BUSINESS LAW TESTBANKS / REVIEWERS
Obligation to deliver 50 cavans of rice
1. On September 21, 2010, Piolo agreed to
sell his only carabao to Sam and Sam
agreed to pay the price of P25,000 if Sam
will pass the October 2010 CPA
Examination. The list of successful
examinees was released on October 21,
2010 and Sam is one of those who passed
the examination. As a result,
a. Piolo is entitled to the P25,000 price
plus interest beginning September 21,
2010.
b. Sam is entitled to the carabao and its
fruits beginning September 21, 2010.
c. Sam is entitled to the carabao
beginning September 21, 2010 and to
its fruits beginning October 21, 2010.
d. Piolo shall deliver the fruits of the
carabao and Sam shall pay the interest
on the price beginning September 21,
2010.
2. The following are elements of an
obligation, except
a. Active and passive subjects
b. Efficient cause
c. Prescription
d. Vinculum
3. A, B, and C owe W, X, Y, and Z the sum of
P120,000. If the obligation is due, which of
the following is not correct?
a. A is liable only for a total of P40,000.
b. W can only collect P10,000 from C
c. B can be required to pay P40,000 to
any of the creditors
d. Y can only collect a total of P30,000
4. The following pertains to facultative
obligations, except:
a. Comprehends only one object or
prestation which is due
b. Choice pertains only to the debtor
c. Fortuitous loss of all prestations will
extinguish the obligation
d. Not given.
5. An obligation subject to the happening of
a future and certain event is
a. Conditional obligation
b. Suspensive conditional obligation
c. Resolutory conditional obligation
d. Obligation with a period
6. S1: The debtor shall lose the right to make
use of the period when he does not furnish
any guaranty or security to the creditor.
S2: In an obligation subject to a
suspensive period, what is suspended is
birth of the obligation.
a. True;true b. true;false
c. false;false d. false;true
7. Which of the following is not a generic
obligation?
a. Obligation to pay P1,000,000
b. Obligation to deliver 1999 Nissan
Sentra Series III
c.
d. Obligation to give a delimited generic
object
8. “I will give you my car provided that if I
like to have it back, you will return the
same to me.”
a. The obligation is void, because the
fulfillment depends upon the will of the
debtor.
b. The obligation is void, because the
fulfillment depends upon the will of the
creditor.
c. The obligation is valid because the
condition merely causes the loss of
rights already acquired.
d. Both A and B.
9. S1: Dog obliged himself to give Cat a
specific car tomorrow. If Dog failed to
deliver tomorrow after demand is made,
Cat may compel Dog to do his obligation
and may ask for damages.
S2: Darna obliged to deliver a car to
Captain Barbel tomorrow. If Darna failed to
deliver tomorrow after demand is made,
Captain Barbel’s right is to ask a third
person to deliver a car to him at the
expense of Darna plus damages.
a. Both statements are true.
b. Both statements are false.
c. Statement 1 is true while statement 2
is false.
d. Statement 1 is false while statement 1
is true.
10. Which of the following is not a conditional
obligation?
a. D to give C P1,000 if C passes the
examination.
b. D to pay C P1,000 if he has the means.
c. D to give C a horse if C marries X.
d. D is to use C’s car until C returns from
Davao.
11. It is the voluntary administration of the
property of another without his consent.
a. Negotiorum Gestio c. Quasi-delict
b. Solutio Indebiti d. Contract
12. A, B and C are solidary debtors of X and Y,
solidary creditors, for P60,000. X makes a
demand to A but the latter paid Y. In here,
the obligation is not extinguished.
A and B solidary debtors of X, Y and Z,
solidary creditors. X demands payment
from A, but B, upon whom no demand is
made paid Z the entire obligation. In here,
the obligation is totally extinguished.
a. True;true b. true;false
c. false;false d. false;true
13. Elmo is obliged to give Bert, either a ring
worth P5,000; or bracelet worth P4,500; or
a watch worth P4,000. All the objects were
lost due to Elmo’s fault in the order stated.
a. Elmo’s obligation is extinguished.
b. Elmo’s obligation is to pay the value of
the ring plus damages.
 c. Bert’s right is to demand the value of
any of the objects plus damages.
d. Elmo’s obligation is to pay the value of
the watch plus damages.
14. Culpa aquiliana as distinguished from
culpa contractual:
a. Proof of due diligence in the selection
and supervision of employees is not
considered a defense.
b. Proof of the contract and its breach is
sufficient to warrant recovery.
c. The negligence of the defendant is
only an incident in the performance of
the obligation.
d. The source of liability is the negligent
act of the person causing damage to
another.
15. S1: When one of the parties has brought
an action to enforce the contract, he
cannot subsequently ask for its
reformation.
S2: The injured party may seek rescission
even after he has chosen the fulfillment of
the obligation if the latter should become
impossible.
a. True; true b. true;false
c. false;false d. false;true
16. S1: An oral sale of land made by its owner
is unenforceable.
