By:

CESAR L. VILLANUEVA, B.S.C., C.P.A., LL.B., LL.M., FAICD, D.J.S.

ATENEO DE MANILA LAW SCHOOL
Rockwell Center, Makati City
LAW on SALES
REVIEW
DEFINITION (Art. 1458)
PARTIES
OBLIGATIONS
SELLER
BUYER
(1) TO TRANSFER
OWNERSHIP
(2) TO DELIVER
POSSESION
(3) TO PAY
SUBJECT
MATTER
PRICE
GENERAL PRINCIPLES
CONSENT
Meeting of Minds
Real Obligation
Real Obligations
SALE
2
ESSENTIAL CHARACTERISTICS OF SALE:
NOMINATE
PRINCIPAL
CONSENSUAL
BILATERAL/
RECIPROCAL
ONEROUS
COMMUTATIVE
vs.
TITLE
vs.
vs.
vs.
vs.
vs.
vs.
Innominate
Solemn Real
Unilateral
vs.
Gratuitious
Mode
Accessory
Aleatory
vs.
Prefaratory
3
SALES versus DONATION
CONSENSUAL
SOLEMN
ONEROUS/
COMMUTATIVE
GRATUITOUS
ESSENCE: BOTH INVOLVE THE TRANSFER OF
OWNERSHIP/POSSESSION OF
SUBJECT MATTER
(i.e., 4
th
Requisite of
Form for validity)
(i.e., Pure Liberality
as consideration)
4
SALES versus BARTER:
BARTER IS SALE, BUT WITH THE PRICE BEING REPLACED
WITH AN OBLIGATION TO TRANSFER
OWNERSHIP/POSSESSION OF ANOTHER
SUBJECT MATTER
THEREFORE: BARTER GOVERNED BY LAW ON SALES
BUT: NOT COVERED BY STATUTE OF FRAUDS
5
SALES versus DACION EN PAGO:
DACION IS PROCESS OF EXTINGUISHMENT OF PRE-
EXISTING OBLIGATION (CONTRACTS)
ESSENTIALLY: DACION GOVERNED BY LAW ON SALES
DACION NOVATES THE ORIGINAL CONTRACTUAL
RELATIONS INTO A FULLY EXECUTED SALE
(a) There must be delivery of subject matter in lieu of an
pre-existing obligation;
(b) There must be difference between prestation due and
what is give in substitute;
(c) There must be a clear meeting of minds that the
pre-existing obligation is extinguished by reason of
the prestation substituted.
Lo v KJ S Eco. Formwork System Phil.,
I nc., 413 SCRA 182 (2003)
6
SALES vs. CONTRACT FOR PIECE-OF-WORK:
Ineluctably, whether the contract be one of sale or one
for a Piece of Work, a transfer of ownership is involved
and a party necessarily walks away with an object.
Commission of I nternal Revenue v. Court of Appeals, 271 SCRA 605 (1997)
K for Piece-of-Work: Service is the Subject Matter
Although there is the primary obligation to
pay fee (or price), the main motivation is the
reputation, skill, mastery of contractor.
Engineering & Machinery Corp. v. Court of Appeals, 252 SCRA 156
(1996)
BUT:
THERE CAN BE NO CONTRACT FOR PIECE-OF-WORK FOR
PAST SERVICE RESULTING IN THE CREATION OF THE OBJECT
(ALWAYS A SALE)
7
SALES vs. AGENCY TO SELL/BUY
AGENCY
REPRESENTATIVE
FIDUCIARY
Essentially revocable
Fruits and of principal
AGENT
NOT PERSONNALY LIABLE FOR THE
OBLIGATION CREATED BY THE SALE
CONTRACT
NOT OBLIGED TO PAY THE PRICE
DOES NOT ASSUME THE RISKS OF
OWNERSHIP TO THE OBJECT OF SALE
8
SALES vs. AGENCY TO SELL/BUY Contd
THEREFORE:
AGENT is deemed to be Seller/Buyer
when contracted to assume Risks and
Obligations contrary to his representative/
fiduciary role:
(a) HE ASSUMES OBLIGATION TO PAY THE PRICE
(b) SUBJECT MATTER
RISKS OF LOSS
INSURABLE INTEREST
MAINTENANCE
9
SALE versus LEASE:
LEASE ESSENTIALLY INVOLVES THE
TEMPORARY ENJOYMENT OF POSSESSION OF
THE SUBJECT MATTER
TREATED AS SALE ON
INSTALLMENTS WHEN LEASE
STRUCTURED IN SUCH A WAY AS
TO AVOID APPLICATION OF THE
RECTO LAW
10
FEW INSTANCES:
PARTIES TO A SALE
(The Essential Element of CONSENT)
GENERAL RULE:
All Parties Having Capacity to Contract
Can Be Valid Parties To a Sale
EXCEPTIONS:
(a) Minors, Demented, Deaf-Mutes Sale is Voidable
- Purchase of Necessaries
- Emancipation
(b) Spouses (Art. 1490)
- Sales to Third Parties Sale by One Spouse Void
- Sales to Each Other Void
Except: When marriage governed by Complete
Separation of Property Regime
By Pre-nuptials
By Judicial decree
11
OTHER RELATIVE DISQUALIFICATIONS (Art. 1491)
Guardian Wards
Agent
Principal
Except: When granted express power
to buy principals property
Administrator/
Executor
Estate under administration
Public Officers
Government property under
their jurisdiction
Judges/Justices/
Court Officers
Property falling in their jurisdiction
Lawyers Clients property in litigation
Except: Contingency fee arrangement
BUT NOT: Purchase of Inheritance Rights
12
SUBJECT MATTER
(OBLIGATION to Transfer Ownership and Deliver Possession)
1. POSSIBLE THING
2. LICIT
3. DETERMINATE
DETERMINABLE
vs.
vs.
vs.
Impossible things
Illicit
Non-Determinable
GENERICS
RATIONALE: Transfer of Ownership/Possession of the
Subject Matter is the ESSENCE of SALE
Obligation should therefore not be illusory
To comply with the Obligatory Force
principle in Contract Law
13
PRICE & OTHER CONSIDERATION
(The Obligation to Pay)
1. REAL/TRUE vs.
FALSE
(Reformation)
vs.
SIMULATED
(Void)
2. Money or its Equivalent vs. PURE vs. NOMINAL
VALUABLE CONSIDERATION LIBERALITY CONSIDERATION
4. MANNER OF PAYMENT
vs.
UNASCERTAINABLE
ASCERTAINABLE
3. CERTAIN
RATIONALE:
Must comply with Obligatory Force principle in
Contract Law
Must meet Onerous and Commutative
characteristics of SALE
14
UNASCERTAINABLE
vs.
STAGES IN LIFE OF SALE
NEGOTIATION
Covers the period from the time the prospective contracting
parties indicate interest in the contract up to the time immediate
before the contract is perfected.
PERFECTION
Takes place upon the concurrence of the essential elements
of the Sale which are:
the meeting of the minds of the parties
as to the object of the contract
upon the price.
CONSUMMATION
It begins when the parties perform their respective
undertaking under the perfected contract of sale, culminating in
the extinguishments thereof.
J ovan Land, I nc. v. CA, 268 SCRA 160 (1997)
San Miguel Properties Philippines, I nc. v. Huang, 336 SCRA 737 (2000)
15
POLICITACION STAGE
Invitations to make Offers (Proposals)
OFFERS
ACCEPTANCES
AGENCY TO SELL/TO BUY
OPTION CONTRACTS
RIGHTS OF FIRST REFUSAL
AGREEMENTS TO ENTER INTO SERIES OF SALES
MUTUAL PROMISES TO BUY AND SELL
(Contracts to Sell of the First Type)
16
RULES ON OFFERS:
1. Offer is at the complete will of Offeror, who may destroy
it at will prior to acceptance
2. Will disappear or lapse upon the happening of the
condition or period placed upon it
3. When floated unconditionally, will be extinguished
through the passage of reasonable time
4. Cannot be accepted partially or even substantially
Counter-offer extinguishes original Offer
5. Legal effect of acceptance is taken only from point of
view of Offeror
Offeror may still extinguish Offer at any time before he has
knowledge of Acceptance
6. Only a certain Offer when met by an Absolute Acceptance
will give rise to a valid SALE.
17
CERTAIN OFFER
(a) CONTAINS A CLEAR PROMISE TO SELL/TO BUY

