bar questions (sale)

7/30/2019 Bar Questions (Sale)

1/66

>

[ bjbj

4 Y 444 $-L !fyyyyyTTT!!!!!!!$#%2(!9TTTTT(!yya!Tyy!T!y , w!0!%%% TTTTTTT(!(!TTT!TTTT%TTTTTTTTT


2/66

: Conditional Sale vs. Absolute Sale (1997)Distinguish between a conditional sale, on the one hand, andanabsolute sale, on the other hand.

SUGGESTED ANSWER:A CONDITIONAL SALE is one where the vendor isgranted the right

to unilaterally rescind the contract predicatedon the fulfillmentor non-fulfillment, as the case may be, of the prescribedcondition. An ABSOLUTE SALE is one where the title to theproperty is not reserved to the vendor orif the vendor is notgranted the right to rescind the contractbased on the fulfillmentor nonfulfillment, as the case may be,of the prescribedcondition.

Contract of Sale vs. Agency to Sell (1999)A granted B the exclusive right to sell his brand of Maong pants

in Isabela, the price for his merchandise payable within60 daysfrom delivery, and promising B a commission of 20%on all sales.

After the delivery of the merchandise to B butbefore he could sell any of them, Bs store in Isabela wascompletely burned without his fault, together with all ofA'spants. Must B pay A for his lost pants? Why? (5%)

SUGGESTED ANSWER:The contract between A and B is a sale not an agency to

sellbecause the price is payable by B upon 60 days fromdelivery even if B is unable to resell it. If B were an agent, heis notbound to pay the price if he is unable to resell it. As abuyer, ownership passed to B upon delivery and, under Art. 1504of the Civil Code, the thing perishes for the owner.Hence, B muststill pay the price.

Contract of Sale; Marital Community Property; Formalities(2006)

Spouses Biong and Linda wanted to sell their house. They found aprospective buyer, Ray. Linda negotiated with Ray forthe sale ofthe property. They agreed on a fair price of P2Million. Ray sentLinda a letter confirming his intention tobuy the property.Later, another couple, Bernie and Elena,offered a similar houseat a lower price of P 1.5 Million. ButRay insisted on buying thehouse of Biong and Linda forsentimental reasons. Ray prepared adeed of sale to be signedby the couple and a manager's check forP2 Million. Afterreceiving the P2 Million, Biong signed the deed

of sale.However, Linda was not able to sign it because shewasabroad. On her return, she refused to sign the documentsayingshe changed her mind. Linda filed suit for nullificationof thedeed of sale and for moral and exemplary damagesagainst Ray.Will the suit prosper? Explain. (2.5%)

ALTERNATIVE ANSWERNo, the suit will not prosper. The contract of sale was In a CONTRACT OF SALE, ownership is transferred toperfected when Linda and


3/66

Ray agreed on the object of thesale and the price [Art. 1475, NewCivil Code]. The consentof Linda has already been given, as shownby her agreementto the price of the sale. There is thereforeconsent on her partas the consent need not be given in anyspecific form. Hence,her consent may be given by implication,especially since she was aware of, and participated in the sale

of the property(Pelayo v. CA, G.R. No. 141323, June 8, 2005).Her action formoral and exemplary damages will also not prosperbecausethe case does not fall under any of those mentioned inArt.2219 and 2232 of the Civil Code.

ALTERNATIVE ANSWER:The suit will prosper. Sale of community property

requires written consent of both spouses. The failure or refusalof Linda to affix her signature on the deed of sale, coupledwithher express declaration of opposing the sale negates anyvalidconsent on her part. The consent of Biong by himself

isinsufficient to effect a valid sale of community property(Art.96, Family Code; Abalos v. Macatangay, G.R. No.155043,September 30, 2004).Does Ray have any cause of action against Biong andLinda? Can healso recover damages from the spouses?Explain. (2.5%)Considering that the contract has already been perfected andtakenout of the operation of the statute of frauds, Ray cancompelLinda and Biong to observe the form required by law in order forthe property to be registered in the name of Ray which can befiled together with the action for the recovery of house [Art.1357 New Civil Code]. In the alternative, hecan recover theamount of Two million pesos (P2,000,000.00)that he paid.Otherwise, it would result in solutio indebiti orunjustenrichment.Ray can recover moral damages on the ground that theactionfiled by Linda is clearly an unfounded civil suit whichfallsunder malicious prosecution{Ponce v. Legaspi, G.R. No.79184, May 6,1992).

Contract to Sell (2001)Arturo gave Richard a receipt which states:

ReceiptReceived from Richard as down payment for my 1995 Toyota Corollawith plate No. XYZ-123..............P50.000.00Balance payable: 12/30/01........ P50 000.00September 15, 2001.(Sgd.) Arturo Does this

receipt evidence acontract to sell? Why? (5%)

SUGGESTED ANSWER:It is a contract of sale because the seller did notreserveownership until he was fully paid.

Contract to Sell vs. Contract of Sale (1997)State the basic difference (only in their legal effects) Betweenacontract to sell, on the one hand, and a contract of sale, onthe


4/66

other.

