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1 EFG Foundation Inc., a non-profit organization, scheduled an election for its six-member Board of Trustees. X,
Y and Z, who are minority members of the foundation, wish to exercise cumulative voting in order to protect
their interest, although the Foundation’s Articles and By-Laws are silent on the matter. As to each of the
three, what is the maximum number of votes that he/she can cast.
1 3
2 4
3 6
4 9

2 Which of the following terms is normally not associated with extinguishing an obligation through the process
of novation?
1 Expromission
2 Subrogation
3 Delegacion
4 Remission

3 Being made liable to a third person, a partner by estoppel may be considered a

1 Silent partner
2 Secret partner
3 Nominal partner
4 Dormant partner

4 A constructive delivery of an immovable property subject to a sale and leaseback transaction.

1 Traditio brevi manu
2 Traditio longa manu
3 Traditio clavium simbolica
4 Traditio constitutum possessorium

5 Under the cumulative voting system of electing directors of a 5-member board of a duly organized
corporation, a stockholder owning 100 shares is entitled to cast a total of
1 20 votes, distributed equally among 5 candidates that the stockholder wishes to elect
2 100 votes, distributed equally among 5 candidates that the stockholder wishes to elect
3 100 votes, all casted in favor of a single candidate that the stockholder wishes to elect
4 500 votes, with majority of votes casted in favor a single candidate and remaining votes
distributed equally among 4 other candidates that the stockholder wishes to elect

6 Determine the false statement.

1 Donations between spouses during marriage are void; this rule applies to persons “living-in”
without the benefit of a legal marriage and persons guilty of adultery or concubinage.
2 A conditional promise to pay renders an instrument to be non-negotiable while a negotiable
instrument issued, accepted or endorsed when overdue is considered to be payable on demand.
3 Consignment of goods is essentially an agency contract; insolvency of the consignor results in the
extinguishment of the agency.
4 A pledge must be in a public instrument showing a description of the thing pledged and the
date of the pledge to bind third persons; a real mortgage must be registered and accompanied by an
affidavit of good faith to take effect against third persons.

7 Which of the following is not a source of obligation?

a. Culpa Aquiliana c. Negotiorum Gestio
b. Mora Accipendi d. Solutio Indebeti

8 Statement I: A corporation may be a partner in a partnership.

Statement II: A corporation may be a stockholder of another corporation.
Statement III: A limited partner may contribute money to a partnership but not services.
a. Only statement I is false c. Only statement III is false
b. Only statement II is true d. All of the statements are true

9 The corporate term of a stock corporation is that which is stated in its articles of incorporation. It may be
extended or shortened by an amendment of the articles when approved by majority of its Board of Directors
1 Approved by at least 2/3 of the stockholders representing the outstanding capital stock
2 Approved and ratified by at least 2/3 of all stockholders
3 Ratified by at least 2/3 of all stockholders
4 Ratified by at least 2/3 of the stockholders representing the outstanding capital stock

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10 Which of the following incorrect?
1 If a person obliged to do something fails to do it, the same shall be executed at his cost/burden
2 When the obligation consists in not doing, and the obligor does what has been forbidden him, it
shall be undone at his expense
3 The obligation to give includes that of delivering all its accessions and accessories even though
they may not have been mentioned.
4 In reciprocal obligations, from the moment one of the parties fulfills his obligation, delay by the
other begins

11 Several American doctors wanted to set up a group clinic in the Philippines so they could render modern
medical services. If the clinic is to be incorporated under our laws, what is the required foreign equity
participation in such a corporation?
1 60%
2 65%
3 80%
4 0%

12 It is the state's power to take away private property for public purposes upon payment of just compensa
which is governed by special law:
a. Escheat c. Eminent Domain
b. Expropriation d. Police Power

13 The action of the vendee against the vendor seeking corresponding reduction of the price by reason of some
vices in the thing sold.
a. Accion pauliana c. Accion quanti minoris
b. Accion reinvindicatoria d. Accion causante

