the final exam

FINAL EXAMINATION IN SALES

Saturday, 8 am

Essay type.Rule on the issues posed by the given facts of the case.

1. Hugo Mararac sold the land in question to Leonardo Mararac and Monica Resuello on March 27, 1971. At that time, the lot now owned by plaintiffs was owned by plaintiff Angel Mararac and Juanito Mararac, who was the husband of plaintiff Carlina Rafanan who died in 1976. Leonardo Mararac and Monica Resuello sold to the defendants the land in question on February 25, 1975. At that time, the lot in eastern side of the land in question was owned by Angel Mararac and his brother, Juanito Mararac. On April 8, 1975, defendants declared the land for tax purposes.At the time of sale of the land in question to the defendants in 1975 there was no offer to exercise right of legal redemption. At the time of the sale of the land in question to Leonardo Mararac and Monica Resuello in 1971, there was no offer of legal redemption. There was no legal redemption offered during the period between the first and second sale. The southern boundary of the lot in question is a barrio road with approximate area of 10 meters wide. The land in question in relation to plaintiffs' lot is not separated by ravine, by brook, trail, road or other servitude for the bene­fit of others. The land in question is fenced and was fenced even before the first sale in March 27, 1971. Defendants own rural lands other than the land in question.From Barangay Balogo, to Basing along the road touching the southern boundary of the land in question are lines of houses on both sides.House of plaintiffs is along the said road. A portion of the land in question on the side farther from the road, is used as a fishwell. Plaintiffs offered to redeem the land in the amount paid by the defendants as well as an amount for the return of investment of the property and interest, and payments of attorney's fees and are able and willing to make the payment.

ISSUE:

Whether or not the land in question maybe considered rural for purposes of legal redemption.

2. Petitioner contracted the services of the respondent, to sew for the petitioner of 20,762 pieces of assorted girls denims to the amount of P76,410.00.

At first, the respondent was told that the sewing of some of the pants was defective. She offered to take delivery of the defective pants. However, she was later told by [petitioner]'s representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the petitioner failed to pay her the aforesaid amount. This prompted her to hire the services of counsel who, on November 12, 1979, wrote a letter to the petitioner demanding payment of the aforesaid amount within ten days from receipt thereof. On February 7, 1990, the petitioner's vice-president-comptroller, wrote a letter to respondent's counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the petitioner for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount.

ISSUE:

Whether or not it is proper to impose interest at the rate of twelve percent (12%) per annum for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties.

3. Jerry Moles(petitioner) bought from Mariano Diolosa owner of Diolosa Publishing House a linotype printing machine(secondhand machine). Moles promised Diolosa that will pay the full amount after the loan from DBP worth P50,000.00 will be released. Private respondent on return issued a certification wherein he warrated that the machine was in A-1 condition, together with other express warranties. After the release of the of the money from DBP, Petitioner required the Respondent to accomplish some of the requirements. On which the dependant complied the requirements on the same day.

On November 29, 1977, petitioner wrote private respondent that the machine was not functioning properly. The petitioner found out that the said machine was not in good condition as experts advised and it was worth lesser than the purchase price. After several telephone calls regarding the defects in the machine, private respondent sent two technicians to make necessary repairs but they failed to put the machine in running condition and since then the petitioner wan unable to use the machine anymore.

ISSUE/S:

1.     Whether there is an implied warranty of its quality or fitness.

2.    Whether the hidden defects in the machine is sufficient to warrant a rescission of the contract between the parties.

4. Eugenia leased the lot  (LOT NO. 263, located in Iligan City, which has an area of 860 sq.m registered in the name of Eugenia Primero married to Alfredo Primero Sr. )to petitioner Irene Montecalvo for a monthly rental of P500.00.  Eugenia entered into an un-notarized Agreement with Irene, where the former offered to sell the property to the latter for P1,000.00 per square meter.  They agreed that Irene would deposit the amount of P40,000.00 which shall form part of the down payment equivalent to 50% of the purchase price.  They also stipulated that during the term of negotiation of 30 to 45 days from receipt of said deposit, Irene would pay the balance of P410,000.00 on the down payment.  In case Irene defaulted in the payment of the down payment, the deposit would be returned within 10 days from the lapse of said negotiation period and the Agreement deemed terminated. However, if the negotiations pushed through, the balance of the full value of P860,000.00 or the net amount of P410,000.00 would be paid in 10 equal monthly installments from receipt of the down payment, with interest at the prevailing rate.

