Action Vendee Recovery Real Statute Frauds  A Contract

VIII.

Which of the following actions or defenses are meritorious: (1%)

(A)  An action for recovery of downpayment paid under a rescinded oral sale of real property.

(B)  A defense in an action for ejectment that the lessor verbally promised to extend or renew the lease.

(C)  An action for payment of sum of money filed against one who orally promised to answer another's debt in case the latter defaults.

(D)  A defense in an action for damages that the debtor has sufficient, but unliquidated assets to satisfy the credit acquired when it becomes due.

(E)  None of the above.

SUGGESTED ANSWER:

(A)

An oral sale of real property is an unenforceable contract under the Statute of Frauds.  SInce, in the problem, the vendee paid downpayment, it takes it out of the ambit of the Statute of Frauds.  The rescission here must be in the sense of resolution of the reciprocal obligation arising from the contract of sale.  If rescinded(resolved) by the vendee on account of the vendor's failure to deliver the thing sold, the parties will go back to their status prior to the contract.  If the vendor refuses to return the downpayment, then the vendee can file an action for recovery of the downpayment.

If, on the other hand, the vendor and the vendee mutually agree to rescind, i.e. cancel the contract, the vendee likewise can file an action for recovery of the downpayment on the basis of solutio indebiti.

ALTERNATIVE ANSWER:

(E)

a.  the recovery of the downpayments should be made in the same action for rescission.  Otherwise it would be a ground for dismissal under Rule 2, Section 4 of the Rules of Court.

b.  lease of a real property is covered by the Statute of Frauds.  Furthermore, it also consists of interest in real property.  Hence, it must be in writing (Art. 1403 Civil Code)

c.  A contract of guaranty is a promise to answer for the debt of another and hence, it is also covered by the Statute of Frauds.  It must be in writing before it can be enforced in a court action. (Art. 1403 Civil Code)

d.  The fact that a debtor has unliquidated assets does not excuse him from paying his debt.

e.  if the technical meaning of rescission under Article 1191 of the Civil Code will be adhered to, then there is no absolutely correct answer.  Hence, letter E is also a possible answer.