Obligations and Contracts Quiz 1_2015_online Q. A agreed agreed to buy 50 kilos of sugar from B. B deliered one bag of sugar and A !aid "im t"e agreed !rice. # "en A $eig"ed t"e bag of sugar% it $eig"ed only &' k ilos. (f you $ere A% A% $"at $ill you do to !rotect your interest) (f ( $ere A% ( $ill file an a ction against B for damages. *"ose $"o in t"e !erformance of t"eir obligations are guilty of fraud or negligence are liable for damages. (n t"is case% t"e +uantity of sugar t"at B deliered $as less t"an t"an $"at $as agreed agreed bet$een "im and A. *"e deficiency may "a e been due to B,s negligence or to "is intent to defraud A. (n eit"er case% B is liable to A for damages. Obligations and Contracts Quiz 2_2015_online Q. On a stormy day% A agreed to trans!ort B,s la$fully la$fully ac+uired dynamite aboard t"e form er,s truck. B !aid t"e freig"t c"arges. On t"e $ay to B,s $are"ouse% $are"ouse% lig"tning "it t"e truck. *"e dynamite e-!loded% destroying t"e truck and killing t"e drier and "is "el!er. ay B collect from A t"e alue of t"e dynamite) B may collect from A t"e alue of t"e dynamite. #"ile it is true t"at no !erson is liable for loss caused by a fortuitous eent% t"e rule does not a!!ly $"ere t"e nature of t"e obligations re+uires t"e assum!tion of risk. (n t"is case% t"e dynamite $as lost t"roug" a fortuitous eent. *"e obligation to trans!ort dynamite is by its nature risky% and $"en $"en A agreed to trans!ort t"e dynamite% and on a stormy day at t"at% "e assumed t"e risk. By reason of "is assum!tion of t"e risk% A may not inoke t"e act of /od doctrine to free "im of t"e liability for t"e loss. Obligations and Contracts Quiz _2015_online Q. A $as a businessman engaged in t"e "ard$are "ard$are business. A !urc"ased !urc"ased "is goods from B on account. a ccount. C built "is residential "ouse and !urc"ased "is construction materials from A also on account. Because of stiff com!etition% A ceased o!erations% leaing an indebtedness to B in t"e amount of 1 mill ion. #"en # "en A ceased ceased o!erations% C already finis"ed "is "ouse% but $it" an un!aid obligation to A in in t"e amount of 2 million. B co mes to you for adice on "o$ "e $ould be able to collect t"e amount due "im. /ie B your adice. ( $ill adice B to file a collection suit against A% A% get a faorable udgment% and in case t"e udgment debt is not !aid% to file an action against B for t"e collection of t"e udgment debt. *"e Ciil Code !roides t"at t"e creditors% after "aing !ursued t"e !ro!erty in !ossession !ossession of t"e debtor to satisfy t"eir claims% may e -ercise all t"e rig"ts and bring all t"e action of t"e latter for t"e same !ur!ose.
Obligations and Contracts Quiz &_2015_online Q. A and B $ere neig"bors% and t"eir "ouses $ere located adacent to eac" ot"er near a rier. B and "is $ife $ent to t"e 3nited 4tates to isit t"e family of t"eir c"ild. *"ey stayed t"ere for si- mont"s. (n one occasion during t"e si-mont" !eriod% t"e rier oerflo$ed its banks and eroded t"e lots of A and B% suc" t"at a !ortion of t"e lots "ad caed in t"reatening t"e foundations of t"e t$o "ouses. *o !rotect t"e t$o "ouses% A caused to be constructed a concrete dike se!arati se!arating ng t"e lots and t"e rier bank. *"is *"is A did $it"out $it"out t"e kno$ledge kno$ledge of B. #"en B and "is $ife returned returned "ome% A asked B for "is s"are in t"e e-!enses in building t"e dike. B refused to !ay saying t"at t"ere $as no contract bet$een "im and A regarding t"e construction of t"e dike. A sued B for reimbursement of "alf of t"e e-!enses "e incurred in t"e construction of t"e dike. #ill t"e action !ros!er)
6es% t"e action $ill !ros!er. By +uasicontract% a la$ful% oluntary and unilateral act !erformed by one $"ic" benefits anot"er gies rise to t"e obligation on t"e !art t"e latter to reimburse t"e fo rmer for t"e e -!enses incurred by "im. (n t"is case% A,s A,s unilateral act of constructing t"e dike certainly benefited B. Contract Contract is not t"e only source of obligations obligations.. *"ere are many ot"er sources% sources% namely7 la$% +uasi +uasi delict% delict% crime and +uasicontract. Absent a contract and t"ere being neit"er crime nor +uasidelict% a +uasicontractual relation may be forced u!on t"e !arties to aoid a case of unust enric"ment. Consent is !resumed to t"e end t"at t"e reci!ient of benefits or faors resulting from a la$ful% oluntary and unilateral act done by anot"er may not be unustly enric"ed at t"e e-!ense of t"e ot"er. 1
Obligations and Contracts Quiz 5_2015_online Q. *"e lease contract bet$een A% t"e lessor% and B% t"e lessee% oer a comm ercial building !roides t"at 8t"e term of t"e lease s"all be fie years9 and t"at 8t"e lease may be rene$ed as often as t"e lessee $ants it% !roided t"at t"e lessor is gien at least si- mont"s adance notice of t"e lessee,s intent to rene$ t"e lease.9 4i- mont"s before t"e e-!iration of t"e lease% B informed A t"at "e intends to rene$ t"e lease. A told B t"at "e does not intend to rene$ t"e lease. B sued A for s!ecific !erformance to com!el "im to rene$ t"e lease. #ill t"e action !ros!er) 3nder t"e la$% t"e conditions in t"e !erformance of obligations t"at are contrary to !ublic !olicy and !ro"ibited by la$ make t"e obligations oid. (n t"is case% t"e obligation of t"e lessor to rene$ t"e lease is subect to t"e sole $ill of t"e lessee% t"at is% as long as "e $ants t"e lease rene$ed. *"e condition iolates t"e !roision in t"e Ciil Code t"at t"e alidity and com!liance of contracts cannot be left to t"e $ill of any one of t"e !arties. (f t"e obligation is declared alid% it $ould leae to t"e lessee t"e sole !o$er to determine $"et"er t"e lease s"ould continue or not. *"e o$ner $ould neer be able to discontinue it: conersely% alt"oug" t"e o$ner s"ould intend t"e lease to continue% t"e lessee could effectiely t"$art "is intent if "e s"ould !refer to terminate t"e contract by t"e sim!le e-!edient of sto!!ing !ayment of t"e rentals. Quiz ;_2015 4et A ((. Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=. Q. *"e s!ouses A and B $ent to t"e 3nited 4tates to $ork as medical doctors. *"ey left be"ind t"eir minor son C under t"e care and custody of A,s !arents @ and >. @ and > lied in t"e "ouse and lot t"ey "ad ac+uired t"roug" @,s 444 loan $"ic" "ad been fully !aid. A and B "ad been sending money to @ for C,s legal su!!ort. C $as to oin "is !arents $"en "e $ould graduate from "ig" sc"ool. #"en C $as in t"ird year "ig" sc"ool at age 1;% bot" @ and > died% one after t"e ot"er. @ and >,s c"ildren% % / and $anted to sell t"e "ouse and lot% and asked you for adice $"et"er t"ey could do it. Can t"ey do it) *"ey can do it. 3nder t"e la$. a family "ome may be sold by t"e o$ners t"ereof $it" t"e $ritten consent of t"e !erson $"o constituted t"e same and "is s!ouse and t"e maority of t"e beneficiaries. (n t"is case% % / and became t"e coo$ners of t"e !ro!erty u!on t"e deat" of t"eir !arents% and t"ere are no beneficiaries from $"om consent may be obtained. (f %/% and are beneficiaries% t"e "ae already consented to t"e sale of t"e !ro!ertyD. C is not a beneficiary. or a minor to be a considered a beneficiary% "e must be de!endent for "is legal su!!ort u!on t"e !erson or !ersons $"o constituted t"e family "ome. C is de!endent u!on @ and >% or t"eir estates% for "is legal su!!ort but from "is !arents.
Quiz ;_2015 4et B ((.
Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=. Q. ig" 4c"ool conducted an enrollment drie for t"e ensuing sc"ool year. *"e enrollment cam!aign consisted of isitation of sc"ools in $"ic" !ros!ectie enrollees $ere studying. (n one of t"e cam!aigns% t"e brakes of t"e ee! olunteered by a !arent of a student and drien by t"e !arent malfunctioned and t"e ee! "it and killed a c"ild. *"e !arents of t"e c"ild sued ig" 4c"ool for damages for t"e deat" of t"eir c"ild. #ill t"e action !ros!er) 6es% t"e action $ill !ros!er. *"e Ciil Code !roides t"at t"at an em!loyer is liable for t"e damages caused by "is em!loyees acting $it"in t"e sco!e of t"eir assigned tasks. (n t"is case% t"e !arent $as negligent in maintaining t"e brakes of "is ee!. *"e defectie brakes made t"e drier lose control of t"e ee! causing it to "it and killed t"e c"ild. *"e negligence of t"e !arent $as t"e !ro-imate cause of t"e deat". *"e !ro-imate cause of an inury is t"at cause% $"ic"% in natural and continuous se+uence% unbroken by any efficient interen ing cause% !roduces t"e inury% and $it"out $"ic" t"e result $ould not "ae occurred. *"e !arent is considered an em!loyee of t"e sc"ool acting $it"in t"e sco!e of "is assigned task in t"e sense t"at "is act in driing t"e ee! $as in furt"erance of t"e interest of t"e sc"ool. *"e clause 8$it"in t"e sco!e of t"eir assigned tasks9 for !ur!oses of raising t"e !resum!tion of liability of an em!loyer% includes any act done% in furt"erance of "is interest.
Quiz '_2015 4et A 2
((.
Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=.
Q. ae t"e "eirs of an absentee% $"o under a !robated $ill $as gien a legacy but $"o at t"e time t"e $ill $as admitted to !robate $as still absent% any rig"t oer t"e legacy) 6es% t"ey "ae rig"t oer t"e legacy% if t"ey can !roe t"at at t"e time of t"e testator,s deat"% t"e absentee $as alie. 3nder t"e la$% $"oeer claims a rig"t !ertaining to a !erson $"ose e-istence is not recognized must !roe t"at "e $as liing at t"e time "is e-istence $as necessary in order to ac+uire said rig"t. An absentee,s "eir is t"e claimant referred to in t"e la$ because "e $ould in"erit or $ould "ae in"erited t"e legacy u!on t"e deat" of t"e absentee. *"e "eirs $ill lose t"eir rig"t to !roe t"e absentee,s e-istence only after t"e la!se of ten years t"e !rescri!tie !eriod for t"e rig"t of action deried from la$D from t"e time of t"e testator,s deat". Quiz '_2015 4et B ((. Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=. Q. A built a !erimeter fence around "is titled !ro!erty. *"e fencing resulted in t"e closure of a !assage$ay used by t"e tenants of B,s a!artment. B filed a com!laint for legal easement of road rig"t of $ay and damages against A. #ill t"e action for damages !ros!er)
*"e action for damages $ill not !ros!er. 3nder t"e !rinci!le of damnum abs+ue inuria% a la$ful e-ercise of rig"t may cause damage or loss to anot"er but t"ere is no inury. (n t"is case% A fenced "is titled !ro!erty. e "as all t"e rig"t to do t"at. *"e Ciil Code !roides t"at eery o$ner may enclose or fence "is land or tenements $it" $alls% ditc"es or "edges. *"e fact t"at B "as filed a com!laint for legal easement of road rig"t of $ay s"o$s t"at "e still "as no rig"t to use a !art of A,s !ro!erty%
