Business Law

(1)

ReSA

The

R.eview

School of Accountancy

'ETel.

#

735-9807 &

734-3989

BUSINESS

LAW:

Pre-week Lecture

Atty.M.

S. Bonafe

1. A, B, and C as partnens in a padners in a partnership s,tipulated and inutually agreed Urat R sfratf66?ilrare in the profits and losses. Is the agreement valid as among the partners onfy-and not against third

perscns?

'--

2'-a.

Yes, because among the partners it is valid to exernpt one ftorn sharirg in the profits and losses,

L

Yes, valid as long as third percons are not prejMiced.

1c

'r

Not valid stipulation exemptirp a partrrcr frorn sharing prof,rB and

lcses.

d.

Not valid as against third persons or partrrership creditors.

2. A newly admitted partner shall be liable fior the pre-o<isting obligations

of

the parbrership at the tinre

of

his admissbn in

fa,t.lrof partnerchipcreditorsuptotheextentof

hiscapital

contribution..

_-.--t;,

'',t y,,_t,t

t,"

_{I'l a{ 'VtYl"}

,;r iridustrial

parher

shall

not

share

in the

losses and his share

in

the profits shall be iugJ_aOd-equitabk- under the ai.itmstances,

c.

Second staternent is

falsg

first b tru€.

d.

Both are false statements.

--.-

First stdrertent is false, second statement

h

true.

Q_')

tiotn are true.

3. Three of

he

following dissolve a partnership,

qISp!:

.r.

Partnership business has bemme

unlawfulT

-f

.

Death, civil interdiction or insolvency of a partner.

_,

4, Sp'rral power of attorney is necessary in the folbwing c

(

a.

To make such paymenE usually considered as ads of admioEt&!!o!;

t.

-

io

compomise, to submit questions to

arbrtration;

_---t

_i

1...

To bind the principal in a

contr

I

of paftiership;

,t,.,tl

-->y*rJ'

,,

l-[f

.j.

Any other act of strict

dominion.

tr

-{r

"1

e

_ilac"l[",-y-

'

_i.

5 H

pa:trrcr

who

is

liable

to

the

partnersh,p

fir,ldrmag",

O*

to

his fault

may claim

ffih.iil#.iif

tnrough

hii

extraordinary efforts in otlrer activiths of the partner:;hip unusual profits have been reEiiTecl.

-

i

,, ,.

, .

r.

!

_{_},1

,.,

,

p

if he fails,to deliver

hb

prornbed

contrihrtbn

and shall be in delay from

fiE

yr ).t11,r1 _{l', ff ,Jrl(t.l}

c.

First is tnre, second is

false.

r,6{rtqil,

,

_rD.(

a,

\,t.J

d.

8oth are true.

6. A contributed P1M, B contributed PtM, and C contributed services. They agreed to divide the prcfts.a:r_-d_lqgsqs eqrally. In case of loss of P.3M, fur how much, if any, is C li,able?

a.

Nothing, because an industrial partrer is exqnpt from losses.

b,

P.1M but with reimh,rrsement from A

ard

I

equalty.

c.

A and B alone shall

slouder

the loss at C's option.

O

P.1M

-.r

,,'

',1 o.iri (;,rrr

t

Li

7. Suppose in the preceding case, there was no_ agreernent as

b

profit-loss sharing, what will _bie_the_share_of_{C in}

fie

_profit?

/p.

r Just and equitable under the

circumstarrces

d.

Court to fix his share.

8. Based on the preceding number, what sfrall be his share in the loss?

c.

PIM

(')*on"

9. A

subscribed

to

1,000 shares

of sbck

of

X Corporation

and

pid

25o/o

of the

said

sr.bscription. Can he vote

all

his subscribed shares?

a.

No, because the subscriptiori has rrct been tully

paid.

[tt

['llrl- '

u''rtlct\

''r,'\

icrf

b.

No,becausehissrureshavebecornederinquentshares.

_{ftLtr.l(.,1[rr,[,}

_1,

..,i..,.i',.t

k-,

Yes, as regards the paid percentage of

fte

subscription.

,.11 ,

to,

because shares allfiough unpaid but

mt

delinquort can be voted.

10. X C-orporati,on posted a P1M

proft

in its realty business and its real estate has appreciated in value to the tune

of

p4M.

The board then declared dividenG computed on the basis

of

P5M representirq

pofiE

ard

appreciatbn in value

of

its real estate. Is the dividend declaration valki?

a.

Not valid because there was no 2/3 ratification by the outstanding capital stock.

b._

Valid beirg based on profits and irrcrements in the value of the corporate 6sets.

(a

'tlolvalid

_{because divirlends}mustconre

mty

from the

profits.

_0,

i,{r,,/: r,',.

, , |

:

i-dl

Valid if crcditors do not object nor protest against the sanre.

a.

Equal to the shares of A and B

(2)

\Il'Nt?lll/, . ww4v'n ,w vYvlTtlvi,r*

,*oF^

6il

f"y*^7

11. A, subssibed

to

100

stnre

of

X corporation, payhg 25olo thereof. Despite the dernand by

a

for

the

issuance

of sbck

certificate, the corporation refuses

b

issue one corresponding

to

lhe 25o/o paid. Meanwhile, the corporation has become insolvent and A now

refuse to

pay

hb

unpaid balance

on

his subscriptbn.

Is the

refusal

to

issrc

a

stock certifrcate valid?

{

flot valid, because stmk certificate can be issued for the paid portion of the subscription.

b.

) Valid. becarrse sbck

cst.ift

te can onlv be issued after full oavme-nt of the srrhsrrintbrr

(U. )

VatiO, because stock

cqtific

te can only be issued after full payment of the subscriptiorr.

tl

Valid as regards the unpaid percentage on the subscriptbn.

d.

Not valid because only delinquent shares may be denied sbck ceftifrcate.

12. Based on

tle

facts in the preceding number, can a validly retuse to pay the unpaid balance on his zubscription now that lhe corporation ha

/a.

)

no, uMer

the

potectbn

of creditor:;

\lrl

_{No, under}

_the

_ilof corporate frction.

tlrfr,nfnr

c(

pqcrt)

i&,til

L-

'fes, _because_of_the_insolvency_{of the corporation}_{which also}_extinguished_his_{obligation to}_pay_the_balance.

(61p','',frr('t

o,,

_E(

,

i

Ye,s, _becauseof the denial of his rlg

li

'llre

_L-y-iaws_{may provide}_that_ttre

_hold

lrei-ect

iX

the members

of

the

rfard.

--

_{',r+wlvofiaafl}

_friltf

_on[,

-,''rrr

by-la',rrs may provide that no

officer

r.

L4

15

:

ilrst

statement is false, second is

true.

c.

Both are

Eue.

r2^- -.

b.

Setond is false, first is

bue.

fiilil ;: ffi

Fnt "'

Jqt

'

D'r' ttov

-

)luk

t" -lrtcv

tlar:,rii,, of the fottowins must

q4f@Br

rre enirrppirFslcepc

_-

_^n^J:

'

'tWkW

a.

Directors

_-

c^

Incdrporators

z

h

Trustees

-

_(d.)

