Exercises on Law on Obligation (12142018)

1. D owes C the following debts: P4,000 due on February 1, P7,000 due on February 5,
P5,000 due February 10, and P4,000 due on February 20. By agreement 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 P4,000 to C as payment today, to which debt may D apply the
payment?
a. To the debt due on February 1 amounting to P4,000 only
b. To the debt due on February 20 amounting to P4,000 only
c. To the debt due on February 1 or February 20, at his option
d. To all the debts proportionately at P800, P1,400, P1,000 and P800, respectively
Art. 1252. He who has various debts of the same kind in favor of one and the same creditor, may
declare at the time of making the payment, to which of them the same must be applied. Unless the
parties so stipulate, or when the application of payment is made by the party for whose benefit the
term has been constituted, application shall not be made as to debts which are not yet due.
2. Refer to the preceding number. 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?
a. The debt due on February 1 amounting to P4,000 only
b. The debt due on February 20 amounting to P4,000 only
c. To the debts due on February 1, February 5 and February 10 proportionately at
P1,000, P1,750 and P1,250, respectively
d. To all the debts proportionately at P800, P1,400, P1,000 and P800, respectively
Art. 1254. When the payment cannot be applied in accordance with the preceding rules, or if
application cannot be inferred from other circumstances, the debt which is most onerous to the
debtor, among those due, shall be deemed to have been satisfied.
If the debts due are of the same nature and burden, the payment shall be applied to all of them
proportionately.
3. The young and other products of animals, produced with the intervention of human labor
are considered as:
a. Civil fruits (the result of a juridical relation)
b. Industrial fruits (produced by land of any kind through cultivation or labor)
c. Natural fruits
d. Accessions
4. A stipulation that demand shall not be required in order to make the debtor in delay is
generally to the disadvantage of the:
a. Debtor
b. Creditor
c. Both the debtor and the creditor
d. Neither the debtor nor the creditor
5. The absence of stipulation on liability in case of fortuitous event is generally to the
advantage of the:
a. Debtor
b. Creditor
c. Both the debtor and the creditor
d. Neither the debtor nor the creditor
6. The following obligations are immediately demandable, except:
a. Pure obligation

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 b. Obligation with a period with a resolutory effect
c. Obligation with a negative impossible condition
d. Obligation with a condition antecedent (Suspensive effect)
Art. 1183. Impossible conditions, those contrary to good customs or public policy and those
prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible,
that part thereof which is not affected by the impossible or unlawful condition shall be valid.
(Positive)
The condition not to do an impossible thing shall be considered as not having been agreed upon.
(Negative)
7. When a third person pays the creditor without intending to be reimbursed and the
debtor did not give his consent to the donation:
a. The payment is valid as to the creditor who accepted it
b. The debtor is under no obligation to reimburse the third person
c. The payment is not valid because no one can pay the debt of another
d. The creditor is obliged to return the payment to the third person
8. D owes C P30,000 due on April 1, 2018. C owes D P30,000 due on March 15, 2018. What
kind of compensation may possibly take place today if today is February 14, 2018?
a. Voluntary
b. Legal
c. Facultative
d. Judicial
9. The waiver of an action for fraud is valid in the case of:
a. Future fraud
b. Past fraud
c. Both a and b
d. Neither a nor b
10. D is indebted to C for P100,000 which is already due. D offers to give a certified check to C
to settle the debt.
a. If C refuses to accept the check, D may resort to its consignation to settle the
obligation
b. If C refuses to accept the check, D may replace the check with 100,000 pieces of
P1.00 coin and compel C to accept it
c. If C refuses to accept the check, D may replace the check with 5,000 pieces of
P20.00 bill, and if C refuses to accept it, D may consign the payment
d. If C accepts the certified check, D’s obligation is automatically extinguished
11. D borrowed P10,000 from C. On due date, C was already insane. Nonetheless, D gave C
P10,000 to settle the debt. When C’s guardian learned of the payment made by D, C was
found to have only P3,000 left in his wallet and that he had lost P1,500 in a gambling
game, and used P5,500 to buy his food. In this case:
a. Payment is valid only up to P3,000
b. Payment is valid only up to P8,500
c. Payment is valid up to P10,000
d. The total payment is not valid because C was incapacitated at the time he received
the payment
12. Consignation, without any tender of payment, will release the debtor from liability in the
following case, except when:
a. The creditor is absent or unknown, or does not appear at the place of payment

