OBLIGATIONS – DIAGNOSTIC EXERCISES?

TEST I – MULTIPLE CHOICE. Select the best answer by writing the letter of your choice.

1. The following are the requisites of an obligation, except:

a. passive subject, debtor or obligor.

b. active subject, creditor, or oblige.
c. efficient cause.
d. demand.

2. Obligations may arise from any of the following, except:

a. contracts.
b. quasi-contracts.
c. law.
d. prestation.

3. It is the voluntary administration of the property of another without his consent.

a. Negotiorum gestio
b. Solutio indebiti
c. Quasi-delict
d. Contract

4. It is a wrong committed without any pre-existing relations between the parties.

a. Natural obligation
b. Quasi-delict
c. Quasi-contract
d. Crime

5. Unless the law or stipulation of the parties requires another standard of care, every person
obliged to give something is also obliged to take care of it with:

a. extra-ordinary diligence.
b. diligence of a father of a good family.
c. diligence of a good father of a family
d. good diligence of a father of a family
6. The creditor has a right that is enforceable against a definite passive subject. The right is
known as:

a. personal right
b. real right.
c. natural right.
d. civil right.

7. It is a thing is particularly designated or physically segregated from all others of the same
class.

a. Generic thing
b. Indeterminate thing
c. Determine thing
d. Real thing

8. One of the following is a determinate thing. Which is it?

a. a cow.
b. a horse.
c. a Toyota car with engine no. 12345, body no. 34890 and plate no. ABC 123.
d. a ring with diamond embellishment.

9. Demand must be made on the due date of the obligation in order for delay to exist in one of
the following cases. Which is it?

a. When it was stipulated by the parties that demand need not be made.
b. When the law provides that demand need not be made.
c. When the obligation does not indicate whether demand must be made or not on due date.
d. When time Is of the essence of the contract.

10. This refers to delay on the part of the creditor.

a. mora solvendi ex re
b. compensatio morae
c. mora solvendi ex persona
d. mora accipiendi
11. There shall be no liability for loss due to fortuitous events in one of the following cases.
Which is it?

a. When the debtor delays.

b. When the parties so stipulated that there shall be liability even in case of loss due to
fortuitous events.
c. When the nature of the obligation requires the assumption of risks.
d. When the obligation is to deliver a determinate thing and there was no stipulation as to the
liability of the debtor in case of loss due to fortuitous events.

12. The following are the remedies of the creditor to pursue his claims against the debtor,
except, to:

a. purse the property owned and in possession of the debtor.

b. exercise all the rights and bring all the actions of the debtor (accion subrogataria).
c. impugn the acts which the debtor may have done to defraud his creditors (accion pauliana)
d. compel the debtor to perform the service in obligations to do.

13. D borrowed P50,000.00 from C. C dies before he has collected the debt leaving S, his son, as
heir. Which of the following statements is correct?

a. S can collect from D although D and C did not agree that the right to the debt will pass on the
heirs of C.
b. S cannot collect because the credit right is personal to C.
c. S can collect only if D and C agreed that the right to the debt will pass on the heirs of C.
d. S cannot collect because the law prohibits the transmission of the credit right.

14. D is obliged to give C a specific car if C passes the CPA Examination. D’s obligations is an
example of :

a. a pure obligation.
b. an obligation with a suspensive condition.
c. an obligation with a resolutory condition.’
d. an obligation. With a period.

15. One of following obligations is not immediately demandable .

a. pure obligation.
b. obligation with a resolutory condition
c. obligation with an in diem period.
d. obligation with an ex die period.

16. One of the following is a void obligation:

a. D is obliged to give C P5,000.00 of C does not go to the moon.
b. D is obliged to give C P5,000.00 if D does to Baguio.
c. D is obliged to give C P5,000.00 if C does to Baguio.
d. the sweepstakes on a ticket that he had already purchased.

17. D is obliged to give C P10,000.00 if X dies. This is an example of:

a. an obligation with a suspensive condition.

b. an obligation with a resolutory condition.
c. an obligation with a period.
d. a pure obligation.

18. When the debtor binds himself to pay when his means permit him to do so, the obligation
is:

a. an obligation with a resolutory condition.

b. a pure obligation.
c. an obligation with a suspensive condition.
d. an obligation with a suspensive period.

19. Whenever a period is designated in an obligation, the said period shall be presumed to have
been established for the benefit of:

a. the debtor.
b. the creditor.
c. both the debtor and the creditor.
d. neither of the parties.