Officers

n-(lm

t\

&?af

Private corporations have the fiOllowing

a

1butes,

qxcept:

'w

wa

v'

1

urAAtLLt

, att'NY' '

-"il*" - U

-=__-A

It

is

an

/

rs'

g=!:

1!

'

9^L0'P'

)

*tlaary't'.

tr'^'n &5rDE\15

6 _{) ttl*y}

i.allavw or charter.

(

cocCt/p^tt.

_{W I}

t1

It

has

t

a.

It

nas the

pow

rties expressly authorized by

hw

or incilent to its cre

irl thiee of the fulhwing cases, all shares have voting rights,

dxcepti

_,.

t\

Electionof

direcbrs

-D

ufuh

rcr

r*i(lti

fttLJc.

Dissolutionof

thecorporation

Z

b.

lricrease or decrease of capital stock

'

d.

Merger or

cmsolklation

_i.

AlG

17Att.heannualmeetingofttrecorporati,onrorttreeteaMorn,.oi,oto,,,o,,..,-q,,iuffitr,-,

C, D, and E received the highest number of votes and thus proclaimed as elected. F received ten (10) votes less than E.

Subsequently, E sold his shares to F, Who, between E

ard

F has the right to attend as direcbr?

a.

E is the director because hb term b one year until his successor is elected and qualified.

b.

F is the director because he has bought the shares of E.

c.

Both of them shall be direcbrs.

(

ileither of thenr shall be

dkecu.

18. ABC corporation has

an

autfprized capital

sbck

of

PlM

divkled

into

50,000 co{nnrln shares

and

50,000 prefuned shares.

At iE

inception,

tfe

corporation offered fur subscription all ste comnpn shares. However, only 40,000 shares were subscribed. Recently, the direcors

thot{ht

of

rabing additicnal capital and decided

b

offer

to

tlre publk all the

res

have pre-emptive

right

b

the 81-

to*s

of

any class

in

proportion

to

thelr

ftrusr1()

d.

No, because he has waived this right vyhen Ire subacribed to a part on ly of the issuarrce of shares.

19. B^ased on the facts of the precedirg number, would X also have pre-emptive right to BE 50,000 preferred shares?

,6)

Yes, because all stockholderi nave pre-emptlve rQhts

to all

issues

of

ihgres _-of-anJ.glAgq-

in

proportion

_to

_their sharefioldings.

b.

No, because pre-emptive rights do not apply to the issuarrce of unissued shares.

c.

Yes, because pre-ernptive r@hE apply only to the issuarrce of unissued shares.

d,

No, because X has waived his pre-emptive rights

to the

issuance

of

prefened shares when tre subscribed

b

the cornrTon shares,

20, The corporation has

a

nine-mernber board

of

directors. Two

of the

members soU

their

shares while

two

others are

Mrr\c, il

'1

l'

'r''

rr"'

i

'lr'

'

Three

d.

Four

,fi

_c1

_Ji,,t{64

<,14,, the outstanding capital stock?

poration

'P

_{ffiililT:rTffifffi*Pof}

bvbws

/,

_"

+u

rrtrgolr

_pqNi

₊₀

{e\

hrlgr,r

.r

*'

rdc(r'1rr[r

(3)

22. A direcbr of a corporation may be rernoved by:

a.

Vote of rnajority of the ouBtanding capital

stod

c,

nl.l

b.

2/: _{of the}

_{.fo,ctholders}

_d.-'zlz

_I_stock

_-+

w

1i/wrfuui

,itJ71lt 23.

Inthematterof

managernentof thecorporation,

thisissupreme:

$

oArqoR rc1"r1'r'1r';

_'M

o"l{ J

',vtII

(Al(f

c-

SbckltoHers

C)

*ordirecbrs

24. Three of the llolbwirq are requisites tur the existence of de facto corpora

a.

Incorporated

,tio",

u

,uiid

lr*

9VC

-

Niili,lrt

-';..Tctuat

use

wers

t-

Attenrpt in good faith to

organize

I

Exbting

in

pr

l

r.-t

J;

l

lr;ee of the following are required fur incorporators,

except:

&Sf

pt

NI(

, arq.'

.:

They must be natural

persons

c.

Not less than five nbr

npre

than fifteen

b.

All of legal

age

dtlapnty

rnust be citizens of the Philippircs

L

iC.

i I

rkler in due course has the bllowing rights, except:

.,,

He holds tlre instrurnent fnee fronr defucls of title of prior parties.

.

tl,lorc^(

_\urt(

d.ue

cGurk

'" -

( '-

?

1.'-t

1c('t;s

a

President

b.

Chairnun of the Eoard of directors

,

F iee t'i om defenses of prior parties among thernselves.

iirrorce payment against all parties liable thereon.

7 '

, i'trlds the instrument as if it were

non-negotiable.

lflat, [D[ ,

'

_l\t-!..Ji

_rhefotlowing is

rnt

negotiable instrument?

t -

Pay to the order of Pedro Cruz P1M (Sgd) lose Santos To: A or B

i

.

, pnrmise to pay to the order of the bearer P1M. (Sgd) M

e

Due to Bearer P1M or a BMW car worth P1M at his option. (Sgd) M

d

Pay to the order of myself PlM. (Sgd) D To: W

i3.

llree

of the following are requisites to be a holder in due course

_Ecept

a.

'l-hat _{the instrument}_is_{complete and regular upon its}_face;

l-:

Tnat the holder took it in qood fdith and for value ,

c

l'hat he becanre the

fpber of

it before it was overdue and without notice that it had been previously dishororcd

if

,-r

Sr::h was the fact;

6.

) mut he had rrc

krcwl@e

of arry fact whish would impair ttre validity of ttre instnrment or render it valueless.

x

\-/

2 -1. A rla<es a

mte

payable

to

B or order.

Tte blbwing

are the indorsers of the note in the order of their indorsements: B,

( _._l-'._'-,Fl trolder) and G(subsequent hotder). Ttre ncite is diihbhored rn-Ure hands Of F, who notifies B,

e,

D, E. Whieh is

frir.. COITCT]I?

.r.

The notice given by F to B operates to the benefit of C, D, E, and G.

).

-ite:

notice to C inures to the

hnefit

of D, E, and G.

c.

lTre _notice_to_{D inures}to the benefit

of

E and G.

(

t{l

The

notfe

to C inures

b

the benefit

of

8.

hdor

f'l

.

_,^,{o_,_r,e

la.

(fud)

A To:

B

₇

hb absence X.

(ltu,,

_\r(,r,!

(Sgd) A To: B and X , .1,{irr

_"l

P who endorses it to

x

in tfiis manner: "Payable

b

X. (Sgd) P."

Later X, without indorsing

tjrc

note delivers the

sann

to Y. The note is subsequently dishonored by M. May Y proceed against M for the note?

a.

No, because

the

special indorsement

of

P has made

the

note tD be payable

_to

_{order and must be}endorsed

b

Vtq^\y((,-

lrr^,,J;

_pwr{tg

Jkt,ratii(

_or

F

_!ur(r,,.6

ar^

negotiate.

\

b

I

Yes, because

an

instrument originally payable

b

harer

rernains

to_be

payable

b

bearer

depite

spechl

L/

mOorsenrentmadethereon.

''0g(r hc,nv

_,

atwc!(

b.q,.6,

'

(fu,, l6tlf,,*

Lro"r,

12)

c.

