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BUSINESS LAW

QUEZ- AGENCY, PLEDGE AND MORTGAGE:


1. One know to be working for and behalf of the principal either because the latter represented him to be his agent
or the
people believe him to be acting on behalf of the principal is;
a. ostensible agent
c. special agent
b. implied agent
d. universal agent
2. Chattel mortgage as distinguished from pledge:
a. the excess over the amount due after foreclosure goes to the debtor
b. the sale of the object in an auction extinguishes the obligation
c. the delivery of personal property is necessary
d. the registration of the property in the Registry of Property is not necessary
3. The following are essential requisites common to pledge and mortgage except one:
a. they are constituted to secure the fulfillment of a principal obligation
b. the pledgor or mortgagor is the absolute owner of the thing pledged or mortgaged
c. the contract of pledge or mortgage is registered with the Register of deeds
d. the person constituting the pledge or mortgage has the free disposal of the thing or he is legally authorized
for the purpose
4. In all cases of extra judicial foreclosure, the right of redemption can be exercised by the mortgagor within one
year from and after the juridical registration of sale.
In judicial foreclosure, the mortgagor may still exercise his equity of redemption after the confirmation of the
sale
by the court
a. both statements are true
c. first is false, second is true
b. both are false
d. first is true, second is false
5. A pledged his Toyota car to B for a loan of P1M. A was unable to pay the loan and therefore B sold the car in a
public
auction but it was sold only for P.5M .Can recover the deficiency from A?
a. no he cannot recover the deficiency in the absence of contrary stipulation
b. no he cannot even if there is an agreement that he can
c. yes he can even in the absence of stipulation allowing him
d. yes he can provided it was agreed upon by the parties
6. If the agent contracts in the name of the principal and the principal does not ratify the contract, the contract shall
be void if the party with whom the agents contracts is aware of the limits of the agents authority
A third person cannot set up the fact that the agent exceeds his authority if the principal has ratified or has
signified his willingness to ratify the agents acts
a. both statements are true
c. first is false, second is true
b. both are false
d. second is false, first is true
7. A pledged his wristwatch to B pawnshop for a loan of 7,000 which he failed to pay. B sold the watch at public
auction for 4,000
a. the pawnshop b can recover the 4,000 deficiency from a
b. it cannot recover the deficiency from a unless there is stipulation to the contrary
c. it cannot recover the deficiency even if there is stipulation allowing it
d. it cannot recover the deficiency if there is stipulation disallowing it
8. The following instances of pledge created by operation of law except
a. hotelkeeper retains the things into the hotel by the guest who cannot pay his hotel bill
b. an agent retains in pledge the thing which is the object of the agency until he is paid his commission
c. a mechanic retains the car he repaired until he is paid
d. a depository retains the thing in pledge until full payment of what is due him
9. A pledged his wristwatch to B pawnshop for a loan of P.1M. Due to As failure to pay his debt, B auctioned the
watch
and
was sold to C for P1.5M. Can A recover the excess?
a. a cannot recover the excess even if so stipulated by the parties
b. a can recover the excess if so agreed upon by the parties
c. a can recover the excess even if not so stipulated
d. a stipulation allowing the excess to go to the pledgor is void
10. In pledged created by operation of law, after payment of the dent and expenses, the remainder of the price of
the
sale in auction shall be delivered to the obligor, pledgor being entitled to the excess
If a credit which has been pledged becomes due before it is redeemed, the pledgee may collect and receive the
amount
due and apply the same to the payment of his claim with the excess going to the pledgor
a. both statements are true
c. first is false, second is true
b. both are false

