1.Upon the proposal of a third person, Fred, he substituted the original debtor, Eric, without the latter's consent. The creditor, Doug, accepted the substitution. Later, however, Fred became insolvent and defaulted in his obligation. What is the effect of this Fred's defaulting upon the Eric?

The Eric remains liable since he gave no consent to the substitution.

The Eric shall pay or perform 50% of the obligation to avoid unjust enrichment on his part.

The Eric is freed of liability since novation took place and this relieved him of his obligation.

The Eric shall pay or perform the obligation with recourse to the Fred.

2. Statement 1: Where one bears interest and the other does not, even if the latter is the older obligation, the former is considered more onerous.

Statement 1: With respect to indemnity for damages, the debt which is subject to the general rules on damages is more burdensome than that in which there is a penal clause.

Both statements are true.

Both statements are false.

Only Statement 1 is true.

Only Statement 2 is true.

3. Simon bought jewelries from Alaina and delivered a check in payment of the same. Has Simon paid the obligation? Why?

Yes, because a check is as good as cash.

Yes, because a check is a valid legal tender of payment.

No. The delivery of check shall produce the effect of payment only when they have been cashed.

It depends. If the check is a manager's check or cashier's check it will produce the effect of payment. If it's an ordinary check, no payment.

4. The kind of compensation which may only be raised by the creditor and not by the debtor in the obligation to give gratuitous support.

Judicial compensation

Conventional compensation

Facultative compensation

Legal compensation

5. Polly owed Ollie P1 million due on December 1, 2020 but failed to pay her on due date. Ollie sent a demand letter to Polly giving her 5 days from receipt within which to pay. Two days after receipt of the letter, Anne personally offered to pay Ollie in cash, but all in P500-peso bills, but the latter refused to accept the same. The 5 days lapsed. May Polly's obligation be considered extinguished?

No, since tender of payment, if refused, will not discharge the obligation without proper consignation in court.

Yes, since Bessy's refusal of the cash payment, amounts to a satisfaction of the obligation.

No, since payment of pure P500 bills is not considered legal tender in the Philippines.

Yes, since Anne tendered payment of the full amount due.

6. Statement 1: All monetary obligations shall be settled in Philippine currency. The parties may judicially agree that the obligation be settled in another currency at the time of payment.

Statement 2: A check under a peso account could be considered payment under the Philippine currency.

Both statements are true.

Both statements are false.

Only Statement 1 is true

Only Statement 2 is true.

7. Statement 1: In novation by way of expromission, there can be a revival of the original debtor's obligation should the new debtor turns out to be insolvent.

Statement 2: The extinctive novation would thus have the twin effects of first, extinguishing an existing obligation and second, subrogating a new one in its stead.

Both statements are true.

Both statements are false.

Only Statement 1 is true.

Only Statement 2 is true.

8. In which of the following circumstances is real novation present?

Expressly recognizes the first obligation

Adds other obligation not compatible with the old ones

Changes only the terms of payment

Merely supplements the first one

9. The following, except one, are the other modes of extinguishing obligations:

Mutual dissent

Remission

Arrival of resolutory conditions

Death

10. Solomon borrowed P500,000 from BBB Bank, secured by a mortgage on his land. Without his consent, his friend Ramon paid the whole loan. Since Solomon benefited from the payment, can Ramon compel the BBB Bank to subrogate him in its right as mortgagee of Solomon's land?

Yes, since a change of creditor took place by novation with the BBB Bank's consent.

Yes, since it is but right that Ramon be able to get back his money and, if not, to foreclose the mortgage in the manner of the bank.

No, since Ramon paid for Solomon's loan without his approval.

No, but the BBB Bank can foreclose and pay Ramon back.

11. Alex and Alexis are jointly indebted to Jeremiah for P500,000. Jeremiah assigned his interest to June, who later assigned his rights to Alex. What is the legal implication of this problem?

The debt is totally extinguished by merger

The debt is partially extinguished by merger

The debt is totally extinguished by compensation

The debt is partially extinguished by compensation

12. The kind of compensation which arises by way of proved counterclaim in a case is called:

Voluntary compensation

Facultative compensation

Legal compensation

Judicial compensation

13. Insolvency of the debtor is required in:

Payment by cession

Dation in payment

Application of payment

Tender of payment and consignation

14. Which of the following is not true about Dacion en Pago.

An act of tender of payment.

Payment extinguishes obligation to the extent of the value of the thing delivered as agreed upon, proved or implied from the conduct of the creditor.

Ownership is transferred to creditor upon delivery.

Thing delivered is considered as equivalent of performance.

15. The following are the characteristics of the payment in cession. What is the exception?

Abandonment of all debtor's properties except those exempt from execution

More than one debt

Complete or partial insolvency

One debtor and one creditor

16. Requisites of application of payment are the following except:

Debts are of different kinds

One debtor and one creditor

Debts are all due

Two or more debts

17. Meeting in one person the characteristics of both debtor and creditor in one and the same obligation extinguishes the obligation by way of -

Compensation

Remission

Novation

Confusion

18. In tender and consignation, if after consignation was made and the creditor allowed the debtor to withdraw the thing deposited in court, which of the following statements is incorrect?

Co-debtors, guarantors and sureties shall be released

The obligation remain to subsist

The obligation is extinguished

None of the above

19. Delivery by the debtor of a specific thing to the creditor in payment of an obligation consisting of money:

Assignment of cession of property

Tender of payment and consignation

Dation in payment

Application of payment

20. Consignation as a special form of payment, may extinguish an obligation under any of the following instances except:

When he is capacitated to receive the payment at the time it is due

When the title of the obligation has been lost

When, without just cause, he refuses to give a receipt

When two or more persons claim the same right to collect