RFBT Last Minute Quizzer

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS
LAST MINUTE QUIZZERS FOR CPALE

Compiled and Constructed by Vhin
OBLIGATIONS AND CONTRACTS
1. Which of the following statements in respect to determining when an agreement is not necessarily a contract is
inaccurate?
a. The courts are not concerned the intention of the parties as it is a private matter.
b. The parties in an agreement do not always intend to create legal relations.
c. Sometimes the Law implies the existence of a valid contract.
d. An agreement will not give rise a legally enforceable contract is not all of the elements that create a valid
contract have been satisfied.
2. Which of the following statements is the most accurate in respect to the nature of a contract?
a. The terms “contract” and “agreement” mean the same thing.
b. An agreement is a legally enforceable contract.
c. A contract is a type of agreement.
d. Not all contracts are agreements.
3. In determining whether the parties to an agreement intended to form a contract, the courts often rely upon
rebuttable legal presumptions. In this context, a “rebuttable” presumption is:
a. One which cannot be disputed by either party.
b. One which can be disputed by the party disadvantaged by the presumption.
c. A presumption based upon the evidence.
d. A reasonable presumption.
4. Which of the following situations is the best example of “executed consideration”?

a. Antonio pays Gregorio ₱500.00 today in return for Gregorio giving Antonio, a basket of fruits
today.
b. Antonio promises to pay Gregorio ₱500.00 tomorrow in return for Gregorio giving Antonio and a basket
of fruits tomorrow.
c. Antonio promises to pay Gregorio ₱500.00 tomorrow in return for Gregorio giving Antonio, a basket of
fruits yesterday.
d. All of the foregoing.
5. Which of the following situations is the best example of “executory consideration”?

a. Antonio pays Gregorio ₱500.00 today in return for Gregorio giving Antonio, a basket of fruits today.
b. Antonio promises to pay Gregorio ₱500.00 tomorrow in return for Gregorio giving Antonio and a
basket of fruits tomorrow.
c. Antonio promises to pay Gregorio ₱500.00 tomorrow in return for Gregorio giving Antonio, a basket of
fruits yesterday.
6. Which of the following statements is the best description of a “condition subsequent”?

a. A term in a contract, the consequences of breach of which cannot be determined until after the breach has
occurred and the seriousness of the effects of the breach can be ascertained.
b. A term in a contract which provides that the contract will terminate on the happening of a
particular event.
c. A term which must be satisfied before a contract can come into existence.
d. A term in a contract not essential to the main purpose of the contract, non-performance of which will
not entitle the plaintiff to rescind the contract.
7. Which of the following statements is the best description of a “condition precedent”?

b. A term in a contract which provides that the contract will terminate on the happening of a particular
event.
c. A term in a contract, non-performance of which may result in rescission of the contract and/ or damages
to the plaintiff.
d. A term which must be satisfied before a contract can come into existence.
RFBT LAST MINUTE QUIZZER FOR CPALE Compiled by Vhin
8. Which of the following statements is the best description of an “innominate term”?
a. A term in a contract, the consequences of breach of which cannot be determined until after the
breach has occurred and the seriousness of the effects of the breach can be ascertained.
event.
c. A term in a contract, non-performance of which may result in rescission of the contract and/ or damages
to the plaintiff.
d. A term in a contract not essential to the main purpose of the contract, non-performance of which will
not entitle the plaintiff to rescind the contract.
9. When is a particular statement more likely to be a term of the contract rather than a mere representation?
a. A long time has passed between the making of the statement and the final agreement.
b. The other party was asked to check or verify the statement.
c. The statement was made with the intention of preventing the other party from finding any defects.
d. Both parties placed considerable importance on the statement.
10. Which of the following statements is the best description of a “condition”?

event.
c. A term in a contract, non-performance of which may result in rescission of the contract and/ or
damages to the plaintiff.
d. A term which must be satisfied before a contract can come into existence.
11. Which of the following statements is the best description of a “Warranty”?

a. A term in a contract which provides that the contract will terminate on the happening of a particular
event.
b. A term in a contract, non-performance of which may result in rescission of the contract and/ or damages
to the plaintiff.
c. A term which must be satisfied before a contract can come into existence.
d. A term in a contract not essential to the main purpose of the contract, non-performance of
which will not entitle the plaintiff to rescind the contract.
12. Which of the following situations appears to involve “undue influence” thereby negating genuine consent which is
an essential element of a valid contract?
a. An elderly couple signs a mortgage in favor of a Bank guaranteeing their son’s debts; the Bank manager
knows that the couples are unaware of the son’s financial difficulties.
b. A man induced another to sign a contract by telling him that if he did not, he would report his son to
the police for committing a criminal offence.
c. A woman gave all of her property to the religious order of which she was a member.
d. All of the above.
13. Which of the following situations appears to involve “duress” thereby negating genuine consent?
a. An elderly couple signs a mortgage in favor of a Bank guaranteeing their son’s debts; the Bank manager
knows that the couples are unaware of the son’s financial difficulties.
b. A man induced another to sign a contract by telling him that if he did not, he would report his
son to the police for committing a criminal offence.
14. Which of the following situations appears to involve conduct that amounts to “unconscionability”?
a. An elderly couple signs a mortgage in favor of a Bank guaranteeing their son’s debts; the Bank
manager knows that the couples are unaware of the son’s financial difficulties.
b. A man induced another to sign a contract by telling him that if he did not, he would report his son to
the police for committing a criminal offence.
15. Which of the following statements is the best description of “mutual mistake” that has arisen between two parties to a
contract?
a. One of the parties is mistaken as to the nature of document which they have signed.
b. Both parties are mistaken about a material fact that is important to the subject matter of the
contract.
c. Both parties have made the same mistake about the existence or identity of the subject matter of the
contract.
d. One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the
other party takes advantage of this mistake.
16. Which of the following statements is the best description of “unilateral mistake” made by one party only?
b. Both parties are mistaken about a material fact that is important to the subject matter of the contract.
contract.
d. One of the parties is mistaken about a material fact regarding the subject matter of the contract, and
the other party takes advantage of this mistake.
17. Which of the following statements is the best description of “common mistake” between parties to a contract?
b. Both parties are mistaken about a material fact that is important to the subject matter of the contract.
contract.
d. One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the
other party takes advantage of this mistake.
18. Which of the following statement is the best description of “undue influence” that indicates that genuine consent
is lacking?
a. The improper use of a superior bargaining position to induce a contract.
b. The improper use of violence or of threats of violence to induce a contract.
c. The improper use of a position of influence or power to induce a contract.
19. Which of the following statements is the most accurate description of conduct of “unconscionability”?
a. The improper use of a superior bargaining position to induce a contract.
b. The improper use of violence or of threats of violence to induce a contract.
c. The improper use of a position of influence or power to induce a contract.
20. Which of the following statements is the best description of a “negligent” misrepresentation?
a. A false statement of fact made knowingly, which the other person relies upon and suffers loss.
b. A false statement of fact made with the belief that it is true, which the other person relies upon and suffers
loss.
c. A false statement of fact made carelessly, which the other person relies upon and suffers loss.
21. Which of the following statements is the best description of an “innocent” misrepresentation?
b. A false statement of fact made with the belief that it is true, which the other person relies upon and
suffers loss.
22. Which of the following statements is the best description of a “fraudulent” misrepresentation?
b. A false statement of fact made with the belief that it is true, which the other person relies upon and suffers
loss.
23. Which of the following statements is the best description of the remedy of “restitution”?
a. The injured party is entitled to set aside the contract and be restored to their pre-contractual position.
b. The party at fault is restrained from breaching the contract or from committing a wrongful act.
c. The party at fault is directed to carry out their obligations under the contract.
d. The party at fault has unjustly obtained a benefit at the injured party’s expense and is ordered to
restore it to the injured party.
24. Which of the following statements is the best description of the remedy of “damages”?
a. The party at fault is restrained from breaching the contract or from committing a wrongful act.
b. The party at fault is directed to carry out their obligations under the contract.
c. The party at fault has unjustly obtained a benefit at the injured party’s expense and is ordered to restore
it to the injured party.
d. The injured party is compensated for their loss by putting the parties in the position they would have
been in if the contract had been performed.
25. Which of the following statements is the best description of the remedy of “specific performance”?
d. The party at fault has unjustly obtained a benefit at the injured party’s expense and is ordered to restore
26. Which of the following statements is the best description of the remedy of “injunction”?
d. The party at fault has unjustly obtained a benefit at the injured party’s expense and is ordered to restore
27. Debtor owes Creditor P20, 000. On the due date of the obligation, Debtor could not pay. Debtor instead offered
his TV set worth P20,000 in payment of the obligation. Creditor agrees.
a. There is no payment because the debt may only be discharged by the delivery of legal tender.
b. There is payment pursuant to a facultative obligation because of a substitution.
c. There is dation in payment or dacion en pago.
d. There is payment by cession.
28. Pedro offered to sell to Marita a purported diamond ring which actually was a stone of inferior quality. Believing
it to be a genuine diamond ring, Marita bought and paid for the ring. If later on, Marita discovers the
misrepresentation, Marita may:
a. Sue for damages alone because of dolo causante.
b. Sue for rescission.
c. For annulment because of dolo incidente.
d. For annulment because of dolo causante.
29. On June 5, 2022, Jose Dizon was supposed to deliver to Ruben Samia a specified red car. There was no delivery
however, on said date. On June 15, 2017, the garage of the car collapsed because of an earthquake and the car
was totally destroyed. Is Jose Dizon liable?
a. No, because he could plead impossibility of performance due to a fortuitous event even if he is in default.
b. Yes, because Jose Dizon is in legal delay.
c. No, because there was no demand and the car was lost through a fortuitous event.
d. Yes, because there is a perfected contract.
30. Which if the following is demand necessary to make the debtor in delay in the performance of his obligation?
a. When demand would be useless;
b. When the law so provides;
c. When the time of performance is of the essence;
d. When the time of performance has been stipulated.
31. One is not a requisite needed in order that obligation shall be extinguished by loss or destruction of the thing due:
a. When the thing is lost without the fault of the debtor
b. When the thing is lost before the debtor has incurred in delay
c. When the thing lost is generic
d. When the thing lost is specific
32. Joshua, Russell and Tommy borrowed P6,000,000 from Marian, Anthony and Maricar evidenced by a promissory
note worded as follows, to wit: “I promise to pay Marian, Anthony and Maricar P6,000,000. (Sgd) Joshua, Russell
and Tommy” How much can Marian collect from Joshua?
a. P6,000,000
b. P3,000,000
c. P1,000,000
d. P2,000,000
33. A was having his house repaired by B, who needed construction materials, so A orally told the seller C, “Give B
the materials, I shall be responsible. I shall pay in 30 days”. C delivered the materials. As a result,
a. The contract is unenforceable because A made an oral agreement to answer for the debt of B
b. The contract is enforceable because A did not make a special promise to answer for the default of
another person
c. The contract shall be enforceable if there is ratification by A
d. The contract shall be unenforceable if the value is at least P500.00
34. Which of the following statements is not correct?

a. A solidary creditor can assign his right even without the consent of the other creditors
b. Remission of the debt by any of the solidary creditors shall extinguish the obligation
c. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept
d. The debtor may pay any of the solidary creditors but if any demand has been made by one of them,
payment should be made to him
35. Which of the following statements is correct?

a. The effect of a conditional obligation to give, once the condition has been fulfilled, shall retroact to
the day of the constitution of the obligation
b. If the obligation is unilateral, the fruits and interest during the pendency of the condition shall be deemed
to have been mutually compensated
c. If the obligation imposes reciprocal prestations upon the parties, the debtor shall appropriate the fruits and
interests received, unless from the nature and circumstances of the obligation it should be inferred that the
intention was different
d. In an obligation to do and not to do, the parties shall determine, in each case the retroactive effect of the
condition that has been complied with
36. A, B and C are solidary debtors sharing at 1:2:3 of solidary creditors W and Y sharing at 1:2. The obligation is
P12,000. If B is a minor and C is insolvent and W condones the obligation of A without the consent of Y, how
much can W collect from A?
a. P8,000
b. P6,000
c. P2,000
d. P0
Computation
Mixed Solidary Debt P12,000

Less: Share of B, a minor in solidary debt, real defense (P12,000 x 2/6) ( 4,000)
Less: Share of A which is condoned by solidary creditor (P12,000 x 1/6) ( 2,000)
Amount that W can collect from A P6,000
Even though the obligation is solidary, the share of the minor debtor may still be setup as a defense because it
is a real defense but only in so far as the share of the minor is concerned.
37. A, B and C are solidary debtors of W and Y, joint creditors for P12,000 where the share of the debtors in the
obligation is 2:3:5 while the share of the creditors is 1:2. If A is insolvent, which of the following is correct?
a. W can collect from B P3,200
b. Y can collect from C P6,400
c. W or Y can collect from B and C P12,000
d. Y can collect from either B or C P8,000
Computation
Share of joint creditor Y from the obligation (P12,000 x 2/3) P8,000
Since the obligation is joint only on the part of creditor, Y can only proportionately collect his share of 2/3 out
of P12,000 or P8,000 from either B and C, the solidary debtors who are not insolvent. Since the obligation is
solidary on the party of debtor, B and C will absorb the insolvency of A.
38. A pointed a gun and threatened to kill B if B will not sign a promissory note which reads “I promise to pay A,
P100,000”. Out of fear, B signed the note. It turned out that two days earlier, A’s obligation to B amounting to
P100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct?
a. Yes, because the promissory note is valid
b. No, because the promissory note was signed only because there was intimidation
c. Yes, provided B will agree
d. No, because A’s obligation does not exist
39. A has two creditors, B and C. the obligation to B is P10,000 and to C is P12,000. Later, with the consent of A and
B, W pays B P10,000. Now W and C are the creditors of A. Suppose A has only P12,000, which is correct?
a. C should be preferred
b. W should be preferred
c. C and W should be paid proportionately
d. A may choose whom to pay
40. A, minor, sold the ring of his brother without authority for P600,000. The ring has a fair market value of
P1,000,000. The contract is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
41. X, Y and Z are W’s sons. Upon the death of W, the three sons found a last will and testament in the cabinet of W.
The will showed disposition of a 30-hectare land, the only asset of W at the time of his death in favor of the
following: X – 5 hectares, Y – 10 hectares and Z – 15 hectares. X felt discriminated with his share of only 5
hectares. Which is correct?
a. Reformation of the instrument in order to correct the disparity in the disposal of the property
b. Annulment of the instrument is the proper remedy to correct the mistake
c. Rescission is the proper remedy to correct the damage on the part of X
d. The law does not allow any remedy in this case
42. A obtained an interest free loan of P50,000 from B evidenced by a promissory note payable six months after date.
At maturity, A called B by phone to ask for an extension of one month and offer to pay 20% interest on the loan.
Enticed by the 20% interest, B agreed to the extension of maturity. Which is correct?
a. The interest is a demandable interest by virtue of an agreement
b. The interest is unenforceable
c. The loan is valid but the interest is void
d. The loan and interest are both demandable
43. A, husband and B, wife are legally separated. By order of the court, which decreed the legal separation, A is
obliged to give a monthly support of P50,000 to B payable in advance within the first five days of the month. B
owes A P50,000 by way of loan. On the other hand, A has not yet given B support of P50,000 for the preceding
month and another P50,000 of the present month. All the debts are already due. Based on the foregoing, which of
the following statements is incorrect?
a. If B demands her support for the preceding month, A may set up compensation as regards the loan that B
owes him
b. If B demands her support for the current month, A may claim compensation as regards the loan
that B owes him
c. If A demands payment of the loan, B may set up compensation as regards her support for the preceding
month that A owes her
d. If A demands payment of the loan, B may set up compensation as regards her support for the current
month that A owes her
44. On January 1, 2022, A bought a parcel of land from B who was insane. The deed of sale was duly acknowledged
before a notary public. Six months after the sale, A realized that he needed a larger area on which to construct a
commercial building. At about the same time, B who had been undergoing psychiatric treatment was declared of
sound mind by his neurologist. Which is correct should a court action be filed today?
a. A may successfully prosecute a court action to annul the contract on the ground of B’s insanity
b. B may successfully prosecute a court action to annul the contract on the ground of his insanity
c. Neither A nor B may successfully prosecute a court action to annul the contract
d. A may successfully prosecute a court action to annul the contract on the ground of mistake as to the area
of the parcel of land
45. A delivered to B the following instrument: In payment of a gambling debt, A made a promissory note which
reads: “I promise to pay 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 recover from B?
a. No, C could not sue B because B did not write the name of C as indorsee
b. No, the instrument is not negotiable and B is a mere assignor of credit
c. Yes, provided C gives notice of 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
46. In payment of merchandise purchased by A from B, A made a promissory note which reads “I promise to pay B
P10,000. Sgd. A”. B indorsed the note in blank before maturity and delivered to C for value. A failed to pay due
to insolvency upon maturity. Could C collect from B?
a. No, C could not sue B because B did not write the name of C as indorsee
b. No, the instrument is not negotiable and B is a mere assignor of credit
c. Yes, provided C gives notice of 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 credit
47. Which of the following is a valid stipulation?

a. A promise to give B P10,000, and if A fails, A will allow B to have sexual intercourse with her
b. A will give B P10,000, if B will kill C
c. A agreed to give B a house and lot if B will be his mistress
d. A agreed to put poison on the food of B’s wife and if A fails, to pay B P10,000 for damages
48. A, B and C are solidarily indebted to D for P9,000 representing the purchase price of 1gram of shabu but A’s
consent has been obtained by violence and intimidation, and B is a minor. How much can D collect from C?
a. P9,000
b. P6,000
c. P3,000
d. P0
49. A, a minor, B and C wrote and signed a promissory note which states “I promise to pay D P30,000.” At the
maturity date of the note, how much may D validly collect from C if B becomes insolvent?
a. P10,000
b. P20,000
c. P30,000
d. P15,000
Computation
Solidary Debt P30,000
Less: Share of minor A (real defense) ( 10,000)
Amount that can be collected P20,000
50. A has three outstanding due and demandable obligations to B consisting of: (1) Accounts Payable in the amount
of P1,000,000; (2) Notes Payable in the amount of P1,000,000 which is solidary debt with G; (3) Loans Payable
with 10% interest in the amount of P1,000,000; and (4) Mortgage Payable in the amount of P1,000,000 which is
secured by real estate mortgage over A’s land. A paid P1,000,000 to B and designated the payment to the
accounts payable. In which debt shall the payment be applied by B?
a. Accounts payable
b. Notes payable
c. Loans payable
d. Mortgage payable
51. A, B and C wrote and signed a promissory note which states “We promise to pay D and E P60,000.” At the
maturity date of the note, D indorsed back the promissory note to A. How much obligation is extinguished and by
what mode of extinguishment of obligation?
a. P20,000 by confusion
b. P60,000 by compensation
c. P30,000 by remission
d. P10,000 by merger
Computation
Since the obligation is joint, only the share of D and A will be extinguished amounting to P10,000
(P60,000/3=P20,000/2=P10,000)
52. A has an obligation to deliver a specific cellphone to B but a specific laptop may be substituted in lieu of the
specific cellphone. Who has the right of choice in this type of obligation?
a. A unless there is stipulation to the contrary
b. B unless there is stipulation to the contrary
c. Always A
d. Always B
53. Under the law, anything paid or delivered before the arrival of the suspensive period the obligor being unaware of
the period, may be recovered with the fruits and interest. Which is the exception?
a. The obligor is not aware of the period.
b. The obligor delivered before the period.
c. The period is for the benefit of the creditor and debtor.
d. The obligation involved is an obligation to do and not to do.
54. Which of the following condonations will NOT extinguish the debtor’s obligation?
a. The condonation and the acceptance are made orally with the creditor delivering to the debtor
simultaneously the promissory note amounting to P10,000.
b. The condonation is in a public instrument. The acceptance is made in a private instrument. The
condonation involves a television set worth P20,000.
c. The condonation and the acceptance are in a public instrument. The condonation involves a parcel of
land.
d. The condonation is in a public instrument. The acceptance is made orally. The condonation involves a
computer printer whose value is P4,000.
55. Which of the following circumstances will payment of lesser amount fail to discharge a debt, despite a creditor’s
promise to accept the lesser amount in full satisfaction of the debt?
a. Where the creditor has requested that the debtor pay the lesser amount on an earlier date.
b. Where the creditor has requested that the debtor pay the lesser amount at a different place.
c. When the creditor has requested that the debtor pay the lesser amount by cheque instead of cash.
d. Where the creditor has requested that the debtor accompany payment of the lesser amount with some
other act, they were not originally bound by the contract to perform.
56. Betina Furniture Co. undertook to deliver to Mr. Magsaysay specified places of living room, dining room and
bedroom furniture – all made of narra, for a price stated in the contract. The contract had a penal clause that any
violation of the contract would entitle the aggrieved party to damages in the amount of P100,000. The furniture
delivered by Betina was made, not of narra but of inferior wood. In a suit to recover damages, Mr. Magsaysay
was able to prove that the actual damages he sustained amount to P200,000. If you were to decide based on legal
ground, how much claim would you award to Mr. Magsaysay?
a. P50,000
b. P200,000
c. P300,000
d. P100,000
57. The following are the requisites for the filing of subrogatory action, except:
a. there must be a failure of the debtor to collect from third persons whether willfully or through negligence
b. the creditor has a right of credit against the debtor although at the moment is not liquidated.
c. the act being impugned is fraudulent.
d. the credit must be due and demandable.
58. Demand is necessary in this situation for the debtor to be in delay

a. When the time is a controlling motive.
b. When the obligation has been fulfilled.
c. When the obligor has rendered it beyond his power to perform.
d. When the debtor delivers a wrong thing in the due date.
59. Which of the following statements relative to contracts is incorrect?