(b) COVERS A SUBJECT MATTER THAT IS:
Possible thing
Licit
Determinate or Determinable

(c) COVERS A PRICE OR CONSIDERATION
Real
Valuable
Certain or Ascertainable
With Manner of Payment/Performance
agreed upon
18
ABSOLUTE ACCEPTANCE
(a) NO CONDITION OR AMENDMENT OF THE
TERMS OF THE OFFER
(b) MAY CLARIFY
(c) BUT NEVER TOUCH ON THE
TERMS/COVERAGE OF SUBJECT MATTER
AND TERMS/COVERAGE OF PRICE
19
OPTION CONTRACT:
ACCEPTANCE of OFFER to give on Option to Buy/to Sell
CONSIDERATION:
Anything separate and distinct from
Price
SUBJECT MATTER:
Option or Privilege to Sell/ Purchase:
AN OBJECT: AT A PRICE:
- Possible - Real
- Licit - Valuable
- Determinate/ - Certain/
Determinable Ascertainable
20
1. If no separate consideration, Option Contract
void, but may constitute certain Offer which can
be withdrawn by Offeror, but if accepted before
withdrawal would give rise to a valid Sale
(Sanchez v. Rigos doctrine)
2. If withdrawal of option/offer whimsical or
arbitrary, could give rise to damage claim under
Art. 19 of Civil Code
3. When there is separate consideration, an
Option Contract deemed perfected:
Ang Yu Asuncion v. Court of Appeals
238 SCRA 602 (1994)
21
(a) If exercised within option period, gives rise
to Sale, which can be enforced by specific
performance
(b) Would be a breach of the Option Contract, for
Offeror to withdraw the offer during the agreed
period, but withdrawal destroys nevertheless
the Option
Ang Yu Asuncion v. Court of Appeals contd
22
Optionee-Offeree may not sue for specific
performance on the Sale since it has failed
to reach its own perfection stage
Optioner-Offeror, however, renders himself
liable for damages for breach of option
(c) But if, however, Optioner-Offeror withdraws
Offer even during option period before its
acceptance (i.e., exercise):
RIGHT OF FIRST REFUSAL
OFFEROR BOUNDS HIMSELF TO FIRST
OFFER SUBJECT MATTER TO OFFEREE
FOR SALE
IN THE EVENT OFFEROR EVER DECIDES
TO SELL IT
SUBJECT MATTER
Possible thing
Licit
Determinate/Determinable
PRICE: THAT WILL THEN (HAPPENING OF CONDITION) BE
AGREED UPON
23
ESSENCE:
CONDITION:
DOCTRINES ON RIGHTS OF FIRST REFUSAL
Ang Yu Asuncion v. Court of Appeals
Generally, RFRs would be none contracts, for
lack of cause or consideration, or failure to agree
the valid Price for the expectant contract
Merely innovative juridical relation
RFR
Cannot be enforced by specific performance
Not being a Contract, it lacks essence of
consensuality, obligatory force or mutuality
Breach allows recovery of damage based on Art. 19
principle of Abuse of right
24
Equatorial Realty Dev., I nc. v. Mayfair Theater
264 SCRA 483 (1996)
DOCTRINES ON RFR contd
When RFR attached to a valid principal contract
(e.g. Lease), its enforcement takes its vitality from
the obligatory force of the principal contract
Such RFR, when breached may be enforced, at the
Price at which Subject Matter sold to Third Party
The Third-Party Buyers purchase may be
rescinded under accion pauliana, i.e., entered into
in breach and in fraud of Optionees contractual
right
25
Paraaque Kings Enterprises v. CA
268 SCRA 727 (1997)
DOCTRINES ON RFR contd
RFR is complied with by first offering the Subject
Matter to the Optionee and negotiating for a Sale
There is no obligation to reach a sale,
obligation is to negotiate in good faith
Only when negotiations do not ripen into a Sale,
can Subject Matter be offered to Third-Party
Buyer, but at same price and terms asked of the
Optionee
Otherwise, must re-offer under new terms to
Optionee
26
AGREEMENTS TO ENTER INTO FUTURE SALE
OR SERIES OF SALES:
- National Grains Authority v. I AC, 171 SCRA 131 (1989)
- J ohannes Schuback v. Court of Appeals, 227 SCRA 719 (1993)
(1) DISTRIBUTION/ SUPPLY AGREEMENT
27
ESSENCE:
An Agreement to enter into a series
of Contracts of Sale
Obligations to do To enter into a
Contract of Sale
(2) MUTUAL PROMISES TO BUY AND TO SELL
(CONTRACTS TO SELL)
MUTUAL PROMISES TO BUY AND SELL
(CONTRACTS TO SELL)
1. AGREEMENTS TO ENTER INTO CONTRACT OF
SALE UPON HAPPENING OF THE CONDITIONS
Essentially, contains Obligations to do: to
enter into a Sale
2. CONDITIONAL CONTRACT OF SALE WHERE THE
BILATERAL OBLIGATIONS TO BUY AND SELL HAVE
BEEN AGREED UPON, BUT SUBJECT TO SUSPENSIVE
CONDITION
Condition usually is the full payment of the
price
28
PERFECTION STAGE
PERFECTION HAPPENS WHEN A CERTAIN
OFFER HAS BEEN MET BY AN ABSOLUTE
ACCEPTANCE
THE ONLY POINT IN TIME TO DETERMINE THE
VALIDITY OR INVALIDITY OF A CONTRACT OF SALE
ESTABLISHES THE CONTRACTUAL PRINCIPLES OF:
CONSENSUALITY
MUTUALITY OR OBLIGATORY FORCE
RELATIVITY
29
Birth sets the essence of the Sale
FORM OF SALE
GENERALLY:
None, because Sale is consensual
contract
FOR ENFORCEABILITY: STATUTE OF FRAUDS
1. Sale which by its terms is not to be
performed within one (1) year.
2. Sale of Movables, at least P500
3. Sale of Immovables, at any price
Must be in writing signed by the party
sought to be bound
30
FORM OF SALE contd
Memo must contain Description of:
(a) SUBJECT MATTER
Possible thing
Licit
Determinate/
Determinable
(b) PRICE
real
valuable
certain/ascertainable
manner of payment provided
OR PARTIALLY EXECUTED (Estoppel)
OR WAIVER OF ADDUCEMENT OF ORAL EVIDENCE AT
TRIAL
31
(c) SIGNED BY THE PARTY SOUGHT TO BE CHARGED
Exception: Electronic Document
FORM OF SALE contd
What Constitutes Partial Execution?
(a) Performance Must
Touch Upon
Subject Matter
Price
Cannot Cover Other
Consideration
(b) Must Involve/Compromise Party Sought to
be Charged
32
FORMS THAT VOID CONTRACT OF SALE:
1. SALE OF REALTY THROUGH AGENT:
AGENTS AUTHORITY MUST BE IN WRITING
SALE VOID:
- EVEN IF DEED OF SALE IN
WRITING and/or NOTARIZED
- EVEN IF THERE HAS BEEN
PARTIAL/ FULL PAYMENT
- EVEN IF THERE HAS BEEN
DELIVERY OF SUBJECT MATTER
- EVEN IF SALE REGISTERED
33
OTHERWISE:
SALES OF IMMOVABLES
1. PRIVATE DOCUMENT NEEDED TO BE ENFORCEABLE
BETWEEN PARTIES
EXCEPT: PARTIAL EXECUTION/WAIVER
2. MUST BE IN A PUBLIC INSTRUMENT
-TO BIND THE PUBLIC
-TO BE REGISTRABLE WITH REGISTRY OF DEEDS
3. FOR REAL ESTATE, MUST BE REGISTERED TO BE VALID
AND BINDING AGAINST THE WORD
34
- Authority of Agent must be in writing VOID
- Bound by actual possession situation, otherwise
not in good faith
CONSUMMATION STAGE
EFFECTS OF CONDITIONS
