RFBT05 - First Pre-Board Examination

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com
iCARE
RFBT First Preboard
1. While traversing a narrow bridge, the public utility bus operated by JAC Liner and driven
by its employee-driver Mr. Dante collided with a private car owned and driven by Mr.
Oscar. Ms. Pia, a passenger of the bus and Ms. Trina, a pedestrian, were injured because
of the said accident. It was discovered by the investigator that both drivers were negligent.
Which of the following statements is correct?
a. If Ms. Trina will file a civil action for damages against JAC Liner, the proper source
of civil obligation is contract.
b. If Ms. Pia will file a civil action for damages against JAC Liner, the bus company
can set up a defense that it exercises diligence of good father of the family in the
hiring of its drivers.
c. If Ms. Pia will file a civil action for damages against Mr. Oscar, the passenger must
be able to prove that the driver is recklessly imprudent by proof beyond reasonable
doubt in order to recover civil damages.
d. Ms. Trina may file separate civil actions for damages against Mr. Dante based on
quasi-delict and crime, respectively.
2. On December 31, 2021, P authorized M to sell his cellphone at a price of P300. On January
1, 2022, M, a minor, orally sold the cellphone of his adult brother to I, an insane, during
the lucid interval of the latter at a price of P499. Delivery and payment will happen on
April 1, 2023. What is the status of the contract of sale?
a. It is voidable because the seller is a minor.
b. It is not binding because both contracting parties are incapacitated to give consent
to a contract.
c. It is unenforceable because it is covered by statute of fraud.
d. It is enforceable because the selling price is below P500.
3. A, B and C formed AB Partnership Ltd. A and B are general partners contributing P10,000
cash and industry respectively while C is a limited partner. Which of the following
statements is correct?
a. B is allowed to engage in a business of different kind of that of the partnership
without the permission of the partnership and the partners.
b. C is liable to make additional capital contribution to the partnership in order to
save the venture in case of imminent loss.
c. In case of bankruptcy of the partnership, the creditors of the partnership may go
after the separate assets of partners A, B and C.
d. C is allowed to engage in a business of same kind of that of the partnership without
the permission of the partnership and the partners.
4. Which of the following statements is correct?

I. In contract of sales, the subject matter must be existing at the time of perfection
of contract of sales for its validity.
II. In contract of sales, the subject matter be owned by the vendor at the time of
perfection of contract of sales for its validity.
III. In contract of sales, the subject matter must be determinate at the time of
perfection of contract of sales for its validity.
a. III only
b. I and III only
c. II and III only
d. I, II and III
1|P a g e RLACO/DSALES/NVALDERRAM A
No. 125 Brgy. San Sebastian
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Telephone : (043) 723 8412
5. D borrowed P3,000 cash from C. In order to secure the said loan, P pledged and delivered
his specific laptop to C. Afterwards, P sold the said laptop to T with the consent of C.
I. The contract of loan is extinguished by the sale of the laptop to T.
II. The contract of pledge is extinguished by the sale of the laptop to T.
III. T becomes the owner of the laptop.
IV. T may demand the possession of laptop from C.
a. III and IV only
b. III only
c. I, II and III only
d. II and IV only
6. D borrowed P10,000 cash from C. In order to secure the said loan, M mortgaged his
specific land to C. Which of the following statements is correct?
I. M is not allowed to sell the land to another person without the consent of C.
II. In case of default in the payment of the secured loan, C will become the automatic
owner of the mortgaged land.
III. In case of excess resulting from the foreclosure of the mortgaged land, the excess
will generally go to C unless granted to M.
IV. In case of deficiency resulting from the foreclosure of the mortgaged land, the
deficiency may be recovered by C from D in the absence of stipulation to the
contrary.
a. III and IV only
b. I and III only
c. IV only
d. II and III only
7. In which of the following accessory contracts may the owner of the foreclosed property
repurchase the said collateral from the highest bidder?
I. Contract of pledge
II. Contract of chattel mortgage
III. Contract of real estate mortgage
a. I and II only
b. I and III only
c. II and III only
d. III only
8. On January 1, 2022, S sold and delivered a specific lot with an area of 100 square meter
to B at a price of P1,000 per square meter. On July 1, 2022, B discovered that the actual
area is only 91 square meter. What is the remedy available to B?
a. Accept the 91 square meter and pay P91,000
b. Cancel the contract of sale
c. Either a or b
d. Neither a nor b
9. Which of the following contracts of sale is void?