Obligations and Contracts Quiz ;_2015_online Q. Bank granted a 5 million loan to B !ayable in fie years $it" interest at t"e rate of 1E !er mont". After t"ree years% B $anted to !ay t"e $"ole balance of t"e loan% so "e offered to !ay t"e bank 5 million% !lus interest for t"ree years *"e bank refused t"e offer. B filed an action against t"e bank to com!el it to acce!t "is !ayment. # ill t"e action !ros!er) *"e action $ill not !ros!er. #"eneer in an obligation a !eriod is designated% it is !resumed to "ae been establis"ed for t"e benefit of bot" creditor and t"e debtor% unless from t"e tenor of t"e same or ot"er circumstances it s"ould a!!ear t"at t"e !eriod "as been establis"ed in faor of one or of t"e ot"er. (n t"is case% t"e designation of t"e !eriod of f ie years in $"ic" t"e loan is to be !aid is !resumed to "ae been agreed u!on to benefit bot" B and Bank F for B% to enable "im to use t"e money for suc" lengt" of time% for Bank% to enable it to earn a bigger amount of interest. *o cut s"ort t"e !eriod is to diminis" t"e interest t"at t"e bank $ould earn in t"e transaction. *"ere is not"ing in t"e facts of t"e case t"at suggest t"at t"e !eriod $as agreed u!on in faor of B. Obligations and Contracts Quiz '_2015_online Q. 3nder t"e contract "e "as entered into $it" G is"ing Cor!oration% 6% a bangus !roducer% $ould delier to t"e cor!oration 50%000 tons of bangus !er year for fie years. Because of a strong ty!"oon $"ic" destroyed most of "is fis" !ens% 6 failed to delier bangus to t"e cor!oration for t$o years. *"ree mont"s before t"e end of t"e fift" year from t"e e-ecution of t"e contract% A a!!roac"ed t"e general manager of t"e cor!oration to negotiate for a ne$ contract bet$een "im and t"e cor!oration. *"e manager told "im t"at t"e contract $ould not end at t"e end of t"e year because A still "ad t"e obligation to delier bangus for t$o years. (s t"e manager correct) *"e manager is not correct. 3nder t"e la$% no !erson is res!onsible for t"ose eents $"ic" could not be foreseen% or $"ic"% t"oug" foreseen% $ere ineitable. (n t"is case% 6 $as not able to delier bangus for t$o years because of ty!"oon% an eent $"ic" may% under !resent tec"nology% "ae been foreseen but $as ineitable. *"is rule is subect to certain e-ce!tions none of $"ic" is obtaining in t"is case. is failure to !erform "is obligation during t"is !eriod is% t"erefore% e-cused. *"e non!erformance being 3
e-cused% G is"ing Cor!oration cannot later on demand its fulfillment. #"at t"e la$ "as $ritten off cannot be demanded and re+uired. *o allo$ t"e cor!oration to demand !erformance $ould in effect e-tend t"e !eriod of t"e obligation. Quiz H_2015 4et A ((. Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=. Q. *"e la$ creating G Bank% a goernment bank% !roides t"at !ro!erties deliered to t"e bank as securities for loans are not subect to attac"ment or e-ecution% unless t"e obligation of t"e borro$er is fully !aid. A obtained a faorable udgment against B $"o "ad an e-isting loan $it" G Bank secured by "is commercial lot. Armed $it" a $rit of e-ecution% t"e s"eriff leied on t"e commercial lot of B in !re!aration for t"e sale of t"e lot on e-ecution and caused t"e ley on e-ecution entered at t"e back of t"e certificate of title of t"e lot. G Bank sued A and t"e s"eriff for t"e cancellation of t"e e ntry. #ill t"e action !ros!er) 6es% t"e action $ill !ros!er. Acts e-ecuted against t"e !roisions of mandatory or !ro"ibitory la$s are oid% e-ce!t $"en t"e la$ itself aut"orizes t"eir alidity. (n t"is case% t"e la$ creating G Bank !ro"ibits !ro!erties mortgaged to t"e bank to secure obligations incurred in its faor. 4uc" la$ is an e-am!le of a mandatory and !ro"ibitory la$. *"e act of t"e s"eriff in leying against t"e commercial bank to satisfy a udgment debt iolates suc" la$. *"e !ur!ose of t"e la$ is to !rotect t"e financial condition of t"e bank% een against official acts of officers of ot"er goernment agencies. *"e facts of t"e case does not s"o$ t"at t"e act of t"e s"eriff is an e-ce!tion to t"e rule. Quiz H_2015 4et B ((. Ans$er t"e follo$ing +uestion t"e C<(= $ay. #=(*> 6O3= A?4#>= O? A 4>A=A*> A>=. Q. G% a citizen of Country A% but domiciled in t"e "ili!!ines% "ad a legitimate daug"ter 6 and an illegitimate daug"ter I. (n "is $ill% G gae to I a !arcel of land alued at 100%000.00 and to 6 t"e remainder of t"e estate alued at 10 million. *"e ciil code of Country A contains t"e follo$ing !roisions% among ot"ers7 a ) 8A testator "as t"e rig"t to dis!ose of " is !ro!erty in t"e $ay "e desires.9 b ) 8(ntestate and testamentary successions are goerned by t"e la$ of t"e country $"ere t"e !ro!erties are
found.9 3nder "ili!!ine la$% an illegitimate c"ild is entitled to one"alf of t"e s"are of a legitimate c"ild. I filed a com!laint against 6 and t"e estate of G for t"e !artition of t"e estate according to "ili!!ines la$. #ill t"e action !ros!er) A. 6es% t"e action $ill !ros!er. *"e Ciil Code !roides t"at intestate and testamentary successions are goerned by t"e national la$ of t"e decedent . (n t"is case% G t"e decedent is a foreigner% "ence% t"e renoi doctrine in !riate international la$ a!!lies. 3nder t"e renoi doctrine% t"e la$ to be a!!lied is t"e conflict of la$s rule of "is country $"ic" state t"at 8J(Kntestate and testamentary successions are goerned by t"e la$ of t"e country $"ere t"e !ro!erties are found9. As t"e !ro!erties are located in t"e "ili!!ines% t"e "ili!!ine internal la$ on succession F $"ic" !roides t"at an illegitimate c"ild is entitled to one"alf of t"e s"are of a legitimate c"ild F a!!lies in t"e distribution of G,s estate. *"is is t"e la$ to be a!!lied% not t"e "ili!!ine conflicts of la$s rule in order to aoid an international football of la$s. ence% t"e action of I $ill !ros!er as s"e is entitled to one"alf of $"at 6 is entitled. Obligations and Contracts Quiz H_2015_online Q. A leased "is a!artment to B and granted "im a rig"t of first refusal. 