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BUSINESS LAW Atty. Macmod, CPA

2018 Edition
OBLIGATIONS - 01

I. Identification (Basic Concept/Principles)

______________ 1. Legal reason why courts can take cognizance of a case and give legal
remedies.
______________ 2. The fitness to be the subject of legal relations.
______________ 3. The power to do acts with legal effects.
______________ 4. Rule of conduct promulgated by legislative power and obligatory to all.
______________ 5. Incorporated to the principal naturally or artificially.
______________ 6. Added to the principal for its completeness.
______________ 7. Non-compliance of obligation when it falls due.
______________ 8. It is normally an exempting circumstance in obligations
______________ 9. Negligence resulting to an obligation.
______________ 10. Deliberate act of evading the normal compliance of an obligation.
______________ 11. One in which a debtor may validly pay a monetary obligation.
______________ 12. Means no partial payment or performance is allowed.
______________ 13. Debtor abandons his property to his creditor as full payment of
obligation.
______________ 14. The deposit of a thing in legal form when the creditor refuses to accept
or cannot receive it.
______________ 15. The legal basis of quasi-contracts.
______________ 16. One person becomes the debtor and creditor of himself.
______________ 17. Two persons became debtor and creditor of each other.
______________ 18. Gratuitous abandonment by the creditor of his rights.
______________ 19. Change of debtor without old debtor’s consent.
______________ 20. Extinguishment of obligation by passage of time.

KINDS OF OBLIGATIONS:

______________ 21. a. Not legally enforceable. / in accordance with natural law.

______________ b. Legally enforceable. / in accordance with positive law.

______________ c. In accordance with both natural and positive law.

______________ 22. a. Obligation governed by the Civil Code.

b. Obligation governed by the Code of Commerce and other special
laws.
______________ 23. a. An obligation without a condition or terms.
______________ b. An obligation whose efficacy depends of the fulfillment, or non-
fulfillment of a future and uncertain event.
______________ c. An obligation subject to a term.
______________ 24. a. In either case, the obligation is demandable at once.
______________ 25. a. Obligation wherein only one party is liable.

______________ b. Obligation wherein obligation is pro-rated among the parties.

______________ c. Obligation wherein each party is entitled to or liable for the entire
obligation.
______________ 26. a. Where only one prestation is involved.
______________ b. Where all prestation are due and demandable.
______________ c. Where only one of the several prestations due had to be
preformed.
______________ d. Where one prestation is due but may be substituted by the debtor
with another
______________ 27. a. An obligation to give.
______________ b. An obligation to do or not to do.

______________ 28. a. An obligation capable of partial performance.

______________ b. An obligation incapable of partial performance.

______________ 29. a. An obligation based on law.

______________ b. An obligation based on the agreement of the parties.

______________ 30. a. Can stand alone.

______________ b. Depends on another obligations.
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II. TRUE OR FALSE

31. In Culpa Aquiliana, negligence is presumed in the injury.

32. D obliged himself to give C P1,000,000 if the latter would not kill X, a third person. In this case, both the
condition as well as the obligation are valid.
33. In alternative obligation all things due must be performed.
34. In a solidary obligation the remission of the whole debt is a donation to all the debtors.
35. In facultative obligation the right to choose can be given to the creditor.
36. A person civily liable is also criminally liable.
37. Every person obliged to give something is also obliged to take care of it with due diligence of a good
father of a family always.
38. The creditor has the right to the fruits of the thing from the time the obligation is constituted.
39. An obligation subject to resolutory condition is demandable regardless of the effects of the happening of
the event.
40. Payment made by the debtor to a third person who is not the creditor will not extinguish the obligation as
a rule.
41. Any waiver of an action for future fraud if done voluntarily by parties is valid.
42. An obligation payable “as soon as possible” is an obligation with a period for the benefit the creditor only.
43. D obliged himself “to pay C the sum of P50,000 which he owes him when he (D) feels like it”. This kind
of obligation is valid and legally enforceable.
44. Solidarity may be presumed.
45. Condonation is generally gratuitous.
46. Whoever pays on behalf of the debtor with or without his knowledge can compel the creditor to
subrogate him.
47. Dation in payment is governed by Insolvency Law..
48. In expromision, the new debtor’s insolvency may revive the original debtor’s obligation.
49. Negotiorum gestio is a contract based on the principle of unjust enrichment.
50. When a debtor voluntarily pays an obligation that has prescribed already, he may still recover under
solution indebiti.

