UNIVERSITY OF THE CORDILLERAS

COLLEGE OF LAW
CIVIL LAW REVIEW 2

Name:___________________________________ Section:_____________________

INSTRUCTIONS: Read each question carefully. Choose the correct answer for each
number and write down the letter of your choice in CAPITAL LETTERS ON THE
SPACE PROVIDED. Turn in this questionnaire. Good Luck!

1._______The tie or vinculum among several debtors of one and the same obligation is
called:

A. Passive solidarity
B. Active solidarity
C. Mixed solidarity
D. none of the above

2._______If a stranger pays the obligation without the debtor’s consent, how much can
said payor collect from the debtor?

A. up to the extent that the debtor was benefited

B. the whole obligation
C none
D. the entire amount he paid plus interest

3._______Dan, a lessee of an apartelle, gave his rentals to Ney believing him to be the
owner thereof. Ney is obliged to give said rentals to Philipp the owner and lessor
of the leased premises. What is the source of Ney’s obligation to give the rentals
to the true owner?

A. Law
B. Contract
C. Quasi-contract
D. Quasi-delict

4.______The substitution or change of an obligation by another, resulting in its

extinguishment or modification, either by changing its object or principal
conditions, or by substituting another in place of the debtor, or by subrogating a
3rd person in the rights of the creditor. It is the total or partial extinction of an
obligation through the creation of a new one which substitutes it.

A. Novation
B. Subrogation
C. Compensation
D. Condonation
5._____Which of the following payors need not secure the consent of the creditor for
purpose of payment?

A. the debtor’s heirs

B. the debtor’s agent
C. the debtor himself
D. Anyone of the above

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6.______Ray agreed to pay the debt of Mon to Annie. What is the source of Ray’s
obligation to pay Annie?

A. Law
B. Contract
C. Quasi-contract
D. Quasi-delict

7.______Which of the following does not give a right to the creditor to file an action in
court for the fixing the period?

A. When the period depends upon the sole will of the debtor
B. When a period is intended but it is not fixed by the parties.
C. When the period is more than ten years
D. When the debtor binds himself to pay when his means permit him to do
so.

8.______ Statement 1 - When an employee enters into a contract with his employer
whereby he (employee) shall receive a wage lower than the minimum allowed by
law, he is deemed to have waived the right to question such contract.

Statement 2 - An employee may still recover the deficiency in his wage if

the same be less than that allowed by law, notwithstanding any contract between
him (employee) and his employer.

a. statement (1) is true and statement (2) is incorrect;

b. both statements are true;
c. statement (1) is false and statement (2) is true;
d. both statements are false.

The following facts are for numbers 9 to 10:

It was agreed upon by D and C that if D will fail to deliver the goods to C on
February 28, 2011, he shall be liable to pay a penalty ofP2,000.00. D failed to perform
his obligation on the agreed date and as a result thereof, C suffered damages
amounting to P50,000.00.

9.______Did D incur delay when he failed to deliver the goods on February 28, 2011?

A. Yes, because that is the stipulation of the parties;

B. No, because there was no demand yet from C.
C. Yes, because there is a period agreed upon for the performance of D’s
obligation
D. No, because D may be allowed to have a reasonable delay

10.______Can C demand P50,000.00 from D?

A. Yes, provided he can show proof of his pecuniary loss

B. No, because the amount is inequitable
C. Yes, because that is the loss suffered by him
D. No, because penalty is the substitute indemnity for damages or interest.

11.______Due to a super typhoon, the carabao of X was able to escape from its pen
and it grazed on the corn plantation of Y. Can Y validly demand payment of
indemnity from X?

A. No, because no person shall be liable for a fortuitous event

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 B. Yes, because X was negligent
C. No, because X did not cause the damage but the carabao
D. Yes, because even if X was not negligent abd the escape of the carabao
was because of the typhoon, he was benefited.

12.______In illegal contracts, the conditions in order that repudiation may be allowed
are:

i. there has been fulfillment of the purpose and one of the parties discovered
that the other is in bad faith;
ii. if the purpose has not yet been accomplished;
iii. there was delay on the part on one of the parties;
iv. if damage has not yet been caused to any third person.

