OBLIGATIONS AND CONTRACTS

I
1. As a general rule, in order for the debtor to be considered in legal delay, the
necessary demand to be made is:
a. Judicial Demand
b. Extrajudicial Demand
c. A or B
d. A and B

2. One of the following is not a requisite of cause in a contract. Which one is it?
a. It must exist.
b. It must be clearly stated in the contract.
c. It must not be false.
d. It must be lawful

3. Ana, without authority from Mark, sold the latter's car in the name of the
latter. The contract is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

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

a. Dacion en pago
b. Payment by cession
c. Tender of payment and consignation
d. Consignation alone without the need of tender of payment in cases provided
for by law
e. None of the above
5. Statement 1: Solutio Indebiti arises when there is voluntary management of
the property or affairs of another without the knowledge and/or consent of the
latter.
Statement 2: Solutio Indebiti occurs when something was delivered to someone
who has no right to receive the thing delivered.
a. Only statement 1 is true b. Only statement 2 is true
c. Both statements are true
d. None of the statements are true

6. Ayee owes Buko P 50,000. The obligation is secured by the guaranty of Cat,
and a real mortgage on Ayee's lot. Subsequently, Cat, without the knowledge of
Ayee, paid Buko the amount of P 50,000.
a. Cat can go after Ayee to collect. If Ayee cannot pay, Cat can foreclose the
mortgage because he is entitled to subrogation.
b. Cat can go after Ayee to collect. If Ayee cannot pay, Cat can foreclose the
mortgage because he is entitled to compensation.
c. Cat can go after Ayee to collect. If Ayee cannot pay, Cat can foreclose the
mortgage because he is entitled to condonation.
d. Can can go after Ayee to collect but he is not entitled to any other right
because the payment he made to Buko was without the knowledge of Ayee.

7. 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 not necessary
8. A promissory note signed X and dated January 15,2000 is worded as follows:
"I promise to pay Y the sum of Fifty Thousand Pesos (50,000) provided that if
she fail the October 2000 CPA examination, she shall return to me said amount".
The above note gives rise to an obligation with:
a. Suspensive condition
b. Suspensive period
c. Resolutory condition
d. Resolutory period
9. Chan is obliged to deliver a lightstick on February 2, 2021 to Felix. Chan didn't
deliver the lightstick on February 2. On February 10, 2021, Felix went to Chan's
house to demand for the lightstick, however, Chan still didn't comply. On
February 15, 2021, Felix wrote a letter to Chan demanding the delivery of the
lightstick. Chan delivered the lightstick on February 25, 2021. Chan is considered
to be in legal delay on:
a. February 2, 2021
b. February 10, 2021
c. February 15, 2021
d. February 25, 2021

10. Statement 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 2: Ten sacks of corn can be compensated (legal
compensation) by ten sacks of rice
a. Both are true
b. Both are false
c. Statement 1 is true and 2 is false
d. Statement 1 is false and 2 is true

11. Ana owes Brett P10,000 payable on February 25,2021. Later, Ana forces
Brett to sign a promissory note for P10,000 also payable on February 25,2021.
If all the other requisites of compensation are present, are both debts
extinguished?
a. Yes, under legal compensation
b. No, B's consent was obtained by force
c. Yes, with approval of the court
d. No, the contract is unenforceable
12. Xander delivered by mistake a sum of money to Damon and Lucas a sum of
money which should have been delivered to Cassie and Maddie. Xander now
demands the return of the same from Damon and Lucas. The liability of the
latter for the sum of money to which they are not entitled shall be:
a. Damon and Lucas are not liable for having received the money in good faith.
b. Damon and Lucas are not liable because it was Xander's mistake.
c. Damon and Lucan shall be liable jointly.
d. Damon and Lucas shall be liable jointly and severally.

13. Juyeon has an obligation to deliver to Hyunjae a piece of land on April 15,
2021 with a fair market value of Php 5,000,000 on the date of delivery. However,
Hyunjae must dance as a condition. Hyunjae fulfilled this condition on July 1,
2021, and the fair market value on that date increased to Php 8,000,000. Juyeon
insists that he should be entitled to the increase in fair market value of the land
since Hyunjae only fulfilled the condition after the agreed date of delivery.
Decide:
a. Juyeon is entitled to the increase in fair market value because the
improvement happened naturally and through passage of time, and Hyunjae is
considered to be in delay after April 15, hence, any benefit shall not inure to
Hyunjae. This is a case of mora accipiendi.
b. Juyeon must deliver the piece of land on July 1, 2021. However, he can
demand to be paid by the amount of increase of the fair value, and if Hyunjae
will not pay, the obligation will be extinguished and Juyeon can take back the
piece of land.
c. Hyunjae is entitled to the improvement because it happened naturally and
through passage of time, hence, it shall inure to Hyunjae. Hyunjae is not in legal
delay because the obligation is subject to a suspensive condition.
d. The obligation is extinguished after April 15, 2021.

14. Which of the following contracts is valid and enforceable?

a. A contract of sale between Sally and Betty, both of legal age, of a computer
worth P 20,000. No document was signed by Sally, the seller, and Betty, the
buyer who has given a down payment of P 4,000. Sally is set to deliver the
computer upon full payment of the price.
b. A contract of lease between Sally, 16, and Betty, 25. The lease which was in
writing and signed by both parties, had for its object a drilling equipment, and
had a duration of 3 years. The drilling equipment is now in possession of Betty
who has paid the rental of P 1,000 for the first month to Sally.
c. A contract of donation of a lot between Sally, 30, and Betty, 24. The donation
and the acceptance are in a private document. Betty has since occupied the lot.
d. A 6-month contract for the supply of carabao meat by Sally to Betty.
Although the slaughter of carabao is prohibited by law, the contract is now on its
third month and Sally has made carabao meat deliveries worth P 30,000.

15. A was badly in need of money. He offered to sell his parcel of land to B for
P100,000. B agreed and paid A the P100,000 and A signed a receipt. When B
wanted to register the sale, he needed a Deed of Absolute Sale. What can B do?
a. B may sue A to return the P100,000 under the legal maxim "No one shall
unjustly enrich himself at the expense of another"
b. B may posses and utilize A's land as a buyer in good faith
c. B may compel A to execute the Deed of Absolute Sale because the contract is
valid.
d. B cannot get back the P100,000 because the contract is not enforceable

II
1. The following, except one, are the characteristics of void or inexistent contract.
Which is the exception?
a.they are not subject to ratification.
b. the right to raise the defense of illegality cannot be waived.
c. the action or defense for the declaration of the nullity or
inexistence of the contract does not prescribe.
d. the defense of illegality of the contract is available to a third person whose
interest is not directly affected.

2. First: A contract of insurance is a contract of adhesion.

Second: A contract of insurance is an alcatory contract.
a.only the first is true
b.only the first is false
c. both are false
d. both are true
3. If the offer is made by the letter or telegram from the moment the offerer
transmits the notification of acceptance to the offerors, as when the letter is
placed in the mailbox, the contract is already accepted.
a. expedition theory
b. either expedition theory or manifestation theory
c. manifcatation theory
d. cognition theory

4. Kristian Gay, while driving his school bus negligently, hit a tree, inflictin upon
his student-passenger and a pedestrian severe bodily injury. What is the source
of Kristian Gay's obligation towards his student-passenger?
a. quasi-delict
b. quasi-contract
c. delict
d. contract

5. These elements are so-called, because they may be present or absent

depending upon whether or not partics have agreed upon them. In other words,
they are excluded, unless included.
a. accidental
b. natural
c. essential
d. original

6. Sara Tancredi alleged that Michael Scofield promised to give her ten hectares
of land. This is in consideration of Sara's meritorious service to Michael when
Sara, being a nurse, took care of him while he was still inside the prison. Michael
pleads in defense that since the promise was not in writing, then it is
unenforceable under the Statute of Frauds. Decide.
a. the statute of frauds is applied because A has rendered services already.
b. the promise is unenforceable. Under the statute of frauds, contracts involving
real property must be in writing to be enforceable.
c. the statute of frauds can apply to partially executed contracts.
d. the statute of frauds is inapplicable here because the promise to give the land
is not a sale of real property.

7. Rafael Carrascoso bought a "first class" ticket from AirFrance. As he checked

in, the manager downgraded him to economy on the ground that a white man
had a better right to his seat. Rafael Carrascoso suffered the discomfort and
embarrassment of the downgrade. He sued the AirFrance for quasi-delict but
AirFrance argued that, since his travel was governed by a contract between
them, no quasi-delict could arise. Is AirFrance correct?
a. YES, since quasi-delict presupposes the absence of a pre-existing contractual
relation between the parties.
b. NO, the breach of contract may in fact be tortious as when it is tainted as in
this case with arbitrariness, gross bad faith, and malice.
c. YES, since the facts show a breach of contract, not a quasi-delict.
d. NO, denying Rafael Carrascoso the comfort and amenities of the business
class as provided in the ticket is a tortious act.

8. James owes Nadine 20,000. Enrique, a friend of James, approaches Nadine

and tells her: "I will pay you what James owes you. From now on, consider me
your debtor and not James. He is to be excused. Do you agree?" Nadine flashed
her sweetest smile and said yes. All of the following statements are not correct,
except:
a. there can only be expromision upon actual payment of 20,000 by Enrique.
b. the obligation of James is extinguished by delegacion.
c. there is no novation here because the agreement was made without the
knowledge of James.
d. James is relieved from liability even if Enrique is insolvent or does not fulfill
his obligation.

9. Which among the following contracts is void?

a. a contract of sale where B, buyer, twisted the arm of 5, seller, so that 5 would
sign the deed of sale.
b. a contract of barter between 5, insane, and B, 17 years old.
c. a contract of sale where B, aimed a gun at the wife of 5, so that 5 would sign
the deed of sale.
d. a contract for the sale of a cow which is suffering from contagious disease.
10. A wanted to kill B, so he hired an assassin C to kill B. C demanded 1M but A
is short of cash. So A sold his house and lot to D for 1M in order to pay C for
the latter to kill B. What is the status of the contract of sale?
a. the sale is void because the motive of A is illegal.
b. the sale is rescissible at the instance of D because he would be damaged by
the illegal motive of A.
c. the sale is voidable because of the failure of A to disclose his motive to D.
d. the sale is valid because the illegality of the motive of the parties do not
affect its validity.

11. Harry obliged himself to deliver a specific car to Pamela on December 25,
2010, with a stipulation that Harry is liable even if the thing is lost due to a
fortuitous event, and without the need of a demand. On due date, the car was
totally damaged by a strong typhoon. Which of the following is correct?
a. Pamela can require another person to deliver a car, expenses chargeable to
Harry.
b. obligation is totally extinguished.
c. obligation remains to subsist, but converted into a monetary consideration.
d. Pamela can compel Harry to deliver another car.

12. "Death because of AIDS" is a

a. demand
b. period
c. condition
d. fortuitous event

13. A, 35 years old, B, 25 years old, and C, 15 years old, are solidary debtors of
X, 45 years old, in the amount of 9,000.
a. X may collect from A 9,000.
b. X may collect from A 6,000.
c. X may collect nothing because the obligation is voidable, C being a
minor.
d. X may collect from A 3,000.
14. A kind of period or term in which the obligation becomes demandable upon
arrival of the day certain.
a. definite
b. indefinite
c. ex die
d. in diem

15. O is the owner-operator of Xerex busliner. D, while drunk, drove one of O's
Xerex buses and accepted passengers at a discounted rate. D then drove the bus
recklessly, and inevitably, it crashed into an electric post, resulting in serious
physical injuries to the passengers. The latter, knowing that D is insolvent, filed a
suit for tort against D's employer, O, but O raised the defense of having exercised
extraordinary diligence in the safety of the passenger. Is O's defense
meritorious?
a. NO, as in tort actions, the proper defense is due diligence in the selection and
supervision of the employee by the employer.
b. YES, as a common carrier can rebut the presumption of negligence by raising
such a defense.
c. YES, as a common carrier can invoke extraordinary diligence in the safety of
passengers in tort cases.
d. NO, as B, the common carrier's employee, was obviously negligent due to his
intoxication.

