Extinguishment of Sale

EXTINGUISHMENT OF CONTRACT OF SALE
1. The same causes as all other obligations
2. Various causes of extinguishment under Title VI

(Sales)
3. Redemption
a. Payment or performance
– delivery of money or performance, in any manner
of an obligation.
b. Loss of the thing due

– loss of determinate thing due to fortuitous event
and there is no delay.
c. Condonation or remission of the debt

– is the gratuitous abandonment by the creditor of
his right.
d. Confusion or merger of rights of creditor and
debtor
– is the meeting in one person the qualities or the
character of creditor and debtor.
e. Compensation
– two persons, in their own right, are debtors and
creditors of each other.
f. Novation
- It is the modification or extinguishment of an
obligation by another, either by:
a. changing the object or principal condition;
b. substituting the person of the debtor; or
c. subrogating a third person in the rights of
the creditor.
g. Prescription
h. Death
a. Cancellation of sale of personal property payable
in installments (Art. 1484)
b. Resale of the goods by the unpaid seller (Art.

1532)
c. Rescission of the sale by the unpaid seller (Art.

1534)
d. Rescission by the buyer in case of breach of

warranty
} Conventional Redemption
} Legal Redemption
It takes place when the vendor reserved the right to
repurchase the thing sold, with the obligation to:
1. return to the vendee the price of sale;

2. return to the vendee the expenses of the
contract and any other legitimate payments made
by reason of the sale;
3. return to the vendee the necessary and useful
expenses made on the thing sold; and
4. to comply with other stipulations which may
have been agreed upon.
Period of redemption:
1. No period is stated in the agreement – within 4

years from the date of the contract
2. If a period is stated in the agreement – the

period cannot exceed 10 years
Effect of failure to exercise the right of
repurchase:
Ownership is consolidated in the vendee

Against whom the right to repurchase available?
1. The vendee
- if the original vendee dies leaving several heirs,
the vendor can exercise his right to repurchase
against each of them for his own share.
2. Every possessor whose right is derived from the

vendee, even if no mention is made in the second
contract of the right to repurchase, provided the
right has been recorded in the Register of Deeds, or
even if the right is not registered, but the possessor
has knowledge of the existence of the right.
Who may avail the right to repurchase?
1. Vendor
2. Creditors of the vendor
– however, they cannot make use of the right of
redemption against the vendee, until after they
have exhausted the property of the vendor.
It 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
the ownership is transmitted by onerous title.
A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-
owners or of any of them, are sold to a third person.
If two or more co-owners desire to exercise the right

of redemption, they may do so in proportion to the
share they respectively have in the thing owned in
common.
If a piece of rural land not exceeding one hectare is
alienated, the adjoining owner shall have the right of
legal redemption unless the grantee does not own any
rural land.
Rules if two or more adjoining owners desire to
exercise the right of legal redemption:
1. The owner of the adjoining land of smaller area

shall be preferred.
2. If both lands have the same area, the one who first
requested the redemption, shall be preferred.
The right is not applicable to adjacent lands which
are separated by brooks, drains, ravines, roads and
other apparent servitudes for the benefit of other
estates.
If a small piece of urban land which was bought for
speculation has been resold, the owner of the
adjoining land has a right of redemption at a
reasonable price.
If such small piece of urban land is about to be
resold, the adjoining owner shall have the right of
pre-emption at a reasonable price, the adjoining
owner shall be given the right to buy the property
before it is offered to others.
Preference shall be given to the owner whose
intended use of the land in question appears best
justified.
Note: The right of redemption of co-owners excludes

that of adjoining owners.
a. Pre-emption – within 30 days from written notice
by prospective vendor.
b. Redemption – within 30 days from written notice

by vendor.
One which though lacking in formalities nevertheless
shows the real intention of the parties to create a
specific property to secure the performance of an
obligation.
A contract of sale with a right to repurchase and other contracts
purporting to be an absolute sale, shall be presumed to be an
equitable mortgage, in any of the following cases:
a. When the price of a sale with a right to repurchase is

unusually inadequate.
b. When the vendor remains in possession as lessee or

otherwise.
c. When the period for the exercise of the right to repurchase is

extended.
d. When the purchaser retains for himself a part of the purchase

price.
A contract of sale with a right to repurchase and other contracts
purporting to be an absolute sale, shall be presumed to be an
equitable mortgage, in any of the following cases:
e. When the vendor binds himself to pay the taxes on the thing
sold.
f. When the real intention of the parties is that the transaction

shall secure the payment of a debt or the performance of any
other obligation (Art. 1602)

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EXTINGUISHMENT OF CONTRACT OF SALE

1. The same causes as all other obligations

2. Various causes of extinguishment under Title VI

b. Loss of the thing due

c. Condonation or remission of the debt

b. Resale of the goods by the unpaid seller (Art.

c. Rescission of the sale by the unpaid seller (Art.

d. Rescission by the buyer in case of breach of

1. return to the vendee the price of sale;

1. No period is stated in the agreement – within 4

2. If a period is stated in the agreement – the

Ownership is consolidated in the vendee

2. Every possessor whose right is derived from the

If two or more co-owners desire to exercise the right

1. The owner of the adjoining land of smaller area

Note: The right of redemption of co-owners excludes

b. Redemption – within 30 days from written notice

a. When the price of a sale with a right to repurchase is

b. When the vendor remains in possession as lessee or

c. When the period for the exercise of the right to repurchase is

d. When the purchaser retains for himself a part of the purchase

f. When the real intention of the parties is that the transaction

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