ART.

1600
CAUSES FOR EXTINGUISHMENT OF SALE:
1. COMMON - causes which are also the means of extinguishing all other contracts. Ex.
Payment, Loss of the thing, Condonation
2. SPECIAL - causes which are recognized by the law of sales
3. EXTRA-SPECIAL - causes which are given special discussion by the Civil Code. These
are : Conventional redemption & Legal redemption

SECTION 1 - CONVENTIONAL REDEMPTION

ART. 1601
CONVENTIONAL REDEMPTION - the right which the vendor reserves to himself to
reacquire/repurchase the property/thing sold provided he reimburses the vendee of the price,
the expenses of the contract, any other legitimate payments made and the necessary and
useful expenses on the thing sold and fulfills other stipulations which may have been agreed
upon

ART. 1602 Ex
The contract shall be presumed to be an ​equitable mortgage​:
1. When the price of a sale with right to repurchase is usually inadequate
2. When the vendor remains in possession as lessee or otherwise
3. When upon/after the expiration of the right to repurchase another instrument extending
the period of redemption or granting a new period is executed
4. When the purchaser retains for himself a part of the purchase price
5. When the vendor binds himself to pay the taxes on the thing sold
6. In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other
obligation
EQUITABLE MORTGAGE
- although it lacks the proper formalities of a mortgage, shows the intention of the parties
to make the property subject of the contract as a security for the fulfillment of an
obligation
- Sanla - redeem
- No transfer of ownership
- For the protection of mortgage
- The repurchase price paid by the apparent vendor is considered the principal of the loan
and any money, fruits or other benefits received thereafter by the apparent vendee, are
considered as interest on the said loan and are subject to the Usury Law
PACTO DE RETRO
- Repurchase
- There is a transfer of ownership
- Can sell/mortgage/lease by vendee
 - The price is usually less than in absolute sales for the reason that in the former, the
vendor expects to reacquire/redeem the property sold - to make it easier for the ​vendor a
retro​ to redeem the property

ART. 1603 - 1604

- Whether the sale is absolute or pacto de retro, it shall be presumed to be an equitable
mortgage if any of the cases mentioned in ​Art. 1602​ is present
- In case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage

ART. 1605 Ex
REFORMATION - remedy by means of which a written instrument is made/construed so as to
express/conform to the real intention of the parties when such intention is not expressed in the
instrument. In reformation, there has been a meeting of the minds between the parties, but the
written instrument purporting to embody their agreement does not express their true intention by
reason, for instance, of mistake/fraud. Where there has been no meeting of the minds, the
remedy is annulment.

ART. 1606 Ex
PERIOD FOR EXERCISE OF RIGHT OF REDEMPTION:
● If there is no agreement granting the vendor the right to redeem, there is no right of
redemption since the sale should be considered an absolute sale
● If the parties agree only on the right to redeem on the part of the vendor but there is a
total absence of express stipulation as to the time within which the repurchase should be
made, then the period of redemption shall be 4 years from the date of the contract
● If the parties agree on a definite period of redemption, then the right to redeem must be
exercised within the period fixed provided it does not exceed 10 years
● If the parties agree that the vendor shall have a right to redeem and they intend a period
which, however, is not specified, then the redemption period is 10 years
● From the time final judgment was rendered in a civil action on the basis that the contract
was a true sale with right to repurchase, the vendor a retro has 30 days within which to
exercise the right to repurchase

ART. 1607
- If real property is involved and the vendor failed to redeem within the period agreed
upon, the vendee's title becomes irrevocable. However, the consolidation of ownership
in the vendee shall not be recorded in the Registry of Property without a judicial order
and until after the vendor has been duly heard. The reason for the requirement is that
the transaction may not be a genuine pacto de retro but only an equitable mortgage