a. If both parties are minors, the contract is unenforceable.
b. If the insane party entered into the contract during a lucid interval, the contract is voidable.
c. If one party is a minor and other is not, the contract is voidable.
d. A contract entered into while in state of drunkenness is voidable.
60. For a contract to exist, the agreement that was negotiated between the parties must:
a. contain a promise which is exchanged for something of value.
b. contain a commitment in undertaking to abide by the agreement.
c. clearly evidence the promise between the promisor and the promisee.
d. all of the choices.
61. Terms may be implied into a contract under the general law or by statute on the basis of a variety of reasons.
Which of the following is not one such reason?
a. That the term follows a well-known trade custom in a particular industry.
b. That there is a provision in a relevant statute which requires that the term should be implied into every
contract of a particular kind.
c. That by implying the term it would make a fairer bargain.
d. That by implying the term it would cure an obvious omission and give the contract business efficacy.
62. Mr. S sold a banana plantation to Mr. B for P3 million although its market value is P20 million. It was agreed that
Mr. S shall remain in possession as lessee of the land and shall be responsible for the real estate taxes.
a. The contract gives rise to an action for annulment.
b. The contract gives rise to an action for rescission.
c. The contract is presumed to be an equitable mortgage.
d. The contract is a sale.
63. Which among the situations below states a correct principle of law?
a. Third Person pays Debtor’s debt without intending to be reimbursed by Debtor. The payment will not
extinguish the obligation even if accepted by Creditor if Debtor does not consent to the payment.
b. Third person pays Debtor’s debt without intending to be reimbursed by Debtor. The payment will
extinguish the obligation if Debtor does not consent to the payment.
c. Debtor is obliged to give Creditor a Rado watch. Since no Rado watch was available on the due date,
Debtor decided to deliver a watch of a different brand more valuable than the one that is due. Creditor
must accept the watch.
d. D owes C P20, 000. D pays B, brother of C. The payment is not valid even if it redounded to the
benefit of C.
64. Samson, Inc. and Goodfit Construction, Inc. are only construction companies available to bid of the construction
of the new building at the Katipunan Institute of Technology. Executives from the two companies agreed to fix
the bids so that Samson, Inc. wins one contract and Goodfit Construction, Inc. the other contract. Samson, Inc.
reneges on the deal and wins both contracts, Goodfit Construction, Inc. sues for breach of contract. Will Samson,
Inc. win?
a. No, agreements to defeat competitive bidding are illegal only in the construction industry.
b. No, agreements to defeat competitive bidding are illegal.
c. Yes, agreements to defeat competitive bidding are legal.
d. Yes, agreements to defeat competitive bidding are legal only in the construction industry.
65. The following are the requisites for the filing of rescissory action, EXCEPT
a. the debtor has made a subsequent contract conveying a patrimonial benefit to a third person.
b. the third person who received the property conveyed of, by onerous title, has been an accomplice in the
fraud.
c. the right and actions are not purely personal or inherent in the person of the debtor.
d. the act of being impugned is fraudulent.
66. Lennie bought a business class ticket from Alta Airlines. As she checked in, the manager downgraded her to
economy on the ground that a congressman had to be accommodated in the business class. Lennie suffered the
discomfort and embarrassment of the downgrade. She sued the airlines for quasi-delict but Alta Airlines
countered that, since her travel was governed by a contract between them, no quasi-delict could arise. Is the
airline correct?
a. No, the breach of contract may in fact be tortious as when it is tainted as in this case with
arbitrariness, gross bad faith, and malice.
b. No, denying Lennie the comfort and amenities of the business class as provided in the ticket is a tortious
act.
c. Yes, since the facts show a breach of contract, not a quasi-delict.
d. Yes, since quasi-delict presupposes the absence of a pre-existing contractual relation between the parties.
67. Raul, Ester, and Rufus inherited a 10-hectare land from their father. Before the land could be partitioned,
however, Raul sold his hereditary right to Raffy, a stranger to the family, for P5 million. Do Ester and Rufus have
a remedy for keeping the land within their family?
a. Yes, they may be subrogated to Raffy’s right provided they buy him out before he registers the sale.
b. Yes, they may be subrogated to Raffy’s right by reimbursing to him within the required time what
he paid Raul.
c. No, since there was no impediment to Raul selling his inheritance to a stranger.
d. No, they can be subrogated to Raffy’s right only with his conformity.
68. X, the owner, constituted a 10-year usufruct on his land as well as on the building standing on it in Y’s favor.
After flood totally destroyed the building 5 years later, X told Y that an act of God terminated the usufruct and
that he should vacate the land. Is X, the owner of the land, correct?
a. Yes, since Y cannot use the land without the building.
b. Yes, since the destruction of the building without the X’s fault terminated the usufruct.
c. No, since the building was destroyed through no fault of Y.
d. No, since Y still has the right to use the land and the materials left on it.
69. Rudolf borrowed P1 million from Rodrigo and Fernando who acted as solidary creditors. When the loan matured,
Rodrigo wrote a letter to Rudolf, demanding payment of the loan directly to him. Before Rudolf could comply,
Fernando went to see him personally to collect and he paid him. Did Rudolf make a valid payment?
a. Yes, since the payment covers the whole obligation.
b. Yes, since Fernando was a solidary creditor, payment to him extinguished the obligation.
c. No, since Rodrigo, the other solidary creditor, already made a prior demand for payment from
Rudolf.
d. No, since Rudolf should have split the payment between Rodrigo and Fernando.
70. Roy and Carlos both undertook a contract to deliver to Sam in Manila a boat docked in Subic. Before they could
deliver it, however, the boat sank in a storm. The contract provides that fortuitous event shall not exempt Roy and
Carlos from their obligation. Owing to the loss of the motor boat, such obligation is deemed converted into one of
indemnity for damages. Is the liability of Roy and Carlos joint or solidary?
a. Neither solidary nor joint since they cannot waive the defense of fortuitous event to which they are
entitled.
b. Joint since the conversion of their liability to one of indemnity for damages made it joint.
c. Solidary or joint upon the discretion of Sam.
d. Solidary since Roy and Carlos failed to perform their obligation to deliver the motor boat.
71. Anne owed Bessy P1 million due on October 1, 2011 but failed to pay her on due date. Bessy sent a demand letter
to Anne giving her 5 days from receipt within which to pay. Two days after receipt of the letter, Anne personally
offered to pay Bessy in manager's check but the latter refused to accept the same. The 5 days lapsed. May Anne’s
obligation be considered extinguished?
a. No, since a manager’s check is not considered legal tender in the Philippines.
b. No, since tender of payment even in cash, if refused, will not discharge the obligation without
proper consignation in court.
c. Yes, since Bessy’s refusal of the manager’s check, which is presumed funded, amounts to a satisfaction of
the obligation.
d. Yes, since Anne tendered payment of the full amount due.
72. Jose went to visit Pablo, a friend one Sunday morning where a card game was going on. Jose joined the game and
lost P50,000. He became indebted to the winner for P10, 000 more. Which among the following statements is not
correct?
a. The winner cannot maintain an action to collect the P10,000.
b. Jose may recover P50,000 from the winner with legal interest from the time he paid the amount lost.
c. Jose may recover P50,000 from the winner but without legal interest.
d. If Jose refuses to recover from the winner, the spouse of Jose may institute the action to recover.
73. Which of the following is most likely incorrect?

a. Mr. D promised to deliver to Mr. C 100 bottles of Japanese red wine of a specified brand. Without the
knowledge of Mr. D, production of the wine had been stopped. Despite earnest efforts, Mr. D could only
deliver ninety (90) bottles. Mr. O’s obligation is deemed fulfilled.
b. Mr. D promised to deliver 100 sacks of a certain type of rice. He delivered only 90 sacks but the obligee
did not object to the incomplete delivery. The obligation may be deemed fully performed.
c. The creditor cannot be compelled to accept payment or performance by a third person who has no interest
in the fulfillment of the obligation or unless there is a stipulation to the contrary.
d. In the preceding letter (a), Mr. D could recover as though there had been a delivery of 100 bottles.
74. Where the debtor has various debts of the same kind in favor of the same creditor and on the due date the debtor
does not have sufficient funds to cover all the debts, the debtor may avail of
a. Application of payment.
b. Tender of payment and consignation.
c. Cession in payment.
d. Dation in payment.
75. Mr. Debtor owes Mr. Creditor as follows: P10, 000 due February 5; P10, 000 due March 5 and P10, 000 due April
5, all during the current year. Mr. Debtor has only P10, 000 and cannot pay all his obligations. If Mr. Debtor
decides to pay P10, 000, the amount shall apply:
a. To the debt chosen by Mr. Creditor.
b. To the debt chosen by Mr. Debtor.
c. To the debt due on February 5 being the oldest debt.
d. To the debt due on April 5 if it is an interesting obligation.
76. Mr. Debtor owes fifteen (15) persons substantial amounts of money. His financial situation indicates that his
liabilities for exceed his assets. If Mr. Debtor cedes or assigns his properties to his creditors,
a. The creditors acquire ownership of the properties assigned or ceded.
b. The creditors shall sell the properties assigned and when sold, the debt of Mr. Debtor is deemed paid
regardless of whether or not the net proceeds are equal to or less than the amount of the indebtedness.
c. The creditors shall sell the properties assigned and when sold, the debt of Mr. Debtor shall only be
released to the extent of the net proceeds of the sale.
d. The cession or assignment shall extinguish the obligation whether or not the creditors sell the properties
assigned.
77. Mr. Debtor owes Mr. Creditor P100, 000. On the due date, Mr. Debtor delivers a cashier’s check for the full
amount. Mr. Creditor refuses to accept the check.
a. Mr. Debtor may make a consignation by depositing the amount due at the disposal of judicial authorities
before whom the tender of payment shall be proved in a proper case.
b. The creditor may be considered in mora accipiendi.
c. Debtor may make a consignation by depositing the amount due with any bank and in the name of Mr.
Creditor.
d. Mr. Debtor has no legal basis for making a consignation.
78. As a general rule, consignation must be preceded by a valid tender of payment. Enumerated below however, are
situations which allows a consignation without a prior tender of payment. Which is the exception?
a. When the title to the obligation has been lost.
b. When two or more persons claim the same right to collect.
c. When for any cause, the creditor refuses to give a receipt.
d. When the creditor is absent or unknown, or does not appear at the place of payment.
79. Which among the following fails to state a correct legal principle?
a. The debtor in obligations to do shall be released when the Prestation becomes legally or physically
impossible without the fault of the obligor.
b. Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was due to his
fault, unless there is proof to the contrary.
c. An obligation which consists in the delivery of a determinate thing shall be extinguished in any
event it should be lost or destroyed without the fault of the debtor.
d. Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It may be
made expressly or impliedly.
80. Statement No. 1 - the same act of negligence of the defendant that causes injury to another may give rise to a
liability based on culpa aquiliana and culpa criminal and the injured party may recover twice from the same act or
omission of the defendant.
Statement No. 2 - When the defendant causes damage to the plaintiff through the formers fault or negligence,
there being no contractual relationship between them, the basis of the defendant’s liability is a quasi-contract.
a. Both statements are true.

b. Both statements are false.
c. Only Statement No. 1 is true.
d. Only Statement No. 2 is true.
81. The quasi-contract of negotiorum gestio requires the following. Which is the exception?
a. There must be an abandoned or neglected property or business.
b. Someone voluntary takes charge of that abandoned business or property.
c. The owner must consent to the management of his business or property by someone.
d. The owner has the obligation to reimburse the expenses of the person who takes charge of his business or
property.
82. A, a minor, 16 years of age, together with his brothers B and C, both of legal age are jointly and severally liable in
a contract of loan to pay X the amount of P120,000. Upon maturity of the obligation, A
a. is liable to pay the amount of P30,000
b. is liable to pay the amount of P60,000
c. is liable to pay him the whole amount of P120,000.
d. is liable to pay only the amount which benefits him.
83. Mr. A was appointed by the court as guardian of the minor X. Mr. A sold the vegetables that were planted in the
lot of X. The value of the vegetable is P5,000 but Mr. A sold the vegetables for only P2,000. The contract is
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
84. In order that fraud may make a contract voidable:

a. It may be incidental but should have been employed by both parties.
b. It should be serious and should have not have been employed by both contracting parties.
c. It may be incidental but both parties should not be in pari delicto.
d. It may be serious and the parties must be in pari delicto.
85. Which of the following statements is correct?

a. Negligence signifies the idea of delay in the fulfillment of an obligation.
b. Delay or default means the failure to perform the obligation on the date agreed upon by the parties.
c. Incidental fraud is one committed in the performance of an obligation.
d. Proper diligence of a good father of a family means extra-ordinary diligence.
86. Jose is under obligation to deliver to Pedro, at the option of Jose, a car, a pick-up truck, or a van, all of which are
specific.
No. 1 - If the car and the pick-up truck were lost through Jose’s fault, he has no choice but to deliver the van; If
the van was lost through a fortuitous event before delivery, the obligation is extinguished and Jose is not liable.
No. 2 - If the pick-up truck and the car were lost through a fortuitous event, Jose has no choice but to deliver the
van; if before delivery, the van was lost because of Jose’s fault, he is liable.
a. Both 1 and 2 are true

b. Both 1 and 2 are false
c. Only 1 is true
d. Only 2 is true
87. Which is not an element of Novation?

a. The new obligation is laid down in unequivocal terms.
b. The new and the old obligations must be on every point incompatible with the other
c. If they are compatible, the new obligation novates the first
d. Each of the obligations must have its independent existence
88. In order that a stipulation in favor of a third person in a contract would be valid and binding upon the parties
thereto, three of the requisites are mentioned in the following enumerations. Which among them is not a requisite?
a. That there must be an existing agency between either of the contracting parties and the third
person.
b. The third person communicated his acceptance to the obligor before its revocation.
c. There must be a stipulation in favor of a third person.
d. The contracting parties must have clearly and deliberately conferred a favor upon that third person.
89. The following are the ways by which innominate contracts are regulated, except:
a. By the stipulation of the parties.
b. By the general principles of quasi-contracts and delicts
c. By the rules governing the most analogous nominate contracts.
d. By the customs of the place.
90. Which of the following statements is incorrect legal principle?
a. Creditors are protected in cases of contracts intended to defraud them.
b. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment
provided he communicated his acceptance to the obligor before its revocation.
c. In contracts creating real rights, third persons who come into possession of the object of the
contract are not bound thereby.
d. Contracts take effect only between the parties, their assign and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law.
LAW ON SALES
1. Which of the following is NOT an essential element of a contract of sale?

a. There must be some price for the goods.
b. There must be transfer of possession of goods.
c. There must be transfer of ownership of goods.
d. There must be some goods as subject matter.
2. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the latter about it. In any
event, the deed of sale expressly stipulated that X is not liable for hidden defects. Does Y have the right to
demand from X a reimbursement of what he spent to repair the engine plus damages?
a. No, because Y waived the warranty against hidden defects.
b. Yes, X is liable whether or not he was aware of the hidden defect.
c. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not
disclosing the fact to Y.
d. No, because Y is in estoppel, having changed the engine without prior demand.
3. In case of eviction, the vendor shall be liable to the vendee only for the value of the thing sold
at the time of eviction in which of the following cases?
a. Where there is waiver consciente.
b. Where there is waiver intencionada.
c. When the vendor was in bad faith and there was stipulation exempting the vendor from liability in case of
eviction.
d. When the vendor was in bad faith and there was no stipulation exempting the vendor from liability in case
of eviction.
4. Mr. Seller and Mr. Buyer orally agreed on the following:

 The land to be sold has an area of 10,000 sq. meters;
 Price is P5 million; and
 Mr. Seller shall prepare the deed of sale.
With fraudulent intent, Mr. Seller knowing the inadequacies of Mr. Buyer with respect to numbers, write 1,000
sq. meters instead of 10,000 sq. meters win the deed of sale. The sale is:
a. void.
b. valid but the contract may be reformed.
c. valid but the instrument may be reformed.
d. voidable but the contract may be reformed.
5. Mr. Buyer bought a car from Mr. Seller, a dealer of cars under the following terms:
 Down payment of P500,000;
 Entire balance is to be paid on December 24, 2024;
 A chattel mortgage is to be executed over the car bought or sold in favor of Mr. Seller. If on the due date
for the balance, no payment is paid despite demand.
Based on the foregoing facts, what is the best remedy of Mr. Seller?
a. Mr. Seller may foreclose the mortgage on the car and recover any balance if there be a deficiency in the
foreclosure sale.
b. Mr. Seller can foreclose the mortgage on the car but is precluded from recovering any balance.
c. Mr. Seller cannot foreclose the mortgage. His only remedy is to sue for the balance.
d. Mr. Seller can only cancel or rescind the sale.
6. Mr. Seller offered to sell to Mr. Buyer, a parcel of land for P5 million. Because the latter could not make up his
mind, Mr. Seller gave him thirty (30) days within which to decide.
a. Seller may always withdraw the offer before 30 days.
b. Seller can withdraw the offer prior to acceptance by Mr. Buyer.
c. Seller cannot withdraw before the lapse of 30 days.
d. Answer is not given.
7. Mr. Seller offered to sell a parcel of land Mr. Buyer orally for P5 million. Mr. Buyer accepted orally on
November 5, 2021.
a. The sale is voidable.
b. The sale is valid and can be registered.
c. The sale is valid but unenforceable and cannot be registered.
d. The sale is voidable but may be ratified.
8. Mr. Seller offered a parcel of land to Mr. Buyer No. 1 under a contract to sell. Subsequently, Mr. Seller sold the
same land to Mr. Buyer No. 2 who paid the price. After a couple of days, Mr. Buyer No. 1 paid the price. Which
is correct?
a. The one with a better right is Buyer No. 2
b. Mr. Seller has done a double sale.
c. The one with the better right is the buyer who registers the sale first in good faith.
d. There is no double sale.
9. A contract of sale is deemed an equitable mortgage in any of the following situations, which is the exception?
a. When the buyer retains for himself a part of the purchase price.
b. When the price is unusually inadequate.
c. When the buyer is in possession as lessee.
d. When the buyer binds himself to pay the taxes on the thing sold.
10. Statement No. 1 – A contract of sale is a mode of acquiring ownership.
Statement No. 2 – Every delivery transfer ownership.
a. Both Statements are false.

b. Both Statements are true.
c. Statement No. 1 is true; Statement No. 2 is false.
d. Statement No. 1 is false; Statement No. 2 is true.
11. Mr. X, without the authority of Mr. Y, owner of a car, sold the same car in the name of Mr. Y to Mr. Z. The
contract between Mr. X and Mr. Z is
a. Void because of the absence of consent from the owner, Mr. Y.
b. Valid because all of the essential requisites of a contract are present.
c. Unenforceable because Mr. X had no authority but he sold the car in the name of Mr. Y, the owner.
d. Rescissible because the contract caused lesion to Mr. Z.
12. Mr. X orally offered to sell his two-hectare rice land to Mr. Y for P10 million. The offer was orally accepted. By
agreement, the land was to be delivered (through execution of a notarized deed of sale) and the price was to be
paid exactly one-month from their oral agreement.
a. If Mr. X refuses to deliver the land on the agreed date despite payment by Mr. Y, the latter may not
successfully sue Mr. X because the contract is oral.
b. The contract between the parties is subject to ratification by the parties.
c. If Mr. X refuses to deliver the land, Mr. Y may successfully sue for fulfillment of the obligation even if
he has not tendered payment of the purchase price.
d. The contract between the parties is rescissible.
13. Which of the following reflects a correct legal principle?

a. A contract of sale is not a mode of acquiring ownership.
b. A, B, and C, are co-owners of a three-hectare orchard. If A decides to sell his share to B, C has a right of
redemption.
c. A and B are adjoining owners of a rural land. Each land has an area of half a hectare. If B sells his land to
D who does not own any rural land, C has a right of redemption.
d. If the right to repurchase is not exercised within the period agreed upon, a judicial order is necessary to
consolidate ownership on the buyer.
14. Mr. S sold his land to Mr. B with a right to repurchase within ten years from the date of sale. Despite the lapse of
the period of redemption, no such redemption was made.
a. Ownership of the land was consolidated on Mr. by virtue of the failure to redeem by Mr. S.
b. Ownership of the land will be consolidated only upon the registration of the sale with the registry of
deeds.
c. Ownership of the land will be consolidated only upon a judicial order.
d. Ownership will be consolidated only with the consent of Mr. S.
15. Mr. S sold a banana plantation to Mr. B for P3 million although its market value is P20 million. It was agreed that
Mr. S shall remain in possession as lessee of the land and shall be responsible for the real estate taxes.
a. The contract gives rise to an action for rescission.
b. The contract gives rise to an action for annulment.
c. The contract is a sale.
d. The contract is presumed to be an equitable mortgage.
16. Mr. Ayco offered to sell his land to Mr. Cruz for P300,000. Mr. Cruz accepted the offer and paid Mr. Ayco the
purchase price. Mr. Ayco 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 asks Mr. Cruz for the Deed of Sale. What can Mr.
Cruz do?
a. He cannot compel Mr. Ayco to return the payment because the contract is unenforceable.
b. He may compel Mr. Ayco to execute the Deed of Sale because the contract is valid.
c. He may sue Mr. Ayco to return the purchase price under the legal principle that no one may enrich
himself at the expense of another.
d. He may occupy and use the land as a buyer in good faith.
17. Andrea wrote Bernardo a letter offering to sell a piece of land. Andrea gave Bernardo two months within which to
pay the price of P500,000. After 50 days Andrea informed Bernardo that she is increasing the price of the land to
P700, 000. Can Bernardo compel Andrea to accept the P500,000 first offered and execute the deed of sale?
a. No, because Bernardo did not signify his acceptance of the offer of P500,000
b. Yes, because the period of 2 months has not yet expired.
c. Yes, because Andrea is already estopped by her signed letter.
d. Yes, because there was actual meeting of minds of the parties.
18. Antonio sold a piece of land to Renato binding himself not to sell the same to another person. On the following
day, Antonio sold the land to Carlos who immediately took possession in good faith. In the case at bar, the proper
remedy of Renato is to:
a. Institute an action for the annulment of the sale to Carlos.
b. Institute an action for the recovery of the land.
c. Institute an action for damages against Antonio.
d. Institute an action for a declaration of nullity of the sale to Carlos.
19. When goods are delivered to the buyer “on sale or return”, for a period of seven (7) days, ownership of the goods
passes to the buyer,
a. Upon delivery of the goods.
b. Upon expiration of seven (7) days.
c. Upon acceptance by the buyer of the offer of the seller.
d. Upon perfection of the contract.
20. Mr. A agreed to sell Mr. B, all the 100 bales of long staple Philippine cotton lying in his bodega. Unknown to
both parties, the cotton had already been destroyed in an accidental fire. In this case, the contract of sale is
a. Voidable, at the option of the buyer.
b. Voidable, at the option of the seller.
c. Void, as the contract of sale is for specific goods.
d. Not void, as the contract of sale is for unascertained goods.
21. Where before making the contract of sale, the goods had perished without the knowledge of the seller, the contract
of sale is void if the contract is for the sale of
a. Contingent goods
b. Future goods
c. Specific goods
d. Unascertained goods
22. The specific goods are those goods which are identified
a. at the time of contract of sale.
b. after the formation of contract of sale.
c. during the performance of contract of sale.
d. at the time of enforcement of contract of sale.
23. Where after the agreement to sell for the sale of specific goods, the goods perish without any fault of the buyer or
seller, the contract of sales becomes void if the goods perish
a. after the risk passes to the buyer.
b. before the risk passes to the buyer.
c. without any knowledge of the seller.
d. without any knowledge of the buyer.
24. S sold a parcel of land to B for P100,000 with B paying the said amount immediately. Although S delivered the
transfer certificate of title of the land to B, the parties did not execute any document at all for the sale except the
receipt for the payment which S issued to B. B now wants to register the receipt for the payment which S issued to
B. B now wants to register the sale with the Register of Deeds.
a. The contract between S and B is rescissible; hence B can sue for damages.
b. The contract between S and B is void because it was not in the form required by law.
c. B cannot compel S to execute a Deed of Sale because the contract is unenforceable.
d. B can compel S to execute a Deed of Sale which is duly notarized so that B can register the sale.
25. S and B entered into a sale of a four-hectare land for P1 million. S prepared the Deed of Sale and with fraudulent
intent and taking advantage of B failing eyesight changed the area of the land to reflect an area less than what had
been agreed upon. The remedy of B upon discovery of the fraud is,
a. Annulment
b. Reformation of the contract
c. Rescission
d. Answer not given
26. Which of the following statements is incorrect?

a. The full payment of the price is sufficient to make the buyer the owner of the thing sold.
b. In a sale, the full payment of the price is a suspensive condition for the seller to deliver.
c. Delivery of the thing sold is necessary to transfer ownership.
d. Delivery in a real contract is required not for transfer of ownership but for the perfection of the contract.
27. Two parties had an agreement to buy and sell a thing. Before delivery but after the agreement, the thing was lost
due to fortuitous event making it impossible for the performance of the contract of sale. What do you call this
loss?
a. Antecedent loss
b. Impossible loss
c. Supervening loss
d. Preventive loss
28. In which of the following instances are the goods still in transit which allow the unpaid seller to exercise his right
of stoppage in transitu in case of insolvency of the buyer?
a. If the buyer obtains delivery of the goods before arrival at the appointed destination.
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his
behalf, after arrival of the goods at their appointed destination.
c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent.
d. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of
them, even if the seller has refused to receive them back.
29. What is the prescriptive period of the right to file an action based on breach of warranty of sale of immovable
against non-apparent and unregistered burden or servitude?
a. 40 days from the date of contract of sale or from the discovery of burden.
b. 6 months from the date of contract of sale or from the discovery of burden.
c. 1 year from the date of contract of sale or from the discovery of burden.
d. 3 days from the date of contract of sale or from discovery of burden.
30. What are "unascertained goods"?

a. Unascertained goods are in effect all goods that are not specific.
b. Unascertained goods are goods that need to be specifically ordered
c. Unascertained goods are goods that have not been paid for when the contract is made.
d. Unascertained goods are goods that are not usually stocked by the seller and are therefore unusual.
31. A, B, and C are co-owner of an undivided parcel of land. A sold his 1/3 interest to B absolutely. Which is correct?
a. C may exercise his right of redemption on the interest sold by A to B.
b. C cannot exercise the right of redemption because the sale was made in favor of a co-owner.
c. The sale made by A to B is void because it was not made in favor of a stranger.
d. C may redeem only 1/2 of the interest sold by A to B.
32. A sold a residential house and lot a price of P10,000,000 payable at P4,000,000 down-payment and the balance of
P6,000,000 payable in 50 years at P10,000 per month to B. After total payments of P4,360,000, B defaulted on
the next installment. After following the necessary procedures required by law, the contract of sale is properly
cancelled. How much cash surrender value is B entitled from A?
a. P2,000,000
b. P2,240,000
c. P180,000
d. P2,180,000
Computation
360,000 x 50% = 180,000
360,000/10,000 = 36/12 = 3 years = 50%
4,360,000 x 50% = 2,180,000
33. Which of the following are not required in a contract of sale?

