1988 BAR QUESTIONS ON SALES Question No.

11 (b) Merle offered to sell her automobile to Violy for P60, 000. After inspecting the automobile, Violy offered to buy if P50,000.00. This offer was accepted by Merle. The next day, Merle offered to deliver the automobile, but Violy being short of funds, secured postponement of the delivery, promising to pay the price upon arrival of the steamer, Helena. The steamer however never arrived because it was wrecked by a typhoon and sank somewhere off the Coast of Samar. (1) Is there a perfected contract in this case? Why? (2) Is the promise to pay made by Violy conditional or with a term? Why? (3) Can Merle compel Violy to pay the purchase price and to accept the automobile? Why? Answer (b) (1) Yes, the contract is perfected. The moment Violy accepted the offer of Merle, there is meeting of the minds. Mere consent between parties constitutes a perfect contract. (2) The promise to pay is with a term, and the term here refers to the date of payment, which Violy fixes on the date of the arrival of the steamer, Helena. Yes, since contract is perfected already. Merle can compel Violy to pay the purchase price and accept the automobile on the date, which is to be fixed again after the original date of payment set on the arrival of

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steamer Helena didnt materialize because it was wrecked and sank due to the typhoon. Question No. 13 (a) A sold to B a house and lot for P50,000.00 payable 30 days after the execution of the deed of sale. It was expressly agreed in the deed that the sale would ipso facto be of no effect upon the buyers failure to pay as agreed. B failed to pay on maturity and A sued to declare the contract of no force and effect. If B tendered payment before the action was filed, but subsequent to the stipulated date of payment, would the action prosper? Why? (b) In 1950, A executed a power of attorney authorizing B to sell a parcel of land consisting of more than 14 hectares. A died in 1954. In 1956, his four children sold more than 12 hectares of the land to C. In 1957, B sold 8 hectares of the same land to D. It appears that C did not register the sale executed by the children. D, who was not aware of the previous sale, registered the sale executed by B, whose authority to sell was annotated at the back of the Original Certificate of Title. (1) What was the effect of the death of A upon Bs authority to sell the land? (2) Assuming that B still had the authority to sell the landwho has a better right over the said land, C or D? Answer (a) The action would not prosper in this case. B, the vendee paid the P50, 000.00, even after the stipulated date of payment, and that there was no prior demand from A for the rescission either judicially of by notarial act. According to law, in the sale of immovable property, even though it is stipulated that upon failure to pay the price at the time

agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, so long as no demand for the rescission of the contract has been made upon him either judicially or by notarial act. If after the demand, the court may not grant him a new term. (b) (1) B was not aware of the demise of A, who executed the power of attorney which granted the former the authority to sell the property, thus, B acted in good faith and his transaction with D is valid. According to law, the death of the principal or of any other cause which extinguishes the agency, without knowledge of the agent shall render valid his contract with the third parties. (2) D has a better right over C. D not aware of the previous sale, he registered the sale executed by B, whose authority was annotated at the back of the Original Certificate of Title. Under the law on double sale, the one who in good faith recorded the sale in the Registry of Deed has a better right over the immovable property. Question No. 15: (a) Suppose that in an oral contract, which by its terms is not to be performed within one year from the execution thereof, one of the contracting parties has already complied within the year with the obligations imposed upon him by said contract, can the other party avoid fulfilment of those incumbent upon him by invoking the Statute of Frauds? (b) One-half of a parcel of land belonging to A and B was sold by X to Y for the amount of P1, 500.00. The sale

was executed verbally. One year later, A and B sold the entire land to X. Is the sale executed verbally by X to Y valid and binding? Reasons. (c) Distinguish between a contract of sale and a contract to sell. Answer (a) The other party cannot avoid fulfilment of the obligations imposed upon him by the contract since there was already an execution or compliance of the other party. The Statute of Frauds aims to prevent and not to protect fraud. An oral contract is a perfected contract and is enforceable to parties who consented on the contract and agreed on an object of the contract and the price. (b) Yes, the sale executed verbally between X and Y is valid and binding. The seller need not own the property at the time of perfection, it is sufficient that he be the owner at the time of the delivery. There was no mention of delivery on the first year, it is assumed that there was delivery when X acquires ownership of the land when A and B sold the whole parcel of land to him a year after, thus, by operation of law ownership was passed to buyer Y. (c) Contract of Sale distinguished from Contract to Sell (1) In a Contract of Sale, non-payment of price is a resolutory condition, while in a Contract of Sell, the payment in full of the price is a positive suspensive condition; (2) In the first, title over the property generally passes to the buyer upon delivery; while in Contract to Sell, ownership is retained by the

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seller, regardless of delivery and is not to pass until full payment of the price; In the first, after the delivery has been made, the seller has lost ownership and cannot recover it unless the contract is resolved and rescinded; in the second, since the seller retains ownership, despite delivery, he is enforcing and not rescinding the contract if he seeks to oust the buyer for failure to pay.