Part THREE

Give direct and concise but complete answers.

Cite authorities, if any.

1. Merle offered to sell her automobile to Violy for P60,000.00. After inspecting the automobile,
Violy offered to buy it for P50,000.00. This offer was accepted by Merle. The next day, Merle offered to
deliver the automobile, but Violy being short of funds, secured postponement of the delivery, promising
to pay the price “upon arrival of the steamer, Helena”. The steamer however never arrived because it
was wrecked by a typhoon and sank somewhere off the Coast of Samar.

1. Is there a perfected contract in this case? Yes bec merle accepted counter offer of violy to buy
auto at p50, there is a meeting of the minds as to the thing and the price which constituted the cos
Why?

2. Is the promise to pay made by Violy conditional or with a term? Why? Yes, payment is
conditioned on the arrival of steamer.

3. Can Merle compel Violy to pay the purchase price and to accept the automobile? Why? YEs
because of the perfected cos

2. Mr. and Mrs. X migrated to the US with all their children. As they had no intention of coming
back, they offered their house and lot for sale to their neighbors, Mr. and Mrs. A (the buyers) who
agreed to buy the property for ₱8 Million. Because Mr. and Mrs. A needed to obtain a loan from a bank
first, and since the sellers were in a hurry to migrate, the latter told the buyers that they could already
occupy the house, renovate it as it was already in a state of disrepair, and pay only when their loan is
approved and released. While waiting for the loan approval, the buyers spent ₱1 Million in repairing the
house. A month later, a person carrying an authenticated special power of attorney from the sellers
demanding that the buyers either immediately pay for the property in full now or vacate it and pay
damages for having made improvements on the property without a sale having been perfected.

a.) What are the buyers’ options or legal rights with respect to the expenses they incurred in improving
the property under the circumstances? (3%) Buyers in good faith, plus necessary expenses of repair –
reimbursement and right of retention, art 546 (-or art547 remove if it can be done so without damage to
principal thing unless person who recovers possession chooses to appropriate with indemnity
b.) Can the buyers be made to immediately vacate on the ground that the sale was not perfected?
Explain briefly. (3%) No.cos was perfected

3. State the basic difference (only in their legal effects) –

(a) Between a contract to sell, on the one hand, and a contract of sale, on the other;

Cos v. Cts

Cos title passes upon delivery automatically if absolute cos, and autom upon fulfilm of cond without a
need of a new or further agreement in a conditional sale ,

vs cts ownership by agreement not to pass upon delivery, but until fulfilm of condition

Effect of delivery – Cts, cos absolute and conditional

Ownership passes – cts upon execution of a deed or doas, vs. Cos conditional upon fulfillm of cond,
absolute ..upon delivery

Cos risk of loss on the buyer vs. Cts risk of loss is on seller

(b) Between a conditional sale, on the one hand, and an absolute sale, on the other hand.

Absolute sale ownership passes upon delivery vs. Cond sale,(ordinary cond., automatic )upon fulfillm
of cond

If there is a reservation of ownership, kind of contract

4. Arthur gave Richard a receipt which states:

“Receipt

Received from Richard as down payment

for my 1995 Toyota Corolla with

plate no. XYZ-123……………………… P50,000.00.

Balance payable: 12/30/01……… P50,000.00

(Sgd.) Arturo”

Does this receipt evidence a contract to sell? Why?

No.does not state consensual agreement that one obligation of one to transfer ownership and deliver
the toyota , and the other to pay therefore a price certain in money or equiv.

5. Nante, a registered owner of a parcel of land in Quezon City, sold the property to Monica under
a deed of sale which reads as follows:

“That for and in consideration of the sum of P500,000.00, value to be paid and delivered to me, and
receipt of which shall be acknowledged by me to the full satisfaction of Monica, referred to as Vendee, I
hereby sell, transfer, cede, convey, and assign, as by these presents, I do have sold, transferred, ceded,
conveyed and assigned a parcel of land covered by TCT No. 2468 in favor of the Vendee.” (possession
only?)

After delivery of the initial payment of P100,000.00, Monica immediately took possession of the
property. Five (5) months after, Monica failed to pay the remaining balance of the purchase price. Nante
filed an action for the recovery of possession of the property. Nante alleged that the agreement was one
to sell, which was not consummated as the full contract price was not paid. Is the contention of Nante
tenable? Why? Yes as the contract states that for a consideration of 500k TO BE PAID by Monica, Nante
will hereby sell. Hemce the sale is conditioned upon full payment of the price. By 1566,essential clauses
… Quiroga caseaWdďe

6. A granted B the exclusive right to sell his brand of Maong pants in Isabela, the price for his
merchandise payable 60 days from delivery, and promising B a commission of 20% on all sales. After the
delivery of the merchandise to B but before he could sell any of them, B’s store in Isabela was
completely burned without his fault, together with all of A’s pants. Must B pay A for his lost pants?
Why? Yes, ownership passed upon delivery of a cos. Resperit domino. The thing persihes with the
owner.

