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1. X is a depositor of AAA Bank. She has three (3) deposit accounts all under her name. One, in a.

a. the Director General of the Intellectual Property Office;


checking account, one in saving account and another one in time deposit account. Each account has b. the Director of Legal Affairs of the Intellectual Property Office;
a balance of Php250,000. AAA Bank became insolvent. Philippine Deposit Insurance Corporation c. the owner of the Patent right;
closed the Bank. X therefore is unable to withdraw from all of the accounts. She then filed her claims d. Any agent of the owner of the Patent right.
with the Philippine Deposit Insurance Corporation. Which statement is most accurate?
a. X can claim a total of Php500,000 for all the three (3) accounts. 7. The Fair Use Doctrine allows others to utilize copyrighted works under certain conditions. The factors
b. X can only claim from one (1) account of Php250,000. to consider whether use is fair or not would be the purpose and character of the use, nature of the
c. X can claim a total of Php750,000 from all the three (3) accounts. copyrighted work, amount and substantiality of the portions used, and what else?
d. X cannot claim anything from any of the deposit accounts. a. Effect of the use upon the creator of the work.
b. Effect of the use upon the potential market of the work.
2. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposit records of an c. Effect of the use upon the public in general.
individual without court order except - d. Effect of the use upon the class in which the creator belongs.
a. In an examination to determine gross estate of a decedent.
b. In an investigation for violation of Anti-Graft and Corrupt Practices. 8. XYZ Corporation bought ten (1 0) units of Honda Civic from CCC Corporation. ABC Bank granted a
c. In an investigation by the Ombudsman. loan to XYC Corporation which executed a financing agreement which provided for the principal
e. In an impeachment proceeding. amount, the installment payments, the interest rates and the due dates. On due dates of the installment
payments, XYZ Corporation was asked to pay for some handling charges and other fees which were
3. X works as a research computer engineer with the Institute of Computer Technology, a government not mentioned in the Financing Agreement. Can XYC Corporation refuse to pay the same?
agency. When not busy with his work, but during office hours, he developed a software program for a. No, because handling charges and other fees are usual in certain banking
law firms that will allow efficient monitoring of the cases, which software program is not at all related transactions.
to his work. Assuming the program is patentable, who has the right over the patent? b. Yes, because ABC Bank is required to provide XYZ Corporation not only the
a. X; amount of the monthly installments but also the details of the finance charges
b. Institute of Computer Technology; as required by the Truth in Lending Act.
c. Neither X nor the Institute of Computer Technology can claim patent right over the c. No, because the Finance Agreement is a valid document to establish the existence of
invention; the obligation.
d. X and the employer of X will jointly have the rights over the patent. d. Yes, because legally, finance charges are never allowed in any banking transaction.

4. The "test of dominancy" in the Law on Trademarks, is a way to determine whether there exists an 9. Which of the following is an exception to the secrecy of bank deposits which are in Philippine Pesos,
infringement of a trademark by - but NOT an exception to the secrecy of foreign currency deposits?
a. Determining if the use of the mark has been dominant in the market. a. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of deposits or
b. Focusing on the similarity of the prevalent features of the competing marks which investments with any bank, when the inquiry or examination is made in the course of
might create confusion. the SSP's periodic special examination of said bank to ensure compliance with the
c. Looking at the mark whether they are similar in size, form or color. Anti-Money Laundering Act (AMLA);
d. Looking at the mark whether there is one specific feature that is dominant. b. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry into and
examination of deposit accounts in case there is a finding of unsafe or unsound
5. X's painting of Madonna and Child was used by her mother to print some personalized gift wrapper. banking practice;
As part of her mother's efforts to raise funds for Bantay Bata, the mother of X sold the wrapper to c. Upon inquiry in cases of impeachment;
friends. Y, an entrepreneur, liked the painting in the wrapper and made many copies and sold the d. Upon inquiry by the Commissioner of Internal Revenue in the event a taxpayer files
same through National Bookstore. Which statement is most accurate? an application to compromise his tax liabilities on the ground of financial incapacity.
a. Y can use the painting for his use because this is not a copyrightable material.
b. X can sue Y for infringement because artistic works are protected from moment of 10. The Anti-Money Laundering Law is a law that seeks to prevent money laundering activities by providing
creation. for more transparency in the Philippine Financial System, hence the following institutions are covered
c. Works of art need to be copyrighted also to get protection under the law. by the law, except:
d. Y can use the drawing even though not copyrighted because it is already a public property a. Bank and any financial institutions;
having been published already. b. Pawnshops;
c. Casino operators;
6. Compulsory Licensing of Inventions which are duly patented may be dispensed with or will be allowed d. All of the above.
exploitation even without agreement of the patent owner under certain circumstances, like national
emergency, for reason of public interest, like national security, etc. The person who can grant such
authority is -
11. For purposes of determining violation of the provisions of Anti-Money Laundering Law, a transaction is b. a majority vote of the Board of Directors and authorized by the vote of the
considered as a "Suspicious Transaction" with "Covered Institutions" regardless of the amount stockholders representing at least two-thirds of the outstanding capital stock
involved, where which the following circumstances exist/s? c. two-thirds vote of the Board of Directors and authorized by the vote of the stockholders
a. the amount involved is not commensurate with the client's business or financial representing at least a majority of the outstanding capital stock
capacity; d. two-thirds vote of the Board of Directors and authorized by the vote of the stockholders
b. there is no underlying legal or trade obligation, purpose or economic justification; representing at least two-thirds of the outstanding capital stock
c. client is not properly identified;
d. All of the above. 17. X, who is the Executive Vice President of ABC Corporation, a listed company, can be held liable or
guilty of insider trading if, he -
12. The main feature of the Foreign Investment Act of 1991 is to introduce the concept of "Negative Lists". a. Bought shares of ABC Corporation when it was planning to acquire another company
Under the said law, what is a "Negative List"? to improve its asset base, the news of which increased the price of the shares in the
a. It is a list of business activities or enterprises in the Philippines that foreigners Stock Exchange.
are disqualified to engage in. b. Bought shares of XYC Corporation, a sister company of ABC Corporation when he
b. It is a list of business activities or enterprises in the Philippines that foreigners are learned that XYC Corporation was about to also list its share in the Philippine Stock
qualified to engage in. Exchange.
c. It is a list of business activities or enterprises that are open to foreign investments c. Bought shares of ZZZ Corporation when he learned that ABC Corporation would
provided it is with the approval of the Board of Investment. acquire ZZZ Corporation.
d. It is a list of business activities or enterprises that are open to foreign investments d. All of the above.
provided it is with the approval of the Securities and Exchange Commission.
18. The purpose of the "Tender Offer" Rule is to -
13. May a publicly listed universal bank own 100% of the voting stocks in another universal bank and in a a. Ensure an even playing field for all shareholders of a company in terms of opportunity
commercial bank? to sell their shareholdings.
a. Yes, if with the permission of the Bangko Sentral ng Pilipinas. b. Ensure that minority shareholders in a publicly listed company are protected in the
b. No, since it has no power to invest in equities. sense that they will equally have the same opportunity as the majority shareholders in
c. Yes, as there is no prohibition on it. terms of selling their shares.
d. No, since under the law, the 100% ownership on voting stocks must be in either c. Ensure that the shareholders who would also want to sell their shareholdings will have
bank only. the opportunity for a better price.
d. All of the above.
14. Under the Intellectual Property Code, lectures, sermons, addresses or dissertations prepared for oral
delivery, whether or not reduced in writing or other material forms, are regarded as 19. Section 38 of The Securities Regulation Code defines an independent director as a person who must
a. Non-original works. not have a relation with the corporation which would interfere with his exercise of independent judgment
b. Original works. in carrying out the responsibilities of a director. To ensure independence therefore, he must be -
c. Derivative works. a. Nominated and elected by the entire shareholders;
d. Not subject to protection. b. Nominated and elected by the minority shareholders;
c. Nominated and elected by the majority shareholders;
15. T is the registered trademark owner of "CROCOS" which he uses on his ready-to-wear clothes. d. Appointed by the Board.
Banking on the popularity of T's trade mark, B came up with his own "CROCOS" mark, which he then
used for his "CROCOS" burgers. T now sues B for trademark infringement but B argues that his product 20. "Securities" issued to the public are required by law to be registered with -
is a burger, hence, there is no infringement. Is B correct? a. The Bangko Sentral ng Pilipinas;
a. No, since the owner of a well-known mark registered in the Philippines has b. The Philippine Stock Exchange;
rights that extends even to dissimilar kinds of goods. c. The Securities and Exchange Commission;
b. Yes, since the right of the owner of a well-known mark registered in the Philippines d. The Securities and Exchange Commission and the Philippine Stock Exchange.
does not extend to goods which are not of the same kind.
c. Yes, as B was in bad faith in coming up with his own "CROCOS" mark. 21. The government agency granted with the power of supervision and examination over banks and non-
d. No, since unlike T, he did not register his own "CROCOS" mark for his product. bank financial institutions performing quasi-banking functions, to ensure that the conduct of its business
is on a sound financial basis that will provide continued solvency and liquidity is -
16. Under the Financial Rehabilitation and Insolvency Act (FRIA), the filing of a petition for voluntary a. The Philippine Deposit Insurance Corporation;
rehabilitation must be approved by: b. The Bangko Sentral ng Pilipinas;
a. a majority vote of the Board of Directors and authorized by the vote of the stockholders c. The Anti-Money Laundering Council;
representing at least a majority of the outstanding capital stock d. The Securities and Exchange Commission.
22. X maintains a savings deposit in the amount of Php·1 Million with ABC Bank Corporation. X also has 27. X is being charged for violation of Anti-Graft and Corrupt Practices because he is suspected of having
obtained a loan from ABC Bank Corporation in the amount of Php1 Million. In case of default, accumulated unexplained wealth. X maintains deposit accounts with ABC Bank. The Ombudsman filed
a. ABC Bank can set-off the loan from the savings account being maintained by X criminal cases against X before the Sandiganbayan. Can the Court issue subpoenas against ABC
with ABC Bank. Bank to produce all documents pertaining to all the deposit accounts of X?
b. Set-off is not possible because legal compensation is not allowed in banking a. Yes, because there is already a pending case and provided the subpoena must
transaction. be specific as to which account.
c. Deposit accounts are usually earmarked for specific purpose hence offsetting is not b. Yes, it is enough that the specific bank is identified.
legally possible. c. No, because the issuance of the subpoena has no real legal basis.
d. Off -setting is not possible because the obligation of X is a "simple loan". d. Even without a subpoena, information about the deposit accounts of X can be
submitted to the Sandiganbayan because it will be used in a pending case.
23. XYZ Corporation is engaged in lending funds to small vendors in various public markets. To fund the
lending, XYZ Corporation raised funds through borrowings from friends and investors. Which statement 28. X, a private individual, maintains a dollar deposit with ABC Bank. X is suspected to be the leader of a
is most accurate? Kidnap for Ransom Gang and he is suspected of depositing all ransom money in said deposit account
a. XYZ Corporation is a bank. which are all in US Dollars. The police want to open said account to know if there are really deposits
b. XYZ Corporation is a quasi-bank. in big amounts. Which statement is most accurate?
c. XYZ Corporation is an Investment Company. a. The same rules under Secrecy of Bank Deposit Act will apply.
d. XYZ is none of the above. b. An approval from the Monetary Board is necessary to open the account.
c. Because the deposit is in US Dollars, it is covered by the Foreign Currency Deposit
24. XXX Bank Corporation and ZZZ Corporation were merged into XX ZZ Bank Corporation. So as not to Act which allows disclosure only upon the written permission of the depositor.
create any unnecessary conflict, all the former directors of both banks wanted to be appointed /elected d. Approval from the Court is necessary to order disclosure of the account.
as members of the Board of Directors of the merged bank. Each bank used to have eleven (11)
members of the board. The maximum number of directors of the merged bank is 29. X is a depositor of AAA Bank. She has three (3) deposit accounts all under her name. One, in checking
a. 15; account, one in saving account and another one in time deposit account. Each account has a balance
b. 22; of Php250,000. AAA Bank became insolvent. Philippine Deposit Insurance Corporation closed the
c. 21; Bank. X therefore is unable to withdraw from all of the accounts. She then filed her claims with the
d. 11. Philippine Deposit Insurance Corporation. Which statement is most accurate?
a. X can claim a total of Php500,000 for all the three (3) accounts.
25. All senior officers of ABC Bank are entitled to obtain a housing loan. X is an Executive Vice President b. X can only claim from one (1) account of Php250,000.
for Operations of ABC Bank. She obtained a housing loan with the ABC Bank. Which statement is most c. X can claim a total of Php750,000 from all the three (3) accounts.
accurate? d. X cannot claim anything from any of the deposit accounts.
a. The housing loan of X requires a guarantor from somebody who is not connected with
the bank. 30. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposit records of an
b. The housing loan of X requires the approval of the Board of Directors of the bank. individual without court order except -
c. The housing loan of X, being a benefit for employees, does not require (a) but will a. In an examination to determine gross estate of a decedent.
require (b). b. In an investigation for violation of Anti-Graft and Corrupt Practices.
d. The housing loan of X, being a benefit for employees, will not require (a) and c. In an investigation by the Ombudsman.
(b). d. In an impeachment proceeding.

