I.

Andres, Bong, and Carlos entered into an agreement (embodied in a public instrument) wherein Andres and
Bong would contribute land which was to be developed into a subdivision while Carlos would contribute his
technical expertise and efforts in developing and marketing the subdivision. The land would then be sold to
the public and Andres and Bong would be entitled to 60% and Carlos 40% of the sales proceeds. Pursuant to
the agreement the land was mortgaged to a bank and the loan proceeds were used to develop the land.

a. What is the name or the designation of the contract entered into among Andres, Bong, and Carlos?

The subdivision project flopped because adverse claims on the lots scared away buyers. The bank
eventually foreclosed on the land. Andres and Bong sued Carlos for the latter to bear a part of the losses.

b. Is Carlos liable to bear a part of the losses?

II.

On 1 April 2010, Pedro sent a text message to his brother, Jose, a resident of Iloilo City, saying, “I donate my
vintage Alfa Romeo sports car to u wc I know u hav long bin wanting.” Jose texted back saying, “Tnx 4 giving d
Alfa 2me! ” Pedro texted back, “Ur welcome.” Upon his lawyer’s advice, Jose mailed a letter of acceptance
of the donation to Pedro, but it was received in Pedro’s house a day after the demise of Pedro in a helicopter
crash while campaigning for congressman. Jose filed an action against the administrator of Pedro’s estate for
the delivery of the Alfa Romeo based on the donation. Jose presented the text messages between him and
Pedro which are stored in his cellular phone and also the letter of acceptance. The executor opposed the claim
on the ground that the donation was void. Will Jose’s suit prosper?

III.

Spouses Limot executed a Contract to Sell their land in favor of Pee Daf whereby the latter shall pay
P100,000.00 as partial payment and the balance of P400,000.00 shall be paid in ten installments. It was
stipulated that Spouses Limot will transfer the title upon the payment of the full price. Three months later, the
Spouses Limot sent a letter to Pee Daf rescinding the sale for his failure to pay the installments. Thereafter,
they executed a deed of sale over the same parcel of land in favor of Napu Les. Pee Daf sued for specific
performance and argued that Spouses Limot could not have validly sold the land to Napu Les because they
were no longer the owners of the same and that as the buyer who first took possession of the land, he has a
better right than Napu Les because the latter was in bad faith. Both transactions were as yet unregistered. If
you were the judge, how will you decide the case?

IV.

Kate, a Filipina, married John, an Australian national who was domiciled in Canada. The union was blessed with
three children Joey, Jess and Jen. In 2005, John executed a holographic will in Sydney which although not
recognized as a valid form of a will under the laws of Australia was so recognized under the laws of Canada. He
instituted Kate as sole heir to his estate. Under Australian law a person may will his estate to anyone provided
the instituted heir is alive at the time of the testator’s death. The following year, John died in a plane crash. He
left an estate worth $2 million dollars. His will was presented for probate before the Regional Trial Court of
Makati. The three sons filed an opposition to the probate on the grounds: a) The laws of Australia do not allow
holographic wills; b) they were deprived of their legitimes under Philippine law. Resolve the opposition.

V.

Drew borrowed P500,000 from Cindy, with Steve acting as surety for the loan. The loan was also secured by a
real estate mortgage executed by Martin in favor of Cindy. On the maturity date, Steve offered to pay Cindy
the P500,000 in cash. Cindy asked Steve if Drew knew about Steve’s offer to pay and Steve replied that Drew
did not know about it

a. Can Steve compel Cindy to accept from him? Explain.

b. Assuming that Cindy refuses to accept Steve’s payment, what is the recourse of Steve, if any? Explain.
c. Let us assume that Drew did not know of Steve’s payment of the debt. When Steve tried to seek
reimbursement from Drew, the latter was unable to pay because of insolvency. May Steve foreclose
upon the mortgage executed by Martin? Explain.

VI.

Peter, Andy, and Beth had an agreement wherein Peter lent his Nissan Sentra to Andy and Beth for their free
use for one week. Twelve days later, while Beth was driving the car at the South Super Highway with due care,
she met an accident in which she had no fault. The car was a total wreck. Peter then sued Andy for payment of
the P500,000 value of the car. Andy countered that he should not be liable as the loss of the car was due to a
fortuitous event and the one actually using it was Beth. Andy also argued that assuming he could be held liable,
it should only be for the amount of P250,000.

a. What is the name or the designation of the contract entered into among Peter, Andy, and Beth?
Explain.
b. Should Andy be held liable to Peter for the value of the car? If so, for how much? Explain.

VII.

