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A and B owe X and Y P10,000.00. The share of A in the debt is 60%, while that of B is 40%.
The share of X in the credit is 70%, while that of Y is 30%
Item 131 to 134 are based on the assumption that the obligation is joint on both sides.
131. X may collect from A:
a. P10,000.00
b. P7,000.00
c. P6,000.00
d. 4,200.00
132. X may collect from B:
a. P10,000.00
b. P7,000.00
c. P4,000.00
d. P2,800.00
133. Y may collect from A:
a. P10,000.00
b. P3,000.00
c. P6,000.00
d. P1,800.00
134. Y may collect from B:
a. P10,000.00
b. P3,000.00
c. P4,000.00
d. P1,200.00
135. X may collect from A:
a. P10,000.00
b. P7,000.00
c. P6,000.00
d. P4,200.00
136. X may collect from B:
a. P10,000.00
b. P7,000.00
c. P4,000.00
d. P2,800.00
137. Y may collect from A:
a. P10,000.00
b. P3,000.00
c. P6,000.00
d. P1,800.00
138. Y may collect from B:
a. P10,000.00
b. P3,000.00
c. P4,000.00
d. P1,200.00
Items 139 to 142 are based on the assumption that the debtors are solidary debtors and the creditors are joint
creditors.
139. X may collect from A:
a. P10,000.00
b. P7,000.00
c. P6,000.00
d. P4,200.00
140. X may collect from B:
a. P10,000.00
b. P7,000.00
c. P4,000.00
d. P2,800.00
141. Y may collect from A:
a. P10,000.00
b. P3,000.00
c. P6,000.00
d. P1,800.00
142. Y may collect from B:
a. P10,000.00
b. P3,000.00
c. P4,000.00
d. P1,200.00
143. X may collect from A:
a. P10,000.00
b. P7,000.00
c. P6,000.00
d. P4,200.00
144. X may collect from B:
a. P10,000.00
b. P7,000.00
c. P4,000.00
d. P2,800.00
145. Y may collect from A:
a. P10,000.00
b. P3,000.00
c. P6,000.00
d. P1,800.00
146. Y may collect from B:
a. P10,000.00
b. P3,000.00
c. P4,000.00
d. P1,200.00
147. When is there solidary liability?
a. When the obligation expressly states that the liability shall be solidary.
b. When the law requires solidarity.
c. When the nature of the obligation requires solidarity.
d. All of the above.
148. In which of the following cases does the law provide for solidary liability?
a. The liability of two or more persons who have appointed an agent for a common transaction or
undertaking.
b. The liability of two or more payees when they received payment which was not yet due.
c. The liability of two or more persons for a quasi-delict.
d. All of the above.
149. A, B and C are jointly indebted to X in the amount of P30,000.00. Before due date, A becomes insolvent.
On due date, X can collect:
a. P15,000.00 from B, and P15,000.00 from C.
b. P10,000.00 from B, and P10,000.00 from C.
c. P20,000.00 from B, and P20,000.00 from C.
d. P30,000.00 from B, and P30,000.00 from C.
150. A, B and C are jointly indebted to X in the amount of P12,000.00. C was a minor at the time the obligation
was constituted. X may collect:
a. P6,000.00 from A, and P6,000.00 from B.
b. P12,000.00 from A, or P12,000.00 from B.
c. P4,000.00 from A, and P4,000.00 from B.
d. P8,000.00 from A, or P8,000.00 from B.
151. The following rules are applicable to a joint indivisible obligation, except:
a. The creditors must take a demand against all the debtors for the demand to be effective.
b. A renunciation by a joint creditor of his share in the obligation extinguishes the whole obligation.
c. If one of the debtors is insolvent, the others shall not be liable for his share.
d. A joint debtor who is not ready to comply with his part of the obligation shall be liable for his share of
the debt and the entire amount of damages as a result of the non-compliance.
152. The following statements are presented to you:
I. The indivisibility of an obligation necessarily gives rise to solidarity.
II. Solidarity necessarily implies indivisibility.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Statements I is true; Statements II is false.
d. Statements I is false; Statements II is true.
153. A, B and C are solidary debtors of X in the amount of P9,000.00. The share of A is payable today; the
share of B is payable on Christmas day next year; and the share of C, when X passes the CPA Board
Examination two years from now. Today, X may collect from A:
a. P9,000.00
b. P6,000.00
c. P3,000.00
d. Nothing
154. Refer to the preceding number. Today, if X instead proceeds against B, X may collect from B.
a. P9,000.00
b. P6,000.00
c. P3,000.00
d. Nothing
155. A, B and C are solidary debtors of X in the amount of P6,000.00. X condones the share of A. A accepts the
condonation. Later, B pays X P4,000.00. When B demanded reimbursement from C, C could not pay
because he was already insolvent. In this case, B may collect from A:
a. Nothing because the share of A had already been extinguished by condonation.
b. P4,000.00
c. P2,000.00
d. P1,000.00
156. A, 25; B, 30; and C, 17, are solidary debtors of X in the amount of P30,000.00. X may collect from A:
a. P30,000.00
b. P20,000.00
c. P10,000.00
d. Nothing
157. Refer to the preceding number. X may collect from C:
a. Nothing.
