LAW 121 MIDTERM-QUESTIONS

1. X, offerd a parcel of land to V.V visited the property and, except for the presence of squatters in the
area, he liked the place. Later, X called on V with a proposal that should he advance the amount of
P50,000 which could be used in taking up an ejectment case against the squatters, X would agree to
sell the property for a low price. V expressed his concurrence. Thereafter, a contract, denominated
“Deed of Conditional Sale,” was executed between them. A few months laterm judgment was
reendered ordering the squatters to vacate the premises. The decision was handed down beyond the
60-day period stipulated in the contract. A few days later, X, prompted by V’s continued refusal to
accept the return of the P50,000 advance payment, filed for rescission of the deed of “conditional”
sale. Is X’s action for rescission justified?
a. No, because it is X who has failed in her obligation under the contract, V did not breach the
agreement.
b. Yes, because V refused the return of the P50,000 advance payment.
c. No, because the contract is conditional sale and not absolute sale. Moreover, X’s failure “to
remove the squatters from the property” within the stipulated period gives V the right to either
refuse to proceed with the agreement.
d. Yes, because V failed to pay the balance of the contract
2. The remedy of requiring exact performance of a contract in the specific form in which it was made, or
according to the precise terms agreed upon.
a. Resolution
b. Specific performance
c. Rescission
d. Fulfillment
3. The conditioned shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
a. Doctrine of constructive fulfillment of suspensive condition
b. Doctrine of implied performance
c. Doctrine of express performance
d. Doctrine of constructive extinguishment of obligation.
4. The following are requisites of the doctrine of constructive fulfillment of suspensive condition, except:
a. The condition is suspensive.
b. The condition is resolutory.
c. The debtor actually prevents the fulfillment of the condition.
d. The debtor acts voluntarily or willfully.
5. A thing is lost when it, except:
a. Perishes.
b. Goes out of commerce.
c. Disappears in such a way that its existence is unknown or it cannot be recovered.
d. Deteriorates.
6. It gives a right to enjoy the property of another with the obligation of preserving its form and
substance, unless the title constituting it or the law otherwise provides.
a. Lease
b. Antichresis
c. Usufruct
d. Commodatum
7. A person who has the right to the benefits of another’s property.
a. Lessor
b. Antichretic creditor
c. Usufructuary
d. Bailor
8. I.When the conditions have for their purpose the extinguishment of an obligation to give, the parties,
upon the fulfillment of said conditions, shall return to each other what they have received.
II.The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
9. It has the effect of “unmaking a contract, or its undoing from the beginning and not merely its
termination.”
a. Rescission
 b. Specific performance
c. Annulment
d. Void
10. Are those which arise from the same cause, wherein each party is a debtor and a creditor of the other,
such that the performance of one is conditioned upon the simultaneous fulfillment of the other?
a. Unilateral obligation
b. Reciprocal obligation
c. Real obligation
d. Personal obligation
11. I. Rescission is allowed only where the breach is substantial and fundamental to the fulfillment of the
obligation. II.The right to
rescind may be waived expressly only.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
12. It means bringing the parties back to their original status prior to the inception of the contract.
a. Mutual rescission
b. Mutual annulment
c. Mutual restitution
d. Mutual ratification
13. I. The rescission has the effect of abrogating the contract in some parts.
II.When a decree for rescission is handed down, it is the duty of the court to require both parties to
surrender that which they have respectively receive and to place each other as far as practicable in his
original situation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

14. I.The power to rescind obligations is implied in reciprocal ones in case one of the obligors should not
comply with what is incumbent upon him. II.It is
settled that, in the absence of a stipulation to the contrary, power to rescind obligations must be
invoked judicially.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
15. Is an interval of time, which, exerting an influence on an obligation as a consequence of a juridicial act,
either suspends its demandability or produces its extinguishment?
a. Period
b. Condition
c. Demand
d. Delay
16. I.A condition has for its requisites futurity and certainty. II.A
term or period has for its requisites futurity and uncertainty.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
17. I.Condition may or may not happen.
II.A term or period will surely come to pass, although it may not be known when.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
18. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day
comes.
a. Resolutory period
b. In diem
c. Ex die
 d. Suspensive condition
19. Obligation which take effect at once, but terminate upon arrival of the day certain.
a. Suspensive period
b. Id diem
c. Ex die
d. Resolutory condition
20. The court is not authorized to fix a period. The following are the exceptions, except:
a. If the obligation does not fix a period, but from its nature and circumstances it can be inferred
that a period was intended.
b. If the period depends upon the will of the creditor.
c. If under the circumstances the parties have contemplated a period.
d. When the debtor binds himself to pay when his means permit him to do so.
21. The debtor loses the right to make use of period in the following instances, except:
a. When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debt.
b. When the debtor furnishe the creditor the guaranties or securities
c. When the debtor violates any undertaking in consideration of which the creditor agreed to the
period.
d. When the debtor attempts to abscond.
22. A owes B P150,000 due on June 30,2018. A executed a mortgaged in favor of B on A’s building. On
June 10, 2018, the mortgaged building was totally lost due to an earthquake. On June 12,2018, B
demanded payment fram A. Is B’s demand valid?
a. No. The obligation is one with a definite period, thus the creditor cannot demand fulfillment of
the obligation before it due.
b. No. The mortgage was extinguished because the object of the contract was lost through a
fortuitous event.
c. Yes. The debt becomes due at once because the object of the mortgaged was lost.
d. Yes. The debts becomes due at once because the period’s benifits is given solely to the creditor
thereby giving the creditor the right to demand performance even before the due date.
