Oblicon Online Quiz

Obligations and Contracts
Quiz 1_2015_online
Q. A agreed to buy 50 kilos of sugar from B. B delivered one bag of sugar and A paid him the agreed price. When A
weighed the bag of sugar, it weighed only 47 kilos. If you were A, what will you do to protect your interest?
If I were A, I will file an action against B for damages.
Those who in the performance of their obligations are guilty of fraud or negligence are liable for damages.
In this case, the quantity of sugar that B delivered was less than what was agreed between him and A. The
deficiency may have been due to Bs negligence or to his intent to defraud A. In either case, B is liable to A for damages.
Quiz 2_2015_online
Q. On a stormy day, A agreed to transport Bs lawfully acquired dynamite aboard the formers truck. B paid the freight
charges. On the way to Bs warehouse, lightning hit the truck. The dynamite exploded, destroying the truck and killing the
driver and his helper. May B collect from A the value of the dynamite?
B may collect from A the value of the dynamite.
While it is true that no person is liable for loss caused by a fortuitous event, the rule does not apply where the nature
of the obligations requires the assumption of risk.
In this case, the dynamite was lost through a fortuitous event.
The obligation to transport dynamite is by its nature risky, and when A agreed to transport the dynamite, and on a
stormy day at that, he assumed the risk. By reason of his assumption of the risk, A may not invoke the act of God
doctrine to free him of the liability for the loss.
Quiz 3_2015_online
Q. A was a businessman engaged in the hardware business. A purchased his goods from B on account. C built his
residential house and purchased his construction materials from A also on account. Because of stiff competition, A
ceased operations, leaving an indebtedness to B in the amount of P1 million. When A ceased operations, C already
finished his house, but with an unpaid obligation to A in the amount of P2 million. B comes to you for advice on how he
would be able to collect the amount due him. Give B your advice.
I will advice B to file a collection suit against A, get a favorable judgment, and in case the judgment debt is not paid,
to file an action against B for the collection of the judgment debt.
The Civil Code provides that the creditors, after having pursued the property in possession of the debtor to satisfy
their claims, may exercise all the rights and bring all the action of the latter for the same purpose.
Quiz 4_2015_online
Q. A and B were neighbors, and their houses were located adjacent to each other near a river. B and his wife went to
the United States to visit the family of their child. They stayed there for six months. In one occasion during the six-month
period, the river overflowed its banks and eroded the lots of A and B, such that a portion of the lots had caved in
threatening the foundations of the two houses. To protect the two houses, A caused to be constructed a concrete dike
separating the lots and the river bank. This A did without the knowledge of B. When B and his wife returned home, A
asked B for his share in the expenses in building the dike. B refused to pay saying that there was no contract between
him and A regarding the construction of the dike. A sued B for reimbursement of half of the expenses he incurred in the
construction of the dike. Will the action prosper?
Yes, the action will prosper.
By quasi-contract, a lawful, voluntary and unilateral act performed by one which benefits another gives rise to the
obligation on the part the latter to reimburse the former for the expenses incurred by him.
In this case, As unilateral act of constructing the dike certainly benefited B.
Contract is not the only source of obligations. There are many other sources, namely: law, quasi delict, crime and
quasi-contract. Absent a contract and there being neither crime nor quasi-delict, a quasi-contractual relation may be
forced upon the parties to avoid a case of unjust enrichment. Consent is presumed to the end that the recipient of
benefits or favors resulting from a lawful, voluntary and unilateral act done by another may not be unjustly enriched at
the expense of the other.

Quiz 5_2015_online
Q. The lease contract between A, the lessor, and B, the lessee, over a commercial building provides that the term of
the lease shall be five years and that the lease may be renewed as often as the lessee wants it, provided that the lessor
is given at least six months advance notice of the lessees intent to renew the lease. Six months before the expiration of
the lease, B informed A that he intends to renew the lease. A told B that he does not intend to renew the lease. B sued A
for specific performance to compel him to renew the lease. Will the action prosper?
Under the law, the conditions in the performance of obligations that are contrary to public policy and prohibited by law
make the obligations void.
In this case, the obligation of the lessor to renew the lease is subject to the sole will of the lessee, that is, as long as
he wants the lease renewed.
The condition violates the provision in the Civil Code that the validity and compliance of contracts cannot be left to
the will of any one of the parties. If the obligation is declared valid, it would leave to the lessee the sole power to
determine whether the lease should continue or not. The owner would never be able to discontinue it; conversely,
although the owner should intend the lease to continue, the lessee could effectively thwart his intent if he should prefer to
terminate the contract by the simple expedient of stopping payment of the rentals.
