Professional Documents
Culture Documents
Business Law Multiple Choice
Business Law Multiple Choice
Business Law Multiple Choice
OBLIGATIONS
Nature
1. Which of the following is not an essential element of an obligation?
A. Obligor
C. Presentation
B. Efficient cause
D. Creditor
2. A source of obligation not arising from law
A. Negotiorum gestio
B. Solutio indebiti
C. Culpa aquiliana
D. Contract
True
True
True
False
False
False
False
True
A.
True
True
B.
True
False
C.
False
False
D.
False
True
59. One is not a requisite needed in order that 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 SIR colored orange
D. When the thing is lost before the debtor incurred delay
Compensation
60. Legal compensation shall exist in the following cases, except:
A. That each of the obligees be the principal creditor of the other and he be at the same the principal debtor of the other
B. That both debts be due
C. That they may be liquidated and demandable;
D. That they both consist in a sum of money or if consumable also of the same kind and qualities as that stated.
61. A owes B P11,000 due on July 2, 2003. B owes A P6,000 due on July 3, 2003 and P4,000 due on July 10, 2003. B owes
C P11,000 due on July 3, 2003. On July 3, 2003 B cannot pay C so B assigns to C her credit of P11,000 against A,
without the knowledge of A. On July 10, 2003 C tries to collect from A the P11,000. How much can C compel A to pay?
A. P11,000
C. P5,000
B. P9,000
D. P1,000
Novation
62. Novation of a contract takes place in three of the following except:
A. Delegacion
C. Subrogation
B. Expromission
D. Assignment
63. When a third person assumes the payment or the obligation without the knowledge of the debtor but with the consent of
the creditor, there is
A. Delegacion
C. Subrogation
B. Expromission
D. Novation
64. 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 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 the will of D.
D. P1M plus interest from the time of payment until reimbursement.
65. 1st Statement. There is novation of the obligation if the period for payment is shortened from 5 years to 3 years
2nd Statement. There is novation of the obligation if the period for payment is extended from 3 years to 5 years
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
True
False
66. If the third person 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?
1st Answer He can recover from the debtor the entire amount, which he has paid
2nd Answer He subrogated to all of the rights of the creditor
A.
B.
C.
D.
1st Answer
Correct
Wrong
Correct
Wrong
2nd Answer
Correct
Wrong
Wrong
Correct
67. D owes C P1M. X without the knowledge or against the will of D paid C P2M.
1st Statement. There is quasi-contract with the obligation to reimburse the third person insofar as the payment has been
beneficial to the debtor.
2nd Statement. There is legal subrogation and therefore in case the debtor fails to reimburse the third person, the latter
may go after the mortgage, guaranty or penalty.
A.
B.
C.
D.
st
1 Statement
True
True
False
False
2nd Statement
True
False
False
True
Comprehensive
68. 1st Statement. Rights acquired in virtue of obligations are transmissible only if so stipulated by the parties.
2nd Statement. The law of the stipulation of the parties to an obligation may provide that the rights acquired by virtue
B.
True
False
C.
False
False
D.
False
True
69. 1st Statement. In the obligation to deliver a thing, the debtor has to deliver also the accessories if they have been
mentioned.
2nd Statement. 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.
B.
C.
D.
st
1 Statement
True
True
False
False
2nd Statement
True
False
False
True
70. 1st Statement. Impossible, unlawful, immoral conditions are not valid and not demandable except the obligations, which
depend upon them.
2nd Statement. Potestative condition, to be void must both be suspensive and dependent on the debtors will
A.
B.
C.
D.
st
1 Statement
True
True
False
False
2nd Statement
True
False
False
True
71. 1st Statement. The loss or deterioration of the thing intended as a substitute through the negligence of the obligor does
not render him liable.
2nd Statement. A person alternatively bound by different prestations shall completely perform one of
them
st
1 Statement
2nd Statement
A.
True
True
B.
True
False
C.
False
False
D.
False
True
72. 1st Statement. In tender payment and consignation, the refusal without valid reason of the creditor to accept the payment
of the debtor will extinguish the obligation.
2nd Statement. The third person who paid the obligation without the knowledge or against the will of the debtor is still
entitled to reimbursement from the debtor to the extent of the latters benefit.