I. Sale of EGM’s car by KRP, EGM’s agent, whose authority is not reduced into
writing.
II. Sale of EGM’s piece of land by KRP, EGM’s agent, whose authority is not
reduced into writing.
III. Sale of EGM’s car by KRP, a person stranger to EGM, without EGM’s consent
or authority.
IV. Sale of EGM’s piece of land by KRP, a person stranger to EGM, without EGM’s
consent or authority.
a. II and IV only
b. II only
c. III and IV
d. I and II only
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10. In a true pacto de retro sale, the title and ownership of the property sold are immediately
vested in the vendee a retro subject only to the resolutory condition of repurchase by the
vendor a retro within the stipulated period. This is known as
a. right of redemption mortgage.
b. conventional redemption.
c. legal redemption.
d. equity of redemption.
11. A warranty inherent in a contract of sale, whether or not mentioned in it, is known as the
a. warranty on quality.
b. warranty against hidden defects.
c. warranty against eviction.
d. warranty in merchantability.
12. X bought a land from Y, paying him cash. Since they were friends, they did not execute
any document of sale. After 7 years, the heirs of X asked Y to execute a deed of absolute
sale to formalize the verbal sale to their father. Unwilling to do so, X’s heirs filed an action
for specific performance against Y. Will their action prosper?
a. No, after more than 6 years, the action to enforce the verbal agreement has
already elapsed.
b. No, since the sale cannot under the Statute of Frauds be enforced.
c. Yes, since X bought the land and paid Y for it.
d. Yes, after full payment, the action became imprescriptible.
13. X sold Y 100 sacks of rice that Y was to pick up from X’s rice mill on a particular date. Y
did not, however, appear on the agreed date to take delivery of the rice. After one week,
X automatically rescinded the sale without notarial notice to Y. Is the rescission valid?
a. Yes, automatic rescission is allowed since, having the character of movables and
consumables, rice can easily deteriorate.
b. No, the buyer is entitled to a customary 30-day extension of his obligation to take
delivery of the goods.
c. No, since there was no express agreement regarding automatic rescission.
d. No, the seller should first determine that Y was not justified in failing to appear.
14. Acme Cannery produced sardines in cans known as "Sards." Mylene bought a can of Sards
from a store, ate it, and suffered from poisoning caused by a noxious substance found in
the sardines. Mylene filed a case for damages against Acme. Which of the following
defenses will hold?
a. The expiry date of the "Sards" was clearly printed on its can, still the store sold
and Mylene bought it.
b. Mylene must have detected the noxious substance in the sardines by smell, yet
she still ate it.
c. Acme had no transaction with Mylene; she bought the "Sards" from a store, not
directly from Acme.
d. Acme enjoys the presumption of safeness of its canning procedure and Mylene has
not overcome such presumption.
15. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one
of the five lots he owns, without specifying which lot it was, for the price of P1 million.
Later, the parties could not agree which of five lots he owned Lino undertook to sell to
Ramon. What is the standing of the contract?
a. Unenforceable
b. Voidable.
c. Rescissible.
d. Void.
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16. A buyer ordered 5,000 apples from the seller at P20 per apple. The seller delivered 6,000
apples. What are the rights and obligations of the buyer?
a. He can accept all 6,000 apples and pay the seller at P20 per apple.
b. He can accept all 6,000 apples and pay a lesser price for the 1,000 excess apples.
c. He can keep the 6,000 apples without paying for the 1,000 excess since the seller
delivered them anyway.
d. He can cancel the whole transaction since the seller violated the terms of their
agreement.
17. An agent, authorized by a special power of attorney to sell a land belonging to the principal
succeeded in selling the same to a buyer according to the instructions given the agent.
The agent executed the deed of absolute sale on behalf of his principal two days after the
principal died, an event that neither the agent nor the buyer knew at the time of the sale.
What is the standing of the sale?
a. Voidable.
b. Valid.
c. Void.
d. Unenforceable.
18. Which phrase most accurately completes the statement – If at the time the contract of
sale is perfected, the thing which is the object of the contract has been entirely lost:
a. the buyer bears the risk of loss.
b. the contract shall be without any effect.
c. the seller bears the risk of loss.
d. the buyer may withdraw from the contract.
19. Aligada orally offered to sell his two-hectare rice land to Balane for P 10Million. The offer
was orally accepted. By agreement, the land was to be delivered (through execution of a
notarized Deed of Sale) and the price was to be paid exactly one-month from their oral
agreement. Which statement is most accurate?
a. If Aligada refuses to deliver the land on the agreed date despite payment by
Balane, the latter may not successfully sue Aligada because the contract is oral.
b. If Aligada refused to deliver the land, Balane may successfully sue for fulfillment
of the obligation even if he has not tendered payment of the purchase price.
c. The contract between the parties is rescissible.
d. The contract between the parties is subject to ratification by the parties.
20. Michael Fermin, without the authority of Pascual Lacas, owner of a car, sold the same car
in the name of Mr. Lacas to Atty. Buko. The contract between Atty. Buko and Mr. Lacas is
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a. void because of the absence of consent from the owner, Mr. Lacas.
b. valid because all of the essential requisites of a contract are present.
c. unenforceable because Michael Fermin had no authority but he sold the car in the
name of Mr. Lacas, the owner.
d. rescissible because the contract caused lesion to Atty. Buko.
21. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing
the latter about it. In any event, the deed of sale expressly stipulated that X was not liable
for hidden defects. Does Y have the right to demand from X a reimbursement of what he
spent to repair the engine plus damages?
a. Yes. X is liable whether or not he was aware of the hidden defect.
b. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not
disclosing the fact to Y.
c. No, because Y is in estoppel, having changed engine without prior demand.
d. No, because Y waived the warranty against hidden defects.
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22. D orally borrowed P1,000 cash from C evidenced with conventional interest of 1% per
month. In order to secure the said loan, P orally pledged and delivered the cellphone of
D to C. Aside from that, G orally guaranteed the contract of loan of D to C. Among the
agreements entered into, which is valid?
a. Contract of loan and contract of guaranty
b. Contract of loan and contract of pledge
c. Contract of guaranty and agreement to pay interest
d. Contract of pledge and contract of guaranty
23. D borrowed P3,000 cash from C evidenced by a promissory note. In order to secure the
said loan, D pledged and delivered his specific watch to C. At the maturity date of the
loan, D defaulted in the payment of the loan. This prompted C to sell in public auction the
pledged watch which resulted to net proceeds of P2,500. Which contract is extinguished?
a. Contract of loan
b. Contract of pledge
c. Both a and b
d. Neither a nor b
24. Which of the following is not necessary for the perfection of the contract of sale?
a. Meeting of minds between the buyer and seller
b. Delivery of the subject matter
c. Determinate thing
d. Price certain in money or its equivalent
25. Which of the following is allowed to become the subject matter of contract of chattel
mortgage?
a. Condominium unit
b. Shares of stocks of real estate company
c. Agricultural land
d. House and lot
26. S obliged himself to deliver a specific laptop to B while B obliged himself to deliver a
specific cellphone worth P10,000 and P10,000 cash to S. What contract is entered by S
and B?
a. Contract of sale
b. Contract for a piece of work
c. Contract of barter
d. Contract of lease
27. T surreptitiously stole the brand new cellphone of O. Afterwards, T sold the said stolen
cellphone to MCStore, an authorized dealer of brand new phones. B purchased the said
cellphone from MCStore at a price of P50,000. Which of the following statements is
correct?
a. The contract of sale of cellphone from MCStore to B is void.
b. O may legally recover the cellphone from B with obligation to reimburse B in the
amount of P50,000.
c. B obtained a good title over the cellphone.
d. O may legally recover the cellphone from B without any obligation to reimburse B.
28. Which of the following contracts is generally perfected by mere consent?

a. Contract of sale of building
b. Contract of donation of car worth P100,000
c. Contract of antichresis involving an agricultural land
d. Contract of pledge of laptop
29. M, a minor, orally sold a specific cellphone to B, an insane during the lucid interval of the
latter at a price of P10,000. Arras money amounting to P500 was paid by B to M at the
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date of perfection of contract of sale. What is the legal remedy available to the proper
party?
a. Action for reformation of instrument
b. Action for annulment of contract
c. Action for declaration of nullity of contract
d. None of the above
30. What is the ground provided by law when the unpaid seller exercises right of stoppage in
transitu?
a. When the goods sold are perishable
b. When the contract of sale has no credit term
c. When the buyer becomes insolvent
d. When the credit term has expired
31. Which of the following statements concerning the vendor’s liability for hidden defect is
correct?
a. The vendor is liable only if the reason of the loss of the thing with hidden defect
is the hidden defect.
b. The vendor is liable only if he was aware of the hidden defect.
c. The vendor is not liable for the hidden defect if the loss is due to fortuitous event
or fault of the vendee.
d. The vendor is liable even he was not aware of the hidden defect.
32. A and B orally entered into a contract of sale of a specific authentic Coach bag at a price
of P10,000. A paid an arras money amounting to P500 at the time of constitution of the
contract. The parties agreed that the balance of the price will be paid after one month
while the said bag will delivered after one week. At the agreed date of delivery of the bag,
B delivered a counterfeited coach bag. What is the best legal remedy available to A?
a. File an action for damages for breach of contract of sale.
b. File an action for annulment of voidable contract of sale.
c. File an action for declaration of nullity of void contract of sale.
d. He has no action because the contract of sale is unenforceable.
33. On January 1, S delivered a specific laptop to B under a sale or return arrangement. S

gave B up to April 1 to return the specific laptop. On March 1, the specific laptop was
destroyed by fire without B’s fault. Which of the following is correct?
a. B is not required to pay the price of the laptop because the obligation is
extinguished by fortuitous event.
b. S is still the owner of the specific laptop since B has not yet signified his approval
or satisfaction of the said item.
c. B will become owner of the specific laptop only upon full payment of the price.
d. S can collect the price even if the loss is without B’s fault.
34. Minor, a ward, sold in writing the cellphone of his father, his legal guardian, to an insane,
during the latter’s lucid interval at a price of P10,000 when the cellphone’s book value is
still P15,000 resulting to lesion more than ¼ the value of the thing sold. What is the status
of the contract of sale?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
35. D borrowed P10,000 from C whereby D delivered and pledged his specific watch to C to
secure the payment of the loan. Aside from that, G guaranteed in writing the loan of D.
At the maturity date of the loan, C voluntarily returned the said watch to D. Which contract
is/are extinguished by the return of the watch?
a. Contract of pledge only
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b. Contract of pledge and contract of guaranty only

