CHAPTER 7:

EXTINGUISHM
ENT OF SALE
LAW ON SALES

A BRIEF SUMMARY
(Articles 1600-1623)

SUBMITTED BY:

Lemuel Angelo M. Eleccion

Bachelor of Laws - 2

SUBMITTED BY:

Atty. Jose Antonio C. Sedigo

Professor, Law on Sales

Chapter 7
EXTINGUISHMENT OF SALE
ART. 1600. Sales are extinguished by the
same causes as all other obligations, by those
stated in the preceding articles of this Title, and by
conventional or legal redemption. (1506)
Causes for extinguishment of sale.
The modes or causes of extinguishing the contract of
sale may be classified into:
(1) Common or those causes which are also the
means of extinguishing all other contracts like
payment, loss of the thing, condonation, etc. (see Art.
1231.);
(2) Special or those causes which are recognized by
the law on sales (such as those covered by Articles
1484, 1532, 1539, 1540, 1542, 1556, 1560, 1567, and
1591.); and
(3) Extra-special or those causes which are given
special discussion by the Civil Code and these are
conventional redemption and legal redemption. (see
10 Manresa 300, 303.)
SECTION 1. — Conventional Redemption
ART. 1601. Conventional redemption
shall take place when the vendor reserves the right
to repurchase the thing sold, with the obligation to
comply with the provisions of article 1616 and
other stipulations which may have been agreed
upon. (1507)
Conventional redemption defined.
- is the right which the vendor reserves to himself,
to reacquire the property sold provided he returns
to the vendee the price of the sale, the expenses
of the contract, any other legitimate payments
made therefor and the necessary and useful
expenses made on the thing sold (Art. 1616.),
and fulfills other stipulations which may have
been agreed upon.
NOTE: Both real and personal property may be the
subject matter of pacto de retro sales or sales with
right to repurchase although there are certain articles
(Arts. 1607, 1611, 1612, 1613, 1614, 1617, 1618.)
which are applicable only to immovables.
Nature of conventional redemption
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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1. It is purely contractual because it is a right
created, not by mandate of the law, but by virtue
of an express contract.
2. It is an accidental stipulation and, therefore, its
nullity cannot affect the sale itself since the latter
might be entered into without said stipulation.
3. It is a real right when registered, because it binds
third persons.
4. It is potestative because it depends upon the will
of the vendor.
5. It is a resolutory condition because when
exercised, the right of ownership acquired by the
vendee is extinguished.
6. It is not an obligation but a power or privilege
that the vendor has reserved for himself.
7. It is reserved at the moment of the perfection of
the contract for if the right to repurchase is
agreed upon afterwards, there is only a promise
to sell which produces different rights and effects
and is governed by Article 1479.
8. The person entitled to exercise the right of
redemption necessarily is the owner of the
property sold and not any third party.
9. It gives rise to reciprocal obligation that of
returning the price of sale and other expenses, on
the part of the vendor (Art. 1616.); and that of
delivering the property and executing a deed of
sale therefor, on the part of the vendee.
ART. 1602. The contract shall be presumed to
be an equitable mortgage, in any of the following
cases:
(1) When the price of a sale with right to
repurchase is unusually inadequate;
(2) When the vendor remains in possession as
lessee or otherwise;
(3) When upon or after the expiration of the right
to repurchase another instrument extending
the period of redemption or granting a new
period is executed;
(4) When the purchaser retains for himself a part
of the purchase price;
(5) When the vendor binds himself to pay the
taxes on the thing sold;
(6) In any other case where it may be fairly
inferred that the real intention of the parties
is that the transaction shall secure the
payment of a debt or the performance of any
other obligation.
In any of the foregoing cases, any money,
fruits or other benefits to be received by the
vendee as rent or otherwise shall be considered as

