CHAPTER 7:

EXTINGUISHMENT
OF SALE
LAW ON SALES

A BRIEF SUMMARY
(Articles 1600-1623)

SUBMITTED BY:

Lemuel Angelo M. Eleccion

Bachelor of Laws - 2

SUBMITTED BY:

Atty. Jose Antonio C. Sedigo

Professor, Law on Sales

Chapter 7
EXTINGUISHMENT OF SALE
ART. 1600. Sales are extinguished by
the same causes as all other obligations, by
those stated in the preceding articles of this
Title, and by conventional or legal
redemption. (1506)
Causes for extinguishment of sale.
The modes or causes of extinguishing the
contract of sale may be classified into:
(1) Common or those causes which are also the
means of extinguishing all other contracts like
payment, loss of the thing, condonation, etc. (see
Art. 1231.);
(2) Special or those causes which are recognized
by the law on sales (such as those covered by
Articles 1484, 1532, 1539, 1540, 1542, 1556,
1560, 1567, and 1591.); and
(3) Extra-special or those causes which are
given special discussion by the Civil Code and
these are conventional redemption and legal
redemption. (see 10 Manresa 300, 303.)
SECTION 1. — Conventional Redemption
ART. 1601. Conventional redemption
shall take place when the vendor reserves the
right to repurchase the thing sold, with the
obligation to comply with the provisions of
article 1616 and other stipulations which may
have been agreed upon. (1507)
Conventional redemption defined.
- is the right which the vendor reserves to
himself, to reacquire the property sold
provided he returns to the vendee the price of
the sale, the expenses of the contract, any
other legitimate payments made therefor and
the necessary and useful expenses made on
the thing sold (Art. 1616.), and fulfills other
stipulations which may have been agreed
upon.
NOTE: Both real and personal property may be
the subject matter of pacto de retro sales or sales
with right to repurchase although there are certain
articles (Arts. 1607, 1611, 1612, 1613, 1614,
1617, 1618.) which are applicable only to
immovables.
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Nature of conventional redemption
1. It is purely contractual because it is a right
created, not by mandate of the law, but by
virtue of an express contract.
2. It is an accidental stipulation and, therefore,
its nullity cannot affect the sale itself since the
latter might be entered into without said
stipulation.
3. It is a real right when registered, because it
binds third persons.
4. It is potestative because it depends upon the
will of the vendor.
5. It is a resolutory condition because when
exercised, the right of ownership acquired by
the vendee is extinguished.
6. It is not an obligation but a power or
privilege that the vendor has reserved for
himself.
7. It is reserved at the moment of the
perfection of the contract for if the right to
repurchase is agreed upon afterwards, there
is only a promise to sell which produces
different rights and effects and is governed by
Article 1479.
8. The person entitled to exercise the right of
redemption necessarily is the owner of the
property sold and not any third party.
9. It gives rise to reciprocal obligation that of
returning the price of sale and other
expenses, on the part of the vendor (Art.
1616.); and that of delivering the property and
executing a deed of sale therefor, on the part
of the vendee.
ART. 1602. The contract shall be
presumed to be an equitable mortgage, in any
of the following cases:
(1) When the price of a sale with right to
repurchase is unusually inadequate;
(2) When the vendor remains in possession
as lessee or otherwise;
(3) When upon or after the expiration of the
right to repurchase another instrument
extending the period of redemption or
granting a new period is executed;
(4) When the purchaser retains for himself a
part of the purchase price;
(5) When the vendor binds himself to pay the
taxes on the thing sold;
(6) In any other case where it may be fairly
inferred that the real intention of the
parties is that the transaction shall secure

