PAMANTASAN NG CABUYAO (PNC)

COLLEGE BUSINESS ADMINISTRATION AND ACCOUNTANCY

NOTES AND PRACTICE QUESTIONS ON

LAW ON OBLIGATIONS AND CONTRACTS

Section 1 BSA-1
Group No. 1
Academic Year 2019-2020

Prepared by:

Alejandre, Cathryn Leia

Basallote, Jenina Pauline
Del Mundo, Humprhey Loius
Donato, Kimberly
Euraba, Francesca Agatha
Surio, Rose
Wenceslao, Janniña

Submitted to:

Atty. Narciso G. Reyes, Jr.

January 2020

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 TABLE OF CONTENTS

Part I.

Introduction to Law……………………………………………………… p. 1

Chapter 1 Obligations: General Provisions (Articles 1156-1162) ………………………. p. 2

Chapter 2 Obligations: Nature and Effect of Obligation (Articles 1163-1178) …………. p. 3

Chapter 3 Obligations: Different Kinds of Obligation (Articles 1179-1230)

▪ SECTION 1. — Pure and Conditional Obligations (Articles 1179-1192)..…. p. 8

▪ SECTION 2. — Obligations with a Period (Articles 1193-1198)..…………. p. 11

▪ SECTION 3. — Alternative Obligations (Articles 1199-1206)…………….... p. 12

▪ SECTION 4. — Joint and Solidary Obligations (Articles 1207-1222)….……. p. 14

▪ SECTION 5. — Divisible and Indivisible Obligations (Articles 1223-1225)... p. 16

▪ SECTION 6. — Obligations with a Penal Clause (Articles 1226-1230)…….... p. 17

Part II.

Practice Questions…………………………………………………………………… p. 20

Key Answers …………………………………………………………………… p. 15

Bibliography …………………………………………………………………… p. 47

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 PART I

REVIEWER

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 REVIEWER

THE GENERAL NATURE OF LAW ORGANIZATION OF LAW

LAW is‘PORC” SPECIAL COURTS
Promulgated by competent authority  Anti-Graft Court
 Sandiganbayan
Obligatory
 Court of Tax Appeals
Rule of Conduct
Common Observance and Benefit
REGULAR COURTS

Supreme Court
DIVISION OF LAW
STRICT LEGAL SENSE Court of Appeals
 State Law enforced by law
can be general(mass Regional Trial Court
obligatory) or specific
(legal rule in particular Metropolitan Trial Court/Municipal
statute) Trial Court/Municipal Circuit Trial
NON LEGAL SENSE Court
 Divine Law Law of religion and
faith
 Moral Law Norms; what is right SOURCES OF LAW
and wrong Constitution Supreme/highest
 Natural Law Justice, fairness, Custom Habits and practices
righteousness
Other Sources Use if absence of all
 Physical Law Regularity; physics sources
Legislation Enacted or statue
LAW SOURCE SANCTION BINDI law; approved by
NG legislation
FORCE Administrative, Issued by
DIVINE God Lies on Religion/ regulations and administrative
LAW present and faith rulings officials, will be valid
future life if not contrary to law
NATURAL Divine Depends; no Always Judicial Decisions Decision of the court
LAW Inspiration law, no present
of Man sanction
MORAL Norms of No definite Not CLASSIFICATION OF LAW
LAW right legal sanction absolute As to its purpose
conduct Substantive Adjective
PHYSICAL Science none Physics  Creates,  Rights may be
LAW define and enforced
STATE Positive, With legal Only law regulates right
LAW municipal, sanction enforced and duty
civil law by state As to its subject matter
Public Private
Everyone is presumed to know the law,  Relationship  Relationship
any kind of excuse is not allowed. of state and of individuals
people to others

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 CHAPTER 1 *compliance in good faith - performance
according to terms of contract between
GENERAL PROVISION parties
ART. 1156. An obligation is ART. 1160
a juridical necessity to give, to do
or not to do. Quasi-Contracts
Lawful
*obligation - one is bound to render
Unilateral
something to another.
Voluntary Act
Requisites of obligation Quasi-Contracts
Passive Subject Debtor Negotiorum Voluntary
Active Subject Creditor Gestio Without Consent
Juridical Tie Binds or connect Solutio Indebiti Received by mistake
parties Return to the owner
Object Subject matter
Kinds of Obligation
ART. 1161
Real Personal
to give to do or not to do *criminal offenses - shall be governed by
(positive or negative) penal laws

ART. 1157 Civil Liabilities includes;

Restitution Returning the value
Obligation arises from: Reparation Paying damages cause
Law imposed by law Indemnification Paying other damages
Acts or Omissions criminal offenses
punished by law
Contracts base on agreement ART. 1162
Quasi-Contracts a juridical relation
resulting from lawful, *quasi-delicts - cause damages to others
unilateral and without contract.
voluntary act. Requisites of Quasi-Delicts
Quasi- Delicts arises from damages Fault or Negligence Direct Relation
Act or Omission No pre-existing
Sources are classified
Damaged Caused contract
 Law
 Private Acts
o Licit - contracts/quasi- CRIME QUASI-DELICTS
contracts Malicious intention Negligence
Purpose is Indemnification of
o Ilicit - delicts/quasi-delicts
punishment offended party
o Affect public interest Concerns private
interest
ART. 1158 Criminal and Civil Civil Liable
liable
Law Demandable/Not Cannot be settle by Comprised by civil
Demandable party themselves liability
Assumed/Expressed Demandable Guilt of accused must
Not Assumed Not Demandable be approved

ART. 1159

Contract
Has its force of law
All essential elements are present
Breach of contract/Violation

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 CHAPTER 2  from law, quasi-contracts, delicts and
quasi-delicts
NATURE AND EFFECT OF
OBLIGATIONS Natural Fruits Industrial Civil
- spontaneous Fruits Fruits
ART. 1163. products of soil - produced - derived
and young of the by land by virtue
It is an incidental duty to preserve a thing
animals; without through of
with ordinary care (diligence of a good father
the intervention human juridical
of a family) to ensure the delivery of an
of the human cultivation or relation
obligation and prevent negligence of the
labor labor
debtor. Furthermore, parties can stipulate
another standard of care.
*extraordinary care- highest standard of care
observed by the common carriers and banks. Ex.

Law imposed the standard of care, therefore, parties A scientist extracted the egg of the female
cannot stipulate that there should be no standard of eagle and injected to the male.
care because obligation will become useless since there is The fruit is called a natural fruit because it is
no obligatory force. a young of an animal. Consider only human
intervention or cultivation if it is a product of
Specific/ Generic/
the soil.
Determinate Indeterminate
has sufficient class or genus Personal Right Real Right
particularity right or power of right or interest of creditor
cannot be substituted can be substituted creditor enforceable over a specific thing
against a particular without definite passive
subject; enforced directly
person or a passive
Debtor is not liable if failure to preserve the thing is against the world
subject
due to a fortuitous event.
Exception: Law does not apply to obligations with
generic thing because standard of care is useless
since debtor can always substitute the thing of the same Ex.
kind, which follows the general rule Genus Piolo in a form of an agreement will give a gift
nunquam perit or genus never perishes. to Retes a pet dog on Dec.25.
On Dec. 23 Blacky gave birth to the puppies
Ex: A bought a Rolex watch from B.
and the neighbours were interested on the
However, at the time of delivery, the watch
puppies.
was stolen from B (fortuitous event - act of
Retes can retrieve the puppies since the
man). The debtor is liable and obliged to
obligation arises from Dec. 23, ownership is
deliver the Rolex watch since it is a generic
transferred during the perfection of the
thing.
contract.
ART. 1164. Therefore the fruits will be in the ownership
of Ms. Retes already, and the creditor is
Real right is what acquired upon delivery, while entitled to deliver the fruits of the thing under
ownership is transferred from the perfection of the the Civil law principle "Accessory follows the
contract. principal." When the obligation has been
perfected, the ownership was transferred
Civil Law Principle: Accessory follows the Principal. from the seller (obligor) to the
The obligation to deliver fruits arises buyer(obligee)
when:
3 essential requisites on the perfection of
 time of the perfection of the contract the contract:
1. Consent
 obligation is subject to suspensive
condition 2. Object

 Contract of Sale 3. Payment of consideration

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Ex: X sold car to Y where assuming sale b. creditor cannot force the debtor to make
transpires on Nov.23. the delivery but can ask for performance of
obligation
Note: Once the car is delivered to Y, Y acquires real
right. Prior to delivery X to Y acquires personal right. c. can recover damage in case of breach
Ex: When the contract of sale was executed General Rule: If the thing is lost or destroyed
on Nov.23 but delivery transpires on Nov.24 due to fortuitous event the obligation is
when the contract was signed and paid then extinguished.
contract has been perfected because there is
payment of consideration. If the car produces Ex. Mr. Garcia to deliver Blacky to Ms.Retes
a fruit a civil fruit after letting the car be used upon fortuitous evnt, before time of delivery
with a rent payment. Y can demand for rental Blacky get into an accident wherein he was
to X from Nov.23 because Y becomes now striken by a lightning (an act of God) then
the owner from the time the contract was the obligation to deliver is extinguished.
perfected.
Exceptions to general rule:
Remedies of non-compliance:
Ex: Rolex watch to deliver from A to B.
a. recovery of ownership
Delay Promise to Generic
b. specific performance Ex. deliver the Thing
If A delays the same to 2 Ex.
Ex. If X did not deliver the car to Y, Y has delivery which is or more A to deliver
the remedy of specific performance because supposed to be persons of a Rolex
ownership has already been transferred to him made on Nov. different watch to B
therefore you cannot ask for a recovery if you 24 but A did not interests. was forcibly
have already the possession of the thing. Y deliver the Ex. took from
acquires the personal right to demand for a Rolex watch, on If A also A.
fulfillment of obligation against X as a Nov.25 while he promised to Rolex
remedy. was walking deliver to C watch being
down the street the same a generic
In case of double sale a snatcher watch, then thing does
forcibly took the obligation is not
Ex: X delivered the car to Z remedy of Y
wrist watch not extinguish
against Z is the recovery of ownership
from A and so it extinguished the
because by the virtue of execution of his deed
was rendered even in obligation
of sale the ownership is transferred from X to
beyond fortuitous of A just
Z.
recovery, theft event. because of
Two contract of sale executed, remedy is the recovery of (act of man- he
ownership because of the acquisition of ownership from fortuitous event) happening
the time the contract has been perfected. A is liable of a
because he fortuitous
already acquired event,
delay. because he
ART. 1165. can deliver
Remedies of creditor in real obligation (obligation to any Rolex
deliver a thing) watch as
long as of
Specific Real Obligation can demand: the same
kind as a
a. specific performance of obligation + replacement
indemnity
b. rescission + recovery of damage
c. payment of damage
Generic Real Obligation
a. can be performed by third person

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 ART. 1166. Kinds of delay or default

Accessions Accessories (1) Mora solvendi - fault of the debtor

- fruits or additions or - thing included to
improvements the principal for (2) Mora accipiendi - fault of creditor
ex. Air - better use or (3) Compensatio morae - Both have fault
conditioner in a car, completion
trees on the land, ex. Key of the car, No delay in negative personal obligations.
shares on stock frame of a picture
When both parties are already in delay, there is no
delay.
General Rule: Accessory follows the
principal Requisites of delay by the debtor:

