MIDTERM

Shynette orally offered to sell a certain diamond ring to Brenda for P50,000.00. Brenda accepted the
offer and to prove that she was in earnest, she gave Shynette P1,000.00. The parties agreed that the
delivery of the ring and the payment of the price would be made 30 days later. On due date:
Shynette may collect from Brenda P49,000.00.

The following are implied warranties in a contract of sale. Which is the exception?
Free from charges or encumbrances declared or known to the buyer

On June 1, 2020, S has shipped Cebu City-based goods worth P100,000.00 to B who is from General
Santos City, with the understanding that S remains to be owner until he is fully paid. While the carrier
was on a short stopover in Cagayan De Oro City, S’s bank informed him that the check issued by B as
payment for the goods was dishonored by reason of “DAIF” or drawn against insufficiency of funds. He
also learned from the bank that B had become insolvent. S then notified the carrier of his claim over the
goods and that he was taking possession of the goods. The right availed of by S is:
Right of withholding delivery

On March 1, 2018, S sold and delivered to B a television set for P10,000.00 "on sale or return" giving B
up to March 16, 2018 Within which to return the television set. On March 10, 2018, the television set
was burned through no fault of B. Based on the foregoing, which of the following statements is
incorrect?
S must bear the loss since the time for the return of the television set had not yet expired.

S, offered in writing to sell his house and lot for P1,000,000.00 to B on January 20, 2020. B requested to
give him one month to raise the amount. B paid only P1 as option money. On January 25, 2020, S
informed B that he has raised the price to P1,200,000.00. Can B compel S to accept the payment to
P1,000,000.00 for the sale of the house and lot?
Yes, because the amount of the option money is immaterial.

Bella purchased a pair of leather shoes from the store of Stella. Shortly after leaving the store, Bella
decided to return and requested Stella, the owner, to place a protective rubber covering on the sole of
each shoe. Since the job required at least 30 minutes to complete, Bella left the store of Stella to shop at
the neighboring stores. When he returned to the store of Stella after 30 minutes, the pair of shoes was
nowhere to be found. It turned out that Carla, a sales clerk, has sold the pair of shoes that Bella bought
to Tanya, another customer.
Tanya acquired ownership of the pair of shoes earlier bought by Bella.

Brynn visited a store selling lamps, light bulbs and similar items. She informed the seller that she was
buying 2 units of a 50-watt “Phillips” bulb. Though she intended to use the 2 bulbs for the headlight of
her car, he did not inform the seller of her purpose. Thereafter, she installed the 2 units of “Phillips”
bulb on her car but they did not function. Based on the foregoing, which of the following is false?
The seller is liable for breach of warranty of fitness for a particular purpose.
Steve owns a mango tree bearing fruits ready for harvest. He sells all the fruits of that tree to Ben who
pays Steve the sum of P5,000. Steve tells Ben that he can just harvest the fruits anytime he likes pointing
at the particular tree. For legal purposes, Steve has fulfilled his obligation to deliver the mango fruits to
Ben by:
Traditio longa manu

Sanders entered into a contract to sell with Borris, undertaking to convey to the latter one of the five
lots he owns, without specifying which lot it was, for the price of P1 million. Later, the parties could not
agree which of five lots he owned Sanders undertook to sell to Borris. What is the standing of the
contract?
Void

Seller and buyer agreed that payment and delivery would be made on July 15. On said date, seller may
offer to deliver the goods to the buyer, and if buyer refuses to receive the goods, the seller can tell the
buyer, “I am holding the goods, no longer as the seller, but as your depositary or as bailee. You are now
the owner of the goods.” Can the seller then maintain an action for the price?
Yes, if the goods cannot readily be resold for a reasonable price.

Which of the following cannot be proper object of sale?

future inheritance

On March 1, 2020, Sonia sold and delivered to Bart a television set for P10,000.00 "on sale or return"
giving B up to March 16, 2020 within which to return the television set. On March 10, 2020, the
television set was burned through no fault of Bart. Based on the foregoing, which of the following
statements is incorrect?
Sonia must bear the loss since the time for the return of the television set had not yet expired.