51. A source of obligation where negligence resulted to crime:

a. culpa contractual
b. quasi-contract
c. culpa delictual
d. culpa aquiliana

52. Which is not a source of obligation?

a. Law
b. Culpa Aquilana
c. Mora Solvendi
d. Quasi Contract

53. Statement No. 1: D oblige himself to give C a Toyota car tomorrow. If D failed to deliver tomorrow
after demand is made C may compel D to do his obligation and may ask for damages.
Statement No. 2: D oblige himself to deliver his only car to C tomorrow. If D failed to deliver tomorrow
after demand is made C's right is to ask a third person to deliver a car to him at the expense of D
plus damage.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No 2 is true

54. Which of the following is considered as quasi-contract?

a. Solutio indebiti
b. When the third person, without the knowledge of the debtor, pays the debt
c. Reimbursement due the person who saved property during fire or storm without the
knowledge of the owner.
d. All of the above.

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

a. When a person voluntarily takes charge of another's abandoned business or property
without the owner's consent.
b. When something is received and there is no right to demand it and it was delivered
through mistake.
c. When a person is appointed by a court to take the property or business of another.
d. None of the above.

56. The wrongful act or tort which causes loss or harm to another is called:
a. Damages
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b. Damage
c. Injury
d. Liability

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

a. obligation to pay P5,000
b. obligation to deliver Toyota INNOVA
c. obligation to deliver 50 cavans of rice
d. obligation to give a delimited generic object

58. Statement No. 1: An obligation which has for its object the delivery of a "delimited generic" object may
be lost by reason of fortuitous e3vent.
Statement No. 2: There can be no delay in an obligation not to do.
a. Both statement are true
b. Both statements are false
c. Statement No. 1 is true while statement NO.2 is false
d. Statement No. 1 is false while statement No. 2 is true

59. Also known as punitive damages

a. Moral damages
b. Exemplary damages
c. Actual damages
d. Nominal damages

60. "I'll give you my car one year after your death." The obligation is
a. valid, because the event is sure to come.
b. valid, the obligation is conditional.
c. valid, but disregard the condition.
d. void, not legally possible.

61. Statement No. 1: The concurrence of more than one creditor or more than one debtor in one and the
same obligation implies solidarity.
Statement No. 2: Solidarity covers the juridical tie and the object of obligation.
a. Both statements are true
b. Both statements are false
c. Statement No, 1 is true while statement NO.2 is false
d. Statement No. 1 is false while statement NO.2 is true

62. Statement NO. 1: "I will give you a NOKIA Phone if you will not marry X this year. If by the end of this
year, both parties are alive and no marriage has taken place, my obligation is extinguished.
Statement NO. 2: "I will give you P10,000 if I decide to go to Cebu City tomorrow. This obligation is
valid.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; NO.2 is true

63. Statement NO. 1: If the obligation does not fix a period, but from its nature and the circumstances, it
can be inferred that a period was intended, the court may fix the duration thereof. Once it is fixed by
the court the parties cannot change the fixed date for performance.
Statement NO. 2: "I will give you P10,000 if X dies next year." This is an obligation with a period.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

64. Which obligation is not valid?

a. "I promise to give you P100,000 on December of the current year"
b. "I promise to give you P100,000 if my mood dictates".
c. "I Promise to give you P100,000 if your patient dies".
d. "I promise to give you P100,000 if you pass the October C.Y. CPA Board Examination."

