Business Organizations I Class Exercises September 27, 2013 Instructions: Answer the respective problems assigned to you by citing

the applicable provisions of law and jurisprudence. Present your answers in a report to class starting on October 3, 2013 and send me a soft copy of your answer. 1. Anthony had an option to purchase a vessel. He entered into a contract with Bart wherein he assigned his option to the latter under the condition that Bart would appoint him as agent of the vessel for five years. Bart purchased the vessel and appointed Anthony as agent in accordance with the contract. After three years of operation, Bart revoked the appointment of Anthony as agent for loss of confidence. Anthony sued Bart for damages. Decide. (Bellingan, Gracelyn) 2. Dennis borrowed P 5 Million from the bank and to secure the payment thereof, signed a Deed of Real Estate Mortgage in favor of the bank in the usual printed form wherein it is provided among others that for purposes of extra-judicial foreclosure, the mortgagor hereby appoints the mortgagee his attorney-in-fact to sell the property mortgaged under Act 3135, as amended, to sign all documents and perform any act requisite and necessary to accomplish said purpose. Upon failure of Dennis to pay the loan, the bank foreclosed and bought the property at the foreclosure sale. During the one year period of redemption Dennis died and the property was not redeemed despite the lapse of one year. The bank, despite its actual knowledge of Dennis death, consolidated its title by executing the affidavit of consolidation and Deed of Sale of the land in its favor as empowered in the Deed of Real Estate Mortgage. After the bank had consolidated its title, the heirs of Dennis asked the bank to allow them to redeem the property by paying only the P 5 million plus accrued interest and expense of foreclosure, contending that the sale in favor of the bank was invalid due to the prior death of Dennis which revoked the power of attorney inserted in the Deed of Mortgage, but the bank demanded payment of P 20 million, then the fair market value of the property. Can the bank be required to accept the tender of redemption by the heirs of Dennis? Decide. (Benigay, Precious) 3. Alfred authorized Ben to sell his property for P 3 million subject to the condition that the purchaser would assume the mortgage existing in favor of Plaridel Bank and agreed to pay Ben a commission of 6% on the purchase price plus whatever over-price he may obtain for the property. Ben found a buyer, Cesar, who was willing to buy the property under the terms stipulated by Alfred. When Ben introduced Cesar to Alfred, Alfred told Ben that he was no longer interested in selling the property and a document was signed canceling the written authority to sell with the agreement of Ben. One month later, Alfred sold the property directly to Cesar for P 3.5 million. Alfred refused to pay Ben his commission, contending that when the property was sold to Cesar, Bens authority to sell was already canceled. Ben sued to collect his commission. Decide. (Villarmea, Mithi) 4. Angela lent Basilio P 1,000,000.00. To secure the loan, Basilio mortgaged a parcel of land which he owns. In the real estate mortgage contract, Angela was given the power to sell the land, with the proceeds to be applied to the payment of the loan and interest thereon. Two years later, Basilio received an attractive offer for the mortgaged property and gave notice to Angela that he was revoking her special authority to sell, although he assured her that the mortgage would remain in force and effect. Angela challenges the

revocation at will, but Basilio counters that the mortgage more than sufficiently protects her credit. Decide. (Tam, Leoni) 5. In 1970, Jose authorized Pedro to sell a parcel of land. The SPA was duly annotated on the title. A year later, Jose died, but Pedro was not aware of this fact which terminated the agency. In 1973 the children of Jose extrajudicially adjudicated the land to themselves and sold it in their own name to Juan. Since the owners copy of the title was not in their possession, neither Juan nor the heirs were able to have this sale registered. A few months later, Pedro sold the land to Pablo, who had the sale promptly registered. When Jose learned of the sale to Pablo, he immediately sought to nullify the same on the ground that he had the better right since 1) he bought the land from the present owners of the land who had acquired it upon the death of Jose; 2) he bought the land prior to its sale to Pablo; and 3) Pedro was no longer authorized to transact the land as his agency was extinguished by the death of Jose pursuant to Art. 1919 [4]. Decide. (Cuevas, Leslie) 6. Henry, James and Jojo inherited from their parents a large parcel of land. Henry and James went abroad to reside in Canada. In their absence, Jojo applied for the registration of the whole land in his name only. In due time, Jojo obtained a Torrens Title for the land. When Henry and James returned from Canada after seven years, they found out what Jojo did and sued him for their respective shares. Jojo contends that the decree of title can no longer be reviewed or changed because of the lapse of more than one year from its issuance. Henry and James come to you for legal advice. Decide. (Subrian, Chandrina) 7. Ulrich executed a special power of attorney in favor of Wendell to sell a parcel of land. The SPA stipulated that the agents authority would be valid and subsisting even in the event of the principal predeceasing the agent. Ulrich died. Sometime later, Wendell sold the land to Persephone, who relied on the SPA. When Leopold, father of Ulrich, learned of the sale, he sought to annul it on the ground that Wendells authority had already expired. Decide. (Salon, Marchell) 8. Romeo executed a special power of attorney in favor of Fabian over a parcel of land. It included the power to mortgage the property. Fabian negotiated for a loan with ABC Bank in his own name and offered the property of Romeo as security. Fabian also executed a promissory note in his own name for the loan. When the loan became due and demandable, ABC Bank sought to collect directly from Romeo, asserting that Fabian acted as Romeos agent in obtaining the loan. Decide. (Maxino, Izzy) 9. Union 76 Oil Company (Union) entered into a licensing agreement with Quirante under the following terms: P 1.00 annual rental for the use of the premises and equipment of Union, exclusive purchase sale of Union products at the station, regular maintenance check of the station and its equipment by Union. A fire broke out at this station resulting in damages to the neighborhood. The victims of the fire file a claim against Union which resists it on the ground that Quirante was an independent contractor and should therefore solely bear the costs of the fire at the station. Decide. (Real, Tara) 10. On November 3, 1990, RSB entered into a compromise with the PCGG and surrendered 51% of his equity in ETPI. On April 17, 1998, the heirs of FM filed an action to recover the shares, alleging that their predecessor-in-interest, FM, was the real owner of the shares which RSB disposed as his own. The Solicitor General seeks your opinion on the legal options of the Philippine Government. (Herrera, Norman) 11. A group of Korean investors purchase a piece of land and build a large building to house

their association. Being unregistered, the association decided that the property would be registered in the name of Hyun Dae, a naturalized Filipino. Thereafter, Dae leased a large portion of the building and collected rent. When the association demanded an accounting from Dae, he refused, claiming that he is the owner of the property. The association comes to you for advice on its legal rights to the property. (Salon, Ephraim) 12. Rosendo gave Celso P 650,000.00 to purchase a parcel of agricultural land in Basay, Negros Oriental. The sale was consummated and title to the property was issued in Celsos name. Rosendo died six months later. Upon learning of the sale at that time, Gregoria, Celsos elder sister demands that Celso should transfer title to the property to Rosendos estate, or to all the surviving heirs, because Celso merely held this property in trust for Rosendo. Celso comes to you for legal advice on what his rights are under the circumstances.(Magcanta, Bryan).