Quiz 6_2015
Set A
II. Answer the following question the CLIR way. WRITE YOUR ANSWER ON A SEPARATE PAPER.
Q. The spouses A and B went to the United States to work as medical doctors. They left behind their minor son C
under the care and custody of As parents D and E. D and E lived in the house and lot they had acquired through Ds
SSS loan which had been fully paid. A and B had been sending money to D for Cs legal support. C was to join his
parents when he would graduate from high school. When C was in third year high school at age 16, both D and E
died, one after the other. D and Es children, F, G and H wanted to sell the house and lot, and asked you for advice
whether they could do it. Can they do it?
They can do it.
Under the law. a family home may be sold by the owners thereof with the written consent of the person who
constituted the same and his spouse and the majority of the beneficiaries.
In this case, F, G and H became the co-owners of the property upon the death of their parents, and there are no
beneficiaries from whom consent may be obtained. (If F,G, and H are beneficiaries, the have already consented to
the sale of the property). C is not a beneficiary. For a minor to be a considered a beneficiary, he must be dependent
for his legal support upon the person or persons who constituted the family home. C is dependent upon D and E, or
their estates, for his legal support but from his parents.
Quiz 6_2015
Set B
Q. M High School conducted an enrollment drive for the ensuing school year. The enrollment campaign
consisted of visitation of schools in which prospective enrollees were studying. In one of the campaigns, the brakes
of the jeep volunteered by a parent of a student and driven by the parent malfunctioned and the jeep hit and killed a
child. The parents of the child sued M High School for damages for the death of their child. Will the action prosper?
The Civil Code provides that that an employer is liable for the damages caused by his employees acting within
the scope of their assigned tasks.
In this case, the parent was negligent in maintaining the brakes of his jeep. The defective brakes made the driver
lose control of the jeep causing it to hit and killed the child. The negligence of the parent was the proximate cause of
the death. The proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the result would not have occurred.
The parent is considered an employee of the school acting within the scope of his assigned task in the sense that
his act in driving the jeep was in furtherance of the interest of the school. The clause within the scope of their
assigned tasks for purposes of raising the presumption of liability of an employer, includes any act done, in
furtherance of his interest.
Quiz 7_2015
Set A
II.
Answer the following question the CLIR way. WRITE YOUR ANSWER ON A SEPARATE PAPER.
Q. Have the heirs of an absentee, who under a probated will was given a legacy but who at the time the will was
admitted to probate was still absent, any right over the legacy?
Yes, they have right over the legacy, if they can prove that at the time of the testators death, the absentee was
alive.
Under the law, whoever claims a right pertaining to a person whose existence is not recognized must prove that
he was living at the time his existence was necessary in order to acquire said right. An absentees heir is the claimant
referred to in the law because he would inherit or would have inherited the legacy upon the death of the absentee.
The heirs will lose their right to prove the absentees existence only after the lapse of ten years (the prescriptive
period for the right of action derived from law) from the time of the testators death.
Quiz 7_2015
Set B
Q. A built a perimeter fence around his titled property. The fencing resulted in the closure of a passageway used
by the tenants of Bs apartment. B filed a complaint for legal easement of road right of way and damages against A.
Will the action for damages prosper?
The action for damages will not prosper.
Under the principle of damnum absque injuria, a lawful exercise of right may cause damage or loss to another
but there is no injury.
In this case, A fenced his titled property. He has all the right to do that. The Civil Code provides that every owner
may enclose or fence his land or tenements with walls, ditches or hedges. The fact that B has filed a complaint for
legal easement of road right of way shows that he still has no right to use a part of As property,
Quiz 6_2015_online
Q. P Bank granted a P5 million loan to B payable in five years with interest at the rate of 1% per month. After three
years, B wanted to pay the whole balance of the loan, so he offered to pay the bank P5 million, plus interest for three
years The bank refused the offer. B filed an action against the bank to compel it to accept his payment. Will the action
prosper?
The action will not prosper.
Whenever in an obligation a period is designated, it is presumed to have been established for the benefit of both
creditor and the debtor, unless from the tenor of the same or other circumstances it should appear that the period has
been established in favor of one or of the other.
In this case, the designation of the period of five years in which the loan is to be paid is presumed to have been
agreed upon to benefit both B and P Bank for B, to enable him to use the money for such length of time, for P Bank, to
enable it to earn a bigger amount of interest. To cut short the period is to diminish the interest that the bank would earn in
the transaction.
There is nothing in the facts of the case that suggest that the period was agreed upon in favor of B.
Quiz 7_2015_online
Q. Under the contract he has entered into with X Fishing Corporation, Y, a bangus producer, would deliver to the
corporation 50,000 tons of bangus per year for five years. Because of a strong typhoon which destroyed most of his fish
pens, Y failed to deliver bangus to the corporation for two years. Three months before the end of the fifth year from the
execution of the contract, A approached the general manager of the corporation to negotiate for a new contract between
him and the corporation. The manager told him that the contract would not end at the end of the year because A still had
the obligation to deliver bangus for two years. Is the manager correct?
The manager is not correct.