the payment of a debt or the performance
of any other obligation.
In any of the foregoing cases, any money,
fruits or other benefits to be received by the
vendee as rent or otherwise shall be
considered as interest which shall be subject
to the usury laws. (n)
Equitable mortgage defined.
- is one which lacks the proper formalities, form
or words, or other requisites prescribed by
law for a mortgage, but shows the intention of
the parties to make the property subject of the
contract as security for a debt and contains
nothing impossible or contrary to law.
“Pacto de retro” and mortgage, distinguished.
The following are the distinctions:
(1) In pacto de retro, ownership is transferred but
the ownership is subject to the condition that
the seller might recover the ownership within
a certain period of time, while in mortgage,
ownership is not transferred but the property
is merely subject to a charge or lien as
security for the compliance of a principal
obligation, usually a loan;
(2) If the seller does not repurchase the property
upon the very day named in the contract, he
loses all interest thereon, while the mortgagor
does not lose his interest in the property if he
fails to pay the debt at its maturity; and
(3) In the case of a pacto de retro, there is no
obligation resting upon the purchaser to
foreclose. Neither does the vendor have any
right to redeem the property after the maturity
of the debt. On the other hand, it is the duty
of the mortgagee to foreclose the mortgage if
he wishes to secure a perfect title thereto,
and after the maturity of the debt secured by
the mortgage and before foreclosure, the
mortgagor has a right to redeem.
When contract with right to repurchase
presumed an equitable mortgage.
Article 1602 enumerates six distinct and separate
circumstances the presence of any (not a
concurrence) of which is sufficient to give rise to
the presumption that a contract, regardless of its
nomenclature, is an equitable mortgage in
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consonance with the rule that the law favors the
last transmission of property rights.
These cases are the following:
(1) Price of the sale is unusually inadequate.
(2) Vendor remains in possession.
(3) Period of redemption is extended after
expiration
(4) Purchaser retains part of the price
(5) Vendor binds himself to pay taxes on the
thing sold
(6) The parties really intended an equitable
mortgage instead of a sale.
Intention to execute mortgage may be fairly
inferred.
Thus:
(1) Vendor in urgent need of money.
(2) Automatic appropriation by vendee of
property sold stipulated.
(3) Vendee given possession of certificate of
title.
(4) Escalation of purchase price every month
stipulated.
(5) Vendor borrowed from vendee money
used in buying property sold.
(6) Vendor of low intelligence and illiterate.
(7) Vendor continued to pay monthly
interest; property not transferred to
vendee; etc.
(8) Vendor continued to be indebted.
(9) Vendor mortgaged property sold to a
bank; paid taxes thereon; etc.
ART. 1603. In case of doubt, a contract
purporting to be a sale with right to
repurchase shall be construed as an equitable
mortgage. (n)
ART. 1604. The provisions of Article 1602
shall also apply to a contract purporting to be
an absolute sale. (n)
Presumption in case of doubt.
1. Doubt resolved in favor of equitable
mortgage.
2. Presumption, an exception to general rule.
3. Parol evidence admissible.
4. Where contract appears to be a genuine sale.
Effect where contract held as an equitable
mortgage.

