18. I.

Dacion en pago is a special mode of payment whereby the debtor offers another thing to the
creditor who accepts it as an outstanding obligation.
II. The undertaking is really one of sale, that is, the creditor is really buying the thing or property of the
debtor, payment for which is to be charged equivalent of payment of against the debtor's debt.
a. Only I is true
b. Only II is true
c. Both are true
d. both are false

Letter A There is dation in payment when property is alienated to the creditor in satisfaction of a
debt in money. Indeed, pursuant to Article 1232 of the Civil Code, an obligation is extinguished by
payment or performance. There is payment when there is delivery of money or performance of an
obligation. Article 1245 of the Civil Code provides for a special mode of payment called dation in
payment (dación en pago). There is dation in payment when property is alienated to the creditor in
satisfaction of a debt in money. Here, the debtor delivers and transmits to the creditor the former’s
ownership over a thing as an accepted equivalent of the payment or performance of an outstanding
debt. In such cases, Article 1245 provides that the law on sales shall apply, since the undertaking really
partakes –in one sense of the nature of sale; that is, the creditor is really buying the thing or property of
the debtor, the payment for which is to be charged against the debtor’s obligation. Dation in payment
extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by
the parties or as may be proved, unless the parties by agreement – express or implied, or by their
silence – consider the thing as equivalent to the obligation, in which case the obligation is totally
extinguished.

19. I. Dacion en pago is a special mode of payment whereby the debtor offers another thing to the
creditor who accepts it as an outstanding obligation.
II. It is only when the thing offered as an creditor that novation takes place, thereby, totally
extinguishing the debt.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because in case G.R. No. 161004 explains that Dacion en pago is a special mode of
payment whereby the debtor offers another thing to the creditor who accepts it as equivalent of
payment of an outstanding obligation. The undertaking is really one of sale, that is, the creditor is really
buying the thing or property of the debtor, payment for which is to be charged against the debtor’s
debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or
consideration must be present. It is only when the thing offered as an equivalent is accepted by the
creditor that novation takes place, thereby, totally extinguishing the debt.

20. 1. Dacion en pago is the delivery and transmission of ownership another thing by the debtor
to the creditor as an accepted equivalent of performance of an obligation.
II. It partakes of the nature of a contract of sale, where the thing offered by the debtor is the
object of the contract, while the debt is consideration or purchase price.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter c because explains G.R. No. L-50449. Dacion en pago is the delivery and
transmission of ownership another thing by the debtor to the creditor as an accepted equivalent
of performance of an obligation. And according to Article 1232. Payment means not only the
delivery of money but also the performance, in any manner, of an obligation. And according to Article
1245. Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in
money, shall be governed by the law of sales.

21, I. 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.
II. The extrajudicial expenses required by the payment shall be for the account of the creditor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter A because according The extrajudicial expenses of payment are for the account of the debtor. The
reason is that the obligation is extinguished when payment is made and it is, therefore, the debtor who
is primarily benefited. If the parties have made a stipulation as to who will bear the expenses, then their
stipulation shall be followed. Article 1247 does not apply to expenses incurred by the creditor in going to
the debtor’s domicile to collect.

22. Partial payments are allowed in the following cases:

I. When there is an express stipulation to that effect.
II. When the debt is in part liquidated and in part unliquidated.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because according to Art. 1248. Unless there is an express stipulation to that effect, the
creditor cannot be compelled partially to receive the prestations in which the obligation consists.
Neither may the debtor be required to make partial payments. However, when the debt is in part
liquidated and in part unliquidated, the creditor may demand and the debtor may effect the payment of
the former without waiting for the liquidation of the latter.
23. When the amount is known or is determinable by inspection of the terms promissory notes and
related conditions of the relevant documentation.
a. Debt is due
b. Debt is liquidated
c. Debt is unliquidated
d. Debt is demandable

Letter B. because as explained G.R. No. 193228 When the amount is known or is determinable
by inspection of the term’s promissory notes and related conditions of the relevant documentation.

24. I. The delivery of promissory notes payable to order, or bills of exchange or other mercantile
documents shall not produce the effect of payment except:
a. When they have been cashed.
II When through the fault of the creditor they have been impaired.
a. Only I is true
b. Only II is true
C. Both are true
d. Both are false

Letter d because according to Art. 1249 of the Civil Code specifically provides that checks should
be presented for payment within a reasonable period after their issuance, to wit: Art. 1249. The
payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver
such currency, then in the currency which is legal tender in the Philippines. 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.

25. I. As a general rule, a check constitutes legal tender, but a creditor may validly refuse it.
II. A check does not constitute legal tender, but it does not prevent a creditor from accepting a check as
payment.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B because according to jurisprudence as general rule check constitutes legal tender, but a
creditor may validly refuse it. A check does not constitute legal tender, but it does not prevent a creditor
from accepting a check as payment.