SUGGESTED ANSWER:the buyer upon delivery of the object to him while in aCONTRACTTO SELL, ownership is retained by the selleruntil the purchaseprice is fully paid. In a contract to sell,delivery of the object

does not confer ownership upon thebuyer. In a contract of sale,there is only one contractexecuted between the seller and thebuyer, while in a contractto sell, there are two contracts, firstthe contract to sell (whichis a conditional or preparatory sale)and a second, the finaldeed of sale or the principal contractwhich is executed afterfull payment of the purchase price.

Contract to Sell; Acceptance; Right of First Refusal (1991)A is the lessee of an apartment owned by Y. A allowed hismarried

but employed daughter B, whose husband works inKuwait, to occupyit. The relationship between Y and Asoured. Since he has noreason at all to eject A, Y, inconnivance with the City Engineer,

secured from the latter anorder for the demolition of thebuilding. A immediately filedan action in the Regional TrialCourt to annul the order andto enjoin its enforcement. Y and Awere able to forge acompromise agreement under which A agreed toa twenty percent (20%) increase in the monthly rentals. Theyfurtheragreed that the lease will expire two (2) years later andthat inthe event that Y would sell the property, either A orhisdaughter B shall have the right of first refusal.TheCompromise Agreement was approved by the court. Six (6)monthsbefore the expiration of the lease, A died. Y sold theproperty tothe Visorro Realty Corp. without notifying B. B then filed anaction to rescind the sale in favor of thecorporation and tocompel Y to sell the property to her sinceunder the CompromiseAgreement, she was given the rightof first refusal which, shemaintains is a stipulation pour atruiunder Article 1311 of theCivil Code. Is she correct?

SUGGESTED ANSWER:B is not correct. Her action cannot prosper. Article 1311requiresthat the third person intended to be benefited mustcommunicatehis acceptance to the obligor before therevocation. There is noshowing that B manifested heracceptance to Y at any time beforethe death of A and beforethe sale. Hence, B cannot enforce anyright under the allegedstipulation pour atrui.

Double Sales (2001)On June 15, 1995, Jesus sold a parcel of registered land toaime.On June 30, 1995, he sold the same land to Jose. Whohas a betterright if: a) the first sale is registered ahead of thesecondsale, with knowledge of the latter. Why? (3%) b) the second saleisregistered ahead of the first sale, with knowledge of thelatter? Why? (5%)

SUGGESTED ANSWER:


5/66

(a) The first buyer has the better right if his sale was firsttobe registered, even though the first buyer knew of thesecondsale. The fact that he knew of the second sale at the timeof his registration does not make him as acting in badfaithbecause the sale to him was ahead in time, hence, hasapriority in right. What creates bad faith in the case of

doublesale of land is knowledge of a previous sale.b) The first buyer is still to be preferred, where the second(2)years, or until 3 June 1973. It is further stated thereinsale isregistered ahead of the first sale but with knowledge of thelatter. This is because the second buyer, who at the timeheregistered his sale knew that the property had already beensoldto someone else, acted in bad faith. (Article 1544, C.C.)

Double Sales (2004)V, owner of a parcel of land, sold it to PP. But the deed

of sale was not registered. One year later, JV soldthe parcelagain to RR, who succeeded to register the deed and

toobtain a transfer certificate of title over the property inhisown name. Who has a better right over the parcel of land,RR orPP? Why? Explain the legal basis for your answer.(5%)

SUGGESTED ANSWER:It depends on whether or not RR is an innocent purchaserforvalue. Under the Torrens System, a deed or instrumentoperatedonly as a contract between the parties and asevidence ofauthority to the Register of Deeds to make theregistration. It isthe registration of the deed or theinstrument that is theoperative act that conveys or affectsthe land. (Sec. 51, P.D. No.1529).In cases of double sale of titled land, it is a well-settled rulethat the buyer who first registers the sale in goodfaithacquires a better right to the land. (Art. 1544, CivilCode).Persons dealing with property covered by Torrenstitle arenot required to go beyond what appears on its face.(Orquiola v. CA 386, SCRA 301, [2002]; Domingo v. Races 401SCRA197, [2003]).Thus, absent any showing that RR knew about, or ought to haveknown the prior sale of the land toPP or that he acted in badfaith, and being first to register thesale, RR acquired a goodand a clean title to the property asagainst PP.

Equitable Mortgage(1991)On 20 December 1970, Juliet, a widow, borrowed fromRomeo

P4,000.00 and, as security therefore, she executed adeed ofmortgage over one of her two (2) registered lots which has amarket value of P15,000.00. The document andthe certificate oftitle of the property were delivered toRomeo.On 2 June 1971,Juliet obtained an additional sum of P3,000from Romeo. On thisdate, however, Romeo caused thepreparation of a deed of absolutesale of the above property,to which Juliet affixed her signaturewithout first reading thedocument. The consideration indicated isP7,000.00. Shethought that this document was similar to the first