23. An obligation where there is only one object.
a. Simple obligation
b. Conjunctive obligation
c. Compound obligation
d. Distributive obligation
24. An obligation where there are two or more objects.
a. Simple obligation
b. Compound obligation
c. Conjunctive obligation
d. Distributive obligation
25. An obligation where there are two or more objects and all of them are due.
a. Simple obligation
b. Conjunction obligation
c. Compound obligation
d. Distributive obligation
26. An obligation where all of the objects must be performed to extinguish the obligation.
a. Simple obligation
b. Conjunctive obligation
c. Compound obligation
d. Distributive obligation
27. An obligation where one, two or more of the objects are due. One of the objects must be performed to
extinguish the obligation.
a. Alternative obligation
b. Facultative obligation
c. Compound obligation
d. Distributive obligation

28. An obligation where two or more objects are due but the performance of one is sufficient.
a. Alternative obligation
b. Facultative obligation
c. Compound obligation
d. Distributive obligation
29. An obligation where only one object is duew but the debtor may substitute another object.
a. Alternative obligation
b. Facultative obligation
c. Compound obligation
d. Distributive obligation
30. D is obliged to give C a specific ring. The parties agreed that D may give specific bracelet as a
substitute. Which of the following is true?
a. If the ring is lost through a fortuitous event before substuition, the obligation is extinguished.
b. If the bracelet is lost through a fortuitous event before the substitution, the obligation is
extinguished.
c. If the ring is lost through a fortuitous event after substitution, the obligation is extinguished.
d. If the ring is lost through the debtor’s fault after substitution, the debtor shall pay damages.
31. I.A person alternatively bound by different prestations shall completely perform both of them. II. The
creditor cannot be compelled to receive part of one and part of the other undertaking.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
32. I.In alternative obligation, the right of choice belongs to the creditor, unless it has been expressly
granted to the debtor. II.The debtor
shall have no right to choose those prestations which are impossible, unlawful or which could not have
been the object of the obligation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
33. I.In alternative obligations, when the choice has been expressly given to the creditor, the obligation
shall cease to be alternative from the day when the selection has been communicated to the debtor.
II.The debtor shall lose the right of choice when among the prestation whereby he is alternatively
bound, only one is practicable.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
34. D 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.
35. An obligation where only one prestation has been agreed upon, but the obligor may rander another in
substitution.
a. Alternative obligation
b. Facultive obligation
c. Compound obligation
d. Distributive obligation
36. I. Alternative obligations may be complied with by the delivery of one of the objects or by the
performance of one of the prestations which are alternatively due.
II.Facultative obligations may be complied with the delivery of another object or the performance of
another prestation in substitution of that which is due.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
37. I. In alternative obligations, the right of choice may pertain even to the creditor. II.In
facultative obligations, the right of choice pertains only to the creditor.
a. Only I is true
 b. Only II is true
c. Both are true
d. Both are false
38. I. In alternative obligations, the loss or impossibility of all of the objects or prestations which are due
without any fault of the debtor is necessary to extinguish the obligation. II.In
facultative obligations, loss or impossibility of the object or prestation which is due without the fault of
the debtor is sufficient to extinguish the obligations.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
39. I.In alternative obligation, the impossibility of all the objects due without the fault of the debtor
extinguishes the obligation. II.In
facultative obligations, the culpable loss of the object which the debtor may deliver in substitution
before the substitution is effected does not give rise to any liability on the part of such debtor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
40. I. In alternative obligations, the nullity of one the objects does not invalidate the obligation which is
still in force with respect to those which have no defect. II.In
facultative obligations, the nullity of the principal object invalidates the obligation, even if the
substitute object is valid.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
41. I.Generally, payment to an incapacitated person is valid.
II. Payment to a person who is incapacitated to administer his property shall be valid if he has kept the
thing delivered, or insofar as the payment has been beneficial to him.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
42. Payment made to a third person shall alse be valid insofar as it has redounded to the benefit ot the
creditor. Such benefit to the creditor nee not be proved in the following cases, except:
a. Subrogation
b. Ratification
c. Waiver
d. Estoppel
43. I.It is a general rule that payment to an unauthorized person is not valid.
II.Payment made in good faith to any person in possession of the credit shall release the debtor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
44. It is when a property is alienated to the creditor in satisfaction of a debt in money.
a. Dation in payment
b. Cession in payment
c. Barter
d. Option contract
45. I.In dacion en pago, the debtor offers another thing to the creditor who accepts it as an equivalent of
payment of an outstanding debt. II.It is an
objective novation of the obligation, hence, common consent of the parties is required in order to
extinguish the obligation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
46. The requisites for dacion en pago are, except:
 a. There must be a performance of the prestation in lieu of payment which may consist in the
delivery of a corporeal thing or a real right or a credit against the third person.
b. There must be delivery, actual or constructive, as it is a real contract.
c. There must be some difference between the prestation due and that which is given in
substitution.
d. There must be an agreement between the creditor and debtor that the obligation is
immediately extinguished by reason of the performance of a prestation different from that
due.
47. For dacion en pago to exist, the following elements must concur, except:
a. Existence of a money obligation.
b. The alienation to the creditor of a property by the debtor with the consent of the former.
c. The agreement must be in a document, private or public.
d. Satisfaction of the money obligation of the debtor.
48. I.Dacion en pago is a special mode of payment whereby the debtor offers another thing to the creditor
who accepts it as equivalent of payment of an outstanding obligation. II. The
undertaking is really one of sale, that is, the creditor is really buying the thing or property of the
debtor, payment for which is to be charged against the debtor’s debt.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
49. I.Dacion en pago is a special mode of payment whereby the debtor offers another thing to the creditor
who accepts it as equivalent of payment of an outstanding obligation. II.It is
only when the thing offered as an equivalent is accepted by the creditor that novation takes place,
thereby, totally extinguishing the debt.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
50. I.Dacion en pago is the delivery and transmission of ownership of another thing by the debtor to the
creditor as an accepted equivalent of performance of an obligation.