26. The sharp increase of money or credit, or both, without a corresponding increase in business
transaction.
a. Deflation
b. Extraordinary deflation
c. Extraordinary inflation
d. Inflation

Letter D. as explained by BSP the sharp increase of money or credit, or both, without a
corresponding increase in business transaction. And there is inflation when increased in volume of
money

27. For extraordinary inflation (or deflation) to affect an obligation, the following requisites must be
proven, except:
a. That there was an official declaration of extraordinary inflation or deflation from the Bangko Sentral
ng Pilipinas (BSP).
b. That the obligation was contractual in nature.
c. That the parties expressly agreed to consider the effects of the extraordinary inflation or deflation.
d. That the obligation was not contractual in nature
Letter d because as explains in G.R. No. 171545For extraordinary inflation (or deflation) to
affect an obligation, the following requisites must be proven:1. that there was an official declaration
of extraordinary inflation or deflation from the Bangko Sentral ng Pilipinas (BSP);74
2. that the obligation was contractual in nature;75 and
3. that the parties expressly agreed to consider the effects of the extraordinary inflation or deflation

28. I. In case of extraordinary inflation or deflation, the value of the currency at the time of the
establishment of the obligation shall be the basis for the payment when no agreement to the contrary is
stipulated, has strict application only to contractual obligations.
II. A contractual agreement is not needed for the effects of extraordinary inflation to be taken into
account to alter the value of the currency.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter A. because in Article 1250. In case an extraordinary inflation or deflation of the currency
stipulated should intervene, the value of the currency at the time of the establishment of the obligation
shall be the basis of payment, unless there is an agreement to the contrary.

29. I. As a general rule, payment shall be made in the place of business of the debtor
II. There being no express stipulation and if the undertaking is to deliver a determinate thing, the
payment shall be made wherever the thing might be at the moment the obligation was constituted.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
 Letter B. because as explained in rule 4 As a general rule, payment not be made in the place of
business of the debtor and There being no express stipulation and if the undertaking is to deliver a
determinate thing, the payment shall be made wherever the thing might be at the moment the
obligation was constituted.

30. These are the rules on the place of payment of the obligation, except:
a. Payment shall be made in the place stipulated by the parties.
b. If there is no stipulation and the obligation is to deliver a
determinate thing, payment shall be made wherever the thing might be at the moment the obligation
was constituted.
c. In any other case, the place of payment shall be the domicile of the debtor.
d. In any other case, the place of payment shall be at the municipal trial court where the obligation
was perfected

31. The designation of the debt to which the payment must be applied when the debtor has several
obligations of the same kind in favor of the same creditor
a.Application of payment
b.Dacion en pago
C. Cession in payment
D. Tender of payment consignation

Letter A because according to article 1245 subsection 1 of article of the Philippines designation
of the debt to which the payment must be applied when the debtor has several obligations of the same
kind in favor of the same creditor

32. The following are special forms of payment, except:

a. Application of payment
b. Dation in payment
c. Check encashment
d. Payment by cession

Letter C. because according to article 1245 special forms of payment are 1. Application of
payment 2.Dation in payment 3. Payment by cession

33. The following are requisites of application of payment, except:

a. There must be only one debtor and only one creditor.
b. There must be one or more debts of the same kind.
c. All of the debts must be due.
d. The amount paid by the debtor must not be sufficient to cover the total amount of all the debts.

34. The rules on application of payment are the following, except:

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 design 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 bedeemed 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.

Letter A because according to article 1245 subsection the three rules are The right to designate the debt
to which the payment shall be applied belongs primarily to the debtor. If the debtor does not apply
payment, the creditor may design which debt is paid by specifying in the receipt. If the debts due are of
the same nature and burden, the payment shall be applied to all of them proportionately

35. I. The debtor's right to apply payment is mandatory.

II. The debtor's right to apply payment cannot be waived.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Lette D because According to article1252He who has various debts of the same
kind in favor of one and the same creditor, may declare at the time of making the
payment, to which of them the same must be applied. Unless the parties so stipulate, or
when the application of payment is made by the party for whose benefit the term has
been constituted, application shall not be made as to debts which are not yet due. If the
debtor accepts from the creditor a receipt in which an application of the payment is
made, the former cannot complain of the same, unless there is a cause for invalidating
the contract.

36. I. In case the debtor does not make the application of payment nor the creditor does not also state
in which application of payment is made then application is made by operation of law.
II. If the debts due are of the same nature and burden, meaning there is debt which is most onerous, the
payment shall be applied to all of them proportionately.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter c. because according to the rules of application of payment in case the debtor does not make the
application of payment nor the creditor does not also state in which application of payment is made
then application is made by operation of law. If the debts due are of the same nature and burden,
meaning there is debt which is most onerous, the payment shall be applied to all of them
proportionately.
37. A special form of payment whereby the debtor abandons all of his property for the benefit of his
creditors in order that from the procee a thereof the latter may obtain payment of their credits.
a. Application of payment
b. Payment by cession
c. dation in payment
d. tender of payment and consignation

Letter b. because according to article 1255. Payment by cession A special form of payment
whereby the debtor abandons all of his property for the benefit of his creditors in order that from the
procee a thereof the latter may obtain payment of their credits. And this is cause or consideration is the
extinguishment of the obligation, from the debtors point of view; and the assignment of the things to be
sold, from the creditors' point of view.

38. The following are requisites of payment by cession, except:

a. There must be two or more creditors.
b. The debtor must be partially or relatively insolvent.
c. The solvency of the debtor is immaterial
d. There must be an acceptance of the cession by the creditors.

