FAR EASTERN UNIVERSITY-Institute of Accounts Business and Finance
LAW ON SALES
ASSIGNMENT 1
1. A offered to sell his house and lot for P10M to B, who was interested in buying the
same. In his letter to B, A stated that he was giving B a period of one-month within
which to raise the amount, and that as soon as B is ready, they will sign the deed of
sale. One week before the expiration of the one-month period, A went to B, and told
him that he is no longer willing to sell the property unless the price is increased to
P15M. May B compel A to accept the P10M first offered, and execute the sale? GIVE
Reason/s.
Answer:
No, because the promise to sell on the option granted to B to purchase A's house has no cause
or consideration separate from the selling price under ART. 1479 and 1324 of the Civil Code. In
which case, if only one promise to buy is made, there is no legal effect, and the promise can be
withdrawn at any time. However, if B paid option money to A, B has the right to compel A to
accept the first offered price, which is the 10M. A cannot easily withdraw the sale because it is
required to end the 1 month covered by the option money, so A may be liable for breach of
contract if A does not accept the 10M.
2. A sold to B land, which at the time of sale did not belong to A. Is the sale valid? GIVE
REASON/S.
Answer:
Yes, because the seller does not need to own the land at the time of the contract's perfection,
the important thing is that he will be the owner of the land when A (the seller) is required to
deliver the thing or the land to B.
3. Your buyer bought a 200sqm subdivision lot at P3,000/sqm. He paid 25% down
payment. The balance is payable in 120 amortizations at 21% per annum. He has paid
84 monthly amortizations totaling P737,612.20 inclusive of penalty interest of
P32,000.
Compute for him his Cash Surrender Value under the Maceda Law.
Answer:
Down payment:
P 150,000 (Sqm x price per sqm x down payment percentage)
Amort:
737,612.20
Total:
887,612.20
Less Penalty:
(32,000)
Amount
855,612.20
Refund %:
60%
Cash Surrender Value:
(84/12 = 7 years) (50% + 5% + 5%= 60%)
513,367.32
4. S sold to B a car for P1M. The condition for the sale is for B to execute a chattel
mortgage on the thing sold. The term of the sale is for B to pay a down payment of
P200,00 and the balance to be paid on July 15, 2020. However, the balance was not
paid by the buyer so S foreclosed the chattel mortgage on the thing sold. It was sold
for P700,000. Can S recover the deficiency? Give reason/s?
Answer:
Yes, S can recover the deficiency because the law does not apply to a straight-term sale under
ART. 1484 or the recto law. Another is that B is at fault for not paying thus S has no choice to sell
it to another but as it sells and there is a loss of 100,000 then S may recover that deficiency.
5. S sold to B a car for P1M. The condition for the sale is for B to execute a chattel
mortgage on the thing sold. The balance of 800,000 is payable in twenty equal
installments. B defaulted on the succeeding installments. S sued B for the collection
of the balance and the court rendered judgment in favor of S. S by execution of
judgment sold the car for P700,000. Can S recover the deficiency? Give reason/s?
Answer:
Yes, because the deficiency can be recovered in the case of the S execution of the sale, and it is
a judgment in the seller's favor (S).
6. S sold to B a car for P1M. The condition for the sale is for B to execute a chattel
mortgage on the thing sold. The balance of 800,000 is payable in twenty equals
installments. B defaulted on his 2 or more installments, so S foreclosed the mortgage
and sold it for P700,000. Can S recover the deficiency? Give reason/s?
Answer:
No, S cannot recover the deficiency because the decision of S in choosing on foreclosing the
chattel mortgage on the thing sold then S shall have no further against to the buyer for any
deficiency.