CPA REVIEW SCHOOL OF THE PHILIPPINES REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS COVERAGE: Law on Obligation Pirecti” ; Read and select the best answer for the following questions, |. What is the definition of an obligation under Article Xew Civ rl ? 2, fg dfinition of an obligation under Atle 1136 ofthe New Civil Code of the Philippines b. Juridical necessity to give or not 10 give. j ©. Juridical necessity to give, to do or not to do. d. Juridical necessity to give, not to give, to do or not todo. | 2. Which of the following statements best describes a ncgative obligation? a. Iefers to an obligation which consists of giving or doing something. b. It efers to an obligation which consists to the delivery or giving of personal or real object. ¢. It refers to an obligation which consists of éoing a particular prestation but not delivery of an object. d._ It fefers to an obligation which consists of abstaining from some act. 3. Which of the following is a positive and real obligation? a. Obligation to teach b. Obligation not to smoke in public place ©. Obligation to deliver the goods 4, None of the above 4. The following are the essential elements of an obligation. except a. An active subject, who has the power to demand prestation, also known as the obligee or creditor. b. A passive subject, who is bound to perform the prestation, also known as the obligor or debtor. ‘Object or prestation, which is the promise or particular contract to be performed in the performance of an obligation, and may consist of giving, doing or not doing a thing, d. Efficient cause, the tie which binds the parties to the obligation, also known as juridical tie or vinculum. ¢. The form in which the obligation is manifested. ‘5. Among the'essential elements of an obligation, which dre considered the personal elements? a. Obligee and obligor | b.Prestation and vinculum ©, Obligee and vinculum | 4. Pres.ation and obligor 6. The following statements concerning an obligation are correct, except The obligation to give is one in which the prestation consists in the delivery of a movable or an a immovable thing. b. mn to do includes all kinds of work or services. ©. ion not to do consists in abstaining from some act. | /2 obligation. 4d. Thelobligation not to give isa po: 7. The following are the requisites of a prestation or an object of an obligation, except ‘a, It must be possible, physically and juridically. fet b. It must be determinate, or, at least, determinable cecording to pre-established elements or criteria, c. It must have possible equivalent in money. d. It must be a positive obligation only. 8. The following are examples of vinculum or efficient cause or juridical tie of an obligation, except a. Relation established by law b. Relation established by contract c. Relation established by natural obligation 4d. Relation established by quasi-contract or quasi-delict 9. Which of thd following obligations is not enforceable by @ court action? Obligation arising from law Obligation arising from cont ; Obligation arising, from quasi-delict or crime ‘Natural obligation or quasi-contract ‘Business Transactions (8601) Page 1 of 34 Scanned by CamScanner10, Which of the following. statements concemi true? 1. Civil obligations derive their binding force from positive law, while natural obligations derive their binding effect from equity and natural justve. Civil obligations can be enforced by coun action ofthe coercive power of public authority, while the fulfillment Fhe aatal chtiations canoe compelled by court action but depends exclusively upon the ood conscience of | the debior, However, voluntarily fulfilment of natural obligation by the debtor wilt preclude him from asking for Feimbursement from the creditor of the amount he has voluntatly paid & Tonly b. itonly Both i and I 4. Neither tnor Il ing the distinctions between civil obligation and natural obligation are Hi The following are examples of natural obligations that cannot be enforced by court voluntarily fulfillment of debtor, except & Tite obligation of debior to pay a Joan evidenced by a written contact of had already lapsed from maturity date without demand from ered Ths oblization of « debior to reimburse a thd person who hos patd the detnor’s ‘obligation after it has already lapsed. The obligation of a testate which he received by will The obligat tion but depends upon the loan but a period of 10 years b Or lestate heir to pay the debt of a decedent beyond the value of the property cr by the law of intestacy from the estate of the deceased " of the employer of a “Kasambahay” to pay the [3° month pay of the later 12. The following rs the sources of civil obligation demandable ina court of law, except iscontracts Quasi-delicts or Culpa Aquiliana or Torts Delict or Crime or Acts or omissions punished by law Religious doctrines Pease 15: Iris @ source of an obligation that refers to she principlev and regulations established in « ‘community by some authority and applicable to its people, whether in the form of legislation or of custom ent poli enforced by judicial decision. a Law Contract ©. Quasi-contract 4. Quasi-delict 14. Which of the following statements conceming obligations arising from law is incorrect? 4. Only obligations ex, ipressly determined in the Civil Code or in special laws are demandable. b. The law cannot exist as source of obligations, unless the acts to which its principles may be applied exist . The obligations created 6. The obligations derived from law are presumed, correlative rights arising from law shall be govemed by the law by which they are 15. The obligation of the parents to provide support to their children arises from 2 Law b Contracts © Quasi-contracts d Quasi-deticts 16. It és & source of an obligation thot refers to meeting of minds betw: ‘With respect to the other, to give something of to render some servis & Law b. Contract © Quasi-contract d Quasicdetict ‘een two persons whereby one binds himself, 17, Which of the following statements concerning obligations arising from co 1. Obligations arising from contracts U, Obligations srising from contracts : 2 Yonty b Moaly Both | and it 4. ontracts are correct ‘have the force of law between contracting parties. pould be complied with in good faith Page 2 of 34 Scanned by CamScanner18. 115 nource Of an obligation that Fefers t» # juridical relation which srises ‘unilateral net, to the end that no one may be a Delict b Quasicantrnce trv0t ellot om certian lawful, voluntary expense of another, ad 19, Which of the following statements concerning the kinds of quasi-contract is correct? LN WY Gestlo vefers 0 the voluntary management of the property oF affairs of another without the knowledge or consent of the latter, {i Solution Indebitl refers tothe juridical relation which is created when something is received when there is no right {to demand it and it was unduly delivered through mistake, Lonly b Monty © Both Tand I Neither nor I 0, The following are examples of quasi-contracts, except 4A person takes charge of the agency or management of busin consent of the latter, oF property of another with authority or b A petson receives something when there is no right to demand it of it was unduly del mistake fered through A stranger gives support to a child of another person without the knowledge of the person obliged to give support 4A person saves the property of another person during fire, flood, storm or other calamity without the knowledge of the owner, 21. What is the nature of the responsibility of liability of two or more officious manager in a negotiorum gestio? 4 Generally it shall be solidary unless the management was assumed to save the thing or business from imminent danger which will make their liability to be joint only. b. Generally it shall be joint unless the management was assumed to save the thing or business from imminent danger which will make their liability to be solidary. c. Mis always solidary, dd. Itis always joint 22. The officious manager in a negotiorum gestio shall be liable for any fortuitous event in any of the following instances, except If he undertakes risky operations which the owner was not accustomed to embark upon. fhe has preferred his own interest to that of the owner. If he fails to return the property or business after demand by the owner. If he assumed the management in good faith. 23, In which of the following instances will negotiorum gestio arise? When the property or business is not neglected or abandoned. b. [fin fact the manager has been tacitly authorized by the owner. ©. Neither A nor B. 4. Bither A or B. 24. What is the nature of responsibility oF liability of two or more payces when there has been payment of what is not due? & Solidary b. Joint c. Pro-rata d. Subsidiney 25. When will » person who accepts an undue payment of @ sum of money be liable for interest?” 8. When he receives the undue payment in bad faith b. When he receives the undue payment in good faith When be receives the uridue payment, regardless of being bad or good faith 4. Under ait instances 26. When will » person who in good faith accepts an undue payment of » thing certain or determinate be responsible for the impairment or loss of the same or its accessories and accessions? 4. When the reason of lows is fortuitous event, btn 90 far as he has thereby beon benefited When be is not yuilty of negligence 4 Het tise in any instances Scanned by CamScanner27, Itis a source of an obligation that refers any act or omission punishable by law. a. Delict b. Quasi-contract cc. Contract Quasi ict 28. Is a person criminally liable also liable to pay civil damages to private offended party? a. No because criminal lat ty means imprisonment only. b. Yes, as a general rule, unless the crime committed does not cause civil damages. c. Yes in all cases. d. No unless the People of the Philippines ask for damages. 29. What is the nature of civil liability of two or more persons who are guilty of crime? a. Solidary b. Joint . Pro-rata 4. Subsidiary 30. Article 100 of the Revised Penal Code provides that every person criminally liable for a felony is also civilly li criminal fiabi a. An imbecile or insane person, b. A person under 18 of age. ¢. Any person who acts under the compulsion of an irresistible force. d. Any person who acts under the impulse of an uncontrollable fear of an equal or greater injury. e. 31. The civil liabilities arising from crimes are as follows, except third person who has acquired it by lawful means, ’ b. Reparation of the damage caused which shall be determined by the Court taking into consideration of the price of the thing and its sentimental value. 4. Compromise of the criminal liability. 32. What degree of evidence must be proved by the prosecution for the accused to be criminally liable? ange 33. What degree of evidence must be proved by the plaintiff in order to recover ci Proof beyond reasonable doubt Clear and convincing evidence Preponderance of evidence Substantial evidence quasi-delict? Proof beyond reasonable doubt Clear and convincing evidence Preponderance of evidence Substantial evidence le. Under Article 12 of the Revised Penal Code, the following persons will not be imprisoned (exempted from ) but will still be liable for civil damages (civil liability) for their acts, exeept Any person who acts under self-defense or in the performance of his official duty or a wife suffering from battered woman syndrome who killed or injured his batterer. a Restitution which refers to restoration of the thing itself even though it be found in the possession of a Indemnification for consequential damages which shall include not only those caused the injured party but also those suffered by his family or by a third person by reason of the crime. damages based on contract or 34, In the prosecution for the crime of criminal negligence, the accused is acquitted on the ground of failure of the prosecution to prove his guilt beyond reasonable doubt. M based en quasi-delict? @ » « 4 No because the private offended party is barred by the principle of res judi Yes because a single act may result to different sources of obligation distinct and separatz sources of civil liability. No because the accused shall not be subject to double jeoperdy ‘Yes only if there is a contract between the contending parties the private offended party file another civil case jcata and crime and quasi-delict are 35, It refers to 4 source of an obligation wherein « person by act or omission causes damage to another, there being fault or negligence. a b e. a Contract Quasi-contract ‘Quasi-delict or culpe aquitiana or torts Delict Page+of34 Scanned by CamScannerlity for quasi-detict or torts may exist, except fender and offended parties 37. Negligence o eulpa which results to civil liability arising fren quas-delict or torts is also known as ‘Culpa criminal b. Culpa aquiliana © Culpa contractual 4. Culpa liberal 38. The following are the distinctions between quasi-delic and crime or delict, except i-delict is a public right while the right violated by a crime isa private right. 10 liability for damages to the injured party but there are crimes from which no Seminal liability can never be compromised except in criminal negligence but liabilty ftom quasi-dlict ean be compromised. 4+ In quasi-detit, criminal intent s not necessary, while in crime, criainal intent is necessary except in criminal negligence. © In order to prove rime, proof beyond reasonable doubt is required but in order to prove negligence in quasi- Aelict, only preponderance of evidence is needed. 39, Im case of tort, when will the plaintiff or injured party be barted or precluded fromm recov 2 When the reason of the injury is a fortuitous event but with cortributory negligence of tortfeasor. 5. When piaintift’s own negligence was the immediate and proximate cause 0 his init. © When plaintiff's negligence was only contributory, the immediate and prosimate cause ofthe injury being the Gefendants lack of due care 4. When the immediate and proximate cause of his injury is the negligence of the tortfeasor. 