Which of the above statements are correct:

A. only i and ii;

B. ii and iii;
C. iii and iv;
D. ii and iv.

13.______The law says that contracts shall have the force of law between the
contracting parties. This connotes that:

A. Contracts are the law between the parties and must be complied with. It
prevails in all instances for all other laws bow to the will of the
parties in a contract.
B. Contracts are superior to the law, hence must be complied with even if
contrary to law as long as agreed upon by the parties.
C. Contracts are presumed to be entered into for the benefit of each
contracting party. Therefore, it prevails against any odds. Before
a contract can be enforced, it must first be valid, and it cannot be
valid if it is against the law.
D. The parties may stipulate as to any terms and conditions and shall be
binding provided they are not contrary to law, morals and public
policy.

The following facts are for numbers 14 to 15.

Orlando entered into a contract with Conrado for the construction of his house.
Their contract provides, among other things, that Conrado will furnish labor and
materials for the project and Orlando will pay him P750,000.00.

14.______If the cost of the construction materials increased by 15% one month after
the start of the project, what right, if any is available to Conrado?

A. He can withdraw from the contract

B. He can demand an increase of the contract price.
C. He can demand amendment of the plan
D. None of the above.

15.______Can Orlando validly withdraw from the construction of the work after it had
been commenced?

A. Yes, by express provision of laws.

B. No, because the contract has been perfected.
C. Yes, because he is the owner of the project.

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 D. No, because it would be unfair to Conrado.
The following facts are for number 16 to 17:

D obtained a loan of one cavan of Jasmine rice from C worth P4,000 to be paid
on March 10, 2011. On the maturity date, the cost of one cavan of Jasmine rice is
already P8,000.00

16._____What should be paid by D to C on March 10, 2011?

A. One cavan of Jasmine rice

B. one-half cavan of Jasmine rice
C. one cavan of another kind of rice worth P4,000
D. one cavan of another kind of rice worth P4,000.00 plus P4,000 in cash

17._____Assuming that no Jasmine rice is available in the market on the maturity date,
what should D pay C?

A. another kind of rice worth P4,000

B. another kind of rice worth P8,000
C. P4,000 in cash
D. P8,000 in cash

18._____In case of illegal contracts, the courts may allow recovery of the money paid or
property delivered when:

A. there has been bad faith on the part of any of the parties;
B. there was no fulfillment of the purpose by one of the parties;
C. the public interest would be subserved;
D. the damage has already been caused to third persons.

19._____Manuel is obliged to pay 120 monthly installments (10 years) and interests in
case of default for the price of 2 parcels of land, Lot 5 and Lot 6 owned by XYZ
Hermanos. Manuel has paid 90 monthly installments then he defaulted payment.
After ten years, he informed XYZ that he will build his house in Lot 5. XYZ
contends that he cannot build the house as he does not yet own the lot. The
lower court ordered that Manuel may acquire either Lot 5 or Lot 6 because the
totality of how much he paid for the 90 monthly installments is even higher than
the value of either lot. Is the court correct?

A. YES, as there had been substantial compliance by Manuel

B. YES, as the action to reacquire the lot has already prescribed
C. NO, as there is no complete payment of the price
D. NO, as the contract does not transfer ownership pending arrears

20._____Statement 1 - Moral obligations may be converted into civil obligations;

Statement 2 - Voluntary fulfilment means that the debtor complied with the same
even if he knew that he could not have been legally forced to do so.

A. statement (1) is false and statement (2) is true

B. statement (1) is true and statement (2) is false
C. both statements are false
D. both statements are true

21._____A donated to B everything that he (A) possessed and owned leaving nothing
for himself. What is the status of the contract?

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 A. illegal per se;
B. unconstitutional;
C. prohibited;
D. prohibited but not illegal per se.

22.______Statement 1 - Payment means not only the delivery of money, but also the
performance, in any other manner, of a condition.

Statement 2 - Performance of an obligation is considered a form of payment in

law.

A. Only statement 1 is false

B. Only statement 2 is false
C. Both are false
D. Both are true

23._____Can a victim of a penal offense claim compensation?

A. No, when one of the obligation arises from a crime there can be no
compensation.
B. No, satisfaction of the civil aspect of the crime is imperative.
C. Yes, he is not escaping from any liability.
D. Yes, compensation is by operation of law between persons of are debtors
and creditors to one another.

