sales problems

1.       A  contract of sale of real property, without consideration, and executed by a person of low intelligence is (a) void  (b) voidable (c) rescissible   (d) valid because  there is consent and sale is consensual.

2.       Which of the following is  NOT a characteristic of a contract of sale? (a) onerous (b) bilateral (c) cumulative  (d) nominate.

3.        When the object of the contract of sale is delivered and the price is paid, the contract is said to be (a) generated (b) negotiated (c) perfected (d) consummated.

4.      Which is a natural element of sale ? (a) consent or meeting of the minds (b) price certain in money (c) determinate subject matter (d) warranty against hidden defects.

5.       If during the 5-year period when a homestead cannot be sold, it is promised to be sold (in a compromise agreement),  this promise is  (a) valid when the sale is actually made after the 5-year period (b) void even if the sale is actually made after the 5-year period (c) valid if the sale is approved by the Secretary of Agriculture (d)  voidable when consent is finally given.

6.       Nemo dat quod none habet  literally means (a) one cannot sell what he does not possess (b) no one can dispose what he cannot own (c) no one can give more than what he has (d) no one can sell what he does not own.

7.       Maria owes me P200,000. If I accept Maria’s offer to take her car as payment, what contract is generated? (a) a contract of sale because it is as if she sold her car to me for P200,000 (b) a contract of barter or exchange (c) dacion en pago (d) a contract of cession since she ceded the car to me in payment of her obligation.

8.      Which of the following is considered as illicit per accidens? (a) sale of human flesh (b) sale of  land to a balikbayan (c) sale of shabu (d) sale of illegal lottery tickets.

9.       A mortgaged his land to B, but sold the land to C. Which of the following is true or valid? (a) A cannot sell the property since it is still mortgaged (b) A, being the owner, can sell the land to C, who after delivery became the owner, subject to B’s right of  redemption  (c) the land sold is always subject to B’s right to foreclose the mortgage upon the non-payment of the mortgage credit (d) the sale here is voidable.

10. Which of the following is NOT correct under the Maceda law? (a) in case where less than 2 years of installments were paid, the seller shall give the buyer the grace period of not less than 60 days (b) the buyer shall have the right to sell his rights or assign the same to another person  (c) the buyer shall have the right to pay in advance any installment (d) the law gives the buyer  if he has already paid at least two installments.

PART II. (10% each)Essay Type. Answer the following problems. Always explain your answer. A mere yes or no answer earns no points.

1. A parcel of land measuring 81,524 square meters (“Subject Land”) in Barrio Culis, Mabiga, Hermosa, Bataan is the subject of controversy in this case. The registered owners of the Subject Land were petitioner spouses, Godofredo Alfredo (“Godofredo”) and Carmen Limon Alfredo (“Carmen”).  The Subject Land is covered by Original Certificate of Title No. 284 (“OCT No. 284”) issued to Godofredo and Carmen under Homestead Patent No. V-69196.

On 7 March 1994, the private respondents, spouses Armando Borras (“Armando”) and Adelia Lobaton Borras (“Adelia”), filed a complaint for specific performance against Godofredo and Carmen before the Regional Trial Court of Bataan, Branch 4.  The case was docketed as Civil Case No. DH-256-94.

Armando and Adelia alleged in their complaint that Godofredo and Carmen mortgaged the Subject Land for P7,000.00 with the Development Bank of the Philippines (“DBP”).  To pay the debt, Carmen and Godofredo sold the Subject Land to Armando and Adelia for P15,000.00, the buyers to pay the DBP loan and its accumulated interest, and the balance to be paid in cash to the sellers.

Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP which signed the release of mortgage and returned the owner’s duplicate copy of OCT No. 284 to Godofredo and Carmen.  Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land for which Carmen issued a receipt dated 11 March 1970.  Godofredo and Carmen then delivered to Adelia the owner’s duplicate copy of OCT No. 284, with the document of cancellation of mortgage, official receipts of realty tax payments, and tax declaration in the name of Godofredo.  Godofredo and Carmen introduced Armando and Adelia, as the new owners of the Subject Land, to the Natanawans, the old tenants of the Subject Land.  Armando and Adelia then took possession of the Subject Land.

In January 1994, Armando and Adelia learned that hired persons had entered the Subject Land and were cutting trees under instructions of allegedly new owners of the Subject Land.  Subsequently, Armando and Adelia discovered that Godofredo and Carmen had re-sold portions of the Subject Land to several persons.

