(1)Obligation

BUSINESS LAW QUIZ ON OBLIGATION –PART I 1. Whenever in an obligation’s designated, it is presumed to have been established for the benefit of: a. Both the creditor and debtor c. The debtor b. The creditor d. The third party 2. A owes B P10, 000. C pays B P5, 000. Now B and C are the, creditors of A to the amount of P5, 000 each. Suppose A has only P5, 000.Which is correct: a. B and C should divide the P5, 0000 equally c.A may choose whom to pay b .C should be preferred d.B Should be preferred 3. X is under obligation to deliver Y’s car to the latter. However before delivery Z destroys the car. Which one of the Following is correct? a. X’s obligation to give the car to Y extinguished b. X is allowed to recover from Z c. Y has the right to bring an action against Z d. X is not obliged to give Y an equivalent value of the car 4. XYZ are solidarily liable to A for P30, 000 which matures on July 1, 2001.On May 1, 2001, X paid A for the whole amount of debt. If on December 1, 2001, X will be reimbursed by Y, the latter will liable for: a. P10, 000 with the interest from July 1, 2001 to December 1, 2001 b. P10, 000 without interest c. P10, 000 with interest from May 1, 2001 to July 1, 2001 d. P10, 000 with interest from May 1, 2001 to December 1, 2001 5. A, B and C owe solidarily creditors X and Y P30, 000.X remitted the entire obligation in favor of A. The effect is: a. The obligation is not extinguished until a collect from B and C b. The obligation is not extinguished until Y is paid by X his share of the credit c. A cannot recover from B and C because remission in his favor extend to the benefit of B and C d. a can recover from B and C their respective share of the debt 6. When A voluntarily takes charge of the neglected business of B without the latter’s authority where reimbursement must be made for necessary and useful expense, there is a: a. Quasi delict c. Negotiorum Gestio b. Quasi Contract d. Solutio Indebiti 7. When the debtor binds himself to pay when his means will permit him to do so, the obligation is: a. Conditional c.Simple b. Pure d.With a period 8. X and Y are solidary debtors of A, B, C and D, joint creditors to the amount of 8, 0000.How much can A collect from X? a. A could recover 8,000 from X. A, in turn has to give B, C and D 2,000 each b. A could recover 4,000 only from X. c. A could recover 2,000 only from X. d. A could recover 8,000 from X. A, in turn does not have to give B, C and D 2,000 each 9. A owes B 150,000 due on August 31, 2000. A executed a mortgage in favor of B on A’s building to guaranty the obligation. On August 10, 2000, the mortgaged building was totally lost due to an earthquake .On August 12, 2000, B demanded payment from A. Is B’s demand valid? a. No. The obligation is one with define period, thus the creditor cannot demand fulfillment of the obligation before it is due. b. No. The mortgage was extinguished because the object of the contract was lost through a fortuitous event. C.Yes.The debt becomes due at once because the guarantee was lost although through a fortuitous event, unless the debtor can mortgage another property that is equally satisfactory. d.Yes.The debts becomes due at once because the periods benefits is given solely to the creditor thereby giving the creditor the right to demand performance even before the due date. 10. X is obliged to give Y a specific car in July 15, 2000. X did not deliver the car on July 15, 2000. On July 20, 2000,

an earthquake destroyed the building where the car parked and the car was destroyed .Is X still liable? a. Considering that no demand to deliver was made by Y and the specific thing was lost due to fortuitous event, hence the obligation is extinguished. b.No. The obligation is extinguished, even if the debtor c. Yes X is already in legal delay, thus obligation to deliver the lost specified thing is converted into monetary claim for damages. d. Yes. The creditor instead demand for a substitute of equivalent value from the debtor 11. In the three (3) of the following cases payment by the debtor is not recoverable .Which is the exception? a. The obligation was not yet due and demandable but debtor believed it was already due and demandable b.The payment is only for interest and credited to the proper period c. The advance payment were made by both parties reciprocally d. The debt was aware of the period 12. C is the creditor of D in the amount of P50, 000. G is the guarantor of D. D paid C partially with P 20,000. A not knowing the partial payment of D and against the will of D, paid C the amount of P50, 000 .What is the effect of this payment in the obligation? a. The obligation is extinguished. A cannot recover any amount from D, But A can demand reimbursement from G the amount of P50, 000 b. The obligation is extinguished. A can demand P30, 000 from D because this amount benefited D or A having been subrogated into the rights of C, can proceed against G. c. The obligation is not extinguished. A’s payment being against the will D does not extinguish the obligation d. The obligation is extinguished. A can demand P30, 000 from D, but if D cannot pay, A cannot ordinarily proceed against guarantor G because A is not entitled to subrogation 13. This is payment in kind: a. Consignation b. Payment by cession

c. Dation in payment d. Application for payment

14. A, B, C and D are joint creditors of E and F, solidary debtors in the amount of P40, 000.00.How much can A, B and C collects from E? a. A, B, and C could collect P20, 000.00 from E b. A, B, and C could collect P30, 000.00 from E c. A, B, and C could collect all the P40, 000.00 from E d. A, B, and C could collect P20, 000.00 from E and P10, 000 from F. 15.A obliged himself to pay X 10,000 in 30 days plus a penalty of 20,000 if he fails to pay the obligation in due time. A failed to pay the obligation in 30 days. X can demand from A. a. The principal of P100, 000 plus P20, 000 penalty b. The principal of P100, 000 plus P20, 000 penalty, plus legal interest c. The principal of P100, 000 plus P20, 000 plus legal interest d. The principal of P100, 000 plus P20, 000 penalty, plus legal interest, plus damages 16. A signs a promissory note and binds himself to pay X P100, 000 plus 15% per annum interest on June 30,2000. a. Before June 30, 2000, X can demand payment b. If on June 30, 2000 A is paying X the latter refuse the payment c. A compel creditor X to accept payment before June 30, 2000 d. Because the period is for the benefit of the debtor and creditor, X can refuse any tendered payment before June 30, 2000 17. A owes X P50, 000 payable on or before June 30, 2000. S who is not a party to the contract and without consent and against the will of A paid X the P50, 000 on April 1, 2000 when the prevailing rate of interest was 12% per annum a. S can ask reimbursement from A in the amount of P50, 000 plus 12% interest from April 1, to June 30, 2000. b. S cans reimbursement from A in the amount of P50, 000 c. S cannot ask reimbursement from A because the payment by S without the consent and against the will of A. d. S can ask refund from X because the payment by S was against the will of A. 18. When the obligation is extinguished because of the passage of time, this is:

a. fulfillment of resolutory b. arrival of resolutory period

c. prescription d. rescission

19. When the debtor abandons or transfers all his properties to his creditors so that the creditors may sell the properties and out of the net proceeds the creditors recover their claims, this is called a. dacion en pago c. payment by cession b. tender payment and consignation d. remission 20. When the period is “on or before a date”, the debtor has the benefit of the period. This benefit is lost and the obligation becomes demandable when a. the debtor attempts to ascond b. after contracting the obligation, the creditor suspects the debtor of becoming insolvent c. the guarantee given by the debtor is not acceptable to the creditor d. demand by creditor could be useless 21. Unless the law or stipulation of the parties requires another standard care, the obligation to give a thing carries with the Obligation to take care with: a. Extra-ordinary diligence c. diligence of a good father of a family b.degree of care agreed upon by the party’s d. diligence of a good family of a father 22. A entered into a contract with B by which A promised to deliver at price stipulated in the contract. Such delivery is to made on February 14, 2001 with penalty in case of default. In this case, no further demand by B on A is necessary to consider A in delay because: a. time is of the essence of the contract c. the demand would unless b.The obligation is expressly so provides d. answer not given 23. One of the following shall produced effect of payment of debts a. delivery of check c. delivery of a promissory note b.tender of Central Bank notes d. dacion en pago 24. If the creditor to who tender of payment has been made refuses without just cause to accept it, debtor shall be released from responsibility by: a. assignment of property c. adjudication or pacion en pago b. consignation of the thing or sum due d. condonation 25. A executes a promissory note in favor of B who subsequently indorsed it in favor of A. The obligation to pay the promissory is thereby extinguished because there is: a. confusion or merger c. remission b. novation d. compensation 26. The distinction between conventional subrogation and assignment is that in conventional subrogation: a. it is a mere cession of right b. an obligation is extinguished and another appears c. the same obligation, without being extinguished, is transferred to another d. the debtors consent is not necessary 27. A promissory note A and dated March 15, 2000 is worried as follows: “I promise to pay B the sum of Fifty Thousand Pesos (P50, 000) provided that if she should fall I the October, 2000 CPA Examination, she shall return to me the said amount”. The above note gives rise to an obligation with: a. suspensive condition c. resolutory condition b. casual condition d. answer mot given 28. A and B to deliver a particular car valued at P100,000 to C on or before September 15,2000 . September 15, 2000 came and upon demand by c from delivery from A and B, A was willing to deliver but B refused to deliver. In this case at bar: a. An action for specific performance will lie against both A and B. b. Both A and B shall be liable for 50,000 each with damages c. B shall be liable for P50, 000 without damages and A shall be liable for P50, 000 damages d. C can demand delivery of the car from A or B 29. A,B and C owed a solidum P15,000 to D as evidenced by a promissory note due on September 30,1990. The note prescribed on October 1, 2000. On October 10, 2000 A paid D. In this case, A is: a. entitled to collect P5, 000.00 each from B and C

b. not entitled to reimbursement from his co-debtors for the shares of the latter c. entitled to recover from D d. answer not given 30. This a promissory note “I promise to pay A, B and C the sum of P18, 000.”(Signed) D, E and F a.F is obliged to pay C P6,000.00 c. F is obliged to pay C P12,000.00 b.F is obliged to pay C P2, 000.00 d. F is obliged to pay C P18, 000.00 31. A and B are solidary debtors of C,D,E and F joint creditors in the amount of 20,000.How much can C collect from A? a. C could collect P2, 500.00 from A b. C could collect from A P10, 000.00.C is then obliged to give P2, 500 each to D, E and F c. C could collect P5, 000 from A d. C could collect the whole P20, 000 from A but will in turn give P5, 000 each to D, E and F. 32. A owes B who has two (2) legitimate children, 50,000 payable on December 31, 2000 a. If A dies before December 31, 2000, B cannot collect from A the heirs of A b. If A dies before December 31, 2000, B cannot collect from A the heirs of A c. If dies, his two (2) legitimate children cannot recover from A his obligation d. If both A and B die, the heirs of B can collect from heirs of A. 33. If the obligor binds himself to perform his obligation as soon as “he shall have obtained the loan “from a certain bank this obligation is: a. with a term c. suspensive b. conditional d. resolutory 34. If to refers to a joint obligation: a. One in which debtor is liable for the entire of obligation, and each creditor is entitled to demand the whole obligation b.one in which either one of the parties is indispensible and the other is not necessary c. one in which of the obligation is resolutory condition of the other, the non-fulfillment of which entitles the other party to rescind the contract d. one which each of debtors is liable only for a proportionate part of the debt and each creditor are entitled only for a proportionate part of the credit. 35. It presupposes not that the obligor is bale, ready and willing but more so, in the act of performing his obligation a. promissory note c. bill of exchange b. tender of payment d. obligation to sell 36. Which of the following is not considered as quasi-contract? a. Solutio Indebiti b. when the third person, without knowledge of the debtor, pays the debt c. negotiorum gestio d. reimbursement due the person who saved property during fire or storm without the knowledge of the owner 37. D1, D2 and D3 oblige themselves solidarily to give Ca specific car valued P12, 000.On due date demanded delivery but the debtors failed to deliver .The next day, while D1 still in possession of the car, it got lost due to fortuitous event. The right of C is a. None, obligation is totally extinguished b.proceed against any of the debtors for the value and damages c. proceed against D1 only, because he is the one in possession at the time it was lost 38. In tender and consignation: if after consignation is made, the creditor allow the debtor to withdraw the thing deposited in court, which of the following is incorrect? a.co-debtors, guarantors and securities are released from the obligation unless they consented b. the obligation remain to subsist c. the obligation is extinguished d. none of the above

