The document discusses the remedies available to unpaid sellers under Philippine law. It outlines the definition of an unpaid seller and their ordinary remedies like suing for the price or damages. It also discusses special unpaid seller remedies such as possessory lien, stoppage in transitu, and resale of goods. The document then discusses the Recto Law governing installment sales of personal property and the Maceda Law protecting buyers of real estate purchased on installments. Key protections under the Maceda Law include grace periods for payments, entitlement to cash surrender value if cancelled, and restrictions on oppressive contract terms.
The document discusses the remedies available to unpaid sellers under Philippine law. It outlines the definition of an unpaid seller and their ordinary remedies like suing for the price or damages. It also discusses special unpaid seller remedies such as possessory lien, stoppage in transitu, and resale of goods. The document then discusses the Recto Law governing installment sales of personal property and the Maceda Law protecting buyers of real estate purchased on installments. Key protections under the Maceda Law include grace periods for payments, entitlement to cash surrender value if cancelled, and restrictions on oppressive contract terms.
The document discusses the remedies available to unpaid sellers under Philippine law. It outlines the definition of an unpaid seller and their ordinary remedies like suing for the price or damages. It also discusses special unpaid seller remedies such as possessory lien, stoppage in transitu, and resale of goods. The document then discusses the Recto Law governing installment sales of personal property and the Maceda Law protecting buyers of real estate purchased on installments. Key protections under the Maceda Law include grace periods for payments, entitlement to cash surrender value if cancelled, and restrictions on oppressive contract terms.
The document discusses the remedies available to unpaid sellers under Philippine law. It outlines the definition of an unpaid seller and their ordinary remedies like suing for the price or damages. It also discusses special unpaid seller remedies such as possessory lien, stoppage in transitu, and resale of goods. The document then discusses the Recto Law governing installment sales of personal property and the Maceda Law protecting buyers of real estate purchased on installments. Key protections under the Maceda Law include grace periods for payments, entitlement to cash surrender value if cancelled, and restrictions on oppressive contract terms.
The seller of goods is deemed to be an unpaid seller either: 1. when the whole of the price has not been paid or tendered; or 2. when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise.
Note: It includes an agent of the seller to whom the bill of lading has been indorsed, or consignor or agent who has himself paid, or is directly responsible for the price, or any other person who is in the position of a seller. What are the remedies of an Unpaid Seller? : I. Ordinary 1. Action for Price Exercised when: a. ownership has passed to buyer; b. price is payable on a day certain c. goods cannot readily be resold for reasonable price and Art. 1596 is inapplicable 2. Action for Damages – In case of wrongful neglect or refusal by the buyer to accept or pay for the thing sold II. Special Possessory Lien Stoppage in Transitu Resale Rescind
Possessory Lien – Seller not bound to deliver if buyer has not paid him the price. It is exercisable only in following circumstances: a. goods sold without stipulation as to credit b. goods sold on credit but term of credit has expired c. buyer becomes insolvent
Note: When part of goods delivered, may still exercise right on goods undelivered
What are the Instances when possessory lien is lost:
1. seller delivers goods to carrier for transmission to buyer without
reserving ownership in goods or right to possess them 2. buyer or his agent lawfully obtains possession of goods 3. waiver
Note: Seller loses lien when he parts with goods (but still, stoppage in transitu can be exercised) Stoppage in Transitu
What is the right of stoppage in transitu? The seller may resume possession of the goods at any time while they are in transit, and he will then become entitled to the same rights in regard to the goods as he would have had if he had never parted with the possession. (Art. 1530, NCC)
Requisites: a. Insolvent buyer b. Seller must Surrender the negotiable document of title, if any c. Seller must bear the Expenses of delivery of the goods after the exercise of the right. d. Seller must either actually take possession of the goods sold or give Notice of his claim to the carrier or other person in possession e. Goods must be in Transit f. Unpaid seller
When are goods considered to be in transit?
