1. Which of the following reflects a correct legal precept? a. Private corporations under the Corporation Code are created by law. b. A private corporation may always be held civilly liable for negligent acts committed by its employees. c. The corporate obligations are, as a rule, not the obligations of the corporate officers as long as the absence of liability of the latter is reflected in the corporate by laws. d. Private corporations under the Corporation Code may either be de facto or de jure. 2. Which of the following is in conformity with both law and jurisprudence? a. The separate personality of a corporation may be disregarded when an incorporator dominates and controls the outstanding capital stock. b. Shareholders cannot maintain a suit in their own names to recover corporate property. c. A corporation does not fall within the constitutional protection against unreasonable searches and seizures. d. A corporation has a right against self-incrimination. 3. Ten persons, all Filipinos, and acting as incorporators, filed an application for the incorporation of XYZ Bank, Inc. Which of the following is correct? a. The incorporators are not disqualified by reason of their nationality. b. XYZ Bank, Inc. may issue no-par value shares as long as the consideration thereof is not less than P5.00. c. The incorporators must all be Philippine residents. d. None of the above. 4. When the articles of incorporation provide for non-voting shares, the holders of such shares shall nevertheless be entitled to vote on the following matters, except: a. Dissolution of the corporation. b. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of corporate property. Amendment of the articles of incorporation. c. Incurring, creating, increasing or assignment of bonded indebtedness. 5. ABC Corporation, a private corporation engaged in the business of importing used cars from Japan was issued a certificate of incorporation by virtue of R.A. 27890. Because of a failed business transaction, ABC Corporation sued Mr. X for a damage arising from the latter’s alleged breach of its contractual obligations.

a. Mr. X cannot allege “lack of legal capacity to sue’ of ABC Corporation in its motion to dismiss because it has a legal personality conferred by law. b. Mr. X cannot allege “lack of legal capacity” in its motion to dismiss because it is not allowed to attack the existence of the corporation collaterally. c. ABC Corporation is a de jure corporation and its existence can be attacked only through a quo warranto proceeding. d. Attacking the existence of ABC Corporation may be done through a motion to dismiss because its creation is void. 6. No 1 - Within five (5) years from issuance of its certificate of incorporation, the newlyformed corporation must formally organize and commence business operations. Failure to do so within such period is a ground for dissolution. No. 2 - Every member of the board of every corporation must own at least one (1) share of stock standing in his name in the books of the corporation. a. b. c. d. Both statements are false. Both statements are true. The first statement is true; the second is false. The second statement is true; the first is false.

7. A corporation was formed by fifteen (15) incorporators and its certificate of incorporation was duly issued. A year after its attainment of juridical personality, the stockholders, who are themselves the members of the board adopted a resolution, providing for the following (i) That all of the corporation’s issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (ii) That all of the issued stock of the corporation shall be subject to certain specified restrictions; and (iii) That the corporation shall not list in any stock exchange or make any public offering of any of its stocks of any class. a. The corporation is a close corporation because the resolution contains the elements of a close corporation; b. The corporation is de facto because although it has a certificate of incorporation, the provisions in the resolution should have been contained n the articles. c. The corporation is an open corporation. The corporation is a corporation by estoppel because although it operates as a corporation, it did not comply with certain legal requirements for the establishment of a close corporation. 8. Which of the following is correct? a. The secretary of a corporation must be a citizen of the Philippines and a resident of the Philippines. He must be also a member of the board. b. The members of the board are liable whenever they vote for unlawful acts. c. If there are only ten (1) directors elected although the articles of incorporation provide for fifteen (15) directors, the quorum in a board meeting is eight (8). d. A director may be removed by the vote of all the stockholders in any meeting. 9. Which of the following acts could be ratified by a vote representing at least 2/3 of the outstanding capital stock?