26. ABC Holdings Company, a Hong Kong company, owns 10% of XYZ Bank. Because of the peace and 31. Under the Anti-Money Laundering Law, a covered institution is required to maintain a system of
order situation in the Philippines, ABC Holding Company wanted to sell its shareholdings in XYZ Bank. verifying the true identity of their clients as well as persons purporting to act on behalf of
Unfortunately, nobody is interested to buy a 1 0% shareholdings in a bank. The board of directors of a. Those doing business with such clients.
XYZ Bank thought that it would be a good idea to buy back the shares owned by ABC Holding b. Unknown principals.
Company. Which statement is most accurate? c. The covered institution.
a. Buying back the shares by XYZ Bank is absolutely not allowed. d. Such clients.
b. Buying back the shares may be allowed provided it is with the approval of the
Monetary Board and disposed of within six (6) months. 32. A bank can be placed under receivership when, if allowed to continue in business, its depositors or
c. Buying back the shares may be allowed provided such shares 'will be disposed of creditors would incur
within ten (1 0) years. a. probable losses
d. Buying back the shares may be done anytime provided the Board of Directors will b. inevitable losses
approve the same. c. possible losses
d. a slight chance of losses
38. Center Book Store is the publisher of the book Legal Journal. It donated one copy to the Library of the
33. Apart from economic rights, the author of a copyright also has moral rights which he may transfer by U.E. College of Law. The Library, in order to preserve the original book, reproduced one copy of the
way of assignment. The term of these moral rights shall last Journal for lending to the University’s students for room use. Is the U.E. Law Library liable for copyright
a. During the author's lifetime and for 50 years after his death. infringement?
b. Forever. a. No. The reproduction is consistent with fair use.
c. 50 years from the time the author created his work. b. Yes. Only the National Library is allowed to reproduce books and other works.
d. During the author's lifetime.
c. No. The copy of the Journal is marked “For Room Use Only” and is therefore
not made available to the public outside of the Library.
34. X invented a device which, through the use of noise, can recharge a cellphone battery. He applied for
and was granted a patent on his device, effective within the Philippines. As it turns out, a year before d. Yes. The law only allows a library to photocopy a book if it is fragile or rare.
the grant of X's patent, Y, also an inventor, invented a similar device which he used in his cellphone
business in Manila. But X files an injunctive suit against Y to stop him from using the device on the 39. Which among the following is not a function of the Bangko Sentral ng Pilipinas?
ground of patent infringement. Will the suit prosper? a. As official depositary of the Philippine government.
a. No, since the correct remedy for X is a civil action for damages. b. As financial adviser of the Philippine government.
b. No, since Y is a prior user in good faith. c. As fiscal agent of the Philippine government.
c. Yes, since X is the first to register his device for patent registration. d. As the watchdog of government funds.
d. Yes, since Y unwittingly used X’s patented invention.
40. No. 1 – A bank may be may lend to a single borrower more than fifteen (15%) of the bank’s unimpaired
35. It is a legal scheme whereby a debtor, who has sufficient assets but who may be unable to meet his capital.
obligations as and when they fall due, may petition for more time within which to settle such obligations. No. 2 – A deposit in a bank in foreign currency may be inquired into provided the depositor gives his
a. Insolvency Proceedings consent, orally or in writing.
b. Suspension of Payments a. Both are false.
c. Corporate Rehabilitation b. Both are true.
d. Voluntary Insolvency c. No. 1 is true; no. 2 is false.
d. No. 1 is true; no. 2 is false.
36. Samsung invented a cellular phone that can also play digital music or MP3s. It applied for the issuance
of letters patent. 41. It is a bank which creates or accepts demand deposits subject to withdrawal by checks and primarily
a. The invention is not patentable because it is a combination of old functions which does organized to carry on the business of accepting drafts and issuing letters of credit, discounting and
not produce a new result. negotiating promissory notes, receiving deposits, buying and selling foreign exchange and gold and
b. The invention is patentable because it is a new product which is beneficial to the silver bullion and lending money against the borrower’s security in property.
public. a. Rural bank;
c. The invention is not patentable because Samsung is a foreign corporation and it b. Thrift bank;
should file its application in its home country. c. Universal bank;
d. The invention is patentable because it combines existing elements, a cellular d. Commercial bank.
phone and a digital music player, and produces a new and useful result, namely,
the convenience of having two gadgets in one. 42. No. 1 - The Ombudsman may inquire into the bank deposit of a public officer whose case is pending
criminal investigation in the Ombudsman even if there is no actual case filed in court.
37. Lucky Me registered its trademark, “Ang Sarap Pancit Palabok” with the Intellectual Property Office. No. 2 - A writ of garnishment directed to a bank deposit is prohibited by law.
Nissin subsequently introduced its new product, “Ang Sarap Pinoy Ramen”. Lucky Me sued for a. Both are false.
trademark infringement. b. Both are true.
a. Nissin is not guilty of trademark infringement because the trademark “Ang Sarap” is c. No. 1 is false; No. 2 is true.
descriptive, hence not capable of exclusive appropriation. d. No. 1 is true; No. 2 is false
b. Nissin is not guilty of trademark infringement because its product, Pinoy Ramen,
belongs to a different category from Lucky Me’s product, Pancit Palabok. 43. Jose and his wife, Perla, opened and maintained the following accounts with Allied Bank Recto. (a)
c. Nissin is guilty of trademark infringement because it did not register its trademark “Ang Savings deposit – P300,000; (b) Demand deposit – P400,000; (c) Time deposit - P350,000. They
Sarap Pinoy Ramen”. also have the same deposits with the same amount in Allied Bank Makati. If Allied bank becomes
d. Nissin is guilty of trademark infringement because the trademark “Ang Sarap” insolvent the Philippine Deposit Insurance Corporation will be bound to be liable to the spouses for its
is fanciful and arbitrary, hence capable of exclusive appropriation. insurance liability equivalent to
a. Two deposits.
b. One deposit. b. If no actual damage was suffered by the depositor.
c. Six deposits. c. If the transaction involves money market placements.
d. Three deposits. d. If there is a contractual stipulation between the bank and the depositor supported by valuable
consideration which lowers the degree of diligence required to be exercised by the bank to that
44. Which of the following is a proper defense against the application of the "short-swing" profit rule? of a good father of family.
a. That the sale or purchase was not the result of information obtained by such owner, officer,
director or beneficial owner because of his or her position. 51. A bank may be deemed as a mortgagee in good faith if it does not –
b. That one was no longer an officer at the time of either the sale or purchase of the securities. a. Ascertain the mortgagor’s title or ownership over the property mortgaged.
c. That the same was not sold or purchased within the statutory three month period. b. Ascertain the identity of the person borrowing the owner’s duplicate original title of
d. That the beneficial owner was not such both at the time of the purchase and the sale. property mortgaged before allowing such person to borrow such title for photocopying
purposes.
45. Which among the following securities transactions require that the securities be registered in order to c. Check both the owner’s duplicate original title to the property mortgaged and the title thereof in
be compliant with the Securities Regulation Code? the registry of deeds.
a. A sale of capital stock of a corporation to its own stockholders only where no fee is paid in d. Conduct an ocular inspection of the property, provided there is nothing in the title to the property
connection with the sale. which would arouse suspicion and require an ocular inspection.
b. A bank selling its own securities.
c. An insurance company selling its own securities. 52. A universal bank and a commercial bank differ in terms of their power –
d. The transaction of a broker on the PSE pursuant to his client's orders. a. To invest in non-financial allied enterprises.
b. To create and accept demand deposits.
46. The General Banking Law of 2000 applies – c. To act as investment house.
a. To all types of banks in suppletory manner. d. To perform quasi-banking functions.
b. Only to banks which are not government owned or controlled.
c. To savings and mortgage banks, non-stock savings and loans associations, and private 53. Rural banks and cooperative banks essentially differ in terms of –
development banks. a. Purpose.
d. To the operation of branches of foreign banks in the Philippines. b. Powers.
c. Governing law in matters other than organization, ownership, capital requirements, powers,
47. Which of the following negates a charge that an entity is engaged in banking business? supervision, and general conduct of business.
a. If it obtains funds only from qualified depositors. d. Being authorized to create or accept demand deposits even without Monetary Board approval.
b. If it invests, rather than lends, the funds obtained.
c. If at any given time, the number of depositors falls below twenty (20). 54. The distinction between the three modes of entry of foreign banks in the Philippines under the Foreign
d. If it has not obtained the requisite authority to operate as such from the Bangko Sentral ng Banks Liberalization Act is material in determining –
Pilipinas. a. Whether or not a foreign bank may avail of more than one mode of entry.
b. Whether or not Monetary Board Approval is required for such entry.
48. The distinction between deposits and deposit substitutes is material in determining – c. Whether or not head office guarantee is required.
a. Whether an entity accepting either one is subject to supervision by the BSP. d. Whether or not the foreign bank shall perform the same functions enjoy the same privileges, and
b. Whether a commercial bank that accepts both will need a separate license from the BSP. be subject to the same limitations imposed upon a Philippine bank of the same category.
c. What degree of diligence a bank is required to exercise in handling the same.
d. Whether a universal bank may use the same purposes of lending or relending, as the case 55. The head office of a foreign bank authorized to operate branches in the Philippines is sued in a
may be. Philippine court by a payee of a check drawn by a depositor of the Philippine branch of such foreign
bank which refused to honor a check notwithstanding that funds were sufficient. What defense can the
49. A bank teller fails to observe the standard procedures of a bank in verifying the signature of the drawer head office raise to avoid liability to such payee?
of a check and honors the same when presented for payment by a person who forged the signature of a. Philippine courts have no jurisdiction over the head office of the foreign bank.
the drawer on the check entrusted to him. What defense can a bank raise to negate or mitigate its b. The head office of a foreign bank is not liable for the unauthorized acts of its Philippine branch.
liability to the drawer whose signatures was forged. c. The head office guarantee is applicable only to liabilities to depositors.
a. The drawer is guilty of contributory negligence. d. The bank is not liable to the payee for dishonor of checks.
b. The act of the bank teller is unauthorized.
56. That a deposit is in the nature of a loan –
50. A bank is NOT liable for its failure to observe the degree of diligence as required by its fiduciary duty a. Is inconsistent with the fiduciary duty imposed on banks in the handling thereof.
under Sec. 2 of the GBL of 2000. b. Means that the same may be classified as a preferred credit.
a. If such failure was prior to the enactment of the GBL of 2000.
c. Means that the bank which has loaned the depositor money has a right to compensation a. Being part of municipal law, does not apply to deposits in branches of foreign banks in the
if both loan obligations are already due and demandable, even without prior consent of Philippines.
the depositor. b. Is a constitutional right which may, however, be regulated by statute.
d. Means that in cases where banks are placed under receivership or liquidation, a depositor has c. Cannot be invoked in the absence of an express statutory provision.
no other means to recover on his deposit except through such receivership and liquidation d. If violated will render the information obtained thereby inadmissible as evidence in any proceeding
proceedings where he will be treated as a creditor of the bank. against the depositor.

57. A time deposit differs from a demand deposit in that – 62. A public officer is charged with violation of the anti-graft and corrupt practices act before the Office of
a. Numbered accounts are not allowed for time deposits, but are allowed for demand deposits. the Ombudsman. The Ombudsman requests a bank to disclose information regarding the accounts in
b. Instruments issued pursuant to a time deposit are generally non-negotiable, while instruments the name of the public officer’s immediate family. What principle or ground may the bank invoke to
issued pursuant to a demand deposit are negotiable. resist such inquiry?
c. Funds in time deposit account earn interest, while funds in a demand deposit account cannot a. An inquiry into bank deposits cannot be had at the preliminary investigation level.
earn interest. b. No inquiry into bank deposits can be had in the absence of a court order.
d. Funds in a time deposit account cannot be withdrawn at any time, while funds in a demand c. No inquiry can be made except into bank accounts of the person charged.
deposit account can. d. The office of the Ombudsman has no power to inquire into bank deposits.

58. A bank dishonors a check drawn against an account with insufficient funds. Under which circumstances 63. An ex-president of the Philippines is accused of committing the crimes of plunder and money
can the bank be held liable for such dishonor? laundering in the course of the proceedings, the Office of the Special Prosecutor filed a Motion with
a. If the depositor has another account in the bank with sufficient funds to cover the amount of the the Sandiganbayan for the issuance of an order directing the examination of such ex-President’s U.S.
check drawn but the bank did not apply such funds to cover said check. Dollar account. What ground can be validly invoked by the ex-president to oppose such motion?
b. If the bank did not notify the depositor that it had previously availed of its legal right to a. A foreign currency deposit cannot be inquired without the consent of the depositor.
compensation and applied the funds in the checking account in payment of depositor’s b. Plunder is not an exception to the prohibition against disclosure under the Foreign
loan to the bank resulting in the insufficiency of the funds to cover the amount of the check Currency Deposit Act.
drawn. c. Money Laundering is not an exception to the prohibition against disclosure under the Foreign
c. If before dishonoring the check, the bank did not notify the depositor that his funds are insufficient Currency Deposit Act.
to cover the amount of the check drawn as to give him an opportunity to deposit sufficient funds. d. Assuming that money laundering is an exception to the prohibition against disclosure under the
d. If the bank does not allow the depositor to deposit the funds needed to cover the check drawn Foreign Currency Deposit Act, the court must first find probable cause of money laundering since
within a reasonable time after presentment in order to avoid dishonor of said check. the instant charges do not fall within the cases where no court order is required.

59. A Bank is liable to the depositor if it allows withdrawal of the funds in the depositor’s account by 64. Are rebroadcasting and retransmission protected intellectual property rights?
someone who is not actually authorized by the depositor, but who –
a. Presents the passbook and a withdrawal slip signed by the depositor. a. No. Since rebroadcasting and retransmission are forms of copyright infringement
b. Surrenders the certificate of time deposit. b. Yes. Since Rebroadcasting and retransmissions are allowed under the must-carry rule.
c. Appears as an authorized signatory of a corporate depositor in the latest board resolution c. Rebroadcasting is not a protected intellectual property right due to the must-carry rule whereas
submitted to the bank, but is actually no longer connected with the corporate depositor. retransmissions are protected copyrights.
d. Appears in the bank records as the depositor but is actually merely a trustee for the true owner d. Rebroadcasting is a protected intellectual property right whereas retransmissions are not
of the funds. protected copyrights due to the must-carry rule.

60. What can a bank lawfully do or omit to do without violating its duty to exercise extraordinary diligence
in the handling of deposits? 65. XX applied for the issuance of a preliminary injunctive order on the ground that she is entitled to the
a. Allowing a crossed check to be cashed provided that the payee is personally known to the bank. use of the trademark on product A and its container based on her copyright and patent over the same.
b. Accepting as deposit a check which is not indorsed by the payee, provided that the check is a Can she do this?
manager’s check. a. Yes. These are registrable marks
c. Closing a demand deposit account with prior notice to a depositor who has been misusing such b. No. These are not registrable marks
account repeatedly overdrawing against it. c. Yes, although its copyrightability and patentability should be registered separately
d. Disclosing information regarding “and/or” savings account where one of the two d. No. These are rights which are not interchangeable. The granting of one right will not
depositors has given his written permission for such disclosure. necessarily apply to the other rights.