Letter C. because in subsection 2 states that :There is plurality of debts; Debtor must be
partial or completely insolvent; There are at least 2 creditors; there is acceptance of
the cession or assignment by the creditors; The property ceded or assigned must not
exempt from execution.

39. I. In payment by cession the debtor is not necessarily in a state of financial difficulty.
II. In dacion en pago, the debtor is in a state of partial or relative insolvency.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because as explained In G R 172592 that payment by cession the debtor is not
necessarily in a state of financial difficulty. In dacion en pago, the debtor is in a state of partial or relative
insolvency.

40. I. In dacion en pago, what is delivered by the debtor is merely be considered as the equivalent of the
performance of the obligation.
II. In payment by cession, what is ceded by the debtor is the universality of all his property.
thing
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter c. because According to GR117693 In dacion en pago, what is delivered by the debtor is merely be
considered as the equivalent of the performance of the obligation. and In payment by cession, what is
ceded by the debtor is the universality of all his property.

41. Is the definitive act of offering the creditor what is due him or her together with the demand that
the creditor accepts the same.
a. Consignation
b. Payment by cession
Dation in payment
d. Tender of payments

Letter D. because according to the GR5298 Is the definitive act of offering the creditor
what is due him or her together with the demand that the creditor accepts the same.the effect of
a valid tender of payment is merely to exempt the debtor from payment of interest and/or
damages. Tender of payment alone is not a mode of extinguishing obligations.

42. The thing due is deposited and placed at the disposal of the judicial authorities for the creditor to
collect.
a. Consignation
b. Payment by cession
c. Dation in payment
d. Tender of payment

Letter A. because in CONSIGNATION, contracts. In the civil law, it is a deposit which a debtor
makes of the thing that he owes, into the hands of a third person, and under the authority and The thing
due is deposited and placed at the disposal of the judicial authorities for the creditor to collect.

43. Is the act of depositing the thing due with the court or judicial authorities whenever the creditor
cannot accept or refuses to accept payment, and it generally requires a prior tender of payment.
a. Payment by cession
b. Dation in payment
c. Consignation
d. Tender of payments

Letter c. because in Consignation As explained in GR 37845 Is the act of depositing the thing due
with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment,
and it generally requires a prior tender of payment.
44. I. Tender is the antecedent of consignation, that is, an act preparatory tothe consignation, which is
the principal, and from which are derived immediate consequences which the debtor desires or seeks to
obtain.
II. Tender of payment may be judicial, while consignation is necessarily extrajudicial, and the priority of
the first is the attempt to make a private settlement before proceeding to the solemnities of
consignation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter A. because according to GR 138588 Tender is the antecedent of consignation, that is, an
act preparatory tothe consignation, which is the principal, and from which are derived immediate
consequences which the debtor desires or seeks to obtain.

45. In order that consignation may be effective, the debtor must show that except:
a. There was a debt due.
b. Previous notice of the consignation had been given to the person interested in the performance of
the obligation.
c. The amount due was placed at the disposal of the court.
d. After the consignation had been made, the person interested may not be notified of the action.

Letter d. because According to GR 169501 In order that consignation may be effective, the
debtor must show that except: There was a debt due. Previous notice of the consignation had been
given to the person interested in the performance of the obligation. The amount due was placed at the
disposal of the court.

46. I. The codal provision of the Civil Code dealing with consignation should be accorded a mandatory
construction.
II. There should be notice to the creditor prior and after consignation as required by the Civil Code.
a. Only I is true
b. Only II is true
C. Both are true
d. Both are false

Letter C. because According to GR 10927 The codal provision of the Civil Code dealing with
consignation should be accorded a mandatory construction.There should be notice to the creditor prior
and after consignation as required by the Civil Code.

47. I. The rationale for consignation is to avoid the performance of a obligation becoming more onerous
to the debtor by reason of causes not imputable to him.
II. Tender is the antecedent of consignation, that is, an act preparatory the consignation, which is the
principal, and from which are derived to immediate consequences which the debtor desires or seeks to
obtain
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. According to the GR 1794 The rationale for consignation is to avoid the performance of
a obligation becoming more onerous to the debtor by reason of causes not imputable to him. Tender is
the antecedent of consignation, that is, an act preparatory the consignation, which is the principal, and
from which are derived to immediate consequences which the debtor desires or seeks to

48. I. Without the notice first announced to the persons interested in the fulfillment of the obligation,
the consignation as a payment is voidable
II. The fact that in previous years payment in check was accepted does not place its creditor in estoppel
from requiring the debtor to pay his obligation in cash.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B. because According to GR. 9234 Without the notice first announced to the persons
interested in the fulfillment of the obligation, the consignation as a payment is void. In previous years
payment in check was accepted does not place its creditor in estoppel from requiring the debtor to pay
his obligation in cash.