Stephen sold to Sandara 100 cavans of brown sugar, which is covered by a non-negotiable document of
title to goods issued by the bailee, Bruno. Upon issuing a check in favor of Stephen as payment, Sandara
transferred the document to her own buyer, Britney, a purchaser for value in good faith. Subsequently,
Sandara notified Bruno of such transfer. When Stephen presented the check to the bank for
encashment, the same was dishonored for the reason “Account Closed”. Which of the following
statements is correct?
Stephen’s right as unpaid seller is superior to Britney’s right as a purchaser for value in good faith.

Scarlett stole the ring of Tucker and sells the same to Bobby who does not have any knowledge that the
thing was stolen. Did Bobby acquire title to the ring?
No, because the title of Scarlett is that of a thief and Bobby, the buyer, acquires no better title than
Scarlett had over it.

Shamcey and Bea entered into a contract whereby Shamcey transferred to Bea a specific car for the
price of P200,000.00, while Bea gave to Shamcey P90,000.00 in cash and a diamond ring worth
P110,000.00. The heading of the written contract signed by the parties reads "Contract of Sale".
The contract is a valid contract of sale as intended by the parties regardless of whether the monetary
consideration is more or less than the value of the property consideration.

A contract of sale is not necessarily:

Commutative

Brittany buys a piece of land from Santi at the lump sum of Php10 million. In the contract, the
boundaries are mentioned and the area is stated to be 1,000 square meters. After survey, it was
discovered that the land within the boundaries really contains 1,500 square meters. Is Santi bound to
deliver the extra 500 square meters?
Yes, furthermore, the price should not be increased.

G, a grocery goods supplier, sold 100 sacks of rice to H who promised to pay once he has sold all the
rice. H meantime delivered the goods to W, a warehouseman, who issued a warehouse receipt. Without
the knowledge of G and W, H negotiated the receipt to P who acquired it in good faith and for value. P
then claimed the goods from W, who released them. After the rice was loaded on a ship bound for
Manila, G invokes his right to stop the goods in transit due to his unpaid lien. Who has a better right to
the rice?
P, since he has superior rights as a purchaser for value and in good faith.

Silvestre sold 1,000 shares of stock of San Miguel Corporation to Bruno at Php100 per share. The
transfer of ownership of the shares of stock may be made through any of the following means, except:
The issuance by Silvestre of the official receipt for the full payment of the purchase price of the shares
by Bruno.

Meldred, manufacturer of “Best Nap” beds, and Elena entered into a contract with the following terms.
Meldred was to furnish beds to Elena who must pay the price within 30 days from the receipt of the
shipment, minus a discount of 25%. What contract was entered into between Meldred and Elena?
Contract of sale

Sansa sold and delivered to Brianna a parcel of land for P2 million payable within 30 days from the date
of the contract. Soon after the sale, Xavier surreptitiously entered the land and started occupying
therein. May Brianna suspend the payment of price?
No, it necessary that Xavier must assert his right or ownership.

Stan sells to Baxter his 2018 car, and leaves to Baxter to determine the price. Baxter refuses to fix the
price but took the car for his use. Which of the following statements is correct?
There is a sale and Baxter must pay a reasonable price.

Sylver sells to Billy a parcel of land worth Php10,000,000.00. Such land was delivered to Billy after the
execution of a notarized Deed of Absolute Sale. If possession of Billy was disturbed by an alleged co-heir
and co-owner of Sylver, Billy may:
Claim warranty against eviction against Sylver.
Delivery of incorporeal property may be made through any of the following, except:
Use by the vendee of his rights, without the vendor’s consent

If the movable property should have been sold to different vendees, the ownership shall be transferred
to the person…
Who have first taken possession in good faith.

