BUSINESS LAW 8.

The following instances of pledge created by operation of law except

QUEZ- AGENCY, PLEDGE AND MORTGAGE: a. hotelkeeper retains the things into the hotel by the guest who cannot pay his hotel bill
b. an agent retains in pledge the thing which is the object of the agency until he is paid his commission
1. One know to be working for and behalf of the principal either because the latter represented him to be his c. a mechanic retains the car he repaired until he is paid
agent or the d. a depository retains the thing in pledge until full payment of what is due him
people believe him to be acting on behalf of the principal is;
a. ostensible agent c. special agent 9. A pledged his wristwatch to B pawnshop for a loan of P.1M. Due to As failure to pay his debt, B auctioned the
b. implied agent d. universal agent watch and
was sold to C for P1.5M. Can A recover the excess?
2. Chattel mortgage as distinguished from pledge: a. a cannot recover the excess even if so stipulated by the parties
a. the excess over the amount due after foreclosure goes to the debtor b. a can recover the excess if so agreed upon by the parties
b. the sale of the object in an auction extinguishes the obligation c. a can recover the excess even if not so stipulated
c. the delivery of personal property is necessary d. a stipulation allowing the excess to go to the pledgor is void
d. the registration of the property in the Registry of Property is not necessary
10. In pledged created by operation of law, after payment of the dent and expenses, the remainder of the price
3. The following are essential requisites common to pledge and mortgage except one: of the
a. they are constituted to secure the fulfillment of a principal obligation sale in auction shall be delivered to the obligor, pledgor being entitled to the excess
b. the pledgor or mortgagor is the absolute owner of the thing pledged or mortgaged
c. the contract of pledge or mortgage is registered with the Register of deeds If a credit which has been pledged becomes due before it is redeemed, the pledgee may collect and receive
d. the person constituting the pledge or mortgage has the free disposal of the thing or he is legally the amount
authorized due and apply the same to the payment of his claim with the excess going to the pledgor
for the purpose a. both statements are true c. first is false, second is true
b. both are false
4. In all cases of extra judicial foreclosure, the right of redemption can be exercised by the mortgagor within
one
11. This is a mode of extinguishing an agency
year from and after the juridical registration of sale.

a. death of the principal, but agency is for the interest of the principal and agent
In judicial foreclosure, the mortgagor may still exercise his equity of redemption after the confirmation of b. partial accomplishment of the agency
the sale c. upon with the withdrawal of the principal
by the court d. insanity of the principal or agent
a. both statements are true c. first is false, second is true
b. both are false d. first is true, second is false 12. P appointed A to sell Ps car for P1M cash. A said the same in installment but in her named. After delivery,
the delivery buyer discovered a hidden defect in the car which sold as brand new. Is P liable to the buyer even
5. A pledged his Toyota car to B for a loan of P1M. A was unable to pay the loan and therefore B sold the car in if A acted without
a public to sell on credit and in her name and not in the name of P?
auction but it was sold only for P.5M .Can recover the deficiency from A? a. no under caveat emptor or let the buyer beware
a. no he cannot recover the deficiency in the absence of contrary stipulation b. no because a acted in her name as if she was the owner of the car
b. no he cannot even if there is an agreement that he can c. yes because the contract involves a thing belonging to the principal P.
c. yes he can even in the absence of stipulation allowing him d. no because there was stipulation on the warranty against hidden defect
d. yes he can provided it was agreed upon by the parties
13. P authorized A to sell his car for P1M with 5% commission. A sold the car to B for P1.5M. For how much is A
6. If the agent contracts in the name of the principal and the principal does not ratify the contract, the contract accountable to P?
shall a. P1M b. P1.5M c. P9.5M d. 1.25M
be void if the party with whom the agents contracts is aware of the limits of the agents authority
14. A pledge his Rolex watch to B for a loan of P.2M. Due to the failure of A to redeem the security, B sold the
A third person cannot set up the fact that the agent exceeds his authority if the principal has ratified or has same at public
signified his willingness to ratify the agents acts auction for P1.5M to the highest bidder.
