b. TRANSACTIONS COVERED
AND NOT COVERED

REMEDIES
IN A CONTRACT OF SALE:

1. PERSONAL PROPERTY
2. INSTALLMENTS
   Article 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies:
   

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IF FAILURE TO PAY

• DEMAND FULFILLMENT
  (1) Exact fulfillment of the obligation, should the vendee fail to pay;
  

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IF FAILURE TO PAY 2 OR MORE INST

• CANCEL SALE (Recover possession)
  (2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
• FORECLOSURE (SALE!) MORTGAGE
  (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. (1454-A-a)

REMEDIES ABOVE APPLY IF:

1. LEASE
2. MOVABLE PROP
3. OPTION TO BUY; AND
4. LESSOR DEPRIVED LESSEE OF:
   -POSSESSION/ENJOYMENT
   Article 1485. The preceding article shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. (1454-A-a)

ONE BARS THE OTHER
The said remedies are alternative and not cumulative and therefore, the exercise of one bars the exercise of the others.
(Filinvest Credit Corp v. CA)

VALID: FORFEIT
INSTALLMENTS/RENTS
Article 1486. In the case referred to in the two preceding articles, a STIPULATION that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances. (n)

"REALTY INSTALLMENT BUYER ACT"
Section 1. This Act shall be known as the "Realty Installment Buyer Act."

POLICY: PROTECT FROM
ONEROUS & OPPRESSIVE CONDITIONS
Section 2. It is hereby declared a public policy to protect buyers of real estate on installment payments against onerous and oppressive conditions.

AFTER 2 YRS WORTH PAYMENT:

1. REAL ESTATE SALE/FINANCING
2. INSTALLMENTS
   a. 2 YRS PAID
   b. DEFAULT ON SUCCEEDING ONES
   Section 3. In all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-nine,
   where the buyer has paid at least two years of installments,
   the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:

BEFORE 2 YRS -> 60 DAYS GRACE MIN
Section 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.

SALE/ASSIGN/REINSTATE REQS:

1. UPDATE ACC:
   a. DURING GRACE
   b. BEFORE ACTUAL CANCELLATION
2. NOTARIZE
   Section 5. Under Section 3 and 4, the buyer shall have the right to sell his rights or assign the same to another person or to reinstate the contract by updating the account during the grace period and before actual cancellation of the contract. The deed of sale or assignment shall be done by notarial act.

1. ADVANCED PAYMENT
   BALANCE or INSTALLMENT
   WITHOUT INTEREST
   Section 6. The buyer shall have the right to pay in advance ANY installment or the full unpaid balance of the purchase price any time without interest and to have such full payment of the purchase price annotated in the certificate of title covering the property.

CONTRARY TO SECS 3-6:
NULL & VOID
Section 7. Any stipulation in any contract hereafter entered into contrary to the provisions of Sections 3, 4, 5 and 6, shall be null and void.

SAVING CLAUSE
Section 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected thereby.

GRACE PERIOD
WITHIN: 1-MO/1YR PAID
(a) To pay, without additional interest,
the unpaid installments due
within the total grace period earned by him which is hereby fixed at the rate of

one month grace period for every one year of installment payments made:

• CANCELLED -> REFUND CSV (50% TP)
  5 YRS PAST -> +5%/YR
  90% TP MAX
  (b) If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made,
  and,
  after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made:

COUNTED AS INSTALLMENT;

1. DOWNPAYMENT
2. DEPOSIT
3. OPTIONS
   Down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made.

NO STIPULATING MACEDA AWAY
Can people stipulate Maceda away?
NO! Section 7 of the Maceda law states that stipulations contrary to Sections 3-6 shall be
NULL & VOID.

FAIL TO PAY - CANCEL:

1. 30 DAYS AFTER NOTICE/DEMAND
2. NOTARIZED
   If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.

RATIO: TEMPTATION TO BUY BEYOND MEANS
the law is aimed at those sales where the price is payable in several installments, for, generally, it is in these cases that partial payments consist in relatively small amounts, constituting thus a great temptation for improvident purchasers to buy beyond their means.

"ACTION" INCLUDES EXTRAJUDICIAL
EJ-FORECLOSURE INCLUDED
The word "action" is without a definite or exclusive meaning. Considering the purpose contained in Article 1484, "action" may be construed as any judicial or extrajudicial proceeding by virtue of which the vendor may lawfully be enabled to exact recovery of the supposed unsatisfied balance of the purchase price from the purchaser or his privy. An extrajudicial foreclosure of real estate mortgage is one such proceeding.
[Cruz v. Filipinas Investment and Finance Corp.]