BLAW Flashcards by notpearl abare

S sold to B a truck worth P2,500,000, where the P500,000 will be payable upon sale and the balance to be paid i installments of P100,000. A chattel mortgage was executed over the truck and to further secure the obligation of B, his brother X executed a real estate mortgage over his (X’s) land. Unable to pay 3 installments, S foreclosed the real estate mortgage over the land of X which resulted in a deficiency of P300,000. In this case,
A. S can still recover the P300,000 deficiency
B. S can still cancel the sale and recover the truck
C. S can no longer recover the P300,000 deficiency since he already foreclosed the mortagge on the land
D. S can still foreclose the mortgage over the truck to cover the deficiency

S can still recover the P300,000 deficiency

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If a buyer already paid 8 years’ worth of installment, his Cash Surrender Value shall be:
A. 50%
B. 55%
C. 60%
D. 65%

65%

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In this contract, future obligations may be covered without need of a separate or new agreement:
A. Pledge
B. Real Estate Mortgage
C. Chattel Mortgage
D. All of the choices

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Which of the following is a characteristic of a partnership?
A. Remuneratory
B. Consensual
C. Innominate
D. Unilatera

Consensual

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Which of the following can validly be considered a limited partnership?
A. A, B and C are all limited partners
B. A and B are both general partners
C. A, is a general partner while B and C are limited partners
D. A, B and C are all general partners

A, is a general partner while B and C are limited partners

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A, B and C are partners of ABC partnership, where A committed an act, with the authority of B and C which cause
injury to X, a third party. The liability for the damages caused would be:
A. A will be primarily liable, B and C are subsidiarily liable
B. A, B and C are jointly liable
C. A, B and C are solidarily liable
D. A, B, C and ABC partnership are solidarily liable

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If a limited partner lends money to the partnership where a property of the partnership is given as a security, the contract
of security is:
A. Valid
B. Rescissible
C. Unenforceable
D. Void

Rescissible

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If a limited partner’s name is included in the partnership name,
A. There is effect to the partnership but the other partners are responsible for the limited partner’s share in the liability
B. The partnership shall be treated as a general partnership
C. The limited partner may be liable upto his personal assets
D. There is no effect on the partnership and the partners

The limited partner may be liable upto his personal assets

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Pactum Leonina is a stipulation
A. That distributes partnership profits equally
B. That excludes a partner from sharing in the profits and losses
C. That is valid
D. That exempts a partner from sharing in the liability after exhaustion of partnership assets

That excludes a partner from sharing in the profits and losses

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If a corporation has three purposes, in its Articles of Incorporation,
A. It shall indicate only the primary purpose
B. It shall indicate only the secondary purpose
C. It shall indicate which one is the primary purpose, the secondary and the tertiary purpose
D. It shall indicate the primary purpose and the other two will be indicated as secondary purposes

It shall indicate the primary purpose and the other two will be indicated as secondary purposes

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The following are valid considerations for shares of stock of a corporation, which one is not:
A. Cash
B. Stocks of another corporation
C. Intangible property
D. All of the choices are valid considerations

All of the choices are valid considerations

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To be considered as a disqualification of a director, the penalty for the offense committed must be imprisonment for a
period:
A. At least 3 years
B. Exceeding 3 years
C. At least 6 years
D. Exceeding 6 years

Exceeding 6 years

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In this kind of voting method, the number of shares is multiplied by the number of directors to be elected to determine
the number of votes:
A. Straight Voting
B. Cumulative Voting
C. Straight Voting and Cumulative Voting
D. Neither Straight nor Cumulative Voting

Cumulative Voting

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The number of votes required to approve a transaction of a self-dealing director of a corporation vested with public
interest, aside from majority of the independent directors:
A. Majority of the Board of Directors present and constituting a quorum
B. Majority of the entire membership of directors
C. 2/3 of the Board of Directors present and constituting a quorum
D. 2/3 of the entire membership of directors

2/3 of the entire membership of directors

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Which of the following is a correct match of the requirements for corporate officers?
A. President – required to be a citizen of the Philippines
B. Treasurer – required to be a director
C. Secretary – required to be a resident and a citizen of the Philippines
D. None of the choices is correct

Secretary – required to be a resident and a citizen of the Philippines

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Shares of stock covered by a subscription contract may be declared delinquent if the subscription is not fully paid within
______ from the date fixed for their payment or from the call made by the Board.
A. 15 days
B. 30 days
C. 45 days
D. 60 days

30 days

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The following will require concurrence of 2/3 of the stockholders, except:
A. Shortening the corporate term
B. Declaration of cash dividends
C. Create bonded indebtedness

Declaration of cash dividends

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Proxy voting may be allowed in:
A. Stockholders’ Meeting
B. Directors’ Meeting
C. Both Stockholders’ and Directors’ Meeting
D. Neither Stockholders’ and Directors’ Meeting

Stockholders’ Meeting

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In case of mergers/consolidation, the required notice must be provided:
A. 30 days before the meeting
B. 20 days before the meeting
C. In the same manner as that of stockholders’ meeting
D. In the same manner as that of directors’ meeting

In the same manner as that of stockholders’ meeting

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Considering that stockholders of a close corporation may directly manage the corporation, the effective maximum number
of directors may be:
A. 15
B. 20
C. 25
D. 30

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A foreign corporation is doing business in the country if it is continuing the body or substance of the enterprise of business
for which it was organized. This is otherwise known as:
A. Continuity test
B. Substance test
C. Contract test
D. None of the choices

Substance test

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If a corporation has a fixed term, any extension must be filed not earlier than:
A. 3 years prior to the expiration of the term
B. 5 years prior to the expiration of the term
C. 3 years after the expiration of the term
D. 5 years after the expiration of the term

3 years prior to the expiration of the term

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The voting rights of a common shareholder may only be limited by this kind of share:
A. Preferred shares
B. Redeemable shares
C. Founders shares
D. Treasury shares

Founders shares

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When summoned by the Securities and Exchange Commission, the officer required to appear under the Revised Code
of Corporate Governance is the:
A. President
B. Compliance Officer
C. Corporate Secretary
D. Treasurer

Compliance Officer

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A corporation using the fiscal year is required to submit its Financial Statements to the SEC within how many days from the close of the fiscal year? A. 105 B. 110 C. 115 D. 120

120

The following are transactions exempt from registration under the SRC, except: A. A broker’s transaction, executed upon customer’s orders, on any registered Exchange or other trading market. B. The sale of capital stock of a corporation to its own stockholders exclusively C. Subscriptions to unissued shares within the authorized capital stock D. At any judicial sale, or sale by an executor, administrator, guardian or receiver or trustee in insolvency or bankruptcy

Subscriptions to unissued shares within the authorized capital stock

In case no-par value shares are issued for less than the issue price or stated value, the liability will be borne by: A. The Board of Directors B. The Stockholder C. Both

The Board of Directors

The quorum in stockholders’ meetings is generally: A. 25% B. Majority C. 2/3 D. ¾

Majority

First statement: When a single stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion into n OPC, subject to the submission of such documents as the SEC may require. Second statement: As a rule, the OPC converted from an ordinary stock corporation shall not be liable for the outstanding liabilities of the ordinary stock corporation as of the date of conversion. A. Both statements are correct B. Both statements are incorrect C. Only the first statement is correct D. Only the second statement is correct

Only the first statement is correct

Selling of the corporate assets and distribution of the proceeds refer to: A. Dissolution B. Liquidation C. Termination D. None of the choices

Liquidation

A corporation created for charitable purposes: A. Ecclesiastical corporation B. Lay corporation C. Eleemosynary corporation D. Public corporation

Eleemosynary corporation

In case of natural persons, these are required to be of legal age: A. Corporators B. Incorporators C. Both Corporators and Incorporators D. Neither Corporators nor Incorporators

Incorporators

In the expiration of a director’s term, who will fill-up the vacancy? A. The BOD if it still has a quorum B. The BOD even if it no longer has a quorum C. The Stockholders if the BOD no longer has a quorum D. The Stockholders even if the BOD still has a quorum

The Stockholders even if the BOD still has a quorum

In the event of a director’s death or resignation, the vacancy must be filled-up within __ days from the time the vacancy arose: A. 15 B. 30 C. 45 D. 60

Which committee has the responsibility of monitoring and evaluating the adequacy and effectiveness of the corporation’s internal control system? A. Remuneration Committee B. Audit Committee C. Executive Committee D. Nomination Committee

Audit Committee

Under the Revised Corporation Code, corporations vested with public interest are required to have independent directors which shall be at least __ of such board: A. 1/10 B. 20% C. 1/3 D. 50%

20%

This attribute of the corporation describes the Corporate Entity Theory A. Artificial Being B. Created by Operation of Law C. Having the Right of Succession D. None of the choices

Artificial Being

The filing of a petition for rehabilitation of a corporation will require the majority of the directors and stockholders representing ________ of the outstanding capital: A. 50% B. Majority C. 2/3 D. 20%

2/3

The following are unenforceable under the Statute of Frauds if not in writing, except: A. A guaranty executed by G to answer for the debt of D to C B. The purchase of B of a cellphone worth P78,999 C. The lease of a real property for 18 months D. The authority of an agent to sell land in a public instrument

The authority of an agent to sell land in a public instrument

Those entered into in the name of a person by one who has been given no authority or legal representation, or who has acted beyond his powers is considered: A. Rescissible B. Voidable C. Unenforceable D. Void

Unenforceable

If there is no time provided in the Certificate of Limited Partnership for the return of the limited partners’ contributions, he may validly demand for the same by giving ____ notice: A. 30 days’ B. 60 days’ C. 6 months’ D. 12 months’

6 months

All of the following dissolves a partnership by operation of law, except: A. The termination of the definite term or particular undertaking specified in the agreement B. The death of any partner C. The insolvency of any partner or of the partnership D. The civil interdiction of any partner

The termination of the definite term or particular undertaking specified in the agreement

A, B, C and D are partners to ABC Partnership. C and D are limited partners. It was agreed that any and all liabilities are to be shared equally. By the end of the fiscal year, the partnership’s assets were P120,000 but the liabilities amounted to P210,000. In this case, A. A and B are liable for P45,000 each B. A, B and C are liable for P30,000 each C. A, B, C and D are liable for P22,500 each D. A and B are solidarily liable for P90,000

A, B, C and D are liable for P22,500 each

Which of the following is incorrect as to the consequences of co-ownership of the partners with regards to their rights to specific partnership property? A. A partner, subject to any agreement between the partners, has an equal right with his partners to possess specific partnership property for partnership purposes. B. A partner's right in specific partnership property is not assignable except in connection with the assignment of rights of all the partners in the same property. C. partner's right in specific partnership property is not subject to attachment or execution, except on a claim against the partnership. D. A partner's right in specific partnership property is subject attachment for legal support.

D. A partner's right in specific partnership property is subject attachment for legal support.

X, Y and Z are partners of XYZ Partnership. D, misrepresenting himself to be a partner, persuaded C to extend a loan to the partnership for P100,000, to which only X and Y agreed and received the proceeds of the loan in behalf of the partnership. In this case, who may be liable for the loan? A. X and Y only B. X, Y and D only C. X, Y, Z and D only D. XYZ Partnership and D

XYZ Partnership and D

If a partner contributes real property to the partnership, the requirement of executing an inventory, signed by the partners, and attached to a public instrument will be for: A. Validity B. Enforceability C. Convenience D. To affect third persons

Validity

The following are attributes of a corporation, except: A. It is an artificial being B. It has powers, attributes and properties expressly authorized by law C. It is created by agreement of the parties D. It has the right of succession

It is created by agreement of the parties

Which of the following powers is now available to a foreign corporation because of the amendments of the Revised Corporation Code? A. To form a partnership or joint venture B. To make reasonable donations for public welfare including giving aid to political parties C. To form a One Person Corporation D. To form a partnership for the practice of a common profession

To form a partnership or joint venture

Rebecca, Jack, Kate, Kevin and Randall is organizing a corporation whose Authorized Capital Stock is P64,000. How much is the minimum paid-up capital requirement under the Revised Corporation Code if the incorporators subscribed to 25% of the Authorized Capital Stock? A. P4,000 C. P16,000 B. P5,000 D. None of the choices

None of the choices

The existence of a corporation sole begins from: A. The time the parties came to an agreement to form a corporation and contribute money or property B. Filing of the verified articles of incorporation C. Issuance of a certificate of registration D. First day of the year following the filing of the Articles of Incorporation

Filing of the verified articles of incorporation

Under the Revised Corporation Code, the non-use of the corporate charter or failure to organize for a period of 5 years from the issuance of its Certificate of Registration will result in: A. Automatic dissolution B. Suspension of the right to operate C. A ground to file for dissolution of the corporation D. All of the choices

Automatic dissolution

A vacancy created by the increase in the number of directors, under the Revised Corporation Code, will be filled by: A. Stockholders B. Board of Directors if they constitute a quorum C. Board of Directors regardless if they constitute a quorum or not D. Corporate Officers if the BOD and stockholders do not constitute a quorum

Stockholders

A contract entered into by two corporations with the same director (an interlocking director) is generally valid. However, it may be regarded as voidable if the interest of the director in one corporation is substantial, and in the other, nominal. What constitutes substantial interest? A. Not less than 10% interest B. Not less than 20% interest C. More than 10% interest D. More than 20% interest

More than 20% interest

Which of the following is now a required to be a resident of the Philippines under the Revised Corporation Code: A. Treasurer C. Compliance Officer B. President D. Internal Auditor

