Obligations and Contracts Final Exam (A.Y.

2021-2022)

I. Multiple Choice Questions (1 point each)

1. Parties to a contract are bound by the stipulations, agreement,

conditions they enter into and must comply with them in good
faith, except:
a. Stipulation that the debtors shall not be solidarily liable
for the payment of the obligation they incurred.
b. Stipulation that is contrary to the provision that the
debtor in an obligation to deliver a specific thing must
also care for the thing with the diligence of a good father
of a family.
c. Stipulation that in an alternative obligation, the creditor
shall have the right to choose.
d. Stipulation that the creditor shall not sue the debtor for
any fault, negligence, or fraud the debtor commits in the
performance of the obligations arising from the contract.
e. Stipulation that disregards the provisions of the Civil
Code on prescription.

2. 'Mutuality' refers to the characteristic of a contract that-

a. Validity cannot be allowed if the contract stipulations are
prepared only by one of the contracting parties and the
other is only to reject or accept the same totally and not
allowed to counter-offer.
b. The fulfillment of the contract cannot be left to a third
person.
c. None of the choices.
d. Validity/effectivity of the contract be left to the
 happening of uncertain future event.
e. A condition in the obligation arising from the contract
cannot be left to the discretion of the creditor.

3. The following provision in a lease contract are valid, except-

a. A stipulation that the lessee is given the right to decide
whether or not to buy the leased premises from lessor if
the latter so decides and only after it is offered first to a
third party who rejects the same.
b. A stipulation that the lease term shall not be fixed but
may be terminated by the lessor if the lessee fails to pay
the monthly rent.
c. The lessee is given the sole option to renew a contract
that is fixed for a one-year term for another year.
d. The lease agreement is for a period of 20 years subject to
renewal for another 20 years at the option of the lessee
and a new rate of a yearly rent to be agreed upon.
e. None of the choices.

4. Relativity of contracts is subject to the limitation that-

a. provides for a provision pour autrui in the contract.
b. the agreement creates real rights and real obligations.
c. All of the choices.
d. the nature of the contract stipulations may be the basis
for accion directa.
e. the contract was entered into by the parties in
consideration of each other's unique personal traits, skills
and relationship.

5. The following rights and/or obligations of the parties to a

contract are transmissible except-
a. The right of the lessee to the use and occupancy of the
leased premises that provides for a prohibition against
sub-leasing.
 b. The right of a party to a contract who is granted the right
to enjoy the fruits of the property of the other party with
the obligation to preserve its form and substance.
c. The obligation of the lessor to honor the provision in the
lease contract giving the lessee the right of first option.
d. The right of a creditor to collect a debt/loan in the
amount of P1M extended to his fiancé.
e. The obligation of the fiancé in the above loan agreement
to pay P1M.

6. In a contract of loan of an amount of P10M, the debtor agreed

to the following stipulations: (i) to pay an interest rate of 6% per
annum; (ii) to pay for a penalty in case of delay in the amount of
10% of the amount still due; (iii) to pay the interest rate agreed
upon to a reputable charitable institution; (iv) to provide for a
real estate mortgage to secure the loan over his house and lot;
and (v) to pledge his luxury yacht. The full payment by the
debtor of the principal amount only of the loan, accepted by the
creditor without objection, shall terminate all agreements above,
except-
a. Stipulation (ii)
b. Stipulation (iv and v)
c. None of the choices
d. Stipulation (i)
e. Stipulation (iii)

7. The obligation of a person who through an act or performance

by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just
or legal ground shall return the same arises from-
a. Law
b. Contract
c. Quasi-delict
d. Quasi-contract
 e. Acts or omissions punishable by law

8. The obligation of a person to pay just compensation to

another who, during a fire, flood, storm or other calamity, saved
from destruction or loss the property of the former without
his/her knowledge, is one that arises from-
a. Contract
b. Acts or omissions punishable by law
c. Law
d. Quasi-contract
e. Quasi-delict

9. A judgment creditor, after exhausting the properties/assets of

the judgment debtor, to fully satisfy the judgment claim or
award may file-
a. petition for payment by cession
b. an accion subrogatoria
c. an accion pauliana
d. a criminal action for estafa
e. an action for collection against the judgment debtor's
sister who is a multi-millionaire.