I. Identifiable goods and price
II. Transfer of ownership of goods
III. Delivery of possession
IV. Third party insurers in case of loss
a. I and II
b. III and IV
c. II and III
d. I and IV
34. LeBron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot of LeBron
and through connivance with a notary public, he was able to execute a notarized deed of sale through forging the
signature of LeBron. With connivance with a Registry of Deeds, Kevin was able to transfer the title of the lot to
his name. Afterwards, Kevin sold the said lot to Carmelo who acquired the said lot after inspecting the title and
the vacant lot. Carmelo is a purchaser in good faith and for value. Which of the following statements is correct?
a. The contract of sale between Kevin and Carmelo is void because it is the product of a previous void
contract.
b. LeBron can recover the land from Carmelo because the title acquired by Carmelo is that of a thief even
without reimbursing Carmelo.
c. LeBron can recover the land from Carmelo provided he will reimburse him for the price Carmelo paid.
d. LeBron cannot recover the land from Carmelo because a forged document or deed of sale, in case
of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser for
value and in good faith.
35. Alonzo offered to sell to Bernardo a parcel of land at a specified price. Alonzo gave Bernardo (60) days within
which to accept the offer. Bernardo agreed to the period.
a. Before the lapse of sixty days, Alonzo may withdraw the offer or increase the price.
b. Before the lapse of sixty days no withdrawal can be made but the price may be increased.
c. No withdrawal can be made before sixty days because the period is binding.
d. No withdrawal can be made because there is already a perfected option contract.
36. What is the legal concept of possession?

a. The holding of a thing or the enjoyment of a right
b. It is material occupation or by the fact that the right or property is subjected to the will of the claimant
c. The gathering of the products and the act of planting on the land
d. All of the above
37. Nik sold to Paul a real property payable in monthly installments within a 5-year period, Paul was only able to pay
14 monthly installments, after the 60-day grace period and after 30 days of Paul’s receipt of the notice and letter
calling for the rescission of the contract Nik rescinded the same. Paul contended that there was an automatic
rescission done by Nik, hence, the same was void. Give the best answer.
a. The rescission done by Nik was in faithful compliance with the Maceda Law, as the grace period and the
sending of notices was complied before rescission.
b. The rescission done by Nik was void as it fell short on compliance with the law, as the notices sent
by the latter would not suffice the requirement of a notarial act.
c. Paul has a right to demand payment for damages caused by the automatic rescission done by Nik, the
same being void under RA 6552
d. Answer not given
38. Ben offered to sell his house and lot for P1,500,000 to Ten who was interested in buying the same in anticipation
of his coming marriage. In his letter to Ten, Ben stated that he was giving him a period of one month within
which to raise the amount and that as soon as Ten was ready, they will sign the deed of sale. One week before the
expiration of the period, Ben went to Ten to inform him that he is no longer willing sell the property unless the
price is increased to P1,800,000. May Ten compel Ben to accept the P1,500,000 first offered and executed the
sale?
a. Yes, because there is actual meeting of minds of the parties.
b. Yes, because Ben is already stopped by his signed letter.
c. No, for Ten never signified his acceptance of Ben’s offer.
d. Answer not given.
39. S sold to B a thing without knowledge that the thing suffered from a hidden defect. The parties agreed on the
waiver of the warranty by the buyer. Is the seller still liable for breach of warranty?
a. No, but he must return the price to the buyer without damages.
b. No, because the valid waiver of warranty.
c. Yes, if the seller was in bad faith at the time the waiver was made.
d. Yes, because the waiver refers only to liability for damages.
40. An agricultural land is owned by A and D pro-indiviso. D sells his ½ part to R, who is the owner of the adjoining
land. When A learned of the sale, he tried to redeem the portion sold by D by reimbursing R with the purchase
price and expenses. Which is not correct?
a. A can compel R to permit redemption
b. A co-owner of a thing may exercise the right of redemption in case the shares of the other co-owners or
any one of them are sold to a third person
c. The sale to R is valid but A can elect to exercise his right of redemption
d. The sale to R is valid and as adjoining land owner he is the one entitled to redemption
41. A bought a residential house and lot from B Reality for P2 million giving a down payment of P200,000 and
promising to pay the balance of P1.8M in 15 years in monthly installments of P10,000. After paying 72
installments A defaulted in the payment of subsequent installments. Despite the grace period given, he was not
able to make any further payments. Accordingly, B Reality cancelled the sale. How much cash surrender value is
A entitled to receive?
a. P426,000
b. P396,000
c. P552,000
d. P506,000
Computation
Maceda Law applies to sale of residential real property in installment. The said law provides that if the buyer
has paid 2-5 years of installments and the contract is canceled, the buyer shall have the right to that cash
surrender value of the payments on the property equivalent to fifty percent of the total payments made, and
after five years of installments, an additional five percent every year but not to exceed ninety percent of the
total payments made. In this problem, the buyer has already paid 72 months of installments equivalent to 6
years. Therefore, the buyer is entitled to 55% cash surrender value.
Down payment P200,000

Add: Installments paid 720,000
Total payments made P920,000
Multiply by cash surrender value percentage ___55%
Cash surrender value P506,000
42. The redhibitory action based on the faults or defects of animals must be brought within
a. 6 months from delivery to the vendee
b. 45 days from delivery to the vendee
c. 40 days from delivery to the vendee
d. 30 days from delivery to the vendee
43. S sold a residential condominium unit to B at an instalment price of P6,000,000 payable in 50 years at a monthly
rental of P10,000 per month. After payment of several instalments totalling P1,200,000, B defaulted in the
payment of remaining instalments which resulted to the cancelation of the contract of sale after the lapsing of the
grace period. What is the amount of cash surrender value to be received by B from S as a result of cancellation?
a. P600,000
b. P900,000
c. P840,000
d. P960,000
Computation
Under Maceda Law, 10 years instalment will entitle the buyer to 75% of total amount paid (P1,200,000 x
75% = P900,000) in case of cancellation
44. S sold his lot with an area of 100 square meters to B at a selling price of P1,000 per square meter. After delivery
of the lot, B discovered that the actual area is only 91 square meters. What is the legal remedy available to B?
a. B may ask for proportionate reduction of price and must pay P91,000 only.
b. B can ask for cancellation of the contract of sale.
c. Either A or B
d. Neither A nor B
Computation: (91 square meters x P1,000 = P91,000) Note: Cancellation is allowed only if the lacking area
is at least 10% of stated area.
45. A, B, and C are co-owners of a rural lot with an area of 1,000 square meters in the ratio of 6:1:3, respectively. The
co-owned lot is bounded by farm lots of D and E with an area of 50 square meters and 75 square meters,
respectively. A sold his share of the co-owned lot to F. Who shall have the preferred right to repurchase the lot
sold by A to F?
a. B because his share in the co-owned lot is smaller.
b. B and C with an area of 150 square meters and 450 square meters, respectively
c. D because his adjoining rural lot has smaller area.
d. E because his adjoining rural lot has larger area.
Computation: 1,000 x 6/10 = 600 SQM x ¼ = 150SQM to B and 600 SQM x ¾ = 450SQM
46. A and B are legally married and their property regime is governed by absolute community of property. A orally
sold his specific cellphone to B at a price of P500 with a carrying amount of P800 after B pointed a gun to A.
Delivery of the specific cellphone will happen after three years. What is the status of the contract of sale?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
47. B rented the specific truck of S. After the end of the contract, S sold the property to B. As a result of sale, B
continues to have possession of the property. What type of constructive delivery is present?
a. Traditio clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio constitutum possessorium
48. A orally offered to sell his rice land to B for P8,000,000. B orally accepted the offer. The land is to be delivered
through the execution of a notarized Deed of Sale and the price is to be paid directly two weeks from their oral
agreement. Which of the following is most accurate?
a. If A refuses to deliver the land on the agreed date despite payment made by B, the latter may not
successfully sue A because the contract is unenforceable
b. If A refused to deliver the land, B may successfully sue A for the fulfillment of the obligation before the
payment of the purchase price
c. The contract between A and B is rescissible
d. The contract between A and B is subject to ratification by the parties.
49. If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost,
which of the following most accurately completes the statement?
a. The buyer bears the risk of loss
b. The seller bears the risk of loss
c. The contract shall be without any effect
d. The buyer may withdraw from the contract
50. Article 1484 of the Civil Code (Recto Law), which prohibits the vendor from recovering any deficiency in the
foreclosure sale, applies where:
a. The object of the chattel mortgage is not the thing sold.
b. The personal property is sold on a straight-term.
c. Both A and B
d. Neither A nor B
51. Which of the following statements relative to the sale of personal property by installment under Article 1484 of
the Civil Code (Recto Law) is false?
a. The remedy of exacting fulfillment of the obligation can be availed only where one (1) installment is
not paid.
b. Cancellation of the sale can only be made after default of at least two (2) installments.
c. An agreement for recovery of any unpaid balance of the purchase price after electing to foreclose the
chattel mortgage on the thing sold is null and void.
d. The three (3) remedies under Article 1484 of the Civil Code are alternative and cannot be exercised
simultaneously or successively.
52. B purchased a motor vehicle from S for P1,200,000, payable by a downpayment of P600,000 and the balance in
12 equal monthly installments of P50,000 each. A chattel mortgage on the vehicle was executed to serve as
security. B defaulted on the 7th and 8th monthly installments. The chattel mortgage was foreclosed but the auction
sale resulted into a deficiency of P100,000. Under the Chattel Mortgage Law, in relation to Recto Law, what is
the remedy of S to recover the deficiency?
a. Auction the other properties of B for P100,000.
b. Cancel the installment sale.
c. File a collection suit for P100,000 against B.
d. No other remedy on the deficiency.
53. Assume the same facts in the preceding number (52), except that in addition to the chattel mortgage on the motor
vehicle, a real estate mortgage was executed as additional security by G (guarantor) on his land. What is the
remedy of S to recover the deficiency?
a. Foreclose the real estate mortgage on the land.
b. Cancel the installment sale.
d. No other remedy on the deficiency.
54. D borrowed P200,000 from C payable in 10 monthly installments of P20,000 each. The credit was secured by a
chattel mortgage on D’s truck. D defaulted on the 1 st and 2nd installments. The chattel mortgage was foreclosed
and the truck was sold for P150,000. Which of these statements is correct?
a. C cannot recover the P50,000 deficiency from D because it is prohibited under the Recto Law.
b. C cannot recover the P50,000 from D because there is no recovery of deficiency in mortgage contracts.
c. C can recover the P50,000 deficiency from D because the Recto Law is not applicable to loans
secured by a chattel mortgage.
d. None of the foregoing.
55. Realty Installment Buyer Protection Act, also known as the Maceda Law, covers the installment sale of financing
of:
a. Condominium dwelling units
b. Commercial buildings
c. Industrial lots
d. Agricultural lands to tenants under the Agrarian Reform Program
56. Where the installment buyer was able to pay less than two years of installment, the Maceda Law grants him a
grace period, without any additional interest, of:
a. Thirty (30) days
b. Sixty (60) days
c. One (1) month
d. Two (2) months
57. Where the installment buyer was able to pay two years or more of installment, the Maceda Law grants him a
grace period, without any additional interest, of:
a. Thirty (30) days for every year of installments paid
b. Sixty (60) days for every year of installments paid
c. One (1) month for every year of installments paid
d. Two (2) months for every year of installments paid
58. B bought the residential lot of S for P1,000,000 on installment under the following terms: P200,000 downpayment
on January 3, 2015; P100,000 every year thereafter until fully paid. Assume that B defaulted on the very first
installment due on January 3, 2016. Under the Maceda Law, the grace period and cash surrender value of B shall
be:
a. 60 days and 0, respectively
b. 60 days and P100,000, respectively
c. 30 days and P100,000, respectively
d. No grace period and no cash surrender value.
59. Assume the same facts on the preceding number (58), except that B defaulted on the installment due on January 3,
2022. Under the Maceda Law, the grace period of B shall be:
a. 6 months
b. 7 months
c. 8 months
d. 9 months
60. Assume the same facts on numbers 58 and 59, Under the Maceda Law, the cash surrender value to be refunded to
B, in the event the sale is cancelled, shall be:
a. P540,000
b. P440,000
c. P620,000
d. P530,000
In the problem, the buyer has paid a total of P600,000 for six years. Therefore, P600,000 + 200,000
downpayment = P800,000 x 55% (5% for 1 year in excess of 5 years) = P440,000
LAW ON CREDIT TRANSACTIONS
1. A pledged his ring to B for P20,000. A failed to pay his obligation. B sold it at a public auction for P18,000. Can
B recover the deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation
2. A pledged his ring to B for P20,000. A failed to pay his obligation. B sold it at a public auction for P22,000. Can
A recover the excess?
b. Yes, if there is stipulation
d. No, if there is stipulation
3. C mortgaged his car to B for P200,000. C failed to pay his obligation. B sold it at a public auction for P180,000.
Can B recover the deficiency?
b. Yes, only if there is stipulation
4. C mortgaged his car to B for P200,000. C failed to pay his obligation. B sold it at a public auction for P220,000,
Can C recover the excess?
b. Yes, only if there is stipulation
5. The sale of the thing pledged
a. Absolutely extinguishes the obligation
b. Extinguishes only the pledge
c. Extinguishes the debt only to the extent of the proceeds
d. Deprives the pledgee to get the excess
6. D borrowed P100,000 from C. The obligation is secured by a mortgage on D’s land and building. C registered the
mortgage with the Register of Deeds. Thereafter, D sold the land and building to B who was not aware of the
existence of the mortgage at the time of sale since only the photocopy of the transfer certificate of title which did
not yet contain the annotation of the mortgage was shown to him. It was only when he went to the Register of
Deeds to register the sale of the land and building to him that he learned of the mortgage. Which is correct?
a. C can collect from D and if D cannot pay, C can foreclose the mortgage
b. C can collect from D, but f D cannot pay, C cannot foreclose the mortgage
c. C cannot collect from D. He can only go after the mortgage which was given as security
d. C cannot foreclose the mortgage because B is a buyer in good faith
7. Which of the following is a feature common to chattel mortgage and pledge?

a. Deficiency is recoverable in case of sale of the thing pledged/mortgaged
b. The object of the contract is a movable property
c. The excess of the proceeds of sale over the amount of the obligation belongs to the pledgor/mortgagor
d. An affidavit of good faith is required to bind third persons
8. Essential elements of pledge include all of the following, except:

a. Pledgor is the absolute owner of the thing pledged.
b. The person constituting the pledge has the free disposal of his property or if he is an agent or
representative, that he is legally authorized
c. The thing pledged must be placed in the possession of the creditor or of a 3 rd person by common
agreement
d. To bind third persons there must be an affidavit of good faith
9. Essential elements of chattel mortgage include all of the following, except:

a. The object is a personal or movable property
b. The thing mortgaged is not delivered to the creditor
c. The mortgagor cannot sell without the consent of the mortgagee
d. Description of the thing mortgaged must appear in a public instrument
10. Essential elements of real estate mortgage include all of the following, except
a. In case of foreclosure sale, the mortgagor is entitled to the excess
b. The mortgagor can sell even without the consent of the mortgagee
c. The thing mortgaged must be delivered to the creditor
d. To bind third persons, it must be recorded in the Registry of Property
11. Which of the following statements is not correct?

a. If the thing pledged is returned by the pledgee to the pledgor, the obligation is extinguished
b. In sale at public auction, the pledgor may bid and his bid is valid even if he is the only bidder
c. Any stipulation authorizing the pledgee to appropriate the thing pledged is void and without effect
d. Shares of stock can be the object of pledge or mortgage
12. In the sale of thing pledged, where the proceeds of the sale are less than the amount due, when can the pledgee
recover the deficiency?
a. In the case of pawnshops.
b. In case of pledge by operation of law.
c. If there is a stipulation allowing such recovery.
d. The pledgee can never recover the deficiency.
13. A pledge agreement allowed the pledgee to transfer the pledge shares in pledge’s name in the corporate books if
the pledger fails to remedy a payment default within thirty (30) days from receipt of a written demand from the
pledgee. Is the stipulation valid?
a. No, because it constitutes pactum commissorium.
b. No, because it dispenses with the payment of taxes due on to the transfer.
c. Yes, because the transfer is only as act of administration.
d. Yes, because the transfer is not automatic, i.e., only after pledger fails to pay during the
period.
14. B purchased a motor vehicle from S for P1,200,000, payable by a downpayment of P600,000 and the balance in
12 monthly installments of P50,000 each. A chattel mortgage on the vehicle was executed to serve as security. B
defaulted on the 7th and 8th monthly installments. The chattel mortgage was foreclosed but the auction sale
resulted into a deficiency of P100,000. Under R.A. 1508, as amended, otherwise known as the Chattel Mortgage
Law, in relation to Article 1484 of the Civil Code, more popularly known as the Recto Law, what is the remedy of
S to recover the deficiency?
a. Cancel the installment sale.
b. No other remedy on the deficiency.
d. Auction the other properties of B for P100,000.
15. Who shall be entitled to the excess of the proceeds from the sale at public auction of the thing conventionally
pledged after application to the secured loan?
a. Always pledgee
b. Always pledgor
c. Generally, pledgee unless granted to the pledgor
d. Generally, pledgor unless granted to the pledgee
16. Which of the following statements relative to the R.A. No. 1508, as amended, otherwise known as the Chattel
Mortgage Law, is false?
a. Aside from the Chattel Mortgage Registry of the Registrar of Deeds where the property is located,
registration shall also be made where the mortgagor resides if he resides in a place other than where the
property is located.
b. Where the parties executed a chattel mortgage on a building, they shall be bound to the chattel mortgage
contract.
c. Failure to execute the Affidavit of God Faith and to register the chattel mortgage contract
shall invalidate the mortgage.
d. Registration of the chattel mortgage is made in the Chattel Mortgage Registry of the
Register of Deeds where the property is located.
17. D borrowed P3,000 from C. In order to secure the fulfillment of the contract of loan. D pledged and delivered his
specific laptop to C as collateral for his obligation. At the maturity date of the loan, D defaulted in the payment of
the obligation. At the maturity date of the loan, D and C voluntarily agreed that the said laptop shall be used in
full settlement of the secured loan. Which is correct?
a. The said agreement is pactum commissorium and therefore null and void.
b. Ownership of the laptop was acquired by C and the contract of loan is fully extinguished by dacion
en pago.
c. Ownership of the laptop was acquired by C by reason of pactum commissorium.
d. The contract of loan is extinguished only if the value of the laptop is equal to the amount of the loan.
18. Ben pledged his watch to V. Y. Domingo for P5,000. On the due date Ben failed to pay his loan and redeem the
watch. The pawnshop sold the watch at public auction to the highest bidder at P4,000.
a. The pawnshop can recover the deficiency of P1, 000 from Ben.
b. The pawnshop cannot recover the P1, 000 unless there is a stipulation.
c. The pawnshop can recover the P1, 000 even without a stipulation.
d. The pawnshop cannot recover the P1, 000 even if there is a stipulation.
19. Mr. X executed a chattel mortgage over his house and lot to Mr. Y. When the obligation became due, Mr. X did
not pay despite demand.
a. Mr. Y has no right to foreclose the mortgage because the house and lot are not chattels.
b. Mr. Y has no right to foreclose the mortgage unless Mr. X consents to the foreclosure.
c. Mr. Y has no right to foreclose the mortgage because he can sue for collection.
d. Mr. Y may foreclose the mortgage because Mr. X is estopped from claiming the invalidity of the
chattel mortgage over the real property, but foreclosure should be made under the procedure of a
real estate mortgage.
20. May a mortgagor’s liability on labor claims be transferred to the mortgagee-creditor?

a. Yes, after the mortgagee-creditor had foreclosed the assets of the mortgagor-debtor, the labor liability
claims are deemed transferred to the latter.
b. No, the responsibility for the liabilities by the mortgagor towards his employees cannot be transferred via
an auction sale to a purchaser who is also the mortgagee-creditor of the foreclosed assets.
c. No, the mortgage constitutes a lien on the determinative properties of the employer-debtor, because it is
specially preferred credit to which worker’s monetary claims is deemed subordinate
d. “B’ and “C” only
21. Debtor owes Creditor P500,000. The debt is secured by a chattel mortgage on Debtor’s car. On the due date of
the obligation, Creditor is paid by Third Person who has no interest in the obligation either as guarantor or surety.
There is likewise no stipulation as to Third Person’s right to pay.
a. If Third Person pays without the knowledge or against the will of Debtor, Third Person may recover
P500, 000 from Debtor even if the debt had been condoned to the extent of ½.
b. If Third Person pays with the Debtor’s knowledge and consent, Third Person may recover P500,
000 from Debtor even if the debt had been condoned to the extent of ½. If Debtor fails to pay,
Third Person may foreclose the mortgage on Debtor’s car.
c. Same as letter “b” except that Third Person may not foreclose the mortgage on Debtor’s car, unless
Creditor consents.
d. Same as letter “b” except that Third Person may not foreclose the mortgage on Debtor’s car because the
mortgage was exclusively constituted in Creditor’s favor.
22. Which of the following is not a form of an equitable mortgage?

a. The consideration has been proven to be unusually inadequate
b. The supposed vendor has remained in the possession of the property even after the execution of the
instrument
c. The alleged seller has continued to pay the estate taxes on the property
d. The alleged seller has planted crops and other agricultural products on the property under an
agricultural leasing contract between them
23. 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?
a. Yes, in the absence of contrary stipulation.
b. Yes, if so agreed upon by the parties.
c. No, unless stipulated.
d. No, because it would be unjust enrichment on the part of creditor.
24. 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. Suppose it was a pledge, would the debtor/pledgor be liable for the
deficiency?
a. Yes, even in the absence of stipulation.
b. Yes, if so agreed upon.
c. No, notwithstanding stipulation to the contrary.
d. No, unless otherwise stipulated.
25. A sells to B a Sony colored TV for P12,000 payable in twelve equal monthly installment beginning May 5, 2021
and every 5th day of each month thereafter. The contract provides that upon failure to pay any installment due, the
whole balance becomes due and demandable. To secure the obligation, a chattel mortgage over the TV set was
executed. When B defaulted on the seventh and eighth installments, a sued B for the payment of the whole
balance of P6,000. The TV set was levied and subsequently sold at a public sale for P5,000. Can A still recover
the deficiency to that effect?
a. Yes, if there was stipulation to that effect
b. Yes, even though there was no stipulation
c. No, any stipulation allowing recovery is void
d. No, if there was no stipulation to that effect
26. Asiong borrowed P1 million from a bank, secured by a mortgage on his land. Without his consent, his friend
Boyong paid the whole loan. Since Asiong benefited from the payment, can Boyong compel the bank to subrogate
him in its right as mortgagee of Asiong's land?
a. Yes, since it is but right that Boyong be able to get back his money and, if not, to foreclose the mortgage
in the manner of the bank.
b. Yes, since a change of creditor took place by novation with the bank’s consent.
c. No, since Boyong paid for Asiong’s loan without his approval.
d. No, but the bank can foreclose and pay Boyong back.
27. The right of a mortgagor in a judicial foreclosure to redeem the mortgaged property after his default in the
performance of the conditions of the mortgage but before the sale of the mortgaged property or confirmation of
the sale by the court, is known as
a. accion publiciana.
b. equity of redemption.
c. pacto de retro.
d. right of redemption.
28. A borrowed P100,000 from B and mortgaged his house to secure the payment of the loan. The contract of real
estate mortgage is not notarized and not registered with Registry of Deeds. The contract of real estate mortgage
provides that A is prohibited from selling the mortgaged house and in case of default of A at the maturity date of
the loan, B will become the automatic owner of the mortgaged house. Which of the following statements is
correct?
a. A may still sell the house to third person despite the prohibition in the contract of real estate
mortgage.
b. B becomes the owner of the mortgaged house upon default of A.
c. The contract of real estate mortgage is null and void because of the stipulation of pactum commissorium
which is contrary to law and public policy.
d. The contract of real estate mortgage is unenforceable because it is not in public document and not
registered with Registry of Deeds
29. P borrowed P1,000 from C. P pledged and delivered his specific cellphone to C as collateral for the loan. The
contract of pledge provides that C may recover the deficiency as a result of foreclosure sale. P failed to pay his
obligation at the maturity date which prompted C to sell the pledged cellphone at public auction. The cellphone
was sold at a price of P900. Which of the following statements is correct?
a. The contract of pledge is extinguished but the contract of loan is extinguished up to P900 only.
b. Pledgee P may still recover the deficiency of P100 because there is stipulation to that effect.
c. The contract of pledge is not extinguished.
d. Both the contract of pledge and contract of loan are extinguished by the public sale.
30. D borrowed P100,000 from C and entered into a chattel mortgage involving his land to secure the payment of his
loan. D failed to pay the loan at maturity date. Which of the following statements is correct?
a. The contract of chattel mortgage is null and void in so far as the contracting parties are concerned because
the subject matter is a land.
b. C cannot foreclose the chattel mortgage over the land because the subject matter must be a movable
property.
c. C may still foreclose the chattel mortgage on the land on the basis of doctrine of estoppel.
d. Third person directly affected by the contract of chattel mortgage is not allowed to file an action for
declaration of nullity because of relativity of contract.
31. Consider the following statements:

I. Chattel mortgage is a consensual contract and the creditor gets possession of the thing mortgaged.
II. Pledge is a consensual contract and gives a personal right.
III. Real estate mortgage is a real contract and creates a real right if registered with the Registry of Property.
IV. Antichresis is an accessory and gives a real right.
Based on the foregoing statements:

a. Only one statement is true.
b. Two statements are true
c. Three statements are true
d. All statements are false
32. Consider the following cases:

I. D owes C P10,000. To secure the debt, D pledged his cell phone. D defaults. The cell phone is sold for
P9,000 at the public auction.
II. D bought a car for P360,000 from C. The price, which is payable in 12 equal monthly installments of
P30,000, is secured by a chattel mortgage on the car. After paying 2 installments, D defaults in the
payment of 3 installments. C foreclose the chattel mortgage and the car is sold at the public auction for
P280,000.
Based on the foregoing cases, the deficiency is recoverable in:

a. I only
b. II only
c. Both I and II
d. Neither I nor II
33. In case of legal pledge, if the thing held in pledged by operation of law is sold by the creditor in public auction
resulting to deficiency, may there be recovery of deficiency by the creditor?
a. Yes, but it must be stipulated by the contracting parties
b. Yes, even if not stipulated
c. No even if stipulated because any stipulation for recovery of deficiency in of pledge is void.
d. No because it is pledged by operation of law.
34. The following statements are presented to you for evaluation:
I. A stipulation which provides that the contract of pledge is not extinguished by the return of the thing
pledged.
II. A stipulation allowing the appropriation by the pledge of the thing pledged in case the same is not sold in
the first and second auctions.
III. A stipulation for the recovery of deficiency in case the proceeds from the sale of the thing pledged is less
than the amount of the obligation.
Based on the foregoing stipulations in a contract of pledge, which stipulations are considered as null and void?
a. I and III
b. II and III
c. I and II
d. I, II and III
35. D borrowed P10,000.00 from C the debt being payable in 6 months. To secure the debt, D promised to pledge his
ring within 2 weeks. Two weeks had already lapsed but D had not yet constituted the pledge.
a. C may demand the constitution of the pledge.
b. C may not demand immediate payment of the debt.
c. Both A and B
d. Neither A nor B
36. A borrows P6M from B. A executes a deed of assignment by way of security over the shares of stock in favor of
B in order to secure payment of the loan. It is stipulated that upon payment of the loan by A, B will re-convey the
shares of stock to A. On due date, if A fails to pay:
a. The shares will remain with B as the owner because this is a sale with a right of repurchase.
b. B must foreclose upon the shares to avoid pactum commissorium because this is a pledge.
c. Either A or B
d. Neither A nor B
37. A mortgaged his land worth P5M in favor of B to secure a debt of P6M. A sold the land to C. Which of the
following is/are correct?
a. On due date, B should demand payment of the P6M from A, and if A fails to pay, B may foreclose the
mortgage.
b. B may choose to collect P5M from C, and if C pays B, C can go after A for reimbursement.
c. Both A and B
d. Neither A nor B
38. A has two creditors, B and C. B is a mortgage creditor for P20,000, and C is an ordinary creditor for P10,000. C
paid A’s debt of P20,000 to B. Which of the following statements is correct?
a. If C’s payment is with A’s knowledge, C will be subrogated in the rights of B.
b. If C’s payment is without A’s knowledge, C will not be subrogated in the rights of B
c. If C’s payment is without A’s knowledge, C will be subrogated in the rights of B plus penalty and
damages
39. Which of the following statements presents the correct legal principle?
a. The mortgagor in a real estate mortgage may sell the property mortgaged despite a prohibition to
that effect.
b. If there is a balance after the foreclosure sale in a chattel mortgage arising from the deficiency cannot be
recovered.
c. Both A and B
d. Neither A nor B
40. Which of the following statements relative to Real Estate Mortgage Law, on real estate is true?
a. The 1-year redemption period is interrupted by the filing of an action questioning the validity of the
foreclosure sale.
b. The mortgagee can recover any deficiency in the foreclosure sale but any excess or surplus shall be
given to the mortgagor
c. A writ of possession shall be issued in favor of the purchaser in an extra-judicial foreclosure sale even if
there is a registered lease contract between the mortgagor-lessor and the lessee.
d. The purchaser at the extra-judicial foreclosure sale who took possession of the property without the
benefit of a writ of possession cannot be ejected by the mortgagor.
LAW ON PARTNERSHIPS
1. Who/which of the following may be a partner in a partnership?

a. Natural person
b. Partnership
c. Corporation
d. All of the foregoing
2. In which of the following cases of receipts is there prima facie evidence that one is a partner in a business?
a. His receipt of a share in the gross returns derived from a property where he has a joint or common interest
with another.
b. His receipt of a share of the profits realized from the use of a property that he co-owns with another.
c. His receipt of a share of the net profits of a business.
d. His receipt of share of the profits realized from the use of a property that he co-possesses with another.
3. Three years ago, Benjamin and Bienvenido, brothers, inherited a five-floor commercial building and the lot on
which it was constructed, from Facundo, their father, who died without a will. For the past three years, the
brothers have divided between the two of them the profit on the rental of the property. Are Benjamin and
Bienvenido partners?
a. Yes, because of their receipt of the profit from the use of the property.
b. No, they are merely co-owners of the whole property.
c. No, each one is a sole proprietor of one-half of the whole property.
d. No, they are considered as stockholders of the whole property.
4. Sanchez and Suarez are both real estate brokers. The two have not entered into any partnership agreement, but to
save on costs, they share at the Avenue Twin Towers the same office space on the front door of which is the
signage “Sanchez and Suarez, Real Estate Brokers.” They also use the same stationery showing the name
appearing on the signage and one telephone number, and share the services of the same secretary. Sanchez, using
the stationery, ordered a laptop computer worth P100,000.00 from Cyber Computers owned by Camarino, who
himself delivered the computer to the office. Camarino also issued a receipt acknowledging the down payment of
P40,000.00 from “Sanchez and Suarez” without any objection from Suarez. Sanchez, later failed to pay the
balance of P60,000.00. Camarino now seeks to recover the amount of P60,000.00 from both Sanchez and Suarez
as partners.
a. Only Sanchez may be held liable by. Camarino since the purchase of the laptop computer is the personal
transaction of Sanchez.
b. Only Sanchez may be held liable by Camarino since Sanchez and Suarez did not enter into any
partnership agreement.
c. Both Sanchez and Suarez can be held liable by Camarino since the two are considered as partners
in so far as Camarino is concerned.
d. Only “Sanchez and Suarez, Real Estate. Brokers”, as a juridical entity is liable to Camarino since an
actual partnership exists.
5. Belinda purchased Gut-N-Curl, a beauty salon owned by Sophia, for P100,000.00. To finance the acquisition of the
business, Belinda obtained from Cristina a loan of P60,000.00 (at 6% interest per annum) which the parties agreed
would be paid by Belinda in an amount equivalent to 20% of the monthly net profits of the salon until the loan
and the interest thereon are fully paid. Belinda then gave the P60,000.00 to Sophia as down payment, promising
to pay the balance of P40,000.00 at an amount equivalent to 10% of the monthly net profits until it is fully paid.
a. Cristina is a partner of Belinda until Belinda has paid in full her loan obligation of P60,000.00 and the
interest thereon to Cristina.
b. Sophia is a partner of Belinda until Belinda has paid in full her balance of P40,000.00 on the purchase
price of the beauty salon.
c. Both Cristina and Sophia who receive a share of the net profits are the partners of Belinda until the latter
has fully paid her obligations to them.
d. No partnership exists between Belinda, Cristina and Sophia whether before or after the payment of
Belinda's obligations to Cristina and Sophia.
6. Buds & Blossoms is a partnership engaged in the flower shop business which is operated by friends Raye and
Patricia. The flower shop is located on a lot which Raye and Patricia leased from Oprah at 10% of the yearly
gross revenues of the business. Amalia was hired as accountant at a monthly salary of P10,000.00 plus 5% of the
yearly net profits as bonus. Who are the partners in the business?
a. Raye and Patricia only.
b. Raye, Patricia and Oprah.
c. Raye, Patricia and Amalia.
d. Raye, Patricia, Oprah and Amalia, since all of them receive a share in the net profits.
7. Olivia is the owner of a commercial space. She leased the premises to Teresa, a dealer of motorcycles and bicycles
using Trikes and Bikes as trade name. Their contract provides that Teresa shall pay Olivia 10% of the net profits
as rent. Teresa has a loan obligation to Carmela amounting to P500,000.00 which Teresa used in expanding the
business. The loan was not paid on due date, so Carmela now seeks to recover the amount.
a. Carmela can go after the assets of Trikes and Bikes. If such assets are not enough, Carmela can go after
the separate assets not only of Teresa, but also those of Olivia who is considered as Teresa's partner by
reason of Olivia's receiving a share of the profits.
b. Carmela can go after Teresa alone since the latter is a mere sole proprietor.
c. Carmela can go after Trikes and Bikes which is considered a partnership and the only one liable.
d. Carmela can go after Teresa and Olivia as partners who will be liable jointly, but not against Trikes and
Bikes.
8. Where an immovable property or real rights are contributed to a partnership, the partnership contract must be in a
public instrument to which shall be attached an inventory of the immovable property contributed and signed by
the parties. Failure to comply with the said requirements:
a. makes the partnership void.
b. makes the partnership unenforceable.
c. makes the partnership voidable.
d. does not affect the acquisition by the partnership of a juridical personality.
9. If the capital of the partnership is P3,000.00 or more, in money or property, the partnership must be in a public
instrument which must be recorded in the office of the Securities and Exchange Commission. Failure to comply
with such requirements:
a. makes the partnership void.
b. makes the partnership voidable.
c. makes the partnership rescissible.
d. does not affect the acquisition by the partnership of a juridical personality.
10. Which of the following partnership agreement is required to be in a public instrument and an inventory of the
property contributed must be made, signed by the parties and attached to the public instrument?
a. A general partnership where the capital amounts to P80,000.00 consisting of P30,000.00 cash and
P50,000.00 worth of computers.
b. A general partnership where the capital amounts to P150,000.00 consisting of cash of P100,000.00
cash and a vacant lot worth P50,000.00.
c. A general partnership where the capital amounts to P1,000,000.00 in cash.
d. A limited partnership where the capital amounts to P500,000.00 in cash.
11. A and B formed a universal partnership of all present property. The partners agreed that property acquired by each
partner after the formation of the partnership shall belong to the partnership. Which of the following does not
belong to the partnership?
a. Agricultural lot inherited by A before the formation of the partnership.
b. Crops harvested from the agricultural lot during the first year of the partnership.
c. Fishpond donated to B during the first year of the partnership.
d. Fish harvested from the fishpond during the first year of the partnership.
12. X and Y formed a universal partnership of profits. Which of the following properties belongs to the partnership?
a. Coconut plantation inherited by X before the formation of the partnership.
b. Salary received by Y as professor of a college in Manila during the first year of the partnership.
c. Lotto prize won by X during the first year of the partnership.
d. Agricultural lot donated to Y during the first year of the partnership.
13. Which of the following partnership contracts is valid?

a. A partnership between a husband and wife for the exercise of a profession.
b. A universal partnership of all present property between a public officer and a private individual.
c. A universal partnership of profits between a married man and his mistress.
d. A universal partnership of all present property between a man and woman living together as husband and
wife without the benefit of marriage.
14. Which of the following statements is false?

a. A general partner may contribute money, property and/or services.
b. A limited partner may contribute money and/or property, but not services.
c. A partner may not be a general and limited partner at the same time.
d. A general partner may either be a capitalist or an industrial partner.
15. Jessica and Sienna want to put up an internet café business. Jessica is an expert in information technology and
computers but has no funds or property to invest. Sienna knows nothing about internet and computers but she is
willing to contribute the funds and property needed. If Jessica and Sienna decide to enter into a limited
partnership, who between the two of them will be the limited partner?
a. Jessica only.
b. Sienna only.
c. Both Jessica and Sienna.
d. Neither Jessica nor Sienna; hence, they cannot enter into a limited partnership.
16. Refer to the preceding number. Suppose Jessica and Sienna are sisters and they decide to put up a general
partnership, who between the two of them may be the general partner?
a. Jessica only.
b. Sienna only.
c. Both Jessica and Sienna.
d. Neither Jessica nor Sienna, they being sisters; hence, they cannot put up a general partnership.
17. These statements are presented to you for evaluation:
Statement I - A limited partner may also be a general partner at the same time.
Statement II - An industrial may also be a capitalist partner at the same time.
In your evaluation of the foregoing statements:

c. Only Statement I is true.
d. Only Statement II is true.
18. In which of the following instances is a partnership considered to be a partnership at will?

a. One where the partners did not agree on a definite term or &. specific undertaking.
b. One where the partners agreed on a definite term for the partnership, but the business is continued by the
partners after the expiration of such term.
c. One where the partners agreed on a specific undertaking, but the business is continued after the
attainment of such undertaking.
19. The following are obligations of a partner who has promised to contribute specific property to the partnership,
except:
a. To deliver to the partnership the property he has promised to contribute either at the time the partnership
was constituted or on the day stipulated.
b. To take care of the property before its delivery to the partnership with the diligence of a good father of a
family.
c. To answer for eviction in case the partnership is deprived of the property he has contributed.
d. To be liable for damages only after he fails to deliver the property upon demand by the other
partners.
20. Jack and John put up a partnership to engage in the computer repair business. Jack contributed P200,000.00, while
John his services. On the vacant stall on the left side of the computer repair shop, Jack intends to put up his own
eatery business, while on the vacant stall on its right side, John plans to establish a bakery. Who of the two may
validly establish his own business without the consent of the other partner?
a. Jack
b. John
c. Both Jack and John
d. Neither Jack nor John
21. D is indebted to X in the amount of P4,000.00. He also owes XYZ Company the amount of P6,000,00. X is a
partner of XYZ Company which authorized X to collect the credits of the partnership. Both debts are due. D gives
X P4,000.00 informing X that the amount is in payment of his debt to him. Accordingly, X issues his own receipt.
To which credit will the payment be applied?
a. To the credit of X.
b. To the credit of XYZ Company.
c. To the credit of X and that of XYZ Company proportionately at P1,600.00 and P2,400.00,
respectively.
d. To the credit of X and that of XYZ Company equally at P2,000.00 each.
22. D is indebted to X in the amount of P4,000.00. He also owes XYZ Company the amount of P6,000.00. X is a
partner of XYZ Company which authorized X to collect the credits of the partnership. Both debts are due. D gives
X P4,000.00 informing X that the amount is in payment of his debt to him. However, X issues a receipt of XYZ
Company in partial payment of its credit. To which credit will the payment be applied?
c. To the credit of X and that of XYZ Company proportionately at P1,600.00 and P2,400.00, respectively.
23. D is indebted to X in the amount of P4,000.00, which is interest-bearing. He also owes XYZ Company the amount
of P6,000.00, which is non-interest bearing. X is a partner of XYZ Company which authorized X to collect the
credits of the partnership. Both debts are due. D gives X P4,000.00 informing X that the amount is in payment of
his debt to him. Accordingly, X issues his own receipt. To which credit will the payment be applied?
c. To the credit of X and that of XYZ Company proportionately at P1,600.00 and P2,400.00,
respectively.
24. D is indebted to X in the amount of P4,000.00 which is due on March 15, 2021. He also owes XYZ Company,
P6,000.00 which is due on March 30, 2021. X is a partner of XYZ Company which authorized X to collect the
credits of the partnership. On March 20, 2021, D gives X P4,000.00 informing X that the amount is in payment of
his debt to him. Accordingly, X issues his own receipt. To which credit will the payment be applied?
25. D is indebted to X in the amount of P4,000.00. He also owes XYZ Company the amount of P6,000.00. Partners X,
Y and Z are the three partners of the company with Partner Z being authorized to collect the credits of the
partnership. Both debts are due. D gives X P4,000.00 informing X that the amount is in payment of his debt to
him. Accordingly, X issues his own receipt. To which credit will the payment be applied?
26. Demetrio owed HOT Company, a partnership composed of partners Hornilla, Ortaleza and Tanchangco, the sum
of P6,000.00. The partners agreed that each one may collect individually his share of P2,000.00 of the credit from
Demetrio. Hornilla was able to collect his share of P2,000.00. When Ortaleza and Tanchangco were demanding
payment of their respective shares, Demetrio was already insolvent and could not make any payment. In this
case:
a. Hornilla must bring to the partnership the amount of P2,000.00 that he collected from Demetrio so
that Ortaleza and Tanchangco may be able to share in it.
b. Hornilla is not obliged to bring to the partnership the amount he collected because the partners had an
agreement that each one must collect his own share.
c. Ortaleza and Tanchangco must each bear his loss.
d. The amount collected by Hornilla shall be considered as an advance return of his capital contribution by
the partnership.
27. Which loss of the following properties will be borne by the partner who contributed them?
a. Fungible things or those that cannot be kept without deteriorating.
b. Things brought and appraised in the inventory.
c. Things contributed to be sold.
d. Things only the use and fruits of which were contributed by a partner for the common benefit.
28. Which of the following stipulations is valid?

a. A stipulation excluding a capitalist partner from profits.
b. A stipulation exempting a capitalist partner from losses.
c. A stipulation excluding an industrial partner from profits.
d. A stipulation exempting an industrial partner from losses.
29. FINE Company is a partnership composed of Felisa, Irmina, Nerissa and Eloisa. The partners have capital
contributions of P10,000.00, P20,000.00, P30,000.00 and P40,000.00, respectively, and share in the profits in the
ratio of 2:1:2:5. In 2021, the partnership sustained a loss of P12,000.00. The share of each partner in the losses
shall be:
a. Equal for each partner at P3,000.00 since the partners do not have a loss sharing agreement.
b. Felisa, P1,200.00; Irmina, P2,400.00; Nerissa, P3,600.00; and Eloisa, P4,800.00, based on the capital
contributions of the partners.
c. Felisa, P2,400.00; Irmina, P1,200.00; Nerissa, P2,400.00; and Eloisa, P6,000.00, based on their
profit-sharing ratio.
d. The partners need to have an agreement on the sharing of the loss before it can be divided among the
partners.
Items 30 and 31 are based on the following information:
BAROQUE Company, a partnership engaged in the trading of art supplies, is composed of the following partners with
their capital contributions as follows: Bernardo, P10,000.00; Antonio, P20,000.00; Renato, P30,000.00; Orlando,
P50,000.00; Quintin, P80,000.00; Ulpiano, P200,000.00; and Eustaquio, P300,000.00. Bernardo, Antonio, Renato,
Orlando, and Quintin were appointed as managers without any specification as to their respective duties. In October,2021,
Bernardo proposed to buy art supplies from Artworld Corporation, but Quintin opposed it.
30. A voting took place with Antonio and Renato siding with Bernardo, and Orlando siding with Quintin. How shall
the conflict be resolved?
a. The group of Bernardo, Antonio and Renato will prevail because they constitute the majority of the
managing partners.
b. The group of Orlando and Quintin will prevail because they constitute the controlling interest among the
managing partners.
c. Neither of the two groups will prevail because the partners should act with unanimity.
d. The votes of Ulpiano and Eustaquio are necessary to resolve the conflict.
31. Supposing that when the voting took place, Antonio sided with Bernardo, Orlando sided with Quintin, while
Renato abstained thereby resulting in a tie among the managing partners. In this case:
a. The group of Quintin will prevail because he and Orlando own the controlling interest among the
managing partners.
b. The tie will have to be resolved by Eustaquio because he owns the controlling interest among all the
partners.
c. Neither of the two groups will prevail because of the equal number of votes.
d. Another voting should be conducted to resolve the conflict.
32. STARBOX Enterprises, a partnership engaged in the trading of video films, is composed of the following partners
with their capital contributions: Simon, P20,000.00; Troy, P40,000.00; Ariel, P50,000.00; Roger, P60,000.00;
Benny, P80,000.00; Oscar, P300,000.00; and Xavier, P700,000.00. There was no agreement among the partners
as to who shall be the manager.
a. Xavier shall be the manager because he owns the controlling interest.
b. Oscar and Xavier will be the managers because the two of them own the controlling interest.
c. All of the partners will be the managers.
d. The partners will have to agree as to who shall be the manager.
33. Refer to No.32. Assume that Simon desires to buy video films from Z Distributors Company, but Benny opposes
it. A voting took place and Troy, Ariel and Roger sided with Simon, while Oscar and Xavier sided with Benny.
a. The group of Simon, Troy, Ariel and Roger will prevail because they constitute the majority.
b. The group of Benny, Oscar and Xavier will prevail because they own the controlling interest.
c. None will prevail because no one was appointed as manager.
d. The conflict should be resolved by a unanimous vote among the partners.
34. Refer to No.32. Assume the voting resulted in the following: Troy and Ariel sided with Simon, Oscar and Xavier
sided with Benny, while Roger abstained from voting thereby resulting in a tie.
a. Benny, Oscar and Xavier will prevail because they own the controlling interest.
b. None will prevail because of the equal number of votes.
c. The tie should be resolved by a unanimous vote among all the partners.
d. The decision will be held in the meantime until the partners have agreed on who shall be the manager.
35. Wilma, Irma, Norma, Donna, and Yvonne are partners in the firm WINDY Company. They have contributions of
P40,000.00, P30,000.00, P15,000.00, P10,000.00, and P5,000.00. No one was named as manager. Two proposed
contracts were voted upon by the partners during a meeting which took place as follows:
Contract No. 1-Voting for approval were Wilma and Irma; voting for rejection of the contract were Norma,
Donna and Yvonne.
Contract No.2 - Voting for approval were Wilma and Irma; voting for rejection were Norma and Donna; while
Yvonne abstained.
In your study of the foregoing contracts:

a. Both contracts are considered approved.
b. Both contracts are considered rejected.
c. Only Contract I is considered approved.
d. Only Contract II is considered approved.