a. both statements are true c. first is false, second is true a. b can recover the deficiency of P.05M From A
b. both are false d. second is false, first is true b. b can recover the deficiency from A if so stipulated
c. b can recover the deficiency if there is no contrary agreement
7. A pledged his wristwatch to B pawnshop for a loan of 7,000 which he failed to pay. B sold the watch at public d. b cannot recover the deficiency even if there is stipulation
auction for 4,000
a. the pawnshop b can recover the 4,000 deficiency from a 15. The difference between a chattel mortgage and pledge is that in chattel mortgage:
b. it cannot recover the deficiency from a unless there is stipulation to the contrary a. the delivery of the personal property is necessary
c. it cannot recover the deficiency even if there is stipulation allowing it b. the registration of the contract with the Register of Deeds needed
d. it cannot recover the deficiency if there is stipulation disallowing it c. the excess over amount due after foreclosure sale goes to debtor
d. the debtor is not liable for the deficiency after foreclosure
 a. Pledge c. Real mortgage
16. P appointed A to manage his business before leaving abroad .While abroad A wrote P that he was b. Mortgage of chattel d. None of the above
withdrawing from the agency due to heath reasons and that he appointed B as his substitute and that P should
extend an appointment to B. 25. A constructed a building on a parcel of the land ha lease from B. He chattel the building to C. The building
B took over the administration but P did not make the necessary appointment from the latter. Decide the kind is concrete.
of agency a. No chattel mortgage because the building is real property.
a. implied agency c. express agency b. There is chattel mortgage as agreed upon by the parties.
b. Agency by necessity d. agency by estoppel c. No chattel mortgage unless it is registered with the Registry of Deed.
17. P authorized A to sell his car for P1M with 10% commission. A sold the same on reset for P1.1M. If P does d. No chattel mortgage because the building can never be considered movable despite agreement of parties.
not ratify this sale on credit, he can collect from A:
a. P9M (P1M less 10% commission) 26. P appointed A the exclusive agent in the sale of lots in its subdivision. P told A that he could not collect or
b. P1M, commission not deducted by A receive payments from the buyers. A was able to sell a lot to C and receive the payment of the latter which
c. P1.1M commission not deducted by A he was misappropriated. Who shall bear the loss?
d. P1M with no commission to A for his violation of contract a. P shall bear the loss because his order to A was not written in the power of attorney of A.
18. An agent may appoint a substitute or sub-agent only if there is a stimulation allowing him to do so. b. P shall be liable for the loss even if c was aware of the limits of authority of A.
c. C shall be liable for the loss for his failure to inquire into the limits of authority of A.
The acts of the substitute appointed against the prohibition of the principal are voidable which the latter d. C is shall for the loss even through the instruction of P was oral.
may
ratify. 27. In 1982, D borrowed P.4M from C, collateralized by a pledge of shares of stock of X corporation worth P.8M
a. First statements is false, second is true, c. Both statements are false. In 1983, because of the economic crisis, the value of the shares pledged fell to only P.1M. Can C demand
b. First statement is true, second is false d. Both are true. that D surrenders the other shares worth P.7M?
a. Yes, because the collateral as security for the loan was worth P.8M and therefore the other shares of P.7M
19. The agent is responsible for the acts of a substitute which he appoints in the following instances. Which is must be delivered.
not include? b. No, because the only right of C is to sell the shares at the public auction and the proceeds as security for
a. When he was not given the power to appoint one; the loan.
b. When he was prohibited from appointing one; c. No, because the right of C is to demand immediate payment of the loan.
c. When he was given the power to appoint one, but without designating the person, and he appointed d. No, because the right of C is to demand thing worth P.8M.
incomplete
one in good faith; 28. P as principal appointed A as his agent granting him general and unlimited management over Ps
d. When the principal designated the person to be appointed; properties,
starting that P withholds no power from B and the latter may execute such acts a he may deem appropriate
20. X borrowed money from Y and gave a piece of land as security by way of mortgage. It was agreed between to carry-out agency. According, A lease Ps parcel of land in Manila to C for four years. A also sold to D
the parties another
that upon non-payment of the loan, the land would already belong to Y. If X failed to pay the debt, would Y parcel of land for three times the price that was listed in the inventory by P to A. Which is valid?
now become the a. The first (lease) contract is valid while the second (sale) is not.
owner of the land. b. Both are valid and binding on p.
a. Y would become the owner it was agreed upon by them base on the principle of autonomy of contracts. c. Both are not valid and binding on P.
b. Y would not become the owner because the agreement that he would become the owner upon default of d. The first is not valid while the second is valid and binding on P.
