Regulatory Framework For Business Transaction-SIR SALVA

1. Which of the following phrases means that the obligation is SOLIDARY? I.
Individually and collectively

II. Jointly or severally
III. Jointly and severally
IV. Jointly and individually
V. Jointly and separately
VI. Jointly and collectively
VII. Jointly and exclusively
VIII. Each to pay the whole value
IX. I promise to pay
X. We promise to pay
XI. Jointly and proportionately
XII. Jointly
XIII. Proportionately
A. I, II, III, IV, V, VI, VII, VIII, IX

B. I, II ,III, IV, V, VI, VII, VIII, IX, X
C. I, II ,III, IV, V, VI, VII, VIII, IX, X, XI
D. I, II ,III, IV, V, VI, VII, VIII, IX, X, XI, XII
2. How many years must a single-line cooperative operate before it may transform
into a multi-purpose cooperative?
a. At least 2 years c. At least 3 years
b. At least 1 year d. At least 4 years
3. A, B and C wrote and signed a promissory note which states “I promise to pay D
P3,000.” At the maturity date of the note, D wrote a letter to A condoning the obligation
is extinguished by remission?
a. P3,000 c. P1,000
b. P1,500 d. P2,000
4. Which of the following is a ground for involuntary dissolution of cooperative

through an order by a competent court after hearing?
a. Insolvency
b. Willful failure to operate on a cooperative basis
c. Failure to meet the required number of members of the cooperative
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d. Having obtained its registration through fraud
5. A, B and C wrote and signed a promissory note which states “We promise to pay
D P3,000.” At the maturity date of the note, A paid P3,000 to D. If B becomes insolvent,
how much may A ask for reimbursement from C?
a. P2,000 c. P3,000
b. P1,500 d. P1,000
6. A, an illiterate, borrowed P100,000 from B. Aside from that, mortgaged his land
to B which the latter accepted to secure the payment of the loan. B prepared a deed of
sale with a right to repurchase of the land at a price of P100,000 which A signed after B
explained that such document evidenced their agreement. What is the proper legal
remedy available to A?
a. Action for reformation of instrument
b. Action for rescission of contract
c. Action for annulment of contract
d. Action for declaration of nullity of contract
7. A, B and C are liable jointly and severally to D and E, solidary creditors, in the
amount of P60,000. D wrote a letter to A remitting the entire obligation which the latter
also accepted in writing. Which of the following statements is TRUE? I. The whole
obligation is extinguished
II. E may ask P30,000 reimbursement from D
III. A may ask P20,000 each reimbursement from B and C.
a. I only c. I, II and III
b. I and II d. II only
8. S sold a residential condominium unit to B at an installment price of P6,000,000

payable in 50 years at a monthly rental of P10,000 per month. After payment of several
installments totaling P1,200,000, B defaulted in the payment of remaining installments
which resulted to the cancelation of the contract of sale after the lapsing of the grace
period. What is the amount of cash surrender value to be received by B from S as a
result of cancellation?
a. P600,000 b. P900,000
c.P840,000 d.P960,000
9. Angel promised to allow Jessie to use his car until the latter becomes the
lawyer.
What is the type of obligation?
a. Obligation with a suspensive condition
b. Obligation with a resulatory condition
c. Obligation ex die or with a suspensive period
d. Obligation in diem or obligation with a resolutory period
10. A borrowed P100,000 from B and mortgaged his house to secure the
payment of the loan. The contract of real estate mortgage is not notarized and
not registered with Registry of Deeds. The contract of real estate mortgage
provides that A is prohibited from selling the mortgaged house 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?
a. A may still sell the house to third person despite the prohibition in the contract
of real estate mortgage.
b. B becomes the owner of the mortgaged house upon the default of A.
c. The contract of real estate mortgage is null and void because of the stipulation of
pactum commissorium which is contrary to law and public policy.
d. The contract of real estate mortgage is unenforceable because it is not in public
document and not registered with Registry of Deeds.
11. The debtor and creditor in the obligation is just one person.
a. Confusion c. Novation
b. Compensation d. Remission
12. B rented the specific truck of S. After the end of the contract, S sold the
property to B. As a result of sale, B continues to have possession of the property. What
type of constructive delivery is present?
a. Tradition clavium c. Traditio brevi manu
b. Traditio longa manu d. Traditio constitutum possessorium
13. The old obligation is replaced by a new obligation.

a. Confusion c. Novation
b. Compensation d. Remission
14. What is the quantitative threshold before any creditor or group of creditors may
file a petition for involuntary liquidation of an insolvent individual debtor?
a. Claim of atleast P500,000 c. Claim of atleast P1,000,000
b. Claim of at least P5,000,000 d. Claim of at least P25,000,000
15. What is the prescriptive period of action based on quasi-contract?

a. 10 years c. 6 years
b. 5 years d. 4 years
16. What is the prescriptive period of the right to file an action based on breach of
warranty of sale of 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.
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
d. d.3 days from the date of contract of sale or from the discovery of burden
17. While on the way to deliver a specific diamond ring sold to B and P100,000 in
payment of his debt to B, A (debtor) was robbed. What is the effect of this to his
obligation?
a. Extinguished as to P100,000 but not as to ring
b. Extinguished as to ring but not as to P100,000
c. Not for both as he suffers loss
d. The obligation to the ring and P100,000 are both extinguished
18.What is the quantitative threshold before any creditor or group of creditors may file
a petition for 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 higher
b. Claim of at least P500,000 or at least 10% of subscribed capital stock, whichever is
higher
c. Claim of at least P10,000,000 or at least 15% of subscribed capital stock,
whichever is higher
d. Claim of atleast P5,000,000 or at least 20% of subscribed capital stock, whichever
is higher
19. Which of the following obligations may be subject to LEGAL COMPENSATION?
a. Obligation of depository in a contract of deposit
b. Obligation of bailee in a contract of commodatum
c. Obligation arising from crime or delict
d. Obligation arising from contract of loan or mutuum
20. Which of the following is a defense that is available against a holder in due course?
a. Fraud in factum
b. Acquisition of instrument by force or duress
c. illegality of consideration
d. Absence of delivery of complete instrument
21. It refers to the theory being followed by the New Civil Code of the Philippines to
determine the exact moment of perfection of contract.
a. Cognitive theory c. Reception theory
b. Expedition theory d. Manifestation theory
22. If Andrew is an employee of Mark, the owner of the car and employer of Andrew,
would Mark be liable?
a. Yes, if action for damages based on culpa aquiliana is the case filed unless the
defense of diligence in the supervision and selection of employees can be raised
by him
b. Yes, if culpa criminal is the basis of the case filed because he (Mark) is primarily
liable
c. No, because Mark’s liability is only subsidiary
d. No in any case because Mark is not the one at fault
23. What is the status of oral sale of specific house at a price of P1M payable in 10
annual installments when delivery of the land will happen after 3 years but the buyer
had already paid P100,000 earnest money at the time of perfection?
a. Perfectly valid c. Null and void
b. Unenforceable d. Voidable
24. Donald verbally leased his house and lot to Barack for 2 years at a monthly
rental of P5,000 a month. After the first year, Donald demanded a rental of P10,000
claiming that due to the energy crisis, with the sudden increase of the price of oil, which
no one expected, there was also a general increase in prices. When Barack refused to
vacate the house, Donald brought an action for ejectment. Donald denied that they had
agreed to a lease for 2 years. Is there a contract of lease?
a. Yes, any contract of lease does not need to be in writing.
b. Yes, the Statue of Frauds do not apply since the contract herein is partially
consummated.
c. No, absent any written contract, a lease cannot be established.
d. No, since the lessor denies the lease, it is conclusive.
25. A sold in writing a pair of specific authentic nike shoes to B at a price of P5,000.
At the time of delivery, A delivered counterfeited shoes. What is the status of the
contract?
a. Voidable c. Null and Void
b. Unenforceable d. Perfectly valid
26 Can an oral sale on land be judicially enforced as between the contracting parties, if
the land has not been delivered but the buyer has paid 10% of the purchase price?
a. Yes, the Statute of Frauds is applicable only to those contracts which are executor
and not to those which have been consummated partially.
b. Yes, if the contract is consummated at least 10% it can be judicially enforced.
c. No, partial consummated must be at least 25%
d. No, a sale of land must be in writing for it to be judicially enforceable.
27. A is indebted in the amount of P1M to B. B filed an action for collection of a sum
of money against A. The trial court judge issued a writ of attachment against A’s
property. Afterwards, A sold in writing his specific car to C at a selling price of P75,000
when its book value is still P100,000. What is the status of contract of sale?
a. Voidable c. Null and void
b. Unenforceable d. Rescissible
28. In case of payment of money or delivery of property for an illegal purpose,

where the party who paid or delivered repudiates the contract before the purpose has
been accomplished, or before any damage has been caused to a third person, when
may the court allow a party to recover what he has paid or delivered?
a. If the public interest will be sub served
b. If the parties agree to such recovery
c. The court can never allow such recovery
d. The court can allow as long as there is no objection
29. D is a judgement debtor in a civil action filed by C. The trial court issued a writ of
attachment upon the motion of C. D’s bank deposit became the subject matter of
garnishment. Afterwards, D sold in writing his specific car to B. What is the status of
contract sale of car?
a. Rescissible c. Unenforceable
b. Voidable d. Void
30. I. The fixing of the price can never be left to the decision of one of the
contracting parties. But a price fixed by one of the contracting parties, if accepted by the
other, gives rise to a perfected sale.
II. The parties need not agree on the manner of payment of the price of the
property to give rise to a binding and enforceable contract of sale or contract to sell.
a. Only I is true c. Both are true
b. Only II is true d. Both are false
31. H and W are legally married and are covered by property regime of complete
separation of property. After the marriage, H pointed a gun to W to compel the latter to
sell her farm lot in writing. This prompted W to sign the deed of sale of the farm lot,
which H unilaterally prepared. What is the status of contract sale of farm lot?
b. Voidable d. Void
32. Is a continuing offer or contract by which the owner stipulates with another that
the latter shall have the right to buy the property at a fixed price within a certain time,
or under, or in compliance with, certain terms and conditions, or which gives to the
owner of the property the right to sell or demand a sale
a. Option c. Absolute
b. Earnest d. Conditional
33. B orally borrowed P1,000 from P. In order to secure the fulfillment of the loan,
G orally guaranteed the payment of B’s loan to P. What is the status of the contract of
guaranty?
b. Voidable d. Void
34. It shall be considered as part of the price and as proof of the perfection of the
contract.
a. Option money c. Down payment
b. Initial payment d. Earnest money
35. Which of the following contracts is NOT covered by statue of fraud?
a. Executory contract of sale of house at a selling price of P400
b. Executory contract of lease of land for a term of two years at monthly rental of
P300
c. Executory contract of sale of cellphone at a selling price of P500
d. Executory contract for a piece of work of furniture at a contract price of P1,000
36. In real estate mortgage, the mortgagor can sell the mortgaged property
a. With the consent of the mortgagee in writing.
b. Even without the consent of the mortgagee
c. Provided that approval of the Register of Deeds is secured.
d. With the express or implied consent of mortgage.
37. Mike has a cow that produces milk. Mike bottles the milk and sells it weekly in
the farmers’ market. He also makes cheese and butter from such milk and sells them to
his neighbors. The milk, cheese and butter are what kind of fruits?
a. Industrial
b. Natural
c. Industrial or natural depending on the circumstances
d. Civil or industrial depending on the circumstances
38. Silvia borrowed money from Gener amounting to P55,000 with an agreement to
return the said amount on August 31,2018. If Silvia failed to return the said amount on
the August 31,2018, is she already in delay?
a. Yes, because there is a period given in the obligation
b. No, absent any demand either judicially or extrajudicially from the creditor
c. Yes, because time is of the essence of the contract
d. Yes, because the obligation is a reciprocal obligation
39. I. The manner of payment of the purchase price is an essential element before a
valid and binding contract of sale can exist.
II. Agreement on the manner of payment goes into the price such that a
disagreement on the manner of payment is tantamount to a failure to agree on the
price.
40 A bilateral contract whereby the prospective seller, while expressly reserving the
ownership of the subject property despite delivery thereof to the prospective buyer,
binds himself to sell the said property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon, that is, full payment of the purchase price.
a. Absolute Sale c. Contract to sell
b. Conditional sale d. Agency to sell
41. Statement 1: A real estate mortgage can guarantee future obligations, while a
chattel mortgage cannot guarantee future obligations.
Statement 2: The mortgagee has the right to take possession of the thing subject of
a chattel mortgage upon default of the mortgagor.
a. Both are true c. No. 1 is true; No.2 is false
b. Both are false d. No. 1 is false; No.2 is false
42. This refers to the right of the mortgagor to redeem the mortgaged property after his
default in the performance of his obligation but before the property is sold.
a. Equity of redemption c. Right of redemption
b. Dragnet clause d. Right to purchases.
43. Novak bought a Mitsubishi Mirage from Roger paying a down payment of P100,000
thus leaving a balance of P700,000 which he agreed to pay within a period of 4
years. As security, the parties agreed on January 1,2018 that Novak shall mortgage
the car in favor of Roger. On January 15, 2108, they assigned the deed of chattel
mortgage. On January 31,2018, the deed was recorded in the Chattel Mortgage
Register. When was the contract of chattel mortgage perfected?
a. January 1, 2018 c. January 31, 2018
b. January 15, 2018 d. No contract was perfected
44 Andy offered to construct a tennis court for Martina and gave her 5 days within
which to accept or reject the offer. On the third day, before Martina could make up
her mind, Andy withdrew the offer. If Martina signifies her acceptance on the fourth
day, is there a perfected contract?
a. None, since Andy already withdrew his offer
b. None, but Andy has one day to accept Martina’s counter-offer
c. Yes, because Martina accepted within the 5-day period
d. Yes, because Andy cannot withdraw his offer until after 5 days
45. Rafa offered to sell his 100-sqm lot to Jennifer for P100,000. Jennifer counter-
offers to buy for the same price the 90-sqm portion of the lot. Is there a perfected
contract?
a. None, since there is no mode of payment

b. None, since the parties did not agree on the size of the land.
c. Yes, a sale of the 90-sqm lot for P100,000.
d. Yes, a sale of the 90-sqm lot for P90,000.
46. Serena published in the newspaper an “Invitation to Bid” inviting proposals to

supply labor and materials for a condominium project described in the invitation. Venus,
Maria, and Kim submitted bids of P100M, P125M, and P200M respectively. Can Serena
award the contract to Kim?
a. No, since Kim gave the highest bid.
b. No, since Venus has the right to be awarded the contract.
c. Yes, Serena is not bound to accept the highest or lowest bid.
d. Yes, since Kim gave the highest bid.
47. Kyle donated his only property worth P150,000 to Grigor on January 1, 2017. On
January 15, 2017, Kyle borrowed P100,000 from Marin which is payable on January 31,
2017. When Kyle failed to pay the debt, Marin sought to rescind Kyle’s donation to
Grigor for being entered into in fraud of creditors. Will Marin’s action prosper?
a. Yes, because had Kyle not donated the property, he would not have borrowed
from Marin.
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b. Yes, because if the property is given back to Kyle, he would be able to pay
Martin
c. No, because Marin has to sue Kyle first.
d. No, because Marin’s credit existed after the donation.
48. Means goods identified and agreed upon at the time a contract of sale is made.
a. Generic goods c. Indeterminate goods
b. Specific goods d. Quality of goods
49. Using the same data in preceding number except from the fact that Angel opted
to file an action for exact fulfillment which resulted to issuance of writ of attachment.
Afterwards, the public sale resulted to net proceeds of P25,000. Which is CORRECT?
a. Angel can never recover the deficiency despite the stipulation for recovery in
the contract of chattel mortgage
b. Angel can recover the deficiency because there is stipulation for recovery
c. Angel can still foreclose the chattel mortgage to recover the deficiency
d. Angel may recover the deficiency even without stipulation for recovery
50. Is an agreement by virtue of which the owner of a credit, known as the assignor,
by a legal cause, such as sale, dacion en pago, exchange or donation, and without the
consent of the debtor, transfers his credit and accessory rights to another, known as the
assignee, who acquires the power to enforce it to the same extent as the assignor could
enforce it against the debtor.
a. Barter c. Assignment of credit
b. Waiver of rights d. Stipulation pour autruie
51. It refers to the repurchase made by a co- owner, adjoining rural lot owner or
adjoining urban lot owner of a land sold by a co- owner, adjoining urban lot owner as
expressly authorized by law.
a. Legal redemption c. Conventional redemption
b. Legal pre emption d. Voluntary redemption
52 I. In a contract of sale, the object is property.

II. In assignment of credit, the object is credit, incorporeal rights or rights of action.
53. Ana orally sold his cellphone at a selling price of P 10,000 to bea who obliges to
deliver a tablet worth P 6,000 and additional cash of P4,000. What is the contract
entered into by Ana and Bea?
a. Contract of sale. c. Contract of barter
b. Contract for a piece of work d. Contract of agency to
sell
54 There is right of redemption in
a. Chattel mortgage c. Real estate mortgage
b. Pledge d. Pledge of jewelry
55. In relation of real estate mortgage, which of the following statements is false?
a. In judicial foreclosure, the mortgagor may redeem the property after the sale
and before the confirmation by the court of the sale.
b. In extra-judicial foreclosure, the mortgagor has one year from the date of
registration of the sale to redeem the property.
c. In extra-judicial foreclosure, the mortgagor has one year from the date of
foreclosure sale to redeem the property
d. In extra-judicial foreclosure, the mortgagor has one year from the date of
registration of the sale to redeem the property except when the owner of the
property is a juridical person.
56 Which of the following statement is true?

a. The mortgage in real estate mortgage acquires possession and enjoyment of
the thing mortgaged during the existence of the estate mortgage.
b. The property subject of the real estate mortgage cannot be sold by the
mortgagor.
c. The parties may stipulate that in case of default, the ownership of the thing
pledged or mortgaged shall automatically pertain to the mortgagee.
d. The real estate mortgage is extinguished upon payment of the principal
obligation
57. As a rule, the penalty in obligations with a penal clause takes the place of
damages and interests. What is/are the exception/s?
a. When there is a stipulation to that effect
b. When the debtor refuses to pay the penalty
c. When the debtor is guilty of fraud in the performance of the obligation d. All of
the above
58. In what instance may the court reduce the penalty in obligations with a penal
clause?
a. When the obligation has been partly complied by the debtor;
b. When the obligation has been irregularly with by the debtor;
c. When the penalty is iniquitous or unconscionable even if there has been no
performance
d. All of the above
59. Lucas, of age, entered into a contract with Bryan, a minor. Lucas knew and the
contracts specifically stated the age of Bryan, May Lucas successfully demand the
annulment of the contract with Bryan?
a. No, because the action for annulment may have already prescribed
b. No, because Lucas cannot challenge the incapacity of Bryan with whom he
contracted
c. Yes, because Bryan is a minor and minority is a ground to annul voidable
contracts
d. Yes, because Lucas cannot be estopped from invoking Bryan’s minority
60. Tiger sold his car to his nephew, Rory, a minor. Two weeks later, Tiger died.
Tiger’s heirs (his children) then brought an action to annul the sale alleging Rory’s
minority.
Should annulment be allowed?
a. No, since Tiger, being of age, cannot annul the sale, his heirs cannot seek for the
same.
b. No, since Tiger is only the one allowed to annul be the sale considering that he
was the one who contracted with Rory.
c. Yes, being the heirs, they can seek for the annulment which may have
prejudiced their capacity to inherit from Tiger.
d. Yes, since Tiger failed to seek for the annulment, the right is passed on to his
heirs
61. It takes place when the vendor reserves the right to repurchases the thing sold
with the obligation of returning to the vendee the price of the sale, the expenses of the
contract, and the necessary and useful expenses made on the thing sold.
a. Right of repurchases c. Conventional redemption
b. Equity of redemption d. Legal redemption
62. A, B, and C are co-owners in equal shares of one hectare rural land, the
adjoining owners to which are D and E, the latter owning the smaller area. A donated his
share of the land owned in common to X who is a rural landowner. Upon the proper
notice of the sale, B, C, D and E sought to exercises the right of legal redemption over
the shares sold. Who shall have the right to do so? a. A and B are preferred to D and E
redeem
b. E shall have the right to redeem because he has smallest area
c. None of them has the right to redeem because the land alienated was not by
onerous title
d. The first one between A and B to request redemption shall be preferred
63.Ted promised Robin that he will give her P10,000 if Robin kills Barney. Robin killed
Barney and now demands Ted to give her the P10,000. Is Ted liable to Robin?
a. Yes, because the condition has been fulfilled which makes the obligation due
and demandable.
b. Yes, because there are reciprocal obligations, and the performance of one
results to the demand ability of the other
c. No, the illegality of a condition renders the obligation void
d. No, Robin committed a crime which disqualifies her to receive money from Ted.
64. Culpa levis under the Roman Law means:

a. Grave negligence c. Slight negligence
b. Ordinary negligence d. Super negligence
65. J an E entered into a universal partnership of all present property. A the time
their agreement J had a four door apartment w/c he inherited from his father 3 years
earlier. E, on the other hand, had a fishpond w/c he acquired by dacion en pago from R.
During the first year of the partnership, rentals collected on the four door apartment
amounted to 480,000; while fish harvested from the fishpond were sold for P300,000.
During the same period, E received by way of donation a vacant lot from an uncle. The
partners had a stipulationthat future property shall belong to the partnership. Which of
the ff does NOT belong to the common fund of the partnership?
a. Fishpond c. Rental of P480,000
b. Apartment d. Vacant land
66. 1st statement - The receipt of a later installment of a debt without reservation as
to prior installments, shall give rise to a conclusive presumption that such installments
have been paid.
2nd statement – If a taxpayer pays his income tax liability for the current year, there is a
presumption that tax liability for the previous year has been paid.
a. True, true c. True, false
b. False, true d. False, false
67. In obligations to give a determinate thing, what degree of diligence must be
exercised in taking care of the thing?
a. Fishpond b. Apartment
c. Rental of P480,000 d. Vacant land
68. Statement I: Obligations derived from law are presumed

Statement II: Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith
a. Both statements are true.
b. Both statements are false.
c. Statement I is true; Statement II is false.
d. Statement I is false; Statement II is true.
69. The following are the warranties of a qualified indorser by qualified indorsing
the negotiable instrument, EXCEPT.
a. That the instrument is genuine and in all respects what it purports to be.
b. That he has good title to it.
c. That all prior parties had capacity to contract.
d. That the instrument, is at the time of his indorsement, is valid and subsisting.
70. Atoy is obliged to give Bitoy, at Bitoy’s option his Iphone X, or his laptop. If all
objects were lost thru Atoy’s fault, which is correct?
a. The value of the first thing lost plus damages must be given to Bitoy.
b. The value of the last thing lost plus damages must be given to Bitoy.
c. The value of any of the Bitoy’s choice plus damages must be given to Bitoy.
d. The obligation is extinguished.
71. Which of the following is not a mode of extinguishing an obligation?

a. Loss of determinate thing c. Remission of debt
b. Legal delay d. Confusion of right
72. Taxi driver D, driving recklessly, killed pedestrian P and his passenger Y. What is
the nature of liability of D’s employer under the Revised Penal Code?
a. Subsidiary c. Primary
b. Direct d. Solidary
73. Waiver of future fraud is?

a. Valid c. Rescissible
b. Voidable d. Void
74. ABC Corporation is undergoing liquidation. What will happen to ABC

corporation’s land distributable to any creditor or stockholder or member who is
unknown and cannot be found?
a. It shall be escheated and forfeited in favor of the national government.
b. It shall be escheated and forfeited in favor of the province where the land is
located.
c. It shall be escheated and forfeited in favor of the barangay where the land is
located.
d. It shall be escheated and forfeited in favor of the city or municipality where the
land is located.
75. If the obligation is payable in foreign currency, which is correct?

a. The obligation is void.
b. The obligation is valid, but the stipulation is void.
c. The creditor can compel the debtor to pay in foreign currency as per
agreement.
d. The stipulation and the obligation are void.
76. Choose the contracts which are voidable.
a. Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them
b. Unauthorized contract
c. Those whose object is outside the commerce of man
d. Those where one of the parties are incapable of giving consent to a contract.
77. Taxi driver D, driving recklessly, killed pedestrian P and his passenger Y. Can D’s
employer relieve himself of liability arising from quasi-delict?
a. Yes, if he proved that he was not inside the taxi when the incident happen
b. Yes, if he did not authorize the killing committed by D
c. No, because the liability of D and his employer cannot be separated
d. Yes, if he proved due diligence of a good father of a family in the selection and
supervision of D
78. This obligation takes effect at once, but terminates upon arrival of the day
certain. a. Condition precedent
b. Condition subsequent
c. Ex die period
d. In diem period
79. A borrowed P10,000 from B. b filed an action to collect a sum of money against
A which resulted to the issuance of writ of attachment.
The cellphone of A is the first to be attached by the sheriff. Afterwards, A orally sold and
delivered his laptop to C at a price of P5,000. payment of the price will happen after one
week from the perfected of contract. What is the status of contract of sale of laptop?
a. Rescissible c. Perfectly valid
b. Voidable d. Unenforceable
80. “ DoutFacias ” means:

a. I give and you give c. I give and you
b. I do and you give do
d. I do and you
do
81. Aries and Benny were sued a promissory note which read as follows. “Manila,
May 1,2019. For value received, we the undersigned, promise insolidum to pay Carla or
his order, on or before May 1, 2019, the sum of P1,000,000, plus an interest rate of 6%
(Sgd) Aries and Benny”. Assuming that Benny is insolvent:
a. a. Carla can recover all his claim amounting to P1,000,000 from Aries who is
solvent
b. Carla can recover only P500,000 from Aries without prejudice to recover from
Benny when his finance improves
c. Carla cannot recover from Aries P1,000,000 because the latter is obliged only to
pay P1,000,000 minus the share of Benny of P500,000 since insolvency is a
matter of defense
d. Carla can recover all his claim amounting to P1,000,000 from Aries who bound
himself solidary, without prejudice of course to his recovery later on from
Benny, the share of the latter of the debt, plus interest from the date of
payment.
82. Taxi driver D, driving recklessly, killed pedestrian P and his passenger Y. If the
heirs of P and Y sue for breach of contract (culpa contractual), against whom can it be
brought?
a. D only c. D and his employer
b. D’s employer only d. None of the two
83. Which of the following is not correct about alternative obligation?

a. A person alternatively bound by different prestations shall completely perform
one of them
b. The creditor cannot be compelled to receive part of one and part of the other
undertaking
c. The right of choice belongs to the creditor, unless it has been expressly granted
to the debtor
d. The debtor shall have no right to choose those prestations which are
impossible, unlawful or which could not have been the object of the obligation
84. What is the required vote for validity of management contract between
managing corporation and managed corporation in the absence of interlocking director?
a. Approval by at least majority of the board of directors and ratification by
stockholders representing at least majority of the outstanding capital stock of
managing corporation and approval by at least majority vote of the board of
directors and ratification by stockholders representing at least majority of the
outstanding capital stock on the part of managed corporation.
b. Approval by at least majority of the board of directors and ratification by
stockholders representing at least majority of the outstanding capital stock of
directors and ratification by stockholders representing at least 2/3 of the
c. Approval by at least majority of the board of directors and ratification by
stockholders representing at least 2/3 of the outstanding capital stock of
directors and ratification by stockholders representing at least majority of the
d. Approval by at least majority of the board of directors and ratification by
stockholders representing at least 2/3 of the outstanding capital stock of
directors and ratification by stockholders representing at least 2/3 of the
85. “ I will begin supporting you from the time your father dies of dengue” is an
example of an obligation with:
a. . Suspensive period c. Suspensive condition
b. Resolutory period d.. Resolutory condition
86. Which of the following statement about fraud is not correct?

a. The law is does not allow waiver of an action for future fraud.
b. Damages arising from fraud cannot be mitigated or reduced by the court unlike
damages arising from negligence especially if there Is contributory negligence.
c. Waiver of past fraud is valid.
d. Waiver of future fraud is valid.
87. Ariel was injured while he was a passenger in a bus operated by X Co. The
proximate cause of the accident was a tire blowout causing the driver to lose control of
the wheel as a result of which the bus fell into a ditch. Can the operator now relieve
itself of liability by claiming that the real cause of the accident was a fortuitous event?
a. No, tire blowouts cannot be classified as fortuitous event per se within the
meaning of the law
b. Yes, tire blowout under this circumstances is considered a fortuitous event
c. Yes, whether the tire blowout is a fortuitous event or not, X Co. remains liable.
d. No, it is the tire manufacturer which is liable
88. Which of the following is not correct about solidary obligation?

a. The invisibility of an obligation does not necessarily give rise to solidarity. Nor
does solidarity of itself imply indivisibility.
b. Solidarity may exist although the creditors and the debtors may not be bound
in the same manner and by the same periods and conditions.
c. Each one of the solidary creditors may do whatever may be useful to the
others, but not which may be prejudicial to the latter.
d. A solidary creditor may assign his rights without the consent of the others.
89. A borrowed P100,000 from B and mortgaged his house to secure the payment
of the loan. The contract of real estate mortgage is not notarized and not registered
with Registry of Deeds. The contract of real estate mortgage provides that A is
prohibited from selling the mortgaged house 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?
of real estate mortgage.
b. B becomes the owner of the mortgaged house upon the default of A.
c. The contract of real estate mortgage is null and void because of the stipulation
of pactum commissorium which is contrary to law and public policy.
90. 1st statement – In alternative obligations, the choice shall produce no effect
except from the moment it has been communicated.
2nd statement – In cession en pago what is being transferred is the universality of the
debtor’s property
a. Both statements are wrong
b. 1st statement correct, 2nd statement wrong
c. Both statements are correct
d. 1st statement wrong, 2nd statement correct
91. The following are the requisites of fortuitous event, except:

a. Occurrence renders it absolutely impossible for the debtor to fulfill his
obligation in a normal manner; impossibility must be absolute not partial,
otherwise not force majeure.
b. Debtor contributed to the aggravation of the injury to the creditor.
c. Cause is independent of the will of the debtor.
d. The event is unforeseeable/unavoidable.
92. Ren constructed a windmill system for Alex for P20,000. Alex made a
downpayment of P10,000 and an installment payment of P5,000, leaving a balance of
P5,000. Alex refused to pay the balance because the windmill system collapsed after a
strong wind hit the place. Is Ren exempt from liability due to fortuitous event?
a. Yes, a strong wind in this case can be fortuitous, unforeseeable or unavoidable
b. No, the windmill system would not have collapsed had there been no inherent
defect in it which could only be attributable to Ren.
c. Yes, Alex’s refusal to pay the balance relieves Ren of his liability
d. No, Ren remains liable until he receives the balance payment
93. Which of the following is not correct about penal clause?

a. In obligations with a penal clause, the penalty shall substitute the indemnity for
damages and the payment of interests in case of noncompliance, if there is no
stipulation to the contrary.
b. The debtor cannot exempt himself from the performance of the obligation by
paying the penalty, save in the case where this right has been expressly
reserved for him.
c. Proof of actual damages suffered by the creditor is necessary in order that the
penalty may be demanded.
d. The nullity of the penal clause does not carry with it that of the principal
obligation.
94 . What is the maximum amount to be granted as compensation to board of directors

of a corporation in such capacity as directors?
a. 10% of the net income of corporation after tax of the current year.
b. 10% of the net income of corporation before tax of the current year.
c. 10% of the net income of corporation after tax of the immediately preceeding
year.
d. 10% of the net income of corporation before tax of the immediately preceeding
year
95. When during a fire, A saved the properties of B without the latter’s consent or
knowledge, B is bound to pay A just compensation under the principle of:
a. Quasi-delict c. Quasi-contract
b. Delict d. Solutioindebit
96. D’s obligation to C is to deliver a Samsung Galaxy S10 worth P65,000 on March 1,
2019. A week before the maturity date, D was ordered by his superior to go to
Davao to confer with the company’s client. Since D has no time to buy the Samsung
Galaxy S10, he offered to give C the amount of P65,000.00 so that C can buy the
Galaxy S10. C accepted the offer. The obligation of D to C in this case is extinguished
by:
a. Compensation c. Dacion en pago
b. Payment by cession d. Novation
97. What are the requisites of a condition?

a. Futurity and certainty
b. Currency and uncertainty
c. Futurity and uncertainty
d. Currency and certainty
98.Which of the following is not really a mode of extinguishment of obligation?

a. Payment c. Compensation
b. Confusion of right d. Novation
99. P borrowed P1,000 from C. P pledged and delivered his specific cellphone to C
as collateral for the loan. The contract of pledge provides that C may recover the
deficiency as a result of foreclosure sale. P failed to pay his obligation at the maturity
date which prompted C to sell the pledged cellphone at public auction. The cellphone
was sold at a price of P900. Which of the following statements is correct?
a. The contract of pledge is extinguished but the contract of loan is extinguished
up to P900 only.
b. Pledgee P may still recover the deficiency of P100 because there is stipulation to
that effect.
c. The contract of pledge is not extinguished.
d. Both the contract of pledge and contract of loan are extinguished b y the public
sale.
100. A condition which, if imposed on an obligation will be disregarded and will

therefore make the obligation immediately demandable.
a. If GMA commits suicide
b. If FPJ will not rise from the dead.
c. If GMA passes the nursing board exam
d. If GMA kills FPJ
101.Allan promised to give Boying his only Honda Civic car 2019 if Boying passes the
May 2019 CPA board exams. Pending the results of the exams, the car is destroyed by a
fortuitous event through the fault on the part of Allan. As a result
a. The obligation of Allan is converted into monetary obligation for damages
b. The obligation of Allan is extinguished.
c. The obligation of Allan will be equitably reduced.
d. A will have to give Allan another Honda Civic car 2019 or its equivalent.
102. In case of an obligation subject to a suspensive condition, what is the effect if the
object of the obligation is lost without the fault of the debtor during the pendency of
the condition?
a. The obligation is not extinguished
b. The loss shall be borne by the debtor
c. The obligation is extinguished
d. The loss shall be borne by the creditor
103.Compensation shall not be proper when one of the debts arises from the following,
except?
a. From the obligations of borrower in simple loan
b. From the obligation of a bailee in commodatum
c. From the claim for support due by gratuitous title
d. From the obligation consists in civil liability arising from a penal offense
104. On February 1, 2018 S sold under contract of sale his specific titled land to B
under notarized deed of sale. On March 1, 2018, S sold again the same land to C under
another notarized deed of sale. B obtains knowledge of the sale to D and he informs D
of the desire to talk but the latter refuses. On April 1, 2018, B registered his adverse
claim to Registry of Deeds which annotated such claim. On May 1, 2018, D registered
the deed of sale to the Registry of Property. Who has better right?
a. B because he is the first buyer and the first possessor in good faith.
b. D because he is the first registrant in good faith.
c. C. Neither B nor D.
d. Both B and D.
105. When the fulfillment of the condition depends upon the sole will of the:
a. Debtor but it is resolutory, the obligation is valid.
b. Debtor but it is suspensive, the obligation is valid.
c. Creditor even if it is suspensive, the obligation is void.
d. Debtor, it is always void.
106. Which of the following statement is not correct?

a. Payment made to the creditor by the debtor after the latter has been judicially
ordered to retain the debt shall not be valid.
b. The debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value as, or more valuable than that
which is due.
c. When the obligation consists in the delivery of an indeterminate or generic
thing, whose quality and circumstances have not been misstated, the creditor
cannot be demand a thing of superior quality.
d. Payment made in good faith to any person in possession of the credit is not
valid.
107. In case of an obligation subject to a suspensive condition, what is the effect if

the object of the obligation deteriorates through the fault of the debtor during the
pendency of the condition?
a. The creditor may choose between rescission or fulfillment with indemnity for
damages
b. The debtor may choose between rescission or fulfillment with indemnity for
damages
c. The creditor may ask for rescission only
d. The creditor may ask for fulfillment with the damages only
108.When only one prestation has been agreed upon, but the obligor may render
another in substitution, the obligation is called
a. Alternative obligation c. Simple obligation
b. Facultative obligation d. Conjunctive obligation
109. A, an illiterate, borrowed P100,000 from B. Aside from that, mortgaged his land
to B which the latter accepted to secure the payment of the loan. B prepared a deed of
sale with a right to repurchase of the land at a price of P100,000 which A signed after B
explained that such document evidenced their agreement. What is the proper legal
remedy available to A?
a. Action for reformation of instrument
b. Action for rescission of contract
110. The alienation of the debtor of a particular property in favor of his creditor, with
the latter’s consent, for the satisfaction of the former’s money obligation to the latter
with the effect of extinguishing the said money obligation.
a. Remission c. Consignation
b. Application of payment d. Novation
111. Which of the following statements is not correct?

a. Consignation shall be made by depositing the things due at the disposal
of judicial authority, before whom the tender of payment shall be proved,
in a proper case, an the announce of consignation in other cases.
b. The consignation shall be ineffectual if it is not made strictly in
consonance with a provisions which regulate payment.
c. The expenses of consignation when properly made shall be charged
against the debtor.
d. If the creditor to whom tender of payment has been made refuses
without just cause to accept it, the debtor shall be released from
responsibility by the consignation of the thing or sum due.
112. What is the effect of a fortuitous event upon the term or period agreed upon?
a. It stops the running of the term or period agreed upon
b. It relieves the contracting parties from the fulfillment of their respective
obligations during the pendency of the event
c. It extinguishes the obligation
d. It entitles the creditor to damages
113. D obtained a loan from C amounting to P500,00.00 payable on February 1,

2019. To secure the loan, D mortgaged his car to C. On July 15, 2018, while the car of D
was at the parking lot, the building at the eastern side of parking lot collapsed and all
the cars at the parking lot were totally destroyed. On July 17, 2018, 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
b. Yes, because the security for the obligation was lost without the fault of D
c. No, because the creditor has the right to decide when to demand payment
d. No, because the security for the obligation is already lost even due to fortuitous
event
114. Which of the following executory contracts is not required to be in writing to be

enforceable under the Statute of Fraud?
a. Contract of sale of a condominium unit at a price of P400
b. Contract for a piece of work of a table at a price of P500
c. Contract of guaranty
d. Contract of lease of land for a period of two years at a monthly rental of P300
115. Facultative as distinguished from Alternative obligation

a. If it is impossible to give all except one, that the last one must still be given.
b. The right to choose may be given either to debtor or creditor.
c. Various things are due, but the giving of one is sufficient.
d. If the principal obligation is void, there is no necessity of giving the substitute.
116. The stages of a contract according to the order of their occurrence are? a.
perfection, negotiation and termination
b. conception, consummation and birth
c. conception, birth and termination
d. termination, negotiation and birth
117. To whose benefit is a period presumed to be designated?

a. Of the creditor only c. None of them
b. Of the debtor only d. Of the both creditor and debtor
118. Statement 1. The loss or destruction of the substitute through the fault of the
debtor in a facultative obligation renders him liable to the creditor for damages.
Statement 2. A third person who has an interest in the fulfillment of the obligation can
compel the creditor to accept his payment.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 true
119. On September 12, 2018, S sold under contract to sell a specific car to B without
delivery. On September 15, 2018, S sold again the said car to D under contract of sale
with delivery but without payment of price. On September 17, 2018, B fully paid the
price to S. Which is CORRECT?
a. B has better right over the car than D because he has earlier title.
b. B has better right over the car because he is the first payer of the car.
c. The rule on double sale will not apply because there is no double sale.
d. There is double sale upon payment of the price by B.
120.Daboy, Eloy and Aprilboy bound themselves to deliver the P100,000 worth horse
named “Makisig” to Jay. How will Jay require the fulfillment of the obligation?
a. Proceed against any of the debtors with the other two just reimbursing the
one who made the delivery for their respective shares in the obligation.
b. Go after all of them.
c. Go after Daboy and Eloy.
d. Proceed against Eloy and Aprilboy.
121. The following contract must be in a public instrument for purpose of convenient.
Which is the exception?
a. Repudiation of hereditary right
b. Donation of real property
c. Power to administer property
d. Cession of conjugal partnership of gain
122. Marivic borrowed P5,000 form Chona in February 2016. The debt is evidence by a
promissory note executed by Marivic wherein she promised to pay as soon as she
has money or as soon as possible. Chona has made repeated demands upon
Marivic for payment, but to now no payment has been made. What is Chona’s
remedy?
a. Continue on demanding Marivic to pay until the latter pays her debt
b. Ask the court to fix the duration of the term or period
c. The debt is extinguished due to Marivic’s inability to pay
d. Ask Marivic for a definite date of payment
123.A and B are join debtors of C for P5,000,000. A’s consent was obtained by C thru
fraud. In this case
a. C can collect the entire P5,000,000 from B
b. C can collect the entire P5,000,000 from B but the latter can recover from A
P2,500,000.
c. A is liable only to C for P2,500,000 because he can interpose his defense of
fraud.
d. B is liable to C for his share of P2,500,000.

payable in 50 years at a monthly rental of P10,000 per month. After payment of several
installments totaling P1,200,000, B defaulted in the payment of remaining installments
which resulted to the cancelation of the contract of sale after the lapsing of the grace
period. What is the amount of cash surrender value to be received by B from S as a
result of cancellation?
a. P600,000 b. P900,000 c.P840,000 d.P960,000
125. A offered to sell her house for P500, 000 to B. B could not make up her mind so she
asked that she be given 10 days to decide. A agreed. After 5 days, A raised the price of
the house to P1 million. Assume that B decided to buy the house the following day, can
she compel A to accept the P500,000 price and deliver to her the house?
a. No, there was no acceptance of the original offer.
b. Yes, A cannot change her offer without the consent of B.
c. Yes, there was already a perfected contract of sale.
d. No, because B agreed that A may change her mind later on.
126. Which of the following is correct about relatively simulated contract?

a. the contract is void
b. the parties do not intend to be bound at all
c. the parties hide their true agreement
d. the written contract is different from the agreement of the parties because of
mistake
127. Mara and Clara borrowed P6,000 from Anna, Karen and Nina. In case of active
solidary, how much can Karen demand from Clara if Nina has condoned Mara’s share in
the obligation?
a. P1,000 c. P3,000
b. P2,000 d. P6,000
128. Statement 1. Penal clause, being the product of agreement between the
parties, may not be reduced or mitigated by the courts under all circumstances.
Statement 2. D owes C P20,000.00 to secure the payment of which D pledged a
diamond ring. Subsequently, this ring was voluntarily returned to D by C. the obligation
of D to pay C P20,000. Is impliedly condoned and therefore extinguished.
b. Both are false d. No. 1 is false; No. 2 is true
129. S and B agreed in writing for the sale of authentic Coach bag at a price of
P50,000. At the time of delivery of the bag, S delivered a counterfeited replica bag.
What is the remedy available to B?
a. File an action for damages because A is guilty of incidental fraud or dolo
incidente.
b. File an action for annulment for contract because S is guilty of causal fraud which
vitiated B’s consent.
c. File an action for declaration of nullity because the subject matter is illegal.
d. File an action for rescission of contract because it is intended to defraud creditor.
130. 1st statement – The debtor of a specific thing cannot compel the creditor to
receive a different one, although the latter may be on the same value as, or more
valuable than that which is due.
2nd statement – Whoever pays for another’s debt may demand from the debtor what he
has paid.
a. Both statements are false. c. First false, second true.
b. Both statements are true. d. First true, second false.
131. Which of the following statement about cause is not correct?

a. Contract without cause is void
b. Statement of a false cause in contract shall render them void
c. Although the cause is not stated in the contract, it is presumed that it exists and is
lawful
d. When the motive of one contracting party is contrary to law, the contract is void
132. Mara and Clara borrowed P6,000 from Anna, Karen and Nina. In case of passive
solidarity, how much can Karen demand from Clara if Nina has condoned Mara’s share
in the obligation?
a. P1,000 c. P3,000
b. P2,000 d. P6,000
133. Reformation of the instrument is the proper remedy, when, there having been a
meeting of the minds of the parties to a contract, their true intention is not expressed in
the instrument purporting to embody the agreement on the following reason, except?
a. Mistake c. Accident
b. Fraud d. Undue influence
134. 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
mentioned in the petition
c. 1/3 of the creditors voting to unite upon the same proposition and the claims
d. 2/3 of the creditors voting to unite upon the same proposition and the claims
135.1st statement – Cession in payment is commutative and governed by the law on

sales.
2nd statement – The delivery to and acceptance by the creditor of a certified cashier’s
check produces payment of the debtor’s obligation.
a. 1st statement is true, 2nd statement is false.
c. 1st statement is false, 2nd statement is true.
d. Both statements are true.
136. When in order to wrest consent, serious or irresistible force is employed.