20. The debtor shall lose the right to make use of the period in the following cases, except:

a. when he becomes insolvent.

b. when he violates any undertaking in consideration of which the creditor agreed to the
period.
c. when the debtor attempts to abscond.
d. when he does not furnish any guaranty or security to the creditor.

21.An obligation ceases to be alternative and becomes is simple obligation in the following
cases, except:

a. when the debtor has communicated his choice to the creditor.

b. when the right of choice has been expressly granted to the creditor and his choice has been
communicated to the debtor.
c. when among the several prestations that are due one is practicable.
d. when three prestations are due but one of the is unlawful or impossible.
22. D is obliged to give C a specific watch, a specific ring, or a specific bracelet. The parties
agreed that C will have the right choose the thing which will be given to him. Before C could
make his choice, the watch and the ring are lost through D’s fault, successively. What is the
right of C?

a. C may choice the delivery to him of the bracelet, or the price of the watch or the price of the
ring plus damage
b. C cannot choose the price of the watch or the price of the ring because the said objects have
already been lost.
c. C can only choose to have the bracelet because anyway, D can still perform his obligation.
d. C can only choose to have delivery of the bracelet or the price of the ring which was the last
item that was lost plus damages.

23. D is obliged to give C specific ring. The parties agreed that D may give a specific bracelet as
substitute. Which of the following statements is true?

a. if the ring is lost through a fortuitous event before substitution, the obligation is
extinguished.
b. if the bracelet is lost through a fortuitous event before substitution, the obligation is
extinguished.
c. If the ring is lost through a fortuitous event after substitution, the obligation is extinguished.
d. If the ring is lost through the debtor’s fault after substitution, the debtor shall pay damages.

24. A,B,C and D are obliged to give V,W,X,Y and Z P20,000.00

a. V may collect from A P20,000.00.

b. V may collect from A P5,000.00
c. V may collect from A P1,000.00
d. V may collect from A P4,000.00

25. A,B,C and D, joint debtors, are obliged to give V,W,X,Y and Z, solidary creditors, P20,000.00.

a. V may collect from B P20,000.00.

b. V may collect from B P4,000.00.
c. V may collect from B P5,000.00
d. V may collect from B P1,000.00

26. A,B,C and D, solidary debtors, are obliged to give V,W,X,Y and Z, joint creditors, P20,000.00.

a. V may collect from C P20,000.00

b. V may collect from C P4,000.00
c. V may collect from C P5,000.00
d. V may collect from C P1,000.00
27. A,B,C and D, solidary debtors, are obliged to give V,W,X,Y and Z, solidary creditors,
P20,000.00

a. V may collect from D P20,000.00

b. V may collect from D P4,000.00
c. V may collect from D P5,000.00
d. V may collect from D P1,000.00

28. A, 25, B, 35, and C, 17, are solidary debtors of X in the amount of P9,000.00

a. X may collect from A 9,000.00.

b. X may collect from A 6,000.00.
c. X may collect from A 1,000.00
d. X may collect nothing because the obligation is voidable, C being a minor.

29. The following obligations are divisible, except and:

a. obligation to give definite things.

b. obligation which has for its object the execution of a certain number of days work.
c. obligation which has for its object the accomplishment of work by metrical units.
d. obligation which by its nature us susceptible of partial performance.

30. In obligations with a penal clause, the creditor as a rule may recover from the debtor in case
of breach the following:

a. the penalty as agreed upon, plus damages and interest.

b. the penalty and damages.
c. the penalty and interest.
d. only the penalty.

31. Consider the following statements:

I. The nullity of the principal obligation carries with it the nullity of the penal clause.
II. The nullity of the principal obligation does not carry with it the nullity of the penal clause.
III. The nullity of the penal clause carries with it the nullity of the principal obligation.
IV. The nullity of the penal clause does not carry with it the nullity of the principal obligation.

a. Statements I and III are true.

b. Statements I and IV are true.
c. Statements II and III are true.
d. Statements II and IV are true.
32. D borrowed from C P50,000.00. The obligation 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
P50,000.00 believing that D still owned C such amount.

a. T can recover P50,000.00 from D. If D cannot pay, T can foreclose the mortgage on D’s Toyota
car.
b. T can recover nothing from D because he paid without the knowledge and consent of D.
c. T can recover P30,000.00 from D. if D cannot pay, T can foreclose the mortgage on D’s Toyota
car.
d. T can recover P30,000.00 from D. If D cannot pay, T cannot foreclose the mortgage on D’s
Toyota car.