10. D owes the following due and demandable debts to C:

1st Loan: P1M with 10% interest per annum

2nd Loan: P2M secured by a chattel mortgage consisting of a
Toyota Hi-Ace van.
3rd Loan: P2M with 10% interest per annum
4th Loan: P2M secured by REM over a property
5th Loan: P2M with a 20% interest per annum

If D pays C the amount of only P2M, application of payment

shall be in accordance with-
 a. First, to the total interest payable, thereafter the very first
P1M obligation with the 10% interest.
b. Whole amount paid must be applied to the P2M debt
secured by the REM, being very onerous.
c. First, to the total amount of interest payable; then the
balance to the P2M secured by the Toyota van.
d. First, to the total amount of interest payable, then the
balance to the P2M loan secured by the REM.
e. Payment to the very last loan in the amount of P2M with
the 20% interest, it being the most onerous.

11. Tarzan, who was abandoned by his parents in the jungle,

hence raised by gorillas, could not read or write, entered into a
contract with Jane, a businesswoman, selling to her the 10
million-peso house and lot located at Silang, Cavite, Tarzan
inherited from his parents. Tarzan was fully paid by Jane in the
amount of P20M. The contract of Tarzan and Jane is-
a. Void
b. Valid
c. Valid but unenforceable. And since Tarzan accepted
payment, the defect was cured by ratification.
d. Rescissible. May be rescinded by Jane as she paid much
more than the worth of the property.
e. Valid but defective, voidable

12. Joselito, 17 years old, needed desperately the amount of

P65k to pay for his outstanding obligation to San Beda Senior
HS where he was to graduate. He sold therefore his Rolex watch
to his classmate Alex, 17 years old for P65k although the watch
was worth P250k. Upon receipt of the money, Joselito
immediately paid SBCA and was allowed to graduate. When the
lawyer uncle of Joselito learned of the transaction, he may
validly-
a. Ask for the rescission of the contract of sale between
 Joselito and Alex, and ask SBCA to return the money of
Alex in exchange for the return of the watch.
b. Ask for the annulment of the contract of sale as the same
was clearly voidable.
c. Seek the nullification of the contract of sale and the
payment of Joselito to SBCA as both acts by Joselito, a
minor were void ab initio.
d. None of the choices
e. Sue SBCA for the recovery of the P65k as the contract of
sale was unenforceable.

13. Mario acquired a Mastercard from the Bank of the

Philippine Island (BPI). One of the accredited establishments
where such credit cards may be used is SnR. However, when
Mario used the card to purchase groceries, SnR refused to honor,
alleging that management, just the other day, decided to accept
only cash for payment and no longer on credit. In this case,
Mario has a cause of action for damage against-
a. SnR for he (Mario) was a donee beneficiary in the
contract between BPI Card and SnR.
b. SnR for breach of its duties and obligation as a promissor
in the contract it entered into with BPI card.
c. BPI Mastercard for breach of the provisions of the credit
card contract between Mario, holder of the card and BPI,
the owner of the card.
d. None of the choices
e. SnR and BPI jointly and solidarily as principal parties
with whom Mario entered into a contract with for the
issuance of the credit card.

14. Mary executed a sale with Beth, selling her house and lot to
the latter for P25M. John, Mary's father, upon learning of the
sale, prevailed over Mary not to proceed with the sale as the
property was much more than just P25M. As a consequence,
Mary refused to deliver the property to Beth. Beth may legally
do the following, except-
a. Ask the court to compel Mary to execute the proper
documents as required to be able to transfer the title in
her (Beth) name.
b. None of the choices.
c. Sue Mary for breach of contract to sell the house and lot.
d. Ask that the contract of sale be rescinded on the ground
of non-fulfillment of Mary's obligation.
e. Sue John for applying undue influence on Mary that
made her discontinue with the contract.

