OBLIGATIONS – SORIANO
1. It is a wrong committed without any pre-existing relations between parties.
a. Natural obligations
b. Quasi-delict
c. Quasi-contract
d. Crime
2. One of the following is a determinate thing. Which is it?
a. a cow
b. a horse
c. a Toyota car with engine no. 12345, body no. 34890 and plate no. ABC 123
d. a ring with diamond embellishment
3. Demand must be made on the due date of the obligation in order for delay to exist in one of the
following cases. Which is it?
a. When it was stipulated by the parties that demand need not be made.
b. When the law provides that demand need not be made.
c. When the obligation does not indicate whether demand must be made or not on due date.
d. When time is of essence in the contract.
4. This refers to delay on the part of the creditor.
a. mora solvendi ex re
b. compensation morae
c. mora solvendi ex personae
d. mora accipiendi
5. There shall be no liability for loss due to fortuitous events in one of the following. 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 require 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.
6. The following are the remedies of the creditor to pursue his claims against the debtor, except to:
a. pursue the property owned in possession of the debtor
b. exercise all the rights and bring all the actions of the debtor (accion subrogatoria)
c. impugn the acts which the debtor may have done to defraud his creditors (accion pauliana)
d. compel the debtor to perform the service in obligations to do
7. D borrowed P50,000.00 from C. C dies before he has collected the debt leaving S, his son, as heir.
Which of the following statements is correct?
a. S can collect from D although D and C did not agree that the credit right will pass on to the heirs of C.
b. S cannot collect because the credit right is personal to C.
c. S can collect only if D and C agreed that the credit right will pass on the heirs of C.
d. S cannot collect because the law prohibits the transmission of the credit right.
8. D is obliged to give C a specific car if C passes the CPA Licensure Examination. D’s obligation is an
example of:
a. a pure obligation.
b. an obligation with a suspensive condition
c. an obligation with a resolutory condition
d. an obligation with a period
9. One of the following obligations is not immediately demandable.
a. pure obligation
b. obligation with a resolutory condition
c. obligation with an in diem period
d. obligation with an ex die period
10. One of the following is a void obligation:
a. D is obliged to give C P5,000.00 if C does not go to the moon.
b. D is obliged to give C P5,000.00 if D goes to Baguio.
c. D is obliged to give C P5,000.00 if C goes to Baguio.
d. D is obliged to give C P5,000.00 if D wins first prize in the sweepstakes on a ticket that he had already
purchased.
11. D is obliged to give C P10,000.00 if X dies. This is an example of:
a. an obligation with a suspensive condition
b. an obligation with a resolutory condition
c. an obligation with a period
d. a pure obligation
12. D is obliged to give C a specific ring. The parties agreed that D may give a specific bracelet as
substitute. Which of the following statements is true?
a. If the ring is lost through a fortuitous event before substitution, the obligation is extinguished.
b. If the bracelet is lost through a fortuitous event before substitution, the obligation is extinguished.
c. If the ring is lost through a fortuitous event after substitution, the obligation is extinguished.
d. If the ring is lost through the debtor’s fault after substitution, the debtor shall pay damages.
13. A, B, C and D are obliged to give V, W, X, Y and Z P20,000.00
a. V may collect from A P20,000.00
b. V may collect from A P5,000.00
c. V may collect from A P1,000.00
d. V may collect from A P4,000.00
14. A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P20,000.00
a. V may collect from B P20,000.00
b. V may collect from B P4,000.00
c. V may collect from B P5,000.00
d. V may collect from B P1,000.00
15. A, B, C and D, solidary debtors, are obliged to give V, W, X, Y and Z, joint creditors, P20,000.00
a. V may collect from C P20,000.00
b. V may collect from C P4,000.00
c. V may collect from C P5,000.00
d. V may collect from C P1,000.00
16. A, B, C and D, solidary debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P20,000.00
a. V may collect from D P20,000.00
b. V may collect from D P4,000.00
c. V may collect from D P5,000.00
d. V may collect from D P1,000.00
17. A, 25, B, 35, and C, 17, are solidary debtors of X in the amount of P9,000.00
a. X may collect from A P9,000.00
b. X may collect from A P6,000.00
c. X may collect from A P1,000.00
d. X may collect nothing because the obligation is voidable, C being a minor.
18. The following obligations are divisible, except an obligation:
a. to give definite things.
b. which has for its object the execution of a certain number of works.
c. which has for its object the accomplishment of work by metrical units.
d. which by its nature is susceptible of partial performance.
19. in obligations with a penal clause, the creditor as a rule may recover from the debtor in case of
breach of the following;
a. the penalty as agreed upon, plus damages and interest
b. the penalty and damages
c. the penalty and interest
d. only the penalty
20. Consider the following statements:
I. The nullity of the principal obligation carries with it the nullity of the penal clause.
II. The nullity of the principal obligation does not carry with it the nullity of the penal clause.
III. The nullity of the penal clause carries with it the nullity of the principal obligation.
IV. The nullity of the penal clause does not carry with it the nullity of the principal obligation.
a. Statements I and III are true.
b. Statements I and IV are true.
c. Statements II and III are true.
d. Statements II and IV are true.
21. D borrowed from C P50,000.00. The obligation is secured by a chattel mortgage on D’s Toyota car.
Subsequently, D paid C P20,000.00. Unknown to D, a third person, pays C P50,000 believing that D still
owed C such amount.
a. T can recover 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 C without the knowledge and consent of D.
c. T can recover P30,000.00 from D. If 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.
22. The following statements concerning payment by cession are true, except one. Which is it?
a. The creditors become the owners of the properties of the debtor that were ceded to them.
b. Payment by cession extinguishes the obligations only to the extent covered by the proceeds of the
sale of the debtor’s properties.
c. The debtor must be insolvent.
d. Cession affects all the properties of the debtor except those exempt from execution.
23. Consignation alone without any tender of payment is sufficient in the following cases, except:
a. when the creditor is absent or unknown or does not appear at the place of payment.
b. when the creditor presents the title to the obligation for collection.
c. when without just cause, the creditor refuses to give a receipt.
d. when two or more persons claim the same right to collect.
24. M owes P P10,000.00. The obligation is evidenced by a promissory note. Subsequently, P assigned
the note to A, A to B, B to C, and C back to M. The obligation of M is extinguished by:
a. compensation
b. confusion
c. condonation
d. The obligation is not extinguished because there was no payment
25. In order that condonation may extinguish an obligation involving a movable property whose value
exceeds P5,000.00—
a. It is sufficient that the condonation and the acceptance are in writing, even a private one.
b. It is required that the condonation and the acceptance be in a public instrument.
c. The delivery of the document evidencing the debt is sufficient since the property is movable.
d. The condonation and the acceptance may be made orally.
26. Henry, husband, and Wilma, wife, are legally separated. By order of the court which decreed the
legal separation, Henry is obliged to give a monthly support of P10,000.00 to Wilma payable within the
first five days of the month. Wilma owes Henry P10,000.00 by way of business loan. On the other hand,
Henry has not yet given Wilma’s support of P10,000.00 for this month. Both debts are already due.
Which of the following statements is correct?
a. Both debts are extinguished by legal compensation because both are already due.
b. Wilma may claim compensation but not Henry.
c. Henry may claim compensation but not Wilma.
d. Neither one may claim compensation because the debts are not of the same kind.
27. D owes C P10,000.00 with G as guarantor. C, on the other hand, owed D, P8,000.00. Both days are
already due but D is insolvent. In this case—
a. C may collect from G P10,000.00.
b. C may collect from G P2,000.00 because a guarantor can set up compensation as regards what the
creditor owes the principal debtor.
c. C may collect nothing from G because D is insolvent.
d. C may collect P8,000.00 from G.
28. On July 1, 2010, D obliged himself to give C a specific car if C will not marry X on or before December
31, 2010. The condition of the obligation is a:
a. positive condition.
b. negative condition.
c. divisible condition.
d. impossible condition.
29. D owes C P5,000.00. T, a third person and without any intention to be reimbursed by D, paid the debt
without the consent of D. C accepted the payment.
a. The payment did not extinguish the debt of D to C because it was made without the consent of D.
b. The payment did not extinguish the debt because it was not made by D himself.
c. The payment is considered valid because it was accepted by the creditor.
d. The payment may be considered valid if T had the intention to be reimbursed.
30. D owes C P6,000.00. No date payment was stipulated by the parties.
a. C cannot require D to pay because there is no date for payment.
b. C can require D to pay at anytime.
c. D is not liable to C because the obligation is void there being no date of payment.
d. D is not required to pay unless C goes to court and asks the court to fix a period of the payment.
