OBLIGATIONS AND CONTRACTS PRE -FINALS |1

I. In your exam booklet, write “True” if the statement is absolutely true; otherwise, write
“False”. (5 pts. each)

1) Every form of lesion gives ground for the annulment of a contract.

2) Contracts entered into by persons who are incapable of giving consent are void;
a contract where one of the parties is incapable of giving consent is voidable.

3) Only contracts which are not in the form required by law shall be considered
unenforceable.

4) Payment of an obligation made after the right to sue upon the obligation has
prescribed can still be recovered as an undue payment.

5) Perfection of a contract does not require the delivery of the object of the
obligation.

6) Contracts shall by obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.

7) Where a mistake causes the failure of the instrument to disclose the real
intention of the parties, as in fact the mistake prevented a meeting of the minds
between the parties, then the instrument may be reformed.

II. Define Contracts. What are the essential elements of a contract, and when is a contract
perfected? (5 pts.)

III. Define Natural Obligations. Give three examples when the concept of natural obligations
applies. (5 pts.)

IV. Define Statute of Frauds. Give three (3) cases where the Statute of Frauds applies. (5
pts.)

V. Give four (4) instances where demand is not necessary for legal delay to set in. (5 pts.)

VI. Enumerate five (5) instances when the debtor shall lose the right to make use of the
period. (5 pts.)

VII. Define Estoppel. Give three instances of estoppel as described under the Civil Code.
Differentiate estoppel in pais from estoppel by deed. (10 pts.)
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VIII. CASES. Limit your answers to not more than four (4) sentences per question.

On January 3, 1998, Carlito, 16 years old, borrowed Php150,000.00 from his

close friend, Jose, then 21 years of age, promising to pay the latter on January 5, 2000,
and undertaking to pledge as security for the payment of the loan, a one-carat male ring
owned by Marcos, Carlito’s own father. Immediately after receiving the proceeds of the
loan, Carlito asked his father for permission to pledge the latter’s ring for the said loan.
Marcos scolded his son and told him not to borrow money even from friends. Marcos
also refused to allow his son to pledge his ring.

In any case, Carlito went back to Jose and assured him that he could now
consider the ring as a pledge to secure the payment of the subject loan. On January 20,
1998, Jose met Marcos at a grocery store and the former reminded the latter that the
latter’s ring was pledged to secure the payment of Carlito’s loan. Marcos was surprised
and said he did not agree to the pledge, nor to his son taking up the loan.

Thereupon, on January 21, 1988, Jose called Carlito and demanded immediate
payment of the loan. Carlito resisted the demand saying that the loan was due January
5, 2000 and asserted that in any case the loan transaction was void, because he was
only 16 years old when he contracted the same. Jose threatened to sue Carlito to collect
the obligation.

1. May Carlito resist the demand for payment on the ground that the loan was
due for payment only on January 5, 2000? Explain. (5 pts.)

2. Is Jose’s demand proper given that Carlito was only 16 years old at the
time the loan was contracted? Explain. (5 pts.)

On January 25, 1998, when he learned of the threat of a court suit, and in order
to forestall the same, Marcos went to see Jose and assured him that he was recognizing
his son’s loan obligation, and that he was pledging his ring – which he would bring to hi
(Jose) in two days – to secure the payment of the obligation on due date. Jose agreed
to the pledge. Two days passed without Marcos delivering the ring.

Consequently, on February 15, 1998, Jose sued Carlito for collection of the loan.
This time, Carlito interposed the defences that the loan obligation was void because he
was only 16 years old at the time the loan was contracted, and in any case because the
loan was secured by a pledge on the ring, he (Carlito) was entitled to the benefit of the
period, i.e. until January 5, 2000 within which to pay the loan.
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3. Is Carlito’s defense of age proper? Explain. (5 pts.)

4. Is Carlito entitled to the benefit of a period under the circumstances?

Explain. (5 pts.)

In due course, the court rendered judgment in favor of Jose, which judgment
became final and executory on January 20, 2000. By this time, however, Jose was
already in the US where he stayed for 12 years. Upon his return, he sought the
implementation of the judgment.

5. May the judgment in favor of Jose be executed/satisfied under the

circumstances? Explain. (5 pts.)

The Court, however, denied the prayer for a writ of execution. In any case,
Carlito, now about 28 years old, paid the loan obligation as adjudged by the Court
believing that he was both the legal and moral duty to do so.

6. May Carlito recover from Jose the payment he made under the
circumstances? Explain. (5 pts.)