1. Formal requirements of mortgage deemed
complied with.
2. Contract subordinate to a subsequent
registered mortgage.
3. Title of property remains in supposed vendor.
4. Remedy of creditor is to foreclose.
5. Conveyance of land not to affect mortgagor’s
right of redemption.
ART. 1605. In the cases referred to in
articles 1602 and 1604, the apparent vendor
may ask for the reformation of the instrument.
(n)
When vendor may ask for reformation.
Reformation is that remedy granted by
law by means of which a written instrument is
made or construed so as to express or conform
to the real intention of the parties when such
intention is not expressed in the instrument.
In reformation, there has been a meeting
of the minds between the parties, but the written
instrument purporting to embody their agreement
does not express their true intention by reason,
for instance, of mistake or fraud. (Art. 1359.)
Where there has been no meeting of the minds,
the remedy is annulment. (Art. 1390.)
ART. 1606. The right referred to in
article 1601, in the absence of an express
agreement, shall last four years from the date
of the contract.
Should there be an agreement, the
period cannot exceed ten years.
However, the vendor may still
exercise the right to repurchase within thirty
days from the time final judgment was
rendered in a civil action on the basis that the
contract was a true sale with right to
repurchase. (1508a)
 Period for exercise of right of redemption.
Article 1606 refers to conventional
redemption. It does not apply where the contract
is not one of sale with right of repurchase.
For conventional redemption to take place,
the vendor should reserve, in no uncertain terms,
the right to repurchase the thing sold.
1. No agreement granting right
2. Agreement merely grants right.
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3. Definite period of redemption agreed upon.
4. Period agreed upon exceeds ten years.
5. Period of redemption not specified.
6. Final judgment that contract is pacto de retro.
When Article 1606, par. 3, not applicable.
1. Contract found to be an absolute sale.
2. Sale known and admitted by vendor as pacto
de retro.
3. Party abandoned position that transaction an
equitable mortgage after judicial declaration
of transaction as a pacto de retro sale.
Effect of stipulation extending period
of repurchase.
(1) After expiration of period of redemption. — It
is legally impossible to speak of extension
because that which is extinguished cannot be
extended and because the ownership in the
vendee is already consolidated, and becomes
absolute.
(2) Before the expiration of the period of
redemption. — The original term may be
extended provided that the extension, including
the original term, shall not extend beyond 10
years; otherwise, the extension is void as to the
excess.
Reason for limiting period of redemption.
“A long term for redemption renders the tenure of
property uncertain and redounds to its detriment,
for neither does the precarious holder cultivate
the ground with the same interest as the owner,
nor does he properly attend to the preservation of
the building, and owing to the fact that his
enjoyment of the property is temporary, he
endeavors above all to derive the greatest benefit
therefrom, economizing to that end even the most
essential expenses.” (23 Scaevola 667.)
ART. 1607. In case of real property, the
consolidation of ownership in the vendee by
virtue of the failure of the vendor to comply
with the provisions of Article 1616 shall not be
recorded in the Registry of Property without a
judicial order, after the vendor has been duly
heard. (n)
Judicial order for recording of consolidation
of ownership. (NPFAE)
1. Necessity.
2. Purpose.

3. Former method.
4. Acquisition of ownership by vendee a retro.
5. Effect of failure to comply with the
requirement.
Action to consolidate ownership
1. Ordinary civil actions
2. Registration proceedings.
ART. 1608. The vendor may bring his
action against every possessor whose right is
derived from the vendee, even if in the second
contract no mention should have been made
of the right to repurchase, without prejudice
to the provisions of the Mortgage Law and the
Land Registration Law with respect to third
persons. (1510)
Nature of right to redeem.
1. A right, not an obligation.
2. A real right.
ART. 1609. The vendee is subrogated to
the vendor’s rights and actions. (1511)
Rights acquired by vendee a retro.
(1) Vendee subrogated to vendor’s rights. —
Subrogation transfers to the person
subrogated the credit with all the rights
thereto appertaining.
(2) Right to eject vendor. — Prior possession by
the vendee aretro of the property is not a
condition precedent in an unlawful detainer
action against the vendor a retro who, after
having failed to redeem, and title in the
vendee a retro had been consolidated,
refused to vacate the property.
ART. 1610. The creditors of the vendor
cannot make use of the right of redemption
against the vendee, until after they have
exhausted the property of the vendor. (1512)
Right of vendor’s creditors to redeem.
This article is a practical application of Article
1177 permitting creditors to exercise the rights
and actions of their debtor after exhausting his
properties to satisfy their claims.
Article 1610 refers to all kinds of creditors,
whether ordinary or preferred, except those in
whose favor exists a mortgage or antichresis
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upon the very property sold recorded prior to the
sale.
ART. 1611. In a sale with a right to
repurchase, the vendee of a part of an
undivided immovable who acquires the whole
thereof in the case of article 498, may compel
the vendor to redeem the whole property, if
the latter wishes to make use of the right of
redemption. (1513)
Redemption in sale of part of undivided
immovable.
The purpose of the above article (and Arts. 1612-
1615.) is to discourage co-ownership which is
recognized as undesirable, since it does not
encourage the improvement of the property
coowned.
(1) A co-owner may demand the partition of the
thing owned in common insofar as his share
is concerned. (Art. 494.)
a. If the thing is essentially indivisible, it
may be allotted to the co-owner who
shall indemnify the others.
b. If the co-owners cannot agree that
the thing be allotted to one of them, it
shall be sold and its proceeds
distributed. (Art. 498.)
(2) In either case, the vendee who acquires the
whole of an undivided immovable a part of
which is subject to a right to repurchase, has
a right to demand that the vendor a retro, who
like to exercise his right of redemption,
redeem the whole property.
ART. 1612. If several persons, jointly and
in the same contract, should sell an undivided
immovable with a right of repurchase, none of
them may exercise
this right for more than his respective share.
The same rule shall apply if the person
who sold an immovable alone has left several
heirs, in which case each of the latter may
only redeem the part which he may have
acquired. (1514)
ART. 1613. In the case of the
preceding article, the vendee may demand of

