The Professional CPA Review School

Main: 3F C. Villaroman Bldg. 873 P. Campa St. cor Espana, Sampaloc, Manila
 (02) 735 8901 / 735 9031 / 0917-1332365
email add: crc_ace@yahoo.com
Baguio Davao
Rudel Bldg. V, Lower Mabini cor Diego Silang, Baguio City 3/F GCAM Bldg. Monteverde St. Davao City
 0906-0775156/0961-8683385  0917-1332365/0905-4648851

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS OCTOBER 2021 BATCH

FIRST PRE-BOARD EXAMINATIONS JULY 20, 2021

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for
each item by Shading the corresponding letter of your choice on the answer sheet provided. STRICTLY
NO ERASURES ALLOWED. Use Pencil No. 2 only.

1. The following statements are presented to you:

1) If Annie paid her obligation to Millie because of mistake and before it falls due, the situation
will be governed by the principle on natural obligations
2) If Annie paid her obligation to Millie because of mistake and before it falls due, the situation
will be governed by the principle regarding quasi contracts
A. Both 1 and 2 are true
B. Only 2 is true
C. Only 1 is true
D. Both 1 and 2 are false

2. The following statements are presented to you:

1) A contract of sale is bilateral, onerous and commutative which are also characteristics of a
contract of barter
2) A contract of sale is consensual whereas a contract of barter is a real contract.
A. Both 1 and 2 are true
B. Only 2 is true
C. Only 1 is true
D. Both 1 and 2 are false

3. It is a contract wherein a person is permitted to enjoy the use of the thing belonging to another with
the obligation to return the object itself upon fulfillment of the purpose or arrival of the period agreed
upon.
A. Precarium
B. Usufruct
C. Commodatum
D. Mutuum

4. If before the happening of the suspensive condition the thing subject matter of the obligation is
improved by nature or time, and the condition subsequently happen, the debtor shall acquire:
A. A the right to the improvement
B. the right to be reimbursed
C. the right to be a usufructuary
D. no right as the principal and the improvement shall inure to the benefit of the creditor

5. Atoy, Buknoy, Caloy and Digoy obliged themselves solidarily to give Eloy a specific motorcycle
worth P200,000. Which of the following is true?
A. The obligation of the debtors will be solidary because the object is indivisible
B. If Atoy refuses to comply with his obligation, Eloy may compel performance from any one of
three remaining debtors
C. The obligation of the debtors will be joint unless solidarity was stipulated upon.
D. Breach on the part of any of the debtors will render all of them liable to pay damages

6. Which of the following is not true relative to culpa contractual?

A. There is a pre-existing obligation
B. The source of obligation is the negligence of the defendant
C. The negligence is incidental to the performance of an obligation
D. The guilty party is liable for damages
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 2

7. During the pendency of the criminal case against a thief, the car he stole was lost through an
accidental fire. Prior to the accident, several demands were made for the owner to receive the return
of the car, but the owner refused to receive the same without any reasonable ground. This will result
to:
A. extinguishment of the obligation because an accidental fire is always a fortuitous event.
B. extinguishment of the obligation because the owner is guilty of delay
C. extinguishment of the civil obligation because the value of the car will be converted into the
number of days the thief will serve in prison.
D. liability of the accused to pay the price of the car as the obligation will not be extinguished
because the obligation proceeds from a criminal offense.

8. During the pendency of the criminal case against a thief, the car he stole was lost through fortuitous
event. In this case:
A. The obligation to return the car will be extinguished because of the fortuitous event.
B. Both the criminal and civil obligations will be extinguished because there is no more evidence
C. The accused will be liable to return another car of the same value and kind.
D. The accused will be liable to pay the price of the car as the obligation will not be extinguished
because the obligation proceeds from a criminal offense.

9. The following except one are the rights of the creditor if the obligation is to give a determinate thing:
A. to compel specific performance
B. to ask that the obligation be complied with at the expense of the debtor
C. to recover damages in case of breach of obligation
D. to be entitled to the fruits from the time the obligation to deliver the principal thing arises

10. Which of the following is not true relative to fraud?

A. Responsibility arising therefrom is demandable.
B. An action to enforce liability arising from a past act may not be waived
C. There is a voluntary act
D. There is deliberate intention to cause damage or prejudice

11. May the suit filed by a passenger who was hurt against the operator of a public utility vehicle still
prosper even if the driver was acquitted by the court?
A. Yes, provided he can prove the negligence of the driver.
B. No, this will constitute double jeopardy which is violative of the Constitution
C. No, the acquittal means that the guilt of the accused was not proven by proof beyond
reasonable doubt
D. Yes, it is sufficient for him to prove the existence of the contract of carriage and the injuries
suffered.