Statement I - If two or more partners have been appointed as managers with the stipulation that none shall act
without the consent of the other managers, the concurrence of all shall be necessary for the validity the acts.
Statement II - If the manner of management has not been agreed upon, all the partners shall be considered as
managers any one of whom may make any important alteration of immovable property even without the consent
of the others.
In your evaluation of the foregoing statements:

c. Only Statement I is true.
d. Only Statement II is true.
37. For more than 10 years, Palma and Plaza have been partners in the cultivation of an agricultural lot planted with
sweet corn. At the end of the last harvest season, Palma assigned his interest to Toledo, but Plaza objected on the
ground that he did not want Toledo to be his partner.
a. Palma, without Plaza's consent, cannot convey his interest to Toledo or any other person.
b. The partnership between Palma and Plaza was automatically dissolved when Palma assigned his interest
to Toledo.
c. Toledo automatically became Plaza's partner when Palma assigned his interest in the partnership to him.
d. Palma remains as a partner of Plaza with all the rights and obligations of a partner.
38. The conveyance such as by assignment by a partner of his whole interest in the partnership produces the following
effects, except:
a. The partnership still remains.
b. The assignee becomes a partner.
c. The assignee is entitled to receive the assignor-partner's interest in the profits.
d. The assignee cannot participate in the management of the partnership.
39. Zander and Friends is a partnership composed of partners Arthur, Bernard, Charles and Dennis, all friends of
Zander. Although not a partner, Zander offered to have his name included in the firm name to help his friends
start their business. Zander is known in the business community as the nickname of Alexander Cruz, and has
many businesses bearing his nickname such as Zander Forwarders, Inc., Zander Realty Corporation, Zander
Foods Corporation, and Zander Enterprises. During its first three years of operations, Zander and Friends incurred
liabilities which were more than its assets. In such as case, may the creditors go after the separate assets of
Alexander Cruz after the partnership assets have been exhausted?
a. No, because Alexander Cruz is not in reality a partner.
b. Yes, because Alexander Cruz is entitled to all the rights and is subject to all the liabilities of a partner.
c. Yes, because Alexander Cruz is subject to all liabilities, but is not entitled to the rights of a partner.
d. No, because Alexander Cruz did not invest in the capital of the partnership.
40. BRAVO Enterprises is a partnership owned by Bettina who invested P20,000.00; Rowena, P40,000.00; Armida,
P10,000.00; Violeta, P30,000.00; and Olivia, who contributed her services. The partners have stipulated that
Bettina shall be exempt from obligations to third persons. After three years of losses, the business had liabilities
of P90,000.00, while its assets dwindled to P50,000.00. In the payment of the liabilities, the assets of the
partnership will first be exhausted, and thereafter:
a. The unpaid liabilities of P40,000.00 will be paid equally by all the partners from their separate assets at
P8,000.00 each with no right to reimbursement.
b. The unpaid liabilities of P40,000.00 will be paid equally by all the partners from their separate
assets at P8,000.00 each with a right to reimbursement on the part of Bettina, who was exempted
from liability to third persons by agreement, and Olivia, who is an industrial partner who must not
share in the losses.
c. The unpaid liabilities of P40,000.00 will be paid equally by Rowena, Armida, Violeta and Olivia at
P10,000.00 each with no right to reimbursement on the part of Olivia.
d. The unpaid liabilities of P40,000.00 will be paid equally by Bettina, Rowena, Armida and, Violeta at
P10,000.00 each with a right to reimbursement on the part of Bettina.
41. ACME Enterprises is owned by partners Alonso, Cortes, Malvar and Elnora. Alonso contributed P50,000.00;
Cortes, P30,000.00; and Malvar, P20,000.00. Elnora, the managing partner, contributed his services. The partners
stipulated that Alonso shall be exempt from obligations to third persons. The firm incurred obligations of
P70,000.00 which it cannot pay as it has assets of P40,000.00 only. After the exhaustion of the partnership assets
and payment by the partners from their separate property of the partnership debts and settlement among
themselves, how much ultimately is the share of each partner in the remaining liability of P30,000.00?
a. Alonso, P15,000; Cortes, P9,000.00; Malvar, P6,000.00; Elnora, none.
b. Alonso, P10,000; Cortes, P10,000.00; Malvar, P10,000.00; Elnora, none.
c. Alonso, none; Cortes, P18,000.00; Malvar, P12,000.00; Elnora, none.
d. Alonso, P7,500; Cortes, P7,500.00; Malvar, P7,500.00; Elnora, P7,500.00.
42. Canuto, Ambrosio, Romualdo and Egmidio are partners in CARE Company, whose business is trading of herbal
products. Canuto contributed P60,000.00, Ambrosio, P30,000.00, Romualdo, P20,000.00, and Egmidio,
P10,000.00. The partners failed to agree on who shall manage the partnership.
a. Canuto shall be the manager because he owns the controlling interest.
b. Canuto and Ambrosio will be the managers because they own the controlling interest and there should be
at least two managers who can discuss and decide for the partnership.
c. All the partners will be considered as managers or agents of the partnership.
d. No one among the partners can manage the partnership because it is void when the partners failed to
designate the manager.
43. Refer to No. 42. Assume that Canuto was designated as manager. No other partner was given an authority to act
for the partnership. Which of the following transactions entered into in behalf of the CARE Company will not be
binding on it?
a. The sale by Canuto of herbal products.
b. The purchase by Canuto of herbal products.
c. The purchase of a delivery van by Ambrosio. The seller was not aware that Ambrosio had no
authority to purchase a van for the partnership.
d. The sale of herbal products by Romualdo. The buyer had no knowledge that Romualdo was not
authorized to sell for CARE.
44. PRISM Company is owned by partners Palermo, Redondo, Interno, Sarenas, and Melendez. Melendez is the
manager of the company whose business is the importation and trading of optical equipment. During the year, the
partners authorized Palermo to buy a delivery van for the partnership. No other authority was given to the other
partners. The following are transactions entered into by the partners for the year:
I. Importation of optical equipment by Melendez.
II. Sale of optical equipment by Redondo to ABC Visions Company whose owner, Antonio B. Carlos,
was not aware that Redondo had no authority.
III. Purchase of a delivery van by Interno from RT Motors whose owner, Ricardo Torres, was not aware
that Interno had no authority.
IV. Purchase of a delivery van by Palermo.
Which of the above transactions are binding on PRISM Company?

a. I and III
b. I and IV
c. I, II and IV
d. I, III and IV
45. GREAT Enterprises Company, a partnership dealing in computer software, is composed of Grace, Rose, Elma,
Aida, and Trina. Grace, Rose, Elma and Aida contributed P10,000.00, P20,000.00, P30,000.00, and P40,000.00,
respectively; while Trina, who is a computer expert, contributed her services and manages the partnership. The
partners have no profit and loss sharing agreement.
Based on the foregoing facts, the following statements are presented to you:
I. Trina may engage in the auto supply business without the consent of the capitalist partners since it is a
business that is of a kind different from the partnership business.
II. If Grace sells computer software to Blesilda, a third person, the sale will be binding on the partnership as
long as Blesilda was not aware of the lack of authority of Grace.
III. In case of profits, Trina will be given an equitable share thereof, and the balance will be divided among
Grace, Rose, Elma and Aida equally, since they have no profit-sharing agreement.
In your evaluation of the foregoing facts and statements:

a. I and II are false.
b. I and III are false.
c. II and III are false.
d. All are false.
46. Which of the following is an act that is not for apparently carrying on in the usual way the business of the
partnership?
a. Assigning the partnership property in trust for creditors or on the assignee's promise to pay the debts of
the partnership.
b. Entering into a compromise concerning a partnership claim or liability.
c. Renouncing a claim of the partnership.
47. A parcel of land in the name of Comptech Company, a partnership engaged in the sale and service of computers,
was sold by A, one of the partners, in the name of Comptech Company, without express authority, to X; who was
not aware of A's lack of authority.
a. The conveyance by A to X passed the title to the parcel of land to X.
b. Comptech Company cannot recover the parcel of land from X.
c. Both (a) and (b) are correct.
d. The conveyance by A to X passed only the equitable interest in the property to X.
48. Refer to the facts in the preceding number (47), except that A sold the parcel of land in his own name without
express authority to X who was not aware of A's lack of authority.
a. The conveyance by A to X passed title to the parcel of land to X.
b. The conveyance by A to X passed the equitable interest in the parcel of land to X.
c. Both (a) and (b) are correct.
d. Neither (a) nor (b) is correct.
49. The following statements concerning notice and knowledge of a partner concerning partnership affairs are
presented to you for evaluation:
I. Notice to any partner.
II. Knowledge of partner acting on the particular matter obtained by him while already a partner.
III. Knowledge of a partner not acting on the particular matter obtained by him before he became a
partner.
Which of the above notice/knowledge is also notice to or knowledge of the partnership?

a. I and II.
b. I and III.
c. II and III.
d. I, II and III
50. Berroya is a partner in Excellent Company. Before he became a partner, he acquired knowledge about the credit
reputation of Termulo who had a string of collection cases against him. Later, Termulo bought goods on credit
from Excellent Company through Acton, the partner authorized to act on the particular matter. During all the time
that the transaction was being conducted with Termulo, Berroya never relayed the knowledge he had about
Termulo to Acton although he could have done so. Later, Excellent Company could not collect Termulo's
account. Was the knowledge of Berroya on Termulo's credit reputation also knowledge of the partnership?
a. Yes, because he could and should have relayed the information to Acton.
b. Yes, because he remembered the information.
c. No, because he was not the partner acting on the particular matter.
d. Yes, because the knowledge of any partner on any matter affecting the partnership is knowledge of the
partnership.
51. The following sources of obligations are presented to you:
I. Liability arising from torts (quasi-delicts) and crimes for the individual acts of partners.
II. Liability for contractual obligations of the partnership.
The liability of the partners and the partnership is:

a. I-solidary (partners and partnership); II- joint (partners)
b. I-joint (partners); II-solidary (partners and partnership)
c. Solidary (partners and partnership) for both I and II.
d. Joint(partners) for both I and II.
52. DOW Enterprises is a partnership composed of Damortiz, Ortega and Wenceslao. Damortiz was driving the firm's
van beyond the speed limit to deliver some goods to a customer when it hit and damaged the car of Campos.
a. DOW Enterprises and the three partners may be held solidarily liable by Campos for damages.
b. Only Damortiz may be held liable by Campos for damages because of the former's negligence for driving
beyond the speed limit.
c. Only DOW Enterprises may be held liable by Campos because the damage was sustained by Campos
while Damortiz was performing an act in the course of business.
d. Only DOW Enterprises and Damortiz may be held solidarily liable by Campos.
53. Nathan, Edgar, Albert and Trevor are partners in NNEAT Dry Cleaning Company. Nathan used in a party he
attended a coat brought to the shop by Custodio, a customer, for dry cleaning. The coat was accidentally stained
with food during the party that Nathan attended. Whom may Custodio hold liable?
a. Nathan only.
b. All the partners jointly.
c. All the partners and partnership solidarily.
d. Neither the partners nor the partnership because the stain caused on the coat was due to a fortuitous event.
54. A, B and C are partners in X Enterprises. They want to obtain a loan from Z but Z does not know any of them so
they ask D who is known to Z, to represent himself as a partner in X Enterprises. Z, believing that D is a partner
in X Enterprises, thus grants a loan of P90,000.00 to X Enterprises. Later, however, X Enterprises is unable to pay
the loan as its assets amount only to P60,000.00. In the payment of the loan:
a. The assets of X Enterprises shall first be exhausted. Thereafter, A, B and C may be held liable by Z from
their separate assets at P10,000.00 each.
b. The assets of X Enterprises shall first be exhausted. Thereafter, A, B, C and D may be held liable by
Z from their separate assets at P7,500.00 each.
c. A, B, C and D shall share in the payment of P90,000.00 from their separate assets at P22,500.00 each.
d. A, B and C shall share in the payment of the P90,000.00 from their separate assets at P30,000.00 each.
55. Refer to the preceding number (54). Assume that only A and B gave consent to the misrepresentation made by D.
Suppose that later on the loan obligation could not be paid. Against whom may Z proceed?
a. Against the partnership for its assets of P60,000.00. Thereafter, Z can go after A and B for P15,000.00
each for the balance of P30,000.00.
b. Against the partnership for its assets of P60,000.00. Thereafter, Z can go after A, B and D at P10,000.00
each for the balance of P30,000.00.
c. Against A, B and Z at P30,000.00 each for the whole amount of the liability of P90,000.00.
d. Against the partnership for its assets of P60,000.00. Thereafter, Z can go after A, B, C and D at P7,500.00
each for the balance of P30,000.00 since the partnership and C have also been benefited by the loan.
56. Which of the following statements is true?

a. Partnership creditors shall be preferred to those of each partner as regards the partnership
property regardless of the amount of the claims.
b. Partnership creditors shall be preferred to those of each partner as regards the partnership property if the
partnership debt is more than the amount of the claims of the separate creditors of the partners.
c. The separate creditors of a partner shall be preferred to those. of partnership creditors as regards the
partnership property if the former obtained an order of attachment and public sale of the share of the
debtor partner.
d. The separate creditors of a partner shall be preferred to those of partnership creditors as regards the
partnership property if the former's claims are more than the amount of the claim of partnership creditors.
I. A newly-admitted partner shall be liable for partnership debts incurred before his admission only if there
was a stipulation to that effect.
II. A newly-admitted partner shall be liable for partnership debts incurred before his admission even if there
was no stipulation to that effect.
III. A newly-admitted partner shall be liable for partnership debts incurred after his admission only if there
was a stipulation to that effect.
IV. A newly-admitted partners hall be liable for partnership debts incurred after his admission even if there
was no stipulation to that effect.
Which of the foregoing statements are true?

a. I and III.
b. II and IV.
c. I and IV.
d. II and III.
58. Which of the following losses will not cause the dissolution of the partnership?
a. Loss before its delivery to the partnership of property only the use of which was contributed by the
partner who owned it.
b. Loss after its delivery to the partnership of property only the use of which was contributed by the partner
who owned it.
c. Loss before its delivery to the partnership of property which a partner had promised to contribute to the
partnership.
d. Loss after its delivery to the partnership of property which a partner had promised to contribute to
the partnership.
59. Which of the following will not cause the automatic dissolution of a general partnership?
a. Insolvency of the partnership.
b. Insanity of a partner.
c. Civil interdiction of a partner.
d. Termination of the definite term of the partnership.
60. Three of the following may be used as a ground for the filing of a petition by a partner for the dissolution of a
partnership by court decree, while one automatically results in its automatic dissolution. Which one refers to the
latter?
a. Incapacity of a partner to perform his part of the partnership contract.
b. Partner's conduct affects prejudicially the carrying on of the partnership business.
c. The partnership business cannot be carried on except at a loss.
d. Insolvency of a partner.
61. A partnership is dissolved by reason of the death of a partner. The dissolution of the partnership was published in
a newspaper of general circulation. PC, a previous creditor, and NC, a new creditor, both transacted new business
with the partnership after dissolution, but neither of them read the publication of the firm's dissolution nor learned
of it in some other way. Who is deemed to have knowledge of the dissolution of the partnership?
a. PC only.
b. NC only.
c. Both PC and NC.
d. Neither PC nor NC because neither one has come to learn of the dissolution of the partnership.
62. Which of the following statements concerning a limited partnership is false?

a. A limited partnership is composed of at least one limited partner and at least one general partner.
b. A limited partner may contribute money or property, but not services.
c. The death of a limited partner, where there are several limited partners, dissolves the partnership.
d. If there are several limited partners, an agreement may be entered into by the members that one or some
limited partners shall have priority over other limited partners as regards the return of their contribution.
63. A limited partner is liable as a general partner in the following cases, except:
a. if he is also a general partner.
b. if he participates in the management of the partnership.
c. if he allows his surname to be included in the firm name.
d. if he enjoys preference in the payment to him of compensation by way of income over other limited
partners.
64. BLOCK Enterprises is a partnership engaged in the business of construction with Baldoz, Lopez, Olandez, Crisol
and Kintanar as partners. Baldoz is the manager. After 5 years of operations, Kintanar resigned from the
partnership. The dissolution was published in a newspaper of general circulation. Nonetheless, Baldoz, despite
having knowledge of the dissolution of the partnership by reason of Kintanar's withdrawal, still entered into the
following transactions:
I. Purchase of cement on credit from Ramos Cement Company, a sole proprietorship whose owner, Jose
Ramos, was not aware of the dissolution of the partnership and had not read the publication. Ramos
Cement Company had been a creditor of BLOCK for the past 4 years.
II. Purchase of steel on credit from Sanchez Steel Works, a sole proprietorship whose owner, Alberto
Sanchez, was not aware of the dissolution of the partnership and had not read the publication. Sanchez
was dealing for the first time with BLOCK.
Which of the above transactions is/are binding on BLOCK?

a. Both I and II.
b. Neither I nor II.
c. I only.
d. II only.
65. Refer to preceding number. The authority of Baldoz to act for the partnership is:
a. terminated among the partners but not terminated with respect to both Ramos and Sanchez.
b. terminated among the partners but not terminated with respect to Ramos.
c. terminated among the partners but not terminated with respect to Sanchez.
d. terminated among the partners as well as to Ramos and Sanchez.
66. John, Edward and Thomas are partners in Jet Company, Limited. John is a general partner, Edward a limited
partner, and Thomas, a general-limited partner. The partnership has liabilities of P70,000.00 and assets of
P40,000.00. In the payment of liabilities:
a. The assets of the partnership amounting to P40,000.00 shall first be exhausted. Thereafter, John and
Thomas shall pay from their separate assets the balance at P15,000.00 each to the creditors.
b. The assets of the partnership amounting to P40,000.00 shall first be exhausted. Thereafter, John
and Thomas shall pay from their separate assets the balance at P15,000.00 each to the creditors but
Thomas can recover the amount of P15,000.00 from John.
c. The assets of the partnership amounting to P40,000.00 shall first be exhausted. Thereafter, the three
partners shall pay from their separate assets the balance at P10,000.00 each to the creditors, but Edward
and Thomas can recover P10,000.00 each from John.
d. John and Thomas will pay the liabilities of P70,000.00 from their separate assets. Thereafter, Thomas can
recover P35,000.00 from John.
67. LIBRO Enterprises, Limited is a partnership engaged in the book store business, with Lydia, Indira, Blesilda,
Romina, and Oprah as partners. Lydia is the only a limited partner contributing P200,000.00. Indira contributed
her services by managing the firm, while Blesilda, Romina and Oprah contributed P50,000.00, P100,000.00, and
P150,000.00 respectively. The partners have a stipulation that Oprah shall not be liable for obligations of the
partnership because of the goodwill she brought to the business. Who among the partners may creditors go against
for their separate property after the partnership assets have been exhausted?
a. All of the partners.
b. Blesilda and Romina only.
c. Indira, Blesilda and Romina only.
d. All of the partners, except Lydia.
68. Without the written consent or ratification by all the limited partners, a general partner or all the general partners,
have no authority to perform any of the following acts, except to:
a. admit a person as a general partner.
b. continue the business with partnership property on the death, retirement, insanity, civil interdiction or
insolvency of a general partner.
c. admit a person as a limited partner the certificate of partnership being silent on this matter.
d. continue the business with partnership property on the death, retirement, insanity, civil interdiction
or insolvency of a limited partner.
69. Which of the following will not cause the automatic dissolution of a limited partnership?
a. Insanity of a general partner.
b. Civil interdiction of a limited partner.
c. Death of a general partner.
d. Insolvency of a general partner.
70. A, a limited partner in XYZ Company, Ltd., received the amount of P200,000.00 representing his contribution to
the firm which was being returned on the date stipulated in the certificate of partnership. At that time, the firm had
liabilities of P440,000.00 and assets amounting to P180,000.00. May A be required to bring back to the
partnership the amount returned to him if the firm is unable to pay the liabilities?
a. Yes, he will have to bring back the amount of P200,000.00 that he had received together with
interest thereon because the liabilities arose before the return of his contribution.
b. No, because the amount of P200,000.00 returned to him is already beyond the reach of partnership
creditors.
c. Yes, he will have to bring back the amount of P200,000.00 plus interest, and contribute out of his separate
property if partnership assets are not sufficient to pay for the liabilities.
d. No, because he is no longer a partner of the firm after the return of his contribution.
71. A and B are capitalist partners, with C as an industrial partner. A and B contributed P15, 000.00 each to the capital
of the partnership. A contractual liability of P40,000.00 was incurred by the partnership in favor of X. If the
capital assets have been exhausted to pay X, leaving a contractual liability of P10, 000.00, X can recover the
amount from:
a. A and B only
b. A, B and C
c. A, B and C and C can recover for reimbursement from A and B
d. No reimbursement may be recovered by C.
72. A, B and C are partners engaged in a retail business. Their contribution is P20, 000.00 each. D is admitted as a
new partner with a contribution of P8,000.00. At the time of his admission, the partnership has an outstanding
obligation to E in the amount of P80, 000.00. In this case:
a. D is not liable to E for this obligation and his P8,000 contribution shall remain with the partnership.
b. D is liable to E for this obligation so that after the assets of the partnership amounting to P68,
000.00 will be exhausted leaving a balance of P12, 000.00, only A, B and C shall be liable jointly or
pro rata, out of their separate property.
c. D is liable to E for this obligation so that after the assets of the partnership will be exhausted, leaving a
balance of P12,000.00, all the partners shall be liable jointly or pro rata, including D, out of their separate
property.
d. D will be liable only if he knew of the liability of P80,000 at the time he joined the partnership.
73. Every contract of partnership having a capital of three thousand pesos or more, in money or property, shall appear
in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission. Failure
to comply with this requirement:
a. Renders the contract of partnership void.
b. Renders the contract of partnership unenforceable.
c. Affects the liability of the partnership to third persons and the partnership has no legal personality.
d. Does not affect the liability of the partnership to third persons and the partnership still has a legal
personality.
74. A and B are partners in A & B Partnership. A owns two parcels of land which he contributed to the partnership. B
owns six trucks which he contributed to the partnership. The profits of the land and the trucks were also included
as contributions. The properties contributed are all what A and B own. The partnership is:
a. Universal partnership of all present property
b. Universal partnership of all profits
c. Particular partnership
d. Partnership at will
75. X, Y, and Z are partners in XYZ Partnership, Ltd. Y as limited partner. After five years of operations, the
partnership incurred debts in favor of third persons totaling P5 million. The total partnership assets is P3 million.
Who among the partners shall be liable with their separate property in favor of creditors?
a. X and Z for P1.5 million each because they are general partners
b. X, Y and Z for P1 million each
c. X, Y, and Z depending upon their capital contribution.
76. A capitalist partner engaged for his own account in an operation that is of the kind of business in which the
partnership is engaged. Said partner can be
a. Compelled to sell his interest in the partnership to the other capitalist partners.
b. Compelled to bring to the common funds of the partnership any profits accruing to Him from his
transactions.
c. Compelled to dissolve or discontinue the operation of his business.
d. Denied his share in the profits of the partnership.
77. Which of the following is not a prohibition on a limited partner?
a. Limited partner may not contribute service
b. Surname of a limited partner may not appear in the partnership name.
c. Limited partner may not take part in the control of the business.
d. Limited partner may not constitute his assignee as substitute limited partner.
78. 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 among the partners only and against third persons?
a. Not valid as against third persons or partnership creditors.
b. Not valid stipulation exempting a partner from sharing profits and losses.
c. Yes, because among the partners it is valid to exempt one from sharing in the profits and losses.
d. Yes, valid as long as third persons are not prejudiced.
79. 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 much, if any, is C liable?
a. P1M but with reimbursement from A to B equally.
b. P1M
c. A and B alone shall shoulder the loss at C’s option.
d. Nothing, because an industrial partner is exempt from losses.
equally. Suppose in the preceding case, there was no agreement as to profit-loss sharing, what will be the sharing
of C in the profit?
a. P1M
b. Court to fix his share.
c. Equal to share of A and B
d. Just and equitable under the circumstances
equally. Based on the preceding number, what shall be his share in the loss?
a. P1M
b. Equal to the shares of A and B
c. Just and equitable under the circumstances
d. None
82. Which one of the following is not a requisite prescribed by law in order that a partnership may be held liable to a
third party for the acts of one of its partners?
a. The partner binds the partnership by acquiescence for obligations he may have contracted in good
faith.
b. The partner must have the authority to bind the partnership.
c. The partner must act on behalf of the partnership
d. The contract must be in the partnership name or of its account.
83. Arsenio and Bocobo are partners in ACE Partnership. While A was performing his duties as a partner in the
conduct of the business, he negligently caused damage to Victor, a third person. Who shall be liable to Victor and
in what capacity?
a. Only the partnership shall be liable it being a juridical person separate and distinct from the partnerships.
b. Arsenio, Bocobo and the partnership are all liable solidarily to Victor.
c. Both Arsenio and Bocobo shall be liable solidarily to Victor.
d. Only Arsenio shall be liable for he is the only one at fault.
84. Which of the following acts of the partnership may be done by the managing partner alone?
a. Disposition of the goodwill of the business.
b. Confession of judgment.
c. Approval of collecting bargaining agreement.
d. Renunciation of a claim of the partnership.
85. Which of the following is the right of an assignee of a partner’s interest?

