Law Questions

OBLIGATION AND CONTRACTS 1. The following are the requisites of an obligation, except a. Passive and active subject c. Efficient cause b. Prestation d. Demand 2. The source of obligations which is a rule of conduct, just and obligatory, promulgated by legitimate authorities for common good, benefit and observance a. Contracts c. Delicts b. Quasi-contracts d. Law 3. The efficient cause or juridical tie why the obligation exists a. Active subject c. Prestation b. Passive subject d. Vinculum 4. When something is received when there is no right to demand it, and it was unduly delivered thru mistake, the recipients has the duty to return it a. Quasi-contract c. Negotiorum gestio b. Quasi-delict d. Solutio indebiti 5. There is delivery when the keys of a warehouse are given a. Traditio simbolica c. Traditio brevi-manu b. Tradition longa-mano d. Traditio constitutom possessorium 6. Products of the soil through cultivation or intervention of human labor a. Natural c. civil b. Industrial d. penal 7. Damages awarded for mental and physical anguish a. Moral c. Nominal b. Exemplary d. Temperate 8. A is obliged to deliver his only car to B on November 20, 2008. If A does not deliver, and on November 22, 2008, a typhoon destroys the car a. A is not liable because the obligation is extinguished b. A is liable because he is in delay c. A and B will divide the loss equally d. A’s obligation is converted into a monetary obligation 9. A pays for B’s transportation fare, without B’s knowledge and later discovers that B was entitled to half-fare. Which is not correct? a. A can recover the half-fare from B b. A can recover the half-fare from the carrier c. A can recover ½ from B and ½ from the carrier d. A can recover the half-fare from B only 10. Which is not considered as a quasi-contract? a. Solution indebiti b. Negotiorum gestio c. When the third person with the knowledge of the debtor, pays the debt d. Reimbursement due the person who saved property during fire or typhoon without the knowledge of the owner. 11. The obligation remains valid up to a time certain but terminates upon the arrival of the said period a. With a period c. Ex die

b. Conditional

d. In diem

12. In a joint obligation, joint means any of the following, except a. Pro-rata c. mancomunada simple b. Proportionate d. individually and collectively 13. A and B are joint debtors of C and D, joint creditors, to the amount of P1,000. C can demand a. P1,000 from A or P1,000 from B b. P500 from A or P500 from B c. P500 from A and P500 from B d. P250 from A and P250 from B 14. A, B, and C are solidary debtors of D in the amount of P3,000 but A was incapacitated to give his consent as he was a minor. If D sues B, how much will B liable for? a. P3,000 b. P2,000 c. P1,000 d. P0 15. Using the preceding number, if D sues A, how much will A liable for? a. P3,000 c. P1,000 b. P2,000 d. P0 16. I. Obligations with a resolutory period take, effect at once, but terminate upon arrival of the day certain. II. Obligations with resolutory condition take effect at once, but terminate upon happening of the condition. a. True, true b. True, false

c. False, true d. False, false

17. The act of offering the creditor what is due him together with a demand that the creditor accept the same a. Application payment c. Datio in solutum b. Tender of payment d. Session 18. Novation which changes the object and parties of the obligation a. Real c. Mixed b. Personal d. Partial 19. The transfer to a third person of all the rights appertaining to the creditor a. Delegacion c. Subrogation b. Expromission d. Novation 20. A owes B P10,000 due on Jan.7 and guaranteed by C. B owes A P8,000 due on January 7. On the due date, A is insolvent. How much is C’s liability? a. P10,000 c. P2,000 b. P8,000 d. Zero 21. I’ll give you my car one year after X dies, The obligation is a. Valid, because death is sure to come b. Valid, but the condition will be disregarded c. Void, the time when death will occur is not certain d. Void, killing a person is contrary to law.

CONTRACTS 22. A delivered his bracelet to B for B’s necklace. No written agreement was signed by the parties. Which of the following is appropriate description of the contract between A and B? a. Onerous and bilateral b. Onerous and innominate c. Bilateral and innominate d. Aleatory and nominate 23. A contract where the cause with respect to each contracting party is the prestation of the promise of a thing or service by other is a. An onerous contract b. A gratuitous contract c. An innominate contract d. An eleatory contract 24. The following statements pertain to the cause of a contract. Which statement refers to motive? a. It is the essential reason of a contract b. It is always known to the contracting parties c. Its illegality does not affect the validity of the contract d. There will be no contract without it 25. When there is concurrence of offer and acceptance, there is a. Payment c. Consent b. Consignation d. Tender of payment 26. An absolutely simulated or fictitious contract is a. Void c. Rescissible b. Voidable d. Unenforceable 27. A contract where both contracting parties are incapable of giving consent is a. Void c. Unenforceable b. Rescissible d. Voidable 28. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the parties to a contract, the proper remedy is a. Ratify the contract b. Ask fro specific performance c. Annulment of the contract d. Reformation of the contract 29. Not requisite fro the validity of a contract a. Consent c. cause b. Object d. Delivery 30.

The contract must bind both contracting parties a. Consensuality of contract b. Simplicity of contract c. Mutuality of contract d. Relativity of contract

31. A stipulation in favor of a third person a. Stipulation pour autrui b. Stipulation pour over

c. Assignment of credit d. Pactum commissoruim 32. A contract to make a deposit, to make a pledge or to make a commodatum is a. Consensual c. Solemn contracts b. Real contracts d. Formal contracts 33. A contract where consent is given through mistake, violence, intimidation, undue influence or fraud is a. Rescissible c. Unenfoerceable b. Voidable d. Void 34. A contract with a cause distinct from the selling price is a. Lesion c. Dation b. Cession d. Option 35. A is indebted to B with C as guarantor B assigns the credit to D, who in turn assigns the credit to C. Which is correct? a. The obligation of A is extinguished b. The assignment to C did not affect the obligations of C as guarantor c. The assignment by B to D extinguished the guaranty d. C becomes the new creditor of A 36. Solidarity on the part of the obliges a. Active solidarity b. Passive solidarity

c. Mixed solidarity d. Casual solidarity

37. This will cure the defect of an unenforceable contract a. Acknowledgement c. Ratification b. Confirmation d. Referendum 38. Characteristics of void contracts, except a. Defense of illegality cannot be waived b. Cannot be ratified c. Action for declaration of inexistence does not prescribe d. The inexistence can be assailed by the third person 39. If one debt is P12,000 and other is P6,000 and the debtor without making any application of payments gives P3,000. How should said payment be applied, presuming that both debts are of the same nature and burden? a. The payment will be applied to the P12,000 debt b. The payment will be applied to the P6,000 debt c. The payment will be applied equally d. The payment will be applied proportionately CONTRACTS 1. The principle that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, moral, public policy and public order; refer to the principle of. a. Liberty of contract c. Consensuality of contract b. Relatively of contract d. Mutuality of contract 2. A offered to sell her watch to B for P1,000. B offered to buy the watch for P800 but it was rejected by A. when B turned to go away. A called him and said she is now willing to sell the watch for P800. may B refuse to buy said watch?

a. No, because B’s offer of P800 was accepted by A. b. No, there is a meeting of the minds between the parties or the subject matter and the cause of the contract. c. Yes, because B made a counter offer which was rejected by A. d. Yes, because the agreement is under the statute of frauds. 3. A insured his residential house for P5,000,000 on January 1, 2009. On June 30, 2009 B burned the insured property. Which is not correct? a. A can proceed against the insurer and collect the P5,000,000 policy b. The insurer shall be subrogated to the rights of A after payment to A. c. After payment the insurer shall have the right to proceed against B. d. A should proceed against B, the guilty party and not the insurer. 4. A sold to B his cow for P5,000. No date is fixed by the parties for the performance of their respective obligations. The obligation of A is a. To deliver the cow immediately as there is a perfected contract b. To deliver the cow within the reasonable time from the perfection of the contract. c. To deliver the cow upon the payment of B of P5,000 d. To rescind the contract as there is no time fixed for the delivery and payment. 5. Contract which has no effect at all a. Rescissible b. Voidable c. Unenforceable

d. Void

6. A contract where the fulfillment is dependent upon the chance, so the values may vary because of the risk or chance. a. Commutative b. Aleatory c. Remunerative d. Gratuitous 7. A lost in gambling and as payment executed a promissory note in favor of winner, B. later, B assigned the note to C. may C successfully recover from A? a. Yes, if C is not aware that it is in payment of a gambling debt b. No, because B cannot recover, so also cannot the assignee c. Yes, because B can recover, so also the assignee can. d. No, because promissory notes can only be negotiated but assigned. 8.

A shipped his cargo in B’s vessel. B and C entered into a contract for C to unload the cargo from the ship’s hold. In the lifting operations, A’s cargo was damaged, which is correct? a. A may go against C and sue C for damages b. A may go against either B or C and sue for damages c. A may go against both B & C and sue for damages d. A may go against B and sue for damages.

9. Pledge, deposit and commodatum are a. Consensual b. Real Contracts c. Solemn contracts

d. Formal contracts

10. When one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants to give his consent, there is a. Violence b. Mistake c. Intimidation d. Undue influence 11. Sometimes referred to as conditional precedent a. Casual condition c. Suspensive condition b. b. Potestative condition d. resolutory condition 12. If a third person pay for the debtor with the consent of the debtor, he a. Can recover only in so far as the payment has been beneficial to the debtor

b. Can recover the amount he has paid but he shall not acquire the rights of the creditor c. Can recover the amount he has paid or the payment that has benefited the debtor whichever is lower. d. Can recover the amount he has paid and he shall acquire the rights of the creditor such as those arising from a mortgage, guaranty or penalty 13. A obtained from B a loan for P1,500 with interest at 10% per annum, the payment of which loan was secured by a guaranty secured by C. after the maturity of the loan, D a friend of A, went to B and paid the latter, without the knowledge of A, P1,400 for said loan and thereupon B signed and delivered to D a receipt of this tenor “Received from D P1,400 in full payment of A’s obligation in my favor. Sgd. B”. Which is correct? a. D may recover from A the amount of obligation, that is P1,500, because A was benefited up to P1,500 b. D may recover from A P1,500 plus interest c. D may recover from A P1,400 plus interest d. D may recover from A P1,400 without interest. 14. The process of intentionally deceiving others by appearance of a contract that really does not exist a. Absolute simulation b. Relative simulation c. Fraud d. Misrepresentation Law 1 1.The following are the requisites of an obligation, except A. B. C. D.

Passive and active subject Prestation Efficient cause Demand

2.The right of the creditor that is enforceable against a definite debtor is A. B. C. D.

Real right Natural right Moral right Personal right

3. Which of the following is a civil obligation? A. B. C. D.

X obliges himself to pay Y P10,000 on October 30, 2009. A is a debtor of B for P20,000 due on September 30, 1995. The obligation of a husband and wife to observe fidelity. The obligation of a catholic to hear mass every Sunday.

4. Specific performance may not be possible in this civil obligation A. B. C.

A, a painter, obliges himself to paint the portrait of B on April 9, 2009 C, a farmer, obliges himself to give his only cow to D on February 14, 2009 E, a veterinarian, obliges himself to give one of his dogs to F on May 1, 2009

5. The source of obligations which is a rule of conduct, just and obligatory, promulgated by legitimate authorities for common good, benefit and observance A. B.

Contracts Quasi-contracts

C. D.

Delicts Law

6. A juridical necessity to give, to do or not to do A. B. C. D.

Civil obligation Natural obligation Moral obligation Social obligation

7. They give a right of action to compel their performance A. B. C. D.

Civil obligation Moral obligation Natural obligation Social obligation

8. The obligee has a right to enforce the obligation against the obligor in a court of law A. B. C. D.

Civil obligation Moral obligation Natural obligation Social obligation

9. This is based on equity and justice A. B. C. D.

Civil obligation Moral obligation Natural obligation Social obligation

10. The person in whose favor the obligation is constituted A. B. C. D.

Obligor Obligee Passive subject Debtor

11. Synonymous to obligee 1. Creditor A. B.

2. Active subject

1 and 2 1 and 4

3. Debtor C. D.

4. Passive subject

2 and 3 3 and 4

12. The person who has the duty of giving, doing or not doing. A. B.

Obligee Obligor

C. D.

Active subject Creditor

13. Synonymous to obligor 1. Creditor A. B.

1 and 2 1 and 4

2. Active subject

3. Debtor C. D.

4. Passive subject 2 and 3 3 and 4

14. The object or subject matter of the obligation A. B.

Prestation Vinculum

C. D.

Active Subject Passive subject

15. The efficient cause or juridical tie why the obligation exists A. B. C. D.

Active subject Passive subject Prestation Vinculum

16. The duty not to recover what has voluntarily been paid although payment was no longer required A. B.

Civil obligation Natural obligation

C.

Moral obligation D. Juridical obligation

17. The following are sources of obligations derived from law, except A. B.

contracts quasi-contracts

C. D.

delicts quasi-delicts

18. Cannot be enforced by court action and depend exclusively upon the good conscience of the debtor. A. B.

civil obligation natural obligation

C.

moral obligation D. social obligation

19. A owes B P1,000. A, knowing that the debt has prescribed, nevertheless, still pays B. Can A recover what he voluntarily paid? First answer Yes, because B has no right to demand the payment effected by A. Second Answer No, the payment extinguished the natural obligation. A. B. C. D.

Both answers are correct. Both answers are wrong. Only the first is correct. Only the second is correct.

20. The duty to pay taxes and support one’s family are obligations arising from A. B. C. D.

Law Contracts Quasi-contracts Delicts

21. The obligation of husband and wife to render mutual help and support arises from A. B. C. D.

Contract Law Quasi-contract Quasi-delict

22. A supports B, a minor, because B’s father refuses to support B. The father is obliged to reimburse A. The source of obligation is A. B.

contracts quasi-contracts

C. D.

delicts quasi-delicts

23. A juridical relation resulting from a lawful, voluntary, and unilateral act and which has for its purpose the payment of indemnity to the end that no one shall be unjustly enriched or benefited at the expense of another. A. B. C. D.

Contract Quasi-contract Delicts Quasi-delicts

24. When a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority where reimbursement must be made for necessary and useful expenses. A. B. C. D.

Quasi-contract quasi-delict Negotiorum gestio Solutio indebiti

25. When something is received when there is no right to demand it, and it was unduly delivered thru mistake, the recipient has the duty to return it. A. B. C. D.

Quasi-contract Quasi-delict Negotiorum gestio Solutio indebiti

26. - A quasi-contract is an implied contract. - A defendant who is acquitted in a criminal case is no longer liable civilly. A. B. C. D.

True; true True; false False; true False; false

27. Tort or culpa aquiliana is A. B. C. D.

Quasi-contract Quasi-delict Negotiorum gestio Solutio indebiti

28. A fault or act or omission of care which causes damage to another, there being no preexisting contractual relations between the parties. A. B. C. D.

Quasi-contract Quasi-delict Negotiorum gestio Solutio indebiti

29. Omission of the diligence which is required by the circumstances of person, place and time. A. B. C. D.

Ignorance Negligence Impotence Insanity

30. Unless the law or the stipulation of the parties require another standard of care, every person obliged to give something is also obliged to take care of it with the proper diligence. A. B. C. D.

Observing utmost care. Observing extraordinary diligence Of a father of a good family Observing ordinary diligence

31. Ordinary diligence is A. B. C. D.

Diligence of a good father of a family. Extraordinary diligence Diligence required by law Diligence of a father of a good family.

32. The creditor has the right to the fruits of the thing. A. B. C. D.

From the time the obligation to deliver it arises. From the time the fruits have been delivered. From the time there is meeting of the minds. From the perfection of the contract.

33. From the time the fruits have been delivered, the creditor shall acquire A. B. C. D.

Real right Personal right Moral right Inchoate right

34. If A sells to B a fountain pen, the giving by A to B of the fountain pen is A. B. C. D.

Actual tradition Constructive delivery Symbolical tradition Traditio longa-manu

Items 35-39 A kind of constructive delivery whereby: 35. There is delivery when the keys of a warehouse are given. A. B. C. D.

Traditio simbolica Traditio longa-manu Traditio brevi-manu Traditio constitotum possessorium

36. There is delivery by mere consent or pointing out of an object.

A. B. C. D.

Traditio simbolica Traditio longa-manu Traditio brevi-manu Traditio constitotum possessorium

37. A possessor of a thing not as an owner, becomes the possessor as owner. A. B. C. D.

Traditio simbolica Traditio longa-manu Traditio brevi-manu Traditio constitotum possessorium

38. A possessor of a thing as an owner retains possession no longer as an owner, but in some other capacity A. B. C. D.

Traditio simbolica Traditio longa-manu Traditio brevi-manu Traditio constitutom possessorium

39. The opposite of brevi-manu A. B. C. D.

Longa-manu Simbolica Constitutom possessorium Quasi-tradition

40. If a thing is capable of particular designation. A. B. C. D.

Generic Specific Indeterminate Indeterminable

41. If a thing refers to a class, to a genus and cannot be pointed out with particularity. A. B. C. D.

Generic Specific Determinate Indeterminable

42. A wife was about to deliver a child. Her parents brought her to the hospital. Who should pay the expenses for medical attendance? Answer 1 – The husband, because it is his duty to support his wife and support includes medical attendance. Answer 2 – The parents, because they were the persons who brought the “wife” to the hospital. A. B. C. D.

Both answers are correct. Both answers are not correct. Only the first is correct. Only the second is correct.

43. The following are kinds of fruits of an obligation, except

A. B. C. D.

natural industrial civil penal

44. Spontaneous products of the soil and the offspring and other products of animals A. B. C. D. 45. A. B. C. D.

natural industrial civil penal Products of the soil through cultivation or intervention of human labor. natural industrial civil penal

46. Fruits arising out of contracts- like rental payments. A. B. C. D. 47.

natural industrial civil penal When does the obligation to deliver arise?

Answer 1 – If there is no term or condition, then from the perfection of the contract. Answer 2 – If there is a term or condition, then from the moment the term arrives or the condition happens. A. B. C. D.

True; true True; false False; true False; false

48. A is obliged to give B 10 kilos of sugar, which of the following is not correct? A. B. C. D.

B can demand that A obtain the sugar and deliver it to him. B can just buy 10 kilos of sugar and charge the expense to A. A can insist on just paying B damages or the monetary value of the sugar. B may require another person to deliver the sugar and charge the expenses to A.

49. Where demand by the creditor shall be necessary in order that delay may exist. A. B. C. D.

When time is of the essence of the contract. When demand would be useless. When the obligor has expressly acknowledged that he is in default. When the obligor requested for an extension of time.

50. Debtor’s default in real obligation. A. B.

Mora accipiendi Mora solvendi ex-re

C. D.

Mora solvendi ex-persona Compensatio morae

51. Debtor’s default in personal obligation. A. B. C. D.

Mora accipiendi Mora solvendi ex-re Mora solvendi ex-persona Compensatio morae

52. Default on the part of the creditor A. B. C. D.

Mora accipiendi Mora solvendi ex-re Mora solvendi ex-persona Compensatio morae

53. Default on the part of both parties. A. B. C. D.

Mora accipiendi Mora solvendi ex-re Mora solvendi ex-persona Compensatio morae

54. A borrowed money from B payable on December 10, 2008. If A failed to pay on due date, will A be in delay? A. B. C. D.

Yes, because there is stipulation as regards the due date. Yes, if the obligation is in writing. No, because demand has not been made by B. No, if A has the money to pay B.

55. Damages awarded for mental and physical anguish. A. B. C. D.

Moral Exemplary Nominal Temperate

56. Damages awarded to vindicate a right. A. B. C. D.

Liquidated Actual Nominal Exemplary

57. Damages awarded to set an example. A. B. C. D.

Exemplary Liquidated Nominal Moral

58. When the exact amount of damages cannot be ascertained.

A. B. C. D.

Exemplary Liquidated Temperate Moral

59. Damages determined beforehand. A. B. C. D.

Temperate Liquidated Actual Moral

60. A obliged himself to deliver to B the following: 1) 2008 Sing-It Yamaha Organ 2) Magalona passenger jeepney with engine No. 69 and chasis No. 88 First Statementcompel A

In case A failed to deliver the 2008 Yamaha Organ, the court may

to deliver the 2008 Yamaha Organ plus damages Second Statement - In case A failed to deliver the jeepney, the court may compel A to deliver the jeepney plus damages. A. B. C. D.