all the vendors or co-heirs that they come to
an agreement upon the repurchase
of the whole thing sold; and should they fail
to do so, the vendee cannot be compelled to
consent to a partial redemption. (1515)
Redemption in joint sale by co-owners/co-
heirs of undivided immovable.
1. The co-owners of an undivided immovable
sold by them jointly or collectively and in the
same contract with the right to repurchase,
can exercise such right only as regards their
respective shares. (Art. 1612, par. 1.)
2. Similarly, the co-heirs of the vendor of an
undivided immovable can exercise the right
of redemption only for the respective portions
they have inherited. (Ibid., par. 2.)
3. The vendee a retro can refuse partial
redemption; he may require all the vendors or
all the heirs to redeem the entire property or
to agree to its redemption by any one of them.
(Art. 1613.) This right is given to the vendee
in line with the object of the law (see Art.
1620.) to put an end to co-ownerships
whenever possible.
4. Under Article 1620 (infra.), the right of a co-
owner who chooses not to redeem accrues to
the benefit of the others. The extent of the
share of the redeeming co-owner is not taken
into account except as provided in the second
paragraph thereof.
Effect of redemption by co-owner of entire
property.
Under Article 1612, a co-owner cannot
redeem more than his share in the co-ownership.
The redemption by a co-owner of the property in
its entirety, shouldering the expenses therefor,
does not make him the owner of all of it. In other
words, it does not put to end the existing state of
co-ownership.
ART. 1614. Each one of the co-owners
of an undivided immovable who may have
sold his share separately, may independently
exercise the right of repurchase as regards
his own share, and the vendee cannot compel
him to redeem the whole property. (1516)
Redemption in separate sales by co-owners
of undivided immovable.
Although it is the policy of the law to avoid
indivision, it would be unjust, if the sale was made
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separately and independently, to require the co-
owners to come to an agreement with regard
to the repurchase of the thing sold, and certainly,
it would be worse to deprive them of their right in
case they fail to agree.
The very purpose of the article is to prevent such
injustice. (10 Manresa 332.)
ART. 1615. If the vendee should leave
several heirs, the action for redemption
cannot be brought against each of them
except for his own share, whether the
thing be undivided, or it has been partitioned
among them.
But if the inheritance has been
divided, and the thing sold has been awarded
to one of the heirs, the action for redemption
may be instituted against him for the whole.
(1517)
Redemption against heirs of vendee.
The vendor a retro can exercise the right
to redeem against the heirs of the vendee a retro
with respect only to their respective shares,
whether the thing be undivided or it has been
partitioned among them.
However, if by partition the entire
property has been adjudicated to one of the heirs,
the vendor can exercise the right to redeem
against said heir for the whole.
ART. 1616. The vendor cannot avail himself
of the right of repurchase without returning to
the vendee the price of the sale, and in
addition:
(1) The expenses of the contract, and any
other legitimate payments made by
reason of the sale;
(2) The necessary and useful expenses
made on the thing sold. (1518)
Obligation of vendor a retro in case of
redemption.
He must return to the vendee a retro:
(1) The price.
(2) Expenses of contract and other legitimate
expenses.
(3) Necessary and useful expenses.

