CORRECT ANSWERS ONLY

CONVENTIONAL REDEMPTION: otherwise known as "right of repurchase" shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to return the price, expenses related thereto and usefule and necessary expenses, and other stipulations which may have been agreed upon.

The sale, with a right of repurchase, is also known as pacto de retro sale.

Ownership: transfers to the vendee-a-retro upon delivery. However, this ownership is not absolute but only conditional. This is because the vendor-a-retro may be able to exercise the right to repurchase and the ownership of the buyer will be terminated. Thus, it can be said that the ownership of the vendee-a-retro is subject to a resolutory condition.

Amount to be paid at the time the right is exercised:

1. The purchase price;

2. The expenses of the contract, and any other legitimate payments made by reason of the sale; and

3. Useful and necessary expenses (e.g., fencing of the land)

Fruits:

At the time of sale

At the time of redemption

Effect

There are visible or growing fruits

There were fruits as well

If purchaser paid for the fruits existing at the time of sale, he shall be entitled to reimbursement or pro-rating of the fruits existing at the time of redemption.

If no indemnity was paid by the purchaser, there is no such liability for reimbursement or pro-rating.

No fruits

Some exist

The fruits shall be prorated between the redemptioner (Seller-a-retro) and the vendee, giving the latter the part corresponding to the time he possessed the land in the last year, counted from the anniversary of the date of the sale.

Case 1: A, B and C inherited, in equal right, the land of their father X. The land has not been partitioned yet. C sold his share to Z at the time the entire land had a fair market value of P1,500,000. In this case,

Case 2: A sold his rural land which does not exceed 1 hectare to X. A's land is bound in the north by B's land, to the west by E's land, to the south by D's land and the east by a river, across the river is C's land, as follows:

Case 3: Aida and Lorna are co-owners of an undivided land. On November 30, 2015, Aida sold her share to Fe. Lorna discovered the sale on January 15, 2020 while she was settling the real property tax of the land. Lorna still exercise the right of redemption?

35. Conventional redemption is a mode of extinguishing a contract of sale and is available in:

A. All contracts of sale

B. A pacto de retro sale

C. A sale secured by a mortgage

D. All of the above

36. The amount to be paid by the seller in exercising the right of repurchase includes all of the following, except:

A. The purchase price

B. Expenses of the contract

C. Useful and necessary expenses

D. Ornamental expenses

37. The following circumstances present in a pacto de retro sale gives rise to the presumption that the sale is actually an equitable mortgage, except:

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

B. When the vendee is in possession as lessee or otherwise.

C. When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed.

D. When the purchaser retains for himself a part of the purchase price.

38. A sold his land to B on Jan. 1, 2021 with a right to repurchase the same until Jan. 1, 2038. A exercised his right to repurchase on Jan. 1, 2030. Which of the following is correct?

A. A can validly exercise the right of repurchase since it is before the agreed date of Jan. 1, 2038.

B. A can validly exercise the right of repurchase since it is within 10 years from the date of sale.

C. A can no longer exercise the right of repurchase since it is beyond the 4 year period set by the law.

D. There is no right of redemption since the period is more than 10 years.

39. In case of multiple redemptioners in the redemption of an adjacent rural land, who shall be preferred:

I. The owner with the smaller lot area

II. The one who first requested redemption

III. The one whose intended use is best justified

A. I only

B. I then II only

C. I, then II, then III

D. III only

40. Betty and Lydia were co-owners of a parcel of land. Last January 1, 2021, when she paid her real estate tax, Betty discovered that Lydia had sold her share to Emma on November 10, 2020. Which of the following is correct?

A. Betty's right to redeem has already prescribed

B. Betty can still redeem the property until January 31, 2021

C. Betty can still redeem the property even until now

D. There is no legal redemption that can take place