Law
Law
Law
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a. Payment means only delivery of money but not performance, in any other manner, of an obligation.
b. A debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been
completely delivered or rendered, as the case may be.
c. If the obligation has been substantially performed in good faith, the obligor or debtor may recover as though there had been a
strict and complete fulfillment, less damage suffered by the obligee or creditor.
d. When the obligee or creditor accepts the performance, knowing its incompleteness or irregularity, and without expressing any
protest or objection, the obligation is deemed fully complied with.
Statement I. The renunciation of the principal debt shall not extinguish the accessory obligations; but the waiver of the latter shall
leave the former in force. Statement II. It is presumed that the accessory obligation of pledge has been remitted when the thing
pledge has been remitted when the thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or of a
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A. True; True
B. False; True
C. True; False
D. False; False
Obligations may be modified by: Statement I. Changing their object or principal conditions. Statement II. Substituting the person of
the debtor Statement III. Subrogating a third person in the rights of the creditor
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Who shall shoulder the extra-judicial expenses required by the payment of an obligation?
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a. Debtor
b. Creditor
c. Government
d. None of the above
The following are the rules concerning the payment of debts in money, except
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a. The payment of debts in money shall be made in the currency stipulated even it is foreign currency.
b. In case the delivery of the currency stipulated is not possible, the payment of debts in money shall be made in the currency
which is legal tender in the Philippines.
c. The delivery of promissory notes payable to order or bills of exchange or other mercantile documents shall produce the effect of
payment only when they have been cashed or when through the fault of the creditor they have been impaired or when the amount
has already been credited to the bank account of creditor.
d. In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency at the time
of the payment of the obligation shall be the basis of payment, unless there is an agreement to the contrary.
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 P10,000.00 to Wilma payable within the first five days of the month. Wilma owes henry. P10,000.00 by
way of a business loan. On the other hand, henry has not yet given Wilma’s support of P10,000.00 for this month. Both debts are
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a. Both debts are extinguished by legal compensation because both are already due
b. Wilma may claim compensation but not henry
c. Henry may claim compensation but not Wilma
d. Neither one may claim compensation because the debts are not of the same kind.
It refers to such currency which in a given jurisdiction can be used for the payment of debts, public or private, and which cannot be
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a. Legal tender
b. Foreign currency
c. Local currency
d. International currency
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a. Payment made to the creditor by the debtor after the latter has been judicially ordered to retain the debt shall not be valid.
b. The debtor of a thing cannot compel the creditor to receive a different one, although the latter may of the same value as, or
more valuable than that which is due.
c. In obligations to do or not to do, an act or forbearance cannot be substituted by another act or forbearance against the obligee's
or creditor's will.
d. When the obligation consists in the delivery of an indeterminate or generic thing, whose quality and circumstances have not
been stated, the creditor can demand a thing of superior quality and the debtor can deliver a thing of inferior quality.
What is the remedy of the debtor if the creditor to who tender of payment has been validly made refuses without just cause to accept
it?
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If the creditor to who tender of payment has been made refuses without just cause to accept it, the debtor shall be released from his
obligation by the consignation of the thing or sum due. Consignation without tender of payment shall release the debtor from
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It is presumed that there is legal subrogation: Statement I. When the creditor pays another creditor who is preferred, even without
the debtor’s knowledge. Statement II. When a third person, not interested in the obligation, pays with the express or tacit approval of
the debtor. Statement III. When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation
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A. I and II only
B. I, II and IV only
C. I, II and III
D. I, III and IV only
The assignment or abandonment of all the properties of the debtor for the benefit of his creditors in order that the latter may sell the
same and apply the proceeds therof to the satisfaction of their credits.
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a. Dation en pago
b. Payment by cession
c. Application of payment
d. Consignation
In order that an obligation may be extinguished by the loss of the thing, the following requisites must be present: Statement I. The
obligation is to deliver a specific or determinate thing. Statement II. The loss of the thing occurs without the fault of the debtor
Statement III. The debtor is not guilty of delay. Statement IV. The law so provides.
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If the obligation to pay a sum of money is changed to obligation to deliver a determinate thing before the maturity date of the loan,
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a. Payment by cession
b. Novation
c. Cession
d. Compensation
When a third person assumes the payment of the obligation even without the knowledge and consent of the debtor but with the
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a. There is novation.
b. There is delegacion if debtor is released.
c. There is subrogation.
d. There is expromision if debtor is released.
