Oblicon Project Bar Review Questions

1. Fortuitous event; event; liability liability of the debtor debtor (1932 BAR) BAR)

A executed in favor of B a promissory note for P10,000, payable after  two years, secured by a mortgage on a certain building valued at P20,000. One year year afte afterr te te exec execut utio ion n of te te no note te,, te te mo mort rtga gage ged d bu buil ildi ding ng was was tota totall lly y destroyed by a fire of accidental origin. !an B demand from A te payment of  te value of te note immediately after te burning witout waiting for te expiration of te term" #easons. •

Suggested anser!

$es, B can can dem demand and from from A te te paym paymen entt of te te valu valuee of te te no note te immediately after te burning witout waiting for te expiration of te term, unless unless A immedi immediate ately ly gives gives anote anoterr securi security ty or guaran guaranty ty wic wic is e%uall e%ually y satisfactory. &is is clear from te provision of 'o. ( of Art. 11)* of te !ivil !ode wic declares tat wen by is own acts te debtor as impaired te guaranty or security, or or wen troug a fortuitous event te guaranty or security disappears, te debtor sall lose te benefit of te term or period. +t must be observed tat tere is a difference between te effect of impairment and te effect of disappearance as applied to te security or guaranty. &e rules may be restated as follows   -1 +f te guaranty or security is impaired troug te fault of te debtor, e sall lose is rigt to te benefit of te period/ owever, if it is impaired witout is fault, e sall retain is rigt.   -2 +f te guaranty or security disappears troug any cause, even witout any fault of te debtor, e sall lose is rigt to te benefit of te  period. +n eiter case, owever, te debtor sall not lose is rigt to te  benefit of te period period if e gives gives a new guaranty or security.

2. "oint obligation obligation (19#1 BAR)

, $ and  owe A and B P12,000 in a oint obligation. 3ow many obligations exist in tis case, wo are te parties in eac obligation and for ow muc" 4y" •

Suggested Anser!

&ere are six obligations in te above case. &e parties and te amount of  eac obligation are -1  as debtor for P2,000 in favor of A as creditor/ -2  as debtor for P2,000 in favor of B as creditor/ -( $ as debtor for P2,000 in favor of A as creditor/ 1

-5 $ as debtor for P2,000 in favor of B as creditor/ -6  as debtor for P2,000 in favor of A as creditor/ -7  as debtor for P2,000 in favor of B as creditor. &e above answers are clearly deducible from Art. 120* of te !ivil !ode wic declares tat if te obligation is oint, te credit or debt sall be  presumed to be divided into as many e%ual sares as tere are creditors or  debtors, te credits or debts being considered as distinct from one anoter, subect to te #ules of !ourt governing te multiplicity of suits. &a8e te credit of P12, 000 for instance. 9ince tere are two creditors tere will also be two credits of P7, 000 for eac creditor. +n te case of te debt of P12, 000, since tere are tree debtors tere will also be tree debts of P5,000 against eac debtor. 'ow, as far as A, te first first creditor, creditor, is concerned, concerned, if e wants wants to collect is credit of P7, 000, e must proceed against all te debtors. &us e will be able to collect P2, 000.00 from , P2, 000 from $, $, anoter anoter P2, 000 from .  . &e same is true in te case of B, te second creditor.

3. $bligations $bligations ith a %eriod; &'hen &'hen his eans %erit %erit hi to do so (19#3 BAR)

: borrowed P2, 000.00 from ! in 1)6*. &e debt is evidenced by a  promissory note executed by : werein e promised to pay as soon as e as money or as soon as possible. ! as made repeated demands upon : for   payment, but up to now no payment as been made. 9uppose tat ! will bring an action against : for payment of te debt, will te action prosper" •

Suggested Anser!

 'o, te action will not prosper. +n similar cases decided by te 9upreme !ourt -;on of  te !ivil !ode for te purpose of as8ing te court to fix te duration of te term or period. +t is only after te duration of te term or period as been fixed by te court tat any oter action involving te fulfilment or performance of te obligation can be maintained. &is as always been te consistent doctrine in tis urisdiction.

3. *ovation; +,%roision +,%roision (19#(19#- BAR) 2

A owed owed B a certain certain sum of money. money. ! wrote B a letter letter stating stating tat e would be te one to ta8e care of A?s debt as soon as A ad made a sipment of  logs to =apan. A never made made suc sipment. ! did not pay B. +s ! liable to B" @xplain. •

Suggested Anser!

! is not liable to B. +n te first place, in order tat ! may be eld liable to B, tere sould ave been a substitution of debtor troug expromision witin te meaning of Art. 12)1, 'o. 2, and Art. 12)( of te !ivil !ode resulting in novation of te obligation. obligation. 3ere, tere was none. ! merely wrote a letter to te creditor B stating tat e would ta8e care of A?s debt. &e problem does not even even say tat tat B gave gave is assent assent or consent consent to !?s statem statement ent.. +n te second second  place, even assuming tat tere was a substitution of debtor, !?s liability depends upon a suspensive condition, tat e would ta8e care of A?s debt as soon as A ad made a sipment of logs to =apan. A never made suc sipment. &erefore, !?s liability never became effective -illanueva vs. ;irged, 110 Pil. 5>*.

. *ovation; delega/ion (19#- BAR) BAR)

A borrowed borrowed from B te sum of P(, 000.00. &ree days after, A in a letter  autori) 9!#A (0).