S2: Sale of land made by an agent without
written authority from owner thereof is
void.
a. False;false b. false;true
c. true;true d. true;false
17. S1:The principle of autonomy of contracts
means that the contracting parties as a
rule may agree upon any stipulation,
clause, term and condition.
S2: Relativity of contracts means that
contracts take effect not only between the
parties but also their heirs and assigns.
a. False;false b. true;true
c. false;true d. true;false
18. It is an obligation which is based on
positive law and gives right to enforce its
performance
a. Natural obligation
c. Moral obligation
b. Civil obligation
d. legal obligation
19. Which of the following is demand
necessary to make the debtor in delay in
the performance of his obligation?
a. When the time of performance is of the
essence
b. When the time of performance has
been stipulated
c. When the law so provides
d. When demand would be useless
20. Liability for damages in the performance
of an obligation arises from the following,
except
a. Negligence
b. Acts or omissions punished by law
c. c. Delay
d. Fraud
21. Liability for damages arising from fraud is
demandable and there can be a waiver of
an action for past fraud.
There can be a waiver of an action for
future negligence but not fraud.
a. Both statements are false
b. Both are true
c. First is true, second is false
d. Second is true, first is false
22. Delia borrowed from Celia a sum of money
with a stipulated rate of interest to be paid
in three equal monthly installments from
January to March. Delia paid an amount for
which the latter issue a receipt stating
that the payment is for the month of
February. In this case,
a. The installment for the month of March
is also considered paid.
b. The installment for the month of
January is conclusively presumed to
have been paid.
c. The installment for the month of
January is distributably presumed paid.
d. The installment for the month of
January is not presumed paid.
23. A obliged himself to deliver the cans of
powdered milk of B from his warehouse in
Pangasinan to Manila. While his truck was
traveling on the North expressway, it was
hi-jacked by a band of robber who also
took the cans of milk belonging to B. Is A
liable for the loss of the goods?
a. No, because they were generic things
and as they cannot be lost.
b. Yes, because he was in possession of
the same at the time of the loss and
therefore presumed at fault.
c. Yes, because there was no stipulation
exempting him from loss in case of
fortuitous event.
d. No, because the loss was due to
fortuitous event.
24. A, B and C bound themselves to deliver to
X a specific car worth P3M. Due to the
fault of A, the car was lost. In this case
a. X can claim damages from any one of
the three for his proportionate part of
liability because the obligation is
indivisible.
b. X can claim only from A the whole
amount of damages other than the
value of the car.
c. Since it is solidary liabilities for
damages, X can claim the same from
any of the three.
d. Only A is liable for damages although B
and C are liable for their respective
shares in the obligation.
25. Dennis owes Cart P1M. Xanabelle, without 30. A defective contract where damage or
the knowledge or against the will of lesion is essential is
Dennis paid Cart P2M. Can Xanabelle get a. Rescissible c.
reimbursement from Dennis? Unenforceable
a. P2M by way of reimbursement from b. Voidable d. Void
Dennis to prevent unjust enrichment
31. A defective contract because it is entered
on the part of Dennis at the expense of
into in the name of another without or in
Xanabelle.
b. P1M only for that is the extent of excess of authority, or it is verbal is
a. Unenforceable c. Void
benefit of Dennis.
b. Voidable d.
c. No reimbursement because the
Rescissible
payment was not proper being without
the knowledge or against the will of 32. The following even if not in public
Dennis. instrument are valid, binding and
d. P1M plus interest from the time of
enforceable except
payment until reimbursement. a. Negotiable instruments
b. Sale of land, either by the owner or
26. Payment made by a third person is valid to
agent with written authority
extinguish the obligation of the debtor to c. Agency, pledge, mortgage
the creditor in the following cases, except d. Partnership contract wherein
a. After payment to the creditor, the third immovables are contributed
person acquires the creditor’s right
b. When the creditor ratifies the payment 33. Aguilar sold to Beddie his dog with the
to the third person agreement that delivery shall be after one
c. When through the creditor’s conduct, week from sale and the payment of the
the debtor was led to believe that the price after two weeks from delivery. If the
third person had authority to receive dog shall produce offspring, it shall belong
payment to:
d. When the third person is subrogated to a. If produced before the sale, it shall
the rights of the creditor. pertain to the seller
b. If the puppy shall exist before the
27. Sister offered his car to Brother for P1M
actual delivery, it shall pertain to the
and giving the latter one week to decide.