ART. 1167.  failure to perform on the date agreed upon

This article is about the breach of a personal
obligation.
Specific performance is not applicable since this would
be violative of the debtor’s constitutional right against
involuntary servitude.
Obligations not to do: and the obligor does it, the
creditor may have it undone at the expense of the
debtor.
ART. 1168. When the obligation
consists in not doing, and the obligor does
what has been forbidden him, it shall also
be undone at his expense.
ART. 1169.
In reciprocal obligations, neither party incurs in delay
if the other does not comply or is not ready to comply
in a proper manner with what is incumbent upon him.
From the moment one of the parties m fulfills his
obligation, delay by other begins. (Compensatio
Morae)
No demand, no delay.
Exceptions:
(1) When the OBLIGATION or LAW so
provides. Ex. Payment of taxes
(2) TIME is a controlling motive. It is of the
essence. Ex. Delivery of a wedding cake
(3) When demand would be USELESS. Ex.
When the object of the obligation is lost or
destroyed through the fault of the debtor.
*delay (mora) - failure discharge of duty on
due date and time
Ordinary delay Legal delay
- failure to perform - delay that results in
an obligation on time- breach of contract
no punishment
 demand may be either juridical or
extrajudicial
 failure to comply w/ such demand
ART. 1170.
4 Grounds of Liability (TIP: When the law
distinguishes two concepts, who have to take note of the
distinctions. Because there are different treatment given
to each concept.)
1. Fraud (deceit or dolo) - deliberate or
intentional evasion of the normal
fulfilment of an obligation.
a) Dolo causante (causal fraud) - Fraud
upon perfection or commencement of
the contract.
Example:
X (debtor) obliged himself to deliver a
car to D (creditor) but in reality X has no
car. There is nothing to deliver.
Remedy of the creditor:
Annulment or cancelation of the contract.
b) Dolo incidente (incidental fraud) -
Fraud in the performance of the
obligation.
Example:
X (debtor) obliged himself to deliver a
Gucci bag to D (creditor). But instead of
delivering a Gucci bag X delivers a
Jansport bag to D.
Remedy of the Creditor:
Ask for payment of damages.
2. Negligence (fault or culpa) - voluntary
act or omission, there being no bad faith or

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malice, which prevents the normal fulfilment
of an obligation
3. Delay (mora)
4. Contravention of the terms of the
obligation- covers all form of violation
(Additional Information: Article 1170
pertains to dolo incidente.)
ART. 1171. Responsibility arising
from fraud is demandable in all
obligations. Any waiver of an action for
future fraud is void. (1102a)
Waiver for future fraud is void.
It allows the performance of fraud in
the side of the debtor.
Waiver for past fraud is valid.
It is an act of generosity and
magnanimity from the part of the creditor.
(Note: only incidental fraud - contract is
still demandable)
ART. 1172.
Waiver arising from negligence is valid.
When:
1. the standard of care is the ordinary
care or the proper diligence of a good
father of the family.
Exception:
1. If the stipulation requires another
standard of care or an extraordinary care.
Example: Common carrier.
Kinds of negligence according to source
of obligation (Note: remember the Latin
word)
1. Contractual negligence (culpa
contractual) - negligence in contracts
resulting in their breach.
Remedy of the Creditor: He can
seek for payment of damages from the debtor.
2. Civil negligence (culpa aquiliana) -
negligence which by itself is the source of
an obligation between the parties not so
related before by any pre-existing
contract. Example: Quasi - delicts.
Penalty: Payment of damages
3. Criminal negligence (culpa criminal) -
Crime committed by negligence.
Note: Under the ART. 365 of the
revised penal code the law punishes culpa
criminal
Penalty: Imprisonment and payment
of damages.
(Additional Information: An act no
matter how wrongful would not amount a
crime in absence of a law defining such
act as a crime.)
ART. 1173.
If the contract is silent the diligence
which is to be observed in the
performance, that which is expected of a
good father of a family shall be required.
Exception:
1. The thing is genus.
2. The thing needs an extraordinary
care. Example: Common Carrier.
ART. 1174
Requisites of a fortuitous event
1. Independent of a human will or at least
of the debtor’s will
2. The event could not be seen, or if
foreseen, is inevitable
3. Impossible for the debtor to comply with
his obligation in a normal manner
4. there is no concurrent negligence on the
part of the debtor
GENERAL RULE: Obligation is
extinguished if the loss of the thing is due
to a fortuitous event
 Except: 1.When expressly specified by
law
a) Debtor is guilty of voluntary breach of
contract
b) Debtor has promised to deliver the same
determinate thing to two or more persons
who do not have the same interest
c) Obligation to deliver a specific thing arises
from a crime
d) The thing to be delivered is generic
2. Declared by the stipulation of the
contractual parties
3. When the nature of obligation requires
the assumption of risk
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 ART. 1175
Requisites for recovery of interest
1. payment of interest is expressly stipulated
2. written agreement
3. the interest must be lawful

Central Bank Central Bank Circular No.

Circular No. 905
799
when there is free to stipulate any amount
no stipulated of interest as long as it is not
interest, the considered “iniquitous or
legal interest unconscionable”-Article
shall be 6% 1229

ART. 1176
 The presumption will be only applied if;
1. The prior installments have been paid
2. Only if the receipt indicates which month
the payment is being made for.
 It is presumed that the prior instalments
are already paid even without its receipts
even there are later installments.

ART. 1177
Remedies available to creditors for the
satisfaction of their claims
1. Exact fulfillment with right to damages
2. Pursue the debtor’s leviable property
3. Exercise all the right and bring all the
actions of the latter for the same purpose
Ex. Right to subrogation
4. Impugn the acts
ART. 1178
GENERAL RULE: All rights are
transmissible
Except:
1. Prohibited by law
2. Prohibited by the parties’ stipulation

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 CHAPTER 3
DIFFERENT KINDS OF
OBLIGATIONS
SECTION 1 – Pure and Conditional
Obligations
ART. 1179
*Pure Obligation - not subject to any
condition, no specific date, and immediately
demandable.
*Conditional Obligation – effectivity is
subordinated to the fulfillment or non-
fulfillment of a future and uncertain event or
upon a past event unknown to the parties.
*Condition – a future and uncertain or
past event upon the happening of which, the
effectivity or extinguishment of an obligation
or right subject to it depends.
Principal Kinds of Condition
Suspensive Resolutory
Condition Condition
When the Extinguishedthe
fulfilled obligation obligation
arises
obligation is a mere possibility of
hope termination
An obligation is demandable at once if
1. It is a pure obligation
2. It is subject to a resolutory condition
3. It is subject to a resolutory period
ART. 1180
Duration of the period depends upon the
will of the debtor
a. The debtor promises to pay when his
mean permit him to do so – becomes
obligation with a period.
b. If both parties cannot agree as to the
specific time for payment, the court shall
fix the same on the application of either
party. – Article 1197
ART. 1181
Effect of the happening condition
1. Acquisition of Rights – obligations
subject to a suspensive condition, it
depends upon the happening condition.
- If the suspensive condition is certain
to be not fulfilled, the parties would
stand as if the conditional obligation
had never existed.
2. Loss of rights already acquired –
obligations subject to a resolutory
condition, the happening of the condition
produces the extinguishment or loss of
rights already acquired.
ART. 1182
*Potestative Condition – a condition
suspensive in nature and which depends upon
the sole will of one of the contracting parties.
1. Suspensive Condition depends upon
the will of the Debtor
- Condition is void but obligation is valid if
the obligation is pre-existing
- Both condition and obligation is void if
the obligation still does not exist
2. Suspensive Condition depends upon
the will of the Creditor
- Both condition and obligation is valid
3. Resolutory Condition depends upon
the will of the Debtor
- Both condition and obligation is valid
*Casual Condition – the suspensive
condition depends upon chance or upon the
will of a third person, the obligation is valid
*Mixed Condition – the suspensive
condition depends partly upon chance and
partly upon the will of a third person, the
obligation is valid
ART. 1183
This article refers to suspensive conditions wherein it
applies only to cases where the impossibility already
existed at the time the obligation was constituted
Kinds of Impossible Conditions
1. Physically– in nature of things, cannot
exist or cannot be done.
2. Legally– contrary to law, morals, good
customs, public order, or public policy.
Effect of Impossible Condition
1. the condition and obligation are void
2. if the condition is negative, not to do an
impossible thing, the condition is
disregarded and the obligation is valid
3. if the obligation is divisible, only the
affected obligation is void and those that
are not affected by the impossible
conditions shall be valid
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4. if the obligation is pre-existing, the
condition is void but the obligation is still
valid
ART. 1184
*Positive (suspensive) Condition is the
happening of an event at a determinate time,
the obligation is extinguished:
1. As soon as the time expires without the
event taking place
2. As soon as it has become indubitable that
the event will not take place although the
time specified has not expired.
 If no time is fixed the circumstances shall be
considered to arrive at the intention of the parties
ART. 1185
*Negative Condition is an event will not
happen at a determinate time. The obligation
shall become effective and binding:
1. From the moment the time indicated has
elapsed without the event taking place
2. From the moment it has become evident
that the event cannot occur, although the
time indicated has not yet elapsed.
 If no time is fixed the circumstances shall be
considered to arrive at the intention of the parties
ART. 1186
Constructive fulfillment of suspensive condition
Requisites for the application of this
article:
1. The condition is suspensive.
2. The obligor actually prevents the
fulfillment of the condition
3. The obligor acts voluntarily
Except: if the act of the obligor is against the
law and if it is in the exercise of right
Constructive fulfillment of resolutory
condition
 This article also applies to obligation
subject to a resolutory condition with
respect to the debtor who is bound to
return what he has received upon the
fulfillment of the condition.
ART. 1187
Retroactive effects of fulfillment of suspensive condition
*Retroactive - refers to extending the scope
or effect to matters that have occurred in the
past
1. An obligation to give subject to a
suspensive condition – once the
condition is fulfilled; its effects shall
retroact because the condition is only an
accidental element of a contract. The
obligation can exist without being subject
to a condition.
2. In obligations to do or not to do - the
courts shall determine the retroactive
effect
Retroactive effects as to fruits and
interests in obligation to give
1. In reciprocal obligations – no
retroactivity
2. In unilateral obligations – usually no
retroactivity effect because they are
gratuitous
ART. 1188
Rights pending fulfillment of suspensive
condition
1. Rights of creditor – may take or bring
appropriate actions for the preservation of
his right
2. Rights of debtor – can recover what has
been paid by mistake prior to the
happening of the suspensive condition.
(solution indebiti)
ART. 1189
This article only applies if:
1. The obligation is a real obligation
2. The object is determinate
3. The obligation is subject to a suspensive
condition
4. The condition is fulfilled
5. There is loss, deterioration, or
improvement of the thing during the
pendency of the condition
Kinds of Loss
1. Physical – a thing perishes
2. Legal – a thing goes out of commerce or
a thing heretofore legal becomes illegal
3. Civil – a thing disappears in such a way
that its existence is unknown or if
known, it is impossible to recover,
whether as a matter of fact or of law
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Rules in case of loss, deterioration, or
improvement of thing during pendency of
suspensive condition
1. Loss of thing without debtor’s fault –
obligation is extinguished
2. Loss of thing through debtor’s fault –
debtor is liable for the damages
3. Deterioration of thing without debtor’s
fault – the creditor will bear the
impairment
*a thing deteriorates when its value is reduced or
impaired with or without the fault of the debtor.
4. Deterioration of thing through
debtor’s fault – the creditor may choose
between the rescission or cancellation of
the obligation or the fulfillment of the
obligation with indemnity for damages
5. Improvement of thing by nature or by
time – the improvement shall be inure to
the benefit of the creditor
*a thing is improved when its value is increased or
enhanced by nature or by time or the expense of the
debtor or creditor.
6. Improvement of thing at expense of
debtor – the debtor will have the right to
a usufructuary
*Usufruct - is the right to enjoy the use and
fruits of a thing belonging to another
ART. 1190
Effects of fulfillment of resolutory
condition
1. In obligations to give - the obligation is
extinguished and the parties are obliged to
return to each other what they have
received under the obligation.
a) The effect of the fulfillment is retroactive
(return to the status quo)
b) If the thing to be returned is legally in the
possession of a third person who did not
act in bad faith, the remedy of the party
entitled to restitution is against the other
c) The obligation of mutual restitution is
absolute and it applies also to the fruits
and interests.
d) In obligations to give subject to
suspensive condition, the retroactivity
admits exceptions according as the
obligation is bilateral or unilateral.-Article
1187
2. In obligations to do or not to do – the
courts shall determine the retroactive
effect of the fulfillment of the resolutory
condition
ART. 1191
Kinds of Obligation according to the
person obliged
1. Unilateral – only one party is obliged to
comply with a prestation.
2. Bilateral – both parties are mutually
bound to each other (may be reciprocal or
non-reciprocal)
a) Reciprocal Obligations – those which
arises from the same cause and in which
each party is a debtor and creditor of the
other
b) Non-reciprocal Obligations – those
which do not impose simultaneous and
correlative performance on both parties
c) Remedies in reciprocal obligations
1. If one of the obligors does not comply
with what is incumbent upon him, the
aggrieved party may choose between:
a) Action for specific performance of the
obligation with damages
b) Action for rescission of the obligation
with damages
2. If there is non-compliance by one of the
contracting parties – breach of contract
Court may grant guilty party term for
performance
 the court shall order the rescission
claimed unless there should be just cause
for granting the party in default a term or
period for the performance of his
obligation
Remedies are alternative
 the aggrieved party may only choose one
of the remedies except he may also seek
rescission after he has chosen fulfillment
if the latter should become impossible
Limitations on right to demand rescission
 the right to rescind by the injured party is
not absolute
1. Resort to courts – the rescission
mentioned in this article is judicial
2. Power of court to fix period – par 3
3. Right of third person – rescission is not
available as a remedy
4. Substantial violation – GENERAL
RULE: Rescission will not be granted for
slight breaches of contract
5. Waiver of right
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Rescission without previous judicial AS TO does not has a
decree RETROACTI- have any retroactive
VITY OF retroactive effect
1. Where automatic rescission expressly EFFECTS effect
stipulated unless
2. Where contract still executor – there is stated
no performance yet by both parties but
one is willing to comply with what is
incumbent upon him while the other is *retroactivity - if the obligation is fulfilled, it
not, the willing party may rescind the will retroact from the perfection or
contract without previous judicial commencement of the contract as if the time
decree of rescission and it is not is still the same
necessary that it must be stipulated.
However, if the other party does not Stages of a Contract:
agree, he may resort to judicial action and
1. perfection - birth
let the court decide whether the rescission
was proper or not. 2. performance - consummation
ART. 1192 Kinds of Period According to Effect:
Where both parties are guilty of breach 1. suspensive period - gives rise to an
obligation and is not demandable upon
1. First infractor known – liability of the first commencement, just on the arrival of the
infractor should be equitably reduced. period
2. First infractor cannot be determined - the
contract shall be extinguished and each Eg. I will give you a gift on your birthday.
shall bear his own damages.
2. resolutory period - extinguishes the
obligation and is immediately demandable
SECTION 2. - Obligations with a Period
Eg. I will stop giving you allowance on your
ART. 1193 next birthday.
*obligation with a period - effects or ART. 1194. In case of loss,
consequences are subjected to the expiration deterioration or improvement of the thing
or arrival of said period or term before the arrival of the day certain, the
rules in articles 1189 shall be observed. (n)
*period - future and certain event which
ART. 1195
arises or extinguishes an obligation
This article is about the payment or delivery before the
DIFFERENC PERIOD CONDITIO arrival of the period which depends upon the awareness
E N of the debtor.
AS TO certain uncertain
FULFILLME event event DEBTOR PAYMENT REASON
NT BEFORE
AS TO TIME Future past and ARRIVAL
future AWARE can recover intentional
AS TO fixes time arises or only fruits and
INFLUENCE for the extinguishes interest
efficacious an obligation UNAWARE can recover unintentio-
-ness of everything nal
the along with the
obligation fruits and
AS TO empowers invalidates the interest
EFFECT, the court obligation
WHEN LEFT to fix the If the debtor is aware and nevertheless pays, he is
ON obligation knowledgeable and is considered intentionally paying
DEBTOR’S thereof in advance.
WILL