24._____These contracts are forbidden because of private interest. They are:

A. void contracts;
B. illegal per se contracts;
C. unenforceable contracts;
D. merely prohibited contracts.

25._____Sally gave Bayer one month from December 10, 2010 to decide whether to
buy her only red car or not. The car is worth PhP300,000 payable in two monthly
installments. Teddy called Sally that he is interested to buy the car. After one
month, Bayer refused to buy the car. Teddy likewise informed Sally that he is not
anymore interested with the car. Sally demanded payment from Bayer due to
their pre-existing agreement. How much can Sally collect from Bayer on January
10, 2011?

A. NONE
B. 100,000
C. 150,000
D. 300,000

26._____On the maturity date for the payment of D’s loan, C demanded payment. D
replied that he has no money yet and that he will pay his loan two days later at
the office of C to which C agreed. When D went to the office of C, two days later,
C did not want to receive the payment and informed D that he will file a case
regarding the loan transaction against the latter instead. In this case, there is

A. Mora solvendi
B. Solvendi accipiendi
C. Compensatio morae
D. Mora accipiendi

27._____Among these, which is a valid payment?

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 A. Payment of a void judgment when judgment is unknown to the debtor
B. Payment by a stranger even without the debtor’s consent
C. Payment of a penalty when the main obligation lacks an essential element
D. Performance of a thing pending a suspensive condition

28._____If A pays a debt that has prescribed knowing that it has prescribed, A cannot
recover for this would be a cause of a ____________:

A. undue payment
B. natural obligation
C. civil obligation
D. moral obligation

29._____It is a mode of extinguishing obligations to the concurrent amount of the

obligation of persons who are in their own right reciprocally debtors or creditors
of each other.

A. Novation
B. Confusion
C. Compensation
D. Condonation

30._____Statement 1 - In case of illegal contracts, both of the contracting parties may

be allowed to recover the money paid or property delivered even though only one
of them has acted contrary to law.

Statement 2 - One of the parties in an illegal contract may be allowed by law to

recover whatever money paid or property delivered despite the fact that both of
them acted contrary to law.

A. statement (1) is correct only;

B. statement (2) is incorrect;
C. statement (1) is incorrect and statement (2) is correct;
D. both statements are correct.

31._____Statement 1 - A minor may recover what he has paid in illegal contracts if

justice so demands.

Statement 2 - A minor may recover what he has paid in illegal contracts if the
purpose has not been accomplished.

A. statement (1) is true;

B. statement (2) is true;
C. both statements are true;
D. both statements are false.

32._____Statement 1 - A debt may refer to an obligation to deliver money, to deliver a

thing, to do an act, or not to do an act.

Statement 2 - A debt to deliver a thing or to render service is not understood to

have been paid unless the thing or service has been completely delivered or
rendered, as the case may be.

A. Both statements are false

B. Only statement 1 is true
C. Only statement 2 is true

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 D. Both statements are true
33._____The following are examples of natural obligations, except:

A. obligation to pay interest for use of money, even if not agreed upon in
writing;
B. payment through a coercive process of the writ of execution issued at the
instance and insistence of the prevailing party;
C. duty to support natural or spurious children ( even if not recognized
voluntarily or by judicial compulsion and even if there is a judgment
denying recognition);
D. giving of material and financial assistance to children upon their marriage.

34._____ X, in a contract of agency with B, agreed to be the agent of the latter. In

the course of the agency, the agent was given certain privileges and facilities,
which however, were not incompatible with the old agreement. Was there
novation?

A. None, there was real incompatibility between the old and new
agreements.
B. None, the old and new agreements are compatible.
C. Yes, the new contract merely contains supplementary agreement.
D. Yes, there was no real incompatibility between the old and new
agreements.

35._____Debt shall not be understood to have been paid unless the thing or service in
which the obligation consists has been ___________

A. Completely a nullity
B. Partially delivered or rendered
C. Partially voided
D. Completely delivered or rendered

36._____When can there be no novation?

A. Without the consent of the debtor

B. With the consent of the creditor
C. With the consent of the debtor
D. Without the consent of the creditor

37.______In the following cases, a third person is bound by the contract. Which is the
exception?

A. A third person who acquires real rights over immovable properties, which
had been subject to a duly registered contract of lease.
B. A creditor being defrauded by his debtor in the alienation of the latter’s
property.
C. A third person who voluntarily agreed with the debtor for the payment of
the latter’s obligation.
D. In case of stipulation pour autrui.

38.______Who may claim compensation of debts?

