law
c. the Securities and Exchange Commission;
"Securities" issued to the public are required by law to be registered with - a. the Securities and Exchange Commission and the Philippine Stock Exchange. b. the Philippine Stock Exchange; c. the Securities and Exchange Commission; d. the Bangko Sentral ng Pilipinas;
c. The effective date of the merger is always the date of the approval of the Articles of Merger by the SEC
. XXX Corporation and YYY Corporation have agreed to be merged into one corporation. To facilitate the merger, both corporations agreed that the merger be made effective on May 31,2012. The Securities and Exchange Commission (SEC) approved the Articles of Merger on June 30, 2012. Which statement is most accurate? a. The stockholders and the Board of Directors can set the effective date of the merger anytime after the approval of the SEC. b. The effective date of the merger is May 31, 2012, the date stipulated by the parties as the effective date. c. The effective date of the merger is always the date of the approval of the Articles of Merger by the SEC. d. The effective date of the merger would be the date approved by the Board of Directors and the stockholders.
c. He can accept all 6,000 apples and pay the seller at P20 per apple.
1. 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 cancel the whole transaction since the seller violated the terms of their agreement. b. He can keep the 6,000 apples without paying for the 1,000 excess since the seller delivered them anyway. c. He can accept all 6,000 apples and pay the seller at P20 per apple. d. He can accept all 6,000 apples and pay a lesser price for the 1,000 excess apples.
b. The contract between the parties is subject to ratification by the parties.
1. Aligada orally offered to sell his two-hectare rice land to Balane for P 10 Million. 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. The contract between the parties is rescissible. b. The contract between the parties is subject to ratification by the parties. c. 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. d. 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.
d. Valid.
1. 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. Void. b. Unenforceable. c. Voidable. d. Valid.
a. P 200.000.00
1. Buko, Fermin and Toti are solidary debtors under a loan obligation of P 300,000.00 which has fallen due. The creditor has, however, condoned Fermin's entire share in the debt. Since Toti has become insolvent, the creditor makes a demand on Buko to pay the debt. How much, if any, may Buko be compelled to pay? a. P 200.000.00 b. P 150,000.00 c. P 300,000.00 d. P 100,000.00
b. No, because the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously.
1. Buko, Fermin and Toti bound themselves solidarily to pay Ayee the sum of P 10,000.00. When the obligation became due and demandable, Ayee sued Buko for the payment of the P 10,000.00. Buko moved to dismiss on the ground that there was failure to implead Fermin and Toti who are indispensable parties. Will the motion to dismiss prosper? Why? a. No, because a motion to dismiss is a prohibited pleading. b. No, because the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. c. Yes, because Fermin and Toti should have been impleaded as their obligation is solidary. d. Yes, because Fermin and Toti should also pay their share of the obligation.
b. No, Jose's refusal is not justified. The expenses he incurred are useful for the preservation of the thing loaned. It is Jose's obligation to shoulder these useful expenses.
1. Cruz lent Jose his car until Jose finished his CPA exams. Soon after Cruz delivered the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred costs of P8,000. Seeing the car's peeling and faded paint, Jose also had the car repainted for P10,000. After the CPA exams, Cruz asked for the return of his car. Jose said he would return it as soon as Cruz has reimbursed him for the car maintenance and repainting costs of P 18,000. Is Jose's refusal justified? a. Yes, Jose's refusal is justified. He is obliged to pay for all the ordinary and extraordinary expenses, but subject to reimbursement from Cruz. b. No, Jose's refusal is not justified. The expenses he incurred are useful for the preservation of the thing loaned. It is Jose's obligation to shoulder these useful expenses. c. No, Jose's refusal is not justified. In this kind of contract, Jose is obliged to pay for all the expenses incurred for the preservation of the thing loaned. d. Yes, Jose's refusal is justified. The principle of unjust enrichment warrants the reimbursement of Jose's expenses.
d. Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie without Cruz's consent, Jose must bear the consequent loss of the car.
1. Cruz lent Jose his car until Jose finished his CPA exams. Soon after Cruz delivered the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred costs of P8,000. Seeing the car's peeling and faded paint, Jose also had the car repainted for P10,000. During the CPA exam month, Jose lent the car to his girlfriend, Jolie, who parked the car at the Mall of Asia's open parking lot, with the ignition key inside the car. Car thieves broke into and took the car. Is Jose liable to Cruz for the loss of the car due to Jolie's negligence? a. No, Jose is not liable to Cruz. In the absence of any prohibition, Jose could lend the car to Jolie. Since the loss was due to force majeure, neither Jose nor Jolie is liable. b. Yes, Jose is liable to Cruz. The contract between them is personal in nature. Jose can neither lend nor lease the car to a third person. c. No, Jose is not liable to Cruz as the loss was not due to his fault or negligence. d. Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie without Cruz's consent, Jose must bear the consequent loss of the car.
b. No, not yet. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.