Under the law, no person is responsible for those events which could not be foreseen, or which, though foreseen,
were inevitable.
In this case, Y was not able to deliver bangus for two years because of typhoon, an event which may, under present
technology, have been foreseen but was inevitable. This rule is subject to certain exceptions none of which is obtaining
in this case. His failure to perform his obligation during this period is, therefore, excused. The non-performance being
excused, X Fishing Corporation cannot later on demand its fulfillment. What the law has written off cannot be demanded
and required. To allow the corporation to demand performance would in effect extend the period of the obligation.
Quiz 8_2015
Set A
Q. The law creating X Bank, a government bank, provides that properties delivered to the bank as securities for
loans are not subject to attachment or execution, unless the obligation of the borrower is fully paid. A obtained a
favorable judgment against B who had an existing loan with X Bank secured by his commercial lot. Armed with a writ
of execution, the sheriff levied on the commercial lot of B in preparation for the sale of the lot on execution and
caused the levy on execution entered at the back of the certificate of title of the lot. X Bank sued A and the sheriff for
the cancellation of the entry. Will the action prosper?
Acts executed against the provisions of mandatory or prohibitory laws are void, except when the law itself
authorizes their validity.
In this case, the law creating X Bank prohibits properties mortgaged to the bank to secure obligations incurred in
its favor. Such law is an example of a mandatory and prohibitory law. The act of the sheriff in levying against the
commercial bank to satisfy a judgment debt violates such law. The purpose of the law is to protect the financial
condition of the bank, even against official acts of officers of other government agencies. The facts of the case does
not show that the act of the sheriff is an exception to the rule.
Quiz 8_2015
Set B
Q. X, a citizen of Country A, but domiciled in the Philippines, had a legitimate daughter Y and an illegitimate
daughter Z. In his will, X gave to Z a parcel of land valued at P100,000.00 and to Y the remainder of the estate
valued at P10 million. The civil code of Country A contains the following provisions, among others:
a) A testator has the right to dispose of his property in the way he desires.
b) Intestate and testamentary successions are governed by the law of the country where the properties are
found.
Under Philippine law, an illegitimate child is entitled to one-half of the share of a legitimate child. Z filed a complaint
against Y and the estate of X for the partition of the estate according to Philippines law. Will the action prosper?
A. Yes, the action will prosper.
The Civil Code provides that intestate and testamentary successions are governed by the national law of the
decedent .
In this case, X the decedent is a foreigner, hence, the renvoi doctrine in private international law applies. Under the
renvoi doctrine, the law to be applied is the conflict of laws rule of his country which state that [I]ntestate and
testamentary successions are governed by the law of the country where the properties are found. As the properties are
located in the Philippines, the Philippine internal law on succession which provides that an illegitimate child is entitled
to one-half of the share of a legitimate child applies in the distribution of Xs estate. This is the law to be applied, not
the Philippine conflicts of laws rule in order to avoid an international football of laws. Hence, the action of Z will prosper
as she is entitled to one-half of what Y is entitled.
Quiz 8_2015_online
Q. A leased his apartment to B and granted him a right of first refusal. Under a notarized deed of sale, A sold his
apartment to C instead. However, C was not able to take possession of the property because B filed an action against A
and C for the rescission of the sale and continued to have possession of the property. After the filing of the action B
withheld payment of the rental. Assuming that the sale is rescinded, may C collect from B the withheld rentals?
No, C may not collect the withheld rentals. He has not become the owner of the apartment.
Under the law, the vendee acquires ownership of the property sold only upon the delivery of the thing to him.
In this case, C has not taken actual possession of the apartment, hence there was no delivery. While the execution of
a public instrument of sale is recognized by law as equivalent to the delivery of the thing sold, such constructive or
symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual possession
of the land sold. The execution of the instrument, as a form of constructive delivery, is a legal fiction that holds true only
when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the
vendee. When there is such impediment, fiction yields to realitythe delivery has not been effected.
(Someone invoked the rule that the creditor has a right to the fruits of the thing from the time the obligation to deliver
it arises. C may not invoke this rule because of a superior rule: rescission creates the obligation to return the things which
were the object of the contract, together with their fruits, and price with its interests. It is A, therefore, who is entitled to
the rentals).
Civil Law Review I
Quiz 9_Oblicon 2015_online
Q. In the boundary dispute between X and Y, the trial court ordered the parties to conduct a joint survey of the two
lots. X and Y agreed that they would abide and honor the findings and recommendations of the survey team. After the
survey, X objected to the findings of the survey team, alleging discrepancy and alterations in the lot data computations
used in the survey when compared to data found in DENR records. Invoking Xs agreement to honor and abide by the
findings of the survey team, the trial court approved the survey results of the survey team. Is the trial court correct?
No the trial court is not correct.
Under the law, responsibility arising from fraud is demandable in all obligations; any waiver of an action for future
fraud is void.
