LAW ON OBLIGATION

1. An obligation where only the presentation has been agreed upon, but the debtor may render another in
substitution is:
A. Conjoint obligation
B. Facultative obligation
C. Simple obligation
D. Alternative obligation

2. Solidary debtors Stefano, Charles, and Mamie owe solidary creditors Alysha and Fay P30,000. Alysha waived
the entire debt in favor of Stefano. The effect is:
A. The obligation is not extinguished until Stefano collects from Charles and Mamie.
B. The obligation is not yet extinguished until Fay is paid by Alysha her share of the credit.
C. Stefano cannot recover from Charles and Mamie because remission in his favor extends to the benefit of
Charles and Mamie.
D. Stefano can recover from Charles and Mamie their respective share of the debt.

3. Amani is obliged to give Marisa a specific watch, a specific ring, or a specific bracelet. The parties agreed that
Marisa would have the right to choose what would be given to her. Before Marisa can make her choice, the
watch and the ring are lost through Amani's fault, successively. What is the right of Marisa?
A. Marisa may choose the delivery to her of the bracelet, or price of the watch, or the price of the ring plus
damages.
B. Marisa cannot choose the watch’s price or the ring's price because the said objects have already been lost.
C. Marisa can only choose to have the bracelet because Amani can still perform his obligation.
D. Marisa can only choose to have delivery of the bracelet or the price of the ring, which was the last item
that was lost plus damages.

4. When the period is "on or before a date," the debtor has the benefit of the period. This benefit is lost, and the
obligation becomes demandable when: A. The debtor attempts to abscond.
B. After contracting the obligation, the creditor suspects the debtor of becoming insolvent.
C. The guarantee given by the debtor is not acceptable to the creditor.
D. Demand by creditors could be useless.

5. Anisha executes a promissory note in favor of Joshua, who subsequently endorsed it in favor of Anisha. The
obligation to pay the promissory note is thereby extinguished because there is?
A. Confusion or merger
B. Novation
C. Remission
D. Compensation

6. In tender and consignation, if after consignation is made, the creditor allows the debtor to withdraw the thing
deposited in the court, which of the following is incorrect?
A. Co-debtors, guarantors, and securities are released from the obligation unless they consented.
B. The obligation remains to exist.
C. The obligation is extinguished.
D. None of the above.

7. The officious manager may still be held liable for fortuitous events in three of the following instances. Which
is the EXCEPTION?
A. If he assumed the management in bad faith.
B. If he undertakes risky operations like the owner was accustomed to doing.
C. If he is manifestly unfit to carry on the management.
D. Of he has preferred his own interest to that of the owner.

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8. Which of the following is not an element of legal compensation? A. Debts to be compensated are due and
demandable.
B. There is a controversy or adverse claim over any debts to be compensated.
C. There are two or more debts of the same kind.
D. There are two persons who are creditors and debtors of each other.

9. Each debtor is responsible for the entire obligation or debt, and each of the creditors is entitled to the whole of
credit in a solidary obligation. Under the following three exceptions, obligations are also considered solidary.
Which of these does not fall into the exception category?
A. When solidary is expressly stipulated in the obligation.
B. When the prestation is indivisible, there are two or more debtors and creditors.
C. When the law expressly provides solidarity.
D. When the nature of the obligation requires solidarity.

10. Andrei owes Callum a total of P20,000. Andrei's guarantor is Will. Andrei also owes callum P8,000. How
much will Will be obligated to pay as a guarantor if Callum sues Andrei and Andrei cannot pay? A. P12,000
B. P20,000
C. P8,000
D. Will has no liability

11. Deen and Damien are solidary debtors of Gregor, Bradley, and Konrad, joint creditors for P15,000. How much
can Konrad collect from Damien?
A. Konrad could recover P7,500 from Damien.
B. Konrad could recover P5,000 from Damien.
C. Konrad could recover P15,000 from Damien. Konrad, in turn, has to give Gregor and Bradley P5,000
each.
D. Konrad could recover P15,000 from Damien. Damien, in turn, can collect from Deen the amount of
P7,500.