11
If the debtor is unaware, it is considered as a quasi-
contract – solution indebiti - paying by mistake.
This article does not apply to personal
obligations because service cannot be recovered and
you cannot undo what has been done. Because of
impracticality, it only applies to real obligations.
ART. 1196
This article states that the period is presumes to benefit
both the creditor and the debtor.
*interest - payment for the interest of money
Eg. A owes B Php 10 000.00 payable within
10 days with 2% interest per day. Assuming A
has paid after two days and C paid her Php 8
000.00 a day after, could A compel B to
accept her payment in advance?
Ans: A could not compel B to accept her
payment in advance because the debtor could
not modify the contract - the source of their
agreement. In a contact of loan with interest,
the creditor is already entitled to the whole
amount.
If there is no interest for the loan, the debtor could
compel the creditor because the contract is gratuitous in
the first place.
ART. 1197
This article states that the court can only fix the period
if the parties intended a period in the first place.
The court cannot substitute its decision and interfere
with the contract because it is the law of the parties.
ART. 1198
Circumstances:
I - insolvency unless the debtor gives a
guaranty or security
G - guaranty
I - impairment unless the debtor gives new ones
equally satisfactory
V - violation
This article is about the circumstances that will make
theAdebtor lose the right to use the perio
- abscond
*liquidity - ability to convert assets into cash
*solvency - ability to pay liabilities with assets
A solvent person could be illiquid at the same time
because he could be able to pay his liabilities with his
assets but not easily convert it into cash.
*guarantor (substitute or replacement) - a
person who will be held liable in case of non-
payment
*security - a property constituted as a
mortgage when the debtor just has more
liabilities but still has assets
Types of Securities:
1. real estate mortgage - security for real
property
2. chattel mortgage - security for personal or
moveable property
3. contract of pledge - security for jewelries
Giving guaranty or security means the debtor can still
pay even if he failed to do so according to the
agreement; it can answer the said failure.
The obligation becomes pure and immediately
demandable if the debtor loses the right to use the
period.
IMPORTANT NOTE: IF A FORTUI-
TOUS EVENT MADE THE GUA-
RANTY OR SECURITY DISAPPEAR,
THE DEBTOR WILL STILL LOSE
THE RIGHT TO USE THE PERIOD.
This is the only rule in the Law of Obligations and
Contracts that makes the debtor liable for a fortuitous
event aside from the exceptions.
SECTION 3. - Alternative Obligations
ART. 1199
Kinds of Distributive Obligation:
1. alternative obligation - several prestations
are due but the performance of one is
sufficient
2. facultative obligation - only one
prestation is due but the debtor may
substitute another
ART. 1200
General Rule: The right to choose the
prestation belongs to the debtor.
Exceptions:
12
1. if the prestation is impossible, unlawful ART. 1205
and not the object of the obligation
Before the creditor makes the selection, the debtor
2. only one prestation is practicable cannot incur delay.
ART. 1201 LOSS RIGHTS OF
CREDITOR
Communication of Notice that a Choice 1. THROUGH A can choose from
has been Made: FORTUITOUS among the remainder
1. effect of notice - until the choice is made EVENT
and communicated, the obligation remains (SOME)
alternative 2. THROUGH may claim another
DEBTOR’S item with right to
2. proof and form of notice - the law does FAULT damages
not require any particular form regarding the (SOME)
giving of notice which may be orally or in 3. THROUGH may demand payment
writing, expressly or implied DEBTOR’S of any item with right
FAULT (ALL) to damages
Effects of Notice:
4. THROUGH A obligation is
1. obligation becomes simple FORTUITOUS extinguished
2. irrevocable and cannot be changed EVENT (ALL)
without consent
Rules are also applicable to personal obligations.
General Rule: All rights may be waived.
The responsibility of debtor to damages depends if it
ART. 1202
was due to his fault or not.
If only one prestation is practicable, the obligation is
ART. 1206
converted into a simple one.
*facultative obligation - only one prestation
ART. 1203. If through the creditor’s
has been agreed upon but the obligor may
act the debtor cannot make a choice
render another in substitution
according to the terms of the obligation,
the latter may rescind the contract with LOSS EFFECT EFFECT
damages. (n) (PRINCI- (SUBSTI-
PAL) TUTE)
*rescission - creates the obligation to return
BEFORE If through a If through a
the things which were the object of the
SUBSTITU- fortuitous event, fortuitous
contract together with their fruits, and the
TION obligation is event,
price with its interest
extinguished. debtor is
ART. 1204 If through the not liable.
debtor’s fault, If through the
LOSS EFFECT debtor is liable. debtor’s fault,
1. SOME If through his fault, debtor debtor is
OF THE is not liable. not liable.
OBJECTS If through a fortuitous event, AFTER If through a If through a
debtor is not liable. SUBSTITU- fortuitous event, fortuitous
2. ALL OF If through his fault, debtor TION debtor is not event,
THE is liable. liable. obligation
OBJECTS If through a fortuitous event, If through the is extin-
debtor is not liable. debtor’s fault, guished.
debtor is not If through the
In case of disagreement, the creditor must prove such liable. debtor’s fault,
value, thing last disappeared or service last became debtor is
impossible. liable.

Once the substitution is made, the obligation is

converted into a simple one to deliver or perform the
substituted thing or prestation. The substitution

13
becomes effective from the time it has been Actions of is to be each one of
communicated. creditor/ demanded the creditors
obligee to proportionate has a right to
DIFFERENCE ALTER- FACULTA the ly by the demand entire
NATIVE -TIVE obligation different compliance
NUMBER OF several only one creditors. with the
PRESTATION prestations prestation is prestation.
S are due due but
but debtor is
complianc allowed for General Rule: Collective obligation
e with one substitute presumed to be joint.
is
sufficient Kinds of Solidary Obligation
RIGHT OF debtor, debtor only
CHOICE creditor,  Passive Solidary
third  Active Solidary
person  Mixed Solidary
LOSS does not extinguishes
Solidaries have different application in
THROUGH A extinguish the
Obligations and contract. They differ in many
FORTUITOUS the obligation
ways such as:
EVENT obligation
LOSS debtor is If things are
THROUGH not liable lost with his
FAULT OF (some) fault, he is According Passive Active Mixed
THE DEBTOR if the right of liable to the solidarity solidarity solidarity
choice if the parties
belongs to substitute is bound:
the creditor, lost before
Solidarity solidarity solidarity
debtor is substitution,
in the on the on the
liable debtor is
part of part of part of
(some) not liable
the the the
debtor. creditors, debtors
SECTION 4. - Solidary and Joint Any of where and
Obligations the anyone of creditors,
debtor them can where
ART. 1207 - 1208. can pay demand each one
or fulfill the of the
Kinds of Obligation the fulfillmen debtors is
obligation t of the liable to
Individual Collective
(many entire render,
obligation obligation
debtors, obligation and each
Number of One Two or only one (one one of
Obligee more creditor). debtor,ma the
Number of One Two or ny creditors
Obligor more creditors). has a
right to
Kinds of Collective obligation demand,
entire
Joint Solidary complian
Obligation Obligation ce with
Actions of paid or each one of the
debtor / fulfilled the debtors is obligation
obligor to proportionate bound to .
the ly by the render
obligation different payment or
debtors fulfillment of
the obligation

