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Sales Exam Question
Sales Exam Question
A 21. Rhys and Emman entered into a contract whereby Rhys agreed to sell his
Honda Jazz car to Emaan for P350,000. Upon the perfection of the contract, Emman
advanced the entire purchase price of P350,000 to Rhys. It was, however, stipulated
that the Honda Jazz car shall be delivered to Emman at the end of September 2010,
after the bar exams. Unfortunately, before the arrival of that date, the car was
struck by lightning ads was thus, completely destroyed. Can Emman now recover
the P350,000 he had advanced to Rhys?
a. Yes, since the obligation of Rhys to deliver the Honda Jazz car is
extinguished, then, the obligation of Emman to pay the price is also
extinguished and in conformity with the principle of res perit
domino.
b. No, because it is Emman who bears the loss since he paid the purchase price
even though the Honda Jazz car is yet to be delivered.
c. Yes, since it involves specific goods, then the loss is imputable to Rhys for his
failure to exercise the diligence of a good father of a family.
d. No, since the Honda Jazz car was lost without any fault on the part of Rhys
and therefore, Rhys must not suffer because of such fortuitous event.
A 22. RR sold his Sony Bravia Flat Screen TV to Tyntyn for P250,000 to be paid
as follows: P100,000 upon delivery of the flat screen TV and the balance at the rate
of P50,000 every 2 months thereafter. Before the payment of the remaining balance
of P150,000, the Sony Bravia Flat Screen TV was burned when there was big fire in a
subdivision where Tyntyns house was situated. The said fire was without the
fault of Tyntyn or RR. Is Tyntyn obliged to pay the balance? (3pts)
a. No, because the subject matter was lost without Tyntyns fault.
b. Yes, because ownership was already transferred to Tyntyn.
c. No, because there was no agreement between Tynty and RR that Tyntyn will
be liable to pay for the balance in case there is loss before the balance is
completely paid.
d. Yes, because even if Tyntyn is not yet the owner of the said TV, failure to pay
the balance will constitute breach of contract on her part
a. The main obligation of the seller is to transfer the ownership and deliver a
determinate thinh.
b. the main oligation of the seller is not susceptible to an action for
specific performance since it will result to involuntary servitude, which
is unconstitutional.
c. the main obligation of the seller is a real obligation.
d. the main obligation of the seller is an obligation to give.
24. There is a stipulation in a contract of lease that if the lessor should desire
to sell the leased premises, the lessee shall have a 30-day exclusive option to
purchase the same. However, if it is sold to another, the lessor is bound and obliged
to stipulate in the deed of sale that the purchase shall recognize the lease and be
bound by all the terms and conditions thereof. What is involved in the said contract
of lease?
a. An option contract.
b. A right of first refusal.
c. Both an option contract and a right of first refusal.
d. Neither an option contract nor a right of first refusal.
B 25. Tin and Charmee are long time friends. On November 1, 2009, Tin
entrusted to Charmee 8 pieces of jewelry. On December 8 of the same year,
Charmee decided to buy some items and issued a postdated check in the amount of
P320,000. Tin deposited said check with the bank. However, said check was
dishonored since the Charmees account had been closed. Tin informed Charmee of
the dishonored check, then later Charmee started avoiding Tin.
Charmee stressed that the transaction between her and Tin was a sale or
return, perfected and consummated on November 1, 2009 when the 8 pieces of
jewelry were delivered to her. Which of the ff statements is appropriate?
III. ESSAY
2. Mae offers to buy Xyzas property under the following terms and conditions: P1
million purchase price, 10% option money, the balance payable in cash upon the
clearance of the property of all illegal occupants. The option money was promptly
paid and Xyza cleared the property of illegal occupants in no time at all. However,
when Mae tendered the balance and asked Xyza for the Deed of Absolute Sale, Xyza
suddenly had a change of heart, claiming that the deal is disadvantageous to her as
she has found out that the property can fetch P 3 million. Mae seeks specific
performance but Xyza contends that she has merely given Mae an option to buy
and nothing more and offers to return the option money which Mae refuses to
accept.
