Beruflich Dokumente
Kultur Dokumente
COMPREHENSIVE REVIEW
2. On J uly 1, year 2, a company decided to adopt PFRS. The companys first PFRS reporting period is as of and fo
the year ended December 31, year 2. The company will present one year of comparative information. What i
the companys date of transition to PFRS?
A. J anuary 1, year 1 C. J uly 1, year 2
B. J anuary 1, year 2 D. December 31, year 2
3. XYZ Inc. is a first-time adopter under PFRS 1. The most recent financial statements it presented under it
previous GAAP were as of December 31, 2005. It has adopted IFRS for the first time and intends to present th
first IFRS financial statements as of December 31, 2006. It plans to present two-year comparative information
for the years 2005 and 2004. The opening IFRS statement of financial position should be prepared as of
A. January 1, 2005 B. J anuary 1, 2003 C. J anuary 1, 2004 D. J anuary 1, 2006
4. How should a first-time adopter of PFRS recognize the adjustments required to present its opening PFR
statement of financial position?
A. All of the adjustments should be recognized in profit or loss.
B. Adjustments that are capital in nature should be recognized in retained earnings and adjustments tha
are revenue in nature should be recognized in profit or loss.
C. Current adjustments should be recognized in profit or loss and noncurrent adjustments should b
recognized in retained earnings.
D. All of the adjustments should be recognized directly in retained earnings or, if appropriate, in anothe
category of equity.
5. Which one of the following does not qualify for exemption under PFRS 1 for the purposes of retrospectiv
application?
A. Hedge accounting
B. Financial assets and financial liabilities derecognized prior to J anuary 1, 2001
C. Estimates made under previous GAAP
D. Fair value accounting for investment property
2. Case 1: Lala, Ben and Chui, notorious gangsters in Barangay Labangal went to the house of
Badet and told the latter that unless he signs the deed of sale for his lot, he will be killed by
the three. Eventually, Badet signed the document.
Case 2: A owes B P100,000 which is already due and demandable but A refuses to pay. So B
wrote A demanding payment and indicating therein that he will file a collection case in
court should A still refuse to pay. As a consequence, A paid B his debt.
3. A, B and C executed a promissory note in favor of D, E and F in the amount of P9,000. Can
the creditors proceed against A for the payment of the entire loan?
A. No, each creditor can only collect P3,000 from A
B. Yes, anyone of the creditors can collect the entire P9,000 from A
C. No, each of the creditors can only collect P1,000 from each of the debtors
D. Yes, because the obligation is presumed to be solidary
4. In the preceding problem, suppose C is insolvent, can B and A be held liable for his share in
the obligation?
A. Yes, because the obligation is presumed to be joint and several
B. Yes, but A and B shall be liable proportionately
C. No, because of their joint liability and therefore the debts are distinct from one
another
D. No, because only either of them can be held liable for the share of C
5. Still in the preceding problem, suppose the obligation is mixed solidarity can one of the
creditors demand payment of the whole debt from anyone of the debtors?
A. No, because the debts are distinct and separate from one another
B. Yes, because it is as if there is only one obligation
C. Yes, provided all of them demand from all of the debtors
D. No, because despite solidarity, a debtor is liable only for his share
7. The creditor has the real right to the fruits of the thing from the time they have been
delivered.
The buyer acquires real right to the fruits of the thing from the perfection of the sale.
A. True, true C. False, false
B. True, false D. False, true
8. In natural obligation, the creditor has the right to enforce the performance thereof it being
based on positive law.
Solutio indebiti and negotiorum gestio are quasi-contracts that give rise to civil obligations.
A. True, true C. False, false
B. True, false D. False, true
9. A contract as a general rule must be written to have force and effect as a valid agreement.
10. The principle of autonomy of contracts means that the contracting parties as a rule may
agree upon any stipulation, clause, term and condition.
Relativity of contracts means that contracts take effect not only between the parties but
also heirs and assigns.
A. True, true C. False, false
B. True, false D. False, true
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11. If the obligation is solidary it means there is mutual guaranty among the debtors and
therefore the insolvency of one is shouldered by the others.
Solidarity may exist although the debtors may not be bound in the same term, condition
and manner of performance.
A. True, true C. False, false
B. True, false D. False, true
12. In dation in payment, the creditors do not become the owner of the property ceded as
payment of the debt.
In payment by cession, the creditors do not become the owners but are authorized to sell
the properties assigned to them.
A. True, true C. False, false
B. True, false D. False, true
13. In tender of payment and consignation, the refusal without valid reason of the creditor to
accept the payment of the debtor will extinguish the obligation.
The third person who paid the obligation without the knowledge or against the will of the
debtor is still entitled to the reimbursement from the debtor to the extent of the latters
benefit.
A. True, true C. False, false
B. True, false D. False, true
15. It is an obligation which is based on positive law gives a right to enforce its performance.
A. Natural B. Civil obligation C. Moral obligation D. Legal obligation
obligation
17. Obligations derived from law are presumed except those found in the Civil Code or in
special laws.
Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith.
A. True, true C. False, false
B. True, false D. False, true
18. This is principal kind of quasi-contract arising out of payment by mistake or undue
performance of an obligation.
A. Solutio indebiti C. Other quasi contract
B. Negotiorum gestio D. Quasi delict
19. In quasi-contract there is no consent of the parties thus preventing a meeting of minds
between them.
In quasi-delict, there is no intention on the part of a person doing a wrongful act or omission
causing damage to another.
A. True, true C. False, false
B. True, false D. False, true
20. The creditor acquires a real right against the debtor form the time the thing should have
been delivered.
The fruits of the thing shall pertain to the creditor from the time they should have been
delivered to him, that is, he has personal right to demand delivery of the fruits after the
obligation to deliver the principal thing arises.
A. True, true C. False, false
B. True, false D. False, true
21. In the obligation to deliver a thing, the debtor has to deliver also the accessories and
accessions if they have been mentioned.
In obligation to do, specific performance of the debtors obligation is not available as a right
of the creditor to demand from the obligor.
A. True, true C. False, false
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B. True, false D. False, true
22. Which of the following is demand necessary to make the debtor is delay in the performance
of his obligation?
A. When the time of the performance is of the essence.
B. When the time of performance has been stipulated.
C. When the law so provides.
D. When demand would be useless.
23. Liability for damages in the performance of an obligation arises from the following, except:
A. Negligence C. Delay
B. Acts or omissions punished by law D. Fraud
24. Liability for damages arising from fraud is demandable and there can be a waiver of an
action for past fraud.
There can be waiver of an action for future negligence but not fraud.
A. True, true C. False, false
B. True, false D. False, true
25. In which of the following is the debtor still liable despite the fortuitous event causing the
loss of the thing?
