LAW ON OBLIGATIONS

Atty. Mae Diane M. Azores, CPA

OUTLINE OF DISCUSSION

a) Definition
b) Sources of obligations and their concepts
c) Kinds of Obligations
d) Specific circumstances affecting obligations in general

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e) Nature and Effects of Obligations
f) Extinguishment of obligation

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EXERCISES

1. Angelie and Bea executed a contract where Angelie binds himself to give to B his Macbook

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Air M1. The vinculum juris is:
a. Angelie and Bea
b. Bea only
c. The giving of the Macbook Air M1
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d. The contract between Angelie and Bea
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2. Unless the law or the stipulations of the parties require another standard of care, every
person obliged to give something is also obliged to take care of it with:
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a. Extra-ordinary diligence
b. Diligence of a father of a good family
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c. Diligence of a good father of a family

d. Good diligence of a father of a family

3. Which of the following is a determinate thing?

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a. One of Mia’s cars

b. Iphone 12 ProMax, Gold
c. A leather bag
d. A cow
4. Sweet Tooth Company failed to deliver the wedding cake of the couple, Nicole and
Joseph, in time for their wedding, as agreed, due to traffic. Nicole and Joseph filed a case
against Sweet Tooth Company for damages due to the delay in the delivery of the cake.
Sweet Tooth Company set up the defense that they are not liable for damages due to
delay since they did not receive a judicial or extrajudicial demand from the couple on the
day of the wedding and the traffic was not their fault. Which of the following statements
is correct?

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a. Sweet Tooth Company is not liable for damages because the couple did not demand

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delivery of the cake before the scheduled date and time of the delivery.
b. Sweet Tooth Company is liable for damages because they are in delay and demand is

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not necessary in this case because time is of the essence
c. Sweet Tooth Company is liable for damages because they did not inform the couple
that there was traffic
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d. Sweet Tooth Company is not liable for damages since the traffic situation is beyond
their control.
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5. Delilah borrowed P500, 000 from Carol. D dies before he has collected the debt leaving
Francis, his son, as heir. Which of the following statements is correct?
a. Francis can collect from Delilah although Delilah and Carol did not agree that the
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credit right will pass on to the heirs of Carol.

b. Francis cannot collect from Delilah because he is not a party to the contract
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c. Francis can only collect if Delilah and Carol agreed that the credit rights may pass
on to the heirs of Carol
d. Francis cannot collect because the law prohibits the transmission of the credit
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right.

6. Which of the following is a void obligation?

a. D is obliged to give C P23,000.00 if C does not go to the moon.
b. D is obliged to give C P23,000.00 if D goes to Korea.
c. D is obliged to give C P23,000.00 if C does not go to Korea.
 d. D is obliged to give C P23,000.00 if D wins first prize in the sweepstakes on a ticket

7. Which of the following is a valid obligation?

a. A is obliged to give B 50,000 if B does not become Batman
b. A is obliged to give B 50,000 if B kills C
c. A is obliged to give B 50,000 if B becomes the President of the Philippines in 2022
d. A is obliged to give B 50,000 if A does not marry on or before May 31,2022

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8. B promises to give C his watch if he feel likes it. B’s obligation to C is:

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a. Void

b. Obligation with a period

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c. Obligation with resolutory condition

d. Obligation with suspensive condition

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9. Andrew promises to give Bianca 500,000 on February 14, 2022 if they will not break up
on or before that date. On February 13, 2022, Andrew broke up with Bianca. On February
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14, 2022:
a. Andrew is not liable to give Bianca 500,000 because the condition is not fulfilled
b. Andrew is still liable to give Bianca 500,000 because the obligation is binding to him
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c. Andrew is still liable to give Bianca 500,000 because he voluntarily prevented the
fulfillment of the condition
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d. Andrew is not liable to give Bianca 500,000 because the obligation is not binding
10. Mary promised to give Mark her Toyota Camry if Mark passes the October 2022 CPA
Board Exams. On September 20, 2022, the car was destroyed due to a strong typhoon.
Eventually, Mark passes the October 2022 CPA Board Exams.
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a. Mary should still give Mark a Toyota Camry because the condition is fulfilled
b. Mary is no longer liable to give Mark a Toyota Camry because the car was destroyed
without her fault
c. Mary is no longer liable to give Mark a Toyota Camry but she should give something in
exchange of equivalent value
 d. Mary should still give Mark a Toyota Camry, otherwise she may be held liable for
damages
11. Whenever a period is designated in an obligation, the said period shall be presumed to
have been established for the benefit of:
a. The debtor
b. The creditor
c. Both the debtor and the creditor

