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 SUBJECT
RealObligations
MATTER
(2)TODELIVER
SALE CONSENT POSSESION

MeetingofMinds
RealObligation

BUYER (3)TOPAY
PRICE
2
 ESSENTIALCHARACTERISTICSOFSALE:
NOMINATE vs. Innominate

PRINCIPAL vs. Accessory vs. Prefaratory

CONSENSUAL vs. Solemn vs. Real

BILATERAL/ vs. Unilateral

RECIPROCAL
ONEROUS vs. Gratuitious

COMMUTATIVE vs. Aleatory

TITLE vs. Mode

3
 SALESversusDONATION
CONSENSUAL SOLEMN
(i.e.,4thRequisiteof
Formforvalidity)

ONEROUS/ GRATUITOUS
COMMUTATIVE (i.e.,PureLiberality
asconsideration)

ESSENCE: BOTHINVOLVETHETRANSFEROF
OWNERSHIP/POSSESSIONOF
SUBJECTMATTER

4
 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 OF PRE-
EXISTINGOBLIGATION(CONTRACTS)
(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: THERE CAN BE NO CONTRACT FOR PIECE-OF-WORK FOR

PAST SERVICE RESULTINGINTHE CREATIONOFTHE OBJECT
(ALWAYSASALE)
7
 SALESvs.AGENCYTOSELL/BUY

REPRESENTATIVE
AGENCY Essentiallyrevocable
FIDUCIARY Fruitsandofprincipal

NOTPERSONNALYLIABLEFORTHE
OBLIGATIONCREATEDBYTHESALE
CONTRACT
AGENT NOTOBLIGEDTOPAYTHEPRICE

DOESNOTASSUMETHERISKSOF
OWNERSHIPTOTHEOBJECTOFSALE
8
 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

9
 SALEversusLEASE:

LEASE ESSENTIALLY INVOLVES THE

TEMPORARY ENJOYMENT OF POSSESSION OF
THESUBJECTMATTER

FEWINSTANCES: TREATED AS SALE ON

INSTALLMENTS WHEN LEASE
STRUCTUREDINSUCHAWAYAS
TO AVOID APPLICATION OF THE
RECTOLAW

10
 PARTIES TO A SALE
(The Essential Element of CONSENT)
GENERALRULE: All Parties Having Capacity to Contract
Can Be Valid Parties To a Sale
EXCEPTIONS:
(a)Minors,Demented,Deaf-MutesSaleisVoidable
-PurchaseofNecessaries
-Emancipation
(b)Spouses(Art. 1490)
-SalestoThirdPartiesSalebyOneSpouseVoid
-SalestoEachOtherVoid
Except: When marriage governed by Complete
SeparationofPropertyRegime
ByPre-nuptials
ByJudicialdecree
11
OTHERRELATIVEDISQUALIFICATIONS(Art. 1491)
Guardian Wards
Agent Principal
Except: Whengrantedexpresspower
tobuyprincipalsproperty
Administrator/
Executor Estateunderadministration
BUTNOT:PurchaseofInheritanceRights

Government property under

PublicOfficers
theirjurisdiction
Judges/Justices/ Propertyfallingintheirjurisdiction
CourtOfficers
Lawyers Clientspropertyinlitigation
Except: Contingencyfeearrangement
12
 SUBJECT MATTER
(OBLIGATION to Transfer Ownership and Deliver Possession)

1.POSSIBLETHING vs. Impossiblethings

2. LICIT vs. Illicit

3. DETERMINATE Non-Determinable
vs.
DETERMINABLE GENERICS

RATIONALE: Transfer of Ownership/Possession of the

SubjectMatteristheESSENCEofSALE
Obligationshouldthereforenotbeillusory
To comply with the Obligatory Force
principleinContractLaw
13
 PRICE & OTHER CONSIDERATION
(The Obligation to Pay)

1.REAL/TRUE vs. FALSE vs. SIMULATED

(Reformation) (Void)

2.Money or its Equivalentvs.PUREvs. NOMINAL

VALUABLECONSIDERATIONLIBERALITYCONSIDERATION

CERTAIN
3. vs. UNASCERTAINABLE
ASCERTAINABLE
4.MANNEROFPAYMENT vs. UNASCERTAINABLE

RATIONALE: Must comply with Obligatory Force principle in

ContractLaw
Must meet Onerous and Commutative
characteristicsofSALE
14
 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
OnlyacertainOfferwhenmetbyanAbsoluteAcceptance
willgiverisetoavalidSALE.
17
 CERTAINOFFER
(a) CONTAINSACLEARPROMISETOSELL/TOBUY