X is against
the law. 29. P authorized A in a special power of attorney to sell his parcel of land. A sold the land to C without having
c. Y would not become owner if X annuls the voidable agreement. knowledge that prior to sale to C, P had already been dead for a week. C also was not aware of the
d. Y would not become owner if X annuls the voidable agreement. extinguishment
of the agency by the principals death. Decide;
a. The sale is valid although the principal has died before the contract was entered into by the agent in the
22. The death of either the principal or agent extinguishes the agency. Therefore: name
A. If the principal dies, in certain cases, the agency remains in full force and effect. of the principal.
B. If it is the agent whos dies, the agency shall always be extinguished. b. The sale is valid but annullable by the heirs of the principal because the death of principal has
extinguished the
a. Both are true statements c. First is true, second is false agency.
b. Both are false d. First is false, second is true. c. The sale is void because the agent had no more authority to sell the land due to the principal death.
d. The sale is valid but unenforceable because of the agent acting without authority from his principal who
23. A special agency requires a special power of attorney. has
An agent may withdraw from the agency but may be liable for damages, if the principal is prejudiced. died.
a. Both are statement are false. c. First is true, second is false.
b. Both are true. d. First is false, second is true. 30. C lent to D P.1M. As security for the loan, D pledged his Rolex watch. When D failed to pay the loan, C
foreclose the
24. In the province, a farmer couple borrowed money from the local merchant. To guarantee payment, they pledge and the watch were sold only for P.08M. May C still claim payment of the deficiency from D?
left the Torrens Title of the land with the merchant, for him to hold until they pay the loan. It is:
 a. D is longer liable for the deficiency unless otherwise agreed. 37. If an agent acted in excess of authority in the name of the principal who does not ratify the contract and
b. D is not liable for the deficiency despite stipulation to the contrary. the third
c. D is still not liable for the deficiency even in the absence of agreement. person has knowledge of the excess of the authority, the contract is:
d. D is still liable if agreed upon. a.Rescissible b. Voidable c. unenforceable d. Void

31. In the preceding case, suppose it was a contract of mortgage, can still claim payment of the deficiency? 38. If an agent acted within the scope of his authority but in his own name, the contract is:
a. Yes, provided it was agreed upon. c. Yes, even in the absence of stipulation. a. Valid b. Voidable c. Void d.
b. No, unless there was stipulation. d. No, even if stipulated. Unenforceable

32. Still in the preceding case, suppose the watch was sold at a price greater than the amount of loan, who is 39. If both principal and agent sold the land of the principal to two buyers, which of the latter shall be owner.
entitled a. First registrant in good faith. c. Oldest title in good faith
to the excess? b. First possessor in good faith. d. Prior date contract.
If pledge:
a. C is entitled to the excess even in the absence of stipulation. 40. Without authority from P, A sold Ps car in As name .Contract is:
b. C is entitled if there is stipulation. a. Void b. Voidable c. Valid d. Unenforceable
c. D is entitled even if there is no stipulation.
d. D is not entitled even if there is no stipulation. 41. P appointed A, a minor, as his agent to contract with B. A in the name of P into the contract with B. The
agency is:
33. If chattel mortgage. a. Void b. Unenforceable c. Voidable d. Unenforceable
a. C is entitled to the excess to the unless there is a contrary stipulation.
b. D is entitled if so stipulated. 42. In the preceding number, suppose it is the principal who is minor, the contract with the third person B shall
c. C is entitle even in the absence of stipulation. be:
d. D is entitled even if not stipulated. a. Void b. Unenforceable c. Valid d. Voidable

34. A constituted in 1999 a real estate mortgage on his land and chattel mortgage on his car to secure the 43. P authorized A to sell his Rolex watch for P1M. A sold it for P.9M only. Which of the following statements is
payment incorrect?
of a debt of P.2m which he then owed to B. as other loans he may receive from him in the future. A paid his a. the sale is void
debt of P.2M but not the loan of P.03M which he obtained in 2000. Can A foreclose both mortgages for the b. the principal is not bound in the contract of sale with the buyer
P.03M? c. a is liable to P for damages for not following his instruction
loan obtained in 2000? d. the sale is valid
a. No, because the mortgagee can only foreclose one of the mortgages applying the Recto Law to prevent
collection 44. D mortgaged his land to C with the stipulation that the former cannot sell his land before he has paid his
of deficiency. loan to C
b. No, only the mortgage on car can be foreclosed. D sold the land to X despite such agreement .Which of the following is correct?
c. No, only the mortgage on the land can be foreclosed. a. the contract of sale is void
d. Yes, both mortgages. b. the consent of c is necessary before d can sell the land
c. the sale stipulation prohibiting sale of the land is void
35. P authorized A to sell her land with a 6% commission. A found a buyer C who was willing to buy the land. d. the sale is valid if the buyer was not aware of the mortgage
When
A introduced C to P, told A that she was no longer interested in selling the land and a document was signed 45. D obtained a loan from C. X pledged his car as security .Which of the following is not correct?
cancelling a. the pledge is valid because the debtor is not the owner of the thing pledged.