16. This is adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff for any loss suffered by him.
a. temperate damages
b. moral damages
c. liquidated damages
d. nominal damages
17. On a certain year, D was obliged under a contract executed on January 1 to
deliver an agricultural land to C on February 1. D, however, actually delivered the
land and the fruits thereof to C on March 1. On January 1, what right, if any,
does Chave?
a. no right at all
b. Jus in re
c. usufruct
d. Jus in personam

18. Tabura was appointed guardian of Tayabas, the latter being 17 years old.
Tayabas sold her parcel of land in writing to Ulalan valued at 1,000,000 for
700,000, suffering lesion of more than one-fourth. What is the status of the
contract?
a. void
b. unenforceable
c. voidable
d. rescissible

19. On July 15, 2006, X entered into a contract with Y. On February 10, 2007, X
discovered that fraud was committed at the time he entered into the contract, a
fraud that vitiated his consent. The action for annulment shall be brought
a on February 10, 2007
b. within three years from the time of the fraud
c. within four years from February 10, 2007
d. within four years from the time A entered into the contract
20. Edgar died leaving his estate, to wit: Assets valued at 1,000,000 and
Accounts Payable to Ike amounting to 1,500,000. The legal heirs of Edgar
voluntarily paid 1,500,000. The heirs of Edgar cannot recover the excess
payment of 500,000 because it constitutes a:
a. natural obligation
b. civil obligation
c. quasi-contract
d. quasi-delict

21. L leased his property to X (lessee). X subleased part of the premises to SL

(sub-lessee) in violation of the condition of the contract of lease between L and
X. L therefore goes to court to rescind the contract. Here, SL cannot object to the
rescission on the ground that if the contract is rescinded the sublease would be
affected, because of what characteristic of contract?
a. liberty
b. relativity
c. mutuality
d. consensuality

22. On 1 July 2019, Serrano offered to sell his only BMW car for 2,000,000 to
Benitez who was interested in buying the same. In his letter to Benitez, Serrano
stated that he was giving Benitez up to 31 July 2019 to make up his mind
whether to buy the car or not. On 25 July 2019, Serrano personally went to
Benitez to inform him that he was no longer willing to sell the car unless the
price was increased to 2,400,000 because another buyer was interested in
buying the car for the said amount of 2,400,000. Which of the following
statements is correct?
a. Benitez may compel Serrano to sell to him the car for 2,000,000. b. Serrano
may validly withdraw his offer to Benitez because the option was not founded
upon a consideration.
c. Serrano may not withdraw his offer until after the lapse of the option period
that he gave to Benitez.
d. the increase in price made by Serrano was not valid because it was made
within the option period.
23. State the correct order of laws or rules governing innominate contracts: I.
Customs of the place
II. Rules governing the most analogous nominate contracts
III. Provisions of Titles I and II of Book IV of the Civil Code
IV. Stipulation of the parties
a. IV, III, II, I
b. I, II, III, IV
c. II, I, IV, III
d. III, IV, I, II

24. Which of the following is not really a special form of payment?

a. payment by cession
d. dacion en pago
c. tender and consignation
d. application of payment

25. When during a fire, flood, storm, or other calamity, property is saved from
destruction by another person without the knowledge of the owner, the latter is
bound to pay the former just compensation based on what precise source of
obligation?
a. quasi-contract
b. solution indebiti
c. negotiorum gestio
d. ex lege

26. The degrees of negligence under Roman Law, from the least to the greatest
are:
a. culpa levissima, culpa levis, culpa lata
b. culpa lata, culpa levis, culpa levissima
c. culp evis, culpa lata, culpa levissima
d. culpa lata, culpa levissima, culpa levis
27. John Zeus borrowed 10,000 from Krisette. Clandestine is the guarantor of
John Zeus's obligation to Krisette. Without the knowledge or consent of John
Zeus, Lurd paid Krisette 10,000. Later, Lurd demanded from Clandestine
(as guarantor of John Zeus) reimbursement of the amount he (Lurd) paid to
Krisette. Can Lurd claim reimbursement from Clandestine?
a. YES, because John Zeus was benefited of the payment by Lurd Ed. b. NO,
because Lurd Ed can not be subrogated in the place of the creditor.
c. YES, because Lurd Ed acquires the right of the creditor.
d. NO, because Lurd Ed is a third person to the contract.

28. In a contract of sale executed by 5 and B, it appears that 5 sold his motor
vehicle to B for 500,000. It turned out, however, that 5 owns three (3) motor
vehicles, namely: (a) Ford Ecosport valued at 600,000; (b) Honda City VALUED AT
400,000; and (c) Isuzu Crosswind valued at 500,000. Which of the following is
correct?
a. the parties can seek the interpretation of the word "motor vehicle" as it is
ambiguous.
b. there is no contract at all.
c. the parties can ask for annulment of the contract.
d. the parties can ask for reformation.

29. Mr. Gor bought a big bike from Bata, a minor, for 100,000. One week later,
Mr. Gor discovered that Bata was a minor at the time of sale, such that, he lost
no time in filing a complaint in court to annul the sale. Will the action prosper?
a. NO, the right to annul the sale is given to Bata.
b. YES, Bata cannot file the action to annul the sale because he is a minor.
c. YES, Bata being a minor is incapacitated to enter into contract.
d. NO, unless there is lesion of more than 1/4 of the value of the property.
30.5 offered to sell to B his house and lot for 10,000,000. In order to pressure B
into buying said house and lot, T, a very good friend of 5, threatened B with
death as a result of which B accepted the offer of 5. It turns out now that the
market value of the house and lot is 15,000,000. Is the contract of 5 and B
valid?
a. the issue of the contract being voidable is not relevant because B will not
have the contract avoidable because it is actually favorable to him.
b. it is not B but S or T who can file the action for annulment.
c. the contract is valid since it is very clear that 5 did not apply the intimidation.
d. the contract is voidable because the consent given by B is anyway vitiated
even if the intimidation was employed by a third person.

III

1. The following partnership contracts were presented to you for evaluation:

I. A partnership engaged in the sale of office supplies with a capital of 100,000
broken down into: cash, 30,000; office supplies for sale, 50,000; and office
equipment, 10,000; Land, 10,000. The agreement is in a private instrument.
II. A partnership engaged in the lease of office spaces with a capital of 700,000
broken down into: land, 100,000; building, 500,000; cash, 80,000; and office
equipment, 20,000. The agreement is in a public instrument attached to which is
the inventory of the land and the building signed by the partners. The
agreement is not recorded with the Securities and Exchange Commission.
III. A partnership is engaged in the trading of computers whose name is
"Lament Enterprises, Ltd." It has a total capital of 500,000 broken down into
100,000 cash and computers worth 400,000, contributed by both general and
limited partners. The agreement was subscribed and sworn to by all the
partners before a notary public but not recorded with the Securities and
Exchange Commission.
Based on the foregoing:
a. II and III have separate juridical personality.
b. each partnership has a separate juridical personality.
c. none of the partnerships has a separate juridical personality.
d. I and II have separate juridical personality.
2. A, B, C, and D were partners. A assigned his interest in the partnership to his
son, S. 5 now wanted to join in the management of the enterprise. B, C, and D
refused. Is the partnership necessarily dissolved?
a. the partnership is dissolved because of the conveyance by A.
b. the partnership is not dissolve provided B, C, and D will allow 5 to join the
management of the enterprise.
c. the mere assignment did not dissolve the firm. This is so even if B, C, and D
did not allow 5 to participate in the firm's business conduct.
d. the conveyance of interest by A automatically dissolved the partnership.

3. True or False: A corporation sole is the same as a one person corporation

(OPC).

4. Without the written consent or ratification of the specific act by all the limited
partners, a general partner or all of the general partners have no authority to:
a. confess a judgment against the partnership.
b. do any act that would make it impossible to carry on the ordinary business of
the partnership.
c. do any act in contravention of the certificate.
d. all of the choices

5. True or False: A corporation by estoppel is no corporation at all.

6. True or False: A corporation is deemed dissolved the moment it shortens its

corporate term of existence.

7. True or False: An appraisal right is the right of the corporation to purchase

shares of stocks of stockholders.

8. Chubby and Hannah are partners in buying and selling automobiles. Chubby,
by the partner's agreement, was authorized to buy automobiles on a cash basis,
never on the installment plan. One day Chubby bought on credit or on
installment plan a car from X, a client. X did not know of Chubby's lack of
authority. Chubby's purchase was made on behalf and in the name of the
partnership. Is the partnership bound?
a. NO, because acquisition of automobiles requires the consent of all partners.
b. NO, because Chubby was not really authorized to bought on installment plan.
c. YES, because all transaction made by any partners with third person is valid
provided the latter acted in good faith.
d. YES, because although Chubby was not really authorized, still for "apparently
carrying on in the usual way the business of the partnership" Chubby is
implicitly authorized and X did not know of Chubby's lack of authority.

9. True or False: Unpaid shares have the right to receive dividends.

10. Fritz Angel, Mary Prilene, Noerine and Micay are partners where Micay is an
industrial partner and Fritz Angel, Mary Prilene, and Noerine contributed
400,000, 200,000 and 200,000 respectively. FriMaNoMi & Co. became indebted
to X in the amount of 1,800,000.
a. X must first exhaust the partnership assets amounting to 800,000 and then
hold liable jointly Fritz Angel, Mary Prilene, Noerine and micay from the balance
of 1,000,000 - but after Micay the industrial partner pays X 250,000 she can ask
reimbursement from Fritz Angel, Mary Prilene, and Noerine so that in the end
Micay as an industrial partner will not be liable for losses among themselves.
b. X can only hold liabe Fritz Angel, Mary Prilene, and Noerine as the capitalist
partners.
c. X must first exhaust the partnership asset of 800,000 and then hold Fritz
Angel, Mary Prilene, and Noerine jointly for the balance of 1,000,000.
d. X must first exhaust the partnership assets amounting to 800,000 and then
hold Fritz Angel, Mary Prilene, Noerine and Micay solidarily liable for the balance
of 1,000,000.

11. As regards a limited partner, which statement is correct?

a. he is automatically the agent of the partnership with general authority to bind
the partnership to contracts with third persons.
b. he cannot be allowed to transact business directly with the partnership of
which he is a member as this would result into conflict of interest.
c. he can only contribute money and property but not services.
d. he has no liability to partnership creditors even if he takes part in the
management of the partnership.
12. True or False: A director cannot be removed if such removal would deprive
minority stockholders or members of the right of representation.

13. A, B, and C formed a universal partnership of all present property on

February 14, 2009. A contributed 500,000, B a car worth 500,000 and C
contributed equipment worth 500,000. The partners executed an article of co-
partnership in private instrument. After operation for 5 months, A and B got
married. Did the marriage dissolve the partnership?
a. YES, the partnership is dissolved by the marriage, because there is
a change in equity among the partners.
b. NO, because spouses can enter into a universal partnership.
c. NO, the marriage did not dissolve the partnership.
d. YES, because it becomes unlawful for the business of the partnership to be
carried on or for the members to carry it on in partnership.

14. Which of the following stipulations is valid?

a. a stipulation exempting a capitalist partner from losses.
b. a stipulation excluding a capitalist partner from profits.
c. a stipulation excluding an industrial partner from profits.
d. a stipulation exempting an industrial partner from losses.

15. Allan, Beth and Chris are partners with capital contribution of 15,000, 10,000
and 5,000, respectively. Supposed on dissolution, the assets of their partnership
amount to only 46,000 and it owed Delia the amount of 50,000. Chris owes
Polly on his personal account 6,000. The partners have no separate personal
property except Chris whose separate property amounts 7,000. Which is correct?
a. Delia and Polly shall divide Chris separate property equally.
b. Delia shall be preferred as regards Chris separate property.
c. Delia and Polly shall divide Chris property pro-rata.
d. Polly shall be preferred as regards Chris separate property.
16. Wilma, Olga and Wynona agreed to form a limited partnership with Wilma
and Olga as general partners contributing 50,000 each, and Wynona as limited
partner contributing 100,000. The partnership which is to engage in the trading
of garments was named "WOW Garments Co., Limited" as indicated in the
certificate signed and sworn to by the partners before a notary public. However,
the certificate was not filed with the Securities and Exchange Commission. In the
meantime, the partners already begun operating the business and transacting
with third persons.
a. the partnership entered into by Wilma, Olga, and Wynona is void.
b. the partnership will be considered a limited partnership as indicated in its
name. Only Wilma and Olga will be liable with their separate property after the
exhaustion of partnership assets.
c. the partnership will be considered a general partnership. Accordingly, all
partners will be liable with their separate property after the exhaustion of
partnership assets.
d. Wilma, Olga and Wynona will be considered separate as sole proprietors with
each one having a capital equivalent to their respective contributions.

