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Week 10 - Extinguishment of Sale - Coggle Diagram

- - - - WHEN NOT APPLICABLE - In barter, transmission of property by hereditary title, mortgage and lease.
      - PERIOD TO REDEEM (1623) - Within (30) days from notice in writing by the prospective vendor or by the vendor.
        
        INSTANCES OF LEGAL REDEMPTION
        
        Co-Owners (1620) - Requires that the sale must be to a non-owner and the redemption be exercised prior to partition.
        
        Co-Heirs (1088) - Refers to sale of hereditary rights and not to specific properties. For the payment of the debts of the decedent estate.
        
        Adjoining Owners
        
        Rural Land (1621) - Rural land refers to land relating to or constituting land adopted and used for agricultural or pastoral purposes.
        
        ELEMENTS
        
        RURAL - Both the land of the one exercising the right of redemption and the land sought to be redeemed must be rural;
        
        ADJACENT - The lands must be adjacent;
        
        ALIENATION - There must be an alienation;
        
        SIZE - The piece of rural land alienated must not exceed one hectare;
        
        OWNERSHIP - The grantee or vendee must already own any other rural land; and
        
        JOINED - The rural land sold must not be separated by brooks, drains, ravines, roads and other apparent servitudes from the adjoining lands.
        
        Urban Land (1622) - Land in a city or town, the purpose of which is dwelling, industry or commerce.
        
        Requisites - must be alleged by adjoining owner and proved by him
        
        ADJACENT OWNER - The one exercising the right must be an adjacent owner
        
        SMALL - 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
        
        SPECULATION - Such urban land was bought by its owner merely for speculation.
        
        SPECULATION - 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.
        
        Public Land Act - Every conveyance of land acquired under free patent or homestead subject to repurchase by application of heirs within (5) years from date of conveyance.
        
        Extrajudicial Foreclosure (RA 3175) - Debtor, judicial creditor or judgment creditor of debtor or any person with a lien on property subsequent to the mortgage or deed of trust by which it was sold may redeem within (1) year from date of sale.
        
        Agrarian Land Reform Code - if landholding sold to a 3rd person without knowledge of the agricultural lessee, latter shall have right to redeem at reasonable price and consideration within a reasonable period. If two or more agricultural lessees, right to redeem only to the extent cultivated by them.
        
        TIME PERIOD - Only after notice and within (180) days from notice by vendee to all lessees affected and DAR, which shall have priority.
        
        VENDOR - Notice by vendor or prospective vendor is required, not the vendee.
    - - SUBJECT MATTER - Both real and personal property.
      - WHEN EXISTING - Must be reserved from the moment of the perfection of the contract. Otherwise, its existence prior makes the contract a mere promise to sell which produces different effects under NCC 1479
        
        Option to Buy - A right to repurchase must be reserved by the vendor in the contract of sale itself, not through a subsequent instrument. Any right granted to the vendor by the vendee after the execution of the deed of sale is another right, such as an option to buy.
        
        B1. Distinguished from Equitable Mortgage (1602-1604, 2088) - An equitable mortgage is one which lacks proper formalities required by law but, through intent of the parties it is shown that property is the subject of a contract as security for a debt and contains nothing contrary to law.
        
        B3. Period of Redemption (1606) - Refers to conventional redemption i.e. convention by stipulation.
        
        B4. How Exercised (1616) - Vendor must return:
        
        PRICE - of the sale
        
        EXPENSES - of the contract and other legitimate payments made by reason of the sale
        
        NECESSARY AND USEFUL - expenses made on the thing sold.
        
        WHO MAY EXERCISE (1610) -
        
        Vendor
        
        Creditors of Vendor - ONLY AFTER they have exhausted the property of the vendor.
        
        SALE OF UNDIVIDED IMMOVABLE (1611) - Any vendee who acquires the whole of an undivided immovable a part thereof is subject to a right to repurchase may demand that a vendor a retro redeem the whole property if they wish to do so.
        
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        FROM WHOM IT CAN BE REDEEMED (1615) - If vendee leaves several heirs, action for redemption can be exercised only as regards to their respective shares.
        
        BUT if through partition, the entire property has been adjudicated to one of the heirs the entire property can be redeemed.
        
        EFFECT OF REDEMPTION (1617) -
        
        AS TO FRUITS -
        
        If at the time of the execution of the sale, there are visible or growing fruits exist then no reimbursement for those existing at the time of redemption.
        
        BUT if no fruits at time of sale and existing at time of redemption, such fruits are prorated between redemptioner and vendee, vendee has part corresponding to the time they came into possession in the last year, counted from the anniversary of the sale.
        
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        AS TO BURDENS (1618) - Vendor has a right to recover thiing sold free from charges. All acts done by the vendee are revocable upon redemption.
        
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        EFFECT OF NON-REDEMPTION (1607) - In real property, consolidation of ownership by failure to comply with proper redemption under 1616 are not recorded in the Registry WITHOUT a judicial order declaring that the vendor has been duly heard.
        
        WHEN PAID - Expenses (Necessary, etc.) need not be paid at the very time of the exercise of the right to redeem.
        
        NECESSARY AND USEFUL EXPENSES - Vendor a retro has no option to require the vendee to remove the useful improvements unlike the options given under NCC 546-547.
        
        OFFER AND TENDER OF PAYMENT - Law requires that the offer must be bona fide and accompanied by simultaneous tender of payment or consignation of the full amount agreed upon for the repurchase. (Torrijos v. Crisologo)
        
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        GENERAL RULE - (4) years from the date of the contract.
        
        XCPN - An agreement to the contrary. However, may not exceed (10) years.
        
        XCPN 2 - May be exercised right to repurchase within (30) days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with a right to repurchase.
        
        PRESUMPTION - A contract is presumed to be an equitable mortgage, regardless of its nomenclature under the following circumstances:
        
        INADEQUATE - Price of the sale with a right to repurchase is unusually inadequate
        
        POSSESSION - Vendor remains in possession as a lessee or otherwise
        
        NEW INSTRUMENT - Is executed after the expiration of the right to repurchase which extends the redemption period or granting a new one.
        
        RETENTION - When purchaser retains for himself a part of the purchase price
        
        TAXES - Vendor binds himself to pay taxes on the thing sold
        
        ANALOGOUS - Cases where it may be fairly inferred that the real intent was to secure the payment of a debt or performance of an obligation.
        
        DISTINCTION BETWEEN PACTO DE RETRO
        
        OWNERSHIP - Ownership is transferred in pacto de retro, but not in a mortgage.
        
        INTEREST - Failure of seller to repurchase within stipulated time means that they lose rights and interests in a pacto de retro. Whereas in mortgage no total loss of interest in property due to default
        
        FORECLOSE - In pacto de retro, no obligation on purchaser to foreclose. Vendor does not have any right to redeem. Whereas in mortgage, foreclosing is requisite for perfection of title.
        
        DOUBT (1603-1604) - In case of doubt, presumption is that a contract is an equitable mortgage.