Sales Lecture 1.docx

Sales Lecture 1

THE LAW ON SALES Art. 1458 By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money. STAGES OF A CONTRACT OF SALE 1. Preparation

CONTRACT OF SALE

CONTRACT TO SELL

Non-payment of the purchase price is a negative resolutory condition, meaning, the sale becomes ineffective upon the happening of such condition (non-payment) After delivery of the object, the seller loses ownership over it

The payment in full is a positive suspensive condition, meaning, if the price is not paid, the obligation to deliver and to transfer ownership does not become effective Whether there is delivery or not, the seller retains the ownership of the object

-also known as conception or generation -the period of negotiation and bargaining, ending at the moment of agreement of the parties

Art. 1479 -A promise to buy and sell a determinate thing for a price certain is reciprocally demandable (bilateral reciprocal contract)

2. Perfection -also known as the birth of the contract 3. Consummation - otherwise called the death of the contract - the fulfilment or performance of the terms agreed upon in the contract CHARACTERISTICS      

Bilateral Consensual Commutative – the thing sold is equivalent to the price paid and vice versa Onerous – the thing sold is conveyed in consideration of the purchase price Principal Nominate

-An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. OPTION CONTRACT - a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy a certain merchandise or property from another person at any time within the agreed period at a fixed rate - separate and distinct contract from the contract where the parties may enter into upon the consummation of the option Art. 1482

ABSOLUTE SALE

Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of he perfection of the contract.

- No condition is imposed and ownership passes to the vendee upon delivery of the thing subject of the sale

Part of the purchase price

- Neither a stipulation in the deed that title to the property sold is reserved in the seller until full payment of the price, nor one giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period CONDITIONAL SALE -Subject to a certain contingency or condition -Ownership is not to vest in the buyer until the happening of the condition

CONTRACT OF SALE

CONTRACT TO SELL

Title over the property passes to the buyer upon delivery unless there is a contrary agreement

Ownership is retained by the seller whether or not there is delivery. Ownership passes to buyer only upon full payment of price.

EARNEST MONEY

When it is given, the buyer is bound to pay the balance of the agreed purchase price If the sale does not materialize, the earnest money paid must be returned, unless a contrary agreement had been stipulated

OPTION MONEY A distinct consideration for an option contract which fives the buyer a specific period within which to purchase the thing Even if option money is paid by the would-be-buyer, he is not bound to buy the thing If the buyer decides not to buy the thing he cannot recover the option money he paid as consideration for the option contract

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Sales Lecture 2

At the time of delivery, he must be the owner of the object of the contract of sale.

The Law on Sales Art. 1460 Art. 1459  The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. Art. 1347 All things which are not outside the commerce of men, including future things, may b the objet of a contract. All rights which are not intransmissible may also be the object of contracts. TRANSMISSIBLE RIGHTS  

Right to usufruct Right to inheritance already acquired, but not future inheritance

INTRANSMISSIBLE RIGHTS   

Right to suffrage Right to support Marital rights

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A thing is determinate when it is particularly designated or physical segregated from all other of the same class. The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties

Art. 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.

Emptio Rei Speratae - The purchase of an expected thing subject to the condition that the thing will come into existence

Can services be the object of sale? No. Services are not determinate things and no transfer of ownership is available in services.

If the contract of sale is made dependent upon the existence of the thing such that if it did not come into existence, the contract is not effective, and the buyer will have no obligation to pay the price

CLASSIFICATION OF ILLICIT THINGS Emptio Spei Illicit per Se -The purchase of a hope or expectancy -by its nature, it is heinous, immoral, and wrongful -house of prostitution Illicit per Accidens -illegal only because there is a law prohibiting it -sale of parcel of land to a disqualified alien

Art. XII, 1987 Constitution Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law. Art. 1459 The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.