11. This is a mode of extinguishing an agency


a. death of the principal, but agency is for the interest of the principal and agent
b. partial accomplishment of the agency
c. upon with the withdrawal of the principal
d. insanity of the principal or agent
12. P appointed A to sell Ps car for P1M cash. A said the same in installment but in her named. After delivery, the
delivery buyer discovered a hidden defect in the car which sold as brand new. Is P liable to the buyer even if A
acted
without
to sell on credit and in her name and not in the name of P?
a. no under caveat emptor or let the buyer beware
b. no because a acted in her name as if she was the owner of the car
c. yes because the contract involves a thing belonging to the principal P.
d. no because there was stipulation on the warranty against hidden defect
13. P authorized A to sell his car for P1M with 5% commission. A sold the car to B for P1.5M. For how much is A
accountable to P?
a. P1M
b. P1.5M
c. P9.5M
d. 1.25M
14. A pledge his Rolex watch to B for a loan of P.2M. Due to the failure of A to redeem the security, B sold the same
at
public
auction for P1.5M to the highest bidder.
a. b can recover the deficiency of P.05M From A
b. b can recover the deficiency from A if so stipulated
c. b can recover the deficiency if there is no contrary agreement
d. b cannot recover the deficiency even if there is stipulation
15. The difference between a chattel mortgage and pledge is that in chattel mortgage:
a. the delivery of the personal property is necessary
b. the registration of the contract with the Register of Deeds needed
c. the excess over amount due after foreclosure sale goes to debtor
d. the debtor is not liable for the deficiency after foreclosure
16. P appointed A to manage his business before leaving abroad .While abroad A wrote P that he was withdrawing
from the agency due to heath reasons and that he appointed B as his substitute and that P should extend an
appointment
to
B.
B took over the administration but P did not make the necessary appointment from the latter. Decide the kind of
agency
a. implied agency
c. express agency
b. Agency by necessity
d. agency by estoppel
17. P authorized A to sell his car for P1M with 10% commission. A sold the same on reset for P1.1M. If P does not
ratify this sale on credit, he can collect from A:
a. P9M (P1M less 10% commission)
b. P1M, commission not deducted by A
c. P1.1M commission not deducted by A
d. P1M with no commission to A for his violation of contract
18. An agent may appoint a substitute or sub-agent only if there is a stimulation allowing him to do so.
The acts of the substitute appointed against the prohibition of the principal are voidable which the latter may
ratify.
a. First statements is false, second is true,
c. Both statements are false.
b. First statement is true, second is false
d. Both are true.
19. The agent is responsible for the acts of a substitute which he appoints in the following instances. Which is not
include?
a. When he was not given the power to appoint one;
b. When he was prohibited from appointing one;
c. When he was given the power to appoint one, but without designating the person, and he appointed
incomplete
one in good faith;
d. When the principal designated the person to be appointed;
20. X borrowed money from Y and gave a piece of land as security by way of mortgage. It was agreed between the
parties
that upon non-payment of the loan, the land would already belong to Y. If X failed to pay the debt, would Y now
become the
owner of the land.
a. Y would become the owner it was agreed upon by them base on the principle of autonomy of contracts.
b. Y would not become the owner because the agreement that he would become the owner upon default of X is
against
the law.
c. Y would not become owner if X annuls the voidable agreement.
d. Y would not become owner if X annuls the voidable agreement.

22. The death of either the principal or agent extinguishes the agency. Therefore:
A. If the principal dies, in certain cases, the agency remains in full force and effect.
B. If it is the agent whos dies, the agency shall always be extinguished.
a. Both are true statements
b. Both are false

c. First is true, second is false


d. First is false, second is true.

23. A special agency requires a special power of attorney.


An agent may withdraw from the agency but may be liable for damages, if the principal is prejudiced.
a. Both are statement are false.
c. First is true, second is false.
b. Both are true.
d. First is false, second is true.
24. In the province, a farmer couple borrowed money from the local merchant. To guarantee payment, they
left the Torrens Title of the land with the merchant, for him to hold until they pay the loan. It is:
a. Pledge
c. Real mortgage
b. Mortgage of chattel
d. None of the above
25. A constructed a building on a parcel of the land ha lease from B. He chattel the building to C. The building
is concrete.
a. No chattel mortgage because the building is real property.
b. There is chattel mortgage as agreed upon by the parties.
c. No chattel mortgage unless it is registered with the Registry of Deed.
d. No chattel mortgage because the building can never be considered movable despite agreement of parties.
26. P appointed A the exclusive agent in the sale of lots in its subdivision. P told A that he could not collect or
receive payments from the buyers. A was able to sell a lot to C and receive the payment of the latter which
he was misappropriated. Who shall bear the loss?
a. P shall bear the loss because his order to A was not written in the power of attorney of A.
b. P shall be liable for the loss even if c was aware of the limits of authority of A.
c. C shall be liable for the loss for his failure to inquire into the limits of authority of A.
d. C is shall for the loss even through the instruction of P was oral.
27. In 1982, D borrowed P.4M from C, collateralized by a pledge of shares of stock of X corporation worth P.8M
In 1983, because of the economic crisis, the value of the shares pledged fell to only P.1M. Can C demand
that D surrenders the other shares worth P.7M?
a. Yes, because the collateral as security for the loan was worth P.8M and therefore the other shares of P.7M
must be delivered.
b. No, because the only right of C is to sell the shares at the public auction and the proceeds as security for
the loan.
c. No, because the right of C is to demand immediate payment of the loan.
d. No, because the right of C is to demand thing worth P.8M.
28. P as principal appointed A as his agent granting him general and unlimited management over Ps properties,
starting that P withholds no power from B and the latter may execute such acts a he may deem appropriate
to carry-out agency. According, A lease Ps parcel of land in Manila to C for four years. A also sold to D another
parcel of land for three times the price that was listed in the inventory by P to A. Which is valid?
a. The first (lease) contract is valid while the second (sale) is not.
b. Both are valid and binding on p.
c. Both are not valid and binding on P.
d. The first is not valid while the second is valid and binding on P.
29. P authorized A in a special power of attorney to sell his parcel of land. A sold the land to C without having
knowledge that prior to sale to C, P had already been dead for a week. C also was not aware of the
extinguishment
of the agency by the principals death. Decide;
a. The sale is valid although the principal has died before the contract was entered into by the agent in the name
of the principal.
b. The sale is valid but annullable by the heirs of the principal because the death of principal has extinguished
the
agency.
c. The sale is void because the agent had no more authority to sell the land due to the principal death.
d. The sale is valid but unenforceable because of the agent acting without authority from his principal who has
died.
30. C lent to D P.1M. As security for the loan, D pledged his Rolex watch. When D failed to pay the loan, C foreclose
the
pledge and the watch were sold only for P.08M. May C still claim payment of the deficiency from D?
a. D is longer liable for the deficiency unless otherwise agreed.
b. D is not liable for the deficiency despite stipulation to the contrary.
c. D is still not liable for the deficiency even in the absence of agreement.
d. D is still liable if agreed upon.
31. In the preceding case, suppose it was a contract of mortgage, can still claim payment of the deficiency?
a. Yes, provided it was agreed upon.
c. Yes, even in the absence of stipulation.
b. No, unless there was stipulation.
d. No, even if stipulated.