7. In 1972, Luciano de la Cruz sold to Chua Chung Chun, a Chinese citizen, a parcel of land in
Binondo. Chua died in 1990, leaving behind his wife and three children, one of whom, Julian, is a
naturalized Filipino citizen. Six years after Chua’s death, the heirs executed an extrajudicial settlement of
estate, and the parcel of land was allocated to Julian. In 2007, Luciano filed suit to recover the land he
sold to Chua, alleging that the sale was void because it contravened the Constitution which prohibits the
sale of private lands to aliens. Julian moved to dismiss the suit on grounds of pari delicto, laches and
acquisitive prescription. Decide the case with reasons.
Defect of sale to an alien is cured when at the time of the filing of the action, owner is already a
fil.citizen. , it is now owned by julian a naturalozed fil.citizen.

8. Rica petitioned for the annulment of her ten-year old marriage to Richard. Richard hired Atty.
Cruz to represent him in the proceedings. In payment for Atty. Cruz's acceptance and legal fees, Richard
conveyed to Atty. Cruz a parcel of land in Taguig that he recently purchased with his lotto winnings. The
transfer documents were duly signed and Atty. Cruz immediately took possession by fencing off the
property's entire perimeter.

Desperately needing money to pay for his mounting legal fees and his other needs and despite the
transfer to Atty. Cruz, Richard offered the same parcel of land for sale to the spouses Garcia. After
inspection of the land, the spouses considered it a good investment and purchased it from Richard.
Immediately after the sale, the spouses Garcia commenced the construction of a three-story building
over the land, but they were prevented from doing this by Atty. Cruz who claimed he has a better right
in light of the prior conveyance in his favor.

Is Atty. Cruz’s claim correct?

No inscription, 1st in possession by constructive delivery.

9. “X” came across an advertisement in the “Manila Daily Bulletin” about the rush sale of three
slightly used TOYOTA cars, Model 1989 for only P200.000 each. Finding the price to be very cheap and
in order to be sure that he gets one unit ahead of the others, “X” immediately phoned the advertises “Y”
and place an order for one car. “Y” accepted the order and promised to deliver the order unit on July
15, 1989. On the said date, however, “Y” did not deliver the unit. “X” brings an action to compel “Y” to
deliver the unit. Will such action prosper? Give your reasons.

Yes, price of the movable is outside the stt of frauds.hence perfected cos is enforceable.

No. Art 1325, unless it appears otherwise, business advertisements of things for sale are not definite
offers but invitations to make an offer

10. May a person sell something that does not belong to him? Explain. Yes. Ownership is not
required art 1459: thing must be licit, determinate (art 1460) and the vendor have a right to transfer the
ownership thereof atbthe time of delivery.
11. Rod, the owner of an FX taxi, found in his vehicle an envelope containing TCT No. 65432 over a
lot registered in Cesar’s name. Posing as Cesar, Rod forged Cesar’s signature on a Deed of Sale in Rod’s
favor. Rod registered the said document with the Register of Deeds, and obtained a new title in his
name. After a year, he sold the lot to Don, a buyer in good faith and for value, who also registered lot in
his name.

a. Did Rod acquire title to the land? Explain. Yes, buyer in good faith and for value and withoit
knowledge of the defect in the title.

b. Discuss the rights of Don, if any, over the property.

In case of eviction by final j, vendor shall be liable art 1548,

Art 1555. Right to demand

A.return of the value which the thing sold hd aatbthe time of eviction

B.income or fruits, if he has been ordered to return them to the party who won the suit againat him

C. The cost of the suit which caused the eviction, and in the proper case, the cost of the suit brought
agintbthe vendor for eviction.

D.The expenses of the contract if the vendee had paid them.

E. The damages and interests , and ornamental expenses if the sale was made in bad faith

12. Donna pledged a set of diamond ring and earrings to Jane for ₱200,000.00. She was made to
sign an agreement that if she cannot pay her debt within six months, Jane could immediately
appropriate the jewelry for herself. PACTUM COMMISSORIUM.After six months, Donna failed to pay.
Jane then displayed the earrings and ring set in her jewelry shop located in a mall. A buyer, Juana,
bought the jewelry set for ₱300,000.00.

b.) Can Donna redeem the jewelry set form Juana by paying the amount she owed Jane to Juana?
Explain with legal basis. Dapat nagbenta ay ang notary public.

Juliana is buyer in good faith for value from a merchant store. Buyer acquires absolute ownership. Art
1505. Donna has no right to recover.

13. Mahinhin lost her diamond ring when the bus she was riding on was held up by a band of
brigands who divested the passengers of all their money and valuables. The ring found its way to the
Pasanglaan pawnshop, where one of the robbers had pawned it. The pawnshop, in due time, foreclosed
the pledge and sold the ring at public auction to Mayaman, the highest bidder.
Three years after the loss, Mahinhin was able to trace the ring to Mayaman and demanded that the
latter give the ring back to her. Mayaman refused, saying that he had acquired the ring in good faith.

