LAW OF OBLIGATION AND CONTRACTS, Study notes of Law of Obligations

Download LAW OF OBLIGATION AND CONTRACTS and more Study notes Law of Obligations in PDF only on Docsity! OBLIGATIONS QUIZZER 1 1. Lennie bought a business class ticker from Alta Airlines. As she checked in, the manager downgraded her to economy on the ground that a Congressman had to be accommodated in the business class. Lennie suffered discomfort and embarrassment of the downgrade. She sued the airlines for quasi-delict but Alta Airlines countered that, since her travel was governed by a contract between them, no quasi-delict could arise. Is the airline correct? a. No, the breach of contract may in fact be tortious as when it is tainted as in this case with arbitrariness, gross bad faith and malice. b. No, denying Lennie the comfort and amenities of the business class as provided in the ticket is a tortuous act. c. Yes, since the facts show a breach of contract, not a quasi-delict. d. Yes, since quasi-delict presupposes the absence of a pre-existing contractual relation between the parties. 2. A juridical necessity to give, to do or not to do a. Civil obligation b. Natural obligation c. Moral obligation d. Social obligation 3. The object or subject matter of the obligation a. Prestation b.Vinculum c. Active subject d. Passive subject 4. The duty not to recover what has voluntarily been paid although payment was no longer required a. Civil obligation b. Natural obligation c. Moral obligation d. Juridical obligation 5. The duty to pay taxes and to support one’s family are obligations arising from a. Law b. Contracts c. Quasi-contracts d. Delicts 6. A support B, a minor, because B’s father refuses to support B. The father is obliged to reimburse A. The source of obligation a. contract b. quasi-contract c. delict d. quasi-delict 7. When a person voluntarily takes charge of another’s abandoned business or property without the owner’s authority where reimbursement must be made for necessary and use full expenses. a. Quasi-contract b. Quasi-delict c. Negotiorum gestio d. Solutio indebiti 8. Statement 1: A quasi-contract is an implied contract. Statement 2: A defendant who is acquitted in a criminal case is no longer liable civilly. a. true, true b. true, false c. false, true d. false, false 9. Omission of the diligence which is required by the circumstances of person, place and time a. Ignorance b. Negligence c. Impotence d. Insanity 10. Specific performance may not be possible in this civil obligation a. A, a painter, obliges himself to paint the portrait of B on January 8, 2021 b. C, a farmer, obliges himself to give his only cow to D on February 14, 2021 c. E, a veterinarian, obliges himself to give one of his dogs to F on May 1, 2021 d. G, a registrar of deeds, obliges himself to effect registration of H’s parcel land on June 20, 2021 11. A lawful and voluntary act resulting to a benefit, except a. Negotiorum gestiso b. Solutio indebiti c. Quasi-contract d. Quasi-delicit 12. Unless the law or the stipulation of the parties require another standard of care, every person obliged to give something is also obliged to take care of it with the proper diligence a. Observing utmost care c. Of a father of a good family b. Observing extraordinary care d. Observing ordinary diligence 13. The creditor has a right to the fruits of the thing a. From the time the obligation to deliver it arises c. From the time there is meeting of the minds b. From the time the fruits have been delivered d. From the perfection of the contract 14. A was employed as professional driver of B Transit Bus owned by C. In the course of his work, A hit a concrete post causing serious injury to passenger W and pedestrian Y. The victims sued the driver and the owner of the bus for damages. Which of the following statements is correct? a. C is not liable if C can prove that he exercised the diligence of a good father of a family in the selection and supervision of his employee b. The conviction of A in a criminal case makes C subsidiary liable for damages arising from criminal act c. The liability of C shall cease if the driver A is acquitted in the criminal case d. The guilt of driver A must be established beyond reasonable doubt to make C liable 15. A owes B P1,000. A, knowing that the debt has prescribed, nevertheless, still pays B. Can A recover what he voluntarily paid? Statement 1: Yes, because B has no right to demand the payment effected by A Statement 2: No, the payment extinguished the natural obligation. a. True, true b, True, false c. False, true d. False, false 16. If a thing is capable of particular designation a. Generic b. Specific c. Indeterminate d. Indeterminable 17. Spontaneous products of the soil and the offspring and other products of animals a. natural b. industrial c. civil d. penal 18. Products of the soil through cultivation or intervention of human labor a. natural b. industrial c. civil d. penal 19. When does the obligation to deliver the fruits arise? Answer 1: If there is no term or condition, then from the perfection of the contract Answer 2: If there is a term or condition, then from the moment the term arrives or the condition happens a. True, true b. True, false c. False, true d. False, false 20. Where demand by the creditor shall be necessary in order that delay may exist a. When time is of the essence of the contract OBLIGATIONS QUIZZER 2 1. I. Solidarity may exist although the debtors and the creditors may not be bound in the same manner and the same periods and conditions II. A solidary debtor is always entitled to reimbursement from his co-debtors if he pays for their obligations. a. True, true b. True, false c. False, true d. False, false 2. A obliges himself to give B a specific car on Jan 2, 2021, C burned the car which A promised to deliver to B, which is correct? a. A’s obligation to B is converted to monetary obligation. b. A should file an action against C for the value of the car plus damages. c. B can file an action against A for the value of the car plus damages. d. B can file an action against C for the value of the car plus damages. 3. A owes B 10,000 due on Jan 7, 2021 and guaranteed by C. B owes A P8,000 due on Jan. 7, 2021. On the due date, A is insolvent. How much is C’s liability? a. P10,000 b. P8,000 c. P2,000 d. Zero 4. Which of the following is an obligation with a period for the benefit of the debtor? a. An obligation payable little by little. b. An obligation payable when the debtor’s means permit him to do so. c. An obligation payable within 10 months on demand. d. An obligation payable on or before Dec. 31, 2021. 5. I’ll give you my car one year after X dies. The obligation is a. Valid, because death is sure to come. b. Valid, but the condition will be disregarded. c. Void, then time when death will occur is not certain. d. Void, killing a person is contrary to law. 6. A owes B P10,000 payable as soon as A has the money to pay B. This is a. A conditional obligation c. A suspensive condition b. An obligation with a period d. A potestative condition 7. Solidarity on the part of the obligee a. Active solidarity b. Passive solidarity c. Mixed solidarity d. Casual solidarity 8. A, B and C borrowed P24,000 from Y and Z and signed a promissory note dated January 30, 2021, and due within six months. How much can Y collect from A (debtors are solidary while creditors are joint), on due date? a. P12,000 b. P4,000 c. P8,000 d. P24,000 9. The obligation is demandable on the date of the obligation and shall continue to be in force up to the arrival of the day certain: a. Resolutory period b. Suspensive period c. Indefinite period d. Legal period 10. A, B and C secured a loan from D. The promissory note which evidences the obligation states: ”I promise to pay D or order P10,000 payable on demand” (Sgd) A B C. The obligation is a. Solidary b. Divisible c. Indivisible d. Joint 11. X obliged himself to pay Y the amount of P30,000 30 days after January 31, 2014 plus a penalty of P3,000 if he fails to pay the obligation on due date. After demand for payment by Y, X offered to pay on June 30, 2014. Y can demand from X: a. P30,000 plus P3,000 plus legal interest c. P30,000 plus P3,000 b. P30,000 plus legal interest d. P30,000 plus P3,000 plus legal interest plus damages 12. A sold as B his cow for P5,000. No date is fixed by the parties for the performance of their respective obligations. The obligation of A is a. To deliver the cow immediately as there is a perfected contract b. To deliver the cow within the reasonable time from the perfection of the contract c. To deliver the cow upon the payment by B of P5,000 d. To rescind the contract as there is no time fixed for the delivery and payment 13. One of the following is not correct in joint obligation a. There are as many debts as there are debtors. b. There are as many credits as there are creditors. c. The debts and/or credits are considered distinct and separate from one another. d. The insolvency of one of the debtor shall make the other debtors liable. 