b. P30,000.00
c. P20,000.00
d. P10,000.00
158. A, B and C are solidary debtors of X in the amount of P12,000.00. A pays X P12,000.00. When A
demanded reimbursement from B, B could not pay because he had become insolvent. In this case, A may
collect from C:
a. Nothing.
b. P8,000.00
c. P6,000.00
d. P4,000.00
159. These statements are presented to you:
I. A solidary creditor may assign his rights to a third person without the consent of the other creditors.
II. A solidary debtor, on the ground of equity, is entitled to reimbursement from his fellow debtors if he
paid the obligation after it has prescribed.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
160. A and B are solidary debtors of X in the amount of P20,000.00. The debt is due on March 31, 2008. On
March 15, 2008, A paid X P20,000.00. On April 15, 2008, B was ready to reimburse A. How much shall B
reimburse A?
a. P10,000.00 plus interest from March 15, 2008.
b. P10,000.00 plus interest from March 31, 2008.
c. P10,000.00 without any interest because A paid before due date.
d. Nothing, because A paid when the obligation was not yet due.
161. A, B and C are bound in solidum to deliver a specific horse to X. On due date, X demanded delivery of the
horse from A but A did not comply, Two days later, the horse was struck and killed by lightning. Based on
the foregoing, which of the following statements is incorrect?
a. The obligation of A, B and C is extinguished by reason of fortuitous event.
b. The obligation of the debtors is converted into a monetary obligation to pay the value of the horse
plus damages and interest.
c. X may demand payment from any of the debtors including B and C who were not at fault.
d. If B or C pays X, B or C can go after A to recover what he had paid to X.
162. A promissory note reads as follows:
“I promise to pay Patricia Perez or order the sum of P9,000.00.
(Sgd.) Mary Molina (Sgd.) Mina Montes (Sgd.) Maila Mora”
Note: Maila Mora is insolvent.
How much may Patricia Perez collect from Mary Molina?
a. P9,000.00
b. P6,000.00
c. P3,000.00
d. Nothing, because the note is void, since it says “I promise to pay” yet it is signed by three persons.
163. The following obligations are divisible, except:
a. When the obligation has for its object the execution of certain number of days of work.
b. When the obligation has for its object the accomplishment of work by metrical units.
c. Analogous things which by their nature are susceptible of partial performance.
d. Obligation to give definite things.
164. These obligations are presented to you:
I. Obligation to paint a house in 5 days.
II. Obligation to deliver a specific car.
III. Obligation to give a vocal solo rendition of the Philippine National Anthem.
IV. Obligation to construct a fence which is 10 meters long and 2 meters high.
Which of the foregoing obligations are divisible?
a. I and II
b. III and IV
c. I and IV
d. II and III
165. Refer to the obligation enumerated in the preceding number. Which of the said obligations are
indivisible?
a. I and II
b. III and IV
c. I and IV
d. II and III
166. As a rule, in an obligation with a penal clause, the penalty shall take the place of the following in case of
non-compliance.
a. Damages only
b. Interest only
c. Damages and interest
d. Neither damages nor interest
167. Aside from the penalty, damages and interest may be demanded in which of the following cases?
a. When there was a stipulation the aside from the penalty, damages and interests may also be
recovered.
b. When the debtor refuses to pay the stipulated penalty.
c. When the debtor is guilty of fraud in the performance of the obligation.
d. All of the above.
168. These statements concerning obligations with a penal clause are presented to you:
I. As a rule, the debtor may exempt himself from the performance of the principal obligation by just
paying the penalty.
II. As a rule, the creditor can demand the fulfillment of the principal obligation and the penalty at the
same time.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
169. These statements concerning obligations with a penal clause are presented to you:
I. Proof of actual damages suffered by the creditor is required in order that the penalty may be
demanded.
II. The penalty cannot be reduced by the court if there was partial performance because of the
stipulation the parties that the same must be paid in full in case of non compliance.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
170. D is obliged to paint the car of C in three days. The parties stipulated that in case D failed to paint the car
within the said period, D would give 5 grams of “shabu” as penalty for every day of delay.
Principal Obligation Penalty
a. Valid Valid
b. Void Void
c. Void Valid
d. Valid Void
171. It means not only the delivery of money but also the performance of an obligation in any other manner.
a. Extinguishment
b. Enforcement
c. Payment or performance
d. Alienation of property
172. Although it is not complete, the payment shall extinguish the obligation:
I. If the obligation has been substantially performed is good faith.
II. If the creditor accepts the performance despite knowing its incompleteness or irregularity and
without expressing any protest or objection.