1. ontra/ts; voidable voidable /ontra/ts /ontra/ts (19#9 BAR)

Ers. 9 borrowed P20,000 from P;, 9e and er 1)Hyear old son, Eari Eario, o, sign signed ed te te prom promis isso sory ry no note te for for te te loan loan,, wic wic  no note te did did no nott say say anytingH about te capacity of te signers. Ers. 9 made partial payments little  by little. After After seven -> years se died leaving a balance of P10,000.00 on te note. P; demanded demanded payment from Eario wo refused to pay. 4en sued for te amount, Eario raised te defense tat wen e signed te note e was still a minor. minor. 9ould te defense defense be sustained" 4y" 4y" •

Suggested Anser

&e defense sould be sustained. Eario cannot be bound by is signature in te promissory note. +t must be observed tat te promissory note does not say anyting about te capacity of te signers. signers. +n oter words, tere tere is no active fraud or misrepresentation/ tere is merely silence or constructive fraud or misrepresentation. +t would ave been different if te note says tat Eario is of age. &e principle of estoppel would ten apply. Eario would not be allowed to invo8e te defense of minority. &e promissory note would ten ave all of te effects of a perfectly valid note. 3ence, as far as Earios sare in te obligation is concerned, te promissory note is voidable because of  minority or nonHage. 3e cannot, cannot, owever, be absolved absolved entirely from monetary responsibility. responsibility. Gnder te !ivil !ode, even if is written contract is voidable  because of minority e sall ma8e restitution to te extent tat e may ave  been benefited by te money received by im -Art. 1()), !ivil !ode. -Bragan1, April 1(, 1)6).

11. $bligation ith a %eriod; /ourts fi,ing the %eriod (19 BAR)

E and ' were very good friends. ' borrowed P10, 000.00 from E. Because of teir close relationsip, te promissory note executed by ' provided tat e would pay te loan Cwenever is means means permit.D 9ubse%uently, 9ubse%uently, E and  ' %uarrelled. E now as8s you to collect te loan because e is in dire need of  money. 4at legal action, if any, would you ta8e in bealf of E"

•

Suggested Anser! 7

CED must bring an action against C'?? C'?? for te purpose of as8ing te court to fix te duration of te term or period for payment. According to te !ivil !ode, wen te debtor binds imself to pay wen is means permit im to do so, te obligation sall be deemed to be one wit a period, subect to te  provisions of Art. Art. 11)>. 11)>. +n oter words, it sall be subect to tose provisions of  te !ode wit respect to obligations wit a term or period wic must be  udiciary fixed. &us, in te instant case, te court sall determine suc period as may may und under er te circum circumsta stance ncess ave ave been been probab probably ly contem contempla plated ted by te  parties. Once determined or fixed, it becomes a part of te covenant of te two contracting parties. +t can no longer be canged by tem. +f te debtor defaults in te payment of te obligation after te expiration of te period fixed by te court, te creditor can ten bring an action against im for collection. Any action for collection brougt before tat would be premature. &is is wellH settled. -'ote &e above answer is based on Arts. 11*0 and 11)> of te !ivil !ode and on ;on5 Pil. 72/ Pages vs. Basilan, 105 Pil. **2, and oters. •

Alternative Anser!

 'ormally,  'ormally, before an action for collection may be maintained by CED against C',?? te former must fi rst bring an action against te latter as8ing te court to fi x te duration of te term or period of payment. 3owever, an action combining suc action wit tat of an action for collection may be allowed if it can be sown tat a separate action for collection would be a mere formality  because no additional proofs oter tan te admitted facts will be presented and would serve no purpose oter tan to delay. 3ere, tere is no legal obstacle to suc course of action. -'ot -'ote e & &ee abov abovee alte altern rnat ativ ivee answ answer er is base based d on Borr Borrom omeo eo vs. vs. !our !ourtt of  Appeals, 5> 9!#A 76. Probably, if we combine te two answers given above, te result would be a muc more impressive answer.

12. Relativity of /ontra/ts; e,/e%tion (19 BAR)

O, a very very po popu pula larr mo movi viee star star,, was was un unde derr cont contra ract ct wit wit P Eo Eovi viee Prod Produc ucti tion onss to star star excl exclus usiv ivel ely y in te te latt latter? er?ss film filmss for for two two year years. s. O was was  proibited by te contract to star in any fi lm produced by anoter producer. producer.  Jilm !o. induced O to brea8 er contract wit P Eovie Productions by giving er twice er salary. P Eovie Productions sued  Jilm !o. for damages.  Jilm !o. contended tat it ad a rigt to compete for te services of O and tat er  contract wit P Eovie Productions was in restraint of trade and a restriction on er freedom of contract. 4ose contention would you sustain" 8

•

Suggested Anser!

&e contention of P Eovie Productions sould be sustained. According to te !ivil !ode, any tird person wo induces anoter to violate is contract sall be liable for damages to te oter contracting party. party. +n te law of torts, we call tis Cinterference wit contractual relation.?? relation.?? 3owever, in order order tat it will  be actionable, it is necessary tat te following re%uisites must concur -a te existence of a valid contract/ -b 8nowledge on te part of te tird person of  te existence of suc contract/ and -c interference by te tird person witout legal ustification or excuse. All of tese re%uisites are present in te case at bar. &e cont &e conten enti tion on of  Jilm Jilm !o. !o. tat tat O?s O?s cont contra ract ct wit wit P Eo Eovi viee Productions was in restraint of trade and a restriction of er freedom to contract, on te oter and, cannot be sustained. 4ellHestablised is te rule tat in order  to determine weter or not an agreement of tis nature constitutes an undue restraint of trade, and terefore, is contrary to public policy, two tests are always applied. &ey are first, is tere a limitation as to time or place" And second, is te proibition or restraint reasonably necessary for te protection of  te te cont contra ract ctin ing g part partie ies" s" +f te te answ answer er to bo bot t of tes tesee %u %ues esti tion onss is in te te affirmative, affirmative, ten te proibition or restraint is not contrary to public policy. +t +t is crystal clear tat te agreement between O and P Eovie Productions passes  bot tests. -'ote &e first paragrap of te above answer is based on Art. 1(15 of te !ivil !ode and on :aywalt vs. Agustinos #ecoletos, () Pil. 6*>. &e second  paragrap, on te oter and, is based on Art. 1(07 of te !ivil !ode and on several cases, te most notable of wic is :el !astillo vs. #icmond, 57 Pil. 7)>.