True; true True; false False; true False; false

61. I – If a person obliged to do something fails to do it, the same shall be executed at his cost. II - Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor threof, are liable for damages. A. B. C. D.

True; true True; false False; true False; false

62. I - Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for fraud is void. II – If the law or contract does not state the diligence which is to observed in the performance of an obligation, that which is expected of a father of a good family shall be required. A. B. C. D.

True; true True; false False; true False; false

63. I – The receipt of a later installment of a debt without reservation as to prior installments, shall give rise to a rebuttable presumption that such installments have been paid.

II – If a taxpayer pays his income tax liability for the current year, there is a presumption that tax liability for the previous year has been paid. A. B. C. D.

True; true True; false False; true False; false

64. With regard to the right as to the fruits of the thing, which is not correct? A. from B. C. D.

If the obligation is subject to a suspensive condition, the obligation to deliver arises the moment the condition happens. If the obligation is subject to a suspensive condition, the obligation to deliver arises upon the expiration of the term or period. If there is no condition or term for its fulfillment, the obligation to deliver arises from the perfection of the contract or creation of the obligation. If the obligation arises from the contract of sale, the vendor has a right to the fruits of the thing from the time the obligation to deliver arises.

65. A is obliged to deliver his only car to B on November 20, 2009. If A does not deliver, and on November 22, 2009, a typhoon destroys the car. A. B. C. D.

A is not liable because the obligation is extinguished. A is liable because he is in delay. A and B will divide the loss equally. A’s obligation is converted into a monetary obligation.

66. I – When what is to be delivered is a determinate thing, the creditor may compel the debtor to make the delivery and if the debtor refuses, the creditor may ask that the obligation be complied with at the expense of the debtor. II – The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. A. B. C. D.

True; true True; false False; true False; false

67. What is the basis of the liability of a school when a student is stabbed inside the campus by a stranger in the school? A. B.

Contracts Quasi-contracts

C. D.

Delicts Quasi-delicts

68. The following except one, are included in civil liability. The exception is A. B.

Restitution Reparation

C. D.

Indemnification Starvation

69. The thing itself shall be restored, as a rule A. B.

Restitution Reparation

C. D.

Indemnification Starvation

70. The court determines the amount of damage taking into consideration the price of the thing and its sentimental value to the injured person. A. B.

Restitution Reparation

C. D.

Indemnification Starvation

71. The consequential damages suffered by the injured person and those suffered by his family or third person by reason of the act. A. B.

Restitution Reparation

C. D.

Indemnification Starvation

72. Action to impugn or rescind acts or contracts done by the debtor to defraud the creditors. A. B. C. D.

Accion reinvindicatoria Accion pauliana Accion subrogatoria Accion quanti-minoris

73. A borrower agreed, that in case of non-payment of his debt, to render services as a servant. Which of the following is not correct? A. B. C. D.

If the services will be rendered in satisfaction of the debt, the stipulation is valid. If the services will be “for free”, the stipulation is void for being contrary to law and morals. If the services will not be gratuitous, specific performance of the service will be the proper remedy in case of non-compliance. Should there be a valid stipulation as regards the rendition of services, an action for damages should be brought in case of non-compliance.

74. A ordered B, a 10 year old boy to climb a high and slippery mango tree with a promise to give him part of the fruits. B was seriously injured when he fell while climbing the tree. Is A liable? First Answer

- No, because no person shall be responsible for fortuitous events.

Second Answer – Yes, because A is negligent in making the order without taking due care to avoid a reasonable foreseeable injury to B. A. B. C. D.

True; true True; false False; true False; false

75. A pays for B’s transportation fare, without B’s knowledge and later discovers that B was

entitled to half-fare. Which is not correct? A. B. C. D.

A can recover the half-fare from B. A can recover the half-fare from the carrier. A can recover the ½ from B and ½ from the carrier. A can recover half-fare from B only.

76. A borrowed P100,000 from B. the loan was secured by a mortgage of A’s land in favor of B. Without the knowledge of A, C paid B the sum of P100,000 for A’s debt. As a result A. B. C. D. 77. be

C may foreclose the mortgage on A’s land if A cannot pay. C cannot claim reimbursement from A in as much as the payment was made without the knowledge of B. C can recover the amount from B in case A refuses to reimburse C. The obligation of A to B was extinguished but A should reimburse C the amount of P100,000 because he was benefited by the payment. When the debtor of a debtor is ordered not to pay the latter so that preference would given to the latter’s creditor.

A. B. C. D.

Garnishment Interpleader Injunction Attachment

78. A obtained a loan from B bank. The loan was embodied in several promissory notes. As security the borrower executed a chattel mortgage on his standing crops. Said crops were however subsequently destroyed by typhoon “Rosing”. Is A still liable for the loan despite the destruction of the crops by a fortuitous event? 1st Answer - Yes, the obligation of A was to deliver a generic thing – money. 2nd Answer – No, the obligation was to deliver determinate things – the standing crops. A. B. C. D.

True; true True; false False; true False; false

79. A sold a half-interest in his specific car to B. It was agreed that the price to be paid by B would be used in installing a new engine on the car. Later, the car was destroyed by a fortuitous event. Is B’s obligation to pay the price extinguished? 1st Answer - Yes, there is no more use of installing a new engine since the car has already been destroyed by a fortuitous event. 2nd Answer – No, B must still pay because his obligation to pay in generic. A. B. C. D.

True; true True; false False; true False; false

80. I – A commits the crime of theft and is asked to return the car to its owner B. If, before the car is delivered to B it is destroyed by a fortuitous event, Is A’s liability extinguished? II – Using above statement, A had previously asked the owner to accept the car, but the owner without any justifiable reason refuses to accept the car, and it is destroyed by a fortuitous event, Is A’s liability extinguished? A. B. C. D.

Yes; Yes No; Yes Yes; No No; No

81. I - There is no delay in an obligation not to do something. II – Solutio indebiti and negotiorum gestio are implied contracts. A. B. C. D.

True; true True; false False; true False; false

82. I - Consent of the parties is required in quasi-contract. II – The creditor acquires real rights over the thing from the time the obligation to deliver arises. A. B.

True; true True; false

C. D.

False; true False; false

83. The creditor has a right to the fruits of the thing from the time A. B. C. D.

The thing is delivered. The fruits are delivered. The obligation to deliver the thing arises. The sale is perfected.

84. The buyer has a right to the fruits of the thing from the time A. B. C. D.

The thing is delivered. The fruits are delivered. The obligation to deliver the thing arises. The sale is perfected.

85. Which is not considered as quasi-contract? A. B. C. D. the

Solutio indebiti Negotiorum gestio When the third person with the knowledge of the debtor, pays the debt. Reimbursement due the person who saved property during fire or typhoon without knowledge of the owner.

86. No longer enforceable by court action but is binding on the party who oblige with it in conscience is

A. B.

Civil obligation Natural obligation

C.

Moral obligation D. Conditional obligation

87. If A pays a debt that has prescribed 1. Not knowing it has prescribed, A can recover on the ground of undue payment. 2. Knowing it has prescribed, A cannot recover for this would be a case of natural obligation. A. B.

Both 1 and 2 are true Only 1 is true

C.

Only 2 is true D. Both 1 and 2 are false

88. On June 24, 2009 A is obliged to give B his specific car. There was no delivery until June 30 when the garage of the car collapsed due to heavy rain and strong winds of Typhoon Ondoy, and the car was totally destroyed. Is A still liable? A. No, even if A was in default, he could plead impossibility of performance.] B. Yes, because the contract is perfected. C. No, because there was no demand by B to deliver the car. D. Yes, the obligation to deliver the car is changed to pay the equivalent value because B is in legal delay. 89. This obligation is demandable at once when it A. B.

has a resolutory condition. has a suspensive condition

C. D.

is with a term ex-die. has a period.

90. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be with a A. B.

Resolutory period Suspensive condition

C. D.

Potestative condition Period.

91. A promise to give B his Volvo car if B passes the CPA Board Exams. Pending the results of the exams, the car is destroyed by a fortuitous event without any fault on the part of A, As a result A. B. C. D.

The obligation of A is extinguished. The obligation of A is converted into monetary obligation. The obligation of A will equitably reduced. A will have to give B another car of equivalent value.

92. A period with a suspensive effect. A. B. C. D.

I will support you beginning January 1 of next year. I will support you until January 1 of next year. I will support you if A dies of TB. I will support you if A marries B.

93. A period with a resolutory effect.

A. B. C. D.

I will support you beginning January 1 of next year. I will support you until A dies. I will support you if A dies. I will support you if A dies of TB.

94. The obligation begins only from a day certain or upon the arrival of said period. A. B.

Ex die In diem

D.

C. Conditional With a period

95. The obligation remains valid up to a time certain but terminates upon the arrival of said period. A. B.

With a period Conditional

C. D.

Ex die In diem

96. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable. A. B. C. D.

May be recovered without interests. May be recovered with interests. May be recovered with fruits and interests. May not be recovered.

97. Whenever in an obligation a period is designated, it is presumed to have been established for the benefit A. B.

Of both the creditor and debtor Of the creditor only

C.

Of the debtor only D. Of third persons

98. This is a valid obligation. A. B. C. D.

A will give B P100,000 if B will kill C. A will give B P1,000,000 if B will agree to be the mistress of A. A will give B P100,000 if B can make C rise from the dead. A will give B P1,000 if B will not pose nude in a painting session.

99. Where two or more prestations have been agreed upon but only one is due, the obligation is A. B.

Alternative Facultative

C. D.

Conjoint Solidary

100. Using the preceding number, the right of choice, belongs A. B. C. D.

To the debtor To the creditor To both the creditor and debtor To third person

101. A is obliged to give B, at A’s option either object No. 1, Object No. 2, or Object No. 3. If all objects were lost thru A’s fault, which is correct? A. B. C. D.

The value of the first thing lost plus damages must be given to B. The value of the last thing lost plus damages must be given to B. The value of any of the things lost plus damages must be given to B. The obligation is extinguished.

102.I - Using the preceding number, if objects nos. 1 1and 2 were destroyed by a fortuitous event and later object No. 3 is destroyed by A’s fault, A would still be liable. II - Using the preceding number, if objects nos. 1 1and 2 were destroyed by A’s fault and later object No. 3 is destroyed by fortuitous event, A would still be liable. A. B.

True; true True; false

C. D.

False; true False; false

103. A is obliged to give B either objects No. 1 or No. 2 or No. 3 at B’s option. Before B communicated his choice to A. object No. 1 had been destroyed, thru A’s fault and object No. 2 had been destroyed by a fortuitous event. B may A. B. A’s C. D.

Demand object No. 3 only as it is still available. Demand the price of object No. 1 only plus damages because it was destroyed by fault. Demand the value of object No 2 as the right of choice belongs to B. Demand either object No. 3 or the price of object No. 1 plus damages.

104. Any of the debtors is bound to render compliance of the entire obligation. A. B.

alternative facultative

C. D.

joint solidary

105. In a joint obligation, joint means any of the following, except A. B.

pro-rata proportionate

C. D.

mancomunada simple individually and collectively

106. In Facultative obligations, if substitution has been made, which of the following is false? A. B. C. D.

The obligation is extinguished. The loss of the original prestation is immaterial. The obligation is converted into a simple obligation. The obligation ceases to be facultative.

107. Using the preceding number, and the substitute is lost by a fortuitous event, which is true? A. B.

The obligation is extinguished. The debtor is liable for damages.

C. D.

The original prestation must be given. The debtor must give another object which is equally satisfactory.

108. Using the preceding number, but the substitute is lost due to debtor’s fault, which is true? A. B. C. D.

The obligation is extinguished. The debtor is liable for damages. The original prestation must be given. The debtor must give another object which is equally satisfactory.

109. Instances where the law imposes solidary liability, except A. B. C. D.

obligations arising from tort. obligations of bailees in commodatum. liability of principals, accomplices and accessories of a felony. liability of partners arising out of a contract.

110. This will result to a solidary liability A. B. C. D.

vitiated consent on the part of one of the debtors. insolvency of one of the debtors. default on the part of one of the debtors. quasi-delict commited by one of the partners acting in the ordinary course of business.

111. Where only one prestation has been agreed upon, but the obligor may render another in substitution, the obligation is A. B.

Alternative Facultative

C. D.

Conjoint Solidary

112. Where two or more prestations have been agreed upon, and all of them must be performed, the obligation is A. B.

Alternative Facultative

C. D.

Conjoint Solidary

113. A and B are solidary debtors of C and D, solidary creditors, to the amount of P1,000. C can demand A. B.

P1,000 from A or P1,000 from B P1,000 from A and P1,000 from B

C. D.

P500 from A or P500 from B P500 from A and P500 from B

114. A and B solidary debtors of C and D, joint creditors, to the amount of P1,000 – C can demand A. B.

P1,000 from A or P1,000 from B P500 from A or P500 from B D.

C. P500 from A and P500 from B P250 from A and P250 from B

115. A and B joint debtors of C and D, solidary creditors, to the amount of P1,000 – C can demand

A. B.

P1,000 from A or P1,000 from B P500 from A or P500 from

C. D.

P500 from A and P500 from B P250 from A and P250 from B

116. A and B are joint debtors of C and D, joint creditors, to the amount of P1,000 – C can demand A. B.

P500 from A or P500 from B P250 from A or P250 from B

C. D.

P250 from A and P250 from B P500 from A and P500 from B

C. D.

Individually and collectively Mancomunada simple

117. This is synonymous to joint obligation A. B.

Joint and several In solidum

118. This is synonymous to solidary obligation A. B.

Pro-rata Mancomunada

C.

Proportionate D. Juntos o separadamente

119. A, B and C are joint debtors of D for P3,000.If A is insolvent, how much should B pay D? A. B.

P1,000 P1,500

C. D.

P2,000 P3,000

120. In 2007, A, B and C bound themselves in solidum to give D P9,000 subject to the following conditions: A will pay in 2007, B, if D passes the 2008 CPA board exams and C will pay in 2009. In 207, how much can D demand from C? A. B.

P9,000 P6,000

C. D.

P3,000 P0

121. A, B and C are solidary debtors of D for P3,000. D remitted C’s share. A therefore paid later only P2,000. A can recover reimbursement from B in the amount of A. B.

P1,000 P1,500

C. D.

P500 P0

122. Using the preceding number, if B is insolvent, A can recover from C the amount of A. B.

P1,000 P1,500

C. D.

P500 P0

123. A, B and C are solidary debtors of D for P1,000. D remitted the entire obligation when A offered to pay. A can demand reimbursement from B in the amount of A. B.

P1,000 P500

C. D.

P333 P0

124. A, B and C are solidary debtors of D for P3,000 but A was incapacitated to give his consent as he was a minor. If D sues B, how much will B be liable for? A. B.

P3,000 P2,000

C. D.

P1,000 P 0

125. Using the preceding number, if D sues A, how much will A be liable for? A. B.

P3,000 P2,000

C. D.

P1,000 P 0

126. A is indebted to solidary creditors B, C, and D, for P90,000. Without the knowledge of B and C, D remitted the obligation of A, as a result, A. B. C. D.

The obligation of A to pay P90,000 is extinguished. The obligation is not extinguished because there is no consent from B and C. The obligation is extinguished only up to P30,000. The obligation is extinguished up to P60,000.

127. A, B and C borrowed P6,000 from D and E, payable in 3 months with A giving in pledge her diamond ring as security for the amount borrowed. How much can E collect from C? A. B.

P1,000 P2,000

C. D.

P3,000 P6,000

128. A is obliged to give B her college ring. If she fails to do so, she must give P10,000. This is A. B. C. D.

Alternative obligation Conjoint obligation Facultative obligation Obligation with a penal clause

129. Where the penalty takes the place of indemnity for the damages and for the payment of interest. A. Where there is stipulation to the effect that damages or interest may still be recovered, despite the presence of the penalty clause. B. When the debtor refuses to pay the penalty imposed in the obligation. C. When the debtor is guilty of fraud or dolo in the fulfillment of the obligation. D. Where there is breach of the obligations. 130. This is an obligation with a resolutory obligation. A. B. C. D.

I’ll give you P10,000 if you pass the 2009 CPA board examination. I’ll give you my car now, but should you fail in any of your subjects, your ownership will cease and it will be mine again. I’ll give you P10,000 on December 31, 2009. I’ll give you P10,000 if A dies of TB.

131. I - If the condition is potestative on the part of the debtor, the obligation is void. II - If the condition is potestative on the part of the creditor, the obligation is valid. A. B.

True; true True; false

C. D.

False; true False; false

132. A owns a house rented by B. A sold the house to C where C agreed to pay the balance of the purchase price as soon as B leaves the premises. It was further agreed that C will take care of seeing to it that B vacates the house. Which is correct? A. B. C. D.

The contract is void because it is potestative on the part of C. The contract is void because the consent of B was not obtained. The contract is valid because the condition is mixed. The contract is valid if B is willing to vacate the premises.

133. I – The condition that some event happens at a determinate time shall extinguish the obligation as soon as the time expires or it has become indubitable that the event will not take place. II – The condition that some event will not happen at a determinable time shall render the obligation effective from the moment the time indicated has elapsed, or it has become evident that the event cannot occur. A. B.

True; true True; false

C. D.

False; true False; false

134. I - A father promised to give his son if the son will marry B this year. If by the end of the year, B is already dead or the son has not married B, the obligation to give a car is effective and demandable. II - A father promised to give his daughter a car if the daughter will not marry her boyfriend earlier than December 31,2009. If by December 31, 2009, has not yet married her boyfriend, or if prior thereto, her boyfriend has died, the obligation is extinguished. A. B.

True; true True; false

C. D.

False; true False; false

135. I - Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain. II - Obligations with a resolutory condition take effect at once, but terminate upon happening of the condition. A. B.

True; true True; false

C. D.

False; true False; false

136. A borrowed money from B and pledged her ring as security. It was agreed that A was to pay the money loaned with interest at the end of one year. Before the expiration of the oneyear period. A. A may compel B to accept her payment. B. A may be allowed to pay B, if B consents. C. A may compel B to accept her payment because the period is deemed for the benefit of

D.

A. B may refuse A’s payment as the period is deemed for the benefit of B.

137. The debtor shall lose every right to make use of the period, except A.

When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt. B. When he does not furnish the creditor the guarantees or securities which he has promised. C. When through fortuitous events or by his own acts the guaranties or securities have been impaired, unless he immediately gives new ones equally satisfactory. D. When the debtor violates any undertaking in consideration of which the creditor agreed to the period. 138. I - “We promise to pay” when there are two or more signatures=joint liability II – “ I promise to pay” when there are two or more signatures= solidary liability A. B.

True; true True; false

C. D.

False; true False; false

139. A oblige himself to pay B P100,000 in 30 days plus a penalty of P10,000 if A fails to pay the obligation in due time. A failed to pay the obligation in 30 days, B can demand from A A. B. C. D.

The principal of P100,000 plus P10,000 penalty. The principal of P100,000 plus P10,000 penalty plus legal interest. The principal of P100,000 plus P10,000 penalty, plus legal interest, plus damages. The principal of P100,000 plus legal interest, plus damages.

140. The creditor is entitled to recover damages and interest in addition to the penalty stipulated 1. When the debtor refuses to pay the penalty. 2. When the debtor is guilty of fraud in the fulfillment of the obligation. A. B.

True; true True; false

C. D.

False; true False; false

141. Action where a person in possession of certain property may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims among themselves. A. B.