a. Intimidation c. Undue influence
b. Violence d. Fraud
137. On April 25, 2019, Darren promised to deliver to Karlos either a goat, a hen, or a
dog on May 5, 2019. The right to choose was give to Karlos. After a typhoon, Darren lost
without his fault the goat and the hen. Two days later, the dog died after Darren fed it
with poison. What can Karlos choose to be delivered when May 5, 2019 comes?
a. Price of a goat c. Price of a dog
b. Price of a hen d. Nothing
138. A obliged himself to pay B P500,000 on May 31, 2019, A paid B on May 31, 2018
believing thatvthe obligation was already due and demandable. How much may A
recover from B on July 31, 2019?
a. The principal of P500,000 plus the legal interest for one year
b. The principal of P500,000 plus the legal interest for one year and two months c.
Legal interest for one year
d. Legal interest for one year and two months
139. A applied for a life insurance with Sun Life Company. During the medical
examination, A sent his healthy twin brother. Based on the result of the medical
examination, Sun Life Company approved the life insurance applied by A. What is the
remedy available to Sun Life Company upon discovery of the substitution?
a. File an action for damages because A is guilty of incidental fraud or dolo
incidente.
b. File an action for annulment for contract because S is guilty of causal fraud
which vitiated Sun Life’s consent.
c. File an action for declaration of nullity because of want of consent.
d. File an action for rescission of contract because it is intended to defraud
creditor.
140. Mr. X owes Mr. Y P100,000. X knows that on maturity date, he will not be able
to pay Y, and in order to prevent attachment of his property, X, before maturity if his
debt, executed a contract pretending to sell to Mr. Q his property. Which of the
following statements is not correct?
a. The contract is not valid for lack of consideration.
b. The contract is binding between X and Q.
c. The contract being simulated and executed to defraud Y is void.
d. Mr. Y can seek rescission of the fictitious contract

a. All things which are not outside the commerce of men may be the object of a
contract
b. Future things may be the object of a contract
c. Rights which are intransmissible may be the object of contracts
d. Future inheritance cannot be the object of contract except in cases expressly
authorized by law
142. What is the first rule in application of payment?

a. Debtor has the right to apply
b. Creditor has the right to apply
c. Apply to the most onerous
d. Apply in accordance with the agreement
143.Which of the following is a valid payment?
a. Payment made to the creditor by the debtor after the latter has been judicially
ordered to retain the debt.
b. Payment made to the creditor by the debtor after the latter has been
extrajudicially ordered to retain the debt.
c. Payment made in good faith to nay person in possession of the credit.
d. Payment to incapacitated person when the latter kept the thing delivered
144. Kokoy obliged himself to give to Biboy his brand new fossil watch if the latter
can make a circle that is at the same time a square.
a. The obligation is unenforceable because the condition is immoral.
b. The obligation is void because of the positive impossible condition.
c. The obligation is valid because the impossible condition is negative.
d. The obligation is void, not enforceable.
145. First Statement: It is not the province of the court to alter a contract by
construction of to make a new contract for the parties.
Second Statement: The court’s duty is confined to the interpretation of the one which
they have made for themselves without regard to its wisdom or folly as the court cannot
supply material stipulations or read into the contract words which it does not contain
a. Only first statement is true c. Both statements are true
b. Only second statement is true d. None of the statements is true
146. The following are the requisites before a contract entered into in fraud of
creditors may be rescinded, except:
a. There must be credit existing prior to the celebration of the contract.
b. There must be fraud, or at least, the intent to commit fraud to the prejudice of
the creditor seeking rescission.
c. The creditor cannot in any legal manner collect his credit (subsidiary character
of rescission)
d. The object of the contract must be legally in the possession of a 3 rd person in
good faith.
147. What is the required vote for the declaration of cash dividends?
a. Approval by at aleast majority vote of the board of directors and ratification by
stockholders representing at least 2/3 of the outstanding capital stock
b. Approval by stockholders representing at laest 2/3 of the outstanding capital
stock.
c. Approval by atleast majority vote of the board of directors and ratification by
the stockholders representing at least majority of the outstanding capital stock.
d. Approval by at least majority vote of the board of directors.
148. When the thing improves pending the fulfillment of the suspensive condition
through the expense of the debtor, the improvement shall inure to the benefit of:
a. The party who made the improvement
b. The debtor
c. Partly by the debtor and partly by the creditor
d. The creditor
149. Which of the following statement is not correct about cause? a. Contracts
without cause is void
b. Contracts with unlawful cause is void
c. Contracts with unlawful motive is void
d. Contracts with a false cause is void
150. What is an example of a natural element of a contract?
a. Form c. Consent
b. Warranty against eviction d. Consideration
151. Karen, an art collector, promised Henry, an art student, that if Henry could
obtain certain rare artifacts within two weeks, Karen would pay for Henry’s
postgraduate education. At considerable effort and expense, Henry obtained the
specific artifacts within the two-week period. When Henry requested payment, Karen
refused. Karen claimed that there was no consideration for the promise. Henry would
prevail against
Karen based on
a. Unilateral contract c. Public policy
b. Unjust enrichment d. Quasi contract
152. 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, respectively. The co-owned lot is bounded by farm lots of D and E
with an area of 50 sqaure meters and 75 square meters, respectively. sold his share of
the coowned lot to F. Who shall have the preferred right to repurchase the lot sold by A
to F?
a. B because his share in the co-owned lot is smaller.
b. B and C with an area of 150 square meters and 450 square meters respectively.
c. D because his adjoining rural lot has smaller area.
d. E because his adjoining rural lot has larger area
153. When the obligor binds himself to pay his obligation as soon as “ he is able to ”,
this obligation is:
a. With a term c. Conditional
b. Suspensive d. Resolutor

a. Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract
b. The person making the offer may fix the time, pace and manner of acceptance,
all of which must be complied with
c. Acceptance made by letter or telegram does not bind the offerer except from
the time it came to his knowledge.
d. Contracts entered into during a lucid interval are voidable
155. Along with insane or demented persons and married women of age in cases
specified by law, who else in incapacitated to give their consent?
a. Deaf mutes who know how to write
b. Persons suffering from criminal interdiction
c. Unemancipated minors
d. Competents under guardianship
156. On June 27, 2019 Gokou sent Vegeta a letter offering to sell Vegeta a vacation
home for P15,000,000. On July 2, 2019 Vegeta replied by email agreeing to buy the
home for P14,5000,000. Gokou did not reply to Vegeta. Do Vegeta and Gokou have a
building contarct?
a. No, because Vegeta failed to sign and return Gokou’s letter.
b. No, because Vegeta’s latter was a counteroffer.
c. Yes, because Gokou’s offer was validly accepted.
d. Yes, because Gokou’s silence is an implied acceptance of Vegeta’s letter.
157. What is the required vote for declaration of stock dividends?
a. Approval by at least majority vote of the board of directors and ratification by
stockholders representing at least 2/3 of the outstanding capital stock.
b. Approval by stockholders representing at least 2/3 of the outstanding capital
stock.
c. Approval by at least majority vote of the board of directors and ratification by
stockholders representing at least majority of the outstanding capital stock.
d. Approval by at least majority vote of the board of directors.
158. Unless the law or the stipulation of the parties require another standard of care,
every person obliged to give something is also obliged to take care of it with the proper
diligence:
a. Observing utmost care
b. Observing extraordinary care
c. Of a father of a good family
d. D. Observing ordinary diligence
159. The borrower in a contract of loan or mutuum must pay interest to the lender
a. If there is an agreement in writing to that effect
b. As a matter of course
c. If the amount borrowed is very large
d. If the lender so demands at the maturity date
160. Under this theory, a contract is perfected from the moment the acceptance is
declared or made.
a. Reception theory c. Reception theory
b. Cognition theory d. Expedition theory
161.The following contracts may be ratified, except:
a. A contract of sale involving a future inheritance

b. A contract of loan between a minor and a capacitated person
c. A contract of sale entered into by a guardian on behalf of his ward when the ward
when the ward whom he represents suffered a lesion of more than ¼.
d. A contract of lease between a minor and an insane
servitude?
a. 3 days from the date of contract of sale or from the discovery of burden
d. 40 days from the date of contract of sale or from the discovery of burden
163. When is the creditor entitled to recover damages and interest in addition
to the penalty stipulated?
1st Answer – When the debtor refuses to pay the penalty

2nd Answer – When the debtor is guilty of fraud in the fulfillment of the obligation
a. True, true c. False, false
b. False, true d. True, false
164. The following can demand true and full information of all things affecting
partnership affairs from the other partner, except: a. Any other
b. Partner’s assignee of interest
c. Legal representative of a deceased partner
d. Legal representative of any partner under legal disability
165. Under this theory, a contract is perfected from the moment the acceptance
comes to the knowledge of the offeror.
a. Cognition Theory c. Manifestation Theory
b. Expedition Theory d. Reception Theory
166. Which of the following is not a contract of adhesion?
a. Contract of insurance
b. Warehouse receipts
c. Contract of agency
d. Contract of sale of lots on installment plan
167. D borrowed P3,000 from C. In order to secure the fulfillment of the contract of
loan, D pledged and delivered his specific laptop to C as a collateral for his obligation. At
the maturity date of the loan, D defaulted in the payment of the obligation. At the
maturity date of the loan, D and C voluntarily agreed that the said laptop shall be used
as a full settlement of the secured loan. Which is CORRECT?
a. The said agreement is pactum commissorium and therefore null and void.
b. The contract of loan is extinguished only if the value of the laptop is equal to
the amount of the loan.
c. Ownership of the laptop was acquired by C by reason of pactum commisorium.
d. Ownership of the laptop was acquired by C and the contract of loan is fully
extinguished by dacion en pago
168. This is not necessary in order that compensation may prosper

a. That the two debts are both due
b. Both debts consists in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been
stated
c. That there be a retention or controversy commenced by third persons and
communicated in due time to the debtor
d. That the two debts be liquidated and demandable
169. A contributed P10,000; B contributed P15,000; and C contributed P5,000 to

their partnership. D was an industrial partner. There has been no stipulation regarding
profits and losses. The partnership suffered a P60,000 loss. How should the partners
share in this loss?
a. A should share P20,000; B – P20,000; C – P20,000 and D – nothing.
b. A should share P15,000; B – P15,000; C – P15,000 and D – P15,000.
c. A should share P20,000; B – P30,000; C – P10,000 and D – nothing.
d. Answer not given.
170. On March 5, 1956, A wrote a letter to B offering him the lease of a building. On
March 6, 1956, at 1:00PM, B sent a letter of acceptance which was received by A at
4:00PM that day. But at 2:00PM, A had already sent B a letter of withdrawal of the offer
which was received by B at 5:00PM. When was the contract perfected?
a. At 1:00PM c. At 2:00PM
b. The contract has not been d. At 4:00PM perfected
171 .Noli agreed orally with Troy to sell specific house and lot for P1,000,000. Troy sent
Noli a signed agreement and a down payment of P100,000. Noli did not sign the
agreement, but allowed Troy to move into the house. Before closing of the sale, Noli
refused to go through with the sale. Troy sued Noli to compel specific performance.
Under the provisions of the Statute of Fraud
a. Train will win because Train signed the agreement and Nolan did not object.
b. Nolan will win because the house was worth more than P500.
c. Nolan will win because Nolan did not sign the agreement.
d. Train will win because Train made a down payment and took possession.
172. Which of the following cases is not stayed by the suspension order issued by the
Rehabilitation Court?
a. Civil action to collect unpaid taxes pending before Municipal Trial Court
b. Judicial foreclosure of real estate mortgage involving the land of the
corporation pending before Regional Trial Court
c. Criminal action against the corporate officer pending before Municipal Trial
Court
d. Civil action for damages involving corporate tort pending before Regional Trial
Court
173. Andy deposited with Becky 1,000 sacks of rice valued at P100,000. Andy
however, is indebted to Becky for P100,000 which is already due. When Andy tried to
withdraw the sacks of rice, Becky refuses to deliver, claiming compensation. Is Becky
correct?
a. Yes, both obligation is due
b. Yes, considering that the value of the rice is equal to the amount of Andy’s
obligation
c. No, because there was no stipulation allowing compensation
d. No, because Becky’s obligation arose from contract of deposit
174. A general professional partnership must

a. Pay corporate income tax
b. Have two or more partners
c. Have written articles of partnership
d. Provide for appointment of liability for partnership debts.
175. If a natural obligation is voluntarily fulfilled by a minor who is between 18 and

21 years of age, such fulfillment is;
a. Valid c. Voidable
b. Void d. Unenforceable
176. Anna, who was sixteen years old, purchased an P80,000 computer from Elsa
Electronics. On several occasions Anna returned the computer to Elsa for repairs. Anna
was very unhappy with the computer. Two days after reaching the age of eighteen,
Anna was still frustrated with the computer’s reliability, and returned it to Elsa,
demanding an P80,000 refund. Elsa refused, claiming that Anna no longer had a right to
disaffirm the contract. Elsa’s refusal is
a. Correct, because Anna’s multiple request for service acted as a ratification of
the contract.
b. Correct, because Anna could have transfer good title to a good-faith purchaser
for value.
c. Incorrect, because Anna disaffirmed the contract and the action for annulment
is not prescribe.
d. Incorrect, because Anna could disaffirm the contract at any time.
177. Which of the following is NOT a purpose of a cooperative?

a. To encourage thrift and savings mobilization among the members
b. To generate funds and extend credit to the members for productive and
provident purposes
c. To encourage among members systematic production and marketing
d. To provide housing and real estate to members
178. A and B agreed to contribute their respective farms to form a partnership. A

immediately delivered his land. B waited until after 2 months so he could harvest some
rice in his farm. What may the parties do?
a. B should deliver the land and the rice he harvested.
b. B is allowed to keep his land until a formal demand is made.
c. A should also be allowed to harvest any fruits in his land.
b. A should ask for a rescission of the contract of partnership.
179. Is there any exception to the rule that a mistake of law cannot vitiate consent
rendering the contract voidable?
a. Mutual errors as to the legal effect of an agreement when the real purpose of
the parties is frustrated, may vitiate consen
b. Mistake as to the object of the contract (error in re)
c. Mistake as to person (error in persona)
d. There is no exception
180. Carlos agreed orally to repair Ives’ rare book for P450. Before the work was
started, Ivan asked Carlos to perform additional repairs to the book and agreed to
increase the contract price to P650. After Carlos completed the work, Ivan refused to
pay and Carlos sued. Ivan defense was based on the Statute of Frauds. What total
amount will Carlos recover?
a. P0 c. P450
b. P200 d. P650
181. What is the quantitative threshold before any creditor or group of creditors may
file a petition for 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 higher
b. Claim of at least P500,000 or at least 10% of subscribed capital stock, whichever is
higher
c. Claim of at least P10,000,000 or at least 15% of subscribed capital stock,
whichever is higher
d. Claim of atleast P5,000,000 or at least 20% of subscribed capital stock, whichever
is higher
182. Which of the following is not an obligation of a partner?

a. To give his capital contribution
b. Not to engage in unfair competition with the partnership
c. To pay partnership for damages suffered by it through his fault
d. To inspect and copy partnership books
183. What is the nature of an action for rescission?

a. Primary c. Ordinary
b. Secondary d. Subsidiary
184. The following are rescissible contracts, except:
a. Entrered into by guardian whenever ward suffers damaged more than ¼ value
of property.
b. Agreed upon in representation of absentees, if absentee suffers lesion by more
than ¼ of value of property.
c. Contracts where fraud is committed on creditor (accion pauliana.).
d. d.Contracts entered into by minors.
185. Which of the following is not an element of criminal violation of Batas
Pambansa Bilang 22 for issuance of worthless checks?
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 have sufficient funds in or credit with the drawee bank for the payment of
the check in full upon its presentment
c. There must be intent to commit fraud upon the issuance worthless check
d. There must be subsequent dishonor of the check by the drawee bank for
insufficiency of funds or creditor dishonor for the same reason had not the
drawer, without any valid cause, ordered the bank to stop payment
186. A contract where consent is given through undue influence:
a. Voidable c. Unenforecable
b. Rescissible d. Inexistent
187. A is the capitalist partner and B industrial partner. A engaged personally in the
same kind of business the partnership is engaged in:
a. If there are losses, the partnership will bear the losses.
b. If there are profits, the profits will shared by A and the partnership.
c. If there are profits, A will give the profits to the partnership.
d. A will be excluded from the partnership and pay damages.
188. What is the period of prescription for an action for annulment of a voidable
contract?
a. 5 years c. 4 years
b. 6 years d. 10 years
189. D asked C if the latter can grant him laon of P50,000.00 payable in one year plus
12% interest and C nodded his head. The contract of loan is in the stage of:
a. Negotiation c. Consummation
b. Perfection d. Termination
190. What is prescriptive period provided by law for Cooperative Development
Authority to decide on applications for registrations as a prospective cooperative or to
act on the original articles of cooperation submitted by the founders of the prospective
cooperative?
a. Within a period of 60 days c. Within a period of 20 days
b. Within a period of 30 days d. Within a period of 10 days
191. Judiel a minor, represented by her legal guardian, entered into a contract of sale
with Angela who is only 16 years old. The contract is:
a. Void c. Voidable
192. A, B and C all are capitalist partners form a partnership and agree to have a total
contributed capital of P30,000. However, the partners failed to agree as to the extent of
their respective share in the capital contribution. In this case, which of the following
statement is not correct:
a. A, B and C must contribute P10,000 each to the partnership.
b. If A, B and C failed to stipulate on how to distribute profit and loss, the profit and
loss will be distributed equally between them.
c. The partnership contract is void because there is no agreement as to the capital
contribution of each partner.
d. If A, B and C mutually agreed that partner A will be excluded from the share in the
losses, such agreement is void.
193. X, of age, entered into a contract with Y, a minor, X knew and the contract
specifically stated the age of Y. May X successfully demand annulment of the contract?
a. No, the annulment will prejudice the interest of the minor
b. No, the party who has capacity cannot allege the incapacity
c. Yes, since Y is a minor, the contract is voidable
d. Yes, as long as Y joins X in asking for annulment
194. On September 3, 2018, D requested for a loan of P2,000.00 from C and he offered
the pledge his ring as security for the loan. C granted his C handed the amount of
P2,000.00 to D and on September 6, 2018, D delivered his ring to C. Which of the
following statements is correct?
a. The contract of loan between them was perfected when C accepted the offer of D
on September 3, 2018
b. The contract of loan was perfected when c gave the money to D on September 5,
2018
c. The contract of pledge was perfected when C gave the money to D on September
5, 2018
d. Both contracts of loan and pledge were perfected only on September 6, 2018
195. . It is a sum of money paid, or anything delivered upon the making of a contract
for the sales of goods to blind the offer, the deliverry and acceptance of which is makes
the final assent of both parties to the contract
a. Option money c. Discount
b. b.arras d. d.deposit
196. Rhonamae, 16 years old, sold to Pauline, 17 years old, a diamond ring without
the consent of their parents or guardians in a public instrument. The contract is:
a. Void c. Valid
197. Founders’ shares classified as such in the articles of incorporation may be given
certain rights and privileges not enjoyed by the owners of other stocks, provided that
were the exclusive right to vote and be voted for in the election of directors is granted,
it must be for a limited period
a. not to exceed one(1) years b) no to be exceed three(3) years
c) not to be exceed five(5) years d) not to be exceed ten (10) years
198. A and B entered into a verbal contract whereby A agreed to sell to B his only
parcel of land for P10,000 and B agreed to buy at the aforementioned price. B went to
the bank withdrew the same amount and returned to A for the consummation of the
contract. A, however had changed his mind and refused to go through with the sale.
Will an action by B against A for specific performance prosper?
a. No, it is not evidenced by anything it writing properly signed by A.
b. No, A and B must seek to resolve the dispute first before going to court
c. Yes, because B already withdrew the money from the bank
d. Yes, A has already agreed with B which made the agreement binding to both
parties
199. Annulment is not a proper remedy under the following; except:

a. Simple mistake of discount
b. Mutual error as to the legal effect of an agreement when the real purpose of
the parties is frustrated.
c. When the true intention of the parties is not expressed in the instrument by
reason of fraud.
d. Mistake as to the identity which is not the principal cause of the contract
200. What is the voting requirement for registration or formation of an electric

cooperative with Cooperative Development Authority ?
a. At least 20% of all members in good standing
b. At least 25% of all members in good standing
c. At least 5% of all members in good standing
d. At least 10% of all members in good standing
201. Buknoypromised to give his Toyota Altis car with plate no. AAA 111 to Bosyo.
Before actual delivery but after Bosyo demanded for the same, the car was lost through
an accidental fire. Which of the following is correct:
a. Buknoy’s obligation to give his car to Bosyo is extinguished without any liability
at all.
b. Bosyo is not allowed to recover from A.
c. Bosyo has no right to bring an action against A because the cause of the lost is a
fortuitous event
d. Buknoy is obliged to give Bosyo an equivalent value of the car plus damages
202. Treasury shares are shares of stock which have been issued and fully paid for,
but subsequently reacquired by the issuing corporation by purchase, redemption,
donation or through some other lawful means. Such shares may again be disposed of
for a
a. Reasonable price fixed by the board of director subject to approval by atleast
two third of the outstanding capital stock.
b. Reasonable price fixed by the stockholders.
c. Reasonable price by the board of directors.
d. Price not less than par value.
203. Donald verbally leased his house and lot to Barack for 2 years at a monthly
rental of P5,000 a month. After the first year, Donald demanded a rental of P10,000
claiming that due to the energy crisis, with the sudden increase of the price of oil, which
no one expected, there was also a general increase in prices. When Barack refused to
vacate the house, Donald brought an action for ejectment. Donald denied that they had
agreed to lease for 2 years. Is there a contract of lease?
a. Yes, any contract of lease does not need to be in writing
b. Yes, the Statute of Frauds do not apply since the contract herein is partially
consummated
c. No, absent any written contract, a lease cannot be established
d. No, since the lessor denies the lease, it is conclusive
204. In a written contract of sale between S and B the true intention of the parties
was not incorporated due to the mistake of S but where B is innocent. Assume that
there was a meeting of the minds between S and B. who can bring the action for
reformation?
a. B only c. . Both S and B
b. S only d. Neither S and B
205. C mortgage his car to B for P200,000. C failed to pay his obligation. B sold it at a
public auction for P180,000. Can B recover the deficiency?
a. Yes, Even without stipulation
b. Yes, only if there is stipulation
c. No, even if there is stipulation
d. No unless there is stipulation
206. From the perfection of the contract of sale, the fruits pertain to:
a. Vendee c. Vendor
b. Oblige d. Obligor
207. Which of the following complies with the legal requirements for incorporation?
Authorized Subscribed Paid-up
capital stock capital stock capital
a. P3,000,000 P700,000 P300,0
00
b. P 700,000 P400,000 P
90,000
c. P2,400,000 P600,000 P150,0
00
d. P 64,000 P 16,000 P
4,000
208. First statement: Sale is not a mode of acquiring ownership
Second Statement: Delivery is the operative mode that transfers ownership
a. Only the first statement is true c. None of the statement is true
b. Only the second statement is d. Both statements are true true
209.The borrower in a contract of loan or mutuum must pay interest to the lender?
a. If there is agreement in writing
b. If there is agreement either oral or in writing
c. If the amount involved a large amount of money.
d. If the lender made a demand at the maturity date.
210. Unless otherwise provided in the by-laws of the Electric Cooperative, what is
the quorum necessary for holding a valid meeting of the general assembly in an Electric
Cooperative?
a. At least 25% of all the members entitled to vote ordinary
b. At least majority of all the members entitled to vote
c. At least 5% of all the members entitled to vote
d. At least ¾ of all the members entitled to vote
211. A promised to give his car to B or his motorcycle as a substitute. Which of the
following is correct:
a. B can choose to elect either the car or the motorcycle.
b. If A will choose to give the motorcycle the obligation will cease to be facultative
c. Of the car will be lost through a fortuitous event, the obligation will be
extinguished.
d. The loss or deterioration of the substitute will render A liable although the
cause of the lost is his fault or negligence.
212. The following act requires meeting of stockholder whether regular or special
meeting, except?
a) Amendment of articles of incorporation
b) Extension of corporate term
c) Decrease of capital stock
d) Increase of bonded indebtedness
213. If spouses are legally separated, a sale by one spouse to another is:
a. Unenforceable c. Voidable
b. Void d. Valid
214. Which of the following can generally be assigned, be attached, be subject to
legal support?
a. Rights in specific partnership property
b. Interest in a partnership
c. Right to participate in the management
d. Right to inspect partnership book
215. What is the prima facie evidence that the drawer of the issuer of check has
knowledge that check he issued has insufficient fund?
a. 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 sixty (60) days from the date of the check.
b. The making drawing and issuance of a check payment of which is refused by the
drawee because of in insufficient funds in or credit with such bank, when
presented within thirty (30) days from the date of the check.
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 from the date of the check.
d. The making. drawing and issuance of a check payment of which is refused by
the drawee because of insufficient funds in of credit with such bank, when
presented within ninety (90) days from the date of the check
216. A unilateral promise to buy or to sell which was not accepted by the offeree.
This produces no judicial effect and creates no legal bond
a. Solicitation c. Policitacion
b. Expromission d. Delegacion
217. It is a publicly announced intention by a person acting alone or in concert with

other persons (hereinafter referred to as “person”) to acquire outstanding equity
securities of a public company, or outstanding equity securities of an associate or
related company of such public company which controls the said public company.
a. Tender offer c. Offer to purchase
b. Publication d. Answer not given
218. Where the price of the thing sold cannot be determined and the thing has been
delivered to and appropriate by the buyer, how much does the buyer have to pay?
a. Price given by the seller c. Reasonable price
b. Price given by the buyer d. Nothing
219. Statement 1: A partner appointed as manager in the articles of partnership may
be removed with or without cause
Statement 2: A limited partner can contribute money or property to the common
fund
220. When shall the by-laws of a Cooperative be submitted to the Cooperative
Development Authority?
a. Within 30 days from the issuance by Cooperative Development Authority of
Certificate of Registration
b. Within 20 days from issuance by Cooperative Development Authority of
c. Within 10 days from issuance by Cooperative Development Authority of
d. At the same time of submission of Articles of Cooperation Development
Authority
221.I. The vendee is bound to accept delivery and to pay the price of the thing sold at
the time and place stipulated in the contract.
II. The very essence of a contract of sale is the transfer of ownership in exchange
for a price paid or promised.
222. Statement I: Corporate shares cannot be transferred without the consent of the
other stockholders. Statement II: One of the advantages of a partnership is the
transferability of partner’s interest to third person
c. Statement I is true, but statement II is false.
d. Statement I is false, but statement II is true.
223. What distinguishes earnest money from option money?
a. If there is earnest money, in case of non-payment, there can be an action for
specific performance only, while if there is option money, an action for specific
performance or rescission can be filed by the injured party
b. If there is earnest money. title passP7OUTRWes to the buyer upon delivery of
the thing sold; while if there is option money, ownership is reserved to the
seller and is not to pass until full payment
c. The earnest money is a distinct consideration for an option contract; while the
option money is part of the purchase price
d. If there is earnest money, the would-be-buyer is not required to buy, while if
there is option money, the buyer is not bound to pay the balance
224. 1st Statement: In a universal partnership where its nature is not specified, the
presumption is that a universal partnership of all profits only is formed.
2nd Statement: when the contribution to the partnership consists of personal property
amounting to P1,000,000 and real property amounting to P20,000 and the contract is
entered verbally, the partnership contract is void
a. Both statements are true
b. Both statements are false
c. 1st statement is true and 2nd statement is false
d. 1st statement is false and 2nd statement is true
225. What is the evidence or defense that may be used by the issuer of a worthless
check to destroy the prima facie evidence that he has knowledge of insufficiency of a
fund of the check?
a. The maker or drawer pays the holder thereof the amount due of such check
within (10) banking days after receiving notice that such check has not been
paid by the drawee.
b. b The maker or drawer pays the holder thereof the amount due threon, or
makes arrangement for the payment in full by the drawee of such check within
(15) banking days after receiving notice that such check within (15) banking
days after receiving notice that such check has not been paid by the drawer .
c. The maker or drawer pays the holder thereof the amount due thereon, or
maker arrangement for payment in full by the drawee of such check within (5)
banking days after receiving notice that such check has not been paid by the
drawee.
d. The maker or drawer pays the holder thereof the amount due thereon, or
makes arrangement for the payment in full by the drawee of such check within
(3) banking days after receiving notice that such check has not been paid by he
drawee
226. It is an act or means by virtue of which efficacy is given to a contract which
suffers from vice of curable nullity.
a. Rescission c. Ratification
b. Prescription d. Annulment
227. “The majority vote of its board of directors and by the vote or written assent of
the stockholders representing at least two-thirds of the subscribed capital stock of the
corporation” is
a. For declaration of stock dividends.
b. For adoption of any by-law or by-laws.
c. To invest its corporate funds in any corporation or business, or for any purpose
other than the main purpose for which it was organized. d. To amend the
articles of incorporation.
228. It refers to an unaccepted unilateral promise to buy or sell

a. Negotiation c. Policitation
b. Preparation d. Generation
229. Statement 1: If the partner is the sole manager of the partnership and he
associate another person with him in his share in the partnership, the person associated
automatically becomes a partner in the partnership.
Statement 2: All capacitated persons can enter into a contract of universal partnership.
a. Both are true c. No.1 is true; No. 2 is false
230 Which of the following TRUE OR FALSE?

I. In alternative obligation, the choice belongs only to the debtor, while in
facultative obligation, the choice may be given to the creditor
II. In alternative obligation, there is only one obligation, but there is a substitute,
while in facultative obligation, there are many obligations.
III. In alternative obligation, obligation is extinguished by the fulfillment of only one
of the obligation, while in facultative obligation, the obligation is extinguished by the
fulfillment of the principal obligation when there is no substitution yet.
a. False,False,True c. True,False,True
b. True,True,False d. False,True,True
231. Three (3) of the following contracts are void. Which is not?
a. Contract in writing contemplating and asking for impossible service.
b. Oral authority given to an agent in sale of land.
c. Oral partnership agreement where immovable property is contributed.
d. Oral partnership agreement when capital is more than P3,00
232. Which of the following is not a correct statement?
a. By laws adopted after incorporation must be made within one (1) month after
receipt of official notice of the issuance of its certificate of incorporation by the
Securities and Exchange Commission.
b. The by-laws shall be effective only upon the issuance by the Securities and
Exchange Commission of a certification that the by-laws are not inconsistent
with law.
c. By-laws adopted and filed prior to incorporation must be approved and signed
by majority of the incorporators and submitted to the Securities and Exchange
Commission, together with the articles of incorporation.
d. In a non-stock corporation, the owners of two-third(2/3) of the members may
delegate to the board of trustees the power to amend or repeal any by-laws or
adopt new by-laws.
233. It refers to an agreement that dominion is reserved in favor of the seller until
the full payment of the purchase price.
a. Pactum sun servanda c. Pactum commissorium
b. Pactum reservati dominii d. Pactum leonine
234. Statement 1: The conveyance of the whole interest of a partner in the
partnership of itself dissolves the partnership.
Statement 2: The contractual liability of the partners to third persons is joint and
subsidiary.
a. Both are true
b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true
235. In three of the following defective contracts, ratification cleanses the defects.
Which is the exception?
a. a Both parties are incapable of giving consent ?
b. c Sale of piece of land through an agent and the authority is given orally
c. Sale of immovable property of interest orally entered into
d. Contracts entered into by a person who has been given no authority
236. A, B, and C solidarily owe X and Y P3,000. X remitted the entire obligation in
favor of A. The effect is:
a. The obligation is not extinguished until A collects from B and C.
b. The obligation is not yet extinguished until Y is paid by X and Y’s share of the
credit.
c. A cannot recover from B and C because remission in his favor extend to the
benefit of B and C.
d. A can recover from B and C their respective share of the debt
237. Which of the following is not correct about director?

a. A director must be an owner of at least one share of stock.
b. A person is disqualified to become a director if he is convicted by final judgment
of an offense punishable by imprisonment for a period exceeding six (6) years.
c. A juridical person like partnership is allowed to be a director.
d. The number of directors of Stock Corporation is not less than five but no more
than fifteen.
238. Who bears the risk of loss and deterioration of the thing sold before perfection?
a. Seller c. Both the seller and buyer
b. Buyer d. None
239. A, B and C from ABC partnership and contributed the following: A contribute
Cash amounting to five hundred thousand pesos (P500,000); B contribute cash of one
hundred thousand pesos (P100,000) and two hundred thousand pesos (P200,000) worth
of inventory; and C contribute fifty thousand pesos (P50,000) and one hundred fifty
thousand worth of office supplies. The partners agree that the profit and loss
distribution will be determined by X their common friend. On June 1, 2018 A, B and C
went of the place of X and ask him to determine the profit and loss distribution. X
however asks to give him one week to determine the profit and loss distribution. On
June 8, 2018, X finally determines the distribution of profit and loss as follows: A 20%; B
30% and C 50%. X immediately informed A and B on the same day but C was notified
only on June 11, 2018. On September 10, 2018 C wan to impugn the determination of X
in the distribution of profit and loss because he alleged that the same is manifestly
inequitable. In this case:
a. C can impugn the determination of X because the period to impugn the
determination of third person id until September 11, 2018
b. C can impugn the determination of X because the period to impugn the
determination of third person is until December 11, 2018
c. C can no longer impugn the determination of X because the period to impugn
the determination of third person is until September 9, 2018 only
d. C can no longer impugn the determination of X because the period to impugn
the determination of third person is until September 8, 2018 only
240. On January 1,2000, Vendor Inc. sold a specific car to Buyer Inc. with payment to
be made after two months. The parties agreed that Vendor Inc. Shall deliver the car to
Depositary Inc. in behalf of Buyer Inc. Depository Inc. has the obligation to preserve the
said car until Buyer Inc. obtains the same. On January 2, 2000, Vendor Inc. actually
delivered the car to Depository Inc. obtains the same. On January 3,2000, the car was
destroyed by a storm while it was in Depositary`s possession. Who shall suffer the risk
of loss?
a. Buyer Inc. because it is already the owner at the time of loss.
b. Depository Inc. even it exercised ordinary diligence to prevent or minimize the
loss during the storm
c. Vendor Inc. because actual possession has not yet been given to Buyer Inc.
d. Vendor Inc. because non-payment of the price will result to non-transfer of
ownership to Buyer Inc.
241. Which of the following statements is false?

a. A period always refers to the future.
b. The debtor losses the right to the period if he does not give the security he
promised to the creditor
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 prestations shall be
delivered belongs to the creditor, unless expressly given to the debtor.
242. Which of these is not an essential element of a defacto corporation?

a. That there must be a law under which corporations may incorporate.
b. That there must be strict or substantial compliance with this law.
c. That there must be belief in good faith that it is a corporation.
d. That there must be a use or exercise of corporate powers.
243. It refers to an action to procure the return of a part of the purchase price paid
by the vendee to the vendor by reason of such defect
a. Accion quanti minoris c. Accion pauliana
b. Accion redhibitoria d. Accion quanti majoris
244. W, X, and Z are the general partners, who contributed P500,000.00,

P300,000.00, P100,000.00 and services to the common fund, respectively. After
dissolution the partnership suffered losses amounting to P600,000.00. how much shall
be the share of Z in the losses?
a. Equal with the capitalist partners
b. According to agreement, if there is any
c. Just and reasonable
d. None
245. . In the absence of agreement as to sharing of partnership losses, how shall the
losses be distributed to the partners?
a. It should be divided equally among the capitalist partners.
b. b It should be divided proportionately to the capitalist partners in accordance to
the capital contribution ratio
c. c It should be Divided in accordance with the profit agreement among capitalist
partners.
d. d It should be divided equally to all partners including the capitalist partners
246. Which of the following contracts is not unenforceable?

a. That where both parties are incapable of giving consent
b. That entered into during state of drunkenness
c. That which is entered into the name of another person by one who has been
given no authority or legal representation
d. That which does not comply with the Statute of Frauds.
247. Statement I: Majority of an Incorporators must be a citizen of the Philippines.

Statement II: Corporate officer are those who are identified as such in the Corporation
Code, the articles of incorporation or the By-laws of the corporation.
d. Statement I is false, but statement II is true.
248. The remedies available under Recto Law (Article 1484) are:
a. Alternative only c. Exclusive only
b. Alternative and exclusive d. Cumulative only
249.Statement 1: A person may become both a limited and an industrial partner in the
same limited partnership.
Statement 2: A partnership has an interest in specific partnership property which he can
assign to anybody, according to his will or discretion.
c. No. 1 statement is true; No. 2 statement is false
d. No. 1 statement is false; No. 2 statement is true
250. 30% of the company want to elect 2 directors, while 70% of the company want
to elect 5 directors. Assuming the corporation has 100 shares and the owners of 70%
tried to elect all the 5 directors. How many will be elected from the majority
stockholders (70% of the company) and from the minority stockholders (30% of the
company)?
a. 4 from the majority stockholders and 1 from the minority stockholders
b. 3 from the majority stockholders and 2 from the minority stockholders
c. 5 from the majority stockholders and none from the minority stockholders
d. 2 from the majority stockholders and 3 from the majority stockholders
251. Which of the following is not correct about removal of director?
a. The remaining director may fill up the vacancy in the board if the ground of the
vacancy is due to death provided the remaining director still constitute quorum.
b. A director can be remove by at least 2/3 vote of the outstanding capital stock.
c. A director may be remove by majority vote of the directors if the by-laws
expressly provided otherwise.
d. If the ground of vacancy of director is due to removal from office, only the
stockholders can fill up the vacancy in the board.
252. A obliged himself to give B a car if B places among the top ten in the CPA Board
Exam. Subsequently, they agreed that A will give B the car if B merely passes the CPA
Board. This is an example of:
a. Compensation c. Payment
b. Confusion d. Novation
253. First statement: The pledgor has the right to demand return in case of
reasonable grounds to fear destruction or impairment of the thing without the
pledgee’s fault subject to the duty of replacement
Second Statement: The pledgor has the right to bid and be preferred at the public
auction
a. Only first statement is true

b. Only second statement is true
c. Both statements are true
d. None of the statements are true
254. Larry, a partner in JGS, a general partnership, wishes to withdraw from the
partnership and sell Larry’s interest to Wally. All of the other partners in JGS have
agreed to admit Wally as a partner and to hold Larry harmless for the past, present, and
future liabilities of JGS. As a result of Larry’s withdrawal and Wally’s admission to the
partnership, Wally
a. Acquired only the right to receive Ward’s share of JGS profits.
b. Has the right to participate in DSJ’s management.
c. Is personally liable for partnership liabilities arising before and after being
admitted as a partner.
d. Must contribute cash or property to JGS to be admitted with the same rights as
the other partners.
255. Which of the following claims shall be paid last in the liquidation of general
partnership ?
a. a Those owing to partners in respect of profits .
b. Those owing to the creditors other than partners
c. c Those owing to partners in respect of capital
d. Those owing to partners other that capital and profits
256. 1st statement – Failure to disclose facts, when there is a duty to reveal them
constitutes fraud.
2nd statement – The usual exaggerations in trade, when the other party had an
opportunity to know the facts, are not in themselves fraudulent.
a. Both statements are false c. Both statements are true
b. First false, second true d. First true, second false
257. Compensation other than per diems may be granted to directors of a
corporation
a. By the vote of the stockholders representing at least a majority of the
outstanding capital stock at a special stockholders’ meeting only specifically
called for that purpose.
b. By the vote of the stockholders representing at least a majority of the
stockholders at a regular or special stockholders’ meeting.
c. By the vote of the stockholders representing at least a majority of the
outstanding capital stock at a regular or special stockholders’ meeting.
d. By the vote of the stockholders representing at least two third (2/3) of the
outstanding capital stock at a regular or special stockholders’ meeting.
258. If the pledgor or mortgagor is not the owner of the thing pledged or mortgaged,
the contract of pledge or mortgage is:
a. Voidable c. Valid
259. S, H and E formed a partnership with S and H as general partners. E was the
limited partner. They failed to agree upon a profit-sharing plan but put in capital
contributions of P120,000, and P150,000, respectively. At the end of the first year how
should they divide the profits?
a. S and H each receive half and W receives none.
b. Each of the three partners receives one-third.
c. The profits are shared in proportion to their capital contribution.
d. None of the above.
260. On January 1, 2001, M issued and delivered an order negotiable promissory

note to P with the amount in P 10,000. P altered the amount of the note to P with the
amount into P 100,000. P generally indorsed and delivered the note to A who
subsequently generally indorsed and delivered the note to B, a holder in due course.
Which of the following statements is CORRECT?
a. The instrument is not negotiable because of the material alteration
b. B can collect P100,000 from M because material alteration may not be set up
against a holder in due course.
c. B can collect P10,000 from M and he may go after P or A for the balance of
P90,000
d. B can only go after P or A but not from M.
261. Which of the following is enforceable?

a. Oral contract of sale of a land for P10,000,000
b. Oral contract if sake if a building for a price of P1,000,000
c. Oral contract of loan for P10,000
d. Oral agreement made in consideration of marriage
262. Which of the following is not correct about compensation of director or

trustee?
a. The director shall no receive any compensation, as such directors, except for
reasonable pre diems.
b. I f compensation is granted to director, the total yearly compensation of
directors, as such directors shall not
c. exceed ten (10%) percent of the net income before income tax of the
corporation during the preceding year.
d. The law presumes that the service of the directors, as such director is free.
e. The compensation other than the per diems may be granted to the directors by
the vote of the majority of stockholders at a regular or special stockholders’
meeting.
263. What distinguishes pledge from mortgage?
a. The thing pledged must be placed in the possession of the creditor or of a third
person by common agreement
b. Pledge is an accessory contact
c. The pledgor must be absolute owner of the thing pledged
d. The pledgor must have free disposal
264. H and G formed H Limited Partnership. H put in a capital contribution of

P20,000 and become a general partner. G put in a capital contribution of P10,000 and
became a limited partner. During the second the year of operation, a third party filed a
tort action against the partnership and both partners. What is the potential liability of H
and G respectively?
a. P20,000 and P0.
b. P20,000 and P10,000.
c. Unlimited liability and P0.
d. Unlimited liability and P10,000.
265. Which of the following matters must be provided in the Articles of Incorporation
of the Corporation?
a. a Denial of preemptive right
b. b Creation of executive committee
c. c prevision for compensation of directors
d. d Entries to be made in the stock and transfer book
266. Sonia obliged herself to deliver a specific Honda civic car to Nimfa, or instead
pay the sum of P2 million. Which must be delivered by Sonia?
a. The car c. The P2 million
b. Both A and B d. Neither A or B
267. The number of the Board of Trustees of a non-stock nonprofit educational

institution should be
a. five (5) only
b. any number for as long as it is not less than five (5) and no more than eleven
(11)
c. any number in multiples of five (5), for as long as it is not less than five (5) no
more than fifteen (15)
d. not less than five (5) nor more than ten (10) in multiples of five (5) 268. If the
mortgage is not recorded in the Registry of Property, it is:
a. Voidable c. Binding between the parties
269. A, B and C formed a limited partnership with C becoming the only limited
partner. Capital contributions from these partners were P20,000, P40,000, and P50,000,
respectively. C, however, helped in the management of the partnership and H, who had
several contracts with the partnership, thought C was a general partner. H won
several breach of contract actions against the partnership and the partnership does not
have sufficient funds to pay these claims. What are the potential liability for A,
B, and C?
a. Unlimited liability for all three partners.
b. Unlimited liability for A and B; P50,000 for C.
c. Up to each partner’s capital contribution.
270. ABC Limited Partneship are formed by A and B as general partners and C as
limited partner. ABC Limited Partnership became bankrupt and unpaid liabilities to
partnership creditors amounted to P30,000. Which is CORRECT ?
a. A,B and C are liable to the partnership creditors in the amount of P10,000 each
but C may ask for reimbursement of P5,000 each from A and B.
b. A and B are the only persons liable to the partnership creditors in the amount of
P15,000 each.
c. The partnership creditors may collect P30,000 from either A or B.
d. The partnership creditors may collect P30,000 from either A or B or C.
271. Dok sold to Leng a fake Rolex watch on March 5, 2017. The watch was delivered
to Leng on March 26, 2017. On April 5, 2017, Leng discovered that the watch she bought
form Dok was an imitation. Under the law, Leng has 4 years to annul the sale as a
voidable contract. May Leng ask for the annulment of the contract on March 26, 2018?
a. No more because the action has already prescribed on March 5, 2018.
b. Yes because the period for prescription will have to be reckoned from April 5,
2017.
c. No because Y should be considered to have been in estoppel in buying the
watch.
d. Yes because the prescription starts from the date of delivery of the watch,
March 26, 2017
272. X subscribed 10,000 shares in the capital stocks of AAA Corporation. He paid
50% of the 10,000
shares. X asked the Corporate Secretary to issue him the corresponding stock certificate
representing the 50% of what he already paid. The Corporate Secretary of the
corporation refused. Was the Corporate Secretary correct?
a. The Corporate Secretary is correct because the Corporation Code provides that
no certificate of stock shall be issued to a subscriber until the shares as subscribed have
been fully paid.
b. The Corporate Secretary cannot refuse because a Stock Certificate can be
issued corresponding to the percentage of shares which were paid.
c. The Corporate Secretary cannot refuse because a Certificate of Stock can be
issued provided it is indicated in the Certificate the actual percentage of what has been
paid.
d. The Corporate Secretary cannot refuse because it is his legal duty to issue a
stock certificate corresponding to the number of shares actually subscribed regardless
of the actual payment.
273. When a chattel mortgage is entered into as security for the purchase of
personal property payable in installments no deficiency judgment can be asked. Any
agreement to the contrary shall be:
a. Void c. Valid
274. H and G formed H&G Limited Partnership. H put in a capital contribution of
P20,000 and became a general partner. G put in a capital contribution of P10,000 and
became a limited partner. During the second year of operation, a third party filed a tort
action against the partnership and both partners. What is the potential liability of H and
G respectively?
a. P20,000 and P10,000.
b. Unlimited liability and unlimited liability.
c. Unlimited liability and P0.
d. Unlimited liability and P10,000
275. What is the period for the submission of the by-laws of the corporation in case
it is not attached to the articles of incorporation submitted to Securities and Exchange
Commission?
a Within 30 days from the submission of articles of incorporation to the securities
and Exchange Commission
b Within 20 days from the issuance of Securities and Exchange Commission of the
Certificate of Incorporation
c Within 15 days from the end of the fiscal year of the corporation
d Within 30 days from the issuance of security and Exchange Commission of the
Certificate of Incorporation
276. Choy owes Chay P1 million with Cheng as guarantor. Choy paid P300,000 leaving
P700,000 unpaid. Ching without the knowledge of Choy paid Chay P700,000. As a result:
A. The obligation is extinguished but Ching cannot recover from Choy instead he should
go after Cheng.
B. The obligation is extinguished but Ching can recover only P700,000 from Choy
and if Choy cannot pay, Ching should demand payment from Cheng.
C. The obligation is not extinguished as the payment is without the consent of
Choy.
D. The obligation is extinguished, but Ching can recover only P700,000 from Choy
and if Choy cannot pay, Ching cannot go after Cheng.
277. The regular meetings of the board of directors or trustees of every corporation
shall be held:
a. Weekly c. Quarterly
b. Monthly d. Annually
278. Solenn borrowed P50,000 from Anne and pledged her ring and bracelet worth
P20,000 and P30,000 respectively to guarantee the payment of the loan. Solenn
partially paid Anne P25,000 and demanded the return of the bracelet. Can Solenn
demand the return of the bracelet?
a. Yes, because Solenn paid atleast half of the loan
b. Yes, because in case of partial payments, the pledgor can choose any of the
several things pledge to be returned
c. No, because Solenn has not yet fully paid the entire loan
d. No, because Solenn paid less than the value of the bracelet
279. Which is NOT an essential requisite of contract of chattel mortgage for its
validity?
a. The mortgagor must be the absolute owner of the personal property
mortgaged must have free disposal of the personal property mortgaged.
b. There must be a secured valid principal obligation and in case of its
nonpayment, the personal property mortgaged may be sold in public auction in
satisfaction of the secured obligation.
c. The chattel mortgage must be properly registered in chattel mortgage registry.
d. The deed of chattel mortgage must be accompanied by affidavit of good faith.
280. The expenses of consignation when properly made, shall be charged against the
a. Parties c. Obligor
b. Government d. Obligee
281. Which of the following statements pertaining to the purpose or purposes of a

stock corporation is incorrect?
a. A stock corporation may have more than one purpose.
b. The purposes, if there are several, must be susceptible of being lawfully
combined.
c. The primary purposes and the secondary purposes may be stated together as
one purpose in all articles of incorporation.
d. The purposes must be lawful.
282. On April 1, 2019, Erwann borrowed P10,000 from Nco payable on April 30, 2019
and pledged a promissory note (“I promise to pay Erwann or norder P15,000 on April
15, 2019” Signed Billy) by indorsing said note to Nico. When the note became due on
April
15, 2019, Nico demanded Billy to pay the note to which Billy complied. How much of the
P15,000 can Nico keep for himself?
a. P5,000 c. P15,000
b. P10,000 d. Nothing
283. A limited partner who takes active part in the management of the firm
becomes: a. A managing partners
b. Liable as general partner
c. A general partner
d. A general partner and a limited partner at the same time.
284 . Which contracts are void ab initio?
I. Those which are relatively simulated.

