1. D borrowed P50,000.00 from C. On due date, D did not have any money to pay the debt so he proposed to C that the latter accept a ring to settle the debt. C at first did not accept the proposal but due to insistent act of D, he reluctanty received the ring. Immediately after receiving the ring, C sold it to B. Is D's obligation to give P50,000.00 to C extinguished? Explain.

2. D is obliged to deliver a specific Toyota car to C. The parties agreed that should D so desire, he may deliver his only Lancer car to C as a substitute. Before D could make any substitution, the Lancer car was damaged beyond repair through the fault of D.

(a) Is D still obliged to deliver the Toyota car to C on due date?

(b) Will you maintain the same answer if the specific Toyota car was lost due to no fault of D? Explain.