In this case, A and Y, in agreeing to abide by and honor the findings and recommendations of the survey team, were
in effect waiving their right of action against the other arising from fraud that may be committed against them in the
course of the survey. As it turned out, there were some discrepancies and alterations in the lot data computations used in
the survey which could have been the result of fraud. The waiver cannot be taken to cover allegations of fraud.
Civil Law Review I
Q. Under its supervised credit financing scheme, X Bank granted loan to Y Corporation for the development of the
latters beach resort. The loan was secured by a real estate mortgage. X Bank withheld a portion of the loan pending
completion of the works in the resort. When X Corporation failed to complete the works, despite demands made by it, X
Bank foreclosed the mortgage. Is X Bank correct in foreclosing the bank?
No, X Bank is not correct.
In reciprocal obligations, neither party incurs in delay if the other does not comply with what is incumbent upon him.
In this case, X Bank has not complied with its obligation to release to Y Corporation the full amount of the loan. A
mortgage remains an accessory contract dependent on the principal obligation, such that enforcement of the mortgage
contract will depend on whether or not there has been a violation of the principal obligation. In a contract of loan, the
lender should perform its obligationthe release of the full loan amountbefore it could demand that the borrower repay
the loaned amount. In other words, the borrower would not incur in delay before the lender fully performed its reciprocal
obligation. (Development Bank of the Philippines vs. Guaria Agricultural and Realty Development Corporation, G.R. No.
160758, Jan. 15, 2014)
Civil Law Review I
Q. A had two loan accounts with X Bank: PN#1 which bears interest at 6% per annum and secured by a real
estate mortgage and PN#2 which is unsecured but bears interest at 18% per annum. Both accounts are due and
unpaid. X Bank foreclosed the mortgage securing PN#1. Being the highest bidder, X bank was the purchaser of the
property in the auction sale. A wrote X Bank directing it to apply the proceeds of the sale to PN#2. X Bank insisted to
apply it to PN#1. To which account will the proceeds be applied?
The proceeds will be applied to PN#2.
He who has various debts of the same kind in favor of one and the same creditor, may declare at the time of
making the payment, to which of them the same must be applied.
In this case, A had two accounts with X Bank and he expressed his intention to which account the proceeds of the
auction sale are to be applied. The proceeds have to be applied to that account.
The application of the proceeds from the sale of a mortgaged property is an act of payment, hence, the rules on
application of payments apply. The number one rule in the application of payments is that the payment is to be
applied to the account chosen by the debtor.
Civil Law Review I
Q. A and B were solidarily liable to X on the loan of P800,000.00 granted by X to A. The obligation was secured
by a chattel mortgage over a car owned by B. When the obligation was not paid at maturity, X foreclosed the
mortgage and the car was auctioned for P600,000.00. X sued A and B for the deficiency of P200,000.00. If you were
B, what defenses or action will you interpose or take to protect your interest?
There are no defenses that I can interpose; I will file in the same action a cross-claim against A.
Under the law, a solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With
respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the
debt for which the latter are responsible.
In this case, neither of the defenses provided by law is available to me. As solidary debtor, I am responsible for
the whole debt as A is. But I am not without remedy though. Under the law, a solidary debtor who pays the debt may
claim from his co-debtors their share of the debt. To enforce my substantive right of reimbursement, I should file a
cross-claim against my co-defendant A for my payment of of P600,000.00 which represents the purchase price of
my car, and for the remaining P200,000.00, if I will be made to pay the whole of it.
Civil Law Review I
Q. In consideration of the loan in the amount of P1 million granted to him by B, A promised to pay B the amount
in one year with interest at 12% per annum or to sell to him his residential house at the price of P 1 million. Before
the term ended, A became insolvent and was unable to pay the loan. When C, another creditor of A, knew that A was
about to execute a deed of sale over the house in favor of B, C filed a complaint against A seeking a judgment to
stop them from proceeding with the transaction and to require B instead to share with the other creditors in the
remaining assets of A. Will the action prosper?
No, the action will not prosper.
Under the law, the debtor in an alternative obligation loses the right of choice when among the prestations
whereby he is alternatively bound, only one is practicable.
In this case, A has the alternative obligation to pay B the loan or to sell to him his house. Of the two prestations, it
is only the second one that is practicable because the first one can no longer be done as A had become insolvent. A
having the obligation to make the sale of the property in favor of B, C cannot stop the transaction.
Civil Law Review I
Q. On December 15, 2014 A executed a promissory note in favor of B in the following tenor: For value received,
I promise to pay B, or order, the sum of P1 million on December 15, 2015 with interest at the rate of 12% per
annum. On January 15, 2015 A tendered P1 million to B in payment of his obligation. When B refused to receive
the money, A filed a complaint against B for consignation and delivered the money to the court. Will the action
prosper?