3nder a notarized deed of sale% A sold "is a!artment to C instead. o$eer% C $as not able to take !ossession of t"e !ro!erty because B filed an action against A and C for t"e rescission of t"e sale and continued to "ae !ossession of t"e !ro!erty. After t"e filing of t"e action B $it""eld !ayment of t"e rental. Assuming t"at t"e sale is rescinded% may C collect from B t"e $it""eld rentals) ?o% C may not collect t"e $it""eld rentals. e "as not become t"e o$ner of t"e a!artment. 3nder t"e la$% t"e endee ac+uires o$ners"i! of t"e !ro!erty sold only u!on t"e deliery of t"e t"ing to "im. (n t"is case% C "as not taken actual !ossession of t"e a!artment% "ence t"ere $as no deliery. #"ile t"e e-ecution of a !ublic instrument of sale is recognized by la$ as e+uialent to t"e deliery of t"e t"ing sold% suc" constructie or symbolic deliery% being merely !resum!tie% is deemed negated by t"e failure of t"e endee to take actual !ossession of t"e land sold. *"e e-ecution of t"e instrument% as a form of constructie deliery% is a legal fiction t"at "olds true only $"en t"ere is no im!ediment t"at may !reent t"e !assing of t"e !ro!erty from t"e "ands of t"e endor into t"ose of t"e endee. #"en t"ere is suc" im!ediment% fiction yields to realityLt"e deliery "as not been effected.
4
4omeone inoked t"e rule t"at t"e creditor "as a rig"t to t"e fruits of t"e t"ing from t"e time t"e obligation to delier it arises. C may not inoke t"is rule because of a su!erior rule7 rescission creates t"e obligation to return t"e t"ings $"ic" $ere t"e obect of t"e contract% toget"er $it" t"eir fruits% and !rice $it" its interests. (t is A% t"erefore% $"o is entitled to t"e rentalsD. Ciil
Q. (n t"e boundary dis!ute bet$een G and 6% t"e trial court ordered t"e !arties to conduct a oint surey of t"e t$o lots. G and 6 agreed t"at t"ey $ould abide and "onor t"e findings and recommendations of t"e surey team. After t"e surey% G obected to t"e findings of t"e surey team% alleging discre!ancy and alterations in t"e lot data com!utations used in t"e surey $"en com!ared to data found in @>?= records. (noking G,s agreement to "onor and abide by t"e findings of t"e surey team% t"e trial court a!!roed t"e surey results of t"e surey team. (s t"e trial court correct) ?o t"e trial court is not correct. 3nder t"e la$% res!onsibility arising from fraud is demandable in all obligations: any $aier of an action for future fraud is oid. (n t"is case% A and 6% in agreeing to abide by and "onor t"e findings and recommendations of t"e surey team% $ere in effect $aiing t"eir rig"t of action against t"e ot"er arising from fraud t"at may be committed against t"em in t"e course of t"e surey. As it turned out% t"ere $ere some discre!ancies and alterations in t"e lot data com!utations used in t"e surey $"ic" could "ae been t"e result of fraud. *"e $aier cannot be taken to coer allegations of fraud. Ciil
Q. 3nder its su!erised credit financing sc"eme% G Bank granted loan to 6 Cor!oration for t"e deelo!ment of t"e latter,s beac" resort. *"e loan $as secured by a real estate mortgage. G Bank $it""eld a !ortion of t"e loan !ending com!letion of t"e $orks in t"e resort. #"en G Cor!oration failed to com!lete t"e $orks% des!ite demands made by it% G Bank foreclosed t"e mortgage. (s G Bank correct in foreclosing t"e bank) ?o% G Bank is not correct. (n reci!rocal obligations% neit"er !arty incurs in delay if t"e ot"er does not com!ly $it" $"at is incumbent u!on "im. (n t"is case% G Bank "as not com!lied $it" its obligation to release to 6 Cor!oration t"e full amount of t"e loan. A mortgage remains an accessory contract de!endent on t"e !rinci!al obligation% suc" t"at enforcement of t"e mortgage contract $ill de!end on $"et"er or not t"ere "as been a iolation of t"e !rinci!al obligation. (n a contract of loan% t"e lender s"ould !erform its obligation t"e release of t"e full loan amount before it could demand t"at t"e borro$er re!ay t"e loaned amount. (n ot"er $ords% t"e borro$er $ould not incur in delay before t"e lender fully !erformed its reci!rocal obligation. (Development Bank of the Philippines vs. Guariña Agricultural and Realty Development Corporation G.R. !o. "#$%&' an. "& )$"*+
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Q. A "ad t$o loan accounts $it" G Bank7 ?N1 $"ic" bears interest at ;E !er annum and secured by a real estate mortgage and ?N2 $"ic" is unsecured but bears interest at 1HE !er annum. Bot" accounts are due and un!aid. G Bank foreclosed t"e mortgage securing ?N1. Being t"e "ig"est bidder% G bank $as t"e !urc"aser of t"e !ro!erty in t"e auction sale. A $rote G Bank directing it to a!!ly t"e !roceeds of t"e sale to ?N2. G Bank insisted to a!!ly it to ?N1. *o $"ic" account $ill t"e !roceeds be a!!lied) *"e !roceeds $ill be a!!lied to ?N2. e $"o "as arious debts of t"e same kind in faor of one and t"e same creditor% may declare at t"e time of making t"e !ayment% to $"ic" of t"em t"e same must be a!!lied. (n t"is case% A "ad t$o accounts $it" G Bank and "e e-!ressed "is intention to $"ic" account t"e !roceeds of t"e auction sale are to be a!!lied. *"e !roceeds "ae to be a!!lied to t"at account. *"e a!!lication of t"e !roceeds from t"e sale of a mortgaged !ro!erty is an act of !ayment% "ence% t"e rules on a!!lication of !ayments a!!ly. *"e number one rule in t"e a!!lication of !ayments is t"at t"e !ayment is to be a!!lied to t"e account c"osen by t"e debtor.