EXPRESS WARRANTIES
IMPLIED WARRANTIES
(3) REMEDIES
(1) PERFORMANCE
DELIVERY OF
SUBJECT MATTER
PAYMENT OF PRICE
(5) EXTINGUISHMENT
CONVENTIONAL
REDEMPTION
(SALE A RETRO)
EQUITABLE
MORTGAGES
LEGAL
REDEMPTION
(2) RISK OF LOSS
(4) CONDITIONS AND
WARRANTIES
SPECIFIC PERFORMANCE
RESCISSION
DOUBLE SALES RULE
SUBDIVISION LOTS &
CONDO UNITS RULES
RECTO LAW
MACEDA LAW
35
OBLIGATIONS OF SELLER
1. TO PRESERVE THE THING WITH DILIGENCE OF A
GOOD FATHER OF A FAMILY
2. TO DELIVER THE SUBJECT MATTER
3. To DELIVER FRUITS, ACCESSORIES AND
ACCESSIONS
4. To COMPLY WITH WARRANTIES
OBLIGATIONS OF BUYER
1. TO PAY THE PRICE
2. TO ACCEPT DELIVERY OF SUBJECT MATTER
36
DELIVERY OF SUBJECT MATTER
TRADITION AS THE MODE
TO TRANSFER OWNERSHIP
- Actual or Physical Delivery
- Constructive Delivery
37
MAGIC OF
TRADITION
Fulfillment of the Primary
Obligation of the Seller
Transfer Ownership/
Possession to the Buyer
EXECUTION OF PUBLIC INSTRUMENT
- No Contrary Stipulation/ Intention
- Seller Must Have Control
- Passage of Reasonable Time
EXCEPTION: WHEN BUYER TAKES THE RISK
DOCTRINES ON CONSTRUCTIVE DELIVERY
Produces the Same Magic of
Actual Delivery
CONSTRUCTIVE DELIVERY
CONSTITUTUM POSSESORIUM
TRADITIO BREVI MANU
TRADITIO LONGA MANU OR SYMBOLIC DELVERY
39
DELIVERY THROUGH CARRIER
- FAS
- FOB
- CIF
DOCUMENTS TO TITLE
DELIVERY FOR
INTANGIBLES
Public Instrument
Transfer/Negotiation of the Title
Evidences the Intangible
Enjoyment of Rights and Privileges with
the consent of the Seller
RULES ON DOUBLE SALES UNDER ART. 1544
1. FOR MOVABLES:
First to Possess, in good faith
Oldest Title, in good faith
Then: First in time, priority in rights
2. FOR IMMOVABLES:
First to Register, in good faith
First to Possess, in good faith
Oldest Title, in good faith
Then: First in time, priority in rights
40
REQUISITES FOR ART. 1544 TO APPLY
Cheng v. Genato, 300 SCRA 722 (1998)
(a) The two (or more) sales transactions must
constitute valid Sales;
(b) The two (or more) sales transactions must pertain
to exactly the same Subject Matter;
(c) The two (or more) Buyers at odds over the rightful
ownership of the Subject Matter must each
represent conflicting interests; and
(d) The two (or more) Buyers at odds over the rightful
ownership of the Subject Matter must each have
bought from the very same Seller
Consolidated Rural Bank (Cagayan Valley), I nc. v. CA, 448
SCRA 347 (2005)
41
EFFECTS OF ART. 1544 REQUISITES
Not applicable where one of the
Sales is Void
Not applicable to Contracts to Sell
Not applicable if first sale is the
Subject Matter and the second sale
is the redemption right to the
Subject Matter
42
DOCTRINES ON ART. 1544 DOUBLE SALES RULES
(a) Rules under Art. 1544 are addressed to the
Second Buyer, who is mandated to do
positive things if he hopes to win at all
Carbonell v. CA, 69 SCRA 99 (1976)
Uraca v. CA, 278 SCRA 702 (1997)
Consolidated Rural Bank (Cagayan Valley), I nc. v. CA, 448
SCRA 347 (2005)
First Buyer wins by being first (first in
time) and does not need the benefits
of Art. 1544
43
DOCTRINES ON ART. 1544 contd
(b) First Buyer wins by virtue of greater
doctrine of first in time, priority in rights
(c) Second Buyer must register his purchase
while in good faith if he hopes to win:
(d) First Buyer, who is always in good faith,
when he registers ahead, wins became
second buyer in hopeless
(e) Even if Second Buyer was first to possess
in good faith, the subsequent registration
by First Buyer prevails
Taedo v. CA, 252 SCRA 80 (1996)
44
(f) Knowledge of the First Buyer of the
second sale does not adversely affect
First Buyer, nor does it constitute
registration in favor of the Second Buyer
(g) However, knowledge of the Second Buyer
of the first sale, would place him not only
in bad faith, but would constitute
registration in favor of the First Buyer
Cruz v. Cabana, 129 SCRA 656 (1984)
45
DOCTRINES ON ART. 1544 contd
(h) It seems that Second Buyer must have
paid in full the Price to gain the benefit
under Art. 1544, as the Court defines the
meaning of good faith to include
having paid full value
Heirs of Aguilar-Reyes v. Spouses Mijares, 410 SCRA 97 (2003)
Tanongon v. Samson, 382 SCRA 130 (2002)
Balatbat v. CA, 261 SCRA 128 (1996)
Agricultural and Home Extension Dev. v. CA, 213 SCRA 536 (1992)
46
DOCTRINES ON ART. 1544 contd
GLOBAL RULES ON DOUBLE SALE FOR REAL ESTATE
I. First to Register, in Good Faith and for Value, his
Purchase of Land registered under the Torrens
System wins, for registration is the Operative
Act (Does not matter whether he is First or
Second Buyer)
II. For Unregistered Land, as between a
conventional prior purchase, and a second
purchase at public auction, the first
Conventional Buyer wins, since the Buyer at
public sale is bound by the provisions of the
Rules of Court that says he only takes whatever
is the remaining title of the judgment debtor.
47
III. The Rules of Double Sale under Art. 1544 shall
apply, only when the requisites under Cheng v.
Genato are present, as follows:
1. First to Register in good faith
But this can only apply to unregistered
land, because Rule I applies to registered
land.
2. First to Possess in good faith, or
3. Oldest Title, in good faith
IV. First in time, priority in rights applies last
48
GLOBAL RULES ON DOUBLE SALE contd
SALE AND DELIVERY BY NON-OWNER
GENERAL RULE:
Nemo Dat Quod Non Habet
SPECIAL RULES:
1. Sale and Delivery, with subsequent
acquisition of title by owner (Art. 1434), ipso
jure transfers title to Buyer
2. Sale by Co-Owner
- particular portion
- whole property
3. Estoppel on the Part of the True Owner (Art. 1426)
49
3. Chain of Title Theory under the Torrens
System
4. Sales by Court Authority
5. Sales in Merchant Stores
6. Sales by One Having Voidable Title Prior
to Annulment
7. Sale under Documents of Title
SALE AND DELIVERY BY NON-OWNER contd
50
RULES FOR DETERIORATION, FRUITS
AND IMPROVEMENTS
RULES HAVE NO APPLICATION IS SUBJECT
MATTER IS MERELY DETERMINABLE (Art. 1263)
ROMAN LAW DOCTRINE: Buyer bears the
consequences of
Deterioration, but
benefits from the Fruits
and Improvements
Arts. 1480, 1163-1262
Arts. 1189, 1537 and 1538
51
RULES WHEN SUBJECT MATTER LOST:
1. BEFORE PERFECTION: Res Perit Domino
Roman v. Grimalt, 6 Phil. 96 (1906)