14
According Legal Conventi Real that in a solidary obligation, the subject
to source: solidary onal obligatio matter may be divisible or indivisible.
solidary n
Solidary Solidary is imposed ART. 1211
imposed agreed by the Solidary Obligation Not affected by
by law upon by nature of diverse stipulations
the the
Uniform Parties bound with
parties obligation
same stipulations
. Ex.
Non-uniform/ Parties are not subject
Workmen
Varied to same stipulations
’s
Compens
ation Law ART. 1212
Solidary creditor may act beneficial to others
Solidarity not presumed. The presumption, but not act prejudicial because it can result to
where there are two or more persons in the same extinguishment of the obligation but can cause
obligation, is that it is joint. damages to others.
ART. 1209. ART. 1213
This article speaks of a joint indivisible obligation. Solidary Creditor cannot just assign his
rights without the consent of others, if the absence of
It is joint as to liabilities of the debtors or rights of the
others happens he cannot assign his rights to the third
creditors but indivisible as to compliance. This
person.
obligation constitutes the middle ground between a
joint obligation and a solidary obligation. ART. 1214
ART. 1210. The debtor can pay to any solidary creditors
unless the judicial demanded to pay to a certain
Indivisibility distinguished from
person.
solidarity.
Applicable only to an active solidarity.
● Indivisibility refers to the prestation, while
solidarity refers to the juridical or legal tie ART. 1215
that binds the parties;
In case of novation, compensation, confusion or
● In indivisible obligations, only the debtor remission caused by a solidary creditor that caused the
guilty of breach of obligation is liable for extinguishment of the obligation, he shall be liable to
damages (Arts. 1209, 1224.), thereby the others for their corresponding shares
terminating the agency, while in solidary
obligations, all of the debtors are liable for
the breach of the obligation committed by
a co-debtor (Art. 1221.), for solidarity Any cause of modification or extinction does not
among them remains; modify or extinguish the obligation except to creditor
or debtor affected.
● Indivisibility can exist although there is
only one debtor and one creditor, while in ART. 1216
solidarity, there must be at least two
The solidary creditor has the choice to determine
debtors or two creditors
against whom he will enforce the collection. It can be
● In indivisible obligations, the others are either;
not liable in case of insolvency of one
1. Any one of the solidary debtors
debtor, while in solidary obligations, the
2. Some of the solidary debtors
others are proportionately liable.
3. All of the solidary debtors
Note: The first sentence of Article 1210
*so long as the debt has not been fully collected
simply means that the liability in an
indivisible obligation may be either joint
or solidary. The second sentence means

15
 ART. 1217 ART. 1220. The remission of the whole
obligation, obtained by one of the solidary
Effects of payment by a solidary debtor: debtors, does not entitle him to
reimbursement from his co-debtors. (n)
1. Between the solidary debtors and
creditor(s) – full payment made by one This is because the remitted debtor pays
of the solidary debtors extinguishes the nothing to the creditor.
contract but the creditor has the right to
choose which payment to accept if two or ART. 1221
more solidary debtors offer to pay (in full)
LOSS LIABILITY
2. Among solidary debtors – after the full 1. WITHOUT obligation is
payment of the debt, the paying solidary FAULT extinguished
debtor can demand reimbursement from BEFORE
his co-debtors for their proportionate DELAY
shares with the interest only from the time 2. DUE TO A all debtors are
of payment wherein the obligation SOLIDARY liable for price
becomes joint. If one become insolvent, DEBTOR and damages but
he shall be liable for his share. can recover
from the
3. Among solidary creditors – the negligent debtor
receiving creditor is jointly liable to the 3. WITHOUT all debtors are
others for their corresponding shares FAULT now liable for
AFTER DELAY everything
ART. 1218
As far as the creditor is concerned, the fault or delay of
When the solidary debtor pays after the obligation has
one solidary debtor shall be the fault or delay of all
prescribed or become illegal, he is no longer entitled to solidary debtors.
reimbursement from his co-debtor as well as he cannot
recover what he has paid or delivered. If the creditor recovers the price and damages from the
negligent debtor, the negligent debtor cannot claim
ART. 1219 reimbursement from the others because he alone was at
PAYMENT EFFECT fault.
1. BEFORE obligation is If the thing to be delivered belong to the negligent
REMISSION extinguished debtor, only he is liable to damages and interest.
2. AFTER solutio indebiti
REMISSION arises ART. 1222
Defenses available to a solidary debtor:
It is necessary for the debtor to prove the remission to (1) Defenses derived from the nature of the
the payment to release him from responsibility towards obligation.
his co-debtors. (2) Defenses personal to, or which pertain to
share of, debtor sued.
This is to prevent fraud whereby the creditor remits the (3) Defenses personal to other solidary
share of a particular debtor. debtors.
This secures the equality and justice to the paying
debtor inasmuch as the payment benefits his co-debtors.

REMITTED CONSEQUENCES
DEBTOR
BEFORE liable if the paying
REMISSION debtor paid in full SECTION 5. - Divisible and Indivisible
AFTER not liable if the paying Obligations
REMISSION debtor paid in full
WHEN A CO- liable only for the co- ART. 1223
DEBTOR debtor’s share (1) Divisible Obligation - the object is
BECOMES capable of partial fulfillment.
INSOLVENT (2) Indivisible Obligation- the object is not
capable of partial fulfillment.

16
 Obligations not to do
Kinds of Division:
(1) Qualitative Division - based on quality, Indivisible Divisible
not on number or quantity of the things
which are the object of the obligation. Continuous Forbearance is not
fulfillment as to given continuous.
(2) Quantitative Division - based on period.
quantity rather than on quality.
(3) Ideal or Intellectual Division - one SECTION 6. - Obligations with a Penal
which exists only in the minds of the parties. Clause
Kinds of Indivisibility: ART. 1226.
(1) Legal Indivisibility. - specific provisions
of law declared as indivisible, obligations Principal Obligation Accessory Obligation
which are divisible in nature. Validity and Attached to principal
existence depends obligation.
(2) Conventional Indivisibility. - will of the upon another
parties makes as indivisible. obligation.
(3) Natural Indivisibility. - the nature of the
object or prestation does not admit of *Penal clause - accessory undertaking
division. attached to obligation for the purpose of:
ART. 1224. 1. As an obligatory force deterrent
If any one of the debtors does not comply with his against breach.
undertaking in the joint obligation, then it is converted 2. Substitute a penalty for indemnity and
into one for damages. payment of interests.

Effects of non-compliance Penal Clause Condition

Constitutes with an Does not constitute
1. Obligation converted into one for obligation. with an obligation.
damages. Demandable Not demandable
2. Creditor cannot ask for specific
performance or rescission.
Kinds of Penal Clause
Note: Only the debtor who fails to comply
will be responsible for the damages, if any. As to Origin: Legal - Conventio
provided -nal -
The above provision has already been explained under by law stipulatio
Article 1209. n of
parties
ART. 1225. As to its Purpose: Compensat Punitive -
ory - take punishmen
Indivisible Divisible Obligation the place of t of breach
Obligations damage
1.Definite things 1. Execution of certain As to Subsidiary Joint
number of work days. Demandability/E /Alternativ /Cumulat
2.Not susceptible 2. Accomplishment of ffect e - Penalty ive - can
of Partial work by metrical units. can only be enforce
Performance enforced. principal +
3.Law 3. Susceptible of penalty
partial performance.
4.Intended by Recovery of Damage and interests:
Parties
1. Stipulated by parties.
2. Recover legal interest upon refusal to pay
penalty by the debtor.
3. Recover damages caused by fraud.
17
 ART. 1227. 3. Penalty is contrary to good morals or
good customs
A debtor cannot evade from payment of his principal 4. Both parties are guilty of breach of
obligation by choosing to pay the penalty stipulated, contract
except when the debtor is EXPRESSLY granted 5. Breach of contract by the creditor
with the right to substitute the penalty for the principal 6. None of the parties committed any
obligation. – An obligation with penalty clause cannot willful or culpable violation of the
be turned to facultative obligation unless expressly agreement
stipulated in the contract.
ART. 1230. The nullity of the penal clause
The creditor cannot demand the stipulated fulfillment does not carry with it that of the principal
of the principal obligation and the penalty at the same obligation. The nullity of the principal
time, except obligation carries with it that of the penal
clause.
1. when the creditor was clearly given
the right to enforce both the principal  Because the penal clause is only an
obligation and penalty; accessory to the principal obligation, it
2. when the creditor has demanded cannot exist alone.
fulfillment of the obligation but
 If the penal clause is void, the
cannot be fulfilled due to the
principal obligation remains
a. debtor’s fault – creditor may
enforceable.
demand for penalty
b. creditor’s fault – he cannot claim
the penalty
c. fortuitous event – principal
obligation and penalty are
extinguished
ART. 1228. Proof of actual damages
suffered by the creditor is not necessary in
order that the penalty may be demanded.
Applicable only to the general rule in Art 1226 and
not to the exceptions.
ART. 1229.
JUDICIAL REDUCTION OF PENALTY
1. Principal obligation – partly
complied with by the debtor (but not
in indivisible obligation, because it is
tantamount to non-compliance)
2. Principal obligation – complied not
in accordance with the tenor of the
agreement
3. Penalty – iniquitous or
unconscionable
* INIQUITOUS OR
UNCONSCIONABLE – when it is
revolting to the conscience or common sense;
grossly disproportionate to the damages
suffered.
PENALTY NOT ENFORCEABLE:
1. Impossible performance of principal
obligation due to fortuitous events
2. Creditor prevented the debtor from
fulfilling the obligation

18
 PART II

QUESTIONS

19
 QUESTIONS

1. The source of obligations which is a rule of 6. The person in whose favor the obligation is
conduct, just and obligatory, promulgated by constituted
legitimate authorities for common good,
benefit and observance A. Obligor

A. Contracts B. Obligee

B. Quasi-contracts C. Passive subject

C. Delicts D. Debtor

D. Law
7. Synonymous to obligee

2. A juridical necessity to give, to do or not to 1. Creditor 3. Debtor

do
2. Active subject 4. Passive subject
A. Civil obligation
A. 1 and 2
B. Natural obligation
B. 1 and 4
C. Moral obligation
C. 2 and 3
D. Social obligation
D. 3 and 4

3. They give a right of action to compel their

8. The person who has the duty of giving,
performance
doing or not doing
A. Civil obligation
D. Obligee
B. Moral obligation
B. Obligor
C. Natural obligation
C. Active subject
D. Social obligation
D. Creditor

4. The obligee has a right to enforce, the

9. Synonymous to obligor
obligation against the obligor in a court of law
1. Creditor 3. Debtor
A. Civil obligation
2. Active subject 4. Passive subject
B. Moral obligation
A. 1 and 2
C. Natural obligation
B. 1 and 4
D. Social obligation
C. 2 and 3
5. This is based on equity and justice
D. 3 and 4
A. Civil obligation
C. Natural obligation
10. The object or subject matter of the
B. Moral obligation
obligation
D. Social obligation
A. Prestation
B. Vinculum

20
C. Active subject Second answer: no, the payment extinguished
the natural obligation.
D. Passive subject
C. Only the first is correct
11. The efficient cause or juridical tie why the
obligation exists D. Only the second is correct:
A. Active subject A. Both answers are correct
B. Passive subject B. Both answers are wrong
C. Prestation
D. Vinculum 16. The duty to pay taxes and to support one's
family are obligations arising from
B. Contracts
12. The duty not to recover what has
voluntarily been paid although payment was D. Delicts
no longer required
C. Quasi-contracts
D. Juridical obligation
A. Law
B. Natural obligation
C. Moral obligation
17. The obligation of husband and wife to
A. Civil obligation render mutual help and support arises from
A. Contract
13. The following are sources of obligations B. Law
derived from law, except
C. Quasi-contract
B. Quasi-contracts
D. Quasi-delict
L. Quasi-delicts
C. Delicts
18. A supports B, a minor because B's father
A. Contracts refuses to support B. The father is obliged to
reimburse a. The source of obligation is
D. Contract
14. Cannot be enforced by court action and
depend exclusively upon the good conscience B. Quasi-contract
of the debtor.
C. Delict
A. Civil obligation
D. Quasi-delict
D. Social obligation
B. Natural obligation
19. A juridical relation resulting from a lawful,
C. Moral obligation voluntary, and unilateral act and which has for
its purpose the payment of indemnity to the
end that no one shall be unjustly enriched or
benefited at the expense of another
15. A owes B P1,000. A, knowing that the
debt has prescribed nevertheless, still pays b. A. Contract
Can A be able to recover what he voluntarily
paid? B. Quasi-contract
First answer: yes, because b has no right to C. Delict
demand the payment effected by a

