301.

Negotiorum gestio is the management of affairs or property of another without the

latter’s consent whether express or implied and for his benefit.

True.

302. A person who receives in good faith a payment made erroneously by the payor shall
only answer for the thing and its accessories to the extent of his enrichment.

True.

303-306. Requisites of “solutio indebiti”.

303. There must be a payment or delivery made by one person to another;

304. The person who made the payment or delivery was under no obligation to do so;
305. The payment or delivery was made by reason of a mistake.

307. If the thing paid to the payee in good faith was thereafter alienated, the payee may
restore the price or assign the action to collect it.

True.

308. What is the doctrine of efficient procuring cause?

In describing a broker’s activity, refers to a cause originating a series of events which,

without break in their continuity, result in the accomplishment of the prime objective of the
employment of the broker—producing a purchaser ready, willing and able to buy on the
owner’s terms. To be regarded as the "procuring cause" of a sale as to be entitled to a
commission, a broker’s efforts must have been the foundation on which the negotiations
resulting in a sale began.

309. The payee in bad faith can demand reimbursement for necessary and useful expenses
with right to retention.

False. He can demand for necessary expenses but no right of retention.

310. What is agency by necessity?

It is an agency created by an emergency arising from a situation making it necessary or

proper for the agent to act without receiving the sanction or authorization of the principal,
in order to prevent harm to the principal. It arises when a duty is imposed on a person to act
on behalf of another apart from contract and to prevent irreparable injury. Such an agency
relationship is recognized by the courts.
311. A stranger who gives support has a right to claim from the one legally bound unless he
gave it out of piety and without intention of being repaid.

True.

312. When through an accident, a person was injured and is treated or helped by another
while not in a condition to give consent, he shall be liable to pay for the services rendered
him even when they were rendered on pure generosity.

False. Unless service rendered out of pure generosity.

313-316.Who are the parties in a contract of life annuity?

a. the annuity issuer

b. the owner
c. the annuitant and
d. the beneficiary.

317. Motive is material in negligence cases.

False. It is not an element of negligence.

318. An insane person is exempt from liability arising from a quasi-delict.

The insanity of a person does not excuse him or his guardian from liability based on quasi-
delict (Criminal excused, civil NOT).

319. A violation of a statutory duty does not constitute negligence.

False. It constitutes a violation if there is gross negligence.

320. Error of judgment on the part of a surgeon necessarily makes him liable for damages.

False. Not liable when there is a bona fide error of judgment.

321-324. Give 4 instances when the principal is not obliged to reimburse the expenses
incurred by the agent.

a. If the agent acted in contravention of the principal’s instructions, unless the latter
should wish to avail himself of the benefits derived from the contract;
b. When the expenses were due to the fault of the agent;
c. When the agent incurred them with knowledge that an unfavourable result would
 ensure, if the principal was not aware thereof;
d. When it was stipulated that the expenses would be borne by the agent, or that the
latter would be allowed only a certain sum.

325.Unlike in the case of fraud, a person may validly waive his right to recover damages
which may result from negligence, provided it is not gross.

True.

326-328. Explain the “emergency rule” in torts.

It is when due to the negligence of another, the accused was placed in an emergency and
compelled to act immediately to avoid an impending danger, and in so doing he injured
another, even if his choice of action was not the wisest under circumstances. This is similar
to the exempting circumstance of accident.

329. In an express trust, the action to compel the trustee to convey the property to the
beneficiary prescribes in 10 years.

False. It is imprescriptible.

330. An action based on an implied constructive trust prescribes in ten years from the time
of repudiation.

False. From the time the trust is created if the plaintiff is not in possession of the property.

331. The fact that the price in a pacto de retro sale is not the true value of the property
justifies the conclusion that the contract is one of equitable mortgage.

True.

332. A co-owner has the pre-emptive right to buy the shares of his co-owners.

True.

333. What must the lessee do if the lessor refuses to accept the rentals?

Tender of payment and consignation

334. A provision in a lease contract that it will subsist for as long as the lessee promptly pays
rent is void for being contrary to public order and public policy.
False. Not contrary to public order and public policy.

335. The extraordinary liability of the common carrier does not apply when the goods are
already stored in its warehouse because the rules on deposit would already apply.

False. Extraordinary liability still applies.

