Article 1484 – Remedies of Vendor.

The exercise of one (remedy) bars the exercise of the others

1) Exact fulfilment
2) Cancel
3) Foreclose

Zenaida Palma v. Honorable CA

 Petitioners bought 2 trucks payable in installments

 Trucks were attached
 Respondent chose the first remedy under Article 1484 (exact fulfilment of the obligation)

Servicewide Specialist, Inc v. Honorable IAC, Galicano Siton

 Petitioner sought for the issuance of writ of replevin or for a sum of money
 SC denied, only one remedy is allowed under Article 1484
 Once you choose Remedy 1, you cannot demand for another remedy (deemed waived)

Article 1485 – Lease of Personal Property with option to buy. Article 1484 remedies apply

PCI Leasing and Finance, Inc v. Giraffe-X Creative Imaging, Inc

 Giraffe defaulted in the payment

 PCI demanded, pay or surrender
 Court said that only one can be exercised, since a writ of seizure is issued, collection of money is no longer available (Article 1484 and
Article 1485)

Elisco Tool Manufacturing Corporation v. CA, Rolando Lantan

 SC said that when a contract of lease giving the lessee the option to buy is a sale on installment hence Article 1484 applies
 Filing of replevin deprives the lessee or the possession or enjoyment of the thing for the purpose of applying Article 1485

Article 1486 –rents paid shall not be returned to the vendees as long as they are not unconscionable under the circumstances

PICC v. CA and Mar-ick investment

 Since PICC made use of the lots, it is only proper and unconscionable to allow Mar-ick the rentals on the lots which are correctly
decreed by the lower court

Article 1602 – Equitable Mortgage

 The real intention of the party is to provide security for the loan and not to transfer ownership over the property
 Is one which although lacking in some formality or form or words or other requisites demanded by a statute, nevertheless reveals
the intention of the parties to charge real property as security for debt

Mary Ann Deheza-Inamarga v. Celenia Alano

 Alano spouses mortgaged the properties in favor of Renato Gepty as security for a loan
 Alano did not have money to redeem so ask favor from niece Deheza-Inamarga who agreed
 Alano mortgaged the property to niece, when husband died, wife wanted to redeem the property but already mortgaged to Rural
Bank of Libacao
 TCT was issued in the name of niece by virtue of a purported Deed of Sale
 SC declared the transaction as EM

Bacungan v. CA and Sps. Velo

 Respondents suffer financial reversals thus sought assistance from petitioner to secure a loan
 Petitioner proposed to obtain loan provided they secure the transfer of titles to petitioners that would be used as security for the
loans but after transfer, respondents alleged that petitioner never applied for loan
 They retained part of the purchase price when they failed to turn over to the respondents the loan that they were supposed to
obtain from the bank
 Grossly inadequate price
 Used the properties as security from the loans of respondents
Benjamin Bautista v. Shirley Unangst

 Hamilton salak borrowed a car from bautista but failed to return which resulted to a complaint demanding for a sum of 232K
 Unangst (wife) sold house and lot with right to repurchase but failed to do so within the period
 Bautista filed a complaint for specific performance
 Unangst claimed that the consent to the deed of sale with right to repurchase was under duress since husband was detained at that
time
 SC ruled that the deed of sale was EM under Paragraphs 2 and 6 of Article 1602
 Unangst retained the property (contratry to pacto de retro, ownership is transferred immediately)
 Amount is inadequate and equal to the debt

NOTE: In a contract of sale with pacto de retro, the legal title to the property is immediately transferred to the vendee, subject to the vendor’s
right to redeem. Retention therefore by the vendor of the possession is inconsistent with the vendee’s acquisition of the right of ownership
under a true sale.

Spouses Lehner and Ludy Martires v. Menelia Chua

 Respondent borrowed 150K from petitioner and secured a real estate mortgage
 Respondent failed to pay and ownership was transferred via deed of transfer
 SC ruled that the real intention of the party was to provide security which is under Paragraph 6 of Article 1602

Lumayag v. Nemeno

 Spouses Nemeno owned two parcels of coconut land mortgaged a part thereof to cover hospital expenses of husband
 SC ruled that the purported pacto de retro was an EQ
 Inadequacy of price (20K for 5 hectares is insufficient)
 Respondent continued paying realty taxes
 A clause in the nature of Pactum Commissorium is included in the deed allowing the Petitioner to appropriate is against Article 2088
 The inclusion of the Pactum Commissorium shows the intention of the parties to mortgage rather than to sell.