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 b. The creditor is capacitated to receive the payment
c. Without just cause, the creditor refuses to give a receipt
d. Two or more persons claim the same right to collect
13. D owes C P20,000 payable on or before March 31, 2018. C is obliged to pay D P20,000 on
March 15, 2018. As a result, which of the following is incorrect?
a. C may claim compensation on March 15, 2018
b. D may claim compensation on March 15, 2018.
c. C may claim compensation on March 31, 2018 if his debt to C, and D’s debt to him,
remained unpaid as of such date
d. D may claim compensation on March 31, 2018 if C’s debt to him, and his own debt
to C, remained unpaid as of such date
C cannot claim compensation on March 15 since D has the benefit of the period.
14. D obtained a loan of P1,000,000 from C. The debt, which is due on December 31, 2017, is
secured by chattel mortgage of D’s brand new Toyota Innova van. On June 1, 2017, the
van was swept away by flood waters at the height of Typhoon Ondong and could no
longer be found.
a. D’s obligation to give P1,000,000 is extinguished because the security thereof was
lost due to fortuitous event
b. D’s obligation P1,000,000 became demandable on June 1, 2017, unless he gives
another security
c. D’s obligation to give P1,000,000 and the chattel mortgage are extinguished by
reason of fortuitous event
d. D’s obligation to give P1,000,000 subsists, but C cannot demand its payment before
December 31, 2017
Art. 1198. The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debt;
(2) When he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or securities after their establishment,
and when through a fortuitous event they disappear, unless he immediately gives new ones equally
satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond.
15. On January 1, 2017, D borrowed P500,000 from C with interest at 10% per annum. The
loan obligation and the interest are due on December 31, 2017.
a. D may compel C to accept payment before December 31, 2017
b. C may compel D to make payment before December 31, 2017
c. Both a and b are correct
d. Both a and b are incorrect
Both debtor & the creditor benefits the period. Neither the creditor be compelled to receive payment
nor the debtor make payment before the due date. (Art 1196)
16. Refer to the facts in the preceding number. Assuming that on due date, D has only
P500,000 and he offers this amount to C who is willing to accept it as partial payment.
a. The payment shall be applied in its entirety to the principal. D still owes C the
interest of P50,000.

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 b. The payment shall be applied first to the interest of P50,000. The balance of
P450,000 shall be applied to the principal; hence, D still owes C P50,000 for the
principal which will continue to bear interest.
c. The payment of P500,000 shall be applied proportionately to the principal and
interest.
d. The entire obligation (principal and interest) is extinguished because C accepted the
payment without any protest or objection.
Art. 1253. If the debt produces interest, payment of the principal shall not be deemed to have been
made until the interests have been covered.
17. A, B and C are indebted to W, X, Y and Z in the amount of P24,000. In this case:
a. W can collect P8,000 each from A, B and C. Then, he must give P6,000 each to X, Y
and Z.
b. W can collect P2,000 each from A, B and C. Then, he need not give any amount to
X, Y and Z.
c. W can collect P6,000 from either A, B or C. Then, he need not give any amount to X,
Y and Z, from the amount he collected.
d. W can collect P24,000 from either A, B or C. Then, he must give P6,000 each to X, Y
and Z.
24,000 ÷ 3 debtors ÷ 4 creditors = 2,000 minimum share for each debtor against each creditor (v.v.)
18. A, B and C are liable individually and collectively to X in the amount of P30,000. On due
date, X demanded payment from A. However, C is insolvent. In this case:
a. X may collect P20,000 only from either A or B.
b. X may collect P30,000 from either A or B.
c. X may collect from A P15,000 only, and from B, P15,000 only.
d. X may collect from A P10,000 only and from B, P10,000 only.
Other terms for solidary obligation:
Jointly and severally; Individually and collectively; In solidum; Mancomunada solidaria; Juntos o
separadamente;
19. M obtained a loan of P50,000 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
a. Both the loan and the guaranty
b. Only the loan
c. Only the guaranty
d. Neither the loan nor the guaranty with G now as the new creditor
20. M makes an interest bearing promissory note amounting to P100,000 payable to the
order of P. The back of the promissory note 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 you will do is:
a. Pay to H because as holder and indorsee, he acquired title to the note.
b. Pay to R because as the agent of C, he is an extension of the personality of C.
c. Go to court and deposit the payment by way of consignation.
d. Just ignore the two. It is not your fault that they have conflicting claims.

