RFBT 01 Obligations

UNIVERSAL COLLEGE OF PARAÑAQUE
COLLEGE OF BUSINESS & ACCOUNTANCY
REGULATORY FRAMEWORK FOR

BUSINESS TRANSACTIONS
LAW ON OBLIGATIONS
EXERCISES
Student’s Edition
Comprehensive Review Program RFBT - 01
REGULATORY FRAMEWORK FOR LAW ON OBLIGATIONS
EXERCISE QUESTIONS
PART 1 Basic Concepts and Definitions
Definition of Obligation
1. According to Article 1156 of the New Civil Code of the Philippines, an obligation is a
juridical necessity to give to do or not to do. The article defines a
__________________ obligation.
A. Civil C. Natural
B. Moral D. All of the above
2. Statement 1: Natural obligations are based from positive law and do not grant a right
of action to enforce their performance.
Statement 2: Both natural obligations and moral obligations are based from natural
law; under our law, moral obligations are now merged with natural obligations
A. Only the first statement is true. C. Both statements are true.
B. Only the second statement is true. D. Both statements are false.
3. Three of the following statements pertain to natural obligation. Which one does not?
a. It is not enforceable in a court of justice.
b. Obligation exists by reason of equity and moral justice.
c. If performed voluntarily, recovery can no longer be made.
d. There is juridical necessity to perform it.
Requisite of Obligation
4. The following are the requisites of an obligation, except:
a. passive subject, debtor or obligor. c. efficient cause.
b. active subject, creditor, or obligee. d. demand.
5. Determine which of the following is not an essential requisite for an obligation to

exist
A. Object C. Passive subject
B. Creditor or oblige D. Delay
6. This is the legal tie which binds the parties to the obligation.
A. Efficient cause D. All of the above
B. Juridical tie E. Both B and C only
C. Vinculum juris
EXERCISE QUESTIONS Page 2

7. Statement 1: Prestation is the subject matter to be observed in the performance of

the obligation. It may consist of giving, doing or not doing a thing.
Statement 2: An obligation may exist of one of its requisite is missing.
Sources of Obligation
8. Obligations may arise from any of the following, except:
a. contracts. c. law.
b. quasi-contracts. d. prestation.
9. A judicial relation known as Negotiorum Gestio takes place.

a. When a person voluntarily takes charge of another's abandoned business or
property without the owner's consent.
b. When something is received and there is no right to, demand it and it was
delivered through mistake.
c. When a person is appointed by a court to take the property or business of
another.
d. None of the above.
10. P took a public bus in going to his office. Although P paid his fare, the bus conductor
did not issue to him a ticket. Along the way, the bus met an accident causing a slight
injury to P and other passengers. If P is to recover damages from the bus owner, the
source of the bus owner's liability is:
a. contract.
b. law.
c. quasi-delict.
d. P cannot recover any amount because no ticket was issued.
11. The principle of negotiorum gestio does not apply:

a. When the property or business is not neglected or abandoned.
b. When the officious manager has been tacitly authorized by the owner.
c. In both (a) and (b).
d. In neither (a) nor (b).

12. D, a depositor of ABC Bank, visited the branch of the bank at España Boulevard to
withdraw from its automated teller machine (ATM). After pressing correctly the
amount of P500.00, the machine dispensed 10 pieces of P500.00 bills or a total of
P5,000.00. The receipt released by the ATM showed that only P500.00 was
withdrawn.
a. D does not have to return the excess of P4,500.00 because it was not his fault
that the ATM would dispense more than what he wanted to withdraw.
b. D does not have to return the excess of P4,500.00 because the receipt did not
indicate that the said amount was withdrawn.
c. D must return the excess of P4,500.00 because it was a case of payment that
was not due.
d. D must return the excess of P4,500.00 because the bank will likely discover
that he was the one using the ATM when the overpayment was made.
13. It is a wrong committed without any pre-existing relations between the parties.
a. Natural obligation c. Quasi-contract
b. Quasi-delict d. Crime
14. Statement 1: Obligations derived from law are not presumed; an obligation must be
clearly set forth in the Civil Code or special laws.
Statement 2: Every person criminally liable is also civilly liable and vice versa.
15. Statement 1: Generally, the sources of obligations can be divided into two, law and
contract namely.
Statement 2: Quasi –contracts derive their applicability from law.
PART 2: Nature and Effect of Obligations

Prestation
16. It is a thing that is particularly designated or physically segregated from all others of
the same class.
a. Generic thing c. Determinate thing
b. Indeterminate thing d. Real thing

17. Which of the following is not a generic obligation?

A. obligation to pay P5,000
B. obligation to deliver 2009 Nissan Sentra Series III
C. obligation to deliver 50 cavans of rice
D. obligation to give a delimeted generic object
Obligations of one obliged to give a thing

18. Unless the law or the stipulations of the parties require another standard of care,
every person obliged to give something is also obliged to take care of it with:
a. extra-ordinary diligence.
b. diligence of a father of a good family.
c. diligence of a good father of a family.
d. good diligence of a father of a family.
19. All of the following are the obligations of one who is obliged to give a determinate
thing, except
A. To take care of the thing with the diligence of a good father of the family though
there is a stipulation of the diligence required for the object.
B. To deliver the thing.
C. To deliver the fruits of the thing accruing to the obligee.
D. None, all are included as his or her obligations.
20. The creditor has a right that is enforceable against a definite passive subject. This
right is known as:
a. personal right. c. natural right.
b. real right. d. civil right.
21. On a certain year, D was obliged under a contract executed on March 1 to deliver an
agricultural land to C on April 1. D, however, actually delivered the land and the fruits
thereof to C on May 1. C had the right to the fruits of the agricultural land beginning
on:
a. March 1.
b. April1.
c. May 1.
d. The period should be fixed by the court so that it can be determined when C is
entitled to the fruits.

22. Refer to the foregoing number. C became the owner of the agricultural land and the
fruits thereof on:
a. March 1.
b. April 1.
c. May 1.
d. The period should be fixed by the court so that it can be determined when C
actually became the owner of the agricultural land and its fruits.
23. Assuming that in No. 21, D did not deliver the land and its fruits to C. Instead, he
delivered the same to X, who was in good faith when he acquired the land and its
fruits, on April 30.
a. X is the rightful owner of the land. c. C has a right of action against X.
b. C is the rightful owner of the land. d. C cannot ask for damages
against D.
24. These are products of the soil through cultivation or human labor.
A. Natural fruits C. Industrial fruits
B. Civil fruits D. Juicy fruit
25. A right enforceable against the whole world and acquired through delivery of the
thing in good faith
I. Personal right III. Real right
II. Jus in rem IV. Jus in personam
A. I or IV C. III or IV
B. II or III D. I or II
Grounds for liability to pay damages

Damages
26. The wrongful act or tort which causes loss or harm to another is called:
a. Damages c. Injury
b. Damage d. None of the above
27. They include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury.
A. Moral damages C. Compensatory damages
B. Nominal damages D. Liquidated damages

28. Statement 1: Corporations are entitled for all types of moral damages since it is
considered as a person (artificial) by the law.
Statement 2: Proof of pecuniary loss is required for actual damages unless provided
by law or stipulation.
Fraud
29. The kind of fraud which renders a contract voidable is:
a. causal fraud. c. fraud in performance.
b. incidental fraud. d. future fraud.
30. This consists in the conscious and intentional proposition to evade the normal
fulfilment of an obligation
I. Dolo III. Fraud
II. Mora IV. Delay
A. I or IV C. III or IV
B. I or III D. I or II
31. Under a contract between D and C, D is obliged to deliver 10 bags of detergent soap
to C 10 days after the execution of their agreement. On due date, D delivered to C
10 bags of detergent soap which he mixed with chalk.
a. The contract entered into between D and C is voidable because of the fraud
employed by D.
b. The contract is valid. The fraud employed by D does not affect the validity of
the contract but D is obliged to pay damages to C.
c. The contract is void because of the fraud employed by D in the performance of
his obligation.
d. The contract is rescissible because of the damages suffered by C.
32. Statement 1. Waiver of future fraud is null and void.