a. Right to participate in the management of the partnership
b. Right to vote in the selection of the managing partner
c. Right to inspect the partnership book and demand audited financial statements of the partnership
d. Right to the share in net income of his assignor
86. Artemio and Bienvenido are co-owners of a parcel of land from where they share the profits equally as co-heirs in
inheritance. Is there a partnership?
a. There is a prima facie presumption of 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 prima facie presumption of partnership they being co-owners and co-possessors
87. Andres and Boyong entered into a universal partnership of all present property. No stipulation was made
regarding future property. After the perfection of the contract, Andres inherited a parcel of land and Boyong
acquired a car as remuneration for services rendered. The properties acquired after the perfection of the contract
belong to whom?
Land Car
a. Andres Boyong
b. Andres Partnership
c. Partnership Boyong
d. Partnership Partnership
88. On April 1, 2022, A and B entered into a contract of partnership for the purpose of selling cows’ milk, with the
former as capitalist partner and the latter as industrial partner. It was agreed that A shall contribute 1,000 cows to
the common fund on May 2, 2022. Upon the arrival of the designated date, A failed to deliver the contribution he
promised. As a result
a. B should make a demand upon A for the delivery of his contribution and its fruits to render A in default
b. The contract of partnership becomes void because A failed to give his contribution to the common fund
c. B can compel A to deliver his contribution and its fruits without the necessity of demand
d. The contract of partnership was never perfected because there was no delivery of contributions by the
partners
89. In case a managing partner collects a demandable debt from his debtor who also owes the partnership a
demandable debt, which of the following is not correct if payment is not enough to cover the two debts?
a. The sum collected shall be applied to the partnership credit
b. The sum shall be applied to the two credits in proportion to their amounts
c. The debtor has the right to have the payment applied to his debt to the partner if it should be onerous to
him
d. The partner cannot apply the payment to his own credit
90. Who between a limited partner and a general partner may receive on account of resulting claims against the
partnership, with general creditors, a pro rata share of the partnership assets?
a. Both limited partner and general partner.
b. Limited partner only.
c. General partner only.
d. Neither general partner nor limited partner.
91. When a partnership dissolves and winds up, of the following, who would be the last to receive distribution of
partnership assets?
a. The partners in repayment of loans.
b. The partners in repayment of profits.
c. The partners in repayment of capital
d. The creditors of the partnership.
92. W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and Z as capitalist
partners. Y contributed P5M and Z contributed P2M to the common fund. By a unanimous vote of the partners, W
and X were appointed managing partners, without any specification of their respective powers and duties. A,
applied for the position of Secretary and B, applied for the position of Accountant of the partnership. The hiring
of A was decided by W and Z but was opposed by X and Y. Who of the applicants should be hired by the
partnership?
a. A only
b. B only
c. Both A and B
d. Neither A nor B
93. On the death of a partner, public notice of death is not given and the partnership continues the business, then for
the acts of the partnership done after his death, the estate of the deceases partner is
a. liable.
b. treated as security
c. not liable
d. proportionally liable
94. Arnel, Butch, Leo, Danilo and Fred are partners in BIGATIN Company which is engaged in the buying and
selling of rice. Arnel is the manager. Butch was also given a special power of attorney by the partnership to buy a
van for the company. No other power was given to all the partners. In which of the following acts or contracts is
the partnership NOT bound by the act of the partner?
a. Arnel selling rice for the partnership.
b. Butch buying a van for the partnership from Flora.
c. Leo buying a van for the partnership from Joy who has no knowledge of Leo’s lack of authority.
d. Butch buying rice from the partnership from Teddy who has no knowledge of Butch’s lack of authority.
95. Every contract of partnership having a capital of three thousand pesos or more, in money or property shall appear
in a public instrument, which must be recorded in the SEC. Failure to comply with this requirement
a. Affects the liability of the partnership to third persons and the partnership has no legal personality.
b. Renders the contract of partnership void.
c. Does not affect the liability of the partnership to third persons and the partnership have a legal
personality.
d. Renders the contract of partnership unenforceable.
96. Which of the following statements relative to partnership and partners is INCORRECT?
a. A person who receives the profits is always a partner.
b. The true test of partnership is the mutual agency, i.e., agency relationship among partners.
c. A person who receives the profit is not necessarily a partner.
d. The partnership comes into existence only thru an agreement.
97. X, Y, and Z are partners in XYZ Partnership, Ltd. With Y as limited partner. After five years of operations, the
partnership incurred debtor in favor of third persons totaling P5 million. The total partnership asset is P3M. Who
among the partners shall be liable with their separate property, in favor of creditors?
a. X and Z for P1.5 million each because they were general partners.
b. X, Y and Z depending upon their capital contribution.
c. X, Y and Z for P1 million each.
d. X and Y for P1 million each.
98. A limited partner is prohibited on account of his claim against the partnership from performing the following acts,
except:
a. To receive from a general partner or the partnership any payment, conveyance or release from liability. If
partnership liabilities to outside creditors.
b. Transact business with the partnership.
c. To receive or hold as collateral security any partnership property.
99. Where the money received from a third party by the partnership, in the ordinary course of business, is misapplied
by one of the partners to his own use, then the
a. partnership is not liable for the same.
b. defaulting partner alone is liable for the same.
c. third party has no remedy.
d. partnership is liable for the same.
100. Which of the following is an absolute duty of a partner in a partnership and cannot be excluded by an agreement
to the contrary?
a. Duty to account for profits of a competing business.
b. Duty to indemnify for loss caused by a partner’s fraud.
c. Duty to indemnify for loss caused by negligence.
d. Duty to share losses equally.
LAW ON OTHER BUSINESS TRANSACTIONS (SPECIAL COMMERCIAL LAWS)
1. A has two separate single bank accounts with P1,000,000 and P2,000,000 balance, respectively in the same bank
which is closed by Bangko Sentral ng Pilipinas (BSP). B, on the other hand, has two separate single bank
accounts with P3,000,000 and P2,000,000 balance, respectively with the said bank. Aside from that, A has two
separate joint accounts with different persons in the same bank. The first joint account of A is with B with balance
of P10,000,000 while the other joint account of A is with C with balance of P4,000,000. How much is the
maximum insured amount by PDIC from these deposits concerning A and B, respectively?
a. P500,000 and P500,000
b. P1,000,000 and P750,000
c. P1,000,000 and P1,000,000
d. P1,000,000 and P500,000
Computation:
A B C
Maximum Insured Deposit for Single Account P500,000 P500,000

Maximum Insured Deposit for Joint Account (A&B) 250,000 250,000
Maximum Insured Deposit for Joint Account (A&C) __250,000 _______ 250,000
P1,000,000 P750,000 P250,000
2. Which of the following is not insured by Philippine Deposit Insurance Corporation?

a. Certificate of time deposit
b. Investment in government bonds
c. Savings deposit
d. Demand or checking account
3. What is the maximum period provided by law to depositors to file their claim before Philippine Deposit Insurance
Corporation from its takeover of the closed bank?
a. Two years
b. Three years
c. Four years
d. Five years
4. X is a depositor of AAA Bank. She has three (3) deposit accounts all under her name. One, in checking account,
one in saving account and another one in time deposit account. Each account has a balance of P250,000. AAA
Bank became insolvent. Philippine Deposit Insurance Corporation closed the Bank. X therefore is unable to
withdraw from all of the accounts. She then filed her claims with the Philippine Deposit Insurance Corporation.
Which statement is most accurate?
a. X can claim a total of P500,000 for all the three (3) accounts.
b. X can only claim from one (1) account of P250,000.
c. X can claim a total of P750,000 from all the three (3) accounts.
d. X cannot claim anything from any of the deposit accounts.
5. The following are not covered by the PDIC Deposit Insurance, except:
a. Deposit accounts or transactions that constitute and/or emanate from unsafe and unsound banking
practices
b. Bank Deposits in Foreign Banks operating outside the Philippine territory or Bank Deposits in Foreign
branch of domestic bank operating outside the Philippine territory
c. Negotiable Order of Withdrawal
d. Investment products such as bonds and securities, trust accounts and other similar instruments
6. The following are required to file deposit insurance claims to PDIC, except:
a. Depositors who have outstanding obligations with the closed bank regardless of amount of deposits.
b. Depositors with valid deposit accounts with balances of Pl00,000 and below are not required to file
claims provided they have no obligations with the closed bank and have complete and updated
addresses in the bank records.
c. Depositors with account balances of less than P100,000 who have no updated addresses in the bank
records.
d. Depositors who maintain their accounts under the name of business entities, regardless of type of account
and account balance.
7. Mr. Angelito Ramos maintained the following deposits at ABC Bank:
Name of Depositor Type of Deposit Balance

Angelito Ramos (maintained in the Head Office) Savings Deposit ₱100,000
Angelito Ramos (maintained in the Head Office) Time Deposit 500,000
Angelito Ramos (maintained in the Head Office) Demand Deposit 100,000
Angelito Ramos (maintained in Branch 2) Time Deposit 200,000
Angelito Ramos (maintained in Head Office) Demand Deposit 500,000
ABC Bank was liquidated by the Bangko Sentral ng Pilipinas (BSP) due to financial reverses. How much is the
UNINSURED deposits of Angelito Ramos?
a. ₱400,000
b. ₱500,000
c. ₱900,000
d. None of the choices
Computation:
Savings Deposit (maintained in the Head Office) P 100,000
Time Deposit (maintained in the Head Office) 500,000
Demand Deposit (maintained in the Head Office) 100,000
Time Deposit (maintained in Branch 2) 200,000
Demand Deposit (maintained in the Head Office) 500,000
Total Deposits P 1,400,000
MAXIMUM PDIC Coverage (Insured Deposits) (500,000)
Uninsured Deposits P 900,000
8. Upon completion of the required documents in filing deposit insurance claims with PDIC, it must be submitted to:
a. The PDIC representatives at the premises of the closed bank during Claims Settlement Operations or to
the PDIC Public Assistance Center if filing personally.
b. Send the accomplished and notarized Claim Form and requirements to The Claims Processing
Department of PDIC if send through Mail.
c. Either A or B
d. Neither A nor B
9. Unsafe and unsound deposit-related activities include, among others, which is the exception?
a. Deposit-related practice/activity/transaction without the approval or adequate controls required under
existing laws, rules and regulations
b. Failure to keep bank records within bank premises
c. Granting high interest rates, when bank has negative unimpaired capital or liquid assets to deposit
ratio less than 20%
d. Noncompliance with PDIC regulations
10. Who should sign the deposit insurance claim form in case of “By” accounts?
a. Trustee
b. Agent
c. Parent
d. Receiver
11. Jose and his wife, Perla, opened and maintained the following accounts with Allied Bank Recto. (a) Savings
deposit – P300,000; (b) Demand deposit – P400,000; (c) Time deposit - P350,000. They also have the same
deposits with the same amount in Allied Bank Makati. If Allied bank becomes insolvent the Philippine Deposit
Insurance Corporation will be bound to be liable to the spouses for its insurance liability equivalent to
a. Two deposits.
b. One deposit.
c. Three deposits.
d. Six deposits.
12. X is a depositor of AAA Bank. She has three (3) deposit accounts all under her name. One, in checking account,
one in saving account and another one in time deposit account. Each account has a balance of Php250,000. AAA
Bank became insolvent. Philippine Deposit Insurance Corporation closed the Bank. X therefore is unable to
withdraw from all of the accounts. She then filed her claims with the Philippine Deposit Insurance Corporation.
Which statement is most accurate?
a. X can claim a total of Php500,000 for all the three (3) accounts.
b. X can only claim from one (1) account of Php250,000.
c. X can claim a total of Php750,000 from all the three (3) accounts.
d. X cannot claim anything from any of the deposit accounts.
13. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposit records of an individual
without court order, except:
a. In an examination to determine gross estate of a decedent.
b. In an investigation for violation of Anti-Graft and Corrupt Practices.
c. In an investigation by the Ombudsman.
d. In an impeachment proceeding.
14. Which of the following is an exception to the secrecy of bank deposits which are in Philippine Pesos, but NOT an
exception to the secrecy of foreign currency deposits?
a. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of deposits or investments with any
bank, when the inquiry or examination is made in the course of the SSP's periodic special examination of
said bank to ensure compliance with the Anti-Money Laundering Act (AMLA)
b. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry into and examination of deposit
accounts in case there is a finding of unsafe or unsound banking practice;
c. Upon inquiry in cases of impeachment
d. Upon inquiry by the Commissioner of Internal Revenue in the event a taxpayer files an application to
compromise his tax liabilities on the ground of financial incapacity
15. X is being charged for violation of Anti-Graft and Corrupt Practices because he is suspected of having
accumulated unexplained wealth. X maintains deposit accounts with ABC Bank. The Ombudsman filed criminal
cases against X before the Sandiganbayan. Can the Court issue subpoenas against ABC Bank to produce all
documents pertaining to all the deposit accounts of X?
a. Yes, because there is already a pending case and provided the subpoena must be specific as to
which account.
b. Yes, it is enough that the specific bank is identified.
c. No, because the issuance of the subpoena has no real legal basis.
d. Even without a subpoena, information about the deposit accounts of X can be submitted to the
Sandiganbayan because it will be used in a pending case.
16. X, a private individual, maintains a dollar deposit with ABC Bank. X is suspected to be the leader of a Kidnap for
Ransom Gang and he is suspected of depositing all ransom money in said deposit account which are all in US
Dollars. The police want to open said account to know if there are really deposits in big amounts. Which
statement is most accurate?
a. The same rules under Secrecy of Bank Deposit Act will apply.
b. An approval from the Monetary Board is necessary to open the account.
c. Because the deposit is in US Dollars, it is covered by the Foreign Currency Deposit Act which allows
disclosure only upon the written permission of the depositor.
d. Approval from the Court is necessary to order disclosure of the account.
17. The right to secrecy of bank deposits

a. Being part of municipal law, does not apply to deposits in branches of foreign banks in the Philippines.
b. Is a constitutional right which may, however, be regulated by statute.
c. Cannot be invoked in the absence of an express statutory provision.
d. If violated will render the information obtained thereby inadmissible as evidence in any proceeding
against the depositor.
18. A public officer is charged with violation of the anti-graft and corrupt practices act before the Office of the
Ombudsman. The Ombudsman requests a bank to disclose information regarding the accounts in the name of the
public officer’s immediate family. What principle or ground may the bank invoke to resist such inquiry?
a. An inquiry into bank deposits cannot be had at the preliminary investigation level.
b. No inquiry into bank deposits can be had in the absence of a court order.
c. No inquiry can be made except into bank accounts of the person charged.
d. The office of the Ombudsman has no power to inquire into bank deposits.
19. All foreign currency deposits are considered of an absolutely confidential in nature and shall exempt from
attachment, garnishment or any other order or process of any court, legislative body, government agency or any
administrative body whosoever. The following are the exemption to the secrecy of foreign currency deposit
except:
a. Upon the written permission of the depositor
b. Upon order of competent court in cases of violation of AMLA when it established that there probable
cause that the deposits or investments involved are in any way related to a money laundering offense
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire into or examine deposit
accounts pursuant to explanation
d. The PDIC with prior approval of the Monetary Board
20. All of the following are exceptions to the Bank Secrecy Law except?
a. Upon order of the competent court in cases involving Graft and Corrupt Practices Act
b. Examination by an independent auditor hired by the bank
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire into or examine deposit
accounts pursuant to explanation
d. In- camera inspection by the Ombudsman
21. Under Republic Act No. 6426 also known as Foreign Currency Deposit Act of the Philippines, what is the only
exception provided by such law from the absolute confidentiality of foreign currency deposit?
a. Upon written permission or consent in writing by the depositor.
b. In cases of impeachment of the President, Vice President, members of the Supreme Court, members of
the Constitutional Commission (Commission on Elections, Civil Service Commission and Commission
on Audit) and the Ombudsman for culpable violation of the Constitution, treason, bribery, graft and
corruption, other high crimes or betrayal of public trust.
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials.
d. In cases where the money deposited or invested is the subject matter of the litigation.
22. Which of the following is not protected by Republic Act No. 1405 also known as Bank Secrecy Law?
a. Investment in government bonds
b. Certificate of time deposit
c. Money market placement
d. Demand account
23. Under RA 1405 also known as Bank Secrecy Law, which of the following acts of a bank official is covered by the
Bank Secrecy law?
a. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing garnishment
order against him.
b. Disclosing the name of the drawer of a check to the payee.
c. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR officer who is examining
his income tax liability.
d. Disclosing the amount of deposit exceeding P500,000 in one (1) banking day to the Anti-Money
Laundering Council.
24. X, a government employee, purchased Land Bank bonds with a total value of P1,000,000 and receives semi-
annual interest income from his investment. Under the Bank Secrecy Law, X’s investment may be inquired into
without need of a court order by the:
a. Public prosecutor handling an estafa case against X.
b. BIR officer auditing the value-added taxes of X.
c. Credit investigator of a lending institution where X applied for a loan.
25. The term "intellectual property rights," may consist of:

a. Layout-Designs (Topographies) of Integrated Circuits
b. Protection of Undisclosed Information
c. Both A and B
d. Neither A nor B
26. Under the Intellectual Property Code, which of the following inventions shall satisfy the requisite of "novelty”?
a. It was the subject in the magazine "Inventor's Guide" two years prior to the patent application.
b. It was made available to the public for experimental purposes for more than a year prior to the
patent application.
c. It was sold to the public in the Philippines for more than a year prior to the patent application.
d. It was exported to Japan for sales purposes for more than a year but not sold in the Philippines.
27. In determining the requisite of "non-obviousness" in an invention, the following factors, among others, are
considered:
a. Commercial success
b. Level of ordinary skill in the field of the invention
c. Both A and B
d. Neither A nor B
28. Are rebroadcasting and retransmission protected intellectual property rights?
a. No. Since rebroadcasting and retransmission are forms of copyright infringement
b. Yes. Since Rebroadcasting and retransmissions are allowed under the must-carry rule.
c. Rebroadcasting is not a protected intellectual property right due to the must-carry rule whereas
retransmissions are protected copyrights.
d. Rebroadcasting is a protected intellectual property right whereas retransmissions are not protected
copyrights due to the must-carry rule.
29. X applied for the issuance of a preliminary injunctive order on the ground that she is entitled to the use of the
trademark on product A and its container based on her copyright and patent over the same. Can he do this?
a. Yes. These are registrable marks
b. No. These are not registrable marks
c. Yes, although its copyrightability and patentability should be registered separately
d. No. These are rights which are not interchangeable. The granting of one right will not necessarily
apply to the other rights.
30. Which of the following are not included under technology transfer arrangements under the Intellectual Property
Code?
a. the use of Windows software in businesses.
b. the secret ingredient of the KFC original recipe chicken.
c. the exact process of how to create a new and improved child-proof paint
d. the licensing of a new management program in favor of a Philippine company
31. Which of the following are patentable medicines?

a. the mere discovery of a new form or new property of a known substance which does not result in the
enhancement of the known efficacy of that substance.
b. the mere discovery of any new property or new use for a known substance.
c. the mere use of a known process resulting in a new product that employs at least one new reactant.
d. the mere use of a known process unless such known process results in a new product.
32. A files a patent application for product Z, a revolutionary computer chip which is capable of outperforming
current chips by as much as 10x. A is employed by company B, a software company. A’s job is to develop
software programs for businesses. He developed this chip during office hours and days where he was researching
for software ideas which he would use for his job. B filed its application over the same product at the day after A
filed his patent. Who owns the patent?
a. A since A filed his patent first.
b. B since A made his chip during office hours and days.
c. A since A made the chip not in the course of regular duties.
d. B since A made the chip during office hours and utilized B’s resources.
33. A is a holder of patent X. B also holds a patent over X. A trial ensued and B was declared the true owner of the
patent. What are the remedies for B?
a. Upon filing a motion in court, the court shall order for his substitution as patentee
b. the court shall order for his substitution as patentee, or at the option of the court, cancel the patent, and
award actual and other damages in his favor if warranted by the circumstances,
c. the court shall order for his substitution as patentee, or at the option of the true inventor, cancel the
patent, and award actual and other damages in his favor if warranted by the circumstances
d. Upon a petition by the true inventor, cancel the patent, and award actual and other damages in his favor if
warranted by the circumstances.
34. Which of the following requisites are not included for an invention to be patentable?
a. It is New, it has an inventive step, and it does not form part of a prior art
b. It is New, it has an inventive step, and it is industrially applicable
c. It is new, it does not form part of a prior art and it is registered
d. None of the foregoing
35. A Scientist has managed to create a new breed of pigs by altering its DNA of which such has never existed prior
to such act by the scientist. Is the pig breed patentable?
a. No. Since it is immoral
b. Yes. Since the pig was created purely by the hand of the scientist
c. No. Since animal breeds are not patentable
d. Yes. Although the animal breeds are not patentable, the essential micro-biological process is patentable
36. A filed a patent in Malaysia over his invention on January 8, 2021. He subsequently filed a patent in the
Philippine IPO on March 30, 2021, expressly claiming priority. Apparently, B has also filed a patent pertaining to
the same invention on February 18, 2021. Who has priority right over the patent?
a. A since he filed his patent in Malaysia earlier and also he has claimed priority expressly.
b. B since a patent application in a foreign country has no effect here in the Philippines
c. A since he filed his patent in Malaysia earlier and also he has claimed priority expressly, and it is
within 12 months from the initial registration in Malaysia.
d. B since he was the first one to file his registration in the Philippines.
37. A was able to invent a new type of vehicle. However, B was able to register the invention first although it was
clearly A who was the true inventor. What remedy may A avail of?
a. He will file a civil case of patent infringement
b. He can file for cancellation of patent plus damages
c. He can file for the substitution as the real patentee
d. Both A and C
38. When a device appropriates a prior invention by incorporating its innovative concept and, although with some
modification and change, performs substantially the same function in substantially the same way to achieve
substantially the same result, what test should be applied?
a. Literal infringement test
b. Denicola test
c. Doctrine of Equivalents test
d. Fair Use test
39. A utility model lasts for:

a. 20years non-renewable
b. 5 years, renewable for another 2 consecutive terms.
c. 7 years, renewable for another 2 consecutive terms.
d. 7 years non-renewable
40. Which of the following types of names confer the greatest chance of being a valid trademark?
a. Generic
b. Descriptive
c. Suggestive
d. Arbitrary/Fanciful
41. Businessman A puts up a sari-sari store named “Andongs”. B also puts up a sari-sari store named “Andongs” a
month later. Can A filed against B an infringement case?
a. Yes. A can file an infringement case against B for unlawfully using his tradename.
b. No. He has not registered his tradename.
c. Yes. This is a case of unfair competition.
d. No. He has not registered his trademark.
42. When testing whether the likelihood of deception has occurred, at what point of a transaction do we consider such
likelihood?
a. It must always be used; failure to use it for any reason will forfeit the use of such mark.
b. When the trademark owner is lacking in funds due to slow sales.
c. When the trademark owner has already registered his mark with the IPO
d. When the cause of such non-use is due to reasons independent of the will of the trademark owner.
43. Suppose an author published a book describing a new method of book-keeping, which of the following statements
is true?
a. The author has a copyright over the book as well as the method described in his book; thus, he is able to
preclude others from only copying the book as well as preclude others from employing the method as
described in the book without his permission.
b. The author has an exclusive right to the method described in the book.
c. The extent of the author’s copyright is limited to him being able to prevent third persons from
copying portions of his work; he is unable to prevent third persons from employing or describing
the method discussed in such book.
d. The extent of the copyright extends to the idea itself, not merely the expression
44. Unilevel Corporation asked your legal advice regarding their plan to use a trademark with the words “SWEET
CANDY” However, there is an existing and registered trademark using the words “TWEET CANDY” Which of
the following presents the correct legal principle?
a. The firm must abandon the plan because another company uses the trademark Tweet Candy and
there is a danger of a suit for infringement. The words Sweet and Tweet are almost similar in sound
and they can confuse or mislead the public.
b. They can use the SWEET CANDY as long as there will be a very different packaging and flavors so as
not to mislead the public.
c. Unilevel is a well-known company and their products are patronized country-wide, they can use the
trademark SWEET CANDY because TWEET CANDY is owned by a small-time company whose market
is within Luzon only.
45. Under the Intellectual Property Code, which of the following statements regarding a utility model patent is true?
a. Its term is seven (7) years from the grant of the patent without possibility of renewal.
b. The requirements of novelty, non-obviousness and utility must all be strictly complied with.
c. It may be granted to an industrial product which is of practical use even if it is not possessed of the
quality of invention.
46. Under the Intellectual Property Code, which of the following statements regarding an industrial design patent is
false?
a. Functional and technical design are not considered in the grant of industrial design patent
b. Its term is 5 years from the grant of the patent and renewable for two more periods of 5 years each
c. Ornamentation is an essential requirement for the grant of an industrial design patent.
47. Which of the following acts constitutes infringement?

a. The making, using, offering for sale, selling or importing a patented product or a product obtained
directly or indirectly from a patented process.
b. The using of a patented process without the authorization of the patentee.
c. Either A or B
d. Neither A nor B
48. Under the Intellectual Property Code, which of the following statements regarding infringement of patent is false?
a. Licensees of patents may file petitions for opposition or cancellation of patents.
b. An infringing product or process must contain each and every essential element of the claim.
c. An infringer of a patent shall be criminally liable if the infringement is repeated by him or by anyone in
connivance with him after finality of judgment in court against him.
49. Under the Intellectual Property Code, which of the following statements relative to marks is false?
a. A service mark must be registered in order to sue for infringement.
b. A mark cannot be registered both as a trademark and a tradename.
c. A registrable trademark may consist solely of a symbol with no word or words.
50. When is a declaration of actual use required following registration?

