Exam (elaborations) TEST BANK BUSINESS LAW BY SORIANO

Exam (elaborations) TEST BANK BUSINESS LAW BY SORIANO BUSINESS LAW BY SORIANO Submitted to: Prof. Ardee Dela Cruz Submitted by: Dancel, Regine May Marty, Ira Rhomela Flores, Donna OBLIGATIONS – DIAGNOSTIC EXERCISES TEST 1 – MULTIPLE CHOICE. Select the best answer by writing the letter of your choice. 1. The following are the requisite of an obligation, except: a. Passive subject, debtor or obligor b. Active subject, creditor or oblige c. Efficient cause d. Demand 2. Obligations may arise from any of the following, except: a. Contracts b. Quasi-contracts c. Law d. Prestation 3. It is the voluntary administration of the property of another without his consent. a. Negotiorum gestio b. Solution indebiti c. Quasi-delict d. Contracts 4. It is a wrong committed without any pre-existing relations between the parties. a. Natural obligation b. Quasi-delict c. Quasi-contract d. Crime 5. Unless the law or the stipulations of the parties require another standard of care, every person obliged to give something is also obliged to take care of it with: a. Extra-ordinary diligence b. Diligence of a father of a good family c. Diligence of a good father of a family d. Good diligence of a father of a family 6. The creditor has a right that is enforceable against a definite passive subject. The right is known as: a. Personal right b. Real right c. Natural right d. Civil right 7. It is a thing that is particularly designated or physically segregated from all others of the same class. a. Generic thing b. Indeterminate thing c. Determinate thing d. Real thing 8. One of the following is determinate thing. Which is it? a. A cow b. A horse c. A Toyota car with engine no. 12345, body no. 35787 and plate no. ABC 123. d. A ring with diamond embellishment 9. Demand must be made on the due date of the obligation in order for delay to exist in one of the following cases. Which is it? a. When it was stipulated by the parties that demand need not be made. b. When the law provides that demand need not be made. c. When the obligation does not indicate whether demand must be made or not on due date. d. When time is of the essence of the contract. 10. This refers on the delay on the part of the creditor. a. Mora solvendi ex re b. Compensation morae c. Mora solvendi ex personae d. Mora accipiendi 11. There shall be no liability for loss due to fortuitous events in one of the following cases. Which is it? a. When the debtor delays. b. When the parties so stipulated that there shall be liability even in case of loss due to fortuitous events. c. When the nature of the obligation requires the assumption of risks. d. When the obligation is to deliver a determinate thing and there was no stipulation as to the liability of the debtor in case of loss due to fortuitous events. 12. The following are the remedies of the creditor to pursue his claims against the debtor, except to: a. Pursue the property owned and in possession of the debtor. b. Exercise all the rights and bring all the actions of the debtor (accion subrogatoria) c. Impugn the acts which the debtor may have done to defraud his creditors (accion pauliana) d. Compel the debtor to perform the service in obligations to do. 13. D borrowed P50, 000 from C. C dies before he has collected the debt leaving S, his son, as heir. Which of the following statements is correct? a. S can collect from D although D and C did not agree that the credit right will pass on to the heirs of C. b. S cannot collect because the credit right is personal to C. c. S can collect only f D and C agreed that the credit right will pass on the heirs of C. d. S cannot collect because the law prohibits the transmission of the credit right. 14. D is obliged to give C a specific car if C passes the CPA Licensure Examination. D’s obligation is an example of: a. A pure obligation b. An obligation with a suspensive condition c. An obligation with a resolutory condition d. An obligation with a period 15. One of the following obligations is not immediately demandable. a. Pure obligation b. Obligation with a resolutory condition c. Obligation with an in diem period d. Obligation with ex die period 16. One of the following is a void obligation: a. D is obliged to give C P5,000.00 if C does not go to the moon. b. D is obliged to give C P5,000.00 if D does not go to Baguio. c. D is obliged to give C P5,000.00 if C does not go to Baguio. d. D is obliged to give C P5,000.00 if D wins first prize in the sweepstakes on a ticket that he had already purchased. 17. D is obliged to give C P10,000.00 if X dies. This is an example of: a. An obligation with a suspensive condition b. An obligation with a resolutory condition c. An obligation with a period d. A pure obligation 18. When the debtor binds himself to pay when his means permit him to do so, the obligation is: a. An obligation with a resolutory condition b. A pure obligation c. An obligation with a suspensive condition d. An obligation with a suspensive period 19. Whenever a period is designated in an obligation, the said period shall be presumed to have been established for the benefit of: a. The debtor b. The creditor c. Both the debtor and the creditor d. Neither of the parties 20. The debtor shall lose the right to make use of the period in the following cases, except when he: a. Becomes insolvent. b. Violates any undertaking in consideration of which the creditor agreed to the period. c. Attempts to abscond. d. Does not furnish any guaranty or security to the creditor. 