33. The following statements concerning payment by cession are true, except one. Which is it?

a. The creditors become the owners of the properties of the debtor that were ceded to them.
b. Payment by cession extinguishes the obligations only to the extent covered by the proceeds
of the sale of the debtor’s properties.
c. The debtor must be insolvent.
d. Cession affects all the properties of the debtor except those exempt from execution.

34. D obtained from ABC bank loan of P12,000,000.00 payable at the end of 10 years. Before
maturity, an extraordinary inflation supervened causing the value of the debt to fall to
P4,000,000.00 on the date maturity. On due date D must pay ABC Bank:

a. P12,000,000.00
b. P4,000,000.00
c. P36,000,000.00
d. P3,000,000.00

35. B borrowed from XYZ Bank P2,000,000.00 payable at the end of 5 years. Before maturity, an
extraordinary deflation supervened causing the value of the debt to rise to P5,000,000.00 on
the date of maturity. On due date B, must pay XYZ Bank.

a. P2,000,000.00
b. P5,000,000.00
c. P800,000.00
d. P20,000,000.00
36. The money or currency which the debtor may compel the creditor to accept in payment of a
debt, whether public or private, is known as:

a. notes payable to order.

b. legal tender.
c. bill of exchange.
d. mercantile document.

37. The delivery and transmission of ownership of a thing by the debtor to the creditor as an
accepted equivalent of performance is known as:

a. payment by cession.
b. dation in payment.
c. application of payment.
d. consignation.

38. D owes C the following debts: P6,000.00 due on June 12; P6,000.00 due on June 15;
P6,000.00 due on June 18; and P6,000.00 due on June 20; All debts are unsecured except the
debt due on June 20 which is secured by pledge of D’s diamond ring to C. By agreement, the
benefit of the term on the 4 debts was made in favor of C. Assuming that D has P6,000.00 on
June 18 and is ready to pay C, which of the P6,000.00 June 18 and is ready to pay C, which of
the following statements is correct?

a. D may apply his payment of P6,000.00 to any of the debts due on June 12, June 15, and June
18 since they are all due as of June 18.
b. D may apply it only to debt due on June 20 because it is the most burdensome to him.
c. D must apply the payment proportionately to the debts due as of June 18 P2,000.00 each.
d. D may apply the payment to any of the four debts.

39. The offer made by the debtor to pay his obligation to his creditor is known as:

a. consignation.
b. tender of payment.
c. application of payment.
d. dation in payment.

40. Consignation alone without any tender of payment is sufficient in the following cases
except:

a. when the creditor is absent or unknown or does not appear at the place of payment.
b. when the creditor presents the title to the obligation for collection.
c. when without just cause, the creditor refuses to give a receipt.
d. when two or more persons claim the same right to collect.
41. M owes P P10,000.00. The obligation is evidenced by a promissory note. Subsequently, P
assigned the note to A, A to B, B to C, and C back to M. The obligation of M is extinguished by:

a. compensation.
b. confusion.
c. condonation.
d. The obligation is not extinguished because there was no payment.

42. In order that condonation may extinguish an obligation involving a movable properly whose
value exceeds P5,000.00 –

a. It is sufficient that the condonation and the acceptance are writing, even a private one.
b. It is required that the condonation and the acceptance must be in a public instrument.
c. The delivery of the document evidencing the debt is sufficient since the property is movable.
d. The condonation and the acceptance may be made orally.

43. One of the following is not a requisite of legal compensation. Which is it?

a. That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other.
b. That the two debts be due.
c. That both debts be liquidated and demandable.
d. That the debts are payable at the same place.

44. Henry, husband, and Wilma, wife are legally separated. By order of the court which decreed
the legal separation, Henry is obliged to give a monthly support of P10,000.00 to Wilma payable
within the first five days of the month. Wilma owes Henry P10,000.00 by way of a business
loan. On the other hand, Henry has not yet given Wilma’s support of P10,000.00 for this month.
Both debts are already due. Which of the following statements is correct?

a. Both debts are extinguished by legal compensation because both are already due.
b. Wilma may claim compensation but not Henry.
c. Henry may claim compensation but not Wilma.
d. Neither one may claim compensation because the debts are not of the same kind.

45. D owes C P10,000.00 with G as guarantor. C on the other hand, owes D, P8,000.00. Both
debts are already due but D is insolvent. In this case –

a. C may collect from G P10,000.00

b. C may collect from G P2,000.00 because a guarantor can set up compensation as regards
what the creditor may owe the principal debtor.
c. C may collect nothing from G because D is insolvent.
d. C may collect P8,000.00 from G.
46. 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 substitution of debtor is known as –

a. expromision.
b. delegacion.
c. tradition.
d. dacion en pago.