II.Dacion en pago partakes of the nature of a contract of sale, where the thing offered by the debtor is
the object of the contract, while the debt is the consideration or purchase price.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
51. I. A debt shall not be understood to have been paid unless the thing or service in which the obligation
consists has been completely delivered or rendered. II.The
extrajudicial expenses required by the payment shall be for the account of the creditor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
52. Partial payments are allowed in the following cases:
I.When there is an express stipulation to that effect.
II.When the debt is in part liquidated and in part unliquidated.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
53. When the amount is known or is determinable by inspection of the of the terms and conditions of the
relevant promissory notes and related documentation.
a. Debt is due
b. Debt is liquidated
c. Debt is unliquidated
d. Debt is demandable
54. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents
shall not produce the effect of payment, except:
I.When they have been cashed.
II.When through the fault of the creditor they have been impaired.
 a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
55. I.As a general rule, a check constitutes legal tender, but a creditor may validly refuse it.
II.A check does not constitute legal tender but it does not prevent a creditor from accepting a check as
payment.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
56. The sharp increase of money or credit, or both, without a corresponding increase in business
transaction.
a. Deflation
b. Extraordinary deflation
c. Extraordinary infation
d. Inflation
57. For extraordinary inflation (or deflation) to affect an obligation, the following requisites must be
proven, except:
a. That there was an official declaration of extraordinary inflation or deflation from the Bangko
Sentral ng Pilipinas (BSP).
b. That the obligation was contractual in nature.
c. That the parties expressly agreed to consider the effects of the extraordinary inflation or
deflation.
d. That the obligation was not contractual in nature.
58. I.In case of extraordinary inflation or deflation, the value of the currency at the time of the
establishment of the obligation shall be the basis for the payment when no agreement to the contrary
is stipulated, has strict application only to contractual obligations. II.
A contractual agreement is not needed for the effects of extraordinary inflation to be taken into
account to alter the value of the currency.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
59. I.As a general rule, payment shall be made in the place of business of the debtor.
II.There being no express stipulation and if the undertaking is to deliver a determinate thing, the
payment shall be made wherever the thing might be at the moment the obligation was constituted.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
60. These are the rules on the place of payment of the obligation, except:
a. Payment shall be made in the place stipulated by the parties.
b. It there is no stipulation and the obligation is to deliver a determinate thing, payment shall be
made wherever the thing might be at the moment the obligation was constituted.
c. In any other case the place of payment shall be the domicile of the debtor.
d. In any other case the place of payment shall be at the municipal trial court where the obligation
was perfected.
61. The designation of the debt to which the payment must be applied when the debtor has several
obligation of the same kind in favor of the same creditor.
a. Application of payment
b. Dacion en pago
c. Cession in payment
d. Tender of payment and consignation
62. The following are special forms of payment, except:
a. Application of payment
b. Dation in payment
c. Check encashment
d. Payment by cession
63. The following are requisites of application of payment, except:
a. There must be only one debtor and only one creditor.
 b. There must be one or more debts of the same kind.
c. All of the debts must be due.
d. The amount paid by the debtor must not be sufficient to cover the total amount of all the
debts.
64. The rules on application of payment are the following, except:
a. The right to designate the debt to which the payment shall be applied belongs primarily to the
debtor.
b. If the debtor does not apply payment, the creditor may designate which debt is paid by
specifying in the receipt
c. If the creditor did not apply or if application is void, the debt which is most onerous to the
creditor, among those due, shall be deemed to have been satisfied.
d. If the debts due are of the same nature and burden, the payment shall be applied to all of them
proportionately.
65. I.The debtor’s right to apply payment is mandatory.
II. The debtor’s right to apply payment cannot be waived.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
66. I.In case the debtor does not make the application of payment nor the creditor does not also state in
which application of payment is made, then application is made by operation of law. II.If the
debts due are of the same nature and burden, meaning there is no debt which is most onerous, the
payment shall be applied to all of them proportionately.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
67. A special form of payment whereby the debtor abandons all of his property for the benefit of his
creditors in order that from the proceeds thereof the latter may obtain payment of their credits.
a. Application of payment.
b. Payment by cession
c. Dation in payment
d. Tender of paymend and consignation
68. The following are requisites of payment by cession, except:
a. There must be two or more creditors.
b. The debtor must be partially or relatively insolvent.
c. The solvency of the debto is immaterial.
d. There must be an acceptance of the cession by the creditors.
69. I.In payment by cession the debtor is not necessarily in a state of financial difficulty.
II.In dacion en pago the debtor is in a state of partial or relative insolvency.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
70. I. In dacion en pago, what is delivered by the debtor is merely a thing to be considered as the
equivalent of the performance of the obligation.
II. In payment by cession, what is ceded by the debtor is the universality of all his property.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
71. It is the definitive act of offering the creditor what is due him or her together with the demand that
the creditor accepts the same.
a. Consignation
b. Payment by cession
c. Dation in payment
d. Tender of payment
72. The thing due is deposited and placed at the disposal of the judicial authorities for the creditor to
collect.
a. Consignation
b. Payment by cession
 c. Dation in payment
d. Tender of payment
73. Is the act of depositing the thing due with the court or judicial authorities whenever the creditor
cannot accept or refuses to accept payment, and it generally requires a prior tender of payment?
a. Payment by cession
b. Dation in payment
c. Consignation
d. Tender of payment
74. I.Tender is the antecedent of consignation, that is, an act preparatory to the consignation, which is the
principal, and from which are derived the immediate consequences which the debtor desires or seeks
to obtain. II. Tender of
payment may be judicial, while consignation is necessarily extrajudicial, and the priority of the first is
the attempt to make a private settlement before proceeding to the solemnities of consignation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
75. One of the following is not a requisite of consignation.
a. There was a debt due.
b. Previous notice of the consignation had been given to the person interested in the performance
of the obligation.
c. The amount due was placed at the disposal of the court.
d. After the consignation had been made, the person interested may not be notified of the action.
