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ReSA

The R.eview School of Accountancy


'ETel. # 735-9807 & 734-3989

BUSINESS LAW: Pre-week Lecture

Atty.M. S. Bonafe

1. A, B, and C as partnens in a padners in a partnership s,tipulated and inutually agreed Urat R sfratf66?ilrare in the profits
2'and losses. Is the agreement valid as among the partners onfy-and not against third perscns?
Yes, because among the partners it is valid to exernpt one ftorn sharirg in the profits and losses,
Yes, valid as long as third percons are not prejMiced.
1c 'r Not valid stipulation exemptirp a partrrcr frorn sharing prof,rB and lcses.
Not valid as against third persons or partrrership creditors.

'--

a.
L
d.

2. A newly admitted partner shall be liable fior the pre-o<isting obligations of the parbrership at the tinre of his admissbn in
fa,t.lrof partnerchipcreditorsuptotheextentof hiscapital contribution.. -.--t;, '',t y,,_t,t

t,"

I'l a{ 'VtYl"

,;r iridustrial parher shall not share in the losses and his share in the profits shall be iugJ_aOd-equitabk- under the
ai.itmstances,
First stdrertent is false, second statement h true.
tiotn
are true.
Q_')

--.-

c. Second staternent is falsg first b tru.


d. Both are false statements.

3. Three of he following dissolve a partnership, qISp!:


Partnership business has bemme unlawfulT f
Death, civil interdiction or insolvency of a partner. ,

.r.
.

4, Sp'rral power of attorney is necessary in the folbwing c


To make such paymenE usually considered as ads of admioEt&!!o!;
(
t. io compomise, to submit questions to arbrtration;
i ,t,.,tl
1... To bind the principal in a contr I of paftiership;
-{r "1 e
.j. Any other act of strict dominion.
tr
ilac"l[",-y- ' i.

a.-

---t

-->y*rJ'

,,

l-[f

5 H pa:trrcr

who is liable to the partnersh,p fir,ldrmag", O* to his fault may claim ffih.iil#.iif
extraordinary efforts in otlrer activiths of the partner:;hip unusual profits have been reEiiTecl. -

,, ,.

hii

tnrough

r.

_ ,1 ,.,

p if he fails,to deliver hb prornbed contrihrtbn and shall be in delay from fiE


).t11,r1
yr

l', ff ,Jrl(t.l

c. First is tnre, second


d. 8oth are true.

is

false.

r,6{rtqil, , _rD.( a, \,t.J

6. A contributed P1M, B contributed PtM, and C contributed services. They agreed to divide the prcfts.a:r_-d_lqgsqs eqrally. In
case of loss of P.3M, fur how much, if any, is C li,able?
Nothing, because an industrial partrer is exqnpt from losses.
P.1M but with reimh,rrsement from A ard I equalty.
A and B alone shall slouder the loss at C's option.
(;,rrr t
,,'
P.1M
',1 o.iri

a.
b,
c.
O
Li

-.r

7. Suppose in the preceding case, there was

/p.

r Just and

equitable under the

no_

agreernent as

profit-loss sharing, what will bie the share of C in fie profit?

circumstarrces d. Court to fix his share.

8. Based on the preceding number, what sfrall be his share in the loss?

a.
b.

Equal to the shares of A and B

lust and equitable under the circumstances

c.

(')*on"

9. A subscribed to 1,000 shares of sbck of X Corporation and


subscribed shares?
No, because the subscriptiori has rrct been tully

a.
b.

PIM

pid

25o/o

paid.

of the said sr.bscription. Can he vote all his


[tt ['llrl- ' u''rtlct\ ''r,'\ icrf

No,becausehissrureshavebecornederinquentshares.

k-, Yes, as regards the paid percentage of fte subscription.


,.11 , to, because shares allfiough unpaid but mt delinquort can be voted.

ftLtr.l(.,1[rr,[,

1,

..,i..,.i',.t

10. X C-orporati,on posted a P1M proft in its realty business and its real estate has appreciated in value to the tune of p4M.
The board then declared dividenG computed on the basis of P5M representirq pofiE ard appreciatbn in value of its
real estate. Is the dividend declaration valki?
Not valid because there was no 2/3 ratification by the outstanding capital stock.
b._ Valid beirg based on profits and irrcrements in the value of the corporate 6sets.
: i(a 'tlolvalid because divirlends mustconre mty from the
0,
Valid if crcditors do not object nor protest against the sanre.

a.
dl

profits.

i,{r,,/: r,',. , , |

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11.

. ww4v'n ,w

vYvlTtlvi,r*

,*oF^

6il f"y*^7

subssibed to 100 stnre of X corporation, payhg 25olo thereof. Despite the dernand by a for the issuance of sbck
certificate, the corporation refuses b issue one corresponding to lhe 25o/o paid. Meanwhile, the corporation has become
insolvent and A now refuse to pay hb unpaid balance on his subscriptbn. Is the refusal to issrc a stock certifrcate

A,

valid?

{
tl
d.

flot valid, because stmk certificate can be issued for the paid portion of the subscription.

b. ) VatiO,
Valid. because
becarrse stock
sbck cqtific
cst.ift te can only
onlv be issued after full payment
oavme-nt of the subscriptiorr.
srrhsrrintbrr
(U.
Valid as regards the unpaid percentage on the subscriptbn.
Not valid because only delinquent shares may be denied sbck ceftifrcate.

12. Based on tle facts in the preceding number, can a validly retuse to pay the unpaid balance on his zubscription now that
lhe corporation ha
potectbn of creditor:;
tlrfr,nfnr
/a. ) no, uMer
pqcrt) i&,til (61p','',frr('t
il of corporate frction.
No, under
o,,
'fes, because of the insolvency of the corporation which also extinguished his obligation to pay the balance.
,
Ye,s, because of the denial of his rlg

the
the

\lrl

Li

'llre

li

c(

E(

L-y-iaws may provide that ttre

the

rfard.

-,''rrr

by-la',rrs may provide that no

hold

--

lrei-ect

officer

ilrst statement is false, second is true.

bue.

c.

Both are

L4

Setond is false, first is

(d.)
qxcept:
Private corporations have the fiOllowing a 1butes,
rs' g=!:

15

Trustees

is an
A Itttl*y
6)
t1 It has t
a. It nas the pow

on[,

r.

Eue.

Jqt '

r2^- -.
Fnt

fiilil ;: ffi
tlar:,rii,, of the fottowins must q4f@Br rre enirrppirFslcepc
- z
a. Directors
c^ Incdrporators
b.

iX the members of

',r+wlvofiaafl friltf
D'r' ttov

)luk

t"

-lrtcv

"'

^n^J:

'

'tWkW

n-(lm t\ &?af
) *-*"il*" tr'^'n
'w wa v' 1 urAAtLLt
1! att'NY'
- U&5rDE\15
-=__, 9^L0'P' ' *tlaary't'.

Officers

i.allavw or charter. (

'
cocCt/p^tt. W I

rties expressly authorized by hw or incilent to its cre

dxcepti
,.
t\ Electionof direcbrs -D ufuh rcr r*i(lti fttLJc. Dissolutionof thecorporation
b. lricrease or decrease of capital stock ' '
d. Merger or cmsolklation i.
17Att.heannualmeetingofttrecorporati,onrorttreeteaMorn,.oi,oto,,,o,,..,-q,,iuffitr,-,

AlG

irl thiee of the fulhwing cases, all shares have voting rights,

C, D, and E received the highest number of votes and thus proclaimed as elected. F received ten (10) votes less than
Subsequently, E sold his shares to F, Who, between E ard F has the right to attend as direcbr?
E is the director because hb term b one year until his successor is elected and qualified.
F is the director because he has bought the shares of E.
Both of them shall be direcbrs.
ileither of thenr shall be dkecu.

E.

a.
b.
c.
(

18. ABC corporation has an autfprized capital sbck of PlM divkled into 50,000 co{nnrln shares and 50,000 prefuned
shares. At iE inception, tfe corporation offered fur subscription all ste comnpn shares. However, only 40,000 shares
were subscribed. Recently, the direcors thot{ht of rabing additicnal capital and decided b offer to tlre publk all the
res have pre-emptive right b the
81- to*s

of any class in proportion to thelr


ftrusr1()

d.
19.

No, because he has waived this right vyhen Ire subacribed to a part on ly of the issuarrce of shares.
on the facts of the precedirg number, would X also have pre-emptive right to BE 50,000 preferred shares?
Yes, because all stockholderi nave pre-emptlve rQhts to all issues of ihgres
glAgq- in proportion to their
-of-anJ.

B^ased

,6)
b.
c.
d,

sharefioldings.
No, because pre-emptive rights do not apply to the issuarrce of unissued shares.
Yes, because pre-ernptive r@hE apply only to the issuarrce of unissued shares.
No, because X has waived his pre-emptive rights to the issuance of prefened shares when tre subscribed
cornrTon shares,

the

20, The corporation has a nine-mernber board of directors. Two of the members soU their shares while two others are

Three

'P ffiililT:rTffifffi*Pof
d.

bvbws

Amerdment of the artlcle of incorporation

d.

Four

Mrr\c, il

,fi

c1

the outstanding capital stock?


poration

/,

" +u rrtrgolr pqNi +0 {e\


hrlgr,r .r *' rdc(r'1rr[r

'r''

rr"' i 'lr'
l'
Ji,,t{64 <,14,,

'1

'

22. A direcbr of a corporation may be rernoved by:


Vote of rnajority of the ouBtanding capital
2/: of the

a.
b.

.fo,ctholders

23. Inthematterof managernentof

a
b.

stod

c,

nl.l

d.-'zlz
I stock -+ w 1i/wrfuui ,itJ71lt
$ oArqoR rc1"r1'r'1r'; o"l{ J ',vtII (Al(f
thecorporation, thisissupreme:
'M

c- SbckltoHers

President

Chairnun of the Eoard of directors

C)

*ordirecbrs

24. Three of the llolbwirq are requisites tur the existence of de facto corpora
-';..Tctuat
9VC Incorporated ,tio", u ,uiid
Exbting
Attenrpt in good faith to

lr*
Niili,lrt
organize

a.
t-

use
in

l lr;ee of the following are required fur incorporators, except: &Sf pt

J;

.:
b.

They must be natural


All of legal

age

persons

iC. i I rkler in due course has the bllowing rights, except:

NI(

wers

pr

l r.-t

, arq.'

c.

Not less than five nbr npre than fifteen


dtlapnty rnust be citizens of the Philippircs

.,, He holds tlre instrurnent fnee fronr defucls of title of prior parties.
, iee om defenses of prior parties among thernselves.
' iirrorce payment against all parties liable thereon.
.
tl,lorc^( \urt(
7 , i'trlds the instrument as if it were non-negotiable. lflat, [D[ , d.ue cGurk ( ''" 1c('t;s
F

t'i

' l\t-!..Ji

ti -.
e
d

rhe fotlowing is

1.'-t

rnt negotiable instrument?