Statement 2. Waiver of future negligence is valid.
A. Both statements are false. C. True; False
B. Both statements are true. D. False; True

Negligence
33. It is the omission of that diligence which is required.by the nature of the obligation
and corresponds with the circumstances of the person, of the time, and of the place.
A. Dolo C. Culpa
B. Mora D. None of the above
34. It is the wrong or negligence in the commission of a crime

A. Culpa aquiliana C. Culpa contractual
B. Culpa criminal D. All of the above
35. Statement 1: In culpa contractual, there is a pre-existing contractual relation between

the parties.
Statement 2: In culpa contractual, the source of liability of the actor is the breach of
contract.
36. On December 31, 2016, taxi driver D is driving recklessly along EDSA to catch up
his New Year’s celebration with his family since he is planning to go home after
dropping his last passenger A. Since it is almost 10:00 in the evening, he didn’t
notice that a pedestrian named X was crossing the road. He bumped X resulting
major injuries. The taxi is being operated by W. Determine the false statement
below.
A. X, the pedestrian has the right to proceed to against D or W based on culpa
aquiliana since there is no pre-existing contract between them.
B. If X proceeded against W based on culpa aquiliana, W can relieve himself of
this liability by proving that he exercise due diligence of a good father of a
family in the selection and supervision of his employees.
C. X, the pedestrian has the right to proceed against D or W (if D is insolvent)
based on culpa criminal since the act of D is punishable by law.
D. None of the above is a false statement.
37. Using the given from the previous number, what are the remedies of A, the
passenger?
A. Right to proceed against D based on culpa contractual
B. Right to proceed against W based on culpa contractual
C. Right to proceed against D based on culpa criminal
D. Either A, B or C
E. Either B or C only

38. Statement 1: In fraud, liability of the actor cannot be reduced by the court while in
negligence, the liability may be reduced by the court.
Statement 2: In negligence, there is a deliberate intention to cause damage while in
fraud there is no intent.
Delay
39. This refers to delay on the part of the creditor.
a. mora solvendi ex re c. mora solvendi ex personae
b. compensatio morae d. mora accipiendi
40. Demand must be made' on the due date of the obligation in order for delay to exist in
one of the following cases. Which is it?
a. When it was stipulated by the parties that demand need not be made.
b. When the law provides that demand need not be made.
c. When the obligation does not indicate whether demand must be made or not
on due date.
d. When time is of the essence of the contract.
41. These statements are presented to you:

I. There is no delay in obligations not to do.
II. Delay is applicable only to the debtor, never to the creditor.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statement I is true.
d. Only Statement II is true.
42. D was obliged to deliver a specific car to C on May 31, 2014. On such date,
however, D failed to deliver the car. C also did not make any demand for the delivery
of the car.
a. D was in delay when he failed to deliver the car on due date.
b. D was not in delay when he failed to deliver the car on due date.
c. D would be on delay only if C made a demand for the delivery of the car on or
before due date.
d. D was in delay whether demand was made or not since time was of the
essence of the contract.

43. On December 1, 2014, Miss Santos, a professor of Manila College, engaged the
services of Lepanto Transport to bring her class to Calamba, Laguna in time for the
Rizal Day celebration on December 30, 2014 which would start at nine O'clock in the
morning. The contract signed by the parties specified that a bus would be in the
school premises at six o'clock in the morning and would leave at exactly 6:30 a.m.
However, Lepanto Transport failed to send a bus on the date, time and place agreed
upon. As a result, Miss Santos and her class failed to attend the celebration. Ms.
Santos sued Lepanto Transport for damages on the ground of delay in the
performance of its obligation. For its defense, Lepanto Transport claimed there was
no delay because Miss Santos never made a demand.
a. There was no delay because Miss Santos did not make any demand.
b. Lepanto Transport was in delay since demand was not required.
c. Miss Santos should have obtained the services of another company when the
bus of Lepanto Transport did not arrive.
d. Miss Santos should have reminded Lepanto Transport from time to time before
the due date of its obligation to provide for a bus.
Remedies of the creditors

44. The following are the remedies- of the creditor to pursue his claims against the
debtor, except to:
a. pursue the property owned and in possession of the debtor.
b. exercise all the rights and bring all the actions of the debtor (accion
subrogatoria).
c. impugn the acts which the debtor may have done to defraud his creditors
(accion pauliana).
d. compel the debtor to perform the service in obligations to do.
45. D is obliged to deliver his only horse to C on May 31, 2014. C made a demand
against D for the delivery of the horse on May 31, 2014. However, D failed to deliver
the horse. In view thereof, C consulted you and ask which of the following remedies
are available to him.
I. Compel D to deliver the horse to him.
II. Get a horse from another person at D's expense.
III. Demand payment of damages from D.
Which of the foregoing remedies may be availed of by C?

a. I and III. c. I only.
b. II and III. d. II only.

Rules on Transmissibility of Rights

46. D borrowed P50,000.00 from C. C dies before he has collected the debt leaving S,
his son, as heir. Which of the following statements is correct?
a. S can collect from D although D and C did not agree that the credit right will
pass on to the heirs of C.
b. S cannot collect because the credit right is personal to C.
c. S can collect only if D and C agreed that the credit right will pass on the
heir of C.
d. S cannot collect because the law prohibits the transmission of the credit right.
47. A owes B who has two (2) legitimate children, P50, 000 payable on December 31,
2000.
A. If A dies before December 31, 2000, B cannot collect from the heirs of A.
B. If A dies before December 31, 2000, B can collect from the heirs of A.
C. If B dies, has two (2) legitimate children cannot recover from A his obligation.
D. If both A and B die, the heirs of B can be collect from the heirs of A.
48. D borrowed P50,000.00 from C. The debt, which is payable within one year, is
secured by a mortgage that D constituted on his lot. The mortgage is recorded in the
Registry of Property. C dies before the due date of the debt and was not able to
collect any amount of his loan receivable from D. He was survived by S, his only son
and heir. D, taking advantage of the situation, sold the lot to T who was not aware of
the mortgage constituted thereon.
a. The mortgage is not binding on T since he was not aware of it at the time he
bought the lot.
b. S, the son of C, has the right to collect the amount of the note from D and
foreclose the mortgage if the D cannot pay.
c. The mortgage is not binding on T since D was in bad faith when he
sold the lot to T.
d. The right to collect the loan and foreclose the mortgage were extinguished
upon the death of C.
49. Statement 1: All rights are transmissible without exception.

Statement 2: All obligations when transmitted are needed to be fullfiled or paid
regardless of the value of inheritance received.

Fortuitous Events
50. There shall be no liability for loss due to fortuitous events in one of the following
cases. Which is it?
a. When the debtor delays.
b. When the parties so stipulated that there shall be liability even in case of loss
due to fortuitous events.
c. When the nature of the obligation requires the assumption of risks.
d. When the obligation is to deliver a determinate thing and there was no
stipulation as to the liability of the debtor in case of loss due to fortuitous
events.
51. Are those events that could not be foreseen, or which, though foreseen, are
inevitable.
A. Fortuitous events C. Fortitude events
B. Delay D. Forecasted events
52. Which of the following is a characteristic of a fortuitous events that has an effect of
extinguishing an obligation?
A. The cause was not independent of the debtor's will.
B. There must be impossibility of foreseeing the event or of avoiding it even if it
can be foreseen.
C. The thing involved is a generic thing
D. All of the above
53. As a general rule, no person shall be liable for fortuitous events. Which of the
following is not an exception?
A. When the law expressly provides for liability even in case of fortuitous events
B. When the parties have declared liability even in case of fortuitous event.
C. When the nature of the obligation requires the assumption of risk
D. When the lost thing is a generic thing.
Rules on receipt of later instalment or interest without reservation

54. Statement 1: A receipt acknowledging the payment of a later instalment without
reservation as to the earlier instalment due will raise the presumption that the prior
instalment is also paid.
Statement 2: The receipt of the principal without reservation as to payment of
interest raises an absolute assumption that the interest has been paid.