c. Contract of pledge and contract of loan only
d. Contract of pledge, contract of guaranty and contract of loan
36. S sold a counterfeited G-Shock watch to B who paid a faked money. Which of the following
a. Only S may file an action to collect a sum of money against B for the price of the
G-Shock.
b. Only B may file an action for exact fulfillment plus damages against S for breach
of implied warranty of authenticity.
c. Neither S nor B may file an action against each other.
d. Both S and B may file an action against each other.
37. S orally authorized B to sell his specific house at a price of P1,000,000. B orally sold the
said house to V in the name of S at a price of P1,500,000 when its cost to S is actually
P2,500,000, thereby, S suffered lesion by more than ¼ the value of the house. Payment
of the price and delivery of the house will happen after one month after the date of
agreement. What is the legal remedy available to the injured party?
a. File an action for annulment of contract
b. File an action for declaration of nullity of contract
c. File an action for rescission of contract
38. P orally authorized A to sell his land at a price of P100,000. A orally sold the land in P’s
name to B, an insane person, at a price of P20,000. Delivery and payment will happen
after one month. What proper legal remedy is applicable to the injured party?
a. Action for declaration of nullity
b. Action for annulment of contract
c. Action for rescission of contract
d. None because the contract is unenforceable
39. On January 1, 2001, S and B agreed in writing for the sale of specific TV at a price of
P10,000. The terms of the contract provide the delivery of the TV shall be made on
January 5, 2001 while the payment of the price is on a deferred term to be made on April
1, 2001. On January 5, 2001, S failed to deliver the TV set despite extrajudicial demand
for the delivery made by B. Which of the following is correct?
a. S may exercise his right of possessory lien because he has not yet received the
price.
b. S may exercise his right of stoppage in transitu because he is an unpaid seller.
c. B may file an action for specific performance with damages against S.
d. B may file an action for declaration of nullity of the contract of sale.
40. On January 1, S delivered a specific laptop to B under a sale or return arrangement. S

gave B up to April 1 to return the specific laptop. On March 1, the specific laptop was
a. B is not required to pay the price of the laptop because the obligation is
b. S is still the owner of the specific laptop since B has not yet signified his approval
c. B will become owner of the specific laptop only upon full payment of the price.
d. S can collect the price even if the loss is without B’s fault.
41. B borrowed P100,000 from L. In order to secure his obligation, B mortgaged his house
under contract of chattel mortgage. B defaulted in the payment of the principal obligation.
a. The contract of chattel mortgage is not binding because the subject matter of the
chattel mortgage must be personal property.
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b. The contract of loan is void.

c. Unsecured creditor of B cannot ask for declaration of nullity of the contract of
chattel mortgage because of the concept of relativity of contract.
d. L may still foreclose the chattel mortgage constituted over the house.
42. B borrowed P500,000 from L. In order to secure the said obligation, T mortgaged his land.
The contract of real estate mortgage provides that T is absolutely prohibited from selling
the mortgaged land to third person. L registered the deed of real estate mortgage in the
Registry of Deeds. Afterwards, T sold said mortgaged land to A. Which of the following
a. L may foreclose the land already owned by A in case of default by B in the principal
obligation.
b. The contract of sale of land from T to A is void because it is prohibited by the
terms of real estate mortgage.
c. The contract of real estate mortgage will not bind and affect A because of the
concept of relativity of contract.
d. The contract of real estate mortgage is void because B is not the owner of the
mortgaged land.
43. On January 1, 2001, S entered into a notarized contract to sell with A involving a specific
laptop without payment of price. On January 2, 2001, S orally entered into a contract of
sale with B involving again the same laptop. On January 3, 2001, S sold in written private
instrument the same laptop to C who fully paid the price but without physical delivery.
After discovery of the sale to C, B immediately obtained physical possession of the laptop
from S. Who has better right over the laptop?
a. A
b. B
c. C
d. S
44. If there are reasonable grounds to fear the destruction or impairment of the thing pledged
without the fault of the pledgee, what is the legal remedy available to the pledgor?
a. To ask that the thing pledged be judicially or extra-judicially deposited.
b. To ask that the thing be deposited with a third person.
c. To demand the return of the thing pledged, upon offering another thing in pledge,
provided the latter is of the same kind and quality.
d. To demand the extinguishment of the contract of pledge.
45. Mr. A orally sold his specific land to Mr. B at a selling price of P499. The delivery and
payment will be made after two months. On the agreed date of performance of contract,
Mr A did not perform his obligation. What is the remedy available to Mr. B?
a. File an action for specific performance
b. He has no remedy.
c. File an action to compel Mr. A to execute a written contract
d. File an action for declaration of nullity
46. A has an outstanding loans payable of P10,000,000 with a term of 15 years. The loan is
secured by a real estate mortgage on the land of A. After 1 year, A and the bank agreed
to reduce the principal amount of the loan to P5M and the term is shortened to 5 years.
a. No obligation remains to exist because of novation.
b. The contract of real estate mortgage is extinguished.
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c. There is no novation because novation can never be presumed.

d. The novation is void because there is no delivery of sum of money.
47. M issued a promissory note to P which states “I promise to pay P P10,000.” The promissory
note was issued in exchange for a bag of marijuana. P subsequently indorsed and
delivered the said promissory note to A. Which of the following statements is correct?
a. A can validly collect from M if A acquired the promissory note in good faith and for
value.
b. A can go after P only if M will dishonor the note and only if a corresponding notice
of dishonor will be given to P.
c. A cannot validly collect from M if A has knowledge of the infirmity in the instrument
thus making A a holder not in due course.
d. A can validly collect from P because the latter violated his warranty.
48. On January 1, 2001, A obliged to sell a specific dog to B if the latter will pass the CPA
board exam. The specific gave birth to a puppy on March 1, 2001. B passed the CPA board
exam on October 1, 2001. Meanwhile, A sold and delivered the same dog to C on July 1,
2001. Which of the following statements is correct?
a. B obtains real right over the specific dog on October 1, 2001.
b. B obtains personal right over the puppy on July 1, 2001.
c. C shall be entitled to the puppy.
d. C has better right against B over the specific dog.
49. Which of the following instances extinguishes the contract of pledge but not the secured
contract of loan?
a. Appropriation by the pledgee of the thing pledged at the first default by the debtor
b. Oral renunciation by the pledgee of the contract of pledge
c. Return by the pledgee of the thing pledged to the pledgor
d. Sale of the thing pledged at public auction at net proceeds less than the amount
of secured loan
50. A borrowed P100,000 from B. In order to secure this contract of loan, A mortgaged his
car to B under a contract of chattel mortgage. The borrower defaulted in the payment of
the loan at the maturity date. This resulted to the extrajudicial foreclosure of the
mortgaged car. Which of the following statements concerning the net proceeds is correct?
a. B can never recover the deficiency from the foreclosure despite any stipulation for
recovery.
b. B may recover the deficiency unless there is stipulation to the contrary.
c. A will never be entitled to the excess despite any stipulation to that effect.
d. B is entitled to the excess unless there is stipulation to the contrary.
51. A borrowed P100,000 from B. In order to secure this contract of loan, A mortgaged his
car to B under a contract of chattel mortgage. The borrower defaulted in the payment of
the loan at the maturity date. This resulted to the extrajudicial foreclosure of the
mortgaged car. Which of the following statements concerning the net proceeds is correct?
a. B can never recover the deficiency from the foreclosure despite any stipulation for
recovery.
b. B may recover the deficiency unless there is stipulation to the contrary.
c. A will never be entitled to the excess despite any stipulation to that effect.
d. B is entitled to the excess unless there is stipulation to the contrary.
52. Which of the following instances is not an indicator that a contract purporting to be an
absolute sale or pacto de retro sale shall be presumed to be an equitable mortgage?
a. When the vendor remains in possession as lessee
b. When the vendee binds himself to pay the real property taxes on the thing sold
c. When the period for the exercise of the right of repurchase is extended
d. When the purchaser retains for himself part of the purchase price
53. S and B entered into a contract of sale of goods to be delivered to B through a common
carrier. B has sent post-dated check to S as payment for the price. S delivered the goods
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to the common carrier for transmission to B. Before the arrival at the destination of the
goods and before S the encashment of the post-dated check, B becomes insolvent. What
right is available to S?
a. Right of possessory lien
b. Right of resale
c. Right of stoppage in transitu
d. Right to rescission
54. AB Ltd. Partnership is composed of A as general partner and B and C as limited partners.
C was appointed as managing partner. The partnership is engaged in laundry business. A
customer delivered a GUCCI T-shirt for laundry to the partnership for its service. The said
shirt was received and cleaned by managing partner C. While the shirt is still in the
possession of the partnership, A obtained it without the knowledge of managing partner
C. A used it to attend an event but unfortunately the shirt was accidentally damaged. The
value of said shirt is P30,000. Assuming the partnership became insolvent, how much may
the owner of the said GUCCI T-shirt collect from partner B assuming partner A became
insolvent?
a. P10,000
b. P15,000
c. P30,000
d. None
55. A, B and C established a general partnership for the operation of a restaurant. A and B
are capitalist partners while C is an industrial partner. The capital contribution of partners
A and B are P1,000 cash and P2,000 worth of inventories. The partnership agreement is
entered orally. The partners agreed that A is exempted from liability of partnership to third
persons. They also agreed that B is excluded from the share in partnership loss. Which of
the following is valid and binding among the partners?
I. Oral contract of partnership
II. Stipulation exempting A from liability of partnership to third persons.
III. Stipulation excluding B from the share in partnership loss.
a. I, II and III
b. I and II
c. II and III
d. I only
56. A, B and C established ABC partnership by capital contribution amounting to P10,000;