31. Which of the following is not considered a conditional obligation?
a. D to pay C P5,000.00 as soon as D has the means.
b. D to pay C P5,000.00 if C marries Y.
c. D to pay C P5,000.00 if C tops the CPA Examinations.
d. D to pay C if X dies of malaria.
32. Legal compensation shall not be proper in three of the following cases. Which is the exception?
a. Commodatum.
b. Civil liability arising from a criminal offense.
c. Gratuitous support.
d. Bank deposit.
33. Cecilia, the owner of a Sari-sari store, purchased several bags of “Dulcita” candy worth P5,000.00
from Olga, an authorized dealer of the product. On due date, Cecilia, who sells the candies at P1.00
each, tendered her payment to Olga consisting of 5,000 pieces of P1.00 coins.
a. Olga may refuse to accept the payment and demand that she be paid in bills.
b. Olga may not refuse to accept the payment because what Cecilia was offering as payment is money
circulated in the Philippines.
c. Cecilia may consign the payment in court if Olga refuses to accept it.
d. The tender made by Cecilia was valid because the P1.00 coins came from her sales and she had plenty
of them.
34. Which of the following does not apply to payment by cession. Which is it?
a. Ownership of the debtor’s properties is transferred to the creditor.
b. The debtor must be insolvent.
c. It affects all the properties of the debtor except those exempt from execution.
d. There are several creditors.
35. Anna Almeda, Belinda Bersola, and Claudia Cabrera executed the following promissory note:
“I promise to pay Dolores Dominguez or order the sum of P30,000.00 on June 30,2010.
(Sgd.) Anna Almeda
(Sgd.) Belinda Bersola
(Sgd.) Claudia Cabrera”
On June 30,2010, Dolores Dominguez can collect from Anna Almeda:
a. P10,000.00
b. P30,000.00
c. P20,000.00
d. Nothing, because the note is void since it says “I promise” but was signed by three persons.
36. An obligation where various prestations are due but the performance of all of them is required in
order to extinguish the obligation is known as:
a. alternative obligation.
b. facultative obligation.
c. conjunctive obligation.
d. simple obligation.
37. D is indebted to C for P20,000.00 which is due on June 10. C owes D P15,000.00 which is due on June
5. On June 8, C assigned his credit rights to T. D gave his consent to the assignment but did not reserve
his right to the compensation. On June 10, how much may T collect from D?
a. P20,000.00
b. P15,000.00
c. P5,000.00
d. Nothing.
38. The following statements pertain to either payment by cession or dacion en pago.
I. The debtor is insolvent
II. Ownership of the thing/s is transferred to the creditor/s.
III. Plurality of creditors is required.
IV. Obligations are totally extinguished as a rule.
a. Statements I and IV pertain to payment by cession.
b. Statements I and III pertain to dacion en pago.
c. Statements II and IV pertain to dacion en pago.
d. Statements III and IV pertain to payment by cession.
39. The return of what has been paid by mistake is known as:
a. solutio indebiti
b. negotiorum gestio
c. quasi-delict
d. natural obligation
40. One of the following obligations is not demandable at once. Which is it?
a. D to give his car to C. No date was fixed by the parties for the date of delivery.
b. D to give his car to C until C completes his course in BS Accountancy.
c. D to give his car to C until X dies.
d. D to give C his car should C enrol in BS Accountancy.
41. Maila made a non-negotiable promissory note with Pia as payee. Pia assigned the note to Aiko, Aiko
assigned the note to Bea, Bea assigned the note to Carmina, Carmina assigned the note to Helen, and
Helen assigned it back to Maila.
a. Maila’s obligation is extinguished by condonation.
b. Maila’s obligation is extinguished by confusion.
c. Maila’s obligation is extinguished by compensation.
d. Maila’s obligation is not extinguished because the note is not negotiable.
42. D promised to give C 10 sacks of rice when X, C’s father, dies. The obligation of D to C is:
a. An obligation with a suspensive condition.
b. An obligation with a resolutory condition.
c. An obligation with a period.
d. A pure obligation.
43. The delivery to the creditor of mercantile documents such as checks shall produce the effect of
payment:
a. upon delivery.
b. when they have been cashed.
c. when through the fault of the debtor they have been impaired.
d. when they are deposited in the bank.
44. Oli Sykes sold 100 bottles of imported “Fundador” brandy to Chris Martin who paid immediately the
price thereof amounting to P20,000.00. Oli promised to deliver the brandy to Chris within one week
from their agreement. On the agreed date of delivery, Oli delivered to Chris 100 bottles of fake
“Fundador” brandy. The contract between Oli and Chris is:
a. voidable.
b. void.
c. valid.
d. rescissible.
45. Which of the following obligations is void?
a. D agreed to hire C as manager of his (D’s) business if C is willing to relocate to Cebu.
b. D agreed to paint the portrait of C if D will enroll in a painting class this coming month.
c. D promised to pay his debt to C amounting to P20,000.00 as soon as possible.
d. D agreed to give a monthly support of P5,000.00 to C until D ends his contract of employment
overseas.
46. One peso, P5.00 and P10.00 coins are legal tender up to:
a. P100.00
b. P500.00
c. P1,000.00
d. any amount.
47. One centavo, P0.05, P0.10 and P0.25 centavo coins are legal tender up to:
a. P100.00
b. P500.00
c. P1,000.00
d. any amount.
48. Three of the following are the characteristics of a condition. Which is the exception?
a. It may or may not happen.
b. It may refer to the future.
c. It merely fixes the time for the efficaciousness of an obligation.
d. It may refer to a past event unknown to the paries.
49. These statements are presented to you:
I. There is no delay in obligations not to do.
II. Delay is applicable only to the debtor, never to the creditor.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statement I is true.
d. Only Statement II is true.
50. The principle of negotiorum gestio does not apply:
a. When the property or business is not neglected or abandoned.
b. When the officious manager has been tacitly authorized by the owner.
c. In both (a) and (b).
d. In neither (a) and (b).
CONTRACTS - SORIANO
1. These statements are presented to you:
I.
Innominate contracts, not having name under the law, are void because no law or rule
governs them.
II.
Facio ut des and Do ut facias are innominate contracts.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both are true.
Both are false.
Only statement I is true.
Only statement II is true.
2. These statements are presented to you:
I.
Human hair may validly be the object of a contract of sale.
II. The donation by a mother of a part of her liver to be transplanted to his son is valid.
In your evaluation of the foregoing statements:
a.
Both statements are true.
b.
Both statements are false.
c.
Only statement I is true.
d.
Only statement II is true.
3. These statements are presented to you:
I.
A sale by auction is enforceable between the seller and the buyer although the
memorandum made by the auctioneer on the sale was not signed by the seller and the
buyer.
II. Contracts that are enforceable under the Statute of Frauds are deemed ratified by the
failure to object to the presentation of oral evidence to prove them.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both statements are true.
Both statements are false.
Only statement I is true.
Only statement II is true.
4. Rescission is different from annulment in that rescission:
a.
Is a principal action
b.
May be availed of only by the parties whether bound principally or subsidiarily.
c.
Is brought to declare the inefficacy inherent in the contract.
d.
Is based on lesion or damage.
5. At the height of the flood, D saw C and his family bringing their personal effects to a higher
ground. He offered his help which was accepted. Thereafter, C gave P500,000 to D who was not
expecting the payment. The contract between D and C is:
a.
Onerous
b.
Remuneratory
c.
Gratuitious
d.
There was no contract at all.
6. Refer to No. 5, The cause is:
a.
b.
c.
d.
The payment of P500,000.
The benefit received by C.
The personal effects of C and his family.
There is no cause because there is no contract between D and C.
7. These statements are presented to you:
I.
There may be more than two parties to a contract.
II.
A party to a contract may be composed of more than one person.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Statement I is true; Statement II is false.
Statement I is false; Statement II is true.
Both statements are true.
Both statements are false.
8. A provision in a promissory note authorizing the creditor to increase, decrease, or otherwise
change from time to time the rate of interest and/or bank charges without advance notice to the
borrower is violative of which principle of contract?
a.
Relativity
b.
Mutuality
c.
Obligatory force
d.
Consensuality
9. It refers to a contract wherein one party imposes a ready-made form of contract, which the
other party may accept or reject, but which the latter cannot modify.
a.
Aleatory contract
b.
Contract of adhesion
c.
Auto-contract
d.
Innominate contract
10. The following contracts are voidable, except a contract:
a.
Between a minor and an insane
b.
Where consent was given by one party while in a state of drunkenness.
c.
Where consent was given by one party while under hypnotic spell.
d.
Where a party was mistaken as to the substance of the thing object of the contract.