A. A depository in a depositum
B. A lender in a commodatum
C. A taxpayer
D. A party obliged to give support

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39.______Manuel issued a Special Power of Attorney to Daniel to pay his outstanding
bank loan with a petition to compromise. The bank however, refused to accept
the offer as the proposal fell way below what the bank computed. Is there a valid
refusal?

A. YES, the debt shall not be understood to have been paid unless the thing
in which the obligation consists has been completely delivered
B. YES, as a person entering into a contract has the right to insist on its
performance in all particulars
C. NO, as the parties are free to stipulate subsequent agreements to the
contract
D. Both (a) and (b)

40.______Statement 1 - Civil obligations give a right of action to compel their

performance.

Statement 2 - Natural obligations, being based on positive law but on equity and
natural law, do not grant a right of action to enforce their performance, but after
voluntary fulfillment by the obligor, they authorize the retention of what has been
delivered or rendered by reason thereof.

A. both statements are true

B. both statements are false
C. statement (1) is correct and statement (2) is false
D. only statement (1) is false

41.______Statement 1 - A debt shall not be understood to have been paid unless the
thing was completely delivered.

Statement 2 - There is payment when the obligee issued a receipt for the current
payment of rent but reserved the right to collect the previous uncollected rents.

A. only Statement 1 is true

B. only Statement 2 is true
C. both statements are true
D. both statements are false

42.______X and Y entered into a contract. Z executed a surety undertaking for Y, the
debtor. X and Y entered into an agreement changing the interest rate. Is there
novation, as to release Z?

A. None, It is a mere collateral agreement.

B. None, because the mere change of interest rate does not extinguish the
surety undertaking.
C. Yes, the surety is not liable for the increased interest if it did not give its
consent.
D. Yes, the change of interest extinguished the security undertaking.

43.______ If payment is made with the consent of the debtor, it gives rise to:

A. moral obligation;
B. natural obligation;
C. civil obligation;
D. undue payment.

44.______Deto obliged himself to deliver 100 broiler chickens from his poultry to Credo
on January 10, 2011. Deto’s poultry caught bird flu. After it was declared free

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 from bird flu, Deto only managed to deliver 85 broiler chickens. Can Deto collect
the price for the delivered chickens?

A. YES, because there is substantial compliance and there is no indication of

bad faith from Deto
B. YES, because there was no objection when the chickens were delivered.
C. NO, because Deto did not strictly complete the whole obligation as
previously agreed upon
D. NO, because the obligation is generic.

45.______Who may set up the defense of illegality of contracts?

A. any person
B. contracting parties
C. third persons whose interests are indirectly affected
D. third persons whose interests are directly affected

46.______If A pays a debt that has prescribed not knowing that it has prescribed, A can
recover on the ground of:

A. undue payment
B. natural obligation
C. civil obligation
D. moral obligation

47.______The government entered into a contract with XYZ Association wherein the
XYZ Association will purchase 300 buses from the government in the form of a
lease payable in 10 years in monthly equal installments. Eight years before the
end of the contract, the government declared a state of emergency due to the
threat of rebellion. The government seized the buses. Later on, the declaration
of state of emergency was voided. The buses were destroyed due to the attack
by the alleged rebels. May XYZ Corporation collect the value of the buses from
the government?

A. YES, due to their substantial compliance in good faith, they have already
paid in full the price of the buses.
B. YES, as they have partially complied with their obligation and the
government was in bad faith.
C. NO, as the contract was a contract of lease to own, they cannot own the
buses until they are fully paid.
D. NO, as the seizure was due to a fortuitous event.

48.______Deto obliged himself to deliver 100 sacks of rice to Credo. S delivered only
90 sacks. Was there payment of the obligation by Deto?

A. NONE, as there is only complete payment in case the thing or service is

completely delivered or rendered
B. NONE, as the obligation was irregularly complied with
C. Both (a) and (b)
D. Neither (a) nor (b)

49.______Suppose that in a second and new contract, the debtor acknowledges or

ratifies the old contract, is there a novation?

A. None, both contracts can stand together.

B. None, both contracts are incompatible
C. Yes, both contracts cannot stand together

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 D. Yes, both contracts are incompatible.