Yes, because M, as maker, is absolutely liable to pay the insbument in the hands of any holder. c.

d,

32, Th-e neqouabte instrumenr

b

notdischarsst

A '

"6G

'aL;*1

k"1

d^r'(n'3

I

--

6:w'i;

f," m*p"r

oomioffi

rrouer

rrereoldror)

at, or after

nnttri

in his own

u"nat,

='v

cc*

[

rr-'v";'s

[""

X

eV the irten[onalcancellation of the

irsEumqq!_

r- -

_t

_{,. .}

t

No, because Y diJ

mt

acquire title to the instrurnent due to lack of proper indorsement. .

C r:r;;yt";;ff;; **"i, *"O-,nt**i1D

arcoo*t,dale

J P"\

1""'l

_{'ti' 'int,,}

_tl

d.

By any.other act other act which discharges a which discharges a simph simph

conmct

for the for the payment payment of of morrey.morrey.

.!u,r ltrlf[ol[

rn,rv

aUcti

9'Cr,-,i\<,r

1..rfl

_[r[t

_1q,rya g"[9"

33. Payfircnt by cessbn as

distil

uished from dation in payrnent

1

Thedebto

p.

₎

fne

emect

things ceded or assigned.

C.

The

prope

faction of a debt in rnoney.

d,

What is delivercd

by

the debtor is

meely a

thirg

to

be consirlered

m

the

equivalent

of

a

perfornnnce

of

the obligation.

z*.fi'\

(4)

RetiA:

I

ne Reueu,

scnool ol

Accluntancy

'I

i (,

'

,1. i:

Page 4 of 19

34. A owes B P2O,OOO whhh irccame due and payable

hst

June 23, ZOO[. On

tlmt datE

A offered B P10,0O0, tfrc

otly

money he then had, but B refused to accept

ttn

payment. A thereafter tnet C, 8's 23 year old son,

b

whom he gave

the

P10,fi)0 wrth

tfrc

request

that

he

tum

ttn

noney

over

to

B.

The money was stolen while C's possession. How rnueh rnay B still recover frorn A?

Q.

-

P20,(mo

c.

P15,000

b. P10,000

c.

P

-0-35.

If

a third persons pa)6 an obligation. What are the rights, whhh are available

to

him if he pays the obligation with the knowledge and consent ot the debtor?

Fi,st Answer

-

He can recover fiom the debtor the entire

annunl

which he has paid. Fecond Answer

-

He subrogated to all of the righB of the creditor,

i.r.

Both answers are correct.

l.

ilriiir

lnswers are wrorB

b.

True, false

43. A source of obligation

mt

arising frorn

hw

a.

Negotinrum

gestio

----'

'-b.

Solutio indebiti

i

a.

rTrue, Eue

b.

True, false

c.

Only the first answer is conect

d.

Only the second answer is correct

c.

False, true

d.

False, hlse

i't

.:

.

E anci

-

executed

a

promissory note binding themselves tro pay f}9,000

to

X,

Y

and

Z.

The note is now due and ,reoldrddble. Can the creditors pnxeed against A alone for tste payment of

tfn

entire

ffit.

a.

fio. e;rch creditor can collect only P3,000 ftom A.

b--.

':i,, erttitr X, Y or Z can colbct P9,000 fiom A.

1i.

,,io, €dcl'r..rerfitir can collect onty P1,000 ftom A.

'

_t.

_YEs,,riJ;6p _thc_{promissory riote}_is

_silort

_with_respect_to_the

_r(lhts

_of_{the creditors,}

_tfE

_{obligation is}_presumed

_b

_be

;olicriy.

*

:i''.

I,rsiire

lio.fii,

lupBlse

tlut

C is insolvent, can A and

I

be held liable

br

his share in the obligation?

a.

Yes, the rleirt shall be pesumed to be clividecl into as many equal

shars

as there are debtors.

l,

Yes, but A ;.nd B will be liable proportionately.

6

t No, the debts are corsidered distinct frrorn one alrcther.

-S.

_ll),

_onil

_either_A_and_B_{but not both will}_{be liable.}

,t

j8

Using

No.51,

suppose that the oblEation was about to prescribe, but X wrote a letter

b

A dernanding for payment

_of

tire entire delrt, will this have tfie effiect of intemrpting the running of the period of prescription?

il,

Yes, because the demand macle by X covem the entire debt and will therefore inure

E

the

hnefit

of

the other

/-'

_ireditcrrs.

V-f

ies, insoFar as A is concerned

hrt

mt

with regard to

I

ard

C.

.

ti()t _{trr-ar-rse the demand}_should_{have been rnade}_to_all_the_debbrs.

:;.

,'r,'r,

ril

^tf.

re creditors should have rnade the dsnand

')

r ,,i;r r Nc.

-fsi'anrl

_{artrEriptix]*sets}in, trcw much can Y collect from A?

,,. l!1,0(i0

c

P1,000

,: i,iotrC

_p.Y+

'ft

\

.1J. rusrr'rg; _ilo._154._{how riruch can X}

_collfft

_ftorn

A?

/--,

i. fxJ,000

c.,.P1,000

b.

P3

00c

d.

P

-0-- -7 'r: w ' _{:' fi6t1

41. Intlivisibility as distinquished ftom solldarity.

a.

Pluralityof

sufittisidivisit{e.

1n1[i'1rr

roll(

--' 'tr,y.t

,,r'n

_,,i,'

(.;'cl'ir

b.

When

the

obligation

is

converted

into

one

of

indemriity

for

daniages because

of

breach,

the

character

of

the

obiigatbn rernains

c.

Refers to the hqal tie or vinculum

6)

nefers to

fie

prtstatkil

with

onstimes

Ble

objct

of Ule

oblbatbn.

_'

Lz

42. When one of the parties has

broight

an action to enforce the instrument he carrrnt subsequently ask

br

its reformatbn

,Ihe

injurcd party may seek

rerission,

even

afts

he has chosen fulfillrnent if the latter should be{ome impossibh.

(a,

_,

True,

urre

c.

False,

tue

'14. The loss or deterioration of the thing intended as a substjtute through ttre negtigence of the obligor does not render

him,

liable

,

I

person alternatively bound by

diftrent

prestations shall cornpletely perftrm one of them

45.

Th

nd if the undertaking is to deliver a

trterminate$ring,

the payment shall be nude

a.

_-/_ ,\_

k^f1

rJ.^.

\.(

r(.i...,

,

{r,,1t,.1, ,..

b.

At the domkile of the

sedibr

(c)'.

Whereve the thing might be at

tfn

nrcment the obligation was

constituEd

,..-f

r

,

r,vr

{[.,

thr''l

i ,.,

Y-

Wtrererrer the thing

mfint

ne at the amount trre obligition is to be

tutfiiled

I 45.Des.Bnd is

mt

needed

b

put the debtor in defiault, except

'-a:.- I Wnen denrand woutd Ue

useless

'-s

b.

,When

_Se

_{parties so}

$ipuhte

c.

When Ume b of Ete esserrce

(5)

ltgoA:

t

ne

reueu,

UGnOOI OI

ACOOUnEnGy

Page 5 Ol 19 :'/

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_t.