2. AT TIME OF PERFECTION: Seller (Arts. 1493 and 1494)

Sale is rendered inefficacious
52
General Rule: For Goods, risk borne by Seller
under Res perit domino rule
Chrysler Phil. v. CA, 133 SCRA 567 (1984)
Union Motor Corp v. CA, 361 SCRA 506 (2001)
Loss by Fault of a Party (Arts. 1480, 1504, 1538)
LOSS BY FORTUITOUS EVENT: Two Schools of
Thought

Arts. 1480, 1163, 1164, 1165
Arts. 1504, 1538, and 1189
SUBJECT MATTER LOST: contd
53
3. AFTER PERFECTION BUT BEFORE DELIVERY
Arts. 1164, 1189, and 1262(
SUBJECT MATTER LOST: contd
4. AFTER DELIVERY: BUYER BEARS RISK, UNDER
Res Perit Domino
Art. 1504
Song Fo & Co. v. Oria, 33 Phil. 3 (1915)
Lawyer's Coop v. Tabora, 13 SCRA 762 (1965)
Lawyer's Coop v. Narciso, 55 O.G. 3313)
EXCEPT: When retention of Possession by
Seller for purpose of securing
payment of the Purchase Price
54
REMEDIES FOR CONTRACTS OF SALE
1. REMEDIES OF UNPAID SELLER OF GOODS
Possessory lien (Arts. 1526-1529, 1503, 1535)
Stoppage in transitu (Arts. 1530-1532, 1535, 1636[2])

