Professional Documents
Culture Documents
M-1401
LAW ON OBLIGATIONS
KNOWLEDGE
ENGINEERS/REVIEWERS
A. Domingo, J. Santiago,
T. Venturanza
“Serving towards your CPA License.”
REVIEW NOTES
OBLIGATION – a juridical necessity to give, to do or not to do.
SOURCES:
1. Law
2. Contracts
3. Quasi- Contracts
→ lawful, voluntary and unilateral acts which are enforceable to the end that no one shall be
unjustly enriched or benefited at the expense of another.
Common Kinds:
a) Negotiorum Gestio
Whoever voluntarily takes charge of the agency or management of the business or property
of another without the knowledge or consent of the latter.
b) Solutio Indebiti
If something is received when there is no right to demand it, and it was unduly received
through mistake, the obligation to return it arises.
4. Delicts – (crimes) – acts or omissions punishable by law.
5. Quasi- Delicts
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage done but there is no pre-existing contractual relation between the parties.
ESSENTIAL REQUISITES OF AN OBLIGATION
1. PASSIVE SUBJECT
2. ACTIVE SUBJECT
3. OBJECT OR PRESTATION
4. JURIDICAL OR LEGAL TIE
Two Kinds of obligation according to subject matter.
1. Real Obligation
2. Personal Obligation
a) Positive personal obligation
b) Negative personal obligation
Two Kinds of real obligation
1
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
1. Specific real obligation
Obligation to deliver a specific or determinate thing.
2. Generic real obligation
Obligation to deliver an indeterminate or generic thing.
Duties of the Obligor in an obligation to give a determinate thing
1. To take good care of the thing pending delivery;
2. To deliver its accessions and accessories; and
3. To deliver the thing itself.
4. To pay damages
In Generic Obligations:
1. deliver the things which is neither of superior nor inferior quality;
2. to pay damages
ACCESSIONS AND ACCESSORIES
ACCESSION - are fruits of a thing, or additions to, or improvements upon, a thing
ACCESSORIES - are things joined to a principal thing for the latter’s embellishment, better use, or
completion
REMEDIES OF THE CREDITOR IN A REAL OBLIGATION IN CASE THE DEBTOR FAILS TO COMPLY WITH
HIS OBLIGATION
2
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
WHAT ARE THE GROUNDS FOR LIABILITY WHICH MAY ENTITLE THE INJURED PARTY TO DAMAGES?
1. FRAUD committed after the perfection of the contract or in the performance of the obligation.
2. NEGLIGENCE
3) Circumstances of time;
3. DELAY
1) Mora Solvendi
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
a) Mora Solvendi ex re
2) Mora Accipiendi
3) Compensatio Morae
When is demand by the creditor not necessary in order that delay may exist?
Ans:
4) When demand would be useless as when the obligor has rendered it beyond his power to
perform
5) When there is performance by a party in reciprocal obligations delay by the other begins
A fortuitous event is any event which cannot be foreseen, or which, though foreseen, is inevitable.
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
RULES ON LIABILITY FOR FORTUITOUS EVENT
1) General Rule
The debtor is not liable for the non-performance of his obligation due to a fortuitous event.
2) Exceptions: He is liable:
1. Pure Obligation;
2. Conditional Obligations;
4. Alternative Obligation;
5. Facultative Obligation;
6. Joint Obligation;
7. Solidary Obligation;
8. Divisible Obligation;
1. PURE OBLIGATION
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
→not subject to any condition and no period attached to the obligation
2. CONDITIONAL OBLIGATION
→subject to a condition
1) SUSPENSIVE
2) RESOLUTORY
Other Kinds:
e. Potestative – the condition depends upon the will of one of the contracting parties
f. Casual – the condition depends upon the chance or upon the will of a third person
g. Mixed – the condition depends partly upon chance and partly upon the will of a third
person.
Nota Bene:
When the debtor binds himself to pay when his means permit him to do so, the obligation
shall be deemed to be one with a period
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
RULES IN CASE OF LOSS, DETERIORATION, OR IMPROVEMENT OF THE THING TO BE DELIVERED
DURING THE PENDENCY OF A SUSPENSIVE CONDITION
b) with the fault of debtor, the latter shall be obliged to pay damages;
b) through the fault of debtor, the creditor may choose between rescission with damages
and fulfillment also with damages;
•USUFRUCTUARY
Is one given the right to possess and enjoy property belonging to another.
