REMEDIES OF AN UNPAID SELLER

What are the remedies of an Unpaid Seller?

I. Ordinary

1. Action for Price Exercised when:

     a. ownership has passed to buyer;

     b. price is payable on a day certain

     c. goods cannot readily be resold for reasonable price and Art. 1596 is inapplicable

2. Action for Damages – In case of wrongful neglect or refusal by the buyer to accept or pay for the thing sold

II. Special 1. Possessory Lien – Seller not bound to deliver if buyer has not paid him the price. It is exercisable only in following circumstances:

     a. goods sold without stipulation as to credit

     b. goods sold on credit but term of credit has expired

     c. buyer becomes insolvent Note: When part of goods delivered, may still exercise right on goods undelivered

2. Stoppage in Transitu

Requisites:

     a. Insolvent buyer

     b. Seller must Surrender the negotiable document of title, if any

     c. Seller must bear the Expenses of delivery of the goods after the exercise of the right.

     d. Seller must either actually take possession of the goods sold or give Notice of his claim to the carrier or other person in possession

     e. Goods must be in Transit

     f. Unpaid seller

3. Special Right to Resell the Goods Exercised when:

     a. Goods are perishable,

     b. Stipulated the right of resale in case of default, or

     c. Buyer in default for unreasonable time

4. Special Right to Rescind Requisites:

     a. Expressly stipulated OR buyer is in default for unreasonable time

     b. Notice needed to be given by seller to buyer

Note: Ownership of goods already with buyer but seller may still rescind; ownership is destroyed even without court intervention but in ordinary sale, need to go to court.