Canivel, Angelica A.

BSMA 401

04 Activity 1

1. Myrna sold her house and lot in favor of Jonas and in consideration of P 1,300,000.
They executed a contract entitled “Deed of Sale under Pacto de Retro”. The market
value of the house and lot at the time of sale was P 10,000,000. Is the contract a
pacto de retro sale or an equitable mortgage? Why?

Since Myrna and Jonas enter into a contract of sale, without any intention to secure an
existing debt by way of a mortgage then the sale is pacto de retro. In a pacto de retro, ownership
of the property sold is immediately transferred to the vendee a retro, subject only to the
repurchase by the vendor a retro within the stipulated period. under Article 1602, the contract
shall be presumed to be an equitable mortgage when the price of a sale with right to repurchase is
unusually inadequate.

2. Betty and Lydia were co-owners of a parcel of land. On January 14, 201B, when she
paid her real estate tax, Betty discovered that Lydia has sold her share to Emma on
November 10, 201A. The following day, Betty offered to redeem her share from
Emma, but the latter replied that Betty’s right to redeem has already prescribed. Is
Emma correct? Why or Why not?

Emma is correct because Under the, Article 1611 of the civil code of the Philippines.
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.