NOTA BENE
A condition is an uncertain event that may or may not happen; a period is a certain event
that must necessarily come, at a date known beforehand, or at a time that cannot be
determined.
A condition may refer to the future or to a past event unknown to the parties; a period
always refers to the future.
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
3. OBLIGATION WITH A PERIOD
KINDS OF PERIODS
WHEN DEBTOR LOSES HIS RIGHT TO MAKE USE OF THE PERIOD IF IT IS FOR HIS BENEFIT:
(ART.1198) [the creditor may demand immediate payment even before due date of the
obligation (because obligation becomes pure)]
1) When debtor becomes insolvent unless he gives a guaranty or security for the debt.
2) When he does not furnish to the creditor the guaranties or securities which he has promised.
3) When by his own acts, he has impaired said guaranties or securities or when through a
fortuitous event they disappear, unless he gives new ones equally satisfactory
4) When he violates any undertaking, in consideration of which the creditor agreed to the
period.
1) SIMPLE
2) COMPOUND
a) CONJUNCTIVE
b) DISTRIBUTIVE OR DISJUNCTIVE
4. ALTERNATIVE OBLIGATION
Is one where several prestations are due but the complete performance of one of them is
sufficient to extinguish the obligation
a) If only one or some are lost through a fortuitous event or through the debtor’s fault
→the debtor may deliver any of the remainder, or that which remains if only one
subsists.
→the debtor shall pay the value of the last thing that was lost plus damages
→the debtor shall deliver that which the creditor should choose among the remainder,
or that which remains if only one subsists.
→the creditor may claim any of those subsisting, or the price of those which were lost
through the debtor’s fault plus damages.
→the creditor may claim the price of any of them plus damages.
5. FACULTATIVE OBLIGATION
→An obligation where only one prestation is due but the debtor may render another in
substitution
1) BEFORE SUBSTITUTION
a) PRINCIPAL THING
ii. If lost due to the debtor’s fault, debtor shall pay damages.
b) SUBSTITUTE
2) AFTER SUBSTITUTION
a) PRINCIPAL THING
→After the substitution has been communicated, the thing due is the substitute.
b) SUBSTITUTE
ii. If lost through the debtor’s fault, the debtor shall pay damages.
6. JOINT OBLIGATION
→Is one where the obligation is to be paid or fulfilled proportionately by the different debtors and
or is to be demanded proportionately by the different creditors.
7. SOLIDARY OBLIGATION
→Is one where each of the debtors is bound to render, and/or each of the creditors has a right to
demand entire compliance with the prestation.
The obligation is presumed to be joint. There is solidary liability only in the following cases:
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
WHAT ARE THE DEFENSES AVAILABLE TO THE SOLIDARY DEBTOR WHO IS SUED?
They are:
1) Defenses derived from the nature of the obligation like payment, fraud, prescription,
remission, etc.;
2) Defenses personal to, or which pertain to his share, such as incapacity, mistake, violence,
etc.; and
3) Defenses which are personal to others, but only as regards that part of the debt for which he
is liable.
8. DIVISIBLE OBLIGATION
→Is one the object of which in its delivery or performance is capable of fulfillment by parts.
9. INDIVISIBLE OBLIGATION
→Is one the object of which in its delivery or performance is not capable of fulfillment by parts.
→Is one which contains an accessory undertaking (penal clause) to pay a previously stipulated
indemnity (penalty) in case of breach.
General Rule: The penalty takes the place of the damages and interest in case of non-
compliance.
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
Exceptions: Aside from the penalty, damages and interest may also be demanded:
1. Payment or performance
5. Compensation
6. Novation; and
A. Annulment
B. Rescission
D. Prescription
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
H. Impossibility of fulfillment
J. Renunciation or waiver
1. PAYMENT OR PERFORMANCE
→means not only the delivery of money but also the performance, in any other manner, of an
obligation.
