ATENEO DE MANILA LAW SCHOOL

Rockwell Center, Makati City

LAW on SALES
REVIEW
By:

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

GENERAL PRINCIPLES
DEFINITION(Art. 1458)
PARTIES

OBLIGATIONS
(1)TOTRANSFER
OWNERSHIP

SELLER

SALE

CONSENT
MeetingofMinds

BUYER
2

RealObligations

SUBJECT
MATTER

(2)TODELIVER
POSSESION

RealObligation
(3)TOPAY

PRICE

ESSENTIALCHARACTERISTICSOFSALE:
NOMINATE

vs.

Innominate

PRINCIPAL

vs.

Accessory

CONSENSUAL

vs.

Solemn

BILATERAL/
RECIPROCAL

vs.

Unilateral

ONEROUS

vs.

Gratuitious

COMMUTATIVE

vs.

TITLE
3

vs.

Aleatory
Mode

vs.

vs.

Prefaratory
Real

SALESversusDONATION
CONSENSUAL

SOLEMN
(i.e.,4thRequisiteof
Formforvalidity)

ONEROUS/

COMMUTATIVE

ESSENCE:

GRATUITOUS
(i.e.,PureLiberality
asconsideration)

BOTHINVOLVETHETRANSFEROF
OWNERSHIP/POSSESSIONOF
SUBJECTMATTER

SALESversusBARTER:
BARTER IS SALE, BUT WITH THE PRICE BEING REPLACED
WITH AN OBLIGATION TO TRANSFER
OWNERSHIP/POSSESSION OF ANOTHER
SUBJECTMATTER
THEREFORE:BARTERGOVERNEDBYLAWONSALES

BUT:NOTCOVEREDBYSTATUTEOFFRAUDS
5

SALESversusDACION EN PAGO:

DACION IS PROCESS OF EXTINGUISHMENT

EXISTINGOBLIGATION(CONTRACTS)

OF

PRE-

(a)Theremustbedeliveryofsubjectmatterinlieuofan
pre-existingobligation;
(b)Theremustbedifferencebetweenprestationdueand
whatisgiveinsubstitute;
(c) There must be a clear meeting of minds that the
pre-existing obligation is extinguished by reason of
theprestationsubstituted.

Lo v KJS Eco. Formwork System Phil.,

Inc., 413 SCRA 182 (2003)

DACION

NOVATES

THE

ORIGINAL

CONTRACTUAL

RELATIONSINTOAFULLYEXECUTEDSALE

ESSENTIALLY:DACION GOVERNEDBYLAWONSALES
6

SALESvs.CONTRACTFORPIECE-OF-WORK:
KforPiece-of-Work:ServiceistheSubjectMatter
Service
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 RESULTINGINTHE CREATIONOFTHE OBJECT
(ALWAYSASALE)

SALESvs.AGENCYTOSELL/BUY
REPRESENTATIVE

AGENCY

FIDUCIARY

Essentiallyrevocable
Fruitsandofprincipal

NOTPERSONNALYLIABLEFORTHE
OBLIGATIONCREATEDBYTHESALE
CONTRACT

AGENT

NOTOBLIGEDTOPAYTHEPRICE
DOESNOTASSUMETHERISKSOF
OWNERSHIPTOTHEOBJECTOFSALE

SALESvs.AGENCYTOSELL/BUYContd
THEREFORE:
AGENT

is deemed to be Seller/Buyer
when contracted to assume Risks and
Obligations contrary to his representative/
fiduciaryrole:
(a)HEASSUMESOBLIGATIONTOPAYTHEPRICE

RISKSOFLOSS
(b)SUBJECTMATTER

INSURABLEINTEREST
MAINTENANCE

SALEversusLEASE:
LEASE

ESSENTIALLY

INVOLVES

THE

TEMPORARY ENJOYMENT OF POSSESSION OF

THESUBJECTMATTER

FEWINSTANCES:

10

TREATED AS SALE ON
INSTALLMENTS WHEN LEASE
STRUCTUREDINSUCHAWAYAS
TO AVOID APPLICATION OF THE
RECTOLAW

PARTIES

TO A SALE

(The Essential Element of CONSENT)

GENERALRULE: All Parties Having Capacity to Contract

EXCEPTIONS:

Can Be Valid Parties To a Sale

(a)Minors,Demented,Deaf-MutesSaleisVoidable

-PurchaseofNecessaries
-Emancipation
(b)Spouses(Art. 1490)

-SalestoThirdPartiesSalebyOneSpouseVoid
-SalestoEachOtherVoid
Except: When marriage governed by Complete
SeparationofPropertyRegime

11

ByPre-nuptials

ByJudicialdecree

OTHERRELATIVEDISQUALIFICATIONS(Art. 1491)
Guardian
Agent

Wards
Principal
Except: Whengrantedexpresspower
tobuyprincipalsproperty

Administrator/
Executor

Estateunderadministration

PublicOfficers

Government property
theirjurisdiction

Judges/Justices/
CourtOfficers

Propertyfallingintheirjurisdiction

Lawyers

Clientspropertyinlitigation

BUTNOT:PurchaseofInheritanceRights

under

Except: Contingencyfeearrangement
12

SUBJECT MATTER
(OBLIGATION to Transfer Ownership and Deliver Possession)

POSSIBLETHING

vs.