61. The right to secrecy of bank deposits – 66. Which of the following are not included under technology transfer arrangements under the IP code?
a. the licensing of a new management program in favor of a Philippine company
b. the exact process of how to create a new and improved child-proof paint 72. A Scientist has managed to create a new breed of pigs by altering its DNA of which such has never
c. the secret ingredient of the KFC original recipe chicken. existed prior to such act by the scientist. Is the pig breed patentable?
d. the use of Windows software in businesses. a. No. Since it is immoral
b. Yes. Since the pig was created purely by the hand of the scientist
67. Which of the following are patentable medicines? c. No. Since animal breeds are not patentable
a) the mere discovery of a new form or new property of a known substance which does not result d. Yes. Although the animal breeds are not patentable, the essential micro-biological process is
in the enhancement of the known efficacy of that substance, patentable
b) the mere discovery of any new property or new use for a known substance,
c) the mere use of a known process resulting in a new product that employs at least one 73. Are Computer programs never patentable?
new reactant. a. No. Computer programs are always patentable
d) the mere use of a known process unless such known process results in a new product b. Yes. Section 22 is explicit on this
c. No. Computer programs may be patentable provided it forms part of a process
68. A files a patent application for product Z, a revolutionary computer chip which is capable of d. Yes. It contains non-patentable elements
outperforming current chips by as much as 10x. A is employed by company B, a software company.
A’s job is to develop software programs for businesses. He developed this chip during office hours 74. A filed a patent in Malaysia over his invention on January 8, 2009. He subsequently filed a patent in
and days where he was researching for software ideas which he would use for his job. B filed its the Philippine IPO on March 30, 2009, expressly claiming priority. Apparently, B has also filed a
application over the same product at the day after A filed his patent. Who owns the patent? patent pertaining to the same invention on February 18, 2009. Who has priority right over the
patent?
a. A since A filed his patent first. a. A since he filed his patent in Malaysia earlier and also he has claimed priority
b. B since A made his chip during office hours and days. expressly.
c. A since A made the chip not in the course of regular duties. b. B since a patent application in a foreign country has no effect here in the Philippines
d. B since A made the chip during office hours and utilized B’s resources. c. A since he filed his patent in Malaysia earlier and also he has claimed priority
expressly, and it is within 12 months from the initial registration in Malaysia.
69. A is a holder of patent X. B also holds a patent over X. A trial ensued and B was declared the true d. B since he was the first one to file his registration in the Philippines
owner of the patent. What are the remedies for B?
75. A was able to invent a new type of vehicle. However, B was able to register the invention first
a. Upon filing a motion in court, the court shall order for his substitution as patentee although it was clearly A who was the true inventor. What remedy may A avail of?
b. the court shall order for his substitution as patentee, or at the option of the court, cancel the patent, a. He will file a civil case of patent infringement
and award actual and other damages in his favor if warranted by the circumstances, b. He can file for cancellation of patent plus damages
c. the court shall order for his substitution as patentee, or at the option of the true inventor, c. He can file for the substitution as the real patentee
cancel the patent, and award actual and other damages in his favor if warranted by the d. Both A and C
circumstances
d. Upon a petition by the true inventor, cancel the patent, and award actual and other damages in his 76. A medicine already being distributed both in the U.S. and in the Philippines by distributor VX
favor if warranted by the circumstances. authorized by the patent holder is now being imported by A, a doctor who operates a small clinic and
is using the drug for the treatment of his patients. Is A liable for patent infringement?
70. Which of the following are rights conferred by a patent? a. Yes. A is liable since VX is the only authorized distributor of the patented drug.
a. Where the subject matter of a patent is a product, to restrain, prohibit and prevent any unauthorized b. No. A is not liable since section 72 (1) allows such use of the product.
person or entity from making, using, offering for sale, selling or importing that product; c. Yes. A is liable since he is not an authorized distributor of the product.
b. Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized d. No. A is not liable since this is a case of fair use.
person or entity from using the process, and from manufacturing, dealing in, using, selling or offering
for sale, or importing any product obtained directly or indirectly from such process. 77. A has been importing patented medical drugs from Thailand. The patent is owned by B. B has a local
c. Patent owners shall have the right to assign, or transfer by succession the patent, and to conclude distribution unit in the Philippines. B wants to file a case of patent infringement and importation of
licensing contracts for the same counterfeit drugs against A. Will this prosper?
d. All of the above a. No. This is a case of fair use
b. Yes. A counterfeit drug is a form of infringement against the patent of B.
71. Which of the following requisites are not included for an invention to be patentable? c. No. An unregistered drug is not the same as a counterfeit drug and also that
a. It is New, it has an inventive step, and it does not form part of a prior art section 72 (1) allows such importation by a 3rd party.
b. It is New, it has an inventive step, and it is industrially applicable d. Yes. B has not authorized A to distribute the products.
c. It is new, it does not form part of a prior art and it is registered
d. None of the above
78. When a device appropriates a prior invention by incorporating its innovative concept and, although c. At the point of the sale of the item bearing the mark.
with some modification and change, performs substantially the same function in substantially the d. None of the above.
same way to achieve substantially the same result, what test should be applied?
a. Literal infringement test 85. When is non-use of a mark excusable?
b. Denicola test a. It must always be used, failure to use it for any reason will forfeit the use of such mark.
c. Doctrine of Equivalents test b. When the trademark owner is lacking in funds due to slow sales.
d. Fair Use test c. When the trademark owner has already registered his mark with the IPO
d. When the cause of such non-use is due to reasons independent of the will of the
79. B was selling a product of A who was the patent holder of B’s product. Apparently, B has been trademark owner.
passing A’s patent as his. A filed a criminal case of infringement against B. will this prosper?
a. Yes. A is the rightful owner of the patent 86. . Which among the following statements is false?
b. No. B is exempted under the fair use doctrine a. Infringement of trademark is the unauthorized use of a trademark, whereas unfair
c. Yes. A never authorized B to sell such products as his. competition is the passing off of one’s goods as those of another.
d. No. B has yet to be found guilty of a previous infringement, hence A has no cause b. In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair
of action. competition, fraudulent intent is essential.
c. In infringement of trademark and in unfair competition, prior registration are both
80. A utility model lasts for: necessary.
a. 20years non-renewable d. In infringement of trademark and in unfair competition, prior registration to both are not
b. 5 years, renewable for another 2 consecutive terms. necessary
c. 7 years, renewable for another 2 consecutive terms.
d. 7 years non-renewabl 87. Suppose an author published a book describing a new method of book-keeping, which of the
following statements is true?
81. The provisions of compulsory licensing provides for instances where the patent holder is required to a. The author has a copyright over the book as well as the method described in his book;
grant a license to the government or to a 3rd party. Is this provision unfair for depriving the patent thus, he is able to preclude others from only copying the book as well as preclude others
holder of his right to his property? from employing the method as described in the book without his permission.
a. No. This is a case of eminent domain. b. The author has an exclusive right to the method described in the book.
b. Yes. This is a case of depriving the patent holder of his property without due process of c. The extent of the author’s copyright is limited to him being able to prevent third
law persons from copying portions of his work; he is unable to prevent third persons
c. No. The patent holder is not deprived of his rights to the patent since he will still from employing or describing the method discussed in such book.
receive royalties for his patents. d. The extent of the copyright extends to the idea itself, not merely the expression
d. Yes. The patent holder has exclusive rights over his patents and such exclusivity is
rendered inutile by the provision. 88. A reporter wants to write a true-to-life story about a person who was kidnapped and buried alive for
83 hours. The reporter then extensively interviewed the survivor and spent several months coming up
82. Q: Which of the following types of names confer the greatest chance of being a valid trademark? with a book documenting the plight of the survivor. A Hollywood studio company then made a movie
a. Generic out of the ordeal of the survivor. The reporter is saying that even though the movie was not based on
b. Descriptive the book, the research he has spent documenting the event was copyrightable. Is the contention of
c. Suggestive the reporter correct?
d. Arbitrary/Fanciful A. Yes, considering that the research material used served as the foundation for the subsequent
book of the reporter about the survivor.
83. Businessman A puts up a sari-sari store named “Andongs”. B also puts up a sari-sari store named B. Yes, considering that the reporter has exerted substantial time and effort in his research, it is
“Andongs” a month later. Can A filed against B an infringement case? copyrightable.
a. Yes. A can file an infringement case against B for unlawfully using his tradename. C. No, facts and research involved in obtaining facts should not be distinguished, and are
b. No. He has not registered his tradename. not copyrightable.
c. Yes. This is a case of unfair competition. D. No. the subject matter is not copyrightable.
d. No. He has not registered his trademark.
89. Is a work with a merger of aesthetic and functional features copyrightable?
84. When testing whether the likelihood of deception has occurred, at what point of a transaction do we A. No, copyright law contemplates only original intellectual creations in the literary and artistic
consider such likelihood? domain and is the proper subject of a patent.
a. After the sale of the item bearing the mark. B. Yes, on all cases.
b. Prior to the sale of the item bearing the mark.
C. It depends, if the design elements reflect a merger of aesthetic and functional 96. The BSP upon approval of at least five (5) members of the Monetary Board, may also grant this kind
consideration cannot be separated from utilitarian features, it is not copyrightable. of loan or advances in the amount not exceeding 50% of its total deposits and deposits substitutes is
D. No, on all cases. known as:
a. Loans without collateral
90. The following are functions of banks except: b. Emergency loans
a. Deposit function c. Salary loans
b. Loan function d. Banking loans
c. Make collections and payments
d. Outsourcing of functions 97. The powers that may be conferred to the conservator are such powers as may be necessary in
Conservatorship except:
91. It is commonly known as an account with fixed term. a. To take charge of the assets, liabilities, and the management
a. Savings account b. To reorganize the management of the subject bank
b. Time deposit c. To collect all monies and debts due and exercise all powers necessary to restore its viability
c. Peso deposit d. All of the above
d. Dollars account
98. Any activity resulting from a trustor- trustee relationship involving the appointment of a trustee
92. Bank accounts maybe garnished by the creditors of the depositor. Which of the following deposits are by a trustor for the administration, holding, management of funds for the use or benefit or advantage
exempt from garnishment? of the trustor or of others called beneficiaries
a. Foreign Currency deposits and those exempt by rules of Civil Procedure like provision for a. Partnership Business
the family for four months. b. Trust Business
b. Deposit that have become dormant for a period of ten (10) years. c. Corporation Business
c. Money or security or other evidence of indebtedness of any kind and interests thereon with banks, d. Trusteeship Business
buildings and loan associations.
d. Loans and other credit accommodations with maturities of more than five (5) years. 99. Entities engaged in the lending of funds obtained in the form of deposits from the public.
a. Quasi Banks
93. An Act that vests the Bangko Central ng Pilipinas with the sole power and authority to issue currency b. Banks
within the territory of the Philippines c. Pawnshop
a. Act No. 3936 -Private Development Banks d. Commercial Banks
b. R.A. 9302- Thrift Banks Act
c. The New Central Bank Act 100. Ramon was asked to enumerate the classification of Banks in the Philippines. Upon answering he
d. R.A. 6848- Islamic Investment Bank of the Philippines enumerated that Universal Bank, Commercial bank, Cooperative Bank Islamic Bank, Thrift and Rural
Banks are the different classifications of Banks. After Ramon recited the professor called Ann and
94. When may the Anti- Money Laundering Council (AMLC) perform an inquiry into deposits of a person? asked her the same question. Ann reply and said that bank are classified as the Central Bank, Metro
a. For purposes of determining his liabilities. Bank, Banco de Oro , Bank of the Philippine Island and Banco Filipino. If you are called to recite
b. To determine his assets with proper court order. too, will you support Ramon’s answer?:
c. Upon order of the court when there is probable cause that the deposits are related to crime
of unlawful activities defined in R.A. 9194 a. No. Ramon’s answer is incorrect as Ann correctly enumerated the classifications of Bank in the
d. When there is written consent of the depositor. Philippines
b. Yes. Ramon correctly enumerated the classifications of Bank in the Philippines
c. No Ramon and Ann is incorrect
d. No. Ann correctly enumerated the classifications of Bank in the Philippines
95. The total amount of loans, credit accommodations and guarantees that may be extended by a bank to
any person, partnership, association, corporation, or other entity is known as CEILING. 101. Which of the following statement is not true about the nature of Banking business?
What is the percentage required of the net worth of such bank?
a. 20% a. Banking business is fiduciary in nature and requires high standard of integrity and performance
b. 30% b. Bank must exercise utmost diligence or the highest degree of care in the handling of deposits
c. 25% c. Banking business is fiduciary in nature and require extraordinary diligence
d. 35% d. Bank must exercise that degree of care like that of a good father of the family in the handling of
deposits
e. Both A and B are correct while C and D are incorrect
102. All foreign currency deposits are considered of an absolutely confidential in nature and shall exempt a. Statement 1 is correct , statement 2 is incorrect
from attachment, garnishment or any other order or process of any court, legislative body, government b. Statement 1 is incorrect, statement 2 is correct
agency or any administrative body whosoever. The following are the exemption to the secrecy of c. Both Statement are correct
foreign currency deposit except: d. None of the statements is correct
a. Upon the written permission of the depositor
b. Upon order of competent court in cases of violation of AMLA when it established that there 107. Ritchie love to shop and she has a habit of paying only in cash. In one of her shopping sprees in SM
probable cause that the deposits or investments involved are in any way related to a money North Edsa, she got the shock of he life when for the first time, a store cashier refuse to accept her
laundering offense coins in payment for a purchase worth not more than one hundred pesos. Ritchie was paying 70 pesos
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire into or examine in 25-centavo coins and twenty five pesos in 10-centavo coin. The salesgirl told her that her coins
deposit accounts pursuant to explanation where not legal tender. Do you agree?
d. The PDIC with prior approval of the Monetary Board a. Yes, Coins shall be legal tender in amounts not exceeding P 75.00 for denominations of 25 centavos
and above and 25.00 for denominations of 10 centavos or less
103. All of the following are exceptions to the Bank Secrecy Law except? b. No. Coins shall be legal tender in amounts not exceeding P 100.00 for denominations of 25 centavos
a. Upon order of the competent court in cases involving Graft and Corrupt Practices Act and above and 25.00 for denominations of 10 centavos or less
b. Examination by an independent auditor hired by the bank c. Yes. All notes and coins shall be legal tender for all debts , public and private, in amounts not
c. The BSP and PDIC to the Corporation and/or Bangko Sentral may inquire into or examine exceeding 100 for denominations of 1, 5, 10 and 25 sentimo coins
deposit accounts pursuant to explanation
d. In- camera inspection by the Ombudsman d. Yes. All notes and coins issued by the Bangko Sentral shall be fully guaranteed as legal tender
in the Philippines unless otherwise fixed by the Monetary Board, that coins shall be legal
tender in amounts not exceeding Fifty pesos (P50.00) for denominations of Twenty-five
104. The following are the grounds when the Monetary Board may close a bank or quasi-bank except? centavos and above, and in amounts not exceeding Twenty pesos (P20.00) for denominations
a. If unable to pay its liabilities (cash flow test) of Ten centavos or less.
b. Has insufficient realizable assets to meet its liabilities (balance sheet test)
c. If cannot continue without involving probable losses to its depositors or creditors. 108. Which is not true about the Bangko Sentral ng Pilipinas?
d. It persistently conducts business in a sound and safe manner a. The Bangko Sentral shall provide policy directions in the areas of money, banking and credit
b. The Bangko Sentral is hereby authorized to adopt, alter, and use corporate seal which shall be
105. As part of the safeguards against imprudent banking, the General Banking Law imposes limits or judicially noticed: to enter into contracts ; to lease or own real and personal property
restrictions on loans and credit accommodations which may be extended by banks. Which of the c. BSP may compromise, condone or release, in whole or in part , any claim of or settled liability to
following are not considered limits and restriction on loans and credit accommodation? the Bangko Sentral regardless of the amount involved under such term and condition as may be
prescribed by the Monetary Board to protect the interest of the Bangko Sentral
a. SBL Rules- those promulgated by the Bangko Sentral ng Pilipinas upon authority if Section 35 of d. The Bangko Sentral may acquire and hold assets and incur such liabilities in connections with its
the General Banking Law of 2000 operations authorized by the provision of RA 7653.
b. DOSRI Rules- promulgated by BSP, upon authority of section 5 of the General Banking law
c. Anti-Money Laundering Law
d. No commercial bank shall make any loan or discount on the security of shares of its on 109. Mr. Dela Cruz, a second year accountancy student of a University in Manila, photocopied some pages
capital stocks. of the Financial Accounting book authored by C. Valix, CPA. Mr. Ferrer, his professor in Financial
Accounting, saw the photocopies during one of their classes. He scolded Mr. Dela Cruz for not buying
the original book and told him that he violated the copyright law and maybe penalized. Is Mr. Ferrer
correct?
106. These statements were presented to you for evaluation:
I. The conservator is appointed to take charge of the assets, liabilities and the a. Yes, because the book was photocopied without the consent of the author and used publicly in a
management of a bank or a quasi-bank in a state of continuing liability, or classroom.
unwillingness to maintain a condition of liquidity deemed adequate to protect the b. No, because the private reproduction of a published work in a single copy, where the
interest of depositors and creditors reproduction is made by a natural person exclusively for research and private study, shall be
permitted, without the authorization of the owner of copyright in the work.
II. The receiver is appointed to manage a bank or quasi-bank that is unable to pay its c. No, because Mr. Dela Cruz reproduced a single copy only, exclusively for his private study and he
liabilities in the ordinary course of business, or has insufficient realizable assets to did not gain any profit for photocopying some of the pages of the book.
meet its liabilities, or cannot continue business without probable losses d. No, because he did not reproduced the whole book but only some of its pages, it can be permitted
even without the consent of the owner of the copyright.
In your evaluation of the said statements:
110. Kris Aquino commissioned Mr. Magaling to write a biography of her late father, Ninoy Aquino, for a fee. 114. Unilevel Corporation asked your legal advice regarding their plan to use a trademark with the words
Upon completion of the work, Kris paid Mr. Magaling the agreed price. The biography was copyrighted. “SWEET CANDY” However, there is an existing and registered trademark using the words “TWEET
Kris, however, changed her mind again upon reading the book and decided not to have it published. CANDY” Which of the following advices are correct.
Can Kris Aquino sell the property without the consent of Mr. Magaling?
a. The firm must abandon the plan because another company uses the trademark Tweet Candy
a. Yes, Kris Aquino can sell the copyrighted biography of her father without need of securing the consent and there is a danger of a suit for infringement. The words Sweet and Tweet is almost similar
of Mr. Magaling, the writer of said biography. in sound and they can confuse or mislead the public.
b. Mr. Magaling entered into a contract with Kris Aquino and having compensated, he had parted with b. They can use the SWEET CANDY as long as there will be a very different packaging and flavors so
all his rights to the said book, in effect making Kris his assignee. as not to mislead the public.
c. The assignee’s rights include the right to sell the work without the consent of the writer, Mr. Magaling. c. Unilevel is a well-known company and their products are patronized country-wide, they can use the
d. All of the above trademark SWEET CANDY because TWEET CANDY is owned by a small-time company whose
market is within Luzon only.
111. Atty. Ana Maganda wrote a legal opinion for a client on the differences of a probationary, regular, d. None of the above
casual and seasonal employee. She quoted without permission Atty. Aliling’s comment appearing in
his book “Annotations on the Labor Code”, but she indicated the source of the quotation, the book and 115. Which of the following works are protected and can be copyrighted?
the author’s name. Atty Aliling is a labor law expert. Can Atty. Aliling hold Atty. Ana Maganda liable for a. A biography containing your life, love and success.
infringement of copyright for quoting a portion of his book without his permission? b. Your musical compositions with or without words.
c. News of the day and other facts having the character of mere press information.
a. Yes, because Atty. Ana Maganda copied somebody else’s work without the original author’s consent. d. A and B only
b. No, because the Intellectual Property Code provides that a quotation from a copyrighted work
can be used for judicial proceedings or for giving professorial advice by legal practitioner, 116. The Sogod Hotel chain reproduces DVD’s, distributes the copies thereof to its hotels and makes them
provided the source are identified. available to hotel guests for viewing in the hotel guest rooms and charges a separate fee for the use
c. Yes, because Atty. Ana Maganda used the work of another for her own gain. of the DVD players. Is Sogod Hotel liable for infringement?
d. No, because everybody can quote somebody as long as the source and the name of the author of a. No, the DVD viewing is done privately in the hotel guest rooms.
the quotation are identified. b. Yes, because the reproduction of the DVD’s violate the copyright or economic rights of the
owner of the film. The hotel charge fees for the use of DVD player as well as there are room
charges, they earn gain from the use of the DVD because it entices the guests to check-in in
112. Read the following statements and determine which of the choices are correct: their hotel.
c. No, the DVD viewing is part of the hotel services and it is the use of the DVD players that is charged
Statement 1: Infringement is the use by others without the registrant’s consent of a reproduction or and not the cost of the DVD.
colorable imitation of his trademark, tradename or service mark with the purpose of causing to mislead d. None of the above
or misleading the public that those goods or services are those of the registrant.
117. Narciso Planas invented a gas-saving device, manufactured and sold it to the market without securing
Statement 2: The definition of infringement implies that only registered trademarks, trade names and a patent. San Miguel Co., a rich and well-known company, bought one gadget, dismantled the device
service marks are protected against infringement or unauthorized use by another or others and studied it. In due time, the company is manufacturing a gas-saving device similar to the invention
of Narciso Planas. Before offering it for sale, the company secured a patent. Below are the actions and
a. Both statements are true defenses available for Narciso Planas. Which of the following statements are correct?
b. Statement 1 is true while Statement 2 is false I. Narciso Planas should first bring an action for the cancellation of the patent illegally secured
c. Only Statement 1 is true by San Miguel Company and on the said proceedings, he must prove that he invented the
d. Only Statement 2 is true device.
II. Narciso Planas, being the inventor of the gadget, is the owner of an intellectual creation and
is entitled to legal protection of said property right from the unauthorized use of the same
113. To establish trademark infringement, the following elements must be shown: (1) the validity of the by another person or entity.
plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use of the mark or its colorable III. While the cancellation proceedings are pending, Narciso Planas may ask the court for
imitation by the alleged infringer results in “likelihood of confusion” Of these, the element of preliminary injunction to prevent San Miguel from manufacturing more gadgets.
______________ is the gravamen of trademark infringement. IV. San Miguel Co. has a better right over the invention because they secured a patent before
a. Element no. 1 selling the device.
b. Element No. 2 a. Statements I and II are correct.
c. Element No. 3 b. Statements I and III are correct
d. All of the above c. Statement IV is correct
d. Statements I, II and III are correct a. Void b. Unenforceable c. Rescissible d.
Voidable
118. The infringer is liable to the following:
I. An injunction for such infringement 10. Contracts entered into by guardians whenever the wards whom they represent suffer lesion by more than one-
II. Pay actual, moral and exemplary damages fourth of the value of the object
III. Deliver for impounding of the articles alleged to infringe a copyright a. Void b. Unenforceable c. Rescissible d.
IV. Deliver for destruction all copies, devices and other means used for making the infringing Voidable
copies
Which of the statements above are TRUE: 11. Obligation of a vendee
a. Statement 1 a. To transfer ownership b. to accept delivery c. to deliver the object of sale d. none
b. Statement 2
c. Statement 3 12. Earnest money
d. Statement 4 a. money given by the buyer to the seller as distinct consideration for the option contract
e. All of the above b. contract of sale is already perfected
c. can be withdrawn by the buyer if he decides not to continue with the contract
1. Contracts take effect between the d. all of the above
a. parties b. Assigns c. Heirs d. All
13. The vendor of a personal property payable in installments can exercise the following remedies except:
2. Meeting of the offer and the acceptance upon the thing and the cause a. Exact fulfillment c. waive the contract
a. Consent b. Object c. Cause d. Contract b. Foreclose the chattel mortgage d. cancel the sale

3. The parties do not intend to be bound at all 14. In a sale of real property by installment payments, the buyer has a right to a refund when he has paid at least
a. Absolute simulation b. Relative simulation c. True simulation d. False a. 2 years b. 3 years c. 4 years d. 5 years
simulation
15. A bought a parcel of land from B on installment. When the first installment fell due, A did not pay. His defense
4. One of the following cannot be the object of contracts, which one? was that he did not have available money, and he therefore pleaded impossibility of performance.
a. Services not contrary to morals c. Services against public order a. A obligation is extinguished because A has no available money.
b. Services that are possible d. Lawful services b. A obligation is extinguished because of impossibility of performance.
c. A is liable. A mere pecuniary inability to fulfill an engagement does not discharge the obligation of the
5. Which is false? One the contract has been perfected contract.
a. Contracting parties may compel each other to observe the form required by law. d. A is liable because the obligation is to pay money which is determinate.
b. Parties must wait until a third party volunteers to execute the documents required by law.
c. Observance of the form may be exercised by the parties simultaneous with the action upon the 16. Which is not a characteristic of a contract of sale
contract. a. consensual b. bilateral c. gratuitous d. nominate
d. All of the above

6. Which contract is voidable?


a. Entered into during lucid interval c. Entered into between minors 17. The following are essential elements of the warranty against eviction, except
b. Agreed to in a state of drunkenness d. All of the above a. The vendee must appeal from the decision evicting him from the property
b. There is no waiver on the part of the vendee
7. If fraud has prevented a meeting of minds of the parties, the contract c. The vendor was summoned in the suit for evidence at the instance of the vendee
a. Is inexistent b. is enforceable c. may be annulled d. may be d. all of the above
reformed
18. A contract whereby the debtor secures to the creditor the fulfillment of a principal obligation with an immovable
8. Contract that do not comply with Statute of Frauds property
a. Void b. Unenforceable c. Rescissible d. a. pledge b. chattel mortgage c. guaranty d. real mortgage
Voidable
19. Which is not true about pledge?
9. Contract where one of the parties is incapable of giving consent to a contract a. The pledgee can deposit the thing pledged with a third person
b. The pledgor cannot ask for the return of the thing pledged until he has paid the debt
c. The pledge does not automatically become the owner if at the time stipulated the obligation is still b. No, because the security for the obligation is already lost even due to fortuitous event
unfulfilled c. Yes, because the security for the obligation was lost without the fault of D
d. none of the above d. No, because the creditor has the right to decide when to demand payment

