Lao-Tabas Law Office and Notary Public

17/08/2026

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15/08/2026

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11/08/2026

RECTO LAW vs MACEDA LAW
Know your rights when buying on installment.

Many Filipinos buy property or vehicles through installment payments. However, when the buyer fails to pay, the seller cannot just do whatever they want. The law provides protection to buyers through two important laws: Recto Law and Maceda Law.

Let us simplify them.

⸻

RECTO LAW (Article 1484 of the Civil Code)
This law applies when you buy personal property on installment, such as:

• Cars
• Motorcycles
• Appliances
• Equipment
• Gadgets

In short, movable property.

If the buyer fails to pay installments, the seller has ONLY THREE OPTIONS under the law:
1. Exact fulfillment
The seller may demand payment of the unpaid installments.
2. Cancel the sale
The seller may cancel the contract if the buyer fails to pay at least two installments.
3. Foreclosure of the chattel mortgage
If the property is mortgaged (for example, a car loan), the seller may foreclose the mortgage.

BUT HERE IS THE IMPORTANT PART:

If the seller chooses foreclosure, the seller can no longer collect any remaining balance from the buyer.

This is called the prohibition on deficiency judgment.

Illustration

You bought a car worth ₱1,000,000.

You already paid ₱300,000, but you stopped paying.

The seller repossessed the car and sold it at auction for ₱500,000.

There is still a balance of ₱200,000.

Under the Recto Law, the seller can no longer collect the ₱200,000 deficiency from the buyer if foreclosure was chosen.

This rule prevents abusive practices by financing companies.

⸻

MACEDA LAW (RA 6552)
Also known as the Realty Installment Buyer Protection Act.

This law applies to real estate sold on installment, such as:

• House and lot
• Condominium units
• Residential lots

The law protects buyers who have already paid installments.

Your rights depend on how long you have been paying.

⸻

If you have paid LESS THAN 2 YEARS

You are entitled to:

• A grace period of 60 days to pay the unpaid installment.
• If you still fail to pay after the grace period, the seller may cancel the contract.

⸻

If you have paid AT LEAST 2 YEARS

You have stronger protection.

You are entitled to:
1. Grace Period

One month grace period for every year of installment payments.

Example:

If you paid for 5 years, you are entitled to 5 months grace period.
2. Cash Surrender Value

If the contract is cancelled, the seller must refund at least 50% of the total payments made.

If you paid more than 5 years, the refund increases by 5% per year, up to 90% maximum.

⸻

Illustration

You bought a house and lot worth ₱2,000,000.

You paid installments for 6 years totaling ₱900,000.

If the contract is cancelled:

Minimum refund:

50% of ₱900,000
= ₱450,000

Since you paid more than 5 years, there may be additional percentages depending on the computation.

This prevents developers from simply cancelling the contract and keeping all payments.

⸻

Simple comparison

Recto Law
Applies to cars, appliances, and other personal property sold on installment

Maceda Law
Applies to real estate sold on installment

Recto Law
Seller cannot collect the remaining balance after foreclosure

Maceda Law
Buyer is entitled to refunds and grace periods

⸻

Important Reminder

Many buyers do not know their rights. Sometimes financing companies or developers threaten buyers with actions that are not allowed by law.

If you bought a car, motorcycle, house, or lot on installment and are experiencing problems with the seller or financing company, it is best to know your legal rights before agreeing to anything.

⸻

For legal consultation and notarial services:
DAVAO LAWYER AND NOTARY PUBLIC

11/08/2026

⚖️ CAN AN ILLEGITIMATE CHILD CHANGE HIS SURNAME FROM HIS FATHER’S TO HIS MOTHER’S?

In Republic v. Capote, G.R. No. 157043, February 2, 2007, the Supreme Court upheld the change of surname of a minor from “Giovanni N. Gallamaso,” his father’s surname, to “Giovanni Nadores,” his mother’s surname.

BRIEF FACTS:

Giovanni was an illegitimate child. Although he had been using his father’s surname since birth, his father had never recognized him and had failed to provide financial, physical, emotional, or spiritual support. Giovanni himself desired to use his mother’s surname. His guardian therefore filed a Petition for Change of Name under Rule 103.

The trial court granted the petition, and the Court of Appeals affirmed. The Republic challenged the ruling, arguing, among others, that the proceeding was not sufficiently adversarial.

SUPREME COURT RULING:

The Supreme Court DENIED the Republic’s petition and allowed the change of surname.

The Court emphasized that an illegitimate child generally uses the surname of the mother. Where the child’s filiation has not been recognized by the father, the child bears the mother’s surname.

In Giovanni’s case, the evidence established that his father had never recognized him, while his mother had always recognized him as her child. The Court held that changing his surname would remove the impression that he had been recognized by his father and would also serve his best interests.

📌 DOCTRINE:

A substantial change of a person’s surname is properly sought through a Petition for Change of Name under Rule 103 of the Rules of Court, not merely as a correction of an entry under Rule 108.

