Ampongan and Abaño Bus.Law

8/18/2019 Ampongan and Abaño Bus.Law

1/29

ACCTG 161 – GROUP 8AMPONGAN AND ABAÑO MCQS

OBLIGATIONS1. The duty not to recover what has been voluntarily paid although payment was no longer required:

a. Natural obligationb. Moral obligationc. Civil obligationd. None of the above

2. hen !"# voluntarily ta$es charge of the neglected business of % without the latter&s authoritywhere reimbursement must be made for necessary and useful e'penses( there is aa. )uasi delictb. )uasi contractc. Negotorium gestiod. *olutio indebiti

+. !"# has been missing for some time leaving no one to manage his properties. % and C ,ointly too$charge of the management thereof. -owever( due to the fault of %( the properties of " weredamaged. The liability thereof to " for damages shall bea. nly % shall be liable.b. %oth shall be ,ointly liable.c. %oth shall be solidarily liable.d. They are not liable since " is at fault for having abandoned his properties.

/. Culpa aquillana as distinguished from culpa contractuala. 0roof of due diligence in the selection and supervision of employees is not available as a

defense.b. 0roof of the contract and of its breach is sufficient prima facie to warrant recovery.c. The negligence of the defendant is merely an incident in the performance of the obligation.d. The source of liability is the defendant&s negligent act or omission itself.

. The creditor has a right to the fruits of the thing froma. The time the thing is delivered.b. The time the obligation to deliver the thing arises.c. The time the sale is perfected.d. The time the fruits are delivered

. n 3une 1 241( 5ichoso obliged himself to deliver to Concolon a specific land on 3uly 1( 241.This property is being leased to 6alaso at 0(444 per month. hich is correct7a. 5ichoso has to deliver to Corcolon the land including its rental income from 3une 1( 241.b. 5ichoso has to deliver to Corcolon the land including its rental income from 3anuary 1( 241.c. 8f 5ichoso delivers only the land to Corcolon on "ugust 1( 241 he should also deliver the

rental income from 3uly 1( 241.

d. 8f 5ichoso delivers only the land to Corcolon on "ugust 1( 241 he shall be entitled to thefruits from "ugust 1( 241.

9. 1st *tatement: 8f the thing is determinate( the debtor can be compelled to deliver the thingpromised and upon failure( the creditor has a right to as$ for damages.

2nd *tatement: 8f the ob,ect is generic and the debtor does not comply with the obligation( thecreditor can as$ a third person to comply with the prestation at the e'pense of the debtor( plusdamages.a. nly the 1st statement is true.


2/29

b. nly the 2nd statement is true.c. %oth statements are true.d. Neither statement is true.

. hich is not a requisite in order that obligation shall be e'tinguished by the destruction of a thingdue7a. hen the thing is lost before the debtor incurred delay.b. hen the obligation is to deliver a brand new -yundai ;et. The delay on the part of the creditor to accept the performance of an obligation:a. 5olo incidenteb. Mora accipiendec. Compensatio moraed. Mora solvendi

14. !5ayanan binds himself to sell to ;agatlun his car for 024(444.# hich of the followingstatements is false7a. 8f no period has been agreed upon( the performance of the respective obligation is deemed to

be simultaneous.b. 8f 5ayanan delivers the car( ;agatlun will only be in delay from the time demand has been

made by 5ayanan.c. 5ayanan cannot demand payment if he does not deliver the car.d. ;agatlun cannot demand delivery if he does not pay the price.

11. 5emand is not needed to put debtor in default e'cept:a. hen the law so provides.b. hen demand would be useless as when the obligor has rendered it beyond his power to

perform.c. hen the thing is lost due to fortuitous event.d. hen time is of the essence of the contract.

12. ho is liable for the loss of the sub,ect matter by fortuitous event7a. Creditor b. 5ebtor c. %oth creditor and debtor d. None of them

1+. "ntigua obliged himself to deliver a specific cow to %ragan


3/29

c. No. 1 is false( No. 2 is trued. No. 1 is true( No. 2 is false

1. hich of the following is not an e'ception to the rule that !all rights acquired in virtue of anobligation are transmissible#7a. hen the parties agreed against its transmission.b. hen the law prohibits the transmission of rights.c. hen the nature of the obligation is purely personal.d. hen the obligation is real.

1. 5emandable at once ?a. Conditional obligationb. 0ure obligationc. bligation with a periodd. "lternative obligation

19. *tatement 1: hen the fulfillment of the suspensive or resolutory condition depends upon thesole will of the debtor( the conditional obligation shall be void.

*tatement 2: 8f the original obligation is sub,ect to a suspensive or resolutory condition and thecontract is novated the new obligation shall be under the same conditions unless otherwisestipulated.a. %oth are trueb. %oth are falsc. No. 1 is true( No. 2 is falsed. No. 1 is false( No. 2 is true

1. !8 will give you this car provided that if 8 li$e to have it bac$( you will return the same to me.#a. The obligation is valid( because the condition merely causes the loss of rights already

required.b. Combination of C and 5.c. The obligation is void( because the fulfillment depends upon the will of the debtor.

d. The obligation is void( because the fulfillment depends upon the will of the creditor.

1>. hich of the following is an obligation with a period for the benefit of the debtor7a. "n obligation payable little by little.b. "n obligation payable when the debtor&s means permit him to do so.c. "n obligation payable within 2 years on demand.d. "n obligation !payable soonest#e. "n obligation payable on or before 5ecember 2( 241.

24. The debtor loses the benefit of the period( and his obligation becomes demandable whena. 5emand by the creditor would be useless.b. The guarantees as promised and delivered by the debtor are not acceptable to the creditor.

c. "fter contracting the obligation( the creditor suspects that the debtor is becoming insolvent.d. The debtor attempts to abscond.