20. Chattel mortgage and pledge 28. A, B and C are solidary debtors of X in the amount of P 12,000. X then made a demand from A but was able
a. Involves immovable property c. Security for the performance of to collect P8,000 only because X was remitting A’s share of P 4,000. How much can A collect from B and C?
an obligation a. P 12,000 b. P 8,000 each c. P 3,000 each d.
b. Delivery of property to the creditor is necessary d. All of the above P 4,000 each

21.It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which the parties beco 29. X is indebted to Y for P 50,000. On due date, X tenders payment to Y but the latter refused for no reason at
me bound to each other to the end that no one shall be unjustly enriched or benefited at the expense of another all.
. a. X’s obligation is extinguished.
a. Agreement b. Vinculum juris c. Contracts d. Quasi- b. X should keep the money until Y is ready to accept payment
Contracts c. X should make a valid consignation so that the obligation may be extinguished.
d. None of the above.
22.This takes place when something is received when there is no right to demand it, and it was unduly delivered
thru mistake. 30. Property is alienated to the creditor in satisfaction of a debt in money
a. Solutio Indebiti b. Negotiorum Gestio c. Vinculum juris d. a. Compensation b. Confusion c. Dation in payment d. Payment
Prestation by cession

23. This happened when the creditor makes a demand and the obligor fails to deliver the thing. 31. Suspension of payments
a. Negligence b. Mora solvendi c. Mora accipiendi d. Compensatio morae a. the process of recovery and reorganization
b. deferral of payment due insufficient property to cover all the debtor’s debts
24. Once substitution has been made, the loss of the principal on account of the obligor’s fault c. application filed by a debtor to be discharged from his debts and liabilities
a. Renders him liable c. Does not render him liable d. none of the above
b. Sometimes renders him liable d. Oftentimes renders him liable
32. The following are the requisites before a contract entered into in fraud of creditors may be rescinded, except:
25. Three of the following statements are true. Which one is false? a. There must be credit existing prior to the celebration of the contract.
a. Not only the parties, but their heirs and assigns are bound by their contract. b. There must be fraud or the intent to commit fraud to the prejudice of the creditor seeking
b. Obligations arising from contracts have the force of law between the contracting parties and must rescission.
be complied with in good faith. c. The creditor cannot in any legal manner collect his credit (subsidiary character of rescission)
c. Fraud committed in the performance of an obligation gives the injured party the right to annul the d. The object of the contract must be legally in the possession of a 3rd person in good faith.
contract.
d. Generally, the debtor is not liable for the non-performance of his obligation due to fortuitous event. 33. A person appointed by the Court to closely oversee and monitor the operations of the debtor, ensure that the
value of the debtor’s property is reasonably maintained during the pendency of the rehabilitation proceedings
a. indorser b. conservator c. monitor d. receiver

26. The debtor shall lose every right to make use of the period 34. Corporate rehabilitation
a. When the debtor impairs the guaranty he gave and he cannot replace it with an equally satisfactory a. the process of recovery and reorganization
one b. deferral of payment due insufficient property to cover all the debtor’s debts
b. When the guaranty given by the debtor disappeared through a fortuitous event and he immediately c. application filed by a debtor to be discharged from his debts and liabilities
gives new one equally satisfactory d. none of the above
c. When the debtor does not violate any undertaking, in consideration the creditor agreed to the period
d. When the debtor does not attempt to abscond 35. Which of the following statements is false about involuntary insolvency
a. the debtor is in a state of insolvency
27. D obtained a loan from C amounting to P500,000.00 payable on October 1, 2015. To secure the loan, D b. a proceedings filed with the proper court
mortgaged his car to C. On July 15, 2015, while the car of D was at the parking lot, the building at the c. adjudication of insolvency made on petition of three or more creditors of an insolvent debtor
eastern side of the parking lot collapsed and all the cars at the parking lot were totally destroyed. On July d. allows the corporation to recover and be able to continue its business as a going concern.
17, 2015, C demanded payment of D’s obligation, but D refused to pay. Is D’s refusal valid?
a. Yes, because his obligation is with a period and the parties must respect the period 36. Jurisdiction over corporate rehabilitation proceedings
a. Regional Trial Court b. SEC c. PDIC d. c. H cannot demand payment from the persons secondarily liable before the tenth day after
Central Bank presentment for acceptance
d. X may subsequently accept the bill after he has dishonored it.
37. Duties and powers of a rehabilitation receiver, except
a. oversees and monitors operations of the debtor 44. M makes a note payable to P or bearer. P indorses it to A. X obtains possession of the note fraudulently and
b. ensures that the value of the debtor’s property is reasonably maintained indorses it to B by forging A’s signature. B indorses to C, who in turn, delivers it to D, a holder in due course
c. implements the rehabilitation plan a. the indorsement of P, A and B are not necessary
d. takes over the management and control of the debtor b. A can be held liable to D
c. M is liable to D
38. Effects of a Stay Order, except d. all of the above
a. Suspension of enforcement of claims against the debtor
b. Prohibiting the debtor from selling and disposing its properties 45. Which of the following is non-negotiable?
c. Prohibiting the debtor from paying its suppliers a. I promise to pay P or order P 5,000 on or before the start of the school year 2017-2018.
d. Prohibiting the debtor from paying its bank loans b. 60 days after sight, pay to the order of P the sum of P 5,000.
c. I promise to pay P or order P 5,000 thirty (30) days after the death of his mother.
39. The Corporate Rehabilitation Plan d. Pay to the order of P the sum of p 5,000 upon his reaching legal age.
a. binding upon the debtor only
b. binds the creditors who participated in the rehabilitation proceedings 46. The number of days from the date appearing on a check within which a drawer should keep sufficient funds
c. binds the creditors whether or not their claims are scheduled to cover the full amount of the check
d. all of the above a. 30 days b. 60 days c. 90 days d. 120 days

40. Contents of the Rehabilitation Plan 47. The maximum amount of fine that will be imposed by the court if the amount of the bounced check is P
a. desired business targets or goals 150,000.00
b. duration and coverage of the rehabilitation a. P 150,000 b. P 200,000 c. P 250,000 d.
c. means for execution of the rehabilitation plan P 300,000
d. all of the above
48. When the manner of management of a partnership has not been agreed upon
41. The following are elements for violation of BP 22, except a. All of the partners shall be considered agents c. The capitalist shall be considered
a. The making or drawing of a check to apply to an account or for value managers
b. Knowledge by the drawer that he does not have sufficient funds with the bank when the check is b. The industrial partners shall be considered agents d. none of the above
presented for payment
c. Dishonor for fund insufficiency or for stop payment order of the drawer 49. Cannot engage for their own account in any operation which is of the kind of business in which the partnership
d. Payment of the value of the check by the drawer within 5 days from receipt of the notice of the is engaged
dishonor a. capitalist partner b. industrial partner c. general partner d. liquidating partner

50. All partners, including industrial ones, shall be liable with all their property and after the partnership assets
have been exhausted
42. Which of the following is negotiable? a. solidary b. pro-rata c. proportionate to their contribution d. none
a. Pay to the order of P P10,000 out of my share of the profits I may receive from ABC Corporation.
b. I promise to pay P or order P 10,000 to be debited with his current account with me. 51. The following are the obligations of the partners among themselves and to the partnership except
c. I promise to pay P or order P 10,000 out of the proceeds of the sale of my car. a. To answer for eviction in case the partnership is deprived of the determinate property contributed
d. None of the above. b. To contribute anytime they prefer the money, property or industry which they have promised to contribute
c. To answer to the partnership for the fruits of the property the contribution of which was delayed
43. A bill of exchange for the amount of P10,000.00 payable to the order of P ten (10) days after sight was issued d. To preserve the property with the diligence of a good father of a family pending delivery to the partnership
by D to P. The bill was specially indorsed from P to A, A to B, B to C, C to D and D to H, the holder. When H
presented it to X, the drawee, it was dishonored by non-acceptance. H sent notice of dishonor to the drawer 52. A stipulation which excludes one or more partners from any share in the profits and losses is
and all indorsers. Which of the following statements is incorrect: a. void b. valid c. voidable d.
a. The notice of dishonor to B inures to the benefit of C and D unenforceable
b. X, the drawee, cannot be held liable on the bill
53. A stockholder’s right to inspect books and records of a corporation will be properly denied if the stockholder:
a. Wants to use corporate stockholder records for a personal business 63. The Certificate of Registration of a corporation may be revoked except:
b. Employs an agent to into inspect the books and records. a. Fraud in procuring its certificate of incorporation
c. Intends to commence a stockholder’s derivative suit. b. Continuous inoperation for a period of at least 3 years
d. Is investigating management misconduct. c. Refusal to comply with the lawful orders of the Commission
d. Failure to file by-laws within the required period
54. After dissolution, a partner can bind the partnership
a. when partnership is dissolved because it is unlawful to carry on the business 64. Which is not found in the Articles of Incorporation
b. by an act appropriate for winding up partnership affairs a. Name of corporation c. Time and place of meeting
c. where the partners has become insolvent b. Number of directors d. Authorized capital stock
d. where the partner had no authority to wind up partnership affairs
65. The amount fixed in the articles of incorporation to be subscribed and paid in by the shareholders
55. Whose surname may appear in the partnership name a. Subscribed capital stock c. Authorized capital stock
a. general partner b. industrial partner c. managing partner d. all of the above b. Outstanding capital stock d. Paid-up capital stock

56. Which of the following statements is true? 66. A corporation acquires juridical personality
a. All partners are liable proportionately for the contracts entered into and in the name of the a. upon issuance of certification of incorporation c. upon submission of the articles of
partnership. incorporation
b. Limited partners are liable pro rata and subsidiary with their separate property for partnership debts. b. upon agreement of the corporators d. all of the above
c. When a partner dies, his share in the partnership will be distributed among the remaining partners.
d. The individual property of a deceased partner shall be liable for all obligations of the partnership 67. Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding
incurred while he was a partner. a. 50% of the capital stock c. 1/3 of the capital stock

57. The change in the relation of the partners by any partner ceasing to be associated on of the business b. 2/3 of the capital stock d. 25% of the capital stock
a. Dissolution b. Winding up c. Termination d.
Liquidation 68. Rules of action adopted by the corporation for its internal regulations and for the government of its officers and
of its stockholders or members
58. The liability of the director or trustee for the issuance of watered stock is: a. Articles of incorporation b. Board Resolution c. By-laws d. Stock
a. Joint b. Solidary c. Mancomunada d. Pro rata Certificate

59. The ratification by the stockholders is required for its validity 69. Which is not a right of stockholders
a. Power to invest corporate funds in another corporation a. Elect and remove directors c. Adopt and amend by-laws
b. Power to fill vacancy in the Board caused by the death of one director where there is quorum b. Declare cash dividends d. Attend stockholders’ meetings
c. Power to declare cash dividends
d. All of the above 70. The following are contents of a corporate by-laws, except
a. Manner of election of directors or trustees c. Form for proxies
60. Two or more corporations unite, one corporation which remains in being, absorbing the other which disappears b. Required quorum in meetings d. Number of directors/trustees
as a separate corporation
a. merger b. joint-venture c. consolidation d. purchase 71. Shares issued and fully paid for, but subsequently reacquired by the issuing corporation
a. redeemable shares b. founders’ shares c. treasury shares d. preferred shares
61. Voluntary dissolution of a corporation
a. legislative enactment c. by vote of BOD and stockholders 72. A corporation shall exist for a period no longer than
b. expiration of term d. by order of the SEC a. 20 years b. 30 years c. 40 years d.
50 years
62. The number of the Board of Trustees of a non stock non profit educational institution should be
a. five (5) only 73. Which of the following statements is true?
b. any number for as long as it is not less than five (5) and no more than eleven (11) a. A corporator may not be an incorporator.
c. any number in multiples of five (5), for as long as it is not less than five (5) and no more than b. A corporation can be an incorporator of another corporation.
fifteen (15). c. All incorporators of all kinds of corporation must be citizens of the Philippines.
d. not less than five (5) nor more than ten (10) in multiples of five (5). d. The number of incorporators as stated in the Articles of Incorporation can be amended.
74. Rules applicable to non-stock corporations, except: b. Partnership where the director is a general partner d. First cousin of the director
a. Prohibition against distribution of dividends
b. Cannot engage in business with the object of making profits 85. Money laundering is the process availed by criminals to
c. Right to vote of members dependent on the amount of their contribution a. mix the illegal source of funds
d. Governed by the Board of Trustees b. to make funds illegally obtained appear to have originated from legitimate sources
c. use money illegally obtained to commit crimes
75. Which of the following is not regulated by the Securities and Exchange Commission? d. all of the above
a. Submission of Financial Reports c. Registration of private corporations
b. Regulation of pre-need plans d. Registration of patents and trademarks 86. Money laundering offenses, exception
a. Knowingly transacting any monetary instrument/property which represents, involves or relates to the
76. Kinds of securities, except proceeds of an unlawful activity
a. trust receipts b. investment contracts c. trust certificates d. Shares of stocks b. Attempting to transact any monetary instrument which relates to the proceeds of an unlawful activity.
c. Knowingly failing to disclose and file with the AMLC any monetary instrument required to be
77. Refers to unlawful trading in securities by persons who possess material nonpublic information about the disclosed and filed.
company whose securities they buy or sell, or about the market for such securities d. None of the above.
a. Insider trading b. Broker trading c. Stocks trading d. Option
trading 87. The process where a bank is placed under when it is in a state of continuing inability or unwillingness to
maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors
78. The deposit insurance claim must be filed a. Receivership b. Conservatorship c. Closure d. Suspension of
a. within six (6) months from the date of bank takeover payments
b. within twenty-four (24) months after bank takeover
c. within six (6) months from knowledge of the bank takeover 88. Cooperatives’ net surplus is generally allocated based on the provision of the individual coop’s by-laws and
d. within twenty-four (24) months from knowledge of the bank takeover in accordance
with the Cooperative Code, as follows:
79. How much insurance can a depositor claim from PDIC with three (3) savings accounts, to wit: A B C D
Savings Account 1 P 200,000
Savings Account 2 P 600,000 Reserved Fund 10% 10% 50% 65%
Savings Account 3 P 400,000
a. P 1,200,000 b. P 1,500,000 c. P 1,100,000 d. Cooperative Educ. & 10% 10% 10% 10%
P 1,000,000
Training Fund
80. Deposit not covered by PDIC Optional Fund 7% 5% 7% 5%
a. savings deposit b. time deposit c. securities d. none of the above
Community Devt 3% 5% 3% 5%
81. Which is not covered in the Bank Secrecy Law? Fund
a. Checking accounts b. Treasury bonds c. Time deposits d. Trust Funds Interest on Capital & 70% 70% 30% 15%
Patronage Refund
82. Republic Act No. 1405 provides that bank deposits may not be examined, inquired and looked into, except:
a. Upon written permission or consent in writing by the depositor.
b. In cases of impeachment of the President
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials.
d. all of the above

83. As prescribed by the Monetary Board, loans against real estate shall not exceed ______ of the appraised
value of the real estate
a. 25% b. 50% c. 75% d. 100%

84. Which of the following is allowed to borrow from a bank even without the written approval of the majority of all
the directors?
a. Directors and officers c. Spouse of the director
89. Upon registration of the Cooperative with the Cooperative Development Authority, the former must have at 98. The rights of an author or artist with respect to his or her own creation are governed by the law on
least a. Patent b. Trademark c. Copyright d. Industrial design
a. P15,000 paid up share capital c. 25% of the Authorized Share Capital is subscribed
b. 25% of the Subscribed Share Capital is paid d. All of these 99. A street vendor in Divisoria is selling fake Louis Vuitton bags. Under which are of intellectual property would
the company manufacturing LV bags likely seek remedy?
90. The following are the principles of cooperatives, EXCEPT a. Patent b. Trademark c. Copyright d. Industrial design
a. Voluntary and open membership c. concern for community
b. Democratic Officers’ control d. autonomy and independence 100. Cooperatives are to operate in accordance with the Philippine Cooperative Code of 2008, which is
a. RA 9520 b. RA 9298 c. RA 7160 d. RA 6938
91. An investment in share capital of a member of a primary cooperative is limited to
a. A minimum of 10% of the subscribed capital LAW ON OBLIGATION
b. A maximum of 10% of the subscribed capital 1. Shawn, a 14 year old boy, Bryant and Chelsa wrote and signed a promissory note which states “I
c. A minimum of 10% of the authorized capital promise to pay Dick P30,000.” At the maturity date of the note, how much may Dick validly collect from
d. A maximum of 10% of the authorized capital Chelsa if Bryant becomes insolvent?