21. An obligation ceases to be alternative and becomes a simple obligation in the following cases, except when: a. The debtor has communicated his choice to the creditor. b. The right of choice has been expressly granted to the creditor and his choice has been communicated to the debtor. c. Among the several prestations that are due only one is practicable. d. Three prestations are due but one of them is unlawful or impossible. 22. D s obliged to give C a specific watch, a specific ring, or a specific bracelet. The parties agreed that C will have the right to choose the thing which will be given to him. Before C could make his choice, the watch and the ring are lost through D’s fault, successively. What is the right of C? a. C may choose the delivery to him of the bracelet, or the price of watch or the price of the ring plus damages. b. C cannot choose the price of the watch or the price of the ring because the said objects have already been lost. c. C can only choose to have the bracelet because anyway, D can still perform his obligation. d. C can only choose to have delivery of the bracelet or the price of the ring which was the last item that was lost plus damages. 23. D is obliged to give C a specific ring. The parties agreed that D may give a specific bracelet as substitute. Which of the following statements is true? a. If the ring is lost through a fortuitous event before substitution, the obligation is extinguished. b. If the bracelet is lost through a fortuitous event before the substitution, the obligation is extinguished. c. If the ring is lost through a fortuitous event after substitution, the obligation is extinguished. d. If the ring is lost through the debtor’s fault after substitution, the debtor shall pay damages. 24. A, B, C and D are obliged to give V, W, X, Y and Z P20,000.00. a. V may collect from A P20,000.00 b. V may collect from A P5,000.00 c. V may collect from A P1,000.00 d. V may collect from A P4,000.00 25. A, B, C and D joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P20,000.00. a. V may collect from B P20,000.00 b. V may collect from B P4,000.00 c. V may collect from B P5,000.00 d. V may collect from B P1,000.00 26. A, B, C and D, solidary debtors, are obliged to give V, W, X, Y and Z, joint creditors, P20,000.00. a. V may collect from B P20,000.00 b. V may collect from B P4,000.00 c. V may collect from B P5,000.00 d. V may collect from B P1,000.00 27. A, B, C and D, solidary debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P20,000.00. a. V may collect from B P20,000.00 b. V may collect from B P4,000.00 c. V may collect from B P5,000.00 d. V may collect from B P1,000.00 28. A, 25, B, 35, and C, 17, are solidary debtors of X in the amount of P9,000.00. a. X may collect from A P9,000.00 b. X may collect from A P6,000.00 c. X may collect from A P1,000.00 d. X may collect nothing because the obligation is voidable, C being a minor. 29. The following obligations are divisible, except an obligation: a. To give definite things. b. Which has for its object the execution of a certain number of days of work. c. Which has for its object the accomplishment of work by metrical units. d. Which by its nature is susceptible of partial performance. 30. In obligations with a penal clause, the creditor as a rule may recover from the debtor in case of breach the following: a. The penalty as agreed upon, plus damages and interest. b. The penalty and damages. c. The penalty and interest. d. Only the penalty 31. Consider the following statements: I. The nullity of the principal obligation carries with it the nullity of the penal clause. II. The nullity of the principal obligation does not carry with it the nullity of the penal clause. III. The nullity of the penal clause carries with it the nullity of the principal obligation. IV. The nullity of the penal clause does not carry with it the nullity of the principal obligation. a. Statements I and III are true. b. Statements I and IV are true. c. Statements II and III are true. d. Statements II and IV are true. 32. D borrowed from C P50,000.00. the obligation is secured by a chattel mortgage on D’s Toyota car. Subsequently, D paid C P20,000.00. unknown to D, T, a third person, pays C P50,000.00 believing that D still owed C such amount. a. T can recover P50,000.00 from D. if D cannot pay, T can foreclose the mortgage on D’s Toyota car. b. T can recover nothing from D because he paid C without the knowledge and consent of D. c. T can recover P30,000.00 from D. If D cannot pay, T can foreclose the mortgage on D’s Toyota car. d. T can recover P30,000.00 from D. if D cannot pay, T cannot foreclose the mortgage on D’s Toyota car. 33. The following statements concerning payment by cession are true, except one. Which is it? a. The creditors become the owners of the properties of the debtor that were ceded to them. b. Payment by cession extinguishes the obligation only to the extent covered by the proceeds of the sale of the debtor’s properties. c. The debtor must be insolvent. d. Cession affects all the properties of the debtor except those exempt from execution. 