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2019 RFBT 02 70mcq

This document contains 26 multiple choice questions testing knowledge of various areas of law including obligations and contracts, agency, partnership, and corporations. The questions cover topics such as grounds for extinguishing obligations, conditional and unconditional obligations, delivery requirements for sales, characteristics of pledge and mortgage, agency creation and termination, partnership liability, and incorporation requirements.
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0% found this document useful (0 votes)
108 views24 pages

2019 RFBT 02 70mcq

This document contains 26 multiple choice questions testing knowledge of various areas of law including obligations and contracts, agency, partnership, and corporations. The questions cover topics such as grounds for extinguishing obligations, conditional and unconditional obligations, delivery requirements for sales, characteristics of pledge and mortgage, agency creation and termination, partnership liability, and incorporation requirements.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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RFBT

1. This is not a ground for the extinguishments of an obligation


a. Confusion
b. death of the debtor
c. remission
d. compensation

2. Which of these is not a conditional obligation?


a. Benjie will pay Fernan P2,000,000 twenty days after he passes the CPA exams for May 2019.
b. Zoe will pay Beth P1,000,000 if he finishes his LL.B at UP College of Law.
c. Dennis will pay Elaine P5,000,000 thirty days after his 80th birthday.
d. Jess will pay Carlos P500,000 as soon as his financial means will permit him to do so.

3. 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 in this case will never happen
b. Yes, because the condition in this case shall be deemed fulfilled.
c. Yes, because their agreement is in writing and it is valid and enforceable.
d. No. because the condition was not fulfilled.

4. Alfred obliged himself to deliver specific car to Arnold on February 1, 2018. However Alfred failed to
deliver the car on February 1, 2018. In this case Alfred is already:
a. Mora accipiendi
b. Mora solvendi ex re
c. Mora solvendi ex persona
d. Ordinary delay

5. Stipulation in the bill of lading which provides that No matter how negligent the carrier will be, it will
not be responsible for the damages caused. The stipulation is:
a. Perfectly valid.
b. The stipulation can be ratified by the party injured
c. Void being contrary to public policy.
d. Void being contrary to moral.

6. In a sale, this is actual delivery


a. Execution and signing of the sales document
b. When the goods sold are placed in the control and possession of the buyer
c. Delivery by the seller to the buyer of the key where the goods are kept
d. The buyer is already in actual possession of the goods

7. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the time:
a. The obligation to deliver the thing sold arises
b. The sale is perfected
c. The thing sold is delivered
d. The fruit of the thing sold is delivered

8. In distinguishing Earnest Money from Option Money, Earnest Money is:


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a. Given when there is no contract of sale
b. Given only when there is a perfected contract of sale
c. Given to bind the offeror in a unilateral promise to sell or buy
d. Given as a separate consideration from the purchase price

9. A form of delivery which takes place after seller of the property continues in possession of said
property no longer as owner buy as a mere possessor:
a. Traditio constitum possessorium
b. Tradition symbolica
c. Traditio brevi manu
d. Quasi-traditio

10. When goods are delivered to the buyer on “sale or return” for a period of seven days; ownership of the
goods passes to the buyer
a. Upon delivery of the goods
b. Upon expiration of seven days
c. Upon acceptance by the buyer of the offer of the seller
d. Upon perfection

11. In real estate mortgage, the mortgagor can sell the property mortgaged
a. Only if with the oral consent of the mortgagee
b. Only if with the written consent of the mortgagee
c. If not prohibited to sell
d. Even without the consent of the mortgagee

12. Elements of contracts of pledge and mortgage, except:


a. Pledgor or mortgagor must be the absolute owner
b. Pledgor or mortgagor must have the free disposal of the thing pledged
c. The thing pledged or mortgaged may be appropriated if the debtor cannot play
d. Pledge and mortgage are accessory contracts

13. S sold to B a specific car for P200,000 payable in four equal installments. S delivered the car to B but
required B to mortgage it back to S to answer for the unpaid installments. B paid the first and second
installments but he failed to pay the balance. S foreclosed the mortgaged property and sold it at public
auction for P80,000. As a result,
a. S can recover from B the balance of P20,000
b. S can recover from B the balance of P20,00 if there is stipulation to that effect
c. S cannot recover the deficiency any more even if there is stipulation to that effect
d. S cannot recover the deficiency except if there is stipulation

14. The distinction between a chattel mortgage and a pledge is that in chattel mortgage:
a. The delivery of the personal property is necessary
b. The registration of the property in the Registry of property is not necessary
c. The excess the amount due after foreclosure goes to the debtor
d. Answer is not given

15. One of the following is not a characteristic of pledge and mortgage


a. Accessory
b. Consensual
c. Gratuitous
d. Onerous

16. The following are characteristics of a contract of agency, except:


a. Consensual
b. Principal
c. Innominate
d. Bilateral

17. In agency, the agent represents


a. A person who is capacitated
b. A person who is incapacitated
c. A person regardless of capacity
d. None of the above

18. P leads B to believe that A is his (P’s) agent. However, A is not really the agent of P. Later, B transacted
with A believing that A is the agent of P. What kind of agency was created here?
a. Agency by ratification
b. Agency by appointment
c. Agency by estoppel
d. Agency by necessity

19. This is an agency that comprises one or more specific transactions of the principal
a. Special agency
b. General agency
c. Agency couched in general terms
d. Agency couched in specific terms

20. The following are modes of extinguishing an agency, except:


a. Death, civil interdiction, insanity, or insolvency of the principal agent
b. Accomplishment on the purpose of the agency
c. Expiration of the period for which the agency was constituted
d. Continued losses on the part of the principal or agent

21. A partner can engage in business for himself without the consent of his co-partners if he is
a. A capitalist partner and the business he will engage in is of a kind different from the partnership
business.
b. An industrial partner and the business he will engage in is of a kind different from the
partnership business.
c. A capitalist partner whether or not the business he will engage in is of the same kind as or
different from the partnership business.
d. An industrial partner whether or not business he will engage in is or the same kind as or
different from the partnership business.