39. A, B and C are joint debtors of joint creditors W, X, Y and Z in the amount of P300, 000. How much can W and X collect from B? a. P 75,000 c. P 150,000 b. P 100,000 d. P 50,000 40. D owes C 10,000 payable on December 25. Later, D forced C to sign a promissory note for 10,000 payable on December 25. If all the other requisites of compensation are present, are both debts extinguished? a. Yes, under the legal compensation b.No, B’s consent was obtained by force c. yes, with approval of the court d. not given 41. X has been missing for sometime leaving for no one to manage his properties A and B jointly took charge of the management thereof. However, due to the fault of A, the properties of X were damaged .The liability therefore to X for damages shall be: a. only A shall be liable b. both shall be jointly liable c. both shall be solidarily liable d. they are not liable since at fault for having abandoned his properties 42. X by mistake delivered to A and Ba sum of money which should have been delivered to C and D. X now demands the return of the same from A and B. The liability of the latter for the sum of money to which they are not entitled shall be: a. A and B shall be liable solidarily b. A and B shall be liable jointly c. They are not liable for having received the money in good faith d. X has not the right to recover as he was negligent in the delivery of the money 43. A owes B a sum of money evidenced by promissory note which has prescribed without the knowledge of A, paid B his debt. Later A reimbursed X for the payment of the latter to B although he has no obligation to do so. After payment A now wants to recover hi payment to X on the ground that he was not obliged to reimburse him. Which of the following is not correct? a. A can recover his reimbursement to X to prevent unjust enrichment on X’s part at the expense of A. b. A cannot recover because he has civil obligation to reimburse X for the latter paid his debt to B c. A cannot recover because he partakes of a natural obligation d. A cannot recover since there was reimbursement by mistake 44. In which of the following instances does legal subrogation not apply? a. when a creditor pays another creditor who is preferred, even without the debtor’s knowledge b. when the third person, not interested in the obligation, pays with the express or tacit approval of the debtor c. when a third person pays the creditor without knowledge or against the will of the debtor and yet entitled to beneficial reimbursement d. when, even without knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of the confusion as to the latter’s share.

45. A bought biscuits from a grocery store and was hospitalized due in food poisoning as a result of toxic substance contained in the biscuits sold to retailers by the Ace Foods Inc. A is now suing the said producer corporation for damages Decide: a. A has no right to claim damages from the producer because there was no contract between them. b. Ace Foods Inc is not liable to A because the latter was negligent in eating the biscuit despite the presence of harmful substance therein.

c. A must claim damages from the grocery store and not from the producer since the grocery was the one which sold the poisoned food to A. d. Ace Food Inc is liable for damages due to quasi-delict to its negligence in the preparation of the biscuits thus causing to A. 46. Acceptance of commercial document is equivalent to payment: a. The check has been received as payment b.The check has become valueless because of the creditors fault c. The check is a managers or cashier’s check d. The promissory note is used as payment 47. The debtor shall lose every right to make use of the period except: a. When after the obligations has been contracted he becomes insolvent, unless he gives a guaranty or security for the debt b.When does not furnish a guaranty or security for the debt c. When the debtor attempts to ascond d. When he violates any undertaking consideration of which the creditor agreed to the period. 48. When the debtor binds himself to pay when his means permit him to do so is one: a. With a condition is dependent upon the debtors will b.With resolutory period upon the debtors will c. With period dependent upon the debtors will d. With the condition to be fixed by court 49. D owes C P1M. G is the guarantor. A stranger S paid C the debt D without the knowledge of the latter. In this case: a. If D fails to pay S, the latter can compel G to pay him; b. If G pays S, the former can demand reimbursement from D; c. S cannot compel G to pay him; d. D has no obligation to reimburse S because he paid without the consent of D. 50. D owes C P1M. A proposed to B that C will pay A’s debt and that he will be released from all liabilities not him. B and C agreed to the proposal. Later when B tried to collect from C, he found out that he was insolvent a. A is no longer liable to B because of the substitution of C in his place if he had no knowledge of the insolvency despite it being of public knowledge; b. A is no longer liable to B even if he had knowledge of C’s insolvency despite it being of public knowledge c. A still liable to b because he was the one who proposed to B that C shall substitute to him as debtor d. A is longer liable to b despite the insolvency of C unless said was of the public knowledge or known to him when he delegated the debt.

BUSINESS LAW QUIZ ON OBLIGATION-PART II 1. In three of the following cases, compensation cannot be claimed by the debtor except: a. By the bailee in commodatum; b. By the depositor in contractor deposit; c. By the person obliged to give support due by gratuitous title; d.By the debtor in an obligation arising from a penal offense 2. Which of the following is not a requisite for legal compensation? a. Both debts are due; b. Both are liquidated and demandable; c. By the person obliged to give support due by gratuitous title; d. By the debtor in obligation arising from a penal defense 3. A owes B P1M guaranteed by X. In turn, B owes A P.5M. A failed to pay B and the latter is now collecting from X. a. X is liable to B for P1M because as guarantor he is liable for the debt of the debtor in case of nonpayment thereof; b. X shall be liable to B for P.5M only if the latter agrees to the compensation; c. X cannot claim compensation against B because the latter owes him nothing;

