Recto Law 4p44h

Article 1484 of the Civil Code provides for the remedies of a seller in contract s of sale of personal property by installments, and incorporates the provisions of Act No. 4122, known as the Installment Sales Law or the Recto Law, which then amended Article 1454 of the Civil Code of 1889. RATIONALE the object of Recto Law was to remedy the abuses committed in connecti on with the foreclosure of chattel mortgages and was meant to prevent mortgagees from seizin g the mortgaged property, buying it at foreclosure sale for a low price and then bringing suit a gainst the mortgagor for a deficiency judgment. Under Article 1484 of the New Civil Code, in a contract of sale of personal prop erty the price of which is payable in installments, the vendor may exercise any of the following R EMEDIES: 1. Exact fulfillment of the obligation, should the buyer fail to pay any install ment; 2. Cancel the sale, should the buyer s failure to pay cover two or more installmen ts; 3. Foreclose the chattel mortgage on the thing sold, if one has been constituted , should the buyer s failure to pay cover two or more installments. The remedies have been recognized as alternative, not cumulative, in that the ex ercise of one would also bar the exercise of the others. They cannot also be pur sued simultaneously. If the seller should foreclose on the mortgage constituted on the thing sold, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. The provisions of Recto Law are applicable to financing transactions derived or arising from sales of movables on installments, even if the underlying contract at issue is a loan because the promissory note has been assigned or negotiated by the original seller.