On 8 February 1994, Armando and Adelia filed an adverse claim with the Register of Deeds of Bataan.  Armando and Adelia discovered that Godofredo and Carmen had secured an owner’s duplicate copy of OCT No. 284 after filing a petition in court for the issuance of a new copy.  Godofredo and Carmen claimed in their petition that they lost their owner’s duplicate copy.  Armando and Adelia wrote Godofredo and Carmen complaining about their acts, but the latter did not reply. Thus, Armando and Adelia filed a complaint for specific performance.

On 28 March 1994, Armando and Adelia amended their complaint to include the following persons as additional defendants: the spouses Arnulfo Savellano and Editha B. Savellano, Danton D. Matawaran, the spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu, and Elizabeth Tuazon (“Subsequent Buyers”).  The Subsequent Buyers, who are also petitioners in this case, purchased from Godofredo and Carmen the subdivided portions of the Subject Land.  The Register of Deeds of Bataan issued to the Subsequent Buyers transfer certificates of title to the lots they purchased.

In their answer, Godofredo and Carmen and the Subsequent Buyers  (collectively “petitioners”) argued that the action is unenforceable under the Statute of Frauds.  Petitioners pointed out that there is no written instrument evidencing the alleged contract of sale over the Subject Land in favor of Armando and Adelia.  Petitioners objected to whatever parole evidence Armando and Adelia introduced or offered on the alleged sale unless the same was in writing and subscribed by Godofredo. Petitioners asserted that the Subsequent Buyers were buyers in good faith and for value. As counterclaim, petitioners sought payment of attorney’s fees and incidental expenses.

Questions:

(1) Is there a perfected contract of sale between  the spouses “Armando and Adelia “ and the Spouses “ Godofredo and Carmen “? Explain.

(2) Whether the alleged sale of the Subject Land in favor of Armando and Adelia is valid and enforceable, where (a) it was orally entered into and not in writing; (b) Carmen did not obtain the consent and authority of her husband, Godofredo, who was the sole owner of the Subject Land in whose name the title thereto (OCT No. 284) was issued; and (c) it was entered into during the 25-year prohibitive period for alienating the Subject Land without the approval of the Secretary of Agriculture and Natural Resources.

(3)Whether the action to enforce the alleged oral contract of sale brought after 24 years from its alleged perfection had been barred by prescription and by laches.

(4)Whether the deeds of absolute sale and the transfer certificates of title over the portions of the Subject Land issued to the Subsequent Buyers, innocent purchasers in good faith and for value whose individual titles to their respective lots are absolute and indefeasible, are valid.

Answer:  (1) All the characteristics and elements of sale being present, thus the contract is perfected. (2) (a) enforceable, because the Statute of Frauds does not apply here, it being that the contract is already executed or consummated (b) valid, since the sale was entered before Aug. 3, 1988 (c) still enforceable, the consent of the Sec. is not really applicable in the case at bar. (3) Not barred by prescription or laches. Laches is a remedy in equity which is not applicable here, and the action has not prescribed yet (4) The indefeasibility of title as a principle applies only when there is no fraud involved.

(REFER to: Alfredo v. Borras (2003) below

2. What is the effect if at the time the contract of sale is perfected the object of the contract has been entirely lost? If part of it is only lost, what are the rights of the vendee?

Art. 1493. If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost, the contract shall be without any effect.

But if the thing should have been lost in part only, the vendee may choose between withdrawing from the contract and demanding the remaining part, paying its price in proportion to the total sum agreed upon. (1460a)

3.When is ownership of the thing sold transferred to the vendee? Can there be other stipulations possible?

Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.

4.Art. 1465. Things subject to a resolutory condition may be the object of the contract of sale. Give at least two examples of things which are subject to a resolutory condition.

ANSWER: PACTO DE RETRO SALE; RESERVA TRUNCAL

5. Generally, when is the thing sold understood as “delivered”? What if the object of the sale is (a) movable  and (b) immovable?

Art. 1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. (1462a)

Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept. (1463a)

Art. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason. (1463a)

Art. 1500. There may also be tradition constitutum possessorium. (n)

Art. 1501. With respect to incorporeal property, the provisions of the first paragraph of article 1498 shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's consent, shall be understood as a delivery. (1464)