a. A declaration of actual use with evidence thereof shall filed within the first three (3) years from the filing
date of the application.
b. A declaration of actual use with evidence thereof, or of non-use with valid reasons, shall be filed within
one (1) year from the fifth (5th) anniversary of the registration date.
c. Both A and B
d. Neither A nor B
51. Under the Intellectual Property Code, which of the following cases will result into the cancellation of a mark?
a. Lack of funds.
b. Abandonment due to government order.
c. Abandonment due to voluntary cessation of business operations.
52. Which of the following is most likely to be allowed registration under the Intellectual Property Code?
a. A mark that merely describes the product.
b. A mark consisting of the official flag of Canada.
c. A mark for sandals that is identical to an internationally and locally well-known mark for
petroleum products.
d. A mark consisting of the portrait of a deceased President of the Philippines without the consent of the
living widow.
53. Which of the following marks is most likely to be accorded exclusive registration in accordance with intellectual
property laws?
a. The trademark "SHINEE" for floor wax.
b. The trademark "RHEUMAPAS" for medicated plaster.
c. The tradename "ROPE FACTORY,INC." for manufacturer of ropes and strings.
d. The trademark "INSTAGLUE" for adhesive glue that has been manufactured and sold in the Philippines
for three (3) years now.
54. Which of the following marks can be registered in the Philippines in accordance with our laws on intellectual
property?
a. A trademark application for milk which is well-known in Japan that is similar to a locally well-known
mark registered in the Philippines .
b. A trademark application for perfume that is similar to an internationally and locally well- known
trademark for cologne registered in the Philippines.
c. A trademark application for socks that is similar to an internationally and locally well- known trademark
for handkerchiefs not registered in the Philippines.
55. One of these statements relative to the ownership of patent is false.

a. The patent belongs to the inventor, his heirs, or assigns.
b. The person who commissioned a work will own the patent.
c. When two or more persons jointly make an invention, the patent belongs to them jointly.
d. Even if the contract provides otherwise, the person who commissioned a work will own the patent.
56. Which of the following cannot be patented?

a. Anything which is not contrary to public order or morality.
b. Aesthetic creations.
c. An improvement in mascots used in restaurants by the use of a device to move the facial parts of the
mascot.
d. Plant variates of animal breeds or essentially biological process for the production of plant and animals.
57. Which of the following works is not copyrightable?

a. Drawings
b. Computer program
c. Philippine Financial Reporting Standards
d. Lectures or sermons
58. Which of the following statements relative to infringement and unfair competition is correct?
a. Infringement of trademark is the act of passing off one’s goods as those of another.
b. Fraudulent intent is essential in an action for unfair competition.
c. Registration of the tradename is necessary in an action for infringement of tradename.
59. Which of the following works is considered as derivative work that is entitled to copyright protection?
a. Dramatization
b. Translation
c. Both A and B
d. Neither A nor B
60. Which of the following matters are accorded copyright protection?

a. Photographs taken by a reported of a sexy movie star.
b. News about the assassination of a Senator.
c. Illustration of playing a board game.
d. Civil Code of the Philippines.
61. Which of the following acts constitutes infringement of copyright?
a. Private performance of the work.
b. Inclusion of work by way of illustration for teaching purposes.
c. Both A and B
d. Neither A nor B
62. X is the proprietor and operator of a modest, air-conditioned coffee shop in the city. To further provide a relaxing
mood inside her establishment, he installed a music system whereby the songs from FM radio stations are aired.
One day Y, a well-known rock composer, came to X’s place for some coffee. He then heard several of his songs
played over the radio. Y sued X for copyright infringement over his songs played on air without his consent.
Which of the following statements is correct?
a. X is liable for copyright infringement because he violated Y’s economic right of transmission.
b. X is not liable for copyright infringement because he had no way of knowing what songs would be
aired by the radio stations.
c. X is liable for copyright infringement because he violated Y’s economic right of public performance.
d. X is liable for copyright infringement because he violated Y’s economic right of distribution.
63. Who among the following persons committed direct infringement of copyright?
a. Person who materially contributes to the infringement committed by another with knowledge of the
infringing act.
b. Mall owner or operator who exercises control over his stall owners who are selling pirated copies of
copyrighted works.
c. Both A and B
d. Neither A nor B
64. X is an artist who has found a way to earn a decent living out of her artistic imagination. She printed all her
created, original designs on T-shirts, blouses and jackets, and sold them to the public. Y imitated some of the X’s
designs and also printed them on scarfs and neckties. X sued Y for infringement of copyright damages. Will the
infringement suit prosper?
a. Yes, because the designs on the clothes are works of applied art.
b. No, because designs are ideas which are not accorded copyright protection.
c. No, because clothes perform utilitarian function which belong to the field of patent.
d. No, because t-shirts, blouses and jackets are separate and distinct from scars and neckties.
65. X, Y, and Z are songwriters. For a particular composition, X’s contribution consisted of the idea of a love affair
that ended in the tragic death of the lovers. Y supplied the melody and Z provided the lyrics to the song. Which of
the following statements best describes the legal relationship of the parties for purposes of copyright?
a. Only X is the author who is entitled to copyright protection.
b. X, Y, and Z are the joint authors who are entitled to copyright protection.
c. Only Y and Z are the joint authors who are entitled to copyright protection.
d. X, Y, and Z are each entitled to copyright protection over their separate contributions.
66. When may the Anti- Money Laundering Council (AMLC) perform an inquiry into deposits of a person?
a. For purposes of determining his liabilities.
b. To determine his assets with proper court order.
c. Upon order of the court when there is probable cause that the deposits are related to crime of
unlawful activities defined in R.A. 9194
d. When there is written consent of the depositor.
67. Which of the following is a covered person, therefore, required to report to AMLC reportable or suspicious
transactions?
a. Educational institution
b. Casinos
c. Mining companies
d. Transportation companies
68. Anti-Money Laundering Council refers to the financial intelligence unit of the Republic of the Philippines which
is the government agency tasked to implement the AMLA. Which of the following statements regarding the
composition of AMLC is incorrect?
a. The chairperson of AMLC is the BSP governor.
b. The Insurance Commissioner is a member of AMLC.
c. The SEC Chairperson is a member of AMLC.
d. The BIR Commissioner is a member of AMLC.
69. What is the amount of covered transaction in so far as jewelry dealers are concerned for purposes of reporting to
Anti-Money Laundering Council?
a. A transaction exceeding P500,000
b. A transaction exceeding P1,000,000
c. A transaction exceeding P5,000,000
d. A transaction exceeding P100,000
70. Which of the following companies is exempted by Anti Money Laundering Law from reporting reportable and
suspicious transactions to Anti-Money Laundering Council?
a. Casino
b. Remittance companies
c. Auditing firm rendering assurance engagement
d. Holding companies
71. The Anti-Money Laundering Law is a law that seeks to prevent money laundering activities by providing for more
transparency in the Philippine Financial System, hence the following institutions are covered by the law, except:
a. Bank and any financial institutions;
b. Pawnshops;
c. Casino operators;
72. For purposes of determining violation of the provisions of Anti-Money Laundering Law, a transaction is
considered as a "Suspicious Transaction" with "Covered Institutions" regardless of the amount involved, where
which the following circumstances exist/s?
a. the amount involved is not commensurate with the client's business or financial capacity;
b. there is no underlying legal or trade obligation, purpose or economic justification;
c. client is not properly identified;
73. Under the Anti-Money Laundering Law, a covered institution is required to maintain a system of verifying the
true identity of their clients as well as persons purporting to act on behalf of
a. Those doing business with such clients.
b. Unknown principals.
c. The covered institution.
d. Such clients.
74. Identify the stage in the money laundering process where funds are being constantly moved or re characterized to
conceal their origins. This stage is known as:
a. Placement
b. Layering
c. Integration
75. At which of the three stages of money laundering is it generally easiest to detect money laundering activity?
a. Placement
b. Layering
c. Integration
76. Which of the following statement is correct about a single money laundering technique?
a. Can combine elements of placement, layering and integration.
b. Will use either placement, layering or integration, but will not combine them.
c. Either A or B
77. Which of the following statement is correct about Terrorism financing in relations to Anti-Money Laundering:
a. Mostly involves conversion of illegal money into legal funds and assets, similar to traditional money
laundering
b. Involves moving legitimate funds into the control of terrorist organizations. This is sometimes
known as ‘reverse money laundering’
c. Both A and B
d. Neither A nor B
78. Rowena Rocket is a politician raising funds for an upcoming election. She regularly banks at Watermelon Bank
and opens an account in which to place campaign contributions. The contributions are expected to reach about
P10 million. Rowena Rocket’s private bankers at Watermelon Bank are aware of her profession and the purposes
of the account. Since she is an old customer and has a solid reputation, they waive many of the checks to verify
the funds. What money laundering risks, if any, does Watermelon Bank face in this situation?
a. Reputational, operational, legal and concentration risk.
b. Reputational and operational risk.
c. Reputational, operational and legal risk

I. Through laundering activity, criminals can transport illegally acquired funds to different countries without
getting caught.
II. Criminals want to protect the money that they have earned through criminal activities.
III. Criminals try to steal money from the bank that they use for money laundering activities.
IV. Criminals want to invest their money in legal activities.
Based on the foregoing, why do criminals launder money?

a. I, II, and III
b. I, II, and IV
c. II, III, and IV
d. I, II, III, and IV
80. Some institutions may be used by criminals to transfer and hide illegal wealth. The institutions are often located
in countries with well-developed secrecy laws and attractive tax structures. These institutions are called:
a. Offshore banks
b. Trusts
c. Shell companies
d. Front companies
81. Some legal entities create a layer of anonymity between assets and funds and the individuals with interests in
those assets or funds. Generally, these entities exist solely on paper although they are often represented by the
owners to be actual, operational businesses. These entities are called:
a. Offshore banks
b. Trusts
c. Shell companies
d. Front companies
82. Legal devices can be used to set up an entity to segregate assets or funds managed by an individual or institution
for the benefit of a specified beneficiary. The deed establishing the entity does not necessarily name the
beneficiary but this person can control the entity's assets and funds. Such entities are called:
a. Offshore banks
b. Trusts
c. Shell companies
d. Front companies

I. Reviewing customer type (individual, company, trust, etc.)
II. Reviewing type of designated service utilized
III. Reviewing any dealings with foreign jurisdictions
Based on the foregoing statements, the different ways to assess customer relationships for money laundering or
terrorism financing risks includes:
a. I only
b. I and II only
c. II and III only
d. I, II, and III
84. One type of risk is the risk of failed internal control processes, people and systems caused by external risk factors
such as money laundering activities. If a bank is unable to manage this risk effectively, it can result in exposure to
legal action, reputational risks and financial losses. This type of risk is known as:
a. Operational risk
b. Legal risk
c. Concentration risk
d. Reputational risk
85. The penalty risk of leaving your business open to law suits from stakeholders because of failed internal
procedures, such as the Know Your Customer (KYC) policy could be fines, criminal liabilities or special
penalties. The cost of a legal battle can be extremely high but even more detrimental are the implications for the
reputation of an institution that it is unable to protect itself from litigation because of a failure to identify
customers and their businesses. This type of risk is:
a. Operational risk
b. Legal risk
c. Concentration risk
d. Reputational risk
86. Penny Bank has a customer who is a lawyer. The lawyer maintains two accounts at the bank. One is his own
personal transacting account and the second is an account for a businessman in a foreign country. This overseas
businessman regularly deposits large sums of money in the second account. Simultaneously, he places 1% of the
total funds in his lawyer’s account at Penny Bank. This activity has been taking place for just over a year. Which
of the following money laundering risks does Penny Bank face?
a. Reputational risk
b. Legal risk
c. Both A and B
d. Neither A nor B
87. Covered persons shall report to the AMLC all covered transactions and suspicious transactions within
a. five (5) working days, unless the AMLC prescribes a different period not exceeding 15 working
days from the occurrence thereof.
b. Seven (7) working days, unless the AMLC prescribes a different period not exceeding 15 working days
from the occurrence thereof.
c. ten (10) working days, unless the AMLC prescribes a different period not exceeding 15 working days
d. fifteen (15) working days, unless the AMLC prescribes a different period not exceeding 30 working days
88. Under the Anti-Money Laundering Act (AMLA), No administrative criminal or civil proceedings shall lie against
any person for having made a covered transaction report in the regular performance of his duties and in good
faith, whether or not such reporting results in any criminal prosecution under the AMLA or any other Philippine
law. This is known as:
a. Special Civil Action
b. Safe Harbor Provision
c. Due Diligence Provision
d. Transitory Provision
89. Under the Anti-Money Laundering Act (AMLA), a depositor’s account may be frozen by:
a. The bank when the account is the subject of a suspicious or covered transaction report.
b. The Anti-Money Laundering Council (AMLC) when the account belongs to a person already convicted of
money laundering.
c. The Regional Trial Court (RTC) upon ex parte motion by the AMLC, in a criminal prosecution for
money laundering pending before it.
90. For Suspicious transactions, what is the term referring to the date of determination of the suspicious nature of the
transaction?
a. Discovery date
b. Determinable date
c. Occurrence
91. As a preventive measures for money laundering, covered persons and suspicious transaction reports shall be
prohibit the following, except:
a. Anonymous Accounts
b. Non-checking numbered accounts
c. Accounts under Fictitious Names
92. Which of the following statements presents the incorrect legal principle?
a. Money laundering is committed by any person who knows that any monetary instrument or property
represents, involves, or relates to the proceeds of any unlawful activity
b. Covered persons shall maintain customers' account only in the true and full name of the account owner or
holder. Anonymous accounts, accounts under fictitious names, and all other accounts shall be absolutely
prohibited.
c. Jewelry dealers, dealers in precious metals, and dealers in precious stones for transactions in excess
of P10,000,000 is covered to report to AMLC
d. Land Registration Authority and all of its Register of Deeds on all real estate transaction with price
exceeding P500.000 is covered to report to AMLC
93. Which of the following “covered persons” under the AMLA, is supervised or regulated by the Insurance
Commission?
a. Investment houses.
b. Trust entities
c. Holding companies
d. Pawnshops
94. It refers to those accounts and funds and sources of which originated from and/or materially-linked to the
monetary instruments or properties subject of the freeze order or an order of inquiry
a. “In trust for” accounts
b. Related accounts
c. Anonymous accounts
d. Materiality-linked accounts
95. Under the Data Privacy Act, it refers to any natural or juridical person qualified to act as such under this act to
whom a personal information controller may outsource the processing of personal data pertaining to a data
subject.
a. Personal information controller
b. Personal information processor
c. Personal information manager
96. According to the Data Privacy Act of 2012, which of the following is the definition of “processing of personal
data”?
a. Any operation that can be performed on personal data except erasing and destroying.
b. Any operation that can be performed on personal data.
c. Only operations in which the data is being shared on social media or transferred by email or otherwise
through the internet.
d. Only operations in which the personal data is used for the purposes for which it was collected.
97. “Informed consent” is a lawful basis to process personal data under the Data Privacy Act of 2012. The purpose of
the processing for which consent is given should be documented. At what time in the process should the data
subject’s consent be obtained?
a. Before the personal data is processed.
b. Before the personal data is published or disseminated.
c. Before the purpose specification is published or disseminated.
d. After the purpose
98. An electronic data message or electronic document is any electronic file providing information that is generated,
sent, received, or stored by electronic, optical or similar means. Which of the following is an example of
electronic file providing information that is “sent or received by electronic means”?
a. Short message service (SMS)
b. Word processing.
c. Telegram
d. Electronic mail
99. The Data Privacy Act of 2012 shall apply to:

a. Processing of all types of personal information
b. Information about any individual who is or was an officer or employee of a government institution that
relates to the position or functions of the individual
c. Information about an individual who is or was performing service under contract for a government
institution that relates to the services performed
d. Personal information processed for journalistic, artistic, literary or research purposes
100. The following are protected when it comes to their respective publication under the Data Privacy Act of 2012,
which is the exception?
a. Publishers
b. Editors
c. Business personnel
d. Duly accredited reporters
101. Which of the following terms is not within the scope of Data Privacy Act?
a. Third party
b. Profiling
c. Intermediary
d. Security incident
102. The following are within the extraterritorial application of the Data Privacy Act of 2012, except:
a. The act, practice or processing relates to personal information about a Philippine citizen
b. The act, practice or processing relates to personal information about a Philippine resident
c. The entity has a link with the Philippines, and the entity is processing personal information in the
Philippines
d. An entity that is a branch in foreign countries which does not carry on a business in the Philippines
103. The following are the functions of the National Privacy Commission under the Data Privacy Act, except:
a. Ensure compliance of personal information controllers with the provisions of the electronic
commerce act
b. Publish on a regular basis a guide to all laws relating to data protection issue cease and desist orders upon
finding that the processing will be detrimental to national security and public interest
c. Publish a compilation of agency system of records and notices, including index and other finding aids
104. Under the Data Privacy Act of 2012, Personal information shall relate among the following, except:
a. Collected for specified and legitimate purposes
b. Processed fairly and lawfully
c. Adequate and excessive in relation to the purposes for which they are collected and processed
d. Retained only for as long as necessary for the fulfillment of the purposes for which the data was obtained
105. Under the Data Privacy Act of 2012, the following are included under the criteria for the lawful processing of
personal information, which is the exception?
a. The data subject has given his or her consent
b. The processing of personal information is necessary and is related to the fulfillment of a contract with the
data subject
c. The processing is necessary for compliance with an illegal obligation to which the personal
information controller is subject
d. The processing is necessary to protect vitally important interests of the data subject, including life and
health
106. Under the Data Privacy Act of 2012, it refers to any freely given, specific, informed indication of will, whereby
the data subject agrees to the collection and processing of personal information about and/or relating to him or
her.
a. Offer of the data subject
b. Consent of the data subject
c. Acceptance of the data subject
d. Objection of the data subject
107. Which of the following will be considered privileged information?

a. Health records of the Data Subject
b. A Data Subjects Social Security Number
c. Disclosure of the Data Subject in a tax return
d. Statements made by a Data Subject to his priest
108. Which of the following rules on processing of sensitive information and privileged information is allowed under
the Data Privacy Act of 2012?
a. The data subject has given his or her consent, specific to the purpose after the processing
b. The processing of the same is provided for by existing laws and regulations
c. The processing is necessary to protect the life and health of the data subject
d. The processing is necessary for purposes of medical treatment
109. Which of the following is not considered as sensitive personal information?
a. Information about a individual’s health, education, genetic or sexual life of a person, or to any proceeding
for any offense committed or alleged to have been committed by such person, the disposal of such
proceedings, or the sentence of any court in such proceedings.
b. Information about the platform of a candidate for national elective position that is discussed in a
public debate televised in national television network.
c. Information issued by government agencies peculiar to an individual which includes, but not limited to,
social security numbers, previous or current health records, licenses or its denials, suspension or
revocation, and tax returns.
d. Information specifically established by an executive order or an act of Congress to be kept classified.
110. If a personal information controller subcontracted the processing of information, his act shall be deemed as:
a. Automatically illegal
b. Automatically immoral
c. Automatically unconscionable
d. Acceptable
111. Which of the following information is inadmissible to any proceedings?

a. Privileged information
b. Information in newspapers
c. Information in government publications
d. Information in research articles
112. The following are the rights of a data subject, except:

a. Be informed whether personal information pertaining to him or her shall be, are being or have been
processed
b. Furnished the information for the purposes for which they are being or are to be processed
c. Reasonable access to, upon demand sources from which personal information were obtained
d. Dispute the accuracy in the personal information and have the personal information controller
change it immediately.
113. Which of the following has the right to obtain from the personal information controller a copy of data
undergoing processing in an electronic structured format?
a. Data subject
b. Customer
c. User of information
d. Interested party
114. The determination of the appropriate level of security of the personal information controller takes into account
the following, which is the exception?
a. Nature of the personal information to be protected
b. Payment provided by the data subject
c. Risks represented by the processing
d. Size of the organization and complexity of its operations
115. It is when the data privacy act shall be liberally interpreted in a manner mindful of the rights and interests of the
individual about whom personal information is processed.
a. If the interpretation is certain
b. If the interpretation is doubtful
c. If the data subject demands to do so
d. If the consumer demands to do so
116. Restitution for any aggrieved party in the Data Privacy Act shall be govern by:
a. Data Privacy Act of 2012
b. Civil Code of the Philippines
c. Revised Penal Code
d. Special Penal Laws
117. Which of the following is a general principle of data privacy?