Irene failed to pay the full down payment and she continued to stay on the disputed property, and still made several payments with an aggregate amount of P293,000.00.  Eugenia did not return the P40,000.00 deposit to Irene, and refused to accept further payments.Thereafter, Irene caused a survey of Lot No. 263 and the segregation of a portion equivalent to 293 square meters in her favor. However, Eugenia opposed her claim and asked her to vacate the property.

On June 18, 1996, Irene and Nonilon retaliated by instituting CM Case No. 11-3588 with the RTC of Lanao del Norte for specific performance, to compel Eugenia to convey the 293-square meter portion of Lot No. 263.

ISSUE:

1. WHETHER AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT IS BINDING [UPON] THE SELLER.
2. WHETHER A SELLER IN AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT CAN BE COMPELLED TO EXECUTE THE REQUIRED  DEED OF  SALE AFTER THE AGREED CONSIDERATION WAS PAID AND POSSESSION THEREOF DELIVERED TO AND ENJOYED BY THE BUYER.

5. Philippine Acetylene Co. purchased from Alexander Lim a motor vehicle described as Chevorlet 1969 model for P55K to be paid in instalments. As security for the payment of said promissory note, the appellant executed a chattel mortgage over the same motor vehicle in favor of said Alexander Lim. Then, Lim assigned to the Filinvest all his rights, title, and interests in the promissory note and chattel mortgage by virtue of a Deed of Assignment.Phil Acetylene defaulted in the payment of nine successive installments. Filinvest sent a demand letter. Replying thereto, Phil Acetylene wrote back of its desire to return the mortgaged property, which return shall be in full satisfaction of its indebtedness. So the vehicle was returned to the Filinvest together with the document “Voluntary Surrender with Special Power of Attorney To Sell.” Filinvest failed to sell the motor vehicle as there were unpaid taxes on the said vehicle. Filinvest requested the appellant to update its account by paying the installments in arrears and accruing interest. Filinvest offered to deliver back the motor vehicle to the appellant but the latter refused to accept it, so appellee instituted an action for collection of a sum of money with damages.Phil Acetylene’s defense: The delivery of the motor vehicle to Filinvest extinguished its money obligation as it amounted to a dation in payment. Assuming arguendo that the return did not extinguish, it was justified in refusing payment since the appellee is not entitled to recover the same due to the breach of warranty committed by the original vendor-assignor Alexander Lim.The issue if there was dation in payment that extinguished Phil Acetylene’s obligation?

6. A certain Jose de los Santos owned a 98,254 square-meter parcel of land designated as Lot No. 785, PLs-32 located at Balo-Andang, San Ramon, San Pascual (now Claveria), Masbate; the property is specifically described in Original Certificate of Title (OCT) No. P-671 issued on 31 May 1956. On 31 October 1961, Jose sold, in a private document, a 2 1/4 hectare portion thereof to the private respondents. On 26 November 1963, however, he executed another deed of sale which he acknowledged before a notary public. Private respondents took possession of the portion sold to them immediately after the 1961 sale and declared the same for taxation purposes in the name of private respondent Ciriaco Flores; private respondents likewise paid the taxes thereon.

On 3 January 1963, Jose de los Santos sold one-half of Lot No. 785 to petitioner Lorenzo Berico. Thereafter, or on 30 March 1963, Jose's minor children sold to the same petitioner the remaining half. Jose de los Santos represented his children in this transaction.

Petitioner Berico was aware of the 1961 sale of a portion of the lot to the private respondents and of the latter's possession thereof.

Despite such knowledge and recognition of the sale in favor of and the possession of the property by the private respondents, petitioner Berico registered on 5 June 1968 the two deeds of sale in his favor and caused the cancellation of OCT No. P-671; the latter also secured the issuance in his name of Transfer Certificate of Title (TCT) No. T-1346. He paid the appropriate taxes thereon only from 1973 to 1986. It appears, however, that he declared the property for taxation purposes in his wife's name in 1968.

On the other hand, it was only on 8 November 1978 that the private respondents registered the deed of sale in their favor after discovering the cancellation of OCT No. P-671 and issuance in favor of petitioner Berico of TCT No. T-1346.

On 14 December 1978, private respondents filed against the petitioners a complaint for "Annulment of Title" with the then Court of First Instance (now Regional Trial Court) of Masbate.

Issue:

In the double sale of an immovable property under Article 1544 of the Civil Code, does prescription bar an action by the first vendees, who are in possession of the said property, against the second vendee for the annulment of a transfer certificate of title over the property procured by the latter who has knowledge of the first sale and who recognizes the first vendees' possession?