WHO ARE THE PERSONS FROM WHOM THE CREDITOR IS BOUND TO ACCEPT THE PAYMENT OR
PERFORMANCE?
1) The debtor
3) A third person who has no interest in the obligation when there is a stipulation that he can
make payment
→Payment of domestic obligations shall be made in the currency stipulated; in the absence
of stipulation, the currency which is legal tender in the Philippines.
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
Is that currency which a debtor can compel a creditor to accept in payment of a debt in
money, when tendered in the right amount.
→They are:
2) If there is no stipulation:
a) Where the thing to be delivered is specific, it shall be at the place where the thing was at
the perfection of the contract;
b) Where the thing to be delivered is generic (like money), it shall be the domicile of the
debtor
a) Extra-judicial expenses required by the payment are for the account of the debtor;
Where the place of payment is the domicile of the debtor and he changes his domicile in bad
faith or after he has incurred in delay, the additional expenses shall be borne by him
2) Dation in payment
3) Payment by cession
DATION IN PAYMENT
Dation in payment , is a special form of payment where the ownership of property belonging to
the debtor is transferred to his creditor to pay a debt in money.
APPLICATION OF PAYMENTS
→Is the designation of the debt to which should be applied the payment made by a debtor who
owes several debts to the same creditor
b) If the debtor does not make the designation, the creditor makes it
1) Payment shall be applied to the debt, among those due, which is the most onerous to
the debtor.
2) If the debts are of the same nature and burden, payment shall be applied to all due
debts proportionately.
PAYMENT BY CESSION
→is the abandonment or assignment by the debtor of all his property in favor of his creditors so
that the latter may sell them and recover their claims out of the proceeds.
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.RN
→It is the act on the part of the debtor of offering to the creditor the thing or amount due.
CONSIGNATION
→It is the act of depositing the thing or amount due with the proper court when the creditor does
not desire or cannot receive it, after complying with the formalities prescribed by law.
GIVE THE CASES WHEN CONSIGNATION ALONE, WITHOUT NEED OF TENDER OF PAYMENT,
PRODUCES THE EFFECT OF PAYMENT.
1. When the creditor is absent or unknown or does not appear at the place of payment;
2. When he is incapacitated to receive the payment at the time it is due;
3. When, without cause, he refuses to give a receipt;
4. When two or more persons claim the same right to collect; and
5. When the title of the obligation has been lost.
ENUMERATE THE CASES WHEN THE OBLIGOR IS LIABLE FOR DAMAGES BY THE LOSS OF THE
THING DUE
1. If the loss of the determinate thing is due to his fault;
2. When it is lost after he has incurred in delay;
3. When by law or stipulation he is liable even for fortuitous events;
4. When the nature of the obligation requires the assumption of risk; and
5. When the obligation to deliver a specific thing arises from a crime.
WHEN WILL LOSS OF THING EXTINGUISH AN OBLIGATION?
1. In obligations to deliver specific or determinate things, it shall be extinguished if the thing
should be lost or destroyed without fault of the debtor and before he has incurred in delay.
Nota Bene: If the loss is due to the fault of a third person, the creditor is given the right to
recover damages from the former.
2. In obligations to deliver generic things, the loss or destruction of anything of the same kind
does NOT extinguish the obligation
23
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.RN
4. CONFUSION OR MERGER
→It is the meeting in one person of the qualities of creditor and debtor with respect to the same
obligation.
GIVE THE EFFECT OF MERGER IN THE PERSON OF THE PRINCIPAL DEBTOR OR CREDITOR
→It extinguishes the principal obligation.
→It benefits the guarantors because the accessory obligation of guaranty is also extinguished.
5. COMPENSATION
→Is the extinguishment to the concurrent amount of the debts of two persons who, in their own
right, are debtors and creditors of each other
6. NOVATION
AS TO ITS OBJECT:
a. REAL OR OBJECTIVE
→When the change is in the obligation itself, i.e., the cause, object, or principal
condition
b. PERSONAL OR SUBJECTIVE
→Where the change is in the parties (i.e., the person of the debtor is substituted
(substitution) and/or a third person is subrogated in the rights of the creditor
(subrogation); and
c. MIXED
→Where there is a change both in the parties and the obligation itself.