13. ontra/ts; /onsent; /onsent; invitation invitation to bid (19 (19 BAR)

KLK M !o. publised publised in te newspaper newspaper an K+nvitati K+nvitation on &o BidK inviting proposals to supply labor and materials for a construction proect described in te invitation. invitation. KIK, KEK, and K'K submitted bids. 4en te bids bids were opened, it appeared tat KIK submitted te lowest bid. 3owever, KLK M !o. awarded te contract K'K, te igest bidder, on te ground tat e was te most experience experienced d and responsibl responsiblee bidder. bidder. KIK brougt brougt an action action against KLK M !o, to compel te award to im and to recover damages. +s KIsK position meritorious" meritorious"

•

Suggested Anser

9

KIsD position position is not meritorio meritorious. us. Accor According ding to te te !ivil !ivil !ode, advertisements for bidders are simply invitations to ma8e proposals, and te advertiser is not bound to accept te igest or lowest bidder, unless te contrary appears -Art. -Art. 1(27. +t is clear tat tat te general rule applies applies in te instant case. +n its advertisements, KLK M !o., for instance, did not state tat it will will award award te contra contract ct to te lowest lowest bidder bidder.. &eref &erefore ore,, in awarding awarding te contract to C'K, te defendant company acted in accordance wit its rigts.

1. Solidary liability (191 BAR) BAR)

O, lot lot owne owner, r, cont contra ract cted ed wit wit B, bu buil ilde der, r, to bu buil ild d a mu mult ltiH iHst stor orey ey  building designed by A, arcitect. arcitect. A was paid a fee to supervise te te construction and and exec execut utio ion n of is is desi design gn.. 4en 4en comp comple lete ted, d, O acce accept pted ed te te wor8 wor8 and and occupied te building, but witin one year, it collapsed in an eart%ua8e tat destroyed only te building and not te surrounding buildings. !onstruction was faulty. &e building cost P(,000,000.00, but reconstruction cost would reac P10,000,000.00. P10,000,000.00. -a 4at are te rigts of O against A and B" @xplain briefly. -b !ould CO?? demand reconstruction of te building" On wat ground" Amplify. Suggested Anser! (a) O can old A and B solidarily liable for damages. &is is clear from te !ivil !ode, wic declares tat te contractor is liable for damages if  witin fifteen years from te completion of te edifice or structure, te same sould collapse on account of defects in te construction. lf te engineer or arcitect wo drew up te plans and specifications of te  building supervises te construction, e sall be solidarily liable wit te contractor. Acceptance of te building, after completion, does not imply waiver of te cause of action. 3owever, te action must be brougt witin ten years following te collapse of te building. -'ote &e above answer is based on Art. Art. 1>2( of te !ivil !ode. (b) O can demand reconstruction of te building. &e obligation of bot A and B is an obligation to do. !onse%uently, Art. 117> 117> of te !ivil !ode is applicable. According to tis article, if a person obliged to do someting does it in contravention of te tenor of te obligation, te same sall be executed at is cost. +t is obvious tat te builder B and te arcitect A  performed teir obs in contravention of te tenor of te obligation. As a matter of fact, ad te building not collapsed, under te same article, it may even even be decr decree eed d tat tat wat wat as as been been po poor orly ly do done ne be un undo done ne.. !onse%uently, ! can now demand for te reconstruction of te building  by A and B or by anoter anoter at teir cost. -'ote &e above answer is based on Art. 117> of te !ivil !ode and on Eanresa, vol. *, pp. 117H11>. •

10

1. Fortuitous event; 4e%ositary or bailee; 5ender 5ender of %ayent (191 BAR)

9, an American resident of Eanila, about to leave on a vacation, sold is car to B for G9N2,000.00, te payment to be made ten days after delivery to , a tird party depositary agreed upon, wo sall deliver te car to B upon receipt of  of te purcase price. +t was stipulated tat ownersip is retained by 9 until delivery of te car to . Jive days after delivery of te car to , it was destroyed in a fire wic gutted te ouse of , witout te fault of eiter  or  B. (a) (b)

+s buyer B still legally obligated to pay te purcase price" @xplain. Eay seller 9 demand payment in G.9. dollars" 4y"

Suggested Anser! (a)  $es, buyer B is still legally obligated to pay te purcase price. +t must  be observed tat 9 ad already delivered te car to , te tird party depositary or bailee. +t was agreed tat ownersip is retained by 9 until delivery to . &erefore, tere was already a transfer of te rigt of  ownersip over te te car to B. !onse%uently, !onse%uently, B sall assume assume te fortuitous loss of te car. As As a matter of fact, even if it was agreed tat 9 sall retain te ownersip of te car until te purcase price as been paid by B, te end result will still be te same. 9ince, evidently, te purpose is to secure  performance by te buyer of is obligation to pay te purcase price, by express mandate of te law, te fortuitous loss of te car sall be assumed  by B. -'ote &e above answer is based on Art. Art. 1605 of te !ivil !ode. (b) &e seller C9?? cannot demand payment pay ment in G.9. dollars. According According to te law, an agreement tat payment sall be made in currency oter tan Pilippine currency is void because it is contrary to public policy. &at does not mean, owever, tat C9D cannot demand payment from CB.D 3e can demand demand payme payment, nt, but not in Am Ameri erican can dollar dollars. s. Oterw Oterwise ise,, tere tere woul would d be un unu ust st enri enric cme ment nt at te te expe expens nsee of anot anote err. Paym Paymen ent, t, terefore, sould be made in Pilippine currency. -'ote &e above answer is based on #.A. 'o. 62) and on Ponce vs. !ourt of Appeals, )0 9!#A 6((. •

