GENERAL PRINCIPLES

DEFINITION

(Art. 1458)

PARTIES

OBLIGATIONS
(1) TO TRANSFER
OWNERSHIP

SELLER

SALE

CONSENT

Real Obligations

SUBJECT
MATTER

(2) TO DELIVER
POSSESION

Meeting of Minds

Real Obligation

BUYER
2

(3) TO

PAY

PRICE

ESSENTIAL CHARACTERISTICS OF SALE:

NOMINATE

vs.

Innominate

PRINCIPAL

vs.

Accessory

vs.

CONSENSUAL

vs.

Solemn

vs.

BILATERAL/
RECIPROCAL

vs.

Unilateral

ONEROUS

vs.

Gratuitious

COMMUTATIVE

vs.

TITLE
3

vs.

Aleatory
Mode

Prefaratory
Real

SALES

versus

CONSENSUAL

DONATION
SOLEMN
(i.e., 4th Requisite of
Form for validity)

ONEROUS/
COMMUTATIVE

ESSENCE:

GRATUITOUS
(i.e., Pure Liberality
as consideration)

BOTH INVOLVE THE TRANSFER OF

OWNERSHIP/POSSESSION OF
SUBJECT MATTER

SALES

versus

BARTER

SALE,

IS

BARTER:

BUT WITH THE

BEING REPLACED

TRANSFER
OWNERSHIP/POSSESSION OF ANOTHER SUBJECT MATTER
WITH

AN

OBLIGATION

PRICE
TO

THEREFORE: BARTER GOVERNED BY LAW ON SALES

BUT:
5

NOT COVERED BY STATUTE OF FRAUDS

SALES

versus

DACION EN PAGO:

DACION IS PROCESS OF EXTINGUISHMENT

EXISTING OBLIGATION (CONTRACTS)

OF

PRE-

(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 KJS Eco. Formwork System Phil.,

Inc., 413 SCRA 182 (2003)

DACION

NOVATES

THE

ORIGINAL

CONTRACTUAL

RELATIONS INTO A FULLY EXECUTED SALE

ESSENTIALLY: DACION GOVERNED BY LAW ON SALES

6

SALES

vs. CONTRACT FOR PIECE-OF-WORK:

K for Piece-of-Work:

Service is the Subject Matter

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 Internal Revenue v. Court of Appeals, 271 SCRA 605 (1997)

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:
7

THERE CAN BE NO CONTRACT FOR PIECE-OF-WORK FOR

PAST SERVICE RESULTING IN THE CREATION OF THE OBJECT
(ALWAYS A SALE)

SALES

vs.

AGENCY TO SELL/BUY
REPRESENTATIVE

AGENCY
FIDUCIARY

Essentially revocable
Fruits and of principal

NOT PERSONNALY LIABLE FOR THE

OBLIGATION CREATED BY THE SALE
CONTRACT

AGENT

NOT OBLIGED TO PAY THE PRICE

DOES NOT ASSUME THE RISKS OF
OWNERSHIP TO THE OBJECT OF SALE

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

RISKS OF LOSS

(b) SUBJECT MATTER

INSURABLE INTEREST
MAINTENANCE

SALE

versus

LEASE

LEASE:

ESSENTIALLY

INVOLVES

THE

TEMPORARY ENJOYMENT OF POSSESSION OF

THE SUBJECT MATTER

FEW INSTANCES:

10

TREATED AS SALE ON
INSTALLMENTS WHEN LEASE
STRUCTURED IN SUCH A WAY AS
TO AVOID APPLICATION OF THE
RECTO LAW

PARTIES TO A SALE
(The Essential Element of CONSENT)

GENERAL RULE: All Parties Having Capacity to Contract

EXCEPTIONS:

11

Can Be Valid Parties To a Sale

(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

OTHER RELATIVE DISQUALIFICATIONS

Guardian

Wards

Agent

Principal

(Art. 1491)

Except: When granted express power

to buy principals property

Administrator/
Executor

Estate under administration

BUT NOT: Purchase of Inheritance Rights

Public Officers

Government property
their jurisdiction

under

Judges/Justices/
Court Officers

Property falling in their jurisdiction

Lawyers

Clients property in litigation

Except: Contingency fee arrangement

12

SUBJECT MATTER
(OBLIGATION to Transfer Ownership and Deliver Possession)
1.