22. A and B are partners. On June 15, 2011 when the total obligation of the partnership totals P80,000 C
was admitted as a new partner. At the same time of his admission, the partnership creditors were M
for P50,000 and N for P30,000. After June 15, the partnership borrowed from O, P20,000 and P10,000
from P on December 15, 2011 the partnership become insolvent leaving an obligation of P110,000 and
the partnership assets accounting to P30,000. The creditors are going after the separate properties of
the partners to satisfy their remaining claims. How are the creditors’ claims satisfied?

Answer 1 – M and N can go after the separate properties of A and B but C’s separate properties are not
answerable to their claims
Answer 2 – O and P can go after the separate properties of A, B and C
a. False, false
b. False, true
c. True, false
d. True ,true

23. In a partnership, the liability of the partners shall be joint and solidary
I. Obligations in favor of partnership suppliers by virtue of sales contract
II. Obligation in favor of a partnership client for return of deposits misappropriated by one
of the partners
III. Obligations in favor of a pedestrian hit by the delivery van driven by one of the partners
in the course of partnership business
a. I and III
b. II and III
c. I and II
d. I , II , III

24. A and B are partner in partnership. While A was performing his duties as a partner in the course of
business, he negligently caused damage to X, a third person, who shall be liable to X and up to what
extent?
a. Only the partnership shall be liable it being a juridical person separate and distinct from the
partners
b. Only A shall be liable for he is the only one at fault
c. Both A and B shall be liable solidarily to X
d. A, B , and the partnership are all liable solidarly X

25. When by-laws are adopted and filled after the incorporation, which of the following is correct?
a. Submitted within one (1) month after the filling of the Article of Incorporation with the SEC.
b. Approved and signed by at least a majority of the incorporators.
c. Approved by the stockholders representing at least 2/3 of the outstanding capital stock.
d. Approved by the stockholders representing at least a majority of the outstanding capital stock

26. I. A corporation commences to have a juridical personality upon the execution of the Articles of
Incorporation unless a different date is set by the incorporators.
II. A partnership begins from the moment of the execution of the partnership contract unless a
different date is set by the partners.
a. True, true b. True, false c. False, true d. False, false
27. The articles of incorporation of ABC Corporation provides for 7 directors. In the monthly meeting of the
board of directors held on April 8, 2014, directors B, C, D and E were present and the following
resolutions were approved:
a. A resolution for the purchase of a delivery truck from E trading, a sole proprietorship owned by E.
B, C, D and E voted for the resolution.
b. A resolution appointing T as the new corporate secretary where B, C, D and E voted for the
resolution.
Which is correct?
a. Both resolutions are valid and do not need stockholder’s approval.
b. Both resolution is valid but need stockholder’s approval.
c. Resolution A need stockholder’s approval. Resolution B is valid.
d. Resolution A is not valid. Resolution B needs stockholder’s approval.

28. Land Corporation is a non-stock, non-profit corporation whose articles of incorporation provide for 9
trustees. The trustees elected and their respective terms are: A, B and C for 3 years; D, E and F for 2
years; and G, 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 M and N were elected to replace B and E, respectively who resigned after one year
in office. What is the term of office of:
L M N
a. 3 years 3 years 3 years
b. 3 years 2 years 1 year
c. 1 year 2 years 1 year
d. 2 years 2 years 2 years

29. In case the members of the board of directors of a corporation still constitute a quorum, and there are
vacancies, who will fill up such vacancies?
Removal Resignation Expiration of Term Increase in the number of
Directors
a. Stockholders Board Stockholders Board
b. Board Board Stockholders Stockholders
c. Stockholders Board Stockholders Stockholders
d. Stockholders Stockholders Board Stockholders

30. Statement I – A majority of the number of directors or trustees as fixed in the articles of incorporation
shall constitute a quorum for the transaction of corporate business, and every decision of at least a
majority of the directors or trustees present at a meeting at which there is a quorum shall be valid as a
corporate act, except for the election of the officers which shall require the voice of a majority of all
the members of the board
Statement II – No person convicted of final judgment of an offense punishable by imprisonment for a
period exceeding five years or violation of the corporation code committed within six years prior to the
date of his election or appointment, shall qualify as a director, trustee or officer of any corporation.
a. True, true b. True, false c. False, true d. False, false

31. R, debtor of S, wrote a promissory note payable to the order of S. T, S’s brother, misrepresenting
himself as S’s agent, obtained the note from R, then negotiated it to A after forging S’s signature. A
indorsed it to B, who indorsed it to F, a holder in due course. May F recover from B?
a. Yes, since the signature of S is immaterial, he being the payee.
b. No, since the forgery of S’s signature results in the discharge of B.
c. Yes, since only the forged signature is inoperative and B is bound as indorser.
d. No, since the signature of S, the payee, was forged.

32. Which of the following is not negotiation of a negotiable instrument?


a. Delivery to the payee
b. Delivery of a bearer instrument
c. Indorsement completed by delivery
d. Assignment

33. Which of the following renders the instrument non-negotiable?


a. An indication of a particular fund our of which reimbursement is to be made
b. An indication of a particular account to be debited with the amount
c. A statement of the transaction which gives rise to the instrument
d. An order or promise to pay out of a particular fund

34. The following instruments were presented to you for evaluation:


i. “Pay to the order of A, P20,000.”
ii. “Pay to the order of A P20,000 or deliver to him a piano of the same value, at his option.”
iii. “Pay to the order of A P20,000 or deliver to him a TV of the same value.”
iv. “Pay to the order of A a piano worth P20,000.”

Assuming all the other requisites of negotiability are present, which of the foregoing instruments are
not negotiable?
a. Instruments I and II
b. Instruments I and III
c. Instruments II and III
d. Instruments III and IV

35. The following are functions of a negotiable instrument. Choose the exception:
a. It is a substitute for money.
b. It increases credit circulation.
c. It increases purchasing power in circulation.
d. It extinguishes obligation if its delivery is accepted by the creditor.