II. Those whose cause, object, purpose is contrary to law, morals, good customs, public
order or public policy
III. Those whose object is outside the commece of men
IV. Those which contemplate impossible service
V. Those whose consent of a contracting party is vitiated
VI. Those whose cause or object did not exist at the time of the trancaction a. II, III, IV
and VI only
b. I, II, III, IV and V only
c. I, II, III, IV and only
d. II, III, IV, V and VI only
285. Case 1 – A hired B for P10,000 to kidnap C, and he paid B P5,000 in advance.
Before B could kidnap C, A relented and stopped B from performing the contract. The
court may not allow A to recover form B the P5,000 paid in advance.
Case 2 – A, at gun point, compels B to marry him. Since the contract of marriage is
voidable, either A or B has the right to file the action for annulment. Determine
whether:
a. Both cases are false
b. Both cases are true
c. First case is false, second case is true
d. First case is true, second case is false
286. In three of the following corporate proposals, a dissenting stockholder has the
right to surrender his shares of stock to the corporation and demand for the payment of
their fair market value. Which is the exception?
a. Sale, mortgage or disposition of all or substantially all of the corporate assets.
b. Shortening or extending corporate term.
c. Investment of corporate funds in another corporation or business.
d. Entering into management contract with another corporation.
287. Roger borrowed P100,000 from Rafa. To secure loan, Roger mortgaged Novak’s
car worth P200,000. When the loanbecame due, Roger failed to pay. Can Rafa proceed
to the foreclosure of the mortgage over the car?
a. Yes, because Roger failed to pay the loan
b. Yes, provided Rafa notifies Novak first
c. No, because the mortgage over the car was void
d. No, because Rafa must demand payment from Novak first
288. Which of the following is a characteristic of partnership as a contract?
a. Formal c. . Gratuitous
b. innominate d. Preparatory
289. What is the definition of the term insured deposit?
a. It means the amount due to any bonafide depositor for legitimate deposits in an
insured bank as of the date of closure but not exceed Five hundred thousand
pesos (P500,000.00)
b. It means the amount due to any bonafide depositor for illegitimate deposits in
an insured bank as of the date of closure but not exceed Five hundred thousand
pesos (P500,000.00)
c. It means the amount due to any bonafide depositor for legitimate deposits in an
insured bank as of the date of closure but not to exceed one million thousand
pesos (P1,000,000.00)
d. It means the amount due to any bonafide depositor for illegitimate deposits in
an insured bank as of the date of closure but not exceed one million pesos
(P1,000,000.00)
290. Acceptance of an offer made by letter or telegram shall bind the offerer:
a. From the time the offeree accepted the offer.
b. From the time the offeree sent his letter or telegram.
c. Form the time the acceptance came to the knowledge of the offerer.
d. From the time the offerer made the offer
291. Which of the following requires citizenship as a qualification?

a. Corporate Director b. Incorporator
c. Corporate Secretary d. Corporate President
292. Serena borrowed P500,000 from Venus. To secure said loan, Serena mortgaged
her parcel of land in Boracay worth P400,000. Said mortgage was properly annotated to
the tile of the land. Serena later sold the same parcel to Caroline for P300,000. Serena
failed to pay her loan to Venus when it became due and Venus is now planning to
foreclose the mortgage. The land is now worth P200,000. How much does Caroline need
to pay Venus to prevent the foreclose?
a. P200,000 c. P400,000
b. P300,000 d. P500,000
293. Which of the following partnership always have a fixed term?
a. General partnership
b. Limited partnership
c. General professional partnership
d. De jure partnership
294. What is the quantitative threshold for a covered transaction in a casino?

a. Amount exceeding P500,000 per day
b. Amount exceeding P1,000,000 per day
c. Amount exceeding P5,000,000 per day
d. Amount exceeding P50,000 per day
295. Simulation of a contract may be absolute or relative. It is relative when:

a. The parties do not intend to be bound at all.
b. The contract is valid.
c. The parties conceal their true agreement.
d. The parties conceal their true intentions
296. The power of conducting commercial contracts (to increase the business) and
sponsoring athletic contest for employees to keep them in good health or maintain a
hospital for the employees is an example of
a. . Express power. c. . Implied power.
b. . Incidental power. d. Discretionary power.
297. First Statement: Chattel mortgage on shares of stocks needs not be registered in
the stock and transfer book.
Second Statement: Machinery installed by the lessee on the leased premises may be
subjected of a chattel mortgage.
a. Only first statement is true
b. Only second statement is true
c. Both statements are true
d. None of the statements is true
298. Which of the following is (are) true of a limited partnership? I.Limited

partnerships must have at least one general partner.
II. The death of a limited partner terminates the partnership.
a. I only. c. Neither I nor II
b. II only. d. Both I and II
299. N is a dormant partner in ABC partnership that sells home appliances. He has
not made his presence felt for 20 years. N purchased 20 wheelbarrows for ABC
partnership to sell. A, the managing partner became furious with what N did because it
is hard to sell wheelbarrows. What remedy does A have regarding the contract entered
by N?
a. A can just ignore the contract entered by N because it is unenforceable
b. A has no remedy because the contract entered by N is perfectly valid
c. A can ask for declaration of nullity of the contract
d. A can ask for annulment of the contract
300. A and B orally agreed to form a partnership two years from today, each one to
contribute P10,000. If the arrival of the period, one refuses to go ahead with the
agreement, can the other enforce the agreement?
a. Yes, since the agreement is to be enforced after one year from the making
thereof, the same should be in writing to be enforceable.
b. Yes, because the prior agreement was voluntarily made.
c. Yes, because the partnership contract is not governed by the Statute of Frauds.
d. No, because the agreement was merely oral.
301. A corporation commences its existence from the issuance of the certificate of
incorporation, which one is the exception?
a. Close corporation. c. Sole corporation
b. Widely-held corporation. d. Educational corporation.
302. If the instrument provides for payment in Japanese Yen, is it negotiable?
a. Yes, so long as the payment is in Philippine Pesos
b. Yes, money need not be legal tender
c. No, it has to be legal tender
d. No, it has to be in Philippine pesos
303.D, E, F and G formed a general partnership. Their written partnership agreement

provided that the profits would be divided so that D would receive 40%; E, 30%; F, 20%;
and G, 10%. There was no provision for allocating losses. At the end of its first year, the
partnership had losses of P200,000. Before allocating losses, the partners’ capital
account balances were: D, P120,000; E, P100,000; F, P75,000; and G, P11,000. G refuses
to make any further contributions to the partnership.
Ignore the effects of tax law.
After losses were allocated to the partners’ capital accounts and all liabilities were
paid, the partnership’s sole asset was P106,000 in cash. How much would E receive
upon dissolution of the partnership?
a. P37,000 c. P47,500
b. P40,000 d. P50,000
304. It is an exclusive right granted for a product, process or an improvement of a
product or process which is new, inventive and useful. This exclusive right gives the
inventor the right to exclude others from making, using, or selling the product of hius
invention during the 20-year life of this intellectual property.
a. Patent c. Copyright
b. Trademark d. Tradename
305. Which if the following is not void ab initio?

a. Oral partnership agreement where immovable property is contributed.
b. That whose object is outside the commerce of men
c. That whose object did not exist at the time of transaction
d. That which is undertaken in fraud of creditors
306. The distinction between a proxy and a voting trust is that in a voting trust:
a. The trustee has no legal title to the shares of the transferring stockholders.
b. Unless coupled with interest, is revocable at any time.
c. Is not limited to any particular meeting.
307. If the instrument provides for an option to deliver something in lieu of money, it
is negotiable if the option resides with:
a. The maker c. The drawer
b. The holder d. The drawee
308. Partnership as distinguished from co-ownership:

a. It has juridical personality.
b. Created not only agreement of the parties but also by law.
c. Purpose is to make profits.
d. . Profits are divided in proportion to one’s interest
309. It is a protection option, which is designed to protect innovations that are not
sufficiently inventive to meet the inventive threshold required for standard patents
applications. It may be any useful machine, implement, tools, product, composition,
process, improvement or part of the same, That is of practical utility, novelty and
industrial applicability. It is entitled to seven (7) years of protection from the date of
filing, with no possibility of renewal.
a. Patent c. Industrial design
b. Utility model d. Trademark
310. Mr. Pidol, a former government employee, suffered from severe paranoia and
was confined in the mental hospital in 2016. After his release he was placed under the
guardianship of his wife to enable him to get his retirement pay. In 2017, he became a
mining prospector and sold some mining claims. In 2018, he sued to annul the sale
claiming that he was not mentally capacitated at the time of sale. The sale in question
is:
a. Illegal c. Void
b. Voidable d. Valid
311. Those who undertake to form a corporation and to procure for it the rights,
instrumentalities and capital by which it is to carry out the purposes set forth in its
charter, and to establish it as fully able to do business, are called
c. Incorporators.
a. Promoters. d. None of the above. b. Trustee.
312. If the instrument provides for a sum of money payable in installments and only
the last installment has maturity date, is the instrument negotiable?
a. Yes, but the first installment is not payable
b. Yes, but the first installment is payable on demand
c. No, each installment must be dated
d. No, a negotiable instrument cannot be paid in installments
313. The admission of a new general partner to a limited partnership requires

consent by
I. A majority of the general
partners. II. All of the general
partners.
III. A majority of the limited partners. IV. All
of the limited partners.
a. I only. c. I and III only.
b. II only. d. II and IV only.
314. As a general rule, what is the maximum surplus profits that can be retained by a
stock corporation?
a. a 50% of paid up capital
b. b 100% of paid up capital
c. c 50% of authorized capital stock
d. d 100% of authorized capital stock
315. The stipulation in the contract to the effect that the debtor should remain as a
servant in the house and in the service of her creditor so long as she had no paid her
debt is void because it is:
a. Contrary to good customs c. Contrary to law
b. Contrary to public policy d. Contrary to morals
316. In addition to the qualification for membership in the board provided in the
Corporation Code, Securities Regulation Code and other relevant may provide for
additional qualification which may include the following, except?
a. College education or equivalent academic degree.
b. Practical understanding of the business of the corporation.
c. Previous business experience.
d. Member of specific political party
317. Which of the following affects the negotiability of an instrument? a. it is not

dated
b. it does not specify the value given
c. it does not specify the place where it is drawn
d. absence of the year of maturity
318. GREAT Company, a partnership engaged in the distribution of generators, is

composed of George, Roland, Edmond, Albert and Troy. George is the managing
partner. During the month of April, the following transactions were entered into by the
following partners in behalf of the partnership without any authority:
I.The purchase of a car by Edmond from Lexus Motors whose owner was not aware
of Edmond’s lack of authority. The car and the price are due for delivery and
payment, respectively.
II. The sale of a generator by Roland to Juan Torres who was not aware that
Roland had no authority. Juan Torres has paid for the generator which is due for
delivery.
Based on the foregoing, the partnership is bound by:

a. Transaction I only. c. Both Transactions I and II.
b. Transaction II only. d. Neither of Transaction nor II
319. It is any composition of lines or colors or any three-dimensional form, whether
or not associated with lines or colors; provided that such composition or form gives a
special appearance to and can serve as pattern for an industrial product or handsicraft.
It shall be valid for five (5) years from filling date of the application. It may be renewed
for not more than two (2) consecutive periods of five (5) years each, by paying the
renewal fee.
a. Patent c. Industrial design
b. Utility model d. Trademark
320. By specific provisions of law, which of the following need not appear in a public
instrument?
a. An assignment of credit, right or action involving real property in order to
produce an effect against third persons.
b. A pledge; describing the thing pledged and the date of the pledge, in order to
be effective against third persons.
c. A contract of agency, for the sale of a piece of land or any interest therein, in
order to consider the sale by the agent as valid.
d. A contribution to the partnership of immovable property or real rights
321. It is a director who is not the head of the department or unit of the corporation
nor performs any work related to its operation
a. Independent director
b. Dependent director
c. Executive director
d. Non-executive director
322. Which of the following affects the negotiability of an instrument? a. It bears a

seal
b. It names two alternative drawees
c. It designates a particular kind of current money in which payment is to be made
d. It is addressed to more than one drawee jointly

a. In a universal partnership where its nature is not specified, the presumption is
that a universal partnership of all present property is formed.
b. When the contribution to the partnership consists of personal property
amounting to P1,000,000 and real property amounting to P20,000 and the
contract is entered orally, the partnership contract is void.
c. A contract of partnership as a rule is consensual except when form is required
for validity.
d. Partnership is only a form of agency.
324. What is the required vote for the merger of the two or more cooperative into a
single cooperative?
a. a At least ¾ of all the members with the voting rights
b. At least 2/3 of all the members with the voting rights
c. Al least majority of all the members with voting rights
d. d At least 25% of all members with voting rights
325. Sale distinguished from dation in payment:

a. There is a pre-existing obligation
b. The cause is the price
c. It is a mode of extinguishing an obligation by conveying ownership of a specific
thing as payment
d. There is lesser degree of freedom in fixing the price
326. “Securities” issued to the public are required by law to be registered with –
a. the Bangko Sentral ng Pilipinas.
b. the Philippine Stock Exchange.
c. the Securities and Exchange Commission
d. the Securities and Exchange Commission and the Philippine stock Exchange.
327. Robin makes a promissory note payable to bearer and delivers the same to
Regina. Regina however, indorses it to Belle in this manner: “Payable to Belle, signed:
Regina”. Later, without indorsing the note, Belle delivers the same to Emma. Robin
subsequently dishonors the note. May Belle proceed against Robin for the note?
a. Yes, despite the special indorsement of Regina, it can still be negotiated by
delivery because it is originally a bearer instrument
b. No, the note has already been restrictively indorsed
c. No, when Regina specially indorsed the note, it converted the note
d. Yes, but only after going after Regina first
328. Who is primarily responsible for the governance of the corporation?

a. Chairman of the board c. Board of director
b. Chief Executive Officer d. President
329. Which of the following can be the subject to trademark protection under
Intellectual Property Law?
a. “Rosario” as a name for cigarettes c. Star or Circle
b. Pale Pilsen for Beer d. Heart
330. Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. Which of the following
constitute an offer?
a. An offer made through an agent
b. Advertisement for bidders
c. Business advertisement of things for sale
d. Special offer
331. It is a form of stock market manipulation wherein the market players are
engaging in buying activity at increasingly higher prices and then selling securities in the
market at the higher prices or vice versa
a. . Marking the close up c. Wash sales
b. . Hype and Dump d. Squeezing the float
332. When the signature in an instrument is forged, which of the following becomes
wholly inoperative?
a. The whole instrument c. Only forged signature
b. All signatures in the instrument d. The indorsement of the forger
333. Under the Rules on corporate governance, a temporarily disqualified director

shall take the appropriate action to remedy or correct the disqualification within a
period of
a. Thirty (30) business days from such disqualification
b. Thirty (30) calendar days from such disqualification
c. Sixty (60) business days from such disqualification
d. Sixty (60) calendar days from such disqualification
334. What is the required vote for the the increase of authorized capital stock of a
corporation?
a. At least majority vote of Board of Directors and approval by at least 2/3 vote of
stockholders and compliance of minimum 25% subscription and minimum 25%
of paid up
b. At least 2/3 of Board of Directors and approval by at least 2/3 vote of
stockholders and compliance of minimum 25% subscription and minimum 25%
of paid up
c. At least 2/3 vote of stockholders and compliance of minimum 25% subscription
and minimum 25% of paid up
d. At least majority vote of Board of Directors
335. Vilma, guardian of Nora sold Nora’s house and lot worth P2M for P1M. As a
result:
a. The contract can be rescinded because of inadequacy of price.
b.
The contract cannot be rescinded because there is no fraud, mistake or undue
influence.
c. The contract cannot be rescinded because all the elements of a contract are
present.
d. The contract cannot be rescinded because it is expressly provided by law as one
of the contacts that cannot be rescinded.
336. Which of the following statement is correct about liability of a person not
appearing in the instrument?
a. The principal is not liable for the signature of his duly authorized agent because
his signature does not appear in the instrument.
b. The drawee to whom a bill is delivered for acceptance destroys the same is not
liable on the instrument because the bill is deemed dishonored by
nonacceptance.
c. The forger is liable even his signature does not appear in the instrument
because the forger is already precluded from setting up the forgery or want of
authority.
d. d. Indorser who sign on a separate piece of paper known as allonge is not liable
on instrument because his signature does not appear on the
instrument itself.
337. The making, drawing and issuing of a check in violation of BP22 is punishable by
imprisonment of ____ or by a fine of not less than but not more than double the
amount of the check which fine shall in no case exceed ___, or both at the discretion of
the court.
a. Not less than 30 days but not more than 1 year; P200,000
b. Not less than 6 months but not more than 1 year; P200,000
c. Not less than 30 days but not more than 1 year; P100,000
d. Not less than 6 months but not more than 1 year; P100,000
338. The independent director is temporary disqualified if his beneficial equity

ownership in the corporation or its subsidiaries and affiliates
a. Exceeds two percent of its subscribed capital stock
b. Exceeds two percent of its authorized capital stock
c. Exceeds three percent of its subscribed capital stock
d. Exceed three percent of its authorized capital stock
b.
339 . Which of the following is NOT a requisite of a holder in due course?
a. He took the instrument complete and regular upon its face.
He became the holder of the instrument before it is overdue and without notice
that it had been previously dishonored if such was the fact.
c. He took the instrument in good faith and for value.
d. He has no knowledge of any fact which would impair the validity of the
instrument or render it valueless.
340. Which of the following is correct?

a. The nullity of the penalty clause carries with it that of the principal obligation.
b. The creditor is entitled only to the penalty and cannot demand for additional
damages although there is refusal to pay on the part of the debtor or fraud in
the performance of the obligation.
c. Proof of actual damages suffered by the creditor is not necessary in order that
the penalty may be damaged.
d. The penalty may not be equitably reduced by the courts
341. M issued a promissory note in favor of P (minor) or order for P10,000. P indorse
and deliver the instrument to A. Then A indorse indorse and deliver the instrument to B,
the present holder. Which of the following statements is correct?
a. When B demand payment from M, M can set up the defense of minority of P.
b. P being a minor cannot transfer title to A.
c. P is not liable to B being a minor.
d. A is not liable to B because his prior party is a minor.
342. A person violates BP 22 when, having sufficient funds in or credit with the
drawee bank when he makes or draws and issues check, shall fail to keep sufficient
funds or to maintain a credit to cover the full amount of the check if presented with a
period of how many days from the date appearing thereon, for which reason it is
dishonored by the drawee bank?
a. 60 days c. 90 days
b. 30 days d. 120 days
343. Which of the following is not an attribute of a private corporation?

a. It is an artificial being
b.
b. It is created by special law
c. It has the right of succession
d. It has the powers, attributes and properties expressly authorized by law or
incident to its existence.
344. What is the maximum par value of a share in a cooperative?

a. a 10% of the share capital of the cooperative
b 5% of the share capital of the cooperative
c. c 25% of the share capital of the cooperative
d. d 20% of the share capital of the cooperative
345. The following are requisites of a consensual contract except:

a. Consent c. Cause of consideration
b. Delivery d. . Prestation
346. The instrument read as follows:
Pay to the order of X P100,000.
(Sgd Y)
Which of the following is not a valid negotiation of the instrument?
a. Pay to “A” for P50,000 and pay to “B” for P50,000 (Sgd X)
b. Pay to A and/or B (Sgd X)
c. Pay to A and B ( Sgd X)
d. Pay to A (Sgd X)
347. Where a check is drawn by a corporation, a company or entity, who shall be

liable in case of violation of BP 22?
a. President
b. Treasurer
c. The person or person who actually signed the check in behalf of such drawer d.
Any director
348. Which of the following instance wherein non-voting shares are not allowed to
vote?
a. Issuance of additional Capital Stock.
b. Payment of Bonded indebtedness.
b.
c. Mortgaging substantially all of the corporate property. d. Merger
349. In which of the following cases is the holder deemed to be a holder in due
course?
a. The holder acquired the instrument through the endorsement of one of the
two payees.
b. The holder acquired the instrument at noontime on its maturity date.
c. The holder accepted the instrument from the payee under a strong and reliable
warning of the latter’s swindling activities.
350“Pay to C for collection only, Sgd. B” is an example of a restrictive type of
endorsement which is classified as:
a. Prohibitive type c. Trust type
b. Agency type d. Answer not given
351. Dante owes Danny P30,000 which prescribed on May 8, 2018. Dante paid the
amount by mistake on June 6, 2018. Realizing his mistake, Dante wants to recover the
amount he paid. In this case:
a. Dante can be made to recover on ground of mistake
b. Dante can be made to recover on the ground that his obligation is not legally
enforceable.
c. Dante can be made to recover because this will enrich Danny at his expense
d. Dante cannot recover because he fulfilled a natural obligation.
352. 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 90 days from the date of the check, shall be _______ evidence of knowledge of
such insufficiency of funds or credit unless such 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 5 banking days after receiving notice that such clerk has
not been paid by the drawee
a. Substantial c. Prima facie
b. Conclusive d. Sufficient
353. The report of election of directors, trustee and officer must be submitted to the
Securities and Exchange Commission within
a. Thirty (30) days after the election of the directors, trustee and officers of the
corporation.
b. Sixty (60) days after the election of the directors, trustee and officers of the
corporation.
c. Ninety (90) days after the election of the directors, trustee and officers of the
corporation.
d. One hundred twenty (120) days after the election of the directors, trustee and
officers of the corporation.
354. Which of the following is not insured by the Philippines Deposit Insurance
Corporation?
a. a Certificate of time deposit
b. b Investment in government bonds
c. c Savings deposit
d. d Demand of checking account
355. This contract is without effect unless ratified
a. Contract of sale between a guardian in his ward
b. Donation between husband and wife
c. Contract of marriage between brother and sister
d. Contract of between two insane person
356. S and B agreed on the sale of a house and lot for P5,000,000 Where the former
can buy it back but did not specifically fix or designate the period of repurchase. In this
case the period of repurchase is
a. . 2 years c. . 8 years
b. . 4 years d. 10 years
357. It shall be construed to mean an arrangement or understanding with the bank
for the payment of such check.
a. Loan c. Debit
b. Cash d. Credit
358. Statement I: All corporation formed or organized under the corporation code
commences to have corporate existence and juridical personality and is deemed
incorporated only from the date the Securities and Exchange Commission issue a
certificate of incorporate under its official seal.
Statement II: Corporate name having the word “United Nation” may be approved by
the Securities and Exchange Commission. a. Both statements are true
d. Statement I is false, but statement II is true
359. Which of the ff. is the real defense in a negotiable instrument that may be set
up against any type of holder?
a. Want of authority of agent
b. Fraud inducement
c. Absence or failure of consideration
d. Acquisition of instrument by force, duress fear or by unlawful means
360. This is understood to be that which must necessarily come, although it may not
be known exactly when
a. Fortuitous event c. Resolutory condition
b. Day certain d. Suspensive condition
361. Manuel Corporation, which maintains a professional basketball team, entered
into a contract with Armstrong Rubber Company for the latter to provide a pair of
rubber shoes to the formers two imported basketball players, Charles Jordan and
Barkley. Armstrong Rubber Company was instructed to a pair for either or both players
incase the company did not manufacture shoes of their size. No pair was, however,
immediately available for both the players. Charles Jordan, who is 6’5 tall and wears size
12 rubber shoes, was giver a pair day from the 300 pairs that Armstrong was in the
process of manufacturing for its customers at the time the orders were received.
Michael Barkley, who is 7’ tall and wears size 18 shoes, was provided three days later,
with a pair that was specially made for him since Armstrong does not make shoes of his
size. What kind of contracts were entered into for the shoes provided to the two
basketball players under the New York rule?
a. The contract for the pair of shoes provided to Charles Jordan is a contract for a
piece of work, while that for Michael Barkley is a contract of sale.
b. The contract for the pair of shoes provided to Charles Jordan is a contract of
sale, while that for Michael Barkley is a contract for a piece of work.
c. Both contracts are contracts of sale.
d. Both contracts are contracts for a piece of work
362. Any person, who having sufficient funds in or credit with the drawee bank when
he makes or draws and issues check, shall fail to keep sufficient funds or to maintain a
credit to cover the full amount of the check if presented within a period of ___ days
from the date appearing thereon, for which reason it is dishonored by the drawee bank
shall be criminally liable under BP22
a. 60 c. 90
b. 30 d. 5
363. “Alma” was one of the directors of “Xerex Corporation” “Baby” obtained a
judgment against “Alma” and had all of the latter’s shares of stock in “Xerex”
Corporation attached and sold at public auction. “Baby” bought all the shares at the
public auction sale. Subsequently, a meeting of the board of directors of “Xerex”
Corporation was held and both “Alma” and “Baby” appeared in said meeting, each
claiming the right to participate in the deliberation of the board. “Alma” contended that
he had the right to continue as director until the stockholders could elect his successor.
“Baby”, on the other hand, contended that having purchased all of “Alma’s” shares he
had the right to take the latter’s place in the board. Who of the two claimants is entitled
to sit in the board?
a. Alma c. Both Alma and Baby
b. Baby d. Neither Alma or Baby
364. Which of the following is the personal defense in a negotiable instrument that
may be set up against a holder not in due course but not against a holder in due course?
a. Fraud in factum b. Illegality of consideration
c. Forgery d. Minority
365. In the execution of obligations, liability for malice or bad faith:

a. Extends not only to results intended but also to their foreseen consequence.
b. Is demandable in all obligations but may be renounced in advance.
c. Extends only to results intended but excluding exemplary damage.
d. Extends to natural consequences even if they exceed the debtor’s expectations
366. X sold his shares of stock at Petron Corporation to Y for P10.00 per share. After
the payment of the purchase price, X delivered his certificate of stocks to Y. X’s shares of
stock at Petron Corporation are considered delivered to Y through
a. Traditio longa manu c. Traditio brevi manu
b. Traditio simbolica d. Quasi-traditio
367. First statement: As a general rule, the partners are the agents of the
partnership; hence acts of the partners for the account of the partnership are binding
not only on the partnership but also on the members.
Second statement: Whatever acts the stockholders might execute for the account of the
corporation, either individually or collectively, are not binding on the corporation
a. Only the first statement is true
b. Only the second statement is true
c. Both statements is true
d. None of the statement s is true
368. These corporation are prohibited from issuing no par shares, except;
a. Banks c. Stock exchange
b. Trust Corporation d. Insurance companies
369. In which of the following cases must presentment for payment of a negotiable
instrument be made?
a. To the drawer, where he made a stop payment order to the drawee-bank.
b. To the drawer, where he withdrew all his deposit in the drawee-bank.
c. To the endorser, where the instrument was made or accepted for his
accommodation.
370. X, Y and Z solidarily owe A, B, C, D; joint creditors P30,000. How much can A
collect from X?
a. P7,500 only
b. P20,000, A in turn has to give P5,000 each to B, C and D.
c. P10,000, A in turn has to give P2,500 each to B, C and D.
d. P5,000 only
371. Statement 1: Where necessaries are sold and delivered to a minor or other
without capacity to act, he must pay a reasonable price therefore.
Statement 2: If several persons, jointly and in the same contract, should sell an
undivided immovable with a right of repurchase, none of them may exercise this right
for more than his respective share.
c. 1st statement is true and 2nd statement is false
d. 1st statement is false and 2nd statement is true
372. It refers to a partnership in which the parties contribute all property which
actually belongs to them a common fund with the intention of dividing the same among
themselves, as well as all the profits which they may acquire therewith.
a. Partnership of profits
b. Partnership of all present property
c. General partnership
d. Limited partnership
373. When a Founders shares classified as such in the articles of incorporation is

given the exclusive right to vote and be voted for in the election of directors, it must be
or a limited period of:
a. Not to exceed five (5) years subject to the approval of the Securities and
Exchange Commission (SEC).
b. Not to exceed ten (10) years subject to the approval of the Securities Exchange
Commission (SEC).
c. Not to exceed five (5) years but can be renewed for another (5) years subject to
the approval by the Securities Exchange Commission (SEC.)
d. Without limitation provided approved by the Securities and Exchange
Commission (SEC).
374. In which of the following bills of exchange is presentment for acceptance

mandatory in order to charge the drawer and general endorsers who are secondarily
liable to the bill?
a. Bills payable after sight
b. Bills payable on demand
c. Bills payable at a fixed date
d. Bills payable at a fixed period after date
375. The obligation of the employer to pay death benefits and funeral expenses for
his employee’s death while in the course of employment as sanctioned by the
workmen’s compensation Act is one that arises form
a. Law c. Quasi-contracts
b. Contracts d. Delicts
376. In a contract entered into between Jude Electric International Company and
Lileth Corporation referred here as a distributor, the former consigned to the latter
electric fan to be sold by the Distributor. Prior to such sale, Jude Electric International
would remain the owner of the electric fan. However, the contract expressly stated that
Lileth Corporation was not being made as agent, and could not bind the company.
Between the two entities, there is
a. Contract of sale c. Contract of partnership
b. Contract of agency to sell d. Trust agreement
377. It refers to a partnership which comprises all that the partners may acquire by
their industry or work during the existence of the partnership
a. Particular partnership of profits c. Partnership of all present profits
b. Partnership of all present property d. Universal partnership of profits
378. Which of the following complies with the legal requirements for incorporation?
Authorized Subscribed Paid-up

Capital stock capital stock capital stock
a. P1,000,000.00 P500,000.00 P124,000.00
b. P500,000.00 P300,000.00 P75,000.00
c. P300,000.00 P100,000.00 P24,000.00
d. P64,000.00 P16,000.00 P4,000.00
379. Two marks for the same product (candy) are currently being examined by the
Trademark Examiner of the Bureau of Trademarks to determine if they are confusingly
similar. One product bears the trademark “Axis Candy” while the other product uses the
trademark “Yummy Axis Candy”. What test shall be applied to determine if there is
trademark infringement?
a. Dominancy test c. Enabling test
b. Holistic test d. Best mode test
380. With regard to the right as to the fruits of the thing, which is not correct?
a. If the obligation is subject to a suspensive condition , the obligation to deliver
arises from the moment the condition happens.
b. If the obligation arises from a contract of sale, the vendor has a right to the
fruits of the thing from the time the obligation to deliver arises.
c. If the obligation is subject to a suspensive period, the obligation to deliver arises
upon the expiration of the term or period.
d. If there is no condition or term for its fulfillment, the obligation to deliver arises
from the perfection of the contract or creation of the obligation.
381. Which of the following cannot be the object of contact of sale?

a. Future property c. Lawful services
b. Transmissible right d. Present property
382. First statement: If the partnership is general, it may be constituted in any form,
except where immovable property or real rights are contributed to the common fund, in
which case a public instrument to which is attached an inventory of said property,
signed by any of the partners; shall be necessary for validity.
Second statement: IF the general partnership has a capital of P3, 000 or more, it must
appear in a public instrument, which shall be recorded in the office of the SEC. However,
it is not necessary for its validity.
a. Only first statement is true c. Both statement are true
383. The following defects will preclude the creation of even a de facto corporation?
a. The name of the corporation closely resembles that of a pre-existing
corporation that it will tend to deceive the public.
b. The incorporators of a certain number of them are not residents of the
Philippines.
c. Lack of Certificate of Incorporation from the Securities and Exchange
Commission.
384. A government employee, purchased DBP Bonds with a total value of P100,000
and receives annual interest income from his investment. Under Bank Secrecy Law, the
investment of the government employee may be inquired into without need of a court
order by the
a. Public prosecutor handling estafa case against the government employee
b. BIR officer auditing the VAT of the government employee
c. Credit investigator of a lending institution where the government employee
applied for the loan
d. None of the foregoing
385. A and B are jointly liable to deliver a particular car valued at P200,000 to C on
July 1, 2018. Which is correct?
a. The prestations is indivisible making the liability of A and B solidary.
b. If on July 1, 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
damages if B is 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 damages may be assessed only against
the debtor who violated the obligation
386. Statement 1: In contract to sell, ownership passes to the buyer upon actual or
constructive delivery.
Statement 2: A contract to sell, even if accepted by the buyer is not an absolute sale.
c. 1st statement is true and 2nd statement is false.
d. 1st statement is false and 2nd statement is true.
387. If there is no agreement as to the distribution of profits and losses, how should
the profits be distributed to the industrial partner?
a. In proportion to what he may have contributed to the common fund
b. No entitlement
c. Profits go to the reserve fund
d. Just and equitable under the circumstances
388. Which of the following is not included in the article of incorporation?

a. The number of directors or trustees, which shall not be less than five (5) nor
more than fifteen (15)
b. The Name of the Corporation.
c. The term for which the corporation is to exist.
d. The form for proxies of stockholders.
389. A maintained the following deposits at BPI Bank:
P600,000 – Savings deposit in the name of A and/or B

P200,000 – Time deposit in the name ABC Partnership
P300,000 – Current account in the name of A
How much can A personally recover from PDIC if BPI Bank was liquidated by BSP?
a. P900,000 b. P600,000
c. P550,000 or P500,000 d. P300,000
390. Which of the following is a valid stipulation:
a. Apple promises to give Bobby P10,000 and if she fails, Apple will allow Bobby to
have her mobile phones
b. Apple will give Bobby P10,000, if Bobby will kill cathy
c. Apple agreed to give Bobby a house and lot if Bobby will be her slave
d. Apple agreed to put poison on the food of Bobby’s wife, and if Apple fails, to
pay Bobby damages worth P10,000
391. The following are common to pledge, chattel mortgage and real mortgage
except:
a. These contracts are constituted to secure the performance of a principle
obligation.
b. These contracts must be in writing and registered in order to be binding against
third persons.
c. The pledgor/mortgagor must be the absolute owner of the thing pledged or
mortgaged.
d. There can be no valid pledge, chattel, or real mortgage without a valid
obligation.
392. If there is no agreement as to the distribution of profits and losses, how should
the profits be distributed to the capitalist partner?
a. In proportion to what he may have contributed to the common fund
b. Just and equitable under the circumstances
c. No liability
d. Profits go to the reserve fund
393. These corporations are created to enable religious societies to manage with
more facility and advantage the temporalities belonging to the church or congregation.
a. Eleemosynary corporation c. Lay corporation
b. Ecclesiastical corporation d. Civil corporation
394. Which is FALSE about Foreign Currency Deposit Act also known as R.A. No.
6426?
a. The foreign currency deposits maintained abroad by Filipino citizens are not
covered by the provisions of this act.
b. Depositary banks which have been qualified by the Monetary Board to function
under expanded foreign currency deposit system are exempt in maintain the
fifteen percent (15%) foreign currency cover for their liabilities in the form of
foreign currency deposit with BSP.
c. Foreign currency deposits are of absolutely confidential nature, except upon
the written permission of the depositor.
d. Foreign currency deposits are subject to attachment, garnishment, or any other
order or process of the court.
395. The consequential damages suffered by the injured person and those suffered
by this family or third person by reason of the ac
a. Restitution c. Reparation
b. Indemnification d. Restoration
396. D mortgage his house and lot to C as security for the loan amounting to P1M.
Which of the following statements is correct?
a. C may automatically be the owner of the mortgaged house and lot upon
nonpayment of the loan, if that is stipulated in their written contract.
b. If there is stipulation prohibiting D to sell his house and lot while the loan
remains unpaid, D cannot sell the mortgaged property before the maturity date
of the loan.
c. If the mortgaged property is foreclosed but the proceeds of the sale is less than
the amount of the loan, C has no more right to demand payment of the balance
from D.
d. If the written contract of mortgage is not registered of the Office of the Registry
of Deeds, the real mortgage is still valid between D and C.
397. Can a capitalist partner engage in a business similar to the kind of business in
which the partnership is engaged?
a. Never, as the prohibition is absolute
b. No, unless there is a stipulation to the contrary
c. Yes, if he has extra available capital
d. Yes, if he brings with him another capitalist partner
398. Which of the following is not a characteristic of a corporation?

a. It has a continuous life.
b. Shares in the corporation can normally be freely transferred.
c. A corporation is treated as a legal entity separate from its shareholders.
d. A corporation is automatically terminated upon the death of a majority of its
shareholders
399. For validity and to bind third persons, where shall chattel mortgage executed on
a private motor vehicle by registered?
a. Chattel mortgage registry where the mortgagor resides
b. Land Transportation Office
c. Both A and B
d. Neither A nor B
400. Which of the following produces the effect of payment?

a. Delivery of a promissory note c. Delivery of a check
b. Dacion en pago d. Delivery of bank notes
401. Which of the following is not a correct statement in contract of pledge?
a. All movables which are within commerce may be pledged, provided they are
susceptible of possession.
b. Incorporeal rights, evidenced by negotiable instruments, bill of lading, shares of
stock, bonds, warehouse receipts and similar documents may also be pledged.
c. A pledge shall not take effect against third persons if a description of the thing
pledged and the date of the pledge do not appear in a public instrument.
d. The pledge may deposit the thing pledged with a third person even without
stipulation authorizing him to do so.
402.Jean and John are partners in a certain business, Jean being the managing partner.
Ruth owes Jean P50, 000 and the partnership P100, 000 and both credits are
demandable. Ruth pays Jean P30, 000 and Jean issues a receipt in her name. How much
Jean entitled to apply to her credit?
a. 10,000 c. 30,000
b. 20,000 d. Nothing
403.Which of the following do not require stockholder’s meeting as a rule?
a. Increasing bonded indebtedness
b. Amendment of the articles of incorporation
c. Decrease of capital stock
d. Merger or consolidation
404. Which of the following is considered “covered transaction” under AMLA for a
banking institution?
a. P250,000 or more in one banking day
b. P500,000 or more in one banking day
c. Over P500,000 in one banking day
d. P1,000,000 or more in one banking day
405.. The obligation to deliver arises:

1st answer – From the perfection of the contract if there is no period or condition 2 nd
answer – If there is a term or condition, then from the moment the term arrives or
the condition happens
a. Both statement are false b. First false, second true
c. Both statement are true d. First true, second false
406. Which of the following is not correct in pledge?
a. It is an accessory contract.
b. Electricity may be the object of pledge because this is controlled by science.
c. The pledger may dispose the object of ledge.
d. As a rule, the pledge can deposit the thing pledged with a third person.
407. Jean and John are partners in a certain business, Jean being the managing
partner.
Ruth owes Jean P50, 000 (more onerous) and the partnership is P100, 000. Ruth pays
Jean P30,000 and Jean issues a receipt in her name. How much Jean entitled to apply to
her credit?
a. Nothing c. 20,000
b. 30,000 d. 10,000
408. Which of the following corporate acts wherein non-voting redeemable shares
classified as such in the article or Incorporation are not entitled to vote?
a. Increase of capital stock c. Payment of bonded indebtedness
b. Decrease of Capital stock d. Creation of bonded indebtedness
409. Which is EXEMPTED from registration with SEC before engaging in the business
of buying and selling of securities in the Philippines?
a. Brokers and dealers
b. Associated persons of broker and dealer
c. Salesman of broker or dealer
d. None of the above
410. A stipulation in favor of a third person conferring a clear and deliberate favor
upon him and which stipulation is merely a part of a contract entered into by the
parties, neither of whom acted as an agent of a third person, and which favor can be
demanded by third person if duly accepted by him before it could be revoked.
a. Stipulation pourautrui c. In pari delicto
b. Caveat emptor d. Pactumcommissorium
411. Under the unclaimed balances law, before filing a sworn statement, banks and
other similar institutions are under obligation to communicate with owners of dormant
accounts. The purpose of this initial notice is for a bank to determine whether an
inactive account has indeed been unclaimed. Hence, under BSP Circular 928 series of
2016, for unclaimed dormant deposit accounts considered for escheat, the depositor of
such account shall be notified
a. at least fifteen (15) days prior to the filing by the bank of the sworn statement
to the Treasurer.
b. at least thirty (30) days prior to the filing by the bank of the sworn statement to
the Treasurer.
c. at least sixty (60) days prior to the filing by the bank of the sworn statement to
the Treasurer.
d. at least ninety (90) days prior to the filing by the bank of the sworn statement
to the Treasurer.
412. Jean and John are partners in a certain business, Jean being the managing
partner.
Ruth owes Jean P50, 000 (more onerous) and the partnership is P100, 000. Ruth pays
Jean P30, 000 and Jean issues a receipt in her name upon Ruth’s instruction. How much
is Jean entitled to apply to her credit?
a. Nothing c. 20,000
b. 30,000 d. 10,000
413. When a private corporation is created by special law, such corporation is?
a. De Jure corporation c. Corporation by estoppel
b. De Facto corporation d. Non-existing corporation
414. Which is EXEMPTED from registration with SEC before engaging in the business
of buying and selling of securities in the Philippines?
a. Brokers and dealers
b. Associated persons of broker and dealer
c. Salesman of broker or dealer
415. Case No 1. Henry promised to give his son a car if 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 to his son a car if the son will not marry Herlyn
before the end of 2017. If on January 1, 2018, the son has not yet married Herlyn, or
Herlyn has died, the obligation is extinguished.
b. First false, second true d. First true, second false.
416 Joven Uro invested his P5,000,000 available money in bonds issued by the
Philippine government through his bank. Subsequently, the Bureau of Internal Revenue
asked his bank to disclose his investments. His bank refused the request for disclosure
on the ground that the investments are confidential under the Bank Secrecy Law (R.A.
1405 as amended). Which of the following is correct?
a. The bank is not justified. Under R.A. 1405, only bank deposits are covered by
bank secrecy law.
b. The bank is justified because banks are prohibited to disclose any information
about the depositor whether bank deposit or any form of investment issued by
government or any public listed companies except only upon written consent by
the depositor.
c. The bank is justified. Under R.A. 1405, investments in bonds issued by the
Philippine government are also absolutely confidential and may not be
examined, inquired or look into by any person, government official, bureau or
office save for the exceptions apply in the present case.
d. The bank is not justified. Under R.A. 1405, government bonds issued by the
government are not covered.
417. If there is no agreement on who will manage the partnership, it is vested in:
a. The partner with highest contribution
b. The partners with majority stake
c. The oldest partner
d. All of the partners
418.Under this doctrine, the corporation may exercise only powers expressly authorized
by law or incident to its existence?
a. Doctrine of separate juridical personality
b. Doctrine of corporate alter ego
c. Doctrine of limited capacity
d. Trust fund doctrine
419. What is the penalty for violation of Batas Pambansa Bilang 22 a.k.a. Bouncing
Check Law?
a. Imprisonment of not less than thirty (30) days but not more than one (1) year;
or Fine of not less than but not more than double the amount of the check
which fine shall in no case exceed Two Hundred Thousand Pesos (P200,000); or
Both Imprisonment and Fine at the discretion of the court.
b. Imprisonment of not less than twenty (20) days but not more than two (2)
years; or Fine of not less than but not more than double the amount of the
check which fine shall in no case exceed Three Hundred Thousand Pesos
(P300,000); or Both Imprisonment and Fine at the discretion of the court.
c. Imprisonment of not less than ten (40) days but not more than six (6) months;
or Fine not less than but not more than double the amount of the check which
fine shall in no case exceed One Hundred Thousand Pesos (P100,000); or both
imprisonment and fine at the discretion of the court.
d. Imprisonment of not less than sixty (60) days but not more than three (3) years;
or fine of not less than but not more than double the amount of the check
which fine shall in no case exceed Five Hundred Thousand Pesos (P500,000); or
Both imprisonment and fine at the discretion of the court.
420. Boy owes Bing to debts, both of which are already due. The first debt is secured
by registered chattel mortgaged constituted over a car belonging to Boy and the second
is not. Boy tells Bing that the payment he is now making should be applied to the
second debt instead of the first, which is correct?
a. Bing cannot refuse the application if the first debt is older than the second.
b. Bing may refuse such application on the ground that the first debt is more
burdensome to the debtor
c. Bing may refuse such application because the payment shall be applied
proportionately
d. Bing cannot refuse the application because the preference of the debtor must
be followed.
421. A type of cooperative, the primary purpose of which is to procure and distribute
commodities to members and non-members
a. Producers cooperative c. Credit cooperative
b. Consumers cooperative d. Marketing cooperative
422. Ruth, Carlo Maricel and Dustin organized a general partnership, with Ruth and
Carlo as industrial partners and Maricel who contributed P30, 000 to the common fund
and Dustin who contributed P10,000 to the common fund as capitalist partners. Nobody
was appointed managing partner. When the firm commenced business operations, the
Ruth and Carlo appointed Olive as accountant of the firm. A year later, Ruth decided to
dismiss Olive, but this was opposed by Carlo. How can the conflict between Ruth and
Carlo be first resolved?
a. Maricel will decide
b. Dustin and Maricel will decide
c. Ruth prevails
d. Majority of the partners will decide
423. A corporation may be dissolved voluntary or involuntary. Which of the following

is a clause for the authentic dissolution of a corporation?
a. Failure to file the required report to the Securities and Exchange Commission
b. Failure to continue the business for at least five (5) years
c. Failure to file its corporate by-laws with the Securities and Exchange
Commission within thirty days from the issuance of the Certificate of
incorporation
d. Failure to formally organized and commence business within two years from
the issuance of the certificate of incorporation
424. What is the quantum of evidence required to sue a person or to file a criminal
case for violation of Batas Pambansa Bilang 22 a.k.a. Bouncing Check Law?
a. Preponderance of Evidence
b. Proof beyond reasonable doubt
c. Prima facie evidence or probable cause
d. Clear and convincing evidence
425. 1stStatemnet – In novation by way of expromission, there is reviral of the

original debtor’s obligation if the new debtor’s insolvency is known to the original
debtor and also known to the public.
2nd Statement – In novation by way of delegacion, there is revival of the original debtor’s
obligation if the new debtor is insolvent at the time of delegacion and such insolvency is
known to the public even if not known to the original debtor
426. An associate shall be considered a regular member provided he: a.) meets the
minimum requirements of regular membership; b.) signifies his/her intention to remain
a member; c.) continues to patronize the cooperative for?
a. One (1) year c. Three (3) years
b. Two (2) years d. Four (4) years
427. Ruth, Carlo Maricel and Dustin organized a general partnership, with Ruth and
Carlo as industrial partners and Maricel who contributed P30, 000 to the common fund
and Dustin who contributed P10,000 to the common fund as capitalist partners. Nobody
was appointed managing partner. When the firm commenced business operations, the
Ruth and Carlo appointed Olive as accountant of the firm. A year later, Ruth decided to
dismiss Olive, but this was opposed by Carlo. How can the conflict between Ruth and
Carlo be first resolved in case of a tie?
a. Maricel will decide
b. Dustin and Maricel will decide
c. Ruth prevails
d. Majority of the partners will decide
428. H is married to W who is eight (8) months in the family way. Latter on when H
was away, W was brought to the hospital by F, father of W, who signed the contract
with the hospital. Who should pay for the hospital bills?
a. F who actually signed the contract.
b. H as the husband which expenses are to be paid out of the conjugal assets.
c. H which he should pay from his capital.
d. H which he should pay from the paraphernal assets of W.
429 Unless increased by the Anti-Money Laundering Council (AMLC), What is the
maximum period for reporting all covered transactions and suspicious transactions by
covered persons to AMLC?
a. Within 5 working days from the occurrence of the transaction
b. Within 5 calendar days from the occurrence of the transaction
c. Within 15 working days from the occurrence of the transaction
d. Within 10 calendar days from the occurrence of the transaction
430. When one of the parties to a contract is compelled to give his consent by a
reasonable and well-grounded fear of an imminent and grave evil upon his person or
property, or upon the person or property of his spouse, descendants or ascendants,
there is:
a. Violence c. Intimidation
b. Undue influence d. Force
431.A cooperative organized by minors shall be considered a?
a. . Laboratory cooperative c. Junior cooperative
b. A non-existing cooperative d. De facto cooperative
432. Gem, Mondy and Maddie formed a general partnership with the following
contributions to the common fun: Gem, P20, 000, Mondy P40, 000, Maddie zP60, 000.
There was no agreement on the division of profits or appointment of losses. After some
years of business operations, the assets of the partnership dwindled to P30,000 so the
partners agreed to stop their business. The partnership is indebted to Sansa for a loan
of P120,000. Under the circumstances, how much can Sansa collect from the
partnership?
a. 30,000 c. 120,000
b. 90,000 d. None
433. A contract of deposit has the following essential elements:
a. Consent of the contracting parties, object certain and cause or consideration.
b. Consent of the contracting parties, object certain, cause or consideration and
delivery of the object.
c. Consent of the contracting parties object certain, cause or consideration and
formalities required by law.
d. Consent of the contracting parties, object certain, delivery of the object, and
formalities required by law
434. When may a Certified Public Accountant (CPA) become a covered person under
AMLA such that it must be required to report covered transactions and suspicious
transactions to AMLC?
a. When the CPA is rendering assurance services to a client under independent

contractor relationship
b. When the CPA manages the client money, securities or assets or when engages
in the organization of contributions for the creation, operation or management
of companies or creation of juridical persons.
c. When the CPA performs audit of historical financial statements of a publicly
listed entity.
d. When the CPA renders management consultancy or tax advisory/compliance
services with a client
435. 1ST Statement – The action for rescission of contracts must be commenced
within six years.
2nd Statement – proof of actual damages suffered by the creditor is not necessary in
order that the penalty may be demanded
a. 1ST statement is correct, 2nd statement is wrong
b. 1st statement is wrong, 2nd statement is correct
c. Both statement is correct
d. Both statement is wrong
436. Which of the following statement is not correct about appeal and grievance
committee?
a. The members of appeal and grievance committee has a term of one (1) year.
b. The appeal and grievance committee can be created by the general assembly.
c. The appeal and grievance committee shall decide appeals on membership
application within thirty (30) days upon receipt thereof.
d. If the appeal and grievance committee fail to decide within the prescribed
period, the appeal is considered denied.
437. Rosh, Juju and Anna formed a partnership under the where Rosh’s participation
is 40%, Juju 40% and Anna 20%. Rosh and Juju would supply the entire capital. Anna
would contribute her management expertise and be manager for the first 5 years
without compensation. They also agreed that Anna shall not liable for losses.
Unfortunately, the partnership became bankrupt. Could Anna be personally held liable
for the debts of the partnership not satisfied with the assets of the partnership?
a. Yes, although solidarily with right of reimbursement from Rosh and Juju
b. Yes, although jointly with right of reimbursement from Rosh and Juju
c. Yes, although jointly without right of reimbursement from Rosh and Juju
d. No, Anna is not liable as per agreement
438. By changing the object or principal condition; or Substituting the person of the
debtor; or Subrogating a third person in the rights of the creditor
a. Novation c. Rescission
b. Release d. . Revocation
439. A bank account of a person may be examined by a government official in the
following exceptional cases UNLESS
a. Through subpoena duces tecum on bank deposit of a public official, his wife and
unmarried children may be taken into consideration in the enforcement of
Section 8 of the Anti-graft and Corrupt Practices Act (Rep. Act No. 3019)
b. Upon lawful order by the Ombudsman
c. Garnishment
d. The PCGG conduct of its investigations to recover unexplained or ill-gotten
wealth accumulated by former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates, may issue subpoenas
requiring the attendance and testimony of witnesses and/or the production of
books, papers, contracts, records, statement of accounts and other documents.
440. Membership in the cooperative may be terminated for a valid cause by a vote of
the
a. Majority of all the members of the board of directors.
b. Majority of the members of the board of director’s presence with a valid
quorum
c. Three-fourths (3/4) of all the members with voting rights, present and
constituting a quorum.
d. . Three-fourths (3/4) of all the members with voting rights.
441. Rosh, Juju and Anna formed a partnership under the where Rosh’s participation
is
40%, Juju 40% and Anna 20%. Rosh and Juju would supply the entire capital. Anna
would contribute her management expertise and be manager for the first 5 years
without compensation. They also agreed that Anna shall not liable for losses.
Unfortunately, the partnership became bankrupt. What is the status of the agreement
exempting Anna from losses?
a. Valid c. Voidable
442. Which of these contracts is not subject to ratification?

a. Rescissible contract c. Voidable contract
b. Void contract d. Unenforceable contract
443. Which of the following amendments to the articles of information requires for
its approval at least majority vote of the board of directors and the vote or written
assent of at least 2/3 of the outstanding capital stock instead of personal voting by at
least 2/3 of the outstanding capital stock?
a. Amendment to decrease or increase capital stock
b. Amendment to increase the number of the sits in the board of directors
c. Amendment to incur bonded indebtedness
d. Amendment to reduce voting requirement in a close corporation
444. The quorum of the general assembly shall consists of
a. At least five per centum (5%) of all the members entitled to vote.
b. At least ten per centum (10%) of all the members entitled to vote.
c. At least twenty-five per centum (25%) of all the members entitled to vote.
d. Majority of all the members entitled to vote.
445. Possession of the thing pledged must be placed in the hands of

a. Pledgee c. Guarantor
b. Surety d. Pledgor
446.. Distinguishing between a general partner and a limited partner

a. A general partner may not participate in the management of the partnership,
whereas a limited partner may.
b. A general partner can be held personally liable for partnership obligations after
all of the assets of the partnership have been exhausted, where a limited
partner cannot be held liable
c. A general partner may contribute money or other property only to the common
fund, whereas a limited partner may contribute money, property or industry
d. The name of a general partner may not appear in the firm name, whereas that
of a limited partner may.
447. Crisostomo donated a parcel of land to Anthony worth P500,00 in a public
instrument on September 1, 2019. Anthony accepted the same on the same day in a
separate private instrument. When Anthony now seeks to registered the land in the
Registry of Property. The latter refused the registration because the acceptance of the
donated property was not in a public instrument. In this caes:
a. Anthony can compel the Registry of Property to register the land under his
name because the donation is valid.
b. The registry of property committed a grave abuse of discretion in refusing the
registration of the donated property in question.
c. Anthony cannot compel the registry of property to register the land under his
name because the donation is void.
d. The donation is valid but the registration may be refused on the ground that the
acceptance was not in a public instrument.
448. Which of the following corporate acts may be validly done by executive
committee?
a. Amendment of articles of incorporation of the corporation
b. Preparation of the plan for merger of the corporation with another corporation
c. Filing of vacancy in the board of directors
449. On June, 6 2018 Judiel orally sold to AJ a certain ratio for P500. This kind of
contract is:
a. Rescissibble c. Voidable
b. Unenforceable d. Valid
450. The board of directors of a cooperative shall be responsible for the following,
except?
a. . Strategic planning
b. Direction-setting
c. Policy-formulation activities
d. Supervision of the day to day activity
451. It refers to an attribute of a corporation indicating a strong juridical personality

a. With right of succession
b. An artificial being
c. Created by operation of law
d. Having only such powers, attributes and properties expressly authorized by law
or incident to its existence
452. A debtor may still be held liable for loss or damages even if it was caused by a
fortuitous event in any of the following instances, except:
a. The debtor is guilty of dolo, malice or bad faith, has promised the same thing to
two or more persons who do not have the same interest.
b. The debtor contributed to the loss.
c. The thing to be delivered is generic.
d. The creditor is guilty of fraud, negligence or delay or if he contravened the
tenor of the obligation.
453. In which of the following cases is appraisal right NOT available?

a. Any amendment to the articles of incorporation that changes or restricts the
rights of any stockholder or class of shares.
b. Merger or consolidation.
c. Investment of funds in another corporation or business for a purpose other
than its primary purpose
d. Expiration of corporate term
454. A creditor, through a contractual arrangement made with Mr. Pala Utang, is to
receive the rentals of the Mr. Pala Utang’s apartment houses in Quezon city with the
obligation to apply them to the credit. This contract is a valid
a. Pledge c. Mortgage
b. Antichresis d. Guaranty
455. Which of the following officer of the cooperative are required to be a member
of the board?
a. Chairperson c. Treasurer
b. Secretary d. Auditor
456. It refers to a theory that a corporation is not merely as an artificial being, but
more importantly as an aggregation of persons doing business through an underlying
economic unit.
a. Strong juridical personality c. Theory of business enterprise
b. Theory of concession d. Limited liability of stockholders
457. In the morning of May 3, 2018, there was a head-on collision between a taxi of
the Malate Taxicab driven by Pedro Fontanilla and a carretela guided by Pedro
Dimapalis. The carretela was overturned, and one of its passengers, 16-year-old boy
Faustino Garcia, suffered injuries from which he died two days later. A criminal action
was filed against Fontanilla and right to bring a separate civil action was reserved.
Severino Garcia and Timotea Alamrio, parents of the deceased, brought an action
against Faustino Barredo as the sole proprietor of the Malate Taxicab and employer of
Pedro Fontanilla under Art. 2180 on vicarious liability. It is undisputed that Fontanilla’s
negligence was the cause of the mishap, as he was driving on the wrong side of the
road, and at high speed. The court rendered judgment ordering Faustino Barredo to pay
Severino Garcia and Timotea Almarion for damages. However, Faustino Barredo
Question the decision of the Court because the plaintiff did not show proof that the
assets of Pedro Dimapilis has been exhausted.
a. The contention of Fausto Barredo is correct because the liability of the
employer under the revised penal code is subsidiary.
b. The contention of Fausto Barredo is not correct because Severino Garcia and
Timotea Almario is recovering civil liability based on quasi delict, and the Civil
code provides that the liability of the employer for the damage caused by its
employee is direct and primary.
c. The contention of Fausto Barredo is correct because the liability of the
employer together with his employee is joint and subsidiary.
d. The contention of Fausto Barredo is not correct because the liability of the
employer under the revised penal code is direct and primary.
458. Indicate whether the ff. are considered express powers of a corporation:
I. To give donation in aid of political party or candidate or for purposes of partisan

political activity.
II. To establish pension, retirement, and other plans for the benefit of its directors,
trustees, officers and employees.
a. True and true c. False and false
b. False and true d. True and false
459. One is not a rescissible contract

a. Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them.
b. Those which are entered into by guardians wherever the words whom they
represent suffer lesion by more than ¼ of the value of the things which are the
object thereof.
c. Those agreed upon in representation of absentees, if the latter suffer a lesion
of more than ¼ of the value of the object of the contract.
d. Those where one of the parties is incapable of giving consent to a contract and
suffered damage of more than ¼ of the value of the property.
460.When a director, officer or committee member attempts to acquire or acquires, in

violation of his duty, any interest or equity adverse to the cooperative in respect to any
matter which has been reposed in him in confidence, he shall, as a trustee for the
cooperative, be liable for damages and shall be accountable
a. for 100% of the profits which otherwise would have accrued to the cooperative
b. . for 150% of the profits which otherwise would have accrued to the
cooperative
c. for double the profits which otherwise would have accrued to the cooperative
d. for triple the profits which otherwise would have accrued to the cooperative
461.It refers to a test where the nationality of the corporation is determined by the
nationality of its controlling stockholders
a. Control test
b. Primary place of incorporation test
c. Principal place of incorporation test
d. Grandfather test
462.There is no legal delay in

a. Positive personal obligation
b. Obligation to deliver determinate thing
c. Obligation to deliver indeterminate thing
d. Negative personal obligation
463. On November 1, 2000 A,B and C executed a contract of partnership whereby A,

B and Cpartners will contribute 100,000 cash , a land and a car March 1, 2001,
respectively. The partners registered the contract of partnership to Securities and
Exchange Commission on January 10, 2001. It was agreed in the contract of partnership
that the juridical personality of the partnership shall commence on December 1, 2001.
When shall the juridical entity or personality of the partnership begin?
a. November 1, 2001 c. December 1, 2000
b. March 1, 2001 d. January 10, 2001
464. Atoy uses a savings account with a bank. The contract between Atoy and the
bank is one of
a. Agency c. Deposit
b. Commodatum d. Mutuum
465. A contract entered into by the cooperative with one (1) or more of its directors,
officers and committee member is voidable, at the option of the cooperative. However,
such contract may be ratified by a
a. three-fourths (3/4) vote of all the members with voting rights, present and
constituting a quorum
b. three-fourths (3/4) vote of all the members with voting rights
c. two third (2/3) vote of all the members with voting rights, present and
constituting a quorum
d. two third (2/3) vote of all the members with voting rights
466. It refers to a rule by which the percentage of Filipino equity in a target

corporation engaged in nationalized and/or partly nationalized areas of activities, is
computed by attributing the nationality of second or even subsequent tier ownership to
determine the nationality of the corporate shareholder.
a. DOJ-SEC Control test c. SEC Control Test
b. FIA Test of Philippine National d. Grandfather Rule
467. The remedy of specific performance is available to the following:

I. Obligation to give a determinate thing
II. Obligation to give an indeterminate thing
III. Obligation to do
IV. Obligation not to do
a. I, II and III c. . I and III

b. I and II d. I, II, III and IV
468. what is the effect if a partner has undertaken to contribute a sum of money and
failed to do so?
a. He becomes a debtor to the partnership for the interest and damages from the
time he should have complied with his obligation.
b. He becomes a debtor to the partnership for the interest and damages from the
judicial demand for payment.
c. He becomes a debtor to the partnership for the interest and damages from the
oral extrajudicial demand for payment.
d. He becomes a debtor to the partnership for the interest and damages from the
written extrajudicial demand for payment.
469. 1st Statement - Doloincidente entitles the person against whom it was
employed the right to seek the annulment of the contract as fraud is one of the vices of
consent. 2nd Statement – A stipulation pour autrui is one of the exceptions to the rule on
relatively of contracts.
470.The following are not covered by insurable deposit, except?

a. Unit investment trust fund b. Mutual fund
c. . Time deposit d. Fictitious bank account
471. It refers to a test where a Philippine national is considered a corporation
organized under the laws of the Philippines of which at least 60% of the capital stock
outstanding and entitled to vote is owned and held by citizens of the Philippines, or a
trustee of funds for pension or other employee retirement or separation benefits,
where the trustee is a Philippine national and at least 60% of the fund will accrue to the
benefit of
Philippine nationals
a. SEC Control Test c. Grandfather test
b. FIA Test of Philippine National d. DOJ-SEC Control test
472. The following are the requisites of mora solvendi, except:

a. Obligation pertains to the debtor and is determinate, due, demandable, and
liquidated.
b. Obligation was performed on its maturity date.
c. There is judicial or extrajudicial demand by the creditor.
d. Failure of the debtor to comply with such demand.
473. . A borrowed P1,000 from B as evidenced by a negotiable promissory note. In

order to secure the fulfillment of the obligation, A pledged and delivered his specific
watch to B. At the maturity of the obligation, B voluntarily returned the specific watch
to A.
Which is CORRECT?
a. Only the contract of loan is extinguished.
b. Only the contract of pledge is extinguished.
c. Both contract of loan and contract of pledge are extinguished.
d. Neither contract of loan nor contract of pledge are extinguished
474. A remedy in equity by means of which a written instrument is made or
construed so as to express or confirm the real intention of the parties when some error
or mistake is committed.
a. Ratification c. Cancellation
b. Annulment d. Reformation
475. Mr. Juan Dela Cruz has the following account at BDA Bank:
Depositor Nature in account Amou
nt
Juan Dela Cruz Savings account P30,0
00
Juan Dela Cruz in trust for Time deposit account 60,0
Pedro Dela Cruz 00
Juan Dela Cruz for the Savings account 70,0
Account of Maria Dela Cruz 00
Juan Dela Cruz by Time deposit 80,0
Alexander De Jesus 00
Juan Dela Cruz by Enrico Unit investment trust 90,0
00
Solomon fund (UITF)
Juan Dela Cruz and Peter Time deposit 100,0
Dela Cruz 00
Juan Dela Cruz and/or Checking account 120,0
Veronica Uy 00
PRTC Incorporation and/or Savings account 180,0
Juan Dela Cruz 00
Juan Dela Cruz or Peter Savings account 300,0
Dela Cruz or Bobby Dela 00
Cruz
Juan Dela Cruz or Peter Mutual fund 90,0
Dela Cruz 00
The amount of insured deposit of Juan Dela Cruz for his single account
a. P110,000 c. P240,000
b. P200,000 d. P330,000
476. It provides that the required percentage of Filipino ownership shall be applied
to both (a) the total number of standing shares of stock entitled to vote in the election
of officers and (b) the total number of outstanding shares of stock whether or not
entitled to vote in the election of directors
a. SEC Control Test c. Grandfather test
b. FIA Test of Philippine National d. DOJ-SEC Control test
477. A is indebted in the amount of P100,000 to B. The obligation is perfected on

January 1, 2016. It will become due on June 30, 2016 but B only demanded for the
payment on July 1, 2016. A paid the obligation on December 31, 2016. When will the
legal interest start to accrue?
a. January 1, 2016 c. July 1, 2016
b. June 30, 2016 d. December 31, 2016
478. An oral contract of donation involving an immovable property is:

a. Voidable c. Valid
b. Unenforceable d. Void or inexistent
479. The following are the element of bouncing check law (BP 22), except?
a. The making, drawing and issuance of any check to apply for account or for
value,
b. The knowledge of the maker, drawer or issuer that at the time of issue there
were no sufficient funds in or credit with the drawee bank for the payment of
such check in full upon its presentment.
c. The dishonor of the check by the drawee bank for insufficiency of funds or
credit or the dishonor for the same reason had not the drawer, without any
valid cause, ordered the drawee bank to stop payment.
d. Deceit or damage to the payee thereof.
480.It refers to a corporation organized in accordance with requirements of law.

a. De facto c. Public
b. By estoppels d. De jure
481. Statement 1. An unenforceable contract is less defective than voidable contract.
Statement 2. Void contracts are not subject to ratification.
a. Both are true c. No. 1 is true; No.2 is false
b. Both are false d. No. 1 is false; No. 2 is True
482. Indicate whether the statement is true or false;
I. Where the illegal contract is a criminal offense, the innocent party shall not be
bound to comply with his promise if he has not yet given anything and if he had given,
he may claim or recover for its return.
II. Where the illegal contract is not a criminal offense, the innocent party may
demand the return or recover what he has given without any obligation to comply with
his promise.
a. True and True c. True and False
b. False and False d. False and True
483. In the absence of an agreement to the contrary what shall be the basis of
payment of an obligation in case there should supervene, an extraordinary inflation or
deflation of the currency stipulated?
a. The value of the currency at the time of the establishment of the obligation.
b. The value of the currency at the due date of the obligation.
c. The value of the currency shall be fixed by courts.
d. The value of the currency shall be determined by an expert from the Central
Bank.
484. Under Section 2 of BP 22, 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 ninety (90) days from the date of the check, shall be prima
facie evidence of knowledge of such insufficiency of funds or credit unless such 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 five (5) banking days after receiving
notice that such check has not been paid by the drawee.
The notice required under Section 2 of the bouncing check law (BP 22)?
a. Must be a notice of dishonor in writing
b. Must be an oral notice of dishonor
c. Maybe oral or writing at the option of the holder
d. Must be a notice of dishonor in a public instrument
485. It refers to a corporation where there exists a flaw in its incorporation

a. De facto c. By estoppels
b. De jure d. Public
486. Under this theory the corporation exists because the state wants it to exist.
a. Theory of concession c. Gennosenshaft theory
b. Theory of cognination d. Theory of manifestation
487. Indicate whether true and false
I. With the promulgation of Central Bank No. 905, Usury Law has become legally
inexistent, thereby allowing the lender and borrower to freely charge any interest on a
loan as it is not excessive or unconscionable.
II. With the promulgation of Central Bank Circular No. 905, the lenders in a loan
have blanket authority to charge or raise any interest rate that may enslave their
borrowers or lead to hemorrhaging of their assets.
III. Stipulations providing for excessive, exorbitant or unconscionable interest rate
in loan are null and void for being contra bonus mores or contrary to morality or good
customs.
a. True, True, True c. False, False, True
b. True, False, True d. True, False, False
488. Rescission of contracts can take place in this case:

a. When the things which are the object of the contract are legally in this
possession of third persons who acted in bad faith.
b. When he who demands rescission can return whatever he may be obliged to
restore.
c. When the party seeking rescission can perform only as to part and rescind to
remainder.
d. When the seller cannot return the installment paid to him by buyer.
489. The data privacy act protects personal information of
a. Individual c. Both natural and juridical person
b. Corporation d. Association
490. What is a minimum requirement of continued good faith in case of a de facto

corporation?
a. Submission of articles of incorporation
b. Issuance of certificate of incorporation by the SEC
c. Submission of by laws
d. Use of corporate powers
491. On January 5, 2019, Jeac wrote Lilibeth a letter, offering to sell his only
houseand lot in Bocaue Bulacan for P1,000,000 and the letter of offer was received by
lilibeth on January 9, 2019. On january 10, 2019, Lilibeth wrote a letter of acceptance,
which was received by Jeac on January 15, 2019. The contract is perfecto on
a. January 9,2019
b. January 10, 2019
c. January 15, 2019
d. January 10 or 15 2019 at the option of Lilibeth
492. .) A is selling his specific house and lot at a price of P1,000,000. B went to buy
the specific house and lot for a lower price of P200,000. After knowing the unfortunate
story of B, A told B that he is giving the said house and lot for free. The contract is sealed
with a handshake. What is the status of the contract?
a. Voidable c. Void
b. Perfectly valid d. Unenforceable
493. Mr Chua sold his horse for P100,000 to Mr. Ng. There was no fixed date for the
performance of the obligation of both parties. The obligation of Mr. Chua as vendor is:
a. To rescind the contract because no time or date is fixed for the performance of
their respective obligations.
b. To deliver the horse as this is a perfected contract.
c. To deliver the horse after demand.
d. To wait for Mr. Ng to pay P100,000 and deliver the horse
494.The agency entrusted to administer and implement the data privacy act?
a. Department of science and technology
b. National Privacy Commission
c. Department of Information and Communications Technology (DICT)
d. National Telecommunication Commission
495. It refers to a group of person who holds itself out as a corporation and enters into a
contract with a third person on the strength of such appearance cannot be permitted to
deny its existence in an action under said contract
a. Corporation by estoppels c. De facto corporation
b. De jure corporation d. Corporation by prescription
496. Amazed by the skill of X who can paint portraits using brushes inserted in his
right armpit, Y entered unto a contract with the former to have his own portrait done
and P50,000 as full payment therefore. After he has started the portrait but before its
completion, X was sideswipe speeding car while he was drunk and walking beside the
way causing the doctors to have his right arm amputated this case what is the remedy
of Y?
a. Nothing, as the service became impossible by reason of an act independent of
the will of the debtor.
b. Equivalent performance in terms of damages.
c. Specific performance by compelling X to go on painting Y’s portrait.
d. Substitute performance by allowing a third person to do his portrait with
expenses therefore charged to X.
497. A borrowed P100,000 from B and executed a chattel mortgage on his house and
lot as a security for his debt to B. When the principal obligation became due, A did not
pay despite demand for payment from B. Which is CORRECT?
a. B has no right to foreclose that chattel mortgage because he can sue for
collection.
b. B has no right to foreclose that chattel mortgage unless A consents to the
foreclosure.
c. B may foreclose the chattel mortgage because A is estopped from claiming the
invalidity of the chattel mortgage over the real property but foreclosure should
be made under the procedure of real estate mortgage law.
d. B has no right to foreclose the chattel mortgage because the house and lot are
not chattels. Thus, the contract of chattel mortgage is null and void
498. George secured and Randy granted a lone of P1M due on December 31, 2017.
George executed a first mortgage of his residential house in favor of Randy to guarantee
the loan. On August 18, 2017 the house was totally destroyed by an accidental fire. On
August 31, 2017, Randy demanded payment of the loan. Is the demand valid?
a. No, the obligation is one with a definite date for payment.
b. No, the object of the obligation was lost through a fortuitous event and the
obligation was extinguished.
c. Yes, the obligation became due at once because the guaranty was lost through
a fortuitous event.
d. Yes, the obligation became due at one once because from the tenor benefit, the
creditor is given the right to demand performance even before the due date
stipulated.
499. A system capable of generating a secure key pair, consisting of a private key or
creating a digital signature, and a public key for verifying the digital signature?
a. Information and communication system

b. Computer system
c. Asymmetric or public cryptosystem
d. Ephemeral electronic communication
500. It refers to a corporation formed, organized or existing under any laws other
than those of the Philippines and whose laws allow Filipino citizens and corporation to
do business in its own country or state
a. Domestic c. Close
b. Foreign d. Special
501.Which of the following is not an obligation with a period?

a. “Payable soonest”
b. An obligation payable little by little
c. Payable “within 2 years from today”
d. If X die of pneumonia
502. X, Y and Z are solidarily liable to A,B and C solidary creditors in the amount of
P2,700. A condoned the entire obligation in favor of X who accepted the renunciation.
The condonation is without the consent of B and C. which is CORRECT?
a. The entire obligation is extinguished.
b. Only P900 obligation is extinguished.
c. Only P300 obligation is extinguished.
d. A cannot condone the obligation without the permission of B and C.
503. A sold to B 1000 baskets of lanzones at P600 a basket. Thereafter, A can only
deliver 900 baskets and offered this number to B and no more, but at P700 each.
Decide.
a. B can refuse to accept delivery of the 900 baskets without liability.
b. B must pay for 1000 basketsbut at P500 each.
c. B can accept 900 baskets but pay P550 for each.
d. A can require B to accept 900 at P700 each.
504. Any regulation, rule, or administrative procedure or system that is ineffective or

detrimental in achieving its intended objectives and, and as a result, produces slow,
suboptimal, and undesirable social outcomes
a. Red tape c. Government procurement
b. Rules and Regulation d. Disorganization
505. It refers to persons mentioned in the articles of incorporation as originally

forming and composing the corporation and who are signatories thereof:
a. Corporators c. Stockholders
b. Incorporators d. Members
506.The following contract must be in a public instrument for purpose of convenient.
Which is the exception:
a. Repudiation of hereditary right
b. Power to administer property
c. Cession of conjugal partnership of gain.
d. Sale of real property
507. A, B and C are partners in ABC partnership. Later, they sell their ABC Partnership
business to D with the agreement that D shall assume all the liabilities of the
partnership to third persons. However, the third persons have no knowledge of the sale
to D. Which is CORRECT?
a. The liabilities of ABC partnership to third persons are extinguished.
b. Third party creditors may only ask from D for payment of ABC partnership’s
obligations.
c. The creditors of ABC Partnership are no longer creditors of Partner A, Partner B
and Partner C.
d. Partner A, Partner B, and a Partner C remain to be liable to the creditors of ABC
partnership in addition to D’s liability to these creditors
508. On June 16, 2017, A obliged himself to give to B his motorcycle. There was no
delivery until July 15, 2017 when the garage of the motorcycle collapsed due to a strong
typhoon and the motorcycle was totally destroyed. Is A still liable?
a. No, even if A was already in default, he could plead impossibility of
performance.
b. Yes, the obligation to deliver the motorcycle is changed to pay the equivalent
value because Jose.
c. No, because there was no demand by B to deliver the motorcycle and the
specific object was lost due to fortuitous event. The obligation is extinguished.
d. Yes, because the contract is perfected.
509. It serves as the Philippines central anti-money laundering/counter-terrorism

financing (AML/CTF) authority?
a. Bangko Sentral ng Pilipinas
b. Anti Money Laundering Council
c. Department of Finance
d. Department of National Defense
510. It refers to shares which enjoy preference as to dividends or assets upon

dissolution as stated in the articles of incorporation
a. Common c. Founder’s
b. Preferred d. Redeemable
511. Santos sold one-half of his expected inheritance to Balaura for P300,000.00,
when his father Mamatayna was still alive. After three months, Mamatayna died leaving
properties estimated at P1,000,000.00 to his sons Santos and Troy. In this case:
a. The contract is valid since the inheritance is an existing inheritance.
b. The contract is void because what Santos sold id future inheritance which
cannot be the object of a contract as a rule.
c. The contract is rescissible.
d. The contract is unenforceable
512. A and B are partners in AB partnership operating a laundry business. While in

the course of his duty as the managing partner of the laundry business, B used a polo-
shirt that one of his customers owned. While using the said polo-shirt without the
knowledge of partner A, a food dropped on the polo leaving a stain. Upon the demand
of the customer for damages, who shall be liable?
a. Partner B only because he used the polo-shirt without the consent of A.
b. Partner B and AB partnership only, solidarily.
c. Partner A, Partner B, and AB Partnership, solidarily.
d. AB Partnership then Partner A and Partner B, subsidiarily.
513. Which of the following is not an element of legal compensation:

a. Debts to be compensated are due and demandable.
b. There is no controversy or adverse claim over any debts to be compensated.
c. There are two or more debts of the same kind.
d. The creditors and debtors are one and the same person
514. Under the Anti Money Laundering Act (R.A. 1960 as amended), all records of all
transactions of covered institutions shall be maintained and safely stored for?
a. Two (2) years from the date of transactions.
b. Five (5) years from the date of transactions
c. Ten (10) years from the date of transactions
d. Thirty (30) years from the date of transactions
515. It refers to preferred shares where the shareholder is entitled to recover

dividends in arrears.
a. Cumulative c. Participating
b. Non-cumulative d. Non-participating
516. Allan promised to give Boying his only Honda Civic Car 2019 if Boying passes
CPA Board Exams. Pending the results of the exams, the car is destroyed by a fortuitous
event without any fault on the part of Allan. As a result
a. The obligation of Allan is converted into monetary obligation
b. The obligation of Allan is extinguished
c. The obligation of Allan will be equitably reduced
d. A will have to give Allan another Honda Civic car 2019 or its equivalent
517. D, a professional singer, agreed to sing for a fee of P20,000 at the birthday party
of C who was a fan of D. Due to numerous commitments, D could not go to the birthday
party of C. So he sent X, another professional singer who was known to sing better than
D, to sing the at C’s birthday party, and informed C that the latter needed to pay only
P10,000. Which is CORRECT?
a. D may validly assign his obligation to sing because the reduced fee was
advantageous to C.
b. D may validly assign his obligation to sing because X could perform the
obligation better than him.
c. D may not validly assign his obligation to sing because it is personal in nature.
d. C cannot refuse the performance of the obligation by X because the obligation
to sing is transmissible since it would not require much effort on the part of
either D or X who are both professional singers.
518. Which of the following is true?

a. Confusion will extinguish an obligation if two persons are principal debtors and
creditors of each other
b. In an obligation payable pro rata, there is only one debt and one credit
regardless of the number of debtors and creditors.
c. Cession en pago is commutative and governed by the law on sales.
d. The seller having voidable title to the thing sold can validly transfer title to his
buyer, provided his title has not been avoided at the time of the sale.
519. The following are the powers of the AMRC except?

a. to require and receive covered or suspicious transaction reports from covered
institutions.
b. to institute civil forfeiture proceedings and all other remedial proceedings
through the Office of the Solicitor General.
c. to cause the filing of complaints with the Department of Justice or the
Ombudsman for the prosecution of money laundering offenses.
d. To issue a freeze order upon determination of probable cause that any deposit
or similar account is in any way related to an unlawful activity.
520. First statement: In case of cumulative preferred shares, while dividend

declaration may not be compelled, once it is declared, the shareholder is entitled to the
said arreas.
a. Only first statement is true c. Both statements are true
521. Which of the following is consensual contract?

a. Contract of partnership with capital contribution of real property amounting to
P100,000.
b. Donation of immovable property.
c. Stipulation of interest in a contract of loan.
d. Contract of sale.
522. A, B and C are partners in ABC Trust Fund Partnership. A receives cash from a
client for purpose of trust fund management. Partner A misappropriated the fund given
by such client. Which is CORRECT?
a. If A is a managing partner, he cannot be held liable if he uses the money for
partnership purposes.
b. ABC Partnership, Partner A, Partner B and Partner C may be held solidarily liable
by third parties whom cash was misapplied by Partner a.
c. Only Partner A and ABC Partnership are solidarily liable to the client.
d. ABC Partnership is the only person liable to the client.
523. On May 1, 2016, M was indebted to P for P80,000 payable in 20 days. O, against
the will of M, proposed to P that he will pay M’s debt, and that M will be free from all
liabilities. P agreed to the proposal even without the knowledge of M. On June 1, 2016,
when P tries to collect from O, he finds that O is insolvent so P sues M. Decide.
a. M is liable , because is presumed to have guaranteed O’s solvency
b. M is not liable, because what took place is expromission where the substitution
of the debtor is without his consent and knowledge.
c. M is liable because he did not exercise due diligence in determining the
insolvency of O.
d. O is liable because he is guilty of fraud.
524. The jurisdiction for violation of the Anti-Money Laundering Act is vested to?
a. Municipal trial court c. Department of Justice
b. Regional Trial court d. Sandiganbayan
525. It refers to preferred shares that participates with common share after receiving
its dividends at preferred rate
a. Non-participating c. Participating
b. Cumulative d. Non-cumulative
526. A and B entered into a contract of marriage on February 1, 2019. The source of
obligation of the husband and wife as to their duties to each other arise from?
a. Law c. Quasi contract
b. Contract d. Quasi delict
527. A went to the Red Ribbon and ordered a customized cake with a price of P500
for the first birthday of his child. A and Red Ribbon orally agreed that delivery of the
cake will occur after one week and payment of the price will be made at the same time
of delivery. Which is CORRECT?
a. The contract is unenforceable because it is a sale of personal at a price of P500.
b. This contract for the piece of work is unenforceable because it is not covered by
statute of fraud.
c. The contract must be ratified first to be enforceable.
d. This contract must be in writing to be valid and binding.
528. Asyong orally offered to sell his three-hectare rice land to Bosyo for P10 million
pesos. The offer was orally accepted. By agreement, the land was to be delivered
through a notarized deed of sale and the price was to be paid exactly one month from
their oral agreement. Which statement is most accurate?
a. If Asyong refuses to deliver the land on the agreed date despite payment by
Bosyo, the latter may not successfully sue Asyong because the contract is oral.
b. If Asyong refused to deliver the land, Bosyo may successfully sue for fulfillment
of the obligation even if he has not tendered payment of the purchase price.
c. The contract between the parties is rescissible
d. The contract between the parties is subject to ratification by the parties
529. Which of the following does not belong to the group of a covered person under
the Anti money laundering act?
a. Bank c. Pre-need companies
b. Trust companies d. PAWNSHOP
530. It refers to shares which the issuing corporation can redeem or purchase
a. Founder’s c. Escrow
b. Preferred d. Redeemable
531. The following may be annulled on the ground of fraud, except?

a. The usual exaggeration in trade if the other party had an opportunity to know
the facts.
b. An expression of opinion which did not turn out to be true if made by an expert
and the other party relied on it.
c. Failure to disclose facts when there is duty to reveal them.
d. Misrepresentation made in bad faith.
532. A, B, C, D and E partners of ABCDE Partnership Poultry Farms. A, B and C are

appointed as managing partners with stipulation that none of the managing partners
shall act without the consent of the other two managing partners. On the date of
schedule delivery of 500 kilos of frozen dressed chicken ordered to purchase the
dressed chickens (which were already thawing) at 80% of the contract price. However,
only Partner A and Partner B were around to decide as Partner C, who was on a business
trip for the firm, could not be contacted due to poor communication signals. Which is
1CORRECT?
a. Partner A and Partner B cannot decide by themselves because managing

partners must act with unanimity.
b. Partner A and Partner B may decide by themselves since any further delay
would result in more losses to the firm.
c. Partner A and Partner B can decide since they constitute the majority of the
managing partners.
d. The absence of partner C cannot be alleged since there was a stipulation that
none of the managing partners shall act without the consent of the others
533. Mark without authority of Luke, owner of a car sold the same car worth 1m
pesos to Matthew for only Php 500 thousand pesos. The contract between Mark and
Matthew is
a. Void because of the absence of the consent from the owner, Luke
b. Valid because all of the essential requisites of a contract are present.
c. Unenforceable because Mark had no authority but he sold the car in the name
of Luke, the owner.
d. Rescissible because the contract caused lesion to Luke
534. The following are Non-Patentable Inventions and hence excluded from patent
protection, except?
a. Scientific theories c. Microbiological processes
b. Mathematical methods d. Aesthetic creations\
535. It refers to shares that have no assigned value, their value being dependent on
the changes in the profit of the corporation and the market value of the shares
themselves at the time the shares are issued
a. No-par value shares b. Common shares
a. Par value shares c. Preferred shares
536. On February 1, 2019, Dante obliged himself to give Carlito P500,000.00 if Carlito
will not marry Sofia on or before May 15, 2019. Which of the following statements is not
correct?
a. The obligation of Dante is demandable on May 1, 2019 if Sofia dies on the said
date and C has not yet married Sofia.
b. The obligation is extinguished if Carlito marries Sofia on May 15, 2019
c. The obligation of Dante is demandable if Carlito marries Sofia after May 15,
2019.
d. The obligation of Dante is demandable if it is already May 20, 2019 and Carlito
has not yet married Sofia
537. The following partnerships are required to be registered with Securities and
Exchange Commision for convenience and to prejudice third persons, EXCEPT.
a. Partnership when the partner’s total contribution is at least P3,000 in cash,
personal property or real property.
b. Partnership wherein partners contribution includes immovable or real property.
c. Limited Partnership
d. General partnership involving an industrial partner
538. The following are original work, except?

a. Pamphlets c. Letters
b. Periodicals d. Translations
539. A is the managing partner in A&B Company, X is indebted to A for P250,000 and
to the partnership for P750,000. When both debts mature, X pays A P250,000 and the
latter issued a receipt for his personal credit. The payment for P250,000 shall be
applied:
a. ½ favor of A and ½ in favor of the partnership.
b. To the debt owing to the partnership.
c. ¼ in favor of A and ¾ in favor for partnership.
d. To the whole debt owing to A.
540. A, a minor, B and C wrote and signed a promissory note which states “I promise to
pay D 3,000.” At the maturity date if the note, how much may D validly collect
from C if B becomes insolvent?
a. P10,000 c. P30,000
b. P20,000 d. P15,000
541. Which of the following is not correct?

a. The effect of the conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the fulfillment of the condition
b. When the obligation imposes reciprocal prestations upon the parties, the fruits
and interests during the pendency of the condition shall deemed to have been
mutually compensated
c. If the obligation is unilateral, the debtor shall appropriate the fruits and interest
received, unless the nature and circumstances of the obligation it should be
inferred that the intention of the persons constituting the same was different
d. In obligation to do or not to do, the courts shall determine in each case, the
retroactive effect of the condition that has been complied with
542. Which of the following is not negotiable under the negotiable instruments law?
a. Pay to E or order P20,000 (Sgd. M)
To: A- Accepted and payable 60 days from today
b. Pay to the order of J P20,000 (Sgd. E)
To N:- Accepted for P10,000
c. Pay to P or order P20,000(Sgd. J)
To C- Accepted if P tops the CPA board exams
d. Pay to T P10,000 30 days after sight (Sgd. G)
To H- Accepted payable on February 14, 2019
543. A, who is dominated in LipaCity , has an obligation to deliver a 2018 Ltd. Edition
Black Fortuner to B, who is domiciled in Batangas City. A 2018 Ltd. Edition Black
Fortuner is located in Tanauan City at the time of perfection of obligation while another
2018 Ltd. Edition Black Fortuner is located in Tagaytay City at the agreed date of
delivery. Where shall the car be delivered by A to B?
a. Lipa City c. Tanauan City
b. Batangas City d. Tagaytay City
a. A solidary creditor can assign his right even without the consent of the others
b. The remission of the whole obligation, obtained by one of the solidary debtors
shall entitle him to reimbursement from his co- debtors
c. The condition not to do an impossible thing shall be considered as not having
been agreed upon
d. Obligations for whose fulfillment a day certain has been fixed shall be
demandable at once.
545. One is not negotiable

a. A promises to pay to the order of B P1,000 with 12% interest thereon where the
period from which interest is to be counted is not specified
b. A promises to pay to the order of B P1,000 in four monthly installments
beginning June 12, 2019 with a provision that if A defaults in the payment of
any installment, the entire balance including the unpaid installment shall
become due and demandable
c. A promises to pay to the order of B the sum of US$1,000 payable in pesos at the
rate of exchange prevailing on January 1, 2019
d. A promises to pay to the order of B P1,000 with an agreement to pay attorney’s
fees and costs of collection
546. What is the perspective period of the right to file an action based in quasi-delict,
quasi contract, oral contract and written contract, respectively?
a. 4 years; 6 years; 6 years; 10 years
b. 4 years; 5 years; 6 years; 8 years
c. 1 years; 4 years; 5 years; 6 years
d. 2 years; 3 years; 4 years; 5 years
547. Upon the proposal of a third person, a new debtor substituted the original debtor
without the latter’s consent. The creditor accepted the substitution. Later,
however, the new debtor became insolvent and defaulted in his obligation. What is
the effect of the new debtor’s default upon the original debtor?
a. The original debtor is freed liability since novation took place and this relieved
him of his obligation
b. The original shall pay or perform the obligations with recourse to the new
debtor
c. The original debtor remains liable since he gave no consent to the substitutions
d. The original debtor shall pay or perform 50% of the obligation to avoid unjust
enrichment on his part
548. A promissory note reads:

“I promise to pay B or order P100,000. Sgd. A”
B negotiated the note to C. Later, Y stole the note from C. Y indorsed the note to D.
Which of the following statements is correct?
a. If A pays D in good faith, A’s obligation is extinguished
b. D can collect from B
c. D cannot collect from A
d. D can collect from c
549. A has three outstanding due and demandable obligation to B consisting of: (1)
Accounts Payable in the amount of P1,000,000; (2) Notes Payable in the amount of
P1,000,000 which is solidary debt with G; (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 B and designated
the payment to the accounts payable. In which debt shall the payment be applied by B?
a. Accounts Payable c. Loans Payable
b. Notes Payable d. Mortgage Payable
550. A bought a business class ticket from B Airlines. As she checked in, the manager
downgraded her to economy on the ground that a Congressman had to be
accommodated in the business class. A suffered discomfort and embarrassment of the
downgraded. She sued the airlines for quasi- delict but B Airlines countered that, since
her travel was governed by a contract between them, n quasi- delict could arise. Is the
airline correc?
a. No, the breach of contract may in fact be tortious as when it is tainted as in
this case with arbitrariness, gross bad faith and malice
b. No, denying A the comfort and amenities of the business class as provided in
the ticket is a tortious act
c. Yes, since the facts show a breach of contract, not quasi-delict
d. Yes, since quasi-delict presupposes the absence of a pre- existing contractual
relation between the parties

“B assigned the note to C. Later, Y stole the note from C. Which of the following
statements is correct?
a. If A pays Y in good faith, A’s obligation is extinguished
b. C can collect from B
c. C cannot collect from either A or B
d. C can collect from A
552. A, B and C wrote and signed a promissory note which states “We promise to pay
D and E P60,000.” At the maturity date of the note, D indorsed back the promissory
note to A. How much obligation is extinguish and by what mode of extinguishment of
obligation?
a. P20,000 by confusion c. P30,000 by remisson
b. P60,000 by compensation d. P10,000bymerger
553. A borrowed P1M from B and C who acted as solidary creditors. When the loan
matured, B wrote a letter to A demanding payment of the loan directly to him. Before A
could comply, C went to see him personally to collect and he paid him. Did A make a
valid payment?
a. No, since A should have split the payment between B and C
b. No, since B, the other solidary creditor, already made a prior demand for
payment from A
c. Yes, since the payment covers the whole obligation
d. Yes, since C was a solidary creditor, payment to him extinguished the
obligation.
554. Consider these two statements is correct?