47. Refer to the facts in No. 46. Assume also that on due date, T could not pay because of his
insolvency which was in facts subsisting but was not known to D or of public knowledge at the
time that D delegated his debt. In this case –

a. C can revive D’s debt because T’s insolvency was already existing at the time that D delegated
his debt.
b. C can revive D’s debt whether or not he (D) was aware of T’s insolvency since he (D)
proposed the substitution.
c. C cannot hold D liable because his (D’s) obligation was extinguished when he was substituted
by T
d. The novation is void because D did not take steps to determine the solvency of T when he (D)
delegated his debt.

48. 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 of the following statements is correct?

a. The novation is void because the original obligation is of rice from D.

b. The novation is valid because the new obligation is valid Hence, C can demand the delivery of
5 sacks of rice from D
c. The original obligation although void is validated by the new obligation. Hence, C can demand
the delivery of 5 sacks of rice from D
d. The new obligation is only voidable because D had not yet performed the original obligation
at the time of novation. Accordingly, the new obligation is binding and C may demand the
delivery of 5 sacks of rice from D until the new obligation is annulled by a proper action in
court.

49. On July 1, 2002, D obliged himself to give C P50,000.00 if C will marry X on or before
December 31, 2002. The condition of the obligation is a:

a. positive condition.
b. negative condition.
c. joint condition.
d. impossible condition.
50. Refer to No. 49. Which of the following statements is incorrect?

a. The obligation of D is demandable if C marries X on or before December 31, 2002.

b. The obligation of D is extinguished if it is already January 1, 2003 and C has not yet married X.
c. The obligation of D is extinguished on December 2, 2002 if X dies on the said date and C has
not yet married X.
d. The obligation is demandable if C marries X on January 1 2003.

51. On July 1, 2002, D obliged himself to give C specific car if C will not marry X on before
December 31, 2002. The condition of the obligation is a:

a. positive condition.
b. negative condition.
c. divisible condition.
d. impossible condition.

52. Refer to No. 51. Which of the following statements is incorrect?

a. The obligation of D is demandable if C marries X on January 1, 2003.

b. The obligation of D is demandable on December 2, 2002 if X dies on the said date and D has
not yet married X.
c. The obligation of D is demandable if it is already January 1, 2003 and D has not yet married X.
d. The obligation is demandable if C marries X on December 2, 2002.

53. D owes C P5,000.00. 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.

a. The payment did not extinguish the debt of D to C because it was made without the consent
of D.
b. The payment did not extinguish the debt because it was not made by D himself.
c. The payment is considered valid because it was accepted by the creditor.
d. The payment may be considered valid if T had the intention to be reimbursed.

54. A mode of extinguish obligation up to their concurrent amount when two persons are
principal debtors and creditors of each other is called:

a. novation.
b. payment.
c. compensation.
d. merger.

55. D owes C P6,000.00. No date for payment was stipulated by the parties.

a. C cannot require D to pay because there is no date for payment.

b. C can require D to pay at anytime.
c. D is not liable to C because the obligation is void there being no date of payment.
d. D is not required to pay unless C goes to court and asks the court to fix period for the
payment.

56. Under a contract executed on November 1, 2003, D obliged himself to give a specific horse
to C on December 10, 2003. On December 8, 2003, C demanded the delivery of the horse but D
did not comply. The following day, the horse was struck by lightning and died instantly.

a. The obligation of D is extinguish because the loss is due to fortuitous event and D was not in
default.
b. The obligation of D is not extinguished because D can deliver another horse.
c. The obligation of D is not extinguished because D was in default.
d. The obligation of D is not extinguished because the demand was not made on due date.

57. Which of the following is not considered a conditional obligation?

a. D to pay C P5,000.00 as soon as D has the means.

b. D to pay C P5,000.00 if C marries Y.
c. D to pay C P5,000.00 if C tops the CPA Examinations.
d. D to pay C if X dies of malaria.

58. The distinction between merger and compensation is that in merger.

a. The two debts may be payable at difference places.

b. Two persons are in their own right debtors and creditors of each other.
c. The debter and creditor may agree on the set-off of debts that are not yet due.
d. The debtor and the creditor refer to only one person.

59. The passage of time as a mode of acquiring or losing a right including the extinguishment of
an obligation is called:

a. remission.
b. novation.
c. prescription.
d. merger.