36. Using the same facts as given above, supposing the dog was sold by Angel to Baby?
1. Angel is entitled to the puppies as they were born while the dog is her possession
2. Baby is entitled to the puppies as the buyer is entitled to the fruits from perfection of the contract
of sale
a. Both 1 and 2 are true
b. Only 1 is true
c. Only 2 is true
d. Both 1 and 2 are false

37. The condition that some event happen at a determinate time shall _______ the obligation as soon as
the time expires or if it has become indubitable that the event will not tale place.
a. Extinguish
b. Suspend
c. Give rise to
d. Toll

38. Jane, Jean and Jenny are debtors of Jack, Jaq and Jak in the amount of P 900,000. Jane’s obligation
a. Pay Jack P300,000
b. Pay Jack P 100,000
c. Pay Jack P 150,000
d. Pay Jack, Jaq and Jak P900,000

39. Case No.1 Henry promised to give his son a car of the son will marry Herlyn this year. If by the end of
the year, Herlyn is already dead or the son has not married Herlyn, the obligation to give a car is
effective and demandable.
Case No 2. Henry promised to give his son a car of the son will not marry Herlyn before the end of
2018. If on January 1, 2011, the son has not yet married Herlyn, or Herlyn has died, the obligation is
extinguished.
a. Both statements are false
b. First false, second true
c. Both statements are true
d. First true, second is false

40. Which of the following statements is true?


a. A condition always refer to the future
b. The debtor losses the right to the period if he does not give any security to the creditors
c. The condition not to do an impossible thing does not render the obligation void
d. In alternative obligations the right to select which of the prestation shall be delivered belongs to
the creditors, unless expressly given to the debtor

41. A sold B a parcel of land for P30,000. The sale is evidenced by a memorandum of agreement of sale.
One week later, A sold the same parcel of land to C for P40,000 which was evidenced by a formal deed
of sale. Upon buying the property, C, who was aware of the first sale, immediately took possession of
the land and registered the deed of sale in her favor with the Register of Deeds. When informed of the
second sale, B subsequently registered an adverse claim to the property. The parcel of land shall
belong to:
a. B, because she has got an older title
b. C, because the sale was made on a formal deed of sale
c. C, because she is the first to register the deed of sale
d. C, because she is the first to take possession of the land

42. In case of redemption is made, which of the following will not be paid by the seller to the buyer
a. Expenses incidental to the sale paid by the buyer
b. All necessary expenses on he thing sold and to be redeemed
c. The consideration of the sale to be paid by the buyer
d. Interest on the price paid by the buyer

43. Dacion en pago as distinguished from sale


a. The object is always existing and specific
b. There is a greater degree of freedom in fixing the price
c. There is no pre-existing obligation
d. The cause is the price

44. When things are delivered to the buyer on approval, trial, or satisfaction, the ownership passes to the
buyer:
a. Upon delivery of the things
b. Upon meeting of minds
c. Upon conception of the sale
d. Upon return of the things to the seller

45. P orally appointed A as his agent to sell the former’s land. On January 3, 2001, A sold the land to B who
forthwith took possession thereof. It turned out however, that on January 1, 2001, P, without
informing A, had already sold the same land to C. Neither of the sales was registered. Whose contract
shall prevail?
a. The sale to B for he was the first in possession in good faith
b. The sale to C for the land was first sold to him by the owner
c. The sale to B for the agent was duly authorized to sell the land
d. The sale to C because the sale to B was void, A was not duly authorized by P

46. The following are requisites of pledge except:


a. The disposal property by the pledge
b. Absolute ownership of the property pledged
c. The thing pledged may be places in the possession of a third person
d. To bind a third person, it must be recorded in the office of the register of deeds

47. Three of the following are essential requisites of a contract of mortgage. Which is not?
a. The person instituting the mortgage has the free disposal of his property
b. The contract must be in writing
c. The mortgagor is the absolute owner of the thing mortgaged
d. The mortgage is constituted to secure the fulfillment of a principal obligation

48. In real mortgage, the following rules are valid, except one:
a. In a stipulation in the mortgage contract prohibiting the owner from alienation the immovable
mortgaged is valid
b. The mortgagee may alienate the mortgage credit or assign to a third person in whole or in part
c. Any stipulation allowing the mortgage creditor to appropriate the property mortgaged is null
and void
d. If alienation of mortgage credit is not registered, it is still valid between parties

49. A sold his piano to B for Php 200,000 payable installment, A chattel mortgage was constituted in the
piano. B defaulted in two installment payments. A demanded payment of the unpaid obligation
amounting to Php 120,000 and a writ of attachment was issued and the piano was sold for Php
100,000. Can A still recover the deficiency

Statement 1 – No, the foreclosure of the piano extinguishes B ‘ s obligation


Statement 2 – Yes, if stipulated that in case of foreclosure the buyer will pay any deficiency
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only Statement 2 is true

50. Which phrase best completes the statement – The affidavit of good faith in a Deed of Chattel
Mortgage is
a. An oath where the parties wear that the mortgage is made for the purpose of securing the
obligations specified and that the obligation is just and valid
b. An affidavit, the absence of which will vitiate the mortgage between the parties
c. Necessary only if the chattel being mortgaged are growing crops
d. A certification form the mortgagor that he is the mortgagor of the chattel

51. In which of the following is the principal not allowed to revoke the agency?
I. A bilateral contract depends upon the agency
II. The agency is a means of fulfilling an obligation previously contracted
III. The agency is one where the partner was appointed manager in the contract of partnership and the
removal of the partner from the management unjustifiable
a. I and II
b. II and III
c. I and III
d. I, II, and III

52. P appointed A as his agent. The authority of A did not authorize A to appoint a substitute but it did not
also prohibit him from appointing one. In this case:
a. A may appoint a substitute
b. A may not appoint a substitute because there is no express provision in his apartment
c. A may appoint a substitute but he shall be liable for the acts of the substitute only when the
substitute in bad faith
d. A may appoint a substitute only when the substitute is designated in the special power of
attorney