6/66

she signed. When she reached home, her son X, after readingtheduplicate copy of the deed, informed her that what shesigned was not a mortgage but a deed of absolute sale. Onthefollowing day, 3 June 1971, Juliet, accompanied by X, wentbackto Romeo and demanded the reformation it, Romeoprepared andsigned a document wherein, as vendee in thedeed of sale above

mentioned, he obligated and boundhimself to resell the land toJuliet or her heirs and successorsfor the same consideration asreflected in the deed of sale(P7,000) within a period of twothatshould the Vendor (Juliet) fail to exercise her right toredeemwithin the said period, the conveyance shall bedeemed absoluteand irrevocable. Romeo did not takepossession of the property. Hedid not pay the taxes thereon.uliet died in January I973 withouthaving repurchased theproperty. Her only surviving heir, her sonX, failed torepurchase the property on or before 3 June 1973. In1975,Romeo sold the property to Y for P50,000.00. Uponlearning of the sale, X filed an action for the nullification ofthe saleand for the recovery of the property on the ground that

theso-called deed of absolute sale executed by his motherwasmerely an equitable mortgage, taking into accounttheinadequacy of the price and the failure of Romeo totakepossession of the property and to pay the taxes thereon.Romeoand Y maintain that there was a valid absolute saleand that thedocument signed by the former on 3 June 1973 was merely a promiseto sell. a) If you were the Judge, wouldyou uphold the theoryof X? b) If you decide in favor of Romeo and Y, would youupholdthe validity of the promise to sell?

SUGGESTED ANSWER:A. I will not uphold the theory of X for the nullification

of the sale and for the recovery of the property on thegroundthat the so-called sale was only an equitable mortgage.Anequitable mortgage may arise only if, in truth, the sale wasone with the right of repurchase. The facts of the case statethatthe right to repurchase was granted after the absolute deedof sale was executed. Following the rule in Cruzo vs.Carriaga(174 SCRA 330), a deed of repurchase executedindependently of the deed of sale where the two stipulations arefound intwo instruments instead of one document, the rightof repurchase would amount only to one option granted bythebuyer to the seller. Since the contract cannot be upheldas acontract of sale with the right to repurchase, Art. 1602 oftheCivil Code on equitable mortgage will not apply. The rulecould

have been different if both deeds were executed on thesameoccasion or date, in which case, under the ruling inspousesClaravall v. CA (190 SCRA 439),the contract may stillbe sustainedas an equitable mortgage, given thecircumstances expressed inArt. 1602. The reserved right torepurchase is then deemedan original intention.B. If I were to decide in favor of Romeoand Y, I would notuphold the validity of the promise to sell, soas to enforce itby an action for specific performance. Thepromise to sell would only amount to a mere offer and, therefore,


7/66

it is notenforceable unless it was sought to be exercised beforea withdrawal or denial thereof.Even assuming the facts given atthe end of the case, there would have been no separateconsideration for such promiseto sell. The contract would at mostamount to an option which again may not be the basis for anaction for specificperformance.

Equitable Mortgage vs. Sale (2005)On July 14, 2004, Pedro executed in favor of Juan a Deedof Absolute Sale over a parcel of land covered by TCT No.6245. It appears in the Deed of Sale that Pedro received X sold aparcel of land to Y on 01 January 2002, paymentfrom JuanP120,000.00 as purchase price. However, Pedroretained the owner'sduplicate of said title. Thereafter, Juan,as lessor, and Pedro,as lessee, executed a contract of leaseover the property for aperiod of one (1) year with a monthly rental of Pl,000.00. Pedro,as lessee, was also obligated to pay the realty taxes onthe property during the period of lease.Subsequently, Pedro filed

a complaint against Juan for thereformation of the Deed ofAbsolute Sale, alleging that thetransaction covered by the deedwas an equitable mortgage.In his verified answer to thecomplaint, Juan alleged that theproperty was sold to him underthe Deed of Absolute Sale,and interposed counterclaims to recoverpossession of theproperty and to compel Pedro to turn over to himtheowner's duplicate of title. Resolve the case with reasons.(6%)

SUGGESTED ANSWER:The complaint of Pedro against Juan should be dismissed. The

instances when a contract

regardless of its nomenclature

may be presumed to be an equitablemortgage are enumerated inArticle 1602 of the Civil Code:"Art. 1602. The contract shall bepresumed to be an equitablemortgage, in any of the followingcases:1When the price of a sale with right to repurchase isunusually

inadequate:2When the vendor remains in possession as lessee orotherwise;3

When upon or after the expiration of the right torepurchaseanother instrument extending the period of redemptionor grantinga new period is executed;4When the purchaser retains for himself a part of thepurchase

price;5When the vendor binds himself to pay the taxes on thething

sold;6


8/66

In any other case where it may be fairly inferred that therealintention of the parties is that the transaction shall securethepayment of a debt or the performance of anyother obligation."In any of the foregoing cases, any money,fruits, or otherbenefit to be received by the vendee as rent or

otherwiseshall be considered as interest which shall be subjectto theusury laws." Article 1604 states that "the provisions ofarticle 1602 shallalso apply to a contract purporting to be anabsolute sale."For Articles 1602 and 1604 to apply, tworequisites mustconcur: 1) the parties entered into a contractdenominated asa contract of sale; and 2) their intention was tosecure anexisting debt by way of mortgage.(Heirs of Balite v. Lim,G.R. No. 152168, December 10, 2004)In the given case, although Pedro retained possession oftheproperty as lessee after the execution of the Deed ofSale,there is no showing that the intention of the parties wastosecure an existing debt by way of mortgage. Hence, thecomplaint

of Pedro should be dismissed.