D owes C P6,000.00 which is due on January 10, and another debt of P12,000.00 which is due on January 20. Both debts are
unsecured and non-interest bearing and are already due. D however, has only P3,000.00 which he gives to C without informing C as
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a. The payment of P3,000.00 shall be applied to the debt due on January 10 because it was the first to become due.
b. The payment of P3,000.00 shall be applied to the debt due on January 20 because it is of a greater amount.
c. Payment cannot be applied to either of the two debts because it is incomplete.
d. The payment of P3,000.00 shall be applied proportionately in the amount of P1,000.00 to the debt due on January 10, and
P2,000.00 to the debt due on January 20.
In order that consignation may be effective the debtor must comply first with the following requisites or formalities, except
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a. The debtor must personally deposit the thing to the court and not through his counsel.
b. The debt must be due.
c. The consignation was made by debtor because of some legal cause provided by law which is mora accipiendi or delay on the
part of creditor.
d. Previous notice of the consignation has been given to the creditor or persons interested in the performance of the obligation. (1"
notice to creditor of intent to consign)
e. The amount or thing was placed at the disposal of the court.
f. After the consignation, the creditor or persons interested in the performance of obligation were notified thereof. (20d notice to
creditor of actual consignation)
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
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a. The novation is void because the original obligation is void. Hence C cannot demand the delivery of 5 sacks of rice from D.
b. The novation is valid because the new obligation is valid. Hence, C can demand the delivery of 5 sacks of rice from D.
c. The original obligation although void is validated by the new obligation, hence, C can demand the delivery of 5 sacks of rice
from D
d. The new obligation is only voidable because 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.
D issued a promissory note payable to the order of C for a debt of P10,000.00 which bears interest at 2% per month.. On due date,
X went to the place of D to collect the debt claiming that C assigned the note to him. X, however, could not present the promissory
note claiming that he had lost it. D wants to make the payment because he does not want the interest to accrue but he is at a loss
as to whether he would make the payment to X. in this case, the course of action that you will advise D to take is.
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a. consignation.
b. tender of payment.
c. application of payment.
d. dation of payment.
Which of the following statements is correct about the effects of fortuitous event in obligation to do?
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a. The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the
fault of the obligor.
b. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligation may also
be released therefrom, in whole or in part.
c. Both A and B
d. Neither A nor B
What is the right of a third person who pays for the debtor without the knowledge or against the will of the debtor?
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a. The third person may demand the whole amount paid from the debtor.
b. The third person cannot recover any amount.
c. The third person may compel the creditor to subrogate him in his rights, such as those arising from a mortgage, guaranty or
penalty.
d. The third person may recover only insofar as the payment has been beneficial to the debtor but there will be no legal
subrogation.
The designation of the debt to which should be applied the payment made by a debtor who has various debts of the same kind in
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a. Dation en pago
b. Payment by cession
c. Application of payment
d. Consignation
Payment made to a third person shall also be valid insofar as it has redounded to the benefit of the creditor. As a general rule, the
debtor must prove that the payment to a third person redounded to the benefit of the creditor. The following are the exceptional
cases wherein the debtor need not prove that the payment to third person redounded to the benefit of creditor for such payment to
be valid, except
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a. If after the payment, the third person acquires the creditor's rights.
b. If the creditor ratifies the payment to the third person.
c. If by the creditor's conduct, the debtor has led to believe that the third person had authority to receive payment.
d. If the third person is not authorized by the creditor.
It refers to a special type of payment which involves the voluntary abandonment of the universality of the property of the debtor for
the benefit of his creditors, in order that such property may be applied to the payment of the credits. Generally, the debtor will be
released from his obligations but only up to the extent of the proceeds from the sale of his properties by the creditors.
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A. Dation in payment
B. Application of payments
C. Payment by cession or Assignment
D. Tender of payment and consignation
Statement I. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be made
expressly or impliedly. Statement II. One and the other kind shall be subject to the rules which govern inofficious donations. Express
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A. True; True
B. False; True
C. True; False
D. False; False
It is a mode of extinguishing obligation which refers to the fulfillment of the prestation due
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a. Novation
b. Payment or Performance
c. Compensation
d. Merger
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a. Debtor
b. Creditor
c. Both debtor and creditor
d. Neither debtor nor creditor
Is the creditor required to accept payment or performance by a third person who has no interest in the fulfillment of the obligation?
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It refers to a special form of payment whereby a property is alienated to the creditor in satisfaction of a debt in money when the loan
in money is already due at the time of change. Generally, the obligation is fully extinguished by this special form of payment in the
a. Application of payment
b. Payment by cession
c. Dation in payment or dacion en pago
d. Tender of payment and consignation
M owes P P10,000.00. the obligation is evidenced by a promissory note. Subsequently, P assigned the note to A, A to B, B to C,
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a. Compensation
b. Confusion
c. Condonation
d. The obligation is not extinguished because there was no payment.
