SECTION 1.

- Conventional Redemption

Art. 1601. Conventional redemption shall take place when the vendor reserves
the right to repurchase the thing sold, with the obligation to comply with the
provisions of Article 1616 and other stipulations which may have been agreed
upon. (1507)

Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of

the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) 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;

(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.

In any of the foregoing cases, any money, fruits, or other benefit to be received
by the vendee as rent or otherwise shall be considered as interest which shall be
subject to the usury laws. (n)

Art. 1603. In case of doubt, a contract purporting to be a sale with right to

repurchase shall be construed as an equitable mortgage. (n)

Art. 1604. The provisions of Article 1602 shall also apply to a contract
purporting to be an absolute sale. (n)

Art. 1605. In the cases referred to in Articles 1602 and 1604, the apparent vendor
may ask for the reformation of the instrument. (n)

Art. 1606. The right referred to in Article 1601, in the absence of an express
agreement, shall last four years from the date of the contract.
Should there be an agreement, the period cannot exceed ten years.

However, the vendor may still exercise the right to repurchase within thirty days
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. (1508a)

Art. 1607. In case of real property, the consolidation of ownership in the vendee
by virtue of the failure of the vendor to comply with the provisions of article 1616
shall not be recorded in the Registry of Property without a judicial order, after
the vendor has been duly heard. (n)

Art. 1608. 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.
(1510)

Art. 1609. The vendee is subrogated to the vendor's rights and actions. (1511)

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. (1512)

Art. 1611. In a sale with a right to repurchase, the vendee of a part of an

undivided immovable who acquires the whole thereof in the case of article 498,
may compel the vendor to redeem the whole property, if the latter wishes to
make use of the right of redemption. (1513)

Art. 1612. If several persons, jointly and in the same contract, should sell an
undivided immovable with a right of repurchase, none of them may exercise this
right for more than his respective share.

The same rule shall apply if the person who sold an immovable alone has left
several heirs, in which case each of the latter may only redeem the part which he
may have acquired. (1514)

Art. 1613. In the case of the preceding article, the vendee may demand of all the
vendors or co-heirs that they come to an agreement upon the purchase of the
whole thing sold; and should they fail to do so, the vendee cannot be compelled to
consent to a partial redemption. (1515)
Art. 1614. 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. (1516)

Art. 1615. If the vendee should leave several heirs, the action for redemption
cannot be brought against each of them except for his own share, whether the
thing be undivided, or it has been partitioned among them.

But if the inheritance has been divided, and the thing sold has been awarded to
one of the heirs, the action for redemption may be instituted against him for the
whole. (1517)

Art. 1616. The vendor cannot avail himself of the right of repurchase without
returning to the vendee the price of the sale, and in addition:

(1) The expenses of the contract, and any other legitimate payments made
by reason of the sale;

(2) The necessary and useful expenses made on the thing sold. (1518)

Art. 1617. If at the time of the execution of the sale there should be on the land,
visible or growing fruits, there shall be no reimbursement for or prorating of
those existing at the time of redemption, if no indemnity was paid by the
purchaser when the sale was executed.

Should there have been no fruits at the time of the sale and some exist at the time
of redemption, they shall be prorated between the redemptioner 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. (1519a)

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
custom of the place where the land is situated. (1520)