CPAR CPA Review School of the Philippines FIRST PRE-BOARD EXAMINATION Saturday, July 28, 2018 Regulatory Framework for Business Transactions 10:30AM to 12:30PM. Instructions:Choose the BEST answer for cach of the following items. Mark only one answer for each item on “a the Special Answer Sheet provided. Strictly no erasure allowed A andl B are solidarily obliged to give C a brand new 2018 Toyota Camry valued at Php 2M on July 1, 2018. On dué ate, A has Php 1M but B only has Php 200,000, hence they failed to deliver. As a result ‘a. Both A and B are liable for damages b. Only B is liable for damages <> C gam require A to pay damages but A can recover from B the amount A paid to C 4, Neither A nor B is liable te pay damages A and B are obliged to give C 100 cavans of NFA tice on July 1, 2018. On due date, A delivered 50 cavans of NFA rice but B failed to deliver. As a result a Both A and B are liable for damages b. Only Bis liable for damages & Can require A to pay damages but A can recover from B the amount A. paid 4. Neither A nor B is liable for damages Cha ty 25; 2017... obliged himself to give to B his agricultural land if B will pass the October 2017 CPA Board Examination. On July 26, 2017, Biorally sold the agricultural land to C cade agreed that C will pay. when B effects the delivery. On October 2, 2017, one day before the fr day of the CPA Boar! Examination, A put poison on B's food requiring B's hospitalization resulting to B's failure to take the October 2017 CPA. Board Examination, As a result, which ofthe following is correct? a. The sale to C is void because B did not fulfill the condition B» The sale to C is enforceable because A. voluntarily prevenied B from fulfilling the condition & Bis entitled to the agricultural larid henee, the sale to C is valid Feil a. Ccan(demand the delivery of the agricultural land because the sale made by B ig valid ‘and C are solidary debtors of W and Y, joint creditors for Php 12,000 where the share of the Gehors in the obligation is 2:3:5 while the share ofthe creditors is 1:3. IFA is insolvent, Which of the following is correct? & W can collect from B Php 3,200 ( c. W or ¥ can collect from B and C Php 12,000 >: ¥can collect from © Php 6,400 ~d. ¥ can collect ftom either I or C Php 8,000 Using the preceding number, but the creditors are solidery and B is a minor, which of the following is correct? a. W can collect from C Php 8,400 | b»YY can collect from € Php 8,000 © Wor ¥ can collect from € Php 12,000 The insolvency of A will be shouldered by B and C in proportion to their respective obligations A contract is presumed to have been entered into in the place where the a Offer wasmade \_b Acceptance was made ¢, Performance wes made ¢..Payment was made Before acceptance is conveyed, an offer becomes ineffective upon the death, civil imerdiction, insanity or insolvency & Ofthe offeror b. OF the offereel C \OF either party d. OF both the offeror and offeree8. Which of the following is ot correct? a. The obligation to give includes that of delivering all its accessions and accessories even though they may not have heen mentioned A >, tra person obliged to do something fails todo it, the same shall be executed a his cost c. When the obligation consists in not doing, and the obligor does whit has been forbidden him, it shall be undone at his expense 4. In reciprocal obligations, fiom the monient one of the parties fulfills his sion delay by the other begins 9, Ithe contract stated the diligence which isto be observed in the performance of the obligation Statement 1 ~ that which is expected of a good father of a family shall be required Statement 2 — that which is required by law shall be observed Both statements are true ©. Statement | is tue | , Both statements are false i, Statement 2 js true ‘10. When a condition has bea imposed with the intention of suspending the efficacy of an obligation to ive, which of the following shall be observed during the pendency of the condition? 1, & I the thing is lost, the obligation shall be extinguished b. When the thing deteriorates, the impaizmnent is to be bome by the creditor se. If the thing perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered, the debtor shall be obliged to pay damages | 4, If the thing is iraproved by nature, or by time, the improvement shall inure to] the benefit of the creditor \ 11. A, B and © are solidary debtors sharing at 2:3:5 respectively, of creditors W and |Y sharing at 1:2, respectively. The obligation amounts to Php 30,000 due on July 30, 2015, If on July 30, 2015 A paid Php 30,000 to W, which of the following is correct? * | i a. A can recover from B and C the share which corresponds to cach, with interest | solvency, reimburse his share, such chare shall be borne by A and C b, IfB cannot, because of his in equal share ©. A can recover from B and C stipulated 4.) A can recover from B and € the share which cosresponds to eack, without interest | i@ share which corzesponds to each, with interest only if it is 12. As regards anticluesis, which of the following is not conrect?” a. The amount of the principal and of the intewst shall be seccified in wilting, otherwise the contrast of antichesis shall be void P, _ b. Thedebtor, uniess there is stipulation to the contrary is obliged to pay the taxes and charges upon the esiste ¢.)) The debtor cannot resoyutine what he owes the creditor d. The creditor is bound to bear the expenses newes immovable aijayriesn of the fuesovable withow fr Having totaly, paid ‘y for the preservation land repair of the 13. Which of the following is.uot coreece? B 4. Any stipulation exempting the yendér from the obligetion to answer for eviation shall be void jb Every stipaiation exempt from tie obligation to render an o¢count shall be void fi & Ihe thing pledge: he pledges to the pleduor or owner, the pledge is extinguished and any stipulaion to the eontary is void A stipulation forbidding the owner from alienating the immovable mortgaged shall be void returned by 14, Siatement A ~ Merger aA ” guarantors | ‘ ‘Statemeut 8 — Confusion which takes pisee in the person of the guarantors does not extinguish the obligation | a, Only Statement A is tue ) Both statements are ue b. Only Statement B is true . Both statements are false wihich takes place in the gerson of the principal debtor or ereditor benefits the15. On January 10, 2018, A orally sold for Php 8M her house and lot to B, It was agreed that delivery of the house and lot and the payment therefore would be made on April 10, 2018, Unfortunately, C, a stranger negligently set the house on fire on March 10, 2018 and the house was completely destroyed. As a result a. Bis required to pay the Php 8M minus the fair market value of the house 6.) A must still deliver the lot but is excused from delivering the house while B must still pay the Php 8M A rmust still deliver the lot and the salvage value of the house while B must still pay the Php 8M d. A need not deliver the lot while B need not pay the Php 8M 16. On February 12, 2018, A sold his only dog to B for P20,000. The parties agreed that B will pay one day after the results of the May 2018 CPA Licensure Examination arc released while A will deliver the dog on the day B pays. If the results were released on May 25, 2018 but the dog gave birth to a puppy on May 24, 2018, which of the following statements is correct? a.” Ais entitled to the puppy because the puppy wss born before the obligation to deliver arises b. Ais entitled to the puppy because of the principle that accessory follows the principal ©. Bis entitled to the puppy because the contract was perfected on February 12,2018 | 4. Bis entitled to the puppy because the puppy cannot be separated from the mother dog yet VER pointed a gun and threatened to kill B if B will not sign a promissory note which reads “I promise to pay ~~ A, P100,000". Out of fear, B signed the note. {t tuned out that two days earlier, A's obligation to B amounting to P100,000 became due and B demanded payment. Now, A alleges compensation. Is A correct? a.) Yes, because the promissory note is valid . No, because the promissory note was signed only because there was intimidation c. Yes, provided B will agree 4. No, because A’s obligation does not exist. _JEA has two creditors, B and C. the obligation to B is P10,000 and to C is P12,000. Later, with the consent of Avind B, W pays B P10,000. Now W and C are the creditors of A. Suppose A has only P12,000, which is correct? a. C should be preferred c_C and W should be paid proportionately bt. W should be preferred 4. A may choose whom to pay 19. Inthe following cases, the contract of sale with a right of repurchase shall be deemed an equitable mortgage. except-when = » & The vendor remains in possession of the object (Cb. The vences retains a portion of the price c.. The price is inadequate 4.) The parties renew the instrument after the expiration of the period to repurchase 20. A owes B P100,000 secured by a mortgage. C, girlfriend of A, and with no interest at all in the obligation, paid B the P100,000 without the knowledge of A. Which of the following course of action is allowed? C can recover P100,000 from A C can foreclose the morgage Cis subrogated to the rights of B Cis a person who is interested in the fulfillment of the obligation 2A sold his car to_B “on sale or retam within 10 days”, On the 7" day after delivery, the car was forcibly taken by the carnappers. In this case I p> -& The contract of sale is terminated ¢. A bears the loss b.) B must still pay the purchase price. B can refuse to pay unless A delivers another car 22. Which of the following is not correct? a. A movable or immovable property maybe the object of commodatum b. The bailor in commodatum need not be the owner of the thing loaned ‘/ _¢._Astipulation that the bailee may make use of the fruits of the thing loaned is valid. 