If the contracting parties intended the contract of sale to exist at all events, whether or not the expected thing will come into existence such that the buyer will have to pay the purchase price, the contract becomes aleatory in nature Art. 1466 In construing 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. QUIROGA V. PARSONS HARDWARE CO. Facts: The defendant was granted by the plaintiff of the exclusive right to sell as an “agent” Quiroga Beds in the Visayas at the invoice price in Manila. The agreement was for the defendant to pay for the bed with a discount from 20% to 25% as commission on the sales. The defendant shall pay the plaintiff whether the beds are sold or not. The plaintiff claims that the defendant is his “agent” while defendant says he was merely a purchaser. Issue:

At the time of perfection of the contract, the seller need not be the owner of the thing or right sold.

Is there a contract of sale or a contract of agency to sell?

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Ruling:

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There is a contract of sale in the instant case. The plaintiff was under obligation to supply the bed and the defendant was under obligation to pay the price regardless of whether or not he sold the beds. If it were an agency, the agent receives the thing for the purpose of selling it, and does not pay the price. He merely delivers the price he realized from the sale of the thing to a third person. He returns the thing, if he failed to sell it. The fact that “discount” or so-called commission has been given is immaterial.

SALE

AGENCY

The buyer cannot return the goods/property when the sale is defective. The seller warrants the goods/property sold.

The agent returns the goods/property if he was not able to sell the same. The agent does not make any warranty as long as he acts within his authority and in the name of the principal. The agent must follow the instructions of the principal.

The seller has full freedom to enter into any terms and conditions on the contract of sale.

CONSTRUCTIVE DELIVERY 1. 2. 3. -

4. -

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PRIMORDIAL TEST Art. 1470 

Gross inadequacy of price does not affect a contract of sale, except as it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract.

When delivery is effected not by actually transferring the possession of the thing but by legal formalities or by symbolic tradition

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Tradicion Symbolica Delivery of certain symbols or things representing the thing being delivered Keys or titles Tradicion Instrumental Delivery of the instrument of conveyance to the grantee by the grantor Tradicion Longa Manu Delivery through pointing of the thing (movable) within sight, by the grantor to the grantee but at the time of the transaction, the thing could not be placed yet in the hands of the grantee, or on order be delivered to his house or designated place Tradicion Brevi Manu Delivery through the grantee’s continuation of is possession over which the thing delivered but now under the title or ownership Tradicion Constitutum Possessorium owner’s continuous possession of he property he had sold o another person, and his present possession thereof is no longer that of an owner but under the capacity like that of a lessee Tradicion by operation of law Delivery of the things by operation of law such as intestate succession where inheritance is transferred to the heir upon death of the decedent

Transfer of possession does not necessarily mean transfer of ownership.

General Rule RIGHT OF FIRST REFUSAL Gross inadequacy of price does not affect a contract -

of sale Exceptions

1. 2. 3.

If consent is vitiated such as by fraud, mistake, violence, intimidation, or undue influence; If the parties intended a donation or some other act or contract; or If the price is so low as to be “shocking to the conscience”, the sale shall be set aside.

Art. 1477

Art. 1480 -

The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. Art. 1478 The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price. KINDS OF DELIVERY 1. 2.

Actual or real delivery When the thing is placed in the control and position of the vendee Constructive or legal delivery

A contractual grant, not of the sale of the property, but of the first priority to buy the property in the event the owner sells the same When the lease contains the right of first refusal, the lessor has the legal duty to the lessee not to sell the leased property to anyone at any price until after the lessor has made an offer to sell the property to the lessee an the lessee has failed to accept it

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Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the perfection of the contract to the time of delivery, shall be governed by Articles 1163 to 1165, and 1262. This rule shall apply to the sale of fungible things, made independently and for a single price, or without consideration of their weight, number, or measure. Should fungible things be sold for a price fixed according to weight, number, or measure, the risk shall not be imputed to the vendee until they have been weighed, counted, or measured and delivered, unless the latter has incurred in delay.

Res Perit Domino 3

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Owner bears the loss In the absence of a perfected contract between the supposed parties, the loss, destruction, or deterioration of the thing shall be borne by the owner by virtue of this principle

Consequences of loss or deterioration Before the perfection At the time of perfection

Vendor Vendor

(The contract is inexistent because the object did not exist. It follows that the contract will have no legal effect.)