Yes. Maes action for specific performance against Xyza will prosper. In an option
contract, there should be a separate and distinct consideration which is not part of
the purchase price. In the case at bar, what was entered by the parties is a contract
of sale in which Xyza will deliver the determinate thing and transfer ownership to
Mae after the latter will give ten percent of the purchase price as downpayment and
subsequently clear the property from illegal occupants. These conditions were
fulfilled thus a perfected contract of sale was already made by the parties. What
was paid by Mae is earnest money and not option money.
In a perfected contract of sale, the other party may seek compliance by the
other because of their reciprocal obligations. Specific performance is a valid remedy
in this case.
b. May Xyza justify her refusal to proceed with the sale by the fact that the
deal was financially disadvantageous to her? Explain (5pts)
No. Xyza has no valid ground to back-out from the perfected contract of sale if her
contention is that the deal was financially disadvantageous to her.
Article 19 of the New Civil Code on human relations states that every person in the
exercise of his rights and in the performance of his duties shall act with equity,
justice, and good faith.
In the case at bar, Xyza cannot whimsically withdraw the contract without the
consent of the buyer since there was already an agreement between them as to the
sale of the property.
The description of the land sold is 2,000 sqm with the words MORE or LESS
after the figure, but what was occupied by Davao Agro-Industrial was
more than that. And that when the land was surveyed, it turned out that
its actual area is 6, 870 sqm. The land sold by Percy was one of lump sum.
a. Did the contract of sale involve the 6,870 sqm or just the 2000 sqm ?
Explain (5pts)
In a sale for a lump sum, the vendor is obligated to deliver all the
land included within the boundaries regardless of whether the real area
should be greater or smaller.
In the case at bar, although the surveyor has proven that the boundaries
really include a greater area, which is more than 2000, the Davao Agro-Industrial,
which is owned by the buyers of Percys property, is the party which has the better
right to the property.
No. the contract of sale is not subject to rescission. It cannot also be increased.For a
contract of sale to be rescissible it must be:
a. A contract entered into in representation by guardians whose wards suffer lesion
by more thatn one-fourth of the value of the property; or
b. a contract entered into in representation of absentees when the latter suffers
lesion of more than one-fourth of the value of the property.
In this case, it is not shown that there was lesion. The price cannot be increased
because the contract was binding on their successors and they cannot demand for
an additional of what had been agreed upon.
4. Jane owns a house and lot which was leased to Liezel. Liezel was given the right
of first refusal. When Jane decided to sell the house and lot to Liezel in the amount
of P 5 million; Liezel rejected said purchase price but rather offered to buy the
house and lot for P 4.5 million. Jane later on sold the house and lot to Judy for P 5
million. Can Liezel compel Jane to cancel the sale with Judy and sell the
house to her? Explain (10pts)
No. Liezl cannot compel Jane to cancel the sale with Judy and sell the house
to her.
In a right of first refusal, the optionee is merely given the first priority to
decide whether to purchase the property or not. It is merely a privilege granted to
the optionee by the optioner to be the first to make the acceptance of the offer to
the optioner in case the latter would decide to sell the property. Once the offer is
rejected, the optioner may now offer the property to others.
In case at bar, Liezl has already rejected the offer made by Jane to her.
Instead, she made a counter-offer to Judy. Thus, there was no showing that there
was a mutual agreement between the parties. There was no acceptance made to
Liezl. Judy may now offer the property to others.
(Atty Saronas comment: same terms and conditions)
5. Jed gave Rey Mar an option to purchase his apartment for P3 million. Rey Mar
offered to buy it at P2.5 miliion but such counter-offer was not accepted by Jad. Jad
sold his apartment to Dennis for P3 million. Can Rey Mar compel Jad to cancel the
sale to Dennis and execute a Deed of Sale in his favor? (10pts)
Ans: No. Rey Mar cannot compel Jad to cancel the sale to Dennis and execute a
Deed of Sale in his favor.
For an option contract to be valid, there must be a distinct and separate
consideration which is not part of the purchase price.
