Suggested answers to the Obligations and Contracts items in the 2015 Civil Law Bar Exam

Disclaimer: These answers may not necessarily be correct. All articles refer to the Civil Code. Comments
and suggestions are welcome.

Credits also to my block mates, Carlo Borromeo, Jerome Valencia, and Andrea Alegre, who answered
this exam with me as part of reviewing for our Obligations and Contracts (Oblicon) final exam.

The 2015 Civil Law Bar Exam may be viewed here.

X. NO, I do not agree. One, the clothing materials are indeterminate things, absent any stipulation that
the dresses would be made only using the materials Karla provided. Article 1263 applies.

Two, X is already in delay. “On the day X was supposed to deliver Karla’s dresses, X called up Karla to say
that she had an urgent matter to attend to and will deliver them the next day.” Assuming there is a
demand, Article 1165, paragraph 3 applies “If the obligor delays, or has promised to deliver the same
thing to two or more persons who do not have the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery.”

XI. The contract was voidable, under Article 1390(1), “Those where one of the parties is incapable of
giving consent to a contract.” Jackie can no longer recover the property. One, the action has prescribed.
Article 1391 states, “The action for annulment shall be brought within four years. This period shall begin:
xxx And when the action refers to contracts entered into by minors or other incapacitated persons, from
the time the guardianship ceases.” Jackie wanted to annul the sale only when she was already 25 years
old, beyond the four-year period when the guardianship ceases (from 18 years of age under RA 6809 to
when she was 22 years of age).

XII.

A – No, Iya may not. Article 1220 applies, “The remission of the whole obligation, obtained by one of the
solidary debtors, does not entitle him to reimbursement from his co-debtors.”

B – No, Cita cannot. Solidarity is never presumed, according to Article 1207. In the absence of
stipulation, the obligation in this case is joint.
XIII.

A – Yes, Kyla can. The obligation in this case is a reciprocal obligation. Once the shop accepted Kyla’s
payment, it is already in delay. Article 1169, 3rd par. provides, “In reciprocal obligations, neither party
incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other
begins.” X’s death cannot release the shop from liability. Article 1165, 3rd par. states “If the obligor
delays, or has promised to deliver the same thing to two or more persons who do not have the same
interest, he shall be responsible for any fortuitous event until he has effected the delivery. “

B – not Oblicon question

XIV.

A – No, it will not. Damages were already awarded in the criminal action. Article 2177 provides, “But the
plaintiff cannot recover damages twice for the same act or omission of the defendant.” Had the civil
action been reserved, the case of Barredo v. Garcia would have applied.

B – Yes, the employer’s liability is solidary as provided for in Article 103 of the Revised Penal Code. Civil
damages may be satisfied by first showing the driver is insolvent and the writ of execution is unsatisfied
before the employer can be held liable.

XV.

A – No, the payment of interest by Sara is not a natural obligation. Sara had no such obligation. Julia will
only be entitled to interest if Sara is in delay, which is from the time Sara does not comply with the
demand for payment (Cetus v. CA). Article 1169, 1st paragraph states: “Those obliged to deliver or to do
something incur in delay from the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation.” Here, Sara paid her debt immediately upon demand.

B – Article 1423

XVI.
A – No, the agreement is not valid. First, it is a pactum commisorium agreement which is prohibited
under Article 2088, “The creditor cannot appropriate the things given by way of pledge or mortgage, or
dispose of them. Any stipulation to the contrary is null and void.” (one of the special disqualifications).

(Additional, akin lang ito) Thus, Jane did not own the jewelry, and thus, the agreement is void for
absence of the essential requisite of object (Article 1409).

B – My answer:

One side – Yes. Donna not in pari delicto. “She was made to sign an agreement that if she cannot pay
her debt within six months, Jane could immediately appropriate the jewelry for herself.” Only Jane was
at fault.

Other – No, Donna in pari delicto. Ignorance of the law excuses no one (Article 3). She should have
known of Article 2088.

Carlo – NO. Under Article 1385, “Neither shall rescission take place when the things which are the object
of the contract are legally in the possession of third persons who did not act in bad faith.”