76. I.The codal provision of the Civil Code dealing with consignation should be accorded a mandatory
construction. II.There
should be notice to the creditor prior and after consignation as required by the Civil Code.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
77. I.The rationale for consignation is to avoid the performance of an obligation becoming more onerous
to the debtor by reason of causes not imputable to him. II.Tender
is the antecedent of consignation, that is, an act preparatory to the consignation, which is the
principal, and from which are derived the immediate consequences which the debtor desires or seeks
to obtain.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
78. I.Without the notice first announced to the persons interested in the fulfillment of the obligation, the
consignation as a payment is voidable. II.The fact
that in previous years’ payment in check was accepted does not place its creditor in estoppel from
requiring the debtor to pay his obligation
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
79. I.Payment in check by the debtor may be acceptable as valid, if no prompt objection to said payment is
made. II.If,
the consignation having been made, the creditor should authorize the debtor to withdraw the same,
he shall lose every preference which he may have over the thing.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
80. The following are the effects if the debtor withdraws after proper consiganation, except:
a. The obligation remains.
b. The obligation is extinguished.
c. The creditor shall lose every preference which he may have over the thing.
d. The co-debtors, guarantors and sureties shall be released.
81. The following are requisites in order that on obligation to give a determinate thing will be
extinguished, except:
a. The obligation is to deliver a determinate thing.
b. The obligation is to deliver an indeterminate thing.
c. The thing is lost without the fault of the debtor.
d. The thing is lost before the debtor has incurred in delay.
82. I.An obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific
property of the debtor.
II.Where the obligation consists in the payment of money,the failure of the debtor to make the
payment even by reason of a fortuitous event shall not relieve him of his liability.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
83. I.The general rule is that if the thing is lost while in the possession of the debtor, it shall be presumed
that the loss was due to his fault, unless there is proof to the contrary. II.The
general rule also applies in case of earthquake, flood, storm, or other natural calamity.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
84. When the service has become so difficult as to be manifestly beyond the contemplation of the parties,
the obligor may also be released therefrom, in whole or in part.
a. Doctrine of force majeure
b. Doctrine of fortuitous event
c. Doctrine of unforeseen events
d. Doctrine of foreseen events
85. I.Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of wrong. II.Bad
faith means a breach of a known duty through some motive or interest or ill will that partakes of the
nature of fraud.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
86. I.Good faith is presumed.
II.The burden of proving good faith rests on the one alleging it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
87. An act of liberality, by virtue of which, without receiving any equivalent, the creditor renounces the
enforcement of the obligation, which is extinguished in its entirety or in that part or aspect of the
same to which the remission refers.
a. Condonation
b. Confusion
c. Compensation
d. Novation
88. The following are requisites of condonation, except:
a. It must be gratuitous
b. It must be accepted by the creditor.
c. The obligation must be demandable.
d. The parties must have capacity
89. The following are requisites of condonation, except:
a. It must be onerous
b. The parties must have capacity
c. The condonation must not be inofficious.
d. The condonation must comply with the forms of donation, if it is an express condonation
90. I. The donation and acceptance of movable, the value of which exceeds P5,000,00 must be made in
writing, otherwise the same shall be voidable. II.The delivery
of a private document evidencing a credit, made voluntarily by the creditor to the debtor, implies the
renunciation of the action which the former had against the latter.
 a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
91. The unpaid seller of goods loses his lien under the following, except:
a. When he delivers the goods to a carrier or other bailee for the purpose of transmission to
the buyer without reserving the ownership in the goods.
b. When the buyer or his agent lawfully obtains possession of the goods.
c. By waiver
d. None of the above
92. I. Goods are considered “in transit” from the time when they are delivered to a carrier for the purpose
of transmission to the buyer, until the buyer takes delivery of them from such carrier.
II.Goods are carrier continues in possession of them, even if the seller has refused to receive them
back.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
93. Goods are no longer “in transit” under the following, except:
a. If the buyer obtains delivery of the goods before their arrival at the appointed destination
b. If, after the arrival of the goods at the appointed destination, the carrier acknowledges to
the seller that he holds the goods on his behalf and continues in possession of them as
bailee for the seller
c. If, after the arrival of the goods at the appointed destination, the carrier acknowledges to
the buyer that he holds the goods on his behalf and continues in possession of them as
bailee for the buyer
d. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer
94. An unpaid seller having a right of lien or having stopped the goods in transitu may resell the goods in
one of the following cases, except:
a. Goods are not of perishable nature.
b. The seller expressly reserves the right of resale in case the buyer should make default.
c. The buyer has been in default in the payment of the price for a reasonable time.
d. None of the above.
95. An unpaid seller having the right of lien or having stopped the goods in transitu, may rescind the
transfer of title and resume the ownership in the goods where:
a. The seller did not expressly reserved the right to do so.
b. The buyer has been in default in the payment of the price for an unreasonable time.
c. Goods are of perishable nature
d. None of the above
96. The vendor is not bound to deliver the thing sold because the vendee has lost the right to make use of
the term in the following instances, except:
a. When after the obligation has been contracted, the vendee becomes insolvent, unless he
gives a guaranty or security for the debts
b. When the vendee does not furnish the guarantees
c. When by his own acts, he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless the vendee
immediately gives new ones equally satisfactory
d. When the vendee violates any undertaking, in consideration of which the seller agreed to
the period.