Impossiblethings

LICIT

vs.

Illicit

vs.

Non-Determinable
GENERICS

1.

2.

DETERMINATE

3.

DETERMINABLE
RATIONALE:

Transfer of Ownership/Possession of the

SubjectMatteristheESSENCEofSALE
Obligationshouldthereforenotbeillusory
To comply with the Obligatory Force

principleinContractLaw
13

PRICE & OTHER CONSIDERATION

(The Obligation to Pay)
vs. FALSE

1.REAL/TRUE

vs.
(Reformation)

SIMULATED
(Void)

2.Money or its Equivalentvs.PUREvs.

NOMINAL
VALUABLECONSIDERATIONLIBERALITYCONSIDERATION

CERTAIN
ASCERTAINABLE

3.

.MANNEROFPAYMENT

RATIONALE:
14

vs.

UNASCERTAINABLE

vs.

UNASCERTAINABLE

Must comply with Obligatory Force principle in

ContractLaw

Must
meet
Onerous
characteristicsofSALE

and

Commutative

STAGES IN LIFE OF SALE

NEGOTIATION
Covers the period from the time the prospective contracting
partiesindicateinterestinthecontractuptothetimeimmediate
beforethecontractisperfected.

PERFECTION
Takesplaceupontheconcurrenceoftheessentialelements
oftheSalewhichare:
themeetingofthemindsoftheparties
astotheobjectofthecontract
upontheprice.

CONSUMMATION
It begins when the parties perform their respective
undertakingundertheperfectedcontractofsale,culminatingin
theextinguishmentsthereof.
Jovan Land, Inc. v. CA, 268 SCRA 160 (1997)
San Miguel Properties Philippines, Inc. v. Huang, 336 SCRA 737 (2000)
15

POLICITACIONSTAGE

Invitations to make Offers(Proposals)

OFFERS

ACCEPTANCES

AGENCYTOSELL/TOBUY

OPTIONCONTRACTS

RIGHTSOFFIRSTREFUSAL

AGREEMENTSTOENTERINTOSERIESOFSALES
MUTUALPROMISESTOBUYANDSELL

(ContractstoSelloftheFirstType)

16

RULESONOFFERS:

OfferisatthecompletewillofOfferor,who may destroy

it at will prior to acceptance

Will disappear or lapse upon the happening of the

conditionorperiodplaceduponit

When floated unconditionally, will be extinguished

throughthepassage of reasonable time

Cannotbeacceptedpartiallyorevensubstantially
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

17

OnlyacertainOfferwhenmetbyanAbsoluteAcceptance
willgiverisetoavalidSALE.

CERTAINOFFER
(a)

CONTAINSACLEARPROMISETOSELL/TOBUY

(b)

COVERSASUBJECTMATTERTHATIS:

Possible thing
Licit
Determinate or Determinable

(c)COVERSAPRICEORCONSIDERATION

18

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

ABSOLUTEACCEPTANCE
(a)

NO CONDITION OR AMENDMENT OF THE

TERMSOFTHEOFFER

(b)MAYCLARIFY

(c)BUTNEVERTOUCHONTHE

TERMS/COVERAGEOFSUBJECTMATTER
ANDTERMS/COVERAGEOFPRICE
19

OPTIONCONTRACT:
ACCEPTANCEofOFFERtogiveonOptiontoBuy/toSell

SUBJECTMATTER: OptionorPrivilegetoSell/Purchase:
ANOBJECT:ATAPRICE:
-Possible
- Real
- Licit
- Determinate/
Determinable

CONSIDERATION:
20

- Valuable
- Certain/
Ascertainable

Anything separate and distinct from

Price

Ang Yu Asuncion v. Court of Appeals

238 SCRA 602 (1994)

If no separate consideration, Option Contract

void,butmayconstitute certain Offerwhichcan
be withdrawn by Offeror, but if accepted before
withdrawal would give rise to a valid Sale
(Sanchez v. Rigos doctrine)