32. Still in the preceding case, suppose the watch was sold at a price greater than the amount of loan, who is
entitled
to the excess?
If pledge:
a. C is entitled to the excess even in the absence of stipulation.
b. C is entitled if there is stipulation.
c. D is entitled even if there is no stipulation.
d. D is not entitled even if there is no stipulation.
33. If chattel mortgage.
a. C is entitled to the excess to the unless there is a contrary stipulation.
b. D is entitled if so stipulated.
c. C is entitle even in the absence of stipulation.
d. D is entitled even if not stipulated.
34. A constituted in 1999 a real estate mortgage on his land and chattel mortgage on his car to secure the payment
of a debt of P.2m which he then owed to B. as other loans he may receive from him in the future. A paid his
debt of P.2M but not the loan of P.03M which he obtained in 2000. Can A foreclose both mortgages for the
P.03M?
loan obtained in 2000?
a. No, because the mortgagee can only foreclose one of the mortgages applying the Recto Law to prevent
collection
of deficiency.
b. No, only the mortgage on car can be foreclosed.
c. No, only the mortgage on the land can be foreclosed.
d. Yes, both mortgages.
35. P authorized A to sell her land with a 6% commission. A found a buyer C who was willing to buy the land. When
A introduced C to P, told A that she was no longer interested in selling the land and a document was signed
cancelling
the written authority to sell with the agreement of A. One month later, P sold the same land to C. P refuse to pay
A his
commission contending that when the land was sold to C, As authority to sell was already cancelled. Is A
entitled to
his commission?
a. No, because the sale was made no more agency between him and P at the time of the sale.
b. No, because the sale was made directly by P to C.
c. Yes, because P was in bad faith when he cancelled the authority of A to sell his land.
d. Yes, because the agency was coupled with the interest of both P and A and therefore is not revocable at will of
P
36. If an agent acted beyond the scope of his authority in the name of the principal, the contract is.
a. Void
b. Unenforceable
c. Rescissible
d. Voidable
37. If an agent acted in excess of authority in the name of the principal who does not ratify the contract and the
third
person has knowledge of the excess of the authority, the contract is:
a.Rescissible
b. Voidable
c. unenforceable
d. Void
38. If an agent acted within the scope of his authority but in his own name, the contract is:
a. Valid
b. Voidable
c. Void
Unenforceable

d.

39. If both principal and agent sold the land of the principal to two buyers, which of the latter shall be owner.
a. First registrant in good faith.
c. Oldest title in good faith
b. First possessor in good faith.
d. Prior date contract.
40. Without authority from P, A sold Ps car in As name .Contract is:
a. Void
b. Voidable
c. Valid

d. Unenforceable

41. P appointed A, a minor, as his agent to contract with B. A in the name of P into the contract with B. The agency
is:
a. Void
b. Unenforceable
c. Voidable
d. Unenforceable
42. In the preceding number, suppose it is the principal who is minor, the contract with the third person B shall be:
a. Void
b. Unenforceable
c. Valid
d. Voidable
43. P authorized A to sell his Rolex watch for P1M. A sold it for P.9M only. Which of the following statements is
incorrect?
a. the sale is void
b. the principal is not bound in the contract of sale with the buyer
c. a is liable to P for damages for not following his instruction
d. the sale is valid
44. D mortgaged his land to C with the stipulation that the former cannot sell his land before he has paid his loan to
C
D sold the land to X despite such agreement .Which of the following is correct?
a. the contract of sale is void
b. the consent of c is necessary before d can sell the land
c. the sale stipulation prohibiting sale of the land is void
d. the sale is valid if the buyer was not aware of the mortgage
45. D obtained a loan from C. X pledged his car as security .Which of the following is not correct?