For consignation to be proper, the refusal of the creditor to accept the payment must be without just cause.
In this case, the refusal on the part of B to accept the payment is just because it was tendered before the arrival
of the day certain. Whenever in an obligation a period is designated, it is presumed to have been established for the
benefit of both creditor and the debtor, unless from the tenor of the same or other circumstances it should appear that
the period has been established in favor of one or of the other. There is nothing in the facts of the case, that the
period designated was established to favor A.
Civil Law Review I
Q. X bought from Y Motors a car for P960,000.00 payable in 24 equal installments, the first installment to fall due
on January 31, 2013. Xs obligations for 2013 were secured by a surety bond issued by Z Surety Company and those
for 2014 by M Surety Company. X failed to pay the installments due for October, November and December for the
year 2013. X resumed payment on January 31, 2014 until December 31, 2014. Y Motors demanded from Z Surety
Company payment for the October, November and December 2013 installments. The surety company countered that
those obligations had already been paid by X, hence, it had no more obligation to Y Motors. Is Z Surety Company
correct?
Z Surety Company is not correct.
While the Civil Code gives to the debtor the right to provide for the application of payments where he has
various debts of the same kind in favor of one and the same creditor, such right must be exercised at the time he
effects the payment, and in the absence or failure of the debtor to exercise such right, the creditor is empowered to
make the application of the payments made by the debtor as he deems it fit.
In this case, X at the time he made the payments did not express to what obligations the payments were to be
applied. And because X did not exercise his right, Y Motors applied all the payments X made in 2014 to his 2014
obligations leaving the installments for October, November and December 2013 still unpaid.
Civil Law Review I
Q. A offered to sell his car to B for P500,000.00 and gave him ten days to accept the offer. After five days, B
came back and accepted As offer. A would no longer sell his car. B filed a complaint against A to compel him to sell
his car to him. Will the action prosper?
The action will prosper.
When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time
before acceptance by communicating such withdrawal, except when the option is founded upon a consideration, as
something paid or promise.
In this case, B was given a period of ten days within which to accept the offer, and he accepted it within the
period before As withdrawal of the offer. A bilateral contract to sell and to buy was created upon acceptance. Hence,
A can be compelled to sell the car to A.
Civil Law Review I
Q. A was employed as cashier in a lending company. She misappropriated a huge amount, and upon the
complaint filed by the company, an information for estafa was filed against her, and she was ordered arrested. After
negotiations with the company, the parents of A signed a contract whereby they undertook to pay the misappropriated
amount not later than 90 days from date. When the parents failed to pay the amount on due date and after many
demands made for the payment thereof went unheeded, the company sued the parents for collection. Will the action
prosper?
Civil Law Review I

Q. During his lifetime, X sold a parcel of land to his daughter Y for P100,000.00. The market value of the property
was P300,000.00. After the death of X, the other children of X filed a complaint against Y for the annulment of the
two deeds of sale on the ground of inadequacy of price. The trial court ordered the annulment of the sale. Is the court
correct?
The court is not correct.
Inadequacy of consideration does not vitiate a contract, unless it is proven that there was fraud, mistake or
undue influence.
In this case, there is nothing to show that the transaction was attended by was fraud, mistake or undue influence.
The price is not too inadequate as to shock the conscience of man. While the price is only a third of the market value
of the property, filial love must be taken into account.
Civil Law Review I
Q. On the basis of a deed of sale with right to repurchase, A sued B, an illiterate, for consolidation of title,
alleging that B failed to repurchase the property within the agreed period. In answer to the complaint, B alleged that
he affixed his signature to the deed through fraud in that he was made to understand by A before he signed the
document that the transaction was a loan secured by his land. During the trial, A presented in evidence the deed of
sale with right to repurchase and he testified that B had not paid the repurchase price. A for his part testified that he
had not gone to school and was illiterate. He adopted and offered in evidence the deed showing that his purported
signature was a thumb mark. Decide the case.
I will dismiss the complaint.
When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake
or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to
the former.
In this case, B in his answer alleged fraud, but A failed to prove that no fraud attended the signing of the contract.
B having alleged fraud, the burden was on A to prove that no fraud attended the signing of the contract.
For his part, B was able to prove that he was indeed illiterate which fact entitles him to the privilege of being
freed of the burden of proving his allegation of fraud.
Civil Law Review I
Q. The contract entered into by X, a sugar planter, and Y, the sugar central, required Y to construct a railroad
across the sugarland of X , but Y refused to build the railroad because it would be built at a place where the contour
of the land, the curves, and elevations do not permit the construction of a railroad. X sued Y for damages. Will the
action prosper?
A. No, the action will not prosper.
Impossible things or services cannot be the object of contracts.
In this case, to require Y to build a railroad at a place that do not permit construction of a railroad is to expose the
men who are to build the railroad to danger. One may not be compelled to do something which, in so doing, poses
danger to life and property. To compel him to do so runs counter to public policy and the law by forcing the performance
of a contract which is undesirable and harmful. The obligation is void.