12. Which of the following obligations will not be extinguished by loss or destruction of a thing due?
A. When the thing lost before the debtor has incurred in delay is a generic object
B. When the obligation is to deliver a car with plate number AAA 1115
C. When the thing is lost without the fault of the debtor
D. When the specific thing is lost without the fault of the debtor and after the creditor incurred delay
in accepting its delivery

13. Annie sold her mobile for P20,000 to Bob. There was no fixed date for the performance of the
obligations of both parties. The obligation of Annie as the seller is:
A. To wait for demand before delivering the mobile phone.
B. To deliver the mobile phone immediately under the principle of compensation morae
C. To wait for Bob to pay before delivering the mobile phone.
D. To rescind the contract at her option

14. Real contracts, such as deposit, pledge, and commodatum are not perfected until -
A. Acceptance of the terms of the contract.
B. Consent of the contracting parties.
C. Delivery of the object of the obligation.
D. Contract must be in a public instrument.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 3

15. Bugoy owes KokoyP1m payable on December 1, 2021. Which of the following is correct?
A. If Kokoy dies before the obligation matures, his heirs can collect from Bugoy
B. If Bugoy dies before the obligation matures, his heirs will be liable to Kokoy.
C. If any of the parties die, the obligation is extinguished
D. If both parties die, the heirs of Kokoy cannot collect from the heirs of Bugoy

16. Which of the following is not a rescissible contract?

A. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due them
B. Those which are entered into by guardians wherever the words whom they represent suffer
lesion by one-fourth (¼) of the value of the things which are the object thereof
C. Those agreed upon in representation of absentees, if the latter suffer a lesion of more than one-
fourth (¼) of the value of the object of the contract
D. Those entered into involving properties under litigation without permission from the court and
consent of the party litigants

17. Which of the following oral contracts is valid and enforceable?

A. Sale of a house and land for P1m
B. Sale of a laptop for P1,000,000
C. Agreement made in consideration of marriage
D. Loan for P1m secured by a real property mortgage

18. 1st STATEMENT – If the same car should have been sold to different buyers, the ownership shall be
transferred to the person who may first taken possession thereof in good faith.
2nd STATEMENT –If the same house should have been sold to different buyers, the ownership shall
be transferred to the person who may first taken possession thereof in good faith.
A. The 1st statement is true, 2nd statement false
B. Both statements are false
C. 1st statement false, 2nd statement true
D. Both statements are true

19. A party to the contract of sale who shall generally bear the expenses for registration and execution
of the sale.
A. Guarantor
B. Vendee
C. Vendor
D. Offeree

20. A stipulation in a contract of sale stating that despite delivery, the ownership of the thing shall remain
with the seller until the buyer has fully paid the price:
A. pactum commissorium
B. pactum non alienando
C. pactum reservatidominii
D. pactum leonina

21. If the animal sold suffers from hidden defects, the buyer may bring redhibitory action within:
A. 7 days from discovery of the defect
B. 40 days from discovery of the defect
C. 40 days from delivery to the vendee
D. 6 months from delivery to the vendee

22. One of the following is not correct relative to the object in a contract of sale?
A. The sole owner of a thing may sell an undivided interest therein.
B. Hope or chance may be the object of the contract of sale
C. Things having a potential existence may be the object of a contract of sale.
D. Future things and future inheritance may be the object of a contract of sale

23. The right of the creditor to exercise all the rights of his debtor to satisfy his claim, except rights which
are inherent and personal on the part of the debtor.
A. accion pauliana
B. accion redhibitoria
C. accion subrogatoria
D. accion reinvindicatoria
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 4

24. Angel obliged herself to deliver a specific car to Baby or instead pay the sum of Php2M. In this case:
A. Angel can give the car or the cash
B. Angel must give what Baby will choose
C. Angel cannot compel Baby to accept the car
D. Angel should give both prestation

25. Bok sold to Bing a fake gold ring on February 10, 2021. Delivery of the ring was made on February
15, 2021. Bing paid the purchase price on February 20, 2021. On Feb 25, 2021 Bing discovered the
fraud committed by Bok. In this case, Bing can no longer file an annulment case on:
A. February 16, 2025
B. March 1, 2024
C. February 1, 2026
D. December 6, 2023

26. The following statements are presented to you:

1) Contracts entered into during a state of drunkenness or during a hypnotic spell are void
2) Bonnie sold his ward’s house worth P600,000 for only P500,000, the contract is
rescissible
A. Both 1 and 2 are true
B. Only 2 is true
C. Only 1 is true
D. Both 1 and 2 are false

27. 1st Statement – An offer must be certain and acceptance must be qualified before there can be
meeting of minds between the parties.
2nd Statement – Negotiorum gestio and solution indebiti are innominate contracts.