Pay to the order of Pedro Cruz P1M (Sgd) lose Santos To: A or B
, pnrmise to pay to the order of the bearer P1M. (Sgd) M
Due to Bearer P1M or a BMW car worth P1M at his option. (Sgd) M
Pay to the order of myself PlM. (Sgd) D To: W

i3. llree

Vtq^\y((,- lrr^,,J;

pwr{tg Jkt,ratii( or F

!ur(r,,.6

of the following are requisites to be a holder in due course Ecept


the instrument is complete and regular upon its face;
Tnat the holder took it in qood fdith and for value ,
l'hat he becanre the fpber of it before it was overdue and without notice that it had been previously dishororcd if
,-r Sr::h was the fact;
) mut he had rrc krcwl@e of arry fact whish would impair ttre validity of ttre instnrment or render it valueless. x

a.
:
c

l-

'l-hat

6.
\-/
2 -1.

A rla<es a mte payable to B or order. Tte blbwing are the indorsers of the note in the order of their indorsements: B,
( . l-'. '-, Fl trolder) and G(subsequent hotder). Ttre ncite is diihbhored rn-Ure hands Of F, who notifies B, e, D, E. Whieh is
frir.. COITCT]I?

.r. The
notice given by F to B operates to the benefit of C, D, E, and G.
). -ite: notice to C inures to the hnefit of D, E, and G.
c. lTre notice to D inures to the benefit of E and G.
( t{l The notfe to C inures b the benefit of 8.
hdor f'l . ,^,{o , r,e
la. (fud) A To:
hb absence X.

(ltu,,

B7

\r(,r,!

(Sgd) A To: B and X

, .1,{irr
"l
P who endorses it to x in tfiis manner:

b X. (Sgd) P."
Later X, without indorsing tjrc note delivers the sann to Y. The note is subsequently dishonored by M. May Y proceed
against M for the note?
No, because the special indorsement of P has made the note tD be payable to order and must be endorsed b
negotiate.
b Yes, because an instrument originally payable harer rernains to_be payable bearer depite spechl

"Payable

a.
ar^
b
b
\ I
L/ mOorsenrentmadethereon. ''0g(r hc,nv , atwc!( b.q,.6, ' (fu,, l6tlf,,* Lro"r, 12)
c.
c.
Yes, because M, as maker, is absolutely liable to pay the insbument in the hands of any holder.
d,

--

No, because Y diJ

mt

acquire title to the instrurnent due to lack of proper indorsement. .

notdischarsst A ' "6G 'aL;*1 k"1 d^r'(n'3 I


rrouer rrereoldror) at, or after nnttri in his own u"nat, ='v cc* [
f," m*p"r oomioffi
6:w'i;
r- eV the irten[onalcancellation of the irsEumqq!_

32, Th-e neqouabte instrumenr b

rr-'v";'s [""

X
t
,. .
**"i, *"O-,nt**i1D arcoo*t,dale J P"\ 1""'l
'ti' 'int,, tl
Cd. r:r;;yt";;ff;;
other act which discharges a simph conmct for the payment of morrey.
By any.other
t

ltrlf[ol[
g"[9"
.!u,r 1..rfl
[r[t rn,rv
1q,ry aaUcti
9'Cr,-,i\<,r
distil uished from dation in payrnent

33. Payfircnt by cessbn as

Thedebto

C.

The

p. ) fne

d,

emect
prope

What is delivercd by the debtor is meely a thirg

things ceded or assigned.


faction of a debt in rnoney.
to be consirlered m the equivalent of

a perfornnnce of the

obligation.

z*.fi'\

/:''R,s,t,A

RetiA: I ne Reueu, scnool ol Accluntancy


'I
'
,1. i:
i (,

Page 4 of 19

P2O,OOO whhh irccame due and payable hst June 23, ZOO[. On tlmt datE A offered B P10,0O0, tfrc otly
money he then had, but B refused to accept ttn payment. A thereafter tnet C, 8's 23 year old son, b whom he gave
the P10,fi)0 wrth tfrc request that he tum ttn noney over to B. The money was stolen while C's possession. How
rnueh rnay B still recover frorn A?

34. A owes B

P20,(mo
b. P10,000

c.

Q. 35.

P15,000

c. P -0-

If a third persons pa)6 an obligation. What are the rights, whhh are available to him if he pays the obligation with the
knowledge and consent ot the debtor?
Fi,st Answer - He can recover fiom the debtor the entire annunl which he has paid.
Fecond Answer - He subrogated to all of the righB of the creditor,
c. Only the first answer is conect
Both answers are correct.
d. Only the second answer is correct
ilriiir lnswers are wrorB

i.r.
l.
i't

. E anci executed a promissory note binding themselves tro pay f}9,000 to X, Y and Z. The note is now due and
,reoldrddble. Can the creditors pnxeed against A alone for tste payment of tfn entire
fio. e;rch creditor can collect only P3,000 ftom A.
b--. ':i,, erttitr X, Y or Z can colbct P9,000 fiom A.
,,io, dcl'r..rerfitir can collect onty P1,000 ftom A.
YEs, ,riJ;6p thc promissory riote is silort with respect to the r(lhts of the creditors, tfE obligation is presumed b be

.:

ffit.

a.
1i.
' t.

;olicriy.
:i''.

I,rsiire

lio.fii,

lupBlse tlut C is insolvent, can A and

be held liable

br

his share in the obligation?

a. Yes, the rleirt shall be pesumed to be clividecl into as many equal shars as there are debtors.
l, Yes, but A ;.nd B will be liable proportionately.
No, the debts are corsidered distinct frrorn one alrcther.
6
-S.t ll),
onil either A and B but not both will be liable.
,t

j8 Using No.51, suppose that the oblEation

was about to prescribe, but X wrote a letter b A dernanding for payment of


tire entire delrt, will this have tfie effiect of intemrpting the running of the period of prescription?
Yes, because the demand macle by X covem the entire debt and will therefore inure E the hnefit of the other

il,
/-'
ireditcrrs.
ies, insoFar as A is concerned hrt mt with regard to I ard C.
V-f
. ti()t trr-ar-rse the demand should have been rnade to all the debbrs.
:;. ,'r,'r, ril re creditors should have rnade the dsnand
^tf.

')

,,i;r r Nc. -fsi'anrl artrEriptix]*sets in, trcw much can Y collect from A?

,,. l!1,0(i0
,: i,iotrC
'ft
.1J. rusrr'rg; ilo. 154. how riruch can X collfft ftorn A?
i. fxJ,000
b. -P3'r:00c
w :' fi6t1
-7

'{

41. Intlivisibility as distinquished ftom solldarity.

a.
b.

c.
6)

Lz

c P1,000
p.Y+
\
/--,
c.,.P1,000
d. P -0-

--' 'tr,y.t ,,r'n ,,i,' (.;'cl'ir


When the obligation is converted into one of indemriity for daniages because of breach, the character of the
Pluralityof

sufittisidivisit{e.

1n1[i'1rr

roll(

obiigatbn rernains
Refers to the hqal tie or vinculum
nefers to

fie prtstatkil

with onstimes Ble

objct of Ule oblbatbn. '

42. When one of the parties has broight an action to enforce the instrument he carrrnt subsequently ask br its reformatbn
,Ihe injurcd party may seek rerission, even afts he has chosen fulfillrnent if the latter should be{ome impossibh.
(a, , True,
c. False, tue
b. True, false

urre

43. A source of obligation

a.
b.

mt arising frorn hw'-

Negotinrum gestio
Solutio indebiti

---*-'*

'14. The loss or deterioration of the thing intended as a substjtute through ttre negtigence of the obligor does not render

him,

liable ,

i
45.

person alternatively bound by

a.

b.

Th
a.
b. At the domkile
(c)'.

Y-

diftrent prestations shall cornpletely perftrm one of them

c. False, true
d. False, hlse

rTrue, Eue
True, false

nd if the undertaking is to deliver a trterminate$ring, the payment shall be nude


_-/_ ,\_
r(.i..., {r,,1t,.1, ,..
rJ.^.

of the sedibr
Whereve the thing might be at tfn nrcment the obligation was constituEd
Wtrererrer the thing mfint ne at the amount trre obligition is to be

tutfiiled

k^f1
\.(
,..-f r , r,vr {[., thr''l i
I

mt needed b put the debtor in defiault, except


'-a:.- I Wnen denrand woutd Ue
b. ,When Se parties so $ipuhte
When Ume b of Ete esserrce
When ttrc fixirg of the time is the controlling motive for the establishment of the conbact

45.Des.Bnd is

c.
d.

useless

'-s

,.,

ltgoA: t ne reueu,

UGnOOI OI

ACOOUnEnGy

Page 5 Ol 19

:'/ i.,,r/, ,,,f , t. ,4r,t


47. Qrlpa aquiliana'aS distinguished ftom culpa contractual
Proof of due diligence in the selection and supervisbn of employees is not available as a defrnse
Proof of the contract and of its breach is sufFrcient prima Facie b warrant recovery
nce of the defendant is merely an incklent in the perfurmance of the obllgation
or liability is the deferrlanrs negligert act or omissiofl ilsdf

a.
b.

qB.
,a,
(n.
-.1
c.

rr.

shed frorn

J# i''

iability may be waived

couts
cause damage or prejudice
Responsibility arising thereftcm is demandable

4.). A t,assenger on a truck was hurt but in a criminal case against the driver, saiJ driver was acquitted. The victim now
>l r.: lih c'.rrrrer of the truck for culpa contractual. May the suit still prosper?