12. When two persons are reciprocally debtors and creditors, there is:
A. Consignation
B. Merger
C. Compensation
D. Confusion

13. When the debtors abandon and assign all his properties in favor of his creditor for the latter to sell to satisfy
his credits, this is:
A. Remission
B. Payment by cession
C. Dation in payment
D. Expromission

14. Glyn owes Layton P50,000, which must be paid by June 30, 2018. Justine, who is not a party to the contract,
paid Layton the P50,000 in April 2018 when the prevailing interest rate was 12 percent per annum, against
Glyn's will. Decide.
A. Justine can ask for reimbursement from Glyn in the amount of P50,000 plus 12% interest from April to
June 30, 2018.
B. Justine can ask for reimbursement from Glyn in the amount of P50,000.
C. Justine cannot ask for reimbursement from Glyn because the payment by Justine is without the consent
and against the will of Glyn.
D. Justine can ask refund from Layton because the payment by Justine was against the will of Glyn.

15. It takes place when persons in their own right are creditors and debtors of each other.
A. Remission
B. Confusion
C. Novation

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 D. Compensation

LAW ON CONTRACTS

16. Essential requisites of a contract:

A. Consent
B. Cause
C. Subject
D. All of them

17. A, without authority from B, sold the latter's car in the latter's name. The contract is, therefore: A. Rescissible
B. Voidable
C. Unenforceable
D. Void

18. Statute of Frauds applies to:

A. Executed contract
B. Oral contract of loan
C. Contract not to be performed within a year from the making thereof
D. Mutual promise to marry

19. Which of the following contracts is not void ab initio?

A. Those whose object is outside the commerce of men.
B. Those whose object did not exist at the time of transaction.
C. Those which contemplate an impossible service.
D. Those undertaken in fraud of creditors.

20. Storm verbally sold Kurt a plot of property for P1,000,000. Kurt now wants to register the sale to get a
Transfer Certificate of Title in his name.. Decide.
A. Storm cannot be compelled to execute the public document of sale because the sale is unenforceable.
B. Storm can be compelled to execute the public document of sale because the sale is enforceable.
C. The sale is void and is, therefore, cannot be registered.
D. Storm cannot be compelled to execute the public document of sale because the sale is voidable.

21. Where damages is caused to either of the contracting parties or a third person, the contract may be: A.
Annulled
B. Rescinded
C. All of the above
D. None of the above

22. The stage of "conception" of a contract is: A. When the parties come to an agreement
B. When the contract is fully executed
C. When there is a meeting of minds of the parties
D. When negotiation is in progress

23. When the object of the contract is outside the commerce of men, the contract is:
A. Rescissible
B. Voidable
C. Unenforceable
D. Void

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24. Which of the following contracts cannot be ratified?
A. Those whose cause or object did not exist at the time of the transaction.
B. Unauthorized transactions
C. Those where both parties are incapable of giving consent
D. Those that fail to comply with the Statute of Fraud.
25. Kris said that Samuel promised her one hectare of land. This is in recognition of Kris' outstanding service to
Samuel. In his defense, Samuel claims that because the commitment was not in writing, it is unenforceable
under the Statute of Frauds.
A. The promise is unenforceable because it is not in writing.
B. The Statute of Frauds is applied because Samuel has rendered services already.
C. The Statute of Frauds is inapplicable here because the promise to give the land is not a sale of real
property.
D. The Statute of Frauds can apply to partially executed contracts.

26. Mrs. Misha sold and gave Mrs. Shea her diamond ring. It was agreed that Mrs. Shea would identify and
establish the price after ten days. Mrs. Shea phoned Mrs. Misha on the eighth day and announced the price of
P10,000. Mrs. Misha graciously accepted. Is the sale perfected?
A. Yes. The price is stated and named by one of the contracting parties and was accepted by the other.
B. No. At the time of the sale, the price was not fixed.
C. No. The price was left to the discretion of one of the parties.
D. Not. At the time of sale, the price is not known.

27. Three of the following contracts are void. Which is NOT?

A. The oral contract of a partnership of three partners and capital contribution is more than P3,000 in cash.
B. Written contract contemplating impossible service.
C. Oral contract of partnership where real estate is contributed as capital.
D. Agent's authority to sell real property is given orally.