17. True or False: A corporation with one stockholder owning 99% of the shares
is a dummy corporation and, as such, the corporate fiction thereof may be
disregarded.

18. Which of the following losses will not cause the dissolution of a partnership?
a. loss after delivery of a specific thing where the partner contributed only its
use and enjoyment, he reserved the ownership thereof.
b. loss before delivery of a specific thing where the partner promised to
contribute only its use and enjoyment, reserving the ownership thereof.
c. loss of a specific thing after its delivery to and acquisition of its ownership by
the partnership from partner who contributed the same.
d. loss before delivery of a specific thing which a partner has promised to
contribute to the partnership.

19. True or False: Meetings of stockholders is to be presided by any of the

directors.
20. The following are the effects of unlawful partnership except: a. judicial
decree is no longer required.
b. unlawful partnership has no legal personality.
c. partners forfeit their capital whether or not it becomes an instrument or effect
of the crime.
d. partners forfeit their share in the profit.

21. True or False: The liability of a subscriber for unpaid subscription cannot be
compensated or set-off with the value of his shares nor can stock dividends
declared be applied as payment for the same.

22. True or False: An executive committee may enter into a contract on behalf of
the corporation for the sourcing out of janitorial services.

23. True or False: A barangay is a public corporation.

24. True or False: A non-voting share is entitled to vote in case of amendment of

the articles of incorporation.

25. True or False: All shares of a banking corporation are par value shares.

26. A decree by the court is necessary to dissolve a general partnership based

on three of the following grounds. Which one will not require such decree but
will cause the automatic dissolution of the partnership?
a. a partner is civilly interdicted.
b. a partner is shown to be of unsound mind.
c. a partner has been guilty of such conduct as tends to affect prejudicially the
carrying on of the business.
d. the business of the partnership can only be carried on at a loss.

27. True or False: A corporation, unlike a partnership, can only exercise express,
implied and incidental powers.
28. True or False: Board of directors may attend meetings either in person or by
proxy or by virtue of a VTA or via teleconference i.e. zoom, google meet,
facebook messenger and the like.

29. True or False: The separate personality of the corporation is a shield against
personal liability of its officers and stockholders.

30. The certificate shall be cancelled when:

a. there is change in the name of the partnership.
b. additional limited partner is admitted.
c. all limited partner cease to be such.
d. there is false or erroneous statement in the certificate.

31. True or False: Unpaid shares have the right to receive dividends.

32. True or False: The incumbent board of directors may pass a resolution to
change the date of the regular meeting.

33. True or False: Post-incorporation subscription is revocable.

34. True or False: Five (5) Chinese nationals, majority of whom are residents of
China, may form a corporation in the Philippines

35. True or False: An OPC must have one stockholder but may subsequently
have several stockholders.

36. True or False: Contracts entered into by and between corporations with
interlocking directors are valid until annulled.
37. General partners shall have no right to perform the following acts without
the written consent or ratification by all the limited partners, except: a. to have
the partnership books kept at the principal place of business of the partnership,
and at a reasonable hour to inspect and copy any of them.
b. continue the business with partnership property on the death, retirement,
insanity, civil interdiction or insolvency of a general partner, unless the right to
do so is given in the certificate.
c. admit a person as a general partner.
d. admit a person as a limited partner, unless the right to do so is given in the
certificate.

38. A and B are partners engaged in the real estate business. A learned that was
interested in buying a certain parcel of land owned by the partnership, even for
a higher price. Without informing B, A was able to make B sell to him (A) his
(B's) share in the partnership. Then A sold the land at a big profit.
a. the sale of the land to C is void since it was without the knowledge of B.
b. A is liable to B for the latter's share in the profit.
c. C is liable to B for the latter's share in the profit.
d. the partnership is dissolved when A became the sole owner.

39. True or False: Checks may be used as consideration for shares subscribed

40. A, B, C, D, E, F, and G are partners in general partnership. B and G are the

managing partners, A and C are the liquidating partners, D and E are the silent
partners and F is the secret partner. In the course of the existence of the
partnership, several business transactions were into with third person. One of
which is with Y who owes the sum of 25,000 which is due and payable las
September 2, 2007. B, in his personal capacity and also as a prominent
businessman in a different business, was able to close a deal with Y for the sum
also of 25,000 last September 2, 2007 and due and payable today. Today Y gives
B the sum of 25,000 and signs a receipt in his own name. Which of the following
statements is the correct answer?
a. the amount of 25,000 should be shared according to their stipulation.
b. the amount of 25,000 should be shared proportionally between B and the
partnership.
c. the amount of 25,000 should be shared equally between B and the
partnership.
d. correct answer not given.
e. the partnership should receive the entire 25,000.

41. True or False: A corporation, as a person, is entitled to claim moral damages

for wounded feelings and sleepless nights.

42. Which of the following is a false statement?

a. if a limited partnership is not registered, a general partnership is created.
b. if a limited partnership will be created, registration is a condition subsequent
for the creation of the limited partnership.
c. if one of the partners in a general partnership contributed a building to the
partnership, there must be a public instrument and an inventory as a
requirement, otherwise the partnership is void.
d. if a limited partnership will be created, registration is a condition precedent
for the creation of the limited partnership.

43. True or False: Ultra vires acts are illegal acts.

44. A substituted limited partner is:

a. a buyer of right of the deceased partner.
b. a person admitted as a partner by the other partners.
c. an assignee admitted to all the rights of a limited partner.
d. all of the choices.

45. Joseph and Edward entered into a universal partnership of all present
property. At the time of their agreement, Joseph had a four-door apartment
which he inherited from his father 3 years earlier. Edward, on the other hand,
had a fishpond which he acquired by dacion en pago from Robert. During the
first year of the partnership, rentals collected on the four-door apartment
amounted to 480,000; while fish harvested from the fishpond were sold for
300,000. During the same period, Edward received by way of donation a two
door apartment from his uncle. This two door apartment was rented to Ejercito
and generate a rental income of 10,000. The partners had no stipulation that
property subsequently acquire shall belong to the partnership. Which of the
following does not belong to the common fund of the partnership?
a. four door apartment, two door apartment and rental income of 10,000
b. two door apartment
c. the four door apartment and the two door apartment d. two door apartment
and rental income of 10,000

46. True or False: Corporations de facto cannot sue and be sued.

47. A, B and C were partners. While acting within the scope of the firm's
business, A committed tort against X, a third person. Is the firm liable?
a. YES, moreover A, B, and C as well as the firm itself, are liable prorata.
b. NO, because only A was at fault.
c. YES, moreover A, B and C as well as the firm itself, are liable in solidum.
d. NO, X remedy is to go after only the property of A who
committed the torts.

48. True or False: No par value shares do not have any consideration.

49. In a limited partnership, the creditor of a limited partner may charge the
interest of the indebted limited partner, the interest so charged may be
redeemed with:
a. partnership property
b. both partnership property and separate property of the general partner
cumulatively
c. separate property of any general partner
d. both partnership property and separate property of the general partner
alternatively

50. True or False: A corporation to be classified as a foreign requires that its

home country allow Filipino/domestic corporations to engage in business
thereat.

51. True or False: Non-stock corporations have capital.

52. An auditing firm composed of Certified Public Accountants may validly form:
I a partnership
II. a corporation
a. the statement is true with respect to partnership; false with respect to
corporation.
b. the statement is false with respect to partnership; true with respect to
corporation.
c. the statement is false with respect to both business organizations d. the
statement is true with respect to both business organizations

53. True or False: Voluntary dissolution of corporation where no creditors are

affected require approval of majority of the BOD and of the stockholders holding
majority of the outstanding capital stock; whereas voluntary dissolution where
there are creditors affected require approval of majority of the BOD and the
stockholders representing 2/3 of the outstanding capital stock.

IV

1.It is the juridical relation resulting from lawful, voluntary, and unilateral acts
by virtue of which the parties become bound to each other to the end that no
one shall be unjustly enriched or benefited at the expense of another.
a. Agreement
b. Vinculum juris
C. Contracts
d. Quasi-Contracts

2. This takes place when something is received when there is no right to

demand it, and it was unduly delivered thru mistake.
a. Solutio Indebiti
b. Negotiorum Gestio
c. Vinculum juris
d. Prestation
3. This happened when the creditor make a demand and the obligor fails to
deliver the thing.
a. Negligence
b. Mora solvendi
c. Mora accipiendi
d. Compensatio morae
4. Demand is not necessary to incur delay when:
a. Creditor refuses the performance without just cause.
b. The debtor is guilty of non-performance.
c. Time is the controlling motive
d. If the obligation bears interest

5. In what instance may we consider that there is no delay?

a. In civil obligations
b. In positive obligation
C.In obligation arising from crime
d.In natural obligation

6. In Accion subrogatoria the creditor may exercise all of the rights and bring all
of the actions which the debtor may have against third persons if:
a. If the account is personal
b. The debtor's acts are fraudulent
C. The debtor has performed an act subsequent to the contract, giving
advantage to other persons
d. Creditor must have the right of return against debtor

7. In Accion Pauliana Rescission, which involves the right of the creditor to attack
or impugn by means of rescissory action any act of the debtor which is in fraud
and to the prejudice of his rights as creditor provided:
a. The debt is due and demandable
b. There is a failure of the debtor to collect his own debt from 3rd persons either
through malice or negligence
c. The debtor's assets are insufficient d. The debtor has performed an act
subsequent to the contract, giving advantage to other persons

8. It causes the extinguishment or loss of rights already acquired upon the

fulfillment of the condition, that is, the happening of the event which constitutes
the condition. In other words, the fulfillment of which will extinguish an
obligation (or right) already existing.
a. Condition subsequent b. Suspensive
c. facultative condition d. positive condition

9. When the thing deteriorates with the debtor's fault, the creditor may choose
one of the following:
a.Mutual restitution
b. Rescission (cancellation) of the obligation with indemnity for damages
C. Suffer the deterioration of the Thing
d. Institute an action for negligence.

10. It is a future and certain event upon the arrival of which the obligation (or
right) subject to it either arises or is terminated.
a. Fortuitous events
b. Condition
C. Period
d. Date and time

1. When the debtor binds himself to pay when his means permit him to do so,
the obligation is:
a. Conditional
b. Pure
c. Simple
d. With a Period
2. Contracts which cannot be sued upon unless ratified, thus it is as if they have
no effect yet are:
a. Voidable
b. Rescissible
c. Void
d. Unenforceable

3. If the obligation of the debtor is "I will pay you my debt after I have arrived
from abroad," this is
a. Unenforceable
b. With a Period
c. Void
d. Conditional

4. When the characters of the creditor and the debtor are merged in one and the
same person, there is extinguishment of the obligation by:
a. Compensation
b. Merger of Rights
c. Novation
d. Remission

5. Through insidious words or machinations, A was able to induce B to enter into

a contract which without them B would not have agreed to it. There is:
a. Undue Influence
b. Fraud
c. Mistake
d. Misrepresentation

6. "A sells to B his lot and house in the city if A decides to transfer and live in
the countryside" is an example of:
a. Mixed Condition
b. Potestative Condition
c. Casual Condition
d. Resolutory Condition

7. It is a mode of extinguishing an obligation when two persons in their own

right are creditors of each other.
a. Confusion
b. Reformation
c. Compensation
d. Novation

8. A contract is in the stage of conception when:

a. There is meeting of the minds.
b. Negotiations are in progress.
c. The parties come to an agreement. d. The contract is perfected.