, I\lo, tlris will constitute double jeopardy


ilt of the accused w6 not prcven by proof beyond reasonable doubt
. , ..,. llo- r
1,.t1 '(, li,rlui ' ,/ri,
theexistenceof theconbactof carriageandtheinjurk=suffi.
'
ligence of the driver.
o Yes,
i(r .

the ohligor binds himself to perfonn his obligation "as soon as he shall have obtained a loan" from a certain bank.
obligatiorr is
',Vilh a term
i Wirh a suspersive

:,-1i.,

f-.
.

ii
i,

condition n,.-t
^iE

"

c. With a period
d. Wilfi a resolutory

pt.,rr<f

condition

1. O rc ts not a requisite needed in order that obligation shall be extinguished by loss or destnrction of a thing due
When the obligation is to deliver the house located at 123 Recto, Avenue, Manila

a.
i',
'U

When tie hing is lost without the fault of the debtor


A_'/Wnen

52 I:

nreoollqation is to delivera brard new Honda Strcohredorange 7


When tne hing is lost befure the debtor incu ed delay

presupposes not only that the obligor is able,

redy

and

.
t'j

obtiqatioir
Prix'rissory note
Bill cf exchange

.willing
rl'l

n,nr,,.t t[. ]l

but also rnore so, in the act of perfiorming his

'

r1..1','i,, ,1,.. n,L ..'-.,,.,.,- .. ,-tI


d ObligBtiontosell \f,t lD' lrt,t(1.1
, ...,.i,..t
1,,,,,,
i.i A r;,.:t; a loa.r of P1M ftom B which becornes due on Ocbber 1, 2003 and rnortgaged his trouse as security fur the 6t.

a
t

\c.)Teriderof payment -.,

Ori Jti-re 30, 2003. the nnitgaged horce completety desboyed by fire thru the lault of C. A week later, B demanded
L.;.ivr'lient

frcm

A. ls B's dernand

valid?

r r.ll,, tne oestruc'Lton of the house was rrct Uru trtc' fault of A
b i'lo, ttre obligation is one with a clefinite perrcd which is deerned intenffi fs the benefit
/^'. rti,diu
( c Yes, tlrc debt becornes dernandable unless A can give amther secrrty equally satisfdctory
{. Yes, the debt becomes demandable even if A can give arrcther security equally satisfactory
54. An acticn Eo imBlgn the acts of a debtor intended to defraud the creditor is
a. Accionreivindkatoria
c. Accion redhibitoria
d. lAccim paulhna :
b. Accbn subrogatoria

of both the debbr ard

1 ,.,,.t

:r

55. A owe B P11,000 due on )uly 2, 2003. B owes A P6,000 due on July 3, 2003 and P4,fi)0 due on July 10, 2003. B owes
C P11,000 due on July 3, 2@3. On July 3, 2003 cannot pay C so B assigns to C her credit of P11,000 against A,
without the knowhdge of A. On July 10, 2003 C bies to collect from A the P11,000. How much can C cornpel A to pay?
a. Pl1,000
,c. P5,000

b.

P 9,000

(o

rtroo

56. Ihe conEact must bind both contracting parties, its validity or compliarrce cannot be left to the will of one of them, and

'r

c. Relativity of contract
d. Obligatoriness of contract

57. 8y this prirrciple, contracts take effect only upon the contractrng paftJes, their assigns or st Ccesso_ E in interest
Mutuality of contract
c. klativity of contrrct
d. Obligntoriness of contract
Freedom of contract

a.
b.

58. The statement "Confacts shall be obligatory in whatever ftom they have been entercd into
,--fio1their validity are present" refurs to

onfacts yr,l' t',t l;'t1rrrrr


b.' Real contract .r.,g, I r<..1 i,, .{.

( a.)

Cnnsensual

l()r

'- r
c. Formal contractst' t t
r: , i,-,., d. Solemnaortaaatt " "

proviffi all the requisites

'. '' 'r

59. A conuact in whkh a person literally contracts with himself is


c. Accessory contract
Adhesion
d. Unilaterdl conbact
lumcontract Dor.trr - I

contract

a.
,6')

60. If the obliTauon of the debtor is "I will pay vou my debt after I have arrived from abroad." The obligation is

g-\

(b.

Valid

)void

'-'.r,'(

Y,'
,\

"'t',,'

(,r r,\,
cr{

'
1,,

1i1 .,

c. Voidable
d. Unenforceable
,,:.i1tlx

KgDA: lne KeugtY

UCIIOOI Or ACCOUnEnGy

PaEe 6 of 19

61. When a third person assures the payment of the obligatron Uthoullthe knowledge of the debts but with Ule consent
of the creditor, there is

-a-\

b.

c. Subrogation
d. NovaUon

Delegacion
Expromison

62. This obligation is demandable at once


^a" With a suspersive cordition
\

b: ) Witha oeriod

indienr, .,,i

C. When my means permit me to do so


d. When it depends on the happening of a specified event

.I

63. The folbwing are void contracts, except

a.
b

A contract whereby X pomised to

live as the common-law-wifu of Y without the benefit of marrbge in


cersideration of P1, 000,000.
An ;lgreement whereby A is to render scwice as a servant to B without compensation as long as A has not paid him
debt.

A 'iole the car of B. Later they entered into a contract whereby B would rrct prosecute A in consideration of

C,

i'i00,000.

rd

A stipulaton in a conf,act of lease whereby the landlord can go to couft to eject the tenant in case of failure of the
latier to pay the rent agreed upon. . / I ,1 .

; i{ '? ,:nd'l solidarily bcrund the-mselves to deliver to S a Honda motorcycle valud at P60,fi)0. The oblbatinn was not
h..5lleC ti'r'ouqh the fault of l. Thereupon, S filed an action in court against N and the cout awarded P72,000 to S
l;1i.sei'ling Ehe value of the motorcycle plus damages. Which of the following situatbn is valid?
:. if li pays S the P72,000, N can collect from R and J P24,000 each
l-' 5 ins to ccrlect P24,000 each from N, R and I to satisfy the court's award of P72,0@
refuse to pay the penatty because it should be charged against

f,.1
'cl
. if S strceeds in ollecting the P72,000 from N, N in htm can collect
i''l carr

6:. A, .r leeprey driver driving

necklessly caused

rriorc

physical injuries to his

which of tne following is nqJ,corect?


a--E may proceed aqainst A fur culpa criminal
;4r. b r,uy proceed agairst A fur culpa contractual
66.

i;

pcserper

B and pedetrian

c. C may pmceed against A for culpa


d. C may proceed agEinst a for culpa

C.

As a result

aquilana
criminal

a bus driver drivirg negligendy, killed his passenger B and @estrian C. As a result
B may pruceed against X's enployer and the source of liability is the crime committed by A or culpa criminal
B meiy proceed against X's empbye and the source of lhbility is the breach of contract of carriage or cupa
Ldntractual.
C rrray oroceed against X's employer and the source of liability is the crime committed by A or culpa criminal.
C rnay proceed against X's employer and the source of liability is the euasi{elkt committed by A or culpa aquiliana,
t. and 3
2,3 and 4

1
2.'
3,
4.
d.
(1

l, the guilty party.

fr,orn R P20,000 and frorn J P32,m0.

( o lr,2,3and4

2and4
.

r'tg,rr,3

57 llrcre is novation of the obligation if


t;lrcuer-ffipaymentiishortenedfrom5yearsto3years. "
pavment is qlenqgl from 3 vears to t t".:"i"e,

3]_Il-ffitff"tr

,6. trrue, fabe

d.

68. In {blank'indorsemen! the inrlorser renders himself

a.

/'h

Secondarily liable

(. aqT lmmediate

b.

partEs

Rernote parties

l,^r[u 9t

nubo^r6.1,.^

{ -t.

behveen

itt,

l,,rlr,' '.

'.-^,*,((
)

Ltlt lF rt lr rr\ (lr(terl4tr"(t


$ lrnr(c , !r, ro{ l,c.[tr
frLcrnl {L'r" r' ' ir lr'lt" 'f r'r'ti''' It''

C.

c. Intervenirg parties
d. Subsequent parties

. MJr,(, (

r)r

False, false

c. Solidarily liable
d. Subsidiary liable

'Frimarily liable

69.8Dl and personal defen-s may be raised

^<'1r'[r',1'' - - rr''rrr':11-

-'t wi,c h,.g k.,co{o-o., rr./'(orJ'.'(t;li lY


(c._ Want of delivery of an hcormlete instrwnert
irducenrnt
want of conskleration
bl6uress in the absence oFph-y*ffifpressure

70. This is a real defenses


Fraurd is

a.
b.

-(
'\

7I. A, with vt9!egJg.l'er-SF, inurnidated her husband

a. Rescbslble'-D ..roidable . z t .,r 1-:. ,(; , 6[,


11

to$ll

hb exclusive property

b her.

The contract of sale is

c. _Unenforceable

(fioid
\)

72. B, husband of A, in his capacity as head of $re family, sots a parapheral property in her name to C, witlrout A's conss11.
The contract of sale is

a. Resclssible
b, Voidable r. . ,.

G. pr*nror.oUtu
d.'Void

L999, at age i6.-A soE his land tur P4M payable at plM in 1999, p1M in 2000, p1M in 2001 and p1M in 2002. In
2C[4., A wants to annul the contract on the gmund of minority. will his mtion prosper?
No, A is allowed to ask for annulment of the contract
perfection of fl-re contract
(q9/
has 4 years counted frsn the time lle becornes
Irnent of ure conh?ct -) nc
r
-Yo,.l
!ir,,Ui,p+.
t
No, the accepEnce of the instalknent payments
,"
Yes, provided A was tfien acting in good faith when he sold

73.|n

,a,
c.
d.

on
o
amounted

r
(^,.t

f:.:\

r.{I

'lx;
t

-r"l'tt

2 '.ke Ft,'(r.:' 6t t
74. This contract is without effct unless ratified
c.
g. Marriage between first degree cousins
d.
,,//0.) Contraa of sale between two insane ptrsons
75.X, ofrered to sell to B 10O carbns of sardirres at a specified

a guardian and his ward


nd and wifr

by B and subsequenEy delhaered


his btter of acceptance. In view of the shortage of the catch of sardines. A failed to deliver the cornmodities it had
offered f,cr sale. B decided to sue A. Which is correct?
The acceptance of the offer only oeated an option to buy
The absence of conslJeration distinct ftom the price makes the contrmt without any obligatory furce
ttre acceptarrce of the offer to sell by showing Ure intention to buy for a price ceftain creates a bilaEral aonUact to
,d
*ltand buy
The acceptance of the offer to sell constitute a binding contract of sale provided the option was supported by a
s ufficient cooskJeration

a.
b.
\-'/
d.

,'6. M nmkes a negotiable pronrissory note for P10,000 with the name of the payable in blank. The note is stolen by P who
inserts his name as payee and then indorces the note to A, then A to B, and B b C, who is a holder in due course. On
7fi\urity, C cannot enfiorce the note against

Itl
t,l i)

\a-z

1/.

c. A
cJ.

to bearer. He delivers the note to B. B indorsed the note specially to C, then C negoti.ates the
clelivery to D. Which of the folbwinq is rut correct?
D .an enforce the rute agairst C.
c. D can enforce the rpte agEinst A.
O carr enforce the rrcte agairst B.
d. C can enfurce the note against 8.

,tt lssued a note payable

,r,lte

,-\
fL )

L,'

l".y

/8

Thir provisron renders a note @&[ego!E!!q


a. A promises to pay to the order of B the sum of US $1,000 payable in pesos at the rate of exchange prwailirE on
Aug,"tst L4,2K)2
b. A
,000 wllh l2o/o interest thereon.
1,fi)0 and allcosts, charges and experses including reaornble attorrrey's fees. -> Ju;n no1. <rr{a*
(Q *
' .{ A
P1,000 in two equal installnrents, the first payable on August 14, 20f,2 aN the second o#t*,
September

"r4

l+,2WZ

79. ,tuhich of tlre F:lbwing is not negotiable?


