- Statute
- Civil Code
- Article
- Art. 1628
- Topic
- Assignment of Credits and Other Incorporeal Rights
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE VI SALES
- Chapter
- CHAPTER 8 Assignment of Credits and Other Incorporeal Rights
- Formerly
- Art. 1529 of the old Civil Code
- Year
- 1949
- Cited by
- A Supreme Court decision
The provision
The vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale, unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. Even in these cases he shall only be liable for the price received and for the expenses specified in No. 1 of article 1616. The vendor in bad faith shall always be answerable for the payment of all expenses, and for damages. (1529)
Intellegal Wiki · In plain terms
A good-faith seller of a credit (a right to collect a debt) guarantees that the credit exists and is legal at the time of sale, but not that the debtor can actually pay, unless solvency was expressly promised or the insolvency was pre-existing and commonly known. Even then, liability is limited to the price received plus certain listed expenses; a seller in bad faith always answers for all expenses and for damages.
An editorially maintained plain-language explanation of this provision — not legal advice.
Cases applying this article
- Sonny Lo v. Kjs Eco-Formwork System Phil. G.R. No. 149420