statement No.

2: There can be no delay in an obligation

not to do.

a. Both statements are true.

b. Both statements are false.
c, Statement No. 1 is true while statement no. 2 is false.
d. Statement No. 1 is false while statement No. 2 is true.

67. D obliged himself to give C 100 cavans of rice on

December 25, 2010. On said date, D failed to make
delivery, despite repeated demands from C.

a. C can compel D to deliver 100 cavans of rice plus dam-

ages.
b. Chas no remedy uhder the law.
c. C may ask a'third person to deliver 100 cavans of rice
to him, the value recoverable from D plus damages.
d. D can rescind the contract because the object is inde-
terminate.

68. Wrong committed independent of contract and with crimi-

nal intent is

a. Culpa contractual c. Quasi-contract

b. Culpa aquillana d. None of the above

69. A and B signed a promissory note to borrowP6,000 from

X, Y and Z, payable in 6 monthstime. B gave as a PI 0,000
diamond ring as security for the amount borrowed. How
much can Y collect from B?

C) PI ,OOO c. P2,OOO
b. 6,000 d. 3,000
 situation given in No. 69 above, the diamonqn
70. If in the to B, which of the following
returned by agreement
ment is correct?
extinguished.
a. Principal obligationis
is
b. Only P2,000 of the obligation extinguished
is
q. Only P3,000 of the obligation extinguished.
d None of the above

71. Which of the following is not an obligation with a

a. "Payable soonest"
b. An obligation payable little by little
c. Payable "within2 years from today"
d. None of the above

72. A. B and C executed a promissory note wordedasfol.

lows: We promise to pay X, Y and Z the sum of P90,000
(Sgd.) A, B and C

a. Ais obligedto pay to X, Y and Z P90,000.

b, Ais obligedto pay X P30,000.
c. Ais obligedto pay X P60,000.
d None ofthe above.

73, The act of abandoning or transferring all the debtor's

erty to•hiscreditors so that the creditors may sell them,
out of its net proceeds to recover their claim is called

a. Dacion en pago
Payment by cession
c. Tender of payment and consignation
d. Remission
 in Business Law For CPA Reviewees
pointers 155

74. The distinction between period and condition is

a. Period may or may not happen.

b. Condition will always happen.
c. Period may refer to a past event unknown to the parties.
d. Answer not given.

75. Solidary debtors A, B and C owes joint creditorsX, Y, Z

and W PI 2,000. X, Y and Z can collectfroma

a. P12,OOO c. P9,OOO
b. 6,000 d. 3,000

76. Statement No. 1: "I will give you a specific car if you will not
marry X this yepr (2010). If by the end of 2010, both parties
are alive and no marriage has taken place, my obligation
is extinguished.

Statement No. 2: "l will give you P 10,000 if you cannot

make a dead man alive. This is impossible condition, not
demandable.

a. Both are true.

Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
liable to C for P20,000. A
77. Aadd B are jointly and severally
is a minor.

a. C can collect P20,000 from B.

PI 0,000 from A, that is the share of B.
b. C can collect is nota defense.
minority
c. C can collect P20,000 because
C can collect PI 0,000 from B.
 lose every right to make use of the
The debtor shall
except:

does not furnish a guaranty or security

a When he toth
creditor.
When after the obligationhas been constituted,
b.
comes insolvent,unless he gives a guaranty or secu city

for the debts.

c. When the debtor attempts to abscond.
d. When the debtorviolates any undertaking in consider,
ations of which the creditor agreed to the period.

79. Which of the following is not a special mode of payment?

a. Dacion en pago
b. Payment by cession
c. Tender of payment
d. None ofthe above

80. Aowes B PIOO,OOOdue on December 11, 2010.

gaged his house to B as guaranty for the debt. Shortly,how•
ever, the mortgaged house was completely destroyedby
typhoon "Nitang". Thereafter, B demanded paymentfrom
A on October 11, 2010. Is B's demand valid?

a. No. The obligation is one with a definite period, thd

!

the creditor cannotdémand fulfillment of the obligatio

assuCh would be prejudicial to the rights of the debtc
b. No. The obligationis extinguished because the
of the obligation is lost through a fortuitous event•
c Yes. The debt becomes due atonpe because
t
anty was lost even though a fortuitous event, unless

debtor can mortgage another property that is

satisfactory.
 d. Yes. The debt becomes due at once because from the
tenor of the obligation, the period established is for the
benefit of the creditor solely thereby giving the creditor
the right to demand performance even before the date
stipulated.