9. 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
b. Conditional
c. Suspensive
d. Resolutory

10. Contracts entered into in a state of drunkenness or during a hypnotic spell

are:
a. Void
b. Valid
c. Voidable
d. Legal
VI
1. When the debtor binds himself to pay when his means permit him to do so,
the obligation is:
a. Conditional
b. Pure
c. Simple
d. With a Period

2. Contracts which cannot be sued upon unless ratified, thus it is as if they have
no effect yet are:
a. Voidable
b. Rescissible
c. Void
d. Unenforceable

3. If the obligation of the debtor is "I will pay you my debt after I have arrived
from abroad," this is
a. Unenforceable
b. With a Period
c. Void
d. Conditional

4. When the characters of the creditor and the

debtor are merged in one and the same person, there is extinguishment of the
obligation by. ?

5. Through insidious words or machinations, A was able to induce B to enter into

a contract which without them B would not have agreed to it. There is:
a. Undue Influence
b. Fraud
c. Mistake
d. Misrepresentation
6. "A sells to B his lot and house in the city if A decides to transfer and live in
the countryside" is an example of:
a. Mixed Condition
b. Potestative Condition
c. Casual Condition
d. Resolutory Condition

7. It is a mode of extinguishing an obligation when two persons in their own

right are creditors of each other.
a. Confusion
b. Reformation
c. Compensation d. Novation

8. A contract is in the stage of conception when:

a. There is meeting of the minds.
b. Negotiations are in progress.
c. The parties come to an agreement. d. The contract is perfected.

9. 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
b. Conditional
c. Suspensive
d. Resolutory
10. Contracts entered into in a state of drunkenness or during a hypnotic spell
are:
a. Void
b. Valid
c. Voidable
d. Legal
11. Delay in the giving or delivering of a thing
a. Mora solvendi ex re
b. Mora solvendi ex persona
c. Mora accipiende ex re
d. Mora accipiende ex persona

12. Which of the following statements is false?

a. Obligations to give definite things and those that are not susceptible of partial
performance shall be deemed divisible.
b. Execution of a certain number of days of work shall be divisible.
c. Accomplishment of work by metrical units are divisible
d. An obligation to pay a certain amount in ten annual installments is divisible.

13. This contract is without effect unless ratified:

a. Marriage between first degree cousins
b. Contract of sale between two insane persons
c. Contract of sale between husband and wife
d. Donation between husband and wife

14. Which of the following contracts is not void ab initio?

a. Those whose object is outside the commerce of men
b. That whose object did not exist at the time of transaction
c. That which contemplates an impossible service d. That which is undertaken in
fraud of creditors
15. Rescission of contract can take place in this case
a. When the thing which is the object of the contract is legally in the possession
of a third person who acted in bad faith
b. When he who demands rescission can return whatever he may be obliged to
restore
c. Oral contract of partnership where real estate is contributed as capital
d. Agent's authority to sell land is given orally.
16. A defective contract where damage or lesion is essential
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

17. An instrument may be reformed

a. Simple donations inter vivos wherein no condition is imposed
b. Wills
c. When the instrument does not express the true intention of the parties due to
mistake
d. When the real agreement is void

18. Three of the following contracts are void. Which one is not?
a. Oral contract of partnership of three partners and capital contribution is more
than P3,000 in cash
b. Written contract contemplating impossible services
c.. Oral contract of partnership where real estate is contributed as capital
d. Agent's authority to sell land is given orally.

19. When a third person assumes the payment of the obligation even without
the knowledge and consent of the debtor but with the consent of the creditor
a. There is novation
b. There is delegation if debtor is released c. There is subrogation
d. There is expromission if debtor is released

20. Which of the following is not an element of legal compensation?

a. Debts to be compensated are due and demandable
b. There is controversy or adverse claim over any debts to be compensated
c. There are two or more debts of the same kind
d. There are two or more persons who are creditor or debtors of each other.
Question: Why is it important that obligation in contractsbe faithfully fulfilled??
Answer: Laws are enacted to have order (or require the performance of a
particular action to achieve the same) Since the terms and conditions of a
contract are considered the governing laws between parties, it is necessary to
faithfully fulfill one's obligation, that is, to avoid the occurrence of dispute.
Hence, why do we have to fulfill our obligations, that is to achieving order
between the parties to the contract.