Garnishment Interpleader

C. D.

Injunction Attachment

142. A judicial process by virtue of which a person is generally ordered to refrain from doing something A. B.

Garnishment Interpleader

C. D.

Injunction Attachment

143. Where a property is alienated to the creditor in satisfaction of a debt in money.

A. B.

Dation in payment Payment by cession

C. D.

Application of payment Consignation

144.Where a debtor transfers all his properties not subject to execution in favor of his creditors so that the latter may sell them and thus apply the proceeds to their credits. A. B.

Dation in payment Cession

C. D.

Application of payment Consignation

145. The act of offering the creditor what is due him together with a demand that the creditor accept the same. A. B.

Application of payment Tender of payment

C. D.

Datio in solutum Cession

146. The act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment. A. B.

Tender of payment Consignation

C. D.

Application of payment Datio in solutum

147. The meeting in one person of the qualities of creditor and debtor with respect to the same obligation. A. B.

Confusion Compensation

C.

Novation D. Condonation

148. When two persons on their own right are creditors and debtors of each other A. B.

Confusion Compensation

C. D.

Novation Condonation

149. This is not necessary in order that compensation may prosper. A. B. C. D.

That the two debts are both due. That the two debts be liquidated and demandable. That there be retention or controversy commenced by third persons and communicated in due time to the debtor. Both debts consists in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated.

150. Compensation cannot take place, except A. B. C. D.

When one debt arises from the obligations of a depositary. When one debt arises from the obligations of a bailee in commodatum. When one debt arises because of a claim for support due to gratuitous title. When one debt arises from a bank deposit.

151. The substitution or change of an obligation by another, which extinguishes or modifies the first A.

Confusion

C.

Novation

B.

Compensation

D.

Consignation

152. Novation which changes the object or the principal condition of the obligation A. B.

Real Personal

C. D.

Mixed Partial

153. Novation which changes the parties to the obligation A. B.

Real Personal

C. D.

Mixed Partial

154. Expromission, delegacion or subrogating a third person in the right of the creditor. A. B.

Real Personal

C. D.

Mixed Partial

155. Novation which changes the object and parties of the obligation. A. B.

Real Personal

C. D.

Mixed Partial

156. Substitution of debtor where the initiative comes from a third person. A. B.

Delegacion Expromission

C. D.

Subrogation Novation

157. Substitution of debtor where the initiative comes from the debtor. A. B.

Delegacion Expromission

C. D.

Subrogation Novation

158. The transfer to a third person of all the rights appertaining to the creditor. A. B.

Delegacion Expromission

C. D.

Subrogation Novation

159. Legal subrogation is presumed in the following. Which is not correct? A. B. C. D.

When a third person, not interested in the obligation, pays with the approval of the creditor. When a creditor pays another creditor who is preferred, even without the debtor’s knowledge. When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor. When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter’s share.

160. I - Proof of actual damages suffered by the creditor is not necessary in order that the penalty previously agreed upon may be demanded. II – Proof of actual damages suffered by the creditor is not necessary in an obligation with a penal clause.

A. B.

True; true True; false

C. D.

False; true False; false

161. CONTRACTS 1.A delivered his bracelet to B for B’s necklace. No written agreement was signed by the parties. Which of the following is appropriate description of the contract between A and B? A. B.

Onerous and bilateral Bilateral and innominate

C.

Bilateral and innominate D. Aleatory and nominate

2.They are the elements that are found in certain contracts and are presumed to exist unless set aside by the parties A. Accidental elements C. Artificial elements B. Natural elements D. Incidental elements 3.They refer to the elements that may be stipulated by the contracting parties A. B.

Accidental elements Natural elements

C. D.

Artificial elements Incidental elements

4.The following are some accidental elements of a contract of sale, except A. B.

Terms of payment Interest rate

C. D.

Place of payment Accession and accessories

5. A contract where the cause with respect to each contracting party is the prestation or the promise of a thing or service by the other is A. B.

An onerous contract A gratuitous contract

C. D.

An innominate contract An aleatory contract

6. A contract where one party receives no valuable consideration and the cause is the liberality of the benefactor is A. B.

A gratuitous contract A unilateral contract

C. D.

An onerous contract A commutative contract

7. A delivered his van to B for the latter’s use for one week without any compensation. The cause of the contract is A. B.

The van of A The generosity of A

C. D.

The period of one week The delivery of the van

8. The principle that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, moral, public policy and public order, refer to the principle of A.

Liberty of contract

C.

Consensuality of contract

B.

Relativity of contract

D.

Mutuality of contract

9. The following instances will render an offer ineffective before acceptance is conveyed. Which one will not? When one of the parties A. B.

Is civilly interdicted Becomes insolvent

C. D.

Becomes insane Is placed under a hypnotic spell

10. The following statements pertain to the cause of a contract. Which statement refer to motive? A. B. C. D.

It is the essential reason of a contract. It is always known to the contracting parties It is illegality does not affect the validity of the contract there will be no contract without it

11. The bargaining point, that is, when negotiation is in progress (stage in the life of a contract) A. B.

Consummation Conception

C. D.

Perfection Birth

12. The meeting of minds regarding the object and cause of the contract (stage in the life of a contract) A. B.

Conception Preparation

C. D.

Death Birth

13. The point where the parties have performed their respective obligations and the contract is Terminated A. B.

Preparation Conception

C. D.

Perfection Consummation

14. When there is concurrence of offer and acceptance, there is A. B.

Payment Consignation

C. D.

Consent Tender of payment

15.

24. An absolutely simulated or fictitious contract is A. B.

Void Voidable

C. D.

Rescissible Unenforceable

25. A sold to B his cow for P5,000. No date is fixed by the parties for the performance of their respective obligations. The obligation of A is A. B.

To deliver the cow immediately as there is a perfected contract. To deliver the cow within the reasonable time from the perfection of the contract

C. D.

To deliver the cow upon the payment by B of P5,000 To rescind the contract as there is no time fixed for the delivery and payment.

27. A owes B P10,000 due on March 10, 2010. A owes B P8,000 due on March 11, 2010. A obliged himself to deliver to B a cow valued at P6,000 on March 12, 2010. On March 13, 2010, a paid B P10,000. If A makes an application of payment, A. B. C. D. debt

The P10,000 should be applied to the first debt only The P10,000 should be applied to the second debt only The P10,000 may be applied either to the first debt or second debt The P10,000 may be applied to the first debt, or to the second debt or to the third

28. A contract where both contracting parties are incapable of giving consent is A. B.

Void Rescissible

C. D.

Unenforceable Voidable

29. The conception of a contract is when A. B. C. D.

When there is meeting of the minds When negotiations are in progress When the contract is executed When the parties come to an agreement

30. Contract which has no effect at all A. B.

Rescissible Voidable

C. D.

Unenforceable Void

C. D.

Unenforceable Void

31. Contract which can not be ratified A. B.

Rescissible Voidable

32. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the parties to a contract, the proper remedy is A. B.

Ratify the contract Ask for a specific performance

C. D.

Annulment of the contract Reformation of the contract

33. A sold his land to B. The sale was made orally. B paid the agree price. B wanted to have the sale registered but he needs a public instrument. Which is correct? A.

B may sue A for the return of his money as no one shall be unjustly enriched at the expense of another. B. B cannot demand the return of the purchase price because the sale is unenforceable. C. B may compel A to execute the public instrument because the sale is valid. D. B may only occupy and use the land as buyer in good faith 35. A is the guardian of B, a minor. B sold A’s land in writing to C valued at P1M for P.7M. The sale is (stage in the life of a contract)

A. B.

Rescissible Voidable

C. D.

Unenforceable Void

37. Although validly agreed upon, courts can nullify this contract because of damage to one of the parties or to a third person and its enforcement, may cause injustice by reason of some external facts A. B.

Rescissible contracts Voidable contracts

C. D.

Unenforceable contracts Void contracts

38. A contract where the fulfillment is dependent upon the chance, so the values may vary because of the risk or chance. A. B.

Commutative Aleatory

C. D.

Remunerative Gratuitous

39. A clause providing that the mortgagee will automatically own the property mortgaged if the debt is not paid at maturity is A. B.

Dacion en pago Payment by cession

C. D.

Pactum Commissorium Upset price

43. The contact must bind both contracting parties A. B.

Consensuality of contract Simplicity of contract

C. D.

Mutuality of contract Relativity of contract

C. D.

Mutuality of contract Relativity of contract

44. Not a characteristic of contract A. B.

Consensuality of contract Simplicity of contract

45. Contracts are generally effective only between the parties, their assigns and their heirs A. B.

Consensuality of contract Simplicity of contract

C. D.

Mutuality of contract Relativity of contract

46. A stipulation in favor of a third person A. B.

Stipulation pour autrui Stipulation pour over

C.

Assignment of credit D. Pactum commissorium

48. Not a requisite of stipulation pour autrui A. third B. C.

The contracting parties must have clearly and deliberately conferred a favor upon person The stipulation must be part of the contract The third person communicated his acceptance to the obligor before its revocation

D.

There must be an agency between either of the parties and the third person

49. The following contracts are not perfected until the delivery of the object of the obligations, except A. B.

Pledge Deposit

C. D.

Commodatum Sale

C. D.

Solemn contracts Formal contracts

50. Pledge, deposit and commodatum are A B.

Consensual contracts Real contracts

52. Acceptance of an offer made by letter or telegram shall bind the offeror. From the time the A. B. C. D.

Offeree accepted the offer Offeree sent his letter or telegram Acceptance came to the knowledge of the offeror Offeror made the offer

53. A contract where consent is given through mistake, violence, intimidation, undue influence or fraud is A. B.

Rescissible Voidable

C. D.

Unenforceable Void

70. The mortgagor will execute an instrument to transfer the ownership over the property mortgaged to the mortgagee if the debt is not paid at maturity is A. B.

Void Voidable

C. D.

Valid Unenforceable

75. A, B and C are jointly liable to D in the amount of P9,000. D assigns the entire credit to A. In this case A. B. C. D.

The obligation is extinguished because of confusion B and C will not be liable to A a becomes the new creditor and may demand from B and C P4,500 each A’s share in the obligation is extinguished because of confusion.

90. One is not a requisite needed in order that obligation shall be extinguished by loss or destruction of the thing due: A. B. C. D.

When the thing is lost without the fault of the debtor When the thing lost is generic When the thing is lost before the debtor has incurred in delay. When the thing lost is specific

92. The obligation is demandable on the date of the obligation and shall continue to be in force up to the arrival of the day certain: A. B.

Resolutory period Suspensive period

C. D.

Indefinite period Legal period

96. Characteristic of void contracts, except A. B. C. D.

Defense of illegality cannot be waived Cannot be ratified Action for declaration of inexistense does not prescribe The inexistence can be assailed by third person

99. Unless ratified, suits will not prosper if the contract is A. B.

Rescissible Voidable

C. D.

Unenforceable Void

PARTNERSHIP AND CORPORATION 1. Ralph and Vi orally agreed to form a partnership. Each contributed cash and personal worth P10,000 to a common fund. But they did not register the partnership with the Securities & Exchange Commission (SEC). a. The partnership is still valid; b. The partnership is void; c. The partnership is voidable; d. The partnership is unenforceable; 2. A partnership which comprises all that the partners may acquire by their work or industry during the existence of the partnership is: a. Universal partnership of present property b. Universal partnership of profits c. Particular partnership d. General partnership 3. A stock which has been issued by a corporation as fully paid up when in fact it is not, because it has been issued as bonus or otherwise, without any consideration, at all, or for less than part or for property, labor, or service at an overvaluation. a. Promotion stock b. Treasury stock c. Watered stock d. Bonus stock 4. Contracts between a corporation and third persons must be made by or under the authority of its. a. Board of Directors b. Stockholders c. President and Chief Operating Officer d. General manager 5. If the obligor binds himself to perform his obligation as soon as “he shall have obtained a loan” from a certain bank, this obligation is: a. With a term b. Conditional

c. Suspensive d. Resolutory 6. Contract entered into in a state of drunkenness or during a hypnotic spell are: a. Void c. Voidable b. Valid d. Legal 7. It is one of the essential elements of an obligation: a. A maker or drawer c. A drawee b. An object or prestation d. money 8. Reluctantly and against her good sense and judgment, Rosemarie entered into a contract for the delivery of 5 tables to Corazon for a price of P15,000.00. Contract is: a. Void c. Unenforceable b. Voidable d. Valid 9. Rescission of contract can take place in this case: a. When the things which are the object of the contract are legally in the possession of third persons who acted in bad faith b. When he who demands rescission can return whatever he may be obliged to restore c. When the party seeking rescission can perform only as to part and rescind to remainder d. When the seller cannot return the installment paid to him by buyer 10. When the characters of the creditor and the debtor are merged in one and the same person, there is extinguishment of the obligation by: a. Compensation c. Novation b. Merger of Rights d. Rescission 11. X, Y and Z solidarily owe A, B, C and D joint creditors P30,000.00. How much can A collect from X? a. P2,500.00 only b. P20,000.00 A in turn has to give P5,000.00 to B, C, and D. c. P10,000.00 A in turn has to give P2,500.00 to each to B, C, and D. d. P5,000.00 only 12. Z, Y and Z are partners and contributed to the Partnership P40,000.00, P30,000 and services, respectively. The partnership was later liquidated and after payment of the Partnership indebtedness only P20,000.00 worth of assets remained. How much is the share of Z? a. Zero c. Equal to the share of Y b. Equal to the share of X d. P6,000.00 13. Type of partnership in which the partners enjoy practically all the profits a. General Partnership c. Limited Partnership b. Universal Partnership d. De Facto Partnership 14. Which of the following is not a special form of payment? a. Cession c. Consignation b. Application for payment d. Dacion in payment 15. Which of the following is an essential element of partnership? a. There must be a contribution of money, property or industry to a common fund b. All of them

c. It must be an association for profit with the intention to divide the profits among themselves d. There must be a valid and voluntary agreement 16. A corporate doctrine which holds the stockholders are not personally liable for corporate debts a. Separate legal entity b. Piercing the veil of corporate fiction c. Right of Succession d. Trust Fund doctrine LAW ON PARTNERSHIPS 1. One of the following is not a characteristic of contract of partnership a. Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected b. Principal, because it can stand by itself c. Preparatory, because it is a means by which other contracts will be entered into d. Onerous, because the parties contribute money, property or industry to the common fund 2. A partnership formed for the exercise of a profession which is duly registered is an example of a. Universal partnership of profits b. Universal partnership of all present property c. Particular partnership d. Partnership by estoppels 3. The partnership will bear the risk of loss of three of the following things, except a. Things contributed to be sold b. Fungible things or those that cannot be kept without deteriorating c. Non-fungible things contributed so that only their use and fruits will be for the common benefit d. Things brought and appraised in the inventory 4. Partner who contributes industry or labor a. General b. Capitalist c. Industrial

d. Managing

5. Partner who does not participate in the management though he shares in the profits or losses a. Liquidating b. Nominal c. Ostensible d. Silent 6. May be required to make additional contribution in case of imminent loss a. Capitalist partner b. Limited partner c. Industrial partner d. a, b, and c 7. A newly admitted general partner is liable to creditors existing at the time of his admission and his liability is a. Up to his capital contribution only if there is stipulation b. Up to his separate property even if there is no stipulation c. Up to his capital contribution even if there is stipulation d. Up to his separate property only if there is stipulation 8. A, B and C are capitalist partners while D is an industrial partner. A, the managing partner engaged personally in a business that is the same as the business of the partnership without consent of the other partners. As a result, a. If there are losses, the partnership will bear the losses b. If there are profits, the profits will be shared by A and the partnership c. If there are profits, A will give the profits to the partnership

d. A will be excluded from the partnership and will pay damages 9. A, B and C are partners. D is admitted as a new partner. Will D be liable for partnership obligations contracted prior to his admission to the partnership? a. No, only for those contracted after his admission b. Yes, and his liability would extend to his own individual property c. Yes, but his liability will extend only to his share in the partnership property and not to his own individual property d. Yes, as if he had been an original partner 10. A, B and C, are capitalist partners, each contributed P10,000. After exhausting the assets of the firm, the firm’s indebtedness amounts to P90,000. It was stipulated that A would be exempted from liability. Which is correct? a. A may recover his original capital P10,000 b. The creditors may collect P30,000 each from A, B and C c. A can recover P20,000 each from B and C should he be required to pay the creditors d. The creditors can recover P45,000 each from B and C. 1. One of the following is not requisite of a contract of partnership. Which is it? a. There must be a valid contract b. There must be a mutual contribution of money, property or industry to a common fund c. It is established for the common benefit of the partners which is to obtain profits and divide the same among themselves d. The articles are kept secret among the members 2. The minimum capital in money or property except when immovable property or real rights thereto are contributed, that will require the contract of partnership to be instrument and be registered with SEC a. P5,000 b. P10,000 c. P3,000 d. P30,000 3. A and B entered into a universal partnership of all property. At the time of their5 agreement, A had a four-door apartment from his father 3 years earlier. B, on the other hand, had a fishpond which be acquired by dacion en pago from C. During the first year of the partnership, rentals collected on the four-door apartment amounted to P480,000; while fish harvested from the fishpond were sold for P300,000. During the same period, B received by way of donation a vacant lot from an uncle. The partners had a stipulation that future property shall belong to the partnership. Which of the following does not belong to the common fund of the partnership? a. Fishpond b. Rental of P480,000 c. Apartment d. Vacant land 4. A and B entered into a universal partnership of profits. At the time of execution of the articles of partnership, A had a two-door apartment which he inherited from his father 3 years earlier. B on the other hand, had a fleet of taxis which he purchased two years before. In the first year of the partnership, A earned P500,000 as a radio talent while B won P1,000,000 in the lotto. During the same period, rentals of P120,000 were collected from the apartment, while fare revenues of P200,000 were realized from the operation of the fleet of taxis. Which of the following belongs to the partnership? a. Two-door apartment c. Salary of P500,000 b. Lotto winnings of P1,000,000 d. Fleet of taxis 5. A, B and C are partners in CAB Enterprises. Not having established yet their credit standing, the three partners requested D, a well known businessman, to help them negotiate a loan from E, a money lender. With the consent of A, B and C, D represented

himself as a partner of CAB Enterprises. Thereafter, E granted of loan of P150,000 to CAB Enterprises. What kind of partner is D? a. Managing partner c. Ostensible partner b. Liquidating partner d. Partner by Estoppel PARTNERSHIP 1. A, B and C are partners in CAB Enterprises. Not having established yet their credit standing, the three partners requested D, a well known businessman, to help them negotiate a loan from E, a money lender. With the consent of A, B, and C, D represented himself as a partner of CAB Enterprises. Thereafter, E granted a loan of P150,000 to CAB Enterprises. What kind of partner is D? a. Managing partner c. Ostensible partner b. Liquidating partner d. Partner by estoppel 2. Which of the following losses will not cause the dissolution of a partnership? a. Loss before delivery of a specific thing which a partner had a promised to contribute to the partnership b. Loss of a specific thing after its delivery to and acquisition of its ownership by the partnership from the partner who contributed the same. c. Loss after the delivery of a specific thing where the partner contributed only its use and enjoyment, where such partner reserved the ownership thereof d. Loss before delivery of a specific thing where the partner promised to contribute only its use and enjoyment, reserving the ownership thereof 3. Partnership as distinguished from corporation a. Acquires juridical personality upon approval by the SEC and issuance of certificate b. Has a limited liability c. Created by operation of law d. No power of succession 4. Essential elements or feature of a partnership, except a. Must have a lawful object or purpose b. There must be a contribution of money, property or industry to a common fund c. With intention to divide and contribute whatever profits they make to other people d. Must be established for the common benefit or interest of the partners 5. Partner who contributes money and /or property, except a. General c. Industrial b. Capitalist d. Managing 6. Partner whose connection with the firm is concealed or kept a secret a. Ostensible c.Silent b. Secret d. Nominal 7. Partner who is not really a partner but who may become liable as such insofar as third person are concerned a. Nominal c. Silent b. Ostensible d. Secret 8. The following persons are disqualified to form a universal partnership, except a. Husband and wife b. Brother and sister c. Those guilty for adultery and concubinage