81. payment of the obligation by a solidary debtor shall not

entitle him to reimbursement from his co-debtors

a. if such payment was made before the obligation is due.

if such payment was made after the obligation has pre-
scribed or become illegal.
c. if such payment was made in compliance with the de-
mand made to him by all the creditors.
d. if such payment was made after the obligation has be-
come due and demandable and notice of payment was
made only to him.

82. Statement No. 1: When the fulfillmentof the suspensive or

resolutorycondtiion depends upon the sole will of the
debtor, the conditional obligation shall be void.

Statement No. 2: If the original obligation is subject to a

suspensive or resolutory condition and the contract is no-
vated the new obligationshall be under the same condi-
tions unless otherwise stipulated.

a. Bothare true.
b. Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
83, Asold to B the former's horse for P5,000. No date is fixed,
by the parties for the performance of their respectiVe obli-
gations. The obligation of A is:
 a. To deliver the horse immediately as there
is a
contract. perfe
b. To deliver the horse upon the payment of B
c. To deliver the horse within a reasonab le
months fromt he contract date. time
d. To rescind the contract as there is no time
fixed
delivery and payment. forth

84. The substituion or change of an obligation by a

subsequent
one which extinguishes or modifies the first, either
by
Chang.
ing the object or principal conditions, or by substituting
the
person of thedebtor, rights subrogating a third person
in
the rights of the creditor is called:

a. Commodatum c. - Merger
b. Compensation d. Novation
85. X obliged himselfto give to Y his brand-new Rolex watchif
the latter cannot make a circle that is at the same time a
square.

a. The obligation is unenforceable because the conditio n

is immoral.
b. The condition is void because of the positive impos-
Sible condition.
c.j The obligation is valid because the impossible condi•
tion is negative.
d. The obligation is void, not enforceable.

86. Proof of pecuniary loss is necessary for the awardof:

a. Liquidated damages damages

d. Temperate
b. Exemplary damages above
e. None of the
c. Actual damages
 in Business Law For CPA Reviewees)
pointers 159

87. In the execution of obligation, liability for

malice or bad faith:
a. Extends.to natural consequences even they exceed
if
the debtor's exceptions.
b. Extends only to results intended but excluding exem-
plary damages.
c. Is demandable in all obligations but may be renounced
in advanced.
d. Extends not only to results intended but also to their
foreseen consequences.

88. In contracts and quasi-contracts, the liability of the debtor

who acted in good faith:

a. Extends to all natural and probableconsequences of

the breach of the obligation, and which the parties have
foreseen or could have reasonably foreseen at the time
the obligation was constituted.
b. Extends only to results intended but excluding exem-
plary damages.
c. Extends to all damages which may be reasonably at-
tributable to the non-performance of the obligation.
d. Extends to all damages which may be renounced in
advanced.

89. In delicts and quasi-delicts, the defendant shallbe liable for:

conse-
a. Damages which are natural and probable
of whether
complained
quences of the act or omission
not such damages have been foreseen or could have
or
offender.
reasonably been foreseen by the
for results intended but also to their foreseen
b. Not only
consequences. in advanced.
may be renounced
c.Damages which exemplary damages.
but excluding
d. Damages intended
 pa
160

obligation upon the happening

90. Extinguishes the ofth
dition:
c. Pure
a. Resolutory d. None of the
b. Suspensive above

of
Extinguishment debt may be made by creditor
91. eith
verbally or in writing:

a. Partial payment (C.; Express remission

b. Implied remission d. None of the above

92. The credit& is entitledto recover damages and interestin

addition to the penalty stipulated:

a. When the parties so agreed.

b. When the debtor refuses to pay the penalty.
c. When the debtor is guilty offraud in the fulfillmentofthe
obligation.
d Allofthe above.

93. Which of the following is not a ground for the extinguis

h •'

ment of an obligation?

a. Remission
b. Merger
c. Compensation
@ Depth of either debtor
or creditor
e. None ofthe above

94. Contracts ent9red

into durinq lucid-interva l:
a. 'Voi<able
b. Uhenforceable Void
d None of the above
pointersin Business Law For CPA
Reviewees 101
95. An absolutely simulated
or fictitious contract is:
a. Voidable
b. Void c. Unenforceåble
d. None of the above
96. The delay on the
part of the creditor to accept the perfor-
mance of an obligation:
a. Dolo incidente
b: Mora accipiendi c. Dolo causante
d. Mora solvendi
97. When the period
is "on or
the benefit of the period. before a date", the debtor has
This benefitis lost and the obliga-
tion becomes demandable when
a. the debtors attempts to abscond.
after contracting the obligation, the creditor suspects
the debtor td becoming insolvent.
c. the guarantee given by the debtor is not acceptable to
the creditor.
d. demand by the debtor could be useless.