53. An agency is impliedly revoked in three of the following cases. Which is the exception?
a. When a new agent is appointed for the same business or transaction
b. When the principal directly manages the business entrusted to the agent, dealing directly with
third persons
c. When a special power of attorney is granted to another agent pertaining to a special power of
attorney issued to a previous agent
d. When the desire of the principal is to help the agent manage the business

54. The principal is not liable for the expense incurred by the agent in the following except:
a. When although the agent acted in contravention of the principal’s instructions, the principal
wishes to avail himself of the benefits derived from the contract
b. When it was stipulated that the agent would be allowed only to a certain sum
c. When the agent incurred them knowing that an unfavorable result would ensue, if the principal
was not aware thereof
d. When the expenses were due to the fault of the agent

55. This requires a special power of attorney, except:


a. To accept an inheritance
b. To compromise
c. To sell real property
d. To lease real property for one year

56. A, B and C organized ABC and Co, limited, a limited partnership with A as general partner, B as a limited
partner, and C as an industrial partner, contributing P200,000, P200,000 and industry respectively. The
partnership failed and after disposing all its assets to pay partnership debts, there still remains a note
payable in the sum of P30,000. Against whom can the creditor demand payment?

A B C
a. P30,000 P0 P0
b. P15,000 P0 P15,000
c. P10,000 P10,000 P10,000
d. P15,000 P15,000 P0

57. Any director of a corporation maybe removed from office by a vote of


a. Majority of the members of the board. c. 2/3 of the stockholders’ present.
b. Majority of the stockholders’ present d. 2/3 of the outstanding capital stock.

58. The following statements pertain to a voting trustee, except


a. The representative acquires legal title to the shares
b. It is good only for the meeting for which is was intended
c. It is generally irrevocable and the representative may vote even in the presence of the
stockholder
d. The agreement giving the representative the power to vote must be duly notarized and a copy
thereof must be submitted to the SEC to be effective and enforceable

59. The member of the board of directors may be given compensation by any of the following acts, except
a. If approved by the vote of the stockholders representing majority of the outstanding capital
stock
b. If provided in the by – laws
c. If approved by the board of directors if the salary given is not more than ten percent (10%) of
the net income before income tax during the preceding year
d. If approved by the board of directors giving them a reasonable per diem

60. The notification of director’s or trustee’s contract with the corporation requires the vote of
a. Majority of outstanding capital stock of voting shares or majority of the member entitled to
vote
b. 2/3 of outstanding capital stock of voting shares or 2/3 of the member entitled to vote
c. Majority of outstanding capital stock of voting and non – voting shares of majority of all the
members
d. 2/3 of outstanding capital stock of voting and non – voting shares or 2/3 of all the members
61. One of the requirements needed for a holder of a negotiable instrument to be a holder in due course is
the value requirement. Rodrigo is a holder of a P10,000 check written out to him. Which of the
following would not satisfy the value requirement?
a. Rodrigo received the check for a tax service debt for a close relative.
b. Rodrigo received the check from a tax client to pay off a four-month-old debt
c. Rodrigo received the check in exchange for a promise to do certain specified services three
months later.
d. Rodrigo took the check in exchange for a negotiable note for P11,200 which was due on that
day.

62. This is a promissory note We promise to pay Dalsa, Cristina and Catherine the sum of P18,000 (Signed)
Jeng, Bambi, and Gail
a. Gail is obliged to pay Catherine P6,000.
b. Gail is obliged to pay Catherine P12,000
c. Gail is obliged to pay Catherine P2,000.
d. Gail is obliged to pay Dalsa, Bambi and Catherine P18,000

63. The draft made in the Philippines calls for payment in Canadian dollars.
a. The instrument is negotiable only has the exchange written on the draft.
b. The draft is nonnegotiable because it calls for payment in money of another country.
c. The instrument is negotiable if it satisfies all of the other elements of negotiability.
d. The draft is nonnegotiable because the rate of exchange may fluctuate thus violating the sum
certain rule

64. Which of the following is not a negotiable instrument?


a. “Pay to B or order P1,000 in 4 equal monthly installments.”
To: X Sgd: A
b. “Pay to B or order P1,000 and debit my account thereafter”
To: X Sgd: A
c. “Pay to the order of B within 6 months from date the sum of P1,000 at 12% per annum”
To: X Sgd: A
d. “Pay to b or bearer P1,000 one year after date. If not paid when due, I agree to pay collection and
attorney’s fee”
To: X Sgd: A

65. A is maker and B is payee of a negotiable promissory note payable to order. There is no valuable
consideration for the note. B deliveries the instrument to C, without endorsement, under
circumstances that otherwise would have made C a holder in due course such as, that C did not know
of the absence of 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.
c. No, because A has a real defense which can be used even against a holder in due course.
d. No, because C acquires only B’s right and A can set up against B the defense of absence of
consideration.

66. “do ut facias” meaning:


a. I give and you give
b. I give and you do
c. I do and you give
d. I do and you do

67. X, Y and Z solidary owe A,B,C,D, joint creditors P30,000. How much can A collect from X?
a. P 7,500 only
b. P 5,000 only
c. P10,000, A in turn has to give P 2,500 each to B, C and D
d. P 20,000 , A in turn has to give P 5,000 to B, C and D

68. A and B are jointly liable to deliver a particular car valued at P200,000 to C on Jan 17, 2018. Which is
correct?
a. The prestation is indivisible making the liability of A and B solidary
b. If on July 17, 2018, A is willing to deliver the car but b is not, C may enforce the obligation against A
c. A is liable for a proportionate part of the obligation and will be liable also for damage if B id not
ready to comply with his obligation, even if A is willing to deliver the car
d. The liability of A and B is joint and that damage may be assessed only against the debtor who
violated the obligation

69. When the thing improves pending the fulfilment of the suspensive condition with the expense of the
debtor, the improvement shall inure to the benefit of:
a. The party who made the improvements
b. Partly by the debtor and partly by the creditor
c. The debtor
d. The creditor