a. The necessary expenses which must be
repaid to the vendee are not those which are
ordinary and simple expenses of
preservation because these expenses are
incident to the enjoyment of the thing and
should be borne by the vendee. (10 Manresa
339-342.)
b. Useful expenses are refunded to the vendee
a retro because he is considered a possessor
in good faith. (Art. 546, par. 2.)
c. The vendor a retro is given no option to
require the vendee a retro to remove the
useful improvements on the land subject of
the sale a retro, unlike that granted the owner
of a land under Articles 546 and 54713 of the
Civil Code.
d. The vendor a retro must pay for the useful
improvements introduced by the vendee a
retro; otherwise, the latter may retain
possession of the land until reimbursement is
made.
e. The payment of land tax has been as neither
necessary nor useful.
Offer to redeem and tender of payment
generally required.
1. Offer to redeem must be bona fide.
2. When tender of payment not necessary.
Consignation of price generally not required.
1. Where right of repurchase judicially declared.
2. In case of absence of the vendee a retro.
ART. 1617. If at the time of the
execution of the sale there should be on the
land, visible or growing fruits, there shall be
no reimbursement for or prorating
of those existing at the time of redemption, if
no indemnity was paid by the purchaser when
the sale was executed.
Should there have been no fruits at the
time of the sale, and some exist at the time of
redemption, they shall be prorated between
the redemptioner and the vendee, giving the
latter the part corresponding to the time he
possessed the land in the last year, counted
from the anniversary of the date of the sale.
(1519a)
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Right of parties as to fruits of land.
(1) If there were fruits at the time of the sale and
the vendee paid for them, he must be
reimbursed at the time of redemption as the
payment forms part of the purchase price.
(2) If no indemnity was paid by the vendee for the
fruits, there shall be no reimbursement for
those existing at the time of redemption. (par.
1.)
(3) If the property had no fruits at the time of the
sale and some exist at the time of
redemption, they shall be apportioned
proportionately between the redemptioner
and the vendee, giving the latter a share in
proportion to the time he possessed the
property during the last year counted from the
anniversary of the date of the sale (par. 2.) to
compensate the vendee for his expense.
ART. 1618. The vendor who recovers the
thing sold shall receive it free from all charges
or mortgages constituted by the vendee, but
he shall respect the leases which the latter
may have executed in good faith, and in
accordance with the customs of the place
where the land is situated. (1520)
Right of vendor a retro to recover thing
sold free from charges.
The vendee a retro may alienate,
encumber, or perform other acts of ownership
over the thing sold. But his ownership being
revocable upon redemption, all acts done by him
are also revocable.
Thus, he may borrow money and
mortgage the property but when the vendor a
retro redeems, the vendee a retro is obliged to
redeem the mortgage. The vendor has the right
to receive the property in the same condition in
which it was at the time of the sale.
SECTION 2. — Legal Redemption
ART. 1619. Legal redemption is the
right to be subrogated, upon the same terms
and conditions stipulated in the contract, in
the place of one who acquires a thing by
purchase or dation in payment, or by any
other transaction whereby ownership is
transmitted by onerous title. (1521a)