A. The thing lost is a specific thing.
B. The performance of the obligation has become impossible.
C. The nature of the obligation does not require the assumption of risk.
D. When the law or the obligation expressly so provides.
26. D borrowed from C a sum of money with the stipulated rate of interest to be paid in the
three equally monthly installments from January to March. D paid an amount for which the
latter issued a receipt stating that the payment is for the month of February. In this case:
A. The installment for the payment of March is also considered paid.
B. The installment of the month of January is conclusively presumed to have been paid.
C. The installment for the month of January is disputably presumed paid.
D. The installment for the month of January is not presumed paid.
27. In the preceding case, suppose the receipt does not mention the payment of the interest, it
is:
A. Conclusively presumed the interest has been also paid.
B. Not presumed paid unless proven otherwise.
C. Prima facie presumed to have been paid.
D. Presumed disputably that only the principal has been paid.
28. Three of the following are the rights of the creditor against the debtor who fails to pay his
debt, except:
A. Attachment of the debtors properties or garnishment thereof
B. Subrogation to the rights of the debtor against third persons
C. Rescission of contracts entered into by the debtor to defraud him
D. Send the debtor to jail for non-payment of his debt
29. Rights acquired in virtue of obligations are transmissible only if so stipulated by the parties.
The law or the stipulation of the parties to an obligation may provide that the rights
acquired by virtue thereof are not transmissible.
A. True, true C. False, false
B. True, false D. False, true
30. Impossible, unlawful immoral conditions are not valid and not demandable except the
obligations which depend upon them.
Potestative condition to be void must be both the suspensive and dependent on the debtors
will.
A. True, true C. False, false
B. True, false D. False, true
31. D bound himself to deliver either specific object 1 or object 2 to C. If one of the objects is
lost due to fortuitous event and without the fault of D, the effect is:
A. D may still choose which he shall deliver, only the value of the thing lost if he
chooses the same.
B. D cannot choose because among the prestations whereby he is alternatively bound,
only one is practicable.
C. C may choose which of the objects he wants to delivered.
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D. Obligation of D has been extinguished.
32. In facultative obligation, only one prestation is due but the creditor may be given the right
of choice as to the prestation to be performed.
33. A, B and C borrowed P3M from D, E and F evidenced by a promissory note worded as
follows, to wit: I promise to pay D, E and F P3M. (Sgd) A, B and C. How much can D collect
from A?
A. P3M B. P.5M C. P1.5M D. P1M
34. In the preceding case, suppose only D is demanding payment, can A still pay any one of the
creditors?
A. No, because the law provides that payment shall be made to the creditor demanding
payment.
B. No, because in case payment is made to a creditor not demanding payment, only his
share of the credit shall be extinguished.
C. Yes, because the payment can be made to any of the solidary creditors.
D. Yes, because payment proportionately can be made to any of the joint creditors to
his share.
35. A, B and C bound themselves to deliver to X a specific car worth P3M. Due to the fault of A
the car was lost. In this case:
A. X can claims damages from any one of the three for his proportionate part of liability
because the obligation is indivisible.
B. X claims only from A the whole amount of damages other than the value of the car.
C. Since it is solidary liabilities for damages, X can claim the same from any of the
three.
D. Only A is liable for damages although B and C are liable for their respective shares in
the obligation
36. D owes C P1M. X, without the knowledge or against the will of D paid C P2M. Can X get
reimbursement from D?
A. P2M by the way of reimbursement from D to prevent unjust enrichment on the part
of D at the expense of X.
B. P1M only for that is the extent of benefit of D.
C. No reimbursement because the payment was not proper being without the
knowledge or against will of D.
D. P1M plus interest from the time of payment until reimbursement.
There is a quasi-contract with the obligation to reimburse the third person insofar as the
payment has been beneficial to the debtor.
There is legal subrogation and therefore in case the debtor fails to reimburse the third
person, the latter may go after the mortgage, guaranty and penalty
A. True, true C. False, false
B. True, false D. False, true
38. In application of payment, the creditor as a rule shall decide on what debt the payment be
applied.
If the period is for the benefit of the debtor, he can apply the payment on a debt although
not yet due.
A. True, true C. False, false
B. True, false D. False, true
39. In dation in payment, the creditor becomes owner of the thing alienated as payment while
in payment be cession, the creditors do not become the owners of the properties of the
debtor. In tender of payment and consignation, the tender of payment by itself shall not
extinguish the obligation.
If the creditor receives a check as payment and it has been impaired through his fault, the
debtor/drawer shall be released to the extent of the loss.
A. True, true C. False, false
B. True, false D. False, true
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40. Three of the following are essential elements of a contract, except:
A. Cause of the obligation which is established.
B. Consent of the contracting parties.
C. Motive of the parties.
D. Object certain which is the subject matter of the contract.
41. Novation of a contract takes place in the three of the following, except:
A. Delegacion B. Expromision C. Subrogation D. Assignment
44. The contract entered into by the person who cannot give consent is:
A. Void ab initio because actually there is no consent
B. Unenforceable only because the contract may be ratified
C. Rescissible because of the damage cause to the person incapacitated
D. Voidable as there is consent although vitiated or defective
46. A defective contract because it is entered into the name of another without or in excess of
authority, or it is verbal is
A. Rescissible B. Voidable C. Unenforceable D. Void
47. The following, even if not in public instrument are valid, binding and enforceable, except:
A. Negotiable instruments
B. Sale of land, either by the owner or agent with written authority
C. Agency, pledge, mortgage
D. Partnership contract wherein immovables are contributed
49. A owes B P20 000 which became due and payable last June 23, 2010. On that date, A
offered B P10 000, the only money he then had, but B refuses to accept the payment. A
thereafter met C, Bs 23 year old son, to whom he gave the P10 000 with the request that
he turn the money over to B. The money was stolen while Cs possession. How much may B
still recover from A?
A. P20,000 B. P10,000 C. P15,000 D. P0
50. If a third persons pays an obligation, what are the rights, which are available to him if he
pays the obligation with the knowledge and consent of the debtor?
First answer- He can recover from the debtor the entire amount which he has paid.
Second answer- He subrogated to all the rights of the creditor
A. Both answers are correct C. Only the first answer is correct
B. Both answers are wrong D. Only the second answer is correct
51. A, B and C executed a promissory note binding themselves to pay P9 000 to X, Y and Z. The
note is now due and demandable. Can the creditors proceed against A alone for the
payment of the entire debt?
A. No, each creditor can collect P9 000 from A
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B. Yes, either X, Y or Z can collect P9 000 from A
C. No, each creditor can collect only P1 000 from A
D. Yes, since the promissory note is silent with respect to the rights of the creditors, the
obligation is presumed to be solidary
53. The loss or deterioration of the thing intended as substitute through the negligence of the
obligor does not render him liable.
A person alternatively bound by different prestations shall completely perform one of them.
A. True, true C. False, false
B. True, false D. False, true
54. There being no express stipulation and if the undertaking is to deliver a determinate thing,
the payment shall be made
A. At the domicile of the debtor
B. At the domicile of the creditor
C. Wherever the thing might be at the moment the obligation was constituted
D. Wherever the thing might be at the amount the obligation is to be fulfilled
57. A passenger of a truck was hurt but in a criminal case against the driver, said driver was
acquitted. The victim now sues the owner of the truck for culpa contractual. May the suit
still prosper?