11. S, a store owner, sold a gallon of rat poison to B for P1,000.00. Intended to pour the poison in
the fishpond of X, his enemy, to kill all the fish therein. The sale of the rat poison is:
a.
Valid provided B does not pursue his motive to kill the fish in the fishpond of X.
b.
Valid even if B pursues his motive to kill the fish in the fishpond of X.
c.
d.
Void as it is immaterial whether or not B kills the fish in the fishpond of X since B’s motive
is void.
Void if B pursues his motive to kill the fish in the fishpond of X.
12. A contract of pledge is perfected upon:
a.
Meeting of the minds of the parties
b.
Delivery of the object of contract
c.
Execution of the written agreement by the parties
d.
Acknowledgement by the parties of the instrument evidencing the contract before a
notary public.
13. S shipped his goods in the vessel of B. The goods were destined for Cebu. When the vessel
reached Cebu, V hired T who owned a special equipment for the unloading of the cargoes that
included the goods of S. The goods of S, however, fell into the sea while being unloaded because
of the negligence of the operator of the equipment.
a.
S can go after T.
b.
S can only go after V.
c.
S can go after both T and V.
d.
S cannot go after wither T or V.
14. P met an accident and died while on board a taxi owned by Roadmasters Taxicad Company.
Roadmasters has a common carrier insurance policy with ABC Insurance Company for the
payment of indemnity to any fare-paying passenger in case of accident. Which of the following
statements is incorrect?
a.
The heirs of P can claim the indemnity from ABC Insurance for the death of P.
b.
The heirs cannot claim any indemnity because P was not a party to the contract of
insurance between Roadmasters and ABC Insurance.
c.
The provision in the insurance policy for the payment of indemnity is an example of
stipulation pour autrui.
d.
The right of P to claim for indemnity was transmitted to his heirs upon his death.
15. An aleatory contract is one:
a.
The fulfillment of which depends upon a chance.
b.
The parties of which are obliged to perform reciprocal prestations.
c.
Where only one party actually and physically enters into the contract.
d.
Where delivery of the object is required to be made for its perfection.
16. Which of the following contracts is not a void contract?
a.
A contract of sale of an animal suffering from a contagious disease.
b.
A purchase of an illegitimate child by one who is the father of the child.
c.
A contract of insurance whereby the insured asked another to take his place during the
medical examination.
d.
A contract between F, a Filipino and A, an alien, for the purchase of the right kidney of F
for P200,000.00.
17. The following contracts are presented to you.
I.
A contract of sale involving 100 sacks of rice entered into by G, a guardian, in behalf of M,
his ward. The rice was worth P100,000.00 but was sold by G for P85,000.00.
II.
A contract of sale made by D of his only lot to X in order to defraud C, his creditor. X was
not aware of the fraudulent intention of D when he sold the lot to him.
III. A contract of sale made by D to X of jewelry which C is trying to recover in a court case he
filed against D. X was not aware that the jewelry was the subject of litigation between C
and D.
In your evaluation of the foregoing contracts:
a.
b.
c.
d.
Contracts I and II are rescissible.
Contracts I and III are rescissible.
Contracts II and III are rescissible.
None of the above contracts is rescissible.
18. B entered into a contract for the purchase of 5 rolls of cloth worth P20,000 from S. The materials
which were to be used by B in the making of school uniforms were scheduled for delivery within
7 days. On the seventh day, S failed to deliver the cloth despite demands from B. As a result, B
could not meet his commitment to his customers and was threatened with a court suit. S
claimed that M from whom he ordered the cloth under a contract that he (S) and M entered
into, did not finish manufacturing the product as scheduled in accordance with such terms of the
contract. In this case, B may not sue M for damages under the contract between S and M under
which principle of contract?
a.
Principle of Liberality of Contract
b.
Principle of Relativity of Contract
c.
Principle of Consensuality of Contract
d.
Principle of Obligatory Force of Contract
19. D borrowed P50,000,00 from C. The debt, which is payable within one year, is secured by a
mortgage that D constituted on his lot. The mortgage is registered in the Registry of Property. C
dies before the due date of the debt and was not able to collect any amount of his loan
receivable from D. He was survived by S, his only son and heir. D, taking advantage of the
situation, sold the lot to T who was not aware of the mortgage constituted thereon.
a.
The mortgage is not binding on T since he was not aware of it at the time he bought the
lot.
b.
S, the son of C, has the right to collect the amount of the note from D, and foreclose the
mortgage if D cannot pay.
c.
The mortgage is not binding on T since D was in bad faith when he sold the lot to T.
d.
The right to collect that loan was extinguished upon the death of C.
20. The following statements are presented to you:
I.
The illegality of the motive of the party to a contract renders the contract void.
II.
The motive of one party to a contract is always known by the other party.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both are true.
Both are false.
Only I is true.
Only II is true.
21. The following contracts are presented to you:
I.
Pledge
II.
Commodatum
III.
Sale
IV.
Donation of an immovable.
The real contracts among the four contracts enumerated are:
a.
b.
c.
d.
I and II.
II and III.
I and III.
II and IV.
22.
a.
b.
c.
d.
One of the following is not incapable of giving consent:
Insane persons.
Deaf-mutes who do not know how to write.
Deaf-mutes who know how to read.
Unemancipated minors.
23.
a.
b.
c.
d.
A contract entered into by an incapacitated person is:
Void.
Voidable.
Rescissible.
Unenforceable.
24.
a.
b.
c.
d.
Contracts entered into in a state of drunkenness or during hypnotic spell are:
Valid.
Voidable.
Rescissible.
Void.
25.
a.
b.
c.
d.
A contract entered into by an insane person during a lucid interval is:
Valid.
Voidable.
Rescissible.
Void.
26.
a.
b.
c.
d.
Aside from fraud and undue influence, the following are the vices of consent, except:
Violence.
Intimidation.
Mistake
Dealer’s talk.
27. Mistake in three of the following will make a contract voidable. Which one will not?
a. Mistake as to the substance of the thing which is the object of the contract.
b. Mistake as to the principal conditions which principally moved one or both parties to enter in to
the contract.
c. Mistake as to the identity or qualifications of one of the parties, which identity or qualifications
have been the principal cause of the contract.
d. Simple mistake of account.
28.
a.
b.
c.
d.
It involved the employment of serious or irresistible force to obtain consent.
Intimidation.
Threat.
Violence.
Moral coercion.
29. It is present when one of the contracting parties is compelled by a reasonable and wellgrounded fear of an imminent and grave evil upon his person or property, or upon the person or
property of his spouse, descendants, and ascendants, to give his consent.
a. Violence.
b. Physical coercion.
c. Intimidation.
d. Mistake.
30. One of the following contracts is not vitiated by intimidation or violence, and hence valid.
a. A contract of sale which was signed by a party because his arm was being twisted by a third
person.
b. A contract of sale which was entered into because the other party was pointing a gun at his wife.
c. A contract where a party was compelled to assign his property to the other to pay a just debt
because the latter threatened to sue him in court if he does not pay his debt.
d. A contract of donation of a parcel of land which a party signed because the other party
threatened to burn his house.
31. It exists when a person takes improper advantage of his power over the will of another depriving
the latter of a reasonable freedom of choice.
a. Intimidation
b. Duress
c. Threat
d. Undue influence
32. Fraud exists in three of the following. Which is the exception?
a. When through the insidious words or machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he would not have agreed to.
b. When there is a failure to disclose facts, when there is a duty to reveal them, as when the parties
are bound by the confidential relations.
c. When there is an expression of an opinion by an expert which turned out to be wrong, and the
other party relied upon such expert knowledge.
d. When the misrepresentation refers to the usual exaggerations in trade, and the other party had
an opportunity to know the facts.
33. Abulencia, who knew that his ring was embellished with glass, told Banzon that the
embellishment was emerald. Banzon, who knew that his watch was gold-plated, told Abulencia
that it was made of pure gold. Banzon, believing that Abuencia’s ring was embellished with
emerald, and Abulencia, believing that Banzon’s watch was made of pure gold, then entered into
a contract whereby they exchanged their respective articles. A week later, Banzon discovered
that the ring was adorned only with an ordinary glass.
a. The contract may be annulled at the instance of Banzon since he discovered the fraud.
b. The contract may be annulled at the instance of Abulencia since Banzon also employed fraud.
c. The contract is void because of the bad faith of both parties; hence, it shall not produce any
effect.
d. Neither party may ask for annulment since both are guilty of fraud. The contract, therefore, is
valid.
34.
a.
b.
c.
d.
An absolutely simulated contract is:
Void.
Voidable.
Valid.
Unenforceable.
