examination sampler

1.A Build-Operate-Transfer Contract for the waste to energy project was signed between JANCOM and the Philippine Government. The BOT Contract was submitted to President Ramos for approval but was then too close to the end of his term that his term expired without him signing the contract. He, however, endorsed the same to incoming President Estrada. With the change in administration came changes in policy and economic environment, thus the BOT contract was not pursued and implemented. JANCOM appealed to the President for reconsideration and despite the pendency of the appeal, MMDA caused the publication of an invitation to pre-qualify and submit proposals for solid waste management.

Question: Is  there is a valid and binding contract between the Republic of the Philippines and JANCOM? Explain.

There is a valid and binding contract between JANCOM and the Republic of the Philippines. Under Articles 1305 of the Civil Code, “A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.” Art. 1315 of the Civil Code provides that a contract is perfected by mere consent. Consent, on the other hand, is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. In the case at bar, the signing and execution of the contract by the parties clearly show that, as between the parties, there was a concurrence of offer and acceptance with respect to the material details of the contract, thereby giving rise to the perfection of the absence of President’s signature is untenable. Significantly, the contract itself provides that the signature of the President is necessary only for its effectivity, not its perfection.

There being a perfected contract, MMDA cannot revoke or renounce the same without the consent of the other. From the moment of perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. It is a general principle of law that no one may be permitted to change his mind and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party.

2. The property was previously owned by Douglas Anama’s parents, who mortgaged it to Philippine Savings Bank and later was foreclosed. Douglas and the PSBank entered into an agreement denominated as a Contract to Buy whereby the bank agreed to sell to Douglas the said land with all the improvements thereon. The Contract to Buy provides that Anama shall purchase the property of a certain amount and shall pay to the PSBank; it also provides that Anama shall apply with the bank for a loan, the proceeds of which answer for the balance of the purchase price; should the petitioner fail to comply with any of the terms of contract, all amounts paid are forfeited in favor of PSBank, the latter having the option either to demand full payment of total price or to rescind the contract.
Anama was able to pay the first and second installments; however, he failed to pay the third installment when it became due. There were several transactions between them to settle the amount due. But later, the bank executed an Affidavit of Cancellation rescinding the contract, and forfeited the payments made by Anama which were applied as rentals of the use of the property. Anama was then advised to vacate the property despite his opposition to the rescission of the Contract to Buy. The bank sold the property to spouses Co, in whose favor TCT was issued. Anama then filed a case for Declaration of Nullity of Deed of Sale, Cancellation of TCT, and Specific Performance with Damages.

Question: Is  the rescission of the Contract to Buy valid?

Since Anama failed to pay the third installment, PSBank was entitled to rescind the Contract to Buy. The contract provides the Bank two options in the event that petitioner fails to pay any of the installments. This was either (1) to rescind the contract outright and forfeit all amounts paid by the petitioner, or (2) to demand the satisfaction of the contract and insist on the full payment of the total price. After petitioner repeatedly failed to pay the third installment, the Bank chose to exercise the first option.

The Contract to Buy is actually a contract to sell whereby the vendor reserves ownership of the property and is not to pass until full payment. Such payment is a positive suspensive condition, the failure of which is not a breach but simply an event that prevents the obligation of the vendor to convey title from acquiring binding force. Since ownership of the subject property was not pass to petitioner until full payment of the purchase price, his failure to pay on the date stipulated, or in the extension granted, prevented the obligation for the Bank to pass title of the property to Anama. The bank could validly sell the property to the spouses Co, the right of the bank to sell the property being unequivocal.

3. Gorgonio Macainan was the owner of the several properties. After his death, his estate was divided among his heirs, including his children by his first wife, a contract (Anita, Rosita & Berbonio) As Berbonio had predeceased Gorgonio, her children ( Rafael, Lourdes&Teresita surnamed Medalla) succeeded to her inheritance. Respondents herein are the heirs of Rafael Medalla.

