MODES OF EXTINGUISHMENT OF OBLIGATION

When two persons in their own right are debtors and creditors of each other, there is:

• CONFUSION

• COMPENSATION

• CONSIGNATION

• novation

A owes X P50,000 payable on or before June 30, 1999. S, who is not a party to the contract and without the consent and against the will of A, paid X the P50,000 on April 1, 1999 when the prevailing rate of interest was 12% per annum.

• S can ask reimbursement from A in the amount of P50,000 plus 12% interest from April 1 to June 30, 1999.

• S can ask reimbursement from A in the amount of P50,000.

• S cannot ask reimbursement from A because the payment by S is without the consent and against the will of A.

• S can ask refund from X because the payment by S was against the will of A.

When an obligation is extinguished because of the passage of time, this is:

• fulfillment of a resolutory condition

• arrival of a resolutory period

• novation

• rescission

The following shall produce the effect of payment of debts:

• delivery of check

• tender of central bank notes

• delivery of promissory note

• dacion en pago

Which of the following will NOT necessarily extinguish an obligation?

• condonation

• novation

• death of the obligor

• mutual dissent

If a person pays the creditor without the knowledge or against the will of the debtor, the following are true, EXCEPT:

• He can recover only insofar as the payment has been beneficial to the debtor.

• He cannot recover the amount from the creditor as payment of what is not due.

• His remedy is only a simple personal action for reimbursement.

• He can be subrogated to the rights of the creditor if the latter agrees.

Payment made to a third person will NOT be valid if:

• The payment redounded to the benefit of the creditor.

• The payment was made to a person in possession of evidence of credit.

• The payment was given to the original creditor after an assignment of the credit without notice to the debtor.

• The payment was made to an agent of the creditor who was authorized to receive payment.

Which of the following will always extinguish an obligation?

• tender of payment

• insolvency of the debtor

• death of the obligor

• none of the above

X owes Y P40,000. With the consent of both parties, Z pays Y P20,000 which makes Y and Z creditors of X to the amount of P20,000 each. X becomes bankrupt and has only P20,000 assets left.

• Z should get the P20,000.

• Y and Z should divide the P20,000 equally.

• X may choose whom to pay.

• Y should get the P20,000.

In three of the following cases, compensation shall NOT be proper. Which is the exception?

• COMMODATUM

• GRATUITOUS SUPPORT

• CIVIL LIABILITY ARISING FROM CRIMINAL OFFENSES

• BANK DEPOSITS