Pactum Commissorium – Artcle 2088 (Civil Code)

 A stipulation empowering the creditor to appropriate the thing given as guaranty for the fulfilment of the obligation in the event the
obligor fails to live up to his undertakings, without further formality, such as foreclosure proceedings and public sale
 This is contrary to law and thus is not allowed

Roberts v. Papio

 Papio needed money to redeem property so he executed Deed of Absolute Sale over property to cousin Roberts
 After the obligation was settled with Amparo Investment, the title was delivered to Roberts
 TCT was issued in the name of Roberts and she became lessor of Papio
 Papio failed to pay rentals so Roberts filed Unlawful Detainer
 Papio claimed EM
 SC said Papio is already estopped since he insisted that he had already repurchased which means that there was indeed a sale.
 Thus he cannot claim that the transaction was EM

Santiago and Critobal v. Aida Dizon

 Dizon mortgaged a property to Monte de Piedad to secure a loan

 Dizon failed so Monte foreclosed the loan and registered the property to its name with right to repurchase
 Santiago paid Monte the total amount and thus exectued Deed of Sale in favor of Dizon who in turn executed deed of sale to
Santiago
 They agree to give Dizon right to repurchase but failed to do so.
 SC ruled that the transaction was EM
 Presumption of EM under 1602 and 1604 is not conclusive and may be rebutted by competent and satisfactory proof
 The transaction was sale with option to buy
o Dizon although remained in the property was not in the concept of an owner
o Santiago directly dealt with the lessees of Dizon
o Santiago already paid taxes

Heirs of Jose Reyes v. Amanda Reyes

 Equitable Mortgage
o Heirs continued possession of the property
o Not a pacto de retro sale
 The existence of any one of the conditions enumerated under Article 1602 of the civil code not a concurrence of all or of a majority
thereof suffices to give rise to the presumption that the contract is an equitable mortgage
 Kasulatang Mabibiling Muli
Rosario Victoria and Elma Pidlaoan v. Normita Jacob Pidlaoan

 Two requisites must concur to apply 1602 and 1604

o The parties entered into a contract denominated as contract of sale
o Intention was to secure an existing debt by way of mortgage
 The contract shows an unconditional sale of property (Panananto ng pagkatanggap ng Kahustuhang bayad). There was no intention
to secure debt or to grant right to repurchase.
 No evidence that the party agreed to mortgage the property as contemplated under 1602

People v. IAC, Lutgarda Pasiliao

 Mother of Lutgarda sold the property to Mrs. Memjie but the documents were lost during war
 Tomas Pasilia claimed that the transaction was EM because they were in possession and paying taxes
 Court said that in case of doubt Article 1603 applies (a contract purporting to be a sale with right to repurchase shall be construed as
an equitable mortgage)
 Ms. Memjie acquired the property through acquisitive prescription
 Under Article 1606
o 4 years – no agreement
o Not exceeding 10 – if there’s an agreement
o 30 days – after final judgment that the transaction is sale with right to repurchase

Article 1606 –Period to redeem

Pangilinan v. Ramos

 Period of redemption was 5 years

 Under 1601, conventional redemption takes place when the vendor reserves the right to repurchase the thing sold with the
obligation to comply with Article 1616 and other stipulations agreed upon
 If one of the party questions the nature of the sale, then it shall have 30 days after final judgment of the nature is proclaimed to
redeem the property

BPI Family Savings Bank v. Sps. Veloso

 In order to effect redemption

1) Pay the price which the purchaser paid
2) Interest of 1% per month on the purchase price
3) Amount of assessment or taxes paid by purchaser after the purchase
4) Interest of 1% per month on the taxes and assessment
 Under Article 1616 – vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale
 Offer of the respondents is way below the price and did not include interest required under 1616

Primary Structures Corporation v. Spouses Valencia

 Article 1621 applies

o Adjoining owners of rural lands have right of redemption when a piece of rural land the area of which does not exceed 1
hectare is alienated unless the grantee does not own any other rural land
o If two owners are interested
 Smaller estate is preferred
 If same size, the first to request redemption
 Article 1623 – Right of Redemption and Pre-emption
o 30 days from the notice in writing of vendor
o Deed of sale shall not be recorded unless accompanied by affidavit of the vendor that he has given written notice to all
possible redemptioners
o Right of redemption of co-owners excludes that of adjoining owners
 Article 1601- Conventional redemption

Sen Po Ek Marketing Corporation v. Teodora Martinez

 No right of first refusal

 Should be embodied in the lease contract but no proof
 Article 1622 does not apply
o When an urban land is about to be sold, adjoining owner shall have right of first refusal