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Q. A and B $ere solidarily liable to G on t"e loan of H00%000.00 granted by G to A. *"e obligation $as secured by a c"attel mortgage oer a car o$ned by B. #"en t"e obligation $as not !aid at maturity% G foreclosed t"e mortgage and t"e car $as auctioned for ;00%000.00. G sued A and B for t"e deficiency of 200%000.00. (f you $ere B% $"at defenses or action $ill you inter!ose or take to !rotect your interest) *"ere are no defenses t"at ( can inter!ose: ( $ill file in t"e same action a crossclaim against A. 3nder t"e la$% a solidary debtor may% in actions filed by t"e creditor% aail "imself of all defenses $"ic" are deried from t"e nature of t"e obligation and of t"ose $"ic" are !ersonal to "im% or !ertain to "is o$n s"are. #it" res!ect to t"ose $"ic" !ersonally belong to t"e ot"ers% "e may aail "imself t"ereof only as regards t"at !art of t"e debt for $"ic" t"e latter are res!onsible. (n t"is case% neit"er of t"e defenses !roided by la$ is aailable to me. As solidary debtor% ( am res!onsible for t"e $"ole debt as A is. But ( am not $it"out remedy t"oug". 3nder t"e la$% a solidary debtor $"o !ays t"e debt may claim from "is codebtors t"eir s"are of t"e debt. *o enforce my substantie rig"t of reimbursement% ( s"ould file a crossclaim against my codefendant A for my !ayment of of ;00%000.00 $"ic" re!resents t"e !urc"ase !rice of my car% and for t"e remaining 200%000.00% if ( $ill be made to !ay t"e $"ole of it. Ciil
Q. (n consideration of t"e loan in t"e amount of 1 million granted to "im by B% A !romised to !ay B t"e amount in one year $it" interest at 12E !er annum or to sell to "im "is residential "ouse at t"e !rice of 1 million. Before t"e term ended% A became insolent and $as unable to !ay t"e loan. #"en C% anot"er creditor of A% kne$ t"at A $as about to e-ecute a deed of sale oer t"e "ouse in faor of B% C filed a com!laint against A seeking a udgment to sto! t"em from !roceeding $it" t"e transaction and to re+uire B instead to s"are $it" t"e ot"er creditors in t"e remaining assets of A. #ill t"e action !ros!er) ?o% t"e action $ill not !ros!er. 3nder t"e la$% t"e debtor in an alternatie obligation loses t"e rig"t of c"oice $"en among t"e !restations $"ereby "e is alternatiely bound% only one is !racticable. (n t"is case% A "as t"e alternatie obligation to !ay B t"e loan or to sell to "im "is "ouse. Of t"e t$o !restations% it is only t"e second one t"at is !racticable because t"e first one can no longer be done as A "ad become insolent. A "aing t"e obligation to make t"e sale of t"e !ro!erty in faor of B% C cannot sto! t"e transaction.
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Q. On @ecember 15% 201& A e-ecuted a !romissory note in faor of B in t"e follo$ing tenor7 ,-or value received promise to pay B or order the sum of P" million on Decem/er "& )$"& 0ith interest at the rate of ")1 per annum.2 On anuary 15% 2015 A tendered 1 million to B in !ayment of "is obligation. #"en B refused to receie t"e money% A filed a com!laint against B for consignation and deliered t"e money to t"e court. #ill t"e action !ros!er) ?o% t"e action $ill not !ros!er. or consignation to be !ro!er% t"e refusal of t"e creditor to acce!t t"e !ayment must be $it"out ust cause. (n t"is case% t"e refusal on t"e !art of B to acce!t t"e !ayment is ust because it $as tendered before t"e arrial of t"e day certain. #"eneer in an obligation a !eriod is designated% it is !resumed to "ae been establis"ed for t"e benefit of bot" creditor and t"e debtor% unless from t"e tenor of t"e same or ot"er circumstances it s"ould a!!ear t"at t"e !eriod "as been establis"ed in faor of one or of t"e ot"er. *"ere is not"ing in t"e facts of t"e case% t"at t"e !eriod designated $as establis"ed to faor A.
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Q. G boug"t from 6 otors a car for M;0%000.00 !ayable in 2& e+ual installments% t"e first installment to fall due on anuary 1% 201. G,s obligations for 201 $ere secured by a surety bond issued by I 4urety Com!any and t"ose for 201& by 4urety Com!any. G failed to !ay t"e installments due for October% ?oember and @ecember for t"e year 201. G resumed !ayment on anuary 1% 201& until @ecember 1% 201&. 6 otors demanded from I 4urety Com!any !ayment for t"e October% ?oember and @ecember 201 installments. *"e surety com!any countered t"at t"ose obligations "ad already been !aid by G% "ence% it "ad no more obligation to 6 otors. (s I 4urety Com!any correct) I 4urety Com!any is not correct.
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#"ile t"e Ciil Code gies to t"e debtor t"e rig"t to !roide for t"e a!!lication of !ayments $"ere "e "as arious debts of t"e same kind in faor of one and t"e same creditor% suc" rig"t must be e-ercised at t"e time "e effects t"e !ayment% and in t"e absence or failure of t"e debtor to e-ercise suc" rig"t% t"e creditor is em!o$ered to make t"e a!!lication of t"e !ayments made by t"e debtor as "e deems it fit. (n t"is case% G at t"e time "e made t"e !ayments did not e-!ress to $"at obligations t"e !ayments $ere to be a!!lied. And because G did not e-ercise "is rig"t% 6 otors a!!lied all t"e !ayments G made in 201& to "is 201& obligations leaing t"e installments fo r October% ?oember and @ecember 201 still un!aid.
