2013 (Civil Law) Bar Exam Questions: Essay Question 3

[Discuss/answer the question below. Or see Civil Law Instructions; Civil Law Instructions; Civil Law Essay Questions: 1, 24, 5, 6, 7, 8, 9 and 10; Civil Law Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]

III.

Sergio is the registered owner of a 500-square meter land. His friend, Marcelo, who has long been interested in the property, succeeded in persuading Sergio to sell it to him. On June 2, 2012, they agreed on the purchase price of P600,000 and that Sergio would give Marcelo up to June 30, 2012 within which to raise the amount. Marcelo, in a light tone usual between them, said that they should seal their agreement through a case of Jack Daniels Black and P5,000 “pulutan” money which he immediately handed to Sergio and which the latter accepted. The friends then sat down and drank the first bottle from the case of bourbon.

On June 15, 2013, Sergio learned of another buyer, Roberto, who was offering P800,000 in ready cash for the land. When Roberto confirmed that he could pay in cash as soon as Sergio could get the documentation ready, Sergio decided to withdraw his offer to Marcelo, hoping to just explain matters to his friend. Marcelo, however, objected when the withdrawal was communicated to him, taking the position that they have a firm and binding agreement that Sergio cannot simply walk away from because he has an option to buy that is duly supported by a duly accepted valuable consideration.

(A) Does Marcelo have a cause of action against Sergio? (5%)

(B) Can Sergio claim that whatever they might have agreed upon cannot be enforced because any agreement relating to the sale of real property must be supported by evidence in writing and they never reduced their agreement to writing? (3%)

17 comments

    1. On my part i did not discuss anything on earnest or option money. For me the mere fact that there was a subject matter, the consent of the parties, price or consideration which need not be paid immediately as long as there was an agreement on its terms resulted in a valid contract of sale. I just took a hint on my answer in Letter A from the question in letter B which states that both parties already had an agreement and that question B is just asking about it enforceability, which for me can be enforced since SOF need not apply since sa sagot ko nga in A is that the contract of sale is executed already or at the very least partially executed. Medyo madami nga attacks on this question and I am not sure about my own attack.

      1. I did the same anon. I figured that since marcelo’s offer to buy the property was accepted by sergio there was already a perfected contract. Consent,consideration and object is already present thus there is a cause of action. as for B the statute of frauds wouldn’t apply because there was already a perfected contract, since it is only applicable in “executory contracts”.

      2. hi, im havent taken the bar exam yet but i tried to answer the 2013 bar exams on civil law as if im actually taking the bar exams observing the 4-hour allotted time.

        My answer to question No. 3 is Option contract. Marcelo has a cause of action against sergion on the ground that an option contract has been perfected between them. An option contract is independent from the contract of sale. Hence, a breach thereof would give rise to a cause of action against the offeror.

        The option contract need not be in writing to be enforceable because it is not one of the unenforceable contracts enumerated under the civil code.

  1. I think this involves an interpretation on whether the “pulutan” money is earnest money. If it is earnest money, Art. 1482, NCC says it shall be considered as part of the price and as proof of the perfection of the contract. This would thus bind the vendor into honoring the contract as the Statute of Frauds would not apply, the contract having been already executed. Another way of seeing this is that Art 1405 may apply and the acceptance of the “pulutan” is an acceptance of the benefits therein and hence, the contract has been ratified. Yet another view is that the
    “pulutan” money is an option money. Or maybe an examinee may argue that the parties should have followed Art 1403(2) on SOF, sale of real property must be in writing.

    There are just so many ways to attack this.

  2. sa totoo lng, it took me a while para ma pin point gusto sagot ng examiner, na confuse ako kc marami distraction na facts…kumbaga wild punch na lang pinakawalan ko, baka by accident madaplisan ko,,,ahm,,para sa skin walang option money to speak of because the parties did not categorically and clearly agree that a case of jack daniel and the 5k given by Marcelo represent as “option money”. As such, Sergio has absolute right to sell (jus desponde) his property to whomsoever he pleases.

  3. Actually naalala ko tong case na ito. Isa ito sa legal Memo or Legal opinion exercises ni Atty. Dechavez sa San Beda. I still remember, the answer in essence, in this case there is no binding contract because the subject matter involves real property “Statute of Fraud” kung baga…

  4. A. Marcelo has a cause of action against Sergio. A perfected contract is in compliance to the requirements provided by the law. In the case at bar, this was a perfected contract between Marcelo and Sergio considering that all requisites of a valid contract are present. The only remedy of Marcelo is rescission and damages, but cannot file an action for a specific performance.

    B. Sergio cannot use that the contract was not in writing as a defense. Insofar as the contract between Marcelo and Sergio, it is valid. It becomes binding between the two. The purpose of the Statute of Frauds is to prevent fraud, but cannot be interposed as a defense in order to perpetuate fraud. Hence, the only problem with the contract of sale between sergio and marcelo is the enforceability. It cannot bind third persons.

    —-
    For me, there is no earnest money or option to speak of. Unless, in the conversation there was an intent of both that the money shall represent the period with which Marcelo may purchase.

  5. Why are there still discussions on this topic? Tapos na po ang exam, lumabas na ang result. Academic freedom is useless if there is no definite answer to base your argument. Kita kits na lang sa court para magkaalaman ng galing. Ang pwede lang magyabang dito ang mga topnotchers, if you’re not one of them better not insist on your answer even if its the essence of lawyering.

    1. That’s what these threads are for – however we may differ in our thoughts or opinions – discussions and sharing your ideas about the question may serve you well as they stimulate your mind into looking for answers and exploring other possibilities. Lawyering is infinitely a mental work, and you don’t have to be correct all the time.

  6. A. there is a perfected sale because there was an agreement as to the cause, object and consideration.

    B. writing is not necessary because there is already a perfected contract of sale. written document is only necessary if it is an agreement for sale of real property.

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