Philippine Bar review · Question

Practice question: Compensation

Multiple Choice Hard

Practice question

Assignment occurs without the debtor’s knowledge. Reciprocal credits arise before assignment and afterward before the debtor learns of it. All other compensation conditions apply. Which 1285 rule matters?
  1. Only post-knowledge credits are automatically allowed.
  2. The stated unknown-assignment rule can include both earlier credits and later ones up to knowledge.
  3. Lack of knowledge is never relevant.
  4. The assignee may rewrite the debtor’s entire history.
  5. Every unknown assignment automatically voids every debt.

Legal references

  • Civil Code Articles748,1236-1237,1270-1299 and1302: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html

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