4. The bailor is obliged to pay for the ordinary expenses for the use and preservation of the thing loaned23. The following are obligations of the agent,except In the execution ofthe agency, the agent shall actin accordance with the instructions ofthe principal fy > Shall be bound io advance the necessary funds, except when the prineipal is insolvent Z Shall finish the business already begun on the death of the principal, should delay entail any danger Incase a person deslines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner “ ‘the latter should appoint an agent and enforceable, the following contracts should be in writing, exgept: | Contract to pay interest on loan . ie x (Cb Contract of donation afisal property 2) -& Contract giving authority to an agent to sell a piece of land “Contract made in consideration of marriage 25,X borowed money from Y. X constituted a real esinte mortgege over his house to secure the loan, It was ~~ stipulated that in case X could not pay the loan on time, the house would belong to Y. Which ie concer? a. Y shall become owner of the house upon default by X by virtue of their written sss b, Y shall become the owner of the house by virtue of the default of X © (¢! Y shail only enjoy the right of alienation over the land Y shall be entitled to the right of appropriation of the land | 2 | 26-A. minor, sold the ring of his brother without authority. The ring has afr market value of PIM and selling < price was P600,000. ‘The contract is i © a. Restissible 6, Voidable (c.nenfoiceable 4. Void ‘ 27. Spouses H sed W are)under the regime of absolute community of property. H, throbish violence and jpimidation obtained the signatue of W to a contract of sale involving W's exclusive property in favor of H. The fait market valoc of the property is PLM but the selling price is ory 700,000. The sale a D “a Reseissible b. Voidable s.Unenforceable — d. Void BA sini 4 parcel of land which he seily to B with ~~ leaving his children C.D and Bas year redemption period, After the second year, A dies irs. Which of the following oreel? | Cee Acan repurchase the whole thing, so anyone anon C, Dand Ema repurchase the Whole thing Ay 6 Coantecccan tis 1/3 share, Dhis 1/+ stare and bids th 4£3 does oot require all of them or any one of them to redvem the whale property © Bay demand all of the co-hsits that they come to, an ogreemeat sold G. Beannot be compelled to consent to partiel peuew Zo 29-4 sold his car to B payable in tex egual ewonthly iesta:lme Property, For B's failure to pay 2 raonth’s inwiallment, wisich statem: 4 A may foreclose the mortgage cn 8's ear but he has no longer the right to recover the balance should it C be Sold for an emount lower tian what he elaime Gorn B.A may seek the cancellation of the sale made to B ® A tmay seek fulfillment of the ob! igation of B to pay the entire purchase price 4. A may ‘seek the conccliation of the sale and later on foreciose the mongage should he find it impossible 19 collect {tom B upon repurchase of the whole thing, sail ith a morigage constituted on the same | A“ | 30, When the sale of a piece of land or any interest therein is though an avert, the Authority ofthe agent may be 7 * Inapublic instrument (©)Bither in a public or private instrument C >. Inaprivate instcument © Duly notarized 31- An agency curnot he revoked iat will in the followang cases, excope when | 4. A bileteral contract depends upon it | Cy & Treagencyis fora fice term “_¢. Itis the means of fulfilling an obligation alresely constituted ‘The authority s granted toa mienaging partner sppuintca chrough the contract of partnership"32 The vendor-de-reto shall be entitled to redeem the object of sale within ~~ (8:) Four years ifno period is agreed upon ©. Ten years if there is a period stipulated |} ® Thirty days from notice of intention to repurchased. The period agreed upon 33, A-was obliged to pay B PIM on December 31, 2017. A paid B on December 31, 16 believing that the obligation was already due and demandable. How much may A recover ftom 3 on March 31, 2018? a. Nothing ¢. PIM plus legal interest for one year b. Legal imerest for one year and three months d. Legal interest for one year b. The interest is unenforceable ¢.) The loan is valid but the interest is void G. The loan and interest are both demandable 35.4 promised to deliver to B 100 sacks of palay from the former's 2018 summer harvest: A failed to deliver what was promised due to floods which destroyed the crops before harvect eocen Is the obligation extinguished? a No, generic thing does not perish No, A can still raise the same ftom future crops &) Yes, the generic thing is limited to the 2018 harvest 4: Yes, the contact is void due to non-existing object at the time of perfection of contract 36D. is obliged to give E, at E’s option, his Rolex wach, of his Cross ballpen or his diamond ring, The liamond ring was forcibly taken by a robber and the waich by a snatcher. After D lost the watch and the Ting, the ballpen likewise could not be located despite diligen! efforts to find the same Dect no longer [© remember where he kept the pen. Hence, D failed to deliver any of the three itane he Promised, Is the obligation of D to E extinguished? &, No, E can demand the value of anyone of the three items since he has the right of choice -b) No, E-can demand the value of the last thing lost ©. Yes, fortuitous loss extinguishes all the alternative obligations 4. Yes, nothing remains practicable ¥ 37-4 promissory note reads “I promise to pay B, P100,000 on July 30, 2018. Sed. A”, B transfered the note to C. Later, X stole the promissory note and transferred the note to ¥ who received the hore iy g00d faith. On. maturity date, Y presented the note to A and demanded payment. A paid the note in good fal To thie