Quiz 1_2015
II.
1) Q. A entered into a contract with B, a contractor, for the construction of his house, with B to furnish labor
and materials. One month after the building was turned over to A, an earthquake hit the area which resulted
to the collapse of As building. Of the many buildings in the area, only As building collapsed. A sued B for
damages. Will the action prosper?
The action will prosper.
While it is true that no one is responsible for loss caused by a fortuitous event or act of God, the rule
does not apply where the obligor has contributed or participated in the loss.
In this case, only As building collapsed on the occasion of the earthquake. This is eloquent proof that in
the construction of the building B had employed fraud (e.g., by using substandard materials) or was guilty of
negligence in the construction of the building. Res ipsa loquitur. By reason of Bs act of fraud or negligence,
the whole occurrence is humanized and removed from the rules applicable to the acts of God.
2) X donated a parcel of land to Y University on condition that the land would be used exclusively for the
establishment and use of a medical college. The donation did not state within what period the medical
college would be established. More than fifty years have already passed and no medical college was
established on the land. The heirs of X sued the University for the reconveyance of the land to them. In its
answer, the University alleged that the action is premature because, the period within which the medical
school was to be built not being stated in the deed, it has not incurred in delay. Is the University correct?
No, the University is wrong.
While it is true that if the obligation does not fix a period, but from its nature and the circumstances it can
be inferred that a period was intended, the courts will still fix the period, the rule does not apply where the
obligor had more than a reasonable period to comply with the obligation but failed to do so.
In this case, Y University had more than fifty years to build the medical school, but it failed to do so.
Hence, there is no more need to fix the duration of a term of the obligation when such procedure would be a
mere technicality and formality and would serve no purpose than to delay or lead to an unnecessary and
expensive multiplication of suits.
Civil Law Review I
Quiz 21_Oblicon 2015_online_awardee (10 points):
Q. An ailing corporation applied for a loan with a bank. The bank approved the application on condition that it
takes over the management of the corporation under a management contract and that the loan be secured by a
mortgage over sufficient real estate. Under the management contract, the disbursement to the loan was under the
complete control of the bank. After a few years of operation, the corporation went bankrupt and was unable to pay the
loan. The bank proceeded to foreclose the mortgage. The corporation filed an action to declare void the real estate
mortgage. Will the action prosper?
Contracts without cause are void.
In this case, the disbursement of the loan proceeds was under the complete control of the lender bank, and the
corporation went bankrupt. It is clear that the bank had misspent the money. Therefore, it is as if the loan was never
delivered to it and thus, there was failure on the part of the bank to deliver the consideration for which the mortgage
was were executed.
Civil Law Review I
Q. A sued B for the recovery of the ownership and possession of a parcel of land. During the pendency of the
case, B sold the land to C . Bs certificate of title over the land was cancelled and a new one issued in the name of C.
A obtained a favorable judgment which became final and executory. Thereafter, A filed a complaint against B and C
for the rescission of the sale. Will the action prosper?
It depends. If C is in bad faith or if B has no other properties with which to satisfy the claim of A, then the action
will prosper, otherwise, the action will not prosper..
While it is true that a sale of a property under litigation by the defendant without the consent or approval of the
plaintiff or the court is rescissible, an action for rescission cannot be instituted when the party suffering damage has
no other legal means to obtain reparation for the same or when the subject property is already in the hands of a third
person who did not act in bad faith.
A sale of the property in litigation by the defendant who has other properties with which to satisfy any adverse
judgment cannot be said to be one in fraud of creditors. Also, a purchaser in good faith for value is protected by law.
Civil Law Review I
Q. The Philippine Reclamation Authority (PRA), a government agency, entered into a contract with ABC
Corporation for a reclamation project. In consideration for the works the corporation would do, PRA would transfer to
X Corporation title over one-third of the lands that may be reclaimed. Is the contract valid?
A. The contract is not valid.
A contract whose object is outside the commerce of man is void.
In this case, the object of the contract is reclaimed land, and reclaimed land, which is not yet titled in the name
of the Philippine Reclamation Authority, is property of public dominion, even if not employed for public use or public
service, if developed to enhance the national wealth. A property of public dominion is outside the commerce of man.
(Reclaimed lands that are already titled in the name of the Philippine Reclamation Authority are alienable lands.
But even if the subject land is already titled in the name of the PRA, the contract is still void. Here is then the
alternative answer:
A. The contract is void.
Contracts that are prohibited or declared void by law are void.
In this case, PRA would transfer lands to X Corporation in consideration for its services. The transfer violates the
Constitution which provides that private corporations shall not hold alienable lands of the public domain except by
lease. The transfer of title and ownership to X Corporation clearly means that the corporation will hold the lands
other than by lease. The transfer of title and ownership is a disposition of the lands, a transaction considered a sale
or alienation).