Special Right of Resale (Art. 1533)
Special Right to Rescind (Art. 1534)
55
2. RECTO LAW: SALES OF MOVABLES ON INSTALLMENTS
(a) Meaning of Installment Sale Levy v. Gervacio, 69 Phil. 52 (1939)
(b) Contracts to Sell Movables Not Covered Visayan Sawmill Co.,
I nc. v. CA, 219 SCRA 378 (1993)
(c) Nature of Remedies of Unpaid Seller
Remedies under Art. 1484 are not cumulative, but
alternative and exclusive.
Borbon I I v. Servicewide Specialists, I nc., 258 SCRA 634 (1996)
Seeking a writ of replevin consistent with all three
remedies
Universal Motors Corp. v. Dy Hian Tat, 28 SCRA 161 (1969)
56
(d) REMEDY OF SPECIFIC PERFORMANCE: No bar to full
recovery
Tajanglangit v. Southern Motors, 101 Phil. 606 (1957)
RECTO LAW: contd
Even when it is mortgaged property that is
sold on execution.
Southern Motors v. Moscoso, 2 SCRA 168 (1961)
Even with replevin and recovery of the
subject property, the action may still be for
specific performance.
I ndustrial Finance Corp. v. Ramirez, 77 SCRA 152 (1977)
57
(e) NATURE OF REMEDY OF RESCISSION
RECTO LAW: contd
Inherent Barring Effect of Rescission
Surrender of mortgaged property not
equivalent to rescission.
Vda. de Quiambao v. Manila Motors Co., I nc.,
3 SCRA 444 (1961)
Stipulation on non-return of payments
is valid provided not unconscionable.
Delta Motor Sales Corp. v. Niu Kim Duan,
213 SCRA 259 (1992)
58
(f) REMEDY OF FORECLOSURE
RECTO LAW: contd
(i) Third Party Mortgage
Ridad v. Filipinas I nvestment, 120 SCRA 246 (1983)
(ii) Assignor-Assignee; Financing Transactions
Zayas v. Luneta Motors, 117 SCRA 726 (1982)
When seller assigns his credit to another,
the assignee is likewise bound by the terms of
the Recto Law.
Borbon I I v. Servicewide Specialists, I nc., 258 SCRA 634 (1996).
59
(iii) H-V Barring Effects of Foreclosure
Foreclosure on the chattel mortgage
prevents further action on the supporting
real estate mortgage.
Cruz v. Filipinas I nvestment & Finance Corp.,23 SCRA 791 (1968)
Borbon I I v. Servicewide Specialists, I nc., 258 SCRA 634 (1996)
RECTO LAW: contd
(iv) Amounts Barred from Recovery
Macondray & Co. v. Eustaquio, 64 Phil. 446 (1937)
(v) Perverse Buyer
Filipinas I nvestment & Finance Corp. v. Ridad, 30 SCRA 564 (1969)
60
(g) PURPORTED LEASE WITH OPTION TO BUY:
Contracts purporting to be leases of personal property
with option to buy, when the lessor has deprived the lessee
of the possession or enjoyment of the thing. (Art. 1485)
RECTO LAW: contd
When purported Lessor takes possession of
subject movable, it is treated legally as a foreclosure
and the barring effects applicable to foreclosure
remedy, not rescission, are given application.
Vda. de J ose v. Barrueco, 67 Phil. 191 (1939)
Filinvest Credit Corp. v. CA, 178 SCRA 188 (1989)
U.S. Commercial v. Halili, 93 Phil. 271 (1953)
H.E. Heacock v. Bantal Manufacturing, 66 Phil. 245 (1938)
Manila Gas Corp. v. Calupita, 66 Phil. 747 (19 38)
Vda. de J ose v. Barrueco, 67 Phil. 191 (1939)
61
3. MACEDA LAW: SALES OF RESIDENTIAL REALTY
ON INSTALLMENTS (R.A. 6552)
(a) Role of Maceda Law
Lagandaon v. CA, 290 SCRA 463 (1998)
BUT SEE: Peoples Indl and Comm. Corp. v. CA, 281 SCRA 206 (1997)
(b) Transactions Covered
The formal requirements of rescission
under the Maceda Law apply even to contracts
entered into prior to its effectivity.
Siska Dev. Corp. v. Office of the President, 231 SCRA 674 (1994)
62
The Maceda Law makes no distinctions
between option and sale which under P.D.
957 also includes an exchange or attempt to sell,
an option of sale or purchase, a solicitation of a
sale or an offer to sell directly.
Realty Exchange Venture Corp. v. Sendino, 233 SCRA 665 (1994)
MACEDA LAW contd
63
Curiously: No application to Contract to Sell
because said law presupposes the
existence of a valid and effective
contract to sell a condominium.
Mortel v. KASSCO, I nc., 348 SCRA 391, 398 (2000)
MACEDA LAW contd
Pursuant to Art. 1253 of Civil Code, in a contract
involving installments with interest chargeable against the
remaining balance of the obligation, it is the duty of the
creditor-seller to inform the debtor-buyer of the interest that
falls due and that is applying the installment payments to
cover said interest. Otherwise, the creditor cannot apply the
payments to the interest and then hold the debtor in default for
non-payment of installments on the principal.
Rapanut v. CA, 246 SCRA 323 (1995)
(c) How Cancellation of Contract Can Be Effected:
Active Realty & Dev. Corp. v. Daroya, 382 SCRA 152 (2002)
64
MACEDA LAW contd
(a) To sell/assign his rights to another person
(b) To reinstate contract by updating account
during grace period, before actual
cancellation of contract
(c) To pay in advance installments or in full
unpaid balance of Price any time without
interest and have same annotated in title
Any stipulation in any contract entered
into contrary to the provisions of the Law,
shall be null and void. (Art. 7)
65
OTHER RIGHTS GRANTED TO BUYER
4. OTHER REMEDIES ON SALE OF REAL ESTATE
(a) ANTICIPATORY BREACH (ART. 1591)
(b) RESCISSION ON SALE ON NON-
RESIDENTIAL REALTY ON
INSTALLMENTS (Arts. 1191 and 1592)
(c) SEC. 23 AND 24, PRES. DECREE 957
66
CONTRACTS TO SELL
Versus
CONDITIONAL CONTRACTS OF SALE
Art. 1458 Defines a Sale to covered both
Absolute and Conditional
Both Contracts are usually bound by same
condition: Full payment of the Price
Both Contracts are consensual, onerous,
commutative, and cover bilateral
obligations
67
K TO SELL VS. K OF SALE contd
Power to Rescind is inherently Judicial
Non-fulfillment of Condition ipso jure
destroys contract
Substantial Breach Relevant to Contract of
