Article 1463:: Example: Buyer Has A Share of 1/3 (100 Out of 300) of The Bodega

Article 1463:
The sole owner of a thing may sell an undivided interest therein.
• Covers the sale of an undivided interest by a sole owner. He or she may

sell the entire thing or on a portion of it (aliquot part of a whole).
• It would be considered in a legal sense, a sale of an undivided interest

when the sole owner makes the buyer a co-owner (for example farmland).
The co-owner has now the full ownership on his portion(which is now an
undivided interest upon termination of co-ownership) and can sell it even
without the consent of the vendor/ other co-owner.
Article 1464:
In the case of fungible goods, there may be a sale of an undivided share of
specific mass, though the seller purports to sell and the buyer to buy a definite
number, weight or measure of the goods in the mass, and though the number,
weight or measure of the goods in the mass in undetermined. By such sale the
buyer becomes owner in common of such a share of the mass as the number,
weight or measure bought bears to the number, weight or measure of the
mass. If the mass contains less than the number, weight or measure bought,
the buyer becomes the owners of the whole mass and the seller S bound to
make good the deficiency from goods of the same kind and quality, unless a
contrary intent appears.
Sale of an undivided share of a specific mass

1. Fungible goods – interchangeable; goods of any unit is equivalent to
any other unit; a commodity money (i.e. grain, oil, wine, gasoline)
✓ One litre of gasoline is equivalent to monetary value of one litre of
gasoline.
✓ Non-fungible goods – non interchangeable (i.e. real estate,
diamond)
2. Effect: may be a sale of undivided interest if the mass is specific or
capable of being determinate.
✓ Example: buyer has a share of 1/3 (100 out of 300) of the bodega,
then 2/3 (200 out of 300) for the owner. Therefore, they are co-
owners. If the mass only has 75 sacks of rice, the buyer becomes
the owner of the whole mass then the seller must supply whatever
is lacking of a same kind and quality.
3. Risk of loss: whole mass is at risk of all the parties interested in it, in
proportion to their various holdings
4. Subject Matter: incorporeal/intangible right. Intention of the parties

passes/transfers ownership.
Article 1465:
Things subject to a resolutory condition may be the object of the contract of
sale.
✓ Resolutory condition – uncertain event upon the happening of which

the obligation subject to it is extinguished. If the resolutory condition
happens, the vendor cannot transfer ownership of what he sold since there
is no object.
▪ Kapag nafulfill ay tapos na ang kontrata.
✓ Future event – accurately decribed with specific time period
▪ Right to repurchase w/n 10 years
▪ Right of usufruct until the owner becomes a lawyer
✓ Conditional owner within the specified time period
✓ Absolute owner after the specified time period
Article 1466:
In construing (understanding) a contract containing provisions characteristic of
both the contract of sale and of the contract of agency to sell, the essential
clauses of the whole instrument shall be considered.
✓ Distinctions Between a ‘Contract of Sale’ and an ‘Agency to Sell’

(like a Consignment for Sale)
✓ Contract of agency – person binds himself to render some service
or to do something in representation of another, with the authority of
the latter
Article 1467:
A contract for the delivery at a certain price of an article which the vendor in
the ordinary course of his business manufactures or procures for the general
market, whether the same is on hand at the time or not, is a contract of sale,
but if the goods are to be manufactures specially for the customer and upon
his special order, and not for the general market, it is a contract for a piece of
work.
✓ Distinctions between a Contract of Sale and a Piece of Work

✓ Contract for a piece of work – contract binds himself to execute
a piece of work for the employer
✓ The rule: contracts for the sale of goods in an amount greater than $500
must be evidenced by some writing to be enforceable.
✓ Schools of taught
a) Massachusetts Rule : If specially done at the order of another, this is
a contract for a piece of work. We follow Massachusetts Rule in the
Phi;ippines
b) New York Rule : If the thing already exists, it is a SALE, if not, WORK
c) English Rule : If material is more valuable, SALE; if skill is more
valuable, WORK.
Article 1468:
If the consideration of the contract consists partly in money, and partly in
another thing, the transaction shall be characterized by the manifest intention
of the parties. If such intention does not clearly appear, it shall be considered a
barter if the value of the thing given as part of the consideration exceeds the
amount of money or its equivalent; otherwise, it is a sale.
✓ Contract of barter/exchange – By contract of barter or exchange, one of

the parties binds himself to give one thing in consideration of the other’s
promise to give another thing. [Art. 1638]
Rules to determine whether contract is one of sale or barter

a) First rule – intent
b) If the intent does not clearly appear –
1) If the thing is more valuable than money – BARTER
2) If 50-50 – SALE
3) If thing is less valuable than the money – SALE
Article 1477.
The ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof.
When Ownership is Transferred

✓ Ownership is not transferred by perfection but by delivery.
(This is true even if the sale has been made on credit; payment of the
purchase price is NOT essential to the transfer of ownership, as long as the
property sold has been delivered. (Gabriel et. al. v. Encarnacion et. al.)
A contrary stipulation is, however, VALID.
KINDS OF DELIVERY
a. Actual (Art. 1497, Civil Code)
b. Constructive (Arts. 1498 – 1601, Civil Code), including “any other
manner signifying an agreement that the possession is transferred.” (Art.
1496, Civil Code)

Article 1463:: Example: Buyer Has A Share of 1/3 (100 Out of 300) of The Bodega

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Article 1463:

The sole owner of a thing may sell an undivided interest therein.

• Covers the sale of an undivided interest by a sole owner. He or she may

• It would be considered in a legal sense, a sale of an undivided interest

Sale of an undivided share of a specific mass

4. Subject Matter: incorporeal/intangible right. Intention of the parties

✓ Resolutory condition – uncertain event upon the happening of which

✓ Distinctions Between a ‘Contract of Sale’ and an ‘Agency to Sell’

✓ Distinctions between a Contract of Sale and a Piece of Work

✓ Contract of barter/exchange – By contract of barter or exchange, one of

Rules to determine whether contract is one of sale or barter

When Ownership is Transferred

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