ENUMERATE THE CASES WHEN THE LEGAL SUBROGATION OF THE CREDITOR IS PRESUMED
1. When a creditor pays another creditor who is preferred even without the debtor’s
knowledge;
2. When a third person, not interested in the obligation, pays with the express or tacit approval
of the debtor; and
When even without the knowledge of the debtor, a person interested in the fulfillment of the
obligation (e.g., guarantor) pays, without prejudice to the effects of confusion as to the latter’s share.
24
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.MC
A. Contracts C. Law
B. Quasi-Contracts D. Negligence
6. Where A voluntarily takes charge of the neglected business of B without the latter’s authority
where reimbursement must be made for necessary and useful expenses, there is a:
7. It is a thing that is particularly designated or physically segregated from all others of the same
class.
A. Fraud C. Delay
B. Negligence D. Quasi-delict
11. The efficient cause or juridical tie why the obligation exists
A. Active subject C. Prestation
B. Passive Subject D. Vinculum
12. The following are sources of obligations derived from law, except
A. contracts C. delicts
B. quasi-contracts D. quasi-delicts
13. The duty to pay taxes and to support one’s family are obligations arising from
A. Law C. Quasi-contracts
B. Contracts D. Delicts
18. 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
19. The obligee has a right to enforce the obligation against the obligor in a court of law
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.MC
A. civil obligation C. natural obligation
B. moral obligation D. social obligation
20. The duty not to recover what has voluntarily been paid although payment was no longer required
A. Civil obligation C. Moral obligation
B. Natural obligation D. Juridical obligation
21. Cannot be enforced by court action and depend exclusively upon the good conscience of the
debtor
A. civil obligation C. moral obligation
B. natural obligation D. social obligation
22. The obligation of husband and wife to render mutual help and support arises from
A. Contract C. quasi-contract
B. Law D. quasi-delict
23. Whenever in an obligation a period is designated, it is presumed to have been established for the
benefit of :
A. both the creditor and the debtor C. the debtor
B. the creditor D. the third party
27. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be:
A. Voidable C. Valid
B. Unenforceable D. Void
29. A entered into a contract with B by which A promised to deliver at price stipulated in the contract.
Such delivery is made on February 14, 2001 with penalty in case of default. In this case, no further
demand by B on A is necessary to consider A in delay because:
A. time is of the essence of the contract
B. the obligation expressly so provides
C. the demand would be useless
D. answer not given
30. If the creditor to whom tender of payment has been made refuses without just cause to accept it,
the debtor shall be released from responsibility by:
A. assignment of property
B. consignation of the thing or sum due
C. adjudication or pacion en pago
D. condonation
31. A executes a promissory note in favor of B who subsequently indorsed it in favor of A. The
obligation to pay the promissory note is thereby extinguished because there is?
A. confusion or merger C. remission
B. novation D. compensation
32. The distinction between conventional subrogation and assignment is that in conventional
subrogation:
A. it is a mere cession of right
B. an obligation is extinguished and another appears
C. the same obligation, without being extinguished is transferred to another
D. the debtor’s consent is necessary
33. 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
34. It presupposes not only that the obligor is able, ready and willing but more so, in the act of
performing his obligation.
A. promissory note C. bill of exchange
B. tender of payment D. obligation to sell
36. The debtor shall lose every right to make use of the period except:
A. When after the obligations has been contracted he becomes insolvent, unless he gives a
guaranty or security for the debt.
B. When he does no furnish a guaranty or security for the debt.
C. When the debtor attempts to abscond.
D. When he violates any undertaking in consideration of which the creditor agreed to the
period.
37. When the Debtor binds himself to pay when his means permit his to do so is one:
A. with a condition dependent upon the debtor’s will.
B. with the resolutory period upon the debtor’s will.
C. with the suspensive period dependent upon the debtor’s will.
D. with the condition to be fixed by court.
38. When the debtor binds himself to pay when his means will permit him to do so, the obligation is:
A. conditional C. simple
B. pure D. with a period
39. In three of the following cases, advance payment by the debtor is not recoverable. Which is the
exception?