2.

3.

POSSIBLE THING

vs.

Impossible things

LICIT

vs.

Illicit

vs.

Non-Determinable
GENERICS

DETERMINATE
DETERMINABLE

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.

2.

3.

REAL/TRUE

vs.

(Reformation)

Money or its Equivalent

VALUABLE CONSIDERATION

CERTAIN
ASCERTAINABLE

. MANNER OF PAYMENT

RATIONALE:
14

FALSE
vs.

SIMULATED

vs.

PURE

(Void)

vs.

LIBERALITY

NOMINAL
CONSIDERATION

vs.

UNASCERTAINABLE

vs.

UNASCERTAINABLE

Must comply with Obligatory Force principle in

Contract Law

Must
meet
Onerous
characteristics of SALE

and

Commutative

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.
Jovan Land, Inc. v. CA, 268 SCRA 160 (1997)
San Miguel Properties Philippines, Inc. 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.

2.

Offer is at the complete will of Offeror, who may destroy

it at will prior to acceptance
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.

17

Only a certain Offer when met by an Absolute Acceptance

will give rise to a valid SALE.

CERTAIN OFFER
(a)

CONTAINS A CLEAR PROMISE TO SELL/TO BUY

(b)

COVERS A SUBJECT MATTER

(c)

Possible thing
Licit
Determinate or Determinable

COVERS A PRICE OR CONSIDERATION

18

THAT IS:

Real
Valuable
Certain or Ascertainable
With Manner of Payment/Performance
agreed upon

ABSOLUTE ACCEPTANCE

19

(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

OPTION CONTRACT:
ACCEPTANCE of OFFER to give on Option to Buy/to Sell

SUBJECT MATTER: Option or Privilege to Sell/ Purchase:

AN OBJECT:
- Possible
- Licit
- Determinate/
Determinable

CONSIDERATION:
20

AT A PRICE:
-

Real
- Valuable
- Certain/
Ascertainable

Anything separate and distinct from

Price

Ang Yu Asuncion v. Court of Appeals

238 SCRA 602 (1994)
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:

(a) If exercised within option period, gives rise

to Sale, which can be enforced by specific
performance
21

Ang Yu Asuncion v. Court of Appeals contd

(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

(c)

But if, however, Optioner-Offeror withdraws

Offer even during option period before its
acceptance (i.e., exercise):
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
22

RIGHT OF FIRST REFUSAL

ESSENCE:

CONDITION:

OFFEROR BOUNDS HIMSELF TO FIRST

OFFER SUBJECT MATTER TO OFFEREE
FOR SALE
IN THE EVENT OFFEROR EVER DECIDES
TO SELL IT
Possible thing

SUBJECT MATTER

Licit
Determinate/Determinable

PRICE:

THAT WILL

THEN (HAPPENING OF CONDITION) BE

AGREED UPON
23

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

DOCTRINES ON RFR contd

Equatorial Realty Dev., Inc. v.

Mayfair Theater

264 SCRA 483 (1996)

25

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

DOCTRINES ON RFR contd

Paraaque Kings Enterprises v. CA
268 SCRA 727 (1997)

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:
ESSENCE:
(1)

Obligations to do
Contract of Sale

To enter into a

DISTRIBUTION/ SUPPLY AGREEMENT

An Agreement to enter into a series
of Contracts of Sale
- National Grains Authority v. IAC, 171 SCRA 131 (1989)

- Johannes Schuback v. Court of Appeals, 227 SCRA 719 (1993)

(2)

MUTUAL PROMISES TO BUY AND

(CONTRACTS TO SELL)

27

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

28

Condition usually is the full payment of the

price

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
Birth sets the essence of the Sale

ESTABLISHES THE CONTRACTUAL PRINCIPLES OF:

29

CONSENSUALITY

MUTUALITY OR OBLIGATORY FORCE

RELATIVITY

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

30

Must be in writing signed by the party

sought to be bound

FORM OF SALE

contd

Memo must contain Description of:

(a)

(b)

SUBJECT MATTER

PRICE

Possible thing
Licit
Determinate/
Determinable

real
valuable
certain/ascertainable
manner of payment provided

(c)

SIGNED BY THE PARTY SOUGHT TO BE CHARGED

Exception: Electronic Document

OR PARTIALLY EXECUTED

(Estoppel)

OR WAIVER OF ADDUCEMENT OF ORAL EVIDENCE AT

TRIAL
31

FORM OF SALE

contd

What Constitutes Partial Execution?