50.______Natural obligations are based on:

A. positive law
B. equity and natural law
C. quasi-contract
D. moral law

51.______Deta borrowed Php50,000.00 from Creda. Deta issued a promissory note in

favor of Creda, stating therein that Deta should pay Creda on January 18, 2011
Php50,000.00 plus 5% interest. The promissory note stated further that in case
Deta cannot pay Creda on January 18, 2011, even without demand from
Creda, the loan will incur a surcharge of 5% per month. On January 19, 2011,
Deta paid Creda Php50,000.00 only. Is Deta obliged to pay the interest?

A. NO, because the obligation is deemed complied with due to the

acceptance of Creda without objection
B. NO, because usurious transactions are condemned by law
C. YES, because the interest was in writing.
D. YES, because the promissory note indicated that even without demand,
the loan is payable on January 18, 2011, one day before Deta paid.

52.______The complete release of one party to a contract and the substitution of

another party for the released party is called

A. A substitution by law
B. A summation
C. A novation
D. An adjudication

53.______Payment in alternative obligations arise when

A. the obligor performed the obligation he chooses from the options

B. the obligor performed one partially and another partially
C. the obligor started delivering the last possible prestation
D. none of the above

54.______Deta borrowed Php50,000.00 from Creda. Deta issued a promissory note in

favor of Creda, stating therein that Deta should pay Creda on January 18, 2011
Php50,000.00 plus 5% interest. The promissory note stated further that in case
Deta cannot pay Creda on January 18, 2011, even without demand from Creda,
the loan will incur a surcharge of 5% per month. On January 19, 2011, Deta paid
Creda Php50,000.00 only. Is Deta obliged to pay the surcharge?

A. NO, because the obligation is deemed complied with due to the

acceptance of Creda without objection
B. NO, because the surcharge is demandable only when the debtor
intentionally evades payment.
C. YES, because the parties are bound by the stipulations that they were
free to enter into.
D. YES, because the promissory note indicated that even without demand,
the loan is payable on January 18, 2011, one day before Deta paid.

55.______X agreed to repair the car of Y and Y agreed to draw the family portrait of X.
This innominate contract between them is called:

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 A. Du ut des
B. Du ut facias
C. Facio ut des
D. Facio ut facias

56.______The oblige can collect damages in case

A. of substantial performance in good faith as though there had been a strict

and complete fulfillment
B. of partial compliance accepted by the obligee without protest
C. both (a) and (b)
D. neither (a) nor (b)

57.______The creditor can refuse payment from a stranger to the contract except:

A. if there is a stipulation allowing payment by a stranger

B. if the stranger has no interest in the fulfillment of the obligation
C. if the stranger was automatically assigned by the debtor to render
payment
D. none of the above

58.______ The mortgagee permits a new owner to replace the previous owner on a
note secured by a mortgage by using which of the following?

A. Release and satisfaction

B. Subordination
C. Novation
D. Acceleration

59.______Alfie owes Brandy the sum of PhP10,000. What is the effect if Teddy, a
stranger, pays the total indebtedness of Alfie?

A. If the payment was without the consent of Alfie, Teddy can be reimburse
PhP10,000 from Alfie.
B. If the payment was with the consent of Alfie, Teddy can collect PhP10,000
from Alfie.
C. Both (a) and (b)
D. Neither (a) nor (b)

60.______S sold his cell phone to X for P5,000.00 and he promised to deliver it to X on
March 20, 2009. He sold it again to Y for P7,000.00 and he promised to deliver
it to Y on March 20, 2009. On March 19, 2009, S sold his cell phone again Z for
P6,000.00 and it was delivered to Z. Who has the better right to the cell phone
sold by S?

A. X, because he is the first buyer in good faith

B. Z, because he is the first possessor in good faith
C. Y, because he is the buyer between X and Z
D. None, because there is only one cell phone and there are three buyers

61._______ X sold and delivered various items of merchandise to Y amounting to

P200,000. When Y failed to pay his obligation, X sued him for collection of sum
of money, but Y filed an answer contending that there should be compensation
with his commission over the merchandise X sold and delivered to Z, as it has
been the practice of X to deal with Y first before he would deal with Z. the
commission of Y is usually to be determined after an accounting is made. Is the
defense proper?

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 A. No, because both debts are not due .
B. No, because the claim of Y is not clear and liquidated.
C. Yes, both parties are mutually creditors and debtors - in their own right
and as principals.
D. Yes, both debts are liquidated & demandable.
62.______May the obligor recover if there be substantial compliance that will make a
payment complete even if the obligor was in bad faith?

