at yee se ee The Professional CPA Review School Mai FC. Vlaroman Bldg 873 P. Campa St. or Espana, Sampaloc, Maria ‘B (G2) 735 6601 / 735 9034 / 0922 861 019% ‘email ad: c_ace@yahoo.com Basu Rude! dg. V, Lower Mabin cr Dlego Siang, Baguio Cty SJF-GCAM Blog. Monteverde St. Davao Cry ‘a (074) 442-1440 /0922-8499196 (082) 285-8005 / 0825-7 REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS MAY 2018 BATCH FINAL PRE-BOARD EXAMINATION SS EBSM EB APRIL 29, 2018; 7:00AM - 10:00AM INSTRUCTIONS: Select the corret'answer for each ofthe folowing questions. Mark only one answer for ‘each item by Shading the corresponding letter of your choice on the answer shee! provided. STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 ony. 4. X-borrewed money from a bank, secured by a mortgage on the land of Y, his close friend. When the loan matured, Y offered to pay the bank but it refused since Y was not the borrower. Is the bank's action correct? ‘A. No, since anybody can discharge X's obligation to his benefit. Yes, since it was X who has an obligation to the bank. © Yes, since X, the true borrower, did not give his consent to Y's offer to pay. . No, since Y, the owner ofthe collateral, has an interest in the payment of the obligation 2X maintains a savings deposit in the amount of Php't Millon with ABC Bank Corporation. X also has obtained a loan from ABC Bank Corporation in the amount of Ppt Million. In case'of default, ‘A. ABC Bank can set-off the loan from the savings account being maintained by X with ABC : Bank 8. _Set.off is not possible because legal compensation is not allowed in banking transaction C. Deposit accounts are usually earmarked for specific purpose hence offsetting isnot legally possible, D. _Off-setting s not possible because the obligation of.X isa "simple loan 3. Apromissory note states, on its face: A, promise to pay B the amount of P1,00,000.00 five days after completion ‘of the on- going construction of my house. Signed, A" Is the note negotiable? ‘A. Yes, since itis payable at a fixed period after the occurrence of a specified event. B No, since it is payable at a fixed period after the occurrence of an event which may not happen. . C.~Yes, since itis payable at a fixed period or determinable future time. 108 it should be payable at a fixed period before the occurrence of a specified event. 4. Which of the following is negotiable? ‘A. “Ipromise to pay ¥ or bearer P100,000 from my inheritance which I will get after the death of my father.” B. “I promise to pay Y or bearer P100,000 if X passes the 2018 bar exams.” C. “I promise to pay Y or bearer P100,000.0n or before December 30, 2018" D. “I promise to pay Y the bearer 100,000." 5, Anatural obligation under the New Civil Code of the Philippines is one which ‘A. The obligee may enforce through the court if violated by the obligor. B. Cannot be judicially enforced but authorizes the obligee to retain the obligor's payment or performance. ©The obligor has a moral obligation to do, otherwise entitling the obligee to damage: D. Refers to an obligation in writing to do or not to do. 6. Upon the proposal of a third person, a new debtor substituted the original debtor without the latter's consent, The creditor accepted the substitution. Later, however, the new debtor became insolvent ‘and defauited in his obligation, What is the effect of the new’ debtor's default upon the original debtor? ‘A. The original debtor is freed of lability since novation took place and this relieved him of his obligation, The original debtor remains liable since he gave no consent to the substitution. C. The orginal debtor shall pay or perform 50% of the obligation to avoid unjust enrichment on his part.'B RCACE/RFBT: FINAL PRE-BOARD EXAMS ~ (MAY 2018 BATCH) PAGE 3 18 16 7 18 19, 20. an ©. _D cannot sell the land if there is an agreement prohibiting the mortgagor from alienating the land D. Dan sell the land even without the consent of © |.__Any vacancy in the board of directors of a stock corporation, other than by expiration of term, any be filed by the vote of at least a majority of the remaining directors, if still constituting @ quorum; otherwise, the vacancy must be filléd by the stockholders entitled to vote, in pecial meeting called for the purpose. II. Any vacancy in the board of directors, other than by expiration of term, any be filed by the vote Cf at least a majority of the remaining directors, if still constituting a quorum; otherwise, the vacancy must be filled by the general assembly in a regular or special meeting called for the Purpose : A. Only lis true 8. Onlyilis true CC. Both are true ©. Both are false One ofthe following is void A. Policitation ©. Stipulation pour atrui BPactrumcommissorium D. Waiver intencionada Payment by cession 2s distinguished from dation in payment The debtor is not necessarily in a state of financial difficulty The effect is to release the debtor for the net proceeds of the things ceded or astigned ‘The property is alienated by the debtor fo the creditor in satisfaction of a debt in money What is delivered by the debtor is merely a thing to be considered as the equivalent of the performance of the obligation poor ‘A guarantor of credit warrants A” Solvency of the debtor B. Solidary liability © Assurance of payment D. Existence and legality of credit |. In case of foreclosure of the personal property mortgaged, where such thing was previously sold to the buyer on an installment basis and proceeds of the sale at public