Short answer. It follows the parties' manifest intention first. Article 1468 looks at what the parties clearly intended when payment is part cash and part goods. If that intention is unclear, it is a barter when the thing given exceeds the money in value, and a sale when the money equals or exceeds it.
What the law says
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.
Civil Code, Article 1468 — Sale vs. Barter. Read the full provision →
What the law says
If such intention does not clearly appear, it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent; otherwise, it is a sale.
Civil Code, Article 1468 — Sale vs. Barter. Read the full provision →
What the parties actually meant comes first
Article 1468 does not start with a mechanical value comparison; it starts with intent. It provides that 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 you and the other party were clear about whether you meant to strike a sale with a partial trade-in, or a barter with some cash thrown in to balance the values, that clearly expressed intention controls how the transaction is classified, regardless of the actual dollar values involved.
The fallback rule when intention is unclear
When the parties never made their intention clear, the article supplies a default based on comparing values: if such intention does not clearly appear, it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent; otherwise, it is a sale. If the non-cash item you gave is worth more than the cash portion, the deal defaults to a barter. If the cash portion equals or exceeds the value of the thing given, it defaults to a sale.
Why the classification matters
Sale and barter are governed by closely related but not identical sets of rules under the Civil Code, covering things like warranties and how the transaction is treated for other legal purposes. Getting the classification right affects which specific provisions apply to your transaction when a dispute arises, such as over defects in what was received or the obligations each side actually undertook. This is why the law does not leave it purely to guesswork and instead supplies both a primary test, intent, and a fallback, value comparison.
What this means for your mixed payment
Look first at whether you and the other party discussed or documented what kind of transaction you were entering into, since that manifest intention decides the classification outright. If nothing clearly shows your intention, compare the value of the goods you gave against the cash portion: the higher figure determines whether your deal defaults to a barter or a sale under Article 1468.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Gregorio Fule vs. Court of Appeals, et al, G.R. No. 112212, March 2, 1998 — read the decision on LawPhil →