28. Blane offers to sell his house to Randy for P100,000. Randy asks him if he would accept P80,000. Which of
the following is correct?
A. The operation of law terminates because of ambiguity, both offers.
B. Randy's response is a counter-offer, effectively terminating the P100,000 offer and instigating an offer for
P80,000.
C. Randy's response is a rejection of the P100,000 offer, and there is no offer for P80,000 because it is too
indefinite to be an offer.
D. Randy's response is a mere inquiry; the P100,000 offer by Blane is still there.

29. Three of the following contracts must be in writing to be valid. Which is the EXCEPTION? A. Contract of
partnership where immovable are contributed.
B. Contract of agency to sell the land of the principal.
C. Contract, where the amount involved exceeds five hundred pesos.
D. Negotiable instruments.

30. On January 3, 2018, Arwel sold Colton a counterfeit Rolex watch. On January 13, 2018, Colton realized that
the watch he purchased from Arwel was a forgery. According to the law, he has four years to cancel the
transaction as a voidable contract. Prescription starts from: A. January 3, 2018, when the sale was perfected.
B. The time of delivery of watch to Colton.
C. The time they first talked about the sale of the watch.
D. January 13, 2018, when the fraud was discovered.

LAW ON PARTNERSHIP

31. A partner who does not participate in the management though shares in the profit or losses.
A. Nominal
B. Ostensible

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 C. Silent
D. Liquidating

32. A partner who is both a secret and a silent partner.

A. Limited
B. Nominal
C. Dormant
D. Ostensible

33. The following are all grounds for a judicial decree of dissolution, except:
A. The partners are guilty of such conduct tends to affect the partnership prejudicially.
B. When the business can only be carried at a loss.
C. By any event which makes it unlawful for the partnership to carry on the business.
D. All of the above.

34. Tod, Caine, and Gilbert are partners in a retail partnership, each donating P20,000.00. Jay is accepted as a new
partner with a P8,000.00 donation. The partnership had a pre-existing liability to Patrick in the sum of
P80,000.00 at the time of his admittance. Decide
A. Jay is not liable to Patrick for this obligation incurred when he was not yet a partner.
B. Jay is liable to Patrick up to his personal assets, which were not contributed.
C. Jay is liable for up to his capital contribution.
D. Jay is liable up to his capital contribution in favor of creditors but with the right of reimbursement from
Tod, Caine, and Gilbert.

35. A partnership that comprises all that the partners may acquire by their work or industry during the existence of
the partnership is:
A. Particular partnership
B. General partnership
C. Universal partnership of all present property
D. Universal partnership of profits.

36. Which of the following is incorrect?

A. An individual partner who engages in business for himself may be excluded from the firm.
B. An industrial partner may not engage in business for himself unless there is a contrary stipulation.
C. A capitalist partner may engage in the same line of business as that of the partnership.
D. An offending capitalist partner may not be excluded from the firm.

37. Jack and Daryl entered into a universal partnership of all present property. The common property of the
partnership shall be:
A. All the properties which belonged to each of the partners at the time of the constitution of the partnership.
B. All the properties which shall belong to each of the partners after the constitution of the partnership.
C. All the properties that belonged to each of the partners at the time of the partnership's constitution and the
profits they may acquire in addition to that.
D. All the properties that belonged to each of the partners at the time of the partnership's constitution and
properties that each may acquire after that.

38. Capitalist partners Nigel, Ethan, and Daniel each gave P30,000, P20,000, and P10,000, respectively, and
industrialist partner Stefan offered his services. Assume Conan, a client, is a P180,000 creditor of the
company. Can he recover the P180,000?
A. Conan must sue the company and seek P60,000 in damages. Conan can still collectively recover the
remaining P120,000 from the four partners, including Stefan, the industrial partner.

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 B. Conan is entitled to P60,000 from the business. Conan can still recover the remaining P120,000 from his
capitalist partners.
C. Conan is entitled to P60,000 from the business. Conan can solidarily recover the remaining P120,000
from any of the partners.
D. Conan can collect P60,000 from the company and consider the remaining P120,000 a loss.