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 21. D owes C the following debts: P3,000 due on July 1, P5,000 due on July 6, P2,000 due to
July 15, and P2,000 due on July 25. If today is July 22, and D gives P2,000 to C but neither
he nor C indicates the debt to which the payment shall apply, the payment shall be
applied to:
a. The debt due on July 15 or July 25 because the payment is of the same amount as
the said debts.
b. To any of the debts due on July 1 or July 6 in partial payment or to the debt due on
July 15 in full payment, since the said debts have already become due as of the time
the payment is made.
c. To the debts due on July 1, July 6 and July 15 proportionately at P600, P1,000 and
P400, respectively.
d. To all the debts proportionately in the ratio of 3:5:2:2.
Art. 1252. He who has various debts of the same kind in favor of one and the same creditor, may
declare at the time of making the payment, to which of them the same must be applied. Unless the
parties so stipulate, or when the application of payment is made by the party for whose benefit the
term has been constituted, application shall not be made as to debts which are not yet due.
If the debtor accepts from the creditor a receipt in which an application of the payment is made, the
former cannot complain of the same, unless there is a cause for invalidating the contract.
Art. 1254. When the payment cannot be applied in accordance with the preceding rules, or if
application can not be inferred from other circumstances, the debt which is most onerous to the
debtor, among those due, shall be deemed to have been satisfied.
If the debts due are of the same nature and burden, the payment shall be applied to all of them
proportionately.
1. Debtor has preferential right of choice, unless the parties stipulate or benefit of the period is
given to any of the party.
2. Creditor can apply, if the debtor did not exercise his right of choice, unless invalidated.
3. If no one exercises the right: (a) most onerous to the debtor (b) same nature, proportionately
22. D borrowed P50,000 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.
a. D’s obligation is extinguished by payment by cession.
b. D’s obligation is extinguished by consignation.
c. D’s obligation is extinguished by dacion en pago.
d. D’s obligation is not extinguished at all because the payment should have been in
cash.
23. 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 persons, be they guarantors or
possessors of mortgages.
a. Substitution
b. Subrogation
c. Transmission
d. Transformation
Subrogation – change in the person of the creditor
Substitution – change in the person of the debtor
24. The following statements are presented to you:
I. A stipulation that an obligation shall be paid in a currency other than Philippine legal
tender is void.
II. A cashier’s check is as good as cash; hence, it is legal tender.

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 In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only statement I is true.
d. Only statement II is true.
25. D owes C P20,000 with G as guarantor. C, on the other hand, owes D, P15,000. Both debts
are already due but D is insolvent. In this case
a. C may collect from G P20,000.
b. C may collect from G P5,000 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 P15,000 from G.
Art. 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal
creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor.
P-M/C-D2-R
Exception: (still facultative compensation can be claimed or availed)
Art. 1287. Compensation shall not be proper when one of the debts arises from a depositum or from
the obligations of a depositary or of a bailee in commodatum. (not the bailor)
Neither can compensation be set up against a creditor who has a claim for support due by
gratuitous title, without prejudice to the provisions of paragraph 2 of Article 301.
Art. 1288. Neither shall there be compensation if one of the debts consists in civil liability arising
from a penal offense. (BSP)
26. Orlando brought his typewriter at the shop of Remegio for repair. Orlando made several
demands for the repair work to be done but Remegio did not undertake the repairs.
Eventually, Remegio returned the typewriter, unrepaired and with several parts missing.
I. Orlando can have the typewriter repaired by another repair shop with the repair cost
thereof chargeable to Remegio.
II. Orlando can compel Remegio to undertake the repairs.
III. Orlando can ask for damages for the missing parts of the typewriter at the expense of
Remegio.
Which of the above remedies may be availed by Orlando?
a. I and II
b. II and III
c. I and III
d. All of I, II and III
Real – Determinate = compel + damages; Generic = complied with at the expense of the debtor + damages
Positive Personal – Breach = executed @ the expense of the debtor; Poorly done = undone at the expense of
the debtor
Negative Personal – Doing what has been forbidden = undone at the expense of the debtor