I promise b pay S or order P10,000 on or before September 14,2002 in payment of the purchase price of the
rnerchardise I bought ftom him. Sgd. A
Pay.to the
and charge fe rq1S^b my mcpunt. To C, Sgd. A

a.

or
Ar Pay Eo-The-or
rl.', Pay to I or o

A ---iT, -, i*i.. ,-. .,


14, 2W2. To L gci. A

Sd

80. The

/\
(.!,
a.
d.

or order P10,000, 30 days after dernand


or ords P10,0m, 30 dap after C passes the CPA board exanrinatbns
ffiO within 30 days afEr ttrc death of
A promises to pay B or order P1q000 on or before Augrrst L4,2@2
C
C

81. This is

a.
qf .\

d p4Obk ,,^
/.{".;'tti fnrt ,.. I l^

ffiegotiable

t plodrise to pay to the order of myself P10,000 signed by A, the maker


Pay to the order of the Commissioner of Internal Revenue P10,000 to ABC

I prornise b pay to orde P1Q000. Sgd. A

rv,larl palCr)

bank. Sqd. A

ts--z' Pay to the order of X, Y arrd Z, PIO,O00. To B. Sgd. A

82. FYe{y negotiable instruntent is presumed to have been issled for a valuable consideration. The presumption b

lacie - n5"tlt"$lrrlclis6rp+,.
Q,r)1nq
Dr- Conclusive

c. Absolute
d. Final

fu P10,000 fur 10 bottles of whisky sold by B to A, Later


negotiated the note b C. Subsequently, A discovered that only 5 bottle of whisky are genuine. As a result
C can enforce the note against A for P1Q000 regardless of whether C is holder in due course or mt
C cannot enforce the note against A for P10,000 even if he is a frolder in due course
of whether he is a holder in due course or not.
a holder in course.

83. A, issued a pomissory note payable to B or order

a.
b.

rtificate of deposit

lmoney

85.

It

contains an order

that do not

c. Certificate of stock
d. Warchouse receipt

-a.

(5-\rreasury warrant

dfssirns

to pay out of a particular fund rendering the instrument beyond the rope of the negoUabh

instsurnent law
Bill of lading

80.

eftct

ttre rregothbility of an irstrument except

/.9*-.^

/'-i'n^s\3\

rtt9

trlB5a.

lwlllw

wrwt

vl

a. It is not dated ,
b. Does not speciry the value given

c.
ffi

,gvsVVr

n9wgalEltv,

'9

Does rpt specify the place where it is drawn ,


Dos not narne the payee where the instrurnent b payable to order

87. A detivered to B the tollowing instrnment


"one month after date, I prcmise to pay to B P10,000. sgd A" B in<lcrced the note in blank befure maturity aM
delivered it to C for value. When dug A refused to pay and C sued B. Could C recover fuom B?
No, C could not sue B and hold him lhble as an indorcer because the lnstrurnent is payabh to a specified person.
No, the instrument is rct negotiable bcause it b neither payable b order or b bearer.
Yes, provided C to gilres notice if dbhmor to B, othenrvise B b discharged ftorn liability
Yo, the endorsernent will be consklered as an as[nment hence B will be lhble as an assig]pr of the instrr.rment

a.
b.
c.
[D

83. A, krowirg that therc b no such person by the nanre of B, makes out and signs a promissory mte payable b B or order.
A deliveis the note b C. C in tum delivers the mte to D without indorsernent. Later, D delivers the rrcte b E, a hoher
in cue course, whkh of the fullowing is conect?
he note can be negothted by indorsement and dellvery.
frrornCbecar.sea person negothtirgan irrtrumentmerelybydelivery b liableonlybthe
t

A ge
1l) intt
\_,/
c E iecor,res holder only if D will indorse the instrurnent.
ii -Tte in:'itnlnlent is not-negotiable because it is payable to the order of a rpn-existing

person

BQ A nr;lkes a negotiable note b bearer and delivers it to B fior safe keeping. The note ls negothted by B to C. Can A
refuse to pay C on the ground that the note w6 originally delivered to B br a special purpose only?
.1. Yes, A can prove that he dellt/ered the hsfurnent b B ltOr a special purpGe
No, wherc the insUurnent is in the hands of any holder, a valid delivery thereof by all partie prior b him so a to
make tlem liable bo him is conclusively presumed.
Yes, berause B negotiated the note witfrout authority.
No, if C is a holder-in due course.

b
c.
A

\J

90. A made a negotiabh promissory note in faror of B who negotiated it to C under the followirp in6rsements. "Pay b C
after passing Ure CPA examinauon in October 1999". At maturity of the note, C presented it b A fur payment and it
was Culy pak1, C did not pass the CPA examination. Which of the followirg b conect.z
I-he promissory rnte is mt negouable because of the conditirn impmed.
The promissory note becornes rregothble because the conditbn was saUsfied.
A had rrc right to pay C and, therefure can compelled b pay again.
fo e rnay disregard the condition and make payment whether the condition is fulfilled or not.

a.
b.
1
\

9i.

\-

When dre instrument is cornplete but undelivered, delivery is presumed to have been made in favor of the holde, the
presumption ls
Conclusilre whether tplder in due course or fior value
Prima-facie whether holder in due course or for value
Conclusive if holder for value and prima facie if holder in due course
prma-facie if holder tor valrr and conc]usirre. If holder in due course

a.
b.
!.
[Z)

92. The indorser who simply si;ns his narne renders hinself li{,lqto all subsequent holders as
Primarily
(grlSeconOarily liable

a.
b.

Solidarily

liable
liable

d.

Subsidiirrily liabh

93. There b lcdiffererrce*petween a holder in due course and one who b not, since as regards thenr, real and personal
defunses may always be raised
Intervening parties
Remote pafties

a.
b.

if

c.

partie

r-d/ )mmediate
Subsequent

parties

94, This is a pssonaldefense

a. Absolute defense Q<^t b"*r^rt


t
f 6l Equitable defrnse
\/
gS.\r6te reds "I prornbe to pay B or order P1,000,
A. The instrument

a.
b.

c. Real defense
d. National defrense
30 days after B receives the proceeds of his loan from ABC bank. Sgd

is

Subject to a condition
Payable at a determinable future trme

96. The tolbwing are qualificalrcrs of a corporaE{qeqq,


Must own at leat one share of

_c.aPayable on dernand.
because the payrnent is indefinite

(/Non-neOotiable
except BtStDtr1.l

S L*
a.
stock
d
M
irg his term as director
,n
( c. M
ilppines
\,/ O
books of the corpor-ation
97. Which of the fullowing is the dlsadvantage of forming a @rporauon?
a. The free and ready transferability of ownership
b. The shareholdem are not liable for the debts of the business
c. Becarce of the powa of succession, the existence of ttre entity is not aftcted by the personal
(a.
sbcftholders to fiB wishes of Ule majority
subiect onf to equit&le
'\
,
,, t":,,r.t-, r,

vicissitudes of the

98 The drawee bank rnay not refuse b pay checK Orawn against it
c. If the drawer's depcits is insufnciert
a,.. If there is a "stop payment" issued by tlre
d. When the bank receives noUce of the drawer's death
O. ) tf tne diawer is

drawer

irsolvent

99 Whlch of the following is the characteristic of partnerchip as a contract


Preparatory
c. Innominate
Formal
d. Gratiutous

a
b

Fjt-st statqnent- If the surplm profits of the stod< corporation reaches the level eqtnl b its pakl-up capitai EE SEC
may conipel the corporation to declare dividends, otherurise it will be liable fur a suftax on improperly accurnulated

7A{)

surplus,

.?v.atfi stateneut - In a corporation, two or more positbns may be heH concunently by the same person except ttut
ili: on? peBon shall act as President and chairman of the Board
d. Uoth staternents are tn e
c. Only the first staternent b true

h ) 8()trl staternents ae false

0l

d.

Only the second staternent is true

,'4:,. srtterlEf- The arrival of tfte tenn of a parhershp with a fixed term or period shall not dissolve the parhership
if ttr; .;..:;tners conUnue with the hriness of the parhership but sr.rch parhershtp maybe tenninated anytime dependent
, ' rar w,il of the cr:ntinuing partners.
.(,,1,! .statefiwif - A partnership with a capital of P3,000 or more to mmey or prcperty, must be in a public
i,-U'ir'nt and registered with the SEC in order for the parmership b be able to maintain an action, in ib own name
-;':'.:s|. third party
.r r Both statemenB are true
c. Only the first staternent b Uue

d.

8-rti': ctaternents are false

Only tJrc second staternent is true

2, afts 1 '/ears of operation, ABC, a donrestic corp. wanted to declare dividends b its stockholders. The Eeasur,er
rcpoited a riet incorre after tax of P4 million. One million is being appropriated br the acquisition of the machineries to
L'.: Dought 2 rncnths fiom rnw. The treasurer llkewise reported an increase in the value of the lancl prevlously bought
io ix' tJsed as plant site tum 3 million to 5 million. What arnount of dividend can be declared by the board?
.l
9 m,ilion
c-.4 million
8 mrllicn
L
.\- d. B million
r0-'l When ttre goods are delivered to the buyer m "qgle SLIQtrln" tor a period of seven days, ownershp of he qoods
passes to the buyer,

a Upon perfer:tjgr\of the contract


_
b \rB)n thedelvery of the goods
lO+. #s is not o tundamental obligation of the agent
a. fo-r-en'cter an accounting oi ffte trarsacuon

-_C, _9pp1 qg2ir?^qo!_of qpryen days


d. Upon acceptance by the buyer Of the offer of tfrc seller

l,-,1,-:
Ue 11t^(r,
F--. To subordinate his interest in favor of hb principal if there is a conflict of interest
.c. .)To borrow if he is autfprized to lerd
V./ t'lot to carry out the agency, even if that is the instrr.rction of tfe principal, if he knew it would result is a loss or

damage to his principal


105. Dacion en pago as disunguished fi,om sale
The cause is the price
The objrrt e<ist ancl b specific
There is no pre-existing obligation
cl. There is a greater degree of freedom in fuing the price

a.
(6)
-c.

106. A clistribution by a corporatbn of shares held by it in another corporation is


a. Stock dividend
c. Sale of capital assets
dividend
d. Sah of Ueasury stock

(1 ***

107. Any director of a corporation may be removed ftorn offrce by a vote of


Majrcrity of the mernbers of the board
c. 2/3 of trte stockholders present
Majority of the sbckholders present
6),Ztl of the outstanding capital stock

a.
b.

1(ts. A contract as a rule must be

itw1Eg

to be

valid.

A ta)eayer is not entitled b interest on the overpayment of tax subject of a refund because an obligation derived from
law is nqfpresumec!.-"./ ?Q<1r,r,'e q-i,v,1 h'tat
{,.1r (-rfl,rl
a.
Both statenrents are
fint is false, second is true.
b. Both are false.
&/Second is false, first b true

true.