the written authority to sell with the agreement of A. One month later, P sold the same land to C. P refuse to b. the pledgor must be the owner of the thing pledged
pay A his c. the thing pledged must be delivered to the pledgee or a third person by a common consent of the
commission contending that when the land was sold to C, As authority to sell was already cancelled. Is A parties
entitled to d. the pledgee does not become owner of the thing pledged upon the non-payment of the debt.
his commission?
a. No, because the sale was made no more agency between him and P at the time of the sale. 46. D pledged his bicycle to C as security for a loan with the agreement that D shall remain in possession of the
b. No, because the sale was made directly by P to C. said
c. Yes, because P was in bad faith when he cancelled the authority of A to sell his land. bicycle until the loan is paid. The contract is one of:
d. Yes, because the agency was coupled with the interest of both P and A and therefore is not revocable at a. pledge c. chattel mortgage
will of P b. real mortgage d. loan only

36. If an agent acted beyond the scope of his authority in the name of the principal, the contract is. 47. P authorized A by mere telephone call to sell the formers house. A sold the same in public instrument. The
a. Void b. Unenforceable c. Rescissible d. sale is:
Voidable a. the sale is void because the agents authority
b. it is only unenforceable unless rarified by P
c. valid, despite the authority being verbal
 d. voidable because the house cannot be sold without including the land d. p and m shall not be liable because the expenses were incurred as a consequence of the performance of
the
agents obligation

55. In conventional pledge, there is no deficiency liability on the part of the pledgor inspite of the stipulation to
the
48. P authorized A to sell on credit his car for P1M. A sold it for P1.5M. There was stipulated 10% commission. contrary
A is In legal pledge, the excess of the proceeds of the sale after foreclosure shall pertain to the pledgor even in
accountable for: the
a. P1M c. P.9M (P1M less 10% commission) absence of stipulation
b. P1.5M d. P1.35 (P1.5M less 10% commission) a. both statements are true c. first is false, second is true
b. both are true d. first is true, second is false
49. P authorized A to sell in cash for P1M. A sold on credit for P1.5M. A is liable for:
a. P1M 56. An agency couched in general terms comprises:
b. P1.5M a. acts of ownership c. acts of strict dominion
c. P1.5M only after he has collected from the buyer his payment b. acts of management d. both acts of administration and
d. P1M plus damages for not following the principals instruction ownership

50. P authorized A to sell on credit for P1M his car. A sold it for P1.5M also on credit. A is accountable for: 57. A special agency requires a special power of attorney from the principal
a. P1M on principals demand c. P1M after he has collected from the buyer A general agency comprises acts of management or administration
b. P1.5M right after the sale d. P1.5M after he has collected from the buyer a. both statements are true c. first is false, second is true
b. both are true d. first is true, second is false
51. P authorized A, B, and C to sell his car with the agreement that the latter shall be solidarily liable. However,
after 58. When two or more principals appoint an agent for a common transaction, neither may revoke the power
delivery of the car to them, it was lost through the fault of A only. P can claim damages from: without
a. only from a because he exceeded his authority when the car was lost the consent of the other
b. only from a because he was the only one at fault If the principal fails to pay the agent his commission, the latter may retain pledge the things belonging to
c. b and c because they are also liable for the fault of a the principal
d. a,b, and c because of their solidary liability a. first is false, second is true c. both are false
b. first is true, second is false d. both are true
52. D constituted a chattel mortgage on his car as security for the loan he obtained from C of P1M.It was
further stipulated 59. A is indebted to B for the purchase of a car .But A in the meantime has no money .So she appoints B as her
that the same mortgage shall secure the payment of another loan which the debtor D may incur in the future. agent
Is the chattel to collect from C some money which C owns her (A). which money in turn will be applied to the purchase
mortgage valid? price of the
a. the chattel mortgage for both loans is valid car.
b. the mortgage for the P1M is the only valid a. a cannot revoke the agency at will because it is for the interest of C, a third person
c. the mortgage regards the future loan is the one valid b. a cannot revoke the agency at will because he cannot be compelled to do something against her will
d. the mortgaged is extinguished because of the void stipulation on the ground that it cannot secure a c. a cannot revoke the agency at will because it is a means of fulfilling an obligation already contracted
future obligation d. a can revoke the agency at will provided P agrees

53.P authorized A and B to sell his room air conditioner .Through the negligence of A, the thing was stolen
when the latter 60. P wanted to make his surety so P mad e A as his agent as a sort of the inducement to safeguard him from
left it unattended in his shop .Who is liable to P for the damages? eventual loss.