In the case at bar, the option to purchase given by Jad to Rey Mar has no
separate consideration. Thus the option to purchase cannot be given effect. Absent
any distinct consideration for an option contract, Jad is free to sell the property to
Dennis or any third person.
6. Jo Anne, who is an engineer, offered her services to manufacture and install a
conveyor system which, according to her, would increase production and efficiency
of the business of Norliza. Norliza expressed her conformity to the offer made in
writing by putting her signature therein. She caused to be added to this offer a note
which reads. All specifications shall be in strict accordance with the approved plan
made part of this agreement. A few days later, Jo Anne made the demand for the
payment of P30,000, which was readily delivered by Norliza in the form of a check.
Deducting this payment, there is a balance of P20,000 to be paid by Norliza upon
the completion of the installation.
The work was completed in August 2010. Trial runs were made in the presence of
Norliza and Jo Anne. As a result of the trial runs, it was discovered that the conveyor
system did not function to the defendants satisfaction. The defects had not been
remedied so that they came to the parting of the ways. When Jo Anne billed Norliza
for the balance of the contract price, Norliza refused to pay for the reason that the
conveyor system installed did not serve the purpose for which the same was
manufactured and installed. Was there delivery of the conveyors by Jo Anne?
Explain. (10pts)
Ans: Yes. There was already delivery made by Jo Anne. There was already
constructive delivery made by Jo Anne to Norliza when the conveyors were
placed under the control of Norliza. In the case at bar, constructive
delivery was effected by Jo Anne when she presented to Norliza the
conveyors during the trial runs.
Sasha immediately built a fence of permanent structure covering the entire parcel
of land. Sasha registered the Deed of Absolute Sale in her favor and obtained in her
name a TCT over the entire parcel of land. Was there a valid contract entered into
between the Spouses and Sasha? Explain. (10pts)
Ans: Yes. There was a valid contract entered into between the spouses and
Sasha.
A contract is perfected if there was already meeting of the minds as
to the subject matter and the price or consideration. The consideration
must be real. It must not be absolutely simulated such that there was
really no intention to pay the price to the seller, and no intention to
transfer ownership and deliver the determinate thing to the seller.
In the case at bar, although the parties executed a Deed of Absolute
Sale and made it appear that there was a sale that happened, it can be
shown that they really intended to convey the property to Sasha. There is
a contract which was perfected since it can be shown that the parties
intended in reality, to enter to a donation, or some other act or contract.
In this case, the contract may be subject to reformation to indicate the
true intention of the partner.
MULTIPLE CHOICE
C 12. Seller may exercise his special right to resell the goods, except
a. if the goods are perishable
b. if such right was stipulated by the parties in case buyer defaults in
payment
c. if no notice was sent by seller to buyer to exercise such right
d. if the buyer is in default for unreasonable time
C 16. Under a lease of Honda Jazz Car, with option to buy, Teen and Bhing agreed
that failure of Bhing, the lessee, to pay for three mos rent would entitle Teen to take
back the car and the option to buy would be loast. Bhing failed to pay for the last
three months of the lease. Teen took back the property and instituted an action to
recover the rents corresponding to the three months. Which of the following
statements is correct?
a. Teen can validly take back the property and recover the rents covering the
three months in which Bhing failed to pay, since such arrangement was previously
agreed to by the parties
b. Teen can validly take back the property and recover the rents covering the
three months in which Bhing faile to pay, even if both parties did not have
previously agreed to such agreement
c. Teen can validly take back the property but she does not have
right to recover the rent for the three months in which Bhing failed to pay
d. Teen cannot validly take back the property and she cannot also recover the
rent for the three months in which Bhing failed to pay
C 17. Dana sold to Mitos a house and lot for P2.5 million payable 1 month after the
execution of the Deed of Absolute Sale. It was expressly stipulated in the Deed of
Absolute Sale that the sale would ipso facto be of no effect upon the failure of Mitos
to pay as agreed. Mitos failed to pay on maturity and Danna sued to declare the
contract without force and effect. If Mitos tendered payment before the action was
filed by Danna, but subsequent to the stipulated date of payment, which of the
following statements is not applicable?