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47. Qrlpa aquiliana'aS distinguished ftom culpa contractual

a.

Proof of due diligence in the selection and supervisbn of employees is not available as a defrnse

b.

Proof of the contract and of its breach is sufFrcient prima Facie

b

warrant recovery

nce of the defendant is merely an incklent in the perfurmance of the obllgation or liability is the deferrlanrs negligert act or omissiofl

ilsdf

qB.

shed frorn

J#

i''

,a,

iability may be waived

(n.

_-.1

couts

c.

cause damage or prejudice

rr.

Responsibility arising thereftcm is demandable

4.). A t,assenger on

a

truck was hurt

but

in a criminal case against the driver, saiJ driver was

acquitted.

The victim now

>l

r.:

lih€ c'.rrrrer of the truck for culpa contractual. May the suit still prosper?

,

I\lo, tlris will constitute double jeopardy

.

,

..,.

llo-

r

ilt of the accused

w6

not prcven by proof beyond reasonable doubt 1,.t1

'(,

li,rlui

' ,/€ri,

theexistenceof

theconbactof

carriageandtheinjurk=suffi.

'

o Yes,

ligence of the driver.

i, 1. O rc ts not a requisite needed in order that obligation shall be extinguished by loss or destnrction of a thing due

a.

When the obligation is to deliver the house located

at

123 Recto, Avenue, Manila

A_

When

tie

hing

is lost without the fault of the debtor

i',

'/Wnen

nreoollqation is to delivera brard new Honda

Strcohredorange

7

_n,nr,,.t

t[.

]l

'U

When tne

hing

is lost befure the debtor

incu

ed delay

i(r .

the ohligor binds himself

to

perfonn his obligation "as

:,-1i., obligatiorr is

f-.

',Vilh a term i i

.

i Wirh a suspersive

condition

n,.-t

_^iE

"

pt.,rr<f

52 I:

presupposes

not

only that obtiqatioir

a

Prix'rissory note

t

Bill cf exchange

a.

Accionreivindkatoria

b.

Accbn subrogatoria

a.

Pl1,000

b.

P

9,000

a.

Mutuality of contract

b.

Freedom of contract

58. The statement "Confacts shall be obligatory in ,--fio1their validity are present" refurs to

( a.)

Cnnsensual

onfacts

yr,l'

t',t

l;'t1rrrrr

b.'

Real

contract

.r.,g,

I

r<..1

i,,

.{.

_l()r

r:

soon as he shall have obtained

a

loan" from a certain bank.

c.

With a period

d.

Wilfi a resolutory condition

c.

Accion redhibitoria

d. lAccim

paulhna

:

1 ,.,,.t

:r

,c.

P5,000

(o

rtroo

the

obligor

is

able,

redy

and _.willing

but

also rnore

so, in the

act

of

perfiorming his . rl'l '

t'j

\c.)Teriderof

payment

-.,

r1..1','i,,

,1,..

n,L

..'-.,,.,.,-

.. ,-tI

d ObligBtiontosell

_\f,t

_lD'

_lrt,t(1.1

1,,,,,,

, ...,.i,..t

i.i

A r;,.:t; a loa.r

of

P1M ftom B which becornes due on Ocbber 1, 2003 and rnortgaged his trouse as security fur the

6t.

Ori Jti-re 30, 2003. the nnitgaged horce completety desboyed by fire

thru

the

lault of

C. A week later, B demanded

L.;.ivr'lient frcm

A. ls

B's dernand valid?

r

r.ll,, tne oestruc'Lton of the house was rrct

Uru

trtc' fault of A

b

i'lo, ttre obligation is one with a clefinite perrcd which is deerned

intenffi

fs

the benefit

of

both the

debbr

ard

/^'.

rti,diu

( c

Yes, tlrc debt becornes dernandable unless A can give amther

secrrty

equally satisfdctory

{.

Yes, the debt becomes demandable even if A can give _{arrcther security equally}satisfactory 54. An acticn Eo imBlgn the acts of a debtor intended to defraud the creditor is

55. A

owe

B P11,000 due on )uly 2,

2003.

B owes A P6,000 due on July 3, 2003 and P4,fi)0 due on July 10,

2003.

B owes C P11,000 due

on

July 3,

2@3.

On July

3,

2003

I

cannot pay C so B assigns

to

C her credit

of

P11,000 against A,

without the knowhdge of

A.

On July 10, 2003 C bies to collect from A the P11,000. How much can C cornpel A to pay?

56.

Ihe conEact must bind both contracting parties, its validity or compliarrce cannot be left to the will of one of them, and

r

c.

Relativity of contract

'

_d.

_{Obligatoriness}_{of contract}

57. 8y this prirrciple, contracts take effect only upon the contractrng paftJes, their assigns or st Ccesso_

_E

in interest

c.

klativity

of contrrct

d.

Obligntoriness of contract

whatever ftom they have been entercd into

proviffi

all the requisites

'- r

c.

Formal

contracts

t

_t

, i,-,.,

d.

Solemnaortaaatt

t'

"

_"

'.

''

'r 59. A conuact in whkh a person literally contracts with himself is

a.

Adhesion

contract

c.

Accessory contract

,6')

lumcontract

Dor.trr

-

I

, ,

d.

Unilaterdl conbact

60.

If

the obliTauon of the debtor is

"I

will pay vou my debt after

I

have arrived from abroad." The obligation is

(,

'-'.r,'( _{r r,\,} _' ,\ "'t',,' cr{ 1,, 1i1 .,

c.

Voidable

d.

Unenforceable

g-\

Valid

(b.

_)void

_Y,'

,,:.i1tlx

(6)

KgDA:

lne

KeugtY

UCIIOOI Or ACCOUnEnGy PaEe 6 of 19

61. When a third person assures the payment of the obligatron

Uthoullthe

knowledge of the

debts

but with Ule consent

of the creditor, there is

-a-\

Delegacion b.

\

Expromison

62. This obligation is demandable at once

^a"

With a suspersive cordition

b:

)

Witha

oeriod

indienr, .,,i

.

I

\

63. The folbwing are void contracts, except

a.

A

contract whereby

X

pomised

to

live cersideration of P1, 000,000.

b

An ;lgreement whereby A is to render scwice as a servant to B without compensation as long as A has not paid him debt.

A

'iole

the

car

of

B.

Later they entered into

a

contract whereby B would rrct prosecute

_{A in}

consideration

of

i'i00,000.

A stipulaton in a conf,act of lease whereby the landlord can go to couft to eject the tenant in case of failure of the

latier to pay the rent agreed

upon.

.

/

I ,1 .

;

i{

_'?

,:nd'l

solidarily bcrund the-mselves

to

deliver

to

S

a

Honda motorcycle

valud

at P60,fi)0.

The oblbatinn was not

h..5lleC ti'r'ouqh the fault

of

l.

Thereupon, S filed an action

in

court against N and the

cout

awarded P72,000

to

S l;1i.sei'ling Ehe value of the motorcycle plus damages. Which of the following situatbn is valid?

:.

if

li

pays S the P72,000, N can collect from R and J P24,000 each

l-'

5

ins

to ccrlect P24,000 each from N, R and

I

to satisfy the court's award of P72,0@

f,.1

i''l carr refuse to pay the penatty because it should be charged against

l,

the guilty party.