A. No, this will constitute double jeopardy
B. No, the acquittal means that the guild of the accused was not proved by proof
beyond reasonable doubt
C. Yes, it is sufficient for him to proven the existence of the contract of carriage and the
injuries suffered
D. Yes, provided he can prove the negligence of the driver
58. 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 C. With a period
B. With a suspensive condition D. With a resolutory condition
59. One is not a requisite needed in order that the obligation shall be extinguished by loss or
destruction of a thing due.
A. When the obligation is to deliver the house located at 123 Recto Avenue, Manila
B. When the thing is lost without the fault of the debtor
C. When the obligation is to deliver a brand new Honda Str colored orange
D. When the thing is lost before the debtor incurred delay
60. It presupposes not only that the obligor is liable, ready and willing but also more so, in the
act of performing his obligation.
A. Promissory note C. Tender of payment
B. Bill of exchange D. Obligation to sell
61. A gets a loan of P1M form B which becomes due on October 1, 2010 and mortgaged his
house as security for the debt. On June 30, 2010, the mortgaged house completely
destroyed by fire thru the fault of C. A week later, B demanded payment from A. Is Bs
demand valid?
A. No, the destruction of the house was not thru the fault of A
B. No, the obligation is one with a definite period which is deemed intended for the
benefit of both the debtor and creditor
C. Yes, the debt becomes demandable unless A can give another security equally
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satisfactory
D. Yes, the debt becomes demandable even if A can give another security equally
satisfactory
62. An action to impugn the acts of a debtor intended to defraud the creditor is
A. Accion reivindicatoria C. Accion redhibitoria
B. Accion subrogatoria D. Accion pauliana
63. A owes B P11 000 due on July 2, 2010. B owes A P6 000 due on July 3, 2010 and P4 000 due
on July 10, 2010. B owes C P11 000 due on July 3, 2010. On July 3, 2010, B cannot pay C so
B assigns to C her credit of P11 000 against A, without the knowledge of A. On July 10,
2010, C tries to collect from A the P11 000. How much can C compel to A to pay?
A. P11,000 B. P9,000 C. P5,000 D. P1,000
64. The contract must bind both contracting parties, its validity or compliance cannot be left to
the will of one of them, and this is
A. Mutuality of contract C. Relativity of contract
B. Freedom of contract D. Obligatoriness of contract
65. By this principle, contracts take effect only upon the contacting parties, their assigns or
successors in interest
A. Mutuality of contract C. Relativity of contract
B. Freedom of contract D. Obligatoriness of contract
66. The statement Contracts shall be obligatory in whatever from they have been entered into
provided all the requisites for their validity are present refers to
A. Consensual contract C. Formal contracts
B. Real contract D. Solemn contracts
68. When a third person assumes the payment of the obligation without the knowledge of the
debtor but with the consent of the creditor, there is
A. Delegacion B. Expromision C. Subrogation D. Novation
71. N, R and J solidary bound themselves to deliver to S a Honda motorcycle valued to P60 000.
The obligation was not fulfilled through the fault of J. Thereupon. S filed an action in court
against N and the court awarded P72 000 to S representing the value of the motorcycle plus
damages. Which of the following situation is valid?
A. If N pays P72 000, N can collect from R and J P24 000 each
B. S has to collect P24 000 each from N, R and J to satisfy the courts award of P72 000
C. N can refuse to pay the penalty because it should be charged against J, the guilty
party
D. If S succeeds in collecting the P72 000 from N. N in turn can collect from R P20 000
and from J P32 000
72. A, a jeepney driver driving recklessly cause serious physical injuries to his passenger B and
pedestrian C. As a result, which of the following is not correct?
A. B may proceed against A for culpa C. C may proceed against A for culpa
criminal aquilana
B. B may proceed against A for culpa D. C may proceed against A for culpa
contractual criminal
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73. X, a bus driver driving negligently, killed his passenger B and pedestrian C. As a result
I. B may proceed against Xs employer and the source of liability is the crime committed
by A or culpa criminal.
II. B may proceed against Xs employer and the source of liability is the breach of contract
of carriage or culpa contractual.
III. C may proceed against Xs employer and the source of liability is the crime committed
by A or culpa criminal.
IV. C may proceed against Xs employer and the source of liability is the quasi-delict
committed by A or culpa aquilana.
A. I, II and III B. I, II and IV C. II, III and IV D. I, II, III and IV
75. A, with violence in her eyes, intimidated her husband B to sell his exclusive property to her.
The contract of sale is
A. Rescissible B. Voidable C. Unenforceable D. Void
76. In 2006, at age of 16, A sold his land for P4M payable at P1M in 2006, P1M in 2007 and P1M
in 2008. In 2010, A wants to annul the contract on the ground of minority. Will his action
prosper?
A. No, A is allowed to ask for annulment of the contract only within 4 years from the
perfection of the contract
B. Yes, A has 4 years counted from the time he becomes of legal age to ask for
annulment of the contract
C. No, the acceptance of the instalment payments amounted to ratification of the sale
D. Yes, provided A was then acting in good faith when he sold the property
A taxpayer is not entitled to interest on the overpayment of tax subject of a refund because
an obligation derived from law is not presumed.
A. True, true C. False, false
B. True, false D. False, true
80. Jo-Ann asked her close friend, Aissa, to buy some groceries for her in the supermarket. Was
there a nominate contract entered into between Jo-Ann and Aissa? Which of the following is
wrong?
A. There was a nominate contract of agency
B. There was a nominate contract of lease of services in the absence of principal-agent
relationship
C. There was an innominate contract to buy
D. There was no innominate contract
SALES
1. Which of the following statements is not correct?
A. The vendor is bound to deliver the thing sold and its accessions and accessories in
the condition in which they were upon the perfection of the contract
B. All the fruits of the thing sold shall pertain to the vendor from the day on which the
contract was perfected
C. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid
him the price, or if no period for the payment has been fixed in the contract
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D. The vendor is bound to transfer the ownership of and deliver, as well as warrant the
thing which is the object of the sale
Sale of land made by an agent without written authority from the owner thereof is void.
A. True, true C. False, false
B. True, false D. False, true
The unpaid seller cannot recover the thing sold from an innocent purchaser of value.
A. True, true C. False, false
B. True, false D. False, true
5. S offered his car to B for P1M and giving the latter one week to decide. B in turn gave S P1
000.00. In this case, there is
A. Contract of sale of the car with the P1 000.00 as earnest money.
B. Contract of option with the P1 000.00 as option money.
C. Contract of sell of the car at Bs option.
D. Contract to sell of the car at Ss option.
6. A sold to B his dog with the agreement that delivery shall be after one week from the sale
and the payment of the price after two weeks from delivery. If the dog shall produce
offspring, it shall belong to:
A. If produced before the sale, it shall pertain to the seller.
B. If the puppy shall exist before the actual delivery, it shall pertain still to the seller
C. The fruits that shall exist after delivery will only be the ones to pertain to the b
D. The fruits after the sale but before delivery shall pertain to the buyer if so stipulated
by the parties to the sale
7. A contract of sale of vain hope or expectancy is voidable at the option of the buyer and the
action for annulment brought within the perspective period provided by law.