15. The following are the essential requisites for a valid offer of
a contract, except for-
a. All of the choices are essential requisites.
b. The offer must be directed only to a particular person,
identified by the offeror specifically.
c. The offer must be definite, that is, the offer must clearly
provide for the type of contract proposed.
d. The offer must be complete in all its aspects so as the
offeree may be presumed to be able to decide
intelligently whether or not to accept the offer.
e. The offeror must have the intention to be bound by his
offer if ever it is accepted by the offeree and not just
made out of jest.

16. Jose borrowed from Mike the amount of P10M. Mike,

however, requested Jose to convince Jack, a billionaire, to be his
(Jose) co-obligor to ensure full back-payment of the loan. Mike
also requested that the loan be for a term of one (1) year only
and to apply 10% interest. Jose agreed. Jack also allowed
himself to be a co-obligor. All these agreements, were done
orally only. Nothing was reduced in writing. In this case, the
agreements among Jose and Jack, obligor and Mike, creditor,
result to a-
a. The principal loan of P10M where Jose and Jack are co-
obligors is valid, but the agreement to pay 10% interest
is unenforceable.
b. Totally void contracts, as the agreements were not
reduced in writing.
c. The principal contract of loan for P10M where Jose is
principal debtor is valid, but the oral agreement
instituting Jack as co-obligor is unenforceable, while the
agreement to pay 10% interest is void.
d. All the agreements were unenforceable as they were not
in writing.
e. The principal loan contract for P10M where Jose is
principal debtor is valid, but both the oral agreements to
constitute Jack as co-obligor and the payment of 10%
interest are unenforceable.

17. Mario, an auctioneer, put up a billboard along SLEX

announcing several heavy equipment/vehicle for auction/bidding
open to the public. Three (3) bidders responded: (i) Alex offered
the amount of P10M for all the units auctioned; (ii) Tony offered
P15M for all; and (iii) Gerry, for all also, the amount of P20M.
In this case, Mario is-
a. Obliged to enter into contract with all the bidders
dividing the units among them in proportion to the
amount of their respective bids.
b. Not obliged to enter into a contract with any of the
bidders and may opt to offer the units to his best friend
Luis who offered only P5M.
c. Obliged to enter into a contract with any of the bidders
and should not deal anymore with anyone including
Luis, his best friend.
d. Obliged to enter into a contract with the highest bidder,
Gerry.
 e. Obliged to enter into a contract with the very first bidder-
Alex, as he is in law considered to have first accepted the
offer of Mario thereby creating already a valid and
binding contract between the two (2) of them.
Subsequent offers made by Tony and Gerry no longer
had any legal effect.

18. Acceptance of an offer, to bring about the existence of a

valid contract must have the following requisites, except-
a. Acceptance must be communicated to the offeror only
and cannot be to the world at large or public.
b. None of the choices.
c. The acceptance must be absolute and not conditional.
d. The offeree must have the clear intention to be bound by
the contract stipulation he is agreeing to.
e. Acceptance must be communicated within a reasonable
time.

19. The following are all exceptions to the Mirror-Image Rule of

acceptance, except-
a. Acceptance of the substitute in a contract creating a
facultative obligation.
b. Acceptance made by offeree who edits some of
provisions of the contract to clarify several ambiguous
sentences/phrases.
c. Acceptance of a contract providing for several alternative
obligations where the offeree made the choice.
d. An acceptance of just one of the contracts among several
of a complex-offer made by offeror.
e. An 'amplified' acceptance of an offer.