49. I. Payment in check by the debtor may be acceptable as valid, if no prompt

abjection to said payment is made.
II. If, the consignation having been made, the creditor should authorize the
debtor to with draw the same, he shall lose every preference which he
may have over the thing.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because according to Art. 1261. If, the consignation having been made, the creditor
should authorize the debtor to withdraw the same, he shall lose every preference which he may have
over the thing. The co-debtors, guarantors and sureties shall be released. (1181a) Effect of withdrawal
with authority of the creditor, since consignation is for the benefit of the creditor, he may authorize the
debtor to withdraw the deposit after he has accepted the same or after the issuance of the court
cancelled the obligation, the co-debtors, guarantors and surety shall be released from the obligation.
The solidary debtors shall be released only from their solidary liability, but not from the share of their
obligation.
50. The following are the effects if the debtor withdraws after proper consignation, except:
a. The obligation remains.
b. The obligation is extinguished
c. The creditor shall lose every preference which he may have over the thing.
d. The co-debtors, guarantors and sureties shall be released

Letter B. because according to Civil code of the Phillipines these are the effects if the debtor
withdraws after proper consignation, except the creditor shall lose every preference which he may have
over the thing. The co-debtors, guarantors and sureties shall be released

51. The following are the requisites in order that on obligation to give a determinate thing will be
extinguished, except:
a. The obligation is to deliver a determinate thing.
b. The obligation is to deliver an indeterminate thing.
c. The thing is lost without the fault of the debtor
d. The thing is lost before the debtor has incurred in delay.

Letter B. because according to article 1165 the requisites in order that on obligation to give a
determinate thing will be extinguished when: The obligation is to deliver a determinate thing. The thing
is lost without the fault of the debtor. The thing is lost without the fault of the debtor.

52. I. An obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific
property of the debtor.
II Where the obligation consists in the payment of money, the failure of the debtor to make the
payment even by reason of a fortuitous event shall not relieve him of his liability.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because If obligation is generic according to G.R. 147839 An obligation to pay money is
generic; therefore, it is not excused by fortuitous loss of any specific property of the debtor. Where the
obligation consists in the payment of money, the failure of the debtor to make the payment even by
reason of a fortuitous event shall not relieve him of his liability.

53. I. The general rule is that if the thing is lost while in the possession of the debtor, it shall be
presumed that the loss was due to his fault, unless there is proof to the contrary.
II. The general rule also applies in case of earthquake, flood, storm, or other natural calamity.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

54. When the service has become so difficult as to be manifestly beyond the contemplation of the
parties, the obligor may also be released therefrom, in whole or in part.
a. Doctrine of force majeure
b. Doctrine of fortuitous events
c. Doctrine of unforeseen events
d. Doctrine of foreseen events

Letter c. because according to article 1267 the Doctrine of unforeseen events Is when When the
service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor
may also be released therefrom, in whole or in part.

55. I. Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of wrong.
II. Bad faith means a breach of a known duty through some motive or interest or ill will that partakes of
the nature of fraud.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because in Civil code of the Philippines Bad faith imports a dishonest purpose or some
moral obliquity and conscious doing of wrong. Bad faith means a breach of a known duty through some
motive or interest or ill will that partakes of the nature of fraud.

56. I. Good faith is presumed.

II. The burden of proving good faith rests on the one alleging it.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter A because in Civil code of the Philippines, Good faith is presumed. The burden of proving
bad faith rests on the one alleging it.

57. An act of liberality, by virtue of which, without receiving any equivalent the creditor renounces the
enforcement of the obligation, which is extinguished in its entirety or in that part or aspect of the same
to which the remission refers.
a. Condonation
b. Confusion
c. Compensation
d. Novation

Letter A. because as explains in GR 140944. An act of liberality, by virtue of which, without

receiving any equivalent the creditor renounces the enforcement of the obligation, which is
extinguished in its entirety or in that part or aspect of the same to which the remission refers to
condonation
58. The following are requisites of condonation, except:
a. It must be gratuitous.
b. It must be accepted by the creditor.
c. The obligation must be demandable.
d. The parties must have capacity.

Letter B. Because According to Civil code of the Philippines these are the requisites of It must be
gratuitous: It must be gratuitous. The obligation must be demandable The parties must have capacity.
The condonation must not be in officious. The condonation must comply with the forms of donation, if it
signs express condonation

59. The following are requisites of condonation, except:

a. It must be onerous.
b. The parties must have capacity.
c. The condonation must not be in officious.
d. The condonation must comply with the forms of donation, if it signs express condonation

Letter A. Because According to Civil code of the Philippines these are the requisites of It must be
gratuitous: It must be gratuitous. The obligation must be demandable The parties must have capacity.
The condonation must not be in officious. The condonation must comply with the forms of donation, if it
signs express condonation

60. I. The donation and acceptance of a movable, the value of which exceeds P5,000,00, must be made
in writing, otherwise the same shall be voidable.
II. The delivery of a private document evidencing a credit, made voluntarily by the creditor to the
debtor, implies the renunciation of the action which the former had against the latter.
a. Only I is true
b. Only II is true
c. Both are true
d Both are false

Letter B. because according to article 748 and 749. Art. 748. The donation of a movable may be
made orally or in writing.An oral donation requires the simultaneous delivery of the thing or of the
document representing the right donated.If the value of the personal property donated exceeds five
thousand pesos, the donation and the acceptance shall be made in writing, otherwise, the donation
shall be void Art. 749. In order that the donation of an immovable may be valid, it must be made in a
public document, specifying therein the property donated and the value of the charges which the donee
must satisfy.The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.If the acceptance
is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step
shall be noted in both instruments
61. I. The rationale for allowing the presumption of renunciation in the delivery of a private instrument
is that, unlike that of a public instrument, there could be just one copy of the evidence of credit
II. The renunciation of the principal debt shall not extinguish the accessory obligations.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter A. because As Explained in G.R. 12653 The rationale for allowing the presumption of
renunciation in the delivery of a private instrument is that, unlike that of a public instrument, there
could be just one copy of the evidence of credit. The renunciation of the principal debt shall extinguish
the accessory obligations

