2013 Bar

Examinations
Civil Law
J. ARTURO D. BRION
Essay:

Lito obtained a loan of
Php.1,000,000 from Ferdie payable
within one year. To secure
payment, Lito executed a chattel
mortgage on a Toyota Avanza and a
real estate mortgage on a 200-
square meter piece of property.
Problem:
A. Would it be legally significant from the
point of view of validity and enforceability- if
the loan and the mortgages were in the public
or private instruments?
Answer:
No, it is not significant from the point of view of validity and
enforceability.
Under the law respecting a contract of loan it is not required
that it be in a public or private instrument, what is required in
such contracts is that there is consent, object, and cause between
both parties and that it only be in writing even a private one.
With respect to the contract of mortgage, under the law even
if it is required that it be contained in a public document and
registered in the Register of Deeds, such contract is still binding
with respect to both parties who entered the contract of
mortgage. However such non-registration and non-containment in
a public document does not provide them security against claims
made by third persons so that if there is a claim made by a third
person over such property it does not make their contract of
mortgage a preferred claim over the claim of the third person.
B. Litos failure to pay led to the extra-judicial
foreclosure of the mortgaged real property.
Within a year from foreclosure. Lito tendered
a managers check to Ferdie to redeem the
property. Ferdie refused to accept payment
on the ground that he wanted payment in
cash; the check does not qualify as legal
tender and does not include the interest
payment. Is Ferdies refusal justified?
Answer:
No, His refusal is not justified.
Under the law, the right of redemption is an
absolute privilege, the exercise of which is
entirely dependent upon the will and discretion
of the redemptioner. Hence, being discretionary,
Ferdie may not refuse the exercise of right of
redemption by Lito. Under jurisprudence, the
Supreme Court has already sanctioned
redemption by check, Hence, he may not refuse if
Lito chooses to redeem it by issuance of a check.
II. When the obligation became due
and demandable. C turned out to be
insolvent. Should the share of
insolvent debtor C be divided only
between the two oA, B, C and D are
the solidary debtors of X for
Php.40,000. X released D from the
payment of his share of
Php.10,000ther remaining debtors, A
and B?
A. Yes. Remission of Ds share carries with it
total extinguishment of his obligation to the
benefit of the solidary debtors.
B. Yes. The civil code recognizes remission as a
mode of extinguishing an obligation. This
clearly applies to D.
C. No. The rule is that gratuitous acts should
be restrictively construed, allowing only the
least transmission of rights.
D. No. As the realease of the share of one
debtor would then increase the burden of the
other debtors without their consent.
D. No. As the realease of the share of one debtor
would then increase the burden of the other debtors
without their consent.

Under the New Civil Code:
Art.1217 par.3
When one of the solidary debtors cannot, because of his insolvency,
reimburse his share to the debtor paying the obligation, such share shall
be borne by all his co-debtors, in proportion to the debt of each

Art.1215
novation, compensation, confusion, or remission of the debt, made by
any of the solidary debtors, shall extinguish the obligation, without
prejudice to the provisions of Art.1219.

Art.1219
The remission made by the creditor of the share which affects one of the
solidary debtors does not release the latter from his responsibility
towards the co-debtors, in case the debt had been totally paid by anyone
of them before the remission was effected.


III. Amador obatained a loan of P300,000. from
Basilio payable oon March 25, 2012. As security
for the payment of his loan, Amador
constituted a mortgage on his residential house
and lot in Basilios favor. Cacho, a good friends
of Amador, guaranteed and obligated himself
to pay Basilio, in case Armador fails to pay his
loan at maturity.

III. (1) If Amador fails to pay Basilio his loan in
March 25, 2012 can Basilio compel Cacho to
pay?
A. No, Basilio cannot compel Cacho to pay
because as guarantor, Cacho can invoke the
principle of excussion, i.e., all the assets of
Basilio must first be exhausted.
B. No, Basilio cannot compel Cacho to pay
bacause Basilio has not exhausted the avialable
remedies agaist Amador.
C. Yes, Basilio canot compel Cacho to pay
because the nature of Cachos undertaking
indicates that he has bound himself solidarily
with Armador.
D. Yes, Basilio can compel Cacho who bound
himself to unconditionally pay in case Amador
fail to pay; thus the benefit of excussion will not
apply.


C. Yes, Basilio can compel Cacho to pay because the
nature of Cachos undertaking indicates that he has
bound himself solidarily with Armador.