interest which shall be subject to the usury laws.
(n)
Equitable mortgage defined.
- is one which lacks the proper formalities, form or
words, or other requisites prescribed by law for a
mortgage, but shows the intention of the parties
to make the property subject of the contract as
security for a debt and contains nothing
impossible or contrary to law.
“Pacto de retro” and mortgage, distinguished.
The following are the distinctions:
(1) In pacto de retro, ownership is transferred but
the ownership is subject to the condition that the
seller might recover the ownership within a
certain period of time, while in mortgage,
ownership is not transferred but the property is
merely subject to a charge or lien as security for
the compliance of a principal obligation, usually
a loan;
(2) If the seller does not repurchase the property
upon the very day named in the contract, he loses
all interest thereon, while the mortgagor does not
lose his interest in the property if he fails to pay
the debt at its maturity; and
(3) In the case of a pacto de retro, there is no
obligation resting upon the purchaser to
foreclose. Neither does the vendor have any right
to redeem the property after the maturity of the
debt. On the other hand, it is the duty of the
mortgagee to foreclose the mortgage if he wishes
to secure a perfect title thereto, and after the
maturity of the debt secured by the mortgage and
before foreclosure, the mortgagor has a right to
redeem.
When contract with right to repurchase
presumed an equitable mortgage.
Article 1602 enumerates six distinct and separate
circumstances the presence of any (not a
concurrence) of which is sufficient to give rise to the
presumption that a contract, regardless of its
nomenclature, is an equitable mortgage in
consonance with the rule that the law favors the last
transmission of property rights.
These cases are the following:
(1) Price of the sale is unusually inadequate.
(2) Vendor remains in possession.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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(3) Period of redemption is extended after
expiration
(4) Purchaser retains part of the price
(5) Vendor binds himself to pay taxes on the thing
sold
(6) The parties really intended an equitable
mortgage instead of a sale.
Intention to execute mortgage may be fairly
inferred.
Thus:
(1) Vendor in urgent need of money.
(2) Automatic appropriation by vendee of
property sold stipulated.
(3) Vendee given possession of certificate of
title.
(4) Escalation of purchase price every month
stipulated.
(5) Vendor borrowed from vendee money used
in buying property sold.
(6) Vendor of low intelligence and illiterate.
(7) Vendor continued to pay monthly interest;
property not transferred to vendee; etc.
(8) Vendor continued to be indebted.
(9) Vendor mortgaged property sold to a bank;
paid taxes thereon; etc.
ART. 1603. In case of doubt, a contract
purporting to be a sale with right to repurchase
shall be construed as an equitable mortgage. (n)
ART. 1604. The provisions of Article 1602
shall also apply to a contract purporting to be an
absolute sale. (n)
Presumption in case of doubt.
1. Doubt resolved in favor of equitable mortgage.
2. Presumption, an exception to general rule.
3. Parol evidence admissible.
4. Where contract appears to be a genuine sale.
Effect where contract held as an equitable
mortgage.
1. Formal requirements of mortgage deemed
complied with.
2. Contract subordinate to a subsequent registered
mortgage.
3. Title of property remains in supposed vendor.
4. Remedy of creditor is to foreclose.
5. Conveyance of land not to affect mortgagor’s
right of redemption.

