Acctg 202A

FINAL EXAM

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PART 1: MULTIPLE CHOICE (10 points)

Choose the best answer. USE CAPITAL LETTERS. (1 point each)

1. Rescission of contract can take place in this case:

a. When the things are the object if the contract are legally in the
possession of third persons who acted in bad faith.
b. When he who demands recession can return whatever he may be
obliged to restore
c. When the party seeking rescission can perform only as to part and
rescind as to remainder
d. When the seller cannot return the installment paid to him by the
buyer.

2. The process of intentionally deceiving others by producing the

appearance of a contract which is different form the true agreement is:
a. Relative Simulation of a contract
b. Fraud
c. Absolute Simulation o contract
d. Misrepresentation

3. ABC are solidary creditors of X for P200,000. A makes a will giving the
P200,000 debt as a legacy. The obligation is extinguished by:
a. Confusion of debt c. Remission of debt
b. Novation of debt d. compensation of debt

4. A owes solidary creditors XYZ P10,000. There is remission of the debt

when:
a. X borrows P10,000 from A.
b. X waives the whole obligation debt of P10,000 to A.
c. X makes a will giving the P10,000 debt to A as legacy.
d. Y tells A that instead of paying P10,000, A shall just deliver a ring
to Y.
5. Three of the following are essential requisites of a contract of
mortgage. Which one is not?
a. The person instituting the mortgage has the free disposal of his
property.
b. The contract must be in writing.
c. The mortgagor is the absolute owner of the thing mortgaged.
d. The mortgage is constituted to secure the fulfillment of a principal
obligation.

6. Which of the following is an essential element of partnership?

a. There must be a contribution of money, property, or industry to a
common fund.
b. It must be an association for profit with the intention to divide the
profits among themselves.
c. There must be a valid and voluntary agreement.
d. All of the above

7. Which of the following liabilities of the partnership shall rank first in

order of payment?
a. Those owing to Creditors other than Partners.
b. Those owing to partners in respect to profit.
c. Those owing to partner in respect to the capital
d. Those owing to partners other than for capital and profits.

8. Between the right of redemption of co-owner and that of an adjoining

owner, which one is preferred?
a. The co-owner
b. The adjoining owner
c. The vendor shall choose which right is preferred
d. Answer not given

9. Statement 1: whenever a thing is essentially indivisible and the co-

owners cannot agree that it be allotted only to one of them who shall
indemnify the other, it shall be sold and the proceeds distributed.
Statement 1: If a thing is sold with the right of repurchase under the
circumstances mentioned in Statement 1 and the buyer acquired the
whole of it, the buyer may compel the vendor to redeem the whole
property, if the latter wishes to redeem.
a. Both are true
b. Both are false
c. Only statement 1 is true
d. Only statement 2 is true
 10. Statement 1: Acceptance of the goods by the buyer shall
discharge the seller from liability in damages or other legal remedy for
breach of any promise or warranty.
Statement 2: if, after acceptance of the goods, the buyer fails to give
notice to the seller of the breach in any promise or warranty within a
reasonable time and after knowledge by the buyer of the breach, the
seller shall not be liable therefor.
a. Both are true
b. Both are false
c. Only statement 1 is true
d. Only statement 2 is true

PART 2: MODIFIED TRUE OR FALSE (40 points)

Write TRUE if the statement is correct and FALSE if the statement is
wrong and state the reason that made the statement FALSE. (2
points each)

1. If the obligor binds himself to perform his obligation as soon as “he

shall have obtained a loan” from a certain bank, this obligation is with
a term.

2. Actual delivery of the thing or payment of the price is required for the
perfection of the sale.

3. Reluctantly and against her good sense and judgment, Rosemarie

entered into a contract for the delivery of % tables to Corazon for a
price of P50,000. The contract is voidable.

4. Universal Partnership is a type of Partnership in which partners enjoy

practically all the profits.

5. Simulated Contract takes place when the parties do not intend to be

bound at all by their agreement.

6. A partnership which comprises all that the partners may acquire by

their work or industry during the existence of the partnership is
Universal Partnership of Profits.