The statements is true with respect to:
a. I only
b. II only
c. Both I and II
d. Neither I nor II
173. D obtained a loan of P100,000.00 from C. The debt which is payable in 10 equal monthly installments is
secured by a real mortgage on D’s lot. D paid the first installment of P10,000.00 on due date. T, a third
person, paid C P100,000.00 without the knowledge of D and believing that the amount owed by D was still
P100,000.00
a. T can recover P100,000.00 from D. If D cannot pay, T can foreclose the mortgage.
b. T can recover P90,000.00 from D. if D cannot pay, T can foreclose the mortgage.
c. T cannot recover any amount from D. Neither can be foreclose the mortgage because he paid C
without the knowledge of D.
d. T can recover P90,000.00 from D. If D cannot pay, T cannot foreclose the mortgage.
174. D is indebted to C in the amount of P200,000.00. The debt is secured by a chattel mortgage of D’s car and
the guaranty of G who signed together with D a promissory note for the debt. G pays C P200,000.00 with
the knowledge of D.
a. G can collect P100,000.00 from D. If D cannot pay, G can foreclose the chattel mortgage.
b. G cannot collect from D. Neither can he foreclose the chattel mortgage because he paid C without the
knowledge of D.
c. G can collect from D. if D cannot pay, G cannot foreclose the chattel mortgage.
d. G’s guaranty is not extinguished because he paid C without the knowledge of D.
175. It transfers to the person who assumes the credit right with all the rights thereto appertaining, either
against the debtor the debtor or against third persons, be they guarantors or possessors of mortgages.
a. Substitution b. Subrogation c. Assignment d. Negotiation
176. D owned C P4,000.00. T informed D that be would pay the debt to C and that D need not reimburse him.
However, D did not consent to the payment and the non-reimbursement. Nonetheless, C accepted the
payment from T.
a. The payment made by T to C is deemed a donation to D.
b. T cannot recover anything from D.
c. The payment is valid with respect to C.
d. D’s consent is required for the validity of the payment.
177. Which of the following is required in order that he payment made by the debtor will be considered valid?
a. Free disposal of the thing due.
b. Capacity to alienate the thing due.
c. Both (a) and (b)
d. Neither (a) nor (b)
178. Aside from the person in whose favor the obligation has been constituted, to whom shall payment be
made?
a. To the creditor’s heirs, if the creditor had died.
b. To the creditor’s assignees, if the credit has been assigned.
c. To any third person authorized to receive payment/
d. To all the foregoing, whichever is applicable under the circumstances.
179. D borrowed P20,000.00 from C. The debt, which bears interest at 10% per annum, is due after one year.
On due date, D paid C P20,000.00 representing the principal, but by that time C had already become
insane. Later, G, the guardian of C, demanded payment from D but D presented a receipt issued by C
acknowledging the payment. Upon investigation, G discovered that P8,000.00 was still in C’s possession;
P9,000.00 was spent by C for groceries as evidenced by the receipt of Esem Supermarket; and P3,000.00
was admitted by C to have been lost by him in a gambling game. G may demand payment from D in the
amount of:
a. P2,000.00, representing the interest.
b. P5,000.00, representing the interest and the gambling loss.
c. P14,000.00, representing the interest, the gambling loss, and the cost of groceries.
d. P22,000.00, the total debt because payment to an incapacitated creditor is not valid.
180. In the preceding number, D, instead of making payment to C who was insane, should have availed himself
of which remedy to protect himself?
a. Consignation
b. Consignment
c. Assignment
d. Cession
181. Payment to a third person is valid in the following cases, except:
a. When the third person is authorized to receive payment.
b. When the payment to the third person has redounded to the benefit of the creditor although the
third person is not authorized to receive payment.
c. If by the creditor’s conduct, the debtor has been led to believe that the third person was authorized
to receipt payment.
d. If the payment is made in good faith to a third person in possession of the credit instrument although
he may not be in possession of the credit itself.
182. D owed C Electric Company P3,000.00 representing the power bill of D for May. C Electric Company gave
a collector’s uniform to T although T was not its employee. T, without authority from C Electric Company,
wore the uniform, got the company receipt, and collected the amount owed by D. D made the payment to
T believing that the latter was an employee of C Electric Company. The payment made by D to T is:
a. Valid if T remits the payment to C Electric Company.
b. Valid even if T does not remit the payment to C Electric Company.
c. Not valid because T is not an employee of C Electric Company.
d. Not valid because T was not authorized to receive the payment.
183. D1 owes D2 P20,000.00. C files a complaint for collection against D2 allegedly for a sum of money that D2
owed him, and asks the court to issue the order to D1 not to make any payment to D2. The court issues
the order. D1, however, pays D2 in violation of the court order.
I. If the court renders judgment in favor of C, D1 can be required to pay again, this time, to C.
II. If the court renders judgment that C is not a creditor of D2, the payment made by D1 to D2, is
considered validated.
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
184. In an obligation to give, the debtor may compel the creditor to accept a different one provided it:
a. Is more valuable than that which is due.
b. Is of the same value as that which is due.
c. Has the same function as that which is due.
d. No, the debtor cannot compel the creditor to accept a thing that is different from that which is due.
185. Which of the following statements is/are true if the obligation is to give an indeterminate thing whose
quality and circumstances have not been stated?
I. The creditor can demand a thing of superior quality.
II. The debtor can deliver a thing of inferior quality.
a. Both are true
b. Only I is true
c. Only II is true
d. Neither I nor II is true.