40. The obligation arising from torts or quasi-delicts is éemandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The following are the persons who are lable for the torts committed by [etsons under their responsibility, except ‘& The father and, in ease of his death or incapacity, the mother, are responsible for the damazes caused by’ the ‘minor children who live in their company. b. Guardians are liable for damages caused by the minors o and live in their company. | The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of thei functions. 4. Employers shall be liable for the damages caused by their employees and household heipers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry .Teathers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices who are outside their custody. apacitated persons who are under their authority 41. How shall persons enumerated under preceding number exempt themselves from responsibilities arising from torts ‘committed by persons under their responsibility? By proving they exercise extraordinary diligence to prevent damage. 'b, By proving that they observed all the diligence of a good father of a family to prevent damage. © By proving that there is no contract between the plaintiff and defendant. 4. By proving that the guilt is not proven beyond reasonable doubt. 42. What is the nature of liability of two or more persons who axe liable for quasi-delict or tort? Sotidary Joint Pro-rata Proportionate ange 43. While trying to pass each other on a narrow bridge, # passenger bus and a private automobile collided, and two Persons, A and B, were injured. A was a passenger of the bus while B was a pedestrian. The bus company was y, made a defendant although a chauffeur was driving the bus and the owner-driver of the private car was also made { 4 defendant. What can be the source of obligation of the bus company ws regards to A, the passenger? 2. Contract of carriage for failure to exercise extrasaedinary diligence b. Culpa aquiliana or quasi-delict if he exercised diligence of a good father of a family in selecting his employees. © Culpa criminal or crime and considered a priacipal liabitit 4 Quasi-contract rn rad Page 5 of 34 Scanned by CamScannerBards 10 A. the pasm reeeins number, what can be the source of obligation of the driver of passenger bus as Contract of carriage 6. Quasi-contract = & Law 4. Quasi-delict or crime at the option of A 45. Using the same i B an ae ‘© preceding number, whet can be the source of obligation of the bus company as regands to Contract of eariage Culpa aquitiana if he fails to exercise > tigence of e . b fails to exercise ‘vdtigence af « pood father of a family in selecting his employees : Soe Criminal or crime and considered principal liability juasi-contract 46. Using the same eding ' i pedesting? 4% Preceding number, what can be the source of obligation ofthe bus driver as regards to B, the 8. Contract of carriage Quasi-contract © Law 4 Quasi-delict or crime at the option of B 47. Using the same data preceding number, what can be the source of obligation ofthe ownerdriver of private car as regards to A, the passenger? a. Contract of carriage b. Quasi-contract ©. Law 4. Quasi-delict or crime at the option of A ing number, what can be the source of obligation of the owner-driver of private car as 48. Using the same data pre regards to B, the pedestrian? a. Contract of carriage b. Quasi-contract c. Law 4. Quasi-delict or crime at the option of B 49. Which of the following statements concerning the obligation to deliver a thing is correct? 1A generic or indeterminate thing is only indicated by its kind, without being designated and distinguished from others of the same kind. 1. _A determinate or specific thing or delimited generic thing is one that is individualized and can be identified or distinguished from others of its kind, a. Neither fnor It b. Both Tand IL ©. Tonly d. Honly 50. Which of the following refers to a determinate thing? a. White horse b. Pilot ballpen c. Carwith engine number 143-245, 4. House and lot in Villa Lourdes Subdivision 51. The following are the incidental or accessory obligations in an obligation to deliver a determinate thing, except ‘a. Obligation to preserve the thing with due care Obligation to deliver the fruits if the fruits occur efler the obligation to deliver the determinate thing arises. €, Obligation to deliver the accessions and accessories, d. Obligation to pay for the freight and insurance in transit. 52, In an obligation to deliver a determinate thing, what degree of diligence shall be exercised by the obligor or debtor in the preservation of the determinate thing? : : 4 Extraordinary diligence unless the law or the stipuiation of the parties requires another standard of care. b. Diligence of a father of a good family unless the law or the stipulation of the parties requires another standard of care. : ©. Diligence of a good father of a family or ordinary diligence or diligence of a reasonably prudent person unless the law or the stipulation of the partes requires another standard of care. No diligence unless the law or the stipulation of the parties requires another standard of care. Page 6 of 34 Scanned by CamScanner$3. In an obligation to deliver a determinate thing, determinate thing or when does the creditor obtain From the time of From c. From d. From when is the creditor oF oblipee enttied ta the fry vile Of the Personal rights Over the fruts of the determinate thing) the perfection of the contract. the time the obligation to deliver the determinate thing arises the time itis detivered physically ot constructively, the fulfillment of resolutory condition 54. In an obligation to deliver a determ of the determinate thing? a. From the time of the perfection of the contract. b. From the time the obligation to deliver it arises. §, Tom the time the fruits are delivered physically or constructively. 4. From the fulfillment of resolutory condition. inate thing, when does the creditor or ubligee obdsin real sights over the frss $5. In a contract of sale, when is the buyer or vende entitled to the Sruits of the determinate thing of when dons the buyer or vendse obtain personal rights over the fruits ofthe determinate thing? t,_ from the time ofthe perfection of the contract of sale of determinate thing b. From the time the obligation to deliver arises, © From the time the determinate thing is delivered. 4. From the fulfitiment of resolutory condition, #6. Which ofthe following statements concerning real right and personal right is enrreet? . L A real right is the power belonging to a person over # specific thing, without a passive wubject inividuadly determined, against whom such right may be personally exercised. It cau be exercised agzins a2 porvn ot against the whole world, A personal right is the power belonging to one person to demand of encths fulfillment of a prestation to give, to do or not to dali can be exercised aga © Lonly b. Toaly ©. Both Jand It 4. Neither I nor It n. ase define g st a particular pery 57. As a general rule, when a debtor or obligor fails to comply with his obligation, the creditor ur chligee may avail himself of what remedies? 2. Action for specific performance or action to rescind or resolve the obligation b. Action for specific performance is ecg oly esl i ind or resolve the obligation with damages only. ; chat, 4. ‘Aajon fr spect peirmance er Sco end Ction or confor damages, exiely ot in addition to either of the first two actions. 58. What is the proper remedy of the creditor in the case the debtor or 0 iver a determinate or specific thing? = sone helen specific performance in adltion to damages under Arise 170 b. Hemay ask the obligation to be complied with st the expense of the debtor with damages c. Action for rescission of the obligation. 4. Action for annulment of the contract. ot fails to comply with his obligation to 59, What is the remedy of the creditor in the case the debtor or obligor fails to comply with bis obligation to deliver an indeterminate or generic thing? - Action paper bere ar ei daeealgl file an action for specific performance wi fs 7 He maya he obligation be cocplicd wih mt expose te ear wits mages cl Either B or C. aooe 60. Is the debtor or obligor ligble for damages by reason of the loss of the Geterminate thing due to Sorntous event” 2. No, asa general rule, except in those cases provided by law b. Yes, as a general rule, unless be is exempted by creditor or obliges © Yerinall cases. & No inall cases. 61. In an obligation to deliver 2 determinate thing, when is the debtor or obligor labile even if the loss of se determinate thing is dut to fortuitous event? t 1 When the debtor or obligor delays in the delivery of the thing UL. When the debtor or obligor promised the same thing to two or more persons se Page 7 of 24 Scanned by CamScannersenna 62. In an obligation to pive a dei mil thing, which of the following statements is ¢rue? 8. The obligation to give a determinate thing includes that of delivering all of its accessions and accessories only if there 1 stipulation to that effect 1b. The obligation to give a determinate thing includes that of delivering all of its accessions und accessories even though they may not have been mentioned. ¢. The obligation to give a determinate thing. includ even if there stipulation to the contrary. 4. The obligation to gi s that of delivering all ofits accessions and accessories determinate thing does not include th ‘of delivering all of its accessions and accessories 63. Which of the following statements is correct? 1. Accessories refer to those which destined for the embellishment, use or their preservation of another thing or more importance, have for their object the completion of the latter for which they are indispensable. or convenient M1. Aceessions inelude everything which is produced by a thing, or which is incorporated or attached thereto, either neturally or artificially a. Lonly b. only c. Both Tand 11 4d. Neither I nor I 64. The following are the kinds of fruits under the Civil Code, except 4. Natural fruits ~are the spontaneoits products ofthe soil, and the young and other products of animals b, Industrial fruits — are those produced by Innds of any kind through cultivation oF labor © Civil fruits ~ Fruits as a result of eiviization or fruit arising out of a juridical relation or contracts such as are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar incomes 4. Commercial fruits ~ Fruits arising from commercial transaction, 65. As a general rule, in an obligation to do, what is the remedy of the creditor if the debtor a. Action for specific performance with damages. b. Action for anaulment of obligation with damages. ©. The creditor or third person may do it in a proper manner at the expense of the debtor. d. Action for damages only to be awarded by the Court, s to do the prestation? 66. In an obligation to do whereby only the debtor ean do the thing, what is the remedy of the creditor if the debtor fails to do the prestation? Action for specific performance with damages. Action for annulment of obligation with damages. ‘The ereditor or third person may do it ina proper manner atthe expense of the debtor. Action for indemnification for damages. aege 67. In case a public official who has the ministerial duty to perform a particular obligetion or public duly under the law fails to do such obligation, what is the remedy of the offended party? 8. Civil action for specific performance b. Special civil action for mandamus ©. Special civil action for certiorari 4. Special civil action of probibition 68. In an obligation to do, what is the remedy of the ereditor in case the debtor did the obligation or did it poorly? Action for specific performance with damages. b. Action for annulment of obligation with damages. © The ereditor oF third person may do it in propcr manner or it may be decreed that what had been poorly done be undone at the expense of the debtor. 4. Action for damages only to be awarded by the Court, it in contravention of the tenor of 69. In an obligation consisting in not doing, wi forbidden him? It shall be undone at the expense of debtor with no damages. b. It shall be undone at the expense of debtor with indemnification for damages. ¢. Action for specific performance with damages. d. Action for rescission, is the remedy of the creditor in case the debtor does what has been Framework for Business Transactions (8601) Page 8 of 34 Scanned by CamScanner70. When doe$ the debtor or obligor incur delay in an obligation to do something? a. From the time the obligee demands judicially or extrajudicially the fulfillment of obligation bb. From the time the obligee demands judicially the fulfillment of obligation. ‘c. From the time of the perfection of the contract. 4. From the fulfillment of resotutory condition. 71. * y can exist in the following obligations, except 2. Obligation to do b. Obligation to give c. Obligation not to do 4. None of the above 72. As ageneral rule, demand by the creditor is necessary in order for debtor's delay to exist. However, the following, are the exceptional cases when demand by the creditor shall not be necessary in order for debtor's delay to exist, except ‘8. When the obligation or the law expressly so declares that demand is not necessary for delay to exist, b. When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract. c. When there is unilateral obligation. 4. When demand would be useless, as when the obligor has rendered it beyond his power to perform, 73, Ina reciprocal obligation, when does the other party incur delay? ‘a, From the moment one of the perties makes a demand, b. From the moment one of the parties fulfills his obligation. c. When both parties do not comply with what is incumbent upon them. 4. When both parties are not ready to comply in proper manner their obligations. 