P30,000 and P60,000, respectively. The articles of co-partnership provides that liabilities
to third person will be divided equally among the partners. Aside prom that, they agreed
that partnership loss shall be divided in the ratio of 50:15:35 respectively for A, B and C.
During the first year of operation, the partnership reported profit amounting to P90,000.
How much is the share of partner A to the said profit?
a. P9,000
b. P45,000
c. P30,000
d. It cannot be determined without additional facts.
57. Who among the following is allowed to participate in the management of partnership
business?
I. Nominal Partner
II. Assignee of Limited Partner
III. Quasi-Partner
a. I only
b. III only
c. II and III only
d. None of them
10 | P a g e RLACO/DSALES/NVALDERRAM A
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58. Which of the following rights is available to a partner in a partnership?

I. Right of succession
II. Right to assign his capital interest without the consent of other partner
III. Right to sell his share in a co-owned partnership property
a. II and III only
b. I only
c. II only
59. Xon, Yon and Zon established XYZ Ltd. Partnership. Xon and Yon are general partners
while Zon is a limited partner. After several years of operation, the partnership became
bankrupt. Unpaid liabilities amount to P30,000 remained after the exhaustion of
partnership assets. Assuming Xon is personally insolvent, how much may the unpaid
creditors of the partnership collect from the separate assets of partner Yon?
a. P10,000
b. P15,000
c. P20,000
d. P30,000
60. A and B are the incumbent partners of AB Partnership. Afterwards, they admitted C to the
partnership. Before the admission of C, the partnership liabilities amounted to P60,000.
After several years of operation, the partnership became bankrupt and unpaid liabilities
of the partnership in the amount of P180,000 including the said P60,000 liabilities above
remained unpaid after the exhaustion of partnership assets. How much may the unpaid
creditors of the partnership collect from the separate assets of partner B?
a. P30,000
b. P70,000
c. P60,000
d. P40,000
61. A, B, C, D, E and F formed ABCDEF Partnership with capital contribution amounting to

P1M, P2M, P3M, P4M, P5M and P20M respectively. The partners do not have an agreement
as to the management of the business. Partner A, B and C want SM Appliance Store as its
supplier while Partners D and E want Abenson. The controlling partner F wants Wilcon
Depot as its supplier. Which shall be considered as the supplier of ABCDEF Partnership?
a. SM Appliance Store
b. Abenson
c. Wilcon Depot
d. The court will determine the supplier.
62. A, B, C and D formed a partnership with A and B contributing P10,000 cash and P20,000
cash, respectively, while C and D contributing services. C and D are appointed as
managing partners. C and D hired E as chief accountant who was opposed by A and B. A
and C hired F as internal auditor who was opposed by B and D. Who between E and F
is/are validly hired in the ABCD Partnership?
a. E
b. F
c. Both E and F
d. Neither E nor B
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63. ABC Partnership is engaged in the buy and sell of fruits and vegetables with A appointed
as managing partner. Which of the following acts by a partner is not binding against ABC
Partnership?
I. Sale by Partner B of fruits at a minimal gross profit to a customer who does not
have knowledge of B’s lack of authority.
II. Sale by Partner A of vegetables at break-even to a customer who acted in good
faith.
III. Acquisition by Partner C of a brand new delivery truck at a huge historical cost
which is unanimously approved by all the partners.
IV. Acquisition by Partner B of an old delivery truck below its book value without the
knowledge and consent by the other partners but the seller acted in good faith
because he doesn’t have knowledge of B’s lack of authority.
a. III and IV only
b. I and II only
c. IV only
64. Which of the following acts of a partner requires unanimous consent by all the partners?
a. Remission of a claim of the partnership
b. Availing of volume discount and purchase discount from a major supplier
c. Payment and release of salaries of employees
d. Issuance of check for payment of utilities payable of the business
65. In the absence of provision in the articles of co-partnership, who among the following
partners may be removed by the injured partners for engaging in another business without
the consent of other partners?
a. Limited partner
b. Substituted limited partner
c. Both a and b
d. Neither a nor b
66. ABC General Partnership was formed by A, B, C, D and E contributed P1M; P2M; P3M;
P4M; and services respectively. It was agreed by all the partners that D is exempted from
liability to third persons. ABC Partnership became bankrupt and it reported total assets
amounting to P20M and total liabilities to third persons amounting to P50M. How much
may the creditors validly collect from the separate assets of partner A, B, C, D and E,
respectively, assuming all them are personally solvent?
a. P6M; P6M; P6M; P6M; P6M
b. P7.5M; P7.5M; P7.5M; P7.5M; P0
c. P10M; P10M; P10M; P0; P0
d. P3M; P6M; P9M; P12M; P0
67. Using the same data in preceding number, ultimately, how much will be shouldered by
the partners after reimbursement among themselves?
a. P6M; P6M; P6M; P6M; P6M
b. P7.5M; P7.5M; P7.5M; P7.5M; P0
c. P10M; P10M; P10M; P0; P0
d. P5M; P10M; P15M; P0M; P0
68. In the absence of provision in the articles of co-partnership, who among the following
partners is exempted from making additional capital contribution to the partnership to
save it from imminent loss?
a. Managing partner
b. Liquidating partner
c. Both a and b
d. Neither a nor b
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69. D has matured obligations to ABC Partnership and to A, the managing partner of ABC
Partnership, in the amount of P300,000 and P200,000, respectively. D paid P50,000 cash
to A who issued the receipt of ABC Partnership for the whole P50,000. How shall such
P50,000 payment be applied to the above mentioned debts?
a. P50,000 to ABC Partnership only
b. P50,000 to managing partner A’s claim only
c. P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d. P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim
70. Using the same data in number 16, but assuming A issued his own personal receipt for
the whole P50,000, how shall such P50,000 payment be applied to the debts?
a. P50,000 to ABC Partnership’s claim only
b. P50,000 to managing partner A’s claim only
c. P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d. P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim
71. D has matured obligations to ABC Partnership and to B, a nonmanaging partner of ABC
Partnership, in the amount of P300,000 and P200,000, respectively. D paid P50,000 cash
to B who issued his own personal receipt for the whole P50,000. How shall such P50,000
payment be applied to the above mentioned debts?
a. P50,000 to ABC Partnership’s claim only
b. P50,000 to nonmanaging partner B’s claim only
c. P30,000 to ABC Partnership’s claim and P20,000 to nonmanaging partner B’s claim
d. P20,000 to ABC Partnership’s claim and P30,000 to nonmanaging partner B’s claim
72. Which of the following is not an automatic ground for dissolution of a general partnership?
a. Loss before delivery of property where the partner contributed only its use
b. Loss after delivery of property where the partner contributed only its use
c. Loss before delivery of specific thing, which a partner has promised to contribute
to the partnership
d. Loss after delivery of specific thing, which a partner has promised to contribute to
the partnership
73. Which of the following is not an automatic ground for dissolution of a general partnership?
a. Death of any partner
b. Insolvency of any partner
c. Insanity of any partner
d. Civil interdiction of any partner
74. Which of the following claims shall be settled last in a general partnership?
a. Income tax payable of the partnership
b. Advances by a partner
c. Capital contribution of a partner
d. Salary of a partner
75. In the absence of agreement to the contrary, what form of return of capital contribution
must be received by a limited partner?
a. Cash
b. Receivable
c. Intangible asset
d. The same asset he actually contributed
76. Which of the following may not be contributed by a pure limited partner?
a. Cash
b. Personal property
c. Real property
d. Service
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77. AB Ltd. is a limited partnership composing of A and B as general partners and C as a