d. X can set up compensation as regards what B owes A

4. A owes B P1M guaranteed by C. B assigns his credit X. X assigns his credit to Y. Y assigns his credit to C, the guarantor, Does A still have to pay C? a. No because the guarantor is liable to the creditor B and not to debtor A. b.Yes because the guarantor has now become the creditor; c.No because it is the obligation of the guarantor pays the creditor for the benefit of the debtor; d. Yes because the guarantee has been extinguished by confusion or merge of rights 5. A owes B P1M. B owes A P.5M. B assigned credit to C with the consent of a who reserved his right to compensation. a. A claim compensation against C as to what b owes him. b.A cannot claim compensation against C because he consented to the assignment c. A cannot claim compensation against C without his consent d. A cannot claim compensation against C even without the reservation 6. A owes B P1M due on Jan.21, 2001. B owes a P.2M due on Jan.20, 2001 and P.3M due on March 2, 2001. B assigned the credit to Con Feb.2, 2001 without the knowledge of A who obtained knowledge of the assignment of credit on Feb. 4, 2001 a. A cannot claim compensation against C because of his knowledge of the assignment; b. A can claim compensation up to P.2M only; c.A can claim compensation of all the debts of B to him; d. Legal compensation cannot take place. 7. A owes B P1M on Feb. 3, 2001. B owes A a lancer GSR worth P1M due on Feb.4, 2001 a. On Feb. 3, 2001, A cannot claim compensation because one of the debts is not yet due; b. On Feb. 4, 2001, A cannot claim because both debts are now due; c. The parties can agree on compensation only Feb.4, 2001 when both debts are due; d. Legal compensation cannot take place 8. A owes B P1M with 12% interest. As agreed upon among parties, the principal amount shall be paid to B but the interest shall be given to C who accepted the stipulation in his favor. Later A and B agreed that instead of cash it shall be parcel of land worth P1M a. The novation of the obligation shall also extinguish the accessory obligation to pay the interest to c. b.In the absence of the consent of C to the novation, he is still entitled to the interest; c. With or without the consent of C, the obligation to give the interest to him is also extinguished because of the novation of principal obligation; d. Since the parcel of land could possibly earn interest, the obligation to pay interest is extinguished 9. A owes B a sum of money and secured by a pledge on his car. Later, the car is found to be in the possession of A. a. It is presumed that the debt of A has been condoned; b. It is presumed both the debt and pledge has been remitted; c.It is presumed that debt is extinguished; d. It is presumed that the pledge is condoned 10. In which of the following is consignation alone without prior tender of payment not valid to extinguish the obligation? a. When two or more persons claim the same right to collect; b. When the title of the obligation has been lost; C.When with just a cause the creditor refuses to issue a receipt; d. When is incapacitated to receive the payment at the time it is due. 11. Which of the following is not a requisite of payment by cession? a. One debtor and two or more creditors b. The debtor is insolvent c. The creditors become owners of the properties assigned to them d. The creditors are authorized to sell the properties of the debtor 12. Which of the following is not a requisite of Dation in payment? a. One debtor and two or more creditors b. The debtor is insolvent c. The creditors become owners of the property used as payment; d. Acceptance of the creditor is not necessary

13. D obtained a loan from C payable on or before December 31, 2002. Which of the following statements is correct? a. Can only pay the obligation on December 31,2002 b. Can demand payment from D on before December 31, 2002 c. Can demand payment from D even before December 31,2002 d. D can pay on before December 31,2002 14. The obligation of Pedro in favor Juan amounts to Php 30,000.00 payable on May 5,2002. On April 15, 2002 Ciriaco and Pedro agreed that Ciriaco will pay the obligation of Pedro. Juan gave his consent to the said agreement .The change of the debtor in this called: a. substitution b. expromission c. subrogation d. delegacio 15. X issued a promissory note to A amounting to Php 10,000.00. A purchased a computer from B and he indorsed the note to B. B indorsed the promissory note to C in payment of his loan .C indorsed the said promissory note to X as payment for the repair of his car .The obligation of X in this case is extinguished by: a. novation c. confusion or merger of rights b. compensation or merger of rights d. condonation or remission of rights 16. C bought only the car of D on February 15, 2002 and D agreed to deliver it to C on April 30,2002. They did not agree on the place of delivery .Where is the place of delivery? a. domicile of the debtor c. where is the car on April 30,2002 b. where is the car on February 15,2002 d. domicile of the creditor 17. D has an obligation to deliver his dog to C on October 16, 2001. On October 10, 2001, the said dog gave birth to seven puppies. On October 16, 2001, D failed to deliver the said dog .Who shall be the owner of the dog on October 16, 2001? a. C because that it the agreed date of delivery b.D because the dog is still in his possession; c.C because he has the right to demand its delivery d. D because the delivery of the dog is dependent upon his will 18. When the obligor binds himself to pay when his means permit him to do so, the obligation is: a. conditional b. facultative c. pure d. with a period 19.A obtained a loan from B in the amount of Php 10,000.00 payable on December 31,2002 plus 10% interest. A won in the lotto and on March 30, 2002 he offered to pay his loan to B plus Php1,000.00 as interest but B refused to accept his payment .Which of the following statement is correct? a. A can file a consignation in court because B refused to accept his payment without justifiable cause. b. B can compelled to accept the payment if the interest will be increased c. B must accept the payment because it is complete d. A cannot compel to B to accept his payment because the loan is not yet due. 20. D has the obligation to give a two-year black male dog to C on April 30,2002.On April 2,2002, all of the dogs of D were hit by lightning and they all died. Therefore: a. The obligation of D to C is extinguished c. C can only demand for damages from D b. D must still gave the two year old black male dog to C. d. C can demand for the dog plus damages 21. In alternative obligation, the right of choice belongs to: a. The creditor c. Both creditor and debtor b. The debtor d. Third person the right of choice is with the debtor, unless expressly given to the creditor. 22. In facultative obligation the right choice belongs to: a. The creditor c. Both creditor and debtor b. The debtor d. Third person e. None of the above 23. The sources for liability for damages are the following except: a. Fraud b. Negligence c. Delay d. Quasi-delict 24. When the fulfillment of the condition depends upon the sole will the debtor, the conditional obligation shall be: a. Voidable b. Unenforceable c. Valid d. Void potestative on the part of the debtor: if suspensive—VOID; if resolutory—VALID. @_@???!!