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Q. A offered to sell "is car to B for 500%000.00 and gae "im ten days to acce!t t"e offer. After fie days% B came back and acce!ted A,s offer. A $ould no longer sell "is car. B filed a com!laint against A to com!el "im to sell "is car to "im. #ill t"e action !ros!er) *"e action $ill !ros!er. #"en t"e offerer "as allo$ed t"e offeree a certain !eriod to acce!t% t"e offer may be $it"dra$n at any time before acce!tance by communicating suc" $it"dra$al% e-ce!t $"en t"e o!tion is founded u!on a consideration% as somet"ing !aid or !romise. (n t"is case% B $as gien a !eriod of ten days $it"in $"ic" to acce!t t"e offer% and "e acce!ted it $it"in t"e !eriod before A,s $it"dra$al of t"e offer. A bilateral contract to sell and to buy $as created u!on acce!tance. ence% A can be com!elled to sell t"e car to A. Ciil
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Q. @uring "is lifetime% G sold a !arcel of land to "is daug"ter 6 for 100%000.00. *"e market alue of t"e !ro!erty $as 00%000.00. After t"e deat" of G% t"e ot"er c"ildren of G filed a com!laint against 6 for t"e annulment of t"e t$o deeds of sale on t"e ground of inade+uacy of !rice. *"e trial court ordered t"e annulment of t"e sale. (s t"e court correct) *"e court is not correct. (nade+uacy of consideration does not itiate a contract% unless it is !roen t"at t"ere $as fraud% mistake or undue influence. (n t"is case% t"ere is no t"ing to s"o$ t"at t"e transaction $as attended by $as fraud% mistake or undue influence. *"e !rice is not too inade+uate as to s"ock t"e conscience of man. #"ile t"e !rice is only a t"ird of t"e market alue of t"e !ro!erty% filial loe must be taken into account.
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Q. On t"e basis of a deed of sale $it" rig"t to re!urc"ase% A sued B% an illiterate% for consolidation of title% alleging t"at B failed to re!urc"ase t"e !ro!erty $it"in t"e agreed !eriod. (n ans$er to t"e com!laint% B alleged t"at "e affi-ed "is signature to t"e deed t"roug" fraud in t"at "e $as made to understand by A before "e signed t"e document t"at t"e transaction $as a loan secured by "is land. @uring t"e trial% A !resented in eidence t"e deed of sale $it" rig"t to re!urc"ase and "e testified t"at B "ad not !aid t"e re!urc"ase !rice. A for "is !art testified t"at "e "ad not gone to sc"ool and $as illiterate. e ado!ted and offered in eidence t"e deed s"o$ing t"at "is !ur!orted signature $as a t"umb mark. @ecide t"e case. ( $ill dismiss t"e com!laint.
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#"en one of t"e !arties is unable to read% or if t"e contract is in a language not understood by "im% and mistake or fraud is alleged% t"e !erson enforcing t"e contract must s"o$ t"at t"e terms t"ereof "ae been fully e-!lained to t"e former. (n t"is case% B in "is ans$er alleged fraud% but A failed to !roe t"at no fraud attended t"e signing of t"e contract. B "aing alleged fraud% t"e burden $as on A to !roe t"at no fraud attended t"e signing of t"e contract. or "is !art% B $as able to !roe t"at "e $as indeed illiterate $"ic" fact entitles "im to t"e !riilege of being freed of t"e burden of !roing "is allegation of fraud.
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Q. *"e contract entered into by G% a sugar !lanter% and 6% t"e sugar central% re+uired 6 to construct a railroad across t"e sugarland of G % but 6 refused to build t"e railroad because it $ould be built at a !lace $"ere t"e contour of t"e land% t"e cures% and eleations do not !ermit t"e construction of a railroad. G sued 6 for damages. #ill t"e action !ros!er) A. ?o% t"e action $ill not !ros!er. (m!ossible t"ings or serices cannot be t"e obect of contracts. (n t"is case% to re+uire 6 to build a railroad at a !lace t"at do not !ermit construction of a railroad is to e-!ose t"e men $"o are to build t"e railroad to danger. One may not be com!elled to do somet"ing $"ic"% in so doing% !oses danger to life and !ro!erty. *o com!el "im to do so runs counter to !ublic !olicy and t"e la$ by forcing t"e !erformance of a contract $"ic" is undesirable and "armful. *"e obligation is oid. Quiz 1_2015 ((. 1D Q. A entered into a contract $it" B% a contractor% for t"e construction of "is "ouse% $it" B to furnis" labor and materials. One mont" after t"e building $as turned oer to A% an eart"+uake "it t"e area $"ic" resulted to t"e colla!se of A,s building. Of t"e many buildings in t"e area% only A,s building colla!sed. A sued B for damages. #ill t"e action !ros!er) *"e action $ill !ros!er. #"ile it is true t"at no one is res!onsible for loss caused by a fortuitous eent or act of /od% t"e rule does not a!!ly $"ere t"e obligor "as contributed o r !artici!ated in t"e loss. (n t"is case% only A,s building colla!sed on t"e occasion of t"e eart"+uake. *"is is elo+uent !roof t"at in t"e construction of t"e building B "ad em!loyed fraud e.g.% by using substandard materialsD or $as guilty of negligence in t"e construction of t"e building. =es i!sa lo+uitur. By reason of B,s act of fraud or negligence% t"e $"ole occurrence is "umanized and remoed fro m t"e rules a!!licable to t"e acts of /od.