limited partner. The said partnership become bankrupt and reported total assets
amounting to P100,000 and total liabilities to third persons amounting to P130,000. How
much may the creditors of the partnership validly collect from partners A, B and C,
respectively, assuming they are all personally solvent?
a. P10,000; P10,000; P10,000
b. P15;000; P15,000; P0
c. P30,000 or P30,000 or P30,000
d. P30,000 or P30,000 or P0
78. ABC Ltd. is a limited partnership composing of A, B, D, E as general partners and C, F and
G as limited partners. F is appointed as managing partner while D is an industrial partner.
All partners agreed that E is exempted from liability to third persons. The said partnership
become bankrupt and reported total assets amounting to P100,000 and total liabilities to
third persons amounting to P142,000. How much may the creditors of the partnership
validly collect from partners A, B, C, D, E, F and G, respectively, assuming they are all
personally solvent?
a. P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b. P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c. P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d. P21,000; P21,000; P0; P0; P0; P0; P0
79. Using the same data in preceding number, how much is ultimately shouldered by the
partners from the said unpaid obligations of the partnership after the reimbursement
among themselves?
a. P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b. P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c. P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d. P21,000; P21,000; P0; P0; P0; P0; P0
80. What is the nature of limited partner’s interest?
a. Assignable
b. Waivable
c. Non-transferable
d. Purely personal
81. Who among the following partners is prohibited from transacting business with the
partnership?
I. Industrial partner
II. Managing partner
III. Limited partner
IV. Capitalist partner
a. I only
b. II and II only
c. III only
82. Ana, Bea and Carla formed a limited partnership with a name “ABC Ltd”. Ana and Bea are
general partners while Carla is a limited partner. Ana was appointed as a managing
partner. Unfortunately, ABC Ltd. Partnership became bankrupt due to Ana’s
mismanagement. Who will be personally liable up to the extent of his separate assets as
to the unpaid obligations of ABC Ltd. Partnership?
a. Ana only
b. Ana and Bea only
c. Ana, Bea and Carla
d. None of them
83. Which of the following is a prima facie evidence of being a partner?

a. Receipt by a co-owner of profit share in a co-owned property
b. Receipt by a co-possessor of profit share in a co-possessed property
c. Receipt by a joint operator of share in gross returns in a jointly controlled asset
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84. Which type of partner is present in every type of partnership?

a. Capitalist partner
b. General partner
c. Both a and b
d. Neither a nor b
85. In the absence of partnership agreement, what is the commencement of the juridical
personality of the partnership?
a. On the date of actual contribution by the partners
b. On the date of issuance by Securities and Exchange Commission (SEC) of
Certificate of Registration
c. On the date of receipt by the partnership of Certificate of Registration from
Securities and Exchange Commission (SEC)
d. On the date of execution of Articles of Co-Partnership by the partners
86. Which of the following rights is available to an assignee of an interest in the partnership?
a. Right to participate in the management of the partnership
b. Right to vote in the decision-making of the partnership
c. Right to share in net income of his assignor
d. Right to inspect the books of partnership at anytime
87. A, B and C orally formed ABC Partnership with original capital contribution of P3,000 cash,
car worth P100,000 and services, respectively on the date of oral agreement.
Unfortunately, the articles of co-partnership was not registered before the Securities and
Exchange Commission. What is the status of the contract of partnership?
a. Valid and binding
b. Unenforceable
c. Void
d. Rescissible
88. On January 1, 2020, D was admitted to ABC Partnership. It was agreed that D must invest
P1,000,000 cash on July 1, 2020. D failed to make the agreed capital contribution to ABC
Partnership. This prompted ABC Partnership to send a demand letter on August 1, 2020.
D ignored the demand letter which prompted ABC Partnership to file the necessary civil
action on October 1, 2020. When will the legal interest start to accrue on D’s defaulted
capital contribution?
a. January 1, 2020
b. July 1, 2020
c. August 1, 2020
d. October 1, 2020
89. Which of the following stipulations is valid in a contract of partnership?

a. Stipulation excluding an industrial partner from share in partnership profit
b. Stipulation excluding a capitalist partner from share in partnership profit
c. Stipulation excluding an industrial partner from share in partnership loss
d. Stipulation excluding a capitalist partner from share in partnership loss
90. What is the proper classification of an industrial partner?

a. Limited partner
b. General partner
c. Managing partner
d. Nominal partner
91. As a general rule, how is a contract of partnership perfected?

a. By mere consent
b. By delivery of capital contribution to the partnership
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c. By registration to Securities and Exchange Commission

d. By operation of law
92. Which receipt by a person of share of the profits of a business will be considered prima
facie evidence that such person is a partner in the business?
a. As wages of an employee
b. As rent to a landlord
c. As an annuity to a widow of a deceased partner
d. As a return on investment
93. A, B, C and D are general partners of ABCD Partnership with contribution of P6M, P2M,
P1M and service respectively. Due to Covid-19 Pandemic, ABCD Partnership decided to
liquidate its business. At the time of liquidation, ABCD Partnership reported total assets at
P50M with total liabilities to creditors amounting to P40M. How much will be received by
Partner D at the time of liquidation?
a. P1M
b. P2M
c. P6M
d. P2.5M
94. Using the same data in preceding number except that the total liabilities to creditors of
the ABCD partnership are reported at P49.1M, how much will be received by partner A at
the time of liquidation?
a. P100,000
b. P200,000
c. P600,000
d. P300,000
95. Which of the following may be validly assigned by a partner despite the absence of
approval by all the partners?
a. Partner’s capital interest in the partnership
b. Partner’s right as a co-owner of partnership’s assets
c. Partner’s interest in specific partnership property
96. If not time is specified for the return of capital contribution of a limited partner, what is
the grace period granted by law to the limited partnership to return such contribution?
a. One (1) month
b. Two (2) months
c. Three (3) months
d. Six (6) months
97. What is the prescriptive period available to an injured party to question a manifestly unjust
distribution of partnership profit (loss) designated by a third person selected by the
partners?
a. Within one (1) month from his knowledge but before he executes it
b. Within two (2) months from his knowledge but before he executes it
c. Within three (3) months from his knowledge but before he executes it
d. Within six (6) months from his knowledge but before he executes it
98. In case an unlawful partnership is dissolved by judicial decree, to whom shall the profits
of the partnership go?
a. Innocent partner
b. Injured partner
c. Both a and b
d. Neither a nor b
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99. Which of the following shall not form part of common fund in universal partnership of all
present property?
a. Property belonging to the partners at the time of the constitution or perfection of
the partnership.
b. Profits that may be acquired from the present property.
c. Property acquired by each partner after the formation of partnership by
inheritance, legacy or donation if stipulated.
d. Profits and fruits from property acquired by each partner, even those from property
acquired by inheritance, legacy or donation after the formation of the partnership
if stipulated.
100. A, B and C are partners in ABC General Partnership with A appointed as managing
partner. On June 30, 2020, B died with the knowledge of A and C. On July 1, 2020, A
borrowed P3M cash in behalf of the partnership from BDO. How much may the BDO collect
from the separate assets of partner A, estate of partner B and partner C, respectively,
assuming the partnership assets are fully exhausted?
a. P1M and P1M and P1M
b. P3M and P0 and P0
c. P3M or P3M or P3M
d. P1.5M and P0 and P1.5M
101. Using the same data from preceding number, how much will be ultimately
shouldered by partner A, estate of partner B and partner C after reimbursement among
the partners as regards to the claim of BDO?
102. A, B and C are partners in ABC General Partnership with A appointed as managing
partner. On June 30, 2020, B died without the knowledge of A and C. On July 1, 2020,A
borrowed P3M cash in behalf of the partnership from BDO. How much may the BDO collect
from the separate assets of partner A, estate of partner B and partner C, respectively,
assuming the partnership assets are fully exhausted?
103. Using the same data from preceding number, how much will be ultimately
shouldered by partner A, estate of partner B and partner C after reimbursement among
the partners as regards to the claim of BDO?
104. In unilateral obligation subject to a resolutory condition, who shall be entitled to