19. o%ensation; o%ensatio n; %rin/i%al /reditor and debtor of ea/h other (191 BAR)

B borrowed from ! P1,000.00 payable in one year. 4en ! was in te  province, !?s 1>HyearHold son borrowed P600.00 from B for is scool tuition. 3owever, te son spent it instead nigtHclubbing. 4en 4en te debt to ! fell due, B tendered only P600.00, claiming compensation on te P600.00 borrowed by !?s son. (a)

+s tere legal compensation" 4y" 11

(b)

•

9uppose te minor son actually used te money for scool tuition, would te answer be different" #easons. Suggested Anser! (a)  &ere is no legal compensation. Gnder te !ivil !ode, in order tat tere will be a valid and effective compensation, it is essential tat ter teree mu must st be two two part partie ies, s, wo wo in tei teirr own own rig rigt, t, are are prin princi cipa pall creditors and principal debtors of eac oter. +n te instant case, ! cannot be considered as a party to te act of is 1>HyearHold son in  borrowing P600.00 from B. !onse%uently, !onse%uently, e did not become a  principal debtor of B/ neiter did B become a principal creditor of !. &erefore, tere can be no partial compensation of te P1,000.00  borrowed by B from from !. -'ote &e above answer is based on Arts. 12>* and 12>), 'o. 1, of  te !ivil !ode and on decided cases. (b) &ere &ere would be no differenc differencee in my answer. answer. &ere &ere will still be no legal compensation. &e fact tat !?s son actually used te P600.00 for is scool tuition did not ma8e ! a party to te contract between is son and B. &erefore, ! is not te principal debtor of B wit respect to said amount. a mount. -'ote &e above answer is based on Arts. 12>* and 12>), 1, !ivil !ode.

2. ontra/ts; fors fors of /ontra/ts (192 (192 BAR)

KAK and KBK entered into a verbal contract wereby KAK agreed to sell to KBK is only parcel of land for P20,000, and KBK agreed to buy at te aforemen aforementione tioned d price. price. KBK went went to te te ban8, ban8, witdrew witdrew te necessar necessary y amou amount nt,, and and retu return rned ed to KAK KAK for for te te cons consum umma mati tion on of te te cont contra ract ct.. KAK KAK owever, ad canged is mind and refused to go troug wit te sale. +s te agreement valid" 4ill an action by KBK against KAK for specific performance  prosper" #eason. •

Suggested Anser

+t must be observed tat tere are two %uestions in te case at bar. &ey &ey are -1 +s te agreement valid" &e answer is yes. +t is a timeHonored rule tat even a verbal agreement to sell land is valid so long as tere is already already an agreem agreement ent wit wit respe respect ct to te obec obectt and te purc purcase ase  price. -2 4ill 4ill an action action by KBK against KAK for specific performance performance prosper" prosper" &e answ answer er is no, no, unless unless it is is ratif ratified ied.. &e reas reason on is obvio obvious. us. & &ee agreement, being an agreement of sale of real property, is covered  by te 9tatute of Jrauds +t cannot, terefore, terefore, be enforced by a court 12

action action becau because se it is not eviden evidenced ced by any note note or memoran memorandum dum or  writing properly subscribed by te party carged. -'ote &e above answer is based on 'o. 2 of Art. Art. 120( of te !ivil !ode and on decided cases.

21. $bligations ith ith a %eriod; ourt fi,ing fi,ing the %eriod (192 BAR) BAR)

A !orporation, engaged in te sale of subdivision residential lots, sold to B a lot of 1,000 s%uare meters. &e contract provides tat te corporation sould put up an artesian well wit tan8, witin a reasonable time from te date tereof and sufficient for te needs of te buyers. Jive years tereafter, and no well and tan8 ave been put up by te corporation, corporation, B sued te corporation corporation for  specific performance. &e corporation set up a defense tat no period aving  been fixed, te court court sould fi x te period. :ecide wit wit reason. •

Suggested Anser!

&e action for specific performance sould be dismissed on te ground tat it is premature. +t is clear tat te instant case falls witin te purview of  obligations wit a term or period wic must be udicially fixed. &us, B instead of bringing an action for specific performance, sould bring an action as8ing te court to determine te period witin wic A !orporation sall put up te artesian well wit tan8. Once te court as fixed te period, ten suc  period as fixed by te court will become a part of te covenant between te contracting parties. +t can no longer be canged by tem. +f te !orporation does not put up te artesian well wit tan8 witin te period fixed by te court, CBD can ten bring an action for specific performance. •

Alternative Anser!

 'ormally,  'ormally, before an action for specific performance may be maintained  by B against A !orporation, te former must first bring an action against te latter as8ing te court to fix te duration of te term or period to install te artesian well wit tan8. 3owever, an action combining suc action wit tat of  an action for specific performance may be allowed if it can be sown tat a separate action for specific performance would be a mere formality because no additional proofs oter tan te admitted facts will be presented and would serve no purpose oter tan to delay. 3ere, tere is no obstacle to suc cause of  action. -'ote &e above answers are based on Art. 11)> of te !ivil !ode and on decided cases. @iter answer sould be considered correct.

13

22. A%%li/ation of %ayent (192 BAR)

&e debtor owes is creditor several debts, all of tem due, to wit -1 an unsecured debt/ -2 a debt secured wit a mortgage of te debtor?s property/ property/ -( a debt bearing interest/ -5 a debt in wic te debtor is solidarily liable wit anoter. Partial payment was made by te debtor. Assuming tat te debtor ad not specified te debts to wic te payment sould be applied and, on te oter  and, te creditor ad not specified in te receipt e issued te application of   payment, state te order in wic te payment sould be applied and your  reasons terefore. •

Suggested Anser!

