Business Law (1)

1. A obtained a loan from B payable within a year. As security for its payment, A mortgages his
uninsured house. Three months after the loan was given, A’s house was gutted by an accidental
fire. Thereupon, B demanded payment immediately from A, who refused to pay contending that
the loan was for a one-year period. Is As contention valid?
a. As contention is valid because the contract of loan is explicit that payment is within one year
and the creditor can only demand payment at the end of the year.
b. As contention is not valid because payment is within a year and therefore the creditor B has
the benefit of the period.
c. As contention is not valid because the security has been lost and therefore the obligation is
demandable at once.
d. Not valid because the creditor B as a rule has the benefit of the period in an obligation.

2. The right of a corporation to exist as juridical person during its term as stated in the articles of
incorporation despite the death of any of its stockholders is:
a. Right of existence
b. Right of first refusal
c. Pre-emptive right
d. Right of Succession

3. A bought a parcel of land from B on installment. When the first installment fell due, A did not
pay. His defense was that he did not have available money, And he therefore pleaded
impossibility of performance.
a. A obligation is extinguished because A has no available money.
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 contract.
d. A is liable because the obligation is to pay specific money.

4. It presupposes not only that the obligor is able, ready and willing but more so, in the act of
performing his obligation.
a. Promissory note
b. Tender of payment
c. Bill of exchange
d. Obligation to sell

5. Special power of attorney is necessary in the following cases, except:

a. To make such payments usually considered as acts of administration;
b. To compromise, to submit questions to arbitration;
c. To bind a principal in a contract of partnership;
d. Any other act of strict dominion.

6. A sold to B his only car with a fair market value of P500,000 for only P370,000. The status of
the contract of sale is:
a. voidable, because mistake or fraud are presumed.
b. rescissible because the vendor suffers a lesion of more than one fourth of the value of the
thing sold.
c. valid because lesion or inadequacy of cause as a rule does not invalidate contract, unless
there is vices of consent.
d. void ab initio because the price are considered simulated.

7. When a private corporation is created by special law, such corporation is

a. de facto corporation
b. corporation by estoppel
c. non existing corporation
d. de jure corporation

8. A penalty cannot be enforced under the following except:

a. when the principal obligation is void.
b. when the non-performance of the debtor is due to a fortuitous event.
c. when there is a breach of obligation
d. when the agreed penalty is contrary to moral.
9. When a corporation is used to defeat public convenience, justify wrong, protect fraud, or
defend crime or made as a shield to confuse the legitimate issues or where a corporation is a
mere alter ego or business conduct of a person, this doctrine applies
a. Doctrine of business opportunity
b. Trust fund doctrine
c. De jure doctrine
d. Doctrine of piercing the veil of corporate fiction

10. A juridical relation relating from a lawful, voluntary and unilateral act and which has for its
purpose the payment of indemnity to the end that no one shall be unjustly enriched or benefited
at the expense of another
a. Contract
b. Quasi-contract
c. Delict
d. Quasi-delict

11. A promissory note which does not have the words “or order” or “or bearer” will render the
promissory note non-negotiable, and therefore
a. the note can still be assigned and the maker made liable
b. the holder can become holder in due course
c. it will render the maker not liable
d. the promissory note can just be delivered and the maker will still be liable.

12. The following are real contract except?

a. contract of pledge
b. contract of deposit
c. contract of commodatum
d. donation of real property

13. The following are the legal effects of merger or consolidation. Except one
a. All actions pending by or against the constituents corporations shall now be litigated by the
consolidated corporations.
b. The consolidated corporation shall enjoy the same rights, powers, privileges and immunities
and shall be subject to the same duties and obligations of corporations established under the
Corporation Law.
c. All properties, interest, claims and the like pertaining to the constituents corporations shall
now pertain to the surviving corporation.
d. The liabilities and obligations or claims against the constituents corporations may not be
assumed by the consolidated corporations because of the theory of separate legal entity.

14. It is a type of rehabilitation wherein the insolvent debtor and its creditors already negotiated
and prepared the rehabilitation plan before they file a verified petition to the court for the
approval of such plan.
a. Voluntary court-supervised rehabilitation
b. Involuntary court-supervised rehabilitation
c. Out-of court or informal rehabilitation
d. Pre-negotiation rehabilitation

15. A, B, C and D are solidary debtors of X in the amount of P800,000. X then made a demand
from A but collected only P600,000 because he (X) was remitting As share (P200,000). How
much can A recover from B, C and D?
a. P200,000 each from B, C and D
b. P150,000 each from B, C and D
c. P266,667 each from B, C and D
d. Answer not given

16. D owes C P1,000,000 C tells D that he is willing to forego collection if the latter will just give
him his tape recorder. D consents and gives C the tape recorder. Ds obligation is extinguished
by
a. payment
b. condonation
c. confusion
d. compensation

17. Refer to number 16, this is payment in kind:

a. consignation
b. payment by cession
c. dation in payment
d. application for payment

18. A contract granting a privilege to a person, for which he has paid a consideration, which
gives him the right to buy certain merchandise or specified property, from another person, at
anytime within the agreed period, at a fixed price. What contract is being referred to?
a. Option Contract
b. Contract to Sell
c. Contract of sale
d. Lease

