1. Are the following obligations valid, why, and if they
In June 1988, X obtained a loan from A and
are valid, when is the obligation demandable in
each case?
a. If the debtor promises to pay as soon as he
has the means to pay;
b. If the debtor promises to pay when he
likes;
c. If the debtor promises to pay when he
becomes a lawyer;
d. If the debtor promises to pay if his son,
who is sick with cancer, does not die within
one year.
2. Pedro promised to give his grandson a car if the
latter will pass the bar examinations. When his
grandson passed the said examinations, Pedro
refused to give the car on the ground that the
condition was a purely potestative one. Is he
correct or not?
3. In 1997, Manuel bound himself to sell Eva a house
and lot which is being rented by another person, if
Eva passes the 1998 CPA examinations. Luckily
for Eva, she passed said examinations.
a. Suppose Manuel had sold the same house
and lot to another before Eva passed the
1998 CPA examinations, is such sale
valid? Why?
b. Assuming that it is Eva who is entitled to
buy said house and lot, is she entitled to
the rentals collected by Manuel before she
passed the 1998 CPA examinations?
Why?
4. In a deed of sale of realty, it was stipulated that the
buyer would construct a commercial building on the
lot while the seller would construct a private
passageway bordering the lot. The building was
eventually finished but the seller failed to complete
the passageway as some of the squatters, who
were already known to be there at the time they
entered into the contract, refused to vacate the
premises. In fact, prior to its execution, the seller
filed ejectment cases against the squatters.
The buyer now sues the seller for specific
performance with damages. The defense is that the
obligation to construct the passageway should be
with a period which, incidentally, had not been fixed
by them, hence, the need for fixing a judicial
period.
Will the action for specific performance of the buyer
against the seller prosper?
5.
executed with Y as solidary co-maker a promissory
note in favor of A for the sum of P200, 000.00. The
loan was payable at P20, 000.00 with interest
monthly within the first week of each month
beginning July 1988 until maturity in April 1989. To
secure the payment of the loan, X put up as
security a chattel mortgage on his car, a Toyota
Corolla sedan. Because of failure of X and Y to pay
the principal amount of the loan, the car was
extrajudicially foreclosed. A acquired the car at A’s
highest bid of P120, 000.00 during the auction sale.
After several fruitless letters of demand against X
and Y, A sued Y for the discovery of P80, 000.00
constituting the deficiency.
Y resisted the suit raising the following defenses:
a) That Y should not be liable at all because X was
not sued together with Y.
b) That the obligation has been paid completely by
A’s acquisition of the car through “dacion en pago”
or payment by cession.
c) That Y should not be held liable for the
deficiency of P80, 000.00 because he was not a
co-mortgagor in teh chattel mortgage of the car,
which contract was executed by X alone as owner
and mortgagor.
d) That assuming he is liable, he should only pay
the proportionate sum of P40, 000.00.
Decide the defense with reasons.
6. Four foreign medical students rented the apartment
of Thelma for a period of one year. After one
semester, three of them returned to their home
country and the fourth transferred to a boarding
house. Thelma discovered that they left unpaid
telephone bills in the total amount of P80, 000.00.
The lease contract provided that the lessees shall
pay for the telephone services in the leased
premises. Thelma demanded that the fourth
student pay the entire amount of the unpaid
telephone bills, but the latter is willing to pay only
one fourth of it. Who is correct? Why?
7. Joey, Jovy and Jojo are solidary debtors under a
loan obligation of P300, 000.00 which has fallen
due. The creditor has, however, condoned Jojo's
entire share in the debt. Since Jovy has become
insolvent, the creditor makes a demand on Joey to
pay the debt.
1. How much, if any, may Joey be compelled to
pay?
2. To what extent, if at all, can Jojo be compelled
by Joey to contribute to such payment?
8. Butch got a loan from Hagibis Corporation
(Hagibis) but he defaulted in the payment. A case
for collection of a sum of money was filed against
 him. As a defense, Butch claims that there was
already an arrangement with Hagibis on the
payment of the loan. To implement the same,
Butch already surrendered five (5) service utility
vehicles (SUVs) to the company for it to sell and
the proceeds to be credited to the loan as payment.