39. ASZ Company is owned by Alex, Skylar, and Zachary. Kevin represented himself to Trevor as a partner in
ASZ Company, and Trevor provided a P150,000 credit to ASZ Company based on such representation. Who
will be held accountable to Trevor if only Skylar and Zachary agreed to such representation?
A. Trevor gave credit to ASZ Company, resulting in a partnership obligation. As a result, all of the partners,
Alex, Skylar, Zachary, and Kevin, are held accountable.
B. Skylar, Zachary, and Trevor are estoppel partners and are obligated to pro-rata to Trevor.
C. Partners Alex, Skylar, and Zachary, who benefitted from Trevor's credit, are accountable.
D. Kevin, who created the representation, is responsible to Trevor.
40. The following persons are NOT disqualified from forming a universal partnership.
A. Brother and sister
B. Husband and Wife
C. Those guilty of adultery and concubinage.
D. Those guilty of the same criminal offense, if the partnership is entered into the consideration of the same.

41. Three of the following are the rights of a general partner and a limited partner in a limited partnership. Which
is not?
A. To view and copy the partnership's books at acceptable hours and keep them at the primary place of
business.
B. To require full disclosure of all items affecting the partnership, as well as a written accounting of the
partnership's activities.
C. To have dissolution and winding up by judicial order.
D. None to the above.

42. A partnership is not dissolved on the death of a:

A. General partner
B. Industrial partner
C. Limited partner
D. None of the above

43. Three (3) of the following are rights of a partner. Which one (1) is not? A. Right to associate another person
with his share.
B. Right to admit another partner.
C. Right to inspect and copy partnership book.
D. Right to ask dissolution of the firm at the proper time.

44. Robin, Mikael, and Garry formed a partnership to run a woodworking firm. Garry died after more than two
years of prosperous business. Robin and Mikael kept the company going without dissolving the partnership.
Subsequently, they incurred obligations. Creditors began to seek payment for their debts. The following are
the creditors' remedies, EXCEPT?
A. Creditors might launch a lawsuit against the partnership to collect the quantity of money owed to them.
B. If there is insufficient cash for the partnership, the creditors may seize Robin and Mikael's private
possessions.
C. Creditors may also sue Garry's estate because it is not exempt from the partnership's liabilities, but only
for the period, he was a partner.
D. Creditors can file an action for damages against Robin and Mikael.

45. Horace, Brandon, and Mario are the general partners of a merchandising company. They agreed on an equal
distribution of any net profit earned every fiscal period after contributing equal amounts to the capital.
However, after two years of operation, Mario transfers his whole interest in the business to Larry without the
knowledge or approval of Horace and Brandon. What are the rights of Larry, if any? A. Larry can participate
in the management.
B. Larry may receive the net profits to which Mario would have otherwise been entitled.

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 C. Larry can become the sole managing partner.
D. Larry can liquidate and, after that, terminate the partnership.

REVISED CORPORATION CODE

46. Corporations that have capital stock divided into shares and are authorized to distribute to the holders of such
shares dividends or allotments of the surplus profits based on the shares held.
A. Non-stock corporations
B. Stock corporations
C. Corporation aggregate
D. Corporation by prescription
47. A corporation consisting of more than one member.
A. Open corporation
B. Close corporation
C. Corporation aggregate
D. Corporations sole

48. I. It is settled that unissued stocks may not be voted or considered in determining whether a quorum is present
in a stockholder's meeting.
II. Only stocks actually issued and outstanding may be voted.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

49. Are shares of stock that have been issued and fully paid for but subsequently reacquired by the issuing
corporation by purchase, redemption, donation, or through some other lawful means?
A. Treasury stock
B. Redeemable share
C. Convertible share
D. Founders' share

50. I. A corporation shall have perpetual existence unless its articles of incorporation provide otherwise. II. A
corporate term for a specific period may be extended or shortened by amending the articles of incorporation.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

51. The following are limitations in the amendment of the articles of incorporation, EXCEPT:
A. The amendment must be for valid reasons and must not be in violation of the Corporation Code or special
legislation.
B. A majority must approve the amendment of the board of directors or board of trustees of the board of
directors or board of trustees.
C. The amendment needs the vote or written consent of the stockholders representing the majority of the
outstanding capital stock or majority members if the corporation is non-stock.
D. All items required by law to be included in the articles of incorporation must be included in both the
original and revised articles.