My concern – this applies to rescissible, not void contracts

XVII. No, the deed of sale is void for illegal consideration (1409(1)), since bac

# XV

A, B, and C entered into a partnership tooperate a restaurant business. When the restauranthad gone
past break-even stage and started to garner considerable profits, C died. A and B continued thebusiness
without dissolving the partnership. They infact opened a branch of the restaurant, incurringobligations
in the process. Creditors starteddemanding for the payment of their obligations.A. Who are liable for
the settlement of thepartnership’s obligations? Explain? (3%)B. What are the creditors’ recourse/s?
Explain. (3%)

# XVI
X was the owner of an unregistered parcel of land in Cabanatuan City. As she was abroad, sheadvised
her sister Y via overseas call to sell the landand sign a contract of sale on her behalf. Y thus soldthe land
to B1 on March 31, 2001 and executed adeed of absolute sale on behalf of X. B1 fully paid thepurchase
price. B2, unaware of the sale of the land toB1, signified to Y his interest to buy it but asked Y for her
authority from X. Without informing X that she hadsold the land to B1, Y sought X for a written
authorityto sell. X e-mailed Y an authority to sell the land. Ythereafter sold the land on May 1, 2001 to
B2 onmonthly installment basis for two years, the firstinstallment to be paid at the end of May
2001.Who between B1 and B2 has a better right over theland? Explain. (5%)

2009 Bar Questions:# I

TRUE or FALSE. Answer TRUE if the statement istrue, or FALSE if the statement is false. Explain your
answer in not more than two (2) sentences. (5%)[a] A clause in an arbitration contract granting one of
the parties the power to choose more arbitrators thanthe other renders the arbitration contract void.[d]
The renunciation by a co-owner of his undividedshare in the co-owned property in lieu of
theperformance of his obligation to contribute to taxes andexpenses for the preservation of the
propertyconstitutes dacion en pago.

# XV

Sarah had a deposit in a savings account withFilipino Universal Bank in the amount of five millionpesos
(P5,000,000.00). To buy a new car, sheobtained a loan from the same bank in the amount of
P1,200,000.00, payable in twelve monthly installments.Sarah issued in favor of the bank post-dated
checks,each in the amount of P100,000.00, to cover thetwelve monthly installment payments. On the
third,fourth and fifth months, the corresponding checksbounced. The bank then declared the whole
obligationdue, and proceeded to deduct the amount of onemillion pesos (P1,000,000.00) from Sarah’s
depositafter notice to her that this is a form of compensationallowed by law. Is the bank correct?
Explain. (4%)

# XVII

Rosario obtained a loan of P100,000.00 fromJennifer, and pledged her diamond ring. The contractsigned
by the parties stipulated that if Rosario isunable to redeem the ring on due date, she willexecute a
document in favor of Jennifer providing thatthe ring shall automatically be considered full paymentof
the loan.[a] Is the contract valid? Explain. (3%)[b] Will your answer to [a] be the same if the
contractstipulates that upon failure of Rosario to redeem thering on due date, Jennifer may immediately
sell thering and appropriate the entire proceeds thereof for herself as full payment of the loan?
Reasons. (3%)

2008 Bar Questions:# VIII

Adam, a building contractor, was engaged byBlas to construct a house on a lot which he (Blas)owns.
While digging on the lot in order to lay down thefoundation of the house, Adam hit a very hard object.
Itturned out to be the vault of the old Banco de las IslasFilipinas. Using a detonation device, Adam was
able toopen the vault containing old notes and coins whichwere in circulation during the Spanish era.
While thenotes and coins are no longer legal tender, they werevalued at P 100 million because of their
historical valueand the coins’ silver and nickel content. The followingfiled legal claims over the notes and
coins:i) Adam, as finder;ii) Blas, as owner of the property where theywere found;iii) Bank of the
Philippine Islands, assuccessor-in-interest of the owner of the vault; andiv) The Philippine Government
because of their historical value.# XVEduardo was granted a loan by XYZ Bank for the purpose of
improving a building which XYZ leasedfrom him. Eduardo executed the promissory note(“PN”) in favor
of the bank, with his friend Recardo ascosignatory. In the PN, they both acknowledged thatthey are
“individually and collectively” liable and