21. @acultative as distinguished from alternative obligationa. The right of choice is given only to the debtor.b. Aarious things are due( but the giving of one is sufficient.c. 8f one of the prestations is illegal( the others may be valid and the obligation remains.d. 8f it is impossible to give all e'cept one( that last one must still be given.

22. Bffect of the loss of thing in a facultative obligation. hich is incorrect7


4/29

a. %efore substitution( if the principal thing is lost due to fortuitous event( there is no moreobligation.

b. %efore substitution( if the substitute thing is lost due to debtor&s fault( there is no moreobligation.

c. "fter substitution( if the principal thing is lost( the debtor is no longer liable if it was lost due tohis fault.

d. None of the above.

2+. *tatement 1: The concurrence of two or more creditors or of two or more debtors in one and thesame obligation implies that the obligation is solidary.

*tatement 2: hen the obligation is ,oint( the debt shall be divided into as many shares as thereare creditors or debtors.a. nly the first statement is true.b. nly the second statement is true.c. %oth statements are true.d. Neither statement is true.

2/. "( %( and C secured a loan from 5. The promissory note which evidenced the obligation states: !8promise to pay 5 or order 014(444 payable on demand# *gd.D " % C. The obligation is:a. *olidaryb. 5ivisiblec. 8ndivisibled. 3oint

2. 8ndivisibility distinguished from solidaritya. =efers to legal tie or vinculum.b. =efers to the prestation which constitutes the ob,ect of the obligation.c. hen the obligation is converted onto one of indemnity for damages because of breach( the

character of the obligation remains.d. 0lurality of the sub,ect is indivisible.

2. 5idith( 5iana( and 5ura e'ecuted a promissory note worded as follows: !e promise to pay toCarlito( Colinares( and Colico the sum of 014(444.# *gd.D 5idith( 5iana( and 5ura.a. 5idith is obliged to pay Carlito( Colinares( and Colico 014(444.b. 5idith is obliged to pay Carlito 04(444.c. 5idith is obliged to pay Carlito 024(444.d. 5idith is obliged to pay Carlito 04(444.

29. "( %( and C solidarily bound themselves to deliver to E a -onda Motorcycle. The obligation wasnot fulfilled through the fault of "( thereupon( E filed an action in court against C and the courtawarded 0+(444 to E. hich of the following situations is correct.a. 8f C pays E the 0+(444( C can collect from " 02/(444 and % 012(444. 6ater( % can as$ for

reimbursement from " 012(444.

b. E has to collect 012(444 each from "( %( and C to satisfy the court&s award of 0+(444.c. 8f C pays E the 0+(444( C can collect from % 014(444 and from " 01(444.d. E cannot collect the whole amount of 0+(444 from C.

2. 51( 52( and 5+ are solidary debtors of C for 0+4(444. The obligation was in writing. "fter thelapse of the tenFyear prescriptive period( which of the following statements is incorrect7a. 8f 51 paid C not $nowing that the obligation has already prescribed( his right is to proceed

against C because there was undue payment.b. 8f 51 paid C $nowing that the obligation has already prescribed( 51 cannot as$

reimbursement from 52 and 5+.


5/29

c. 8f 51 paid C not $nowing that the obligation has already prescribed( 51 cannot as$reimbursement from 52 and 5+.

d. None of the above

2>. "tien


6/29

+. This is not an essential element of an application of paymenta. There must be one debtor and one creditor.b. Two or more debts and two or more creditors.c. There are two or more debts of the same $ind and nature.d. The debts are all due and demandable.

+. " debtor owes his creditor several debts( to wit:8. "n unsecured debt.88. " debt bearing of interest 12H per annum.888. " debt secured with a real mortgage of debtor&s lot.

6ater( partial payment was made by the debtor without specifying the debts to which the paymentshould be applied and on the other hand( the creditor had not specified in the receipt to be issuedthe application of payment. hich of the following is the order of preference in which the paymentshould be applied7a. 8( 88( 888b. 88( 888( 8c. 888( 8( 88d. 888( 88( 8

+9. The abandonment of all property of the debtor for the benefit of his creditors in order that thelatter may apply the proceeds thereof to the satisfaction of their credita. "pplication of paymentb. 0ayment by cessionc. 5ation in paymentd. Tender of payment

+. 5ebtor %atista is indebted to 3ohn Cena( Iing %oo$er( and %ig *how a total amount of 0+44(444made up of: 3ohn Cena ? 0144(444J Iing %oo$er ? 04(444 and %ig *how ? 014(444. nmaturity( %atista cannot pay his obligation so he assigns or cedes to them all his property( to be

sold by the creditors and the proceeds thereof applied to their corresponding credits. Thecreditors sold %atista&s properties for only a total of 014(444. 8s the obligation e'tinguish75ecide.a. Ges( the obligation is e'tinguished.b. 3ohn Cena( %ig *how and Iing %oo$er will divide the 014(444 equally.c. 3ohn Cena will get 04(444( Iing %oo$er ? 0+4(444 and %ig *how ? 0>4(444.d. None of the above

+>. Cession as distinguished from dacion en pagoa. 5oes not require plurality of creditors.b. Not an act of novation.c. 5oes not affect all the assets of the debtor

d. Transfers ownership upon delivery.

/4. Consignation alone without any tender of payment is sufficient in the following cases( e'cept:a. hen the creditor is absent or un$nown or does not appear at the place of payment.b. hen without ,ust cause( the creditor refuses to give a receipt.c. hen the creditor presents the title to the obligation for collection.d. hen two or more persons claiming the same right to collect.

/1. " thing is not deemed lost when it ?a. 0erishes.


7/29

b. 5isappears in such a wat as its e'istence is un$nown or it cannot be recovered.c. ;oes out of commerce.d. 5eteriorates.

/2. ne of the following is not a requisite of a valid remissiona. Must be in public instrument.b. Must be gratuitous.c. bligation is due and demandable.d. "cceptance by the debtor.