52. I. The board of the following corporations vested with the public interest shall have independent directors
constituting at least 10% of such board.

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 II. Independent directors must be elected by the other directors present or entitled to vote in absentia during
the election of directors. A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

53. Corporate directors are personally liable if they are proven to have acted with gross negligence or bad faith in
conducting the corporation's activities, causing loss or injury to the corporation, its stakeholders or members,
and other people.
A. Doctrine of self-dealing board of directors
B. Doctrine of corporate opportunity
C. Doctrine of double compensation
D. Doctrine of trust fund

54. I. If the corporation is vested with the public interest, the board shall also elect a compliance officer.
II. The officers shall manage the corporation and perform such duties as may be provided in the bylaws and/or
as resolved by the board of directors.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

55. Subscriptions to the capital stock of a corporation constitute a fund to which the creditors have a right to look
for the satisfaction of their claims.
A. Trust fund doctrine
B. Doctrine of corporate opportunity
C. Doctrine of piercing the veil of corporate fiction
D. Entity doctrine

56. The retained earnings which have not been reserved or set aside by the board of directors for some corporate
purpose.
A. Restricted retained earnings
B. Unrestricted retained earnings
C. All of the above
D. None of the above

57. I. The purpose of a bylaw is to regulate the conduct and define the duties of the members towards the
corporation and among themselves.
II. By-laws are the relatively permanent and continuing rules of action adopted by the corporation for its own
government and that of the individuals composing it and having the direction, management, and control of its
affairs, in whole or in part, in the management and control of its affairs and activities. A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

58. I. Meetings of directors or trustees of corporations may be held anywhere in or outside of the Philippines
unless the bylaws provide otherwise.
II. Notice of regular or special meetings stating the meeting’s date, time, and place must be sent to every
director or trustee at least one day before the scheduled meeting unless a longer time is provided in the
bylaws. A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

59. I. Directors or trustees who cannot physically attend or vote at board meetings can participate and vote through
remote communication such as videoconferencing, teleconferencing, or other alternative modes of

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 communication that allow them reasonable opportunities to participate. II. Directors or trustees can attend or
vote by proxy at board meetings.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

60. I. Stocks shall not be issued for a consideration less than the par or issued price thereof.
II. Where the consideration is other than actual cash or consists of intangible property such as patents or
copyrights, the evaluation thereof shall initially be determined by the incorporators or the board of directors,
subject to the approval of the SEC.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

61. A bidder shall offer to pay the total amount of the balance on the subscription together with accrued interest,
costs of advertisement, and expenses of sale for the smallest number of shares or fraction of a share. A.
Lowest bidder
B. Higher bidder
C. Winning bidder
D. Losing bidder

62. I. A corporation shall furnish a stockholder or member, within ten days from receipt of their written request,
its most recent financial statement in the form and substance of the financial reporting required by the SEC. II.
At the regular meeting of stockholders or members, the board of directors or trustees shall present to such
stockholders or members a financial report of the corporation's operations for the preceding year, which shall
include financial statements.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

63. I. Any amendment to the plan of merger or consolidation may be made.

II. The amendment to the plan of merger or consolidation must be approved by a majority vote of the
respective boards of directors or trustees of all the constituent corporations and ratified by the affirmative vote
of stockholders representing at least 2/3 of the outstanding capital stock or 2/3 of the members of each of the
constituent corporations.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

64. The following are characteristics of a close corporation, EXCEPT:

A. When the articles of incorporation provide that the corporation's operations will be handled by the
shareholders rather than the board of directors, the stockholders are presumed to be directors, with all of
the obligations placed on directors under the Corporation Code. Stockholders are not individually
accountable for corporate wrongdoing.
B. The quorum may be greater than the mere majority.
C. Restrictions on transfers of shares can be validly imposed.
D. Any action by the directors of the close corporation without a meeting shall nevertheless be deemed valid.