d. Those guilty of the same criminal offense, if the partnership is entered into a consideration of the same. 9. A partnership which comprises all the profits that the partners may acquire by their work or industry during the existence of the partnership is called: a. Universal partnership of all present property b. Universal partnership of profits c. Particular partnership d. Partnership at will 10. Where all the partners are general partners a. Partnership by estoppel b. Limited partnership

c. Partnership de facto d. General partnership

11. When the manner of management has not been agreed upon, who shall manage the affairs of the partnership? a. Capitalists partners c. Capitalist-industrial partners b. Industrial partners d. All of the partners 12. One or more but less than all partners have no authority to perform the following acts, except: a. Do any act which would make it impossible to carry on the ordinary business of the partnership. b. Submit a partnership claim or liability to arbitration. c. Renounce a claim of the partnership d. Convey partnership in the ordinary course of partnership business. NEGOTIABLE INSTRUMENT 1. In which of the following is a bank always both the drawer and the drawee? a. Cashier’s check c. Crossed check b. Certified check d. Memorandum check 2. Which of the following statements is not correct? a. A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay b. Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance c. The crossing of a check is special where the words written between the two parallel lines are “and Co.,” or “for payees account only”. d. Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon. 3. Which of the following instruments is negotiable? a. “Pay to the order of A or B the sum of P100,000.” Sgd. C and D b. “I promise to pay to the order of A or B the sum of P100,000.” Sgd. C and D c. “ Pay to B or order the sum of P100,000 30 days after sight.” Sgd. A d. “We promise to pay A and B the sum of P100,000.” Sgd. C and D 4. Where the language of the instrument is ambiguous or there are omissions therein, the following rules of construction apply, except: a. Where the instrument is so ambiguous that there is doubt whether it is a bill or note, the holder may treat it as either at his election

b. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an indorser c. Where the instrument provides for the payment of interest, specifying the date from which interest is issue thereof d. Where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail. 5. When an indorser waives presentment and notice of dishonor, he increases his liability. The indorsement is a. Special b. Qualified c. Facultative d. Restrictive 6. If a promissory note is not presented for payment and presentment is not excused, who is discharged? a. Maker c. Both the maker and indorser b. Indorser d. Neither the maker nor the indorser 7. Where a negotiable promissory note payable to B or order has been issued by the maker A for an illegal consideration, which of the following is not correct? a. The note as a contract is void b. B has no cause of action against A c. B can negotiable the note by indorsement and delivery d. If delivered by B to C, C is only a holder for value if C is aware of the illegal consideration 8. This indorser becomes a mere assignor of the title to the instrument, if his indorsement is a. Special b. Qualified c. Conditional d. Restrictive 9. When a negotiable instrument is complete buy undelivered, delivery is presumed to have been made in favor of a holder in due course, the presumption is a. Prima facie b. Pro tanto c. Conclusive d. Disputable 10. A signed a blank promissory note payable to B or order. Later, the note was stolen by B who filled in the amount and then indorsed the note to C and C to D, D to E and E to F. Can F enforce the note against A? a. Yes, if F is a holder in due course b. No, even if F is a holder in due course c. Yes, even if F is a holder for value, provided that E is a holder in due course d. No, unless F is a holder in due course and F derived his title from E who is also a holder in due course 11. There is no difference between a holder in due course and one who is not, since as regards them, real and personal indorsement may always be raised, if a. Immediate parties c. Remote parties b. Intervening parties d. Subsequent parties 12. A delivered a promissory note payable to B or bearer. B made a special indorsement to C and C made a blank indorsement to D and D delivers the note to E. If A fails to pay, which of the following is correct? a. E can collect from either B, C and D b. If E collects from C, C can collect from B c. If E collects from D, D can collect from either B or C d. If E collects from D, D can collect from C but not from B

13. A delivered a promissory note payable to B or order. B made a blank indorsement to C and C delivers the note to D who likewise delivered the note to E. If A dishonors the note, E can collect a. From either B, C and D c. From either C or D b. Only from D d. From either B or D 14. These defenses are available against the holder who stands in privity with the party entitled to set it up or those who acquired it without being or having the rights of holders in due course a. Real defenses b. Absolute defenses c Equitable defenses d. National defenses 15. Where a negotiable promissory note payable to B or order has been issued by the maker A for an illegal consideration, which of the following is not correct? a. The note as a contract is void b. B has no cause of action against A c. B can negotiable the note by indorsement and delivery d. If delivered by B to C, C is only a holder for value if C is aware of the illegal consideration 16. This indorser becomes a mere assignor of the title to the instrument, if his indorsement is a. Special b. Qualified c. Conditional d. Restrictive 17. Which of the following statements is not correct? a. When a compulsory heir is given by will less than his legitime, the provisions of the will should be modified in such a way that he will receive his legitime b. The CIR may examine the bank deposit of a decedent for the purpose of determining hid gross estate even if the estate did not request for a compromise on the ground of financial incapacity c. The P500,000 standard deduction for medical expenses for estate tax purposes is a legal mechanism to further exempt the less privileged estate and heirs from tax burden d. The sharing of heirs in testamentary succession must satisfy the rules on legitime 1. The following are essential requisites of a negotiable promissory note except a. must be written and signed by the drawer b. must contain an unconditional promise to pay a sum certain in money c. must be payable upon fixed determinable future time. d. must be payable to order or bearer 2. Which of the following is not an essential element of a bill of exchange? a. must be written and signed by the drawee b. must contain an unconditional promise to pay a sum certain in money c. must be payable to order or bearer d. drawee must be named therein 3. The following are negotiable except a. “Pay to bearer Jose Cruz P 10,000 upon demand”, signed by A and addressed to B b. “Pay to Jose Cruz or bearer P 10,000 upon demand”, signed by A and addressed to B c. “I oblige myself to pay Pedro Reyes or order P 3,000 ten days after day signed by M as maker. d. “Good to L or order P 5,000 July 1, 2009 signed by M as maker

4. Which of the following is negotiable? a. “ I promise to pay Jose Cruz or order P 10,000 or deliver 1 cow 20 days after date at the option of the holder” signed by M as maker b. “Pay to Pedro Reyes or bearer P 10,000 or deliver 1 cow on 4-4-10 at the option of the drawee”, signed by A and addressed to B c. “Pay to Pedro C. Cruz or order P 5,000 out of fund I deposited with you” signed by A and addressed to B d. I promise to pay K. KHO or order P 10,000 in 5 installments, first installment August 1, 2009 and every month thereafter, signed by M as maker 5. The following are functions of negotiable instrument; except: a. used as substitute for money b. medium of credit transactions c. medium of exchange for commercial transactions d. none of them. 6. Which of the following is no an incident in the life of negotiable instrument? a, Issue b. notice of dishonor

c. Preparation d. Negotiation

7. Which of the following is negotiable? a. Postal Money order b. Certificate of stock c. Treasury warranty d. None of them 8. A promissory note is payable to bearer when: a. It is payable to a person named therein or bearer b. the only indorsement is blank c. the name of payee does not support to be the name of a person d. all of the above 9. The following are considered negotiation except a. issue b. indorsement plus delivery c. delivery d. none of them 10. This indorsement constitutes the indorser as a mere assignor of the title of the instrument: a. Special b. Blank

c. qualified d. restrictive

11. The following are requisites in order that a person can be considered a holder in due course; except a. that the instrument is complete and regular upon its face. b. the instrument is not yet overdue or no notice of dishonor c. holder for value and in good faith

d. none of them. 12. Which of the following is not false? a. a holder for value is not necessarily a holder in due course b. only person whose signature appear in the instrument can be held liable therein c. forgery is both real and personal defense d. an accommodation party is liable only to a holder in due course 13. Real defenses are those that attached to the instrument itself and can be set up even against holder in due course. Which of the following is not considered real defense? a. fraud in factum b. forgery

c. absence or failure of consideration d. minority

14. The existence of the payee and his then capacity to indorse is a warranty of: a. the maker b. acceptor

c. drawer d. all of them

15. Which of the following is not a warranty of a qualified indorser? a. the instrument is genuine b. he has a good title c. prior parties have capacity to contact d. instrument is valid and subsisting 16. Notice of dishonor is not required to be given by a drawer when: a. The drawer and the drawee are the same person b. the drawee has countermanded payment c. the drawee is fictitious d. all of the above 17. Which of the following is not considered material alternation a. changing the date b. changing the amount c. changing the relation of the parties d. none of them 18. A negotiable instrument is discharged by: a. payment in due course by or on behalf of the party primarily liable b. payment in due course by the party accommodated c. intentional cancellation thereof by the holder d. none of them 19. Who of the following is party with primary liability? a. Maker b. Indorser

c. drawer d. person negotiating by mere delivery

20. A check is not presented for payment within a reasonable length of time after issue is called

a. certified b. Stale

c. memorandum d. crossed

21. Signification by the drawee of his assent to comply with the order of the drawer is: a. Indorsement c acceptance b. delivery d. presentment for acceptance 22. Presentment for acceptance is required when a. the bill is payable after sight b. the bill requires it c. the bill is drawn payable elsewhere than the residence of the drawee d. all of them 23. Protest is required when this bill is dishonored: a. domestic/local b. foreign

c. trade acceptance d. all of the above

24. The following are promissory notes except: a. due bill b. bond

c. certificate of deposit d. none of them

25.Which of the following is false? a. the acceptor is primarily liable b. the drawer is secondarily liable c. the issue is not negotiation d. when the drawer and drawee are the same person the holder consider the bill was a note 26. I promise to pay Jose Reyes or order P 10,000 ten days after the date signed by M as maker. The note is undated. Which of the following is correct? a. the note is non negotiable b. the payee can require payment 10 days after issue c. the payee can require payment at any time d. the payee cannot negotiate the note 27. The negotiable promissory note signed by M as maker for P 10,000 is payable to Jose Cruz or bearer on May 10, 2009. M however issued the note to the payee May 15, 2009. In this case: a. The instrument is considered non-negotiable because the date of issue is later than the date of payment. b. Cruz can ask for payment at anytime c. Cruz can require payments only on May 15, 2009 d. Cruz cannot negotiate the note 28. “Pay to Maria or order P 20,000 upon demand”, signed by A as drawer and addressed to B. Maria negotiated the bill to C, C to D, E stole the bill from D and indorsed it to F by forging the signature of D. F in turn indorsed the bill to G & G to H. Which of the following is false? a. all indorsers prior to the forgery are discharged b. the drawer is liable to H c. F is liable to H d. Forgery is real defense

29. M is the maker of a note payable to J. Cruz or order for P 5,000 due July 30, 2009. Cruz borrowed P 2,000 from C payable July 31, 2009 and pledged the note by indorsing it to C. Which of the following is correct? a. a promissory note cannot be pledged without the consent of the maker b. On July 30, 2009 C can collect from M only P 2,000 c. on July 30, 2009 C can collect from M P 5,000 d. partial indorsement is allowed 30. A is the drawer of a bill addressed to B, payable to C or order 10 days after acceptance for P 8,000. C negotiated the bill to D, to E and E to F. The bill was accepted by B when presented by F. If the signature of A is forge, which of the following is false? a. B is required to pay F even if the signature of A is a forgery b. B is not required to pay F since he has the defense of forgery c. Forgery is considered a real defense d. If B dishonors the bill by non-payment F may give to any indorse 31. M is the maker of a note, payable to C or order for P 10,000. C negotiated the note to D, D to E, E to F, F to G and G to H. M dishonored the note when presented by H for payment. H gave notice of dishonor to F. Which of the following is true. a. all indorsers prior to F are discharged b. only G is discharged c. H is required to notify M d. F in turn can give notice to G 32. “ Pay to Pedro Reyes or order P 20,000 ten days after sight SIGNED By A drawer as agent of B To: B Pedro Reyes negotiated the bill to C, C to D and D to E. B dishonored the bill by non payment. E gave notice of dishonor to all prior parties except B. Which of the following is not correct? a. The drawer is not liable to E b. The drawer is liable to E since he was duly notified of the dishonor c. if D paid E , C becomes liable to D d. this bill maybe considered as a note 33. M signed a promissory note payable to C or order for P 5,000 ten days after date. C indorsed the note to D, D to E and E to F. F, without authority from the prior parties, altered the amount to P 15,000 then indorsed the note to G. a. the unauthorized alteration renders the note void b. G cannot require M to pay anything c. G can require M to pay only P 5,000 if G is a holder in due course d. G can require M to pay P 25,000 if G is a holder in due course 34. Drawer A addressed a bill to B for P 20,000 payable to C or order 20 days after acceptance. B made a conditional acceptance in this case:

a. the bill becomes non-negotiable b. it is still negotiable notwithstanding the conditional acceptance c. the holder cannot refuse to take a conditional acceptance d. B is considered a constructive acceptor 35.M is the maker of a note for P 30,000 payable to C or bearer. C negotiated the note to D, D to E, E to F and F to M. Which is correct? a. the note is discharged b. the noted is not discharged since there is no payment c. M cannot re-issued the note d. The indorsers are not dischaged

Sales 1. As a rule, this contract of sale involving a piece of land is void a. Between a minor and a capacitated person b. Between two insane persons who did not act during lucid interval c. Between first degree cousins d. Between husband and wife 2. A, 17 years old, sold to B, of legal age, her necklace worth P20,000 for P15,000. Later, B sold the necklace to C for P20,000. Which of the following statements is correct? a. A has got a voidable title because at the time of sale, shi is a minor b. A can ask for rescission of the sale to C because she suffered a lesion of more than ¼ of the value of the property. c. If C is in bad faith, C becomes the owner of the necklace upon delivery to him but his title is voidable d. A can ask for the annulment of the sale to C because at the time of sale she is a minor 3. This serves as a proof of the perfection of the contract of sale a. Dacion en pago c. Delivery b. Option money d. Arras 4. A contract of sale is not a(an) a. Onerous contract b. Accessory contract

c. Commutative contract d. Bilateral contract

5. Warranty against hidden defects is a. An essential element b. A natural element

c. An accidental element d. An artificial element

6. Emptio spei as distinguished from emptio rei speratae a. Sale of a future thing c. Its quantity and quality are unknown b. Should come into existence d. Sale of a present thing 7. When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall be in writing, otherwise the sale is a. Valid c. Unenforceable b. Voidable d. void

8. The sale of an expected thing a. Dacion en pago b. Payment by cession

c. Emptio spei d. Emptio rei-speratae

9. The sale of the hope itself a. Dacion en pago b. Payment by cession

c. Emptio spei d. Emptio rei-speratae

10. One of the following is not correct a. Things subject to a resolutory condition may be the object of the contract of sale b. A thing is generic when it is particularly designated or physically segregated from all others of the same class c. Things having potential existence may be the object of the contract of sale d. The sole owner of a thing may sell an undivided interest therein 11. A needs a size 10 of model 101 of Delicious Shoes regularly available to the public for her boyfriend B, but the same is out of stock so she placed an order for one. On the other hand, B placed an order of size No. 8, colored violet, (something not ordinarily made by the company) to be given to A. which is correct? a. Both are contracts of sale b. Both are contracts for a piece of work c. First is a contract of sale, second is a contract for piece of work d. First is a contract for a piece of work, second is a contract of sale 12. A offered to sell for P12,000,000 her house and lot to B who was interested in buying the same. In her letter to B, A stated that she is giving B a period of one month within which to raise the amount and that as soon as B is ready, they will sign the deed of sale. Five days before the expiration of the one month period. A went to B and told her that she is no longer willing to sell the property unless the price is increased to P15,000,000. Which is correct? a. B may compel A to accept the P12,000,000 first offered b. A may compel to B to pay P15,000,000 c. A and B should shoulder the P3,000,000 difference d. B cannot compel A to accept the P12,000,000 first offered For items 13-16 13. If the object of the contract is specially made or manufactured at the specific order of another, it is a contract for a piece of work. This is a. English rule b. Massachusetts rule c. New York rule d. Chicago rule 14. If the article already exists and subsequently acquired by another, it is contract of sale, and if the article is still to be manufactured at the instance of another, it is a contract for a piece of work. This is a. English rule b. Massachusetts rule c. New York rule d. Chicago rule 15. If the material used in the manufacturer of the article is more valuable, it is contract of sale, and if the labor or skill is more valuable than the material used in the manufacture of the article, it is a contract for a piece of work. This is a. English rule b. Massachusetts rule c. New York rule d. Chicago rule 16. The rule observed in the Philippines is a. English rule b. Massachusetts rule c. New York rule d. Chicago rule 17. The Realty Installment Buyer Protection Act applies to all transactions involving the sale or financing of real estate on installment but it excludes the following except:

a. b. c. d. 18.

Sale or financing of industrial lots Sale or financing of commercial building Sale to tenants under the Land Reform Code Sale of residential condominiums

Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the sale is a. Traditio longa manu c. Traditio constitutum possessorium b. Traditio brevi manu d. Traditio symbolica

19. Effected when the object of sale is already in the possession of the vendee at the time of sale so that delivery need no longer be made is a. Traditio longa manu c. Traditio constitutum possessorium b. Traditio brevi manu d. Traditio symbolica 20. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the thing not as owner but as tenant or lessee a. Traditio longa manu c. Traditio constitutum possessorium b. Traditio brevi manu d. Traditio symbolica 21. Goods are deemed in transit a. When the buyer accepts delivery of the goods upon arrival at destination b. When the buyer intercepts and lawfully takes possession of the goods at any point before destination c. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the buyer, up to the time that the buyer or his agent takes delivery for the goods from the carrier or bailee d. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his agent that he is holding the goods as bailee for the letter. 22. Goods are redeemed no longer in transit a. If the goods are rejected by the buyer for a valid reason and the carrier or the other bailee continues in possession of them, even if the seller has refused to received them back b. From the time they are delivered to a carrier by land, water or air for the purpose of transmission to the buyer c. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer or his agent in that behalf, takes delivery of them from such bailee d. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf 23. A sold to B orally of land for P200,000. A effected the delivery of the land. The payment of the price was to be made three months later. At the end of the three month period a. B may refuse to pay claiming in his defense the Statute of Frauds b. CREDIT TRANSACTIONS PLEDGE AND MORTGAGE 2. Which of the following statements is true? a. Any stipulation in a contract of pledge authorizing the pledge to sell the thing pledged if the pledgor cannot pay is void

b. In mortgage, the mortgagee is entitled to the entire proceeds of the sale of the thing mortgaged c. In mortgage and in pacto de retro sale, the title to the property which is the subject matter of the contract is transferred to the other party. d. Real estate mortgage is an accessory contract 3. In real estate mortgage, the mortgagor can sell the property mortgaged a. Only if with the oral consent of the mortgagee b. Only if with the written consent of the mortgagee c. If not prohibited to sell d. Even without the consent of then mortgagee 4. Elements of contracts of pledge and mortgage, except a. Pledgor or mortgagor must be absolute owner b. Pledgor or mortgagor must have the free disposal of the thing pledged c. The thing pledged or mortgaged may be appropriated if the debtor cannot pay. d. Pledge and mortgage are accessory contracts 5. A borrowed P100,000 from B with A’s ring given to B by way of pledge. It was stipulated that in case of non-payment on due date, the ring would belong to B. this forfeiture is a. Caveat emptor b. dacion en pago c. pactum comisorio d. pacto de retro 6. A borrowed P100,000 from B, and as a security. A pledged his ring to B. after the obligation falls due, A goes to B relinquishing ownership of the ring in favor of B. this is a. Caveat emptor b. dacion en pago c. pactum comisorio d. pacto de retro 7.

