I.

B1, B2 and B3 inherited from their parents a 500 sq. m. lot which they leased to AA for
three (3) years. One year after, B1, claiming to have the authority to represent her siblings
B2 and B3, offered to sell the leased property to AA which the latter accepted. The sale was
not reduced into writing, but AA started to make partial payments to B1, which the latter
received and acknowledged. After giving the full payment, AA demanded for the execution
of a deed of absolute sale which B2 and B3 refused to do. Worst, AA learned that the
siblings sold the same property to BB. This compelled AA to file a complaint for the
annulment of the sale with specific performance and damages. If you are the judge, how
will you decide the case?
If I were the judge, I will dismiss the case for annulment of the sale and specific
performance filed by AA with respect to the shares pertaining to B3 and B2 because B1
cannot sell the shared property of B3 and B2 without their consent by way of Special
power of attorney.

Under the civil code, the sale of a property or any interest therein through an agent, the
authority of the agent should be in writing otherwise the sale shall be void.

In the case at bar, B1 sell the lot they inherited from their parents without the written
authority from B2 and B3 this constitute that the sale between B1 and AA is void in the
beginning. Thus, B1 cannot sell the shares of B2 and B3 without the written consent by
them. Therefore, the sale and the specific performance filed by AA should be dismissed.

I.
Ivana, Donalyn, and Zeinab entered into a partnership to operate a restaurant business.
When the restaurant had gone past break-even stage and started to garner considerable
profits, Zeinab died. Ivana and Donalyn continued the business without dissolving the
partnership. They in fact opened a branch of the restaurant, incurring obligations in the
process. Creditors started demanding for the payment of their obligations. A.) Who are
liable for the settlement of the partnership's obligations? Explain? B.)What are the
creditors' recourse/s? Explain.

A. Ivana and Donalyn are liable for the settlement of the partnership’s obligation.

Under the civil code, when any of partner dies or retires and the business is continued
without any settlement of accounts as between him or his estate, the surviving partners
are held liable for continuing the business despite the death of the other partners
 Here, since Ivana and Donalyn are the remaining partners to operate the restaurant
business, they are liable for the settlement of the obligations as partners. Thus, Ivana and
Donalyn should be all their liability to the creditors.

B. As to the recourse of the creditors, they can file the appropriate actions, such as, an
action for the collection of sums of money against the “partnership at will”. Also, if there
are no sufficient funds, the creditors may go after the private properties of Ivana and
Donalyn. Furthermore, Creditors may also sue the estate of Zeinab because the estate is
not excused from the liabilities of the partnership even if Zeinab is dead already but only
up to the time that he remained a partner. However, the liability of Zeinab’s individual
property shall be subject first to the payment of his separate debts.

II.
Bruno’s Salon, Inc., a beauty salon, was caught up in debt. Unlike five years ago, the Salon
was now facing tough competition from Brusko and Barumbado’s Barbers, to name a few.
In an effort to reduce its ballooning debt, Bruno’s Salon delivered, by way of dacion en
pago, twenty of its salon seats and ten of its hair blowers to its principal creditor, BDO. The
items were collectively valued at Php 500,000. Seven months after, BDO found that some of
the salon seats and hair blowers were defective. BDO sued Bruno’s Salon, Inc., for breach
of warranty against hidden defects. Is BDO correct in invoking the warranty against
hidden defects? Explain.

No. BDO is not correct in invoking the warranty against hidden defects because the
action of BDO is already prescribed.

Under the civil code, the action for the violation of an implied warranty against hidden
defect prescribes in six months.

Here, the BDO found out that some of the salon seats and hair blowers were defective is
after seven months of the said things sold. Therefore, the warranty against hidden defects
filed by BDO will not be prosper.

III.
Maria Clara owed Sisa the sum of Php 500,000.00. As payment, they agreed that Maria
Clara would appoint Sisa as agent to sell Maria Clara’s properties in different locations in
Metro Manila. The total commissions are expected to be equal to Php 500,000.00. Before
the last property of Maria Clara in Pateros, Metro Manila, could be sold (with a
commission of Php 100,000), Maria Clara terminated the agency contract. Sisa opposed the
termination of the agency. Decide with reason.
Maria Clara cannot terminate the agency agreement between her and Sisa.
 The civil code provides that agency contract may be terminated by the consent of both
principal and the agent, or upon its revocation, death, insanity of the principal, or by
withdrawal of the agent.

