ATENEO DE MANILA LAW SCHOOL

Rockwell Center, Makati City

LAW on SALES
REVIEW
By:
 

CESAR L. VILLANUEVA, B.S.C., C.P.A., LL.B., LL.M., FAICD, D.J.S.
 GENERAL PRINCIPLES
DEFINITION   (Art. 1458)
PARTIES OBLIGATIONS
(1) TO TRANSFER   
OWNERSHIP

SELLER  SUBJECT  
Real Obligations
   MATTER
(2) TO DELIVER       
SALE CONSENT POSSESION

“Meeting of Minds”
Real Obligation

BUYER (3) TO PAY
PRICE
2
 ESSENTIAL CHARACTERISTICS OF SALE:
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
 SALES    versus    DONATION
CONSENSUAL SOLEMN
(i.e., 4th Requisite of 
“Form” for validity)

ONEROUS/ GRATUITOUS
COMMUTATIVE (i.e., “Pure Liberality” 
as consideration)

ESSENCE:  BOTH INVOLVE THE TRANSFER OF 
OWNERSHIP/POSSESSION OF 
SUBJECT MATTER

4
 SALES   versus   BARTER:
BARTER  IS  SALE,    BUT  WITH  THE  PRICE  BEING  REPLACED 
WITH  AN  OBLIGATION  TO  TRANSFER 
OWNERSHIP/POSSESSION  OF  ANOTHER 
SUBJECT MATTER

THEREFORE:  BARTER GOVERNED BY LAW ON SALES 

BUT:  NOT COVERED BY STATUTE OF FRAUDS

5
SALES   versus   DACION EN PAGO:
 DACION  IS  PROCESS  OF  EXTINGUISHMENT  OF  PRE-
EXISTING OBLIGATION  (CONTRACTS)
(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
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  RESULTING IN THE  CREATION OF THE  OBJECT 
(ALWAYS A SALE)
7
 SALES   vs.   AGENCY TO SELL/BUY

REPRESENTATIVE
AGENCY  Essentially revocable
FIDUCIARY  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
8
 SALES vs. AGENCY TO SELL/BUY    Cont’d
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

9
 SALE   versus    LEASE:

LEASE  ESSENTIALLY  INVOLVES  THE 

TEMPORARY  ENJOYMENT  OF  POSSESSION  OF 
THE SUBJECT MATTER

FEW INSTANCES: TREATED  AS  SALE ON

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

10
 PARTIES TO A SALE
(The Essential Element of CONSENT)
GENERAL RULE: All Parties Having Capacity to Contract
Can Be Valid Parties To a Sale
EXCEPTIONS:
(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
11
OTHER RELATIVE DISQUALIFICATIONS  (Art. 1491)
Guardian Wards 
Agent Principal
Except: When granted express power 
to buy principal’s property
Administrator/
Executor Estate  under administration
BUT NOT: Purchase of Inheritance Rights

Government  property  under 

Public Officers
their jurisdiction
Judges/Justices/ Property falling in their jurisdiction
Court Officers
Lawyers Client’s property in litigation
Except: Contingency fee arrangement
12
 SUBJECT MATTER
(OBLIGATION to Transfer Ownership and Deliver Possession)

1. POSSIBLE THING vs. Impossible things

2.  LICIT vs. Illicit

3.   DETERMINATE Non-Determinable 

vs.
 DETERMINABLE GENERICS

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.  REAL/TRUE vs.     FALSE vs. SIMULATED

(Reformation) (Void)

2. “Money or its Equivalent”    vs.      PURE      vs. NOMINAL

    VALUABLE CONSIDERATION              LIBERALITY        CONSIDERATION

CERTAIN
3.         vs. UNASCERTAINABLE
ASCERTAINABLE
4.   MANNER OF PAYMENT vs. UNASCERTAINABLE

RATIONALE:   Must  comply  with  “Obligatory  Force”  principle  in 

Contract Law
 Must  meet  Onerous  and  Commutative
characteristics of SALE
14
 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:
• 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
• When  floated  unconditionally,  will  be  extinguished 
through the passage of reasonable time
• 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   
 Only a “certain”  Offer when met by an “Absolute” Acceptance 
will give rise to a valid SALE.
17
 “CERTAIN” OFFER
(a)  CONTAINS A CLEAR PROMISE TO SELL/TO BUY

(b)  COVERS A SUBJECT  MATTER  THAT IS:
 Possible thing
 Licit
 Determinate or Determinable

(c)  COVERS A PRICE OR CONSIDERATION
 Real 
 Valuable
 Certain or Ascertainable
 With Manner of Payment/Performance
agreed upon