seller
Brother in turn gave Sister P1,000. In this c. The fruits that shall exist after delivery
case, there is will only be the ones to pertain to the
a. Contract of sale of the car with the
buyer
P1,000 as earnest money d. The fruits after the sale but before
b. Contract of option with the P1,000 as
delivery shall pertain to the buyer if so
option money
stipulated by the parties to the sale
c. Contract to sell of the car at B’s option
d. Contract to sell of the car at S’s option
34. A sold B’s car in B’s name to C without any
28. Anmony advertised in the newspaper his authority from B. The contract of sale is
a. Rescissible b. Voidable
parcel of land wanting to sell the same for
P1M. Boy personally went to the former c. Unenforceable d. Void
with cash in hand to buy the subject
parcel of land. In this case, 35. With written authority from his principal,
a. Anmony cannot anymore reject Boy as the agent sold verbally the land of the
buyer of his land principal. The sale is
b. Anmony can still reject Boy as an a. Rescissible b. voidable
offered in the purchase of land c. unenforceable d. Void
c. Anmony can reject the offer of Boy
unless he properly consigns with the 36. A, as agent of P with oral authority, sold
court his payment for the land P’s land in public instrument. The sale is
d. Anmony cannot evade his obligation as a. Rescissible b. voidable
seller to Boy c. unenforceable d. Void

29. The contract entered into by the persons
who cannot give consent is
a. Void ab initio because actually there is
no consent
b. Unenforceable only because the
contract may be ratified
c. Rescissible because of the damage
caused to the person incapacitated
d. Voidable as there is consent although
vitiated or defective
37. A, agent of P, in excess of authority,
entered into a contract in the name of P
with X who knew of the lack of authority
and P did not ratify the contract. The
contract is
a. Rescissible b. voidable
c. unenforceable d. Void
38. S sold his car to B. No agreement was
made on the time and place of delivery
and payment. Hence
 a. The time and place of delivery shall be
at the time and place of payment of
the price
b. The time and place of delivery and
payment not having been agreed
upon, the sale shall be void
c. The seller may demand payment first
before delivery of the thing sold
d. The buyer may demand delivery first
before payment
39. A owes B P20,000 which became due and
payable last June 23, 2010. On that date,
A offered B P10,000, the only money he
then had, but B refused to accept the
payment. A, thereafter met C, B’s 23 year
old son, to whom he gave the P10,000
with the request that he turn the money
over to B. The money was stolen while C’s
possession. How much may B still recover
from A?
a. P20,000 c. P15,000
b. P10,000 d. P -0-
40. If a third person pays an obligation. What
are the rights, which are available to him if
he pays the obligation with the knowledge
and consent of the debtor?
1st answer – He can recover from the
debtor the entire amount, which he has
paid.
2nd answer – He subrogated to all of the
rights of the creditor.
a. Both answers are correct.
b. Both answers are wrong.
c. Only the first is correct.
d. Only the second is correct.
41. Indivisibility as distinguished from
solidarity.
a. Plurality of subject is indivisible.
b. When the obligation is converted into
one of indemnity for damages because
of breach, the character of the
obligation remains.
c. Refers to the legal tie or vinculum.
d. Refers to the prestation which
constitutes the object of the obligation.
42. Demand is not needed to put the debtor in
default, except
a. When demand would be useless
b. When the parties so stipulate
c. When the time is of the essence
d. When the fixing of the time is the
controlling motive for the
establishment of the contract
43. Culpa aquiliana as distinguished from
culpa contractual
a. Proof of due diligence in the selection
and supervision of employees is not
available as a defense
b. Proof 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
44. A passenger on a truck was hurt but in a
criminal case against the driver, said
driver was acquitted. The victim now sues
the owner of the truck for culpa
contractual. May the suit still prosper?
a. No, this will constitute double jeopardy
b. No, the acquittal means that the guilt
of the accused was not proven by
proof beyond reasonable doubt
c. Yes, it is sufficient for him to prove the
existence of the contract of carriage
and the injuries suffered
d. Yes, provided he can prove the
negligence of the driver
45. If the obligor binds himself to perform his
obligation “ as soon as he shall have
obtained a loan” from a certain bank. This
obligation is
a. With a term
b. with a period
c. With a suspensive condition
d. with a resolutory condition
46. An action to impugn the acts of a debtor
intended to defraud the creditor is
a. Accion reivindicatoria
b. accion redhibitoria
c. Accion subrogatoria
d. accion pauliana
47. A owes B P11,000 due on July 2, 2010. B
owes A P6,000 due on July 3, 2010 and
P4,000 due on July 10, 2010. B owes C
P11,000 due on July 3, 2010. On July 2,
2010 B cannot pay C so B assigns to C her
credit of P11,000 against A, without the
knowledge of A. On July 10, 2010 C tries to
collect from A the P11,000. How much can
C compel A to pay?
a. P11,000 c. P5,000
b. P9,000 d. P1,000
48. If the obligation of the debtor is “I will pay
you my debt after I have arrived from
abroad.” The obligation is
a. Valid c. voidable
b. Void d. unenforceable
49. There is novation of the obligation if
1. The period for payment is shortened
from 5 years to 3 years.