336-338. Enumerate the specific obligations of the agent in performing the agency with
exactness.

a. Duty obedience
b. Duty of diligence
c. Duty of loyalty

339.The liability of an industrial partner for outstanding partnership obligation is solidary.

False. In case of partnership obligation arising from contracts, the liability is joint and
subsidiary.

Resolution 1191 Rescission 1380

Valid and existing contracts Same
1 party to the contract Party suffering lesion or 3rd
demands party prejudiced demand
Non performance is a Equity grounds
ground
Court determines Sufficiency of reason does
sufficiency o reason to not affect right to ask for
justify extension of time to rescission
perform obligation
Reciprocal obligations Unilateral or reciprocal
Principal remedy Subsidiary remedy
340-344.Give five distinctions between rescission of contracts under Article 1380 and
rescission under Article 1191.

345. Extraordinary expenses on the occasion of the actual use by the bailee without fault
shall be borne by the bailor.

False. It is borne by the bailee.

346. If in a subsequent agreement a third person assumes payment of an obligation there is

already novation even if the old debtor was not released from responsibility.

False. No novation since the old debtor was not released from responsibility.

347-356.In a criminal case for homicide through reckless imprudence, upon arraignment,
defendant driver, D, pleaded guilty. The trial court rendered judgment convicting him and
sentencing him to pay the heirs of the deceased P12,000. Upon motion of the heirs of the
deceased, a writ of execution was issued against D, but was returned unsatisfied because of
the latter’s insolvency. Whereupon, a motion for the issuance of a subsidiary writ of
execution was filed against E, D’s employer. E now contends that since he is not impleaded
in the criminal case, the proper remedy in order to enforce the subsidiary liability of
employers under Art. 103 of the Revised Penal Code is to bring a separate civil action against
him. Is E correct? (2019 Jurado, p. 1265)

No. E is not correct. The subsidiary liability of the employer arises only after conviction of
the employee in the criminal case. The decision convicting the employee is binding and
conclusive upon the employer not only with regard to his subsidiary liability but also with
regard to the amount of the liability. Hence, the court has no other function than to render a
decision based upon the indemnity awarded in the criminal case and has no power to
amend or modify it even if in its opinion an error has been committed.

Consequently, the validity of any claim or defense of the employer can be litigated and
resolved in the same criminal case. The employer may adduce all the evidence necessary for
that purpose. Indeed, the enforcement of his subsidiary liability may be conveniently
litigated within the same proceeding because the execution of the judgment is a logical and
integral part of the case itself. This would certainly facilitate the application of justice to the
rival claims of the contending parties.

357-366.A parcel of land covered by a tax declaration has already been the subject of a
series of transfers until it was mortgaged to a bank by X who did not pay the obligation. The
bank foreclosed the mortgage. The bank’s ownership was later on consolidated; then, A and
B acquired it from the bank with a warranty against eviction but no warranty that its title
was perfectly valid. When A and B asked for a certification from the Bureau of Forest
Development, it was found out that the land was a timberland, hence, they asked for the
refund of their money. The bank contended that it was the absolute owner, having bought it
at an auction sale, and that there was no malice or fraud in its sale to A and B, hence it could
not be compelled to return the purchase price. Is the bank correct?

No. Under the Civil Code, Art. 1172 states that the degree of diligence required of an obligor
is that prescribed by law or contract, and absent such stipulation then the diligence of a
good father of a family. The fiduciary nature of banking requires banks to assume a degree
of diligence higher than that of a good father of a family. The bank should have exercised
the diligence required by not just relying to the documents of the mortgagor.

367. Where negligence is punishable under the Penal Code, the responsibility for quasi-
delict is distinct from the civil liability arising from the felony and may therefore be pursued
separately.

True.

368. A breach of contract may result from a quasi-delict.

True.

369-370. Define proximate cause.

Proximate cause has been defined as that which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces injury, and without which the result
would not have occurred.

371-372.What is the doctrine of contributory negligence?

Contributory negligence is negligence that is caused by both plaintiff and defendant. If the
plaintiff contributed to his injury, then, in some states, the plaintiff will be prevented from
collecting any damages.

373-374.Explain the doctrine of discovered peril.

Where both parties are negligent, but the negligent act of one is appreciably later in time
than that of the other, or when it is impossible to determine whose fault or negligence
should be attributed to the incident, the one who had the last clear opportunity to avoid the
impending harm and failed to do so is liable.

