A 30. Which contracts are void ab initio?

I. Those which are relatively simulated.

II. Those whose cause, object, purpose is contrary to law, morals, good customs, public order or
public policy.
III. Those whose object is outside the commerce of men
IV. Those which contemplate impossible service.
V. Those whose consent of a contracting party is vitiated.
VI. Those whose cause or object did not exist at the time of the transaction.
A. II, III, IV and VI only
B. I, II, III, IV and V only
C. I, II, III, IV only
D. II, III, IV, V, and VI only

A is the answer because according to the New Civil Code, contracts “those whose consent of a
contracting party is vitiated” are voidable. They are valid up until contested. Also, contracts “those which are
relatively simulated” are voidable. Absolutely simulated contracts are those that are void ab initio, Therefore,
both I and V are not void ab initio unlike the contracts stated in II, III, IV and VI.

A 31. A wrote a check to B who indorsed the check to C. The check bounced when C encashed it. Who is
criminally liable under BP 22?
A. A
B. B
C. C
D. Bank

A (maker) is the one criminally liable under BP 22. According to Sec. 60 of the NIL, the liability of
the maker by making the instrument, is to pay the instrument according to its tenor. Also, what has been
penalized under BP 22 is not the purpose for which the check was issued, but the mere act of making the
check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds or
credit with the drawee bank for the payment of such check in full upon its presentment. Thus, the maker (A)
is the one criminally liable in that case.

A 32. What is the definition of the term insured deposit?

A. It means the amount due to any bonafide depositor for legitimate deposits in an insured bank as
of the date of closure but not to exceed five hundred thousand pesos (P 500,000.00)
B. It means the amount due to any bonafide depositor for illegitimate deposits in an insured bank as
of the date of closure but not to exceed five hundred thousand pesos (P 500,000.00)
C. It means the amount due to any bonafide depositor for legitimate deposits in an insured bank as
of the date of closure but not to exceed one million pesos (P 1,000,000.00)
D. It means the amount due to any bonafide depositor for illegitimate deposits in an insured bank as
of the date of closure but not to exceed one million pesos (P 1,000,000.00)

According to Section 4 (g) of Republic Act No. 3591, as amended by Section 2, Republic Act No.
9576, “insured deposits” is defined as the amount due to any bona fide depositor for legitimate deposits in an
insured bank net of any obligation of the depositor to the insured bank as of date of closure, but not to
exceed Five hundred thousand pesos (P500,000.00).

C 33. What is the quantitative threshold for a covered transaction in a casino?

A. Amount exceeding P 500,000 per day
B. Amount exceeding P 1,000,000 per day
C. Amount exceeding P 5,000,000 per day.
D. Amount exceeding P 50,000 per day.

**** Read amended AMLA

A 34. N is a dormant partner in ABC Partnership that sells home appliances. He has not made his presence
felt for 20 years. N purchased 20 wheelbarrows for ABC Partnership to sell. A, the managing partner became
furious with what N did because it is hard to sell wheelbarrows. What remedy does A have regarding the
contract entered by N?
A. A can just ignore the contract entered by N because it is unenforceable.
B. A has no remedy because the contract entered by N is perfectly valid.
C. A can ask for declaration of nullity of the contract.
D. A can ask for annulment of the contract.

**** Read Partnership Law

A 35. It is an exclusive right granted for a product, process, or an improvement of a product or process which
is new, inventive, and useful. This exclusive right gives the inventor the right to exclude others from making,
using, or selling the product of his invention during the 20-year life of this intellectual property.
A. Patent
B. Trademark
C. Copyright
D. Tradename

The statement presents the requisites of patentability showing that the answer to the question is patent.
According to Republic Act 8293 or the Intellectual Property Code, Section 21, Chapter II to be exact, any
technical solution of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable shall be Patentable. It may be, or may relate to, a product, or process, or an
improvement of any of the foregoing. Therefore, the statement pertains to a patent.

B 36. It is a protection option, which is designed to protect innovations that are not sufficiently inventive to
meet the inventive threshold required for standard patents application. It may be any useful machine,
implement, tools, product, composition, process, improvement or part of the same. That is of practical utility,
novelty, and industrial applicability. It is entitled to seven (7) years of protection from the date of filing, with
no possibility of renewal.
A. Patent
B. Utility Model
C. Industrial design
D. Trademark
**** Read IP

C 37. It is any composition of lines or colors or any three-dimensional form, whether or not associated with
lines or colors; provided that such composition or form gives a special appearance to and can serve as pattern
for an industrial product or handicraft. It shall be valid for five (5) years from the filing date of the
application. It may be renewed for not more than two (2) consecutive periods of five (5) years each, by paying
the renewal fee.
A. Patent
B. Utility model
C. Industrial design
D. Trademark

The statement presents the definition of what an industrial design is. According to Sec. 112, Chapter XIII,
RA 8293, an industrial design is any composition of lines or colors or any three-dimensional form, whether or
not associated-with lines or colors: Provided, That such composition or form gives a special appearance to
and can serve as pattern for an industrial product or handicraft.