A. The obligation was not yet due and demandable but the debtor believed it was already due
and demandable.
B. The payment is only for interest and credited to the proper period.
C. The advance payments were made by both parties reciprocally.
D. The debtor was aware of the period.
41. When the obligation is extinguished because of the passage of time, this is:
A. fulfillment of resolutory condition C. prescription
B. arrival of resolutory period D. rescission
43. Unless the law or the stipulation of the parties require another standard of care, every person
obliged to give something is also obliged to take care of it with the proper diligence
A. Observing utmost care C. Of a father of a good family
B. Observing extraordinary care D. Observing ordinary diligence
44. Ordinary diligence is
A. Diligence of a good father of a family
B. Extraordinary diligence
C. Diligence required by law
D. Diligence of a father of a good family
46. Spontaneous products of the soil and the offspring and other products of animals
A. Natural C. Civil
B. Industrial D. Penal
47. The following except one, are included in civil liability. The exception is
A. Restitution C. Indemnification
B. Reparation D. Compensation
48. The obligation begins only from a day certain or upon the arrival of the period
A. Ex die C. Conditional
B. In diem D. With a period
50. Where two or more prestations have been agreed upon, and all of them must be performed, the
obligation is
A. Alternative C. Conjoint
B. Facultative D. Solidary
53. Action where a person in possession of certain property may bring an action against the
conflicting claimants to compel them to interplead and litigate their several claims among
themselves.
A. Garnishment C. Injunction
B. Interpleader D. Attachment
54. X is under obligation to deliver Y’s car to the latter. However, before delivery Z destroys the car.
Which one of the following is not correct
A. X’s obligation to give the car to Y is extinguished
B. X is allowed to recover from Z
C. Y has the right to bring an action against Z
D. X is not obliged to give Y an equivalent value of the car.
55. When the debtor binds himself to pay when his means will permit him to do so, the obligation is
A. Conditional C. simple
B. pure D. with a period
56. Ray signs a promissory note and binds himself to pay Rex P100,000 plus 15% per annum interest
on June 30,2014.
A. Before June 30, 2014, Rex can demand payment
B. If on June 30, 2014 Ray is paying Rex, the latter can refuse the payment
C. Ray can compel creditor Rex to accept payment before June 30, 2014
D. Because the period is for the benefit of the debtor and creditor, Rex can refuse any tendered
payment before June 30, 2014
57. The debtor shall lose the right to make use of the period in the following cases, except:
A. When he becomes insolvent
B. When he violates any undertaking in consideration of which the creditor agreed to the
period.
C. When the debtor attempts to abscond
uc cpa review www.certscollege.org www.mirsreview.com
BL.M-1401.Law on Obligations.MC
D. When he does not furnish any guaranty or security to the creditor
58. D is obliged to give C a specific ring. The parties agreed that D may give a specific bracelet as a
substitute. Which of the following is true?
A. If the ring is lost through a fortuitous event before substitution, 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.
59. A entered into a contract with B by which A promised to deliver at price stipulated in the contract.
Such delivery is to be made on February 14, 2001 with penalty in case of default. In this case, no
further demand by B on A is necessary to consider A in delay because:
A. time is of the essence of the contract
B. the obligation expressly so provides
C. the demand would be useless
D. answer not given
60. When the period is “on or before a date”, the debtor has the benefit of the period. This benefit is
lost and the obligation becomes demandable when:
A. The debtor attempts to abscond.
B. after contracting the obligation, the creditor suspects the debtor of becoming insolvent.
C. The guarantee given by the debtor is not acceptable to the creditor
D. Demand by creditor could be useless
61. One of the following shall produce the effect of payment of debts:
A. delivery of check C. delivery of promissory note
B. tender of Central Bank notes D. dacion en pago
62. A promissory note signed by A dated March 15, 2015 is worded as follows “I promise to pay B the
sum of fifty thousand pesos (P50,000) provided that if she should fail in October 2015 CPA Exam,
she shall return to me the said amount.” The above note gives rise to an obligation with:
A. suspensive condition C. resolutory condition
B. casual condition D. answer not given
64. In tender and consignation, if after consignation is made, the creditor allows the debtor to
withdraw the thing deposited in court, which of the following is incorrect?