18
 “ABSOLUTE” ACCEPTANCE

(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

19
 OPTION CONTRACT:
ACCEPTANCE of OFFER to give on Option to Buy/to Sell

SUBJECT MATTER:  Option or Privilege to Sell/ Purchase:

AN OBJECT:         AT A PRICE:
- 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, 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)

• 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 cont’d

(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: OFFEROR  BOUNDS  HIMSELF  TO  FIRST 

OFFER  SUBJECT  MATTER  TO  OFFEREE 
FOR SALE

CONDITION: 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 cont’d
Equatorial Realty Dev., Inc. v. Mayfair Theater
264 SCRA 483 (1996)

• 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  Buyer’s  purchase  may  be 

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

25
 DOCTRINES ON RFR cont’d
Parañaque 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: Obligations “to do”           To enter into a   
Contract of Sale
(1)  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 TO SELL
                                      (CONTRACTS TO SELL)

27
 MUTUAL PROMISES TO BUY AND SELL
(CONTRACTS TO SELL)

• 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
 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 

VALIDITY OR INVALIDITY OF A CONTRACT OF SALE
 “Birth” sets the essence of the Sale

• ESTABLISHES THE CONTRACTUAL  PRINCIPLES OF:
 CONSENSUALITY
 MUTUALITY OR OBLIGATORY FORCE 
 RELATIVITY
29
 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

  Must be in writing signed by the “party

sought to be bound”
30
FORM OF SALE  cont’d
 Memo must contain Description of:
 Possible thing
(a) SUBJECT MATTER  Licit
Determinate/
Determinable
real
(b) PRICE
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  cont’d
 What Constitutes “Partial Execution”? 

Subject Matter

(a)  Performance Must  Price
Touch Upon 
Cannot Cover “Other 
Consideration”

 (b)  Must Involve/Compromise “Party Sought to 
be Charged”  

32
FORMS THAT VOID CONTRACT OF SALE:
SALE OF REALTY THROUGH AGENT:
1. 

 AGENT’S 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
• PRIVATE  DOCUMENT  NEEDED  TO  BE  ENFORCEABLE 
BETWEEN PARTIES
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  TO  BE  VALID 
AND BINDING AGAINST THE WORD

- Authority of Agent must be in writing – VOID

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

(5) EXTINGUISHMENT
(3) REMEDIES
 SPECIFIC PERFORMANCE  CONVENTIONAL  
(1) PERFORMANCE REDEMPTION 
 DELIVERY OF 
 RESCISSION (SALE A RETRO)
SUBJECT MATTER  DOUBLE SALES RULE  EQUITABLE    
 SUBDIVISION LOTS &   MORTGAGES
 PAYMENT OF PRICE  LEGAL 
    CONDO UNITS RULES REDEMPTION
 RECTO LAW
 MACEDA LAW (4) CONDITIONS AND 
WARRANTIES
(2) RISK OF LOSS  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. TO ACCEPT DELIVERY OF SUBJECT MATTER
36
 DELIVERY OF SUBJECT MATTER
TRADITION AS THE MODE 
TO TRANSFER OWNERSHIP

-  Actual or Physical Delivery
-  Constructive Delivery

Fulfillment  of  the  Primary 

MAGIC OF  Obligation of the Seller
TRADITION
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  Transfer/Negotiation  of  the  “Title” 
INTANGIBLES Evidences the Intangible
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
FOR MOVABLES:
1. 
 First to Possess, in good faith
 Oldest Title, in good faith
 Then: “First in time, priority in rights”

2.  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”

40
 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    cont’d
(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

Tañedo v. CA, 252 SCRA 80 (1996)

44
 DOCTRINES ON ART. 1544    cont’d

(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    cont’d

(h)    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

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.

47
GLOBAL RULES ON DOUBLE SALE   cont’d
• 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

• “First in time, priority in rights” applies last

48
 SALE AND DELIVERY BY NON-OWNER

GENERAL RULE:  Nemo Dat Quod Non Habet

SPECIAL RULES:
• Sale and Delivery, with subsequent 
acquisition of title by owner (Art. 1434), ipso
jure transfers title to Buyer
• Sale by Co-Owner
                -  particular portion
                    -  whole property

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

49
SALE AND DELIVERY BY NON-OWNER   cont’d

• “Chain of Title Theory” under the Torrens 

System

• Sales by Court Authority

• Sales in Merchant Stores

• Sales by One Having Voidable Title Prior 
to Annulment

• Sale under Documents of Title
50
 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: 

BEFORE PERFECTION:     Res Perit Domino

1. 
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:   cont’d 
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:   cont’d
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”  Levy v. Gervacio, 69 Phil. 52 (1939)

(b) Contracts to Sell Movables Not Covered 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: cont’d

(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: cont’d

NATURE OF REMEDY OF RESCISSION 
(e) 