If withdrawal of option/offer whimsical or

arbitrary,couldgiverisetodamageclaimunder
Art.19ofCivilCode

3. When there is separate consideration, an

OptionContractdeemedperfected:
(a) Ifexercisedwithinoptionperiod,givesrise
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

Offerortowithdrawtheofferduringtheagreed
period, but withdrawal destroys nevertheless
theOption

(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
toreachitsownperfectionstage
Optioner-Offeror, however, renders himself
liablefordamagesforbreachofoption

22

RIGHTOFFIRSTREFUSAL
ESSENCE:

CONDITION:

OFFEROR BOUNDS HIMSELF TO FIRST

OFFER SUBJECT MATTER TO OFFEREE
FORSALE
INTHEEVENTOFFEROREVERDECIDES
TOSELLIT
Possiblething

SUBJECTMATTER

Licit
Determinate/Determinable

PRICE:THATWILLTHEN(HAPPENINGOFCONDITION)BE
AGREEDUPON
23

DOCTRINESONRIGHTSOFFIRSTREFUSAL
Ang Yu Asuncion v. Court of Appeals
Generally, RFRs would be none contracts, for

lack of cause or consideration, or failure to agree

thevalidPricefortheexpectantcontract
Merelyinnovative juridical relation
RFR
Cannotbeenforcedbyspecificperformance
Not

being a Contract, it lacks essence of

consensuality, obligatory force or mutuality

BreachallowsrecoveryofdamagebasedonArt.19

principleofAbuse of right
24

DOCTRINESONRFRcontd
Equatorial Realty Dev., Inc. v. Mayfair Theater
264 SCRA 483 (1996)

25

When RFR attached to a valid principal contract

(e.g. Lease), its enforcementtakesits vitalityfrom
theobligatoryforceoftheprincipalcontract

SuchRFR,whenbreachedmaybeenforced,atthe
PriceatwhichSubjectMattersoldtoThirdParty

The Third-Party Buyers purchase may be

rescinded under accion pauliana, i.e., entered into
in breach and in fraud of Optionees contractual
right

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

RFRiscompliedwithbyfirstofferingtheSubject

MattertotheOptioneeandnegotiatingforaSale

There is no obligation to reach a sale,

obligation is to negotiate in good faith

Onlywhen 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

AGREEMENTSTOENTERINTOFUTURESALE
ORSERIESOFSALES:
ESSENCE:

ObligationstodoToenterintoa
ContractofSale

(1)DISTRIBUTION/SUPPLYAGREEMENT
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)MUTUALPROMISESTOBUYANDTOSELL
(CONTRACTSTOSELL)
27

MUTUALPROMISESTOBUYANDSELL
(CONTRACTSTOSELL)

AGREEMENTSTO ENTER INTO CONTRACT OF

SALEUPONHAPPENINGOFTHECONDITIONS
Essentially,containsObligationstodo:to

enter into a Sale

2.

CONDITIONAL CONTRACT OF SALE WHERE THE

BILATERAL OBLIGATIONS TO BUY AND SELL HAVE
BEEN AGREED UPON,BUT SUBJECTTO 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
VALIDITYORINVALIDITYOFACONTRACTOFSALE
Birth sets the essence of the Sale

ESTABLISHESTHECONTRACTUALPRINCIPLESOF:

29

CONSENSUALITY

MUTUALITY OR OBLIGATORY FORCE

RELATIVITY

FORM OF SALE
GENERALLY:

None,becauseSaleisconsensual
contract

FORENFORCEABILITY: STATUTE OF FRAUDS

1.

Sale which by its terms is not to be

performedwithinone(1)year.

2.SaleofMovables,atleastP500
3.SaleofImmovables,atanyprice

30

Must be in writing signed by the party

sought to be bound

FORMOFSALEcontd
MemomustcontainDescriptionof:
(a)SUBJECTMATTER

(b)PRICE

Possiblething
Licit
Determinate/
Determinable

real
valuable

certain/ascertainable
mannerofpaymentprovided

(c)SIGNEDBYTHEPARTYSOUGHTTOBECHARGED

Exception:ElectronicDocument
ORPARTIALLY EXECUTED(Estoppel)
OR WAIVER OF ADDUCEMENT OF ORAL EVIDENCE AT
TRIAL

31

FORMOFSALEcontd
What Constitutes Partial Execution?
SubjectMatter
(a)PerformanceMust

TouchUpon

Price
CannotCoverOther
Consideration

(b)MustInvolve/CompromisePartySoughtto

beCharged

32

FORMSTHATVOIDCONTRACTOFSALE:
SALEOFREALTYTHROUGHAGENT:

1.