34. D obtained from ABC Bank a loan of P12,000.00 payable at the end of 10 years. Before maturity, an extraordinary inflation supervened causing the value of the debt to fall to P4,000,000.00 on the date of maturity. On due date, D must pay ABC Bank: a. P12,000,00.00 b. P4,000,000.00 c. P36,000,000.00 d. P3,000,000.00 35. D borrowed from XYZ Bank P2,000,000.00 payable at the end of 5 years. Before maturity, an extraordinary deflation supervened causing the value of the debt to rise to P5,000,000.00 on the date of maturity. On due date, B must pay XYZ Bank: a. P2,000,000.00 b. P5,000,000.00 c. P800,000.00 d. P20,000,000.00 36. The money or currency which the debtor may compel the creditor to accept in payment of a debt, whether public or private, is known as: a. Notes payable to order b. Legal tender c. Bill of exchange d. Mercantile document 37. The delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of performance is known as: a. Payment by cession b. Dation in payment c. Application of payment d. Consignation 38. D owes C the following debts: P6,000.00 due on June 12; P6,000.00 due on June 15; P6,000.00 due on June 18; and P6,000.00 due in June 20. All debts are unsecured except the debt due on June 20 which is secured by a pledge of D’s diamond ring to C. By agreement, the benefit of the term on the 4 debts was granted to C. assuming that D has P6,000.00 on June 18 and is ready to pay C, which of the following statements is correct? a. D may apply his payment of P6,000.00 to any of the debts due on June 12, June 15, and June 18 since they are all due as of June 18. b. D may apply his payment only to the debt due on June 20 because it is the most burdensome to him. c. D must apply the payment proportionately to the debts due as of June 18 at P2,000.00 each. d. D may apply the payment to any of the four debts. 39. The offer made by the debtor to pay his obligation to his creditor is known as: a. Consignation b. Tender of payment c. Application of payment d. Dation in payment 40. Consignation alone without any tender of payment is sufficient in the following cases, except: a. When the creditor is absent or unknown or does not appear at the place of payment. b. When the creditor presents the title to the obligation for collection. c. When without just cause, the creditor refuses to give a receipt. d. When two or more persons claim the same right to collect. 41. M owes P P10,000.00. the obligation is evidenced by a promissory note. Subsequently, P assigned the note to A, A to B, B to C, and C back to M. the obligation of M is extinguished by: a. Compensation b. Confusion c. Condonation d. The obligation is not extinguished because there was no payment. 42. In order that condonation may extinguish an obligation involving a movable property whose value exceeds P5,000.00 – a. It is sufficient that the condonation and the acceptance are in writing, even a private one. b. It is required that the condonation and the acceptance be in a public instrument. c. The delivery of the document evidencing the debt is sufficient since the property is movable. d. The condonation and the acceptance may be made orally. 43. One of the following is not a requisite of legal compensation, which is it? a. That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other. b. That the two debts be due. c. That both debts be liquidated and demandable. d. That the debts are payable at the same place. 44. Henry, husband, and Wilma, wife, are legally separated. By order of the court which decreed the legal separation, Henry is obliged to give a monthly support of P10,000.00 to Wilma payable within the first five days of the month. Wilma owes Henry P10,000.00 by way of a business loan. On the other hand, Henry has not yet given Wilma’s support of P10,000.00 for this month. Both debts are already due. Which of the following statements is correct? a. Both debts are extinguished by legal compensation because both are already due. b. Wilma can claim compensation but not Henry. c. Henry can claim compensation but not Wilma. d. Neither one may claim compensation because the debts are not of the same kind. 45. D owes C P10,000.00 with G as guarantor. C, on the other hand, owes D, P8,000.00. both debts are already due but D is insolvent. In this case – a. C may collect from G P10,000.00 b. C may collect from G P2,000.00 because a guarantor can set up compensation as regards what the creditor owes the principal debtor. c. C may collect nothing from G because D is insolvent. d. C may collect P8,000.00 from G. 46. D borrowed P50,000.00 from C. subsequently, D proposed to C that T would assume