The sale of a mere hope or expectancy is deemed subject to the condition that the thing
will come into existence.
A. True, true C. False, false
B. True, false D. False, true
8. A sold Bs car in his (As) name to C without any authority from B. The contract of sale is
A. Rescissible B. Voidable C. Unenforceable D. Valid
9. A sold Bs car in the name of B without any authority to C. The sale is:
A. Rescissible B. Voidable C. Unenforceable D. Valid
10. A sold Bs car with authority to sell but sold it in his (As) name. The contract is
A. Rescissible B. Voidable C. Unenforceable D. Valid
12. A, as agent of P with oral authority, sold Ps land in a public instrument. The sale is:
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A. Rescissible B. Voidable C. Unenforceable D. Void
13. With written authority from his principal, the agent sold verbally the land of the principal.
The sale is:
A. Rescissible B. Voidable C. Unenforceable D. Void
14. Without authority from B, A sold the formers land in Bs name. The sale is
A. Rescissible B. Voidable C. Unenforceable D. Void
15. Without authority from B, A sold the formers house in writing. The sale is:
A. Rescissible B. Voidable C. Unenforceable D. Void
16. A, with oral authority from P, sold the latters house in writing. The sale is:
A. Rescissible B. Voidable C. Unenforceable D. Valid
17. S sold to B his land on January 10, 2010. On January 15, an absolute deed of sale was
executed and notarized. On January 20, the sale was registered with the Registry of Deeds.
On January 25, B took actual possession of the land by building a fence thereon. When did B
acquire ownership of the land?
A. On January 10 B. On January 15 C. On January 20 D. On January 25
18. S sold to B his car on January 10, 2010. On January 15, an absolute deed of sale was
executed and notarized. On January 20, the sale was registered with the LTO. On January
25, B took actual possession of the car. When did B acquire title to the car?
A. On January 10 B. On January 15 C. On January 20 D. On January 25
19. S sold B his car with the agreement to deliver the same one week after the sale on January
10, 2010. In this case:
A. S may demand within reasonable time from the sale the payment of the price from B
B. S can demand payment only after he has delivered the car to B
C. B may demand delivery of the car even before the expiration of the one week period
agreed upon once he pays the price
D. Payment and delivery shall take place only after one week from sale
20. S sold B his car with the agreement that B will pay the price one week after the sale of
January 10, 2010. In this case:
A. B may demand within reasonable time from the sale the delivery of the car
B. B may demand delivery only he has paid the price
C. S may seek payment of the price once he delivers the car
D. Payments and delivery shall take place only after one week from sale
21. S sold his car to B. No agreement was made on the time and place of delivery and payment.
Hence,
A. The time and place of delivery shall be at the time and placed of payment of the
price
B. The time and place of delivery and payment not having been agreed upon, the sale
shall be void
C. The seller may demand payment first before delivery of the thing sold
D. The buyer may demand delivery first before payment of the price
22. The seller must be the owner of the property he sells but his ownership need not exist on
the perfection but upon delivery of the thing.
23. S sold his car for the price of P2M to B who shall pay P.5M and deliver to S his land worth
P1M and the amount of P1M. There is:
A. Partly sale and partly barter C. Innominate contract
B. Barter D. Sale
24. S delivers to B his car valued at P2M in consideration of B transferring to S his land worth
P1M and the amount of P1M. There is:
A. Partly sale and partly barter C. Innominate contract
B. Barter D. Sale
25. B ordered from S a pair of shoes of the kind and style of which S has gone out of stock.
There is:
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A. Contract for a piece of work C. Contract of agency
B. Contract of lease of service D. Contract of sale
26. S sold to B his land valued at P1M only for the price of P.7M, thus resulting to inadequate
price. The sale is
A. Rescissible B. Voidable C. Unenforceable D. Valid
27. S offered his land to B with the understanding that the latter shall fix the price. B, as agreed
upon fixed the price at P2M, although the lands market value was P1.5M. It is clear,
therefore, that S is to benefit from the transaction. Was there sale?
A. No perfected sale as there was no consent on the price
B. There was perfected sale, fixed by buyer and accepted by the seller
C. Theres valid sale since the buyer was authorized to fix the price
D. Voidable sale at the option of the buyer due to mistake in the fixing of the price
29. In sale or return, the buyer becomes owner of the thing upon delivery while if on
approval, trail or satisfaction, after approval, express or implied.
Sale between husband and wife is void, unless there is separation of property between
them in the same way that universal partnership between them is also void.
A. True, true C. False, false
B. True, false D. False, true
30. S sold to B his dog without knowledge that the animal was suffering from a disease at that
time of the sale. Is the seller liable for breach of warranty against redhibitory defect of
animals?
A. No, because the seller was in good faith when he sold the animals
B. Yes, if he were aware of the hidden fault or defect
C. No, because animals unlike things easily can contact some illness
D. Yes, and good faith is not a defense to avoid liability
31. S sold to B a thing without knowledge that the thing suffered from hidden defect. The
parties agreed on the waiver of the warranty by the buyer. Is the seller still liable for breach
of warranty?
A. No, because of the valid waiver of warranty
B. No, but he must return the price to the buyer without damages
C. Yes, because the waiver refers only to liability for damages
D. Yes, if the seller was in bad faith at the time the waiver was made
32. S sold to B a thing with waiver of warranty against eviction. Eviction took place
subsequently. Is S still liable for breach of warranty against eviction?
A. No, if it was waiver intencionada.
B. No, if it were waiver consciente.
C. Yes, even if it was waiver intencionada
D. No, provided the seller was in good faith in entering into the contact of waiver of
warranty against eviction.
33. B bought from S a second hand motor vehicle which upon inspection by B had some
mechanical troubles. After the sale, the car broke down due to engine trouble requiring an
overhaul of the engine. Is S liable for breach of warranty against hidden defect?
A. No, because the defect was not hidden but apparent upon inspection by B it being a
second hand car
B. Yes, because there was no waiver of warranty against hidden defects
C. Yes, because the seller was in bad faith
D. No, because it was the fault of the buyer in buying a used car
35. S sold to B a car on installment wherein the latter mortgaged the same car as security for
the price. Failing to pay the installments, the mortgage on the car was foreclosed. Is B still
liable for any deficiency if the seller fails to recover in the foreclosure sale?
Page 12 of 25
A. Yes, because it is only in case of pledge is the debtor not liable for any deficiency
B. Yes, if so stipulated upon by the parties
C. No, unless agreed upon by the parties
D. No, notwithstanding any stipulation to the contrary
36. A, B, C are co-owners of a parcel of land. A sold his share to B. Can C redeem the said share
from B?
