1. Under the law, when is a thing considered lost? Cite an example of each.

 
According to Article 1189 (par. 2.) It is understood that a thing is lost when it perishes, or
goes out of commerce or disappears in such a way that its existence is unknown or it cannot
be recovered. For example, SC, Honda civic model 2016 with plate number AA 1111, SC
obliged himself to give the determinate car to CD if CD passes the bar exam in November.
But during the pendency of the condition, the car was lost through the fault of SC. In this
case, the obligation is extinguished. But if it is lost through the fault of SC, he is obliged to
pay the damages to CD.
Loss of a determinate thing under Article 1262 (par. 2.) is the equivalent of impossibility
of performance in obligations to do referred to in Article 1266. But “loss of the thing due,” as
used in Article 1231 and the above section subtitle, extends to both obligations to give and
obligations to do.

2. Mr. A promised to deliver a Toyota Altis car with plate number ABC 123 to Mr. B if the
latter will pass the CPA Licensure Examinations.  Before the results of the examinations
was released by the Board of Accountancy, the car was totally lost because of a fortuitous
event.  If Mr. B passes the CPALE, can he compel Mr. A to deliver the car?
According to Article 1174 of the Civil Code provides that no person shall be responsible
for those events which could not be foreseen, or which though foreseen, were inevitable. A
fortuitous event under Article 1174 may either be an “act of God,” or natural occurrences
such as floods or typhoons, storms, earthquakes or other cataclysmic events; or an “act of
man,” such as riots, strikes, wars, governmental prohibitions, robbery, etc. So Mr. B cannot
compel Mr. A to deliver the car.

3. In the facts given in No. 2 above, would your answer be the same if the obligation of Mr.
A is:  “to deliver a Toyota Altis car”?  Explain.  
Yes because Mr. A could not have been reasonably foreseen or expected that event or it
is out of his control that the car was lost so Mr. A cannot compel him to deliver the car even
if he passes the CPALE.

4. What are the requisites of a valid remission?

The requisites are the following:
(1) It must be gratuitous;
(2) It must be accepted by the obligor;
(3) The parties must have capacity;
(4) It must not be inofficious; and
(5) If made expressly, it must comply with the forms of donation.

5. What are the essential requisites of a valid confusion or merger?

 For a valid confusion or merger to take place, it is necessary that:
(1) It must take place between the principal debt and creditor; and
(2) It must be complete.

6. When does compensation take place?

According to Article 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of each other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they
be of the same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor. (1196)

7. What are the essential requisites of compensation?

Article 1270 enumerates the requirements or requisites for legal compensation:
(1) The parties are principal creditors and principal debtors of each other;
(2) Both debts consist in a sum of money, or of consumable things of the same kind and
quality;
(3) The two debts are due or demandable;
(4) The two debts are liquidated; and
(5) No retention or controversy commenced by a third person.

8. What is novation?  Explain.

Novation is the total or partial extinction of an obligation through the creation of a new
one which substitutes it. It is the substitution or change of an obligation by another, which
extinguishes or modifies the first, either by changing its object or principal conditions, or by
substituting another in place of the debtor, or by subrogating a third person in the rights of
the creditor

9. How may an obligation be modified?

According to Article 1291. Obligations may be modifies by:
(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor. (1203)

10. What are the requisites of a valid novation?  Explain.

In novation. There are four essential requisites, namely:
(1) A previous valid obligations;
(2) Capacity and intention of the parties to modify or extinguish the obligation;
(3) The modification or extinguishment of the obligation; and
(4) The creation of a new valid obligation.