25. Z obtained a loan from X on the amount of 10,000.00. Z promised to pay the said loan of 10,000.00 to X as soon as possible. Two year had lapsed but the loan is still unpaid .The remedy available to X is: a. To file an action against Arturo for collection of debt b. To demand payment for damages c. To attach the property of Z; d. To ask (petition) the court to fix the period 26. A, B and C are solidarily creditors of D in the amount of 15,000.00. C demanded payment from D. After the demand for payment by C, D in order to extinguish the entire obligation may pay to: a. A only b. B only c. C only d. To either A or B 27. No person shall hold responsible by reason of fortuitous event except: a. When time is the essence of the contract; b. When demand would be useless c. When the nature of the obligation requires the assumption for risk d When the obligation is purely personal in nature 28. Dela Cruz obliged himself to deliver a determinate horse to Mary Jane on November 5. When the date of the delivery of the horse arrived, the horse has already an offspring. Dela Cruz is obliged to deliver the: a. Horse only b. The horses as well as the offspring c. Dela Cruz can refuse to deliver both the horse and offspring d. Dela Cruz may ask Mary Ann to pay the offspring 29. When the obligor voluntarily prevents the happening of the condition it is deemed that the condition is: a. Constructively fulfilled c. constructively demandable b. constructively extinguished d. constructively nullified 30. A bound himself to deliver a determinate horse to B on January 14, 2002 .On January 16, 2002 the horse was struck and killed by lightning a. A is liable for the loss of horse because he was in delay b. A has the obligation to replace the horse c. A’s obligation is extinguished d. B may claim damages from A 31. Payment by cession as distinguished from the Dation in payment a. The debtor is not necessarily in a state of financial difficulty b. The effect is to release the debtor for the net proceeds of the things cede or assigned c. The property is alienated by the debtor to the creditor in satisfaction of a debt in money d. What is delivered by the debtor is merely a thing to be considered as the equivalent of the performance of the obligation 32. A owes B 20,000 which become due and payable last June 23, 2001. On that date A offered B 10,000 the only money he then had but B refused to accept the payment. A therefore met C, B’s 23 year old son, to whom he gave the 10,000 with the request that he turn the money to B. The money was stolen while in the C’s possession. How much may B still recover from A? a. 20,000 b. 10,000 c. 15,000 d. 0.00 33. If a third person pays an obligation. What are the rights which are available to him if he pays the obligation with the knowledge and consent of the debtor? First answer – He can recover from the debtor the entire amount, which he has paid Second answer –He is subrogated to all the rights of the debtor ? a. Both answers are correct c. Only the first answer is correct b. Both answers are wrong d. Only the second answer is correct 34. A, B and C executed a promissory note binding themselves to pay 9,000.00 to X, Y and Z. The note is now due and demandable. Can the creditors proceed against A alone for the payment of entire debt? a. No each creditor can collect 3,000 from A b. Yes either X, Y or Z can collect 9,000 from A c. No each creditor can collect only 1,000 from A d. Yes the promissory note is silent with respect to the rights of the creditor s, the obligation is presumed to solidarily 35. Indivisibility as distinguished from solidarity a. Plurality of subject is invisible

b. When the obligation is converted into one of indemnity for damages because of breach, the character of the obligation remains c. Refers to the legal tie or vinculum d. Refers to the prestation which constitute the object of obligation 36. A source of obligation not arising from law a. negotiorum gestic b. solutio indebiti

c. culpa aquiliana

d. contract

37. The loss or deterioration of the thing intended as a substitute through the negligence of the obligor does not render him liable A person alternatively bound by different prestation shall completely perform one of them a. true, true b. true, false c. false , true d. false ,false 38. There being no express stipulation and if the under taking is to deliver a determinate thing the payment shall be made a. At the domicile of the debtor b. at the domicile of the creditor c. whatever that thing might be at the moment the obligation was constituted d. whenever the thing might be at the moment the obligation is to be fulfilled 39. Demands is not needed to put the debtor in fault, except a. When the demand would be useless b. When the parties so stipulate c. When time is the essence d. When the fixing of the time is the controlling motive for the establishment of the contract 40. Culpa aquiliana as distinguished from culpa contractual a. Proof of due negligence in the selection and supervision of the employees is not as a defense b. Proof of the contract and of its breach is sufficient prima facie to warranty recovery c. The negligence of the defendant is merely an incident in the performance of the obligation d. The source of liability is the defendant’s negligent acts or omission itself 41. This is the kind of diligence that the obligor must observe in the performance of his obligation to give something: a. Diligence of a good father of a family b. Extraordinary diligence of a good father of a family c. Diligence of a good father of a family d. Diligence of a good father of a family even if the law or the stipulation requires another standard of care 42. D owes C P1M. X without the knowledge or against the will of D paid C P2M. Can X get reimbursement from D? a. P2M by the way of reimbursement from D to prevent unjust enrichment on the part of D at the expense of X b. P1M only for that is the extent of the benefit of D. c. No reimbursement because the payment was not proper being without the knowledge or against the will of D. d. P1M plus interest from the time of payment until reimbursement 43. Mel sold to Jay her car and promise to deliver the car to Jay on January 30, 2004 .On January 15, 2004, Mel sold the same car to Patrick and Patrick immediately possessed the car. As of February 5, 2004, Jay has not received the car from Mel. a. Jay can cancel the contract of sale between Mel and Patrick because the contract of the sale between him and Mel was perfected first; b. Mel cannot considered in delay because there was no demand yet from Jay c. Mel is already in delay, even if there was no demand from Jay and she shall be liable for damages d. The sale is rescissible because of damage caused to Jay 44. S sold his car with Plate No. XYZ 123 to B and B paid 150,000 to S. They agreed that the said car will be delivered by S to B on December 14, 2002 .Which of the following statements is true based on the facts given? a. B is considered as the owner of the car on December 14, 2002 b. S may deliver the car to B on December 12.2002 and compel to B to accept it. c. B may demand for the delivery of the car on December 13, 2002 d. S will be delay if he will not be able to deliver the car on the maturity date 45. Which of the following statements is true and correct? a. Where an obligation is secured by a pledge or mortgage and it is not paid when due, the pledge or mortgagee may