'cl

_.

_if

_S_strceeds_in

_ollecting

_the_P72,000_from_{N, N in}_htm_{can collect fr,orn R P20,000}_and_{frorn J}_P32,m0.

6:.

A, .r leeprey driver driving necklessly caused

rriorc

physical injuries to his

pcserper

B and pedetrian

C.

As a result

c.

Subrogation

d.

NovaUon

When my means permit me to do so

When it depends on the happening of a specified event

as

the

common-law-wifu

of

Y

without

the

benefit

of

marrbge

in

c

2,3

and 4

(

o lr,2,3and4

c.

Solidarily liable

d.

Subsidiary liable C. d. C,

rd

c.

C may pmceed against A for culpa aquilana

d.

C may proceed agEinst a for culpa criminal 66.

i;

a bus driver drivirg negligendy, killed his passenger B and

_{@estrian C.}

As a result

1

B may pruceed against X's enployer and the source of liability is the crime committed by A or culpa criminal

2. _'

B meiy proceed against X's

empbye

and

the

source

of

lhbility is the

breach

of

contract

of

carriage

or

cupa

Ldntractual.

3,

C rrray oroceed against X's employer and the source of liability is the crime committed by A or culpa criminal.

4.

C rnay proceed against X's employer and the source of liability is the

euasi{elkt

committed by A or culpa aquiliana, which of tne following is nqJ,corect?

a--E

may proceed aqainst A fur culpa criminal

;4r.

b

r,uy

proceed agairst A fur culpa contractual

t. and 3

2and4

.

,

r'tg,rr,3

d.

(1 _t

57 llrcre

is novation of the obligation

if

t;lrcuer-ffipaymentiishortenedfrom5yearsto3years.

_"

^<'1r'[r',1''

-

rr''rrr':11-

l,,rlr,' '.

'.-^,*,((

3]_Il-ffitff"tr

pavment is

qlenqgl

from 3 vears to

t

t".:"i"e,

nubo^r6.1,.^

{

-t.

r)r

i

itt,

)

,6.

trrue,

fabe

_d.

False, false

68. In _{{blank'indorsemen!} the inrlorser renders himself

a.

'Frimarily liable

/'h

Secondarily liable

69.8Dl

and personal

defen-s

may be raised behveen (. aqT lmmediate

partEs

_l,^r[u9t

I

. MJr,(, (

b.

Rernote parties C.

Ltlt

_lF

_rt

_lr

rr\

(lr(terl4tr"(t

$

lrnr(c ,

!r,

ro{

l,c.[tr

c.

Intervenirg

parties

frLcrnl {L'r" r'

_'

ir

lr'lt"

'f

_{r'r'ti''' It''}

d.

Subsequent parties 70. This is a real

defenses

_-'t

wi,c h,.g

k.,co{o-o.,

rr./'(orJ'.'(t;li

lY

a.

Fraurd is

irducenrnt

(c._ Want of delivery of an hcormlete instrwnert

b.

want of

conskleration

_bl6uress

in the absence oFph-y*ffifpressure

-(

7I.

A, with

vt9!egJg.l'er-SF,

inurnidated her husband B

to$ll

hb exclusive property

_b

_her.

The contract of sale is

'\

a. Rescbslble'--

c. _Unenforceable

D

..roidable _{. z}_t_.,r

11 1-:. ,(;

,

6[,

(fioid

\)

72. B, husband of A, in his capacity as head of $re family, sots a parapheral property in her name to C, witlrout A's conss11. The contract of sale is

a. Resclssible

_G.

pr*nror.oUtu

b,

Voidable

_r.

_.

_,.

d.'Void

73.|n

L999,

at

age

i6.-A

soE his land

tur

P4M payable

at plM in

1999, p1M in 2000, p1M _in_{2001 and p1M}_in

_2002.

_In 2C[4., A wants to annul the contract on the gmund of minority.

will

his mtion prosper?

,a,

No, A is allowed to ask for annulment of the contract

on

perfection of fl-re contract

(q9/

-Yo,.l

has 4 years counted

frsn

the time lle becornes

o

Irnent of ure

conh?ct

-)

nc !ir,,Ui,p+. r

r

r.{

c.

No, the accepEnce of the instalknent payments

amounted

e

t

_,"

_(^,.t

I

d.

Yes, provided A was tfien acting in good faith when he sold

(7)

'lx;

-r"l'tt

t

2

'.ke

Ft,'(r.:'

6t

t

74. This contract is without

effct

unless ratified

g.

Marriage between first degree

cousins

c.

a guardian and his ward

,

/0.)

Contraa of sale between two insane

ptrsons

d.

nd and

wifr

,/

75.X,

ofrered to sell

to

B 10O carbns of sardirres at a

specified

by B and subsequenEy delhaered his

btter of

acceptance.

In

view of the shortage

of

the catch

of

sardines. A failed

to

deliver the cornmodities

it

had offered f,cr

sale.

B decided to sue

A.

Which is correct?

a.

The acceptance of the offer only oeated an option to buy

b.

The absence of conslJeration distinct ftom the price makes the contrmt without any obligatory furce

,d

-

ttre

acceptarrce of the offer to sell by showing Ure intention to buy for a price ceftain creates a bilaEral aonUact to

\-'/

*ltand

buy

d.

The acceptance

of

the

offer to

sell constitute

a

binding contract

of

sale provided the option was supported by a

s ufficient cooskJeration

,'6. M nmkes a negotiable pronrissory note for P10,000 with the name of the payable in

blank.

The note is stolen by P who inserts his name as payee and then indorces the note to A, then A to B, and B

b

C, who is a holder in due course. On

7fi\urity,

C cannot enfiorce the note against

\a-z

Itl

c.

t,l i)

cJ.

1/.

,tt lssued a note payable

_{to bearer.}

He delivers the note

to

B. B indorsed the note specially to C, then C negoti.ates the ,r,lte l".y clelivery to

D.

Which of the folbwinq is

rut

correct?

c.

D can enforce the

rpte

agEinst A.

d.

C can enfurce the note against 8.

a.

A promises

to

pay to the order

of

B the sum

of

US $1,000 payable in pesos at the rate of exchange

prwailirE

on Aug,"tst L4,2K)2

b. A

,000

wllh l2o/o interest thereon.

(Q *

1,fi)0 and allcosts, charges and experses including

reaornble

attorrrey's fees.

' .{ A

P1,000

in

two equal installnrents, the

first

payable on August 14, 20f,2

aN

September

l+,2WZ

A

B

,-\

D .an enforce the

rute

agairst C.

fL

)

O carr enforce the rrcte agairst B.

L,'

/8

Thir provisron renders a note

_@&[ego!E!!q

85. It

contains

an

order

to

pay

out

of

a

particular instsurnent law

-a.

Bill of lading

(5-\rreasury

warrant

80.

dfssirns

that do not

eftct

ttre rregothbility of an

->

Ju;n no1.

<rr{a*

_"r4

the

second

o#t*,

79. ,tuhich of tlre F:lbwing is not negotiable?

a.

I

promise

b

pay S

or

order P10,000 on

or

before September

14,2002 in

payment

of

the purchase price

of

the rnerchardise

I

bought ftom

him.