Legal redemption defined.
Article 1619 gives the definition of legal
redemption. As the word “thing” is employed
without qualification, the right applies to both
movable and immovable property. (U.S. vs.
Caballero, 23 Phil. 65 [1912].)
Dation in payment defined.
Dation in payment or dacion en pago is the
transmission of the ownership of a thing by the
debtor to the creditor as the accepted equivalent
of the performance of an obligation. (8 Manresa
314; see Art. 1245.)
Nature of dation in payment.
(1) Sale of thing. — The undertaking partakes
in one sense of the nature of sale,1 that is,
the creditor is really buying the thing or
property of the debtor, payment for which is
to be charged against the debtor’s debt.
(2) Novation of an obligation. — In its modern
concept, what actually takes place in dacion
en pago is an objective novation of the
obligation where the thing offered as an
accepted equivalent of the performance of
an obligation is considered as the object of
the contract of sale, while the debt is
considered as the purchase price.
Basis and nature of right of legal redemption.
(1) The nature of conventional and legal rights of
redemption is identical, except for the source
of the right. While conventional redemption
arises from the voluntary agreement of the
parties, legal redemption proceeds from law.
(2) The right of legal redemption is not
predicated on proprietary right but on a bare
statutory privilege to be exercised only by the
person named in the statute. In other words,
the statute does not make actual ownership
at the time of sale or redemption a condition
precedent, the right following the person and
not the property.
(3) Legal redemption is in the nature of a mere
privilege created partly for reason of public
policy and partly for the benefit and
convenience of the redemptioner to afford
him a way out of what might be a
disagreeable or inconvenient association into
which he has been thrust. It is intended to
minimize co-ownership.
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Instances of legal redemption.
(1) Under the Civil Code, the instances of legal
redemption are found in Articles 1620, 1621,
1622, 1634 (infra.), and 1088.
Article 1088 provides:
“Should any of the heirs sell his
hereditary rights to a stranger before the
partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser
by reimbursing him for the price of the
sale, provided they do so within the
period of one month from the time they
were notified in writing of the sale of the
vendor.”
(2) Under special laws, the following are
instances of legal redemption:
a. Redemption by owner of real property sold
for delinquent taxes. The period is within
one year from the date of sale.
b. Repurchase by homesteader of homestead
sold under the Public Land Act. The period
is five years
c. Redemption by judgment debtor or
redemptioner of real property sold on
execution. The period is twelve months.
d. Redemption by mortgagor after mortgaged
property has been judicially foreclosed and
sold. The period is ninety days but before
confirmation of sale by the court.
e. Redemption by an agricultural lessee of
landholding sold by the landowner. The
period is 180 days from notice in writing
which shall be served by the vendee on all
lessees affected and the Department of
Agrarian Reform upon the registration of the
sale.
ART. 1620. A co-owner of a thing may
exercise the right of redemption in case the
shares of all the other co-owners or of any of
them, are sold to a third person. If the price of
the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to
exercise the right of redemption, they may
only do so in proportion to the share they may
respectively have in the thing owned in
common. (1522a)
Right of legal redemption of co-owner.
The right of legal redemption among co-owners
presupposed of course, the existence of a co-