In this type of sale, the sale is effective even if the thing hoped for does not come into existence:
Sale of a raffle ticket for charity

In which situation can a relatively incapacitated individual likely enter into a valid contract of sale?
Sale between Jake and his principal Roldan with the latter’s consent.

Sophie sold to Brooke orally a parcel of land for P600,000. Delivery was made of the land. The payment
of the price was to be made three months later. At the end of the three-month period,
Sophie can collect from Brooke because the contract was already executed partially

A person who validly negotiates a negotiable warehouse receipt for value does not warrant that:
The goods in the possession of the warehouseman are in good condition.

On January 1, Shauntet sold Bette one unit of apartment, payment and delivery to be made on January
15. It was stipulated that should payment not be made on January 15, the contract would automatically
be rescinded. On January 20, can Bette still pay?
Yes, as long as there has been no judicial or notarial demand for the rescission of the contract.

Sydrick sold a racing horse to Blake on February 14, 2020. After three (3) days, the horse died. Can Blake
sue Sydrick for breach of warranty against hidden defects?
Yes, because it is presumed that the horse was already ill when sold.

The justified refusal of the buyer to accept the goods produces the following effects, except:
Buyer has the duty to return the goods, unless otherwise stipulated

Sheldon and Bony executed into a Deed of Conditional Sale (as opposed to a Contract to Sell) in private
writing involving a specific parcel of land worth P2M. Bony paid 50% of the purchase price, balance
payable in 3 years. Sheldon delivered the land to Bony. What is the effect of the delivery of the land to
Bony?
Sheldon is still the owner because the price is not yet totally paid.

Sophie sold to Shinli 50 sacks of Ganador rice at Php2,500 per sack. On the other hand, Shinli already
contracted with his own buyer named Samantha for the purchase of the said rice which Shinli bought
from Sophie. Sophie delivered 25 sacks to Shinli, while Sophie retains the other 25 sacks as bailee for
Shinli pending full payment of the rice. May Sophie exercise her right to possessory lien in case she
acquiesced to the subsequent sale?
No, because the circumstances show Sophie’s intent to waive the lien.
Shawn sold to Blake a specific car for P2,000,000. Shawn can maintain an action for the price if:
He has delivered the car to Blake and the latter wrongfully fails to pay.

On January 10, 2020, Shontel sold a piece of land to Bertha in a public instrument. On January 11, 2020,
Bertha paid for the price. On January 12, 2020 Bertha took possession of the land. On January 13, 2020,
she registered the public instrument. Under the circumstances given, Bertha became the owner on:
January 10, 2020

A characteristic of a Contract of Sale which involves individuality and is therefore governed by its own
set of rules:
Nominate

The stage where parties show their initial interest in entering a contract of sale?
Conception
 Topic 6
Republic Act No. 6552, otherwise known as the Maceda Law, does not apply if:
the sale involves an industrial lot

In order to be enforceable in court litigation against third parties, a sale of personal property must be in
writing if:
the price is at least P 500.00

As a general rule, the expenses for the execution and registration of sale shall be borne by:
the vendor

The number of instalments on the contract in sale of real property in instalments shall includes the
Deposits and options; earnest money (down payment)

An agreement to sell a personal property with the price of P 100.00 must be in writing in order to be
enforceable against third parties if:
the agreement is not to be performed within 1 year from the making thereof

In order to be enforceable in court litigation against third parties, any sale of real property must be:
in writing regardless of the price

In sale of real property in instalments if the buyer fails to pay instalments due after expiration of the
grace period, the seller may:
cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or the demand
for rescission of the contract by a notarial act.