A. NONE, as the law requires that the obligor should be in good faith
B. NONE, as the oblige suffers damages due to the bad faith of obligor
C. YES, the law does not require that the obligor should be in good faith
D. None of the above

63._______ A promised to give B a car as a reward after B has killed C. Later, after
killing C, the contract was changed to a lease of a big house for a certain period.
What is the status of the second contract?

A. valid
B. void
C. inexistent
D. voidable

64.______As a general rule, there must be complete delivery of the entire prestation
due to make a valid payment. The exceptions to the completeness of the
delivery are the following, except:

A. In case of substantial performance in good faith

B. In case of change of the prestation with the consent of the creditor
C. In case of waiver of obligee or creditor
D. In case of application of payments if several debts are equally onerous

65.______Payment is valid if

A. there is delivery of the sum of money for monetary obligations

B. there is substantial compliance
C. there is partial payment
D. there is a receipt for every acceptance made

66.______May there be compensation of obligations that are not yet due?

A. No, both obligations must be due and demandable.

B. No, compensation is by operation of law.
C. Yes, when the other party forgot the due date of the obligation.
D. Yes, when agreed upon by the parties.

67.______D went to the residence of C to pay his obligation amounting to P100,000.00.

He was informed, however, that C was confined in the hospital. D paid his
obligation to C’s brother, who went to the hospital and spent the amount for C’s
hospital and medical expenses. One week after the release of C from the
hospital, C demanded payment of D’s obligation, but D told him that he had
already paid his obligation to C’s brother. Is the payment of D to C’s brother
valid?

A. No, because payment should be made only to the creditor.

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 B. Yes, because his payment to C’s brother redounded to the benefit of C.
C. No, because payment to a third person is not valid.
D. Yes, because C’s brother is considered authorized to receive payment for
him

68.______Statement 1 - The obligor mar recover as though there had been a complete
performance if the obligation was substantially complied with in good faith.

Statement 2 - The right to rescind cannot be used simply because there had
been slight breaches in the obligation.

A. Both statements are false

B. Only statement 1 is true
C. Both statements are true
D. Only statement 2 is true

69.______When the debtor committed fraud in the performance of his obligation, the
creditor may:

A. File an action for the annulment of the contract

B. Ask for the refund of the amount he has paid
C. File an action for damages against him
D. Set aside the contract as void

70.______ The instance in contracts, whereby after entering into an agreement or

obligation and before compliance by the parties of their obligations subsequently
agree not to pursue their contract or obligation:

A. Mutual desistance
B. Compromise agreement
C. Rescission
D. Resolution

71.______Xera asked Zara to keep P1000 for her. Now, Xera is indebted to Zara for the
amount of P500. When Xera asks for the return of her money, Zara gives her
only P500, alleging partial compensation. Is Zara correct?

A. No, one of the debts arises from a depositum.

B. No, there can be no partial compensation.
C. Yes, both obligations are due and demandable
D. Yes, compensation is by operation of law.

72.______Payment consists of

A. The delivery of money

B. Doing of an act
C. Not doing of an act
D. All of the above

73.______Statement 1 - In payment, capacity to dispose of the thing paid and capacity

to receive payment are required for debtor and creditor while in compensation,
such capacity is not necessary, because the compensation operates by law and
not by the act of the parties.

Statement 2 - In payment, the performance must be complete, while in

compensation, there may be partial extinguishment of an obligation.

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 A. Both statements are false
B. Only statement 1 is true
C. Both statements are true
D. Only statement 2 is true

74.______Which is not a requisite of novation?

A. The intention or agreement and capacity of the parties to extinguish or

modify the obligation
B. The existence of a simultaneous valid obligation
C. The creation of a valid new obligation
D. The extinguishment or modification of the obligation

75.______Statement 1 - The obligee can claim damages when there is substantial

performance of the obligation by the obligor.

Statement 2. - The obligee can claim damages when he accepted the partial
performance with protest.

A. Both statements are true

B. Both statements are false
C. Only statement 1 is true
D. Only statement 2 is true

76.______ A executes a promissory note in favor of B who subsequently indorsed it in

favor of C. The obligation to pay the promissory note of A to B is thereby
extinguished because there is:

A. confusion or merger
B. novation
C. compensation
D. condonation

77.______In partial performances, the obligation is deemed fully complied with if:

A. the obligee accepts the performance without any protest

B. the obligee issued a receipt for the payment for said installment only
C. the obligee demands damages instead of performance
D. both (a) and (c)

78.______Does payment mean only the delivery of money?

