MCQ: Law on Guaranty

May 3, 2015
  • MCQ



Thank you for taking this test. This is a quiz on the Law on Guaranty (Articles 2047 to 2081 of the Civil Code of the Philippines). There are 24 questions in all.

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A, B, C and D are co-guarantors of P1,000.00. A is released by the creditor without the consent of the other co-guarantors. Which of the following statements holds true?
Which of the following statements does not describe the differences of guaranty and suretyship:
CBank and D executed an overdraft agreement and pledge wherein CBank granted D an overdraft from time to time on his current account with CBank not to exceed P200,000.00. G executed an absolute guaranty in consideration of the overdraft agreement, pledged and bound himself jointly and severally liable to the bank. Later, D requested for extension from the bank, who in turn granted with the condition that the interest will increase and the amount of the overdraft will be reduced but the former failed to pay their indebtedness on the date due. What is the extent of the liability of G considering the renewal of the overdraft without his knowledge?
The following are duties of the creditor if he wants to hold the guarantor liable, except:
The guarantor is to obtain release from the guaranty, or to demand a security that shall protect him from any proceedings by the creditor and from the danger of insolvency of the debtor when:
The following statements are exceptions to the right to indemnity of the guarantor, except:
The following statements are exceptions to the general rule that the guarantor has the right to the benefit of excussion or exhaustion of the debtor’s property except:
Material alteration in the contract of guaranty is present in the following cases except:
When is the guarantor not entitled to the benefit of excussion?
The benefit of excussion shall not take place when?
BF and BB are friends. Unknown to BF, a contract of guaranty was entered into by BB in an obligation to CC where BF is the principal debtor. Which of the following statement is not correct?
RG is a guarantor of the P50,000.00 indebtedness of PG to ZX, which should be paid before August 16, 2010. RG made the payment without notifying PG. Thereafter, PG without knowing that the obligation was already fulfilled repeated the payment. What is the remedy of RG to recover the amount paid?
D obtained from C a 2013-2014 sugar crop loan in the amount of P40,200.00 secured by a chattel mortgage. As additional security, S issued a surety bond in favor of C. Three months later, C increased the loan from P40,200.00 to P56,800.00 without the knowledge and consent of S. D failed to liquidate the loan. What is the implication?
Which of the following statements is not an instance when the guarantor may proceed against the principal debtor even before his payment of the principal obligation?
C Bank delivered an amount of a credit line to D guaranteed by G to purchase asphalt, which was subsequently delivered to the DPWH. D assigned C Bank to collect the value of the asphalt from DPWH and in return, apply the said value to D’s credit line as payment.

The amount was regularly collected by C Bank, until for unknown reasons, the bank ceased to collect, until after 4 years, investigators found that more money was payable to D from DPWH, because the latter had allowed another creditor to collect funds for D. What is the implication when C Bank ceased to collect the money from DPWH?
Z furnished a bond in favor of X Company. X was then allowed to withdraw the cosigned goods to PNB. Thereafter, PNB obligated Z to pay the debt of X Company. Before paying the said amount, Z obtained a solidary note from X Company. XX, as president of X Company, signed a document wherein they bound themselves solidarily to pay, reimburse, and refund to Z all such sums or amounts of money as it, or its representative, may pay or become bound to pay, upon its obligation with Z. X Company was declared insolvent. Which of the following statements is correct?
This provides for the enforcement of the rights of the guarantor against the debtor after he (guarantor) has paid his (debtor’s) debt:
Mr. X entered into a contract with Mr. Y for the importation of cotton textile. To secure payment, Mr. X obtained a letter of credit from ABC Bank in Mr. Y’s favor. A trust receipt was issued and signed by Mr. Z where there was a solidary guaranty clause in said receipt. When the balance of Mr. X remained unpaid, Mr. Y went after Mr. Z, who in turn refused to pay stating that he is not a guarantor. Is Mr. Z correct?
The benefit of division among several guarantors under Article 2065 can be availed of if there are:
What happens if A, B, C, and D are co-guarantors of P1,000.00 and A is released by the creditor with the consent of the other co-guarantors?
What is the obligation of a surety upon posting a bond for the accused?
What is the effect of dacion en pago in a contract of guaranty/suretyship?
The following defenses are available to the guarantor, except:
The obligation of the guarantor is extinguished in the following except:

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