In a sale of real property in instalments should the contract be canceled, the seller shall refund to the
buyer the cash surrender value of the payments on the property equivalent to:
50% of the total payments made, and, after five years of installments, an additional 5% every year but
not to exceed ninety per cent of the total payments made

The remedies of the vendor in sale of personal property payable in instalments in case of non-payment
of the vendee can be exercised
alternately

In sale of real property in instalments, the buyer has the right to pay, without additional interest, the
unpaid installments due within the total grace period earned by him fixed at the rate of one month
grace period for every one year of installment payments made:
Provided, that this right shall be exercised by the buyer only once in every five years of the life of the
contract and its extensions, if any.

The delivery of goods sold where there is no agreement between the parties shall be:
that determined by the usage of trade
In case of sale by auction, where goods are put up for sale by auction in lots, each lot is:
subject of a separate contract of sale

Expropriation or property for public use is governed by:

a. None of the other choices given
b. the RECTO Law
c. the MACEDA Law
d. the Civil Code

In a sale by auction, the auctioneer may withdraw the goods from the sale:
unless the auction has been announced to be without reserve

A sale by auction is perfected when:

the auctioneer announces its perfection by the fall of the hammer

In the absence of stipulation as to the time of delivery of the item subject of sale, it shall be:
within reasonable time

On January 20, 2020, Ana read on a billboard located in Fuente Osmeña Circle, Cebu City the
construction of a subdivision project in Lapu-Lapu City developed by Land Masters Corp. which
advertises the construction of a 50-square meter swimming pool for prospective purchasers of a
subdivision lot in the project. Ana was immediately hooked and decided to buy a subdivision lot, hence
signed the contract of sale with Land Masters Corp. After she moved into the subdivision lot she bought
and long after she waited for the construction of the 50-square meter swimming pool, the pool amenity
never materialized. Ana complained why the swimming pool was never provided though advertised on
the billboard put up by the corporation. Land Masters Corp. quickly countered that it never was part of
the terms of the contract of sale which Ana signed and that Ana still has to fully pay the purchase price
of the subdivision. Upon checking the contract, the pool amenity was not stated, at all, to her utter
shock and dismay. May Ana compel Land Masters Corp. to construct the 50-square meter swimming
pool as a sales warranty?
Yes, because the advertisement on the billboard was deemed part of the contract of sale

If a sale of real property or interest therein was done through an agent while the agent’s authority was
not reduced into writing, the sale is:
Void
 Topic 7
Which of these is a requisite for an adjacent owner of a rural land to exercise his right of legal
redemption?
Both the land of the one exercising the right of redemption and the land sought to be redeemed must
be rural.

Which of these will not cause the extinguishment of sale?

Pre-emption

Jimin and RM entered into a contract. Jimin later on claimed that their contract was a mortgage while
RM claimed that it was a sale with a right to repurchase. The Court decided in favor of RM. How long can
RM redeem the property?
Thirty days from the date of finality of court judgment

Lee Min Who is the sole owner of a parcel of land located in Corea. He later sold it to Park Sue June with
a right to repurchase. Unfortunately, seller Mr. Lee died and left Aye, Bee, and Cee as heirs. Can Cee
later on repurchase the whole parcel of land?
No, she can only redeem the part which she may have acquired.

This refers to the remedy by which a court will modify a written agreement to reflect the actual intent of
the parties.
Reformation

Legal redemption can take place in the following, except:

Barter

This refers to a sale where the title of the property is immediately vested in the vendee a retro, subject
to the vendor’s right to repurchase.
Pacto de retro sale

Which of these statements is correct regarding period of redemption?

It lasts up to four years if there is no period agreed upon.

Which of these statements is true about legal redemption?

Written notice is indispensable.

Which of these is considered as sale and not an equitable mortgage?

The price of the sale with a right to repurchase is adequate.

Mina, Momo and Jihyo are co-owners of an undivided parcel of land, Mina sold her 1/ 3 interest to Jihyo
absolutely. Which is correct?
Momo cannot exercise the right of redemption.
Which of these is true about a vendee a retro?
The vendee a retro can refuse partial redemption.

Conventional redemption must be clearly stipulated upon by the parties.

This is true because it is an accidental element in the contract of sale.