109. D is indebited to
diamond ring

a.
A
(S. )
d'

From
From
From
From

the
the
the
the

(..

P2fi),fi)O and delivers to c his diarnond ring by way of pbdge. If D sells the same
when willT mquire ownership of the sarne?
fi..lclc - hr',,rnk t:l r r""tr{w

C in the amount of

tilne the sale is perfected between D and T


time T pays the price to D
time C consents to the sale between D and T
tirne T obtains .rtual possession of tln diamord ring

BUSINESS LAW: PRE-WEEK LECTURE

/l.u$, ,''r'

r.r\l
.

-t.r. ll

..- ;rtl

RgSA: The Review School of

110

A
'( )
d.

Within
Within
Within
\ iithin

40 days norn delivery of the thing sold


6 months ftorn delivery of the thing soH
1 year from delivery of the things sold
4 years ftom discovery of the ftaud

Which of these

( or'

\5.
c.
d.

t@Aspecbl

Application of payment

pago

/'
( .r- -'
'r':
d
1

torm of payment?

gri.'i \,

i' .

Dmion en
Cesslon en pago ,
Tender of paymeilt and conslgnation

I i 2. The votrng_F!!!.!l.-g!nt

Page 10 of 19

A buyer may sue the seller fur breach of warranty agairrt hidden deEcts of thirqs

(b.

tlL.

Accountancy

tl''t

(I

v * ".1 '"' '


' ^ t?ht -l "1rr''
;u

,,.

neded in declaring cash or property dividend

Maprity vote of the board of Directors + ,*|"-rur' .tt k1 r"ojc,:lg


Majority vcte of the Board of Dlrectors plus the vote of a maprity of the outstanding shares
Majority vote of the Board of Directors plus the vote of 2/3 of the outstandhg slnres
213 votes of the directors plus a majority of the outstanding shares

hit{

hec-tare
D br:rl1owd from C P 1,000,000 to secure the payment of which the furmer verbally agreed to ,@liver
aqricultural land by way of antichresis and to pay t2o/o interest per annum. The contract of loan {oO an^.i.-hres}

a
b
G:
Ya

|,re trcth valid


Bolh nulland rcid
The loan is valid but the antkhresb b null aM
wr,lk' J
Jhe coniract of antkhresis rs valiJ, but the loan is null aM void.

r..-[ w.,loy,

rokl

j 14, S arnl B agr--ed on the sats of a four hectare foperty at Macapagal Eoulevard br the pice of P15,000 per square
meter cn conditron that if the pke is not paid on a particular date, the sale will considered autornatically cancelled. On
tire particular date agreed upon, B did not pay S, b,ut B never asked for a judhial cancelhtion nor made a notarbl act
of recission. In this case-

a.
h
. t.-r
V.'

The sale is cancelled as per agneenent


S can validly refuse a+ry subsqueflt offer to pay by B
B can stili pay S the price
B cannot anyrnore pay Sre prke simply because the sale is cancelbd due to his failure to pay on

the stipulated date


115.Culpa aquiliana as distinguished from culpa contratual:
Proof of due diligence in the selection and supervisbn of employees is not corsidered a deErse.
Praf of the contract and its breach is sufFrcient b warrant recovery.
The negl(lent of the defiendant is only an incident in the perbrmarrce of the obligation.
/ d. ) The source of liability is Ete neqlignt act of the person causing clamage to another.

a.
b.
A

116.A, B, and C executed a promissory note in favor of D, E, and F in the amount of P9,000.00. Can the creditors prcceed
against A for the payment of the entire loan?
No, each creditor can only collect P3,fi)0 from A.

. a.
' b^ Yes,
(c.
'd. )no,

A.

tfre

debtrs.

YeS,

117.In the preceding problem, suppose C is insolvent, can B and A be held liabte for hb share in the obl[ation?
Yes, because the obligation is presumed to be joint and several.
Yes. but A and B shall be
ruo,'Oecause of their
bts are distinct from one another.
No, because only either
the share of C.

a.
b.
6},
-iI:

iilnt
o

118.Still in the preceding problem, suppose the obl(Tation is mixed solidarity can one of the oeditors demand payment of
the wtrcle debt foom anyone of the debtors?
parate from one another.

No,
Ab. Yes,
bligation.
/
( Yes,
I of the debtors.
d. No, because despite solidarity, a debbr b liable only for his share.

19.

Indivis hi lity as d btlnguished from sol ilarity :


Plurality of subject is indispersable.
Reftrs to tfn credibrs xfrlu debtors.
May either be passive or actjve.
Refers to the pestatkcn which constitutes the object of the obligation.

a.
b.
9*
ej

120.Under the Negotiable InsUumenb Law, !o be hober in due course, a person must have acquired the insbunnnt before
it is overdue. Does thb apply to the payee to whom the maker issued an overdue

note?

zf,:>.

a. Yes, because the payee is still considered a lrolder urrder the law.
b. No, because issuance to the payee is not considered a holder under the hw.
c._ Yes, because the law does not distinguished between payee and subsequent holder.
d. No, because the payee is privy to the contract between himself ard the maker.
l,21

When one of the parties has brought an action to enficrce the contract he cannot subsequently ask fur iE refornntion.

The injured party may seek rescission even after he has chosen the fulfillment of the obligation if the latter should
tsecome impossible.

b. T'rue, false

(a. True, tnre

c.

d.

False, fabe

False, true

,?2 the credito{has realright tg the fruits of the ttting from the time they have been delivsed.
rhe brryer acqurres rJ"ir'Sl'iXlirtJ'iil,[.r uie rhins rro* tn.rffitio]or the
t:,re, true
c. Felrc;ffi6
(r,'.1rrue, rabe

.;

"'

sare.

d. False,

\_/

false

, r-! t:) a natLral obligation, the creditor has the right to enfurce the performance thereof itbeing based on positive law.
I'Uir:il,-r indebiti and negotiorum4estio are quasi-conl.racts that give rise to civil obligations.

i:. laise, false

i ,4' t;-al sale of land made by its owner

o.

c.

gfafe'frue
rs

FalseTrue

fulse

d.

rirlL' k'lt

qq &iggibb-

of land made by an aEent withoui'.,i-iir.i:i ,lr'.1 r,,.,ty


i-alse,
b.

Eue

True,

is

valid

void.

---T

f1,hrue, true

([l[ar.,
rr"
\,,

false

.'

True, false

agreement

A brmal or solentrr confact is one that must be in writino to be valid.


;:. 'r-rre,
b. False,

true

yz

True, false

*-[ o]-t nr v'(c.r1 ^'{l'" ' 'iho;,.[..'

frrn\the owner thereof

25 A -;;ntr-act as a gerreral rule ntust be written to have ficrce and effect as a

d.

True, false

\J

I 2ti A corrtract

r:f partnership where immovables are contributed must be in public irstrument to be valid.

A iimited parhership must be SEC reqistered to be valid


a. i=a!se, trr-re
b. True, false

i..

c. False,

(0. )rrue, true

false

ilre [incr1.i3 of autonorny of contracts means that the contactirg parties as

rule may agree upon any stipulation,

r-iause, tei'm and corrditbn.


t'ie,arivrty of contracts means

a,

false

ralse,

12U Antrchresis rnLtst be in

fficonfacts

ralse

False,

take effect not

tnrc

mly between the parties but also thelr heirs and assigns.

, c.

writing and involves only rnrrrrovables

In pledge and Recto Law there

a.

tr.)True,

False,

true

True, false

d.

True, false

is no deficierrcy liability.

true
c. False, true
is@, \L l0fr6Lt ,t

1T)True,

129.A contract enterect into by

d.

,V

A contract where the-arnount involved exceeds P500.00 must be in writing to be valid.


a. True,
b. lFalse,
c, False, true
d. True, false

true

False

130.4 de facto corporatio)lione which is not registerd with the SEC. X

In

corporation by estoppel, those

partners.

a.

*i-**r*resented

b. frue, true

False, hlse

'.1,.1'

'I

themselves as furming

G.)r",.,

a corporation are liable as general

d. True, talse

oru

131.If the obltgation is solidary, it means there is mutual guaranty arnong the debtors and therefiore the insolvency of one is
shouldered by the others.
Solidarity may exist alttmugh th_ey'eptors may not be Lround by the same term, condition and manner of performance.
False,
c. True,
d. False, true
(b. True,

false

a.

tn-re

false

132.In dation in paymen! the creditYLcomes the owner of the property ceded

as

payment of the debt.

In payment by cession, the creditors do not beccrne the owners but are authorized to sell firc properties mspned to

them.

false

true
133.In tender of payment and consignation, tne(efusatTwit
debtor will extingulsh the oblklation. {
- -f-t, C
The third person who paid the obligation without the k
reimbursement from the debtor to the extent of the iatter'g.tenefrt.
a. False, hlse
b True, true
1c. False, u-ue
a.

False,

b.

d.

False,

134-Acorporatoncanbeastockholderbutnotanincorporator

True, false

e creditor to accept the payrnent of the

the will of the debtor 6 still entitled to

d.

(0c[rr,[trrc,

True,

False

? p,l-'l'") irct,[tr,.t, ,..j,,, i,. !-

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
lav\

;, a, |rue, true
it

b.

False,

hlse

False,

fue

d.

True, false

135.It is indispensable for quasi-delict to exist that there is no pe-existing contractual relation between the parties.

.:lfiq unpaid seller cannot recover the thing sold from an innocent purchaser for value.

b.

*tte

False, false

c.

d. False, true

True, false

C,"'*"
136.Wridr of the following- is not an essential ehment of an obligetbn?
(. c-rlnesentation PR$fffifi..l
a. obligor
b.

l-i7.It

rs

Effrcient

cause

iI.

an obligation which is based on.pgg$Ig-lgw gives a right to entorce iE performarrce


Natural
Moral obligation
Legalobligat'ron

c.
d.

obligation
Cvltobliqation
[bJ
a.

'

-l:i

;';

Creditor

!,t''n of ihe ioilowii'lg is not a source of an cfuligation?

-r l-aur

h.

Contacts

c. Delicts

,tdtparrry

e. Quasi-conbffib,

; ;i; (.i:,lrqarroirs clerived frorn law are presumed except those found in the Civil Cdie or n special lavls.
Oi'ii:natior'rs arising itom coniracts have the force of law between the contracting parties and should be complied with in

lcrr

a
I

faith

c. Both are fabe.


d. First is true, second

i'0th st,rtemen$ are true.


' :rst rf,hl,;tl, se-:ond is true.

"r^. -. rs

rrn-ipai

kid

is fabe.

of quasi-contract arising out of payment by mistake or:gndg..e*pgrformA-{Eg of an obligatbn;

- c. Other quasi<ontract d. Quridelict


gestb
i il Wl ricJr of the following is not a civil liability arising hom delbt?
.(-timrr."lI ,.
liahilil'l
c. Reparation
= ,lvil li1,(r,11,1
;.,--.Indemnrrau."'#;;t"qr$#ffi;rq*
.J1-)

;-r

iorutb

indebih

b.