35. One of the following statements does not pertain to a relatively simulated contract.
a. The parties conceal their real agreement.
b. The parties are bound by their real agreement provided it does not prejudice third persons.
c. The parties are bound by their real agreement provided it is not contrary to law, morals, third
persons, public order or public policy.
d. The parties do not intend to be bound at all.
36. Servando and Bernardo entered into a contract where they made it appear that Servando was
mortgaging his lot and building to Bernardo to secure a contract of loan. The truth, however, was
that Servando was selling his lot and building to Bernardo. Which of the following statements is
true?
a. The parties are bound by the contract of sale.
b. The parties are bound by the contract of loan and mortgage.
c. The parties are not bound at all.
d. The parties are bound by the contract of sale only when third persons are affected.
37.
a.
b.
c.
d.
38.
a.
b.
c.
d.
One of the following is not a requisite of the object of a contract.
It must be within the commerce of men.
If it is a right, it must be intransmissible.
It must not be contrary to law, morals, good customs, public order or public policy.
It must be determinate as to its kind or capable of being made determinate without the need of
the parties entering into a new agreement.
S and B orally entered into a contract whereby S sold his one-year production of eggs in his
poultry farm to B for P50,000.00 which amount B immediately gave in cash to S. The contract
between S and B is:
Void because the object was not existing at the time of the execution of the contract.
Valid because future things may be the object of contracts.
Rescissible because B will likely suffer damage if the eggs do not come into existence.
Unenforceable because the contract was not in writing.
39. A died leaving properties estimated at P1,000,000.00 to his sons, S and T. Subsequently, S sold
one-half of his inheritance to X for P300,000.00, although his share was still to be delivered.
a. The contract is valid since the inheritance is an existing inheritance.
b. The contract is void because what S sold is future inheritance which may not be the object of
contract as a rule.
c. The contract is rescissible.
d. The contract is unenforceable.
40.
a.
b.
c.
d.
A contract whose cause is the promise of a thing or service by the other party is:
An onerous contract
A gratuitous contract
A lucrative contract
A remuneratory contract
41.
a.
b.
c.
d.
A contract whose cause is the liberality of the benefactor is:
A gratuitous contract or contract of pure beneficence.
A remuneratory contract.
An aleatory contract.
An onerous contract.
42. S sold his only car for P100,000.00 to B. Unknown to S, B bought the car from him so that he
could use the same in a bank robbery. What is the status of the sale of the car by S to B?
a. The sale is void because the motive of B is illegal.
b. The sale is valid because the illegality of the motive of the parties to the contract does not have
any effect on its validity.
c. The sale is voidable because of the failure of B to disclose his motive to S.
d. The sale is rescissible at the instance of S because he would be damaged bythe illegal motive of
B.
43.
a.
b.
c.
d.
One of the following is not a requisite of cause in a contract. Which is it?
It must exist.
It must be lawful.
It must not be false.
It must not be clearly stated in the contract.
44. If the illegal contract between the parties is a criminal offense but only one party is guilty, such
illegal contract shall produce the following effects, except:
a. The guilty party will be criminally prosecuted.
b. Neither party may compel the other to comply with his undertaking.
c. The instrument shall be confiscated in favor of the government.
d. The innocent party cannot recover what he has given.
45. If the contract is illegal but it does not constitute a criminal offense and only one party is guilty,
such illegal contract shall produce the following effects, except:
a. The guilty party cannot recover what he has given.
b. The guilty party cannot ask for the fulfilment of what has been promised him.
c. The innocent party cannot be compelled to comply with his promise.
d. The innocent party cannot demand the return of what he has given.
46. The following contracts are required to appear in a public document for the convenience of the
parties so that they may be registered in the proper recording office, except:
a. Contracts which have for their object the creation of real rights over immovable property.
b. The acceptance of an inheritance.
c. The power to administer property.
d. The cession of actions or rights proceeding from an act appearing in a public document.
47.
a.
b.
c.
Reformation of instruments has the following requisites, except:
There must be a meeting of minds of the parties to the contract.
The true intention of the parties dis not expressed in the instrument.
The failure of the instrument to express the true intention of the parties is due to mistake, fraud,
inequitable conduct or accident.
d. The contract must be in a public instrument.
48. Reformation of an instrument is available in the following cases, except:
a. When a mutual mistake of the parties causes the failure of the instrument to disclose their
agreement.
b. When one party was mistaken and the other party acted fraudulently or inequitably in such a
way that the instrument does not show their true intention.
c. When a party was mistaken and the other knew or believed that the instrument did not state
their real agreement.
d. When one of the parties has brought an action to enforce the contract.
49.
a.
b.
c.
d.
50.
a.
b.
c.
Reformation is not available in the following cases, except:
Simple donation inter vivos wherein no condition is imposed.
Wills.
When the real agreement is void.
When through the ignorance, lack of skill, negligence or bad faith on the part of the person
drafting the instrument or of the clerk, or typist, the instrument does not express the intention
of the parties.
As a rule, a contract of sale is perfected:
Upon compliance with the requirements of the law as to form.
Upon delivery of the object of the contract.
Upon the meeting of the minds on the thing which is the object of the contract and upon the
price.
d. Upon demand
PARTNERSHIP - SORIANO
1. One of the following is not a characteristic of contract of partnership.
a. Real, in that the partners must deliver their contributions in order for the partnership contract to be
perfected.
b. Principal, because it can stand by itself.
c. Preparatory, because it is a means by which other contracts will be entered into.
d. Onerous, because the parties contribute money, property or industry to a common fund
2. The minimum capital in money or property except when immovable property or real rights thereto are
contributed, that will require the contract of partnership to be in a public instrument and be registered
with the Securities and Exchange Commission (SEC).
a. P5,000.00
b. P10,000.00
c. P3,000.00
d. P30,000.00
3. If the partnership has the minimum capital mentioned in no. 2 but the contract is not in a public
instrument or the same is not recorded with the SEC, the partnership:
a. is void.
b. is voidable.
c. does not acquire juridical personality.
d. still acquires juridical personality.
4. Three of the following partnership contracts are void. Which one is not?
a. A universal partnership of all present property between husband and wife.
b. A universal partnership of profits between a man and a woman living together as husband and wife
without the benefit of marriage.
c. A particular partnership between husband and wife.
d. A universal partnership of profits between a private individual and a public officer.
5. Which of the following losses will not cause the dissolution of a partnership?
a. Loss before delivery of a specific thing which a partner has promised to contribute to the partnership.
b. Loss of a specific thing after its delivery to and acquisition of its ownership by the partnership from the
partner who contributed the same.
b. Loss after delivery of a specific thing where the partner contributed only its use and enjoyment, he
having reserved the ownership thereof.
d. Loss before delivery of a specific thing where the partner has promised to contribute only its use and
enjoyment, reserving the ownership thereof.
6. The partnership will bear the risk of the loss of three of the following things. Which is the exception?
a. Things contributed to be sold.
b. Fungible things or those that cannot be kept without deteriorating.
c. Things contributed so that only their use and fruits will be for the common benefit.
d. Things brought and appraised in the inventory.
7. Benito, Ignacio, Gregorio, Artemio and Servando are partners in BIGAS Company which is engaged in
the buying and selling of rice. Benito is the manager. Ignacio was also given a special power of attorney
by the partnership to buy a van for the company. No other power was given to all the partners. In which
of the following acts or contracts is the partnership not bound by the act of the partner?
a. Ignacio buying rice for the partnership from Teodoro who has no knowledge of Ignacio’s lack of
authority.
b. Ignacio buying a van for the partnership from Teresa.
c. Gregorio buying a van for the partnership from Thelma who has no knowledge of Gregorio’s lack of
authority.
d. Benito selling rice for the partnership.
8. Which of the following statements is incorrect?
a. Partnership creditors are preferred as to partnership assets.
b. Partnership creditors are preferred as to each partner’s separate assets.
c. A partner’s separate creditors are preferred as to the partner’s separate assets.
d. A partner’s separate creditors may attach a partner’s share in the partnership’s assets.
9. The change in the relation of the partners cause by any ceasing to be associated in the carrying on the
business is known as
a. termination of the partnership
b. winding up of partnership affairs
c. liquidation of the partnership business
d. dissolution of the partnership
10. 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.
11. When is the partnership not bound by the act/s of a partner after dissolution in the following cases?
a. Acts necessary to wind up partnership affairs.
b. Acts to complete transactions begun before dissolution.
c. New transactions where the third person is a previous creditor and there was a publication of the
dissolution in a newspaper of general circulation in the place or places where the business has been
carried on but such third person has not read it.
d. New transactions where the third person is a new creditor and there was a publication of the
dissolution in a newspaper of general circulation in the place or places where the business has been
carried on but such creditor has not read it.