A. Co-debtors, guarantors and securities are released from the obligation unless they
consented.
B. The obligation remains to subsist.
C. The obligation is extinguished.
D. None of the above.
65. D owes C P10, 000 payable on December 25, 2015. Later D forced C to sign a promissory note for
P10, 000 payable on December 25, 2015. If all 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 the approval of the court
D. Answer not given
66. X has been missing for sometime leaving no one to manage his properties. A and B jointly took
charge of the management thereof. However, due to the fault of A, the properties of X were
damaged. The liability therefore to X for damages shall be:
A. only A shall be liable
B. both shall be jointly liable
C. both shall be solidarily liable
D. they are not liable since X is at fault for having abandoned his properties
67. A owes B sum of money evidenced by a promissory note which has prescribed. X, without the
knowledge of A, paid B his debt. Later A reimbursed X for the payment of the latter to B although
he has no obligation to do so. After payment, A now wants to recover his payment to X on the
ground that he was not obliged to reimburse him. Which of the following is correct?
A. A can recover his reimbursement to X to prevent unjust enrichment on X’s part at the
expense of A
B. A cannot recover because he has the civil obligation to reimburse X for the latter paid his
debt to B
C. A cannot recover because the payment partakes of a natural obligation
D. A cannot recover since there was reimbursement by mistake
68. A bought strawberry jams from a grocery store of Ray Moon Ace Calla Lily Corp. and was
hospitalized due to food poisoning as a result of toxic substance contained in the said jam sold by
the Ray Moon Ace Calla Lily Corp. A is now suing the said corporation for damages. Decide:
A. A has no right to claim damages from the producer because there was no contract between
them.
B. Ray Moon Ace Calla Lily Corp., is not liable to A because the latter was negligent in eating the
strawberry jams despite the presence of harmful substance therein.
70. When the debtor abandons or transfers all his properties to his creditors so that the creditors may
sell the properties and out of the net proceeds the creditors recover their claims, this is called:
A. dacion en pago
B. tender of payment and consignation
C. payment by cession
D. remission
72. Where demand by the creditor shall be necessary in order that delay may exist
A. When time is of the essence of the contract
B. When demand would be useless
C. When the obligor has expressly acknowledged that he is in default
D. When the obligor requested for an extension of time
73. Novation which changes the object or the principal condition of the obligation
A. Real C. Mixed
B. Personal D. Partial
75. Novation which changes the object and parties of the obligation
A. Real C. Mixed
B. Personal D. Partial
www.mirsreview.com www.certscollege.org uc cpa review
BL.M-1401.Law on Obligations.MC
76. The act of putting somebody onto the shoes of the creditor enabling him to exercise all the rights
and actions that could have been exercised by the latter.
A. Agency C. Subrogation
B. Partnership D. Novation
77. XYZ are jointly and severally liable to Andrew for P30,000 which matures on June 15, 2013. On
May 1, 2013, X paid Andrew for the whole amount of the debt. If on December 1, 2013, X will be
reimbursed by Y, the latter will be liable for:
A. P10,000 with interest from June 15, 2013 to December 1, 2013
B. P10,000 without interest
C. P10,000 with interest from May 1, 2013 to June 15, 2013
D. P10,000 with interest from May 1, 2013 to December 1, 2013
78. A, B, and C solidarily debtors owe solidary creditors X and Y P299,999.00. X remitted the entire
obligation in favor 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 favor extend to the benefit of B and C
under the principle of “all for one and one for all”.
D. A can recover from B and C their respective share of the debt.
79. A owes B P150,000 due on October 31, 2013. A executed a mortgaged in favor of B on A’s
building to guaranty the obligation. On October 5, 2013, the mortgaged building was totally lost
due to an earthquake. On October 18, 2013, B demanded payment from 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 guarantee was lost even though through a
fortuitous event, unless the debtor can mortgage another property that is equally
satisfactory.
D. Yes. The debt becomes due at once because the period’s benefit is given solely to the
creditor thereby giving the creditor the right to demand performance even before the due
date.
