-612)
        
        TAX POLICY: USER BEARS RPT
        
        EXEMPT vs NON-EXEMPT
        DST BORNE BY NON-EXEMPT
        As a rule, the liability to pay documentary stamp taxes falls on any of the parties. The parties may, however, agree on who shall shoulder the amount due. Nonetheless, when one of them enjoys exemption from paying documentary stamp taxes, the liability falls on the other party who is not tax-exempt.||| (Domato-Togonon v. Commission on Audit, G.R. No. 224516, [July 6, 2021])
        
        LGUs MAY TAX MORE
        (TRANSFER TAX)
        As to the taxes on the transfer of real property ownership, Section 135, in relation to Section 151, of the Local Government Code states that cities are allowed to impose tax on the sale or on any other mode of transferring ownership or title of real property... (Domato-Togonon v. Commission on Audit, G.R. No. 224516, [July 6, 2021])
        
        SELLER BEARS LGU TAXES
        The duty of paying the tax imposed shall be for the seller or transferor's account.||| (Domato-Togonon v. Commission on Audit, G.R. No. 224516, [July 6, 2021])
        
        CGT ON BUYER -> BIR REIMPOSES CGT
        However, BIR still re-imposes CGT if you designate the buyer to pay the CGT.