Sales Lecture 3 CAPACITY TO BUY OR SELL Art. 1489 All persons who are authorized in this Code to obligate themselves, may enter into a contract of sale, saving the modifications contained in the following articles. Where necessaries are those sold and delivered to a minor or other person without capacity to act, he must pay a reasonable price therefor. Necessaries are those referred to in Article 290. KINDS OF INCAPACITY Absolute Incapacity

After the perfection of the contract but before delivery of the thing to the vendee Due to the fault of the vendor Due to the fault of the vendor Seller (a) was in delay, (b) assumed the loss or deterioration by stipulation, or (c) he promised to deliver the thing two or more persons who do not have the same interest over the thing

Vendor Vendee Vendor

Art. 1484 In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies: (1) Exact fulfillment of the obligation, should the vendee fail to pay; (2) Cancel the sale, should the vendee's failure to pay cover two or more installments; (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void.  

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A person cannot bind himself in any contract Minority, insanity, imbecility, etc. ( Art. 38)

Relative Incapacity -

A person cannot buy a certain property because of a special prohibition Arts. 1490-1491

Art. 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 or property under Article 191. Rationale behind the Prohibition (1)Prevent the stronger spouse from exploiting the weaker spouse; (2)Prevent donations disguised as sales; and (3)Protect third persons, especially creditors, against fraud through the transfer of properties of one spouse to the other to evade payment of obligations Donations In Marriage Settlement

The three remedies are alternative, not cumulative The election of one remedy is a waiver of the right to resort to the other remedies.

Art. 1485 The preceding article shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. Art. 1486 In the case referred to in two preceding articles, a stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances.

Do not exceed one-fifth of the donor’s present property (Arts. 82 and 84, Family Code) Persons Qualified to Question the Sale 

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The validity of the sale can only questioned by persons who bear relationship with the seller in such a manner that their rights or interests are adversely affected by the sale. The heirs of either spouse and creditors whose credit existed before the transfer may challenge the validity of the sale.

When spouses are allowed to sell or lease properties to each other

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(1)They have chosen absolute separation of property as their property regime; (2)They have obtained a judicial separation of the property in accordance with Articles 134 and 135 of the Family Code Sale of Conjugal Property -

The absence of the consent of one spouse in the sale of a conjugal property renders the sale null and void When consent is vitiated, the sale is voidable

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 (voidable);

Art. 1493 If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost, the contract shall be without any effect. But if the thing should have been lost in part only, the vendee may choose between withdrawing from the contract and demanding the remaining part, paying its price in proportion to the total sum agreed upon. Loss A thing is considered lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered (Art. 1189, par. 2) Art. 1494

(2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given (voidable); (3) Executors and administrators, the property of the estate under administration (voidable); (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 intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale (void); (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 (void); (6) Any others specially disqualified by law (void).

Other Persons Especially Disqualified by Law

Where the parties purport a sale of specific goods, and the goods without the knowledge of the seller have perished in part or have wholly or in a material part so deteriorated in quality as to be substantially changed in character, the buyer may at his option treat the sale: (1) As avoided; or (2) As valid in all of the existing goods or in so much thereof as have not deteriorated, and as binding the buyer to pay the agreed price for the goods in which the ownership will pass, if the sale was divisible. OBLIGATIONS OF THE VENDOR Art. 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. Art. 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. DELIVERY OF THE THING SOLD

(1) The officer conducting the execution of a judgment cannot be a purchaser, or be interested directly or indirectly in any purchase at an execution sale; (2) An unpaid seller who stopped the goods in transitu is prohibited from buying the goods either directly or indirectly in the resale of said goods at a public or private sale which he may initiate; and (3) In a sale by auction, the seller cannot bid unless notice has been given that such sale by auction is subject to a right to bid on behalf of the seller. EFFECTS OF THE CONTRACT WHEN THE THING SOLD HAS BEEN LOST

Art. 1497 The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. Art. 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.

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Art. 1499

Sales Lecture 4

The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason.