70. My the suit filled by a passenger who was hurt against the operator of a public utility vehicle still
prosper even if the driver was acquitted by the court?
a. Yes provided he can prove the negligence of the driver
b. No, this will constitute double jeopardy which is violative of the construction
c. No, the acquittal means that the guilt of the accused was not proven by proof beyond reasonable
doubt
d. Yes, it is sufficient for him to prove the existence od the contract of carriage and the injuries
suffered.
RFBT

1. This is not a ground for the extinguishments of an obligation


a. Confusion
b. death of the debtor
c. remission
d. compensation

2. Which of these is not a conditional obligation?


a. Benjie will pay Fernan P2,000,000 twenty days after he passes the CPA exams for May 2019.
b. Zoe will pay Beth P1,000,000 if he finishes his LL.B at UP College of Law.
c. Dennis will pay Elaine P5,000,000 thirty days after his 80th birthday.
d. Jess will pay Carlos P500,000 as soon as his financial means will permit him to do so.

3. 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 in this case will never happen
b. Yes, because the condition in this case shall be deemed fulfilled.
c. Yes, because their agreement is in writing and it is valid and enforceable.
d. No. because the condition was not fulfilled.

4. Alfred obliged himself to deliver specific car to Arnold on February 1, 2018. However Alfred failed to
deliver the car on February 1, 2018. In this case Alfred is already:
a. Mora accipiendi
b. Mora solvendi ex re
c. Mora solvendi ex persona
d. Ordinary delay

5. Stipulation in the bill of lading which provides that No matter how negligent the carrier will be, it will
not be responsible for the damages caused. The stipulation is:
a. Perfectly valid.
b. The stipulation can be ratified by the party injured
c. Void being contrary to public policy.
d. Void being contrary to moral.

6. In a sale, this is actual delivery


a. Execution and signing of the sales document
b. When the goods sold are placed in the control and possession of the buyer
c. Delivery by the seller to the buyer of the key where the goods are kept
d. The buyer is already in actual possession of the goods

7. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the time:
a. The obligation to deliver the thing sold arises
b. The sale is perfected
c. The thing sold is delivered
d. The fruit of the thing sold is delivered

8. In distinguishing Earnest Money from Option Money, Earnest Money is:


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a. Given when there is no contract of sale
b. Given only when there is a perfected contract of sale
c. Given to bind the offeror in a unilateral promise to sell or buy
d. Given as a separate consideration from the purchase price

9. A form of delivery which takes place after seller of the property continues in possession of said
property no longer as owner buy as a mere possessor:
a. Traditio constitum possessorium
b. Tradition symbolica
c. Traditio brevi manu
d. Quasi-traditio

10. When goods are delivered to the buyer on “sale or return” for a period of seven days; ownership of the
goods passes to the buyer
a. Upon delivery of the goods
b. Upon expiration of seven days
c. Upon acceptance by the buyer of the offer of the seller
d. Upon perfection

11. In real estate mortgage, the mortgagor can sell the property mortgaged
a. Only if with the oral consent of the mortgagee
b. Only if with the written consent of the mortgagee
c. If not prohibited to sell
d. Even without the consent of the mortgagee

12. Elements of contracts of pledge and mortgage, except:


a. Pledgor or mortgagor must be the absolute owner
b. Pledgor or mortgagor must have the free disposal of the thing pledged
c. The thing pledged or mortgaged may be appropriated if the debtor cannot play
d. Pledge and mortgage are accessory contracts

13. S sold to B a specific car for P200,000 payable in four equal installments. S delivered the car to B but
required B to mortgage it back to S to answer for the unpaid installments. B paid the first and second
installments but he failed to pay the balance. S foreclosed the mortgaged property and sold it at public
auction for P80,000. As a result,
a. S can recover from B the balance of P20,000
b. S can recover from B the balance of P20,00 if there is stipulation to that effect
c. S cannot recover the deficiency any more even if there is stipulation to that effect
d. S cannot recover the deficiency except if there is stipulation

14. The distinction between a chattel mortgage and a pledge is that in chattel mortgage:
a. The delivery of the personal property is necessary
b. The registration of the property in the Registry of property is not necessary
c. The excess the amount due after foreclosure goes to the debtor
d. Answer is not given

15. One of the following is not a characteristic of pledge and mortgage


a. Accessory
b. Consensual
c. Gratuitous
d. Onerous

16. The following are characteristics of a contract of agency, except:


a. Consensual
b. Principal
c. Innominate
d. Bilateral

17. In agency, the agent represents


a. A person who is capacitated
b. A person who is incapacitated
c. A person regardless of capacity
d. None of the above

18. P leads B to believe that A is his (P’s) agent. However, A is not really the agent of P. Later, B transacted
with A believing that A is the agent of P. What kind of agency was created here?
a. Agency by ratification
b. Agency by appointment
c. Agency by estoppel
d. Agency by necessity

19. This is an agency that comprises one or more specific transactions of the principal
a. Special agency
b. General agency
c. Agency couched in general terms
d. Agency couched in specific terms

20. The following are modes of extinguishing an agency, except:


a. Death, civil interdiction, insanity, or insolvency of the principal agent
b. Accomplishment on the purpose of the agency
c. Expiration of the period for which the agency was constituted
d. Continued losses on the part of the principal or agent

21. A partner can engage in business for himself without the consent of his co-partners if he is
a. A capitalist partner and the business he will engage in is of a kind different from the partnership
business.
b. An industrial partner and the business he will engage in is of a kind different from the
partnership business.
c. A capitalist partner whether or not the business he will engage in is of the same kind as or
different from the partnership business.
d. An industrial partner whether or not business he will engage in is or the same kind as or
different from the partnership business.

22. A and B are partners. On June 15, 2011 when the total obligation of the partnership totals P80,000 C
was admitted as a new partner. At the same time of his admission, the partnership creditors were M
for P50,000 and N for P30,000. After June 15, the partnership borrowed from O, P20,000 and P10,000
from P on December 15, 2011 the partnership become insolvent leaving an obligation of P110,000 and
the partnership assets accounting to P30,000. The creditors are going after the separate properties of
the partners to satisfy their remaining claims. How are the creditors’ claims satisfied?