1. Dina bought a car from Jai and delivered a check in payment of the same. Has Dina paid the obligation? Why? a. It depends. If the check is a manager's check or cashier's check it will produce the effect of payment. If it's an ordinary check, no payment. b. No, not yet. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired. c. Yes, because a check is a valid legal tender of payment. d. Yes, because a check is as good as cash.
b. Quasi-contract
1. It is a juridical relation arising from lawful, voluntary and unilateral acts based on the principle that no one should unjustly enrich himself at the expense of another. a. Delict b. Quasi-contract c. Quasi-delict d. Contract
b. Yes, since the donation is subject to a resolutory condition which was not fulfilled.
1. Rex, a philanthropist, donated a valuable lot to the municipality on the condition that it will build a public school on such lot within 2 years from its acceptance of the donation. The municipality properly accepted the donation but did not yet build the public school after 2 years. Can Rex revoke the donation? a. No, but Rex is entitled to recover the value of the land from the municipality. b. Yes, since the donation is subject to a resolutory condition which was not fulfilled. c. No, the transfer of ownership has been completed. d. Yes, the donation is not deemed made until the suspensive condition has been fulfilled.
a. The original debtor is freed of liability since novation took place and this relieved him of his obligation.
1. Upon the proposal of a third person, a new debtor substituted the original debtor without the latter's consent. The creditor accepted the substitution. Later, however, the new debtor became insolvent and defaulted in his obligation. What is the effect of the new debtor's default upon the original debtor? a. The original debtor is freed of liability since novation took place and this relieved him of his obligation. b. The original debtor remains liable since he gave no consent to the substitution. c. The original debtor shall pay or perform 50% of the obligation to avoid unjust enrichment on his part. d. The original debtor shall pay or perform the obligation with recourse to the new debtor.
c. Yes, automatic rescission is allowed since, having the character of movables and consumables, rice can easily deteriorate.
1. 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. No, the seller should first determine that Y was not justified in failing to appear. b. No, the buyer is entitled to a customary 30-day extension of his obligation to take delivery of the goods. c. Yes, automatic rescission is allowed since, having the character of movables and consumables, rice can easily deteriorate. d. No, since there was no express agreement regarding automatic rescission.
b. No, since F can treat U as maker due to the minority of T, the drawee.
A bill of exchange has T for its drawee, U as drawer, and F as holder. When F went to T for presentment, F learned that T is only 15 years old. F wants to recover from U but the latter insists that a notice of dishonor must first be made, the instrument being a bill of exchange. Is he correct? a. Yes, since a notice of dishonor is essential to charging the drawer. b. No, since F can treat U as maker due to the minority of T, the drawee. c. Yes, since in a bill of exchange, notice of dishonor is at all times required. d. No, since T can waive the requirement of notice of dishonor.
b. Banks;
A corporation generally can issue both par value stock and no par value stock. These are all fixed in the Articles of Incorporation of the corporation. Which of the following corporations may not be allowed to issue no par value shares? a. Insurance companies; b. Banks; c. Trust companies; d. All of the above.
c. from the date the SEC issues a certificate of incorporation under its official seal
A corporation organized under the Corporation Code commences to have corporate existence and juridical personality and is deemed incorporated: (1%) a. thirty (30) days after the date the application for incorporation is filed with the SEC b. thirty (30) days after the datethe SEC issues a certificate of incorporation under its official seal c. from the date the SEC issues a certificate of incorporation under its official seal d. from the date the application for incorporation is filed with the Securities and Exchange Commission (SEC)
a. mistake
A debtor is liable for damages in case of delay if he is guilty of any of the following, except: a. mistake b. default (mora) c. breach through contravention of the tenor thereof d. negligence (culpa)
d. The thing to be delivered is generic.
A debtor may still be held liable for loss or damages even if it was caused by a fortuitous event in any of the following instances, except: a. The debtor contributed to the loss. b. The debtor is guilty of dolo, malice or bad faith, has promised the same thing to two or more persons who do not have the same interest. c. The creditor is guilty of fraud, negligence or delay or if he contravened the tenor of the obligation. d. The thing to be delivered is generic.
d. fraud in inducement.
A holder in due course holds the instrument free from any defect of title of prior parties and free from defenses available to prior parties among themselves. An example of such a defense is - a. alteration. b. duress amounting to forgery. c. fraud in esse contractus. d. fraud in inducement.
b. cannot be judicially enforced but authorizes the obligee to retain the obligor's payment or performance.
A natural obligation under the New Civil Code of the Philippines is one which a. refers to an obligation in writing to do or not to do. b. cannot be judicially enforced but authorizes the obligee to retain the obligor's payment or performance. c. the obligee may enforce through the court if violated by the obligor. d. the obligor has a moral obligation to do, otherwise entitling the obligee to damages.
c. warranty against eviction.
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.
b. No, because the exercise of the option to pay lies with A, the maker and debtor.
A writes a promissory note in favor of his creditor, B. It says: "Subject to my option, I promise to pay B Php1 Million or his order or give Php1 Million worth of cement or to authorize him to sell my house worth Php1 Million. Signed, A." Is the note negotiable? a. Yes, because an election to require something to be done in lieu of payment of money does not affect negotiability. b. No, because the exercise of the option to pay lies with A, the maker and debtor. c. Yes, because the note is really payable to B or his order, the other provisions being merely optional. d. No, because it authorizes the sale of collateral securities in case the note is not paid at maturity.
b. No, as the release of the share of one debtor would then increase the burden of the other debtors without their consent.