In the case at bar, Marial Clara terminated the agency without any consent with Sisa or
any valid reason for the said termination of the agency contract. Therefore, Maria Clara
cannot terminate the agency contract by her own will without any reason or consent by
Sisa.

IV.
On January 6 2015, Cardo leased the fishpond of Dalisay for a period of three years at a
monthly rental of Php 5,000.00, with an option to purchase the same during the period of
the lease for the price of Php 1, 500,000.00. After the expiration of the three-year period,
Dalisay allowed Cardo to remain in the leased premises at the same rental rate. On June
15, 2022, Cardo tendered the amount of Php 1, 500,000.00 to Dalisay and demanded that
the latter execute a Deed of Absolute Sale of the fishpond in his favor. Dalisay refused, on
the ground that Cardo no longer had an option to buy the fishpond. Cardo filed an action
for specific performance. Decide with reason

The action of specific performance filed by Cardo will no prosper.

Under the civil code if the period for the lease has not been fixed, it is understood it is
monthly basis or yearly depends on the previous contract that they agreed upon.
However, it did not have the effect in extending the what is stipulated or condition in the
said agreement.

Here, the three years period of leased with an option to purchase the fishpond has no
effect to the monthly rental of Cardo because the three years period with chance to
purchased is already expired and did not renew. Therefore, Dalisay is correct in refusing
to sell on the ground that the option had expire and the action filed by Cardo will not
prosper.

V.
Discus Recto Law and Maceda Law
Recto Law or the installment sales law is applicable only to sale which payable in
installments and not to sale where there is an initial payment and the balance is payable in
future, because it is not sale by installments. Also, Recto law covers contract of sale of
personal property, contract of leases of personal property with an option to buy. There
should be a valid contract of sale, the subject personal property, the payment should be
payable in installments basis and there has to be a failure to pay for two or more
installments.
 While, the Maceda Law is applicable to sales of immovable property on installments it
covers residential real estate property. One of the most important features in Maceda Law
is when the buyer after she or he paid installments at least two years, the buyer is entitled
to a one-month grace period in every year of installment payments made to pay the
unpaid installments without interest. Further, if the installments paid were less than two
years, the seller shall give the buyer a grace period for not less than sixty days. However,
if buyers failed to pay to the given grace period of sixty days the seller will cancel the
contract after 30 days.

VI.
Petra owned a townhouse that he rented out to Petronilla, a flight attendant with Philippine
Airlines (PAL). They had no written contract but merely agreed on a three (3)-year lease.
Petronilla had been using the townhouse as her base in Manila and had been paying rentals
for more than a year when she accepted a better job offer from Air Asia Airlines. This
meant that Singapore was going to be her new base and so she decided, without informing
Petra, to sublease the townhouse to Petring, an office clerk in PAL. A. Can Petra compel
Petronilla to reduce the lease agreement into writing? B. Does the sublease without Petra’s
knowledge and consent constitute a ground for terminating the lease?

a. Yes, Petra can compel Petronilla to reduce the lease agreement into writing.

Under the law on lease, an agreement of the leasing for a longer period other than one
year must be in writing in compliance with the Statute of Fraud. When a contract of lease
is enforceable under the statute of fraud the contracting parties may compel each other to
observe that form, once the contract has been perfected.

In the case at bar, Petra and Petronilla agreed to a three-year verbal lease agreement
which is covered by statute of fraud. Petring who is using the townhouse for a year that
may result for partial performance. The contract covered by statute of fraud. Therefore,
Petra can compel Petronilla to reduce the lease contract into writing for Petra’s
protection.

b. No, the sublease without Petra’s knowledge and consent is not ground for the
termination of the lease.

Under the law on lease, the lessee may sublet the thing leased or in a whole or part if in
the contract of lease there is no express prohibition.

Here, since there is no written agreement between Petra and Petronilla, there is no enough
grounds for the termination of the lease. Thus, the sublease may be continued even
without the knowledge of Petra as long as Petring is paying the rent responsibly.
 VII.
Boom and Basty formed a partnership to operate a car repair shop in Pasay City. Boom
provided the capital while Basty contributed his labor and industry. On one side of their
shop, Boom opened and operated a coffee shop, while on the other side, Basty put up a car
accessories store. May Boom and Basty engage in such separate businesses? Explain

Boom, is a capitalist partner, he may engage in the restaurant business because it is not
the same kind of repair shop business which the partnership between Boom and Basty is
engaged in. While, Rudy may not engage in any other business unless their partnership
expressly permits him to do so because he is an industrial partner, he has to devote his
full time to the business of the partnership.