98. Awas badly in need of money. He offeredto sell his parcel

of land to B for P 100,000.00.B agreed and paid A the
P 100,000.00 and A signed a recipt.When B wanted to
register the sale, he needed a Deed of Absolute Sale. What
can B do?
a. B may sue A to return the PI OO,COO.OOunder the legal
maxim "No one shall enrich himself at the expense of
another.
b. B may posses and utilizeA's land as a buyer in gocd
faith.
c.B may compel A to execute the Deed of Absolute Sale
because the contract is valid.
d. B cannofget ba•ckthe PI 00,000.00 because the con-
tract is not enforceable.
 Obli ations and Contra
part 1'/

and dated March 15,

by D
signed
note that if
promissory provided
99. A Examination,
she shall returnto
Thousand 2010CPA note gives rise to an
the October The above
in amount!'
•meslide
tionwith Resolutory condition
Suspensive
condition
d. None of the above
a. condition
b. Casual
Pedro the latter's meal al.
will continue giving an obligation subject
100. "Conrado yed' is
untilthe end of this
Iowance
to:

a. a resolutory period;
b. a suspensive condition.
c. a resolutorycondition.
d. a suspensive period.

101. StatementNo. 1: In cases of extra-ordinary inflation, the

basis of payment is the value of the obligation at the timeit
was constituted.

StatementNo. 2: Aftersubstitution,
objectthroughthe fault or the loss of the principal
render him liable
negligence of the debtor shall
for damages.

a. Bothstatements
b. Bothstatementsare true.
c. are false.
StatementNo. 1
d. Statement is true while
No. 1 is statement No. 2 is false'
false while
102. Statement statement No. 2 is true'
No. 1:
tinguishthe Payment by
whole cession does not totally
obligation.
pointersin Business Law For CPA Reviewees 163

statement No. 2: In obligation

essary for the creditor to with penal clauses, it is nec-
show proof of actual damages
suffered by him on account
of the non-performance of the
obligation by the debtor.

a. Both statement are true.

b. Both statements are false.
c. Statement No. 1 is true while statement No. 2 is false.
Statement No. 1 is false while statement No. 2 is true.

103. Statement No. 1: Merger taking place in the person of the

guarantor shall extinguish only the secondary contract such
as the contract of guaranty but not the principal obligation.

Statement No, 2: When the debtorpromises to pay his

obligation "whenever his means permit him to do so", the
obligations is with a period.

Both statements are true.

b. Both statements are false.
c. Statement No. 1 is true while statemenht No. 2 is false.
No. 2 is true.
d. Statement No. 1 is false while statement
facultative compensation
104. In three of the following cases,
exception?
shall prosper. Which is the

a. gratuitous support
liability arising from crime
b. civil
mutuum
d. depositum
solution indebiti, the contract of the
105. Statement No. I: In
basis for damages in case of non-compli-
Parties is the
ance.
 Statement No. 2: Negligence, as a ground for damages
ance of an obligation with
to time.

a. Both statements are true.

b. Both statements are false.
Statement No. 1 is false while statement No. 2 is true
d. Statement No. 1 is true while statement No. 2 is

06. Statement No. 1: The creditormay be compelledto

cept payment in checks as long as the check is negotiable

Statement No. 2: An obligation payable "should the client

die of diabetes" is an obligation subject to a period.

a. Both statements are true.

b. Both statements are false.
c. Statement No. 1 is true while statement No. 2 is false.
d. Statement No, 1 is false while statement No. 2 is true.

107. The buyer has the right to the fruit of the thing from:

a. the time the thing is delivered.

b. the time the contract is perfected.
c. the time the obligation to deliver the thing arises.
d. the time the fruits are delivered.

108. The kind of compensation which arises by way of proved

counterclaim in a case is called:

a. legal compensation.
b voluntary compensation.
c: judicial compensation.
d. facultative compensation.
 in Business Law For CPA
pointers
Reviewees
165
109. state-men-t-NQ:--IÅIn an obligation
period, if the object is subject to a suspensive
to the benefitöf the
improved by time, the
creditor. same inures

Statement No 2' Culpa

from breach of contracts.aquiliana is that fault which results

a. Both statements are

true.
b. Both statements are
c. false.
Statement No. 1 is true
d. while statement No. 2 is false.
Statement No. 1 is false
while statement No. 2 is true.
110. Debtor obliged himself to
deliver 100 cavans of rice on
June 1, 2010. On said date, D
failed to make delivery de-
spite repeated demands by C. In this
case:
a. C has no remedy under the law.
b. C can compel D to deliver 100 cavans ofrice
plus dam-
ages,
c. C may ask a third person to deliver 100 cavans of rice
to him, the value recoverable from D plus damages.
d. None of the above.