AGENTSAUTHORITYMUSTBEINWRITING

OTHERWISE:

SALEVOID: - EVEN

IF DEED OF SALE IN
WRITINGand/orNOTARIZED

- EVEN IF THERE HAS BEEN

PARTIAL/FULLPAYMENT
- EVEN IF THERE HAS BEEN
DELIVERYOFSUBJECTMATTER
- EVENIFSALEREGISTERED
33

SALESOFIMMOVABLES
PRIVATE DOCUMENT NEEDED
BETWEENPARTIES

TO BE

ENFORCEABLE

EXCEPT:PARTIALEXECUTION/WAIVER
2.MUSTBEINAPUBLICINSTRUMENT

-TOBINDTHEPUBLIC
-TOBEREGISTRABLEWITHREGISTRYOFDEEDS

3.

FOR REAL ESTATE, MUST BE REGISTERED TO BE VALID

ANDBINDINGAGAINSTTHEWORD
- Authority of Agent must be in writingVOID
- Bound by actual possession situation, otherwise
not in good faith

34

CONSUMMATION STAGE
(5)EXTINGUISHMENT

(3)REMEDIES
(1)PERFORMANCE

DELIVERYOF
SUBJECTMATTER
PAYMENTOFPRICE

SPECIFICPERFORMANCE
RESCISSION
DOUBLESALESRULE
SUBDIVISIONLOTS&
CONDOUNITSRULES
RECTOLAW

MACEDALAW

CONVENTIONAL

REDEMPTION

(SALEARETRO)

EQUITABLE
MORTGAGES
LEGAL
REDEMPTION

(4)CONDITIONSAND

WARRANTIES
(2)RISKOFLOSS

EFFECTSOFCONDITIONS
EXPRESSWARRANTIES
IMPLIEDWARRANTIES

35

OBLIGATIONSOFSELLER
1.TOPRESERVETHETHINGWITHDILIGENCEOFA

GOODFATHEROFAFAMILY
2.TODELIVERTHESUBJECTMATTER
3.ToDELIVERFRUITS,ACCESSORIESAND

ACCESSIONS
4.ToCOMPLYWITHWARRANTIES

OBLIGATIONSOFBUYER
1.TOPAYTHEPRICE
2.TOACCEPTDELIVERYOFSUBJECTMATTER
36

DELIVERYOFSUBJECTMATTER
TRADITIONASTHEMODE
TOTRANSFEROWNERSHIP

-ActualorPhysicalDelivery
-ConstructiveDelivery

MAGICOF
TRADITION

Fulfillment of the Primary

ObligationoftheSeller
TransferOwnership/
PossessiontotheBuyer

37

DOCTRINESONCONSTRUCTIVEDELIVERY
EXECUTION OF PUBLIC INSTRUMENT
- NoContraryStipulation/Intention
- SellerMustHaveControl
- PassageofReasonableTime

EXCEPTION:WHENBUYERTAKESTHERISK
Produces the Same Magic of
ActualDelivery

CONSTRUCTIVEDELIVERY
CONSTITUTUM POSSESORIUM
TRADITIO BREVI MANU
TRADITIO LONGA MANU OR SYMBOLIC DELVERY
PublicInstrument

DELIVERYFOR
INTANGIBLES

Transfer/Negotiation of the Title

EvidencestheIntangible
EnjoymentofRightsandPrivilegeswith
theconsentoftheSeller

DELIVERYTHROUGHCARRIER
-FAS
-FOB
-CIF

DOCUMENTSTOTITLE
39

RULESONDOUBLESALESUNDERART.1544
FORMOVABLES:

1.

FirsttoPossess,ingoodfaith
OldestTitle,ingoodfaith
Then:First in time, priority in rights

FORIMMOVABLES:

2.

40

FirsttoRegister,ingoodfaith

FirsttoPossess,ingoodfaith

OldestTitle,ingoodfaith

Then:First in time, priority in rights

REQUISITESFORART.1544TOAPPLY
Cheng v. Genato, 300 SCRA 722 (1998)
(a)

The two (or more) sales transactions must

constitutevalidSales;

(b) Thetwo(ormore)salestransactionsmustpertain

toexactlythesameSubjectMatter;
(c) Thetwo(ormore)Buyersatoddsovertherightful

ownership of the Subject Matter must each

representconflictinginterests;and
(d) Thetwo(ormore)Buyersatoddsovertherightful

ownershipoftheSubjectMattermust eachhave
boughtfromtheverysameSeller
Consolidated Rural Bank (Cagayan Valley), Inc. v. CA, 448
SCRA 347 (2005)
41