2. The period for payment is extended
form 3 years to 5 years.
a. True; true b. true;false
c. false;true d. false;false
50. This is a real defense
a. Fraud is inducement
b. Want of delivery of an incomplete
instrument
c. Want of consideration
 d. Duress in the absence of physical
pressure
51. This contract is without effect unless
ratified
a. Marriage between first degree cousin
b. Contract of sale between a guardian
and his ward
c. Contract of sale between two insane
persons
d. Donation between husband and wife
52. Dacion en pago as distinguished from sale
a. The cause is the price
b. The object exists and is specific
c. There is no pre-existing obligation
d. There is a greater degree of freedom in
fixing the price
53. A contract as a rule must be in writing to
be valid.
A taxpayer is not entitled to interest in the
overpayment of tax subject of a refund
because an obligation derived from law is
not presumed.
a. Both statement is/are true
b. First is false, second is true
c. Both are false
d. Second is false, first is true
54. S1: As a general rule, the extrajudicial
expenses required by the payment shall
be for the account of the creditor.
S2: If there is no stipulation and the thing
to be delivered is specific, the place of
payment shall be the domicile of the
debtor.
a. True;true b. true;false
c. false;true d. false;false
55. S1: Consignation without tender of
payment is sufficient if two or more
persons claim the same right to collect.
S2: When the debt of a thing certain
proceeds from a criminal offense, the
debtor shall be exempted from the
payment of the price of the thing is lost
through a fortuitous event.
a. Both statements are true.
b. Both statements are false.
c. S1 is true; S2 is false.
d. S1 is false; S2 is true.
56. S1: The party may recover, if public
interest will be subserved, money or
property delivered by him for an illegal
purpose, provided that he repudiates the
contract before the purpose has been
accomplished.
S2: If an illegal contract constitute a
criminal offense and both parties are
guilty, both shall be criminally prosecuted
but they may keep the object of the
contract.
a. True;true b. true;false
c. false;false d. false;true
57. The meeting of minds manifests consent
after the acceptance upon the thing and
the cause which are to constitute the
contract. Which of the following constitute
a definite offer?
a. An offer made through an agent.
b. Business advertisements of things for
sale.
c. Advertisements for bidders.
d. None of the above.
58. S1: If the cause is not stated in the
contract it is presumed that it is lawful.
S2: The action for rescission in subsidiary;
it cannot be instituted except when there
is no other legal means to obtain
reparation for damages suffered.
a. Both are true c.
st
Only 1 is true
b. Both are false d.
st
Only 1 if false
59. Simon offers to sell his house to Pedro for
P200,000. Pedro asks him if he would
accept P185,000.
1st: Because of ambiguity, both offers are
terminated by operation of law.
2nd: Pedro’s response is a more inquiry, the
P200,000 offer by Simon is still in force.
a. True;true b. true;false
c. false;true d. false;false
60. Debtor’s fault in real obligation is called
a. Mora accipiendi
b. Mora solvendi ex-re
c. Mora solvendi ex-persona
d. Compensation-morae
61. ) In order to amend the corporate by-laws,
what vote is required to happen?
a.) 2/3 votes of the Board of Directors and
2/3 votes of the outstanding capital
stockanding capital stock b) Majority
votes of the Board of Directors and 2/3
votes of the outstanding capital stock c)
2/3 votes of the Board of Directors and
majority vote
b.) Majority votes of the Board of
Directors and majority votes of the
outstanding capital stock
c.) 2/3 votes of the Board of Directors and
majority votes of the outstanding capital
stock
d.) Majority votes of the Board of Directors
and 2/3 votes of the outstanding capital
stock
62.) Ondoy pledged his motor bike to Peping for
P5,000.00. When Ondoy failed to pay his
obligation, Peping sold the motor bike at public
auction to the highest bidder for P4,000.00.
Therefore:
a.) Peping can recover P1,000.00 from Ondoy if
it is stipulated
b.) Peping cannot recover P1,000.00 from
Ondoy even if there is stipulation
c.) Peping can recover P1,000.00 from Ondoy
even without stipulation
d.) Peping cannot recover P1,000.00 from
Ondoy unless stipulated that he can
63.) Dacion en Pago differs from a Sale in the
sense that in latter
a.) the obligation is extinguished once the offer
is accepted
b.) there is less freedom in the determination of
the price of the object
c.) the cause of the contract is the price
d.)there is pre-existing credit between the
parties
64. Which of the following statements is false?
a.) Obligations arising from contracts have
the force of law between the contracting
parties and must be complied with in good
faith.
b.) Fraud committed in the performance of an
obligation gives the injured party the right
to annul the contract.
c.) Not only the parties, but their heirs
and assigns are bound by their
contract.
d.) Generally, the debtor is not liable for the
non-performance of his obligation due to
fortuitous event.
65. Which of the following is a mode for the
extinguishment of agency?
a.) Death of the principal without the
knowledge of the agent
b.) Filing of a monetary claim by the
agent against his principal
c.) Revocation by the agent
d.) Partial accomplishment of the agency
66. A Corporation may be dissolved voluntarily or
involuntarily based on several causes. Which of
the following is a cause for the automatic
dissolution of a corporation?
a.) Failure to file the required report to the
Securities and Exchange Commission
b.) Failure to continue the business for at
least five (5) years
c.) Failure to formally organize and
commence business within two years from
the issuance of the certificate of
incorporation
d.) Failure to file its corporate by-laws with
the Securities and Exchange Commission within
thirty days from the issuance of the Certificate of
incorporation
67. Dan mortgaged his house and lot to Casey to
secure his loan amounting to P1M. It is stipulated
that Dan cannot sell his house and lot without the
consent of Casey while the loan remains unpaid.