11. The acquisition must be for the sole purpose of acquiring shares in order to eliminate fractional shares. An attempt by a director to acquire or actual acquisition of any interest adverse to that of the corporation in respect of any matter reposed upon him in confidence. Only to the issuance of previously unissued portions of the outstanding capital stock. c. To all issues or dispositions of shares of any class other than redeemable or treasury shares. b.000 for 300 shares. Only to new issues of shares arising out of an increase of the capital stock.000. Dividends may be declared out of a reappraisal surplus or revaluation increment because they constitute profits. costs and other expenses amounted to P50. The total liability of X. 2 – A transfer of shares to a non-stockholder is binding to the corporation as long as the transfer is in a public document. The corporation must have unrestricted earnings in its books to cover the purchase of the shares except in the case of redeemable shares. 14. A bid of P40.000 for 504 shares.000 shares of stock in ABC He paid 50% of the subscription but such subscription was later on declared delinquent.000 for 500 shares. d. Which is the exception? a. Which bidder is considered the highest bidder in the delinquency sale? a. b. thereby acquiring profits which should belong to the corporation. A bid of P45. X subscribed to 1. All dividends are taxable as income of the stockholder. The acquisition must be for a legitimate purpose. c. No. 1 – Holders of delinquent shares are not entitled to dividends. a. Acts of directors or trustees who are guilty of gross negligence or bad faith in directing the affairs of the corporation. The pre-emptive right extends to the right to subscribe. . d. d. 10. To all issues of shares or dispositions of shares of any class. b. d. A bid of P50.000 for 900 shares. The corporation must have unrestricted earnings in its books to cover the purchase of shares. Dividends are profits but not all profits are dividends. Acts of directors constituting an approval of patently unlawful acts. 12. The declaration of any kind of dividend requires the assent of at least 2/3 of the outstanding capital stock. including the balance. A bid of P43. Which of the following is correct? a. Acquisition of a business opportunity which should belong to the corporation. d. b. c. accrued interest.a. The following are the requisites for the corporate power to acquire its own shares. c. No. 13. c. b.

B is an accommodation party. Which of the following is not a negotiation of a negotiable instrument? a. D issues a note payable to the order of P. 2 is true. A may negotiate to B by delivery alone. 20. 1 is false. c. it is payable to the order of the King of the Philippine Islands. d. indorsement and delivery of an instrument payable to the order of Jose. No. B indorses the notes to X. b. Delivery to the payee of an instrument payable to bearer Jose. Both statements are false. c. b. The instrument is payable to bearer if a. Delivery of an instrument payable to the order of Superman. it is indorsed to Jose in trust for my child. No. A may negotiate to B by indorsement completed by delivery. 19. Both statements are false. No. 17. An indorsement is restrictive if: a. X is a party accommodated. 2 is false. no.a. B to sign promissory notes of the borrowers as the lender/ payee. 2 is false. b. c. it is payable to cash. it is payable as in all of the above. c. Delivery to the payee of an instrument payable to bearer. 2 – A foreign corporation engaged in business in the Philippines may sue and be sued n the Philippines. it is indorsed to Jose or bearer. 1 – A foreign corporation intending to sue in Philippine courts must always have a license to engage in business n the Philippines. b. a. c. 2 is true. It is indorsed to the order of Jose. d. d. c. d. Both statements are true. a. 15. B is not a party to the note. it is indorsed to Jose. A is an assignee. No. d. b. b. c. it is payable to the order of cash. No. No. Both statements are true. B is not an accommodation party. 1 is true. X wants to lend money to third persons but asks his friend. B receives no consideration for lending his name. 18. P indorses the note thus: “To A. . No. Sgd P”. d. b. but X is. 16. No 1 is true. a. 1 is false. As payee. no.