ART. 1605. In the cases referred to in articles
1602 and 1604, the apparent vendor may ask for
the reformation of the instrument. (n)
When vendor may ask for reformation.
Reformation is that remedy granted by law
by means of which a written instrument is made or
construed so as to express or conform to the real
intention of the parties when such intention is not
expressed in the instrument.
In reformation, there has been a meeting of
the minds between the parties, but the written
instrument purporting to embody their agreement
does not express their true intention by reason, for
instance, of mistake or fraud. (Art. 1359.) Where
there has been no meeting of the minds, the remedy is
annulment. (Art. 1390.)
ART. 1606. The right referred to in
article 1601, in the absence of an express
agreement, shall last four years from the date of
the contract.
Should there be an agreement, the period
cannot exceed ten years.
However, the vendor may still exercise the
right to repurchase within thirty days from the
time final judgment was rendered in a civil action
on the basis that the contract was a true sale with
right to repurchase. (1508a)
 Period for exercise of right of redemption.
Article 1606 refers to conventional redemption.
It does not apply where the contract is not one of sale
with right of repurchase.
For conventional redemption to take place, the
vendor should reserve, in no uncertain terms, the
right to repurchase the thing sold.
1. No agreement granting right
2. Agreement merely grants right.
3. Definite period of redemption agreed upon.
4. Period agreed upon exceeds ten years.
5. Period of redemption not specified.
6. Final judgment that contract is pacto de retro.
When Article 1606, par. 3, not applicable.
1. Contract found to be an absolute sale.
2. Sale known and admitted by vendor as pacto de
retro.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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3. Party abandoned position that transaction an
equitable mortgage after judicial declaration of
transaction as a pacto de retro sale.
Effect of stipulation extending period
of repurchase.
(1) After expiration of period of redemption. — It is
legally impossible to speak of extension because that
which is extinguished cannot be extended and
because the ownership in the vendee is already
consolidated, and becomes absolute.
(2) Before the expiration of the period of redemption.
— The original term may be extended provided that
the extension, including
the original term, shall not extend beyond 10 years;
otherwise, the extension is void as to the excess.
Reason for limiting period of redemption.
“A long term for redemption renders the tenure of
property uncertain and redounds to its detriment, for
neither does the precarious holder cultivate the
ground with the same interest as the owner, nor does
he properly attend to the preservation of the building,
and owing to the fact that his enjoyment of the
property is temporary, he endeavors above all to
derive the greatest benefit therefrom, economizing to
that end even the most essential expenses.” (23
Scaevola 667.)
ART. 1607. In case of real property, the
consolidation of ownership in the vendee by virtue
of the failure of the vendor to comply with the
provisions of Article 1616 shall not be recorded in
the Registry of Property without a judicial order,
after the vendor has been duly heard. (n)
Judicial order for recording of consolidation of
ownership. (NPFAE)
1. Necessity.
2. Purpose.
3. Former method.
4. Acquisition of ownership by vendee a retro.
5. Effect of failure to comply with the requirement.
Action to consolidate ownership
1. Ordinary civil actions
2. Registration proceedings.
ART. 1608. The vendor may bring his action
against every possessor whose right is derived
from the vendee, even if in the second contract no

