Quiznetik

Philippines Civil Law Society | Set 5

1. In cases of reserve troncal, the reservista can sell the property subject of reserva. True or false?

A. True, but subject to resolutory condition, hence, can rescind the conrtact;

B. False, because he/she is not the owner as he holds the property merely in trust for the reservatarios.

C. True, because having a title over it, the buyer can just rely upon the title under the mirror doctrine.

D. True, because from the moment of death of the descendant propositus, the reservista acquired ownership over the property subject of reserva.

Correct : A. True, but subject to resolutory condition, hence, can rescind the conrtact;

2. A & B are married. They have children, C & D. C is married to X and they have children, Y & Z. D is married to S and they have children, T & U. He has likewise an illegitimate child, V. Before A died he executed a will instituting his heirs including V. Can V inherit from A considering that he is an illegitimate child of D?

A. V cannot inherit because he is an illegitimate child of D.

B. V cannot inherit despite his institution because of the barrier between the legitimates and the illegitimates.

C. V can inherit because the iron curtain applies only in cases of intestacy.

D. V can inherit because the will of A is an act whereby he is given the right to determine his heirs.

Correct : C. V can inherit because the iron curtain applies only in cases of intestacy.

3. A executed a will with B, C & D as witnesses. At the time of the subscription by A, C & D on each and every page of the will, B was outside the room with an open door. Is the will valid?

A. The will is void because it was not subscribed in his presence.

B. The will is valid because the phrase “in the presence” does not mean actual seeing but mere opportunity to have witnessed and seen the signing.

C. The will is valid because there is substantial compliance with the law.

D. The will is void because it requires the presence of the witnesses to prevent fraud, in the execution of the will and to protect the integrity of the will.

Correct : B. The will is valid because the phrase “in the presence” does not mean actual seeing but mere opportunity to have witnessed and seen the signing.

4. X executed a will instituting his heirs. It was discovered 15 years after his death, hence, the heirs consulted you whether they can still file a petition for its probate, considering that they have already extrajudicially settled his estate. What is your advice?

A. Yes, because the probate of a will is imprescriptible as it is mandated by public policy.

B. No more because it has already prescribed.

C. Yes because they cannot extrajudicially settle the estate due to the existence of a will.

D. No more because of laches.

Correct : A. Yes, because the probate of a will is imprescriptible as it is mandated by public policy.

5. A executed a will instituting his heirs and X, his illegitimate child whom he recognized. Before his death, he revoked the will. What is the effect of the revocation of the will?

A. The revocation necessarily carries with it the revocation of the recognition of X.

B. The revocation has no effect on X as the will can be used as an authentic writing as proof of filiation.

C. With the revocation of the will, X has yet to go to court and prove filiation with the use of the will.

D. The will has no favorable effect on X because of its revocation and its non-admission to probate.

Correct : B. The revocation has no effect on X as the will can be used as an authentic writing as proof of filiation.

6. Mr. Tiok Chua executed a last will and testament. X, a niece was charged with the crime of forgery alleging that she forged Mr. Chua’s signature. In the meantime, the will was admitted to probate. State the effect of the admission of the will to probate.

A. X can still be prosecuted.

B. X can no longer be prosecuted because the admission of the will to probate is the best evidence of its due execution.

C. The probate of the will is res judicata to the prosecution of X.

D. X cannot be prosecuted anymore because of the presumption of innocence especially with the probate of the will.

Correct : B. X can no longer be prosecuted because the admission of the will to probate is the best evidence of its due execution.

7. A & B are married. They have children, C & D. C has an illegitimate child, E. A died in 2007 and B, C & D inherited from him. C, specifically inherited a house & lot from A located at Ayala Alabang. C died in 2009. Who can inherit from C?

A. B & D alone can inherit from C.

B. E cannot inherit because there is a barrier between illegitimates and legitimates.

C. E can inherit from C because the iron curtain does not apply to C & E.

D. E cannot inherit considering that the only estate C left was his inheritance from A, hence, the iron curtain still applies.

Correct : C. E can inherit from C because the iron curtain does not apply to C & E.

8. A & B are married. They have a son C who is married to D with children, E & F. C & D adopted G. C died in 2006. A died in 2010. Can G inherit by right of representation?