A. B. C. D.
st
1 Statement False False True True
2nd Statement False True True False

28. Ching owes Choy P2m with Cheng as guarantor. Chingpaid P1m leaving P1m unpaid. Chay without
the knowledge of Ching paid ChoyP2m. As a result:
A. The obligation is extinguished but Chay cannot recover from Ching.
B. The obligation is extinguished. Ching can recover P2m from Ching or Cheng.
C. The obligation is not extinguished as the payment is without the consent of Ching.
D. The obligation is extinguished. Chay can run after Ching for P1m but has no right as against
Cheng.

29. 1st Statement - In delagacion, the insolvency of the new debtor can never revive the original debtor’s
obligation.
2nd Statement- In expromission, the insolvency of the new debtor may at times revive the original
debtor’s obligation
A. True, true
B. True, false
C. False, true
D. False, false

30. 1st Statement -The expenses of consignation when properly made, shall be charged against the
obligor
2nd Statement- Ratification is a remedy in equity by means of which a written instrument is made or
construed so as to express or confirm the real intention of the parties when some error or mistake is
committed.
A. True, true
B. True, false
C. False, true
D. False, false
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 5

31. Which of the following statements is false relative to a joint obligation?

A. There are as many debts as there are debtors
B. There are as many credits as there are creditors
C. The debts and/or credits are considered distinct and separate from one another
D. The insolvency of one of the debtor shall make the other debtors liable

32. What is the nature of the remedies of the unpaid seller of movables sold on installment basis under
Article 1484 of the Civil Code, namely: exact fulfillment, cancellation of the sale and foreclosure of
the chattel mortgage on the thing sold?
A. Commulative
B. Facultative
C. Alternative
D. Speculative

33. Loleng owns mango trees bearing fruits, ready for harvest. She sold all the fruits of all the trees to
Lope who paid P500k. Loleng told to Lope that he can harvest all the fruits anytime he likes and
pointing at the mango trees. This mode of delivery is known as tradition brevi manu, which is the
opposite of:
A. Traditio longa manu
B. Traditio formal
C. Traditio simbolica
D. Traditio constitum possessorium

34. If the area of the land or an immovable property was specified in the contract of sale and there is a
difference between the area and the boundary:
A. boundary prevails
B. there must be another survey
C. area prevails
D. contract is void

35. "facioutdes" means:

A. I give and you give
B. I do and you give
C. I give and you do
D. I do and you do

36. Case 1 – A hired B for P10,000 to kidnap C, and he paid B P5,000 in advance. Before B could
kidnap C, A relented and stopped B from performing the contract. A may recover from B the P5,000
paid in advance.
Case 2 – A, at gun point, compels B to sell his car to A. Since the contract is voidable, either A or B
has the right to file the action for annulment.
A. Both cases are false.
B. First case is false, second case is true.
C. Both cases are true.
D. First case is true, second case is false.

37. The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation have been lost or compliance of the
obligation has become impossible. The indemnity shall be fixed taking as a basis the value of the
A. Choice of the creditor.
B. Most expensive thing.
C. First thing which disappeared.
D. Last thing which disappeared.

38. In the absence of an agreement to the contrary what shall be the basis of payment of an obligation
in case there should supervene, an extraordinary inflation or deflation of the currency stipulated?
A. The value of the currency at the time of the establishment of the obligation.
B. The value of the currency at the due date of the obligation.
C. The value of the currency shall be fixed by courts.
D. The value of the currency shall be determined by an expert from the Central Bank.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 6

39. Sources of obligations as provided by law, except

A. Torts
B. Contracts
C. Culpa aquiliana
D. Solutioindebiti

40. Which of the following produces payment:

A. Dacion en pago
B. Delivery of a manager’s check
C. Compensation
D. Giving of collateral or guaranty

41. In Facultative obligations, if substitution has been made, which of the following is true?
A. The obligation is extinguished by substitution
B. The loss of the original prestation is immaterial
C. The obligation is to deliver the substitute plus damages
D. The obligation is extinguished by novation

42. The following statements are presented to you:

1) Ana will give Sofia P100,000, if Sofia will kill Bobby. This is a valid contract so long as Sofia
does not execute the act.
2) Sofia agreed to put poison on the food of Bobby, and if Sofia fails, Sofia will pay Ana
damages worth P100,000.This is a valid contract because an obligation may be subjected to
a penalty clause.
A. Both 1 and 2 are true
B. Only 2 is true
C. Only 1 is true
D. Both 1 and 2 are false