1. After delivery to a carrier or other bailee and before the buyer or his agent takes delivery of them; and 2. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them. (Art. 1531, par. 1)
When goods no longer in transit
1. Reached point of destination 2. Before reaching destination, buyer obtains delivery of the goods 3. Goods are supposed to have been delivered to buyer but carrier refused wrongfully 4. Shown by seller that buyer is insolvent (failure to pay when debts become due )
How is right exercised
1. Obtain actual possession of goods 2. Give notice of claim to carrier / bailee in possession thereof 3. Notice by seller to buyer is not required; notice to carrier is essential
Special Right to Resell the Goods
Exercised when: a. Goods are perishable, b. Stipulated the right of resale in case of default, or c. Buyer in default for unreasonable time NOTE: notice by seller to buyer not essential NOTE: profit or loss in resale Profit Loss Seller shall not be liable to the original buyer Seller may recover from the buyer damages for for any profit made by such resale any loss occasioned by the breach of contract of sale
Special Right to Rescind
Unpaid seller having the right of lien or having stopped the goods in transit, may rescind the transfer of title and resume ownership in the goods when:
Requisites: a. Expressly stipulated OR buyer is in default for unreasonable time b. Notice needed to be given by seller to buyer
Note: Ownership of goods already with buyer but seller may still rescind; ownership is destroyed even without court intervention but in ordinary sale, need to go to court.
RECTO LAW & MACEDA LAW
1. Installment Sales Law
• Commonly known as the Recto Law. It is embodied in Art. 1484 of the NCC which provides for the remedies of a seller in the contracts of sale of personal property by installments. 2. Realty Installment Buyer Act • Commonly known as the “Maceda Law.” It is embodied in R.A. 6552 which provides for certain protection to particular buyers of real estate payable on installments. The law declares as "public policy to protect buyers of real estate on installment payments against onerous and oppressive conditions.
RECTO LAW, APPLICATION
• This law covers contracts of sale of personal property by installments (Act No. 4122). It is also 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.
ALTERNATIVE REMEDIES IN CASE OF SALE OF PERSONAL PROPERTY IN
INSTALLMENTS, SHOULD BUYER FAIL TO PAY
1. SPECIFIC PERFORMANCE or Exact fulfillment should the buyer fail to pay
GR: If availed of, the unpaid seller cannot anymore choose other remedies; XPN: if after choosing, it has become impossible, rescission may be pursued
2. RESCISSION: Cancel the sale if buyer fails to pay 2 or more installments. Deemed chosen when: a. Notice of rescission is sent b. Takes possession of subject matter of sale c. Files action for rescission
3. FORECLOSURE: Foreclose on chattel mortgage if buyer fails to pay 2 or more installments
GR: Actual foreclosure is necessary to bar recovery of balance Extent of barring effect: purchase price XPN: Mortgagor refuses to deliver property to effect foreclosure; expenses incurred in attorneys fees, etc.
When the lessor of the property chose to deprive the lessee of the subject personal property, can the former recover any unpaid rentals from the latter? In choosing, through replevin, to deprive the respondent of possession of the leased equipment, the petitioner waived its right to bring an action to recover unpaid rentals on the said leased items.
MACEDA LAW, APPLICATION
Note: The purpose of the law is to protect buyers in installment against oppressive conditions. Q: What are the transactions/sale covered by the Maceda Law? A: The law involves the sale of immovables on installment (Maceda Law, R.A. 6552). Coverage: Residential Real Estate • Excluded: a. Industrial lots b. Commercial buildings (and commercial lots by implication) c. Sale to tenants under agrarian laws
RIGHTS GRANTED TO BUYERS:
1. Buyer paid at least 2 years installments
• Pay w/o interest the balance within a grace period of 1 month for every year of installment payment. • Grace period to be exercised once every 5 years. • When no payment , if cancelled by seller; buyer entitled to 50% of what he has paid + 5% for every year but not exceeding 90% of payments made • Note: actual Cancellation to be effected 30 days from buyer’s receipt of notice of cancellation & upon payment of cash surrender value.
2. Buyer paid less than 2 years installment
• Grace period is not less than 60 days from due date • if buyer fails to pay w/in 60 days grace period, seller may cancel provided that such cancellation be done after 30 days notice from receipt of notice of cancellations or demand for rescission by notarial act Note: buyer can still pay w/in this 30 day-period with interest.
OTHER RIGHTS GRANTED TO A BUYER:
1. Sell or assign rights to another
2. Reinstate contract by updating within 30 days before and cancellation 3. Deed of Sale to be done by notarial act 4. Pay full installment in advance the balance of price anytime w/o interest 5. Have full payment annotated in certificate of title
Note: Applies to contracts even before the law was enacted. Stipulation to the contrary is void.