92. CPA in Public Practice and is accredited with the Cooperative Development Authority as Coop External A. P10,000
auditor, may undertake the external audit for a particular coop client for B. P20,000
a. Five consecutive years subject to renewal after a gap of 2 years C. P30,000
b. Three consecutive years subject to renewal after a gap of 2 years D. P15,000
c. One time non-renewable engagement for five consecutive years Computation
d. One time non-renewable engagement for Three consecutive years Solidary Debt P30,000
Less: Share of minor A (real defense) ( 10,000)
93. Statement 1- Any newly organized cooperative may register as multi-purpose at the discretion of the Amount that can be collected P20,000
organizers
Statement 2 – A single-purpose cooperative may transform into a multi-purpose type after at least 2 years 2. Lillian, who is domiciled in Lipa City, has an obligation to deliver a 2018 Ltd. Edition Black Fortuner to
of operation Lalaine, who is domiciled in Guimaras City. A 2018 Ltd. Edition Black Fortuner is located in Tanauan
a. Only statement 1 is correct c. only statement 11 is correct City at the time of perfection of obligation while another 2018 Ltd. Edition Black Fortuner is located in
b. Both statements are correct d. Both statements are wrong Tagaytay City at the agreed delivery date. Where shall the car be delivered by A to B?
A. Lipa City
94. Under RA 9520, the following are mandated committees of a cooperative, EXCEPT B. Guimaras City
a. Credit Committee b. Audit Committee c. Election Committee d. Ethics Committee C. Tanauan City
D. Tagaytay City
95. Statement 1- A cooperative may use Revaluation Model in accounting its non-monetary assets
Statement 11- Biological Assets of a cooperative are accounted at either cost method or fair value method 3. What is the prescriptive period of the right to file an action based on quasi-delict?
a. Only statement 1 is correct c. only statement 11 is correct A. 10 years
b. Both statements are correct d. Both statements are wrong B. 6 years
C. 5 years
96. The cooperative maybe organized by the following, EXCEPT D. 4years
a. At least 10 natural persons
b. Who are Filipino citizens 4. A has 3 outstanding due and demandable obligations to B consisting of: (1) Accounts Payable in the
c. Of legal age amount of P1,000,000; (2) Notes Payable in the amount of P1,000,000 which is solidary debt with G;
d. And are residing or working in the intended area of operation (3) Loans Payable with 10% interest in the amount of P1,000,000; and (4) Mortgage Payable in the
amount of P1,000,000 which is secured by real estate mortgage over A’s land. A paid P1,000,000 to
97. The Monetary Board may summarily forbid a banking institution from doing business in the Philippines and B and designated the payment to the accounts payable. Which debt shall the payment be applied by
placed under receivership when B?
a. it is unable to pay its liabilities as they become due A. Accounts payable
b. it is unable to pay its liabilities caused by extraordinary demands B. Notes payable
c. it has sufficient realizable assets to meet its liabilities C. Loans payable
d. all of the above D. Mortgage payable
5. A, B and C wrote and signed a promissory note which states “We promise to pay D and E P60,000.” LAW ON CONTRACTS
At the maturity date of the note, D indorsed back the promissory note to A. How much obligation is
extinguished and by what mode of extinguishment of obligation? 11. What is the status of oral contract of lease of public streets or thoroughfares entered by a city
A. P20,000 by confusion government with private market stallholders at a monthly rental of P500?
B. P60,000 by compensation A. Unenforceable
C. P30,000 by remission B. Rescissible
D. P10,000 by merger C. Voidable
Computation: Since the obligation is joint, only the share of D and A will be extinguished amounting D. Void
to P10,000 (P60,000/3=P20,000/2=P10,000)
12. Which of the following executory contracts is not required to be in writing to be enforceable under the
6. A has an obligation to deliver a specific cellphone to B but a specific laptop may be substituted in lieu Statute of Fraud?
of the specific cellphone. Who has the right of choice in this type of obligation? A. Contract of sale of a condominium unit at a price of P400
A. A unless there is stipulation to the contrary B. Contract for a piece of work of a table at a price of P500
B. B unless there is stipulation to the contrary C. Contract of guaranty
C. Always A D. Contract of lease of land for a period of two years at a monthly rental of P300
D. Always B
13. A, an illiterate, borrowed P100,000 from B. Aside from that, A mortgaged his land to B which the latter
7. In which type of delay is consignation the proper legal remedy of the injured party? accepted to secure the payment of the loan. B prepared a deed of sale with a right to repurchase of
A. Mora accipiendi the land at a price of P100,000 which A signed after B explained that such document evidenced their
B. Mora solvendi agreement. What is the proper legal remedy available to A?
C. Mora obligori A. Action for reformation of instrument
D. Mora pactum B. Action for rescission of contract
C. Action for annulment of contract
8. A has an obligation to pay P100,000 to B but the obligation states that “A will pay the obligation when D. Action for declaration of nullity of contract
his means permit him to do so.” Which of the following statements is correct?
A. The obligation is due and demandable. 14. Which of the following contracts is perfected by the delivery of the subject matter of the contract?
B. The obligation is subject to a suspensive condition. A. Contract of sale
C. The obligation is subject to a resolutory period. B. Contract of partnership
D. The court may fix the suspensive period of the obligation. C. Contract of pledge
D. Contract of real estate mortgage
9. A has an outstanding obligation in the amount of P100,000 to C with G serving as guarantor and P
pledging his car to secure the fulfilment of A’s obligation. At the maturity date of the obligation, P paid 15. A delivered a specific calculator to B so that the latter will be able to use it for a period of one month
P100,000 to C without the knowledge of A. Which of the following is correct? without any rental payment. In case of doubt in the incidental circumstance of this contract, how shall
A. P may only recover from A only in so far as the payment is beneficial to A. it be interpreted?
B. P cannot recover from A because the payment is without the knowledge or consent of A. A. It shall be interpreted in favor of greatest reciprocity of interest.
C. P may go after G with A will not be able to reimburse P because of insolvency. B. It shall be interpreted in such a manner to make the contract null and void.
D. P may recover from C in case of non-reimbursement by A based on the principle of unjust C. It shall be interpreted in favor of least transmission of rights.
enrichment. D. It shall be interpreted in favor of the beneficiary B.

10. Which of the following obligations is due and demandable? 16. A, an insane sold his specific laptop to B at a price of P10,000. After obtaining knowledge of the
A. Obligation with a suspensive condition contract, C, a childhood friend of A, filed an action before the court for annulment of the contract of
B. Obligation in diem sale. What principle of contract is violated by the filing of such action?
C. Obligation ex die A. Mutuality of contract
D. Obligation payable as soon as possible B. Relativity of contract
C. Liberality of contract
D. Legality of contract
17. A delivered P1,000 cash to B as a contract of deposit which the latter thought to be a contract of loan.
What is the proper legal remedy on the part of the injured party? 22. In which of the following instances are the goods still in transit which will allow the unpaid seller to
A. Action for reformation of instrument exercise his right of stoppage in transitu in case of insolvency of the buyer?
B. Action for rescission of contract A. If the buyer obtains delivery of the goods before arrival at the appointed destination.
C. Action for annulment of contract B. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods
D. Action for declaration of nullity of contract in his behalf, after arrival of the goods at their appointed destination.
C. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent.
18. A sold in writing an authentic Coach Bag at a price of P10,000 to B. At the time of delivery of the bag, D. If the goods are rejected by the buyer, and the carrier or other bailee continues in
A delivered a counterfeited Coach Bat to B with a price of P7,400 only. What is the proper legal remedy possession of them, even if the seller has refused to receive them back.
on the part of B?
A. Action for rescission of rescissible contract by reason of lesion of more than ¼ the value of the 23. S sold his lot with an area of 100 square meters to B at a selling price of P1,000 per square meter.
authentic bag After delivery of the lot, B discovered that the actual area is only 91 square meters. What is the legal
B. Action for damages for breach of contract by reason of fraud in the performance of remedy available to B?
contract A. B may ask for proportionate reduction of price and must pay P91,000 only.
C. Action for annulment of voidable contract by reason of dolo causante. B. B can ask for cancellation of the contract of sale.
D. Action for declaration of nullity of contract by reason of illegality of contract. C. Either A or B.
D. Neither A nor B.
19. A borrowed P10,000 from B. B filed an action to collect a sum of money against A which resulted to Computation
the issuance of writ of attachment. The cellphone of A is the first to be attached by the sheriff. (91 square meters x P1,000 = P91,000) Note: Cancellation is allowed only if the lacking area is at
Afterwards, A orally sold and delivered his laptop to C at a price of P5,000. Payment of the price will least 10% of stated area.
happen after one week from the perfected of contract. What is the status of contract of sale of laptop?
A. Rescissible 24. A, B, and C are co-owners of a rural lot with an area of 1,000 square meters in the ratio of 6:1:3,
B. Voidable respectively. The co-owned lot is bounded by farm lots of D and E with an area of 50 square meters
C. Perfectly valid and 75 square meters, respectively. A sold his share of the co-owned lot to F. Who shall have the
D. Unenforceable preferred right to repurchase the lot sold by A to F?
A. B because his share in the co-owned lot is smaller.
20. Under the New Civil Code of the Philippines, what is the moment of perfection of contract entered into B. B and C with an area of 150 square meters and 450 square meters, respectively
through telegram? C. D because his adjoining rural lot has smaller area.
A. The contract is perfected from the moment the acceptance is declared or made. D. E because his adjoining rural lot has larger area.
B. The contract is perfected from the moment the offeree transmits the notification of acceptance to
the offeror. Computation
C. The contract is perfected from the moment that the notification of acceptance is in the hands of 1,000 x 6/10 = 600 SQM x ¼ = 150SQM to B and 600 SQM x ¾ = 450SQM
the offeror.
D. The contract is perfected from the moment the offeree’s acceptance comes to the 25. What is the prescriptive period of the right to file an action based on breach of warranty of sale of
knowledge of the offeror. immovable against non-apparent and unregistered burden or servitude?
A. 40 days from the date of contract of sale or from the discovery of burden
LAW ON SALES B. 6 months from the date of contract of sale or from the discovery of burden
C. 1 year from the date of contract of sale or from the discovery of burden
21. S sold a residential condominium unit to B at an instalment price of P6,000,000 payable in 50 years at D. 3 days from the date of contract of sale or from the discovery of burden
a monthly rental of P10,000 per month. After payment of several instalments totalling P1,200,000, B
defaulted in the payment of remaining instalments which resulted to the cancelation of the contract of 26. A and B are legally married and their property regime is governed by absolute community of property.
sale after the lapsing of the grace period. What is the amount of cash surrender value to be received A orally sold his specific cellphone to B at a price of P500 with a carrying amoun of P800 after B pointed
by B from S as a result of cancellation? a gun to A. Delivery of the specific cellphone will happen after three years. What is the status of the
A. P600,000 contract of sale?
B. P900,000 A. Rescissible
C. P840,000 B. Voidable
D. P960,000 C. Unenforceable
Under Maceda Law, 10 years instalment will entitle the buyer to 75% of total amount paid (P1,200,000 D. Void
x 75% = P900,000) in case of cancellation
27. B rented the specific truck of S. After the end of the contract, S sold the property to B. As a result of A. Illiquidity
sale, B continues to have possession of the property. What type of constructive delivery is present? B. Insolvency
A. Traditio clavium C. Bankruptcy
B. Traditio longa manu D. Impoverishment
C. Traditio brevi manu
D. Traditio constitutum possessorium 32. An individual debtor possesses sufficient property to cover all his debts but he foresees the impossibility
of meeting them when they respectively fall due. What is the proper petition that must be filed by such
LAW ON PLEDGE, REAL ESTATE MORTGAGE, CHATTEL MORTGAGE, ANTICHRESIS insolvent individual debtor?
A. File a petition for rehabilitation
28. A borrowed P100,000 from B and mortgaged his house to secure the payment of the loan. The B. File a petition for voluntary liquidation
contract of real estate mortgage is not notarized and not registered with Registry of Deeds. The C. File a petition for declaration of state of suspension of payments
contract of real estate mortgage provides that A is prohibited from selling the mortgaged house and D. File a petition for involuntary liquidation
in case of default of A at the maturity date of the loan, B will become the automatic owner of the
mortgaged house. Which of the following statements is correct? 33. An insolvent individual debtor made a proposal in his petition for the settlement of his obligations the
A. A may still sell the house to third person despite the prohibition in the contract of real payment of which is suspended by the suspension order issued by the Regional Trial Court. What is
estate mortgage. the required vote by the creditors affected for the approval of such proposal of insolvent individual
B. B becomes the owner of the mortgaged house upon default of A. debtor?
C. The contract of real estate mortgage is null and void because of the stipulation of pactum A. 4/5 of the creditors voting to unite upon the same proposition and the claims represented by said
commissorium which is contrary to law and public policy. majority vote amount to at least 3/5 of the total liabilities mentioned in the petition.
D. The contract of real estate mortgage is unenforceable because it is not in public document and B. 3/5 of the creditors voting to unite upon the same proposition and the claims represented by said
not registered with Registry of Deeds majority vote amount to at least 2/3 of the total liabilities mentioned in the petition.
C. 1/3 of the creditors voting to unite upon the same proposition and the claims represented by said
29. P borrowed P1,000 from C. P pledged and delivered his specific cellphone to C as collateral for the majority vote amount to at least 4/5 of the total liabilities mentioned in the petition.
loan. The contract of pledge provides that C may recover the deficiency as a result of foreclosure D. 2/3 of the creditors voting to unite upon the same proposition and the claims represented
sale. P failed to pay his obligation at the maturity date which prompted C to sell the pledged by said majority vote amount to at least 3/5 of the total liabilities mentioned in the petition.
cellphone at public auction. The cellphone was sold at a price of P900. Which of the following
statements is correct? 34. An individual debtor has liabilities exceeding P500,000 but his assets are not sufficient to cover his
A. The contract of pledge is extinguished but the contract of loan is extinguished up to P900 only. liabilities. What is the proper petition that must be filed by such insolvent individual debtor?
B. Pledgee P may still recover the deficiency of P100 because there is stipulation to that effect. A. File a petition for rehabilitation
C. The contract of pledge is not extinguished. B. File a petition for voluntary liquidation
D. Both the contract of pledge and contract of loan are extinguished by the public sale. C. File a petition for declaration of state of suspension of payments
D. File a petition for involuntary liquidation
30. D borrowed P100,000 from C and entered into a chattel mortgage involving his land to secure the
payment of his loan. D failed to pay the loan at maturity date. Which of the following statements is 35. What is the quantitative threshold before any creditor or group of creditors may file a petition for
correct? involuntary liquidation of an insolvent individual debtor?
A. The contract of chattel mortgage is null and void in so far as the contracting parties are A. Claim of at least P500,000
concerned because the subject matter is a land. B. Claim of at least P1,000,000
B. C cannot foreclose the chattel mortgage over the land because the subject matter must be a C. Claim of at least P5,000,000
movable property. D. Claim of at least P25,000,000
C. C may still foreclose the chattel mortgage on the land on the basis of doctrine of
estoppel. CORPORATE REHABILITATION
D. Third person directly affected by the contract of chattel mortgage is not allowed to file an action
for declaration of nullity because of relativity of contract. 36. It shall refer to the restoration of the debtor to a condition of successful operation and solvency, if it is
shown that its continuance of operation is economically feasible and its creditors can recover by way
INSOLVENCY LAW of the present value of payments projected in the plan, more if the debtor continues as a going
concern than if it is immediately liquidated.
31. It refers to the financial condition of a debtor that is generally unable to pay its or his liabilities as they A. Dissolution
fall due in the ordinary course of business or financial condition of a debtor when he has liabilities that B. Liquidation
are greater than its or his assets. C. Rehabilitation
D. Reorganization B. He becomes the holder of the instrument after it is overdue, and with notice that it had
been previously dishonored if such was the fact.
37. Which of the following cases is not stayed by the suspension order issued by the Rehabilitation C. He takes the instrument in good faith and for value.
Court? D. At the time the instrument is negotiated to him, he has no notice of infirmity in the instrument or
A. Civil action to collect unpaid taxes pending before Municipal Trial Court defect in the title of the person of the person negotiating it.
B. Judicial foreclosure of real estate mortgage involving the land of the corporation pending before
Regional Trial Court 44. Which type of indorsement may prohibit the further negotiation of a negotiable instrument?
C. Criminal action against the corporate officer pending before Municipal Trial Court A. Conditional indorsement
D. Civil action for damages involving corporate tort pending before Regional Trial Court B. Qualified indorsement
C. Restrictive indorsement
38. What is the quantitative threshold before any creditor or group of creditors may file a petition for D. Facultative indorsement
involuntary corporate rehabilitation of an insolvent corporation?
A. Claim of at least P1,000,000 or at least 25% of subscribed capital stock, whichever is BOUNCING CHECKS LAW
higher
B. Claim of at least P500,000 or at least 10% of subscribed capital stock, whichever is higher 45. Which of the following is not an element of criminal violation of Batas Pambansa Bilang 22 for issuance
C. Claim of at least P10,000,000 or at least 15% of subscribed capital stock, whichever is higher of worthless checks?
D. Claim of at least P5,000,000 or at least 20% of subscribed capital stock, whichever is higher A. There must be making, drawing, and issuance of any check to apply for account or for value.
B. There must be knowledge of the maker, drawer, or issuer that at the time of issue he does not
39. What is the required vote by the creditors affected by the rehabilitation of a corporation for the have sufficient funds in or credit with the drawee bank for the payment of the check in full upon
approval of the proposed rehabilitation plan? its presentment.
A. Approval by at least 2/3 of all classes of creditors whose rights are affected. C. There must be intent to commit fraud upon the issuance of worthless check.
B. Approval by at least 1/3 of all classes of creditors whose rights are affected. D. There must be subsequent dishonor of the check by the drawee bank for insufficiency of funds
C. Approval by all classes of creditors whose rights are affected. or creditor dishonor for the same reason had not the drawer, without any valid cause, ordered the
D. Approval by at least ¼ of all classes of creditors whose rights are affected. bank to stop payment.