Immovable Property; Rescission of Contract (2003)and delivery to be made on 01 February 2002. It wasstipulatedthat if payment were not to be made by Y on 01February 2002, thesale between the parties wouldautomatically be rescinded. Yfailed to pay on 01 February 2002, but offered to pay three dayslater, which payment X refused to accept, claiming that theircontract of sale hadalready been rescinded. Is Xs contention correct? Why? 5%

SUGGESTED ANSWER:No, X is not correct. In the sale of immovable property,eventhough it may have been stipulated, as in this case, thatuponfailure to pay the price at the time agreed upon therescissionof the contract shall of right take place, the vendeemay pay,even after the expiration of the period, as long as nodemandfor rescission of the contract has been made upon himeitherjudicially or by a notarial act (Article 1592, New Civilcode).Since no demand for rescission was made on Y,eitherjudicially or by a notarial act, X cannot refuse to acceptthepayment offered by Y three (3) days after the expirationof the period.

ANOTHER SUGGESTED ANSWER:

This is a contract to sell and not a contract of absolutesale,since as there has been no delivery of the land. Article1592 of the New Civil code is not applicable. Instead, Article1595 of the New Civil Code applies. The seller has twoalternativeremedies: (1) specific performance, or (2) rescissionorresolution under Article 1191 of the New Civil code. Inbothremedies, damages are due because of default.

ALTERNATIVE ANSWER:


9/66

Yes, the contract was automatically rescinded upon Ys failureto pay on 01 February 2002. By the express terms of thecontract,there is no need for X to make a demand in orderfor rescission totake place.(Article 1191, New Civil Code, Suria v. IAC 151 SCRA 661 [1987];U.P. v. de los Angeles 35 SCRA 102 [1970]).

Maceda Law (2000)Priscilla purchased a condominium unit in Makati City fromtheCitiland Corporation for a price of P10 Million, payableP3Million down and the balance with interest thereon at 14%perannum payable in sixty (60) equal monthly installmentsof P198,333.33. They executed a Deed of Conditional Sale in whichit is stipulated that should the vendee fail to pay three(3)successive installments, the sale shall be deemedautomaticallyrescinded without the necessity of judicial actionand allpayments made by the vendee shall be forfeited infavor of thevendor by way of rental for the use andoccupancy of the unit and

as liquidated damages. For 46months, Priscilla paid the monthlyinstallments religiously, buton the 47th and 48th months, shefailed to pay. On the 49thmonth, she tried to pay theinstallments due but the vendorrefused to receive the paymentstendered by her. Thefollowing month, the vendor sent her a noticethat it wasrescinding the Deed of Conditional Sale pursuant tothestipulation for automatic rescission, and demanded thatshe vacate the premises. She replied that the contract cannotberescinded without judicial demand or notarial act pursuantto Article 1592 of the Civil Code. a) Is Article 1592 applicable?(3%) b) Can the vendor rescind the contract? (2%)

SUGGESTED ANSWER:a) Article 1592 of the Civil Code does not apply toaconditional sale. InValarao v. CA, 304 SCRA 155

, theSupreme Court held that Article 1592 applies only toacontract of sale and not to a Deed of Conditional Sale wheretheseller has reserved title to the property until full paymentofthe purchase price. The law applicable is the Maceda Law.

SUGGESTED ANSWER:b) No, the vendor cannot rescind the contractunder thecircumstances. Under the Maceda Law, which is thelaw applicable, the seller on installment may not rescind

thecontract till after the lapse of the mandatory grace periodof 30 days for every one year of installment payments, andonly after 30 days from notice of cancellation or demandforrescission by a notarial act. In this case, the refusal oftheseller to accept payment from the buyer on the 49th month wasnot justified because the buyer was entitled to 60 daysgraceperiod and the payment was tendered within thatperiod. Moreover,the notice of rescission served by the selleron the buyer was noteffective because the notice was not by a notarial act. Besides,


10/66

the seller may still pay within 30 daysfrom such notarial noticebefore rescission may be effected. All these requirements for avalid rescission were notcomplied with by the seller. Hence, therescission is invalid.

Maceda Law; Recto Law (1999)

What are the so-called "Maceda" and "Recto" laws inconnectionwith sales on installments? Give the mostimportant features ofeach law. (5%)

SUGGESTED ANSWER:The

MACEDA LAW(R.A. 655) is applicable to sales of immovable property oninstallments. The most importantfeatures are(Rillo v. CA, 247 SCRA 461):(1) After having paid installments for at least two years,thebuyer is entitled to a mandatory grace period of one monthfor

every year of installment payments made, to pay theunpaidinstallments without interest.If the contract is cancelled, theseller shall refund to thebuyer the cash surrender valueequivalent to fifty percent(50%) of the total payments made, andafter five years of installments, an additional five percent (5%)every year butnot to exceed ninety percent (90%) of the totalpaymentsmade.(2) In case the installments paid were less than 2years, theseller shall give the buyer a grace period of not lessthan 60days. If the buyer fails to pay the installments due attheexpiration of the grace period, the seller may cancelthecontract after 30 days from receipt by the buyer of thenoticeof cancellation or demand for rescission by notarial act.TheRECTO LAW(Art. 1484} refers to sale of movablespayable in installments andlimiting the right of seller, in caseof default by the buyer, toone of three remedies: a) exactfulfillment; b) cancel the sale iftwo or more installmentshave notbeenpaid;c) foreclose the chattel mortgage on the things sold,also incase of default of two or more installments, with nofurtheraction against the purchaser.