Sale, Irrelevant to Contracts to Sell
Rescission requires a positive act
68
K TO SELL VS. K OF SALE contd
1. In Contract to Sell Ownership if Reserved by
Seller, while in a Contract to Sell ownership
transfers to Buyer upon delivery.
Ergo: K to Sell must have express
reservation of ownership
To execute a formal Deed of Sale
Only receipt of payment evidences sale
Seller retained original titles
69
K TO SELL VS. K OF SALE contd
2. Rescission of Contract to Sell is a matter
of right upon non-happening of the
condition
Ergo: K to Sell must have express
right to rescind the contract
upon default of the Buyer
A written notice of cancellation must be served
upon Buyer even when Contract to Sell
UP v. Delos Angeles, 35 SCRA 103 (1970)
70
CONDITIONS versus WARRANTIES
Power Commercial and I ndustrial Corp. v. CA
274 SCRA 597 (1997)
(a) Condition goes into root of existence of obligation,
whereas warranty goes into performance of such
obligation, and in fact may constitute an obligation
itself;
(b) Condition must be expressly stipulated by parties,
while warranty may form part of the obligation or
contract by provision of law, without previous
agreement; and
(c) Condition may attach itself either to the Obligations
of Seller, while warranty, express or implied, relates
to the Subject Matter itself or to the obligations of
Seller as to Subject Matter of the sale.
71
CONDITIONS AND WARRANTIES contd
I n a Sale with Assumption of Mortgage, the
assumption of mortgage is a condition to the sellers consent
so that without approval by the mortgagee, no sale is
perfected. I n such case, the seller remains the owner and
mortgagor of the property and retains the right to redeem the
foreclosed property.
Ramos v. CA, 279 SCRA 118 (1997)
Failure to comply with condition imposed upon perfection
of the contract results in failure of a contract, while the
failure to comply with a condition imposed on the
performance of an obligation only gives the other party the
option either to refuse to proceed with sale or waive the
condition.
Laforteza v. Machuca, 333 SCRA 643 (2000)
72
A. EXPRESS WARRANTIES (Art. 1546)
The law allows considerable latitude to sellers
statements, or dealers talk; and experience teaches
that it is exceedingly risky to accept it at its face value.
Ramos v. CA, 279 SCRA 118 (1997)
CONDITIONS AND WARRANTIES contd
(a) Must be an affirmation of fact or any promise by the
seller relating to Subject Matter of the sale;
(b) The natural tendency of such affirmation or promise
is to induce Buyer to purchase the thing; and
(c) Buyer purchases the thing relying on such
affirmation or promise thereon.
73
B. IMPLIED WARRANTIES (Art. 1547)
1. SELLER HAS RIGHT TO SELL
2. WARRANTY AGAINST EVICTION
Seller must be summoned in the suit for eviction at
the instance of the buyer (Art. 1558), and be made a co-
defendant (Art. 1559); or made a third-party defendant.
Escaler v. CA, 138 SCRA 1 (1985)
Canizares Tiana v. Torrejos, 21 Phil. 127 (1911)
J .M. Tuazon v. CA, 94 SCRA 413 (1979)
CONDITIONS AND WARRANTIES contd
74
3. WARRANTY AGAINST NON-APPARENT
SERVITUDES
CONDITIONS AND WARRANTIES contd
4. WARRANTY AGAINST HIDDEN DEFECTS
The stipulation in a contract of lease with option to
purchase (which it treated as a sale of movable on
installments) that the buyer-lessee "absolutely releases
the lessor from any liability whatsoever as to any and
all matters in relation to warranty in accordance with
the provisions hereinafter stipulated," was held as an
express waiver of warranty against hidden defect.
Filinvest Credit Corp. v. CA, 178 SCRA 188 (1989)
75
A hidden defect is one which is unknown or could not
have been known to the buyer. Under the law, the requisites
to recover on account of hidden defects are as follows:
CONDITIONS AND WARRANTIES contd
a. Defect must be hidden;
b. Must exist at the time the sale was made;
c. Must ordinarily have been excluded from the contract;
d. Defect, must be important (render the thing unfit or
considerably decreases fitness);
e. Action must be instituted within statute of limitations.
I nvestments & Dev., I nc. v. CA, 162 SCRA 636 [1988]
76
Nutrimix Feeds Corp. v. CA
441 SCRA 357 (2004)
The remedy against violation of warranty against hidden
defects is either to withdraw from the contract (accion
redhibitoria) or to demand a proportionate reduction of the
price (accion quanti minoris), with damages in either case.
CONDITIONS AND WARRANTIES contd
6. IMPLIED WARRANTIES IN THE SALE OF GOODS
a. Warranty as to Fitness or Quality
b. Sale of Goods by Sample
7. ADDITIONAL WARRANTIES FOR CONSUMER PRODUCTS
(Arts. 68, Consumer Act of the Philippines, R.A. 7394).
5. REDHIBITORY DEFECTS OF ANIMALS
a. Sale of a Team
b. Animals Sold at Fairs or Public Auction
c. Sale of Animals with Contagious Diseases
d. Sale of Unfit Animals
77
CONDITIONS AND WARRANTIES contd
C. EFFECTS OF WARRANTIES
D. EFFECTS OF WAIVERS
G. BUYER'S OPTIONS IN CASE OF BREACH OF WARRANTY
78
EXTINGUISHMENT OF SALE
SALE EXTINGUISHED BY SAME MODES
APPLICABLE TO ALL CONTRACTS
Arts. 1231, 1600
REDEMPTION IS A MODE OF
EXTINGUISHMENT UNIQUE TO SALES:
CONVENTIONAL REDEMPTION: SALE
WITH RIGHT TO REPURCHASE
LEGAL REDEMPTION
79
NATURE OF RIGHT TO REPURCHASE:
CONVENTIONAL REDEMPTION
(SALE WI TH A RI GHT TO REPURCHASE)
Reserved by Seller at the point of
Perfection.
Art. 1601
Villarica v. CA, 26 SCRA 189 (1968)
Even though found in a separate
instrument
Torres v. CA, 216 SCRA 287 (1992)
Claravall v. CA, 190 SCRA 439 (1990)
80
Its Validity is Tied to the Validity of the Contract
of Sale to which appended.
Nool v. Court of Appeals, 276 SCRA 149 (1997)