2D G donated a !arcel of land to 6 3niersity on condition t"at t"e land $ould be used e-clusiely for t"e establis"ment and use of a medical college. *"e donation did not state $it"in $"at !eriod t"e medical college $ould be establis"ed. ore t"an fifty years "ae already !assed and no medical college $as establis"ed on t"e land. *"e "eirs of G sued t"e 3niersity for t"e reconeyance of t"e land to t"em. (n its ans$er% t"e 3niersity alleged t"at t"e action is !remature because% t"e !eriod $it"in $"ic" t"e medical sc"ool $as to be built not being stated in t"e deed% it "as not incurred in delay. (s t"e 3niersity correct) ?o% t"e 3niersity is $rong. #"ile it is true t"at if t"e obligation does not fi- a !eriod% but from its nature and t"e circumstances it can be inferred t"at a !eriod $as intended% t"e courts $ill still fi- t"e !eriod% t"e rule does not a!!ly $"ere t"e obligor "ad more t"an a reasonable !eriod to com!ly $it" t"e obligation but failed to do so. (n t"is case% 6 3niersity "ad more t"an fifty years to build t"e medical sc"ool% but it failed to do so. ence% t"ere is no more need to fi- t"e duration of a term of t"e obligation $"en suc" !rocedure $ould be a mere tec"nicality and formality and $ould sere no !ur!ose t"an to delay or lead to an unnecessary and e-!ensie multi!lication of suits. Ciil
Q. An ailing cor!oration a!!lied for a loan $it" a bank. *"e bank a!!roed t"e a!!lication on condition t"at it takes oer t"e management of t"e cor!oration under a management contract and t"at t"e loan be secured by a mortgage oer sufficient real estate. 3nder t"e management contract% t"e disbursement to t"e loan $as under t"e com!lete control of t"e bank. After a fe$ years of o!eration% t"e cor!oration $ent bankru!t and $as unable to !ay t"e 8
loan. *"e bank !roceeded to foreclose t"e mortgage. *"e cor!oration filed an action to declare oid t"e real estate mortgage. #ill t"e action !ros!er)
6es% t"e action $ill !ros!er. Contracts $it"out cause are oid. (n t"is case% t"e disbursement of t"e loan !roceeds $as under t"e com!lete control of t"e lender bank% and t"e cor!oration $ent bankru!t. (t is clear t"at t"e bank "ad miss!ent t"e money. *"erefore% it is as if t"e loan $as neer deliered to it and t"us% t"ere $as failure on t"e !art of t"e bank to delier t"e consideration for $"ic" t"e mortgage $as $ere e-ecuted. Ciil
Q. A sued B for t"e recoery of t"e o$ners"i! and !ossession of a !arcel of land. @uring t"e !endency of t"e case% B sold t"e land to C . B,s certificate of title oer t"e land $as cancelled and a ne$ one issued in t"e name of C. A obtained a faorable udgment $"ic" became final and e-ecutory. *"ereafter% A filed a com!laint against B and C for t"e rescission of t"e sale. # ill t"e action !ros!er) (t de!ends. (f C is in bad fait" or if B "as no ot"er !ro!erties $it" $"ic" to satisfy t"e claim of A% t"en t"e action $ill !ros!er% ot"er$ise% t"e action $ill not !ros!er.. #"ile it is true t"at a sale of a !ro!erty under litigation by t"e defendant $it"out t"e consent or a!!roal of t"e !laintiff or t"e court is rescissible% an action for rescission cannot be instituted $"en t"e !arty suffering damage "as no ot"er legal means to obtain re!aration for t"e same or $"en t"e subect !ro!erty is already in t"e "ands of a t"ird !erson $"o did not act in bad fait". A sale of t"e !ro!erty in litigation by t"e defendant $"o "as ot"er !ro!erties $it" $"ic" to satisfy any aderse udgment cannot be said to be one in fraud of creditors. Also% a !urc"aser in good fait" for alue is !rotected by la$. Ciil
Q. *"e "ili!!ine =eclamation Aut"ority =AD% a goernment agency% entered into a contract $it" ABC Cor!oration for a reclamation !roect. (n consideration for t"e $orks t"e cor!oration $ould do% =A $ould transfer to G Cor!oration title oer onet"ird of t"e lands t"at may be reclaimed. (s t"e contract alid) A. *"e contract is not alid. A contract $"ose obect is outside t"e commerce of man is oid . (n t"is case% t"e obect of t"e contract is reclaimed land% and reclaimed land% $"ic" is not yet titled in t"e name of t"e "ili!!ine =eclamation Aut"ority% is !ro!erty of !ublic dominion% een if not em!loyed for !ublic use or !ublic serice% if deelo!ed to en"ance t"e national $ealt". A !ro!erty of !ublic dominion is outside t"e commerce of man. =eclaimed lands t"at are already titled in t"e name of t"e "ili!!ine =eclamation Aut"ority are alienable lands. But een if t"e subect land is already titled in t"e name of t"e =A% t"e contract is still oid. ere is t"en t"e alternatie ans$er7 A. *"e contract is oid. Contracts t"at are !ro"ibited or declared oid by la$ are oid. (n t"is case% =A $ould transfer lands to G Cor!oration in consideration for its serices. *"e transfer iolates t"e Constitution $"ic" !roides t"at !riate cor!orations s"all not "old alienable lands of t"e !ublic domain e-ce!t by lease. *"e transfer of title and o$ners"i! to G Cor!oration clearly means t"at t"e cor!oration $ill 8"old9 t"e lands ot"er t"an by lease. *"e transfer of title and o$ners"i! is a 8dis!osition9 of t"e lands% a transaction considered a sale or alienationD. Ciil
Q. (n "is desire to be able to co"abit $it" 1H year old B% A% a ;5 year old $ido$erbusinessman% donated to "er a !arcel of land. B acce!ted t"e donation% and A and B lied as "usband and $ife. #"en A died% "is "eirs sued B for t"e recoery of t"e o$ners"i! and !ossession of t"e land on t"e ground t"at in donating t"e land% B $as motiated by lust making t"e donation oid for "aing an unla$ful cause. (n "er ans$er% B alleged t"at in contracts% motie is different from cause. #ill t"e action !ros!er) A. *"e action $ill not !ros!er. 9
A !arty to an illegal contract may not inoke in a suit t"e illegality t"ereof as a cause of action or a defense. (n t"is case% t"e motie and t"e cause are one and t"e same. *"is is so because A $ould not "ae made t"e donation "ad B not agreed to co"abit $it" "im. *"e motie% t"erefore% !redetermines t"e !ur!ose of t"e donation. As t"e motie is unla$ful% so too is t"e cause. ence% t"e donation is oid. But t"e donation being oid $ill not make t"e action of t"e "eirs !ros!er. A !arty to an illegal contract may not inoke in a suit t"e illegality t"ereof as a cause of action or a defense. oreoer% t"e !rinci!le of in !ari delicto does not a!!ly because it cannot be said t"at bot" !arties "ad e+ual guilt considering t"at as against A% $"o $as a man adanced in years and mature e-!erience% B $as a ery young and% most !robably% an ine-!erience $oman.