Sgd. A

A

Pay.to the

or

and charge

_fe

rq1S^b

my mcpunt. To C, Sgd. A

. r .

,

Pay

Eo-The-or

_Sd

A

---iT,

_{-, i*i..}

_,-.

.,

-rl.'

Pay to

I

or

o

14,

2W2.

To

L gci.

A

I

80. The

/\

C or order P10,000, 30 days after dernand

(.!,

C or

ords

P10,0m, 30

dap

after C passes the CPA board

exanrinatbns

d

p4Obk

,,^

a.

ffiO within 30 days

afEr

ttrc death of

C

/.{".;'tti

_fnrt,.. I

_l^

d.

A promises to pay B or order P1q000 on or before Augrrst L4,2@2

81. This is

_ffiegotiable

a.

t

plodrise to pay to the order of myself P10,000 signed by A, the maker

q-

Pay to the order of the Commissioner of Internal Revenue P10,000 to ABC

bank.

Sqd. A

f

.

\

I

prornise

b

pay to

orde

P1Q000. Sgd.

A

(

rv,larl

palCr)

ts--z' Pay to the order of X, Y arrd Z, PIO,O00. To B. Sgd. A

82. _FYe{ynegotiable instruntent is presumed to have been issled for a valuable consideration. The presumption

b

Q,r)1nq

lacie

- n5"tlt"$lrrlclis6rp+,.

c.

Absolute

Dr-

Conclusive

d.

Final

83. A,

issued

a

pomissory note payable

to

B

or

order

fu

P10,000

fur

10 bottles

of

whisky sold

by

B

to

A,

Later B

negotiated the note

b

C.

Subsequently, A discovered that only 5

bottle

of whisky are genuine. As a result

a.

C can enforce the note against A for P1Q000 regardless of whether C is holder in due course or

mt

b.

C cannot enforce the note against A for P10,000 even if he is a frolder in due course

of whether he is a holder in due course or not. a holder in course.

rtificate of deposit

-lmoney

@

X

fund

rendering

the

instrument beyond

the

rope

of

the

negoUabh

c.

Certificate of stock

d.

Warchouse receipt

irstrument

except

/.9*-.^

/'-i'n^s\3\

(8)

trlB5a. rtt9 lwlllw wrwt vl n9wgalEltv,

a.

It

is not

dated

,

b.

Does not speciry the value given ,

c.

Does

rpt

specify the place where it is drawn ,

ffi

Do€s not narne the payee where the instrurnent

b

payable to order 87. A detivered

to

B the tollowing instrnment

"one

month

after

date,

I

prcmise

to

pay

to

B

P10,000. sgd A"

B in<lcrced

the

note

in

blank befure maturity

aM

delivered it to C for value. When

dug

A refused to pay and C sued

B.

Could C recover fuom B?

a.

No, C could not sue B and hold him lhble as an indorcer because the lnstrurnent is payabh to a specified person.

b.

No, the instrument is

rct

negotiable

bcause

it

b

neither payable

b

order or

b

bearer.

c.

Yes, provided C to gilres notice if

dbhmor to

B, othenrvise B b discharged ftorn liability

[D

Yo,

the endorsernent will be consklered as an

as[nment

hence B will be lhble as an assig]pr of the instrr.rment 83. A,

krowirg

that therc

b

no such person by the nanre of B, makes out and signs a promissory

mte

payable

b

B or order.

A deliveis the note

b

C. C in tum delivers the

mte to

D without indorsernent. Later, D delivers the rrcte

b

E, a hoher

in cue course, whkh of the fullowing is conect?

A ge

he note can be negothted by indorsement and dellvery.

1l)

t

frrornCbecar.sea person

negothtirgan irrtrumentmerelybydelivery

b

liableonlybthe

\_,/

int

c

E iecor,res holder only if D will indorse the instrurnent.

ii

-Tte

in:'itnlnlent is not-negotiable because it is payable to the order of a rpn-existing person

BQ A nr;lkes

a

negotiable note

b

bearer and delivers

it to

B fior safe keeping. The note ls negothted

by

B

to

C.

Can A refuse to pay C on the ground that the note

w6

originally delivered to B

br

a special purpose only?

.1.

Yes, A can prove that he dellt/ered the

hsfurnent

b

B ltOr a special purpGe

b

No, wherc the insUurnent is in the hands of any holder, a valid delivery thereof by all

partie

prior

b

him so

a

to

make

tlem

liable bo him is conclusively presumed.

c.

Yes, berause B negotiated the note witfrout authority.

A

No, if C is a holder-in due course.

\J

90. A made a negotiabh promissory note in faror

of

B who negotiated

it

to C under the followirp

in6rsements.

"Pay

b

C

after passing Ure CPA examinauon in October

1999".

At maturity

of

the note, C presented

it

b

A fur payment and it

was Culy pak1, C did not pass the CPA examination. Which of the followirg b conect.z

a.

I-he promissory

rnte

is

mt

negouable because of the conditirn impmed.

b.

The promissory note becornes rregothble because the conditbn was saUsfied.

1

A had rrc right to pay C and, therefure can compelled

b

pay again.

fo

\

e

rnay disregard the condition and make payment whether the condition is fulfilled or not.

\-9i.

When dre instrument is cornplete but undelivered, delivery is presumed

to

have been made in favor

of

the

holde,

the presumption ls

a.

Conclusilre whether

tplder

in due course or fior value

b.

Prima-facie whether holder in due course or for value

!.

Conclusive if holder for value and prima facie if holder in due course

[Z)

prma-facie _if_holder_tor

_valrr

_and_conc]usirre.

_If

_holder_{in due course}

92. The indorser who simply si;ns his narne renders hinself

li{,lqto

all subsequent holders as

a.

Primarily

liable

(grlSeconOarily liable

b.

Solidarily

liable

_d.

Subsidiirrily liabh

93. There

b

_{lcdiffererrce*petween}

a

holder in due course defunses may always be raised

if

a.

Intervening parties

b.

Remote pafties 94, This is a pssonaldefense

a.

Absolute

defense

Q<^t

b"*r^rt

f

6l

Equitable

defrnse

t

\/

gS.\r6te

_reds

"I

prornbe to pay B or order P1,000,

A.

The instrument is

a.

Subject to a condition

b.

Payable at a determinable future trme

,gvsVVr '9

and one who

b

not, since as regards thenr, real and personal

(

_{c. )mmediate}

partie

r-d/

_{Subsequent parties}

c.

Real defense

d.

National defrense

30 days after B receives the proceeds of his loan from ABC bank. Sgd

_c.aPayable on dernand.

(/Non-neOotiable

because the payrnent is indefinite 96. The tolbwing are qualificalrcrs of a

corporaE{qeqq,

except

_BtStDtr1.l

_{S L*}

a.

Must own at

leat

one share of

stock

_d

,n M

irg

his term as director

(

c. M

ilppines

\,/ O

books of the corpor-ation

97. Which of the fullowing is the dlsadvantage of forming a @rporauon?

a.

The free and ready transferability of ownership

b.

The shareholdem are not liable for the debts of the business

c.

Becarce of the

powa of

succession, the existence

of

ttre entity is not

aftcted

by the personal vicissitudes

of

the

(a.