What has been entered into by Cancho with
Basilio is a contract of surety therefore he is
solidarily liable with Amador if the latter fails
to pay. By employing the words, in case
Amador fails to pay, he binds himself
solidarily with Amador making him liable for
the contract of surety.
III. (2) If Amador sell his residential house and lot to
Dieg, can Basilio foreclose the real estate mortgage?
A. Yes, Basillio can foreclose the real estate mortgage
because real estate mortgage creates a a real right
that attaches to the property.
B. Yes,Basilio can foreclose the real estate mortgage.
It is binding upon Diego as the mortgage embodied in
a public instrument
C. No, Basilio cannot foreclose the real estate
mortgage. The sale confers ownership on the buyer,
who must therefore consent.
D. No, Basilio cannot foreclose the real estate
mortgage. To deprive the new owner of ownership
and possesion is unjustand inequitable.
A. Yes, Basillio can foreclose the real estate
mortgage because real estate mortgage creates
a a real right that attaches to the property.

Under Art.2126 of the NCC:
The mortgage directly and immediately subjects the
property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation
for whose security it was constituted.
A contract of mortgage registered creates a right in
rem, a real right, a lien inseperable from the
property mortgaged, which is enforceable against
the whole world, affording specific security for the
satisfaction of a debt. Hence, even if it was sold the
contract of mortgage is still attached to the property
and may be subject to foreclosure when the exercise
of the right to foreclose is exercised.
IV. Cruz lent Jose his car until Jose
finished his Bar exams. Soon after
Cruz delivered the car, Jose brought it
to Mitsubishi Cubao for maintenance
check up and incurred cost of P8,000.
Seeing the carspeeling and faded
paint, Jose also had the car repainted
for P10,000. Answer the two question
below based on these common facts.
IV. (1) After the bar exams, Cruz asked for the return of his car. Jose
said he would return it as soon as Cruz has reimbursed him for the
car maintenance and repainting costs of Php.18,000. Is Joses
refusal justified?

a. No, Joses refusal is not justifie. In this kind of contract, Jose is
obliged to pay for all the expenses incurred for the preservation
of the thing loaned.
b. Yes, Joses refusal is justified. He is obliged to pay for all the
ordinary and extraordinary expenses, but subject to
reimbursement from Cruz.
c. Yes, Joses refusal is justified. The principle of unjust enrichment
warrants the reimbursement of Joses expenses.
d. No, Joses refusal is not justified. The expenses he incurred are
useful for the preservation of the thing loaned. It is Joses
obligation to shoulder these useful expenses.
D. No, Joses refusal is not justified. The
expenses he incurred are useful for the
preservation of the thing loaned. It is Joses
obligation to shoulder these useful expenses.

Under the NCC:
Art.1941 The bailee is obliged to pay for the
ordinary expenses for the use and preservation of
the thing loaned.

Art.1944 The bailee cannot retain the thing
loaned on the ground that the bailor owes him
something, even though it may be by reason of
expenses. However, the bailee has a right of
retention for damages mention in Ar.t1951
IV.(2) During the bar exam month, Jose lent the car to his
girlfriend, Jolie, who parked the car at the Mall of Asias
open parking lot, with the ignition key inside the car. Car
thieves broke into and took the car.Is Jose liable to Cruz for
the loss of the car due to the Jolies negligence?
a. No, Jose is not liable to Cruz as the loss was not due to his
fault or negligence.
b. No, Jose is not liable to Cruz. In the absence of any
prohibition, Jose could lend the car to Jolie. Since the loss
was due to force majeure, neither Jose nor Jolie is liable..
c. Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie
without Cruzs consent, Jose must bear the consequent
loss of the car.
d. Yes, Jose is liable to Cruz. The contract between them is
personal in nature. Jose can neither lend nor lease the car
to a third person.
D. Yes, Jose is liable to Cruz. The contract
between them is personal in nature. Jose can
neither lend nor lease the car to a third person.
Under the NCC:
Art1939. Commodatum is purely personal in character.
Consequently:
(2) The bailee can neither lend nor lease the object of the
contract to a third person. However, the members of the bailees
household may make use of the thing loaned, unless there is a
stipulation to the contrary, or unless the nature of the thing forbids
such use.
Art.1942 The bailee is liable for the loss of the thing, even if it
should be through a fortuitous event:
(1)If he devotes the thing to any purpose different from that for
which it has been loaned;
(4) If he lends or leases the thing to a third person, who is not a
member of his household.