PART 3: Types of Obligations

Pure Obligation
55. Statement 1: A pure obligation is an obligation without a period or condition.
Statement 2: A pure obligation is immediately demandable.
56. D owes C P6,000.00. No date for payment was stipulated by the parties.
a. C cannot require D to pay because there is no date for payment.
b. C can require D to pay at anytime.
c. D is not liable to C because the obligation is void there being no date of
payment.
d. D is not required to pay unless C goes to court and asks the court to fix a
period for the payment.
Obligation with condition

57. If the obligor binds himself to perform his obligation as soon as “he shall have
obtained a loan” from a certain bank this obligation is:
A. with a term C. suspensive
B. conditional D. resolutory
58. Statement 1: In an obligation with a suspensive condition, the demandability of the

obligation is suspended until the happening of the condition.
Statement 2: A suspensive condition is also called condition subsequent.
59. A promissory note signed A and dated March 15, 2000 is worded as follows: “I
promise to pay B the sum of Fifty Thousand Pesos (P50, 000) provided that if she
should fail I the October, 2000 CPA Examination, she shall return to me said
amount.” The above note gives rise to an obligation with:
A. suspensive condition C. resolutory condition
B. casual condition D. answer not given

60. One of the following is a valid obligation. Which is it?

a. D promised to give C P50,000.00 if C will not swim across the Pacific Ocean.
b. D promised to give C P50,000.00 if D goes to Tokyo.
c. D promised to give C P50,000.00 if C can fly to the moon.
d. D promised to give C P50,000.00 if C gives him 5 grams of marijuana.
61. The following statements are presented to you for evaluation.

I. A condition that depends upon chance or upon the will of a third person is a
potestative condition.
II. A obligation with a resolutory condition is demandable at once.
III. An obligation where D is to give C P50,000.00 if C will marry X is an obligation
with casual condition.
A. B. C. D.
Statement 1 False False False True
Statement 2 True False False False
Statement 3 False False True False
62. In relation to an obligation with a condition, which of the following statements is/are
true?
A. A suspensive condition need not to happen or fulfil since there is already an
obligation which is demandable at once.
B. If the obligation and condition is divisible, where obligation involves selling of
prohibited drugs, the whole obligation will be considered void.
C. If the condition is not to do an impossible thing, it shall be deemed as not
having been agreed upon.
D. None of the statements are true.
63. On July 1, 2015, D obliged himself to give C P50.000.00 if C will marry X on or

before December 31, 2015. The condition of the obligation is a:
a. positive condition. c. joint condition.
b. negative condition. d. impossible condition.
64. Refer to No. 63. Which of the following statements is incorrect?

a. The obligation of D is demandable if C marries X on or before
December 31, 2015.
b. The obligation of D is extinguished if it is already January 1, 2016 and C has
not yet married X.
c. The obligation of D is extinguished on December 2, 2015 if X dies on the said

date and C has not yet married X.

d. The obligation is demandable if C marries X on January 1, 2016.
65. D obliges himself to give C P25,000 if he tops the CPA board exam. That time C is
just an ordinary student aiming only to pass the board. Eager to get that P25,000 he
did all that he can to catch-up all the lessons needed for him to top the exam. The
final pre-board came and everyone was shocked to see that C tops the pre-board
exam. Unfortunately, D was not happy and was nervous that he will really give C
P25,000. What C did was he put something on the food of D the night before the
actual board exam. As a result, D woke up late resulting for him to get a conditional
grade in the board. Decide.
A. D is not obliged to give C P25,000 since the condition involve is suspensive,
the happening of which must come in order to give rise to an obligation.
B. D is obliged to give C P25,000 since the debtor prevented the fulfilment of the
condition which is for C to top the board exam.
C. D is obliged to give C not P25,000 but medicines since this resulted to a quasi-
contract.
D. D is still obliged to give C P25,000 since the condition is a resolutory condition.
66. Statement 1: The effect of the fulfillment of the suspensive condition retroacts to the
day of the constitution of the obligation which includes the fruits and interests.
Statement 2: Upon the fulfillment of the resolutory condition, the obligation is
extinguished. The parties shall return to each other what they have received.
67. Rules in case of deterioration, loss and improvement:

I. If the generic thing is lost before the fulfilment of obligation through the fault of
debtor. The debtor is liable for damages.
II. If the thing deteriorates naturally before the condition is fulfilled, there is no
liability on the part of the debtor.
III. On the other hand, if the thing improves naturally either due to its nature or
passage of time, the benefit will inure to the creditor.
A. B. C. D.
Statement 1 False False False True
Statement 3 True False True False

68. D is obliged to give his only car to C if C finishes his economics degree. Before C
finished the said degree, D had the car repainted. Which of the following statements
is incorrect?
A. The debtor will have the right granted to a usufructuary.
B. The debtor can enjoy the use of the improved thing but not its fruit.
C. If the condition is fulfilled, D shall deliver the car, still repainted without the need
for indemnity on the part of C.
D. All of the statements are true.
Obligation with a Period
69. Which of the following is not an obligation with a period?
a. "Payable soonest"
b. An obligation payable little by little
c. Will pay you P10,000 "if I like"
d. Payable "within 2 years from today"
e. All of the above
70. The following statements were presented to you for evaluation:
I. It may or may not happen.
II. It refers to an event.
III. If potestative on the debtor and suspensive, the obligation is void.
IV. It fixes the efficaciousness of the obligation.
Which statement/(s) pertains to a period?
A. I only D. IV only
B. I and II E. III and IV
C. III only
71. Which of the following is an obligation with a period for the benefit of both the debtor
and the creditor?
a. Payable if I like
b. Payable when you like
c. Payable on or before December 25, 2010
d. Payable on December 24, 2010
72. The following are obligations with a term or period, except:
a. D to give C P50,000.00 on December 1, 2015.
b. D to give C P50,000.00 on Christmas day next year.
c. D to give C P50,000.00 upon the death of C's father.
d. D to give C P50,000.00 if C's father dies within 2 years.

73. Z obtained a loan from X on the amount of Php10, 000.00. Z promised to pay the
said loan of Php10,000.00 to X as soon as possible. Two year had elapsed but the
loan is stil unpaid. The remedy available to X is:
A. To file an action against Arturo for collection of debt;
B. To demand payment for damages;
C. To attach the property of Z;
D. To ask (petition) the court to fix the period.
74. On June 1, 2014, Demetrio obtained a loan of P100,000.00 from Cornelio. The loan,
which is payable on or before June 1, 2015, is secured by a chattel mortgage on
Demetrio's brand-new Toyota car with plate number XYZ 123. On February 1, 2015,
while Demetrio was opening the trunk of his car at the parking lot of a grocery store
to place the groceries he had just purchased, three unidentified men approached
him and took his car at gunpoint. He reported the carnapping to the authorities but
his car has not been recovered.
a. Cornelio may demand immediate payment of the loan unless Demetrio gives
another security therefor.
b. Cornelio may demand payment only on June 1, 2015 because Demetrio has
the benefit of the period and the loss of the car was due to force majeure.
c. Cornelio may no longer demand payment since the loan was extinguished by
reason of the loss of the car due to fortuitous event.
d. Cornelio may demand immediate payment even if Demetrio offers another
security because the car is determinate and could not be replaced.
75. Statement 1: One characteristic of a period as distinguish from a condition is the

surety of the event.
Statement 2: All obligations with a period creates only an obligation.
76. Statement 1: If the debtor has been disposing all his property with an attempt to
leave his place of business or residence to escape his creditors, such creditors can
demand immediate payment of his debts although their maturity date is not yet due.
Statement 2: Whenever a period is designated in an obligation, it shall be presumed
to have been established for the benefit of both the creditor and the debtor
Statement 3: An example of a judicial period is the deadline of payment for income
taxes and other taxes.