65. Which of the following is an obligation with a period for the benefit of both the debtor and the creditor?
a. Payable if I like
b. Payable when you like
c. Payable on or before December 25, of the current year
d. Payable on December 25 of the current year

66. Which of the following obligations is not subject to a period?

a. payable soonest
b. payable "little by little"
c. payable whenever "I like it"
d. payable "when my means permits me to"

67. A and B signed a promissory note to borrow P6,000 from X, Y and Z, payable in 6 months time. B
gave in pledge a P10,000 diamond ring as security for the amount borrowed. How much can Y collect
from B?
a. P1,000
b. P6,000
c. P2,000
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d. P3,000

68. If in the situation given above, the diamond ring is returned by agreement to B, which of the following
statement is correct?
a. Principal obligation is extinguished
b. Only P2,000 of the obligation is extinguished
c. Only P3,000 of the obligation is extinguished
d. Accessory obligation is extinguished.

69. A, Band C executed a promissory note worded as follows:

We promise to pay X, Y and Z the sum of P90,000
(Sgd,) A, B and C
a. A is obliged to pay to X, Y and Z P90,000
b. A is obliged to pay X P30,000
c. A is obliged to pay X P60,000
d. A is obliged to pay X P10,000

70. Statement No. 1: When the fulfillment of the suspensive or resolutory condition depends upon the
sole will of the debtor, the conditional obligation shall be void.
Statement No. 2: If the original obligation is subject to a suspensive or resolutory condition and the
contract is novated the new obligation shall be under the same conditions unless otherwise
stipulated.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No.1 is false; No. 2is true

71. In contracts and quasi-contracts, the liability of the debtor who acted in good faith:
a. Extends to all natural and probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.
b. Extends only to results intended but excluding exemplary damages.
c. Extends to all damages which may be reasonably attributable to the nonperformance of
the obligation.
d. Extends to all damages which may be renounced in advanced

72. Statement No. 1: In negotiorum gestio the debtor is also known as officious manager.
Statement No. 2: Force majeure is always an exempting circumstance.
a. Both statements are true
b. Both statements are false
c. Statement No. 1 is false while statement No.2 is true
d. Statement No. 1 is true while statement No.2 is false

73. Debtor obliged himself to deliver to creditor 100 cavans of rice on June 1, 2018. On said date, D
failed to make delivery despite repeated demands by C. In this case:
a. C has no remedy under the law
b. C can compel D to deliver 100 cavans of rice plus damages
c. C may ask a third person to deliver 100 cavans of rice to him, the value recoverable from
D plus damages.
d. Convert obligation to cash.

74. D obliged himself to paint the house of C or to paint the picture of C in his house (SALA) in an
standing position, using 10 by 10 canvass. Later, because of financial reverses, C sold his house to
X. Which of the following statements is correct.
a. The obligation of D is extinguished because he cannot make a choice
b. D may just paint the picture of C
c. D may cancel the contract and ask for damages
d. Contract is voidable

75. The officious manager or gestor is liable for any fortuitous event in all of the following, EXCEPT:
a. If he has undertaken risky operations which the owner was 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 bad faith.

76. Statement No. 1: D obliges himself to give C a specific ring, upon failure, to give C P5,000. This is a
case of facultative obligation.
Statement No. 2: D obliges himself to give C a specific ring. However, if he so desires, D may instead
give C P5,000. This is an example of an obligation with a penal clause.
Given these examples, which statement is correct?
a. Both obligations are valid but both are mislabeled as to their classification as obligations.
b. Both obligations are not valid.
c. Both obligations are valid and are properly labeled as to their classification as obligations.
d. Both statements are invalid and improperly labeled as to their classification as obligations.

77. A is obliged to give B his only car on September 1 of the current year. On the said date, A did not
deliver. On September 2 of the current year, an earthquake completely destroyed the car. Is A still
liable?
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a. No. Considering that no demand to deliver was made by B and the specific thing was lost,
due to fortuitous event, 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. A is already in legal delay, thus the obligation to deliver the lost specific thing is
converted into monetary claim for damages.
d. Yes. The creditor can instead demand for a substitute of equivalent value from the debtor.