a. the pledge is valid because the debtor is not the owner of the thing pledged.
b. the pledgor must be the owner of the thing pledged
c. the thing pledged must be delivered to the pledgee or a third person by a common consent of the parties
d. the pledgee does not become owner of the thing pledged upon the non-payment of the debt.
46. D pledged his bicycle to C as security for a loan with the agreement that D shall remain in possession of the said
bicycle until the loan is paid. The contract is one of:
a. pledge
b. real mortgage

c. chattel mortgage
d. loan only

47. P authorized A by mere telephone call to sell the formers house. A sold the same in public instrument. The sale
is:
a. the sale is void because the agents authority
b. it is only unenforceable unless rarified by P
c. valid, despite the authority being verbal
d. voidable because the house cannot be sold without including the land

48. P authorized A to sell on credit his car for P1M. A sold it for P1.5M. There was stipulated 10% commission. A is
accountable for:
a. P1M
c. P.9M (P1M less 10% commission)
b. P1.5M
d. P1.35 (P1.5M less 10% commission)
49. P authorized A to sell in cash for P1M. A sold on credit for P1.5M. A is liable for:
a. P1M
b. P1.5M
c. P1.5M only after he has collected from the buyer his payment
d. P1M plus damages for not following the principals instruction
50. P authorized A to sell on credit for P1M his car. A sold it for P1.5M also on credit. A is accountable for:
a. P1M on principals demand
c. P1M after he has collected from the buyer
b. P1.5M right after the sale
d. P1.5M after he has collected from the buyer
51. P authorized A, B, and C to sell his car with the agreement that the latter shall be solidarily liable. However,
after
delivery of the car to them, it was lost through the fault of A only. P can claim damages from:
a. only from a because he exceeded his authority when the car was lost
b. only from a because he was the only one at fault
c. b and c because they are also liable for the fault of a
d. a,b, and c because of their solidary liability
52. D constituted a chattel mortgage on his car as security for the loan he obtained from C of P1M.It was further
stipulated
that the same mortgage shall secure the payment of another loan which the debtor D may incur in the future. Is the
chattel
mortgage valid?
a. the chattel mortgage for both loans is valid
b. the mortgage for the P1M is the only valid
c. the mortgage regards the future loan is the one valid
d. the mortgaged is extinguished because of the void stipulation on the ground that it cannot secure a future
obligation
53.P authorized A and B to sell his room air conditioner .Through the negligence of A, the thing was stolen when the
latter
left it unattended in his shop .Who is liable to P for the damages?
a. only a is liable because he was the one at fault despite their solidary liability having been appointed
simultaneously
b. both of them are liable and b shall be reimbursed by a for his payment to p
c. either of them is liable at ps option
d. only a is liable because of their joint liability to p
54. P and M appointed A to sell the land they own in common with the stipulation that A will advance the necessary
funds to execute the agency. Who is liable to A for reimbursement of all the funds?
a. p and m will share equally and therefore a may demand one-half from either
b. either or both shall be liable from the entire amount
c. neither shall be liable since it was stipulated that a shall advance the funds to execute the agency
d. p and m shall not be liable because the expenses were incurred as a consequence of the performance of the
agents obligation
55. In conventional pledge, there is no deficiency liability on the part of the pledgor inspite of the stipulation to the
contrary
In legal pledge, the excess of the proceeds of the sale after foreclosure shall pertain to the pledgor even in the
absence of stipulation
a. both statements are true
c. first is false, second is true
b. both are true
d. first is true, second is false
56. An agency couched in general terms comprises:
a. acts of ownership
b. acts of management

c. acts of strict dominion


d. both acts of administration and ownership

57. A special agency requires a special power of attorney from the principal
A general agency comprises acts of management or administration
a. both statements are true
c. first is false, second is true
b. both are true
d. first is true, second is false
58. When two or more principals appoint an agent for a common transaction, neither may revoke the power without
the consent of the other
If the principal fails to pay the agent his commission, the latter may retain pledge the things belonging to the
principal
a. first is false, second is true
c. both are false
b. first is true, second is false
d. both are true
59. A is indebted to B for the purchase of a car .But A in the meantime has no money .So she appoints B as her
agent
to collect from C some money which C owns her (A). which money in turn will be applied to the purchase price
of
the
car.
a. a cannot revoke the agency at will because it is for the interest of C, a third person
b. a cannot revoke the agency at will because he cannot be compelled to do something against her will
c. a cannot revoke the agency at will because it is a means of fulfilling an obligation already contracted
d. a can revoke the agency at will provided P agrees