A. B. C. D.
Statement 1 True False False True
Statement 3 False False True False
Alternative and Facultative Obligation
77. An obligation wherein various things are due but the complete performance of all of
them is necessary to extinguish the obligation.
a. Facultative obligation. c. Alternative obligation.
b. Conjoint obligation. d. Pure or simple obligation.
78. D obliges himself to deliver to C, a can of opium; or a can of carabao milk taken from
a cow; or a specific car.
I. The obligation is an alternative obligation.
II. It is presumed that the right of choice belongs to the debtor so he can choose
any from the objects above to extinguish the obligation.
A. I and II are true. C. Only II is true.
B. Only I is true. D. I and II are false.
79. An obligation ceases to be alternative and becomes a simple obligation in the
following cases, except when:
a. the debtor has communicated his choice to the creditor.
b. the right of choice has been expressly granted to the creditor and his choice
has been communicated to the debtor.
c. among the several prestations that are due only one is practicable.
d. three prestations are due but one of them is unlawful or impossible.
80. D is obliged to give C a specific watch, a specific ring, or a specific bracelet. The
parties agreed that C will have the right to choose the thing which will be given to
him. Before C could make his choice, the watch and the ring are lost through D's
fault, successively. What is the right of C?
a. C may choose the delivery to him of the bracelet, or the price of the watch or
the price of the ring plus damages.
b. C cannot choose the price of the watch or the price of the ring because the said
objects have already been lost.
c. C can only choose to have the bracelet because anyway, D can still perform
his obligation.
d. C can only choose to have delivery of the bracelet or the price of the ring which
was the last item that was lost plus damages.

81. In facultative obligation the right of choice belongs to:

A. the creditor D. third person
B. the debtor E. none of the above
C. both the creditor and the debtor
82. D is obliged to deliver a specific Toyota car to C. The parties agreed that should D
so desire, he may deliver his only Lancer car to C as a substitute. Before D could
make any substitution, the Lancer car was damaged beyond repair through the fault
of D.
a. D's obligation to deliver the Toyota car is extinguished.
b. D is obliged to pay damages to C for the loss of the Lancer car.
c. D is still obliged to deliver the Toyota car to C on due date.
d. D is obliged to get another Lancer car as a substitute.
83. Statement 1: In a facultative obligation, the choice solely belongs to the creditor.
Statement 2: If two parties entered into a facultative obligation and the principal
prestation was lost after substitution through the debtor’s fault, the debtor is liable to
damages.
84. Evaluate whether the following statements are true or false:

I. In an alternative obligation, if there are void prestations, the others may still be
valid, hence, the obligation remains.
II. In a facultative obligation, if the principal obligation is impossible, the debtor is
required to give the substitute.
III. In facultative obligation, only one prestation, the principal obligation, is due.
A. B. C. D.
Statement 1 True False False True
Statement 2 False False False False
Statement 3 True False True False

Joint and Solidary Obligation

85. Determine the false statement(s) below.
A. In a joint or solidary obligation, there, is a concurrence of two or more debtors
and/or two or more creditors in one and the same obligation.
B. In a joint obligation, each debtor is liable only for a proportionate part of the
debt, and each creditor is entitled only to a proportionate part of the credit.
C. The obligation is presumed to be solidary when there is a concurrence of two or
more debtors and/or two or more creditors in one and the same obligation.
D. The words “’pro-rata” and “proportionately” signifies that the obligation is a joint
obligation.
86. This is solidarity on the part of debtors

A. Passive solidarity C. Both A and B
B. Active Solidarity D. None from A and B
87. A, B and C are joint debtors of joint creditors W, X, Y and Z in the amount of
P300,000. How much can W and X collect from B?
a. P 75,000 b. P100,000
b. P150,000 c. None of the above
88. As a rule, even when there are two or more debtors, or two or more creditors, the
obligation is still joint. All of the following are exceptions to the general rule except:
A. When the obligation expressly so states solidarity liability.
B. When the law requires solidarity.
C. When the nature of the obligation requires solidarity.
D. None of the above.
89. A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors,
P20,000.00.
a. V may collect from B P20,000.00. c. V may collect from BP5,000.00.
b. V may collect from B P4,000.00. d. V may collect from B P1,000.00.
90. Statement 1: Solidarity exists although the creditors and the debtors may not be
bound by the same periods and conditions.
Statement 2: A solidary creditor can assign his right to a third person without the
consent of the other solidary creditor

91. L, M and N are the solidary debtors of Y for the amount of P300, 000 payable as
follows:
L – P50, 000 payable when he passed the CPA Board Exams;
M – P100, 000 payable on February 14, 2004;
N – P150, 000 payable upon completion of his construction project.
If L will pass CPA Board Exams, what shall be the right of Y?
A. demand P50, 000 from L only;
B. demand P50, 000 from L, M and N;
C. demand P300, 000 from L, M and N;
D. demand P300, 000 from L only.
92. A, B and C are solidary debtors of X in the amount of P30,000.00. If A is insolvent,

how much may X collect from B?
a. P30,000.00. c. P20,000.00.
b. P10,000.00. d. P15,000.00.
93. A, B and C are solidary debtors of X in the amount of P60,000.00. A, however, was a
minor at the time the obligation was constituted. If X sues B, B will be liable to X for:
a. P60,000.00. c. P20,000.00.
b. P40,000.00 d. P30,000.00.
94. A, B and C solidarily owe solidary creditors X and Y P30, 000. X remitted the entire
obligation in favour of A. The effect is:
A. The obligation is not extinguished until A collects from B and C.
B. The obligation is not yet extinguished until Y is paid by X his share of the credit
C. A cannot recover from B and C because remission in his favour extend to the
benefit of B and C
D. a can recover from B and C their respective share of the debt
95. XYZ are solidarily liable to A for P30, 000 which matures on July 1, 2001. On May 1,
2001, X paid A for the whole amount of the debt. If on December 1, 2001, X will be
reimbursed by Y, the latter will be liable for:
A. P10, 000 with interest from July 1, 2001 to December 1, 2001
B. P10, 000 without interest
C. P10, 000 with interest from May 1, 2001 to July 1, 2001
D. P10, 000 with interest from May 1, 2001 to December 1, 2001

96. A is indebted to X, Y and Z, solidary creditors, for P24,000.00. Suppose X makes a

demand against A, which of the following statement is true?
A. A may pay to anyone since there is active solidarity, the payment to any of the
creditors can extinguish the obligation.
B. A must pay to X. If A pays to another solidary creditor, say Y, the sum of
P24,000.00, the payment, as a rule, is valid only with respect to Y's share of
P8,000.00.
C. A must pay X since he is the one who demanded performance and it
represents demand of all the creditors. If A pays Y, that is still a valid payment.
D. A may pay to anyone even the obligation is a joint obligation since he has the
freedom to pay and cannot be compelled to pay anyone since the period is for
the benefit of both the contracting parties.
Divisible and Indivisible Obligation

97. Statement 1: The indivisibility of an obligation refers to the subject matter or object
not being susceptible of partial performance.
Statement 2: Solidarity, on the other hand, refers to tie between the parties.
98. All of the following are considered indivisible, except:

A. Obligations to give a specific cow.
B. Obligation to sing to a particular birthday party.
C. Obligation to dance every day for 1 week.
D. Obligation to pay a debt in the form of money. Stipulation said it must
be fully paid.
99. The following are characteristics of a joint indivisible obligation, except:

A. The demand must be made against all the debtors since compliance is possible
only if they act together.
B. If one of the debtors does not comply with his undertaking, the obligation is
converted into a monetary obligation to pay damages.
C. If one of the debtors is insolvent, the others shall not be liable for his share.
D. The creditors must act collectively, meaning, all of them must make the
demand unless one is specifically authorized to act for the others.
E. None of the above.

100. A, B and C bound themselves to deliver to X a specific car worth P3M. Due to the
fault of A, the car was lost. In this case:
A. X can claim damages from any one of the three for his proportionate part of
liability because the obligation is indivisible.
B. X claim only from A the whole amount of damages other than the value
of the car.
C. Since it is solidary liabilities for damages, X can claim the same from
any of the three.
D. Only A is liable for damages although B and C are liable for their respective
share in the obligation.
101. Assuming the debtors are solidarily liable, how much will X may demand from B?
A. 3 million plus damages
B. 1 million plus damages
C. 3 million
D. 3 million plus damages but the damages can be reimbursed from A.
Obligations with Penal Clause

102. Statement 1: In an obligation with a penal clause, the penalty shall substitute the
indemnity for damages and the payment of interest in case of non-compliance, if
there is no stipulation to the contrary.
Statement 2: A penal clause is a principal undertaking to assume greater liability in
case of breach.
103. Which of the following is/are functions of a penal clause?

I. To provide for liquidated damages.
II. To provide for additional damages, thus proof is needed.
III. To strengthen the coercive force of the obligation by the threat of greater
responsibility in the event of breach.
A. I only D. I and III
B. II only E. I, II and III
C. I and II
104. A penalty imposed by the agreement of the parties.

