Civil Law, 2018 Bar — Question XI-A

ESSAY

Samantha sold all her business interest in a sole proprietorship to Sergio for the amount of PhP1 million. Under the sale agreement, Samantha was supposed to pay for all prior unpaid utility bills incurred by the sole proprietorship. A month after the Contract to Sell was executed, Samantha still had not paid the PhP50,000 electricity bills incurred prior to the sale. Since Sergio could not operate the business without electricity and the utility company refused to restore electricity services unless the unpaid bills were settled in full, Sergio had to pay the unpaid electricity bills. When the date for payment arrived, Sergio only tendered PhP950,000 representing the full purchase price, less the amount he paid for the unpaid utility bills. Samantha refused to accept the tender on the ground that she was the one supposed to pay the bills and Sergio did not have authorization to pay on her behalf. (a) What is the effect of payment made by Sergio without the knowledge and consent of Samantha? (2.5%)

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