the fruits of the determinate thing during the pendency of the resolutory condition?
A. Creditor minus the expenses incurred for the preservation and gathering of the
fruits
B. Debtor minus the expenses incurred for the preservation and gathering of the
fruits
C. State
D. Third person
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105. M issued a promissory note payable to P in the amount of P10,000. P generally

indorsed and delivered the note to A. A assigned and delivered the note to M. What mode
of extinguishing obligation is present in this case?
A. Compensation
B. Novation
C. Remission
D. Merger
106. A, a minor, B and C wrote a promissory note which states "I promise to pay D and
E P60,000." If B becomes insolvent at the maturity date of the note, how much may D
validly collect from C?
A. P20,000
B. P40,000
C. P30,000
D. P10,000
107. Which of the following instances will make an obligation with a suspensive period
immediately due and demandable?
A. When after the obligation has been contracted, the debtor becomes insolvent but
he gives a guaranty or security for the debt.
B. When through a fortuitous event the guaranties of securities after their
establishment were impaired, unless the debtor immediately gives new one equally
satisfactory.
C. When the debtor attempts to abscond.
D. Any of the above.
108. D is alternatively liable to deliver a specific cellphone or a specific laptop or a

specific tablet to C. Who has the right of choice?
A. Always D
B. Always C
C. Generally C in the absence of stipulation to the contrary
D. Generally D in the absence of stipulation to the contrary
109. D, a resident of Makati, has the obligation to deliver a car with plate number CPA-
123 to C, a resident of Taguig. At the time of constitution of the obligation, such car is
located in Pasay but at the time of supposed delivery, the car can be found in Caloocan.
Where shall the car be delivered by D?
A. Makati
B. Taguig
C. Pasay
D. Caloocan
110. D has three matured obligations to C consisting of (1) accounts payable amounting
to P100,000; (2) 10% notes payable amounting to P400,000 inclusive of P100,000 accrued
interest; and (3) P500,000 mortgage payable secured by a real estate mortgage on D’s
land. D paid P950,000 to C as payment for the obligations. How much shall be applied by
C to the accounts payable?
A. P100,000
B. P50,000
C. P95,000
D. None
111. Christian Ronaldo and SM Event Center entered into a contract wherein Christiano
Ronaldo will conduct a personal and customized football clinic to SM’s shoppers. At the
date of the scheduled event, Christiano Ronaldo failed to event. What legal remedy is
available to SM Event Center?
A. File an action for damages against Christian Ronaldo for breach of contract
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B. File an action for specific performance with damages against Christiano Ronaldo
C. Ask a Filipino football player to conduct the football clinic at the expense of
Christiano Ronaldo
D. Any of the above
112. Which of the following contracts is consensual?

A. Contract of guaranty wherein principal of the secured contract of loan is at least
P500
B. Contract of donation of condominium unit with fair market value of less than
P5,000
C. Contract of antichresis covering a land with fair market value of at least P500
D. Contract of chattel mortgage covering a car with fair market value of at least P500
113. W and H are legally married under property regime of absolute community. W
orally sold his specific laptop to H at a price of P500 when its book value is still P800 after
H pointed a gun to W. Delivery and payment will happen after two years. What is the
status of contract of sale of the specific laptop between W and H?
A. Unenforceable
B. Void
C. Voidable
D. Rescissible
114. S and B entered into a written contract for the sale of authentic IphoneX. At the
date of delivery of the phone, S delivered a counterfeited replica of IphoneX. What is the
appropriate legal remedy to be availed by B?
A. Action for annulment of contract of sale
B. Action for declaration of nullity of contract of sale
C. Action for damages for breach of contract of sale
D. Action for reformation of instrument evidencing the contract of sale
115. Which of the following innominate contracts means "Facio ut des"?

A. I give that you may give.
B. I give that you may do.
C. I do that you may give.
D. I do that you may do.
116. In case of doubt in the incidental circumstances of contract of lease, what is the
rule to be applied in the interpretation of the ambiguity in this contract?
A. It shall be resolved in favor of least transmission of rights.
B. It shall be resolved in favor of greatest transmission of rights.
C. It shall be resolved in favor of least reciprocity of interests.
D. It shall be resolved in favor of greatest reciprocity of interests.
117. Which of the following contracts is not rescissible?

A. Those which are entered into by guardians whenever the wards they represent
suffer lesion by more than ¼ the value of the things which are the object thereo.f
B. Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them.
C. Alienations by onerous title when made by persons against whom some judgment
has been rendered in any instance or some writ of attachment has been issued.
D. Those agreed upon in representation of absentees, if the latter suffer by ¼ of the
value of the things which are the object thereof
118. Which of the following contracts is subject to declaration of nullity?

A. Those which are absolutely simulated
B. Those entered into when one of the contracting parties is incapacitated
C. Those oral executory contracts that are covered by Statute of Frauds
D. Those undertaken in fraud of creditors
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119. Which of the following is a proper ground for reformation of instrument?

A. When a mutual mistake of the parties results to the failure of the instrument to
disclose their real agreement
B. When the consent of one of the parties in the contract is vitiated by fraud, undue
influence, mistake, intimidation or violence
C. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the
minds of the parties
D. When the consent of the contracting parties is absolutely simulated
120. A, B and C wrote a promissory note which states “We promise to pay P30,000 to
D”. A paid P30,000 to D. If B becomes insolvent, how much may A legally collect from C?
A. P15,000
B. P10,000
C. P20,000
D. P30,000
121. Which of the following executory contracts is covered by statute of fraud?