A. Legal C. Joint
B. Conventional D. Compensatory

105. D obliges himself to repaint the car of C and to finish it within a month, otherwise D is
going to pay C P5,000 as penalty. All of the following are the rights and obligation of
the parties, except;
A. D cannot just pay P5,000 and refuse to repaint the car of C, unless of course, if
there is an agreement giving him that option.
B. C cannot demand from D that the latter will repaint the car and at the same
time pay P5,000, unless agreed upon.
C. C can demand both specific performance and the payment of penalty since the
debtor is in bad faith in the performance of the obligation.
D. If C demanded fulfillment, but the performance became impossible due to D's
fault, C can ask the payment of penalty.
106. Consider the following statements:
I. The nullity of the principal obligation carries with it the nullity of the penal
clause.
II. The nullity of the principal obligation does not carry with it the nullity of the
penal clause.
III. The nullity of the penal clause carries with it the nullity of the principal
obligation.
IV. The nullity of the penal clause does not carry with it the nullity of the principal
obligation.
a. Statements l and III are true. c. Statements II and III are true.
b. Statements I and IV are true. d. Statements II and IV are true.
107. Statement 1: The court may reduce the penalty agreed by both parties if the
obligation is not complied.
Statement 2: The creditor cannot demand for both damages and penalty since the
latter takes place the imposition of the former, unless there is dolo in obtaining the
consent of the creditor.
108. A obliged himself to pay X P100, 000 in 30 days plus a penalty of P20, 000 if he fails
to pay the obligation in due time, A failed to pay the obligation in 30 days. X can
demand from A.
A. The principal of P100, 000 plus P20, 000 penalty
B. The principal of P100, 000 plus P20, 000 penalty, plus legal interest
C. The principal of P100, 000 plus legal interest
D. The principal of P100, 000 plus P20, 000 penalty, plus legal interest, plus
damages

PART 3: Extinguishment of Obligations

Payment or Performance
How payment must be made
109. consists in the delivery of a sum of money or a thing, or
doing a thing, or not doing something.
A. Payment C. Either A or B
B. Performance D. Both A and B.
110. In relation to payment or performance, which of the following statements are correct?
A. Payment of debts in money must be made in the currency which is legal tender
in the Philippines at all times.
B. In obligations to do or not to do, an act or forbearance can be substituted by
another act or forbearance against the obligee's will provided it is more
beneficial to the latter.
C. If the obligation is a monetary obligation, the payment must be in legal tender.
D. The debtor of a thing cannot compel the creditor to accept a different one
although the latter may be of the same value as, or more valuable than that
which is due.
111. How payment or performance is made?

I. If obligation is monetary, by delivery of the money in full.
II. If to do something, by the performance, of the same undertaking.
A. I only C. Both I and II
B. II only D. Neither I nor II
112. If the obligation is payable in foreign currency

a. the obligation is void.
b. the obligation is valid, but the stipulation is void.
c. the creditor can compel the debtor to pay in foreign currency as per agreement.
d. The stipulation and the obligation are void.
113. B borrowed from XYZ Bank P2,000,000.00 payable at the end of 5 years. Before
maturity, an extraordinary deflation supervened causing the value of the debt to rise
to P5,000,000.00 on the date of maturity. On due date, B must pay XYZ Bank
assuming there is a declaration of deflation by the proper persons in authority.
a. P 2,000,000.00. c. P 800,000.00.
b. P 5,000,000.00. d. P20,000,000.00.

114. Cecilia, the owner of a sarisari store, purchased several bags of "Dulcita" candy
worth P5,000.00 from Olga, an authorized dealer of the product. On due date,
Cecilia, who sells the candies at P1.00 each, tendered her payment to Olga
consisting of 5,000 pieces of P1.00 coins.
a. Olga may refuse to accept the payment and demand that she be paid in bills.
b. Olga may not refuse to accept the payment because what Cecilia was offering
as payment is money circulated in the Philippines.
c. Cecilia may consign the payment in court if Olga refuses to accept it.
d. The tender made by Cecilia was valid because the P1.00 coins came from her
sales and she had plenty of them.
115. One centavo, P0.05, P0.10, and P0.25 centavo coins are legal tender up to:
a. P100.00. c. P1,000.00.
b. P500.00. d. Any amount.

I. A check is not legal tender and, therefore, cannot constitute a valid
tender of payment.
II. When the obligee accepts the performance knowing its incompleteness or
irregularity, and without expressing any protest or objection, the obligation is
deemed fully complied with.
III. When the debt is in part liquidated (i.e., the amount is fixed) and in part
unliquidated, the creditor can still compel the debtor to pay the whole obligation
notwithstanding the fact some part is not yet finally determined.
A. B. C. D.
Statement I False False True True
Statement II True False True False
Statement III False False False False
117. D borrowed P10,000.00 from C. C gave D one year to pay provided D must not enter
a casino before he has paid the debt.
I. D cannot ask C that the "obligation not to enter a casino" be substituted with
"not to drink and smoke" during the term of the loan.
II. D can ask C that the "obligation not to enter a casino" be substituted with “not
to go to the moon today” during the term of the loan.

Who must make the payment

118. Payment must be made by the debtor who must possess the following:
I. Free disposal of the thing due means that the property delivered should not be
subject to any claim by, or encumbrances in favor of, third persons.
II. The debtor must not be incapable of giving consent.
B. II only D. Either I or II
119. Legal subrogation is presumed in the following. Which is not correct?

A. When a third person, not interested in the obligation, pays with the approval of
the creditor.
B. When a creditor pays another creditor who is preferred, even without the
debtor’s knowledge.
C. When a third person, not interested in the obligation, pays with the express or
tacit approval of the debtor.
D. When, even without the knowledge of the debtor, a person interested in the
fulfillment of the obligation pays, without prejudice to the effects of confusion as
to the latter’s share.
120. Rustom, a homosexual, rode in a bus plying the route Manila-Baguio inside the bus
he saw his former boyfriend, Masculado. Rustom paid for Masculado's bus fare
amounting to P390 against the will of Masculado. After a while, Rustom discovered
that Masculado was entitled to a 20% discount and he should have paid only 80% of
the fare, being a senior citizen. How much can Rustom recover from Masculado if he
decides to do so?
a. P390 c. P117
b. 312 d. None
121. Statement 1: Payment made to the creditor by the debtor after the debtor has been
judicially ordered to retain the debt shall not be valid.
Statement 2: The creditor is not bound to accept payment or performance by a third
person without exception.

122. If a third person pays an obligation. What are the rights, which are available to him if
he pays the obligation with the knowledge and consent of the debtor?
First Answer - He can recover from the debtor the entire amount, which he has paid.
Second Answer - He is subrogated to all of the rights of the creditor.
1st answer 2nd answer
a. True True
b. True False
c. False True
d. False False
123. D is indebted to C in the amount of P100,000.00. The debt is secured by a mortgage

of the lot of D and the guaranty by G. G, without informing D, paid the total amount
of the loan to C.
a. G cannot collect from D. He cannot also foreclose the mortgage.
b. G can collect from D. However, if D cannot pay, G cannot foreclose the
mortgage.
c. G can collect from D. If D cannot pay, G can foreclose the mortgage.
d. G cannot collect from D. However, G can foreclose the mortgage.
124. Donita owed Carmina P200,000.00. The loan is secured by a mortgage of Donita's
lot. After a month Donita paid P20,000.00. Without the knowledge of Donita, Teresa
paid, Carmina P200,000.00 believing that Donita still owed the amount of
P200,000.00.
a. Teresa can demand P200.000.00 from Donita, and if Donita cannot pay,
Teresa can foreclose the mortgage on the lot.
b. Teresa cannot claim reimbursement from Donita because she paid Carmina
without Donita's knowledge.
c. Teresa can demand P180,000.00 from Donita, and if Donita cannot pay,
Teresa cannot foreclose the mortgage on the lot.
d. Teresa can recover the amount of P200,000.00 from Carmina if Donita refuses
to reimburse Teresa.
125. The creditor is bound to accept the payments of the following third persons:
I. Guarantor III. Parents
II. Co-debtor IV. Assignee of right
A. I and II C. I, III and IV
B. I, II and III D. I, II and IV.