This refers to the substitution of one party for another whose debt the party pays, entitling the paying
party to rights, remedies or securities that would otherwise belong to the debtor.
Subrogation

Soju and Yakult entered into a contract of sale of a beach lot property in Siargao. They agreed that seller
Soju will continue to possess the property until such time that he can pay off his debts to Yakult. Soju
and Yakult entered into a contract of:
Equitable mortgage

If the redemption is to be made by the seller, one of the following needs not be given to the buyer:
Interest on the price of the sale

Which of the following is not a requisite before a co-owner can exercise his right of legal redemption?
The sale must be made to a co-owner.
 Topic 8

S, minor of 16 years old, sold her bracelet to B for Php8,000. Later on, B, needing money to pay her
daughter’s tuition fee at CPAR plus some allowance for books and personal needs, borrowed Php15,000
from C, and as security, pledged the bracelet to the latter. B failed to pay C resulting into the auction
sale of the bracelet in favor of P for Php10,000. Which of the following statements is correct?

C can no longer recover the deficiency of Php5,000 from B. The pledge, together with the sale, is valid.
The voidable title of B is valid because it was not annulled.

The following are the characteristics of a contract of pledge except?

A preparatory contract

Britney obtained a loan from Beyonce. To secure the debt, Britney pledged her necklace to Beyonce.
Beyonce executed a private document, even before due date, stating she was abandoning the pledge. In
the meantime, Beyonce remained in possession of the ring and Britney has yet to express her
acceptance of the abandonment of the pledge.

The pledge of the necklace is extinguished.

Atashka borrowed Php50,000 from Nikita. The debt is secured by a pledge of Shelby’s bracelet. Is the
pledge valid?

Yes, the pledge is valid but Shelby is liable only to the extent of the value of the bracelet.

D1, D2, and D3 obliged themselves jointly to pay C Php45,000. To secure the obligation, D1 pledged his
ring, D2 his iPad, and D3 his coffeemaker. On the date of maturity, D1 paid C Php30,000. Which of these
is true?

D1 cannot redeem any of the three objects pledged.

This refers to the right of a person to retain a thing until he receives payment of his claim in the cases
provided by law such as one who has executed work on a movable.

Legal pledge

The following elements are common in both pledge and mortgage, EXCEPT:

The property on which the security is constituted must be delivered to the creditor.
Should the debtor fail to comply with his promise to constitute the pledge or mortgage:

The creditor may demand immediate payment

He loses the benefit of the period

Marianne obtained a loan of Php10,000.00 from Richard. The obligation is secured by a pledge of
Marianne’s ring which she delivered to Richard. Both the loan and the pledge were in a private
instrument. While the loan was outstanding, Marianne sold the ring through a public instrument to
Raphael who was not aware of the pledge. Under the deed of sale, Marianne obliged herself to deliver
the ring physically to Raphael after a week. Before Raphael could obtain actual delivery of the ring, he
learned that Marianne had earlier pledged the same and that Richard was selling the ring in a public safe
because of Marianne’s default in the payment of her debt.

Raphael is not bound by the pledge made by Marianne to Richard.

A pledge is extinguished through any of the following, except:

appropriation of the thing pledged after the thing is not sold at one public auction.

A third person who pledges his property to secure another person's debt is released from liability in the
following cases, except:

if an extension of time is granted to the debtor by the creditor with the pledgor's consent.

A thing pledged...

may guarantee the debts of another person

is indivisible even among successors in interest

D borrowed P10,000.00 from C the debt being payable in 6 months. To secure the debt, D promised to
pledge his ring within 2 weeks. Two weeks had already lapsed but D had not yet constituted the pledge.
FIRST: C may demand the constitution of the pledge. SECOND: D loses the benefit of the period given to
him to pay the debt; hence, C may demand immediate payment of the debt.

Both are true.