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65. Is one formed by the chief archbishop, bishop, priest, minister, rabbi, or other presiding elders of a religious
denomination, sect, or church, to administer or manage, as trustee, the affairs, properties, and temporalities of
such religious denomination, sect or church?
A. Corporation sole
B. Corporation aggregate
C. Close corporation
D. Corporation de facto

66. I. The One Person Corporation shall appoint a treasurer, corporate secretary, and other officers as it may deem
necessary.
II. The single stockholder may be appointed as the corporate secretary.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

67. The following are involuntary modes of dissolution of a corporation, except:

A. By the expiration of corporate term provided for the articles of incorporation.
B. By legislative enactment.
C. By failure to formally organize and commence the transaction of its business within five years from the
date of incorporation.
D. By the judgment of the SEC after hearing of the petition for voluntary dissolution where creditors are
affected.

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68. I. Suppose a foreign corporation does business in the Philippines without a license. In that case, a Philippine
citizen or entity which has contracted with the said corporation may be estopped from challenging the foreign
corporation's corporate personality in a suit brought before Philippine courts.
II. If a foreign corporation does business in the Philippines with the required license, it can sue before
Philippine courts only on isolated transactions.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

69. I. The unauthorized use of a corporate name shall be punished with a fine ranging from P10,000 to P200,000. II.
When, despite the knowledge of the existence of a ground for disqualification, a director, trustee, or officer shall
be punished with a fine ranging from P10,000 to P200,000 at the discretion of the court, but shall not be
permanently disqualified from being a director, trustee or officer of any corporation.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

COOPERATIVE CODE

70. It means the entire membership of the cooperative duly assembled to exercise all the rights and perform all the
obligations on cooperatives.
A. Shareholder's meeting
B. Members' meeting
C. General assembly
D. Partners' assembly

71. It refers to the government agency in charge of the registration and regulation of cooperatives.
A. Security and Exchange Commission (SEC)
B. Department of Trade and Industry (DTI)
C. Civil Service Commission (CSC)
D. Cooperative Development Authority (CDA)

72. It includes the members of the board of directors, members of the different committees created by the general
assembly, general manager or chief executive officer, secretary, treasurer, and members holding other positions
as may be provided for in their bylaws.
A. Officer of the cooperative
B. Member of the cooperative
C. Representative assembly
D. Social audit

73. It includes cooperative undertaking activities which are related to its primary line of business or purpose.
A. Subsidiary cooperative
B. Single line or purpose cooperative
C. Service cooperative
D. Social audit

74. A cooperative may be organized and registered for any or all of the following purposes:
A. To encourage thrift and savings mobilization among the members.
B. To generate funds and extend credit to the members for productive and provident purposes.
C. To encourage among members systematic production and marketing
D. All of the above

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75. I. Any newly organized primary cooperative may be registered as a multipurpose cooperative only after
compliance with the minimum requirements for multipurpose cooperatives to be set by the CDA.
II. A single-purpose cooperative may transform into a multipurpose or may create subsidiaries only after at
least three (3) years of operations.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

76. I. A certificate of registration issued by the CDA under its official seal shall be prima facie evidence that the
cooperative therein mentioned is duly registered unless it is proved that the registration thereof has been
canceled.
II. Any provision or matter stated in the articles of cooperation and bylaws may be amended by two-thirds
(2/3) vote of all the members with voting rights, without prejudice to the right of the dissenting members to
exercise their right to withdraw their membership.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

77. I. No merger or consolidation shall be valid unless approved by a three-fourths (3/4) vote of all the members with
voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general
assembly meetings. The dissenting members shall have no right to exercise their right to withdraw their
membership.
II. The merger or consolidation shall be effective upon issuing the certificate of merger or consolidation by
the
CDA.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

78. He is one who has no right to vote nor be voted upon and shall be entitled only to such rights and privileges as
the bylaws may provide: Provided that an associate who meets the minimum requirements of regular membership
continues to patronize the cooperative for two years, and signifies their intention to remain a member shall be
considered a regular member.
A. Regular member
B. Irregular member
C. Principal member
D. Associate member

79. I. The death or insanity of a member in a primary cooperative and the insolvency or dissolution of a secondary or
tertiary cooperative member may be considered valid grounds for termination of membership.
II. In case of death or insanity of an agrarian reform beneficiary-member of a cooperative, the next-of-kin may
assume the duties and responsibilities of the original member.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

80. The general assembly shall have the following exclusive powers which cannot be delegated: A. To determine and
approve amendments to the articles of cooperation and bylaws.
B. To elect or appoint the board of directors members and remove them for a cause.
C. To approve developmental plans of the cooperative.
D. All of the above.