a. 24.000.000 out of my money in your hands. c. Both are false. X indorses a note sans recourse and delivers it to B. c. . M Bank is liable to O Bank as an indorser. Which of the following statements is not legally true? a. If B cannot collect from the maker. 2 is false. d. No.Which is correct? a. 21. None of the above is conditional. No.d. If B cannot collect from the maker. I promise to pay Pedro Santos P50. Common carriers are required to cater to every member of the public. 23. O Bank is liable to Drawer for reimbursement of the amount deducted from the account of Drawer. c. 25. To D. To D. 1 is true. Drawer issues a check to the order of P drawn against O Bank. No. The following instrument is negotiable assuming all other requisites are present: a.000 and deliver 10 sacks of rice. Sgd. No. I promise to pay O or bearer P50.The indorser warrants that the instrument is genuine only n certain cases. c. a. Pay to X or his order P50. F gets hold of the check. Sgd DR. c. b. All of the above. Pay to the order of P P50. 1 – The maker engages to pay according to the tenor of his acceptance.000 b. No. b. B cannot collect from X. If B cannot collect from the maker because of forgery of the latter’s signature. d. d. b. d. B can collect from X.000 and such other sums he may be entitled to. Both are true. indorses the check to himself by forging P’s signature. 2 is true. d. I promise to pay P or his order P30. Through illegal means. b.000 with interest. 2 .000 on the day his father passes away. non-negotiable? a. B can collect from X after giving him a notice of dishonor. I promise to pay to the order of P P50. A cannot negotiate the note any further. No. 22. 26. If B cannot collect from the maker because of forgery of the latter’s signature. P can still collect from Drawer. DR. Which among the following has a conditional promise hence. and deposits it in his account in M Bank which indorses the check for clearing with the words” All prior indorsements guaranteed”. 1 is false. B can never collect from X. Pay to the order of P P50.

None of the above. 29. d. The doctrine of last clear chance in case of collisions. begins upon the execution of a bill of lading. It was established that the ship was unseaworthy but would have successfully completed the voyage had it not been for the typhoon. 30. b. d. c.b. ends when the shipper has availed of his right of stoppage in transitu. a.00 only per luggage except if the shipper or passenger declares a higher value. when there is collision. If there are liabilities under the Workmen’s Compensation Law. c. c. Which stipulation is not void? a. To be a common carrier. The doctrine of inscrutable fault applies a. d. when there is no evidence as to which vessel is negligent. c. The ship owner may invoke fortuitous event as a defense. That the shipper will be liable only for P500. d. If there are expenses incurred when the vessel was repaired before its loss. c. b. Which could be availed of as a complete defense by a common carrier? a. 28. 31. d. Travel agencies as such are common carriers.00 per baggage. whenever a collision occurs. b. No one is liable. There is no exception. The doctrine of limited liability may not be availed of as a defense in the following cases. ends when the goods are lost in transit. Contributory negligence of the plaintiff. All forms of fortuitous events. That the shipper will be liable for P500. The vessel is insured. The common carrier’s duty to observe extraordinary diligence in the vigilance over the goods. ends when they are temporarily unloaded in transit. an entity must have a certificate of public convenience. b. 27. b. Which is the exception? a. b. . d. when a vessel makes a wrong maneuver in the second zone of collision. a. The ship agent may be held liable in case the ship owner is not found. A commercial vessel was sunk when it was overtaken by a typhoon in the ocean. c. It is possible for a customs broker to be a common carrier if it transports goods for a fee. The ship agent may not be held liable because he is acting for a disclosed principal. 32.

b. a. d. 36. During the effectivity of the insurance. c. 2 . d. there is always over insurance. d. X can recover because he is the one who is paying the premiums. the duty of extraordinary diligence may be lessened by stipulation. b. b. 38. he sold the house to Y without a corresponding change in the policy but X continued to pay the premiums. 34. The interest of a beneficiary continues even if his negligence caused the death of the insured. Recovery cannot be had because of a material concealment. X answered “NO”. a. a. Two years after the policy became effective. Which is false? a. . there is only a duty to observe ordinary diligence. the duty of extraordinary diligence of the carrier continues for a limited period. X died of a liver ailment. d. 35.00 per baggage whatever be the value declared. The shipper will be liable only for P500. All are void. if the insurer waives the premium in the meantime. b. if there is an agreement to the contrary. X can recover from the policy because there was no change in the policy. c. 1 . Recovery can be had. No. Terrorists cannot be insured because they are public enemies. In answer to a question in the insurance application on whether or not he had suffered from a heart ailment. The insurer may legally refuse to pay. except a. X insured his house against fire. none of the above. If a loss occurs. 33. d. Y can recover because he is the owner. Recovery may be had under the policy because the ailment concealed was not the cause of death. Recovery cannot be had because of material misrepresentation. if the insured deposits a check.c. c. The insured shall have the right to change his beneficiary as a rule. c. a. The insurer is entitled to the payment of premiums as soon as the thing insured is exposed to the peril insured against.When there is double insurance. b. A wife has an insurable interest in the life of her creditor. d. the duty of extraordinary diligence of the carrier ceases. 37. No. c.A contract of suretyship can never be an insurance contract. Both are true. When a passenger is carried gratuitously by a common carrier.