Option Contract (2002)Explain the nature of an option contract. (2%)

SUGGESTED ANSWER:An OPTION CONTRACT is one granting a privilege to buy or sell

within an agreed time and at a determined price. Itmust besupported by a consideration distinct from the price.(Art. 1479and 1482, NCC)

Option Contract; Earnest Money (1993)LT applied with BPI to purchase a house and lot in QuezonCity,one of its acquired assets. The amount offered wasPl,000,000.00


11/66

payable, as follows: P200,000.00 down payment,the balance ofP800,000.00 payable within 90 days from June1, 1985. BPI acceptedthe offer, whereupon LT drew a check for P200,000.00 in favor ofBPI which the latter thereafterdeposited in its account. OnSeptember 5, 1985, LT wroteBPI requesting extension until October10, 1985 within whichto pay the balance, to which BPI agreed. On

October 5, 1985,due to the expected delay in the remittance ofthe neededamount by his financier from the United States, LTwrote BPIrequesting a last extension until October 30, 1985,within which to pay the balance. BPI denied LTs requestbecauseanother had offered to buy the same propertyforP1,500,000.00. BPI cancelled its agreement with LT andofferedto return to him the amount of P200,000.00 that LThad paid to it.On October 20, 1985, upon receipt of theamount of P800,000.00from his US financier, LT offered topay the amount by tendering acashier's check therefor but which BPI refused to accept. LT thenfiled a complaint againstBPI in the RTC for specific performanceand deposited incourt the amount of P800,000.00. Is BPI legally

correct incanceling its contract with LT?

SUGGESTED ANSWER:BPI is not correct in canceling the contract with LT. InLinaopacio v Court of Appeals and BPI Investment (G. R No.102606,July 3. 1993, 211 SCRA 291)the Supreme Court heldthat the earnest money is part of thepurchase price and isproof of the perfection of the contract.Secondly, notarial orjudicial rescission under Art. 1592 and 1991of the Civil Codeis necessary(Taguba v. de Leon, 132 SCRA 722.)

ALTERNATIVE ANSWER:BPI is correct in canceling its contract with LT but BPI mustdoso by way of judicial rescission under Article 1191 CivilCode.The law requires a judicial action, and mere notice of rescissionis insufficient if it is resisted. The law also providesthatslight breach is not a ground for rescission(Song Fo &Co, vs, Hawaiian Phil Co., 47 Phils. 821),Delay in thefulfillment of the obligation (Art. 1169, Civil Code)is aground to rescind, only if time is of the essence.Otherwise,the court may refuse the rescission if there is a justcause forthe fixing of a period.Perfected Sale; Acceptance of Earnest Money (2002)Bert offers to buy Simeon

s property under the following terms and conditions: P1 millionpurchase price, 10% optionmoney, the balance payable in cash uponthe clearance of theproperty of all illegal occupants. The optionmoney ispromptly paid and Simeon clears the property ofillegaloccupants in no time at all. However, when Berttenderspayment of the balance and ask Simeon for the deedfor absolute sale, Simeon suddenly has a change of heart,MayAdela still exercise her right of redemption? Explain.claimingthat the deal is disadvantageous to him as he hasfound out that


12/66

the property can fetch three time the agreedpurchase price. Bertseeks specific performance but Simeoncontends that he has merelygiven Bert an option to buy andnothing more, and offers to returnthe option money whichBert refuses to accept.B. Will Berts action for specific performance prosper?Explain. (4%)C. May Simeon justify his refusal to proceed with

the sale by the fact that the deal is financially disadvantageousto him?Explain. (4%)

SUGGESTED ANSWER:B. Berts action for specific performance will prosper becausethere was a binding agreement of sale, not just anoptioncontract. The sale was perfected upon acceptance bySimeonof 10% of the agreed price. This amount is in reallyearnestmoney which, under Art. 1482, shall be considered as part of theprice and as proof of the perfection of the contract.(Topacio v. CA, 211 SCRA 291 [1992]; Villongco Realty

v.Bormaheco, 65 SCRA 352 [1975]).C. Simeon cannot justify his refusal to proceed with the saleby the fact that the deal is financially disadvantageous tohim.Having made a bad bargain is not a legal ground forpulling out a biding contract of sale, in the absence of someactionable wrong by the other party(Vales v. Villa, 35 Phil 769 [1916]), and no such wrong has beencommitted by Bert.Redemption; Legal; Formalities (2001)Betty and Lydia were co-owners of a parcel of land. Lastanuary31, 2001, when she paid her real estate tax, Betty discoveredthat Lydia had sold her share to Emma onNovember 10, 2000. Thefollowing day, Betty offered toredeem her share from Emma, butthe latter replied thatBetty's right to redeem has alreadyprescribed. Is Emmacorrect or not? Why? (5%)

SUGGESTED ANSWER:Emma, the buyer, is not correct. Betty can still enforce herrightof legal redemption as a co-owner. Article 1623 of theCivil Codegives a co-owner 30 days from written notice of the sale by thevendor to exercise his right of legalredemption. In the presentproblem, the 30-day period for theexercise by Betty of her rightof redemption had not evenbegun to run because no notice inwriting of the sale appearsto have been given to her by Lydia.