186. These statements are presented to you:
I. The creditor cannot be compelled to receive partial payments.
II. The debtor may be compelled to make partial payments.
III. The creditor may demand, and the debtor make effect, the payment of the liquidated part of a debt
without them waiting for the liquidation of the unliquidated part.
In your evaluation of the foregoing statements:
a. I and II and true.
b. II and III are true
c. I and III are true
d. All statements are true.
187. It refers to the money or currency which a debtor may compel a creditor to accept in payment of his debt,
whether public or private.
a. Bill and coins
b. Legal tender
c. Certified check
d. Bill of exchange
188. One-sentimo, 5-sentimo, 10-sentimo, and 25-sentimo coins are legal tender up to:
a. P20.00
b. P50.00
c. P100.00
d. P500.00
189. One-Piso, 5-Piso and 10-Piso coins are legal tender up to:
a. P50.00
b. P100.00
c. P500.00
d. P1,000.00
190. All bills are legal tender up to:
a. P5,000.00
b. P10,000.00
c. P100,000.00
d. Any amount
191. These statements are presented to you:
I. Monetary obligations, as a rule, shall be settled in the currency which is legal tender in the Philippines.
II. The parties are prohibited by law from stipulating that the obligation or transaction shall be settled in
any order currency at the time of payment.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
192. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents
shall produce the effect of payment when they:
a. Have been cashed
b. Are delivered
c. Are deposited in the bank
d. Have been impaired without the fault of the creditor
193. It refers to the sharp sudden increase in money or credit or both without a corresponding increase in
business transactions.
a. Inflation
b. Deflation
c. Buyer’s market
d. Seller’s market
194. D obtained a loan of P500,000.00 from C. The loan is payable at the end of 10 years. Before the maturity
of the loan, an extraordinary inflation supervened causing the value of P500,000.00 to fall to P100,000.00
on the date of maturity. At maturity, D will have to pay C:
a. P100,000.00
b. P500,000.00
c. P2,500,000.00
d. Some other amount
195. D obtained a loan of P200,000.00 from C. The loan is payable at the end of 5 years. Before the maturity of
the loan, an extraordinary deflation supervened causing the value of P200,000.00 to rise to P500,000.00
on the date of maturity. At maturity, D will have to pay C:
a. P200,000.00
b. P500,000.00
c. P80,000.00
d. Some other amount
196. Under the provisions on Obligations, dation in payment and the following are special forms of payment,
except:
a. Application of payment
b. Tender of payment and consignation
c. Payment by cession
d. Payment in escrow
197. Property is alienated to the creditor in payment of monetary debt. This is:
a. Payment by cession
b. Dation in payment
c. Application of payment
d. Tender of payment and consignation.
198. Dacion en pago is governed by the law of sales. However, dacion en pago is different from sale in that in
dacion en pago:
a. There is no pre-existing credit.
b. Obligation are created.
c. There is more freedom in fixing the price.
d. An act of novation takes place.
199. If refers to the designation of the debt to which a payment shall apply.
a. Tender of payment
b. Consignation
c. Application of payment
d. Assignment
200. D owed C the following debts: P12,000.00 due on May 1; P12,000.00 due on May 5; P12,000.00 due on
May 15 (secured by a pledge of D’s ring); and P12,000.00 due on May 25. On May 22, D wanted to tender
payment to C but he had only P12,000.00. As of such date, none of the debts had been paid. In this case,
D may apply the payment to:
a. Any of the four debts since each one is the same amount of the payment.
b. All debts proportionately at P3,000.00 each.
c. Only to the debt due on May 15 since it is the most onerous debt to D.
d. To any of the debts on May 1, May 5, and May 15, since they have all become due as of May 22.
201. Assume that in the preceding number. D did not apply the payment. Neither did C who just issued to D a
receipt acknowledging the payment of P12,000.00. In this case, payment shall be applied by operation of
law to:
a. All the debts proportionately at P3,000.00 each.
b. The debts due on May 1, May 5 and May 15, all of which have become due as of May 22,
proportionately at P4,000.00 each.
c. The debt due on May 15 since it is the most onerous to D.
d. The debt due on May 1 following the first-due, first-pay” basis.
202. D owed C the following debts: P6,000.00 due on March 1, P12,000.00 due on March 8; a cell phone worth
P6,000.00 due on March 15; and P6,000.00 due on March 30. By agreement of the parties, the period was
established for the benefit of D. On March 22, D wanted to make payment but he had only P6,000.00. D
may apply the payment to:
a. The debt due on March 1 or March 15 since both have become due as of March 22, and each has the
same amount as the payment.
b. The debt due on March 1 or March 30 since both are monetary debts and each has the same amount
as the payment.
c. The debt due on March 8 in partial payment of the debt.
d. The debt due on March 1, March 6 or March 30, since each has the same amount as the payment.
203. Refer to the preceding number. If D does not apply the payment, C may apply the payment to the debt
due on:
a. March 1 or March 15
b. March 1 or March 30
c. March 1, March 15 or March 30
d. March 1 in full payment, or the debt due on March 8 in partial payment.