• 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: cont’d

(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: cont’d

(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: cont’d

PURPORTED LEASE WITH OPTION TO BUY:
(g) 
          “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:  People’s Ind’l and Comm. Corp. v. CA, 281 SCRA 206 (1997)

62
 MACEDA LAW  cont’d

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  cont’d
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  cont’d
OTHER RIGHTS GRANTED TO BUYER  
(a) To sell/assign his rights to another person

(b)  To  reinstate  contract  by  updating  account   

during  grace  period,  before  actual 
cancellation of contract 
(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

(a) ANTICIPATORY BREACH (ART. 1591)

(b) RESCISSION ON SALE ON NON-
RESIDENTIAL REALTY ON 
INSTALLMENTS (Arts. 1191 and 1592)

(c) SEC. 23 AND 24, PRES. DECREE 957

66
 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   cont’d

 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   cont’d
1.  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   cont’d
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   cont’d
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 seller’s 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   cont’d
EXPRESS WARRANTIES  (Art. 1546)
A.  

(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  relying  on  such 
affirmation or promise thereon.

The law allows considerable latitude to seller’s

statements, or dealer’s 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   cont’d

IMPLIED WARRANTIES    (Art. 1547)
B.  

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 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
 CONDITIONS AND WARRANTIES   cont’d
WARRANTY AGAINST NON-APPARENT 
3. 
SERVITUDES    

WARRANTY AGAINST HIDDEN DEFECTS
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
 CONDITIONS AND WARRANTIES   cont’d
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. Defect must be hidden;
b. Must exist at the time the sale was made; 
c. Must ordinarily have been excluded from the contract; 
d. Defect,  must  be  important  (render  the  thing  unfit  or 
considerably decreases fitness);
e. 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   cont’d

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

IMPLIED WARRANTIES IN THE SALE OF GOODS
6. 

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

7.  ADDITIONAL  WARRANTIES  FOR  CONSUMER  PRODUCTS

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

77
 CONDITIONS AND WARRANTIES   cont’d

EFFECTS OF  WARRANTIES
C.  

EFFECTS OF  WAIVERS
D.  

G. BUYER'S OPTIONS IN CASE OF BREACH OF WARRANTY 

78
 EXTINGUISHMENT OF SALE
SALE EXTINGUISHED BY SAME MODES
APPLICABLE TO ALL CONTRACTS
Arts. 1231, 1600

          “REDEMPTION”  IS  A  MODE  OF 

EXTINGUISHMENT UNIQUE TO SALES:

 CONVENTIONAL  REDEMPTION:  SALE

WITH RIGHT TO REPURCHASE
 LEGAL REDEMPTION

79
 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  found  in  a  separate 

instrument 
Torres v. CA, 216 SCRA 287 (1992)
Claravall v. CA, 190 SCRA 439 (1990)

80
 CONVENTIONAL REDEMPTION  cont’d

 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 Int’l Airport Authority v. Court of Appeals,
263 SCRA 736 (1996)

81
 RIGHT A RETRO versus OPTION CONTRACT
 
(A) Not  separate  contract,  but  (A)  Generally  principal  contract, 
must  be  part  of  main  but  may  be  appended  in 
Contract of Sale  another contract valid

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

not  need  separate  separate  and  distinct  of  the 
consideration Price in order to be valid

(C)  Maximum  Period  for  (C) Period of Option may be 

exercise  of  Right  of  beyond 10 years
redemption  cannot 
exceed 10 years

(D)  Right of repurchase requires  (D)  Option  may  be  exercised 

in  addition  the  tender  of  the  by mere notice to Offeror
amount mandated, including 
consignation  when  tender 
not possible
82
 SALIENT MATTERS ON 
RIGHT OF REDEMPTION

PERIOD OF REDEMPTION:
(a) 

 When no Period agreed upon: 4 years
 When  Period  agreed  upon:  cannot 
exceed 10 years
 When  Period  of  “Non-Redemption” 
Stipulated
Anchuel v. IAC, 147 SCRA 434 (1987)
Tayao v. Dulay, 13 SCRA 758 (1965)

83
 SALIENT MATTERS ON RIGHT OF 
REDEMPTION    cont’d

 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  cont’d

HOW REDEMPTION EFFECTED: 
(b) 

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 (1978)

85
 SALIENT MATTERS    cont’d

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    cont’d
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

• 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  cont’d

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 Miseña 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 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
 RULINGS ON EM cont’d

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  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   cont’d
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
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 cont’d
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  cont’d

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 cont’d

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  cont’d
(b) 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  cont’d

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  cont’d
(c) 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  cont’d
(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  cont’d

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  cont’d
(f) 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  cont’d
(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  cont’d
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  cont’d
(j) 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  cont’d
(k) 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
Quiño 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