375. Under the doctrine of “supervening negligence”, the antecedent negligence of a

telephone company in not providing warning signs on its excavations would not make it
liable if the plaintiff had a clear chance to avoid the accident.

True.

376. The “volonti non fit injuria” rule does not apply if a person, aware of the possible
danger, takes some risks in order to preserve life.

True.

377-378.What is the doctrine of imputed negligence?

Obligation under 2176 is demandable not only for one's acts or omissions but also for those
of persons for whom one is responsible.

379. The burden of proof is the same in actions culpa contractual and culpa aquiliana.

False. Culpa aquiliana rests on plaintiff while Culpa contractual rests on the defendant to
present proof of contract and non-performance is sufficient

380-381.Explain the res ipsa loquitor rule.

The thing itself speaks. One is presumed to be negligent if he had exclusive control of
whatever caused the injury even though there is no specific evidence of an act of
negligence, and without negligence the accident would not have happened.

382. Philippine law also recognizes the “strict liability in torts” rule.

True

383. Liability may be created even if there is no fault or negligence.

True

384. If the driver and owner of a cargo truck which figured in a road mishap were found
liable for tort, their liability is solidary.

True

385. A subsidiary writ of execution may be issued against the employer of an accused even if
the former did not participate in the criminal proceedings.

True

386. Exceptionally, the crime of rape may be considered a quasi-delict.

False. Not considered as quasi-delict.

387-390. Requisites of quasi-delict.

a. Act or ommission
b. Damage is caused
c. Fault or negligence
d. No pre-existing contractual relation between parties

391. Culpa contractual and culpa aquiliana both give rise to an obligation to indemnify.
True.

392. As a general rule, quasi-delict covers all negligent or culpable acts or omissions whether
punished by law or not so long as they do not constitute breach of contract.

True.

393. Factors affecting negligence are circumstances of person, time, place and skills.

True.

394. A person may be held responsible for the acts and negligence of others under his
control and supervision as in injury caused by stray animals.

True.

395-399. Enumerate the persons responsible for the acts and negligence of others.

a. Parents
b. Guardians
c. School, administrators, teachers
d. Employers
e. State

400. The head of families that live in buildings or parts thereof shall be liable for damages
caused by things thrown or falling from the same and no proof of negligence is required to
hold them liable.

True.

401. Damages recoverable for quasi-delicts include damnum emergens and lucrum cessans.

True.

402. Fault must be the proximate and need to be the only cause for the damage in order to
recover indemnification.

False. Negligence/Contributory negligence/strict liability

403. Actual damages are reparation of pecuniary losses.

True.

404. Moral damages are reparation for non-pecuniary losses.

True.

405. Liquidated damages must be proved by the claimant.

False. No need for proof.

406. Exemplary damages are for deterring future violations.

True.

407. Fixing the amount of indemnity may only be by law or by the courts.

False. Agreement of parties as to liquidated damages.

408-409. What is the extent of compensatory damages?

a. Crimes and Quasi- Delicts

b. Breach of contract

410-412.Give the requisites for the recovery of actual damages.

a. Pleading and proof of loss

b. Proven with reasonable certainty
c. Fact of death, if death resulted

413. Equitable mitigation of damages may be decreed if loss would have resulted in any
event even if there was no breach by the defendant.

True.

414. No interest may be recovered on unliquidated claims or damages, except when the
demand can be established with reasonable certainty at the Court’s discretion.

True.

415-418.Enumerate the cases where attorney’s fees and costs of litigation may be
recovered.
 a. Exemplary damages are awarded
b. Malicious prosecution
c. Unfounded civil action or proceedings
d. Legal support

419-423.In what cases may an award for moral damages be made?

a. Malicious prosecution
b. Adultery or concubinage
c. Illegal search
d. Libel
e. Seduciton

424-426.Characteristics of liquidated damages.

a. agreed upon by parties

b. Equitably reduced if iniquitous or unconscionable
c. When breach is not the one stipulated, law will determine the measure of damages.

427. Liquidated damages are those damages agreed upon by the parties to a contract and
may not be equitably reduced.

False. May be reduced if iniquitous or unconscionable.

428. Exemplary damages cannot be awarded alone.

True.

