Analysis of “Maceda” and “Recto” Laws in connection with Sales on Installments

The Recto Law covers the installment sales of personal property that is covered by the
Civil Code. On the other hand, Maceda law is the one who governs installment sales of real
property. The Recto Law prevents possible abuses by the seller in the occasion that the buyer is
incapable to make additional installments for a personal property purchased. Maceda Law
protects buyers of real properties on installment basis against heavy and unfair conditions. The
two laws consecutively protect the buyers and sellers at the same time for some conditions that
is not fair for both sides. In the Philippines, some close relatives are in lawsuit or distress
because of some lands that are not properly processed and third parties are also involved with
no privity of contract between the two. Therefore, Maceda and Recto laws should be explained
in a manner where everyone can understand.

The Maceda and Recto Laws

Philippines legislated laws that provide protection to installment property purchasers and
this law is called the ‘Maceda Law’ or ‘Realty Installment Buyer Protection Act’ or ‘Republic Act
No.6552’. It came into effect in August, 1972. Maceda Law is for people who purchase
residential property and pay for the same in installments and also includes the rights of buyers
who default on payment. The Recto Law is consisted of Articles 1484 to 1486 of the Civil Code.
The Recto Law was added to the Civil Code to prevent abuses in the foreclosure of chattel
mortgages, such as when mortgagee-creditors barred mortgaged property, bought them at a
low price on purpose, and then sued the mortgagor-debtors to recover the deficiencies.

The Problem and the Setting

In this case study, we will have G as the wife who executed a deed of absolute sale to R,
her husband, over the said lot without any monetary consideration, solely out of love and
affection by G to R. The two are also not married to each other but lived together as husband
and wife. Thereafter, R registered the document to his name and used the property as collateral
for a bank loan. Upon the knowledge of G, the wife, executed an Affidavit of Adverse claim that
the lot she sold to R, her husband, was null and void. On February 22, 1990, G filed a complaint
against R but the husband claimed that the registered owner of the lot is himself already upon
he acquired it through a notarized deed of absolute sale from his wife, G. Therefore, there was
no fraud nor the sale was unjust. Three months after, R sold the land to a third party named M
and is already registered under his name. In defense of the complaint, M said that there was no
privity contract between him and G and that he was a purchaser for value in good faith. The sale
also between R and him was long before the execution of Affidavit of Adverse claim of R’s wife,
G.

Now, G insists that she and R were common-law husband and wife, the sale between
them was void and inexistent as she cited the Article 1490 of the Civil Code. This claim has now
led us to the question of the validity of sale between the husband R and wife G as well as the
validity of sale between husband R and the third party M.

The Solution

If we are to take a look at it in a chronological order, the sale between G and R was valid
because of the notarized deed of sale. This means that G sold her lot to R without any monetary
consideration. If we will follow the settings as well, R registered the lot from the notarized deed
of absolute sale under his name, therefore, he is now the sole owner of the lot. Following this,
the lot was also sold by R to a third party M before G filed an Affidavit of Adverse claim. The
sale between R and M is therefore valid.

G can only protect her interest if and only if the deed of absolute sale includes a clause
where her husband R or the buyer, can sell it only to their child or their descendant. If that’s the
case, G can file a complaint or file a case of breach of contract to her husband R, the buyer.
That is the only way she can have the property or the lot back.

However, if we are going to follow the whole context, it will be another thing. If we would
take a look at this case is in a different perspective. If G insists that the sale between her and
her husband R is invalid citing the 1490 of the Civil Code, the answer to the question of validity
of sale between G and R and as well as the validity of sale between R and M are all invalid. In
the Civil Code of the Philippines Book IV Title VI Chap. 2 Art. 1490, The husband and the wide
cannot sell property to each other, except when there’s a separation of property that was agreed
upon in the marriage settlements or when there has been a judicial separation. And in this case,
G claims that she and her husband R are common-law husband and wife. Therefore, it makes
the sale of G and R, R and M all invalid because selling of property between husband and wife
are not legal.
References:

The Civil Code of the Philippines (June 18, 1949).

Coursehero (n.d.). The Recto and Maceda Law (RA6552) in the Philippines. Other Topics for
Regulatory Framework and Legal Issues in Business. Retrieved March 05, 2022 from
https://www.coursehero.com/file/79888755/Recto-Maceda-Law-etcdocx/