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
CONTRACTS
General Provisions
73. A contract in which a person literally contracts with himself
A. Adhesion contract.
C. Accessory contract
B. Auto contract.
D. Unilateral contract
74. 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
75. By this principle, contracts take effect only upon the contracting parties, their assigns or successors in interest
A. Mutuality of contract
C. Relativity of contract
B. Freedom of contract
D. Obligatoriness of contract
76. 1st Statement. The principle of autonomy of contracts means that the contacting parties as a rule may agree upon any
stipulation
2nd Statement. Relativity of contracts means that contracts take effect not only between the parties as
a rule may agree upon any stipulation, clause, term and condition.
st
1 Statement
2nd Statement
A.
True
True
B.
True
False
C.
False
False
D.
False
True
77. 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
C. Voidable
D. Rescissible
PARTNERSHIP
Nature
96. 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 the SEC
B. Yes, because public instrument is necessary only in case of contributions of immovables.
C. Yes, because a partnership contract can always be oral
D. No, because registration with the SEC is essential for a partnership to be valid and acquire juridical personality
97. 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.
98. A, B, and C as partners in a partnership, stipulated and mutually agreed that A shall not share in the profits and losses. Is
the agreement valid as among the partners only and not against third persons?
A. Yes, because among the partners it is valid to exempt one from sharing in the profits and losses
B. Yes, valid as long as third person is not prejudiced
C. Not valid stipulation exempting a partner from sharing profits and losses
D. Not valid as against third persons or partnership creditors
Rights & Liabilities of Partners
99. A and B are partners in Ace partnership. While A was performing his duties, as a partner in the conduct of the business
and negligently caused damage to X, a third person. Who shall be liable to 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 fault
C. Both A and B shall be liable solidarity
D. A, B, and the partnership are all liable solidarily to X
100.1st Statement. 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
2nd Statement. A partner shall become a debtor of the partnership if he fails to deliver his promised contribution and shall
be in delay from the time of a demand from the partnership
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
101.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, for 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
102.A contributed P1M, B contributed P1M, and C contributed services. Suppose there was no agreement as to profit-loss
sharing, In case of profit of P.3M, what will be the share of C in the profit?
A. Equal to the share of A and B;
B. Just and equitable under the circumstances
C. P1M
D. Court to fix his share
103.A contributed P1M, B contributed P1M, and C contributed services. Suppose there was no agreement as to profit-loss
sharing,iIn case of loss of P.3M, what shall be his share in the loss?
A. Equal to the share of A and B;
B. Just and equitable under the circumstances
C. P1M
D. None.
Dissolution of Partnership
104.Three of the following dissolves a partnership, except:
A. Partnership business has become unlawful
B. Death, civil interdiction or insolvency of a partner
C. Expulsion of a partner
D. Partnership business can only be carried on at a loss
Liquidation of Partnership
105.Partners A, B and C contributed: A-P1M, B-P2M, and 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 capitalist
B. Only A and B are liable at 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 form losses
Limited Partnership
106.Which of the following is not a prohibition on limited partner?
Comprehensive
107.1st Statement. A contract of partnership where immovables are contributed must be in public instrument to be valid.
2nd Statement. A limited partnership must be SEC registered to be valid
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
108.1st Statement. A newly admitted partner shall be liable for the pre-existing obligations of the partnership at the time of his
admission in favor of partnership creditors up to the extent of his capital contribution
2nd Statement. An industrial partner shall not share in the losses and his share in the profits shall be just and equitable
under the circumstances.
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
CORPORATION
Nature
109.Which of the following is the disadvantage of forming a corporation?
A. The free and ready transferability of ownership
B. The shareholders are not liable for the debts of the business
C. Because of the power of succession, the existence of the entity is not affected by the personal vicissitudes of the
individual stockholders
D. The subservience of minority stockholders to the wishes of the minority subject only to equitable restraint
110. Private corporations have the following attributes except:
A. It is an article being created by law
B. It may be formed or created under special laws or charter
C. It has the right of succession
D. It has the powers, attributes, and properties expressed authorized by law or incident in its creation
111. Three of the following are requisites for the existence of de facto corporation, except:
A. Incorporated under valid law
C. Actual use of corporate powers
B. Attempt in good faith to organize
D. Existing in law and in fact
112. 1st Statement. A de facto corporation is one which is registered with the SEC.
2nd Statement. In corporation by estoppel, those who misrepresented themselves as forming a corporation are liable as
general partners
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
113. 1st Statement. A corporation can be a stockholder but not an incorporator
2nd Statement. To be a de jure corporation, it must be existing in law and in fact unlike a de facto one
1 Statement
2nd Statement
A.
True
True
B.