his (D’s) debt. C accepted the proposal of D. This substitution of the debtor is known as – a. Expromision b. Delegacion c. Tradition d. Dation en pago 47. Refer to the facts of No. 46. Assume also that on due date, T could not pay because of his insolvency which was in fact subsisting but was known to D or of public knowledge at the time that D delegated his debt. In this case – a. C can revive D’s debt because T’s insolvency was already existing at the time that D delegated his debt. b. C can revive D’s debt whether or not he (D) was aware of T’s insolvency since he (D) proposed the substitution. c. C cannot hold D liable because his (D’s) obligation was extinguished when he was substituted by T. d. The novation is void because D did not take steps to determine the solvency of T when he (D) delegated his debt. 48. D obliged himself to give 5 grams of “shabu” to C. later, the parties agreed that D would instead give to C 5 sacks of rice. Which of the following statements is correct? a. The novation is void because the original obligation is void. Hence, C cannot demand the delivery of 5 sacks of rice from D. b. The novation is valid because the new obligation is valid. Hence, C can demand the delivery of 5 sacks of rice from D. c. The original obligation although void is validated by the new obligation. Hence, C can demand the delivery of 5 sacks of rice from D. d. The new obligation is only voidable because had not yet performed the original obligation at the time of the novation. Accordingly, the new obligation is binding and C may demand the delivery of 5 sacks of rice from D until the new obligation is annulled by a proper action in court. 49. On July 1, 2010, D obliged himself to give C P50,000.00 if C will marry X on or before December 31, 2010. The condition of the obligation is a: a. Positive condition b. Negative condition c. Joint condition d. Impossible condition 50. Refer to No. 49. Which of the following statements is incorrect? a. The obligation of D is demandable if C marries X on or before December 31, 2010. b. The obligation of D is extinguished if it is already January 1, 2011 and C has not yet married X. c. The obligation of D is extinguished on December 2, 2010 if X dies on the same date and C has not yet married X. d. The obligation is demandable if C marries X on January 1, 2011. 51. On July 1, 2010, D obliged himself to give C a specific car if C will not marry X on or before December 31, 2010. The condition of the obligation is a: a. Positive condition b. Negative condition a. Divisible condition b. Impossible condition. 52. Refer to N. 51. Which of the following statements is incorrect? a. The obligation of D is demandable if C marries X on January 1, 2011. b. The obligation of D is demandable on December 2, 2010 if X dies on the same date and D has not yet married X. c. The obligation of D is demandable if it is already January 1, 2011 and D has not yet married X. d. The obligation is demandable if C marries X on December 2. 2010. 53. D owes C P5,000.00. T, a third person and without any intention to be reimbursed by D, paid the debt without the consent of D. C accepted the payment. a. The payment did not extinguish the debt of D to C because it was made without the consent of D. b. The payment did not extinguish the debt because it was not made by D himself. c. The payment is considered valid because it was accepted by the creditor. d. The payment may be considered valid if T had the intention to be reimbursed. 54. A mode of extinguishing obligations up to their concurrent amount when two persons are principal debtors and creditors of each other is called: a. Novation b. Payment c. Compensation d. Merger 55. D owes C P6,000.00. No date for payment was stipulated by the parties. a. C cannot require D to pay because there is no date for payment. b. C can require D to pay at any time. c. D is not liable to C because the obligation is void there being no date of payment. d. D is not required to pay unless C goes to court and asks the court to fix a period for the payment. 56. Under a contract executed on November 1, 2010, D obliged himself to give a specific horse to C on December 10, 2010. On December 8, 2010, C demanded the delivery of the horse but D did not comply. The following day, the horse was struck by lightning and died instantly. a. The obligation of D is extinguished because the loss is due to fortuitous event and D was not in default. b. The obligation of D is not extinguished because D can deliver another horse. c. The obligation of D is not extinguished because D was in default. d. The obligation of D is not extinguished because the demand was not made on due date. 57. Which of the following is not considered a conditional obligation? a. D to pay c P5,000.00 as soon as D has the means. b. D to pay c P5,000.00 if C marries X. c. D to pay c P5,000.00 if C tops the CPA Examinations. d. D to pay C if X dies of malaria. 