Before the maturity date, Ben offered to buy the
house and lot of Dan for P1.6M. In this scenario:
a.) Dan cannot sell his house and lot because
of the prohibition in the contract.
b.) Dan cannot sell his house and lot without
the consent of Casey.
c.) Dan can sell his house and lot provided he
pays the loan to Casey.
d.) Dan can sell his house and lot despite
the prohibition in the contract.
68. Toto sold the car of Popo without authority.
When the buyer Momo demanded for the key of
the car from Popo, after paying the purchase
price, Popo gave the key of his car to the Momo.
The sale made by Popo to Momo is valid while an
agency between Popo and Toto is created by:
a.) estoppel
b.) contract
c.) operation of law
d.) ratification
69. Simon transferred to Peter the ownership of
his car, worth P500,000.00 in consideration of the
amount of P240,000.00 plus a hand tractor worth
P260,000.00. The contract between them is
actually a form of:
a.) partly sale and partly barter
b.) sale
c.) commodatum
d.) barter
70. Ann mortgaged his house to Boy to secure
his loan amounting to P1,500,000.00. Due to the
negligence of the typist, the document signed by
Ann and Boy shows that the house of Ann was
sold to Boy for P1,050,000.00 only. Which of the
following statements is correct?
a.) The contract of sale between Ann and Boy
rescissible because of the damage suffered by
Ann
b.) The contract of sale between Ann and Boy
is relatively simulated
c.) The contract of sale between Ann and Boy
is voidable because there is a mistake
d.) The contract of sale between Ann and
Boy may be reformed
71. S1: In a natural obligation, the creditor
has the right to enforce the performance
thereof it being based on positive law.
S2: Solutio indebiti and negotiorum gestio are
quasi-contracts that give rise to civil
obligations.
a. True; True b. True; False
c. False; False d. False; True
72. One of the following is a determinate
thing. Which is it?
 a. A cow c. When without just cause, the
b. A horse creditor refuses to give a receipt.
c. A Toyota car with engine no. 12345, body d. When two or more persons claim
no. 34888 and plate no. JDS 111 the same right to collect.
d. A ring with diamond embellishment
79. S1: Mara borrowed P10,000 from Clara. On
73. In which of the following is the debtor still due date, Mara paid the debt to Clara who
liable despite the fortuitous event causing the had become insane. If Clara kept only P6,000
loss of the thing? and threw away P4,000, then payment will be
a. The thing lost is a specific thing.
valid for only P6,000.
b. The performance of the obligation has
S2: Lea makes a note payable to bearer and
become impossible.
delivers it to Mateo. The note, however, is lost
c. The nature of the obligation does not
by Mateo and is picked up Lyka. Lyka goes to
require the assumption of risk.
d. When the law or the obligation expressly Lea to collect on the note. Lea pays Lyka
so provides. believing in good faith that Lyka is the
intended bearer. Lea is still not released from
74. S1: Liability from damages arising from liability.
fraud is demandable and there can be a a. True; True; b. True; False
waiver of an action for past fraud. c. False; Fasle
S2: There can be a waiver of an action for d. False; True
future negligence but not fraud.
a. True; True b. True; False 80. Payment must be made in the following,
except:
c. False; False d. False; True a. If there is a stipulation, then in the
place designated.
75. These are acts or omissions of diligence b. If there is no stipulation and the
that cause damage to another, there being no obligation is to give a determinate thing,
contractual relation between the parties. wherever the thing might be at the time
a. Culpa contractual the obligation was constituted.
b. Culpa criminal c. If there is no stipulation and the
c. Quasi-delict obligation is to give a generic thing, then
d. Fraud at the domicile of the obligee.
d. If there is no stipulation and the
76. S1: The debtor incurs delay from the time
obligation is to do, then at the domicile of
the creditor demands fulfillment of the
the debtor.
obligation but the debtor fails to comply with
such demand. 81. In order that condonation may extinguish
S2: In reciprocal obligations, where the
an obligation involving a movable property
obligations arise out of the same cause and
whose value exceeds P5,000.00 –
must be fulfilled at the same time, from the a. It is sufficient that the condonation
moment one of the parties fulfills his and the acceptance are in writing, even a
obligation, delay by the other begins private one.
notwithstanding the absence of demand. b. It is required that the condonation
a. True; True b. True; False and the acceptance must be in a public
instrument.
c. False; False d. False; True c. The delivery of the document
evidencing the debt is sufficient since the
77. Which of the following is a remedy of the
property is movable.
creditor to enforce payment of his claims
d. The condonation and the
against the debtor?
