1. Toni and Cora are principal creditors and principal debtors of each other.

Toni owes Cora P49,000

and Cora owes Toni P100,000, both due today. Can compensation happen, even without the
consent of the parties? If so, what kind of compensation and how much would the remaining
debt be?

Yes (Art 1278, 1279). Partial compensation with Cora's remaining balance of P51,000.

2. Viktor owes Jayce P10,000 due tomorrow. Mel, a third party, has paid Jayce P10,000 without
Viktor's knowledge or consent. Mel has now demanded P10,000 from Viktor, but Viktor has
suddenly become insolvent. Can Mel demand to seize Viktor's properties in order to be
reimbursed P10,000?

No, subrogation is for the benefit of the debtor. A third party is only entitled to subrogation if the
payment was made with debtor's knowledge and consent.

3. Max promised to deliver a generic DSLR camera to Chloe. Rachel, a third party, delivers a
different generic DSLR camera to Chloe. Can Chloe be then compelled to accept Rachel's
delivery?

No, because the creditor cannot be compelled to accept payment from a third party.

4. George has been deemed by the court guilty of negligence against Aaron, and now has the
obligation to pay damages worth P50,000 to Aaron. Aaron has a debt to George P100,000, which
is completely unrelated to the case of negligence. Can George use Aaron’s debt to him to offset
and extinguish his own?

No, because compensation cannot occur if one of the debts consists in civil liability arising from a
penal offense. (Art 1288)

5. On January 1, Morgan promised to pay Spencer a total of P25,000 in a series of five monthly
equal installments, starting on January 31. On April 30, Emily paid P25,000 to Spencer without
the knowledge or consent of Morgan, Spencer accepted the payment. How much can Emily
recover from both Spencer and Morgan?

25,000/5 = 5,000 *3 = 15,000. Morgan has only paid 15,000 so far. 25,000 - 15,000 = 10,000.
Emily can recover 10,000 from Morgan and 15,000 from Spencer, who should not have accepted
it. (Art 1236)

6. Roy and Edward had an agreement that Edward would deliver 50 toy guns to Roy. Later on, they
changed the terms so that Edward would instead deliver 50 unregistered and unlicensed
semi-automatic rifles. What must Edward actually deliver?

Edward should deliver the 50 toy guns. If the new obligation is void, the original one shall
subsist. (Art 1297)
7. Walter promised to pay Vince P30,000. Walter has suddenly become insolvent, and his friend,
Elliott offered to pay instead. Walter refused, but Elliott went against his will and negotiated with
Vince that Elliot pay instead. Elliott and Vince reached an agreement that Elliott will pay P35,000.
If Elliott had now suddenly become insolvent, can Vince demand from Walter the P35,000?

No, because the effect of the expromision has extinguished Walter's obligation, and is therefore,
no longer liable to pay.

a. Using the above example, if Walter agreed that Elliott would pay instead, and then Elliott
became insolvent, can Vince demand from Walter the P35,000?

No, in delegacion, if the new debtor’s non-fulfillment is due to other causes other than
insolvency, the old debtor is still not liable.

b. Using the above example, if Walter agreed that Elliott would pay instead, but Elliott was
insolvent when Walter agreed and Walter knew that Elliott was insolvent, is Walter liable
to Elliott’s insolvency?

Yes (Art 1295) this is to prevent fraud on the part of the old debtor. If Walter agreed and
Elliott’s insolvency was not known to anyone, then Walter is not liable.

8. William let Michael borrow a specific car owned by William under a contract of use. Unrelatedly,
William owes Michael P120,000. Michael expresses his inclinations towards just buying the car
off of William to make the payments overall less of a hassle. Can Michael do this?

No. Michael is under an obligation to return the car borrowed to him. Compensation cannot
happen when one of the debts arises from a commodatum (contract of use). (Art 1287)