21
D. Quasi-delict A. Quasi-contract
20. When a person voluntarily takes charge of B. Quasi-delict
another's abandoned business or property
without the owner's authority where C. Negotiorum gestio
reimbursement must be made for necessary
D. Solutio indebiti
and useful expenses.
A. Quasi-contract
25. Omission of the diligence which is
B. Quasi-delict
required by the circumstances of person, place
C. Negotiorum gestio and time

D. Solutio indebiti A. Ignorance

B. Negligence

21. When something is received when there is C. Impotence

no right to demand it, and it was unduly
D. Insanity
delivered through mistake, the recipient has
the duty to return it.
A. Quasi-contract. 26. Unless the law or the stipulation of the
parties require another standard of care, every
B. Quasi-delict
person obliged to give something is also
C. Negotiorum gestio obliged to take care of it with the proper
diligence
D. Solutio indebiti
A. Of serving utmost care
B. Observing extraordinary care
22. - a quasi-contract is an implied
contract C. Of a father of a good family

- a defendant who is acquitted in a D. Observing ordinary diligence

criminal case is no longer liable civilly
A. True, true
27. Ordinary diligence is
B. True, false
A. Diligence of a good father of a family
E. False, true
B. Extraordinary diligence
D. False, false
C. Diligence required by law
D. Diligence of a father of a good family
23. Tort or culpa aquiliana is
A. Quasi-contact
23. The creditor has a right to the fruits of the
B. Quasi-delict thing

C. Negotiorum gestio A. From the time the obligation to deliver it

arises
D. Solutio indebiti
B. From the time the fruits have been
delivered
24. A fault or act or omission of care which C. From the time there is meeting of the
causes damage to another, there being no pre- minds
existing contractual relations between the
parties D. From the perfection of the contract

22
29. From the time the fruits have been 34. A possessor of a thing as an owner retains
delivered, the creditor shall require possession no longer as an owner, but in
some other capacity
A. Real right
A. Traditio simbolica
B. Personal right
B. Traditio longa-manu
C. Moral right
C. Traditio brevi-manu
D. Natural right
D. Traditio constitutom possesium

30. If a sells to b a fountain pen, the giving by

a to b of the fountain pen is 35. The opposite of brevi-manu
A. Actual tradition A. Longa-manu
B. Constructive delivery B. Simbolica
C. Symbolical tradition C. Constitutom possessorium
D. Traditio longa-manu D. Quasi-tradition

Items 31-35 a kind of constructive delivery 36. If a thing is capable of particular

whereby: designation
31. There is delivery when the keys of a A. Generic
warehouse are given
B.. Specific
A. Traditio simbolica
C. Indeterminate
B. Traditio longa-manu
D. Indeterminable
C. Traditio brevi-manu
D. Traditio constitutom possessorium
37. If a thing refers to a class, to a genus and
cannot be pointed out with particularity.
32. There is delivery by mere consent or the A generic
pointing out of the object.
B. Specific
A. Traditio simbolica
C. Determinate
E. Traditio brevi-manu
D. Indeterminable
B. Traditio longa-manu
D. Traditio constitutom possessorium
38. A wife was about to deliver a child. Her
parents brought her to the hospital. Who
should pay the expenses for medical
33. A possessor of a thing not as an owner, attendance?
becomes the possessor as owner
Answer 1- the husband, because it is his duty
A. Traditio simbolica to support his wife and support includes
medical attendance.
B. Traditio longa-manu
Answer 2- the parents, because they were the
C. Traditio brevi-manu
persons who brought the "wife" to the
D. Traditio constitutom possessorium hospital

23
A. Both answers are correct Answer 2-if there is a term or condition, then
from the moment the term arrives or the
B. Both answers are not correct condition happens
C. Only the first is correct A. True, true
D. Only the second is correct B. True, false
C. False, true
39. The following are kinds of fruits of an D. False, false
obligation, except
B. Industrial
44. A is obliged to give B 16 kilos of sugar.
A natural Which of the following is not correct
C. Civil A. B can demand that a obtain the sugar and
deliver it to him
D. Penal
B. B can just buy 10 kilos of sugar and charge
the expenses to a
40. Spontaneous products of the soil and the
C. A can insist on just paying b damages or
offspring and other products of animals
the monetary value of the sugar
A. Natural
D. B may require another person to deliver
B. Industrial the sugar and charge the expenses to a

C. Civil
D. Penal 45. Where demand by the creditor shall be
necessary in order that delay may exist
A. When time is of the essence of the contract
41. Products of the soil through cultivation or
intervention of human labor. 5. When demand would be useless

A. Natural C. When the obligor has expressly

acknowledged that he is in default
B. Industrial
D. When the obligor requested for an
C. Civil extension of time
D. Penal

46. Debtor's default in real obligation

42. Fruits arising out of contracts-like rental A. Mora accipiendi
payments
B. Mora solveudi ex-re
A. Natural
C. Mora solvendi ex persona
B. Industrial
D. Compensatio morae
C. Civil
D. Penal
47. Debtor's default in personal obligation
A. Mora accipiendi
43. When does the obligation to deliver arise?
B. Mora solvendi ex-re
Answer 1-if there is no term or condition,
then from the perfection of the contract C. Mora solvendi ex persona

24
D. Compensatio morae 53. Damages awarded to set an example
A. Exemplary
48. Default on the part of the creditor B. Liquidated
A. Mora accipiendi C. Nominal
B. Solvendi ex-re D. Moral
C. Mora solvendi ex persona
D. Compensatio morae 54. When the exact amount of damage cannot
be ascertained
A. Exemplary
49. Default on the part of both parties
B. Lıquidated
A. Mora accipiendi
C. Temperate
B. Mora solvendi ex-re
D. Moral
C. Mora solvendi ex persona
D. Compensatio morae
55. Damages predetermined beforehand
A. Temperate
50. A borrowed money from B payable on
Dec. 10, 2006. If a failed to pay on due date. B. Liquidated
Will A be in delay?
C. Actual
A. Yes, because there is stipulation as regards
the due date. D. Moral

B. Yes, if the obligation is in writing.

C. No, because demand has not been made by 56. A obliged himself to deliver to b the
b. following:

D. No, if A has the money to pay b. 1) 2007 slng-it Yamaha organ

2) Malagona passenger jeepney with engine
no. 69 and chasis no. 88
51. Damages awarded for mental and physical
anguish First statement- in case a failed to deliver the
2007 Yamaha organ, the court may compel a
A. Moral to deliver the 2007 Yamaha organ plus
lemages
B. Exemplary
Second statement-in case a failed to deliver
C. Nominal the jeepney, the court may compel a to deliver
the jeepney plus damages
D. Temperate
A. True, true
B. True, false
52. Damages awarded to vindicate a right
C. False, true
A. Liquidated
D. False, false
B. Actual
C. Nominal
D. Exemplary

25
57. I. If a person obliged to do something fails
to do it, the same shall be executed at his cost.
II. Those who in the performance of their
obligations are guilty of fraud, negligence, or
delay and those who in any manner
contravene the tenor thereof, are liable for
damages.
A. True, true
B. True, false
C. False, true
D. False, false
58. I. Responsibility arising from fraud is
demandable in all obligations. Any waiver of
an action for fraud is void.
II. If the law or contract does not state the
diligence which is to be observed in the
performance of an obligation that which is
expected of a father of a good family shall be
required.
A. True, true
B. True, false
C. False, true
D. False, false
59. I. The receipt of a later installment of a
debt without reservation as to prior
installments, shall give rise to a rebuttable
presumption that such installments have been
paid
II. If a taxpayer pays his income tax liability
for the current year, there is a presumption
that tax liability for the previous year has been
paid.
A. True, true
B. True; false
C. False, true
D. False, false
60. With regard to the right as to the fruits of
the thing, which is not correct?
A. If the obligation is subject to a suspensive
condition, the obligation to deliver arises from
the moment the condition happens.
B. If the obligation is subject to a suspensive
period, the obligation to deliver arises upon
the expiration of the term or period
C. If there is no condition or term for its
fulfillment, the obligation to deliver arises
from the perfection of the contract or
creation of the obligation
D. If the obligation arises from a contract of
sale, the vendor has a right to the fruits of the
thing from the time the obligation to deliver
arises.
61. A is obliged to deliver his only car to B on
November 20, 2007. If a does not deliver, and
on November 22, 2007, a typhoon destroys
the car
A. A is not liable because the obligation is
extinguished
B. A is liable because he is in delay
C. A and B will divide the loss equally
D. A's obligation is converted into a monetary
obligation
62. I. When what is to be delivered is a
determinate thing, the creditor may compel
the debtor to make the delivery and if the
debtor refuses, the creditor may ask that the
obligation be complied with at the expense of
the debtor.
II. The obligation to give a determinate thing
includes that of delivering all its accessions
and accessories, even though they may not
have been mentioned.
A. True, true
B. True, false
C. False, true
D. False, false
63. What is the basis of the liability of a
school when a student is stabbed inside the
campus by a stranger in the school?
26
A. Contracts A. Accion reinvindicatoria
B. Quasi-contracts B. Accicn pauliana
C. Delicts C. Accion subrogatoris
D. Quasi-delicts D. Accion quanti-minoris

64. The following except one, are included in 69. A borrower agreed, that in case of non-
civil liability. The exception is payment of his debt, to render services as a
servant. Which of the following is not
A. Restitution correct?
B. Reparation A. If the services will be rendered in
satisfaction of the debt, the stipulation is
C. Indemnification D. Starvation
valid.
B. If the services will be "for free", the
65. The thing itself shall be restored, as a rule stipulation is void for being contrary to law
and morals.
A. Restitution
C. If the services will not be gratuitous,
B. Reparation specific performance of the service will be the
proper remedy in case of non-compliance.
C. Indemnification
D. Should there be a valid stipulation as
D. Starvation regards the rendition of services, an action for
damages should be brought in case of non-
compliance.
66. The court determines the amount of
damage taking into consideration the price of
the thing and its sentimental value to the 70. A ordered b, a 10 year old boy to climb a
injured person high and slippery mango tree with a promise
of giving him part of the fruits. B was
A. Restitution
seriously injured when he fell while climbing
B. Reparation the tree. Is A liable?

C. Indemnification A) first answer - no, because no person shall

be respensible for fortuitous events.
D. Starvation
B) second answer - yes, because a was
negligent in making the order without taking
due care to avoid a reasonable foreseeable
67. The consequential damages suffered by injury to b.
the injured person and those suffered by his
family or third person by reason of the act B. True, false
A. Restitution A. True, true
B. Reparation C. False, true
C. Indemnification D. False, false
D. Starvation

71. A pays for B's transportation fare, without

b's knowledge and later discovers that b was
68. Action to impugn or rescind acts or entitled to half- fare. Which is not correct?
contracts done by the debtor to defraud the
creditors A. A can recover the half-fare from B