Rafael Medalla executed a Deed of Absolute Sale purporting to sell his share in the inheritance to Gorgonio Hilado. Later, he executed another”Deed of Absolute Sale in favor of Hilado over his share in another inherited property. Over the next 2 years, Hilado and Medalla executed 3 more contracts concerning the sold properties;” “ Memorandum of Agreement,”“Deed of Resale,” whereby Hilado resold to Medalla two of the 5 hectares a lot, and ”Agreement.”

Anita Macainan tried to redeem the first property that was sold from Hilado but she failed, so she filed a suit against Rafael and Hilado for legal redemption before the RTC. So, Rafael filed a cross-claim against Hilado, alleging that the first deed of sale was in fact an equitable mortgage to secure a loan from Hilado. The latter denied that the agreement between them was a loan but a Deed of Sale, reflecting their true agreement.

Question: Is the Deed of Absolute Sale executed by Medalla and Hilado  an equitable mortgage? Why?

Under Art. 1602 in relation to Art. 1604, a contract purporting to be an absolute sale is presumed to be an equitable mortgage (1) when the price of a sale with a right to reprchase is unusually inadequate; (2) when the vendor remains in possession as lessee or otherwise;(3) when upon or after the expiration of the right to repurchase another instrument extending the period of the redemption or granting a new period is executed;(4) when the purchaser retains for himself a part of the purchase price;(5) when the vendor binds himself to pay the taxes on the thing sold;(6) in any other case where it may be fairly inferred that the real intention of the parties is that the presence of any of these circumstances is sufficient for a contract to be presumed as an equitable mortgage.

In view of the conclusions we have reached, it is unnecessary to pass upon Hilado’s contention that respondents are bound by the terms of the “Deed of Sale” in question as the law between the parties. It will suffice to say that even if a document appears on its face to be a sale, the owner of the property may prove that the contract is really a loan with a mortgage that the document does not express the true intent and agreement of the parties.

4. On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita T. Ong(respondent). The said properties were mortgaged to a financial institution; Real Savings & Loan Association Inc. (RSLAI). The parties then executed a notarized deed of absolute sale with assumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that the petitioner (de Leon) shall execute a deed of assumption of mortgage in favor of Ong (respondent)after full payment of the P415,000. They also agreed that the respondent (Ong) shall assume the mortgage. The respondent then subsequently gave petitioner P415,000 as partial payment. On the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the respondent took repairs and made improvements in the properties. Subsequently, respondent learned that the same properties were sold to a certain Viloria after March 10, 1993 and changed the locks, rendering the keys given to her useless. Respondent proceeded to RSLAI but she was informed that the mortgage has been fully paid and that the titles have been given to the said person. Respondent then filed a complaint for specific performance and declaration of nullity of the second sale and damages. The petitioner contended that respondent does not have a cause of action against him because the sale was subject to a condition which requires the approval of RSLAI of the mortgage. Petitioner reiterated that they only entered into a contract to sell. The RTC dismissed the case. On appeal, the CA upheld the sale to respondent and nullified the sale to Viloria. Petitioner moved for reconsideration to the SC.

Question:  Is the contract entered by the parties   a “contract of sale” or a “contract to sell”?

In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of the contract. The non-payment of the price is a negative resolutory condition. Contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price. In the present case, the deed executed by the parties did not show that the owner intends to reserve ownership of the properties. The terms and conditions affected only the manner of payment and not the immediate transfer of ownership. It was clear that the owner intended a sale because he unqualifiedly delivered and transferred ownership of the properties to the respondent

5. Almeda and Engineering signed a contract, wherein Engineering undertook to fabricate, furnish and install the air-conditioning system in the latter’s building along Buendia Avenue, Makati in consideration of P210,000.00. Petitioner was to furnish the materials, labor, tools and all services required in order to so fabricate and install said system. The system was completed in 1963 and accepted by private respondent, who paid in full the contract price.