/+. hen two persons in their own right are reciprocally creditors and debtors of each other ande'tinguishes both debts to the concurrent amount( what ta$es place is $nown asa. Compensationb. Novationc. Confusion or merger d. =emission

//. 5ante and 5,ango are ,ointly indebted to Crystal for 014(444. Crystal endorsed the instrument to "ugusto( "ugusto to 3ulio( 3ulio endorsed it bac$ to 5ante only. hose obligation has beene'tinguished7a. 5ante only.b. 5,ango only.c. %oth 5ante and 5,ango.d. Neither 5ante nor 5,ango.

/. 8f the substitution is without $nowledge of the original debtor and the new debtor is insolvent andcannot pay the obligation:a. The original debtor and the new one will share the value of the obligation.b. The old debtor can still be liable to pay the obligation.c. The old debtor is free from any liability after the substitution.d. The old debtor( the new debtor and the creditor will share the value of the obligation.

/. hen a third person assumes the payment of the obligation even without the $nowledge andconsent of the debtor but with the consent of the creditor a. There is novation.b. There is delegacion if debtor is released.c. There is subrogation.d. There is e'promision if debtor is released.

/9. n 3une 2( 241( "tanacio borrowed from %ondying 04(444( to be paid 24 days thereafter. "tanacio proposed to %ondying that Eandra will pay "tanacio&s debt( and that "tanacio will befree from all liabilities. %ondying and Eandra agreed to the proposal. n 3une 22( 241( when%ondying tries to collect from Eandra( Eandra was already insolvent but this was not $nown to

"tanacio. This insolvency is not of public $nowledge. *o %ondying sues "tanacio on the ground

that it was "tanacio who made the proposal and that "tanacio really guaranteed Eandra&sinsolvency. 5ecide.a. "tanacio is not liable because he does not $now the insolvency of Eandra at the time of

delegacion and neither was the insolvency of public $nowledge.b. "tanacio is liable because he did not e'ercise due diligence in determining the insolvency of

Eandra.c. "tanacio is liable because he is presumed to have guaranteed Eandra&s insolvency.d. "tanacio is not liable because Eandra agreed to the proposal to ma$e himself solidarily liable

for the obligation.


8/29

/. 8f a third person pays without the debtor&s $nowledge or against his will( the payor is entitled to:8. =eimbursement of what he has paid.88. *ubrogation to the rights of the creditor

a. @alse( Trueb. True( @alsec. @alse( @alsed. True( True

/>. C is the creditor of 5 in the amount of 0+4(444. ; is the guarantor of 5. 5 paid C 014(444. @( afriend of 5( not $nowing the partial payment made by 5( paid C the 0+4(444 without the$nowledge of 5. hat is the effect of this payment on the obligation7a. The obligation is e'tinguished but @ can demand reimbursement from ; in the amount of

0+4(444.b. The obligation is e'tinguished but @ can demand reimbursement from 5 in the amount of

0+4(444.c. The obligation is not e'tinguished because @&s payment was made without the $nowledge of

5.d. The obligation is e'tinguished but @ can recover 024(444 from 5( but he cannot proceed

against the guarantor ;.

4. 8f an obligation is modified by changing the ob,ect and also changing the principal conditiona. There is mi'ed novation.b. The original obligation remains.c. There is real novation.d. There is personal novation.

CONTRACTS

1. hich of the following is not a valid stage of a contract7a. 8ntroductionb. Conceptionc. 0erfectiond. Termination

2. " contract is in stage of conception when:a. There is meeting of the mind.b. Negotiations are in progress.c. The parties come to an agreement.d. The contract is perfected.

+. The contracting parties may establish such stipulations( clauses( terms( and conditions as theymay deem convenient( provided they are not contrary to law( morals( good customs( public order(or public policy.a. 6iberty to contractb. Mutuality of contract

c. =elativityd. Consensuality

/. Contracts which must be in the form provided by law for their perfectiona. Consensual contractsb. =eal contractsc. nerous contractsd. *olemn contract

. "n innominate contract which means !8 do that you may give.#


9/29

a. 5o ut desb. 5o ut faciasc. @acio ut desd. @acio ut facias

. Contracts are effective and binding only between the parties( their assigns and heirs. Three of thefollowing enumerations are e'ceptions as provided by law. hich does not belong to thee'ception7a. hen there is stipulation in favor of a third party.b. here one of the parties to the contracts dies and thereafter a suit is filed on the basis of the

contract.c. here the obligation arising from contract are not transmissible by their nature.d. here the stipulation arising from contract are not transmissible by stipulation or by provision

of law.

9. hich of the following is not an e'ception to the principle of relativity7a. hen the obligations arising from the contract are not transmissible by their nature( by

stipulation( or by provision of law.b. hen there is stipulation pour autrui.c. hen a third person induces to violate his contract.d. None of them.

. These are the basic principles or characteristics of a contract. hich is the e'ception7a. @reedom or liberty to stipulateb. bligatory force and compliance in good faithc. %inding to third partiesd. 0erfection by mere consent

>. 8n order that a stipulation in favor of a third person in a contract would be valid and binding uponthe parties thereto( three of the requisites are mentioned in the following enumerations. hichamong them is not a requisite7a. There must be a stipulation in favor of a third person.

b. The contracting parties must have clearly and deliberately conferred a favor upon that thirdperson.

c. The third person communicate his acceptance to the obligor before its revocation.d. That there must be an e'isting agency between either of the contracting parties and the third

person.

14. 5ante borrowed 0144(444 from Conti payable in 2 years. The contract stipulates that 5ante willpay 1H monthly interest equivalent to 01(444 per month( directly to Tisi$o( Conti&s brother( on the2th of each month for Tisi$o&s support. Tisi$o signifies his acceptance before it could be revo$ed.a. Tisi$o has no right to receive the monthly paymen on the interest not being a party to the

contract.b. Tisi$o is not entitled to the monthly interest unless the money loaned is his.

c. Tisi$o is entitled to the monthly interest because the amount involved per month is veryminimal.

d. Tisi$o is entitled to the monthly interest even if he is not a party to the contract because this isa clear case of stipulation pour autrui.