A. No, unless he was notified of the sale prior to its perfection
B. No, legal redemption applies only if the interest was alienated by onerous alienation
person
C. Yes, because the law frowns upon co-ownership
D. No, if there was stipulation requiring prior consent
37. A and B are co-owners of a parcel of land. A donated his share to C. Can B redeem the said
share from C?
A. Yes, because the law looks with disfavor at co-ownership
B. No, because legal redemption applies only in case of onerous alienation
C. No, unless he enforced his right through court action
D. Yes, but in promotion to his interest in the land as co-owners
38. A, offered to sell to B 100 cartons of sardines at a specified price which was accepted by B
and subsequently delivered his letter of acceptance. In view of the shortage of the catch of
sardines, A failed to deliver the commodities it has offered for sale. B decided to sue A.
Which is correct?
A. The acceptance of the offer only created an option to buy
B. The absence of consideration distinct from the price makes the contract without any
obligatory force
C. The acceptance of the offer to sell by showing the intention to buy for a price certain
creates a bilateral contract to sell and buy
D. The acceptance of the offer to sell constitutes binding contract of sale provided the
option was supported by a sufficient consideration
39. When the goods are delivered to the buyer on sale or return for period of seven days,
ownership of the goods passed to the buyer,
A. Upon perfection of the contract
B. Upon the delivery of the goods
C. Upon expiration of seven days
D. Upon acceptance by the buyer of the offer of the seller
40. A buyer may sue the seller for breach of warranty against hidden defects of things within
A. 40 days from delivery of the thing C. 1 year from delivery of the things sold
sold
B. 6 months from delivery of the thing D. 4 years from discovery of the fraud
sold
42. S and B agreed on the sale of a four hectare property at Macapagal Boulevard for the price
of P15 000 per square meter on condition that if the price is not paid on a particular date,
the sale will considered automatically cancelled. On the particular date agreed upon, B did
not pay S, but B never asked for a juridical cancellation nor made a notarial act or
rescission. In this case
A. The sale is cancelled as per agreement
B. S can validly refuse any subsequent offer to pay by S
C. B can still pay S the price
D. B cannot anymore pay the price simply because the sale is cancelled due to his
failure to pay on the stipulated date
PARTNERSHIP
1. 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
Page 13 of 25
constitute a universal partnership of all present property
2. X, Y and Z are general partners in a merchandising firm. Having contributed equal amounts
to the capital, they also agree on equal distribution of whatever net profit is realized per
fiscal period. After two years of operation, Z conveys her whole interest in the partnership
to J, without the knowledge and consent of X and Y.
What are the rights of J, if any, should she desire to participate in the management of the
partnership and in the distribution of a net profit of P360 000.00 which was realized after
her purchase of Zs interest?
A. J can participate in the management of the partnership and she is entitled to P120
000 of the net profit
B. J can participate in the administration of the partnership and she is entitled to P120
000 of the net profit
C. J cannot participate in the administration of the partnership and she is entitled to
P120 000 of the net profit
D. J cannot participate in the administration of the partnership and she is not entitled to
P120 000 of the net profit
4. Case 1: A, B and C were partners. A informed B that the former was resigning from the
partnership. The partnership was dissolved by the act of A. C had no knowledge of the
dissolution.
Case 2: A, B and C were partners. A informed B that the former was resigning from the
partnership. The partnership was dissolved by the act of A.
Comment to Case 2: If the contract was entered into by B despite his knowledge of the
dissolution, A and C can recover from B.
A. True, true C. False, false
B. True, false D. False, true
6. A, B and C entered into an oral contract of partnership each contributing P1M each to the
common fund plus other personal properties of the same amount and failed to register the
partnership with the SEC. is the partnership valid?
A. No, because every contract of partnership having a capital of three thousand pesos
or more in money or property must be in public instrument and registered with SEC
B. Yes, because public instrument is necessary only in case of contributions of
immovable
C. Yes, because a partnership contract can always be oral
D. No, because registration with SEC is essential for a partnership to be valid and
acquire juridical personality
7. Partners A, B and C contributed: P-P1M; B-P2M; C service. After exhausting the partnership
assets, the creditors still have a claim for P.3M. For how much are the partners liable to the
creditors for the partnership liability?
A. Only A and B are liable equally to the creditors being capitalists
B. Only A and B are liable 1/3 and 2/3, respectively
C. All of A, B and C are liable pro rata to the creditors
D. C is not liable being an industrial partner who is exempt from losses
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8. A and B are co-owners of a parcel of land from which they derive profits in equal sharing
being co-heirs in inheritance. Is there a partnership?
A. There is a partnership because of the equal sharing of profits
B. There is no partnership because co-ownership by itself does not establish a
partnership despite the sharing of profits
C. There is no partnership since in partnership division of profits is not always necessary
among partners
D. There is partnership they being co-owners and co-possessors
9. A and B are partners in Ace partnership. While A was performing his duties as a partner in
the conduct of the business, he negligently caused damage to X, a third person. Who shall
be liable to X and in what capacity?
A. Only the partnership shall be liable it being a juridical person separate and distinct
from the partners
B. Only A shall be liable for he is the only one at fault
C. Both A and B shall be liable solidarity to X
D. A, B and the partnership are all liable solidarity to X
11. A, B and C as partners in a partnership stipulated and mutually agreed that A shall not
share in the profits and losses. In the agreement valid as among the partners only and not
against third person?
A. Yes, because among the partners it is valid to exempt one from sharing in profits and
losses
B. Yes, valid as long as third persons are not prejudiced
C. Not valid stipulation exempting a partner from sharing profits and losses
D. Not valid as against third persons or partnership creditors
12. A newly admitted partner shall be liable for the pre-existing obligation for the partnership at
the time of his admission in favour of partnership to the extent of his capital contribution.
An industrial partner shall not share in the losses and his share in the profits shall be just
and equitable under the circumstances.
A. True, true C. False, false
B. True, false D. False, true
14. A partner who is liable to the partnership for damages due to his fault may claim
compensation if through his extraordinary efforts in other activities of the partnership
unusual profits have been realized.
A partner shall be the debtor of the partnership if he fails to deliver his promised
contributions and shall be in delay from the time of a demand from the partnership.
A. True, true C. False, false
B. True, false D. False, true
15. A contributed P1M, B contributed P1M, and C contributed services. They agreed to divide
the profits and losses equally. In case of loss of P.3M, how much, if any, is C liable?
A. Nothing, because an industrial partner is exempt from losses
B. P.1M but with reimbursement from A and B equally
C. A and B alone shall shoulder the loss at Cs option
D. P.1M
16. Suppose in the preceding case, there was no agreement as to profit-loss sharing, what will
be the share of C in the profit?
