2007

Q # 5: What are obligations without an agreement? Give five examples of situations giving rise to this
type of obligations?

SUGGESTED ANSWER:

Obligations without an agreement are those which are not based on contract. Apart from contracts,
obligations may arise from;

Law

Quasi-contract

Delict

Quasi-delict

Examples of situations giving rise to “obligations without an agreement” are as follows:

1. A law was passed requiring the payment of a specific kind of tax.

2. If something is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises. (Art. 2154)
3. When a person voluntarily takes charge of the agency or management of the business or
property of another, without any power from the latter, he is obliged to continue the same until
the termination of the affair and its incidents, or to require the person concerned to substitute
him, if the owner is in a position to do so. This juridical relation does not arise either of these
instances:
a. When the property or business is not neglected or abandoned
b. If in fact the manager has been authorized by the owner ( Art. 2144)
4. A person, through negligence, caused damage or injury to another.
5. A person intentionally damaged a property of another.
6. The obligation by the recipient to return what has been paid or delivered to him by mistake, the
recipient not having the right to demand it, is one that arises from quasi-contract (Art. 2154)
7. The obligation of the culprit to pay damages for causing the death of a person is one arises from
delict or crime (Art. 2206)
8. The obligation of the tortfeasor to pay damages for the injuries or damages caused by him to
another person due to his act or omission, characterized by fault or negligence, is one which
arises from quasi-delict (Art. 2176)
9. The obligation to pay reward for a certain act or accomplishment pursuant to a promise made to
the general public is an obligation based on unilateral promise.

 2008
Q # 18
Facts: AB Corp. entered into a contract with XY Corp. whereby the former agreed to construct
the research and laboratory facilities of the latter. Under the terms of contract, AB Corp.
agreed to complete the facility in 18 months, at the total contract price of P10 Million. XY
Corp. paid 50% of the total contract price, the balance to be paid upon completion of the
work. The work stated immediately, but AB Corp. later experienced work slippage because of
labor unrest in his company. AB Copr.’s employees claimed that they are not being paid on
time; hence, the work slowdown. As of the 17 th month, work was only 45% completed. AB
Corp. asked for extension of time, claiming that its labor problems is a case of fortuitous
event, but this was
(B): Can XY Corp. unilaterrally and immediately cancel the contract? (2%)

SUGGESTED ANSWER:
No, XY Corp. cannot unilaterally and immediately cancel the contract. In the absence of any
stipulation for automatic rescission, rescission must be judicial (Art. 1191, Civil Code).

Q # 17

FACTS: Felipe borrowed $100 from Gustavo in 1998, when the Phil P – US $ exchange rate was
P56 – US $1. On March 1, 2008, Felipe tendered to Gustavo a cashier’s check in the amount of
P4,135 in payment of his US $100 debt, based on the Phil P – US $ exchange rate at that time.
Gustavo accepted the check, but forgot to deposit it until Sept. 12 , 2008. His bank refused to
accepted the check because it had become stale. Gustavo now wants Felipe to pay him, in
cash the amount of P5,600. Claiming that the previous payment was not in legal render, and
that there has been extraordinary deflation since 1998, and therefore, Felipe should pay him
the value of the debt at the time it was incurred. Felipe refused to pay him again, claiming
that Gustavo is stopped from raising the issue of legal tender, having accepted the check in
March, and that it was Gustavo’s negligence in not depositing the check immediately that
caused the check to become stale.

(C) Can Felipe compel Gustavo to receive US $100 instead?

SUGGESTED ANSWER:

Felipe cannot compel Gustavo to receive US$100 because under RA 529, payment of loans
should be at Philippine currency at the rate of exchange prevailing at the time of the stipulated
date of payment. Felipe could only compel Gustavo to receive US$ 100 if they stipulated that
obligation be paid in foreign currency (R.A. 4100).

Q # 13

Facts: Raymond, single, named his sister Ruffa in his will as devise of a parcel of land which he
owned. The will imposed upon Ruffa the obligation of preserving the land and transferring it,
upon her death, to her illegitimate daughter scarlet who was then only one year old. Raymond
later died, leaving behind his widowed mother, Ruffa and Scarlet.

(C): If Ruffa predeceases Raymond, can Scarlet inherit the property directly from Raymond?
(2%)
 SUGGESTED ANSWER: If Ruffa predeceases Raymond, Raymond's widowed mother will be
entitled to the inheritance. Scarlet, an illegitimate child, cannot inherit the property by intestate
succession from Raymond who is a legitimate relative of Ruffa (Art. 992, Civil Code). Moreover,
Scarlet is not a compulsory heir of Raymond, hence she can inherit only by testamentary
succession. Since Raymond executed a will in the case at bar, Scarlet may inherit from Raymond.