A borrowed P30,000 from B, and as security, he pledged his ring, pair of earnings and necklace. On due date, A paid P20,000. As a result, a. A can demand the return of one (1) of the things pledged b. A van demand the return of any two (2) of the things pledged c. A can demand the return of the ring d. A cannot demand the return of any of the things pledged

8. A mortgaged his residential land to B as a guarantee for the payment of P400,000 obligations to B. they agreed that A should not sell the land while obligation exists. Before the maturity of the mortgage, C offered to buy the land from A. which is correct? a. A cannot sell the land to C because of the agreement not to sell b. A can sell the land to C only if B consents in writing c. A can sell the land to C despite of the agreement not to sell d. A cannot sell the land to C unless A pays the obligation 9. S, minor of 16 years, sold her bracelet to B for P8,000. Later, B, needing money to pay her daughter’s tuition fee, borrowed P15,000 from C and as a security, pledged the bracelet to the latter. B failed to pay C resulting into the auction sale of the bracelet in favor of D for P10,000 only. Which of the following statements is correct? a. The title of B over the bracelet is not valid, hence the pledge, as well as the sale of said bracelet is likewise defective. The pledgor must be the owner of the thing pledged. b. The deficiency of P5,000n may still be recovered by C from D if there is a stipulation to this effect c. C can no longer the deficiency of P5,000 from B. the pledge, together with the sale is valid. The voidable title of B is valid because it is not yet annulled. d. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet from S, ownership will not pass to him (D).

10. In the preceding number, assuming what was executed by B in favor of C was a valid chattel mortgage which was eventually foreclosed and the bracelet was sold to D at the public auction for the same amount, which statement is correct? a. The title of B over the bracelet is not valid, hence the chattel mortgage, as well as the sale of said bracelet is likewise defective. The mortgagor must be the owner of the thing mortgaged. b. The deficiency of P5,000 may still be recovered by C from B. c. C can no longer recover the deficiency of P5,000 from B as the mortgage, together with the foreclose sale, was valid. The title of B was still valid d. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet, ownership will not pass to him (D) 11. S sold to B a specific car for P200,000 payable four equal installments. S delivered the car to B but required B to mortgage it back to S to answer for the unpaid installments. B paid the 1st and 2nd installments but he failed to pay the balance. S foreclosed the mortgaged property and sold it at public auction for P80,000. As a result, a. S can recover from B the balance of P20,000 b. S can recover from B the balance of P20,000 if there is stipulation to that effect c. S cannot recover the deficiency any more even if there is stipulation to that effect d. S cannot recover the deficiency except if there is stipulation. COMPREHENSIVE 1. On February 12, 2010, A sold his only dog to B for P20,000. The parties agreed that B will pay one day after the results of the May 2010 CPA Licensure Examination are released while A will deliver the dog on the day B pays. If the results were released on May 25, 2010 but the dog gave birth to a puppy on May 24, 2010, which of the following statements is correct. a. A is entitled to the puppy because the puppy was born before the obligation to deliver arises. b. A is entitled to the puppy because of the principle that accessory follows the principle. c. B is entitled to the puppy because the contract was perfected on February 12, 2010 d. B is entitled to the puppy because the puppy cannot be separated from the mother dog yet. 2. A pointed a gun and threatened to kill B if B will not sign a promissory note which reads “I promise to pay A, P100,000”. Out of fear, B sign the note. It turned out that two days earlier, A’s obligation to B amounting to P100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct? a. Yes, because the promissory not is valid b. No, because the promissory note was signed only because there was intimidation c. Yes, provided B will agree d. No, because A’s obligation does not exist 3. A has two creditors, B and C. the obligation to B is P10,000 and to C is P12,000. Later, with the consent of A and B, W pays B P10,000. Now W and C are the creditors of A. suppose A has only P12,000, which is correct? a. C should be preferred c. C and W should be paid proportionately b. W should be preferred d. A may choose whom to pay 4. In the following cases, the contract of sale with the right of repurchase shall be deemed an equitable mortgage, except when a. the vendor remains in possession of the object

b. the vendee retains a portion of the price c. the price is inadequate d. the parties renew the instrument after the expiration of the period to repurchase 5. A owes B P100,000 secured by mortgage. C, girlfriend A, and with no interest at all in the obligation, paid B the P100,000 without the knowledge of A. whish of the following course of action is allowed? a. C can recover P100,000 from A b. C can foreclose the mortgage c. C is subrogated to the rights of B d. The parties renew the instrument after the expiration of the period to repurchase 6. A owes B. P10M. At maturity, A conveyed to B a parcel of land worth P20M. In turn, B indorsed and delivered to A the share of stocks of ABC Corporation worth P10M. In this case, the transaction is a. Barter c. Dation in payment b. Sale d. Partly sale, partly barter 7. A sold his car to B “on sale or return within 10 days”. On the 7 th day after delivery, the car was forcibly taken by the carnappers. In this case a. the contract of sale is terminated b. B must still pay the purchase price c. A bears the loss d. B can refuse to unless A delivers another car 8. In the following cases, the vendor is not oblige to make delivery after perfection of the contract of sale, except a. The vendee has not paid the price b. No period for payment has been fixed in the contract c. Vendee lost right to make use of the period to pay d. A period for the payment has been fixed in the contract 9. Statement 1 – Chattel mortgage is consensual contract and the creditor gets possession of the thing mortgaged Statement 2 – Pledge is consensual contract and gives a personal right Statement 3 – Real estate mortgage is a real contract and creates a real right if registered with the Registry of Property Statement 4 – Antichresis is an accessory contract and gives a real right a. Only one statement is true b. Two statement are true c. Three statement are true d. All statements are true 10. Which of the following is not correct? a. a movable or immovable property maybe the object of commodatum b. the bailor in commodatum need not be the owner of the thing loaned c. a stipulation that the bailee may make use of the fruits of the thing is valid d. the bailor is obliged to pay for the ordinary expenses for the use and preservation of the thing loaned 11. The following are obligation s of the agent, except a. In the execution of the agency, the agent shall act in accordance with the instructions of the principal b. Shall be bound to advance the necessary funds, except when the principal is insolvent c. Shall finish the business already begun on the death of the principal, should delay entail any danger

d. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint agent. 12. To be valid and enforceable, the following contracts should be in writing, except a. Contract to pay interest on loan b. Contract of donation of real property c. Contract giving authority to an agent to sell a piece of land d. Contract made in consideration of marriage 13. X borrowed money from Y. X constituted a real estate mortgage over his house to secure the loan. It was stipulated that in case X could not pay the loan on time, the house would belong to Y. Which is correct? a. Y shall become owner of the house upon default by X by virtue of their written agreement b. Y shall become the owner of the house by virtue default of X. c. Y shall only enjoy the right of alienation over the land d. Y shall be entitled too the right of appropriation of the land 14. The following are the same, except a. Mandate and principal b. Mandatorio and agent c. Authority and power d. Cause and consideration 15. F sold and delivered to G on February 10, 2010 a cellphone for P30,000. It was agreed that G would pay the P30,000 at the end of the said month of February and that F shall remain the owner of the cellphone unit until the price has been fully paid. If before the end of the month, the phone is destroyed by a fortuitous event, which of the following is provided for by law? a. F shall bear the risk of loss b. G shall bear the risk of loss c. The buyer and seller shall jointly bear the risk of loss d. All the above are without basis in law 16. K and Q are siblings. They remain co-owners of a parcel of land which they inherited from their deceased parents. The land is adjoined by the lots of M in the north and B in the South. K sold his undivided half share of the inheritance to H. In this case, legal redemption shall be allowed in favor of a. Q b. M c. B d. All of the above proportionately 17. X, a bride to be, rented a car from Y Car Rentals to bring her to the church on February 14, 2010, her wedding day. The car and driver s assigned were nowhere to be found on the scheduled day. Y Car Rentals incurs delay because a. The obligation or law expressly declares b. Time is of the essence c. The obligation has rendered it beyond his power to perform d. The date has been fixed by the parties 18. A, minor, sold the ring of his brother without authority. The ring has a fair market value of P1M and selling price was P600,000. The contract is a. Rescissible b.Voidable c. Unenforceable d. Void 19. Using the preceding number, the remedy is a. A can ask for annulment b. The brother can ask for annulment

c. The buyer can ask for annulment d. the brother can just ignore the contract 20. Spouse H and W are under the regime of absolute community of property. H, through violence and intimidation obtained the signature of W to a contract of sale involving W’s exclusive property in favor of H. the fair market value of the property is P1M but the selling price is only P700,000. The sale is a.Rescissible b. Voidable c. Unenforceable d. Void 21. A owns a parcel of land which he sells to B with a 3 year redemption period. After the second year A dies leaving his children C, D and E as his heirs. Which of the following is not correct? a. A can repurchase the whole thing, so anyone among C, D and E may repurchase the whole thing b. C can redeem his 1/3 share, D his 1/3 share and E his 1/3 share if B does not require all of them or any one of them to redeem the whole property c. B may demand all of the co-heirs that they come to an agreement upon repurchase of the whole thing sold d. B cannot be compelled to consent to partial redemption 22. A sold his car to B payable in ten equal monthly installments and with a mortgage constituted on the same property. For B’s failure to pay a month’s installment, which statement is correct? a. A may foreclose the mortgage on B’s car but he has no longer the right to recover the balance should it be sold for an amount lower than what he claims from B b. A may seek the cancellation of the sale made to B c. A may seek fulfillment of the obligation of B to pay the entire purchase price d. A may seek the cancellation of the sale and later on foreclose the mortgage should he find it impossible to collect from B 23. Which of the following is not a ground for annulment of contract? a. Incapacity to give consent b. Vitiated consent c. Lesion d. Minority 24. When the sale of a piece of land or any interest therein is through an agent, the authority of the agent may be a. In public instrument b. In private instrument c. Either in a public or private instrument d. Duly notarized 25. An agency cannot be revoked at will in the following cases, except when a. A bilateral contract depends upon it b. The agency is for fixed term c. It is the means of fulfilling an obligation already constituted d. The authority is granted to a managing partner appointed through the contract of partnership 26. The vendor-de-retro shall be entitled to redeem the object of sale within a. Four years if n period is agreed upon b. Thirty days from notice of intention to repurchase c. Ten years if there is a period stipulated d. the period agreed upon

27. Which of the following is a common requisite of the remedies of possessory lien and stoppage in transit? a. Unreasonable delay in payment of the price b. Goods are in transits c. Object mast be in vendor’s possession d. Insolvency of the buyer 28. A was obliged to pay B P1M on December 31, 2010. A paid B on December 31, 2009 believing that the obligation was already due and demandable. How much may A recover from B on March 31, 2011? a. Nothing b. Legal interest for one year and three months c. P1M plus legal interest for one year d. Legal interest for one year 29. X and Y gave their consent to a contract of sale involving a property in Quezon City. In the mind of X, he is supposed to buy a Manila property which is also the same property ion the mind of Y as vendor. In this case the proper remedy to cure the mistake is a. Annulment b. Rescission c. Reformation d. Ratification 30. One of the following vices of consent result to consent under duress a. Mistake b. Fraud c. Undue influence d. Intimidation 31. the following contracts are qualified for reformation except a. Onerous contract b. Gratuitous contract c. Renumeratory contract d. Consensual contract 32. Statement 1 – An offer becomes ineffective upon the death, civil interdiction, insanity and insolvency of the offerrer after the offeree’s conveyance of acceptance Statement 2 - Consent is manifested by the meeting of minds of the offer and the acceptance upon the object and cause of the contract a. Both statements are in accordance with the rule of law b. Statement 1 is in accordance4 with law but Statement 2 is against the provision of law c. Both statements are violative of the provisions of law d. Correct answer not given 33. X, Y and Z are W’s sons. Upon the death of W, the three sons found a lat will and testament in the cabinet of W. the will showed disposition of a 30-hectare land, the only asset of W at the time of his death in favor pf the following: X- 5 hectares; Y – 10 hectares and Z – 15 hectares. X felt discriminated with his share of only 5 hectares. Which is correct? a. Reformation of the instrument in order to correct the disparity in the disposal of the property b. Annulment of the instrument is the proper remedy to correct the mistake c. Rescission is the proper remedy to correct the damage on the part of X d. The law does not allow any remedy in this case. 34. W sustained serious head injury while silently reviewing inside the library at the ground floor of the university, resulting from wild baseball throw by X to Y during a practice game. Both players were found negligent in the performance of their respective play. Which is correct? a. X and Y are liable jointly and severally\ b. The liabilities of X and Y are joint c. X and Y have no liability

d. Only X is liable 35. An obtained an interest free loan of P50,000 from B evidenced by a promissory note payable six months after date. At maturity A called B by phone to ask for an extension of one month and offer to pay 20% interest on the loan. Enticed by the 20% interest, B agreed to the extension of maturity, which is correct? a. The interest is a demandable interest by virtue of an agreement b. The interest is unenforceable c. The loan is valid but the interest is void d. the loan and interest are both demandable 36. A promised to deliver B 100 sacks of palay from the former’s 2010 summer harvest. A failed to deliver what was promised due to floods which destroyed the crops before harvest season. Is the obligation extinguished? a. No, generic thing does not perish b. No, A can still raises the same from future crops c. Yes, the generic thing is delimited d. Yes, the contract is void due to non-existing object at the time of perfection of contract 37. D is obliged to give E, at E’s option, his Rolex watch, or his Cross ballpen or his Diamond ring. The diamond ring was forcibly taken by a robber and the watch by a snatcher. After D lost the watch and the ring, the ballpen likewise could not be located despite diligent efforts to find the same. D could no longer remember where he kept the pen. Hence, D failed to deliver any of the three items he promised. Is the obligation of D to E extinguished? a. No, E can demand the value of anyone of the three items since he has the right of choice b. No, E can demand the value of the last thing lost c. Yes, fortuitous remains practicable 38. X Company bought out a competitor, Y, with a stipulation that Y should thereafter not engaged in any business in the Philippines without the consent of X Company a. The stipulation is not valid because the parties as a rule have no absolute freedom to stipulate terms and conditions in a contract b. the stipulation is not valid because this is against public policy c. The stipulation is valid because it was mutually agreed upon d. The stipulation if ratified is valid 39. A promissory note reads “I promise to pay B, P100,000 on July 30, 2010. Sgd. A”. B transferred the note to C. Later X stole the promissory not and transferred the note to Y who received the note in good faith. On maturity date, Y presented the note to A and demanded payment. A paid the note in good faith. In this case, a. A’s obligation is extinguished b. C cannot collect from A c. A’s obligation is not extinguished d. C can recover only either from X or Y 18. Delectus personae is an element of a partnership which means a. Right to choose his partners b. Confidence and trust in his partners c. Obligation to remain loyal to his partners d. Distribution of profits among the partners 19. When real property is contributed to the partnership a. A real contract is perfected b. A written instrument is required

c. A public instrument complete with inventory is required d. A partner can make important alteration if beneficial to the partnership 20. In a partnership, the liability of the partners shall be joint and solidary A. Obligations in favor or partnership suppliers by virtue of sales contract B. Obligations in favor of a partnership client for return of deposits misappropriated by one of the partners C. Obligations in favor of a pedestrian hit by the delivery van driven by one of the partners in the course of partnership business a. I and III b. II and III c. I and II d. I, II and III 21. A corporation is different from a partnership in that the former is a. An artificial being c. A business organization b. Created by operation of law d. Organized for profit 22. A bought from B a car at a price of P2M, FOB factory. A paid P1M as down payment and the balance within one month from delivery. The car was picked up by A upon payment of the down payment on April 24, 2010. On May 10, 2010, B learned of A’s insolvency. In this case, B shall be entitled to a. Remedy of possessory lien c. Remedy of stoppage in transitu b. Remedy of resale d. Remedy of rescission 23. A lost his cell phone while inside a restroom. It was found by B who diligently searched for the owner but to no avail. Later, the cell phone was purchased by C, a buyer in good faith. Subsequently A traced his cell phone while being used by C. In this case a. C acquires ownership over the cell phone b. A can recover the cell phone from C upon reimbursement of the purchase price c. C should return the cell phone to A if B return the purchase price d. B’s title is avoid; hence C did not acquire a valid title over the cell phone 24. A sold to B a laptop computer covered by an invoice marked “on trial or satisfaction, 15 days”. On the 10th day, B pledged the laptop computer at “Casa Agencia”. Unfortunately, everything in the pawnshop got lost due to robbery. In this case, a. B has no obligation to pay the price since ownership has not yet passed to him b. A cannot demand for payment of the price since he returns ownership c. Obligation to pay the price is demandable due to acceptance of the delivery d. No one is liable because the loss was due to a fortuitous event 25. In a contract of sale, the parties agreed that the buyer shall be the one to fix the price subject to approval by the seller. The object was delivered to and accepted by the buyer. After a reasonable period of time, the buyer has not yet fixed the price but has appropriated the thing. The seller is now demanding for the payment of the price, in this case, the seller is a. Entitled to the payment of a reasonable price thereof b. Entitled to the payment of the price based on the fair market value at the time of delivery c. Entitled to the payment of the price based on the fair market value at the time of perfection of the contract of sale d. Not entitled to payment of the price because the price has not yet been fixed as agreed upon 26. The principle of “caveat emptor” or let the buyer beware will not apply in a. Sheriff’s sale c. Auction sales b. Sales of animals in pairs d. Sales of livestock as condemned

27. A, B and C are partners. A died together with other passengers of Flight 123 of Air Port. In spite of A’s death, which is known to B, B still transacted business with the firm’s previous creditor, Y, on a matter not related to winding up. Y thought all the time that the firm had not yet been dissolved because he did not read the notice of dissolution published in the newspapers. In this case, the partnership is a. No longer liable to Y since the transaction after dissolution is not connected with winding-up b. Still liable to Y since he is a previous creditor c. Still liable to Y since the transaction is within the 3-year liquidation period d. No longer liable to Y since B can no longer bind the firm due to the death of A 28. A and B entered into a contract of partnership for the purpose of operating a car repair shop. A promised to contribute P500,000 on April 24, 2010. B as industrial partner, will manage the business. On April 24, 2010, A did not effect contribution. Thus a. A is an delay if B makes a demand b. A is a debtor in default c. B shall be entitled to damages d. The partnership is dissolved due to lack of object 29. A is the listed owner of 10,000 with par value of P100/share common shares in ABC Corporation. ABC sued A for the payment of A’s indebtedness of P1M. A contends that such debt must be compensated by his shares of stocks with the plaintiff corporation. The contention of A is a. Valid due to legal compensation b. Valid by virtue of judicial compensation c. Untenable since he is not a creditor of the corporation d. Automatically extinguished if the fair market value of the shares is P1M 30. A gave B P50,000 for the purchase of a TV set in behalf of the former, with the obligation of returning the amount if the TV set was not bought within a week. A did not buy the item but did not return the amount. An estafa case was filed by A against B. B pleaded A to drop the case. In return, B issued a promissory note in favor of A for the amount involved. Is the promissory note valid? a. No, the consideration of the note is the stiffling of the crime of estafa b. No, the consideration of the note is unlawful c. Yes, if the note is negotiable because of mutual consent d. Yes, the note is in consideration of a pre-existing debt 31. A mortgaged his land to B to guarantee the debt of C. Despite repeated demands, C failed to pay B prompting the latter to foreclose the mortgage. However, the proceeds was not sufficient to settle the obligation of C to B. Can B go after A for the deficiency? a. Yes, A is a guarantor b. Yes, the mortgage is binding upon A c. No, only the land was offered as security d. No, the mortgage was not registered with the Registry of Deeds 32. In the partnership of A, B, C and D, D was designated as the managing partner. D’s able management prevented the firm to suffer from the economic turbulence caused by the instability of the Philippine peso. Partners A, B and C became jealous of D’s good name. As a result, D was capriciously and whimsically removed as manager without a valid cause. Is the removal valid? a. Yes, D’s removal is valid even without his consent b. Yes, provided it is approved by all the other partners c. No, D’s appointment is irrevocable without a just or lawful cause d. No, D can only be removed for a valid cause with vote of the partners owning the controlling interest

33. Circumstances indicating that certain alienation has been made in fraud of creditors a. Pactum commissorium c. Badges of fraud b. Stipulation pour atrui d. Upset price 34. A and B entered into a universal partnership of all present property. No stipulation was made regarding future property. After the perfection of the contract, A inherited a parcel of land and B acquired a car as remuneration for services rendered. The properties acquired after the perfection of the contract belong to Land Car Land Car a. A B c. Partnership B b. A Partnership d. Partnership Partnership 35. When the consent of a party to the contract resulted from force or fear, there is a. Mistake b. Duress c. Fraud d. Undue influence 36. A dissenting stockholder is not entitled to the appraisal right in one of the following instances a. Shortening or extending corporate existence b. Merger or consolidation c. Change of corporate name d. Sale of all or substantially all of corporate properties 37. Which of the following statements is false? a. Treasury shares revert to the unissued shares of the corporation and being in the treasury they don’t have the status of outstanding shares b. Shares issued without par value shall be deemed fully paid and non assessable and the holder of such shares shall not be liable to the corporation or its creditors in respect thereto c. Redeemable shares may be redeemed regardless of the existence of unrestricted retained earnings provided such redemption would not cause insolvency or inability of the corporation to meet its debts as they mature d. When par value shares are issued above par, the premium or excess is not to be considered as part of the legal capital 38. In case the members of the board of directors of a corporation still constitute a quorum, and there are vacancies, who will fill up such vacancies? Removal Resignation Expiration of term Increase in the number of Directors a. Stockholders Board Stockholders Board b. Board Board Stockholders Stockholders c. Stockholders Board Stockholders Stockholders d. Stockholders Stockholders Board Stockholders 39. The defendant in a criminal case for physical injuries arising from tort died before final judgment. Is his civil liability extinguished? a. Yes, because death extinguishes personality b. No, the action will be directed against the administrator of his estate c. Yes, because the defendant will be deprived of due process of law d. No, the action will be directed against the creditors of his estate 40. A, B and C organized ABC and Co., limited, a limited partnership with A as a general partner, B as a limited partner, and C as an industrial partner, contributing P200,000 and industry respectively. The partnership failed and after disposing all its assets to pay partnership debts, there still remains a note payable in the sum of P30,000. Against whom can the creditor demand payment?