11. Tindero sold to Mamimili the computer owned by Mabait without Mabait&s authority. The contractisa. 0erfectly validb. Aoidablec. Aoidd. Knenforceable


10/29

12. Consent is manifested by the meeting of the offer and the acceptance upon the thing and thecause which are to constitute the contract. hich of the following constitutes the offer7a. "n offer made through an agent.b. %usiness advertisement of things for sale.c. "dvertisement for biddersd. "nswer not given

1+. hen there is concurrence of the offer and acceptance( there is ?a. Consentb. 0aymentc. =evocationd. None of the above

1/. Mr. *antos signed a letter addressed and delivered to Mr. "guas. The terms of the letter are:i. "n offer to sell a 44 sq. m for 0+44(444ii. "n option time up to ctober 21( 241 for Mr. "guas to raise the 0+44(444iii. Kpon payment of the 0+44(444( Mr. *antos will e'ecute and sign a 5eed of *ale

n ctober +1( 241( Mr. *antos sent a letter to Mr. "guas as$ing for a new price of 0+4(444 for the 44 sq. m lot. Can Mr. "guas compel Mr. *antos to accept the 0+44(444 and ma$e him signthe and e'ecute a 5eed of *ale7a. No. Mr. "guas did not accept the offer of Mr. *antos.b. Ges. Mr. *antos is already estopped by his signed letter and offer.c. Ges. There was an actual meeting of the minds.d. Ges. The contract has been perfected.

1. @rance offered to sell her cellular phone for 014(444 to her friend( *erra. *erra accepted the offer but is willing to pay only 0(444. 8s ther a perfected contract7a. Ges( for a price of 0(444.b. Ges( for a price of 0(444.c. No( because the acceptance was qualified and it constituted a counterFoffer.d. No( because the offer was re,ected.

1. n 3uly 1( "baca offered in writing to sell %atangueLo his car for 0+44(444. %atangueLoaccepted the offer and mailed the letter of acceptance on 3uly 14 which was received by "bacaon 3uly 24. -owever on 3uly 1( %atangueLo had already mailed a letter revo$ing his acceptance.8s there a perfect contract7a. Ges( despite the revocation made by %atangueLo.b. None if the acceptance was received by "baca ahead of the letter of revocation.c. Ges( even if the letter of revocation was received ahead of the acceptance.d. None( because at the time of the receipt of the letter of acceptance( there had already been a

prior revocation of said acceptance.19. "n offer made through an agent is accepted from the time acceptance is communicated to the ?

a. "gent

b. 0rincipalc. "gent and principald. "gent andor the principal

1. Money paid or promised to be paid in consideration for an optiona. ption periodb. ption moneyc. Barnest moneyd. 0ayment


11/29

1>. 8n the Classified "ds section of a national daily newspaper( an advertisement appears as follows:!Car for sale( -onda City( Model 244+( call or te't 4>1>2++9 or see Aentigo( 2 "bella *t.(Naga City.# "yalin proceeded to the address indicate in the newspaper to see Aentigpa. Aentigo cannot refuse to sell the car even if he decides not to sell the car anymore.b. "yalin is now compelled to buy the car from Aentigo.c. Aentigo may refuse to sell his car even if the price offered is fair and equitable.d. Aentigo may refuse to sell his car to prospective buyers e'cept "yalin.

24. hich of the following is qualified to give consent to a contract7a. Knemancipated minors.b. 8nsane or demented persons.c. 5eaf mutes who do not $now how to write.d. 5eaf mutes who $now how to read but do not $now how to write.

21. " contract entered into during a lucid intervala. Aoidableb. Knenforceablec. Aoidd. None of the above

22. Bsguerra( a former government employee( suffered from severe paranoia and was confined in themental hospital in 2414. "fter his release( he was placed under the guardianship of his wife toenable him to get his retirement pay. 8n 241+( he became a mining prospector and sold somemining claims. 8n 241( he sued to annul the sale claiming that he was not mentally capacitated atthe time of sale. The sale in question wasa. 8llegalb. Aoidc. Aoidabled. Aalid

2+. =eluctantly and against her good sense and ,udgment( =osemarie entered into a contract for thedelivery of five D tables to Cora


12/29

a. Bddie sold to "tty. Malaya 244 copies of Transfer and %usieness Ta'es by "mpongan at 024each. "tty. Malaya paid 04(444 for the boo$s but the amount appeared in the receipt issuedwas 0/(444 only.

b. "=T* =eview Center hired the services of "tty. 5ipasipa as lecturer in %usiness 6aw. -isresume which was made as the basis for iring him indicates that he is a C0"F6awyer when infact he is not a C0" although he graduates with a degree of %achelor of *cience in

"ccountancy.c. !"# owns a piece of untitled land which to his $nowledge measures 1 hectares and sold it to

% for 0+44(444 and % thin$ing it really contains 1 hectares.d. None of the above.

29. hen a person ta$es improper advantage of his power over the will of another( depriving thelatter of a reasonable freedom of choice( there isa. Aiolenceb. 8ntimidationc. Kndue 8nfluenced. Mista$e

2. Through insidious words or machinations( "bion was able to induce %lanco to enter into acontract which without them %lanco would not have agreed to it. There isa. Kndue influenceb. @raudc. Mista$ed. Misrepresentation

2>. Case 1: Kpon misrepresentation made by * that the liquors are genuine( % bought from * ten14D bottles of @undador %randy. Kn$nown to %( the contents of the bottles are mi'tures of @undador and Matador %randies.