a. only a is liable because he was the one at fault despite their solidary liability having been appointed The agency is not revocable at will because:
simultaneously a. bilateral contract an obligation already contracted
b. both of them are liable and b shall be reimbursed by a for his payment to p b. it is a means of fulfilling an obligation already contracted
c. either of them is liable at ps option c. it is for the common interest of the principal and agent
d. only a is liable because of their joint liability to p d. it is for the interest of a third person who accepted the stipulation in his favor

54. P and M appointed A to sell the land they own in common with the stipulation that A will advance the
necessary
funds to execute the agency. Who is liable to A for reimbursement of all the funds?
a. p and m will share equally and therefore a may demand one-half from either
b. either or both shall be liable from the entire amount
c. neither shall be liable since it was stipulated that a shall advance the funds to execute the agency
61. A borrows from B and as security entrust to B a ring, which B can sell if A fails to pay debt at the time of
maturity
a. the agency of b extinguished upon the death of a
b. upon the death of a, his heir shall become the principal of b
c. the agency will remain despite the death of a because it is for the common interest of a and b
d. the agency will remain upon the death of a because it is for the interest of b
62. P sells his land and appoints A his agent in paying with the purchase what P owes C, a third person
a. the agency remains even after the death of p because it is for the common interest of p and a
b. the agency of a shall be extinguished upon the death of p
c. the agency of a remains even after the death of p it is for the interest of third person C.
d. the extinguishments of agency upon the death of p depends upon as will
63. The agent may retain in pledge the things, which are the object of agency until the principal reimburse him
for advances
provided the business in successful
a. both statements are false c. first is false, second is true
b. both are true d. second is false, first is true
64. A brother wrote his sister to sell his parcels of land. The land was purchased by a third person, but the
sister did not
forward the money. The brother now wants to recover the parcels of land.
a. the brother may still recover the lands because the sale is unenforceable
b. the buyer shall be liable to the brother for the purchase price because the sister failed to forward it to
her brother
c. the sale is void because the authority of the sisters is not in public instrument
d. the sale is enforceable because the letter of the brother is sufficient authority to sell.
65. In case the both principal and agent contracted with different persons as regards the same thing and one of
the contracts
shall therefore be rejected, the one liable for damages to the third person shall be:
a. the principal because he should not have entered into the contract since he already has an agent.
b. the agent because in case of conflict of interest, the principals interest prevails
c. the principal because he is really the one entering into the contract not the agent
d. the agent if he acted in bad faith otherwise it is principal
66. A contract whereby a person binds himself to render some service or to do something in representation or
in behalf
of another, with the consent and authority of the latter is known as:
a. contract of lease of service c. contract for a piece of work
b. contract of agency d. contract of agency to sell
67. A contract of agency has the following characteristics except that it is not:
a. a consensual contract c. a nominate contract
b. an accessory contract d. a bilateral contract
68. P, 25years old, appointed A, 17 years old, as his agent to sell certain goods for 20,000.00.Thereafter, A sold
the
goods to B for the said amount .P however, learned that the price of the goods had increased to 22,000.00
so he
sought to disaffirm the sale made by A to B and brought an action to recover the goods from B on the
ground that As
act was voidable, A being a minor, and hence, could not be an agent. Decide
a. the sale is valid because the principal is capable
b. the sale is void because a is a minor and therefore, cannot be an agent
c. the sale is voidable because a is a minor
d. the sale is unenforceable because a exceed his authority
69.P appointed A as manager of his coconut plantation .After managing the plantation for 4 years , A informed
P that on
accounting of failing health, he was turning over the administration of the plantation to B, an experienced
coconut
plantation administrator. P neither repudiated the designation of B nor appointed a new agent. He also
remained silent
for 5 years, all the while allowing B to manage the plantation .Is B an agent of P?
a. no because p himself did not give a general power of attorney to b
b. no because the designation of b as manager by a was without ps authority
c. yes because an agent of p because if ps failure to repudiate the agency
d. yes because b was highly qualified to administer the plantation
70. Which of the following acts may not be delegated by a principal to his agent?
a. vote during the meeting of stockholders of a corporation where the principal is a stockholder
b. attend meetings off the board of directors of delegated of a corporation where the principal is a
stockholder
c. vote the shares of stock because of voting trust agreement
d. represents the principal as proxy in voting the shares.