ownership. The following are the requisites for the
right to exist:
(1) There must be co-ownership of a thing;
(2) There must be alienation of all or of any of the
shares of the other co-owners;
(3) The sale must be to a third person or stranger
(Art. 1620.), i.e., a non-co-owner; and
(4) The sale must be before partition.
By whom and against whom right may be
exercised.
1. A co-owner has the legal right to sell, assign,
or mortgage his ideal share in the property
held in common.
2. Co-owners have no right of legal redemption
against each other to whom the law grants
the same privilege, but only against a third
person.
3. Should any of the heirs sell his hereditary
right to a stranger before partition, any or all
of the co-heirs may be subrogated to the
rights of the purchaser by reimbursing him for
the purchase price, provided it be done within
the period of one (1) month to be counted
from the time they were notified in writing of
the sale by the vendor. (Art. 1088.)
4. The right of legal redemption is not granted
solely and exclusively to the original co-
owners but applies to those who
subsequently acquire their respective shares
while the community subsists.
When right cannot be invoked.
1. Thing owned in common partitioned.
2. Shares of all co-owners sold.
3. Thing owned in common had been offered for
sale by all co-owners.
Price of redemption.
1. Reasonable price. — The law requires the
redemptioner to pay only a reasonable price
if the price of the alienation is grossly
excessive. This is to prevent collusion
between the buyer and the selling co-owner.
2. Price stated in the deed of sale. — The
practice of understating the consideration of
transactions for the purpose of evading taxes
and fees due the government is violative of
public policy and injurious to public interest
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and must be condemned and the parties
guilty thereof must be made to suffer the
consequences of their ill-advised agreements
to defraud the State.
3. Amount actually paid by the buyer. — On the
other hand, if by false representations the
buyer obtains from the redemptioner an
amount (e.g., P100,000) greater than the
price which he actually paid (e.g., P80,000),
the co-owner who made the repurchase can
recover from the buyer the difference
(P20,000) in an appropriate action.
Purpose of the grant of right to co-owners.
The purpose of the law in establishing the
right of legal redemption between co-owners is to
reduce the number of participants until the
community is done away with, as being a
hindrance to the development and better
administration of the property.
This reason exists while the community
subsists and the participants continue to be so
whether they be the original co-owners or their
successors.
ART. 1621. The owners of adjoining
lands shall also have the right of redemption
when a piece of rural land, the area of which
does not exceed one hectare, is alienated,
unless the grantee does not own any rural
land.
This right is not applicable to adjacent
lands which are separated by brooks, drains,
ravines, roads and other apparent servitudes
for the benefit of other estates.
If two or more adjoining owners desire
to exercise the right of redemption at the
same time, the owner of the adjoining land of
smaller area shall be preferred; and should
both lands have the same area, the one who
first requested the redemption. (1523a)
 Right of legal redemption of adjacent
owners of rural lands.
The following are the requisites for the exercise
of the right under this article:
(1) Both the land of the one exercising the right of
redemption and the land sought to be redeemed
must be rural;
(2) The lands must be adjacent;
(3) There must be an alienation;

(4) The piece of rural land alienated must not
exceed one (1) hectare;
(5) The grantee or vendee must already own any
other rural land; and
(6) The rural land sold must not be separated by
brooks, drains, ravines, roads and other apparent
servitudes from the adjoining lands.
Meaning of rural lands.
The word “rural” has been defined as
relating to or constituting tenement in land
adopted and used for agricultural or pastoral
purposes. It is one which, regardless of site, is
principally used for the purpose of obtaining
products from the soil as opposed to urban lands,
which are principally for the purpose of residence.
(Fabia vs. Intermediate Appellate Court, 133
SCRA 364 [1984], citing 3 Castan 124.)
Purpose of the grant of right to owners
of adjoining rural lands.
(1) To benefit adjacent owners and public
weal as well.
(2) To avoid difficulties in cultivation.
(3) To protect agriculture.
ART. 1622. Whenever a piece of urban
land which is so small and so situated that a
major portion thereof cannot be used for any
practical purpose within a reasonable time,
having been bought merely for speculation, is
about to be re-sold, the owner of any
adjoining land has a right of pre-emption at a
reasonable price.
If the re-sale has been perfected, the
owner of the adjoining land shall have a right
of redemption, also at a reasonable price.
When two or more owners of adjoining
lands wish to exercise the right of pre-
emption or redemption, the owner whose
intended use of the land in question appears
best justified shall be preferred. (n)
Pre-emption, which has been defined as the act
or right of purchasing before others. (72 C.J.S.
478.) It is exercised before the sale or resale
against the would-be vendor.
Redemption, which is exercised after the sale
has been perfected against the vendee. The
recognition of the right of redemption will result in
the rescission of the sale.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
9
Requisites:
a. The one exercising the right must be an
adjacent owner;
b. The piece of land sold must be so small
and so situated that a major portion
thereof cannot be used for any practical
purpose within a reasonable time; and
c. Such urban land was bought by its owner
merely for speculation.
Preference as between two or more adjacent
owners. — In case two or more adjoining owners
desire to exercise the right of legal redemption,
the law prefers him whose intended use of the
land appears best justified.
Meaning of urban land.
The term “urban,” as used in Article 1622, does
not necessarily refer to the nature of the land itself
sought to be redeemed nor to the purpose to
which it is somehow devoted, but to the character
of the community or vicinity in which it is found. In
this sense, even if the land is somehow dedicated
to agriculture, it is still urban in contemplation of
Article 1622, if it is located within the center of
population or the more or less populated portion
of a city or town. (Ortega vs. Orcine, 38 SCRA
276 [1971].)
Meaning of “to speculate.’’
According to Webster’s International Dictionary
(2nd edition, p. 2417.), “to speculate” means: “To
enter into a business transaction or venture from
which the profits or return are conjectural
because the undertaking is outside the ordinary
course of business, to purchase or sell with the
expectation of profiting by anticipated, but
conjectural fluctuations in price.
Purpose of the grant of right to owners of
adjoining urban lands.
Whereas, the objective of the right of redemption
of adjoining rural land is to encourage the
maximum development and utilization of
agricultural lands, the evident purpose of Article
1622 is to discourage speculation in real estate
and the consequent aggravation of the housing
problems in centers of population.
 10