A. Equal to the share of A and B C. P1M
B. Just and equitable under the D. Court to fix his share
circumstances
Page 15 of 25
17. Based on the preceding number, what shall be his share in the loss?
A. Equal to the share of A and B C. P1M
B. Just and equitable under the D. None
circumstances
19. First statement- The arrival of the term of a partnership with a fixed term of period shall not
dissolve the partnership if the partners continue with the business of the partnership but
such partnership may terminated anytime dependent on the will of the continuing partners.
Second statement- A partnership with a capital of P3 000 or more to money and property,
must be in a public instrument and registered with SEC in order for the partnership to be
able to maintain an action, in its own name against third party.
A. True, true C. False, false
B. True, false D. False, true
CORPORATION
1. Which one of the following those not require stockholders approval?
A. Merger or consolidation C. Amendment of articles of incorporation
B. Change of corporate name D. Declaration od cash dividend
2. Statement 1 After the quasi-reorganization of the corporation has been effected and
approved by SEC, the corporation shall disclose on all its financial statements for a
minimum period of three (3) years the effects of such quasi-reorganization to the financial
condition of the company.
3. 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 adopt by-laws
C. To dissolve the corporation
D. None of the above
4. Except for one, every corporation whose charter expires by its own limitation, or annulled
by forfelture 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
To be a de jure corporation, it must be existing in law and in fact unlike a de facto one
which exists in fact but not in law.
A. True, true C. False, false
B. True, false D. False, true
7. A subscribed to 1 000 shares of stocks of X Corporation and paid 25% of the said
subscription. Can he vote all his subscribed shares?
A. No, because the subscription has not been fully paid
Page 16 of 25
B. No, because his shares have become delinquent shares
C. Yes, as regards the paid percentage of the subscription
D. Yes, because shares although unpaid but not delinquent can be voted
8. X Corporation posted a P1M profits in its realty business and its real estate has appreciated
in value to the tune of P4M. The board then declared dividends computed on the basis of
P5Mn representing profits and appreciation in the value of its real estate. Is the dividend
declaration valid?
A. Not valid because there was no 2/3 ratification by the outstanding capital stock
B. Valid being based on profits and increments in the value of the corporate assets
C. Not valid because dividends must come only from the profits
D. Valid if creditors do not object nor protest against the same
9. A subscribe to 100 shares of X Corporation, paying 25% thereof. Despite the demand by A
for the issuance of the stock certificate, the corporation refuses to issue one corresponding
to the 25% paid. Meanwhile, the corporation has become in solvent and A now refuses to
pay his unpaid balance on his subscription. Is the refusal to issue a stock certificate valid?
A. Not valid, because the stock certificate can be issued for the paid portion of the
subscription
B. Valid, because stock certificate can only be issued after full payment of the
subscription
C. Valid as regards the unpaid percentage on the subscription
D. Not valid because only delinquent shares may be denied stock certificate
10. Based on the facts in the preceding number, can A validly refuse to pay the unpaid balance
on his subscription now that the corporation has become insolvent?
A. No, under the trust fund doctrine for the protection of the creditors
B. No, under the doctrine of piercing the veil of corporate fiction
C. Yes, because of the insolvency of the corporation which also extinguished his
obligation to pay the balance
D. Yes, because of the denial of his right to stock certificate
13. In the three of the cases, all shares have voting rights, except:
A. Election of directors C. Dissolution of the corporation
B. Increase or decrease of capital stock D. Merger or consolidation
14. At the annual meeting of the corporation for the election of the five directors, A, B, C, D, E,
F and G were nominated. A, B, C, D and E received the highest number of votes and thus
proclaimed as elected. F received then (10) votes less that E. Subsequently, E sold his
shares to F. Who, between E and F has the right to attend as director?
A. E is the director because his term is one year until his successor is elected and
qualified
B. F is the director because he has bought the shares of E
C. Both of them shall be directors
D. Neither of them shall be director
15. ABC Corporation has an authorized capital stock of P1M divided into 50 000 common shares
and 50 000 preferred shares. At its inception, the corporation offered for subscription all the
common shares. However, only 40 000 shares were subscribed. Recently, the directors
thought of raising additional capital and decided to offer to the public all the authorized
shares at their market value. Would X, the stockholder of 4 000 shares have pre-emptive
right to the remaining 10 000 shares?
A. Yes, because all stockholders have pre-emptive rights to all issues of shares of any
class in proportion to their shareholdings
B. No, because pre-emptive right does not apply to unissued shares to be issued
C. Yes, because pre-emptive right applies only to the issuance of unissued shares
D. No, because he has waived this right when he subscribed to a part only of the
issuance of shares
16. Based on the facts of the preceding number, would X also have pre-emptive right to the 50
000 preferred shares?
Page 17 of 25
A. Yes, because all stockholders have pre-emptive rights to all issues of shares of any
class in proportion to their shareholding
B. No, because pre-emptive rights do not apply to the issuance of unissued shares
C. Yes, because pre-emptive rights apply only to the issuance of unissued shares
D. No, because X has waived his pre-emptive rights to the issuance of preferred shares
when he subscribed to the common shares
17. The corporation has a nine-member board of directors. Two of the members sold their
shares while two others are abroad. To have a quorum, the number required is
A. Seven B. Five C. Three D. Four
18. Which of the following requires the approval of the majority of the outstanding capital
stock?
A. Investment of corporate funds in another business or corporation
B. Amendment, repeal or adoption of by laws
C. Dissolution of the corporation
D. Amendment of the articles of incorporation
21. Three of the following are required for the existence of de facto corporation, except
A. Incorporated under a valid law C. Actual use of corporate powers
B. Attempt in good faith to organize D. Existing in law and in fact
25. First statement- If the surplus profits of the stock corporation reaches the level equal to its
paid-up capital, the SEC may compel the corporation to declare dividends, otherwise it will
be liable for a surtax on improperly accumulated surplus.
Second statement- In a corporation, two or more positions may be held concurrently by the
same person except that no one person shall acts as President and Chairman of the Board.
A. True, true C. False, false
B. True, false D. False, true
26. After 3 years of operation, ABC, a domestic corporation wanted to declare dividends to its
stockholders. The treasurer reported a net income after tax of P4 million. One million is
being appropriated for the acquisition of the machineries to be bought 2 months from now.
The treasurer likewise reported an increase in the value of the land previously bought to be
used as plant side from 3 million to 5 million. What amount of dividend can be declared by
the board?
A. P9 million B. P8 million C. P4 million D. P3 million
Page 18 of 25
28. The voting requirement needed in declaring cash or property dividend
A. Majority vote of the board of directors
B. Majority vote of the board of directors plus the vote of a majority of the outstanding
shares
C. Majority vote of the board of directors plus the vote of 2/3 of the outstanding shares
D. 2/3 votes of the directors plus a majority of the outstanding shares
NEGOTIABLE INSTRUMENTS
1. When the instrument is completed but undelivered, delivery is presumed to have been
made in favor of a holder in due course, the presumption is
A. Pro tanto B. Prima facie C. Conclusive D. None of these
3. Statement 1: W prepares a promissory note payable to order of X, his nephew, who steals
the same and indorses it Y, then Y to Z, from Z to A who was unaware of the theft. A may
recover from W.