74, Delay or Default (Mora) on the part of the debtor or obligor is called | a. Mora solvendi b. Mora accipiendi c. Compensatio morae 4. Mora obligor 75. The follow}ng are the requisites in order thatthe debtor or obligor may be in default, except ‘2. There must be a complaint filed in court against the debtor. . ‘The obligation must be demendable and already liquidated. c. The debtor delays performance of the obligation. d, The creditor demands the performance judicially or extrajudicially. art of the debtor a.k.a mora solvendi? 1. The debtor becomes liable for damages for the delay. Ti, When it has for its object a determinate thing, the delay places the risk of the thing on the debtor. a. Lonly b. Monly ¢. Both] and Il d. Neither I nor Il 76. Which es following is the effect of delay on te 77. The following are the effects of the delay on the part of the creditor a.k.a mora accipiendi, except The creditor becomes liable for damages. ‘The debtor may relieve himself of the obligetion by the consignation of the thing. The debtor bears the risk of the loss ofthe thing. Thé responsibility of the debtor for the thing is reduced and limited to fraud and gross negligence, All expenses for the preservation of the thing after the mora shall be chargeable to the creditor. saece 78, The benefits arising from default or delay may cease upon Delay of the other party. Rescission of the contract. Payment of damages. Renunciation of other party or prescription. 79. Article 1170 of the Civil Code provides that “The debtor or obligor shall be liable for damages if in the fulfillment of obligation, he is guilty of the following, except a. Gobd faith b. Fraud or dolo ©, Negligence or fault or culpa es default or mora “page 9 of 34 Scanned by CamScanner‘$0. Which of the following statements pertains to “frand™? f cares 1 It isthe failure to observe forthe protection of the interests of another person, that J&BR™ © precaution and vigilance which the circumstances justly demand, whereby such person sufTers 1) b. It refers tothe non-fulfillment of the obligation with respect to time. €. Itrefers to the deliberate and intentional evasion of the normal fulfillment 4. It refers to illicit act which impairs the strict and faithful fulfillment of the obligati defective performance. of obligations We obligation or every kind of 81. ‘The debtor is not liable for damages in cases of contravention of tenor or delay when 8. tis malicions or intentional b. There is gross negligence. ©. It is due to fortuitous events. 4. Iris due 10 force majeure and there is stipulation making the debtor liable even in such case: ieved party by the court, except ; ‘mental anguish, fright, serious anxiety, iliation, and similar injury. f example or correction for 82. The following are the types of damages that may’ be awarded to the ageris 2. Moral are damages awarded by reason of physical suffering, bestnirched reputation, wounded feelings, moral shock, social hun b. Exemplary or corrective damages are das h are imposed, by way o! the public good. in addition to the moral, tecaperate, liquidated or compensatory damages. ¢. Nominal are damages adjudicated in order that aright ofthe plaintif, which has been violated or HA by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the Pisin! for any loss suffered by bi 4, Temperate or moderate damages are damages damages, may be recovered when the court finds amount can not, from the nature of the cave, be provided with certainty. €. Actual or compensatory damages are damaves ewarded for pecuniary the plaintift i fLiguidated damages or penslty are damages agreed upon by the parties to a contract, to be paid i breach thereof and may not be assessed by the court. Superficial —are those damages that are iniquitous, excessive, exorbit t less than compensatory ‘ ear red but its that some pecuniary Joss bas been suffer loss suffered and duly proved by in case of jtant and contra bonus mores. 83, As a general rafe, what i the legal intros cat fr ordinary obligation to pay a sum of money or forbearance of money? a. Always 1226 b. Always 6% c. Always 10% G. 12% before July 1, 2013 bvt 6% on or after July 1, 2013 84. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for what type of fraud is void? . Future fraud b. Past fraud or fraud already committed ¢. Both future and past fraud 4. Neither foture nor past fraud 85, Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances. What type of culpa is referred to by this provision of the Civil Code? a. Culpa crimin b. Culpa contractuat ©. Culpa aquiliana 4. Culpa capa £6, In what type of culpa or negligence will the defense of the exercise of good father ily i his employees by the employer be a tenable defense? 00d father of the family in the selection of Culp criminal b. Culpa contractual ©. Culpa aquiliana 4. Culpa capa A stigulation exempting future lia! A Gros negligence b. Bad faith © Froud 4. Sieuple negligence ty for damages shall be valid for which of the following? Business Transactions eae Page 10 of 34 Scanned by CamScanner+s to the omission of that diligence which is required by the nature of the obligation and corresponds with “umstanes of the persons, of the time and the place. 1, Fraud or dolo b. Delay or default or Mora ce. Negligence or fault or culpa 4. Contravention of the tenor $0. Ifthe law or contract does not state the diligence to be observed in the performance of the obligation, what degree of diligence shall be observed? a. Extraordinary diligence b. Diligence of a father of a good fa ©. Diligence of good father ofa family or ordinary diligence or diligence of reasonably prudent person 4. Diligence of a good mother of a family 90, Asa general rule, no person shall be responsible for those events which could not be foreseen, though foreseen, were inevitable of also known as fortuitous events or force majeure, The following are the instances when a party is liable for the loss even itis due to fortuitous event, except a. Incases expressly specified by law such as when the debtor incurs delay. b. When there is stipulation that the obligor or debtor is still liable even in cases of fortuitous ever sc. When the nature of the obligation requires the assumption of risks. dd. When the fortuitous event is the proximate cause of the damage or injury. 88, It refer nts. to exempt the obligor or debtor from liability, except 91. The following are the requisites of fortuitous events ; lure of the debtor to comply with his 1. The cause of the unforeseen and unexpected occurrence or the fail obligation must be independent of the debtor's will 'b. It must be impossible to foresee the event which constitutes the case fortuito or if it ean be foreseen, it rust be impossible to avoid. ¢. The occurrence must be such as to render it impossible for the debtor to fulfil his obligation in a normal 4. The obligor must participate in the aggravation of the injury resulting to the ereditor. 92, Which of the following presumptions are correct? 1. The receipt of the principal by the creditor, without reservation with respect to the interest, shall give rise to rebuttable presumption that said interest has been pai 1. The receipt of a later installment of a debt without reservation as to prior installments, shall raise the rebuttable presumption that such prior installments have been paid. IM, The receipts of the interest shall give rise to rebuttable presumption that the principal has been paid. a. Land It b. Honly . Mand in 4. Vand Itt 93. In order to satisfy his claims against the debtor, the unpaid creditor has the following successive rights, except To levy by attachment and execution upon ell the property of the debtor, except such as exempt by law from execution. To exercise all rights and actions of the debtor, except such as are inherently personal to him. To ask for the rescission of the contracts made by the debtor in fraud of his rights. To file an action for damages against a third person who acquires the property in bad faith the property subject of the litigation. €. To filea criminal complaint against the debtor. 94. This action may be exercised by the creditor inthe place of his negligent debtor in order to preserve or recover for the patrimony of the debtor the product of such actions, and then obtain therefrom the satisfaction of his own credit. It refers to the right of unpaid creditor to exercise the right of his debtor. Accion reindivicatoria, b. Accion subrogatoria ©. Accion pauliana 4 Accion publiciana 98. It refers to the creditor's right to set sid 0 acaaie a bee Bs ‘ist dated toe igh de or revoke or rescind the acts or contracts which the debtor may hay scion pauliana ‘Accicn reindivicatoria Accion publicians 4 ‘ b © a Page 11 of 34 Scanned by CamScanner96. Which of he following statements concerning rights acquired by viewe of an obligation is eorreet? & Asa general rule, they are not transmissit They ae transmissible only if there is stipulat Subject tothe provisions of laws, they are anst d. They are always transmissible, jon to that effect. issible unless there is stipulation to the contrary 9. W rfors to am obligation which contains no term or condition whatever upon which depends the fulfillment of the obligation coatracted by the debtor. 4 Conlitional obligation 1b. Pur obligation Natural obtigation Civil obligation 98. The following obligations are demandable at once, except ‘a. Every obligation whose performance does not depend upon & future or uncertain event, or upon a past ceveut unknown to the parties 1b. Pare obligation Exel obligation which contains a resolutory condition without prejudice to the ‘of the event or obligation with a resolutory period (in diem) 4. Sospensive consitional obligation or obligation with a suspensive period (ex die) effects of the happening 99. Iris an obligation which is subject to a condition. 4. Comtitional obligation b Pare obligation Natural obligation 4 Civil obligation rvefer to every future and uncertain event upon which an obligation or provision is made to depend. I ‘unknown to the parties. ot ‘The following are considered conditions, except a. Wf Golden State Warriors will become 2080-2051 NBA Champion. 1b. Uf Ted Fay will pass the bar exam. Upon the death of Clay Kerry. Folin Reyes will graduate in Law school. wea. ‘When the debtor binds hiroself to pay when his “means permit him to do so” or “as soom as possible or “sas soom a he haxs the money", the obligation shall be deemed to be a Obligation with a suspensive condition Pure obligation ¢ Obligation in diem or with ¢ resotutary period ‘4. Obligation ex die or with a suspensive period which period may be fixed by court The fotlowing are the distinctions between suspensive condition and resotutory condition, except Ifthe suspensive condition happens, the chligation arises while if the resolutory condition happens, the rights and obligahoos already existing are extinguished tk tn auspensive condition, the rights and obligations do not exist before the happening of the condition ath b meohnary coodition, the rights and obligations already exist even before the happening of the on, Obligation subject to 8 easpensive condition is not demandable at once while obligation subject resalutory condition 19 dermandable at cove brciher-aurs 7 4 Suspensive pandition is known as conditice mbsequent white resclutory condition is condition precedent. 193 toa The fallowing are obligations are subject t suspensive conditions, except 1 wil give suns P1080 if yeu pans the CPA Board exam, ‘You can une the car wet Region grechsates ie wll amoe if fe imu i at, fhe 1K work (PKU hevcames munuber | ae Page 12 of 34 Scanned by CamScannerf 108. Which ofthe following statement pertains 1d a potestative con It is one which depends upon the sole will of one of the cor}tracting parties. b. Itis one which depends exclusively upon chance oF othet factors, and not upon will of the contracting parties . This one which depends upon the will of the contracting parties and other circumstances, including the | will of a third person, \ 4. Itis one which depends upon the arrival of a particular period, 106. Which of the following conditional obligations is void? a. When the fulfillment of the suspensive condition depends tipon the sole will of the debtor. b. When the fulfillment of the suspensive condition depends upon the sole will of the ereditor. ¢. When the fulfillment of the suspensive condition depends upon the sole will of the third person, «When the fulfillment of the suspensive condition depends upon chance or other factors. 107. ‘The following conditions shall annul the obligation which depends upon them, except Impossible conditions a b. Suspensive conditions which depend upon chance and will bf the debtor ©. Conditions contrary to good customs or public policy | 4. Conditions prohibited by law 108. ‘What is the effect of the condition not to do an impossible thing? 4. It shall be considered as having agreed upon. b. The obligation will become null and void. c, The obligation is subject 10 a condition. 4. The obligation is pure and demandable, 109. Which of the following obligations is valid? &. Obligation to give PIM subject to a suspensive condition that if the creditor will have sexual intercourse with the debtor. b, Obligation to give PIM in exchange for shabu and cocaine. | . Obligation to give PIM subject to a suspensive condition that ifthe debtor will not be able to walk in air. 4. Obligation to give PIM subject to a suspensive condition if the debtor will go to Singapore. 110. An obligation to pay a sum of money is subject to the condition that a certain person shall arrive at a designated place in one year. This obligation will be extinguished if | 1. One year passes and he does not arrive at the place. | Tl Such person dies before the lapse of one year and before arriving at such a place: a. Lonly b. Honiy Either for It d. Neither [nor Il mn ‘An obligation to deliver a piece of land to X is subject to the condition that Ke shall not bear a child within two years. This obligation shall become effective and the land should be delivered to X if 1 Two years expire without X having bearing 2 child IX becomes barren before the two years expire Tonly b. Monly ¢. Neither I nor ti @. Either or 1 12. What is the effect if the obligor or debtor voluntarily prevented the fulfillment of the condition of an obligation? ‘The obligation is extinguished. The obligation remains to be subject to the condition, “Th¢ condition shall be deemed fulfilled and the obligation becomes demandable. “The obligation becomes with a period. arse n3. When shall the effects of s conditional obligation to give produce effect? A. They shall be given prospective effect once the condition hits been fulfilled They shall retroact to the day of the constitution ar perfection of the obi been futflled They shall not he given retroactive effect once the condition has been fulfilled. 