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81. I. Unless otherwise provided in the bylaws, the direction and management of the cooperative's affairs shall be
vested in a board of directors which shall be composed of not less than five or more than fifteen members elected
by the general assembly for a term of 3 years. They shall hold office until their successors are duly elected and
qualified or until duly removed for cause.
II. The board of directors shall be responsible for the cooperatives' strategic planning, direction-setting, and
policy-formulation activities.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

82. I. The board of directors shall elect from among themselves the chairperson and vice-chairperson and elect or
appoint other cooperative officers from outside of the board in accordance with their bylaws.
II. All officers shall serve during good behavior and shall not be removed except for cause after due hearing.
Loss of confidence shall not be a valid ground for removal unless evidenced by acts or omission causing loss
of confidence in the honesty and integrity of such officer,
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

83. A director or officer, or an associate of a director or officer, who, for his benefit or advantage or that of an
associate, makes use of confidential information that, if generally known, might reasonably be expected to affect
the operation and viability of the cooperative adversely, shall be held:
I. Liable to compensate the cooperative for the direct losses suffered by the cooperative as a result of the
illegal use of information
II. Accountable to the cooperative for any direct benefit or advantage received or yet to be received by
him or his associate due to the transaction.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

84. Cooperatives registered under the Cooperative Code may derive their capital from any or all of the following
sources:
A. Member's share capital.
B. Loans and borrowings, including deposits.
C. Revolving capital consists of the deferred payment of patronage refunds or interest on share capital.
D. All of the above.

LAW ON SALES

85. Lorenzo sold his land to Christopher, who took possession of it. Later, a stranger, Angelo, sold the same land to
Jameson, who registered the transfer in good faith and thereby got the title in his name. The owner is: A. Jameson
is the rightful owner because he was the first to register in good faith.
B. Lorenzo is still the owner because Angelo lacked the permission to sell.
C. Because Christopher did not record the sale, Lorenzo remains the owner.
D. Christopher is the owner because the owner is his seller, and he has taken possession of the land.

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86. Ronald sold a plot of land to Henry in a private instrument for P5,000. Henry now requests that Ronald record the
contract as a public instrument so that he may register the transaction with the Registry of Deeds and get the
Transfer Certificate of Title in his name. Decide:
A. Ronald may not be coerced or pressured to perform the public instrument because the sale is void because it
is only in a private instrument.
B. Ronald cannot be obliged to record the contract in a notarized deed of sale since the transaction is void
because it is not recorded in a public instrument.
C. Only once Henry has paid the purchase price can Ronald be forced to execute the public document.
D. Because the contract of sale is enforceable, Ronald is required to execute the public instrument.
87. The right of the seller to stop goods in transit upon discovering that the buyer does not have the funds to pay for
the goods.
A. Pre-emptive right
B. Appraisal right
C. Voting right
D. Right of stoppage in transit

88. In a contract of sale of personal property, the price which is payable in installments, the vendor may exercise any
of the following remedies, EXCEPT:
A. The exact fulfillment of the obligation should the vendee fail to pay any installment.
B. Cancel the sale should be the vendee's failure to pay cover two or more installments.
C. Foreclose, the chattel mortgage on the thing, sold, if one has been constituted, should the vendee's failure to
pay cover two or more installments.
D. Rescind the sale should the vendee fail to pay any installment.

89. The buyer of a thing has the right to the fruits of the thing. A. From the time the thing bought is delivered.
B. From the time the sale is perfected.
C. From the time the obligation to deliver the thing bough arises.
D. From the time the fruits are delivered.

90. In case of redemption, which of the following will not be paid by the seller to the buyer? A. Expenses incidental
to the sale paid by the buyer.
B. All necessary expenses on the thing sold and to be redeemed.
C. The consideration of the sale paid by the buyer.
D. Interest on the price paid by the buyer.