case, a, A's obligation is extinguished c. A's obligation is not extinguished “6. Cannot collect from A 4. Can recover only either from X or Y 38. M, aminor owns a specific ring valued at Php 100,000. G, the guardian ‘of M, by means of fraud induced B, minor to buy the ring for Pap 75,000, which B did so and G effected delivery to B. The contract is not in writing. Which is correct? > €) The contract is unenforceable because M and B are both incapacitated to give consent b. The contract is rescissible because M suffered a lesion of Y4 of the value of the ring & The contract is voidable but G cannot ask for annulment of the contract 4. The contract is voideble but B can only ask for annulment within 4years from discovery of the fraud 39:5 sold to B her watch for Php 10,000. B will pay seven days after delivery, S effected delivery on June 22, 2018. If today is June 30, 2018 and B has not effected payment yet is B in delay? 2.) Yes, in reciprocal obligations, if one of the parties fulfils his obligation, delay by the other begins »,) No, unless S makes a demand © Yes, because it was stipulated that B will pay within 7days 4. ‘No, the obligation of B is with a period hence, § should first go to the court for the court to fix the period40. Which of the following statements is not correct? ete vendor is bound to deliver the thing sold and ts accessions and accessories in the concition in which they were upon the perfection of the contract, ‘bp Al the fruits of the thing sold shall pertain to the vendor from the day on which the contract was perfected vc. The vendor shall not be bound to deliver the thing sold, ifthe vendee has not paid him the price, or if no period for the payment has been fixed in the contract datos is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of sale 41_X'take or leave it contract as the entries are already in the instrument and the parties to the contract either fe memories a) Contract of adhesion. Auto contract c, Consensual contract d. Real contract _§-40(/An agresment where the pledgor or mortgagor will execute a contract transferring ownership of the property pledged or mortgaged to the pledgee or mortgagee in case of default, such exerution of the contract will result to se pactum commissorium | BPayment by cession <¢;Dacionten page. Tender of payment 49, When the fulfillment of the valid suspensive condition depends upon the sole will of the debtor ‘a. The obligation is valid but the condition is disregarded b. Both the condition and obligation will be void c. Both the condition and obligation will be valid . The obligation shall be void but the condition is valié 44, Am agricultural land is owned by A.and D pro-indiviso. D sells his “part 10 R. WHO is the owner of the adjoining land. When A leamed of the sale, he tried to redeem the portion sold by D by reimbursing R with the purchase price and expenses. Which is not correct? a, Acan compel R to permit redempti ea eriemner of e thing may exercise the sight of redemption in ease the shares of the other co-owners orany one of them are sold to a third person c, The sale to R is valid but A can elect to exercise his right of redemption GL The sale to R is valid and as adjoining land owner he isthe one entitled to redemption 45, A and B obliged themselves to detiver a particular car to C valued at 200,000. If C demands the delivery from A and B, and itis only B who is willing to deliver, which of the following is the right of C? To ask from B the delivery of the car because the object is indivisible To atk for total rescission because of their failure to deliver what is incumbent upon them To ask from A the monetary consideration of P100,000 plus damages To ask the payment of damages from either A or B, but between A and B, A is the one liable for damages ae ee 46.G, the guardian of M, @ minor, owns @ specific ring valued at Php 50,000. Later, G instructed M to sell the ring for Php 55,000 promising to give to M Php 5,000 for his efforts. M sold the ring to B for Php 60,000. Which of the following is correct? ¢ ‘a, B can recover the Php 5,000 because: the price should have ‘been Php 55,000 only 'b) Gis entitled to the Php 60,000 selling price because M- should give everything to the principal ¢. Mill give to G Php 50,000 and the excess will belong to M d. The contract is voidable because Misaminor 4-08 july 4, 2018, Aa movie producer, and B, a movie actress met atthe Lobby of Manila Hotel. A informed cae x age is produeing a movie, the filming of which would start on September 1, 2018 and that she was ating B the lead role for a fee of P4,000,000, B accepted the offer and shook hands with A to seal tbeir |. agreement and A gave B 2 check for P200 as initial payment. On September 1, 2018, A called B for the 7+ Spocting of the movie but B refuses to honor the agreement saying that it was not enforceable, not being in writing. Which is correct”? a)A can enforce the contract against B because it was ‘mutually agreed upon Fa can requite B to shoot the movie because B bad accepted benefits under the contrset . B may just retum the payment because the agreement was made orally &. Bi aot bound under her agreement with A because the eontract involves an obligation to do