204. Refer to the two preceding numbers. If neither D nor C applied the payment, payment shall be applied by
operation of law to:
a. The debts due on March 1 and March 8 proportionately at P2,000.00 (6/18) and P4,000.00 (12/18).
b. The debts due on March 1 and March 30 proportionately at P3,000.00 each.
c. The debts on March 1, March 8 and March 15 proportionately at P1,500.00 (6/24), P3,000.00 (12/24),
and P1,500.00 (6/24).
d. All debts proportionately at P1,200.00 (6/30), P2,400.00 (12/30), P1,200.00 (6/30).
205. It refers to the assignment by the debtor of all his properties in favor of his creditors so that the latter may
sell them and recover their claims out of the proceeds.
a. Payment by cession
b. Dation in payment
c. Tender of payment
d. Payment in escrow
206. Which of the following is a common characteristics of dation in payment and payment by cession?
a. There should be two or more creditors
b. It affects all the debtor’s properties
c. The debtor must be insolvent
d. Obligations are extinguished either in full or in part.
207. The following are characteristics of payment by cession, except:
a. The creditors do not become the owners of the debtor’s properties which are assigned to them.
b. The obligations are extinguished only to the extent of the proceeds of the sale of the debtor’s
properties.
c. The debtor may or may not be insolvent.
d. All the debtor’s properties are involved except those exempt from execution.
208. The act of the debtor of offering his payment to the creditor is known as:
a. Tender of payment
b. Consignation
c. Consignment
d. Assignment
209. The act of placing the payment at the disposal of judicial authorities is known as:
a. Consignment
b. Assignment
c. Consignation
d. Tender
210. D owes C P50,000.00. On due date, D tendered payment in the form of certified check amounting of
P50,000.00. C refused to accept the check and demanded that he be paid in bills.
a. D may deposit the payment in court by way of consignation.
b. C’s refusal to accept the check is not justified because the check is certified by the bank to be covered
with sufficient funds.
c. C’s refusal to accept the check is justified because a check is not legal tender.
d. D’s tender of payment is valid.
211. D owes C P50,000.00. On due date, D tendered payment amounting to P50,000.00 consisting of
P50,000.00 pieces of P1.00 coins. C. refused to accept the payment and demanded that he be paid in bills.
a. D may deposit the payment in court by way of consignation.
b. C’s refusal to accept the payment is not justified because the payment being offered is actual money.
c. C’s refusal to accept the payment is justified because the payment being offered is not legal tender.
d. D’s tender of payment is valid.
212. D owes C P1,000,000.00. On due date, D tendered payment amounting to P1,000,000.00 in 50,000.00
pieces of P20.00 bills. C refused to accept the payment and demanded that he be paid in P1,000.00 bills.
Based on the foregoing information, which of the following statements is incorrect?
a. D’s tender of payment is valid.
b. C’s refusal to accept the payment is not justified since the amount being tendered is legal tender.
c. C’s refusal to accept the payment is justified on the ground that 50,000 pieces of P20.00 bills are too
bulky.
d. D may deposit the payment in court by way of consignation.
213. The expenses of consignation when properly made shall be shouldered by:
a. The debtor
b. The creditor
c. The debtor and creditor equally
d. All the persons interested in the obligation equally.
214. Consignation will extinguish an obligation:
I. Upon the declaration by the court that consignation has been properly made.
II. Upon acceptance by the creditor of the consignation.
The statement is true with respect to:
a. I only
b. II only
c. Both I and II
d. Neither I nor II
215. Withdrawal by the debtor of the payment consigned before the creditor has accepted the consignation or
before the court has declared that the consignation has been properly made produces the following
effects, except:
a. The obligation will remain in force.
b. The co-debtors, guarantors and sureties are not released.
c. The creditor does not lose preference over the thing.
d. The creditor shoulders the expenses of consignation.
216. Withdrawal by the debtor of the payment consigned before the creditor has accepted the consignation or
before the court has declared that the consignation has been properly made produces the following
effects, except:
a. The obligation is revived.
b. The creditor loses preference over the thing.
c. The guarantors and sureties are not released.
d. The obligation becomes joint if it was previously solidary.
217. Consignation may be made even without previous tender of payment is 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 is incapacitated but the debtor knows that the creditor has a legal representative
to receive payment.
c. When two or more persons claim the same right to collect.
d. When the creditor refuses to give a receipt without just cause.
218. D issued a promissory note payable to the order of C. The note amounted to P50,000.00 and bears
interest at 12% per annum. On the due date, X approached D and informed the latter that the note was
indorsed to him but that he had lost it. He now demanded payment from D by presenting an affidavit of
loss. D does not want to make any payment and now approaches you on which course of action he should
take. What course of action will you tell D to take?
a. Tender of payment
b. Consignation
c. Consignment
d. Assignment
219. These statements concerning loss are presented to you:
I. A thing may be considered lost although it still exists physically.
II. For loss to extinguish an obligation, it must occur after the constitution of the obligation.
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.