91. Woody and Lewis entered into a contract of lease with the option to buy the former's car for a term of two years.
For three months, Lewis failed to pay the rent, and by reason thereof, Woody repossessed the car.
Hence:
A. Woody can collect the unpaid rentals for three months.
B. Woody can collect the unpaid rentals for the duration of the term of the lease of two years.
C. When Woody deprived Lewis the possession of the leased car, he had no further action against the latter for
any unpaid rentals.
D. Woody shall return the rentals without deductions to Lewis by virtue of the recession of the contract of lease
with the option to buy.

92. On July 1, 2021, Jose sold a parcel of registered land to Khalid. On July 14, 2021, he sold the same land to Theo.
Who has the better right if the second sale is registered ahead of the first sale? Theo has knowledge of the sale to
Khalid.
A. Theo has a better right because knowledge of Khalid of the second sale makes Khalid in bad faith.
B. Theo has a better right because he is in good faith.
C. Neither Khalid nor Theo has a better right.
D. Khalid has a better right as Theo knew of the second sale.

LAW ON PLEDGE AND MORTGAGE

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93. Dustin pledged his watch to Alec pawnshop for P5,000. On the due date, Dustin failed to redeem his watch.
The pawnshop sold the watch at a public auction to the highest bidder at P4,000. A.
The pawnshop can recover the deficiency of P1,000 from Dustin.
B. The pawnshop cannot recover the deficiency of P1,000 unless there is a stipulation.
C. The pawnshop cannot recover the deficiency of P1,000 even if there is a stipulation.
D. The pawnshop can recover the deficiency of P1,000 even without a stipulation.

94. Craig borrowed P100,000 from Cristiano with Craig's ring given to Cristiano by way of pledge. It was stipulated
that the ring would belong to Cristiano in case of non-payment on the due date. This forfeiture is: A. Cession in
payment
B. Dacion en pago
C. Pactum commisorium
D. Condonation

95. Elements of contracts of pledge and mortgage, EXCEPT: A. Pledgor or mortgagor must be the absolute owner.
B. Pledgor or mortgagor must have the free disposal of the thing pledged.
C. The thing pledged or mortgaged may be appropriated if the debtor cannot pay.
D. Pledge and mortgage are accessory contracts.

96. The following are requisites of pledge, EXCEPT: A. The disposal property by the pledge.
B. Absolute ownership of the property pledged.
C. The thing pledged may be placed in possession of a third person.
D. To bind a third person, it must be recorded in the office of the Registry of Deeds.

97. Three of the following are essential requisites of a mortgage contract. Which is NOT? A. The person instituting
the mortgage has the free disposal of his property.
B. The contract must be in writing.
C. The mortgagor is the absolute owner of the thing mortgaged.
D. The mortgage is constituted to secure the fulfillment of a principal obligation.

98. Which of the following statements is true and correct?

A. Unless otherwise agreed upon by the parties, the sale of the mortgaged property extinguishes in full the
mortgagor's obligation to the mortgagee.
B. Pledge and mortgage are considered principal contracts.
C. When a pledge or mortgage secures the obligation and is not paid when due, the pledgee or mortgagee
may dispose of the collateral even if there is no agreement to that effect between the parties. D. In both
pledge and mortgage, the creditor is entitled to a deficiency judgment.

99. Drake borrowed P500,000 from Rex in 2020, which was secured by the guarantee of P700,000 in corporate
stock. Because of the economic crisis, the value of the shares plummeted to P100,000 in 2021. Can Rex make
Drake give up additional shares worth P600,000?
A. No. the contract of pledge cannot be changed unilaterally. Moreover, the pledge is only an accessory
contract.
B. Yes. Because the parties did not contemplate said circumstance when the pledge was perfected.
C. Yes. Because the parties intended that the value of the object of pledge shall always be higher than the
loan amount.
D. No. because the right of Rex is to sell the shares at public auction and claim for the deficiency.

100. Spouses Franco and Shane borrowed money from Cooper. To guarantee payment, they left the title of their land
with Cooper for him to hold until they paid the loan. What contract was executed? A. A contract of pledge.
B. A contract of real estate mortgage.
C. A contract of antichresis.
D. None of the above.

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