Who was the better right to the ring? Explain.

A.mahinhin, bec she was the lawful owner of the ring.but she has to reimburse mayaman who bought it
in a public sale in good faith.

Art 559 – owner was unlawfully deprived or the thing was lost-has a right to recover it from the one in
possession of the same.

If the possessor of such movable has acquired it in good faith at a public sale, the owner cannot demand
its return without reimbursing the price therefore

(Tip: good faith is presumed, hence if the facts does not show bad faith, you shpuod presume good
faith)

B.mahinhin bec.the ring was lost, but as the owner she is not required to reimburse mayaman.

C.mayaman because she is a purchaser in good faith and she bought itt in a public sale.

14. D sold a second-hand car to E for P150,000.00. The agreement between D and E was that half of
the purchase price, or P75,000.00, shall be paid upon delivery of the car to E and the balance of
P75,000.00 shall be paid in five equal monthly installments of P15,000.00 each. The car was delivered to
E, and E paid the amount of P75,000.00 to D. Less than one month thereafter, the car was stolen from
E’s garage with no fault on E’s part and was never recovered. Is E legally bound to pay the said unpaid
balance of P75,000.00? Explain your answer.

SUGGESTED ANSWER: Yes, E is legally bound to pay the balance of P75,000.00. This being an absolute
sale, the ownership of the car sold was acquired by E from the moment it was delivered to him. Having
acquired ownership, E bears the risk of the loss of the thing under the doctrine of res perit domino.
[Articles 1496. 1497, Civil Code).

Exceptions to res perit domino rule. When would the OWNER not bear the loss

Fortuitous.

1. Art 1504

Case: Lawyer’ coop v Tabora

Atty Tabora bought American Jurisprudence books from Lawyers coop on a conditional sale on
installment basis. Contrct stipulated that in case of loss, buyer bears the loss.. Immediately upon
delivery, they were burned due to a fire incident in his town in Naga City.

SC: Atty Tabora shall bear the loss as clearly stipulated in the contract.

Q: assuming that there was no stipulation in the contract, who bears the loss?

A: Still, Atty Tabora. Under 1504, as an exception to the resperit Domino rule, - if the seller retained
ownership only to secure the fulfillment of the buyer’s obligation (called security title). As in this case.

2. Another exception, not applicable in this case, still Art 1504. If there is delay in the delivery of
thegoods, and the giods were destroyed due to fortuitois event, whoever was at fault resultimg in the
delay in the delivery shall bear the loss.

This is consistent with art 1165. In an obligation to deliver a determinate thing, even if such thing is lost
due to a fortuitous event, if at the time of thee loss he was already in delay, he will still be liable for the
loss of the thing.

Case: in a contract of sale, ownership still with the seller: buyer bought a washing machine from SM.
Buyer will pick up the appliance later.

As appliance was not yet delivered, Ownership is still with SM. But it was destroyed by Ondoy before
pick up.who shall bear the loss?

Ans: Buyer, because delay in the delivery was his fault, hence he will bear the loss, pursuant to art 1165,
by way of exception to the resperit domino rule

Q: if ownership was already with owner like in a constructive delivery, the thing being still in the
possession of the seller. If due to seller’s fault, there was delay in the delivery.

Ans: Here seller bears the loss even if he was no longer the owner.
Q: what mode of deliver transfers ownership even if the thing is still in seller’ possession? Ans.
Constructive deliver by legal formalitiesor by execution of a public instrument which is equivalent to a
delivery of the thing sold where the contrary does not appear from such deed of sale (applies to both
immovable and movable props).

Brevi manu CANNOT be the answer bec.in this mode, buyer or vendee is already in lawful possession
even before the sale, and continues to be in possession in the concept of an owner after the perfected
cos.(e.g. lessee, tapos binili nya yun nirerentahan nya.; or borrower,lagi nya hinihiram kaya binenta na
sa kanya)

Constitutum possessorium.seller CANNOT be in delay.here seller continues to be in possession but no

it was destroyedit was destroyed, but SM bound to deliver the appliance at a scheduled time. It was
destroyed due to Ondoy typhoon flood. Who will bear the loss.

15. If the same thing should have been sold to different vendees, to whom shall the ownership be
transferred?

16. JV, owner of a parcel of land, sold it to PP. But the deed of sale was not registered. One year
later, JV sold the parcel again to RR, who succeeded to register the deed and to obtain a transfer
certificate of title over the property in his own name.

Who has better right over the parcel of land, RR or PP? Why? Explain the legal basis for your
answer?

17. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the latter
about it. In any event, the deed of sale expressly stipulated that X was not liable for hidden defects.
Does Y have the right to demand from X a reimbursement of what he spent to repair the engine plus
damages?