80. An obligation ceases to be alternative and becomes a simple obligation in the following cases,
except:
A. When the debtor has communicated his choice to the creditor
B. When the right of choice has been expressly granted to the creditor and his choice has been
communicated to the debtor.
81. A, B, C and D are joint creditors of E and F, solidary debtors in the amount of P100,000.00. How
much can A, B and C collect from E?
A. A, B and C could collect P50,000.00 from E.
B. A, B and C could collect P75,000.00 from E.
C. A, B and C could collect all the P25,000.00 from E.
D. A, B and C could collect P25,000.00 from E and P75,000 from F.
82. X and Y are solidary debtors of A, B, C and D, joint creditors to the amount of P80,000. How much
can A collect from X?
A. A could recover P80,000 from X. A, in turn has to give to B, C and D P20,000 each.
B. A could recover P40,000 only from X.
C. A could recover P20,000 only from X
D. A could recover P80,000 from X. A, in turn does not have to give to B, C and D P20,000 each
83. 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.
84. A, B, and D, solidary debtors, are obliged to give V, W, X, Y and Z, joint creditors, P200,000.00
A. V may collect from C P200,000.00
B. V may collect from C P40,000.00
C. V may collect from C P50,000.00
D. V may collect from C P10,000.00
85. This is a promissory note: “ I promise to pay A, B and C the sum of P45,000.” (signed) D, E, and F.
A. F is obliged to pay C P15,000.00 C. F is obliged to pay C P145000.00
B. F is obliged to pay C P13,999,000.00 D. F is obliged to pay C P16,000.00
88. 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 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 the debt will pass on the heirs of C.
D. S cannot collect because the law prohibits the transmission of the credit right.
89. A and B promised to deliver a particular car valued at P100,000 to C on or before December 15,
2013. December 15, 2013 came and upon demand by C of delivery from A and B, A is willing to
deliver but B refused to deliver. In the case at bar:
A. An action for specific performance will lie against both A and B
B. Both A and B shall be liable for P50,000 each with damages
C. A shall be liable for P50,000 without damages and B shall be liable for P50,000 with damages
D. C can demand delivery of the car from A or B
90. A owes B who has 11 legitimate children, P99,000 payable on demand on December 31,2013.
A. If A dies before December 31, 2013, B cannot collect from the heirs of A.
B. If A dies before December 31, 2013, B can collect from the heirs of A
C. If B dies, his eleven legitimate children cannot recover from A his obligation
D. If both A and B die, the heirs of B can collect from the heirs of A
91. X by mistake delivered to A and B a sum of money which should have been delivered to C and D. X
now demand the return of the same from A and B. The liability of the latter for the sum of money
to which they are not entitled shall be:
A. A and B shall be liable solidarily
B. A and B shall be liable jointly
C. They are not liable for having received the money in good faith
D. X has no right to recover as he was negligent in the delivery of the money
94. A, B, C, and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P200,000.00
A. V may collect from B P200,000.00
B. V may collect from B P40,000.00
C. V may collect from B P50,000.00
D. V may collect from B P10,000.00
95. The loss or deterioration of the thing intended as a substitute through the negligence of the
obligor does not render him liable.
A person alternatively bound by different prestations shall completely perform one of them.
A. True, true C. False, true
B. True, false D. False, false
96. A, B, C and D, solidary debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P39,897.00
A. V may collect from D P39,897.00 C. V may collect from D P15,357.00
B. V may collect from D P14,123.00 D. V may collect from D P10,001.00
97. A, 19, B, 18, and C, 17, are solidary debtors of X in the amount of P90,000.00
A. X may collect from A P90,000.00
B. X may collect from B P60,000.00
C. X may collect from C P90,000.00
D. X may not collect because the obligation is voidable, C being a minor.
98. A, B and C owed mancomunada solidaria P15,000 to D as evidenced by a promissory note due on
September 30, 2003. The note prescribed on October 1, 2013. On October 10, 2013 A paid D. In
this case, A is:
A. entitled to collect P5,000 each from B and C
B. not entitled to reimbursement from his co-debtors for the shares of the latter
C. not entitled to recover from D
D. answer not given
100. 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. P75,000 C. P150,000
B. P100,000 D. P50,000
101. In which of the following instances does legal subrogation does not apply?
A. When a creditor pays another creditor who is preferred even without the debtor’s
knowledge.