No. compel the claimants to interplead so the court could decide who has the right to the goods.b. deliver the cement to D because he is the depositor. Both are false. O came to the warehouse to claim the goods alleging that the cement deposited by D were merely stolen by the latter. As fiscal agent of the Philippine government. Both are true. V must prepare an affidavit listing his creditors. The mortgage is binding even to third persons because it is in a public instrument. he travels to Divisoria and sells all the contents of his truck. c. As official depositary of the Philippine government. V must notify his creditors before selling all the contents of the truck. 2 is true. As the watchdog of government funds. 2 is false. a. 1 is false. No. 2 – A deposit in a bank in foreign currency may be inquired into provided the depositor gives his consent. orally or in writing. Which among the following is not a function of the Bangko Sentral ng Pilipinas? a. No. B can foreclose the mortgage. No. 41. 39. c. d. 43. b. d. 1 is true. buys vegetable in bulk and after filing up his truck. M mortgaged his concrete house located in a rented lot to B. If the debt is not paid. a. a. deliver the cement to O because he is the owner. The latter issued a negotiable warehouse receipt to D. 40. d. c. No. c. No. c. At the same time D arrived in the warehouse claiming the cement and presenting the warehouse receipt. He goes to Baguio City. b. b. b. The mortgage is totally void because the house is a real property. If the debt is not paid. Both are false. 1 is true. V does not have to perform any of the above acts if his business is not registered. 2 is false. B cannot foreclose the mortgage. The deed of mortgage which is embodied in a public instrument is denominated as a chattel mortgage. c. d. As financial adviser of the Philippine government. 1 – A bank may be may lend to a single borrower more than fifteen (15%) of the bank’s unimpaired capital. no. b. V is a vegetable buyer. V does not have to perform any of the above because his sale is in the ordinary course of business. 1 is true. Confronted with conflicting claims of ownership. no. a. deliver the cement to D because he is the holder of the warehouse receipt. the amount of their credits and their due dates. d. 2 is false. D deposited 500 bags of cement in the warehouse of W. W should . . Five months after. d. No. No. 42.

Both are false. X may be sued for estafa. d. No. b. X imports goods from Japan through a letter of credit issued by National Bank. 2 is false 46. 1 . buying and selling foreign exchange and gold and silver bullion and lending money against the borrower’s security in property.000. They also have the same deposits with the same amount in Allied Bank Makati. X is only civilly liable to the bank. (a) Savings deposit – P300.000. X may be deprived of his import license . (c) Time deposit P350. He therefore. d. b.44. No. 2 is true. No. b. 47. Jose and his wife. a.The Ombudsman may inquire into the bank deposit of a public officer whose case is pending criminal investigation in the Ombudsman even if there is no actual case filed in court. a. 1 is true. Thrift bank. c. The trust fund doctrine.A writ of garnishment directed to a bank deposit is prohibited by law. discounting and negotiating promissory notes. opened and maintained the following accounts with Allied Bank Recto. c.000. receiving deposits. . Perla. Both are true. No. executed a trust receipt agreement with the bank. None of the above. a. Commercial bank. c. No. c. 45. two deposits. Universal bank. When the goods arrived in Manila. It is a bank which creates or accepts demand deposits subject to withdrawal by checks and primarily organized to carry on the business of accepting drafts and issuing letters of credit. The distribution of dividends from capital and the acquisition of corporate shares without corporate unrestricted retained earnings is not allowed by law because of: a. b. one deposit. X may be sued for theft by the bank. X got hold of the gods and sold the same but failed to remit to the bank the proceeds of the sale corresponding to his balance. d. (b) Demand deposit – P400. d. 2 . X had no money to pay for the balance of the importation. The corporate opportunity theory. If Allied bank becomes insolvent the Philippine Deposit Insurance Corporation will be bound to be liable to the spouses for its insurance liability equivalent to a. 48. 1 is false. No. b. The corporate entity doctrine. Rural bank.