Almeda learned from the employees of NIDC of the defects of the air-conditioning system of the building. Almeda spent for the repair of the air-conditioning system. He now sues Engineering for the refund of the repair. Engineering contends that the contract was of sale and the claim is barred by prescription since the responsibility of a vendor for any hidden faults or defects in the thing sold runs only for 6 months (Arts 1566, 1567, 1571). Almeda contends that since it was a contract for a piece of work, hence the prescription period was ten years (Hence Art 1144 should apply on written contracts).

RTC found that Engineering failed to install certain parts and accessories called for by the contract, and deviated from the plans of the system, thus reducing its operational effectiveness to achieve a fairly desirable room temperature.

Questions:
1) Is the contract for the fabrication and installation of a central air-conditioning system in a building, one of “sale” or “for a piece of work”?

2)  Will the claim for refund prosper?

1) A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order, of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale.

A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work .

The contract in question is one for a piece of work. It is not petitioner’s line of business to manufacture air-conditioning systems to be sold “off-the-shelf.” Its business and particular field of expertise is the fabrication and installation of such systems as ordered by customers and in accordance with the particular plans and specifications provided by the customers. Naturally, the price or compensation for the system manufactured and installed will depend greatly on the particular plans and specifications agreed upon with the customers.

2)The original complaint is one for damages arising from breach of a written contract – and not a suit to enforce warranties against hidden defects – we here – with declare that the governing law is Article 1715 (supra). However, inasmuch as this provision does not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said provision states, inter alia, that actions “upon a written contract” prescribe in ten (10) years. Since the governing contract was executed on September 10, 1962 and the complaint was filed on May 8, 1971, it is clear that the action has not prescribed.

6. On July 18, 1990, JIMMY CO entrusted his car to BROADWAY MOTOR SALES CORPORATION - which is engaged in the sale, distribution and repair of motor vehicles who undertook to return the vehicle on July 21, 1990 fully serviced and supplied in accordance with the job contract. After JIMMY CO paid in full the repair bill, BMSD issued to him a gate pass for the release of the vehicle on said date. But came July 21, 1990, the latter could not release the vehicle as its battery was weak and was not yet replaced. Left with no option, petitioner himself bought a new battery nearby and delivered it to BMSD for installation on the same day. However, the battery was not installed and the delivery of the car was rescheduled to July 24, 1990 or three (3) days later. When petitioner sought to reclaim his car in the afternoon of July 24, 1990, he was told that it was carnapped earlier that morning while being road-tested by BMSD’s employee and said that the incident was reported to the police.

Having failed to recover his car and its accessories or the value thereof, petitioner filed a suit for damages against BMSD anchoring his claim on the latter’s alleged negligence. For its part, BROADWAY contended that it has no liability because the car was lost as a result of a fortuitous event - the carnapping.

QUESTIONS:

1) Who between the parties shall bear the loss of the vehicle?

2) Is carnapping considered a fortuitous event?

Broadway motors shall bear the loss since it assumed the risk when it accepted the repair of the vehicle, and besides, carnapping is not considered a fortuitous event. Thus it was ruled: 

On the merits. It is a not defense for a repair shop of motor vehicles to escape liability simply because the damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from another's rightful possession, as in cases of carnapping, does not automatically give rise to a fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking of another's property. It must be proved and established that the event was an act of God or was done solely by third parties and that neither the claimant nor the person alleged to be negligent has any participation. ⁹ In accordance with the Rules of evidence, the burden of proving that the loss was due to a fortuitous event rests on him who invokes it ¹⁰ — which in this case is the private respondent. However, other than the police report of the alleged carnapping incident, no other evidence was presented by private respondent to the effect that the incident was not due to its fault. A police report of an alleged crime, to which only private respondent is privy, does not suffice to establish the carnapping. Neither does it prove that there was no fault on the part of private respondent notwithstanding the parties' agreement at the pre-trial that the car was carnapped. Carnapping does not foreclose the pissibility of fault or negligence on the part of private respondent.