7. There shall be reformation of contract when a contract of sale

fraudulently made as a contract of lease.
8. A pledge cannot be constituted to secure the performance of a
voidable or unenforceable contract.

9. A pledge cannot be constituted unless the thing pledged be placed in

the possession of the creditor.

10. A stipulation in the mortgage contract prohibiting the owner from

alienating the immovable is valid.

11. If alienation of mortgage credit is not registered, it is still valid

between the parties.

12. There is a disputable presumption of law that a contract is

presumed to have an existing and lawful consideration, and the debtor
has the burden to prove that there is really no consideration.

13. Except in cases specified by law, lesion or inadequacy of cause

shall not invalidate a contract, unless there has been fraud and
mistake or undue influence.

14. When the parties agree upon the mortgage or pledge of real or
personal property, but the instrument states that the property is sold
absolutely or with right of repurchase, annulment is the proper
remedy.

15. Ratification requires the conformity of the contracting party who

has no right to file an action for annulment.

16. Whoever pays for the damages caused by his dependents or

employees may recover from the latter what he has paid or delivered
in satisfaction of the claim.

17. The Articles of Partnership must not be kept secret.

18. In sale of stolen object made in private, the owner cannot

recover from the buyer.
 19. Expenses of delivery shall be borne by the buyer unless agreed
otherwise.

20. When the goods are already at the hands of the buyer and seller
is still unpaid, the seller can no longer ask for rescission.

PART 3: ESSAY (60 points)

Kindly give a brief explanation to each questions. (3 points each)

1. Ralph and Vi agreed to form a partnership. Each contributed cash and

personal properties worth P100,000 to a common fund. But they did
not register with the Securities and Exchange Commission (SEC). is
the partnership valid? Explain your answer.

2. Anna transferred to Bella a parcel of land for the price of P2,000,000;

P800,000 to be paid in cash and for the difference, she will convey her
car worth P1,200,000. What kind of contract is this? How did you
decide?

3. Partnership assets and liabilities are:

December 31,2019 December 31, 2020
Assets P800,000 P200,000
Liabilities P400,000 P600,000
P400,000 (P400,000)
Capital A – P200,000
Capital B – P200,000
A and B are General Partners, have fully paid their capital contributions.
What is the remedy of the creditor? Explain.
a. Collect partnership liability from the Partnership
b. Collect partnership liability from A and B capital contributions
(including personal asset)
c. Collect partnership liability from B only
d. Collect partnership liability from A only

4. X, Y, and Z solidarily owe A, B,C and D P400,000. How much can A

collect from X? Show your computation.

5. When the mortgage is due and remains unpaid, can the mortgagee
appropriate the mortgaged property?
Answer 1: No, the only right of the mortgagee is to foreclose the
mortgage.
 Answer 2: Yes, if there is a stipulation in the mortgage contract
allowing the mortgagee, creditor may appropriate the property
mortgaged.
Which of the following is the best answer? Justify.

6. X, Y, and Z are partners and contributed to the Partnership P400,000;

P300,000 and services, respectively the partnership was later
liquidated and after payment of the Partnership indebtedness, only
P200,000 worth of assets remained. How much is the share of Z?

7. Anton, Ben, and Chris are partners in a joint venture engaged in real
estate and land developments. Anton, without the knowledge of Ben
and Chris, offered to sell to Don all the remaining unsold lots at a price
very much higher than the prevailing market prices. Anton bought out
Ben and Chris from the Partnership and they finally sold the lots at a
very big profit.
1st Conclusion: When Anton bought out Ben and Chris from
Partnership, the Partnership was dissolved so Ben and Chris have no
more share in the profit of the Sale.
2nd Conclusion: The sale of the lots between Anton and Don is void
because it was without the knowledge and consent of Ben and Chris.
Which of the following is/are the correct conclusion? Explain your
choice.

8. A, at the point of a gun, compels B to marry him. Since the contract of

marriage is voidable, either A or B has the right to file the action for
annulment. Is the statement correct?

