IV.

Nante, a registered owner of a parcel of land in Quezon City, sold the property to Monica under
a deed of sale which reads as follows:
"That for and in consideration of the sum of P500,000.00, value to be paid and delivered to me,
and receipt of which shall be acknowledged by me to the full satisfaction of Monica, referred to
as Vendee, I hereby sell, transfer, cede, convey, and assign, as by these presents, I do have sold,
transferred, ceded, conveyed and assigned a parcel of land covered by TCT No. 2468 in favor of
the Vendee."
After delivery of the initial payment of P100,000.00, Monica immediately took possession of the
property. Five (5) months after, Monica failed to pay the remaining balance of the purchase price.
Nante filed an action for the recovery of possession of the property. Nante alleged that the
agreement was one to sell,which was not consummated as the full contract price was not paid.
Is the contention of Nante tenable?

SUGGESTED ANSWER:
The contention of Nante is not tenable. The deed itself states that for consideration received, he
sells, transfers, and conveys the land to Monica and there was delivery of the property to the
latter. The contract is clearly one of sale as there was no reservation of ownership on the part of
the seller Nante. The non-payment of the price in a contract of sale would only entitle the seller
to rescind the contract but it does not thereby prevent the transfer of ownership particularly so
as in this case, where there was already delivery to the buyer.

IX.
Spouses Macario and Bonifacia Dakila entered into a contract to sell with Honorio Cruz over a
parcel of industrial land in Valenzuela, Bulacan for a price of Three Million Five Hundred Thousand
Pesos (P3,500,000.00). The spouses would give a downpayment of Five Hundred Thousand Pesos
(P500,000.00) upon the signing of the contract, while the balance would be paid for the next
three (3) consecutive months in the amount of One Million Pesos (P1,000,000.00) per month.
The spouses paid the first two (2) installments but not the last installment. After one (1) year,
the spouses offered to pay the unpaid balance which Honorio refused to accept.
The spouses filed a complaint for specific performance against Honorio invoking the application
of the Maceda Law. If you are the judge, how will you decide the case? (4%)

SUGGESTED ANSWER:
I will rule in favor of Honorio. The invocation of the Maceda Law is misplaced. The law applies
only to sale or financing of realty on installment payments including residential units or residential
condominium apartments and does not apply to sales of industrial units or industrial lands like in
the case presented. Another reason why the Maceda law will not apply is that, the sale in the
case at bar is not the sale on installment as contemplated by the law. The sale on installment
covered by the Maceda Law is one where the price is paid or amortized over a certain period in
equal installments. The sale to the Spouses Dakila is not a sale on installment but more of a
straight sale where a down payment is to be made and the balance to be paid in a relatively short
period of three months.

II
Mr. Bong owns several properties in Pasig City. He decided to build a condominium named
Flores de Manila in one of his lots. To fund the project, he obtained a loan from the National
Bank (NB) secured by a real estate mortgage over the adjoining property which he also owned.
During construction, he built three (3) pumps on the mortgaged property to supply water to the
condominium. After one (1) year, the project was completed and the condominium was turned
over to the buyers. However, Mr. Bong failed to pay his loan obligation to NB. Thus, NB foreclosed
the mortgaged property where the pumps were installed. During the sale on public auction of the
mortgaged property, Mr. Simon won in the bidding. When Mr. Simon attempted to take
possession of the property, the condominium owners, who in the meantime constituted
themselves into Flores de Manila Inc. (FMI), claimed that they have earlier filed a case for the
declaration of the existence of an easement before the Regional Trial Court (RTC) of Pasig City
and prayed that the easement be annotated in the title of the property foreclosed by NB. FMI
further claimed that when Mr. Bong installed the pumps in his adjoining property, a voluntary
easement was constituted in favor of FMI.
Will the action prosper? (4%)

SUGGESTED ANSWER:

No, the action will not prosper. The essence of a mortgage is that it immediately subjects the
property upon which it is imposed, and whoever the possessor may be, to the fulfillment of the
obligation for whose security it was constituted.5 There was no voluntary easement in this case
because at the time the water pumps were constructed, the subject lot where the water pumps
were constructed and the condominium belong to the same person. No one can have an easement
over his own property. (Bogo- Medellin vs. CA G.R. 124699, July 31, 2003.) Even of the
assumption that an easement was created in favor of FMI that alone will not defeat the right of
the mortgagee to enforce the security if the debtor defaults.