62. Is the meeting in the same person of the qualities of creditor and debtor with respect to one and the
same obligation.
a. Condonation
b. Confusion
c. Compensation
d. Novation

Letter b. Because According In section 4 and 5 Confusion or Merger of Rights. The confusion or
merger of the rights is a mode of extinguishment of obligation wherein the characters/qualities of
creditor and debtor are merged in the same person. An obligation is extinguished if the debtor also
becomes the creditor since one cannot claim against himself. Is the meeting in the same person of the
qualities of creditor and debtor with respect to one and the same obligation.

63. I. The obligation is extinguished if the merger or confusion takes place in the person of the principal
debtor or creditor.
II. If the confusion takes place in the person of any of the guarantors, there is extinguishment of the
principal obligation.
a. Only I is true
b. Only I1 is true
c. Both are true
d. Both are false

Letter A. because as explain in section 5 Confusion The obligation is extinguished if the merger
or confusion takes place in the person of the principal debtor or creditor. If the confusion takes place in
the person of any of the guarantors, there is extinguishment of the principal obligation.

64. I. In a joint obligation, if the confusion takes place in one of the joint debtors, the principal obligation
is partially extinguished up to the share which corresponds to him.
II. In a solidary obligation, if the confusion takes place in one of the solidary debtors, the entire
obligation is extinguished.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because As explained in civil code of the Philippines In a joint obligation, if the
confusion takes place in one of the joint debtors, the principal obligation is partially extinguished up to
the share which corresponds to him. In a solidary obligation, if the confusion takes place in one of the
solidary debtors, the entire obligation is extinguished.

65. I. In compensation, there must be two persons, who, in their own right, ore creditors and debtors of
each other.
1I. In confusion, there is only one person in whom is merged the qualities of creditor and debtor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because As Explained in Table in line with comparison of confusion and compensation
in the Civil code, In compensation, there must be two persons, who, in their own right, ore creditors and
debtors of each other. In confusion, there is only one person in whom is merged the qualities of creditor
and debtor

66. 1. In compensation, there must be at least two obligation.

II. In confusion, there is only one obligation.
a. Only I is true
b Only II is true
c. Both are true
d. Both are false

Letter C. Because according to GR 164791 In compensation, there must be at least two

obligation. And In confusion, there is only one obligation.

67. The following are the requisites of legal compensation, except:

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.
 Letter A. because as explained in civil code The following are the requisites of legal
compensation 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. the two debts be due. That they be
liquidated and demandable.

68. The following are the requisites of conventional compensation:

I. That each of the parties can dispose of the credit he seeks to compensate.
II. That they agree to the mutual extinguishment of their credits.
a. Only I is true
b. Only II is true
c. Both are true
d. both are false

Letter C. According To GR 65974 the requisites of conventional compensation: That each of the
parties can dispose of the credit he seeks to compensate. That they agree to the mutual extinguishment
of their credits.

69. I. Legal compensation takes place ipso fure when all the requisites of law are present
II. Conventional compensation occurs when the parties agree to the mutual extinguishment of their
credits or to compensate their mutual obligations even in the absence of some of the legal requisites
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because According To GR 65974 Legal compensation takes place ipso fure when all the
requisites of law are present Conventional compensation occurs when the parties agree to the mutual
extinguishment of their credits or to compensate their mutual obligations even in the absence of some
of the legal requisites

70. Is a claim which has been formally passed upon by the highest authority
a. Debt
b. Payable
c. Liability
d. Claim

Letter A. Because According to GR. 120236 A distinction must be made between a debt and a
mere claim. A debt is an amount actually ascertained. It is a claim which has been formally passed upon
by the courts or quasi-judicial bodies to which it can in law be submitted and has been declared to be a
debt.

71. It is mere evidence of a debt and must pass thru the process prescribed by law before it develops
into what is properly called a debt.
a. Debt
b. Payable
c. Liability
d. Claim

Letter A. Because According to GR. 120236 A distinction must be made between a debt and a
mere claim. It is mere evidence of a debt and must pass thru the process prescribed by law before it
develops into what is properly called a debt

72. I. Compensation requires confluence in the parties of the characters of mutual debtors and creditors,
although their rights as such creditors or their obligations as such debtors need not spring from one and
the same contract or transaction.
Il The relationship of the depositors and the Bank or similar institution is that of creditor-debtor.
obligation of the depositor with the bank or similar institution.
a. Only I is true
b. Only Il is true
c. Both are true
d. Both are false

Letter c. Because According to GR. 65814 compensation requires confluence in the parties of the
characters of mutual debtors and creditors, although their rights as such creditors or their obligations as
such debtors need not spring from one and the same contract or transaction.The relationship of the
depositors and the Bank or similar institution is that of creditor-debtor. obligation of the depositor with
the bank or similar institution

73. I. Compensation can take place where one claim is still the subject of litigation.
II.A claim is liquidated when the amount and time of payment is fixed.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. Because According to GR. 65814 A compensation cannot claim is liquidated when the
amount and time of payment is fixed. And A claim is liquidated when the amount and time of payment
is fixed.