_\

sbcftholders to

fiB

wishes of Ule majority subiect

onf

to

equit&le

,,

t":,,r.t-,

'-

r,

(9)

98

99

The drawee bank rnay not refuse

b

pay checK Orawn against it

a,.. If

there is a "stop payment" issued by tlre

drawer

c.

If

the drawer's

depcits

is insufnciert

O. )

tf

tne diawer is

irsolvent

d.

When the bank receives noUce of the drawer's death Whlch of the following is the characteristic of partnerchip as a contract

7A{)

Fjt-st

statqnent- If

the surplm profits of the stod< corporation reaches the level

eqtnl

b

its pakl-up

capitai EE

SEC

may conipel the corporation

to

declare dividends, otherurise

it

will

be liable

fur a

suftax

on

improperly accurnulated surplus,

.?v.atfi stateneut

-

In

a corporation, two or more positbns may be heH concunently by the same person except

ttut

ili:

on? peBon shall act as President and chairman of the Board

a

Preparatory

b

Formal

d.

Uoth staternents are tn e

h

)

8()trl staternents

ae

false

.r

r

Both statemenB are true

t

8-rti': ctaternents are false

9 m,ilion 8 mrllicn

r0-'l

When ttre goods are delivered

to the

buyer passes to the buyer,

a

Upon perfer:tjgr\of the contract

b

\rB)n thedelvery of the goods

a.

Stock dividend

(1 ***

dividend

c.

Innominate

d.

Gratiutous

c.

Only the first staternent

b

true

d.

Only the second staternent is true

c.

Only the first staternent

b

Uue

d.

Only tJrc second staternent is true

c-.4

million

.

d. B

million

\-m

"qgle

_{SLIQtrln" tor a}

period

_of

seven days, ownershp

of

he

qoods

_

-_C, _9pp1 qg2ir?^qo!_of qpryen days

d.

Upon acceptance by the buyer Of the offer of tfrc seller

c.

Sale of capital assets

d.

Sah of Ueasury stock

0l

,'4:,.

srtterlEf-

The arrival of tfte tenn of a parhershp with a fixed term or period shall not dissolve the parhership if

ttr;

.;..:;tners conUnue with the

hriness

of the parhership but sr.rch parhershtp maybe tenninated anytime dependent

,

'

rar w,il of the cr:ntinuing partners.

.(,,1,!

.statefiwif

-

A

partnership

with

a

capital

of

P3,000

or

more

to

mmey

or

prcperty,

must be

in

a

public

i,-U'ir'€nt

and registered with the SEC in order for the parmership

b

be able

to

maintain an action,

in ib

own name -;':'.:s|. third party

2,

afts

1

'/ears

_of

operation, ABC,

a

donrestic corp. wanted

to

declare dividends

b

its

stockholders. The Eeasur,er

rcpoited a riet incorre after tax of P4

million.

One million is being appropriated

br

the acquisition of the machineries to

L'.: Dought 2 rncnths

fiom

rnw.

The treasurer llkewise reported an increase in the value

of

the lancl prevlously bought

io ix'

tJsed as plant site

tum

3 million to 5

million.

What arnount of dividend can be declared by the board?

.l

L

lO+.

#s

is not o tundamental obligation of the

agent

v

l,-,1,-:

a.

fo-r-en'cter an accounting

oi

ffte

trarsacuon

\

_Ue_11t^(r,

F--.

To subordinate his interest in favor of hb principal if there is a conflict of interest

.c.

.)To borrow if he is autfprized to lerd

V./

t'lot

to

carry out the agency, even

if that

is

the

instrr.rction

of

tfe

principal,

if

he knew

it

would result is

a

loss or damage to his principal

105. Dacion en pago as disunguished fi,om sale

a.

The cause is the price

(6)

The

objrrt

e<ist ancl

b specific

/

-c.

_There_{is no}_{pre-existing obligation}

cl.

There is a greater degree of freedom in fuing the price

106. A clistribution by a corporatbn of shares held by

it

in another corporation is

107. Any director of a corporation may be removed ftorn offrce by a vote

of

a.

Majrcrity of the mernbers of the board

b.

Majority of the sbckholders present

1(ts. A contract as a rule must be

itw1Eg

to be

valid.

_X

c.

2/3 of trte stockholders present

6),Ztl

of the outstanding capital stock

A ta)eayer is not entitled

b

interest on the overpayment of tax subject of a refund because an obligation derived from a.

b.

law is

nqfpresumec!.-"./

?Q<1r,r,'e q-i,v,1 h'tat

Both statenrents are

true.

(..

_fint

is false, second is true.

{,.1r (-rfl,rl

fi..lclc

-

hr',,rnk

t:l

r r""tr{w

/l.u$,

,''r'

r.r\l

Both are false. &/Second is false, first

b

true

109.

D is indebited to C in the amount of

P2fi),fi)O

and delivers to c his diarnond ring by way of pbdge.

If

D sells the same diamond ring

b

t

when

willT mquire

ownership of the sarne?

a.

From the tilne the sale is perfected between D and T

A

From the time T pays the price to D

(S.

₎

From the time C consents to the sale between D and T

d'

From the tirne T obtains

.rtual

possession of

tln

diamord ring

.

-t.r.

_ll

(

..-

_;rtl

(10)

RgSA: The Review

School of

Accountancy

Page 10 of 19

110

A buyer may sue the seller fur breach of warranty

agairrt

hidden deEcts of thirqs

A

Within 40 days norn delivery of the thing sold

(b.

₎

Within 6 months ftorn delivery of the thing soH

'(

Within 1 year from delivery of the things sold

d.

\

iithin 4 years ftom discovery of the ftaud

tlL.

Which of these

t@Aspecbl

torm of payment?

(

or'

Application of payment

-

gri.'i \,

i' .

tl''t

( I

v

*

".1

'"'

'

\5.

_{Dmion en}

_pago

_'

_^

_t?ht

_-l

;u

"1rr''

t

c.

Cesslon en

pago

,

d.

Tender of paymeilt and conslgnation _,,.

I i 2. The votrng_F!!!.!l.-g!nt

neded

in declaring cash or property dividend

-/'

(

.r-

_-'

Maprity vote of the board of

Directors

+

,*|"-rur'

.tt

k1

r"ojc,:lg

'r'-

Majority vcte of the Board of Dlrectors plus the vote of a maprity of the outstanding shares

:

Majority vote of the Board of Directors plus the vote of 2/3 of the outstandhg slnres

d

213 votes of the directors plus a majority of the outstanding shares

r..-[

w.,loy,

r 1

3

D br:rl1ow€d from C P 1,000,000

to

secure

the

payment

of

which the furmer verbally agreed to _,@liver

hit{

hec-tare

aqricultural land by way of antichresis and

to

pay t2o/o interest per annum. The contract of loan {oO

an^.i.-hres}

a

|,re trcth valid

b

Bolh nulland

rcid

G:

The loan is valid but the antkhresb

b

null

aM

rokl

wr,lk'

J

Ya

Jhe coniract of antkhresis rs valiJ, but the loan is null

aM

void.

j _14,_S_arnl_{B agr--ed}_{on the}_sats

_{of a}

_four_hectare

_foperty

_at

_Macapagal_Eoulevard

_br

_the

_{pice of}

_P15,000per square meter cn conditron that if the

pke

is not paid on a particular date, the sale will considered autornatically cancelled. On

tire particular date agreed upon, B did not pay S, b,ut B never asked for a judhial cancelhtion nor made a notarbl act

of recission. In this

case-a.