40. It is a type of rehabilitation wherein the insolvent debtor and its creditors already negotiated and 46. What is the prima facie evidence that the drawer of issuer of check has knowledge that check he issued
prepared the rehabilitation plan before they file a verified petition to the court for the approval of such has insufficient fund?
plan. A. The making, drawing and issuance of a check payment of which is refused by the drawee
A. Voluntary court-supervised rehabilitation because of insufficient funds in or credit with such bank, when presented within sixty (60) days
B. Involuntary court-supervised rehabilitation from the date of the check.
C. Out-of court or informal rehabilitation B. The making, drawing and issuance of a check payment of which is refused by the drawee
D. Pre-negotiation rehabilitation because of insufficient funds in or credit with such bank, when presented within thirty (30) days
from the date of the check.
NEGOTIABLE INSTRUMENTS LAW C. The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within twenty (20) days
41. Which of the following is not a warranty of a qualified indorser of negotiable instrument? from the date of the check.
A. That all prior parties had capacity to contract. D. The making, drawing and issuance of a check payment of which is refused by the drawee
B. That the instrument, is at the time of his indorsement, is valid and subsisting. because of insufficient funds in or credit with such bank, when presented within ninety
C. That the instrument is genuine and in all respects what it purports to be. (90) days from the date of the check.
D. That he has good title to the instrument.
47. What is the evidence or defense that may be used by the issuer of a worthless check to destroy the
42. Which of the following is a defense that is available against a holder in due course? prima facie evidence that he has knowledge of insufficiency of fund of the check?
A. Fraud in factum A. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements
B. Acquisition of instrument by force or duress for payment in full by the drawee of such check within (10) banking days after receiving notice
C. Illegality of consideration that such check has not been paid by the drawee.
D. Absence of delivery of complete instrument B. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements
for payment in full by the drawee of such check within (15) banking days after receiving notice
43. Which of the following is not a requisite of a holder in due course? that such check has not been paid by the drawee.
A. He holds an instrument that is complete and regular upon its face.
C. The maker or drawer pays the holder thereof the amount due thereon, or makes B. Movable property
arrangements for payment in full by the drawee of such check within (5) banking days after C. Labor or service
receiving notice that such check has not been paid by the drawee. D. Intangible asset
D. The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements 55. It is the change in the relation of the partners caused by any partner ceasing to be associated in the
for payment in full by the drawee of such check within (3) banking days after receiving notice that carrying on of the business.
such check has not been paid by the drawee. A. Partnership liquidation
B. Partnership incorporation
LAW ON PARTNERSHIP C. Partnership termination
D. Partnership dissolution
48. In the absence of agreement as to sharing of partnership losses, how shall the losses be distributed to
the partners? 56. Which of the following claims shall be paid last in the liquidation of general partnership?
A. It should be divided equally among the capitalist partners. A. Those owing to partners in respect of profits.
B. It should be divided proportionately to the capitalist partners in accordance to the capital B. Those owing to the creditors other than partners.
contribution ratio. C. Those owing to partners in respect of capital.
C. It should be divided in accordance with the profit agreement among the capitalist partners. D. Those owing to partners other than capital and profits.
D. It should be dividend equally to all partners including the capitalist partners.
57. Which type of partner may be excluded by the injured partner in case he engaged in another business
49. Which of the following has no right to inspect the books of the partnership? without express permission of the partnership?
A. Nominal partner A. Industrial partner
B. Limited partner B. Capitalist partner
C. Dormant partner C. Limited partner
D. Secret partner D. All of them

50. Which of the following acts of the partnership may be done by the managing partner alone? CORPORATION CODE OF THE PHILIPPINES
A. Disposition of the goodwill of the business.
B. Confession of judgment. 58. In which type of corporate acts may a non-voting preferred stockholders disqualified from participating?
C. Approval of collecting bargaining agreement. A. Merger or consolidation of corporations
D. Renunciation of a claim of the partnership. B. Distribution of stock dividends
C. Increase or decrease of capital stock
51. Which of the following partners is not required to make additional share capital to the partnership to D. Sale of all or substantially all of corporate property
save the partnership in case of imminent loss of the business of the partnership?
A. Limited partner 59. Which type of corporation is allowed to issue no-par value common shares?
B. Managing partner A. Public utility
C. Industrial partner B. Insurance company
D. Silent partner C. Educational institution
D. Banks
52. Which of the following is the right of an assignee of a partner’s interest?
A. Right to participate in the management of the partnership 60. Which type of corporate officer is required to be a director of the corporation?
B. Right to vote in the selection of the managing partner A. Secretary
C. Right to the share in net income of his assignor B. Vice-President
D. Right to inspect the partnership book and demand audited financial statements of the partnership C. Treasurer
53. Which of the following instances will not automatically dissolve a general partnership? D. President
A. Insolvency of any partner
B. Insanity of any partner 61. Equitable-PCI Bank and BDO Unibank entered into business combination which will result to BDO
C. Death of any partner Unibank absorbing all the net assets of Equitable-PCI Bank. What type of business combination is
D. Civil interdiction of any partner present in this case?
A. Consolidation
54. Which of the following may not be contributed by a pure limited partner? B. Merger
A. Money C. Dissolution
D. Spin-off
69. Which of the following is an attribute of a private corporation?
62. Which of the following companies may be incorporated as a close corporation? A. It is created by mere consent.
A. Mining companies B. It enjoys the right of succession.
B. Oil companies C. The owners are liable up to the extent of their separate assets.
C. Stock exchange D. It has a personality which is not separate and distinct from its owners.
D. Review school
70. When does the juridical personality of a private corporation commence?
63. It refers to the right of the stockholder to demand the fair market value of his stocks in case he dissents A. From the moment of execution of contract among the incorporators of the corporation.
in particular corporate acts provided by the Corporate Code. B. From the moment of submission of articles of incorporation by the incorporators to the Securities
A. Preemptive right and Exchange Commission.
B. Appraisal right C. From the moment of obtaining consent among the incorporators.
C. Right of first refusal D. From the moment of issuance by Securities and Exchange Commission of Certificate of
D. Protective right Registration.

64. What is the required vote for the revocation of the power given to the Board of Directors to amend the 71. What is the effect of the failure of a private corporate to renew its corporate term within the deadline
By-Laws of the Corporation? set by the Corporation Code of the Philippines?
A. At least majority vote of the outstanding capital stock A. It will make such private corporation a de facto corporation.
B. At least 2/3 vote of the outstanding capital stock B. Such private corporation will be liable for fine before it may be able to renew its corporate term.
C. At least majority vote of Board of Directors and ratification by at least majority vote of the C. Such private corporation is ip so facto dissolved by operation of law.
outstanding capital stock D. Such failure will be a ground for court-ordered corporate dissolution.
D. At least majority vote of Board of Directors and ratification by at least 2/3 vote of the outstanding
capital stock 72. ABC Co. fails to comply with the minimum Filipino ownership as prescribed by the Constitution. Who
has the legal standing to question the juridical personality of such corporation?
65. Which of the following matters must be provided in the Articles of Incorporation of the Corporation? A. Any creditor of such corporation through an ordinary civil action.
A. Denial of preemptive right B. The state through special civil action called quo warranto proceedings filed by Solicitor
B. Creation of executive committee General.
C. Provision for compensation of directors C. Any stockholder of such corporation through a criminal action.
D. Entries to be made in the stock and transfer book D. Any prospective investor through an administrative action filed before Securities and Exchange
Commission.
66. ABC Co. is a proposed corporation with authorized capital stock of P60,000 and actual subscribed
capital stock of P32,000. What is the minimum paid up capital of this corporation? 73. Which of the following is not a valid consideration for the issuance of shares of stocks of a corporation?
A. P5,000 A. Future services
B. P8,000 B. Intangible property
C. P3,750 C. Previously incurred indebtedness
D. P7,500 D. Amounts transferred from unrestricted retained earnings
Computation (P32,000 x 25%) = P8,000 (25% of subscribed shares)
74. What is the period for the submission of the by-laws of the corporation in case it is not attached to the
67. Which of the following right is not available to unpaid subscribed stock which is not yet delinquent? articles of incorporation submitted to Securities and Exchange Commission?
A. Right to dividends A. Within 30 days from the submission of articles of incorporation to the Securities and Exchange
B. Right to vote in election of directors Commission
C. Right to inspect books of the corporation B. Within 20 days from the issuance of Securities and Exchange Commission of the Certificate of
D. Right to certificate of stock Incorporation
C. Within 15 days from the end of the fiscal year of the corporation
68. Which of the following right is still available to delinquent subscribed stock? D. Within 30 days from the issuance of Securities and Exchange Commission of the
A. Right to dividends Certificate of Incorporation
B. Right to vote in election of directors
C. Preemptive right 75. As a general rule, what is the maximum surplus profits that can be retained by a stock corporation?
D. Appraisal right A. 50% of paid up capital
B. 100% of paid up capital B. Willful failure to operate on a cooperative basis
C. 50% of authorized capital stock C. Failure to meet the required number of members of the cooperative
D. 100% of authorized capital stock D. Having obtained its registration through fraud

76. In which type of corporation is foreign ownership prohibited by 1987 Constitution? 83. What is the required vote for the merger of two or more cooperative into a single cooperative?
A. Mass media A. At least ¾ of all the members with voting rights
B. Advertising company B. At least 2/3 of all the members with voting rights
C. Public utility C. At least majority of all the members with voting rights
D. Educational institution D. At least 25% of all members with voting rights

77. Which of the following corporate act may be delegated to the executive committee? 84. What is the maximum par value of a share in a cooperative?
A. Distribution of stock dividends A. P5
B. Investment of corporate funds to other business B. P100
C. Amendment, repeal or adoption of corporate by-laws C. P10
D. Approval of compensation scheme of employees D. P1,000

COOPERATIVE CODE OF THE PHILIPPINES 85. What is the maximum limit on the share ownership of a member in a cooperative?
A. 10% of the share capital of the cooperative
78. What is quorum necessary for validity of meeting of General Assembly in ordinary cooperative? B. 5% of the share capital of the cooperative
A. At least 5% of all the members entitled to vote C. 25% of the share capital of the cooperative
B. At least 25% of all the members entitled to vote D. 20% of the share capital of the cooperative
C. At least majority of all the members entitled to vote
D. At least 2/3 of all the members entitled to vote 86. It refers to the fund which is the first priority in the distribution of the net surplus of the cooperative. It
pertains to the fund to be used for the stability of the cooperative and to meet net losses in its
79. It is a type of cooperative that promotes and undertakes savings and lending services among its operations.
members. It generates a common pool of funds in order to provide financial assistance to its members A. Retained earnings
for productive and provident purposes. B. Reserve fund
A. Cooperative bank C. Education and training fund
B. Insurance cooperative D. Optional fund
C. Service cooperative
D. Credit cooperative 87. A cooperative is intended to be established with authorized capital stock of P100,000 and actual
subscribed capital stock of P40,000. What is the minimum paid up capital of this proposed cooperative?
80. How many years must a single-line cooperative operate before it may transform into a multi-purpose A. P5,000
cooperative? B. P10,000
A. At least 2 years C. P15,000
B. At least 1 year D. P25,000
C. At least 3 years Note: Cooperative Code fixed the minimum paid up capital at P15,000.
D. At least 4 years

81. It is the highest highest policy-making body of the cooperative and shall exercise the powers of the
Cooperative as stated in the Cooperative Code.
A. Board of Directors PHILIPPINE DEPOSITOR INSURANCE CORPORATION LAW
B. Executive Committee
C. General Assembly 88. Which of the following is not insured by Philippine Deposit Insurance Corporation?
D. Board of Members A. Certificate of time deposit
B. Investment in government bonds
82. Which of the following is a ground for involuntary dissolution of a cooperative through an order by a C. Savings deposit
competent court after hearing? D. Demand or checking account
A. Insolvency
89. What is the maximum period provided by law to depositors to file their claim before Philippine Deposit
Insurance Corporation from its takeover of the closed bank? GENERAL BANKING LAW
A. Two years
B. Three years 95. It is the only bank allowed to exercise the powers of investment house and to invest in non-allied
C. Four years enterprises.
D. Five years A. Commercial bank
B. Rural bank
BANK SECRECY LAW C. Thrift bank
D. Universal bank
90. Under Republic Act No. 6426 also known as Foreign Currency Deposit Act of the Philippines, what is
the only exception provided by such law from the absolute confidentiality of foreign currency deposit? 96. Under Circular No. 425 of 2004 issued by Monetary Board of Bangko Sentral ng Pilipinas, what is the
maximum limit of loan to be granted by a bank to a single borrower?
A. Upon written permission or consent in writing by the depositor. A. 25% of net worth of the bank
B. In cases of impeachment of the President, Vice President, members of the Supreme Court, B. 20% of net worth of the bank
members of the Constitutional Commission (Commission on Elections, Civil Service Commission C. 10% of net worth of the bank
and Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason, D. 15% of net worth of the bank
bribery, graft and corruption, other high crimes or betrayal of public trust.
C. Upon order of a competent court in cases of bribery or dereliction of duty of public officials. CENTRAL BANK ACT
D. In cases where the money deposited or invested is the subject matter of the litigation.
97. Under the Central Bank Act, who shall be appointed as the receiver of a banking institution in case the
91. Which of the following is not protected by Republic Act No. 1405 also known as Bank Secrecy Law? conservatorship of a bank is converted into receivership?
A. Investment in government bonds A. Monetary Board of Bangko Sentral ng Pilipinas
B. Certificate of time deposit B. Supervising Officer of Bangko Sentral ng Pilipinas
C. Demand account C. Office of Government Corporate Counsel
D. Money market placement D. Philippine Depositor Insurance Corporation

ANTI-MONEY LAUNDERING LAW 98. Who is primarily liable to the notes and coins which are considered legal tender in the Philippine
jurisdiction?
92. What is the amount of covered transaction in so far as jewelry dealers are concerned for purposes of A. Bangko Sentral ng Pilipinas
reporting to Anti-Money Laundering Council? B. Government of the Republic of the Philippines
A. A transaction exceeding P500,000 C. Landbank of the Philippines
B. A transaction exceeding P1,000,000 D. Development Bank of the Philippines
C. A transaction exceeding P5,000,000
D. A transaction exceeding P100,000 INTELLECTUAL PROPERTY CODE

93. Which of the following companies is exempted by Anti Money Laundering Law from reporting reportable 99. A commissioned B to paint his garden. Who owns the painting and the copy right on the painting,
and suspicious transactions to Anti-Money Laundering Council? respectively?
A. Casino A. Both A
B. Remittance companies B. Both B
C. Auditing firm rendering assurance engagement C. A and B, respectively
D. Holding companies D. B and A, respectively
UNCLAIMED BALANCES LAW
100. Which of the following may be protected by patent registration?
94. Under Unclaimed Balances Law, what is the minimum period of dormancy of the deposit in a bank to A. Programs for computers
be considered unclaimed balances? B. Methods for treatments of the human body
A. At least 1 year C. Aesthetic creations
B. At least 10 years D. Microbiological process
C. At least 3 years
D. At least 5 years
PHILIPPINE DEPOSIT INSURANCE CORPORATION 4. What petition shall be filed by the Solicitor General or his representative in behalf of the Republic of the
Philippines before the RTC for the unclaimed balances to be forfeited in favor of the state where a deceased
1. Analiza has two separate single bank accounts with P1,000,000 and P2,000,000 balance, respectively in dies intestate in the Philippines leaving no heir or person by law entitled to the same?
the same bank which is closed by BSP. Belen, on the other hand, has two separate single bank accounts A. Petition for partition proceedings
with P3,000,000 and P2,000,000 balance, respectively with the said bank. Aside from that, Analiza has two B. Petition for estate settlement proceedings
separate joint accounts with different persons in the same bank. The first joint account of Analiza is with C. Petition for escheat proceedings
Belen with balance of P10,000,000 while the other joint account of Analiza is with Atasha with balance of D. Petition for certiorari
P4,000,000. How much is the maximum insured amount by PDIC from these deposits concerning Analiza
and Belen, respectively? 5. In which office shall the letter requesting the reactivation of unclaimed balances or dormant account be filed
A. P500,000 and P500,000 by the applicant depositor?
B. P1,000,000 and P750,000 A. Bureau of Treasury
C. P1,000,000 and P1,000,000 B. Bureau of Customs
D. P1,000,000 and P500,000 C. Bureau of Internal Revenue
E. D. Bureau of Immigration
GENERAL BANKING LAW
Analiza Belen Atasha
6. Which of the following powers is not allowed to be conducted by a commercial bank?
Maximum Insured Deposit for Single Account P500,000 P500,000 A. Accepting drafts and issuing letters of credit and receiving other types of deposits and deposit
Maximum Insured Deposit for Joint Account (A&B) 250,000 250,000 substitutes
Maximum Insured Deposit for Joint Account (A&C) 250,000 _______ 250,000 B. Discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt
C. Accepting or creating demand deposits and buying and selling foreign exchange and gold or silver
P1,000,000 P750,000 P250,000
bullion
D. Engaging in the businesses of preneed plans and insurance or reinsurance
BANK SECRECY LAW 7. Which of the following shall not be included in the computation of Single Borrower’s Limit?
A. association or any other entity, the liabilities of said entities to such bank.
2. Under R.A. 1405, which of the following is not covered by the Bank Secrecy Law? B. In the case of a corporation, all liabilities to such bank of all subsidiaries in which such corporation
A. Investment in bonds issued by the Government of the Philippines, its political subdivisions and its owns or controls a majority interest.
instrumentalities. C. In the case of a partnership, association or other entity, the liabilities of the members thereof to such
B. Investment in time deposit bank.
C. Investment in bonds issued by publicly traded corporations. D. Loans, credit accommodations and acceptances under letters of credit to the extent covered
D. Savings deposit and demand deposit by margin deposits.
FOREIGN CURRENCY DEPOSIT 8. It refers to a public and fully government-owned and controlled corporation organized with original capital
stock of P50 billion which has the powers to provide policy directions in the areas of money, banking, and
3. A nonresident alien has been convicted of crime of raping a minor. The RTC judge issued a writ of credit and to supervise the operations of banks, finance companies and non-bank financial institutions
garnishment for the satisfaction of civil damages caused to the victim. Is the issuance of writ of garnishment performing quasi-functions. It has the sole authority to issue currency to be considered legal tender within
a violation of Foreign Currency Deposit Act of the Philippines considering that a BSP circular provides that Philippine territory.
foreign currency deposits shall be exempted from attachment, garnishment, or any other order or process A. Bangko Sentral ng Pilipinas
of any court, legislative body, government agency or any administrative body whatsoever? B. Philippine Depositor Insurance Corporation
A. No, because if that foreign currency deposit will be exempted from garnishment, injustice would C. Landbank of the Philippines
result especially to a citizen aggrieved by a foreign guest. D. Development Bank of the Philippines
B. Yes, because foreign currency deposit is absolutely confidential in nature.
C. Yes, because RA 6426 was enacted in order to encourage foreign investment. 9. All of the following are the qualifications of members of Monetary Board, except
D. Yes, even RA 6426 failed to anticipate the inequitous effects producing outright injustice and inequality A. He must be a Natural born-citizens of the Philippines
to Filipinos. B. He must be of 35 years of age with the exception of BSP governor who must be 40 years of age.
C. He must be of good moral character, of unquestionable integrity, of known probity and patriotism and
UNCLAIMED BALANCES LAW with recognized competence in social and economic disciplines.
D. He must be a director or officer of a banking institution.
A. When an individual debtor possessed sufficient property to cover all his debts but he foresees
10. Unless otherwise changed by Monetary Board, what is the interval for examination of banking institution by the impossibility of meeting them when they respectively fall due.
supervising and examining department head of BSP? B. When an individual debtor possessed sufficient property but he can pay his obligations when they fall
A. Once every 12 months (annually) due.
B. Once every 3 months (quarterly) C. When the total assets of the individual debtor exceed his total liabilities.
C. Once every 6 months (semi-annually) D. When the capital of the individual debtor is more than the liabilities of the individual debtor.
D. Once every month (monthly)
17. What is the effect of issuance by the court of an order suspending any pending execution against individual
11. May the BSP Monetary Board order the closing of a bank with the hearing to follow despite the absence of debtor upon motion filed by an insolvent individual debtor?
prior hearing for closure? A. No creditor shall sue or institute proceedings to collect claim from the debtor from the time of
A. Yes, because close now hear later has already been justified as a measure for the protection of the filing of the petition for suspension of payments and for as long as proceedings remain
the public interest. pending.
B. No, because right to due process always requires prior hearing before closure. B. Those creditors having claims for personal labor, maintenance, expense of last illness and funeral of
C. No, because that is violative of right to property of the bank’s stockholders. the wife or children of the debtor incurred in the sixty (60) days immediately prior to the filing of the
D. Yes, even there is not justifiable or factual basis for the closure. petition shall not institute or sue proceedings to collect claim from the debtor.
C. Secured creditors shall not institute or sue proceedings to collect claim from the debtor.
FINANCIAL REHABILITATION INSOLVENCY LAW D. Properties held as security by secured creditors shall be the subject of such suspension order.