When Sale Covered by Deed, Right a retro may
be proved by parol evidence.
Mactan Cebu Intl Airport Authority v. Court of Appeals,
263 SCRA 736 (1996)
CONVENTIONAL REDEMPTION contd
81
RIGHT A RETRO versus OPTION CONTRACT
(A) RIGHT TO REDEEM NOT A SEPARATE
CONTRACT, BUT MERELY PART OF A MAIN
CONTRACT OF SALE, AND IN FACT CANNOT
EXIST UNLESS RESERVED AT THE TIME OF
THE PERFECTION OF THE MAIN CONTRACT
OF SALE
(AA) AN OPTION TO PURCHASE IS
GENERALLY A PRINCIPAL CONTRACT AND
MAY BE CREATED INDEPENDENT OF
ANOTHER CONTRACT

(A) Not separate contract, but
must be part of main
Contract of Sale
(A) Generally principal contract,
but may be appended in
another contract valid
(B) Right to Redeem does
not need separate
consideration
(B) Option requires consider-ation
separate and distinct of the
Price in order to be valid
(C) Period of Option may be
beyond 10 years
(C) Maximum Period for
exercise of Right of
redemption cannot
exceed 10 years
(D) Option may be exercised
by mere notice to Offeror
(D) Right of repurchase requires
in addition the tender of the
amount mandated, including
consignation when tender
not possible
82
SALIENT MATTERS ON
RIGHT OF REDEMPTION
(a) PERIOD OF REDEMPTION:
When no Period agreed upon: 4 years
When Period agreed upon: cannot
exceed 10 years
When Period of Non-Redemption
Stipulated
Anchuel v. I AC, 147 SCRA 434 (1987)
Tayao v. Dulay, 13 SCRA 758 (1965)
83
SALIENT MATTERS ON RIGHT OF
REDEMPTION contd
Pendency of Action Tolls Redemption
Period
Ong Chua v. Carr, 53 Phil. 975 (1929)
Non-Payment of Price Does Not Affect
Running of Redemption Period
Catangcatang v. Legayada, 84 SCRA 51 (1978)
84
SALIENT MATTERS contd
Only tender of payment is sufficient.
Legaspi v. CA, 142 SCRA 82 (1986)
Consignation is not required after tender is
refused.
Mariano v. CA, 222 SCRA 736 (1993)
But when tender not possible, consignation
should be made.
Catangcatang v. Legayada, 84 SCRA 51 (1978)
(b) HOW REDEMPTION EFFECTED:
85
Simply by Filing Judicial Action
Lee Chuy Realty Corp. v. CA, 250 SCRA 596 (1995)
Seller returning to Buyer:
Price of the sale
Expenses of contract, and any other
legitimate payments made by reason of the
sale
Necessary and useful expenses made on
the thing sold
ART. 1616
SALIENT MATTERS contd
86
SALIENT MATTERS contd
When Redemption Not Made, Buyer a retro
automatically acquires full ownership.
Oviedo v. Garcia, 40 SCRA 17 (1971)
HOWEVER:
In real property, consolidation shall
not be recorded in the Registry of
Property without a judicial order, after
the seller has been duly heard.
Article 1607
87
If Seller proves the transaction a sale a retro, he
is given a period of 30 days from finality of
judgment to repurchase.
Solid Homes v. CA, 275 SCRA 267 (1997).
EQUITABLE MORTGAGE
DEFINITION AND ELEMENTS
(a) The contract entered into is
denominated as a Sale (absolute or a
retro); and

(b) Real intention was to secure an
existing debt by way mortgage

Molina v. CA, 398 SCRA 97 (2003)
88
RATIONALE OF EQUITABLE MORTGAGE PRINCIPLE
EQUITABLE MORTGAGE contd
Prevent circumvention of law on usury and
rule against pactum commissorium, i.e. against
a creditor appropriating the mortgage property.
To end unjust or oppressive transactions or
violations in connection with a sale or property.
Spouses Misea v. Rongavilla, 303 SCRA 749 (1999).
Matanguihan v. CA, 275 SCRA 380 (1997)
Lao v. CA, 275 SCRA 237 (1997)
89
90
RULINGS ON EQUITABLE MORTGAGE
Badges of Equitable Mortgage in Art. 1602
Apply both to sale a retro and to a contract
purporting to be an absolute sale.
Tuazon v. CA, 341 SCRA 707 (2000)
Zamora v.CA, 260 SCRA 10 (1996)
Parol evidence is competent and admissible
in support of allegation of equitable mortgage
arrangement.
Mariano v. CA, 220 SCRA 716 (1993)
Pactum Commissorium principle does not
apply:
91
(a) When security for a debt is also money in form of
time deposit
Consing v. CA, 177 SCRA 14 (1989)
(b) To an agreement between Lender and Borrower
which provides that in the event Borrower fails to
comply with the new terms of payment, the agreement
shall automatically operate to be an instrument of
dacion en pago without need of executing any
document to such an effect.
Solid Homes, I nc. v. CA, 275 SCRA 267 (1997)
RULINGS ON EM contd
CONTRA:
P/N stipulation that upon makers failure
to pay interests, ownership of property
would automatically be transferred to
Payee and the covering deed of sale
would be registered, is in substance a
pactum commissorium in violation of Art.
2088.
A. Francisco Realty v. CA, 298 SCRA 349 (1998)
A pactum commisorium sale is void, registration
and obtaining of new title by apparent buyer would
also be void.
A. Francisco Realty v. CA, 298 SCRA 349 (1998)
92
REMEDIES UNDER EQUITABLE MORTGAGE
SITUATIONS
Apparent seller can seek reformation of
instrument (Art. 1605).
An action for consolidation of ownership (in
case presented as sale a retro) would be void, and
proper remedy of mortgagee-buyer is to file
appropriate foreclosure of the mortgage in
equity.
Briones-Vasquez vs. CA, 450 SCRA 644 (2005).
93
Additional 30-day Period of Redemption is
allowed under Art. 1606, in event courts should
find the sale was not equitable mortgage,
provided:
(a) Honest belief that it was equitable mortgage supported
by convincing evidence, such as badges under Art. 1602,
or consignation during trial of the amount of the alleged
loan
Abilla v. Gobonseng, 374 SCRA 51 (2002)
Vda. de Macoy v. CA, 206 SCRA 244 (1992)
94
REMEDIES IN EM contd
LEGAL REDEMPTION
DEFINITION AND RATIONALE:
Privilege created by law for reasons of
public policy.
For 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.
I ntended to minimize co-ownership.
Fernandez v. Tarun, 391 SCRA 653 (2002)
Basa v. Aguilar, 117 SCRA 128 (1982)
95
Written notice must cover perfected sale
Art. 1623
Spouses Doromal v. CA, 66 SCRA 575 (1975)
Notice must be given by seller; and that notice given
by buyer or even by the Register of Deeds are not
sufficient.
Francisco v. Boiser, 332 SCRA 305 (2000)
Butte v. Manuel Uy and Sons, I nc., 4 SCRA 526 (1962)
Salatandol v. Retes, 162 SCRA 568 (1988)
LEGAL REDEMPTION contd
PERIOD OF LEGAL REDEMPTION BEGINS:
30 DAYS FROM WRITTEN NOTICE
96
Seller furnishing of the copies of deeds of sale to
co-owner would be sufficient.
Distrito v. CA, 197 SCRA 606 (1991)
Conejero v. CA, 16 SCRA 775 (1966)
Badillo v. Ferrer, 152 SCRA 407 (1987)

