Sale of Movables on Installment

7/25/2019 Sale of Movables on Installment

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SALE OF MOVABLES ON

INSTALLMENT

Articles 1484 to 1486


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Article 1484In a contract of sale of personal property the

price of hich is paya!le in install"ents# the $en%or"ay e&ercise any of the folloin' re"e%ies(

)1*E&act f+l,ll"ent of the o!li'ation# sho+l% the$en%ee fail to pay-

).*/ancel the sale# sho+l% the $en%ee0s fail+re topay co$er to or "ore install"ents-

)*Foreclose the chattel "ort'a'e on the thin' sol%#if one has !een constit+te%# sho+l% the $en%ee0s

fail+re to pay co$er to or "ore install"ents2 Inthis case# he shall ha$e no f+rther action a'ainstthe p+rchaser to reco$er any +npai% !alance ofthe price2 Any a'ree"ent to the contrary shall !e

$oi%2


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Article 1483

The prece%in' article shall !e

applie% to contracts p+rportin' to !eleases of personal property ith optionto !+y# hen the lessor has %epri$e%the lessee of the possession orenoy"ent of the thin'2


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Article 1486

In the case referre% to in toprece%in' articles# a stip+lation thatthe install"ents or rents pai% shall not!e ret+rne% to the $en%ee or lesseeshall !e $ali% insofar as the sa"e "ay

not !e +nconsciona!le +n%er thecirc+"stances2


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5EMEIES

12 E&act f+l,ll"ent sho+l% the !+yerfail to pay 7Speci,c erfor"ance9

.2 /ancel the sale if !+yer fails to payto ).* or "ore install"ents75escission9

2 Foreclose on chattel "ort'a'e if!+yer fails to pay to ).* or "oreinstall"ents


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ALI/ABILIT:

The re"e%ies apply only to sales of personalproperty in install"ents2

Sale on Install"ent is %e,ne% as pay"ent !y

se$eral partial pay"ents in s"aller a"o+nts2

;Sales of personal property in strai'ht ter"s#

here after the pay"ent of an initial s+"# theentirely of the !alance pai% is at the speci,cti"e2


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NAT


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T=E 5E/TO LA> )A/T NO241..*

Article 1484 of the /i$il /o%e pro$i%es forthe re"e%ies of a seller in contracts ofsale of personal property !y install"ents#an% incorporates the pro$isions of Act No241..# ?non as the Install"ent Sales Laor the 5ecto La# hich then a"en%e%

Article 1434@A of the /i$il /o%e of 1882 +npai% !alance oin'C to +npai%

!alance of the priceC


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>hat It Means

/hoice of 5e"e%ies :o+ co+l% only

choose one2

e,ciency +%'"ent For 5escissionan% Foreclos+re# one cannot reco$er

the +npai% !alance of the price2


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SE/IFI/ E5FO5MAN/E

G5( >hen the seller has chosenspeci,c perfor"ance# he can no lon'ersee? for rescission nor foreclos+re of

the chattel "ort'a'e constit+te% onthe thin' sol%2

; Article 111 &&& =e "ay also see?rescission# e$en after he has chosenf+l,ll"ent# if the latter sho+l% !eco"ei"possi!le2 &&&


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EFFE/TS

Ven%or is !arre% fro" choosin' eitherrescission or foreclos+re );111*

One "ay ha$e reco$ery of %e,ciency

)In%+strial Finance /orp2 $s 5a"ireD* A +%'"ent in an action for speci,c

perfor"ance "ay !e e&ec+te% on allpersonal an% real properties of the !+yerhich are not e&e"pt fro" e&ec+tion an%hich are s+Hcient to satisfy s+ch

+%'"ent2


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B


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5ES/ISSION

G5( >hen the re"e%y of rescission is chose#there is correlati$e o!li'ation on the part ofthe $en%or to restit+te the $en%ee for

hate$er a"o+nt the latter has pai%2

;>hen there is a stip+lation thatinstall"ents pai% are forfeite%2 S+chstip+lation is $ali% as lon' as the sa"e "aynot !e +nconsciona!le +n%er thecirc+"stances 714869


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ee"e% /hosen

a* Notice of 5escission as sent

!* Ta?es possession of the s+!ect"atter of sale

c* Files action for rescission

)There "+st !e an +neJ+i$ocal %esireon the part of the seller to rescin%the contract )V%a2 e K+ai"!ao $sManila Motor /2# Inc2# S/5A 443*


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EFFE/TS

a* Article 1484 pro$i%es that the !arrin' eect onthe reco$ery of !alance is applica!le only henthe re"e%y of foreclos+re is chosen# the sa"ei"plicit fro" the nat+re of the re"e%y hich is"+t+al restit+tion )Nonato $s IA/# 14 S/5A.33*