60. Legal compensation shall not be proper In three of the following cases. Which is the
exception?

a. Commodatum.
b. Civil liability arising from a criminal offense.
c. Gratuitous support.
d. Bank deposit.
61. Cecilia the owner of a sari sari store, purchased several bags of “Dulcita” candy worth
P5,000.00 from Olga, an authorized dealer of the product. On due date, Cecilia, who sells the
candies at P1.00 each, tendered her payment to Olga consisting of 5,000 pieces of P1.00 coins.

a. Olga may refuse to accept the payment and demand the she be paid in bills.
b. Olga may not refuse to accept the payment because what Cecilia was offering as payment is
money circulated in the Philippines.
c. Cecilia may consign the payment in court if Olga refuses to accept it.
d. The tender made by Cecilia was valid because the P1.00 coins came from her sales and she
had plenty of them.

62. Dominico and Domingo are jointly and severally liable to Crispino for P100,000.00. The
obligation is due on June 30, 2004, Dominico paid the whole amount of the note to Crispino. If
Domingo reimburses Dominico on July 15, 2004, Dominico is entitled to receive from Domingo:

a. P50,000.00 plus interest from June 25 to July 15, 2004.

b. P50,000.00 plus interest from June 25 to June 30, 2004.
c. P50,000.00 plus interest from June 30 to July 15, 2004
d. P50,000.00 with no interest because Dominico paid the note before due date.

63. One of the following statements does not pertain to dacion en pago. Which is it?

a. Ownership of the thing is transferred to the creditor.

b. The debtor must be insolvent.
c. It does not affect all the properties of the debtor.
d. It does not require plurality of creditors.

64. One of the following does not apply to payment by cession. Which is it?

a. Ownership of the debtor’s properties is transferred to the creditors.

b. The debtor must be insolvent.
c. It affects all the properties of the debtor except those exempt from execution.
d. There are several creditors.

65. A,B and C are solidarily liable to X for P30,000.00. A pays X the whole amount due. C,
However, is insolvent.

a. A alone will bear the share of C who is insolvent since he (A) made the payment.
b. A can collect from B P10,000.00
c. A can collect from B P15,000.00
d. A can demand a refund of P10,000.00 from X pertaining to C’s share since C is insolvent.

66. Anna Almeda, Belinda Bersola, and Claudia Cabrera executed the following promissory
note:
“I promise to pay Dolores Dominguez or order the sum of P30,000.00 on June 30, 2004.

(Sgd.) Anna Amelda

(Sgd.) Belinda Bersola
(Sgd.) Claudia Cabrera

On June 30, 2004, Dolores Dominguez can collect from Anna Amelda:

a. P10,000.00
b. P30,000.00
c. P20,000.00
d. Nothing because the note is void since it says “I promise” but was signed by three persons.

67. One of the following is a valid obligation. Which is it?

a. D promised to give C P50,000.00 if C will not swim across the Pacific Ocean.
b. D promised to give C P50,000.00 If D goes to Tokyo.
c. D promised to give C P50,000.00 if C can fly to the moon
d. D promised to give C P50,000.00 if C gives him 5 grams of marijuana.

68. An obligation where various prestations are due but the performance of all off them is
required in order to extinguish the obligation is known as:

a. alternative obligation.
b. facultative obligation.
c. conjunctive obligation.
d. simple obligation.

69 A,B and C are solidary debtors of X in the amount of P9,000.00. Subsequently, X renounced
the share of A. A accepted the renunciation of his share. On due date, B paid X P6,000.00. B
demanded reimbursement from C but C is insolvent. In this case:

a. B may demand the payment of P3,000.00 from A.

b. B may not demand any payment because the share if A had already been renounced or
condoned.
c. B may demand P1,500.00 from A representing A’s share in C’s insolvency.
d. B may demand from A P4,500.00 so that their sharing in the total debt is equal.

70. D is indebted C for P20,000.00 which is due on June 10. C owes D P15,000.00 which is due
on June 5. On June 8, C assigned his credit rights to T. D gave his consent to the assignment but
did not reserve his right to the compensation. On June 10, how much may T collect from D?

a. P20,000.00.
b. P15,000.00.
c. P5,000.00.
d. Nothing.