71. Which of the following acts requires a special power of attorney?
a. to make gifts to employees in the business managed by agent
b.to borrow money which is urgently needed to preserve the property of the principal under the
administration
of the agent
c. to make payments for purchases in the ordinary course of the business
d. to lease the real property of the principal to another person for more person for more than one year
72. Which of the following acts requires only a general power of attorney?
a. to bind the principal in a contract of partnership
b. to loan money of the principal
c. to enter into a contract by which the ownership of an immovable is transmitted or acquired gratuitously
or for a valuable consideration
d. to make such payments as are usually considered acts of administration
73. P who was abroad learned that F was interested in buying his lot located in Quezon City. To take advantage
of the
opportunity, he made an overseas call to A. who was in Manila, to sell that the lot in his behalf to F for P1M.
A thus
sold the lot promptly to F. The contract of the sale is in public instrument which was signed by A in behalf
of P as
seller, and F as buyer. The said contract of sale is:
a. valid because it is in public instrument and a was duly authorized to represent p
b. void because the authority of a was not in the form required by law
c. unenforceable because p did not sign the contract of sale and so he had no consent thereto.
d. rescissible because the contract was entered into a representation of an absentee
74. P the owner of a certain car, wanted to sell the car .A learned that P was selling the car. Without the
authority of P,
A sold the car in his name (As) name to B. W hat is the status of the sale of the car?
a. valid between a and but a must be able to transfer the ownership of the car to B at the time of delivery
b. unenforceable against p because he did not authorize a to sell the car
c. void because a was not the owner of the car at the time of sale
d. voidable because the sale was without the consent of p
75. F published in the Manila Bulletin that it was appointing as its duly authorized agent for the sale of its
poroducts.With
the authority, A sold flour to various bakeshops. After three years, F revoked As authority by giving a notice
of revocation
 to A and publishing a notice of revocation in the Philippine Star. Despite the revocation, A still sold 50bags
of flour to S
who did not read the notice of revocation of As authority in the Philippine Star.S now wants to have she had
ordered
delivered but F seeks to set aside the sale of 50 bags of flour to S.
a. f is not obliged to deliver 50 bags of flour because is s deemed to have known of the revocation of As
authority
b. f is obliged to deliver 50 bags of flour because s did not read the revocation of as authority
c. f is obliged to deliver 50 bags of flour because the revocation was published in another newspaper
d. f is not obliged to deliver 50 bags of flour because the notice of revocation to a is sufficient
76. P which is based in Manila sent a letter with a special power of attorney, to A, an agent dealing with
appliances, in the
latters office in Cebu, appointing A as the agent of P to sell its new appliances. The letter, which was sent
through LBC
Courier Services, was duly received b y A who, however, did not respond to the letter. Based on the
foregoing data:
a. an agency was created between p and a by the implied acceptance of A the agency
b. no agency was created between p and a because a did not respond to the letter
c. an agency was created by the ratification of a when he duly received the letter with a special power of
attorney
d. no agency was created because of the inaction of a.
77. P a singer authorized A also a singer to look for a night club where P could sing. A presented herself not P
as a singer
to the X Club which engaged her services to sing nightly for two months. Based on the foregoing information,
which
of the following statements is correct?
a. p has a right of action against x club
b. x has a right of action against p
c. the contract is between a and x club and it is valid
d. the contract is between a and x club is void because p was not a party thereto.
78. P an authorized car dealers appointed A as its agent to sell its cars. The authority of A includes the giving of
a benefits derived from the contract
discount of 20,000.00 to customers who pay in cash. One day, C, a customer, went to the companys car
center and told
and told A that she wanted to buy a car with a sale price of 600,000.00. However, as she only had
550,000.00 she told
A that she would take the car if A agreed to a discount of 50,000.00. A agreed and sold the car to C at
550,000.00
behalf of the corporation. What is the status of the sale made by A to C?
a. voidable at the instance of p because it did not to give its consent to the sale at the discount of
50,000.00
b. unenforceable against p, the principal, because a acted beyond the scope of the authority
c. void because the additional discount of 30,000.00 given by a was not authorized by p
d. rescissible, because p suffered damage of 30,000.00
79. P gave A a special power of attorney wherein it was written that A was being authorized to sell the two cars
of P.