97. I.In the sale of real estate, made for a lump sum, there shall be no increase or decrease of the price
although there be a greater or lesser area or number than that stated in the contract. However, the
discrepancy must not be substantial.
II.In a unit price contract, the statement of area of immovable is conclusive and the price may not be
reduced or increased depending on the area actually delivered.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are true
98. A bought a pair of shoes from a store. The shoes did not belong to the store but a customer who had
left the same for repair. Did A acquire good title to the shoes?
a. No, because A bought it by mistake
 b. Yes, because it was bought from a store in good faith and for value.
c. No, because the seller is not the owner.
d. Yes, because the store was authorized to sell
99. In a sale of immovable by the unit, that is, at a stated rate per unit area:
I.If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all
that may be stated in the contract or demand for the proportionate reduction of the purchase price if
delivery is not possible.
II.If the vendor delivers more than the area stated in the contract, the vendee has the option to accept
only the amount agreed upon or to accept the whole area, provided he pays for the additional area at
the contract rate.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
100. I.Where both the area and the boudaries of the immovable are declared, the area covered
within the boundaries of the immovable prevails over the stated area. In cases of conflict between
areas and boundaries, it is the latter which should prevail.
II.What really defines a piece of ground is not the area, calculated with more or less certainty,
mentioned in its description, but the boundaries therein laid down, as enclosing the land and
indicating its limits.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
101. The requisites of double sale are the following, except:
a. Two or more valid contract of sale
b. Two or more buyers who are at odds over the rightful ownership of the object must
represent conflicting interests
c. They must pertain exactly to the same object
d. They must be bought from different seller
102. The principle of double sale is not applicable in the following , except:
a. The two different contracts of sale are made by two different persons, one of them not
being the owner of the property sold
b. Where one of the contract of sale is forgery
c. Where one of the contract of sale is geuine and the other is also genuine
d. Where one of the contract of sale is subject to a suspensive condition which was not
compiled with and the other is an absolute sale
103. The following are the rules of preference in case of double sale in case of immovable property,
except:
a. First registrant in good faith
b. First possessor in good faith
c. Person with the oldest title in good faith
d. Person with the oldest transfer certificate of title in good father
104. I. If a vendee in a double sale registers the sale after he has acquired knowledge that there was
a previous sale of the same property to a third party or that another person claims said property in a
previous sale, the registration will constitute a registration in bad faith and will not confer upon him
any right.
II.In a case of double sale, what finds relevance and materiality is not whether or not the second buyer
is in good faith but whether or not said second buyer registers such second sale in good faith, that is,
without knowledge of any defect in the title of the property sold.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
105. I. A second buyer of the property who may have had knowledge of such defect in the seller’s
title, or at least was charged with the obligation to discover such defect, can be a registrant in good
faith.
II.When the thing sold twice is an immovable, the one who acquires it and first records it in the
Registry of Property, both made in good faith, shall be deemed the owner.
a. Only I is true
b. Only II is true
 c. Both are true
d. Both are true
106. Is one who buys property of another without notice that some other person has a right to, or
interest in, such property and pays a full and fair price for the same at the time of such purchase, or
before he has notice of the claim or interest of some other person in the property?
a. Purchaser in good faith
b. Buyer in bad faith
c. Seller in good faith
d. Seller in bad faith
107. It is any affirmation of fact or any promise by the seller relating to the thing if the natural
tendency of such affirmation or promise is to induce the buyer to purchase the same, and if the buyer
purchases the thing relying there on?
a. Express warranty
b. Implied warranty
c. Condition
d. None of the above
108. I.The usual exaggeration in trade, when the other party had an oppurtunity to know the facts,
are in themselves fraudulent.
II.A mere expression of opinion does not import a warranty, unless the seller is an expert and his
opinion was relied upon by the buyer.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
109. Is a statement or representation made by the seller of goods, contemporaneously and as part
of the contract of sale, having reference to the character, quality or title of the goods, and by which he
promises or undertakes to insure that certain facts are or shall be as he then represents them?
a. Condition
b. Warranty
c. Exaggeration in trade
d. Expression of opinion
110. Is that which the law derives by application or inference from the nature of the transaction or
the relative situation or circumstances of the parties, irrespective of any intention of the seller to
create it?
a. Express warranty
b. Implied warranty
c. Condition
d. None of the above
111. The prespective period for instituting actions based on a breach of express warranty is that
specified in the contract, and in the absence of such period, the general rule on rescission of contract,
which is:
a. 4 years
b. 5 years
c. 6 years
d. 10 years
112. A sold her specific car to B for P200,000 payable in 5 equal installments, A delivered the car to
B but a mortgage was constituted on the car to answer for the unpaid installments. B paid the first 2
installments but failed to pay the last 3 installments. A foreclosed the mortgaged property and sold it
at public auction for P100,000. Which is correct?
a. A can recover from B the balance of P20,000 even if there is no stipulation to that effect.
b. A cannot recover the deficiency even if there is stipulation to the contrary.
c. A can recover from B the balance of P20,000 if there is stipulation to that effect.
d. A cannot recover the deficiency except if there is stipulation to that effect
113. As for actions based on breach of implied warranty, the prescriptive period is, warranty against
hidden defects and warranty against eviction.
a. 4 months from the date of perfection
b. 4 months from the date of delivery
c. 6 months from the date of perfection
d. 6 months from the date of delivery
114. It shall take place whenever by a final judgement based on a right prior to the sale or an act
imputable to the vendor, the vendee is deprived of the whole or of a part of the thing purchased?
 a. Eviction
b. Hidden defect
c. Redhibitory defect
d. All of the above
115. In order that a vendor’s liability for eviction may be enforced, the following requisites must
concur, except:
a. There must be a final judgement
b. The purchaser has been deprived of only the whole of the thing sold
c. Said deprivation was by virtue of a right prior to the sale mad by the vendor
d. The vendor has been summoned and made co- defendant in the suit for eviction at the
instance of the vendee
116. I.If the property is sodl for non-payment of taxes due and not made known to the vendee
before the sale, the vendor is not liable for eviction.