Which of the following statements concerning the legal tender based on the rules issued by Bangko Sentral ng Pilipinas is incorrect?
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a. That each one of the obligors be bound principally and that he be at the same time a principal creditor of the other
b. That the two debts be due
c. That both debts be liquidates and demandable
d. That the debts are payable at the same place
The following statements concerning the loss of the object of the obligation due to fortuitous event is correct, except
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a. The courts shall determine whether, under the circumstances, the partial loss of the object of the obligation is so important as to
extinguish the obligation.
b. When the debt of a thing certain and determinate proceeds from a criminal offense, the debtor shall not be exempted from the
payment of its price, whatever may be the cause for the loss, unless the thing having been offered by him to the person who
should receive it, the latter refused without justification to accept it.
c. The obligation having been extinguished by the loss of the thing, the creditor shall have all the rights of action which the debtor
may have against third persons by reason of the loss.
d. Loss due to fortuitous event as a mode of extinguishment of obligation is applicable to obligation to deliver a generic thing.
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a. Wherever the thing might be at the moment the obligation was constituted or perfected.
b. Place designated in the obligation.
c. Domicile of the debtor.
d. Domicile of the creditor.
D bought a plane ticket for Hong Kong from wings travel company. Later however D cancelled his flight to Hong Kong because of
the SARS epidemic in the place. Upon being informed of the cancellation, wings travel told D that D could get the refund of his plane
ticket within two days. In the meantime, D thought of going instead to Australia so he called Wings Travel to send to him a ticket in
two days. Assuming that the refund due to D for his unused plane ticket to Hong Kong is of the same amount as the cost of his
plane ticket to Australia, D two days later need not pay Wings Travel by reason of:
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a. Confusion
b. Novation
c. Compensation
d. Condonation
The following condonations are presented to you for evaluation: Statement I. A condonation involving a debt of an immovable
property which was embodied in a private instrument together with the acceptance thereof. Statement II. A condonation involving a
money debt of P6,000.00 made and accepted orally with the creditor making a simultaneous delivery to the debtor of the promissory
note evidencing the credit. In your evaluation of the above condonations the obligation is:
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The following statements concerning payment made by a third person who does not intend to be reimbursed by the debtor are
correct, except
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a. It is deemed to be a donation.
b. It requires the debtor's consent.
c. The payment is in any case valid as to the creditor who has accepted it.
d. The payment will subrogate the third person with creditor's rights.
D owes C P50,000.00. Subsequently, D proposed to C that T will assume his (D’s) debt C accepted the proposal of D. This type of
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a. Delegacion
b. Expromision
c. Objective novation
d. Subrogation
Statement I. It must take place between the principal debtor and creditor
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A. True; True
B. False; True
C. True; False
D. False; False
Dolores borrowed P15,000.00 from Consuelo. On due date, Dolores was not able to pay but she promised to give Consuelo a
specific ring, a specific bracelet, or a specific necklace, in payment of the debt. Consuelo accepted the offer of Dolores. How was
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a. By compensation.
b. By novation.
c. By confusion.
d. By condonation.
The following are the requisites of legal compensation, except:
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a. That each one of the obligors be bound subsidiarily, and that he be at the same time a principal creditor of the other.
b. That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same
quality if the latter has been stated.
c. That the two debts be due.
d. That they be liquidated and demandable.
D owes C Php1M. G is the guarantor. A stranger, X paid the debt of D without the knowledge of the latter. In this case:
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The following are the requisites in order that on obligation to give a determinate thing will be extinguished, except:
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D owes C the following debts, P3,000.00 due on August 10, P3,000.00 due on August 15, P3,000.00 due on August 20; and
P3,000.00 due on August 25 which is secured by a pledge of D’s ring. If today is August 22, ad D pays C P3,000.0 with neither D
nor C designating the debt to which the payment shall apply, the payment shall be applied:
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a. To the debt due on August 10, following the “fist-due, fist-pay” basis.
b. To the debts due on August 10, August 15, and August 20, proportionately at P1,000.00 each.
c. To the debt due on August 25, since it is the most onerous to D.
d. To all the debts proportionately at P750.00 each.
Legal compensation shall not be proper in three of the following cases. Which is the exception?