However, P and A had an understanding that A should sell only one of the cars .A sold the two cars to B
who was not
aware of the instruction given by P to A.
a. p is bound by the sale of only one car in accordance with his understanding with a
b. p is bound by the sale of only two cars because that is what is contained in the special power of
attorney
c. p is not bound at all by the sale of either one or both cars because a violated the instructions given by
p
d. p will be bound by the sale of one or both cars at his option
80. P gave a power of attorney to A for the sale of his 2 cars, a Toyota and a Lancer .Their agreement included
among other
provisions, the following: (1) A shall be entitled to a commission of 10% based on the actual selling price of
the cars
which P fixed at a minimum of P.4M for Toyota; and P.5M for the Lancer; and (2) A need not render P any
accounting
of his transactions as long as A turns over the actual selling price of the cars net of the commission of
10%.A was liable
to sell the Toyota to T for P.410M and the Lancer for P.5M to L who gave A a tip of 20,000.00.After the sales,
P demanded
from A an accounting of the transactions that he had made but A refused claiming that it was enough that he
turns over
the net selling price of P.810M (.9m less 10% as commission).Decide.
a. a must not render an accounting to p as agreed upon
b. a must account and deliver to P only the sum of P.9M
c. a must account and deliver to P only the sum of P.910M
d. a must account and deliver to P only the sum of P.930M
81. If the agent is incapacitated, the contract of agency is voidable as well as the contract entered into by him
in behalf of the
principal.
If it were the principal who is incapacitated, the contract of agency is voidable as well as the contract are
voidable.
a. both statements are false c. only the first statement is true
b. both are true d. only the fist is false
82. The principal is not liable for the expenses incurred by the agent in the following, except:
a. when although the agent acted in contravention of the principals instructions, the principal avails
himself of the
b. when it was stipulated that the agent would be allowed only a certain sum
c. when the agent incurred them with the knowledge that an unfavorable result would ensue the principal
was not aware
thereof
d. when the expenses were due to the fault of the agent.
in
83. When two persons contract with regard to the same immovable thing, one of them with the agent, and the
other with the
principal, and the contracts are incompatible with other, ownership shall be transferred to.
a. the first purchaser in good faith
b. the first who completed the payment of the price in good faith
c. the first who will register in good faith the transaction
d. the one who presents the oldest title who must be in good faith
84. An agency in impliedly revoked in three of the following causes. which is the exception?
a. when a new agent is appointed for the same business or transaction
b. when the principal direct manages the business entrusted to the agent, dealing directly with third
person
c. when a special power of attorney is granted to another agent pertaining to a special matter involved in
general power
of attorney issued to a previous agent
d. when desire of the principal is help the agent manage the business
85. P appointed A as his agent to sell a set of bakery equipment for P 50,000.00 with an ordinary commission of 92. P owner of a certain car,authorized A to sell the car for 100,000.00 cash. A,however sold the car in the
10% and a name of P for
guarantee commission of 15%. A is authorized to sell on credit. A was able to sell, in behalf of P, the bakery 11,000.00 but on credit .B, the buyer , knew at the time of the transaction that As authority was to sell the
equipment for car of P
P50, 000.00 N who issued a check dated ten days after the sale. On the tenth say, however, the check was on cash basis.The contract entered into by A is:
dishonored by a. void because b was aware of as limit of authority .in this case , a is not liable because he did not
the bank because Nicole did not have sufficient funds for it. undertake
a. A is liable to P because she must bear the risk of collection to get ps ratification.
b. A is not liable to P because the dishonor of the check was without As fault b. valid because the transaction, although it was for credit , was more advantages to p. accordingly , p will
c. A is not liable to P because she is not the purchaser of N be liable
d.A is liable to P because she acted beyond the scope of her authority c. unenforceable against p because a acted in excess of his authority .thus, a alone will be liable.
d. rescissible because p will suffer damage if the sales price is not paid by b.
86. P appointed A as her agent .The authority of A did not authorize A to appoint a substitute but it did not also
prohibit 93. Pentinio appointed Anzures as commission agent to sell Pentinios goods for 10,000.00 cash. Anzures ,
him from appointing one. In this case: however, sold
a. a may appoint a substitute because he is not prohibited from doing so in his authority but he shall be the goods on credit for 11,000.00 without Penitinios consent. Based on the foregoing facts, which of the
liable for following
for the acts of the substitute options are available to Penitinio?
b. a may not appoint a substitute because there is no express provision in his appointment from p allowing i. Pentinio may demand immediate payment in 11,000.00 cash
him to ii. Pentinio may demand immedaite in 10,000.00 cash.However, Anzures shall be entitled to keep the
appoint one. excess
c. a may appoint a substitute but he shall be liable for the acts of the substitute only when the substitute is of 1,000.00 when he collects the price of 11,000.00
notoriously iii. Pentinio mat ratify the sale on credit for 11,000.00 and wait for the amount to be collected
incompetent or insolvent a. either I and III b. either II and III c. either I and II d. I only
d. a may appoint a substitute only when the substitute is designated in the authority given by the p to a
94. P leads B to believe that A is his(Ps) agent.However, A is not really the agent of P.Later, B transacted with A
87. The following cases were presented to you for evaluation: believing
i A bilateral contract depends upon the agency that A agent of P. What kind of agency was created here?