Was the obligation of Butch extinguished by reason
of dacion en pago upon the surrender of the
SUVs? Decide and explain.
9. Jerico, the project owner, entered into a
Construction Contract with Ivan for the latter to
construct his house. Jojo executed a Surety
undertaking to guarantee the performance of the
work by Ivan. Jerico and Ivan later entered into a
Memorandum of Agreement (MOA) revising the
work schedule of Ivan and the subcontractors. The
MOA stated that all the stipulations of the original
contract not in conflict with said agreement shall
remain valid and legally effective. Jojo filed a suit to
declare him relieved of his undertaking as a result
of the MOA because of the change in the work
schedule. Jerico claims there is no novation of the
Construction Contract. Decide the case and
explain.
10. A, B, C, D and E made themselves solidarity
indebted to X for the amount of P50, 000.00. When
X demanded payment from A, the latter refused to
pay on the following grounds:
a) B is only 16 years old.
b) C has already been condoned by X.
c) D is insolvent.
d) E was given by X an extension of 6 months
without the consent of the other four co-debtors.
State the effect of each of the above defenses put
up by A on his obligation to pay X, if such defenses
are found to be true.
11. True or False
The renunciation by a co-owner of his undivided
share in the co-owned property in lieu of the
performance of his obligation to contribute to taxes
and expenses for the preservation of the property
constitutes dacion en pago.
12. Define compensation as a mode of extinguishing
an obligation, and distinguish it from payment.
13. Felipe borrowed $100 from Gustavo in 1998, when
the Phil P - US$ exchange rate was P56 - US$1.
On March 1, 2008, Felipe tendered to Gustavo a
cashier's check in the amount of P4,135 in
payment of his US$ 100 debt, based on the Phil P -
US$ exchange rate at that time. Gustavo accepted
the check, but forgot to deposit it until Sept. 12,
2008. His bank refused to accept the check
because it had become stale. Gustavo now wants
Felipe to pay him in cash in the amount of P5, 600.
Claiming that the previous payment was not in
legal tender, and that there has been extraordinary
deflation since 1998, and therefore, Felipe should
pay him the value of the debt at the time it was
incurred. Felipe refused to pay him again, claiming
that Gustavo is estopped from raising the issue of
legal tender, having accepted the check in March,
and that it was Gustavo's negligence in not
depositing the check immediately that caused the
check to become stale.
a) Can Gustavo now raised the issue that the
cashier's check is not legal tender?
b) Can Felipe validly refuse to pay Gustavo again?
c) Can Felipe compel Gustavo to receive US$100
instead?
14. X, who has a savings deposit with Y Bank in the
sum of P1, 000, 000.00, incurs a loan obligation
with the said Bank in teh sum of P800, 000.00
which has become due. When X tries to withdraw
his deposit, Y Bank allows only P200, 000.00 to be
withdrawn, less service charges, claiming that
compensation has extinguished its obligation under
the savings account to the concurrent amount of
X’s debt. X contends that compensation is
improper when one of the debts, as here, arises
from a contract of deposit. Assuming that the
promissory note signed by X to evidence the loan
does not provide for compensation between said
loan and his savings deposit, who is correct?
15. Stockton is a stockholder of Core Corp. He desires
to sell his shares in Core Corp. In view of a court
suit that Core Corp. has filed against him for
damages in the amount of P10 million, plus
attorney’s fees of P1 million, as a result of
statements published by Stockton which are
allegedly defamatory because it was calculated to
injure and damage the corporation’s reputation and
goodwill. The articles of incorporation of Core Corp.
provide for a right of first refusal in favor of the
corporation. Accordingly, Stockton gave written
notice to the corporation of his offer to sell his
shares of P10 million. The response of Core corp.
was an acceptance of the offer in the exercise of its
rights of first refusal, offering for the purpose
payment in form of compensation or set-off against
the amount of damages it is claiming against him,
exclusive of the claim for attorney’s fees. Stockton
rejected the offer of the corporation, arguing that
compensation between the value of the shares and
the amount of damages demanded by the
corporation cannot legally take effect. Is Stockton
correct? Give reason for your answer.