Statement 1- An instrument originally payable to order maybe converted into a bearer
instrument
Statement 2- An instrument originally payable to bearer order maybe converted into an
order instrument
a. True, true b. False, false
c. False, true d. True, false
555. A has a n obligation to deliver a specific cellphone to B but a specific laptop may
be submitted lieu of the specific cellphone. Who has the right of choice in this type of
obligation?
a. A unless there is stipulation of the contrary
b. B unless there is stipulation of the contrary
c. Always A
d. Always B
556. A and B both undertook a contract to deliver C in Manila a boat docked in Subic.
Before they could deliver it, however, the boat sank in a storm. The contract provides
that fortuitous event shall not exempt A and B from their obligation. Owing to the loss
of the motor boat, such obligation is deemed converted into one of the indemnity for
damages. Is the liability of A and B join or solidary ?
a. Neither solidary nor joint since they cannot waive the defense of fortuitous
event to which they are entitled.
b. Solidary or joint upon the discretion of C
c. Solidary since A and B failed to perform their obligation to deliver the motor
boat
d. Joint since the conversion of their liability to one of indemnity for damages
made it joint
557. Which of the following statements is correct?

a. If the maker is an infant, the promissory note is not negotiable
b. Love and affection can be a valid consideration
c. Indorsement of an infant transfers title to a negotiable instrument
d. Parties prior to the infant can escape liability by invoking such infancy
558. In which type of delay is consignation the proper legal remedy on the part of
injured party?
a. Mora accipiendi c. Mora obligor
b. Mora solvendi d. Mora pactum
559. A natural obligation under the New Civil Code of the Philippines is one which
a. The obligor has a moral obligation to do, otherwise entitling the obligee to
damages
b. Refers to an obligation in writing to do or not to do
c. The oblige may enforce through the court if violated by the obligor
d. Cannot be judicially enforced but authorizes the oblige to retain the obligor’s
payment or performance

“I promise to pay to the order of b P10,000, 30 days after date” Sgd. A
A issued the promissory note to B who indorsed it to C. Then X stole the note from C,
forged the signature of C and negotiated it to D and D to E to F, the holder.
Questions:
1. Can F collect from A on maturity?
2. If after giving the proper notice of dishonor to all the parties secondarily liable,
can F collect from B?
Answers:
1. Yes, because the signature of A is genuine and the instrument, as regards A was
complete and delivered
2. Yes, as an indorser B warrants that the instrument is genuine and that it is valid
and subsisting
a. Both answers are correct c. First is correcty, second is wrong
b. Both answers are wrong d. First is wrong, second is correct
561. Using the preceding no.

Questions:
1. Can F collect from C? 2. Against whom can F collect?
Answers:
1. No, because C’s signature or indorsement was forged therefore it is wholly
inoperative
2. F can collect from either D or E because their signatures are genuine and the
instrument becomes operative against them
a. Both answers are correct c. First is correcty, second is wrong
b. Both answers are wrong d. First is wrong, second is correct
562. A h sab obligation to pay P100,000 to B but the obligation states that “A will pay
the obligation when his means permit him to do so.” Which of the following
statements is CORRECT?
a. The obligation is due and demandable.
b. The obligation is subject to a suspensive condition.
c. The obligation is subject to resolutory period.
d. The court may fix the suspensive period of the obligation.
563. When one exercises a right recognized by law, knowing that he thereby causes an
injustice to another, the latter is entitled to recover damages. This known as the
principle of
a. Res ipsa loquitur c. Vicarious liability
b. Damnum absque injuria d. Abuse of rights
564. A has an outstanding obligation in the amount of P100,000 to C wit G serving as

guarantor and P pledging his car to secure the fulfillment of A’s obligation. At the
maturity date of the obligation, P paid P100,000 to C without the knowledge of A.
Which of the following is CORRECT?
a. P may only recover from A but only in so far as the payment is beneficial to A.
b. P cannot recover from A because the payment is without the knowledge or
consent of A.
c. P may go after G if A will not be able to reimburse P because of insolvency.
d. P may recover from C in case of non-reimbursement by A based on the principle
of unjust enrichment.
565. When bilateral contracts are vitiated with vices of consent, they are rendered
a. Rescissible b. Void c. Unforceable d. Voidable
566. A delivers to B a promissory note payable to the order of B without specifying the
amount but A authorized B to place the amount of P500 in the promissory note
which was signed by A. B, in violation of the instruction of A placed P5,000 as the
amount payable. Later B indorsed the note to C, the holder C
a. Can recover from either A or B
b. Cannot recover from either A or B, if he knows the defect
c. Cannot recover from A but can recover from B if he knows the defect
d. Cannot recover from A but can recover from B if he does not know the defect
567. Which of the following obligations is immediately due and demandable?

a. Obligation with a suspensive condition
b. Obligation in diem
c. Obligation ex die
d. Obligation payable as possible
568. May a spouse freely donate communal or conjugal property without the consent of
the other?
a. Absolutely not, since the spouse co-own such property
b. Yes, for properties that the family may spare, regardless of value
c. Yes, provided the donation is moderate and intended for charity of family
rejoicing
d. Yes, in a donation mortis causa that the donor may still revoke in his lifetime
569. A made a promissory note payable to the order of B. A delivered it to B who

negotiated it to C. C indorsed the note to D who is 16 years old. D indorsed it to F,
the holder. F presented the note to A who dishonored the instrument. Which is
correct?
a. F can hold B and C liable but not D and E
b. F can hold D and E liable but not B and C
c. D’s indorsement passes title to E and F making D liable as indorser
d. F can hold all indorser liable except D
570. What is the status of oral contract of lease of public streets or throughfares
entered by a city government with private market stallholder at a monthly rental of
500?
a. Unenforceable c. Voidable
b. Rescissible d. Void
571. Contracts take effect only between the parties or their assigns and heirs, except
where the rights and obligations arising from the contracts are not transmissible by
their nature, by stipulation, or by provision of law. In the latter case, the assigns or
the heirs are not bound by the contracts. This is known as the principle of
a. Relativity of contracts c. Mutuality of contracts
b. Freedom to stipulate d. Obligatory force of contracts
572. One is not a condition to be a holder in due course

a. That it is complete and regular upon its face
b. That he became the holder of it before it was overdue and without notice that it
had been previously dishonored if such was the fact
c. That at the time it was negotiated to him it has no infirmity or defect in the title
of the person negotiating it
d. That he took it in good faith and for value
573. Which of the following executory contracts is NOT requires to be in writing to be
enforeceable under the Statute of Fraud?
a. Contract of sale of a condominium unit at a price of P400
b. Contract for a piece of work of a furniture at a price of P500
c. Contract of guaranty
d. Contract of lease of land for a period of two years at a monthly rental of P300
574. When the donor gives donations without reserving sufficient funds for his support
or for the support of his dependents, his donations are
a. Rescissible, since it results in economic lesion of more tha 25% of the value of
his properties
b. Voidable, since his consent to the donation is vitiated by mindless kindness
c. Void, since it amounts to wanton expenditure beyond his means
d. Reducible to the extent that the donations impaired the support due to himself
and his dependents
575. A issued a negotiable promissory note to B. There was a total failure of

consideration. B indorsed the note to C, a holder in due course. C indorsed the note
to D who knew of the failure of consideration. Which is correct?
a. D may collect from A
b. D may collect only from B
c. D may collect only from C
d. D may collect from either B or C but not from A
576. A, an illiterate, borrowed P100,000 from B. Aside from that, A mortgage his land to
B which the latter accepted to secure the payment of the loan. B prepared a deed
of sale with a right to repurchase of the land at a price of P100,000 which A signed
after B explained that such document evidenced their true agreement. What is the
proper legal remedy available to A?
a. Action of reformation of instrument
b. Action of rescission of contract
577. Anne owed Bessy P1M due on October 1, 2014 but failed to pay her on due date.
Bessy sent a demand letter to Anne giving her 5 days from receipt within which to
pay. Two days after receipt of the letter, Anne personally offered to pay Bessy in
manager’s check but the latter refused to accept the same. The 5 days lapsed. May
Anne’s obligation be considered extinguished?
a. Yes, since Bessy’s refusal of the manager’s check, which presumed funded
amounts to a satisfaction of the obligation
b. No, since tender of payment even in cash, if refused, will not discharge the
obligation without proper consignation in court
c. Yes, since Anne tendered payment of the full amount due
d. No, since a manager’s check is not considered legal tender in the Philippines
578. A is included through simple fraud (fraud in inducement) committed by B to issue a

promissory note in favor of B. B indorsed the note to C. C has notice of fraud but
did not take part in it. C indorsed the note to D, a holder in due course, D indorsed
the note to E who knows how the note was obtained but without being a party to
the fraud. Which is correct? E is
a. Not a holder in due course and the defense of fraud in inducement can be setup
against him
b. A holder in due course having derived his title from D, a holder in due course
c. A holder in due course but he cannot recover from A because he knows how the
note was obtained
d. Not holder in due course but has all rights of such holder in respect of A, B and
C having derived his title from D
579. The presence of a vice of consent vitiates the consent of a party in a contract and
this renders the contract
a. Rescissible c. Voidable
b. Unenforceable d. Void
580. The note reads as follows:

I promise to pay B or order P200,000, 30 days after date. Sgd. A.
The above promissory note was issued by A to B on February 15, 2018 for the Lancer car
sold by A. A few days later, February 26, 2018, A was deprived of the car because it
turned out to be a stolen car and the true owner was able to recover it from A. On
February 17, 2018, B negotiated the promissory note to C. Terms- 50% payable on
February 17, 2018 and the balance of P100,000 payable on February 28, 2018, C paid
the P100,000 on February 17, 2018 as agreed upon. On Feb. 27, 2018, C learned of the
unlawful consideration between A and B. Despite such knowledge, C paid the P100,000
balance on Feb. 28, 2018. On maturity of the instrument,
a. C can collect the P200,000 because he became a holder in due course prior to
his knowledge of the unlawful consideration
b. C can not collect because he is only a holder for valued and A has a personal
defense
c. C is not holder in due course but he can still collect P200,000from A because the
note was negotiated to him prior to his knowledge of the unlawful
consideration
d. C can collect only the first P100,000
581. A delivered a specific calculator to B so that the latter will be able to use it for a
period of one month without any rental payment. In case if doubt in the incidental
circumstances of this contract, how shall it be interpreted?
a. It shall be interpreted in favor of greatest reciprocity of interest.
b. It shall be interpreted in such a manner to make the contract null and void.
c. It shall be interpreted in favor of least transmission of rights.
d. It shall be interpreted in favor of the beneficiary B.
582. In an obligation to give a determinate thing, what rights are available to the
creditor?
First Answer- To compel specific performance
Second Answer- to recover damages in case of breach of the obligation
Third Answer- to ask that the obligation be complied with at the expense of the debtor
a. All answers are correct
b. Only the first and second answers are correct
c. Only the first answer is correct
d. All answers are wrong
583. A makes a note payable to the order of B. The note is indorsed successively by B to
C, C to D, D to E, and E to F, the present holder. Suppose the note is dishonored in
the hands of F, which of the following is correct?
a. If F gives notice only to D, the notice operates also a notice to E, a party
subsequent to D
b. If D after having been given notice by F, gives notice to E, the effect would
make
E still liable to the instrument
c. If F gives notice E, E may notify B, C and D
d. If F gives notice to D, the notice operates as a notice to B and C
584. A, an insane, sold his specific laptop to b at a price of P10,000. After obtaining
knowledge of the contract, C, a childhood friend of A, filed an action before the
court for annulment of the contract of sale. What principle of contract is violated
by the filing of such action?
a. Mutuality of contract c. Liberality of contract
b. Relativity of contract d. Legality of contract
585. The following contracts, except one, are void ab initio. Which is the exception?
a. That those object is outside the commerce of men
b. That those objects did not exist at the time of the transaction
c. That which contemplates an impossible service
586. A makes a note payable to B or order. The following are the indorsers of the note
in the order of their indorsements: B-C-D-E-F- (holder)-G (subsequent holder). The
note is dishonored in the hands of F, who notifies B, C, D and E. Which is not
correct? The notice
a. Given by F to B, inures to the benefit of C, D, E and G
b. To C inures to the benefit of D, E and G
c. To D inures to the benefit of E and G
d. . To E inures to the benefit of B, C, D and G
587. 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?
a. Action of reformation of instrument
b. Action of rescission of contract
c. Action of annulment of contract
d. Action of declaration of nullity of contract
588. Legal compensation is allowed when one of the debts
a. Arises from a sale of real property made by a minor to a capacitated person
b. Arises from the obligation of a depositary
c. Consists in civil liability arising from a penal offense
d. Arises from a claim for support by gratuitous title
589. A makes a note payable to bearer and delivers it to B. In turn, B negotiated it by

mere delivery to C, who indorses it specially to D. D negotiates it by special
indorsement to E, who negotiates it to F by mere delivery. A did not pay. One is
not correct?
a. F may go after E, his immediate transferor
b. F cannot hold D liable because F did not acquire title through the indorsement
of D
c. D can hold C liable as C is not only his immediate transferor but he got his title
through C’s special indorsement
d. F can hold B and C liable because they are parties prior to F
590. A sold in writing an authentic Coach Bag at a price of P10,000 to B. At the time of
delivery of the bag, A delivered a counterfeited Coach Bag with a price of P7,400
only. What is the proper legal remedy on the part of B?
a. Action for rescission of rescissible contract by reason of lesion of more than ¼
the value of the authentic bag
b. Action for damages for breach of contract by reason of fraud in the
performance of contract
c. Action for annulment of voidable contract by reason of dolo causante
d. Action for declaration of nullity of contract by reason of illegality of contract.
591. This is not a characteristic of a void or inexistent contract.

a. The right to raise a defense of illegality cannot be waived
b. The action or defense for declaration of the nullity or inexistence of the
contract does not prescribe
c. Not subject to ratification
d. Defense of illegality of the contract is available to third persons whose interest
are not directly affected
592. When a bill of exchange is payable on demand, presentment must be made a. On
the day it falls due
b. Before the maturity date
c. Within a reasonable time after its issue
d. Within a reasonable time after the last indorsement thereof
593. A borrowed P10,000 from B. B filed an action to collect a sum of money against A
which resulted to the issuance of writ of attachment. The cellphone of A is the first
to attached by the sheriff. Afterwards, A orally sold and delivered his laptop to C at
a price of P5,000. Payment of the price will happen after one week from the
perfected of contract. What is the status of contract of sale of laptop?
a. Rescissible c. Perfectly valid
594. Reformation is not the proper remedy if
a. The mutual mistakes of the parties cause the failure of the instrument to
disclose their real agreement
b. One party was mistaken and the other acted fraudulently or inequitably in such
a way that the instrument does not their true intention
c. There was mistake, fraud, inequitable conduct or accident which prevented the
meeting of the minds of the contracting parties.
d.The true intention of the contracting parties is not expressed in the instrument
purporting to embody the agreement by reason of mistake, fraud, inequitable
conduct or accident
595. This is not allowed
a. Pay to the order of A and B P10,000 c. Pay to the order of A and B P10,000
To C and D Sgd. E To C or D Sgd. E
b. Pay to the order of A or B P10,000 d. Pay to the order of A or B P10,000
To C and D Sgd. E To C Sgd. E
596. Under the New Civil Code of the Philippines, what is the moment of perfection of
contract entered into through telegram?
a. The contract is perfected from the moment the acceptance is declared or
made.
b. The contract is perfected from the moment the offeree transmits the
notification of acceptance to the offeror.
c. The contract is perfected from the moment that the notification of acceptance I
in the hands of the offeror.
d. The contract is perfected from the moment the offeree’s acceptance comes to
the knowledge of the offeror
597. The following contracts are defective. Which one is unenforceable?

a. Contract of sale by which a guardian acquires the property of his ward without
the approval of the court.
b. Contract of sale by which a city mayor acquires a portion of the city part
pursuant to a city ordinance enacted by the City Council
c. Contract whose object is outside the commerce of man
d. Those were both parties are incapable of giving consent to a contract
598. Statement 1- Instruments falling due or becoming payable on Saturday are to be

presented for payment, at the option of the holder, on the next succeeding
business day or before 12:00 noon on Saturday when the entire day is not a
holiday
Statement 2- A waiver of protest, whether in the case of a foreign bill of exchange or
other megotiable instrument is deemed to be a waiver only of a formal protest and not
of presentment and notice of dishonor
a. True, true b. False, true c. True, false d. false, false

payable in 50 years at a monthly rental of P10,000 per month. After payment of
several installments totaling P1,200,000, B defaulted in the payment of remaining
installments which resulted to the cancelation of the contract of sale after the
lapsing of the grace period prescribed by law. What is the amount of cash
surrendered value to be received by B from S as a result of cancellation?
a. P600,000 c. P840,0
b. P900,000 00
d. P960,0
00
600. Which of the following is not a requisite of fraud?

a. There must be a misrepresentation or concealment
b. The fraud must be serious
c. A party is induced by fraud to enter into contract
d. Those were both parties are incapable of giving consent to a contract
601. The articles of incorporation differ from the by-laws in that the articles of
incorporation are
a. The rules of action adopted by a corporation for its internal government
b. Adopted before or after incorporation
c. A condition precedent in the acquisition by a corporation of a juridical
personality
d. Approved by the stockholders if adopted after the incorporation
602. In which of the following instances are the goods still in transit which will allow the
unpaid seller to exercise his right of stoppage in transit in case of insolvency of the
buyer?
a. If the buyer obtains delivery of the goods before arrival at the appointed
destination.
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is
holding the goods 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.
d. If the goods are rejected by the buyer, and the carrier or other bailee continues
in possession of them, even if the seller has refused to receive them back.
603. J agreed to pay his debt and in case of non- payment, to render free service as a
servant. Is the obligation valid.
a. No, the obligation to pay and to render service as servant is contrary to laws
and morals.
b. Yes, if the services will be rendered in satisfaction of the debt and in case of
non- performance, the proper remedy is specific performance.
c. No, the nullity of the condition carries with it the nullity of the principal
obligation
d. Yes, in so far as the obligation to pay but not as regards the undertaking to
render domestic services for free.
604. If the remaining directors constitute a quorum, they can fill up the vacancy
a. In case of removal of a director
b. In case of expiration of term of a director
c. If there is an increase in the number of directors
d. In case of resignation of a director
605. S sold his lot with an area of 100SQm to B at a selling price of P1,000 per SQM.
After delivery of the lot, B discovered that the actual area is only 91 SQM. What is
the legal remedy available to B?
a. B may ask for proportionate reduction of price and must pay P91,000 only.
b. B can ask for cancellation of contract of sale.
c. Either A or B.
d. Neither A nor B.
606. E, a manufacturer of locks, hired A for 2 years, on the condition that for 5 years, A
should not engage in competitive locks business. After one year, A left for reasons
of health. Shortly afterwards, after regaining his health, A competed with E, who
now seeks to restrain him from such competition, will the action prosper?
a. No, the restriction is void, because it is an unreasonable restraint of trade
b. Yes, it is reasonable restraints, considering that it was only for 5 years
c. No, the contract of employment
d. Yes, if E will allow A to complete the 2 years services agreed upon
607. A, B, C, D, E, F and G are the duly elected directors for 2018of Delicious
Corporation whose article of incorporation provide for 7 directors. On August 1,
2018, Directors A, B, C, D and E met to fill the two vacancies in the board brought
about by the valid removal of F for disloyalty to the corporation and the death of
G. In the said meeting, the remaining directors voted for X to replace F and Y, a son
of G to replace his father. Both X and Y are owners of at least one share of stock of
the corporation. The election of X and Y by the remaining directors
a. Valid for both X and Y
b. Not valid for both X and Y
c. Valid with respect to X, not valid with respect to Y
d. Not valid with respect to X, valid with respect to Y
608. A, B and C are co-owners of a rural lot with an area of 1,000 SQM in the ration of
6:1:3, respectively. The co-owned lot is bounded by farm lots of D and E with an
area of 50 SQM and 75 SQM, respectively. A sold his share of the co-owned lot to
F. Who shall have the preferred right to repurchased the lot by A to F?
a. B because his share in the co-owned lot is smaller.
b. B and C with an area of 150 SQM and 450 SQM, respectively.
c. B because his adjoining rural lot has smaller area.
d. E because his adjoining rural lot has larger area.
609. Which of the following is not correct in rescission?

a. Cannot be availed when the party who has been damaged has other legal
remedy
b. The person who seeks rescission must be able to return what he ought to
return
c. The object of the contract is not in the possession of third persons who have
acquired it in good faith
d. Can be demanded by any of the contracting parties
610. In the meeting of the board of directors of Gold Corporation, a construction

company held on March 31, 2018, directors A, B, C, D and E were present among
the 9 directors. The meeting had for its agenda the following:
I. The appointment of new treasurer
II. The approval of the contract for the purchase of cement worth P50,000
from X Supplies Co.
When the voting took place, directors A, B, C and D voted for the election of Y as the
new treasurer, and directors A, B and C voted for the approval of the contract with X
supplies
a. Both corporate acts are valid
b. Both corporate acts are not valid
c. The election of Y as a new treasurer is valid, the approval of the contract with X
supplies is not valid
d. The election of Y as a new treasurer is not valid, the approval of the contract
with X supplies is valid
servitude?
a. 40 days from the date of contract of sale or from the discovery of burden
d. 3 days from the date of contract of sale or from the discovery of burden
612. A owes B P10,000 with 12% interest. B owes C P1,200. It was agreed between A
and B that A would give the interest of P1,200 to C and C communicated his
acceptance of the stipulation between A and B. There is
a. Stipulation pour atrui c. Compensation
b. Pactum commissorium d. Assignment
613. The board of directors of a corporation consists of nine (9) members, where two
(2) were removed and two (2) have resigned, who fills up the vacancy?
First answer- the remaining members of the Board
Second answer- the stockholders
a. Both answers are true c. Only the first answer is true

b. Both answers are false d. Only the second answer is true
614. A and B are legally married and their property regime is governed by absolute
community of property. A orally sold his specific cellphone to B at a price of P500
with a book value of P800 after B pointed a gun to A. Delivery of the specific
cellphone will happen after three years. What is the status of the contract of sale?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
615. – A donated to B a real property, the donation is made orally.
-- A sold to B a real property, the sale is made orally.
a. Both contracts are valid
b. Both contracts are void
c. Only the first contract is valid
d. Only the second contract is valid
616. Using number 25, except that three (3) have resigned, who fills up the vacancy?
First answer- the remaining members of the Board
Second answer- the stockholders
a. Both answers are true c. Only the first answer is true
b. Both answers are false d. Only the second answer is true
617. B rented the specific truck of S. After the end of the contract, S sold the property
to B. As a result of sale, B continues to have possession of the property. What type
of constructive delivery is present in this contract of sale?
a. Traditio clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio constitutum possessorium
618. If an obligation is with a penal clause

Statement A- Proof of actual damages suffered by the creditor is not necessary in order
that the penalty may be demanded.
Statement B- When the debtor is guilty of fraud in the fulfillment of the obligation, the
creditor can demand payment of damages and interest in addition to the penalty.
a. True, True c. False, False
b. False, True d. True, False
619. May rightfully question an ultra-vires act of a corporation, except a.
Stockholders b. State
c. Competitors d. Creditors, if fraud is charged
620. A borrowed P100,000 from B and mortgage his house to secure the payment of
the loan. The contract of real estate mortgage is not notarized and not registered
with Registry of Deeds. The contract of real estate mortgage provides that A is
prohibited from selling the mortgaged house and 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?
or real estate mortgage.
b. B becomes the owner of the mortgages house upon default of A.
c. The contract of real estate mortgage is null and void because of the stipulation
of pactum commissorium which is contrary to law and public policy.
621. A, B, and C solidarily owe D and E P30,000. D remitted the entire obligation in favor
of A without the consent of E. The effect is
a. A cannot recover from B and C because remission in her favor extends to the
benefit of B and C
b. A can recover from B and C their respective share of the debt
c. The obligation is not extinguished until A collects from B and C
d. The obligation is not yet extinguished until E is paid by D of her share of the
credit
622. As regards treasury shares, which is not correct?

a. They have no voting rights as long as they remain in the treasury
b. They are considered as part of earned or surplus profits and therefore
distributable as dividends
c. They are not entitled to dividends
d. They may be distributed as property dividend if there are retained earnings
arising from the business of the corporations
623. P borrowed P1,000 to C. P pledged and delivered his specific cellphone to C as

collateral for the loan. The contract of pledge provides that C may recover the
deficiency as a result of foreclose sale. P failed to pay his obligation at the maturity
date which prompted C to sell the pledged cellphone at public auction. The
cellphone was sold at a price of P900. Which of the following statements is
CORRECT?
a. The contract of pledge is extinguish but the contract if loan is extinguish up to
P900 only.
b. Pledgee P may still recover the deficiency of P100 because there is stipulation
to that effect.
c. The contract of pledge is not extinguish.
d. Both contract of pledge and contract of loan are extinguish by the public sale.
624. In quasi-delict, the liability of a person who is held liable for the fault or negligence
of another person who is under his care or responsibility shall cease if.
a. There was contributory negligence on the part of the person injured
b. He was not present at the time of the act, hence it was not possible to him to
prevent the damage.
c. He observed ordinary diligence to prevent the damage.
d. He observed the diligence of a father of a good family
625. A corporate officer or director cannot, take advantage for their personal benefit a
business opportunity which the corporation is financially able to undertake
a. Doctrine of corporate fiction
b. Trust fund doctrine
c. Doctrine of corporate opportunity
d. Doctrine of limited capacity
626. 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 CORRECT?
a. The contract of chattel mortgage is null and void in so far as the contracting
parties are concerned because the subject matter is a land.
b. C cannot foreclose the chattel mortgage over the land because the subject
matter must be a movable property.
c. C may still foreclose the chattel mortgage on the land on the basis of doctrine
of estoppel.
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.
627. What is the effect of the loss of the prestations in alternative obligation where the
right of choice belongs to the creditor and the loss is due to the fault of the
debtor? First answer: If only one remains the obligation still subsists, but it ceases
to be alternative as it becomes a simple obligation.
Second answer: If 2 or more objects remain, the obligation still subsists and the choice is
limited to the remaining objects.
Third answer: If none remains, the obligation is extinguished because the debtor chose
not to give anything.
c. Only one of the answers is correct
628. The assets of the corporation are represented by its capital stock are to be
maintained unimpaired that there can be no distribution of such assets among the
stockholders without provision being first made for the payment of corporate
debts
a. Doctrine of corporate fiction
b. Trust fund doctrine
c. Doctrine of corporate opportunity
d. Doctrine of limited capacity
629. Teresa, Olga, Pamela and Sonia, partners in TOPS company Limited, a trading
company, have contributions of P50,000 each. Teresa and Olga are general
partners; Pamela, a limited partner; and Sonia, a general-limited partner. TOPS
Company Limited purchased merchandise on credit from Moret Sales Co.
amounting to P180,000. On due date, however, TOPS Company Limited was
unable to pay. Accordingly, Moret Sales Co. filed a case of collection against the
partnership which by then had assets amounting to P150,000. From whom may
Moret Sales Co. collect the sum of P180,000?
a. he partnership for its assets of P150,000;thereafter, from Teresa and Olga at
P150,000 each from their separate assets.
b. Teresa and Olga only at P90,000 each from their separate assets.
c. The partnership for its assets of P150,000;thereafter from Teresa, Olga, and
Sonia at however, Sonia can recover P5,000 each from Teresa and Olga.
d. Teresa, Olga and Sonia at P60,000 each. Thereafter, Sonia can recover from
Teresa and Olga P30,000 each
630. A owes B P20,000 which became due on December 20, 2011. On that date, A
offered P 10,000, the only money he then had, But B refused to accept the
payment. Thereafter A met, C, B’s 23 year old daughter, to whom she gave the
P10,000 with the request that she turn the money over to her mother. The money
was stolen while in C’s possession. How much many B still recover from A?
a. P20,000 b. P 10,000 c. P15,000 d. P0
631. The corporation shall be deemed dissolved and its corporate powers cease, if from
the date of its incorporation, it does not formally organize and commence the
transaction of its business or the construction of its works within
a. 4 years b. 3 years c. 2 years d. 5 years
632. T is indebted for P5,000 to MACE Trading Company, a partnership managed by M

to whom T also owes P10,000. The two debts which are both demandable are
unsecured. T remits P4,500 to M in payment of his debt to him accordingly, M
issues a receipt for his own credit. To which credit should the payment be applied?
a. To M’s credit because the payment made by T is intended for his debt to M
who issues hid own receipt.
b. To both the partnership credit and M’s credit proportionately at P1,500 and
P3,000, respectively.
c. To M’s credit because the amount is greater than that of the partnership credit.
d. To the partnership credit because the managing partner should not prefer his
own interest to that of the partnership.
633. A, wife of B and daughter of C, while employed in a jewelry store owned by D

embezzled P100,000 belonging to said jewelry store. In order to prevent her
criminal prosecution for estafa, B and C signed a document obligating themselves
jointly and severally to pay D the amount embezzled plus interest. Because of their
failure to comply with their promise, D brought an action against B and C. Will the
action prosper?
a. Yes, both knowingly and voluntarily agreed to assume the obligation of A
b. No, C should not have been included because A is no longer under his Authority
c. Yes, but only in so far as B is concerned because husband and wife are required
by law to support each other
d. No, it is considered contrary to public policy to allow parties to make an
agreement designed to prevent prosecutions for crimes.
634. A representative action where a stockholder brings an action in the name and in
behalf of the corporation and any relief obtained belongs to the corporation and
not to the stockholders individually or collectively
a. Individual suit b. Derivative suit c. Representative suit d. Corporate suit
635. B, E, A, U, T and Y are partners in BEAUTY Enterprises, a dealer in cosmetics and

other beauty products, with contributions of P60,000; P50,000; P40,000; P30,000;
P20,000 and P10,000, respectively. No one appointed as manager in the articles of
copartnership. Which is CORRECT?
a. B is the manager because she made the biggest investment.
b. Every act in the ordinary course of business will have to be decided by the
majority determined on a per head basis.
c. Every act in the ordinary course of business will have to be decided by the
controlling interest (biggest investment) although the partners owning them do
not constitute the majority.
d. All partners are agents and managers of the partnership and any one of them
may perform acts of administration.
636. A contract in which a person literally contracts with himself as

a. Adhesion contract c. Accessory contract
b. Auto contract d. Unilateral contract
637. A non-voting stock may vote in the following corporate acts, except in case of a.
Approval
b. Merger or consolidation
c. Increase or decrease in capital stock
d. Sale, lease, exchange, mortgage, pledge or other disposition of all or
substantially all of corporate property
638. PATOK Enterprises, a partnership engaged in the business of renting out video
films, is owned by P, A, T, O, and K with K as the manager. D owes PATOK
Enterprises P6,000 and O, P4,000. Both debts are unsecured and already due. D
pays O P4,000 for which O issues her own receipt. Which is CORRECT?
a. The payment should be applied to O’s credit only.
b. The payment should be applied to PATOK’s credit only.
c. The payment should be divided proportionately between PATOK and O, at
P2,400 and P1,600, respectively.
d. The payment should be divide equally between PATOK and O at P2,000 each.
639. The statement “ Contracts shall be obligatory in whatever form they have been
entered into provided all the requisites for their validity are present” refers to
a. Real contract c. Formal contracts
b. Consensual contract d. Solemn contracts
640. One of the following acts maybe performed by the executive committee of a
corporation. Which is it?
a. Declaration of stock dividends
b. Filling of vacancies in the board
c. Amendment or repeal of the by-laws or adoption of new by-laws
d. Approval of contracts in the ordinary course of business
641. F, A, S, and T are partners in FAST Motorparts Company, a dealer of car spare
parts. F, A, and S invested P500,000; P200,000 and P300,000, respectively. T is an
industrial partner who manages the partnership. The partners have stipulated that
F shall be exempted from liability to third persons. At the end of three years, the
assets of the partnership have dwindled to P220,000 while its liabilities to third
persons have balanced of P340,000. How much ultimately will be the share of each
partner after payment to third persons and the settlement among the partners?
a. P30,000 each partner
b. F-P60,000; A- P24,000; S- P36,000; T- None
c. F-None; A- P48,000; S- P72,000; T- None
d. F-None; A, S and T of P40,000 each.
642. The pre-nuptial agreement of H and W, husband and wife, provides for complete
separation of property. Later, H with violence and intimidation forced W to sell
him(H),
W’s pieces of jewelry. The sale is
a. Recissible, if W suffered a lesion of more than ¼ of the value of the property
b. Voidable, because the consent of W is vitiated
c. Unenforceable, if the value is at least P500
d. Void, because husband and wife are not allowed to sell property to each other.
643. A corporation may acquire its own shares for a legitimate purpose provided it has
unrestricted retained earnings. In which of the following acquisition is the
requirement of unrestricted retained earnings not imposed?
a. When the acquisition is made to eliminate fractional shares
b. When delinquent shares are acquired in delinquency sale
c. When redeemable shares are repurchased in accordance with the terms
provided in the articles of incorporation
d. When shares are acquired from stockholders who exercise their appraisal right
644. A person admitted as a partner into an existing partnership shall be liable up to the
extent of his separate assets for what obligation?
a. Obligation of the partnership existing at the time of his admission only if there
was a stipulation.
b. Obligation of the partnership incurred after his admission only if there was a
stipulation.
c. Obligation of the partnership incurred before and after his admission ever if
there was not stipulation.
d. Obligations of the partnership incurred before his admission if there was a
stipulation; and those incurred after his admission even if there was no
stipulation.
645. This obligation is demandable at once

a. With a suspensive condition
b. With a period in diem
c. When my means permit me to do so
d. When it depends on the happening of a specified event
646. Statement 1- A corporation has the power to do all acts not expressly or impliedly
prohibited
Statement 2- No person convicted by final judgment of violation of the Corporation
Code, regardless of the punishment imposed shall qualify as a director, trustee, or
officer of any corporation.
a. Both are true b. Both are false c. Only the first is true d. Only the second is true
647. MARK Company is a partnership engaged in the trading business with M, A, R, and
K as partners. M, A, and R are capitalist partners, contributing P100,000; P60,000;
and P40,000, respectively. K is an industrial partner. The partners have stipulated
that M shall not be liable for partnership liabilities. After three years of continued
losses, the partnership incurred liabilities of P200,000 at which time its assets had
dwindled to P140,000. After partnership assets have been exhausted, partnership
creditors may go after the separate asset of:
a. All the partners c. A, R, and K only
b. M, A, and R only d. A and R only
648. This contract is without effect unless ratified

a. Marriage between first degree cousins
b. Contract of sale between two insane persons
c. Contract of sale between a guardian and his ward
d. Donation between husband and wife
649. Statement 1- Where the capital stock is provided into par value shares and no par
value shares, the 25% subscriptions requirement shall be based on the amount of
authorized capital stock in case of par value shares and no par value shares it is
based on the entire number of authorized no par value shares
Statement 2- All persons who assume to act as a corporation knowing it to be without
authority to do so shall be liable as general partners for all debts, liabilities and damages
incurred or arising as results thereof
a. Both are true b. Both are false c. Only the first is true d. Only the second is true
650. TRIUMPH Company, a partnership engaged in the buying and selling of car spare
parts, has the following partners with their respective contributions: T- P10,000; R-
P20,000; I- P30,000; U- P40,000; M- P100,000; P-P200,000 and H- P300,000. No one was
pointed as manager of the partnership. In the course of the operation of the
partnership, T proposed to buy car spare parts from Dominion Motors but his proposal
was opposed by R. A voting among the partners took place and I, U and M aided with T,
while P and H sided with R. Which is CORRECT?
a. The group of T, I, U and M will prevail because they constitute the majority.
b. The group of R, P and H will prevail because they constitute the controlling
interest.
c. None will prevail because no one is appointed as manager of the partnership.
d. The partners will have to appoint a manager in order to resolve the conflict.
651. Refer to preceding number, assuming that when the voting took place, M
abstained, I and U sided with T, while P and H sided with R, which is CORRECT?
a. None will prevail because the voting was equal.
b. The group of R, P and H will prevail because they own the controlling interest.
c. None will prevail because no one is appointed as manager of the partnership.
d. The partners will have to appoint a manager in order to resolve the conflict.
652. One of the following is void

a. Politician c. Stipulation pour atrui
b. Pactum commissorium d. Waiver intentionada
653. Statement 1- The corporate secretary must be a director, and a resident and
citizen of the Philippines
Statement 2- The by-laws of a corporation may create an executive committee,
composed of not less than three
(3) members to be appointed by the board of directors
a. Both are true b. Both are false
c. Only the first is true d. Only the second is true
654. To be valid and enforceable, the following contracts should be in writing,

except: a. Contract to pay interest
b. Contract of donation of real property
c. Contract giving authority to an agent to sell a piece of land
d. Contract of donation of real property
655. Statement 1- The stockholders of a stock corporation have the power to declare
dividends out of the unrestricted retained earnings which shall be payable in cash, in
property or in stock to all stockholders on the basis of the outstanding shares held by
them
Statement 2- Cash dividend are declared by the board with the concurrence of the
stockholders representing at least 2/3 of the outstanding capital stock
a. Both are true b. Both are false
c. Only the first is true d. Only the second is true
656. D, E, A and R are partners in DEAR Company with D as manager. T owes DEAR
company P5,500 and D, in D’s personal capacity, P4,500. T’s debt to D is secured by a
pledge of her diamond ring. Both debts are already due. T pays P4,500 to D and tells her
that the same is in payment of her debt to D. Thus, D issues her own personal receipt.
Which is CORRECT?
a. The payment of P4,500 will be applied to the partnership credit at P2,475 and
to D’s credit at P2,025.
b. The payment will be applied entirely to D’s credit.
c. The payment will be applied as follows: P5,500 to partnership and the balance
to D in the amount of P1,000.
d. T, D and DEAR Company will have to agree as to which credit the payment shall
apply.
657. A condition which imposed on an obligation will be disregarded and will

therefore make the obligation immediately demandable.
a. If Lala kills Lele
b. If Lili passes the CPA board exams
c. If Lolo commits suicide
d. If Lulu will not rise from the dead
658. A and B entered into a universal partnership of all present property. At the time
of their agreement, A had a four-door apartment which he inherited from his father 3
years earlier. B, on the other hand, had a fishpond which he acquired by dacion en pago
from C. During the first year of the partnership, rentals collected on the four-door
apartment amounted to P480,000; while fish harvested from the fishpond were sold for
P300,000. During the same period, B received by the way of donation a vacant lot from
an uncle. The partners had a stipulation that future property shall belong to the
partnership. Which of the following does not belong to the common fund of the
partnership?
a. Fishpond b. Rental of P480,000
c. Apartment d. Vacant Land
659. LIFE Company, is a partnership engaged in the water distribution business, is

composed of partners Larredo, Ingles, Filler and Encanto. One day, Larredo was driving
the firm’s truck beyond the speed limit in order to serve its customers, when he
rammed into and caused the extensive damage on the parked car of Tertullo. Which is
CORRECT?
a. Only Larredo can be held liable for damages to Tertullo.
b. LIFE Company and Larredo are solidarily liable to damages to Tertullo.
c. LIFE Company and four partners are solidarily liable to damages to Tertullo.
d. LIFE Company and four partners are so jointly liable to damages to Tertullo.
660. If the law or contract does not state the diligence which is to be observed in the
performance of an obligation, the obligor is expected to observe.
a. Ordinary diligence
b. Extraordinary diligence
c. Diligence of a father of a good family
d. Utmost care
661. MAGIC Company is a partnership composed of Martha, Agnes, Glenda, Irene

and Candice, with Martha as manager who is authorized to collect the credits of the
partnership. Theresa owes Martha P4,000 which is due on December 10,2050. She also
owes MAGIC Company P6,000 which is due on December 20,2050. On, December 15,
2050, Theresa tendered payment in the amount of P4,000 to Martha in payment of her
debt to the latter. Martha issued her own receipt acknowledging the payment. Which is
CORRECT?
a. The payment will be applied proportionately to the credits to MAGIC Company
and Martha in the amount of P1,600 and P2,400, respectively.
b. The payment will be applied in its entirely to Martha’s credit.
c. The payment will be applied in its entirely to MAGIC Company credit.
d. The payment will be applied equally to the two debts of Theresa.
662. Facultative as distinguished from alternative obligation

a. The right of choice is given only to the debtor
b. Various things are due, but the giving of one is sufficient
c. If one of the prestations is illegal, the others may be valid and the obligation
remains
d. If it is impossibleto give all except one, the last one must still be given
663. Trevor owes P3,000 to CHAMP Company, a partnership composed of Charles,

Harry, Albert, Mark, and Prince, with Mark as the manager who authorized to collect all
credits of the firm. He also owes Charles the amount of P6,000. Both debts are already
due. Trevor gives P3,000 to Charles in payment of his debt to the latter. Charles thus
issue his own receipt. Which is CORRECT?
a. Payment will be applied proportionately to the two credits at P1,000 for
Charles’ credit and P2,000 for CHAMP Company credit.
b. Payment will be applied equally to the two credits.
c. Payment will be applied in its entirely to Charles’ credit
d. Payment will be applied in its entirely to CHAMP Company.
664. Within what period must recovery be made if the debtor did not know that
payment was not yet due?
a. Before maturity with regard to both what was paid and the interest
b. Even after maturity with regard to both the interest and what was paid
c. Before maturity with regard to what was paid ad even after maturity with
regard to the interest
d. Before maturity with regard to interest and even after maturity with regard
what was paid.
665. It is the change in the relation of the partners caused by any partner ceasing to
be associated in the carrying on of the business.
a. Partnership liquidation
b. Partnership incorporation
c. Partnership termination
d. Partnership dissolution
666. Which of the following is wrong in alternative obligations?