A, B, C and D are the solidary debtors of X for P40,000. X released D from the payment of his share of PI 0,000. When the obligation became due and demandable, C turned out to be insolvent. Should the share of insolvent debtor C be divided only between the two other remaining debtors, A and B? a. No. The rule is that gratuitous acts should be restrictively construed, allowing only the least transmission of rights. b. No, as the release of the share of one debtor would then increase the burden of the other debtors without their consent. c. Yes. Remission of D's share carries with it total extinguishment of his obligation to the benefit of the solidary debtors. d. Yes. The Civil Code recognizes remission as a mode of extinguishing an obligation. This clearly applies to D.
c. No, it would be deceptive since he is a proprietor, not a corporation.
A, the proprietor of a fleet of ten taxicabs, decides to adopt, as his business name, "A Transport Co., Inc." May this be allowed? a. No, since "A" is a generic name, not suitable for registration. b. Yes, since such name would give his business a corporate identity. c. No, it would be deceptive since he is a proprietor, not a corporation. d. Yes, since his line of business is public transportation.
d. ABC Corp. may redeem the shares at the end of 10 years without need for unrestricted retained earnings provided that, after the redemption, there are sufficient assets to cover its debts.
ABC Corp. issued redeemable shares. Under the terms of the issuance, the shares shall be redeemed at the end of 10 years from date of issuance, at par value plus a premium of 10%. Choose the correct statement relating to these redeemable shares. a. ABC Corp. would need unrestricted retained earnings to be able tore deem the shares. b. Corporations are not allowed to issue redeemable shares; thus, the issuance by ABC Corp. is ultra vires. c. Holders of redeemable shares enjoy a preference over creditors. d. ABC Corp. may redeem the shares at the end of 10 years without need for unrestricted retained earnings provided that, after the redemption, there are sufficient assets to cover its debts.
b. No, since consignation without tender of payment is allowed in the face of the conflicting claims on the plaintiff.
Allan bought Billy's property through Carlos, an agent empowered with a special power of attorney (SPA) to sell the same. When Allan was ready to pay as scheduled, Billy called, directing Allan to pay directly to him. On learning of this, Carlos, Billy's agent, told Allan to pay through him as his SPA provided and to protect his commission. Faced with two claimants, Allan consigned the payment in court. Billy protested, contending that the consignation is ineffective since no tender of payment was made to him. Is he correct? a. Yes, a tender of payment is required for a valid consignation. b. No, since consignation without tender of payment is allowed in the face of the conflicting claims on the plaintiff. c. Yes, as owner of the property sold, Billy can demand payment directly to himself. d. Yes, since Allan made no announcement of the tender.
d. No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the available remedies against Amador.
Amador obtained a loan of P300,000 from Basilio payable on March25, 2012. As security for the payment of his loan, Amador constituted a mortgage on his residential house and lot in Basilio's favor. Cacho, a good friend of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity. If Amador fails to pay Basilio his loan on March 25, 2012, can Basilio compel Cacho to pay? a. Yes, Basilio can compel Cacho who bound himself to unconditionally pay in case Amador fails to pay; thus the benefit of excussion will not apply. b. No, Basilio cannot compel Cacho to pay because as guarantor, Cacho can invoke the principle of excussion, i.e., all the assets of Basilio must first be exhausted. c. Yes, Basilio can compel Cacho to pay because the nature of Cacho's undertaking indicates that he has bound himself solidarily with Amador. d. No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the available remedies against Amador.
d. natural
An obligation which is based on equity and natural law is known as: a. civil b. quasi-contract c. pure d. natural
d. Acceptance of the offer by the offeree.
An offer becomes ineffective on any of the following grounds, except: a. Death, civil interdiction, insanity/insolvency of either party before acceptance is conveyed. b. Subject matter becomes illegal/impossible before acceptance is communicated. c. Qualified/conditional acceptance of the offer, which becomes counter-offer. d. Acceptance of the offer by the offeree.
c. No, since tender of payment even in cash, if refused, will not discharge the obligation without proper consignation in court.
Anne owed Bessy P1 million due on October 1, 2011 but failed to pay her on due date. Bessy sent a demand letter to Anne giving her 5 days from receipt within which to pay. Two days after receipt of the letter, Anne personally offered to pay Bessy in manager's check but the latter refused to accept the same. The 5 days lapsed. May Anne's obligation be considered extinguished? a. No, since a manager's check is not considered legal tender in the Philippines. b. Yes, since Bessy's refusal of the manager's check, which is presumed funded, amounts to a satisfaction of the obligation. c. No, since tender of payment even in cash, if refused, will not discharge the obligation without proper consignation in court.
d. No, since it contains a promise to do an act in addition to the payment of money.
