Obligation

Obligation 1. Unless the law or the stipulation of the parties required another standard of care, the obligation to give a thing carries with it the 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 RPCPA 0591 2. 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. RPCPA 1089 d. From the time the fruits are delivered. 3. 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 c. Quasi contract b. Contracts d. Answer not given RPCPA, 0591 4. 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 0 to X arises from: a. Law d. Delict b. Contract e. Quasi-delict c. quasi-contract 5. The following are the requisites of an obligation, except: a. Passive subject, debtor or obligor b. Active subject, creditor, or oblige c. Efficient cause d. Demand 6. Proof of pecuniary loss is necessary for the award of: a. Liquidated damages c. Actual damages . b. Exemplary damages d. Temperate damages . 7. Y sold his horse to Z for P50,000. No payment has yet been made and the sales document does not provide the date of delivery. Before delivery and payment, the horse gave birth to a baby horse. (RPCPA, 88-1) a. Z is entitled to the baby horse which was born after the perfection of the contract. b. Y is entitled to the fruit (baby horse) as Z has not paid the price yet. c. Y is entitled to the fruit (baby horse) because it was born before his obligation to deliver the horse. d. Z should pay additional amount for the baby horse to be entitled to it. 8. 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 there 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. 9. When A voluntarily takes charge of the neglected business of B without the latter's authority where reimbursement made for necessary and useful expenses, there is a: (RPCPA, 97-2) a. Quasi delict c. Negotiorum gestio b. Quasi contract d. Solutio indebiti 10. Judy bought two (2) softdrinks at the price of P10.00 each. She paid the store P20.00. The store give her two softdrinks and coins worth P10.00. What is the source of obligation of Judy? a. Negotiorum gestio c. Solutio indebiti b. Quasi contract d. Law 11. S sold 100-bottles of imported "Fundador" brandy to B who paid immediately the price thereof amounting to P20,000.00. S promised to deliver the brandy to B within one week from their agreement. On the agreed date of delivery, S delivered to B 100 bottles of fake "Fundador" brandy. The contract between S and B is: a. voidable. c. valid d. void d. rescissible. 12. 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 1. contact: b. April 1. c. May 1. d. The period should be fixed by the court so that it can be determined when C actually became the owner of the agricultural land and its fruits. 13. This obligation is demandable at once: a. pure obligation b. obligation subject to a resolutory condition c. obligation with an in diem period d. all of the above 14. When the thing deteriorates pending the fulfillment of the suspensive condition without the fault of the debtor, the impairment is: (RPCPA, 98-1) 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 15. Grelim obliges himself to give his only car to Goliath. What is the kind of prestation in the given example? a. Determinate c. Divisible b. Indeterminate d. Indivisible 16. One of the following obligations is not immediately demandable. a. Pure obligation. b. Obligation with a resolutory condition. c. Obligation with an in diem period. d. Obligation with an ex die period. 17. Kates and Phoebe entered into contract whereby Kates would- deliver 5 pieces of genuine Rolex wristwatches to Phoebe. Kates proposed to Phoebe that should she deliver 5 units of fake pieces of Rolex wristwatches by reason of financial difficulties on her part, Phoebe would not sue her for damages on the ground of fraud. Phoebe accepted the proposal. On due date, Kates delivered 5 pieces of fake Rclex wristwatches. Upon discovery of the fraud, Phoebe sues Kates for damages. Kates contends that she cannot be held liable for damages because Phoebe waived her right to holdher liable on the ground of fraud if the reason thereof is the financial difficulties of Kates. a. Phoebe cannot sue Kates for damages because the reason for the waiver is valid, i.e financial difficulties of Kates, which is a valid reason for the waiver. b. Phoebe can sues Kates for the annulment of the contract since it is voidable. c. Phoebe can sue Kates for damages because the waiver he made is void. Nonetheless, the contract is valid. d. Phoebe can sue Kates for the rescission of the contract since it is rescissible. 18. One of the following is a 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. 19. This person is liable for the loss of the subject matter by fortuitous event: (RPCPA, 85-2; 88- 1; 89-1) a. Creditor c. Both a and b b. Debtor d. None of them 20. 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. b. exercise all the rights and bring all the actions of the debtor (accion subrogatoria). c. impugn the acts which the debtor may have done to defraud his creditors (accion pauliana). d. compel the debtor to perform the service in obligations to do. 21. 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 P50,000.00 if D goes to Tokyo. c. D promised to give C P50,000.00 if C can fly to the moon. d. D promised to give C P50.000.00 if C gives him 5 grams of marijuana.. 22. D, on June 19, 2000 obligated himself to C to sell to the latter his house and lot for the very cheap price of P5,000,000 on condition that C passes the CPA board examinations to be given in October 2000. In the meantime, not believing that C will pass the board exams, D sold the house to T sometime in August 2000, In November 2000, C passed the exams unexpectedly. Who has a better right to the house and lot? Assume that C and T did not record their transaction with the Registration of Deeds and neither did they take possession. a. C has a better right to the house and lot because said right goes back to the time when the obligation was contracted on June 19, 2000 although the condition was complied with only in November 2000. b. Thas a better right since it was sold to him in August, 2000 whereas the condition in favor of C was complied only sometime in November 2000. c. Because of the controversy between C and T can decide not to sell the house and lot anymore. d. Correct conclusion not given. 23. 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 fulfillment 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. 24. Mr. AB owes Mr. CD P150,000 due on August 31, 1987. Mr. AB executed a mortgage in favor of Mr. CD on Mr. AB's building to guaranty the obligation. On August 10, 1987 the mortgaged building was totally lost due to a strong typhoon. On August 12, 1987, Mr. CD demanded payment from Mr. AB. Is Mr. CD's demand valid? (RPCPA, 88-1; 88-2-M; 89-1-M; 90-2-M; 93-2-M;) a. No. The obligation is one with a definite period, thus the creditor cannot demand fulfillment of the obligation as such would the prejudicial to the rights of the debtor. b. No. The obligation is extinguished because the obligation is lost through a fortuitous event. c. Yes. The debt becomes due at once because the guaranty was lost even through a fortuitous event unless the debtor can mortgage another property that is equally satisfactory. d. Yes. The debt becomes due at once because, from the tenor benefit is given solely to the creditor thereby giving the creditors the right to demand performance even before the date. 25. 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. 26. D is under obligation to pay C P500,000 on December 15, 2002. Before due date, D wants to pay C P500,000 but the latter refuses to accept because the obligation is not yet due. Decide, a. D can compei C to accept payment because when an obligation is with a period, said period is for. the the debtor only. b. C can refuse to accept payment because when an obligation is with a period, the benefit is only for the creditor, c. C can refuse to accept because when an obligation is with a period, said period is presumed to be for the benefit of both debtor and .creditor. d. Correct answer not indicated. 27. An obligation with a period: a. D will pay C P1,000.00 X dies. b. D will pay C P1,000.00 when X dies of TB. c. D will pay C P1,000.00 when he finishes his course in Business Administration. d. None of the-above 28. D is obliged to give C a specific watch, a specific ring, or a specific bracelet. The parties agreed that C will' have the right to choose the thing which will be given to him. Before C could make his choice, the watch and the ring are lost through D's fault, successively, What is the right of C? a. C may choose the delivery to him of the bracelet, or the price of the watch or the price of the ring plus damages. b. C cannot choose the price of the watch or the price of the ring because the said objects have already been lost. c. C can only choose to have the bracelet because anyway, D can still perform his obligation, d. C can only choose to have delivery of the bracelet or the price of the ring which was the last item that was lost plus damages. 29. D is obliged to give C a specific ring. The parties agreed that D may give a specific bracelet as substitute. Which of the following statements is true? a. If the ring is lost through a fortuitous event before substitution, the obligation is extinguished. b. If the bracelet is lost through a fortuitous event before substitution, the obligation is extinguished. c. If the ring is lost through a fortuitous event after substitution, the obligation is extinguished. d. If the ring is lost through the debtor's fault after substitution, the debtor shall pay damages. 30. This is the promissory note: We promise to pay A, B and, C the sum of ONE HUNDRED EIGHTY THOUSAND (P180,000) PESOS within 60 days. Signed X, Y and Z": (RPCPA, 1089; 90-1, 87-2-M; 88-1-M; 88-2-M; 88-2-M; 89-1-M; 90-1-M; 90-2-M; 92-1-M; 92- 1-M; 92-2- M; 95-1-M; 95-1-M; 96-1-M; 96-1-M; 96-2-M; a. X is obliged to pay A P20,000 b. X is obliged to pay A P60,000 c. X is obliged to pay A P180,000 d. X is obliged to pay A, B and C P180,000. 31. A, 25 years old, B, 35 years old, and C, 17 years old, are solidary debtors of X in the amount of P9,000.00 a. X may collect from A 9,000,00. b. X may collect from A 6,000.00. c. X may collect from A 1,000.00, d. X may collect nothing because the obligation is voidable, C being a minor. 32. A, B and C obligated themselves to deliver to X specific car worth P300,000. On due date, said car is not delivered to X due to the fault of A causing a P9,000 damage to the former. In this case: a. X can compel any of A,B and C to pay P309,000. b. The obligation of A, B and C is presumed to be joint and therefore, X cam compel A, B and C to each deliver 1/3 of the car plus damages of P3.000. c. The obligation of A, B and C is presumed to be joint, but the action is converted into one for damages where X can collect from A, B and C P103,000 each. d. The obligation of A, B and C is presumed to be joint but the action is converted into one for damages where X can collect from A PIO'9,000 and from B and C P100,000 each. 33. A obliges himself to pay X P100,000 in 30 days plus a penalty of P20,000 if A fails to pay the obligation in due time. A failed to pay the obligation in 30 days. X can demand from A: (RPCPA, 90-2) a. The principal of P100,000 plus P20,000 penalty. b. The principal of P100,000 plus P20,000 penalty, plus legal interest damages. c. The principal of P100,000 plus legal interest. d. The principal of P100,000 plus P20,000 penalty, plus legal interest, plus damages. 34. Consider the following statements: I. The nullity of the principal obligation carries with it the nullity of the penal clause. II. The nullity of the principal obligation does not carry with it the nullity of the penal clause. III. The nullity of the penal clause carries with it the nullity of the principal obligation. IV. The nullity of the penal clause does not carry with it the nullity of the principal obligation. a. Statements I and III are true. b. Statements I and IV are true. c. Statements II and III are true. d. Statements II and IV are true. 35. D borrowed from C P100,000 with an agreement that upon failure to pay on due date, a penalty of 20% shall be imposed. On due date, the P100,000 was not paid. C can collect from D: a. P100,000 only b. P100,000 plus penalty c. P100,000 plus penalty plus interest at 12% d. P100,000 plus penalty plus interest plus damages 36. In the following cases, interest or damages can be collected by the creditor from the debtor in addition to the penalty agreed upon. a. If there is a stipulation to that effect. b. If the debtor defaults in the payment of the penalty. c. Where the debtor commits fraud in the fulfillment of the obligation. d. All of the above e. None of a, b, and c 37. Dominico and Domingo are jointly and severally liable to Crispino for P100,000.00. The obligation is due on June 30, 2012. On June 25, 2012, Dominico paid the whole amount of the note to Crispino. If Domingo reimburses Dominico on July 15, 2012, Dominico is entitled to receive from Domingo: a. P50,000.00 plus interest from June 25 to July 15, 2012. b. P50,000.00 plus interest from June 25 to June 30, 2012. c. P50,000.00 plus interest from June 30 to July 15, 2012. d. P50,000.00 with no interest because Dominico paid the note before due date. 38. Dodgie owes Cathy the sum of P100,000 guaranteed by Josie. Sasy, a stranger to the obligation offers to pay Cathy P100,000 and the latter accept the offer of payment. However, Dodgie already paid Cathy P45,000. The payment by Sasy is with the knowledge of Dodgie but against his will. Sasy may recover from Dodgie: a. P100,000 and to subrogate to the guaranty b. P55,000 and to subrogate to the guaranty c. P100,000 but not entitled to subrogate to the guaranty d. P55,000 only because this is the only amount redounded to the benefit of Dodgie. 39. In the following cases, interest or damages can be collected by the creditor from the debtor in addition to the penalty agreed upon. a. If there is a stipulation to that effect, b. If the debtor defaults in the payment of the penalty. c. Where the debtor commits fraud in the fulfillment of the obligation. d. All of the above e. None of a, b, and c 40. D is indebted to C in the amount of P500,000. By dacion en pago D conveyed to C the ownership of a car with an agreed appraised value of P700,000. a. The obligation of D to C is automatically extinguished. b. The obligation of D to C is not extinguished because they agreed to sell the car from which the payment of P500,000 is to be derived. c. The obligation of D to C is automatically extinguished and on top of that C has to pay D P200,000. d. Correct answer not indicated. 41. The following statements pertain to either payment by cession or dacion en pago. I. The debtor is insolvent. II. Ownership of the thing/s is transferred to the creditor/s. III. Plurality of creditors is required. IV. Obligations are totally extinguished as a rule. a. Statements I and IV pertain to payment by cession. b. Statements I and III pertain to dacion en pago. c. Statements II and IV pertain to dacion en pago d. Statements III and IV pertain to payment by cession. 42. A, B and C solidarity owe X and Y P30,000. X remitted the entire obligation in favor of A. The effect is: (RPCPA, 97-2) a. The obligation is not extinguished until A collects from B and C. b. The obligation is not yet extinguished until Y is paid by X of Y's share of the credit. c. A cannot recover from B and C because remission in his favor extend to the benefit of B and C. d. A can recover from B and C their respective share of the debt. 43. Consignation is a mode of payment which extinguishes an obligation. Which of the following is not a requisite for consignation? (RPCPA, 87-1) 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 in the fulfillment of the obligation. 44. 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: (RPCPA, 90-1; 90-2-M; 94-2-M ) a. Remission c. Dation in payment b. Payment by cession d. Expromission 45. D owes the following creditors: X, P20,000.00; Y, P30,000.00; and P50,000.00. D is insolvent so he offers to assign all his properties (except those exempt from execution) to his creditors in payment of his debts. The creditors accept the offer and are able to sell the debtor's properties for P70,000.00. Based on the foregoing facts, which of the following statements is incorrect? a. The special mode of payment availed of by D is payment by cession. b. D is released from his total liability of P100,000.00 even if there is no stipulation to that effect. c. D is released from his liability only to the extent of P70,000 in the absence of any stipulation giving him total release. d. The creditors did not become the owners of D's properties at the time of their assignment. 46. Payment under the following cases are valid except: a. Payment made in good faith in possession of the document evidencing the credit. b. Payment made to incapacitated person that redounded to his benefit c. Payment made to 3rd person that redounded to the benefit of the creditor d. Payment made to the creditor. 47. D obtained from ABC Bank a loan of P12,000,000.00 payable at the end of 10 years. Before maturity, an extraordinary inflation supervened causing the value of the debt to fall to P4,000,000.00 on the date of maturity. On due date, D must pay ABC Bank: a. P12,000,000.00. c. P36,000,000,00 b. P4,000,000.00. d. P3,000,000.00. 48. In order that condonation may extinguish an obligation involving a movable property whose value exceeds P5,000.00 a. It is sufficient that the condonation and the acceptance are in writing, even a private one. b. It is required that the condonation and the acceptance must be in a public instrument. c. The delivery of the document evidencing the debt is sufficient since the property is movable. d. The condonation and the acceptance may be made orally. 49. D owes C the following debts: P6,000.00 due on June 12; P6,000.00 due on June 15; P6,000.00 due on June 18; and P6,000.00 due on June 20. All debts are unsecured except the debt due on June 20 which is secured by a pledge of D's diamond ring to C. By agreement, the benefit of the term on the four (4) debts was made in favor of C. Assuming that D has P6,000.00 on June 18 and is ready to pay C, which of the following statements is correct? a. D may apply his payment of P6,000.00 to any of the debts due on June 12, June 15, and June 18 since they are all due as of June 18. b. D may apply it only to the debt due on June 20 because it is the most burdensome to him. c. D must apply the payment proportionately to the debts due as of June 18 at P2,000,00 each. d. D may apply the payment to any of the four debts. 50. When the characters of creditors and debtor are merged on the same person, the mode of extinguishing an obligation is called: (RPCPA, 86-2; 91-l-M; 96-2-M) a. Confusion or merger c. Novation b. Compensation d. None of the three 51. 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 52. Delivery of property in satisfaction of a debt in money is: a. ADJUDICACION EN PAGO b. Payment by cession c. Consignation d. None of the above 53. D owes C PI,000.00 C tells D that he is willing to forego collection if the latter will just give him his tape recorder. D consents and gives C the tape recorded. D's obligation is extinguished by: a. Payment c. Confusion b. Condonation d. Compensation 54. When two persons in their own right, are debtors and creditors of each other, there is a. Confusion c. Novation b. condonation d. compensation 55. When the characters, of debtor and creditor are merged in the same person with respect to the same obligation, there is: a. Remission c. Novation b. compensation d. None of the above 56. Paw, husband, and Ai, wife, are legally separated. By order of the court which decreed the legal separation, Paw is obliged to give monthly support of P20,000 to Ai and their children payable within the first five days of the month. Ai owes Paw P10,000 by way of a business loan. On the other hand, Paw has not yet given Ai's support of P20,000 for this month. Both debts are already due. Which of the following statements is correct? a. Both debts are extinguished by legal compensation because both are already due. b. Ai may claim compensation but not Paw c. Paw may claim compensation but not Ai d. Neither one may claim compensation because the debts are not of the same kind. 57. D owes C P50,000.00. 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. Expromision. c. Tradition. b. Delegation. d. Dacion en pago. 58. A obliged himself to give B a car if B places among the top ten in the CPA Board Exam. Subsequently,, they agreed that A will give B the car if B merely passes the CPA Board. This is an example of: (RPCPA, 94-2) a. Mixed novation c. Implied novation b. Real novation d. Personal novation 59. D obliged himself to give 5 grams of shabu to C. Later, the parties agreed that D would instead give to C 5sacks of rice. Which of the following statements is correct? a. The novation is void because the original obligation 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 only voidable because D had not yet performed the original obligation at the time of the 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 a proper action in court. 60. The distinction between conventional subrogation and assignment is that in conventional subrogation: (RPCPA, 0591) a. It is a mere cession of right. b. An obligation is extinguish and another appears. c. The same obligation, without being extinguished, is transferred to another. d. Answer not given. 61. D owes C. Later, the parties agreed that instead of D paying C, he will just pay X. This is an instance of: a. Expromission c. Convertional subrogation b. Delegacion d. Legal-subrogation 62. A owes B P10,000. With consent of both, C pays B P5,000. Now B and C are the creditors of A to the amount of P5,000 each. Suppose A has only P5,000. Which is correct? (RPCPA, 98- 1) a. B and C should divide the P5,000 equally b. C should be preferred c. A may choose whom to pay d. B should be preferred 63. These novations take place automatically or by operation of law. Choose the exception: a. Where a creditor pays another creditor who is preferred. b. Where a third person who has no interest in the obligation makes payment with the consent of the debtor. c. Where a third person who has an interest in the obligation makes payment to the creditor. d. None of the above. CONTRACTS 1. The contract must bind both contracting parties; its validity c compliance cannot be left to the will of one of them. This is known as the principle of: a. mutuality of contract c. consensuality of contract, b. relativity of contract, d. freedom to contract. 2. DO UT FACIAS: a. I give that you give b. I give that you make c. I make that you give d. A make that you make 3. The stipulation in a contract to the effect that the debtor should remain as a servant in the house and in the service of her creditors so long as she had not paid her debt, is void because it is: (RPCPA, 0591) a. Contrary to good customs b. Contrary to public policy c. Contrary to law and morality d. Answer not given. 4. These persons are bound by contracts. (RPCPA, 35-2; 88-2) a. Contracting parties c. Assigns b. Heirs d. All of them 5. Requisites of a valid cause: (RPCPA, 85-2) a. It must be lawful c. It must be real b. It must be true d. All of them 6. D borrowed P500,000.00 from C. D died without having paid his loan obligation to C. He left S, his son and heir, properties worth P400,000.00. a. S is liable to C for P500,000.00. b. S is liable to C for P400,000.00. c. S is liable to C for P100,000.00. d. S is not liable at all because he should not be made to shoulder the obligation of his father. 7. F owes C P10,000,000, F dies leaving to the only heir S a house and lot valued at P7,000,000, S voluntarily pays P10,000,000. Decide: a. In the first place, S is under no obligation to pay C because the P10,000,000 is not his debt. b. S is obligated to pay P10,000,000 because he becomes liable for the debts of his predecessor-in-interest. c. C cannot be compelled to return the excess of P3,000,000 because it is the natural obligation of an heir to pay the debts of his predecessor-in-interest if S voluntarily paid P10,000,000. d. If S paid C P10,000,000 the excess of P3,000,000 should be the subject of an agreement between S and C because it is unjust to S that he should lose his own money of P3,000,000. 8. Tadeo owned a vacant lot adjacent to a bigger lot where Star Circus planned to put up a twoweek performance as provided in the lease contract which it executed with Legaspi, the owner of the bigger lot. In expectation of using his property for a parking lot, Tadeo leveled his lot and built a small shed which cost him P20,000.00, an amount he had yet to pay the contractor. Later, however, the circus cancelled the performance, so Tadeo brought a court action to recover P20,000.00 from the circus and Legaspi. Based on the foregoing information, which of the following is incorrect? a. The circus contract took effect only between Star Circus and Legaspi, the parties to the contract of lease. b. Tadeo can recover damages from Star Circus and Legaspi by reason of stipulation pour autrui. c. Tadeo must pay his own contractor the amount of P20,000.00 because that is the obligation he alone contracted to pay. d. Tadeo, as an incidental beneficiary, has no rights under the circus contract. 9. Mr. Santos offered to sell his land to Mr. Calma for P100,000. Mr. Calma accepted the offer and paid Mr. Santos P100,000and Mr. Santos delivered the owner's duplicate of the Transfer Certificate of Title of the land. Mr. Calma wishes to register the land in his name but the Register of Deeds asked Mr. Calma for the Deed of Sale. What can Mr. Calma do? (RPCPA, 88-2) a. Mr. Calma cannot compel Mr. Santos to return the payment because the contract is not enforceable. b. Mr. Calma may sue Mr. Santos to return the price under the legal maxim "No one may enrich himself at the expense of another." c. Mr. Calma may compel Mr. Santos to execute the Deed of Sale because the contract is valid. d. Mr. Calma may occupy and use the land as a buyer in good faith. 10. On June 1, 2012, S offered to sell his only car to B for P100,000.00. B accepted the offer by mailing his letter acceptance on June 10, 2012. On June 12, 2012, B revoked his letter of acceptance and mailed his letter of revocation on the same date. S received the letter of acceptance on June 14, 2012 and the letter of revocation on June 15, 2012. a. The contract was perfected on June 14, 2012 when S received B's letter of acceptance. b. The contract was not perfected because at the time the acceptance was received, the parties were no longer of one mind. c. The contract was perfected on June 10, 2012 when B sent his letter of acceptance. d. The perfection of the contract retroacts to June 1, 2012 when the offer was made. 11. Mr. A. Santos signed a letter addressed and delivered to Mr. S. Aguas. The terms of the letter are: 1. An offer to sell a 500 sq. m. lot for P300,000.00. 2. An option time up to October 31, 1991 for Mr. S. Aguas to raise the P300,000.00. 3. Upon payment of the P300,000.00, Mr. A. Santos will execute and sign a Deed of Sale. On October 31, 1991, Mr. A. Santos sent a letter to Mr. S. Aguas asking for a new price of P350,000.00 for the 500 sq. m. lot. Can Mr. S. Aguas compel Mr. A. Santos to accept the P300,000.00 and make him sign and execute a Deed of sale? (RPCPA, 92-2; 96-1-M) a. No. Mr. S. Aguas did not accept the offer of Mr. S. Santos b. Yes. Mr. A. Santos is already estopped by his signed letter and offer c. Yes. There was actual meeting of the minds d. Yes. The contract is perfected 12. Simulation of a contract may be absolute or relative. It is relative when:(RPCPA, 0591; 96-1) a. The parties do not intend to be bound at all. b. The contract is void. c. The parties conceal their true agreement. d. Answer not given 13. S sold one of his lots to B for P100,000.00. The lot, located beside a busy street, consisted of 1,200 square meters and was covered by Transfer Certificate of Title (TCT) No. 12345. After registering the sale with the Register of Deeds and the issuance to him by the said office of a new transfer certificate of title in his name, B discovered that deed of sale and the new title described S's adjoining lot which, although also consisting of 1,200 squares meters, was covered by TCT No. 12346 and located farther from the street. B learned that C, the secretary of S, typed the wrong description on the deed of sale. B now approaches you for advice on which course of action to take. What advice will you give to B? a. Annulment of the contract because he did not consent the purchase of the lot covered by TCT No. 12346. b. Rescission because the erroneous description caused him damages. c. Reformation because the deed of sale failed to show the true intention of the parties to the contract. d. Declaration of nullity of the contract because it is void ab initio by reason of the wrong object. 14. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Which of the following constitutes an offer: (RPCPA, 0591) a. An offer made through an agent b. Business advertisement of things for sale. c. Advertisement for bidders. d. Answer not given 15. A contract is in the stage of conception when: (RPCPA, 92-1) a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to the agreement. d. The contract is perfected. 16. Fraud exists in three of the following. Which is the exception? a. When through the insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. b. When there is a failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations. c. When there is an expression of an opinion by an expert which turned out to be wrong, and the other party relied upon such expert knowledge. d. When the misrepresentation refers to the usual exaggerations in trade, and the other party had an opportunity to know the facts. 17. Candelario, who knew that her ring was embellished with glass, told Cordelia that the embellishment was emerald. Cordelia, who knew that her watch was gold plated, told Candelaria that it was made of pure gold. Cordelia, believing that Candelaria's ringwas embellished with emerald, and Candelaria, believing that Cordelia' watch was made of pure gold, then entered into a contract whereby they exchanged their respective articles. A week later, Cordelia discovered that the ring was with an ordinary glass. a. The contract may be annulled at the instance of Cordelia since she discovered the fraud. b. The contract may be annulled at the instance of Candelaria since Cordelia also employed farud. c. The contract is void because of the bad faith of both parties; hence, it shall not produce any effect. d. Neither party may ask for annulment since both are guilty of fraud. The contract, thereof, is valid. 18. Ramon, a movie actor who has fathered many children by different women, donated a house and lot to Jennilyn believing that the latter is his illegitimate daughter. The deed of donation and its acceptance were in a public instrument and a new certificate of title to the house and lot was issued in the name of Jennilyn. A few months later, Ramon discovered that Jennilyn was not his daughter but that of another movie actor. Ramon now wants to annul the contract. a. Ramon may no longer annul the contract because all requisites have been complied with and a new title already issued in the name of Jennilyn. b. Ramon may annul the contract on the ground of mistake as to the identity of Jennilyn. c. Ramon may not annul the contract but he can rescind it because he suffered damages. d. Ramon need not annul the contract but he can have it. 19. S sold his only car for P100,000.00 to B. Unknown to S, B bought the car from him so that he could use the same in a bank robbery. What is the status of the sale of the car by S to B? a. The sale is void because the motive of B is illegal. b. The sale is valid because the illegality of the motive of the parties to the contract does not have any effect on its validity. c. The sale is voidable because of the failure to disclose his motive to S. d The sale is rescissible at the instance of S would be damaged by the illegal motive of B. 20. Contracts entered into a state of drunkenness or during a hypnotic spell are: (RPCPA, 93-1; 97-1) a. Void c. Voidable b. Valid d. Legal 21. It takes place when the parties do not intend to be bound at all by their agreement: (RPCPA, 93-1; 96-l; 97-1) a. Apparent contract b. Absolutely simulated contract c. Relatively simulated contract d. Deed of assignment. 22. Clarita and Aging entered into a contract where they made it appear that Clarita was mortgaging her lot and building to Aging to secure a contract of loan. The truth, however, was that Clarita do was selling her lot and building to Aging. Which of the followings statements is true? a. The parties are bound by the contract of sale. b. The parties are bound by the contract of loan and mortgage, c. The parties are not bound at all. d. The parties are bound by the contract of sale only when third persons are affected. 23. Which of the following is not a rule in the interpretation of contracts? (RPCPA, 87-1) a. If some stipulation of any contract should admit of several meanings, it shall be understood as bearing that import which is most' adequate to render the contracts effectual. b. Words which may have different significations shall be understood in that which is most in keeping with the nature and object of the contract. c. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. d. Although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor proves the contrary. 24. The defective contracts arranged according to the degree of their defectiveness from the least to the most defective are: a. voidable, rescissible, unenforceable, and void contracts. b. rescissible, unenforceable, voidable, and void contracts. c. rescissible, voidable, unenforceable, and void contracts. d. unenforceable, rescissible, voidable, and void contracts. 25. Which of the following contracts is not rescissible? a. Those which are entered into by guardian whenever the. wards whom they represent suffer a lesion of more than 1/4 of the value of the object of the contract. b. Those executed in representation of an absentee, if the latter suffer a lesion, of more than 1A of the value of the object of the contract. c. Those where one of the parties is incapable of giving consent to a contract. d. Those undertaken in fraud of the creditors when the latter cannot in any other manner collect the claims due them. e. Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority. 26. Rescission of contract can take place in this case: (RPCPA, 93-1; 97-1 ) a. When the things which are the object of the contracted are legally in the possession of third persons who acted in bad faith. b. When he demands rescission can return whatever he may be obliged to restore. c. When the party seeking resolution can perform only as to part and rescind as to remainder. d. When the seller cannot return the installments paid to him by the buyer. 27. Which of the following contracts is required to be in writing to be enforceable? a. An agreement that by its terms is not to be performed within a years from the making thereof. b. A special promise to answer for the debt, default or miscarriage of another. c. An agreement made in consideration of marriage, other than a mutual promise to marry. d. Sales of goods, chattels or things in action at a price not less than P500.00 e. All of the above. 28. On July 15, 2011, X entered into a contract with Y. On February 10, 2012, X discovered that fraud was committed at the time he entered into the contract a fraud that vitiated his consent. The action for annulment shall be brought. (RPCPA, 87-2-M) a. Within three years from the time of the fraud. b. Within four years from February 10, 2012 c. Within four years from the time A entered into the contract. d. On February 10, 2012 29. Leveriza, the owner of an apartment, leased the premises to Toribio. The terms of the lease provide for a monthly rental of P6,000.00 which shall be paid by Toribio at the residence of Leveriza about two blocks from the apartment. For the month of December, Toribio we'nt to the residence of Leveriza but the latter was not around to receive the payment. Not wanting to go back, Toribio left the payment with Nograles, a neighbor of Leveriza, who promised to give the payment to Leveriza. However, Nograles spent the amount he received for himself. Based on the foregoing facts, which of the following statements is incorrect? a. The payment by Toribio to Nograles is valid since the latter is a neighbor of Leveriza. b. The payment by Toribio is not valid because Nograles was not authorized to receive the payment. c. Leveriza can demand payment from Toribio for the December rental. d. Toribio can go after Nograles for the amount misspent by Nograles. 30. A contract may be enforced by or against a third person, except: a. In the case of stipulation pour autrui b. When a third person induces another to violate his contract. c. In case of contracts intended to defraud creditors. d. When the benefit to the third person is merely incidental. 31. In order that fraud may make a contract voidable: (RPCPA, 94-2) a. It may be incidental but both parties should not be in pari delicto. b. It may be serious and the parties must be in pari delicto. c. It may be incidental but should have been employed by both parties, d. It should be serious and should have not have been employed by both contracting parties. 32. A month ago, S, 17 1/2 years old, orally sold his bicycle for P2,000.00 to B, his neighbor, who was only 16 years old. The mother of S, learned about the sale by S of his bicycle, and demanded that S give her the amount he received. S thus gave the proceeds of the sale to his mother who spent the same for the family's daily expenses. F, the father of B, also learned about the purchase by B of the bicycle when he saw it parked in their door and began using it almost daily since B bought the bicycle. Based on the foregoing facts, what is now the status of the sale entered into between S and B? a. Unenforceable because both parties were incapacitate to enter into the contract. b. Unenforceable because the sale was not in writing. c. Validated from inception because of the subsequent acts of the parent of the parties. d. Voidable because while B was only 16 years old, S was nearing the age of majoritywhich is 18 years. 33. The following is considered fraud or fraudulent: (RPCPA, 90-1) a. Failure to disclose facts when there is duty to reveal them. b. The usual exaggeration in trade, when the other party had the opportunity to know the facts. c. Misrepresentation made not in bad faith. d. "Caveat Emptor" or let the buyer beware. 34. There shall be no reformation of contract in the following cases, except: (RPCPA, 96-2) a. In testamentary wills b. Simple donation inter vivos with no condition being imposed c. When the real agreement is void d. A contract of sale fraudulently made as a contract of lease 35. Mr. Burgos sold a parcel of land to Mr. Javier for P200,000. Mr. Burgos delivered the transfer Certificate of Title of the land to Mr. Javier. Later, Mr. Javier wanted to registers the land to his name and he needed a Deed of Sale. What can Mr. Javier do? (RPCPA, 89-1) a. Mr. Javier can compel Mr. Burgos to execute Deed of Sale b. Mr. Javier cannot compel Mr. Burgos to refund the P200,000 because the contract is not enforceable. c. Mr. Javier can sue Mr. Burgos for enriching himself at the expense of another. d. Mr. Javier can posses and utilized the land as a buyer in good faith. 36. To defraud his creditors, A contracted B by selling a land to B. B now seeks to register the land with the Register of Deeds. X a creditor of A seeks to prevent the registration on the ground that the contract is rescindable. Despite X's objection may the land be registered based on the contract in B's name. (RPCPA, 87-2) a. The land cannot be registered based on the contract which is rescindable. b. The land cannot be registered because the contract is in fraud of creditor. c. The land can be registered based on the contract because the contract is not yet rescinded. d. The land can be registered because the contract is valid and can be attacked collaterally in a land registration proceeding. 37. Manang, the guardian of Bata, a minor, bought the fish harvested from the fishpond of Bata for P7,400.00. The fish, however, had a value of P10,000 a. The sale is rescissible because Bata suffered a lesion by more than one-fourth of the value of the fish sold. b. The sale is voidable because Manang is disqualified to buy. c. The sale is unenforceable because Manang sold the fish without approval of the courts. d. The sale is void because the object is outside the commerce of men. 38. Mr. Esguerra, a former government employee, suffered from severe paranoia and was confined in the mental hospital in 1981. After his release he was placed under the guardianship of his wife to enable him to get retirement pay, In 1984 he became a mining prospector and sold some mining claims. In 1987 he sued to annul the sale claiming that he was not mentally capacitated at the time of sale. The sale in question was: (RPCPA, 93-1; 97-1) a. Illegal c. Voidable b. Void d. Valid 39. Porpolio, a wealthy businessman, had often paid the debts of Envelop his younger brother, in order to maintain the family's good name. One day, Porpolio received a text message in his ceil phone from Carton a banker, informing him that Envelop had obtained a loan from the bank but had fallen behind in his payments. Porpolio called him and said "Don't worry, if he doesn't pay in three months, I will be the one to pay". After three months, Carton sent again a text message to Porpolio to inform him that Envelop had not made any payments and that Carton was demanding payment from Porpolio on account of the promise he had made three months before. a. Carton may enforce payment against Porpolio on account of his promise since he had been paying off the other debts of envelop. b. Carton may not demand payment from Porpolio because his promise is unenforceable. c. Carton may enforce payment against Porpolio as the oral promise is sufficient agreement between them. The requirement of writing is only for convenience. d. Carton may enforce payment from Porpolio because as a wealthy businessman, Porpolio should protect his name and that of his family. 40. Stanley, 17 years old, suffered a deep cut on his eyebrow during basketball game. He requested one of his teammates to call Dr Ramos whose clinic was just a stone's throw from the basketball court. Later, Dr. Ramos sent a bill to Stanley amounting to P500.00 for the services he rendered. Stanley refused to pay bill, claiming that, as a minor, he was not liable. The charge was a reasonable amount. a. Stanley is not liable because he is a minor and thus incapable of giving consent to engage the services of the doctor. b. Stanley is liable although he is a minor because the contract involved a necessary. c. Stanley is liable only when he reaches the age of majority. d. The teammate is the one liable because it was he who personally called the doctor. 41. Contracts entered into a state of drunkenness or during a hypnotic spell are: (RPCPA, 93-1; 97-1) a. Void c. Voidable b. Valid d. Legal 42. Cecilio had Ricardo kidnapped and tortured Eduardo for refusing to sell his (Eduardo's) laid to Cecilio. Eduardo who could no longer bear the physical pains inflicted upon him signed a document of sale in favor of Cecilio. This sale is: (RPCPA, 91-2) a. Void c. Valid b. Voidable d. Answer not given 43. S offered to sell to. B his house and lot for P10,000,000. In order to pressure B into buying said house and lot, T, a very good friend of S, threatened B with death as a result of which B accepted the offer of S, It turns out now that the market value of the house and lot is P15,000,000. Is the contract of S and B valid? a. The contract is valid since it is very clear that S did not apply the intimidation. b. The contract is voidable because the consent given by B is anyway vitiated even if the intimidation was employed by a third person. c. The issue of the contract being voidable is not relevant because B will not have the contract avoidable because it is actually favorable to him. d. It is not B but S or T who can file the action for annulment. 44. Reluctantly and against her good sense and judgment, Rosemarie entered for the delivery of 5 tables to Corazon for a price of P15,000. Contract is: (RPCPA, 93-1; 97-1) a. Void c. Unenforceable b. Voidable d. Valid . 45. A has a daughter B; X has a son Y. A, B, X and Y agree together that Y will marry B. The agreement is oral. If B latter on refuses to marry Y who has spent for the necessary wedding preparations and X and Y bring an action against A and B, will the action prosper? Decide: (RPCPA 87-2) a. Between Y and B, the action will not prosper because the agreement is made orally. b. In case of A and X, the action will prosper because the agreement which was made orally is enforceable as is based on the consideration of marriage. c. As to A and X, the action will not prosper because the agreement is not enforceable as it was not they who mutually promised to marry each other. d. The action of X and Y against A and B will prosper because the agreement is based on the consideration of marriage other than mutual promise to marry. 46. F disappeared without his whereabouts having been known sometime in 1994. Whereupon in 1996, W, his wife, sold his house and lot worth P10,000,000 for only P7,000,000 in favor of T in order to support the family. In 1998, F resurfaced and began staying with his family. In 2003, F decided to file an action to rescind the contract with T. In this case: a. The contract of W with T is valid and, therefore, rescission will not be available as a remedy. b. If F can return the P7,000,000 to T and the house and Ipt has not been sold to a buyer in good faith, he can validly ask for rescission. c. Even if F can return the P7,000,000 and the house and lot has not been sold to a buyer in good faith, rescission will not lie because more than 4 years had elapsed from the reappearance and, therefore, his right to rescind has already prescribed. d. Correct remedy not indicated. 47. In a written contract of sale between S and B the true intention of the parties was not incorporated due to the mistake of S but where B is innocent. Assume that there was a meeting of the minds between S and B. Who can bring the action for reformation? a. B only c. Both B and S b. S only d. Neither B nor S 48. W, a woman, agreed to live with H, a man, as the wife of H without the benefit of marriage in exchange for the monthly support of P10,000.00 that H would give to W. Both H and W are single, of legal age, and there is no legal impediment for them to get married. Their parents have no objections to the two getting married. Based on the foregoing information, which of the following statements is true? a. The-agreement between H and W is valid because they can legally get married if they want to. b. The agreement between H and W is void for being contrary to morals. c. H may legally demand that W live with him as his wife. d. W may legally demand that H give her the monthly support of P10,000 that he had promised. 49. Rescission of contract can take place in this case: (RPCPA, 93-1; 97-1 ) a. When the things which are the object of the contracted are legally in the possession of third persons who acted in bad faith. b. When he demands rescission can return whatever he may be obliged to restore. c. When the party seeking resolution can perform only as to part and rescind as to remainder. d. When the seller cannot return the installments paid to him by the buyer. 50. The following, except one, are the characteristics of void or inexistent contract. Which is the exception? (RPCPA, 93-2) a. The defense of illegality of the contract is available to third persons whose interest is not directly affected. b. They are not subject to ratification c. The right to raise defense of illegality cannot be waived. d. The action or defense for declaration of the nullity or inexistence of the contract does not prescribe. 51. This results in the ratification of a contract violative of the Statute of Fraud: a. Receipt of benefits under the agreement. b. Failure to object to the presentation of evidence proving the oral agreement. c. Both (a) and (b) d. None of (a) and (b) 52. S sold to b P900,000 worth of opium which the latter has already paid, but S has not delivered the opium. a. B can compel S by specific performance to deliver the opium; b. If B cannot compel S to deliver the opium he can at least have the return of his P900,000; c. The government can only prosecute S and B for violation of the Dangerous Drugs Act; d. The government can criminally prosecute S and B and also confiscate the opium and the P900,000 as the instrument and fruit of the crime respectively. CONTRACT OF PARTNERSHIP 1. When cash or property worth P3,000 or more is contributed as capital, the Articles of Copartnership shall, be in a public instrument, and registered with the Securities and Exchange Commission. If the said requirement are not complied with: (RPCPA,1089) a. It will be render the partnership void. b. It will not affect the liability of the partnership and the partners thereof to third parties. c. It will not give a legal personality to the partnership. d. It will give the partnership a de facto existence. 2. Three (3) of the following are similarities, between a partnership and a corporation. Which is not? (RPCPA, 88-2; 90-1; 90-1-M) a. The individual composing both have little voice in the conduct of the business. b. Both have juridical personality separate and distinct from that of the individuals composing them. c. Like a partnership a corporation can act only through agents. d. Both are organizations composed of an aggregate of individuals. 3. Which of the following statements is not correct? (RPCPA, 93-2) a. A partnership contract is not covered by the Statute of Fraud. b. A limited partnership is one having at least one general partner and one limited partner and the limited partner shall not be liable for the obligations of the partnership. c. A limited partner who takes active part in the management of the firm becomes liable as a general partner. d. The contract of partnership is void if it contains a stipulation which excludes a partner from, sharing in the profits of the firm. 4. Joseph and Edward entered into a universal partnership of all present property. At the time of their agreement, Joseph had a four-door apartment which he inherited from his father 3 years earlier. Edward, on the other hand, had a fishpond which he acquired by dacion en pago from Robert. During the first year'of the partnership, rentals collected on the four-door apartment amounted to P480.000.00; while fish harvested from the fishpond were sold for P300.000.00. During the same period, Edward received by way of donation a vacant lot from an uncle. The partners had a stipulation that future property shall belong to the partnership. Which of the following does not belong to the common fund of the partnership? a. Fishpond. b. Rental of P480,000.00 c. Apartment. d. Vacant land. 5. Which of the following stipulations is valid? a. A stipulation excluding a capitalist partner from profits. b. A stipulation exempting a capitalist partner from losses. c. A stipulation exempting an industrial partner from losses. d. A stipulation excluding an industrial partner from profits. 6. Which of the following statements is not correct? (RPCPA, 93-2) a. A partnership contract is not covered by the Statute of Fraud. b. A limited partnership is one having at least one general partner and one limited partner and the limited partner shall not be liable for the obligations of the partnership. c. A limited partner who takes active part in the management of the firm becomes liable as a. general partner. d. The contract of partnership is void if it contains a stipulation which excludes a partner from sharing in the profits of the firm. 7. The following persons are disqualified to form a universal partnership. Who are the exception? (RPCPA, 88-2) a. Brother and sister b. Husband and wife c. Those guilty of adultery and concubinage d. Those guilty of the same criminal offense in the partnership is entered into consideration of the same. 8. Gregory, Edmond and Mark are partners in GEM Company with contributions of P10,000.00, P40,000.00 and P50,000.00 respectively. Their agreement shows that they will share in the profits in the ratio of 2:3:4. During the year, the partnership sustained a loss of P9,000.00. How shall this loss be divided among the partners? a. Equally at P3,000.00 each. b. Gregory, P900.00; Edmond, P3,600.00; and Mark, P4,500,00. c. Gregory, P2,000.00; Edmond, P3,000.00; and Mark, P4,000.00. d. The partners must establish first a loss sharing agreement before the loss may be divided because they failed to have an agreement on the division of loss. 9. Which of the following statements is false when no one among the partners was appointed as manager? a. Each partner will be considered as agent of the partnership. b. Any one may make an important alteration in the immovable property of the partnership without the consent of the others provided it is useful to the partnership. c. In case the act of one partner is opposed by another, the decision of the majority of the partners will prevail. d. In case of a tie in the voting, the tie shall be resolved to the vote of the partner owning the controlling interest. 10. Three (3) of the following are rights of a partner. Which one (1) is not? (RPCPA, 90-1) a. Right to associate another person to his share. b. Right to admit another partner. c. Right to inspect and copy partnership book. d. Right to ask dissolution of the firm at the proper time. 11. The share in the profits of a partner is regarded as received by him and thus taxable although not yet distributed. This principle is known as: (RPCPA, 93-1) a. Advanced reporting of income. b. Actual receipt of income c. Accrual method of accounting d. Constructive receipt of income. 12. 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. Il. He may be removed as manager with or without just or Iawful 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 formatio a of the partnership c. II and III pertain to a partner appointed through a document after the formation of the partners lip. d. I and IV pertain to a partner appointed as manager in the articles of partnership 13. Bears the loss of property contributed to the partnership. (RPCPA, 89-1) a. Capitalist partner b. Limited partner c. Partners contributing usufructory rights. d. None of t le above. 14. A, B, and C are general partners in ABC Partnership. D is a debtor to the partnership in the amount of P15,000. A received from debtor D the sum of P5,000 and issued; receipt identifying the amount as his share. Then D become insolvent, B and C cannot collect the P10,000. (RPCPA, 88-1-M; 92-1; 96-1-M) a. A cannot be compelled to share the P5,000 with B and C. b. B and C can charge the capital of A with their share of I he P5,000. c. A can by compelled to share B and C with the P5,000. d. B and C should automatically sue D to collect the P10,000. 15. A is the managing partner in A & B Company. X is indebted to A for P20,000 and to the partnership for P60,000. When both debts mature, X pays A P20,000 and the latter issued a receipt for his personal credit. The payment for P20,000 shall be applied: (RPCPA, 95-1) a. 1/4 in favor of A and 3/4 in favor of partnership. b. To the whole debt owing to A. c. 1/2 in favor of A and 1/2 in favor of the partnership. d. To the debt owing to the partnership. 16. In the partnership of A, B and C, A was appointed in the Article o; Co-partnership as managing partner. As such manager and acting in good faith: (RPCPA,'90-2) a. His power is revocable even without his consent, b. His power can be revocable at any time even without just cause provided that it is approved by the partners owning the controlling interest. c. He may execute all acts of administration despite the opposition of B and C. cl. He can be removed for valid cause without the vote of the partners owning the controlling interest. 17. Donna, Emma, Alma and Rona are partners in DEAR Company with Donna as manager, Tricia owes DEAR Company PS,500.00 and Donna, in Donna's personal capacity, P4 500.00. Tricia's debt to Donna is secured by a pledgu of her diamond ring. Both debts are already due. Tricia pays P4,500.00 to Donna and tells her that the same is in payment of her debt to Donna. Donna, thus, issues her personal receipt. a. The payment of P4,500.00 will be applied proportionately to the two credits: to the partnership credit at P2,475.00; to Donna's credit at P2,025.00. This is so because Donna should not place her interest before that of DEAR Company. b. The payment of P4,500.00 will be applied entirely to Donna's credit. c. The payment will be applied in partial payment of the partnership credit of P5,500.00; hence, there will be a balance of PI,000.00. d. Tricia, Donna and DEAR Company will have to agree as to which credit the payment shall apply. 18. Torres is indebted for P5,000.00 to MACE Trading Company, a partnership managed by Mendoza to whom Torres also owes P10,000.00. The two debts which are both demandable are unsecured. Torres remits P4,500.00 to Mendoza in payment of his debt to him. Accordingly, Mendoza issues a receipt for his own credit. To which credit should the payment be applied? a. To Mendoza's credit because the payment made by Torres is intended for his debt to Mendoza who issues his own receipt. b. To both the partnership credit and Mendoza's credit proportionately at P1,500.00 and P3,000 00 respectively. c. To Mendoza's credit because its amount is greater than that of the partnership credit. d. To the partnership credit because the managing partner should not prefer his own interest to that of partnership. 19. A is the capitalist partner and B the industrial partner. A engaged personally in the same kind of business the partnership is engaged in: (RPCPA, 87-1-M; 88-2; 89-1-M) a. If there are losses, the partnership will bear the losses. b. If there are profits, the profits will shared by A and the partnership. c. If there are profits, A will give the profits to the partnership. d. A will be excluded from the partnership and pay damages. 20. Belinda, Erlinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY Enterprises, a dealer in cosmetics and other beauty products, with contributions of P60,000.00, P50,000.00, P40,000.00, P30,000.00, P20,000.00, and P10,000.00, respectively. No one was appointed as manager in the articles of partnership. a. Belinda is the manager because she made the biggest investment. b. Every act in the ordinary course of the business will have to be decided by the majority determined on a per head basis. c. Every act in the ordinary course of the business will have to be decided by the controlling interest (biggest investment) although the partners owning them do not constitute the majority. d. All the partners are agents or managers of the partnership and any one of them may perform acts of administration. 21. Three of the following will cause the automatic dissolution of a general partnership. Which one will not? 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. 22. Aguas and Bautista are partners in a real estate partnership. The partnership owns a piece of land which Castro desired to buy. Castro "contacted Aguas and inform him of his desire to buy the land and Aguas did not tell Bautista about it. Aguas bought Bautista out of the partnership and afterwards sold the land to Castro with a big profit. (Phi! CPA, 88-1; 88-2-M; 90-1-M) a. The partnership is dissolved when Aguas became the sole owner. b. The sale of the land to Castro is void because it was without the knowledge of Bautista. c. Aguas is not liable to Bautis