a. The obligor shall completely perform one of them
b. The obligee cannot be compelled to receive part of one and part of the other
undertaking
c. The right of choice belongs to the creditor, unless it has been expressly granted
to the debtor
d. The debtor shall have no right to choose those prestations which are impossible
667. Which of the following is the automatic ground for dissolution of general
partnership?
a. The business of the partnership can only be carried on at loss.
b. A partner is shown to be unsound mind.
c. A partner has been guilty of such conduct as tends to affect prejudicially the
carrying of the business.
d. A partner is civilly interdicted.
668. A remedy in equity by means of which a written instrument is made or

construed so as to express or conform to the real intention of the parties when some
error or mistake has been committed
a. Recission b. Annulment c. reformation d. Consideration
669. Which of the following will NOT cause the automatic dissolution of a general
partnership?
a. Death of a partner
b. Insolvency of a partner
c. When the partnership business becomes unlawful
d. Insanity of a partner
670. Payment by cession as distinguished from dation in payment
a. The debtor is not necessarily in a state of financial difficulty
b. The effect is to release the debtor for the proceeds of the things ceded or
assigned.
c. The property is alienated by the debtor to the creditor in satisfaction of a debt
in money
d. What is delivered by the debtor is merely a thing to be considered as the
equivalent of the performance of the obligation.
671. Which of the following is NOT an automatic cause of general partnership

dissolution?
a. When any event makes it unlawful for the business of the partnership to be
carries on or for the members to carry it on in partnership.
b. Expulsion of any partner from the business bona fide in accordance with such a
power conferred by the agreement between the partners.
c. A partner becomes in any way incapable of performing his part of the
partnership contract.
d. The insolvency of a partner or of the partnership.
672. If a third person pays an obligation. What are the rights, which are available to
him if he pays the obligation with the knowledge and consent of the debtor?
First answer – He can recover from the debtor the entire amount, which he was paid
Second answer – He is subrogate to all of the rights of the creditor
a. True, true b. True, false c. False, true d. False, false
673. Which of the following will NOT cause the automatic dissolution of a limited
partnership?
a. Death of a general partner
b. Death of a limited partner
c. Insolvency of a general partner
d. Insanity of a general partner
674. I. The loss or deterioration of the thing intended as a substitute through the
negligence of the obligor, does not render him liable
II. A person alternatively bound by different prestations shall completely perform one
of them
675. A partner’s interest in the partnership is his share of the profits and surplus which
he may assign to a third person. Which of the following statements concerning
such right is CORRECT?
a. The conveyance of a partner’s interest will cause the dissolution of the
partnership.
b. The assignee becomes a partner.
c. The assignee has a right to interfere in the management of the partnership
business.
d. The assignee has the right to receive the profits which the assigning partner
would otherwise be entitled.
676. There being no express stipulation and if the undertaking is to deliver the
determinate thing, the payment shall be made
a. At the domicile of the debtor
b. At the domicile of the creditor
c. Wherever the thing might be at the moment the obligation was constitute
d. Wherever the thing might be at the moment the obligation is to be fulfilled
677. Which right is NOT available to an assignee of a limited partner?

a. The receipt of the assignor’s share of profits.
b. The receipt of the assignor’s other compensation by way of income.
c. The return of the assignor’s contribution,
d. The inspection of partnership book or account of partnership transactions.

a. The validity and compliance of a contract cannot be left to the will of one of the
parties
b. In case of foreclosure and the price of the sale is less than the amount due , the
pledgee cannot recover any deficiency
c. Persons who are prohibited by law to enter into contract of donation cannot
from universal partnership
d. Actions for fraud cannot be waived
679. Which of the following claims shall be paid LAST in the liquidation of general
partnership?
a. Those owning to partners in respect of profits.
b. Those owning to the creditors other than partners.
c. Those owning to partners in respect of capital.
d. Thiose owning to partners other than capital and profits
680. The right of the creditor to exercise all the rights of his debtor to satisfy his claim,
except rights which are inherent and personal on the part of the debtor a.
Action subrogatoria b. Action redhibitoria
c. Accion pauliana d. Accion quanti minoris
681. Aseron, the managing partner of ACE Company, was driving the truck of the firm
when he rammed it into an electric post resulting in damaging to the vehicle
amounting to P50,000. To make up for the accident, Aseron worked long hours for
the firm and was able to increased its sales from P5,000,000 to P15,000,000. Which
is CORRECT?
a. Aseron will no longer be liable for damages to ACE Company because he was
able to generate unusual revenues for the firm through his extraordinary
efforts.
b. Aseron will still be liable to the firm for damages but the amount may be
equitably reduced by the court since he was able to generate unusual profits for
the firm through his extraordinary efforts.
c. Aseron’s obligation to the firm for damages will be extinguished by
compensation since ACE is liable to him for the extraordinary efforts he exerted
to increase its sales.
d. Aseron and ACE will share equally in the damages of P50,000.
682. An assignor of credit warrants

a. Solvency of the debtor b. Collectability
c. Assurance of payment d. Existence and legality of credit
683. Lazarte, a limited partner in Bellevue Company, Ltd. received the amount of
P100,000 representing his contribution which was being returned on the date
stipulated on the date in the certificate. Partnership records, however, showed that
the firm had liabilities of P22,000 which arose before Lazarte received the return of
his contribution and assets of only P90,000 after such return of contribution. Which
is CORRECT?
a. Lazarte is bound to bring back to the partnership the amount f P100,000 plus
interest thereon.
b. Lazarte is bound to give the partnership the amount of P220,000 plus interest
thereon.
c. Lazarte is bound to give the partnership P130,000 plus interest.
d. Lazarte is not bound to return to the partnership any amount because he
received the return of his contribution pursuant to a contractual stipulation.
684. B, A, R and K are partner in BARK Enterprises, a pet shop, with B contributing
P50,000; A, P20,000 and R, P30,000. K is an industrial partner and manages the
partnership. Based on the foregoing information, which of the following statement
is FALSE?
a. B may engage in the buying and selling of rice without the consent of the other
partners.
b. K may engage in the buying and selling of rice without the consent of the other
partners.
c. K is not liable for the losses of the partnership.
d. K may be held liable with her separate property for partnership debts after the
exhaustion of partnership assets.
685. J, E, W, E and L are partners in JEWEL Company, LTD. J, E, and W are general
partners, E is a general-limited partner, while L is a limited partner. Based on the
foregoing information, which of the following statements is FALSE?
a. J, E and W may be held liable with their separate property after the exhaustion
of partnership assets.
b. E may participate in the management of the partnership.
c. E may not be held liable with her separate property of partnership debts after
the exhaustion of partnership assets.
d. L may not be held liable with her separate property for partnership debts after
the exhaustion of partnership assets.
686. A, B and C executed a promissory note binding themselves to pay P9,000 to X, Y

and Z. The note is now due and demandable. Can the creditors proceed against A
alone for the payment of the entire debt?
a. No, each creditor can collect only P3,000 from A
b. Yes, either X, Y or Z can collect only P9,000 from A
c. No, each creditor can collect only P1,000 from A
d. Yes, since the promissory note is silent with respect to the rights of the
creditors, the obligation is presumed to be solidary
687. Using the preceding number, suppose that C is insolvent, can A and B be held liable
for C’s share in the obligation?
a. Yes, the debt shall be presumed to be divided into as many equal shares as
there are debtors
b. Yes, but A and B will be liable proportionately
c. No, the debts are considered distinct from one another
d. No, only either A and B but not both will be liable
688. Using No. 694, suppose that the obligation was about to prescribe, but X wrote a
letter to A demanding for payment of the entire debt. Will this have the effect of
interrupting the running of the period of prescription?
a. Yes, because the demand made by X covers the entire debt and will therefore
inure to the benefit of the other creditors
b. Yes, insofar as A is concerned but not with regard to B and C
c. No, because the demand should have been made to all the debtors
d. No, all the creditors should have made the demand
689.. Using the preceding number, and prescriptions sets in, how much can Y collect
from A?
a. P9,000 b. P3,000 c. P1,000 d. P0
690. Using the preceding number, how much can X collect from A?
a. P9,000 b. P3,000 c. P1,000 d. P0
691. Wilma, Olga and Wynona agrees to form a limited partnership with Wilma and
Olga as general partners contributing P50,000 each, and Wynona as limited partner
contributing P100,000. The partnership which is to engage in the trading of
garments was named “WOW Garments Co. Ltd” as indicated in the certificate
signed and sworn to by the partners before a notary public. However, the
certificate was not files with Securities and Exchange Commission. On the
meantime, the partners already began operating the business and transacting with
third persons. Which is CORRECT?
a. The partnership entered by Wilma, Olga and Wynona is void.

b. The partnership will be considered a general partnership. Accordingly, all
partners will be liable with their separate property after the exhaustion of
partnership assets.
c. The partnership will be considered a limited partnership as indicated in its
name. Only Wilma and Olga will be liable with their separate property after the
exhaustion of partnership assets.
d. Wilma, Olga and Wynona will be considered separately as sole proprietors with
each one having a capital equivalent to their respective contributions.
692. Indivisibility as distinguished from solidarity
a. Plurality of subject is indivisible
b. When the obligation is converted into one of indemnity for damages because of
breach, the character of obligation remains
c. Refers to the legal tie or vinculum
d. Refers to the prestation which constitutes the object of the obligation
693. I. When one of the parties has brought an action to enforce the instrument, he
cannot subsequently ask for its reformation
II. The injured party may seek rescission, even after he has chosen fulfillment if the
latter should become impossible
694. Culpa aquiliana as distinguished from culpa contractual
a. Proof of due diligence in the selection and supervision of employees is not
available as a defense
b. Proof of the contract and of its breach is sufficient prima facie to warrant
recovery
c. The negligence of the defendant is merely an incident in the performance of the
obligation
d. The source of liability is the defendant’s negligent act or omission itself
695. A passenger on a bus was hurt, but in a criminal case against the driver, said
driver was acquitted. The victim now sues the owner of the truck for culpa contractual.
May the suit still prosper?
a. No, this will constitute double jeopardy
b. No, the acquittal means that the guilt of the accuse was not proven by proof
beyond reasonable doubt
c. Yes, it is sufficient for to prove the existence of the contract of carriage and the
injuries suffered
d. Yes, provided he can prove the negligence of the driver
696. A owes B P11,000 due on July 2, 2014. B owes A P6,000 due on July 3, 2014 and
P4,000 due on July 10, 2014. B owes C P11,000 due on July 3, 2014. On July 3, 2014 B
cannot pay C so B assigns to C her credit of P11,000 against A, without the knowledge of
A. On July 10, 2014, C tries to collect from A the P11,000. How much can C compel A to
pay?
a. P11,000 b. P9,000 c. P5,000 d. P1,000
Questions 697-699: A, B, C and D owe W, Y and Z P9,000. On maturity, how much can W
collect from A?
697. If the debtors are joint and creditors are joint
a. P2,250 b. P3,000 c. P9,000 d. P750
698. If the debtors are joint and the creditors are solidary
a. P9,000 b. P750 c. P3,000 d. P2,250
699. If the debtors are solidary and creditors are joint

a. P750 b. P2,250 c. P9,000 d. P3,000
700. Using the same data in number 697, but the share of debtors, A, B, C and D in
the indebtedness is 1:2:3:4 and creditors W, Y and Z is 2:3:5 . How much can Y collect
from B if debtors are joint and creditors are joint?
a. P1,800 b. P2,700 c. P675 d. P540
701. How much can Z collect from D, if debtors are solidary and creditors are joint?
a. P1,800 b. P1,125 c. P3,600 d. P4,500
702. How much should A pay W, if debtor are joint and creditors are solidary?
a. P180 b. P9,000 c. P2,250 d. P900
703. A lost P100,000 in a card game called pusoy, but he had no more cash to pay in
full the winner at the time session ended. A promised to pay B, the winner, two weeks
thereafter. A failed to pay despite the lapse of two months, so B filed in court a suit to
collect the unpaid amount. Will the collection suit against A prosper?
a. Yes, if A made a negotiable promissory note
b. Yes, whether or not a negotiable promissory note was made by A
c. No, if A has no property to pay the obligation
d. No, because pusoy is fundamentally a game of chance
704. A filed a suit for ejectment against B for non-payment of condominium rentals
amounting to P150,000. During the pendency of the case, B offered and A accepted the
full amount due as rentals from B who then filed a motion to dismiss the suit. Is B
correct?
a. Yes, the acceptance of payment constitutes a waiver of the ejectment case
b. Yes, because there is a novation
c. No, the payment should first result to benefit to A
d. No, the payment by B of the rentals in arrears is not an abandonment of the
ejectment case
705. A was employed as professional driver of B Transit Bus owned by C. In the

course if his work, A hit a pedestrian who was seriously injured and later died in the
hospital as a result of the accident. The victim’s heirs sued the driver and the owner of
the bus for damages. Which of the following statements is not correct?
a. There is a presumption of negligence on the part of the employer C if a
passenger is injured
b. The conviction of A in a criminal case makes C liable for the damages arising
from the criminal act
c. The presumption that C is negligent is rebuttable by proof of observance of
ordinary diligence
d. The liability of C shall cease when he proves that he observed ordinary diligence
to prevent the damage to passengers and pedestrians
706. N, R and J solidarily bound themselves to deliver to S a Honda motorcycle
valued at P60,000. The obligation was not fulfilled through the fault of J. Thereupon, S
filed an action in court against N and the court awarded P72,000 to S representing the
value of the motorcycle plus damages. Which of the following situations is valid?
a. If N pays S the P72,000, N can collect from R and J P24,000 each
b. S has to collect P24,000 each from N, R and J to satisfy the court’s award of
P72,000
c. N can refuse to pay the penalty because it should be charged against J, the
guilty party
d. If S succeeds in collecting the P72,000 from N, N in turn can collect from R
P20,000 and from J P32,000
707. In which of the following debts is legal compensation proper? When one of the
debts
a. Arises from the obligation of a depository
b. Arises from a voidable contract
c. Arises from a claim for support by gratuitous title
d. Consists in civil liability arising from penal offense
708. A borrowed P10,000 from B on Dec 25, 2013. The debt is evidence by a
promissory note executed by A wherein she promised to pay as soon as she has the
money or as soon as possible. B made several demands upon A for payment, the first,
an oral demand was made on May 2, 2014 and the last written demand was dated
September 25, 2014 but up to now, there is not payment of the debt. B sued A, will
demand the case prosper?
a. Yes, A is in default since May 2, 2014
b. Yes, A is in default since September 25, 2014
c. No, the obligation is subject to a suspensive condition
d. No, the obligation is one with a period and the period has not arrived yet
709. Can future inheritance be the subject of contract of sale?

a. No, since it will put the predecessor at the risk of harm from a tempted buyer,
contrary to public policy
b. Yes, since the death of the decedent is certain to occur
c. No, since the seller owns no inheritance while his predecessor lives
d. Yes, but on the condition that the amount of inheritance can only be
ascertained after the obligations of the estate have been paid
710. S sold his coconut plantation to A Inc. for P100M, payable in installments of
P10M per month with 6% interest per annum. S married L after 5 months and they
chose conjugal partnership of gains to govern their property relations. When they
married, A had an unpaid balance of P50M plus interest in S favor. To whom will A’s
monthly payments go after the marriage?
a. The principal shall go to the conjugal partnership but the interests to S
b. Both the interest and principal shall go to S since they are his exclusive
properties
c. Both principal and interest shall go to conjugal partnership since these become
due after marriage
d. The principal shall go to S but the interest to the conjugal partnership
711. L entered into a contract to sell with R, undertaking to convey to the latter one
of the five lots he owns, without specifying which lot it was for the price of P1M. Later,
the parties could not agree which of five lots he owned L undertook to sell to R. What is
the standing of the contract?
a. Unenforceable b. Voidable c. Rescissible d. void
712. Knowing that the car had a hidden crack in the engine, X sold it to Y without
informing the latter about it. In any event, the deed of sale expressly stipulated that X
was not liable for hidden defects. Does Y have the right to demand from X a
reimbursement of what he spent to repair the engine plus damages
a. Yes, X is liable whether or not he was aware of the hidden defects
b. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in
not disclosing the fact to Y
c. No, because Y is in estoppel, having changed engine without prior demand
d. No, because Y waived the warranty against hidden defects
713. A produced sardines in cans known as ‘Sards’. B bought a can of Sards from a
store, ate it and suffered from poisoning caused by a noxious substance found in the
sardines.
B filed a case for damages Acme. Which of the following defense will hold?
a. The expiry date of the Sards was clearly printed on its can, still the store sold
and B bought it
b. B must have detected the noxious substance in the sardines by smell, yet she
still ate it
c. A had no transaction with B; she bought the Sards from a store, not directly
from A
d. A enjoys the presumption of safeness of its canning procedure and B has not
overcome such presumption
714. P sold to M 10grams of shabu worth P5,000. As he had no money at the time of
the sale, M wrote a promissory note promising to pay P or his order P5,000. P then
indorsed the note to X (who did not know the shabu) and X to Y. Unable to collect from
P, Y then sued X on the note. X set up the defense of illegality of consideration. is he
correct?
a. No, since X, being a subsequent indorser, warrants that the note is valid and
subsisting
b. No, since X, a general indorser, warrants that the note is valid and subsisting
c. Yes, since a void contract does not give rise to any right
d. Yes, since the note was born of an illegal consideration which is a real defense
715. Allan bought Billy’s property through Carlos, an agent empowered with a special
power of attorney to sell the same. When Allan was ready to pay as scheduled, Billy
called, directing Allan to pay directly to him. On learning of this, Carlos, Billy’s agent,
told Allan to pay through him as his SPA provided and to protect commission. Faced
with two claimants, Allan consigned the payment in court. Billy protested, contending
that the consignation is ineffective since no tender of payment was made to him. Is he
correct?
a. No, since consignation without tender of payment is allowed in the face of
conflicting claims on the plaintiff
b. Yes, as owner of the property sold, Billy can demand payment directly to
himself
c. Yes, since Allan made no announcement of the tender
d. Yes, a tender of payment is required for a valid consignation
716. X borrowed money from the a bank, secured by a mortgage on the land of Y, his
close friend. When the loan matured, Y offered to pay the bank but it refused since Y
was not the borrower. Is the bank’s action correct?
a. Yes, since X, the true borrower, did not give his consent to Y’s offer to pay
b. No, since anybody can discharge X’s obligation to his benefit
c. No, since Y, the owner of the collateral, has an interest in the payment of the
obligation
d. Yes, since it was X who has an obligation to the bank
717. On X’s failure to pay his loan to ABC Bank, the latter foreclosed the Real Estate
Mortgage he executed in its favor. The auction sale was set for Dec. 1, 2010 with the
notices of sale published as the law required. The sale was, however, cancelled when
Dec. 1, 2010 was declared a holiday and re-scheduled to Jan. 10, 2011 without
republication of notice. The auction sale then proceeded on the new date. Under the
circumstances, the auction sale is
a. Rescissible b. Unenforceable c. Void d. Voidable
718. A buyer ordered 5,000 apples from the seller at P20 per apple. The seller
delivers 6,000 apples. What are the rights and obligations of the buyer?
a. He can accept all 6,000 apples and pay the seller at P20 per apple
b. He can accept all 6,000 apples and pay a lesser a price for the 1,000 excess
apples
c. He can keep the 6,000 apples without paying for the 1,000 excess since the
seller delivered them anyway
d. He can cancel the whole transaction since the seller violated the terms of their
agreement
719. X sold to Y 100 sacks of rice that Y was to pick up from X’s rice mill on a
particular date. Y did not however appear on the agreed date to take the delivery of the
rice. After one week, X automatically rescinded the sale without notarial notice to Y. is
the rescission valid
a. Yes, automatic rescission is allowed since, having the character of movables and
consumables, rice can easily deteriorate
b. No, the buyer is entitled to a customary 30-day extension of his obligation to
take the delivery of the goods
c. No, since there was no express agreement regarding automatic rescission
d. No, the seller should first determine that Y was not justified in failing to appear
720. X bought a land from Y, paying him cash. Since they were friends, they did not
execute any document of sale. After 7 years, the heirs of X asked Y to execute a deed of
absolute sale to formalize the verbal sale to their father. Unwilling to do so, X’s heirs
filed an action for specific performance against Y. Will their action prosper?
a. No, after more than 6 years, the action to enforce the verbal agreement has
already elapsed
b. No, since the sale cannot under the Statute of Frauds be enforced
c. Yes, since X bought the land and paid Y for it
d. Yes, after full payment, the action became imprescriptible
721. A warranty inherent in a contract of sale, whether or not mentioned in it is

known as
a. Warranty on quality c. Warranty against eviction
b. Warranty against hidden defects d. Warranty in merchantability
722. In a true pacto de retro sale, the title and ownership of the property sold are
immediately vested in the vendee a retro subject only to the resolutory condition of
repurchase by the vendor a retro within the stipulated period. This is known as
a. Equitable mortgage c. Legal redemption
b. Conventional redemption d. Equity redemption
723. P sold to M a pair of gecko (tuko) for P50,000. M then issued a promissory note
to P promising to pay the money within 90 days. Unknown to P and M, a law was passed
a month before the sale that prohibits and declares void any agreement to sell gecko in
the country. If X acquired the note in good faith and in for value, may he enforced
payment on it?
a. No, since the law declared void the contract on which the promissory note to P
promising to pay the money within 90 days.
b. No, since it was not X who bought the gecko
c. Yes, since he is a holder in due course of a note which is distinct from the sale of
gecko
d. Yes, since he is a holder in due course and P and M were not aware of the law
that prohibited the sale of gecko
724. An agent, authorized by a special power of attorney to sell a land belonging to

the principal succeeded in selling the same to a buyer according to the instructions
given to the agent. The agent executed the deed of absolute sale on behalf of his
principal two days after the principal died, an event that neither the agent nor the buyer
knew at the time of the sale. What is the standing of the sale?
a. Voidable c. Void
b. Valid d. Unenforceable
725. X who was abroad, phoned his brother, Y authorizing him to sell X’s parcel of
land in Pasay. X sent the title to Y courier service. Acting for his brother, Y executed a
notarized deed of absolute sale of the land to Z after receiving payment. What is the
status of the sale?
a. Valid, since a notarized deed of absolute sale covered the transaction and full
payment was made
b. Void, since X should have authorized agent Y in writing to sell the land
c. Valid, since Y was truly his brother X’s agent and entrusted with the title needed
to effect the sale
d. Valid, since the buyer could file an action to compel X to execute a deed of sale
726. A borrowed P1M from a bank secured by a mortgage in his land. Without his
consent, his friend B paid the whole loan. Since A benefited from the payment, can B
compel to the bank subrogate him in its right as mortgagee of A’s land?
a. No, but the bank can foreclose and pay B back
b. No, since B paid for A’s loan without his approval
c. Yes, since a change of creditor took place by novation with the bank’s consent
d. Yes, since it is but right that B be able to get back his money and, if not, to
foreclose the mortgage in the manner of the bank
727. The husband assumed sole administration of the family’s mango plantation
since his wife worked abroad. Subsequently, without his wife’s knowledge, the husband
entered into an antichretic transaction with a company, giving it possession and
management of the plantation with power to harvest and sell the fruits and to apply the
proceeds to the payment of a loan he got. What is the standing of the contract?
a. It is void in the absence of the wife’s consent
b. It is void absent an authorization from the court
c. The transaction is void and can neither be ratified by the wife nor authorized by
the court
d. It is considered a continuing offer by the parties, perfected only upon the wife’s
acceptance or the court’s authorization
728. The right of a mortgagor in a judicial foreclosure to redeemed the mortgaged

property after his default in the performance of the conditions of the mortgage but
before the sale of the mortgaged property or confirmation of the sale by the court is
known as
a. Accion pauliana c. Pacto de retro
b. Equity of redemption d. Right of redemption
729. X constituted a chattel mortgage on a car (valued at P1M) to secure a P500,000

loan. For the mortgage to be valid, X should have
a. The right to mortgage the car to the extent of half of its value
b. Ownership of the car
c. Unqualified free disposal of his car
d. Registered the car in his name
730. X, and Y’s request, executed a Real Estate Mortgage on his (X’s) land to secure
Y’s loan from Z. Z successfully foreclosed the mortgage when Y defaulted on the loan
but half of Y’s obligation remained unpaid. May Z sue X to enforce his right to the
deficiency?
a. Yes, but solidarily with Y
b. Yes, since X’s is deemed to warrant that his land would cover the whole
obligation
c. No, since it is the buyer at the auction sale who should answer for the
deficiency d. No, because X is not Z’s debtor
731. S, minor, owns a specific property valued at P50,000. B capacitated, by means of

fraud induced S to sell his property to him for P30,000, which S did so. The contract is in
writing. Which is correct?
a. The contract is valid and binding from the start
b. The contract remains unenforceable because it falls under the Statute of Frauds
c. The contracts is rescissible because the ward suffered lesion by more than ¼ of
the value
d. The contract is voidable and B can ask for annulment within the period
prescribed by law
732. On September 25, 2011, A sent a telegram to B in Cebu, offering to sell to B his
house and lot for P2M, cash. On the same date, B sent to A a telegram offering to buy
A’s same house and lot for P2M, Is there a perfected contract?
a. No, because both telegram are mere offers
b. Yes, a promise to buy and sell a determinate thing for a price certain is
reciprocally demandable
c. No, because B did not offer to buy the house and lot for cash
d. Yes, being a consensual contract, it is perfected by, mere consent

a. The vendor is bound to deliver the thing sold and its accessions and accessories
in the condition in which they were upon the perfection of the contract
b. All the fruits of the thing sold shall pertain to the vendee from the day on which
the contract was perfected
c. The vendor shall not be bound to deliver the thing sold, if the vendee has not
paid him the price, or if no period for the payment has been fixed in the
contract
d. The vendor is bound to transfer the ownership of and deliver, as well as warrant
the thing which is the object of the sale
734. As a rule, which of the following contracts of sale is void?

a. Between two insane persons c. Between husband and wife
b. Between brother and sister d. Between pupil and teacher
735. Statement No. 1: The contract of pledge gives a right to the creditor to retain
the thing in his possession or in that of a third person to whom it has been delivered,
until the debt is paid.
Statement No. 2: A pledge shall not take effect against third persons if a description
of the thing pledged and the date of the pledge do not appear in a public instrument.
a. The effect of the conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the fulfillment of the condition.
b. When the obligation imposes reciprocal prestations upon the parties, the fruits
and interests during the pendency of the condition shall be deemed to have
been mutually compensated.
c. If the obligation is unilateral, the debtor shall appropriate the fruits and interest
received, unless the nature and circumstances of the obligation it should be
inferred that the intention of the persons constituting the same was different.
d. In obligation to do and not to do, the courts shall determine in each case, the
retroactive effect of the condition that has been complied with.
737. On July 25, 2015, A obliged himself to give to B his agricultural land if B will pass
the October 2015 CPA Board Examination. On July 26, 2015, B orally sold the agricultural
land to C and it is agreed that C will pay when B effects the delivery. On October 2,
2015, one day before the first day of the CPA Board Examination, A put poison on B’s
hospitalization resulting to B’s failure to take the October 2015 CPA Board Examination.
As a result, which of the following is correct?
a. The sale to C is void because B did not fulfil the condition
b. The sale to C enforceable because A voluntarily prevented B from fulfilling
the condition
c. B is entitled to the agricultural land hence, the sale to C is valid
d. C can demand the delivery of the agricultural land because the sale made
by B is valid

a. A solidary creditor can assign his right even without the consent of the others
b. The remission of the whole obligation, obtained by one of the solidary debtors
shall entitle him to reimbursement from his co-debtors
c. The condition not to do an impossible thing shall be considered as not having
been agreed upon
d. Obligations for whose fulfillment a day certain has been fixed shall be
demandable at once.
739. A, B and C are solidary debtors of W and Y, joint creditors for Php 12,000 where
the share of the debtors in the obligation is 2:3:5 while the share of the creditors is 1:2.
If A is insolvent, which of the following is correct?
a. W can collect from B Php 3,200
b. Y can collect from C Php 6,400
c. W or Y can collect from B and C Php 12,000
d. Y can collect from either B or C Php 8,000
740. Upon the proposal of the third person, a new debtor substituted the original
debtor without the latter's consent. The creditor accepted the substitution. Later,
however, the new debtor became insolvent and defaulted in his obligation. What is the
effect of the new debtor's default upon the original debtor?
a. The original debtor is freed of liability since novation took place and this
relieved him of his obligation
b. The original debtor shall pay or perform the obligation with recourse to the new
debtor
c. The original debtor remains liable since he gave no consent to the substitution
741. Using the preceding number, but the creditors are solidary and B is a minor,
which of the following is correct?
a. W can collect from C Php 8,400
b. Y can collect fromCPhp 8,000
c. W or Y can collect From C Php 12,000
d. The insolvency of A will be shouldered by B and C in proportion to there
respective obligations
741. Lennie bought a business class ticket from Alta Airlines. As she checked in, the
manager downgraded her to economy on the ground that a Congressman had to be
accommodated in the business class. Lennie suffered discomfort and embarrassment of
the downgrade. She sued the airlines for quasi-delict but Alta Airlines countered that,
since her travel was governed by a contract between them, no quasi-delict could arise.
Is the airline correct?
a. No, the breach of contract may in fact be tortious as when it is tainted as in this
case with arbitrariness, gross bad faith and malice
b. No, denying Lennie the comfort and amenities of the business class as provided
in the ticket is a tortious act
c. Yes, since the facts show a breach of contract, not a quasi-delict
d. Yes, since quasi-delict presupposes the absence of pre-existing contractual
relation between the parties
742. A contract is presumed to have been entered into

a. In the place where the offer was made
b. In the place where the acceptance was made
c. In the place where the performance was made
d. In the place where the payment was made
743. Rudolf borrowed P1M from Rodrigo and Fernando who acted as solidary
creditors. When the loan matured, Rodrigo wrote a letter to Rudolf demanding payment
of the loan directly to him. Before Rudolf could comply, Fernando went to see him
personally to collect and he paid him. Did Rudolf make a valid payment?
a. No, since Rudolf should have split the payment between Rodrigo and Fernando
b. No, since Rodrigo, the other solidary creditor, already made a prior demand for
payment from Rudolf
d. Yes, since Fernando was a solidary creditor, payment to him extinguished the
obligation
744. Before acceptance is conveyed, an offer becomes ineffective upon the death,
civil interdiction, insanity or insolvency.
a. Of the offeror c. Of either party
b. Of the offeree d. Of both the offeror and offeree
745. Roy and Carlos both undertook a contract to deliver to Sam in Manila a boat
docked in Subic. Before they could deliver it, however, the boat sank in the storm. The
contract provides that fortuitous event shall not exempt Roy and Carlos from their
obligation. Owing to the loss of the motor boat, such obligation is deemed converted
into one of indemnity for damages. Is the liability of Roy and Carlos joint or solidary?
a. Neither solidary nor joint since they cannot waive the event of fortuitous event
to which they are entitled
b. Solidary or joint upon the discretion of Sam
c. Solidary since Roy and Carlos failed to perform their obligation to deliver the
motor boat
d. Joint since the conversion of their liability to one of indemnity for damages
made it joint

a. The obligation to give includes that of delivering all its accessions and
accessories even though they may not have been mentioned
b. If a person obliged to do something fails to do it, the same shall be
executed at his cost
c. When the obligation consist in not doing, and the obligor does what has
been forbidden him, it shall be undone at his expense
d. In reciprocal obligation, from the moment one of the parties fulfills his
obligation, delay by the other begins
747. A writes promissory note in favor of his creditor, b. It says: "Subject to my
opinion, I promise to pay B Php 1M or his order or give Php 1M worth of cement or to
authorize him to sell my house worth Php 1M. signed A". Is the note negotiable?
a. No, because the exercise of the option to pay lies with A, the maker and debtor
b. No, because it authorizes the sale of collateral securities in case the note is not
paid at maturity
c. Yes, because the note is really payable to B or his order, the other provisions
being merely optional
d. Yes, because an election to require something to be done in lieu of payment of
money does not affect negotiability
748. If the contract stated the diligence which is to be observed in the performance
of the obligation
Statement 1 – that which is expected of a good father of a family shall be required
Statement 2 – that which is required by law shall be observed
a. Both statements are true c. Statement 1 is true
b. Both statements are false d. Statement 2 is true
749. S sold his coconut plantation to A Inc. for Php 100M, payable in installments of
Php 10M per month with 6%n interest per annum. S married L after 5 months and they
chose conjugal partnership of gains to govern their property relations. When they
married, A had an unpaid balance of Php 50M plus interest in S favor. To whom will A's
monthly payments go after the marriage?
a. The principal shall go to the conjugal partnership but the interests to S
b. Both the interest and principal shall go to S since they are his exclusive
properties
c. Both principal and interest shall go to the conjugal partnership since these
become due after the marriage
d. The principal shall go to S but the interest to the conjugal partnership
750. Which of the following obligation as a rule has retroactive effect?

a. Conditional obligation to give c. Conditional obligation not to do
b. Conditional obligation to do d. Obligation with a period e.
751. L entered into a contract to sell with R, undertaking to convey to the latter one
of the five lots he owns, without specifying which lot it was for the price of Php 1M.
Later, the parties could not agree which of five lots he owned L undertook to sell to R.
What is the standing of the contract?
a. Unenforceable c. Rescissible
b. Voidable d. Void
752. There shall be no liability for loss due to fortuitous events in one of the
following cases. Which is it?
a. When the debtor delays.
b. When the parties so stipulated that there shall be liability even in case of loss
due to fortuitous events.
c. When the nature of the obligation requires the assumption of risks.
d. When the obligation is to deliver a determinate thing and there was no
stipulation as to the liability of the debtor in case of loss due to fortuitous
events.
753. Acme Cannery produced sardines in cans known as "Sards". Mylene bought a
can of Sards from store, ate it and suffered from poisoning caused by a noxious
substance found in the sardines. Mylene filed a case for damages against Acme. Which
of the following defense with hold?
a. The expiry date of the Sards was clearly printed on its can, still the store sold
and Mylene bought it
b. Mylene must have detected the noxious substance in the sardines by smell, yet
she still ate it
c. Acme had no transaction with Mylene; she bought the Sards from a store, not
directly from Acme
d. Acme enjoys the presumption of safeness of its canning procedure and Mylene
has not overcome such presumption
754. D borrowed from C P50,000,000.00. the obligation is secured by a chattel

mortgage on D’s Toyota car. Subsequently, D paid C P20,000.00. unknown to D, T a third
person, pays C P50,000.00 believing that D still owned C such amount.
a. T can cover P50,000.00 from D. if D cannot pay, T can foreclose the mortgage
on D’s Toyota car.
b. T can recover nothing from D because he paid without the knowledge and
consent of D.
c. T can recover P30,000.00 from D cannot pay, T can foreclose the mortgage on
D’s Toyota car.
d. T can recover P30,000.00 from D. If D cannot pay, T cannot foreclose the
mortgage on D’s Toyota car.
755. P sold M 10grams of shabu worth Php 5,000. As he had no money at the time of
the sale, m wrote a promissory not promising to pay p or his order Php 5,000. P then
indorsed the note to X (who did not know about the shabu) and X to Y. Unable to collect
from P, Y then sued X on the note. X set up the defense of illegality of consideration. Is
he correct?
a. No, since X, being a subsequent indorser, warrants that the note is valid and
subsisting
b. No, since X, a general indorser, warrants that the note is valid or subsisting
c. Yes, since a void contract does not give rise to any right
d. Yes, since the note was born of an illegal consideration which is a real defense
756. Ace Realty Company (Ace) ordered 6 units of “Borden” typewriters from Central
Office Machines (Central) at the price of P8,000.00 per unit. However, Central delivered
to Ace 6 units of “Remington” typewriters, a superior brand, which was priced at
P8,500.00 per unit. Central informed Ace that it will bill the latter for the “Remington”
typewriters at P8,000.00 only. Ace refused to accept the “Remington” typewriters.
a. Central can compel Ace to the accept the “Remington” typewriters since they
are of superior quality.
b. Central cannot compel Ace to accept the “Remington” typewriters although
they are of superior quality.
c. Central can compel Ace to accept the “Remington” typewriters since Ace is
required to pay only the price of “Borden” typewriters.
d. Central can compel Ace to accept the “Remington” typewriters since all that is
required of Central is to deliver a typewriter that can perform the same
function as the one that was ordered.
757. X borrowed money from a bank, secured by a mortgage on the land of Y, his
was not the borrower. Is the bank's action correct?
a. Yes, since X, the true borrower, did not give his consent to Y's offer to pay
b. No, since anybody can discharge X's obligation to his benefit
obligation
758. Buko, Fermin and Toti are solidary debtors of Ayee. Twelve (12) years after the
obligation became due and demandable, Buko paid Ayee and later on asked for
reimbursement of Fermin’s and Toti’s shares. Is Buko correct? why?
a. No, because the obligation has already prescribed.
b. Yes, because the obligation is solidary.
c. No, because in solidary obligation any one of the solidary debtors can pay the
entire debt.
d. Yes, because Fermin and Toti will be unduly enriched at the expense of Buko.
759. A, the proprietor of a fleet of 10 taxicabs, decided to adopt, as his business

name, "A Transport Co. Inc.", May this be allowed?
a. No, it would be deceptive since he is a proprietor, not a corporation
b. No, since "A" is a generic name, not suitable for registration
c. Yes, since his line of business is public transportation
d. Yes, since such name would give his business a corporate identity
760. The distinction between alternative obligation and facultative obligation is that
in facultative subrogation:
a. The right of choice is always belong to the debtor
b. There are two or more object which are due but the performance of one is
sufficient to extinguished obligation
c. The loss of one object by fortuitous event does not extinguish obligation.
d. The right of choice as a rule is given to the debtor unless it is expressly granted
to the creditor.
761. In a special meeting called for the purpose, 2/3 of the stockholders representing
the outstanding capital stock in X. Co. authorized the company's Board of Directors to
amend its By-laws. By majority vote, the Board then approved the amendment. Is this
amendment valid?
a. No, since the stockholders cannot delegate their right to amend the By-laws to
the board
b. Yes since the majority of votes in the Board was sufficient to amend the by-laws
c. No, because the voting in the Board should have been by majority of a quorum
d. Yes since the votes of 2/3 of the stockholders and majority of the Board were
secured
762. A mortgaged his car to B to secure his loan amounting to P150,000.00. Due to
the negligence of the typist, the document signed by A and B shows that the car of A
was sold to B for P140,000.00. which of the following statements is correct?
a. The contract of sale between of sale between A and B is voidable because there
is a mistake
b. The contract of sale between A and B may be reformed
c. The contract of sale between A and B may be reformed
d. The contract of sale between A and B rescissible because of the damage
suffered by A
763. 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 government and owned and controlled
corporation, disqualified C, a former Congressman, from continuing to sit as one of its
member. C objected, however, insisting that under the Corporation Code, members of
the board of directors of corporations may only be removed by vote of stockholders
holding 2/3 of its outstanding capital stock in a regular or special meeting called for the
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 passage
b. No, since the disqualification takes effect by operation of law, it is sufficient
that he was declared no longer a member of the board
c. Yes, since the provisions of the Corporation Code applies as well to government
owned and controlled corporations
d. No, since the board has the power to oust him even without the new law
764. An incidental element of a contract

a. Implied warranty against eviction
b. Payment of interest in a loan
c. Delivery of the object in contract of pledge
d. All of the above
765. The corporate term of a stock corporation is that which is stated in its articles of
incorporation. It may be extended or shortened by an amendment of the articles when
approved by majority of its Board of Directors and
a. Approved and ratified by at least 2/3 of all stockholders
b. Approved by at least 2/3 of all stockholders representing the outstanding
capital stock
c. Ratified by at least 2/3 of all stockholders
d. Ratified by at least 2/3 of the stockholders representing the outstanding capital
stock
766. The creditor acquires this right upon delivery of the subject matter.
a. Just in re c. Jus in personam
b. Jus ad rem d. Personal right
767. M makes a promissory note that states: "I, M, promises to pay Php 5,000 to B or
bearer. Signed, M". M negotiated the note by delivery to B, B to N and N to O. b had
known that M was bankrupt when M issued the note. Who would be liable to O?
a. M and N since they may be assumed to know of M's bankruptcy

b. N, being O's immediate negotiator of a bearer note
c. B, M and N, being indorsers by delivery of a bearer note
d. B, having known of M's bankruptcy
768. Dr. Marten binds himself to deliver to Codeo a specific Latop computer and
specific Desktop Computer. This is?
a. An alternative obligation c. Both of (a) and (b)
b. A facultative obligation d. Answer not given
769. X executed a promissory note with a face value of P50,000 payable to the order
of Y. Y indorsed the note to Z, to whom Y owed P30,000, If X has no defense at all
against Y, for how much may Z collect from X?
a. Php 20,000 as he is a holder for value to the extent of the difference between
Y's debt and the value of the note
b. Php 30,000 as he is a holder for value to the extent of his lien
c. Php 50,000 but with the obligation to hold Php 20,000 for Y's benefit
d. None, as Z's remedy is to run after his debtor Y
770. Statement 1. Unenforceable contract is less defective that a voidable contract.

Statement 2. The action to declare a void contract a nullity prescribes in four (4) years
a. Both are true c. No. 1 is true; No 2 is false
771. X is the holder of an instrument payable to him (X) or his order, with Y as maker.
X then indorses it as follows "Subject to no recourse, pay to Z. Signed X". When Z went
to collect from Y, it turned out that Y's signature was forged. Z now sues X for collection.
Will it prosper?
a. Yes, because X as a conditional indorser, warrants that the note is genuine
b. Yes, because X, as a qualified indorser, warrants that the note is genuine
c. No, because X made a qualified indorsement
d. No, because a qualified indorsement does not include the warranty of
genuineness
772. Statement 1. Void contracts in certain cases are subject to ratification.