71. On May 1, 2004, D executed a written undertalking obliging himself to deliver 100 sacks of
rice to C on May 31, 2004. On May 28, 2004, C demanded the delivery of 100 sacks of rice from
D but D did not comply. The following day, a fire of undetermined origin destroyed D’s
warehouse together with about 500 sacks of rice stored therein and from which D intended to
get 100 sacks of rice for delivery to C.

a. D’s obligation to deliver 100 sacks of rice to C is extinguished, the cause of the loss being a
fortuitous event.
b. D’s obligation to deliver 100 sacks of rice to C is not extinguished because he can get 100
sacks of rice from other sources.
c. D’s obligation to delivery 100 sacks of rice to C is not extinguished because D was in default.
d. D’s obligation is to pay damages because he was in default.

72. On June 1, 2003, Demetrio obtained a loan of P100,000.00 from Cornelio. The loan, which
payable on or before June 1, 2004, is secured by a chattel mortgage on Demetrio’s bran-new
Toyota car with plate number XYZ 123. On February 1, 2004, while Demetrio was opening the
trunk of his car at the parking lot of a grocery store to place the groceries he had just
purchased, three unidentified men approached him and took his car at gunpoint. He reported
the carnaping to the authorities but his car has not been recovered.

a. Cornelio may demand immediate payment of the loan unless Demetrio gives another
security therefor.
b. Cornelio may demand payment only on June 1, 2004 because Demetrio has the benefit of the
period and the loss of the car was due to force majeure.
c. Cornelio may no longer demand payment since the loan was extinguished by reason of the
loss of the car due to fortuitous event.
d. Cornelio may demand immediate payment even if Demetrio offers another security because
the car is determinate and could not be replaced.

73. The estate of X who died recently, shows, among other documents/contracts, the following:

I. A certificate from Harvard University granting a scholarship to X X was subjected to

exhaustive examinations and interviews before he was granted the scholarship. He was
supposed to start studying at Harvard in 3months time.

II. Article of partnership of XYZ Enterprise showing X as a general partner.

III. A stock certificate of DEF Corporation showing X as the owner of 5,000 shares of stock.

IV. A promissory note amounting to P 100,000.00 executed by M in favor of X. The note is due
after 90 days.
Which of the rights of X arising from the said documents/contracts will be transmitted to the
heirs of X?

a. I and II.
b. II and III.
c. III and IV.
d. I and IV.

74. The Following statements pertain to either payment by cession or dacion en pago.

I. The debtor is insolvent.

II. Ownership of the thing/s is transferred to the creditor/s
III. Plurality of creditors is required.
IV. Obligation are totally extinguished as a rule.

a. Statements I and IV pertain to payment by cession.

b. Statements I and III pertain to dacion en pago.
c. Statements II and IV pertain to dacion en pago.
d. Statements III and IV pertain to payment by cession.

75. The return of what has been paid by mistake is known as:

a. solutio indebiti.
b. negotiorum gestio.
c. quasi-delict.
d. natural obligation.

Items 76, 77 and 78 are base on the following information:

Dolores borrowed P15,000.00 from Consuelo. On due date, Dolores was not able to pay but she
promised to give Consuelo a specific ring, a specific bracelet, or a specific necklace, in payment
of the debt. Consuelo accepted the offer of Dolores

76. What kind of obligation is the new obligation of Dolores?

a. Facultative obligation.
b. Compound obligation.
c. Alternative obligation.
d. Simple obligation.

77. How was the obligation of Dolores to pay P15,000.00 extinguished?

a. By compensation.
b. By novation.
c. By confusion.
d. By condonation.

78. Assume that before Dolores could deliver any of the ring, bracelet or necklace, the ring and
the bracelet were lost successively through the fault of Dolores. In this case:

a. Consuelo may demand the payment of the price of the ring or the price of the bracelet plus
damages, or the delivery of the necklace.
b. Dolores may delivery the necklace to Consuelo without any obligation.
c. Dolores may deliver the necklace to Consuelo with the obligation to pay damages because
the ring and the necklace were lost through her fault
d. Consuelo may demand the payment of the price of the bracelet which was the last item that
was lost, plus damages.

79. D obtained a loan of P100,000.00 from C. The load agreement showed that the loan was
payable wihtone year with interest at 6% per annum. However, there was no provision saying
that the rights and obligations of the parties would be transmitted to their heir or successors-in-
interest. Before maturity, C died leaving his son S as heir. Which of the following statements is
correct?

a. S cannot collect from D because no mention was made in the agreement that the credit right
would be transmitted to the heirs of C.
b. S can collect from D although no mention was made in the agreement that the credit right
would be transmitted to the heirs.
c. S cannot collect from D because the credit right is personal to C.
d. S cannot collect from D because the law prohibits the transmission of credit rights.