20. Don Manolo, a very wealthy 88 years old man, married

Doña Imelda, fell so much in love with Carmina, Bb. Pilipinas
2022. As such, Don Manolo pursued Carmina intensely,
showering her with several gifts and favors. Don Manolo even
executed a notarized deed of donation of a luxurious
condominium unit located at BGC, Taguig. When Carmina
received the deed of donation, and finally was asked by Don
Manolo to spend one erotic night with him in the said condo
unit, she outright rejected the same and refused to see Don
Manolo again or even talk to him. Incredibly heartbroken, Don
Manolo became so depressed, refused to eat, drink or sleep, and
after a week died. Three (3) days after, Carmina took over the
condo unit and occupied the same. Doña Imelda, as widow of
the donor and sole heir now wants to take it back from Carmina.
In this case, Doña Imelda may-
a. Not take back the condo unit on the ground of the failure
of Carmina to accept in writing the donation because by
her act of immediately taking possession and occupying
the condo unit after the death of Don Manolo, it is clear
evidence of her acceptance of the same.
b. Not take back the condo unit because the immorality of
the motive does not affect the validity of the donation,
the cause being presumed to be separate and distinct
therefrom. The cause in this case was valid, consisting of
the pure liberality of the donor.
c. Take back the condo unit as the donation was voidable
having been executed by an incompetent, hence,
incapacitated person by reason of Don Manolo's advance
age. Doña Imelda as heir may file therefore a petition for
the annulment of the donation.
d. Take back the condo unit because the donation of Don
Manolo in favor of Carmina was never perfected as
Carmina never accepted in writing the donation during
the lifetime of Don Manolo.
e. Take back the condominium unit because the donation of
Don Manolo to Carmina was based on an immoral
motive on the part of the donor which should also be
 considered the cause of the said contract, hence donation
was void.

21. Arlene owns a row of apartment houses in Kamuning,

Quezon City. She agreed to lease Apartment No. 1 to Janet for a
period of 18 months at the rate of P10,000 per month. The lease
was not covered by any contract. Janet promptly gave Arlene
two (2) months deposit and 18 checks covering the rental
payment for 18 months. Subsequently, Arlene entered into a
verbal option contract granting Janet three (3) months within
which to decide whether or not to buy Apartment 1 for which
Janet paid P10,000 as option money. Before the 3-month period
expired however, Arlene sold the apartment to Jun. In this
particular case, which of the following statement is correct-
a. Janet can have the contract between Arlene and Jun
annulled as voidable and that the contract if allowed to
be enforced shall prejudice her (Janet).
b. Janet may have the contract of sale between Arlene and
Jun rescinded and compel Arlene to enter into a new sale
with her (Janet) for Apartment 1.
c. Janet may file an action for damages on the ground of
breach by Arlene of the option contract but not to have
the same rescinded.
d. None of the choices.
e. Janet cannot have any valid cause of action against
Arlene as the option contract she entered into was not
reduced in writing and hence unenforceable.

22. Arlene owns a row of apartment houses in Kamuning,

Quezon City. She agreed to lease Apartment No. 1 to Janet for a
period of 18 months at the rate of P10,000 per month. The lease
was not covered by any contract. Janet promptly gave Arlene
two (2) months deposit and 18 checks covering the rental
payment for 18 months. This show of good faith prompted
Arlene to promise Janet in writing that should Arlene decide to
sell the property, she would give Janet the right of first refusal.
Midway through the lease period, Arlene decided to sell
Apartment No. 1 to Jun in breach of her promise to Janet to
grant her the right of first refusal. Thus, Janet filed an action
seeking the recognition of her right of first refusal, the payment
of damages for the violation of this right, and the rescission of
the sale between Arlene and Jun. Is Janet's action meritorious?
a. No, a right of first refusal involves an interest over real
property that must be embodied in a written contract to
be enforceable.
b. None of the choices.
c. Yes, under the Civil Code, a promise to buy and sell a
determinate thing is reciprocally demandable.
d. No, the promise to buy and sell a determinate thing was
not supported by a consideration.
e. Yes, Janet's right of first refusal was clearly violated
when the property was not offered for sale to her before
it was sold to Jun.

