The Recto Law (Art.
1484) refers to sale of movables payable in installments and performance of the right of first refusal which was violated, should prosper. The ruling in Equatorial Realty
limiting the right of seller, in case of default by the buyer, to one of three remedies:
(a) exact fulfillment;
(b) cancel the sale if two or more installments have not been paid;
(c) foreclose the chattel mortgage on the things sold, also in case of default of two or more installments,
with no further action against the purchaser. False
The Maceda Law (R.A. 6552) is applicable to sales of immovable property on installments. The most
important features are (Rillo v. CA, 247 SCRA 461):
(1) After having paid installments for at least two years, the buyer is entitled to a mandatory grace period
of one month for every year of installment payments made, to pay the unpaid installments without
interest. If the contract is cancelled, the seller shall refund to the buyer the cash surrender value equivalent
to fifty percent (50%) of the total payments made, and after five years of installments, an additional five
percent (5%) every year but not to exceed ninety percent (90%) of the total payments made.
(2) In case the installments paid were less than 2 years, the seller shall give the buyer a grace period of not
less than 60 days. If the buyer fails to pay the installments due at the expiration of the grace period, the
seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or
demand for rescission by notarial act. True
It is a right granted under Sec 3, RA 6552 or “An Act to provide protection to buyer of real estate in
installment basis. True
Section 3 (b) of RA 6552 or Maceda Law provides that If the contract is cancelled, the seller shall refund to
the buyer the cash surrender value equivalent to fifty percent (50%) of the total payments made. False
Section 4 of RA 6552, in case the installments paid were less than 2 years, the seller shall give the buyer a
grace period of not less than 60 days. If the buyer fails to pay the installments due at the expiration of the
grace period, the seller may cancel the contract after 30 days from receipt by the buyer of the notice of
cancellation or demand for rescission by notarial act. False
Rights granted to the seller in case of default of 2 or more installments by the buyer
Article 1484. In a contract of sale of personal property the price of which is payable in installments, the
vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's
failure to pay cover two or more installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void. False
In a 20-year lease contract over a building, the lessee is expressly granted a right of first refusal should the
lessor decide to sell both the land and building. However, the lessor sold the property to a third person
who knew about the lease and in fact agreed t respect it. Consequently, the lessee brings an action against
both the lessor-seller and the buyer (a) to rescind the sale and (b) to compel specific performance of his
right of first refusal in the sense that the lessor should be ordered to execute a deed of absolute sale
infavor of the lessee at the same price. The defendants contend that the plaintiff can neither seek
rescission of the sale nor compel specific performance of a “mere" right of first refusal.
Decide the case. [5%] (1998 Bar Question)
SUGGESTED ANSWER:
The action filed by the lessee, for both rescission of the offending sale and specific
Development, Inc. vs. Mayfair Theater, Inc. (264 SCRA 483), a case with similar facts, sustains both rights
of action because the buyer in the subsequent sale knew the existence of right of first refusal, hence in
bad faith.
Lessee can seek rescission because pursuant to Equatorial Realty Co. v. Mayfair Theater (264 SCRA 483
[1996]) rescission is a relief allowed for the protection of one of the contracting parties and even third
persons from all injury and damage the contract of sale may causes or the protection of some incompatible
and preferred right. The buyer in the subsequent sale knew the existence of the right of first refusal, hence
in bad faith. True
A squatter's hut, being an illegal construction, constitutes a public nuisance per se, if it poses problems of
health and sanitation. (City of Manila v. Garcia. 19 SCRA 41[1967J). If the squatter’s hut is built on a private
land and hinders or impairs the owner's use of his or her own property, then it would constitute a private
nuisance. True
A swimming pool is not a nuisance and is an exception to the attractive nuisance doctrine (Hidalgo v.
Guillermo, 91 Phil. 488 [1952]). It generally does not cause an injury, harm or prejudice to an individual or
the public (Article 694, par. 1). False
A house of prostitution is a public nuisance because it shocks or disregards the decency or morality of the
community. False
I don’t know – basta it is considered as a public nuisance because there is a tendency to annoy the public
True
A noisy or dangerous factory even if built in a private land may be considered a nuisance if it offends the
senses of the owners of the adjacent property or poses a danger to their safety (Article 694, par. 1, Civil
Code). This kind of nuisance may be classified as a public nuisance if it affects and annoys those who come
within its sphere. False
Before he left for Riyadh to work as a mechanic, Pedro left his Adventure van with Tito, with the
understanding that the latter could use it for one year for his personal or family use while Pedro works in
Riyadh. He did not tell Tito that the brakes of the van were faulty. Tito had the van tuned up and the brakes
repaired. He spent a total amount of PI 5.000.00. After using the vehicle for two weeks. Tito discovered
that it consumed too much fuel. To make up for the expenses, he leased it to Annabelle. Two months later.
Pedro returned to the Philippines and asked Tito to return the van. Unfortunately, while being driven by
Tito, the van was accidentally damaged by a cargo truck without his fault.
Who shall bear the P15,000.00 spent for the repair of the van? Explain. (2%) (2005
Bar Question)
SUGGESTED ANSWER:
The contract between Pedro and Tito is one of commodatum. Of the P15.000.00 spent,
Pedro, the bailor, shall bear the expenses for the repair of the faulty brakes, they being extraordinary
expenses incurred due to the non-disclosure by the bailor of the defect or
fault; Tito, on the other hand, shall shoulder that part of the P15,000.00 spent for the
tune-up, said expense being ordinary for the use and preservation of the van.
Who shall bear the costs for the van’s fuel, oil and other materials while it was with Tito? Explain. (2%)
(2005 Bar Question)
SUGGESTED ANSWER:
The costs for the fuel and other materials are considered ordinary expenses, and
consequently Tito, the bailee, shall shoulder them. (Art. 1941, Civil Code) -for use and preservation of the
thing loaned
1