27
B. A can recover the half-fare from the carrier
C. A can recover ½ from b and ½ from the
carrier
D. A can recover half-fare from B only
72. A borrowed P100, 000 from B. The loan
was secured by a mortgage of A's land in
favor of B. Without the knowledge of A, C
paid B the sum of P100, 000 for A's debt. As
a result
A. C may foreclose the mortgage on A's land
if A cannot pay
B. C cannot claim reimbursement from A in
as much as the payment was made without
the knowledge of A
C. C can recover the amount from B in case A
refuses to reimburse C
D. The obligation of A to B was extinguished
but A should reimburse c the amount of
p100, 000 because he benefited from the
payment
73. When the debtor of a debtor is ordered
not to pay the latter so that preference would
be given to the latter's-creditor.
A. Garnishment
B. Interpleader
C. Injunction
D. Attachment
74. A obtained a loan from B bank. The loan
was embodied in several promissory notes. As
security the borrower executed a chattel
mortgage on his standing crops. The said
crops were however subsequently destroyed
by typhoon "rosing". Is A still liable for the
loan despite the destruction of the crops by a
fortuitous event?
1st answer yes, the obligation of A was to
deliver, a generic thing-money.
2nd answer no, the obligation was to deliver
determinate things-the standing crops.
A. True, true
B. True, false
C. False, true
D. False, false
75. A sold a half -interest in his specific car to
B. It was agreed that the price to be paid by B
would be used in installing a new engine on
the car. Later, the car was destroyed by a
fortuitous event. Is B's obligation to pay the
price extinguished?
1st answer yes, there is no more use of
installing a new engine since the car has
already been destroyed by a fortuitous event.
2nd answer no, B must still pay because his
obligation to pay is generic.
B. True, false
A. True, true
C. False, true
D. False, false
76. I. A commits the crime of theft and is
asked to return the car to its owner B. If
before the car delivered to b is destroyed by a
fortuitous event, is A's liability extinguished?
II. Using above statement, A had previously
asked the owner to accept the car, but the
owner without any justifiable reason refuses
to accept the car, and it is destroyed by a
fortuitous even. Is A's liability extinguished?
A. No, yes
C. Yes, no
A. Yes, yes
D. No. No
77. I. There is no delay in an obligation not to
do something
II. Solutio indebiti and negotiorum gestio are
implied contracts
A. True, true
B. True, false
C. False, true
28
D. False, false A. Civil obligation
B. Natural obligation
78. I. Consent of the parties is required in C. Moral obligation
quasi-contract.
D. Conditional obligation
II. The creditor acquires real rights over the
thing from the time the obligation to deliver
arises
83. If A pays a debt that has prescribed:
A. True, true
1. Not knowing it has prescribed, a can
B. True, false recover on the ground of undue payment

C. False, true 2. Knowing it has prescribed. A cannot

D. False, false
79. The creditor has a right to the fruits of the
thing from the time
A. The thing is delivered
B. The fruits are delivered
C. The obligation to deliver the thing arises
D. The sale is perfected
80. The buyer has the right to the fruits of the
thing from the time
A. The thing is delivered
B. The fruits are delivered
C. The obligation to deliver the thing arises
D. The sale is perfected
81. Which is not considered as quasi-contract?
A. Solutio indebiti
B. Negotiorum gestio
C. When the third person with the knowledge
of the debtor, pays the debt
D. Reimbursement due the person who saved
property during fire or typhoon without the
knowledge of the owner
recover for this would be a case of natural
obligation
A. Both 1 and 2 are true
B. Only t is true
C. Only 2 is true
D. Both i and 2 are false
84, on June 24, 2007, A is obliged to give B
his specific car. There was no delivery until
June 30 when the garage of the car collapsed
due to heavy rain and strong winds of
typhoon pining, and the car was totally
destroyed. Is a still liable?
A. No, even if A was in default, he could
plead impossibility of performance
B. Yes, because the contract is perfected
C. No, because there was no demand by B to
deliver the car
D. Yes, the obligation to deliver the car is
changed to pay the equivalent value because B
is in legal delay
85. This obligation is demandable at once
when it
A. Has a resolutory condition
B. Has a suspensive condition
C. Is with a term ex-die
D. Has a period

82. No longer enforceable by court action but

is binding on the party who oblige with it in
conscience is

29
86. When the debtor binds himself to pay D. Of third persons
when his means permit him to do so, the
obligation shall be deemed to be with a
A. Resolutory period B. Suspensive condition 91. This is a valid obligation
C. Potestative condition D. Period
A. A will give B P100,000 if B will kill C
B. A will give B P1,000,000 if B will agree to
87. A promised to give B his Volvo car if B be the mistress of A
passes the CPA board exams. Pending the
A. A will give B P10,000 if B can make C rise
results of the exams the car is destroyed by a
from the dead
fortuitous event without any fault on the part
of A. As a result D. A will give B P1,000 if B will not pose
nude in a painting session.
A. The obligation of a is extinguished
6. The obligation of a is converted into
monetary obligation 92. Where two or more prestations have been
agreed upon but only one is due, the
C. The obligation of a will be equitably
obligation is
reduced
A alternative
D. A will have to give a another car of
equivalent value B. Facultative
C. Conjoint
88. A period with a suspensive effect D. Solidary
A. I will support you beginning January 1 of
next year
93. Using the preceding number, the right of
B. I will support you until January 1 of next choice belongs
year
B. To the creditor
C. I will support you if a dies of tb
D. To third person
D. I will support you if a marries b
C. To both debtor and creditor
A. To the debtor
89. A period with a resolutory effect
A. I will support you beginning January 1 of
next year 94. A is obliged to give B, at A's option either
object no. I, object no. 2, or object no. 3. If all
B. I will support you until a dies object were lost through A's fault, which is
correct?
C. I will support you if a dies
A. The value of the first thing lost plus
D. I will support you if a dies of TB
damages must be given to B.
B. The value of the last thing lost plus
90. Whenever in an obligations period is damages must be given to B.
designated, it is presumed to have been
C. The value of any of the things lost plus
established for the benefit
damages must be given to B.
A of both the creditor and debtor
D. The obligation is extinguished
B. Of the creditor only
C. Of the debtor only

30
95. I. Using the preceding number, if objects
nos. 1 and 2 were destroyed by a fortuitous
event and later object no. 3 is destroyed by
A's fault, A would still be liable.
II. Using the preceding number, if objects
nos. 1 and 2 were destroyed by A's fault and
later object no. 3 is lost by a fortuitous event,
A would still be liable.
A true, true
B. True, false
C. False, true
D. False, false
96. A is obliged to give B either objects no.
Or no. 2 or no. 3 at B's option. Before B
communicated his choice to A, object no. 1
had been destroyed, thru A's fault and object
no. 2 had been destroyed by a fortuitous
event. B may
A. Demand object no. 3 only as it is still
available
B. Demand the price of object no. 1 only plus
damages because it was destroyed by a's fault
C. Demand the value of object no. 2 as the
right of choice belongs to B
D. Demand either obiect no. 3 or the price of
object no. 1 plus damages
97. Any of the debtors is bound to render
compliance of the entire obligation.
A. Alternative
B. Facultative
C. Joint
D. Solidary
98. In a joint obligation, joint means any of
the following, except
A. Pro-rata
B. Proportionate
C. Mancomunada simple
D. Individually and collectively
99. Lu facultative obligations, if substitution
has been made, which of the following is
false?
A. The obligation is extinguished
B. The loss of the original prestation is
immaterial
C. The obligation is converted into a simple
obligation
D. The obligation ceases to be facultative.
100. Using the preceding number, and the
substitute is lost by a fortuitous event, which
is true?
A. The obligation is extinguished
B. The debtor is liable for damages
C. The original prestation must be given
D. The debtor must give another object
which is equally satisfactory
101. Using the preceding number, but the
substitute is lost due to debtor's fault, which is
true?
A. The obligation is extinguished
B. The debtor is liable for damages
C. The original prestation must be given
D. The debtor must give another object
which is equally satisfactory
102. Instances where the law imposes solidary
liability, except
A. Obligations arising from tort
B. Obligations of bailees in commodatum
C. Liability of principals, accomplices and
accessories
D. Liability of partners arising out of a
contract
103. This will result to a solidary liability
A. Vitiated consent on the part of one of the
debtors
31
B. Insolvency of one of the debtors
C. Default on the part of one of the debtors
D. Quasi-delict committed by one of the
partners acting in the ordinary course of
business
. Where only one prestation has been agreed
upon, but the obligor may reader another in
substitution the obligation is
A. Alternative
B. Facultative
C. Conjoint
D. Solidary
105. Where two or more prestations have
been agreed upon, and all of them must be
pertormed the obligation is:
A. Alternative
B. Facultative
C. Conjoint
D. Solidary
106. A and B are solidary debtors of C and D.
Solidary creditors, to the amount of P1,000. C
can demand
A. P1,000 from A or P1,000 from B
B. P1,000 from A and P1,000 from B
C. P500 from A or P500 from B
D. P500 from A and P500 from B
107. A and B are solidary debtors of C and D.
Solidary creditors, to the amount of P1,000. C
can demand
A. P1,000 from A or p1,000 from B
B. P500 from A or p500 from B
C. P500 from A and p500 from B
D. P250 from A and p250 from B
108. A and B are joint debtors of C and D,
solidary creditors to the amount of p1,000. C
can demand
A. P1,000 from A or P1,000 from B
B. P500 from A or P500 from B
C. P500 from A and P500 from B
D. P250 from A and P250 from B
109. A and B are joint debtors of C and D.
Joint creditors, to the amount of P1,000. C
can demand
A. P500 from A or P500 from B
B. P250 from A or P250 from B
C. P250 from A and P250 from B
D. P500 from A and P500 from B
110. This is synonymous to joint obligation
A. Joint and several
B. In solidum
C. Individually and collectively
D. Mancomunada simple
111. This is synonymous to solidary obligation
A. Pro-rata
B. Mancomunada
C. Proportionate
D. Juntos o separadamente
112. A, b and c are joint debtors of d for
p3,000. If a is insolvent, how much should b
pay d?
A. P1,000.
B. P1,500
C. P2,000
D. P3,000
32
113. In 2007, A, B and C bound themselves in
solidum to give D p9,000 subject to the
following
Conditions: A will pay in 2007, B, if D passes
the 2008 CPA board exams and C will pay in
2009. In 2007, how much can D demand
from C?
117. A, B and C are solidary debtors of D in
the amount of P3,000 but A was incapacitated
to give his consent as he was a minor. If D
sues B, how much will B be liable for?
A. P3,000
B. P2,000

A. P9,000 C. P1,000

B. P6,000 D. P0

C. P3,000
D. P0 118. A is indebted to solidary creditors B, C,
and D for P90,000. Without the knowledge of
B and C, d remitted the obligation of a as a
result
114. A, B and C are solidary debtors of D for
p3,000. D remitted C's share. A therefore paid A. The obligation of a to pay P90,000 is
later extinguished
P2,000. A can recover reimbursement from B 6. The obligation is not extinguished because
in the amount of there is no consent from band C
A. P1,000 C. The obligation is extinguished only up to
P30,000
B. P1,500
D. The obligation is extinguished up to
C. P500 P60,000
D. P0

119. A, B and C borrowed P6,000 from D and

E, payable in 3 months with a giving in pledge
115. Using the preceding number, if B is
her diamond ring as security for the amount
insolvent. A can recover from c the amount
borrowed. How much can E collect from C?
of
A. P1,000
A. P1,000
B. P2,000
B. P1,500
C. P3,000
C . P500
D. P6,000
D. P0

120. A is obliged to give B her college ring. If

116. A, B & C are solidary debtors of d in the
she fails to do so, she must give P10,000. This
amount of p1,000. D remitted the entire
is
obligation when A offered to pay. A can
demand reimbursement from B in the amount A. Alternative obligation
of
B. Facultative obligation
A. P1,000
C. Conjoint obligation
B. P500
D. Obligation with a penal clause
C. P333
D. P0

