A. Pactum Commisorium, Cite Specific Civil Code Provision

Yrreverre, Emmanuel Alejandro III L.
11781033
Sales: G02 - Wednesday; 1830-2030
Please do library work and research on the following:
a. Pactum Commisorium, cite specific Civil Code Provision.
Article 2088. The creditor cannot appropriate the things given by way of
pledge or mortgage, or dispose of them. Any stipulation to the contrary is
null and void.
Automatic appropriation by the creditor of the thing pledged or mortgaged

upon the failure of the debtor to pay the principal obligation. This stipulation
is null and void. However it doesn’t affect substantially
the principal contract of pledge, mortgage or antichresis with regard to its
validity and efficacy.
Requisites
 There should be a pledge, mortgage, antichresis of property by way of
security for the payment of the principal obligation
 Stipulation for the automatic appropriation of the property in favor
of the creditor upon default of the debtor/pledgor
b. Recto Law amendment to the Civil Code
Recto Law or also known as the Installment Sales Law can be seen in Art.
1484 of the NCC which provides for the remedies of a seller in a contract of
sale of personal property by installments. Art. 1484 of the NCC incorporates
the provisions of Act No. 4122 passed by the Philippine Legislature on Dec.
9, 1939, known as the Installment Sales Law or Recto Law, which then
amended Art. 1454 of the Civil Code of 1889.
The Recto law covers the contracts of sale of personal property by and
involving installments (Act No. 4122). It is also applied to contracts
purporting to be leases of personal property with option to buy or rent to
own purchases, when the lessor has deprived the lessee of the possession or
enjoyment of the thing. (PCI Leasing v. Creative Imaging)
According to Art. 1484 of the NCC the alternative remedies in case of sale of
personal property in installments are the following:
a. Specific Performance (Demand Payment)
b. Rescission (Cancel the Sale – Default in 2 payments)
c. Foreclosure
c. Maceda Law on real estate sales
The Maceda Law or the Realty Installment Buyer Act is a law that protects
buyers of real estate on installment payments against onerous and
oppressive conditions. The law provides for certain protection to particular
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buyers of real estate payable on installments.
The law involves the sale of immovables on installment (Maceda Law, R.A.
6552). It inclues Residential Real Estate, however it excludes Industrial lots,
Commercial buildings (and commercial lots by implication) and Sale to
tenants under agrarian laws.
The Maceda law grants rights to the buyer:

1. Buyer paid at least 2 years installment
a. Pay without interest the balance within grace period of 1 month for
every year of installment payment. Grace period to be exercised once
every 5 years.
b. When no payment – cancelled; buyer entitled to 50% of what he has
paid + 5% for every year but not exceeding 90% of payments made
2. Buyer paid less than 2 years installment
a. Grace period is not less than 60 days from due date
b. Cancellation if failure to pay w/in 60 days grace
c. 30 days’ notice before final cancellation
d. Assignment of Credit
Assignment of credit takes place when a contract by which one person

transfers to another his rights and actions against a third person (debtor) in
consideration of a price certain in money or its equivalent. An assignment of
credit has been defined as the process of transferring the right of the
assignor to the assignee who would then have the right to proceed against
the debtor. The assignment may be done gratuitously or onerously, in which
case, the assignment has an effect similar to that of a sale.
Conventional subrogation is not identical to assignment of credit. In the

former, the debtors consent is necessary; in the latter it is not
required. Subrogation extinguishes the obligation and gives rise to a new
one; assignment refers to the same right which passes from one person to
another. The nullity of an old obligation may be cured by subrogation, such
that a new obligation will be perfectly valid; but the nullity of an obligation
is not remedied by the assignment of the creditors right to another. In an
assignment of credit, the consent of the debtor is not necessary in order that
the assignment may fully produce legal effects. What the law requires in an
assignment of credit is not the consent of the debtor but merely notice to
him as the assignment takes effect only from the time he has knowledge
thereof. (Licaros v. Gatmaitan)
e. Right of Redemption
Art. 1600. Sales are extinguished by the same causes as all other obligations,
by those stated in the preceding articles of this Title, and by conventional or
legal redemption.
Conventional redemption shall take place when the vendor reserves the right
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to repurchase the thing sold, with the obligation to comply with the
provisions of Article 1616 and other stipulations which may have been
agreed upon. (Art. 1601)
Legal redemption is the right to be subrogated, upon the same terms and
conditions stipulated in the contract, in the place of one who acquires a thing
by purchase or dation in payment, or by any other transaction whereby
ownership is transferred by onerous title. It must be exercised within thirty
(30) days from the notice in writing by the vendor. This does not apply to
barter, donation, transmission of things by hereditary title, mortgage, lease.
f. List of all scenarios where there is a right of Redemption.
Conventional Redemption
Pacto de Retro sale refers to the sale wherein the seller has the right to
repurchase the subject matter or the property being sold. In the absence of
an express agreement, shall last four years from the date of the contract.
Should there be an agreement, the period cannot exceed ten years. (Art.
1606)
Legal Redemption
Under the Civil Code
1. Sale of co-owner of his share to a stranger
2. When a credit or other incorporeal right in litigation is sold
3. Sale of an heir of his hereditary rights to a stranger
4. Sale of adjacent rural lands not exceeding one hectare
5. Sale of adjacent small urban lands bought merely for speculation
Under special laws

1. An equity of redemption in cases of judicial foreclosures
2. A right of redemption in cases of extra-judicial foreclosures
3. Redemption of homesteads
4. Redemption of tax sales
5. Redemption by an agricultural tenant of land sold by the landowner
g. Pactum non alienando, cite specific Civil Code Provision
Article 2130. A stipulation forbidding the owner from alienating the

immovable mortgaged shall be void.
There can be no stipulation absolutely prohibiting the mortgagor from selling

the property. Pactum de non Alienando is stipulation prohibiting the
alienation of the property is void. it is a void stipulation being contrary to
public policy. Mortgagor remains to be the owner. He is not divested of his
ownership by merely constituting the mortgage.
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h. Equitable Mortgage - An equitable mortgage is one which lacks the proper
formalities, form or words or other requisites prescribed by law for a
mortgage, but shows the intention of the parties to make the property
subject of the contract as security for a debt and contains nothing impossible
or contrary to law
The essential requisites of equitable mortgage

1. Parties entered into a contract of sale
2. Their intention was to secure an existing debt by way of a mortgage.
An equitable mortgage is one which although lacking in some formality, or

form or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a
debt, and contains nothing impossible or contrary to law.

A. Pactum Commisorium, Cite Specific Civil Code Provision

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Yrreverre, Emmanuel Alejandro III L.

Please do library work and research on the following:

a. Pactum Commisorium, cite specific Civil Code Provision.

Automatic appropriation by the creditor of the thing pledged or mortgaged

b. Recto Law amendment to the Civil Code

c. Maceda Law on real estate sales

The Maceda law grants rights to the buyer:

Assignment of credit takes place when a contract by which one person

Conventional subrogation is not identical to assignment of credit. In the

f. List of all scenarios where there is a right of Redemption.

Under special laws

g. Pactum non alienando, cite specific Civil Code Provision

Article 2130. A stipulation forbidding the owner from alienating the

There can be no stipulation absolutely prohibiting the mortgagor from selling

The essential requisites of equitable mortgage

An equitable mortgage is one which although lacking in some formality, or

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