12. What is the order of payment of liabilities of a dissolved general partnership using the code number
representing each liability?
I. Those owing to partners other than for capital or for profits.
II. Those owing to creditors other than partners.
III. Those owing to partners in respect of profits.
IV. Those owing to partners in respect of capital.
a. I, II, III, IV
b. II, I, IV, III
c. II, I, III, IV
d. I, II, IV, III
13. In a limited partnership where there are 4 partners:
a. All the partners must be a limited partner.
b. The number of limited partner must be equal to the number of general partner, that is, 2:2.
c. The number of limited partners must be greater than the number of general partners, that is, 3:1.
d. It is enough that there is one limited partner, the rest may all be general partners.
14. A limited partner shall be liable as general partner in three of the following cases. Which one is the
exception?
a. When he is a general-limited partner as stated in the certificate.
b. When he takes part in the control of the business.
c. When he participates in the management of the business.
d. When his surname which appears in the partnership name is also the surname of a general partner.
15. A person admitted to all the rights of a limited partner who has died or has assigned his interest in
the partnership is shown as:
a. An ostensible partner.
b. A liquidating partner.
c. A substituted-limited partner.
d. A general-limited partner.
16. If the assignee does not become the partner referred to in the preceding number, his rights do not
include:
a. The receipt of the assignor’s share in 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 the partnership books or account of partnership transactions.
17. 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.
18. One of the distinctions between a partnership and a corporation is that a partnership:
a. May be formed by one person.
b. Is created by operation of law.
c. Acts through a board of directors.
d. May exist for an indefinite period.
19. Which of the following will not cause the automatic dissolution of a general partnership?
a. Death of a capitalist partner.
b. Insolvency of a capitalist partner.
c. Insanity of an industrial partner.
d. Civil interdiction of an industrial partner.
20. John Solanda and Sons is a partnership composed of three partners, namely: Robert Solanda, Simon
Solanda and Theodore Solanda. The partners are the sons of John Solanda who has retired from business
but who suggested that they include his name in the firm to give them an advantage since he is wellknown in business community.
I. John Solanda shall have all the rights of a general partner.
II. John Solanda shall have all the liabilities of a general partner.
Based on the foregoing facts:
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.
21. Bettina, Erlinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY Enterprises, a dealer in
cosmetics and other beauty products, with contributions of P60,000.00, P50,000.00, P40,000.00,
P30,000.00, P20,000.00 and P10,000.00 respectively. No one was appointed as manager in the articles of
partnership.
a. Bettina 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 the partners are agents or managers of the partnership and any one of them may perform acts of
administration
22. PATOK Enterprises, a partnership engaged in the business of renting out video films, is owned by
Patricia, Alice, Tina, Olga and Kaye as the manager. Diana owes PATOK Enterprises P6,000.00 and Olga,
P4,000.00. Both debts are unsecured and are already due. Diana pays Olga P4,000.00 for which Olga
issues her own receipt.
a. The payment should be applied to Olga’s credit only.
b. The payment should be applied to PATOK’s credit only.
c. The payment should be divided proportionately between PATOK and Olga, at P2,400.00 and P1,600.00
respectively.
d. The payment should be divided equally between PATOK and Olga at P2,000.00 each.
23. GREAT Company, a partnership engaged in the distribution of generators, is composed of George,
Roland, Edmond, Albert and Troy. 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 sale of the generator by Roland to Juan Torres who was not aware that Roland had no
authority. Juan Torres has paid the generator which is due for delivery.
II. The purchase of a car by Edmond from Intrepid Motors whose owner was not aware of
Edmond’s lack of authority. The car and the price are due for delivery and payment, respectively.
Based on the foregoing, the partnership is bound by:
a. Transaction I only.
b. Transaction II only.
c. Both transactions I and II.
d. Neither transaction I nor II.
24. MARK Company, is a partnership engaged in the trading business, with Marquez, Alconcer, Ramos
and Kanapi as partners. Marquez, Alconcer and Ramos are capitalist partners, contributing P100,000.00,
P60,000.00 and P40,000.00 respectively. Kanapi is an industrial partner. The partners have a stipulation
that Marquez shall not be liable for partnership liabilities. After three years of continued losses, the
partnership incurred liabilities of P200,000.00 at which time its assets had dwindled to P140,000.00.
After partnership assets have been exhausted, partnership creditors may go after the separate assets of:
a. all the partners.
b. Marquez, Alconcer and Ramos, but not those of Kanapi.
c. Alconcer, Ramos and Kanapi, but not those of Marquez.
d. Alconcer and Ramos only.
25. LIFE Company, 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 delivery truck beyond the
speed limit in order to serve its customers, when he rammed into and caused extensive damage on the
parked car of Tertullo.
a. Only Larredo can be held liable for damages of Tertullo.
b. LIFE Company and Larredo are solidarili liable for damages to Tertullo.
c. LIFE Company and the four partners are solidarily liable for damages to Tertullo.
d. LIFE Company and the four partners are jointly liable for damages to Tertullo.
26. A person admitted as a partner into an existing partnership shall be liable up to the extent of his
separate assets for what obligations?
a. Obligations of the partners existing at the time of his admission only if there was a stipulation.
b. Obligations of the partnership incurred after his admission only if there was a stipulation.
c. Obligations of the partnership incurred before and after his admission even if there was no 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.
27. Aseron, the managing partner of ACE Company, was driving the delivery truck of the firm when he
rammed it into an electric post resulting in damages to the vehicle amounting to P50,000.00. To make up
for accident, Aseron worked long hours for the firm and was able to increase its sales from
P5,000,000.00 to P15,000,000.00.
a. Aseron will no longer be liable for damages to ACE 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 will be equitably reduced 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 also
liable for him for the extraordinary efforts he exerted to increase its sales.
d. Aseron and ACE will share equally in the damages of P50,000.00.
28. Trevor owes P3,000.00 to CHAMP Company, a partnership composed of Charles, Harry, Albert, Mark
and Prince, with Mark as the manager who is authorized to collect all credits of the firm. He also owes
Charles the amount of P6,000.00. Both debts are already due. Trevor gives P3,000.00 to Charles in
payment of his debt to the latter. Charles thus issues his own receipt.
a. Payment will be applied proportionately to the two credits at P1,000.00 for Charles’ credit and
P2,000.00 for CHAMP’s credit.
b. Payment will be applied equally to the two credits.
c. Payment will be applied in its entirety to Charles’ credit.
d. Payment will be applied in its entirety to CHAMP’s credit.
29. Doang and Depante have been partners for more than 5 years in the purified water business. At the
start of the sixth year, Doang assigned his interest in the partnership to Trinidad, but Depante objected
on the ground that he did not want Trinidad to be his partner.
a. Trinidad automatically became a partner of Depante when Doang conveyed his interest to him.
b. Doang and Depante continue to be partners despite Doang’s conveyance of his interest to Trinidad.
c. The partnership between Doang and Depante was automatically dissolved when Doang conveyed his
interest to Trinidad.
d. The conveyance of Doang of his interest in the partnership to Trinidad entitled the latter to inspect the
books, and participate in the management, of the partnership.
30. Querubin, Roces and Solis are partners in a law firm. Querubin was appointed as judge of the
Regional Trial Court. Such appointment:
a. Suspends the participation of Querubin in the management of the firm without causing the
dissolution of the partnership.
b. Prohibits the inclusion of the name Querubin in the firm name without dissolving the partnership.
c. Results in the dissolution of the partnership.
d. merely requires the disclosure of Querubin’s appointment to the court without dissolving the
partnership.
31. Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00;
Ortiz, office equipment; and Nevado, his services. If the three were to form a limited partnership, who
among them will be limited partner/s?
a. Either Braganza or Ortiz or both of them.
b. Either Ortiz or Nevado or both of them.
c. Either Braganza or Nevado or both of them.
d. All the three must be limited partners.
32. Refer to the preceding number. Assume that the three decide to from a general partnership. As a
result, which of the following is incorrect?
a. Any of the three may be appointed as manager.
b. All of them may be appointed as managers.
c. Only Nevado may be appointed as a manager because he only contribute his services.
d. Any two of them may be appointed as managers.
33. CROWN Enterprises is composed of partners Chuck who contributed P50,000.00; Ranier, P20,000.00;
Oscar, P40,000.00; Waldorf, P10,000.00; and Nelson, P5,000.00. No one was appointed as manager. Two
proposed contracts were voted upon by the partners during a meeting which took place as follows:
Contract I – Voting for approval of the contract were Chuck and Ranier; voting for rejection were
Oscar, Waldorf and Nelson.
Contract II – Voting for approval were Chuck and Ranier; voting for rejection were Oscar and
Waldorf; Nelson abstained.