Statement 2. The contract does not become voidable if the violence or intimidation was
done by persons not party to the contract.
a. Both are true c. No. 1 is true no 2 is false
b. Bothe are false d. No. 1 is false; No. 2 is true
773. X, a drawee of a bill of exchange, wrote the words: "Accepted with promise to
make payment within two days. Signed X." The drawer questioned the acceptance as
invalid. Is the acceptance valid?
a. Yes, because the acceptance is in reality a clear assent to order of the drawer to
pay
b. Yes, because the form of the acceptance is really immaterial
c. No, because the acceptance must be clear assent to the order of the drawer to
pay
d. No, because the document must not express that the drawee will perform his
promise within two days
774. Which of the following is principal contract?

a. Guaranty c. Pledge
b. Suretyship d. Commondatum
775. D, a debtor of C wrote a promissory note payable to the order of C C's brother,
M, misrepresented himself as C's agent, obtained the note from D, then negotiated it to
N after forging C's signature. N indorsed it to E, who indorsed it to F, a holder in due
course. May F recover from E?
a. No, since the forgery of C's signature results in the discharge of E
b. Yes, since only the forged signature is inoperative and E is bound as indorser
c. No, since the signature of C, the payee was forged
d. Yes, since the signature of C is immaterial, he being the payee
776. Ms. Maputi agreed to live with Mr. Hukluban as the wife of the latter without
the benefit of marriage in exchange for the monthly support of twenty-five thousand
(25,000.00) that Mr. Hukluban would give to Ms. Winnie. Both Mr. Hukluban and Ms.
Maputi are single, of legal age, and there is no legal impediment for them to get
married. Their parents have no objections to the two getting married. Based on the
foregoing information, which of the following statements is true?
a. The agreement between Mr. Hukluban and Ms. Maputi is void for being
contrary to morals.
b. Mr.Hukluban may legally demand that Ms. Maputi live with him as his wife.
c. Ms. Maputi may legally demand that Mr. Hukluban give her the monthly
support of P25,000 that he had promised.
d. The agreement between Mr. Hukluban and Ms. Maputi is valid because the can
legally get married if they want to.
777. A bill of exchange has D as drawee, E as drawee and f as payee. The bill was
then indorsed to G, G to H and H to I. I, the current holder presented the bill to E for
acceptance. E accepted but, as it later turned out, D is a fictitious person. Is E freed from
liability?
a. No, since by accepting, E admits the existence of the drawer
b. No, since by accepting, E warrants that he is solvent
c. Yes, if E was not aware of that fact at the time of acceptance
d. Yes, since a bill of exchange with a fictitious drawer is void and inexistence
778. Which of the following contracts is not void ab initio?

a. That whose object is outside the commerce of men.
b. That whose object did not exist at the time of transaction.
c. That which contemplates an impossible service.
d. That which is undertaken is fraud of creditors
779. Due to his debt to C, D wrote a promissory note which is payable to the order of
C. C's brother, M, misrepresented himself as agent of C, obtained the note from D. M
then negotiated the note to N after forging the signature of C. May N enforce the note
against D?
a. Yes, since D is the principal debtor
b. No, since the signature of C was forged
c. No, since it is C who can enforce it, the note being payable to the order of C
d. Yes, since D as maker, is primarily liable on the note
780. A wrote a letter to B wherein A offered to sell a piece of land to B for P200,000.
B signified his desire to buy the land. In A’s letter, B was given a period of two (2)
months within which to produce the P200,000. After 45 days, A told B that price of the
land is now P250,000. Can be compel A to accept the P200,000 first offered by A and
execute the deed of sales?
a. Yes, because there was actual meeting of the minds of the parties.
b. No, for B did not signify his acceptance of A’s offer.
c. Yes, because A is already estopped by his signed letter.
d. Yes, because the period of two (2) months has not expired
781. M, maker, issued a promissory note to P, the payee which states: "I, M, promise
to pay P or order the amount of Php 1M. Signed M" P negotiated the note by
endorsement to N, then N to O also by indorsement and O to Q again by indorsement.
But before O indorsed the note Q, O's wife wrote the figure "2" on the note after "Php
1" without O's knowledge, making it appear that the note is Php 12M. For how much is
O liable Q?
a. Php 1M since it is original tenor of the note
b. Php 1M since he warrants that the note is genuine and in all respects what it
purports to be
c. Php 12M since he warrants his solvency and that he has a good title to the note
d. Php 12M since he warrants that the note is genuine and in all respects what it
purports to be
782. Contracts are effective and binding only between the parties their assigns and
their heirs. Three of the following enumerations are exceptions are provided by law.
Which does not belong to the exception?
a. Where there is a stipulation is favor of a third party
b. Where one of the parties to the contract dies and thereafter a suit is field on
the basis of the contract.
c. Where the obligations arising from contract are not transmissible by their
nature.
d. Where the obligations arising from contract are not transmissible by stipulation
or by provision of law
783. X found a check on the street, drawn by Y against ABC Bank, with Z as payee. X
forged Z's signature as an indorser, then indorsed it personally and delivered it to DEF
Bank. The latter, in turn, indorsed it to ABC Bank which charged it to Y's account. Y later
sued ABC Bank but it set up the forgery as its defense. Will it prosper?
a. No, since the payee's signature has been forged
b. No, since Y's remedy is to run after the forger, X
c. Yes, since forgery is only a personal defense
d. Yes, since ABC Bank is bound to know the signature of Y, its client
784. When the obligation modified its object and also the principal conditions.
a. There is real novation c. There is mixed novation
b. There is personal novation d. There is delegacion
785. Can a drawee who accepts a materially altered check recover from the holder
and the drawer?
a. No, he cannot recover from either of them
b. Yes from both of them
c. Yes, but only from the drawer
d. Yes, but only from the holder
786. To cancel a contract and restore the parties to their original positions before the
contract, the parties should execute a
a. Novation c. Rescission
b. Release d. Revocation
787. X executed a promissory note in favor of Y by way of accommodation. It says
"Pay to Y or order the amount of Php 50,000. Signed X". Y then indorsed the note to Z
and Z to T. When T sought collection from Y, the latter countered as indorser that there
should have been a presentment first to the maker who dishonors it. Is Y correct?
a. No, since Y is the real debtor and thus, there is no need for presentment for
payment and dishonor by the maker
b. Yes, since as an indorser who is secondarily liable, there must first be
presentment for payment and dishonor by the maker
c. No, since the absolute rule is that there is no need for presentment for
payment and dishonor to hold an indorser liable
d. Yes, since the secondary liability of Y and Z would only arise after presentment
for payment and dishonor by the maker
788. A and B are joint debtors of C for P2,000,000. A’s consent was obtained by C
thru fraud.
a. C can collect the entire P2,000,000 from B
b. C can collect the entire P2,000,000 from B but the latter con recover from A
P1,000,000.
c. A is liable only to C for P1,000,000 because he can interpose his defense of
fraud.
d. B is liable to C for his share of P1,000,000.
789. A promissory note states on its face: "I, X, promise to pay Y the amount of Php
5,000 five days after completion of the on-going construction of my house. Signed X". Is
the note negotiable?
a. Yes, since it is payable at fixed period after the occurrence of a specified event
b. No, since it is payable at a fixed period after the occurrence of an event which
may not happen
c. Yes, since it is payable at a fixed period or determinable future time
d. No, since it should be payable at a fixed period before the occurrence of a
specified event
790. The stature of frauds
a. Prevents the use of oral evidence to contradict the terms of a written contract
b. Applies to all contracts having consideration valued at P500 or more.
c. Requires the independent promise to pay the debt of another to be in writing.
d. Applies to all real estate leases.
791. 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, acceopt the bill upon presentment by writing on it the words "I shall pay
Php 30,000 three months after sight" May he accept under such terms, which varies the
command in the bill of exchange?
a. Yes, since a drawee accepts according to the tenor of his acceptance
b. No, since, once he accepts, a drawee is liable according to the tenor of the bill
c. Yes, provided the drawer and payee agree to the acceptance
d. No, since he is bound as a drawee to accept the bill according to its tenor
792. S offered to sell to B his house and lot for P10,000,000. In order to pressure B
into buying said house and lot, T, a very good friend of S, threatened B with death as a
result of which B accepted the offer of S. it turns out now that the market value of the
house and lot is P15,000,000. Is the contract of S and B valid?
a. The contract is valid since it is very clear that S did not apply the intimidation.
b. The contract is voidable because the consent given by B is anyway vitiated even
if the intimidation was employed by a third person.
c. The issue of the contract being voidable is not relevant because B will not have
the contract avoidable because it is actually favorable to him.
d. It is not B but S or T who can file the action for annulment.
793. May the indorsee of a promissory note indorsed to him "for deposit" file a suit
against the indorser?
a. Yes, as long as the indorser received value for the restrictive indorsement
b. Yes, as long as the indorser receives value for the conditional indorsement
c. Yes, whether or not the indorser received value for the conditional
indorsement
d. Yes, whether or not the indorser received velue for the restrictive indorsement
794. The following are all factors vitiating consent except

a. Mistake c. Intimidation
b. Negligence d. Fraud
795. ABC Corp. increased its capital stocks from Php 10 Million to Php 15 Million
and, in the process, issued 1,000 new shares divided into Common Shares "B" and
Common Shares "C". T, a stockholder owning 500 shares, insists on buying the newly
issued shares through a right of pre-emption. The company claims, however, that its By-
laws deny T any right of pre-emption. Is the corporation correct?
a. No, since the By-Laws cannot deny a shareholder his right of pre-emption
b. Yes, but the denial of his pre-emptive right extends only to 500 shares
c. Yes, since the denial of the right under the By-laws is binding on T
d. No, since the denial of the right are governed by the articles of incorporation
796. S orally sold to B his house and lot for P5,000,000 where B initially paid P50,000.
After paying the balance B nor seeks to register the lot in his name, but the register of
Deeds refuses to do so. In this case:
a. The transaction involving the oral sale of a house and lot is null and void.
b. The contract between S and B is unenforceable under the statute of fraud.
c. The oral sale of the house and lot although unenforceable under the statute of
fraud has been retified by the receipt of the consideration and, therefore, B can
compel S to execute the deed of sale in a public document.
d. If S does not want to execute the public document, he can rescind or cancel his
agreement with B.
797. When one exercises a right recognized by law, knowing that he thereby causes
an injustice to another, the latter is entitled to recover damages. This is known as the
principle of c. Vicarious liability
a. Res ipsa loquitur d. Abuse of rights
b. Damnum absque injuria
798. Which of the following stipulation is void?
Stipulation I. Any stipulation exempting the vendor from the obligation to answer for
eviction even if he acted in bad faith.
Stipulation II. Stipulation exempting the agent from the obligation to render an account.
Stipulation III. A stipulation which excludes capitalist partners from any share in the
profits.
a. I and III c. I and III
b. II and III d. All of them
799. Contracts take effect only between the parties or their assigns and heirs, except
where the rights and obligations arising from the contract the not transmissible by their
nature, by stipulation, or by provision of law. In the latter case, the assigns or the heirs
are not bound by the contracts. This is known as the principle of
a. Relativity of contracts c. Mutuality of contracts
b. Freedom to stipulate d. Obligatory force of contracts
800. Crisostomo donated a parcel of land to Anthony worth P500,000 in a public

instrument on January 21, 2014. Anthony accepted the same on the same day in a
separate private instrument. When Anthony now seeks to registered the land in the
registration because the acceptance of the donated property was not in a public
instrument. In this case:
a. Anthony can compel the registry of property to register the land under his
name because the donation is valid.
b. Anthony cannot compel the registry of property to register the land under his
name because the donation is void.
c. The donation is valid but the registration may be refused on the ground that
the acceptance was not in a public instrument.
d. The registry of property committed a grave abuse of discretion in refusing the
registration of the donated property in question
801. When he donor gives donations without reserving sufficient funds for his
support or for the support of his dependents, his donations are
a. Rescissible, since it results in economic lesion of more than 25% of the value of
his properties
b. Voidable, since his consent to the donation is vitiated by mindless kindness
c. Void, since it amounts to wanton expenditure beyond his means
d. Reducible to the extent that the donations impaired the support due to himself
and his dependents
802. One of the following statement concerning ratification of a voidable contract is

false is false. which is it?
a. Ratification extinguished the action to annul a voidable contract.
b. Ratification cleanses the contract from all its defects from the amount it was
constituted.
c. Ratification requires the conformity of the party who has no right to bring the
action for annulment.
d. Ratification may be made by the guardian of the incapacitated person, or the
incapacitated person upon attaining capacity, or the party whose consent was
vitiated
803. Anne owed Bessy P1m due on October 1, 2014 but failed to pay her on due
date.
Bessy sent a demand letter to Anne giving her 5 days from receipt within which to pay.
Two days after receipt of the letter Anne personally offered to pay Bessy in manager's
check but latter refused to accept the same. The 5 days lapsed. May Anne's obligation
be considered extinguished?
a. Yes, since Bessy's refusal of the manager's check, which is presumed funded
amounts to a satisfaction of the obligation
c. Yes, since Anne tendered payment of the full amount due
d. No, since a manager's check is not considered legal tender in the Philippines
804. Which of the following is not correct about limited partnership?
a. Limited partnership consists of at least one general partner and at least one
limited partner.
b. To form a limited partnership, there must be a sworn certificate which comply
all the requirements set forth by law and filed with securities and exchange
commission.
c. The limited partnership is void if one of the partners contributes an immovable
property and there is no inventory of the real property attached to the public
instrument.
d. If the partnership name of a limited partnership has no “Ltd” or limited, the
partnership is a non-existing partnership.
805. A buyer ordered 5,000 apples from the seller at Php 20 per apple. The seller
delivers 6,000 apples. What are the rights and obligations of the buyer?
a. He can accept all 6,000 apples and pay the seller at P20 per apple
b. He can accept all 6,000 apples and pay a lesser price for the 1,000 excess apples
c. He can keep the 6,000 apples without paying for the 1,000 excess since the
seller delivered the anyway
d. He can cancel the whole transaction since the seller violated the terms of their
agreement
806. Which of the following is not correct about partner’s tight over specific
partnership property?
a. A partner is co-owner with his partners of specific partnership property.
b. A partner’s right in specific partnership property is not assignable.
c. A partner’s right in specific partnership property is not subject to legal support.
d. A partner’s right in specific partnership property is not subject to attachment
or execution even on a claim against the partnership
807. A warranty inherent in a contract of sale, whether or not mentioned in it is

known as
a. Warranty on quality c. Warranty against eviction
b. Warranty against hidden defects d. Warranty in merchantability
808. W, X, Y and Z are the general partners who contributed P500,000.00,
P300,000.00, P100,000.00 and services to the common fund, respectively. After
dissolution the partnership suffered losses amounting to P600,000.00. How much shall
be the share of Z in the losses?
a. Equal with capitalist partners
b. According to agreement, if there is any
c. Just and reasonable
d. None
809. In a true pacto de retro sale, the title and ownership of the property sold are
immediately vested in the vendee a retro subject only to the resolutory condition of
repurchase by the vendors a retro within the stipulated period. This known as
a. Equitable mortgage c. Legal redemption
b. Conventional redemption d. .Equity of redemption
810. A, B, and C all are capitalist partners form a partnership and agree, to have a
total contributed capital of P30,000.00. However, the partners failed to agree as to the
extent of their respective share in the capital contribution. In this case, which of the
following statement is not correct:
a. A, B, and C must contribute P10,000 each to the partnership.
b. If A, B, and C failed to stipulate on how to distribute profit and loss, the profit
and loss will be distributed equally between them.
c. The partnership contract is void because there is no agreement as to the capital
contribution of each partner.
d. If A, B and C mutually agreed that partner A will be excluded from the share in
the losses, such agreement is void
811. P sold to M a pair of gecko (tuko) for P50,000. M then issued a promissory note
to P promising to pay the money within 90 days. Unknown to P and M, a law was passed
a month before the sale that prohibits and declared void any agreement to sell gecko in
the country. If X acquired the note in good faith and for value, may he enforce payment
on it?
a. No, since the law declared void the contract on which the promissory note was
founded
b. No, since it was not X who bought the gecko
c. Yes, since he is a holder in due course of a note which is distinct from the sale
of gecko
d. Yes, since he is a holder in due course and P and M were not aware of the law
that prohibited the sale of gecko
812. General partner shall have all the rights and powers and be subject to all the
restrictions and liabilities of a partner in a partnership without limited partners.
However, without the written consent or ratification of the specific act by all the limited
partners, a general partner or all of the general partners have no authority to act on the
following, except:
a. Do any act in contravention of the certificate.
b. Do any act which would make it possible to carry on the ordinary business of
the partnership.
c. Confess a judgment against the partnership.
d. Admit a person as a general partner
813. X, who was abroad, phoned his brother, Y authorizing him to sell X's parcel of
land in Pasay. X sent the title to Y by courier service. Acting for his brother, Y executed a
notarized deed of absolute sale of the land to Z after receiving payment. What is the
status of the sale?
a. Valid, since a notarized deed of absolute sale covered the transaction and full
payment was made
b. Void, since X should have authorized agent Y in writing to sell the land
c. Valid, since Y was truly his brother X's agent and entrusted with the title
needed to effect the sale
d. Valid, since the buyer could file an action to compel X to execute a deed of sale
814. The distinction between a partnership and conjugal partnership of gain is that in
a partnership:
a. This are not organized for profit.
b. It has no juridical personality
c. This is created by operation of the law
d. This commence from the moment of the execution of the contract unless
otherwise stipulated
815. A borrowed Php 1M from a bank secured by a mortgage on his land. Without his
consent, his friend B paid the whole loan. Since A benefited from the payment, can B
compel the bank to subrogate him in its right as mortgage of A's land?
b. No, since B paid for A's loan without his approval
c. Yes, since a change of creditor took place by novation with the bank's consent
d. Yes, since it is but right that B be able to get back his money and, if not, to

a. A general partner in a limited partnership manages the business of the
partnership but cannot perform acts of ownership without the consent of all
the limited partners.
b. Valid contributions of a limited partners are money and property but not
services.
c. Additional limited partners may be admitted into the limited partnership with
the consent of all the partners.
d. A person who is both a general partner and a limited partner is deemed a
limited partner only with respect to the return of his contribution
817. The husband assumed sole administration of the family's mango plantation
since his wife worked abroad. Subsequently, without his wife's knowledge, the husband
entered into an antichretic transaction with a company, giving it possession and
management of the plantation with power to harvest and sell the fruits and to apply the
proceeds to the payment of a loan he got. What is the standing of the contract?
a. It is void in the absence of the wife's consent
b. It is void absent an authorization from the court
c. The transaction is void and can neither be ratified by the wife nor authorized by
the court
d. It is considered a continuing offer by the parties, perfected only upon the wife's
acceptance or the court's authorization
818. The following are the effect of unlawful partnership except:

a. Unlawful partnership has no legal personality
b. Partners forfeit their share in the profit
c. Partners forfeit their capital whether or not it becomes an instrument or effect
of the crime
d. Judicial decree is no longer required.
819. The right of a mortgagor in a judicial foreclosure to redeem the mortgaged
property after his default in the performance of the conditions of the mortgage but
before the sale of the mortgaged property or confirmation of the sale by the court is
known as
a. Accion pauliana c. Pacto de retro
b. Equity of redemption d. Right of redemption
820. The rule is that the designation of the share of the partners in the profits and
losses cannot be entrusted to only one of the partners but to all. However, the rule
allows the designation of the share of the partners to be entrusted to a third which can
be questioned or impugned by the partners if such designation is manifestly in
equitable.
Within what time should the action or question be brought?
a. Within one (1) month from the time he had knowledge
b. Within two (2) months from the time he had knowledge
c. Within three (3) months from the time he had knowledge
d. Within six (6) months from the time he had knowledge
821. X constituted a chattel mortgage on a car (valued at Php 1M) to secure a Php
500,000 loan. For the mortgage to be valid, X should have
a. The right to mortgage the car to the extent of half of its value
b. Ownership of the car
c. Unqualified free disposal of his car
d. Registered the car in his name
822. A partner can engage in business for himself without the consent of his co-
partners if he is:
a. A capitalist partner whether or not the business he will engage in is of the same
king as or different from the partnership business.
b. An industrial partner whether or not the business he will engage in is of the
same king as or different from the partnership business.
c. A capitalist partner and the business he will engage in is of a kind different from
the partnership business.
d. An industrial partner and the business he will engage in is of a kind different
from the partnership-business.
823. X, at Y's request, executed a Real Estate Mortgage on his (X's) land to secure Y's
loan from Z. Z successfully foreclosed the mortgage when Y defaulted on the loan but
half of Y's obligation remained unpaid. May Z sue X to enforce his right to the
deficiency?
a. Yes, but solidarily with Y
b. Yes, since X's is deemed to warrant that his land would cover the whole
obligation
c. No, since it is buyer at the auction sale who should answer for the deficiency
d. No, because X is not Z's debtor
824. A partner’s interest in the partnership is his share of the profits and surplus
which he may assign to a third person. Which of the following statements concerning
such right is correct?
a. The conveyance of a partner’s interest will cause the dissolution of the
partnership,
b. The assignee becomes a partner.
c. The assignee has a right to interfere in the management of the partnership
business.
d. The assignee has the right to receive the profits which the assigning partner
would otherwise be entitled to.
825. The liability of the partners, including industrial partners for partnership
contracts entered into in its name and for its account, when all partnership assets have
been exhausted id
a. Pro-rata b. Joint
c. Solidary d. Voluntary
826. Can only be made with the consent of all partners
a. Waiver or compromise c. Borrow money
b. Sell equipment d. Answer not given
827. X Co, a partnership is composed of A (capitalist partner), B (capitalist partner,
and C (industrial partner). If you were partner A, who between B and C would you have
an insurable interest on, such that you may then insure him?
a. No one, as there is merely a partnership contract among A, B and C
b. Both B and C, as they are your partners
c. Only C, as he is an industrial partner
d. Only B as he is a capitalist partner
828. A is the capitalist partner and B the industrial partner. A engaged personally in
the same kind of business the partnership is engaged in:
a. If there are losses, the partnership will be the losses.
b. If there are profits, the profits will shared by A and the partnership.
c. If there are profits, A will give the profits to the partnership.
d. A will be excluded from the partnership and pay damages.
829. X Corp. operates a call center that received orders for pizza restaurants. The
two companies have the same set of corporate officers. After two years, X Corp.,
dismissed its call center agents for no apparent reason. The agents filed a collective suit
for illegal dismissal against both X and Y Corp based on the doctrine of piercing the veil
of corporate fiction. The latter set up the defense that the agents are in the employ of X
Corp, which is a separate juridical entity. Is the defense appropriate?
a. No, since the doctrine would apply, the two companies having the same set of
corporate officers
b. No, the real employer is Y Corp, the pizza company with X Corp., serving as an
arm for receiving its outside orders for pizzas
c. Yes, it is not shown that one company completely dominates the finances,
policies and business practices of the other
d. Yes, since the two companies perform two distinct businesses
830. The following are all grounds for a judicial decree of dissolution except:
a. Where a partner is guilty of such conduct as tends to prejudicially affect the
partnership
b. When the business can only be carried at a loss
c. By any event which makes it unlawful for the partnership to carry in the
business
d. Where a partner is rendered incapable of performing his part of the agreement
831. It is settled that neither par value nor book value is an accurate indicator of the
fair value of a share stock of a corporation As to unpaid subscription to its shares of
stock, as they are regarded as corporate assets, they should be included in the
a. Capital value c. Par value
b. Book value d. Market value
832. A, B, and C formed a partnership with the following as their contribution: A –
P500,000.00 and parcel of land worth P1,500,000.00, B – P300,000.00 and plus office
equipment worth P150,000.00 and C – his services. The partnership contract is oral.
Therefore their contract of partnership is?
a. Void c. Unenforceable
b. Valid d. Rescissible
833. In elections for the Board of Trustees of non-stock corporations, members may
cast as many votes as there are trustees to be elected but many not cast more than one
vote for one candidate. This is true a Unless set aside by the members in plenary
session b In every case even if the Board of Trustees resolve otherwise c Unless
otherwise provided in the Articles of Incorporation or in the By-laws d In every case
even if the majority of the members decide otherwise during the election

a. In a universal partnership where its nature is not specified, the presumption is
that a universal partnership of all profits only is formed.
b. When the contribution to the partnership consists of personal property
amounting to P1,000,000 and real property amounting to P20,000 and the
contract is entered orally, the partnership contract is void.
c. A contract of partnership is always perfected by mere agreement.
d. Partnership is only a form of agency
835. The rule is that the valuation of the shares of a stockholder who stockholder
who exercises his appraisal rights is determined as of the day prior to the date on which
the vote was taken. This is true
a. Regardless of any depreciation or appreciation in the share's fair value
b. Regardless of any appreciation in the share's fair value
c. Regardless of any depreciation in the share's fair value
d. Only if there is no appreciation or depreciation in the share's fair value
836. A, B, C, and D are partners where A, B, and C contributed P1,000,000.00 each
and D his services. The partnership is engaged in the manufacture and export of
garments. Due to a very strong typhoon, the entire roofing of the factory was blown by
the strong winds and if not repaired immediately would aggravate the damage. A, B, C
and D agreed on an additional contribution of P200,000 each in order to save the
business from imminent loss. Which of these is the correct statement?
a. D is duty bound to contribute 20% more of his time to the business of the
partnership
b. If A no longer has money, he can be compelled to sell his interest in the
partnership to the other partners.
c. B can question the decision because he did not vote for the additional
contribution.
d. If C still hast money, but refuses to make the contribution, he can be compelled
to sells his interest in the partnership to the other partners
837. EFG Foundation Inc, a non-profit organization, scheduled an election for its
sixmember Board of Trustees. X, Y and Z, who are minority members of the foundation,
wish to exercise cumulated voting in order to protect their interest, although the
Foundation's Articles and By-laws are silent on the matter. As to each of the three, what
is the maximum number of votes that he/she can cast
a. 6 b. 9 c. 12 d. 3
838. X owes M P100,000.00 and he is also indebted to MNO company in the amount
of P400,000.00. M is the managing partner of MNO Company and X’s obligations are
already due and demandable. X paid to M the amount of P90,000.00 and M issued a
receipt applying the payment to his personal credit. What shall be the right if the
partnership against M in this case?
a. Demand 50% or P45,000.00 out of the payment made by X
b. Demand the full amount paid by X
c. Demand 80% or P72,000.00 out of the payment made by X
d. None because M credited the payment to his personal credit
839. Corp has a corporate term of 20 years under its Articles of Incorporation or form
June 1 1980 to June 1 2000. On June 1 1991 it amended its Articles of Incorporation to
extend its life by 15 years from June 1 1980 to June 1 2015. The SEC approved this
amendment. On June 1 2011, however, T Coro decide to shorten its term by 1 year or
until June 1 2014. Both the 1991 and 2011 amendments were approved by majority
vote of its Board of Directors and ratified in a special meeting by its stockholders
representing at least 2/3 of its outstanding capital stock. The SEC however, disapproved
the 2011 amendment on the ground that it cannot be made earlier than 5years prior to
the expiration date of the corporate term, which is June 1 2014. Is this SEC disapproval
correct?
a. No, since the 5-year rule on amendment of corporate term applies only to
extension, not shortening of term
b. Yes, any amendment affecting corporate term cannot be made earlier than
5years prior to the corporation's expiration date
c. No, since a corporation can in fact have a corporate life of 50 years
d. Yes, the amendment to shorten corporate term cannot be made earlier then 5
years prior to the corporation's expiration date
840. Partnership as distinguished from co-ownership?

a. It has juridical personality.
b. Created not only agreement of the parties but also by law.
c. Purpose is not to make profits.
d. Profits are divided in proportion to one’s interest.
841. X Corp. whose business purpose is to manufacture and sell vehicles, invested its
funds in Y Corp, an investment firm, through a resolution of its Board of Directors. The
investment grew tremendously on account of y Corp's excellent business judgment. But
minority stockholder in X Corp assails the investment as ultravires, Is he right and if so,
what is the status of the investment?
a.Yes, it is ultra vires act of the corporation itself but voidable only, subject to
stockholders' ratification
b. Yes, it is ultra vires act of its Board of Directors and thus void
c. Yes, it is an ultra vires act of its Board of Directors but voidable only, subject to
stockholders' ratification
d. Yes, it is ultra vires act of the corporation itself and consequently
842. The partnership is insolvent. They are preferred as regards to the partnership
property.
a. Partnership creditors
b. Partnership separate creditors
c. Partners with respect to their capital
d. Partners with respect to their profits
843. The Corporation Code sanctions a contract between two or more corporations
which have interlocking directors, provided there is no fraud that attends it and it is fair
and reasonable under the circumstances. The interest of an interlocking director in one
corporation may be either substantial or nominal. It is nominal if his interest
a. Does not exceed 25% of the outstanding capital stock
b. Exceeds 25% of the outstanding capital stock
c. Exceeds 20% of the outstanding capital stock
d. Does not exceed 20% of the outstanding capital stock
844. Which of the following is not allowed in a partnership contract?

a. General partner at the same time is not allowed in a partnership contract?
b. Capitalist partner at the same time an industrial partner
c. General partner at the same time an industrial partner
d. A limited partner at the same time an industrial partner
845. In case of disagreement between the corporation and withdrawing stockholder

who exercise his appraisal right regarding the fair value of his shares, a three-member
group shall by majority vote resolve the issue with finality. May the wife of the
withdrawing stockholder be named to the three member group?
a. No, the wife of the withdrawing shareholder is not a disinterested person
b. Yes, since she could best protect her husband's shareholdings
c. Yes, since the rules do not discriminate against wives
d. No, since the stockholder himself should sit in the three-member group
846. A decree by the court is necessary to dissolve a general partnership based on

three of the following grounds. Which one will not require such decree but will cause
the automatic dissolution of the partnership?
a. The business of the partnership can only be carried on at a loss
b. A partner is shown to be of unsound mind.
c. A partner has been guilty of such conduct as tends to affect prejudicially the
carrying on of the business.
d. A partner is civilly interdicted.
847. The rule is that no stock dividend shall be issued without the approval of
stockholders representing at least 2/3 of the outstanding capital stock at a regular or
special meeting called for the purpose. As to other forms of dividends
a. A mere majority of the entire Board of Director applies
b. A mere majority of the quorum of the Board of Directors applies
c. A mere majority of the votes of stockholders representing the outstanding
capital stock applies
d. The same rule of 2/3 vote applies
848. In general, to show the existence of a partnership, three (3) of the following
characteristics must be proved. Which is the exception?
a. There was a joint interest in the profits.
b. There was an agreement in writing
c. There was an intention to create a partnership
d. There was a common or joint fund obtained from contributions.
849. Several American doctors wanted to set up a group clinic in the Philippines so
they could render modern medical services. If the clinic is to be incorporated under our
laws, what is the required foreign equity participation in such a corporation
a. 40% b. 0% c. 60% d. 70%
850. Alexis and Bote entered into a universal partnership of all present property.
Both of them agree to include property subsequently acquire as part of common fund.
Subsequently Alexis received a parcel of land by inheritance from his father ; and
another parcel of land from “The Best Ito University” as remuneration for Alexis work
as professor therein.
a. The two parcels of land and their fruits are to be enjoyed by the partnership
because the contract entered is a universal partnership of all present property.
b. The two parcels of land and their fruits will not be enjoyed by the partnership
because Universal partnerships of all present property comprise only all
present property.
c. With respect to the parcel of land received by Alexis from his father, the
property is not to be enjoyed by the partnership but only its fruit. However,
with respect to the property received from Best Ito University, the land and the
fruits are to be enjoyed by the partnership.
d. The partnership is entitled to use the two parcels of land as usufructuary and
also entitled to the fruits produced by the property
851. The Board of Directors of XYZ Corp unanimously passed a resolution approving
the taking of steps that in reality amounted to willful tax evasion. On discovering this,
the government filed tax evasion charges against all the company's members of the
board of directors. The directors invoked the defense that they have no personal
liability, being mere directors of a fictional being. Are they correct?
a. No, since as a rule only natural persons like the members of the board of
directors can commit corporate crimes
b. Yes, since it is the corporation that did not pay the tax and it has a personality
distinct from its directors
c. Yes, since the directors officially and collectively performed acts that are
imputable only to the corporation
d. No, since the law makes directors of the corporation solidarily liable for gross
negligence and bad faith in the discharge of their duties
852 . Which of the following is not an obligation of a partner?

a. To give his capital contribution
b. Not to engage in unfair competition with the partnership
c. To pay partnership for damages suffered by it through his fault
d. To inspect and copy partnership books
853. The Articles of Incorporation must be accompanied by a Treasurer's Affidavit

certifying under oath, among others, that the total subscription paid is
a. Not less than P25,000 c. Not less than P5,000
b. Not more than P5,000 d. Not more than P25,000
854. When a partnership begins or commence its juridical personality?
a. From the moment of execution of the article of co-partnership in writing, unless
it is otherwise stipulated
b. From the moment of the delivery of the capital contribution, unless it is
otherwise stipulated.
c. From the moment of the execution of the contract, unless it is otherwise
stipulated.
d. From the moment of registration of the article of co-partnership before the
securities and exchange commission
855. The articles of Incorporation of ABC Transport Co., a public utility, provides for
ten members in its Board of Directors. What is the prescribed minimum number of
Filipino citizens in its Board.
a. 10 b. 6 c. 7 d. 5
856. The following can demand true and full information of all things affecting
partnership affairs from the other partner, except:
a. Any partner
b. Partner’s assignee of interest
c. Legal representative of a deceased partner
d. Legal representative of any partner under legal disability
857. A negotiable instrument can be indorsed by way of restrictive indorsement,

which prohibits further negotiation and constitutes the indorsee as agent of the
indorser. As agent, the indorser has the right among others, to
a. Demand payment of the instrument only.
b. Notify the drawer of the payment of the instrument.
c. Receive payment of the instrument
d. Instruct the payment be made to the drawee.
858. A, B and C are partners in an import and export business where customers
desiring to place an order are required to make a deposit of 30% to the partnership. T, a
regular customer deposited P300,000 to partner A who, instead of turning over the
money to
ABC partnership, misappropriated it for his own use. In this case,
a. T should sue alone A the misappropriating partner for the amount of P300,000
b. T can sue A, B or C the partnership of ABC solidarity for the amount of P300,000
c. T can only sue partners A,B and C jointly for P300,000
d. Correct remedy not indicated
859. Under the negotiable Instrument Law, a signature by procuration operates as a
notice that the agent has but a limited authority to sign. Thus, a person who takes a bill
that is drawn, accepted or indorsed by procuration is duty bound to inquire into the
extent of the agent's authority by
a. Examining the agent's special power to attorney
b. Examining the bill to determine the extent of such authority
c. Asking the agent about the extent of such authority.
d. Asking the principal about the extent of such authority
860. A,B and C are partners in a trucking and freight business. B and C without the
knowledge of A approached X and offered to sell to X all the trucks of the partnership at
a price very much higher than their book value. Then B and C bought-out A from the
partnership and thereafter X bought all the trucks with a big profit B and C.
a. The sale of the trucks to X void because it is without the knowledge and consent
of A.
b. B and C are not liable to A whatsoever
c. B and C are liable to A for his share in their profits in the sale
d. When A was bought-out of the partnership, the partnership was dissolved so A
has no more share in the profits in the sale.
861. Under the negotiable Instrument law, if the holder has a lien on the instrument
which arises either from a contract or by implication of law, he would be a holder for
value to the extent of
a. His successor interest

b. His predecessor interest
c. The lien in his favor
d. The amount indicated on the instrument's face
862. In a general partnership, the creditor of a general partner may charge the
interest of the indebted general partner, the interest so charged may be redeemed
with:
a. Partnership property only
b. Only the separate property of any one or more of the general partners
c. Both partnership property and separate property of the general partner
cumulatively
d. Either, partnership property provided with the consent of all the partners
whose interests are not so charged or sold; or the separate property of any one
or more of the general partners
863. A holder in due course holds the instrument free from any defect of title of prior
parties and free from defenses available to prior parties among themselves. An example
of such defense is
a. Fraud in inducement c. Fraud in esse contractus
b. Duress amounting to forgery d. Alteration
864. Three of the following contracts must be in writing to be valid. Which is the
exception?
a. Contract of partnership were immovables are contributed.
b. Contract of agency to sell the land of prinicipal.
c. Contract were the amount involved exceeds five hundred pesos.
d. Negotiable instruments.
865. A and b are equal partners in AB Partnership by contributing P50,000.00 each

on
July 1, 2017. On July 2, 2017, the partnership contracted an obligation to pay Z the
amount of P180,000.00 on August 15, 2017. On August 1, 2017, C was admitted as a
new partner. C contributed P50,000.00. How will the obligation be paid?
a. A, P60,000.00; B, P60,000.00; C, P60,000.00

b. A, P90,000; B, P90,000; C, none
c. A, P65,000.00; B, P65,000.00, C, P50,000.00
d. A, P180,000.00; B, P180,000.00, and C, none
866. A bill of exchange has T for its drawee, and U as drawer, and F as holder. When
F went to T for presentment, F learned that T is only years old. F wants to recover from
U but the latter insists that a notice of dishonor must first be made, the instrument
being a bill of exchange. Is he correct
a. Yes, since a notice of dishonor is essential to charging the drawer
b. No, since T can waive the requirement of notice of dishonor
c. No, since F can treat U as maker due to minority of T, the drawee
d. Yes, since bill o exchange, notice of dishonor is at all times required
867. The certificate of limited partnership shall be cancelled when:

a. A person is substituted as a limited partner
b. A person is admitted as general partner
c. There is change in the character of the business of the partnership
d. When the partnership is dissolved
868. A material alteration of an instrument without the assent of all parties liable
thereon results in its avoidance, except against a
a. Prior indorsee c. Subsequent indorser
b. Subsequent acceptor d. Prior acceptor
869. Which of the following is not correct about director?
a. A director must be an owner of at least one share of stock
b. A person is disqualified to become a director if he is convicted by final judgment
of an offense punishable by imprisonment for a period exceeding six (6) years.
c. A juridical person like partnership is allowed to be a director
d. The number of directors of Stock Corporation is not less than five but not more
than fifteen.
870. B borrowed Php 1M from L and offered to him his BMW car worth Php 1M as
collateral. B then executed a promissory note that reads "I, B, promise to pay L or bearer
the amount of Php 1M and to keep my BMW car (loan collateral) free from any other
encrumbrance. Signed B." Is the note negotiated?
a. Yes, since it is payable to bearer
b. Yes, since it contains an unconditional promise to pay a sum certain in money
c. No, since the promise to just pay sum of money is unclear
d. No, since it contains a promise to do an act in addition to the payment of
money
871. After the election of the directors, trustees and officers of the corporation,
within what period the secretary, or any other officer of the corporation shall submit
the report of election of directors, trustees and officers to the Securities and Exchange
Commission (SEC)?
a. Thirty (30) days c. Forty five (45) days
b. Fifteen (15) days d. Sixty days (60) days
872. If the drawer and the drawee are the same person, the holder may present the
instrument for payment without the need of previous presentment for acceptance. In
such a case, the holder treats it as a
a. Non-negotiable instrument c. Letter of credit
b. Promissory note d. Check
873. Which of the following is not correct about management contract?
a. The maximum period of management contract as a rule is five(5) years for any
one term.
b. Management contract shall have been approved by the board of directors and
by stockholders owning at least the majority of the outstanding capital stock, or
by at least a majority of the members in the case of a non-stock corporation, of
both the managing and the managed corporation.
c. Where s majority of the members of the board of directors of the managing
corporation also constitute a majority of the members of the board of directors
of the managed corporation, then the management contract must be approved
by the stockholders of the managing corporation owning at least two-thirds
(2/3) of the total outstanding capital stock entitled to vote.
d. Where a stockholder or stockholders representing the same interest of both the
managing and the managed corporations own or control more than one-third
(1/3) of the total outstanding capital stock entitled to vote of the managing
corporation, the management contract must be approved by the stockholders
of the managed corporation owning at least two-thirds (2/3) of the total
outstanding capital stock entitled to vote.
874. D draws a bill of exchange that states "One month from date, pay to B or his
order
Php 100,000. Signed D". The drawee named in the bill is E. B negotiated the bill is E. B
negotiated the bill to M, M to N, N to O and O to P. Due to non-acceptance and after
proceedings for dishonor were made, P asked O to pay, which O did. From whom may O
recover?
a. B, being the payee c. E, being the drawee
b. N, as indorser to O d. D, being the drawer
875. A corporation generally can issue both par value stock and non-par value stock.
These are all fixed in the Articles of Incorporation of the corporation. Which of the
following corporations may not be allowed to issue no par value shares?
a. Insurance companies c. Banks

b. Trust companies d. All of the above
876. Any agreement binding upon the holder to extend the time of payment or to
postpone the holder's right to enforce the instrument results in the discharge of the
party secondarily liable unless made with the latter's consent. This agreement refers to
one which the holder made with the
a. Principal debtor c. Secondary creditor
b. Principal creditor d. Secondary debtor
877. X subscribed 10,000 shares in the capital stocks of AAA Corporation. He paid
50% of the 10,000 shares. X asked the Corporate Secretary to issue him the
corresponding stock certificate representing the 50% of what he already paid. The
Corporate Secretary of the corporation refused. Was the Corporate Secretary correct?
a. The Corporate Secretary is correct because the Corporation Code provides that
no certificate of stock shall be issued to a subscriber until the shares as
subscribed have been fully paid.
b. The Corporate Secretary cannot refuse because a Stock Certificate can be issued
corresponding to the percentage of shares which were paid.
c. The Corporate Secretary cannot refuse because a Certificate of Stock can be
issued provided it is indicated in the Certificate the actual percentage of what
has been paid.
d. The Corporate Secretary cannot refuse because it is his legal duty to issue a
stock certificate corresponding to the number of shares actually subscribed
regardless of the actual payment
878. Notice to dishonor is not required to be made in all cases. One instance where
such notice is not necessary is when the indorser is the one to whom the instrument is
suppose to be presented for payment. The rationale here is that the indorser
a. Already knows of the dishonor and it makes no sense to notify him of it
b. Is bound to make the acceptance in all cases
c. Has no reason to expect the dishonor of the instrument
d. Must be made to account for all his actions
879. The capital stock of ABC Corporation is divided into common shares and
preferred shares. Preferred shares are preferred as to dividends and common shares are
those shares which have the regular and ordinary attributes of a share of a corporation.
Which statement is most accurate?
a. This kind of classification may not be allowed or else it will violate the Doctrine
of Equality of shares.
b. Classifications of shares may be allowed for as long as it is clearly stated as such
in the Articles of Incorporation of the Corporation.
c. Classifications of shares is mainly for business purpose to attract investors.
d. Classifications of shares may be allowed with the approval of the stockholders
and the Board of Directors.
880. Which of the following indorser expressly warrants in negotiating an instrument

that 1) it is genuine and true; 2) he has a good title to it 3) all prior parties have capacity
to negotiate; and 4) it is valid and subsisting at the time of his indorsement?
a. Irregular indorser c. General indorser
b. Regular indorser d. Qualified indorser
881. If ABC Corporation will increase its authorized capital stock, the Corporation
Code requires
a. The approval of the majority of the Board of Directors only.
b. The approval of the majority of the stockholders and the Board of Directors.
c. The approval of 2/3 of the shareholders of the outstanding capital stock as well
as the approval of the Securities and Exchange Commision.
d. The approval of the majority of the Board of Directors and approval of the
shareholders holding 2/3 share of the outstanding capital stock.
882. Forgery of bills of exchange maybe subdivided into 1) forgery of an indorsement

on bill and b) forgery of the drawer's signature, which may either be with acceptance by
the drawee, or
a. With acceptance but the bill is paid by the drawee
b. Without acceptance but the bill is paid by the drawer
c. Without acceptance but the bill is paid by the drawee
d. With acceptance but the bill is paid by the drawer
883. The Articles of Incorporation of PAK Corporation was approved by the Securities
and Ecxchange Commission (SEC). After the receipt of the Certificate of Approval from
the SEC, PAK Corporation decided to immediately start the operation of its business
despite the fact that it has no approved By Laws. What is legal status of the PAK
Corporation?
a. A de jure corporation c. A corporation by estoppel
b. A de facto corporation d. An unregistered corporation
884. The rule is that the intentional cancellation of a person secondarily liable results
in the discharge of the latter. With respect to an indorser, the holder's right to cancel his
signature is
a. Without limitation
b. Not limited to the case where the indorsement is necessary to his title
c. Limited to the case where the indorsement is not necessary to his title
d. Limited to the case where the indorsement is necessary to his title
885. The term of one (1) year of the Board of Directors of ABC Corporation expired
last February 1, 2018. No new election of the Board of Directors was called, hence, the
existing members of Board continues as Directors in hold over capacity. Which
statement is most accurate?
a. This is not allowed because the term of the directors must only be for one (1)
year.
b. This is allowed provided there is valid and justifiable reason for not calling for an
election of the new members of the Board.
c. The positions of the members of the Board of Directors will be automatically
declared vacant.
d. Acting as members of the Board of Directors in a hold over capacity must be
ratified by the stockholders.
886. P authorized A to sign a bill of exchange in his (P's) name. The bill reads: "Pay to
B or order the sum of Php1M. Signed A. (for and in behalf of P)" The bill was drawn on P.
B indorsed the bill to C, C to D and D to E. May E treat the bill as a promissory note?
a. No, because the instrument is payable to order and has been indorsed several
times
b. Yes, because the drawer and drawee are the one and the same person
c. No, because the instrument is a bill of exchange
d. Yes, because A was only an agent of P
887. The term of AXA Corporation in accordance with its Articles of Incorporation
ended last September 10, 2017. The term was not extended. What will happen to the
corporation?
a. The corporation is dissolved ipso facto.
b. There is a need to pass a board resolution to formally dissolve the corporation.
c. The Board of Directors must pass a resolution to for the corporation to formally
go into liquidation.
d. The stockholders must pass a resolution to dissolve the corporation. 888. Z
wrote out an instrument that states " Pay to X the amount of Php 1M for the
collection only. Signed Z". X indorsed it to his creditor, Y, to whom he owned
Php 1M. Y now wants to collect and satisfy X's debt through the Php 1M on the
check. May he validly do so?
a. Yes, since the indorsement to Y is for Php 1M
b. No, since Z is not a party to the loan between X and Y
c. No, since X is merely an agent of Z, his only right being to collect
d. Yes, since X owed Y Php 1M
889. Singapore Airlines is a foreign airline company. Singapore Airlines tickets are
sold in the Philippines though Philippine Airlines as their general agent. Singapore
Airlines is not
registered to do business as such with the Philippine Securities and Exchange
Commission. Which statement is most accurate?
a. Although unlicensed to do business in the Philippines, Singapore Airlines can
sue before the Philippine Courts and can also be sued.
b. Singapore Airlines can sue but cannot be sued also.
c. Singapore Airlines cannot sue and cannot be sued also.
d. Singapore Airlines can be sued in Philippine Courts but cannot sue.
890. In a signature by procuration, the principal is bound only in case the agent acted
within the actual limits of his authority. The signature of the agent in such a case
operates as notice that he has
a. A qualified authority to sign c. A special authority to sign
b. A limited authority to sign d. Full authority to sign
891. A foreign company has been exporting goods to a Philippine company for
several years now. When the Philippines company failed to pay the latest exportation,
the foreign company sued to collect in the Philippines. The Philippine company
interposed the defense that the foreign company was doing business in the Philippines
without a license; hence, could not sue before a Philippine court. Is this defense
tenable?
a. The defense is not tenable. The mere act of exporting from one’s own country,
without doing any specific commercial act within the territory of the importing
country cannot be deemed as doing business in the importing country. Thus,
the foreign company may sue in the Philippines despite lack of license to do
business in the Philippines.
b. The defense is tenable, foreign corporation without license to do business
cannot sue in the Philippines.
c. The defense is tenable because the foreign corporation is already guilty of
estoppel.
d. The defense is not tenable. A foreign corporation may sue in the Philippines
whether or not they have license to do business in the Philippines.
892. X issued a check in favor of his creditor, Y. It reads "Pay to Y the amount of
Seven Thousand Hundred Pesos (Php 700,000) Signed X." What amount should be
construed as true in such a case?
a. Php 700,000 c. Php 7,000
b. Php 700 d. Php 700,100
893. X sold all his shares in ABO Hotel Corporation to Y. X owns 99% of ABO Hotel
Corporation. As the new owner, Y wanted a reorganization of the hotel which is to
include primarily the separation of all existing employees and the hiring of new
employees. Which statement is most accurate?
a. With the change in ownership, in effect there is a new juridical entity and
therefore all employees are considered separated.
b. Despite the exchange in shareholder, there is actually no change in the juridical
entity and therefore existing employees can not automatically be considered
separated.
c. Y, as the new shareholder, has the right to retain only those employees who in
his judgment are qualified.
d. For as long as the existing employees are given their separation pay, they can be
terminated.
894. P authorized A to sign a negotiable instrument in his (P's) name. It reads: "Pay to
B or order the sum of Php 1M. Signed A". The instrument shows that it was drawn on P.
B
then indorsed to C, C to D and D to E. E then treated it as bill of exchange. Is
presentment for acceptance necessary in this case?
a. No, since the drawer and drawee are the same person
b. No, since the bill is non-negotiable, the drawer and drawee being the same
person
c. Yes, since the bill is payable to order, presentment is required for acceptance
d. Yes, in order to hold all persons liable on the bill
895. Statement 1: Even an incorporating director is required to own or be a

subscriber to at least one share.
Statement 2: Where a vacancy occurs in the Board of Directors, the same may be filled
only by the stockholder.
a. First statement is true but second statement is false
b. Both statements are true
c. First statement is false but second statement is true
d. Both statement are false
896. In an obligation to give a determinate thing, what rights are available to the
creditor?
First answer- To compel specific performance
Second answer- To recover damages in case of breach of the obligation
Third answer- To ask that the obligation be complied with the expense of the debtor
c. Only the first answer is correct
897. Statement 1: De jure corporations are not subject to attack, not even by the
government.
Statement 2: De facto corporations are subject to direct attack by the government,
although not subject to collateral attack by private individuals
898. The following contracts, except one, are void ab initio, Which is the exception?
a. That whose object is outside the commerce of men
b. That whose object did not exist at time of the transaction
c. That which contemplates an impossible service
899. Statement 1: An absent director may be represented by another person in

meetings of the Board of Directors.
Statement 2: Proxy voting is allowed in meetings of the stockholders and the Board
of Directors.
900. This is not a characteristic of a void or inexistent contract

a. The right to raise a defense of illegality cannot be waived
b. The action or defense for declaration of the nullity or inexistence of the contract
does not prescribe
c. Not subject to ratification
d. Defense of illegality of the contract is available to third persons whose interest
are not directly affected
901. Which of the following instance wherein non-voting shares is not allowed to
vote:
a. Payment of bonded indebtedness.
b. Mortgaging substantially all of the corporate property.
c. Issuance of additional Capital Stock
d. Investment of corporate fund in another corporation not for primary purpose of
the corporation.
902. Reformation is not the property remedy if

a. The mutual mistake of the parties causes the failure of the instrument to
disclose their real agreement
b. One party was mistaken and the other acted fraudulently or inequitably in such
a way that the instrument does not show their true intention
c. There was mistake, fraud, inequitable conduct or accident which prevented the
meeting of the minds of the contracting parties
d. The true intention of the contracting parties is not expressed in the instrument
purporting to embody the agreement by reason of mistake, fraud, inequitable
conduct or accident
903. The fishermen in Estancia, Iloilo organized a corporation. The articles of

incorporation were prepared, signed and filed with the Securities and Exchange
Commission. After some time, the corresponding certificate of incorporation was issued.
One of the directors of the corporation, however, discovered that of the authorized
capital stock subscribed which met the minimum requirement only 21% was paid to
Treasurer. What is the status of the corporation?
a. Corporation by estoppel c. Open Corporation
b. De jure corporation d. De facto corporation
904. Which of the following is not a requisite of fraud?

a. There must be a misrepresentation or concealment
b. The fraud must be serious
c. A party is induced by fraud to enter into contract
d. The fraud is employed by both parties upon each other
905. Under 2015 Implementing Rules of the Securities Regulation Code, a public
company means ant corporation with a class of equity securities listed on an Exchange,
or
a. With assets of at least Fifty Million Pesos (Php50,000,000.00) and has two
hundred (200) or more holders each holding at least one hundred (100) shares
of a class of its securities.
b. With assets of at least Fifty Million Pesos (Php50,000,000.00) and has one
hundred (100) or more holders each holding at least two hundred (200) shares
of a class of its securities.
c. With assets in excess of fifty million pesos (Php50,000,000.00) and has one
hundred (100) or more holders each holding at least two hundred (200) shares
of a class of its equity securities.
d. With assets in excess of fifty million pesos (Php50,000,000.00) and has two
hundred (200) or more holders each holding at least one hundred (100) shares
of a class of its equity securities
906. All companies covered by Under MC-6 of the Revised Rules on corporate
governance of 2009 shall have
a. At least two (2) independent directors or such number of independent directors

that constitutes twenty percent (20%) of the members of the Board, whichever
is lesser, but in no case less than two (2)
b. At least two (1) independent directors or such number of independent directors
is lesser, but in no case less than two (1)
c. At least two (2) independent directors or such number of independent directors
is higher, but in no case less than two (2)
d. Discretionary to the board of Director.
907. Under Under MC-6 of the revised rules on corporate governance of 2009, the
following shall be grounds for the permanent disqualification of a director, except?
a. Those convicted by final judgment for an offense involving moral turpitude.
b. Those adjudged by final judgment who have willfully violated any provision of
the Corporation code
c. Those convicted by final judgment of an offense punishable by imprisonment
for more than six (6) years.
d. Those who Refused to comply with the disclosure requirements of the
Securities Regulation Code.
908. Under MC-6 of the Revised rules on corporate governance of 2009 apply to the
following except?
a. Stockholder’s c. Internal auditor
b. Board of Director d. Audit Committee
909. MC-6 of the Revised Rules on corporate governance of 2009 apply to the
following except?
a. Registered corporations that sell equity and/or debt securities to the public that
are required to be registered with the Securities and Exchange Commission.
b. Branches or subsidiaries of foreign corporations operating in the Philippines
that have assets in excess of Fifty Million Pesos at least one hundred (100)
stockholders who own at least fifty (50) shares each of equity securities.
c. Registered corporations that are grantees of secondary licenses from the
Securities and Exchange Commission.
d. Those whose equity securities at are listed on an exchange
910. A without authority from B sold the letter’s car in the name of the latter. The
contact is therefore:
b. Voidable d. Void
911. Which of the following can be considered as a feature of a void contract? a.