Statement 2: W, a retiree issued a promissory note, to wit: I promise to pay X or order the
sum of P50 000 out of the retirement pay which I will receive from the government.
Actually, W will get more than P200 000 as retirement benefits. The note is not negotiable.
A. Only statement 1 has correct C. Only statement 2 has correct
conclusion conclusion
B. Both statements have correct D. Both statements have wrong conclusion
conclusion
Page 19 of 25
been previously dishonoured if such was the fact
D. That he had no knowledge of any fact which would impair the validity of the
instrument or render it valueless
10. A makes a note payable to B or order. The following are the endorsers of the note in the
order if their endorsements: B, C, D, E, F (holder) G (subsequent holder). The note is
dishonoured in the hands of F, who notifies B, C, D, E. Which is not correct?
A. The notice given by F to B operates to the benefits of C, D, E and G
B. The notice of C inures to the benefit of D, E and G
C. The notice to D inures to the benefit of E and G
D. The notice to C inures to the benefit of B
12. M makes a note payable to bearer and delivers the same to P who endorses it to X in this
manner. Payable to X. (Sgd) P
A. No, because the special endorsement of P has made the notice to be payable to
order and must be endorsed to negotiate
B. Yes, because an instrument originally payable to bearer remains to be payable to
bearer despite special endorsement made thereon
C. Yes, because M, as make, is absolutely liable to pay the instrument in the hands of
any holder
D. No, because Y did not acquire title to the instrument due to lack of proper
endorsement
16. M makes a negotiable promissory note for P10 000 with the name of the payable in blank.
The note is stolen by P who inserts his name as payees and then endorse the note to A,
then A to B, and B to C, who is a holder in due course. On maturity, C cannot enforce the
note against
A. M B. P C. A D. B
17. A issued a note payable to bearer. He delivers the note to B. B endorsed the note specially
to C, and C negotiates the note by delivery to D. Which of the following is not correct?
A. D can enforce the note against C C. D can enforce the note against A
B. D can enforce the note against B D. C can enforce the note against B
Page 20 of 25
amount to my account. To C, Sgd. A
C. Pay to the order of B P30 000 out of my deposit with you. To C Sgd. A
D. Pay to B or order P40 000 for payment under contract of November 14, 2010. To C
Sgd. A
22. Every negotiable instrument is presumed to have been issued for a valuable consideration.
The presumption is
A. Prima facie B. Conclusive C. Absolute D. Final
23. A, issued a promissory note payable to B or order for P10 000 for 10 bottles of whisky sold
by B to A. Later, B negotiated the note to C. Subsequently, A discovered that only 5 bottles
of whisky are genuine. As a result
A. C can enforce the note against A for P10 000 regardless of whether C is holder in due
course or not
B. C cannot enforce the note against A for P10 000 even if he is a holder in due course
C. C can enforce the note against A only for P5 000 regardless of whether is he a holder
in due course or not
D. C can enforce the note against A only for P5 000 if he is not a holder in course
24. A letter of credit is beyond the scope of the negotiable instrument law, because
A. It is in favor of a specific person or not to order
B. It is an order to pay not of a particular fund
C. It is without an unconditional promise or order to pay a sum certain in money
D. It is not payable on demand or at a fixed or determinable future
26. It contains an order to pay out of a particular fund rendering the instrument beyond the
scope of the negotiable instrument law.
A. Bill of lading C. Certificate of stock
B. Treasury warrant D. Warehouse receipt
28. A delivered to B the following instrument: One month after date, I promise to pay to B P10
000. Sgd A. B endorsed the note in blank before maturity and delivered it to C for value.
When due, A refused to pay and C sued B. Could C recover from B?
A. No, C could not sue B and hold him liable as an endorses because the instrument is
payable to a specified person
B. No, the instrument is not negotiable because it is neither payable to order or to
bearer
C. Yes, provided C to gives notice if dishonor to B, otherwise B is discharged from
liability
D. Yes, the endorsement will be considered as an assignment, hence B will be liable as
an assigned of the instrument
29. A, knowing that there is no such person by the name of B, makes out and signs a
promissory note payable to B or order. A delivers the note to C. C in turn delivers the note
to D without endorsement. Later, D delivers the note to E, a holder in due course. Which of
the following is correct?
Page 21 of 25
A. Being payable to order, the note can be negotiated by endorsement and delivery
B. E has no right to collect from C because a person negotiating an instrument merely
by delivery is liable only to the immediate transferee
C. E becomes holder only if D will endorse the instrument
D. The instrument is not negotiable because it is payable to the order of a non-existing
person
30. A makes a negotiable note to bearer and delivers it to B for safe keeping. The note is
negotiated by B to C. Can A refuse to pay C on the ground that the note was originally to B
for a special purpose only?
A. Yes, A can prove that he deliver he delivered the instrument to B for special purpose
B. No, where the instrument is in the hands of any holder, a valid delivery thereof by all
parties prior to him so as to make them liable to him is conclusively presumed
C. Yes, because B negotiated the note without authority
D. No, if C is a holder in due course
31. A made negotiable promissory note in favour of B who negotiated it to C under the following
endorsement. Pay to C after passing the CPA examination in October 2010. At maturity of
the note, C presented it to A for payment and it was duly paid, C did not pass the CPA
examination. Which of the following is correct?
A. The promissory note is not negotiable because of the condition imposed
B. The promissory note becomes negotiable because of the condition was satisfied
C. A had no right to pay C and, therefore can compelled to pay again
D. A may disregard the condition and make payment whether the condition is fulfilled or
not
32. When the instrument is complete but undelivered, delivery is presumed to have been made
in favour of the holder, the presumption is
A. Conclusive whether holder in due course or for value
B. Prima-facie whether holder in due course or for value
C. Conclusive if holder for value and prima facie if holder in due course
D. Prima-facie if holder for value and conclusive, if holder in due course
33. The endorses who simply signs his name renders himself liable to all subsequent holders as
A. Primarily liable C. Secondarily liable
B. Solidarily liable D. Subsidiarily liable
34. There is no difference between a holder in due course and one who is not, since as regards
them, real and personal defenses may always be raised if
A. Intervening parties C. Immediate parties
B. Remote parties D. Subsequent parties
36. A note reads I promised to pay or order P1 000, 30 days after B receives the proceeds of
his loan from ABC Banks, Sgd. A. The instrument is
A. Subject to a condition
B. Payable at a determinable future time
C. Payable on demand
D. Non-negotiable because the payment is indefinite
37. The drawee bank may not refuse to pay checks drawn if
A. If there is a stop payment issued by the drawer
B. If the drawer is solvent
C. If the drawers is deposits is insufficient
D. When the bank receives notice of the drawers death
AGENCY
1. A, agent of P, in excess of authority, entered into a contract in the name of P with X who
know of the lack of authority and P did not ratify the contract. The contact is:
A. Rescissible B. Voidable C. Unenforceable D. Void
Page 22 of 25
just cause
3. If two or more principal appoint a single agent for a common transaction, the ability of the
former shall be solidary.