A a. P30,000 b. P15,000

B P0 P0

C P0 P15,000

A c. P10,000 d. P15,000

B

C P10,000 P15,000

P10,000 P0

41. Not an element of contract of pledge and mortgage a. Can stand alone c. Debtors must be the absolute owners b. Maybe used to pay the obligation d. Debtors must have the free disposal of the objects 42. Which of the following is not correct? a. A partnership begins from the moment of the execution of the articles of partnership, unless it is otherwise stipulated b. Persons who are prohibited from giving each other any donation or advantage cannot enter into universal partnership c. A particular partnership has for its object determinate things, their use of fruits, or a specific undertaking or the exercise of a profession or vocation d. Articles of universal partnership entered into without specifications of its nature, only constitutes a universal partnership of profits 43. The duty to make disclosure, where otherwise there would be a great and unfair inequality of bargaining position by the use of inside position as regards relation of directors to stockholders a. Trust fund theory c. Doctrine of corporate opportunity b. Special circumstances rules d. Doctrine of limited capacity 44. When a negotiable instrument is complete buy undelivered, delivery is presumed to have been made in favor of a holder in due course, the presumption is a. Prima facie b. Pro tanto c. Conclusive d. Disputable 45. A signed a blank promissory note payable to B or order. Later, the note was stolen by B who filled in the amount and then indorsed the note to C and C to D, D to E and E to F. Can F enforce the note against A? a. Yes, if F is a holder in due course b. No, even if F is a holder in due course c. Yes, even if F is a holder for value, provided that E is a holder in due course d. No, unless F is a holder in due course and F derived his title from E who is also a holder in due course 46. There is no difference between a holder in due course and one who is not, since as regards them, real and personal indorsement may always be raised, if a. Immediate parties c. Remote parties b. Intervening parties d. Subsequent parties 47. A delivered a promissory note payable to B or bearer. B made a special indorsement to C and C made a blank indorsement to D and D delivers the note to E. If A fails to pay, which of the following is correct? a. E can collect from either B, C and D b. If E collects from C, C can collect from B c. If E collects from D, D can collect from either B or C d. If E collects from D, D can collect from C but not from B 48. A delivered a promissory note payable to B or order. B made a blank indorsement to C and C delivers the note to D who likewise delivered the note to E. If A dishonors the note, E can collect a. From either B, C and D c. From either C or D b. Only from D d. From either B or D

49. These defenses are available against the holder who stands in privity with the party entitled to set it up or those who acquired it without being or having the rights of holders in due course a. Real defenses b. Absolute defenses c Equitable defenses d. National defenses 50. Which of the following statements is not correct? a. When a compulsory heir is given by will less than his legitime, the provisions of the will should be modified in such a way that he will receive his legitime b. The CIR may examine the bank deposit of a decedent for the purpose of determining hid gross estate even if the estate did not request for a compromise on the ground of financial incapacity c. The P500,000 standard deduction for medical expenses for estate tax purposes is a legal mechanism to further exempt the less privileged estate and heirs from tax burden d. The sharing of heirs in testamentary succession must satisfy the rules on legitime First Pre-Board Examination Business Law & Taxation MUTLIPLE CHOICE – MARK FULLY with Pencil No. 2 the letter of your choice on the answer sheet provided. Make the mark DARK but do not use too much pressure. ERASURES are STRICTLY NOT ALLOWED. 1. On February 12, 2010, A sold his only dog to B for P20,000. The parties agreed that B will pay one day after the results of the May 2010 CPA Licensure Examination are released while A will deliver the dog on the day B pays. If the results were released on May 25, 2010 but the dog gave birth to a puppy on May 24, 2010, which of the following statements is correct? a. A is entitled to the puppy because the puppy was born before the obligation to deliver arises b. A is entitled to the puppy because of the principal that accessory follows the principal c. B is entitled to the puppy because the contract was perfected on February 12, 2010 d. B is entitled to the puppy because the puppy cannot be separated from the mother dog yet 2. A pointed a gun and threatened to kill B if B will not sign a promissory note which reads “I promise to pay A, P100,000”. Out of fear, B signed the note. It turned out that two days earlier, A’s obligation to B amounting to P100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct? a. Yes, because the promissory note is valid b. No, because the promissory note was signed only because there was intimidation c. Yes, provided B will agree d. No, because A’s obligation does not exist 3. A has two creditors, B and C, the obligation to B is P10,000 and to C is P12,000. Later, with the consent of A and B, W pays B P10,000. Now W and C are the creditors of A. Suppose A has only P12,000, which is correct? a. C should be preferred c. C and W should be paid proportionately b. W should be preferred d. A may choose whom to pay 4. In the following cases, the contract of sale with a right of repurchase shall be deemed an equitable mortgage, except when a. The vendor remains in possession of the object b. The vendee retains a portion of the price

c. The price is inadequate d. The parties renew the instrument after the expiration of the period to repurchase 5. A owes B P100,000 secured by a mortgage. C, girlfriend of A, and with no interest at all in the obligation, paid B the P100,000 without the knowledge of A. Which of the following course of action is allowed? a. C can recover P100,000 from A b. C can foreclose the mortgage c. C is subrogated to the rights of B d. C is a person who is interested in the fulfillment of the obligation 6. A owes B, P1M. At maturity, A conveyed to B a parcel of land worth P20M. In turn, B indorsed and delivered to A the share of stocks of ABC Corporation worth P10M. In this case, the transaction is a. Barter c. Dation in payment b. Sale d. Partly sale, partly barter 7. A sold is car to B “ on sale or return within 10 days”. On the 7th day after delivery, the car was forcibly taken by the carnappers. In this case a. The contract of sale is terminated c. A bears the loss b. B must still pay the purchase price d. B can refuse to pay unless A delivers another car 8. In the following cases, the vendor is not obliged to make delivery after perfection of the contract of sale, except a. The vendee has not paid the price b. No period for payment has been fixed in the contract c. Vendee lost the right to make use of the period to pay d. A period for the payment has been fixed in the contract 9. Statement 1 – Chattel mortgage is a consensual contract and the creditor gets possession of the thing mortgaged Statement 2 – Pledge is a consensual contract and gives a personal right Statement 3 – Real estate mortgage is a real contract and creates a real right if registered with the Registry of Property Statement 4 – Antichresis is an accessory contract and gives a real right a. Only one statement is true c. Three statements are true b. Two statements are true d. All statements are false 10. Which of the following is not correct? a. A movable or immovable property maybe the object of commodatum b. The bailor in commodatum need not be the owner of the thing loaned c. A stipulation that the bailee may make use of the fruits of the thing loaned is valid d. The bailor is obliged to pay for the ordinary expenses for the use and preservation of the thing loaned 11. The following are obligations of the agent, except a. In the execution of the agency, the agent shall act in accordance with the instructions of the principal b. Shall be bound to advance the necessary funds, except when the principal is insolvent c. Shall finish the business already begun on the death of the principal, should delay entail any danger d. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until latter should appoint an agent.

12. To be valid and enforceable, the following contracts should be in writing, except: a. Contract to pay interest on loan b. Contract of donation of real property c. Contract giving authority to an agent to sell a piece of land d. Contract made in consideration of marriage 13. X borrowed money from Y. X constituted a real estate mortgage over his house to secure the loan. It was stipulated that in case X could not pay the loan on time, the would belong to Y. which is correct? a. Y shall become owner of the house upon default by x by virtue of their written agreement b. Y shall become owner of the house by virtue of the default of X c. Y shall only enjoy the right of alienation over the land d. Y shall be entitled to the right of appropriation of the land 14. The following are the same, except a. Mandante and principal b. Mandantorio and agent

c. Authority and power d. Cause and consideration

15. F sold and delivered to G on February 10, 2010 a cellphone for P30,000. It was agreed that G would pay the P30,000 at the end of the said month of February and that F shall remain the owner of the cellphone unit until the price has been fully paid. If before the end of the month, the phone is destroyed by a fortuitous event, which of the following is provided for by law? a. F shall bear the risk of loss c. The buyer and seller shall jointly bear the risk of loss b. G shall bear the risk of loss d. All the above are without basis in law 16. K and Q are siblings. They remain co-owners of a parcel of land which they inherited from their deceased parents. The land is adjoined by the lots of M in the north and B in the South. K sold his undivided half share of the inheritance to H. In this case, legal redemption shall be allowed in favor of a. Q b. M c. B d. All of the above proportionately 17. X, a bride to be, rented a car from Y Car Rentals to bring her to the church on February 14, 2010, her wedding day. The car and driver assigned were nowhere to be found on the scheduled day. Y Car Rentals incurs delay because a. The obligation or law expressly declares b. Time is of the essence c. The obligor has rendered it beyond his power to perform d. The date has been fixed by the parties 18. A, minor, sold the ring of his brother without authority. The ring has a fair market value of P1M and selling price was P600,000. The contract is a. Rescissible b. Voidable c. Unenforceable d. Void 19. Using the preceding number, the remedy is a. A can ask for annulment b. The brother can ask for annulment contract

c. The buyer can ask annulment d. The brother can just ignore the

20. Spouses H and W are under the regime of absolute community of property. H, through violence and intimidation obtained the signature of W to a contract of sale involving W’s exclusive property in favor of H. The fair market value of the property is P1M but the selling price is only P700,000. The sale is

a. Rescissible

b. Voidable

c. Unenforceable

d. Void

21. A owns a parcel of land which he sells to B with a 3 years redemption period. After the second year, A dies leaving his children C, D and E as his heirs. Which of the following is not correct? a. A can repurchase the whole thing, so anyone among C, D and E may repurchase the whole thing b. C can redeem his 1/3 share, D his 1/3 share and E his 1/3 share if B does not require all of them or anyone of them to redeem the whole property c. B may demand all of the co-heirs that they come an agreement upon repurchase of the whole thing sold d. B cannot be compelled the consent to partial redemption 22. A sold his car to B payable in ten equal monthly installments and with a mortgage constituted on the same property. For B’s failure to pay a month’s installment, which statement is correct? a. A may foreclose the mortgage on B’s car but he has longer the right to recover the balance should it be sold for an amount lower than what he claims form B b. A may seek the cancellation of the sale made to B c. A may seek fulfillment of the obligation of B to pay the entire purchase price d. A may seek the cancellation of the sale and later on foreclose the mortgage should be find it impossible to collect from B 23. Which of the following is not a ground for annulment of contract? a. Incapacity to give consent c. Lesion b. Vitiated consent d. Minority 24. When the sale of a piece of land or any interest therein is through an agent, the authority of the agent may be a. In a public instrument c. Either in a public or private instrument b. In a private instrument d. Duly notarized 25. An agency cannot be revoked at will in the following cases, except when a. A bilateral contract depends upon it b. The agency is for a fixed term c. It is the means of fulfilling an obligation already constituted d. The authority is granted to a managing partner appointed through the contract of partnership 26. The vendor-de-retro shall be entitled to redeem the object of sale within a. Four years if no period is agreed upon b. Thirty days from notice of intention to repurchase c. Object must be in vendor’s possession d. The period agreed upon 27. Which of the following is a common requisite of the remedies of possessory lien and stoppage in transit a. Unreasonable delay in payment of the price b. Goods are in transit c. Object must be in vendor’s possession d. Insolvency of the buyer 28. A was obliged to pay B P1M on December 31, 2010. A paid B on December 31, 2009 believing that the obligation was already due and demandable. How much may A recover from B on March 31, 2011? a. Nothing

b. Legal interest for one year and three months c. P1M plus legal interest for one year d. Legal interest for one year 29. X and Y gave their consent to a contract of sale involving a property in Quezon City. In the mind of X, he is supposed to buy a Manila property which is also the same property in the mind of Y as vendor. In this case the proper remedy to cure the mistake is a. Annulment b. Rescission c. Reformation d. Ratification 30. One of the following vices of consent result to consent under duress a. Mistake b. Fraud c. Undue influence

d. Intimidation

31. The following contracts are qualified for reformation, except a. Onerous contract c. Renumeratory contract b. Gratuitous contract d. Consensual contract 32. Statement 1 - An offer becomes ineffective upon the death, civil interdiction, insanity and insolvency of the offerrer after the offeree’s conveyance of acceptance Statement 2 – Consent is manifested by the meeting of minds of the offer and the acceptance upon the object and cause of the contract a. Both statement are in accordance with the rule of law b. Statement 1 is in accordance with law but Statement 2 is against the provision of law c. Both statements are violative of the provisions of law d. Correct answer not given 33. X, Y and Z are W’s sons. Upon the death of W, the three sons found a last will and testament in the cabinet of W. The will showed disposition of a 30-hectare land, the only asset of W at the time of his death in favor of the following: X – 5 hectares; Y – 10 hectares and Z – 15 hectares. X felt discriminated with his share of only 5 hectares, which is correct? a. Reformation of the instrument in order to correct the disparity in the disposal of the property b. Annulment of the instrument is the proper remedy to correct the mistake c. Rescission is the proper remedy to correct the damage on the part of X d. The law does not allow any remedy in this case 34. W sustained serious head injury while silently reviewing inside a library at the ground floor of the university, resulting from a wild baseball throw by X to Y during a practice game. Both players were found negligent in the performance of their respective play. Which is correct? a. X and Y are liable jointly and severally c. X and Y have no liability b. The liabilities of X and Y are joint d. Only X is liable 35. A obtained an interest free loan of P50,000 from B evidenced by a promissory note payable six months after date. At maturity A called B by phone to ask for an extension of one month and offer to pay 20% interest on the loan. Enticed by the 20% interest, B agreed to the extension of maturity. Which is correct? a. The interest is a demandable interest by virtue of an agreement b. The interest is unenforceable c. The loan is valid but the interest is void d. The loan and interest are both demandable 36. A promised to deliver to B 100 sacks of palay from the former’s 2010 summer harvest. A failed to deliver what was promised due to floods which destroyed the crops before harvest season. Is the obligation extinguished? a. No, generic things does not perish

b. No, A can still raise the same from future crops c. Yes, the generic thing is delimited d. Yes, the contract is void due to non-existing object at the time of perfection of contract 37. D is obliged to give E, at E’s option, his Rolex watch, or his Cross ballpen or his diamond ring. The diamond ring was forcibly taken by a robber and the watch by a snatcher. After D lost the watch and the ring, the ballpen likewise could not be located despite diligent efforts to find the same. D could no longer remember where he kept the pen. Hence, D failed to deliver any of the three items he promised. Is the obligation of D to extinguished? a. No, E can demand the value of anyone of the three items since he has the right of choice b. No, E can demand the value of the last thing lost c. Yes, fortuitous loss extinguishes all the alternative obligations d. Yes, nothing remains practicable 38. X Company bought out a competitor, Y, with a stipulation that Y should thereafter not engaged in any business in the Philippines without the consent of X Company a. The stipulation is not valid because the parties as a rule have no absolute freedom to stipulation terms and conditions in a contract b. The stipulation is not valid because this is against public policy c. The stipulation is valid because it was mutually agreed upon d. The stipulation if ratified is valid 39. A promissory note reads “I promise to pay B, P100,000 on July 30, 2010. Sgd. A”. B transferred the note to C. Later, X stole the promissory note and transferred the note to Y who received the note in good faith. On maturity date, Y presented the note to A and demanded payment. A paid the note in good faith. In this case, a. A’s obligation is extinguished c. A’s obligation is not extinguished b. C cannot collect from A d. C can recover only either from X to Y 40. A bought a residential house and lot from B Realty for P2M giving a downpayment of P200,000 and promising to pay the balance of P1.8M in 15 years in monthly installments of P10,000. After paying 72 installments A defaulted in the payment of subsequent installments. Despite the grace period given, he was not able to make any further payments. Accordingly, B Realty cancelled the sale. How much cash surrender value is A entitled to receive? a. P552,000 b. P396,000 c. P462,000 d. P506,000 FINAL PREBOARD CPAR 1. A, B, and C are partners contributing services, P20,000 and P40,000 respectively. The distribution of the P80,000 net assets shall be: a. A- P20,000 B-P20,000 C-P40,000 b. A- P5,000 B-P25,000 C-P50,000 c. A-P32,000 B-P16,000 C-P32,000 d. A-P26,667 B-P26,667 C-P26,667 b 2. This is not a characteristic of pledge a. Bilateral b. Nominate c. Consensual d. Real 3. Statement 1- Shares of stock can be the object of pledge or mortgage Statement 2- Real estate mortgage is an accessory contract a. true, true b. false, false c. true, false d. false, true a

4. One or more but less than all the partners have no authority to perform the following except: a. Renounce a partnership claim b. Submit a partnership claim or liability to arbitration c. Convey partnership property in the ordinary course of partnership business d. Do any act which would make it impossible to carry on the ordinary business of the partnership c 5. A limited partnership has A, as general partner, B, as limited partner, and C, as an industrial partner contributing P50,000; P50,000 and services respectively. The partnership failed and after disposing all its assets to pay partnership debts there still remains a note payable in the sum of P30,000. Against whom can the creditor demand payment? a. A-P30,000 B-P0 C-P0 b. A-P15,000 B-P15,000 C-P0 c. A-P15,000 B-P0 C-P15,000 d. A-P10,000 B-P10,000 C-P10,000 c 6. Statement 1- Any stipulation authorizing the pledgee to appropriate the thing pledged is void and without effect. Statement 2- If after the auction sale, the thing pledged is not sold, the pledgee can appropriate the thing pledged. a. true, true b. false, false c. true, false d. false, true 7. A pledged his watch to B for P20,000. A failed to pay his obligation. B sold it at public auction for P18,000. Can B recover the deficiency? a. Yes, even without stipulation b. Yes, if there is stipulation c. No, even if there is stipulation d. No, only if there is stipulation c 8. Using the preceding number, if the sale is for P22,000, can A recover the excess? a. Yes, even without stipulation b. Yes, if there is stipulation c. No, even if there is stipulation d. No, only if there is stipulation b 9. A mortgaged his car to B for P200,000. A failed to pay his obligation. B sold it at public auction for P180,000. Can B recover the deficiency? a. Yes, even without stipulation b. Yes, only if there is a stipulation c. No, even if there is stipulation d. No, unless there is stipulation a 10. Using the preceding number, if the sale is for P220,000, can A recover the excess? a. Yes, even without stipulation b. Yes, only if there is stipulation c. No, even if there is stipulation d. No, unless there is stipulation a 11. A corporation is deemed dissolved a. Ceased operation for at least five years b. No commencement of business transactions within 2 years from issuance of certificate of incorporation c. A member of the board is convicted of an offense d. Majority of the members of the board are dead b