14. Which of the following is not correct? a. The effect of the conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the fulfillment of the condition. b. When the obligation imposes reciprocal prestations upon the parties, the fruits and interests during the pendency of the conditional shall be deemed to have been mutually compensated. c. If the obligation is unilateral, the debtor shall appropriate the fruits and interest received, unless the nature and circumstances of the obligation it should be inferred that the intention of the persons constituting the same was different. d. In obligation to do and not to do, the court shall determine in each case, the retroactive effect of the condition that has been complied with. 15. Which of the following is correct? a. A solidary creditor can assign his right even without the consent of the others. b. The remission of the whole obligation, obtained by one of the solidary debtors shall entitle him to reimbursement from his co-debtors. c. The condition not to do an impossible thing shall be considered as not having been agreed upon. d. Obligations for whose fulfillment a day certain has been fixed shall be demandable at once. 16. A borrowed P1M from B and C who acted as solidary creditors. When the loan matured, B wrote a letter to A demanding payment of the loan directly to him. Before A could comply, C went to see him personally to collect and he paid him. Did A make a valid payment? a. No, since A should have split the payment between B and C. b. No, since B, the other solidary creditor, already made a prior demand for payment from A. c. Yes, since the payment covers the whole obligation. d. Yes, since C was a solidary creditor, payment to him extinguished the obligation. 17. J agree to pay his debt and in case of non-payment, to render free service as a servant. Is the obligation valid? a. No, the obligation to pay and to render service as a servant is contrary to law and morals. b. Yes, if the services will be rendered in satisfaction of the debt and in case of non-performance, the proper remedy is specific performance. c. No, the nullity of the condition carries with it the nullity of the principal obligation. d. Yes, in so far as the obligation to pay but not as regards the undertaking to render domestic services for free. 18. If an obligation is with a penal clause Statement A- Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded Statement B- When the debtor is guilty of fraud in the fulfillment of the obligation, the creditor can demand payment of damages and interest in addition to the penalty a. True, True b. False, True c. False, False d. True, False 19. A, B, and C solidarily owe D and E P30, 000. D remitted the entire obligation in favor of A without the consent of E. The effect is a. A cannot recover from B and C because remission in her favor extends to be benefit of B and C. b. A can recover from B and C their respective share of the debt. c. The obligation is not extinguished until A collects from B and C. d. The obligation is not yet extinguished until E is paid by D of her share of the credit. 20. Which of the following is wrong in alternative obligation? a. The obligation shall completely perform one of them. b. The obligee cannot be compelled to receive part of one and part of the other undertaking. c. The right of choice belongs to the creditor, unless it has been expressly granted to the debtor. d. The debtor shall have no right to choose those prestations which are impossible. 21. A, B and C executed a promissory note binding themselves to pay P9,000 to X, Y and Z. The note is now due and demandable. Can the creditors proceed against A alone for the payment of the entire debt? a. No, each creditor can collect only P3,000 from A. b. Yes, either X,Y or Z can collect P9,000 from A. c. No, each creditor can collect only P1,000 from A. d. Yes, since the promissory note is silent with respect to the rights of the creditors, the obligation is presumed to be solidary. 22. Using the preceding number, suppose that C is insolvent, can A and B held liable for C’s share in the OBLIGATIONS QUIZZER 3 1. A makes a check payable to bearer and gives the check to C, who gives it to D who finally gives it to A. The obligation of A is extinguished by a. Merger b. Compensation c. Novation d. Prescription 2. A owes B P10,000. C, a friend of A, approaches B and tells him “I will pay you what A owes you. From now on consider me your debtor, not A. A is to be excused. If B agrees, there is a. Novation b. Subrogation c. Delegacion d. Expromission 3. The substitution or change of an obligation by another, which extinguishes or modifies the first, either changing its object or principal condition or substituting another in the place of the debtor, or subrogating a third person in the rights of the creditor a. Compensation b. Merger c. Prescription d. Novation 4. A method of novation caused by the replacement of the old debtor by a new debtor, where the old debtor has proposed to the creditor and which replacement has been agreed to by said creditor and by said new debtor is a. Novation b. Delegacion c. Expromission d. Quantum meruit 5. A owes B P10,000. A proposed to B that C will pay A’s debt and that A will be released from all liabilities. B and C agreed to the proposal. Later, when B tries to collect from C, he finds out that C is insolvent. It was proved that at the time of delegacion, C was already insolvent but this was not known to A, neither was the insolvency of public knowledge. Is A still liable? a. Yes, because there is delegacion. b. No, because there is delegacion. c. Yes, because the initiative came from A. d. No, because the insolvency was neither of public knowledge nor known to A at the time he delegated his debt. 6. A and B entered into a contract whereby A was to give B P200,000. Later they novated the contract by stipulating that instead of cash A would give a particular car. Subsequently the car was destroyed by a fortuitous event. Which is correct? a. Novation is not allowed because the things due are not of the same kind. b. A is liable to pay P200,000, the amount of the old obligation. c. The original obligation is extinguished but not the obligation to deliver the car. d. The original obligation and the obligation to deliver the car are both extinguished. 7. A, B and C executed a promissory note worded as follows: We promise to pay to X, Y and Z the sum of P90,000. Sgd. A, B and C. Which is correct? a. A is obliged to pay to X, Y and Z P90,000. b. A is obliged to pay to X P60,000. c. A is obliged to pay to Y P30,000. d. A is obliged to pay to Z P10,000. 8. A obliged himself to give B a specific car on June 12, 2020 stipulating that A is liable even if the thing is lost due to fortuitous event and without the need of a demand. On due date, the car got lost due to fortuitous event. Which is correct? a. Obligation is extinguished due to fortuitous event. b. B can compel A to deliver another car. c. B can require another person to deliver a car with expenses chargeable to A. d. Obligation is not extinguished but converted into monetary consideration. 9. Upon the proposal of a third person, a new debtor substituted the original debtor without the latter’s consent. The creditor accepted the substitution. Later, however, the new debtor became insolvent and defaulted in his obligation. What is the effect of the new debtor’s default upon the original debtor? a. The original debtor is freed of liability since novation took place and this relieved him of his obligation. b. The original debtor shall pay or perform the obligation with recourse to the new debtor. c. The original debtor remains liable since he gave no consent to the substitution. d. The original debtor shall pay or perform 50% of the obligation to avoid unjust enrichment on his part. 10. A borrowed Php 1M from a bank secured by a mortgage on his land. Without his consent, his friend B paid the whole loan. Since a benefited from the payment, can B compel the bank to subrogate him in its right as mortgage of A’s land? a. No, but the bank can foreclose and pay B back. b. No, since B paid for A’s loan without his approval. c. Yes, since a change of creditor took place by novation by the bank’s consent. d. Yes, since it is but right that B be able to get back his money and, if not, to foreclose the, mortgage in the manner of the bank. 11. In which of the following debts is legal compensation proper? When one of the debts a. Arises from the obligation of a depository b. Arises from a voidable contract c. Arises from a claim for support by gratuitous title d. Consists in civil liability arising from penal offense 12. Legal compensation is allowed when one of the debts a. Arises from the sale of real property made by a minor to a capacitated person b. Arises from the obligation of a depositary c. Consists in civil liability arising from a penal offense d. Arises from a claim for support by gratuitous title 13. Within what period must recovery be made if the debtor did not know that payment was not yet due? a. Before maturity with regard to both what was paid and the interest b. Even after maturity with regard to both the interest and what was paid c. Before maturity with regard to what was paid and even after maturity with regard to the interest d. Before maturity with regard to interest and even after the maturity with regard to what was paid 14. There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made a. At domicile of the debtor b. At domicile of the creditor c. Wherever the thing might be at the moment the obligation was constituted d. Wherever the thing might be at the moment the obligation is to be fulfilled 15. Rudolf borrowed P1M from Rodrigo and Fernando who acted solidary creditors. When the loan matured, Rodrigo wrote a letter to Rudolf demanding payment of the loan directly to him. Before Rudolf could comply, Fernando went to see him to collect and paid him. Did Rudolf make a valid payment? a. No, since Rudolf should have split the payment between Rodrigo and Fernando. b. No, since Rodrigo, the other solidary creditor, already made a prior demand for payment from Rudolf. c. Yes, since the payment covers the whole obligation. d. Yes, since Fernando was a solidary creditor, payment to him extinguished the obligation. 16. What is the first rule in application of payment? a. Debtor has the right to apply b. Creditor has the right to apply c. Apply to the most onerous d. Apply in accordance with the agreement 17. Anne owed Bessy P1M due on October 1, 2014 but failed to pay her on due date. Bessy sent a demand letter to Anne giving her 5 days from receipt within which to pay. Two days after receipt of the letter, Anne personally offered to pay Bessy in Mangager’s check but the latter refused to accept the same. The 5 days lapsed. May Anne’s obligation be considered extinguished? a. Yes, since Bessy’s refusal of the manager’s check, which is presumed funded amounts to a satisfaction of the obligation. b. No, since tender of payment even in cash, if refused, will not discharge the obligation without proper consignation in court. c. Yes, since Anne tendered payment of the full amount due. d. No, since a manager’s check is not considered legal tender in the Philippines. 18. A, B and C are liable jointly and proportionately to D and E in the amount of P60,000. E assigned back the obligation to A. How much obligation is extinguished by confusion or merger? a. P20,000 b. P30,000 c. P10,000 d. P60,000 19. What is the following obligations maybe subject to legal compensation? 7. On March 5, 2021, A wrote a letter to B offering him lease of a building. On March 6, 2021, at 1:00PM, B sent a letter of acceptance which was received by A at 4:00PM that day. But at 2:00PM, A had already sent B a letter of withdrawal of the offer which was received by B at 5:00PM. When was the contract perfected? a. At 1:00PM b. At 4:00PM c. At 2:00PM d. The contract has not been perfected. 8. It is when in order to wrest consent, serious or irresistible force is employed. a. Intimidation b. Undue influence c. Fraud d. Violence 9. If parties enter into a contract with respect to things outside the commerce of men, the contract is: a. Voidable b. Void c. Valid d. Unenforceable 10. When is an instrument not capable of reformation? a. Wills b. When through the ignorance, lack of skill, negligence or bad faith on the part of the person drafting the instrument or of the clerk or typist, the instrument does not express the true intention of the parties. c. If 2 parties agree upon the mortgage or pledge of real or personal property is sold absolutely, or with a right of repurchase d. Where the real agreement is voidable 11. What distinguishes earnest money from option money? a. If there is earnest money, in case of non-payment, there can be an action for specific performance only, while if there is option money, an action for specific performance or rescission can be filed by the injured party b. If there is earnest money, title passes to the buyer upon delivery of the thing sold, while if there is option money, ownership is reserved to the seller and is not to pass until full payment c. The earnest money is a distinct consideration for an option contract; while the option money is part of the purchase price d. If there is earnest money, the would-be buyer is not required to buy; while if there is option money, the buyer is not bound to pay the balance 12. It refers to an unaccepted unilateral promise to buy or sell a. Negotiation b. Preparation c. Policitacion d. Generation 13. A, an illiterate, borrowed P100,000 from B. Aside from that, A mortgaged his land to B which the latter accepted to secure the payment of the loan. B prepared a deed of sale with a right to repurchase of the land at a price of P100,000 which A singed after B explained that such document evidenced their true agreement. What is the proper legal remedy available to A? a. Action for reformation of instrument b. Action for rescission of contract c. Action for annulment of contract d. Action for declaration of nullity of contract 14. Which of the following contracts is 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 15. A, an insane person, sold his specific laptop to B at a price of P10,000. After obtaining knowledge of the contract, C, a childhood friend of A, filed an action before the court for annulment of the contract of sale. What principle of contract is violated by the filing of such action? a. Mutuality of contract b. Relativity of contract c. Liberality of contract d. Legality of contract 16. A delivered P1,000 cash to B as a contract of deposit which the latter thought to be a contract of loan. What is the proper legal remedy on the part of the injured party? a. Action fore reformation of the instrument b. Action for rescission of the contract c. Action for annulment of the contract d. Action for declaration of nullity of the contract 17. 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. 18. What is the legal remedy available to the injured party in case one of the contracting parties committed causal fraud? a. Action for damages for breach of contract b. Action for annulment of contract c. Action for rescission of contract d. Action for declaration of nullity of void contract 19. What is the legal remedy available to the injured party in case of absolutely simulated contract? a. Action for damages for breach of contract b. Action for reformation of instrument c. Action for rescission of contract d. Action for declaration of nullity of contract 20. When there having a meeting of minds of the parties to the contract, their true intention is not expressed in the document purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident, what is the remedy of the parties? a. Action for damages for breach of contract b. Action for reformation of instrument c. Action for rescission of contract d. Action for declaration of nullity of contract a. Sisa can go to court for the annulment of the contract so that the ring will be returned to him. b. Booba can go to court so that his fake money will be restored to him. c. Neither Sisa nor Booba can go to court since they are both guilty of fraud. 14. A is the guardian of B, a minor. B sold his land in writing to C valued at P1,000,000 for P650,000. The sale is a. Rescissible b. Voidable c. Unenforceable d. Void 15. Which of the following is enforceable? a. Oral sale of immovable property for a price of P400 b. Oral sale of immovable property for a price of P10,000 c. Oral contract of loan for P1,000 d. Oral agreement made in consideration of marriage 16. Rescission of contract can take place a. When the things which are the object of the contract are legally in the possession of third persons who acted in good faith. b. When the party seeking rescission can perform only as to part and rescind as to another. c. When the seller cannot return the installment paid to him by the buyer. d. When he who demands rescission can return whatever he may be obliged to restore. 17. S makes an offer to B on January 1, 2007. B makes known his acceptance in a letter sent on January 2, and received by S on January 10. Meantime, on January 5, S become insane. a. The contract is voidable because one party is insane. b. There is already a meeting of minds, the contract is perfected. c. The contract is not binding because there is no meeting of minds. d. Answer not given. 18. Which of the following can be considered as a feature of a void contract? a. subject to ratification b. it exists c. action or defense of nullity is subject to prescription d. novation cannot apply 19. L entered into a contract of mortgage with X. T, the clerk of L typed the document. Due to T’s negligence, the document made was that of sale instead of mortgage. a. The remedy is annulment. b. Parties may go to court for interpretation. c. Parties may enforce their right because it is enforceable. d. Reformation of instrument is proper. 20. S offers to sell his house to B for P100,000. B asks him if he would accept P80,000. Which of the following is correct? a. Because of ambiguity, both offers are terminated by operation of law. b. B’s response is a counter-offer effectively terminating the P100,000 offer and instigating an offer for P80,000. c. B’s response is a rejection of the P100,000 offer, and there is no offer for P80,000 because it is too indefinite to be an offer. d. B’s response is a mere inquiry, theP100,000 offer by S is still there. 21. B company bought out a competitor, C Corporation, with a stipulation that C Corporation should not thereafter engage in any business in the Philippines unless consented to and approved by B Company. a. The stipulation is defective subject to ratification. b. The stipulation is valid because the parties are free to enter into any stipulation, terms and conditions such as this one. c. The stipulation is unenforceable as there was no showing that the sale was done in writing. d. The stipulation is void because it is contrary to public policy. 22. Which of the following is not valid? a. Mutual promise to marry entered into orally. b. Sale of immovable property orally entered into. c. One of the parties in a contract is incapable of giving consent. d. The stipulation is void because it is contrary to public policy. 23. D forced C to execute a promissory note a. Contract is rescissible because the contract is fraudulent. b. The contract is void. c. C cannot demand payment from D because the contract is unenforceable. d. Contract remains to be valid. 24. Example no 1: S sold to B in a private instrument his land. Later, B wanted to have the sale registered but registration requires a public instrument. In here, B may compel S to execute the needed public instrument. Example no. 2: S sold to B orally his land. After B paid, he wants to register the land in his name but he needed a public instrument of sale. In here, B may compel S to execute the needed public instrument. a. Both examples are false. c. Only the second is true. b. Only the first is true. d. Both examples are true. 25. An agreement in restraint of trade or establishing monopoly is: a. perfectly valid b. voidable c. unenforceable d. void 26. Three of the following are rescissible, which is not? a. Sale of property under litigation made by defendant without the consent of plaintiff or authority of the court. b. Those made to defraud creditors when the latter have no other means to recover their claims. c. Those agreed upon in representation of absentees, if the absentee suffers lesion by more than ¼ of the value of the property subject of the contract. d. Contract of sale and the price is unusually inadequate resulting to lesion. 27. A and B married but legally separated entered into a contract of sale involving A’s condominium unit for a price of P4,000,000. The sale was embodied in a public instrument and lady paid the price using her exclusive money. What is the status of the contract? a. Valid b. Voidable c. Void d. Unenforceable 28. M, a minor owns a specific ring valued at P100,000. G, the guardian of M, by means of fraud induced B, a minor to buy the ring for P70,000, which did so and G effected delivery to B. The contract is not in writing. Which is correct? a. The contract is unenforceable because M and B are both incapacitated to give consent. b. The contract is rescissible because M suffered a lesion of more than ¼ of the value of the ring, c. The contract is voidable but G cannot ask for annulment of the contract. d. The contract is voidable but B can only ask for annulment within 4 years from discovery of the fraud. 29. A, with force and intimidation succeeded in having carnal knowledge of B, a minor. Later, with anger in her eyes, B threatened to sue A if A will not marry her. The marriage is a. Valid, because the treat of B was founded upon a legal act. b. Voidable, because the consent of A was secured through intimidation. c. Unenforceable, because both were guilty of intimidating each other. d. Void, because B is a minor. 30. G, the guardian of M, minor, owns a specific ring value at P50,000. Later G instructed M to sell the ring for P55,000 promising to give to M P5,000 for his efforts. M sold the ring to B for P60,000. Which of the following is correct? a. B can recover the P5,000 because the price should have been P55,000 only. b. G is entitled to the P60,000 selling price because M should give everything to the principal. c. M will give to G P50,000 and the excess will belong to M. d. The contract is voidable because M is a minor. 14. S sold his cat to B for P2,000.00. No payment has been made and the sales document does not provide for the date of delivery. Before delivery and payment, the cat gave birth to a kitten. a. B is entitled to the kitten which was born after the perfection of the sale b. S is entitled to the fruit as B has not yet paid the price c. S in entitled to the fruit because it was born before his obligation to deliver the cat. d. B should pay an additional amount for the kitten to be entitled to it. 15. A offered in writing to sell his house and lot for Php 1M to B on January 20, 2001. B requested to give him one month to raise the amount. On January 25, 2001, A informed B that he has raised the price to Php 1.5M. Can B compel A to accept the payment to Php 1M for the sale of the house and lot? a. Yes, because A is already estopped by his written offer of Php 1M. b. Yes, because the one month option period has not yet expired. c. No, because there is as yet no perfected sale. d. No, because the seller has the sole discretion in fixing the price with or without the concurrence of the buyer. 16. A placed an order with B for one hundred pieces of T-shirts which were then not available but manufactured by B and consigned to its sales outlets regularly. The contract between A and B is: a. contract for a piece of work b. contract or lease of service c. contract of sale d. remuneratory contract 17. S sold to B his parcel of land valued at P1M only for a measly sum of P.5M because of his poor judgment on the real value of the land and the ability of B to bargain for a low price. The sale therefore is: a. Voidable due to inadequacy of the price. b. Rescissible because S suffered lesion or damage. c. Presumed equitable mortgage due to the unusually inadequate price. d. Valid although may be annulled because of vitiated consent of S. 18. In contract of sale, if price is absolutely simulated, the sale is a. Unenforceable c. Voidable b. Void d. Rescissible 19. B in good faith purchased a diamond ring from C, a friend of his. C gave B a bill of sale. Later on, O identified the ring as the one she had lost about a year before. There is no question as to the truth of O’s allegation. In this case: a. O cannot recover the ring from B because the latter was in good faith when he bought the ring from C. b. O cannot recover the ring from B because it was lost by him (O) and found by C, therefore, C, as finder will be keeper and owner who could transfer ownership to B, an innocent purchaser for value. c. C is the one liable to O for damages while B becomes owner who could not be disposed being an innocent purchaser for value. d. O can recover the ring from B even if he is an innocent purchaser for value because C did not have title to convey to B. 20. A sold to B her GUAPO guitar. It was agreed that A would fix the price a week later. At the agreed time, A named the price P10, 000. B agreed. Was the sale perfected? a. No, because the price was left to the discretion of one of the contracting parties. b. No, because at the time of sale, the price was not fixed. c. Yes, because the price fixed by one of the parties was accepted by the other. d. Yes, because there was agreement that A would fix the price. SALES QUIZZER 2 1. The buyer is obliged to pay interest on the price from the time of delivery of the thing sold up to the time of payment in three of the following instances, except: a. should it have been stipulated b. should the thing produce fruits or income c. should the vendee be in default in the payment of the price d. should the vendee be insolvent 2. A form of delivery which takes place after the seller of the property continues in possession of said property no longer as owner but as mere possessor. a. Traditio constitutum possessorium b. Traditio symbolica c. Traditio brevi-manu d. Quasi-traditio 3. When goods are delivered to the buyer on “sale or return” the ownership passes to the buyer a. upon delivery of the goods b. upon the expiration of the period agreed upon c. upon acceptance of the buyer of the seller’s offer d. upon perfection of the sale 4. When things are delivered to the buyer on approval, trial, or satisfaction, the ownership passes to the buyer: a. upon delivery of the things b. upon meeting of minds c. upon conception of the sale d. upon return of the things to the seller 5. P orally appointed A as his agent to sell the former’s land. On January 3, 2001, A sold the land to B who forthwith took possession thereof. It turned out however, that on January 1, 2001, P, without informing A, had already sold the same to land to C, who up to now was taken possession of the same land. Neither of the sales was registered. Whose contract shall prevail? a. The sale to B for he was the first in possession in good faith. b. The sale to C for the land was first sold to him by the owner. c. The sale to B for the agent was duly authorized to sell the land d. The sale to C because the sale to B was void, A was not duly authorized by P. 6. S sold to A in a memorandum of agreement of sale his parcel of land. After a week, S sold the same land to B in a formal deed of sale. Upon buying the land, B who was aware of the sale to A, immediately took possession thereof and registered the sale in his favor. When informed of the second sale, A subsequently registered an adverse claim with the Registry of Deeds. The parcel of land shall belong to: a. A, because he has the older title. b. B, because the sale to him was in a formal deed of sale. c. B, because he first registered the sale in his favor. d. B, because he was the first possessor of the land. a. Exact fulfillment of the obligation, should the vendee fail to pay any installment. b. Cancel the sale, should the vendee’s failure to pay cover two or more installment. c. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure to pay cover two or more installments. d. Rescind the sale should the vendee fail to pay any installment. 20. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale. One week later, A sold the same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C was aware of the first sale, immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to a. B because he has got an older title. b. C because he is the first to register c. C because he is first to take possession d. No one as both sales are void. 21. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the same car to C and immediately effected delivery to C. On the day agreed upon, A did not deliver the car to B. Which is correct? a. B can cancel the contract between A and C, because the contract between A and B was perfected ahead of the contract between A and C. b. B should make a demand to make A in default. c. A is liable to B for the value of the car plus damages after B makes a demand. d. A is liable to B for damages and is in default without need for any demand. 22. Not an implied warranty in a contract of sale: a. right to sell the thing at the time of perfection of the contract b. reasonably fit for the purpose for which they are acquired c. merchantable in quality d. free from charges or encumbrances not declared or known to the buyer 23. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to B for a consideration of P1,000,000. Which is correct? a. The contract is valid if the value of inheritance is at least equal to P1, 000, 000. b. The contract is valid even though the inheritance to be turned over to B is less than P1M. c. The contract is void as future inheritance cannot be the object of sale. d. The contract is unenforceable 24. A sold his land to B. Later, A sold the same land to C. B in turn, sold the same land to D, who took possession of the land in good faith. C, a purchaser in good faith, registered the sale in his favor. Decide. a. B is the owner of the land because he was the first buyer. b. C is the owner of the land having registered the sale in good faith. c. D is the owner of land being the transferee of the rights of B and who is in possession in good faith. d. D is the owner because after A sold the land to B, A had no more right to transfer ownership to C, the second buyer. 25. A sold to B orally a parcel of land for P.5M. Delivery and payment were made four months later. When the said date arrived, A refused to deliver the land. Can B compel A to deliver? a. Yes, because the sale has been perfected already and obligations of the parties are reciprocally demandable. b. Yes, because there was an agreement to deliver after four months and that should be respected by the parties. c. No, because the sale although valid is unenforceable. d. No, because the sale is void, being orally entered into. 26. A buys from B a piece of land supposed to contain 1,000 sq. m. at the rate of P10,000.00 per sq.m. but the land actually contains 1,500 sq.m. Which of the following is not included in the rights of A? a. A may demand the delivery of the entire land with proportionate increase of the price. b. A may reject the excess of 500 sq.m. and accept only the 1,000 sq.m. c. A may rescind the contract of sale because what was delivered is not in accordance with the contract. d. None of the above. 27. A buys a land from B at the lump sum of P1M. In the contract, the area is stated to be 1,000 sq. m. The boundaries were mentioned in the contract. It was discovered, however, that the land within the boundaries really contains 1,500 sq.m. Which of the following is not a right of A? a. A may demand the delivery of all the 1,500 sq. m. without any price increase. b. If B refuses to deliver all the 1, 500 sq. m. A may demand proportionate reduction of the price. c. A may rescind the contract of sale if B does not deliver all that is included in the boundaries. d. A may treat the contract as void ab initio because the object is not determinate as to its kind. 28. A bought a pair of shoes from a shoe store and repair shop. It was later discovered, however, that the shoes did not belong to the store but a customer who had left the same for repair. Did A acquire good title to the shoes? a. No, because it was sold by the store which is not the owner thereof. b. No, because it is the fault of A in not exercising diligence in buying the shoes as to its real ownership. c. Yes, because it was bought from a store in good faith and for value. d. Yes, because the owner of the shoes was precluded from setting up want of authority of the store in selling the shoes. 29.A sold his only car to B for P300,000 to be paid as follows. P150,000 upon delivery of the car to B and the balance at P10,000 per month until full payment of the purchase price. Later, the car gets burned in the possession of B through fortuitous event before full payment of the balance. Is B obliged to pay the balance? a. No, because the car was lost through fortuitous event and without B’s fault, hence B’s obligation is extinguished. b. No, because the loss should be borne by the seller as this is an instalment sale so until the buyer pays the full amount of the price of the sale, A remains to be the owner. c. Yes, but A must give another car to B because of the principle “genus non quam peruit” or generic thing never perishes. d. Yes, because of the principle that “res perit domino” or the thing perishes with the owner. 30. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is liable to the value of the thing at the time of eviction a. Waiver intentionada c. Waiver cursunada b. Waiver consciente d. Waiver inocente 14. Not an element of the sellers right of stoppage in transitu a. The good must be in transit c. The seller must be in possession of the goods b. The buyer must be insolvent d. the seller must be unpaid 15. A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the car to B and the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in the possession of B through fortuitous event before full payment of the balance. Is B obliged to pay the balance? a. No, because the car was lost through fortuitous event and without B’s fault, hence B’s obligation is extinguished b. No, because the loss should be borne by the seller as this an installment sale so until the buyer pays the full amount of the price of the sale, a remains to be the owner c. Yes, but A must give another car to B because of the principle “Genus nunquam percuit” or generic thing never perishes d. Yes, because of the principle “ res perit domino” or the thing perishes with the owner 16. The Recto Law applies to which of the following examples of sale? a. Sale of a car on a straight term. b. Sale of house and lot on installment. c. Sale of car on installment where the buyer constituted a mortgage on his truck. d. Sale of a piano on installment where the buyer constituted a chattel mortgage on the piano. 17. B purchased from S a laptop computer worth P100, 000.00. The terms of the sale provide for a down payment of P20, 000.00 with the balance payable in 8 equal monthly installments. To secure the balance, S required B to execute a chattel mortgage on the laptop computer and a real mortgage on B’s lot. B complied with all the requirements but defaulted in the payment of the third and fourth installments. These remedies are available to S except one. Which is it? a. Cancel the sale. b. Exact fulfillment of the obligation. c. Foreclose the real mortgage and thereafter recover any deficiency from B. d. Foreclose the chattel mortgage and thereafter the real mortgage in case of deficiency. 18. P, who was in Hong Kong, made an overseas call to a, his friend, to sell P’s lot in Quezon City immediately as P needed cash. According, A sold the lot to B. the deed of the sale as in a public document. The sale of P’s lot is: a. Valid b. Rescissible c. Unenforceable d. Void 19. Under the “Realty Installment Buyer Act”, the buyer of real estate on installment payments may pay an installment defaulted without addition interest if he has paid at least two years of installments. The law is applicable to sales/transactions involving: a. Industrial lots b. Commercial buildings c. Residential lots d. Sales to tenants under the Land Reform Law. 20. S, the owner of the rent-a-car business, leased one of his cars to B for one month. On the day of the expiration of the lease and while B was still in possession of the car, B offered to buy the car from S for executed a deed of absolute sale in favor of B who immediately paid the price in cash. Thereafter, B drove away from the place of S. a. The delivery of the car by S to B is by constitutum manu. b. The delivery of the car by S to B is by traditio longa manu. c. The delivery of the car by S to B is by traditio brevi manu. d. There was no delivery because B should have turned over the possession of the car to S upon the expiration of the lease so that S could make the proper delivery to him upon the expiration of the lease so that S could make the proper delivery to him upon the execution of the contract of sale. CREDIT TRANSACTIONS QUIZZER 1. Which of the following statement is true? a. Any stipulation in a contract of pledge authorizing the pledgee to sell the thing pledged if the pledgor cannot pay is void. b. In mortgage, the mortgagee is entitled to the entire proceeds of the sale of the thing mortgaged. c. In mortgage and in pacto de retro sale, the title to the property which is the subject matter of the contract is transferred to the other party. d. Real estate mortgage is an accessory contract. 2. In real estate mortgage, the mortgagor can sell the property mortgaged. a. Only if with the oral consent of the mortgagee. b. Only if with the written consent of the mortgagee. c. If not prohibited to sell. d. Even without the consent of the mortgagee. 3. Elements of contracts of pledge and mortgage, except: a. Pledgor or mortgagor must be the absolute owner. b. Pledgor or mortgagor must have the free disposal of the thing pledged. c. The thing pledged or mortgaged may be appropriated if the debtor cannot pay. d. Pledge and mortgage are accessory contracts. 4. A borrowed P100,000 from B with A’s ring given to B by way of pledge. It was stipulated that in case of nonpayment on due date, the ring would belong to B. This forfeiture is: a. caveat emptor c. pactum comisorio b. dacion en pago d. pacto de retro 5. A borrowed P100,000 from B, and as a security, A pledged his ring to B. After the obligation falls due, A goes to B relinquishing ownership of the ring in favor of B. This is: a. cavear emptor c. pactum comisorio b. dacion en pago d. pacto de retro 6. A borrowed P30,000 from B, and as security, he pledge his ring, pair of earrings and necklace. On due date, A paid P20,000. As a result, a. A can demand the return of one (1) of the things pledged. b. A can demand the return of any two (2) of the things pledged. c. A can demand the return of the ring. d. A cannot demand the return of any of the things pledged. 7. A mortgaged his residential land to B as a guarantee for the payment of P400,000 obligations to B. They agreed that A should not sell the land while the obligation exists. Before the maturity of the mortgage, C offered to buy the land from A. Which is correct? a. A cannot sell the land to C because of the agreement not to sell. b. A can sell the land to C only if B consents in writing. c. A can sell the land to C despite the agreement not to sell. d. A cannot sell the land to C unless A pays the obligation. 19. A pledge his wristwatch to B for a loan of P1.4M. Due to A’s failure to pay his debt, B auctioned the watch and was sold to C for P.15M. Can A recover the excess? a. A cannot recover the excess even if so stipulated by the parties. b. A can recover the excess if so agreed upon by the parties. c. A can recover the excess even if not so stipulated d. A stipulation allowing the excess to go to the pledgor is void 20. In a pledged created by operation of law, after payment of the debt and expenses, the remainder of the price of the sale of the sale in auction shall be delivered to the obligor, pledgor being entitled to the excess. If a credit which has been pledged becomes due before it is redeemed, the pledge may collect and receive the amount due and apply the same to the payment of his claim with the excess going to the pledgor. a. Both statements are false. c. First is false, second is true. b. Both are true. d. First is true, second is false. 21. A mortgaged his Rolex watch to B for a loan of P.2M. Due to the failure of A to redeem the security, B sold the same at public auction for P.15M to the highest bidder. a. B can recover the deficiency of P.05M from A b. B can recover the deficiency from A if so stipulated c. B can recover the deficiency if there is no contrary agreement d. B cannot recover the deficiency even if there is stipulation 22. The difference between a chattel mortgage and a pledge is that in chattel mortgage: a. The delivery of the personal property is necessary. b. The registration of the contract with the Register of Deeds needed. c. The excess over the amount due after foreclosure sale goes to creditor. d. The debtor is not liable for the deficiency after foreclosure. 23. X borrowed money from Y and gave a piece of land as security by way of mortgage. It was agreed between the parties that upon non-payment of the loan, the land would already belong to Y. If X failed to pay the debt, would Y now become the owner of the land? a. Y would become the owner because it was agreed upon by them based on the principle of autonomy of contracts b. Y would not become the owner because the agreement that he would become the owner upon default of X is against the law c. Y would become the owner but with the right redemption by X d. Y would not become owner if X annuls the voidable agreement 24. Suppose in the preceding question, they subsequently agreed that if X defaulted in the payment of his debt, it shall be paid with the land mortgaged to Y. Would your answer be the same? a. Yes, because it is still an agreement prohibited by law b. Yes, because the agreement is voidable which X can annul c. No, because stipulation is not against the law d. No, provided the stipulation in writing 25. In 1982, D borrowed P.4M from C, collateral by a pledge of shares of stocks of X corporation worth P.8M. In 1983, because of the economic crisis, the value of the shares pledged fell to only P.1M. Can C demand that D surrender the other shares worth P.7M? a. Yes, because the collateral as security for the loan was worth P.8M and therefore the other shares of P.7M must delivered. b. No, because the only right of C is to sell the shares at the public auction and keep the proceeds as security for the loan. c. No, because the right of C is to demand immediate payment of the loan. d. No, because the right of C is to demand another thing worth P.8M. 26. C lent to D P.1M. As security for the loan, D pledged his Rolex watch. When D failed to pay the loan, C foreclosed the pledge and the watch was sold only for P.08M. May C still claim payment of the deficiency from D? a. D is no longer liable for the deficiency unless otherwise agreed b. D is not liable for the deficiency despite stipulation to the contrary c. D is still liable for the deficiency even in the absence of agreement d. D is still liable if agreed upon 27. In the preceding case, suppose it was a contract of mortgage, can C still claim payment of the deficiency? a. Yes, provided it was agreed upon b. No, unless there was stipulation c. Yes, even in the absence of stipulation d. No, even if stipulated 28. Still in no. 26, suppose the watch was sold at a price greater than the amount of loan, who is entitled to the excess? a. C is entitled to the excess even in the absence of stipulation b. D is entitled if there is stipulation c. D is entitled even if there is no stipulation d. D is not entitled even if there is stipulation (A/B pwede sila dalawang answer pero A is the better answer daw kasi based on general rule. the general rule is kay creditor) 29. If chattel mortgage? a. C is entitled to the excess unless there is a contrary stipulation b. D is entitled if so stipulated c. D is entitled even in the absence if stipulation d. D is entitled even if not stipulated (both pwede, same lang daw yan. Pag lumabas sa quiz, dasal lang) 30. A constituted in 1999 a real estate mortgage on his land and a chattel mortgage on his car to secure the payment of a debt pf P.2M which he then owned to B, as well as other loans he may receive from him in the future. A paid his debt of P.2M but not the loan of P.03M which he obtained in 2000. Can A foreclose both mortgages for the P.03M loan obtained in 2000? a. No, because the mortgagee can only foreclose one of the mortgages applying the Recto Law to prevent collection of deficiency b. No, only the mortgage on the car can be foreclosed c. No, only the mortgage on the land can be foreclosed d. Yes, both mortgages d. All the properties which belong to each of the partners at the time of the constitution of the partnership as well as properties which may acquire therewith 13. The following are instances, except one, when partnership is unlawful. Which is the exception? a. A partnership formed to furnished apartment houses to be use as venue for illegal gambling b. A partnership formed to create cartel for monopolies c. A partnership formed for smuggling of contrabands d. A partnership formed for the purpose of buying public lands 14. A person in a partnership who is not really a partner, not being a party to the partnership agreement but is made liable as a partner for the protection of innocent third persons is known as a. Dormant partner b. Secret partner c. Partnership by estoppel d. Partner by estoppel 15. B and Y orally agreed to form a partnership. Each contributed cash and properties worth P10,000 to common fund, but they did not register the partnership with the Securities and Exchange Commission a. The partnership is void b. The partnership is voidable c. The partnership is still valid d. The partnership is unenforceable 16. Partnership as distinguished from corporation a. Acquires juridical personality upon approval by the SEC and issuance of certificate b. Has limited liability c. Created by operation of law d. No power of succession 17. Essential elements or feature of a partnership, except a. Must have a lawful object or purpose b. There must be a contribution of money, property or industry to a common fund c. With intention to divide and contribute whatever profits they make to other people d. Must be established for the common benefit or interest of the partners 18. One of the following is not a characteristic of contract of partnership a. Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected. b. Principal, because it can stand by itself. c. Preparatory, because it is a means by which other contracts will be entered into. d. Onerous, because the parties contribute money, property or industry to the common fund. 19. One of the following is not a requisite of a contract of partnership. Which is it? a. There must be a valid contract. b. There must be a mutual contribution of money, property or industry to a common fund. c. It is established for the common benefit of the partners which is to obtain profits and divide the same among themselves. d. The articles are kept secret among the members. 20. 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 a public instrument and be registered with SEC a. P5,000 b. P10,000 c. P3,000 d. P30,000 PARTNERSHIP QUIZZER 2 1. A and B are partners in a real estate business. A and B were approached by X who offered to buy a parcel of land owned by the partnership. Thereafter B sold to A, B’s share in the partnership. Then A sold the land to X at big profit. Which is correct? a. The sale of the land to X is void. b. A is liable to B for B’s share in the profits. c. B may rescind the contract between A and X. d. A is not liable to B for any share in the profits. 2. Statement 1: In the absence of stipulation, the share of industrial partner in the profits shall be equal to the share of a capitalist partner with the smallest share. Statement 2: The industrial partner shall not share in the losses unless stipulated. a. First statement is false, second is true. b. First is true, second is false. c. Both are true. d. Both are false. 3. A is the capitalist partner and B is the industrial partner. A engaged personally in the same kind of business as that of the partnership. a. If there are profits, A shall give them to the partnership. b. If there are losses, the partnership will bear the losses. c. If there are profits, A shall share the profit with the partnership. d. A may be excluded from the partnership but without damages. 4. Suppose in the same facts as aforementioned, B engages in business on his own account but different from that of the partnership. a. If there are losses, B and the partnership shall equally share. b. If there are profit, B and the partnership shall share equally. c. B may be excluded from the partnership with damages. d. B may be excluded from the partnership but without damages. 5. A, a managing partner, is B’s creditor to the amount of P1,000 already demandable. B also owes the partnership P1,000, also demandable. A collects P1,000 from B. One is not correct. a. If A gives receipt for the partnership it is the partnership’s credit that has been collected. b. If A gives a receipt for his own credit, it is A’s credit that has been collected. c. If A gives a receipt for his own credit, P500 will be given to him, P500 to the partnership. d. B may decide that he is paying only A’s credit if the personal credit of A is more onerous to B. 6. A, B and C are partners. Their contributions are as follows: A, P60,000; B, P40,000 and C, services. The partners agreed to divide profits and losses in the following proportions: A, 35%; B, 25% and C 40%. If there is a loss of P10,000 how should the said loss be shared by the partners? a. A, P6,000; B, P4,000; C, nothing b. A, P3,000; P2,000; C, P5,000 c. A, P3,500; B, P3,500; C, P3,000 d. A, P3,500, B, P2,500; C, P4,000 d. Nothing, because he is an industrial partner 20. Statement 1: An agreement which excludes one or more partners from shares on the profits or losses is valid as long as it is voluntarily. Statement 2: The power of a managing partner granted after the partnership has been constituted may be revoked at any time. Statement 3: None of the partners may make any important alteration in the immovable property of the partnership even if useful to the partnership without the consent of all partners. a. All statements are correct. b. Only statement 3 is correct. c. Only statement 2 is correct. d. Only statements 2 and 3 are correct. 21. Which of the statement is not true? a. Every partner must account to the partnership for any benefit received even if it is not owing to the partnership. b. A partner is a co-owner with his partners in relation to a specific partnership property. c. A sale or assignment by a partner of his whole interest in the partnership does not of itself dissolve the partnership. d. All the partners share in the losses is always. 22. D and E are capitalist partners while F is an industrial partner in their restaurant business. Later, F put up a cellular phone loading stations, sells call card and other cell phone accessories. Has F any liability under the circumstances? a. No, since his other business is not competing with the business of the partnership. b. Yes, because he can’t engage in business for himself always. c. Yes, because he is precluded by law to engage in any other business, except if there is stipulation allowing him. d. No, there is no showing that the business of the partnership is being prejudiced. 23. In the preceding no., will your answer be the same if F is a capitalist partner? a. No, because a capitalist partner is allowed to engage in other business that is not related to or in line with the business of the partnership. b. No, because he is free to engage in any business. c. Yes, because the partnership did not allow him to engage in business. d. Yes, because it competes with and prejudices the business of the partnership. 24. X, Y and Z are partners who contributed equally to the capital of the partnership. A owes the partnership P9,000.00. Z collected from A P3,000.00 before X and Y could receive anything from A, who later became insolvent and therefore, they could not collect their shares. a. Partner Z shall share the P3,000.00 with his co-partners X and Y. b. Z cannot be required to share what he already received from A. c. X and Y should first exhaust all remedies to collect from A. d. X and Y can automatically deduct from the capital contribution of Z in the partnership their respective shares in the P3,000.00. 25. Three of the following are property rights of a partner. Which is not? a. Right to specific partnership property. b. Right to participate in the management. c. Right to demand formal accounting of partnership affairs. d. Interest of the partner in the partnership PARTNERSHIP QUIZZER 3 1. A, B, and C are equal partners in ABC Partnership. The partnership is indebted to D for P150,000. Partner A is indebted to E for P20,000. D attached and took all the assets of the partnership amounting to P90,000. B and C are solvent while A is insolvent and all that he owns is a land valued at P15,000. Which is correct? a. E has priority to the land of A as a separate creditor . b. D has priority to the land of A to cover A’s share of the P60,000 remaining liability of partnership. c. B and C have priority to the land of A if they paid D the P60,000 remaining liability of the partnership. d. D and E shall both have priority to the land of A in proportion to their claims of P60,000 and P20,000, respectively. 2. The liability of the partners, including industrial partners for partnership contracts entered into in its name and for its account, when all partnership assets have been exhausted is a. Pro-rata b. Joint c. Solidary d. Voluntary 3. M, J, and G formed a general partnership with a capital of P100,000 and the partners contributing 50%, 30%, and 20%, respectively. O has a claim of P160,000 against the partnership. If O files a suit to collect her claim, which of the following is not correct? a. All the partners are liable to the extent of their separate property. b. All the partners shall be liable pro-rata with all their property only after the partnership assets have been exhausted. c. The personal liability of the partners is merely joint and not solidary. d. After exhaustion of the partnership assets, M, J and G shall be liable 50%, 30%, and 20%, respectively, of the unpaid claim. 4. A, B, C, and D are general partners contributing P20,000, P30,000, P50,000 and industry, respectively. At the time of liquidation, the partnership is indebted to Y for P50,000, to partner A for P30,000, and to partner B for P20,000. If the assets of the partnership amounts only to P20,000, which of the following is correct? a. Y can collect P20,000 from the partnership and from partners A, B, and C at P10,000 each. b. After exhausting the assets of the partnership amounting to P20,000, Y can collect from partners A, B, C, and D at P7,500 each. c. Y can collect P20,000 from the partnership and P30,000 from either partners A or B or C or D. d. If Y succeeds in collecting the P30,000 from the separate properties of the partners concerned, partners A, B, and C will be required to make additional contribution. 5. D and E are partners of DE partnership by contributing P50,000 each on June 1, 2020. On June 2, 2020, the partnership contracted an obligation to pay Z in the amount of P180,000. On July 15, 2020, F was admitted as a new partner, contributing P50,000. How will the obligation be paid? a. D – P60,000; E– P60,000; F – P60,000 b. D – P65,000; E – P65,000; F – P50,000 c. D – P90,000; E – P90,000; F – P90,000 d. D – P180,000; E – P180,000; F – none 14. A, B, and C are partners in ABC Company. D represented himself as a partner in the partnership to E who, on the belief of such representation, extended credit of P50,000 to the partnership. Assuming only B and C consented to such representation, who shall be liable to E? a. All of A, B, C and D are liable because of partnership liability for the credit extended to the partnership b E. b. B, C and D are partners by estoppel and thus, are liable to E pro rata. c. Partners A, B and C are liable to E for the benefit extended to them. d. Only D who made the representation is liable to E. 15. A and B capitalist partners in AB partnership by contributing P50,000 each on June 1, 2020. On July 1, 2020, the partnership contracted an obligation to pay Z in the amount of P180,000 on August 31, 2020, On August 10, 2020, C was admitted as a new partner. C contributed P50,000. How will the obligation be paid? a. A P60000; B P60,000; C P60,000 c. A P180,000 or B P180,000 and C P50,000 b. A P90,000; B P90,000; C None d. A P65,000; B P65,000; C P50,000 PARTNERSHIP QUIZZER 4 1. It is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. a. Partnership liquidation b. Partnership incorporation c. Partnership termination d. Partnership dissolution 2. 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. 3. Which of the following will not cause the automatic dissolution of a general partnership? a. Death of a partner b. Insolvency of a partner c. When the partnership business becomes unlawful d. Insanity of a partner 4. Which of the following is not an automatic cause of general partnership dissolution? a. When any event makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership. b. Expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners. c. A partner becomes in any way incapable of performing his part of the partnership contract. d. The insolvency of a partner or of the partnership. 5. Which of the following will not cause the automatic dissolution of limited partnership? a. Death of a general partner b. Death of a limited partner c. Insolvency of a general partner d. Insanity of a general partner 6. J, E, W, E, and L are partners in JEWEL Company, Ltd. J, E, and W are general partners, E is a general limited partner, while L is a limited partner. Based on the foregoing information, which of the following statements is false? a. J, E, and W may be held liable with their separate property after the exhaustion of partnership assets. b. E may participate in the management of the partnership. c. E may not be held liable with her separate property of partnership debts after the exhaustion of partnership assets. d. L may be held liable with her separate property for partnership debts after the exhaustion of partnership assets. 7. Statement 1: As a rule, a limited partner whose surname appears in a partnership name contrary is liable as a general partner to partnership creditors. Statement 2: If the limited partner takes part in the control of the business, he is likewise liable as a general partner. a. Both statements are correct b. Only the first statement is correct c. Only the second statement is correct d. Both statement are not correct 8. Statement 1: After dissolution, the partners can still enter into new business transactions in the name of the dissolved partnership although not for the purpose of winding up partnership affairs. Statement 2: Insanity of either general or limited partner in a limited partnership shall dissolve the partnership. a. Both statements are false. b. Both are true. c. First is false, second is true. d. First is true, second is false. 9. Which of the following incidents maybe a cause for involuntary dissolution of a partnership? a. Expulsion of any partner b. Insolvency of any partner c. Express will of any partner d. Termination of term of the partnership 10. This is the order of preference in the liquidation of a general partnership. a. Outside creditors; partners are creditors; partners’ capital; partners profit b. Outside creditors; partners creditor; partners profits; partners creditors c. Partners as creditors; outside creditors; partners’ capital; partners profits d. Partners’ capital; outside creditors; partners as creditors; partners profit 11. A, B and C are equal partners in ABC Partnership. The partnership is indebted to D for P150,000. Partner A is indebted to E for P20,000. D attached and took all the assets of the partnership amounting to P90,000. B and C are solvent while A is insolvent and all that he owns is a land valued at P15,000. Which is correct? a. E has priority to the land of A as a separate creditor b. D has priority to the land of A to cover A’s share of the P60,000 remaining liability of partnership c. B and C have priority to the land of A if they paid D the P60,000 remaining liability of the partnership d. D and E shall both have priority to the land of A in proportion to their claims of P60,000 and P20,000, respectively. 12. Three of the following dissolves a partnership except: a. Partnership business has become unlawful. b. Death, civil interdiction or insolvency of a partner. c. Expulsion of a partner. d. Partnership business can only be carried on at loss. 13. A limited partner who takes active participation in the management of the partnership shall become