To whom payment must be made

126. Who are the persons to whom payment must be made (choose the exception)
A. Successor in interest.
B. Creditor.
C. Person authorized to receive payment.
D. Unauthorized 3rd person.
127. D obtained a loan of P10,000.00 from C who was in his right mind at the time he
granted the loan to D. On due date, D paid his loan obligation of P10,000.00 to C
who had since become insane. Of the total amount received, C lost P4,000.00 and
spent P6,000.00 for his food and other necessary expenses.
a. The obligation is totally extinguished because C received the payment in full.
b. The obligation is extinguished up to P4,000.00.
c. The obligation is extinguished up to P6,000.00.
d. No part of the obligation is extinguished because C was insane at the time he
received the payment.
128. Which of the following payment is (are) valid?

I. Payment to a person who is incapacitated to administer his property and he
has kept the thing delivered.
II. When the third person is in possession of the credit and payment was in good
faith.
III. Payment to an unauthorized third person and the creditor ratifies the payment
to the third person.
A. I and III C. I and II
B. II and III D. I, II and III
129. Evaluate which of the following examples is (are) correct?

I. M makes a note payable to bearer and delivers it to P. The note, however, is
lost by P and is picked up by A. A goes to M to collect on the note. M pays A
believing in good faith that A is the intended bearer. M is released from liability.
II. D is indebted to C P100,000. When D paid C, the latter is already of unsound
mind. Since C does not appreciate what he is doing, C deposited the P20,000
at Banco Fino, and gave the P80.000 as bonanza to his neighbors, the
obligation is totally extinguish, because the actions of C is beneficial to him.
B. II only D. Neither I nor II.

Where payment be made

130. Danica, a resident of Arlegui St., Quiapo, Manila, owes Cocoy a resident of Bulan,
Sorsogon, P20,000 and the contract fails to stipulate the place of payment. The
place of payment must be:
a. wherever they may see each other upon the maturity of the debt.
b. in Bulan, Sorsogon.
c. anywhere in Metro Manila.
d. in the domicile of Danica in Quiapo, Manila.
131. There being no express stipulation and if the undertaking is to deliver a determinate
thing the payment shall be made.
A. at the domicile of the debtor
B. at the domicile of the creditor
C. wherever the thing might be at the moment the obligation was constituted
D. whenever the thing might be at the moment the obligation is to be fulfilled
132. In relation to the proper place of payment, which of the following statements is (are)
true?
I. Stipulation made by the parties is the priority in determining the place of
payment.
II. If the obligation consists of giving a specific thing and there is no stipulation or
agreement as to place of payment, the place shall be the domicile of the
debtor.
Special Forms of Payment

133. Where a property is alienated to the creditor in satisfaction of a debt in money.
A. Dation in payment
B. Payment by cession
C. Application of payment
D. Consignation
134. D borrowed P50.000.00 from C. Not having sufficient cash to pay the debt, D
proposed to pay the debt by giving his diamond ring. C accepted the proposal and
received the ring.
a. D's obligation is extinguished by payment by cession.
b. D's obligation is extinguished by consignation.

c. D's obligation is extinguished by dacion en pago.

d. D's obligation is not extinguished at all because the payment should have been
in cash.
135. Three of these are characteristics of payment by cession. Which is the exception?
a. complete or partial insolvency.
b. more than one debt.
c. abandonement of all the debtor's properties except those exempt from
execution.
d. one debtor, one creditor.
136. Payment by cession as distinguished from dation in payment.

A. the debtor is not necessarily in a state of financial difficulty.
B. the effect is to release the debtor for the net proceeds of the things cede or
assigned.
C. the property is alienated by the debtor is merely a thing to be considered as the
equivalent of the performance of the obligation.
D. what is delivered by the debtor is merely a thing to be considered as the
equivalent of the performance of the obligation.
137. All of the following are requisite of valid application of payment, except?
A. Two or more debts of the same kind
B. All debts are due.
C. One debtor and one creditor.
D. Plurality of parties
138. Dioquino owes Clark the following debts.

Debt 1 - P10,000 payable January 1,2013
Debt 2 - 10,000 payable February 2, 2013
Debt 3 - 10,000 payable March 1, 2013
Debt 4 - 10,000 payable April 1,2013
Suppose Dioquino pays Clark P10,000 on February 1, 2013 without stipulating to
which debt his payment shall be applied. To which of the following debt can he have
his payment applied?
a. Debt 1 c. Debt 3
b. Debt 2 d. Debt 4

139. D owes C the following debts: P3,000.00 due on August 10; P3,000.00 due on
August 15; P3,000.00 due on August 20; and P3,000.00 due on August 25 which is
secured by a pledge of D's ring. If today is August 22, and D pays C P3,000.00 with
neither D nor C designating the debt to which the payment shall apply, the payment
shall be applied:
a. To the debt due on August 10, following the "first-due, first-pay" basis.
b. To the debts due on August 10, August 15, and August 20, proportionately at
P1,000.00 each.
c. To the debt due on August 25, since it is the most onerous to D.
d. To all the debts proportionately at P750.00 each.
140. D owes C P6.000.00 which is due on January 10, and another debt of P12,000.00
which is due on January 20. Both debts are unsecured and non-interest bearing and
are already due. D, however, has only P3,000.00 which he gives to C without
informing C as to which debt the payment shall apply. C also did not indicate on the
receipt he issued to D to which of the two debts the payment shall apply. In this
case:
a. The payment of P3,000.00 shall be applied to the debt due on January 10
because it was the first to become due.
b. The payment of P3,000.00 shall be applied to the debt due on January 20
because it is of a greater amount.
c. Payment cannot be applied to either of the two debts because it is incomplete.
d. The payment of P3,000.00 shall be applied proportionately in the amount of
P1,000.00 to the debt due on January 10, and P2,000.00 to the debt due on
January 20.
141. In which of the following is consignation alone without prior tender of payment not
valid to extinguish the obligation?
A. when two or more persons claim the same right to collect;
B. when the title of the obligation has been lost;
C. when with just cause, the creditor refuses to issue a receipt;
D. when he is incapacitated to receive the payment at the time it is due.
142. Consignation alone without any tender of payment is sufficient in the following cases,
except:
a. when the creditor is absent or unknown or does not appear at the place of
payment.
b. when without just cause, the creditor refuses to give a receipt. :

c. when the creditor presents the title to the obligation for collection.
d. when two or more persons claim the same right to collect.
143. Lafuente is a lessee of Oberon's building. Under the lease contract, Lafuente must
pay the monthly rental of P10,000.00 to Oberon at Oberon's office within the first 5
days of the month in advance. On the sixth month of the lease, Lafuente went to
Oberon's office to pay the rental but he was told by Elcano, an employee of Oberon,
that Oberon was confined at the hospital. Elcano told Lafuente that he could entrust
the payment to him. Santiago, a son of Oberon, who happened to be around,
however, demanded that Lafuente must pay to him claiming that as Oberon's son,
he was the one authorized to receive the payment. Given the situation where you
do not know to whom you will give your payment, which of the following modes of
payment would you avail yourself of if you were Lafuente?
a. Dacion en pago c. Consignation
b. Payment by cession d. Application of payment
144. D is indebted to C for P52,000.00. On due date, D tendered payment amounting to

P52,000.00 which consisted of the following: 47 pieces of P1,000.00 bills for a total
of P47,000.00; and 250 pieces of P20.00 bills for a total of P5,000.00. C refused to
accept the payment and demanded that D make his payment all in P1,000 bills
since, according to him, the P20.00 bills were too bulky and inconvenient for him to
carry.
a. D may consign the payment since the refusal by C to accept the payment was
not justified.
b. C's reason for refusing to accept the payment was justified. Hence, D cannot
consign the payment.
c. D cannot compel C to accept the payment he was offering because a debtor
must make his payment according to the wishes of his creditor.
d. D may make his payment in check and compel C to accept the payment since
this form is the most convenient for C.

I. Tender of payment is the antecedent act, the preparatory act to extinguish the
obligation
II At all times, it is a requisite for the consignation to be valid that there is a
previous tender of payment.
III. Tender of payment without consignation shall not extinguish the obligation at all
times.