Even assuming arguendo that carnapping was duly established as a fortuitous event, still private respondent cannot escape liability. Article 1165 ¹¹ of the New Civil Code makes an obligor who is guilty of delay responsible even for a fortuitous event until he has effected the delivery. In this case, private respondent was already in delay as it was supposed to deliver petitioner's car three (3) days before it was lost. Petitioner's agreement to the rescheduled delivery does not defeat his claim as private respondent had already breached its obligation. Moreover, such accession cannot be construed as waiver of petitioner's right to hold private respondent liable because the car was unusable and thus, petitioner had no option but to leave it.

Assuming further that there was no delay, still working against private respondent is the legal presumption under Article 1265 that its possession of the thing at the time it was lost was due to its fault. ¹² This presumption is reasonable since he who has the custody and care of the thing can easily explain the circumstances of the loss. The vehicle owner has no duty to show that the repair shop was at fault. All that petitioner needs to prove, as claimant, is the simple fact that private respondent was in possession of the vehicle at the time it was lost. In this case, private respondent's possession at the time of the loss is undisputed. Consequently, the burden shifts to the possessor who needs to present controverting evidence sufficient enough to overcome that presumption. Moreover, the exempting circumstances — earthquake, flood, storm or other natural calamity — when the presumption of fault is not applicable ¹³ do not concur in this case. Accordingly, having failed to rebut the presumption and since the case does not fall under the exceptions, private respondent is answerable for the loss.

It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the New Civil Code, liability attaches even if the loss was due to a fortuitous event if "the nature of the obligation requires the assumption of risk". ¹⁴ Carnapping is a normal business risk for those engaged in the repair of motor vehicles. For just as the owner is exposed to that risk so is the repair shop since the car was entrusted to it. That is why, repair shops are required to first register with the Department of Trade and Industry (DTI) ¹⁵ and to secure an insurance policy for the "shop covering the property entrusted by its customer for repair, service or maintenance" as a pre-requisite for such registration/accreditation. ¹⁶ Violation of this statutory duty constitutes negligence per se. ¹⁷ Having taken custody of the vehicle private respondent is obliged not only to repair the vehicle but must also provide the customer with some form of security for his property over which he loses immediate control. An owner who cannot exercise the seven (7) juses or attributes of ownership — the right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits — ¹⁸ is a crippled owner. Failure of the repair shop to provide security to a motor vehicle owner would leave the latter at the mercy of the former. Moreover, on the assumption that private respondent's repair business is duly registered, it presupposes that its shop is covered by insurance from which it may recover the loss. If private respondent can recover from its insurer, then it would be unjustly enriched if it will not compensate petitioner to whom no fault can be attributed. Otherwise, if the shop is not registered, then the presumption of negligence applies.

One last thing. With respect to the value of the lost vehicle and its accessories for which the repair shop is liable, it should be based on the fair market value that the property would command at the time it was entrusted to it or such other value as agreed upon by the parties subsequent to the loss. Such recoverable value is fair and reasonable considering that the value of the vehicle depreciates. This value may be recovered without prejudice to such other damages that a claimant is entitled under applicable laws.

7. Petitioner Duran owned 2 parcels of land. She left the Philippines in June 1954 and returned in May 1966. On 1963, a Deed of Sale was made in favor of the petitioner’s mother. On December 1965, Duran’s mother mortgaged the same property to private respondent Erlinda Marcelo-Tiangco. When Duran came to know about the mortgage made by her mother, she wrote the Register of Deeds informing the latter that she had not given her mother any authority to sell or mortgage any of her properties in the Philippines. Meanwhile, foreclosure proceedings were initiated by Tiangco upon the failure of Duran’s mother to redeem the mortgaged properties.

Duran claims that the Deed of Sale is a forgery, saying that at the time of its execution in 1963 she was in the United States. Respondent Court ruled that there is a presumption of regularity in the case of a public document.