+n tis case, according to te !ivil !ode, te debt, wic is most onerous to te debtor, among tose due, sall be deemed satisfied. Analy6 9!#A 2(5/ :ormitorio vs. Jernande< >2 9!#A (**. 3. ontra/ts; voidable voidable /ontra/ts /ontra/ts (199 BAR)

 was te owner of a 10,000 s%uare meter property.  married $ and out of teir union. A, B and ! were born. After te deat of $,  married  and tey  begot as cildren, :, @ and J. After te deat of , te cildren of te first first and second second marriage marriagess executed executed an extraudi extraudicial cial partition partition of te aforestated property on Eay 1, 1)>0. :, @ and J were given a one tousand s%uare meter portion of te property. &ey were minors at te time of te execution of te document. : was 1> years old, @ was 15and J was 12/ and tey were made to believe believe by A, B and ! tat unless tey sign te document tey will not get any sare.  was not present ten. +n =anuary 1)>5, :,@ and J filed an action in court to nullify te suit alleging tey discovered te fraud only in 1)>(. -a !an te minority of :, @ and J be a basis to nullify te partition" @xplain your answer.

19

-b 3ow about fraud" @xplain your answer. •

Suggested Anser

-a $es, minority can be a basis to nullify te partition because :, @ and J were not properly represented by teir parents or guardians at te time tey contracted te extraHudicial extraHudicial partition. -Articles 1(2> and 1()1, !ivil !ode. -b +n te case of fraud, wen troug +nsidious words or macinations of  one party te oter is induced to enter into te contract witout wic e would not ave agreed to, te action still prosper because under Art, 1()1 of te !ivil !ode, in case of fraud, te action for annulment may be  brougt witin four years from te discovery of te te fraud.

31. *ature of ontra/ts; $bligatoriness $bligatoriness (1991 (1991 BAR)

#oland, a bas8etball star, was under contract for one year to playHforHplay exclusively for Iady Iove, +nc. 3owever, even before te bas8etball season could open, e was offered a more attractive pay plus fringes benefits by 9weet &aste, &aste, +nc. #oland accepted te offer and transferred to 9weet &aste. &aste. Iady Iove sues #oland and 9weet &aste for breac of contract. :efendants claim tat te restriction to play for Iady Iove alone is void, ence, unenforceable, as it constitutes an undue interference wit te rigt of #oland any payment at all. Printado as also a standing contract to enter into contracts and te impairment of is freedom to play and enoy bas8etball. !an #oland be bound by te contract e entered into wit Iady Iove or can e disregard te same" +s e liable at all" 3ow about 9weet &aste" &aste" +s it liable to Iady Iove" •

Suggested Anser!

#oland is bound by te contract e entered into wit Iady Iove and e cannot disregard te same, under te principles of obligatoriness of contracts. Obligations arising from contracts ave te force of law between te parties. •

Suggested Anser!

$es, #oland is liable under te contract as far as Iady Iove is concerned. 3e is liable for damages under Article Article 11>0 of te !ivil !ode since e contravened te tenor of is obligation. 'ot being a contracting party, 9weet &aste is not  bound by te contract but it can be eld liable under Art. 1(15. &e basis of its liability is not prescribed by contract but is founded on %uasiHdelict, assuming tat 9weet &aste 8new of te contract. Article 1(15 of te !ivil !ode provides

20

tat any tird person wo induces anoter to violate is contract sall be liable for damages to te oter contracting party. party. •

Alternative Anser!

+t is assumed tat Iady Iove 8new of te contract. 'eiter #oland nor  9weet &aste would be liable, because te restriction in te contract is violative of Article 1(07 as being contrary to law morals, good customs, public order or   public policy. policy.

32. 8eriod; Sus%ensive 8eriod (1991 (1991 BAR)

+n a deed of sale of a realty, it was stipulated tat te buyer would construct a commercial building on te lot wile te seller would construct a  private passageway bordering te lot.&e building was eventually finised but te seller failed to complete te passageway as some of te s%uatters, wo were already 8nown to be tere at te time tey entered into te contract, refused to vacate te premises. +n fact, prior to its execution, te seller filed eectment case casess agai agains nstt te te s%ua s%uatt tter ers. s. & &ee bu buye yerr no now w sues sues te te sell seller er for for spec specif ific ic  performance wit damages. &e defense is tat te obligation to construct te  passageway sould be wit a period wic, incidentally, ad not been fixed by tem, ence, te need for fixing a udicial period. 4ill te action for specific  performance of te buyer against te te seller prosper" prosper" •

Suggested Anser!

 'o, te action for specific specific performance performance filed by te buyer is premature under  under  Art. Art. 11)> of te te !ivi !ivill !ode !ode.. +f a peri period od as as no nott been been fixe fixed d alt altou oug g contem contempla plated ted by te partie parties, s, te parti parties es tems temselv elves es so sould uld fix fix tat tat perio period, d, failing in wic, te !ourt maybe as8ed to fix it ta8ing into consideration te  probable contemplation of te parties. Before te period is fixed, an action for  specific performance is premature. •

Alternative Ansers!