Negotiorum

lrl

ir1

quasi-contract there is rlo cmsent of the parties thus preventing a meeting of minds between them.

Irr quasi-delict here is not intentbn on the part of a person doing a wrongful act or omission causing damage to
.:tl.lthef

I tint is false statenrent, second is true.


L, First is true, second is false.

(c

.,Uotn are true.

al] Both are false.

ii;,,h{F rs the kirid of dihqelrce that tr obligor must obserye in the performance of his obligation to give something:
( a _z D'kgence of a gmd father of a family.
tD1
F.xtraordinary diligence of a good father of a farnily.
Diligence of a fatler of a qocd family
,1. Diligeirce oi'a gmd fiather of a family even if the law or the stipuhtbn requires another standard of care.

(-.

I :t.-ihe G'Frdi$t a(quires a real right against the de.btor

from the tirne the thing should have been delivered.

-ii,r,

f;.'lits cf the thing shall pertain to the crcditor trom the time they $pqd:@yg Dgsqdeliveg(_!o him, ttnt is, he has
persrnal riElrt to demand cNelivery of tlte fruits existing after the obli7atbri tro deliver the pincipal thing arises.
a. Both statemen6 are
fc.'first is fialse, scmd is true.
'd. First b fue, semnd is fabe.
Eoth are

b.

true.

lal*-,

145.In the obligetlon to deliver a thing, the debtor lns to deliver also the accessories and accessions if they have been
mentioned.

In obltgabon to do, sperific perfurmarrce of the debbrs obl(Tation is not available as a right of the creditor to denrand
rffom the obligor.
/ a. / First staternent 6 fabe, second is trr.re.
c. Both are fabe.
(first is tnrc, second is false.
d. Both arc true.

P/

146.Which if the tullowing is demand necessary to nuke the debtor in chlay in tfre performance of his obl(ption?
When the Ume of performarrce is of the essence; c. When tlrc law so provkles;
Whm the time of perfunnarrce ha been stipulated; d. When demand would be useless.

a.

l47)t/lability fioe damages in ttre performance of an obligation arises Irorn the following, o(cept:
a. Negligerce
c. Dehy
fb. , Aatr or ornissirrs punistred by law.
d. Fraud
lzl8.Liability fro dannges arising ftom fraud is demandable and there can be a waiver of an action fur past fraud.
There can be waivr of an action for future neglQerrce but not ftaud.
Both statements are false.
c. First staternent is Eue, second is false.
Bodr are true.
d. Second is Eue, first is false.

a.
fi,

149.A obliged hirnself m delirrer the cars of powdered milk of B from Pangasinan to Marrila. Whih his brck was traveling on
the North expressway, it was hi-lacked by a band of robbers who also took ttle cans of milk belonging to B. Is A iiable
for the loss of the goods?
No, because they were generic things and as they cannot be lost.
Yes, bcause he was in possessaon of the same at the time of the loss and therefore presumed at fault.
Yes, because thse was no stipuhtbn exempting him from loss in case of fortuitous event.
1t1. No, because the loss was due to futtuitous evert.

a,
b.
9.

,f\

ii'n"s,rYl

IreSA: lne Keuew ucnool or Acoountancy

Page 13 of 19

150.In whkh of the l'ollowing is tfrc debtor still liable despite ttrc ficrtuitons event causing the loss of the thing?
The thing lost is a specifr thing.
The performarrce of the obligaticn has becorne impossible.
The nature of the obligation does rrct require tte msumption of risk.
(0. , wnen tfre hw or the obligatinn expressly so provides.

a.
b.
.a

of interest to be pai<J in three equl monthly installments


frorn January to March. D paid an amount for which the latter issued a receipt staung that the paymert is for the
rnonth of February. In this case:
a. llte installment for the rnonth of March is also consilered pail.

151 D borrowed from C a sum of money with a stipulated rate

, ir-, 1}e installment for the month of January


\ , . The iristattnent for tlrc nrcnth of January

'l

is
is

to have been paid.

pakt. l(.t

I ire irstaiirnent for he month of January is rrct presu

,!

tt I

i52 jrr the preceoing case, suppose the rcceipt does not mention the payment of the interest it

a.
t:.t-r

Yl.

Concl,-sively pnesurned the interest has been abo paid.


ilct prsumed paid unless proven otherwise.
Pruna hcie presumed to have been
Pre:,;riirled dbputably that only the principal has been

paid.

',: I trr t)l rrr the fuliowing are the rights of the credibr

paid.

I't '

,..1,''

''

is:

' ','i-

'l

against the rhbtor who fails to pay his debt except:

a Attachnrent of the deDtor's propaties or gamishment thereof;


ir. tri-rb;6gd1s. to Urc rights of tte debtor agEinst third persons;
,. .lrxcission of contrrts enter-ed into by the debtor to deftaud him;
i'A Send the debtor to Fil for non-paynut of his ffit.

154. Riqnts acquired in viftue of obligations are;!p4.91[qgrble only if so sUpulated by the partbs.

Ihe law of the stipulation of the parties to an obligation may provide tfnt the rights acquired by virhre thereof are not
rronsmssible.
First statement is ialse, second is bue
Secr-rnd is false, first is true

a
f.

c. BoUr are false.


d. Bom are true.

t55. D borrowrd a sum of rnney from C prornising to pay after tfie anival of the vessel "Baliktaran" from Cebu. The
faihd tc arrive due to some brtuibr.rs event and witfrout ttre lault of D. D's oblpatbn b pay is subject to a:

a.
L'
..
,r
(d.

vessel

Suspensive condition and therefore mt dernandable since tfte vessel did not arrive.
iiot 3 condtion nor a period butrather ispute ebllgatbmiaCthe?efot is dema.'rdable at once.
Resolutory conditron and therefrcre extingushed upon the failure of the vessel to arrive.
Perirxl whkh the @(rt may fu.

156 Iinpossible, unlawful, immoral conditions are not valid and mt dernardable except the oblipuots whkh depend tpon
then:

\-

'., r

,ti{icr,

,, . C\D,

Cb\,..fi,._

..,

vrlt)

Potestattve condition to be void nrust both be suspensivepftlrdependent on the debtors will.


Both statemenb ae
(q-zfirrt
as False, second is true.
-?i.
Eoth are
First b tue, second is fabe.

a.
b.

false.

0ue.

157. D bound ltimself to deliver either specific object 1 or object 2 to C. If one of ffre objects is lost due to fortuitous event
and without the fault of D, tle effect is:
F^, D may still choose which he shall deliver, only the value of the thing lct if he chooses tlrc same.
D canmt ctt@se because arnorE the prestatbns whereby he is atternative| bourd, only one is practicable.
.
C rnay choose which of the obpcts he wants delivered.
Obligatbn of D has been extinguished.

b.
'Y
d.

158. In facultaUve obl(7ation, only one prestation is due but the creditor may be given $rc right of choice as
prestaln-m-Oe;rerformen.

6rre

"I pronise b

pay

In afternative obliTation the right of choice b always with ttre debtor.


FiEt3Etement is false, second is true.
G. Both are Uue

a.
b.

First is true, second is

false

I.UO

, eofr are false.

159' A, B and C borrowed P3M frorn D, E and F eviderrced by a prcmissory note worded as follows, to wit:
D, E and F P3M, (Sgd) A, I and C "How much can D collect ftom A?
P3M
c. Pl,5M
P.5M
eru

a.
b.

160. In tfrc peceding case, suppose only D b demanding payment, can A still pay any one of the creditors?
No, because the law provides that payment shall be made to the creditor &manding paynrent.

a.
b.

No, but in case payment is made b a creditor not demanding payment, only his share of ttre credit shall be
extingubhed.
Yes, because payment can be made to any of the solidary credibrs.
-C^,
d.
i 1 Yes, because payment proportionately can be made to any of the joint creditors of his sharc.

\_,'

161. A, B and C bound thensetvs to deliver to X a specifrc car worth P3M. Due to the fault of A, tlre car was
case:

lct. In [tis

x{':\

a.
b.
c.
(l

X can claim damages ftorn any one of the three for his propoftionate part of lhbihty because the obligation

is

indivisible.
X clairn only fiom A the whole amount of damages other than the value of the car.
e from any of the three.
Since it is solidary
eir respective shares in the oblilation,
Onty A is liabts tur

liabilities
darnages
162.Yi obligation with penal clause,

by the oeditor is essential to enforce the penalty.

As a rule, the creditor may demand the payment of ttrc penalty, damages and interest in case of non-performance of

Re obligation.

h.)

Dt:'
153

c. Both are true.


d. Second is Eue, first is false.

Both staternents are false.


Fi!.st is true, second is false.

D owes; C P1f'4. X, without the knowledge or against tfie will of D paid C P2M. Can X get reimburcernent frorn D?
to pwent unjust enridrment on the part of D at the epense of X,

,.A P
\h I P
Y lt
.r1

fitoFD.

rtt was not proper being without the knowle@e or against Ute willof D.
F1M plus interest from the tirne of payment until reimbursement.

' t;.r. In t,re p-eceding c.lse:


-iher
quasi-ccntract

e is

with the obligation to reimburse the third person insofar as the payment has been benefrcbl to

it-':i,':l'ur.

'r r 'egoil subrogation and therebre in case the debtor ftils to reimburse the third person, the latter may go after
' r .. tgage, guaranty or PenaltY'
,'ottr zrr faise staternents.
c. Flrst ls false, second ls true.
lrth are kue.
(el ffst b Uue, se@nd is fabe.
I55. I'ayment made to a ftird person

c.
)'o{;
a
1,.

is valid to extinguish theb5ligation of the debtor to the creditor in the following cases,

payrnent b the creditor, ttre third person acqiis the aedito/s right
r the creditor ratifies the payment to the third person;
'v,hen tlrrough the creditort conduct the debtor was led to belbve that the third person had authority to receive
;-. tyfnent:
When ttx: third person is subrogated to the righbs of the creditor.

tcllowing are speciat forms of payment, except:


Dation in payment
Tender of payment and cons(Jnation

167 In applicaUon of payment, the creditor as a rub shall decirh on what debt shall the payment be applied.

If the period is ficr the benefit of the debtor he can apply peqayrnent on a debt although not yet due.
t.c. first is false, secmd is true.
a. Eoth statements are hlse.

b. Both are true.


Vfiot is Eue, second is false.
lffi/n dat'ton in payment, the cJeditor becomes owner of the thing alienated as payment while in payment by cecsbn, the
creditors do not becone owners of the properties of the debtor.

y'n tender of payment and corsignation, the terder of payment by itself shall not extinguish the obl!7ation.

fre creditor receives a check as payment and


'released to the extent of the loss.
First staternent is true, second is false.

