Instructions: Provide the following case questions with brief answer. If the question is in essay form, limit your answer into four to five sentences.
- D, etc. executed in favor of C a document wherein they bound themselves to pay their indebtedness to C, mortgaged their house and lot as security, and agreed to the cession of said house and lot to C, transferring to her all their rights to the ownership and possession thereof, in case of insolvency on their part. D, etc. paid no part of their indebtedness. Is the agreement to convey the house and lot at an appraised valuation in the event of failure to pay the debt in money at its maturity valid? Explain.
- The house and merchandise of E insured by R (insurance company) were burned while the policy was in force. The policy contained the following clause: “The Company may at its option reinstate or replace the property damaged or destroyed, or any part thereof, instead of paying the amount of the loss or damage x x x but the company shall not be bound to reinstate exactly or completely, but only as circumstances permit x x x, and in no case shall the company be bound to expend more than it would have cost to reinstate such property as it was at the time of the occurrence of such loss or damage, nor more than the sum insured by the company hereon.” What is the effect of this clause on the obligation of R? Explain.
- Under a contract, the obligation of A, B and C was solidary. However, the judgment rendered against them, which has become final, was for the total amount sued without stating the nature or extent of their liability. May judgment be executed on the property of C alone to satisfy the entire obligation? Explain.
- Before the collection suit filed by B (bank), creditor, against the joint and solidary debtors could be decided, A, one of the debtors dies. After having been informed of the death, the court issued an order dismissing the case, citing Section 6, Rule 86 of the Rules of Court which provides: “Solidary obligation of decedent. — Where the obligation of the decedent is solidary with another debtor, the claim shall be filed against the decedent as if he were the only debtor, without prejudice to the right of the estate to recover contribution from the other debtor. In a joint obligation of the decedent, the claim shall be confined to the portion belonging to him.” Is the dismissal of the case correct? Explain.