Civil Law Review I
Q. In his desire to be able to cohabit with 18 year old B, A, a 65 year old widower-businessman, donated to her a
parcel of land. B accepted the donation, and A and B lived as husband and wife. When A died, his heirs sued B for
the recovery of the ownership and possession of the land on the ground that in donating the land, B was motivated by
lust making the donation void for having an unlawful cause. In her answer, B alleged that in contracts, motive is
different from cause. Will the action prosper?
A. The action will not prosper.
A party to an illegal contract may not invoke in a suit the illegality thereof as a cause of action or a defense.
In this case, the motive and the cause are one and the same. This is so because A would not have made the
donation had B not agreed to cohabit with him. The motive, therefore, predetermines the purpose of the donation. As
the motive is unlawful, so too is the cause. Hence, the donation is void.
But the donation being void will not make the action of the heirs prosper. A party to an illegal contract may not
invoke in a suit the illegality thereof as a cause of action or a defense. Moreover, the principle of in pari delicto does
not apply because it cannot be said that both parties had equal guilt considering that as against A, who was a man
advanced in years and mature experience, B was a very young and, most probably, an inexperience woman.
Civil Law Review I
Q. A and B were co-owners of a parcel of land. A sold his share to C. A delivered to C a bounded and segregated
portion of the land and C took possession of it. Later, B sold his share to A who in turn sold it to D. C sued D for the
redemption of the one-half portion of the land claiming his right of redemption as co-owner of the land. Will the
action prosper?
When a person who is not the owner of a thing sells it, and later the seller acquires title on it, such title passes to
the buyer by operation.
While it is true that when A sold and delivered to C a bounded and segregated portion of the land, the sale was
ineffective as A, an owner of a mere ideal portion of the land has no right to sell a bounded and segregated portion of
the land. But when B sold his share to A, the latter became the owner of the whole property and title over the portion
earlier sold to C was transferred to him by operation of law. Being an owner now of a definite portion of the property,
C is no longer a co-owner of the portion of the property sold by A to D. Hence, Ds claim for a right of redemption has
no basis.
Civil Law Review I
Q. A, B, C and D wanted to buy on installment basis a parcel of land acquired by M Bank in a foreclosure of
mortgage auction sale and the bank agreed. The bank suggested that, to simplify the transaction, only A should
appear as the buyer, and once the land is fully paid and the title is transferred to A, A would then sell the shares of C
and D to them. The four agreed. When the purchase was paid in full and the title transferred to A, A would not
execute the deeds of sale as agreed. B, C and D filed an action against A for specific performance. Will the action
prosper?
A. Yes. The action will prosper.
Under the law, if two or more persons agree to purchase property and by common consent the legal title is taken
in the name of one of them for the benefit of all, a trust is created by the force of law in favor of the others in
proportion to the interest of each.
In this case, the property bought by A, B, C and D was, to simplify the transaction, registered under the name of
A only. An implied trust is created by operation of law in favor of B, C, D as to their respective shares. The land being
registered in the name of A does not confer on him the ownership of the land. Registration is not a mode of acquiring
ownership.
Civil Law Review I
Q. A, 17 years old, sold his commercial lot to B, 30 years old. The deed of sale states that A, Filipino, of legal
age, single and a resident of General Santos City, in consideration of the sum of P5 million, do hereby sell his Lot
No. 3, Psd-00335, located at Pioneer Avenue, General Santos City, to B, Filipino, of legal age, single and a resident
of Davao City. B knew of As minority. Later, A sued B for the annulment of the sale on the ground of his minority.
Will the action prosper?
Under the law on estoppel an admission or representation made by a person is not conclusive upon him if the
person to whom the admission or representation was not misled by it.
In this case, B knew that A was a minor and it cannot therefore be said that he was misled by As
misrepresentation. A contract entered into by one who is incapacitated to give consent, like a minor, is voidable.
Hence, the action will prosper. .
10
Civil Law Review I

Q. A borrowed money from B Lending Corporation. When A defaulted in the payment of his obligation, the
corporation sued him for collection of the loan. When A failed to answer the complaint, the court, upon motion of B
Lending Corporation, declared A in default. The corporation presented its evidence ex parte. The court rendered
judgment in favor of the corporation. A appealed from the judgment upon the ground that the corporation has no
personality to sue as A failed to present in evidence the articles of incorporation of the corporation. Will the appeal
prosper?
Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot
be denied or disproved as against the person relying thereon.
In this case, A, in entering into a contract of loan with B Lending Corporation, had admitted or represented that
the corporation has the personality to enter into contract. On the basis of such admission or representation, the
corporation released to A the loan. Such admission or representation cannot now be denied. .As contractual
personality is admitted, there is no need to present in evidence the articles of incorporation of B Lending Corporation.