Subject Matter
(a)

(b)

32

Performance Must
Touch Upon

Price
Cannot Cover Other
Consideration

Must Involve/Compromise Party Sought to

be Charged

FORMS THAT VOID CONTRACT OF SALE:

1.

SALE OF REALTY THROUGH AGENT:

AGENTS AUTHORITY MUST BE IN WRITING

OTHERWISE:

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

SALES OF IMMOVABLES
1.

PRIVATE DOCUMENT NEEDED

BETWEEN PARTIES

TO

BE

ENFORCEABLE

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

AND BINDING AGAINST THE WORD

TO

BE VALID

- Authority of Agent must be in writing VOID

- Bound by actual possession situation, otherwise
not in good faith
34

CONSUMMATION STAGE
(3)
(1)

PERFORMANCE
DELIVERY OF
SUBJECT MATTER
PAYMENT OF PRICE

SPECIFIC PERFORMANCE

RESCISSION
DOUBLE SALES RULE
SUBDIVISION LOTS &
CONDO UNITS RULES
RECTO LAW

MACEDA LAW

(2)

RISK OF LOSS

(5)

REMEDIES

(4)

EXTINGUISHMENT
CONVENTIONAL

REDEMPTION
(SALE A RETRO)

EQUITABLE
MORTGAGES
LEGAL
REDEMPTION

CONDITIONS AND
WARRANTIES

EFFECTS OF CONDITIONS
EXPRESS WARRANTIES

IMPLIED WARRANTIES
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.
36

TO ACCEPT DELIVERY OF SUBJECT MATTER

DELIVERY OF SUBJECT MATTER

TRADITION AS THE MODE
TO TRANSFER

OWNERSHIP

- Actual or Physical Delivery

- Constructive Delivery

MAGIC OF
TRADITION

Fulfillment of the Primary

Obligation of the Seller
Transfer Ownership/
Possession to the Buyer

37

DOCTRINES ON CONSTRUCTIVE DELIVERY

EXECUTION OF PUBLIC INSTRUMENT
- No Contrary Stipulation/ Intention
- Seller Must Have Control
- Passage of Reasonable Time

EXCEPTION: WHEN BUYER TAKES

THE RISK

Produces the Same Magic of

Actual Delivery

CONSTRUCTIVE DELIVERY
CONSTITUTUM POSSESORIUM
TRADITIO BREVI MANU
TRADITIO LONGA MANU OR SYMBOLIC DELVERY
Public Instrument

DELIVERY FOR
INTANGIBLES

Transfer/Negotiation of
Evidences the Intangible

the

Title

Enjoyment of Rights and Privileges with

the consent of the Seller

DELIVERY THROUGH CARRIER

- FAS
- FOB
- CIF

DOCUMENTS TO TITLE
39

RULES ON DOUBLE SALES UNDER ART. 1544

1.

FOR MOVABLES:

2.

40

First to Possess, in good faith

Oldest Title, in good faith
Then: First in time, priority in rights

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

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), Inc. 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
First Buyer wins by being first (first in
time) and does not need the benefits
of Art. 1544
Carbonell v. CA, 69 SCRA 99 (1976)
Uraca v. CA, 278 SCRA 702 (1997)
Consolidated Rural Bank (Cagayan Valley), Inc. v. CA, 448
SCRA 347 (2005)

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

DOCTRINES ON ART. 1544

contd

(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

(h)

contd

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

GLOBAL RULES ON DOUBLE SALE FOR REAL ESTATE

47

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.

GLOBAL RULES ON DOUBLE SALE

contd

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

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.

49

Estoppel on the Part of the True Owner (Art. 1426)

SALE AND DELIVERY BY NON-OWNER

3.

