Obligations of the Buyer/ Vendee (A1582
onward):
When interest on top of price:
Remedies of the seller if the buyer fails or
refuses to perform contractual obligations:
Specific performance- suit in the form of the
collection of money, but seller must exhaust
admin remedies, so demand (verbally or in
writing)
- If despite the demands, the buyer still fails to
pay, then the seller can go to court
- NOTE: Katarungang pambarangay” same
barangay or same municipality or city, then refer
first to lupon for amicable settlement. Direct
buyer to pay the price. presuppose legal delay,
court may impose interest on top of price. And if
damages suffered for nonpayment (ie, damages,
filling fees, legal fees, etc.) then all can be
included as part of damages.
If seller does not like payment but already in the
hands in the buyer, seller may file rescission/
cancellation with damages. Court may direct
buyer to return thing to seller. If damages
suffered (thingh deteriorates, expanses, etc.)
 Seller may choose damages alone
Special remedies:
1. Stoppage in transitu
- Not a general remedy
- Circumstances to exercise such remedy:
- If the goods are on there way to the place of
buyer for delivery and seller learns of buyers
insolvency an may direct the courier
*** a. Goods are on the way
b. seller not yet paid, and
c. buyer becomes insolvent
* Right to stop because of danger that he may
not be paid anymore
- no need to file court, out of court remedy
What will happen to the goods? - brought back
to the seller, and may keep the same until the
economic sit of buyer improves, but if he cannot
keep without damage then seller may opt for the
resale.
2. Possessory Lien:
- Seller may keep the goods,
- If the good cannot be kept for a long time,
perishable goods, seller can resort to resale:
o Rules In resale: seller gets more than the original
price. Whom does the excess belong?
 The excess or the resale goes to the seller.
If there is a deficiency: - suffered damages of
25K. Can the seller run after the original buyer?
– yes.
RECTO LAW:

** Serves as a protection to the aggrieved buyer.
Q: where does it apply?
If the sale is in straight terms (payable in full) and
the buyer fails to pay, applicable? – no. apply
only if the sale is payable in installments
ILLUS: A bought car; pay installments for one
year but started defaulting after year, and covered
by chattel mortgaged. Failed to pay after 1 mos.
Q: Can the seller foreclosure?
A: no. because failed to pay only one
installment.
Q: can he resort to
Only remedy if only one unpaid installment,
seller can only exact fulfillment.
“exact fulfillment” meaning – enforce payment.
Seller will demand payment of the one month
delinquent installment.
Q; what if default in two mos?
A: he may foreclose, cancel the sale, and exact
fulfillment.
Q: What happens in foreclosure?
- The car will be taken back. The buyer in
possession of the car will be forced to
surrender the car, public/ foreclosure
sale.
- Assuming less than 1 million because 12
mos already paid. And buyer paid 1/3
remaining balance Php. 616,000. The
37,000 remainder, who gets? -the buyer.
Bec he already paid 200K + monthly, he
will not be able to get back and also
deprived of the car. So whatever
remains after foreclosure sale shall
return to the buyer.
- Q: what if sold for only 600K,
deficiency of 63,000. Can the seller
mortgagee fun after buyer for that
deficiency? – No. because prohibited by
recto law. Lose cannot be recovered and
the car was repossessed, and after
auction you will still have to pay? – no
more. It is a protection of the buyer
under onerous and oppressive situations
brought about by his failure to pay.
- But suppose the contract has a clause
stating that in the event of a foreclosure
sale and a deficiency exists, will the
provision be enforceable? - void. Under
recto law.
Q: can the seller cancel, even if he has
already foreclosed? - no. vendor can choose
only one to the exclusion of other options.
(a) Apply recto law
(b) No. because the law provided that they
are not. The remedies are
ALTERNATIVE not COMULATIVE.

MACEDA LAW:
*Applicable in the event of any legal issue if
the property is real and payable in
installments.
* It is a protection for the buyer, RIBPA /
MACEDA LAW
* Apply only if there is an agreement or
contract where sale or financing is payable
by at least 2 installments, include condo
units. If apartment- house, payable by
installments and buyer incurs 2 defaults. If it
is industrial lot- do not apply.
What if: CARL.
Illus: bought subd. lot in Baguio, area of 300
sq meters, value: 5M. payable in 20 years
with interest, monthly installments.
On 13 mos. Buyer starts to default. So the
seller issued a demand letter givig the buyer
15 days to pay the unpaid installment of 2
mos. If failure after 15 days, buyer has to
vacate land within 15 days.
What can the buyer do?
- Is 15 days oppressive?
- Under law, how long is the grace
period?
But will not apply.
If only paid for one year:
Grace period of 60 days minimum without
additional interest.
** suppose failed to pay within the 60 days
period. – not vacate immediately. – xxx
- Issue a notice of cancellation or
demand for recission. – 30 days. And
must be notarized by a lawyer.
- Can still pay? – YES. So 60 days
grace period + 30 days.
- Suppose defaulted after 1 year and 6
mos. Is the provision applicable? Yes
because still less than 2 years
installment
- What is exactly 2 years? What is the
grace period: 1 month (30 days) for
every year of paid installment.
- What if failed to pay after grace period?
– seller notice or demand, and another
30 days.
 ** buyer can also wait for payment of
the cash surrender value/ refund (down
payment, earnest money etc. and get partial
refund.)
Cannot vacate unless a cash surrender
value given. Get the down payment and the
amount paid during those 3 years. How
much is the refund? – 50% refund
If 6 years then additional 5% every year
If 7 years 50% + 5% +5% = 60%
But must not exceed 90%. Up until 90%
only.
DOUBLE SALE

* Covers all types of property

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 First to possess in good faith