II.Any stipulation exempting the vendor from the obligation to answer for eviction shall be void, even if
he acted in good faith.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
117. The waiver is made by the vendee without the knowledge of the risk of eviction. The vendor
shall only pay the value which the thing sold had at the time of eviction.
a. Express waiver
b. Implied waiver
c. Waiver consciente
d. Waiver intencionada
118. The waiver is made by the vendee with the knowledge of the risk of eviction and assumed its
consequences. The vendor shall not be liable.
a. Express waiver
b. Implied waiver
c. Waiver consciente
d. Waiver intencionada
119. In case eviction occurs, the vendee shall have no right to demand of the vendor one of the
following
a. The return of the value which the thing sold had at the time of the eviction, be it greater or
less than the price of the sale
b. The income or fruits, if he has been ordered to deliver them to the party who won the suit
against him
c. The costs of the suit which caused the eviction, and , in a proper case, those of the suit
brought against the vendor for the warranty
d. The expenses of the contracts, if the vendor has paid them
120. One of the following is not requisite for breach of warranty against hidden defect:
a. The defect must be hidden
b. The defect must exist at the time of delivery of the contract of sale.
c. The defect renders the thing unfit for the use for which it is intended.
d. It must be instituted within the prescreptive period.
121. I.As a general rule, there is no implied warranty in the sale of secondhand articles.
II.Where the goods are bought by description from a seller who deals in the goods of that description,
there is an implied warranty that the goods are of merchantable quality.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
122. I.In case of hidden defects, the vendee may elect between withdrawing from the contract and
demanding a proportionate reduction of the price, with damages in either case.
II.The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even
though he was not aware of thereof.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
123. If the thing sold should be lost in consequence of the hidden faults, and the vendor was not
aware of them, the following are the effect of loss, except:
a. He shall return the price
b. He shall return the interest
c. He shall reimburse the expenses of the contract
d. None of the above
124. If the thing sold should be lost in consequence of the hidden faults, and the vendor was aware
of them, one of the following is not an effect of loss
a. He shall bear the loss
b. He shall return the price
c. He shall refund the expenses
d. He shall not pay damages
125. I.If two or more animals are sold together, whether for a lump sum or for a separate price for
each of them, the rehibitory defect of one shall only give rise to its redhibition, and not that of the
others.
II.There is no warranty against hidden defects of animals sold at fairs or at public auctions, or of live
stock sold as condemned.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
126. I.The sale of animals suffering from contagious diseases shall be void.
II.A contract of sale of animals shall also be void if the use or service for which they are acquired has
been stated in the contract, and they are found to be unfit therefor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
127. I.The redhibitory action, based on the faults or defects of animals, must be brought within six
months from the date of their delivery to the vendee.
II.If the animal should die within five days after its purchase, the vendor shall be liable if the disease
which cause the death existed at the time of the contract.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
128. I.The vendee is bound to accept delivery and to pay the price of the thing sold at the time and
place stipulated in the contract.
II.The very essence of a contract of sale is the transfer of ownership in exchange for a price paid or
promised
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
129. I.The buyer of goods is not bound to accept delivery thereof by installments.
II.The buyer has a reasonable opportunity to examine the goods upon delivery to ascertain whether
they are in conformity with the contract before accepting the same.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
130. It is when the buyer does any act in relation to the goods which is inconsistent with the
ownership of the seller.
a. Express acceptance
b. Implied acceptance
c. Non-acceptance
d. None of the above
131. When the buyer intimates to the seller that he has accepted the goods
a. Express acceptance
b. Implied acceptance
c. Non-acceptance
 d. None of the above
132. When, after the lapse of a reasonable time, he retains the goods without intimating to the
seller that he has rejected them
a. Express acceptance
b. Implied acceptance
c. Non-acceptance
d. None of the above
133. I.Acceptance of the goods by the buyer shall discharge the seller from liability in damages for
breach of any warranty in the contract of sale.
II.Where the goods are delivered to the buyer, and he refuses to accept them, having the right to do
so, he is bound to return them to the seller.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
134. Except for one, the following are the effect of buyer’s justifiable refusal to accept delivery
a. The buyer has no obligation to return the goods to the seller
b. It is sufficient that the buyer notifies the seller that he refuses to accept the goods
c. There will be legal pledge or pledge by operation of law
d. If the buyer voluntarily constitutes himself a depositary of the goods, he shall be liable as
such
135. I. When the buyer’s refusal to accept the goods is without just cause, the title thereto passes
him.
II.where goods are delivered to the buyer, and he refuses to accept them, having the right to do so, he
is not bound to return them to the seller.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
136. Vendee owes interest between the delivery and payment in the following three cases, except:
a. Should it have been so stipulated
b. Should the thing has hidden defect
c. Should the thing sold and delivered produce fruits or income
d. Should buyer in default
137. I.Should the vendee be disturbed in the possession or ownership of the thing acquired , he
may suspend the payment of the price.