Question: Is the private respondent a buyer in good faith and for value?

Yes. Good faith consists in the possessor’s belief that the person from who he received the thing was the owner of the same and could convey his title (Arriola v. Gomez Dela Serna, 14 Phil. 627). Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it (Santiago v. Cruz, 19 Phil. 148).

The mortgagee has the right to rely on what appears in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of the said certificate. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore and the law will in no way oblige him to go behind the certificate to determine the condition of the property. If the rule were otherwise, the efficacy and conclusiveness of the Torrens Certificate of Titles would be futile and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger.

While it is true that under Article 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the property mortgaged, and while as between the daughter and her mother, it was the daughter who still owns the lots, STILL insofar as innocent third persons are concerned the owner was already the mother inasmuch as she had already become the registered owner.

8. A parcel of land was originally owned by the parents of the present plaintiff, Zacarias Robles. Upon the death of his father, plaintiff leased the parcel of land from the administrator with the stipulation that any permanent improvements necessary to the cultivation and exploitation of the hacienda should be made at the expense of the lessee without right to indemnity at the end of the term. As the place was in a run-down state, and it was foreseen that the lessee would be put to much expense in bringing the property to its productive capacity, the annual rent was fixed at the moderate amount of P2,000 per annum.

The plaintiff made various improvements and additions to the plant. The firm of Lizarraga Hermanos was well aware of the nature and extent of these improvements.

When the plaintiff’s mother died, defendant came forward with a proposal to buy the heirs’ portion of the property. In consideration that the plaintiff should shorten the term of his lease to the extent stated, the defendant agreed to pay him the value of all betterments that he had made on the land and furthermore to purchase from him all that belonged to him personally on the land. The plaintiff agreed to this.

On the ensuing instrument made, no reference was made to the surrender of the plaintiff’s rights as lessee, except in fixing the date when the lease should end; nor is anything said concerning the improvements which the plaintiff had placed. At the same time the promise of the defendant to compensate for him for the improvements was wanting. Accordingly, the representative of the defendant explained that this was unnecessary in view of the confidence existing between the parties.

On the part of the defendant it was claimed that the agreement with respect to compensating the plaintiff for improvements and other things was never in fact made.

Questions:
1. Can the lessee contest the validity of a written contract using  oral evidence?
2. Will the appreciation value be used to determine the price?

1. Yes. In case of a written contract of lease, the lessee may prove an independent verbal agreement on the part of the landlord to put the leased premises in a safe condition. The verbal contract which the plaintiff has established in this case is therefore clearly independent of the main contract of conveyance, and evidence of such verbal contract is admissible under the doctrine above stated. In the case before us the written contract is complete in itself; the oral agreement is also complete in itself, and it is a collateral to the written contract, notwithstanding the fact that it deals with related matters.

2. Yes. The stipulation with respect to the appraisal of the property did not create a suspensive condition. The true sense of the contract evidently was that the defendant would take over the movables and the improvements at an appraised valuation, and the defendant obligated itself to promote the appraisal in good faith. As the defendant partially frustrated the appraisal, it violated a term of the contract and made itself liable for the true value of the things contracted about, as such value may be established in the usual course of proof. Furthermore, an unjust enrichment of the defendant would result from allowing it to appropriate the movables without compensating the plaintiff thereof.

9. A judgment was rendered against Olegario in a case, where he is also a defendant, wherein certain real properties of his are sold at a public auction in which he shall receive Php. 10,000, as offered, for these properties.

Gregorio Olegario sold to his cousin and brother-in-law Dalmacio Olegario, the other defendant in this case, his right of redemption over the aforesaid properties, executing the proper deed of sale, which was registered in the registry on the date of the conveyance. The plaintiff alleges that this sale is fictitious, — the result of a fraudulent conspiracy between the herein defendants.

Question: Can an execution debtor sell his right of redemption? Why?