is called: a.00 on the ground that the airline ticket stipulates that unless a higher value is declared. One of the following has no insurable interest in the life of Alberto: a. Mendoza did not pay the corresponding freight charges. PAL is willing to pay only P 4. there is an indication of a particular fund out of which reimbursement is to be made. b. Mendoza did not pay any freight. there is an indication of a particular account to be debited with the amount. c. valid because Mr. any claim for loss cannot exceed P 2. the instrument is payable out of a particular fund. A check upon which the holder’s signature must appear twice. b. c. d. However. not valid as it is not in accordance with law. one to be affixed by him at the time it is issued and the second or counter-signature. certified check stale check traveller’s check answer not given 51. The refusal of the airline company to pay the claim is: a.000. 53. d. The following shall produce the effect of payment of debts: . d. his wife his mother his mistress his daughter 52. Where the shareholder does not pay fifty percent of the value of the shares to be subscribed. six deposits. d. Mendoza claims P 50. valid because no declaration had been made on the actual value of the baggage and Mr. When can a corporation deny pre-emptive right to stockholders? a. answer not given. c.00 for the loss of both of his suitcases during his flight from Manila to Davao via Philippine Air Lines. Where a stockholder is delinquent in the payment of unpaid balance of his subscription. 49. None of the above 54. 50. d. otherwise it is incomplete. Where the articles of incorporation so provides.000. three deposits. a. b. b. not valid as it is contrary to public policy. Mr. Mr. An instrument is rendered non-negotiable if. c. Mendoza sues the airline company.000.00 for each baggage. d. despite the fact that the clerk had called his attention to the stipulation in the ticket. b. to be affixed by him before it is paid. Mendoza has not declared a greater value.c. c.

Delivery of check Tender of Central Bank notes Delivery of promissory note answer not given What are watered stocks? a. d. a. b. Ultra vires acts are acts of a corporation which are: a. When no payment is made within fifteen (15) days from the date as fixed in the subscription contract or in the call made by the Board of Directors. b. d. Exercised by the Board of Directors but not ratified by the stockholders. The Civil Code of the Philippines The Code of Commerce Salvage Law Public Service Act Carriage of Goods by Sea Act 60. d. b. When no payment is made within one (1) month from date as fixed in the contract or call. 57.a. e. None of the above 56. b. b. When no payment is made within two (2) months as fixed in the contract or call. c. c. None of the above 59. Why is a de facto corporation not considered a de jure corporation? a. Stocks issued for a consideration less than its par or issued value. Assignment Delivery of a bearer instrument Indorsement completed by delivery of an instrument payable to order Delivery of an instrument to the payee 58. 55. c. None of the above. . d. Because it failed to incorporate under existing statutory authority. Necessary and incidental to the exercise of the powers conferred upon the corporation. When does a stock become delinquent? a. c. c. c. b. This is not negotiation of a negotiable instrument. d. Not within the corporate powers conferred by the Code or articles of incorporation. Contracts for water transportation from foreign ports to Philippine ports are primarily governed by: a. Stocks issued for a consideration more than its par or issued value. Stocks issued for a consideration less than P10. d.