EFFECTSOFART.1544REQUISITES
Not applicable where one of the

SalesisVoid
NotapplicabletoContractstoSell
Not applicable if first sale is the

Subject Matter and the second sale

is the redemption right to the
SubjectMatter

42

DOCTRINESONART.1544DOUBLESALESRULES
(a)RulesunderArt.1544areaddressedtothe

Second Buyer, who is mandated to do

positivethingsifhehopestowinatall
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

DOCTRINESONART.1544contd
(b)

First Buyer wins by virtue of greater

doctrineoffirst in time, priority in rights

(c) Second Buyer must register his purchase

whileingoodfaithifhehopestowin:

(d) First Buyer, who is always in good faith,

when he registers ahead, wins became

secondbuyerinhopeless
(e)EvenifSecondBuyerwasfirsttopossess
in good faith, the subsequent registration
byFirstBuyerprevails
Taedo v. CA, 252 SCRA 80 (1996)
44

DOCTRINESONART.1544contd
(f)

Knowledge of the First Buyer of the

second sale does not adversely affect
First Buyer, nor does it constitute
registrationinfavoroftheSecondBuyer

(g) However,knowledgeoftheSecondBuyer

ofthefirstsale,wouldplacehimnotonly
in bad faith, but would constitute
registrationinfavoroftheFirstBuyer
Cruz v. Cabana, 129 SCRA 656 (1984)

45

DOCTRINESONART.1544contd
(h) It seems that Second Buyer must have

paid in full the Price to gain the benefit

underArt.1544,astheCourtdefinesthe
meaning of good faith to include
havingpaidfullvalue
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

GLOBALRULESONDOUBLESALEFORREALESTATE

47

I.

FirsttoRegister,inGoodFaithandforValue,his
Purchase of Land registered under the Torrens
System wins, for registration is the Operative
Act (Does not matter whether he is First or
SecondBuyer)

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
RulesofCourtthatsaysheonlytakeswhatever
istheremainingtitleofthejudgmentdebtor.

GLOBALRULESONDOUBLESALEcontd

The Rules of Double Sale under Art. 1544 shall

apply, only when the requisites under Cheng v.
Genato arepresent,asfollows:
1. FirsttoRegisteringoodfaith
Butthiscanonlyapplytounregistered

land,becauseRuleIappliestoregistered
land.
2. FirsttoPossessingoodfaith,or
3. OldestTitle,ingoodfaith

48

First in time, priority in rights applieslast

SALEANDDELIVERYBYNON-OWNER
GENERALRULE: Nemo Dat Quod Non Habet

SPECIALRULES:

SaleandDelivery,withsubsequent
acquisitionoftitlebyowner(Art.1434),ipso
juretransferstitletoBuyer

SalebyCo-Owner

-particularportion
-wholeproperty
5.

49

EstoppelonthePartoftheTrueOwner(Art.1426)

SALEANDDELIVERYBYNON-OWNERcontd

50

Chain of Title TheoryundertheTorrens

System

SalesbyCourtAuthority

SalesinMerchantStores

SalesbyOneHavingVoidableTitlePrior
toAnnulment

SaleunderDocumentsofTitle

RULES FOR DETERIORATION, FRUITS

ANDIMPROVEMENTS

RULESHAVENOAPPLICATIONISSUBJECT
MATTERISMERELYDETERMINABLE(Art.1263)

ROMANLAWDOCTRINE: Buyer

bears
the
consequences
of
Deterioration,
but
benefitsfromtheFruits
andImprovements
Arts. 1480, 1163-1262
Arts. 1189, 1537 and 1538

51

RULESWHENSUBJECTMATTERLOST:
BEFOREPERFECTION:Res Perit Domino

1.

Roman v. Grimalt, 6 Phil. 96 (1906)

2.ATTIMEOFPERFECTION:Seller(Arts.1493and1494)

Sale is rendered inefficacious

52

SUBJECTMATTERLOST:contd
3.AFTERPERFECTIONBUTBEFOREDELIVERY
Arts. 1164, 1189, and 1262(

General Rule: For Goods, risk borne by Seller

underRes perit dominorule
Chrysler Phil. v. CA, 133 SCRA 567 (1984)
Union Motor Corp v. CA, 361 SCRA 506 (2001)

LossbyFaultofaParty(Arts. 1480, 1504, 1538)

LOSSBYFORTUITOUSEVENT:TwoSchoolsof
Thought
Arts. 1480, 1163, 1164, 1165
Arts. 1504, 1538, and 1189
53

SUBJECTMATTERLOST:contd
4.AFTERDELIVERY:BUYERBEARSRISK,UNDER

Res Perit Domino

EXCEPT: When retention of Possession by

Seller for purpose of securing
paymentofthePurchasePrice
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