1. +t as been eld in Borromeo Borromeo vs. !A -5> -5> 9!#A 7), tat te 9upreme 9upreme !ourt !ourt allowe allowed d te simult simultane aneous ous filing filing of action action to fix fix te probab probable le contemplated period of te parties were none is fixed in te agreement if  tis would avoid multiplicity of suits. +n addition, tecnicalities must be subordinated to substantial ustice. 2. &e action for specific specific performance will will not prosper. prosper. &e filing filing of te eec eectm tmen entt suit suit by te te sell seller er was was prec precis isel ely y in comp compli lian ance ce wit wit is is obligations and sould not, terefore, be faulted if no decision as yet  been reaced by te te !ourt on te matter. matter. 21

33. +,tinguishent; +,tinguishent; 6oss; %ossible %ossible Servi/e (1993 (1993 BAR)

+n 1) 1)>1 >1,, Able ble !ons !onstr truc ucti tion on,, +nc. +nc. ente entere red d into into a cont contra ract ct as as been been exti exting ngui uis sed ed by te te no nova vati tion on or exti extinc ncti tion on of te te wit wit &rop opica icall 3ome 3ome :evelopers, +nc. wereby te former would build for te latter te ouses witin its subdivision. &e cost of eac ouse, labor and materials included, was P100,000.00. Jour undred units were to be constructed witin five years. +n 1)>(, Able found tat it could no longer continue wit te ob due to te increase in te price of oil and its derivatives and te concomitant worldwide spiraling of prices of all commodities, including basic raw materials re%uired for for te te cons constr truc ucti tion on of te te o ous uses es.. & &ee cost cost of deve develo lopm pmen entt ad ad rise risen n to unanticipated levels and to suc a degree tat te conditions and factors wic formed te original basis of te contract ad been totally canged. Able Able brougt suit against &ropical 3omes praying tat te !ourt relieve it of its obligation. +s Able !onstruction entitled to te relief sougt" •

Suggested Anser!

$es, te Able !onstruction. +nc. is entitled to te relief sougt under Article 127>, !ivil !ode. &e law provides K4en te service as become so difficult as to be manifestly beyond te contemplation of te parties, te obligor may also be released terefrom, in wole or in part.K

3. ontra/ts; annulent annulent of /ontra/ts; /ontra/ts; /a%a/ity to sue (1990 BAR) BAR)

9ometime in 1)66, &omas donated a parcel of land to is stepdaugter  +rene, subect to te condition tat se may not sell, transfer or cede te same for twenty years. 9ortly tereafter, e died. +n 1)76, because se needed money for medical expenses, 'ene sold te land to !onrado. &e following year, +rene died, leaving as er sole eir a son by te name of Armando. 4en Armando learned tat te land wic e expected to inerit ad been sold  by +rene to !onrado. e filed an action against te latter for annulment of  te sale, on te ground tat it violated te restriction imposed by &o &omas. mas. !onrado filed a motion to dismiss, on te ground tat Armando Armando did not ave te legal capacity to sue. +f you were te =udge, ow will you rule on tis motion to dismiss" @xplain. •

Suggested Anser!

22

As a udg udge, e, + will will grant grant te motio otion n to dism dismiss. iss. Arm rman ando do as no  personality to bring te action for annulment of te sale to !onrado. Only an aggrieved party to te contract may bring te action for annulment tereof -Art. 1()>,'!!. 4ile Armando is eir and successorHinHinterest of is moter -Art. 1(11, '!!, e standing in place of is moter as no  personality to annul te contract. Bot are not aggrieved parties on account of teir own violation of te condition of, or restriction on, teir  ownersip +mposed by te donation. Only te donor or is eirs would ave te  personality to bring an action to revo8e a donation for violation of a condition tereof or a restriction tereon. -;arrido u. !A, 2(7 9!#A 560. !onse%uently, wile te donor or is eirs were not parties to te sale, tey ave te rigt to annul te contract of sale because teir rigts are  preudiced by one of te contracting parties tereof :BP v. !A, )7 9!#A (52/ &eves vs. P33!. 2( 9!#A 1151.. 1151.. 9ince Armando is neiter te donor nor eir of te donor, e as no personality to bring te action for  annulment. •

Alternative Anser!

As a udg udge, e, + will will gran grantt te te mo moti tion on to dism dismis iss. s. !omp !ompli lian ance ce wit wit a condit condition ion impose imposed d by a don donor or gives gives rise rise to an action action to revo8e revo8e te donation donation under under Art. Art. >75, '!!. 3owever 3owever,, te te rigt rigt of of action action belongs belongs to te donor. +s transmissible to is eirs, and may be exercised against te donee?s eirs. 9ince Armando is an eir of te donee, not of te donor, e as no legal capacity capacity to sue for revocatio revocation n of te donation. donation. Altoug Altoug  e is not see8ing see8ing suc revocation but an annulment of te sale wic is moter, te donee, ad executed in violation of te condition imposed by te donor, an action for  annulment of a contract may may be brougt only only by tose wo are principally or  subsidiaril subsidiarily y obliged obliged tereby tereby -Art. -Art. 1()>, 1()>, '!!. '!!. As an exception exception to te rule, it as been eld tat a person not so obliged may neverteless as8  for annulmen annulmentt if e is preudic preudiced ed in is rigts rigts regardin regarding g one of te contracting parties -:BP us. !A. )7 9!#A (52 and oter cases and can sow te detriment wic would result to im from te contract in wic e ad no intervention, -&eves vs. P33!, 2( 9!#A 1151. 9uc detriment or preudice cannot be sown by Armando. As a forced eir, Armandos interest +n te property was, at best, a mere expectancy. &e sale of te land by is moter did not impair any vested rigt. &e fact remains tat te premature sale made by is moter -premature because only alf of te period of te ban ad elapsed was not voidable at all, none of te vices of consent under Art. 1() of te '!! being present. 3ence, te motion to dismiss sould be granted.