fully or partially paid. d. c. b. The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained from the outside. As used in the Corporation Code. 63. The corporation’s exercise of corporate powers is not recognized by the courts for reason of public policy. Under the provisions of the Carriage of Goods by Sea Act. Which of the following conforms with the requirements of the Corporation Code? . The corporation may sue but it cannot be sued. c. d. The total shares issued to subscribed or stock holders. b. 62. 65. A policy of insurance is contestable: a. Which is not a consequence of the corporation’s separate personality? a. c.b. d. d. c. The claim should be made within twenty four (24) hours from receipt when the damage or average could be ascertained only upon opening the package. Which one of the following is not a characteristic of a voting trust agreement? a. whether or not. b. d. if it is a life insurance policy within 2 years from its inception or last reinstatement on the ground of concealment or misrepresentation if all the above is present 66. b. A voting trust is created for the purpose of conferring upon the trustee the right to vote and other rights pertaining to the shares. A voting trust is irrevocable during the time stipulated. 64. b. as long as there is a binding subscription agreement. None of the above. The same as subscribed capital stock. The corporation may enter into contracts with another corporation. c. The corporation has a nationality or citizenship. All voting trust agreements shall not exceed five (5) years. “outstanding capital stock” means: a. c. claim has to be made for the damage sustained by goods. 61. d. It represents the paid up capital stock. The claim should be made within three (3) days from receipt when the damage or average could be ascertained from the outside. a. The corporation may acquire and dispose of properties. The claim should be made upon receipt when the damage or average could be ascertained from the outside. The same as authorized capital stock. Its corporate existence may be challenged in court by any taxpayer. except treasury shares. The stockholder remains the beneficial or equitable owner of the shares while the trustee is the legal owner.

cash dividends property dividends stock dividends script dividends 70. b. These requirements is a consequence of the. The following are the corporate officers of a corporation. 69. the right does not extend to certain specified issuances enumerated below. The trust fund doctrine. d. President Vice-President Treasurer Secretary 71. except: a. b. c. Shares to be issued in compliance with laws requiring stock offerings to the public. whose names are mentioned in the articles of incorporation majority of whom have signed the said articles. d. 68. The acquisition of shares and the declaration of cash dividends require that the corporation has unrestricted retained earnings. b. except in case of. The Board of Directors alone may declare the following type of dividends. d. The pre-emptive right if not denied by the corporation generally extends to all issues of shares in proportion to a stockholder’s shareholdings. d. Shares to be issued in good faith with the approval of the stockholders representing 2/3 of the outstanding capital stock in exchange for property needed for corporate purposes. Which is the exception? a.a. except: a. The law also requires that shares should not be issued below its par or issued value. The doctrine of general capacity. a. c. a. Even if not denied. c. must be a natural person and must own or subscribe to at least one share of stock. . The theory of separate personality. When the corporation allows the issuance of watered stocks. Incorporators are those who originally compose the corporation. An incorporator in a domestic corporation may be an alien and a nonresident. c. b. the Trust Fund Doctrine is violated. In the following cases. Every incorporator must be residents of the Philippines. The doctrine of limited capacity. b. Corporators are those who compose a corporation and is a term which includes stockholders. 67. Shares to be issued to incorporators. c. d. members and incorporators. Shares to be issued in payment of a previously contracted debt.

b. d. When the corporation releases or condones payment of the unpaid subscription. amend or repeal the by-laws. approval of the majority of the board and concurrence of the stockholders representing 2/3 of the outstanding capital stock is necessary in the exercise of the powers except: a.b. Investment of corporate funds in another business or purpose. None of the above. goodwill past services accounts receivables None of the above The following are remedies available to a corporation to enforce payment of stocks except: a. thus they are: . To declare stock dividends. except: a. friend b. Mandamus Extra-judicial sale Withholding of stock dividends Deduction from cash dividends 74. 77. d. Which of the following are prohibited considerations for the issuance of stocks? a. d. c. c. To increase or decrease capital stock. b. b. c. mining corporation stock exchange educational institution All of the above 76. spouse 78. A person has an insurable interest on the life of his: a. When there is payment of dividends without unrestricted retained earnings. d. Reduction of term. In the following instances. All provisions and stipulations in insurance contracts are prepared by the Insurer. grandfather c. To deny pre-emptive right. Extension of term Appointment of an executive committee. To adopt. c. 72. c. In the following instances. d. b. d. 73. c. 75. b. Which of the following cannot be a close corporation? a. appraisal right may be exercised.