9. Mr. George owes Mr. Jaroh P100,000. George knows that on maturity
date, he will not be able to pay Mr. Jaroh, and in order to prevent
attachment of his property by Mr. Jaroh, Mr.George, before maturity of
his debt, executes a contract pretending to sell to Mr. Jero his
property. Is the contract between Mr. George and Mr. Jero binding?
Explain.

10. Mr. A offered to sell his land to Mr. C for P300,000/ Mr. C
accepted the offer and paid Mr. A the purchase price. Mr.A delivered
the owner’s duplicate of the Transfer Certificate of Title of the Land.
Mr. Cruz wants to register the land in his name but the register of
Deeds ask Mr. C for the Deed of Sale. What can Mr. C do?

11. A is authorized by B to sell the latter’s books for P100 at 10%

commission. A sold 10 books to C on credit but for a price of P120
 each. After ratifying the sale of credit, B can collect cash payment from
C of how much? If there was no ratification, the contract is? Reason.

12. A and B are partners. On June 15, 2019 when the total
obligation of the partnership was P800,000, C was admitted as new
partner. At the time of C’s admission, the partnership creditors were M
for P500,000 and N for P300,000. After June 15, the partnership
borrowed from O P200,000 and P400,000 from P. On December 15,
2019, the partnership became insolvent leaving obligation totaling
P1,400,000 and the partnership assets amounting in P300,000. The
creditors are going after the separate properties of the partners to
satisfy their remaining claims’. How are the creditors’ claims satisfied?

13. A and B are capitalist partners with C as industrial partner, A and

B contributed P200,000 each to the capital of the Partnership. A
contractual liability of P500,000 was incurred by the Partnership to X.
The assets of the Partnership has been exhausted still leaving an
unpaid liability of P100,000, X can receive from?

14. Alberto borrows P200,000 from Benito payable in one year, with
Alberto offering one hectare of land as collateral in the form of Real
Estate Mortgage. The contract is made in a dialect unknown to Alberto,
Benito fraudulently explained to him that he is executing a mortgage
when in truth, it is deed of sale which Benito made. What is the
remedy of Alberto?

15. G, guardian of W, minor ward, sold W’s property worth P100,000

to X for P70,000. Thus W suffered lesion by more than ¼ of the value
of the property. Upon reaching the age of majority, X wanted to file for
rescission but can no longer return the P70,000. Would rescission be
proper? Explain.

16. Differentiate Annulment and Rescission.

17. A promise to sell to B his Toyota Corona Sedan for P400,000 at a

future date, and B promised to buy A’s Toyota for the same price at
the same time. Is there a perfected contract? If one of the parties fails
to comply with his promise, what is the remedy of the injured party?

18. S owns 10 sacks of rice for sale in his store. B came into the
store and buys the 10 sacks of at the price of P1,200 per sack and
promised S to pay as soon he is paid for the bags of cement which are
being unloaded from a truck parked opposite the store. Upon request
of B, S ordered the loading of the sacks of the rice on the truck, B did
 not appear to pay the price. So, S again ordered the unloading of the
sacks of rice. At this moment, the driver of the truck objected to the
unloading of the sacks of rice claiming he purchased the sacks of rice
from B and therefore acquired ownership thereof. Is the claim of the
driver of the truck valid? Can S order the unloading of the sacks of
rice? Explain your answer.

19. Maria purchased a quantity of bed sheets which were wrapped

up in bales. The sale was done in the warehouse of the seller. Some
bed sheets were pulled out from the bale displayed and found to be all
right. Maria the purchased 100 bales and paid the price. After delivery,
Maria discovered that some of the bedsheets contain holes. Can Maria
return the bales and recover the money she has paid? Justify your
answer.

20. D borrowed P200,000 from C. to secure the debt, D mortgaged

his land and the building in favor of C. The mortgage is registered with
the Registry of Property. Sometime later, D sold the land and building
to X who was not aware of the mortgage of the land and building. Can
is X bound by the contract of mortgage? Can C foreclose the
mortgage?