acceptance may be made orally.
a. Pursue the property in the
possession of the debtor including those
82. S1: A debtor who is adjudged an insolvent
exempt by law.
and subsequently discharged by the court
b. Exercise all the rights and bring all
shall be released from obligations of all debts
the actions of the debtor including those
but he thereafter cannot engage in business
personal to him.
c. Impugn the acts which the debtor and acquire property until he has paid his
may have done to defraud his creditors. former debts.
d. All of the above. S2: Dwarfina owes Dennis P100,000. With the
consent of both, Jennelyn, a third person pays
78. Consignation alone without tender of Dennis P50,000.00. Thus, Dennis and Jennelyn
payment is sufficient in the following cases, are now creditors of Dwarfina at P50,000.00
except: each. If Dwarfina has only P50,000.00, it will
a. When the creditor is absent or be divided by Dennis and Jennelyn equally.
unknown or does not appear at the place a. True; True b. True; False
of payment. c. False; False
b. When the creditor presents the title d. False; True
to the obligation for collection.
83. The following cannot give consent to a c. A contract where a party was
contract, except; compelled to assign his property to the
a. Minors, except sale of necessaries other to pay a just debt because the latter
in life threatened to sue him in court if he does
b. Insane persons not pay his debt.
c. Demented persons d. A contract of donation of a parcel
d. Deaf-mutes who do not know how
of land which a party signed because the
to read and write.
other party threatened to burn his house.
84. It is the manifestation of the meeting of
89. The following statements pertain to the
the offer and the acceptance upon the thing
cause of a contract. Which statement refers to
which are to constitute the contract
a. Consideration motive?
b. Contract a. It is the essential reason for a
c. Consent contract.
d. Cause b. It is always known to the
contracting parties.
85. A solemn or formal contract has the c. Its illegality does not affect the
following essential elements: validity of the contract.
a. Consent of the contracting parties, d. There will be no contract without it.
object certain and cause or consideration.
b. Consent of the contracting parties, 90. One of the following is not a requisite of
object certain, cause or consideration and an object of contract. Which is it?
delivery of the object. a. It must be within the commerce of
c. Consent of the contracting parties, men.
object certain, cause or consideration and b. It must not be intransmissible.
c. It must be contrary to law, morals,
formalities required by law.
d. Consent of the contracting parties, good customs, public order or public
object certain, delivery of the object and policy.
d. It must be determinate as to its
formalities required by law.
kind or if its quantity is not determinate, it
86. S1: A contract as a general rule must be must be possible to determine the same
written to have force and effect as a valid without the need of a new contract
agreement. between the parties.
S2: A formal or solemn contract is one that
91. S1: If the contract is not in the form
must be in writing to be valid.
a. True; True b. True; False provided by law for its validity, the contract is
c. False; False void.
S2: if the contract is not in the form provided
d. False; True
by law for its enforceability, the contract,
87. An employee embezzled a sum of money though it has all the essential requisites for
from her employer, and in order that she validity, cannot be enforced against the party
would not be prosecuted, her husband signed sought to be charged.
a promissory note to pay the amount a. True; True b. True; False
embezzled, with interest to the victim. Which c. False; False
is correct? d. False; True
a. The husband is liable because the
note was executed by the husband 92. Acceptance of an offer made by the letter
voluntarily or telegram shall bind the offeror. From the
b. The recovery shall be limited only time the
to the amount embezzled without any a. Offeree accepted the offer
b. Acceptance came to the knowledge
interest
c. The employer may recover from of the offeror
c. Offeree sent his letter or telegram
the husband of the employee and may still
d. Offeror made the offer
prosecute the employee
d. No recovery can be made on the
93. S1: If the terms of a contract are clear and
note because the consideration is illicit
leave no doubt upon the intention of the
88. One of the following contracts is not contracting parties, the literal meaning of the
vitiated by intimidation or violence and hence, stipulations shall control.
S2: If the words appear to be contrary to the
valid. Which is it?
a. A contract of sale which was signed evident intention of the parties, the latter
by a party because his arm was being shall prevail over the former.
a. True; True b. True; False
twisted by a third person.
b. A contract of sale which was c. False; False
entered into because the other party was d. False; True
pointing a gun at his wife.
94. A leased his property to B. Part of the the contract of partnership to be in a public
premises was subleased by B to C. B violated instrument and be registered with the
the conditions of the lease, so A wanted to Securities and Exchange Commission(SEC).
rescind the lease contract. Which is correct? a. P5,000.00 b. P3,000.00
a. A can rescind the lease contract c. P3,001.00 d.
provided he respects the sublease P10,000.00
b. A cannot rescind the lease contract
as the sublease would naturally be 100. If the partnership has the minimum capital
affected mentioned in No. 29, but the contract is not in
c. A may rescind the lease contract a public instrument or the same is not
and is not bound to respect the sublease recorded with SEC, the partnership:
d. B may object to the cancellation of a. Is voidable
the contract because he is not a party to b. Is void
the violation c. Still acquires juridical personality
d. Does not acquire juridical
95. Which of the following need not be in personality
writing to be enforceable?
