Republic of the Philippines

PALAWAN STATE UNIVERSITY

College of Business and Accountancy

MIDTERM EXAM

OBLIGATIONS AND CONTRACTS

I. Multiple Choice. Write the letter of your answer in your examination paper/ booklet. No
erasures.
1. Statement no. 1: The creditor may be compelled to accept payment in checks as long as the
check is negotiable.
Statement no. 2: An obligation payable “should the client die of diabetes” is an obligation
subject to a period.
a. Statement No. 1 is false while statement No.2 is true.
b. Statement No. 1 is true while statement No. 2 is true.
c. Both Statement are false
d. Both Statement are true
2. Statement no. 1: “I will give you 10,000.00 if you will not marry X this year”. If by the end of
the year, X entered the convent, my obligation is extinguished.
Statement no. 2: “I will give you 10,000.00 when my means permit me to do so”. This is a
conditional obligation for the benefit of the debtor.
a. Both are true
b. Both are false
c. No. 1 is true; no. 2 is false
d. No. 1 is false; no. 2 is true
3. Change of persons or objects:
a. Solutio indebiti
b. None of the above
c. Novation
d. Confusion
4. Which of the following is not a ground for the extinguishment of an obligation?
a. Remission
b. Merger
c. Compensation
d. Death of creditor
e. None of the above
5. Statement no. 1: D oblige to give a specific car to C on Dec. 20, 2006. If on the date stated D
did not comply with his obligation, the next day he is considered in default without the need of
demand.
Statement no. 2: S sold to B a specific car for 10,000.00. Both parties promise to comply with
their obligations the day after tomorrow. If on the date stated S delivers the car to B, but B is
not ready to comply with his obligation, from thereon he is considered in default without the
need of a demand.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true
6. Solidary debtors A, B and C owes joint creditors X, Y, Z and W 12,000.00. X, T and Z can
collect from A
a. 12,000
b. 6.000
c. 9,000
d. 3,000
 7. D obliged himself to paint the house of C or to paint the picture of C, in a standing position,
using 10 by 10 canvass. Later because of financial reverses, C sold his house to X. which of the
following statement is correct?
a. The obligation of D is extinguished because he cannot make a choice.
b. D may paint the picture of C
c. D may cancel the contract and ask for damages
d. None of the above
8. The buyer has the right to the fruit of the thing from:
a. The time the thing is delivered
b. The time the contract is perfected
c. The time the obligation to deliver the thing arises
d. The time the fruits are delivered
9. A owes B 2,000.00 demandable and due on September 10, 2006. B on the other hand, owes A
2,000.00 demandable and due on or before September 30, 2006. If B claims compensation on
September 10, 2006, can A rightfully oppose?
a. No. B who was giving the benefit of the term, may claim compensation because he
could then choose to pay his debt on September 10, 2006 which is actually “on or
before September 30, 2006.”
b. Yes, A can properly oppose because for compensation to take place, mutual consent of
both parties is necessary.
c. Yes, A c ab properly oppose and if B still refuses to accept his payment made on
September 30, 2006, A can deposit his payment in court.
d. None of the above.
10. A, B and C executed a promissory note worded as follows: “We promise to pay to X, Y and Z
the sum of 90,000.00 (Sgd.) A, B and C”.
a. A is obliged to pay to X, Y and Z 90,000.00
b. A is obliged to pay to X 30,000.00
c. A is obliged to pay to X 60,000.00
d. A is obliged to pay to X 10,000.00
11. A is obliged to give B his only car on September 1, 2006. On the said date, A did not deliver.
On September 2, 2006, an earthquake completely destroyed the car. Is A still liable?
a. No. Considering that no demand to deliver was made by B and the specific thing was
lost due to fortuitous event, the obligation is extinguished.
b. No. the obligation is extinguished, even if the debtor is already in default because the
debtor can plead impossibility of performance
c. Yes. A is already in legal delay thus the obligation to deliver the lost specific thing is
converted into monetary claim for damages.
d. Yes. The creditor can instead demand for a substitute of equivalent value from the
debtor.
12. A judicial relation known as negotiorum gestio takes place.
a. When a person voluntary takes charge of another’s abandoned business or property
without the owner’s consent.
b. When something is received and there is no right to demand it and it was delivered
through mistake
c. When a person is appointed by a court to take the property of business of another.
d. None of the above.
13. The buyer has the right to the fruit of the thing from:
a. The time the thing is delivered
b. The time the contract is perfected
c. The time the obligation to deliver the thing arises
d. The time the fruits are delivered
14. Meeting in one person of the characteristics of both the debtor and creditor in one and the
same obligation extinguishers the obligation by way of:
a. Novation
b. Compensation or set-off
c. Condonation or remission
d. Merger or confusion
15. Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once. This refers to:
a. Divisible and Indivisible obligation
b. Joint and Solidary obligations
c. Pure obligation
d. Obligations with a period