A. B. C. D.
146. Consignation alone shall give rise to the extinguishment of an obligation, EXCEPT:
a. When the creditor is absent or unknown, or does not appear at the place of
payment.
b. When he is incapacitated to receive the payment at the time it is due.
c. When two or more persons claim the same right to collect.
d. When the title of the obligation has been lost.
e. None of the above
147. Statement 1: The expenses of consignation, when properly made, shall be charged
against the creditor.
Statement 2: Declaration by the court that proper consignation has been made or
acceptance by the creditor is not necessary to complete the consignation.
Statement 3: After the creditor has accepted the consignation, the debtor loses his
right of preference over his deposit and he can no longer withdraw his deposit unless
the creditor gives his consent.
Which of the above statements is correct?
a. Statements 1 and 2 c. Statements 2 and 3
b. Statements 2 and 3 d. Statement 1 only
148. In the following cases, consignation alone without tender of payment will extinguish
the obligation, except:
A. When, without just cause, the creditor refuses to give a receipt.
B. When the creditor is absent or unknown, or does not appear at the place of
payment.
C. When the title of the obligation has been lost.
D. When the creditor is capacitated to receive payment at the time it is due.
Loss of the Thing Due

149. There is loss of the thing due when
I. The generic thing perishes.
II. Specific thing goes out of commerce.
III. The delimited generic thing was lost due to hurriance beyond debtor’s control.

A. I and II C. I and III

B. II and III D. II only
150. D is obliged to deliver a specific horse to C for entry in the derby. The day before the
agreed date of delivery, the horse broke its right front leg. While it could still walk, it
could no longer run.
a. The obligation to deliver the horse is not extinguished since only one leg of the
horse was injured.
b. The obligation is extinguished because the injury to the right front leg of the
horse is a partial loss that is so important in relation to obligation.
c. The obligation to deliver the horse is not extinguished because the horse could
still walk.
d. The obligation of D is not extinguished because he can get a horse from other
sources.
151. Statement 1: If the thing proceeds from a criminal offense, the loss of such thing
shall not extinguish the obligation unless the creditor is in default.
Statement 2: The partial loss of the thing is considered as a total loss, when the loss
is so material and the remaining portion of the object is insignificant or immaterial.
152. Amazed by the skill of X who can paint portraits using brushes inserted in his right
armpit, Y entered unto a contract with the former to have his own portrait done and
P50,000 as full payment therefore. After he has started the portrait but before its
completion, X was sideswipe speeding car while he was drunk and walking beside
the way causing the doctors to have his right arm amputated this case what is the
remedy of Y?
a. Nothing, as the service became impossible by reason of an act independent of
the will of the debtor.
b. Equivalent performance in terms of damages
c. Specific performance by compelling X to go on painting Y's portrait.
d. Substitute performance by allowing a third person to do his portrait with
expenses therefore charged to X.

153. D is obliged to give a specific carabao to C. X steals the carabao and slaughters it.
Determine which of the following statements is incorrect.
A. D's obligation is extinguished.
B. C has a right to proceed against X
C. If subsequently the carabao was struck by lightning in the possession of X, the
obligation of X subsists.
D. Assignment of the right by D to C is not required since it is the law that gives C
the right.
Condonation or Remission
156. In order that condonation may extinguish an obligation involving a movable property
whose value exceeds P5,000.00 -
a. It is sufficient that the condonation and acceptance are in writing, even a
private one.
b. It is required that the condonation and acceptance must be in a public
instrument.
c. The delivery of the document evidencing; the debt is sufficient since the
property is movable.
d. The condonation and acceptance may be made orally.
157. A owes B a sum of money and secured by a pledge on his car. Later, the car is
found in the possession of A.
A. it is presumed the debt of A has been condoned;
B. it is presumed both the debt and pledge has been remitted;
C. it is presumed the debt is extinguished;
D. it is presumed the pledge is condoned.
158. Essential requisites of remission.

I. The cause or consideration is generosity.
II. Obligation is demandable at the time of remission.
III. There must be an agreement.
A. I and II C. I and III
B. II and III D. I, II and III

159. I. Condonation or remission is essentially gratuitous, and requires the acceptance

by the obligor. It may be made expressly or impliedly.
II. One and the other kind shall be subject to the rules which govern inofficious
donations. Express condonation shall, furthermore, comply with the forms of
donations.
A. True; True C. True; False
B. False; True D. False; False
160. Statement 1: The private document is presumed to have been delivered voluntarily
by the creditor to the debtor (so as to remit the obligation) unless the contrary is
proved.
Statement 2: The presumption still applies if the document is a public document
which is easily available being a public record.
Confusion or Merger
161. M owes P P10,000.00. The obligation is evidenced by a promissory note.
Subsequently, P assigned the note to A, A to B, B to C, and C back to M. The
obligation of M is extinguished by:
a. compensation.
b. confusion.
c. condonation.
d. The obligation is not extinguished because there was no payment.
162. A owes B P1M guaranteed by C. B assigns his credit to X. X assigns his credit to Y
assigns his credit to C, the guarantor. Does A still have to pay C?
A. No, because the guarantor is liable to the creditor B and not to debtor A.
B. Yes, because the guarantor has now become the creditor;
C. No, because it is the obligation of the guarantor pay the creditor for the benefit
of the debtor;
D. Yes, because the guarantee has been extinguished by confusion or
merger of rights.
163. The meeting in one person of the qualities of creditor and debtor with respect to the
same obligation.
A. Confusion C. Novation
B. Compensation D. Condonation

164. Evaluate the following statements in relation to merger:

I. Merger in a joint obligation extinguishes only the share of the joint debtor or
creditor in whom the characters of debtor and creditor concur.
II. Merger in one of the solidary debtors or solidary creditors extinguishes the
whole obligation.
Which of the statement above is false?
Compensation
165. I. Compensation is the extinguishment to the concurrent amount of the debts of
two persons who, in their own rights are debtors and creditors of each other.
II. Compensation is sometimes called abbreviated or simplified payment, because
the two debts are extinguished without the transfer of money or property from
one party to the other.
Which of the above statement is incorrect?
166. In order for legal compensation to take place, two of the requisites are: that each one
of the obligors be bound principally, and that he be at the same time a principal
creditor of the other, and that the two debts must be due. In addition, the following
requisites must be present, except:
a. That both debts consist of a sum of money or if the things due are consumable,
that they be of the same kind and also of the same quality if the latter has been
stated.
b. That both debts be liquidated and demandable.
c. That the debts must have the same amount.
d. That over neither of them there should be any retention or controversy
commenced by third persons and communicated in due time to the debtor.
167. A owes B P1M due on Feb. 3, 2001. B owes A a lancer GSR worth P1M due on Feb.
4, 2001.
A. On Feb. 3, 2001, A cannot claim compensation because one of the debts
is not yet due;
B. On Feb. 4, 2011, A can claim compensation because both debts are now due;

C. The parties can agree on compensation only on Feb. 4, 2001 when both debts
are due;
D. Legal compensation cannot take place.

I. In compensation, the mode may take place by operation of law; while in
payment, it involves action or delivery of the amount paid.
II. Conventional compensation is compensation ordered by the court.
III. In compensation, there must be two persons involved; while in confusion, there
can be only one person.
A. B. C. D.
Statement III False False False True
169. D owes C P10, 000 on December 25. Later, D forced C to sign a promissory note for
P10, 000 payable on December 25. If all the other requisites of compensation are
present, are both debts extinguished?
A. yes, under the legal compensation
B. no, B’s consent was obtained by force
C. yes, with approval of the court
D. not given
170. D is obliged to pay C P10,000.00 on or before June 30. C is obliged to pay D

P10,000.00 on June 15. Who may claim compensation on June 15?
a. D only. c. Either D or C.
b. C only. d. Neither D nor C.
171. D obtained a loan of P30,000.00 from C with G as guarantor. C, on the other hand,
owes G P30,000.00. Both debts are due.
I. If C sues D, D may successfully put up the defense of compensation because
C owes G, D's guarantor.
II. If C sues D, D may not put up the defense of compensation as to what
C owes G.
III. If D cannot pay and C sues G, G can put up compensation because C owes
him P30,000.00.
IV. Both D's debt to C and C's debt to G are extinguished by legal compensation.