Case 2: * and % agreed to deliver to % 144 $ilos of iodi


13/29

+2. Mr. ;amboa owes Mr. Bvangelista 0144(444. Mr. ;amboa $nows that on maturity date( he willnot be able to pay Mr. Bvangelista( and in order to prevent attachment of his property by Mr.Bvangelista( Mr. ;amboa( before maturity of his debt( e'ecutes a contract pretending to sell toMr. *an 5iego his property. hich of the following is not correct7a. The contract is not valid for lac$ of consideration.b. The contract is binding between Mr. ;amboa and Mr. *an 5iego.c. The contract being simulated and e'ecuted to defraud Mr. Bvangelista is void.d. Mr. Bvangelista can see$ rescission of the fictitious contract.

++. There shall be no reformation of contract in the following cases( e'cept:a. 8n testament wills.b. *imple donation inter vivos when no condition is imposed.c. " contract of sale agreed upon by the parties but the document signed was a contract of

mortgage.d. " contract of sale of a condominium unit wherein the seller offered for sale *uit 14F5 of Tower

1 while the buyer bought *uit 14F5 of Tower 2.

+/. The proper remedy is annulment of contract and not reformation when:a. Mista$e( fraud( inequitable conduct or accident has prevented a meeting of the minds of the

parties.b. " mutual mista$e of the parties causes the failure of the instrument to disclose their real

agreement.c. ne party was mista$en and the other $new believed that the instrument did not state their

real agreement( but concealed the fact of the former.d. "nswer not given.

+. This contract will cause damage or in,ury to one of the contracting parties or to a third person ?a. =escissibleb. Aoidablec. Knenforceabled. Aoid

+. ;orgonio( legal guardian of NiLo( 1+ years old( sells NiLo&s property worth 0144(444 for 094(444only( without court approval. The contract is

a. =escissibleb. Aoidablec. Knenforceabled. Aoid

+9. Cecilio had Bduardo $idnapped and tortured for refusing to sell his BduardoD land to Cecilio.Bduardo who could no longer bear the pans inflicted upon him signed a document of sale in favor of Cecilio. The sale isa. Aoidb. Aoidablec. Aalidd. "nswer not given

+. The contract entered into by the persons who cannot give consent isa. Aoid ab initio because actually there is no consent.b. Knenforceable only because the contract may be ratified.c. =escissible because of the damage caused to the person incapacitated.d. Aoidable as there is consent although vitiated or defective.

+>. 5atan bought a car from %ata( a minor( for 0144(444. ne wee$ later( 5atan discovered that %atawas a minor at the time of sale so he filed a complaint in court to annul the sale. ill the actionprosper7


14/29

a. Ges( %ata being a minor is incapacitated to enter into a contract.b. No( the right to annul the sale is given to %ata.c. Ges( %ata cannot file the action to annul the sale because he is a minor.d. No( unless there is lesion of more than of the value of the property.

/4. "nay( insane( sold his land to %engua( 21 years old for 0244(444. "nay spent 0124(444 in buyinganother piece of land( 01(444 for his clothing and medicines( 02(444 for food( and 0/4(444 helost to gambling. "fter annulment of the contract( how much must "nay return to %engua7a. Noneb. 0244(444c. 0124(444d. 014(444

/1. E pointed a dagger at * and compelled * to sell his land to % at a very cheap price. ho amongthe three can as$ for annulment of the contract7a. E onlyb. % onlyc. * onlyd. "nyone of them

/2. n 3uly 1( 241/( E entered into a contract with G. n @ebruary 14( 241( E discovered that fraudwas committed at the time he entered into the contract( a fraud that vitiated his consent. Theaction for annulment shall be broughta. ithin three years from the time of the fraud.b. ithin four years from @ebrauary 14( 241.c. ithin four years from the time E entered into the contract.d. n @ebruary 14( 241.

/+. Today( " and % entered into a contract. Three years later( " discovered that % used fraud in theperformance of their contract.a. " can no longer as$ for annulment because his right has already prescribed.b. " can as$ for annulment within / years from perfection of the contract.

c. " can still as$ for annulment within / years after the discovery of the fraud.d. " should have annulled the contract immediately upon its e'ecution.

//. " defective contract because it was entered into in the name of another without or in e'cess of authority( or it is verbal isa. Knenforceableb. Aoidablec. Aoidd. =escissible

/. hich of the following contracts is not unenforceable7a. That where both parties are incapable of giving consent.

b. That where one party is incapable of giving consent.c. That which is entered into in the name of another person by one who has given no authority

or legal representation.d. That which does not comply with the *tature of @rauds.

/. The following contracts are defective. hich one is unenforceable7a. Contract of sales by which a guardian acquires the property of the ward without the approval

of court.b. Contract of services whereby Mayor Mads entered into a contract with the city government to

the effect that Mayor Mads will be the contractor in the construction of a new city hall building.


15/29

c. Contracts whose ob,ects is outside the commerce of man.d. Those where both parties are incapable of giving consent to a contract.

/9. The following contracts( e'cept one( are void ab initio. hich is the e'ception7a. That whose ob,ect is outside the commerce of men.b. That whose ob,ect did not e'ist at the time of the transaction.c. That which contemplates an impossible service.d. That which is underta$en in fraud of creditors.

/. "bonal sold %artilet&s car in his "bonalD name to Camila without any authority from %artilet. Thecontract of sale isa. =escissibleb. Knenforceablec. Aoidd. Aalid

/>. The contract is without effect unless ratifieda. Marriage between first degree cousins.b. Contract of sale between two insane persons.c. Contract of sale between husband and wife.d. 5onation between husband and wife.

4. hich of the following contracts cannot be ratified7a. Those whose cause or ob,ect did not e'ist at the time of the transaction.b. Knauthori


16/29

b. "s wages of an employee or rent to a landlord.c. "s an annuity to a widow or representative of a deceased partner.

d. "s a share of the net profits of the business.