II. TRUE OR FALSE. Write True if the statement is correct and False if the statement is wrong.
16. An obligation is always civil in nature.
17. Solidarity in an obligation is preferred.
18. Contracts has the effect of law between the parties.
19. Loss of the determinate thing by virtue of fortuitous event extinguishes the obligation.
20. A suspensive condition may give rise to an obligation.
21. A conjunctive obligation is one where there are several prestations and all of them are due.
22. There is mora accipiendi if the debtor is in delay.
23. In case of loss, the determinate thing perishes with the owner, hence he shall bear the loss.
24. A pure or simple obligation is that kind of obligation that requires no condition and is therefore
demandable at once.
25. When there is breach in the fulfillment of the obligation, the party aggrieved may go to Court
and seek damages.

III. ENUMERATION. Provide what is being asked.

26-30 Sources of obligation;
31-33 Distinction between suspensive and resolutory condition;
34-39 Modes of extinguishment of obligation
40.

IV. ESSAY. Answer the question and support your answer with legal basis.
41 – 45 . Sara G sold and promised to deliver to Mateo her Tamagochi with serial number 8888,
likewise, he made the same dealings with Raver. The tamagochi was stolen by Lupin. What is the
liability of Sara G?

46 – 50 . A owes B 2,000.00 demandable and due on September 10, 2006. B on the other hand,
owes A 2,000.00 demandable and due on or before September 30, 2006. If B claims compensation
on September 10, 2006, can A rightfully oppose?
51- 55 A sold his cow to B for 2,500.00. No date was stipulated for the delivery of the cow. While still
in the possession of A, the cow gave birth to a calf.
56-60. X, Y and Z solidary bound themselves to pay to solidary creditors A, B and C the amount of
75,000.00. The loan was secured by a mortgage on B’s land. Out of gratuity, A, in a public
instrument, renounced the obligation in favor of X, with the formality required by law. What will
happen to the entire obligation?

61- 65. Mario agreed to bake Susan’s wedding cake to be delivered on August 23, 2017 – the date of
the wedding. On the said date, Mario failed to deliver the cake. Susan filed a case against Mario to
recover damages due to his delay. Mario, on his part, countered that he cannot be put in delay as
there no demand made by Susan to deliver the cake. Decide if you were the judge.
66- 70. Pakilamero discovered that Lakwatsera left her farm full of poultry animals unattended. For
several weeks, Pakilamero obliged himself to take good care of the Farm, he was able to harvest and
sell eggs and other poultry products from Lakwatsera’s farm. He even spent some of his own money
to improve the fence of the poultry. Six months later, Lakwatsera came home and surprised to
discover that her farm had develop into something better, Pakilamero told Lakwatsera what he did
and sought for reimbursement of his expenses. Is Lakwatsera obliged to reimburse the expenses of
Pakilamero?

End of exam.

To God be the glory!

Prepared by: ATTY. ODESSA BUENA C. ARZAGA