ART 1533 Law On Sales With Explanation

ART. 1533.
Where the goods are of perishable nature, or where the seller expressly
reserves the right of resale in case the buyer should make default, or where the buyer
has been in default in the payment of the price for an unreasonable time, an unpaid
seller having a right of lien or having stopped the goods in transitu may resell the
goods. He shall not thereafter be liable to the original buyer upon the contract of sale
for any profit made by such resale, but may recover from the buyer damages for any
loss occasioned by the breach of the contract of sale.
Where a resale is made, as authorized in this article, the buyer acquires a good
title as against the original buyer.
It is not essential to the validity of a resale that notice of an intention to resell
the goods be given by the seller to the original buyer. But where the right to resell is
not based on the perishable nature of the goods or upon an express provision of the
contract of sale, the giving or failure to give such notice shall be relevant in any issue
involving the question whether the buyer had been in default for an unreasonable time
before the resale was made.
It is not essential to the validity of a resale that notice of the time and place of
such resale should be given by the seller to the original buyer.
The seller is bound to exercise reasonable care and judgment in making a
resale, and subject to this requirement may make a resale either by public or private
sale. He cannot, however, directly or indirectly buy the goods.
Unpaid seller’s right of resale.

(1) When resale allowable. — The third right of an unpaid seller is the right of
resale. (Art. 1526[3].) An unpaid seller can exercise the right to resell only when he
has either a right of lien which means right to retain possession of the goods until
payment for the same is made(Ibid., [1].) or a right to stop the goods in transitu (Ibid.,
[2].) and under any of the three following cases:
(a) where the goods are perishable in nature;
Perishable goods eto yung mga may limited shelf life lang after harvest or
production like fruits, vegetables, fish or meats.
(b) where the right to resell is expressly reserved in case the buyer should
make a default; and
Yun nga if its stipulated in case pumalya si buyer sa pagbigay ng payment
because for example naging insolvent na siya
(c) where the buyer delays in the payment of the price for an unreasonable
time.
Like for example si buyer nagpromise to pay within this week but then
umabot na ng 3 weeks di parin siya bayad, so unreasonable time na iyon, pwede
na mag-resell
(2) Effect of resale. — In case of resale, the seller is not liable for any profit made by
such resale; but if he sells for less than the price, he has a right to sue for the balance.
(par. 1.) As against the original buyer, the new buyer acquires a good title to the
goods. (par. 2.)
ILLUSTRATIVE CASE:
Seller resold tractor for failure of buyer to take delivery and pay the price.
Facts: S sold to B a tractor, payable at P5,000.00 upon delivery and the balance of
P7,000.00 within 60 days. B failed to take delivery of the tractor and pay the purchase
price. S was forced to sell the same to a third person for only P10,000.00.
Issue: Is B liable for the difference of P2,000.00?
Held: Yes. In a contract of sale which is executory as to both parties, the vendor is
entitled to resell the goods if the purchaser fails to take delivery and pay the purchase
price. If he is obliged to sell for less than the contract price, he holds the buyer for the
difference; if he sells for as much as or more than the contract price, the breach of
contract by the original buyer is damnum absque injuria (loss or damage without
injury). There is no need of an action for rescission to authorize the vendor, who is
still in possession, to dispose of the property where the buyer fails to pay the price and
take delivery. (Katigbak
vs. Court of Appeals, 4 SCRA 243 [1962], citing Hanlon vs.
Hausserman, supra.)
(3) Notice of resale not essential. — It is, therefore, provided in paragraph 3, that
except in the case of perishable goods, which it is obvious may require an expeditious
sale, and where the right to resell is reserved, the failure to give notice shall be
relevant upon the question whether the buyer has been in default for an unreasonable
time. What is reasonable time will vary according to the circumstances of the case.
(4) Manner of resale. — The law “is satisfied with a fair sale made in good faith
according to the established business methods with no attempt to take advantage of
the vendee.” (Ibid., pp. 168-169.) The seller is only required to exercise reasonable
care and judgment in making a resale. He cannot, however, directly or indirectly, buy
the goods.

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ART. 1533.

Unpaid seller’s right of resale.

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