111. Statement No. 1: In alternative obligations, itis the notice

of which prestation to perform made by the debtor shall
convert the altemative obligation into a pure or simple one.

Statement No. 2: In case of a joint obligation, the co-debtors

may be held liablb for the share of an insolvent co-debtor.

a. Both statements are true.

b,
C) Both statements are false.
2 is false.
c. Statement No. 1 is true while statement No.
No. is true.
d. Statement No. 1 is false while statement
112. Insolvency of the debtor is required in:

a. Dation in payment
b. Payment by cession
c. Tender of payment and consignation
d. Application of payment

113. A, a minor,and B, a capable person, bind themselves

solidarily to pay X the sum of PI 0,000:

a. A may be compelled to pay P 10,000.

b. A may be compelled to pay P5,000 only.
c. B may be compelled to pay P 10,000.
d, B may be compelled to pay P5,000 only.

114. D obliged himself to paint the house of C or to paintthe

picture of C, in a standing position, using 10 by 10can.
vass. Later, because of financial reverses, C sold his house
to X. Which of the following statements is incorrect?

a. The obligationof D is extinguished because he cannot

make a choice.
b. D may just paint the picture of C.
c. D may cancel the contract and ask for damages.
d. None ofthe above.

115. Aand B arejointly indebtedto C for PI ,000. C assignsth€

credit to D and D assigns it back to A.

a. The debt is partiallyextinguished by compensation•

The debt is partiallyextinguished by merger.
c, The debt is totallyextinguished by merger.
d. •The debt is not extinguished either totally or
partially
 in Business Law For
pointers CPA Reviewees
167
116. Requisites of application
of payment,
except
a. Debts are all due.
b. Debts are of different
c. Two or more debts. kinds.
d. One debtor and one
creditor.
117. Statement-NQ:-L
Payment made by a third person who
does not intend to be
to be a donation, reimbursed by the debtor is deemed
which requires the debtor's
the debtor's consent consent. if
is not given, the obligation
tinguish. is not ex-

Statement N
--------.---.-------------Q:-Z
If the debtor's consent or permission is
not given, but the third person
paid the creditor, his right is
to proceed against the creditor
for reimbursement and not
against the debtor.

a. No. 1 is true, No. 2 is false.

b. No. 1 is false, No. 2 is true.
c. Both are false.
d. Both are true.

118. In tender and consignation: if after consignation is made,

the creditor allow the debtor to withdraw the thing depos-
ited in court, which of the following statements is incorrect?

a. Co-debtors, guarantors, and sureties are released from

the obligation unless they consented
b. The obligation remain to subsist.
c. The obligationis extinguished.
d. None of the above.
 for whose fulfillment
119. Statements No. 1: Obligation
be demandable only
certain has been fixed, shall When
Obligation with a resolutory period
day comes. take eff
at once. but terminate upon arrival of the day certain

Statement No. 2: D binds himself to pay "littleby littleh

obligation is for the benefit of the debtor.

a. Both are true.

b. Both are false.
No. 1 is true, No. 2 is false.
No. 1 is false, No. 2 is true.

120. Statements No. 1: "l promise to pay within 2 years" isan

obligation with a period, the creditor having a righttode.
mand payment within 2 years from the date of the instru. I

ment.

Statements No. 2: Ten sacks of corn cannot be compen.

sated (legal compensation) by ten sacks of rice.

a. Both are true.

b. Both are false.
Cc. No. 1 is true, No. 2 is false.
d. No. 1 is false, No. 2is true.

121. Mr. Cruz executed a first mortgage of his house in favorof

Mr. Dizon on May 15, 2010 to guaranty a mortgage loan
Of

P200,OOO due of payment on May 15, 2013. on septem•

ber 16, 2012, the house was completely destroyed bYtY•
phoon. On September 18, 2012, Mr. Dizon demanded
payment from Mr.Cruz of the loan. Is Mr. Dizon's demand

for payment valid?

 a. No. The obligation is one with a definite period, so the
creditors cannot demand payment untilthe definite due
date arrives.
b. No. The obligation is extinguished because the object
of the obligation is lost through a fortuitous event.
c. Yes. The obligation becomes due at once because the
benefit is solely for the creditor.The creditor can de-
mand payment even before the date stipulated.
d. Yes. The obligation becomes due at once because the
guaranty was lost even though a fortuitous event, un-
less the debtor can mortgage another property equally
satisfactory

122. Example 1 —D promised to give C a specific car valued at

P 100,000 after C has killed X. Later, after the killing, the
contract was novated instead of giving C a specific car, he
willjust give a specific land to be deliveredon February
28, 2010. Meanwhile, both parties died. In here, the heirs
of C may compel the execution of the second contract, that
is, the delivery of the specific land.