by a friendly fire . the proceeds c.a. contracts of adhesion c. at the inception of the contract and at the time of the loss. a. b. The cause or consideration in insurance contracts is: a. b. gratuitous 80. the premium b. at the inception of the contract of insurance. The extent of insurable interest in non-life insurance depends on: a. failure to communicate c. the last reinstatement c. If a thing insured under a fire insurance policy is lost or destroyed by some other means other than fire. the policy remains compensable. Concealment in insurance is: a. hiding the truth b. the inception of the policy b. unilateral contracts 79. at the inception of the policy or from its last reinstatement 85. pro-forma contracts b. if the loss or destruction was a consequence of the effort to save the thing insured from being burned. the desire of the assured b. 84. Insurable interest on the thing insured and insurance interest on the policy in property insurance or non-life insurance must be reposed on one and the same person: a. if lost or destroyed because of an earthquake 83. telling lies 81. by a hostile fire b. A life insurance policy could no longer be questioned after two (2) years that the policy had been in force counted from: a. if lost or destroyed because of volcanic lava c. To be compensable. unlimited 82. the thing insured under a fire insurance policy must be lost or destroyed: a. the value of the thing to be insured c. at the tine of the loss c.

It is a legal scheme whereby a debtor. a. a. . gas. 88. d. Master’s Certificate Bill of Lading Affidavit of Desistance Maritime Protest Maritime Complaint This established rule provides that the liability of the ship owner or agent. 87. by voluntary scorching 86. It rests on fundamentally on the unfairness of a corporate officer or director taking advantage of a prospect for his own personal benefit when the interest of the corporation justly needs protection. attested by a proper judicial officer or a notary. water. c. transportation. telephone or telegraph service. a citizen of a country with whom the Philippines is at war. Corporate Entity Doctrine Corporate Interest Doctrine Business Judgment Rule Corporate Opportunity Doctrine. c. Error in Extremis Rule Doctrine of Declared Limitation in Maritime Law Real Nature of Maritime Law Doctrine of Presumed Negligence of Common Carriers 89. to the effect that damage suffered by the ship or her voyage was caused by storms or other perils of the sea. who is a fugitive and has a prize on his head b. 90. b. equipment and freight during the voyage. d. It is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity. b. c. Insolvency Proceedings Suspension of Payments Corporate Rehabilitation Voluntary Insolvency 91.c. without any negligence or misconduct on his part. c. a. a. This doctrine is a recognition by the courts that the fiduciary standards could not be upheld where the fiduciary is acting for two entities with competing interests. is limited to the vessel. may petition for more time within which to settle such obligations. d. an American or Canadian c. who has sufficient assets but who may be unable to meet his obligations as and when they fall due. b. b. arising from the operation of a ship. e. A public enemy who cannot be the object of a life insurance contract is one: a. It is a written statement by the master of vessel. d.

hence not capable of exclusive appropriation. Samsung invented a cellular phone that can also play digital music or MP3s. The debtor was blameless d. b. b. . Pinoy Ramen. a. Public Service Public Corporation Public Utility Commodities Trader As applied in Transportation Laws. or if it can be foreseen. including its remedies or securities. it must be impossible to avoid. namely. It applied for the issuance of letters patent. a. a cellular phone and a digital music player. Nissin is not guilty of trademark infringement because the trademark “Ang Sarap” is descriptive. Lucky Me registered its trademark. must be independent of human will. Nissin is not guilty of trademark infringement because its product. “Ang Sarap Pinoy Ramen”. d. or the failure of the debtor to comply with his obligations. The invention is patentable because it is a new product which is beneficial to the public. d. Pancit Palabok. 92. The invention is patentable because it combines existing elements. so that he who is substituted succeeds to the rights of the other in relation to a debt or claim. 95. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. e. The cause of the unforeseen and unexpected occurrence. It must be impossible to foresee the event which constitutes the case fortuito. 93. Subrogation 94. c. c. Substitution of Creditors c. Lucky Me sued for trademark infringement. a. c. The invention is not patentable because Samsung is a foreign corporation and it should file its application in its home country. Assignment of Rights b. c. It is the substitution of one person in the place of another with reference to lawful claim or right. b. b.a. Nissin is guilty of trademark infringement because it did not register its trademark “Ang Sarap Pinoy Ramen”. Nissin subsequently introduced its new product. “Ang Sarap Pancit Palabok” with the Intellectual Property Office. belongs to a different category from Lucky Me’s product. which of the following is a not an element of a fortuitous event? a. The invention is not patentable because it is a combination of old functions which does not produce a new result. and produces a new and useful result. the convenience of having two gadgets in one.