mention should have been made of the right to
repurchase, without prejudice to the provisions of
the Mortgage Law and the Land Registration Law
with respect to third persons. (1510)
Nature of right to redeem.
1. A right, not an obligation.
2. A real right.
ART. 1609. The vendee is subrogated to the
vendor’s rights and actions. (1511)
Rights acquired by vendee a retro.
(1) Vendee subrogated to vendor’s rights. —
Subrogation transfers to the person subrogated
the credit with all the rights thereto appertaining.
(2) Right to eject vendor. — Prior possession by the
vendee aretro of the property is not a condition
precedent in an unlawful detainer action against
the vendor a retro who, after having failed to
redeem, and title in the vendee a retro had been
consolidated, refused to vacate the property.
ART. 1610. The creditors of the vendor
cannot make use of the right of redemption
against the vendee, until after they have exhausted
the property of the vendor. (1512)
Right of vendor’s creditors to redeem.
This article is a practical application of Article 1177
permitting creditors to exercise the rights and actions
of their debtor after exhausting his properties to
satisfy their claims.
Article 1610 refers to all kinds of creditors, whether
ordinary or preferred, except those in whose favor
exists a mortgage or antichresis upon the very
property sold recorded prior to the sale.
ART. 1611. In a sale with a right to
repurchase, the vendee of a part of an undivided
immovable who acquires the whole thereof in the
case of article 498, may compel the vendor to
redeem the whole property, if the latter wishes to
make use of the right of redemption. (1513)
Redemption in sale of part of undivided
immovable.
The purpose of the above article (and Arts. 1612-
1615.) is to discourage co-ownership which is
recognized as undesirable, since it does not
encourage the improvement of the property coowned.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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(1) A co-owner may demand the partition of the
thing owned in common insofar as his share is
concerned. (Art. 494.)
a. If the thing is essentially indivisible, it
may be allotted to the co-owner who
shall indemnify the others.
b. If the co-owners cannot agree that the
thing be allotted to one of them, it shall
be sold and its proceeds distributed.
(Art. 498.)
(2) In either case, the vendee who acquires the
whole of an undivided immovable a part of
which is subject to a right to repurchase, has a
right to demand that the vendor a retro, who like
to exercise his right of redemption, redeem the
whole property.
ART. 1612. If several persons, jointly and in
the same contract, should sell an undivided
immovable with a right of repurchase, none of
them may exercise
this right for more than his respective share.
The same rule shall apply if the person
who sold an immovable alone has left several
heirs, in which case each of the latter may only
redeem the part which he may have acquired.
(1514)
ART. 1613. In the case of the preceding
article, the vendee may demand of all the vendors
or co-heirs that they come to an agreement upon
the repurchase
of the whole thing sold; and should they fail to do
so, the vendee cannot be compelled to consent to a
partial redemption. (1515)
Redemption in joint sale by co-owners/co-heirs of
undivided immovable.
1. The co-owners of an undivided immovable sold
by them jointly or collectively and in the same
contract with the right to repurchase, can
exercise such right only as regards their
respective shares. (Art. 1612, par. 1.)
2. Similarly, the co-heirs of the vendor of an
undivided immovable can exercise the right of
redemption only for the respective portions they
have inherited. (Ibid., par. 2.)
3. The vendee a retro can refuse partial
redemption; he may require all the vendors or all
the heirs to redeem the entire property or to agree

to its redemption by any one of them. (Art.
1613.) This right is given to the vendee in line
with the object of the law (see Art. 1620.) to put
an end to co-ownerships whenever possible.
4. Under Article 1620 (infra.), the right of a co-
owner who chooses not to redeem accrues to the
benefit of the others. The extent of the share of
the redeeming co-owner is not taken into account
except as provided in the second paragraph
thereof.
Effect of redemption by co-owner of entire
property.
Under Article 1612, a co-owner cannot
redeem more than his share in the co-ownership. The
redemption by a co-owner of the property in its
entirety, shouldering the expenses therefor, does not
make him the owner of all of it. In other words, it
does not put to end the existing state of co-ownership.
ART. 1614. Each one of the co-owners of
an undivided immovable who may have sold his
share separately, may independently exercise the
right of repurchase as regards his own share, and
the vendee cannot compel him to redeem the
whole property. (1516)
Redemption in separate sales by co-owners of
undivided immovable.
Although it is the policy of the law to avoid
indivision, it would be unjust, if the sale was made
separately and independently, to require the co-
owners to come to an agreement with regard
to the repurchase of the thing sold, and certainly, it
would be worse to deprive them of their right in case
they fail to agree.
The very purpose of the article is to prevent such
injustice. (10 Manresa 332.)
ART. 1615. If the vendee should leave
several heirs, the action for redemption cannot be
brought against each of them except for his own
share, whether the
thing be undivided, or it has been partitioned
among them.
But if the inheritance has been divided,
and the thing sold has been awarded to one of the
heirs, the action for redemption may be instituted
against him for the whole. (1517)
Redemption against heirs of vendee.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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The vendor a retro can exercise the right to
redeem against the heirs of the vendee a retro with
respect only to their respective shares, whether the
thing be undivided or it has been partitioned among
them.
However, if by partition the entire property
has been adjudicated to one of the heirs, the vendor
can exercise the right to redeem against said heir for
the whole.
ART. 1616. The vendor cannot avail himself of
the right of repurchase without returning to the
vendee the price of the sale, and in addition:
(1) The expenses of the contract, and any other
legitimate payments made by reason of the
sale;
(2) The necessary and useful expenses made on
the thing sold. (1518)
Obligation of vendor a retro in case of
redemption.
He must return to the vendee a retro:
(1) The price.
(2) Expenses of contract and other legitimate
expenses.
(3) Necessary and useful expenses.
a. The necessary expenses which must be repaid to
the vendee are not those which are ordinary and
simple expenses of preservation because these
expenses are incident to the enjoyment of the
thing and should be borne by the vendee. (10
Manresa 339-342.)
b. Useful expenses are refunded to the vendee a
retro because he is considered a possessor in
good faith. (Art. 546, par. 2.)
c. The vendor a retro is given no option to require
the vendee a retro to remove the useful
improvements on the land subject of the sale a
retro, unlike that granted the owner of a land
under Articles 546 and 54713 of the Civil Code.
d. The vendor a retro must pay for the useful
improvements introduced by the vendee a retro;
otherwise, the latter may retain possession of the
land until reimbursement is made.
e. The payment of land tax has been as neither
necessary nor useful.
Offer to redeem and tender of payment generally
required.
1. Offer to redeem must be bona fide.
2. When tender of payment not necessary.