Does Pedro have the right to retrieve the van even before the lapse of one year?
Explain. (2%) (2005 Bar Question)
SUGGESTED ANSWER:
No, Pedro cannot demand the return of the van until after the expiration of the one -year
period stipulated. However, if in the meantime he should have urgent need of the van,
he may demand its return or temporary use.
Who shall bear the expenses for the accidental damage caused by the cargo truck, granting that the
truck driver and truck owner are insolvent? Explain. (2%) (2005 Bar Question)
SUGGESTED ANSWER:
Both Tito and Pedro shall bear equally the costs of the extraordinary expenses, having
been incurred on the occasion of actual use of the van by Tito, the bailee, even though
he acted without fault. (Art. 1949(2), Civil Code)
E. What defense, if any, is available to them? (2%) (2005 Bar Question)
SUGGESTED ANSWER:
These persons identified by law to be liable may raise the defense that they exercised
proper diligence required under the circumstances. Their responsibility will cease when
they prove that they observed all the diligence of a good father of a family to prevent
damage. As regards the employer, if he shows to the satisfaction of the court that in the
selection and in the supervision of his employees he has exercised the care and
diligence of a good father of a family, the presumption is overcome and he is relieved
from liability. (Layugan v. 1AC, 167 SCRA 363 11988]).

Under the law on quasi-delict, aside from the persons who caused injury to
persons, who else are liable under the following circumstances:

A. When a 7-year-old injures his playmate while playing with his father's rifle. Explain. (2%) (2005 Bar
Question)
SUGGESTED ANSWER:
Under Article 221 of the Family Code, parents and other persons exercising parental
authority shall be civilly liable for the injuries and damages caused by the acts or
omissions of their unemancipated children or wards living in their company and under
their parental authority subject to the appropriate defenses provided by law.

B. When a domestic helper, while haggling for a lower price with a fish vendor in the course of buying
foodstuffs for her employer’s family, slaps the fish vendor, causing her to fall and sustain injuries.
Explain. (2%) (2005 Bar Question)
SUGGESTED ANSWER:
Under Article 2180, employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry. As the domestic helper
was then in the exercise of her duties and acting within the scope of her assigned tasks,
her employer is also liable for the damage she has caused to the fish vendor.

C. A carpenter in a construction company accidentally hits the right foot of his co-worker with a hammer.
Explain. (2%) (2005 Bar Question)
SUGGESTED ANSWER:
His employer, the construction company, is also liable for the damages that the
carpenter caused to the latter’s co-worker. Under Article, 2176 and 2180 of the Civil
Code, liability is based on culpa aquiliana which holds the employer primarily liable for
tortious acts of its employees subject, however, to the defense that the former exercised
all the diligence of a good father of a family in the selection and supervision of his
employees. (Franco v. IAC, 178 SCRA 331 [1989]).

D. A 15-year-old high school student stabs his classmates who is his rival for a girl while they were going
out of the classroom after their last class. Explain. (2%) (2005 Bar Question)
SUGGESTED ANSWER:
Under Section 218 of the Family Code, the school, its administrators and teachers, or
the individual, entity or institution engaged in child care shall have special parental
authority and responsibility over the minor child while under their supervision, instruction
or custody. Authority and responsibility shall apply to all authorized activities whether
inside or outside the premises of the school, entity or institution.