a. The action of Danna will prosper because both parties have expressly agreed
that the contract will be automatically rescinded in case there is failure to pay the
price.
b. The action of Danna will prosper, even without the express agreement that
the contract will be automatically rescinded in case there is failure to pay the price,
because Mitos is still entitled to a grace period of 30 days as provided for by law.
c. The action of Danna will not prosper, even with the express
agreement that the contract will be automatically rescinded in case there
is failure to pay the price, because Danna should have made a demand,
either through a judicial or notarial act.
d. The action of Dana will not prosper because the express agreement that the
contract will be automatically rescinded in case there is failure to pay the price is
contrary to law.
B 18. On, October 1, 2007, Karla sold to Sahara a real estate property worth P 2
million. They agreed on the same date that the amount due shall be paid by Sahara
in 10 equal annual installments to be paid beginning on the date the contract of
sale was perfected. On 2009, Sahara was not able to make any payment. Which of
the following is not applicable under the said circumstances?
a. Sahara can pay the balance without interest within the grace period of 1
month
b. Sahara can pay the balance without interest within the grace period
of 2 months
c. If Sahara does not pay, the contract of sale is considered cancelled, and Karla
gets to keep the P200,000
d. If Sahara does not pay, the contract of sale is considered cancelled, in which
such cancellation shall take effect 30 days from notice and upon payment of P
200,000
D 19. Hanniyah, Noche and Vanessa are co-owners of an urban land, having
inherited the same form their wealthy uncle. Jocely owns the adjoining land.
Vanessa donated her portion to Aisa and Noche sold his portion to Tippi. Which of
the following statements is applicable under this scenario?
a. Hanniyah has a right to redeem the portion of Vanessa, which Vanessa
donated to Aisa
b. Jocelyn has a right to redeem the portion of Vanessa, which Vanessa donated
to Aisa
c. Hanniyah has a preferred right over Jocelyn to redeem the portion of Vanessa,
which Vanessa donated to Aisa.
d. Both Hanniyah and Jocelyn have no right to redeem the portion of
Vanessa, which Vanessa donated to Aisa.
C 20. Article 1592 of the New Civil Code provides for a remedy available to the
seller in case there is failure to pay the purchase price. However Article 1592 does
not apply to the following, except:
a. cases covered by RA 6552
b. conditional sale
c. contract to sell
d. contract of sale of a commercial building
2. Anthony sold his parcel of land at Lanang, Davao City to Lyndon on September
15, 2009. But the Deed of Sale covering the said transaction was not registered with
the Registry of Deeds. On December 8, 2009, Anthony sold the same parcel of land
to Allan, who thereafter immediately succeeded to register the Deed of Sale with
the Registry of Deeds. Allan thereafter obtained a Transfer Certificate of Title oer
the property in his own name.
a. What are the requisites for the rule on Double Sale, as provided in Article
1544 of the New Civil Code, to apply? (5pts)
b. Who has a better right over the parcel of land? Explain. (10pts)
4. Blithe and Felai entered in to a contract of sale of a condominium unit for a total
price of P 4 million, 25% thereof will be paid upon execution of the deed on October
20, 2009. The remaining 75 % balance of the purchase price will be paid 3 equal
annual installments, to begin one year after the execution of the deed. On 2010,
Felai failed to pay the installment on due date.
a. Can Felai still tender payment despite the lapse of the due date?
Explain. (5pts)
b. When can Blithe cancel the contract of sale? (5pts)
5. Dianne, a resident of Cebu City, bought computer merchandise from Christ and
requested Christ to ship the goods from Davao City to Cebu City. Christ
immediately shipped the merchandise but before the goods reached Cebu City,
Christ found out that Dianne was insolvent. Christ goes to you and asks for
possible courses of action to take against Dianne. What is/are the remedy/ies
available to Christ, if any? Explain each remedy briefly. (10pts)
NOTEBOOKS
1. The following are the distinctions of a contract of sale from dacion en pago:
a. in contact of sale, the payment of the purchase price will give rise to a an
obligation to transfer ownership and delivery of possession, while in dacion en pago
will extinguish the obligation;
b. Sale is perfected by mere consent, while in dacion en pago, there must be
delivery of the object since it is a real contract;
c. In sale, there is no pre-existing obligation, however, in dacion en pago there is
a pre-existing obligation;
d. In sale, the consideration is the price certain or equivalent but in dacion en
pago, the consideration as to the debtor is to extinguish the obligation and as to the
auditor is the property or the object which is the substitute.