220. The loss of a determinate thing through a fortuitous event will not extinguish an obligation, except:
a. When the debtor has incurred in delay.
b. When the nature of the obligation requires the assumption of risks.
c. When the law provides that there shall be liability even in case of loss through a fortuitous event.
d. When the debt proceeds from a criminal offense and the creditor is in moraaccipiendi.
221. These statements are presented to you:
I. The loss of a particular thing while it is in the possession of the debtor shall be presumed to be due to
his fault.
II. If the obligation is to give an indeterminate thing, the loss or destruction of anything of the same kind
does not extinguish the obligation.
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.
222. D is obliged to deliver 20 sacks of rice to C. D intended to get 20 sacks of rice for delivery to C from his
stocks of 300 sacks of rice stored in his warehouse. Before due date, D’s warehouse was razed in a fire
together with all the rice store therein. The warehouse and the things stored therein are covered by
insurance.
a. D’s obligation to give 20 sacks of rice to C is extinguished.
b. D’s obligation to give 20 sacks of rice to C is not extinguished because he can get 20 sacks of rice from
other sources for delivery to C.
c. C’s recourse is to go after the insurance company for the value of 20 sacks of rice.
d. D and C will share equally in the amount of the loss which is equivalent to the value of 20 sacks of
rice.
223. The gratuitous abandonment by the creditor of his right to proceed against the debtor is known as:
a. Condonation
b. Confusion
c. Concession
d. Compensation
224.The condonation that must be in a public instrument together with the acceptance thereof in order that it
may be valid is one that involves:
a. I only
b. II only
c. III only
d. I, II and III
225. The condonation that is valid although it is in a private instrument together with the acceptance thereof is
one that involves:
a. I and II
b. II and III
c. I and III
d. None of the foregoing
226. The condonation that is valid although it is in a private instrument together with the acceptance thereof is
one that involves:
a. I only
b. II only
c. III only
d. None of the foregoing
227. These statements are presented to you:
I. Condonation is generally gratuitous.
II. The condonation is inofficious when it impairs the legitime.
a. Both statements are true.
b. Both statements are false.
c. Only Statements I is true.
d. Only Statements II is true.
228. The following presumptions on condenation are presented to you:
I. The debt is presumed remitted if the public document evidencing a credit is voluntarily delivered by
the creditor to the debtor.
II. The private document evidencing a credit is presumed to the debtor if is found in the possession of the
debtor.
III. The accessory obligation of pledge is presumed to have been remitted when the thing pledged, after
its delivery or of a third person who owns the thing.
a. Statements I and II are true.
b. Statements II and III are true.
c. Statements I and III are true.
d. All statements are true.
229.D is indebted to C for P20,000.00. The debt is evidenced by a promissory note signed by D as maker and G
as guarantor. On due date, C made a phone call to C and informed the latter that he was condoning the
debt. D expressed his gratitude to C.
a. Both the loan and the guaranty are extinguished.
b. Only the loan is extinguished.
c. Only the guaranty is extinguished.
d. Neither the loan nor the guaranty is extinguished.
230.The meeting in one person of the characters of debtor and creditor resulting in the extinguishment of the
debtor is known as:
a. Condonation
b. Confusion
c. Remission
d. Compensation
231.M is maker of a promissory note payable to the order of P, payee, G signed the note as guarantor of the
debt. P indorses the note to A, A to B, and B to C. On the date of maturity, C indorsed the note back to M.
The indorsement of the note to M extinguished:
a. Both the principal debt and the guaranty.
b. Only the principal debt
c. Only the guaranty
d. Neither the principal debt not the guaranty.
232.Refer to No. 231. If the note was instead indorsed by C to G on the date of maturity, such indorsement
extinguished.
a. Both the principal debt and the guaranty.
b. Only the principal debt.
c. Only the guaranty
d. Neither the principal debt nor the guaranty.
233.A, B and C are joint makers of a promissory note for P30,000.00 payable to the order of X. X indorsed the
note to Y, and Y to Z. On the date of maturity, Z indorsed the note to A. Such indorsement by Z to A
produced which of the following effects?
a. The total obligation of P30,000.00 is extinguished. A can go after B and C for reimbursement at
10,000.00 each.
b. Only P10,000.00 representing the share of A is extinguished. A, as the new creditor in his own right,
can go after B and C to collect P 10,000.00 each.
c. The total obligation of P30,000.00 is extinguished. A can go after B and C to collect P10,000.00 each
by virtue of his rights as the new creditor of the note.
d. No part of the note is extinguished because the indorsement made by Z was not in favor of all the
debtors.
234. A, B and C are solidary debtors of X for P9,000.00. The debt is evidenced by a note executed by all the
debtors and payable to the order of X. X indorsed the note to Y, and Y to Z. On the date of maturity, Z
indorsed the note to A. The indorsement to A produced which of the following effects?
a. The total obligation of P9,000.00 is extinguished. A can go after B and C for reimbursement at
P3,000.00 each.
b. Only P3,000.00 representing the share of A is extinguished. A, as the new creditor in his own right,
can go after B and C to collect P3,000.00 each.
c. The total obligation of P9,000.00 is extinguished. A can go after B and C to collect P3,000.00 each by
virtue of his rights as the new creditor of the note.
d. No part of the note is extinguished because the indorsement made by Z was not in favor of all the
debtors.