1G, They shall be given retroactive effect even ifthe condition is not fulfilled tion once the condition has Page 13 of 34 Scanned by CamScanner14, 20, X stl Piece of land to A on January 1,2020 subject to a suspensive condition, Then, on October 4, Dean sels the land uuconditionaly to B, The suspensive condition on contract of sale of land roc happens on December 25,2020. Who shall have the better right assuming there is neither registration of the sale nor delivery of possession to either A or B? Us. 16, 4. B because the sale to him is unconditional. b B because his tile is older being dated October 4,2020. © A because his ttle retroacts on January’ 1,2020 upon fulfillment of the suspensive condition on December 25,2020, 4. A because he is the first buyer. Jn conditional reciprocal obligations fo give, what isthe treatment ofthe fruits and interests during the Pendeney of the condition? 8. They shall inure tothe sole benefit of the creditor. b. They shall inure to the sole benefit of the debtor. & They shall be decmed to have been mutually compensated 4. They shall be forfeited in favor ofthe government {n conditional unilateral obligation to give or unilateral obligation to give subject to a period, wha {reaiment ofthe fruits and interests during the pendency of the condition or during the pendeney of the period? 2. They shal inure tothe sole benefit of the ereditor in the absence of stipulation to the contrary | They shall inure to the sole benefit of the debtor, whether the condition or period is suspensive or Fesolutory, in the absence of stipulation to the contrary © They shall be divided equally between the creditor and debtor 4. They shall be forfeited in favor of the government, u7, Jn conditional obligation to do or not to do, what isthe effect ofthe fulfillment of the condition? 118, 119, 120. 121. There shall be retroactive effect to the day of te constitution of the obligation, There shall be prospective effect from the moment the condition is fulfilled. The stipulation of the parties shall not be considered, The courts shail determine, in each case, the retroactive effet of the condition that has been complied ‘with taking into account the agreement of the parties. Before the fulfillment or pendency of the suspensive condition, what shall the creditor may do? Demand the specific performance of the obligation Charge damages and interests. Demand the fruits and interests of the thing, Bring appropriate actions for the preservation of his right. Daring the pendency ofthe suspensive condition, the debtor has paid by mistake a sum of money, What is the remedy of the debtor before the fulfillment of condition? a. The debtcr ean recover the sum of money and interests even ifthe creditor acted in good faith, b. The debtor can recover the sum of money but with interests only ifthe ereditor acted in bad fuith, S- The debior can only recover the sum of money without interests even if the eredtor acted in bad faith, 4.‘The debtor can only recover the sum of money without interests if the ereditor acted in good faith; During the pendency of the period in an obligation witha period, the debtor has paid by mistake a sum of money. What is the remedy of the debtor before the arrival of the period? a. The debtor can recover the sum of money plus interests whether the creditor acted in good faith or bad faith, b. The debtor cen recover the sum of money with interests only ifthe cred ¢. The debtor can only recover the sum of money without interests av. 4. The debtor can only recover the sum of money suspensive condition, the debtor hus delivered a determinate or specific thing During the pendency of by mistake, What is the remedy of the debtor? a. Accion of indemnification if the thing is still with the creditor, b. Accion reinvidicatoria if the thing is still with the creditor, €. Accion publiciana if the thing is still with the ereditor, dd. Accion possessoria if the thing is still with the creditor. Page 14 of 34 Scanned by CamScanner122. The following are the rules to be observed in case of improvement, loss or deterioration of the determinate thing during the pendency of the suspensive condition in an obligation to give a determinate thing or pendency of the suspensive period in obligation to give a determinate thing, except If the thing is lost without the fault of the debtor, the obligation shall be extinguished. », Ifthe thing is lost through the fault of the debtor, he shall be obliged to pay damages. ¢. When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor, If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor. If it is improved at the expense of the debtor, he shall have no other right than that granted to the usuffuctuary which means that he shall only have the right to use the improved thing for a reasonable period. Deterioration of the thing, regardless of reason, shall be borne by the creditor. 123, When the thing deteriorates through the fault of the debtor during the pendency of the condition in an obligation to give, what are the alternative remedies of the creditor? a. He may only ask for the rescission of the obligation with indemnity for damages. He may only ask for the performance of the obligation with indemnity for damages. The debtor may choose between rescission of the obligation or its fulfillment with indemnity for damages in either case, d. The creditor may choose between re: damages. scission of the obligation with damages or exact fulfillment with 124. The determinate thin When it perishes When it goes out of commerce. When it disappears in such a way that its existence is unknown or it cannot be recovered. When it is a destroyed generic thing. 8 is considered lost in any of the following instances, except aece 125 When the obligation is subj i ent of the obliga condition? ject to resolutory condition or when the condition has for its purpose the to give, what shall be the obligation of the parties upon the fulfillment of said 2. They shall retain what they have received. b. They shall file an action for damages. ©. They shall return to each other what they have received. 4. They shall rescind the obligation, ‘When the obligation is subject to resolutory condition or subject to a resolutory period or when the condition or period has for its purpose the extinguishment of the obligation to give, what shall be the rule as regards to the fruits and interest of the thing to be returned? The fruits shall be returned by the person who will make the restitution without deducting the expenses for the production, gathering and preservation of the fruits, 'b. The fruits shall be retained by the person who received the thing. ©. The fruits shall be returned by’ the person who will make the restitution with deduction for the expenses for the production, gathering and preservation of the fruits. The fruits shall be retained by the person who received the thing and shall be reimbursed for the expenses for the production, gathering and preservation of the fruits. a 127, It refers to a type of obligation which arises from the same cause and in which each party is a debtor and ‘reditor of the other, such than the obligation of one is dependent upon the obligation of the other. Bilaterial obligations Reciprocal obligations Uniteteral obligations Muhilateral obligations aoge 128, In case of reciprocal obligations, may the injured. party ask for judicial rescission of the ob case one of the obligors or debtors should not comply with what is incumbent upon him? & Yes if there is stipulation of the power to rescind. b, No even if there is stipulation of the power to rescind. © Yes because the power to rescind obligations is implied ia reciprocal ones, 4. No because the power to rescind obligations cannot be implied in reciprocal ones, Page 15 0f34 Scanned by CamScanner~ When one of the obligors cofnmitted breach of obligation in a reciprocal obligation, ‘alternative remedies of the injured party? ¥ ‘a. The injured party may choose between the fulfillment of the obligation with damages or the the obligation with damages. b. The injured party may choose between the fulfillment of the obligation without damages or the rescission of the obligation without damages. c, The injured party may only rescind the obligation with damages. 4. The injured party may only ask for the fulfillment of obligation with damages, 130, When the injured party in a reciprocal obligation elected the fulfillment of the obligation with damages, ‘may he still ask for the rescission of the obligation? ‘a, No under any circumstances because these remedies are alternative. '. Yes because there remedies are successive remedies available to the injured party. c. No as a general rule because these remedies are alternative except where performance has become impossible or there are insuperable and legal obstacle thereto. 4. Yes because the injured party can have them both. 131, ‘When the injured party in a reciprocal obligation elected the rescission of the obligation with damages, ‘may he still ask for the fulfillment of the obligation? ‘a. Yes because there remedies are successive remedies available to the injured party. b. No but there are certain exceptions to the rule. c. No because these are alternative remedies and the injured party cannot have both. 4. Yes because the injured party is protected by law. 132. Which of the following statements concerning reciprocal obligations is correct? 7 I. The court shall decree the rescission claimed, unless there is just cause authorizing the fixing of a period. I. In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. I If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. a. Land it b. Tand IL c. Mand It 4. Tand 133. Itis an obligation which is subject to a space of time which, exerting an influence on obligations as a ‘consequence of a juridical act, suspends their demandability or determines their extinguishment. Conditional obligation Obligation with a period Pure obligation Demandable obligation Bese 134, ‘The following statements concerning obligation with a period is correct, except Obligations for whose fulfillment a day certain has been fixed, shall be demandable when that day comes. Obligation with a resolutory period takes effect at once, but terminates upon arrival of the day certain, A day certain is understood to be that which must necessarily come, although it may not be known when. If the uncertainty consists in whether the day will come or not, the obligation is with a period. 135, ‘The following are the distinctions between a condition and a period, except A condition is an uncertain event while a period is an event that must necessarily come. While a condition gives rise to an obligation or extinguishes one already existing, a period has no effect upon the existence of obligation, but only its demandability or performance and thus, a period does not, carry with it any retroactive effect. ‘A condition may refer to a past event and unknown to parties while a period always refers to the future. 4. A suspensive condition which depends exclusively on the will of the debtors does not annul the obligation ‘but merely authorizes the court to fix the period but a suspensive period left to the debtor’s will shall annul the obligation. oF 136, ‘The following are the requisites of « period,texcept It must be past. It must be future. It must be certain. It must be possible. Bese Transactions Goi Page 16 of 34 Scanned by CamScannerive period and resolutory period are. exdie Both in diem Ex die and in diem, respectively In diem and ex die, respectively. 138, Whenever in an obligation a period is designated, to whose benefit the period is presumed to have been | | ‘blished? , Creditor only \ Debtor only Both creditor and debtor Neither creditor and debtor ' Boge { 139, If there is no stipul incorrect? a. The creditor cannot demand payment before the period stipulated. i b. The debtor cannot make an effective tender and consignatioh of payment before the period stipulated. ©. The term is for the benefit of both debtor and creditor. i 4. The term is for the benefit of the debtor, 1s to whose benefit the period is established, which of the following statements In tase there is stipulation as to whose benefit the period is tstablished, which of the following statements is incorrect? fit is for the benefit of the creditor only, he may demand performance at any time. IE it is for the benefit of the debtor only, he may oppose a premature demand for payment. If it is for the benefit of the creditor only, the debtor cannot compe! him to accept payment before the period expires. If tis for the benefit of the debtor only, he cannot pay validly at any time before the period expires, b. \ Jal. _As.a general rule, the court is not allowed to fix the period of an obligation. The following are the ‘exceptional instances wherein the court may fix the period of an obligation with a period, except a. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended. | 'b. Ifthe period depends upon the sole will of the debtor. i ' ¢. In gase of pure obligation, to prevent unreasonable interpretations of its immediate demandability. 4. Ifthe obligation is pur, simple, unconditional and payable on demand. 