FINAL EXAMINATION

SALES

GUIDELINES

1. The questionnaire consists of two (2) numbers contained in one (1) page. Read each question very carefully.

2. The examination has a total of seventy-five (75) points. Twenty-five (25) points will be added for submissions
that are complete, timely, and in proper form.

3. Do not copy the question. Do not repeat the question.

4. Answer clearly, sequentially, and concisely.

5. A mere “Yes” or “No” answer without any discussion will not be given any credit.

6. Answers must be in A4 paper, single-spaced, with Arial Narrow font size 11.

7. Answers must be in PDF format and received by the lecturer’s e-mail by 22 October 2018 at 11:59 PM.
Multiple submissions are allowed, provided that the submissions are complete and follow the prescribed
form. Only the last complete submission will be graded. Incomplete submissions will not be marked.

8. Extensions will not be allowed, unless the examinee is physically incapacitated to answer the examination
from the time it was distributed to the class until 22 October 2018 at 11:59 PM. An examinee who desires for
an extension must submit a physician’s certification under oath that the examinee was physically
incapacitated to answer the examination from the time it was distributed to the class until 22 October 2018 at
11:59 PM, supported by a medical abstract describing the cause of such physical incapacity.

9. Submissions that do not follow the prescribed guidelines will not be marked.

10. Requests for reconsideration will not be entertained.

PROCEED TO THE NEXT PAGE.

QUESTIONS

I.

Mocha rented a house from Ethel. They both agreed that Mocha will rent the house for P25,000 a month, the rent
to be paid in cash every month, beginning 01 January 2018 until 31 December 2018. Mocha, in turn, leased
Ethel’s house to Drew for P20,000 per month for a period of six months beginning 01 February 2018. Drew paid
Mocha the six-month rent in advance. When Drew explored the house, he discovered that the stairwell leading to
the basement of the house had already fallen into disrepair and must be fixed at the soonest time possible;
otherwise, the wine cellar in the basement could no longer be accessed. Worried about the vintage wines stored
in the wine cellar, Drew informed Mocha, who informed Ethel, of the need to repair the stairwell. During the 20
days when the stairwell was being repaired, Drew could not sleep because of the noise made by the construction
workers in repairing the stairwell; otherwise, the ongoing repairs did not cause further disturbance. Meanwhile,
Mocha caused the installation of a P50 million replica of the Triumph of Poseidon and Amphitrite mosaic on the
floor of the house. On 01 September 2018, Ethel sued Mocha for unlawful detainer with the Metropolitan Trial
Court because of Mocha’s failure to pay rent despite repeated demands from Ethel. The court found in favor of
Ethel. Undeterred, Mocha appealed the Metropolitan Trial Court’s decision to the Regional Trial Court. The
appeal was perfected on 31 October 2018.

a. What are the two kinds of lease agreements? Explain each. (5 points)
b. What are Ethel’s obligations to Mocha? (5 points)
c. What are Mocha’s obligations to Ethel? (5 points)
d. Is the lease agreement between Mocha and Ethel considered a month-to-month contract? (5 points)
e. If Mocha remains in the premises until 15 January 2018, can she ask the court to fix a longer term for
the lease? (5 points)
f. Mocha failed to pay Ethel her rent on the house from 01 February 2018 to July 2018. Can Ethel collect
Mocha’s unpaid rent from Drew? (5 points)
g. Can Drew request Mocha for a proportionate reduction of the rent because of the disturbance created
by the repair of the stairwell? (5 points)
h. Can Mocha remove the mosaic at the end of the lease? (5 points)
i. What is Ethel’s remedy against Mocha’s appeal with the Regional Trial Court and how can she enforce
said remedy? (5 points)

II.

On 01 June 2003, Harry and Sally executed a contract whereby Harry sold his condominium unit to Sally for P5
million, upon the condition that Harry can buy back the condominium from Sally within 15 years from the date of
the contract. On 02 June 2012, Harry’s creditors sent a notice to Sally that they are intending to exercise Harry’s
right of redemption on his behalf. The creditors opted to go after the condominium sold by Harry to Sally because
they found it easier to do so; in fact, they did not put in any effort to collect Harry’s debt or go after Harry’s other
properties. Stressed by Harry’s creditors, Sally died on 01 June 2015, leaving his heirs, S1, S2, and S3. Before
Sally’s heirs can execute a deed of extrajudicial settlement, Harry approached S1, claiming that he can redeem
the entire condominium unit by paying back the purchase price that Sally had paid to him to S1.

a. Under what conditions can a contract of sale be considered as an equitable mortgage? (5 points)
b. If Sally is still alive, can Harry validly exercise his right of redemption on 01 June 2018? (5 points)
c. If Harry validly exercises his right of redemption within the proper period, against whom can he enforce
his right? (5 points)
d. Can Harry’s creditors exercise his right of redemption over the condominium sold to Sally? (5 points)
e. Can Harry redeem the entire condominium unit by paying back the purchase price that he had received
from Sally to S1? (5 points)

END OF EXAM