Consignation of price generally not required.
1. Where right of repurchase judicially declared.
2. In case of absence of the vendee a retro.
ART. 1617. If at the time of the execution
of the sale there should be on the land, visible or
growing fruits, there shall be no reimbursement
for or prorating
of those existing at the time of redemption, if no
indemnity was paid by the purchaser when the
sale was executed.
Should there have been no fruits at the
time of the sale, and some exist at the time of
redemption, they shall be prorated between the
redemptioner and the vendee, giving the latter the
part corresponding to the time he possessed the
land in the last year, counted from the
anniversary of the date of the sale. (1519a)
Right of parties as to fruits of land.
(1) If there were fruits at the time of the sale and the
vendee paid for them, he must be reimbursed at
the time of redemption as the payment forms part
of the purchase price.
(2) If no indemnity was paid by the vendee for the
fruits, there shall be no reimbursement for those
existing at the time of redemption. (par. 1.)
(3) If the property had no fruits at the time of the
sale and some exist at the time of redemption,
they shall be apportioned proportionately
between the redemptioner and the vendee, giving
the latter a share in proportion to the time he
possessed the property during the last year
counted from the anniversary of the date of the
sale (par. 2.) to compensate the vendee for his
expense.
ART. 1618. The vendor who recovers the
thing sold shall receive it free from all charges or
mortgages constituted by the vendee, but he shall
respect the leases which the latter may have
executed in good faith, and in accordance with the
customs of the place where the land is situated.
(1520)
Right of vendor a retro to recover thing sold
free from charges.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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The vendee a retro may alienate, encumber,
or perform other acts of ownership over the thing
sold. But his ownership being revocable upon
redemption, all acts done by him are also revocable.
Thus, he may borrow money and mortgage
the property but when the vendor a retro redeems, the
vendee a retro is obliged to redeem the mortgage.
The vendor has the right to receive the property in the
same condition in which it was at the time of the sale.
SECTION 2. — Legal Redemption
ART. 1619. Legal redemption is the right
to be subrogated, upon the same terms and
conditions stipulated in the contract, in the place
of one who acquires a thing by purchase or dation
in payment, or by any other transaction whereby
ownership is transmitted by onerous title. (1521a)
Legal redemption defined.
Article 1619 gives the definition of legal redemption.
As the word “thing” is employed without
qualification, the right applies to both movable and
immovable property. (U.S. vs. Caballero, 23 Phil. 65
[1912].)
Dation in payment defined.
Dation in payment or dacion en pago is the
transmission of the ownership of a thing by the
debtor to the creditor as the accepted equivalent of
the performance of an obligation. (8 Manresa 314;
see Art. 1245.)
Nature of dation in payment.
(1) Sale of thing. — The undertaking partakes in
one sense of the nature of sale, 1 that is, the
creditor is really buying the thing or property
of the debtor, payment for which is to be
charged against the debtor’s debt.
(2) Novation of an obligation. — In its modern
concept, what actually takes place in dacion en
pago is an objective novation of the obligation
where the thing offered as an accepted
equivalent of the performance of an obligation
is considered as the object of the contract of
sale, while the debt is considered as the
purchase price.
Basis and nature of right of legal redemption.
(1) The nature of conventional and legal rights of
redemption is identical, except for the source of
the right. While conventional redemption arises