142, __ The following are the instances wherein the debtor shall lose every right make use of the period and | therefore the obligation with a period becomes due and demandable, exept | a after the obligation has been contracted, the debtor becomes insolyent and he does not give a guafanty or security for the debt. \ b. Whi the debtor does not furnish to the creditor the guaranties or securities which he has promised. e sn by debtor's own acts he has impaired or destroyed said guaranties or securities after their establishment, unless he immediately gives new one equally satisfactory. | 4. When through @ fortuitous event the guaranties or securities afier their establishment were destroyed, unliss the debtor immediately gives new one equally satisfactory. ‘Whpn the debtor violates any undertaking, in consideration of which the creditor agreed to the period, Whin the debtor ettempts to abscond. g. When the creditor granted grace period or extension of payment to debtor. 143, Itisan obligation where the debtor is alternatively bound by different prestations and itis extinguished by ‘the performance of any of them. a, Altemnative obligations b. Conjunctive obligations ©. Facultative obligations d. Composite obligations 144, The|following statements pertain to alternative obligations. Which is correct? 1. A person alternatively bound by different prestations shall completely perform one of them. T. The creditor cannot be compelled to receive part of one and part of the other undertaking. a. Tonly ‘ b. Honly { ©. Neither I nor II 4. Both T and IL Scanned by CamScanner‘Who has the right of choi Creditor, unless it has buen expressly granted to the debtor. Debtor, unless it has been expressly granted to the creditor. Always with the debtor. ‘Always with the creditor. 146. ‘The following are the limitetions on the right of choice in alternative obligations, except ‘The debtor cannat choose unlawful undertakings. . The debtor eannet choose part of one neesation and part of another. ¢. The debtor cannot choose impossi + or those which could not have been the object of the obligation. 4. The right to choos isible. 147, In alternative obligations, when sheli the choice of prestation produce effect? From the moment itis exercised by the debtor. From the moment it is communicated to the craditor. From the moment the creditor consented! to the cheize, From the constitution of the ebli 148, In altemative cbligations, what is the effect of nctice of choice of prestation to the creditor? ‘The obligations remain to be alternative. The selection or choice is still revocable. The obligation is converted into a sinpl> obligation, Tne obligation becomes a facultative cMigation, 149, In attemstive obligations, v hen shalt the debtor tose the right of choice and thus, the obligation becomes simple? a. When he becomes insolvent b. When he attempts to abscond. ¢. When among the prestations whereby he is alternatively bound, only one is practicable. dd. When be was prevenied by the creditor. 150. What is the remedy of the debtor if through the credivor’s ect the debtor cannet make a choice according, to the terms of alternative sbliyetions? a, ‘The debtor may Sle an action for indemmificw ‘The debtor moy rescind 8, The debtor many asic for full The debtor may cumped the creditor to shligmion with darn foam dh station, ve obligations and through the fault of the debtor one heen lust, what shall be the right of creditor? ston with damages jon without damages. 151 In case the debtor has the right of erode in alte of the things which e object of the obiixation a, He may den ance of tae remaining Me may demers ormance of the remaining p 152, c the things which ary ly hhas become impossible, what shell be the right ef cre a, He shall have the right to indemnity for the value of the lost object with the largest value plus damages. b. He shall have the right ro indemnity forthe value of tne lost object with the smallest value plus damages. c 4 He shall have the right to irdemnity fur tiv value of the last abject plus damages. He shall have the right fo indeemity for flue of the any object plus damages. | 153. In case the debtor Ins the right of choice in alternative abligations aad through the fault of the debtor only ‘one object remains of the diags which are the objacts of alternative obligation and before its performance, it has been lost due to fortuitous event, what shall be tne right of the eredivor? a, He ray demand the valu. object lost duc ts debtor’s fault b. He may demand indemnification for J-nages. He may demand she voluc of ths lest object dost di dd. He has no right to demand anything. = y Framesoork for Guiness Trensactions (BGO1) Page 18 0f34 | Scanned by CamScannerdie: t right of choice in altemative obligations and ‘object remains of the things which are the objects of alternative obligation and Jost due to the fault of the debtor, what shall be the right of the creditor? a ‘He shall have the right to indemnity for the value of the lost object with the largest value plus damages, b. He shall have the right to indemnity for the value of the lost object with the smallest value plus damages. He shall have the right to indemnity for the value of the last object plus damages. He shall have the right to indemnity for the value of the any object plus damages. a9 155, In case the debtor has the right of choice in alternative obligations and through fortuitous event all the objects of alternative obligation have been lost, what shall be the right of the creditor? ‘a. He shall have no right. b. He shall have the right to indemnity for the value of the lost object with the largest value plus damages. ©. He shall have the right to indemnity for the value of the lost object with the smallest value plus damages. 4. He shall have the right to indemnity for the value of the last object plus damages. 156. When the choice has been expressly given to the creditor, the obligation shall cease to be alternative from the day when the selection has been communicated to the debtor. Until then, the responsibility of the debtor when the right of choice has been granted to the ereditar shall be governed by the following rules, except a. Tf one of the things is lost through a fortuitous event, he shall perform the obligation by delivering that Which the creditor should choose from among the remainder, or that which remains if only one subsists. b. Ifthe loss of one of the things occurs through the fault of the debtor, the creditor may claim any of those subsisting without right to damages, or the price of that which, through the fault of the former, has disappeared, with a right to damages ©. Tall the things are lost through the fault of the debtor, the choice by the ereditor shall fall upon price of any one of them, also with indemnity For damages 4. Tall the things are lost through fortuitous event, the debtor shall be tiable for damages, 157, It is an obligation wherein only one prestation has been agreed upon but the obligor may render another in substitution. a. Alternative obligations b. Conjunctive obli ©. Facultative obligations 4. Composite obligations 158. What is the effect of the loss or deterioration of the thing intended as a substitute in a facultative obligation before the substitution? a, The debtor becomes liable for damages. 'b, The creditor may rescind the obligation with damages ¢. The debtor shall indemnify the creditor. 4. The debtor shall not be liable on account of the loss. 159. What is the effect of the loss of the thing intended as a substitute in a facultative obligation after the substitution? a. The debtor shall not be liable for the loss. b, The obligation is extinguished even if the loss is not due to fortuitous event. ¢. The debtor shall be liable forthe loss on account of his delay, negligence or fraud. 4. ‘The creditor has no right against the debtor. 160. ‘What is the effect of the loss of the principal object in a facultative obligation before the substitution? The debtor is liable if the loss is due to fortuitous event. ‘The obligation is extinguished if itis due to fortuitous event. The debtor is not liable even ifthe lost is due to his fault. The obligation is not extinguished even ifthe loss is due to fortuitous event. 161. What is the effect of the loss of the principal object in a facultative obligation after the substitution? a. The debtor is liable if the loss is due to fortuitous event. b. The debtor is liable for damages if the loss is due to his fault. ©. The obligation is extinguished because of the lost of the object. 4. The obligation remains to exist. . 162. Ina facultative obligation, to whom shall the right of choice belong? Always creditor Always debtor ; Debtor unless granted to the creditor |. Creditor unless granted to the debtor Pe b. o 4. Scanned by CamScanner‘ions between alternative obligation and facultative obligation, except . je the fulfillment of one is suficent, determined by the shelce ofthe dettor who generally ha the right of election while in faoulucioe obligation, only one thing is due, but the debtor has reserved the righ to substitute in with ano »- In altemative obligation, the loss of one ofthe things due by reece of debtor's fault may affect the sbiigation in case the right to choose is given to creditor while ir reubatse obligation the loss before spctution of that which may be given as substitute even due tothe fault of dete eee not affect the obligation, ¢. In alternative obligation, the loss of one of the things due by reason of fortuitous event does not Saneuish the obligation while in facultative obligation, the loss ofthat which duns tee object of the {bligition by reason of fortuitous event will extinguish such obligation, 4 fn altemative obligation, the right of choice ean never be granted to the creditor while in facultative obligation, the right of choice may be granted to ereditor 164. It is an obligation where the debtor has to perform several prestations and it is extinguished only by the performance of all of them, &. Alternative obligations b. Conjunctive obligations ©. Facultative obligation 4. Composite obligations 165. Which of the following statements is correct? 1. Joint obligation is one in which each ofthe debtors is liable only fora propo creditor is entitled only to a proportionate share of the credit. 5 11. Solidary obligation is one in which each debtor is linble forthe entre obligation and each credit to demand the whole obligation a Tonly b. Monly Both land II 4. Neither I nor II 166. jhe concurrence of two or more creditors or of two or more debtors in one and the same obligations implies that the obligation is (What is the presumption of law if the obligation is silent?) : a Joint b. Solidary c. Either joint or solidary if silent 4. Neither joint or solid 167. ‘A, B and C have obligation amounting to P6,000,000 to D and E, How much may D collect from A if the obligation is mixed joint? ‘a. 6,000,000 'b. 3,000,000 c. P2,000,000, 4. 1,000,000 168, Using the same data in preceding number, how much may D collect from A if the obligation is passive solidary? . P6,000,000 b. 3,000,000 &P2,000,000 4. 1,000,000 169. Using the same data in preceding number, how much may D collect from A if the obligation is active solidary? 76,000,000 3,000,000 2,000,000 1,000,000 170, Using the same data in preceding number, how much may D collect from A if the obligation is mixed solidary? £P6,000,000 . 3,000,000 ¥P2,000,000 1,000,000 Scanned by CamScanner : '| a. The folowing ae the instances when the obligatpn i considered solidary, except a. When fhe obligation expressly so states that it is solidary. b, When the obligation is indivisible. ¢. When the law requires the obligation to be solidary. d, When the nature of the obligation requires the obligation to be solidary. 172, The following terms refer to solidary obligation, except ‘4. Mancomunada solidaria ' b. Joint and several ©. Prorata 4. Insolidum 173. The following are the principal consequences of the joint charadter of the obligation, except a. The demand by one creditor upon one debtor produces the effects of default only with respect to the creditor who demanded and the debtor on whom the demand was made, but not with respect to the others. b. The interruption of prescription by the judicial demand of one reditor upon a debtor, does not benefit the other creditors nor interrupt the prescription as to other debtors. © The vices of each obligation arising from the personal effect of 4 particular debtor or creditor do not affect. the obligation or rights of the others. d. The insolvency of a debtor increases the respo: ity of his co-debtors and it authorizes a creditor to demand anything from his co-creditors in ease of insolvency of a debtor. i 174. The following statements pertaining to joint and sotidary obligations are correct, except a. If the division is impossible, the right of the creditors may be prejudiced only by their collective acts, and the debt can be enforced only by proceeding against all the debtors and if the latter should be insolvent, the others shall not be liable for his share, | b. The indivisibility of an obligation gives rise to solider ©. The solidarity of an obligation does not imply indivisibility, | 4d. Solidary may exist although the creditors and the debtors may not be bound in|the same manner and by the same period and conditions, | i 115. Itis a solidarity that exists among the ereditors. & Mixed solidarity b. Active solidarity ce. Pes deidny solidarity | d. Simple ! | 176. The following statements pertaining to solidary obligation are correct, except | : a. Each one of the solidary creditors may do whatever may be useful to the others, but not anything which may be prejudicial to the latter. 