ART. 1623. The right of legal pre-
emption or redemption shall not be exercised
except within thirty days from the notice in
writing by the prospective vendor, or by the
vendor, as the case may be. The
deed of sale shall not be recorded in the
Registry of Property, unless accompanied by
an affidavit of the vendor that he has given
written notice thereof to all possible
redemptioners.
The right of redemption of co-owners
excludes that of adjoining owners. (1524a)
to be made is a notice not only of a perfected
sale but of the actual execution and delivery
of the deed of sale.
5. Notice by any other insufficient. — The notice
required by Article 1623 must be given by the
vendor (or prospective vendor) and by
nobody else. This is clear from Article 1623
unlike Article 1524 of the former Civil Code
which did not specify who must give the
notice.

Period for exercise of right. How right exercised.

(1) Absolute and non-extendible - It is
peremptory and non-extendible.
(2) A condition precedent. — The thirty-day
period4 is not a prescriptive period but is
more a requisite or condition precedent
to the exercise of the right of legal
redemption.
(3) Reason for rule. — The fundamental
policy of the law is to discourage the
keeping for a long time of property in a
state of uncertainty, beyond the thirty-day
period, a situation which obviously is
unjust to the purchaser and prejudicial to
public interest.
Notice by vendor or prospective vendor.
The period of thirty (30) days is counted from the
notice in writing given by the prospective vendor
or by the vendor, as the case may be, and not by
the vendee.
1. Consignation in court. — In exercising the
right to redeem, the redemptioner may go to
the court directly, and practicallymake the
offer to repurchase through it. The reason for
this is that the redemptioner might not know
the vendee’s whereabouts or the latter might
even conceal himself to prevent redemption.
2. Tender of price. — That the legal
redemptioner is only required to pay a
reasonable price is no obstacle to the
requirement of tender. The statutory period
fixed for the exercise of the right of legal
redemption would be rendered meaningless
and of easy evasion, unless the redemptioner
is required to make an actual tender in good
faith of what he believes to be the reasonable
price of the land sought to be redeemed.

1. Reasons for rule. — The reasons for

requiring the vendor to give the notice are
easy to see.

2. Notice must be in writing. — The written

notice required under Article 1088 (supra.)
and Article 1623 is indispensable. Any other
kind of notice such as verbal or by
registration, or the mere knowledge of the
sale, acquired in some other manner by the
legal redemptioner, does not satisfy the
statute.

3. Form of written notice. — Jurisprudence

affirms the need for notice but its form has
been the subject of varying interpretations.

4. Contents of written notice of sale. — The

notice in writing which Article 1623 requires

LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7