from the voluntary agreement of the parties, legal
redemption proceeds from law.
(2) The right of legal redemption is not predicated
on proprietary right but on a bare statutory
privilege to be exercised only by the person
named in the statute. In other words, the statute
does not make actual ownership at the time of
sale or redemption a condition precedent, the
right following the person and not the property.
(3) Legal redemption is in the nature of a mere
privilege created partly for reason of public
policy and partly for the 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. It is
intended to minimize co-ownership.
Instances of legal redemption.
(1) Under the Civil Code, the instances of legal
redemption are found in Articles 1620, 1621,
1622, 1634 (infra.), and 1088.
Article 1088 provides:
“Should any of the heirs sell his hereditary
rights to a stranger before the partition, any
or all of the co-heirs may be subrogated to
the rights of the purchaser by reimbursing
him for the price of the sale, provided they
do so within the period of one month from
the time they were notified in writing of the
sale of the vendor.”
(2) Under special laws, the following are instances
of legal redemption:
a. Redemption by owner of real property sold for
delinquent taxes. The period is within one year
from the date of sale.
b. Repurchase by homesteader of homestead sold
under the Public Land Act. The period is five
years
c. Redemption by judgment debtor or
redemptioner of real property sold on
execution. The period is twelve months.
d. Redemption by mortgagor after mortgaged
property has been judicially foreclosed and
sold. The period is ninety days but before
confirmation of sale by the court.
e. Redemption by an agricultural lessee of
landholding sold by the landowner. The period
is 180 days from notice in writing which shall
be served by the vendee on all lessees affected
and the Department of Agrarian Reform upon
the registration of the sale.
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7
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ART. 1620. A co-owner of a thing may
exercise the right of redemption in case the shares
of all the other co-owners or of any of them, are
sold to a third person. If the price of the alienation
is grossly excessive, the redemptioner shall pay
only a reasonable one.
Should two or more co-owners desire to
exercise the right of redemption, they may only do
so in proportion to the share they may respectively
have in the thing owned in common. (1522a)
Right of legal redemption of co-owner.
The right of legal redemption among co-owners
presupposed of course, the existence of a co-
ownership. The following are the requisites for the
right to exist:
(1) There must be co-ownership of a thing;
(2) There must be alienation of all or of any of the
shares of the other co-owners;
(3) The sale must be to a third person or stranger
(Art. 1620.), i.e., a non-co-owner; and
(4) The sale must be before partition.
By whom and against whom right may be
exercised.
1. A co-owner has the legal right to sell, assign, or
mortgage his ideal share in the property held in
common.
2. Co-owners have no right of legal redemption
against each other to whom the law grants the
same privilege, but only against a third person.
3. Should any of the heirs sell his hereditary right to
a stranger before partition, any or all of the co-
heirs may be subrogated to the rights of the
purchaser by reimbursing him for the purchase
price, provided it be done within the period of
one (1) month to be counted from the time they
were notified in writing of the sale by the vendor.
(Art. 1088.)
4. The right of legal redemption is not granted
solely and exclusively to the original co-owners
but applies to those who subsequently acquire
their respective shares while the community
subsists.
When right cannot be invoked.
1. Thing owned in common partitioned.
2. Shares of all co-owners sold.