The sale is cancelled as per agneenent

h

S can validly refuse a+ry subs€queflt offer to pay by B

.

t.-r

B can stili pay S the price

V.'

B cannot anyrnore pay Sre prke simply because the sale is cancelbd due to his failure to pay on the stipulated date

115.Culpa aquiliana as distinguished from culpa

contratual:

a.

Proof of due diligence in the selection and supervisbn of employees is not corsidered a deErse.

b.

Praf

of the contract and its breach is sufFrcient

b

warrant recovery.

A

The negl(lent of the defiendant is only an incident in the perbrmarrce of the obligation.

/

d.

)

The source of liability is Ete neqlig€nt act of the person causing clamage to another.

116.A, B, and C executed a promissory note in favor

of

D, E, and F in the amount

of

P9,000.00. Can the creditors prcceed against A for the payment of the entire loan?

. a.

No, each creditor can only collect P3,fi)0 from A.

'

b^

Yes,

A.

(c.

_'d.

_)no,

tfre

debtrs.

YeS,

117.In the preceding problem, suppose C is insolvent, can B and A be held liabte for hb share in the obl[ation?

a.

Yes, because the obligation is presumed to be joint and several.

b.

Yes. but A and B shall be

6},

ruo,'Oecause of their

iilnt

bts are distinct from one another.

-iI:

No, because only either

o

the share of C.

118.Still

in

the preceding problem, suppose the obl(Tation is mixed solidarity can one of the oeditors demand payment

of

the wtrcle debt foom anyone of the debtors?

A No,

parate from one another.

(

b.

/ Yes,

bligation.

( Yes,

I of the debtors.

d.

No, because despite solidarity, a

debbr b

liable only for his share.

1 19. Indivis hi lity as d btlnguished from sol ilarity :

a.

Plurality of subject is indispersable.

b.

Reftrs to

tfn credibrs

xfrlu

debtors.

9*

May either be passive or actjve.

ej

Refers to the pestatkcn which constitutes the object of the obligation.

120.Under the Negotiable InsUumenb Law, _!obe hober in due course, a person must have acquired the insbunnnt before

it

is overdue. Does thb apply to the payee to whom the maker issued an overdue

note?

_zf,:>.

(11)

a.

Yes, because the payee is still considered a lrolder urrder the law.

b.

No, because issuance to the payee is not considered a holder under the hw.

c._

Yes, because the law does not distinguished between payee and subsequent holder.

d.

No, because the payee is privy to the contract between himself

ard

the maker.

l,21 . When one of the parties has brought an action to enficrce the contract he cannot subsequently ask fur

iE

refornntion.

The injured party may seek rescission even

after he

has chosen

the

fulfillment

of

the obligation

if the

latter should tsecome impossible.

(a.

True, tnre

b.

T'rue, false

c.

False, fabe

d.

False, true

,?2 the credito{has realright tg the fruits of the ttting from the time they have been

delivsed.

_"'

rhe brryer acqurres

rJ"ir'Sl'iXlirtJ'iil,[.r

uie rhins

rro*

tn.rffitio]or

the sare.

.;

t:,re,

true

(r,'.1rrue,

rabe

c.

Felrc;ffi6

d.

False, false

\_/

, r-! t:) a natLral obligation, the creditor has the right to enfurce the performance thereof itbeing based on positive

law.

\

I'Uir:il,-r indebiti and negotiorum4estio are quasi-conl.racts that give rise to civil obligations.

yz

i:.

laise,

false

_gfafe'frue

c.

True,

Eue

d.

True, false

i ,4'

t;-al sale of land made by its owner rs qq€

_&iggibb-

rirlL'

k'lt *-[ o]-t

nr

_v'(c.r1

^'{l'"

'

'iho;,.[..'

-

of land made by an aEent withoui'.,i-iir.i:i ,lr'.1 r,,.,ty

frrn\the

owner thereof is

void.

.'

o.

i-alse,

fulse

b.

FalseTrue

f1,hrue,

true

---T

True, false

25 A -;;ntr-act as a gerreral rule ntust be written to have ficrce and effect as a

valid

agreement A brmal or solentrr

confact

is one that must be in writino to be valid.

;:.

'r-rre,

true

b.

False,

false

([l[ar., rr"

\,,

\J

d.

True, false

I 2ti A corrtract r:f partnership where immovables are contributed must be in public irstrument to be valid. A iimited parhership must be SEC reqistered to be valid

a.

i=a!se, _trr-re

_b.

_True,_false

i..

/

ilre

[incr1.i3

of

autonorny

of

contracts means r-iause, tei'm and corrditbn.

c.

False, false

that

the contactirg parties as a

(0. )rrue,

true

rule may agree upon any stipulation,

partners.

/

a.

False, hlse

a.

False, hlse

b.

frue,

true 1c. False, u-ue

d.

True, false

d.

True, false

'.1,.1'

'I

as

furming

a

corporation

are

liable

as

general

d.

True, talse

d.

True, False

t'ie,arivrty of contracts means

_fficonfacts

take effect not

mly

between the parties but also thelr heirs and assigns.

a,

ralse,

false

(

tr.)True,

tnrc

_{_}

_,

c.

False,

true

d.

True, false

12U Antrchresis rnLtst be in writing and involves only rnrrrrovables .

In

pledge and Recto Law there is no deficierrcy liability.

a.

False,

ralse

1T)True,

true

c.

False, true 129.A contract enterect into by

.

,V is@,

\L

_{l0fr6Lt ,t}

A contract where the-arnount involved exceeds P500.00 must be in writing to be valid.

a.

True,

true

f

b. lFalse,

False

c,

False, true

130.4 de facto

corporatio)lione

which is not

registerd

with the SEC. X

In

corporation

by

estoppel, those

*i-**r*resented

themselves

G.)r",.,

oru

131.If the obltgation is solidary, it means there is mutual guaranty arnong the debtors and therefiore the insolvency of one is

shouldered by the others.

Solidarity may exist alttmugh th_ey'eptors may not be Lround by the same term, condition and manner of performance.

a.

False,

false

_(b.

_True,

tn-re

_c.

True,

false

d.

False, true 132.In dation in paymen! the

creditYLcomes

the owner of the property ceded

as

payment of the debt.

In

payment by cession, the creditors do not beccrne the owners but are authorized

_to

sell firc properties mspned to

them.

)

a.

False,

false

b.

False,

true

_d.

True, false

133.In tender

of

payment and consignation,

tne(efusatTwit

e creditor

to

accept

the

payrnent

of

the debtor will extingulsh the oblklation.

{

_-

-f-t,

C

The

third

person who paid

the

obligation without

the

k

the

will

of

the debtor

6 still

entitled to reimbursement from the debtor to the extent of the iatter'g.tenefrt.

b

True, true

134-Acorporatoncanbeastockholderbutnotanincorporator

(0c[rr,[trrc,

?

p,l-'l'")

irct,[tr,.t,

_{,..j,,, i,.}

!-To be a de jure corporation,

it

must be existing in law and in fact unlike a de facto one which exists in fact but not in