'b. A solidary creditor can assign his rights without the consent of the others. c. The debtor may pay any one of the solidary creditors, | 4. If any demand, judicial or extrajudicial, has been made by any one of the solidary creditors, payment should be made to him, 177. The following acts made by any of the solidary creditors with any of the solidary debtors shall extinguish the obligation, except ‘Novation Compensation Extension of time for payment Confusion Remission spose 178, The following are the effects of novation, compensation, confusion or remission made by any of the solidary creditors or with any of the solidary debtors, exeept | i ; a. As between creditors and debtors, any of these acts will extinguish the obligation, so that no creditor may thereafter sue any debtor, except in case of novation, where there may be no change or only a partial change of parties, but in this Inst case, it is no longer the original obligation, but the new one, which would be sued upon. i b. As among co-creditors, the act of any of them in extinguishing the cbligation with respect to the debt detbors,\does not prejudice the rights of the cther ereditos to recover their respective share in obligation from the creditor who effected the novation, compensation, confusion or remission. : AAs among co-debors the codebtor as to-whora she obligation was estngtished ‘cannot recover from his other co-debtors more than their respective shares in whatever he may have given up or lost as the consideration for the extinguishment of the obligation 4. In case of remission, the co-debtor can recover anything from the other debtors. Scanned by CamScanner179. The following statements conceming the payment of solidary obligat conceit igation ae correct, 4% Payment made by one of the soltdary debtors extinguishes the obligation and if tee ty more sl 4, sea ft pay, he redtor may chose whish fe fo ase okey He who made the payment may claim from his codebtors only the share which coresponds ; the interest for the payment already made. “ —— ©. If payment is made before the debt is due, no interest forthe intervening period 4. When one of the slidary debtors cannot, because of his insolvency, reimburse tis shore av debor saying the obligation, ne alone by the payi nets ele such shall be beme alone by the paying debtor and the other co-debtors shall not 180. ‘Which ofthe following statements is Incorrect? @. Payment by a solidary debtor shall not entitle hira to reimbursement from his co-debtors i ryment ‘ is CO-¢ if such is made after the obligation has prescribed or become illegal. Sere be {emision made bythe credtor of the share which affects one of the solidary debtors doesnot release latter from his responsibility towards the co-debtors, in case the debt had be ic of them before the remission was effected. ae ee Oe ©. The remission of the whole obligation, obtained by one the solidary debtors, entitles him to reirabursement from his co-debtors, d. ff the thing has been lost or if the prestation has become impossible without the fault of the solidary debtors, the obligation shall be extinguished. 181, Which of the following statements is correct? 1. Ifthe thing has been lost or if the prestation has become impossible and there was fault on the part of any of solidary debtors, al shall be responsible to the ereditor, forthe price and the payment of damages and interest, Without prejudice to their action against the guilty or negligent debtor. Hf through a fortuitous event, the thing is lost or the performance has become impossible after one of the Solidary debtors ines incurred in delay through judicial or extyajudicial demand upon him by the ereditor, any of the solidary debtors shall be responsible to the oreditor for the price and the payment of damages and interests, without prejudice to their action against the debtor guilty of delay. a. Toniy b. Honly ©. Both I and {1 d. Neither Tnor 1 182. The following are the defenses that may be availed of by the solidary debtor in actions filed by the creditor, exeept a. Deferses which are inherent from the nature of the obligation b. Defenses personal to defendant-debtor c. Defenses personal to other deblors az regards thet part of the debt for which the latter are responsible 4d. Defenses personal to other debtors for the whole obligation 183, ble and indivisible obligations are correct, except a in refers to che object or thing and not to the performance of the obligation b. A divisible obligation is one whici is suscoptible of partial performance; that is, the debtor can legally perform the obligation by parts and the crecitor cannot demand e single performance of the entire | obligation. ' : : a 184, The foliowing statements pertaining to joint indivisible obligation are correct, except { a. Toenforce a joint indivisible obligation, there is necessity of collective fulfillment and the action must be > against all the debtors. : 7: In case of non-performance by any of the debtors, the cbligation is converted into a liability for losses and > damages, which is divisible. : : i ¢. The debtors wito may have been ready to fulfill their promises shall not contribute to the indemnity = beyond the corresponding portion of she price of the thing or of the value of the service in which the obligation consists. 1 4. A joint indivisible obligation can be compelled by specific performance if anyone of the debtors does not ‘or cannot comply with his undeiteking while the other debtors are willing. 185, ‘What is the remedy of the creditor in caze one of the debtors does not comply with his undertaking in a ‘Action for specific performance “Ask third person to fulfil the obligation at the expense ofall the debtors ; an ‘or conyert the action to monetary amount q ‘entire obligation but the other debtors are willing and ready’? a Page 22 of 34 d Scanned by CamScanner‘The following are the rules concerning the athisibtty ‘or indivisibility of an obligation, except + Obligations to give definite things and those which are lot susceptible of partial performance shall be | deemed divisible. ' When the obligation has for its object the execution of certain number of days of work, the accomplishment of work ty metrical units, or analogous things which by their nature are susceptible of partial performance, it shall be divisible. j . Even though the object or service may be physically divigbte, an obligation is indivisible if so provided | by law or intended by the parties. i 1 d. In obligations to do, divisibility or indivisibility shall be determined by the character of the prestation in each particular case. | 187, {an obligation which has an accessory undertaking to assume greater liability in case of breach, a. Obl b. © tion with a period d. Obligation with a substitute 188, The following statements conceming obligations with a perlal clause are correct, except & The penalty stipulated must not be contrary to law, morals, or public order to be enforceable. Obligations with a penal clause must be construed strictly against the awarding of penalty. Incase of breach of obligations with a penaliclause, the debtor cannot have both enforcement of penalty | in case of non-compliance of obligation and specific performance of obligation. 4. The debtor has the absolute right to just pay the penalty instead of fulfilling the obligation. 189. The following are the rules to be observed in applying obligations with a penal clause, except Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded b. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor and even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable. i & The nullity of the penal clause carries with it that of the principal obligation, 4d. The nullity of the principal obligation carries with it that of the penal clause. 190. In obligation with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance. In obligation with a penal clause, when nay the ereditor excoptionelly demand payment of damages and interest despite the presence of penalty? : a. If there is stipulation that damages and interests may be demanded in caida ‘to penalty in case of breach of pbligation with a penal clause. \ b. Wien the debtor is guilty of bad faith or fraud in the breach of the obligation. ©. When the debior fails to pay the penalty in case of breach. | d. Any of the choices. 191. ‘The following are the modes of extinguishment of obligations, except: (No-Co-Me-Re-Pa-Lo-Pre-Re-Ful- gz No|- Novation Col Compensation or Ofiset Me — Merger or Confusion Re ~Remission or Donation or Condonation or Renunciation Pa Payment or Performance Lo! Loss of the determinate thing due Pre— Prescription of right to file an action Re~—Rescission of Rescissible Contract Full - Fulfillment of Resolutory Condition or Resolutory Pe An~ Annulment of Voidable Contract Attainment of suspensive condition or arrival of suspensive period d wrreRr me sere 192, __ It refers to the mode of extinguishment of right to file an action or obligation by the mere lapse of time fixed by law. a. Novation b. Pregcription © Compensation 4. Remission 193, _ What is the prescriptive period for civil action based on oral contract? a. 6 ydars b. 10: ce 4 4.8 years. = — Scanned by CamScanner195. 196. 197. 198, 199. 200. 201. based on writen contract? c, 4years 4. 8 years What is the prescriptive period for civil action based on quasi-delict or tort? Gyears 10 years peep ‘What is the prescriptive period for civil action based on quasi-contract? 6 years 10 years 4 years ! 8 Years Whats the preserintve period for ii action based on obligation rete by law o judgment of court? ‘years 10 years 4 years 8 years ‘What is the prescriptive period for civil action of forcible entry and detainer or based on oral defamation? = Lyear 10 years 4 years 8 years What is the prescriptive period to file an action to recover movable property? Bege 4 4. . G years 10 years 4 years 8 years Bose ‘What is the prescriptive period to file a real action over immovables? 30 years 10 years 4 years 8 years For all other actions not provided by Civil Code or Special law, what is the prescri og ive period for filing such action? a. Gyears b. 10 years ©. 4 years: d. 5 years This is a mode of extinguishing obligation by which a person is barred from filing an action because of 202. failure or neglect for an unveasonable and unexplained length of time to do that which, by exercising due 203. diligence, could or shoud have been done earlier, thus, giving rise to # presumption that the party entitled to assert it either has abandoned or declined to assert it. This is an equitable doctrine but not based on substantive law. Laches Prescription Novation Confusion poo . This equitable doctrine is based on the principle that a person shall be precluded from denying an ‘admission or representation against the person who has relied on such admission or representation. a. Estoppel b, Laches ©. Prescription d. Novation Scanned by CamScanner205, 206. 207. 208. 209. What will stop the running of the eesecigHaloas ihalalatalecle When the action is filed before the court Pod fF Slings civil action? b. When there is a writen extrajudicial demand by the creditors. & When there is any written acknowledgement of the debt by the debtor. 4. Any of the above. {iis a mode of extinguishing obligation which refers to the fulfillment ofthe prestation due. & Novation b. Payment © Compensation d. Merger The following are the requisites ofa valid payment, except t TRe Payment must bein accordance with the terms and conditions of the obligation b. The person paying as well as the one receiving payment should have the required capacity. ©. Itshould be made by the creditor to the debtor, 4. Tt should be made at the right time and place, ‘The following statements concerning payment are correct, except 7 Payment means only delivery of money but not performance, in any other manner, of an obligation. A debt shall not be understood to have ‘been paid unless the thing or service in which the obligation consists has been completely delivered or rendered, as the case may be. ©. If the obligation has been ‘substantially performed in good faith, the obligor or debtor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee or creditor, 4. When the obligee or creditor accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. Is the creditor required to accept payment or performance by a third person who has no interest in the fulfillment of the obligation? a. Yes because it is provided by law. b. Yes because it is for the benefit of the creditor. ©. No, unless there is stipulation to the contrary. 4. No, under any circumstances. 210. What is the right of a third person who pays for the debtor without the knowledge or against the will of the debtor? ; a. The third person may demand the whole amount paid from the debtor. b. The third person cannot recover any amount. tL 7 ¢. The third person may compel the creditor to subrogate him in his rights, such as those arising from a mortgage, guaranty or penalty. ; 4. The third person may recover only insofar as the payment has been beneficial to the debtor. 2. The following statements concerning payment made by a third person who does not intend to be eimbursed by the debtor are correct, except ‘a. It is deemed to be a donation. b. Itrequires the debtor’s consent. an ©. The payment isin any case valid as othe creditor who has accepted it. . The payment will subrogate the third person with creditor's rights. Scanned by CamScanner212. Which of the following statements is correct? 7 I. In obligations to give, payment made by one who does not have the free disposal of the thing due and capacity to alienate it shall not be valid, i ‘MI. Payment to a person who is incapacitated to administer his property shall be valid if he has kept the thing delivered or insofar as the payment has been beneficial to him. a. Neither I nor If b. Both I and It ©. Tonly 4. Monly 213, ‘The following are the persons to whom payment shall be made, except 4. Person in whose favor the obligation has been constituted or creditor b. Any third person ©. Successor of interest of creditor 4. Any person authorized by the creditor to receive payment 214. As a general rule, payment to a third person is not valid. The following are the exceptional instances ‘herein payment made to a third person is valid, except a. When in good faith, the debtor pays to one in possession of the credit. b. When, without notice of the assignment of the credit, the debtor pays to the original ereditor. ©. When the debtor was judicially ordered to retain the debt. 4. When the payment to a third person redounded to the benefit ofthe ereditor. 