II.Should the vendor have reasonable grounds to fear the loss of immovable property sold and its
price, he may immediately sue for the rescission of the sale.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
138. Damages are imposed, by way of example or correction for the public good, in addition to the
moral, temperature, liquidated or compensatory damages.
a. Actual damages
b. Exemplary damages
c. Liquidated damages
d. Nominal damages
139. The voluntary relinguishment or abandonment, express or implied, of a legal right or
advantage.
a. Waiver
b. Condonation
c. Compensation
d. Force majeure
140. It imports a dishonest purpose or some moral obliquity or conscious doing of a wrong.
a. Fraud
b. Bad faith
c. Damage
d. Injury
141. Is any event which cannot be foreseen, or which, though foreseen, is inevitable.
a. Accident
 b. Injury
c. Fortuitous event
d. Calamity
142. I. Fortuitous events by definition are extraordinary events not foreseeable or avoidable.
II.In fortuitous event, the mere difficulty to foresee the happening is not impossibility to foresee the
same.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
143. Which is not an element of a fortuitous event?
a. The cause of the unforeseen and unexpected occurence must have been dependent of human will.
b. The event that constituted the caso fortuito must have been impossible to foresee or, if
foreseeable, impossible to avoid.
c. The occurence must have been such as to render it impossible for the debtors to fulfill their
obligation in a normal manner.
d. The obligor must have been free from any participation in the aggravation of the resulting injury to
the creditor.
144. I. In order for a fortuitous event to exempt one from liability, it is necessary that one has
committed no negligence or misconduct that may have occasioned the loss.
II. An act of God can be invoked to protect a person who has failed to take steps to forestall the
possible adverse consequences of such a loss.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
145. Which is not an element of a fortuitous event?
a. The cause of the breach of the obligation must be independent of the wiil of the debtor.
b. The event must be neither unforeseeable nor unavoidable.
c. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal
manner.
d. The debtor must be free from any participation in, or aggravation of the injury to the creditor.
146. I. In an obligation to deliver a generic thing, the loss or destruction of anything of the same
kind does not extinguish the obligation.
II. An obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific
property of the debtor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
147. I. Carnapping per se can be considered as a fortuitous event.
II. The burden of proving that the loss was due to a furtuitous event rests on him who invokes it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
148. I. Possessor in bad faith shall not be liable for deterioration or loss in every case, even if caused
by a fortuitous event.
II. If the obligor delays, or has promised to deliver the same thing to two or more persons who do not
have the same interest, he shall not be responsible for any fortuitous event until he has effected the
delivery.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
149. In commodatum, the bailee is liable for the loss of the thing, even if it should be through a
fortuitous event, except:
a. If he devotes the thing to any purpose dufferent from that for which it has been loaned.
b. If he keeps it longer than the period stipulated, or after the constituted.
c. If the thing loaned has been delivered with appraisal of its value unless there is a stipulation
exempting the bailee from responsiblitiy in case of fortuitous event.
 d. If, being able to save either the thing borrowed or his own thing he, chose to save the former.
150. The depository is liable for the loss of the thing through a fortuitous event except:
a. If it so stipulated.
b. If he uses the thing with the depositor’s permission.
c. If he delays its return.
d. If he allows others to use it, even though he himself may have been authorized to use the same.
151. The officious manager shall be liable for any fortuitous event, except:
a. If he undertakes risky operations which the owner was not accustomed to embark upon.
b. If he has preferred his own interest to that of the owner.
c. If he fails to return the property or business after demand by the owner.
d. If he assumed the management in good faith.
152. I. The receipt of the principal by the creditor without reservation with respect to the interest,
shall give rise to the presumption that said interest has been paid.
II. The receipt of a later installment of debt without reservation as to prior insallments, shall likewise
raise the presumption that such installments have been paid.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
153. A presumption which may be contradicted or overcome by other evidence.
a. Conclusive presumption
b. Definite presumption
c. Disputable presumption
d. Questionble presumption
154. A presumption which is irrebutable upon the presentation of the evidence and any evidence
tendong to rebut the presumption is not admissible.
a. Conclusive presumption
b. Uncertain presumption
c. Disputable presumption
d. Questionable presumption
155. The following are instances of disputable presumptions, except:
a. That the money paid by one to another was due to the latter.
b. The tenant is not permitted to deny the title of his landlord at the time of commencement of the
relation of landlord and tenant between them.
c. That a thing dfelivered by one to another belonged to the latter.
d. That prior rents or installments had been paid when a receipt for the later one is produced.
156. The following are instances of disputable presumptions, except:
a. That there was sufficient consideration for a contract.
b. That persons acting as co-partners have entered into a contract of co-partnership.
c. Whenever a party has, by his own declaration, act or omission, intentionally and deliberately led
another to beleive a particular thing true, and to act upon such belief, he cannot, in any litigation
arising out of such declaration, act or omission, be permitted to falsify it
d. That an obligation deliverd up to the debtor has been paid.
157. Spouses H and W obtained from A and B a loan amounting to P6,000,000 at 3% interest per
month. The loan was secured by a mortgage on a parcel of land. Thereafter, the parties executed a
Contract of Sale conveying the mortgaged property on favor of H and W. Subsequently, A and B gave H
and W an exclusive option to repurchase the land for P10,000,000. This was embodied in a document
denominated as an Option to Buy. On this same document, A and B acknowledged receipt of a total
sum of P10,000,000 as consideration for the purchase of the land. The Option to Buy provided that if
the option is exercised after December 5, 1998, the purchase price shall increase at the rate of
P300,000 or 3% of the purchase price every month until September 5, 1999 and thereafter at the rate
of P381,000 or 3.81% of the purchase price every mony, with the fifth of every month as the cut-off
date for said increases. Are the 3% and 3.81% stipulated monthly interest valid?
a. Yes, because the Usury Law has been suspended by a certain Central Bank Circular.
b. Yes, because the parties are free to stipulate on the interest to imposed on monetary obligations.
c. No, because the Court will temper interest rates if they are unconscionble.
d. No, because what is only required is that the interest due should be that stipulated in writing, and
in the absence thereof, the rate shall be 12% per annum.
