“The three remedies under Article 1484 which
RECTO AND MACEDA
LAW CASES
Prepared and presented by:
Del Mundo, Jared Ibrahim T.
Gomez, Jan Kevin S.
Tenerife, John Franklin R.
RECTO LAW (Act No. 4122)
covers sales of personal property by instalment.
MACEDA LAW (R.A. No. 6552)
governs installment sales of real property.
RECTO LAW (Act No. 4122)
Comprises of Art. 1484 to 1486 of the New Civil
Code. It was added to the Civil Code to prevent
abuses in the foreclosure of chattel mortgages,
such as when mortgagee-creditors foreclosed
mortgaged property, bought them at a low
price (on purpose,) then prosecuted the
mortgagor-debtors to recover deficiencies.
RECTO LAW (Act No. 4122) Case 1
Universal Motors Corp. vs. Dy Hian Tat, G.R.
No. L-23788 (1969):
are available to the vendor who has sold
personal property on the installment plan, are
alternative, not cumulative. In other words, if
the vendor has elected to avail himself of any of
the remedies, he is deemed to have renounced
the others. In case the vendor elects to
foreclose the mortgage, if one has been given
on the property, he is not obliged to return to
the purchaser the amount of the installment
already paid. The mere fact that appellee has
secured possession of the truck in question
does not necessarily mean that it will foreclose
its mortgage. Indeed, there is no showing at all
that appellee is causing the sale thereof at
public auction or in even preparing to do so. It is
quite possible that appellee wanted merely to
be sure that the truck is not lost or rendered
valueless.
At any rate it is the actual sale of the
mortgaged chattel in accordance with section
14 Act No. 1508 that would bar the creditor
(who chooses to foreclose) from recovering any
unpaid balance. (Pacific Com. Co. vs. De la
Rama, 72 Phil. 380; Manila Motor Co. vs.
Fernandez, 99 Phil. 782.)”
RECTO LAW (Act No. 4122) Case 2
Levy Hermanos Inc., vs Lazaro Blas
Gervasio G.R. No. 46306 October 27, 1939
“In order to apply the provisions of article
1454-A of the Civil Code it must appear that
there was a contract for the sale of personal
property payable in installments and that there
has been a failure to pay two or more
installments. The contract, in the instant case,
while a sale of personal property, is not,
however, one on installments, but on straight
term, in which the balance, after payment of
the initial sum, should be paid in its totality at
the time specified in the promissory note. The
transaction is not, therefore, the one
contemplated in Act No. 4122 and accordingly
the mortgagee is not bound by the prohibition
therein contained as to the right to the recovery
of the unpaid balance.
MACEDA LAW (RA 6552)
It applies to the purchaser of real property by
installment payments when the purchase
becomes cancelled by a delinquency in
payment. It provides the buyer with a right to a
refund as a requisite for cancellation of contract
due to delinquency when the buyer has paid at
least two years.
MACEDA LAW (RA 6552) Case 1
Communities Cagayan Inc., petitioner vs Sps.
Arsenio and Angeles Nanol and anybody
claiming rights under them. G.R. No. 176791
“Under the Maceda Law, before a contract to
sell involving a property can be validly and
effectively cancelled, the seller has (1) to send a
notarized notice of cancellation to the buyer
AND (2) to refund the cash surrender value.
Thus, the buyer has the right to continue
occupying the property subject of the contract
to sell, and may still reinstate the contract by
updating the account during the grace period
and before the actual cancellation of the
contract. Hence, where a party complied only
with the 1st condition but failed to refund the
cash surrender value to the adverse party, the
Contract to Sell remains valid and subsisting and
the latter has the right to continue occupying
the subject property.”
MACEDA LAW (RA 6552) Case 2
Fabrigas v San Francisco del Monte, 476 scra
247 (2005):
“Cancellation of the contract under Section 4
(of the RA No. 6225) is a two-step process. First,
the seller should extend the buyer a grace
period of at least sixty (60) days from the due
date of the installment. Second, at the end of
the grace period, the seller shall furnish the
buyer with a notice of cancellation or demand
for rescission through a notarial act, effective
thirty (30) days from the buyers receipt thereof.
It is worth mentioning, of course, that a mere
notice or letter, short of a notarial act, would
not suffice. While the Court concedes that Del
Monte had allowed petitioners a grace period
longer than the minimum sixty (60)-day
requirement under Section 4, it did not comply,
however, with the requirement of notice of
cancellation or a demand for rescission. Instead,
Del Monte applied the automatic rescission
clause of the contract. Contrary, however, to
Del Montes position which the appellate court
sustained, the automatic cancellation clause is
void under Section 7 in relation to Section 4 of
R.A. 6552.”