23

3-. *ature of ontra/ts; 8rivity of ontra/t (1990 BAR)

Baldomero leased is ouse wit a telepone to =ose. &e lease contract  provided tat =ose sall pay for all electricity, electricity, water and telepone services in te leased premises during te period of te lease. 9ix monts later. =ose surreptitiously vacated te premises. 3e left beind unpaid telepone bills for  overseas telepone calls amounting to over P20,000.00. Baldomero refused to  pay te said bills on te ground tat =ose ad already substituted im as te custom customer er of te telep telepone one compan company. y. & &ee latter latter maint maintain ained ed tat tat Baldom Baldomero ero rema remain ined ed as is is cust custom omer er as far far as tei teirr serv servic icee cont contra ract ct was was conc concer erne ned, d, notwit notwitst stand anding ing te lease lease contra contract ct betwee between n Baldom Baldomero ero and =os =ose. e. 4o 4o is correct, Baldomero or te telepone company" @xplain. •

Suggested Anser!

&e telepone company is correct because as far as it is concerned, te only person it contracted wit was Baldomero. &e telepone company as no contract wit =ose. Baldomero cannot substitute =ose in is stead witout te consent of te telepone company -Art. 12)(, '!!. Baldomero is, terefore, liable under te contract.

30. Res/ission of ontra/ts; 8ro%er 8ro%er 8arty (1990 BAR)

+n :ecemb :ecember er 1)* 1)*6, 6, 9alvad 9alvador or and te 9tar 9tar 9emico 9emicondu nducto ctorr !ompan !ompany y -99! executed a :eed of !onditional 9ale werein te former agreed to sell is 2,000 s%uare meter lot in !ainta, #i. Gnder Art. 11*2, =uans promise to Earia is void because a conditional obligation depends upon te sole will of te obligor.

25

As regards Perla, te document is an express ac8nowledgment of a debt, and te promise to pay wat e owes er wen e feels li8e it is e%uivalent to a  promise to pay wen is means permits im to do so, and is deemed to be one wit an indefinite period under Art. 11*0. 3ence te amount is recoverable after  Perla as8s te court to set te period as provided by Art. 11)>, par. 2.

3. onsensual vs. Real Real ontra/ts; :inds :inds of Real ontra/ts ontra/ts (199 BAR) BAR)

:istinguis consensual from real contracts and name at least four -5 8inds of real contracts under te present law. •

Suggested Anser!

!onsensual contracts are tose wic are perfected by mere consent -Art. 1(16. !ivil !ode. #eal contracts are tose tose wic are perfected perfected by te delivery delivery of te te ob obe ect ct of te te ob obli liga gati tion on.. -Art -Art.. 1( 1(17 17,, !ivi !ivill !ode !ode @x @xam ampl ples es of real real contracts are deposit, pledge, commodatum and simple loan -mutuum.

39. +,tinguishent; +,tinguish ent; o%ensation vs. 8ayent (199 BAR)

:efine :efine compen compensat sation ion as a mo mode de of exting extinguis uisin ing g an obliga obligatio tion, n, and distinguis it from payment. 2S •

Suggested Anser!

!ompensation is a mode of extinguising to te concurrent amount, te obligations of tose persons wo in teir own rigt are reciprocally debtors and creditors of eac oter -&olentino, 1))1 ed., p. (76, citing 2 !astan 670 and Jrancia vs. +A!. 172 9!#A >6(. >6(. +t involves te simultaneous balancing of two obligations in order to extinguis tem to te extent in wic te amount of one is covered by tat of te oter. -:e Ieon, 1))2 ed., p. 221, citing * Eanresa 501. Payment means not only delivery of money but also performance of an obligation -Article 12(2, !ivil !ode. +n payment, capacity to dispose of te ting paid and capacity to receive payment are re%uired for debtor and creditor  #espectively, in compensation, suc capacity is not necessary, because te compensation operates by law and not by te act of te parties. +n payment, te performance must be complete/ wile in compensation tere may be partial extinguisment of an obligation -&olentino, supra.

. +,tinguishent; +,tinguish ent; o%ensationSet, =une *, 2000. 9uplico cannot be eld liable for damages, for breac of contract, as it was not e wo violated te order agreement, but Printado. 9uplico cannot be eld liable for Printado?s breac of contract wit Publico. 3e is not a party to te agreement entered into by and between Printado and Publico. &eirs is not a stipul stipulati ation on pou pourr atrui. atrui. Afore Aforesai said d 9uc 9uc contra contracts cts do could could not affe affect ct tird tird  persons li8e 9uplico because of te basic civil law principle of relativity of  contracts wic provides tat contracts can only bind te parties wo entered into it, and it cannot favor or preudice a tird person, even if e is aware of  suc contract and as acted wit 8nowledge tereof. -+ntegrated Pac8aging !orporation v. !A, supra.

#. $bligations; $bligations; >oint solidary solidary liability; solidary (23 BAR) BAR) 31

A,B,!,:, and @ made temselves temselves solidarity indebted indebted to  for te amount of P60,000.00. 4en  demanded payment from A, te latter refused to  pay on te following grounds. -a B is only only 17 years old. -b ! as already been condoned by  -c : is insolvent. -d @ was given by  an extension extension of 7 monts witout witout te consent consent of  te oter four coHdebtors. 9tate te effect of eac of te above defenses put up by A on is obligation to pay , if suc defenses are found to be true. •

Suggested Anser!

-a A may avail te minority minority of B as a defense, but only for B?s B?s sare of  P 10, 000.00. A solidary debtor may avail imself of any defense wic personally belongs to a solidary solidary coHdebtor, coHdebtor, but only as to te sare sare of tat coHdebtor. -b A may avail of te condonation by  of !?s sare of P 10, 000.00. A solidary debtor may, in actions ac tions filed fil ed by te t e creditor, credit or, avail imsel imselff of all defens defenses es wic wic are derive derived d from from te nature nature of te obligation and of tose wic are personal to im or pertain to is own sare. 4it 4it respect to tose wic personally personally belong to oters, e may avail imself tereof only as regards tat part of te debt for  wic te latter are responsible. -Article 1222, '!!. -c A may not interpose te defense of insolvency of : as a defens defense. e. Applyin pplying g te princ principl iplee of mu mutua tuall guaran guaranty ty among among solida solidary ry debtors, A guaranteed te payment of :?s sare and of all te oter  coHdebtors. 3ence, A cannot avail of te defense of :?s insolvency. -d &e extension extension of six -7 monts monts given given by  to @ may be availed of   by A as a partial defense but only for te sare of @. tere is no novation of te obligation but only an act of liberality granted to @ alone.