78. A1, A2 and A3 oblige themselves solidarily to give C a specific car valued P12,000. On the due date,
C demanded delivery but the debtors failed to deliver. The next day, while A1 still in possession of the
car, it got lost due to fortuitous event. The right of C is
a. None, obligation is totally extinguished
b. Proceed against any of the debtors for the value and damages
c. Proceed against A1 only, because he is the one is possession at the time it was lost
d. Proceed against A2 or A3 but only P4,000 each.

79. The debtor shall lose every right to make use of the period except:
a. When he does not furnish a guaranty or security to the creditor
b. When after the obligation has been constituted he becomes insolvent, unless he gives a
guaranty or security for the debts
c. When the debtor attempts to abscond
d. When the debtor violates any' undertaking in considerations of which the creditor agreed
to the period.

80. A owes B P100,000 due on December 12 of the current year. A mortgaged his house to B as
guaranty for the debt. Shortly, however, the mortgaged house was completely destroyed by typhoon
"Nitang". Thereafter, B demanded payment from A before due date. Is B's demand valid?
a. No. The obligation is one with a definite period, thus the creditor cannot demand fulfillment
of the obligation as such would be prejudicial to the rights of the debtor.
b. No. The obligation is' extinguished because the object of the obligation is lost through a
fortuitous event.
c. Yes. The debt becomes due at once because the guaranty was lost even through a
fortuitous event, unless the debtor can mortgage another property that is equally
satisfactory.
d. Yes. The debt becomes due at once because from the tenor of the obligation, the period
established is for the benefit of the creditor solely thereby giving the creditor the right to
demand performance even before the date stipulated.

81. The creditor is entitled to recover damages and interest in addition to the penalty except:
a. When the parties so agreed
b. When the debtor refuses to pay the penalty
c. When the debtor is guilty of fraud in the fulfillment of the obligation
d. When the debtor is guilty of negligence in the fulfillment of the obligation

82. “Vin Diesel will continue giving Tommy Lee the latter’s meal allowance until he finds a job”, is an
obligation subject to:
a. a resolutory period
b. a suspensive condition
c. a resolutory condition
d. a suspensive period

83. D obliged to give C, either object No. 1 valued P15,000; or object No. 2 valued P10,000; or object No.
3 valued P5,000. All the objects were lost due to D’s fault in the following order stated. Remedy of the
creditor if choice is given to him is:
a. D’s obligation is extinguished
b. D’s obligation is to pay the value of object No. 1 plus damages
c. C’s right is to demand the value of any of the object plus damages
d. Pay P5,000 plus damages

84. In question No. 83 if object No. 1 is lost due to fortuitous event; No. 2 is lost due to debtor’s fault; No.
3 is subsisting; Choice belongs to the debtor. Decide.
a. The right of C is to demand the value of object No. 2 plus damages
b. C has no right because he did not communicate what object the debtor will deliver
c. The obligation of D is to deliver object No. 3
d. D’s obligation is totally extinguished.

85. The distinction between period and condition is

a. Period may or may not happen
b. Condition will always happen
c. Period may refer to a past event unknown to the parties
d. Period is certain to happen unlike condition

86. I will give you a specific car if you will not marry X this year, C.Y. Which of the following statements is
incorrect?
a. If on December 25, X died and no marriage took place, my obligation becomes effective
(not extinguished) because the expected event cannot occur anymore
b. If on December 25 you marry X, my obligation is extinguished because you violated the
condition
c. If the year has ended, and no marriage took place, both parties are still alive, my
obligation becomes effective (not extinguished) because the time indicated has already
elapsed
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d. If on December 25, X entered the convent, the obligation can be demanded immediately
because it is clear that the marriage will not take place anymore.