a. An agreement for the sale of 101. Three of the following contracts are void.
goods, chattels, or things in action at a Which one is not?
price not less than P500 a. A universal partnership of all
b. An agreement for the leasing for a present property between husband and
period longer than one year, or for the wife
sale of real property or of an interest b. A universal partnership of profits
thereon between a man and a woman living
c. A representation as to the credit of together as husband and wife without the
a third person benefit of marriage
d. A mutual promise to marry c. A particular partnership between
husband and wife
96. In order that fraud may make a contract d. A universal partnership of profits
voidable between a private individual and a public
a. It may be incidental but both officer
parties should not be in pari delicto
b. It may be serious and the parties 102. Partners Arnold, Ben and Charlie
must be in pari delicto contributed: Arnold-P1,000,000; Ben-
c. It may be incidental but should P2,000,000; and Charlie-service. After
have been employed by both parties exhausting the partnership assets, the
d. It should be serious and should creditors still have a claim for P300,000. For
have not been employed by both how much are the partners liable to the
contracting parties creditors for the partnership liability?
a. Only Arnold and Ben are liable
97. The following are characteristics of void or equally to the creditors being capitalists
inexistent contracts, except: b. Only Arnold and Ben are liable at
a. The right to set up the defense of 1/3 and 2/3, respectively
illegality cannot be waived c. All of Arnold, Ben and Charlie are
b. The action or defense for the liable pro rata to the creditors
declaration of the inexistence of a contract d. Charlie is not liable being an
does not prescribe industrial partner who is exempt from
c. A void contract cannot be ratified losses
d. The defense of illegality of
contracts is not available to third persons 103. Armando and Betty are co-owners of a
whose interests are not directly affected parcel of land from which they derive profits
in equal sharing being co-heirs in inheritance.
98. S1: A partnership is created by mere
Is there a partnership?
agreement of the partners while a corporation a. There is a partnership because of
is created by operation of law. the equal sharing of profits
S2: In a partnership, juridical personality b. There is no partnership because
commences from the execution of the articles co-ownership by itself does not establish a
of the partnership; in a corporation, from the partnership despite the sharing of profits
issuance of certificate of incorporation by the c. There is no partnership since in
Securities and Exchange Commission. partnership division of profits is not always
a. True; True b. True; False necessary among partners
c. False; False d. There is partnership they being co-
d. False; True owners and co-possessors

99. The minimum capital in money or property 104. Normelita and Gracia are partners in NG
except when immovable property or real Partnership. While Normelita was performing
rights thereto are contributed, that will require her duties as a partner in the conduct of the
 business, he negligently caused damage to and Rose side with Mary while Irma sides with
Eddie, a third person. Who shall be liable to Liza.
Eddie and in what capacity? a. The group of Mary will prevail
a. Only the partnership shall be liable because they constitute the majority.
it being a juridical person separate and b. The group of Liza will prevail
distinct from the partners because they constitute the controlling
b. Only Normelita shall be liable for interest.
she is the only one at fault c. The group of Mary will prevail
c. Both Normelita and Gracia shall be because they constitute the controlling
liable solidarily to Eddie interest.
d. Normelita, Gracia and the d. Suppose Rose abstains, the group
partnership are all liable solidarily to Eddie of Mary will prevail.

105. Petalcorin is indebted for P5,000 to JDS 108. Which of the following will not cause the
Trading Company, a partnership managed by automatic dissolution of a general
Dulzura to whom Petalcorin also owes partnership?
P10,000.00. The two debts which are both a. Death of a capitalist partner
demandable are unsecured. Petalcorin remits b. Insolvency of a capitalist partner
c. Insanity of an industrial partner
P4,500.00 to Dulzura in payment of his debt
d. Civil interdiction of an industrial
to her. Accordingly, Dulzura issues a receipt
partner
for her own credit. To which credit should the
payment be applied? 109. A person admitted to all the rights of a
a. To Dulzura’s credit because the
limited partner who has died or has assigned
payment made by Petalcorin is intended
his interest in the partnership is known as
for his debt to Dulzura who issues her own a. An ostensible partner
receipt. b. A liquidating partner
b. To both the partnership credit and c. A substituted limited partner
Dulzura’s credit proportionately at d. A general-limited partner
P1,500.00 and P3,000.00, respectively.
c. To Dulzura’s credit because its 110. What is the order of payment of liabilities
amount is greater than that of the of a dissolved general partnership using the
partnership credit. code number representing each liability?