True
False
C.
False
False
D.
False
True
Incorporation of a business
114. Three of the following are required for incorporators, except:
A. They must be natural persons
B. All of legal age
C. Not less than five nor more than fifteen
D. Majority must be citizens of the Philippines
115. 1st Statement. The by-laws may provide that the holders of the majority of the outstanding capital stock shall elect all the
members of the board.
125.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 preemptive 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 X has waived his pre-emptive rights to the issuance of preferred shares when he subscribed to the
common shares
126.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 also have pre-emptive right to the 50,000 preferred 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 rights do not apply to the issuance of unissued shares
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
Meetings & Stocks
127.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. 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
Voting Requirements
128.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
129.A director of a corporation may be removed by:
A. Vote of majority of the outstanding capital stock
B. 2/3 of the stockholders
C. Majority of the stockholders
D. 2/3 of the outstanding capital stock
NEGOTIABLE INSTRUMENTS
Nature
130.A letter of credit is beyond the scope of the negotiable instrument law, because
A. It is in favor or a specific person or not to order
B. It is an order to pay out 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 time
Form and interpretation of negotiable instruments
131.Omissions that do not affect the negotiability of an instrument, except
A. It is not dated
B. Does not specify the value given
C. Does not specify the place where it is drawn
D. Does not name the payee where the instrument is payable to order
132.When the instrument is complete but undelivered, delivery is presumed to have been made in favor 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. Certificate of deposit
D. Postal money order
135.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
136.Which of the following is not negotiable instrument?
A. Pay to the order of Pedro Cruz P1M (Sgd) Jose Santos To: A or B
B. I promise to pay to the order of the bearer P1M. (Sgd) M
C. Due to Bearer P1M or a BMW car worth P1M at his option. (Sgd) M
D. Pay to the order of myself P1M. (Sgd) D To: W
137.The following are negotiable except:
A. Drawer A directs drawee B to pay C or order P10,000, 30 days after demand
B. Drawer A directs drawee B to pay C or order P10,000, 30 days after C passes the CPA board examinations
C. A promises to pay B or order P10,000 within 30 days after the death of C
D. A promises to pay B or order P10,000 on or before August 14, 2002
138.A note reads I promise to pay B or order P1,000, 30 days after B resolves the proceeds of his loan from ABC Bank. 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
139.This provision renders a note non-negotiable
A. A promises to pay to the order of B the sum of US $1,000 payable in pesos at the rate of exchange prevailing on
August 14, 2002
B. A promise to pay B P1,000 with 12% interest thereon
C. A promises to pay B P1,000 and all costs charges and expenses including reasonable attorneys fee
D. A promises to pay B P1,000 in two equal installments, the first payable on August 14, 2002 and the second on
September 14, 2002
140.Which of the following is not negotiable?
A. I promise to pay B or order P10,000 on or before September 14, 2002 in payment of the purchase price of the
merchandise I bought from him. Sgd. A
B. Pay to the order of B P20,000 on or before September 14, 2002 and change the same 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 August 14, 2002. To C Sgd. A
141.This is not negotiable
A. I promise to pay to the order of myself P10,000 signed by A, the maker
B. Pay on the order of the Commissioner of Internal Revenue P10,000 to ABC bank. Sgd. A
C. I promise to pay to order P10,000. Sgd. A
D. Pay to the order of X, Y and Z, P10,000. to B. Sgd. A
Endorsements
142.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.
Later X, without indorsing the note delivers the same to Y. The note subsequently dishonored by M. May Y proceed
against M for the note?
C. Real defense
D. National defense
150.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 he is a holder in one course or not
D. C can enforce the note against A only for P5,000 if he is not a holder in course.
151.A issued a note payable to bearer. He delivers the note to B, B indorses the note especially to C, then 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. Can enforce the note against B
Liabilities of Parties
152.M makes a negotiable promissory note for P10,000 with the name of the payee in blank. The note was stolen by P, who
inserts his name as payee and then indorses 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
C. A
D. B
153.The indorser who simply signs his name renders himself liable to all subsequent holder as
A. Primarily liable
C. Secondarily liable
B. Solidarily liable
D. Subsidiary liable
154.In a blank indorsement, the indorser renders himself
A. Primarily liable
C. Solidarily liable
B. Secondary liable
D. Subsidiary liable
155.A delivered to B the following instrument
One month after date, I promise to pay to B P10,000. Sgd. A. B indorsed 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 recovered from B?