429. The preference provided in article 2241 of the Civil Code can only be applied if there is
an insolvency proceeding.

True.

430. With reference to specific movable property, the claims of employees of the owner
now enjoy preference over taxes.

False. Real preference only with respect to taxes.

431. With respect to specific immovable property, only taxes enjoy absolute preference and
the other preferred credits must be paid pro rata.

True.
432-435.What are the 4 elements involved in medical negligence cases?

a. Duty
b. Breach
c. Injury
d. proximate causation

436. A partner may be both limited and general in one partnership.

True.

437-439.What are the elements of abuse of right?

a. there is a legal right or duty;

b. which is exercised in bad faith;
c. for the sole intent of prejudicing or injuring another.

440-442.In what instances are the partners solidarily liable with the partnership?

a. In case when a partnership obligation arises from a criminal offense;

b. In case when a partnership obligation arises from quasi-delict;
c. In case of a partnership obligation under the Workmen’s Compensation Act.

443-447.What are the requisites of agency by necessity?

a) It must be a situation that impossible for the agent to get the principal’s instruction.

b) The agent’s action is necessary

c) Agent of necessity has acted in good faith (Bona fide)

448. Extraordinary expenses on the occasion of the actual use by the bailee without fault
shall be borne by the bailor.

False. It is borne by the bailee.

449-458.X borrowed money from Y. As a surety for the payment of the obligation, Z
executed a real estate mortgage in favor of the creditor, Y. X failed to pay his obligation,
hence, Y demanded the payment of the obligation. As X failed to comply, Y foreclosed the
mortgage executed by Z, who moved for the nullification of the same contending that Y
should have resorted first to the properties of X before the foreclosure. Is Z’s action correct?
Why?
No. The remedies under the law are alternative. One of the remedies is rescission. In this
case, the seller chose rescission where he terminated the contract and repossessed the
property. Hence, he can no longer ask for the unpaid rentals from the lessor. Rescission
involves mutual restitution and no action can be maintained for enforcement of the
contract.

459-468.“O”, owner of a copying machine, leased it to “L” at a rental of P4,000.00 a month

for a period of one year with option on the part of “L” to buy the copying machine at the
end of one year for P80,000.00, to be paid by applying the rentals, so that “L” needs only to
pay P32,000.00. “L” failed to pay rentals for the 4th, 5th and 6th months so that “O”
terminated the lease and repossessed the copying machine, then sued “L” for the unpaid
rental of three months, or P12,000.00. Is “O’s” suit legally tenable? Explain.

O’s suit is legally untenable. Article 1485 of the New Civil Code provides that the Recto Law
(Art., 1484) applies to contracts purporting to be leases of personal property with option to
buy, when the lessor has deprived the lessee of the possession of enjoyment of the thing.
Under Art. 1484, the seller has three options in case of non-payment of the instalment, that
is, specific performance, rescission or foreclosure. In this case, the “O”, in effect availed of
the remedy of rescission. Hence, “O”, cannot recover the unpaid rentals because rescission
involves mutual restitution and no action can be maintained for enforcement of the
contract.

469.The agent is obliged to deliver to the principal whatever he may have received by virtue
of the agency, even though it may not be owing to the principal. Give one exception.

The duty embodied in Article 1891 of the New Civil Code will not apply if the agent or broker
acted only as a middleman with the task of merely bringing together the vendor and
vendee, who themselves thereafter will negotiate on the terms and conditions of the
transaction.

470.A third person dealing with a partner or an agent must ascertain the limits of authority
of the acting partner or agent.

True.

471.In an express trust, acceptance by the trustee is not necessary for the creation of the
trust.

True.
472.Acceptance by the beneficiary is not necessary for the creation of an express trust.

False. Acceptance by the beneficiary is necessary. Nevertheless, if the trust imposes no

onerous condition upon the beneficiary, his acceptance shall be presumed, if there is no
proof to the contrary.

473.The trustor may or may not have the capacity to transfer property.

False. The trustor may have the capacity.

474.Express trust is created by declaration of the trustee that he holds the property in trust.

False. It is created by direct and positive acts of parties.

475.Trusts over real property are enforceable in any form.

False. There is a formal requirement.

476.The trustee can acquire the trust property by adverse possession even without
repudiation of the trust.

False. One of the requisites of trustee to claim title by prescription is performance of open
and unequivocal acts of repudiation.

477.In order to bind third persons to a trust, the same must be in a public instrument.

False. Personal property is proved by oral evidence; Real property is proved by public
instrument

478.Statute of limitations applies to express trusts.

False. Express trusts do not prescribe as long as they have not been repudiated.

479.There is partnership when two or more persons bind themselves to contribute money,
property, reputation or industry to a common fund, with the intention of dividing the profits
among themselves.

True.

480.A contract of partnership may be constituted in any form except when a parcel of land
is contributed in which case the contract must be in a private or public instrument.
False. It must be in a public instrument.

481.Husband and wife may enter into a partnership for the exercise of a profession.

True.

482.The sharing of net returns may indicate the existence of a partnership.

False. There must also be an agreement to contribute money, property, or industry to a

common fund.

483.A person who, not being a partner in fact, allows his name to be included in the firm
name, may subject himself to the liabilities of a limited partner.

False. He may be subjected to the liabilities of a general partner.

484.Appraisal of goods contributed to the partnership must be based on the value at the
time of perfection of the contract if different from delivery.

False. The appraisal may be made: a) In the manner prescribed by contract of partnership; b)
If no stipulation, by experts chosen by the partners and according to current prices.

485.An industrial partner may engage himself in any other business with the authority of the
other partners.

True.

486.When there is no specification as to the management of the partnership, the partner

with the highest contribution becomes the manager.

False. It shall be vested in all of the partners.

487.The capitalist partners may exclude from the partnership an industrial partner who
engages himself in a business without the required authority even if the industrial partner
also contributed a parcel of land to the partnership.

True.

488.A limited partner is a partner in a partnership.

True.

489.A limited partner who is also a general partner is liable to the creditors of the
partnership but only up to his contribution.

True.

490.A limited partnership is dissolved upon retirement, death, insolvency, insanity or civil
interdiction of a general partner.

True.

491.A contract of agency to sell personal property is a real contract that would require the
delivery of the thing to be sold.

False. Only real contracts such as deposit, pledge and commodatum require delivery

492.A partnership is formed even if no inventory and public instrument of real properties
contributed to the partnership was made.

False. A public instrument, to which is attached an inventory of real properties, signed by

any of the partners, shall be necessary for validity.

493.Universal partnership of all present property includes title to all present and future
property as well as future properties acquired by gratuitous title.

False. It only includes properties that actually belong to them at the time of perfection of
the partnership; future properties acquired by gratuitous title are not included.

494.A contract of partnership with a capital of P3,000 must appear in a public instrument
and recorded in the Securities and Exchange Commission to be enforceable.

False. Failure to register with the SEC will not affect the existence of the juridical entity.

495.A stipulation excluding an industrial partner, from any share in the profits or losses is
valid.

True.

496.An industrial partner is exempt from payment of liabilities to partnership creditors.

False. An industrial partner can be held personally liable.

497.A transfer of a partner’s entire interest in the partnership to his only partner dissolves
the partnership.
False. It does not dissolve the partnership.

498.In voluntary transfer of a partner’s interest in the partnership, the assignee becomes a
partner if majority of the partners consent thereto.

False. A mere assignee cannot become a partner after acquiring the interest of one of the
partners even if with the consent of majority of the partners.

499.A person admitted as partner in an already existing partnership is also liable with his
individual properties for all obligations of the partnership arising before his admission unless
there is a contrary stipulation.

False. He is liable only to the extent of his or her capital contribution, and only after be
becoming a partner.

500.A commission agent cannot sell on credit goods or items without the express or implied
consent of the principal.

True.

501.An agency “coupled with an interest” survives the grantor’s death.

True.

502.In case there are two or more principals, any one of them may revoke the agency
provided the consent of the other is sought.

False. Any one of them may revoke the agency without need of the other’s consent.

503.Constructive trusts are imposed by the law to carry out the actual or presumed intent of
the parties if the express trust is prejudicial to the interest of the beneficiary.

False. Constructive trusts arise contrary to intention of the parties.

504.Resulting Trusts are established by law, regardless of intention, in order to prevent

fraud, oppression or unjust enrichment.

False. Resulting trust is one in which the intention to create a trust is implied or presumed in
law. Constructive trust is the one which is imposed by law regardless of the intention of the
parties to promote justice, frustrate fraud and prevent unjust enrichment.

505.No express trust concerning an immovable or any interest therein may be proved by
parol evidence.

True.

506.There is a resulting trust when a donation is made to a person but it appears that
although the legal estate is transmitted to the donee, he nevertheless is either to have no
beneficial interest or only a part thereof.

True.

507.There is a constructive trust when land passes by succession to any person and he
causes the legal title to be put in the name of another.

False. It is a resulting trust.

508.There is constructive trust if the price of a sale of property is loaned or paid by one
person for the benefit of another and the conveyance is made to the borrower but
mortgaged to secure the payment of the debt.

False. Constructive trust is created when purchase of property leads to its title being placed
in the name of the person who loaned the purchase price as a security for payment of the
debt and not when conveyance was made to the borrower.

509.Laches is a defense in resulting trusts unless the beneficiary had no knowledge of the
facts.

True.

510.In express trusts, the statute of limitations does not apply to subsisting and continuing
trusts, so long as there is no denial or repudiation thereof.

True.

511.The sharing of gross returns is sufficient to establish existence of a partnership.

False. It is not conclusive evidence, there must also be an agreement to contribute money,
property, and industry to a common fund.

512.When an unlawful partnership is dissolved by a judicial decree, the profits and unlawful
objects shall be confiscated in favor of the State.

True.
513.The land owned by the partnership where it operates a shabu laboratory may be
confiscated by the State.

False. Only the profits derived therefrom can be confiscated by the State.

514.When a partnership for a fixed term or particular undertaking is continued after the
termination of such term or particular undertaking without any express agreement, the
rights and duties of the partners remain the same as they were at such termination for the
same period as initially fixed in the contract of partnership.

True.

515.Important alterations in the immovable property of partnership, if useful and beneficial

to the partnership, is a mere act of administration and may be made upon the consent of
the financial majority.

False. It must be upon the consent of all the partners.

516.Strangers are bound to inquire into the existence of any restriction of authority on the
part of a partner.

False. Strangers can assume that partner has authority.

517.Misappropriation of one partner binds the partnership when the partner in the course
of business receives money or property of a third person and the money or property so
received is misapplied without the knowledge of the other partners.

False. It must be with the knowledge of the other partners in order to bind the partnership.

518.If a person specially informs another or states by public advertisement that he has given
a power of attorney to a third person, the latter thereby becomes a duly authorized agent,
in the former case with respect to the person who received the special information, and in
the latter case with regard to any person even if the latter did not read the publication when
he transacted with the agent.

True.

519.A special power of attorney is necessary to make gifts for charity or to employees in the
business managed by the agent.

False. Article 1878 provides that a special power of attorney is needed to make gifts, except
customary ones for charity or those made to employees in the business managed by the
agent
520.A special power of attorney is necessary to loan or borrow money, unless the latter act
be urgent and indispensable for the improvement or preservation of the things which are
under administration.

True.

521.An agent may be relieved by agreement from the obligation to make an accounting.

False. The agreement is void based on Article 1891. The agent has an absolute duty to
render an accounting to his principal of all transactions and material facts that may have
some relevance with the agency.

522.If the commission agent receives guaranty commission in addition to ordinary

commission, the agent shall bear the risk of collection and shall pay the principal the
proceeds of the sale on the same terms agreed upon with the purchaser unless the principal
consented to the sale on credit.

False. General rule still apply even in consented credit.

523.If the third person does not know that the agent exceeded the scope of his authority, he
may hold the agent liable as well as the principal, even if he has not inquired into the
authority of the agent.

False. If the agent contracts in the name of the principal, exceeding the scope of his
authority, and the principal does not ratify the contract, it shall be void if the party with
whom the agent contracted is aware of the limits of the powers granted by the principal. In
this case, however, the agent is liable if he undertook to secure the principal’s ratification.

524.Agency by ostensible authority consists in the conscious permission of acts beyond

those powers granted.

True.

525.If two or more principals have appointed an agent for a common transaction or
undertaking, they are jointly liable unless solidarity is agreed upon.

False. Solidarily liable.

526.An agency is not revoked by the principal’s death if it has been constituted in the
interest of a third person without notice or knowledge of the interest.

False. Agency will survive only if the 3rd person accepts the stipulation in his favor.

527.An oral trust over personalty is valid.

True.

528.There is no need for the trustee to render his account under oath.

False. There is still a need to render account.

529.The trustor cannot prohibit alienation of the subject property for a period more than 25
years.

True.

530.Merger is a cause for the termination of an implied or express trust.

True.

531.In an implied trust, the action to recover must be brought within five years from the
issuance of the title to the property.

False. It is 10 years.

532.A partner may transfer his interest to another over the objections of the other partners.

True.

533.A secret and silent partner is one who has no voice in the management of the
partnership and is not known to the other partners.

False. He is not known to be a partner by outside parties nor held out as a partner by the
other partners.

534.The partnership begins from the moment it is recorded in the Securities and Exchange
Commission.

False. The contract of partnership is perfected by mere consent of the parties.

535.The fruits of the property promised to be contributed by a partner should also be

delivered without exception.

False. If the partner is in bad faith, he is liable not only for the fruits actually produced, but
also for those that could have been produced.
536.In case of imminent loss of the business of the partnership, an industrial partner shall be
required to contribute additional service to the partnership.

False. Capital partners are obliged to contribute additional capital; industrial partners are
not required to render additional service.

537.An industrial partner can engage in other business, but must not compete with the
partnership, unless otherwise stipulated.

False. An industrial partner, as a rule, cannot engage in business for himself, unless the
partnership expressly permits him to do so.

538.A partner, as agent, cannot assign partnership property in payment of partnership debt.

True.

539.Dissolution terminates the partnership.

False. On dissolution, the partnership is not terminated, but continues until the winding up
of partnership affairs is completed.

540.Insolvency of a partner is one of the causes for voluntary dissolution of a partnership.

False. It is involuntary.

541.In case of an agreement between a partner, the partnership debtors and the persons
continuing the business, a partner may be discharged from liabilities.

False. A partner is discharged from any existing liability upon the dissolution of the
partnership by an agreement to that effect between himself, the partnership creditor and
person or partnership continuing the business

542.Creditors of the old partnership are no longer considered as creditors of the continued
partnership.

False. The law makes the creditors of the dissolved partnership also creditors of the persons
or partnership continuing the business. Both classes of creditors, the old and the new, are
treated alike, being given equal rights in partnership property.

543.The individual property of a deceased partner, whose name is being used by the
continuing partnership, shall be held liable for debts contracted after his death.
False. The use by the person or partnership continuing the business of the partnership, or
the name of a deceased partner thereof, shall not of itself make the individual property of
the deceased partner liable for any debts contracted by such person or partnership.

544.A limited partner may contribute services to the partnership.

False. A limited partner may contribute money and other property to the limited
partnership, but not services.

545.A limited partner’s surname may appear in the partnership name but he becomes a
general partner with respect to the partners and third parties.

False. Making his surname appear in the partnership name will make him liable as general
partner to partnership creditors who have no actual knowledge that he is not a general
partner.

546.A substituted partner is one admitted to all the rights of a limited partner.

False. It must be a substituted limited partner.

547.An assignee of a limited partner acquires the rights of the assignor.

False. Only if he becomes a substituted limited partner.

548.A principal may be bound by an agent to render service without compensation.

True.

549.In all cases, a special power of attorney is necessary to loan or borrow money.

False. It is not necessary if it is urgent and indispensable for the preservation of the things
which are under administration.

550.Why is submission to arbitration not included in a special power to compromise?

Because it is an act of administration where the principal only has the power to do such act.

551.There is an implied acceptance if the principal delivers his power of attorney to the
agent and the latter receives it without objection.

True.

552.An agent may be exempted by stipulation from rendering an accounting.

False. Agent is bound to render an account of his transactions and to deliver to the principal
whatever he may have received by virtue of the agency, even though it may not be owing to
the principal.

553.If the principal does not mention the power to substitute at all, the agent may appoint
one but he is responsible for the acts of the substitute.

True.

554.An agency is gratuitous unless compensation is agreed upon.

False. Agency is presumed to be for a compensation, unless there is proof to the contrary

555.The accomplishment of the object of the agency extinguishes an agency even prior to
the final accounting.

True.

556.An agency at will is revoked even if the revocation is not brought to the knowledge of
the agent.

True.

557.When a partner by estoppel combines with another partner and on the strength of the
representation, contracted with a third person, both of them are liable pro rata.

True.

558.A partner is a co-owner of the other partners with respect to the undistributed net
profits of the partnership.

False. Refers only to specific partnership property.

559.Winding up may be done by a mere assignee in exceptional circumstance.

True.

560.A decree of dissolution of a partnership may be granted upon application of the

purchaser of partnership interest in case of termination of the term or undertaking.
True.

561.Except as necessary for winding up, dissolution terminates all authority of partners to
act for the partnership.

True.

562. After dissolution, a partner can bind the partnership by any transaction which would
bind the partnership if dissolution had not taken place, provided the other party to the
transaction had extended credit to the partnership after the dissolution.

True.

563.Dissolution necessarily discharges a partner of liability for obligations incurred

thereafter.

False. Where the dissolution is caused by the act, death or insolvency of a partner, each
partner is liable to his co-partners for his share of any liability created by any partner acting
for the partnership as if the partnership had not been dissolved.

564.When a partnership agreement is rescinded on the ground of fraud or

misrepresentation, partners who are not guilty shall have the right to subrogation for any
payments made by them of partnership liabilities.

True.

565-569.What are the causes for involuntary dissolution of a partnership?

a. A partner has been declared insane in any judicial proceeding or is shown to be of

unsound mind;
b. A partner becomes in any other way incapable of performing his part of the
partnership contract;
c. A partner has been guilty of such conduct as tends to affect prejudicially the carrying
on of the business;
d. A partner wilfully or persistently commits a breach of the partnership agreement, or
otherwise so conducts himself in matters relating to the partnership business that it
is not reasonably practicable to carry on the business in partnership with him;
e. The business of the partnership can only be carried on at a loss.

570-573.What are the liabilities of the partnership in their rank in the order of payment?

(1) Those to creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners;
(2) Those to limited partners in respect to their share of the profits and other
 compensation by way of income on their contributions;
(3) Those to limited partners in respect to the capital of their contributions;
(4) Those to general partners other than for capital and profits;
(5) Those to general partners in respect to profits;
(6) Those to general partners in respect to capital.

574-579Enumerate some rights of a limited partner?

a. To have the partnership Books kept at the principal place of business of the
partnership.
b. To Inspect at a reasonable hour, partnership books and copy any of them.
c. To demand true and full information of the things affecting the partnership.
d. To demand formal account of the partnership affairs whenever circumstances
render it just and reasonable.
e. To ask for dissolution and winding up by decree of court.

580-585. What are the grounds for the extinguishment of agency?

a. Expiration of the period

b. Death, civil interdiction, insanity or insolvency of the principal or of the agent
c. Withdrawal of the agent
d. Accomplishment of the object or the purpose of the agency
e. Revocation
f. Dissolution of the firm or corporation, which entrusted or accepted the agency
586-595.Give ten instances when an agency couched in general terms would not be
sufficient.

(1) To make such payments as are not usually considered as acts of administration;
(2) To effect novations which put an end to obligations already in existence at the time the
agency was constituted;
(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from
a judgment, to waive
objections to the venue of an action or to abandon a prescription already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or
for a valuable consideration;
(6) To make gifts, except customary ones for charity or those made to employees in the
business managed by the
agent;
(7) To loan or borrow money, unless the latter act be urgent and indispensable for the
preservation of the things which
are under administration;
(8) To lease any real property to another person for more than one year;
(9) To bind the principal to render some service without compensation;
(10) To bind the principal in a contract of partnership;

596.In what instance may an assignee of a partner’s interest judicially demand for
dissolution at any time?

If the partnership was a partnership at will when the interest was assigned or when the
charging order was issued.

597-599.Give three (3) examples of implied resulting trusts.

a. When land passes by succession to any person and he causes the legal title to be put
in the name of another, a trust is established by implication of law for the benefit of
the true owner.
b. If two or more persons agree to purchase property and by common consent the legal
title is taken in the name of one of them for the benefit of all, a trust is created by
force of law in favor of the others in proportion to the interest of each.
c. When property is conveyed to a person in reliance upon his declared intention to
hold it for, or transfer it to another or the grantor, there is an implied trust in favor of
the person whose benefit is contemplated.

600++++.Write your original, poem, song, story, essay, or any creative literature about the
covid-19 pandemic.