Art. 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

Art. 1502

Purchaser in Good Faith

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 of delivery, but he may revert 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.

- one who purchased a property of another without knowledge that some other person or persons have any right to or any interest in such property, and who paid a full and fair price for it, at the time of the purchase or before he has notice of the claim of the latter

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:

Buyer must pay a valuable consideration

(1) When he signifies his approval or acceptance to the seller or does any other act adopting the transaction; (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. What is a reasonable time is a question of fact.

“for value”

“value” - Antecedent or pre-existing claim, whether for money or not, where goods are taken either in satisfaction thereof or as a security therefor (Art. 1636) RATIONALE The reasons why the buyer in good faith acquires a good title: a.

A voidable contract is valid until annulled;

b.

Where one of two innocent parties must suffer, he who placed the offender in a position to do wrong must be the one who should suffer

and

Art. 1521 

Place of Delivery

The following, in order of enumeration, shall be the place of delivery of he goods purchased: 1. 2. 3. 4.

The place stipulated upon if any stipulation has been made; The place determined by usage of trade; The seller’s place of business; or The seller’s place of residence.

Rule for Specific Goods If specific goods are involved in the sale, the place where they are found shall be the place of delivery, in the absence of any agreement or applicable usage of trade Waiver If the goods were accepted by the buyer in some other place not specified in the contract, the latter is deemed to have waived his right to receive the goods at the proper place of delivery Time and Manner of Delivery 1.

If there is a specific date and time agreed upon for the delivery, this shall be controlling

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2.

If none, the delivery must be made within a reasonable time

Reasonable Time What is reasonable time will depend upon the circumstances attending the particular transaction, such as the character of the goods, their purpose, ability of the seller to manufacture, facilities of the transportation, distance of the place of delivery, and the usual course of business

Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest. In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject the whole of the goods. The provisions of this article are subject to any usage of trade, special agreement, or course of dealing between the parties.

Goods in Possession of Third Person 

 

Usage of Trade The seller is not discharged from his responsibility where the goods are in the possession of a third person, unless and until the third person acknowledged to the buyer that he holds the goods in behalf of the said buyer. The third person acts as a bailee for the buyer. Until then, the seller must take time and exert efforts to cause the delivery of the goods to the buyer as long as the buyer manifested his readiness to accept and to pay for the price of the goods.

Expenses Expenses incurred to put the goods into a deliverable state shall be borne by the seller, unless otherwise agreed upon. Goods in Deliverable State Goods are in deliverable state if they are in such condition that they satisfy the specifications agreed upon in the contract and the buyer would, under the contract, be bound to accept or take delivery of them Art. 1522 Where the seller delivers to the buyer a quantity of goods less than the contracted to sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the seller is not going to perform the contract in full, he must pay for them at the contract rate. If, however, the buyer has used or disposed of the goods delivered before he knows that the seller is not going to perform his contract in full, the buyer shall not be liable for more than the fair value to him of the goods so received.

- Any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question Special Agreement -

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Any stipulation of the parties which will govern their relationship in case of lesser or larger delivery of goods. It must be made in good faith

Course of Dealing - A sequence of previous acts and conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct Art. 1523 This Article applies only to cases where the buyer has agreed to the shipment of the goods by the seller through a carrier for the purpose of transmission to the buyer. GENERAL RULE Delivery to the carrier is delivery to the buyer EXCEPTIONS 1. Where the seller reserves his right of ownership over the goods until certain conditions have been fulfilled;

Lesser Goods Delivered

2. When delivery is directed by the seller to the place of destination, to himself or his agent;

1. Buyer may reject the goods delivered and he shall have no liability; or

3. When the bill of lading is deliverable to the buyer, but the seller retains the possession of the bill of lading;

2. The buyer may accept what has been delivered, but he will pay at the contract price, if he knew that the seller is not going to deliver all the goods contracted for.