14 Lulu sold his banana plantation to ABC Inc. for Php 100M, payable in installments of Php 10M per month with
8% interest per annum. Lulu married Luke after 9 months and they chose conjugal partnership of gains to
govern their property relations. When they married, Luke had an unpaid balance of Php 15M plus interest in
Lulu’s favor. To whom will ABC’s monthly payments go after marriage?
1 Both the interest and principal shall go to Lulu since they are her exclusive property
2 Both principal and interest shall go to the conjugal partnership since these become due after the
3 The principal shall go to the conjugal partnership but interest to Lulu
4 The principal shall go to Lulu but the interest to the conjugal property

15 Below are two promissory notes prepared by Allan:

• “I promise to pay Melissa or order P500,000 if he will pass the CPA Board Examinations. Sgd. Allan”
• “I promise to pay Dory or order P100,00 if he will kill Zam. Sgd. Allan”

If both conditions are fulfilled, which of the following statement is true?

1 Only Melissa can collect from Allan
2 Only Dory can collect from Allan
3 Both Melissa and Dory can collect from Allan
4 Neither Melissa nor Dory can collect from Allan

16 The duration of protection of a work covered by the Copyright Office records is ordinarily given a term
enduring the author’s life plus an additional:
1 20 years after the author’s death
2 70 years after the author’s death
3 95 years after the author’s death
4 120 years after the author’s death

17 Republic Act No. 9160 dated March 8, 2002, is also known as:
1 General Banking Law
2 Intellectual Property Law
3 Anti-Money Laundering Act
4 Secrecy of Bank Deposits and Unclaimed Balances Law

18 Asyong stole the necklace of Petra and sold it to a jewelry store, which paid for it in good faith, not knowing it
was stolen. The store then sold it to Tekla. Which is correct?
1 Tekla cannot be considered as the owner because the original seller, Asyong is not the real owner.
2 Petra may recover the necklace from Tekla without reimbursement because she is the legal owner.
3 Tekla is considered the owner because she purchased the necklace in a merchant store.
4 When the necklace was sold to the store in good faith, ownership was transferred therefore it can also
transfer the ownership to Tekla.

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19 Fraud in performance of an obligation:
a. incidental fraud c. fraud in factum
b. fraud in inducement d. causal fraud

20 The Governor shall be the chief executive officer of the Bangko Sentral and his powers and duties includes the
following except:
1 Request from government offices and instrumentalities, or government-owned or controlled
corporations, any data which it may require for the proper discharge of its functions and
2 Exercise such other powers as may be vested in him by the Monetary Board
3 Appoint and fix the remunerations and other emoluments of personnel below the rank of a
department head in accordance with the position and compensation plans approved by the Monetary
Board, as well as to impose disciplinary measures upon personnel of the Bangko Sentral, subject to the
provisions of Section 15(c) of this Act: Provided, That removal of personnel shall be with the approval of
the Monetary Board
4 execute and administer the policies and measures approved by the Monetary Board

21 This is the amount paid in or secured to be paid by stockholders upon which it is to conduct its operations and
is the property of the corporation itself.
a. Certificate of stock. c. Capital stock.
b. Proxy. d. Share of stock.

22 This is the interest or right which the owner has in the management of the corporation, in its surplus profits,
and upon dissolution, in all of its assets remaining after the payment of the debt.
a. Certificate of stock. c. Capital stock.
b. Proxy. d. Share of stock.

23 A offers to B 100 electric fans for P80,000 payable in 60 days with 12% interest per annum. B accepted the
offer by telegram provided that interest is reduced to 6%. If there is a no further communication between A
and B relating to the terms
1 The contract is perfected because of the acceptance by B
2 There is no contract yet between A and B because B made a counter offer
3 The contract is perfected under the terms of A
4 There is no contract yet unless B gives earnest money

24 True or False

1Contracts must bind both contracting parties and its validity or compliance cannot be left to the will of one
of them. This is the principle of relativity of contracts.
2Contracts are perfected by mere consent of the contracting parties. This is the principle of obligatory force
of contracts.