A. No, C could not sue B and hold him liable as an indorser 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 give 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 assignor of the instrument
156.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 indorsement. Later, D delivers the note to E, a holder in
due course, which of the following is correct?
A. Being payable to order, the note can be negotiated by indorsement 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 indorse the instrument
D. The instrument is not-negotiable because it is payable to the order of a non-existing person
157.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 delivered to B for a special purpose only?
A. Yes, A can prove that he delivered the instrument to B for a 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
158.A made a negotiable promissory note in favor of B who negotiated it to C under the following indorsements. Pay to C
after passing the CPA examination in October 1999. 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 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
159.The drawee bank may not refuse to pay check drawn against it
A. If there is a stop payment issued by the drawer
B. If the drawer is insolvent
C. If the drawers deposits is insufficient
D. When the bank receives notice of the drawers death
Notice of Dishonor
160.A makes a note payable to B or order. The following are the indorsers of the note in the order of their indorsement: B, C,
D, E, F(holder) and G(subsequent holder). The note is dishonored 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 benefit of C, D, E, and G
B. The notice to 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
Discharge of negotiable instruments
161.The negotiable instrument is not discharged:
A. When the principal debtor becomes the holder thereof before or after maturity in his own behalf
B. By the intentional cancellation of the instrument
C. By payment in due course by the accommodation
D. By any other act which discharges a simple contract for the payment of money
B may demand within reasonable time from the sale the delivery of the car
B may demand delivery only after he has paid the price
S may seek payment of the price once he delivers the car
Payments and delivery shall take place only after one week from sale
173.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 place 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.
174.1st Statement. The seller must be the owner of the property he sells but his ownership need not exist on perfection but
upon delivery of the thing.
2nd Statement. A contract of sale may be absolute; conditional, either suspensive or resolutory; or subject to a
contingency; or undivided interest on property, either present or future except future inheritance.
A.
B.
C.
D.
st
1 Statement
True
True
False
False
2nd Statement
True
False
False
True
175.A sold his land to B verbally. The sale is:
A. Rescissible
B. Voidable
C. Unenforceable
D. Void
176.A sold to B his dog with the agreement that delivery shall be after one week from 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 buyer
D. The fruits after the sale but before delivery shall pertain to the buyer if so stipulated by the parties to the sale
177.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 to sell of the car at Bs option
D. Contract to sell of the car at Ss option
178.1st Statement. An oral sale of land made by its owner is unenforceable
2nd Statement. Sale of land made by an agent without written authority from the owner thereof is
void.
1st Statement
2nd Statement
A.
True
True
B.
True
False
C.
False
False
D.
False
True
182.S sold to B a thing without knowledge that the thing suffered from a hidden defect. The parties agrees 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.
183.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 defect
C. Yes, because the seller was in bad faith
D. No, because it was the fault of the buyer in buying a used car
184.S sold to B his dog without knowledge that the animal was suffering from a disease at the 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 animal.
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 defense to avoid liability
Extinguishment of Sale
185.In which of the following is sale not presumed equitable mortgage?
A. The price of the sale usually adequate
B. The vendor remains in possession of the thing sold
C. The vendor allows the extension of time to repurchase the thing sold
D. The purchaser retains for himself a part of the purchase price1
186.A and B are co-owners of a parcel 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 proportion to his interest in the land as co-owner.
187.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 title to a third person
C. Yes, because the law frowns upon co-ownership
D. Yes, provided he pays to the price, expenses of the sale and necessary and useful expenses on the thing sold
Comprehensive
188.1st Statement. In sale or return, the buyer becomes owner of the thing upon delivery while if on approval, trial or
satisfaction, after approval, express or implied.
2nd Statement. 2nd Statement. 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.
1st Statement
2nd Statement
A.
True
True
B.
True
False
C.
False
False
D.
False
True
AGENCY
Nature, Form and Kinds
189.In three of the following cases, the agency is not revocable, except:
A. It is a means of fulfilling an obligation already contracted
B. Bilateral contract depends upon it
C. It is coupled with interest common to the agent and principal.
D. Partner is appointed manager in the articles of partnership and removal is without just cause.
Operation of Agency
190.Special power of attorney is necessary in the following cases, except
A. To make such payments usually considered as acts of administration
B. To compromise, to submit questions to arbitration
C. To bind the principal in a contract of partnership
D. Any other act of strict dominion
191.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 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 not entitled anymore to the commissions
192.In three of the 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
193.P appointed A and B as his agents for a common transaction and they agreed that the latter shall be solidarily 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 of them 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
194.A sold Bs car in his (As) name to C without any authority from B, the contract of sale is
A. Rescissible
D. Unenforceable
B. Voidable
E. Valid
C. Void
195.A sold Bs car in the name of B without authority to C. The sale is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
196.A sold Bs car with authority to sell but sold it in (As) name. The contract is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
197.A as agent of P with oral authority, sold Ps land in a public instrument. The sale is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
198.With written authority from his principal, the agent sold verbally the land of the principal. The sale is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
199.Without authority from B, A sold the formers land in Bs name. The sale is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
200.Without authority from B, A sold the formers house in Bs name. The sale is:
A. Rescissible
C. Unenforceable
B. Voidable
D. Void
201.A, with oral authority from P, sold the latters house in writing. The sale is:
A. Rescissible
D. Void
B. Voidable
E. Valid
C. Unenforceable
202.A, agent of P, in excess of authority, entered into a contract in the name of P with X who knew of the lack of authority and
P did not ratify the contract. The contract is:
C. Unenforceable
D. Void
203.1st Statement. It two or more principal appoint a single agent for a common transaction, the liability of the former shall be
solidary
2nd Statement. If two or more agents appointed by a single principal are jointly liable unless solidarity is stipulated
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
204.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 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 installments since it is unenforceable because his agent acted beyond his powers
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
PLEDGE, REALTY MORTGAGE & CHATTEL MORTGAGE
Pledge
205.D pledged his car to C as security for a loan. Failing in the payment of the loan, C foreclosed the pledge and sold the car
at public auction. In case of deficiency, is D liable for it?
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
Real Mortgage
206.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 mortgagee was notified before the sale
D. No, if there was stipulation requiring prior consent
207.D owes C a sum of money with M as mortgagor of his land to secure the loan. Is the mortgage valid even if the
mortgagor is not the debtor?
A. Yes, provided the mortgagor or 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/pledgor must be the debtor himself
D. No, unless the mortgagor is a co-debtor
208.A gets a loan of P1M from B which becomes due on October 1, 2003 and mortgaged his house as security for the debt.
On June 30, 2003, the mortgage 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 satisfactory
D. Yes, the debt becomes demandable even if A can give another security equally satisfactory
Chattel Mortgage
209.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?
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
210.D mortgaged his car to 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?
Comprehensive
211. 1st Statement. Antichresis must be in writing and involves only immovables
2nd Statement. In pledge and Recto Law there is no deficiency liability.
A.
B.
C.
D.
1st Statement
True
True
False
False
2nd Statement
True
False
False
True
Answer Key
1. C
2. D
3. D
4. D
5. B
6. B
7. A
8. D
9. C
10. D
11. B
12. B
13. B
14. A
15. D
16. A
17. C
18. D
19. B
20. C
21. A
22. B
23. D
24. A
25. B
26. B
27. C
28. B
29. B
30. D
31. C
32. A
33. D
34. B
35. C
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
C
C
C
B
D
C
D
D
D
D
D
D
D
B
A
A
A
C
D
C
D
C
A
C
C
D
D
B
B
B
A
A
D
D
D
71. A
72. D
73. B
74. A
75. C
76. A
77. A
78. C
79. D
80. D
81. A
82. D
83. A
84. D
85. B
86. C
87. C
88. A
89. A
90. A
91. D
92. D
93. A
94. A
95. C
96. B
97. B
98. C
99. D
100. C
101. D
102. B
103. D
104. D
105. C
106. D
107. A
108. A
109. D
110. A
111. D
112. D
113. A
114. D
115. A
116. D
117. D
118. C
119. D
120. C
121. B
122. A
123. D
124. A
125. A
126. A
127. B
128. B
129. D
130. C
131. D
132. D
133. D
134. D
135. B
136. A
137. B
138. D
139. C
140. C
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
169.
170.
171.
172.
173.
174.
175.
C
B
D
D
D
C
B
C
B
D
B
A
C
B
D
B
D
D
B
D
A
B
D
B
D
D
A
D
B
B
A
A
A
A
C
176. A
177. B
178. A
179. C
180. C
181. A
182. A
183. A
184. D
185. A
186. B
187. B
188. A
189. C
190. A
191. A
192. D
193. D
194. C
195. C
196. C
197. D
198. C
199. C
200. C
201. E
202. B
203. A
204. A
205. A
206. A
207. A
208. C
209. D
210.A
201. A