in

appropriate the thing given by the way of pledge and mortgage b. In both pledge and mortgage, the creditor is entitled to deficiency judgment c. Pledge and mortgage are accessory contracts because they cannot exist by themselves d. Unless otherwise agreed upon by the parties, the sale of the mortgaged property extinguishes full the mortgage constituted thereon.

(a) pactum commissorium (prohibited by law) (b) in a pledge, the creditor does not get the deficiency (d) if there’s still deficiency even after the property mortgaged had been foreclosed, debtormortgagor is still liable for the deficiency. 46. A, B and C borrowed P3M from D, E and F evidenced by a promissory note worded as follows to wit.”I promise to pay D, E and F P3M. (Sgd) A, B and C”. How much can D collect from A? a. P3M b. P.5M c. P1.5M d. P1M 47. A, B and C bound themselves to deliver X a specific car worth P3M. Due to the fault of A the car was lost. In this case: a. X can claim damages from any one of the three proportionate part of liability because the obligation is indivisible b. X can claim only from A the whole amount of damages other than value of the car c. Since solidarily liabilities for damages, X can claim the same from any of the three d. D is only liable for damages although B and C are liable for their respective shares in the obligation 48. L, M and N are the solidarily debtors of Y for the amount of 300,000 payable as follows: L- 50,000 payable when he passed the CPA Boards Exams M- 100,000 payable on February 14, 2004 N- 150,000 payable upon completion of his construction project If L will pass the CPA Boards Exams, what shall be the right of Y? a. demand 50,000 from L only c. demand 300,000 from L,M and N b. demand 50,000 from L,M and N d. demand 300,000 from L only 49. A obliged himself to deliver the cans of powdered milk B from Pangasinan to Manila. While his truck was traveling on the North expressway, it was hi-jacked by the band of robbers who also took the cans of milk belonging to B. Is liable for the loss of goods? a. No because they were generic things and they cannot be lost b. Yes because he was in possession of the same at the time of the loss and therefore presumed at fault. c. Yes because there was no stipulation exempting him from loss in case of fortuitous event d. No because the loss was due to fortuitous event

50. A brought her diamond ring to a jewelry shop for cleaning and the latter undertook to return the ring by February 1,2000. When the said date arrived, the jewelry shop informed A that the job was not yet finished and they asked A to return five days after. On February 6, 2000 A went to the shop to claim the ring but she was informed that the same was stolen by a thief the night before. Decide a. The jewelry shop is not liable for the loss because it took place due to the force majeure b. The jewelry shop is not liable if it was so stipulated between the parties c. The jewelry shop is not liable for the loss despite the force majeure because of delay d. The jewelry shop is not liable for the loss because there was no delay on its part

BUSINESS LAW QUIZ ON OBLIGATIONS – PART III MULTIPLE CHOICE. Select the best answer by writing the letter of your choice 1. The following are the requisites of an obligation, except a. Passive subject, debtor, debtor or obligor b. Active subject, creditor, or obligee c. Efficient cause d. Presentation

2. Obligations arise from the following except: a. Contracts c. Law b. Quasi-contracts d. Negligence 3 It is a voluntary administration of the property of another without his consent a. Negotiorum gestio c. Quasi-contract b. Solutio indebiti d. Contract 4. It is a wrong committed without any pre-existing relations between the parties a. Natural obligation c. Quasi-contract b. Quasi-delict d. Culpa contractual 5. Unless the law or stipulation of the parties requires another standard of care, every person obliged to give something is also obliged to take care it with a. Extraordinary diligence b. Diligence of a father of a good family c. Diligence of a father of a good family d. Good diligence of a father of a family 6. The creditor has a right that is enforceable against a definite passive subject. The right is known a. Personal right c. Determinate thing b. Real right d. Real thing 7. It is a thing that is particularly designated or physically segregated from all others of the same class. a. Generic thing c. Determinate thing b. Indeterminate thing d. Real thing 8. One of the following is a determinate thing a. A BMW with the license plate no. HNT 888 b. One of the vehicles

c. A Honda Civic Sir car d. A gold Rolex watch

9. Demand must be made for delay to exist in one of the following case. a. When it was stipulated by the parties that demand need not made b. When the law provides that demand need not be made c. When the obligation is silent on the necessity of demand d. When the time is of the essence of the contract 10. This refers to delay on the part of the creditor a. Mora solvendi ex re b. Compensation morae

c. Mora solvendi ex persona d. Mora accipiendi

11. There shall be no liability for the loss due to fortuitous event in one of the following case. a. When the debtor delays b. When the parties stipulated that there shall be liability even in case of loss due to fortuitous event c. When the nature of the obligation requires the assumption of risk d. When there was no stipulation as to liability of the debtor in case of loss due to fortuitous event 12. The following are the remedies of the creditor to pursue his claims against the debtor except: a. Pursue the property owned b. Exercise all the rights and bring all the actions of the debtor for the said purpose (accion subrogatoria) c. Impugn the acts which the debtor may have done to be defraud his creditor. (accion pauliana) d. Compel the debtor to perform the service in obligations to do ???!!