50

contd

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

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

SUBJECT MATTER LOST:

contd

3. AFTER PERFECTION BUT BEFORE DELIVERY

Arts. 1164, 1189, and 1262(

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
53

SUBJECT MATTER LOST:

contd

4.

AFTER DELIVERY: BUYER BEARS RISK, UNDER

Res Perit Domino

EXCEPT: When retention of Possession by

Seller for purpose of securing
payment of the Purchase Price
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)

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

(b)

Contracts to Sell Movables Not Covered

Levy v. Gervacio, 69 Phil. 52 (1939)

Visayan Sawmill Co.,

Inc. 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 II v. Servicewide Specialists, Inc., 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

RECTO LAW: contd

(d)

REMEDY OF SPECIFIC PERFORMANCE: No bar to full

recovery
Tajanglangit v. Southern Motors, 101 Phil. 606 (1957)

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.
Industrial Finance Corp. v. Ramirez, 77 SCRA 152 (1977)
57

RECTO LAW: contd

(e)

NATURE OF REMEDY OF RESCISSION

Inherent Barring Effect of Rescission
Surrender of mortgaged property not
equivalent to rescission.
Vda. de Quiambao v. Manila Motors Co., Inc.,
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

RECTO LAW: contd

(f)

REMEDY OF FORECLOSURE
(i)

Third Party Mortgage

Ridad v. Filipinas Investment, 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 II v. Servicewide Specialists, Inc., 258 SCRA 634 (1996).

59

RECTO LAW: contd

(iii)

H-V Barring Effects of Foreclosure

Foreclosure on the chattel mortgage

prevents further action on the supporting
real estate mortgage.
Cruz v. Filipinas Investment & Finance Corp.,23 SCRA 791 (1968)
Borbon II v. Servicewide Specialists, Inc., 258 SCRA 634 (1996)

(iv) Amounts Barred from Recovery

Macondray & Co. v. Eustaquio, 64 Phil. 446 (1937)

(v)

Perverse Buyer
Filipinas Investment & Finance Corp. v. Ridad, 30 SCRA 564 (1969)

60

RECTO LAW: contd

(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)

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 Jose 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 Jose 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)

(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)

BUT SEE:

62

Peoples Indl and Comm. Corp. v. CA, 281 SCRA 206 (1997)

MACEDA LAW

contd

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)

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, Inc., 348 SCRA 391, 398 (2000)

63

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

OTHER RIGHTS GRANTED TO BUYER

(a) To sell/assign his rights to another person
(b) To reinstate contract by updating account

during
grace
period,
cancellation of contract

before

actual

(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

4. OTHER REMEDIES ON SALE OF REAL ESTATE

66

(a)

ANTICIPATORY BREACH (ART. 1591)

(b)

RESCISSION ON SALE ON NONRESIDENTIAL REALTY ON

INSTALLMENTS (Arts. 1191 and 1592)

(c)

SEC. 23 AND 24, PRES. DECREE 957

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

Rescission requires a positive act
Non-fulfillment of Condition ipso jure
destroys contract

Substantial Breach Relevant to Contract of

Sale, Irrelevant to Contracts to Sell

68

K TO SELL VS. K OF SALE

1.

contd

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 Industrial 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

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)

In 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. In 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)
72

CONDITIONS AND WARRANTIES

A.

EXPRESS WARRANTIES

contd
(Art. 1546)

(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

affirmation or promise thereon.

relying

on

such

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)
73

CONDITIONS AND WARRANTIES

B.

IMPLIED WARRANTIES

contd

(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 codefendant (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)

74

CONDITIONS AND WARRANTIES

contd

3.

WARRANTY AGAINST NON-APPARENT

SERVITUDES

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

CONDITIONS AND WARRANTIES

contd

Nutrimix Feeds Corp. v. CA

441 SCRA 357 (2004)

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:
a.
b.
c.
d.
e.

Defect must be hidden;

Must exist at the time the sale was made;
Must ordinarily have been excluded from the contract;
Defect, must be important (render the thing unfit or
considerably decreases fitness);
Action must be instituted within statute of limitations.