. 6iability; Solidary Solidary $bligation; $bligation; ?utual @uaranty @uaranty (23 BAR)

A,B,!,:, and @ made temselves solidarity indebted to  for te amount of P60,000.00. 4en  demanded payment from A, te latter refused to pay on te following grounds. a B is only 17 years old. b ! as already been condoned by  c : is insolvent. d @ was given by  an extension of 7 monts witout te consent of te oter four coHdebtors. 9tate te effect of eac of te 32

above defenses put up by A on is obligation to pay , if suc defenses are found to be true. •

Suggested Ansers!

-a A may avail te minority of B as a defense, but only for B?s sare of P 10,000.00. A solidary debtor may avail imself of any defense wic  personally belongs to a solidary coHdebtor, coHdebtor, but but only as to te sare of tat coHdebtor. -b A may avail of te condonation by  of !?s sare of P 10, 000.00. A solidary debtor may, in actions filed by te creditor, avail imself of all defenses wic are derived from te nature of te obligation and of tose wic are personal to im or pertain to is own sare. 4it respect to tose wic personally belong to oters, e may avail imself tereof  only as regards tat part of te debt for wic te latter are responsible. -Article 1222, '!!. -c A may not interpose te defense of insolvency of : as a defense. Applying te principle of mutual guaranty among solidary debtors, A guaranteed te payment of :?s sare and of all te oter coHdebtors. 3ence, A cannot avail of te defense of :?s insolvency. -d &e extension of six -7 monts given by  to @ may be availed of by A as a partial defense but only for te sare of @, tere is no novation of  te obligation but only an act of liberality granted to @ alone.

9. onditional $bligations (23 BAR)

Are te following obligations valid, wy, and if tey are valid, wen is te obligation demandable in eac case" a +f te debtor promises to pay as soon as e as te means to pay/ b +f te debtor promises to pay wen e li8es/ c +f te debtor promises to pay wen e becomes a lawyer/ d +f te debtor   promises to pay if is son, wo is sic8 wit wit cancer, does not die witin witin one year. year. •

(a)

(b)

Suggested Anser! &e obligation is valid. +t is an obligation subect to an indefinite period  because te debtor binds imself to pay wen is means permit im to do so -Article 11*0, '!!. 4en te creditor 8nows tat te debtor  already as te means to pay, e must file an action in court to fix te  period, and wen te definite period as set by te court arrives, te obligation to pay becomes becomes demandable )Article )Article 11)>, 11)>, '!!. &e obligation Cto pay wen e li8esD is a suspensive condition te fulfilment of wic is subect to te sole will of te debtor and, terefore te conditional obligation is void. -Article 11*2, '!!.

33

(c)

(d)

&e obligation is valid. +t is subect to a suspensive condition, i.e. te future and uncertain event of is becoming a lawyer. &e performance of  tis obligation does not depend solely on te will of te debtor but also on oter factors outside te debtor?s control. &e obligation is valid. &e deat of te son of cancer witin one year is made a negative suspensive condition to is ma8ing te payment. &e obligation is demandable if te son does not die witin one year -Article 11*6, '!!.

-. ne,istent ontra/ts ontra/ts vs. Annullable Annullable ontra/ts ontra/ts (2 BAR)

:istinguis briefly but clearly between +nexistent contracts and annullable contracts. •

Suggested Anser!

+nexistent contracts are considered as not aving been entered into and, terefore, void ab initio. &ey do not create any obligation and cannot be ratified or validated, as tere is no agreement to ratify or validate. On te oter  and, annullable or voidable contracts are valid until invalidated by te court  but may be ratified. +n inexistent contracts, one or more re%uisites of a valid contract are absent. +n annullable contracts, all te elements of a contract are  present except tat te consent of one of te contracting parties was vitiated or  one of tem as no capacity to give consent.

34

Referen/es!

+cao, = M +cao, A. -2006.  Answers to Bar Examination Questions in Civil Law :umaguete ete,, 'egros 'egros Orien Oriental tal 9ilim 9iliman an  Arranged Topic Topic (1975!""#$ . :umagu Gnive niverrsit sity !olle olleg ge of Iaw Iaw. #et #etrie rieved ved Jebru ebruaary 7, 20 2016 16 from ttpsQQwww.scribd.comQdocQ1*6)72675Q!ivilHIawHUHAH1)>6HtoH2005 +cao, = M +cao, A. -2006.  Answers to Bar Examination Questions in Civil Law :umaguete ete,, 'egros 'egros Orien Oriental tal 9ilima 9iliman n  Arranged Topic Topic (199"!""%$& :umagu Gnive niverrsit sity !olle olleg ge of Iaw Iaw. #et #etrie rieved ved Jebru ebruaary 7, 20 2016 16 from ttpsQQupangpinmalaw ttpsQQupangpinmalaw.files.w .files.wordpress.comQ201 ordpress.comQ2011Q0(QsuggestedHa 1Q0(QsuggestedHanswersH nswersH inHcivilHlawHbarHexam inHcivilHlawHbarHexams1))0H2007.pdf  s1))0H2007.pdf  =urado, :. -2010. Comments and 'urisprudence on )ligations and Contracts -12t ed.. Eetro Eanila #ex Publising.

35