Civil Law Review I
Quiz31_Oblicon 2015_online
1. A is the owner of a lot on which he constructed a building in the total cost of P10,000,000.00. Of that amount B
contributed P5,000,000.00 provided that the building as a whole would be leased to him (B) for a period of ten years from
January 1, 2000 to December 31, 2010 at a rental of P100,000.00 a year. To such condition, A agreed. On December 20,
2005, the building was totally burned. Soon thereafter, A's workers cleared the debris and started construction of a new
building. B then served notice upon A that he would occupy the building being constructed upon completion, for the
unexpired portion of the lease term, explaining that he had spent partly for the construction of the building that was
burned. A rejected B's demand. Is A correct in rejecting Bs demand?
Yes, A is correct in rejecting Bs demand.
If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished.
In this case, the leased building was totally destroyed. The fact that B had contributed to the construction of the
building and that a new building is being built by A is of no moment. The law does not grant the lessee any right even if
these circumstances are obtaining.
Civil Law Review I
Quiz32_Oblicon 2015_online_awardee (10 points): Lotlot Say
2. A leased his vacant lot to B for a term of fifteen (15) years renewal upon agreement of the parties. The contract
provided that the lot would be used for Bs noodle manufacturing business. Before the end of the term of the lease, B
negotiated with the landowner for its renewal, but despite their attempts to do so, they could not agree on the new
conditions for the renewal. At this time, B had built three concrete buildings which he had used in his business. Upon the
expiration of the term of the lease, the landowner asked B to vacate the premises and remove his buildings and other
improvements. B refused unless he was reimbursed the market value of the buildings. Who between A and B is correct?
Neither A nor B A is correct.
Under the law, if the lessee makes, in good faith, useful improvements which are suitable to the use for which the
lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse
said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby.
In this case, B had built in good faith the three buildings in connection with his business and A refused to appropriate
the improvements. It was error on the part of B to demand reimbursement as A had no obligation to do so. The law gives
him the option to appropriate the improvement or not.
A is also not correct because upon his refusal to appropriate, B has no obligation to remove the improvements as
the law gives him also the option to remove the improvements or not.
Civil Law Review I
1. A leased to B his 2-storey building for a term of five years. As agreed, B used the first floor for his hardware
business and the one half portion of second floor as storeroom and the other half as sleeping quarters of his employees.
On the third year of the lease, a total rehabilitation of the roof was done as the roof had so many leaks and was in
danger of collapsing. A assured B that the rehabilitation will last only for 30 days. After the lapse of 30 days, the
rehabilitation work was not yet done. B sued A for the cancellation of the contract. Will the action prosper?
11

Under the law, if during the lease it should become necessary to make some urgent repairs upon the thing
leased, which cannot be deferred until the termination of the lease, the lessee is obliged to tolerate the work, although it
may be very annoying to him, and although during the same, he may be deprived of a part of the premises. If the repairs
last more than forty days the rent shall be reduced in proportion to the time including the first forty days and the
part of the property of which the lessee has been deprived. He lessee is allowed to rescind the lessee only of the main
purpose of the lease is to provide a dwelling place for the lessee, and the work is of such nature that the portion which
the lessee and his family need for their dwelling becomes uninhabitable.
In this case, as the roof has become a health hazard, the rehabilitation work could not be deferred until the
termination of the lease. Also, the leased premises is used for dwelling only for Bs employees, not for B and his family.
Bs action for cancellation of the lease has no basis. That the repairs lasted for more than 30 days only entitles the lessee
to a proportional reduction of the rental,
Civil Law Review I
1. A leased to B his commercial building for P50,000.00 a month for a period of one year, from January 1, 2014 to
December 31, 2014, subject to renewal upon mutual consent of the parties. After December 31, 2015 the lease
contract was not renewed but B continued to occupy the building and A continued to collect the rental and B
religiously paid it as it fell due. On March 15, 2015, give notice to B that the lease over the building would
terminate. B paid the rental for March, but he refused to vacate the premises. A sued B for unlawful detainer. Will
the action prosper?
Yes. The action will prosper.
The law is that if at the end of the contract the lessee should continue enjoying the thing leased for fifteen
days with the acquiescence of the lessor, and unless a notice to the contrary by either party has previously been
given, it is understood that there is an implied new lease, not for the period of the original contract but from year
to year, if the rent agreed upon is annual; from month to month ,if monthly; from week to week , if weekly; and
from day to day if daily. The other terms of the original contract has to be revived.
In this case, B with the acquiescence of A continued to enjoy the building more than fifteen days from the
expiration of the one-year period of the lease paying rental thereof on a monthly basis. The period of the implied
lease, therefore, expires every end of the month, there being no notice given by either party to the contrary.
When A gave notice to B that the lease would only up to the end of March 2015, the implied lease was to
effectively terminate on that date. Beyond that date, Bs possession of the building had become unlawful.
12
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