33
121. Where the penalty takes the place of
indemnity for the damages and for the
payment of interest
A. When there is stipulation to the effect that
damages or interest may still be recovered,
despite the presence of the penalty clause
B. When the debtor refuses to pay the penalty
imposed in the obligation
C. When the debtor is guilty of fraud or dolo
in the fulfilment of the obligation
D. When there is breach of the obligations
122. This is an obligation with a resolutory
condition
A. I'll give you P10,000 if you pass the 2006
CPA board examination
B. I'll give you my car now, but should you
fail in any of your subjects, your ownership
will cease and it will be mine again
C. I'll give you P10,000 on December 31,
2006
D. I'll give you P10,000 if a dies of TB
123. I. If the condition is potestative on the
part of the debtor, the obligation is void.
II. If the condition is potestative on the
part of the creditor the obligation is valid.
A. True, true
B. True, false
C. False, true
D. False, false
124. A owns a house rented by b. A sold the
house to C where C agreed to pay the balance
of the purchase price as soon as B leaves the
promises. It was further agreed that c will take
care of seeing to it that B vacates the house.
Which is correct?
A. The contract is void because it is
potestative on the part of C
B. The contract is void because the consent of
B was not obtained
C. The contract is valid because the condition
is mixed
D. The contract is valid if B is willing to
vacate the premises
125. I. The condition that some event
happens at a determinate time shall extinguish
the obligation as soon as the time expires or it
become indubitable that the event will not
take place.
II. The condition that some event will not
happen at a determinable time shall render the
obligation effective from the moment the
time indicated has elapsed, or it has become
evident that the event cannot occur
A. True, true.
b. True false
C. False, true
D. False, false
126. I. A father promised to give his son a car
if the son will marry B this year. If by the end
of the year, B is already dead or the son has
not married B, the obligation to give a car is
effective and demandable.
II. A father promised to give his daughter
a car if the daughter will not marry her
boyfriend earlier than December 31, 2006. If
by December 31, 2006, the daughter has not
yet married her boyfriend, or if prior thereto,
her boyfriend has died, the obligation is
extinguished.
A. True, true
B. True, false
C. False, true
D. False, false
127. I. Obligations with a resolutory period
take effect at once, but terminate upon arrival
of the day certain.
II. Obligations with a resolutory condition
take effect at once, but terminate upon
happening of the condition.
A. True, true
34
B. True, false
C. False, true
D. False, false
128. A borrowed money from b and pledged
her ring as security. It was agreed that A was
to pay the money loaned with interest at the
end of our year. Before the expiration of the
one-year period
A. A may compel B to accept her payment
B. A may be allowed to pay B, if B consents
C. A may compel B to accept her payment
because the period is deemed for the benefit
of A
D. B may refuse A's payment as the period is
deemed for the benefit of B
129. The debtor shall lose every right to make
use of the period, except
A. When after the obligation has been
contracted, he becomes insolvent, unless he
gives a
Guaranty or security for the debt
B. When he does not furnish to the creditor
the guaranties or securities which he has
promised
C. When through fortuitous events or by his
own acts the guaranties or securities have
been
Impaired, unless he immediately gives new
ones equally satisfactory
D. When the debtor violates any undertaking
in consideration of which the creditor agreed
to the period.
130. I. "we promise to pay" when there are
two or more signatures- joint liability
II. "I promise to pay" when there are two
or more signatures- solidary liability
A. True, true
B. True, false
C. False, true
D. False, false
131. A obliged himself to pay B P100,000 in
30 days plus a penalty of P10,000. If A fails to
pay
Obligation in due time. A failed to pay the
obligation in 30 days, B can demand from A
A. The principal of P100,000 plus P10,000
penalty
B. The principal of P100,000 plus P10,000
penalty plus legal interest
C. The principal of P100,000 plus P10,000
penalty, plus legal interest, plus damages
D. The principal of P100,000 plus legal
interest, plus damages
132. The creditor is entitled to recover
damages and interest in addition to the
penalty stipulated
A) when the debtor refuses to pay the penalty
B) when the debtor is guilty of fraud in the
fulfillment of the obligation
A. True, true
B. True, false
C. False, true
D. False, false
133. Which of the following is a civil
obligation?
A. X obliges himself to pay Y P10 000 on
October 30, 2009.
B. A is a debtor of B for P20 000 due on
September 30, 1995.
C. The obligation of a husband and wife
to observe fidelity.
D. The obligation of a catholic to hear
mass every Sunday.
35
134. Specific performance may not be C. Symbolical tradition
possible in this civil obligation
D. Traditio longa-manu
A. A, a painter, obliges himself to paint
the portrait of B on April 9, 2009

B. C, a farmer, obliges himself to give his
only cow to D on February 14, 2009
C. E, a veterinarian, obliges himself to
give one of his dogs to F on May 1, 2009
D. G, a registrar of deeds, obliges himself
to effect registration of H’s parcel of land on
138. A wife was about to deliver a child. Her
parents brought her to the hospital. Who
should pay the expenses for medical
attendance?
Answer 1 – The husband, because it is his
duty to support his wife and support includes
medical attendance.

February 28, 2009. Answer 2 – The parents, because they were

the persons who brought the “wife” to the
hospital.
135. A owes B P 1000. A, knowing that the A. Both answers are correct.
debt has prescribed, nevertheless, still pays B.
Can A recover what he voluntarily paid? B. Both answers are not correct.

First Answer Yes, because B has no C. Only the first is correct.

right to demand the payment effected by A.
D. Only the second is correct.
Second Answer No, the payment
extinguished the natural obligation.

A. Both answers are correct. 139. A is obliged to give B 10 kilos of sugar,

which of the following is not correct?
B. Both answers are wrong.
A. B can demand that A obtain the sugar
C. Only the first is correct. and deliver it to him.

D. Only the second is correct. B. B can just buy 10 kilos of sugar and
charge the expense to A.

C. A can insist on just paying B damages

136. A supports B, a minor, because B’s or the monetary value of the sugar.
father refuses to support B. The father is
obliged to reimburse A. The source of D. B may require another person to
obligation is deliver the sugar and charge the expenses to
A.
A. contracts C. delicts

B. quasi-contracts D.quasi-delicts 140. A borrowed money from B payable on

December 10, 2008. If A failed to pay on due
date, will A be in delay?
137. If A sells to B a fountain pen, the giving A. Yes, because there is stipulation as
by A to B of the fountain pen is regards the due date.
A. Actual tradition B. Yes, if the obligation is in writing.
B. Constructive delivery C. No, because demand has not been
made by B.

36
D. No, if A has the money to pay B. Second Answer Yes, because A is
negligent in making the order without taking
due care to avoid a reasonable foreseeable
141. A obliged himself to deliver to B the injury to B.
following: A. True; true
1) 2008 Sing-It Yamaha Organ B. True; false
2) Magalona passenger jeepney with C. False; true
engine No. 69 and chasis No. 88
D. False; false
First Statement In case A failed to deliver the
2008 Yamaha Organ, the court may compel A
to deliver the 2008 Yamaha Organ plus
damages 144. A pays for B’s transportation fare,
without B’s knowledge and later discovers
Second Statement In case A failed to that B was entitled to half-fare. Which is not
deliver the jeepney, the court may compel A correct?
to deliver the jeepney plus damages.
A. A can recover the half-fare from B.
A. True; true
B. A can recover the half-fare from the
B. True; false carrier.

C. False; true C. A can recover the ½ from B and ½

from the carrier.
D. False; false
D. A can recover half-fare from B only.

142. A is obliged to deliver his only car to B

on November 20, 2009. If A does not deliver, 145. A borrowed P 100 000 from B. the loan
and on November 22, 2009, a typhoon was secured by a mortgage of A’s land in
destroys the car. favor of B. Without the knowledge of A, C
paid B the sum of P 100 000 for A’s debt. As
A. A is not liable because the obligation a result
is extinguished.
A. C may foreclose the mortgage on A’s
B. A is liable because he is in delay. land if A cannot pay.
C. A and B will divide the loss equally. B. C cannot claim reimbursement from
D. A’s obligation is converted into a A in as much as the payment was made
monetary obligation. without the knowledge of B.

C. C can recover the amount from B in

143. A ordered B, a 10 year old boy to climb
a high and slippery mango tree with a promise
to give him part of the fruits. B was seriously
injured when he fell while climbing the tree. Is
A liable?
case A refuses to reimburse C.
D. The obligation of A to B was
extinguished but A should reimburse C the
amount of P 100 000 because he was
benefited by the payment.

First Answer No, because no person

shall be responsible for fortuitous events. 146. A obtained a loan from B bank. The
loan was embodied in several promissory

37
notes. As security the borrower executed a refuses to accept the car, and it is destroyed
chattel mortgage on his standing crops. Said by a fortuitous event, Is A’s liability
crops were however subsequently destroyed extinguished?
by typhoon “Rosing”. Is A still liable for the
loan despite the destruction of the crops by a A. Yes; Yes
fortuitous event? B. No; Yes
1st Answer Yes, the obligation of A was to C. Yes; No
deliver a generic thing – money.
D. No; No
2nd Answer No, the obligation was to
deliver determinate things – the standing
crops.
149. If A pays a debt that has prescribed
A. True; true
1) Not knowing it has prescribed, A can
B. True; false recover on the ground of undue payment.

C. False; true 2) Knowing it has prescribed, A cannot

recover for this would be a case of natural
D. False; false obligation.

A. Both 1 and 2 are true

147. A sold a half-interest in his specific car B. Only 1 is true
to B. It was agreed that the price to be paid by
B would be used in installing a new engine on C. Only 2 is true
the car. Later, the car was destroyed by a
D. Both 1 and 2 are false
fortuitous event. Is B’s obligation to pay the
price extinguished?

1st Answer Yes, there is no more use of 150. On June 24, 2009 A is obliged to give B
installing a new engine since the car has his specific car. There was no delivery until
already been destroyed by a fortuitous event. June 30 when the garage of the car collapsed
due to heavy rain and strong winds of
2nd Answer No, B must still pay because
Typhoon Ondoy, and the car was totally
his obligation to pay in generic.
destroyed. Is A still liable?
A. True; true
A. No, even if A was in default, he could
B. True; false plead impossibility of performance.

C. False; true B. Yes, because the contract is perfected.

D. False; false C. No, because there was no demand by

B to deliver the car.

D. Yes, the obligation to deliver the car is

148. I A commits the crime of theft changed to pay the equivalent value because B
and is asked to return the car to its owner B. is in legal delay.
If, before the car is delivered to B it is
destroyed by a fortuitous event, Is A’s liability
extinguished?
151. A promise to give B his Volvo car if B
II Using above statement, A had passes the CPA Board Exams. Pending the
previously asked the owner to accept the car, results of the exams, the car is destroyed by a
but the owner without any justifiable reason

38
fortuitous event without any fault on the part 155. A is obliged to give B, at A’s option
of A, As a result either object No. 1, Object No. 2, or Object
No. 3. If all objects were lost thru A’s fault,
A. The obligation of A is extinguished. which is correct?
B. The obligation of A is converted into A. The value of the first thing lost plus
monetary obligation. damages must be given to B.
C. The obligation of A will equitably B. The value of the last thing lost plus
reduce. damages must be given to B.
D. A will have to give B another car of C. The value of any of the things lost
equivalent value. plus damages must be given to B.

D. The obligation is extinguished.

152. A period with a suspensive effect.

A. I will support you beginning January 1 156. I Using the preceding number, if
of next year. objects nos. 1 1and 2 were destroyed by a
B. I will support you until January 1 of fortuitous event and later object No. 3 is
next year. destroyed by A’s fault, A would still be liable.

C. I will support you if A dies of TB. II Using the preceding number, if

objects nos. 1 1and 2 were destroyed by A’s
D. I will support you if A marries B. fault and later object No. 3 is destroyed by
fortuitous event, A would still be liable.

A. True; true C. False; true

153. A period with a resolutory effect.
B. True; false D. False; false
A. I will support you beginning January 1
of next year.

B. I will support you until A dies.
C. I will support you if A dies.
D. I will support you if A dies of TB.
154. This is a valid obligation.
A. A will give B P 100 000 if B will kill C.
B. A will give B P 1 000 000 if B will
agree to be the mistress of A.
C. A will give B P 100 000 if B can make
C rise from the dead.
D. A will give B P 1000 if B will not pose
nude in a painting session.
157. A is obliged to give B either objects No.
1 or No. 2 or No. 3 at B’s option. Before B
communicated his choice to A. object No. 1
had been destroyed, thru A’s fault and object
No. 2 had been destroyed by a fortuitous
event. B may
A. Demand object No. 3 only as it is still
available.
B. Demand the price of object No. 1
only plus damages because it was destroyed by
A’s fault.
C. Demand the value of object No 2 as
the right of choice belongs to B.
D. Demand either object No. 3 or the
price of object No. 1 plus damages.