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a. Commodatum
b. Civil liability arising from a criminal offense
c. Gratuitous support
d. Bank deposit
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True
False
When the debtor and the creditor agree to a dacion en pago (transfer of ownership of property to the creditor to settle a monetary
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a. Compensation
b. Confusion
c. Condonation
d. Novation
The following statements pertain to either payment by cession or dacion en pago. Statement I. The debtor is insolvent. Statement II.
Ownership of the thing/s is transferred to the creditor/s. Statement III. Plurality of creditors is required. Statement IV. Obligations are
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The following are the effects if the debtor withdraws after proper consignation, except:
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D bought a plane ticket for Hong Kong from Wings Travel Company. Later, however, D cancelled his flight to Hong Kong because of
the SARS epidemic in the place. Upon being informed of the cancellation, Wings Travel told D could get the refund of his plane
ticket within two days. In the meantime, D thought of going instead of Australia so he called Wings Travel to send to him a ticket for
Brisbane promising to pay the cost of the ticket in two days. Assuming that the refund due to D for his unused plane ticket to Hong
Kong is of the same amount as the cost of his plane ticket to Australia, D two days later need not pay Wings Travel by reason of:
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a. Confusion
b. Novation
c. Compensation
d. Condonation
The estate of X who died recently, shows, among other documents/contracts, the following: Statement I. A certificate from Harvard
University granting a scholarship to X was subjected to exhaustive examinations and interviews before he was granted the
scholarship. He was supposed to start studying at Harvard in 3 months’ time. Statement II. Articles of partnership of XYZ Enterprise
showing X as a general partner. Statement III. A stock certificate of DEF Corporation showing as the owner of 5,000 shares of stock.
Statement IV. A promissory note amounting to P100,000.00 executed by M in favor of X. The noted is due after 90 days. Which of
the rights of X arising from the said documents/contracts will be transmitted to the heirs of X?
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a. I and II
b. II and III
c. III and IV
d. I and IV
a. The right to designate the debt to which the payment shall be applied belongs primarily to the debtor.
b. If the debtor does not apply payment, the creditor may designate which debt is paid by specifying in the receipt.
c. If the creditor did not apply or if application is void, the debt which is most onerous to the creditor, among those due, shall be
deemed to have been satisfied.
d. If the debts due are of the same nature and burden, the payment shall be applied to all of them proportionately.
Hilario, husband, and Wynona, wife, are legally separated. By order of the court which decreed the legal separation, Hilario is
obliged to give a monthly support of P20,000.00 to Wynona payable in advance within the first five days of the month, Wynona owes
Hilario P20,000.00 by way of loan. On the other hand, Hilario has not yet given Wynona’s support of P20,000.00 for the preceding
month and another P20,000.00 for the present month. All the debts are already due. Based on the foregoing facts, which of the
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a. If Wynona demands her support for the preceding month, Hilario may set up compensation as regards the loan that Wynona
owes him.
b. If Wynona demands her support for the current month, Hilario may claim compensation as regards the loan that Wynona owes
him.
c. If Hilario demands payment of the loan, Wynona may set up compensation as regards her support for the preceding month that
Hilario owes her.
d. If Hilario demands payment of the loan, Wynona may set up compensation as regards her support for the current month that
Hilario owes her.
The relationship of the depositors and the Bank or similar institution is that of creditor-debtor. Such deposit may be set off against
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True
False
M executed a promissory note payable to P for P100,000.00. the note, which bears interest at 2% per month, is payable after 60
days. On the date of maturity, P proceeded to M’s place to collect but when M demanded the presentation of the promissory note, P
could not present it claiming that it had been lost. M is able and willing to pay the whole amount due including the interest but he is
at a loss on what to do because P does not have the instrument. On the other hand, if he does not pay the amount due, the interest
on the principal will continue to accrue. If you were M, the remedy that you will likely avail yourself of is:
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a. Dacion en pago
b. Payment by cession
c. Consignation
d. Application of payment
The will to novate must appear by express agreement of the parties, or by their acts which are too clear or unequivocal to be
mistaken.
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True
False
Dolores borrowed P15,000.00 from Consuelo. On due date, Dolores was not able to pay but she promised to give Consuelo a
specific ring, a specific bracelet, or a specific necklace, in payment of the debt. Consuelo accepted the offer of Dolores. How was
a. By compensation
b. By novation
c. By confusion
d. By condonation
D owes C the following debts: P6,000.00 due on January 1, P6,000.00 due on January 15; P6,000.00 due on January 31; P6,000.00
due on February 15; P6,000.00 due on February 28; and P6,000.00 due on March 15. All the debts are unsecured except the one
due on February 28. The parties stipulated that C may demand payment on or before the due date of each debt. Assume that today
is February 16. D, however, has not yet paid any of the debts. He has in possession P6,000.00 which he intends to pay to C.