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d. Neither of the parties

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12. D s obliged to give C a specific watch, a specific ring, or a specific bracelet. The parties
agreed that C will have the right to choose the thing which will be given to him. Before C
could make his choice, the watch and the ring are lost through D’s fault, successively.

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What is the right of C?
a. C may choose the delivery to him of the bracelet, or the price of watch or the price
of the ring plus damages.
b.
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C cannot choose the price of the watch or the price of the ring because the said
objects have already been lost.
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c. C can only choose to have the bracelet because anyway, D can still perform his
obligation.
d. C can only choose to have delivery of the bracelet or the price of the ring which
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was the last item that was lost plus damages.

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13. Jude is obliged to give Ciara a specific ring. The parties agreed that Jude may give a specific
bracelet as substitute. Which of the following statements is true?
a. If the ring is lost through a fortuitous event before substitution, the obligation is
extinguished.
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b. If the bracelet is lost through a fortuitous event before the substitution, the
obligation is extinguished.
c. If the ring is lost through a fortuitous event after substitution, the obligation is
extinguished.
 d. If the ring is lost through the debtor’s fault after substitution, the debtor shall pay
damages.

14. V, Jungkook, Jimin and Suga, solidary debtors, are obliged to give Jennie, Lisa, Jisoo, and
Rose joint creditors, P400,000.00.
a. Jennie may collect from B P200,000.00
b. Jennie may collect from B P400,000.00

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c. Jennie may collect from B P50,000.00
d. Jennie may collect from B P100,000.00

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15. Rachel, 25, Ross, 35, and Emma, 17, are solidary debtors of Chandler in the amount of

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P90,000.00
a. Chandler may collect from A P90,000.00
b.
c.
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Chandler may collect from A P60,000.00
Chandler may collect from A P10,000.00
d. Chandler may collect nothing because the obligation is voidable, Emma being a
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minor.
16. Joey, Jovy and Jojo are solidary debtors under a loan obligation of P300,000.00 which has
fallen due. The creditor has, however, condoned Jojo's entire share in the debt. Since Jovy
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has become insolvent, the creditor makes a demand on Joey to pay the debt. How much
can the creditor collect from Joey?
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a. 300,000.00
b. 200,000.00
c. 100,000.00
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d. 150,000.00

17. Ted borrowed from Robin P500,000.00 the obligation is secured by a chattel mortgage
on Ted’s Ferrari car. Subsequently, Ted paid Robin P200,000.00. Unknown to Ted, Tracy,
who has a big crush on Ted, paid Robin P500,000.00 believing in good faith that Ted still
owed Robin such amount.
 a. Tracy can recover P500,000.00 from Ted. If Ted cannot pay, Tracy can foreclose
the mortgage on D’s Ferrari car.
b. Tracy can recover nothing from Ted because he paid Robin without the
knowledge and consent of Ted.
c. Tracy can recover P300,000.00 from Ted. If Ted cannot pay, Tracy can foreclose
the mortgage on Ted’s Ferrari car.
d. Tracy can recover P300,000.00 from Ted. If Ted. cannot pay, Tracy cannot
foreclose the mortgage on Ted’s Ferrari car.