74. 1.A debt is an amount actually ascertained. It is a claim which has been formally passed upon by the
courts or quasi-judicial bodies to which can in law be submitted and has been declared to be a debt.
II. A claim, on the other hand, is a debt in embryo. It is mere evidence of a debt and must pass thru the
process prescribed by law before it develops into what is properly called a debt.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
 Letter C. Because According to GR. 175339 A debt is an amount actually ascertained. It is a claim
which has been formally passed upon by the courts or quasi-judicial bodies to which can in law be
submitted and has been declared to be a debt. A claim, on the other hand, is a debt in embryo. It is
mere evidence of a debt and must pass thru the process prescribed by law before it develops into what
is properly called a debt.
a. Only I is true

75. I. The guarantor may set up compensation as may owe the principal debtor.
II. Compensation may be total or partial. When the two debts are of the same amount, there is a partial
compensation.
regards what the creditor credits.
a. Only I is true
b.Only II is true
c. Both are true
d. Both are false

Letter A because according to article 1281. Compensation may be total or partial. When the two debts
are of the same amount, there is a total compensation.

76. Occurs when the parties agree to the mutual extinguishment of their credits or to compensate their
mutual obligations even in the absence of some of the legal requisites.
a. Conventional compensation
b. Involuntary compensation
c. Legal compensation
d. Illegal compensation

Letter A because according to G.R. No. 172020 conventional compensation are (1) that each of
the parties can fully dispose of the credit he seeks to compensate, and (2) that they agree to the
extinguishment of their mutual credits

77. The requisites of conventional compensation are:

I. That each of the parties can dispose of the credit he seeks to compensate.
II. That they agree to the mutual extinguishment of their credits.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C because according to G.R. No. 172020 conventional compensation are (1) that each of
the parties can fully dispose of the credit he seeks to compensate, and (2) that they agree to the
extinguishment of their mutual credits
78. If one of the parties to a suit over an obligation has a claim for damages against the other, the
former may set it off by proving his right to said damages and the amount thereof.
a. Extrajudicial compensation
b. Judicial compensation
C. Conventional compensation
d. Voluntary compensation

Letter B because according to G.R. No. 172020 If one of the parties to a suit over an obligation
has a claim for damages against the other, the former may set it off by proving his right to said damages
and the amount thereof.

79. The transfer of rights, especially contractual rights, from one party to another.
a. Contract of sale
b. Contract of barter
c. Assignment of rights
d. Cession in payment

Letter B because according to the Civil Code. The transfer of rights, especially contractual rights,
from one party to another is Contract of sale

80. The effects of assignment of rights are the following, except:

a. If the debtor consented to the assignment of rights made bycreditor in favor of a third person, he
cannot set up against theassignee the compensation which pertain to him against the Jouasse
b. If the debtor consented to the assignment of rights made by a creditor in favor of a third person and
he reserved his right to thecompensation, then he can set up against the assignee thecompensation
which pertain to him against the assignor.
c. If the assignment is made without the knowledge of the debtor he may set up the compensation of all
credits prior to the same and also later ones until he had knowledge of the assignment.
d. If the assignment is made without the knowledge of the debtor, he cannot set up the compensation
of all credits prior to the same and also later ones until he had knowledge of the assignment.

81. I. Compensation shall be proper when one of the debts arises from a depositum or from the
obligations of a depositary commodatum
II. Compensation cannot be set up against a creditor who has a claim for support due by gratuitous title.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B because according to article 1287 Compensation shall not be proper when one of the
debts arises from a depositum or from the obligations of a depositary or of a bailee in commodatum.
Neither can compensation be set up against a creditor who has a claim for support due by gratuitous
title, without prejudice to the provisions of paragraph 2 of Article 301. (1200a)
82. The following debts cannot be compensated, except:
a. Contract arising from contract of depositum.
b. Contract arising from contract of commodatum.
c. Contract arising from contract of support.
d. Contract arising from contract mutuum.

Letter B because according to Article 1288 Neither shall there be compensation if one of the
debts consists in civil liability arising from the penal clause (n)Compensation of debt arising from penal
offense is improper and inadvisable because the satisfaction of such obligation is imperative.The person
with civil liability (Offender) arising from crime is the only party who cannot set up the
compensation.The offended party who is entitled to indemnity can set up his claim in compensation of
his debt.

83. Is constituted from the moment a person receives a thing belonging to a another, with the obligation
of safely keeping itand of returning the same
a. Contract of deposit
b. Contract of guaranty
c. Contract of surety
d. Contract of loan

Letter a. because according to GR 165 Contract of deposit Is constituted from the moment a
person receives a thing belonging to a another, with the obligation of safely keeping itand of returning
the same

84.One of the parties delivers to another, either something not consumable so that the latter may use
the same for a certain time and return it.
a. Contract of deposit
b. Contract of guaranty
c. Contract of commodatum
d. Contract of loan

Letter C because according to Art. 1933. By the contract of loan, one of the parties
delivers to another, either something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a commodatum; or money or
other consumable thing, upon the condition that the same amount of the same kind and quality
shall be paid, in which case the contract is simply called a loan or mutuum Commodatum is
essentially gratuitous. Simple loan may be gratuitous or with a stipulation to pay interest. In
commodatum the bailor retains the ownership of the thing loaned, while in simple loan, ownership
passes to the borrower.