2. Yes, the action of Ron will prosper. As provided in the New Civil Code especially
after the effectivity of the Family Code, any of the spouses is prohibited from
alienating or disposing a property which belongs to the conjugal partnership without
the consent of the other spouse. Such sale would be void but it will be a continuing
offer as to the consenting spouse and the third person and shall be binding if the
other spouse will consent or the authority of the court is given.
In the case at bar, Hermione cannot alienate the said property to Luna without
the consent of Ron because it is a conjugal property. The forged signature of Ron in
the SPA voids the contract between Luna and Hermione since written consent of Ron
was not given. It is proper for Ron to ask the court to deliver the Deed of Absolute
Sale void. Thus, Hermione is prohibited from alienating their conjugal property
without the consent of Ron.
3. No. Lunas action will not prosper. Under Article 1490 of the New Civil Code, the
sale between spouses is prohibited and is void except only when they agreed to
have a separate or complete separation of property in their marriage settlements or
they have obtained a judicial separation of property. The prohibition also extends to
common-law spouses for if it is otherwise, they would be put in a better position
than those legally married.
In the case at bar, Luna is married to Meville so the prohibition under Article
1490 applies to them. Even if it was found out that their marriage is null and void
since they can still be considered a common law spouse at least in this case. The
fact that they were not living together as husband and wife at the time Luna
acquired it, it would not take them away from the prohibition.
Furthermore, both Luna and Meville are in pari-delicto since both of them are
equally guilty in the selling and buying of the property. The court will leave them as
they were. Luna is not the correct party to annul the sale since the law provides that
only the prejudicial heirs, prior creditors and the state can question the contract.
In sum, the action of Luna will not prosper.
4. The contention of Nick is not correct. As provided by the New Civil Code, sale
being a consensual contract is perfected by mere consent. It is a perfected sale if
there has been a meeting of the minds as to the object which is determinate and
the consideration of the price.
In the present case, Hagrid orally offered the land covered by TCT No. 407123 for
P3,000,000 to Albus which Albus has accepted. Therefore, sale is already perfected
on March 15, 201 since all the essential elements of the contract which are consent,
object and consideration are present.
Nick is not correct in saying that there was no valid contract of sale entered or
executed by Hagrid and Albus, since sale is consensual and is valid in whatever
forms they are entered into. There is also no need to pay a portion of consideration
since this not an option contract but a perfected contract of sale. Nick in this case
cannot anymore purchase the land from Hagrid since the sale of Hagrid and Albus is
valid or perfected. So Nicks contention is not correct.
5.Harry and Ginny entered into a barter. The New Civil Code provides that when the
consideration is partly in money and partly an object, the intention of the party
must be looked at or ascertain. However, when the intention of the parties cannot
be ascertained, then it shall be considered as sale if the value of the object is equal
or lesser than the amount of money given. When the value of the object is greater
than the amount in money, it shall be considered as barter.
In this case, Ginny is a buyer and she offered her watch worth P12,000 and cash
of P8,000 in exchange of Harrys cellphone worth P20,000. Since Ginnys offer
consist in money and in object it shall ascertain their intention. But no intention is
indicated or expressed so since the law provides that if the value of the object as in
this case is P12,000 and is higher that the money given, it is a barter.
6. No. Potter Research Institute is neither liable for income tax and contractors tax.
As held by the Supreme Court in the case of CIR vs CA and Ateneo de Manila, Potter
Research Institute has not entered into a contract of sale or a contract for a piece of
work so it cannot be liable for any income tax and contractors tax. According to the
Supreme Court, in both sale and contract for piece of work, it necessarily includes a
transfer of ownership which is not present in this case.
