May Encarnina P.

Gaoiran Lease with Option to Purchase Barring Effect on Such Contracts Issue: Whether the taking back of possession or enjoyment of the property leased as treated by Article 1485 carries the concept of recession or foreclosure. if recession- even after the taking back possession or enjoyment, and forfeiting all rentals previously paid, the lessor-seller will be able to collect damages if foreclosure- the seller-lessor can no longer collect further amounts against the buyer-lessee writ of replevin- merely to ensure enforcement of the remedy of specific performance under Article 1484(1); it does not produce barring effect Note: When purported lessor takes possession of subject movable, it is treated legally as foreclosure and the barring effects applicable to foreclosure remedy, not recission, are given application. In Case of Immovables A. Remedies of Seller 1. Anticipatory Breach Art. 1591 applies if the seller has reasonable grounds to fear the loss of the immovable property sold and its price Art. 1191 applies if the ground is substantial breach by buyer for failure to comply with his obligation to pay the price when due 2. Failure of Buyer to Pay Price Remedy- recission via judicial (eg. filing of a cross-claim) or notarial demand (Art. 1592, CC)  does not apply to contracts to sell (J.M Tuason & Co., Inc v. Javier) B. Remedies of Buyer 1. Suspension of Payment- right granted to the buyer Grounds: a) disturbance in the buyer¶s possession or ownership of the thing acquired b) reasonable grounds to fear such disturbance c) pending suit over the subject matter Remedies: a) vindicatory action b) foreclosure of mortgage Exceptions: a) cessation of the cause of disturbance or danger b) security for the return of the price c) stipulation  mere act of trespass shall not authorize suspension of the payment of price In Case of Subdivision or Condominium Projects Secs. 23 and 24, P.D 957: No installment payments made by the buyer in a subdivision or condominium project for the lot or unit he contracts to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. o Relucio v. Brillante-Garfin: buyer¶s option- 1) to demand reimbursement of the total amount paid, 2) to wait further dev¶t of the subdivision or condominium project (Effecthe may not be ousted from the subdivision

o Gold Loop Properties, Inc. v. CA: buyer of a condominium unit is justified in suspending payment of his monthly amortizations where the seller fails to give a copy of the Contract of Sale despite repeated demands therefore. a) Notice Required under Sec. 23 of P.D 957 -it is not indispensable b) Retroactive Application of P.D 957 o Eugenio v. Executive Sec. Drilon: The failure to develop a subdivision constitutes legal justification for the non-payment of amortization by the buyer on installment under the land purchase agreements entered into prior to its enactment. 2. Right to Grace Period Stipulated -it is effective w/o further need of demand either calling for the payment of the obligation or for honoring the right.

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