The chattel mortgage is extinguished as Magtanggol is a purchaser in good faith and for the value. Is the U. The word “Philippines” as part of a corporate name is reserved for government owned or controlled corporations. Center Book Store is the publisher of the book Legal Journal. 96. d. . b. College of Law. Allan sold the car to Magtanggol. 97. It is a rule that determines the nationality of a corporation on the basis of the place where the foreign corporation is incorporated or registered? b. The Library. Allan executed a promissory note and a chattel mortgage to secure payment thereof. Hence. Allan purchased 2005 Civic V-tech from Honda Cars Manila (HCM) for P950. each of whom has deposited some amount of money into the Foundation. No. in order to preserve the original book. Law Library liable for copyright infringement. No. No. reproduced one copy of the Journal for lending to the University’s students for room use. d. 99. The reproduction is consistent with fair use. b. The law only allows a library to photocopy a book if it is fragile or rare. Allan failed to pay four (4) installments. It applied with the Bangko Sentral for authority to organize itself into a bank. a purchaser in good faith and for value. Only the National Library is allowed to reproduce books and other works. It is composed of at least 100 natural persons. What is the so-called “Grandfather Rule” under the Corporation Code? a. c. Thereafter. The Bangko Sentral has the full discretion and expertise to grant authorities to register as banking institution. What would be the effect of the sale on the chattel mortgage contract? a. It qualifies as a bank because its funds are obtained from more than 20 persons. The chattel mortgage is extinguished because the SCM is stopped in not foreclosing the mortgage after Allan is in default in two installments. HCM can still foreclose the same.000. The Credit Foundation of the Philippines is a non-stock corporation. payable in twenty-four (24) monthly installments. Nissin is guilty of trademark infringement because the trademark “Ang Sarap” is fanciful and arbitrary. Yes. c. 98. Yes. Yes. It is a rule that determines the nationality of a corporation on the basis of the nationality of the majority of the stockholders. The copy of the Journal is marked “For Room Use Only” and is therefore not made available to the public outside of the Library. It donated one copy to the Library of the U. May the Foundation be granted the said authority? a. d. Only stock corporations can be organized as a bank. a. b. The chattel mortgage is not extinguished because the mortgagee’s right to foreclose the same is in rem.E. hence capable of exclusive appropriation. No. Yes. The chattel mortgage is not extinguished as it is an accessory contract. which handles deposit of funds from its members and lends the same funds to the general public. c.E.d.

e. It is a contract of indemnity It is a risk distributing device All of the above None of the above . It is a rule that determines the nationality of the corporation on the basis of the nationality of its officers and directors. c. The following are the outstanding characteristics of an insurance contract EXCEPT: a. All of the above e. It is an aleatory contract. d. d. b. None of the above 100.c.

C 89. D 42. B 31. C 51. D 27. C 97. D 38. B 15. D 76. C 68. D 62. A 80. B 82. D 35. D 19. C 93. B 59. A 39. A 7. B 91. B 33. D 72. C 34. C 53. B 79. D 43. A 44. D 90. B 17. B 81. C 30. D 4. C 78. B 54. D 36. C 21. C 57. C 56. D 41. C 20. D 24. B 3. B 55. D 6. D 28. D 67. B 100. D 50. C 52. A 58. C 87. C 85. C 14. A 84. B 77. A 16. B 23. D 96. A 74. B 49. C 18. B 66. B 13. D 25. C 69. D 61. C 47. D 73. C 94. D 37. D 75. C 65. B 71. D 45. D 22. D 40. A 46. D 10. D 88. C 92. D 2. A 60. E . A 86. B 26. B 12. D 29. C 11. B 99. B 64. D 32. A 83. A 48.ANSWER KEY IN COMMERCIAL LAW 1. D 63. A 8. C 70. D 5. D 95. C 9. D 98.

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