43. Noynoy obtained a 1M pesos loan from BDO Bank. The loan was evidenced by written contract and
as a security,Noynoy executed a mortgage on his house. The house however, was subsequently
destroyed by typhoon “Krissy”. Is Noynoy still liable despite the fortuitous event?
1st answer Yes, the obligation of Noynoy was to deliver a generic thing – money.
nd
2 answer No, the obligation was to deliver determinate things – the house.
A. True, true
B. True, false
C. False, true
D. False, false

44. Digong obtained a 1M pesos loan from BPI Bank. The loan was evidenced by written contract and
as a security, Digong executed a mortgage on his house. The house however, was subsequently
destroyed by typhoon “Bong” on June 1, 2021. What will happen to the obligation if the maturity of
the loan is on December 1, 2021?
1st answer The bank should wait for the maturity before demanding payment otherwise the
case will be governed by the principle of solutio indebiti.
2nd answer The bank may demand from Digong immediate payment as the debtor losses the
period if the guaranty given to secure a loan will be lost.

3rdanswer The obligation is extinguished as nobody should be made liable for fortuitous
events
A. Only the 1st answer is correct
B. Only the 3rd answer is correct
C. Only the 2nd answer is correct
D. Answers 1 and 2 are correct

45. On May 1, 2021 Angela was indebted to Megan for P500,000 for a 60-day period. Angela proposed
to Megan that Gabriel will pay Angela’s debt, and that Angela will be free from all liabilities. Megan
and Gabriel agreed to the proposal. On July 1, 2021 when Megan tries to collect from Gabriel, she
finds that Gabriel is insolvent. At the time of delegation, Gabriel was insolvent but this was not
known to Angela. The insolvency is not of public knowledge. So Megan sues Angela on the ground
that it was Angela who made the proposal and that Angela really guaranteed Gabriel’s solvency.
Decide.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 7

A. Angela is liable because she is presumed to have guaranteed Gabriel’s solvency.

B. Angela is not liable, because Angela does not know the insolvency of Gabriel at the time of
delegation and neither was the insolvency of public knowledge.
C. Angela is liable because she did not exercise due diligence in determining the insolvency of
Gabriel
D. Angela is liable because Gabriel agreed to the proposal to make himself solidarily liable for the
obligation.

46. Bobby obliged himself to give to Sofia his car on June 30, 2021. There was no delivery until July 10,
2021when the garage of Bobby’s house collapsed due to a strong typhoon and the car was totally
destroyed. Is Bobby still liable?
A. Yes, because the contract is perfected.
B. No, even if Bobby was already in default, he could plead impossibility of performance.
C. Yes, the obligation to deliver the car is changed to pay the equivalent value because Bobby is in
legal delay.
D. No, because there was no demand by Sofia to deliver the car and the specific object was lost
due to fortuitous event. The obligation is extinguished.

47. A solidary obligation is one in which each of the debtors is liable for the entire obligation or debt, and
each of the creditors is entitled to the entire credit. Obligations shall also be considered solidary
under the three following exceptions. Which does not belong to the exception?
A. When the law expressly provides solidarity.
B. When solidarity is expressly stipulated in the obligation.
C. When solidarity is required from the nature of the obligation.
D. When the prestation is indivisible and there are two or more debtors and creditors.

48. Case No. 1. Anna promised to give her son a car if the son will not marry Sofia this year. If by the
end of the year, Sofia is already dead or the son has not married Sofia, the obligation to give a car is
extinguished.

Case No.2. Anna promised to give her son a car if the son will marry Sofia before the end of 2021. If
on January 1, 2021, the son has not yet married Sofia, or Sofia has died, the obligation is effective
and demandable
A. First false, second true.
B. First true, second false.
C. Both statements are true.
D. Both statements are false.