87. D obliged himself to give C a specific car if the latter cannot make a circle that is at the same time a
square.
a. The obligation is impossible, therefore void.
b. The obligation is void because the condition is outside the commerce of man.
c. D cannot be obliged to deliver at all.
d. Valid and enforceable

88. Statement No. 1: Obligation with an in diem period is demandable at once.

Statement No. 2: In facultative obligations, there are two objects due but the obligor can deliver one
thing due and the obligation is extinguish.
a. No. 1 is true; No. 2 is false
b. No. 1 is false; No. 2 is true
c. Both are true
d. Both are false

89. A-1 and A-2 are solidary debtors of B-1, B-2 and B-3, joint creditors in the amount of P90,000. How
much can B-3 collect from A-2?
a. B-3 could collect P30,000 from A-2.
b. B-3 could collect P90,000 from A-2 and give P30,000, each to B-1 and B-2.
c. B-3 could collect P45,000 from A-2 and give P13,000, each to B-1 and B-2.
d. B-3 could collect P15,000 from A-2 and P13,000 from A-1.

90. Statement No. 1: A solidary creditor can assign his rights even without the consent of the other
creditors.
Statement No. 2: In an obligation that is impossible of division, the debt can be enforced only by
proceeding against all the debtors. If one of the debtors should be insolvent, the other shall not liable
for his share.
a. Both are true.
b. Both are false.
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

91. Statement No. 1: Legal, compensation takes place by operation of law even if the parties may not be
aware of it.
Statement No. 2: The indivisibility of an obligation necessarily implies solidarity.
a. Both statements are true
b. Both statement are false
c. Statement NO.1 is true while statement NO.2 is false
d. Statement NO.1 is false while statement NO.2 is true

92. Example NO. 1: D owes C P10,000 due on December 25. C owes D P6,000 due on December 25.
D's obligation is guaranteed by G. On the due date D is insolvent. G is liable to C for P10,000, he (G)
cannot set up compensation because he is not a principle debtor.
Example NO. 2: D owes C P10,000 payable on December 25. Later D through intimidation, was able
to make C sign a promissory note stating that C is indebted to D for the same amount. In here, D
cannot be required to pay C P10,000 because he (D) can set up compensation against C.
a. Both examples are true
b. Both are false
c. Only No. 1 is true; No.2 is false
d. Only No. 1 is false; No. 2 is true

93. Obligation may be modified by:

a. Changing their object or principal conditions.
b. Substituting the person of the debtor.
c. Subrogating a third person in the rights of the creditor.
d. All of the above

94. Which of the following is not a special mode of payment?

a. Dacion en pago
b. Payment by Cession
c. Tender of payment
d. Consignation alone without the need of tender of payment in cases provided for by law

95. A and B are solidary debtors of X and Y, solidary creditors to the amount of P4,000. On the due date
with the consent of Y, X renounced in favor of A the entire obligation. Which of the following is
correct?
a. B shall give A P2,000
b. Y can still collect from A or B P2,000.
c. Y can collect from X P2,000.
d. X has no obligation to reimburse Y any amount

96. The act of abandoning all his properties in favor of his creditors so that the latter may cause their sale
and apply the proceeds thereof to their claims proportionately is called:
a. dacion en pago
b. set off
c. payment by cession
d. tender of payment with consignation
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97. A and B are the debtors and .X and Yare the creditors in a solidary obligation to the tune of P80,000.
On due date, X renounced in favor of A the entire obligation which was validly accepted by A. Which
of the following is true?
a. B shall give P40,000 to A
b. Y can collect from X P40,000
c. Y can still collect from A or B the
d. A can collect P4.o,OOO from B.