23. Robert, owner of a 10,000 sqm commercial property located

in the heart of Rockwell, Makati, entered into a written
agreement with Francis, a contractor for the latter to introduce
improvements on the property by constructing a commercial
complex, the spaces to be rented out to commercial
establishments. They agreed that for twenty-five (25) years,
Francis was to manage/administer the property and that they are
to share 50-50 of the monthly income therefrom. After only 5
years, Robert discovered that Francis was not complying with
the sharing scheme and instead was remitting only a measly
10% of the profits. Aggrieved, Robert files a petition for
rescission of the contract. In this case, the court should-
a. Order Francis to pay Robert the amount of deficiencies
for the period of 5 years to be determined after a
 thorough accounting of the income realized during the
said period to be supervised by the court.
b. Grant the petition for rescission for Robert obviously
suffered a lesion in the amount of more than % of the
income he was entitled to.
c. Deny the petition of Robert because an action to rescind
a rescissible contract is a subsidiary remedy that must be
availed of only after exhausting other possible available
legal remedies to the petitioner.
d. Grant the petition for rescission on the ground of the
fulfillment of a resolutory condition attached to the
agreement of Robert and Francis.
e. Deny the petition of Robert because the action should not
be for rescission but rather a petition to annul a voidable
contract. The agreement being voidable as Francis
committed fraud clearly in the performance of his
obligation to remit 50% of the monthly income.

24. The mistake or error in the object of the contract does not
necessarily result to a void agreement, except if the mistake or
error is-
a. In corpore
b. In the attributes or the character of the matter that the
object is made
c. None of the choices
d. In substantia
e. In quantitate

25. Violence or intimidation applied by a third party on persons

to acquire the consent of a party to a contract, results to a
voidable contract, except-
a. If applied on the grandfather of the contracting party
b. If applied on the minor sister of the contracting party
c. If applied on the contracting party directly
 d. If applied on the wife of the contracting party with whom
he is separated-in-fact
e. If applied on the grandchildren of the contracting party

26. As a rule, consignation must be preceded by tender of

payment to discharge the obligation. However, in the following
cases, consignation alone shall discharge the obligation, except-
a. None of the choices.
b. When the title of the obligation has been lost.
c. When the creditor is incapacitated to receive the payment
at the time it is due.
d. When the creditor is abroad or outside the country,
beyond the jurisdiction of any competent court in the
Philippines.
e. When, without cause, he refuses to give a receipt.

27. Victor, importer and distributor of imported cigarettes, was

contracted to deliver to David 100,000 packs of Marlboro brand
cigarettes. As per instructions of Victor, David paid directly to
the supplier in Texas, USA in the amount of US$300,000.
Unfortunately, however, before delivery could be made,
Philippine Congress passed a law, effective immediately, totally
prohibiting the importation of cigarettes, tobacco and other
similar products citing the hazardous effect on the person's
health. As a consequence, Victor was unable to deliver to David
the product. Hence, David sued Victor for return of the amount
paid. As judge-
a. You shall not grant David's prayer to order Victor to
reimburse because the obligation of Victor was rendered
impossible by a fortuitous event and hence extinguishing
his (Victor) obligation.
b. You shall order Victor to reimburse David because of
Victor's failure to fulfill the obligation incumbent upon
him as the obligation is to deliver a generic object and
 hence, cannot be considered to have been extinguished.
c. You shall order Victor to reimburse David applying the
principle of res perit domino.
d. You shall dismiss the case outright as David should not
have filed a case against Victor, but rather the American
supplier to whom David paid directly the US$300,000.
e. You shall not grant David's prayer for Victor to
reimburse the amount he paid directly to the American
supplier applying the principle of res perit creditori.

28. In order to avoid the possible attachment of his property

located in Batangas to pay for his judgment debt, X made it
appear that he sold the same to Y. In this case, the creditor of X
may-
a. Sue Y directly for damages as Y was in bad faith
knowing fully the intention of X in pretending to execute
the sale in his favor.
b. File a petition to have the sale of X to Y rescinded, the
contract being rescissible.
c. Ask the court to prevent the enforcement of the contract
of sale and hence deprive Y from having the title
transferred to him because the sale is unenforceable.
d. Petition for the declaration of nullity of the contract, the
same being clearly a void agreement.
e. File a petition to annul the contract of sale, it being
voidable.

29. The following contracts are valid, although defective,

except-
a. A sale entered into by Jose, a minor, as seller and Beth,
buyer, who is of majority age.
b. None of the choices.
c. The sale of a house and lot in the amount of P50M
agreed only orally by the seller and the buyer.
 d. A donation in the amount of P1M by Don Pedro to Pag-
asa Children's Foundation executed in writing by the
donor Don Pedro and duly notarized but without the
acceptance by the donee.
e. A loan acquired by a deaf-mute who does not know how
to write from a 16-year old high school student in the
amount of P20,000.