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a. D may apply the payment to the debt due on February 28 because it it the most burdensome to him.
b. D may apply the payment to any of the five unsecured debts.
c. D may apply the payment to any of the four debts that have become due as of tday, February 16.
d. D may apply the payment to all of the debts that have become due as of today, February 16, proportionately at P1,500.00 each.
In a solidary obligation, if the confusion takes place in one of the solidary debtors, the entire obligation is extinguished.
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True
False
Compensation shall be proper when one of the debts arises from a depositum or from the obligation of a depositary or of a bailee in
commodatum.
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True
False
Novation is never presumed, and the animus novandi, must appear by express agreement of the parties, or by their acts that are too
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True
False
D obtained a loan of P100,000.00 from C. D used the amount as placement fee for a job in the Middle East. The loan agreement
showed that the loan was payable within one year with interest at 6% per annum. However, there was no provision saying that the
rights and obligations of the parties would be transmitted to their heirs or successors-in-interest. Before maturity, D died leaving his
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a. C cannot collect from S because no mention was made in the agreement between D and C that the rights and obligations of the
parties would be transmitted to their heirs.
b. C can collect from S although no mention was made in the agreement that rights and obligations would be transmitted to the
heirs.
c. C cannot collect from S because the obligation is personal to D
d. C cannot collect from S because the law prohibits the transmission of the obligation.
Statement I. In compensation there must be at least two obligation. Statement II. In confusion there is only one obligation.
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a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
Compensation can take place where one claim is still the subjects of litigation.
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True
False
If the heirs of the deceased creditor questioned the officiousness of the donation of credit evidenced by the voluntary return of the
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a. The debtor may prove by evidence that the obligation is actually extinguished by payment and not by donation.
b. The debtor is now mandatorily required to pay the obligation.
c. The debtor may ask the deceased creditor to testify.
d. The debtor may interpose the defense that the obligation is extinguished by the debt of the creditor.
Maila made a non-negotiable promissory note with Pia as payee. Pia assigned the note to Aiko, Aiko assigned the note to Bea. Bea
assigned the note to Carmina, Carmina assigned the note to Helen, and Helen assigned it back to Maila.
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D obtained a loan from C amounting to P50,000.00 which is payable in 1 equal monthly installments. The loan bears interest of 1%
per month which D agreed to give to T, a student whom C is sending to school. To secure the loan, D executed a chattel mortgage
on his car. Although D has been paying the monthly interest to T, D could not pay any of the installments due. In view thereof, D
proposed, and C accepted, that D should give instead a diamond ring to C in place of the loan of P50,000.00 within two months from
their new agreement. T, however, was not notified of the new obligation. Based on the foregoing facts, which of the following
statements is incorrect?
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a. To compel the debtor to make the delivery, if the obligation is to deliver a determinate thing.
b. To ask that the obligation be complied with at the expense of the debtor, if the obligation is to deliver a generic thing.
c. To compel the debtor to perform the obligation, if the obligation is an obligation to do.
d. To ask the debtor that what has been done be undone, if the obligation is an obligation not to do.
The delivery of mercantile documents such as checks will produce the effect of payment.
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a. When through the fault of the creditor they have been impaired.
b. Upon delivery of the mercantile document.
c. When they are certified by the bank.
d. When they are presented to the bank for payment.
In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation.
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True
False
A, B, and C owed in solidum P15,000 to X as evidenced by a promissory note. The note prescribed on June 15, 2018. On August 1,
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D is indebted to C for P20,000.00 which is due on June 10. C owes D P15,000.00 which is due on June 5, On June 8, C assigned
his credit rights to T. D gave his consent to the assignment but did not reserve his right to the compensation. On June 10, how much
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a. P20,000.00
b. P15,000.00
c. P5,000..00
d. Nothing
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Novation may take place by changing the object or principal conditions of the obligation
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True
False
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True
False
If the buyer failed to pay the downpayment on time. But then, the seller accepted, without any objections, the delayed payments of
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of the ring that he had lent to C. C refused to return the ring claiming that there was compensation between his obligation to return
the ring of D and D’s obligation to give him a ring. Based on the foregoing facts, which of the following statements is incorrect?
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A special form of payment whereby the debtor abandons all of his property for the benefit of his creditors in order that from the
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a. Application of payment
b. Dation in payment
c. Payment by cession
d. Tender of payment and consignation
When the principal obligation is extinguished in consequence of a novation, the accessory obligations are not extinguished.
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True
False