Bill of Lading

(Larger Goods Delivered) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate. (Mixed Goods Delivered)

- A detailed document issued by a carrier to acknowledge the receipt of cargo for shipment 4. When the parties have a different intention as when the parties did not intend to have the goods delivered to the buyer through the carrier. Seller’s Exercise of Due Diligence 

After the delivery of the goods by the seller through the carrier, unless otherwise authorized by the buyer

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himself, the seller has still the following duties to fulfill to avoid liability: (1)He must enter into a contract of carriage with the carrier in behalf of the buyer as may be necessary and reasonable for the protection and safe carriage of the goods. If the seller failed to do so, and the goods are lost or damaged, the seller is liable for damages for his lack of diligence.

Unpaid Seller The term unpaid seller used in Arts. 1525 to 1535 includes the following: 1. 2. 3.

Agent of the seller; Consignor or agent who has himself paid the price or is responsible for the price; or Any other person in the position of the seller.

RIGHTS AND REMEDIES OF AN UNPAID SELLER (2)He must notify the buyer of the necessity of insuring the goods during the transit if it is usual under the circumstances that insurance should be taken. Otherwise, the seller bears the risk of loss unless the buyer had already the need information to cause the insurance of the goods as when he used to do so in similar pas transactions with the seller. CLASSIFICATION OF DELIVERY OF GOODS TO THE CARRIER Cost, Insurance, and Freight (CIF) - CIF contract of sale is one were the buyer pays a fixed price which the seller furnishes the goods, pays the freight and insurance to the point of delivery, and all risks while the goods are in transit are for the account of the buyer Free on Board (FOB) - Seller shall bear all expenses until goods are delivered where they are to be FOB at the point of shipment or at the point of destination and determines the time when property passes

FOB

CIF

If the sale is FOB at the place of shipment, the buyer must pay the freight, provided the seller complies his part of the contract.

In CIF contract, the buyer is to pay a fixed price for which the seller furnishes the goods, pays the freight and insurance to the point of delivery.

1.

2.

Possessory Lien. Right to retain the goods as security for the payment of the price while he remains in possession of them. Stoppage in transitu. Right to stopping the goods while they are in transit in case of insolvency of the buyer so that the seller can resume his possession of the goods. Insolvency may be existing at the time of or after the transaction.

3. Right to resell the goods when the same are of perishable nature; if resale is agreed upon in case of default; or when the buyer is in default in the payment for an unreasonable length of time provided the seller himself does not buy the goods. 4. Right to rescind the sale if this right is reserved, the buyer has defaulted in the payment for an unreasonable length of time. Art. 1526 -

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provides for an additional right. This is the right of the seller in case title to the goods has not yet passed to the buyer, in which case, he still retains the ownership over the goods. Though he has no possessory lien, he being the possessor can withhold the delivery of the goods to the prospective buyer.

Art. 1527

If the sale is FOB at the place of destination, the freight must be paid by the seller.

Subject to the provisions of this Title, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:

Art. 1524

(1) Where the goods have been sold without any stipulation as to credit;

The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him the price, or if no period for the payment has been fixed in the contract.

(2) Where the goods have been sold on credit, but the term of credit has expired;

Art. 1525

(3) Where the buyer becomes insolvent.

The seller of goods is deemed to be an unpaid seller within the meaning of this Title:

Art. 1529 The unpaid seller of goods loses his lien thereon:

(1)When the whole of the price has not been paid or tendered; (2) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise.

(1) When he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the ownership in the goods or the right to the possession thereof; (2) When the buyer or his agent lawfully obtains possession of the goods;

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(3) By waiver thereof. Art. 1530 Subject to the provisions of this Title, when the buyer of goods is or becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transitu, that is to say, he may resume possession of the goods at any time while they are in transit, and he will then become entitled to the same rights in regard to the goods as he would have had if he had never parted with the possession. Double Sale Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property 

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Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

Principle of Prius Tempore, Prius Jure -

First in time, stronger in right

Buyer in Good Faith - One who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property Applicability of Art. 1544 Requisites: 1. 2. 3. 4.

The vendor has an existing right over the property and power of disposal; There are at least to sales executed by the same vendor; The sales involve the same property; and There are two or more vendees of the same property sold

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