Northeastern College

COLLEGE OF LAW
Santiago City
SALES
FINAL EXAMINATION

INSTRUCTIONS: Read each question carefully. Understand what is asked for.

Answer concisely and with legal basis. A mere “yes” or “no” answer will not
suffice.
I
a. Upin and Ipin entered into a contract of sale of land subject to the condition
that the squatters be ejected. It was contended by Upin that since Ipin failed to
meet the condition, he was no longer obligated to proceed with the sale as the
contract is void due to the failure to comply with such condition. Rule on Upin’s
contention. (2.5 points)
b. Vic was a prospective buyer. Joey owns a land in Davao. Vic is from Northern
Luzon. Their negotiation was thru emails. Joey sent a letter to Vic stating that he
and his wife agreed to sell the land to Vic and that the deed of sale will be
executed upon the arrival of Vic in Davao. When Vic arrived, Joey said that he is
no longer interested in selling. Vic filed a case to compel Joey to sell the land.
Joey contended that the contract is unenforceable because it is not in writing.
He contended that under the statute of frauds, it is unenforceable. Is Joey’s
contention tenable? (2.5 points)
b. In a contract between Romina and Daniela, it was stipulated that beds would
be delivered by the Romina with Daniela’s obligation to pay the same at 25%
commission on sales. There was a question as to whether the contract was a
contract of sale or agency to sell. Decide. (5 points)
II
a. A team of basketball players went to a store to buy shoes and out of the 10
members, 5 of them were able to choose the shoes. They agreed to pay the price
upon delivery. The other four members were able to choose but the shoes were
not available at that time but they are normally manufactures. The last member
could not find shoes that could fit his 16 inches feet and therefore, he has to
order for such kind of shoes. What transactions were entered into by each
players? (5 points)
b. A obliged himself to deliver a determinate car with a market value of
Php.250,000.00. While B obliged himself to deliver his watch and
Php.150,000.00 in cash. What kind of contract do A and B entered into? (5
points)
III
a. Emma the owner of a house and lot in Santiago City, gave an option to Georgia
to purchase said property for Php.100,000.00 within ninety days from May 1,
2013. Georgia gave Emma one peso (Php.1.00) as option money. Before the
expiration of the 90-day period, Georgia went to Emma to exercise her option
and to pay the purchase price but Emma refused because somebody wanted to
buy her property for Php.150,000.00 and because there was no sufficient
consideration for the option. Georgia sued Emma to compel her to accept
payment and execute a deed of Sale in her favor. Decide the case. (3 points)
b. Aquil agreed to sell to Muros a parcel of land for Php.50,000.00. Muros was
given up to January 1, 2021 within which to raise the necessary funds. It was
further agreed that if Muros could not produce the money on or before said
date, no liability would attach to him. Before January 1, 2021, Aquil backed out
of the agreement. Is Aquil obliged to sell the property to Muros? Explain. (3
points)
c. In a 20-year lease contract over a building, the lessee is expressly granted a
right of first refusal should the lessor decide to sell both the land and building.
However, the lessor sold the property to a third person who knew about the
lease and in fact agreed to respect it. Consequently, the lessee brings an action
against both the lessor-seller and the buyer (a) to rescind the sale and (b) to
compel specific performance of his right of first refusal in the sense that the
lessor should be ordered to execute a deed of absolute sale in favor of the lessee
at the same price. The defendants contend that the plaintiff can neither seek
rescission of the sale nor compel specific performance of a “mere” right of first
refusal. Decide the case. (5 points)
IV
a. Adrian sell his car to Butoy, a compadre. If Adrian and Butoy fix the price at
Php.500,000.00 payable in installment, secured by a chattel mortgage on the car
and a real estate mortgage by Carlo, upon foreclosure of the chattel mortgage,
may Adrian foreclose the real estate mortgage for the unpaid balance? Explain.
(3 points)
b. Suppose in the problem above, Danny, a friend of Butoy, executed a
promissory note, binding himself to pay in case of deficiency. Can Adrian
demand from Danny the payment of said deficiency? Why? (3 points)
c. May it be stipulated that in a foreclosure of the chattel mortgage to secure
the purchase of a car on installment, the installments paid will not be refunded?
Explain. (3 points)
V
Mr. X is the Vice-President of ABC Bank and officer-in-charge of the Acquired
Assets Department and has a wife, Ivana. In one of the biddings conducted by
ABC Bank, Ivana participated in the bid and was declared the highest bidder;
thereafter, a title was issued to her over that parcel of land covered by the bid.
After a new President of ABC Bank was appointed, such transaction was
uncovered, hence, you as counsel of ABC Bank was consulted as to the validity
of the transactions.
a. Give your opinion on the validity of the transaction and cite legal
reasons. (2.5 points)
b. Assuming that you render the sale invalid, can Ivana interpose
the defense of imprescriptibility of the title should ABC Bank
decide to have it declared null and void? Explain. (2.5 points)
c. What are the exceptions when a husband and wife can sell
property to each other? (2.5 points)
d. Is the prohibition applicable to a man and woman who are living
together as husband and wife without the benefit of marriage?
Why? (2.5 points)
VI
a. Henry filed a petition for declaration as the sole heir of the properties left by
his father, but it was opposed by the four children of his father in a second
marriage. After the hearing, the judge ordered a partition of the properties. The
decision became final and executory, hence a project of partition was submitted
and approved by the judge. A year later, one of the heirs sold his share to Hans.
One year later, Hans sold the same lot to the judge. Henry, who seemed to have
gotten a raw deal in the partition, filed an administrative case against the judge
founded on Article 1491, NCC and Canon 25 of the Code of Judicial Ethics
prohibiting judges from acquiring by purchase or even at auction properties and
rights in litigation. Was Henry correct? Why? (2 points)
 b. May a lawyer purchase a property of his client subject of litigation
during the pendency of the litigation? Why? (2.5 points)
c. Suppose the contract between the lawyer and client is a contingent
one, is the prohibition applicable? Why? (2.5 points)
d. Does the prohibition against sale between a lawyer and client over a
property subject of litigation during the pendency of litigation apply to
a deed of assignment and leases? (2 points)
VII
a. Tito sold to Vic and Joey with the right to repurchase. The sale was in a
public instrument which was not yet registered. Vic and Joey never took
physical or material possession of said land. The period for repurchased
elapsed without Tito repurchasing the property. Later, Tito sold the same
land to Ryan in a private instrument. Ryan was in good faith and he
immediately entered into the material possession of the land. Who should
be preferred, Vic and Joey on the one hand or Ryan on the other hand? (3
points)