Question: How do you apply the laws on obligations and contracts to everyday
activities and business dealings?
Answer: We apply laws on obligations and contracts unconsciously to our daily
activities. One will not notice that in performing a simple common task you have
applied several principles on obligations and contracts. Like, for example, buying
a piece of pandesal, the buyer will offer to buy and the seller will accept. At this
point, once the seller and buyer agrees to the object and price, and their minds
have met; each of them will not just rescind or refuse to comply. Even without
knowledge of law, one will not just back out from the perfected sale. Then, after
the perfection of the contract of sell; unknowingly, they will go on to
consummate the same. The buyer will hand the money and the seller, in return,
will hand over the pandesal. A clear example of reciprocal obligations, isn't?
If the money given is more than the price of the pandesal, the seller will give
the change. That is because he knows no one should be enriched at the expense
of another; hence, he has the obligation to return what is not due him. Likewise,
if what was delivered to the buyer is more than what he paid for, he will return
the same under the same principle, creating obligation to an implied return.
In a simple, but very common, transaction, the parties are not aware that they
are applying the basic principles of law on obligations and contracts. They might
not be well versed, or even, have not had any formal education, yet they apply
these simple principles of law unconsciously. Thus, If you ask: how we apply
laws on obligations and contracts on our daily activities, we apply it unknowingly,
but instinctively, depending on one's value.
NOTES:
1. The creditor has a right that is enforceable against a definite passive subject
PERSONAL RIGHT
2. It is a thing that is particularly designated or physically segregated from all
others of the same class.
DETERMINATE THING
3. Determinate thing
A TOYOTA CAR WITH ENGINE NO. 12345, BODY NO.34890 AND A PLATE NO. ABC
123
4. Demand must be made on the due date of the obligation in order for delay to
exist in one the following cases
WHEN THE OBLIGATION DOES NOT INDICATE WHETHER DEMAND MUST BE
MADDE OR NOT ON DUE DATE.
5. Delay on the part of the creditor
MORA ACCIPIENDI
6. There shall be no liability for loss due to fortuitous events
WHEN THE OBLIGATION IS TO DELIVER A DETERMINATE THING AND THERE
WAS NO STIPULATION AS TO THE LIABILITY OF THE DEBTOR IN CAS OF
LOSS DUE TO FORTUITOUS EVENTS
7. Following are the remedies of the creditor to pursue his claims against the
debtor.
COMPEL THE DEBTOR TO PERFORM THE SERVICE IN OBLIGATIONS TO DO
8. 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 are CORRECT?
S CAN COLLECT FROM D ALTHOUGH D AND C DID NOT AGREE THAT THE
CREDIT RIGHT WILL PASS ON TO THEIR HEIRS OF C
9. D is obliged to give C a specific car if C passes the CPA Licensure Examination.
OBLIGATION WITH A SUSPENSIVE CONDITION
10. Obligation is not immediately demandable
OBLIGATION WITH AN EX DIE PERIOD
11. Void Obligation
D IS OBLIGED TO GIVE C P5,000.00 IF D GOES TO BAGUIO
12. D is obliged to give C P10,000.00 if X dies
AN OBLIGATION WITH A PERIOD
13. When the debtors binds himself to pay when his means permit him to do so
AN OBLIGATION WITH A SUSPENSIVE PERIOD
14. Whenever a period is designated in an obligation, the said period shall be
presumed to have been established for the benefit of
BOTH THE DEBTOE AND THE CREDITOR
15. The debtor shall lose the right to make use of the period in the following
cases, EXCEPT?
WHEN HE DOES NOT FURNISH ANY GUARANTY OR SECURITY TO THE CREDITOR
16. An obligation ceases to be alternative and becomes a simple obligation
EXCEPT?
WHEN THREE PRESTATION ARE DUE BUT ONE OF THEM IS UNLAWFUL OR
IMPOSSIBLE
17. D is obliged to give C a specific watch, 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?
C MAY CHOOSE THE DELIVERY TO HIM OF THE BRACELET, OR THE PRICE OF
THE WATCH OR THE PRICE OF THE RING PLUS DAMAGES
18. D is obliged to give a specific ring. The parties agreed that D may give a
specific bracelet as substitute. Which statement is TRUE?
IF THE RING IS LOST THROUGH A FORTUITOUS EVENT BEFORE SUBSTITUTION,
THE OBLIGATION IS EXTINGUISHED.
19. A, B, C and D are obliged to give V, W, X, Y and Z P20,000.00
V MAY COLLECT FROM A P1,000.00
20. A, B, C and D joint debtors are obliged to give V, W, X, Y and Z, solidary
creditors P20,000.00
V MAY COLLECT FROM B P5,000.00
21. A, B, C and D solidary debtors are obliged to give V, W, X, Y and Z, joint
creditors P20,000.00
V MAY COLLECT FROM C P 4,000.00
22. A, B, C and D solidary debtors are obliged to give V, W, X, Y and Z, solidary
creditors P20,000.00
V MAY COLLECT FROM D P20,000.00
23. A, 25, B, 35, and C, 17, are solidary debtors of X in the amount of P9,000.00
X MAY COLLECT FROM A P6,000.00
24. Divisible obligation EXCEPT
TO GIVE DEFINITE THINGS
25. In an obligation with a penal clause, the creditor as a rule may recover from
the debtor in case of breach
ONLY THE PENALTY
26. STATEMENT I: The nullity of the principal obligation carries with it the nullity
of the penal clause -TRUE
STATEMENT II: The nullity od the penal clause carries with it the nullity of the
principal obligation – TRUE
27. D borrowed C P 50,000.00. The obligations is secured by a chattel mortgage
on D’s Toyota car. Subsequently, D paid C P20,000.00.
Unknown to D, T a third person pays C P 50,000.00 believing that D still owed C
such amount.
T CAN RECOVER P 30,000.00 FROM D. IF D CANNOT PAY, T CANNOT FORECLOSE
THE MORTGAGE ON D’s TOYOTA CAR
28. Concerning payment by cession EXCEPT ONE
THE CREDITORS BCOME THE OWNERS OF THE PROPERTOIES OF THE DEBTOR
THAT WERE CEDED TO THEM
29. D obtained from ABC Bank a loan of P 12,000,000.00 payable at the end of
10 years. Before maturity, an extraordinary inflation
supervened causing the value of the debt to fall P 4,000,000.00 on the date of
the maturity. On due date, D must pay ABC Bank
P36,000,000
30. B borrowed from XYZ Bank P 2,000,000.00 payable at the end of 5 years.
Before maturity an extraordinary deflation supervened
causing the value of the debt to rise to P 5,000,000.00 on the due date of
maturity. On the due date, D must pay ABC bank:
P 800,000.00
31. The money or currency which the debtor may compel the creditor to accept
the payment of a debt, whether public or private
LEGAL TENDER
32. The delivery and transmission of ownership of a thing by the debtor to the
creditor as an accepted equivalent of performance
DATION IN PAYMENT
33. D owes C the following debts: P 6,000.00 due on 12; P 6,000.00 due on
June 15; P 6,000.00 due on June 18; and P 6,000.00 due on June
20. All debts are unsecured except the debt due on June 20which is secured by
a pledge of D’s diamond ring to C. By agreement, the
benefit of the term on the 4 debts was granted to C. Assuming that D has P
6,000.00 on June 18 and is ready to pay C, which of the
following statement is CORRECT?
D MAY APPLY HIS PAYMENT OF P 6,000.00 TO ANY OF THE DEBTS DUE ON JUNE
12, JUNE 15 AND JUNE 18 SINCE THEY ARE ALL DUE AS OF JUNE 18
34. The offer made by the debtor to pay his obligation to his creditor
TENDER OF PAYMENT
35. Consignation alone without any tender of payment is sufficient in the
following cases, EXCEPT
WHEN THE CREDITOR PRESENTS THE TITLE TO THE OBLIGATION FOR
COLLECTION
36. M owes P 10,000.00. The obligation is evidence by a promissory note.
Subsequently, P assigned the note to A, A to B, B to C, and C
back to M. The obligation is extinguished by:
CONFUSION
37. In order that condonation may extinguish an obligation involving a movable
properly whose value exceeds P 5,000.00
IT IS SUFFICIENT THAT THE CONDONATION AND THE ACCEPTANCE ARE IN
WRITING, EVEN A PRIVATE ONE.
38. Not requisites of legal compensation?
THAT THE DEBTS ARE PAYABLE AT THE SAME PLACE
39. Henry, husband, and Wilma, wife, are legally separated. By order of the court
whi ch decreed the legal separation, Henry is obliged to
give a monthly support of P 10,000.00 to Wilma payable within the first five
days of the month. Wilma owes Henry P 10,000.00 by way
of a business loan. On the other hand, henry has not yet given Wilma’s support
of P 10,000.00 for this month. Both debts are already
due. Which statement is CORRECT?
WILMA MAY CLAIM COMPENSATION BUT NOT IN HENRY.
40. D owes C P 10,000.00 with F as guarantor. C on the other hand, owes D,
P8,000.00. Both debts are already due but D is Insolvent.
C MAY COLLECT FROM G P 2,000.00 BECAUSE A GUARANTOR CAN SET UP
COMPENSATION AS REGARDS WHAT THE CREDITOR OWES THE
PRINCIPAL DEBTOR
41. D borrowed P 50,000.00 from C. Subsequently, D proposed to C that T would
assume his (D’s) debt. C accepted the proposal of D.
DELEGACION
42. Refer to recent situation. Assume also that on due date, T could not pay
because of his insolvency which was in fact subsisting but was
not known for D or of public knowledge at the time that D delegated his debt.
C CANNOT HOLD D LIABLE BECAUSE HIS (D’s) OBLIGATION WAS
EXTINGUISHED WHEN HE WAS SUBSTITUTED BY T.
43. D obliged himself to give 5 grams of “shabu” to C. Later, the parties agreed
that D would instead give to C 5 sacks of rice. Which
statement is CORRECT?
THE NOVATION IS VOID BECAUSE THE ORIGINAL OBLIGATION IS VOID. HENCE,
C CANNOT DEMAND THE DELIVERY OF FIVE SACKS OF RICE FROM D.
44. On July1, 2015, D obliged himself to give C P 50,000.00 if C will marry X on
or before December 31,2015. The condition of the
obligation is
POSITIVE CONDITION
45. Refer to No 44. Statement I: The obligation of D is demandable if C marries
X on or before December 31, 2015 – TRUE
Statement II: The obligation of D is extinguished if its already January 01, 2016
and C has not yet married X – TRUE
Statement III: The obligation of D is extinguished on December 2, 2015 if X
dies on the said date and C has not yet married X -TRUE
Statement IV: The obligation is demandable if C marries X on January 01, 2016
– FALSE
46. On July 01,2015, D obliged himself to give C a specific car if C will not marry
X on or before December 31,2015. The condition of the obligation is
NEGATIVE CONDITION
47. Refer to No. 46. Refer to No 44. Statement I: The obligation of D is
demandable if C marries X on January 01, 2016 – TRUE
Statement II The obligation of D is demandable on December 2, 2015 if X dies
on the said date and D has not yet married X– TRUE
Statement III: The obligation of D is demandable if it is already January 01,
2016 and D has not yet married X -TRUE
Statement IV: The obligation is demandable if C marries X on December 2,
2015 – FALSE
48. D owes C P 5,000.00. T a third person and without any intention to be
reimbursed by D, paid the debt without the consent of D. C accepted the
payment.
THE PAYMENT IS CONSIDERED VALID BECAUSE IT WAS ACCEPTED BY THE
CREDITOR.
49. A mode of extinguishing obligations up to their concurrent amount when two
persons are principal debtors and creditors of each other
COMPENSATION
50. D owes C P 6,000.00. No date for payment was stipulated by the parties
C CAN REQUIRE D TO PAY AT ANYTIME
51. Under a contract executed on November 01, 2015, D obliged himself to give
a specific horse to C on December 10,2015, C demanded the delivery of the
horse but D did not comply. The following day, the horse was struck by lightning
and died instantly.
THE OBLIGATION OF D IS EXTINGUISHED BECAUSE THE LOSS IS DUE TO
FORTUITOUS EVENT AND D WAS NOT IN DEFAULT
52. Not Conditional Obligation
D TO PAY C P 5,000.00 AS SOON AS D HAS THE MEANS
53. Distinction between merger and compensation is that merger:
THE DEBTOR AND THE CREDITOR REFER TO ONLY ONE PERSON.
54. The passage of time as a mode of acquiring or losing a right including the
extinguishment of an obligation
PRESCRIPTION
55. Legal compensation shall not be proper in three of the following cases
EXCEPTION?
BANK DEPOSIT
56. D is a debtor of C for P 20,000.00. The debt is secured by a pledge of D’s
diamond ring which is in C’s possession. Before the due date, C voluntarily
returned the diamond ring to D. Which was extinguished by the return of the
ring?
THE PLEDGE OF THE DIAMOND RING ONLY
57. D promised to deliver specific horse to C on December 31, 2015, with the
stipulation that he will give C 100 grams of ‘shabu’ as a penalty if he fails to
deliver the horse on the said date. Which obligation is VOID?
THE PENALTY ONLY
58. If two or more persons claims the same right to collect from debtor, the
debtor’s appropriate remedy:
CONSIGNATION
59. The young and other products of animals, produces with the intervention of
human labor
NATURAL FRUITS
60. D owes C the following debts: P 4,000.00 due on February 01; P 7,000.00
due on February 05; P 5,000.00 due on February 10 and P4,000.00 due on
February 20. By agreements of the parties, the benefit of the period was given to
D. If today is February 14, and D has not paid any of the said debts but is
offering P 4,000.00 to C as payment today, to which debt may D apply the
payment?
TO THE DEBT DUE ON FEBRUARY 1 OR FEBRUARY 20 AT HIS OPTION
61. Refer to preceding No. Supposing that when d gave the payment to C, D did
not designate the debt to which the payment shall apply. Neither did C indicate
in the receipt that he issued to D which debt was being paid. Which debt is
being paid.
TO THE DEBTS DUE ON FEBRUARY 1, FEBRUARY 5 AND FEBRUARY 10
PROPORTIONATELY AT P10,000.00, P1,750.00 AND P1,250.00 RESPECTIVELY
62. It is a mode of extinguishing of an obligation which has a two-fold function.
One is to extinguishing an old obligation and the other to substitute a new in its
place
NOVATION
63. A, B and C are solidarily indebted to X for P 9,000.00. X is indebted to A for
P 9,000.00. Both debts are due
THERE IS A LEGAL COMPENSATION UP TO P9,000.00
64. Refer to the same facts except that the debtors are jointly liable to X. As a
result, which statement is INCORRECT?
THERE IS NO LEGAL COMPENSATION AT ALL
65. Concerning legal compensation
Legal compensation cannot take place if the debts have different due dates -
FALSE
Legal Compensation may take place although the debts are payable at different
places- TRUE
66. The absence of the stipulation on liability in case for fortuitous event is
generally to the advantage of the
DEBTOR
67. A stipulation that demand shall not be required in order to make the debtor
in delay is generally to the advantage of the:
DEBTOR
68. D borrowed P500,000.00 from C payable at the end of five years. Due to
supervening extraordinary inflation, the value of the debt fell to P250,000.00 on
the date of maturity. How much must D pay C on the date of maturity?
P250,000.00
69. An obligation cannot exist without a contract- FALSE
A contract can exist without an obligation- FALSE
70. Obligations are immediately demandable EXCEPT
OBLIGATION WITH A CONDITION ANTECENDENT
71. When a third person pays the creditor without intending to be reimbursed
and the debtor did not give his consent to the donation:
THE PAYMENT IS VALID AS TO THE CREDITOR WHO ACCEPTED IT
72. D owes C P30,000.00 due on April 01, 2015. C owes D P30,000.00 due on
March 15, 2015. What kind of compensation may possibly
take place today is February 14, 2015.
VOLUNTARILY
73. D owes C P20,000.00 payable on or before March 31, 2015. C is obliged to
pay D P20,000.00 on March 15, 2015. As a result, which statement is
INCORRECT?
C MAY CLAIM COMPENSATION ON MARCH 15,2015
74. Consignation, without any tender of payment, will release the debtor from
liability in the following case EXCEPT
THE CREDITOR IS CAPACITATED TO RECEIVE PAYMENT
75. D borrowed P 10,000.00 C. On due date, C was already insane. Nonetheless,
D gave C P10,000.00 to settle the debt. When C’s guardian
learned of the payment made by D, C was found to have only P3,000.00 left in
his wallet and that he had lost P1,500.00in a gambling game and used P
5,000.00 to by his food.
PAYMENT IS VALID ONLY UP TO P8,500.00
76. Not a feature of dacion en pago
THE DEDBTOR MUST BE INSOLVENT