12. What is the maximum period of conservatorship of a bank or quasi-bank? 18. What is the duration of a court’s order suspending any pending execution against individual debtor upon
A. It shall not exceed 1 month. motion filed by an insolvent individual debtor?
B. It shall not exceed 1 year. A. The suspension order shall lapse when three months shall have passed without the proposed
C. It shall not exceed 6 months agreement being accepted by the creditors or as soon as such agreement is denied.
D. It shall not exceed 3 months. B. The suspension order shall lapse when twelve months shall have passed without the proposed
agreement being accepted by the creditors or as soon as such agreement is denied.
13. Who shall be appointed by BSP Monetary Board as receiver of a bank? C. The suspension order shall lapse when six months shall have passed without the proposed agreement
A. Philippine Deposit Insurance Corporation being accepted by the creditors or as soon as such agreement is denied.
B. Development Bank of the Philippines D. The suspension order shall lapse when the ten months shall have passed without the proposed
C. Landbank of the Philippines agreement being accepted by the creditors or as soon as such agreement is denied.
D. Philippine National Bank
19. What is the quorum required for the validity of meeting of creditors for the approval of insolvent individual
14. What is the ground for placing a bank under liquidation proceedings by BSP Monetary Board? debtor?
A. Whenever, on the basis of a report submitted by the appropriate supervising or examining department, A. The presence of creditors holding claims amounting to at least 3/5 of the liabilities shall be
the Monetary Board finds that a bank or a quasi-bank is in a state of continuing inability to maintain a necessary for holding of meeting.
condition of liquidity deemed adequate to protect the interest of depositors and creditors. B. The presence of creditors holding claims amounting to at least 1/4 of the liabilities shall be necessary
B. The bank has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities. for holding of meeting.
C. The bank cannot continue in business without involving probable losses to its depositors or creditors. C. The presence of creditors holding claims amounting to at least 2/3 of the liabilities shall be necessary
D. If the receiver determines that the institution cannot be rehabilitated or permitted to resume for holding of meeting.
business. D. The presence of creditors holding claims amounting to at least 3/4 of the liabilities shall be necessary
for holding of meeting.
15. May a bank be placed by BSP Monetary Board under receivership without undergoing conservatorship?
A. No, because it is violative of right to due process of bank’s shareholders. 20. What is the minimum claim by a creditor or group of creditors before they may file a petition for involuntary
B. Yes, because designation of a conservator is not a precondition to the designation of a receiver. liquidation of insolvent individual debtor?
C. No, because conservatorship proceedings is mandatory. A. Claims aggregating at least P500,000
D. Yes, but only if approved by at least majority of the bank’s Board of Directors and ratified by at least B. Claims aggregating at least P1,000,000
2/3 of the outstanding stockholders. C. Claims aggregating at least P100,000
D. Claims aggregating at least P1,500,000
16. What is the ground before an individual debtor may file a verified petition praying for declaration of state of
suspension of payments? 21. Which of the following is not considered an act of insolvency by an individual insolvent debtor?
A. That such person is about to depart or has departed from the Republic of the Philippines, with intent to A. The chairperson of AMLC is the BSP governor.
defraud his creditors. B. The Insurance Commissioner is a member of AMLC.
B. That being absent from the Republic of the Philippines, with intent to defraud his creditors, he remains C. The SEC Chairperson is a member of AMLC.
absent. D. The BIR Commissioner is a member of AMLC.
C. That he conceals himself to avoid the service of legal process for the purpose of hindering or delaying
the liquidation or of defrauding his creditors COOPERATIVE
D. That he has neither confessed nor offered to allow judgment in favor of any creditor or claimant
for the purpose of hindering or delaying the liquidation or of defrauding any creditor or 27. What is the maximum ownership of Foreigners in a cooperative in the Philippines?
claimant. A. None
B. 40%
22. Which of the following is considered an act of insolvency by an individual insolvent debtor? C. 60%
A. That for a period of three days, he has failed, after demand, to pay any moneys deposited with him or D. 100%
received by him in a fiduciary capacity.
B. That he has while in state of solvency, made an payment, gift, grant, sale, conveyance or transfer of INTELLECTUAL PROPERTY
his estate, property, rights or credit.
C. That being a merchant or tradesman, he has generally defaulted in the payment of his current 28. It refers to an intellectual property granted or issued by IPO which gives an exclusive right to an inventor of
obligations for a period of five days. a product, process or an improvement of a product or process which is new, inventive and useful to exclude
D. That he has made any assignment, gift, sale, conveyance or transfer of his estate, property, others from making, using, or selling the product of his invention during the life of the intangible asset.
rights or credits with intent to hinder or delay the liquidation or defraud his creditor. A. Copyright
B. Patent
23. It refers to a corporate rehabilitation proceedings initiated by the insolvent juridical person by filing it in court. C. Trademark
A. Voluntary court-supervised rehabilitation proceedings D. Tradename
B. Involuntary court-supervised rehabilitation proceedings
C. Informal rehabilitation proceedings 29. Newton and Einstein invented separately the technology for time machine. On January 1, 2018, Newton
D. Prenegotiated rehabilitation proceedings obtained patent for his technology in USA. On April 1, 2018, Einstein registered his right over the same
technology with IPO of Philippines. On May 1, 2018, Newton filed an application for patent for the same
24. What is the minimum claim of creditors or group of creditors in order to file a petition for involuntary court- technology with IPO of Philippines and such local application claims priority. On June 1, 2018, Newton
supervised rehabilitation proceedings of an insolvent corporation? submitted a certified copy of the foreign application together with an English translation with IPO of
A. Any creditor or group of creditors with a claim of. or the aggregate of whose claims is, at least Philippines. Who has better right over the patent?
P1,000,000 or at 25% of the subscribed capital stock, whichever is higher. A. Einstein because he has earlier local application filing date.
B. Any creditor or group of creditors with a claim of. or the aggregate of whose claims is, at least ten B. Newton because he has earlier priority date.
P10,000,000 or at least 50% of the subscribed capital stock, whichever is higher. C. None of them
C. Any creditor or group of creditors with a claim of. or the aggregate of whose claims is, at least One D. Government
billion pesos or at least 40% of the subscribed capital stock, whichever is higher.
D. Any creditor or group of creditors with a claim of. or the aggregate of whose claims is, at least One 30. What is the legal term of trademark or service mark?
hundred million pesos or at least 10% of the subscribed capital stock, whichever is higher. A. Life of the right holder plus 50 years after his death
B. 20 years
ANTI MONEY LAUNDERING COUNCIL C. 10 years but subject to unlimited renewal
D. Indefinite
25. Which of the following is a covered person, therefore, required to report to AMLC reportable or suspicious
transactions? 31. It refers to trademark infringement test that focuses on the similarity of the main, prevalent or essential
A. Educational institution features of the competing trademarks that might cause confusion.
B. Casinos A. Literal infringement test
C. Mining companies B. Doctrine of Equivalents Infringement test
D. Transportation companies C. Holistic test
D. Dominancy test
26. Anti-Money Laundering Council refers to the financial intelligence unit of the Republic of the Philippines
which is the government agency tasked to implement the AMLA. Which of the following statements regarding 32. As a general rule, what is the legal term of copyright?
the composition of AMLC is incorrect? A. Life of the author plus 50 years after his death
B. 20 years I. A resolution for the purchase of a delivery truck from E Trading, a sole proprietorship owned by E. B,
C. 10 years but subject to unlimited renewal C, D and E voted for the resolution
D. Indefinite II. A resolution appointing T as the new corporate secretary where B, C, D and E voted for the resolution.

CORPORATION CODE
Which is correct?
33. It shall mean any sale of a security which the seller does not own or any sale which is consummated by the
delivery of a security borrowed by, or for the account of the seller with the commitment of the seller or A. Both resolutions are valid and do not need shareholders’ approval
securities borrower to return or deliver said securities or their equivalent to the lender on a determined or B. Both resolutions are valid but need shareholders’ approval
determinable future date. C. Resolution I needs shareholders’ approval. Resolution II is valid
A. Short sale D. Resolution I is not valid. Resolution II needs shareholders’ approval
B. Long sale
C. Middle sale 39. This vacancy in the board of directors may be filled by the board of directors if the remaining directors still
D. Wide sale constitute a quorum.
A. Removal of a director
34. Who is prohibited from making a short sale in securities of the corporation? B. Death of a director
A. Creditor of the corporation C. Increase in the number of directors
B. Stockbroker of the corporation D. Expiration of the term of a director
C. Employees of the corporation
D. Director, officer or principal shareholder of a corporation 40. Which is supreme in the matter of management of the corporation?
A. President
35. It refers to the framework of rules, systems and processes in the corporation that governs the performance B. Chairman of the Board of Directors
by the Board of Directors and Management of their respective duties and responsibilities to the shareholders. C. Stockholders
A. By-Laws D. Board of Directors
B. Corporate Governance
C. Articles of Incorporation 41. Which of the following statements is correct?
D. Internal Control A. When a vacancy in the board arises, such vacancy maybe filled by the remaining directors provided
they still constitute a quorum
36. What is the required number of independent directors to corporations covered by Revised Code of Corporate B. The officers of a non-stock corporation maybe elected directly by the members instead of by
Governance? the board of trustees
A. Always two C. The number of trustees in a nonstock corporation maybe five but not more than fifteen
B. Always three D. A director individually and acting as such can bind the corporation because he is an agent of the
C. Always one corporation
D. Always four
42. Land Corporation is a nonstock, nonprofit corporation whose articles of incorporation provide for 9 trustees.
37. Which of the following is a ground for permanent disqualification of a director of a corporation covered by The trustees elected and their respective terms are: A, B and C for 3 years, D, E and F for 2 years, and G,
Revised Code of Corporate Governance? H and I for 1 year. After one year, J, K and L were elected to replace G, H and I whose term expired, while
A. Conviction by final judgment of an offense involving moral turpitude such as fraud, estafa, theft, M and N were elected to replace B and E, respectively who resigned after one year in office. What is the
forgery bribery or perjury term of office of L, M and N?
B. Absence in more than fifty percent of all regular and special meetings of the Board during his
incumbency, or any twelve month period during the said incumbency L M N
C. If the beneficial equity ownership of an independent director in the corporation or its subsidiaries and A. 3 years 3 years 3 years
affiliates exceeds two percent of its subscribed capital stock B. 3 years 2 years 1 year
D. Dismissal or termination for cause as director of any corporation covered by this Code
C. 1 year 2 years 1 year
38. The articles of incorporation of ABC Corporation provide for 7 directors. In the monthly meeting of the board D. 2 years 2 years 2 years
of directors held on April 8, 2009, directors B, C, D and E were present and the following resolutions were
approved: 43. A, B, C, D and E formed Super Corporation and submitted their Articles of Incorporation to the SEC.
Inadvertently, through an oversight; the SEC approved the Articles and issued a certificate of incorporation.
Thereafter, it was discovered that they have not completed their required period of residency in the 47. M delivers a negotiable promissory note payable to P or order. Later, P makes a special indorsement to A
Philippines. As a result, which of the following is not correct? and A delivers the note to B. Who is the holder?
A. The corporation shall be considered as a de-facto corporation and shall be allowed to function as a
corporation under the color of law A. B, because he is in possession of the note
B. The right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which B. A, because he is the indorsee
the corporation maybe a party C. P, because he is the payee
C. The Solicitor General has the right to question or contest the validity of its corporate existence through D. No one can be considered as holder
a quo-warranto proceedings
D. In a suit filed against the corporation for breach of contract, the plaintiff can allege that the 48. A owes B P10,000 as gambling debt and A issued a promissory note to B to cover the debt, as follows:
corporation has no legal personality and therefore all incorporators shall be held personally “I promise to pay B or order P10,000. Sgd. A”
liable for damages
Which of the following statements is correct?
44. A law was passed disqualifying former members of Congress from sitting in the Board of Directors of
government owned or controlled corporations. Because of this, the Board of Directors of ABC Corp, a
A. B can collect from A because the note is negotiable
government owned and controlled corporation, disqualified C, a former Congressman, from continuing to sit
B. B cannot negotiate the note because the consideration between A and B is illegal
as one of its members. C objected, however, insisting that under the Corporation Code, members of the
C. If B negotiates to C, a holder in due course, C can collect from A
board of directors of corporations may only be removed by vote of shareholders’ holding 2/3 of its
D. A is not liable because of illegal consideration
outstanding capital stock in a regular or special meeting called for that purpose. Is C correct?
A. Yes, since the new law cannot be applied to members of the board of directors already elected prior to its
49. A made a negotiable promissory note payable to the order of B. Later, B made a blank indorsement to C
passage
and C delivered the note to D, who likewise delivered the note to E. E made a special indorsement to F and
B. No, since the disqualification takes effect by operation of law and it is sufficient that C was
F made a qualified indorsement to G. Which of the following is correct?
declared no longer a member of the board
A. The indorsement made by E is not necessary because the instrument was converted to bearer, hence
C. Yes, since the provisions of the Corporation Code apply as well to government owned and controlled
the indorsement made by F can be stricken out
corporations
B. C and D are not liable because they negotiated the instrument by delivery
D. No, since the board has the power to oust C even without the new law.
C. If the instrument is dishonored by A, the present holder G cannot go after C and D
D. B’s indorsement can be stricken out because B’s blank indorsement converted the instrument to bearer
NEGOTIABLE INSTRUMENT 50. A promissory note reads:
“ I promise to pay B or bearer P20,000. Sgd. A.”
45. A is maker and B is payee of a negotiable promissory note payable to order. There is no valuable
consideration for the note. B delivers the instrument to C, without indorsement, under circumstances that B delivered the note to C. C indorsed the note to D. Then Y stole the note from D and indorsed the note to
otherwise would have made C a holder in due course such as, that C did not know of the absence of
E. E delivered the note to F. As a result
consideration. May C recover from A?
A. Yes, because A’s personal defense cannot be used against C
B. Yes, because the promissory note is negotiable A. If A pays F in good faith, A’s obligation is extinguished
C. No, because A has a real defense which can be used even against a holder in due course B. F can collect from D or E
D. No, because C acquires only B’s rights and A can set up against B the defense of absence of C. F cannot be a holder in due course
consideration D. F can go after indorsers C and Y