7. Hanopol claims ownership over the land by virtue of a series of purchases by means of private documents from the Siapos. Pilapil asserts his right on the strength of a duly notarized deed executed by the owners executed in his favour and registered under Act. No. 3344.

Issue:

WHETHER the registration of the second sale in favor of Pilapil affects Hanopol’s rights as the first vendee.

8. Atkins Kroll & Co. sent a letter to B. Cu HianTek on September 13, 1951, offering  cartons of Luneta brand Sardines subject to reply by September 23, 1951. HianTek unconditionally accepted the said offer through a letter delivered on September 21, 1951, but Atkins failed to deliver the commodities due to the shortage of catch of sardines by the packers in California.

HianTek, therefore, filed an action for damages in the CFI of Manila which granted the same in his favor.

Atkins herein contends that there was no such contract of sale but only an option to buy, which was not enforceable for lack of consideration because it is provided under the 2nd paragraph of Article 1479 of the New Civil Code that "an accepted unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price.” Atkins also insisted that the offer was a mere offer of option, because the "firm offer" was a continuing offer to sell until September 23.

ISSUE:Whether  a contract of sale was constituted between the parties or only a unilateral promise to buy.

9. Nicolas Sanchez and SeverinaRigos executed an instrument entitled "Option to Purchase," whereby Mrs. Rigos agreed, promised and committed  to sell to Sanchez a parcel of land within two (2) years from said date with the understanding that said option shall be deemed terminated and elapsed if Sanchez shall fail to exercise his right to buy the property within the stipulated period. Inasmuch as several tenders of payment made by Sanchez within said period, were rejected by Mrs. Rigos, on March 12, 1963, the former deposited said amount with the Court of First Instance of Nueva Ecija and commenced against the latter the present action, for specific performance and damages.

Rigos contended that the contract between them was only  aunilateral promise to sell, and the same being unsupported by any valuable consideration, by force of the New Civil Code, is null and void.

Sanchez alleged in his compliant that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option.

The lower court rendered judgment in favor of Sanchez and ordered Rigos to accept the sum Sanchez judicially consigned, and to execute in his favor the requisite deed of conveyance.

ISSUE:Whether there was a contract to buy and sell between the parties or only a unilateral promise to sell.

10. In the second week of December 1988, Filemon Flores, respondent, purchased from Supercars Management and Development Corporation, petitioner, an Isuzu Carter Crew Cab.  Upon delivery of the vehicle on December 27, 1988, respondent paid petitioner the 30% down payment, plus premium for the vehicle’s comprehensive insurance policy amounting to P7,374.80. The RCBC financed the balance of the purchase price. Its payment was secured by a chattel mortgage of the same vehicle.
A day after the vehicle was delivered, respondent used it for his family’s trip to Bauang, La Union. While traversing the national highway in Tarlac, Tarlac, the fan belt of the vehicle snapped. Then its brakes hardened after several stops and did not function properly; the heater plug did not also function; the engine could not start; and the fuel consumption increased. Upon their return to Manila in the first week of January 1989, respondent complained to petitioner about the defects of the vehicle. Marquez then had the vehicle repaired and returned it to respondent that same day, assuring the latter that it was already in good condition.  But after driving the vehicle for a few days, the same defects resurfaced, prompting respondent to send petitioner a letter dated January 30, 1989 rescinding the contract of sale and returning the vehicle due to breach of warranty against hidden defects. A copy of the letter was furnished to RCBC.
On March 1, 1989, respondent sent petitioner a letter demanding the refund of his down payment, plus the premium he paid for the vehicle’s insurance.Petitioner failed to comply with petitioner’s demand. Consequently, respondent stopped paying the monthly amortization for the vehicle.On March 21, 1989, RCBC sent respondent a letter demanding that he settle his past overdue accounts for February 15 and March 15, 1989. In reply, respondent, through a letter dated March 31, 1989, informed RCBC that he had rescinded the contract of sale and had returned the vehicle to petitioner. This prompted RCBC to file with the Office of the Clerk of Court and Ex-Officio Sheriff, Regional Trial Court, Quezon City, a Petition for Extra-judicial Foreclosure of Chattel Mortgage.

Issue:Whether Marquez and Catley committed any breach of warranty against hidden defects, claiming that the vehicle had only “minor and inconsequential defects” which “were promptly and satisfactorily repaired by petitioner Supercars pursuant to its warranty as the seller.” For in the part of RCBC, is it's claim that it has no liability whatsoever against respondent correct because it merely enforced its right under the chattel mortgage law.

END OF THE EXAMINATION