60. P wanted to make his surety so P mad e A as his agent as a sort of the inducement to safeguard him from
eventual loss.
The agency is not revocable at will because:
a. bilateral contract an obligation already contracted
b. it is a means of fulfilling an obligation already contracted
c. it is for the common interest of the principal and agent
d. it is for the interest of a third person who accepted the stipulation in his favor
61. A borrows from B and as security entrust to B a ring, which B can sell if A fails to pay debt at the time of
maturity
a. the agency of b extinguished upon the death of a
b. upon the death of a, his heir shall become the principal of b
c. the agency will remain despite the death of a because it is for the common interest of a and b
d. the agency will remain upon the death of a because it is for the interest of b
62. P sells his land and appoints A his agent in paying with the purchase what P owes C, a third person
a. the agency remains even after the death of p because it is for the common interest of p and a
b. the agency of a shall be extinguished upon the death of p
c. the agency of a remains even after the death of p it is for the interest of third person C.
d. the extinguishments of agency upon the death of p depends upon as will
63. The agent may retain in pledge the things, which are the object of agency until the principal reimburse him for
advances
provided the business in successful
a. both statements are false
c. first is false, second is true
b. both are true
d. second is false, first is true
64. A brother wrote his sister to sell his parcels of land. The land was purchased by a third person, but the sister did
not
forward the money. The brother now wants to recover the parcels of land.
a. the brother may still recover the lands because the sale is unenforceable
b. the buyer shall be liable to the brother for the purchase price because the sister failed to forward it to her
brother
c. the sale is void because the authority of the sisters is not in public instrument
d. the sale is enforceable because the letter of the brother is sufficient authority to sell.
65. In case the both principal and agent contracted with different persons as regards the same thing and one of the
contracts
shall therefore be rejected, the one liable for damages to the third person shall be:
a. the principal because he should not have entered into the contract since he already has an agent.
b. the agent because in case of conflict of interest, the principals interest prevails
c. the principal because he is really the one entering into the contract not the agent
d. the agent if he acted in bad faith otherwise it is principal
66. A contract whereby a person binds himself to render some service or to do something in representation or in
behalf
of another, with the consent and authority of the latter is known as:
a. contract of lease of service
c. contract for a piece of work
b. contract of agency
d. contract of agency to sell
67. A contract of agency has the following characteristics except that it is not:
a. a consensual contract
c. a nominate contract
b. an accessory contract
d. a bilateral contract
68. P, 25years old, appointed A, 17 years old, as his agent to sell certain goods for 20,000.00.Thereafter, A sold the
goods to B for the said amount .P however, learned that the price of the goods had increased to 22,000.00 so
he
sought to disaffirm the sale made by A to B and brought an action to recover the goods from B on the ground
that
As
act was voidable, A being a minor, and hence, could not be an agent. Decide
a. the sale is valid because the principal is capable
b. the sale is void because a is a minor and therefore, cannot be an agent
c. the sale is voidable because a is a minor
d. the sale is unenforceable because a exceed his authority
69.P appointed A as manager of his coconut plantation .After managing the plantation for 4 years , A informed P
that
on
accounting of failing health, he was turning over the administration of the plantation to B, an experienced
coconut
plantation administrator. P neither repudiated the designation of B nor appointed a new agent. He also remained
silent
for 5 years, all the while allowing B to manage the plantation .Is B an agent of P?
a. no because p himself did not give a general power of attorney to b
b. no because the designation of b as manager by a was without ps authority
c. yes because an agent of p because if ps failure to repudiate the agency
d. yes because b was highly qualified to administer the plantation
70. Which of the following acts may not be delegated by a principal to his agent?
a. vote during the meeting of stockholders of a corporation where the principal is a stockholder
b. attend meetings off the board of directors of delegated of a corporation where the principal is a stockholder
c. vote the shares of stock because of voting trust agreement
d. represents the principal as proxy in voting the shares.
71. Which of the following acts requires a special power of attorney?

a. to make gifts to employees in the business managed by agent


b.to borrow money which is urgently needed to preserve the property of the principal under the administration
of the agent
c. to make payments for purchases in the ordinary course of the business
d. to lease the real property of the principal to another person for more person for more than one year

72. Which of the following acts requires only a general power of attorney?
a. to bind the principal in a contract of partnership
b. to loan money of the principal
c. to enter into a contract by which the ownership of an immovable is transmitted or acquired gratuitously
or for a valuable consideration
d. to make such payments as are usually considered acts of administration
73. P who was abroad learned that F was interested in buying his lot located in Quezon City. To take advantage of
the
opportunity, he made an overseas call to A. who was in Manila, to sell that the lot in his behalf to F for P1M. A
thus
sold the lot promptly to F. The contract of the sale is in public instrument which was signed by A in behalf of P
as
seller, and F as buyer. The said contract of sale is:
a. valid because it is in public instrument and a was duly authorized to represent p
b. void because the authority of a was not in the form required by law
c. unenforceable because p did not sign the contract of sale and so he had no consent thereto.
d. rescissible because the contract was entered into a representation of an absentee
74. P the owner of a certain car, wanted to sell the car .A learned that P was selling the car. Without the authority of
P,
A sold the car in his name (As) name to B. W hat is the status of the sale of the car?
a. valid between a and but a must be able to transfer the ownership of the car to B at the time of delivery
b. unenforceable against p because he did not authorize a to sell the car
c. void because a was not the owner of the car at the time of sale
d. voidable because the sale was without the consent of p
75. F published in the Manila Bulletin that it was appointing as its duly authorized agent for the sale of its
poroducts.With
the authority, A sold flour to various bakeshops. After three years, F revoked As authority by giving a notice of
revocation
to A and publishing a notice of revocation in the Philippine Star. Despite the revocation, A still sold 50bags of
flour to S
who did not read the notice of revocation of As authority in the Philippine Star.S now wants to have she had
ordered
delivered but F seeks to set aside the sale of 50 bags of flour to S.
a. f is not obliged to deliver 50 bags of flour because is s deemed to have known of the revocation of As
authority
b. f is obliged to deliver 50 bags of flour because s did not read the revocation of as authority
c. f is obliged to deliver 50 bags of flour because the revocation was published in another newspaper
d. f is not obliged to deliver 50 bags of flour because the notice of revocation to a is sufficient
76. P which is based in Manila sent a letter with a special power of attorney, to A, an agent dealing with appliances,
in
the
latters office in Cebu, appointing A as the agent of P to sell its new appliances. The letter, which was sent
through
LBC
Courier Services, was duly received b y A who, however, did not respond to the letter. Based on the foregoing
data:
a. an agency was created between p and a by the implied acceptance of A the agency
b. no agency was created between p and a because a did not respond to the letter
c. an agency was created by the ratification of a when he duly received the letter with a special power of
attorney
d. no agency was created because of the inaction of a.
77. P a singer authorized A also a singer to look for a night club where P could sing. A presented herself not P as a
singer
to the X Club which engaged her services to sing nightly for two months. Based on the foregoing information,
which
of the following statements is correct?
a. p has a right of action against x club
b. x has a right of action against p
c. the contract is between a and x club and it is valid
d. the contract is between a and x club is void because p was not a party thereto.
78. P an authorized car dealers appointed A as its agent to sell its cars. The authority of A includes the giving of a
discount of 20,000.00 to customers who pay in cash. One day, C, a customer, went to the companys car center
and told
and told A that she wanted to buy a car with a sale price of 600,000.00. However, as she only had 550,000.00
she
told
A that she would take the car if A agreed to a discount of 50,000.00. A agreed and sold the car to C at
550,000.00
in
behalf of the corporation. What is the status of the sale made by A to C?
a. voidable at the instance of p because it did not to give its consent to the sale at the discount of 50,000.00
b. unenforceable against p, the principal, because a acted beyond the scope of the authority

c. void because the additional discount of 30,000.00 given by a was not authorized by p
d. rescissible, because p suffered damage of 30,000.00
79. P gave A a special power of attorney wherein it was written that A was being authorized to sell the two cars of P.
However, P and A had an understanding that A should sell only one of the cars .A sold the two cars to B who
was not
aware of the instruction given by P to A.
a. p is bound by the sale of only one car in accordance with his understanding with a
b. p is bound by the sale of only two cars because that is what is contained in the special power of attorney
c. p is not bound at all by the sale of either one or both cars because a violated the instructions given by p
d. p will be bound by the sale of one or both cars at his option

80. P gave a power of attorney to A for the sale of his 2 cars, a Toyota and a Lancer .Their agreement included
among other
provisions, the following: (1) A shall be entitled to a commission of 10% based on the actual selling price of the
cars
which P fixed at a minimum of P.4M for Toyota; and P.5M for the Lancer; and (2) A need not render P any
accounting
of his transactions as long as A turns over the actual selling price of the cars net of the commission of 10%.A
was liable
to sell the Toyota to T for P.410M and the Lancer for P.5M to L who gave A a tip of 20,000.00.After the sales, P
demanded
from A an accounting of the transactions that he had made but A refused claiming that it was enough that he
turns over
the net selling price of P.810M (.9m less 10% as commission).Decide.
a. a must not render an accounting to p as agreed upon
b. a must account and deliver to P only the sum of P.9M
c. a must account and deliver to P only the sum of P.910M
d. a must account and deliver to P only the sum of P.930M
81. If the agent is incapacitated, the contract of agency is voidable as well as the contract entered into by him in
behalf of the
principal.
If it were the principal who is incapacitated, the contract of agency is voidable as well as the contract are
voidable.
a. both statements are false
c. only the first statement is true
b. both are true
d. only the fist is false
82. The principal is not liable for the expenses incurred by the agent in the following, except:
a. when although the agent acted in contravention of the principals instructions, the principal avails himself of
the
benefits derived from the contract
b. when it was stipulated that the agent would be allowed only a certain sum
c. when the agent incurred them with the knowledge that an unfavorable result would ensue the principal was
not aware
thereof
d. when the expenses were due to the fault of the agent.
83. When two persons contract with regard to the same immovable thing, one of them with the agent, and the
other with the
principal, and the contracts are incompatible with other, ownership shall be transferred to.
a. the first purchaser in good faith
b. the first who completed the payment of the price in good faith
c. the first who will register in good faith the transaction
d. the one who presents the oldest title who must be in good faith
84. An agency in impliedly revoked in three of the following causes. which is the exception?
a. when a new agent is appointed for the same business or transaction
b. when the principal direct manages the business entrusted to the agent, dealing directly with third person
c. when a special power of attorney is granted to another agent pertaining to a special matter involved in
general power
of attorney issued to a previous agent
d. when desire of the principal is help the agent manage the business
85. P appointed A as his agent to sell a set of bakery equipment for P 50,000.00 with an ordinary commission of
10% and a
guarantee commission of 15%. A is authorized to sell on credit. A was able to sell, in behalf of P, the bakery
equipment for
P50, 000.00 N who issued a check dated ten days after the sale. On the tenth say, however, the check was
dishonored by
the bank because Nicole did not have sufficient funds for it.
a. A is liable to P because she must bear the risk of collection
b. A is not liable to P because the dishonor of the check was without As fault
c. A is not liable to P because she is not the purchaser of N
d.A is liable to P because she acted beyond the scope of her authority
86. P appointed A as her agent .The authority of A did not authorize A to appoint a substitute but it did not also
prohibit
him from appointing one. In this case:
a. a may appoint a substitute because he is not prohibited from doing so in his authority but he shall be liable for
for the acts of the substitute
b. a may not appoint a substitute because there is no express provision in his appointment from p allowing him
to
appoint one.
c. a may appoint a substitute but he shall be liable for the acts of the substitute only when the substitute is
notoriously
incompetent or insolvent
d. a may appoint a substitute only when the substitute is designated in the authority given by the p to a
87. The following cases were presented to you for evaluation:
i A bilateral contract depends upon the agency
ii The agency means of fulfilling an obligation previously contracted
iii. The agency is one where the partner from the management is unjustifiable
In which of the above cases is the principal not allowed to revoke the agency?
a. I and II
b. II and III
c. I and III

d. I,II and III

88. The following are modes of extinguishing an agency except:


a. death, civil interdiction, insanity or insolvency of the principal agent
b. accomplishment of the purpose of the agency
c. expiration of the period for which the agency was constituted
d. continued losses on the part of the principal or agent

89. X,Y and Z , co-owners of a house and lot , appointed A to sell the house and a lot at a price of not less
1,5000,000.00
cash
with A being entitled to a commission of 10% of the selling price .A was able to sell the house for 1,800,00.00.A
cash
a. 150,000.00
b. 180,000.00
c. 60,000.00
d. 50,000.00
90. R,S and T, each one owning a separate lot, appointed A to sell their lots in one instrument.Under the agreement
A
will receive a commission of 10% of the selling price of eah lot. A was able to sell the lot of R 100,000.00; the lot
of
S for 200,000.00 ; and the lot of T for 300,000.00.How much commission may A collect from R?
a. 60,000.00
b. 10,000.00
c. 20,000.00
d. 30,000.00
91. This is an agency that comprises one or more specific transactions of the principal
a. special agency
c. agency couched in general terms
b. general agency
d. agency couched in specific terms
92. P owner of a certain car,authorized A to sell the car for 100,000.00 cash. A,however sold the car in the name of
P
for
11,000.00 but on credit .B, the buyer , knew at the time of the transaction that As authority was to sell the car
of P
on cash basis.The contract entered into by A is:
a. void because b was aware of as limit of authority .in this case , a is not liable because he did not undertake
to get ps ratification.
b. valid because the transaction, although it was for credit , was more advantages to p. accordingly , p will be
liable
c. unenforceable against p because a acted in excess of his authority .thus, a alone will be liable.
d. rescissible because p will suffer damage if the sales price is not paid by b.
93. Pentinio appointed Anzures as commission agent to sell Pentinios goods for 10,000.00 cash. Anzures , however,
sold
the goods on credit for 11,000.00 without Penitinios consent. Based on the foregoing facts, which of the
following
options are available to Penitinio?
i. Pentinio may demand immediate payment in 11,000.00 cash
ii. Pentinio may demand immedaite in 10,000.00 cash.However, Anzures shall be entitled to keep the
excess
of 1,000.00 when he collects the price of 11,000.00
iii. Pentinio mat ratify the sale on credit for 11,000.00 and wait for the amount to be collected
a. either I and III
b. either II and III
c. either I and II
d. I only
94. P leads B to believe that A is his(Ps) agent.However, A is not really the agent of P.Later, B transacted with A
believing
that A agent of P. What kind of agency was created here?
a. agency by ratification
c. agency by estoppel
b. agency by appointment
d. agency by necessity
95. Consider the following statements
i. An agency may be constituted in the common interest of the principal and the agent
ii. An agency may be constituted in the interest of a third person who has accepted the stipulilation in his
favor
The death of the Principal extinguishes with the agency, as a note.However, the death of the principal does not
extinguish
and agency if the reason why the agency was created is:
a. reason I only
c. either reason I or reason II
B. reason II only
d. neither reson I nor reason II
96. An agent who contracts in the name of the principal is not liable in one of the following cases.Which is it?
a. if the agent expressly bound himself
b. if the agent acted beyond limits of his authority without giving the party he contracted with sufficient notice
of his powers
c. if the other party knew that the agent exceeded his authority and the agent undertook to secure the
principals
ratification but the principal did not ratify the contract
d. if the other party knew that the agent acted in excess of his authority but the agent did not undertake to
secure
the principals ratification

97. A, a duly authorized agent of P , wrote a letter to X on which March 1,2006 offering to sell Ps car for
200,000.00 cash.On March 3,2006 , X worte a letter to A statinh that he accepted all the terms of the offer,
which
letter
was received by A on March 6,2006 on March 5,2006.Before A could relay such acceptance to P, P died in a
vehicular
accident on March 6,2006
a. the contract was not perfected because p , the real party to the sale , died before the acceptance came to his
knowledge
b. the contract was perfected on march 1,2006
c. the contract was perfected on march 3,2006
d. the contract was perfected on march 5,2006
98. P published the appointment of A as Ps agent in the Manila Bulletin.For 5 years,A, as Ps agent , dealt with the
public
including X, On March 1,2006, P revoked As authority by giving the lattera noticeof revocation .the revocation
was
published in the Philippine Star . A month later, X ,who was ignorant of the revocation , sold goods to A as P
agent
a. p is not obliged to pay for the goods because the publication of the revocation of A authority is sufficient
notice
b. p is obliged to pay for the goods since x was not aware of the revocation of as authority
c. p is obliged to pay for the goods because the revocation should have been published in the same newpaper
d. p is not obliged to pay for the goods because the notice of revocation to a is sufficient

99. P appointed A as his agentto sell the appliance products of P.The agreement between P and A provides
for the payment to A of 5% ordinary commission and a 10% guarnatee (del credere) commission. A sold
several
appliances to B for 20,000.00 the same thing being payable after 30 days .When A went to Bs place to
collectthe
price
of the appliances , B, together with the appliances that were sold , was nowhere to be found:
a. a is liable to p for the price of the appliances because a must bear the risk of collection
b. a is not liable top fo the price of the appliances because it was not his fault that B should dissapear
c. p must bear the risk of collection because this is the owner of the appliances
d. a is liable to p because a acted beyond the scope of the authority
100. An agent acting in the name of the principal shall not be liable to the third person with whom he contracts:
a. when he expressly binds himself
b. when he exceeds the limit of his authority without giving the third person sufficient notice of his powers
c.when the third person knew of the agents lack of authority and the agent undertook to get the principals
ratification
but failed to get the same
d. when the third person knew of the agents lack of authority but the agent did not undertake to get the
principals
ratification