!* 5escission see?s to cancel the contract an% toai$e f+rther clai" on the p+rchase price2

c*The $en%or "ay reco$er %a"a'es for !reach ofcontract2

%* M+t+al 5estit+tion


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Article 1832 5escission creates the o!li'ation to

ret+rn the thin's hich ere the o!ect of thecontract# to'ether ith their fr+its# an% the priceith its interest- conseJ+ently# it can !e carrie%o+t only hen he ho %e"an%s rescission can

ret+rn hate$er he "ay !e o!li'e% to restore2Neither shall rescission ta?e place hen thethin's hich are the o!ect of the contract arele'ally in the possession of thir% persons ho

%i% not act in !a% faith2In this case# in%e"nity for %a"a'es "ay !e%e"an%e% fro" the person ca+sin' the loss2


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FO5E/LOS


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EFFE/TS

a* /annot reco$er +npai% !alance- ; Mort'a'orref+ses to %eli$er property to eect foreclos+re#reco$er also e&penses inc+rre% in attorneys fees#etc )Bor%on $s Ser$icei%e Specialist# Inc2# G5

No2 16418*

!* Sec+rities 'i$en !y thir% party persons or thepay"ent of the price- If the '+arantor sho+l% !eco"pelle% to pay the !alance of the p+rchase

price# he ill in t+rn !e entitle% to reco$er hatshe has pai% fro" the %e!tor@$en%ee )/r+D $sFilipinas In$est"ent# . S/5A 1*


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c* Other Sec+rities $ia E&tra+%icial Action

>hether the seller@"ort'a'ee foreclosesthe chattel "ort'a'e !efore enforce"entof the a%%itional "ort'a'es or see?s theenforce"ent of the a%%itional "ort'a'es

prior to the foreclos+re of the chattel"ort'a'e# the seller "+st !e hel% to ha$elost !y ai$er of non@choice of his lien onthe chattel "ort'a'e of the personal

property sol% !y an% "ort'a'e% !ac? tohi"2 )Bor!on $s Ser$icei%e Specialist#Inc2*


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LEASE >IT= OTION TO


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FINAN/ING T5ANSA/TIONS

The pro$isions of 5ecto La are applica!le to,nancin' transactions %eri$e% or arisin' fro"sales of "o$a!les on install"ents# e$en if the+n%erlyin' contract at iss+e is a loan !eca+sethe pro"issory note has !een assi'ne% orne'otiate% !y the ori'inal seller2

Article 1484 applies to a person or entity hichhas ,nance the p+rchase on install"ents of a"o$a!le# here the seller s+!seJ+ently assi'nsthe loa% %oc+"ents to the ,nancin' person orentity )Payas $s L+neta Motor# S/5A 13.*


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T=E MA/EA LA> )5A633.*

This pro$i%es for certain protection topartic+lar !+yers of real estate paya!le oninstall"ents2

Mace%a La %oes not co$er all sales of realtyon install"ents# !+t pri"arily resi%ential realestate2 This incl+%es the sale or ,nancin' ofreal estate on install"ent pay"ents# incl+%in'

resi%ential con%o"ini+" apart"ents2 /ontract of Sale- /ontract to Sell- Financin'Transactions


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5IG=TS G5ANTE TO T=EB


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.2 If the contract is cancelle%# the seller shallref+n% to the !+yer the cash s+rren%er $al+e

of the pay"ents on the property eJ+i$alentto 3Q of the total pay"ents "a%e an%#after ,$e )3* years of install"ents# ana%%itional 3Q e$ery year !+t not to e&cee%

Q of the total pay"ents "a%e2.Act+al cancellation shall ta?e place after

%ays fro" receipt !y the !+yer of the noticeof cancellation or %e"an% for rescission !y anotarial act an% +pon f+ll pay"ent of thecash s+rren%er $al+e to !+yer2


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2 The ri'ht to sell his ri'hts or assi'n

the sa"e to another person or toreinstate the contract !y +p%atin'the acco+nt %+rin' the 'race perio%an% !efore act+al cancellation of thecontract2

42 The ri'ht to pay in a%$ance anyinstall"ent or f+ll +npai% !alance of

the p+rchase price any ti"e itho+tinterest an% to ha$e s+ch f+llpay"ent of the p+rchase price

annotate% in the certi,cate of title


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.2 The ri'ht to sell his ri'hts or assi'n the

sa"e to another person or to reisntatethe contract !y +p%atin' the acco+nt%+rin' the 'race perio% an% !eforeact+al cancellation of the contract2

2 The ri'ht to pay in a%$ance anyinstall"ent or f+ll +npai% !alance of thep+rchase price anyti"e itho+t interest

an% to ha$e s+ch f+ll pay"ent of thep+rchase price annotate% in thecerti,cate of title co$erin' the property2

Sale of Movables on Installment

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