3. Thing owned in common had been offered for
sale by all co-owners.
Price of redemption.
1. Reasonable price. — The law requires the
redemptioner to pay only a reasonable price if
the price of the alienation is grossly excessive.
This is to prevent collusion between the buyer
and the selling co-owner.
2. Price stated in the deed of sale. — The practice
of understating the consideration of transactions
for the purpose of evading taxes and fees due the
government is violative of public policy and
injurious to public interest and must be
condemned and the parties guilty thereof must be
made to suffer the consequences of their ill-
advised agreements to defraud the State.
3. Amount actually paid by the buyer. — On the
other hand, if by false representations the buyer
obtains from the redemptioner an amount (e.g.,
P100,000) greater than the price which he
actually paid (e.g., P80,000), the co-owner who
made the repurchase can recover from the buyer
the difference (P20,000) in an appropriate action.
Purpose of the grant of right to co-owners.
The purpose of the law in establishing the
right of legal redemption between co-owners is to
reduce the number of participants until the
community is done away with, as being a hindrance
to the development and better administration of the
property.
This reason exists while the community
subsists and the participants continue to be so
whether they be the original co-owners or their
successors.
ART. 1621. The owners of adjoining lands
shall also have the right of redemption when a
piece of rural land, the area of which does not
exceed one hectare, is alienated, unless the grantee
does not own any rural land.
This right is not applicable to adjacent
lands which are separated by brooks, drains,
ravines, roads and other apparent servitudes for
the benefit of other estates.
If two or more adjoining owners desire to
exercise the right of redemption at the same time,
the owner of the adjoining land of smaller area
shall be preferred; and should both lands have the
LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
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same area, the one who first requested the
redemption. (1523a)
 Right of legal redemption of adjacent
owners of rural lands.
The following are the requisites for the exercise of
the right under this article:
(1) Both the land of the one exercising the right of
redemption and the land sought to be redeemed must
be rural;
(2) The lands must be adjacent;
(3) There must be an alienation;
(4) The piece of rural land alienated must not exceed
one (1) hectare;
(5) The grantee or vendee must already own any
other rural land; and
(6) The rural land sold must not be separated by
brooks, drains, ravines, roads and other apparent
servitudes from the adjoining lands.
Meaning of rural lands.
The word “rural” has been defined as
relating to or constituting tenement in land adopted
and used for agricultural or pastoral purposes. It is
one which, regardless of site, is principally used for
the purpose of obtaining products from the soil as
opposed to urban lands, which are principally for the
purpose of residence. (Fabia vs. Intermediate
Appellate Court, 133 SCRA 364 [1984], citing 3
Castan 124.)
Purpose of the grant of right to owners
of adjoining rural lands.
(1) To benefit adjacent owners and public weal
as well.
(2) To avoid difficulties in cultivation.
(3) To protect agriculture.
ART. 1622. Whenever a piece of urban
land which is so small and so situated that a major
portion thereof cannot be used for any practical
purpose within a reasonable time, having been
bought merely for speculation, is about to be re-
sold, the owner of any adjoining land has a right
of pre-emption at a reasonable price.
If the re-sale has been perfected, the
owner of the adjoining land shall have a right of
redemption, also at a reasonable price.
When two or more owners of adjoining
lands wish to exercise the right of pre-emption or
redemption, the owner whose intended use of the
land in question appears best justified shall be
preferred. (n)