Jairus pledged his watch to Phoebe for P30,000. Jairus failed to pay his obligation. Phoebe sold it at
public auction for P28,000. Can Phoebe recover the deficiency?

No, even if there is stipulation

Frankie borrowed Php 10,000.00 from Alfred. The debt is secured by a pledge of Frankie’s ring and
bracelet. Which of the following statements is incorrect?

a. Frankie can ask for the extinguishment of the pledge only after he has paid the obligation in full.

b. None of the three other given statements is incorrect.

c. If Frankie pays Alfred Php 6,000.00, he cannot ask for the return of the ring or the bracelet so as to
extinguish partially the pledge.

d. If Frankie and Alfred agreed that the ring would secure the amount of Php 6,000.00 and the bracelet,
Php 4,000.00, Frankie can ask for the extinguishment of the pledge constituted on the ring upon his
payment of Php 6,000.00.

A borrowed Php100,000 from B with A’s cellphone given to B by way of pledge. It was stipulated that in
case of non-payment on due date, the cellphone would belong to B. This forfeiture is:

Pactum commissorium
 Topic 9
When the condition of a chattel mortgage is broken the following may redeem, except:
Mortgagee

A kind of mortgage which, although it lacks the proper formalities or other requisites of a mortgage
required by law, nevertheless reveals the intention of the parties to burden real property as a security
for a debt, and contains nothing impossible or contrary to law.
Equitable Mortgage

Is a contract whereby the debtor secures to the creditor the fulfillment of a principal obligation, specially
subjecting to such immovable property or real rights over immovable property which obligation shall be
satisfied with the proceeds of the sale of said property or rights in case the said obligation is not
complied with at the time stipulated.
Real Mortgage

A mortgage required by law to be executed in favor of certain persons.

Legal Mortgage

It is a contract whereby the creditor acquires the right to receive the fruits of an immovable of his
debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the
principal of his credit.
Antichresis

Which of the following cannot be the subject matter of chattel mortgage?

A building

Which of the following is not an essential requisite of real estate mortgage?

The mortgagor need not be the absolute owner of the thing mortgaged.

A kind of mortgage agreed to between the parties or constituted by the will of the owner of the
property on which it is created.
Voluntary Mortgage
It is a conditional sale of personal property as security for the payment of a debt, or the performance of
some other obligation specified therein, the condition being that the sale shall be void upon the seller
paying to the purchaser a sum of money or doing some other act named. If the condition is performed
according to its terms the mortgage and sale immediately become void, and the mortgagee is thereby
divested of his title.
Chattel Mortgage

It is a transaction by which the mortgagor reacquires or buys back the property which may have passed
under the mortgage or divests the property of the lien which the mortgage may have created.
Redemption
 Topic 10
All of the following are modes of extinguishment of agency, except?
Incapacity

P1, P2 and P3, each one owning a separate a separate lot, appointed A in one instrument to sell their
respective lots. Under the agreement, A will receive a commission of 10% of the selling price of each lot.
A was able to sell the lot of P1 for Php100,000; the lot of P2 for Php200,000; and the lot of P3 for
Php300, 000. How much commission may Frank collect from P1?
Php 10, 000

Which of the following is not among the fundamental obligations of the agent?
He shall carry out the agency even if its execution would manifestly result in loss or damage to the
principal.

The agency shall remain in full force and effect even after the death of the principal, if it has been
constituted:
In the interest of a third person who has accepted the stipulation in his favor
In the common interest of the principal and the agent

Angelica appointed Vinz as his agent to borrow Php15,000 from Roy. Vinz borrowed Php15,000 but
acted in his name. Who will be liable upon maturity?
Vinz only

Margoax leads Celyn to believe that Ethan is her (Margoax’s) agent. However, Ethan is not really the
agent of Margoax. Later, Celyn transacted with Ethan believing that Ethan is the agent of Margoax. What
kind of agency was created here?
Agency by estoppel