98. The following, except one, are requisites of payment as a mode of extinguishing an ordinary
obligation. Which is the exception?
a. complete or full payment
b. payment in due course when the obligation is due and demandable
c. payment using negotiable instrument
d. payment using legal tender, except if payable in foreign currency

99. Proof of pecuniary loss is necessary for the award of:

a. Liquidated damages
b. Exemplary damages
c. Actual damages
d. Temperate damages

100. All are secondary modes of extinguishing on obligation except one:

a. Compromise
b. Illegality
c. Impossibility
d. Performance

101. Statement No. 1: Dacion en pago , totally extinguishes the whole obligation.
Statement No. 2: In obligation with penal clauses, it is necessary for the creditor to show proof of
actual damages suffered by him on account of the non-performance of the obligation by the debtor.
a. Both statements are true
b. Both statements are false
c. Statement No. 1 is true while statement No. 2 is false
d. Statement No. 1 is false while statement No. 2 is true

102. In three of the following cases, facultative compensation shall prosper? Which is the exception?
a. gratuitous support
b. civil liability arising from crime
c. mutuum
d. depositum

103. Statement No. 1: The creditor may be compelled to accept payment in checks as long as the check is
negotiable.
Statement No. 2: As a rule in payments involving foreign currency, the basis of payment is the
exchange rate at the time of constitution of obligation.
a. Both statements are true
b. Both statements are false
c. Statement No. 1 is true while statement No. 2 is false
d. Statement No. 1 is false while statement No.2 is true

104. Novation changing the creditor without debtor's approval:

a. Subrogation
b. Expromision
c. Delegacion
d. Conventional novation

105. In tender and consignation: if after consignation is made, the creditor allowed the debtor to withdraw
the thing deposited in court, which of the following statements is incorrect.
a. Co-debtors, guarantors, and sureties are released from the obligation unless they
consented
b. The obligation remain to subsist
c. The obligation is extinguished
d. Obligation is not extinguished

106. Statements No.1: "I promise to pay within 2 years" is an obligation with a period, the creditor having a
right to demand payment within 2 years from the date of the instrument.
Statement No. 2: Ten sacks of corn cannot be compensated (conventional compensation) by ten
sacks of rice.
a. Both are true
b. Both are false
c. No. 1 is true, No. 2 is false
d. No. 1 is false, No.2 is true

107. Example 1 - D promised to give C a specific car valued, P1 00,000 after C has killed X. Later, after
the killing the contract was novated instead of giving C a specific car he will just give a specific land to
be delivered on February 28, CY. Meantime, both parties died. In here, the heirs of C may compel the
execution of the second contract, that is, the delivery of the specific land.
Example 2 - S sold to B a specific residential house situated in Bulacan for P1M, unknown to both
parties one (1) hour before the sale the property was totally gutted by fire caused by electrical defect.
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In here, B can be required to pay the price of the sale, because the subject is determine S's obligation
to deliver is extinguished, while B's obligation remain to subsist.
a. Both example are true
b. Only No.2 is true, while No. 1 is false
c. Only NO.2 is false, while No. 1 is true
d. Both examples are false

108. Mr. Debtor owes Mr. Creditor who has two (2) legitimate children, P50,000 payable on December 31
of the current year. Which of the following is correct?
a. If Mr. Debtor dies before December 31 of the current year, Mr. Creditor cannot collect from
the heirs of Mr. Debtor.
b. If Mr. Debtor dies before December 31 of the current year, Mr. Creditor can collect from
the heirs of Mr. Debtor.
c. If Mr. Creditor dies, his two (2) legitimate emancipated children cannot recover from Mr.
Debtor his' obligation.
d. If both Mr. Debtor and Mr. Creditor die, the heirs of Mr. Creditor can collect from the heirs
of Mr. Debtor.

109. On October 4, of the current year, A is indebted to B for P50,000 for a 20-day period. A proposed to B
that X will pay A's debt, and that A will be free from all liabilities. B and X agreed to the proposal. On
October 25 of the current year, when B tried to collect from X, he finds that X is insolvent. AT the time
of delegacion, X was already insolvent but this was not known to A. The insolvency is not of public
knowledge. So B sues A on the ground that it was A who made the proposal and that A really
guaranteed X's solvency. Decide.
a. A is liable because he is presumed to have guaranteed X's solvency.
b. A is not liable, because A does not know the insolvency of X at the time of delegation and
neither was the insolvency of public knowledge.
c. A is liable because he did not exercise due diligence in determining the insolvency of X.
d. A is liable because X agreed to the proposal to make himself solidary liable for the
obligation.