. " partnership must have a lawful ob,ect or purpose and must be established for the commonbenefit or interest of the partners. hich of the following instances is lawful7a. " partnership formed to furnish apartment houses which would be used for prostitution.

b. " partnership wherein the partners contributed all their present properties.c. " partnership for illegal gambling purposes.

d. " partnership formed to create illegal monopolies or contributions in restraint of trade.

. Type of partnership in which the partners en,oy practically all the profits.a. ;eneral partnershipb. Kniversal partnershipc. 6imited partnership

d. 5e facto partnership

9. 0artnership which compromises all that the partners may acquire by their wor$ or industry duringthe e'istence of the partnership is:

a. Kniversal partnership of present property.b. Kniversal partnership of profits.c. 0articular partnership

d. ;eneral partnership

. May contribute money( property or industry to the common fund:a. 6imited partner b. ;eneral partner c. %oth limited and generald. None of them

>. May be required additional contribution in case of imminent loss.a. Capitalist partner b. 6imited partner c. 8ndustrial partner

d. none of the above

14. ne who ta$es charge of the winding up of partnership affairs upon dissolution:a. *ilent partner b. 6iquidating partner c. stensible partner


11. Management of partnership is usually conferred upon thea. Manager b. 0residentc. 0artners


12. *ometimes termed as dormant partner a. 6imited partner b. Capitalist partner


17/29

c. *ecret partner


1+. ne who ta$es active part in the business( but is not $nown to be a partner by outside parties is:a. *ilent partner b. 5ormant partner c. Nominal partner

d. *ecret partner

1/. "lcantara( %eranda and Castoria are partners of "%C and Company. 8f 5aniela( a third person(allows his name to be used in the firm name of the partnership as "%C5 and Company( then hebecomes liable for beinga. 5ormant partner b. *ecret partner c. *ilent partner

d. Nominal partner

1. %ears the ris$ of loss of things contributed to the partnershipa. Contributing partner

b. 6imited partner c. 0artner contributing usufructory rights

d. "ll of the above

1. " limited partner who ta$es active part in the management of the firm becomes ?a. " managing partner b. 6iable as general partner c. " general partner

d. " general and limited partner at the same time

19. hich of the following statements is correct7

a. To be valid( a partnership must be in writing.b. " contract of partnership having a capital of 0(444 must be in a public instrument( otherwisevoid.c. here there is contribution of immovable property( the partnership contract must be dulynotari


18/29

24. hich of the following persons are not disqualified in forming a universal partnership7a. Those guilty of adultery or concubinageb. -usband and ifec. Those guilty of the same criminal offense( if the partnership is entered into a consideration of the same

d. %rother and sister

21. "( % and C formed a partnership with " and % as capitalist partners and C as industrial partner. Cengaged in a business for himself without the e'press consent of the capitalist partners. hich of the following remedies is best for " and %7a. B'pel C from partnershipb. They may appropriate all the benefits which C may have obtained in his separate businessc. Ma$e C liable for damages

d. B'pel C or appropriate all the benefits which C may have obtained in his separate business(with damages in either case.

22. " limited partnership was formed in 1>>/ by E as general partner and G and O as limited partners.8n 1>>( E and G got married. 5id the marriage dissolve or change the form of the partnership7

1st "nswer: Ges( partnership is dissolved by marriage because there is a change in equity andstatus among the partners.

2nd "nswer: No( because spouses can enter into a universal partnership.

a. %oth answers are correct.b. 1st answer is wrong( 2nd answer is correct.c. %oth answers are wrong.

d. 1st answer is correct( 2nd answer is wrong.

2+. "lterra and %avada agreed on May +4( 241 that they will contribute 024(444 each to form apartnership for the purpose of engaging in the business of buying and selling palay for a period of + years. They agreed to organi


19/29

d. % and C should automatically sue 5 to collect the 014(444.

2. 0roperty rights of a partner( e'cepta. To use specific partnership property for partnership purposes.b. To share in the profits.c. To participate in the management.

d. To e'ercise appraisal right.

29. " capitalist partner is engaged for his own account in an operation which is of the same $indbusiness in which the partnership is engaged. *aid partner can bea. Compelled to sell his interest in the partnership to the other capitalist partners.b. Compelled to dissolve or discontinue the operation of his business.c. Compelled to bring to the common funds of the partnership any profits accruing to him from histransactions.

d. 5enied his share in the profits of the partnership.

2. *tatement 1: The name of the partnership may not include the name of one or more of thepartners.

*tatement 2: The name of the partnership may include a name of a person and a partner of the

partnership.

a. TrueTrueb. True@alsec. @alse @alse

d. @alse True

2>. =efers to persons who represent themselves or consent to another or others to represent them toanyone that they are partners.a. ;eneral partnershipb. 6imited partnershipc. 0artnership by estoppel

d. None of the above.

+4. " partner in a partnership who is not really a partner( not being a party to the partnershipagreement but made liable as a partner for the protection of innocent third persons is $nown asa. *ecret partner b. 5ormant partner c. Nominal partner or partner by estoppel

d. "nswer not given.

+1. "ct 1: " managing partner renounced a partnership claim against the debtor.