12. Which of the following corporate acts requires the approval of the majority of the outstanding capital stock or of the members of the private corporation a. To invest corporate funds in another corporation or business. b. To amend the articles of incorporation. c. To adopt by-laws d. To dissolve the corporation c 13. Except for one, every corporation whose character expires by its own limitation, or annulled by forfeiture or otherwise, or whose corporate existence for other purpose is terminated in any other manner shall nevertheless be continued as a body corporate for three years after the time when it would have been dissolved for the purpose of the following. The exception is a. Prosecuting and defending suits by or against it and enabling it to settle and close its affairs. b. To dispose and convey its property c. To distribute its assets d. Continuing the business for which it was established d 14. Which of the following is not correct? a. A partnership begins from the moment of the execution of the contract, unless it is otherwise stipulated. b. Persons who are prohibited from giving each other any donation or advantage cannot enter into universal partnership. c. A particular partnership has for its objects determinate things, their use or fruits, or a specific undertaking or the exercise of a profession or vocation. d. Articles of universal partnership entered into without specification of its nature, only constitute a universal partnership of all present property. d 15. Objects of pledge, except: a. Negotiable instruments b. Shares of stocks c. Pieces of jewelry d. Piece of land d 16. The following are the rules in case a managing partner collects a demandable debt from a person who also owes the partnership a demand debt, except a. The sum collected shall be applied to the partnership credit b. It shall be applied to the two credits in proportion to their amounts c. The sum shall be fully applied to the partnership credit, if the receipt given is for the account of the partnership d. The debtor has the right to have the payment applied in his debt to the partner if it should be more onerous to him a 17. The duty to make disclosure, where otherwise there would be a great and unfair inequality of bargaining position by the use of inside position as regards relation of directors to stockholders a. Special circumstances rule b. Trust fund theory c. Doctrine of corporate opportunity d. Incorporate theory a 18. Chattel mortgage as distinguished from pacto de retro sale a. A principal and independent contract b. The title and possession are transferred to the vendee c. Cannot appropriate to himself the property mortgaged, nor dispose of it d. Seller may exercise the right to repurchase

c 19. Mutuum as distinguished from commodatum a. Essentially gratuitous b. Loan for consumption c. Object is generally non-consummable d. Bailor retains the ownership of the thing loaned b 20. Not an essential requisite of pledge a. The thing pledged to be placed in the possession of the debtor or of a third person by common agreement b. It is constituted to secure the fulfillment of a principal obligation c. The pledgor is the absolute owner of the thing pledged d. The person constituting the pledge has the free disposal of the property a 21. A, B, C and D are partners. Their contributions are as follows: A-P50,000; B-P30,000; CP20,000; and D-services. The partnership incurred obligations to third persons, which the firm was unable to pay. After exhausting all the assets of the partnership, there is still an unpaid balance of P10,000. How much should each partner pay to the creditors? a. A-P5,000 B-P3,000 C-P2,000 D-P0 b. A-P2,500 B-P2,500 C-P2,500 D-P2,500 c. A-P4,000 B-P3,000 C-P2,000 D-P1,500 d. A-P4,000 B-P4,000 C-P2,000 D-P0 b 22. A, B and C, co-owners of a particular parcel of land, borrowed P75,000 from X and Y. The three (3) debtors signed a promissory note on January 10, 2006 promising to pay the creditors on or before April 3, 2006. In addition, the debtors constituted a mortgage on their property in favor of the creditors. On maturity date, X demanded payment. How much can X collect from C upon maturity of the obligations (creditors are solidary)? a. P50,000 as it represents the actual share of X in the credit. b. P25,000 as the obligation is presumed to be joint and the amount represents C’s share in the obligation. c. P75,000 based on the promissory note d. P75,000 because the nature of the obligation is solidary b 23. Using the preceding number, if C paid X his share in the obligations, can he, as co-owner of the property, seek a partial release of the mortgage constituted thereon? a. Yes, because C is answerable only for P25,000 b. Yes, because C’s obligation is already extinguished c. No, because mortgages are considered indivisible, payment in part shall not extinguish the obligation d. No, because the obligation is solidary, payment in part shall not extinguish the obligation secured by mortgage c 24. The following are considered elements of the contracts of pledge and mortgage. Which is the exception? a. The pledgor or mortgagor must have the free disposal of the thing pledged or mortgaged b. The pledgor or mortgagor must be the absolute owner of the thing pledged or mortgaged c. Both are accessory contracts d. The thing maybe appropriated if the debtor cannot pay d 25. P appointed A as his agent orally to sell his parcel of land for P20,000. ten days later, A sold the same property for P300,000 through a public instrument executed between him and B. What is the effect and status of sale between A and B?

a. The sale is valid because A was authorized and it was executed in a public instrument. b. The sale is unenforceable because the agent went beyond the scope of his authority for selling the land for a price higher than the price agreed upon. c. The sale is void because there was no valid appointment of A as agent of P. d. The sale can be ratified although the appointment of A was done orally because the sale between A and B was in a public instrument. c 26. Where a director by virtue of his office, acquired for himself opportunity which belongs to the corporation, thereby obtaining profits to the prejudice of such corporation, must account to the latter for all such profits by refunding the same, unless his act is ratified by a. A vote at a regular or special meeting by stockholders owning or representing a majority of the outstanding capital stock. b. A vote of the stockholders owning or representing at lease one-third of the outstanding capital stock c. A unanimous vote of all the stockholders of the corporation d. A vote of the stockholders owning or representing at least two-thirds of the outstanding capital stock d 27. When a borrower uses the thing for a purpose different from the intended, delays its return to the owner, receives the thing under appraisal, lends to third person or saves his property instead of the thing in cases of emergency, shall be liable even in cases of fortuitous events, because a. The nature of the obligation requires an assumption of risk. b. The parties have expressly stipulated on such liability. c. The debtor in delay. d. The law expressly so provides d 28. A distribution by a corporation of shares of stock held by it in another corporation is a. Case of declaration of stock dividend b. Situation equivalent to a sale of assets c. Situation equivalent to a merger or consolidation d. Property dividend or an actual distribution of corporate assets d 29. A delivered to B 10,000 pieces of Davao fabricated shell craft jewelry for the purpose of selling them at P1.00 each. Out of the proceeds of the expected sale, B is to receive a 10% commission. After 3 days, however, B sold all items at P1.50 each to C, but on 30-day credit. A compelled B to pay. Which is correct? a. B must pay P10,000 immediately b. B cannot be compelled to pay at all c. B must pay P15,000 immediately d. B must pay P5,000 immediately and P10,000 after 30 days a 30. In real estate mortgage, the mortgagor can sell the mortgaged property a. With the consent of the mortgagee in writing b. Even without the consent of the mortgagee c. Only with the consent of the mortgagee in writing or orally d. Only after paying his obligation to the mortgagee b 31. P wrote a letter authorizing A to sell his parcel of land situated in Boracay. A sold the land in writing to X but the agent (A) did not give the money to P. The sale of the land by A to X is a. Void, because the authority of A is not in public instrument. b. Unenforceable, because the authority of A is not in public instrument. c. Inexistent, because the authority of A is in private writing. d. Valid and enforceable

d 32. The negotiable character of an instrument is affected by a provision a. Authorizing the sale of collateral securities in case the instrument is not paid at maturity. b. Authorizing a confession of judgment if the instrument is not paid at maturity. c. Giving the marker an election to require something to be done in lieu of payment of money. d. Waiving the benefit of any law intended for the protection of the obligor. c 33. This is a negotiable instrument a. I promise to pay to bearer P10,000 Sgd. A b. Pay to B or order P10,000 Sgd. A c. I promise to pay B or order P10,000 in two installments. Sgd. A d. Pay to B or order P10,000, 30 days after the death of Y. Sgd. A a 34. This is not a negotiable instrument a. I promise to pay to the order of bearer P10,000. Sgd. A b. I promise to pay B or his agent P10,000. Sgd. A c. I promise to pay B or order US$1,000. Sgd. A d. I promise to pay to the order of B P10,000. Sgd. A b 35. Rules on construction where instrument is ambiguous, except a. If not dated, the date is considered to be the date of issuance. b. Where the signature is placed and is not clear in what capacity the person intended to sign, he is deemed an accommodation party c. Between printed and written provision, the written provisions prevail d. Instruments containing the words “I promise to pay” signed by two or more persons, such persons are deemed jointly and severally liable b 36. Which of the following is not negotiable? a. Pay to B or order P10,000. Sgd. A to C Accepted: For P5,000 only Sgd. C b. Pay to Jose P10,000. Sgd. Juan to Pedro Accepted: For P10,000 Sgd. Pedro c. Pay to Maria or bearer P10,000. Sgd. Jose to Juan and Pedro Accepted: If Maria passes the CPA Board Examination. Sgd. Juan d. Pay to the order of B P10,000 at 123 CM Recto Avenue, Manila. Sgd. A to C, J.P Rizal St. Makati Accepted: Payable at 123, JP Rizal St., Makati City. Sgd. C b 37. Where an indorsement is conditional, may the marker make payment although the condition has not been fulfilled? a. Yes, he may disregard the condition without incurring any liability. b. Yes, he may disregard the condition but he becomes liable if the endorsee fails to fulfill the condition c. No, the qualified indorsement becomes part of the contract d. No, the person who received payment will hold the proceeds subject to the right of the conditional indorser a 38. M issues a promissory note payable to P or bearer. Which of the following is not correct? a. If indorsed by P to A and A also indorsed it to B, B may negotiates the note to C by mere delivery b. If indorsed by P to A and A also indorses it to B, P is liable to A and B c. If indorsed by P to A and A also indorses it to B and B negotiates the note to C by delivery. A is liable to B and C

d. If P negotiates the note to A by delivery and A indorses it to B, B may negotiate the note to C by delivery. c 39. What indorsements are not necessary to the holder’s title? Answer 1- Any indorsements thereon, where the instrument is originally payable to bearer Answer 2- All indorsements subsequent to a qualified indorsement, where the instrument is originally payable to order a. true, true b. false, false c. true, false d. false, true c 40. Which of the following is not correct? a. Where the instrument is negotiated back to a prior party, all intervening indorsements are not necessary to the holder’s title b. Where the instrument is originally payable to order, the holder may not strike out the payee’s indorsement c. The indorser whose indorsement is struck out and all indorsers are thereby relieved from liability on the instrument d. The holder may at anytime strike out an indorsement which is not necessary to his title c 41. Which of the following is not summary remedy of the Government to enforce tax collection? a. Distraint c. Levy b. Civil Action d. Tax Lien b 42. Which of the following cases may not be compromise by the Bureau of Internal Revenue Commissioner? a. Delinquents accounts b. Cases under administrative protest c. Fraud cases d. Cases covered by pre-assessment notice c 43. A fifty (50%) percent surcharge shall be impose on: a. Failure to file any return and pay the tax due thereon. b. Failure of return with an internal officer other than those designated by law. c. Willful neglect to file a tax return as prescribed by law. d. Failure to pay deficiency tax within the prescribed period required by law. c 44. The legal interest rate for tax delinquency is? a. Six (6% percent. b. Eight (8%) percent. c. Twelve (12%) percent. d. Twenty (20%) percent. d 45. Which of the following is not a requisite of tax regulations (BIR revenue regulations): a. It must be reasonable and germane to the purpose of the law. b. It must be within the authority conferred or under the color of valid title. c. It must be given retroactive application. d. It must be published. c 46. It is said that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for lack of the motive power to motivate active and operate. a. Lifeblood theory c. Benefit-protection theory b. Necessity theory d. Reciprocal theory a

47. The power to tax is exclusively lodged with the legislature, however, there are exceptions provided by the Constitution, which of the following is not: a. Authority of the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties and imposts b. Power of local government units to levy taxes, fees and charges. c. Delegation to administrative agencies for implementation and collection of taxes. d. Designation to private entities the enforcement and collection of taxes. d 48. Which of the following is the least Constitutional limitations? a. Due process clause c. Non-impairment clause b. Equal protection d. Progressivism clause 49. The following taxes, fees and charges are deemed to be national revenue taxes, except: a. Documentary stamp taxes b. Community taxes c. Excise taxes d. Income taxes b 50. Which of the following is not an authority of the Bureau of Internal Revenue Commissioner? a. Authority to administer oaths and to take testimony b. Authority to make arrests and seizures c. Authority to deputized members of the Armed Forces of the Philippines and members of the Philippine National Police to enforce tax laws d. Authority to assign or reassign internal revenue officers and employees of the BIR to other special duties connected with the enforcement or administration of the tax laws c 51. Which of the following is correct? a. A protest should be filed by the taxpayer, otherwise the assessment becomes final and no longer be questioned in court b. A protest may be filed by the taxpayer anytime before the BIR collects the tax c. The assessment should be made by the BIR collects the tax d. The assessment shall include only tax proper a 52. Which of the following statements is correct? a. A pre-assessment notice shall be required before an assessment may be made. b. The taxpayer shall be informed of the law and the facts on which the assessment is made, otherwise the assessment shall be void. c. The Commissioner may refund a tax even without a claim refund from the taxpayer where on the face of the return upon which the payment was made, such a payment clearly appears to have been erroneously made. d. A suit may be brought even after the lapse of two years from the date of payment, if any supervening cause arises after payment. a 53. The authorities of the BIR commissioner include the following, except: a. Compromise the payment of any internal revenue tax. b. Abate a tax liability c. Credit or refund tax that had been erroneously received d. Inquire into bank deposit d 54. The following are grounds to cancel a tax liability by the BIR commissioner, except a. The tax unjustly or excessively assessed b. The administration and collection costs involved do not justify the collection of the amount of tax c. A reasonable doubt as to the validity of the claim against the taxpayer

d. Illegal collection of tax d 55. Which of the following not a requisite to toll the collection of taxes to be made by the Bureau of Internal Revenue, upon proof of the following to the Court of Tax Appeals: a. It will jeopardize the interest of the taxpayer; b. It will jeopardize the interest of the Government; c. Filing of a bond double the amount of tax assessed; d. The case is not dilatory. c 56. Transitional Input Tax Rate is: a. 1.5% b. 8% c. 10% d. 2% d 57. One of the following is not an ordinary deduction for purposes of Net Taxable Estate. a. Funeral expense b. Medical expense c. Judicial expense d. Taxes b 58. The following person’s signature must appear in the corporations income tax return, except: a. President c. Treasurer b. Vice President d. External Auditor d 59. Deduction for funeral expenses shall be allowed, except: a. Only if paid out of the estate b. For a non-resident alien limited to amount that was actually incurred in the Philippines c. Shall in no case to exceed 5% of the gross estate d. Shall in no case to exceed P200,000 b 60. Which of the following is deductible from the gross estate? a. Income tax paid on income received after death b. Property taxes not accrued prior to death c. Estate tax paid to a foreign country d. Donor’s tax accrued prior to death d 61. Which one is incorrect? Losses are deductible if: a. Arising from natural calamity or fortuitous event b. Not compensated by insurance c. A property included in the Philippine gross estate d. Incurred during the settlement of the estate c 62. Deductions from gross estates for transfers for public purposes, except a. Means legacy in a last will and testament to the government b. Means device in the last will to the government c. Include any kind of transfer in favor of the government d. Do not include legacies to charitable institutions c 63. Which of the following is not an attribute of characteristic of taxes? a. A tax is a forced charge b. It is payable in money c. It is progressive d. It is levied for public purposes c 64. Importance of taxes is: a. It is the lifeblood of the Government b. It is personal to the taxpayer c. It is a revenue measure d. It is for public purpose a

65. Which of the following is not a nature of taxing power? a. It is an attribute of the sovereignty. b. It is inherent in the state. c. It is exclusively exercised by legislature. d. It is plenary, comprehensive and unlimited. c 66. Taxes proceed upon the theory that the existence of the government is a necessity; it cannot continue without the means to pay its expenses; and for those means, it has the right to compel all citizens and property within its limits to contribute a. Benefit- Protection Theory c. Lifeblood Theory b. Necessity Theory d. Territoriality Theory b 67. Which of the following will not interrupt the running of the prescriptive period for assessment and collection of taxes: a. When the Commissioner is prohibited from making the assessment or beginning distrait and levy or a proceeding in court and for thirty (30) days thereafter. b. When the taxpayer requests for the reinvestigation which is granted by the Commissioner. c. When the taxpayer is out of the Philippines. d. When the taxpayer cannot be located in the address given by him in the return. a 68. Which of the following are not deputized agents for the collection of national internal revenue taxes? a. The Commissioner of Customs and his subordinates with respect to the collection of national internal revenue taxes on imported articles. b. The head of the appropriate government office and his subordinates with respect to the collection of energy tax. c. Banks duly accredited by the Commissioner with respect to receipt of payments of internal revenue taxes authorized to be made through banks. d. Any officer or employee of an authorized agent bank assigned to transmit tax returns. d 69. Occupying the forefront of tax law enforcement is the: a. Department of Finance c. Legislative Department b. Bureau of Internal Revenue d. Executive Department b 70. The powers and duties of the Bureau of Internal Revenue comprehend the following, except? a. Assessment and collection of all national and local revenue taxes. b. Enforcement of all forfeitures, penalties and fines in connection connected with the collection of national internal revenue taxes. c. Execution of judgment in all cases decided in its favor by the Court of Appeals, and the ordinary courts. d. Effecting and administering the supervisory and police powers conferred to it by the Tax Code or other laws. a 71. The power to interpret the provisions of the Tax Code and other tax laws shall be under the exclusive and original jurisdiction of the: a. The Commissioner of the BIR b. The Secretary of Finance c. The Court of Tax Appeals d. The Regular Courts a

72. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the Tax Code or other laws administered by the Bureau of Internal Revenue is vested with: a. The Commissioner of the BIR b. The Secretary of Finance c. The Court of Tax Appeals d. The Regular Courts a 73. It is the official action of an administrative officer in determining the amount of tax due from a taxpayer, or it may be a notice to the effect that the amount stated therein is due from the taxpayer with a demand fro payment of the tax or deficiency stated therein. a. Tax investigation b. Tax audit c. Tax assessments d. Tax mapping c 74. To escape a liability for a deficiency estate tax, after paying the estate tax, must secure a written discharge of personal liability from: a. The heirs b. The commissioner c. The probate court d. The court where the estate is being settled b 75. When an estate is settled extra-judicially, the estate tax return may be filed and paid: a. By any of the heirs, with the right of reimbursement from the other heirs b. Only by the heir with written authority from the other heirs c. By each of the heirs, the payment being for his distributive share in the estate tax d. None of the above 76. For a finding a fraudulent return by the BIR to prosper: Statement No. 1: Fraud must be intentional, consisting of deception willfully and deliberately done or resorted to in order to avoid payment of the tax. Statement No. 2: Fraud cannot be presumed but must be proved. Fraudulent intent can not be deducted from mistakes however frequent they may be, especially if, such mistakes emanate from erroneous classification of items in accounting methods utilized for determination of tax liabilities. a. True; False b. True; True c. False; True d. False; False b 77. Net capital loss carryover will not be claimed by, except: a. Individual taxpayers b. Estate taxpayers c. Trust taxpayers d. Corporate taxpayers d 78. Decedent who is married with a surviving spouse and one legitimate child and two illegitimate children. Left the following properties. Real properties P3,000,000 Family home 1,000,000 Other real property (exclusive) 2,000,000 Family lot (exclusive) 400,000 Funeral expenses 300,000 Taxes and losses 1,300,000

Medical expenses

1,000,000

What is the total net taxable estate? a. P1,250,000 b. P2,250,000 c. P1,150,000 d. P2,450,000 79. The following are the reasons which necessitates the filing of an administrative claim for refund with the BIR, except: a. To afford the Commissioner an opportunity to consider the claim. b. To give the Commissioner a chance to correct the errors of subordinate officers. c. To notify the Government that such taxes have been questioned and the notice should be borne in mind in estimating the revenue available for expenditures. d. To give ample time to the Commissioner in preparing the cash to be disbursed for the taxpayer’s refund. 80. 1st Statement: A resident corporation is allowed to deduct depreciation expense regardless of the property’s location. 2nd Statement: A private educational institution may at its option elect either to deduct capital expenditures during the taxable year or to deduct allowable for depreciation thereof. a. True; False b. True; True c. False; True d. False; False end 1.As a rule, this contract of sale involving a piece of land is void, A. B. C. D. 2.