30. The following are considered to be an unlawful cause of a

contract and hence would avoid the valid existence of the same
or render it void ab initio, except-
a. The termination of marital relations agreed upon in
writing but husband and wife attested to and concurred
with by their common children.
b. Where a man donated land to a woman with the motive
of getting her to agree to have sexual relations with him.
c. An agreement to stifle the criminal complaint against a
person for estafa pending with the prosecutor's office for
pecuniary or other valuable consideration.
d. None of the choices.
e. Where the owner of a company transferred his shares to a
government crony with the motive of obtaining a
government contract.

31. The rule of 'in pari delicto' applied to parties to a void

agreement does not apply to-
a. A client who files a disbarment case against a lawyer
who entrusted to the latter bribe money for a judge but
was not given and instead appropriated it for himself (the
lawyer).
b. A case where a squatter (informal settler) who had been
ousted from the property he occupied illegally by another
squatter may file an ejectment suit against the latter.
c. All of the choices.
 d. Absolutely simulated contracts.
e. An agreement that establishes an impossible object for
the contract.

32. The contract is valid and enforceable. The Statute of Frauds

is not deemed violated.
a. If land is donated orally.
b. Oral donation propter nuptias of land with no delivery
yet.
c. The contract is oral and still completely executory.
d. The contract is oral but already executed partially.

33. Consignation shall be made by depositing the things due at

the disposal of judicial authority before whom the tender of
payment shall be proved, in a proper case, and the
announcement of the consignation in other cases.
The consignation having been made, the ________ shall also be
notified thereof.
a. Necessary parties
b. Interested parties
c. Indispensable parties
d. Proper parties

34. Dacio en pago as distinguished from sales.

a. There is less freedom in determining the price.
b. There is no pre-existing credit.
c. Gives rise to obligation.
d. The cause or consideration here is the price from the
viewpoint of the seller; or the obtaining of the object,
from the viewpoint of the buyer.

35. Dation in payment as distinguished from cession.

a. The creditors do not become owners of the thing
conveyed.
 b. There must be two or more creditors.
c. All the debtor's properties are conveyed.
d. Debtor may be solvent or insolvent.

37. Which of the following is a characteristic of expromision but

not of delegacion?
a. The third person who makes the payment to the creditor
is always entitled to subrogation.
b. It is initiated by the debtor himself.
c. It is made with or without the consent of the debtor.
d. In case of insolvency of the new debtor, the creditor may
still recover from the original debtor under certain
circumstances.

38. Bo Cruz, a 17-year old construction worker from España,

Manila suffered a deep cut on his eyebrow when he was fouled
hard during a street basketball game watched by NBA scout
Stanley Sugerman of the Philadelphia 76ers. He requested one
of his teammates to call Dr. J (not the basketball legend but a
real doctor) whose clinic was just a stone's throw from the
basketball court. Later, Dr. J sent a bill to Bo Cruz amounting to
Php5,000.00 for the services he rendered. Although the charge
was a reasonable amount for the services, Bo Cruz refused to
pay the bill, claiming that, as a minor, he was not liable. Which
of the following is correct?
a. Bo Cruz is liable although he is a minor because the
contract involved a necessary which was beneficial to
him.
b. Bo Cruz is not liable because he is a minor and thus
incapable of giving consent to engage the services of Dr.
J.
c. The teammate is the one liable because it was he who
personally called and engaged the services of Dr. J.
d. Bo Cruz is liable only when he reaches the age of
 majority when he would be eligible to enter the NBA
draft.