Yes. An execution debtor has the perfect right to sell his right of redemption.

10. Plaintiff purchased a portion of a subdivision from the surviving husband of the deceased owner, evidenced by a receipt. The Philippine Trust Co relieved the surviving husband as administrator and advertised the sale of the subdivision. Since no adverse claim or interest over the subdivision or any portion thereof was ever presented by any person, the Philippine Trust Co. executed the Deed of Absolute Sale of the subdivision in favor of the Manotok Realty, Inc.. The deed was judicially approved and recorded immediately in the Register of Deeds which issued the corresponding Certificates of Title.

Question: Will the receipt in the problem serve as basis for the contract of sale? Why?

No. An examination of the receipt reveals that the same can neither be regarded as a contract of sale or a promise to sell. There was merely an acknowledgment of the sum of One Thousand Pesos (P1,000.00). The requisites of a valid Contract of Sale, namely 1) consent or meeting of the minds of the parties; 2) determinate subject matter; 3) price certain in money or its equivalent, are lacking in the said receipt.

11. In what cases shall a pacto de retro be considered an equitable mortgage? 

ART. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:

(1) When the price of the sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

In any of the foregoing case, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws.

What is the consequence of declaring a pacto de retro an equitable mortgage?

The mortgagor shall be given the right to repurchase under art 1616, however he must return the price of the sale, the expenses of the contract and other legitimate payments made by reason of the sale, the necessary and useful expenses made on the thing sold.

12. The assignment of credit includes all the accessory rights. What are accessory rights? Give at least two examples.

Art 1627. The assignment of a credit includes all the accessory rights such as (a) guaranty (b) mortgage (c) pledge (d) preference

13. What is an "assignment of credit"? Shall it have an effect on third persons?

Assignment is the process of transferring gratuitously or onerously the right of the assignor to the assignee, who would then be allowed to proceed against the debtor.  An assignment of credit, right or action shall produce no effect as against third person, unless it appears in a public instrument, or the instrument is recorded in the Registry of Property in case the assignment involves real property.

14. Within what period shall the right of legal redemption be exercised? 

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.xxx xxx xxx

Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners.

15. Distinguish the right of "pre-emption" from the "right of redemption"?

Pre-emption arises before the sale, while redemption arises after the sale. In pre-emption there is no rescission because no sale yet exists. IN legal redemption, there can be rescission of the original sale. In pre-emption, the action here is directed against the prospective seller, while in redemption against the prospective buyer. (see p. 293)

16. Is the right of "legal redemption" a substantive right? Why?

The right to redeem is a real right  (Mortena vs. Martinez, 14 Phil. 541), and may be exercised against every possessor whose right is derived from the vendee a retro even if the second contract makes no mention of the right of repurchase (Art. 1608, Ibid.).

17. What is legal redemption? Give at least five examples of legal redemption.

Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase, dation in payment, or by any other transaction whereby ownership is transmitted by onerous title. (1619). The examples are found in arts. 1088, 1620, 1621, 1622, 1634, (see pp. 288-292 of the book)

18. How is a contract of sale extinguished?

Sale is extinguished by the same causes as all other obligations, and by redemption (Art. 1600)

19. What is conventional redemption? In what contract does it apply?

Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold (1601). There cannot be a conventional redemption unless it has been stipulated by the parties upon in a contract of sale. Hence it is merely an accidental element in the contract of sale.  It usually occurs with a pacto de retro sale.

20. Is the inadequacy of the price a ground for rescinding the contract of sale? How about in a pacto de retro sale?

As a general rule, the inadequacy of the price cannot be considered as a ground for rescinding the contract. It is also with pacto de retro, since the practice is to fix a relatively reduced price (but not grossly inadequate) inorder to afford the vendor a retro every facility to redeem the land, unlike in an absolute sale where the vendor, in permanently giving away his property tries to get its land true value, as compensation.(p. 259)