49. The following are examples of obligations with a period, except:

A. “As soon as I have money”
B. “30 days after the death of Mr. A”
C. “If the sun will rise on August 1, 2021”
D. “if Mr. Atoy reaches the age of 25 which is 2 years from today”

50. 1st statement - The receipt of a later installment of a debt without reservation as to prior installments,
shall give rise to a conclusive presumption that such installments have been paid.
2nd statement –The receipt of the installment shall give rise to a disputable presumption that the
principal loan has been paid.
A. True, true
B. True, false
C. False, true
D. False, false

51. Ashley promised her dog “Hetty” to Bailey on March 1, 2021 to be delivered on August1, 2021. The
dog gave birth to puppies while in possession of Angeline. In this case:
1) If the puppies were born on August 1, 2021 or after, Bailey is entitled to them
2) If the puppies were born anytime before the dog was actually delivered to Bailey, even of
they were born on August 1, 2021 or after, then Ashley is entitled to them
A. Both are correct
B. Both are wrong
C. Only 1 is correct
D. Only 2 is correct
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 8

52. Asyong sold his cow to Bosyo for P30k. No date was stipulated for the delivery of the cow. While still
in the possession of Asyong, the cow gave birth to a calf. In this case the calf shall belong to:
A. Asyong, since Bosyo has not paid the purchase price
B. Asyong, since the calf was born before delivery of the cow
C. Bosyo,since the calf was born after the perfection of the contract.
D. Bosyo, so long as he will be willing to pay an additional price for the calf.

53. Three (3) of the following contracts are void. Which is not?
A. Oral authority given to an agent in sale of land.
B. Contract in writing contemplating and asking for impossible service.
C. Oral partnership agreement where immovable property is contributed.
D. Oral partnership agreement when capital is more than P3,000 in cash.

54. 1st Statement – Contracts are voidable or annullable even though there may have been no damage
to one of the contracting parties.
2nd Statement – The debtor losses the benefit of the period, and his obligation becomes demandable
when after contracting the obligation, the creditor suspects that the debtor is becoming insolvent
A. Both statements are false.
B. Both statements are true.
C. First statement is false, second statement is true.
D. First statement is true, second statement is false.

55. Chay acquired from Choi a parcel of land worth P 600,000; P200,000 to be paid in cash and for the
difference, she will convey her car worth P400,000. What kind of contract is this?
A. Barter
B. Lease contract
C. Contract of sale
D. Obligation to sell

56. The sale known as emptio rei sperati is a sale involving:

A. hope
B. future goods
C. movable property
D. expectancy or chance

57. 1st Statement – Compensation will extinguish the obligation as when the creditor will gratuitously
abandon all his rights against the debtor.
2nd Statement - The action for rescission of contracts must be commenced within six years from
attainment of capacity
A. Both statements are wrong.
B. 1st statement is correct, 2nd statement is wrong.
C. Both statements are correct.
D. 1st statement is wrong, 2nd statement is correct

58. It is the process of enforcing the State’s right to take away property for public use upon payment of
just compensation which is governed by special laws:
A. Escheat
B. Police Power
C. Expropriation
D. Eminent Domain

59. Choose the contracts which are voidable.

A. A Those undertaken in fraud of creditors when the latter cannot in any other manner collect
the claims due the.
B. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud.
C. Those whose object is outside the commerce of man.
D. Those where both parties are incapable of giving consent to a contract.

60. A sale with a right to repurchase within 15 years from the date of sale was executed. In this case:
A. The stipulation is void
B. The buyer has 4 years within which to repurchase the property sold
C. The buyer has 12 years within which to repurchase the property sold
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 9

D. The buyer has 10 years within which to repurchase the property sold.

61. A sold to B a residential lot to be containing an area of 1,000 square meters at P1,000 per square
meter. In this connection, which of the following statements is correct?
A. If the lot should contain 950 sq. meters only, B can ask for a proportionate reduction of the price
and rescission.
B. If the lot should contain 1,200 sq. meters, B cannot reject the excess and must pay additional
price at P1,000 per square meter.
C. If the lot should contain 900 sq. meters, B can choose between proportionate reduction of the
price but not rescission of the sale
D. If the lot should contain 900 sq. meters, B can choose between proportionate reduction of the
price or rescission of the contract

62. This kind of simulation takes place when the parties do not intend to be bound at all by their
agreement:
A. Apparent contract
B. Relative simulation
C. Deed of assignment
D. Absolute simulation

63. 1st STATEMENT – A condition is considered fulfilled if the debtor voluntarily prevents its fulfillment.
2nd STATEMENT – If the resolutory condition depends upon the will of debtor, the obligation subject
to it is valid.
A. 1st statement is true, 2nd statement false
B. 1st statement false, 2nd statement true
C. Both statements are true
D. Both statements are false

64. Payment of the obligation by a solidary debtor shall not entitle him to demand reimbursement from
his co-debtors if such payment was made:
A. Before the obligation is due.
B. After the obligation has prescribed or become illegal.
C. In compliance with the demand made to him by all the creditors.
D. After the obligation has become due and demandable and notice of payment was made only to
him.

65. 1st Statement – Unless the application of payment is expressly stated, the payment shall be applied to
the obligation most burdensome or onerous to the obligee.
2nd Statement – Cession enpago is commutative and governed by the law on sales

A. 1st statement is wrong, 2nd statement is correct

B. 1st statement is correct, 2nd statement is wrong.
C. Both statements are wrong.
D. Both statements are correct

66. A promissory note signed by M is worded as follows: “I promise to pay P the sum of Fifty Thousand
Pesos provided that if he should fail in the 2021 BAR Examinations, he shall return to me the said
amount.” The above note gives rise to an obligation with:
A. Suspensive condition
B. Resolutory condition
C. Casual condition
D. Mixed condition

67. Atok and Butchoy who are both unemancipated minors entered into a contract in writing and fully
executed all obligations therein. The contract is:
A. void
B. valid
C. voidable
D. unenforceable

68. An assignor of credit warrants:

A. Collectibility
B. Solvency of the debtor
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 10

C. Existence and legality of credit

D. Assurance of payment

69. A sold to B his land orally. B paid the purchase price and the land was constructively delivered to him.
Is the oral contract valid?
A. The contract is unenforceable
B. The contract is not valid because the contract was not reduced in a public instrument
C. The contract is not valid because it is not in writing as required by the Statute of Frauds
D. The contract is valid because there was implied ratification when the contract was executed

70. Ambo offered to sell his mobile phone to Kiko for P20,000. Kiko offered to buy the mobile phone for
P18,000 but was rejected by Ambo. When Kiko was about to leave, Ambo called him and said he is
now willing to sell for P18,000. In this case:
A. The contract of sale was perfected.
B. Kiko is obligated to pay Ambo P18,000
C. The contract of sale must be in writing to be enforceable.
D. Kiko has no obligation to buy the mobile phone at all.

71. The principle which states that the thing perishes with its owner.
A. caveat emptor
B. res perit domino
C. pactum reservati domini
D. respond eat superior

72. The following are vices of consent except:

A. Duress
B. Force
C. Undue Influence
D. Reverential Fear

73. The cause of loss is material to determine if the obligation of the debtor will be extinguished in which
of the following cases?
A. The debtor promised to give a generic thing
B. One of the prestations in an alternative obligation was lost
C. The obligation of the debtor is to pay money and the specific thing mortgaged to secure the loan
was lost
D. The obligation is facultative and the principal object was lost before substitution

74. When in a contract of sale there is a stipulation that the seller has the right to repurchase he thing
sold but the parties failed to fix the period, the right can be exercised:
A. any time under the principle of autonomy or freedom of the parties to stipulate
B. within 10 years from the date of the contract
C. after 4 years from the date of delivery
D. within 4 years from the date of the contract

75. In which of the following situations will compensation take place?

A. Ambo owes Buboy P1m payable on Oct 26, 2020. Buboy owes Ambo fourhundred sacks of rice
worth P1m on Oct 26, 2020
B. Ambo owes Buboy P1m payable on Oct 26, 2020. Buboy owes Ambo P1m on Oct 26, 2021 and
today is Jan 8, 2021.
C. Ambo owes Buboy P1m. Kiko is the Guarantor of Ambo. Buboy owes Kiko P1m
D. Ambo owes Buboy 10 sacks of rice. Buboy owes Ambo 10 sacks of rice

76. Which of the following is true?

a. Novation may be presumed
b. Novation may be implied
c. Dacion en pago is an example of novation
d. Substitution in facultative obligations will result to novation

77. In a sale by auction, which of the following statements is incorrect?

A. A sale by public auction is perfected when the auctioneer announces its perfection by the fall of
the hammer, or in any other manner.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 11

B. Before perfection, any bidder may retract his bid.

C. Before perfection, the auctioneer may withdraw the goods unless the auction was announced to
be without reserve.
D. The seller may validly participate in the bidding without prior notice of the bidders.

78. X, Y and Z are debtors of Q and R who are solidary creditors, in the amount of P60,000.00.
Q condoned the share of Z which the latter accepted. How much can R collect from Y if X is
insolvent?
A. Zero because condonation will inure to the benefit of all debtors
B. P30,000.00
C. P20,000.00
D. P10,000.00

79. A, B and C are solidary debtors of Dand E in the amount of P30,000.00. Before due date, C
becomes insolvent. On due date, E can collect:
A. P15,000.00 from A, and P15,000.00 from B.
B. P10,000.00 from A, and P10,000.00 from B.
C. P5,000.00 from A and P5,000.00 from B.
D. P15,000.00 from A or P15,000.00 from B.

