Sales Final Reviewer

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When is there warranty?

1. Buyer is ignorant
2. Buyer is expected to have an opinion and seller has no
opinion ( NO WARRANTY)

If a person has ample opportunity to investigate the


land before purchase and seller did not prevent such
an investigation and the purchase really investigates
then the purchaser is not allowed to say that the
vendor made false representations.
Dealers talk like excellent cannot be considered as an
express warranty. LITTLE EXAGGERATION IS OKAY BY
LAW. This is in accordance with the civil law maxim
simplex commendation non obligat or caveat emptor
The seller should deliberately violate the truth to be
liable.

Art 1547
Implied warranties against eviction and Hidden defect

Actions based on implied warranties prescribe in 10yrs


imposed by law.

The seller is responsible for:


1. Own acts
2. His pre-decessors in interest.
He is not responsible for dispossession:
1. Acts imputable to the buyer
2. Fortuitous events
Essential elements for eviction:
1.
2.
3.
4.

Final Judgment
Purchaser deprived in whole or in part
Deprivation was by virtue of a right prior to sale
Vendor has been previously notified of the complaint
for eviction at the instance of the purchaser.

Generally, it is the buyer in good faith may sue for


breach of warranty against eviction. If he knew of
possible dangers, he assumed the risk of eviction.
Suit for breach can be directed only against the
immediate seller NOT sellers of the seller.
UNLESS: The immediate seller has expressly
assigned to the buyer his own right to sue his
own seller.

Art 1548
Warranty in case of Eviction

Natural element in the contract of sale.


The buyer and seller are of course allowed to add to,
subtract from, or suppress this legal obligation on the
part of the seller.
Vendors liability for warranty against eviction in a
contract of sale is generally waivable and may be
renounced by the vendee.
Govt is not liable for the eviction of the purchaser at a
tax sale.

Buyer is allowed to enforce the warranty against the


seller or against the sellers of his own immediate
seller.
Buyer does not appeal from judgment of his eviction
(final) Seller is still liable for the eviction.
Even if the buyer who instituted the suit against the 3 rd
person seller is still liable (if buyer is defeated).

Art. 1549

Vendee need NOT appeal.

Art. 1550

Rule applies only if there was reasonable opportunity


to interrupt the prescription; otherwise, it would be
unfair.

Art. 1551

The buyer bought a land then subsequently was sold


at public auction for the non-payment of taxes by the
seller. Seller is responsible only if buyer did not know
at the time of sale that seller had not paid the taxes
thereon.

Value at the time of eviction should be returned


Solutio Indebiti (Undue Payment)
Where the vendee knew of the danger of eviction at
the time he purchased the land from the vendor and
assumed its consequences, the latter is not obliged to
restore the former price of the land at the time of
eviction completely exempt from liability.

Art. 1555
What the seller must give in case of eviction (VICED)
V value

Art. 1552

I income

Eviction in case of Judicial Sales

C costs

Purchaser of good faith at a judicial sale is entitled to


recover the purchase money from the officer if the
funds are still in his hands or from the judgment
debtor.
A buyer in a execution sale is a purchaser in badfaith if
he had prior knowledge of a 3 rd party claim filed with
the sheriff before the scheduled execution sale.

E expenses
D damages and interests and ornamental expenses if the
seller was in badfaith.

Art. 1553
Effect of stipulation waiving liability for eviction

Vendors in bad faith his knowing beforehand at the


time of the sale, of the presence of the fact giving rise
to eviction and its possible consequence.
Vendees bad faith He is not entitled to warranty
against eviction nor is he entitled to recover damages.

Art. 1554
Effects:

If the court does not order the buyer to deliver the


income or fruits to the winner, said buyer would be
entitled to them. This is fair for after all, the seller was
using the price money witout interest.

Why is rescission not a remedy in case of TOTAL Eviction?

When the one demanding the return whatever he has


received and when this cannot be done rescission
cannot be carried out. For he can no longer restore the
subject matter of the sale to the vendor.
Incase of partial eviction, rescission may still be
allowed with respect to the subject matter that
remains (Art 1556).

Art. 1556

Rules in case of partial eviction

Deals with a case of partial eviction.


Remedy is either:
a. Rescission
b.
Enforcement
of
warranty
If rescission is chosen, there should be NO new
encumbrances like mortgage.

Art. 1560

When enforcement of warranty is the proper remedy?

If circumstances set forth in par 1 are not present


(presence of new encumbrances) remedy is
Enforcement of Warranty.

Art. 1557

Necessity of Final Judgment judgment should be final


before the warranty can be enforced.

Art. 1558

Another essential requisite before a vendor may be


legally liable for eviction is that, he should be
summoned in the suit for eviction at the instance of
the vendee.
Notice must be the notice in the suit for eviction, NOT
the notice in the suit for the breach of warranty.
It is sufficient that the buyer notifies the seller of:
a. His application
b. Any opposition thereto
Object is to give the vendor the opportunity to show
tht the action against the buyer is unjust.

Art. 1559

Seller must be made co-defendant with the buyer


This article only applies when only the buyer is the
defendant, when the buyer is the petitioner in a

registration proceeding and he loses, the formal notice


here is not a condition precedent.
Buyer may use the Rules of Court in bringing the seller
to the case.

Defect contemplated in this article is really a sort of


hidden defect but remedy is similar to that provided in
case of eviction. The servitudes are not legal
easements for these exist by virtue of law it cannot
be claimed that the buyer was ignorant thereof
Remedies: If made within a year:
a. Rescission
b. Damages
If after 1yr Only damages.
NO REMEDY if the burden is registered, EXCEPT if
there is an express warranty that the thing is free from
all burdens and encumbrances.
Effect of form of sale: This article is applicable whether
sale is:
a. In public instrument
b. In private instrument
c. Made orally
WARRANTY AGAINST HIDDEN DEFECTS OF OR
ENCUMBRANCES UPON THE THING SOLD

Art. 1561
Requisites to recover because of hidden defects (HEOIA)
A. Defect must be hidden (not known and could not have
been known)
B. Defect must exist at the time the sale was made
C. Defect must ordinarily have been executed from the
contract
D. Defect must be important (UNFIT/ decreases FITNESS)
E. Action instituted within statute of limitations.

Unfit for the use intended must have been stated in


the contract itself, or can be inferred from the nature
of the object or from the trade or occupation of the
buyer.
Hidden:
a. What may be hidden with respect to 1
person may not be hidden with respect to
another
b. Due to a difference in grade or quality, it
does not necessarily mean that the defect is
hidden.
c. Defects are sometimes referred to as
REDHIBITORY DEFECTS
If a buyer examines the sold item at the time of
purchase and questions only after 3yrs, seller has not
made any misrepresentation NO BREACH OF THE
WARRANTY.
Action prescribes in 6 months (Art. 1571)

Art. 1562

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