Redemption; Legal; Formalities (2002)Adela and Beth are co-owners of a parcel of land. Beth soldher

undivided share of the property to Xandro, who promptly notifiedAdela of the sale and furnished the latter a copy of the deed ofabsolute sale. When Xandro presented the deedfor registration,the register of deeds also notified Adela of the sale, enclosinga copy of the deed with the notice.However, Adela ignored thenotices. A year later, Xandrofiled a petition for the partition


13/66

of the property. Upon receiptof summons, Adela immediatelytendered the requisiteamount for the redemption. Xandro contendsthat Adela losther right of redemption after the expiration of 30days fromher receipt of the notice of the sale given by him.(5%)

SUGGESTED ANSWER:

Yes, Adela may still exercise her right ofredemptionnotwithstanding the lapse of more than 30 days fromnoticeof the sale given to her because Article 1623 of the NewCivilCode requires that the notice in writing of the sale mustcomefrom the prospective vendor or vendor as the case may be.Inthis case, the notice of the sale was given by the vendeeandthe Register of Deeds. The period of 30 days never tolled.Shecan still avail of that right.

ALTERNATIVE ANSWER:Adela can no longer exercise her right of redemption. Asco-

owner, she had only 30 days from the time she received written

notice of the sale which in this case took the form of acopy ofthe deed of sale being given to her(Conejero v. CA, 16SCRA 775 [1966]). The law does not prescribe any particularform of writtennotice, nor any distinctive method fornotifying the redemptioner(Etcuban v. CA, 148 SCRA 507[1987]).So long as the redemptioner was informed in writing,he has nocause to complain(Distrito v. CA, 197 SCRA 606, 609[1991])In fact, in Distrito, a written notice was heldunnecessary wherethe co-owner had actual knowledge of thesale, having acted asmiddleman and being present when the vendor signed the deed ofsale.

Right of First Refusal; Lessee; Effect (1996)Ubaldo is the owner of a building which has been leasedby Remigio for the past 20 years. Ubaldo has repeatedlyassuredRemigio that if he should decide to sell the building, hewillgive Remigio the right of first refusal. On June 30,1994,Ubaldo informed Remigio that he was willing to sellthebuilding for P5 Million. The following day, Remigio sentaletter to Ubaldo offering to buy the building at P4.5Million.Ubaldo did not reply. One week later, Remigio receivedaletter from Santos informing him that the building has beensoldto him by Ubaldo for P5 Million, and that he will notrenew

Remigio's lease when it expires. Remigio filed an actionagainstUbaldo and Santos for cancellation of the sale, and tocompelUbaldo to execute a deed of absolute sale in his favor,based onhis right of first refusal. a) Will the action prosper?Explain. b) If Ubaldo had given Remigio an option topurchasethebuilding instead of a right of first refusal, will youranswerbe the same? Explain.

SUGGESTED ANSWER:


14/66

No, the action to compel Ubaldo to execute the deed of absolutesale will not prosper. According to Ang Yu v. Court of Appeals(238 SCRA 602) the right of first refusal is notbased oncontract but is predicated on the provisions of human relationsand, therefore, its violation is predicated onquasi-delict.Secondly, the right of first refusal implies that theoffer of the

person in whose favor that right was given mustconform with thesame terms and conditions as those givento the offeree. In thiscase, however, Remigio was offering only P4.5 Million insteadof P5 Million.

ALTERNATIVE ANSWER:No, the action will not prosper. The lessee's right offirstrefusal does not go so far as to give him the power todictateon the lessor the price at which the latter should sellhis property. Upon the facts given, the lessor hadsufficiently complied with his commitment to give the lessee aright of first refusal when he offered to sell the property to

the lesseefor P5 Million, which was the same price he got inselling it toSantos. He certainly had the right to treat thelessee'scounter-offer of a lesser amount as a rejection of hisoffer tosell at P5 Million. Thus, he was free to find anotherbuyerupon receipt of such unacceptable counter-offer (Art.1319.NCC).

SUGGESTED ANSWER:Yes, the answer will be the same. The action will not

prosperbecause an option must be supported by aconsiderationseparate and distinct from the purchase price. Inthis casethere is no separate consideration. Therefore, theoption may be withdrawn by Ubaldo at any time. (Art. 1324, NCC)

Right of First Refusal; Lessee; Effect (1998)In a 20-year lease contract over a building, the lesseeisexpressly granted a right of first refusal should thelessordecide to sell both the land and building. However, thelessorsold the property to a third person who knew about theleaseand in fact agreed to respect it. Consequently, thelesseebrings an action against both the lessor-seller and thebuyer(a) to rescind the sale and (b) to compel specificperformanceof his right of first refusal in the sense that thelessor shouldbe ordered to execute a deed of absolute sale infavor of thelessee at the same price. The defendants contend that

theplaintiff can neither seek rescission of the sale norcompelspecific performance of a "mere" right of firstrefusal. Decidethe case. [5%]

SUGGESTED ANSWER:The action filed by the lessee, for both rescission of

theoffending sale and specific performance of the right offirstrefusal which was violated, should prosper. The ruling inEquatorial Realty Development, Inc. vs. Mayfair Theater, Inc.(264


15/66

SCRA 483),a case with similar facts, sustains both rightsof action becausethe buyer in the subsequent sale knew theexistence of right offirst refusal, hence in bad faith.