Answer 1 – M and N can go after the separate properties of A and B but C’s separate properties are not
answerable to their claims
Answer 2 – O and P can go after the separate properties of A, B and C
a. False, false
b. False, true
c. True, false
d. True ,true

23. In a partnership, the liability of the partners shall be joint and solidary
I. Obligations in favor of partnership suppliers by virtue of sales contract
II. Obligation in favor of a partnership client for return of deposits misappropriated by one
of the partners
III. Obligations in favor of a pedestrian hit by the delivery van driven by one of the partners
in the course of partnership business
a. I and III
b. II and III
c. I and II
d. I , II , III

24. A and B are partner in partnership. While A was performing his duties as a partner in the course of
business, he negligently caused damage to X, a third person, who shall be liable to X and up to what
extent?
a. Only the partnership shall be liable it being a juridical person separate and distinct from the
partners
b. Only A shall be liable for he is the only one at fault
c. Both A and B shall be liable solidarily to X
d. A, B , and the partnership are all liable solidarly X

25. When by-laws are adopted and filled after the incorporation, which of the following is correct?
a. Submitted within one (1) month after the filling of the Article of Incorporation with the SEC.
b. Approved and signed by at least a majority of the incorporators.
c. Approved by the stockholders representing at least 2/3 of the outstanding capital stock.
d. Approved by the stockholders representing at least a majority of the outstanding capital stock

26. I. A corporation commences to have a juridical personality upon the execution of the Articles of
Incorporation unless a different date is set by the incorporators.
II. A partnership begins from the moment of the execution of the partnership contract unless a
different date is set by the partners.
a. True, true b. True, false c. False, true d. False, false
27. The articles of incorporation of ABC Corporation provides for 7 directors. In the monthly meeting of the
board of directors held on April 8, 2014, directors B, C, D and E were present and the following
resolutions were approved:
a. A resolution for the purchase of a delivery truck from E trading, a sole proprietorship owned by E.
B, C, D and E voted for the resolution.
b. A resolution appointing T as the new corporate secretary where B, C, D and E voted for the
resolution.
Which is correct?
a. Both resolutions are valid and do not need stockholder’s approval.
b. Both resolution is valid but need stockholder’s approval.
c. Resolution A need stockholder’s approval. Resolution B is valid.
d. Resolution A is not valid. Resolution B needs stockholder’s approval.

28. Land Corporation is a non-stock, non-profit corporation whose articles of incorporation provide for 9
trustees. The trustees elected and their respective terms are: A, B and C for 3 years; D, E and F for 2
years; and G, 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 M and N were elected to replace B and E, respectively who resigned after one year
in office. What is the term of office of:
L M N
a. 3 years 3 years 3 years
b. 3 years 2 years 1 year
c. 1 year 2 years 1 year
d. 2 years 2 years 2 years

29. In case the members of the board of directors of a corporation still constitute a quorum, and there are
vacancies, who will fill up such vacancies?
Removal Resignation Expiration of Term Increase in the number of
Directors
a. Stockholders Board Stockholders Board
b. Board Board Stockholders Stockholders
c. Stockholders Board Stockholders Stockholders
d. Stockholders Stockholders Board Stockholders

30. Statement I – A majority of the number of directors or trustees as fixed in the articles of incorporation
shall constitute a quorum for the transaction of corporate business, and every decision of at least a
majority of the directors or trustees present at a meeting at which there is a quorum shall be valid as a
corporate act, except for the election of the officers which shall require the voice of a majority of all
the members of the board
Statement II – No person convicted of final judgment of an offense punishable by imprisonment for a
period exceeding five years or violation of the corporation code committed within six years prior to the
date of his election or appointment, shall qualify as a director, trustee or officer of any corporation.
a. True, true b. True, false c. False, true d. False, false

31. R, debtor of S, wrote a promissory note payable to the order of S. T, S’s brother, misrepresenting
himself as S’s agent, obtained the note from R, then negotiated it to A after forging S’s signature. A
indorsed it to B, who indorsed it to F, a holder in due course. May F recover from B?
a. Yes, since the signature of S is immaterial, he being the payee.
b. No, since the forgery of S’s signature results in the discharge of B.
c. Yes, since only the forged signature is inoperative and B is bound as indorser.
d. No, since the signature of S, the payee, was forged.

32. Which of the following is not negotiation of a negotiable instrument?


a. Delivery to the payee
b. Delivery of a bearer instrument
c. Indorsement completed by delivery
d. Assignment

33. Which of the following renders the instrument non-negotiable?


a. An indication of a particular fund our of which reimbursement is to be made
b. An indication of a particular account to be debited with the amount
c. A statement of the transaction which gives rise to the instrument
d. An order or promise to pay out of a particular fund

34. The following instruments were presented to you for evaluation:


i. “Pay to the order of A, P20,000.”
ii. “Pay to the order of A P20,000 or deliver to him a piano of the same value, at his option.”
iii. “Pay to the order of A P20,000 or deliver to him a TV of the same value.”
iv. “Pay to the order of A a piano worth P20,000.”

Assuming all the other requisites of negotiability are present, which of the foregoing instruments are
not negotiable?
a. Instruments I and II
b. Instruments I and III
c. Instruments II and III
d. Instruments III and IV

35. The following are functions of a negotiable instrument. Choose the exception:
a. It is a substitute for money.
b. It increases credit circulation.
c. It increases purchasing power in circulation.
d. It extinguishes obligation if its delivery is accepted by the creditor.