77. Not a feature of payment by cession
THE DEBTOR IS TOTALLY RELEASED FROM HIS LIABILITIES
78. Statement concerning facultative obligation is CORRECT?
THE RIGHT TO MAKE THE SUBSTITUTION BELONGS TO THE DEBTOR ONLY
79. D is indebted to C for P100,000.00. Which is already due. D offers to give a
certified check to C to settle the debt
IF C REFUSES TO ACCEPT THE CHECK, D MAY REPLACE THE CHECK WITH 5,000
PIECES OF P20.00 BILL AND IF C REFUSE TO ACCEPT IT , D MAY
CONSIGN THE PAYMENT
80. The waiver of an action for fraud is valid in the case of
PAST FRAUD
81. D borrowed P50,000.00 from C. On due date, D offered to give his ring, his
bracelet or his necklace in payment of the deft of five days
from the due date of the original obligation. C accepted the offer. Two days
before the new due date, D’s ring was lost through his fault.
D IS NOT OBLIGED TO PAY DAMAGED TO C FOR THE LOSS OF THE RING DUE TO
HIS FAULT
82. Statement are presented:
Statement I: A quasi contract is an implied contract - FALSE
Statement II: There is no delay in obligations not to do.- TRUE
83. Statement are presented:
Statement I: Payment is still possible when two persons are debtors and
creditors of each other.- TRUE
Statement II: payment is impossible when a person is both the debtor and the
creditor of the same obligation- TRUE
84. D obtained loan of P1,000,000.00 from C. The debt, which is due on
December 31, 2015, is secured by chattel mortgaged of D’s brand new Toyota
Innova van. On June 1, 2015, the van was swept away by flood waters at the
height of Typhoon Olga and could no longer be found
D’S OBLIGATION P1,000,000.00 BECAME DEMANDABLE ON JUNE 01, 2015,
UNLESS HE GIVES ANOTHER SECURITY.
85. On January 01, 2015, D borrowed P500,000.00 from C with interest at 10%
per annum. The loan obligation the interest are due on December 31, 2015.
D MAY COMPEL C TO ACCEPT PAYMENT BEFORE DECCEMBER 31, 2015-
INCORRECT
C MAY COMPEL D TO MAKE PAYMENT BEFORE DECEMBER 31, 2015 -INCORRECT
86. Refer to the facts in preceding number. Assuming that on due date, D has
only P500,000.00 and he offers this amount to C who is willing to accept it as
partial payment.
THE PAYMENT SHALL BE APPLIED FIRST TO THE INTEREST AT P50,000.00. THA
BALANCE OF P450,000.00 SHALL BE APPLIED TO THE PRINCIPAL;
HENCE, D STILL OWES C P50,000.00FOR THE RPINCIPAL WHICH WILL
CONTINUE TO BEAR INTEREST
87. D obliged himself to give P50,000.00 to C if C does not fly to the moon.
THE OBLIGATION IS IMMEDIATELY DEMANDABLE
88. A, B and C are liable individual and collectively to X in the amount of
P30,000.00. On due date, X demanded payment from A. However, C is insolvent
X MAY COLLECT P30,000.00 FROM EITHER A AND B
89. Delia obtained a loan of P50,000.00 from Corazon payable on January 31.
On January 25, Delia offered to deliver her diamond ring of the same value on
January 31 to Corazon to settle the debt. Corazon accepted the offer on the
same dat. Thus, on January 31, Delia delivered her diamond ring to Corazon.
Which statement is INCORRECT?
DELIA’S LOAN OBLIGATION OD P50,000.00 WAS EXTINGUISHED ON JANUARY
31 WHEN SHE DELIVERED HER DIAMAOND RING TO CORAZON.
90. A, B and C are indebted to W, X, Y and Z in the amount of P24,000.00. In
this case:
W CAN COLLECT P2,000.00 EACH FROM A, B AND C. THEN HE NEED NOT GIVE
ANY AMOUNT TO X, Y AND Z
91. The principal of negotorium gestio does not apply:
WHEN THE PROPERTY OR BUSINESS IS NOT NEGLECTED OR ABANDONED –
DOESN’T WHEN THE OFFICUOUS MANAGER HAS BEAN TACITLY AUTHORIZED BY
THE OWNER- DOESNT
92. Statement are presented:
Statement I: There is no delay in obligations not to do. -FALSE
Statement II: Delay is applicable only to the debtor never to the creditor. - TRUE
93. The obligation of a school to provide its student a safe and secure
environment and an atmosphere conducing to learning is an obligation arising
from:
CONTRACT
94. When the debtors bind himself to pay as soon as he has the means:
THE OBLIGATION IS VALID, BUT THE CREDITOR MUST GO TO AND ASK THE
COURT TO FIX THE PERIOD FOR THE PAYMENT OF THE OBLIGATION
95. M makes an interest-bearing promissory note amounting to P100,000.00
payable to the order of P. The back of the promissory notes contains the
following indorsements: P to A, A to B, B to C and C to H who is now in
possession of the note. On due date, H goes to the office of M to collect but he
finds R who is trying to collect the amount on the note based on a power of
attorney supposedly executed in his favor by C. M is now confused on whom to
pay. He is worried that the interest will keep on accruing if he does not pay. If
you were in the position of M, the safest thing that you will do is:
GO TO COURT AND DEPOSIT THE PAYMENT BY WAY OF CONSIGNATION
96. M obtained a loan of P50,000.00 from P. The loan is evidenced by
promissory note executed by M with G signing as a guarantor of the debt. P
assigns the note to A, A to B, B to C and C to G. The assignment of the note to G
extinguished:
ONLY THE GUARANTY
97. D borrowed P200,000.00 from C. The debt is payable after 6 months and is
secured by a chattel mortgaged on D’s growing crops. A month before due date,
the crops were completely destroyed by Typhoon Ondoy
C MAY NOW DEMAND IMMEDIATE PAYMENT OF THE LOAN UNLESS D
FURNISHES ANOTHEER SECURITY
98. Void Obligation
D TO GIVE C P50,000.00 IF D WINS IN THE SWEEPTAKES D HAS NOT YET
BOUGHT THE SWEEPTAKES TICKET
99. D owes C the following debts: P3,000.00 due on July 1, P5,000.00 due on
July 6, P2,000.00 due on July 15 and P2,000.00 due on July 25. If today is July
22 and D gives P2,000.00 to C but neither nor C indicated the debts to which
the payment shall be applied to
TO THE DEBTS DUE ON JULY 1, JULY 6, AND JULY 15 PROPORTIONATELY AT
P600.00, P1,000.00 AND P400.00 RESPECTIVELY.
100. Legal compensation will not take place if:
THERE IS CONTROVERSY OR RETENTION INVOLVING ONE OF COMMUNICATED
COMMENCED BY THIRD PERSON AND COMMUNICATED IN DUE TIME TO THE
DEBTOR.
101. D borrowed P 50,000.00 from C. Not having sufficient cash to pay the debt,
D proposed to pay the debt by giving his diamond ring. C accepted the proposal
and received the ring
D’S OBLIGATION IS EXTINGUISHED BY DACION EN PAGO
102. Donita owed Carmina P200,000.00. The loan is secured by a mortgaged of
Donita’s lot. After a month Donita paid P20,000.00. Without the knowledge of
Donita, Teresa paid Carmina P200,000.00 believing that Donita still owned the
amount of P200,000.00
TERESA CAN DEMAND P180,000.00 FROM DONITA AND IF DONITA CANNOT PAY,
TERESA CANNOT FORECLOSED THE MORTGAGED ON THE LOT.
103. A, B and C are solidarily debtors of X in the amount of P60,000.00. A,
however, was a minor at the time the obligation was constituted. If X sues B, B
will be liable to X for:
P40,000.00
104. A, B and C are solidarily debtors of X in the amount of P30,000.00. If A is
insolvent, how much X collect from B?
P30,000.00
105. A, B, and C are joint debtors of W, X, Y and Z joint creditors, in the amount
of P24,000.00. In this case W can demand:
P24,000.00 FROM A, P2,000.00 FROM B AND P2,000.00 FROM C
106. If there is concurrence of two or more creditors and/ or two or more
debtors in one and the same obligation, the obligation is presumed to be:
JOINT
107. Statement I: A stipulation that an obligation shall be paid in a currency
other than Philippine legal tender is void – FALSE
Statement II: A cashier’s check is as good as cash; hence, it is a legal tender –
FALSE
108. It transfers to the person taking the place of the creditor all the rights
pertaining to the credit, either against the debtor or against
third person be they guarantors or possessors of mortgages
SUBROGATION
109. D owes C P20,000.00 with G as guarantor. C, on the other hand, owes D,
P15,000.00. Both debts are already due but D is insolvent. In this case:
C MAY COLLECT FROM G P5,000.0 BECAUSE A GUARANTOR CAN SET UP
COMPENSATION AS REGARDS WHAT THE CREDITOR MAY OWE THE
PRINCIPAL DEBTOR.
110. D is obliged to give Object 1, Object 2, or Object 3 to C. The right of choice
bas to which object will be delivered to C belongs to:
D ONLY
111. The obligation referred in the preceding number is:
AN ALTERNATIVE OBLIGATION
112. The obligation is extinguished in:
Statement I: Object 1 and Object 2 are lost through D’s fault and later Object 3
is lost through a fortuitous event
Statement II: Object 1 and Object 2 are lost through a fortuitous event, and
later Object 3 is lost through D’s fault
STATEMENT 1 ONLY
113. One of the following is an obligation with a period with a suspensive effect
“I WILL GIVE YOU P5,000.00 PER MONTH AS SUPPORT BEGINNING JANUARY 1
OF NEXT YEAR”
114. The creditor has the right to the fruits of the thing from the time:
THE OBLIGATION TO DELIVER THE THING ARISES
115. Statement I: It may or may not happen – CONDITION
Statement II: It always refers to the future – PERIOD
Statement III: It may refer to a past event unknown to the parties – CONDITION
Statement IV: It merely fixes the time for the efficaciousness of an obligation –
PERIOD
116. Obligations are demandable at once EXCEPT
AN OBLIGATION WITH A CONDITION ANTECEDENT
117. D obtained a loan of P30,000.00 from C with G a guarantor, c on the other
hand, owes G P30,000.00. Both debts are due:
Statement I: If C sues D, D may successfully put up the defense of
compensation because C owes G, D’s guarantor. – FALSE
Statement II: If C sues D, D may not put up the defense of compensation as to
what C owes G – TRUE
Statement III: If D cannot pay and C sues G, G can put up compensation
because C owes him P30,000.00 – TRUE
Statement IV: Both D’s debt to C and C’s debt to G are extinguished by legal
compensation – FALSE
118. Orlando bought his typewriter at the shop of Remigio for repair. Orlando
mase several demands for the repair work to be done but
Remigio did not undertake the repairs. Eventually, Remigio returned the
typewriter, unrepaired and with several parts missing:
Statement I: Orlando can have the type writer repaired by another repair shop
with the repair cost thereof chargeable to Remigio
Statement II: Orlando can compel Remigio to undertake the repairs
Statement III: Orlando can ask for damages for the missing parts of the
typewriter at the expense of Remigio
Which remedies may be availed by Orlando?
STATEMENT 1, STATEMENT 3
119. D is obliged to give his only car to C on December 01, 2014. On December
01, 2014, D did not deliver the car. The following day, armed
men forcibly took car from D’s garage.
D’s OBLIGATION TO GIVE THE CAR IS EXTINGUISHED
120. During the flood the properties of D were saved from destruction by C
without the knowledge of D who was then away. C incurred necessary and useful
expenses in the act of saving D’s properties. For such expenses:
D MUST REIMBURSE C ALTHOUGH C ACTED WITHOUT THE CONSENT OF D
121. A, B and C are jointly liable to X in the amount of P12,000.00. On due date,
X demanded payment from A, but A refuse to pay. How much may X collect from
B?
P4,000.00 WITHOUT ANY DAMAGES
122. Assume the same facts except A, B and C are solidarily liable to X in the
amount of P12,000.00. on due date, X demanded payment from A but A refuse
to pay. How much may X collect from B?
P12,000 PLUS DAMAGES FOR DELAY
123. A, B and C jointly borrowed P3,000.00 from X. On due date, A was insolvent.
How much may X collect from B?
P1,000.00
124. Assume the same facts except that the debtors are solidarily bound. How
much may X collect from B?
P3,000.00
125. A, 17 years old, B, 25 and C, 30, jointly borrowed P6,000.00 from X. How
much may X collect from B
P2,000.00
126. Assume the same facts except that the debtors are bound solidarily. How
much may X collect from B?
P4,000.00
127. D is obliged to pay C P10,000.00 on or before June 15. C is obliged to pay
D P10,000.00 on June 30. Who may claim compensation on June 15?
NEITHER D NOR C
128. D is obliged to pay C P10,000.00 on or before June 30. C is obliged to pay
D P10,000.00 on June 15. Who may claim compensation on June 15?
D ONLY
129. D is obliged to deliver specific horse to C for entry in the derby. The day
before the agreed date of delivery, the horse broke its right front leg. While it
could still walk, it can no longer run.
THE OBLIGATION IS EXTINGUISHED BECAUSE THE INJURY TO THE RIGHT
FRONT LEG OF THE HORSE IS A PARTIAL LOSS THAT IS SO IMPORTTANT IN
THE RELATION OF THE OBLIGATION
130. D owes C P50,000.00. Subsequently, D proposed to C that T will assume his
(D’s) debt. C accepted the proposal of D. This type of novation which involves the
substitution the debtor is known as:
DELEGACION
131. Assume also that on due date, T could not pay because of his insolvency
which was in fact subsisting but was not known to D or of public knowledge at
the time that he delegated his debt
C CANNOT HOLD D LIABLE BECAUSE HIS (D’S) OBLIGATION WAS
EXTINGUISHED WHEN HE WAS SUBTITUTED BY T
132. D owes C P30,000.00 due on June 20. C owes D the following debts:
P15,000.00 due on June 2, P4,000.00 due on June 14, P6,000.00
due on June 16; and P3,000.00 due on June 18. On June 17, c assigned his
right to X. C notified D of the assignment but D did not give his consent thereto.
On June 20, X may collect from D
P30,000.00
133. Assume the same facts except that when C made the assignment of his
credit to X, C did not notify D about it. It was only June 20 when X went to D to
collect that D learned of the assignment. In this case X may collect from D?
P2,000.00
134. D owes C P30,000.00 due on June 20. C owes D P14,000.00 due on June
15. On June 12, C assigned his rights to X. D consented to such assignments
without any reservation of his right to the compensation. On June 20, X may
collect from D:
P20,000.00
135. In order for legal compensation to take place, two of the requisites are:
that each one of the obligors be bound principally, and that he be at the same
time a principal creditor of the other, and the two debts must be due. In
addition, following requisites must be present except:
THAT THE DEBTS MUST HAVE THE SAME AMOUNT
136. In order that condonation may extinguish an obligation involving a movable
property whose value exceeds P5,000.00
IT IS SUFFICIENT THAT THE CONDONATION AND ACCEPTANCE ARE IN
WRITING, EVEN A PRIVATE ONE
137. The obligation is not extinguished by reason of the loss of the thing
through a fortuitous event in three following cases. Which is the
EXCEPTION?
WHEN THE OBLIGATION IS TO GIVE A DETERMINATE THING AND THE PARTIES
HAVE NOT STIPULATED WHETHER OR NOT THERE SHALL BE LIABILITY
IN CASE OF FORTUITOUS EVENTS
138. D issued a promissory note payable to the order of C for a debt of
P10,000.00 which bears interest at 2% per month. On due date, X
went to the place of D to collect the deb claiming that C assigned the note to
him X, however could not present the promissory note claiming that he had lost
it. D wants to make a payment because he does not want the interest to accrue
but he is at loss as to whatever he would make payment to X. In this case, the
course of action that you will advise to D to take is:
CONSIGNATION
139. D owes C the following debts: P4,000.00 due on May 01, P4,000.00 due on
May 08, P4,000.00 due on May 15, P4,000.00 due on May 22, P4,000.00 due on
May 29 and P4,000.00 due on June 15. The debts presented the price of
magazines which were delivered to D on a weekly basis. Of the 6 debts the one
due on May 22 is secured by a pledge of D’s ring. By agreement, of the parties,
C may demand payment even before the due date of the debt. As of May 31, D
had not paid any of the 6 debts. On May 31, D wanted to make payment but he
had only P4,000.00
D MAY APPLY THE PAYMENT TO THE DEBT DUE ON MAY 22 WHICH IS THE MOST
BURDENSOME TO HIM.
140. Assuming that D did not designate the debt to be paid when he remitted
the amount of P4,000.00 to C on May 31. C issued a receipt for the payment he
received from D but he did not also designate the debt that was being paid. In
this case:
THE PAYMENT SHALL BE APPLIED TO THE DEBT DUE ON MAY 22, SINCE IT IS
THE DEBT THAT IS MOST ONEROUS TO D