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 27. A, B and C are jointly liable to X in the amount of P12,000. On due date, X demanded
payment from A but A refused to pay. How much may X collect from B?
a. P12,000 plus damages for delay
b. P8,000 plus damages for delay
c. P4,000 plus damages for delay
d. P4,000 without any damages
A is in delay but not B.
Art. 1208. If from the law, or the nature or the wording of the obligations to which the preceding
article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as
many shares as there are creditors or debtors, the credits or debts being considered distinct from
one another, subject to the Rules of Court governing the multiplicity of suits.
28. Refer to preceding number. Assume the same facts except that A, B and C are solidarily
liable to X in the amount of P12,000. On due date, X demanded payment from A but A
refused to pay. How much may X collect from B?
a. P12,000 plus damages for delay
b. P8,000 plus damages for delay
c. P4,000 plus damages for delay
d. P4,000 without any damages
A, B and C is considered as one (solid). Delay of one is delay of the other.
29. D is obliged to pay C P10,000 on or before June 30. C is obliged to pay D P10,000 on June
15. Who may claim compensation on June 15?
a. D only
b. C only
c. Either D or C
d. Neither D nor C
C cannot claim compensation because D has the benefit of the period (on or before 6/30). D has the
choice to pay before 6/30 but C cannot compel D to pay before 6/30.
30. D is obliged to pay C P10,000 on or before June 15. C is obliged to pay D P10,000 on June
30. Who may claim compensation on June 15?
a. D only
b. C only
c. Either D or C
d. Neither D nor C
D cannot claim compensation from C on 6/15 since debt will be due only on 6/30, while C cannot
compel D because C debt to D is still not due and demandable (see Item #25 P-M/C-D2-R)
31. A, 17 years old, B, 25 and C, 30, jointly borrowed P6,000 from X. How much may X collect
from B?
a. P6,000
b. P4,000
c. P2,000
d. Nothing, because A was a minor at the time the obligation was constituted
32. Refer to Number 32. Assume the same facts except that the debtors are bound solidarily.
How much may X collect from B?
a. P6,000
b. P4,000
c. P2,000
d. Nothing, because A was a minor at the time the obligation was constituted

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 33. D owes C P20,000 due on June 20. C owes D P14,000 due on June 15. On June 12, C
assigned his right to X. D consented to such assignment without any reservation of his
right to the compensation. On June 20, X may collect from D:
a. P20,000
b. P6,000
c. P14,000
d. Nothing
Art. 1285. The debtor who has consented to the assignment of rights made by a creditor in favor of a
third person, cannot set up against the assignee the compensation which would pertain to him
against the assignor, unless the assignor was notified by the debtor at the time he gave his consent,
that he reserved his right to the compensation.
If the creditor communicated the cession to him but the debtor did not consent thereto, the latter
may set up the compensation of debts previous to the cession, but not of subsequent ones.
If the assignment is made without the knowledge of the debtor, he may set up the compensation of
all credits prior to the same and also later ones until he had knowledge of the assignment.
Debtor consented to assignment= cannot claim compensation; unless reserved his right
Debtor did not consent to assignment = compensation can be claimed to all credits prior to
assignment but not to the subsequent ones.
Debtor without knowledge of assignment = compensation can be claimed to all credits prior to his
knowledge of the assignment but not to the subsequent ones.
34. D owes C P30,000 due on June 20. C owes D the following debts: P15,000 due on June 2;
P4,000 due on June 14; P6,000 due on June 16; and P3,000 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
a. P30,000
b. P5,000
c. P2,000
d. Nothing
In case D is not notified and he only learned of the assignment on June 20, the amount that can be
collected from D is only P2,000.
35. A, B and C are solidary debtors of X in the amount of P30,000. C was insane at the time
the obligation was constituted.
a. X may possibly collect from A the amount of P30,000.
b. X may possibly collect from A the amount of P20,000.
c. X may possibly collect from A the amount of P10,000.
d. X may not be able to collect anything from A since the insanity of Cc at the time the
obligation was constituted rendered the whole obligation voidable.

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