A. NO. Payment means not only the delivery of money but also the
performance in any other manner, of an obligation.
B. NO. Payment can also mean the encashment of check issued.
C. NO. Money is generic, so the payor can deliver to the payee any
monetary bills amounting to the owed money
D. YES. Delivery of money extinguished the obligation.

79.______Manuel has a two-year contract with XYZ Prime Holdings as their technical
supervisor. Two days before his contract ended, the company discovered that
he was sending confidential documents to the other rival company. Considering
that only two days remain of his contract, was there substantial compliance of his
service?

A. NONE, due to the presence of bad faith

B. NONE, as substantial compliance does not include obligations to do

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 C. Both (a) and (b)
D. Neither (a) nor (b)

80.______ABC Corporation entered into a contract of loan with PBTC secured by a

chattel mortgage. When ABC Corporation failed to pay, the bank foreclosed the
mortgage but it was objected to by the debtor contending that there was a
novation of the contract when it executed a real estate mortgage when an
extension of the loan was granted by the bank. Is the contention of the bank
correct?

A. No, mere extension of time to pay does not constitute novation.

B. No, The new contract is an additional security to the chattel mortgage.
C. Yes, there is incompatibility between the two contracts.
D. Yes, there is no novation when the period of payment is moved or
changed.

81.______Bayer paid in installments the price of the land being sold by Brandy on the
condition that Bayer cannot alienate the said property until he has fully paid the
price. Bayer has already paid 80% of the price when he sold the lot to Teddy.
Brandy moved to rescind the contract. Bayer claims that he has substantially
paid the price of the lot. How much portion of the lot can Bayer appropriate by
virtue of the nearly complete compliance?

A. 80%, in proportion to the price he has paid

B. 100% by virtue of his compliance
C. 50% because he violated the contract
D. NONE

82.______ X and Y entered into a verbal agreement for A to sell to B a parcel of land for
P5M. Can Y, the vendee, compel X to execute a public instrument of their
agreement for the sale of the parcel of land.

A. No because the verbal agreement for the sale of a parcel of land is void
not having been reduced into a public instrument when they entered into
their agreement.
B. Yes, because when a contract involving the transfer of rights over an
immovable property is entered into the parties can compel each other to
observe the form provided by law.
C. No, because the agreement for the sale of real property must be in writing
otherwise it is unenforceable.
D. Yes because a verbal agreement for the sale of real property is both valid
and enforceable.

83.______Statement 1 - When the contract entered into by two persons is illegal, they
are absolutely barred from recovering any money paid or property delivered.

Statement 2 - In case of illegal contracts, both of them may be allowed to recover

whatever money paid or property delivered.

A. statement (1) in correct and statement (2) is incorrect;

B. statement (2) is correct and statement (1) is incorrect;
C. statement (1) in incorrect only;
D. both of the statements are incorrect.

84.______When the obligee accepts the performance, knowing its incompleteness or

irregularity, is the obligation deemed fully complied with?

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 A. YES, provided that the obligee should not have expressed any protest or
objection
B. YES, provided that the obligee expressed any protest or objection
C. NO, because an obligation is only extinguished due to a fortuitous event
and the obligor has not incurred delay
D. NO, because it will cause damages against third persons.

85.______Acceptance of partial payment without protest from the obligee renders the
obligation:

A. existing
B. novated
C. compensated
D. extinguished

86.______Deto owed Credo PhP 10,000. Deto went to Abu Dhabi, UAE. Leslie, his
lessee in one of his apartments, paid Credo when Credo demanded the 10,000.
Leslie was not able to inform Deto of said payment until Leslie demanded
payment from Deto when he arrived. How much should Deto pay his lessee
Leslie?

A. PhP10,000
B. None, because the payment was made without Deto’s consent.
C. None, because the payment was made by a stranger to the contract
between Deto And Credo and it is as if no payment was made at all
D. None, because the payment was intended to defraud Deto.