141. Statements concerning payment by cession are true, EXCEPT?

THE CREDITORS BECOME THE OWNERS OF THE PROPERTIES OF THE DEBTOR
THAT WERE CEDED TO THEM
142. Following payment is not VALID?
PAYMENT MADE IN GOOD FAITH TO A PERSON IN POSSESSION OF THE
INTRUMENT BUT NOT THE CREDIT
143. D obtained a loan of P10,000.00 from C who was in his right mind at the
time he granted the load to D. On due date, D paid his loan of P10,000.00 to C
who had since become insane. Of the total amount received, C lost P4,000.00
and spent P6,000.00 for his food and other necessary expense.
THE OBLIGATION IS EXTINGUISHED UP TO P6,000.00
144. Following payment is not VALID?
PAYMENT MADE BY THE CREDITOR TO THE PERSON IN POSSESSION OF AN
ORDER INTRUMENT EVIDENCING THE CREDIT BUT SUCH PERSON IS
NOT THE INDORSE THEREOF.
145. D owes C P10,000.00. T offers to pay D’s obligation and tells D that D need
not reimburse him. However, D does not give him consent to T’s offer not to be
reimburse. C, nonetheless, accepts the payment from T.
THE PAYMENT IS VALID INSOFAR AS C IS CONCERNED SINCE HE ACCEPTED
THE PAYMENT
146. The delivery of promissory notes payable to order or other bills of
exchange or other mercantile documents shall produce the effect of payment
when they are:
CASHED
147. A, B, and C are solidary debtors of X, in the amount of P30,000.00. C was
insane at the time of obligation was constituted:
X MAY POSSIBLY COLLECT FROM A THE AMOUNT OF P10,000
148. Three of the following are the characteristic of a condition. EXCEPTION
IT MERELY FIXES THE TIME FOR THE EFFICACIOUSNESS OF AN OBLIGATION
149. D is obliged to give P50,000.00 to C if C tops the CPA Examination and a
specific lot if C can reduce the taxes to be paid by D’s tax return by unlawful
means
C MAY DEMAND THE PAYMENT OF P50,000.00 IF HE TOPS THE CPA
EXAMINATION
150. D promised to give P20,000.00 to C provided to C does not sign a contract
with X on or before December 31, 2014. The condition of the obligation is:
NEGATIVE
151. Refers to preceding number, which statement is incorrect?
D’s OBLIGATION IS EXTINGUISHED IF IT IS ALREADY JANUARY 1, 2015 AND C
HAS NOT YET SIGNED THE CONTRACT WITH X
152. D is appointed C as his agent to purchase a parcel of land belonging to C if
C can present to D the deed of absolute ale signed by X in favor of D on or
before December 31, 2014. The condition of the obligation is :
POSITIVE
153. Refers to preceding number, which statement is incorrect?
D’s OBLIGATION IS DEMANDED IF IT IS ALREADY JANUARY 1, 2015 AND C HAS
NOT YET PRESENTED TO D THE DEED OF ABSOLUTE SALE DULY
SIGNED BY X
154. D was obliged to deliver a specific car to C on May 31, 2015. On such date,
however, D failed to deliver the car. C also did not make any demand for the
delivery of the car
D WAS NOT IN DELAY WHEN HE FAILED TO DELIVER THE CAR ON DUE DATE
155. The kind of fraud which is renders a contract voidable is
CAUSAL FRAUD
156. D is obliged to repair the car of C. D failed to repair car despite the
demands made by C. D wants to know from you which remedies are available to
him
Statement I: Compel D repair the car
Statement II: Have the car repaired by another person at D’s expense
Statement III: Demand payments for damages from D
STATEMENT 2, STATEMENT3
157. D is obliged to deliver his only horse to C on May 31, 2014. C made a
demand against D for the delivery of the horse on May 31, 2014.
However, D failed to deliver the horse. In view thereof, C consulted you and ask
which of the following remedies are available to him?
Statement I: Compel d to deliver the horse to him
Statement II: Get a horse from another person at D’s expense
Statement III: Demand payment for damages from D
STATEMENT 1, STATEMENT 3
158. The palay harvested from the agricultural land is an example of:
INDUSTRIAL FRUIT
159. On January 1, 2014, D and C agreed that D would deliver to C a specific
agricultural land on June 30,2014, D harvested palay from the land worth
P20,000.00. D actually delivered the land to C on September 30, 2014. At that
time, crops valued at P15,000.00 that grew beginning on July 1, 2014 remain
unharvested. C had a personal right against D for the delivery of the thing and
its fruits beginning to:
JULY 01, 2014
160. C acquired a real right over the thing and its fruits on:
SEPTEMBER 30, 2014
161. A, an agent of P, owes B P20,000.00. B, on the other hand, owes P,
P20,000.00. Both debts are due:
NEITHER P, A NOR B MAY CLAIM LEGAL COMPENSATION
162. D borrowed P50,000.00 from C. The debt, which is payable within one year,
is secured by a mortgaged what D constituted on his lot. The mortgaged is
recorded in the Registry of Property. C dies before the due date of the debt and
was not able to collect any amount of his loan receivable from D. He was
survived by S, his only son and heir. D, taking advantage of the situation, sold
the lot to T who was not aware of the mortgaged constituted thereof.
S, SON OF C, HAS THE RIGHT TO COLLECT THE AMOUNT OF THE NOTE, FROM D
AND FORECLOSE THE MORTGAGE IF D CANNOT PAY
163. D obtained a loan of P50,000.00 from C. The same is payable after 60
days. On due date, D, not having sufficient cash offered to give either hi sing or
his bracelet to C. C accepted the offer. Based on foregoing facts, which of the
statements is INCORRECT?
THE RIGHT TO CHOOSE THE ITEM TO BE GIVEN BELONGS TO C
164. Statement I: Several prestations are due but all must be performed to
extinguished the obligation
Statement II: If there are void prestations, the other prestations may still be
valid, hence the obligation remains – ALTERNATIVE OBLIGATION
165. D obtained a loan of P50,000.00 from C. The loan was evidenced by a
promissory note executed by D which said nothing about the transmissibly of
the loan obligation or the right to collect it. A month before the due date of the
loan, C died leaving S, his son as heir. On due date, S presented the promissory
note to D for payment, but D refused claiming the he owed C but not S.
D MAY NOT REFUSE TO PAY BECAUSE THE RIGHT OF C TO COLLECT WAS
TRANSMITTED TO S WAS THE HEIR OF C NOTWITHSTANDING THE
ABSENCE OF AN AGREEMENT TO THAT EFFECT.
166. D is obliged to deliver 20 acks of “Dinorado” rice to C. The parties agreed
that should D fail to perform his obligation as stipulated, D will pay a penalty of
P1,000.00. On due date, D made a delivery of 20 sacks of rice but each sack
contained a mixture of “dinorado” rice and another variety of lower quality. C
discovered the fraud:
C MAY DEMAND THE PAYMENT OF THE STIPULATED PENALTY AS WELL AS
DAMAGES ALTHOUGH THERE WAS NO STIPULALTION ON THE ALTTER.
167. D obtained a loan of P5,000.00nfrom C. On due date, D tendered payment
amounting to P5,000.00 consisting of P5,000.00 pieces of P1.00 coin.
C MAY DEMAND THAT HE BE PAID IN BILLS
168. D owes C P50,000.00. The obligation is secured of G and a real mortgage
on D’s lot. Subsequently, without the knowledge of D, paid C the amount of
P50,000.00
G CAN GO AFTER D, TO COLLECT AND IF D CANNOT PAY, G CAN FORECLOSE THE
MORTGAGE BECAUSE HE IS ENTITLED TO SUBROGATION.
169. One peso, P5.00 and P10.00 coins are legal tender up to:
P1,000.00
170. One centavo, P.05, P0.10 and P0.25 centavo coins are legal tender up to:
P100.00
171. All bills are legal tender up to:
ANY AMOUNT
172. Obligation is Void:
D AGREED TO PAINT THE PORTRAIT OF C IF D WILL ENROLL IN A PAINTING
CLASS THIS COMING MONTH
173. Obligation is extinguished by loss in?
Statement 1:D is obliged to deliver a specific computer to C. Before the
scheduled delivery, the computer was lost in a fire through no
fault of D.
Statement 2: D is obliged to deliver 10 sacks of rice to C. Before the scheduled
delivery, the warehouse of D containing 500 sacks of rice from which D, intended
to get 10 sacks of rice for delivery to C, was razed in a fire together with the
stock of rice through no fault of D.
ONE ONLY
174. Condonation, the obligation is:
Statement 1: A condonation involving a debt of an immovable property which
was embodied in a private instrument together with the acceptance thereof.
Statement 2: A condonation involving a money debt of P6,000.00 made and
accepted orally with the creditor making a simultaneous
delivery to the debtor of the promissory note evidencing the credit
NOT EXTINGUISHED IN EITHER 1 OR 2
175. D received a check for P5,000.00 drawn against ABC Bank in payment of a
debt due him. Upon chasing the check, D requested the teller to give him 10
pieces of P500.00 bill and to place the money in a envelop. As he was in a
hurry, D left the bank without bothering to count the cash. Shortly, after
reaching his office, D counted the money in a envelop and discovered that it
contained 10 pieces of P1,000.00 or an excess of P5,000
D MUST RETURN THE EXCESS OF P5,000.00 BECAUSE HE HAS THE OBLIGATION
TO DO SO UNDER THE PRINCIPLE OF SOLUTIO INDEBITI
176. D a professional singer, agreed to sing for a fee of P20,000.00 at the
birthday of C who was a fan of D, could not go to the party of C. So he sent X,
another professional singer who was known to sing better than D, to sing at C’s
party, and informed C that the latter needed to pay only P10,000.00
D MAY NOT VALIDLY ASSIGN HIS OBLIGATION TO SING BECAUSE IT IS
PERSONAL IN NATURE
177. D is obliged to deliver either a specific bracelet, a specific necklace, or a
specific ring to C. No mention was made in the agreement of the parties as to
who has the right of choice. Before due date, C wrote D informing the latter that
he (C) preferred that the ring be delivered to him. D received the letter but did
not give any response to C. Subsequently, the ring was lost through a fortuitous
event.
D’s OBLIGATION IS NOT EXTINGUISHED AS HE MAY DELIVER EITHER THE
BRACELET OR THE NECKLACE
178. D is obliged to deliver a specific Toyota car to C. The parties agreed that
should D so desire, he may deliver his only Lancer car to C as a substitute.
Before D could make any substitution, the Lancer car was damaged beyond
repair through the fault of D.
D IS STILL OBLIGED TO DELIVER THE TOYOTA CAR TO C ON DUE DATE
179. D borrowed P50,000.00 from C. On due date, D did not have any money to
pay the debt so he proposed to C that the latter accept the ring to settle the
debt. C accepted the proposal and received the ring. Immediately, after receiving
the ring, C sold it to B. D’s obligation to give P50,000.00 to C is extinguished by:
DACION EN PAGO
180. D obtained a loan of P500,0000.00 from C on January 01, 2014. The loan
which D has the option of paying on or before December 31,2014 is secured by
a building owned by D and bears interest of 1% per month. On June 30, 2014
the building was razed in a fire without the fault of D
C MAY DEMAND IMMEDIATE PAYMENT OF THE LOAN FORM d ON JUNE 30, 2014
SINCE THE SECURITY THEREOF WAS LOST, UNLESS D GIVES ANOTHER SCURITY