39
158. A and B are solidary debtors of C and A. P 1000 C. P 2000
D, solidary creditors, to the amount of P 1
000. C can demand B. P 1500 D. P 3000

A. P 1000 from A or P 1000 from B

B. P 1000 from A and P 1000 from B 163. In 2007, A, B and C bound themselves
in solidum to give D P 9000 subject to the
C. P 500 from A or P 500 from B following conditions: A will pay in 2007, B, if
D passes the 2008 CPA board exams and C
D. P 500 from A and P 500 from B will pay in 2009. In 207, how much can D
demand from C?

159. A and B solidary debtors of C and D, A. P 9000 C. P 3000

joint creditors, to the amount of P 1 000 – C B. P 6000 D. P0
can demand

A. P 1000 from A or P 1000 from B

164. A, B and C are solidary debtors of D for
B. P 500 from A or P 500 from B P 3000. D remitted C’s share. A therefore
C. P 500 from A and P 500 from B paid later only P 2000. A can recover
reimbursement from B in the amount of
D. P 250 from A and P 250 from B
A. P 1000 C. P 500

B. P 1500 D. P0
160. A and B joint debtors of C and D,
solidary creditors, to the amount of P 1000 –
C can demand 165. Using the preceding number, if B is
A. P 1000 from A or P 1000 from B insolvent, A can recover from C the amount
of
B. P 500 from A or P 500 from B
A. P 1000 C. P 500
C. P 500 from A and P 500 from B
B. P 1500 D. P0
D. P 250 from A and P 250 from B

166. A, B and C are solidary debtors of D for

161. A and B are joint debtors of C and D, P 1000. D remitted the entire obligation when
joint creditors, to the amount of P 1000 – C A offered to pay. A can demand
can demand reimbursement from B in the amount of

A. P 500 from A or P 500 from B A. P 1000 C. P 333

B. P 250 from A or P 250 from B B. P 500 D. P0

C. P 250 from A and P 250 from B

D. P 500 from A and P 500 from B 167. A, B and C are solidary debtors of D for
P 3000 but A was incapacitated to give his
consent as he was a minor. If D sues B, how
162. A, B and C are joint debtors of D for P much will B be liable for?
3000. If A is insolvent, how much should B
A. P 3000 C. P 1000
pay D?

40
B. P 2000 D. P 0 172. This is an obligation with a resolutory
obligation.

A. I’ll give you P 10 000 if you pass the

168. Using the preceding number, if D sues 2009 CPA board examination.
A, how much will A be liable for?
B. I’ll give you my car now, but should
A. P 3000 C. P 1000 you fail in any of your subjects, your
B. P 2000 D. P 0 ownership will cease and it will be mine again.

C. I’ll give you P 10 000 on December

31, 2009.
169. A is indebted to solidary creditors B, C,
and D, for P 90 000. Without the knowledge D. I’ll give you P 10 000 if A dies of TB.
of B and C, D remitted the obligation of A, as
a result,
173. A owns a house rented by B. A sold the
A. The obligation of A to pay P 90 000 is house to C where C agreed to pay the balance
extinguished. of the purchase price as soon as B leaves the
B. The obligation is not extinguished premises. It was further agreed that C will take
because there is no consent from B and C. care of seeing to it that B vacates the house.
Which is correct?
C. The obligation is extinguished only up
to P 30000. A. The contract is void because it is
potestative on the part of C.
D. The obligation is extinguished up to P
60 000. B. The contract is void because the
consent of B was not obtained.

C. The contract is valid because the

170. A, B and C borrowed P 6000 from D condition is mixed.
and E, payable in 3 months with A giving in
pledge her diamond ring as security for the D. The contract is valid if B is willing to
amount borrowed. How much can E collect vacate the premises.
from C?

A. P 1000 C. P 3000 174. I A father promised to give his son if

B. P 2000 D. P 6000 the son will marry B this year. If by the end of
the year, B is already dead or the son has not
married B, the obligation to give a car is
effective and demandable.
171. A is obliged to give B her college ring. If
she fails to do so, she must give P 10 000. II A father promised to give his daughter
This is a car if the daughter will not marry her
boyfriend earlier than December 31, 2009. If
A. Alternative obligation
by December 31, 2009, has not yet married
B. Conjoint obligation her boyfriend, or if prior thereto, her
boyfriend has died, the obligation is
C. Facultative obligation extinguished.
D. Obligation with a penal clause A. True; true C. False; true

B. True; false D. False; false

41
175. A borrowed money from B and pledged
her ring as security. It was agreed that A was
to pay the money loaned with interest at the
end of one year. Before the expiration of the
one-year period.
A. A may compel B to accept her
payment.
B. A may be allowed to pay B, if B
consents.
C. A may compel B to accept her
payment because the period is deemed for the
benefit of A.
D. B may refuse A’s payment as the
period is deemed for the benefit of B.
176. A oblige himself to pay B P 100000 in
30 days plus a penalty of P 10 000 if A fails to
pay the obligation in due time. A failed to pay
the obligation in 30 days, B can demand from
A C.
A. The principal of P 100 000 plus
P10,000 penalty.
B. The principal of P 100 000 plus P 10
000 penalty plus legal interest.
C. The principal of P 100 000 plus P 10
000 penalty, plus legal interest, plus damages.
D. The principal of P 100 000 plus legal
interest, plus damages.
177. A delivered his bracelet to B for B’s
necklace. No written agreement was signed by
the parties. Which of the following is
appropriate description of the contract
between A and B?
A. Onerous and bilateral
B. Bilateral and innominate
C. Bilateral and innominate
D. Aleatory and nominate
178. A delivered his van to B for the latter’s
use for one week without any compensation.
The cause of the contract is
A. The van of A
B. The generosity of A
C. The period of one week
D. The delivery of the van
179. A sold to B his cow for P 5000. No date
is fixed by the parties for the performance of
their respective obligations. The obligation of
A is
A. To deliver the cow immediately as
there is a perfected contract.
B. To deliver the cow within the
reasonable time from the perfection of the
contract
To deliver the cow upon the payment
by B of P 5000
D. To rescind the contract as there is no
time fixed for the delivery and payment.
180. A owes B P 10 000 due on March 10,
2010. A owes B P 8000 due on March 11,
2010. A obliged himself to deliver to B a cow
valued at P 6000 on March 12, 2010. On
March 13, 2010, a paid B P 10 000. If A
makes an application of payment,
A. The P 10 000 should be applied to the
first debt only
B. The P 10 000 should be applied to the
second debt only
C. The P 10 000 may be applied either to
the first debt or second debt
D. The P 10 000 may be applied to the
first debt, or to the second debt or to the
third debt
42
181. A sold his land to B. The sale was made
orally. B paid the agree price. B wanted to
have the registered but he needs a public
instrument. Which is correct?
A. B may sue A for the return of his
money as no one shall be unjustly enriched at
the expense of another.
B. B cannot demand the return of the
purchase price because the sale is
unenforceable.
C. B may compel A to execute the public
instrument because the sale is valid.
D. B may only occupy and use the land as
buyer in good faith
182. A is the guardian of B, a minor. B sold
A’s land in writing to C valued at P1M for
P.7M. The sale is (stage in the life of a
contract)
A. Rescissible C. Unenforceable
B. Voidable D. Void
183. A, B and C are jointly liable to D in the
amount of P 9000. D assigns the entire credit
to A. In this case
A. The obligation is extinguished because
of confusion
B. B and C will not be liable to A
C. a becomes the new creditor and may
demand from B and C P 4500 each
D. A’s share in the obligation
extinguished because of confusion.
184. "A sells to B his lot and house in the city
if A decides to transfer and live in the
countryside" is an example of:
a. Mixed Condition
b. Potestative Condition
c. Casual Condition
d. Resolutory Condition
185. Lessor A leased his apartment unit to
Lessee B. In the contract of lease, it was
stipulated therein that for failure of he lessee
B to pay his rentals for two (2) consecutive
months, A may validly eject B, without resort
to court. Upon B’s failure to pay 2 monthly
rentals he was ejected from the premises, B
now goes to court for Damages for his alleged
failure to exercise his day in court since he
was ejected from the premises without a court
hearing. Decide.
A. B’s contention is valid because the contract
between vests reciprocal obligations, hence he
must have his right to seek judicial recourse
B. B’s contention is valid because it must be
proved that he indeed failed to pay 2
installments;
C. A’s action is right because the injured party
has the right to rescind the obligation
D. A’s action is correct because A’s non resort
to judicial action is expressed in the contract;
186. If the obligation of the debtor is "I will
pay you my debt after I have arrived from
abroad," this is
a. Unenforceable
b. With a Period
c. Void
is d. Conditional
187. Through insidious words or
machinations, A was able to induce B to enter
into a contract which without them B would
not have agreed to it. There is:
a. Undue Influence
b. Fraud
43
c. Mistake 192. Rescission of contract can take place in
this case
d. Misrepresentation
a. When the thing which is the object of the
contract is legally in the possession of a third
188. "A sells to B his lot and house in the city person who acted in bad faith
if A decides to transfer and live in the b. When he who demands rescission can
countryside" is an example of: return whatever he may be obliged to restore
a. Mixed Condition c. When the party seeking resolution can
b. Potestative Condition perform only as to part and as to remainder

c. Casual Condition d. When the seller cannot return the

installments paid to him by the buyer
d. Resolutory Condition

189. Contracts entered into in a state of

drunkenness or during a hypnotic spell are:

a. Void

b. Valid

c. Voidable

d. Legal

190. This contract is without effect unless

ratified:

a. Marriage between first degree cousins

b. Contract of sale between two insane

persons

c. Contract of sale between husband and wife

d. Donation between husband and wife

191. Which of the following contracts is not

void ab initio?

a. Those whose object is outside the

commerce of men

b. That whose object did not exist at the time

of transaction

c. That which contemplates an impossible

service

d. That which is undertaken in fraud of

creditors

44
ANSWER KEYS 34. D 68. B
1. D 35. C 69. C
2. A 36. B 70. C
3. A 37. A 71. D
4. A 38. C 72. D
5. C 39. D 73. A
6. B 40. A 74. B
7. A 41. B 75. C
8. B 42. C 76. B
9. D 43. B 77. B
10. A 44. C 78. D
11. D 45. D 79. C
12. B 46. B 80. D
13. A 47. C 81. C
14. B 48. A 82. B
15. D 49. D 83. A
16. A 50. C 84. C
17. B 51. A 85. A
18. B 52. C 86. D
19. B 53. A 87. A
20. C 54. C 88. A
21. D 55. B 89. B
22. D 56. A 90. A
23. B 57. A 91. D
24. B 58. D 92. A
25. B 59. B 93. A
26. D 60. D 94. B
27. A 61. A 95. B
28. D 62. C 96. A
29. A 63. A 97. D
30. A 64. D 98. D
31. A 65. A 99. B
32. B 66. B 100. A
33. C 67. C 101. B

45
102. D 136. B 170. A
103. D 137. A 171. D
104. B 138. C 172. B
105. C 139. C 173. C
106. A 140. C 174. D
107. B 141. A 175. B
108. C 142. A 176. A
109. C 143. C 177. A
110. D 144. D 178. B
111. D 145. D 179. C
112. A 146. B 180. C
113. C 147. C 181. C
114. A 148. B 182. B
115. C 149. A 183. D
116. D 150. C 184. B
117. B 151. A 185. D
118. A 152. A 186. D
119. A 153. B 187. B
120. D 154. D 188. B
121. D 155. B 189. C
122. B 156. B 190. B
123. C 157. D 191. D
124. C 158. A 192. B
125. A 159. B
126. D 160. C
127. B 161. C
128. C 162. A
129. B 163. C
130. C 164. A
131. A 165. C
132. A 166. D
133. A 167. B
134. A 168. D
135. D 169. A

46
 BIBLIOGRAPHY

BOOKS

❖ LAW ON OBLIGATIONS AND CONTRACTS, HECTOR DE LEON, 2014.

PRACTICE QUESTIONS

❖ CPA REVIEW SCHOOL OF THE PHILIPPINES, TEST BANK 1

❖ NOTES IN BUSINESS LAW, FEDELITO R. SORIANO, 2016

47