waived the need for prior demand. To secure the PN,Recardo executed a real estate mortgage on his
ownproperty. When Eduardo defaulted on the PN, XYZstopped payment of rentals on the building on
theground that legal compensation had set in. Since therewas still a balance due on the PN after
applying therentals, XYZ foreclosed the real estate mortgage over Recardo’s property. Recardo opposed
the foreclosureon the ground that he is only a co-signatory; that nodemand was made upon him for
payment, andassuming he is liable, his liability should not go beyondhalf the balance of the loan.
Further, Recardo said thatwhen the bank invoked compensation between therentals and the amount of
the loan, it amounted to anew contract or novation, and had the effect of extinguishing the security
since he did not give hisconsent (as owner of the property under the real estatemortgage) thereto. a)
Can XYZ Bank validly asserts legal compensation?(2%)b) Can Recardo’s property be foreclosed to pay the
fullbalance of the loan? (2%)c) Does Recardo have basis under the Civil Code for claiming that the
original contract was novated? (2%)

# XVI

Dux leased his house to Iris for a period of 2years, at the rate of P25,000.00 monthly, payableannually in
advance. The contract stipulated that itmay be renewed for another 2-year period uponmutual
agreement of the parties. The contract alsogranted Iris the right of first refusal to purchase theproperty
at any time during the lease, if Dux decides tosell the property at the same price that the property
isoffered for sale to a third party. Twenty-three monthsafter execution of the lease contract, Dux sold
thehouse to his mother for P2 million. Iris claimed that thesale was a breach of her right of first refusal.
Dux saidthere was no breach because the property was sold tohis mother who is not a third party. Iris
filed an actionto rescind the sale and to compel Dux to sell theproperty to her at the same price.
Alternatively, sheasked the court to extend the lease for another 2 yearson the same terms.a) Can Iris
seek rescission of the sale of the propertyto Dux’s mother? (3%)b) Will the alternative prayer for
extension of the leaseprosper? (2%)

# XVII

Felipe borrowed $100 from Gustavo in 1998,when the Phil P - US$ exchange rate was P56 –US$1. On
March 1, 2008, Felipe tendered to Gustavoa cashier’s check in the amount of P4,135 in paymentof his
US$ 100 debt, based on the Phil P – US$exchange rate at that time. Gustavo accepted thecheck, but
forgot to deposit it until Sept. 12, 2008. Hisbank refused to accept the check because it hadbecome
stale. Gustavo now wants Felipe to pay him incash the amount of P5,600. Claiming that the
previouspayment was not in legal tender and that there hasbeen extraordinary deflation since 1998, and
therefore,Felipe should pay him the value of the debt at the timeit was incurred. Felipe refused to pay
him again,claiming that Gustavo is estopped from raising theissue of legal tender, having accepted the
check inMarch, and that it was Gustavo’s negligence in notdepositing the check immediately that caused
thecheck to become stale.a) Can Gustavo now raise the issue that the cashier’scheck is not legal tender?
(2%)b) Can Felipe validly refuse to pay Gustavo again?(2%)c) Can Felipe compel Gustavo to receive
US$100instead? (1%)

# XVIII

AB Corp. entered into a contract with XYCorp. whereby the former agreed to construct theresearch and
laboratory facilities of the latter. Under the terms of the contract, AB Corp. agreed to completethe
facility in 18 months, at the total contract price of P10 million. XY Corp. paid 50% of the total
contractprice, the balance to be paid upon completion of thework. The work started immediately, but
AB Corp. later experienced work slippage because of labor unrest inhis company. AB Corp.’s employees
claimed that theyare not being paid on time; hence, the work slowdown.As of the 17th month, work
was only 45% completed.AB Corp. asked for extension of time, claiming that itslabor problems is a case
of fortuitous event, but thiswas denied by XY Corp. When it became certain thatthe construction could
not be finished on time, XYCorp. sent written notice canceling the contract, andrequiring AB Corp. to
immediately vacate thepremises.a) Can the labor unrest be considered a fortuitousevent? (1%)b) Can XY
Corp. unilaterally and immediately cancelsthe contract? (2%)c) Must AB Corp. returns the 50%
downpayment?(2%