58. The distinction between merger and compensation is that in merger: a. The two debts may be payable at different places. b. Two persons are in their own right debtors and creditors of each other. c. The debtor and creditor may agree on the set-off of debts that are not yet due. d. The debtor and the creditor refer to only one person. 59. The passage of time as a mode of acquiring or losing a right including the extinguishment of an obligation is called: a. Remission b. Novation c. Prescription d. Merger 60. Legal compensation shall not be proper in three of the following cases. Which is the exception? a. Commodatum b. Civil liability arising from a criminal offense c. Gratuitous support d. Bank deposit 61. Cecilia, the owner of a sari-sari store, purchased several bags of “Dulcita” candy worth of P5,000.00 from Olga, an authorized dealer of the product. On due date, Cecilia, who sells the candies at P1.00 each, tendered her payment to Olga consisting of 5,000 pieces of P1.00 coins. a. Olga may refuse to accept the payment and demand that she be paid in bills. b. Olga may not refuse to accept the payment because what Cecilia was offering as payment is money circulated in the Philippines. c. Cecilia may consign the payment in court if Olga refuses to accept it. d. The tender made by Cecilia was valid because the P1.00 coins came from her sales and she had plenty of them. 62. Dominico and Domingo are jointly and severally liable to Crispino for P100,000.00. the obligation is due on June 30, 2010. On June 25, 2010, Domingo paid the whole amount of the note to Crispino. If Domingo reimburses Dominico on July 15, 2010, Dominico is entitled to receive from Domingo: a. P50,000.00 plus interest from June 25 to July 15, 2010. b. P50,000.00 plus interest from June 25 to June 30, 2010. c. P50,000.00 plus interest from June 30 to July 15, 2010. d. P50,000.00 with no interest because Dominico paid the note before due date. 63. One of the following statements does not pertain to dacion en pago. Which is it? a. Ownership of the thing is transferred to the creditor. b. The debtor must be insolvent. c. It does not affect all the properties of the debtor. d. It does not require plurality of creditors. 64. One of the following does not apply to payment by cession. Which is it? a. Ownership of the debtor’s properties is transferred to the creditor. b. The debtor must be insolvent c. It affects all the properties of the debtor except from execution. d. There are several creditors. 65. A, B and C are solidarily liable to X for P30,000.00. A pays X the whole amount due. C, however, is insolvent. a. A alone will bear the share of c who is insolvent since he (A) made the payment. b. A can collect from B P10,000.00. c. A can collect from B P15,000.00. d. A can demand a refund of P10,000.00 from X pertaining to C’s share since C is insolvent. 66. Anna Almeda, Belinda Bersola, and Claudia Cabrera executed the following promissory note: “ I promise to pay Dolores Dominguez or order the sum of P30,000.00 on June 30, 2010. (Sgd.) Anna Alameda (Sgd.) Belinda Bersola (Sgd.) Claudia Cabrera” On June 30, 2010, Dolores Dominguez can collect from Anna Almeda: a. P10,000.00 b. P30,000.00 c. P20,000.00 d. Nothing, because the note is void since it says “I promise” but was signed by three persons. 67. One of the following is a valid obligation. Which is it? a. D promised to give C P50,000.00 if C will not swim across the Pacific Ocean. b. D promised to give C P50,000.00 if D goes to Tokyo. c. D promised to give C P50,000.00 if C can fly to the moon. d. D promised to give C P50,000.00 if C gives him 5 grams of marijuana. 68. An obligation where various prestations are due but the performance of all of them is required in order to extinguish the obligation is known as: a. Alternative obligation b. Facultative obligation c. Conjunctive obligation d. Simple obligation 69. A, B and C are solidary debtors of X in the amount of P9,000.00. subsequently, X renounced the share of A. A accepted the renunciation of his share. On due date, B paid X P6,000.00. B demanded reimbursement from C but C is insolvent. In this case: a. B may demand the payment of P3,000.00 from A. b. B may not demand any payment from A because the share of A had already been renounced or condoned. c. B may demand P1,500.00 from A representing A’s share in C’s insolvency. d. B may demand from A P4,500.00 so that their sharing in the total debt is equal. 70. D is indebted to C for P20,000.00 which is due on June 10. C owes D 15,000.00 which is due on June 5. On June 8, C assigned his credit rights to T. D gave his consent to the assignment but did not reserve his right to the compensation. On June 10, how much may T collect from D? a. P20,000.00 b. P15,000.00 c. P5,000.00 d. Nothing. 71. On May 1, 2010, D executed a written undertaking obliging himself to deliver 100 sacks of rice to C on May 31, 2010. On May 28, 2010, C demanded the delivery of 100 sacks of rice from D but D did not comply. The following day, a fire of undetermined origin destroyed D’s warehouse together with about 500 sacks of rice stored therein and from which D intended to get 100 sacks of rice for delivery to C. a. D’s obligation to deliver 100 sacks of rice to C