36. Using the same facts as given above, supposing the dog was sold by Angel to Baby?
1. Angel is entitled to the puppies as they were born while the dog is her possession
2. Baby is entitled to the puppies as the buyer is entitled to the fruits from perfection of the contract
of sale
a. Both 1 and 2 are true
b. Only 1 is true
c. Only 2 is true
d. Both 1 and 2 are false

37. The condition that some event happen at a determinate time shall _______ the obligation as soon as
the time expires or if it has become indubitable that the event will not tale place.
a. Extinguish
b. Suspend
c. Give rise to
d. Toll

38. Jane, Jean and Jenny are debtors of Jack, Jaq and Jak in the amount of P 900,000. Jane’s obligation
a. Pay Jack P300,000
b. Pay Jack P 100,000
c. Pay Jack P 150,000
d. Pay Jack, Jaq and Jak P900,000

39. Case No.1 Henry promised to give his son a car of the son will marry Herlyn this year. If by the end of
the year, Herlyn is already dead or the son has not married Herlyn, the obligation to give a car is
effective and demandable.
Case No 2. Henry promised to give his son a car of the son will not marry Herlyn before the end of
2018. If on January 1, 2011, the son has not yet married Herlyn, or Herlyn has died, the obligation is
extinguished.
a. Both statements are false
b. First false, second true
c. Both statements are true
d. First true, second is false

40. Which of the following statements is true?


a. A condition always refer to the future
b. The debtor losses the right to the period if he does not give any security to the creditors
c. The condition not to do an impossible thing does not render the obligation void
d. In alternative obligations the right to select which of the prestation shall be delivered belongs to
the creditors, unless expressly given to the debtor

41. A sold B a parcel of land for P30,000. The sale is evidenced by a memorandum of agreement of sale.
One week later, A sold the same parcel of land to C for P40,000 which was evidenced by a formal deed
of sale. Upon buying the property, C, who was aware of the first sale, immediately took possession of
the land and registered the deed of sale in her favor with the Register of Deeds. When informed of the
second sale, B subsequently registered an adverse claim to the property. The parcel of land shall
belong to:
a. B, because she has got an older title
b. C, because the sale was made on a formal deed of sale
c. C, because she is the first to register the deed of sale
d. C, because she is the first to take possession of the land

42. In case of redemption is made, which of the following will not be paid by the seller to the buyer
a. Expenses incidental to the sale paid by the buyer
b. All necessary expenses on he thing sold and to be redeemed
c. The consideration of the sale to be paid by the buyer
d. Interest on the price paid by the buyer

43. Dacion en pago as distinguished from sale


a. The object is always existing and specific
b. There is a greater degree of freedom in fixing the price
c. There is no pre-existing obligation
d. The cause is the price

44. When things are delivered to the buyer on approval, trial, or satisfaction, the ownership passes to the
buyer:
a. Upon delivery of the things
b. Upon meeting of minds
c. Upon conception of the sale
d. Upon return of the things to the seller

45. P orally appointed A as his agent to sell the former’s land. On January 3, 2001, A sold the land to B who
forthwith took possession thereof. It turned out however, that on January 1, 2001, P, without
informing A, had already sold the same land to C. Neither of the sales was registered. Whose contract
shall prevail?
a. The sale to B for he was the first in possession in good faith
b. The sale to C for the land was first sold to him by the owner
c. The sale to B for the agent was duly authorized to sell the land
d. The sale to C because the sale to B was void, A was not duly authorized by P

46. The following are requisites of pledge except:


a. The disposal property by the pledge
b. Absolute ownership of the property pledged
c. The thing pledged may be places in the possession of a third person
d. To bind a third person, it must be recorded in the office of the register of deeds

47. Three of the following are essential requisites of a contract of mortgage. Which is not?
a. The person instituting the mortgage has the free disposal of his property
b. The contract must be in writing
c. The mortgagor is the absolute owner of the thing mortgaged
d. The mortgage is constituted to secure the fulfillment of a principal obligation

48. In real mortgage, the following rules are valid, except one:
a. In a stipulation in the mortgage contract prohibiting the owner from alienation the immovable
mortgaged is valid
b. The mortgagee may alienate the mortgage credit or assign to a third person in whole or in part
c. Any stipulation allowing the mortgage creditor to appropriate the property mortgaged is null
and void
d. If alienation of mortgage credit is not registered, it is still valid between parties

49. A sold his piano to B for Php 200,000 payable installment, A chattel mortgage was constituted in the
piano. B defaulted in two installment payments. A demanded payment of the unpaid obligation
amounting to Php 120,000 and a writ of attachment was issued and the piano was sold for Php
100,000. Can A still recover the deficiency

Statement 1 – No, the foreclosure of the piano extinguishes B ‘ s obligation


Statement 2 – Yes, if stipulated that in case of foreclosure the buyer will pay any deficiency
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only Statement 2 is true

50. Which phrase best completes the statement – The affidavit of good faith in a Deed of Chattel
Mortgage is
a. An oath where the parties wear that the mortgage is made for the purpose of securing the
obligations specified and that the obligation is just and valid
b. An affidavit, the absence of which will vitiate the mortgage between the parties
c. Necessary only if the chattel being mortgaged are growing crops
d. A certification form the mortgagor that he is the mortgagor of the chattel

51. In which of the following is the principal not allowed to revoke the agency?
I. A bilateral contract depends upon the agency
II. The agency is a means of fulfilling an obligation previously contracted
III. The agency is one where the partner was appointed manager in the contract of partnership and the
removal of the partner from the management unjustifiable
a. I and II
b. II and III
c. I and III
d. I, II, and III

52. P appointed A as his agent. The authority of A did not authorize A to appoint a substitute but it did not
also prohibit him from appointing one. In this case:
a. A may appoint a substitute
b. A may not appoint a substitute because there is no express provision in his apartment
c. A may appoint a substitute but he shall be liable for the acts of the substitute only when the
substitute in bad faith
d. A may appoint a substitute only when the substitute is designated in the special power of
attorney

53. An agency is impliedly revoked in three of the following cases. Which is the exception?
a. When a new agent is appointed for the same business or transaction
b. When the principal directly manages the business entrusted to the agent, dealing directly with
third persons
c. When a special power of attorney is granted to another agent pertaining to a special power of
attorney issued to a previous agent
d. When the desire of the principal is to help the agent manage the business

54. The principal is not liable for the expense incurred by the agent in the following except:
a. When although the agent acted in contravention of the principal’s instructions, the principal
wishes to avail himself of the benefits derived from the contract
b. When it was stipulated that the agent would be allowed only to a certain sum
c. When the agent incurred them knowing that an unfavorable result would ensue, if the principal
was not aware thereof
d. When the expenses were due to the fault of the agent

55. This requires a special power of attorney, except:


a. To accept an inheritance
b. To compromise
c. To sell real property
d. To lease real property for one year

56. A, B and C organized ABC and Co, limited, a limited partnership with A as general partner, B as a limited
partner, and C as an industrial partner, contributing P200,000, P200,000 and industry respectively. The
partnership failed and after disposing all its assets to pay partnership debts, there still remains a note
payable in the sum of P30,000. Against whom can the creditor demand payment?