B borrowed Php1 million from L and offered to him his BMW car worth Php1 Million as collateral. B then executed a promissory note that reads: "I, B, promise to pay L or bearer the amount of Php1 Million and to keep my BMW car (loan collateral) free from any other encumbrance. Signed, B." Is this note negotiable? a. Yes, since it contains an unconditional promise to pay a sum certain in money. b. Yes, since it is payable to bearer. c. No, since the promise to just pay a sum of money is unclear. d. No, since it contains a promise to do an act in addition to the payment of money.
b. Buko cas ask for reimbursement from Fermin and Toti.
Buko, Fermin and Toti bound themselves solidarily to pay Ayee the amount of P 5,000.00. Suppose Buko paid the obligation, what is his right as against his co-debtors? a. Buko can claim a refund from Ayee. b. Buko cas ask for reimbursement from Fermin and Toti. c. Buko can sue for rescission. d. Buko can sue Fermin and Toti for damages.
d. No, since the seller owns no inheritance while his predecessor lives.
Can future inheritance be the subject of a contract of sale? a. Yes, but on the condition that the amount of the inheritance can only be ascertained after the obligations of the estate have been paid. b. Yes, since the death of the decedent is certain to occur. c. No, since it will put the predecessor at the risk of harm from a tempted buyer, contrary to public policy. d. No, since the seller owns no inheritance while his predecessor lives.
d. unenforceable
Consent was given by one in representation of another but without authority. The contract is: a. void b. rescissible c. voidable d. unenforceable
a. Relativity of contracts.
Contracts take effect only between the parties or their assigns and heirs, except where the rights and obligations arising from the contract are not transmissible by their nature, by stipulation, or by provision of law. In the latter case, the assigns or the heirs are not bound by the contracts. This is known as the principle of a. Relativity of contracts. b. Mutuality of contracts. c. Obligatory force of contracts. d. Freedom to stipulate.
d. Yes, since only the forged signature is inoperative and E is bound as indorser.
D, debtor of C, wrote a promissory note payable to the order of C. C's brother, M, misrepresenting himself as C's agent, obtained the note from D, then negotiated it to N after forging C's signature. N indorsed it to E, who indorsed it to F, a holder in due course. May F recover from E? a. No, since the forgery of C's signature results in the discharge of E. b. Yes, since the signature of C is immaterial, he being the payee. c. No, since the signature of C, the payee, was forged. d. Yes, since only the forged signature is inoperative and E is bound as indorser.
a. 10,000 shares
Dennis subscribed to 10,000 shares of XYZ Corporation with a par value of P100 per share. However, he paid only 25% of the subscription or P250,000.00. No call has been made on the unpaid subscription. How many shares is Dennis entitled to vote at the annual meeting of the stockholders of XYZ? a. 10,000 shares b. 2,500 shares c. 100 shares d. 0 shares e. None of the above.
d. 6
EFG Foundation, Inc., a non-profit organization, scheduled an election for its six-member Board of Trustees. X, Y and Z, who are minority members of the foundation, wish to exercise cumulative voting in order to protect their interest, although the Foundation's Articles and By-laws are silent on the matter. As to each of the three, what is the maximum number of votes that he/she can cast? a. 3 b. 9 c. 12 d. 6
b. A corporation sole, regardless of the nationality of the head, can acquire real property either by sale or donation.
Father X, an American priest who came from New York, registered the Diocese of Bacolod of the Roman Catholic Church which was incorporated as a corporation sole. There were years when the head of the Diocese was a Filipino, but there were more years when the heads were foreigners. Today, the head is an American again. Y donated a piece of land located in Bacolod City for use as a school. Which statement is most accurate? a. A corporation sole is not legally allowed to own real property. b. A corporation sole, regardless of the nationality of the head, can acquire real property either by sale or donation. c. The nationality of a corporation sole depends upon the nationality of the head at any given time. d. The Register of Deeds of Bacolod City can refuse to register and transfer the title because the present head of the corporation sole is not a Filipino.
a. void
If one of the parties to the contract is without juridical capacity, the contract is: a. void b. voidable c. unenforceable d. rescissible
d. No since the stockholders cannot delegate their right to amend the By-laws to the Board.
In a special meeting called for the purpose, 2/3 of the stockholders representing the outstanding capital stock in X. Co. authorized the company's Board of Directors to amend its By-laws. By majority vote, the Board then approved the amendment. Is this amendment valid? a. Yes since the votes of 2/3 of the stockholders and majority of the Board were secured. b. No, because the voting in the Board should have been by majority of a quorum. c. Yes since the majority votes in the Board was sufficient to amend the By-laws. d. No since the stockholders cannot delegate their right to amend the By-laws to the Board.
c. conventional redemption.
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. equitable mortgage. b. legal redemption. c. conventional redemption. d. equity of redemption.
a. unless otherwise provided in the Articles of Incorporation or in the By-laws.