21s. Payment made to a third person shall also be valid insofar as it has redounded to the benefit of the creditor. As a general rule, the debtor must prove that the payment to a third person redounded to the benefit of the creditor. The following are the exceptional cases wherein the debtor need not prove that the payment to third person redounded to the benefit of creditor for such payment to be valid, except a. Ifafter the payment, the third person acquires the creditor's rights. Ifthe third person is not authorized by the creditor. ©. If the creditor ratifies the payment to the third person. 4. If by the creditor's conduct, the debtor has led to believe that the third person had authority to receive payment. 216. The following statements concerning payment are correct, except a, Payment made to the ereditor by the debtor after the latter has been judicially ordered to retain the debt shall not be valid. b. The debtor ofa thing cannot compel the creditor to receive a different one, although the latter may be of the same value as, or more valuable than that which is due. ©. In obligations to do or not to do, an act or Forbearance cannot be substituted by another act or forbearance against the obligee’s or creditor's will. . : 4. When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not been stated, the creditor can demand a thing of superior quality and the debtor can deliver a thing of inferior quality. 217. ‘Who shall shoulder the extra-judicial expenses required by the payment of an obligation? Debtor Creditor Government ‘None of the above 218. The following statements concerning partial payment are correct, execpt = : a. The creditor cannot be compelled partially to receive the prestations in which the obligation consists except when there is stipulation to the contrary. b. The debtor may be required by the creditor to make partial payments. ~c. When the debts in part liquidated and in part unliquidated, the creditor may demand the payment of the former without waiting for the liquidation of the latter. d. When the debt is in part liquidated and in part unliquidated, the debtor may effect the payment of the former without waiting for the liquidation of the latter. 219. It refers to such currency which in a givon jurisdiction can be used for the payment of debts, public or private, and which cannot be refused by the creditor. a. Legel tender b. Foreign currency ©. Local currency dd. International currency (GEAR Regulatory Framework for Business Transactions (B601) Page 26 of 34 Scanned by CamScannerfi CPAR — Regulatory Framework for Business Transactions (B80) ‘2. Manager's check is as good as cash and considered legal tender. mista b. Teentavo coin, § centavos coin, 10 centavos coin, and 25 centavos coin are limited only up to P100 as legal tener. in, PS coin and P10 coin are limited only up to P1,000 as legal tender. 1, PSO bill, P100 bill, P200 bill, PSOO bill and P1000 bill have no limitation as legal tender. crning the payment of debts in money, exeept a shall only be made in Philippine peso. The payment of debts in money shall be made in the currency stipulated. : ¢. In ease the delivery of the currency stipulated is not possible, the payment of debts in m made in the currency which is legal tender in the Philippines. 4. The delivery of promissory notes payable to order or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed or when through the fault of the creditor they have been impaired or when the amount has already been credited to the bank account of crediter. fe. Injease an extraordinary currency at the time of the establishment of the obligation shall be the basis of payment, ment to the contrary. 21 ‘The following are the rules cone: The payment of debis in money joney shall be inflation or deflation of the currency stipulated sholild supervene, the value of the unless there is an 222. Where shall payment of an obligation be made? fa, Wherever the thing might be at the moment the obligation was constituted or perfected. b. Place designated in the obligation. ©. Dgmicile of the debtor. 4d. Domicile of the creditor. 223. Where shall payment of an obligation to deliver a determinate thing be made if there is no express stipulation as to the fa. Wherever the thing mig b, Place designated by third party ©. Domicile of the debior. 4. Domicile of the creditor. ace of payment? bye at the moment the obligation was constituted or perfected. 224, here shall payment of an obligation to deliver an indeterminate thing be made if there is no express stipulation|as tothe place of payment? ‘a. Wherever the thing might be atthe moment the obligation was constituted or perfected. b. Place designated by third party. ©. Ddmicile of the debtor. d. Damicile of the creditor. 225, nk following are the special forms of payment, excepi Dation in payment Application of payments Payment by cession ‘Tender of payment and consignation 226. It defers to a special form of payment whereby a property is alienated to the creditor in satisfaction of a ‘debt in money when the loan in money is already due at the time of change, ‘a, Application of payment b. Payment by cession e. Dation in payment 4. Tehder of payment and consignation 227. If the obligation to pay a sum of money is changed to obligation to deliver a determinate thing before the ‘maturity date of the loan, the obligation is considered to be extinguished by Payment by cession Novation Cession Compensation aose ing obligation shall be governed by the provisions of | 228 Dation in payment as a mode of exting: a. Lawon Barter b. Law on Obligation c. Lawon Sales d. Law on Credit Transactions Scanned by CamScanner229, Tt refers to a special type of payment which involves the volun 321 voluntary abandonment of the universality of the Property of the debtor for the benefit of his creditors, iv order that such Property may be applied to the payment of Dation in payment Application of payments Payment by cession or Assignment Tender of payment and consignation Bose 230. We following are the distinctions between dation in payment and payment by cession, except % Mhereas dation en pago transfers the ~wrershinsver the thing afenated tothe creditor we in payment 8 cession only the possession and administation (not ownership) ae transferred to the creditors eth on b, wytorizaton 19 convert the property into cash with which the debts shal be paid. ‘While dation in payment may totally extinguish the obligation and release the debtor, the assignment only ae the credits to the extent ofthe amount realized from the properties assigned, unless otherwise eed upon, © While dation in ofthe debior, 4. White in dation in payinent, the tranefor is only in favor of one ereditor to sat cession, there are various creditors, © Dation in payment is govenied by Law on Obligation while Payment by Cession is governed by FRIA of payment involves only some specific thing, payment by cession involves all the property ‘a debt, in payment by 231 wit refers to the designation of the debt which is being paid by a debter who has several obligations of the same Kind in favcr of the creditor to whom pay-nant is nade, 7 mn in psyinent Application of payments Payment 'y cession Tender of payinent and consignation eege 232, Who has the zi Debtor Creditor Both debtor and creditor Neither debtor nor creditor C10 application of payments? pegs 233, Which of the following staterrents is correct? 1 Unless the partes se stipuiats, or wien the anplication of payment is mace by the party for whose benefit the term has been constitute |, apniicaticn shall not be atade at (@ érb's «hich are not yet dee, | Th Whe devtoz accepts fr cr 8 cove ‘h an agplication of the payment is made, the debtor canact complain ofthe same ul Foy invelidating the contract | | a. Bot lerd I b. Neither { nor 17 c. Toniy d. Donly 234, ‘The fotlowing are limitations to the preferontiel right of te Gedxor to choose the debt to which his Payment is to be made, except a. If the debtor owes two debts, ere for PSO and anoth ‘cannot choose £9 apply it to tte F200 debi b payment Bb. If thers is only one obligation beating stipulated interest, the debtor cannot apply the payment to the terest before the capital c. The debtor cannot apply the peyiment to a debt thar is not yet liquidated 4. He cannot chooss a debt with a period fur the bene“t of the creditor, whem the period las not yet arrived. & When there isan ayreemen: 9s to the debts which are to be pak’ frst, the debtor cannot vary the agreemen:: yor Tor 129 use the creditor | and he makes a payment of PSO, he nnot be compelled to accept partial 235. The following atv the miles for app application of payrient, except 2. Ifthe debt produces interest, paysosnt shall Se made ci thy interest first before the principal amount of the Joon. b. When the payment cannot be applies in avcondonce with the preceding ruies, or if application cannot be inferred from other circumstances, the Cebt which i most onerous or burdensome to the debtor, among, those due, shall be deemed to liave been satisfied. fe. If the debt: due are of the same anture and burden, the payment shall be applied to all of them proportionately. +d. What the time of paymear the debtor oes stot exercise his right to apply it to any of his debts, the application made by the creditor shall bs followed even ifthe debior docs not consent to such application. rr eee ee ET CRAR — Regulatory Framework fin Business Fansactions (8601) Page 28 of 34 ication of payments in case the debtor does not exercise his right to Scanned by CamScanner237. ‘of payment is the manifestation made by the debtor Salton vith the offer of immediate performance. Consignation is the deposit of prescribed by law. i a. Tonly b. Ionly i . Neither Inor It i 4. Both Iand I : ” jing statements is correct} shi of the following i fied f the object of the obligation in a competent court in accordance with rules j ‘What is the remedy of the debtor if the ereditor to whom tender of payment has been validly made refuses * ‘without just eause to accept it? 238. debtor shall be released from his obligation by the consignation of the thing or sum due. a. Consign or deposit the thing or sum due to the court b. Payment by cession c. Dation in payment 4. Application of payments cause to accept it, the it de refuses without just If the creditor to whom tender of payment has been made ccciaien wiles tender of jayment shall release the debtor from responsibility in the following exceptional instances, except 239. a. When the ereditor is absent or unknown, or does not appear at the place of payment b, When the creditor is incapacitated to receive the payment at the time it is due When, without just cause, the creditor refuses to give a receipt ; ‘When two or miore persons claim the same right to collect, When the title of the obligation has been lost ‘When the debtor makes an invalid tender of payment apap In order that consignation may be effective the debtor must comply first with the following requisites or formalities, except 240. 241. m 242, declared that it has been validly made, except a, The debt must be due. The consignation was made by debtor because of some legal cause provided by law. ©. Previotis notice of the consignation has been given to the persons interested in the performance of the obligation. (1* notice to creditor of intent to consign) | 4. The amount or thing was placed ut the disposal of the court. ¢. Affer the consignation, the persons interested were notified thereof, (2°) notice to creditor of actual consignstion) £. The debtor must personally deposit the thing to the court and not through his counsel. Who shall shoulder the expenses of a valid consignation? Debtor Creditor Government Nahe of the above Which of the following statements is correct? Once the consignation has been duly made, the debtor may ask the judge to order the cancellation of the obligation to extinguish the obligation. Refore the creditor has accepted the consignation, or before a judicial declaration that the consignation bas been properly: made, the debtor may withdraw the thing or the sum deposited, allowing the obligation to force. only: Honly Both Tand IT Nether I nor It eoerR ‘The following are effects once the consignation has been accepted by the creditor or the court has 4. The debtor is released in the same manner as if he had performed the obligation at the time of the ccosisignation, because this produces the same effect as a valid payment. b. The accrual of interest on the obligation is suspended from the moment of consignation. ©. The deterioration or loss of the thing or amount consigned cxeurring without fault of the debtor must be bome by’ the creditor, because the risks of the thing are transferred to the creditor from the moment of deposit 4. Any increment or increase in value of the thing after the consignation inures to the benefit of the debtor. se sieeessaaeerp-ap-eeseneeanesnenar Per HEeenReERNERnmeEe ed CRAR= Regulatory Fr ‘Business Transactions (8604) Page 29 of 34 ge Scanned by CamScanner243, ‘etter ot fslosng As the effect if, aftr the contignation hes been made, the creditor should authorize the &. The creditor shal lose ere re se every preference which he may have over the thins treater sexdebtors shal be released oftheir solidary status But no of ther share in the obligation and ote ‘co-debtors remain to ‘be jointly liable, la The Bvarantors and sureties shall be released. 