Which of the following contracts are considered approved?
a. Both contracts.
b. Neither of two contracts.
c. Contract I only.
d. Contract II only.
34. MACK’s Restaurant is a partnership composed of Manalo, Alferez, Cancio and Kilayco, with Manalo as
the manager whose contribution is 80% of the firm’s capital. Manalo made Ongpauco his associate by
assigning one-half of his share in the firm to the latter. Did Ongpauco become a partner in the firm?
a. Yes, because Manalo is the manager.
b. No, because the other partners must give their consent in order that Ongpauco may be admitted in
the partnership.
c. Yes, because the assignment by Manalo of his share in the firm did not affect his ownership of the
controlling interest.
d. No, because the assignment by Manalo of his share in the firm diminished his interest in the
partnership.
35. A partner is a co-owner with his partners of specific partnership property. Such co-ownership:
a. allows a partner to assign his right in such a property.
b. allows a partner to use such property for partnership purposes.
c. entitles the spouse, children and other relatives of the partner to claim support from such property.
d. gives the private creditors of a partner to attach his right in such property.
36. SUMMER Laundry Services Company is a partnership composed of Ashton, Michael, Calum, Luke and
James. Without the knowledge of other partners, Ashton used a coat brought to the shop by a customer
for dry-cleaning in a party he attended. The coat was accidentally stained with food sauce during the said
party. Who will be liable to the customer for damages?
a. Ashton only since he used the coat without the knowledge of the other partners.
b. SUMMER Laundry Services Company and Ashton solidarily.
c. SUMMER Laundry Services Company and all the partners jointly.
d. SUMMER Laundry Services Company and all the partners solidarily.
37. A limited partner is prohibited on account of his claim against the partnership from performing the
following acts, except:
a. To receive or hold as collateral security any partnership property.
b. To receive from a general partner or the partnership any payment, conveyance or release from
liability, if partnership assets are not sufficient to discharge partnership liabilities to outside creditors.
c. Transact business with partnership.
d. None of the foregoing.
38. Louis, a limited partner in JUANDEE Company, Ltd., received the amount of P100,000.00 representing
his contribution which was being returned on the date stipulated in the certificate. Partnership records,
however, showed that the firm had liabilities of P220,000.00 which arose before Louis received the
return of his contribution, and assets of only P90,000.00 after such return of contribution.
a. Louis is bound to bring back to the partnership the amount of P100,000.00 plus interest thereon.
b. Louis is bound to give the partnership P220,000.00 plus interest thereon.
c. Louis is bound to give the partnership P130,000.00 plus interest.
d. Louis is not bound to return to the partnership any amount because he received the return of his
contribution pursuant to a contractual stipulation.
39. Barranda wrote Salvador a letter wherein he placed an order for a laptop computer worth
P80,000.00. In writing the letter, Barranda used a stationary which had for its letterhead “Barranda and
Bermudez, Real Estate Agents.” Bermudez is not really a partner of Barranda but they agreed to use the
said letterhead to give a semblance of bigness by making it appear that the two of them are partners.
Salvador delivered the laptop computer but Barranda defaulted in his payment of its price. Against
whom may Salvador proceed?
a. Barranda only since Bermudez is not his partner.
b. Barranda only since the purchase of the laptop computer is his personal transaction.
c. Barranda and Bermudez since they are partners in so far as Salvador is concerned.
d. “Barranda and Bermudez, Real Estate Brokers,” inly since an actual partnership was created between
Barranda and Bermudez and it has a personality separate and distinct from the two.
40. PARAGON Enterprises, a partnership engaged in garments manufacturing business, is composed of
partners Pacis, Ramas and Gonzales. During the year, PARAGON bought a computerized embroidering
machine amounting to P300,000.00 from Tadena with the following stipulation: down payment of
P50,000; balance to be paid in amount equal to 20% of the monthly net profits of PARAGON until the full
amount is paid.
a. Tadena is an actual partner of Pacis, Ramas and Gonzales during the same time that he receives as
share of profits of PARAGON as payment for the purchase price of the machine.
b. Tadena is only a partner by estoppel of Pacis, Ramas and Gonzales during the time that he receives a
share of the profits of PARAGON as payment of the purchase price of the machine
c. Tadena is not a partner of Pacis, Ramas and Gonzales whether before or after he has received the full
payment of the purchase price of the machine from PARAGON.
d. Tadena is a nominal partner of Pacis, Ramas and Gonzales during the time that he receives a share of
the profits of PARAGON as payment of the purchase price of the machine.
41. 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
P4,000.00 which is due on December 10. She also owes MAGIC Company P6,000.00 which is due on
December 20. On December 15, Theresa tendered payment in the amount of P4,000.00 to Martha in
payment if her debt to the latter. Martha issued her own receipt acknowledging the payment.
a. The payment will be applied proportionately to the credits of MAGIC and Martha in the amount of
P1,600.00 and P2,400.00 respectively.
b. The payment will be applied in its entirety to Martha’s credit.
c. The payment will be applied in its entirety to MAGIC’s credit.
d. The payment will be applied equally to the two debts of Theresa.
42. Ornussa, the owner of a vacant lot, leased the same to Florida under an agreement that the rental
shall be paid by Florida at the rate of 10% of the annual net income of the flower business that she
would put up on the lot. A private agreement was signed by the parties. In the first year of operations,
Ornussa received from Florida the amount of P20,000.00 representing 10% of the net income of the
flower shop business.
a. Ornussa is a partner of Florida by her mere receipt of the share in the net profits of the flower
business of Florida.
b. The relationship of Ornussa and Florida is only that of a lessor and a lessee.
c. Ornussa and Florida have a dual contract: partnership and lease.
d. Ornussa and Florida are not partners; neither are they lessor and lessee because their agreement was
not in a public instrument.
43. Which of the following statements concerning the name of a partnership is false?
a. The partnership name may include the name of only one of the partners.
b. The partnership name may include the names of two or more, but not all of the partners.
c. The partnership name may include the name of all the partners.
d. The partnership cannot adopt a name which does not include the name at least one of the partners.
44. Donna, Emma, Alma and Rona are partners in DEAR Company with Donna as manager. Tricia owes
DEAR Company P5,500.00 and Donna, in Donna’s personal capacity, P4,500.00. Tricia’s debt to Donna is
secured by a pledge of her diamond ring. Both debts are already due. Tricia pays P4,500.00 to Donna and
tells her that the same is in payment of her debt to Donna. Donna, thus, issues her personal receipt.
a. The payment of P4,500.00 will be applied proportionately to the two credits: to the partnership credit
at P2,475.00; to Donna’s credit at P2,025.00. This is so because Donna should not place her interest
before that of DEAR Company.
b. The payment of P4,500.00 will be applied entirely to Donna’s credit.
c. The payment will be applied in partial payment of the partnership credit of P5,500.00; hence, there
will be a balance of P1,000.00
d. Tricia, Donna and DEAR Company will have to agree as to which the credit the payment shall apply.
45. Federico, Alberto, Sofronio and Teodoro are partners in FAST Motorcars Company, a dealer of car
spare parts. Federico, Alberto and Sofronio invested P500,000.00, P200,000.00 and P300,000.00,
respectively. Teodoro is an industrial partner who manages the partnership. The partners have stipulated
that Federico shall be exempt from liability to third persons. At the end of three years, the assets of the
partnership have dwindled to P220,000.00 while its liability to third persons have a balance of
P340,000.00. How much ultimately will be the share of each partner after payment to third persons and
the settlement among partners?
a. P30,000.00 for each partner.
b. Federico, P60,000.00; Alberto, P24,000.00; Sofronio P72,000.00; and Teodoro, none.
c. Federico, none; Alberto, P48,000.00; Sofronio P72,000.00; and Teodoro, none.
d. . Federico, none; Alberto, Sofronio and Teodoro P40,000.00 each.
46. The following partnership contracts were presented to you for evaluation:
I. A partnership engaged in the sale of office supplies with a capital of P100,000.00 broken down
into: cash, P30,000.00; office supplies for sale, P50,000.00 and office equipment, P20,000.00.
The
agreement is in a private instrument.
II. The partnership engaged in the lease of office spaces with a capital of P700,000.00 broken
down into: land, P100,000.00; building, P500,000.00; cash, P80,000.00; and office equipment,
P20,000.00. The agreement is in a public instrument attached to which is the inventory of the
land
and the building signed by the partners. The instrument is not recorded with the Securities and
Exchange Commission.