Andrea give a power of attorney to Anabelle for the sale of her cars, a Lancer and a Porsche. Their
agreement included, among other provisions, the following: (1) Anabelle shall be entitled to a
commission of 10% based on the actual selling price of the cars which Andrea fixed at a minimum of
P500,000.00 for the Lancer, and P700,000.00 for the Porsche; and (2) Anabelle need not to render
Andrea any accounting of his transactions as long as Anabelle turns over the actual selling price of the
cars net of the commission of 10%. Anabelle was able to sell the Lancer to Robin for P520,000.00, and
the Porsche for P700,000.00 to Gabby who give Anabelle a tip of P30,000.00. After the sale, Andrea
demanded from Anabelle an accounting of the transactions that she had made but Anabelle refused,
claiming that it was enough that she turned over the net selling price of P1,080,000.00 (P1,200,000.00
less 10% of P1,200,000.00 as commission) to Andrea as agreed by the two of them. Decide.
Anabelle must account and deliver to Andrea P1,250,000.00.

One where the agent has parted with value or incurred liability at the principal’s request, looking to the
exercise of the power as the means of reimbursement or indemnity.
Agency coupled with interest
An agent who guarantees the solvency of the third party with whom the agent makes a contract for the
principal.
Del credere agent

A kind of agency in which the agent acts in the name and representation of the principal.
Ostensible

P delivered to A 10,000 pieces of Mactan fabricated shell craft jewelry for the purpose of selling them at
Php10.00 each. Out of the proceeds of the expected sale, A is to receive a 10% commission. After three
(3) days, however, A sold all the items at Php15.00 each to B, but on 30-day credit. Under the situation:
A must pay Php100,000.00 immediately.

P appointed A to sell the former’s car for Php300,000. A sold the car to X for Php300,000 but A acted in
his own name. After delivery, X inspected the car and he found hidden defects therein. Can X file an
action against P even when A acted in his own name?
Yes, because this is a contract involving property owned by the principal.

Mariz, 30 years old, appointed Charles, 17 years old, as his agent to sell her car for P 5,000,000.
Thereafter, Charles sold the car to Michelle. Mariz however learned that the price of the car had
increased to P 10,000,000, so she sought to disaffirm the sale made by Charles to Michelle on the
ground that the contract is voidable, Charles being a minor. Decide.
The sale is valid because the principal is capable.
P, who is based in Pasig City, sent a letter with a special power of attorney to A, an agent dealing with
buy and sell of cars in Cebu City, to sell P’s cars. The letter which was sent through the postal office, was
duly received by A, who signed in the registry return receipt. A, however, did not respond to the letter.
Based on the foregoing data:
An agency was created between P and A by the implied acceptance of A of the agency.

Janelle authorized Justine to manage Janelle’s business affairs during the same that Janelle was in the
province. Justine allowed Jenneth to manage the store for him. Is Majen responsible for damages
caused by the acts of Jenneth?
Yes, if Jenneth was appointed by Justine against the prohibition of Janelle that he shall not entrust the
management of the store to another person.

P appointed A as his agent orally to sell his parcel of land for P20,000. ten days later, A sold the same
property for P300,000 through a public instrument executed between him and B. What is the effect and
status of sale between A and B?
The sale is void because there was no valid appointment of A as agent of P.

The following are the characteristics of both contracts of sale and agency which is not?
Preparatory
Janlem appointed Sarah as his agent with general powers on March 8. The next day, Fatima transacted
business with Sarah. On March 11, Janlem revoked the agency and published it in a newspaper of
general circulation. However, Fatima did not read the newspaper publication. After 5 days (March 16),
Fatima consummated another transaction with Sarah. Is the act of Sarah binding against Janlem?
No, because the agency is considered revoked and its publication is a sufficient warning.

An agent without any express authority from the principal appointed a sub-agent to help him carry out
the agency.
Both the agent and the sub-agent are liable to the principal for the acts of the sub-agent under the valid
substitution.