A Rule 103 proceeding must be adversarial. However, “adversarial” does not mean that someone must actually oppose the petition. It is sufficient that interested parties are given legal notice and an opportunity to contest it. Publication of the petition, together with notice to the OSG, satisfies this requirement. The absence of an opposition does not deprive the court of jurisdiction or make the proceeding non-adversarial.

Most importantly, Republic v. Capote recognizes that an illegitimate child who has not been recognized by the father may, upon compliance with Rule 103 and sufficient justification, be allowed to change from the father’s surname to the mother’s surname.

A surname is not merely a label—it is connected to a person’s identity, filiation, status, and even successional rights. For this reason, a change of surname requires judicial authority and observance of the proper procedure.

⚖️ Republic of the Philippines v. Trinidad R.A. Capote
G.R. No. 157043, February 2, 2007

06/08/2026

28/07/2026

27/07/2026

The (SC) has ruled that a sale of land remains valid even if the deed of sale designates a different lot number from what was actually sold, as long as the parties’ true agreement can be clearly shown. The deed may then be corrected to match what the parties actually agreed to.

In a Decision written by Associate Justice Henri Jean Paul B. Inting, the SC’s Third Division upheld the sale of a 491-square-meter parcel of land in Cebu City between buyers Genara and Felipe Abay, Sr. (the Abays) and sellers Crispin Caballes and the heirs of Trinidad Caballes-Gallardo (the Gallardos), despite the mistake in the designation of the lot number in the deed of sale.

The property formed part of the estate of Margarita Lopez, who had nine children, including Crispin and Trinidad.

The Abays visited the site with Crispin and Tomas Gallardo, one of Trinidad’s heirs before buying the property. During the visit, they were showed them the land’s boundaries. Tomas even helped the Abays build a concrete fence around it.

The Abays openly occupied the property for about 20 years until their possession was disrupted when workers of spouses Jacinto and Chiok Ngo Lim Young (the Youngs), who are claiming ownership over the property, entered it, destroyed the fence, and built their own posts.

The Abays discovered that a title over the property had been issued in the Youngs’ name. This prompted them to file a complaint before the Regional Trial Court (RTC) to cancel the title.

The Gallardos challenged this, arguing that the documents the Abays presented referred to a different lot, Lot No. 6036-B, and not the lot they were occupying, which was Lot No. 7. While both lots were located in the same area, they were separate properties and were not beside each other. The Youngs supported the Gallardos’ position and maintained that they were buyers in good faith.

The RTC ruled in favor of the Abays which ruling was reversed by the Court of Appeals (CA). The CA held that the documents presented by the Abays showed that they purchased Lot No. 6036-B and not Lot No. 7, which they claimed to own and possess.

The SC disagreed and reiterated its pronouncements in previous cases upholding the validity of the sale and allowing the correction of a contract to reflect the parties’ true agreement in instances where the deed of sale failed to accurately describe the land intended by the parties.

The SC stressed that a person buys property based on what they see on the ground, such as its boundaries, landmarks, and improvements, and not by its technical lot number. Ordinary buyers cannot be expected to identify property based only on survey descriptions or legal documents.

Under the 𝘊𝘪𝘷𝘪𝘭 𝘊𝘰𝘥𝘦, a written document may be corrected when, because of a mistake, it does not express the parties’ actual agreement.

The SC explained that a contract may be reformed or corrected if: (1) the parties agreed on the transaction; (2) the written document does not express their true agreement; and (3) the error was caused by a mistake, fraud, accident, or unfair conduct.

In this case, all these requirements were present.

Thus, the Court declared deemed reformed the Deeds of Sale and Extrajudicial Settlement and Sale by changing the designation of the property sold from “Lot No. 6036-B” to “Lot 7” and the Abays as absolute owners of such property.

Read the full text of the press release at https://sc.judiciary.gov.ph/?p=169523

Read the full text of the Decision at https://sc.judiciary.gov.ph/266298-spouses-genera-and-felipe-abay-sr-et-al-vs-spouses-jacinto-s-young-et-al/

Copying of this content is subject to the SC PIO’s Credit Attribution Policy: https://sc.judiciary.gov.ph/credit-attribution

15/07/2026

🏛️ Come and visit our office located at :

LOT 2 MANGGA ST. SAN NICOLAS, BUHANGIN, DAVAO CITY ( landmark: M77 hardware, left side if heading to the airport)

☎️ Contact us: 0995-048-2899
💻 email: [email protected]

What services do we offer:

⚖️ Drafting and Notarization of:
Affidavit of Loss
Affidavit of Guardianship
Judicial Affidavit
Complaint Affidavit
Affidavit of Support
Affidavit of Non-Cohabitation
And a lot more

Drafting / and notarization of all kinds of Deeds
-Deed of Sale
-Deed of Donation
-Deed of Assignment
-Last Will and Testament
-Extrajudicial Settlement
-etc

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