Chapter 7.

- Extinguishment of Sales

Definitions
1. Legal redemption - right to be subrogated, under the same terms and conditions as
the contract, in the place where ownership is transferred through onerous title.
2. Equitable mortgage - a contract that, while lacking the formality of a mortgage,
reveals the parties' intent to use the property as security for the obligation.
3. Conventional redemption - shall takes place when the vendor reserves the right to
repurchase the thing sold, with the obligation comply with the provisions of article 1616
and other stipulations agreed upon.

Discussions
1. What are the requisites for the right of legal redemption of a co-owner to exist?
-There must be co-ownership
-There must be alienation of all or of any of the shares of the other co-owners
-The sale must be to a third person or stranger
-The sale must be before partition
-The right must be exercised within the period
-The vendee must be reimbursed for the price of the sale.

2. Give the cases when a contract shall be presumed by law to be an equitable

mortgage.
-When the price of sale with the right to re purchase is unusually or inadequate
-When the vendor remains in possession as lesee or otherwise
-When the purchaser retains himself a part of purchase price
-When the vendor binds himself to pay the taxes on the thing sold.

3. What are the obligations of the vendor a retro who desires to exercise his right of
repurchase?
He must return to the vendee the price and the expenses of contract and other
legitimate expenses like Necessary and useful expenses.

Problems
1. S signed a document purporting to be a sale of his parcel of land to B with right to
repurchase. S claims that what he intended is to mortgage his property to B for money
loaned on him. What remedy is available to S: reformation or annulment?
- If S says that he meant to mortgage his property to B and the instruments state that he
has the right to repurchase the property, this is reformation. However, if a party fails to
convey their genuine desire due to dishonesty, or if there is no meeting of minds, the
remedy is annulment.

2. 5 sold his house to B with a right to repurchase.

a.) May B lease the property, knowing that s will certainly exercise his right of
redemption?
- The answer is yes, because as the owner, you have all the rights of ownership, except
for the vendor's right to get it back.
b.) Has B the obligation to respect the lease after exercising right of redemption?
- If S buys his house from someone without any debts or mortgages, he must follow the
leases that the other person signed in good faith.

3. A, B, C, and D are co-owners of a parcel of land sold to E with a right of repurchase.

May E require all on them to repurchase the whole property instead of partial
repurchase by each of them as regards his own share?
- In this case, each person can only repurchase 1/3 of the property. However, X can
demand that A B C D come to an agreement to redeem the whole property, and if they
don't, 50. X can't be forced to agree to a partial redemption.

Chapter 8.- Assignment of Credits and Other Incorporeal Rights

I. Definitions
Define assignment of credit.
- In exchange for money or something else, one person gives up his rights and actions
against a third person in exchange for that money or something else.

II. Discussions
1. What does an assignor of credit warrant and what liabilities will he incur in case of
violation thereof?
- A creditor who assigns his credit warrants only the existence and legality of his or her
credit at the time of the contract's completion and completion.
- Without express provision, or unless the debtor's insolvency was already shown, there
is no warranty as to his or her ability to pay the debt.

2. Why is assignment of credit regarded as really a sale? 

- A transaction is technically completed because the subject matter is the credit or right
that has been transferred; the consideration is the sum that has been paid for the credit
or right; and the consent is the agreement of the parties.

III. Problems
1. S, being in need of money, sold to B for P500,000.00 his right to inheritance from his
father who died telling B that he believes that its value is more than P500,000.00. it
turns out that the value is only P300,000.00. Is S liable to B?
- The answer varies depending on the situation. In this case, S simply guarantees that
he is his father's heir. If B becomes his share after the partition, he is not accountable.

2. C, creditor, assigned his credit against D, debtor, to T, without securing the consent
of D. Subsequently, D paid C who became bankrupt. Has T the right to recover from D
the payment made to C?
It is dependent; however, in the case of an assignment of credit, consent is not required.