Potter Research Institute like Ateneo de Manila Research Institute, does not sell
the copies of their researches and even though they accept sponsorships, they only
conduct researches for the benefit of their entities. The copies of their researches
do not transfer of are not transferred to any interested agencies thus ownership is
retained by the Potter Research Institute. It cannot be held liable for income tax or
contractors tax because Potter Research Institute is not engage in selling their
research. It is neither a contractor or a manufacturer in this case.
7. According to Article 1458, a contract of sale is where one party, the seller,
obligates himself to transfer ownership and deliver possession of a determinate
thing, and the other party, the buyer, obligates himself to pay the price certain
in money or its equivalent.
1. The following are the distinctions of option money from earnest money:
a. Option money is a separate consideration in an option contract, while earnest
money is part of the purchase price in a contract of sale;
b. When option money is given, the optionee is not obliged to pay the purchase
price, however, when an earnest money is given, the buyer is obliged to pay the
balance of the purchase price;
c. Option money is given when the sale is not yet perfected but the option
contract is then perfected, but earnest money is given when the sale has been
perfected;
d. Both the option money and earnest money are considerations. Option money
is a consideration in an option contract while earnest money is a consideration in a
contract of sale.
2. No, there was no perfected contract of sale. The New Civil Code provides that for
a sale to be valid, the 3 essential requites must concur namely consent, object, and
consideration.
In the case at bar, object and consideration are present but consent coming from
the buyer is lackin. The term noted does not signify the consent of the buyer or an
absolute acceptance to the offer.
In one of its decided case, the Supreme Court held that the word Noted is not
an express and absolute acceptance by the offeree. It could have been different if
what was stated was approved. No perfected contract of sale.
3. No, the contention of Draco is not correct. A valid subject matter must be a
possible thing, licit and determinate or at least determinable. A determinate subject
matter is physically segrated or particularly designated. However a determinable
subject matter is valid if it is capable of being made determinate and no further
agreement is needed by the parties.
The subject matter in this case is determinable. Marcissa sold to Lucius 3
hectares of land which is part of the 7.5 hectare parcel of land covered by TCT No. T-
10,185. It may bot be determinate but it is determinable because the subject matter
which is the 3 hectares has the capacity to be made determinate and there is no
need for a new or further agreements by the parties even if no exact location.
Draco is not correct in saying that there was no valid subject so the sale is void.
b.) Yes. There was a valid contract of sale between Harry and Ronald. As provided
by the New Civil Code, the price or consideration must be in money or its
equivalent, it must be real and it must also certain or ascertainable.
In the present case, all essential elements are present. As to the price, Harry
sold the mortgaged property to Ron for P1,000 and the assumption o f mortgage in
Hogmead. Here, the price or consideration is not just the P1,000 but also for Ron to
assume the mortgage of the said property. It was partly in money and partly the
assumption of mortgage and this is allowed by law since the price can be in money
or its equivalent.
b. the ownership of the subject house and lot should be transferred to spouses
Geller. In case of double sale an immovable property, the New Civil Code provies
that preference shall be given to the buyer who first register the same in good faith,
or to the buyer who first possess or have possession on the said property or the one
who presents the oldest title. The preference is on the said order. Double sale also
requires that there are two buyers of the same property which is sold by the same
seller and that it is only applicable to contract of sale.
In the case at bar, based on the preference listed in case of double sale,
spouses Tribbiani would seem to be the preferred buyer because she took actual
possession first but the rule on double sale will not apply to this case because
spouses Tribbiani entered a contract to buy and sell to spouses Bing. Therefore, law
on double sale is not applicable.
Spouses Geller is the real owner because when Spouses Bing executed a
Deed of Sale, it was a constructive delivery which according to law on sales, is a
valid transfer of ownership. Spouses Geller is the owner of the subject property
because ownership is transferred upon delivery.