III. A partnership engaged in the trading of computers whose name is “Lamont Enterprises, Ltd.”
It has a total capital of P500,000.00 broken down into P100,000.00 cash and computers worth
P400,000.00, contributed by both general and limited partners. The agreement was subscribed
and sworn to by all the partners before a notary public but not recorded with the Securities and
Exchange Commission.
Based on the foregoing:
a. Each partnership has a separate juridical personality.
b. I and II have separate juridical personality.
c. II and III have separate juridical personality.
d. None of the partnerships has a separate juridical personality.
47. Belinda, Ara, Rica and Klaudia are partners in BARK Enterprises, a pet shop, with Belinda contributing
P50,000.00; Ara, P20,000.00; and Rica, P30,000.00. Klaudia is an industrial partner and manages the
partnership. Based on the foregoing information, which of the following statements is false?
a. Belinda may engage in the buying and selling of rice without the consent of other partners.
b. Klaudia may engage in the buying and selling of rice without the consent of other partners.
c. Klaudia is not liable for the losses of the partnership.
d. Klaudia may be held liable by third persons for partnership debts with her separate property.
48. Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company, Ltd. Josephine, Ellen and
Wilma are general partners, Edith is a general-limited partner, while Lydia is a limited partner. Based on
the foregoing information, which of the following statements is false?
a. Josephine, Ellen and Wilma may be held liable with their separate property after the exhaustion of
partnership assets.
b. Edith may participate in the management of the partnership.
c. Edith may not be held liable with her separate property for partnership debts after the exhaustion of
partnership assets.
d. Lydia may not be held liable with her separate property for partnership debts after the exhaustion of
partnership assets.
49. 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.
50. The partnership is not bound in three of the following acts of a partner after dissolution. However, it
is bound in one. Which is it?
a. Where the partner acting is insolvent.
b. When it is unlawful to carry on its business.
c. When the partner has no authority to wind up partnership affairs and the third person is a previous
creditor who had no knowledge of the partner’s lack of authority.
d. When a partner has no authority to wind up partnership affairs and the third person is a new creditor
who has not read the publication of the lack of authority of the partner in a newspaper of general
circulation in the place or places where the partnership is carried on.
CORPORATION - SORIANO
1. Which of the following corporation is required by the Corporation Code to have its
number of directors in multiples of 5, i.e. 5, 10, 15?
a. A stock educational corporation.
b. A non-stock educational corporation.
c. A corporation sole.
d. A religious society.
2. A, B, C, D and E are all Certified Public Accountants. They want to practice their
profession under one company. What kind of business organization may they establish
for such purpose?
a. Partnership only.
b. Corporation only.
c. Either a partnership or a corporation under their option.
d. Neither a partnership nor a corporation.
3. A, B, C, D and E are all licensed mechanical engineers. They want to put up a business for
the purpose of importing industrial machineries. What kind of business organization may
they put up for such purpose?
a.
b.
c.
d.
Partnership only.
Corporation only.
Either a partnership or a corporation under their option.
Neither a partnership nor a corporation.
4. A is a Certified Public Accountant, B is a lawyer; while C is a mechanical engineer. They
want to put up a business for the purpose of exporting dried fish. What kind of business
organization may the three of them establish for such purpose?
a. Partnership only.
b. Corporation only.
c. Either a partnership or a corporation.
d. Neither a partnership nor a corporation because they belong to different
professions.
5. In which of the following instances is a foreign corporation not engaged in business in
the Philippines?
a. Opening a liaison office in the Philippines.
b. Participating in the management of a domestic business in the Philippines.
c. Having a nominee director to represent its interests in a domestic corporation.
d. Appointing a distributor who is domiciled in the Philippines.
6. These statements are presented to you:
I.
The members of board of directors of a corporation may provide for themselves
compensation other than per diems.
II.
A director who receives compensation as such may also be given separate
compensation if the serves the corporation in another capacity like the president
who is required to be a director.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both statements are true.
Both statements are false.
Only Statement I is true.
Only Statement II is true.
7. These statements are presented to you:
I.
The Existing of interlocking incorporators, directors and officers is sufficient to
justify piercing of the veil of corporate fiction.
II.
Substantial identify of incorporators of directors of corporations necessarily
implies fraud.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both statements are true.
Both statements are false.
Only Statement I is true.
Only Statement II is true.
8. These statements are presented to you:
I.
The sale, lease, exchange, mortgage, pledge or other disposition of all or
substantially all of corporate property requires the vote of a majority of the
board of directors or trustees, and 2/3 of the outstanding capital stock or 2/3 of
the members.
II.
The board of directors or trustees may abandon the sale or other disposition of
all or substantially all of the corporate property without further approval from
the stockholders r members.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
c. Only Statement I is true.
d. Only Statement II is true.
9. Who may vote the shares without the need of any written proxy?
a.
b.
c.
d.
The pledgee of shares of stock.
The mortgagee of shares of stock.
The executor of an estate which owns the shares of stock.
The stakeholder who transferred his shares in a voting trust agreement.
10. S and ABC Corporation entered into a “Deed of Sale of Shares of Stock” for the
acquisition by S of 1,000 of the unissued shares of the latter at P100.00 par value per
share. S was to give a down payment of 50% with the balance to be paid after 30 days.
What kind of contract was entered into between S and ABC Corporation?
a. Contract of sale
b. Contract of purchase
c. Contract of subscription
d. Some other contract.
11. S, a stockholder of ABC Corporation, visited the corporate office and demanded the
inspection of the books of accounts of the company. D, the director who was in charge
of such books, refused to allow S to inspect them on the ground that six months earlier,
S used some financial data that he obtained from XYZ Corporation to the detriment of
the latter. Was the refusal of D justified?
a. No, because the data that S improperly used were taken from another
corporation.
b. Yes, because such improper use of data, although pertaining to another
corporation, is a legal ground to deny a stockholder the exercise of his right to
inspect the corporate books.
c. No, because such refusal is a violation of a stockholder’s right to inspect
corporate books.
d. No, because such ground can be used only against S if he were to inspect the
books of XYZ Corporation.
12. These equations are presented to you:
I.
A+B=A
II.
A+B=X
What do the above equations represent?
a.
b.
c.
d.
I, merger, II, consolidation.
I, consolidation, II, merger.
Both equations represent merger.
Both equations represent consolidation.
13. A stockholder is entitled to the payment of the fair value of his shares when he dissents
from certain corporate acts. Such fair value shall be the fair value of the shares as of the
day
a. on which the vote was taken, excluding any appreciation or depreciation in
anticipation of such corporate action.
b. prior to the date on which the vote was taken, excluding any appreciation or
depreciation in anticipation of such corporate action.
c. on which the vote was taken, including any appreciation or depreciation in
anticipation of such corporate action.
d. prior to the date on which the vote was taken, including any appreciation or
depreciation in anticipation of such corporate action.
14. Green Livelihood Projects, Inc. is a non-stock non-profit corporation whose article of
corporation provide for 9 trustees with staggered terms. The trustees first elected and
their respective of office are: Afable, Bernabe and Calimag, 3 years; Dayag, Estacio and
Formeloza, 2 years; and Gesmundo, Hilacan and Ibero, 1 year. After one year, Jalmasco,
Kintanar and Lopez were elected to replace Gesmundo, Hilacan and Ibero whose terms
expired. What is the term of office of Jalmasco, Kintanar and Lopez?
a. One year
b. Two years
c. Three years
d. Four years
15. Refer to the preceding number. Assume that Afable resigned after one year and three
months in office and Modena was elected to replace him. What is the term of office of
Modena?
a. One year
b. One year and nine months
c. One year and three months
d. Three years.
16. These statements concerning the number of trustees of a non-stock corporation at the
time of its incorporation are presented to you:
I.
The number of trustees may be more than 15.
II.
The number of trustees may be less than 5.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both I and II are correct.
Both I and II are incorrect.
I is correct. II is incorrect.
I is incorrect. II is correct.
17. These statements are presented to you:
I.
Under the Corporation Code, a close corporation is one whose members belong
to the same family. In other words, it is a family corporation.
II.
Banks, insurance companies and educational institutions, among other
corporations, cannot be incorporated as a close corporation.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both statements are true.
Both statements are true.
Only Statement I is true.
Only Statement II is true.
18. These statements are presented to you:
I.
The business may be managed by the stockholders rather than by a board of
directors.
II.
If the stockholders manage the corporation, no meeting is required to elect
directors.
In your evaluation of the foregoing statements:
a.
b.
c.
d.
Both statements are true.
Both statements are true.
Only Statement I is true.
Only Statement II is true.
