Prtc Obligation

1 PRTC OBLIGATION 1. A mango tree in the land of O is reclining towards the road. All of a sudden, without a storm or an earthquake or even strong wind, the tree falls hitting a car belonging to X causing a P20, 000 damage. The liability of O to X arises from: a. a. Law b. Contract c. Quasi –contract d. Delict e. Quasi – delict 2. The obligation of the employer to pay death benefits and funeral expenses for his employer’s death while in the course of employment as sanctioned by the Workmen's Compensation Act is one that arises from: a. Law b. Contract c. Quasi contract d. Answer not given 3. The buyer of a thing has the right to the fruits of the thing a. From the time the thing bought is delivered. b. From the time the sale is perfected. c. From the time the obligation to deliver the thing bought arises d. From the time fruits are delivered. 4. The following are the requisites of an obligation, except: a. Passive subject; debtor or obligor b. Active subject; creditor or obligee c. Efficient cause d. Demand 5. Unless the law or the stipulation of the parties required another standard of care, the obligation to give a thing carries with it obligation to take care of it with: a. Extra ordinary diligence b. Ordinary diligence c. Diligence of a good father of a family d. Answer not given 6. If the obligation of the debtor is "I will pay you my debt after I have arrived from abroad," this is contact: 1 PRTC a. Unenforceable b. With a Period c. Void d. Conditional 7. Defense of good father of a family in the selection and supervision of employee is a proper and complete defense in: a. Culpa contractual b. Culpa aquiliana c. Culpa criminal d. Both B and C 8. D is driver of a passenger bus which is owned and operated by O. While D, driving said bus, it met an accident through his negligence where P, a passenger, was injured. D is liable to P for damages which arises from: a. Law b. Contracts c. Crime d. Quasi – delict 9. O is the owner of a night club where SC is a singer crooner receiving a monthly salary 80,000. The obligations of O and SC are a. Both real b. Both personal c. Real in the part of O. d. Real in the part of O but personal in the part of SC 10. In Accion subrogatoria the creditor may exercise all of the rights and bring all of the actions which the debtor may have against third persons if: a. the account is personal b. The debtor's acts are fraudulent c. The debtor has performed an act subsequent to the contract, giving advantage to other persons d. Creditor must have the right of return against debtor 11. Proof of pecuniary loss is necessary for the award of: a. Liquidated damages b. Actual damages c. Exemplary damages d. Temperate damages 1 PRTC 12. When A voluntarily takes charge of the neglected business of B without the latter’s authority where reimbursement must be made for necessary and useful expenses, there is a: a. Quasi – delict b. Negotiorum gestio c. Quasi – contract d. Solutio indebiti 13. There shall be no liability for loss due to fortuitous events in one of the following cases. Which is it? a. When the debtor delays b. When the parties so stipulated that mere shall be liability even in case of loss due to fortuitous events. c. When the nature of the obligation requires the assumption of risks. d. When the obligation is to deliver a determinate thing and there was no stipulation as to the liability of the debtor in case of loss due to fortuitous events. 14. S sold 100 bottles of imported “Fundado” brandy to B who paid immediately the price thereof amounting to P20, 000. S promised to deliver the brandy to B within one week from their agreement. On the agreed date of delivery, S delivered to B 130 bottles of fake "Fundado” brandy. The contract between S and B is: a. Voidable b. Valid c. Void d. Rescissible 15. On a certain year, D was obliged under a contract executed on March 1 to deliver an agricultural land to C on April 1. D, however, actually delivered the land and the fruits thereof to C on May 1. C became the owner of the agricultural land and the fruits thereof on: a. March 5 b. April 1. c. May 1. d. The period should be fixed by the court so that it could be determined when C actually became the owner of the agricultural land and its fruits. 16. This obligation is demandable at once: a. Pure obligation 1 PRTC b. Obligation subject to resolutory condition c. Obligation with an in diem period d. All of the above 17. When the thing deteriorates pending the fulfilment of the suspensive condition without the fault of the debtor, the impairment is: a. To be borne by the party who caused the deterioration b. To be borne partly by the debtor and partly by the creditor c. To be borne by the debtor d. To be borne by the creditor 18. One of the following obligation is not immediately demandable. a. Pure obligation b. Obligation subject to resolutory condition c. Obligation with an in diem period d. Obligation with an ex die period 19. One of the following is determinate thing. Which is it? a. Cow b. A horse c. A Toyota car with engine no. 12345, body no. 34890 and plate no. ABC 123 d. A ring with diamond embellishment 20. The person is liable for the loss of subject matter by fortuitous event: a. Creditor b. Debtor c. Both A and B d. None of them 21. A to sell E his lot and house in the city if A decides to transfer and live in the countryside is an example of: a. Mixed condition b. Potestative condition c. Casual condition d. Resolutory condition 22. The following are the remedies of the creditor to pursue his claims against the debtor, except to a. Pursue the property owned and in possession of the debtor 1 PRTC b. Exercise all the rights and bring all the actions of the debtor (accion subrogatoria). c. Impugn the acts which the debtor may have clone to defraud his creditors (accion pauliana). d. Compel the debtor to perform the service in obligations to do. 23. One of the following is a valid obligation. Which is it? a. D promised to give C P50, 000.00 if C will not swim across the Pacific Ocean. b. D promised to give C PS0, 000.00 if D goes to Tokyo. c. D promised to give C PS0, 000.00 if C can fly to the moon. d. D promised to give C P50.000.00 if C gives him 5 grams of marijuana. 24. Demand is not necessary to incur delay when: a. Creditor refuses the performance without just cause. b. The debtor is guilty of non-performance. c. Time is the controlling motive d. If the obligation bears interest 25. D borrowed from C P5, 000,000 promising to pay upon the sale of his house and lot at 123 Rizal Avenue, Manila. The obligation of D to C is: a. an obligation with a period b. an obligation with a potestative condition the fulfilment of which solely depends on the will of the debtor and therefore void. c. C can collect only when D is able to sell the house and lot d. Only the condition is nullified, but not the obligation in which case C can collect even if the house and lot is not sold. 26. In the following cases, the debtor loses the right to use the period in which case the obligation becomes immediately demandable. Choose the exception: a. When after the obligation is contracted, the debtor becomes insolvent but he gives a collateral security or guaranty. b. When he fails to furnish the collateral security that he has promised. c. When the collateral is impaired whether through his fault or by fortuitous event. d. When the debtor attempts to abscond. e. None of the above 1 PRTC 27. When the debtor binds himself to pay when his means permit him to do, the obligation is considered as one: a. With a condition dependent upon the debtor's sole will. b. With a period. c. That is void. d. Answer not given. 28. An obligation with a period a. D will pay C P1, 000 X dies. b. D will pay C when X dies of TB c. D will pay C when he finishes his course in Business Administration d. None of the above 29. In a joint obligation, joint means any of the following, except: a. Pro rata b. Mancomunada simple c. Individually and collectively d. Proportionate 30. In what instance may we consider that there is no delay? a. In civil obligations b. In positive obligation c. In obligation arising from crime d. In natural obligation 31. A solidary obligation is one in which each of the debtor is liable for the entire obligation or debt and each of the creditors is entitled to the entire credit. Obligations shall also be considered solidary under the following three exceptions. Which does not belong to the exceptions a. When solidary is expressly stipulated in the obligation. b. When the prestation is indivisible and there are two or more debtors and creditors. c. When the law expressly provides solidarity. d. When solidarity is required from the nature of the obligation. 32. D is under obligation to deliver to C a Toyota Altis with an engine no. . When D was on the way to deliver the car, it was destroyed at a time when D was not yet in delay. The law presumes that the loss is due to a. The defective nature of the car b. A fortuitous event 1 PRTC c. The fault on the part of D d. The fault or negligence of the debtor 33. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a loan" from a certain bank, this obligation is: a. With a Term b. Conditional c. Suspensive d. Resolutory 34. Consignation is a mode of payment which extinguishes an obligation. Which of the following is not a requisite for consignation? a. Actual consignation with the proper judicial authorities. b. Prior notice has not been made. c. Existence of a valid debt d. There must be prior notice of consignation to persons interested ln the fulfilment of the obligation 35. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to sell to satisfy his credits, this is: a. Remission b. Dation in payment c. Payment by cession d. Expromission 36. Which of the following is not an element of compensation a. Debts to be compensated are due and demandable b. There is controversy or adverse claim over any debts to be compensated c. There are two or more debts of the same kind d. There are two persons who are creditors and debtors of each other. 37. This happened when the creditor make a demand and the obligor fails to deliver the thing. a. Negligence b. Mora solvendi c. Mora accipiendi d. Compensatio morae 38. Delivery of property in satisfaction of a debt in money is: a. Adjudicacion en pago 1 PRTC b. Payment by cession c. Consignation d. None of the above 39. Insolvency of the debtor is required in: a. Dation in payment b. Payment by cession c. Tender of payment and consignation d. Application of payment 40. When two persons in their own right are debtors and creditors of each other, there is a. Confusion b. Condonation c. Confusion d. Compensation 41. D owes C P50, 000. Subsequently, D proposed to C that T will assume his (D’s) debt. C accepted the proposal of D. This substitution of debtor is known as: a. Expromission b. Delegation c. Tradition d. Dacion en pago 42. D obliged himself to give 5 grams of shabu to C. Later, the parties agreed that D would instead give to C 5 sacks of rice. Which of the following statements is correct? a. The novation is void because the original is void. Hence, C cannot demand the delivery of 5 sacks of rice from D b. The novation is valid because the new obligation is valid. Hence, C can demand the delivery of 5 sacks of rice from D. c. The original obligation although void is validated by the new obligation. Hence, C can demand the delivery of 5 sacks of rice from D. d. The new obligation is voidable because D had not yet performed the original obligation at the time of novation. Accordingly, the new obligation is binding and C may demand the delivery of 5 sacks of rice from D until the new obligation is annulled by proper action in court. 43. The distinction between conventional subrogation and assignment is that in conventional subrogation 1 PRTC a. It is a mere cession of right. b. An obligation is extinguish and another appears. c. The same obligation without being extinguished, transferred to another. d. Answer not given 44. An obligation ceases to be alternative and becomes a simple obligation in the following cases except: a. when the debtor has communicated his choice to the creditor b. when the right of choice has been expressly granted to the creditor and his choice has been communicated to the debtor c. when among the several prestations that are due only one is practicable d. when three prestatations are due but one of them is unlawful or impossible . 45. It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which the parties become bound to each other to the end that no one shall be unjustly enriched or benefited at the expense of another. a. Agreement b. Vinculum juris c. Contracts d. Quasi-Contracts 46. Action to impugn or rescind acts or contracts done by the debtor to defraud the creditors a. Accion reinvindicatoria b. Accion subrogatoria c. Accion pauliana d. Accion quanti-minoris 47. It causes the extinguishment or loss of rights already acquired upon the fulfilment of the condition, that is, the happening of the event which constitutes the condition. In other words, the fulfilment of which will extinguish an obligation (or right) already existing. a. Condition subsequent b. Suspensive c. Facultative condition d. Positive condition 48. This takes place when something is received when there is no right to demand it, and it was unduly delivered thru mistake. 1 PRTC a. Solutio Indebiti b. Negotiorum Gestio c. Vinculum juris d. Prestation 49. It is a future and certain event upon the arrival of which the obligation (or right) subject to it either arises or is terminated. a. Fortuitous events b. Condition c. Period d. Date and time 1 PRTC CONTRACTS 1. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet are: a. Voidable b. Rescissible c. Void d. Unenforceable 2. Through insidious words or machinations, A was able to induce B to enter into a contract which without them B would not have agreed to it. There is: a. Undue Influence b. Fraud c. Mistake d. Misrepresentation 3. A contract is in the stage of conception when: a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to an agreement. d. The contract is perfected. 4. Contracts entered into in a state of drunkenness or during a hypnotic spell are: a. Void b. Valid c. Voidable d. Legal 5. It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which the parties become bound to each other to the end that no one shall be unjustly enriched or benefited at the expense of another. a. Agreement b. Vinculum juris c. Contracts d. Quasi-Contracts 1 PRTC 6. In Accion Pauliana Rescission, which involves the right of the creditor to attack or impugn by means of rescissory action any act of the debtor which is in fraud and to the prejudice of his rights as creditor provided: a. The debt is due and demandable b. There is a failure of the debtor to collect his own debt from 3rd persons either through malice or negligence c. The debtor's assets are insufficient d. The debtor has performed an act subsequent to the contract, giving advantage to other persons 7. Can future inheritance be the subject of a contract of sale? a. No, since it will put the predecessor at the risk of harm from a tempted buyer, contrary to public policy. b. Yes, since the death of the decedent is certain to occur. c. No, since the seller owns no inheritance while his predecessor lives. d. Yes, but on the condition that the amount of the inheritance can only be ascertained after the obligations of the estate have been paid. 8. Lennie bought a business class ticket 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 the 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 tortious act. c. Yes, since the facts show a breach of contract, not a quasidelict. d. Yes, since quasi-delict presupposes the absence of a preexisting contractual relation between the parties. 9. Rene and Lily got married after a brief courtship. After one month, Lily discovered that while Rene presented himself as a macho man he was actually gay. He would not go to bed with her. He kept obscene magazines of nude men and always sought the company of handsome boys. What legal remedy does Lily have? 1 PRTC a. She can file an action for annulment of marriage on ground of fraud. b. She can seek a declaration of nullity of the marriage based on Rene’s psychological incapacity. c. She can go abroad and file for divorce in a country that can grant it. d. She has none since she had the opportunity to examine the goods and freely entered into the marriage. 10. Manuel came to Manila and married Marianne. Unknown to Marianne, Manuel had been previously convicted in Palawan of theft and served time for it. After Marianne learned of his previous conviction, she stopped living with him. Can Marianne seek the annulment of the marriage based on Manuel’s non- disclosure of his previous crime? a. No, since the assumption is that marriage forgives all past wrongs. b. Yes, since the non-disclosure of that crime is the equivalent of fraud, which is a ground for annulment. c. No, in case of doubt, the law must be construed to preserve the institution of marriage. d. No, since Manuel already served the penalty for his crime. 11. An agent, authorized by a special power of attorney to sell a land belonging to the principal succeeded in selling the same to a buyer according to the instructions given the agent. The agent executed the deed of absolute sale on behalf of his principal two days after the principal died, an event that neither the agent nor the buyer knew at the time of the sale. What is the standing of the sale? a. Voidable. b. Valid. c. Void. d. Unenforceable. 12. Fidel, a Filipino with fair complexion, married Gloria. Before the marriage, Gloria confessed to Fidel that she was two-month pregnant with the child of a black African who had left the country for good. When the child was born, Fidel could not accept it being too black in complexion. What is the status of the child? a. Illegitimate, because Gloria confessed that the child is not Fidel’s. b. Illegitimate, because by the color of its skin, the child could not possibly be that of Fidel. 1 PRTC c. Legitimate, because the child was born within a valid marriage. d. Legitimate, because Fidel agreed to treat the child as his own after Gloria told him who the father was. 13. 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 a. Relativity of contracts. b. Freedom to stipulate. c. Mutuality of contracts. d. Obligatory force of contracts. 14. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of the five lots he owns, without specifying which lot it was, for the price of P1 million. Later, the parties could not agree which of five lots he owned Lino undertook to sell to Ramon. What is the standing of the contract? a. Unenforceable. b. Voidable. c. Rescissible. d. Void. 15. Warranty inherent in a contract of sale, whether or not mentioned in it, is known as the a. warranty on quality. b. warranty against hidden defects. c. warranty against eviction. d. warranty in merchantability. 16. Joseph, a 17-year old Filipino, married Jenny, a 21-year old American in Illinois, USA, where the marriage was valid. Their parents gave full consent to the marriage of their children. After three years, Joseph filed a petition in the USA to promptly divorce Jenny and this was granted. When Joseph turned 25 years, he returned to the Philippines and married Leonora. What is the status of this second marriage? a. Void, because he did not cause the judicial issuance of declaration of the nullity of his first marriage to Jenny before marrying Leonora. 1 PRTC b. Valid, because Joseph’s marriage to Jenny is void, he being only 17 years of age when he married her. c. Valid, because his marriage to Leonora has all the elements of a valid marriage. d. Void, because Joseph is still considered married to Jenny since the Philippines does not recognize divorce. 17. The husband assumed sole administration of the family’s mango plantation since his wife worked abroad. Subsequently, without his wife’s knowledge, the husband entered into an antichretic transaction with a company, giving it possession and management of the plantation with power to harvest and sell the fruits and to apply the proceeds to the payment of a loan he got. What is the standing of the contract? a. It is void in the absence of the wife’s consent. b. It is void absent an authorization from the court. c. The transaction is void and can neither be ratified by the wife nor authorized by the court. d. It is considered a continuing offer by the parties, perfected only upon the wife’s acceptance or the court’s authorization. 18. The presence of a vice of consent vitiates the consent of a party in a contract and this renders the contract a. Rescissible. b. Unenforceable. c. Voidable. d. Void. 19. Conrad and Linda, both 20 years old, applied for a marriage license, making it appear that they were over 25. They married without their parents’ knowledge before an unsuspecting judge. After the couple has been in cohabitation for 6 years, Linda’s parents filed an action to annul the marriage on ground of lack of parental consent. Will the case prosper? a. No, since only the couple can question the validity of their marriage after they became 21 of age; their cohabitation also convalidated the marriage. b. No, since Linda’s parents made no allegations that earnest efforts have been made to come to a compromise with Conrad and Linda and which efforts failed. c. Yes, since the marriage is voidable, the couple being below 21 years of age when they married. 1 PRTC d. Yes, since Linda’s parents never gave their consent to the marriage. 20. Which of the following statements is true? a. If one has entered into a contract, one is obligated to fully perform one's obligations under the contract, even if it becomes impossible to do so. b. One must perform all promises made under a contract, even if performance subsequently becomes illegal. c. There can be contractual conditions that aren't stated expressly in a contract, but are implied by law. d. Performance under a contract that becomes more expensive gives rise to a right to void the contract by the party who would have to bear the increased expense. 21. Which of the following statements are true? I. The only legally recognized remedy for breach of contract is the award of money damages. II. Courts may be called upon to determine the meaning of contract terms. a. I only b. II only c. Both I and II d. Neither I nor II 22. All of the following statements are true, EXCEPT: a. Contracts that increase the burden of performance of the person obligated to perform under the contract cannot be assigned. b. Third persons, who are viewed as intended beneficiaries under a contract, have rights to sue to enforce these contracts. c. Contracts may have conditions, which make obligations contingent on some future event. d. Even if one party to a contract has materially breached her duty to perform under the contract, she may still recover damages from the other party if he has failed to fully perform his obligations under the contract. 23. Which of the following statements is true? a. If a party demonstrates another party has breached a contract, and brings a lawsuit for this, the party can seek damages, but there is no other form of legal relief that may be sought by the party suffering the breach of contract. 1 PRTC b. A contract may specify penalties that will be due and owing if one of the parties beaches the contract, and such penalties will be enforced by the courts, even if they are much more than a reasonable approximation of the damages that will be sustained if there's a breach of contract. c. Neither consequential nor punitive damages can be awarded in most breach of contract cases. d. d. If a party agreeing to perform a personal service under a contract breaches the contract, that party may be ordered by a court to perform the service. 24. Which of the following statements are true? I. There can be no contract without consideration. II. Under no circumstances can a minor have any obligations arising from a contract. a. I only b. II only c. Both I and II d. Neither I nor II 25. All of the following statements are true, EXCEPT: a. Generally, courts will refuse to enforce contracts that involve illegal activities. b. Generally, courts will refuse to enforce contracts that are determined to be contrary to public policy. c. A court will not set aside a contract due to the mistake of the parties to the contract. This is true even if the mistake was made by both parties, and it affected a basic assumption upon which the contract was made that has a material effect on the agreed exchange of performances. d. A contract will be set aside by a court if one of the parties was under duress at the time the contract was formed, or one party exercised undue influence on the other party. 26. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet are: a. Voidable b. Rescissible c. Void d. Unenforceable 1 PRTC 27. Through insidious words or machinations, A was able to induce B to enter into a contract which without them B would not have agreed to it. There is: a. Undue Influence b. Fraud c. Mistake d. Misrepresentation 28. A contract is in the stage of conception when: a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to an agreement. d. The contract is perfected. 29. Contracts entered into in a state of drunkenness or during a hypnotic spell are: a. Void b. Valid c. Voidable d. Legal 30. This contract is without effect unless ratified: a. Marriage between first degree cousins b. Contract of sale between two insane persons c. Contract of sale between husband and wife d. Donation between husband and wife 31. Which of the following contracts is not void ab initio? a. Those whose object is outside the commerce of men b. That whose object did not exist at the time of transaction c. That which contemplates an impossible service d. That which is undertaken in fraud of creditors 32. . Rescission of contract can take place in this case a. When the thing which is the object of the contract is legally in the possession of a third person who acted in bad faith b. When he who demands rescission can return whatever he may be obliged to restore c. When the party seeking resolution can perform only as to part and as to remainder d. When the seller cannot return the installments paid to him by the buyer 1 PRTC 33. A defective contract where damage or lesion is essential a. Rescissible b. Voidable c. Unenforceable d. Void 34. Three of the following contracts are void. Which one is not? a. Oral contract of partnership of three partners and capital contribution is more than P3,000 in cash b. Written contract contemplating impossible services c. Oral contract of partnership where real estate is contributed as capital d. Agent's authority to sell land is given orally. 35. This is a real contract: a. Deposit b. Pledge c. Antichresis d. All of them 36. Under the following contracts the rights and obligations are not transmissible except: a. Contract of lease b. Contract of agency c. Contract of partnership d. Contract of commodatum 37. Which of the following is not a requisite for the validity of a contract? a. Consent b. Object c. Cause or consideration d. Delivery of the thing 38. Andy is the representative of Babes, an absentee sells a house and lot valued at 1,000,000 for only 600,000. The contract is a. Valid b. Rescissible c. Unenforceable d. Voidable 39. A deaf mute who knows how to write enters into a contract with an insolvent person after his discharge, the contract is 1 PRTC a. Valid b. Rescissible c. Voidable d. Unenforceble e. Void 40. A voidable contract is a contract: a. Contract agreed to in the state of drunkenness b. Contract agreed to during hypnotic spell c. Contract where consent is given through undue influence d. All of the above 41. The presence of a vice of consent vitiates the consent of a party in a contract and this renders the contract: a. Rescissible b. Unenforceable c. Voidable d. Void 42. When bilateral contracts are vitiated with the vices of consent , they are rendered as a. Rescissible b. Unenforceable c. Voidable d. Void 43. Orencia is the owner of a car which was sold by Say without authorization in favor of Billy. The contract between Say and Billy in so far as Orencia is concerned is a. Rescissible b. Unenforceable c. Voidable d. Void 44. Caloy the guardian of Martinez bought a fertilizer for Land cultivation from Jonas for 400,000 but the market value is only 320,000. The contract is: a. Rescissible b. Unenforceable c. Valid d. Void 45. The statute of frauds applies only to: 1 PRTC a. Wholly executed contracts b. Contracts wholly or partially executed on the part of the debtor c. Contracts wholly or partially executed on the part of the creditor d. Wholly executory contracts 46. This element exist only when they are expressly provided by the parties: a. Natural elements b. Accidental elements c. Essential elements d. Original elements 47. As security for loan, Sonia mortgaged her house and lot to Belinda. Both parties intended to enter a mortgage contract but the instrument as written states that the house and lot is sold by Sonia to Belinda with right of purchase. In this case, the proper remedy is: a. Annulment b. Rescission c. Reformation d. Reconstruction 48. The stages of contract according to the order of their occurence are: a. Perfection, negotiation and termination b. Conception, consummation and birth c. Generacion, perfection and consummation d. Termination, negotiation and birth 49. 1st. The action for annulment on the ground of fraud shall be brought with 4 years from the time of perfection of contract. 2nd. Misrepresentation made in good faith is not fraudulent but may constitute error. a. Both are true b. Both are false c. 1st is true; 2nd is false d. 1st is false; 2nd is true. 50. A contract whose cause is liberality of the benefactor is: a. A gratuitous contract b. A remuneratory contract c. An aleatory contract 1 PRTC d. An onerous contract Partnership 1. 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 therein 2. These persons cannot enter into a universal partnership contract: a. Husband and wife b. Persons guilty of adultery and concubinage c. Persons who commit adultery in consideration thereof d. Public officials by reason of their office e. All of them 3. A, B, C and D are partners where A, B, and C contributed Php 1,000,000 each and D his services. The partnership is engaged in the manufacture and export of garments. Due to a very strong typhoon, the entire roofing of the factory was blown by the strong winds and if not repaired immediately would aggravate the damage. A, B, C and D agreed to an additional contribution of Php 200,000 each in order to save the business from imminent loss. Which of these is the correct statement? a. D is duty bound to contribute 20% more of his time to the business of the partnership. b. If A no longer has money, he can be complied to sell his interest in the partnership to the other partners. c. B can question the decision because he did not vote for the additional contribution. d. If C still has money, but refuses to make the contribution, he can be complied to sell his interest in the partnership to the other partners. 1 PRTC 4. Which of the following statements about a contract or partnership having a capital of Php 3,000 or more in cash or personal property is true? a. It must be in writing even a private one to be a valid. b. It should appear in a public instrument which must be recorded with the SEC c. It need not be in writing to be valid. d. It should appear in a public instrument even if not recorded with the SEC 5. A and B are partners engaged in the real estate business. A learned that C was interested in buying a certain parcel of land owned by the partnership, even for a higher price. Without informing B, A was able to make B sell to him (A) his (B’s) share in the partnership. Then A sold the land a big profit. a. A is liable to B for the latter’s share in the profit b. C is liable to B for the latter’s share in the profit c. The partnership is dissolved when A became the sole owner d. The sale of the land to C is void since it was without the knowledge of B. 6. General partners shall have no right to perform the following acts without the written consent or ratification by all the limited partners, except: a. Admit a person as a general partner b. Admit a person as a limited partner, unless the right to do so is given in the certificate c. Continue the business with partnership property on the death, retirement, insanity, civil interdiction or insolvency of a general partner, unless the right to do so is given in the certificate d. To have the partnership books kept at the principal place of business of the partnership, and at a reasonable hour to inspect and copy any of them. 7. All partners are liable solidarity with the partnership for the purpose of making good the loss: a. Where one partner acting within the scope of his apparent authority receives, money or property of a third person and misapplies it. b. Where the partnership in the course of its business receives money or property in the course of a third person and the 1 PRTC same is misappropriated by any partner while it is in the custody of the partnership. c. Where by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the consent of his copartners loss or injury is caused to any person who is not a partner to the partnership d. All of the above 8. Partner shall have the right a. To ask that the books of the partnership be kept at the principal place of business of the firm, and at any reasonable hour have access to and inspect and copy any of them b. To demand true and full information of all things affecting the partnership c. To share in the profits and surplus assets of the firm d. All of the above 9. X, Y, and Z are partners where X was appointed manager with authority to collect. D is indebted to XYZ partnership in the amount of Php 100,000 which is already due and demandable and is also indebted to X personally and likewise due and demandable in the amount of Php 50,000. X collected from D Php 45,000. Which of these is not a correct statement? a. If X gave a receipt in his own name, he is bound to give XYZ partnership a proportionate which is Php 30,000. b. If X gave a receipt in the name of partnership he has to give the Php 45,000 to XYZ partnership. c. If X’s credit to D carries an interest of 18% and XYZ partnership’s credit to D has an interest of 14% only, when X collects from D Php 15,000 and gives a receipt in his own name he also has to share the collection with the partnership in proportion. d. None of the above. 10. A, B, C partnership has a partnership credit against X in the amount of Php 300,000. In the course of conducting the business of the partnership, A, B, and C agreed equally to divide the credit of Php 300,000 among them. A and B were able to collect from X P100,000 each, but C was not able to collect because X has already become insolvent. In this case: a. A and B should share their collection with C b. A and B should return to the partnership capital what they have collected 1 PRTC c. A and B cannot be compelled to share their collection with C nor return it to the partnership capital because the agreement to divide was made after the partnership was dissolved and therefore, there is no more element of mutuality or reciprocity existing among the partners. d. Correct answer not indicated. 11. A partnership formed for the exercise of a profession which is duly registered is an example of: a. Universal partnership of profits b. Universal partnership of all present property c. Particular by partnership d. Partnership by estoppels 12. The following partnership contracts were present to you for evaluation: I. A partnership engaged in the sale of office supplies with a capital of p100,000 broken down into cash, p30,000; office supplies for sale, P50,000; and office equipment, P10,000; Land, P10,000. The agreement is in a private instrument. II. A partnership engaged in the lease of office spaces with a capital of P700,000 broken down into land, P100,000; building, P500,000; cash, P80,000; and office equipment, P20,000. The agreement was in a public instrument attached to which is the inventory of the land and the building signed by the partners. The agreement is not recorded with the Securities and Exchange Commission. III. A partnership is engaged in the trading of computers whose name is”Lament Enterprises, Ltd.” It has a total capital of P500,000 broken down into P100,000 cash and computers worth P400,000, contributed by both general and limited partners. The agreement was subscribed and sworn to by all the partners before a notary public but not recorded with the securities and Exchange Commission. Base on the foregoing: a. Each partnership has a separate juridical personality b. I and II have separate juridical personality c. II and III have separate juridical personality d. None of the partnerships has a separate juridical personality 1 PRTC 13. In ABC partnership, A was appointed sole manager of its tailoring business. A as such manager can execute all acts of administration despite the operation of B and C. which of the following acts cannot be done by A alone? a. To buy textile materials for use of the tailoring oncredit b. To buy much needed Singer sewing machines for cash c. To pay the salaries of the employees d. To transfer the location of the tailoring from the university belt to Makati Avenue. e. None of the above. 14. Paul and Joven entered into a universal partnership of profits. Subsequently, Paul won 1st prize in the lotto. Will the money belong to the partnership? a. Yes, because it is considered profit acquired by the partner. b. No, because it is not acquired by “industry or work” c. Yes, because all profit acquired become part of common fund d. No, because the profit was acquired only after the constitution of the partnership 15. Which of the following right cannot be exercise by an assignee of interest: I. To get whatever profits the assignor partner would have obtained II. To avail himself of the usual remedies in case of fraud in the management III. To demand information, accounting and inspection of the partnership books IV. The right to participate in the management a. All of the above b. Only III c. II, III, IV d. III and IV 16. A, B, and C are partners in an import and export business where customers desiring to place an order are required to make a deposit of 30% to the partnership. T, a regular customer deposited P300,000 to partner A who, instead of turning over the money to ABC partnership, misappropriated it for his own use. In this case: a. T should sue alone A, the misappropriating partner for the amount of P300,000 b. T can sue A or B or C, the partnership of ABC solidarity for the amount of P300,000 1 PRTC c. T can only sue partners A, B, and C jointly for P300,000 d. Correct remedy not indicated 17. The following statements pertain either to a partner appointed manager in the articles of partnership or through a document after the formation of the partnership. i. He may be removed as manager only for a just or lawful cause by the vote of the partners owning the controlling interest. ii. He may be removed as manager with or without just or lawful cause by the vote of the partner owing the controlling interest iii. He may perform all acts of administrator despite the opposition of his partners provided he is in good faith iv. He may perform all acts of administration in good faith but opposing partners may resort to his removal if he persists. Based on the foregoing a. I and III pertain to a partner appointed as manager in the articles of partnership b. I and III pertain to a partner appointed as manager through a document after the formation of the partnership c. II and III pertain to a partner appointed through a document after the formation of the partnership d. I and IV pertain to a partner appointed as manager in the articles of partnership 18. A, B, C and D are partners where D is an industrial partner and A, B and C respectively contributed P400, 000, P200, 000 and P200, 000. ABCD and Co. became indebted to X in the amount of P1, 800,000. a. X can only hold liable A, B, and C as the capitalist partners; b. X must first exhaust the partnership asset of P800, 000 and then hold A, B, and C jointly for the balance of P1, 000,000. c. X must first exhaust the partnership assets amounting to P800,000 and then hold A, B, C, and D solidarily liable for the balance of P1,000,000 d. X must first exhaust the partnership assets amounting to P800, 000 and them hold liable jointly A, B, C and D from the balance of P1,000,000 – but after D the industrial partner pays X P250,000 he can ask reimbursement from A, B, and C so that in the end D as an industrial partner will not be liable for losses among themselves. 1 PRTC 19. Great Company, a partnership engaged in the distribution of generators, is composed of George, Roland, Edmond, Albert and Troy. George is the managing partner. During the month of April, the following transactions were entered into by the following partners in behalf of the partnership without any authority: i. The sale of a generator by Roland to Juan Torres who was not aware that Roland had no authority. Juan Torres has paid for the generator which is due for delivery ii. The purchase of a car by Edmond from Lexus Motors whose owner was not aware of Edmond’s lack of authority. The car and the price are due for delivery and payment, respectively. Based on the foregoing, the partnership is bound by a. Transaction I only b. Transaction II only c. Both transactions I and II d. Neither of Transaction nor II 20. Without the written consent or ratification of the specific act by all the limited partners, a general partner or all of the general partners have no authority to: a. Do any act in contravention of the certificate b. Do any act that would make it impossible to carry on the ordinary business of the partnership c. Confess a judgment against the partnership d. All of the above 21. Wilma, Olga and Wynona agreed to form a limited partnership with Wilma and Olga as general partners contributing P50, 000 each, and Wynona 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 begun operating the business and transacting with third persons a. The partnership entered into by the Wilma, Olga and Wynona is void. b. The partnership will be considered as general partnership. Accordingly, all partners will be liable with their separate property after the exhaustion of partnership assets. 1 PRTC c. The partnership will be considered a limited partnership as indicated in its name. Only Wilma and Olga will be liable with their separate property after the exhaustion of partnership assets. d. Wilma, Olga and Wynona will be considered separate as sole proprietors with each one having a capita equivalent to their respective contributions. 22. A, B and C wish to go into the business together to bottle mineral water. Each contributed P50, 000, but C wanted to limit his liability to the extent of his contribution, and his name to appear in the partnership name. Which form of partnership as business organization should they choose? a. General partnership b. Limited partnership c. No partnership organization is available d. Limited 23. A substituted limited partner is: a. A person admitted as partner by the other partners b. A buyer of right of the deceased partner c. As assignee admitted to all the rights of a limited partner. d. All of the above. 24. A partnership is dissolved on the death of a: a. General partner b. Industrial partner c. General-limited partner d. Limited partner e. A, B, C 25. General partners shall have no right to perform the following acts without the written consent or ratification by all the limited partners, except: a. Admit a person as a general partner b. Admit a person as a limited partner, unless the right to do so given in the certificate c. Continue the business with partnership property on the death, retirement, insanity, civil interdiction or insolvency of a general partner, unless the right to do so is given in the certificate. 1 PRTC d. To have the partnership books kept at the principal place of business of the partnership, and at a reasonable hour to inspect and copy any of them. 26. Which of the following may be a cause for involuntary dissolution? a. Express will of any partner b. Insolvency of any partner c. Termination of the term d. Expulsion of any partner 27. Allan, Beth and Chris are partners with capital contribution of P15, 000, P10, 000 and P5, 000, respectively. Supposed on dissolution, the assets of their partnership amount to only P46, 000 and it owed Delia the amount of P50, 000. Chris owes Polly on his personal account P6, 000. The partners have no separate property amounts to P7, 000. Which is correct? a. Delia and Polly shall divide Chris separate property equally. b. Delia and Polly shall divide Chris property pro-rata c. Delia shall be preferred as regards Chris separate property d. Polly shall be preferred as regards Chris separate property 28. In a limited partnership, the creditor of a limited a partner may charge the interest of the indebted limited partner, the interest so charged may be redeemed with: a. Partnership property b. Separate property of any general partner c. Both partnership property and separate property of the general partner cumulatively d. Both partnership property and separate property of the general partner alternatively e. 29. A, B, C, and D were partners. A assigned his interest in the partnership to his son S. S now wanted to join in the management of the enterprise. B, C and D refused. Is the partnership necessarily dissolved? a. The partnership is dissolved because of the conveyance by A b. The mere assignment did not dissolve the firm. This is do even if B, C and D did not allow S to participate in the firm’s business conduct. c. The partnership is not dissolve provided B, C and D will allow S to join the management of the enterprise d. The conveyance of interest by A automatically dissolved the partnership 30. As regards a limited partner, which statement is correct? 1 PRTC a. He cannot be allowed to transact business directly with the partnership of which he is a member as this would result into conflict of interest b. He is automatically the agent of the partnership with general authority to bind the partnership to contracts with third persons c. He can only contribute money and property but not services d. He has no liability to partnership creditors even if he takes part in the management of the partnership 31. The certificate shall be cancelled when: a. There is change in the name of the partnership b. Additional limited partner is admitted c. All limited partner cease to be such d. There is a false or erroneous statement in the certificate 32. Which of the following is not a property right of a partner? a. His rights in specific partnership property b. His interest in the partnership c. His right to participate in the management d. To demand true and full information of all things affecting the partnership 33. A limited partner shall be liable as general partner in three of the following cases. Which one is the exception? a. When he is a general-limited partner as stated in the certificate b. When he takes part in the control of the business c. When he participates in the management of the business d. When his surname which appears in the partnership name is also the surname of a general partner 34. The following are all grounds for a juridical decree of dissolution, except: a. Where a partner is guilty of such conduct as tends to prejudicially affect the partnership b. When the business can only be carried at a loss c. By any event which makes it unlawful for the partnership to carry on the business d. Where a partner is rendered incapable of performing his part of the agreement e. Where a partner is judicially shown to be insane 35. Which of these partners is not entitled to direct access to books and records of the partnership or to ask for formal accounting or for dissolution, etc.: 1 PRTC a. General partner b. Assigned limited partner c. Substituted limited partner d. All of the above 36. In winding-up or liquidation of the partnership after dissolution, which is the correct order of payment? a. Pay the creditors who are partners, then creditors who are third persons; then return of capital contribution and then distribution of profits b. Pay to creditors who are not partners; then the creditors who are partners; then distribution of profits and return of capital contribution c. Pay to creditors who are not partners; then the creditors who are partners; then return of capital contribution and then distribution of profits d. Return of capital contribution; then payment of creditors who are not partners; then creditors who are partners and distribution of profits 37. In a limited partnership where there are 4 partners: a. All the partners must be limited partners b. The number of limited partners must be equal to the number of general partner, that is, 2:2. c. The number of limited partners must be greater than the number of general partners, that is, 3:1 d. It is enough that there is one limited partner; the rest may all be general partners 38. A decree by the court is necessary to dissolve a general partnership based in three of the following grounds. Which one will not require such decree but will cause the automatic dissolution of the partnership? a. The business of the partnership can only be carried on at a loss b. A partner is shown to be of unsound mind c. A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business d. A partner is civilly interdicted 39. A, B, and C formed a universal partnership of all present property on February 14, 2009. A contributed P500,000, B a car worth P500,000 and C contributed equipment worth P500,000. The partners executed an article of co-partnership in private instrument. After operation for 5 months, A and B got married. Did the marriage dissolve the partnership? 1 PRTC a. Yes, the partnership is dissolved by the marriage, because there is a change in equity among the partners. b. No, the marriage did not dissolve the partnership c. No, because spouses can enter into a universal partnership d. Yes, because it becomes unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership 40. Which of the following losses will not cause the dissolution of a partnership? a. Loss before a delivery of a specific thing which a partner has promised to contribute to the partnership b. Loss after delivery of a specific thing where the partner contributed only its use and enjoyment, he reserved the ownership thereof. c. Loss before delivery of a specific thing where the partner promised to contribute only its use and enjoyment, reserving the ownership thereof d. Loss of a specific thing after its delivery to and acquisition of its ownership by the partnership from partner who contributed the same. 41. A limited partner shall not become liable as a general partner unless: a. He takes part in the control of the business b. He contributes his services to the capital of the firm c. The word “Limited” is not added to the name of the partnership d. All of the above 42. Which of the following is a false statement? a. If a limited partnership will be created, registration is a condition precedent for the creation of the limited partnership b. If one of the partners in a general partnership contributed a building to the partnership, there must be a public instrument and an inventory as a requirement, otherwise the partnership is void c. If a limited partnership will be created, registration is a condition subsequent for the creation of the limited partnership. d. If a limited partnership is not registered, a general partnership is created 43. X, Y and Z are partners in a business with a total capital contribution of P3, 000,000. In the course of operating the business, the partnership became indebted to C in the amount of P4, 500,000. 1 PRTC Subsequently, W was admitted as a new partner with contribution of P1, 000,000. Much later, the partnership became indebted to T in the amount of P4, 000,000. The partnership is insolvent and the only asset is the original capital of P3,000,000 plus the newly contributed capital of P1,000,000 by W. a. W is not liable for the obligation of P4,500,000 in favor of C since he was not yet a partner when it was incurred. b. W is liable for the obligation of P4,500,000 although contracted before he became a partner but only put up the extent of his contribution c. W is liable for the obligation of P4,500,000 although contracted before he became a partner up to the extent of his personal property d. W is liable for the obligation of P4, 500,000 although contracted before he became a partner but not only up to the extent of his contribution. With respect to the P4, 000,000 debt in favor of T, W will be liable for its payment jointly and subsidiarily up to the extent of his personal property because it was incurred when he was already a partner in XYZ partnership. 44. 1st Statement. A partner who is liable to the partnership for damages due to his fault may claim compensation if through his extraordinary efforts in other activities of the partnership unusual profits have been realized 2nd Statement. A partner shall become a debtor of the partnership if he fails to deliver his promised contribution and shall be in delay from the time of a demand from the partnership A. B. C. D. 1 st Statement True True False False 2 nd Statement True False False True 45. 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 a loss 46. A, B, and C entered into an oral contract of partnership each contributing P1M each to the common fund plus other personal properties of the same amount and failed to register the partnership with the SEC. Is the partnership valid? 1 PRTC a. No, because every contract of partnership having a capital of three thousand pesos or more in money or property must be in public instrument and registered with the SEC b. Yes, because public instrument is necessary only in case of contributions of immovables. c. Yes, because a partnership contract can always be oral d. No, because registration with the SEC is essential for a partnership to be valid and acquire juridical personality 47. A and B are co-owners of a parcel of land from which they derive profits in equal sharing being co-heirs in inheritance. Is there a partnership? a. There is a partnership because of the equal sharing of profits b. There is no partnership because co-ownership by itself does not establish a partnership despite the sharing of profits c. There is no partnership since in partnership division of profits is not always necessary among partners d. There is partnership they being co-owners and co-possessors. 48. A, B, and C as partners in a partnership, stipulated and mutually agreed that A shall not share in the profits and losses. Is the agreement valid as among the partners only and not against third persons? a. Yes, because among the partners it is valid to exempt one from sharing in the profits and losses b. Yes, valid as long as third person is not prejudiced c. Not valid stipulation exempting a partner from sharing profits and losses d. Not valid as against third persons or partnership creditors 49. 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 a loss 50. Partners A, B and C contributed: A-P1M, B-P2M, and C-service. After exhausting the partnership assets, the creditors still have a claim for P.3M. For how much are the partners liable to the creditors for the partnership liability? a. Only A and B are liable equally to the creditors being capitalist b. Only A and B are liable at ½ and 2/3, respectively c. All of A, B and C are liable pro rata to the creditors d. C is not liable being an industrial partner who is exempt form losses. 1 PRTC Corporation 1. X Corp operates a call center that received orders for pizzas on behalf of Y Corp. which operates a chain of pizza restaurants. The two companies have the same set of corporate officers. After 2 years, X Corp dismissed its call agents for no apparent reason. The agents filed a collective suit for illegal dismissal against both X Corp. and Y Corp based on the doctrine of piercing the veil of corporate fiction. The latter set up the defense that the agents are in the 1 PRTC employ of X Corp. which is a separate juridical entity. Is this defense appropriate? a. No, since the doctrine would apply, the two companies having the same set of corporate officers. b. No, the real employer is Y Corp., the pizza company, with X Corp serving as an arm for receiving its outside orders for pizzas. c. Yes, it is not shown that one company completely dominates that finances, policies, and business practices of the other. d. Yes, since the two companies perform two distinct businesses. 2. X Corp. whose business purpose is to manufacture and sell vehicles, invested its funds in Y Corp., an investment firm, through a resolution of its Board of Directors. The investment grew tremendously on account of Y Corp.’s excellent business judgment. But a minority stockholder in X Corp. assails the investment as ultra vires. Is he right and, if so, what is the status of the investment? a. Yes, it is an ultra vires act of corporation itself but voidable only, subject to stockholder’s ratification. b. Yes, it is an ultra vires act of its Board of Directors and thus void. c. Yes, it is an ultra vires act of its Board of directors but voidable only subject, subject to stockholders’ ratification. d. Yes, it is an ultra vires act of the corporation itself and consequently, void. 3. T Corp. has a corporate term of 20 years under its article of Incorporation or from June 1, 1980 to June 1, 2000. On June 1, 1991 it amended its Article of Incorporation to extend its life by 15 years from June 1, 2980 to June 1, 2015. The SEC approved this amendment. On June 1, 2011, however, T Corp decided to shorten its term by 1 year or until June 1, 2014. Both the 1991 and 2011 amendments were approved by the majority vote of its Board of Directors and ratified in a special meeting by its stockholders representing at least 2/3 of its outstanding capital stock. The SEC, however, disapproved the 2011 amendment on the ground that it cannot be made earlier than 5 years prior to the expiration date of the corporate term, which is June 1, 2014. Is the Sec disapproval correct? a. No since the 5-year rule on amendment of corporate term applies only to extension, not to shortening of term. b. Yes, any amendment affecting corporate term cannot be made earlier than 5 years prior to the corporation’s expiration date. c. No, sine a corporation can in fact have a corporate life of 50 years. d. Yes, the amendment to shorten corporate term cannot made 1 PRTC earlier than 5 years prior to the corporation’s expiration date. 4. In case of disagreement between the corporation and a withdrawing stockholder who exercises his appraisal right regarding the fair value of his shares, a three-member group shall by majority vote resolve the issue with finality. May the wife of the withdrawing stockholder be named to the three member group? a. No, the wife of the withdrawing shareholder is not a disinterested person. b. Yes, since she could best protect her husband shareholdings. c. Yes, since the rules do not discriminate against the wives. d. No, since the stockholder himself should sit in the threemember group. 5. The rule is that the valuation of the shares of a stockholder who exercises his appraisal right is determined as of the day prior to the date on which the vote was taken. This is truea. Regardless of any depreciation or appreciation in the share’s fair value. b. Regardless of any appreciation in the share’s fair value. c. Regardless of any depreciation in the share’s fair value. d. Only if the three is no appreciation or depreciation in the share’s fair value 6. The corporate term of a stock corporation is that which is stated in the Articles of Incorporation. It may be extended or shortened by an amendment of the Articles when approved by majority of its Board of Directors and a. Approved and ratified by at least 2/3 of all stockholders. b. Approved by at least 2/3 of the stockholders representing the outstanding capital stock. c. Ratified by at least 2/3 of all stockholders. d. Ratified by at least 2/3 of the stockholders representing the outstanding capital stock. 7. Corporation X has a statement of capital stock in its articles of incorporation but it was stated in the same articles that dividends are not supposed to be declared, that is there is no distribution of retained earnings. Corporation X is: a. Stock Corporation b. Corporation by estoppel c. Non stock corporation d. Corporation by prescription 8. Which of the following corporation commences to have corporate existence and juridical personality and deemed incorporated from 1 PRTC the date of Securities and Exchange Commission issues a certificate of incorporation under its official seal: I. Public corporation II. Private corporation III. Foreign corporation IV. Corporation sole a. I and II b. II and III c. II only d. II and IV 9. Which of the following are not powers that can be exercised by the corporation? a. Express power b. Implied power c. Incidental power d. Residual power 10. In 2006, Corporation “A” passed a board resolution removing “X” from his position as a manger of said corporation. The by-laws of “A” corporation provides that the officers are the president, generalmanager, treasurer, and secretary. Upon complaint filed with the SEC, it held that the general manager could be removed by mere resolution of the board of director. On motion for reconsideration, “X” alleged that he could only be removed by the affirmative vote of the stockholders representing 2/3 of the outstanding capital stock. Is “X” contention legally tenable a. No, the vote required is majority of the board and 2/3 OCS consenting b. Yes, the voting requirement is only 2/3 of the outstanding capital stock c. No, the required vote is MBD consented by MOCS d. No, the voting requirement is only majority of the Board of Directors. 11. An auditing firm composed of Ce