46. A issued a check dated April 2, 2017, in favor of B in payment of A’s obligation to B amounting to P100,000. 51. A promissory note reads:
B kept the check in his drawer and failed to encash it due to his busy schedule. On February 16, 2018, B “I promise to pay B or order P20,000. Sgd. A”
presented the check to the drawee bank for payment. The bank refused to pay the check for failure of B to
present the check within the reasonable time after its issue. In this case B made a special indorsement to C and C made a conditional indorsement to D. If the condition is not yet
A. A’s obligation to B is extinguished because the impairment of the check is due to B’s fault fulfilled, which of the following is correct?
B. B can sue the bank because as drawee it is the party primarily liable
C. A’s obligation to B is not extinguished because the failure of B to present the check for payment A. If A dishonors the note, D can collect from B or C
within a reasonable time did not cause any injury to A B. If A pays D, A’s obligation is extinguished
D. When B accepted the check when A tendered payment, A’s obligation is extinguished C. If A pays, A becomes liable if D fails to fulfill the condition
D. If A dishonors the note D can collect from B but not from C
57. A and B entered into a universal partnership of all present property. No stipulation was made regarding future
property. After the perfection of the contract, A inherited a parcel of land and B acquired a car as
52. Which of the following instruments is negotiable? remuneration for services rendered. The properties acquired after the perfection of the contract belong to
whom?
A. “Pay to the order of A or B the sum of P100,000.” Sgd. C and D Land Car
B. “I promise to pay to the order of A or B the sum of P100,000”. Sgd. C and D A. A B
C. “Pay to B or order the sum of P100,000 30 days after sight”. Sgd. A B. A Partnership
D. “We promise to pay A and B the sum of P100,000”. Sgd. C and D C. Partnership B
D. Partnership Partnership
53. A bill of exchange states on its face: “One month after sight, pay to the order of Mr. R, the amount of Php
50,000 chargeable to the account of Mr. S Signed, Mr. T”. Mr. S, the drawee, accepted the bill upon
presentment by writing on it the words “I shall pay Php 30,000 three months after sight.” May he accept 58. On April 1, 2018, A and B entered into a contract of partnership for the purpose of selling cows’ milk, with
under such terms, which varies the command in the bill of exchange? the former as capitalist partner and the latter as industrial partner. It was agreed that A shall contribute 1,000
A. Yes, since a drawee accepts according to the tenor of his acceptance cows to the common fund on May 2, 2018. Upon the arrival of the designated date, A failed to deliver the
B. No, since, once he accepts, a drawee is liable according to the tenor of the bill contribution he promised. As a result
C. Yes, provided the drawer and payee agree to the acceptance A. B should make a demand upon A for the delivery of his contribution and its fruits to render A in default
D. No, since he is bound as drawee to accept the bill according to its tenor B. The contract of partnership becomes void because A failed to give his contribution to the common fund
C. B can compel A to deliver his contribution and its fruits without the necessity of demand
54. X, a drawee of a bill of exchange, wrote the words: “Accepted, with promise to make payment within two D. The contract of partnership was never perfected because there was no delivery of contributions by the
days. Signed X.” The drawer questioned the acceptance as invalid. Is the acceptance valid? partners
A. Yes, because the acceptance is in reality a clear assent to the order of the drawer to pay
B. Yes, because the form of the acceptance is really immaterial 59. In case a managing partner collects a demandable debt from his debtor who also owes the partnership a
C. No, because the acceptance must be clear assent to the order of the drawer to pay demandable debt, which of the following is not correct if payment is not enough to cover the two debts?
D. No, because the document must not express that the drawee will perform his promise within two days A. The sum collected shall be applied to the partnership credit
B. The sum shall be applied to the two credits in proportion to their amounts
PARTNERSHIP C. The debtor has the right to have the payment applied to his debt to the partner if it should be onerous
to him
55. A and B are co-owners of a parcel of land from where they share the profits equally as co-heirs in inheritance. D. The partner cannot apply the payment to his own credit
Is there a partnership?
A. There is a prima facie presumption of partnership because of the equal sharing of profits SALES
B. There is no partnership because co-ownership by itself does not establish a partnership despite
the sharing of profits 60. A bought a residential house and lot from B Realty for P2,000,000 giving a down payment of P200,000 and
Down payment P200,000 promising to pay the balance of P1,000,000 in 15 years in monthly installments of P10,000. After paying 72
Add: Installments paid 720,000 installments A defaulted in the payment of subsequent installments. Despite the grace period given, A was
Total payments made P920,000 not able to make any further payments. Accordingly, B Realty cancelled the sale. How much cash surrender
Multiply by cash surrender value percentage ___55% value is A entitled to receive?
Cash surrender value P506,000 A. P552,000
B. P396,000
C. There is no partnership since in partnership, division of profits is not always necessary among partners C. P462,000
D. There is prima facie presumption of partnership they being co-owners and co-possessors D. P506,000
Maceda Law applies to sale of residential real property in installment. The said law provides that if the buyer has
56. A and B are partners in AB partnership. While A was performing his duties as a partner in the course of paid 2-5 years of installments and the contract is canceled, the buyer shall have the right to that cash surrender
business, he negligently caused damage to X, a third person. Who shall be liable to X and up to what extent? value of the payments on the property equivalent to fifty percent of the total payments made, and after five years
of installments, an additional five percent every year but not to exceed ninety percent of the total payments made.
A. Only the partnership shall be liable it being a juridical person separate and distinct from the partners In this problem, the buyer has already paid 72 months of installments equivalent to 6 years. Therefore, the buyer
B. Only A shall be liable for he is the only one at fault is entitled to 55% cash surrender value.
C. Both A and B shall be liable solidarily to X
D. A, B, and the Partnership are all liable solidarily to X
61. A orally offered to sell his rice land to B for P8,000,000. B orally accepted the offer. The land is to be delivered B. Yes, if there is stipulation
through the execution of a notarized Deed of Sale and the price is to be paid directly two weeks from their C. No, even if there is stipulation
oral agreement. Which of the following is most accurate? D. No, unless there is stipulation
A. If A refuses to deliver the land on the agreed date despite payment made by B, the latter may not
successfully sue A because the contract is unenforceable 67. H, an Olympic judo champion, with violence and intimidation forced his wife W to sell W’s pieces of jewelry
B. If A refused to deliver the land, B may successfully sue A for the fulfillment of the obligation before the to B. What is the treatment of the sale?
payment of the purchase price A. Valid and binding
C. The contract between A and B is rescissible B. Voidable, because the consent of W is vitiated
D. The contract between A and B is subject to ratification by the parties. C. Rescissible, if W suffered lesion of at least one-fourth of the value of the property
D. Void, except when a separation of property was agreed upon in the marriage settlement or there has
62. If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely been a judicial separation of property
lost, which of the following most accurately completes the statement?
A. The buyer bears the risk of loss 68. F made a telephone call to his son S, for S to sell F’s land. In the deed of absolute sale which was
B. The seller bears the risk of loss acknowledged before a notary public, S signed as agent of F. Later, in the presence of two witnesses, F
C. The contract shall be without any effect ratified the sale executed by S. Which is correct?
D. The buyer may withdraw from the contract A. The sale was void at the start but was validated upon the ratification by F
B. The sale remained void despite the ratification by F
63. Spouses H and W are under the regime of absolute community of property. H, through violence and C. The sale was valid from the start since it was made in a public instrument and F, the owner ratified the
intimidation obtained the signature of W to a contract of sale involving W’s exclusive property in favor of B. sale
The fair market value of the property is P1,000,000 but the selling price is only P700,000. What is the D. The sale was merely unenforceable at the start but the ratification validated the contract
treatment of the sale?
A. Rescissible 69. It is a sum of money paid, or a thing delivered upon the making of a contract for the sale of goods to bind
B. Voidable the offer, the delivery and acceptance of which makes the final assent of both parties to the contract.
C. Valid A. Option money
D. Void B. Arras
C. Discount
64. A, B and C are co-owners of a parcel of land. A sold his 1/3 share on April 7, 2018, B his 1/3 share on April D. Deposit
15, 2018 and C his 1/3 share on April 23, 2018, all to D and with the right of repurchase. Which of the 70. An agricultural land is owned by A and D pro-indiviso. D sells his one-half part to R, who is the owner of the
following is correct? adjoining land. When A learned of the sale, he tried to redeem the portion sold by D by reimbursing R with
A. A should redeem the whole property if he is required by D to do so the purchase price and expenses. Which is not correct?
B. A can redeem the entire property even if D allows him to redeem only his 1/3 share A. A can compel R to permit redemption
C. A can redeem his 1/3 share even if D requires him to redeem the whole property B. A co-owner of a thing may exercise the right of redemption in case the shares of the other co-owners
D. A may redeem his 1/3 share only if D allows him to do so or any one of them are sold to a third person
C. The sale to R is valid but A can elect to exercise his right of redemption
65. A sells to B a Sony Colored TV for P12,000 payable in twelve equal monthly installments beginning May 5, D. The sale to R is valid and as adjoining land owner he is the one entitled to redemption
2018 and every 5th day of each month thereafter. The contract provides that upon failure to pay any
installment due, the whole balance becomes due and demandable. To secure the obligation, a chattel
mortgage over the TV set was executed. When B defaulted on the 7th and 8th installments, A sued B for the CREDIT TRANSACTION
payment of the whole balance of P6,000. The TV set was levied and subsequently sold at a public sale for
P5,000. Can A still recover the deficiency of P1,000 from B? 71. A contract where the creditor acquires the right to receive the fruits of an immovable of his debtor, with the
A. Yes, if there was stipulation to that effect obligation to apply them to the payment of interest if owing, and thereafter to the principal of his credit is
B. Yes, even though there was no stipulation A. Antichresis
C. No, any stipulation allowing recovery is void B. Usufruct
D. No, if there was no stipulation to that effect C. Real estate mortgage
D. Commodatum
66. S sold his car to B on installments and a chattel mortgage was constituted on the car. B defaulted in two
installment payments. S foreclosed the chattel mortgage and sold the car at a public auction. If there is 72. A pledged his ring to B for P20,000. A failed to pay his obligation. B sold it at a public auction for P18,000.
deficiency, can S recover the deficiency? Can B recover the deficiency?
A. Yes, even without stipulation A. Yes, even without stipulation
B. Yes, if there is stipulation
C. No, even if there is stipulation 79. Which of the following is a feature common to chattel mortgage and pledge?
D. No, unless there is stipulation A. Deficiency is recoverable in case of sale of the thing pledged/mortgaged
B. The object of the contract is a movable property
73. A pledged his ring to B for P20,000. A failed to pay his obligation. B sold it at a public auction for P22,000. C. The excess of the proceeds of sale over the amount of the obligation belongs to the pledgor/mortgagor
Can A recover the excess? D. An affidavit of good faith is required to bind third persons
A. Yes, even without stipulation
B. Yes, if there is stipulation 80. Essential elements of pledge include all of the following, except
C. No, even if there is stipulation A. Pledgor is the absolute owner of the thing pledged.
D. No, if there is stipulation B. The person constituting the pledge has the free disposal of his property or if he is an agent or
representative, that he is legally authorized
74. C mortgaged his car to B for P200,000. C failed to pay his obligation. B sold it at a public auction for C. The thing pledged must be placed in the possession of the creditor or of a 3rd person by common
P180,000. Can B recover the deficiency? agreement
A. Yes, even without stipulation D. To bind third persons there must be an affidavit of good faith
B. Yes, only if there is stipulation
C. No, even if there is stipulation 81. Essential elements of chattel mortgage include all of the following, except
D. No, unless there is stipulation A. The object is a personal or movable property
B. The thing mortgaged is not delivered to the creditor
75. C mortgaged his car to B for P200,000. C failed to pay his obligation. B sold it at a public auction for C. The mortgagor can not sell without the consent of the mortgagee
P220,000, Can C recover the excess? D. Description of the thing mortgaged must appear in a public instrument
A. Yes, even without stipulation
B. Yes, only if there is stipulation 82. Essential elements of real estate mortgage include all of he following, except
C. No, even if there is stipulation A. In case of foreclosure sale, the mortgagor is entitled to the excess
D. No, unless there is stipulation B. The mortgagor can sell even without the consent of the mortgagee
C. The thing mortgaged must be delivered to the creditor
76. B borrowed P100,000 from S secured by a pledge on B’s diamond ring. The debt is payable in installment. D. To bind third persons it must be recorded in the Registry of Property
When B defaulted in 2 installment payments, S foreclosed the pledge and sold the diamond ring at a public
auction. If there is excess, who is entitled to the excess? 83. Which of the following statements is not correct?
A. B, even without stipulation A. If the thing pledged is returned by the pledgee to the pledgor, the obligation is extinguished
B. S, only if there is stipulation B. In sale at public auction, the pledgor may bid and his bid is valid even if he is the only bidder
C. B unless there is stipulation C. Any stipulation authorizing the pledgee to appropriate the thing pledged is void and without effect
D. S, even without stipulation D. Shares of stock can be the object of pledge or mortgage

77. The sale of the thing pledged


A. Absolutely extinguishes the obligation
B. Extinguishes only the pledge
C. Extinguishes the debt only to the extent of the proceeds
D. Deprives the pledgee to get the excess OBLIGATION AND CONTRACT

78. D borrowed P100,000 from C. The obligation is secured by a mortgage on D’s land and building. C registered 84. A was having his house repaired by B, who needed construction materials, so A orally told the seller C, “Give
the mortgage with the Register of Deeds. Thereafter, D sold the land and building to B who was not aware B the materials, I shall be responsible. I shall pay in 30 days”. C delivered the materials. As a result,
of the existence of the mortgage at the time of sale since only the photocopy of the transfer certificate of title A. The contract is unenforceable because A made an oral agreement to answer for the debt of B
which did not yet contain the annotation of the mortgage was shown to him. It was only when he went to the B. The contract is enforceable because A did not make a special promise to answer for the default
Register of Deeds to register the sale of the land and building to him that he learned of the mortgage. Which of another person
is correct? C. The contract shall be enforceable if there is ratification by A
A. C can collect from D and if D cannot pay, C can foreclose the mortgage D. The contract shall be unenforceable if the value is at least P500.00
B. C can collect from D, but f D cannot pay, C cannot foreclose the mortgage
C. C cannot collect from D. He can only go after the mortgage which was given as security
85. Which of the following statements is not correct?
D. C cannot foreclose the mortgage because B is a buyer in good faith
A. A solidary creditor can assign his right even without the consent of the other creditors
B. Remission of the debt by any of the solidary creditors shall extinguish the obligation B. No, because the promissory note was signed only because there was intimidation
C. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept C. Yes, provided B will agree
D. The debtor may pay any of the solidary creditors but if any demand has been made by one of them, D. No, because A’s obligation does not exist
payment should be made to him
90. A has two creditors, B and C. the obligation to B is P10,000 and to C is P12,000. Later, with the consent of
86. Which of the following statements is correct? A and B, W pays B P10,000. Now W and C are the creditors of A. Suppose A has only P12,000, which is
A. The effect of a conditional obligation to give, once the condition has been fulfilled, shall retroact correct?
to the day of the constitution of the obligation A. C should be preferred
B. If the obligation is unilateral, the fruits and interest during the pendency of the condition shall be B. W should be preferred
deemed to have been mutually compensated C. C and W should be paid proportionately
C. If the obligation imposes reciprocal prestations upon the parties, the debtor shall appropriate the fruits D. A may choose whom to pay
and interests received, unless from the nature and circumstances of the obligation it should be inferred
that the intention was different 91. A, minor, sold the ring of his brother without authority for P600,000. The ring has a fair market value of
D. In an obligation to do and not to do, the parties shall determine, in each case the retroactive effect of P1,000,000. The contract is
the condition that has been complied with A. Rescissible
B. Voidable
87. A, B and C are solidary debtors sharing at 1:2:3 of solidary creditors W and Y sharing at 1:2. The obligation C. Unenforceable
is P12,000. If B is a minor and C is insolvent and W condones the obligation of A without the consent of Y, D. Void
how much can W collect from A?
A. P8,000 92. X, Y and Z are W’s sons. Upon the death of W, the three sons found a last will and testament in the cabinet
B. P6,000 of W. The will showed disposition of a 30-hectare land, the only asset of W at the time of his death in favor
C. P2,000 of the following: X – 5 hectares, Y – 10 hectares and Z – 15 hectares. X felt discriminated with his share of
D. P0 only 5 hectares. Which is correct?
A. Reformation of the instrument in order to correct the disparity in the disposal of the property
Mixed Solidary Debt P12,000 B. Annulment of the instrument is the proper remedy to correct the mistake
Less: Share of B, a minor in solidary debt, real defense (P12,000 x 2/6) ( 4,000) C. Rescission is the proper remedy to correct the damage on the part of X
Less: Share of A which is condoned by solidary creditor (P12,000 x 1/6) ( 2,000) D. The law does not allow any remedy in this case
Amount that W can collect from A P6,000
93. A obtained an interest free loan of P50,000 from B evidenced by a promissory note payable six months after
Even though the obligation is solidary, the share of the minor debtor may still be setup as a defense because it is date. At maturity, A called B by phone to ask for an extension of one month and offer to pay 20% interest on
the loan. Enticed by the 20% interest, B agreed to the extension of maturity. Which is correct?
a real defense but only in so far as the share of the minor is concerned.
A. The interest is a demandable interest by virtue of an agreement
B. The interest is unenforceable
88. A, B and C are solidary debtors of W and Y, joint creditors for P12,000 where the share of the debtors in the C. The loan is valid but the interest is void
obligation is 2:3:5 while the share of the creditors is 1:2. If A is insolvent, which of the following is correct? D. The loan and interest are both demandable
A. W can collect from B P3,200
B. Y can collect from C P6,400 94. A, husband and B, wife are legally separated. By order of the court, which decreed the legal separation, A
C. W or Y can collect from B and C P12,000 is obliged to give a monthly support of P50,000 to B payable in advance within the first five days of the
D. Y can collect from either B or C P8,000 month. B owes A P50,000 by way of loan. On the other hand, A has not yet given B support of P50,000 for
Computation Share of joint creditor Y from the obligation (P12,000 x 2/3) the preceding month and another P50,000 of the present month. All the debts are already due. Based on
the foregoing, which of the following statements is incorrect?
Since the obligation is joint only on the part of creditor, Y can only proportionately collect his share of 2/3 out of A. If B demands her support for the preceding month, A may set up compensation as regards the loan
P12,000 or P8,000 from either B and C, the solidary debtors who are not insolvent. Since the obligation is solidary that B owes him
on the party of debtor, B and C will absorb the insolvency of A. B. If B demands her support for the current month, A may claim compensation as regards the loan
that B owes him
89. A pointed a gun and threatened to kill B if B will not sign a promissory note which reads “I promise to pay A, C. If A demands payment of the loan, B may set up compensation as regards her support for the
P100,000”. Out of fear, B signed the note. It turned out that two days earlier, A’s obligation to B amounting preceding month that A owes her
to P100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct? D. If A demands payment of the loan, B may set up compensation as regards her support for the current
A. Yes, because the promissory note is valid month that A owes her
95. On January 1, 2018, A bought a parcel of land from B who was insane. The deed of sale was duly
acknowledged before a notary public. Six months after the sale, A realized that he needed a larger area on
which to construct a commercial building. At about the same time, B who had been undergoing psychiatric
treatment was declared of sound mind by his neurologist. Which is correct should a court action be filed
today?
A. A may successfully prosecute a court action to annul the contract on the ground of B’s insanity
B. B may successfully prosecute a court action to annul the contract on the ground of his insanity
C. Neither A nor B may successfully prosecute a court action to annul the contract
D. A may successfully prosecute a court action to annul the contract on the ground of mistake as to the
area of the parcel of land

96. A delivered to B the following instrument: In payment of a gambling debt, A made a promissory note which
reads: “I promise to pay B P10,000 Sgd. A.” B indorsed the note in blank before maturity and delivered it to
C for value. When due, A refused to pay and C sued B. Could C recover from B?
A. No, C could not sue B because B did not write the name of C as indorsee
B. No, the instrument is not negotiable and B is a mere assignor of credit
C. Yes, provided C gives notice of dishonor to B otherwise B is discharged from liability
D. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor
of the instrument

97. In payment of merchandise purchased by A from B, A made a promissory note which reads “I promise to
pay B P10,000. Sgd. A”. B indorsed the note in blank before maturity and delivered to C for value. A failed
to pay due to insolvency upon maturity. Could C collect from B?
A. No, C could not sue B because B did not write the name of C as indorsee
B. No, the instrument is not negotiable and B is a mere assignor of credit
C. Yes, provided C gives notice of dishonor to B otherwise B is discharged from liability
D. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor of
credit

98. A promised to give B P1,000 if B will hear mass for ten consecutive Sundays. This is a
A. Civil obligation
B. Natural obligation
C. Moral obligation
D. Religious obligation

99. Which of the following is a valid stipulation?


A. A promises to give B P10,000, and if A fails, A will allow B to have sexual intercourse with her
B. A will give B P10,000, if B will kill C
C. A agreed to give B a house and lot if B will be his mistress
D. A agreed to put poison on the food of B’s wife and if A fails, to pay B P10,000 for damages

100. A, B and C are solidarily indebted to D for P9,000 representing the purchase price of 1gram of shabu but
A’s consent has been obtained by violence and intimidation, and B is a minor. How much can D collect from
C?
A. P9,000
B. P6,000
C. P3,000
D. P0