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.
76

Investments & Dev., Inc. v. CA, 162 SCRA 636 [1988]

CONDITIONS AND WARRANTIES

contd

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
6.

IMPLIED WARRANTIES IN THE SALE OF GOODS

a. Warranty as to Fitness or Quality
b. Sale of Goods by Sample

7.

77

ADDITIONAL WARRANTIES

FOR CONSUMER
(Arts. 68, Consumer Act of the Philippines, R.A. 7394).

PRODUCTS

CONDITIONS AND WARRANTIES

78

contd

C.

EFFECTS OF WARRANTIES

D.

EFFECTS OF WAIVERS

G.

BUYER'S OPTIONS IN CASE OF BREACH OF WARRANTY

EXTINGUISHMENT OF SALE
SALE EXTINGUISHED BY SAME MODES
APPLICABLE TO ALL CONTRACTS
Arts. 1231, 1600

REDEMPTION
IS
A MODE
EXTINGUISHMENT UNIQUE TO SALES:
CONVENTIONAL REDEMPTION: SALE
WITH RIGHT TO REPURCHASE

LEGAL REDEMPTION
79

OF

CONVENTIONAL REDEMPTION
(SALE WITH A RIGHT TO REPURCHASE)

NATURE OF RIGHT TO REPURCHASE:

Reserved by Seller at the point of
Perfection.
Art. 1601
Villarica v. CA, 26 SCRA 189 (1968)

Even though
instrument

found

in

separate

Torres v. CA, 216 SCRA 287 (1992)

Claravall v. CA, 190 SCRA 439 (1990)

80

CONVENTIONAL REDEMPTION

contd

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)

81

RIGHT A RETRO versus OPTION 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) Maximum Period for

(C) Period of Option may be

exercise of Right of
redemption
cannot
exceed 10 years

(D) Right of repurchase requires

in addition the tender of the
amount mandated, including
consignation when tender
not possible
82

beyond 10 years

(D) Option may be exercised

by mere notice to Offeror

SALIENT MATTERS ON
RIGHT OF REDEMPTION
(a)

PERIOD OF REDEMPTION:
When no Period agreed upon: 4 years
When

Period agreed
exceed 10 years

When

Period
Stipulated

of

upon:

cannot

Non-Redemption

Anchuel v. IAC, 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
(b)

contd

HOW REDEMPTION EFFECTED:

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

85

(1978)

SALIENT MATTERS

contd

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

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

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).
87

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

EQUITABLE MORTGAGE

contd

RATIONALE OF EQUITABLE MORTGAGE PRINCIPLE

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

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)

90

Pactum Commissorium principle does not

apply:
(a)

When security for a debt is also money in

time deposit

form of

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, Inc. v. CA, 275 SCRA 267 (1997)

91

RULINGS ON EM
CONTRA:

contd

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

REMEDIES IN EM

contd

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

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.
Intended to minimize co-ownership.
Fernandez v. Tarun, 391 SCRA 653 (2002)
Basa v. Aguilar, 117 SCRA 128 (1982)
95

LEGAL REDEMPTION contd

PERIOD OF LEGAL REDEMPTION BEGINS:

30 DAYS FROM WRITTEN NOTICE

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, Inc., 4 SCRA 526 (1962)
Salatandol v. Retes, 162 SCRA 568 (1988)
96

LEGAL REDEMPTION

contd

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).

97

LEGAL REDEMPTION contd

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. IAC, 150 SCRA 259 (1987)

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. IAC, 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

INSTANCES OF LEGAL REDEMPTION

(b)

contd

Among Co-owners (Art. 1620)

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

(c)

contd

Among Adjoining Owners (Art. 1621-1622)

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)

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

INSTANCES OF LEGAL REDEMPTION

contd

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).

104

INSTANCES OF LEGAL REDEMPTION

(f)

contd

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

INSTANCES OF LEGAL REDEMPTION

contd

(h) Redemption in Extrajudicial Foreclosure

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).
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)

106

INSTANCES OF LEGAL REDEMPTION

contd

No right to redeem from a judicial foreclosure sale,

except those granted by banks or banking institutions
GSIS v. CFI, 175 SCRA 19 (1989).

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

(j)

contd

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. If 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

(k)

contd

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