235. D borrowed P100,000.00 from C. D executed a promissory note payable to the order of C and mortgaged
his lot to secure the debt. Before the due date, D sold the lot to C. The sale of the lot to C:
a. Extinguished both the loan obligation and the mortgage.
b. Extinguished the loan obligation only.
c. Extinguished the mortgage only
d. Extinguished neither the loan obligation nor the mortgage.
236. When two persons in their own right are debtors and creditors of each other, the obligations of both are
extinguished. Such mode of extinguishment is known as:
a. Compensation
b. Concession
c. Condonation
d. Remission
237. Compensation is different from merger because in compensation:
a. There are two debtors and two creditors
b. There is one debtor and creditor
c. The debtor and creditor refer to the same person.
d. Payment is impossible.
238. Donna, a student of ABC College, enrolled for the second semester of academic year 2009-2010 and was
required to pay a tuition fee of P22,000.00 for the semester. However, it turned out that ABC College
owes Donna P2,000.00 representing refunds due to Donna from tuition fee increase collected during the
first semester by the school which was later disapproved by the Commission on Higher Education. In this
case, Donna needs to pay ABC College only P20,000.00 by reason of:
a. Condonation
b. Merger
c. Confusion
d. Compensation
239. Legal compensation requires that each one of the obligors be bound principally and that he be at the
same time a principal creditor of the other. In addition, it is also necessary that the following
requirements be present, except:
a. 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.
b. That both debts have the same due date.
c. That both debts be liquidated and demandable.
d. That over neither of the debts there be any controversy commenced by third persons and
communicated in due time to the debtor.
240. D owes C P50,000.00. The promissory note evidencing the debt was signed by D as maker and G as
guarantor. C owes D P35,000.00. Both debts are due. If C goes after D and D cannot pay:
a. C can hold G liable for P50,000.00. G cannot claim compensation because he is not a principal debtor.
b. C can hold G liable, but G can claim compensation up to P35,000.00. Hence, he is liable only for
P15,000.00.
c. C cannot hold G liable because he is not the principal debtor.
d. C can collect P50,000.00 from G, but G can collect P35,000.00 from C.
241.D owes C P20,000.00 payable on or before October 31, 2010. C owes D P20,000.00 due on October 1,
2010. On October 1, 2010:
a. Only C may claim compensation
b. Only D may claim compensation
c. Only C may oppose any compensation being claimed by D
d. Either D or C may claim compensation.
242. The compensation referred to in the preceding number is known as:
a. Legal compensation
b. Facultative compensation
c. Voluntary compensation
d. Compensation is not allowed in such situation
243. These statements are presented to you:
I. Legal compensation takes place even though the debtors are creditors are not aware of the
compensation.
II. Compensation by operation of law takes place although the debts are payable at different places.
In your evaluation of the foregoing statements:
a. Both statement are true
b. Both statement are false
c. Only statement I is true
d. Only statement II is true
244. D owes C P10,000.00 by way of loan. C also owes D P10,000.00. If D demands payment from him, C can
claim compensation if the debt that he owes D arises from:
a. A claim for support by gratuitous title in arrears.
b. Civil liability arising from a criminal offense.
c. That of a bailee in commodatum.
d. That of a depositary.
245. D has a withdrawable savings deposit with C Bank to which he has an unpaid loan that is already due.
Who between D and C Bank may claim compensation?
a. D only
b. C Bank only
c. Both D and C bank
d. Neither D nor C Bank.
246.These statements are presented to you:
I. Judicial compensation is one ordered by the court when one of the parties has proved his claim for
damages against the other to whom he is also indebted.
II. Compensation cannot take place when one or both debts are rescissible or voidable because of the
possibility that the said debts may be rescinded or avoided.
In your evaluation of the foregoing statements:
a. Both statement are true
b. Both statement are false
c. Only statement I is true
d. Only statement II is true
247. D owes C P50,000.00 which is due on March 31. On the other hand, C owes D P15,000.00 which is due on
March 15. On March 18, C assigned his credit right to T with D giving his consent unconditionally. On
March 31, how much may T collect from D?
a. P50,000.00
b. P35,000.00
c. P15,000.00
d. Nothing
248. Refer to the preceding number. If D gave his consent to the assignment but reserved his right to the
compensation, how much may T collect from D on March 31?
a. P50,000.00
b. P35,000.00
c. P15,000.00
d. Nothing
Items 249 and 250 are based on the following data:
249.D owes C P80,000.00 which is due on may 20. On the other hand, C owes D the following debts:
P30,000.00 due on May 2; P10,000.00 due on May 9; P20,000.00 due on May 15; and P5,000.00 due on
May 21.