87. ______There having been a meeting of minds between the contract parties but the
written agreement does not reveal the true intention of the parties, the remedy of
the parties is:

A. Annulment
B. Declaration of Nullity
C. Quieting of title
D. Reformation

88.______ “No segregation” Principle means:

A When the terms of the agreement are clear and explicit, such that they do
not justify an attempt to rean into them any alleged intention of the parties,
the terms are to be understood literally just as they appear on the face of
the contract.
B. An accessory contract must be read in its entirety and together with the
principal agreement. This principle is used in construing contractual
stipulations in order to arrive at their true meaning, certain stipulations
cannot be segregated and then made to control.
C. In the event of doubt as to the nature and conditions of a contract that
cannot be decided by the language of a document setting forth such
agreement, in justice, it must be presumed that the debtor assumed the
lesser obligation and that the liability contracted is that which permits the
greatest reciprocity of interest and rights.
D. However general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are
different from those upon which the parties intended to agree.

89.______In case an incapacitated person is a party to an illegal contract, he may be

allowed by the court to recover the money paid or property delivered if:

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 A. the purpose has not been accomplished;
B. the interest of justice so demands;
C. there has been no damage caused yet to third persons;
D. there was fraud on the part of the other party.

90._______ Statement 1 - Illegal per se contracts are those forbidden because of

private interests.

Statement 2 - Merely prohibited contracts are those forbidden because of public

interest.

A. statements (1) and (2) are correct;

B. statement (1) is correct but statement (2) is incorrect;
C. statement (1) is incorrect and statement (2) is correct;
D. both statements are incorrect.

91.______An indivisible contract which has illegal terms is considered:

A. valid
B. partly valid and partly void
C. entirely void
D. partly void and partly unenforceable

92.______Statement 1 - The defense of illegality of contracts is unavailable to those

whose interests are directly affected.

Statement 2 - The defense of illegality of contracts may be set up not only by

those whose interests are directly affected but also by those whose interests are
indirectly affected.

A. only statement (1) is false

B. only statement (2) is false
C. both statements are false
D. both statements are true

93.______If the obligation has been ___________ performed in good faith, the obligor
may recover as though there had been a strict and complete fulfillment less
damages suffered by the oblige:

A. Completely
B. Partially
C. Forcefully
D. Substantially

94.______Aya has a P10,000 savings deposit with the Philippine National bank. One
day, Aya borrowed P2000 from the bank. Without asking permission from Aya,
the bank subtracted the P2000 from Ana’s account, leaving the balance of P8000
in Aya’s favor. Is the bank’s action proper?

A. No, compensation is not proper when the obligations arise from a contract
of deposit.
B. No, the bank depositor must first give consent before compensation takes
place.
C. Yes, the relationship between the bank and the depositor is that of a
creditor and debtor.

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 D. Yes, both obligations are due and demandable.
95.______The court ordered Deto to pay his indebtedness to Credo worth PhP300,000.
Deto delivered the check amounting to PhP300,000 to the Clerk of Court as
payment of the indebtedness. Was there valid payment already?

A. NONE, as the check was not a manager’s check

B. NONE, as the check is not a legal tender
C. Yes, because delivery of the check to the court is delivery to the creditor
D. Yes because the Court accepts payments by way of checks

96.______Can there be compensation of one’s obligation over taxes?

A. Yes, a taxpayer and the government are mutually creditors and debtors -
in their own right and as principals.
B. Yes, both debts are liquidated & demandable.
C. No, Taxes are not subject to set-off or legal compensation because the
government & taxpayers are not mutually creditors & debtors of
each other.
D. No, It is an obligation in favor of government.

97.______A owes B Php 700, 000. But the debt soon prescribes. Later C, against the
consent of A, pays B the Php 700, 000. A does not have to reimburse C because
he (A) has not at all been benefited by the transaction. However, A later
voluntarily reimburses C. May A recover what he has given to C?

A. no more;
B. yes, he may;
C. only to the amount the he was benefitted
D. only half the amount

98.______When the obligor has substantially complied with the obligation that as if
there had been complete performance,

A. The obligor may recover what is due him less damages suffered by the
oblige, provided that he be in good faith
B. The obligor may recover the whole payment due him as long as he is in
good faith
C. The oblige can refuse to pay due to the incompleteness of the
performance
D. None of the above

99.______If the ceiling price for a pack of cigarettes is pegged at Php 300.00 a carton
and A paid Php 400.00 for it. How much can A recover?

A. Php 400.00 only;

B. Php 300.00 only;
C. Php 700.00;
D. Php 100.00.

100. _______What is the Latin term for delay?

A. culpa
B. dolo
C. mora
D. force majeure

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