1 Obligation shall be ‘extinguished, 244. S 2 General rule, the loss of the specific thing cn account of fortuitous event shall extinguish the obligation. The follow, : is fortuitous eve et are the exceptions to the general rule wherein the debtor chal still be liable even there a. 1e1 a Bun he law expressy proves that the debior shall be able even ithe loss edu to forts event « When tre antes stipulation the obligor is made hable even if loss occurs through fortuitous events. When te mare of the obligation requires ths assumption of risk, When te a or nestigence ofthe debtor concurs withthe fortuitous event in causing the loss. f When the 2s Ce. The renunciation of the principal debt shal extinguish the accessory obligations. . The renunciation of the accessory obligation shall extinguish the principal debt. |. It is presumed that the accessory obligation of pledge has been remitted when the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a third person who owns the thing, a pes 255. It is a mode of extinguishing obligation that refers to the meeting in one person of the qualities of creditor and debtor with respect to the same obligation. &. Compensation Condonation Confusion or merger |. Novation 256. ‘The following are the requisites of merger or confusion, except a. It must be gratuitous and requires acceptance by the obligor. ', Itmust take place between the creditor and the principal debtor. ‘The very same obligation must be involved, for if the debtor acquires rights from the creditor, but not the particular obligation in question, there will be no merger. ‘The confusion or merger must be total or as regards the entire obligation. 251. ‘The following statements concerning merger or confusion are correct, except 1. The effect of merger is to extinguish the obligation. ‘Merger which takes place in the person of the principal debtor or creditor benefits the guarantor. Merger which takes place in the person of the guarantor extinguishes the principal obligation. Confusion does not extinguish a joint obligation except as regards the share corresponding to the creditor or debtor in whom the two characters concur, ce a. 258, It is a mode of extinguishi are reciprocally debtors and cre a. Novation b. Compensation or Offset cc. Merger Remission ig to the concurrent amount, the obligations of those persons who in their own right ors ofeach other. CRA Regulatory Framework for Business Transactions (eon) Page 31 of 34 Scanned by CamScanner259, Which of the following statements pertain to facultative compensation? i ‘It is a compensation which takes place by operation of law because the requisites of law are present. 7 b. It isa compensation which can be claimed by one of the parties who, however, has the right to object t0 it, ‘such as when one of the obligations has a period for the benefit of one party alone and who renounces period so as to make the obligations due. Its compensation wherein the partes agree to compensate their mutual obligations even if some req of legal compensation are lacking. It is a compensation decreed by the court in a case where there is a counterclaim. ° 260. The following statements conceming compensation sre corect, except The guarantor may set up compensation as regards what the ereditor may owe the principal debtor, b. Compensation may be total or partial and when the two debts are of the same amount, there is a total compensation. ©. The partes cannot agree upon compensation of debts which are not yet due, d. Ifone of the parties to a suit over an obligation has a claim for damages against the other, the former may set it off by proving his right to said damages and the amount thereof. © When one or both debis are rescissible or voidable, they may be compensated against each other before they are judicially rescinded or avoided. a 261 ‘The following are the requisites of legal compensation or compensation by operation of law, except a, Each one of the obligors be bound principally, and thet he be at the same time a principal creditor ofthe other. b. Both debts consist in a sum of money, or ifthe things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated. ¢. Both debts must be due. i 4. Both debts must be unliquidated and nondemandable. i €. That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. Which of the following debts can be the subject of lepal compensation? debts only ,rescissible, voidable and unenforceable debts only ©. Valid, rescissible and voidable debts only 4d. Valid and rescissible debts only 263. The following are the exceptional instances wherein legal compensation may not take place even if all the requisites for legal compensation concur but facultative compensation may take place, except ‘a. When there is a renunciation of the effect of compensation by a party. b. When one of the debts arises from the obligations of a depositary in depositum ©. When one of the debits arises from the obligations of a bailee in commodatum, 4d. When the one of the creditor has a claim for support due by gratuitous ttl, fe. When one of the debts consists in civil lability arising from a crime. f. When one of the debts pertains to taxes. g. When the debts are payable in different places. 264, ‘The following statements pertaining to legal compensation are correct, except Legal compensation takes place by operation of law even though the debts may be payable at different places, but there shall be an indemnity for expenses of exchange or transportation to the place of payment. Ifa person should have against him several debts which are susceptible of compensation, the rules on the application of payments shall apply to the order of the legal compensation. ‘When all the requisites for legal compensation are present, compensation takes effect by operation of law. When all the requisites for legal compensation are present, both debts to the concurrent amount are extinguished only ifthe creditors and debtors are aware of the compensation, b. ae by the substitution or change of the obligation by a subsequent 265. It is a mode of extinguishment of an obli ‘one which extinguishes or modifies the first. Compensation Novation Condonation Merger pose 266, ‘The following are the requisites of novation, except ‘There must be a previous void obligation. ‘There must be agreement of all partes to th new contract. ‘There must be extinguishment of the old contract, ‘The new obligation must be valid. 261. a 'b. Substituting the persons of the debtor (Exprdmission or Delegacion) . Subrogating a third person in the rights of thk creditor (Subrogation whether legal or conventional) Page 32 of 34 Scanned by CamScanner269, 210. an. Of the following statements conceming the type of novation is incorrect? creditor. b. Objective or real novation isthe change of the obligation by|substituting the object with another or changing the principal conditions. © There is implied novation when there is such an incompatibility between the old and the new obligations that they cannot stand together, 4. There is total novation when there is only a! modification|or change in some principal conditions of the obligation, ' Which of the following statements concerning novation is incorrect? 2. In order that an obligation may be extinguished by another wich substitutes the same, it is imperative that it be so declared in unequivocal terms, b. Novation is never presumed, i ¢- There is implied novation ifthe old and new obligations are on every point incompatible with each other, 4. Novation must only be expressed but it cannot implied, - i The following statements conceming novation are correct, except When the principal obligation is extinguished i consequenceof a novation, accessory obligations may subsist only insofar as they may benefit third person who did not giveltheir consent. | . If the new obligation is void, the original obligation was estinguished, unleis the partis intended that the former should subsist in any event. © The novation is void if the original obligation was void, except when annulment may be claimed only by the debtor, or when ratification validates acts which are voidable, 4. If the original obli the same condition, unless itis otherwise stipulated, May the shortening of the ttm of contract result to implied novation? a. Yes in all cases, >. Noinall cases. | ©. Asa general rule, yes, especially if there is significant shortening of term of éontract, which is the principal Condition of the contract, such in the old case of Kabalkalan vs Pacheco wherein the term of right of way is significantly reduced to 7 years from 20 years. 4. Yes even if the shortening does not result to incompatibility between the first ard second contract. 272. the extension of the term of the contract result to implied novation? a. Yes in all cases b. Nolin all cases ©. Asja general rule, no, unless the change will show that the new contract is clearly incompatible with the old tract so that both contracts cannot exist together. H 4. Ye} because implied novation caa be presumed eveu in the absence of supporting circumstances. 273. ich of the following statements concerning novaticn involving substituting a new debtor in the place of the 274, ‘original debtor is correct? i a. It may be made even without the knowledge or ageinst the will of original debtor, but not without the consent of the creditor. b. It may be made without the consent of creditor. ©. Iteannot be made against the will of original debtor. d. It ust ‘be made with the knowledge of original debtor. It is one of the two types of novation involving the change of original debtor wherein the initiative does not ‘emanate from the original debtor and may be made even without his knowledge since it consists in a third person assuming the obligation and it logically requires the consent of third person and the creditor, Delegacion Legal subrogation Conventional subrogation pese 215. It : cone of the two types of novation involving the change of original debtor wherein , the original debtor CRAR— Regulatory Framework for Business Transactions (8601) (Gelegante) Offers and the creditor (delegatario) accepts a third person (delegado) who consents to the substitution, 50 that the consent of these three parties is necessary. a. Expromission b. Delegacion ©. Legal subrogation a one subrogation | Page 33 of 34 Scanned by CamScanner a hi a ot personal novation is the modification of the obligation by the change of the subject; itis passive if there is substitution of the debtor, and it is active when h third person is subrogated in the rights of the igation was subject to a suspensive or resolutory condition, the new obligation shall be under268, spies of the following statements concerning {he typo of novation is Incorrect? | \ j 8 Sabjective or personal novation is the modification of the obligution by the change of the subject; it is passive Ur here Is substitution of the debtor, and k is active when h thitd person is subrogated in the rights of the creditor. b. Objective or real novation Is the change of the obligation by|substituting the object with another or changing the principal conditions, ‘& There is implied novation when there is such aun incompatibility between the old and the new obligations that they cannot stand together. a a ‘ total novation when there is only a modification|or change in some principal conditions of the obligation. : I 1 269, Which of the following statements concerning novation is incorrect? ! ‘In order that an obligation may be extinguished by another which substitutes the same, itis imperative that it ! be so declared in unequivocal terms, b. Novation is never presumed § Theres implied novation ifthe old and new obtizations are on every point incompatible with each other. 4, Novation must only be expressed but it cannot ‘implied, 270. The following statements conceming novation are correct, except '% When the principal obligation is extinguished in consequenceof a novation, accessory obligations may subsist only insofar as they may benefit third person who did not giveltheir consent. b. Ifthe new oblisation i void, the original obligation was extinguished, unless the partes intended that the former should subsist in any event. | The nov id if the original obligation was void, except when annulment may be cleimed only by the debtor, or when ratification validates acts which are voidable. If the original obligation was subject to a suspensive or resolutory condition, the new obligation shall be under the same condition, unless it is otherwise stipulated. an, ‘May the shortening of the ‘1m of contract result to implied novation? a Yes inall cases, b. No inall eases, i © As a general rule, yes, especially if there is significant shortening of term of tontract, which is the principal condition of the contract, such in the old case of Kabalkalan vs Pacheco whefein the term of right of way is significantly reduced to 7 years from 20 years 4 Yes even ifthe shortening does not result to incompatibility between the first and second contract, 272, ayy the extension of the term of the contract regult to isuplied novation? a. Yeb in all cases : B. Nolin all cases ©. Asia general rule, no, unless the change will show that the new contract is clearly incompatible with the old contract so that both contracts cannot exist together. 4. Yet because implied novation can be presumed even in the absence of supporting circumstances, 273. Which of the following statements concerning novation involving substituting a new debtor in the place of the original debtor is correct? a It may be made even without the knowledge or ageinst the will of original debtor, but not without the consent of the creditor. b. Itmay be made without the consent of creditor. €Itcannot be made against the will of original debtor. 4. It must be made with the knowledge of original debtor. 274, Itis one of the two types of novation involving the change of original debtor wherein the initiative does not emanate from the original debtor and may be made even without his knowledge since it consists in a third person assuming the obligation and it logically requires the consent of third person and the creditor. a. Expromission b. Delegacion cc, Legal subrogation 4. Conventional subrogation 275. It ig one of the two types of novation involving the change of original debtor wherein , the original debtor (delegante) offers and the creditor (delegatario) accepts a third person (delegado) who consents to the substitution, so that the consent of these three parties is necessary. a. Expromission b. Delegacion €. Legal subrogation a Sonics subrogation \ (CRAR— Regulatory Framework for Business Transactions (8601) Page 33 of 34 Scanned by CamScanner