19. The following are the rules in case a managing partner collects a demandable debt from a
person who also owes the partnership a demand debt, except
a. The sum collected shall be applied to the partnership credit
b. It shall be applied to the two credits in proportion to their amounts
c. The sum shall be fully applied to the partnership credit, if the receipt given is for the account
of the partnership
d. The debtor has the right to have the payment applied in his debt to the partner if it should be
more onerous to him

20. A, a minor, B and C wrote and signed a promissory note which states I promise to pay D
P30,000.At the maturity date of the note, how much may D validly collect from C if B becomes
insolvent?
a. 10,000
b. 20,000
c. 30,000
d. 15,000
Business Law (2)

1. Without authority from P, A sold Ps car in Ps name. Contract is:

a. Void
b. Voidable
c. Valid
d. Unenforceable

2. A corporation formed and organized for charity

a. eleemosynary corporation
b. ecclesiastical corporation
c. lay corporation
d. corporation sole

3. Dividends which do not decrease the capital of the corporation.

a. liquidating dividend
b. stock dividend
c. cash dividend
d. property dividend

4. The person in whose favour the obligation is constituted

a. Obligor
b. Obligee
c. Passive subject
d. Debtor

5. Noli agreed in writing to give all his CPA review materials to Noni if he passes the May 2019
CPA Board Examinations. In the May 2019 CPA Board Exam, Noli took the examination on the
first Sunday, but he did not report anymore in the succeeding examinations. Can Noni compel
Noli to give his CPA review materials to him?
a. No. because the condition was not fulfilled.
b. No. because the condition in this case will never happen
c. Yes, because the condition in this case shall be deemed fulfilled.
d. Yes, because their agreement is in writing and it is valid and enforceable.

6. Santos sold his Toyota pick-up to Razon. No date was fixed for the performance of the
obligation by the seller and the buyer. The obligation of the seller is:
a. To rescind the sale because there is not time fixed for the performance of the seller and the
buyer.
b. To deliver the pick-up only after the buyer writes the seller demanding the delivery of the pick-
up.
c. To deliver the pick-up after the buyer pays the price.
d. To deliver the pick-up immediately because the sale is already perfected contract.

7. Which phrase best completes the statement. When a debt is secured by a real estate
mortgage, upon default of the debtor
a. the only remedy of the creditor is to foreclose the real estate mortgage
b. another remedy is filing an action for collection and then foreclose if collection is not enough
c. the creditor can foreclose then mortgage the demand collection for any deficiency
d. none of the choices are correct

8. A commissioned B to paint his garden. Who owns the painting and the copyright on the
painting, respectively?
a. Both A
b. Both B
c. A and B, respectively
d. B and A, respectively

9. An insolvent individual debtor made a proposal in his petition for the settlement of his
obligations the payment of which is suspended by the suspension order issued by the Regional
Trial Court. What is the required vote by the creditors affected for the approval of such proposal
of insolvent individual debtor?
a. 4/5 of the creditors voting to unite upon the same proposition and the claims represented by
said majority vote amount to at least 3/5 of the total liabilities mentioned in the petition.
b. 3/5 of the creditors voting to unite upon the same proposition and the claims represented by
said 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 majority vote amount to at least 4/5 of the total liabilities mentioned in the petition.
d. 2/3 of the creditors voting to unite upon the same proposition and the claims represented by
said majority vote amount to at least 3/5 of the total liabilities mentioned in the petition.

10. Who is primarily liable to the notes and coins which are considered legal tender in the
Philippine jurisdiction?
a. BSP
b. Government of Republic of Philippines
c. Landbank of the Philippines
d. DBP

11. If both principal and agent sold the land of the principal to two buyers, which of the latter
shall be owner.:
a. First registrant in good faith.
b. First possessor in good faith.
c. Oldest title in good faith.
d. Prior date contract.

12. A pledged his watch to B for P20,000. A failed to pay his obligation. B sold it at public
auction for P18,000. Can B recover the deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, only if there is stipulation

13. The following are considered elements of the contracts of pledge and mortgage. Which is
the exception?
a. The pledgor or mortgagor must have the free disposal of the thing pledged or mortgaged
b. The pledgor or mortgagor must be the absolute owner of the thing pledged or mortgaged
c. Both are accessory contracts
d. The thing maybe appropriated if the debtor cannot pay

14. An employee of a large manufacturing firms earns a salary which is just a bit more than
what he needs for a comfortable living. He is able to still maintain a P10,000 savings account, a
P20,000 checking account, a P30,000 money market placement, and a P40,000 trust fund in a
medium-sized commercial bank. Which of the four accounts are deemed insured by the PDIC.
a. The P10,000 savings account and the P20,000 checking account.
b. The P30,000 money market placement and the P40,000 trust fund.
c. The P10,000 savings account and the P30,000 money market placement.
d. The P20,000 checking account and the P40,000 trust fund.

15. Roger binds himself to deliver to Rona a specific laptop. This is

a. an alternative obligation
b. a facultative obligation
c. both answers are correct
d. none of the answers are correct