Short answer. Yes, while the buyer still has the furniture. Article 2241 of the Civil Code gives the unpaid seller of movable property a preferred claim on that same property, as long as it remains in the buyer's possession and up to the value of the goods themselves.
What the law says
Claims for the unpaid price of movables sold, on said movables, so long as they are in the possession of the debtor, up to the value of the same
Civil Code, Article 2241 — Preferred Credits on Specific Movables. Read the full provision →
Your preferred claim on the goods you sold
Article 2241 of the Civil Code lists the claims that enjoy priority with respect to specific movable property. Item 3 directly addresses the unpaid seller: claims for the unpaid price of movables sold give the seller a preferred claim on those same goods, so long as they remain in the possession of the debtor, up to the value of the goods. As long as the buyer still has the furniture, your claim on it ranks ahead of general creditors in any distribution of the buyer's assets.
The possession condition matters
The preference is tied to possession. The statute is explicit: the preferred claim on the goods exists so long as they are in the possession of the debtor. If the buyer sells the furniture to someone else before you assert your claim, the situation changes. However, Article 2241 adds an extension: if the movable has been resold by the debtor and the price is still unpaid, the lien may be enforced on the price the buyer received. Your preference follows the asset or its proceeds, but acting before the goods leave the buyer's possession keeps your claim strongest.
The preference survives certain changes to the goods
The law also protects against certain forms of asset transformation that might otherwise defeat the seller's preference. The right is not lost by the immobilization of the thing by destination, provided it has not lost its form, substance and identity — meaning if the furniture is fixed into a building, the preference on it survives. Nor is the right lost by sale of the thing together with other property for a lump sum, when the price can be determined proportionally. These extensions prevent a buyer from defeating your preferred claim by mixing your goods with others.
What to do now
If the buyer has failed to pay and you are concerned about their financial situation, the time to act is while the furniture is still in their possession. Asserting your preferred claim requires participating in any insolvency or estate administration proceeding that covers the buyer's assets. If no formal proceeding has begun, a lawyer can advise you on other remedies — including actions to recover the goods or enforce payment. Waiting too long risks the goods being sold, transferred, or depleted, reducing or eliminating what your preference can actually recover.
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.
- Strategic Alliance Development Corporation vs. Radstock Securities Limited and Philippine National Construction corporation, G.R. No. 178158 / G.R. No. 180428, December 4, 2009 — read the decision on LawPhil →
- Manuel D. Yngson, Jr., (in his capacity as the Liquidator of ARCAM & Co., Inc.) vs. Philippine National Bank, G.R. No. 171132, August 15, 2012 — read the decision on LawPhil →
- Jan-Dec Construction Corporation vs. Court of Appeals, et al, G.R. No. 146818, February 6, 2006 — read the decision on LawPhil →
- Abundio Barayoga, et al. vs. Asset Privatization Trust, G.R. No. 160073, October 24, 2005 — read the decision on LawPhil →