)f
a.

b.

First is fatse,

srond

is

true.

it has been impaired through his fault; the debtor/drawer shall be

c.

Both are fabe

true.

Qfi6e

169. Three of the following are essential elernents of a conbact, o(cept:


Cause of tfe obligation which is establisherl.

a.
b. Consent of the aontracting parties.
,611 Motiveof theprties. X't,c.l rc+vicJt
Ya Object certain which is the subject m*ter of the conuact.

170. Novation of a contract takes place in three of the following, except:

at the same the prirrcipal debtor of


the other.
That both debts be due.
That thry ouy be unliqutoatJand dernandable; Lr&UtD [IkT
That they both mnsBtfr'Effi-of money or if consumable also of the same kind and quality as that stated.

172. S offered hh car to B fur P1M and giving the laEer one week to decide. B in turn gave S p1,000.00. In this casg tfrere
ts:

.a^ Contract of
(b. iConbactof

t:
d.

.00 m earnest money.


ptbn morrcy.

Contract to

conuact

sell of the car at s's option.

z6'lX

/.% .^'A

173. A advertised in the newspaper his parcel of land wanting to sell the same tur PlM. B personally went to the turrner
with cash in hard to buy the subject parcel of land. In this case:
.4^ A cannot anymore relect B as buyer of his land;
:;
ci
I as an offerer in the purchase or his tard; ' ' ,(11' t r'"
;
A can reject the offer of I unless he propelly consigrs with the court his payhbnt fur the land;
A cannot evade his obligation as seller to B.

;; ;iiti;;ilt
6)
Y
d.

'

174. The following cannot give consent to a contract, except:


Minors, except sale of rrecessaries in life;

a.
b.
c.
l)

-ihe

i i5.

:-

Insane persons
Demented
prino.s who represent themselvs as of legal age to one in good faith.

colrtract entered into by the persons who cannot give cons,ent is:

.- Voicl ab initio because actually there is no consent.


-: inerfiorceable only because the contract may be ratified.
. ri ;:*:lssible i:ecause of the darnage caused to tte person incapacitated.
16) voiaaole as there is consent altfnugh vitiated or defective.
..

'1tr./+,9 i lliolvillg are still valid contracts except;

\4

Y'

t, i.l1 i:?i'ecu'{e Lr)ntrect wtiere damage or Esion


(a. , Rescissibh

'D-'

is essential is:

./ordubl"

if Adefective contract because it

/.: ) void
D Voidabie

/9

c. Voidable
d. Rescissible

'lcld

linenfcrceable

prohibited by law is:


's

c. Unenforceable
d. Voirj

c. Rescissibh
d. Unenfuireable

A def-ective contJaci because it is entered into rn the name of another withotjt or in excess of authority, or it b verbal

c
d.
r

Void
Rescissible

d0. T.re toltowing even if rrot in puhlic instrurnent are yalid, tindiogr^andenforceable, orcepL
Negotiableinstnrments
Sale of land, either by the owner or agent witi writteri authority
Agenol, pledge, rnortgage
( tl. 'Partnership contract whgein immovables are contributed

a.
b.
1;

fgf)in

refonnation of instruments, it is necessary that there is rneeting of minG of the parties to the confac! otherwbe,
annulment of conlract shall be the remedy if fraud, accklent mistake or inequitable conduct prevented the nreeting of
minds.

In the interpretation of contracB, doubts on the incr,lental circunstance of onerous contracts shall be resolved in favor
/9\greatest reciprocity of inferest and if gratuitfls, least b-ansrnissbn of rights and interest.

\U
b.

Bo,h statemenB are


Both are

false.

true.

c. First is fue, second is false.


d. First is false, second is tue.

182. A sold to be his dog witi the agreefiient that delivery shall be after ore week ftom sale and the payment of the prke
two weeks from
hall belong to:
(,: ,l if produced befure Bre
If the puppy shall
still to the seller;
The ftuib ttpt shall exist after delivery witl only be the ones to pertain to the buyer.
The fruits after tire sale but before delivery shall pertain to the buyer if so stipuhted by the parties to the sale.

lfii,
-E
c.
d.

delive
exist

183. A conbact of sale of vain hope or expectancy is voidable


brought within the prescriptive perkrd provirled by law.

at ttre option of the hryer and he mtion ficr annulment

The sale of a mere hope or expectancy is deemecl subject to the conditbn that the tlring will come into existence.
Both staternents are
First is true, second is false.
Both are true.

a.
b.

false.

c.

184. A sold 8's car in his (A's) name to C without any authori
Rescissible b.
Void

a.

Voidabb c.

185. A sold B's car in the nanre of B without authority to C. The sale is:

a. Rescissible

b. Voidable zd)Unenlicrceable d.

t-/

186. A sold 8's car with authority fo sell but sold it in his (A's)

a. Rescbsible

b. Voiclable c.

Voici

name The conbact

Unenforceable d. Void

BUSINESS LAW: PRE-WEEK LECTURE

rs:

Tte sale i9:-..

LB7. A sold his land to B vt:rtrally.

a. Rescissible b. Voidable

cl. Void

.)Unenforceable

i8B. A, .rs agent oi P with oral authq!:lty, sold P's land in a public insfurnent. The sale is:

a. Rescrssible b. Voidable c. Unenturceable

:tS9 With written authority frorn

has

d. , Void

principal, the agent sold verbally the land of the principal. The sale is:

a. Rescissible b. Voidable r, c. ,tlnenturceabh


-.'

d. Voil

1',ia V/i'(nout aut?rcrity from 8, A sold the folAet's lard in B's nanre. The sale b:

:i. R.escissible

,'

b. Voidabh

1'

t.l Unenforceable d. Void

t.irUlcrtt authority fron 8, A sold the ftr1ner's house in 8's name. The sale is:

-: Rescissible

Ill.? A

b. Voidable

/-E\Unentorceabh d. Void

,*ritir cral autlrority from P, sold the latters house in

writing. The sale

e Rescissible b. Voidable c. ffiffi-ceable


:

,,1

Ci.'l

d.

is:

(: r'"

Void

ncl ratify the contract. The contract is:

*.scissrirle

b.

Voidable (:. vtrLrrrvrL..urL


Unenforceable / u'/Y.,ru
( d. )void

,'

l9*.

i fr.'9l,,,,rt,ir ,{".Ln, l

S,-'rld to B ttrs ianC on January 10, 2001. On ianuary 15, an absolutg.9s9.(g!-=Le was executed dnd rntarized. On
.)ar ruary 2(1, tne sale was registered with the Registry of Deeds. On January 25l I took actual possession of the land by
buikling a funce thereon. When did I rquire ownership of the land?
On January 10
On January 20

(r.

G.'

tOn

Januay

c.
d.

15

On January 25

fgiy'sofa to I

his car on January 10, 2001 On January 15, arr absolute deed of sale was executed and notarized. On
J(:nuary 20, the sale was registered with the LTO. On January 25, IEdfacabl}ssession of the car. When did B
acquire title to the car?
On January 20
_-i1On January 10
January
15
On January 25
Pn

c.
d.

(,

i9gr:

;t:tJ to B his car with tlre agreement

( a.

b
r

,i.

S rnay

cieliver the same one weck after the sale on January 10, 2001. In this case:

danaM within reasonable time ftom the sale the payment of the price frorn

B.

payment only after he has delivered the car to B.


B may denrand delivery of the car even befiore the expirat'nn of the one week period agreed upon once he pays the

S can dernand
i)rlCe.

Payment and derirrery shall take place only after one week frorn sale.

197. S soid to B his car with the agreanent that be will pay the prke one week after the sale on January 10, 2001. In this

\/aa*.:
a. B may demand witnin redsonable trne ftryn the sab the delirlery of the car.
b. I may dernand delivery only after trc has paid the price.
c. S may seek payment of tlrc price once he deliverc the car.
d. PaymenB arrl delivery shall take place only after one vueek from sale.
jrqoH hs car to 8. No aqreemet was ma& on the time and place of delivery and payment. Henqe:
(a,- t The time and place of delivery shall be at the urne and place of payrnent of the price. SftBft { \.uorf
tr: The time and place of delivery ard paynent not having been agreed upon, the sab shall bb void. '
c. The seller may dernand payment first before delivry of the thing sold.
d. The buyer may dernand delivery first before payment of the prke.

198.

wttrr{

iirf

199. The seller must be the owner of tlte pmperty he sells but hs ownership neerl not ex6t on perfiection but upon delivery
of the thlng.

A contract of sale may be absolute; conditional, either suspensive or resolutory; or subject to a contingency; or
undivided interest in property, either present or tuture except future inheritance.

,. . Both are false statemenB.


7"

b. r Bofrr are Eue statemenE.

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c. First is fue, second is false


d. First is false, second 6 true.

200.'A sold his car for the prlce of F2M to B who shall pay P.5M and deliver to S his land
There is:

a.
b.

Paftly sale and partly barter.


Barter

consideration ficr the sale.

c. Innorninate contract

201. S delivers to B his car valued at P2M in consideration or a\tradsfrrring to S his land worth p1M and the anount of plM
There is:
Bafter
Innominate contract
sate
Paftly sale and paftly barter
'

a.
(h

c.
d.

202. B ordered from S a pair of shoes of the kind and styh of which S has gone out of
Contract for a piece of
Contract of agerry.
Contract of hase of
Conbact of sale.

a,
b.

work.
service.

c.
fl\
\_

stock. There b:
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f^, 'n"sn\,:\

ft{rtn1

203. S scld to B his land vaiuerJ at P1M only for the price of P,7M, thus resulting to inadequate

pice.

c. Unenforceable=-:-::=:--_=-_r{. \atia

a. Rescissible
tr. \toidable

The sale is:

204. S r;ffered his lanrl to B rarith the understanding that theHer shall lx the price. B, as agreed upon fixed the price at
P.1M, althouqh the lancl's market value was P1.5M. It is clear, therefore, that S is to benefit fiom the transmtion. Was
ed sale as there was no consent on the price.
perfected sale, fixed by buyer and accepted by the seller.
''heres
valid sale since the buyer uras authorize.d to fix the pice.
Void,rille sale at the optbn of the buyer due to mistake in the fixing of the price.

rl.
2Ci

Villrir-h of the foilowing is not constructive delivery in sale?r-

a
b,

(,c

Traditio longa manu


Tra,liiio constitum possessorium

d.

Thing is phced in the control and pcsession of buyer


Traditio symbolica

.'0c in ';ate or return", the buyer becomes owner of l.he thing upon
af irr acrorcval, express or implied,
':..

fial or satisfaction",

1, b:t'ween husband and wife is void, unless there is separation of property between them in the same way that
partnership between them is also void

..t\t.|sei

delivery while if "on approval,

r-,

c. First is false, second is true.


d. Fin;t is true, second b false.

tsotlt st3tej'nents are tnle.