19. Which of the following statements concerning a close corporation is false?
a. The stockholders may agree among themselves to the effect that they are
partner among themselves.
b. Any action of the board of directors without a meeting shall be valid if all the
stockholders have equal of implied knowledge of the action and they make no
prompt objection thereto in writing.
c. In case of deadlock in management, the SEC may order the corporation to
acquire its own shares of stock provided it has unrestricted retained earnings.
d. A close corporation shall not list in any stock exchange or make any public
offering of any of its stock of any class.
20. Immediately after their election, the directors must formally organize by the election of
the following officers, except:
a. President
b. Vice President
c. Treasurer
d. Corporate Secretary
21. The President of a corporation may at the same time be the:
a. Treasurer
b. Corporate Secretary
c. Chairman of the Board of Directors
d. None of the foregoing, because the president cannot occupy another position in
the corporation during his term.
22. The following positions in a corporation are presented to you:
I.
President
II.
Treasurer
III.
Corporate Secretary
IV.
Chairman of the Board
Who of the foregoing must be a director of the corporation at the same time?
a.
b.
c.
d.
I and II
III and IV
I and III
I and IV
23. Who may or may not be a director of a corporation?
a. Treasurer
b. Corporate Secretary
c. Both (a) and (b)
d. Neither (a) nor (b).
24. The certificate of incorporation of Parametro Corporation was issued by the Securities
and Exchange Commission despite the fact that only 3 out of its 7 incorporators were
residents of the Philippines. Such inadvertent issuance of the certificate of
incorporation:
a. means Parametro Corporation is unincorporated.
b. means Parametro Corporation a de facto incorporation.
c. does not affect the acquisition by Parametro Corporation of the status of a de
jure corporation because non-compliance of the residence requirement is a
minor defect that does not affect corporate existence.
d. results in the automatic dissolution of the Parametro Corporation upon discovery
by SEC of the corporations failure’to comply with the residence requirement for
incorporators.
25. Which of the following documents may be submitted before or after incorporation?
a. Verification Certificate as to the name of the corporation.
b. By-laws.
c. Certificate of bank deposit as to the paid-up capital.
d. Articles of incorporation.
26. An incorporator of a stock corporation at the time of incorporation must be:
a. the owner of at least one share of stock of the corporation.
b. a member of first board of directors
c. a duly elected officer of the corporation.
d. all of the foregoing.
27. A subscriber of the capital stock corporation still to be formed must be:
a. an incorporator
b. a signatory to the articles of incorporation.
c. a member of the incoming board of directors.
d. none of the foregoing.
28. The article of incorporation of an Eastex Computer Corporation provide for 15 directors.
Which of the following is invalid concerning its by-laws?
a. That the quorum in the meetings of directors be at least 8 directors
b. That the quorum in the meetings of directors be at least 10 directors.
c. That the quorum in the meetings of directors be at least 7 directors.
d. The by-laws do not mention anything about the quorum in the meetings of
directors.
29. What may be the composition of the executive committee of a corporation?
a. Directors
b. Stockholders who are neither officers nor directors.
c. Officers who are neither stockholders nor directors
d. A combination of (a), (b) and (c).
30. The executive committee must have at least:
a. Three members who must act with a unanimous vote of all its members.
b. Three members who must act by a majority vote of all the members.
c. Five members who must act with a unanimous vote of all its members.
d. Five members who must act by a majority vote of all its members.
31. Which of the following causes of vacancy in the board of directors may be filled by the
remaining directors if they still constitute a quorum?
a. Increase the number of directors.
b. Removal of directors.
c. Expiration of the term of a director.
d. Disqualification of a director.
32. Who may be removed as a director without cause during their term of service?
a. A director representing the majority stockholders.
b. A director representing the minority stockholders.
c. Either (a) or (b)
d. Neither (a) nor (b) because they can only be replaced upon the expiration of their
term of office though the election of another in their place since the removal is
without cause.
33. Which shares may be issued with or without par value?
a. Common shares
b. Preferred shares
c. Both common and preferred shares.
d. Neither common nor preferred shares.
34. The rule that protects directors who act with due care and in good faith, as long as their
decisions are lawful and in the beast interests of the corporation.
a. Fairness rule
b. Business judgment rule
c. Golden rule
d. Anti-trust rule
35. A suit bought by a stockholder in the name an in behalf of the corporation to protect
corporate rights or redress wrongs committed against the corporation, whenever
corporate officers refuse to bring such actions or such officers are the ones to be sued or
held liable.
a. Individual suit
b. Class suit
c. Representative suit
d. Derivative suit
36. A stock corporation, in general, is taxed in the same manner as a:
a. general professional partnership.
b. non-general professional partnership.
c. sole-proprietorship.
d. cooperative.
37. Samorano is the owner of 500 shares of stock of Center Sales Corporation whose articles
of incorporation provide for 5 directors. In the annual election of directors, the following
ran for the position of director: Abanes, Baricuatro, Castillo, Doromal, Elmora, and
Filamor. Samorano asks you which of the following is the incorrect way of casting his
votes.
a. 500 votes each for each candidates.
b. 500 votes each for Abanes, Baricuatro, Castillo, Doromal and Elmora.
c. 2,500 votes for Abanes.
d. 1,000 votes for Abanes, 1,000 votes for BAricuatro, and 500 votes for Castillo.
38. Which of the following is not a characteristic of a corporation?
a. Perpetual life
b. Transferability of ownership interests
c. Unlimited liability on the part of the stockholders
d. Ability to attract large amount of capital.
39. Which of the following provisions in the articles of incorporation cannot be amended?
a. Name of Corporation
b. Number and name of incorporators
c. Term of existence
d. Primary purpose
40. No-Par shares may not be issued for a lower price lower than:
a. stock exchange quotation price
b. issued price.
c. market price.
d. fair market value.
41. Shares that may be issued at a price higher than P5.00 per share are:
a. par value shares.
b. no-par value shares.
c. both (a) and (b).
d. neither (a) nor (b).
42. Shares that may be issued at a price lower than P5.00 per share are:
a. par value shares.
b. no-par value shares.
c. both (a) and (b).
d. neither (a) nor (b).
43. Other than from retained earnings, dividends may be declared out of:
a. paid-in capital in excess of par-value.
b. paid-in capital in excess of issued price.
c. both (a) and (b).
d. neither (a) nor (b).
44. Which of the following is an incorrect composition of the capital stock of a corporation?
a. Both par value and no-par value shares.
b. Both preferred and common shares.
c. Either par value or no-par value shares.
d. Either common or preferred shares.
45. These statements are presented to you:
I.
A director is an agent of the corporation by virtue of his being elected as a
director.
II.
A director who owns the controlling interest in a corporation has only one vote in
the meeting of board of directors.
In your evaluation of the following statements.
a.
b.
c.
d.
Both statements are true.
Both statements are false.
Statement I is true; Statement II is false.
Statement I is false; Statement II is true.
46. The following vote on a per head basis, except:
a. directors of a stock corporation.
b. stockholders.
c. trustees of non-stock corporation.
d. members (of a non-stock corporation).
47. These statements are presented to you:
I.
A person may become a stockholder of a corporation through the receipt of a
stock dividend given to him in payment of services previously rendered.
II.
A contract of subscription has for its object unissued or issued shares such as
treasury shares.
In your evaluation of the following statements.
a.
b.
c.
d.
Both statements are true.
Both statements are false.
Only Statement I is true.
Only Statement II is true.
48. The highest bidder in a delinquency sale is the one willing to pay the:
a. highest amount for he highest number of shares.
b. lowest amount for the lowest number of shares.
c. full amount of the balance of the subscription, accrued interest, cost of
advertisement and expenses of sale for the smallest number of shares.
d. full amount of the balance of the subscription, accrued interest, cost of
advertisement and expenses of sale for the highest number of shares.
49. Carmona is a creditor of Solomon who is stockholder of record of 1,000 shares of
Montero Corporation. Solomon sells the shares to Bacalso through a deed of absolute
sale that has not yet been recorded in the books of Montero Corporation. The transfer of
the shares by Solomon to Bacalso is:
a. valid between Solomon and Bacalso.
b. valid as against Montero Corporation and Carmona.
c. valid as to Solomon, Bacalso, Montero Corporation and Carmona.
d. not valid as regards any of those mentioned in (c) until it has been recorded in
the books of Montero Corporation.
50. For the purpose of determining the validity of the contract entered into between two
corporations with interlocking directors whose interest in one corporation is nominal
and substantial in the other, the presence of the interlocking director should not be
necessary to constitute a quorum and his vote should not be necessary for the approval
of the contract in the meeting of board of directors:
a. of the corporation where his interest is substantial.
b. of the corporation where his interest is merely nominal.
c. of both corporations.
d. of neither corporation for as long as there is no fraud and the contract is fair and
reasonable under the circumstances because he has a personality separate and
distinct from both corporations.