A 38. Which of the following can be the subject to trademark protection under Intellectual Property Law?
A. “Rosario” as a name for cigarettes
B. Pale Pilsen for Beer
C. Star o Circle
D. Heart

“Rosario” as a name for cigarettes is the only choice that can be protected by trademark protection. Sec. 123,
Part III of the RA 8293 laid down the marks that cannot be protected or registered by the Intellectual
Property Code. Star or Circle (C) and Heart (D) are consisted of shapes that may be necessitated by technical
factors or by the nature of the goods themselves or factors that affect their intrinsic value. Pale pilsen (B)
consists exclusively of indications that may serve in trade to designate the kind, quality, quantity, intended
purpose, value, geographical origin, time or production of the goods or rendering of the services, or other
characteristics of the goods or services; since pale pilsen, is just an indication of a type of beer not a trade
name or mark.

A 39. D was a newly-admitted partner investing P 4,000 in ABC Partnership. A, B, and C each contributed P
10,000 each. After D’s admission, ABC Partnership borrowed 40,000 from E. Their operations became not
profitable and they decided to liquidate their liability to E. How much can D get reimbursement from A, B,
and C respectively?
A. P 265.705 each
B. P 500 each
C. P 300 each
D. P 200 each
COMPUTE HOW
D 40. A wrote a check to B, B used the said check to pay his obligation to C. C did not encash it for several
years. Eventually, the bank went bankrupt and A died. How is the obligation of B extinguished?
A. Prescription
 B. Impossibility of Performance
C. Carelessness
D. It was not extinguished.

EXPLAIN

A 41. What is the required vote for the increase of authorized capital stock of a corporation?
A. At least majority vote of Board of Directors and approval by at least 2/3 vote of stockholders and
compliance of minimum 25% subscription and minimum 25% of paid up
B. At least 2/3 of Board of Directors and approval by at least 2/3 vote of stockholders and compliance
of minimum 25% subscription and minimum 25% of paid up
C. At least 2/3 vote of stockholders and compliance of minimum 25% subscription and minimum 25%
of paid up
D. At least majority vote of Board of Directors

The required vote for the increase or decrease of authorized capital stock is at least majority vote of BOD
and approval by at least 2/3 vote of stockholders, as well as the compliance with minimum 25% subscription
and minimum 25% of paid up. These requisites were stated in Sec. 38 of the Corporation Code. The vote
required for the act to be approved should be consisted of the majority of BOD AND 2/3 OCS in a meeting
called for. This increase of capital must likewise abide by subscription and paid-in capital requirements atteste
by the Treasurer’s sworn statement. Also, this should be approved by the SEC.

D 42. Which of the following is NOT a requisite of a holder in due course?

A. He took the instrument complete and regular upon its face.
B. He became the holder of the instrument before it is overdue and without notice that it had been
previously dishonored if such was the fact.
C. He took the instrument in good faith and for value.
D. He has no knowledge of any fact which would impair the validity of the instrument or render it
valueless.

Among the choices, choice D is not stipulated as one of the requisites for a holder in due course. The
requisites of a holder in due course is stated in Sec. 52 of the NIL. As enumerated, a holder in due course is a
holder who has taken the instrument under the following conditions: that it is complete and regular upon its
face (choice A), that he became the holder of it before it was overdue, and without notice that it has been
previously dishonored if such was the fact (choice B); that he took it in good faith and for value (choice C),
and that at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in
the title of the person negotiating it. Therefore, choice D is not among the requisites of a holder in due
course.