ANOTHER ANSWER:

The action to rescind the sale and to compel the right tofirstrefusal will not prosper.(Ang Yu Asuncion vs. CA, 238 SCRA 602).The Court ruled in a unanimous en banc decision thatthe right offirst refusal is not founded upon contract but on aquasi-delictual relationship covered by the principles of humanrelations and unjust enrichment (Art. 19, et seq. CivilCode).Hence the only action that will prosper according tothe SupremeCourt is an "action for damages in a properforum for thepurpose."Right of Repurchase (1993)On January 2, 1980, A and B entered into a contract whereby A

sold to B a parcel of land for and in considerationof P10.000.00. A reserving to himself the right to repurchasethesame. Because they were friends, no period was agreed uponforthe repurchase of the property. 1) Until when must Aexercise hisright of repurchase? 2) If A fails to redeem theproperty withinthe allowable period, what would you adviseB to do for his betterprotection?

SUGGESTED ANSWER:1) A can exercise his right of repurchase within four (4)yearsfrom the date of the contract (Art. 1606, Civil Code).

SUGGESTED ANSWER:2} I would advise B to file an action for consolidation oftitleand obtain a judicial order of consolidation which mustberecorded in the Registry of Property (Art. 1607. Civil Code).

Transfer of Ownership; Non-Payment of the Price (1991)Pablo sold his car to Alfonso who issued a postdated check infull payment therefor. Before the maturity of the check, Alfonsosold the car to Gregorio who later sold it to Gabriel. Whenpresented for payment, the check issued by Alfonso was dishonoredby the drawee bank for the reason that he, Alfonso, had alreadyclosed his account even before he issuedhis check. Pablo sued torecover the car from Gabriel alleging that he (Pablo) had been

unlawfully deprived of it by reasonof Alfonso's deception. Willthe suit prosper?

SUGGESTED ANSWER:No. The suit will not prosper because Pablo was notunlawfullydeprived of the car although he was unlawfully deprived of theprice. The perfection of the sale and thedelivery of the car wasenough to allow Alfonso to have aright of ownership over the car,which can be lawfully transferred to Gregorio. Art. 559 applies


16/66

only to a person who is in possession in good faith of theproperty, and not tothe owner thereof. Alfonso, in the problem,was the owner,and, hence, Gabriel acquired the title to thecar.Non-payment of the price in a contract of sale does notrenderineffective the obligation to deliver. The obligation todeliver athing is different from the obligation to pay itsprice.

EDCA Publishing Co. v. Santos (1990)

Transfer of Ownership; Risk of Loss (1990)D sold a second-hand car to E for P150,000.00 Theagreementbetween D and E was that half of the purchaseprice, orP75,000.00, shall be paid upon delivery of the car toE and thebalance of P75,000.00 shall be paid in five equalmonthlyinstallments of P15,000.00 each. The car wasdelivered to E, and Epaid the amount of P75.000.00 to D.Less than one monththereafter, the car was stolen from E'sgarage with no fault onE's part and was ) VW

X


17/66


18/66


19/66

1


20/66

^_`rRSTgMNOf / D####$$$$%%%%) )

))* *-h~5 B*CJOJPJQJ\ ^JaJph'h~B*CJOJPJQJ^JaJph- h~h~B*CJOJPJQJ^JaJph3h~h~5 B*CJOJPJQJ\ ^JaJph@*W X


21/66


22/66

1


23/66

7_`s SThd-DMgd~NOg0 E###$$$%

%d-DMgd~%%' ))) ***0-~-i.j..j7k7}7O>P>s>>BBBCC'C+Cd-DMgd~ ***h.i.j..i7j7k7|799A;B;N>O>P>r>BBBBCCIIIIwKxKyKKMMMNOO-OOPPPQVVV#V~W WWW@[A[B[_[[[[[aa aaaaaabbbb g'h~B*CJOJPJQJ^JaJph3h~h~5 B*CJOJPJQJ\ ^JaJph- h~h~B*CJOJPJQJ^JaJphI+CCCD}D DEEÈbEEEnHHIII=KxKyKKMMNOOOd-DM

gd~OP PPPQVV$VnVV WWWA[B[_[[[[

\\w\\_à ad-DMgd~ aaaaabbbggg5hhniiiij kkl/lmJoopp+pd-DMgd~gggg iiiiklppp*p8u9u;uùvvvvxxxx{{|{}{{P}Q}R}e}GHIvOPQbno\]ô [ \ ] l d~?@ 3h~h~5 B*CJOJPJQJ\ ^JaJph-h~h~B*CJOJPJQJ^JaJph'h~B*CJOJPJQJ^JaJphI+pjpqrstu9u;uauvvvxxx|{}{ {Q}R}f}E~i~~Z d-DM

gd~ HIwPQc]^p l\ ] m d d-DM gd~ @ASefxgd~d-DMgd~@ARdefwh~h~CJOJQJ^JaJU'h~B*CJOJPJQJ^JaJph3h~h~5 B*CJOJPJQJ\ ^JaJph-h~h~B*CJOJPJQJ^JaJphnever recovered. Is Elegally bound to pay the said unpaid balance of P75.000.00?Explain youranswer.