80. Which of the following contracts is valid and without defect?

A. Contract of barter entered into by two minors
B. Contract of sale entered into by a person during a hypnotic spell.
C. A contract of sale for P10m worth of shabu appearing in a public instrument
D. Contract of lease entered into during a lucid interval of a person publicly known to be insane.

81. Marilou and Marissa entered into a contract wherein Marissa will receive from Marilou a residential
house and lot worth P1m and Marilou will receive from Marissa cash amounting to P700k and a
preloved car worth P300k. What kind of contract is this?
A. Barter because there will be exchange of properties
B. Sale because of clear intention of the parties
C. Neither sale nor barter
D. Sale because the value of money exceeds the value of the car as considerations in exchange of
the house and lot.

82. Which of the following statements is true?

A. A future event may be a period or a condition.
B. The debtor losses the right to the period if he does not give any security to the creditor.
C. The condition to do an impossible thing does not render the obligation void.
D. In alternative obligations the right to select which of the prestation shall be delivered belongs to
the creditor, unless expressly given to the debtor.

83. When one of the contracting parties is compelled by a reasonable and well-grounded fear of an
imminent and gave evil upon his person or property, or upon the person or property of his spouse,
descendants or ascendants to give his consent, there is:
A. Violence
B. Intimidation
C. Mistake
D. Undue influence

84. If the seller will exercise his right of redemption under a pacto de retro sale, which of the following will
not be paid by the seller to the buyer?
A. Necessary expenses for preservation of the thing sold
B. Expenses in the execution of the contract of sale paid by the buyer.
C. Interest on the contract price and taxes paid to the government in relation to the possession of
property
D. Contract price paid by the buyer.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 12

85. A contract of sale with a right to repurchase and other contracts including a contract purporting to be
an absolute sale shall be presumed to be an equitable mortgage in the following cases, except:
A. When the vendee binds himself to pay the taxes due.
B. When the vendor remains in possession of the thing sold.
C. When the price of sale with right to repurchase to repurchase is unusually inadequate.
D. When the period to repurchase the property is extended beyond the period allowed by law.

86. Linda and Tess agreed on a certain contract of sale, but Linda fraudulently made a document reciting
a contract of donation. Later both Linda and Tess died. Which is correct?
A. The heirs of Linda may bring an action to reform the instrument but not the heirs of Tess
B. The heirs of Tess may bring an action to reform the instrument but not the heirs of Linda
C. Either the heirs of Linda or Tess may bring an action to reform the instrument
D. Nobody’s heirs can ask for reformation because the contract was deemed void upon death of
Linda and Tess

87. Angelo obtained from Gabriel a loan amounting to P500,000.00, the same being secured by a
mortgage on Angelo’s house and lot. Thereafter, Gabriel assigned his credit right to Andrei after
sending notice to Angelo. Which of the following statements is incorrect?
A. Andrei can collect from Angelo even if Angelo does not give his consent to the assignment.
B. Andrei cannot collect from Angelo because the assignment of credit was without consent of
Angelo and Andrei is a third person to the contract.
C. Andrei can collect from Angelo and has the right to foreclose the mortgage on the house and lot
if Angelo will fail to pay.
D. Gabriel seized to have a right over the loan and the mortgage

88. Which of the following can be extinguished by annulment of contract?

A. Ambo and Bosyo who are both unemancipated minors entered into a contract of sale in writing.
B. Ambo to defraud his creditor Bosyo, pretented to sell his house and lot to Kiko.
C. Ambo and Kiko entered into a written contract of sale involving 3 planets in the solar system
D. Ambo intimidated Bosyo to marry Ambo’s daughter, Diday.

89. In which of the following contracts of sale the provisions of Art. 1484 of the Civil Code (Recto Law)
apply?
A. Sale of a brand new e-jeepney on straight term.
B. Sale of residential house and lot on installment.
C. Sale of car on installment where the buyer constituted a mortgage on his truck.
D. Sale of an Apple Mac book pro laptop on installments where the buyer constituted a chattel
mortgage over it.

90. Before acceptance of an offer, the offeree suffered insanity. What will be the status of the contract?
A. Still valid
B. Unenforceable
C. Void or inexistent
D. Voidable because of incapacity to give consent

91. Which of the following is false?

A. An aleatory contract is where the fulfillment is dependent upon the chance, so the values may
vary because of the risk or chance.
B. A gratuitous contract is where one party receives no valuable consideration and the cause is
the liberality of the benefactor is
C. Generally speaking, a written document is not a requisite for the perfection of a contract
D. Conception of a contract is when the contract is executed

92. Mando Rucot stole the gold bracelet of Boy Golden worth P500k.Mando subsequently sold the same
to Manda Raya who had knowledge about the circumstances that happened between Mando and
Boy. Manda thereafter, immediately sold the same bracelet to Dina Tuto, the latter was bereft of any
knowledge during the sale about the fact that the bracelet was stolen from Boy by Mando. Dina later
pledged the bracelet to secure a loan she acquired from the pawnshop owned by May Malasakit.
When Dina failed to pay the loan, the bracelet was sold in a public auction to Manda Raya. Boy
Golden proceeded against Manda to recover the bracelet.