d. To the partnership credit because I. Those owing to partners than
the managing partner should not prefer for capital or for profits
her own interest to that of the partnership. II. Those owing to creditors
other than partners
106. Joseph, Aris, Dex and Earl are partners in III. Those owing to partners in
JADE Enterprises, a jewelry store, with Joseph respect of profits
contributing P50,000.00; Aris, P20,000.00; IV. Those owing to partners in
and Dex, P30,000.00. Earl is an industrial respect of capital
partner and manages the partnership. Based a. I, II, III, IV
b. II, I, IV, III
on the foregoing information, which one of the
c. II, I, III, IV
following statements is false? d. I, II, IV, III
a. Joseph may engage in the buying
and selling of rice without the consent of 111. The articles of incorporation differ from
the other partners the by-laws in that the articles of
b. Earl may engage in the buying and
incorporation are:
selling of rice without the consent of the a. The rules of action adopted by a
other partners corporation for its internal government
c. Earl is not liable for the losses of b. Adopted before or after
the partnership incorporation
d. Earl may be held liable by third c. A condition precedent in the
persons for partnership debts with her acquisition by a corporation of a juridical
separate property personality
d. Approved by the stockholders if
107. MARILEN Company is owned by the adopted after incorporation
following partners with their respective
contributions: Mary, P10,000.00; Anna, 112. A corporation acquires juridical personality
P20,000.00; Rose, P30,000.00; Irma, a. Upon the filing of the articles of
P40,000.00; Liza, P50,000.00; Edna, incorporation
P100,000.00; and Nora, P200,000. Except for b. Upon the filing of the by-laws
Edna and Nora, all the rest are managers c. Upon the issuance of the certificate
without any specification as to their of incorporation
d. Within 30 days from the receipt of
respective duties. Mary wants to buy goods
the notice of the issuance of the certificate
from Excellent Company. Liza opposes. Anna
of incorporation
113. A delinquent stockholder is not entitled to following acquisitions is the requirement of
the following rights, except unrestricted retained earnings not imposed?
a. To be voted a. When the acquisition is made to
b. To vote or be represented in the eliminate fractional shares
meetings of stockholders b. When delinquent shares are
c. To dividends acquired in a delinquency sale
d. He is not entitled to all the rights of c. When redeemable shares are
a stockholder repurchased in accordance with the terms
provided in the articles of incorporation
114. Every corporation incorporated under the d. When shares are acquired from
Corporation Code has the power and capacity stockholders who exercise their appraisal
a. To adopt and use a corporate seal right
b. To protect debts due to the
corporation 120. Which of the following rights is the
c. To protect or aid employees
subscriber of shares not fully paid who is not
d. To increase the business of the
delinquent not entitled to?
corporation
a. Right to dividends
b. Right to vote in stockholders’
115. All of the following, except one are
meetings
qualifications of a director or trustee. Which is
c. Right to a stock certificate
it? d. Right to inspection of corporate
a. He must be the owner of at least 1
books and records
share of stock which shall stand in his
name on the books of the corporation 121. Fatima Corporation has a statement of
b. Majority of the directors or trustees capital stock in its articles of incorporation but
must be residents of the Philippines it was stated in the same articles that
c. The number must not be less than dividends are not supposed to be declared ,
5 not more than 15 that is , there is no distribution of retained
d. In case of a non-stock corporation, earnings. Fatima Corporation is:
a trustee is not required to be a member a. Stock corporation
of the corporation c. Corporation by
prescription
b. Non-stock corporation
116. S1: The removal of a director must take
d. Corporation by
place in a regular meeting of the corporation estoppels
or in a special meeting called for the purpose.
S2: The election must be made through the 122. How many number of votes of the board of
raising of hands if requested by any voting directors are required to change the name of
stockholder or member. If there is no such a corporation?
request, voting may be made through other a. 2/3 of all members of the board
means like secret ballot. b. 2/3 vote of all present
a. True; True b. True; False c. Majority vote of all present
constituting a quorum
c. False; False
d. Majority vote of the board
d. False; True
123. In the matter of managing the business of
117. These are powers which are necessary to the corporation, the exercise of corporate
carry into effect powers which are expressly power and handling of corporate properties
granted, and which must therefore be this is supreme:
presumed to have been the intention in the a. 2/3 approval of the
grant of the franchise. stockholders of the corporation
a. Express powers b. Majority vote of the OCS of the
corporation
c. Implied powers
c. Majority vote of the Board of
b. Incidental powers
Directors
d. Inherent powers d. The President of the
corporation.
118. Which of the following subscriptions does
not comply with the subscription and paid-up 124. Which of the following is not required to
capital requirements at the time of be included in the Articles of Incorporation?
incorporation? a. Duties of the president.
Authorized Subscribed Paid-up b. Name of the corporation.
a. P1,000,000.00 P250,000.00 P62,500.00 c. Period of existence
b. 300,000.00 75,000.00 50,000.00
c. 100,000.00 100,000.00 d. Location of the principal office.
100,000.00
d. 50,000.00 12,500.00 125. Delinquent stocks are
3,125.00 a. Entitled to vote in stockholders’
meeting
119. A corporation may acquire its own shares b. Entitled to inspect the books of
for a legitimate purpose provided it has the corporation
unrestricted retained earnings. In which of the c. Entitled to dividends
d. None of the above