If two or more agents appointed by a single principal are jointly liable unless solidarity is
stipulated
A. True, true C. False, false
B. True, false D. False, true
4. P authorized A to sell his products with 10% commission and 5% guarantee commission. A
sold them to B who failed to pay despite the diligent efforts of A in collecting. Is A still liable
for the purchase of the price?
A. Yes, because of the guarantee commission given to him
B. No, because he was not at fault in the collection
C. No, if he returns the guarantee commission
D. Yes, and he is entitles anymore to the commissions
5. In the three following cases, the agent can appoint a substitute, except:
A. The principal authorized him to appoint a substitute
B. The principal did not authorize him to appoint a substitute
C. There is no stipulation as to the appointment of a substitute
D. The principal forbids the appointment of a substitute
6. P appointed A and B as his agents for a common transaction and they agreed that the latter
shall be solidary liable to the former for damages in case of violations of their obligations as
such. When is the agent at fault the only one liable for damages even if solidarity has been
stipulated?
A. If the other agent is not at fault
B. Both then shall be liable always since solidarity was agreed upon
C. If the one at fault shall answer for all the damages
D. If the one at fault acted in excess of authority
7. P authorized A, a minor, to sell his car for P1M in cash. A sold the said car to X on
instalments at a lesser price of P.9M. P is now repudiating the contract with X on the ground
that he is not bound since X contracted with a minor who exceeded his authority. Decide.
A. P is liable under the contract because it is enough that the principal is capacitated
since he is the one entering into the contract
B. P is not liable for the sale on instalments since it is unenforceable because his agent
acted beyond his power
C. P is not liable because the agent is a minor with whom X contracted
D. P is liable provided the sale is in cash for P1M
11. A appoints B as his agent to sell his land. Which of the following is perfectly valid?
A. The authority of B is in writing and the sale of the land in favor of C is oral
B. The authority of B from A is by way of letter and B sells the land to C in writing
C. The authority of B is oral and B sells the land to C for P50 000 in a written contract of
sale
D. The authority of B is in writing but the sale of the land in writing was made beyond
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the period expressly set forth by A
2. D mortgaged his car on C as security for a loan. Failing in the payment of the loan, C
foreclosed the chattel mortgage and sold the car at public auction. In case of deficiency, is
D liable for it?
A. Yes, in the absence of contrary stipulation
B. No, because it would be unjust enrichment on the part of the creditor
C. Yes, if so agreed upon by the parties
D. No, unless stipulated
3. Based on the preceding case, suppose it was a pledge, would the debtor/pledger be liable
for the deficiency?
A. No, notwithstanding stipulation to the contrary
B. No, unless otherwise stipulated
C. Yes, if so agreed upon
D. Yes, even in the absence of stipulation
4. D mortgaged his parcel of land to C as security for a loan. Fearing foreclosure of the
mortgage due to his inability to pay the loan, D sold the land to X without the consent of C.
Is the sale valid?
A. No, unless there was prior consent of the mortgage
B. Yes, stipulation prohibiting the sale without the consent of the mortgagee shall be
void
C. Yes, provided the mortgage was notified before the sale
D. No, if there was stipulation requiring prior consent
5. D owes C a sum of money with M as mortgagor of his land to secure the loan. In the
mortgage valid even if the mortgagor is not the debtor?
A. Yes, provided the mortgagor of the pledgor in case of pledge is the absolute owner of
the property mortgaged or pledged
B. Yes, provided it is in writing and registered
C. No, the mortgagor/pledger must be the debtor himself
D. No, unless the mortgagor is a co-debtor
6. D is indebited to C in the amount of P200 000 and delivers to C his diamond ring by way of
pledge. If D sells the same diamond ring to T, when will T acquire ownership of the same?
A. From the time the sale is perfected between D and T
B. From the time T pays the price to D
C. From the time C consent to the sale between D and T
D. From the time T obtains actual possession of the diamond ring
7. A borrowed from C P1 000 000 to secure the payment of which the former verbally agreed
to deliver his 4 hectares agricultural land by way of antichresis and to pay 12% interest per
annum. The contract of loan and antichresis
A. Are both valid
B. Both null and void
C. The loan is valid but the antichresis is null and void
D. The contract of antichresis is valid, but he loan is null and void
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8. This is not a characteristic of pledge
A. Bilateral B. Nominate C. Real D. Consensual
10. The pledge has a right to the reimbursement of the expenses for its preservation, and is
liable for its loss or deterioration.
If through the negligence of the pledgee, the thing pledged is in danger of being impaired,
the pledger may require the pledgee that the thing be deposited with a third person.
A. True, true C. False, false
B. True, false D. False, true
11. A borrowed P50 000 from B and offered his land by way of a mortgage. If it is stipulated in
the contract that if A fails to pay the debt on time, B shall become the owner of the house,
the stipulation is
A. Valid if it has traditionally been allowed
B. Null and void because it is a pacto comisorio
C. Void because it is equivalent to alienation of property in favor of the creditor
D. Valid because the house would automatically serve as payment for the land
12. A owes B P5 000 and as security, A pledged his diamond ring. Later A borrowed again P2
000. As a result
A. B has a right to retain the thing until the P7 000 is paid
B. B has a right to retain the thing until the P5 000 is paid
C. A has a right to demand that the thing be deposited with a third person
D. B has the right to use the thing pledged until the pledge effects payment of the
obligation
13. X borrowed money from Y and gave a piece of land as security by way of mortgage. It was
agreed between the parties that upon nonpayment of the loan, the land would already
belong to Y. If X failed to pay the debt, would Y now become the owner of the land?
A. Y would become the owner because it was agreed upon by them based on the
principle of autonomy of contracts
B. Y would not become the owner because the agreement that he would become the
owner upon default of X against the law
C. Y would now become the owner but with the right to redemption by X
D. Y would not become the owner if X annuls the voidable agreement
14. Alcomendas mortgaged his house and lot in Quezon City to Bongoran. May Alcomendas sell
the house and lot to Cabalquinto?
A. No, otherwise the sale is void
B. Yes, if there is no stipulation forbidding the owner from selling the mortgaged
property
C. No, if there is a stipulation forbidding the owner from selling the mortgaged property
D. Yes, even if there is a stipulation forbidding the owner from selling the mortgaged
property
15. Alfelor borrowed P50 000 from Bayani and as security for its payment mortgaged his car to
Bayani. Upon failure to pay, Bayani sold the mortgaged chattel but the proceeds did not
fully satisfy the secured debt. Can the mortgagee recover the deficiency from the
mortgagor?
A. No, the provisions of pledge prohibiting recovery will apply
B. No, the provisions of Recto Law will apply
C. Yes, there is no such prohibition under the Civil Code although prohibited under the
Chattel Mortgage Law
D. Yes, there is no such prohibition under the Civil Code and in the Chattel Mortgage
Law
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