A. Contract of guaranty
B. Contract of real estate mortgage involving real property
C. Contract for a piece of work of furniture at a price of P500 or more
D. Contract of lease of car for a period longer than one year
122. Which of the following statements concerning the rules on interpretation of

ambiguity in a contract is correct?
A. If some stipulation of any contract should admit several meanings, it shall be
understood as bearing that import which is most adequate to render it ineffectual.
B. The interpretation of obscure words or stipulations in a contract shall favor the
party who caused the obscurity.
C. If the doubts are cast upon the principal object of the contract in such a way that
it cannot be known what may have been the intention or will of the parties, the
contract is voidable.
D. The usage or custom of the place shall be borne in mind in the interpretation of
the ambiguities of a contract, and shall fill the omissions of stipulations which are
ordinarily established.
123. S sold a car at an installment price of P100,000 payable in equal monthly

installment of P10,000 per month to B. In order to secure the payment of the price, B
mortgaged back the said car to S under chattel mortgage. The contract of chattel
mortgage provides that S can recover the deficiency in case the foreclosure sale results
to deficiency. Aside from that, the said contract provides that in case of cancellation, any
installments received by S will be forfeited. After payment of seven monthly installments,
B defaulted on the remaining three installments. Which of the following is correct?
A. If a writ of attachment will be issued which will result in the sale in public auction
of the car, S cannot recover the deficiency in public sale in the absence of
stipulation for recovery.
B. If the contract of sale will be cancelled, S will no longer have any recourse against
B.
C. If the chattel mortgage on the car will be foreclosed, S can recover the deficiency
in public sale because there is agreement to that effect.
D. After filing an action for exact fulfillment, S may still foreclose the chattel mortgage
constituted on the car.
124. A has P10,000 written obligation to B which becomes due and demandable on
December 31, 2001. It is already 2012 but A has not yet fulfilled his obligation. On January
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1, 2013, C paid the P10,000 obligation of A to B. Which of the following statements is

correct?
A. C can judicially compel A to reimburse but only in so far as the payment is
beneficial.
B. C can judicially recover the amount he has paid from B on the basis of the concept
of unjust enrichment.
C. If A voluntarily reimburses C, the former can no longer recover it from the latter.
D. It is the civil obligation of A to reimburse C on the ground of equity and natural
justice.
125. Which of the following obligations is not allowed to be legally compensated?

A. Obligation arising from civil penalty in obligation with a penal clause
B. Obligation arising from contract of savings deposit with a bank
C. Obligation arising from contract of mutuum
D. Obligation arising from contract of commodatum
126. On January 1, 2001, A obliged to deliver a specific dog to B if the latter will pass
the CPA board exam. The specific gave birth to a puppy on March 1, 2001. B passed the
CPA board exam on October 1, 2001. Meanwhile, A sold and delivered the same dog to C
on July 1, 2001. Which of the following statements is correct?
A. B obtains real right over the specific dog on October 1, 2001.
B. B obtains personal right over the puppy on January 1, 2001.
C. C shall be entitled to the puppy.
D. C has better right against B over the specific dog.
127. How is a contract to constitute a deposit perfected?

A. By mere consent
B. By delivery of the subject matter of the contract
C. By execution of the formality required by law
D. By performance of the contract
128. A borrowed P10,000 from B with C pledging his cellphone and D serving as
guarantor to secure the fulfillment of the obligation. Without knowledge of A, C pays the
obligation of A to B at the maturity date. Which is true?
A. C may ask for reimbursement from A only in so far as the payment is beneficial.
B. C can directly go after D even without demanding payment from A.
C. A may refuse to reimburse C on the ground that the payment is without his
knowledge.
D. C may go after D in case A becomes insolvent.
129. A is indebted in the amount of P5,000 to B. At the maturity date of the loan, A
pays P5,000 to C. After such payment, B assigned the promissory note to C. Which is
true?
A. The payment is not valid because it is made to a third person.
B. The payment is valid only if A can prove that such payment redounded to the
benefit of B.
C. The payment is valid even if without proving that such payment redounded to the
benefit of B.
D. The payment is valid only if such payment is with the consent of B.
130. When shall the debtor not be liable for the loss of the object of the obligation?
A. When the loss occurs after the debtor incurs delay.
B. When the sole, immediate and proximate cause of the loss is a fortuitous event.
C. When the debtor committed contributory negligence.
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D. When the debtor promises that same object to two or more persons.
131. A, B and C promise to deliver a specific car to D with a value of P300,000. At the
maturity date of the obligation, A and B are willing to deliver the car to D but C refused
to perform the prestation. What is the remedy available to D?
A. File an action for specific performance against C
B. File an action for exact fulfilment against A, B and C
C. File an action for indemnification for losses and damages against A, B and C
D. File an action for declaration of nullity of contract
132. A is alternatively liable to deliver a specific cellphone, a specific laptop, or a specific

tablet to B. The maturity date of the obligation is December 1, 2000. On October 1, 2000,
A destroyed the tablet while on November 1, 2000, the rebels forcibly stolen the cellphone.
On December 10, 2000, a lightning destroyed the laptop. Which is correct?
A. A is not liable for damages.
B. A is liable for damages by reason of his act of destroying the tablet.
C. A is liable for damages by reason of delay.
D. A is liable equivalent to the value of the tablet.
133. A has an outstanding loans payable of P10,000,000 with a term of 15 years. The
loan is secured by a real estate mortgage on the land of A. After 1 year, A and the bank
agreed to reduce the principal amount of the loan to P5M and the term is shortened to 5
years. Which of the following statements is correct?
A. No obligation remains to exist because of novation.
B. The contract of real estate mortgage is extinguished.
C. There is no novation because novation can never be presumed.
D. The novation is void because there is no delivery of sum of money.
134. A has an outstanding debt of P1,000,000 to B. At maturity date, A tenders payment
in the form manager’s check with the amount of P1,000,000 payable to the order of B.
A. If B will refuse the payment, A may consign the manager’s check to the court.
B. A may compel B to accept the manager’s check because it is good as cash.
C. The obligation is not yet extinguished.
D. Upon acceptance by B of manager’s check, the obligation is extinguished.
135. Mr. A orally sold his specific land to Mr. B at a selling price of P499. The delivery
and payment will be made after two months. On the agreed date of performance of
contract, Mr A did not perform his obligation. What is the remedy available to Mr. B?
A. File an action for specific performance
B. He has no remedy.
C. File an action to compel Mr. A to execute a written contract
D. File an action for declaration of nullity
136. Which of the following statements concerning the vendor’s liability for hidden
defect is correct?
A. The vendor is liable only if the reason of the loss of the thing with hidden defect
is the hidden defect.
B. The vendor is liable only if he was aware of the hidden defect.
C. The vendor is not liable for the hidden defect if the loss is due to fortuitous event
or fault of the vendee.
D. The vendor is liable even he was not aware of the hidden defect.
137. If there are reasonable grounds to fear the destruction or impairment of the thing
pledged without the fault of the pledgee, what is the legal remedy available to the pledgor?
A. To ask that the thing pledged be judicially or extra-judicially deposited.
B. To ask that the thing be deposited with a third person.
C. To demand the return of the thing pledged, upon offering another thing in pledge,
provided the latter is of the same kind and quality.
D. To demand the extinguishment of the contract of pledge.
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138. On January 1, 2001, S entered into a notarized contract to sell with A involving a
specific laptop without payment of price. On January 2, 2001, S orally entered into a
contract of sale with B involving again the same laptop. On January 3, 2001, S sold in
written private instrument the same laptop to C who fully paid the price but without
physical delivery. After discovery of the sale to C, B immediately obtained physical
possession of the laptop from S. Who has better right over the laptop?
A. A
B. B
C. C
D. S
139. What is the prescriptive period for filing an action for breach of contract of sale of
an immovable by reason of shortage in the area delivered?
A. 6 months from the date of delivery
B. 3 days from the date of delivery
C. 12 months from the date of delivery
D. 40 days from the date of delivery
140. B borrowed P500,000 from L. In order to secure the said obligation, T mortgaged
his land. The contract of real estate mortgage provides that T is absolutely prohibited from
selling the mortgaged land to third person. L registered the deed of real estate mortgage
in the Registry of Deeds. Afterwards, T sold said mortgaged land to A. Which of the
following statements is correct?
A. L may foreclose the land already owned by A in case of default by B in the principal
obligation.
B. The contract of sale of land from T to A is null and void because it is prohibited by
the terms of real estate mortgage.
C. The contract of real estate mortgage will not bind and affect A because of the
concept of relativity of contract.
D. The contract of real estate mortgage is null and void because B is not the owner
of the mortgaged land.
141. B borrowed P100,000 from L. In order to secure his obligation, B mortgaged his
house under contract of chattel mortgage. B defaulted in the payment of the principal
obligation. Which of the following statements is correct?
A. The contract of chattel mortgage is null and void because the subject matter of
the chattel mortgage must be personal property.
B. The contract of loan is null and void.
C. Unsecured creditor of B cannot ask for declaration of nullity of the contract of
chattel mortgage because of the concept of relativity of contract.
D. L may still foreclose the chattel mortgage constituted over the house.
142. Which of the following statements concerning obligation is correct?