Notice to minors may validly be served upon
parents even when not judicially appointed since
beneficial to the children.
Badillo v. Ferrer, 152 SCRA 407 (1987).
LEGAL REDEMPTION contd
97
Deemed complied when co-owners signed
Deed of Extrajudicial Partition embodying
disposition of part of the property owned in
common.
Fernandez v. Tarun, 391 SCRA 653 (2002)
Filing of ejectment suit or collection of rentals
against a co-owner dispenses with need for
written notice.
Alonzo v. I AC, 150 SCRA 259 (1987)
LEGAL REDEMPTION contd
98
INSTANCES OF LEGAL REDEMPTION
(a) Among Co-heirs (Art. 1088)
A co-heir cannot exercise the right of redemption
alone.
De Guzman v. CA, 148 SCRA 75 (1987)
No legal redemption for sale of the property of the
estate.
Plan v. I AC, 135 SCRA 270 (1985)
Written notice to other co-owners deemed inutile by
fact that ebuyers took possession of property in full view
of other co-owners.
Pilapil v. CA, 250 SCRA 560 (1995)
Notice given by city treasurer will not suffice.
Verdad v. CA, 256 SCRA 593 (1996)
99
(b) Among Co-owners (Art. 1620)
INSTANCES OF LEGAL REDEMPTION contd
Right of legal redemption arises only when shares
of other owners are sold to a third person, and not
to another co-owner
Fernandez v. Tarun, 391 SCRA 653 (2002)
Registration of the sale does not estop a co-owner
Cabrera v. Villanueva, 160 SCRA 627 (1988)
Notice required to be given to co-owners must be
in writing; and redemption by co-owner redounds to
the benefit of all other co-owners.
Mariano v. CA, 222 SCRA 736 (1993)
100
INSTANCES OF LEGAL REDEMPTION contd
No written notice required to co-owner who
acted as active intermediary in the
consummation of the sale.
Distrito v. CA, 197 SCRA 606 (1991)
Redemption by co-owner, even when he uses
his own fund, inures to the benefit of all the
other co-owners.
Annie Tan v. CA, 172 SCRA 660 (1989)
101
INSTANCES OF LEGAL REDEMPTION contd
Redemption covers only resale and does not
cover exchanges or barter of properties
De Santos v. City of Manila, 45 SCRA 409 (1972)
Requisite of speculation dropped.
Legaspi v. CA, 69 SCRA 360 (1976)
Does not apply if one adjacent lot is not also
rural land
Primary Structures Corp. v. Valencia, 409 SCRA 371 (2003)
(c) Among Adjoining Owners (Art. 1621-1622)
102
INSTANCES OF LEGAL REDEMPTION contd
(d) Sale of Credit in Litigation (Art. 1634) - 30 days

(e) Redemption of Homesteads (Sec. 119, C.A. 141)
The right to repurchase is granted by law
and need not be provided for in the deed of sale.
Berin v. CA, 194 SCRA 508 (1991).
103
Under the free patent or homestead provisions of
the Public Land Act a period of five (5) years from the
date of conveyance is provided, the five-year period to be
reckoned from the date of the sale and not from the date
of registration in the office of the Register of Deeds.
Lee Chuy Realty Corp. v. CA, 250 SCRA 596 (1995)

For purposes of reckoning the 5-year period to
exercise right of repurchase, the date of conveyance is
construed to refer to date of execution of the deed
transferring the ownership of the land to the buyer.
Mata v. CA, 318 SCRA 416 (1999).
INSTANCES OF LEGAL REDEMPTION contd
104
INSTANCES OF LEGAL REDEMPTION contd
(f) Redemption in Tax Sales (Sec. 215, NIRC of 1997)

(g) Redemption by judgment debtor (Sec. 27, Rule
39, Rules of Civil Procedure)
Period of redemption shall be at any time within
one (1) year from the date of registration of the
certificate of sale, so that the period is now to be
understood as composed of 365 days, unlike the 360
days under the old provisions of the Rules of Court
which referred to 12-month redemption period.
Ysmael v. CA, 318 SCRA 215 (1999)
105
(h) Redemption in Extrajudicial Foreclosure
A stipulation to render the right to redeem
defeasible by an option to buy on the part of the
creditor
Soriano v. Bautista, 6 SCRA 946 (1962)
One (1) year from registration in the Registry
of Deeds on Mortgage (Sec. 6, Act 3135).
(i) Redemption in judicial foreclosure of
mortgage
(Sec. 47, General Banking Law of 2000, R.A. 8791).
INSTANCES OF LEGAL REDEMPTION contd
106
No right to redeem from a judicial foreclosure sale,
except those granted by banks or banking institutions
GSI S v. CFI , 175 SCRA 19 (1989).
INSTANCES OF LEGAL REDEMPTION contd
The one-year redemption period in case of
foreclosure of real estate mortgage is not interrupted by
filing of action assailing validity of mortgage, so that at
the expiration thereof, mortgagee who acquires property
at the foreclosure sale can proceed to have title
consolidated in his name and a writ of possession issued
in his favor.
Union Bank of the Philippines v. CA, 359 SCRA 480 (2001)
Vaca v. CA, 234 SCRA 146 (1994)
107
INSTANCES OF LEGAL REDEMPTION contd
(j) Redemption in Foreclosure by Rural Banks
Land mortgaged to rural bank under R.A. 720,
may be redeemed within two (2) years from date of
foreclosure or from registration of sheriff's certificate
of sale. I f mortgagor fails to exercise such right, heirs
may still repurchase within 5 years from expiration of
2-year redemption period pursuant to Sec. 119 of
Public Land Act (C.A. 141).
Rural Bank of Davao City v. CA, 217 SCRA 554 (1993)
Heirs of Felicidad Canque v. CA, 275 SCRA 741 (1997)
108
INSTANCES OF LEGAL REDEMPTION contd
(k) Legal Right to Redeem under Agrarian
Reform Code
Sec. 12 of R.A. 3844, grants agricultural lessee
right to redeem within 180 days from notice in
writing and at a reasonable price and
consideration
Quio v. CA, 291 SCRA 249 (1998)
Redemption right of tenant does not begin to
run without written notice
Springsun Management Systems Corp. v. Camerino,
449 SCRA 65 (2005)
109
END