"ct 2: The partner is engaged in sale of merchandise( a partner included in the business of the

partnership the sale of !shabu.#hich act requires consent of all partners7

"ct 1 "ct 2a. Ges Gesb. Ges Noc. No Ges

d. No No

+2. Cause of dissolution which does not violate the agreement between the partners( e'cept


20/29

a. Termination of the definite term or particular underta$ingb. B'press will of any partner who must act in good faithc. B'pulsion of any partner

d. Contravention of partnership agreement

++. hich of the following may be a cause of involuntary dissolutiona. B'press will of any partner

b. 8nsolvency of any partner c. Termination of the terms

d. B'pulsion of any partner

+/. hich of the following is not included in winding up or liquidation of a partnership7a. 0ayment of all partnership liabilities to third party creditors and partnercreditor.b. fficially ceases operation and bows out of e'istence.c. =eturn of partners& contributions

d. 5istribution of net assets among the partners

+. hich of the following is not included in the winding up of partnership7a. Consolidation of the partnership assets and receivables

b. 0ayment of all partnership liabilitiesc. =eturn of partners& respective contributions

d. 5istribution of profits

+. 5oes not cause partnership dissolutiona. 0artners& contribution which becomes a property of the partnership assetsb. 5eath of one partner c. 8nsolvency of any partner

d. 8rrevocable withdrawal of partners from the partnership without ,ustifiable reason.

+9. The partnership is insolvent. They are preferred as regards to the partnership property.

a. 0artnership creditorsb. 0artners& separate creditorsc. 0artners with respect to their capital

d. 0artners with respect to their profits

+. The change in the relation of the partners caused by any partner ceasing to be associated in thecarrying on of the partnershipa. =eali. This involves the process of liquidating partnership business after dissolutiona. 5issolutionb. inding upc. Termination

d. Consolidation

/4. "brera( %elle


21/29


22/29

/. " limited partner is not liable as a general partner. hich is not an e'ception7a. -is name appears on the partnership nameb. 8n addition to the e'ercise of his rights and powers as a limited partner( he ta$es part in thecontrol of the businessc. hen he is also a general partner

d. The surname which appears in the partnership name is also the surname of a general partner.

/>. hich of the following acts will ma$e a limited partner liable as a general partner7a. Mere dealing with a customer b. Mere consultant on one occasion with the general partnersc. *upervision over a superintendent of the business of the firm

d. "ll of the above

4. N 1: " substituted limited partner has the right to inquire any information or account of thepartnership transactions and to inspect the partnership boo$s.

N 2: " substituted limited partner shall be sub,ect to all restrictions and liabilities of the assigninglimited partner.

a. True( @alse

b. @alse( Truec. True( Trued. @alse( @alse

CORPORATION

1. " corporation where vacancies in the %oard of 5irectors are filled only by the remaining member of the %oard is

a. pen corporationb. Close corporationc. Corporation soled. )uasiFpublic

2. -ow many numbers of votes of the %5s are required to change the name of a corporation7a. 2+ of all members of the boardb. 2+ vote of all presentc. Ma,ority vote of all present constituting a quorumd. Ma,ority vote of the board

+. ne of the following does not require stoc$holder&s approvala. Merger or consolidationb. Change of corporate namec. 8nvestments of corporate funds for a purpose outside of the main purpose of the

corporation

d. 5eclaration of cash dividend

/. " corporate doctrine which states that the stoc$holders are not personally liable for corporatedebts

a. Trust fund doctrineb. *eparate legal entityc. =ight of successiond. 0iercing the veil of corporate fiction

. "rticles of incorporation and organi


23/29

b. 0*Bc. *BCd. N*

. Cash dividend as distinguished from stoc$ dividenda. 8t does not involve any disbursementb. 8t is still part of the corporate assetc. 8t increases legal capitald. 8t is declared by the %oard of 5irectors

9. The voting requirements for delegating power to adopt( amend or repeal the byFlaws in favor of the board of directors is:

a 2+ vote of the outstanding sharesb Ma,ority of the vote of the directors plus the vote of a ma,ority of the outstanding sharesc Ma,ority vote of the director plus the vote of 2+ of the outstanding sharesd 2+ of the vote of the directors

. ho may be removed as a director without cause during their term of service7a. " director representing the ma,ority stoc$holders.

b. " director representing the minority stoc$holders.c. Bither aD or bDd. Neither aD nor bD because they can only be replaced upon the e'piration of their term of

office though the election of another in their place since the removal is without cause

>. These statements are presented to you:8. The members of board of directors of a corporation may provide for themselves

compensation other than per diems.88. " director who receives compensation as such may also be given separate compensation

if the serves the corporation in another capacity li$e the president who is required to be adirector.

8n your evaluation of the foregoing statements:a. %oth statements are true.b. %oth statements are false.c. nly *tatement 8 is true.d. nly *tatement 88 is true.

14. The power to invest corporate funds in another corporation or business or for any other purposeas a corporate power is classified as a anD

a. B'press power b. 8ncidental power c. 8mplied powerd. 5iscretionary power

11. Three of the following are attributes of a corporation. hich is not7a Created by agreement of the incorporatorsb "n artificial beingc -as a right of successiond -as powers( attributes and property e'pressly authori


24/29

down payment of 4H with the balance to be paid after +4 days. hat $ind of contract wasentered into between * and "%C Corporation7

a. Contract of saleb. Contract of purchasec. Contract of subscriptiond. *ome other contract.

1+. The nationality of the corporation is determined by the place of the controlling stoc$holders. Thistest is

a. Controlling testb. 5omicile testc. 8ncorporation testd. Management test

1/. The following are acts within the implied powers of a corporation e'cepta. "cts is the usual course of businessb. "cts to protect debts owing to the corporationc. Bmbar$ing in different businesses in which it is not a part of the regular businessd. "cts to increase its business

1. The Meralco( %ayantel( Cebu 0acific "ir( and Aictory 6iner area. )uasiFpublic corporationb. Tramp corporationc. )uasi corporationd. 0ublic corporation

1. @or the past three years( EGO Corporation has been earning tremendously in e'cess of 144H of the corporation&s paid in capital. "ll of the stoc$holders& have been claiming that they share in theprofits of the corporation by way of dividends but the board of directors failed to lift its finger. 8sthe corporation obliged to declare dividends7

a. No( because the corporation can retain surplus profits in e'cess of 144H of its paidFupcapital

b. Ges( because a corporation cannot retain surplus profits in e'cess of 144H of its paidFupcapital always.

c. Ges( because a corporation as a rule cannot retain surplus profits in e'cess of 144H of itspaidFin capital.

d. No( because it is a management prerogative of the board of directors whether or not it willdeclare dividends.