Pre-emption, which has been defined as the act or
right of purchasing before others. (72 C.J.S. 478.) It
is exercised before the sale or resale against the
would-be vendor.
Redemption, which is exercised after the sale has
been perfected against the vendee. The recognition of
the right of redemption will result in the rescission of
the sale.
Requisites:
a. The one exercising the right must be an
adjacent owner;
b. The piece of land sold must be so small and
so situated that a major portion thereof
cannot be used for any practical purpose
within a reasonable time; and
c. Such urban land was bought by its owner
merely for speculation.
Preference as between two or more adjacent owners.
— In case two or more adjoining owners desire to
exercise the right of legal redemption, the law prefers
him whose intended use of the land appears best
justified.
Meaning of urban land.
The term “urban,” as used in Article 1622, does not
necessarily refer to the nature of the land itself sought
to be redeemed nor to the purpose to which it is
somehow devoted, but to the character
of the community or vicinity in which it is found. In
this sense, even if the land is somehow dedicated to
agriculture, it is still urban in contemplation of
Article 1622, if it is located within the center of
population or the more or less populated portion of a
city or town. (Ortega vs. Orcine, 38 SCRA 276
[1971].)
Meaning of “to speculate.’’
According to Webster’s International Dictionary (2nd
edition, p. 2417.), “to speculate” means: “To enter
into a business transaction or venture from which the
profits or return are conjectural because the
undertaking is outside the ordinary course of
business, to purchase or sell with the expectation of
profiting by anticipated, but conjectural fluctuations
in price.
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Purpose of the grant of right to owners of
adjoining urban lands.
Whereas, the objective of the right of redemption of
adjoining rural land is to encourage the maximum
development and utilization of agricultural lands, the
evident purpose of Article
1622 is to discourage speculation in real estate and
the consequent aggravation of the housing problems
in centers of population.
ART. 1623. The right of legal pre-emption
or redemption shall not be exercised except within
thirty days from the notice in writing by the
prospective vendor, or by the vendor, as the case
may be. The
deed of sale shall not be recorded in the Registry
of Property, unless accompanied by an affidavit of
the vendor that he has given written notice thereof
to all possible redemptioners.
The right of redemption of co-owners
excludes that of adjoining owners. (1524a)
Period for exercise of right.
(1) Absolute and non-extendible - It is
peremptory and non-extendible.
(2) A condition precedent. — The thirty-day
period4 is not a prescriptive period but is
more a requisite or condition precedent to
the exercise of the right of legal redemption.
(3) Reason for rule. — The fundamental policy
of the law is to discourage the keeping for a
long time of property in a state of
uncertainty, beyond the thirty-day period, a
situation which obviously is unjust to the
purchaser and prejudicial to public interest.
Notice by vendor or prospective vendor.
The period of thirty (30) days is counted from the
notice in writing given by the prospective vendor or
by the vendor, as the case may be, and not by the
vendee.
1. Reasons for rule. — The reasons for requiring
the vendor to give the notice are easy to see.
2. Notice must be in writing. — The written notice
required under Article 1088 (supra.) and Article
1623 is indispensable. Any other kind of notice
such as verbal or by registration, or the mere
knowledge of the sale, acquired in some other
manner by the legal redemptioner, does not
satisfy the statute.
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3. Form of written notice. — Jurisprudence affirms

the need for notice but its form has been the
subject of varying interpretations.

4. Contents of written notice of sale. — The notice

in writing which Article 1623 requires to be
made is a notice not only of a perfected sale but
of the actual execution and delivery of the deed
of sale.

5. Notice by any other insufficient. — The notice

required by Article 1623 must be given by the
vendor (or prospective vendor) and by nobody
else. This is clear from Article 1623 unlike
Article 1524 of the former Civil Code which did
not specify who must give the notice.

How right exercised.

1. Consignation in court. — In exercising the right
to redeem, the redemptioner may go to the court
directly, and practicallymake the offer to
repurchase through it. The reason for this is that
the redemptioner might not know the vendee’s
whereabouts or the latter might even conceal
himself to prevent redemption.

2. Tender of price. — That the legal redemptioner is

only required to pay a reasonable price is no
obstacle to the requirement of tender. The
statutory period fixed for the exercise of the right
of legal redemption would be rendered
meaningless and of easy evasion, unless the
redemptioner is required to make an actual
tender in good faith of what he believes to be the
reasonable price of the land sought to be
redeemed.

LEMUEL ANGELO MANAIT ELECCION (Notes and Cases: Law on Sales by De Leon and Paras)
A BRIEF SUMMARY OF CHAPTER 7