1 Only I is correct.
2 Only II is correct.
3 Both I and II are correct.
4 Neither I nor II is correct.

25 Which of the following is not considered as quasi-contract?

1 Solutio Indebiti
2 Negotiorum gestio
3 When the third person with the consent of the debtor pays the debt
4 Reimbursement due the person who saved the property during calamity without the knowledge
of the owner

26 Acceptance of an offer made by letter or telegram shall bind the offeror from the time:
1 the offeree has knowledge of the offer
2 the offeree sent his acceptance
3 the acceptance is communicated
4 the offeror made the offer

27 A contract of sale whereby the seller acquires the right to repurchase the object of the sale from the buyer
within a certain period agreed upon:
1 Equitable Mortgage
2 Legal Redemption
3 On Sale or Return
4 Conventional Redemption
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28 This is not an implied warranty in a contract of sale:
1 Right to sell the thing at the time of perfection of the contract
2 Reasonably fit for the purpose they are acquired
3 Merchantable Quality
4 Free for charges or encumbrances not declared or known to the buyer

29 Securities and Exchange Commission (SEC) Memorandum Circular (MC) No. 4 amended SEC MC No. 19 which
prescribes the deadline for submitting the Anti-Money Laundering (AML) Compliance Forms by Financing and
Lending Companies. Under the amended section 3, these compliance forms shall be filled out by covered
institution and be submitted to SEC on or before June 1, 2015 and every how many years thereafter?
1 2
2 3
3 5
4 6

30 The following must be present in order to be liable for violation of Batas Pambansa Blg. 22 or known as the
“Bouncing Checks Law”. Which of the following is not among those elements?

1The accused makes, draws or issues any check to apply to account or for value.
2The accused doesn’t know at the time of the issuance that he or she does not have sufficient funds in, or
credit with, the drawee bank for the payment of the check in full upon its presentment.
3The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or it would
have been dishonored for the same reason had not the drawer, without any valid reason, ordered the
bank to stop payment.
4 The holder of the check shall be a holder as described under Sec. 52 of the Negotiable Instruments Law.

1 I and III c. II and IV

2 II and III d. III and IV

31 Which of the following statements is true?

1 Civil fruits are those produced by lands of any kind through cultivation.
2 Accessions are the fruits of a thing.
3 Remission will extinguish an obligation if two persons are principal debtors and creditors of each
4 The fulfillment of a condition shall give rise to an obligation.

32 Which of the following statements is true?

1 A period depending upon the sole will of the debtor will invalidate the obligation.
2 In a facultative obligation the right to choose is given to the debtor unless stipulated.
3 The nullity of the principal obligation carries with it the nullity of the penalty clause.
4 In an obligation payable pro rata, there is only one debt and one credit regardless of the number
of debtors and creditors.

33 This is committed when two elements concur, namely: (1) the offender has no valid license or authority
required by law to enable one to lawfully engage in recruitment and placement of workers; and (2) he
undertakes either any activity within the meaning of "recruitment and placement" defined under Art. 13(b), or
any of the prohibited practices enumerated under Art. 34 of the Labor Code.
1 Human trafficking
2 Illegal recruitment
3 Conscription
4 None of the above

34 To which of the following instances will there be imposition of joint liability?

1 Obligations arising from torts.
2 Obligations of bailees in commodatum.
3 Liability of principals to their common agent.
4 Obligations in favor of partnership suppliers by virtue of sales contract with regard to each

35 Section 2 (1) of Presidential Decree 612 or the Insurance Code defines a contract of insurance as an agreement
whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from
an unknown or contingent event. Which of the following elements should concur for an insurance contract to
exist under the Insurance Code?
1 Payment of premiums is not required
2 In consideration of the insurer's promise, the insured pays a premium
3 The insured must be in good faith
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4 The insured event can be controlled
5 There must be the presence of the risk