ART. 1608 Ex
- The vendor may bring his action against every possessor whose right is derived from the
vendee, even if in the second contract no mention should have been made of the right to
 repurchase, without prejudice to the provisions of the Mortgage Law and the Land
Registration Law with respect to third persons

ART. 1609
- The vendee is subrogated to the vendor's rights and actions
- The vendee may transfer/alienate his right to a third person, mortgage the property,
enjoy the fruits thereof, recover the property against every possessor, and perform all
other acts of ownership subject only to the right of redemption of the vendor. The vendor
cannot transfer ownership if he is not the real owner

ART. 1610
- The creditors of the vendor cannot make use of the right of redemption against the
vendee, until after they have exhausted the property of the vendor

ART. 1611 Ex
REDEMPTION IN SALE OF PART OF UNDIVIDED IMMOVABLE

ART. 1612, 1613 Ex

REDEMPTION IN JOINT SALE BY CO-OWNERS/CO-HEIRS OF UNDIVIDED IMMOVABLE:
- The co-owners of an undivided immovable sold by them jointly/collectively and in the
same contract with the right to repurchase, can exercise such right only as regards their
respective shares
- The co-heirs of the vendor of an undivided immovable, can exercise the right of
redemption only for the respective portions they have inherited
- The vendee a retro can refuse partial redemption. He may require all the vendors or all
the heirs to redeem the entire property or to agree to its redemption by any one of them.
The right is given to the vendee in line with the object of law to put an end to
co-ownerships whenever possible

ART. 1614 Ex
REDEMPTION IN SEPARATE SALES BY CO-OWNERS OF UNDIVIDED IMMOVABLE
- Each one of the co-owners of an undivided immovable who may have sold his share
separately, may independently exercise the right of repurchase as regards his own
share, and the vendee cannot compel him to redeem the whole property

ART. 1615 Ex
REDEMPTION AGAINST HEIRS OF VENDEE
- The vendor a retro can exercise the right to redeem against the heirs of the vendee a
retro with respect only to their respective shares, whether the thing be undivided or it has
been partitioned among them
- However, if by partition, the entire property has been adjudicated to one of the heirs, the
vendor can exercise the right to redeem against said heir for the whole
ART. 1616
OBLIGATIONS OF THE VENDOR A RETRO IN CASE OF REDEMPTION:
- The vendor must notify first the vendee that he already wants to repurchase the property
- Return to the vendee a retro:
a. Price of the sale - it is lawful to the parties to agree that the price to be returned
will be more or less than the original sum paid by the vendee
b. Expenses of the contract, and any other legitimate payments made
c. The necessary and useful expenses made on the thing sold
NECESSARY EXPENSES - those incurred for the preservation of the thing or
those which seek to prevent the waste, deterioration or loss of the thing
USEFUL EXPENSES - those which increase the value of the thing or create
improvements

ART. 1617 Ex
RIGHTS OF PARTIES AS TO FRUITS OF LAND
- Refers only to natural and industrial fruits
1. If there were fruits at the time of the sale and the vendee paid for them, he must be
reimbursed at the time of redemption as the payment forms part of the purchase price
2. If no indemnity was paid by the vendee for the fruits, there shall be no reimbursement for
those existing at the time of redemption
3. If the property had no fruits at the time of the sale and some exist at the time of
redemption, they shall be apportioned proportionately between the redemptioner and the
vendee, giving the latter a share in proportion to the time he possessed the property
during the last year counted from the anniversary of the date of the sale to compensate
the vendee for his expenses. The same rule, is also applicable if there were fruits at the
time of the sale and the vendee paid for them

ART. 1618
- The vendor who recovers the thing sold shall receive it free from all charges or
mortgages constituted by the vendee, but he shall respect the leases which the latter
may have executed in good faith, and in accordance with the customs of the place
where the land is situated
- Vendor can redeem anytime but if there is a lease he has to wait

SECTION 2 - LEGAL REDEMPTION

ART. 1619
LEGAL REDEMPTION - the right to be subrogat