Between a minor and a capacitated person. Between two insane persons who did not act during lucid interval Between first degree cousins Between husband and wife

X, 17 years old, sold to Z, of legal age, her necklace worth P20,000 for P15,000. Later, Z sold the necklace to Y for P20,000. Which of the following statements is correct? A. X has got a voidable title because at the time of sale, she is a minor B. X can ask for rescission of the sale to Y because she suffered a lesion of more than ¼ of the value of the property. C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his title is voidable. D. X can ask for the annulment of the sale to Y because at the time of sale she is a minor.

3. This serves as a proof of the perfection of the contract of sale A. B. C. D.

Dacion en pago Option money Delivery Arras

4.A contract of sale is not a(an)

A. B. C. D.

Onerous contract Accessory contract Commutative contract Bilateral contract

5.Warranty against hidden defects is A. B. C. D.

An essential element A natural element An accidental element An artificial element

7. When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall be in writing, otherwise the sale is A. B. C. D.

Valid Voidable Unenforceable Void

8. The sale of an expected thing A. B. C. D.

Dacion en pago Payment by cession Emptiospei Emptio rei-speratae

9. The sale of the hope itself A. B. C. D.

Dacion en pago Payment by cession Emptio spei Emptio rei-speratae

10. One of the following is not correct A. Things subject to a resolutory condition may be the object of the contract of sale. B. A thing is generic when it is particularly designated or physically segregated from all others of the same class. C. Things having a potential existence may be the object of the contract of sale. D. The sole owner of a thing may sell an undivided interest therein 11. X needs a size of 10 of model 101 of Leather Shoes regularly available to the public for her boyfriend Z, but the same is out of stock so she placed an order for one. On the other hand, Z placed an order for size No. 8, colored violet, (something not ordinarily made by the company) to be given to X. Which is correct? A. B. C. D.

Both are contracts of sale Both are contracts for a piece of work First is a contract of sale second is a contract for a piece of work First is a contract for a piece of work, second is a contract of sale

12. V offered to sell for P12,000,000 her house and lot to DD who was interested in buying the same. In her letter to DD, V stated that she is giving DD a period of one month within which to raise the amount and that as soon as DD is ready, they will sign the deed of sale. Five days before the expiration of the one month period. V went to DD and told her that she is no longer willing to sell the property unless the price in increased to P15,000,000. Which is correct? A. B. C. D.

DD may compel V to accept the P12,000,000 first offered. V may compel DD to pay P15,000,000 V and DD should shoulder the P3,000,000 difference DD cannot compel V to accept the P12,000,000 first offered

13. If the object of the contract is specially made or manufactured at the specific order of another, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

14. If the article already exists and subsequently acquired by another, it is a contract of sale, and if the article is still to be manufactured at the instance of another, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

15. If the material used in the manufacturer of the article is more valuable, it is a contract of sale, and if the labor or skill is more valuable than the material used in the manufacture of the article, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

16. The rule observed in the Philippines is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

17. The Realty Installment Buyer Protection Act applies to all transactions involving the sale or financing of real estate on installment but it excludes the following except: A. Sale or financing of industrial lots B. Sale or financing of commercial building C. Sale to tenants under the Land Reform Code

D. Sale of residential condominiums 18. Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the sale is A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

19. Effected when the object of sale is already in the possession of the vendee at the time of sale so that delivery need no longer be made is A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

20. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the thing not as owner but as tenant or lessee A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

21. Goods are deemed in transit A. When the buyer accepts delivery of the goods upon arrival at destination B. When the buyer intercepts and lawfully takes possession of the goods at any point before destination. C. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the buyer, up to the time that the buyer or his agent takes delivery of the goods from the carrier or bailee. D. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his agent that he is holding the goods as bailee for the latter. 22. Goods are deemed no longer in transit A. If the goods are rejected by the buyer for a valid reason and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back. B. From the time they are delivered to a carrier by land, water or air for the purpose of transmission to the buyer. C. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer or his agent in that behalf, takes delivery of them from such bailee. D. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf. 23. X sold to V orally a parcel of land for P200,000. X effected the delivery of the land. The payment of the price was to be made three month later. At the end of three month period

A. B. C. D.

V may refuse to pay claiming in his defense the Statute of Frauds V may return the parcel of land to X X can collect from V because the contract has already been executed V may refuse to pay on the ground that there is no written contract to support the sale.

24. On January 15, 2010, X sold for P2M her house and lot to V. It was agreed that delivery of the house and lot, and the payment therefore, would be made on March 10, 2010. Unfortunately, Z a stranger negligently set the house on fire on February 25, 2010, and the house was completely destroyed. Which is correct? A. V is not required to pay the P2M since the contract had no subject matter. B. X must still deliver the lot but is excused from delivering the house, while V must still pay the P2M C. X must deliver the lot while V should pay only the amount equivalent to the value of the lot. D. X need not deliver the lot while V need not pay the P2M 25. If immovable property should have been sold to different vendees, the ownership shall be transferred to the person A. B. C. D.

Who have first taken possession in good faith Who presents the oldest title in good faith Who in good faith first recorded it in the Registry of Property Who have paid in good faith the purchase price in full

26. Using the preceding number, if movable property, it shall belong to the person A. B. C. D.

Who have paid in good the purchase price in full Who in good faith first recorded it in the Registry of Property Who presents the oldest title in good faith Who have first taken possession in good faith

27. Action by the vendee against the vendor to nullify the sale due to some vices or defects which render the object of sale unfit for the use intended or knowledge of which the vendee should not have bought the thing A. B. C. D.

Accion quanti minoris Accion reinvidicatoria Accion pauliana Redhibilitory action

28. Action to seek a corresponding reduction in price by reason of some vices or defects in the thing purchased A. B. C. D.

Accion quanti minoris Accion reinvidicatoria Accion pauliana Redhibilitory action

29. The redhibitory action based on the faults or defects of animals must be brought within

A. B. C. D.

30 days from delivery to the vendee 40 days from delivery to the vendee 45 days from delivery to the vendee 6 months from delivery to the vendee

30. In contract of sale, if the price is absolutely simulated, the sale is A. B. C. D.

Unenforceable Voidable Void Rescissible

31. In a contract of sale, of personal property, the price of which is payable in installments, the vendor may exercise any of the following remedies, except A. Exact fulfillment of the obligation, should the vendee fail to pay any installment B. Cancel the sale, should the vendee’s failure to pay cover two or more installment C. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure to pay cover two or more installments D. Rescind the sale should the vendee fail to pay any installment. 32. The right of the seller to stop goods in transit, upon discovering that the buyer does not have the funds to pay for the goods A. B. C. D.

Pre-emptive right Appraisal right Voting right Right of stoppage in transit

33. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale written in the Bicolano dialect. One week later, A sold the same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the first sale immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to A. B. C. D.

B because he has got an older title C because he is the first to register C because he is the first to take possession No one as both sales are void

34. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is liable to the value of the thing at the time of eviction. A. B. C. D.

Waiver intentionada Waiver consciente Waiver cursunada Waiver inocente

35. Using the preceding number, where the seller is no longer liable A. B. C. D.

Waiver intentionada Waiver consciente Waiver cursunada Waiver inocente

36. A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the sale from the buyer within a certain period agreed upon A. B. C. D.

Equitable mortgage Absolute sale On sale or return Pacto de retro sale

37. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the same car to C and immediately affected delivery. On the day agreed upon, A did not deliver the car to B. Which is correct? A. B can cancel the contract between A and C, because the contract between A and B was perfected ahead of the contract between A and c B. B should make the demand to make A in default C. A is liable to B for the value of the car plus damages after B makes a demand D. A is liable to B for damages and is in default without need of any demand 38. X sold to V her Yamaha organ. It was agreed that X would fix the price a week later. At the agreed time, X named the price P10,000. V agreed. Was the sale perfected? A. B. C. D.

No, because the price was left to the discretion of one of the contracting parties No, because at the time of sale the price was not fixed Yes, because the price fixed by one of the parties was accepted by the other Yes, because there was agreement that X would fix the price

39. Not an implied warranty in a contract of sale A. B. C. D.

Right to sell the thing at the time of perfection of the contract Reasonably fit for the purpose they are acquired Merchantable in quality Free from charges or encumbrances not declared or known to the buyer

40. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to B for a consideration of P1,000,000. Which is correct? A. The contract is valid if the value of inheritance is at least equal to P1,000,000 B. The contract is valid even though the inheritance to be turned over to B is less than P1M C. The contract is void as future inheritance cannot be the object of sale D. The contract is unenforceable 41. X stole a fountain pen from P and sold it to Z Merchandise, a “store for pens”, which paid for it in good faith, not knowing it was stolen. The “store” then sold it to C, a student.Which is

correct? A. C cannot be considered as the owner because the original seller (X) is not the real owner. B. P may recover the fountain pen from C without reimbursement because he is the legal owner. C. C became the owner because he purchased the pen from a merchant store D. C became the owner regardless of whether the seller is a store for pens or not because C bought it in good faith. 42. When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the goods passes to the buyer A. B. C. D.

Upon perfection of the contract Upon acceptance by the buyer of the offer of the seller Upon expiration of seven days Upon delivery of the goods

43. Quasi-traditio is equivalent to A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Execution of a public instrument

44. Vi imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labeled 220 volts and Vi sold them to the public as such. Later the customer complained that the radios have been mislabeled by the manufacturer and that they were good only for 110 volts. As a consequence A. B. C. D.

Vi is liable to the vendees for any hidden defects even though he is not aware. Vi is not liable because he is in good faith Vi is not liable under the principle of “caveat emptor” or let the buyer beware The vendees may hold the manufacturer liable but not Vi because Vi specifically asked for 220 volts

45. If the redemption is to be made by the seller, one of the following need not be given to the Buyer A. B. C. D.

Expenses of the contract Interest on the price of the sale Necessary expenses on the thing sold Price of the sale

46. Not an element of the sellers right of stoppage in transit A. B. C. D.

The goods must be in transit The buyer must be insolvent The seller must be in possession of the goods The seller must be unpaid

47. A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the

car to B and the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in the possession of B through fortuitous event and without B’s fault, before full payment of the balance. Is B obliged to pay the balance? A. No, because the car was lost through fortuitous event and without B’s fault, hence B’s obligation is extinguished. B. No, because the loss should be borne by the seller as this an installment sale so until the buyer pays the full amount of the price of the sale, A remains to be the owner. C. Yes, but A must give another car to B because of the principle “genus nunquam peruit” or generic thing never perishes D. Yes, because the principle “res perit domino” or the thing perishes with the owner. 48. A, B and C are co-owners of an undivided parcel of land, A sold his 1/ 3 interest to B absolutely. Which is correct? A. C may exercise his right of redemption of the interest sold by A to B B. C cannot exercise the right of redemption because the sale was made in favor of a co-owner C. The sale made by A to B is void because it was not made in favor of a stranger D. C may redeem only 1 /2 of the interest sold by A to B 49. Using the preceding number, suppose, instead of selling his interest to B, A sold it to D, who can exercise the right of redemption? A. B. C. D.

Both B and C B but not C C but not B A, B and C

50. Which of the following cannot be the object of a contract of sale? A. B. C. D.

Sale of credit Young animal not yet conceived at the time of perfection Land which the seller expects to buy Future inheritance

51. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price offered at Z’s store in Cainta Market. The price is A. B. C. D.

Not certain because the price at Cainta Market is not stated Certain because it has got reference to another thing which is certain Certain because there is a price ceiling for price of land Not certain so court may fix the price

52. X sold his motor vehicle to V who bought it for P200,000. It turned out however, that X has 2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct? A. B. C. D.

There is no contract of sale between X and V The parties may ask for interpretation or reformation The parties can ask for annulment of the contract V may choose between the Toyota or Lancer

53. X offers to V 100 electric fans for P80,000 payable in 60 days with 12 % interest per annum. V accepted the offer by telegram provided that interest is reduced to 6%. If there is no further communication between X and V relating to the terms A. B. C. D.

The contract is perfected because of the acceptance by V There is no contract yet between X and V because V made a counter offer The contract is perfected under the terms of X There is no contract yet unless v gives earnest money

54. X owns 50 mango trees bearing fruits, ready for harvest. She told all the fruits of all the trees to V who paid P100,000. X told V that he can harvest her fruits anytime he likes and pointing at the mango trees. For legal purposes, X has fulfilled her obligation to deliver the mango fruits to V by A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Execution of a public instrument

55. X sold her specific car to V for P200,00 payable in 5 equal installments. X delivered the car to V but a mortgage was constituted on the car to answer for the unpaid installments. V paid the first 2 installments but failed to pay the last 3 installments. X foreclosed the mortgaged property and sold it at public auction for P100,000. Which is correct? A. X can recover from V the balance of P20,000 even if there is no stipulation to that effect B. X can recover from V the balance of P20,000 if there is stipulation to that effect C. X cannot recover the deficiency except if there is stipulation to that effect D. X cannot recover the deficiency even if there is stipulation to the contrary 56. Ownership of the thing sold is A. B. C. D.

Retained by the seller in “sale or return Transferred to the buyer upon constructive or actual delivery of the thing sold Acquired by the buyer upon perfection of the contract Transferred to the buyer upon acceptance of the price

57. X sold his horse to Y for P40,000. No payment has yet been made and the sales document does not provide the date of delivery. Before delivery and payment the horse gave birth to a baby horse, which is correct? A. Y is entitled to the baby horse which was born after the perfection of the contract B. X is entitled to the fruit (baby horse) as Y has not paid the price yet C. X is entitled to the (baby horse) because it was born before his obligation to deliver arises D. Y should pay additional amount for the baby horse to be entitled to it 58. A contract of sale is in the stage of conception when A. There is meeting of the minds

B. Negotiations are in progress C. The parties come to an agreement D. The contract is perfect 59. A seller sold to a buyer a piece of jewelry at a price of P25,000. The contract provides that the buyer will pay the seller cash, P20,000 and for the balance, the buyer will give the seller a micro oven worth P5,000. What is the nature of the contract? A. B. C. D.

Sale Partly sale partly barter Barter Commodatum

60. X, the guardian of V, sold V’s house and lot worth P480,0000 for P430,000 A. The contract can be rescinded because of inadequacy of price B. The contract cannot be rescinded because there is no fraud, mistake or undue influence C. The contract cannot be rescinded because all the elements of a contract are present D. The contract can be rescinded by X. 61. X leased to V a 5 Freezer for two years at a lease rental fee of P1,000 per month and signed an option in favor of V to buy the freezers at the end of the term of the lease at P50,000. All rental fee paid are to be considered as partial payment of the sale. After 12 months V was able to pay the rental fee for 9 months and was in arrears for three months. X terminated the lease contract and repossessed the freezers. The consequence of the transaction is A. B. C. D.

X can collect the rental fees for three months which are in arrears. X can collect the rental fees for the unexpired 12 months of the lease contract. When X took possession of the generator, he has no further action against V X in terminating the lease and repossessing the generator is obliged to refund the 9 months rental fee, paid by V even if there is a stipulation to the contrary.

62. X sold his car to Z for P60,000. No date was fixed for the performance of the obligation of the seller and the buyer. The obligation of X is A. B. C. D.

To deliver the car immediately because the sale is a perfected contract To deliver the car only after Z writes to X demanding the delivery of the car. To deliver the car only after Z pays the P60,000 To rescind the contract because there is no time fixed for the delivery

63. I. The vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the owner at the time the thing sold is delivered. II. The sale of a vain hope or expectancy is voidable. A. First statement is true, second statement is false. B. First statement is false, second statement is true.

C. Both statements are true. D. Both statements are false 64. I. There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. II. If the consideration of the contract consists partly in money and partly in another thing, it shall be considered a barter if the value of the thing given as a part of the consideration exceeds the amount of the money or its equivalent. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

65. I. If the price is grossly inadequate, the sale is void. II. Whenever option money is given in a contract of sale, it shall be considered as part of the price and a proof of the perfection of the contract. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

66. I. Earnest money and option money both apply to perfected sale. II. In a contract of sale of personal property the price of which is payable in installment, the vendor may cancel the sale should the vendee fail to pay. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

67. I. Should the vendee’s failure to pay, cover two or more installments, the vendor may foreclose the chattel mortgage on the thing sold but he shall have no further action against the purchaser to recover any unpaid balance of the price, except if there is an agreement to the contrary. II. Sale is a consensual contract, therefore delivery or payment is not essential for perfection. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

68. I. The ownership of the thing sold shall be transferred to the vendee upon perfection of the contract. II. An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissory. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

69. I. The husband and the wife cannot sell property to each other, as a rule. II. The sale of a piece of land or interest therein when made thru an agent is void unless the agent’s authority is in writing even if the sale itself is in s public instrument and has been registered. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

70. I. The expenses for the execution and registration of the sale shall be borne by the vendee, unless there is a stipulation to the contrary. II. If the same thing should have been sold to different vendees the ownership shall be transferred to the person who may have taken possession thereof in good faith. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

71. I. Any stipulation exempting the vendor from the obligation to answer for eviction shall be void. II. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold only if he was aware thereof. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

72. I. If the animal sold should die within three (3) days after its purchase, the vendor shall be liable to the vendee. II. The fixing of the price can never be left to the discretion on one of the contracting parties.

However, if the price fixed by one of the parties is accepted by the other, the sale is perfected. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

73. I. Option money is considered as part of the purchase price while earnest money is not. II. The Maceda Law refers to the sale of personal property by installments while the Recto Law refers to the sale of real property by installments. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

74. I. If two or more animals are sold together, whether for lump sum or for a separate price for each of them, the redhibitory defect of one shall give rise to the redhibition of the others. II. There is no warranty against hidden defects of animals sold at fairs or at public auctions or of livestock sold as condemned. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

75. I. The ownership in the thing shall not pass to the purchaser until he has fully paid the price. II. If at the time the contract of sale is perfected, the thing which is the object of the contract has been partially lost, the contract shall be without effect. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

76. I. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods. II. If the vendee has renounced the right to warranty in case of eviction, and eviction should take place, the vendor shall only pay the value which the thing sold had at the time of sale. A. First statement is true, second statement is false. B. First statement is false, second statement is true.

C. Both statements are true. D. Both statements are false 77. I. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installment. II. In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a sale with a right to repurchase. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

78. I. The creditors of the vendor cannot make use of the right of redemption against the vendee, until they have exhausted the property of the vendor. II. Sale is a real contract because delivery is necessary to transfer ownership to the buyer. A. First statement is true, second statement is false. B. First statement is false, second statement is true. C. Both statements are true. Both statements are false