181. D owes C P60,000.00 which is due on January 10 and another debt of
P12,000.00, which is due on January 20. Both debts are unsecured and non-
interest bearing and already due. D, however, has only P3,000.00 which he gives
to C without informing C as to which debt the payment shall apply. C also did
not indicate on the receipt he issued to D to which of the two debts the payment
shall apply:
THE PAYMENT OF P3,000.00 SHALL BE APPLIED PROPORTIONATELY IN THE
AMOUNT OF P1,000.00 TO THE DEBT DUE ON JANUARY 10, AND P2,000.00 TO
THE DEBT DUE ON JANUARY 20
182. A and B are joint debtors of W, X, Y, and Z solidary creditors in the amount
of P20,000.00 W CAN COLLECT ONLY THE MAXIMUM AMOUNT OF P10,000.00
EACH FROM A AND B. IF W IS ABLE TO COLLECT P10,000.00 FROM A, W MUST
GIVE P2,500.00 EACH TO X, Y AND Z . IF W IS ABLE TO COLLECT P10,000.00
FROM B, W MUST GIVE P2,500.00 EACH TO X, Y AND Z.
183. Decoroso borrowed P50,000.00 from Collantes which Gualberto as
guarantor. However, Collantes is also indebted to Decoroso in the amount of
P30,000.00. Both debts have become due. Collantes demanded payment from
Decoroso but Decoroso has become insolvent with the asset only P15,000.00
which he used in partial payment of his debts to Collantes
COLLANTED CAN HOLD GUALBERTO LIABLE FOR THE AMOUNT OF P30,000.00
ONLY BECAUSE THAT IS THE AMOUNT THAT COLLANTES OWES DECOROSO
184. When two persons are claiming the same right to collect from you and you
are in doubt to whom you will give your payment your remedy so that you will
not pay the wrong person
CONSIGNATION
185. A, B and C are liable to X in the amount P30,000.00. The debt is evidenced
by a promissory note which reads “I promise to pay X or order P30,000.00”. The
note is signed by A, B and C. X indorsed the note to Y, Y to Z, and Z to A for
merchandise Z bought from A.
THE OBLIGATION UNDER THE NOTE IS TOTALLY EXTINGUISHED
186. D is indebted to C in the amount of P100,000.00. The debt is secured by a
mortgage of the lot of D and the guaranty of G. G without informing D, paid the
total amount of the loan to C.
G CAN COLLECT FROM D. IF D CANNOT PAY, G CAN FORECLOSE THE MORTGAGE
187. D, a depositor of ABC Bank, visited the branch of the bank at Espana
Boulevard to withdraw from its automated teller machine (ATM).
After pressing correctly, the amount of P500.00 the machine dispensed 10
pieces of P500.00 or a total of P5,000.00. The receipt released by the ATM
showed that only P500.00 was withdrawn.
D MUST RETURN THE EXCESS OF P4,500.00 BECAUSE IT WAS A CASE OF
PAYMENT THAT WAS NOT DUE.
188. Characteristic of Expromission but NOT Delegacion.
IT IS MADE WITH OR WITHOUT THE CONSENT OF THE DEBTOR.
189. D is indebted to C for P52,000.00. On due date, D tendered payment
amounting to P52,000.00 which considered of the following: 47 pieces of
P1,000.00 bills for a total of P47,000.00; and a 250 pieces of P20.00 bills for a
P5,000.00. C refuse to accept the payment and demanded that D makis his
payment all in P1,000.00 bills were too bulky and inconvenient for him to carry.
D MAY CONSIGN THE PAYMENT SINCE THE REFUSAL BY C TO ACCEPT THE
PAYMENT WAS NOT JUSTIFIED
190. Dacion en pago and payment by cession are special forms of payment.
They are similar in which of the following respects.
ON THE PURPOSE OF THE PAYMENT
191. D owes C the following debts: P5,000.00 due on January 1; P7,000.00 due
on January 5; P8,000.00 due on January 10; P10,000.00 due on January;
P10,000.00 due on January 15 and P5,0000.00 due on January 20. By
agreement of the parties, D was given the benefit of the period. As of January
17, D has not paid any of the debts. He has P5,000.00 which he wants to remit
to C.
D MAY APPLY THE PAYMENT EITHER TO THE DEBT DUE ON JANUARY 1 OR
JANUARY 20
192. Facultative obligation EXCEPT?
THE DEBTOR MUST GIVE THE SUBSTITUTE IN CASE THE PRINCIPAL THING IS
LOST DUE TO THE DEBTORS FAULT BEFORE SUBSTITUTION
193. D obtained a loan of P200,000.00 from C. Not having any cash due date
when C visited him to demand payment, D offered to C to accept, at C’s choice,
either D’s necklace, diamond ring, or a parcel of land, all which D showed C. C
accepted the proposal, but requested that he be given one week to decide which
item to take. Before the week was over, however, armed men forcibly took the
necklace and diamond ring from D’s house.
D’S OBLIGATION BECAME A SIMPLE OBLIGATION TO DELIVER THE PARCEL OF
LAND
194. S, a supplier of fresh fish from Lucena City, hire T, the owner of a trucking
company, for a fee of P3,000.00 to bring the fish catch of S to the Dampa
Market in Paranaque City which ordered the fish for a price of P20,000.00. In so
far as S concerned, his prestation in his contract with T is:
A PAYMENT OF P3,000.00
195. The contract between S and T:
BOTH S AND T ARE OBLIGORS AND OBLIGEES OF EACH OTHER
196. A, B and C are solidary debtors of X and Y for P30,000.00 joint creditors:
X MAY COLLECT P15,000.00 FROM THE DEBTORS BUT NOT MORE THAN
P5,000.00 FROM EACH OF THEM. THEREAFTER, HE IS NOT OBLIGATED TO GIVE
ANY AMOUNT TO Y.
197. was cleaning the glass window of his building when a large piece of broken
glass fell down directly hitting the roof of a car which was parked below. C the
owner of the car, was not around. Sensing that he would be made liable for the
damage on the car, O immediately went down and cleaned the mess. O seeing
that W had witnessed all that happened, proposed to give W P2,000.00 so
that W would not testify in case a court case is filed. W agreed to the proposal
and accepted the money. Based on foregoing facts, which of the following
statement is INCORRECT?
THE AGREEMENT BETWEEN O AND W IS BINDING ON BOTH OF THEM
198. A, B and C are obliged to deliver a specific horse to X, Y and Z.
IF A VALID DEMAND IS MADE AGAINST ALL THE DEBTORS BUT DEBTOR C
CANNOT COMPLY WITH HIS PART OF THE OBLIGATION, THE OBLIGATION
IS CONVERTED INTO A MONETARY OBLIGATION TO PAY THE VALUE OF THE
HORSE PLUS DAMAGES
199. A, B, and C are solidary debtors of X in the amount of P3,000.00. X
renounces the share of A and A accept the renunciation. Thereafter, B becomes
insolvent. Ultimately:
A WILL SHOULDER P500.00 WHILE C WILL SHOULDER P1,500.00
200. A, B and C are solidary debtors of X, Y, and Z solidary creditors, in the
amount of P2,700.00. X renounces the whole obligation without the consent of Y
and Z. The debtors accepted the renunciation
THE WHOLE OBLIGATION IS EXTINGUISHED
201. On May 31, 2014, D promise to give a specific house and lot to C if C
passes the Bar Examination. On September 24, 2014, C took the Bar
Examination. The result of the Bar Examination which C took was released on
March 26, 2015 and C passed it. C shall be entitled to the house and lot:
ON MAY 31, 2014
A and B are indebted to X and Y for 10,000.00. A and B share in the debt in the
ratio of 1:3; while X and Y share in the credit in the ratio of 2:3
202. How much may X collect from A if the debtors are joint debtors, while the
creditors are joint creditors?
P1,000.00
203. How much may X collect form A if there is active solidarity?
P2,500.00
204. How much may X collect from A if there is passive solidarity?
P4,000.00
D owes the following creditors: X, P20,000.00; Y, P30,000.00; and Z, P50,000.00.
D is insolvent so he offers to assign all his properties (except those exempts
from execution) to his creditors in payment of his debts. The creditors accept the
offer and are able to sell the debtor’s properties for P70,000.00. Based on the
foregoing facts, which of the following statements is INCORRECT?
Leveriza, the owner of an apartment, leased the premises to Toribio. The terms
of the lease provide for a monthly rental of P6,000.00 which Toribio must pat at
the residence of Leveriza about two blocks from the apartment. For the month of
December, Toribio went to the residence of Leveriza but the latter was not
around to receive the payment. Not wanting to go back, Toribio left the payment
with Nograles, neighbor of Leveriza, who promised to give the payment of
Leveriza. However, Nograles spent the amount he received for himself. Based on
the foregoing facts, which of the following statements is INCORRECT?
On December 01, 2014, Miss Santos a professor of Manila College, engaged the
services of Lepanto Transport to bring her class to Calamba, laguna in time for
the Rizal Day celebration on December 30, 2014 which would start at nine
o’clock in the morning. The contract signed by the parties specified that a bus
would be in the school premises at six o’clock in the morning and would leave
at exactly 6:30 am. However, Lepanto Transport failed to send bus on the date,
time and place agreed upon. As a result, Miss Santos and her class failed to
attend the celebration.
Miss Santos sued Lepanto Transport for damages on the ground of delay in the
performance of the obligation. For its defense, Lapanto Transport claimed there
was no delay because Miss Santos never made a demand: D owes C P20,000.00
due on March 15. C, on the other hand owes D the following debts: P8,000.00
due on March 01, P3,000.00 due on March 8, P5,000.00 due on March 14. On
March 12, C assigned his right to T with notice to D but with D bot giving his
consent to the assignment. On March 15, T can collect D:
D owes C P20,000.00 due on March 26. C, on the other hand owes the following
debts; P8,000.00 due on March 01, P3,000.00 due on March 8, P5,000.00 due
on March 14 and P2,000.00 due on March 24. On March 18, C assigned his
credit right to T without informing D who learned of the assignment on March
20. On March 25, T can collect D: D has a grains warehouse in Davao, while C
has a grains ware house in Cebu. D borrowed 10 sacks of rice worth P10,000.00
from C for D’s customer in Cebu. Later, C borrowed 10 sacks of rich which was
also worth P10,000.00 from D for C’s customer in Davao. Both the obligations
are already due. Transport cost to Davao amount to P1,000.00, while those for
Cebu amount to P800.00
Following statements pertains to NATURAL OBLIGATION, which one does NOT?
Prime Engineering Review Center (PERC) stated in the leaflets it distributed last
January that any reviewee who places first in the licensure
examination for engineers this year will be received a cash prize of P150,000.00
Ace Realty Company (Ace) ordered 6 units of “Borden” typewriters from Central
Office Machines at the price of P8,000.00 per unit. However, Central delivered to
Ace 6 units of “Remington” typewriters, a superior brand which was priced at
P8,500.00 per unit. Central informed Ace that it will bill the latter for the
“Remington” typewriters at P8,000.00 only. Ace refuses to accept the
“Remington” typewriter.
A, B and C are liable in solidum to X for P12,000.00 the share of A who
accepted it. Late, B becomes insolvent.
Obligation with a term or period, EXCEPT