 2009]
Q # 17

Facts: Rosario obtained a loan of P100,000.00 from Jennifer, and pledged her diamond ring.
The contract signed by the parties stipulated that if Rosario is unable to redeem the ring on
the due date, she will execute a document in favor of Jennifer providing that the ring shall
automatically be considered full payment of the loan.

(B) : Will your answer to (A) be the same if the contract stipulates that upon failure of Rosario
to redeem the ring on the due date, Jennifer may immediately sell the ring and appropriate
the entire proceeds thereof for herself as full payment of the loan?

SUGGESTED ANSWER:
QUESTIONS:

2006
II

Facts: Spouses Biong and Linda wanted to sell their house. They found a prospective buyer, Ray.
Linda negotiated with Ray for the sale of the property. They agreed on a fair price of 2 Million.
Ray sent Linda a letter confirming his attention to buy the property. Later, another couple,
Bernie and Elena, offered a similar house at a lower price of P1.5 Million. But Ray insisted on
buying the house of Biong and Linda for sentimental reason. Ray prepared a deed of sale to be
signed by the couple and a manager’s check for P2 Million. After receiving the P2 Million, Biong
signed the deed of sale. However, Linda was not able to sign it because she was abroad. On her
return, she refused to sign the document saying she changed her mind. Linda filed a suit for
nullification of the deed of sale and for moral and exemplary damages against Ray.

(B) Does Ray have any cause of action against Biong and Linda? Can he also recover damages
from the spouses? Explain.

2007
I

Distinguish the following concepts:

Illegal and impossible conditions in a simple donation vs. Illegal and impossible
conditions in an onerous donation.

III

Explain the following concepts and doctrines and give an example of each:

(A) Concept of trust de son tort (constructive trust)

What are obligations without an agreement? Give five examples of situations giving rise to this
type of obligations?
2008
VII

Facts: Anthony bought a piece of untitled agricultural land from Bert. Bert, in turn, acquired the
property by forging carlo’s signature in a deed of sale over the property. Carlo had been in
possession of the property for 8 years, declared it for tax purposes, and religiously paid all taxes
due on the property. Anthony is not aware of the defect in Bert’s title, but has been in actual
possession of the property from the time he bought it from Bert, who had never been in
possession of the property for one year.

Q-A : Can Anthony acquire ownership of the property by acquisitive prescription? How many
more years does he have possess it to acquire ownership?

XIII

Facts: Raymond, single, named his sister Ruffa in his will as devise of a parcel of land which he
owned. The will imposed upon Ruffa the obligation of preserving the land and transferring it,
upon her death, to her illegitimate daughter scarlet who was then only one year old. Raymond
later died, leaving behind his widowed mother, Ruffa and Scarlet.

(C): If Ruffa predeceases Raymond, can Scarlet inherit the property directly from Raymond?
(2%)

SUGGESTED ANSWER: If Ruffa predeceases Raymond, Raymond's widowed mother will be

entitled to the inheritance. Scarlet, an illegitimate child, cannot inherit the property by intestate
succession from Raymond who is a legitimate relative of Ruffa (Art. 992, Civil Code). Moreover,
Scarlet is not a compulsory heir of Raymond, hence she can inherit only by testamentary
succession. Since Raymond executed a will in the case at bar, Scarlet may inherit from Raymond.

XV

Eduardo was granted a loan by XYZ Bank for the purpose of improving a building which is XYZ
leased from him. Eduardo, executed the promissory note (“PN”) in favor of the bank, with his
friend Recardo as co-signatory. In the PN, they both acknowledged that they are “individually
and collectively” liable and waived the need for prior demand. To secure the PN, Recordo
executed a real estate mortgage on his own property. When Eduardo defaulted on the PN, XYZ
stopped payment of rentals ion the building on the ground that legal compensation had set in.
Since there was still a balance due on the PN after applying the rentals, XYZ foreclosed the real
estate mortgage over Recardo’s property. Recardo opposed the foreclosure on the ground that
he is only a co-signatory; that no demand was made upon him for payment, and assuming he is
liable, his liability should not go beyond half the balance of the loan. Further, Recardo said that
when the bank invoked compensation between the rentals and the amount of the loan, it
amounted to a new contract or novation, and had the effect of extinguishing the security since
he did not give his consent (as owner of the property under the real estate mortgage) thereto.

Q-A : Can XYZ Bank validly assert legal compensation?

Q-B : Can Recardo’s property be foreclosed to pay the full balance of the loan?

Q-C : Does Recardo have basis under the Civil Code for claiming that the original contract was
novated?

XVI

Facts: Dux leased his house to Iris for a period of 2 years, at the rate of P25,000.00 monthly,
payable annually in advance. The contract stipulated that it may be renewed for another 2-year
period upon mutual agreement of the parties. The contract also granted Iris the right of first
refusal to purchase the property at anytime during the lease, if Dux decides to sell the property
at the same price that the property is offered for sale to a third party. Twenty-three months
after execution of the lease contract, Dux sold breach of her right of first refusal. Dux said there
was no breach beacause the property was sold to his mother who is not a third party. Iris filed
an action to rescind the sale and to compel Dux to sell the property to her at the same price.
Alternatively, she asked the court to extend the lease for another 2 years on the same terms.

