PRE-FINAL EXAM ON REGULATORY FRAMEWORK

1. 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 cannot 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.

(a) Is the contract valid? Explain.

(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? Reasons.

2. Before he left for Riyadh to work as a mechanic, Pedro left his Adventure van with Tito,
understanding that the latter could use it for one year for his personal or family use while Pedro works
in Riyadh. He did not tell Tito that the brakes of the van were faulty. Tito had the van tuned up and the
brakes repaired. He spent a total amount of P15,000.00. After using the vehicle for two weeks, Tito
discovered that it consumed too much fuel. To make up for the expenses, he leased it to Annabelle.
Pedro returned to the Philippines two months later and asked Tito to return the van. Unfortunately,
while being driven by Tito, the van was accidentally damaged by a cargo truck without his fault.

(a) Who shall bear the P15,000.00 spent to repair the van? Explain.
(b) Who shall bear the costs for the van's fuel, oil, and other materials while it
was with Tito? Explain.
(c) Does Pedro have the right to retrieve the van even before the lapse of one
year? Explain.
(d) Who shall bear the expenses for the accidental damage caused by the cargo
truck, granting that the truck driver and truck owner is insolvent? Explain

3. A, upon request, loaned his passenger Jeepney to B to enable B to bring his sick wife from
Paniqui, Tarlac to the Philippine General Hospital in Manila for treatment. On the way back to Paniqui,
after leaving his wife at the hospital, people stopped the passenger Jeepney. B stopped for them and
allowed them to ride onboard, and accepting payment from them just as in the case of ordinary
passenger Jeepneys plying their route. As B was crossing Bamban, there was an onrush of Lahar from
MtPinatubo and the Jeep that was loaned to him was wrecked.
(a) What do you call the contract that was entered into by A and B with respect
to the passenger Jeepney that was loaned by A to B to transport the latter's
sick wife to Manila?
(b) Is B obliged to pay A for using the passenger jeepney?
(c) Is B liable to A for the loss of the Jeepney?

4. A farmer couple borrowed money from a local merchant. To guarantee payment, they left the
Title of their land with the merchant for him to hold until they paid the loan.

Is there a:

a) contract of pledge.
b) contract of mortgage.
c) contract of antichresis.
b) None of the above.

Explain your answer.

5. Siga-an granted a loan to Villanueva in the amount of P540,000.00. Such agreement was not
reduced to writing. Siga-an demanded interest which Villanueva paid in cash and checks. The total
amount Villanueva paid accumulated to P1,200,000.00. Upon the advice of her lawyer, Villanueva
demanded the return of the excess amount of P660,000.00, which was ignored by Siga-an. Is the
payment of interest valid? Explain.

RUBRIC
CRITERIA PERFORMANCE INDICATOR POINTS
Completeness Answers the specific question 10
that was asked. Answered the
entire question, not just a part of
it.
Strucre Response to each question is 6
well organized and clearly
written.
Writing skills Answer is clearly written, in 4
complete sentences, with
minimal errors in grammar and
spelling
TOTAL 20