In elections for the Board of Trustees of non-stock corporations, members may cast as many votes as there are trustees to be elected but may not cast more than one vote for one candidate. This is true - a. unless otherwise provided in the Articles of Incorporation or in the By-laws. b. unless set aside by the members in plenary session. c. in every case even if the majority of the members decide otherwise during the elections. d. in every case even if the Board of Trustees resolves otherwise.
c. Prestation
It is a conduct that may consist of giving, doing, or not doing something. a. Contract b. Juridical necessity c. Prestation d. Obligation
c. Mutuality of contracts
It is a principle which holds that contracts must be binding to both parties and its validity and effectivity can never be left to the will of one of the parties. a. Autonomy of contracts b. Obligatory force of contracts c. Mutuality of contracts d. Relativity of contracts
d. Obligatory force of contracts
It is a principle which holds that parties are bound not only by what has been expressly provided for in the contract but also to the natural consequences that flow out of such agreement. a. Autonomy of contracts b. Mutuality of contracts c. Relativity of contracts d. Obligatory force of contracts
a. Fraud
It is an intentional evasion of the faithful performance of the obligation a. Fraud b. Delay c. Negligence d. Mistake
b. Autonomy of contracts
It is rule which holds that the freedom of the parties to contract includes the freedom to stipulate, provided the stipulations are not contrary to law, morals, good customs, public order or public policy. a. Obligatory force of contracts b. Autonomy of contracts c. Relativity of contracts d. Mutuality of contracts
c. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not disclosing the fact to Y.
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. No, because Y is in estoppel, having changed engine without prior demand. b. Yes. X is liable whether or not he was aware of the hidden defect. c. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not disclosing the fact to Y. d. No, because Y waived the warranty against hidden defects.
b. Void.
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. Rescissible. b. Void. c. Unenforceable. d. Voidable.
c. N, being O's immediate negotiator of a bearer note
M makes a promissory note that states: "I, M, promise to pay Php5,000.00 to B or bearer. Signed, M." M negotiated the note by delivery to B, B to N, and N to O. B had known that M was bankrupt when M issued the note. Who would be liable to O? a. B, having known of M's bankruptcy b. M and N since they may be assumed to know of M's bankruptcy c. N, being O's immediate negotiator of a bearer note d. B, M, and N, being indorsers by delivery of a bearer note
d. No, since under the law, the 100% ownership on voting stocks must be in either bank only.
May a publicly listed universal bank own 100% of the voting stocks in another universal bank and in a commercial bank? a. Yes, if with the permission of the Bangko Sentral ng Pilipinas. b. Yes, as there is no prohibition on it. c. No, since it has no power to invest in equities. d. No, since under the law, the 100% ownership on voting stocks must be in either bank only.
b. Yes, since the note was born of an illegal consideration which is a real defense.
P sold to M 10 grams of shabu worth Php5,000.00. As he had no money at the time of the sale, M wrote a promissory note promising to pay P or his order Php5,000. P then indorsed the note to X (who did not know about the shabu), and X to Y. Unable to collect from P, Y then sued X on the note. X set up the defense of illegality of consideration. Is he correct? a. No, since X, a general indorser, warrants that the note is valid and subsisting. b. Yes, since the note was born of an illegal consideration which is a real defense. c. Yes, since a void contract does not give rise to any right. d. No, since X, being a subsequent indorser, warrants that the note is valid and subsisting.
d. No, since Rodrigo, the other solidary creditor, already made a prior demand for payment from Rudolf.
Rudolf borrowed P1 million from Rodrigo and Fernando who acted as solidary creditors. When the loan matured, Rodrigo wrote a letter to Rudolf, demanding payment of the loan directly to him. Before Rudolf could comply, Fernando went to see him personally to collect and he paid him. Did Rudolf make a valid payment? a. Yes, since Fernando was a solidary creditor, payment to him extinguished the obligation. b. Yes, since the payment covers the whole obligation. c. No, since Rudolf should have split the payment between Rodrigo and Fernando. d. No, since Rodrigo, the other solidary creditor, already made a prior demand for payment from Rudolf.
b. No, since the 5-year rule on amendment of corporate term applies only to extension, not to shortening, of term.
T Corp. has a corporate term of 20 years under its Articles of Incorporation or from June 1, 1980 to June 1, 2000. On June 1, 1991 it amended its Articles of Incorporation to extend its life by 15 years from June 1, 1980 to June 1, 2015. The SEC approved this amendment. On June 1, 2011, however, T Corp decided to shorten its term by 1 year or until June 1, 2014. Both the 1991 and 2011 amendments were approved by majority vote of its Board of Directors and ratified in a special meeting by its stockholders representing at least 2/3 of its outstanding capital stock. The SEC, however, disapproved the 2011 amendment on the ground that it cannot be made earlier than 5 years prior to the expiration date of the corporate term, which is June 1, 2014. Is this SEC disapproval correct? a. Yes, the amendment to shorten corporate term cannot be made earlier than 5 years prior to the corporation's expiration date. b. No, since the 5-year rule on amendment of corporate term applies only to extension, not to shortening, of term. c. Yes, any amendment affecting corporate term cannot be made earlier than 5 years prior to the corporation's expiration date. d. No, since a corporation can in fact have a corporate life of 50 years.
c. not less than P5,000.00.
The Articles of Incorporation must be accompanied by a Treasurer's Affidavit certifying under oath, among others, that the total subscription paid is: a. not less than P25,000.00. b. not more than P25,000.00. c. not less than P5,000.00. d. not more than P5,000.00.
b. A de jure corporation;
The Articles of Incorporation of AAA Corporation was approved by the Securities and Exchange Commission (SEC). After the receipt of the Certificate of Approval from the SEC, AAA Corporation decided to immediately start the operation of its business despite the fact that it has no approved By-Laws. What is the legal status of the AAA Corporation? a. A corporation by estoppel; b. A de jure corporation; c. An unregistered corporation. d. A de facto corporation;
c. does not exceed 20% of the outstanding capital stock.
The Corporation Code sanctions a contract between two or more corporations which have interlocking directors, provided there is no fraud that attends it and it is fair and reasonable under the circumstances. The interest of an interlocking director in one corporation may be either substantial or nominal. It is nominal if his interest: a. exceeds 20% of the outstanding capital stock. b. does not exceed 25% of the outstanding capital stock. c. does not exceed 20% of the outstanding capital stock. d. exceeds 25% of the outstanding capital stock.
b. If there is an agreement in writing to the effect.
The borrower in a contract of loan or mutuum must pay interest to the lender. a. If the lender so demands at the maturity date. b. If there is an agreement in writing to the effect. c. As a matter of course. d. If the amount borrowed is very large.
d. the obligation to deliver the things arises.
The creditor has the right to the fruits of the thing from the time: a. the contract is perfected. b. the fruits are delivered. c. the thing is delivered. d. the obligation to deliver the things arises.
b. Contracts entered into by minors.
The following are rescissible contracts, except: a. Contracts where fraud is committed on creditor (accion pauliana). b. Contracts entered into by minors. c. Entered into by guardian whenever ward suffers damage more than ¼ of value of property. d. Agreed upon in representation of absentees, if absentee suffers lesion by more than ¼ of value of property.
c. Construction contract of a building.
The following are solemn contracts (Contracts which must appear in writing), except: a. Donations of real estate or of movables if the value exceeds P 5,000.00. b. Sale of land through an agent (authority must be in writing). c. Construction contract of a building. d. Stipulation to pay interest in loans.
d. Can be assailed only by either party.
The following are the characteristics of a voidable contract, except: a. May be assailed/attacked only in an action for that purpose. b. effective until set aside. c. Can be confirmed or ratified. d. Can be assailed only by either party.
B. Consideration
The following are the elements of an obligation, except: a. Passive subject b. Consideration c. Juridical/Legal Tie d. Active subject
a. Pre-existing contract
The following are the elements of quasi-delict, except: a. Pre-existing contract b. Act or omission c. Fault/negligence d. Damage/injury
c. Debtor contributed to the aggravation of the injury to the creditor.
The following are the requisites of fortuitous event, except: a. The event is unforeseeable/unavoidable. b. Cause is independent of the will of the debtor. c. Debtor contributed to the aggravation of the injury to the creditor. d. Occurrence renders it absolutely impossible for the debtor to fulfill his obligation in a normal manner; impossibility must be absolute not partial, otherwise not force majeure.
c. That the two (2) debts are not yet due.
The following are the requisites of legal compensation, except: a. That each of the obligors is bound principally and that he be the same time a principal creditor of the other. b. That both debts consist in a sum of money, or if the things due are consumable, they be the same kind, and also of the same quality if the latter has been stated. c. That the two (2) debts are not yet due. d. That they be liquidated and demandable.
b. Obligation was performed on its maturity date.
The following are the requisites of mora solvendi, except: a. Failure of the debtor to comply with such demand. b. Obligation was performed on its maturity date. c. There is judicial or extrajudicial demand by the creditor. d. Obligation pertains to the debtor and is determinate, due, demandable, and liquidated.
d. By the general principles of quasi-contracts and delicts
The following are the ways by which innominate contracts are regulated, except: a. By the customs of the place. b. By the rules governing the most analogous nominate contracts. c. By the stipulation of the parties. d. By the general principles of quasi-contracts and delicts
a. Pacto de retro
The following are void contracts, except: a. Pacto de retro b. Pactum commissorium c. Pactum leonina d. Pactum de non alienando
d. The Bangko Sentral ng Pilipinas;
The government agency granted with the power of supervision and examination over banks and non-bank financial institutions performing quasi-banking functions, to ensure that the conduct of its business is on a sound financial basis that will provide continued solvency and liquidity is - a. The Philippine Deposit Insurance Corporation; b. The Anti-Money Laundering Council; c. The Securities and Exchange Commission. d. The Bangko Sentral ng Pilipinas;
d. Pro-rata.
The liability of the partners, including industrial partners for partnership contracts entered into in its name and for its account, when all partnership assets have been exhausted is a. Voluntary. b. Joint. c. Solidary. d. Pro-rata.
b. It is a list of business activities or enterprises in the Philippines that foreigners are disqualified to engage in.