13. D borrowed 50,000.00 from C. C dies before he has collected the debt leaving S, his soon as heir. Which of the following statements are correct? a. S can collect from D although D and C did not agree that the right to the debt will pass on to the heirs of C b. S cannot collect because the credit right is personal to C. c. S can collect only if D and C agreed that the right to the debt will pass on the heirs of C d. S cannot because the law prohibits the transmission of the credit right 14. D is obliged to give C a specific car if C passes the CPA Examination. This obligation is an example of: a. A pure obligation b. An obligation with a suspensive condition c. An obligation with a resolutory condition d. An obligation with a period

15. One of the following obligations is not immediately demandable. a. Pure obligation b. Obligation with a resolutory condition c. Obligation with an in diem period d. A pure obligation really??!!??!! I guess, it is when an obligation is with a SUSPENSIVE condition. 16. One of the following is a void obligation? a. D is obliged to give C 5,000.00 if C does not go to the moon b. D is obliged to give C 5,000.00 if D goes to Baguio c. D is obliged to give C 5,000.00 if C goes to Baguio d. D is obliged to give C 5,000.00 if D wins the first prize in the sweepstakes on a ticket that he had already purchased. Potestative. Depends upon the sole will of the debtor. Void. 17. D is obliged to give C 10,000.00 if X dies. This example of: a. An obligation with a suspensive condition b. An obligation with a resolutory condition c. An obligation with a period d. A pure obligation 18. When debtor binds himself to pay when his means permit him to do so, the obligation is: a. An obligation with a resolutory condition b. A pure obligation c. An obligation with a suspensive condition d. An obligation with a suspensive period 19. Whenever a period is designated in an obligation, the said period shall presumed to have been established for the benefit of: a. The debtor c. Both the debtor and the creditor b. The creditor d. either of the parties 20. The debtor shall lose the right to make use of the period in the following cases, a. When he becomes insolvent b. When he violates any undertaking in consideration of which of the creditor agreed to the period c. When the debtor attempts to abscond d. When he does not furnish any guaranty or security to the creditor failure to furnish the guaranties or securities promised. ??? 21. An obligation ceases to be alternative and becomes a simple obligation in the following cases, a. When the debtor has communicated his choice to the creditor b. When the right of choice has been expressly granted to the creditor and his choice has been communicated to the debtor c. When among the several prestation that due only one is practicable d. When several prestation are due to the performance of one is enough to extinguish the obligation 22. D obliged to give C specific watch, a specific ring, or a specific bracelet .The parties agreed that C will have the right to choose the thing this will be given to him. Before C could make his choice, the watch and the ring are lost through D’s fault, successively. What is the right of C? a. C may choose the delivery to him of the bracelet or the price of the watch or the price of the rings plus damages b. C cannot choose the price of the watch or the price of the ring because the said objects have already been lost 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 was the last item that was lost plus damages 23. D obliged to give C specific ring. The parties agreed that D 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 b. If the bracelet is lost through a fortuitous event before substitution , the obligation is extinguished c. If the ring is lost through a fortuitous event even after before substitution, the obligation is extinguished d. a. If the ring is lost through the debtors fault after substitution, the debtor shall pay the damages

24. A, B, C and D are obliged to give V, W,X,Y and Z 20,000.00 a. V may collect from B 20,000.00 b. V may collect from B 5,000.00 c. V may collect from B 1,000.00 d. V may collect from B 4,000.00 25. A ,B,C and D joints debtors ,are obliged to give V,W,X,Y and Z solidary creditors 20,000.00 a. V may collect from B 20,000.00 b. V may collect from B 4,000.00 c. V may collect from B 5,000.00 d. V may collect from B 1,000.00 26. A ,B,C and D joints debtors ,are obliged to give V,W,X,Y and Z solidary creditors 20,000.00 a. V may collect from B 20,000.00 ???!! solidary debtors ada? b. V may collect from B 4,000.00 c. V may collect from B 5,000.00 d. V may collect from B 1,000.00 27. A ,B,C and D solidarily debtors ,are obliged to give V,W,X,Y and Z solidary creditors 20,000.00 a. V may collect from B 20,000.00 b. V may collect from B 4,000.00 c. V may collect from B 5,000.00 d. V may collect from B 1,000.00 28. A, 25, B,35 and C,17 are solidary debtors of X in the amount 9,000.00 a. V may collect from A 9,000.00 b. V may collect from B 6,000.00 c. V may collect from C 9,000.00 d. X may collect because the obligation is voidable, C being a minor 29. The folllowing obligations are divisible, except an: a.Obligation to give definite things B.Obligation which has for its object the execution of certain number of days or work c. Obligation which has for its object the accomplishment work by metrical units d. Obligation which by its nature is susceptible of partial performance 30. In obligations with a penal clause, the creditor as a rule may recover from the debtor in case of breach of the following: a. The penalty as agreed upon plus damages and interest b. The penalty and damages c. The penalty and interest d. The penalty only 31. Consider the following statements: I. The nullity of the principal obligation carries with it the nullity of the penal clause II. The nullity of the principal obligation does not carry with it the nullity of penal clause III. The nullity of the penal clause carries with it the nullity of the penal clause of the principal obligation IV. The nullity of the penal clause carries with it the nullity of the penal clause of the principal obligation a. Statements I and III are true b. Statements I and IV are true c. Statements I and II are true d. Statements II and IV are true 32. D borrowed from C 50,000.00.The obligation is secured by a chattel mortgage on D’s Toyota car. Subsequently , D paid C 20,000.00 .Unknown to D, T, a third person , pays C 50,000.00 believing that D still owed C such amount. a. T can recover 50,000.00 from D.If D cannot, T can foreclose the mortgage on D’s Toyota car b. T can recover nothing from Dbecause he paid out without knowledge and consent of D c. T can recover 30,000.00 form D. If D cannot, T can foreclose the mortgage on D’s Toyota car d. T can recover 30,000.00 form D.If D cannot ,T can foreclose the mortgage on D’s Toyota car 33. The following concerning payment by cession are true except a.The creditors become the owners of these properties of the debtor that were ceded to them b. Payment by cession extinguishes the obligations only to the extent covered by the proceeds of the sale of debtor’s properties

