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“The three remedies under Article 1484 which

RECTO AND MACEDA are available to the vendor who has sold
personal property on the installment plan, are
LAW CASES alternative, not cumulative. In other words, if
the vendor has elected to avail himself of any of
the remedies, he is deemed to have renounced
the others. In case the vendor elects to
foreclose the mortgage, if one has been given
Prepared and presented by: on the property, he is not obliged to return to
Del Mundo, Jared Ibrahim T. the purchaser the amount of the installment
already paid. The mere fact that appellee has
Gomez, Jan Kevin S. secured possession of the truck in question
does not necessarily mean that it will foreclose
Tenerife, John Franklin R.
its mortgage. Indeed, there is no showing at all
that appellee is causing the sale thereof at
public auction or in even preparing to do so. It is
quite possible that appellee wanted merely to
be sure that the truck is not lost or rendered
RECTO LAW (Act No. 4122)
valueless.
covers sales of personal property by instalment.
At any rate it is the actual sale of the
MACEDA LAW (R.A. No. 6552) mortgaged chattel in accordance with section
14 Act No. 1508 that would bar the creditor
governs installment sales of real property. (who chooses to foreclose) from recovering any
unpaid balance. (Pacific Com. Co. vs. De la
Rama, 72 Phil. 380; Manila Motor Co. vs.
RECTO LAW (Act No. 4122) Fernandez, 99 Phil. 782.)”

Comprises of Art. 1484 to 1486 of the New Civil


Code. It was added to the Civil Code to prevent
RECTO LAW (Act No. 4122) Case 2
abuses in the foreclosure of chattel mortgages,
such as when mortgagee-creditors foreclosed Levy Hermanos Inc., vs Lazaro Blas
mortgaged property, bought them at a low Gervasio G.R. No. 46306 October 27, 1939
price (on purpose,) then prosecuted the
mortgagor-debtors to recover deficiencies. “In order to apply the provisions of article
1454-A of the Civil Code it must appear that
there was a contract for the sale of personal
property payable in installments and that there
RECTO LAW (Act No. 4122) Case 1
has been a failure to pay two or more
Universal Motors Corp. vs. Dy Hian Tat, G.R. installments. The contract, in the instant case,
No. L-23788 (1969): while a sale of personal property, is not,
however, one on installments, but on straight
term, in which the balance, after payment of the latter has the right to continue occupying
the initial sum, should be paid in its totality at the subject property.”
the time specified in the promissory note. The
transaction is not, therefore, the one MACEDA LAW (RA 6552) Case 2
contemplated in Act No. 4122 and accordingly Fabrigas v San Francisco del Monte, 476 scra
the mortgagee is not bound by the prohibition 247 (2005):
therein contained as to the right to the recovery
of the unpaid balance. “Cancellation of the contract under Section 4
(of the RA No. 6225) is a two-step process. First,
the seller should extend the buyer a grace
period of at least sixty (60) days from the due
MACEDA LAW (RA 6552)
date of the installment. Second, at the end of
It applies to the purchaser of real property by the grace period, the seller shall furnish the
installment payments when the purchase buyer with a notice of cancellation or demand
becomes cancelled by a delinquency in for rescission through a notarial act, effective
payment. It provides the buyer with a right to a thirty (30) days from the buyers receipt thereof.
refund as a requisite for cancellation of contract It is worth mentioning, of course, that a mere
due to delinquency when the buyer has paid at notice or letter, short of a notarial act, would
least two years. not suffice. While the Court concedes that Del
Monte had allowed petitioners a grace period
longer than the minimum sixty (60)-day
MACEDA LAW (RA 6552) Case 1 requirement under Section 4, it did not comply,
however, with the requirement of notice of
Communities Cagayan Inc., petitioner vs Sps. cancellation or a demand for rescission. Instead,
Arsenio and Angeles Nanol and anybody Del Monte applied the automatic rescission
claiming rights under them. G.R. No. 176791 clause of the contract. Contrary, however, to
Del Montes position which the appellate court
“Under the Maceda Law, before a contract to
sustained, the automatic cancellation clause is
sell involving a property can be validly and
void under Section 7 in relation to Section 4 of
effectively cancelled, the seller has (1) to send a
R.A. 6552.”
notarized notice of cancellation to the buyer
AND (2) to refund the cash surrender value.
Thus, the buyer has the right to continue
occupying the property subject of the contract
to sell, and may still reinstate the contract by
updating the account during the grace period
and before the actual cancellation of the
contract. Hence, where a party complied only
with the 1st condition but failed to refund the
cash surrender value to the adverse party, the
Contract to Sell remains valid and subsisting and