If on May 14, C assigned his credit right to T with notice to D but D did not give his consent to the
assignment, how much may T collect from D on May 20?
a. P40,000.00
b. P20,000.00
c. P15,000.00
d. Nothing because D did not give his consent to the assignment
250. Assume that on May 14, C assigned his credit right to T without informing D who learned of the
assignment only on May 18. How much may T collect from D on May 20?
a. P40,000.00
b. P20,000.00
c. P15,000.00
d. Nothing because D was not notified at the time of assignment
251. D owes C P50,000.00 representing the amount that C paid to X, a creditor of D, who resides in Calbayog
City. C incurred bank charges, transportation and other expenses amounting to P1,500.00 in remitting
representing the amount that D paid to Y, a creditor of C, who resides in Dumaguete City. D incurred bank
charges, transportation and other expenses amounting to P1,800.00 in remitting the payment to Y. Both
the principal debts are due.
I. Both the principal debts are extinguished by compensation.
II. C must pay D P300.00.
a. Both statement are true
b. Both statement are false
c. Only statement I is true
d. Only statement II is true
252.An obligation may be modified by:
a. Changing the object or principal condition
b. Substituting the person of the debtor
c. Subrogating a third person in the rights of the creditor
d. All of the above.
253. Expromision is different from delegacion in that in expromision:
a. All the parties (original debtor, new debtor and creditor) must give their consent to the substitution of
debtors.
b. The new debtor is always entitled to demand reimbursement of what he paid and subrogation.
c. The insolvency of the new debtor may revive the right of the creditor to go after the original debtor.
d. The substitution of the original debtor by a new one is initiated by a third person.
254.As a general rule, the extinguishment of the principal obligation by novation carries with it the
extinguishment of all accessory obligations. In the following cases, the accessory obligation is not
extinguished, except:
a. If the accessory obligation benefits third persons who did not give their consent to the novation.
b. If there was a stipulation that such accessory obligations shall subsist notwithstanding the novation.
c. In case a third person is subrogated in the rights of the creditor.
d. None of the foregoing.
255. D obtained a loan of P100,000.00 from C. The loan is secured by a mortgage of D’s lot and payable at the
end of one year. It also bears interest at 1% per month which by stipulation was to be paid by D to T, a
creditor of C, who agreed to the stipulation in his favor. Six months before due date, D and C agreed that
D would instead be giving a particular car worth P100,000.00. T was not aware of the novation.
a. The obligation to give the car is deemed secured by the mortgage of D’s lot.
b. T may validly damand the payment of interest from D for the next six months.
c. T may no longer demand the payment of the interest because the new obligation is not monetary
obligation.
d. The novation is void because T did not give his consent thereto.
256. D is obliged to give a specific camera to C. later, the parties agreed that D would instead give a cell phone
which C knew was stolen by D.
a. C may validly demand the delivery of the cell phone since it is not illegal per se.
b. C may demand only the delivery of the camera since the original obligation subsists, the new
obligation being void.
c. C may demand the delivery of the camera or the cell phone at his option because the obligation has
partaken the nature of an alternative obligation.
d. C may not demand either the camera or the cell phone because the nullity of the new obligaton
rendered both obligations void.
257. B was intimidated by S into buying the latter’s cell phone for P5,000.00 for which B executed a promissory
note payable after a month. On due date, when the intimidation no longer existed, B called upon S and
proposed to the latter to accept a ring instead of enforcing the note. S accepted the proposal.
a. The novation is void because the old obligation is voidable
b. The novation is valid because the old obligation is voidable
c. The novation is valid. Whatever defect that existed in the old obligation is deemed cured.
d. The novation is valid. However, B has the option to annul the old obligation.
258. D is obliged to give an unlicensed revolver to C. Later, the parties agreed that D would give C a toy air
gun.
a. The novation is valid because the new obligation is valid.
b. The novation is void because the old obligation is inexistent; hence, there is nothing to novate.
c. The novation is valid. The defect in the old obligation is deemed cured because the new obligation is
valid.
d. The old obligation subsists because it cannot be replaced by a new one even if it is valid.
259. D is obliged to give c P500,000.00 if C graduates as an honor student in his Bachelor of Science in
Accountancy (BSA) degree. Later, the parties agreed that D would give C a brand-new Toyota Vios car
instead of P500,000.00. The obligation of D to give C a Toyota Vios car is:
a. Subject to the condition that C must graduate as an honor student in his BSA degree.
b. Not subject to the same condition which is deemed extinguished by the novation of the obligation.
c. Subject to the said condition only if it was stipulated.
d. Void because of the absence of a stipulation of whether or not it is subject to the said condition.
Accordingly, D must still give C P500,000.00
260. These statements are presented to you:
I. D owes C1 P50,000.00 which is secured by a pledge of D’s ring. D also owes C2 P40,000.00. which is
unsecured. C2 pays C1 P50,000.00 without D’s knowledge.
II. D owes C P300,000.00 secured by the guaranty of G. T pays C with the tacit approval of D.
III.D owes C P100,000.00 secured by a mortgage of D’s lot and the guaranty of G. G pays C without D’s
knowledge.
In which of the above cases is the payor legally subrogated in the rights of C to go after D and the security
of the debt?
a. Cases I and II
b. Cases II and III
c. Cases I and III
d. All of the above cases