b. Januario orally appointed April as his agent to sell a parcel of land. On

February 28, 2015, April sold the land to May who forthwith took
possession thereof. It turned out, however, that on February 14, 2015,
Januario without informing April, had already sold the same land to June
who up to now has not yet taken possession thereof. Neither May nor
June has registered his/her purchase. Whose contract should prevail?
Reason. (3 points)

c. Pauline offered to sell to Alden and Maine a house and lot. The property
was already registered under the Torrens system that time and they made
appropriate inquiries with the Register of Deeds; they found out that it
was mortgaged for Php.800,000.00. They paid Pauline to settle the
mortgage and the release of the mortgaged was annotated in the title.
Thereafter, they executed an Absolute Deed of Sale over the subject
property and registered the same. However, it turns out that it was
already previously sold to EB Bank through extrajudicial foreclosure;
unfortunately, it was not registered. Who has a better title, Alden and
Maine or EB Bank? (3 points)
d. Reed sold land to Jacob. Then, Reed became Jacob’s tenant.
Subsequently, Reed sold the same property to Phampi. Neither sale was
registered. Who should be the owner, Jacob or Phampi? (3 points)

VIII
a. A sold to B on credit 50 sacks of sugar. A consigned the goods to XYZ
trucking for delivery from Negros to Isabela. At the time of the perfection
of the contract A did not know that B is insolvent. While the goods are on
transit, A exercised his right of stoppage in transit. Is A’s action valid? (2.5
points)

b. Will your answer will still be the same if the fact of insolvency is known to
the seller at the time of the perfection of the contract? (2.5 points)

IX
a. Sharon executed a Deed of Sale of a parcel of land in favour of Renzil
reserving for herself the right to repurchase the same within five years
from the date of the contract. The contract provided that during the
repurchase period Sharon will retain possession of the land as lessee and
pay the land taxes thereon. The consideration for the sale was
Php10,000.00 but the land was worth double the price. Sharon failed to
repurchase the land within the agreed period and Renzil applied to the
Court for the consolidation of her title. Sharon opposed the application
and claimed that he had the right to repurchase the land. Whose stand
should be upheld? (5 points)

b. On January 12, 2012, A and B entered into a contract whereby A sold to B

a parcel of land for and in consideration of Php.10,000.00, A reserving to
himself the right to repurchase the same. Because they were friends, no
period was agreed upon for the repurchase of the property.

b.1. Until when must A exercise his right of repurchase? (2.5 points)

b.2. If A fails to redeem the property within the allowable period, what
would you advise B to do for his better protection? (2.5 points)
c. A contract of sale over a parcel of land was entered into by and between
the parties for only Php.80,000.00. It was being questioned, as the
intention was one of equitable mortgage. It was found out that the
payments amounted to Php.120,000.00 but evidence was shown that the
amount of Php.80,000.00 was placed in the contract to reduce the
documentary stamps, transfer tax, etc. Is the conveyance one of sale or
merely a security for the payment of a loan? (2.5 points)

d. A contract of loan where petitioner borrowed money from the private

respondents was entered into and as security for the payment of his
obligation, he executed a real estate mortgage. As he failed to pay, there
was foreclosure of the mortgage and the sale was set. He went to court
for an injunction but the case was settled where they entered into a Deed
of Sale with Right to Repurchase within six (6) months, with the stipulation
that the seller a retro would retain possession of the property. Since
petitioner failed to exercise the right to repurchase, the buyer went to
court for the consolidation of ownership of the land to him. The trial court
ordered the consolidation. The CA reversed, hence, he went to the SC,
contending that the contract is one of sale with right to repurchase.
Decide. (2.5 points)
X
a. Noel, Zaldy and Roger are brothers who own an undivided parcel of land
at Rizal, Santiago City. They jointly sold the property with a right to
repurchase to Julius. Can any of the sellers (brothers) prior to the
expiration of the redemption period repurchase the whole property? Why
or why not? (3 points)

b. If, however, the brothers sold their respective shares in the property
separately, may Julius, the buyer, compel Noel to redeem the whole
property? Why or why not? (3 points)

c. Rosvie and Dolly were co-owners of a parcel of land. Last January 3, 2021,
when she paid her real estate tax, Rosvie discovered that Dolly had sold
her share to Boyette on November 10, 2020. The following day, Rosvie
offered to redeem her share from Boyette but the latter replied that
Rosvie’s right to redeem has already prescribed. Is Boyette correct or not?
Why? (3 points)
Goodluck!