REMEDIESFORCONTRACTSOFSALE
1. REMEDIES OF UNPAID SELLER OF GOODS

Possessorylien(Arts. 1526-1529, 1503, 1535)

Stoppagein transitu(Arts. 1530-1532, 1535, 1636[2])
SpecialRightofResale(Art. 1533)
SpecialRighttoRescind(Art. 1534)

55

2.RECTOLAW:SALES OF MOVABLES ON INSTALLMENTS

(a)MeaningofInstallmentSaleLevy v. Gervacio, 69 Phil. 52 (1939)
(b)ContractstoSellMovablesNotCoveredVisayan Sawmill Co.,
Inc. v. CA, 219 SCRA 378 (1993)

(c)NatureofRemediesofUnpaidSeller

RemediesunderArt.1484arenotcumulative,but
alternativeandexclusive.
Borbon II v. Servicewide Specialists, Inc., 258 SCRA 634 (1996)

Seekingawritofreplevinconsistentwithallthree
remedies
Universal Motors Corp. v. Dy Hian Tat, 28 SCRA 161 (1969)

56

RECTOLAW:contd
(d)REMEDYOFSPECIFICPERFORMANCE:Nobartofull

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

RECTOLAW:contd

NATUREOFREMEDYOFRESCISSION

(e)

InherentBarringEffectofRescission
Surrender of mortgaged property not
equivalenttorescission.
Vda. de Quiambao v. Manila Motors Co., Inc.,
3 SCRA 444 (1961)

Stipulation on non-return of payments

isvalidprovidednotunconscionable.
Delta Motor Sales Corp. v. Niu Kim Duan,
213 SCRA 259 (1992)

58

RECTOLAW:contd
(f)REMEDYOFFORECLOSURE
(i)ThirdPartyMortgage
Ridad v. Filipinas Investment, 120 SCRA 246 (1983)

(ii)Assignor-Assignee;FinancingTransactions
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

RECTOLAW:contd
(iii)H-VBarringEffectsofForeclosure

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

(v)PerverseBuyer
Filipinas Investment & Finance Corp. v. Ridad, 30 SCRA 564 (1969)
60

RECTOLAW:contd

PURPORTEDLEASEWITHOPTIONTOBUY:

(g)

Contractspurportingtobeleasesofpersonalproperty

withoptiontobuy,whenthelessorhasdeprivedthelessee
ofthepossessionorenjoymentofthething.(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)RoleofMacedaLaw
Lagandaon v. CA, 290 SCRA 463 (1998)

(b)TransactionsCovered

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

62

MACEDALAWcontd
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
contracttosellacondominium.
Mortel v. KASSCO, Inc., 348 SCRA 391, 398 (2000)

63

MACEDALAWcontd
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)HowCancellationofContractCanBeEffected:
Active Realty & Dev. Corp. v. Daroya, 382 SCRA 152 (2002)
64

MACEDALAWcontd
OTHERRIGHTSGRANTEDTOBUYER
(a)Tosell/assignhisrightstoanotherperson
(b) To reinstate contract by updating account

during grace period,

cancellationofcontract

before

actual

(c) To pay in advance installments or in full

unpaid balance of Price any time without

interestandhavesameannotatedintitle
Anystipulationinanycontractentered
into contrary to the provisions of the Law,
shallbenullandvoid.(Art. 7)
65

4.OTHERREMEDIESONSALEOFREALESTATE
(a)ANTICIPATORYBREACH(ART.1591)
(b)RESCISSIONONSALEONNON-

RESIDENTIALREALTYON
INSTALLMENTS(Arts.1191and1592)
(c)SEC.23AND24,PRES.DECREE957

66

CONTRACTSTOSELL
Versus
CONDITIONALCONTRACTSOFSALE
Art. 1458 Defines a Sale to covered both
AbsoluteandConditional
BothContractsareusuallyboundbysame
condition:FullpaymentofthePrice
Both Contracts are consensual, onerous,
commutative,
and
cover
bilateral
obligations
67

KTOSELLVS. K OFSALEcontd
PowertoRescindisinherentlyJudicial
Rescissionrequiresapositiveact
Non-fulfillment of Condition ipso jure
destroyscontract
SubstantialBreachRelevanttoContractof
Sale,IrrelevanttoContractstoSell

68

KTOSELLVS. K OFSALEcontd
1. In Contract to Sell Ownership if Reserved by

Seller, while in a Contract to Sell ownership

transferstoBuyerupondelivery.