A B C
a. P30,000 P0 P0
b. P15,000 P0 P15,000
c. P10,000 P10,000 P10,000
d. P15,000 P15,000 P0

57. Any director of a corporation maybe removed from office by a vote of


a. Majority of the members of the board. c. 2/3 of the stockholders’ present.
b. Majority of the stockholders’ present d. 2/3 of the outstanding capital stock.

58. The following statements pertain to a voting trustee, except


a. The representative acquires legal title to the shares
b. It is good only for the meeting for which is was intended
c. It is generally irrevocable and the representative may vote even in the presence of the
stockholder
d. The agreement giving the representative the power to vote must be duly notarized and a copy
thereof must be submitted to the SEC to be effective and enforceable

59. The member of the board of directors may be given compensation by any of the following acts, except
a. If approved by the vote of the stockholders representing majority of the outstanding capital
stock
b. If provided in the by – laws
c. If approved by the board of directors if the salary given is not more than ten percent (10%) of
the net income before income tax during the preceding year
d. If approved by the board of directors giving them a reasonable per diem

60. The notification of director’s or trustee’s contract with the corporation requires the vote of
a. Majority of outstanding capital stock of voting shares or majority of the member entitled to
vote
b. 2/3 of outstanding capital stock of voting shares or 2/3 of the member entitled to vote
c. Majority of outstanding capital stock of voting and non – voting shares of majority of all the
members
d. 2/3 of outstanding capital stock of voting and non – voting shares or 2/3 of all the members
61. One of the requirements needed for a holder of a negotiable instrument to be a holder in due course is
the value requirement. Rodrigo is a holder of a P10,000 check written out to him. Which of the
following would not satisfy the value requirement?
a. Rodrigo received the check for a tax service debt for a close relative.
b. Rodrigo received the check from a tax client to pay off a four-month-old debt
c. Rodrigo received the check in exchange for a promise to do certain specified services three
months later.
d. Rodrigo took the check in exchange for a negotiable note for P11,200 which was due on that
day.

62. This is a promissory note We promise to pay Dalsa, Cristina and Catherine the sum of P18,000 (Signed)
Jeng, Bambi, and Gail
a. Gail is obliged to pay Catherine P6,000.
b. Gail is obliged to pay Catherine P12,000
c. Gail is obliged to pay Catherine P2,000.
d. Gail is obliged to pay Dalsa, Bambi and Catherine P18,000

63. The draft made in the Philippines calls for payment in Canadian dollars.
a. The instrument is negotiable only has the exchange written on the draft.
b. The draft is nonnegotiable because it calls for payment in money of another country.
c. The instrument is negotiable if it satisfies all of the other elements of negotiability.
d. The draft is nonnegotiable because the rate of exchange may fluctuate thus violating the sum
certain rule

64. Which of the following is not a negotiable instrument?


a. “Pay to B or order P1,000 in 4 equal monthly installments.”
To: X Sgd: A
b. “Pay to B or order P1,000 and debit my account thereafter”
To: X Sgd: A
c. “Pay to the order of B within 6 months from date the sum of P1,000 at 12% per annum”
To: X Sgd: A
d. “Pay to b or bearer P1,000 one year after date. If not paid when due, I agree to pay collection and
attorney’s fee”
To: X Sgd: A

65. A is maker and B is payee of a negotiable promissory note payable to order. There is no valuable
consideration for the note. B deliveries the instrument to C, without endorsement, under
circumstances that otherwise would have made C a holder in due course such as, that C did not know
of the absence of 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.
c. No, because A has a real defense which can be used even against a holder in due course.
d. No, because C acquires only B’s right and A can set up against B the defense of absence of
consideration.

66. “do ut facias” meaning:


a. I give and you give
b. I give and you do
c. I do and you give
d. I do and you do

67. X, Y and Z solidary owe A,B,C,D, joint creditors P30,000. How much can A collect from X?
a. P 7,500 only
b. P 5,000 only
c. P10,000, A in turn has to give P 2,500 each to B, C and D
d. P 20,000 , A in turn has to give P 5,000 to B, C and D

68. A and B are jointly liable to deliver a particular car valued at P200,000 to C on Jan 17, 2018. Which is
correct?
a. The prestation is indivisible making the liability of A and B solidary
b. If on July 17, 2018, A is willing to deliver the car but b is not, C may enforce the obligation against A
c. A is liable for a proportionate part of the obligation and will be liable also for damage if B id not
ready to comply with his obligation, even if A is willing to deliver the car
d. The liability of A and B is joint and that damage may be assessed only against the debtor who
violated the obligation

69. When the thing improves pending the fulfilment of the suspensive condition with the expense of the
debtor, the improvement shall inure to the benefit of:
a. The party who made the improvements
b. Partly by the debtor and partly by the creditor
c. The debtor
d. The creditor

70. My the suit filled by a passenger who was hurt against the operator of a public utility vehicle still
prosper even if the driver was acquitted by the court?
a. Yes provided he can prove the negligence of the driver
b. No, this will constitute double jeopardy which is violative of the construction
c. No, the acquittal means that the guilt of the accused was not proven by proof beyond reasonable
doubt
d. Yes, it is sufficient for him to prove the existence od the contract of carriage and the injuries
suffered.

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