In your evaluation of the foregoing statements:

a. I and III are true. c. I and IV are true.
b. II and IV are true. d. II and III are true.
172. D owes C P20,000.00 due on June 20. C owes D P14,000.00 due on June 15. On
June 12, C assigned his right to X. D consented to such assignment without any
reservation of his right to the compensation. On June 20, X may collect from D:
a. P20,000.00. c. P14,000.00.
b. P 6,000.00. d. Nothing.
173. D made a promise to give a ring to C. Before D could deliver a ring to C, C borrowed
D's ring. After a week, D demanded the return of the ring that he had lent to C. C
refused to return the ring claiming that there was compensation between his
obligation to return the ring of D and D's obligation to give him a ring. Based on the
foregoing facts, which of the following statements is incorrect?
a. C is entitled to claim compensation.
b. C is not entitled to claim compensation.
c. D may oppose the compensation being claimed by C.
d. Only D may claim the compensation should C demand the delivery of a ring
from him (D).
Novation
174. Determine which of the following is not a requisite in order for a novation to take
place
A. There must be a valid previous obligation.
B. The change must be in connection to the object, cause or principal conditions.
C. There must be a new obligation even though not valid.
D. None from the above.
175. The purpose of novation includes the following:

I. Extinguishment of old obligation
II. Creation of new obligation
III. Determination of which party has the advantage of the changes.
A. I and II C. II and III
B. I and III D. I, II and III

176. A owes B P1M. A proposed to B that C will pay A’s debt and that he will be released
from all liabilities to him. B and C agreed to the proposal. Later, when B tried to
collect from C, he found out that he was insolvent.
A. A is no longer liable to B because of the substitution of C in his place if he had
no knowledge of the insolvency despite it being of public knowledge;
B. A is no longer liable to B even if he had knowledge of C’s insolvency provided it
is not of public knowledge;
C. A is still liable to B because he was the one who proposed to B that C shall
substitute him as debtor.
D. A is no longer liable to B despite the insolvency of C unless said was of public
knowledge or known to him when he delegated the debt.
177. D obliged himself to give 5 grams of "shabu" to C. Later, the parties agreed that D
would instead give to C 5 sacks of rice. Which of the following statements is correct?
a. The novation is void because the original obligation is void. Hence, C cannot
demand the delivery of 5 sacks of rice from D.
b. The novation is valid because the new obligation is valid. Hence, C can
demand the delivery of 5 sacks of rice from D.
c. The original obligation although void is validated by the new obligation. Hence,
C can demand the delivery of 5 sacks of rice from D.
d. The new obligation is only voidable because D had not yet performed the
original obligation at the time of the novation. Accordingly, the new obligation is
binding and C may demand the delivery of 5 sacks of rice from D until the
new obligation is annulled by a proper action in court.
178. On April 1, 2017, D and C entered into a contract whereby D would construct a 3-
storey building for C on a certain lot. On June 15, 2017, however, D and C entered
into a contract whereby D agreed to construct a bungalow on the lot but without the
parties expressly stipulating that D would no longer construct a 3-storey building.
Determine the incorrect statement below:
I. The parties are deemed to have impliedly novated the first contract because
construction of the two structures on the same lot would not be possible.
II. There is no novation since the task are considered to be compatible.

179. D owes C P50,000.00. Subsequently, D proposed to C that T will assume his (D's)
debt. C accepted the proposal of D. This type of novation which involves the
substitution of the debtor is known as:
a. Delegacion. c. Objective novation.
b. Expromision. d. Subrogation.
180. In relation to novation, determine whether the following statement is true or false:
I. The novation is void if the original obligation is void.
II. When the principal obligation is extinguished in consequence of a novation,
accessory obligations shall also be extinguished when the accessory obligation
was established for the benefit of third persons who did not give their consent.
III. If the new obligation is void, the novation is void but the original one is still
extinguished.
A. B. C. D.

ANSWER KEY:
Theory
1. 31. 61. 91. 121. 151.
2. 32. 62. 92. 122. 152.
3. 33. 63. 93. 123. 153.
4. 34. 64. 94. 124. 154.
5. 35. 65. 95. 125. 155.
6. 36. 66. 96. 126. 156.
7. 37. 67. 97. 127. 157.
8. 38. 68. 98. 128. 158.
9. 39. 69. 99. 129. 159.
10. 40. 70. 100. 130. 160.
11. 41. 71. 101. 131. 161.
12. 42. 72. 102. 132. 162.
13. 43. 73. 103. 133. 163.
14. 44. 74. 104. 134. 164.
15. 45. 75. 105. 135. 165.
16. 46. 76. 106. 136. 166.
17. 47. 77. 107. 137. 167.
18. 48. 78. 108. 138. 168.
19. 49. 79. 109. 139. 169.
20. 50. 80. 110. 140. 170.
21. 51. 81. 111. 141. 171.
22. 52. 82. 112. 142. 172.
23. 53. 83. 113. 143. 173.
24. 54. 84. 114. 144. 174.
25. 55. 85. 115. 145. 175.
26. 56. 86. 116. 146. 176.
27. 57. 57. 117. 147. 177.
28. 58. 88. 118. 148. 178.
29. 59. 89. 119. 149. 179.
30. 60. 90. 120. 150. 180.

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UNIVERSAL COLLEGE OF PARAÑAQUE

COLLEGE OF BUSINESS & ACCOUNTANCY

REGULATORY FRAMEWORK FOR

5. Determine which of the following is not an essential requisite for an obligation to

EXERCISE QUESTIONS Page 2

7. Statement 1: Prestation is the subject matter to be observed in the performance of

9. A judicial relation known as Negotiorum Gestio takes place.

11. The principle of negotiorum gestio does not apply:

EXERCISE QUESTIONS Page 3

PART 2: Nature and Effect of Obligations

EXERCISE QUESTIONS Page 4

17. Which of the following is not a generic obligation?

Obligations of one obliged to give a thing

EXERCISE QUESTIONS Page 5

Grounds for liability to pay damages

EXERCISE QUESTIONS Page 6

32. Statement 1. Waiver of future fraud is null and void.

EXERCISE QUESTIONS Page 7

34. It is the wrong or negligence in the commission of a crime

35. Statement 1: In culpa contractual, there is a pre-existing contractual relation between

EXERCISE QUESTIONS Page 8

41. These statements are presented to you:

EXERCISE QUESTIONS Page 9

Remedies of the creditors

Which of the foregoing remedies may be availed of by C?

EXERCISE QUESTIONS Page 10

Rules on Transmissibility of Rights

49. Statement 1: All rights are transmissible without exception.

EXERCISE QUESTIONS Page 11

Rules on receipt of later instalment or interest without reservation

EXERCISE QUESTIONS Page 12

A. Only the first statement is true. C. Both statements are true.

PART 3: Types of Obligations

Obligation with condition

58. Statement 1: In an obligation with a suspensive condition, the demandability of the

EXERCISE QUESTIONS Page 13

60. One of the following is a valid obligation. Which is it?

61. The following statements are presented to you for evaluation.

63. On July 1, 2015, D obliged himself to give C P50.000.00 if C will marry X on or

64. Refer to No. 63. Which of the following statements is incorrect?

EXERCISE QUESTIONS Page 14

date and C has not yet married X.

67. Rules in case of deterioration, loss and improvement:

EXERCISE QUESTIONS Page 15

EXERCISE QUESTIONS Page 16

75. Statement 1: One characteristic of a period as distinguish from a condition is the

EXERCISE QUESTIONS Page 17

EXERCISE QUESTIONS Page 18

81. In facultative obligation the right of choice belongs to:

84. Evaluate whether the following statements are true or false:

EXERCISE QUESTIONS Page 19

Joint and Solidary Obligation

86. This is solidarity on the part of debtors

EXERCISE QUESTIONS Page 20

92. A, B and C are solidary debtors of X in the amount of P30,000.00. If A is insolvent,

EXERCISE QUESTIONS Page 21

96. A is indebted to X, Y and Z, solidary creditors, for P24,000.00. Suppose X makes a

Divisible and Indivisible Obligation