The main feature of the Foreign Investment Act of 1991 is to introduce the concept of "Negative Lists". Under the said law, what is a "Negative List"? a. It is a list of business activities or enterprises in the Philippines that foreigners are qualified to engage in. b. It is a list of business activities or enterprises in the Philippines that foreigners are disqualified to engage in. c. It is a list of business activities or enterprises that are open to foreign investments provided it is with the approval of the Board of Investment. d. It is a list of business activities or enterprises that are open to foreign investments provided it is with the approval of the Securities and Exchange Commission.
a. any number in multiples of five (5), for as long as it is not less than five (5) and no more than fifteen (15).
The number of the Board of Trustees of a non-stock, non-profit educational institution should be --- a. any number in multiples of five (5), for as long as it is not less than five (5) and no more than fifteen (15). b. not less than five (5) nor more than ten (1 0) in multiples of five (5). c. any number for as long as it is not less than five (5) and no more than eleven (11) d. five (5) only
b. Voidable.
The presence of a vice of consent vitiates the consent of a party in a contract and this renders the contract a. Void. b. Voidable. c. Unenforceable. d. Rescissible
a. a mere majority of the quorum of the Board of Directors applies.
The rule is that no stock dividend shall be issued without the approval of stockholders representing at least 2/3 of the outstanding capital stock at a regular or special meeting called for the purpose. As to other forms of dividends: a. a mere majority of the quorum of the Board of Directors applies. b. a mere majority of the entire Board of Directors applies. c. the same rule of 2/3 votes applies. d. a mere majority of the votes of stockholders representing the outstanding capital stock applies.
b. regardless of any depreciation or appreciation in the share's fair value.
The rule is that the valuation of the shares of a stockholder who exercises his appraisal rights is determined as of the day prior to the date on which the vote was taken. This is true - a. regardless of any appreciation in the share's fair value. b. regardless of any depreciation or appreciation in the share's fair value. c. only if there is no appreciation or depreciation in the share's fair value. d. regardless of any depreciation in the share's fair value.
b. Compensation morae
This term refers to a delay on the part of both the debtor and creditor in reciprocal obligations. a. Mora accipiendi b. Compensation morae c. Mora solvendi d. Solution indebiti
a. The corporation is dissolved ipso facto
The term of GGG Corporation in accordance with its Articles of Incorporation ended last January 30, 2012. The term was not extended. What will happen to the corporation? a. The corporation is dissolved ipso facto. b. The stockholders must pass a resolution to dissolve the corporation. c. There is a need to pass a board resolution to formally dissolve the corporation. d. The Board of Directors must pass a resolution for the corporation to formally go into liquidation.
c. as fixed in the articles of incorporation
To constitute a quorum for the transaction of corporate business, only a majority of the number of Board of Directors is required: a. as fixed by the corporate by-laws b. actually serving in the board c. as fixed in the articles of incorporation d. actually serving in the board but constituting a quorum
c. a majority of the directors present at the meeting at which there is a quorum
What vote is needed to consider every decision to be a valid corporate act? a. two-thirds of the directors present at the meeting b. a majority of the directors present at the meeting c. a majority of the directors present at the meeting at which there is a quorum d. two-thirds of the directors present at the meeting at which there is a quorum
b. voidable.
When bilateral contracts are vitiated with vices of consent, they are rendered a. rescissible. b. voidable. c. unenforceable. void
b. unenforceable
When both parties to the contract are minors, the contract is: a. void b. unenforceable c. voidable d. rescissible
b. voidable
When the consent of one of the parties was vitiated, the contract is: a. void b. voidable c. rescissible d. unenforceable
a. Absolute simulation of a contract always results in a void contract.
Which of the following expresses a correct principle of law? Choose the best answer. a. Absolute simulation of a contract always results in a void contract. b. Failure to disclose facts when there is a duty to reveal them, does not constitute fraud. c. Violence or intimidation does not render a contract annullable if employed not by a contracting party but by a third person. d. A threat to enforce one's claim through competent authority, if the claim is legal or just, does not vitiate consent.
b. The general indorser.
Which of the following indorsers expressly warrants in negotiating an instrument that 1) it is genuine and true; 2) he has a good title to it; 3) all prior parties have capacity to negotiate; and 4) it is valid and subsisting at the time of his indorsement? a. The irregular indorser. b. The general indorser. c. The regular indorser. d. The qualified indorser.
b. All contracts are required to have a valid consideration.
Which of the following statements is correct? a. All contracts are required to be in writing. b. All contracts are required to have a valid consideration. c. All contracts are perfected by mere consent. d. All contracts are perfected by delivery of the object.
b. Advertisements for Bidders are only invitations to make proposals and the advertiser is not bound to accept the highest/lowest bidder, unless it appears otherwise.
Which of the following statements is correct? a. Offers in interrelated contracts are perfected upon consent. b. Advertisements for Bidders are only invitations to make proposals and the advertiser is not bound to accept the highest/lowest bidder, unless it appears otherwise. c. Business advertisements are definite offers that require specific acceptance. d. Offers in interrelated contracts require a single acceptance.
b. Yes, it is an ultra vires act of its Board of Directors but voidable only, subject to stockholders' ratification.