ii The agency means of fulfilling an obligation previously contracted a. agency by ratification c. agency by estoppel
iii. The agency is one where the partner from the management is unjustifiable b. agency by appointment d. agency by necessity
In which of the above cases is the principal not allowed to revoke the agency?
a. I and II b. II and III c. I and III d. I,II and III 95. Consider the following statements
i. An agency may be constituted in the common interest of the principal and the agent
88. The following are modes of extinguishing an agency except: ii. An agency may be constituted in the interest of a third person who has accepted the stipulilation in
a. death, civil interdiction, insanity or insolvency of the principal agent his favor
b. accomplishment of the purpose of the agency
c. expiration of the period for which the agency was constituted The death of the Principal extinguishes with the agency, as a note.However, the death of the principal does
d. continued losses on the part of the principal or agent not extinguish
and agency if the reason why the agency was created is:
a. reason I only c. either reason I or reason II
89. X,Y and Z , co-owners of a house and lot , appointed A to sell the house and a lot at a price of not less B. reason II only d. neither reson I nor reason II
1,5000,000.00 cash
with A being entitled to a commission of 10% of the selling price .A was able to sell the house for 96. An agent who contracts in the name of the principal is not liable in one of the following cases.Which is it?
1,800,00.00.A cash a. if the agent expressly bound himself
a. 150,000.00 b. 180,000.00 c. 60,000.00 d. 50,000.00 b. if the agent acted beyond limits of his authority without giving the party he contracted with sufficient
notice
90. R,S and T, each one owning a separate lot, appointed A to sell their lots in one instrument.Under the of his powers
agreement A c. if the other party knew that the agent exceeded his authority and the agent undertook to secure the
will receive a commission of 10% of the selling price of eah lot. A was able to sell the lot of R 100,000.00; principals
the lot of ratification but the principal did not ratify the contract
S for 200,000.00 ; and the lot of T for 300,000.00.How much commission may A collect from R? d. if the other party knew that the agent acted in excess of his authority but the agent did not undertake to
a. 60,000.00 b. 10,000.00 c. 20,000.00 d. 30,000.00 secure
the principals ratification
91. This is an agency that comprises one or more specific transactions of the principal
a. special agency c. agency couched in general terms 97. A, a duly authorized agent of P , wrote a letter to X on which March 1,2006 offering to sell Ps car for
b. general agency d. agency couched in specific terms 200,000.00 cash.On March 3,2006 , X worte a letter to A statinh that he accepted all the terms of the offer,
which letter 99. P appointed A as his agentto sell the appliance products of P.The agreement between P and A provides
was received by A on March 6,2006 on March 5,2006.Before A could relay such acceptance to P, P died in a for the payment to A of 5% ordinary commission and a 10% guarnatee (del credere) commission. A sold
vehicular several
accident on March 6,2006 appliances to B for 20,000.00 the same thing being payable after 30 days .When A went to Bs place to
a. the contract was not perfected because p , the real party to the sale , died before the acceptance came to collectthe price
his knowledge of the appliances , B, together with the appliances that were sold , was nowhere to be found:
b. the contract was perfected on march 1,2006 a. a is liable to p for the price of the appliances because a must bear the risk of collection
c. the contract was perfected on march 3,2006 b. a is not liable top fo the price of the appliances because it was not his fault that B should dissapear
d. the contract was perfected on march 5,2006 c. p must bear the risk of collection because this is the owner of the appliances
d. a is liable to p because a acted beyond the scope of the authority
98. P published the appointment of A as Ps agent in the Manila Bulletin.For 5 years,A, as Ps agent , dealt with
the public 100. An agent acting in the name of the principal shall not be liable to the third person with whom he contracts:
including X, On March 1,2006, P revoked As authority by giving the lattera noticeof revocation .the a. when he expressly binds himself
revocation was b. when he exceeds the limit of his authority without giving the third person sufficient notice of his powers
published in the Philippine Star . A month later, X ,who was ignorant of the revocation , sold goods to A as P c.when the third person knew of the agents lack of authority and the agent undertook to get the principals
agent ratification
a. p is not obliged to pay for the goods because the publication of the revocation of A authority is sufficient but failed to get the same
notice d. when the third person knew of the agents lack of authority but the agent did not undertake to get the
b. p is obliged to pay for the goods since x was not aware of the revocation of as authority principals
c. p is obliged to pay for the goods because the revocation should have been published in the same ratification
newpaper
d. p is not obliged to pay for the goods because the notice of revocation to a is sufficient