Example 2 —S sold to B a specific residentialhouse situ-

ated in Quezon for PI M, unknown to both parties, one (1 )
hour before the sale, the property was totally gutted by fire
caused by electrical defect. In here, B can be required to
pay the price of the sale, because the subject is determine.
S's obligation to deiiver is extinguished, while B's obliga-
tion remain to subsist.

a. Both examples are true.

b. Only No. 2 is true, while No. 1 is false.
Only no, 2 is false, while No. 1 is true.
Both examples are false.
 - cont

obligation is void?
123. Which of the following
within a reasonable time
a. Obligation payable
b. Obligation payable if the debtor cannot make a

c. Obligation payable if the debtor cannot make a dead

d. None of the above.

124. Mr. Debtor owes Mr. Creditor, who has two (2) legitimate
emancipatedchildren,P50,000 payable on December31
2010.

a. If Mr. Debtor dies before December 31, 2010, Mr.Credi.

tor cannot collect from the heirs of Mr. Debtor.
b. If Mr. Debtor dies before December 31, 2010, Mr.Credi.
tor can collect from the heirs of Mr. Debtor.
c. If Mr.Creditor dies, his two (2) legitimate emancipated
children cannot recover from Mr. Debtor his obligation.
d. If both Mr. Debtor and Mr. Creditor die, the heirsofMr,
Creditor can collect from the heirs of Mr. Debtor.

25. A owes B P5,000. C is the guarantor of A. A was ableto

pay B P3,000, thus leaving P2,000 unpaid. X, againstthe
will of A and without the knowledge of the partial payment
made by A, paid B the sum of P5,000. How does thispay-
ment affect the obligation?

a. The obligationis extinguished. X, however, cannotre•

cover any amountfrom A since the payment was made
against will of A. Instead, A can demand paymentfrom
C, the guarantor, to the amount of P5,000.
 in business Law
pointers For CPA Reviewees 171

b. The obligation is
extinguished. X, however,can demand
only P2,000 from A as
this is
efited A. If A cannot pay, X, the amountwhich ben-
having
into the rights of B can proceed been subrogatged
c against guarantor C.
The obligation is extinguished. X
can demand P2,000
from A, but if A cannot pay, X
cannot ordinarily proceed
against guarantor C because having
paid against the
will of A, X is not entitled to subrogation.
d. X's payment, having been made
against the will of A
does not extinguish the obligation.

126. The officious manager or gestor is liable for any fortuitous

eventEXCEPT:
ca; If he has undertaken risky operations which the owner
was accustomed to embark upon.
b. If he has preferred his own interest to that of the owner.
c. If he fails to return the propertyor business after de-
mand by the owner.
d. If he assumed the management in bad faith.
e. None of the above.

127. A tie or juridical relation, which by virtue of a payment of

what is not due, made through mistake, is created between
the person who paid and the one who received the pay-
ment, compelling the latter, in consequence thereof, to re-
turn what he has received:

Solutio indebiti d. Moral obligation

b. Natural obligation e. None of the above
c. Civil obligation
128. On October 4, 2010, A is indebtedto B for P 50,000
20-day period. A proposed to B that X will pay forN
and that A will be free from all liabilities. B and X As
the proposal. On October 25, 2010, when B triesagreed to
from X, he finds that X is insolvent. At the time of
tion, X was already insolvent but this was not known
The insolvency is not of public knowledge. So B sues
the ground that it was A who made the proposal andthatA
really guaranteed X's solvency. Decide.

a. A is liable because he is presumed to have guaran.

teed X's solvency.
b. Ais not liable, because A does not know the insolvency
of X at the time of delegation and neither was theinsol.
vency of public knowledge.
c. Ais liable because he did not exercise due diligence
in detemrining the insolvency of X.
d. Ais liable because X agreed to the proposal tomake
himself solidary liable for the obligation.

129. Remission is:

9. Essentially gratuitous c. Absolutely gratuitous

b. Naturally gratuitous d. All of the above

130. Statement No. 1: The debtor of a thing cannot compelthe

creditor to receive a different one, although the lattermay
is
be of the same value or more valuable than that which

due.
ofthe
Statement No. 2: In dation in payment, ownership
in
thing delivered is transferred to the creditor; while pro?
sion, it merely authorizes the creditor to convert the
erty into cash and out of the proceeds to extinguishtne
obligation partially.