B 43. In which of the following cases is the holder deemed to be a holder in due course?
A. The holder acquired the instrument through the indorsement of one of the two payees.
B. The holder acquired the instrument at noontime on its maturity date.
C. The holder accepted the instrument from the payee under a strong and reliable warning of the
latter’s swindling activities.
D. None of the above


A 44 Which of the following is a real defense in a negotiable instrument that may be set up against any type
of holder?
A. Want of authority of agent
B. Fraud in inducement
C. Absence or failure of consideration
D. Acquisition of instrument by force, duress fear or by unlawful means


B 45. Which of the following is a personal defense in a negotiable instrument that may be set up against a
holder not in due course but not against a holder in due course?
A. Fraud in factum
B. Illegality of consideration
C. Forgery
D. Minority


D 46. In which of the following cases must presentment for payment of a negotiable instrument be made?
A. To the drawer, where he made a stop payment order to the drawee-bank
B. To the drawer, where he withdrew all his deposit in the drawee-bank
C. To the indorser, where the instrument was made or accepted for his accommodation
D. None of the above


A 47. In which of the following bills of exchange is presentment for acceptance mandatory in order to charge
the drawer and general indorsers who are secondarily liable to the bill?
A. Bills payable after sight
B. Bills payable on demand
C. Bills payable at a fixed date
D. Bills payable at a fixed period after date


A 48. Two marks for the same product (candy) are currently being examined by the Trademark Examiner of
the Bureau of Trademarks to determine if they are confusingly similar. One product bears the trademark
“Axis Candy” while the other product uses the trademark “Yummy Axis Candy” What test shall be applied to
determine if there is trademark infringement?
A. Dominancy test
B. Holistic test
C. Enabling test
D. Best mode test


B 49. Two marks for the same product (soy sauce) are currently being examined by the Trademark Examiner
of the Bureau of Trademarks to determine if they are confusingly similar. The names of the manufactures are
apparently different as printed on the bottom part of their labels. However, the label designs, colors, print
styles and sizes are very similar and almost identical. What test shall be applied to determine if there is
trademark infringement?
A. Dominancy test
B. Holistic test
C. Enabling test
D. Best mode test


B 50. Which of the following statements relative to a bank conservator and bank receiver is FALSE?
A. Both take charge of the assets and liabilities of the subject bank.
B. Both have the power to rehabilitate or liquidate the corporate life of the subject bank.
C. Both need not to be officers or employees of the BSP.
D. None of the above.


D 51. A government employee, purchased DBP bonds with a total value of P 100,000 and receives annual
interest income from his investment. Under Bank Secrecy Law, the investment of the government employee
may be inquired into without need of a court order by the
A. Public prosecutor handling estafa case against the government employee
B. BIR officer auditing the VAT of the government employee
C. Credit investigator of a lending institution where the government employee applied for the loan
D. None of the foregoing


C 52. A maintained the following deposits at BPI Bank:

P 600,000 – savings deposit in the name of A and/or B
P 200,000 – time deposit in the name of ABC Partnership
P 300,000 – current account in the name of A
How much can A personally recover from PDIC if BPI Bank was liquidated by BSP?
A. P 900,000
B. P 600,000
C. P 550,000 or P 500,000
D. P 300,000


C 53. Which of the following is COVERED by RA 3765 also known as Truth in Lending Act?
A. Pawnshops
B. Small-loan money lenders
C. Both A and B
D. Neither A nor B


D 54. Which is FALSE about Foreign Currency Deposit Act also known as RA No. 6426?
 A. The foreign currency deposits maintained abroad by Filipino citizens are not covered by the
provisions of this act.
B. Depositary banks which have been qualifies by the Monetary Board to function under expanded
foreign currency deposit system are exempt in maintain the fifteen percent (15%) foreign currency
cover for their liabilities in the form of foreign currency deposit with BSP.
C. Foreign currency deposits are of absolutely confidential nature, except upon the written permission
of the depositor.
D. Foreign currency deposits are subject to attachment, garnishment, or any other order or process of
the court.


C 55. For validity and to bind third persons, where shall chattel mortgage executed on a private motor vehicle
be registered?
A. Chattel mortgage registry where the mortgagor resides
B. Land Transportation Office
C. Both A and B
D. Neither A nor B


C 56. Which of the following is considered “covered transaction” under AMLA for a banking institution?
A. P 250,000 or more in one banking day
B. P 500,000 or more in one banking day
C. Over P 500,000 in one banking day
D. P 1,000,000 or more in one banking day.


C 57. Which is NOT covered by the term “Securities” under Securities Regulation Code?
A. Shares of stocks
B. Voting trust certificates
C. Lease contracts
D. Bonds


D 58. Which is EXEMPTED from registration with SEC before engaging in the business of buying and
selling of securities in the Philippines?
A. Brokers and dealers
B. Associated persons of broker and dealer
C. Salesman of broker or dealer
D. None of the above