(b) COVERSASUBJECTMATTERTHATIS:
Possible thing
Licit
Determinate or Determinable

(c)COVERSAPRICEORCONSIDERATION
Real
Valuable
Certain or Ascertainable
With Manner of Payment/Performance
agreed upon

18
 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 - Valuable
- Determinate/ - Certain/
Determinable Ascertainable

CONSIDERATION: Anything separate and distinct from

Price
20
 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: OFFEROR BOUNDS HIMSELF TO FIRST

OFFER SUBJECT MATTER TO OFFEREE
FORSALE

CONDITION: 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)

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

25
 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
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

VALIDITYORINVALIDITYOFACONTRACTOFSALE
Birth sets the essence of the Sale

ESTABLISHESTHECONTRACTUALPRINCIPLESOF:
CONSENSUALITY
MUTUALITY OR OBLIGATORY FORCE
RELATIVITY
29
 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

Must be in writing signed by the party

sought to be bound
30
FORMOFSALEcontd
MemomustcontainDescriptionof:
Possiblething
(a)SUBJECTMATTER Licit
Determinate/
Determinable
real
(b)PRICE
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 Price
TouchUpon
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 TO BE ENFORCEABLE
BETWEENPARTIES
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
SPECIFICPERFORMANCE CONVENTIONAL
(1)PERFORMANCE REDEMPTION
DELIVERYOF
RESCISSION (SALEARETRO)
SUBJECTMATTER DOUBLESALESRULE EQUITABLE
SUBDIVISIONLOTS& MORTGAGES
PAYMENTOFPRICE LEGAL
CONDOUNITSRULES REDEMPTION
RECTOLAW
MACEDALAW (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

Fulfillment of the Primary

MAGICOF ObligationoftheSeller
TRADITION
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 Transfer/Negotiation of the Title
INTANGIBLES EvidencestheIntangible
EnjoymentofRightsandPrivilegeswith
theconsentoftheSeller

DELIVERYTHROUGHCARRIER
-FAS
-FOB
-CIF

DOCUMENTSTOTITLE
39
RULESONDOUBLESALESUNDERART.1544
FORMOVABLES:
1.
FirsttoPossess,ingoodfaith
OldestTitle,ingoodfaith
Then:First in time, priority in rights

2. FORIMMOVABLES:
FirsttoRegister,ingoodfaith
FirsttoPossess,ingoodfaith
OldestTitle,ingoodfaith
Then:First in time, priority in rights

40
 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

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.

47
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

First in time, priority in rights applieslast

48
 SALEANDDELIVERYBYNON-OWNER

GENERALRULE: Nemo Dat Quod Non Habet

SPECIALRULES:
SaleandDelivery,withsubsequent
acquisitionoftitlebyowner(Art.1434),ipso
juretransferstitletoBuyer
SalebyCo-Owner
-particularportion
-wholeproperty

5. EstoppelonthePartoftheTrueOwner(Art.1426)

49
SALEANDDELIVERYBYNON-OWNERcontd

Chain of Title TheoryundertheTorrens

System

SalesbyCourtAuthority

SalesinMerchantStores

SalesbyOneHavingVoidableTitlePrior
toAnnulment

SaleunderDocumentsofTitle
50
 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, before actual
cancellationofcontract
(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 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)

74
 CONDITIONSANDWARRANTIEScontd
WARRANTYAGAINSTNON-APPARENT
3.
SERVITUDES

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. Defectmustbehidden;
b. Mustexistatthetimethesalewasmade;
c. Mustordinarilyhavebeenexcludedfromthecontract;
d. Defect, must be important (render the thing unfit or
considerablydecreasesfitness);
e. 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. ADDITIONAL WARRANTIES FOR CONSUMER PRODUCTS

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

77
 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 found in a separate

instrument
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 (A) Generally principal contract,
must be part of main but may be appended in
ContractofSale anothercontractvalid

(B) Right to Redeem does (B) Option requires consider-ation

not need separate separate and distinct of the
consideration Priceinordertobevalid

(C) Maximum Period for (C)PeriodofOptionmaybe

exercise of Right of beyond10years
redemption cannot
exceed10years

(D) Rightofrepurchaserequires (D) Option may be exercised

in addition the tender of the bymerenoticetoOfferor
amountmandated,including
consignation when tender
notpossible
82
 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 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, Inc. v. CA, 275 SCRA 267 (1997)

91
 RULINGSONEM 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 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) Honestbelief 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 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
 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.

Verdad v. CA, 256 SCRA 593 (1996)
99
 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 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
 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