110. D1 and D2 are joint debtors of C1, C2, C3, and C4, solidary creditors to the amount of P1 ,
000,000. How much can C1 collect from D1?
a. 500,000
b. 1,000,000
c. 250,000
d. 125,000

111. D owes C P10,000 payable on December 25, while C owes D P10,000 payable on December 30. In
here, C can set up compensation (or cum pondere) on December 25, and this is called:
a. Legal
b. Partial
c. Judicial or “set-off”
d. Facultative

112. An extinguishment of obligation that may result to gift tax is

a. Confusion
b. Compensation
c. Condonation
d. Annulment

113. 1st Statement: The parties may not agree upon the compensation of debts which are not yet due.
2nd Statement: Anything paid may be recovered with fruits and interests, the obligor NOT being aware
of the period.
a. True, True
b. False, False
c. True, False
d. False, True

114. X, Y and Z solidarily bound themselves to pay to solidary creditors A, B and C the amount of
P75,000.00. The loan was secured by a mortgage on B's land. Out of gratuity, A, in a public
instrument, remitted the obligation in favor of X. In this case, which statement is correct?
a. The principal obligation is extinguished
b. The real estate mortgage is extinguished
c. Both the principal obligation and the mortgage are extinguished by remission
d. Both the principal and the accessory obligations subsist.

115. Statement No. 1: Just before the obligation became due and demandable, the debtor proposed to the
creditor that he would give him a specific car instead of paying P150,000.00, and which proposal was
accepted by the creditor. Here, there is extinguishment of an obligation by way of dacion en pago.
Statement No. 2: After substitution in facultative obligations, the loss of the principal through the fault
or negligence of the debtor shall render him liable for damages in favor of the creditor.
a. Both are true
b. Both are false
c. No. 1 is true, No.2 is false
d. No. 1is ,false, No.2 is true

116. 1st Statement: Partial loss of the thing in an obligation or extreme difficulty to perform is a ground to
modify an obligation.
2nd Statement: Remission even without debtor's ACCEPTANCE is valid if made before due date.
a. True, True
 Pa ge |9

b. False, False
c. True, False
d. False, True

117. Statement No. 1: “I will give you P10,000 if you pass the May 2019 CPA examination”. On the first
day of the examination, I poisoned you and you failed to take the examination. The next day my
obligation is extinguished because you cannot pass the examinations anymore.
Statement No. 2: “Novation may be presumed.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

118. Legal subrogation is presumed in the following cases except:

a. When the creditor pays another creditor who is preferred
b. When a stranger pays the obligation with debtor’s consent
c. When a guarantor pays the obligation
d. When the mortgagor pays the mortgagee

119. Amazed by the skill of X who can paint portraits using paint brushes inserted in his right armpit, Y
entered unto a contract with the former to have his own portrait done and gave X P50,000 as full
payment therefore. After he has started painting the portrait but before its completion, thru the fault of
X, drunk and under the influence of drugs, X was hit by a speeding car causing the doctors to have
his right arm amputated, In this case what is the remedy of Y?
a. Nothing, as the service became impossible by reason of an act independent of the will of
the debtor.
b. Equivalent performance in terms of damages
c. Specific performance by compelling X to go on painting Y's portrait.
d. Substituted performance by allowing a third person to do his portrait with expenses
therefore charged to X.

120. In novation which of the following is incorrect?

a. If the new obligation is void, original obligation shall subsist
b. In expromission, the insolvency of the new debtor shall not revive the action of the
creditor-against the original debtor .
c. If the original obligation is subject to a suspensive condition, the new obligation is not
subject to the same condition unless stated
d. Delegacion if done in good faith shall not revive the old obligation

**END**
“Most people don’t reach their goal not because of lack of talent or intelligence …but due to …
insufficient PASSION. (Quoted)
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