36 The following are the exceptions to the mandate of Section 2 of the Law on Secrecy of Bank Deposits, as
amended, which declares bank deposits to be "absolutely confidential". Which of the following is not included
among those exceptions?
1 In an examination made in the course of a special or general examination of a bank that is
specifically authorized by the Monetary Board after being satisfied that there is reasonable ground to
believe that a bank fraud or serious irregularity has been or is being committed and that it is necessary to
look into the deposit to establish such fraud or irregularity
2 In an examination made by an independent auditor hired by the bank to conduct its regular audit
provided that the examination is for audit purposes only and the results thereof shall be for the exclusive
use of the bank.
3 Upon oral permission of the depositor.
4 In cases of impeachment

37 Which of the following is an indivisible obligation?

1 To pay a loan obligation of P100,000.00 in 10 equal monthly installments
2 To give a rendition tonight of Handel’s “Messiah” in a concert at the Folk Arts Theater
3 To lecture for 5 Saturdays in a tax seminar
4 To construct a pavement measuring 2 meters wide and 10 meters long

38 Which of the following is not a requisite for the existence of a de facto corporation?
1 The existence of a valid statute under which a corporation, with some of the purposes in question, can be
2 An attempt in good faith to form a corporation according to the requirements of law.
3 A user of corporate powers. There must be a transaction of business in some way as if it were a
4 The organization is not registered in the Securities and Exchange Commission.

39 The nationality of a corporation is determined by the law of its domicile or place of principal business. This
test is known as the
a. Control theory. c. Incorporation theory.
b. Nationality theory. d. Management theory.

40 The operations and activities of banks shall be subject to the supervision of the Bangko Sentral includes the
following except:
1 Inquiring into the solvency and liquidity of the institution
2 The conduct of examination to determine compliance with laws and regulations if the circumstances so
warrant as determined by the Monetary Board
3 The issuance of rules of, conduct or the establishment standards of operation for uniform application to all
institutions or functions covered, taking into consideration the distinctive character of the operations of
institutions and the substantive similarities of specific functions to which such rules, modes or standards
are to be applied
4 Examining an enterprise which is wholly or majority-owned or controlled by the bank

41 D obtained a loan from C in the amount of P50,000.00. Unable to give cash on due date in payment of his loan
obligation, D proposed to C that he would be giving instead his diamond ring to settle his debt. C agreed and
accepted the ring from D. The new agreement between D and C involved both:
1 Novation and application of payment
2 Novation and dacion en pago
3 Compensation and payment of cession
4 Confusion and tender of payment

42 Where the penalty takes the place of indemnity for the damages and for the payment of interest
1 Where there is stipulation to the effect that damages or interest may still be recovered, despite the
presence of the penalty clause
2 When the debtor refuses to pay the penalty imposed in the obligation
3 When the debtor is guilty of fraud or dolo in the fulfillment of the obligation
4 When there is a breach of the obligations

43 Anna was obliged to pay Mike Php 800,000 on December 31, 2015. She paid Mike on December 31, 2014
believing that the obligation was already due and demandable. How much may Anna recover from Mike on
March 31, 2016?
1 Nothing because the obligation is already extinguished
2 Legal interest for one year and three months
3 Legal interest for one year
4 P1M plus legal interest for one year

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44 Xander bought a land from Betina, paid in cash. Because they were close friends, they did not bother to
execute any document of sale. After 8 years, the heirs of Xander asked Betina to execute a deed of absolute
sale to solemnize the verbal sale to their father. Reluctant to do so, Xander’s heirsfiled an action for specific
performance against Betina’s. Will their action succeed?
a. Yes, since Xander bought the land and paid Betina for it
b. Yes, after full payment, the action became imprescriptible
c. No, after more than 6 years, the action to enforce the verbal agreement has already lapse.
d. No, since the sale cannot under the Statute of Frauds be enforced

45 On February 14, 2015, Mark orally sold for Php 10M his house and lot to Bob. It was agreed that delivery of
the house and lot and the payment thereof would be made on April 10, 2015. Unfortunately, Lucas, a stranger
negligently set the house on fire on March 17, 2015 and the house was completely destroyed. As a result
1 Mark need not deliver the lot and Bob need not pay the Php 10M
2 Bob is required to pay the Php 10M minus the equivalent fair market value of the house
3 Mark must still deliver the lot and the salvage value of the house while B must still pay the Php10M
4 Mark must still deliver the lot but is already excused from the delivery of the house while Bob must tsill
pay the full amount

