JIM PETERICK G.

SISON
QUIZ – CIVIL LAW REVIEW II
April 24, 2021

1. Give the two (2) items which are substituted by a penalty clause in obligations with a
penalty clause under Art. 1226 of the Civil Code.
a. damages

b. payment of interests in case of non-compliance, if there is no stipulation to the contrary.

2. Give the three (3) exceptions to the general that the penalty clause takes the place of the
two (2) items above and wherein additional damages may be recovered.

a. express stipulation that damages or interest may still be recovered,despite the presence of the
penalty clause.

b. refusal of the debtor to pay the penalty imposed on the obligations.

c. when the debtor is guilty of fraud or dolo in the fulfillment of the obligaions.

3. In a building contract, there was a stipulation for a penalty clause. The builder, however
was sued for additional damages on account of breach of contract. But the breach was not
occasioned by fraud. Is the owner entitled to get more damages from the builder? Please
explain.

No. The owner is not entitled to get more damages from the builder other than what has been
stipulated upon as the penalty or waiver of other damages, except if otherwise provided by law.

Jurisprudence dictates that a party to a building contract who is given the benefit of a stipulation
fixing a round sum as liquidated damages for breach of contract on the part of the builder cannot be
awarded additional damages at large for the same breach. Insistence upon receiving satisfaction of
the penal clause operates as a renunciation of the right to other damages.

4. Give the six (6) ways be which obligations are extinguished.

a. payment or performance

b. loss of the thing due

c. condonation or remission of the debt

d. confusion or merger of the rights of creditor and debtor

e. compensation

f. novation

5 Give the legal effects/consequences of the following circumstances involving payment by a

third person:
 a. payment with the knowledge and consent of the debtor

- Creditor is entitled to reimbursement and subrogation.

b. payment without the knowledge or against the will of the debtor

- Only beneficial reimbursement (not entitled to subrogation).

6. A owes B P2.0 million. Later A paid B P300,000 to B. C, a close relative of A and intending
to surprise A, paid B the sum of P2.0 million, thinking that A still owed B that amount. C
made the payment without the knowledge of A. How much can C recover from A. Please
explain.

- C can recover only 1.7Million from A, because it is only up to this amount that A has been
benefited. C can recover the remaining balance of 300,000 from B who should not have accepted
complete payment for a debt already partially paid. Moreover, If B incidentally is in bad faith, B is
responsible not only for the return of the P700, 000 but also for the interest in lieu of damages.

7. Define dation in payment.

It is that mode of extinguishing an obligation whereby the debtor alienates in favor of the creditor,
property for the satisfaction of monetary debt.

8. A borrowed from his sister in the United States the amount of US1000 to finance his
business of setting up a retail store to be payable in the foreign currency of dollar based on
the applicable rate of exchange at the time of payment. Is the obligation denominated in
foreign currency valid? Please explain.

Yes. The obligation denominated in foreign currency is valid.

Under the law, the payment of debts in money shall be made in the currency stipulated, and if it is
not possible to deliver such currency, then in the currency which is legal tender in the Philippines.

In the problem given, it was stipulated that A’s debts is payable in the foreign currency of dollar
based on the applicable rate of exchange at the time of payment. Therefore, The obligation
denominated in foreign currency is valid.