SUGGESTED ANSWER:Yes, E is legally bound to pay the balance of P75,000.00.

Theownership of the car sold was acquired by E from themoment itwas delivered to him. Having acquired ownership,E bears the riskof the loss of the thing under the doctrine of res perit domino.[Articles 1496. 1497, Civil Code).

21 h:pS/ =! " # $ %


24/66

j6 6 6 6 6 6 6 6 6 vvvvvvvvv6 6 6 6 6 6 >6

6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 66 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 66 6 6 hH6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 66 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 66 2 0@P`p 2 ( 0@P`p 0@P`p0@P`p 0@P`p 0@P`p 0@P`p8XV~ OJPJQJ_HmH

nH sH tH J`J


25/66

S Normal


26/66

dCJ_HaJmH sH tH DA`D


27/66

Default Paragraph FontRiR


28/66

0


29/66

Table Normal4Tl4l a(k (0 No List


30/66

o


31/66

~aBoB


32/66

~apple-converted-spaceo


33/66

~l7o!


34/66

~l6o1


35/66

~l8R@BR


36/66

~0


37/66

Balloon Text


38/66

dCJOJQJ^JaJNoQN


39/66

~0 Balloon Text CharCJOJQJ^JaJoa


40/66

~loq


41/66

~l10o


42/66

~l12o


43/66

~l11D@D


44/66

~ List Paragraph^m$PK ![Content_Types].xmlj0Er(Iw},-j 4 wP-t#b{U TU^hd})*1P'

^W0)T9


45/66

$X3aZ,D0 j~3b~i>3\`?/ [G\ !-Rk.s ..a ?PK? !6_rels/.rels j0


46/66

}Q%v/ C/}( h"O= C?hv= %[xp{_P


47/66

M @}w 7c(EbCA 7KY,e.|,H,lx IsQ}# +!,^$j=GW)E+&8PK8 ! Ptheme/theme/theme1.xmlYOo6w toc'v u-MniP@I}ama[ 4:lGRX^6 >$


48/66

!)O^rC$y@/yH*) UDb`}"qJX^)I`nEp)liV[]1M


49/66

:;!I_TS


50/66

1?E? ?ZBmU/?~xY'y5g&/>GM Ge D3Vq %'#q$8K)fw9:x}rxwr:\TZaG*y8IjbRc|XIu3KGnD1NIBsRuK>V.EL+M2#'fi


51/66

~V


52/66

vl{ u8zH*:(W~JTe\O*tHGHY}KNP*T 9/#A7qZ$*c? qUnwN%O i4=3P1P m


53/66

\\9M2aD];Yt\[x ]}Wr|]g-eW)6-rCS jid DAIqbJ#x6k #ASh&t(Q%p%m &]caSl= X\P 1Mh9MVdDAaVB [fJ P|8


54/66

AV^fH n-

"d>zn > b&2vKyD:,AGm\nzi.uYC6OMf3or$5NHT[XF64T,M0E)`#5XY`;%1Um;R>QD


55/66

DcpU' &LE/p m%]8firS4d7y\`J nIR3U~7+ # m qBiDi*L69mY&iHE =(K&N!V.KeLD{D

vEdeNe(MN9R6 &3(a/DUz


56/66

m< . vp IYf ZY_p[=al-Y}Nc4vfavl'SA8|* u{-0%M07%


57/66

~;8#k'#k2H#kw=[i]\N[i]DlU#k3jU[i][#

k#k"y P!#k@U


58/66

"[i]%#kG%&[i]q[+[i]I+#k [-N_-[i]Y1#k!s2#k`{2#

kW 3#k0M4[i]Suu6#k#Ve7U,}7#kM7[i]F9[i]n;#k1@[i]d;@#k}A#kB#k>ZE[i]J E#kpF#

k)H25I[i]K?vj]tDM#k8 NK4^N[i]O[i]lR R#k,DS[i]WmV#k2jV#kG`W[i]rzY `?


59/66

(][i][i]2w?vj] `?


60/66

n`[i]cXg[i]Mh#kj[i]#k8 Nk#k%l[i]"Yn[i] n#kJLo#

kp4.qRq#k2w#k2w [-tty[i]0z[i]z[i]mn {6|U|#ks~}#kS~Y[@4ijYX@XrX@Xp@ Unknown GGG*Ax Times New Roman5 Symbol3.*Cx Arial7. @ Calibri5..[`)TahomaA $BCambria Math"1h [} K

[} K! 02QHP $P ~ 2!2 xx

IKIK Oh+'0px


61/66

IKNormalIK1Microsoft Office Word@V@@@ [}.+,0


62/66

hp|


63/66

K


64/66

K


65/66

Title


66/66

!"#$%&'()*+,-./0123456789:;?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]_`abcdeghijklmnopqrstuvwxz{|}~

Root Entry F Data^1Table f%WordDocument4SummaryInformation(yDocumentSummaryInformation8 CompObjy

F'Microsoft Office Word 97-2003 DocumentMSWordDocWord.Document.89q

bar questions (sale)

Documents