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18. D obtained from ABC Bank a loan of P12,000,000.00 payable at the end of 10 years.
Before maturity, an extraordinary inflation supervened causing the value of the debt to
fall to P4,000,000.00 on the date of maturity. On due date, D must pay ABC Bank:

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a. P12,000,000.00
b. P4,000,000.00

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c. P36,000,000.00
d. P3,000,000.00
19. Luna owes Ciara the following debts:R
1. P10,000.00 with interest of 500 due on August 1;
2. P10,000.00 due on August 2
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3. P10,000.00 due on August 3; and
4. P10,000.00 due in August 4.

All debts are unsecured except the debt due on August which is secured by a pledge of
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Luna’s bracelet to Ciara. By agreement, the benefit of the term on the 4 debts was
granted to Ciara. assuming that Luna has P10,000.00 on August 3 and is ready to pay
Ciara, which of the following statements is correct?
a. Luna may apply his payment of P10,000.00 to any of the debts due as of August 3.
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b. Luna may apply his payment only to the debt due on August 4 because it is the
most burdensome to him.
c. Luna must apply the payment proportionately to the debts due as of August 3
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d. Luna may apply the payment to any of the four debts.

20. In order that condonation may extinguish an obligation involving a movable property
whose value exceeds P5,000.00 –
a. It is sufficient that the condonation and the acceptance are in writing, even a
private one.
 b. It is required that the condonation and the acceptance be in a public instrument.
c. The delivery of the document evidencing the debt is sufficient since the property
is movable.
d. The condonation and the acceptance may be made orally.
21. Sarah has a savings account with Patatas Bank in the amount of 1,000,000 pesos. Sarah
obtained a car loan from Patatas Bank in the amount of 1,500,000, payable in 15 equal
monthly installments.Sarah issued in favor of the bank post-dated checks, each in the

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amount of P100,000.00. On the sixth, seventh and eight months, the corresponding

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checks bounced. The Bank then deducted the remaining balance of 1,000,000 from
Sarah’s account. Was the action of the bank valid?

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a. No, because there was no arrangement between Sarah and the bank for an automatic
debit of Sarah’s account
b. Yes, because the checks issued by Sarah bounced
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c. Yes, because a savings account is actually a loan so there may be legal compensation.
d. No, because the compensation must only be up to 300,000.
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22. D owes C P10,000.00 with G as guarantor. C, on the other hand, owes D, P8,000.00. both
debts are already due but D is insolvent. In this case
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a. C may collect from G P10,000.00

b. C may collect from G P2,000.00 because a guarantor can set up compensation as

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regards what the creditor owes the principal debtor.

c. C may collect nothing from G because D is insolvent.

d. C may collect P8,000.00 from G.

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23. D obliged himself to give 5 grams of “marijuana” to C. later, the parties agreed that D would
instead give to C 5 sacks of rice. Which of the following statements is correct?
a. The novation is void because the original obligation is void. Hence, C cannot demand the
delivery of 5 sacks of rice from D.
b. The novation is valid because the new obligation is valid. Hence, C can demand the
delivery of 5 sacks of rice from D.
c. The original obligation although void is validated by the new obligation. Hence, C can
demand the delivery of 5 sacks of rice from D.
 d. The new obligation is only voidable because had not yet performed the original
obligation at the time of the novation. Accordingly, the new obligation is binding and C may
demand the delivery of 5 sacks of rice from D until the new obligation is annulled by a proper
action in court

24. D obliged himself to give to C a cow on December 10, 2020. On December 8, 2020, C demanded
the delivery of the cow but D did not comply. The following day, the cow died of an unknown
disease.
a. The obligation of D is extinguished because the loss is due to fortuitous event and D was
not in default.

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b. The obligation of D is not extinguished because D can deliver another cow.
c. The obligation of D is not extinguished because D was in default.
d. The obligation of D is not extinguished because the demand was not made on due date.

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25. Dina bought a car from Jai and delivered a check in payment of the same. Has Dina paid the

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obligation? Why?
a) No, not yet. 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.
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b) Yes, because a check is a valid legal tender of payment.
c) It depends. If the check is a manager’s check or cashier’s check it will produce the effect of
payment. If it’s an ordinary check, no payment.
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d) Yes, because a check is as good as cash.
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