158. One of the following is a determinate thing
a. A car with plate no. AB123
b. A red book
 c. A black cellphone
d. A 10 inches laptop
159. B, Inc. Contracted C, Inc., a stevedoring company, to load and stow a shipment of 146,288
cartons of fresh green bananas and 15,202 cartons of fresh pineapples into the cargo hold of a vessel.
The vessel was docked at the port of Davao City and the goods were to be transported by it to the port
of Inchon, Korea. B. Inc. Insured the shipment with J Co. C, Inc. Loaded and stowed the cargoes aboard
the vessel. The vessel set sail from port of Davao City and arrived at the port of Inchon, Korea. It was
then discovered upon discharge that some of the cargo was in bad condition. In a survey report, It was
stated that 16,069 cartons of the banana shipment and 2,185 cartons of the pineapple shipment were
so damaged that they no longer had commercial value.
B, Inc. filed a claim for the damages. J Co. evaluated the claim and thereafter sent a check in the
amount of $210,266.43 to B Inc., the latter then issued subrogation receipt to J Co. Thereafter J Co.
instituted an action for damages against C, Inc. Is C, Inc,
under obligation to observe the extraordinary degree of deligence in the conduct of its business?
a. No, because if there is no law or contract stating the degree of diligence which is to be observed in
the performance of an obligation then that which is expected of a good father of a family or
ordinary diligence shall be required.
b. Yes, because its participation was to load the cargoes on board the vessel which requires utmost
care.
c. No, because its participation was to load the cargoes on board the vessel which requires ordinary
care.
d. None of the above
160. X, an official of TESDA, boarded the LRT to be able to arrive in Caloocan in time for her 3 p.m.
meeting when her handbag was slashed and the contents were stolen by an unidentified person.
Among those stolen were her wallet and the government-issued cellular phone. She then reported the
incident to the police authorities; however, the theif was not located and the cellphone was not
recovered. She also reported the loss to her immediate superior, and she requested that she be freed
from accountability for the cellphone. The COA auditor denied her request on the ground the she
lacked the diligence required in the custody of government property and was ordered to pay the
purchase value. Is X liable?
a. Yes, X is liable because putting her cellphone in her bag is not sufficient care of a cellphone while
traveling on board the LRT.
b. Yes, X is liable as she should have rode a jeep or bus.
c. No, X is not liable because riding the LRT is not a negligent act more so because X’s mode of transit
was influenced by time considerations.
d. No, X is not liable as she boarded the LRT to be able to arrive in Caloocan in time for her 3 p.m.
meeting.
161. D borrowed P50,000 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 right to the debt 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 right to debt will pass on the heirs of C.
d. S cannot collect because the law prohibits the transmission of the credit right.
162. X was the disbursing officer of the Ternate Beach Project of the Philippine Tourism in Cavite. In
the morning of July 1, 2018, a Friday, he went to Manila to encash a check covering the wages of the
employees. However, the processing of the check was delayed and was completed at about 3 p.m.
Neverthless, he decided to encash the check because the employees would be waiting for their pay the
following day; otherwise, the workers would have to wait until July 5, the earliest time, when the main
office would open. At that time, he had two choices: (1) return to Ternate, Cavite that same afternoon
and arrive early evening; or (2) take the money with him to his house in Marilao, Bulacan, spend the
night there, thinking it was the safer one. Thus, at past 3 p.m., he took a passenger jeep bound for
Bulacan. While the jeep was on EDSA, the jeep was help up with one robber who was subsequently
charged with robbery and pleaded guilty. The other robber who held the stolen money escaped. The
Commission on Audit found X negligent because he had not brought th cash proceeds of the check to
his office in Ternate,Cavite for safekeeping, which is the normal procedure in the handling of funds. Is
X liable?
a. No, because the robbers attacked X in broad daylight in the jeep while it was on a busy highway
and in the presence of other passengers;
b. Yes, because he should not have allowed the delayed encashment of the check.
 c. No, because X chased the robbers and caught up with one robber who was subsequently convicted
of robbery.
d. Yes, because he decided to encash the check despite the knowledge of the fact that it was already
late.
163. W received from X a pendant with diamonds to be sold on commission basis, but which W
failed to susequently return because of a robbery committed upon her in the evening of January 16,
2018 while walking alone in a dark alley carrying the said pendant. X filed an action against W for
recovery of the pendant or its value, but W set up the defense that the robbery extinguished her
obligation. Is W liable?
a. No, because the robbery took place without any concurrent fault on W’s part.
b. Yes, because the conduct of W in returning alone to her house in the evening carrying jewelry of
considerable value would have been negligence per se.
c. No, because the incident was unforseen.
d. Yes, because W committed delay.
164. J is a usufructuary of a fishpond. J entered into a contract leasing the fishpond to Y for a period
of 5 years. Paragraph 5 of the lease contract states that the lessee “cannot sublease” the fishpond. X is
a businessman engaged in the operation of fishponds. Y persuaded X to take over the operation of said
fishpond. X acceded to the proposal. X and Y executed a written agreement whereby X would take
possesion of thefishpond in consideration of the amount of P100,000. X incured expenses for the
improvement of the fishpond. However, sometime in June 2018, J, went to the fishpond and
presented X with a letter showing that Y had surrendered possesion of the fishpond to him. Is Y liable
for subleasing the fishpond?
a. No, because as a lessee he can transfer his rights over the subject matter of the contract of lease.
b. Yes, because as a lessee he cannot transfer his rights over the subject matter of the contract lease.
c. No, because subleasing is not prohibited by law.
d. Yes, because when an obligation consists is not doing and the obligor does what has been
forbidden him, it shall also be undone at his expense. In this case, Y and X to incur expenses to
improve the operation of the fishpond.