80. Hilario, husband, and Wynona, wife, are legally separated. By order of the court which
decreed the legal separation, Hilario is obliged to give a monthly support of P20,000.00 to
Wynona payable in advance within the first five days of the month. Wynona owes Hilario
P20,000.00 by way of loan. On the other hand, Hilario has not yet given Wynona’s support of
P20,000.00 for the preceding month and another P20,000.00 for the present month. All the
debts are already due. Based on the foregoing facts, which of the following statements is
incorrect?

a. If Wynona demands her support for the preceding month, Hilario may set up compensation
as regards the loan that Wynona owes him.
b. If Wynona demands her support for the current month, Hilario may claim compensation as
regards the loan that Wynona owes him.
c. If Hilario demands payment of the loan, Wynona may set up compensation as regards her
support for the preceding month that Hilario owes her.
d. If Hilario demands payment of the loan, Wynona may set up compensation as regards her
support for the current month that Hilario owes her.
CONTRACTS

TEST I – MULTIPLE CHOICE. Select the best answer by writing the letter of your choice.

1. A meeting of minds between two persons whereby one binds himself with respect to the
other to give something or to render some service is known as:

a. obligation
b. consent.
c. contract.
d. stipulation.

2. The stage of a contract according to the order of their occurrence are:

a. birth, conception and consummation

b. conception, consumption and birth.
c. conception, birth and consumption.
d. consumption, conception and birth.

3. The elements of a contract without which a contract would not exist are known as:
 a. Accidental elements.
b. Natural elements.
c. Special elements.
d. Essential elements.

4. A consensual contract has the following essential elements:

a. consent of the contracting parties, object certain and cause or consideration.

b. consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

5. A real contract has the following essential elements:

a. consent of the contracting parties, object certain and cause or consideration.

b. consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

6. A solemn or formal contract has the following essential elements:

a. consent of the contracting parties, object certain and cause or consideration.

b. consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

7. Elements that accompany certain contracts unless set aside or suppressed by the parties are
known as:

a. natural elements.
b. accidental elements.
c. essentials elements.
d. original elements.
8. The warranty against hided defects in a contract of sale is an example of:

a. natural element.
b. accidental element
c. original element.
d. stipulated element.

9. The refer to particular stipulations of the parties in a contract.

a. Accidental elements.
b. Natural elements.
c. Inherent elements.
d. Essential elements

10. One of the following is a natural element of a sales contract.

a. Terms of payment.
b. Rate of interest.
C. Place of delivery eviction

11. A contract that can stand by itself is known as:

a. accessory contract,
b. principal contract.
c. commutative contract.
d. gratuitous contract.]

12. A. contract does not have any special name under the law is known as:

a. nominate contract.
b. innominate contract.
c. special contract.
d. nominal contract.

13. A contract where both parties are required to do or something is known as a:

a. bilateral contract.
b. unilateral contract.
c. gratuitous contract.
d. commutative contract.
14. A contract where the parties contemplate a real fulfillment, hence, equivalent values are
given known as:

a. commutative contract.
c. gratuitous contract.
D. aleatory contract.14

15.The contracting parties may establish stipulations, clauses, term and conditions as they may
deem convenient provide they are not contrary to law, morals good custom, public order or
policy. This known as the principle of:

a. liberty of contract.
b. mutuality of contract.
c. relativity of contract.
d. obligation force of contract.

16. The contract must bind both contracting parties; its validity or compliance cannot be left to
the will of one of them. This is known as the principle of:

a. mutuality of contract.
b. relativity of contract.
c. consensuality of contract.
d. freedom to contract.

17. Contracts take effect only between the contracting parties, their assign and heirs, except in
cases where the obligations and rights arising from the contract are not transmissible by their
nature, or by stipulation or provision of law. This principle of contract is known as:

a. relativity of contract.
b. mutuality of contract.
c. obligatory force of contract.
d. liberty of contract.

18. D borrowed P500,000.00 from C. D died without having paid his loan obligation to C. He left
S, his son and heir, properties worth P400,000.00

a. S is liable to C for P500,000.00

b. S is liable to C for P400,000.00
c. S is liable to C for P100,000.00
d. S is not liable at all because he should not be made to shoulder the obligation of his father.

19. A contract may be enforced by or against a third person, except:

a. in the case of stipulation pour autrui
b. when a third person induces another to violate his contract.
c. in case of contracts intended to defraud creditors.
d. when the benefit to the third person is merely incidental.

20. The principle that contracts are perfected by mere consent is known as:

a. consistency of contract.
b. consensuality of contract
c. consummation of contract.
d. mutuality of contract.

21. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith. From perfection, the parties are bound not only to
the fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law. This is knowm as
the principle of :

a. consummation of contract.
b. consensuality of contract.
c. obligatory force of contract and compliance in good faith.
d. mutuality of contract.

22. One of the following is not real contract.

a. Pledge.
b. Commodatum
c. Deposit
d. Sale

23. D borrowed P100,000.00 from C. The obligation is secured by mortgage on D’s land
building. C registered the mortgage with the Register of Deeds. Thereafter, D sold the land and
building to X who was not personally aware the existence of the mortgage at the time of sale
since only the photocopy of the transfer certificate of title which did not yet contain the
annotation of the mortgage was shown to him. It was only when he went to Register of Deeds
to register the sale of the land building to him that he learned of the mortgage.

a. C can collect from D and if D cannot pay, C can foreclose the mortgage although the land and
building are now owned by X.
b. C can collect from D, but if D cannot pay, C cannot foreclose the mortgage because X was not
aware of the existence of the mortgage at the time he bought the land and building.
c. C cannot collect from D. He can only go after the mortgage which was given as security
d. C cannot foreclose the mortgage because X was not a party thereto.
TEST III – TRUE OR FALSE. Write the word “TRUE” if the statement is true, and the word “FALSE”
if the statement is false.

1. The determination of the performance of a contract may be left to a third person, whose
decision shall not be binding until has been made known to both contracting parties.

2. A contract entered into in the name of another without authority is unenforceable against
the latter.

3. Acceptance of a contract by letter or telegram does not bind the offerer except from the time
it came to his knowledge.

4. When the acceptance of a contract is by letter or telegram, the contract is presumed to have
been entered into in the place where the offer was made.

5. The person making the offer may fix the time, place, and manner of acceptance, all of which
must be complied with.

6. An offer made through an agent is accepted from the from the time acceptance is
communicated to the principal by the agent.

7. When the offerer has allowed the offeree a certain period to accept, the offer n=may be
withdrawn at any time before acceptance by communicating such withdrawal except when the
option is founded upon a consideration.

8. Business advertisements of thing for sale are definite offers unless it appears otherwise.

9. Contracts entered into during a lucid interval are valid.

10. A simple mistake in the computation in a contract will render the contract voidable.

11. There is no mistake in a contract if the party alleging it knew the doubt, contingency, or risk
affecting the contract.

12. Mutual error as to the legal effect of an agreement even if the real purpose of the parties is
frustrated does not vitiate consent since ignorance of the law excuse no one from compliance
therewith.

13. A threat to enforce one’s claim through competent authority, although the claim is just or
legal, is intimidation and vitiates consent.

14. Violence or intimidation employed by a third person upon a contracting party does not
vitiate consent.
15. The contract is not considered voidable if both parties employed fraud to obtain consent.

16. Failure to disclose facts, when where is a duty reveal them, as when the parties are bound
by confidential relations, does not constitute fraud.

17. The usual exaggerations in trade, when the other party had an opportunity to know the
facts, are not in themselves fraudulent.

18. A mere expression of an opinion does not signify fraud if not made by expert although the
party has relied on the knowledge of the said person expressing the opinion.

19. Misrepresentation by a third person does not vitiate consent, unless such misrepresentation
has created substantial mistake and the same is mutual.

20. Incidental fraud does not render a contract voidable but only obliges the person employing
it to pay damages.

21. A relatively simulated contract is void.

22. As a rule, future inheritance may not be the object of contract.

23. The fact that the quantity of the object of a contract is not determinate does not affect the
validity of a contract, provided that it is possible to determine the same, without the need of a
new contract between the parties.

24. The illegality of the motive of a party to a contract renders the contract void.

25. Although the cause is not stated in the contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary

26. If a contract is required to be in a certain form for its perfection, that form is indispensable
and if it not followed, the contract is void.

27. In order that reformation of a contract may be availed of by a party, there should be a
meeting of minds of the parties to the contract.

28. Reformation is not available if the contract is void.

29. When one part as brought an action to enforce the instrument, he cannot subsequently ask
for its reformation.

30. If the terms of a contact are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of the stipulation shall control.
31. The interpretation of obscure words or stipulations in contract shall not favor party who
caused the obscurity.

32. The action for rescission is subsidiary; therefore, it cannot be instituted by a party if there
are other legal means to obtain reparation for the damages he suffered.

33. Rescission of a contract shall be only to the extent necessary to cover the damages caused.