Treasurer

The election of corporate officers would necessitate: A. Majority of the directors present in the meeting B. Majority of the total number of directors C. 2/3 of the directors present in the meeting D. 2/3 of the total number of directors

Majority of the total number of directors

Randall Pearson bought no-par value shares of the Big Three Corporation for P9, where the stated value or issue price thereof was fixed at P10. The shares were issued to Randall. Which of the following is false? A. Randall is not liable for the difference of P1 B. Only the Board of Directors will be liable for the watering of stocks C. There is no watering of stocks in no-par value shares D. The members of the Board that filed their written objection to the issuance will not be liable

There is no watering of stocks in no-par value shares

A subscriber will be entitled to all the rights of a stockholder even before fullpayment of the subscription, except: A. Right to vote B. Appraisal right C. Right to dividends D. Right to a certificate of stock

Right to a certificate of stock

The signature of ___ of the incorporators is necessary to adopt the by-laws prior to the issuance of the Certificate of Registration and shall be filed together with the Articles of Incorporation: A. Majority B. Two-thirds C. Three-fourths D. All

All

The issuance of stock dividends would necessitate: A. A majority vote of the Board of Directors B. 2/3 vote of the Board of Directors C. A majority vote of the Board of Directors and concurrence of majority of the stockholders D. A majority vote of the Board of Directors and concurrence of 2/3 of the stockholders

A majority vote of the Board of Directors and concurrence of 2/3 of the stockholders

In order for the restriction on the transfer of shares in a close corporation to be binding, the prohibition must be indicated in: I. Articles of Incorporation II. By-laws III. Stock Certificate

The stockholders’ meeting is conducted _____ on ______. A. Annually; the date indicated in the by-laws B. Monthly; any day as determined by the Board C. Annually; any date after April 15 D. Monthly; the date indicated in the by-laws

Annually; the date indicated in the by-laws

Under the Revised Corporation Code, the place of directors’ meeting shall be: In case the by-laws is silent, where shall the meeting of the board of directors of a stock corporation be held? A. The principal office B. The city or municipality where the principal office is located C. Anywhere in the Philippines D. Anywhere even outside the Philippines

Anywhere even outside the Philippines

The merger or consolidation of two corporations would necessitate all of the following, except: A. A resolution of the Board of the two corporations B. A resolution of the stockholders of the two corporations C. The issuance of the certificate of merger or consolidation by the SEC D. Liquidation of the absorbed corporation, in case of a merger, or the constituent corporations, in case of consolidation

Liquidation of the absorbed corporation, in case of a merger, or the constituent corporations, in case of consolidation

The number of stockholders in this type of corporation cannot exceed 20: A. Stock Corporations C. Foreign Corporations B. Close Corporations D. Non-stock Corporations

Close Corporations

Under the Revised Corporation Code, the required number of votes in case of voluntary dissolution of a corporation where no creditors are affected: A. 25% C. 2/3 B. Majority D. 3/4

Majority

A One Person Corporation may be incorporated by the following, except: A. An individual B. A trust corporation C. An estate D. None of the choices is an exception

A trust corporation

Despite dissolution, a corporation nonetheless, continues to be a body corporate for a period of ______ for purposes of liquidation and winding up: A. 1 year B. 2 years C. 3 years D. 5 years

3 years

To qualify as a Filipino corporation, whenever a certain percentage is required by law, the consideration is A. Ownership of the shares of stock B. Appointment of a resident agent C. Agreement of the parties D. Under what country’s law it was incorporated

Ownership of the shares of stock

Under the Revised Corporation Code, unless the bylaws provide for a longer period, the stock and transfe book or membership book shall be closed at least __ days before the regular meetings: A. 3 B. 7 C. 10 D. 20

The sale of securities to any number of the following qualified buyers are exempt from the registration requirement, except: A. Bank B. Investment House C. Insurance Company D. Pension fund managed by a corporation

Pension fund managed by a corporation

Continuous Inoperation by a corporation for a period of 5 years, A. Will be a ground to dissolve the corporation B. Will result in automatic dissolution of the corporation C. Will place the corporation under a delinquent status D. Will have no effect in the corporations’ operations

Will place the corporation under a delinquent status

D is a director of ABC Corporation and XYZ Corporation. The two corporations had a transaction with each other. D owns 25% in XYZ Corporation, in order for the transaction to be voidable, the ownership of D in ABC must be: A. 20% B. 30% C. 40% D. 50%

20%

The General Assembly may delegate its powers to a smaller body by how many votes of the members with voting rights, present and constituting a quorum? A. Majority B. 2/3 C. 3/4 D. 100%

3/4

The annual regular meeting of the general assembly shall be ______, if there is no annual date in the by-laws: A. 90 days after the close of the fiscal year B. 120 days after the close of the fiscal year C. Any day in April D. Any day after April 15

90 days after the close of the fiscal year

If a buyer of residential realty paid 8 years’ worth of installment, the right he is entitled to would include: A. A grace period of 270 days B. Cash surrender value of 65% of all payments made C. Both a grace period of 270 days and 65% of all payments made D. Neither a grace period of 270 days nor 65% of all payments made

Cash surrender value of 65% of all payments made

Disposal or sale of the thing is absolutely allowed in this contract: A. Pledge B. Real Estate Mortgage C. Chattel Mortgage D. All of the choices

Real Estate Mortgage

The requirement of recording the public instrument containing the real estate mortgage is for purposes of: A. Validity B. Enforceability C. Convenience D. None of the choices

Convenience

Zorro purchased a fourth sword from Luffy for P120,000 payable in 12 equal installments. The purchase price is secured by a chattel mortgage over the sword. Zorro was able to pay 2 installments but defaulted in the next 3. Luffy then foreclosed the chattel mortgage. In this case, A. If the proceeds of the sale is P80,000, Luffy can recover the deficiency B. If the proceeds of the sale is P120,000, Zorro is entitled to the excess C. Luffy may cancel the sale and retain the installment payments D. If Luffy cancelled the sale instead, Zorro will be allowed to retain the sword

If the proceeds of the sale is P120,000, Zorro is entitled to the excess

D promises to deliver a specific thing to C if the latter will pass the CPA Board Exam. Before the fulfilment of such suspensive condition, D made improvement to the specific thing. Afterwards, C passed the CPA Board Exam. What is the right of D to such improvement of specific thing during the pendency of condition at his expense? A. D is the owner of such improvement because it was made at his expense. B. D shall have no other right than that granted to the usufruactuary which is the right to enjoy and use the improved determinate thing for a reasonable time. C. D has the right to retain the improved specific thing by virtue of legal pledge until he was reimbursed by C for the improvement he made on the specific thing. D. D has the right to ask for reimbursement from C for the improvement he has made on the specific thing.

D shall have no other right than that granted to the usufruactuary which is the right to enjoy and use the improved determinate thing for a reasonable time.

H and W are legally separated based on a court judgment. The decision requires H to give monthly support to W of P10,000 at the beginning of each month. On March 2018, W purchased goods on account from H's business in the amount of P10,000 with maturity date on May 1, 2018. H has not given W's monthly support for the months of April 2018 and May 2018. Which is incorrect? A. If W demands her support for the month of April, H may set up compensation as regards to the debt W owes him. B. If W demands her support for the month of May, H may claim compensation as regards to the debt W owes him. C. If H demands payment of the debt from the sale of goods, W may set up compensation as regards to her support for the month of April. D. If H demands payment for the debt from the sale of goods, W may set up compensation as regards to her support for the month of May.

If W demands her support for the month of May, H may claim compensation as regards to the debt W owes him

D owes C P30,000 due on June 20. C owes D the following debts: P15,000 due on June 2; P4,000 due on June 14; P6,000 due on June 16; and P3,000 due on June 18. On June 17, C assigned his right to X. C notified D of the assignment but D did not given his consent thereto. On June 20, how much may X collect from D? A. P30,000 B. P5,000 C. P2,000 D. Nothing

P5,000

sold and delivered to B for P5,000 a specific cow which S new was suffering from Mad Cow Disease. B had no idea that the cow is suffering from such contagious disease so he paid the price of P5,000 to S. Which is correct? A. B can still retain the cow suffering from mad cow disease and the authorities of the state cannot condemn it. B. S can recover the cow from B since void contract produces no effect whatsoever. C. B may recover the money he has paid. D. B can still recover the cow suffering from mad cow disease and the authorities of the state cannot condemn it.

B may recover the money he has paid.

S sold and delivered to B for P5,000 a specific cow which S new was suffering from Mad Cow Disease. B had no idea that the cow is suffering from such contagious disease so he paid the price of P5,000 to S. Which is correct? A. B can still retain the cow suffering from mad cow disease and the authorities of the state cannot condemn it. B. S can recover the cow from B since void contract produces no effect whatsoever. C. B may recover the money he has paid. D. B can still recover the cow suffering from mad cow disease and the authorities of the state cannot condemn it.

B may recover the money he has paid

These are void contracts but which one will produce legal effect? A. Contract involving illegal service B. Illegal contract with one party incapable of giving consent C. Contract with cause and object which are not determinable D. Contract involving object outside the commerce of men

Illegal contract with one party incapable of giving consent

S sold his only car to B for P100,000 payable in 10 equal monthly installments of P10,000 each. As security, B executed a chattel mortgage on the car. What is the remedy of S if B fails to pay one installment? A. Exact fulfillment of the obligation with recovery for deficiency even without stipulation to that effect. B. Cancel the installment sale of car. C. Foreclose the chattel mortgage on the thing sold, if one has been constituted without right to recover any deficiency. D. Any of the above.

Exact fulfillment of the obligation with recovery for deficiency even without stipulation to that effect.

S sold his ring to B for P50,000 under the following terms: down payment of P30,000 and the balance payable at month end. As security, B executed a chattel mortgage on the ring. B defaulted in the payment of the balance. By reason thereof, S foreclosed the chattel mortgage on the ring. However, only P15,000 was realized in the foreclosure sale. Can S still proceed against B to collect the deficiency of P5,000 arising from foreclosure of chattel mortgage on the ring sold? A. No because Recto Law prohibits recovery of deficiency. B. Yes if deficiency has been agreed upon contrary to Recto Law. C. Yes because Recto Law does not apply to sale on straight term and the general rule is that if the foreclosure sale in chattel mortgage results in deficiency, the same may be recovered by the mortgagee in the absence of stipulation to the contrary. D. No because recovery of deficiency is only available in execution sale.

Yes because Recto Law does not apply to sale on straight term and the general rule is that if the foreclosure sale in chattel mortgage results in deficiency, the same may be recovered by the mortgagee in the absence of stipulation to the contrary.

S sold to B the December 2020 harvest of his specific farm lot. Unfortunately, due to a typhoon, the said harvest did not materialize. What is the status of above mentioned contract of sale of future harvest? A. The contract of sale remains to be valid because validity of contract is determined upon meeting of minds. B. The contract of sale becomes void because of the absence of subject matter. C. The contract of sale becomes unenforceable because it is still executor. D. The contract of sales becomes voidable because of vitiation of consent.

The contract of sale becomes void because of the absence of subject matter

On September 12, 2018, S sold under contract to sell a specific car to B without delivery. On September 15, 2018, S sold again the said car to D under contract of sale with delivery but without payment of price. On September 17, 2018, B fully paid the price to S. Which is correct? A. B has better right over the car than D because he has earlier title. B. B has better right over the car because he is the first payer of the car. C. The rule on double sale will not apply because there is no double sale. D. There is double sale upon payment of the price by B.

The rule on double sale will not apply because there is no double sale.

The contract of chattel mortgage stipulates that the foreclosure sale of mortgaged personal property will be done in a private auction instead of a public sale as provided by the Chattel Mortgage Law in case of debtor’s default in the payment of secured obligation. Is the stipulation for private auction of mortgaged personal property valid? A. No because the Chattel Mortgage Law requires the foreclosure sale to be done in public auction only. B. Yes by virtue of autonomy of contract and doctrine of estoppel. C. No because public auction will be prejudicial to the interest of the mortgagor. D. Yes provided the proceeds from the public auction will exceed the amount of the secured obligation

Yes by virtue of autonomy of contract and doctrine of estoppel.

Which partner is exempted from making additional capital contribution to the partnership in order to save the venture from imminent loss? A. Industrial partner B. Managing partner C. Silent partner D. Secret partner

Industrial partner

Which of the following may not be contributed by a pure limited partner? A. Cash B. Personal property C. Real property D. Services, industry or labor

Services, industry or labor

TIR Limited Partnership LTD is organized by A, B and C. A contributed cash to the partnership. B contributed property, plant and equipment to the partnership. C contributed services to the partnership. Who among the partners may be classified as limited partner? A. A, B and C B. A and B only C. A only D. B and C only

A and B only

A, B and C are partners in ABC Partnership. Later, they sell their ABC Partnership business to D with the agreement that D shall assume all the liabilities of the partnership to third persons. However, the third persons have no knowledge of the sale to D. Which is correct? A. The liabilities of ABC Partnership to third persons are extinguished B. Third party creditors may only ask from D for payment of ABC partnership obligations. C. The creditors of ABC partnership are no longer creditors of A, B, and C D. A, B, and C remain to be liable to the creditors of ABC Partnership in addition to D’s liability to these creditors.

A, B, and C remain to be liable to the creditors of ABC Partnership in addition to D’s liability to these creditors.

TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has the following partners with their respective contributions: T-P10,000; R-P20,000; I-P30,000; U-P40,000; M-P100,000; P-P200,000 and H-P300,000. No one was appointed as manager of the partnership. In the course of the operation of the partnership, T proposed to buy car spare parts from Dominion Motors but his proposal was opposed by R. A voting among the partners took place and I, U and M sided with T, while P and H sided with R. Which is correct? A. The group of T, I, U and M will prevail because they constitute the majority. B. The group of R, P and H will prevail because they constitute the controlling interest. C. None will prevail because no one is appointed as manager of the partnership. D. The partners will have to appoint a manager in order to resolve the conflict.

The group of T, I, U and M will prevail because they constitute the majority.

This principle means that a shareholder is not personally liable for the debts of the corporation and that a corporation is not also liable for the personal debts of its shareholder. A. Doctrine of Separate Personality B. Limited Liability Rule C. Trust Fund Doctrine D. Business Judgement Rule

Doctrine of Separate Personality

GREAT Company, a partnership engaged in the distribution of generators is composed of G, R, E, A and T. G is the managing partner. Which the following transactions entered into by the following partners in behalf of the partnership without any authority is binding to the partnership? A. The sale of a generator by R to a customer who was not aware that R had no authority. The customer has paid for the generator which is due for delivery. B. The purchase of a car by E from Honda Comopany whose owner was not aware of E’s lack of authority. The car and the price are due for delivery and payment, respectively. C. Both A and B D. Neither A nor B

Under Old Corporation Code of the Philippines, which of the following statements is false? A. Private corporation has the express power to establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees. B. Private corporation has the express power to give donations in aid of any political party or candidate or for purposes of partisan political activity. C. Both A and B D. Neither A nor B

Private corporation has the express power to give donations in aid of any political party or candidate or for purposes of partisan political activity.

If not specified, the preferred shares in a private corporation under the Corporation Code of the Philippines are? A. Cumulative preferred shares B. Preferred as to earnings C. Preferred as to assets D. Participating as to earnings

Preferred as to earnings

Under Revised Corporation Code of the Philippines, which of the following statements is true? A. Domestic corporation has the express power to give donations in aid of any political party or candidate or for purposes of partisan political activity. B. Foreign corporation has the express power to give donations in aid of any political party or candidate or for purposes of partisan political activity. C. Both A and B D. Neither A nor B

What is the difference between discounted shares and watered shares? A. Discounted shares are stocks issued for a consideration the valuation of which is intentionally understated while watered shares are stocks issued that resulted to understatement of stockholders’ equity. B. Discounted shares are stocks issued above its fair market value while watered shares are stocks issued above its par value or issue price. C. Discounted shares are stocks issued below its fair market value while watered shares are stocks issued below its par value or issue price. D. All of the above

Discounted shares are stocks issued below its fair market value while watered shares are stocks issued below its par value or issue price.

The Board of Directors of ABC Inc. agreed to tax evasion. Securities and Exchange Commission filed an action directly against the Board of Directors. The Board of Directors denies, stating that the corporation has a separate juridical personality. Which is true? A. The Board of Directors can never be sued because it has personality separate and distinct from the corporation. B. The SEC is right. Corporation can never be held criminally liable for fines but only its directors. C. The SEC is right. The juridical personality of the corporation may be pierced if it is used to commit tax evasion. D. The Board of Directors is right because it can invoke the principle of business judgement rule.

The SEC is right. The juridical personality of the corporation may be pierced if it is used to commit tax evasion.

Shareholders who shall receive dividends are those who are registered as such in the stock and transfer book as of the: A. Date of declaration B. Date of record C. Date of payment D. None of the above

Date of record

The SEC is right. The juridical personality of the corporation may be pierced if it is used to commit tax evasion.

Which distinction between a cash dividend and a stock dividend is false? A. The declaration of cash dividend requires only a majority of the quorum of the board of directors, whereas the declaration of stock dividend requires the approval of at least 2/3 of the members of the board. B. Cash dividend, once declared, belongs to the stockholder and cannot be transferred to any surplus account of the corporation; whereas the declaration of stock dividend may be rescinded before its actual issuance. C. Cash dividend has the effect of distributing the accumulated profits to the stockholders; whereas stock dividend has the effect of capitalizing such accumulated profits thereby increasing the corporation’s capital. D. A delinquent stockholder is still entitled to receive cash dividend but it must be applied to his unpaid subscription balance whereas stock dividend shall be withheld until the delinquent stockholder pays the subscription in full.

X is a director owning 20% of the outstanding capital stock of ABC Corporation and 40% of DEF Corporation. The corporations entered into a contract whereby ABC sold its commercial lot to DEF Corporation. The contract was approved as follows: ABC Corporation – 15 directors in Articles of Incorporation; 6 out of 9 attending directors voted in the affirmative including X; DEF Corporation – 11 Directors in Articles of Incorporation; 5 out of 7 attending directors voted in the affirmative, including X. What is the status of the contract entered into by the two corporations having interlocking director? A. Perfectly valid B. Voidable C. Unenforceable D. Void

Perfectly valid

The power to amend or repeal any by-laws or adopt a new by-laws may be delegated to the board of directors or trustees by ____, and revoke such delegation by ____.

2/3 vote majority vote

A person can be both the ___ and ___ at the same time

Secretary Treasurer

Between the President, Secretary, and Treasurer, only the ___ is required to be a director

President

refers to the period of time an incumbent actually holds office. It is different from “term”.

Tenure

A President ___ be the Secretary or Treasurer at the same time. except

CANNOT in case of OPCs, provided that he posts a bond

A voting trust agreement can be valid for _____ if it is executed as required in a loan agreement, but it shall be automatically terminated upon full payment of said loan.

more than 5 years

Directors and trustees can never vote by proxy in

directors’ or trustees’ meeting

A proxy form can be valid for just one meeting or for a period not exceeding

5 years

All matters where a stockholder’s right of appraisal is available, require ____ of the stockholders holding outstanding capital stock.

2/3 vote

___ can incorporate a corporation

Foreigners

_____ are not covered by the trust fund doctrine. They cannot be used to pay the creditors of the corporation.

Advances for future subscription

A ___ cannot be considered as a valid consideration for shares of stocks

postdated check

For services to be a valid consideration for shares of stocks, it must have already been ___.

rendered

In case of increase of authorized capital, the ____ must be based on the net increase

25%-25% rule

minimum paid up capital for corporations

0 or no minimum

___ of a corporation may be natural or juridical persons.

Incorporators

The Roman Catholic Church is a corporation by

prescription

A corporation sole has no

nationality

A corporation is said to be have a strong juridical personality because of its inherent attribute that it has the

right of succession.

The power to amend or repeal any by-laws or adopt a new by-laws may be delegated to the board of directors or trustees by _____, and revoke such delegation by ____

2/3 vote majority vote

When a director or trustee dies or resigns, the resulting vacancy may be filled up by the remaining _____ still constituting majority.

directors or trustees

A delinquent stockholder may not vote or be voted upon, but still has the

right to receive dividends

When the board of directors declare stock dividends, it requires the ___ of the outstanding stockholders. If cash or property dividends are declared, it does not require stockholders’ approval.

2/3 vote

When treasury shares are distributed as dividends, it is considered as ___ dividends

property

An independent director is still required to own at least ___ share of stock where he is supposed to sit as independent director.

one

A derivative suit may only be filed before the ____ which has jurisdiction over the principal office of the corporation.

Regional Trial Court

In stockholders’ or members’ meetings, voting by ___ communication is allowed provided it is allowed under the by-laws.

remote

Membership in a non-stock corporation and all rights arising therefrom are ___ and __, unless the articles of incorporation or the by-laws otherwise provide.

personal non-transferable

No person shall be elected as ___ unless he is a member of the corporation.

trustee

Any corporation may be incorporated as a ____, except mining or oil companies, stock exchanges, banks, insurance companies, public utilities, educational institutions and corporations declared to be vested with public interest in accordance with the provisions of Corporation Code

close corporation

An existing corporation which has an authorized capital stock of 40,000 shares @ P100 par value out of which only 10,000 shares have been offered for subscription which are now fully paid and subscribed. The corporation increased its authorized capital stock by an additional 20,000 shares @ P100 par value. What is the minimum subscription and paid up requirement prior to the approval of the increase in the authorized capital stock? A. At least 15,000 shares must be subscribed and at least 3,750 shares thereof must be paid before the increase in capital stock will be approved by the SEC. B. At least 12,250 shares must be subscribed and at least 3,125 shares thereof must be paid before the increase in capital stock will be approved by the SEC. C. At least 5,000 shares must be subscribed and at least 3,125 shares thereof must be paid before the increase in capital stock will be approved by the SEC. D. None of the above

At least 5,000 shares must be subscribed and at least 3,125 shares thereof must be paid before the increase in capital stock will be approved by the SEC.

Which of the following defects would make the corporate a de facto corporation? A. The corporate name which resembles the name of a pre-existing corporation is likely to deceive the public but the certificate of registration has already been issued by SEC. B. Failure to file the articles of incorporation with the SEC. C. Absence of certificate of incorporation or registration from SEC. D. Continuing business operations despite the discovery of the defect or defects after incorporation without any action to correct them

The corporate name which resembles the name of a pre-existing corporation is likely to deceive the public but the certificate of registration has already been issued by SEC.

Which of the following amendments to the articles of incorporation requires for its approval at least majority vote of the board of directors and only the vote or written assent of at least 2/3 of the outstanding capital stock instead of personal voting or ratification vote by at least 2/3 of the outstanding capital stock? A. Amendment to decrease or increase capital stock B. Amendment to increase the number of the sits in the board of directors C. Amendment to incur bonded indebtedness D. Amendment to reduce voting requirement in a close corporation

Amendment to increase the number of the sits in the board of directors

What is the term of corporate existence under Old Corporation Code of the Philippines? A. The term as specified in the articles of corporation which must not be less than 50 years. B. The term as specified in the articles of corporation which must not be more than 50 years. C. 50 years. D. Indefinite number of years.

The term as specified in the articles of corporation which must not be more than 50 years.

There are fourteen (14) sits in the Board of Directors of ABC Incorporated, a stock corporation. Three (3) sits are vacant due to the following reasons: (a) removal of a director by at least 2/3 of the common stockholders; (b) expiration of term; and (c) increase in the sit in the board. How shall the three (3) vacancies in the board of directors be filled up? A. By plurality vote of the common stockholders who attended the meeting constituting a quorum which is majority of the outstanding common stockholders B. By majority vote of the remaining directors constituting quorum C. Either A or B D. Neither A nor B

By plurality vote of the common stockholders who attended the meeting constituting a quorum which is majority of the outstanding common stockholders

There are fourteen (14) sits in the Board of Directors of ABC Incorporated, a stock corporation. Four (4) sits are vacant due to the following reasons: (a) death; (b) disqualification; (c) abandonment of office; and (d) resignation. How may the four (4) vacancies in the board of directors be filled up? A. By plurality vote of the common stockholders who attended the meeting constituting a quorum which is majority of the outstanding common stockholders B. By majority vote of the remaining directors constituting quorum C. Either A or B D. Neither A nor B

Either A or B

There are fourteen (14) sits in the Board of Directors of ABC Incorporated, a stock corporation. Two (2) sits are vacant due to the following reasons: (a) disqualification and (b) removal of a director by at least 2/3 of the common stockholdders. How shall the two (2) vacancies in the board of directors be filled up? A. By plurality vote of the common stockholders who attended the meeting constituting a quorum which is majority of the outstanding common stockholders B. By majority vote of the remaining directors constituting quorum C. Either A or B D. Neither A nor B

Neither A nor B

In which of the following cases are the directors of the corporation not personally liable to the debts of the corporation? A. When they willfully and knowingly voted for and assented to patently unlawful acts of the corporation. B. When they acquired any personal or pecuniary interest in conflict with their duty. C. When they consented to the issuance of watered stocks, or having knowledge thereof, failed to file objections with the corporate secretary. D. When they committed simple negligence or they acted in good faith or bona fide in directing the affairs of the corporation under the principle of business judgment rule or management prerogative.

When they committed simple negligence or they acted in good faith or bona fide in directing the affairs of the corporation under the principle of business judgment rule or management prerogative.

Which of the following matters may be provided in the by-laws of the corporation instead of its articles of incorporation? A. Creation of executive committee B. Provision on founder's shares C. Denial of stockholders' preemptive right D. Purpose clause of the corporation

Creation of executive committee

Which of the following statements about the purpose clause of a corporation is incorrect? A. The secondary purposes of a corporation need not be related with its primary purpose. B. Nonstock nonprofit corporation may provide proprietary or commercial activities as its secondary purpose. C. Both A and B. D. Neither A nor B

Nonstock nonprofit corporation may provide proprietary or commercial activities as its secondary purpose.

How many days must lapse from the maturity date of the subscription balance for subscribed shares to be considered delinquent? A. 10 days B. 20 days C. 30 days D. 40 days

30 days

Which of the following statements about a non-stock corporation is incorrect? A. Members may be deprived of the right to vote by proxy in the articles or by-laws. B. Voting by mail or other similar means in the election of the board of trustees may be authorized by by-laws with approval of SEC. C. Officers of the non-stock corporation may be elected directly by the members unless otherwise provided in the by-laws. D. Cumulative voting is available in the election of the members of the board of trustees even if cumulative voting is not authorized in the articles of incorporation or by-laws of the corporation.

Cumulative voting is available in the election of the members of the board of trustees even if cumulative voting is not authorized in the articles of incorporation or by-laws of the corporation.

Unless otherwise provided in the articles of incorporation or by-laws, what is the number of the board of trustees of ordinary nonstock corporation under the Old Corporation Code of the Philippines? A. It should be not less than 5 but not more than 15. B. It should be not less than 5 but may exceed 15 as provided in the articles of incorporation or by-laws. C. It should be not less than 5 but not more than 10. D. It should be not less than 5 but not more than 20.