In 1979, Bruce brought from Selma a parcel of registered land evidenced by a duly executed deed of sale.
Before buying Bruce inspected the original certificate of title on file with the register of deeds and found no
encumbrance annotated thereon. Bruce presented the deed of sale and Selma’s owner’s duplicate title to the
register of deeds. The entry was made in the primary entry book and the corresponding fees were paid as
evidenced by the official receipt. However no transfer certificate of title was issued to Bruce because the
original certificate of title in Selma’s name was temporarily misplaced after fire partly gutted the office of the
register of deeds. Meanwhile the land had been possessed by Selma’s distant cousin, Tania, openly, adversely
and continuously in the concept of owner since 1974. It was only in April 2012 that Bruce sued Tania to recover
possession. Tania in her answer invoked the defenses that: (a) Bruce is not an innocent purchaser for value
since he should have inspected the land before buying it; and (b) she had acquired ownership over the land by
prescription. Decide with reasons.

VIII.
Demi borrowed P300,000 from Polly evidenced by a promissory note. Both Demi and Polly are residents of
Manila. The promissory note signed by Demi states that the loan is “payable when able.” Four years had lapsed
from the grant of the loan and Demi has yet to pay Polly despite the latter’s written and oral demands.

a. Polly filed a collection suit against Demi before the Metropolitan Trial Court of Manila. If you were the
lawyer for Demi, how would you counter the suit filed by Polly? Explain.

b. Assuming that you were the lawyer for Polly, what action would you file in behalf of Polly? Where
would you file the suit? Explain.

IX.

Acme Corporation mortgaged its building to the Bank of the Philippine Archipelago in order to secure a loan of
P50,000,000. The building was built by Delta Builders, Inc. using material furnished by Altis Corporation. The
contract price for the construction, the price of the materials, and the 6-month’s wages of the workers of Acme
are all unpaid. Acme also has unpaid income taxes owing to the BIR. Since Acme failed to pay the loan, the
bank foreclosed on the mortgage and the building was sold at the foreclosure sale for P40,000,000 to Value
Partners, Ltd. Who would have a right to the P40,000,000? Explain.

X.

Rosario obtained a loan of P100,000 from Jennifer and pledged her diamond ring. The pledge contract signed
by the parties stipulated that if Rosario is unable to redeem the ring on due date, she will execute a document
in favor of Jennifer providing that the ring shall automatically be considered full payment of the loan.

a. Is the stipulation valid? Explain.

b. Assume that the pledge contract did not contain the stipulation regarding the execution of the
document but provided that in case the ring pledged is sold at public auction to satisfy the debt and
there is a deficiency, Rosario would be liable for the same. After the loan became due and demandable,
Rosario was unable to pay the P100,000. After proper proceedings, the ring was sold at public auction
for P70,000. May Jennifer file an action against Rosario to recover the deficiency of P30,000 in case
Rosario refuses to pay the same? Explain.

XI.

The Aegis Nursing Institution, Inc. (ANI) was lambasted by Ding in a radio broadcast as operating a diploma mill
churning out ill-trained nursing graduates who had paid their way through. ANI sued Ding for moral damages.
Ding filed an answer where he raised the defense that a juridical person is not entitled to moral damages. Is
Ding’s defense meritorious? Explain.

XII.
Portia and Dina entered into an oral contract wherein Dina agreed to the sale of Lot 1 to Portia for the price of
P2,000,000. It turned out that at the time Portia and Dina agreed upon the sale, Dina was not the owner of Lot
1.

a. Is the contract of sale valid? Explain.

Later on Portia asked Dina to deliver the lot to her but Dina refused. Portia filed an action for specific
performance against Dina. Dina filed a motion to dismiss on the ground that she cannot be compelled to
perform the contract since it was not in writing.

b. If you were the judge, would you grant Dina’s motion to dismiss? Explain.

XIII.

Daimos corporation, an oil trading company based in Singapore, executed a contract wherein it agreed to
deliver 100,000 barrels of Brent crude oil at US$108 per barrel to Petron Corporation on 18 September 2014.
Subsequently the United Nations authorized the invasion of Iran for its failure to halt its nuclear-weapons
program. War ensued. The price of Brent crude oil rocketed to US$250 per barrel. On 18 September Petron
demanded delivery of the crude oil from Daimos. The latter asserted that it had been relieved of its obligation
to deliver the crude oil because of caso fortuito and under the doctrine of rebus sic stantibus.

a. What do you understand by the doctrine of rebus sic stantibus?

b. Is Daimos’ contention meritorious? Explain.

XIV.

Felipe is the owner of a piece of land, which has no outlet to a public highway because it is surrounded by a
vast track of land owned by Felina. Felipe has been passing through a pathway across Felina’s land for over
thirty-five years. Felina wanted to construct a commercial building on her land and decided to close the
pathway. She offered another way, which is still through her land, but is more than 500 meters longer.

a. Is Felina already barred from closing the pathway being used by Felipe?
b. Supposing that Felina is not barred, may Felipe insist on a new pathway that is shorter than that
offered by Felina?