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.