85. Comprises everything indispensable for sustenance, dwelling, clothing medical attendance,
education and transportation, in keeping with the financial capacity of the family.
a. Deposit
b. Support
c. Guaranty
d. Surety
 Letter B. because in family code of the Philippines . Support is Comprises everything
indispensable for sustenance, dwelling, clothing medical attendance, education and transportation, in
keeping with the financial capacity of the family.

86. I. Debts can be compensated if one of the debts consists in civil liability arising from a penal clause
II. If a person should have against him several debts which
aresusceptible of compensation, the rules on the application of payments shall apply to the order of the
compensation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B. because according to Article 1289 If a person should have against him several debts
which are susceptible of (sic) compensation, the rules on the application of payments shall apply to the
order of the compensation. (1201)

87. Obligations may be modified, except:

a. By changing their object or principal conditions.
b. By substituting the person of the debtor.
c. By subrogating a third person in the rights of the creditor
d. None of the above.

Letter B. because according to Article 1291 Obligations may be modified by: Changing their
object or principal conditions; Substituting the person of the debtor; Subrogating a third person in the
rights of the creditor.

88. Is the extinguishment of an obligation by the substitution or change of the obligation by a

subsequent one which extinguishes or modifies the first either by changing the object or principal
conditions, or by substituting another in place of the debtor, or by subrogating a third person in the
rights of the creditor.
a. Condonation
b. Novation
C. Merger of rights
d. Compensation

Letter B. because according to GR 120817. Novation Is the extinguishment of an obligation by

the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first
either by changing the object or principal conditions, or by substituting another in place of the debtor,
or by subrogating a third person in the rights of the creditor.
89. I. As a general rule, no form of words or writing is necessary to give effect to a novation.
II. Novation is presumed.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B. because according to GR 173565 Novation is never presumed, and the animus novandi,
whether totally or partially, must appear by express agreement of the parties, or by their acts that are
too clear and unmistakable. The extinguishment of the old obligation by the new one is a necessary
element of novation, which may be affected either expressly or impliedly. The contracting parties must
incontrovertibly disclose that their object in executing the new contract is to extinguish the old one.
Upon the other hand, no specific form is required for an implied novation, and all that is prescribed by
law would be an incompatibility between the two contracts.

90. In order that a novation can take place, the concurrence of the following requisites are
indispensable, except:
a. There must be a previous void obligation.
b. There must be an agreement of the parties concered to a new contract of novation
c. There must be the extinguishment of the old contract.
d. There must be the validity of the new contract.

Letter A . because according to GR 163244 Thus, in order that a novation can take place, the
concurrence of the following requisites are indispensable: 1) There must be a previous valid
obligation;2) There must be an agreement of the parties concerned to a new contract;3) There must be
the extinguishment of the old contract; and 4) There must be the validity of the new contract.

91. Is made either by changing the object or the principal conditions.

a. Personal novation
b. Subjective novation
c. Real novation
d. Mixed novation

Letter C . because according to GR 187822 Real novation by changing the object or principal
conditions, by substituting the person of the debtor, or by subrogating a third person in the rights of the
crditor

92.I. In its modern concept, what actually takes place in dacion en pago is objective novation of the
obligation
Il. Novation is never presumed, and the animus novandi, must appear by express agreement of the
parties, or by their acts that are too clear and unmistakable.
a. Only I is true
b. Only II is true
c Both are true
d. Both are false

Letter C . because according to GR 6152 In its modern concept, what actually takes place in
dacion en pago is objective novation of the obligation Novation is never presumed, and the animus
novandi, must appear by express agreement of the parties, or by their acts that are too clear and
unmistakable.

93. Novation by substituting the person of the debtor or subrogating a third person to the rights of the
creditor
a. objective novation
b. Subjective novation
C. Real novation
d. Mixed novation

Letter C . because according to GR 156162 Novation by substituting the person of the debtor or
subrogating a third person to the rights of the creditor is Subjective novation

94. Novation is made either by changing the objector the principal conditions
and by substituting the person of the debtor or subrogating a third
person to the rights of the creditor.
a. objective novation
b. Subjective novation
c. Real novation
d. Mixed novation

Letter C . because according to GR 156162 Novation is made either by changing the objector the
principal conditions and by substituting the person of the debtor or subrogating a third
person to the rights of the creditor is Mixed novation

95. 1. Novation must be established either by the express terms of the newagreement or by the acts of
the parties clearly demonstrating the intent to dissolve the old obligation as a consideration for the
emergence of new one.
II. The will to novate, whether totally agreement of the parties, or by their acts which are too clear
unequivocal to be mistaken.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false.