XVIII.
Spouses Magtanggol managed and operated a gasoline station on a 1,000 sq.m. lot which they
leased from Francisco Bigla-awa. The contract was for a period of three (3) years. When the
contract expired, Francisco asked the spouses to peacefully vacate the premises. The spouses
ignored the demand and continued with the operation of the gasoline station.
One month after, Francisco, with the aid of a group of armed men, caused the closure of the
gasoline station by constructing fences around it.
Was the act of Francisco and his men lawful? Why? (4%)

SUGGESTED ANSWER:
No, the act was not lawful. Even if the lessee’s right to occupy the premises has expired, the
lessor cannot physically oust the lessee from the leased premises if the latter refuses to vacate.
The lessor must go through the proper channels by filing an appropriate case for unlawful detainer
or recovery of possession. Every possessor has a right to be respected in his possession (Article
539) and in no case my possession be acquired through force or intimidation as long as there is
a possessor who objects thereto. (Article 536) The act of Francisco is an abuse of rights because
even if he has the right to recover possession of his property, he must act with justice and give
the lessees their day in court and observe honesty and good faith.

XXVII.
Fe, Esperanza, and Caridad inherited from their parents a 500 sq. m. lot which they leased
to Maria for three (3) years. One year after, Fe, claiming to have the authority to represent
her siblings Esperanza and Caridad, offered to sell the leased property to Maria which the
latter accepted. The sale was not reduced into writing, but Maria started to make partial
payments to Fe, which the latter received and acknowledged. After giving the full payment,
Maria demanded for the execution of a deed of absolute sale which Esperanza and Caridad
refused to do. Worst, Maria learned that the siblings sold the same property to Manuel. This
compelled Maria 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? (4%)

SUGGESTED ANSWER:
I will dismiss the case for annulment of the sale and specific performance filed by Maria with
respect to the shares pertaining to Esperanza and Caridad. Since the object of the sale is a co-
owned property, a co-owner may sell his undivided share or interest in the property owned in
common but the sale will be subject to the result of the partition among the co-owners. In a co-
ownership there is no mutual agency except as provided under Article 487. Thus, Fe cannot sell
the shares of Esperanza and Caridad without a special power of attorney from them and the sale
with respect to the shares of the latter without their written authority is void under Article 1874.
Hence, the sale of the property to Manuel is not valid with respect to the shares of Esperanza
and Caridad. Maria can only assail the portion pertaining to Fe as the same has been validly sold
to her by Fe.

VIII.
Tess leased her 1,500 sq. m. lot in Antipolo City to Ruth for a period of three (3) years, from
January 2010 to February 2013.

On March 19, 2011, Tess sent a letter to Ruth, part of which reads as follows:
"I am offering you to buy the property you are presently leasing at P5,000.00 per sq. m. or for a
total of P7,500,000.00. You can pay the contract price by installment for two (2) years without
interest.

I will give you a period of one (1) year from receipt of this letter to decide whether you will buy
the property."
After the expiration of the lease contract, Tess sold the property to her niece for a total
consideration of P4 million.
Ruth filed a complaint for the annulment of the sale, reconveyance and damages against Tess
and her niece. Ruth alleged that the sale of the leased property violated her right to buy under
the principle of right of first refusal.
Is the allegation of Ruth tenable? (4%)

SUGGESTED ANSWER:

No, the allegation of Ruth is not tenable. The letter written by Tess did not grant a right of first
refusal to Ruth. At most, it is to be construed as an option contract whereby Ruth was given the
right to buy or not to buy the leased property. An option is itself not a purchase but it merely
secures the privilege to buy. However, the option is not valid because it was not supported by a
cause or consideration distinct from the price of the property. (Article 1479) Also, Ruth does not
appear to have exercised her option before the offer was withdrawn by the subsequent sale of
the property to the niece of Tess.