B. When the third person, not interested in the obligation, pays with the express or tacit
approval of the debtor.
C. When a third person pays the creditor without the knowledge or against the will of the
debtor and yet entitled to beneficial reimbursement.
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.
102. D owes C Php1M. G is the guarantor. A stranger, S paid the debt of D without the knowledge of
the latter. In this case:
A. If D fails to pay S, the latter can compel G to pay him.
B. If G pays S, the former can demand reimbursement from D.
C. S cannot compel G to pay him.
D. D has no obligation to reimburse S because he paid without the consent of D.
103. A owes B Php 1M. 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 even if 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 insolvency was of public
knowledge or known to him when he delegated the debt
104. A owes B P10,000. C pays B P5,000. Now B and C are the creditors of A to the amount of P5,000
each. Suppose A has only P5,000. Which is correct?
A. B and C should divide the Php 5,000 equally
B. C should be preferred
C. A may choose to pay
D. B should be preferred.
105. X is obliged to give Y a specific car on July 15, 2000. X did not deliver the car on July 15, 2000. On
July 20, 2000, an earthquake destroyed the building where the car was parked and the car was
destroyed. Is X still liable?
A. No, considering that no demand to deliver was made by Y and the specific thing was lost due
to fortuitous event, hence the obligation is extinguished.
B. No, the obligation is extinguished, even if the debtor is already in default, because the debtor
can plead impossibility of performance.
C. Yes, X is already in legal delay, thus the obligation to deliver the lost specified thing is
converted to monetary claim for damages.
D. Yes, the creditor can instead demand for a substitute of equivalent value from the debtor.
106. C is the creditor of D in the amount of P50,000. G is the guarantor of D. D paid C partially with
P20,000. A, not knowing the partial payment of D and against the will of D, paid C the amount of
P50,000. What is the effect of this payment in the obligation?
A. The obligation is extinguished. A cannot recover any amount from D, but a can demand
reimbursement from G in the amount of P50,000.
B. The obligation is extinguished. A can demand P30,000 from D because this amount benefited
D, or, A having been subrogated into the rights of C, can proceed against G.
C. The obligation is not extinguished. A’s payment being against the will of D does not
extinguish the obligation.
D. The obligation is extinguished. A can demand P30,000 from D, but if D cannot pay, A cannot
ordinarily proceed against the guarantor G because A is not entitled to subrogation.
107. A obliged himself to pay X P300,000 in 30 days plus a penalty of P120,000 if he fails to pay the
obligation in due time. A failed to pay the obligation in P30 days. X can demand from A:
A. the principal of P300,000 plus P120,000 penalty.
C. S cannot ask reimbursement from A because the payment by S is without consent and
against the will of A.
D. S can ask refund from X because the payment by S was against the will of A.
109. A is obliged to give B 10 kilos of sugar, which of the following is not correct
A. B can demand that A obtain the sugar and deliver it to him
B. B can just buy 10 kilos of sugar and charge the expenses to A
C. A can insist on just paying B damages or the monetary value of the sugar
D. B may require another person to deliver the sugar and charge the expenses to A
110. A is obliged to give B, at A’s option either object No. 1, Object No. 2, or Object No. 3. If all objects
were lost thru A’s fault, which is correct?
A. The value of the first thing lost plus damages must be given to B
B. The value of the last thing lost plus damages must be given to B
C. The value of any of the things lost plus damages must be given to B
D. The obligation is extinguished
6F J&T Bldg., R. Magsaysay Blvd., Sta. Mesa, Manila Academic Review and Training School,
(02) 3921853| www.mirsreview.com
mirs@gmail.com
Inc.
2F/3F Crème Bldg., Abella St., Naga City
(054) 472-9104 | artscparev@yahoo.com
Southern Mindanao Academic Review and 2nd Floor Lourdes Bldg., Lapulapu St. Agdao, Davao City
Training Services (082) 3041374| www.reviewer-online.com
2F Ritzlen bldg., Lukban St., General Santos City support@reviewer-online.com | www.rol-eclassroom.com
(63) 922 8753012