ADMU COLLEGE OF LAW

Final Exanliiations,lSt Sem ,2013 2014

Atty.Joaquin P.Obieta
October 3,2013

Agenry Partnership Trust & JV

Year II - A

1.

On March 27, 1989, PAL issued to Cervantes a round trip plane ticket for Manila-Los
Angeles-Manila. The ticket expressly provided an exprry date of one year from issuance,
or until March 27,1990. Four days before the expiration of the ticket, Cervantes used it. Upon
arrival at Los Angeles he immediately booked his return flight with the PAL Office there, and it
was confirmed for the April 2, 1990 flight. However, when Cervantes checked in on ApiI2,
1990, the PAL persorurel marked his ticket "NOT ACCEPTED DUE TO EXPIRATION OF
VALIDITY", and he was not allowed to board the plane. Cervantes sued for breach of contract
of carriage.
Cervantes admits he knew the ticket would expire on March 27, 1990, and that he was
required to write the Legal Department of PAL to request an extension of the ticket.
Nevertheless, Cervantes claims that the act of the PAL agents in confirrring his return flight
extended the ticket's period of validity. Is Cervantes correct? Explain briefly.

2.

In November 1969, Squibb appointed Green Valley as non-exclusive distributor of

Squibb's veterinary products for Luzon. The letter-agreement provided the following: as
distributor Green Valley will be entitled to a discount on the Squibb catalog prices; Green Valley
will put up a bond; payment or purchases of Squibb products will be due 60 days from date of
invoice; payment of postdated checks are not allowed; the agreement may be terminated only
after 30-days notice. Sometime later, Squibb filed a collection case against Green Valley for
goods delivered to the latter but unpaid.
Green Valley claimed that the contract with Squibb was a mere agency to sell; that it
never purchased goods from Squibb; that the goods received were on consignment only with the
obligation to tum over the proceeds, less its commission, or to return the goods if not sold, and
since it had sold the goods but had not been able to collect from the purchasers thereof, the
action was premature. Upon the other hand. Squibb claimed that the contract was one of sale so
that Green Valley was obligated to pay for the goods received upon the expiration of the 60-day
credit period. Who is correct? Explain with reasons.

3.

Lim Chai Seng is a Chinese merchant doing business in Manila. As such, he is subject to
merchant's tax of lYo on gross sales. He then employed Cu Chiat as an agent and
intermediary in making his business reports and in making payments to the BIR. Lim would
give Cu either money or a check which the latter was required to pay to the BIR.
ln l9l7 and 1918, without the knowledge of Lim, Cu Chiat doctored the reports to the
BIR and made it appear that the taxes due from Lim were considerably less than were in fact
due. He would then pocket the difference between what he would receive from Lim and what he
would pay to the BIR. In due time, the BIR discovered the discrepancy and required Lim to
make good the deficiency in the tax. Is Lim liable for the tax deficiency caused by Cu's
misappropriation? Explain briefl y.

4.

What kind of contract arises (valid, voidable, unenforceable, or void) if the agent acts
(a) with authority and in the principal's behalfl
O) with auttrority but in his own name?
(c) without authority in the principal's behalf?
(d) without authority in his own name?
(see back)

5.

In a case involving the grant of two powers of attomey to the same agent on different

dates by the same principal, the Court held that "The making and accepting of a new power of
attorney, whether it enlarges or decreases the power of the agent under a prior power of attorney,

must be held to supplant and revoke the latter when the two are inconsistent. If the new
appointment with limited powers does not revoke the general power of attorney, the execution of
the second power of attomey would be a mere futile gesture." Do you agree that the second
POA would be "a mere futile gesture". Explain your answer

6.

Regarding subagents :
If there is no prohibition from the principal and the agent appoints a subagent, who is
responsible for all the acts of the subagent? Are the subagent's acts valid, voidable, void or
unenforceable?
If there is a prohibition but the agent nevertheless appoints a subagent, what is the legal
effect of the subagents acts as to the principal? (Valid, voidable, void or unenforceable?)
If there is authority to appoint a subagent but the principal does not designate one, and
the designated subagent is notoriously incompetent or insolvent, who is liable for the acts of the
subagent?
If there is authority to appoint a subagent but the principal does not designate one, and
the designated subagent is not notoriously incompetent or insolvent, who is liable for the acts of
the subagent?
If there is authority to appoint a subagent and the latter is designated by the principal,
what is the liability of the agent for the acts of the subagent?

a)

b)
c)

d)

e)

7.

DR owned a parcel of tand on which he wanted to construct a house. In 1987 he obtained

a loan from Abad and mortgaged the house in favor of Abad as security for the loan. In
1988, DR decided to move to another province with his whole family. Before doing so, he
executed another document, entitled "irrevocable special power of attorney coupled with
interesf', authorizing Abad to sell and convey the land. In 1998, Abad sold the land to JoanneIn 2000, Abad died. In 2}Ol,the heirs of DR filed a case against Abad and Joanne for recovery
of possession and ownership of the land. The heirs claim that DR died in 1992, and his death
extinguished the special power of attomey to sell the land. Joanne claims that the SPA granted to
Abad stipulated that it was coupled with an interest and hence was irrevocable. She alleges that
the "interest" was the mortgage on the house built on the land. Who is correct? Explain.

8.

After the death of his principal and with full knowledge of such death, the attorney-infact sold his principal's parcel of land pursuant to a special power of attorney which the
principal had execut"a io ttlr favor. The administrator of the estate of the deceased principal went
io court to have the sale declared unenforceable and to recover the parcel of land. If the buyer
acted in good faith in buying the property in question, is the sale valid, unenforceable, or void?
Explain.

-END-

File a Petition for Review with the Depaftment of Justice.

File a Petition for Review with the Office of the President.

File

Motion

for Reconsideration with the Office of

the

Prosecutor.

File an appeal before the Civil Service Commission being both

public officers.
No remedy available.

di
e.

B.

Essay
ake

is the scion of the rich Fernando Clan. He has an autOmob e

business of his OWn and is a farniliar face in social events of the rich and
famous. Desplte having everything he has this desire to do SOmething
exciting that is to skirt the law.He wanted just fOr one time and fOr the fun
ofit to rob Citibank of Makati.

To pursue his objective ake ca ed hiS CloSest and moSt trusted

to a meeting to plan
friends namely MiChael John Ephrairn Mark and Jude
the robbery,Not equipped Mark had to purchaSe firearms frorn Jigs whO iS a

known gun smuggleri

The plan was tO rob the bank On Apri1 1 20011 the birthday of]ake,
A week befOre Apr 1 the group visited Citibank of Makati to Check and SCOut
the place to deterrnine the volume of Clients during specific hOurs of the day.
It appears that the leanest volume of clients is at l130 in the afternoon.

3ohn chanced upon hiS estranged Wife SOnia at the Mandarin HOtel
he said
he told her that his group planned to rob a bank, When asked why
they just wanted the excitement and adVenture that comes with iti SOnia
warned hirn that should they proceed She w l report the matter to the poliCe.

201l at
As planned the group proceeded tO rob the bank On Apri1 1
l:30 p.rn, Mike stood as the 100k-6ut and the rest barged intO the bank
thiS is a
pointing guns at the security guards On duty. ake in turn shOuted