Both are false.

; I

s:'id to B nis dog without knowledge that the animal was suffering from a disease at the time of the sale. Is the
celhr liabE tur breach of warranty against redhibitory defect of animals?
a. No, hrause the seller was in g6d faith when he sold the animals.

t)

\'er, if he were

arriare of the hidden lault or defect.

*- No, be;au- anirnals unlike things easily can contact sonre illness.
(,') Y and good faitfr rs not a deEnse to avo,d liability.
scli :o ii

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'r

'{-

..)

.r ttling without krrcwledge that the thirg suffered from a hidden defect. The parties agreed on the waiver
seller still liable for breach of warranty?

iire v,arr?nt) by tlrc lruyer

.j llrl-sscauseoflfiaval
t

rt

ne must returil tne pflce to the tluyer uvithout damages


the waiver refurs onty to liability for danuges.
vrls if lhe seller was in bad Faifi at the tirne the waiver was made.

'/-r:;, l-.recause

,)i ', :oici to R a thing rvith waiver of warranty


L('..rh .;f

against anictron Evktion took place subsequendy. Ls S still liable fur

.ivarranty agailrst evktlon?

if it raras waiver intencnnada.


-ri.r ) lro,
lo, 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 contract of waiver of wananty

against eviction,

210. B bought from S a second hand motor vehicle whrch upon inspection by B had sonre mechanical troubles. After the
sale, the car broke down due to engine houble requiring an overhaul of the engine. Is S liable for breach of warranty
,aqqinst hidden defect?
ar/ No, because the defect was not hklden bui apparent upon irspection by
Yes, because there was no waiver of wananty agatnst hidden defect.
Yes, because the seller was in bad faith.
No, because it was the Fault of the brryer in buying a used car.

.,

Y.
c.
d.

211. In which of the tollowing is sahlolpresumed

,\-t(
")
c.
d.

fn"

it being a second hand car.

eqgita!!el9!gg9e,

price of the sah usulfi-adeqrnte.


The verrdor remains in possession of the thing soid,
The verdor allows the extersion of tirne to repurchase the hing sold.
The purchaser retains for himself a part of the purchase pnce.

212. S sold to B a car on installment wherein the latter mortgaged the same car as security for the price. Failing b pay the
insballments, the mortgage on the car was foreclosed. ts B still liable for arry deficiency if the seller faib to recover in the
foreclosure sale?
Yes, because it is only in case of pledge is the debtor not liable for any deFrciency.
Yes, if so stipulated upon by the parties.
parties.

a.
b.

6on

2l

tfie ccntrary.

ty for a loan. Failing in the payment cf tlre loan, C foreclosed the chattel nmrtgage
and sold ttp car at public auction. In case of deficbncy, is D liable fior it?
a.. Yes, in the absence of contrary stiprlation.
No, because it would be unjust enrkhment on the part of creditor.
Yes, if so agreed upon by the parties.

b.
c.
d.

No, unless stipulated.

214. Based on the preceding case, suppose it was a pledge. woukl tlrc debtor/pledqor be liable firr the deficiency?
No, notwithstanding stipulation to the contrary
c. Yes, if so agreed upon.
/.-::

a.

" a\

/'--'R"sA'1\

RgSA: The Review School of Accountancy

No, unless otherwise

stipulated.

Page 18 of 19

d.

Yes, even in the abeence of stipulation.

215. D mortgaged his parcel of land to C as smtrity for a loarr Fearilq foreclosure of the mongage due to his inability to
pay the loan, D sold the land to X witlput the consent of C. Is the sale valid?
Nc, unless there was prior con-nt of the rnortgage,
\_[,, Yes, stipulation prohibiting the sale without the consent of the lnortgagee shall be roid.
Yes, provided the modgagee was rctified befiore the sab.
No, if there was stipulation requiring prior consent.

,*
c.
d.

215. 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?
No, unless he was noUfied of ffte sale prior to its perfection.
No, legal redemption applies only if the interest was alienated by oneous Ufle to a third person.
Ym, because the law ftowns upon co-ownership.
Y'es, pl'ovided he pays b the pice, experses of the sale and necessary and r.seful expenses on the thing sold.

-\
Y.
,J
i'l i ,r and B are co-owneru of a parcel land. A donated his share to c. Can B redeern the said share ftom C?
,^ Yes, br:cause the law looks with dbfavor at co-ownership.
i t'- i'tc, b(rause legal rede'nption applies only in case of onerous alienation.
i ,r rrnies; he enficrced his right through court action.
! i'es, but rn polrcrtion to his interest in the land as co-owner.
1o i) ;*q.

C a surn of money with M as mortgdqor of hb land to secure the loan. Is

the mortgEge valkl sren

if tfrc

.\, .,yt_!aqor +, not the rletrtor?


( .+ ) Y-s, provded the mortgagor or pl@or in case of pleclge is the absolute owner of the property rnortgaged tr
ll irledqerl.
b Yes, pr.rlided it is in writing and registered.
c. I'io, the rrrcrtgagoripledgor must be the debtor himself.
d. lto. unless the mortgagor is a co-debtor.
.l

l9 l, I tirree of tIrc fullowing cmes, the agency

I,

e.
i,
'. ,
.;.

is not revocablq except:


an obligation already contracted.
liildteral conu'act depends upon it.
it is coupled with interest common to Ete agent and principal.
Paf"rrer is appointed manager in the artkles of partnership and renroval is without just cause.

It is a means of fulfilling

r,l ii two or rpre pnncioal appoint a shgle agent

br a comfinn

transaction, the liability of the ficrmer shall be sol*Jary.

If hvo or rnore agents appointed by a single principal are jointly iiabh unless solidarity

a.
}.

tioLh statemenB are

Both are

true.

false.

ls

stiplated.

c. First is false, second is true.


d. Second is fialse, ftrst is bue.

,:2i

P auctrurtzed A to sell his products with 10o/o cornmbsion and 5olo guarantee cornmissbn. A sold them
ttrqaV despite the diligent efforLs of a in collecting. Is A still liable for the purchase prke?
,-a. /, Yes, because of the guarantee cornmission given to hm.
No, because he was not at fuult in the collection.
No, if he returns the guarantee commissirn.
Yes, and he is not entitled arryrrore to the commissbns.

b who failed

b.
c.
d.

222.|n three of the btbwing

cases, the agent can appoint a substitute, except:


The prirrcipal autlrorized him to appoint a substitute.
The principal did not authorize him to appoint a subsbtute.
c_. There is no stipuhtion as to t|te appointment of a substitute.
,' cl. )The principal torbkls the appointrnent of a suhtitute.

a.
b.

223. P appointed A and B as his agents for a cornmon transaction and they agreed that the latter shall be solidarily llable to
the former for damages in case of vblations of their oblklations as srch. When is the agent at fault the only one liable
for damages ryen if solidarity has been stipulated?
If the other agent is not at Fault.
Both of thern shall be liable always sirrce solidari$ was agreed upon.
If
,e-. the one at fault shall answer fur all the dannges,
' d. ) If the one at f;ault acted in excess of authority.

a.
b.

224. A\ B, and C entered into an oral contract of partrrcrship each conbibutirq P1M each to the common fund plus other
personal properties of the sanre amount and fiailed to reqister the partnership with the SEC, Is the partnership valid?
No, because every conkact of partnership having a capital of three thousand pesos or more in rnoney or property
- must be in public instrument and registered with the SEC.
by' Yes., because public instrumot is necessary only in case of conbibutions of immorrables.
Yes, because a partrrership aontract can always be oral.
No, because regbtration with the SEC is essential tor a partnership to be valid and acquire juriclkal personality.

a.
.
t.
d.

RsSA: The Review School of Accountancy

Page 19 of 19

225. P authorized A, a minor, to sell his car for P1M in cash. A sold the said car to X on installments at a lesser price of
P,9M. P is now repuliating the contract with X on the ground mat he is rnt bound since X contmcted with a minor wtto
.gxceedecj h,s authority. Decide.
(. a.1 P is liable urder the contract because it is enough that the principal is capacitated since he is the one entering inb
the contract.
P is not liable for the sale on installments since it is unenforceable because his agent acted beyond his powers.
P is not liable hecause the agent is a minor with whom X contracted.
P is liable provided the sab is in cash fur P1M.

\b.
c.
d.

it.5.

P.trtners A, B, and C contributed: A-PIM; B-P2M; and C-service. After et'raustirp the partnership assets, the creditors
.;'.ill have a t.lairn for P.3M. For how much arc the partners liable to the credibrs for the paftnership liability?
i)rrly A and B are liatrle equally to the creditors being capitalists.
'Jnly A crnd B are liable at '/3 aml'/3, respectively.
:-.) ltl ot A, B, and C are lhble pro rata b the oedibrs.
-, is not liabie heing an industrial partner who is exenpt frorn losses.

r
l-

I'

'i

. '

ir drri B arc co-owners of a parcel of lancl from which they derive profits in equal sharing being co-heirs in inhedtance.

t; trem a ;xrtnership?

,-,

['hr-it

:s

a p]finership because of the equal sharing of profiE.

.'ihertr is no partnaship because co-ownership by iEelf does not establish a partnemhip &spite the sharing of

,
i
.:,':l
r

iro:'iis.
Itrer-t: is nc partrrership sirrce in parhership divlsbn of profits is not alwa),s necess.rry anong partners.

.[l',i-re

i:;

partnershlp they being co-o$/ners and co-possessors.

A .r,r,j C are partrrers in Ace partnership. While a was performing his dutk= as a partrer in the conduct of tfie business,
'': r.:e4ligeni!y caused damage b X, a third person. Who shall be liable to X and in what capacity?
Only the partnership shall be liable it being a juridical person separate ard distinct fiom the partners.
Only A shall be liable for he is the only one at fault.
Both A and B shall be liable soliclarily b X.
\ A, B, and tfre Partrrership are atl liabh solklanly b X.

:
'r
t

,).

F-

(9
I.Iil.

of the tullowinq is not a prohibition on a limited partner?


Surname of a lirnitrlC partner may not appear in the partnership name.
i in, ited Fartne-r nray not take psrt in-ttreeonFeil cf ttr+trusi6ess-t-imits1 6.nrtner nny rrct contribute service
Limrted partner may mt consthrte hb assignee as s.ffiihjted limited parfEr,

'tlllist-h

a
:'
cl

[e]tr_glggdit is beryond U-te scope of the negotiable instrument law, becanse


a-.--)lt rs in favor of a specified person or mt b order -v .r' cf Z neclrririlrs .r/ Ld{
l rs cil'r order to pay out of a pafticular fund
r It rs without an urrconditional pombe or order to pay a sum certain in money
d
It is not payable on dernand or at a fxed or @terminable future time

**EflD***

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Ctrf.

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