46 Where it is stipulated that the repurchase of the property sold could be made at anytime, the repurchase
shall be exercised
a. Within four years, from the date of the contract
b. Within ten years from the date of the contract
c. After ten years after the date of the contract
d. Within six years from the date of the contract

47 The liability of all the partners, including industrial partners for contracts entered into in the company’s name
and for its account, when all partnership assets have been exhausted is
a. Joint
b. Pro-rata
c. Solidary
d. Voluntary

48 The principle by which contracting parties are equal in the eyes of law
1 Autonomy of contracts
2 Mutuality of contracts
3 Relativity of contracts
4 Consensuality of contracts

49 Bears risk of collecting from the buyer the price of the sale
a. Commission agent
b. Agente del credere
c. Old debtor in delegacion
d. Guarantor

50 A land was sold to different vendees, the ownership shall be transferred to the person
1 Who have first possession in good faith
2 Who present the oldest title in good faith
3 Who in good faith recorded it in the Registry of Property
4 Who have paid in good faith the purchase price in full

51 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?
First Answer – He can recover from the debtor the entire amount, which he has paid.
Second Answer – He is subrogated to all of the rights of the creditor.

a. Both answer are correct c. Only the first answer is correct.

b. Both answer are wrong d. Only the second answer is correct.

52 Effected when the object of sale is already in the possession of the vendee at the sametime of sale so that
delivery need no longer be made.
a. Traditio longa manu c. Traditio constitum possessorium
b. Traditio brevi manu d. Traditio symbolica

53 In sale of personal property by installment, if the seller forecloses the chattel mortgage on the thing sold:
a. He cannot recover the balance of the purchase price
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b. He can recover the balance of the price if there is a stipulation to that effect
c. He can compel the buyer to redeem the property
d. He can ask for a security from the buyer

54 A,B, and C formed a partnership with the name ABC & Co. Partnership as a limited partnership in mind. It is
a. Limited partnership.
b. General partnership.
c. If registered with the SEC, it is a limited partnership.
d. Partnership by estoppel.

55 In the absence of stipulation, the share of the industrial partner in the profits shall be equal to the share of a
capitalist partner with the smallest share.

The industrial partner shall not share in the losses unless stipulated.]

a. First statement is false, second is true.

b. First is true, second is false.
c. Both are true.
d. Both are false.

56 A subscribed to 1,000 shares of stock of X Corporation. She paid 25% of the said subscription. During the
stockholders meeting, can A vote all her subscribed shares?
a. No, because the subscription has not yet been fully paid.
b. No, because A’s shares have become delinquent which cannot be voted.
c. No as to the unpaid percentage of subscription.
d. Yes, because unpaid shares not delinquent can be voted.

57 P orally appointed A as his agent to sell former’s land. On January 3, 2014, A sold the land to B who forthwith
took possession thereof. It turned out however, that on January 1, 2014, P, without informing A, had already
sold the same land to C, who up to now has not taken possession of the same land. Neither of the sales was
registered. Whose contract shall prevail?
a. The sale to B for he was first in possession in good faith;
b. The sale to C for the land was first sold to him by the owner.
c. The sale to B for the agent was duly authorized to sell the land.
d. The sale to C because the sale to B was void, A was not duly authorized by P.

58 XYZ partnership composed of three (3) capitalist partners and one industrial partner suffered business losses.
Its remaining assets amounting to P100,000. the partnership is indebted to its supplier, Mr. Cruz, in the
amount of P160,000. How can Mr. Cruz recover?
a. Cruz can recover from the partnership P100,000 and the balance of P60,000
from the other capitalist partners.
b. Cruz can recover from the partnership P100,0000 and the balance of P60,000
from any of the partners solidarily;
c. Cruz can recover from the partnership P100,000 and the balance of P60,000
from the (4) partners jointly including the industrial partner.
d. Cruz can recover from the partnership P100,000 only and suffer as his list in
the balance of P60,000.