19. hich of these conditions comply with the minimum requirement of law to corporate formation7

"uthori


25/29

and his vote should not be necessary for the approval of the contract in the meeting of board of directors:

a. f the corporation where his interest is substantial.b. f the corporation where his interest is merely nominal.c. f both corporations.d. f neither corporation for as long as there is no fraud and the contract is fair and

reasonable under the circumstances because he has a personality separate and distinctfrom both corporations.

1>. *hares that may be issued at a price higher than 0.44 per share are:a. 0ar value shares.b. NoFpar value shares.c. %oth aD and bD.d. Neither aD nor bD.

24. 5irector "ngela is instrumental in ma$ing a contract on behalf of 5ana Corporation of whoseboard she is a member( with %ea Corporation of which she has a larger interest

a. Corporate opportunityb. 6imited capacityc. 8nterloc$ing directorated. %usiness ,udgment rule

21. " stoc$ that is issued without consideration or below par value or the issued price is $nown as:a atered stoc$b 5elinquent stoc$c =edeemable stoc$d 0referred stoc$

22. These statements are presented to you:8. " director is an agent of the corporation by virtue of his being elected as a director.

88. " director who owns the controlling interest in a corporation has only one vote in themeeting of board of directors.

8n your evaluation of the following statements.

a. %oth statements are true.b. %oth statements are false.c. *tatement 8 is trueJ *tatement 88 is false.d. *tatement 8 is falseJ *tatement 88 is true.

2+. "mendment of the articles of incorporation requires

Aote of 5irectors Aote of stoc$holders

a. Ma,ority 2+ of outstanding capital stoc$b. Ma,ority of quorum 2+ of outstanding capital stoc$

c. TwoFthirds Ma,ority of outstanding capital stoc$d. Ma,ority Ma,ority of quorum

2/. hich of these purpose can be combined in ,ust one corporation7a %an$ and trust purposesb Bducational and insurance purposesc =ailroad and ban$ purposesd 8nsurance and railroad purpose

2. These statements are presented to you:


26/29

8. " person may become a stoc$holder of a corporation through the receipt of a stoc$dividend given to him in payment of services previously rendered.

88. " contract of subscription has for its ob,ect unissued or issued shares such as treasuryshares.

8n your evaluation of the following statements.

a. %oth statements are true.

b. %oth statements are false.c. nly *tatement 8 is true.d. nly *tatement 88 is true.

2. hich of the following may be held outside the 0hilippines78. %oard of 5irectors meetings88. Members meeting of a non stoc$ corporation888. *toc$holders meeting of a corporation going to public

a 8 onlyb 8 and 88c 88 and 888

d 8( 88( and 888

29. hich of the following documents may be submitted before or after incorporation7a Aerification certificate as to the name of the corporation.b %yFlawsc Certificate of ban$ deposit as to the paidFup capital.d "rticles of incorporation

2. hich of the following conditions will allow corporation formation and *BC registration7

"uthori4(444 12(44 +(12

b. 4(444 1(444 (444

c. 124(444 2(444 (444

d. 144(444 24(444 (444

2>. *amorano is the owner of 44 shares of stoc$ of Center *ales Corporation whose articles of incorporation provide for directors. 8n the annual election of directors( the following ran for theposition of director: "banes( %aricuatro( Castillo( 5oromal( Blmora( and @ilamor. *amorano as$syou which of the following is the incorrect way of casting his votes.

a. 44 votes each for each candidates.b. 44 votes each for "banes( %aricuatro( Castillo( 5oromal and Blmora.c. 2(44 votes for "banes.d. 1(444 votes for "banes( 1(444 votes for %aricuatro( and 44 votes for Castillo.

+4. hich of the following is not required to be included in the "rticles of 8ncorporation7a. 5uties of the presidentb. Name of the corporationc. 0eriod of e'istenced. 6ocation of the principal office


27/29

+1. The article of incorporation of an Baste' Computer Corporation provide for 1 directors. hichof the following is invalid concerning its byFlaws7

a. That the quorum in the meetings of directors be at least directorsb. That the quorum in the meetings of directors be at least 14 directors.c. That the quorum in the meetings of directors be at least 9 directors.d. The byFlaws do not mention anything about the quorum in the meetings of directors.

+2. hich of the following e'presses the minimum capital formation of a corporation7

"uthori


28/29

c. 8ncorporator d. Treasurer

+9. hich of the following is true7a. 5elinquent stoc$ can be votedb. Knpaid stoc$ is necessarily delinquentc. 5elinquent stoc$ cannot be sold at public auctiond. Knpaid stoc$s are entitled to payment of cash dividend

+. hich of the following qualifications is necessary in order that one may be elected president of the corporation7

a. -e must be a citi. " corporation operating under the color of lawa. Aoid corporationb. Aoidable corporationc. 5e ,ure corporationd. 5e facto corporation

/4. hich of the following is not a qualification of directors of a stoc$ corporation7a Bach director must be the owner of at least 1 share of stoc$.b *uch shares of stoc$ must stand in their name in the boo$s of the corporation during their

term as directors.c Ma,ority of the directors must be citi


29/29

88. " corporation can deny the e'ercise of a stoc$holder of his preFemptive right.

a. True( Trueb. True( @alsec. @alse( Trued. @alse( @alse

/. These do not form part of the outstanding capital stoc$

a. %onus sharesb. Treasury sharesc. @ounders& sharesd. =edeemable shares

/9. hich of the following would result to the automatic dissolution of a corporation7a Continuous inoperation for a period of at least years.b @ailure to formally organi

Documents

Ampongan and Abaño Bus.Law