Q-B : Will the alternative prayer for extension of the lease prosper?

XVII

Facts: Felipe borrowed $100 from Gustavo in 1998, when the Phil P – US $ exchange rate was
P56 – US $1. On March 1, 2008, Felipe tendered to Gustavo a cashier’s check in the amount of
P4,135 in payment of his US $100 debt, based on the Phil P – US $ exchange rate at that time.
Gustavo accepted the check, but forgot to deposit it until Sept. 12, 2008. His bank refused to
accept the check because it had become stale. Gustavo now wants Felipe to pay him, in cash the
amount of P5,600. Claiming that the previous payment was not in legal render, and that there
has been extraordinary deflation since 1998, and therefore, Felipe should pay him the value of
the debt at the time it was incurred. Felipe refused to pay him again, claiming that Gustavo is
stopped from raising the issue of legal tender, having accepted the check in March, and that it
was Gustavo’s negligence in not depositing the check immediately that caused the check to
become stale.

Q-A : Can Gustavo now raised the issue that the cashier’s check is not legal tender?

SUGGESTED ANSWER:

Q-C : Can Felipe compel Gustavo to receive US $100 instead?

SUGGESTED ANSWER:
Felipe cannot compel Gustavo to receive US$100 because under RA 529, payment of loans
should be at Philippine currency at the rate of exchange prevailing at the time of the stipulated
date of payment. Felipe could only compel Gustavo to receive US$ 100 if they stipulated that
obligation be paid in foreign currency (R.A. 4100).

XVIII

Facts: AB Corp. entered into a contract with XY Corp. whereby the former agreed to construct
the research and laboratory facilities of the latter. Under the terms of contract, AB Corp. agreed
to complete the facility in 18 months, at the total contract price of P10 Million. XY Corp. paid
50% of the total contract price, the balance to be paid upon completion of the work. The work
stated immediately, but AB Corp. later experienced work slippage because of labor unrest in his
company. AB Copr.’s employees claimed that they are not being paid on time; hence, the work
slowdown. As of the 17th month, work was only 45% completed. AB Corp. asked for extension of
time, claiming that its labor problems is a case of fortuitous event, but this was by XY Corp.
When it became certain that the construction could not be finished on time, XY Corp. sent
written notice requiring AB Corp. to immediately vacate the premises.

Q-A : Can the labor unrest be considered a fortuitous event?

Q-B : Can XY Corp. unilaterrally and immediately cancel the contract? (2%)

SUGGESTED ANSWER:
No, XY Corp. cannot unilaterally and immediately cancel the contract. In the absence of any
stipulation for automatic rescission, rescission must be judicial (Art. 1191, Civil Code).

2009
I

TRUE or FALSE:

A. The doctrine of processual presumption allows the court of the forum to presume that the
foreign law applicable to the case is the same as the local or domestic law.
B. In reserve troncal, all reservatarios (reserves) inherit as a class and equal shares regardless
of their proximity in degree to the prepositus.
C. An oral partnership is valid.
D. An oral promise of guaranty is valid and binding.
E. A dead child can be legitimated.

X
Rommel’s private car, while being driven by the regular family driver, Amado, hits a pedestrian
causing the latter’s death. Rommel is not in the car when the incident happened.

Q-A : Is Rommel liable for damages to the heirs of the deceased? Explain?

Q-B : Would your answer be the same if Rommel was in the car at the time of the accident?
Explain.

XV

Facts: Sarah had a deposit in a savings account with Filipino Universal Banl in the amount of five
million pesos (P5,000,000.00). To buy a new car, she obtained loan from the same bank in the
amount of P1,200,000.00, payable in twelve monthly installments. Sarah issued in favor of the
bank postdated checks, each in the amount of P100,000.00, to cover the twelve monthly
installment payments. On the third, fourth and fifth months, the corresponding checks bounced.

The bank then declared the whole obligation due, and proceeded to deduct the amount of one
million pesos (p1,000,000.00) from Sarah’s deposit after notice to her that this is a form of
compensation allowed by law.

Q : Is the bank correct?

XVII

Facts: Rosario obtained a loan of P100,000.00 from Jennifer, and pledged her diamond ring. The
contract signed by the parties stipulated that if Rosario is unable to redeem the ring on the due
date, she will execute a document in favor of Jennifer providing that the ring shall automatically
be considered full payment of the loan.

Q-B) : Will your answer to (A) be the same if the contract stipulates that upon failure of Rosario
to redeem the ring on the due date, Jennifer may immediately sell the ring and appropriate the
entire proceeds thereof for herself as full payment of the loan?

XIX

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 @007, 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 the grounds of pari delicto, laches and acquisitive prescription. Decide the case with reasons.