c. The debtor must be insolvent d. Cession affects all the properties of the debtor except those exempt from execution 34. D obtained from ABC Bank a loan of 12,000.00 payable at the end of 10 years. Before maturity, an extraordinary inflation supervened causing the value of the debt to fall to 4,000,000.00 on the date of maturity. On due date, D must pay ABC Bank: a. 12,000,000.00 b. 4,000,000.00 c. 20,000,000.00 d. 16,000,000.00 35. B borrowed from XYZ Bank 2,000,000.00 payable at the end of 5 years. Before maturity, an extraordinary inflation supervened causing the value of the debt to rise to 5,000,000.00 on the date of maturity. On due date,B must pay XYZ Bank: a. 2,000,000.00 b. 5,000,000.00 c. 800,000,000.00 d. 20,000,000.00

36. The money or currency which the debtor may compel the creditor to accept in payment of a debt, either public or private is known as: a. Negotiable instrument b. Legal tender c. Negotiable document of title d. Mercantile document 37. The transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of performance is known as: a. Payment by cession b. Dation in payment c. Application of payment d. Consignation 38.D owes C the following debts:6,000.00 due on June 12: 6,000.00 on June 15: 6,000.00 due on June 18; and 6,000.00 due on 20. All debts are unsecured except the debt due on June 20 which is secured by a pledge of D’S diamond ring to C,By agreement , the benefit of the term on the 4 debts was made in favor of D. Assuming that D has 6,000.00 on June 18 and is ready to pay C,which of the following statements is correct? a. D may apply his payment of 6,000.00 to any of the debts due on June 12, June 15 and June 18 since they are all due as of June 8 b. D may apply it only to the debt due on June 20 because it is the most burdensome to him c.D must apply the payment proportionately to the debts due as of June18 at 2,000.00 each d. D may apply the payment to any of the four debts in application of payment, the “more burdensome rule” is NOT applicable. 39. The offer made by the debtor to pay his obligation to his creditor is known as: a. Consignation b. Tender of the payment c. Application of payment d. Dation of payment 40. Consignation alone without any tender of payment is sufficient in the following cases, except: a. When the creditor is absent, unknown or does not appear at the place of payment b. When the title of the obligation has been lost c. When with just cause the creditor refuses to issue a receipt d. When two or more persons claim the same right to collect 41. M owes P 10,000.00.The obligation is evidenced by a promissory note. Subsequently, P indorsed the note to A, A to B B to C, and C back to M. The obligation of M is extinguish by: a. Compensation b.Confusion

c.Condonation d.Consignation 42. The condonation of the obligation to pay interest also results in the extinguishment of the principal obligation. a. Condonation of an obligation requires the acceptance of the debtor b. Both are correct statements c. Both are incorrect statements d. Only the second statement is corect 43. One of the following is not requisite of legal compensation a. That each one of the obligors bound principally, and that he is at the same time a principal creditor of the other b. That the two debts be due c. That both debts be liquidated and demandable d. That the debts are payable at the same place 44. Henry, husband, and Wilma, wife are legally separated. By order of the court which decreed the legal separation, Henry is obliged to give a monthly support of 10,000.00 to Wilma payable within the first five days of the month. Wilma owes Henry 10,000.00 by way of a business loan. On the other hand, Henry has not yet given Wilma’s support of 10,000.00 for this month. Both debts are already due .Which of the following statements is correct? a. Both debts are extinguished by legal compensation b. Wilma may claim compensation but not Henry c. Henry may claim compensation d. Neither may claim compensation 45. D owes C 10,000.00 with G as guarantor. C, on other hand, owes D 8,000.00.Both debt are already due but D is insolvent .In this case a. C may collect from G 10,000.00 b. C may collect from B 2,000.00 because the guarantor can set up compensation as regards what the creditor may owe the principal debtor c. C may collect nothing from G because D is insolvent d. C may collect from 8,000.00 from G 46. D owes C 50,000.00. Subsequently, D proposed to C that T will assume his (D’s) debt. C accepted the proposal of D. This substitution of debtor is known as a. Expromission b. Delegacion c. Tradition d. Dacion en pago 47. Refers to the facts in No.46. Assume also that on due date, T could not pay because of his insolvency which was in fact subsisting but was not known to D or of public knowledge at the time that D delegated his debt. In this case a. C can revive D’s debt because T’s insolvency already existed at the time that D delegated his debt b. C can revive D’s debt whether or not he (D) was aware of T’s insolvency since he (D) proposed the substitution c. C cannot hold D liable because his (D’s) obligation was extinguished when he was substituted by T. d. The novation is void because D did not take steps to determine the solvency of T when he (D) delegated his debt 48. D obliged himself to give 5 grams of shabu 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 cannot 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 delivery of 5 sacks of rice from D d. The new obligation is only voidable because D 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. 49. On July 1, 2006 D obliged himself to give C 50,000.00 if C will marry X on or before December 31, 2006. The condition of the obligation is a a. positive condition b. negative condition c. potestative condition d. casual condition 50. Refer to No.49.Which of the following is correct? a. The obligation of D is demandable if C marries X on or before December 31, 2006 b. The obligation of D is extinguished if it is already January 1, 2007 and has not yet married X c. The obligation of D is extinguished on December 2, 2006 if X dies on the said date and C has not yet married X d. The obligation is demandable if C marries X on January 1, 2007