auction is less than the principal obligation, the deficiency cannot be recovered unless there is a stipulation to that effect Il. In case of foreclosure of the personal property mortgaged to secure a loan, and proceeds of the sale at public auction is less than the principal obligation, the deficiency cannot be recovered, unless there is a stipulation to that effect A. True, True C. False, True B. The, False D. False, False |. ifthe same thing should have been sold to diferent vendees, the ownership shall be transferred to the person who may ave first taken possession thereof in good faith Il, The vendee is responsible to the vendee for any hidden faults or defects in the thing sold even though he was not aware thereof. A True, True B True, False ©. False, True DB: False, False Rico owns'a parcel of land, which he sells to Butch with 5 years redemption period. After the second year, Rico dies leaving his children Aida, Loma and Fe as his heirs. Which of the following is not corract "A. Rico can repurchase the whole thing, 80 any among his heirs may repurchase of the whole thing B Butch may require al the heirs of Rico to redeem the whole property if they will exercise their legal redemption right C._Butch may demand that all the co-heits come to an agreement upon the repurchase of the whole thing sold5 CRCACE/RFBT: FINAL PRE-BOARD EXAMS ~ (MAY 2018 BATCH) PAGE 5 30 31 32 33, 36. ©. Articles of universal partnership; entered into without specifications of its nature, only constitutes a universal partnership of all present property. + statement — If X was a bookkeeper in a partnership named "XYZ’, with a yearly salary amounting to 5% of the net profits for each Year, but without any voice or vote at all in the management of the business, there is a disputable presumption that he is a partner. 2" statement ~ In the absence of stipulation, the share of each partner in the profits and losses. ‘shall be equal to each other. A. Istis correct, 2nd is wrong . Both statements are wrong, B, Istis wrong, 2nd is correct. . Both statements are correct. 'ABC Corp. increased its capital stocks from Php10 Million to Php15 Million and, in the process, issued 1,000 new shares divided into Common Shares "B" and Common Shares °C." T, a stockhélder owning 500 shares, insists on buying the newly issued shares through a right of pre- ‘emption. The company claims, however, that its By-laws deny T any right of pre-emption. Is the corporation correct? ‘A. No, since the By-Laws cannot deny a shareholder his right of pre-emption 8. Yes, but the denial of his pre-emptive right extends only to 500 shares, ©. Yes, since the denial of the right under the By-laws is binding pn T. ©. No, since pre-emptive rights cannot be denied. El Hombre Foundation, Inc., @ non-profit organization, scheduled an election for its sixmember Board of Trustees, X, Y and Z, who are minority members. of the foundation, wish to exercise cumulative voting in order to protect their interest, although the Foundation's Avticles and By-laws are silent on the matter. As to each of the three, what is the maximum number of votes that he/she can cast? Ab Be cz Db. T Corp. has a corporate term of 20 years under its Articles of Incorporation or from June 1, 1980 10 June 1, 2000. On June 1, 1991 it amended its Articles ef Incorporation to extend its lfe by 15 years from June 1, 1980 to June 1, 2015. The SEC approved this amendment. On June 1, 2011, however, T Corp decided to shorten its term by 1 year or until June 1, 2014. Both the 1991 ‘and 2011 amendments were approved by majority vote of its Board of Directors and ratified in a special ‘meeting by its stockholders representing at least 2/3 of its outstanding capital stock. The SEC, however, disapproved the 2011 amendment on the ground that it cannot be made earlier than 5 years rior to the expiration date of the corporate term, which is June 1, 2014, Is this SEC disapproval correct? ‘A No, since the 5-year rule on amendment of corporate term applies only to extension, not to shortening, of term. B. Yes, any amendment affecting corporate term cannot be made eartier than § years prior to the corporation's expiration date. ©. No, since a corporation can in fact have a corporate lfe of 50 years. D._ Yes, the amendment to shorten corporate tetm cannot be made earlier than 5 years prior to the corporation's expiration date. Which of the following expresses a correct principle of law? Choose the best answer. A. Failure to disclose facts when there is a duly to reveal them, does not constitute fraud, B. Violence or intimidation does not render a contract annuilable if employed not by a contracting party but by a third person. C. ‘A threat to enforce one’s claim through competent authority, if the claim is legal or just, does rot vitlate consent, . , Absolute simulation of a contract always results in a void contract. Facultative as distinguished from Alternative obligation i A. Ifitis impossible to give all except one, that last one must stil be given. B. The right to choose may be given either to debtor or creditor ©. Various things are due, but the giving of one is sufficient D. Ifthe principal obligation is void, there is no necessity of giving the substitute, ‘The receipt ofthe principal by the creditor, without reservation with respect to the interest, shall give rise to ‘A. conclusive presumption that the creditor is not paid as to the principal amount 'B. disputable presumption that said interest has been paid,