59 A makes a note payable to B or order. The following are the indorsers of the note in the order of their
indorsements: B,C,D,E,F (holder) and G (subsequent holder.) The note is dishonored in the hands of F, who
notifies B, C, D and E. Which is not correct?
a. the notice given by F to B operates to the benefit of C, D, E and G
b. the notice to C insures to the benefits of D, E and G
c. the notice to C insures to the benefits of B
d. the notice to D insures to the benefits of E and G

60 A corporation cannot be an incorporator in the Philippines because only natural persons may become
incorporators, except
a. United Nations agencies operating in the Philippines.
b. Cooperative as incorporator of a rural bank.
c. Eleemosynary corporations.
d. Charitable organizations incorporated under Philippine laws.

61 This group of persons may not form a corporation or be incorporators in a corporation in the Philippines.
a. Fifteen Spanish citizens who are residents of Manila.
b. Ten resident aliens and four aliens in Singapore.
c. Fourteen Filipinos who are residents of San Francisco, California.
d. Seven Americans and two Filipinos residents of Hawaii.

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62 The sale of the hope itself
a. Dacion en pago c. Emptio spei
b. Payment by cession d. Emptio reisperati

63 Annaliza uses a savings account with a BPI bank. The contract between Annaliza and the bank is one of:
a. Agency.
b. Commodatum.
c. Deposit.
d. Simple loan.

64 When treasury shares are declared as dividends they are classified as:
a. Cash dividend c. Stock dividend
b. Property dividend d. Liquidating dividend

65 Which of the following is not a qualification of a director of a corporation?

1 He must not be convicted of a criminal offense where the penalty imposed is imprisonment for more than
six years or found guilty of violating the Corporation Code of the Philippines within five years from his
election or appointment
2 A majority of the directors must be citizens of the Philippines
3 Each must own at least one share and registered in the stock and transfer book of the corporation
4 A majority of the directors must be residents of the Philippines.

66 Which of the following is not correct?

1 All corporators are shareholders;
2 A director must be a shareholder.
3 All incorporators are shareholders.
4 All corporators are incorporators.

67 A corporation generally can issue both par value stock and no par value stock. These are allfixed in the Articles
of Incorporation of the corporation. Which of the following corporations may not be allowed to issue no par
value shares?
a. Insurance companies;
b. Banks;
c. Trust companies;
d. All of the above.

68 X subscribed 10,000 shares in the capital stocks of AAA Corporation. He paid 50% of the 10,000 shares. X
asked the Corporate Secretary to issue him the corresponding stock certificate representing the 50% of what
he already paid. The Corporate Secretary of the corporation refused. Was the Corporate Secretary correct?
1 The Corporate Secretary is correct because the Corporation Code provides that no certificate of stock
shall be issued to a subscriber until the shares as subscribed have been fully paid.
2 The Corporate Secretary cannot refuse because a Stock Certificate can be issued corresponding to the
percentage of shares which were paid.
3 The Corporate Secretary cannot refuse because a Certificate of Stock can be issued provided it is indicated
in the Certificate the actual percentage of what has been paid.
4 The Corporate Secretary cannot refuse because it is his legal duty to issue a stock certificate corresponding
to the number of shares actually subscribed regardless of the actual payment.

69 Totoy obliged himself to deliver to Buboy the following:

1) Apple ipad 5
2) Honda CR-V 2012 model with plate number AMB 115

First statement – In case Totoy failed to deliver an apple ipad 5, the court may compel him to deliver any apple
ipad5 plus damages

Second statement¬ – In case Totoy failed to deliver the car, the court may compel him to deliver the car plus

A. True, true B. True, false C. False, true D. False, false

70 A borrower who uses the thing for a purpose different from that intended, delays its return, receives the thing
under appraisal, lends it to a third person, or saves his property instead of the thing borrowed shall be liable
even in case of fortuitous event, because:
1 The nature of the obligation requires the assumption of risk.
2 The parties have expressly stipulated such liability.
3 The law expressly so provides.
4 Time is of the essence.

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