a. Personal information must be processed fairly and lawfully.
b. Personal information must be collected for specified and legitimate purposes determined and declared
before, or as soon as reasonably practicable after collection, and later processed in a way compatible with
such declared, specified and legitimate purposes only.
c. Personal information must be retained only for as long as necessary for the fulfillment of the purposes for
which the data were obtained.
118. Right to control the collection, maintenance, use, and dissemination of data about oneself is known as:
a. Privileged Communication
b. Personal Privacy
c. Informational Privacy
d. Right to access
119. It refers to the information generated, sent, received or stored by electronic, optical or similar means.
a. Electronic data message
b. Information and communications system
c. Electronic document
d. Electronic signature
120. An electronic signature on the electronic document is applicable under the following scenarios, which is the
exception?
a. A method is used to identify the party sought to be bound and to indicate said party's access to the
electronic document
b. A method is reliable and appropriate for the purpose for which the electronic document was generated or
communicated
c. It is necessary for the party sought to be bound, in or order to proceed further with the transaction, to have
executed or provided the electronic signature
d. The other party is authorized and enabled to verify the electronic signature and to make the
decision to proceed with the transaction authenticated by the another
121. When a party presumed that an electronic signature is the signature of the person to whom it correlates is deemed
to be:
a. Appropriate
b. Inappropriate
c. Negligence
d. Fraudulent
122. Under the E-Commerce Act, the following statements relates to original documents, except:
a. where the law requires information to be presented in its original form, the integrity of the information
from the time when it was first generated in its final form is evidence.
b. where the law requires information to be presented in its original form where it is required that
information be resented, that the information is capable of being displayed to the person to whom it is to
be presented.
c. the criteria for assessing integrity shall be whether the information has remained complete and
altered.
d. the standard of reliability required shall be assessed in the light of purposed for which the information
was generated.
123. Retention of an electronic data message is satisfied by retaining them in the form of an electronic data message
which relates to the following, which is the exclusion?
a. Remains accessible so as to be usable for subsequent reference
b. Retained in the format in which it was generated, sent or received
c. Retained in the format in which it was generated, sent but now on how it was received
d. Enables the identification of its originator and addressee
124. Under the E-Commerce Act, it refers to an individual who, under oath or affirmation, gives out-of-court
testimony as evidence or acts as a witness.
a. Defendant
b. Deponent
c. Accused
d. Whistleblower
125. The presumption towards on the admissibility and on the presumption of integrity is established given under this
circumstance.
a. Least of the deponent's knowledge
b. Best of the deponent's knowledge
c. Least of the court's knowledge
d. Best of the court's knowledge
126. Under the E-Commerce Act, this party is entitled to regard the electronic document received as that
which the originator intended to send
a. Process Controller
b. Originator
c. Assignee
d. Assignor
127. Electronic transactions made through networking among banks can be deemed to be consummated:
a. Upon the actual dispensing of cash
b. Upon the credit of one account and the corresponding credit to another
c. Upon the presumption of dispensing of cash
d. Upon the debit of one account and the corresponding credit to the same
128. An acknowledgement may be given by the addressee sufficient to indicate to the originator that the electronic
data message or electronic document has been received:
a. Where the originator has not stated that the effect or significance of the electronic data message
b. Where the originator has agreed with the addressee that the acknowledgement be given in a particular
form
c. Where the originator has not agreed with the addressee that the acknowledgement be given in a
particular form
d. Where the originator has stated that the effect or significance of the electronic data message
129. It occurs in an electronic message when it enters an information system outside the control of the originator.
a. Halting
b. Dispatching
c. Receiving
d. Slowing
130. This is when receipt occurs when the electronic data message or electronic document enters an information
system of the addressee.
a. If the addressee has designated an information system for the purpose of receiving electronic data
message
b. If the addressee has not designated an information system for the purpose of receiving electronic data
message
c. If the electronic data message or electronic document is sent to an information system of the addressee
that is not the designated information system
d. If the addressee has not designated an information system
131. Under the E-Commerce Act, it refers to the place where it is incorporated or otherwise legally constituted.
a. Original place of transaction
b. Appropriate place of transaction
c. Old place of residence
d. Usual place of residence
132. The access to an electronic file shall only be authorized and enforced to:
a. Any individual or entity
b. Individual or entity having legal possession
c. Individual or entity having physical possession
d. Individual or entity possessing the document
133. It refers to unauthorized access into or interference in a computer system/server or information and
communication system.
a. Piracy
b. Hacking
c. Reproduction
d. Damage
134. The interpretation of the E-Commerce Act will be given due to its international origin for the purpose of:
a. Dominance of International Law
b. Promoting uniformity
c. Observance of good faith in local trade relations
d. Minority of local chapters
135. All benefits, privileges, advantages or statutory rules established under the e-commerce act shall be enjoyed only
by the following, except:
a. Only by parties whose country origin grants advantages to Filipino citizens
b. Only by parties whose country origin grants advantages to foreign citizens
c. Only by parties whose country origin grants the same privileges
d. Only by parties whose country origin grants the same benefits
136. Which of the following principles is inconsistent with the enactment of Ease of Doing Business and Efficient
Government Service Delivery Act of 2018?
a. It is the policy of the state to establish effective practices, aimed at efficient turnaround of the delivery of
government services.
b. The state shall maintain honesty and responsibility among its public officials and employees.
c. The state recognizes the need to diminish, with appropriate training programs and institutional
policy changes
d. It is the policy of the state to promote integrity, accountability, proper management of public affairs and
public property.
137. Which of the following institutions or instrumentalities does not cover under the Ease of Doing Business and
Efficient Government Service Delivery Act of 2018?
a. Local government units
b. Private institutions
c. Government instrumentalities located abroad
d. Government-owned or controlled corporations
138. It is a single common site or location, or a single online website or portal designated for the business permit and
licensing system (BPLS) of an LGU to receive and process applications, receive payments, and issue approved
licenses, clearances, permits, or authorizations.
a. Business One Stop Shop (BOSS)
b. Business Only Scope Store (BOSS)
c. Business On Site Scheme (BOSS)
d. Business Own Set Style (BOSS)
139. It refers to the policy which states that no government officer or employee shall have any contact, in any manner,
unless strictly necessary with any applicant or requesting party concerning an application or request.
a. Zero-contact policy
b. Anti-contact policy
c. Independence policy
d. Social distancing
140. Any denial of application or request for access to government service shall be fully explained:
a. Orally
b. In writing
c. Either A or B
d. Neither A nor B
141. The following refers to revised guidelines in the issuance of business licenses, clearances, permits, certifications
or authorizations which shall are mandated to be implemented by the LGUs, which is the exception?
a. A one-stop business facilitation service, hereinafter referred to as the business one stop shop
b. To add transaction requirements, other local clearances
c. A one-stop business facilitation service, hereinafter referred to as the business one stop shop
d. Cities/municipalities are mandated to automate their business permitting and licensing system
142. This shall serve as a central system to receive applications and capture application data involving business-
related transactions, including primary and secondary licenses, and business clearances, permits, certifications, or
authorizations issued by the LGUs.
a. Philippine Business Databank
b. Information System Portal
c. Central Business Portal
d. Philippine Business Portal
143. It is used to obtain information and/or estimates of hidden costs incurred by applicants or requesting parties to
access government’s services which may include, but is not limited to, bribes and payment to fixers.
a. Report card survey
b. Application survey
c. Data sheet
d. Information system
144. The following are the functions of the anti-red tape authority (ARTA), except:
a. Implement and oversee a national policy on anti-red tape and ease of doing business
b. Implement various ease of doing business and anti-red tape reform initiatives aimed at improving
the ranking of the foreign countries
c. Enlist the assistance of the CSC, DTI and other government agencies in the implementation of its powers
and functions
d. Provide technical assistance and advisory opinions in the review of proposed national or local legislation,
regulations or procedures
145. What is the Philippines rank in world bank’s ease of doing business report in 2020?
a. 113th
b. 99th
c. 95th
146. Which of the following statements relative to BP 22 or Anti-Bouncing Checks Law is true?
a. Notice of dishonor under BP 22 may be oral or in writing.
b. Violation of BP 22 is categorized as a transitory or continuing crime.
c. Both A and B
d. Neither A nor B
147. Which of the following is not a valid defense in BP 22 as compared to estafa?

a. Lack of knowledge
b. Good faith
c. Criminal intent to defraud
d. Lack of notice of dishonor
148. What is the quantum of evidence required to sue or file a criminal case for criminal offense involving violation
of BP 22 for issuance of worthless checks?
a. Probable cause or prima facie evidence
b. Clear and convincing evidence
c. Preponderance of evidence
d. Proof beyond reasonable doubt
149. Which of the following statements regarding BP22 is false?

a. A drawer of a dishonored check may be convicted under BP 22 even if he had issued the dishonored
check for payment of pre-existing obligation
b. The constitutional guarantee that no person shall be imprisoned for non-payment of debt was held
to be valid defense if a drawer or maker who issued a dishonored check upon its presentation for
payment.
c. A drawer of a dishonored check may be convicted under BP 22 even if he had issued the
dishonored check for payment of pre-existing obligation
150. BP 22 uses the phrases “any check” and “a check” in defining the offenses sought to be punished by it. Which of
the following types of checks is not within the purview of the punitive provisions of BP 22?
a. Personal check
b. Corporate check
c. Cashier’s check
d. Accommodation check
151. The term "securities" does not include:

a. Bonds
b. Lease contracts
c. Shares of stock
d. Voting trust certificate

a. A "dealer" is a person who is casually engaged in the buying and selling of securities for his own
account.
b. A "broker" is a person who is engaged in the buying and selling of securities for the account of others.
c. An "associated person of a broker or dealer" does not include his salesmen performing non-discretionary
functions.
d. An "associated person of a broker or dealer" does not include the employees of the broker or dealer whose
functions are solely clerical or ministerial.
153. One of the following securities must be registered with the SEC:
a. Bank's own shares of stock
b. Securities issued or guaranteed by the Philippine government
c. Certificates issued by a trustee in bankruptcy duly approved by the proper adjudicatory body
154. The sale of securities requires SEC registration where the qualified buyer is a:
a. Bank
b. Insurance company
c. Investment company

a. All "commodity future contracts" are gambling and against public policy.
b. A "pre-need plan" includes life, pension, education, and interment plans.
c. A "tender offer" is an offer to acquire at least 15% of any class of any equity security of a listed
corporation by filing a declaration to that effect with the SEC.
156. An "insider trading" is unlawful where:

a. The insider shows that the information is not material non-public information.
b. The insider communicates material nonpublic information about the issuer or the security to any
person, knowing or believing that such person will buy or sell the security of the issuer by reason of
the information.
c. The insider proves that the information was not gained from his relationship with the issuer of the
securities.
d. The insider has reason to believe that the other party who is identified is also in possession of the
information.
157. Which of the following persons is exempted from registration with the SEC before he engages in the business of
buying and selling of securities in the Philippines?
a. Brokers and dealers
b. Salesmen of broker or dealer
c. Associated persons of broker or dealer
158. An "Exchange" is an organized marketplace or facility that brings together buyers and sellers and executes trades
of securities and/or commodities. Which of the following is uncharacteristic of an "Exchange?"
a. It may be incorporated as a stock or non-stock entity.
b. The brokers in the board of the Exchange shall comprise of not more than 49% of such board.
c. It must be engaged solely in the business of operating an exchange, unless exempted under the rules and
regulations adopted by the SEC.
159. Which of the following is uncharacteristic of rehabilitation proceedings on corporations, partnerships and
associations under the Rules of Procedure on Corporate Rehabilitation?
a. Proceedings are in rem.
b. Proceedings are non-adversarial.
c. Proceedings are summary in nature.
d. Jurisdiction is acquired upon commencement of the proceedings.
160. Which of the following pleadings or motions is permitted in corporate rehabilitation proceedings?
a. Intervention
b. Motion to dismiss
c. Third-party complaint
161. Which of the following is a characteristic of a "stay order?"

a. The debtor cannot dispose his properties in the ordinary course of business.
b. The enforcement of claims against the debtor's guarantors and persons jointly liable with the
debtor is also stayed.
c. The suppliers may discontinue supplying goods or services to the debtor even if they are being paid after
the issuance of the stay order.
162. Which of the following claims is covered by the "stay order?"
a. Claims against trust receipts
b. Claims against letters of credit
c. Foreclosure by the creditor of property belonging to the debtor under corporate rehabilitation
163. Which of the following liabilities is prohibited from being paid by the debtor during its rehabilitation?
a. Payment of secured loan where security is about to be foreclosed.
b. Payment to suppliers for goods or services supplied after issuance of the stay order.
c. Payment in full of the fees of the Rehabilitation Receiver and all persons employed by him.
d. Payment of new loans obtained for the rehabilitation of the debtor with prior court approval.
164. The stay order may not be terminated or modified, or the creditor's claim relieved from its coverage where:
a. A creditor does not have adequate protection over the property securing its claim.
b. Any allegation in the petition, its attachments or verification has ceased to be true.
c. The debtor's secured obligation is less than the fair market value of the property subject of the stay
order.
d. The property covered by the stay order is not essential or necessary to the rehabilitation and the creditor's
failure to enforce its claim will cause more damage to the creditor than to the debtor.
165. Which of the following circumstances will qualify a person to be appointed as a Rehabilitation Receiver?
a. He is a creditor of the debtor.
b. He was employed as the debtor's accountant until his resignation three (3) years prior to the filing
of the petition for rehabilitation.
c. He is engaged in a business that competes with the debtor.
166. One of the following is not a legal consequence of the approval of the rehabilitation plan by the court:
a. Contracts and other arrangements between the debtor and its creditors shall be interpreted as continuing to
apply to the extent that they do not conflict with the provisions of the plan.
b. Any compromises on amounts or rescheduling of timing of payments by the debtor shall be binding on
creditors regardless of whether or not the plan is successfully implemented.
c. The plan and its provisions shall be binding upon the debtor and all persons who may be affected
thereby, excluding the creditors who have not participated in the proceedings, or opposed the plan,
or their claims have not been scheduled.
d. The debtor shall comply with the provisions of the plan and shall take all actions necessary to carry out
the plan.
167. Which of the following is a characteristic of a pre-negotiated rehabilitation?

a. It must be filed jointly by the debtor and any of its creditors.
b. It requires the approval of the creditors holding at least 3/4 of the total liabilities of the debtor.
c. It requires the approval of the secured creditors and unsecured creditors holding at least 50% of the total
secured claims and total unsecured claims, respectively.
168. One of the following is an improper venue for filing the petition for rehabilitation:
a. RTC which has jurisdiction over the principal office of the debtor as specified in the articles of
incorporation or partnership.
b. RTC of the city or municipality where the head office is located if the principal office is registered with
the SEC as Metro Manila.
c. RTC which has jurisdiction over the principal office of any of the member companies in case of a
joint petition filed by a group of companies.
169. It is a type of cooperative that is organized for the primary purpose of providing a wide range of financial
services to cooperatives and their members.
a. Cooperative bank.
b. Credit cooperative.
c. Financial service cooperative.
d. Multi-purpose cooperative.
170. Which of the following statements relative to the registration of cooperatives is false?
a. A Certificate of registration shall be conclusive evidence that the cooperative is duly registered.
b. In case of a denial of the application for registration, the cooperative has to file another application
for registration.
c. A cooperative acquires juridical personality from the date CDA issues a Certificate of Registration under
its official seal.
d. Application for registration is deemed approved if CDA failed to act on it within a period of sixty (60)
days from the date of filing.
171. It is a principle expressly embodied in the Declaration of Policy of RA No. 9520, otherwise known as the
Cooperative Law of 2008, where the state recognizes the importance of the cooperative sector in initiating and
regulating within its own ranks the promotion and organizations, training and research, audit and support services
relating to cooperatives with government assistance where necessary.
a. Equity
b. Proportionality
c. Subsidiarity
d. Sustainability
172. The following statements relative to liquidation and dissolution of cooperatives are presented to you for
evaluation:
I. Upon the dissolution of the cooperative, the reserve fund shall be distributed among the members.
II. All subsidies, donations, legacies, grants, aids and other assistance from any local or foreign
institutions whether public or private shall be donated to the community where the cooperative
operates.
III. Payment of creditors shall be in accordance with the contract upon which it is based and the provision
of the new Civil Code on the Preference and Concurrence of Credits.
What is the correct evaluation?

a. All statements are false
b. Statement I and II are false; Statement III is true
c. Statement I and II are true; Statement III is false
d. All statements are true
173. Which of the following statements relative to the Board of Directors of a cooperative is false?
a. Number of directors must not be less than five (5) nor more than fifteen (15).
b. Only member of a cooperative who has the right to vote is eligible for election as a director.
c. The term of office of directors shall be fixed in the by-laws but not exceeding a term of two (2) years.
d. Any person engaged in business is similar to that of the cooperative, is qualified from election as a
director of said cooperative.
174. Notwithstanding the provisions in the Cooperative Code to the contrary, the quorum requirement for
amendments of Articles of Cooperation and by-laws of Cooperative Banks shall be
a. Two-thirds (2/3) vote of all members with voting rights, present and constituting a quorum.
b. twenty percent (20%) of all the members in good standing, present and constituting a quorum.
c. three-fourths (3/4) vote of all the members with voting rights, present and constituting a quorum.
d. One-half (1/2) plus one of the number of voting shares of all the members in good standing.
175. A, B, C, D, E, F and G, are the members of the board of directors of cooperative. Unfortunately, E, F and G
resigned for personal reasons. How shall the vacancies be filled up?
a. By the majority vote of the general assembly in a regular or special meeting duly called for the purpose.
b. Vacancies shall be filled-up by the vote of at least a majority of the remaining directors, if still
constituting a quorum.
c. Vacancies shall be filled-up by the vote of all the remaining directors in a special meeting.
d. By the vote of at least ¾ of all the members with voting rights.
176. All corporations registered with the Cooperative Development Authority (CDA) shall be required to submit
annually a Cooperative Annual Progress Report (CAPR) with supporting documents with the CDA. Which of the
following is not a supporting document to be attached to the CAPR?
a. Audited financial statements.
b. List of officers and trainings undertaken/completed.
c. Report on the total compensation of each of the directors and officers.
d. Social Audit report involving its program of activities pursuant to its socio-civic goals.
173. The following statements relative to merger or consolidation of cooperatives are presented to you for evaluation:
I. Cooperatives belonging to the different category can be parties to the merger of consolidation.
II. The affirmative vote of at least three-fourths (3/4) of all members with voting rights, present and
constituting a quorum from each of the constituent cooperatives, at separate general representative
assembly meetings shall be necessary for the approval of the Plan of Merger of Consolidation.
III. In case of merger or consolidation of the cooperatives, the constituent cooperatives shall
become a single cooperative which, in case of merger, shall be the survivor cooperative,
and in case of consolidation, shall be the consolidated cooperative.
What is the correct evaluation?

a. All statements are false
b. All statements are true
c. Statement I is true; Statement II and III are false
d. Statement I is false; Statement II and III are true
174. Which member in a cooperative may invest in the common stocks of the cooperative?
a. Associate member
b. Regular member
c. Provisionary member
d. Temporary member
175. Financial cooperatives are supervised by

a. Bangko Sentral ng Pilipinas
b. Cooperative Development Authority
c. Bangko Sentral ng Pilipinas for specific transactions
d. Cooperative Development Authority for specific transactions
176. The CDA will automatically dissolve a cooperative even without revoking the authority when (choose the
exception)
a. Failure to meet the required minimum number of members.
b. It has not carried on its business for two consecutive years.
c. Having obtained its registration by fraud.
d. Existing for an illegal purpose.

I. Credit Cooperative is one that promotes and undertakes savings and lending services among its members,
which generates a common pool of funds in order to provide financial assistance to its members for
productive and provident purposes and whose operations are subject primarily to the regulatory powers
and supervision of the CDA.
II. Financial Service Cooperative is one organized for the primary purpose of engaging in savings and credit
services and other financial services whose operations are subject primarily to the regulatory powers and
supervision of the CDA.
III. Cooperative Bank is one organized for the primary purpose of providing a wide range of financial
services to cooperatives and their members whose operations are subject primarily to the regulatory
powers and supervision of the CDA.
IV. Insurance Cooperative is one engaged in the business of insuring life and poverty of cooperatives and
their members whose operations are subject primarily to the regulatory powers and supervision of the
CDA.
Based on the foregoing, which of the statement is/are true?

a. I only
b. I, II, and III
c. I and II
d. III and IV
178. What is the required reserve fund for an ordinary cooperative?

a. 50%
b. 10%
c. 7%
d. 3%
179. Which of the following is not a characteristic of Financial Service Cooperative?
a. The Net Worth of the Financial Service Cooperate shall, at all times, not be less than an amount equal to
eight percent (8%) of its risk assets.
b. Financial Service Cooperative shall maintain a Liquidity Reserve Fund that will be restricted in nature
equivalent to at least two percent (2%) of their savings and time deposit liabilities.
c. Only those cooperatives with minimum Paid-up capital of at least Ten Million pesos (P10,000,000.00)
shall qualify to register as Financial Service Cooperative.
d. An Elective Officer may be removed by 2/3 vote of the regular members present and constituting a
quorum in a regular or special general assembly meeting called for the purpose.
180. It shall refer to a cooperative whose membership are in large number and geographically scattered/distributed by
reason of geographical location, work shift or other similar conditions making it impossible and difficult to
conduct their general assembly meeting.
a. Distributed membership
b. Scattered membership
c. Numerous and dispersed membership
d. Geographical membership
181. Which of the following statements is true?

a. Financial service cooperative is one organized for the primary purpose of providing a wide range of
financial cooperatives and their members.
b. Cooperative bank is one organized for the primary purpose of engaging in savings and credit services and
other financial services.
c. Credit cooperative is one that promotes and undertakes savings and lending services among its
members.
d. All of the above

a. Transport service cooperatives, apart from the certificate of registration, must still obtain a certificate of
public convenience and necessity from the relevant government agency.
b. Water cooperatives, apart from the certificate of registration, must still obtain a certificate of
public convenience and necessity from the relevant government agency.
c. Electric Cooperatives are registered either with the National Electrification Administration or the CDA.
d. Laboratory Cooperatives do not have separate juridical personalities and must be affiliated with Guardian
Cooperatives.
183. What is the age of members of laboratory cooperative?

a. At least 7 years old but below 18 years of age
b. At least 12 years old but below 18 years of age
c. At least 15 years old but below 18 years of age
d. At least 10 years old but below 18 years of age
184. In the absence of a date fixed in the cooperative by-laws, when shall the regular meeting by the General
Assembly of the cooperative be held?
a. Any day of April
b. April 15
c. Any date within 90 days before the close of each fiscal year
d. Any date within 90 days after the close of each fiscal year
185. What is the maximum limit on the share ownership of a member in a cooperative?
a. 5% of the share capital of the cooperative
b. 10% of the share capital of the cooperative
c. 20% of the share capital of the cooperative
d. 25% of the share capital of the cooperative
186. The cooperative has 15 sits in the board of directors. A contract with a self-dealing director will be the subject
matter of the board of directors. In which of the following scenarios will the contract with such self-dealing
directors be considered perfectly valid even without ratification by members?
a. 9 directors present including self-dealing director; 5 approving present directors including self-dealing
director
b. 8 directors present including self-dealing director; 6 approving present directors including self-dealing
director
c. 11 directors present including self-dealing director; 6 approving present directors including self-dealing
director
d. 9 directors present including self-dealing director; 6 approving present directors including self-
dealing director
187. The following decisions in a cooperative require 3/4 vote of members entitled to vote, except:
a. Removal of officer of a cooperative
b. Amendment of articles of cooperation of a cooperative
c. Ratification of disloyalty committed by a director of a cooperative
d. Merger or consolidation of a cooperative
188. The following data are provided by Hutang Credit Cooperative, a cooperative already existing for at least five
years:
Interest income on loan granted to members P900,000
Service fees revenue 50,000
Membership fees revenue 3,000
Operating expenses 683,000
Percentage declared by the Board:
 Allocation for interest on share capital 70%
 Allocation for patronage fund 30%
What is the net surplus of the cooperative?

a. P270,000
b. P220,000
c. P223,000
d. P217,000
Computation:
Interest income on loan granted to members P 900,000
Service fees revenue 50,000
Membership fees revenue 3,000
Total Revenue P 953,000
Operating expenses (683,000)
Net Surplus P270,000
189. Using the same data in the preceding number, what is the total statutory reserve to be deducted
from the net surplus before computation of interest on share capital holdings assuming the maximum fund is
given for other optional funds??
a. P35,100
b. P54,000
c. P72,900
d. P81,000
Computation:
Statutory reserve = P270,000 x 30% = P81,000
190. Using the same data in number 188, what is the minimum interest on share capital holdings?
a. P56,700
b. P36,300
c. P32,100
d. P25,200
Computation:
Minimum interest on share capital holdings = P270,000 x 70% x 30% = P56,700
-The End-
God Bless! Future CPAs
Final words: This material is deemed incomplete without revisiting the quizzers that I compiled and send to the group.
So PLEASE! PLEASE! Study and revisit the following quizzers:
 Quizzer on the Revised Corporation Code
 Quizzer on Special Laws (New Topics)
 Revisit also your Preboards and Preweek materials from your respective Review Centers
 If you still have time finished Preweek materials of Atty. Laco for RFBT

RFBT Last Minute Quizzer

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REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

LAST MINUTE QUIZZERS FOR CPALE

OBLIGATIONS AND CONTRACTS

4. Which of the following situations is the best example of “executed consideration”?

5. Which of the following situations is the best example of “executory consideration”?

6. Which of the following statements is the best description of a “condition subsequent”?

7. Which of the following statements is the best description of a “condition precedent”?

10. Which of the following statements is the best description of a “condition”?

11. Which of the following statements is the best description of a “Warranty”?

34. Which of the following statements is not correct?

35. Which of the following statements is correct?

Mixed Solidary Debt P12,000

Share of joint creditor Y from the obligation (P12,000 x 2/3) P8,000

47. Which of the following is a valid stipulation?

58. Demand is necessary in this situation for the debtor to be in delay

59. Which of the following statements relative to contracts is incorrect?

73. Which of the following is most likely incorrect?

a. Both statements are true.

84. In order that fraud may make a contract voidable:

85. Which of the following statements is correct?

a. Both 1 and 2 are true

87. Which is not an element of Novation?

1. Which of the following is NOT an essential element of a contract of sale?

4. Mr. Seller and Mr. Buyer orally agreed on the following:

10. Statement No. 1 – A contract of sale is a mode of acquiring ownership.

Statement No. 2 – Every delivery transfer ownership.

a. Both Statements are false.

13. Which of the following reflects a correct legal principle?

26. Which of the following statements is incorrect?

30. What are "unascertained goods"?

33. Which of the following are not required in a contract of sale?

36. What is the legal concept of possession?

Down payment P200,000

LAW ON CREDIT TRANSACTIONS

7. Which of the following is a feature common to chattel mortgage and pledge?

8. Essential elements of pledge include all of the following, except:

9. Essential elements of chattel mortgage include all of the following, except:

11. Which of the following statements is not correct?

20. May a mortgagor’s liability on labor claims be transferred to the mortgagee-creditor?

22. Which of the following is not a form of an equitable mortgage?

31. Consider the following statements:

Based on the foregoing statements:

32. Consider the following cases:

Based on the foregoing cases, the deficiency is recoverable in:

1. Who/which of the following may be a partner in a partnership?

13. Which of the following partnership contracts is valid?

14. Which of the following statements is false?

17. These statements are presented to you for evaluation:

In your evaluation of the foregoing statements:

18. In which of the following instances is a partnership considered to be a partnership at will?

28. Which of the following stipulations is valid?

Items 30 and 31 are based on the following information:

In your study of the foregoing contracts:

36. These statements are presented to you for evaluation:

In your evaluation of the foregoing statements:

Which of the above transactions are binding on PRISM Company?

In your evaluation of the foregoing facts and statements:

Which of the above notice/knowledge is also notice to or knowledge of the partnership?

The liability of the partners and the partnership is:

56. Which of the following statements is true?

Which of the foregoing statements are true?

62. Which of the following statements concerning a limited partnership is false?