TITLE I. CHAPTER 3, Secs. 1-3 (OBLICON)

BAR QUESTIONS FROM JOSEPH MENDOZA

QUESTION NO. 1

Sometime in October 2004, Perilio Tandino and the heirs of Julieta Tandino filed a complaint for unlawful detainer, with damages, against petitioner spouses Rogelio and Esther Alvarez. The complaint alleged that the late Julieta Tandino (the spouse of respondent Perilio Tandino and mother of the rest of the respondents) leased a house located in Cebu City to the petitioner spouses. The lease contract was limited to the use and occupancy of the said residential building and did not include the lot on which it was constructed because the said lot was then owned by the National Housing Authority (NHA). Under the contract, the petitioner spouses bound themselves for five years to pay Julieta a monthly rental of P4,000.00 beginning November 22, 2001. However, since November 2003, they failed pay to rent. Thus, as of October 2004, they were in arrears in the amount of P48,000.00. Despite repeated demands by respondent to pay the rentals in arrears and to surrender the possession of the residential building, the petitioner spouses refused to pay the same. The petitioner spouses alleged that Julito became the new owner of the house after acquiring title to the lot beginning November 2003. They claim that Julito collected the rentals in his capacity as a co-owner, and being a son of Julieta (husband of respondent Perilio Tandino), he (Julito) was also entitled to the rent of the subject house.

1. Are the petitioner spouses Alvarez excused from paying the rent because of the change of ownership of the land on which the rented house was built?

2. Would your answer in the above-question be the same in case Julito is the real owner of the house?

QUESTION NO. 2

A married couple obtained a loan from the Agricultural and Credit Bank of P37,000.00 with their land given by way of mortgage. The loan was contracted prior to the war. It was agreed that payment was to be made in Manila. During the war, the debtors paid not in Manila but in Iloilo, and the recipient of the money was not the Iloilo branch of the Agricultural and Credit Bank (for it was then closed) but the Iloilo branch of the Philippine National Bank, which was the depositary in Iloilo of the funds belonging to the Agricultural and Credit Bank. After liberation, the married couple went to Manila, and asked for the cancellation of the mortgage on the ground that the indebtedness of P37,000.00 had already been paid. The creditor refused. Instead of going to court, the married couple again borrowed from the creditor the “additional amount of P10,000.00” and as security, they offered a “second mortgage” on the same land that had been given as security before. Three years later, the married couple filed in court an action to cancel the mortgage on the P37,000.00 prewar loan on the ground of payment.

1. Was the payment of the married couple valid?2. Is the payment valid if the same was made in Iloilo?

QUESTION NO. 3

Purifica Asuncion is a rice dealer/importer. In May 1952, she participated in a public bidding held by the National Rice and Corn Corporation (NARIC). NARIC was looking for someone to supply 20,000 metric tons of Burmese Rice. Asuncion was the lowest bidder at $203.00 per metric ton hence she won the bidding. So a contract was made whereby Asuncion is to deliver the rice supply and NARIC is to pay for the imported rice “by means of an irrevocable, confirmed and assignable letter of credit in U.S. currency in favor of the Arrieta and/or supplier in Burma, immediately.” Asuncion then proceeded to contact her supplier in Burma (Thiri Setkya) and arranged the sale of the 20k metric ton of Burmese Rice, Asuncion promised Setkya that he will be paid by NARIC on August 4, 1952. Asuncion also made a 5% deposit (P200k) as advance payment to Setkya. Meanwhile, NARIC tried to open a letter of credit on the amount of $3,614,000.00 with the Philippine National Bank. PNB agreed to open the letter of credit but only on the condition that NARIC deposits 50% of the said amount. NARIC failed to do this and the letter of credit was not opened when the obligation to pay Setkya became due. Because of this, Asuncion lost the opportunity to profit from the sale as the agreement was eventually forfeited. Her 5% deposit was likewise forfeited pursuant to Burma laws. Consequently, NARIC would also have the Court to hold that the subsequent offer to substitute Thailand rice for the originally contracted Burmese rice amounted to a waiver by Asuncion of whatever rights she might have derived from the breach of the contract.

1. Is Purifica Asuncion entitled to damages?2. Is the National Rice and Corn Corporation (NARIC) liable for damages to Purifica Asuncion?3. Is the National Rice and Corn Corporation (NARIC) exempt from its liability due to the alleged

waiver of rights by Asuncion?