39. After spending 33 years together, PBA Magnolia Chicken

Star Chef Curry's parents, Sonya and Dell, are ending their
marriage. By order of the court which decreed the legal
separation, Dell is obliged to give monthly support of
Php50,000.00 to Sonya payable in advance within the first five
days of the month. Sonya owes Dell Php50,000.00 by way of
loan. On the other hand, Dell has not yet given Sonya's support
of Php50,000.00 for the preceding month and another
Php50,000.00 for the present month. All the debts are already
due. Based on the foregoing facts, which of the following is
incorrect?
a. If Dell demands payment of the loan, Sonya may set up
compensation as regards her support for the preceding
month that Dell owes her.
b. If Dell demands payment of the loan, Sonya may set up
compensation as regards her support for the current
month that Dell owes her.
c. If Sonya demands her support for the preceding month,
Dell may set up compensation as regards the loan that
Sonya owes him.
d. If Sonya demands her support for the current month, Dell
may claim compensation as regards the loan that Sonya
owes him.

40. Jan-Jan and Tsikoy insured their house in Naval, Biliran

against fire with Charlie Insurance Company. The insurance
policy which was prepared and printed by Charlie Insurance
Company was signed by Jan-Jan and Tsikoy after reading its
terms. Which of the following characterize the contract between
Jan-Jan and Tsikoy, on one hand, and Charlie Insurance
Company, on the other?
1. Auto-contract
2. Contract of adhesion
3. Aleatory contract
4. Nominate contract

The contract is:

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

II. True/False with One-Sentence Explanation (2 points

each)

41. There may be an instance where the creditor in a contractual

monetary obligation can demand the payment of a bigger
amount.

42. Capacity of the parties is not necessary for compensation to

take place.

43. For novation to extinguish or modify an obligation, capacity

of the parties is necessary.

44. Contracts are perfected by mere consent.

45. An express and oral condonation of an obligation is valid

and enforceable.

46. A real estate mortgage appearing in a private instrument is

void.
47. An innominate contract can be the proper subject of an
action for reformation.

48. Lack of authority may render a contract void.

49. A rescissible contract may be annulled.

50. When a contract is void, an action to declare its absolute

nullity or inexistence is not necessary.

III. Essay Questions (8 points each)

51. On January 1, 2019, Tito, Vic and Joey entered into a

contract of sale with Judy whereby they bound themselves to
deliver on December 31, 2020 to Judy a particular parcel of land
(that they inherited from their father, Digong) for the price of
Php3 Million, which was paid upon the execution of the
contract. In their written contract, it was expressly agreed upon
that if Tito, Vic and Joey incur in delay in the delivery of the
land, they will pay Judy a sum of Php100,000.00 per year until
the obligation is completely performed. On January 2, 2022,
Judy demanded from Tito the delivery of the land but Tito
refused to deliver. Despite repeated demands, Tito refused to
deliver the land. Today, Judy approached you and asked whether
she can file an action against Tito, Vic and Joey for the delivery
of the land plus Php300,000.00 and other consequential
damages. What would you tell her? Reasons.

52. Alex, a 15-year old boy and a bully, by means of violence

and intimidation, forced Johnny, a simpleton and working as a
janitor of the Philippine Drug Enforcement Agency (PDEA), to
steal 10 grams of shabu (methamphetamine hydrochloride) from
the PDEA's laboratory and sell to him the same for
Php40,000.00. Both were caught in the act by the PDEA agents.
Johnny was convicted of the crime of selling shabu and was
sentenced accordingly to the law. Alex was taken to the custody
of the DSWD and put in a rehabilitation facility. After 10 days,
Alex died leaving his mother, Epifania, as his sole compulsory
heir. She sought your legal opinion as to whether she can
recover the amount paid by Alex for the illegal drugs. What
would you tell her? Reasons.

53. To secure an agricultural loan of Php10M, Loreto's Farm in

Camarines Norte mortgaged a parcel of land to the Development
Bank of the Philippines. Unfortunately, the plantation for which
the loan was obtained was attacked by mosaic diseases by
reason of which Loreto's Farm was unable to pay the yearly
amortization. The mortgage was foreclosed. The court rendered
a deficiency judgment against Loreto's Farm. Can Loreto's Farm
invoke fortuitous event as basis to annul the foreclosure and as
argument against the rendition of deficiency judgment? Answer
with reasons.