Subject to ratification
b. It exists
c. Action or defense of nullity is subject to prescription
d. Novation cannot apply
912. Statements:
• Mutual error as to the legal affect of the agreement when the purpose of the
parties is frustrated may result in the reformation of the instrument.
• Mutual mistakes of the parties and the instrument does not express the true
agreement will make the contract voidable.
a. Both statements are false c. First is true; second is false
b. Both are true d. First is false; second is true
913. Liable for the loss of the subject matter by fortuitous event:
a. Creditor c. Both Creditor and debtor
b. Debtor d. None of the above
914. Statements:
• In case of doubt, a contract purporting to be sale shall be construed as
mortgage.
• In annulment of contracts, there shall always be mutual restitution of both
parties thereof.
a. First statement is false; second is true c. Both are true
b. Both are false d. First statement is true; second is false
915. Which of the following is not valid?
a. Mutual promise to marry entered into orally
b. Sale of immovable property orally entered into
c. One of the parties in a contract is incapable of giving consent
d. Mortgagor of an immovable cannot alienable it without the mortgagee’s
consent
916. Statements:
• Just like voidable and unenforceable contracts, rescissible contracts may also be
ratified,
• In case of fraud or mistake, the action for annulment must be made within four
years from the commission of the vice consent.
a. Both statements are true c. First is true; second is false
b. both are false d. first is false; second is true
917. D forced C to execute a promissory note.
a. Contract is rescissible the contract is fraudulent
b. The contract is void
c. C cannot demand payment from D because the contract is unenforceable
d. Contract remains to be valid
918. A and B agreed on February 3,2015 that B will construct the house of A in
January 2016. The contract was orally entered into. B received a down payment from A
with the balance payable after completion of the house. The contract is a. Voidable
because it not in public instrument.
b. Enforceable even if not in writing, having been ratified
c. Unenforceable because it is not in writing and yet performance there is after one
year from perfection
d. Void because it is not in writing as required by law
919. Example 1 – S sold to B in a private instrument his land. Later, B wanted to have
the sale registered, but registration requires a public instruments: In here, B may
compel S to execute the needed public instrument.
Example 2 – S sold to B orally his land. After B paid S the price he wants to register the
land in his name but he needed a public instrument of sale. In here B may compel S to
execute the needed public instrument.
a. Both examples are false c. Only the second is true
b. Only the first is true d. Both examples are true
920. A gave Bone million pesos for the latter to kill C. Before B could accomplish his
criminal intent to kill C, A changed his mind and demanded the return of the money
from B. Decide
a. A cannot recover the payment he made to B because it was a void contract which
does not follow recovery by the guilty party
b. A cannot recover the money because the contract is unenforceable
c. A can recover the money although the contract is void since the crime was not
committed
d. No recovery and both A and B will prosecuted for their crime
921. Three of the following are rescissible, which is not?

a. Sale of property under litigation made by defendant without the Consent of
plaintiff or authority of the court.
b. Those made to defraud creditors when the latter have no other means to
recover their claims.
c. Those agreed upon in representation of absentees, if the absentee suffers
lesion by more than ¼ of the value of the property subject of the contract
d. Contract of sale and the price is unusually inadequate resulting to lesion
922. A appointed B to sell his land:

If the authority of B is oral and the sale is in public instrument, the sale is void.
If the authority of B is in writing and the sale is oral, the contract is unenforceable.
a. The first statement is false; the second is true
b. the first is true; second is false
c. Both are true
d. Both are false
923. Example No. 1 – W, 16 years old, sold his house valued at P1M for P500,000 or a
lesion by more than one- fourth of the value of the said house.
Example No. 2: S sold his house valued at P1M for only P500, 000 because of his poor
judgment on the true value thereof.
a. Both are voidable c. No. 2 is unenforceable
b. No. 1 is rescissible; while No. 2 is d. Both contracts are
voidable binding
924. D borrowed a sum of money from C with G as guarantor. The loan is in writing
but the guaranty is oral. D failed to pay C, who now is demanding payment from G. Can
G be compelled to pay?
a. Yes, because he is the guarantor obliged to pay in case the debtor defaults
b. No, because the guaranty is void having been orally made
c. No, because the guaranty is unenforceable against G, it being oral
d. Yes, because the guaranty is unenforceable writing not needed
925. Statement No. 1 : If one party was mistaken and the other acted fraudulently or
inequitably in such a way that the instrument does not state their true intention, the
former may ask for the annulment of the contract.
Statement No. 2: The statement of a false cause in contacts shall render them void, if it
should not be proven that they were founded upon another cause which is true and
lawful.
a. Both are true c. No. 1 is true
926. In three of the following the contract is cleansed of its defect by ratification. Which
is not so ratified?
a. Contract where the creditor was damaged by the act of the debtor intended to
defraud him
b. . Contract entered into by a person incapable of giving consent
c. Sale of chattels orally entered into for a price not less than five hundred pesos
d. Lease of real property for more than one year orally entered into
927. D owes C P500. However, C’s right has already prescribed. Notwithstanding the
knowledge of this fact, D paid the amount. Realizing this mistake, D wants to recover
the amount he paid.
a. D can recover on the ground of mistake
b. D can recover because his obligation is not enforceable
c. D can recover otherwise C will be enriched at the expense of D
d. D cannot recover
928. Because A wants to sell hiss land to B but the latter does not want to buy thee
same, A foced B to buy his land. The contract:
a. Not binding upon B since his consent was vitiated
b. It is unenforceable as against B but not against A
c. May be ratified expressly or tacitly by A
d. It is valid, binding and unenforceable
929. Three of the following contracts are void. Which is the exception?
a. Those who cause, object or purpose is contrary to law, morals, good custom,
public order or public policy
b. Those which are absolutely simulated or fictitious
c. Those whose cause or objects did not exist at the time of the transaction
d. Those where both parties are incapable of giving consent to a contract
930. A threatened B with an administrative charge for immorality if the latter does not
marry her because she is already pregnant with their child. Fearing that she may do so,
B married her. The contract of marriage is therefore voidable because of threat. A
simple mistake of account may give rise to the annulment of the contract because of
mistake.
a. First statement is false; second is true c. Both are true
b. Both are false d. First is true; second is false
931. S makes an offer to B on January 1, 2007. B makes known his acceptance in a

letter sent on January 2, and received by S on January 5. Meantime, on January 3, S
became insane
a. The contract is voidable because one party is insane
b. There is already a meeting of minds, the contract is perfected
c. The contract is not binding because there is no meeting of minds
d. The contract is void the offer being ineffective
932. D obtained from C a loan amounting to P50,000.00 the same being secured by a
mortgage on D’s lot. Thereafter, C assigned his credit right to T with notice to D. Based
on the foregoing facts, which of the following statements is incorrect?
a. T cannot collect from D if D does not give his consent to the assignment
b. T can collect from D, D’s consent to the assignment is not required
c. T can collect from D and D cannot pay, T can foreclose the mortgage on the lot
d. The notice to D of the assignment is sufficient. D must take his payment to T and no
longer to C.
933. The stipulation in a contract to the effect that the debtor should remain as a
servant in the house and in the service of her creditor so long as she had not paid her
debt is void because it is:
a. Contrary to good custom c. Contrary to law and morality
b. Contrary to public policy d. Contrary to public order
934. A and B entered into a contract of mortgage. However, as written, the document
states it is a contract of sale with right of repurchase, the error due to the fault of the
clerk/typist. Hence:
a. The contract of sale must be annulled since it is voidable
b. The instrument has to be enforced as is for it is the proof of the agreement between
the parties
c. Because of the negligence of the parties in signing without first reading the
instrument, they are bound by the contents of the same
d. The instrument may be reformed because it does not express the true agreement of
the parties
935. X alleged that Y promised to give him one hectare of land. This is in
consideration of X’s meritorious services to Y. Y pleads in defense that since the promise
was not in writing, it is unenforceable under the Statute of Frauds. Decide.
a. The promise is unenforceable because it is not in writing
b. The Statute of Frauds is applied because A has rendered services
c. The Statute of Fraud is inapplicable here, because the promise to give the land
is not a sale of real property
d. The Statute of Frauds can apply to partially executed contract
936. A kind of mortgage which, although lacking some formality, form of words, or
requisites’ prescribed by law, show the intention of the parties to charge real property
as security for debt and contains nothing impossible or contrary to law is known as:
a. Legal mortgage c. Conventional mortgage
b. Equitable mortgage d. Voluntary mortgage
937. Three of the following are void contracts. Which is the exception?
a. Contracts where the cause is immoral
b. Contracts to prevent a known supporter of a political rival from voting for his
candidate for a valuable consideration
c. Contracts with valid consideration but with unlawful motives
d. Absolutely simulated contracts
938. A and B agreed on a contract of pledge. However, they entered into a contract of
mortgage in the honest belief that the mortgage and pledge are the same. The
instrument may be reformed:
a. No. The document cannot be reformed since the contract is void
b. No, it cannot be changed. They are bound by the document which speaks for itself
c. Yes. It can be reformed because it does not express the true agreement of the
parties
d. No. It cannot be reformed because there was no meeting of minds between the
parties and the remedy is annulment of contract 939. Which of the following is
correct?
a. An action to enforce judicially a natural obligation prescribes in 4 years
b. An action for annulment of contract is imprescriptible
c. An action to declare a contract void is not subject to prescription
d. An action for rescission of contract prescribes in five (5) years counted from
the execution of the contract.
940. A sold to B a fake rolex watch on January 3,2016. On January 13,2016,

Bdiscovered that the watch he brought from A was an imitation. The law provides that
he can annul the sale as voidable contract within four years. Prescription starts from
a. January 3,2016 when the sale was perfected
b. The time of delivery of the watch to B.
c. the time they first talked about the sale of the watch
d. January 3,2016 when the fraud was discovered by B
941. B fraudulently induces S to sell to him (B) a masterpiece painting for P100, 000.
Subsequently, B sold it to X for P120, 000, a good faith purchaser. S is entitled to
a. Annul the contract with B plus damages
b. Recover the painting from X but no damages
c. Recover damages from B
d. Annul the contract between B and X
942. This is a kind of symbolic delivery where the vendor remains in possession of
the property sold, such as by virtue of a lease agreement with the vendee.
a. Traditio longa manu c. Traditioconstitutumpossessorium
b. Traditiobrevimanu d. Delivery to common carrier
943. Which of the following contracts is voidable?
a. Those where both parties are incapable of giving consent to a contract
b. Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them
c. Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud
d. Those whose object is outside the commerce of men
944. S promised to sell his car to B for P200,000.00 giving B 30 days to decide. B
accepted the promise of S and informed S that he (B) would make known his decision
before the lapse of 30 days. He is also gave S P2,000.00 as consideration so that S would
hold on to his promise. The contract entered into between S and B and the
consideration given by B to S are known as:
a. Option contract and option money, respectively
b. Contract of sale and earnest money, respectively
c. Contract of sale and down payment, respectively
d. Contract of sale and reservation money, respectively
945. A sold a parcel of land to B by word of mouth and delivered to the latter the
Transfer Certificate of Title of the land. Can B compel A to execute the deed of sale of
the land?
a. B cannot compel A to execute the deed of sale as the sale being oral is
unenforceable.
b. B cannot compel A because the sale is void being oral
c. B can compel A because the contract is enforceable due to the delivery of the
TCT to him
d. B can compel A because the sale is merely voidable and therefore enforceable,
binding until annulled.
946. A contract of sale is not a

a. Principal contract c. Consensual contract
b. Nominate contract d. Real contract
947. Statement no. 1. Contract without cause are voidable because cause is
presumed to exist in a contract.
Statement no. 2. Offer must be absolute and acceptance must be certain before can
there be meeting of the minds of parties
a. First statement is false, while the second is true
c. Both statements are false
d. First statement is true while the second is false
948. Upon the proposal of a third person, a new debtor substituted the original
debtor without the latter’s consent. The creditor accepted the substitution. Later,
however, the new debtor became insolvent and defaulted in his obligation. What is the
effect of the new debtor’s default upon the original debtor?
a. The original debtor is freed of liability since novation took place and this
relieved him of his obligation
b. The original debtor shall pay or perform the obligation with recourse to the new
debtor
c. The original debtor remains liable since he gave no consent to the substitution
949. Statement no. 1. Contract of lease of a parcel of land for a term of one year
must be written otherwise unenforceable.
Statement no. 2. Contract of sale of a parcel of land must be in public instrument
otherwise unenforceable.
a. First statement is false while the second is true
b. Both statement are true
c. First statement is true while the second is false
950. If a movable property is sold separately to two or more different vendees,

ownership shall belong to the person:
a. Who in good faith first paid the purchase price is full
b. Who in good faith first recorded the sale in the Registry of Property
c. Who in good faith first presents the oldest title
d. Who in good faith first took possession of the property
951. Three of the following contracts are void. Which one is not?
a. Oral contract of partnership wherein more than Php3, 000.00 has been
contributed by the partners.
b. Agent given oral authority to sell the land of the principal
c. Partnership contracts in private instrument wherein immovable have been
contributed.
d. Oral contract of limited partnership.
952. The following may not be valid objects of a contract of sale except: a. Objects
outside the commerce of men c. Future goods
b. illicit thing d. Impossible service
953. Which one of the following constitutes fraud?
a. Misrepresentation made not in bad faith.
b. Misrepresentation by a third person and both parties mistaken
c. Usual exaggerations in trade or dealer’s/ sale’s talk
d. Failure to disclose facts when there is a duty to reveal them as when the parties
are bounded by confidential relations.
954. A contract of sale is perfected:

a. Upon compliance with the requirements of the law as to form
b. Upon delivery of the object of the contract
c. Upon the meeting of the minds on the thing which is the subject of the contract and
upon the price
d. Upon demand
955. Statement no. 1. There is acceptance of the offer only after it has come to the
knowledge of the offerer.
Statement no. 2. Lesion or inadequacy of cause shall as a rule make a contract
defective.
a. Both statement are true
b. Second statement is true; first is false
c. Both statement are false
d. First statement is true; second is false
956. When the goods are delivered to the buyer, the ownership thereof passes to the
buyer in
a. Sale on approval c. Sale on trial
b. Sale on return d. Contract to sell
957. Statement no. 1 If the cause is not stated in the contract it is presumed that it does
not exist therefore the contract is void.
Statement no. 2 In order that a contract may be voidable, there must be a damage.
a. Both statements are false.
c. First statement is false, second is true.
d. First statement is true, second is false.
958. A brought B’s property through C, an agent empowered with a special power of
attorney (SPA) to sell the same. When A was ready to pay as scheduled, B called,
directing A to pay directly to him. On learning this, C, B’s agent, told A to pay through
him as his SPA provided and to protect his commission. Faced with two claimants, A
consigned the payment in court. B protested, contending that the consignation is
ineffective since no tender of payment was made to him. Is he correct?
a. No, since consignation without tender of payment is allowed in the face of the
conflicting claims on the debtor.
b. Yes, as owner of the property sold, B can demand payment directly himself.
c. Yes, since A made no announcement of the tender.
d. Yes, a tender of payment is required for a valid consignation.
959. Contract which cannot be sued upon unless ratified, thus it as if they have no effect
yet:
a. Voidable c. Void
b. Rescissible d. Unenforceable
960. A natural obligation under the New Civil Code of the Philippines is one which:
a. The obligor has a moral obligation to do, otherwise entitling the oblige to damages
b. Refers to the obligation in writing to do or no to do.
c. The oblige may enforce through the court if violated by the obligor
d. Cannot be judicially enforced but authorizes the obligee to retain the obligor’s
payment or performance
961. Which of the following contracts is valid?

a. Oral contract of agency giving authority to an agent to sell the land of the
principal.
b. Oral partnership agreement where immovable are contributed.
c. Oral contract of sale of an immovable entered into by an agent who is given
oral authority by the principal.
d. Oral agreement to answer all the expenses for the wedding reception if A
marries B.
962. A borrowed P1 million from a bank, secured by a mortgage on his land. Without
his consent, his friend B paid the whole loan. Since A benefited from the payment, can B
compel the bank to subrogate him in its right as mortgage of A’s land?

b. No, since B paid for A’s loan without his approval
c. Yes, since a change of creditor took place by novation with the bank’s consent
d. Yes, since it is but right that B be able to get back his money and if not, to
963. A sold to B a genuine bottle of Fundador brandy. However, upon delivery the
former substituted a fake, B now wants to annul the sale. Decide:
a. The contract is void ab initio therefore it can be annulled.
b. The contract can be annulled since it is voidable due to fraud.
c. The contract cannot be annulled because it is only incidental fraud.
d. There is dolo incidente therefore it can be annulled.
964. X, the owner, constituted a 10-year usufruct on his land as well as on the
building standing on it in Y’s favor. After flood totally destroyed the building 5 years
later, X told Y that an act of God terminated the usufruct and that he should vacate the
land. Is X, the owner of the land, correct?
a. No, since the building was destroyed through no fault of Y
b. No, since Y still has the right to use the land and the materials left on it
c. Yes, since Y cannot use the land without the building
d. Yes, since the destruction of the building without the X’s fault terminated the
usufruct
965. G was appointed as the guardian of M who owns a parcel of land valued at Php 1M.
M sold the land only for Php. 7M to B. The contract is defective because:
a. Unenforceable c. Rescissible
b. Voidable d. Void
966. R borrowed P1 million from E and F who acted as solidary creditors. When the loan
matured, E wrote a letter to R, demanding payment of the loan directly to him. Before R
could comply, F went to see him personally to collect and he paid him. Did R make a
valid payment?
a. No, since R should have split the payment between Rodrigo and Fernando
b. No, since E, the other solidary creditor already made a prior demand for payment
from R
d. Yes, since F was a solidary creditor, payment to him extinguished the obligation
967. S was intimidated by B to sell to the latter his parcel of land at very low price. C, the
creditor of S was thus damaged since the former has no other means of collecting from
S. The remedy of S:
a. Rescission c. Have it declared by court as void.
b. Annulment d. Reformation of the contract.
968. It is a conduct that may consist of giving, doing, or not doing something.
a. Obligation b. Juridical necessity
c. Prestation d. Contract
969. S made an offer to B for the sale of his car which was received by the latter on
January 2, 2001. On January 4, 2001 B sent a latter of acceptance by mail. On January 3,
2001 S sent another letter to B withdrawing his offer. In this case;
a. There was a perfected sale because of the acceptance of the offer by B before
he had a knowledge.
b. There was a perfected sale because S estopped from withdrawing his offer
unless B had no knowledge thereof before acceptance.
c. No sale took place because before acceptance was conveyed, the offer had
been withdrawn.
d. The offer was ineffective for lack of certainty as to the object.
970. The following are the elements of quasi-delict, except:

a. Act or omission c. damage/injury
b. Fault/negligence d. Pre-existing contract
971. Statements:
1. An offer made by the principal is accepted from the time acceptance is
conveyed to him or his agent.
2. The object of the contract may be future things including future inheritance.
a. Both statements are true. c. Second is false, first is true.
b. Both are false. d. First is false, second is true
972. This term refers to a delay on the part of both the debtor and creditor in reciprocal
obligations.
a. Mora accipiendi c. Compensation morae
b. Mora solvendi d. Solution indibit
973. A sold in writing to B his stereo set for Php 600.00. There is no delivery from A and
no payment of the price from B. Contract is:
a. Voidable c. Void
b. Unenforceable d. Enforceable
974. The following are the elements of an obligation, except:
a. Juridical/Legal tie c. Passive subject
b. Active subject d. Consideration
975. If the words of the contract are clear and leave no doubt on the intentions of
the parties, interpretation of the contracts may be proper.
Incase of gratuitous contracts, doubts shall be resolved in the favor of greatest
reciprocity of interest.
a. The first statement is false; second is true.
b. The first statement is true; second is false.
c. Both are true.
d. Both are false.
976. A debtor is liable for damages if he is guilty of any of the following, except: a.
default (mora)
b. mistake
c. negligence (culpa)
d. breach through contravention of the tenor thereof
977. S sold his parcel of land only for Php 1M although the value of the same is Php 2M.
He thus suffered damage or lesion in the sale due to the inadequacy of the price.
Therefore the contract is
a. Voidable c. Valid, not defective.
978. A owed B P1 million due on October 1, 2015 but failed to pay heron due date. B
sent a demand letter to A giving her 5 days from receipt within which to pay. Two days
after receipt of the letter, A personally offered to pay B in manager’s check but the latter
refused to accept the same. The 5 days lapsed. May A’s obligation be considered
extinguished?
a. Yes, since B’s refusal of the manager’s check, which is presumed funded, amounts
to a satisfaction of the obligation
c. Yes, since A tendered payment of the full amount due
d. No, since a manager’s check is not considered legal tender in the Philippines
979. D, fearing that his creditor C, would go after his only parcel of land to satisfy his
claim for payment of D’s debt, sold his said land to X who did not know of D’s intention.
Decide:
a. C can ask for annulment of the sale as this is voidable contract.
b. C may ask for damages against X since he was damaged by the sale.
c. C can file an action for rescission of the sale.
d. C cannot ask for the rescission of the sale.
980. It is a juridical relation arising from lawful, voluntary and unilateral acts based
on
the principle that no one should unjustly enrich himself at the expense of another
a. Quasi-contract c. Contract
b. Quasi-delict d. Delict
981. A without authority from B sold the latter’s car in the name of latter. The contract
is therefore:
b. Voidable d. Void
982. B, F, and T bound themselves solidarily to pay A the amount of P5,000.00.
Suppose B paid the obligation, what is his right as against his co-debtors? a. B can ask
for reimbursement from F and T
b. B can sue F and T for damages
c. B can sue for rescission
d. B can claim a refund from A
983. A appointed B to sell his land:

If the authority of B is oral and the sale is in public instrument, the sale is void.
If the authority of B is in writing and the sale is oral, the contract is unenforceable.
a. The first statement is false, second is true.
b. The first is true, second is false.
c. Both are true.
d. Both are false.
984. The following are the requisites of fortuitous event, except: a. Cause
is independent of the will of the debtor
b. The event is unforeseeable/unavoidable
c. Occurrence renders it absolutely impossible for the debtor to fulfill his obligation in
a normal manner; impossibility must be absolute not partial, otherwise not force
majeure
d. Debtor contributed to the aggravation of the injury to the creditor
985. In three of the following the contract is cleansed of it’s defect by ratification.
Which is not so ratified?
a. Contract where the creditor was damaged by an act of the debtor intended to
defraud him.
b. Contract entered into by a person incapable of giving consent.
c. Sale of chattels orally entered into for a price not less than five hundred pesos.
d. Lease of real property for more than one year orally entered into.
986. B, F and T bound themselves solidarily to pay A the sum of P10,000.00. When
the obligation became due and demandable, A sued B for the payment of the
P10,000.00. B moved to dismiss on the ground that there was failure to include F and T
who are also debtors. Will the motion to dismiss prosper?
a. Yes, because F and T should have been impleaded as their obligation is solidary
b. No, because the creditor may proceed against any one of the solidary debtors or
some or all of them simultaneously
c. No, because a motion to dismiss is a prohibited pleading
d. Yes, because F and T should also pay their share of the obligation
987. Because A wants to sell his land to B but the latter does not want to buy the
same, A forced B to buy his land. The contract:
a. Not binding upon B since his consent was vitiated.
b. It is unenforceable as against B but not against A.
c. May be ratified expressly or tacitly by A.
d. It is valid, binding and enforceable.
988. It is an intentional evasion of the faithful performance of the obligation

a. Negligence c. Delay
b. Fraud d. Mistake
989. D borrowed a sum of money from C with G as guarantor. The loan is in writing
but the guaranty is oral. D failed to pay C. Who now is demanding payment from G. Can
G be compelled to pay?
a. Yes, because he is the guarantor obliged to pay in case of debtor defaults.
b. No, because the guaranty is void having been orally made.
c. No, because the guaranty is unenforceable, against G, it being oral.
d. Yes, because the guaranty is enforceable, writing is not needed.
990. The following are the requisites of morasolvendi, except:

a. Obligation pertains to the debtor and is determinate, due, demandable, and
liquidated
b. Obligation was performed on its maturity date
c. There is judicial or extrajudicial demand by the creditor
d. Failure of the debtor to comply with such demand
991. A and B agreed on February 3, 2000 that B will construct the house of A in
January 2002.
The contract was orally entered into. B received a down payment from A with the
balance payable after completion of the house. The contract is:
a. Voidable because it not in public instrument.
b. Enforceable even if not in writing, having been ratified.
c. Unenforceable because it is not in writing and yet performance there is after
one year perfection.
d. Void because it is not writing as required by law.
992. X borrowed money from a bank, secured by a mortgage on the land of Y, his
was not the borrower. Is the bank’s action correct?
a. Yes, since X, the true borrower, did not give his consent to Y’s offer to pay
b. No, since anybody can discharge X’s obligation to his benefit
obligation
993. A sold to B a fake Rolex watch on January 3, 2001. On January January 13, 2001,
B discovered that the watch he bought from A was imitation. The law provides that he
can annul the sale as voidable contract within four years. Prescription starts from:
a. January 3, 2001 when the sale was perfected.
b. The time of delivery of the watch to B.
c. The time they first talked about the sale of the watch.
d. January 13, 2001 when the fraud was discovered by B.
994. A debtor may still be held liable for loss or damages even if it was caused by
fortuitous event in any of the following instances, except:
a. The debtor is guilty of dolo, malice or bad faith, has promised the same thing to two
or more persons who do not have the same interest
b. The debtor contributed to the loss
c. The thing to be delivered is generic
d. The debtor is guilty of fraud, negligence or delay or if he contravened the tenor of
the obligation
995. A and B entered into a contract of mortgage. However, as written the document
states it is a contract of sale with right of repurchase, the error due to the fault of the
clerk/typist.
Hence:
a. The contract of sale must be annulled since it is voidable.
b. The instrument has to be enforced as is for it is the proof of the agreement
between the parties.
c. Because of negligence of the parties in signing without the first reading
instrument, they are bound by the contents of the same.
d. The instrument may be reformed because it does not express the true
agreement of the parties.
996. An obligation which is based on equity and natural law is known as:
a. pure c. civil
b. quasi-contract d. natural
997. If the cause is not stated in the contract, it presumed that it is not exist.
a. First statement is false; second is true.
b. First is true, second is false.
c. Both are true.
d. Both are false.
998. The following are the requisites of legal compensation, except:

a. That each of the obligors is bound principally and that he be the same time a
principal creditor of the other
b. That both debts consist in a sum of money, or if the things due are consumable,
they be the same kind, and also of the same quality if the latter has been stated
c. That the two (2) debts are not yet clue
d. That they be liquidated and demandable
999. D borrowed a sum of money from C with a certain rate in interest. C now wants to
increase the rate of interest without the consent of D. What is principle in contracts
prohibits C from doing so?
a. Autonomy of contracts
b. Relativity of contracts
c. Mutuality of contracts
d. Consensuality of contracts
1000. D bought a car from J and delivered a check in payment of the same, Has D paid
the obligation?
a. No, not yet, The delivery of promissory notes payable to order, or bills of exchange
or other mercantile documents shall produce the effect of payment only when they
have been cashed, or when through the fault of the creditor they have been
impaired
b. Yes, because a check is a valid legal tender of payment
c. It depends. If the check is a manager’s check or cashier’s check it will produce the
effect of payment. If it’s an ordinary check, no payment
d. Yes, because a check is as good as cash
ANSWER KEY
Regulatory Framework for Business Transactions
1 A 31 B 61 C 91 B 121 B 151 A
2 A 32 A 62 C 92 B 122 B 152 B
3 C 33 A 63 C 93 C 123 D 153 A
4 A 34 D 64 B 94 D 124 B 154 D
5 D 35 D 65 D 95 C 125 A 155 C
6 A 36 B 66 D 96 D 126 C 156 B
7 B 37 B 67 D 97 C 127 C 157 A
8 B 38 B 68 B 98 D 128 B 158 D
9 B 39 C 69 D 99 D 129 A 159 A
10 A 40 C 70 C 100 B 130 D 160 A
11 A 41 A 71 B 101 A 131 D 161 A
12 C 42 A 72 A 102 C 132 B 162 C
13 C 43 A 73 D 103 A 133 D 163 A
14 A 44 B 74 D 104 A 134 D 164 B
15 C 45 C 75 C 105 A 135 B 165 A
16 C 46 C 76 D 106 D 136 B 166 C
17 B 47 D 77 D 107 A 137 C 167 D
18 A 48 B 78 D 108 B 138 C 168 C
19 D 49 D 79 A 109 A 139 B 169 C
20 A 50 C 80 C 110 D 140 B 170 B
21 A 51 A 81 D 111 C 141 C 171 D
22 B 52 C 82 B 112 B 142 D 172 C
23 A 53 A 83 C 113 D 143 B 173 D
24 B 54 C 84 A 114 B 144 A 174 B
25 D 55 C 85 C 115 D 145 C 175 A
26 A 56 D 86 D 116 C 146 D 176 C
ANSWER KEY
27 D 57 D 87 A 117 D 147 D 177 D

28 A 58 D 88 D 118 D 148 D 178 A
29 A 59 B 89 A 119 C 149 C 179 A
30 A 60 A 90 C 120 B 150 B 180 D
181 A 211 C 241 D 271 B 301 C 331 B

182 D 212 A 242 B 272 A 302 B 332 C
183 D 213 D 243 A 273 A 303 A 333 C
184 D 214 B 244 D 274 B 304 A 334 A
185 C 215 D 245 C 275 D 305 D 335 A
186 A 216 C 246 B 276 D 306 C 336 C
187 C 217 A 247 D 277 B 307 B 337 A
188 C 218 C 248 A/B 278 C 308 A 338 A
189 A 219 D 249 B 279 D 309 B 339 D
190 A 220 D 250 B 280 D 310 D 340 C
191 C 221 C 251 C 281 C 311 A 341 C
192 C 222 B 252 D 282 B 312 B 342 C
193 B 223 B 253 C 283 B 313 D 343 B
194 B 224 A 254 B 284 A 314 B 344 A
195 B 225 C 255 A 285 A 315 C 345 A
196 B 226 C 256 C 286 D 316 D 346 A
197 C 227 D 257 C 287 C 317 D 347 C
198 A 228 C 258 B 288 D 318 B 348 B
199 B 229 B 259 C 289 A 319 C 349 B
200 C 230 A 260 C 290 C 320 C 350 B
201 D 231 D 261 C 291 C 321 D 351 A
ANSWER KEY
202 C 232 C 262 E 292 C 322 B 352 C
203 B 233 B 263 A 293 B 323 A 353 A
204 C 234 D 264 D 294 C 324 A 354 B
205 A 235 B 265 A 295 C 325 B 355 D
206 A 236 C 266 A 296 C 326 C 356 B
207 C 237 C 267 C 297 C 327 A 357 D
208 D 238 A 268 C 298 A 328 C 358 B
209 A 239 C 269 B 299 A 329 A 359 A
210 C 240 A 270 A 300 D 330 A 360 B
361 D 391 B 421 B 451 A 481 D 511 B

362 C 392 A 422 D 452 D 482 A 512 C
363 D 393 B 423 D 453 D 483 A 513 D
364 B 394 D 424 C 454 B 484 A 514 B
365 A 395 B 425 B 455 A 485 A 515 A
366 D 396 D 426 B 456 C 486 A 516 B
367 C 397 B 427 A 457 B 487 B 517 C
368 C 398 D 428 B 458 B 488 B 518 D
369 D 399 C 429 A 459 D 489 A 519 D
370 A 400 B 430 C 460 C 490 B 520 C
371 A 401 D 431 A 461 A 491 C 521 D
372 B 402 A 432 A 462 D 492 C 522 B
373 A 403 B 433 B 463 C 493 D 523 B
374 A 404 C 434 B 464 D 494 B 524 B
375 A 405 C 435 B 465 A 495 A 525 C
376 B 406 D 436 D 466 D 496 A 526 A
377 D 407 B 437 B 467 B 497 C 527 B
378 B 408 C 438 A 468 A 498 C 528 D
ANSWER KEY
379 A 409 D 439 C 469 B 499 C 529 C

380 B 410 A 440 A 470 C 500 B 530 D
381 C 411 C 441 A 471 B 501 D 531 A
382 C 412 B 442 B 472 B 502 A 532 B
383 C 413 D 443 B 473 D 503 A 533 C
384 D 414 D 444 C 474 D 504 A 534 C
385 D 415 A 445 A 475 A 505 B 535 A
386 D 416 C 446 B 476 A 506 D 536 B
387 D 417 D 447 C 477 C 507 D 537 D
388 D 418 C 448 D 478 D 508 C 538 D
389 C 419 A 449 B 479 D 509 B 539 C
390 A 420 D 450 D 480 D 510 B 540 B
541 A 571 A 601 C 631 C 661 B 691 B
542 D 572 C 602 D 632 B 662 A 692 D
543 A 573 B 603 D 633 D 663 C 693 A
544 C 574 D 604 D 634 B 664 C 694 D
545 B 575 A 605 A 635 D 665 D 695 C
546 A 576 A 606 B 636 B 666 C 696 D
547 A 577 B 607 D 637 A 667 D 697 D
548 C 578 D 608 B 638 A 668 C 698 D
549 A 579 C 609 D 639 B 669 D 699 D
550 A 580 D 610 D 640 D 670 B 700 D
551 D 581 C 611 C 641 C 671 C 701 D
552 D 582 B 612 A 642 B 672 A 702 D
553 B 583 D 613 B 643 C 673 B 703 D
554 D 584 B 614 D 644 D 674 A 704 D
555 C 585 D 615 D 645 B 675 D 705 D
ANSWER KEY
556 D 586 D 616 D 646 B 676 C 706 D
557 C 587 D 617 C 647 A 677 D 707 B
558 A 588 A 618 A 648 B 678 D 708 D
559 D 589 D 619 C 649 A 679 A 709 C
560 B 590 B 620 A 650 A 680 A 710 D
561 A 591 D 621 A 651 B 681 B 711 D
562 B 592 D 622 B 652 B 682 D 712 B
563 B 593 A 623 D 653 B 683 A 713 A
564 C 594 C 624 C 654 B 684 B 714 B
565 D 595 C 625 C 655 B 685 C 715 A
566 C 596 A 626 C 656 B 686 C 716 C
567 B 597 D 627 D 657 D 687 C 717 C
568 C 598 D 628 B 658 D 688 B 718 A
569 D 599 B 629 C 659 C 689 D 719 A
570 D 600 D 630 A 660 A 690 C 720 A
721 C 751 D 781 D 811 A 841 C 871 A

722 B 752 D 782 B 812 B 842 A 872 B
723 A 753 A 783 D 813 B 843 D 873 C
724 B 754 D 784 A 814 D 844 D 874 D
725 B 755 B 785 A 815 B 845 A 875 D
726 B 756 B 786 C 816 D 846 D 876 A
727 D 757 C 787 A 817 D 847 B 877 A
728 B 758 A 788 D 818 C 848 B 878 A
729 C 759 A 789 B 819 B 849 B 879 B
730 D 760 A 790 C 820 C 850 C 880 C
731 A 761 B/D 791 A 821 C 851 D 881 D
732 A 762 C 792 B 822 C 852 D 882 C
ANSWER KEY
733 B 763 B 793 A 823 D 853 C 883 A

734 C 764 B 794 B 824 D 854 C 884 C
735 A 765 D 795 A 825 A 855 B 885 B
736 A 766 A 796 C 826 A 856 B 886 B
737 C 767 B 797 D 827 B 857 C 887 A
738 C 768 D 798 D 828 C 858 B 888 C
739 D 769 C 799 A 829 C 859 B 889 D
740 A 770 B 800 B 830 C 860 C 890 B
741 A 771 B 801 D 831 B 861 C 891 A
742 A 772 B 802 C 832 A 862 D 892 A
743 B 773 A 803 B 833 C 863 A 893 B
744 C 774 D 804 D 834 C 864 C 894 A
745 D 775 B 805 A 835 A 865 C 895 B
746 A 776 A 806 D 836 D 866 C 896 B
747 A 777 A 807 C 837 A 867 D 897 B
748 B 778 D 808 D 838 C 868 C 898 D
749 D 779 B 809 B 839 A 869 C 899 D
750 A 780 B 810 C 840 A 870 D 900 D
901 A 921 D 941 C 961 D 981 C

902 C 922 C 942 C 962 B 982 A
903 D 923 D 943 C 963 C 983 C
904 D 924 C 944 A 964 B 984 D
905 D 925 D 945 D 965 B 985 A
906 A 926 A 946 D 966 C 986 B
ANSWER KEY
907 D 927 D 947 C 967 B 987 D
908 B 928 D 948 A 968 C 988 B
909 B 929 D 949 D 969 C 989 C
910 C 930 B 950 D 970 D 990 B
911 D 931 A 951 A 971 C 991 B
912 C 932 A 952 C 972 C 992 C
913 D 933 C 953 D 973 D 993 D
914 D 934 D 954 C 974 D 994 C
915 D 935 C 955 D 975 D 995 D
916 B 936 B 956 B 976 B 996 D
917 D 937 C 957 A 977 C 997 D
918 B 938 D 958 A 978 B 998 C
919 D 939 C 959 D 979 D 999 C
920 C 940 D 960 D 980 A 1000 A

Regulatory Framework For Business Transaction-SIR SALVA

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1. Which of the following phrases means that the obligation is SOLIDARY? I.

Individually and collectively

A. I, II, III, IV, V, VI, VII, VIII, IX

4. Which of the following is a ground for involuntary dissolution of cooperative

8. S sold a residential condominium unit to B at an installment price of P6,000,000

13. The old obligation is replaced by a new obligation.

15. What is the prescriptive period of action based on quasi-contract?

19. Which of the following obligations may be subject to LEGAL COMPENSATION?

28. In case of payment of money or delivery of property for an illegal purpose,

a. None, since there is no mode of payment

46. Serena published in the newspaper an “Invitation to Bid” inviting proposals to

52 I. In a contract of sale, the object is property.

56 Which of the following statement is true?

64. Culpa levis under the Roman Law means:

68. Statement I: Obligations derived from law are presumed

71. Which of the following is not a mode of extinguishing an obligation?

73. Waiver of future fraud is?

74. ABC Corporation is undergoing liquidation. What will happen to ABC

75. If the obligation is payable in foreign currency, which is correct?

80. “ DoutFacias ” means:

83. Which of the following is not correct about alternative obligation?

86. Which of the following statement about fraud is not correct?

88. Which of the following is not correct about solidary obligation?

91. The following are the requisites of fortuitous event, except:

93. Which of the following is not correct about penal clause?

94 . What is the maximum amount to be granted as compensation to board of directors

97. What are the requisites of a condition?

98.Which of the following is not really a mode of extinguishment of obligation?

100. A condition which, if imposed on an obligation will be disregarded and will

106. Which of the following statement is not correct?

107. In case of an obligation subject to a suspensive condition, what is the effect if

111. Which of the following statements is not correct?

113. D obtained a loan from C amounting to P500,00.00 payable on February 1,

114. Which of the following executory contracts is not required to be in writing to be

115. Facultative as distinguished from Alternative obligation

117. To whose benefit is a period presumed to be designated?

124. S sold a residential condominium unit to B at an installment price of P6,000,000

126. Which of the following is correct about relatively simulated contract?

131. Which of the following statement about cause is not correct?

135.1st statement – Cession in payment is commutative and governed by the law on

136. When in order to wrest consent, serious or irresistible force is employed.

141. Which of the following statements is not correct?

142. What is the first rule in application of payment?

143.Which of the following is a valid payment?

154. Which of the following statements is not correct?

157. What is the required vote for declaration of stock dividends?

161.The following contracts may be ratified, except:

a. A contract of sale involving a future inheritance

1st Answer – When the debtor refuses to pay the penalty

168. This is not necessary in order that compensation may prosper

169. A contributed P10,000; B contributed P15,000; and C contributed P5,000 to

174. A general professional partnership must

175. If a natural obligation is voluntarily fulfilled by a minor who is between 18 and

177. Which of the following is NOT a purpose of a cooperative?

178. A and B agreed to contribute their respective farms to form a partnership. A

182. Which of the following is not an obligation of a partner?

183. What is the nature of an action for rescission?

199. Annulment is not a proper remedy under the following; except: