1. Which of the following reflects a correct legal precept? a. Private corporations under the Corporation Code are created by law. b. A private corporation may always be held civilly liable for negligent acts committed by its employees. c. The corporate obligations are, as a rule, not the obligations of the corporate officers as long as the absence of liability of the latter is reflected in the corporate by laws. d. Private corporations under the Corporation Code may either be de facto or de jure. 2. Which of the following is in conformity with both law and jurisprudence? a. The separate personality of a corporation may be disregarded when an incorporator dominates and controls the outstanding capital stock. b. Shareholders cannot maintain a suit in their own names to recover corporate property. c. A corporation does not fall within the constitutional protection against unreasonable searches and seizures. d. A corporation has a right against self-incrimination. 3. Ten persons, all Filipinos, and acting as incorporators, filed an application for the incorporation of XYZ Bank, Inc. Which of the following is correct? a. The incorporators are not disqualified by reason of their nationality. b. XYZ Bank, Inc. may issue no-par value shares as long as the consideration thereof is not less than P5.00. c. The incorporators must all be Philippine residents. d. None of the above. 4. When the articles of incorporation provide for non-voting shares, the holders of such shares shall nevertheless be entitled to vote on the following matters, except: a. Dissolution of the corporation. b. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of corporate property. Amendment of the articles of incorporation. c. Incurring, creating, increasing or assignment of bonded indebtedness. 5. ABC Corporation, a private corporation engaged in the business of importing used cars from Japan was issued a certificate of incorporation by virtue of R.A. 27890. Because of a failed business transaction, ABC Corporation sued Mr. X for a damage arising from the latter’s alleged breach of its contractual obligations.

a. Mr. X cannot allege “lack of legal capacity to sue’ of ABC Corporation in its motion to dismiss because it has a legal personality conferred by law. b. Mr. X cannot allege “lack of legal capacity” in its motion to dismiss because it is not allowed to attack the existence of the corporation collaterally. c. ABC Corporation is a de jure corporation and its existence can be attacked only through a quo warranto proceeding. d. Attacking the existence of ABC Corporation may be done through a motion to dismiss because its creation is void. 6. No 1 - Within five (5) years from issuance of its certificate of incorporation, the newlyformed corporation must formally organize and commence business operations. Failure to do so within such period is a ground for dissolution. No. 2 - Every member of the board of every corporation must own at least one (1) share of stock standing in his name in the books of the corporation. a. b. c. d. Both statements are false. Both statements are true. The first statement is true; the second is false. The second statement is true; the first is false.

7. A corporation was formed by fifteen (15) incorporators and its certificate of incorporation was duly issued. A year after its attainment of juridical personality, the stockholders, who are themselves the members of the board adopted a resolution, providing for the following (i) That all of the corporation’s issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (ii) That all of the issued stock of the corporation shall be subject to certain specified restrictions; and (iii) That the corporation shall not list in any stock exchange or make any public offering of any of its stocks of any class. a. The corporation is a close corporation because the resolution contains the elements of a close corporation; b. The corporation is de facto because although it has a certificate of incorporation, the provisions in the resolution should have been contained n the articles. c. The corporation is an open corporation. The corporation is a corporation by estoppel because although it operates as a corporation, it did not comply with certain legal requirements for the establishment of a close corporation. 8. Which of the following is correct? a. The secretary of a corporation must be a citizen of the Philippines and a resident of the Philippines. He must be also a member of the board. b. The members of the board are liable whenever they vote for unlawful acts. c. If there are only ten (1) directors elected although the articles of incorporation provide for fifteen (15) directors, the quorum in a board meeting is eight (8). d. A director may be removed by the vote of all the stockholders in any meeting. 9. Which of the following acts could be ratified by a vote representing at least 2/3 of the outstanding capital stock?

10. A bid of P50. Dividends are profits but not all profits are dividends. A bid of P43. 12. All dividends are taxable as income of the stockholder. c.000 for 504 shares.000 for 300 shares. No. The total liability of X. The acquisition must be for a legitimate purpose. To all issues of shares or dispositions of shares of any class.000 shares of stock in ABC He paid 50% of the subscription but such subscription was later on declared delinquent. Only to the issuance of previously unissued portions of the outstanding capital stock. A bid of P45.000 for 500 shares. An attempt by a director to acquire or actual acquisition of any interest adverse to that of the corporation in respect of any matter reposed upon him in confidence.a. d. d. 13. The following are the requisites for the corporate power to acquire its own shares. The pre-emptive right extends to the right to subscribe. 11. X subscribed to 1. d.000. 2 – A transfer of shares to a non-stockholder is binding to the corporation as long as the transfer is in a public document. Which is the exception? a. Which of the following is correct? a. Which bidder is considered the highest bidder in the delinquency sale? a. Only to new issues of shares arising out of an increase of the capital stock. Acts of directors or trustees who are guilty of gross negligence or bad faith in directing the affairs of the corporation. 1 – Holders of delinquent shares are not entitled to dividends. To all issues or dispositions of shares of any class other than redeemable or treasury shares. Acts of directors constituting an approval of patently unlawful acts. b. d. b. including the balance. accrued interest. 14. c. a. The corporation must have unrestricted earnings in its books to cover the purchase of the shares except in the case of redeemable shares. b. A bid of P40. The acquisition must be for the sole purpose of acquiring shares in order to eliminate fractional shares. c. Acquisition of a business opportunity which should belong to the corporation. b. c. thereby acquiring profits which should belong to the corporation. No. The declaration of any kind of dividend requires the assent of at least 2/3 of the outstanding capital stock. d.000 for 900 shares. c. b. Dividends may be declared out of a reappraisal surplus or revaluation increment because they constitute profits. costs and other expenses amounted to P50. . The corporation must have unrestricted earnings in its books to cover the purchase of shares.

it is payable to the order of the King of the Philippine Islands. It is indorsed to the order of Jose. Which of the following is not a negotiation of a negotiable instrument? a. X wants to lend money to third persons but asks his friend. c. 15. A is an assignee. c. no. d. d. D issues a note payable to the order of P. b. The instrument is payable to bearer if a. 20. Both statements are false. 16. 2 is true. a. 2 – A foreign corporation engaged in business in the Philippines may sue and be sued n the Philippines. 1 is false. 19. B is not a party to the note. but X is. d. An indorsement is restrictive if: a. No. c. As payee. B receives no consideration for lending his name. No. B is an accommodation party. 17. it is indorsed to Jose or bearer. c. B is not an accommodation party. B to sign promissory notes of the borrowers as the lender/ payee. 18. d. b. 2 is false. Delivery to the payee of an instrument payable to bearer Jose. X is a party accommodated. it is indorsed to Jose in trust for my child. Delivery of an instrument payable to the order of Superman. a. 1 is false. No. No. c. b. it is indorsed to Jose. Both statements are false. No. no. No 1 is true. d. it is payable to cash. Both statements are true. 1 is true. b. c. A may negotiate to B by delivery alone. No. No. . it is payable to the order of cash. 1 – A foreign corporation intending to sue in Philippine courts must always have a license to engage in business n the Philippines. indorsement and delivery of an instrument payable to the order of Jose. b. d. 2 is true. 2 is false. c. a. P indorses the note thus: “To A. A may negotiate to B by indorsement completed by delivery.a. Delivery to the payee of an instrument payable to bearer. b. Both statements are true. b. B indorses the notes to X. Sgd P”. it is payable as in all of the above.

2 is true. Through illegal means. To D. c. and deposits it in his account in M Bank which indorses the check for clearing with the words” All prior indorsements guaranteed”. No. b. 1 – The maker engages to pay according to the tenor of his acceptance. I promise to pay Pedro Santos P50. d. DR. Pay to the order of P P50. Common carriers are required to cater to every member of the public. d. M Bank is liable to O Bank as an indorser.000 and such other sums he may be entitled to. non-negotiable? a.000. Sgd. 24.000 out of my money in your hands. B cannot collect from X. 1 is true. Pay to X or his order P50.d. c. d. Both are true. F gets hold of the check. c. d. 2 is false. Which among the following has a conditional promise hence.Which is correct? a. 21. I promise to pay P or his order P30. 1 is false. b. Which of the following statements is not legally true? a. I promise to pay to the order of P P50.000 on the day his father passes away. If B cannot collect from the maker. a. No. . Drawer issues a check to the order of P drawn against O Bank. To D. P can still collect from Drawer. 25. No. O Bank is liable to Drawer for reimbursement of the amount deducted from the account of Drawer. Sgd DR. c.000 with interest. I promise to pay O or bearer P50. If B cannot collect from the maker because of forgery of the latter’s signature. The following instrument is negotiable assuming all other requisites are present: a. 23. If B cannot collect from the maker. A cannot negotiate the note any further. b. No. indorses the check to himself by forging P’s signature. B can collect from X after giving him a notice of dishonor. B can collect from X. All of the above. b. Pay to the order of P P50. a. 22.The indorser warrants that the instrument is genuine only n certain cases.000 and deliver 10 sacks of rice. c. No. 26. 2 . B can never collect from X. No. X indorses a note sans recourse and delivers it to B. Both are false. None of the above is conditional. If B cannot collect from the maker because of forgery of the latter’s signature.000 b. d.

That the shipper will be liable only for P500. c. The doctrine of last clear chance in case of collisions. Which stipulation is not void? a.00 per baggage.b. Contributory negligence of the plaintiff. 31. d.00 only per luggage except if the shipper or passenger declares a higher value. 29. d. 28. If there are liabilities under the Workmen’s Compensation Law. d. The doctrine of limited liability may not be availed of as a defense in the following cases. None of the above. when a vessel makes a wrong maneuver in the second zone of collision. The ship owner may invoke fortuitous event as a defense. No one is liable. an entity must have a certificate of public convenience. a. The common carrier’s duty to observe extraordinary diligence in the vigilance over the goods. c. when there is no evidence as to which vessel is negligent. There is no exception. d. All forms of fortuitous events. c. when there is collision. To be a common carrier. ends when the shipper has availed of his right of stoppage in transitu. It was established that the ship was unseaworthy but would have successfully completed the voyage had it not been for the typhoon. c. ends when the goods are lost in transit. b. d. Travel agencies as such are common carriers. Which could be availed of as a complete defense by a common carrier? a. If there are expenses incurred when the vessel was repaired before its loss. d. The ship agent may not be held liable because he is acting for a disclosed principal. . 30. begins upon the execution of a bill of lading. It is possible for a customs broker to be a common carrier if it transports goods for a fee. c. b. whenever a collision occurs. a. b. The doctrine of inscrutable fault applies a. That the shipper will be liable for P500. 32. b. The ship agent may be held liable in case the ship owner is not found. b. b. c. The vessel is insured. A commercial vessel was sunk when it was overtaken by a typhoon in the ocean. 27. Which is the exception? a. ends when they are temporarily unloaded in transit.

No. Both are true. d. he sold the house to Y without a corresponding change in the policy but X continued to pay the premiums. Recovery cannot be had because of material misrepresentation. In answer to a question in the insurance application on whether or not he had suffered from a heart ailment. 36. none of the above. 38. The interest of a beneficiary continues even if his negligence caused the death of the insured. The insured shall have the right to change his beneficiary as a rule.When there is double insurance. Two years after the policy became effective. A wife has an insurable interest in the life of her creditor.c. d. 37. 2 . Recovery may be had under the policy because the ailment concealed was not the cause of death. The insurer may legally refuse to pay. d. The insurer is entitled to the payment of premiums as soon as the thing insured is exposed to the peril insured against. d. Which is false? a. X can recover from the policy because there was no change in the policy. b. there is always over insurance. the duty of extraordinary diligence may be lessened by stipulation. When a passenger is carried gratuitously by a common carrier. b. 34. c. No. d. Recovery cannot be had because of a material concealment. if there is an agreement to the contrary. The shipper will be liable only for P500. 1 . the duty of extraordinary diligence of the carrier continues for a limited period. b. Recovery can be had. 35.A contract of suretyship can never be an insurance contract. a. X can recover because he is the one who is paying the premiums. If a loss occurs. c. Y can recover because he is the owner. there is only a duty to observe ordinary diligence. X died of a liver ailment. if the insurer waives the premium in the meantime. a. c. All are void. c.00 per baggage whatever be the value declared. X answered “NO”. b. . Terrorists cannot be insured because they are public enemies. b. a. d. except a. a. if the insured deposits a check. X insured his house against fire. 33. During the effectivity of the insurance. c. the duty of extraordinary diligence of the carrier ceases.

The latter issued a negotiable warehouse receipt to D. c. The mortgage is binding even to third persons because it is in a public instrument. Five months after. 43. orally or in writing. 1 – A bank may be may lend to a single borrower more than fifteen (15%) of the bank’s unimpaired capital. 1 is true. As official depositary of the Philippine government. he travels to Divisoria and sells all the contents of his truck. d. d. 1 is true. c. d. c. M mortgaged his concrete house located in a rented lot to B. V must prepare an affidavit listing his creditors. Confronted with conflicting claims of ownership. the amount of their credits and their due dates. B can foreclose the mortgage. If the debt is not paid. No. 2 is true. . 40. Both are false. deliver the cement to D because he is the depositor. V is a vegetable buyer. b. 1 is false. no. No. No. V does not have to perform any of the above acts if his business is not registered. As financial adviser of the Philippine government. d. W should . a. B cannot foreclose the mortgage. 1 is true. 2 – A deposit in a bank in foreign currency may be inquired into provided the depositor gives his consent. 39. deliver the cement to O because he is the owner. V must notify his creditors before selling all the contents of the truck. 42. The deed of mortgage which is embodied in a public instrument is denominated as a chattel mortgage. No. 2 is false. 2 is false. He goes to Baguio City. deliver the cement to D because he is the holder of the warehouse receipt. V does not have to perform any of the above because his sale is in the ordinary course of business. c. As fiscal agent of the Philippine government. 41. As the watchdog of government funds. No. No. c. a. The mortgage is totally void because the house is a real property. No. 2 is false. D deposited 500 bags of cement in the warehouse of W. At the same time D arrived in the warehouse claiming the cement and presenting the warehouse receipt. no. O came to the warehouse to claim the goods alleging that the cement deposited by D were merely stolen by the latter. buys vegetable in bulk and after filing up his truck. No.b. d. a. b. b. b. c. Both are false. compel the claimants to interplead so the court could decide who has the right to the goods. a. b. Which among the following is not a function of the Bangko Sentral ng Pilipinas? a. Both are true. d. If the debt is not paid.

d. No. Universal bank. (a) Savings deposit – P300. No.000. They also have the same deposits with the same amount in Allied Bank Makati. The distribution of dividends from capital and the acquisition of corporate shares without corporate unrestricted retained earnings is not allowed by law because of: a. c. b. X imports goods from Japan through a letter of credit issued by National Bank. a.000. 1 .44. X is only civilly liable to the bank. b. (c) Time deposit P350. The corporate opportunity theory. None of the above. No. 45. buying and selling foreign exchange and gold and silver bullion and lending money against the borrower’s security in property. 47. d. 1 is true. Thrift bank. d. Perla. a. 2 . b. Both are false. Commercial bank. He therefore. d. (b) Demand deposit – P400. . Rural bank. a. opened and maintained the following accounts with Allied Bank Recto. one deposit. X may be sued for theft by the bank. c.A writ of garnishment directed to a bank deposit is prohibited by law. 2 is true. No. It is a bank which creates or accepts demand deposits subject to withdrawal by checks and primarily organized to carry on the business of accepting drafts and issuing letters of credit. X may be deprived of his import license . b. X may be sued for estafa. executed a trust receipt agreement with the bank. X had no money to pay for the balance of the importation. If Allied bank becomes insolvent the Philippine Deposit Insurance Corporation will be bound to be liable to the spouses for its insurance liability equivalent to a.The Ombudsman may inquire into the bank deposit of a public officer whose case is pending criminal investigation in the Ombudsman even if there is no actual case filed in court. The trust fund doctrine. No. Both are true. c. When the goods arrived in Manila. 48. No. b. X got hold of the gods and sold the same but failed to remit to the bank the proceeds of the sale corresponding to his balance. receiving deposits. c. discounting and negotiating promissory notes. The corporate entity doctrine. 2 is false 46. 1 is false.000. two deposits. Jose and his wife.

PAL is willing to pay only P 4. One of the following has no insurable interest in the life of Alberto: a. b. a.000. 50. valid because no declaration had been made on the actual value of the baggage and Mr. The following shall produce the effect of payment of debts: . one to be affixed by him at the time it is issued and the second or counter-signature. otherwise it is incomplete. A check upon which the holder’s signature must appear twice. Where the shareholder does not pay fifty percent of the value of the shares to be subscribed. When can a corporation deny pre-emptive right to stockholders? a. Where a stockholder is delinquent in the payment of unpaid balance of his subscription. there is an indication of a particular account to be debited with the amount. None of the above 54. b. valid because Mr. six deposits. c. c. Mr. b. to be affixed by him before it is paid.00 for each baggage. Where the articles of incorporation so provides. answer not given. three deposits. not valid as it is contrary to public policy. c. the instrument is payable out of a particular fund. d. 49. d. his wife his mother his mistress his daughter 52. certified check stale check traveller’s check answer not given 51. Mendoza sues the airline company.000. d. 53. despite the fact that the clerk had called his attention to the stipulation in the ticket. c. The refusal of the airline company to pay the claim is: a.00 for the loss of both of his suitcases during his flight from Manila to Davao via Philippine Air Lines. there is an indication of a particular fund out of which reimbursement is to be made. is called: a. However. d.000. d. d. b.c. Mendoza has not declared a greater value. Mendoza claims P 50. Mendoza did not pay any freight. not valid as it is not in accordance with law. Mr.00 on the ground that the airline ticket stipulates that unless a higher value is declared. An instrument is rendered non-negotiable if. b. any claim for loss cannot exceed P 2. Mendoza did not pay the corresponding freight charges. c.

Delivery of check Tender of Central Bank notes Delivery of promissory note answer not given What are watered stocks? a. a. e.a. Because it failed to incorporate under existing statutory authority. Assignment Delivery of a bearer instrument Indorsement completed by delivery of an instrument payable to order Delivery of an instrument to the payee 58. Exercised by the Board of Directors but not ratified by the stockholders. Contracts for water transportation from foreign ports to Philippine ports are primarily governed by: a. d. This is not negotiation of a negotiable instrument. None of the above 56. b. Why is a de facto corporation not considered a de jure corporation? a. c. When does a stock become delinquent? a. c. d. When no payment is made within two (2) months as fixed in the contract or call. d. Stocks issued for a consideration less than its par or issued value. When no payment is made within one (1) month from date as fixed in the contract or call. The Civil Code of the Philippines The Code of Commerce Salvage Law Public Service Act Carriage of Goods by Sea Act 60. Stocks issued for a consideration less than P10. b. Stocks issued for a consideration more than its par or issued value. When no payment is made within fifteen (15) days from the date as fixed in the subscription contract or in the call made by the Board of Directors. b. d. 55. None of the above 59. b. 57. d. d. b. c. Ultra vires acts are acts of a corporation which are: a. Not within the corporate powers conferred by the Code or articles of incorporation. Necessary and incidental to the exercise of the powers conferred upon the corporation. b. c. None of the above. c. c. .

claim has to be made for the damage sustained by goods. d. a. c. b. The corporation may enter into contracts with another corporation. c. d. The same as subscribed capital stock. The corporation may sue but it cannot be sued. d. 61. The same as authorized capital stock. The corporation’s exercise of corporate powers is not recognized by the courts for reason of public policy. d. d. 64. The total shares issued to subscribed or stock holders. Which is not a consequence of the corporation’s separate personality? a. c. Which of the following conforms with the requirements of the Corporation Code? . None of the above. A policy of insurance is contestable: a. fully or partially paid. “outstanding capital stock” means: a. c. Under the provisions of the Carriage of Goods by Sea Act. Its corporate existence may be challenged in court by any taxpayer. except treasury shares. It represents the paid up capital stock. b. The claim should be made within three (3) days from receipt when the damage or average could be ascertained from the outside. b. All voting trust agreements shall not exceed five (5) years. The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained only upon opening the package. c. A voting trust is irrevocable during the time stipulated.b. The stockholder remains the beneficial or equitable owner of the shares while the trustee is the legal owner. as long as there is a binding subscription agreement. 63. A voting trust is created for the purpose of conferring upon the trustee the right to vote and other rights pertaining to the shares. d. Which one of the following is not a characteristic of a voting trust agreement? a. As used in the Corporation Code. The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained from the outside. if it is a life insurance policy within 2 years from its inception or last reinstatement on the ground of concealment or misrepresentation if all the above is present 66. 65. The corporation has a nationality or citizenship. The claim should be made upon receipt when the damage or average could be ascertained from the outside. 62. c. b. The corporation may acquire and dispose of properties. b. whether or not.

b. Which is the exception? a. d. the Trust Fund Doctrine is violated. The doctrine of general capacity. The trust fund doctrine. must be a natural person and must own or subscribe to at least one share of stock. Every incorporator must be residents of the Philippines. b. Shares to be issued in good faith with the approval of the stockholders representing 2/3 of the outstanding capital stock in exchange for property needed for corporate purposes. Corporators are those who compose a corporation and is a term which includes stockholders. members and incorporators. In the following cases. President Vice-President Treasurer Secretary 71. 68. d. a. b. The law also requires that shares should not be issued below its par or issued value. c. b. Shares to be issued in compliance with laws requiring stock offerings to the public. d. Incorporators are those who originally compose the corporation. When the corporation allows the issuance of watered stocks. The doctrine of limited capacity. Even if not denied. b. 67. . Shares to be issued in payment of a previously contracted debt. d. c.a. except in case of. The pre-emptive right if not denied by the corporation generally extends to all issues of shares in proportion to a stockholder’s shareholdings. except: a. c. 69. These requirements is a consequence of the. The following are the corporate officers of a corporation. Shares to be issued to incorporators. whose names are mentioned in the articles of incorporation majority of whom have signed the said articles. The acquisition of shares and the declaration of cash dividends require that the corporation has unrestricted retained earnings. c. a. The theory of separate personality. cash dividends property dividends stock dividends script dividends 70. An incorporator in a domestic corporation may be an alien and a nonresident. except: a. d. c. the right does not extend to certain specified issuances enumerated below. The Board of Directors alone may declare the following type of dividends.

c. 75. thus they are: . 73. approval of the majority of the board and concurrence of the stockholders representing 2/3 of the outstanding capital stock is necessary in the exercise of the powers except: a. d. c. d. Mandamus Extra-judicial sale Withholding of stock dividends Deduction from cash dividends 74. Investment of corporate funds in another business or purpose. To adopt. d. grandfather c. Which of the following are prohibited considerations for the issuance of stocks? a. All provisions and stipulations in insurance contracts are prepared by the Insurer.b. In the following instances. amend or repeal the by-laws. c. b. b. In the following instances. To declare stock dividends. 72. b. b. c. When the corporation releases or condones payment of the unpaid subscription. Which of the following cannot be a close corporation? a. To increase or decrease capital stock. Reduction of term. d. 77. When there is payment of dividends without unrestricted retained earnings. None of the above. goodwill past services accounts receivables None of the above The following are remedies available to a corporation to enforce payment of stocks except: a. To deny pre-emptive right. b. d. Extension of term Appointment of an executive committee. c. d. mining corporation stock exchange educational institution All of the above 76. c. A person has an insurable interest on the life of his: a. appraisal right may be exercised. spouse 78. except: a. friend b.

The cause or consideration in insurance contracts is: a. b. b. pro-forma contracts b. contracts of adhesion c. the desire of the assured b. by a friendly fire . the proceeds c.a. failure to communicate c. if the loss or destruction was a consequence of the effort to save the thing insured from being burned. unlimited 82. at the inception of the contract of insurance. at the inception of the policy or from its last reinstatement 85. the last reinstatement c. telling lies 81. the policy remains compensable. Concealment in insurance is: a. If a thing insured under a fire insurance policy is lost or destroyed by some other means other than fire. by a hostile fire b. Insurable interest on the thing insured and insurance interest on the policy in property insurance or non-life insurance must be reposed on one and the same person: a. unilateral contracts 79. 84. at the tine of the loss c. a. To be compensable. if lost or destroyed because of an earthquake 83. at the inception of the contract and at the time of the loss. the thing insured under a fire insurance policy must be lost or destroyed: a. the value of the thing to be insured c. hiding the truth b. gratuitous 80. the premium b. if lost or destroyed because of volcanic lava c. The extent of insurable interest in non-life insurance depends on: a. A life insurance policy could no longer be questioned after two (2) years that the policy had been in force counted from: a. the inception of the policy b.

c. a. Master’s Certificate Bill of Lading Affidavit of Desistance Maritime Protest Maritime Complaint This established rule provides that the liability of the ship owner or agent. d. transportation. gas. Error in Extremis Rule Doctrine of Declared Limitation in Maritime Law Real Nature of Maritime Law Doctrine of Presumed Negligence of Common Carriers 89. equipment and freight during the voyage. c. a. arising from the operation of a ship. without any negligence or misconduct on his part. 88. a. It is a legal scheme whereby a debtor. b. a citizen of a country with whom the Philippines is at war. It is a written statement by the master of vessel.c. attested by a proper judicial officer or a notary. b. It is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity. telephone or telegraph service. A public enemy who cannot be the object of a life insurance contract is one: a. d. a. Insolvency Proceedings Suspension of Payments Corporate Rehabilitation Voluntary Insolvency 91. e. . It rests on fundamentally on the unfairness of a corporate officer or director taking advantage of a prospect for his own personal benefit when the interest of the corporation justly needs protection. c. an American or Canadian c. may petition for more time within which to settle such obligations. who has sufficient assets but who may be unable to meet his obligations as and when they fall due. b. to the effect that damage suffered by the ship or her voyage was caused by storms or other perils of the sea. d. who is a fugitive and has a prize on his head b. Corporate Entity Doctrine Corporate Interest Doctrine Business Judgment Rule Corporate Opportunity Doctrine. b. is limited to the vessel. 87. This doctrine is a recognition by the courts that the fiduciary standards could not be upheld where the fiduciary is acting for two entities with competing interests. water. 90. d. by voluntary scorching 86. c.

92. b. c. The cause of the unforeseen and unexpected occurrence. c. It applied for the issuance of letters patent. hence not capable of exclusive appropriation. It must be impossible to foresee the event which constitutes the case fortuito. c. Pinoy Ramen. d. or if it can be foreseen. The debtor was blameless d. The invention is not patentable because Samsung is a foreign corporation and it should file its application in its home country. a. c. The invention is not patentable because it is a combination of old functions which does not produce a new result. e. Public Service Public Corporation Public Utility Commodities Trader As applied in Transportation Laws.a. Nissin is guilty of trademark infringement because it did not register its trademark “Ang Sarap Pinoy Ramen”. . Substitution of Creditors c. It is the substitution of one person in the place of another with reference to lawful claim or right. b. which of the following is a not an element of a fortuitous event? a. or the failure of the debtor to comply with his obligations. “Ang Sarap Pinoy Ramen”. must be independent of human will. a. “Ang Sarap Pancit Palabok” with the Intellectual Property Office. including its remedies or securities. The invention is patentable because it combines existing elements. Lucky Me sued for trademark infringement. Nissin is not guilty of trademark infringement because its product. and produces a new and useful result. Samsung invented a cellular phone that can also play digital music or MP3s. d. b. Subrogation 94. Lucky Me registered its trademark. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. a cellular phone and a digital music player. Nissin subsequently introduced its new product. 93. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. Nissin is not guilty of trademark infringement because the trademark “Ang Sarap” is descriptive. Assignment of Rights b. b. belongs to a different category from Lucky Me’s product. 95. so that he who is substituted succeeds to the rights of the other in relation to a debt or claim. the convenience of having two gadgets in one. The invention is patentable because it is a new product which is beneficial to the public. a. it must be impossible to avoid. Pancit Palabok. namely.

. The Bangko Sentral has the full discretion and expertise to grant authorities to register as banking institution. The chattel mortgage is not extinguished as it is an accessory contract. Yes. Only the National Library is allowed to reproduce books and other works. The chattel mortgage is extinguished because the SCM is stopped in not foreclosing the mortgage after Allan is in default in two installments. 97. c. Nissin is guilty of trademark infringement because the trademark “Ang Sarap” is fanciful and arbitrary. The Credit Foundation of the Philippines is a non-stock corporation. No. The copy of the Journal is marked “For Room Use Only” and is therefore not made available to the public outside of the Library. b. The chattel mortgage is not extinguished because the mortgagee’s right to foreclose the same is in rem. May the Foundation be granted the said authority? a. reproduced one copy of the Journal for lending to the University’s students for room use. Is the U.000. The word “Philippines” as part of a corporate name is reserved for government owned or controlled corporations. 96. It is a rule that determines the nationality of a corporation on the basis of the place where the foreign corporation is incorporated or registered? b. Yes.d. hence capable of exclusive appropriation. Only stock corporations can be organized as a bank. The chattel mortgage is extinguished as Magtanggol is a purchaser in good faith and for the value. b. d. The reproduction is consistent with fair use. What would be the effect of the sale on the chattel mortgage contract? a. It is a rule that determines the nationality of a corporation on the basis of the nationality of the majority of the stockholders. Yes. Yes. Law Library liable for copyright infringement. 99. Allan purchased 2005 Civic V-tech from Honda Cars Manila (HCM) for P950. It applied with the Bangko Sentral for authority to organize itself into a bank. c. Allan executed a promissory note and a chattel mortgage to secure payment thereof. No. The Library. It is composed of at least 100 natural persons. a. Center Book Store is the publisher of the book Legal Journal. d.E. which handles deposit of funds from its members and lends the same funds to the general public. d.E. College of Law. HCM can still foreclose the same. a purchaser in good faith and for value. No. in order to preserve the original book. each of whom has deposited some amount of money into the Foundation. payable in twenty-four (24) monthly installments. Hence. Thereafter. c. It donated one copy to the Library of the U. It qualifies as a bank because its funds are obtained from more than 20 persons. The law only allows a library to photocopy a book if it is fragile or rare. What is the so-called “Grandfather Rule” under the Corporation Code? a. Allan sold the car to Magtanggol. Allan failed to pay four (4) installments. 98. b. No.

c. e. c. The following are the outstanding characteristics of an insurance contract EXCEPT: a. None of the above 100. d. b. It is a contract of indemnity It is a risk distributing device All of the above None of the above . It is an aleatory contract. It is a rule that determines the nationality of the corporation on the basis of the nationality of its officers and directors. d. All of the above e.

A 58. D 2. C 53. B 12. D 61. C 65. D 75. B 81. C 11. C 18. C 85. A 48. D 88. D 45. C 89. A 44. B 82. A 39. C 52. A 60. C 20. C 69. D 42. B 17. D 19. B 100. C 56. A 83. D 25. D 98. A 80. D 40. D 36. D 50. D 5. C 30. E . B 26. A 74.ANSWER KEY IN COMMERCIAL LAW 1. B 33. B 66. A 16. C 57. D 24. B 77. C 97. B 99. B 23. C 70. D 28. D 29. B 55. C 68. B 71. A 7. B 3. C 9. D 32. D 76. D 35. D 67. D 27. D 72. C 87. D 96. D 62. D 6. D 90. D 10. B 54. B 13. C 94. A 46. B 31. D 43. D 73. D 37. B 49. C 51. A 84. C 34. C 21. B 79. D 41. A 8. B 15. D 95. C 47. B 59. D 63. D 4. B 91. C 92. C 78. B 64. D 38. C 93. C 14. D 22. A 86.

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