Difficult Round

1.In the partnership of A, B and C, A was appointed in the Articles of Co-Partnership as

managing partner. As such manager in good faith:
a. His power is revocable even without consent
b. His power can be revocable at any time even without just cause provided
c. He may execute all acts of administration despite the opposition of B and C
d. He can be removed for valid cause even without the vote of the partners owning the
controlling interest

2. A judicial process by virtue of which a person is generally ordered to refrain from doing
something
Answer: Injunction

3. The following statements pertain to the cause of a contract. Which statement refer to
motive?
A. It is the essential reason of a contract.
B. It is always known to the contracting parties
C. It is illegality does not affect the validity of the contract
D. there will be no contract without it

4. A clause providing that the mortgagee will automatically own the property mortgaged if the
debt is not paid at maturity is
A. Dacion en pago C. Pactum Commissorium
B. Payment by cession D. Upset price

5. A sold his piano to B for P200,000 payable in installment. A chattel mortgage was constituted
on the piano. B defaulted in two installment payments. A demand of the unpaid obligation
amounting to P120,000 and a writ of attachment was issued and the piano was sold for
P100,000. Can A still recover the deficiency?
Statement 1: No, the foreclosure of the piano extinguishes B’s obligation
Statement 2: Yes, if stipulated that in case of foreclosure the buyer will pay any deficiency.
a. Both statements are true
b. Both statements are false
c. Only statement 1 is true
d. Only statement 2 is true

6. “Pay to Maria or order P 20,000 upon demand”, signed by A as drawer and addressed to B.
Maria negotiated the bill to C, C to D, E stole the bill from D and indorsed it to F by forging the
signature of D. F in turn indorsed the bill to G & G to H. Which of the following is false?
a. all indorsers prior to the forgery are discharged
b. the drawer is liable to H
c. F is liable to H
d. Forgery is real defense
7. Alexis and Bote entered into a universal partnership of all present property. No stipulation
was made regarding other properties. Subsequently, Alexis received a parcel of land by
inheritance from his father; and another parcel of land from “The Best Ito University” as
remuneration for Alexis work as professor therein.
a. The two parcel of land and their fruits are to be enjoyed by the partnership because the
contract entered is a universal partnership of all present property.
b. The two parcel of land and their fruits will not be enjoyed by the partnership because there
is no stipulation regarding future properties or their fruits.
c. The partnership is entitled only to the fruits but not to the two parcel of land.
d. The partnership is entitled to use the two parcel of land as usufructuary and also entitled to
the fruits produced by the property.

8. Contracts take effect only between the parties or their assigns and heirs, except where the
rights and obligations arising from the contract are not transmissible by their nature, by
stipulation, or by provision of law. In the latter case, the assigns or the heirs are not bound by
the contracts. This is known as the principle of _______________________.
Answer: Relativity of contracts

9. . X is a director in T Corp. who was elected to a 1-year term on Feb. 1, 2010. On April 11,
2010, X resigned and was replaced by R, who assumed as director on May 17, 2010. On Nov. 21,
2010, R died. S was then elected in his place. Until which time should S serve as director?
Answer: Feb. 1, 2011

10. ABC Corp. increased its capital stocks from Php10 Million to Php15 Million and, in the
process, issued 1,000 new shares divided into Common Shares “B” and Common Shares “C.” T, a
stockholder owning 500 shares, insists on buying the newly issued shares through a right of pre-
emption. The company claims, however, that
its By-laws deny T any right of pre-emption. Is the corporation correct?
a.No, since the By-Laws cannot deny a shareholder his right of pre-emption.
b.Yes, but the denial of his pre-emptive right extends only to 500 shares.
c.Yes, since the denial of the right under the By-laws is binding on T.
d.No, since pre-emptive rights are governed by the articles of incorporation

AVERAGE ROUND
1.One of the following incidents may be a cause for involuntary dissolution of a partnership.
Which is? (average)
a. Termination of the term of the c. Express will of any partner
partnership d. Expulsion of any partner
b. Insolvency of any partner
2.Which of the following liabilities of the partnership shall rank first in the order of payment?
(average)
a. Those owing to creditors other than partners
b. Those owing to partners in respect to profits
c. Those owing to partners in respect to capital
d. Those owing to partners other than for capital and profit

3. Where a property is alienated to the creditor in satisfaction of a debt in money is called

______
Answer: Dation in payment or Dacion en pago

4. A contract where the creditor acquires the right to receive the fruits of an immovable of his
debtor, with the obligation to apply them to the payment of interest if owing and thereafter to
the principal of his credit is.
a. Antichresis
b. Usufruct
c. Real estate mortgage
d. Commodatum

5. A owes B P1,000. A, knowing that the debt has prescribed, nevertheless, still pays B. Can A
recover what he voluntarily paid?

First answer Yes, because B has no right to demand the payment effected by A.
Second Answer No, the payment extinguished the natural obligation.

A. Both answers are correct.

B. Both answers are wrong.
C. Only the first is correct.
D. Only the second is correct.

6. Which of the following situations complies with the requirement of the law to register a
cooperative before the Cooperative Development Authority?
Authorized Share Capital Subscribed Share Capital Paid-up Share Capital
A. P60,000 P40,000 P10,000
B. P60,000 P30,000 P15,000
C. 100,000 P20,000 P5,000
D. P200,000 P40,000 P10,000

7. The action for annulment must be brought within 4 years. Which of the following is false with
respect to the reckoning of the beginning of the prescriptive period?

A. In cases of intimidation, violence and undue influence, the period begins from the time the
defect in the consent ceases.
B. In a case of fraud, the period begins from the discovery thereof.
C. In cases of contracts entered into by minors or other incapacitated persons, the period runs
from the time guardianship ceases.
D. In case of mistake, the period begins from the time it was committed.

8. The negotiable promissory note signed by M as maker for P 10,000 is payable to Jose Cruz or
bearer on May 10, 2009. M however issued the note to the payee May 15, 2009. In this case:
a. The instrument is considered non-negotiable because the date of issue is later than the date
of payment.
b. Cruz can ask for payment at anytime
c. Cruz can require payments only on May 15, 2009
d. Cruz cannot negotiate the note

9. This indorsement constitutes the indorser as a mere assignor of the title of the instrument:
Answer: Qualified indorsement

10. One who is not really a partner but is liable as a partner for the protection of innocent 3 rd
persons.
Answer: Partner by estoppel

EASY ROUND

1. The minimum capital in money or property except when immovable property or real rights
thereto are contributed, that will require the contract of partnership to be in public instrument
and be registered with SEC. (Easy)
Answer: 3,000

2. The obligation begins only from a day certain or upon the arrival of said period.
a. Ex die
b. Conditional
c. In diem
d. With a period

3. ____is the act of putting somebody onto the shoes of the creditor enabling him to exercise all
the rights that could have been exercised by the latter.
Answer: Subrogation

4. Partnership as distinguished from corporation (easy)

a. Acquires juridical personality upon approval by the SEC and the issuance of certificate.
b. Has limited liability.
c. Created by operation of law.
d. No power of succession
5. Damages awarded for mental and physical anguish.
A. Moral C. Nominal
B. Temperate D. Exemplary

6. The business of this corporation can be managed by the stockholders:

A. Close C. Eleemosynary
B. Open D. All of the above

7. What mode of extinguishing a contract of sale is when a person is subrogated upon the same
term and condition stipulated in the contract in the place of one who acquires a thing by
onerous title?
A. Compensation C. Legal redemption
B. Novation D. Subrogation

8. Primrose is the owner of a car which was sold by Buttercup without authorization in favor of
Gale. The contract between Gale and Buttercup in so far Primrose is concerned is:
A. Valid C. Unenforceable
B. Rescissible D. Voidable

9. 1st - If the price is grossly inadequate the contract of sale is affected; if the price is absolutely
simulated, the contract is void.
2nd - The fixing of price can never be left to the discretion of one of the parties. However, it
may be fixed by a third person.

A. Both are true. C. 1st is True; 2nd is False.

B. Both are false. D. 1st is False; 2nd is True.

10. A type of cooperative which combines 2 or more of the business activities of these different
types of cooperatives?
Answer: Multipurpose Cooperative