In the case at bar, the very fact that there was a trial run of the conveyors
made in the presence that there was delivery. Conveyors are now transferred or is in
the possession of Rachel.
b. The case for breach of warranty against hidden defects filed against Ross will not
prosper. The law provides that hidden defects in case of warranty against hidden
defects shall be present at the time of delivery and that the buyer shall immediately
inform the seller of such hidden defects. The prescription or prescriptive period to
file such breach of warranty against hidden defect shall be within 6 months after the
delivery.
In the case at bar, delivery was made on July 31, 2009 while Rachel only set
up the case for breach of warranty against hidden defects on March 31, 2010. The
period to bring the action has already prescribed.
3. Monica has two options available: First, she can still pay the installment for year
2010 with 2 month grace period. Second, if she failed to pay within the grace
period, the sale will be cancelled and 50% of her total payment shall be given back
to her.
As to the second option, the Maceda Law also provides, that if vendee fails to
pay in the given grace period, the said sale shall be rescinded after 30 days of
notarial notice of rescission. The vendee shall receive back the 50% of total
payment with 5% interest of every year provided she completed paying the 5 years
installment. Since Monica did not reach 5 years of installment, she will just get the
50% of the total payment.
4. No. the court cannot order Chandler to pay Joeys Garage the deficiency of
P30,000 plus interest. Based on Artilce 1484 of the New Civil code or known as the
Recto Law, in case of a movable property sold in installments, the seller has 3
options or remedies if buyer failed to pay installment at least twice. First, to exact
fulfillment if vendee failed to pay. Second, rescind the contract if vendee failed to
pay installment. Third, foreclose the property if there is a mortgage to secure the
payment of the property. In case of foreclosure, the seller cannot demand for the
deficiency to the vendee.
In the case at bar, Joeys Garage opted to choose the third option which is
foreclosure. The law is also clear that the options available are alternative and not
cumulative. Since, foreclosure was the option by Joeys Garage, the can be
foreclosed and sold at public auction but Joeys Garage cannot claim for the
deficiency because the law attaches bar to the said option. The law does not allow
Joeys Garage to claim for deficiency as well as interest.
FALSE 1. If not all elements are present for Article 1544 of the New Civil Code to
apply, the principle of prior tempore, potior jure should apply.
FALSE 2. If the first sale occurred when land is not yet registered and the second
sale is done when land is already registered, appy first in time, priority in right.
FALSE 3. If sale is made by a non-owner, action to annul is proper.
TRUE 4. If sale is made by a non-owner, title passes by operation of law to grantee
when person who is not owner of the goods sold delivers it and later on acquires
title thereto.
TRUE 5. Stoppage in transit can be exercised by giving notice of claim to
carrier/bailee in possession of the goods.
FALSE 6. Stoppage in transit can be exercised by giving notice to buyer.
TRUE 7. In applying Article 1484 of the New Civil Code, if the seller chooses
foreclosure, no further action against buyer to recover any unpaid balance of the
price.
FALSE 8. In applying Article 1484 of the New Civil Code, if seller chooses specific
performance, seller is forever precluded from pursuing the other two remedies.
FALSE 9. If an immovable is sold by installment and buyer paid less than 2 years
installment, the first grace period is 60 days from date installment became due.
TRUE 10. If an immovable is sold by installment and buyer paid less than 2 years
installment, the second grace period is 30 days from notice of cancellation/demand
for rescission.
FALSE 11. The implied warranty that seller has a right to sell refers to the perfection
stage of the contract of sale.
FALSE 12. The implied warranty that seller has a right to sell is applicable to sheriff,
auctioneer, mortgagee and pledge.
TRUE 13. Warranty against eviction is applicable even if the buyer is evicted in part
from the subject matter of sale.
TRUE 14. There is no breach of warranty against eviction if there is yet no final
judgment which requires the buyer to be evicted from the subject matter of sale.
TRUE 15. Legal redemption may be exercised if any of the co-heirs sell his
hereditary rights to a stranger before partition.
16. legal redemption may be exercised if any of the co-owners sell his share
to a third person
TRUE 17. In the absence of any agreement, the period of redemption shall be 4
years from the date of the contract.
FALSE 18. If there is any agreement between the parties that the period of
redemption shall be 12 years, such agreement is void.