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Q. A% B% C and @ $anted to buy on installment basis a !arcel of land ac+uired by Bank in a foreclosure of mortgage auction sale and t"e bank agreed. *"e bank suggested t"at% to sim!lify t"e transaction% only A s"ould a!!ear as t"e buyer% and once t"e land is fully !aid and t"e title is transferred to A% A $ould t"en sell t"e s"ares of C and @ to t"em. *"e four agreed. #"en t"e !urc"ase $as !aid in full and t"e title transferred to A% A $ould not e-ecute t"e deeds of sale as agreed. B% C and @ filed an action against A for s!ecific !erformance. #ill t"e action !ros!er)
A. 6es. *"e action $ill !ros!er. 3nder t"e la$% if t$o or more !ersons agree to !urc"ase !ro!erty and by common consent t"e legal title is taken in t"e name of one of t"em for t"e benefit of all% a trust is created by t"e force of la$ in faor of t"e ot"ers in !ro!ortion to t"e interest of eac". (n t"is case% t"e !ro!erty boug"t by A% B% C and @ $as% to sim!lify t"e transaction% registered under t"e name of A only. An im!lied trust is created by o!eration of la$ in fa or of B% C% @ as to t"eir res!ectie s"ares. *"e land being registered in t"e name of A does not confer on "im t"e o$ners"i! of t"e land. =egistration is not a mode of ac+uiring o$ners"i!. Ciil
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Q. A borro$ed money from B
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1. A leased to B "is 2storey building for a term of fie years. As agreed% B used t"e first floor for "is "ard$are business and t"e one "alf !ortion of second floor as storeroom and t"e ot"er "alf as slee!ing +uarters of "is em!loyees. On t"e t"ird year of t"e lease% a total re"abilitation of t"e roof $as done as t"e roof "ad so many leaks and $as in danger of colla!sing. A assured B t"at t"e re"abilitation $ill last only for 0 days. After t"e la!se of 0 days% t"e re"abilitation $ork $as not yet done. B sued A for t"e cancellation of t"e contract. # ill t"e action !ros!er) 11
?o% t"e action $ill not !ros!er. 3nder t"e la$% if during t"e lease it s"ould become necessary to make some urgent re!airs u!on t"e t"ing leased% $"ic" cannot be deferred until t"e termination of t"e lease% t"e lessee is obliged to tolerate t"e $ork% alt"oug" it may be ery annoying to "im% and alt"oug" during t"e same% "e may be de!ried of a !art of t"e !remises. (f t"e re!airs last more t"an forty days t"e rent s"all be reduced in !ro!ortion to t"e time L including t"e first forty days L and t"e !art of t"e !ro!erty of $"ic" t"e lessee "as been de!ried. e lessee is allo$ed to rescind t"e lessee only of t"e main !ur!ose of t"e lease is to !roide a d$elling !lace for t"e lessee% and t"e $ork is of suc" nature t"at t"e !ortion $"ic" t"e lessee and "is family need for t"eir d$elling becomes unin"abitable. (n t"is case% as t"e roof "as become a "ealt" "azard% t"e re"abilitation $ork could not be deferred until t"e termination of t"e lease. Also% t"e leased !remises is used for d$elling only for B,s em!loyees% not for B and "is family. B,s action for cancellation of t"e lease "as no basis. *"at t"e re!airs lasted for more t"an 0 days only entitles t"e lessee to a !ro!ortional reduction of t"e rental%
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A leased to B "is commercial building for 50%000.00 a mont" for a !eriod of one year% from anuary 1% 201& to @ecember 1% 201&% subect to rene$al u!on mutual consent of t"e !arties. After @ecember 1% 2015 t"e lease contract $as not rene$ed but B continued to occu!y t"e building and A continued to collect t"e rental and B religiously !aid it as it fell due. On arc" 15% 2015% gie notice to B t"at t"e lease oer t"e building $ould terminate. B !aid t"e rental for arc"% but "e refused to acate t"e !remises. A sued B for unla$ful detainer. #ill t"e action !ros!er) 6es. *"e action $ill !ros!er. *"e la$ is t"at if at t"e end of t"e contract t"e lessee s"ould continue enoying t"e t"ing leased for fifteen days $it" t"e ac+uiescence of t"e lessor% and unless a notice to t"e contrary by eit"er !arty "as !reiously been gien% it is understood t"at t"ere is an im!lied ne$ lease% not for t"e !eriod of t"e original contract but from year to year% if t"e rent agreed u!on is annual: from mont" to mont" %if mont"ly: from $eek to $eek % if $eekly: and from day to day if daily. *"e ot"er terms of t"e original contract "as to be reied. (n t"is case% B $it" t"e ac+uiescence of A continued to enoy t"e building more t"an fifteen days from t"e e-!iration of t"e oneyear !eriod of t"e lease !aying rental t"ereof on a mont"ly basis. *"e !eriod of t"e im!lied lease% t"erefore% e-!ires eery end of t"e mont"% t"ere being no notice gien by eit"er !arty to t"e contrary. #"en A gae notice to B t"at t"e lease $ould only u! to t"e end of arc" 2015% t"e im!lied lease $as to effectiely terminate on t"at date. Beyond t"at date% B,s !ossession of t"e building "ad become unla$ful.
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