X Corp., whose business purpose is to manufacture and sell vehicles, invested its funds in Y Corp., an investment firm, through a resolution of its Board of Directors. The investment grew tremendously on account of Y Corp.'s excellent business judgment. But a minority stockholder in X Corp. assails the investment as ultra vires. Is he right and, if so, what is the status of the investment? a. Yes, it is an ultra vires act of its Board of Directors and thus void. b. Yes, it is an ultra vires act of its Board of Directors but voidable only, subject to stockholders' ratification. c. Yes, it is an ultra vires act of the corporation itself and, consequently, void. d. Yes, it is an ultra vires act of the corporation itself but voidable only, subject to stockholders' ratification.
c. No, since the donation and its acceptance are not in a public instrument.
X and Y were to marry in 3 months. Meantime, to express his affection, X donated a house and lot to Y, which donation X wrote in a letter to Y. Y wrote back, accepting the donation and took possession of the property. Before the wedding, however, Y suddenly died of heart attack. Can Y's heirs get the property? a. No, since the marriage did not take place. b. Yes, since X freely donated the property to Y who became its owner. c. No, since the donation and its acceptance are not in a public instrument. d. Yes, since all the requisites of a donation of an immovable are present.
b. No, since Y, the owner of the collateral, has an interest in the payment of the obligation.
X borrowed money from a bank, secured by a mortgage on the land of Y, his close friend. When the loan matured, Y offered to pay the bank but it refused since Y was not the borrower. Is the bank's action correct? a. No, since anybody can discharge X's obligation to his benefit. b. No, since Y, the owner of the collateral, has an interest in the payment of the obligation. c. Yes, since it was X who has an obligation to the bank. d. Yes, since X, the true borrower, did not give his consent to Y's offer to pay.
d. Feb. 1, 2011.
X is a director in T Corp. who was elected to a 1-year term on Feb. 1, 2010. On April 11, 2010, X resigned and was replaced by R, who assumed as director on May 17, 2010. On Nov. 21, 2010, R died. S was then elected in his place. Until which time should S serve a. April 11, 2011. b. Nov. 21, 2011. c. May 17, 2011. d. Feb. 1, 2011.
c. Yes, because X, as a qualified indorser, warrants that the note is genuine.
X is the holder of an instrument payable to him (X) or his order, with Y as maker. X then indorsed it as follows: "Subject to no recourse, pay to Z. Signed, X." When Z went to collect from Y, it turned out that Y's signature was forged. Z now sues X for collection. Will it prosper? a. No, because a qualified indorsement does not include the warranty of genuineness. b. Yes, because X, as a conditional indorser, warrants that the note is genuine. c. Yes, because X, as a qualified indorser, warrants that the note is genuine. d. No, because X made a qualified indorsement.
a. The Corporate Secretary is correct because the Corporation Code provides that no certificate of stock shall be issued to a subscriber until the shares as subscribed have been fully paid.
X subscribed 10,000 shares in the capital stocks of AAA Corporation. He paid 50% of the 10,000 shares. X asked the Corporate Secretary to issue him the corresponding stock certificate representing the 50% of what he already paid. The Corporate Secretary of the corporation refused. Was the Corporate Secretary correct? a. The Corporate Secretary is correct because the Corporation Code provides that no certificate of stock shall be issued to a subscriber until the shares as subscribed have been fully paid. b. The Corporate Secretary cannot refuse because a Certificate of Stock can be issued provided it is indicated in the Certificate the actual percentage of what has been paid. c. The Corporate Secretary cannot refuse because a Stock Certificate can be issued corresponding to the percentage of shares which were paid. d. The Corporate Secretary cannot refuse because it is his legal duty to issue a stock certificate corresponding to the number of shares actually subscribed regardless of the actual payment.
a. X, as President, cannot be personally held liable for the obligation of the corporation even though he signed all the loan documents, because the loan was authorized by the Board.
X, the President of ZZZ Corporation, was authorized by the Board of Directors of ZZZ Corporation to obtain a loan from YYY Bank and to sign documents in behalf of the corporation. X personally negotiated for the loan and got tile loan at very low interest rates. Upon maturity of the loan, ZZZ Corporation was unable to pay. Which statement is most accurate? a. X, as President, cannot be personally held liable for the obligation of the corporation even though he signed all the loan documents, because the loan was authorized by the Board. b. If ZZZ Corporation cannot pay, X can be held subsidiarity liable. c. Because X was personally acting in behalf of the Corporation, he can be held personally liable. d. YYY Bank can choose as to who it wants to hold liable for the loan.
d. Void, since X should have authorized agent Y in writing to sell the land.
X, who was abroad, phoned his brother, Y, authorizing him to sell X's parcel of land in Pasay. X sent the title to Y by courier service. Acting for his brother, Y executed a notarized deed of absolute sale of the land to Z after receiving payment. What is the status of the sale? a. Valid, since Y was truly his brother X's agent and entrusted with the title needed to effect the sale. b. Valid, since a notarized deed of absolute sale covered the transaction and full payment was made. c. Valid, since the buyer could file an action to compel X to execute a deed of sale. d. Void, since X should have authorized agent Y in writing to sell the land.