Ergo: K to Sell must have express

reservationofownership
ToexecuteaformalDeedofSale
Onlyreceiptofpaymentevidencessale
Sellerretainedoriginaltitles
69

KTOSELLVS. K OFSALEcontd
2.RescissionofContracttoSellisamatter
ofrightuponnon-happeningofthe
condition
Ergo: K to Sell must have express
right to rescind the contract
upondefaultoftheBuyer
Awrittennoticeofcancellationmustbeserved
uponBuyerevenwhenContracttoSell
UP v. Delos Angeles, 35 SCRA 103 (1970)

70

CONDITIONSversusWARRANTIES
Power Commercial and Industrial Corp. v. CA
274 SCRA 597 (1997)

(a) Conditiongoesintorootofexistenceofobligation,

whereaswarrantygoesintoperformanceofsuch
obligation,andinfactmayconstituteanobligation
itself;
(b) Conditionmustbeexpresslystipulatedbyparties,

whilewarrantymayformpartoftheobligationor
contractbyprovisionoflaw,withoutprevious
agreement;and
(c) ConditionmayattachitselfeithertotheObligations

ofSeller,whilewarranty,expressorimplied,relates
totheSubjectMatteritselfortotheobligationsof
SellerastoSubjectMatterofthesale.
71

CONDITIONSANDWARRANTIEScontd
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

CONDITIONSANDWARRANTIEScontd

EXPRESSWARRANTIES(Art. 1546)

A.

(a)Mustbean affirmation of fact or any promise bythe

sellerrelatingtoSubjectMatterofthesale;
(b)The natural tendency ofsuchaffirmationorpromise
isto induce Buyer to purchasethething;and
(c) Buyer purchases the thing relying on such
affirmationorpromisethereon.

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

CONDITIONSANDWARRANTIEScontd
IMPLIEDWARRANTIES(Art. 1547)

B.

1.SELLERHASRIGHTTOSELL
2.WARRANTYAGAINSTEVICTION

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

CONDITIONSANDWARRANTIEScontd
WARRANTYAGAINSTNON-APPARENT
SERVITUDES

3.

WARRANTYAGAINSTHIDDENDEFECTS

4.

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

CONDITIONSANDWARRANTIEScontd
Nutrimix Feeds Corp. v. CA
441 SCRA 357 (2004)

Ahiddendefectisonewhichisunknownorcouldnot
havebeenknowntothebuyer.Underthelaw,therequisites
torecoveronaccountofhiddendefectsareasfollows:
a.
b.
c.
d.
e.

Defectmustbehidden;
Mustexistatthetimethesalewasmade;
Mustordinarilyhavebeenexcludedfromthecontract;
Defect, must be important (render the thing unfit or
considerablydecreasesfitness);
Actionmustbeinstitutedwithinstatuteoflimitations.

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),withdamagesineithercase.
76

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

CONDITIONSANDWARRANTIEScontd
5.REDHIBITORYDEFECTSOFANIMALS
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

IMPLIEDWARRANTIESINTHESALEOFGOODS

6.

a.WarrantyastoFitnessorQuality
b.SaleofGoodsbySample

7.

77

ADDITIONAL WARRANTIES

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

PRODUCTS

CONDITIONSANDWARRANTIEScontd
EFFECTSOFWARRANTIES

C.

EFFECTSOFWAIVERS

D.

G.BUYER'SOPTIONSINCASEOFBREACHOFWARRANTY

78

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

REDEMPTION IS A MODE OF
EXTINGUISHMENTUNIQUETOSALES:
CONVENTIONAL REDEMPTION: SALE
WITH RIGHT TO REPURCHASE

LEGALREDEMPTION
79

CONVENTIONAL REDEMPTION
(SALE WITH A RIGHT TO REPURCHASE)

NATUREOFRIGHTTOREPURCHASE:
ReservedbySelleratthepointof
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

CONVENTIONALREDEMPTIONcontd
ItsValidityisTiedtotheValidityoftheContract
ofSaletowhichappended.

Nool v. Court of Appeals, 276 SCRA 149 (1997)

WhenSaleCoveredbyDeed,Right a retro may

beprovedbyparolevidence.
Mactan Cebu Intl Airport Authority v. Court of Appeals,
263 SCRA 736 (1996)

81

RIGHTARETROversusOPTIONCONTRACT

(A) Not separate contract, but

must be part of main
ContractofSale
(B) Right to Redeem does
not
need
separate
consideration

(B) Option requires consider-ation

separate and distinct of the
Priceinordertobevalid

(C) Maximum Period for

(C)PeriodofOptionmaybe

exercise of Right of
redemption
cannot
exceed10years
(D) Rightofrepurchaserequires
in addition the tender of the
amountmandated,including
consignation when tender
notpossible
82

(A) Generally principal contract,

but may be appended in
anothercontractvalid

beyond10years

(D) Option may be exercised

bymerenoticetoOfferor

SALIENTMATTERSON
RIGHTOFREDEMPTION
PERIODOFREDEMPTION:

(a)

WhennoPeriodagreedupon:4years
When Period agreed upon: cannot

exceed10years
When

Period of Non-Redemption
Stipulated
Anchuel v. IAC, 147 SCRA 434 (1987)
Tayao v. Dulay, 13 SCRA 758 (1965)

83

SALIENTMATTERSONRIGHTOF
REDEMPTIONcontd
PendencyofActionTollsRedemption

Period
Ong Chua v. Carr, 53 Phil. 975 (1929)

Non-PaymentofPriceDoesNotAffect

RunningofRedemptionPeriod
Catangcatang v. Legayada, 84 SCRA 51 (1978)

84

SALIENTMATTERScontd
HOWREDEMPTIONEFFECTED:

(b)

Onlytenderofpaymentissufficient.
Legaspi v. CA, 142 SCRA 82 (1986)

Consignationisnotrequiredaftertenderis
refused.
Mariano v. CA, 222 SCRA 736 (1993)

Butwhentendernotpossible,consignation
shouldbemade.
Catangcatang v. Legayada, 84 SCRA 51 (1978)

85

SALIENTMATTERScontd
SimplybyFilingJudicialAction
Lee Chuy Realty Corp. v. CA, 250 SCRA 596 (1995)

SellerreturningtoBuyer:

Priceofthesale

Expensesofcontract,andanyother
legitimatepaymentsmadebyreasonofthe
sale

Necessaryandusefulexpensesmadeon
thethingsold
ART. 1616

86

SALIENTMATTERScontd
When Redemption Not Made, Buyer a retro
automaticallyacquiresfullownership.
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
thesellerhasbeendulyheard.
Article 1607

IfSellerprovesthetransactionasalearetro,he
is given a period of 30 days from finality of
judgmenttorepurchase.
Solid Homes v. CA, 275 SCRA 267 (1997).
87

EQUITABLE MORTGAGE
DEFINITIONANDELEMENTS

The contract entered into is

denominatedasaSale(absoluteora
retro);and

(b) Real intention was to secure an

existingdebtbywaymortgage
Molina v. CA, 398 SCRA 97 (2003)

88

EQUITABLEMORTGAGEcontd
RATIONALEOFEQUITABLEMORTGAGE
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

RULINGSONEQUITABLEMORTGAGE
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

RULINGSONEM
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 inviolationofArt.
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

REMEDIESUNDEREQUITABLEMORTGAGE
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

REMEDIESINEMcontd
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
DEFINITIONANDRATIONALE:
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

LEGALREDEMPTIONcontd
PERIODOFLEGALREDEMPTIONBEGINS:

30DAYSFROMWRITTENNOTICE
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

LEGALREDEMPTIONcontd
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

LEGALREDEMPTIONcontd
Deemed
Deed of
disposition
common.

complied when co-owners signed

Extrajudicial Partition embodying
of part of the property owned in
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

INSTANCESOFLEGALREDEMPTION
(a)AmongCo-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.

99

Verdad v. CA, 256 SCRA 593 (1996)

INSTANCESOFLEGALREDEMPTIONcontd
(b)AmongCo-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

INSTANCESOFLEGALREDEMPTIONcontd
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

INSTANCESOFLEGALREDEMPTIONcontd
(c)AmongAdjoiningOwners(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

INSTANCESOFLEGALREDEMPTIONcontd
(d)SaleofCreditinLitigation(Art. 1634)-30days

(e)RedemptionofHomesteads(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

INSTANCESOFLEGALREDEMPTIONcontd
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

INSTANCESOFLEGALREDEMPTIONcontd
(f)RedemptioninTaxSales(Sec. 215, NIRC of 1997)
(g)Redemptionbyjudgmentdebtor(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

INSTANCESOFLEGALREDEMPTIONcontd
(h)RedemptioninExtrajudicialForeclosure
One(1)yearfromregistrationintheRegistry
ofDeedsonMortgage(Sec.6,Act3135).

(i) Redemption in judicial foreclosure of

mortgage
(Sec.47,GeneralBankingLawof2000,R.A.8791).
A stipulation
defeasible by an
creditor

to render the right

option to buy on the

to redeem
part of the

Soriano v. Bautista, 6 SCRA 946 (1962)

106

INSTANCESOFLEGALREDEMPTIONcontd
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

INSTANCESOFLEGALREDEMPTIONcontd
(j)RedemptioninForeclosurebyRuralBanks

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

INSTANCESOFLEGALREDEMPTIONcontd
(k)LegalRighttoRedeemunder

AgrarianReformCode
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