1.Distinguish between a conditional sale, on the one hand, and an 5.
5. On June 15, 1995, Jesus sold a parcel of registered land to Jaime. On
absolute sale, on the other hand.
Absolute- if full payment is made, there is an immediate transfer of ownership.
Conditional- if payment will be made in installment or there is a condition
before the transfer of a full ownership.
2. A granted B the exclusive right to sell his brand of Maong pants in
Isabela, the price for his merchandise payable within 60 days from
delivery, and promising B a commission of 20% on all sales. After the
delivery of the merchandise to B but before he could sell any of them, B’s
store in Isabela was completely burned without his fault, together with all
of A's pants. Must B pay A for his lost pants? Why?
The contract between A and B is a sale, not an agency to sell because the
money is payable by B upon 60 days after delivery even if B is unable to resell
it. If B were an agent, he is not compelled to pay the price if he is unable to
resell it.
3. Answer the following:
a. Can a husband and wife form a limited partnership to engage in
real estate business, with the wife being a limited partner?
b. Can two corporations organize a general partnership under the
Civil Code of the Philippines?
c. Can a corporation and an individual form a general partnership?
a.) Yes. A husband and wife cannot form a universal partnership under the
Civil Code. A husband and wife may legally form a limited partnership because
it is not a universal partnership.
b.) No, a corporation generally cannot engage into a partnership agreement
with an individual or another corporation. But, if certain conditions are met, this
may be allowed.
c.) No, corporations are not permitted to form partnerships with both other
corporations and persons unless they comply with specific legal conditions.
4. State the basic difference (only in their legal effects) Between a
contract to sell, on the one hand, and a contract of sale, on the other.
During the duration of the contract of sale, the seller forfeits all rights, titles,
and interests in the property. In a contract to sell, the seller keeps title until they
are paid in full.
June 30, 1995, he sold the same land to Jose. Who has a better right if: a)
the first sale is registered ahead of the second sale, with knowledge of
the latter. Why? (3%) b) the second sale is registered ahead of the first
sale, with knowledge of the latter? Why?
(a) The first buyer. Even if the first buyer was aware of the second
transaction, if his sale was registered first, he had better rights. Even if
he had acted dishonestly by registering after learning of the second
sale, he would have been justified in doing so because the sale to him
occurred earlier in time and thus has legal priority. In the context of a
double sale of land, knowledge of a previous transaction demonstrates
faith.
(b) The first buyer. If a second sale is registered before the first, but with
knowledge of the previous sale, the first buyer retains priority. This is
due to the fact that the second buyer registered his transaction
knowing that the property had already been sold.
6. Distinguish co-ownership from partnership.
Co-Ownership is when multiple people jointly own a property. Co-ownership
occurs when two or more people buy a property without purchasing it for a
profit.
In a partnership, two or more people work together to conduct a single
enterprise for profit. They agree verbally to share the company's gains and
losses.
7. CX executed a special power of attorney authorizing DY to secure a
loan from any bank and to mortgage his property covered by the owner’s
certificate of title. In securing a loan from MBank, DY did not specify tha
t he was acting for CX in the transaction with said bank. Is CX liable for
the bank loan? Why or why not? Justify your answer.
Yes, CX is liable for the bank loan. As a general rule, the principal cannot be
held liable for the contracts entered into by the agent acting in his own name.
However, such a rule does not apply if the transaction involves a thing
belonging to the principal. Since DY secured a loan from MBank after having
mortgaged CX's property, the contract is deemed entered into between CX and
MBank.
8. A lawyer was given an authority by means of a Special Power of
Attorney by his client to sell a parcel of land for the amount of P3 Million.
Since the client owed the lawyer Pl Million in attorney's fees in a prior
case he handled, the client agreed that if the property is sold, the lawyer
was entitled to get 5% agent's fee plus Pl Million as payment for his
unpaid attorney's fees. The client, however, subsequently found a buyer
of his own who was willing to buy the property for a higher amount. Can
the client unilaterally rescind the authority he gave in favor of his lawyer?
Why or why not?
No, the agency in the present scenario is one that is linked with an interest.
Agency is typically revocable at will unless it was created for the mutual benefit
of the agent and the principal. In this instance, the lawyer's interest goes
beyond only his share of the commission from the sale of the property and
includes the right to recover his unpaid legal fees. Therefore, it cannot be
revoked at will.
9. X and Y are partners in a shop offering portrait painting. Y provided the
capital and the marketing while X was the portrait artist. They accepted
the PS0,000.00 payment of Kyla to do her portrait but X passed away
without being able to do it. Can Kyla demand that Y deliver the portrait
she had paid for because she was dealing the with business
establishment and not with the artist personally? Why or why not?
No, Kyla cannot demand Y to deliver the portrait. The partnership is effectively
dissolved by X's passing. Moreover, even though the partnership itself was the
other party in the contract, it was X who was tasked in creating the portrait for
Kyla. Because it has become impossible to perform the duty due to the fact
that X has passed away before creating the portrait, it is no longer valid. In an
obligation to do, if the prestation have become physically or legally impossible
to do without the debtor's fault, the debtor is relieved from those obligations.
10. Explain the nature of an option contract.
An option contract is a contract where one-person (the offeror/promissor)
grants to another person (the offeree/promisee) the right or privilege to buy (or
to sell) a determinate thing at a fixed price, if he or she chooses to do so within
an agreed period.
11. Distinguish guaranty from surety.
● Guaranty is collateral while Surety is an original promissory
undertaking.
● In a guaranty, the guarantor is subsidiarily liable; whereas, in a
suretyship, the surety binds himself solidarily with the principal debtor.
● The guarantor binds himself to pay if the principal cannot pay. The
surety undertakes to pay if the principal does not pay.
● The guarantor is the insurer of the solvency of the debtor. The surety is
the insurer of the debt.
● The guarantor can avail of the benefit of excussion and division in
case the creditor proceeds against him. The surety cannot avail of the
benefit of excussion and division.
12. Distinguish commodatum and mutuum.
The object to be borrowed in MUTUUM must be consumable, with
ownership passing to the borrower who then has the responsibility of
returning the same item to the lender in an equivalent quantity and of
equal sort and quality. In COMMODATUM, the object borrowed is usually a
non-consumable thing the ownership of which is not passed to the
borrower who incurs the duty to return the very thing to the lender.
13. Explain the concept of necessary deposit.
● When it is made in compliance with a legal obligation
● When it takes place on the occasion of any calamity, such as fire,
storm, flood, pillage, shipwreck, or other similar events
● Travelers in hotels or inns
● Made by passengers with common carriers
14. When are special powers of attorney necessary in a contract of
agency?
Special Power of Attorney (SPA) allows the principal to appoint an
attorney in fact or agent to perform specific act for and on his behalf. In
other words, this can be also called authorization.
The law provided a total of 15 situations where a special power of attorney
is necessary which can be summarized or reduced into three (3) acts:
(1) If an act is a strict dominion or ownership. Examples: to make
payment, to convey property to others, and other specific acts.
(2) For gratuitous act (voluntaily giving something without expecting in
return). In order for the agent to perform this, the principal must
execute a special power of attorney.
(3) In contracts where personal trust and confidence is the essence of the
agreement.