It should be not less than 5 but may exceed 15 as provided in the articles of incorporation or by-laws.

What is the term of office of the Board of Trustees of an ordinary non-stock corporation? A. One year B. Two years C. Three years D. Four years

Three years

What is the location of the regular or special meetings of members of a non-stock corporation? A. The place shall be in the principal office of the corporation. B. At any place even outside the principal office of the corporation as long as provided in the by-laws and within the Philippines. C. The place shall be in the residence of the founding members. D. The place shall be in the residence of the President.

At any place even outside the principal office of the corporation as long as provided in the by-laws and within the Philippines.

What is the nature of transferability of membership in a nonstock corporation? A. Membership in a non-stock corporation and all rights arising therefrom are personal and non-transferable, unless the articles of incorporation or the by-laws otherwise provide. B. Membership in a non-stock corporation and all rights arising therefrom are not personal and transferable, unless the articles of incorporation or the by-laws otherwise provide. C. Membership in a non-stock corporation is a property right that can be transferred automatically. D. Membership in a non-stock corporation is assignable despite the absence of provision in the articles of incorporation or by-laws of the corporation.

A. Membership in a non-stock corporation and all rights arising therefrom are personal and non-transferable, unless the articles of incorporation or the by-laws otherwise provide

Which of the following statements is true concerning termination of membership in a nonstock corporation? A. Membership shall be terminated in the manner and for the causes provided in the articles of incorporation or the by-laws. B. Termination of membership shall have the effect of extinguishing all rights of a member in the corporation or in its property, unless otherwise provided in the articles of incorporation or the by-laws. C. Both A and B D. Neither A nor B

Both A and B

Which of the following statements is true if a foreign corporation engages in business in the Philippines without necessary license or permit from SEC? A. The said foreign corporation shall not be permitted to maintain or intervene in any action, suit, or proceeding in any court or administrative agency of the Philippines. B. The said foreign corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippines laws. C. Both A and B D. Neither A nor B

Both A and B

May a foreign corporation doing or engaging business in the Philippines without necessary license or permit from SEC maintain an action before Philippine courts or administrative bodies? A. Never because it has no license as required by Corporation Code. B. Yes by virtue of doctrine of estoppel but it must first acquire the necessary license before the appropriate government agency for the action to prosper. C. Never because it will encourage violation of BP 68 D. Yes in all cases because such prohibition is anti-competitive and unreasonable discrimination.

Yes by virtue of doctrine of estoppel but it must first acquire the necessary license before the appropriate government agency for the action to prosper.

Which of the following statements is true if a foreign corporation not doing business in the Philippines does not obtain license or permit from SEC? A. Said foreign corporation may sue and be sued for isolated transactions or contracts it entered into in the Philippines, as well as for those which are casual or incidental thereto. B. Said foreign corporation may sue in any court or administrative agency of the Philippines for violation of its intellectual property rights as provided in World Trade Organization Treaty. C. Both A and B D. Neither A nor B

Both A and B

Which of the following is incorrect about a proxy under Corporation Code of the Philippines? A. Proxy can be denied in the articles of incorporation and by-laws of a nonstock corporation. B. Proxy may be validly constituted only for one year. C. Proxy is not allowed to vote through a sub-proxy. D. Proxy is not allowed in the meetings of the board of trustees.

Proxy may be validly constituted only for one year.

Which is not a characteristic of a proxy? A. An oral proxy is not valid. B. It can be denied in the articles of incorporation and by-laws of a non-stock corporation. C. A continuing proxy within a period of five (5) years is not valid. D. It is not allowed in meetings of the board of trustees.

A continuing proxy within a period of five (5) years is not valid.

It refers to issuance of shares of stocks below par value. A. Discounted stocks B. Watered stocks C. Secret reserves D. Treasury shares

Watered stocks

A, a resident of Pasay City, has an obligation to deliver a Honda car with plate number ATTY-004 to B, a resident of Taguig City with a stipulation that the said car shall be delivered in Quezon City. At the time of constitution of the obligation, the said car is located in Manila City. At the date of delivery, the said car is located in Makati City. Where shall the car be delivered by A to B? a. Pasay City b. Makati City c. Manila City d. Quezon City

Quezon City

A, 16 years old, B and C owed X P120,000 jointly and severally. How much may X validly collect from A, the minor? A. P40,000 B. P80,000 C. P120,000 D. As to how much he was benefited

As to how much he was benefited

A borrowed P1,000 from B as evidenced by a negotiable promissory note. In order to secure the fulfilment of the obligation, A pledged and delivered his specific watch to B. At the date of maturity of the obligation, B voluntarily returned the specific watch to A. Which is correct? a. Only the contract of loan is extinguished. b. Only the contract of pledge is extinguished. c. Both contract of loan and contract of pledge are extinguished. d. Neither contract of loan nor contract of pledge are extinguished

Only the contract of pledge is extinguished.

A borrowed P1,000 from B as evidenced by a negotiable promissory note. In order to secure the fulfilment of the obligation, A pledged and delivered his specific watch to B. At the date of maturity of the obligation, B voluntarily returned the promissory note to A. Which is correct? a. Only the contract of loan is extinguished. b. Only the contract of pledge is extinguished. c. Both contract of loan and contract of pledge are extinguished. d. Neither contract of loan nor contract of pledge are extinguished.

Both contract of loan and contract of pledge are extinguished.

A went to Red Ribbon and ordered a customized cake with a price of P500 for the first birthday of his child. A and Red Ribbon orally agreed that delivery of the cake will occur after one week and payment of the price will be made at the same time of delivery. Which is correct? a. The contract is unenforceable because it is a sale of personal at a price of P500. b. This contract for a piece of work is enforceable because it is not covered by statute of fraud. c. The contract must be ratified first to be enforceable. d. This contract must be in writing to be valid and binding

This contract for a piece of work is enforceable because it is not covered by statute of fraud.

It is a contract whereby the parties conceal their true agreement. Thus, the contracting parties are bound by their real agreement provided it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy. a. Absolutely simulated contract b. Relatively simulated contract c. Vitiated contract d. Ratified contract

Relatively simulated contract

Alden offers his specific house to Maine at a selling price of P200,000. However, Maine asks Alden if he can buy it at a price of P50,000. Later, Alden decided to give his specific house to Maine for free. They hugged as a sign of validity of the contract they entered into. What is the status of the contract? a. Perfectly valid b. Voidable c. Unenforceable d. Void

Void

S sold in writing a specific laptop to B at a selling price of P3,000 after B pointed a gun to S threatening to kill him. What is the prescriptive period available to S to file an action for annulment of this voidable contract of sale? a. 5 years b. 4 years c. 6 years d. 10 years

4 years

It refers to the type waiver of warranty against eviction made by the buyer without the knowledge of the risk of eviction. A. Waiver intentionada B. Waiver consciente C. Waiver redhibitoria D. Waiver obligaria

Waiver consciente

On January 1, 2000, Vendor Inc. sold a specific car to Buyer Inc. with payment to be made after two months. The parties agreed that Vendor Inc. shall deliver the car to Depositary Inc. in behalf of Buyer Inc. Depositary Inc. has the obligation to preserve the said car until Buyer Inc. obtains the same. On January 2, 2000, Vendor Inc. actually delivered the car to Depositary Inc. On January 3, 2000, the car was destroyed by a storm while it was in Depositary’s possession. Who shall suffer the risk of loss? A. Buyer Inc. because it is already the owner at the time of loss. B. Depositary Inc. even it exercised ordinary diligence to prevent or minimize the loss during the storm. C. Vendor Inc. because actual possession has not yet been given to Buyer Inc. D. Vendor Inc. because non-payment of the price will result to non-transfer of ownership to Buyer Inc.

Buyer Inc. because it is already the owner at the time of loss.

On February 1, 2018, S sold under contract of sale his specific titled land to B under notarized deed of sale. On March 1, 2018, S sold again the same land to C under another notarized deed of sale. B obtains knowledge of the sale to D and he informs D of the desire to talk but the latter refuses. On April 1, 2018, B registered his adverse claim to Registry of Deeds which annotated such claim. On May 1, 2018, D registered the deed of sale to the Registry of Property. Who has better right? A. B because he is the first buyer and first possessor in good faith. B. D because he is the first registrant in good faith. C. Neither B nor D. D. Both B and D.

B because he is the first buyer and first possessor in good faith.

B purchased a specific car from S for P1,200,000 payable by a downpayment of P600,000 and the balance in 12 equal monthly installments of P50,000 each. A chattel mortgage on the said car was executed to serve as security. B defaulted on the 7th and 8th monthly installments. The chattel mortgage on the car was foreclosed but the auction sale resulted into a deficiency of P100,000. Under Recto Law, what is the remedy of S to recover the deficiency? A. Auction the other properties of B for P100,000. B. Cancel the installment sale. C. File a collection suit for P100,000 against B. D. No other remedy on the deficiency.

No other remedy on the deficiency.

A borrowed P100,000 from B and executed a chattel mortgage on his house and lot as a security for his debt to B. When the principal obligation became due, A did not pay despite demand for payment from B. Which is correct? a. B has no right to foreclose the chattel mortgage because he can sue for collection. b. B has no right to foreclose the chattel mortgage unless A consents to the foreclosure. c. B may foreclose the chattel mortgage because A is estopped from claiming the invalidity of the chattel mortgage over the real property but foreclosure should be made under the procedure of real estate mortgage law. d. B has no right to foreclose the chattel mortgage because the house and lot are not chattels. Thus, the contract of chattel mortgage is null and void

B may foreclose the chattel mortgage because A is estopped from claiming the invalidity of the chattel mortgage over the real property but foreclosure should be made under the procedure of real estate mortgage law

For validity and to bind third persons, where shall chattel mortgage executed on a private motor vehicle be registered? A. Chattel mortgage registry where the mortgagor resides B. Land Transportation Office C. Both A and B D. Neither A nor B

Both A and B

Which is not an essential requisite of contract of chattel mortgage for its validity? A. The mortgagor must be the absolute owner of the personal property mortgaged and must have free disposal of the personal property mortgaged. B. There must be a secured valid principal obligation and in case of its non-payment, the personal property mortgaged may be sold in public auction in satisfaction of the secured obligation. C. The chattel mortgage must be properly registered in chattel mortgage registry. D. The deed of chattel mortgage must be accompanied by affidavit of good faith.

The deed of chattel mortgage must be accompanied by affidavit of good faith

On November 1, 2000, A, B and C executed a contract of partnership whereby A, B and C partners will contribute P100,000 cash, a land and a car on March 1, 2001, respectively. The partners registered the contract of partnership to Securities and Exchange Commission on January 10, 2001. It was agreed in the contract of partnership that the juridical personality of the partnership shall commence on December 1, 2000. When shall the juridical entity or personality of the partnership begin? a. November 1, 2000 b. March 1, 2001 c. December 1, 2000 d. January 10, 2001

December 1, 2000

What is the effect if a partner has undertaken to contribute a sum of money and failed to do so? a. He becomes a debtor to the partnership for the interest and damages from the time he should have complied with his obligation. b. He becomes a debtor to the partnership for the interest and damages from the judicial demand for payment. c. He becomes a debtor to the partnership for the interest and damages from the oral extrajudicial demand for payment. d. He becomes a debtor to the partnership for the interest and damages from the written extrajudicial demand for payment.

He becomes a debtor to the partnership for the interest and damages from the time he should have complied with his obligation.

He refers to a person admitted to all the rights of a limited partner who has died or has assigned his interest in the partnership. a. Assignee of limited partner b. Successor of limited partner c. Heir of limited partner d. Substituted limited partner

Substituted limited partner

N is a dormant partner in ABC partnership that sells home appliances. He has not made his presence felt for 20 years. N purchased 20 wheelbarrows for ABC partnership to sell. A, the managing partner became furious with what N did because it is hard to sell wheelbarrows. What remedy does A have regarding the contract entered by N? A. A can just ignore the contract entered by N because it is unenforceable. B. A has no remedy because the contract entered by N is perfectly valid. C. A can ask for declaration of nullity of the contract. D. A can ask for annulment of the contract.

A can just ignore the contract entered by N because it is unenforceable.

G, E and M are partners in GEM Company with contributions of P10,000, P40,000 and P50,000, respectively. Their agreement shows that they will share in the profits in the profits in the ratio of 2:3:4. During the year, the partnership sustained a loss of P9,000. How shall this partnership loss be divided among the partners? A. Equally at P3,000 each B. G, P900; E, P3,600; and M, P4,500 C. G, P2,000; E, P3,000; and M, P4,000 D. The partners must establish first a loss sharing agreement before the loss may be divided because they failed to have an agreement on the division of loss

G, P2,000; E, P3,000; and M, P4,000

D was a newly admitted partner investing P4,000 in ABC partnership. A, B, and C each contributed P10,000 each. After D's admission, ABC partnership borrowed 40,000 from E. Their operations became not profitable and they decided to liquidate their liability to E. How much can D get reimbursement from A,B, and C respectively? A. P265.705 each B. P500 each C. P300 each D. P200 each

P265.705 each

ABC Limited Partnership are formed by A and B as general partners and C as limited partner. ABC Limited Partnership became bankrupt and unpaid liabilities to partnership creditors amounted to P30,000. Which is correct? A. A, B and C are liable to the partnership creditors in the amount of P10,000 each but C may ask for reimbursement of P5,000 each from A and B. B. A and B are the only persons liable to the partnership creditors in the amount of P15,000 each. C. The partnership creditors may collect P30,000 from either A or B. D. The partnership creditors may collect P30,000 from either A or B or C.

A, B and C are liable to the partnership creditors in the amount of P10,000 each but C may ask for reimbursement of P5,000 each from A and B.

A and B are partners in AB Partnership operating a laundry business. While in the course of his duty as the managing partner of the laundry business, B used a polo-shirt that one of his customers owned. While using the said polo-shirt without the knowledge of Partner A, a food dropped on the polo leaving a stain. Upon demand of the customer for damages, who shall be liable? a. Partner B only because he used the polo-shirt without the consent of A. b. Partner B and AB Partnership only, solidarily c. Partner A, Partner B and AB Partnership, solidarily d. AB Partnership then Partner A and Partner B, subsidiarilly

Partner A, Partner B and AB Partnership, solidarily

A, B and C are partners in ABC Pawnshop Partnership. A customer borrowed P10,000 from ABC Partnership and then pledged his specific watch as collateral. A obtained from the storage cabinet of the Pawnshop the said pledged watch without the knowledge of B and C and used it in a party. During the party, the said pledged watch was stolen by a thief from A. Upon demand of the customer for damages, who shall be liable? a. Partner A only because he used the watch without the knowledge of Partner B and Partner C b. Partner A and ABC Partnership only, solidarily c. Partner A, Partner B, Partner C and ABC Partnership, solidarily d. ABC Partnership then Partner A, Partner B and Partner C, subsidiarially

Partner A, Partner B, Partner C and ABC Partnership, solidarily

A, B and C are partners in ABC Trust Fund Partnership. A receives cash from a client for purposes of trust fund management. Partner A misappropriated the fund given by such client. Which is correct? a. If A is a managing partner, he cannot be held liable if he uses the money for partnership purposes. b. ABC Partnership, Partner A, Partner B and Partner C may be held solidarily liable by third parties whom cash was misapplied by Partner A. c. Only Partner A and ABC Partnership are solidarily liable to the client. d. ABC Partnership is the only person liable to the client.

ABC Partnership, Partner A, Partner B and Partner C may be held solidarily liable by third parties whom cash was misapplied by Partner A.

In which of the following corporate acts is appraisal right a.k.a. right to demand the payment the fair value of his shares of stocks available to a dissenting stockholder? A. Merger or Consolidation of Corporations B. Increase or decrease of authorized capital stock C. Approval of management contract D. Incurring bond indebtedness

Merger or Consolidation of Corporations

Which of the following corporations is not allowed to issue no-par value common shares? A. Mining company B. Educational institution C. Trust company D. Oil company

Trust company

Which of the following corporations is not allowed to be incorporated as a close corporation? A. Stock exchange B. Review center C. Business process outsourcing D. Manpower agency

Stock exchange

In which of the following corporate acts are non-voting preferred stocks not allowed to vote? A. Declaration of stock dividends B. Merger or consolidation of corporations C. Incurring or creating bond indebtedness D. Sale, pledge or mortgage of all or substantially all the assets of the corporation

Declaration of stock dividends

What is the required vote for declaration of cash dividends in a stock corporation? A. Approval by at least majority vote of the board of directors and ratification by stockholders representing at least 2/3 of the outstanding capital stock. B. Approval by stockholders representing at least 2/3 of the outstanding capital stock. C. Approval by at least majority vote of the board of directors and ratification by stockholders representing at least majority of the outstanding capital stock. D. Approval by at least majority vote of the board of directors.

Approval by at least majority vote of the board of directors.

What is the required vote for declaration of stock dividends in a stock corporation? A. Approval by at least majority vote of the board of directors and ratification by stockholders representing at least 2/3 of the outstanding capital stock. B. Approval by stockholders representing at least 2/3 of the outstanding capital stock. C. Approval by at least majority vote of the board of directors and ratification by stockholders representing at least majority of the outstanding capital stock. D. Approval by at least majority vote of the board of directors.

Approval by at least majority vote of the board of directors and ratification by stockholders representing at least 2/3 of the outstanding capital stock.

What is the maximum amount to be granted as compensation to board of directors of a corporation in such capacity as directors? a. 10% of the net income of corporation after tax of the current year b. 10% of the net income of corporation before tax of the current year c. 10% of the net income of corporation after tax of the immediately preceeding year d. 10% of the net income of corporation before tax of the immediately preceeding year

10% of the net income of corporation before tax of the immediately preceeding year

Which of the following attributes is not common to both a private corporation and a commercial partnership? A. Succession B. Income tax rate C. Juridical personality D. Can act though agents only

Succession

Which of the following entities cannot be organized as a stock corporation? A. Bank B. Close corporation C. Religious corporation D. Educational corporation

Religious corporation

Which of the following is not part of legal capital in a stockholder’s equity? A. Paid-in capital stock B. Retained earnings C. Premium on capital stock D. Donated capital

Retained earnings

Which corporation may issue no-par value share? A. Banks B. Insurance companies C. Public utilities D. None of the above

None of the above

In which of the following is non-voting preferred stock not allowed to vote? A. Filling of vacancy in the board of directors B. Amendment of articles of incorporation C. Increase or decrease in authorized capital stock D. Dissolution of a corporation

Filling of vacancy in the board of directors

What is the required vote for the amendment of articles of incorporation that would shorten the corporate term? A. At least majority vote of the board of directors/members and at least 2/3 vote or written asset of the outstanding capital stock/members B. At least majority vote of the board of directors/trustees and at least ¾ vote of the outstanding capital stock/members C. At least majority vote of the board of directors/members and at least 2/3 ratification vote of the outstanding capital stock/members D. At least majority vote of the board of directors/members and at least 1/3 vote of the outstanding capital stock/members

At least majority vote of the board of directors/members and at least 2/3 ratification vote of the outstanding capital stock/members

Which right is removed from a delinquent subscriber/stockholder? A. Right to vote B. Right to dividend C. Both A and B D. Neither A nor B

Right to vote

In which of the following cases is appraisal right not available? A. Any amendment to the articles of incorporation that changes or restricts the rights of any stockholder or class of shares. B. Sale, pledge or mortgage of all or substantially all the assets or properties of the corporation. C. Investment of funds in another corporation or business for a purpose other than its primary purpose or secondary purpose D. Expiration of corporate term

Expiration of corporate term

Which of the following may be organized as a close corporation? A. Mining companies B. Oil companies C. Banks D. None of the above

None of the above

In nothing is stated in the corporate by-laws or in the subscription agreement, what is the interest rate on subscribed shares? a. 6% b. 12% c. 9% d. 24%

It is a corporation both in fact and in law. Its juridical personality is not subject to the direct attack by the state. A. De jure corporation B. De facto corporation C. Ostensible corporation or corporation by estoppel D. Corporation by prescription

De jure corporation

It is a corporation in fact but not in law. Its juridical personality is subject to direct attack by the state through a special civil action of quo warranto proceedings. A. De jure corporation B. De facto corporation C. Ostensible corporation or corporation by estoppel D. Corporation by prescription

De facto corporation

It refers to the natural right of stockholders to subscribe to all issues or disposition of shares of any class in proportion to their present shareholdings in order to preserve their ownership interests in the corporation. A. Appraisal right B. Preemptive right C. Right of first refusal D. Right of first option

Preemptive right

30% of the company want to elect 2 directors, while 70% of the company want to elect 5 directors. Assuming the corporation has 100 shares and the owners of 70% tried to elect all the 5 directors. How many will be elected from the majority stockholders (70% of the company) and from the minority stockholders (30% of the company)? A. 4 from the majority stockholders and 1 from the minority stockholders B. 3 from the majority stockholders and 2 from the minority stockholders C. 5 from the majority stockholders and none from the minority stockholders D. 2 from the majority stockholders and 3 from majority stockholders

3 from the majority stockholders and 2 from the minority stockholders

What is the required vote for the increase of authorized capital stock of a corporation? A. At least majority vote of Board of Directors and approval by at least 2/3 vote of stockholders and compliance of minimum 25% subscription and minimum 25% of paid up B. At least 2/3 of Board of Directors and approval by at least 2/3 vote of stockholders and compliance of minimum 25% subscription and minimum 25% of paid up C. At least 2/3 vote of stockholders and compliance of minimum 25% subscription and minimum 25% of paid up D. At least majority vote of Board of Directors

At least majority vote of Board of Directors and approval by at least 2/3 vote of stockholders and compliance of minimum 25% subscription and minimum 25% of paid up

t refers to a stipulation in a contract of pledge or contract of mortgage whereby the thing pledged or mortgaged shall automatically become the property of the creditor in the event of non-payment of the secured debt within the term fixed. a. Pactum creditarium b. Pactum commissorium c. Pactum debitarium d. Pactum crematorium

Pactum commissorium

Which of the following extinguishes both the contract of pledge and its secured contract of loan? a. Return by the pledgee to the pledgor of the thing pledged. b. Renunciation or abandonment in writing by the pledgee of the contract of pledge. c. Appropriation by the pledgee of the thing pledgee in case of default by the debtor in the payment of contract of loan. d. Sale of the thing pledged in public auction by the pledgee for net proceeds less than the amount of the loan.

Sale of the thing pledged in public auction by the pledgee for net proceeds less than the amount of the loan.

It refers to the right of the mortgagor to repurchase the property within a certain period after it was sold in public auction for the payment of the mortgage debt. a. Equity of redemption b. Right of redemption c. Conventional redemption d. Right of preemption

Right of redemption

What is the nature of limited partner’s interest? a. Assignable b. Waivable c. Non-transferrable d. Irreplaceable

Assignable

Which of the following will not automatically dissolve a general partnership? a. Civil interdiction of a partner b. Insanity of a partner c. Death of a partner d. Insolvency of a partner

Insanity of a partner

Which of the following has no right to inspect the partnership books? a. Nominal partner b. Silent partner c. Secret partner d. Dormant partner

Nominal partner

What is the proper classification of an industrial partner? a. General partner b. Limited partner c. Dormant partner d. Nominal partner

General partner

He is a partner who contributed not only money and property but also services, labor or industry. a. Capitalist partner b. Industrial partner c. Capitalist industrial partner d. Nominal partner

Capitalist industrial partner

Which of the following is not an attribute of a private corporation? a. It has right of succession. b. It is created by operation of law. c. It does not possess any power except those provided by law, implied and incident to its existence. d. Its owners are liable pro-rata and subsidiarily up to the extent of their separate assets.

Its owners are liable pro-rata and subsidiarily up to the extent of their separate assets.

This is the test enshrined in the Corporation Code of the Philippines to determine the nationality of a private corporation. Under this test, the nationality of the corporation is determined by the law of the country that created it. a. Control test b. Place of incorporation test c. Grandfather rule test d. Legality test

Place of incorporation test

It refers to a corporation that is exempted from filing articles of incorporation to SEC before it obtains juridical personality. a. De jure corporation b. De facto corporation c. Ostensible corporation d. Corporation by prescription

Corporation by prescription

In which of the following corporate acts is non-voting preferred stocks allowed to participate? a. Approval of management contract b. Election of directors c. Increase or decrease of capital stock d. Granting compensation to directors

Increase or decrease of capital stock

When does a private corporation formed under the Corporation Code obtain its corporate existence or juridical personality? a. From the date of meeting of minds of the incorporators of the prospective corporation b. From the date of submission of the articles of incorporation to SEC c. From the date of execution of the articles of incorporation by the incorporators d. From the date of issuance by SEC of the certificate of registration under SEC's official seal

From the date of issuance by SEC of the certificate of registration under SEC's official seal

What is the term of office of the director of a stock corporation? a. One year b. Two years c. Three years d. Five years

One year

Which of the following corporate officer is required to be a director of a stock corporation? a. Corporate president b. Corporate secretary c. Corporate treasurer d. All of the above

Corporate president

Which reason of vacancy in the board of directors of a stock corporation may allow the remaining board of directors with quorum to validly fill up the vacancy? a. Disqualification b. Removal c. Expiration of term d. Increase in sits

Disqualification

Which of the following is not a qualification of director of a private corporation? a. He must be a capacitated person. b. He must be an incorporator of the corporation. c. He must be a stockholder of the corporation. d. He must be of legal age.

He must be an incorporator of the corporation.

They are powers of the corporation that are necessary for the exercise of the provided powers of the corporation. a. Express powers b. Implied powers c. Incidental powers d. Discretionary powers

Implied powers

It refers to act committed outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the express, implied and incidentals powers of the corporation. a. Unconstitutional act b. Immoral act c. Ultra vires act d. Illegal act

Ultra vires act

It refers to the common law right of shareholders to subscribe to all issues or disposition of shares of any class in proportion to their present shareholdings in order to preserve their ownership interest in the corporation unless properly denied in the articles of incorporation. a. Right of first refusal b. Preemptive right c. Appraisal right d. Right of first option

Preemptive right

It refers to the agreement whereby stockholders (trustors) of a stock corporation confers upon a trustee the right to vote and other rights pertaining to the shares and it should not be used to circumvent the law against monopolies and illegal combinations in restraint of trade or for fraud purposes? a. Proxy agreement b. Agency agreement c. Consolidation agreement d. Voting trust agreement

Voting trust agreement

According to SEC ruling, what is the nature of subscription contract in a corporation? a. Divisible contract b. Indivisible contract c. Gratuitous contract d. Innominate contract

Indivisible contract

Which of the following is not a valid consideration for issuance of shares of stocks with corresponding certificate of stock? a. Future services b. Unrestricted retained earnings c. Convertible preference shares d. Previously incurred corporate loans payable

Future services

It refers to a suit brought by one or more stockholders or members in the name and on behalf of the corporation to redress wrongs committed against it or to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue or are the ones to be sued or hold control of the corporation. a. Derivative suit b. Individual suit c. Representative suit d. Corporate suit

Derivative suit

Bob obliged himself to give to Job his car onFeb 15, 2022. There was no delivery until Feb20, 2022 when the garage of Bob’s house collapsed due to a strong typhoon and the car was totally destroyed. Is Bob still liable? A. No, even if Bob was already in default, he could plead impossibility of performance. B. Yes, the obligation to deliver the car is changed to pay the equivalent value because Bobby is in legal delay. C. No, because there was no demand by Job to deliver the car and the specific object was lost due to fortuitous event. The obligation is extinguished. D. Yes, because the contract is perfected.

No, because there was no demand by Job to deliver the car and the specific object was lost due to fortuitous event. The obligation is extinguished.

Which of the following statements is true? A. A future event may be a period or a condition. B. The debtor losses the right to the period if he does not give any security to the creditor. C. The condition to do an impossible thing does not render the obligation void. D. In alternative obligations, the right to select which of the prestation shall be delivered belongs to the creditor, unless expressly given to the debtor

A future event may be a period or a condition

Bogs sold his house and lot to Tess reserving his right to repurchase the same within 5 years from the date of the execution of their agreement. The sale together with the right to repurchase was registered with the Register of Deeds. Two years after the execution of the sale, Tess sold the same lot to Conrad who was not aware that Bogs reserved his right to repurchase the lot. In this case: A. The sale by Bogs to Tess is subject to a suspensive condition. B. The sale by Tess to Conrad is subject to a suspensive condition. C. The sale by Tess to Conrad is void D. The sale by Bogs to Tess is absolute

The sale by Tess to Conrad is subject to a suspensive condition.

During the pendency of the criminal case against a thief, the car he stole was lost through an accidental fire. Prior to the accident, several demands were made for the owner to receive the return of the car, but the owner refused to receive the same without any reasonable ground. This will result to: A. extinguishment of the obligation because an accidental fire is always a fortuitous event. B. extinguishment of the obligation because the owner is guilty of delay C. extinguishment of the civil obligation because the value of the car will be converted into the number of days the thief will serve in prison. D. liability of the accused to pay the price of the car as the obligation will not be extinguished because the obligation proceeds from a criminal offens

extinguishment of the obligation because the owner is guilty of delay

Kiko offered to sell his mobile phone to Bong for P50,000. Bong offered to buy the mobile phone for P38,000 but was rejected by Kiko. When Bong was about to leave, Kikocalled him and said he is now willing to sell for P38,000. In this case: A. Bong is obligated to pay P38,000 B. Bong has no obligation to buy the mobile phone C. The contract of sale was perfected. D. The contract of sale must be in writing to be enforceable

Bong has no obligation to buy the mobile phone

Which of the following is true? A. There is relative simulation of contracts when parties executed a document intentionally deceiving others by producing the appearance of a contract that really does not exist. B. A contract of sale fraudulently made as a contract of mortgage may be cured by reformation C. There is absolute simulation of contracts when the parties executed a document intentionally deceiving others by producing the appearance of a contract which is different from the true agreement. D. Ratification will cure the defect of simulated contracts may it be absolute or relative simulation

A contract of sale fraudulently made as a contract of mortgage may be cured by reformation

The following contracts are not perfected until the delivery of the object of the obligations, except A. Barter C. Commodatum B. Deposit D. Pledge

Barter

Which of the following obligations is immediately due and demandable? A. Obligation with a suspensive condition B. Obligation in diem C. Obligation ex die D. Obligation payable as soon as possible

Obligation in diem

stallholders at a monthly rental of P500? A. Unenforceable B. Rescissible C. Voidable D. Void

Void

Which of the following contracts is a real contract which perfected by the delivery of the subject matter of the contract? A. Contract of sale B. Contract of partnership C. Contract of pledge D. Contract of real estate mortgage

Contract of pledge

A, an insane sold his specific laptop to B at a price of P10,000. After obtaining knowledge of the contract, C, a childhood friend of A, filed an action for annulment of contract of sale before regional trial court. What principle of contract is violated by the filing of such action? A. Mutuality of contract B. Relativity of contract C. Liberality of contract D. Legality of contract

Relativity of contract

A sold in writing an authentic Coach Bag at a price of P10,000 to B. At the time of delivery of the bag, A delivered a counterfeited Coach Bag to B with a price of P7,400 only. What is the proper legal remedy on the part of B? A. Action for rescission of rescissible contract by reason of lesion of more than ¼ the value of the authentic bag B. Action for damages for breach of contract by reason of fraud in the performance of contract C. Action for annulment of voidable contract by reason of dolo causante. D. Action for declaration of nullity of contract by reason of illegality of contract

Action for damages for breach of contract by reason of fraud in the performance of contract

A borrowed P10,000 from B. B filed an action to collect a sum of money against A which resulted to the issuance of writ of attachment. The cellphone of A is the first to be attached by the sheriff. Afterwards, A orally sold and delivered his laptop to C at a price of P5,000. Payment of the price will happen after one week from the perfected of contract. What is the status of contract of sale of laptop? A. Rescissible B. Voidable C. Perfectly valid D. Unenforceable

Rescissible

Under the New Civil Code of the Philippines, what is the moment of perfection of contract entered into through telegram? A. The contract is perfected from the moment the acceptance is declared or made. B. The contract is perfected from the moment the offeree transmits the notification of acceptance to the offeror. C. The contract is perfected from the moment that the notification of acceptance is in the hands of the offeror. D. The contract is perfected from the moment the offeree’s acceptance comes to the knowledge of the offeror

The contract is perfected from the moment the offeree’s acceptance comes to the knowledge of the offeror

S sold a residential condominium unit to B at an instalment price of P6,000,000 payable in 50 years at a monthly rental of P10,000 per month. After payment of several instalments totalling P1,200,000, B defaulted in the payment of remaining instalments which resulted to the cancelation of the contract of sale after the lapsing of the grace period prescribed by law. What is the amount of cash surrender value to be received by B from S as a result of cancellation? A. P600,000 B. P900,000 C. P840,000 D. P960,000

P900,000

In which of the following instances are the goods still in transit which will allow the unpaid seller to exercise his right of stoppage in transitu in case of insolvency of the buyer? A. If the buyer obtains delivery of the goods before arrival at the appointed destination. B. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival of the goods at their appointed destination. C. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent. D. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.

If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.

S sold his lot with an area of 100 SQM to B at a selling price of P1,000 per SQM. After delivery of the lot, B discovered that the actual area is only 91 SQM. In the absence of other relevant facts, what is the legal remedy available to B? A. B may ask for proportionate reduction of price and must pay P91,000 only. B. B can ask for cancellation of the contract of sale. C. Either A or B. D. Neither A nor B.

B may ask for proportionate reduction of price and must pay P91,000 only.

A, B, and C are co-owners of a rural lot with an area of 1,000 SQM in the ratio of 6:1:3, respectively. The co-owned lot is bounded by farm lots of D and E with an area of 50 SQM and 75SQM, respectively. A sold his share of the co-owned lot to F. Who shall have the preferred right to repurchase the lot sold by A to F? A. B because his share in the co-owned lot is smaller. B. B and C with an area of 150 SQM and 450 SQM, respectively C. D because his adjoining rural lot has smaller area. D. E because his adjoining rural lot has larger area.

B and C with an area of 150 SQM and 450 SQM, respectively

What is the prescriptive period of the right to file an action based on breach of warranty of sale of immovable against non-apparent and unregistered burden or servitude? A. 40 days from the date of contract of sale or from the discovery of burden B. 6 months from the date of contract of sale or from the discovery of burden C. 1 year from the date of contract of sale or from the discovery of burden D. 3 days from the date of contract of sale or from the discovery of burden

1 year from the date of contract of sale or from the discovery of burden

B rented the specific truck of S. After the end of the contract, S sold the property to B. As a result of sale, B continues to have possession of the property. What type of constructive delivery is present in this contract of sale? A. Traditio clavium B. Traditio longa manu C. Traditio brevi manu D. Traditio constitutum possessorium

Traditio brevi manu

A borrowed P100,000 from B and mortgaged his house to secure the payment of the loan. The contract of real estate mortgage is not notarized and not registered with Registry of Deeds. The contract of real estate mortgage provides that A is prohibited from selling the mortgaged house and in case of default of A at the maturity date of the loan, B will become the automatic owner of the mortgaged house. Which of the following statements is correct? A. A may still sell the house to third person despite the prohibition in the contract of real estate mortgage. B. B becomes the owner of the mortgaged house upon default of A. C. The contract of real estate mortgage is null and void because of the stipulation of pactum commissorium which is contrary to law and public policy. D. The contract of real estate mortgage is unenforceable because it is not in public document and not registered with Registry of Deeds

A may still sell the house to third person despite the prohibition in the contract of real estate mortgage.

P borrowed P1,000 from C. P pledged and delivered his specific cellphone to C as collateral for the loan. The contract of pledge provides that C may recover the deficiency as a result of foreclosure sale. P failed to pay his obligation at the maturity date which prompted C to sell the pledged cellphone at public auction. The cellphone was sold at a price of P900. Which of the following statements is correct? A. The contract of pledge is extinguished but the contract of loan is extinguished up to P900 only. B. Pledgee P may still recover the deficiency of P100 because there is stipulation to that effect. C. The contract of pledge is not extinguished. D. Both contract of pledge and contract of loan are extinguished by the public sale.

Both contract of pledge and contract of loan are extinguished by the public sale.

Under Old and Revised Corporation Code, which corporate officer is required to be resident-citizen of the Philippines? A. President, Secretary and Treasurer B. Secretary and Treasurer only C. Secretary only D. None of the above

Secretary only

Under Revised Corporation Code, what is the period for formal organization of a newly incorporated corporation to prevent its automatic dissolution? A. Within two years from the date of its incorporation B. Within three years from the date of its incorporation C. Within four years from the date of its incorporation D. Within five years from the date of its incorporation

Within five years from the date of its incorporation

Under Revised Corporation Code, which corporate officer is required to be resident of the Philippines? A. President, Secretary and Treasurer B. Secretary and Treasurer only C. Secretary only D. None of the above

Secretary and Treasurer only

As a general rule, what is the maximum surplus profits that can be retained by a stock corporation? A. 50% of paid up capital B. 100% of paid up capital C. 50% of authorized capital stock D. 100% of authorized capital stock

100% of paid up capital

Which of the following matters must be provided in the Articles of Incorporation of the Corporation? A. Denial of preemptive right B. Quorum of board of directors C. Provision for compensation of directors D. Entries to be made in the stock and transfer book

Denial of preemptive right

It refers to the right of a dissenting stockholder to demand the payment of the fair market value of his stocks in case he dissents in particular corporate acts provided by the Corporate Code. A. Preemptive right B. Appraisal right C. Right of first refusal D. Protective right

Appraisal right

What is the required vote for the revocation of the power given to the Board of Directors to amend the By-Laws of the Corporation? A. At least majority vote of the outstanding capital stock B. At least 2/3 vote of the outstanding capital stock C. At least majority vote of Board of Directors and ratification by at least majority vote of the outstanding capital stock D. At least majority vote of Board of Directors and ratification by at least 2/3 vote of the outstanding capital stock

At least majority vote of the outstanding capital stock

Which of the following companies may be incorporated as a close corporation? A. Mining companies B. Oil companies C. Stock exchange D. Review school

Review school

Fernando, Filoteo, Fortunato and Fulgencio are partners in the firm F4 Enterprises which is engaged in the trading of fertilizers. Fernando contributed P50,000; Filoteo, P30,000 ; and Fortunato, P20,000. Fulgencio is an industrial partner and manages the partnership. Based on the foregoing facts, which of the following statements is false? A. Fernando may engage in the business of trading car spare parts without the consent of the other partners. B. Filoteo may be validly exempted from losses incurred by the partnership by agreement of the partners. C. Fulgencio may not engage in the car repair business without the consent of his co-partners. D. Fulgencio is exempted from losses although there is no agreement among the partners

B. Filoteo may be validly exempted from losses incurred by the partnership by agreement of the partners.

Willy, Olive, and Wency agreed to form a limited partnership with Willy and Olive as general partners contributing P50,000 each , and Wency as limited partner contributing P100,000. The partnership which is to engage in the trading of garments was named "WOW Garments Co. Limited" as indicated in the certificate signed and sworn to by the partners before a notary public. However, the certificate was not filed with the Securities and Exchange Commission. In the meantime, the partners already began operating the business and transacting with third persons. Which is correct? A. The partnership entered by Willy, Olive and Wency is void. B. The partnership will be considered a general partnership. Accordingly, all partners will be liable with their separate property after the exhaustion of partnership assets. C. The partnership will be considered a limited partnership as indicated in its name. Only Willy and Olive will be liable with their separate property after the exhaustion of partnership assets. D. Willy Olive and Wency will be considered separately as sole proprietors with each one having a capital equivalent to their respective contributions.

The partnership will be considered a general partnership. Accordingly, all partners will be liable with their separate property after the exhaustion of partnership assets

J, I, W, E and L are partners in JIWEL Company, Ltd. J, I and W are general partners, E is a general-limited partner, while L is a limited partner. Based on the foregoing information, which of the following statements is false? A. J, I and W may be held liable with their separate property after the exhaustion of partnership assets. B. E may participate in the management of the partnership. C. E may not be held liable with her separate property of partnership debts after the exhaustion of partnership assets. D. L may not be held liable with her separate property for partnership debts after the exhaustion of partnership assets.

E may not be held liable with her separate property of partnership debts after the exhaustion of partnership assets.

B, A, R and K are partner in BARK Enterprises, a pet shop, with B contributing P50,000; A, P20,000; and R, P30,000. K is an industrial partner and manages the partnership. Based on the foregoing information, which of the following statements is false? A. B may engage in the buying and selling of rice without the consent of the other partners. B. K may engage in the buying and selling of rice without the consent of the other partners. C. K is not liable for the losses of the partnership. D. K may be held liable with her separate property for partnership debts after the exhaustion of partnership assets

K may engage in the buying and selling of rice without the consent of the other partners.

L, a limited partner in Bellevue Company, Ltd. received the amount of P100,000 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 which arose before L received the return of his contribution and assets of only P90,000 after such return of contribution. Which is correct? A. L is bound to bring back to the partnership the amount of P100,000 plus interest thereon. B. L is bound to give the partnership the amount of P220,000 plus interest thereon. C. L is bound to give the partnership P130,000 plus interest. D. L is not bound to return to the partnership any amount because he received the return of his contribution pursuant to a contractual stipulation.

L is bound to bring back to the partnership the amount of P100,000 plus interest thereon.

Which of the following claims shall be paid last in the liquidation of general partnership? A. Those owing to partners in respect of profits. B. Those owing to the creditors other than partners. C. Those owing to partners in respect of capital. D. Those owing to partners other than capital and profits

Those owing to partners in respect of profits.

Which right is not available to an assignee of a limited partner? A. The receipt of the assignor's share of the profits. B. The receipt of the assignor's other compensation by way of income. C. The return of the assignor's contribution. D. The inspection of partnership book or account of partnership transactions.

The inspection of partnership book or account of partnership transactions.

A partner's interest in the partnership is his share of the profits and surplus which he may assign to a third person. Which of the following statements concerning such right is correct? A. The conveyance of a partner's interest will cause the dissolution of the partnership. B. The assignee becomes a partner. C. The assignee has a right to interfere in the management of the partnership business. D. The assignee has the right to receive the profits which the assigning partner would otherwise be entitled to.

The assignee has the right to receive the profits which the assigning partner would otherwise be entitled to.

Which of the following is an automatic ground for dissolution of general 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

A partner is civilly interdicted

T owes P3,000 to CHAMP Company, a partnership composed of C, H, A, M and P, with M as the manager who is authorized to collect all credits of the firm. He also owes C the amount of P6,000. Both debts are already due. T gives P3,000 to C in payment of his debt to the latter. C thus issues his own receipt. Which is correct? A. Payment will be applied proportionately to the two credits at P1,000 for C' credit and P2,000 for CHAMP Company's credit. B. Payment will be applied equally to the two credits. C. Payment will be applied in its entirety to C' credit. D. Payment will be applied in its entirety to CHAMP Company's credit

Payment will be applied in its entirety to C' credit.

MAGIC Company is a partnership composed of M, A, G, I and C, with M as manager who is authorized to collect the credits of the partnership. T owes M P4,000 which is due on December 10, 2050. She also owes MAGIC Company P6,000 which is due on December 20,2050. On December 15, 2050, T tendered payment in the amount of P4,000 to M in payment of her debt to the latter. M issued her own receipt acknowledging the payment. Which is correct? A. The payment will be applied proportionately to the credits of MAGIC Company and M in the amount of P1,600 and P2,400, respectively. B. The payment will be applied in its entirety to M's personal credit. C. The payment will be applied in its entirety to MAGIC Company's credit. D. The payment will be applied equally to the two debts of T

The payment will be applied in its entirety to M's personal credit

D, E, A and R are partners in DEAR Company with D as manager. T owes DEAR Company P5,500 and D, in D's personal capacity, P4,500. T's debt to D is secured by a pledge of her diamond ring. Both debts are already due. T pays P4,500 to D and tells her that the same is in payment of her debt to D. Thus, D issues her own personal receipt. Which is correct? A. The payment of P4,500 will be applied to the partnership credit at P2,475 and to D's credit at P2,025. B. The payment will be applied entirely to D's credit. C. The payment will be applied as follows: P5,500 to partnership and the balance to D in the amount of P1,000. D. T, D and DEAR Company will have to agree as to which credit the payment shall apply.

The payment will be applied entirely to D's credit.

TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has the following partners with their respective contributions: T-P10,000; R-P20,000; I-P30,000; U-P40,000; M-P100,000; P-P200,000 and H-P300,000. No one was appointed as manager of the partnership. In the course of the operation of the partnership, T proposed to buy car spare parts from Dominion Motors but his proposal was opposed by R. When the voting took place, M abstained, I and U sided with T, while P and H sided with R, which is correct? A. None will prevail because the voting was equal. B. The group of R, P and H will prevail because they own the controlling interest. C. None will prevail because no one was appointed as manager in the partnership. D. The partners will have to appoint a manager in order to resolve the conflict.

The group of R, P and H will prevail because they own the controlling interest

MARK Company is a partnership engaged in the trading business with M, A, R and K as partners. M, A and R are capitalist partners, contributing P100,000; P60,000 and P40,000, respectively. K is an industrial partner. The partners have stipulated that M shall not be liable for partnership liabilities. After three years of continued losses, the partnership incurred liabilities of P200,000 at which time its assets had dwindled to P140,000. After partnership assets have been exhausted, partnership creditors may go after the separate assets of: A. All the partners B. M, A and R only C. A, R and K only D. A and R only

All the partners

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 partnership 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 ever if there was not stipulation. D. Obligations of the partnership incurred before his admission if there was a stipulation; and those incurred after his admission even if there was no stipulation.

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.

T is indebted for P5,000 to MACE Trading Company, a partnership managed by M to whom T also owes P10,000. The two debts which are both demandable are unsecured. T remits P4,500.00 to M in payment of his debt to him Accordingly, M issues a receipt for his own credit. To which credit should the payment be applied? A. To M's credit because the payment made by T is intended for his debt to M who issues his own receipt. B. To both the partnership credit and M's credit proportionately at P1,500.00 and P3,000.00, respectively. C. To M's credit because its amount is greater than that of the partnership credit. D. To the partnership credit because the managing partner should not prefer his own interest to that of the partnership

To both the partnership credit and M's credit proportionately at P1,500.00 and P3,000.00, respectively

D borrowed P100,000 from C and entered into a chattel mortgage involving his land to secure the payment of his loan. D failed to pay the loan at maturity date. Which of the following statements is correct? A. The contract of chattel mortgage is null and void in so far as the contracting parties are concerned because the subject matter is a land. B. C cannot foreclose the chattel mortgage over the land because the subject matter must be a movable property. C. C may still foreclose the chattel mortgage on the land on the basis of doctrine of estoppel. D. Third person directly affected by the contract of chattel mortgage is not allowed to file an action for declaration of nullity because of relativity of contract

C may still foreclose the chattel mortgage on the land on the basis of doctrine of estoppel

Under Revised Corporation, which corporation elect a compliance officer? A. Corporation vested with public interest B. Close corporation C. Family owned corporation D. Closely held coporation

Corporation vested with public interest

To whom shall the compliance officer report directly? A. President of the corporation B. Chairman of the board of directors C. Independent director D. Chairman of the audit committee

Chairman of the board of directors

Who shall be the chairman of the audit committee of a corporation? A. Chairman of the Board of Directors B. Independent director C. President of the Corporation D. Secretary of the Corporation

Independent director

It refers to an executive committee with the responsibility to assist the Board of Directors in the performance of its oversight responsibility for the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and regulations. A. Finance committee B. Operation committee C. Audit committee D. External committee

Audit committee

How many independent directors must be present in a corporation covered by Revised Code of Corporate Governance? A. One independent director B. Two independent directors C. Three independent directors D. Four independent directors

Two independent directors

What is the required vote for the removal of a director of a stock corporation? A. At least 2/3 vote of the stockholders with voting rights B. At least majority of the stockholders with voting rights C. At least majority vote of the directors and approval by at least 2/3 vote of the stockholders with voting rights. D. At least majority vote of the directors and approval by at least majority vote of the stockholders with voting rights

At least 2/3 vote of the stockholders with voting rights

He refers to a partner who is not known to be a partner and does not participate in the management of the partnership. A. Silent partner B. Secret partner C. Dormant partner D. Ostensible partner

Dormant partner

An ____ of partnership interest does not become a partner until and after the acceptance of all the other partners

assignee

A partnership for a _______ is automatically dissolved upon fulfilment of said undertaking

particular undertaking

When there are immovable properties contributed, there must be an ____ and the ______ must be executed. Otherwise, the partnership is void.

inventory public instrument

Non-registration of the partnership, when required, ______ the partnership

does not invalidate

An ____ cannot be liable for additional capital contributions if needed by the partnership.

industrial partner

If a _____ refuses to contribute additional capital when needed, his or her interest may be bought out by the other partners willing to contribute additional capital.

capitalist partner

When an industrial partner engages in any other business, he may be ___ from the partnership.

excluded

A ___ who engages in the same business, may only be made to account for the profits earned

capitalist partner

While an industrial partner cannot be made liable for any losses, he may be held liable for partnership debts to partnership creditors with ____ from the capitalist partners.

right of reimbursement

A limited partner can extend a loan to the limited partnership, but the limited partnership cannot secure said loan using partnership property

When a limited partner participates in the management of the limited partnership, he becomes liable as a general partner, but he does not become entitled to the rights of a general partner

A managing partner whose credit against a debtor is more onerous to the debtor than the debtor’s debt to the partnership, may apply the entire payment made by the debtor in his name, should the debtor elect his right to apply it wholly to his debt to the managing partner

In case illegal partnership, the capital contributed shall be returned to the contributing partner, but the proceeds of the partnership shall be escheated in favor of the ___.

State

A substituted limited partner does not become a limited partner until and after the certificate of limited partnership is amended.

An oral sale of large cattle is ____.

VOID

A deed of sale where the consideration had not in fact been paid is a ____.

void contract of sale

Inadequacy of price does not invalidate a sale unless such inadequacy is so gross that it is unconscionable or shocking to the senses of men or to the judicial sensibilities of the court.

The right of redemption of a ____ defeats the pre-emptive right of an adjacent landowner

co-owner

If the redemption period is “after 10 years from date of sale”, it is a void stipulation and considered as if not written. Hence, the period shall be ____.

4 years

When an unpaid seller exercises his or her _____, the buyer shall be liable for any deficiency. But in case of profit, it shall inure to the benefit of the unpaid seller.

right of resale

In the absence of a principal contract of loan, no contract of sale can be construed as an

equitable mortgage

In case of eviction, the vendor shall be liable to the vendee only for the value of the thing sold at the time of eviction in which of the following cases? a. Where there is waiver consciente. b. Where there is waiver intencionada. c. When the vendor was in bad faith and there was stipulation exempting the vendor from liability in case of eviction. d. When the vendor was in bad faith and there was no stipulation exempting the vendor from liability in case of eviction

Where there is waiver consciente.

Mr. Seller offered to sell to Mr. Buyer, a parcel of land for P5 million. Because the latter could not make up his mind, Mr. Seller gave him thirty (30) days within which to decide. a. Seller may always withdraw the offer before 30 days. b. Seller can withdraw the offer prior to acceptance by Mr. Buyer. c. Seller cannot withdraw before the lapse of 30 days. d. Answer is not given.

Seller can withdraw the offer prior to acceptance by Mr. Buyer.

Mr. Seller offered to sell a parcel of land Mr. Buyer orally for P5 million. Mr. Buyer accepted orally on November 5, 2021. a. The sale is voidable. b. The sale is valid and can be registered. c. The sale is valid but unenforceable and cannot be registered. d. The sale is voidable but may be ratified.

The sale is valid but unenforceable and cannot be registered.

A contract of sale is deemed an equitable mortgage in any of the following situations, which is the exception? a. When the buyer retains for himself a part of the purchase price. b. When the price is unusually inadequate. c. When the buyer is in possession as lessee. d. When the buyer binds himself to pay the taxes on the thing sold.

When the buyer binds himself to pay the taxes on the thing sold.

Statement No. 1 – A contract of sale is a mode of acquiring ownership. Statement No. 2 – Every delivery transfer ownership. a. Both Statements are false. b. Both Statements are true. c. Statement No. 1 is true; Statement No. 2 is false. d. Statement No. 1 is false; Statement No. 2 is true

Both Statements are false.

Mr. X, without the authority of Mr. Y, owner of a car, sold the same car in the name of Mr. Y to Mr. Z. The contract between Mr. X and Mr. Z is a. Void because of the absence of consent from the owner, Mr. Y. b. Valid because all of the essential requisites of a contract are present. c. Unenforceable because Mr. X had no authority but he sold the car in the name of Mr. Y, the owner. d. Rescissible because the contract caused lesion to Mr. Z.

Unenforceable because Mr. X had no authority but he sold the car in the name of Mr. Y, the owner.

Mr. X orally offered to sell his two-hectare rice land to Mr. Y for P10 million. The offer was orally accepted. By agreement, the land was to be delivered (through execution of a notarized deed of sale) and the price was to be paid exactly one-month from their oral agreement. a. If Mr. X refuses to deliver the land on the agreed date despite payment by Mr. Y, the latter may not successfully sue Mr. X because the contract is oral. b. The contract between the parties is subject to ratification by the parties. c. If Mr. X refuses to deliver the land, Mr. Y may successfully sue for fulfillment of the obligation even if he has not tendered payment of the purchase price. d. The contract between the parties is rescissible.

The contract between the parties is subject to ratification by the parties.

Mr. S sold his land to Mr. B with a right to repurchase within ten years from the date of sale. Despite the lapse of the period of redemption, no such redemption was made. a. Ownership of the land was consolidated on Mr. by virtue of the failure to redeem by Mr. S. b. Ownership of the land will be consolidated only upon the registration of the sale with the registry of deeds. c. Ownership of the land will be consolidated only upon a judicial order. d. Ownership will be consolidated only with the consent of Mr. S.

Ownership of the land will be consolidated only upon a judicial order.

Mr. Ayco offered to sell his land to Mr. Cruz for P300,000. Mr. Cruz accepted the offer and paid Mr. Ayco the purchase price. Mr. Ayco delivered the owner’s duplicate of the Transfer Certificate of title of the land. Mr. Cruz wants to register the land in his name but the Register of Deeds asks Mr. Cruz for the Deed of Sale. What can Mr. Cruz do? a. He cannot compel Mr. Ayco to return the payment because the contract is unenforceable. b. He may compel Mr. Ayco to execute the Deed of Sale because the contract is valid. c. He may sue Mr. Ayco to return the purchase price under the legal principle that no one may enrich himself at the expense of another. d. He may occupy and use the land as a buyer in good faith.

He may compel Mr. Ayco to execute the Deed of Sale because the contract is valid.

Antonio sold a piece of land to Renato binding himself not to sell the same to another person. On the following day, Antonio sold the land to Carlos who immediately took possession in good faith. In the case at bar, the proper remedy of Renato is to: a. Institute an action for the annulment of the sale to Carlos. b. Institute an action for the recovery of the land. c. Institute an action for damages against Antonio. d. Institute an action for a declaration of nullity of the sale to Carlos

Institute an action for damages against Antonio.

When goods are delivered to the buyer “on sale or return”, for a period of seven (7) days, ownership of the goods passes to the buyer, a. Upon delivery of the goods. b. Upon expiration of seven (7) days. c. Upon acceptance by the buyer of the offer of the seller. d. Upon perfection of the contract.

Upon expiration of seven (7) days.

Where after the agreement to sell for the sale of specific goods, the goods perish without any fault of the buyer or seller, the contract of sales becomes void if the goods perish a. after the risk passes to the buyer. b. before the risk passes to the buyer. c. without any knowledge of the seller. d. without any knowledge of the buyer.

without any knowledge of the seller.

S sold a parcel of land to B for P100,000 with B paying the said amount immediately. Although S delivered the transfer certificate of title of the land to B, the parties did not execute any document at all for the sale except the receipt for the payment which S issued to B. B now wants to register the receipt for the payment which S issued to B. B now wants to register the sale with the Register of Deeds. a. The contract between S and B is rescissible; hence B can sue for damages. b. The contract between S and B is void because it was not in the form required by law. c. B cannot compel S to execute a Deed of Sale because the contract is unenforceable. d. B can compel S to execute a Deed of Sale which is duly notarized so that B can register the sale.

B can compel S to execute a Deed of Sale which is duly notarized so that B can register the sale.

Which of the following statements is incorrect? a. The full payment of the price is sufficient to make the buyer the owner of the thing sold. b. In a sale, the full payment of the price is a suspensive condition for the seller to deliver. c. Delivery of the thing sold is necessary to transfer ownership. d. Delivery in a real contract is required not for transfer of ownership but for the perfection of the contract

The full payment of the price is sufficient to make the buyer the owner of the thing sold.

In which of the following instances are the goods still in transit which allow the unpaid seller to exercise his right of stoppage in transitu in case of insolvency of the buyer? a. If the buyer obtains delivery of the goods before arrival at the appointed destination. b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival of the goods at their appointed destination. c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent. d. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.

If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.

What is the prescriptive period of the right to file an action based on breach of warranty of sale of immovable against non-apparent and unregistered burden or servitude? a. 40 days from the date of contract of sale or from the discovery of burden. b. 6 months from the date of contract of sale or from the discovery of burden. c. 1 year from the date of contract of sale or from the discovery of burden. d. 3 days from the date of contract of sale or from discovery of burden.

1 year from the date of contract of sale or from the discovery of burden.

Which of the following are not required in a contract of sale? I. Identifiable goods and price II. Transfer of ownership of goods III. Delivery of possession IV. Third party insurers in case of loss a. I and II b. III and IV c. II and III d. I and IV

III and IV

LeBron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot of LeBron and through connivance with a notary public, he was able to execute a notarized deed of sale through forging the signature of LeBron. With connivance with a Registry of Deeds, Kevin was able to transfer the title of the lot to his name. Afterwards, Kevin sold the said lot to Carmelo who acquired the said lot after inspecting the title and the vacant lot. Carmelo is a purchaser in good faith and for value. Which of the following statements is correct? a. The contract of sale between Kevin and Carmelo is void because it is the product of a previous void contract. b. LeBron can recover the land from Carmelo because the title acquired by Carmelo is that of a thief even without reimbursing Carmelo. c. LeBron can recover the land from Carmelo provided he will reimburse him for the price Carmelo paid. d. LeBron cannot recover the land from Carmelo because a forged document or deed of sale, in case of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser for value and in good faith.

LeBron cannot recover the land from Carmelo because a forged document or deed of sale, in case of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser for value and in good faith.

Alonzo offered to sell to Bernardo a parcel of land at a specified price. Alonzo gave Bernardo (60) days within which to accept the offer. Bernardo agreed to the period. a. Before the lapse of sixty days, Alonzo may withdraw the offer or increase the price. b. Before the lapse of sixty days no withdrawal can be made but the price may be increased. c. No withdrawal can be made before sixty days because the period is binding. d. No withdrawal can be made because there is already a perfected option contract

Before the lapse of sixty days, Alonzo may withdraw the offer or increase the price.

What is the legal concept of possession? a. The holding of a thing or the enjoyment of a right b. It is material occupation or by the fact that the right or property is subjected to the will of the claimant c. The gathering of the products and the act of planting on the land d. All of the above

All of the above

Nik sold to Paul a real property payable in monthly installments within a 5-year period, Paul was only able to pay 14 monthly installments, after the 60-day grace period and after 30 days of Paul’s receipt of the notice and letter calling for the rescission of the contract Nik rescinded the same. Paul contended that there was an automatic rescission done by Nik, hence, the same was void. Give the best answer. a. The rescission done by Nik was in faithful compliance with the Maceda Law, as the grace period and the sending of notices was complied before rescission. b. The rescission done by Nik was void as it fell short on compliance with the law, as the notices sent by the latter would not suffice the requirement of a notarial act. c. Paul has a right to demand payment for damages caused by the automatic rescission done by Nik, the same being void under RA 6552 d. Answer not given

The rescission done by Nik was void as it fell short on compliance with the law, as the notices sent by the latter would not suffice the requirement of a notarial act.

S sold to B a thing without knowledge that the thing suffered from a hidden defect. The parties agreed on the waiver of the warranty by the buyer. Is the seller still liable for breach of warranty? a. No, but he must return the price to the buyer without damages. b. No, because the valid waiver of warranty. c. Yes, if the seller was in bad faith at the time the waiver was made. d. Yes, because the waiver refers only to liability for damages.

No, because the valid waiver of warranty.

An agricultural land is owned by A and D pro-indiviso. D sells his ½ part to R, who is the owner of the adjoining land. When A learned of the sale, he tried to redeem the portion sold by D by reimbursing R with the purchase price and expenses. Which is not correct? a. A can compel R to permit redemption b. A co-owner of a thing may exercise the right of redemption in case the shares of the other co-owners or any one of them are sold to a third person c. The sale to R is valid but A can elect to exercise his right of redemption d. The sale to R is valid and as adjoining land owner he is the one entitled to redemption

The sale to R is valid and as adjoining land owner he is the one entitled to redemption

The redhibitory action based on the faults or defects of animals must be brought within a. 6 months from delivery to the vendee b. 45 days from delivery to the vendee c. 40 days from delivery to the vendee d. 30 days from delivery to the vendee

40 days from delivery to the vendee

S sold his lot with an area of 100 square meters to B at a selling price of P1,000 per square meter. After delivery of the lot, B discovered that the actual area is only 91 square meters. What is the legal remedy available to B? a. B may ask for proportionate reduction of price and must pay P91,000 only. b. B can ask for cancellation of the contract of sale. c. Either A or B d. Neither A nor B

B may ask for proportionate reduction of price and must pay P91,000 only.

B rented the specific truck of S. After the end of the contract, S sold the property to B. As a result of sale, B continues to have possession of the property. What type of constructive delivery is present? a. Traditio clavium b. Traditio longa manu c. Traditio brevi manu d. Traditio constitutum possessorium

Traditio brevi manu

A orally offered to sell his rice land to B for P8,000,000. B orally accepted the offer. The land is to be delivered through the execution of a notarized Deed of Sale and the price is to be paid directly two weeks from their oral agreement. Which of the following is most accurate? a. If A refuses to deliver the land on the agreed date despite payment made by B, the latter may not successfully sue A because the contract is unenforceable b. If A refused to deliver the land, B may successfully sue A for the fulfillment of the obligation before the payment of the purchase price c. The contract between A and B is rescissible d. The contract between A and B is subject to ratification by the parties.

The contract between A and B is subject to ratification by the parties.

Article 1484 of the Civil Code (Recto Law), which prohibits the vendor from recovering any deficiency in the foreclosure sale, applies where: a. The object of the chattel mortgage is not the thing sold. b. The personal property is sold on a straight-term. c. Both A and B d. Neither A nor B

Neither A nor B

D borrowed P200,000 from C payable in 10 monthly installments of P20,000 each. The credit was secured by a chattel mortgage on D’s truck. D defaulted on the 1st and 2nd installments. The chattel mortgage was foreclosed and the truck was sold for P150,000. Which of these statements is correct? a. C cannot recover the P50,000 deficiency from D because it is prohibited under the Recto Law. b. C cannot recover the P50,000 from D because there is no recovery of deficiency in mortgage contracts. c. C can recover the P50,000 deficiency from D because the Recto Law is not applicable to loans secured by a chattel mortgage. d. None of the foregoing.

C can recover the P50,000 deficiency from D because the Recto Law is not applicable to loans secured by a chattel mortgage.

Realty Installment Buyer Protection Act, also known as the Maceda Law, covers the installment sale of financing of: a. Condominium dwelling units b. Commercial buildings c. Industrial lots d. Agricultural lands to tenants under the Agrarian Reform Program

Condominium dwelling units

Where the installment buyer was able to pay less than two years of installment, the Maceda Law grants him a grace period, without any additional interest, of: a. Thirty (30) days b. Sixty (60) days c. One (1) month d. Two (2) months

Sixty (60) days

Where the installment buyer was able to pay two years or more of installment, the Maceda Law grants him a grace period, without any additional interest, of: a. Thirty (30) days for every year of installments paid b. Sixty (60) days for every year of installments paid c. One (1) month for every year of installments paid d. Two (2) months for every year of installments paid

One (1) month for every year of installments paid

B bought the residential lot of S for P1,000,000 on installment under the following terms: P200,000 downpayment on January 3, 2015; P100,000 every year thereafter until fully paid. Assume that B defaulted on the very first installment due on January 3, 2016. Under the Maceda Law, the grace period and cash surrender value of B shall be: a. 60 days and 0, respectively b. 60 days and P100,000, respectively c. 30 days and P100,000, respectively d. No grace period and no cash surrender value

60 days and 0, respectively

Under this test, the nationality of a corporation follows that of the country under whose laws it was formed. A. Incorporation Test B. Control Test C. Business Domiciliary Test D. Grandfather Rule

Incorporation Test

Under this test, the nationality of a corporation follows that of the country under whose laws it was formed. A. Incorporation Test B. Control Test C. Business Domiciliary Test D. Grandfather Rule

Incorporation Test

These statements are presented to you for evaluation: Statement I - A person authorized to sign the articles of incorporation in behalf of a stock corporation which is an incorporator need not be a subscriber to at least one (1) share of stock of the corporation being formed. Statement II - A person whose name appears in the articles of incorporation as a subscriber to at least one (1) share of stock may not be an incorporator of the corporation.. 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 Il is true.

Both statements are false.

A suit or action brought by a stockholder or stockholders in the name and 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. Representative suit B. Class suit C. Derivative suit D. Individual suit

Derivative suit

It refers to the right to exist as a corporation and it is vested in the individuals who compose the corporation and not in the corporation itself. A. Primary franchise B. Secondary franchise C. License D. Certificate of Authority

Primary franchise

Shares that are issued without consideration or with no adequate consideration are known as: A. watered stock. B. redeemable stock. C. founders' stock D. no-par stock.

watered stock.

One who is not actually a partner but who may become liable as such to third persons (such as a partner by estoppel).

Nominal

One who is not actually a partner but who may become liable as such to third persons (such as a partner by estoppel).

Nominal

One who is not actually a partner but who may become liable as such to third persons (such as a partner by estoppel).

Nominal

One who has no voice in the management of the businesess (though he shares in the profits and losses).

Silent Partner

One who has all the rights and partners, and all the restrictions of a general partner, except that, in respect to his contribution, he shall have the rights against the other members which he would not have if he were not also a general partner. (He is liable to his separate property to the third persons, but he may reimburse the same to his co-owners.)

General-limited

One who does not participate in the management of the business and is not known to the public as a partner.

Dormant partner