Letter C . because according to GR 984 Novation must be established either by the express
terms of the newagreement or by the acts of the parties clearly demonstrating the intent to dissolve the
old obligation as a consideration for the emergence of new one. The will to novate, whether totally
agreement of the parties, or by their acts which are too clear unequivocal to be mistaken.
96. When an old obligation is terminated by the creation of a new one that takes the place of the former
a. Total novation
b. Partial novation
c. Modificatory novation
d. None of the above

Letter C . because according to GR 156162 When an old obligation is terminated by the creation
of a new one that takes the place of the former is Total novation

97. When the old obligation subsists to the extent that it remains compatible with the amendatory
agreement
Total novation
b. Extinctive novation
c. Modificatory novation
d. None of the above

Letter C . because according to GR 156162 When the old obligation subsists to the extent that it
remains compatible with the amendatory agreement is Modificatory novation

98. The initiative for the change does not come from and may even be made without the knowledge of
the debtor, since it consists of a third person's assumption of the obligation.
a. Delegacion
b. Expromision
c. Subrogation
d. None of the above

Letter B. because as explained in civil code Expromision Without the knowledgeor consent of
debtor, the instance of the new debtor Payment by new debtor gives him right to beneficial
reimbursement Insolvency or non-fulfillment of obligation by new debtor

99. The debtor offers, and the creditor accepts, a third person who consents to the substitution and
assumes the obligation
a. Delegacion
b. Expromision
c. Subrogation
d. None of the above

Letter B. because as explained in civil code Subrogation - Nonfulfillment of obligation by new

debtor will not give rise to liability of old debtor
100. Means the new debtor.
a. Delegado
b. Delegante
C. Delegatario
d. None of the above

Letter A. because As explained in article 1293 Delegacion- Is when the debtor offers and the
creditor accept a third person to take place for the satisfaction of the original debtors obligation. In this
agreement they are called as a Delegante(debtor) ,Delegatario(creditor) and delegado(third person).

101. Means the original debtor

a. Delegado
b. Delegante
C. Delegatario
d. None of the above

Letter B. because As explained in article 1293 Delegacion- Is when the debtor offers and the
creditor accept a third person to take place for the satisfaction of the original debtors obligation. In this
agreement they are called as a Delegante(debtor) ,Delegatario(creditor) and delegado(third person).

102. Means the creditor

a. Delegado
b. Delegante
c. Delegatario
d. None of the above

Letter C. because As explained in article 1293 Delegacion- Is when the debtor offers and the
creditor accept a third person to take place for the satisfaction of the original debtors obligation. In this
agreement they are called as a Delegante(debtor) ,Delegatario(creditor) and delegado(third person).

103. In delegacion, the insolvency of the new debtor shall not revive the action of the creditor against
the original obligor, except:
I. When said insolvency was already existing when he delegated his debt.
II. When said insolvency was of public knowledge, or known to the debtor, when he delegated his debt
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C. because As explained in article 1293In delegacion, the insolvency of the new debtor
shall not revive the action of the creditor against the original obligor, except: When said insolvency was
already existing when he delegated his debt. When said insolvency was of public knowledge, or known
to the debtor, when he delegated his debt
104. I. When the principal obligation is extinguished in consequence of a novation, the accessory
obligations are not exting
II. If the new obligation is void, the original one shall subsist.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B because according to Article.1296 When the principal obligation is extinguished in

consequence of a novation, accessory obligations may subsist only insofar as they may benefit third
persons who did not give their consent and according Article 1297 stresses one of the essential
requirements of a novation, to wit: the new obligation must be valid. The general rule is that there is no
novation if the new obligation is void and, therefore, the original one shall subsist because the second
obligation being inexistent, it cannot extinguish or modify the first.

105. I. If the original obligation was subject to a suspensive or resolutory condition, the new obligation
shall be under the same condition.
II. Conventional subrogation must be clearly established in order that it may take effect
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter C because according to Article 1300 Subrogation of a third person in the rights of the
creditor is either legal or conventional. The former is not presumed, except in cases expressly
mentioned in this Code; the latter must be clearly established in order that it may take effect.

106. Is the transfer of all the rights of the creditor to a third person, substitutes him in all his rights
a. Substitution
b. Subrogation
c. Annulment
d. Ratification

Letter B because according Article 1300 Subrogation of a third person in the rights of the creditor is
either legal or conventional. The former is not presumed, except in cases expressly mentioned in this
Code; the latter must be clearly established in order that it may take effect.

107. I. Assignment of rights extinguishes an obligation and gives rise to a new one.
II. Subrogation refers to the same right which passes from one person to another.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
 Letter B because according to GP 6275 Assignment of rights extinguishes an obligation and gives
rise to a new one. Subrogation refers to the same right which passes from one person to another

108. I. Novation by substitution of creditor requires an agreement among the three parties concerned-
the original creditor, the debtor and the new
II. Conventional subrogation of a third person requires the consent of the creditor in original parties and
of the third person.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false

Letter B because according to Article 1301 Conventional subrogation of a third person requires
the consent of the original parties and of the third person

109. It is presumed that there is legal subrogation:

a. When a creditor pays another creditor who is preferred, even without the debtor's knowledge.
b. When a third person, not interested in the obligation, pays with the express or tacit approval of the
debtor.
c. When, even without the knowledge of the debtor, a person interested in the fulfillment of the
obligation pays, without prejudice to the effects of confusion as to the latter's share.
d. When, even without the knowledge of the debtor, a person not

Letter D because according Article 1302 It is presumed that there is legal subrogation(1) When a
creditor pays another creditor who is preferred, even without the debtor’s knowledge;(2) When a third
person, not interested in the obligation, pays with the express or tacit approval of the debtor;(3) When,
even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays,
without prejudice to the effects of confusion as to the latter’s share. (1210a)