Who has the better right over the bracelet?

CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 13

A. Boy Golden
B. Manda Raya
C. Dina Tuto
D. May Malasakit

93. There shall be no reformation of contract in the following cases except:

A. When the real agreement is void.
B. Simple donation intervivos with no condition being imposed.
C. A contract of mortgage fraudulently made as a contract of sale.
D. A contract of lease where consent is vitiated by fraud

94. Bobby obliged himself to give to Sofia his car on June 30, 2020. There was no delivery until July 10,
2020 when the garage of Bobby’s house collapsed due to a strong typhoon and the car was totally
destroyed. Is Bobby still liable?
A. No, even if Bobby was already in default, he could plead impossibility of performance.
B. Yes, the obligation to deliver the car is changed to pay the equivalent value because Bobby is in
legal delay.
C. No, because there was no demand by Sofia to deliver the car and the specific object was lost due
to fortuitous event. The obligation is extinguished.
D. Yes, because the contract is perfected.

95. Which of the following statements is false?

A. In a contract of sale on trial, approval or satisfaction, ownership shall not pass to the buyer
despite delivery of the goods.
B. The seller having voidable title to the thing sold can validly transfer title to his buyer, provided his
title has not been avoided at the time of the sale.
C. A stipulation exempting the seller from the obligation to answer for eviction is valid.
D. If the consideration of the contract consists partly in money and partly in another thing, it shall be
considered a barter if the value of the thing given as a part of the consideration exceeds the
amount of the money or its equivalent

96. Which of the following does not constitute a definite offer?

A. An offer made thru an agent
B. An offer thru letters and telegrams
C. An offer thru business advertisements or newspapers of things for sale
D. An offer thru telephone call

97. Ronald delivered his car to Paolo. Paolo in turn gave Ronald P1m. No written agreement was
signed by the parties. Which of the following is appropriate description of the contract?
A. Onerous, bilateral and principal
B. Bilateral, innominate and aleatory
C. Onerous, nominate, preparatory
D. Gratuitous, nominate and consensual

98. Under Article 1484 of the Civil Code (Recto Law), in case of sale of movables on installment basis,
which of the following is correct?
A. The seller can cancel the sale should the buyer fails to pay any of the installments
B. The seller can cancel the sale and forfeit the installments paid should the buyer fails to pay two
or more installments
C. The seller can recover deficiency if the proceeds of the public sale after availing the remedy of
foreclosure of the chattel mortgage executed over the thing sold will not be sufficient to pay the
total contract price.
D. The seller can sue for specific performance or to exact fulfillment should the buyer fail to pay
any of the installments

99. Danilo bought from X Duplex Homes Corp., a 1000 square-meter commercial lot located beside SM
Molino, Cavite, on which he intended to construct a commercial building for lease to future tenants.
The terms of the sale provided for the payment of the contract price of P12m with down payment of
P2mand balance of P10m payable in 50 equal monthly installments of P50k.
CRC-ACE/RFBT: FIRST PRE-BOARD EXAMS (OCT 2021 BATCH) PAGE 14

Danilo faulted in the payment of the succeeding installments. As a consequence, the sale was.
Danilo now wants to claim the return of the cash surrender value of the payments he had made
pursuant to the “Realty Installment Buyer Act” otherwise known as the Maceda Law.
In this case he is:

A. Entitled to a cash surrender value of 50% if he paid at least 2 years installment.

B. Entitled to a cash surrender value of P50% plus 5% for every year after the 5 th year.
C. Entitled to a maximum cash surrender value of 90% of under the Maceda Law.
D. Precluded from raising the provisions of Maceda Law.

100. John owned a rural lot with an area of 1,000 square meters. The lot is surrounded on its four sides as
follows: on the North, by the lot of James consisting of 1 hectare; on the East, by the lot of Andrew
consisting of 2,000 sqm; on the South, by the lot of Thomas consisting of 5 hectares; and on the
West, by the provincial highway. John sold his agricultural lot to Mark, who owns several hectares of
rural land in the area. In case all adjacent owners will exercise his legal redemption, who will be
preferred?
A. Andrew
B. James
C. Thomas
D. John