A. Obligations arising from law are presumed.
B. In an obligation to deliver an indeterminate thing, the obligor shall exercise
diligence of a good father of a family in the preservation of the thing.
C. In an obligation to deliver a determinate thing, the obligee is entitled to the fruits
of the determinate thing from the time of constitution of the obligation.
D. Obligations arising from contracts have the force of law between contracting
parties.
143. A and B orally entered into a contract of sale of a specific authentic Coach bag at
a price of P10,000. A paid an arras money at the time of constitution of the contract. The
parties agreed that the balance of the price will be paid after one month while the said
bag will delivered after one week. At the agreed date of delivery of the bag, B delivered
a counterfeited coach bag. What is the best legal remedy available to A?
A. File an action for damages for breach of contract of sale.
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Telephone : (043) 723 8412
B. File an action for annulment of voidable contract of sale.

C. File an action for declaration of nullity of void contract of sale.
D. He has no action because the contract of sale is unenforceable.
144. A stole the specific cellphone of B. Afterwards, A sold at a price of P10,000 the
said specific cellphone to C who acquired the said item in good faith and for value. Which
of the following statements is correct?
A. B may recover the said cellphone from C even without reimbursing C.
B. B may recover the said cellphone from C but with obligation to reimburse P10,000.
C. C obtains good title over the cellphone because he is a purchaser for value and in
good faith.
D. C obtains a voidable title over the cellphone which is valid and binding until
annulled.
145. On January 1, S delivered a specific laptop to B under a sale or return arrangement.

S gave B up to April 1 to return the specific laptop. On March 1, the specific laptop was
A. B is not required to pay the price of the laptop because the obligation is
B. S is still the owner of the specific laptop since B has not yet signified his approval
C. B will become owner of the specific laptop only upon full payment of the price.
D. S can collect the price even if the loss is without B’s fault.
146. D is indebted in the amount of P100,000 to C as evidenced by a written contract

of loan. The contract provides for 6% interest per annum and 10% penalty in case of
breach of contract. At the date of maturity of the loan, D defaulted. Which of the following
A. C may only demand payment of the 6% interest in addition to the principal because
the law presumes that the interest already covers the penalty.
B. C may only demand payment of the 10% penalty in addition to the principal
because in obligation with penal clause, the penalty substitutes for the interest
and damages.
C. C may demand payment of both 6% interest and 10% penalty in addition to the
principal only if he can prove that D acted fraudulently.
D. C may validly demand payment of both 6% interest and 10% penalty in addition
to the principal.
147. On January 1, 2000, D borrowed P10,000 cash from C with maturity date on June
30, 2000. On July 1, 2000, C accepted D’s cellphone with a book value of P6,000 and fair
market value of P7,000 as payment for the obligation. Afterwards, C sold the cellphone
for P9,000. Which of the following statements is correct?
A. The obligation is extinguished by novation.
B. The obligation is extinguished but only up to the net proceeds of P9,000 only.
C. This special mode of payment is governed by Law on Sales.
D. C may still collect the deficiency of P3,000 from D.
148. Which of the following statements concerning the characteristics of different types
of contract is correct?
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A. Contract of loan is a consensual contract because it is perfected by mere consent

on the amount of consumable thing to be delivered.
B. Contract of sales is a real contract because the delivery of the determinate thing
is necessary for the transfer of ownership to the buyer.
C. Contract of real estate mortgage is a principal contract because it is extinguished
when the contract of loan is settled.
D. Contract of agency is a preparatory contract because it is a means by which other
contracts may be entered into.
149. Which of the following statements concerning an obligation is correct?

A. Indivisibility of an obligation implies solidarity.
B. When all the requisites of legal compensation are present, both debts to the
concurrent amount are extinguished from the moment the parties obtain
knowledge of the compensation.
C. The debtor of a thing may compel the creditor to receive a different prestation if
the latter is of the same value or more valuable than that which is due.
D. Whenever a period is designated in an obligation, the law prima facie presumes
that the period is for the benefit of both debtor and creditor.
150. P orally authorized A to sell his land at a price of P100,000. A orally sold the land
in P’s name to B, an insane person, at a price of P20,000. Delivery and payment will
happen after one month. What proper legal remedy is applicable to the injured party?
A. Action for declaration of nullity
B. Action for annulment of contract
C. Action for rescission of contract
D. None because the contract is unenforceable
-END-

RFBT05 - First Pre-Board Examination

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RFBT05 - First Pre-Board Examination

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No. 125 Brgy.

4. Which of the following statements is correct?

9. Which of the following contracts of sale is void?

28. Which of the following contracts is generally perfected by mere consent?

33. On January 1, S delivered a specific laptop to B under a sale or return arrangement. S

b. Contract of pledge and contract of guaranty only

40. On January 1, S delivered a specific laptop to B under a sale or return arrangement. S

b. The contract of loan is void.

c. There is no novation because novation can never be presumed.

56. A, B and C established ABC partnership by capital contribution amounting to P10,000;

58. Which of the following rights is available to a partner in a partnership?

61. A, B, C, D, E and F formed ABCDEF Partnership with capital contribution amounting to

77. AB Ltd. is a limited partnership composing of A and B as general partners and C as a

83. Which of the following is a prima facie evidence of being a partner?

d. None of the above

84. Which type of partner is present in every type of partnership?

89. Which of the following stipulations is valid in a contract of partnership?

90. What is the proper classification of an industrial partner?

91. As a general rule, how is a contract of partnership perfected?

c. By registration to Securities and Exchange Commission

104. In unilateral obligation subject to a resolutory condition, who shall be entitled to

105. M issued a promissory note payable to P in the amount of P10,000. P generally

108. D is alternatively liable to deliver a specific cellphone or a specific laptop or a

112. Which of the following contracts is consensual?

115. Which of the following innominate contracts means "Facio ut des"?

117. Which of the following contracts is not rescissible?

118. Which of the following contracts is subject to declaration of nullity?

119. Which of the following is a proper ground for reformation of instrument?

121. Which of the following executory contracts is covered by statute of fraud?

122. Which of the following statements concerning the rules on interpretation of

123. S sold a car at an installment price of P100,000 payable in equal monthly

1, 2013, C paid the P10,000 obligation of A to B. Which of the following statements is

125. Which of the following obligations is not allowed to be legally compensated?

127. How is a contract to constitute a deposit perfected?

132. A is alternatively liable to deliver a specific cellphone, a specific laptop, or a specific

142. Which of the following statements concerning obligation is correct?

B. File an action for annulment of voidable contract of sale.

145. On January 1, S delivered a specific laptop to B under a sale or return arrangement.

146. D is indebted in the amount of P100,000 to C as evidenced by a written contract

A. Contract of loan is a consensual contract because it is perfected by mere consent

149. Which of the following statements concerning an obligation is correct?

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