A. G can inherit by right of representation being the son of C.

B. G cannot inherit by right of representation because such right applies only to blood relatives.

C. G can inherit by right of representation because one of the rights of an adopted child is the right of inheritance without any distinction and discrimination.

D. G can inherit by right of representation like E & F otherwise, he would be deprived of his legitime resulting in unfairness.

Correct : B. G cannot inherit by right of representation because such right applies only to blood relatives.

9. X executed a holographic will dated December 2000. After his death, A and B, the heirs filed a petition for probate, but C, the daughter opposed on the ground that the will is not valid because it is not completely dated.

A. C is correct because the law requires that the holographic will must be completely dated;

B. C is not correct because there is substantial compliance with the requirement of the law.

C. C is correct because the incomplete date affects the integrity of the will.

D. C is correct because the complete date protects the will from commission of fraud and trickery.

Correct : B. C is not correct because there is substantial compliance with the requirement of the law.

10. A and B are married. They have children X, Y and Z. Before his death, A donated a parcel of land to X denominated as an irrevocable donation. He died leaving a will but did not institute X. When the will was submitted to probate, X opposed on the ground of preterition. Is X correct?

A. X is correct because he is an heir in the direct line, hence, entitled to his legitime.

B. X is not correct because the donation is an advance inheritance.

C. X is correct because donation being irrevocable is not collationable.

D. X is correct, otherwise, it would be unfair to him being an heir of A.

Correct : B. X is not correct because the donation is an advance inheritance.

11. A executed a 5-page notarial will before a notary public and three witnesses. All of them signed each and every page of the will. One of the witnesses was B, the father of one of the legatees to the will. What is the effect of B being a witness to the will?

A. The will is invalidated;

B. The will is valid and effective;

C. The legacy given to B’s child is not valid;

D. The will is valid and the legacy will be given to B’s child because a will is the voice of the testator even after death.

Correct : C. The legacy given to B’s child is not valid;

12. A executed a holographic will disinheriting his eldest son for a valid and legal reason. He did not institute his children B, C and D. Is there preterition?

A. Yes, because of the total institution of the descendants;

B. Yes, because failure to state the ground for the non-institution of the descendants;

C. No, because B, C and D shall inherit from the estate of A by the rules of intestacy;

D. No, because B, C and D are deemed instituted.

Correct : D. No, because B, C and D are deemed instituted.

13. A executed a holographic will disinheriting his children B but did not institute C and D. Is there a need for the will to be probated?

A. No more, because it would be an exercise in futility as no one will inherit on the basis of the will;

B. Yes, because without the will being admitted to probate the disinheritance shall be ineffective;

C. Yes, because a will shall not pass any right to the heirs unless it is admitted to probate;

D. Both B and C.

Correct : B. Yes, because without the will being admitted to probate the disinheritance shall be ineffective;

14. When does the right of representation take place?

A. In the direct descending line;

B. If there is an adopted child;

C. In the ascending line;

D. Even in the collateral line.

Correct : A. In the direct descending line;

15. In fideicommissary substitution when will there be transmission of rights to the second heir?

A. Upon the death of the testator;

B. Upon the death of the first heir;

C. Upon the death of the last relative of the testator;

D. Upon the execution of the will by the second heir.

Correct : B. Upon the death of the first heir;

16. At the time A executed his will there was a pronouncement that he was insane. A week after he died, but he was already of sound mind. If the will is submitted to probate, how do you think the court will decide?

A. Grant it because A was of sound mind at the time of death;

B. Grant it because the subsequent capacity cured the defect of the void will;

C. Deny probate because the will is void ab initio;

D. Grant it since the will is extrinsically valid and complete

Correct : C. Deny probate because the will is void ab initio;

17. What do you call the act of a testator of designating a person to take the estate in case of default of the instituted heir?

A. Substitution

B. Representation

C. Institution

D. Accretion

Correct : A. Substitution

18. In which of the following is the right of representation inapplicable?

A. In case of predecease of an heir;

B. In case of repudiation by an heir;

C. In case of incapacity of an heir;

D. In case of a valid disinheritance of an heir.

Correct : B. In case of repudiation by an heir;

19. When is the capacity of the testator considered?

A. At the time of the probate of the will;

B. At the time of the death of the testator;

C. At the time of the execution of the will;

D. At the time of the allowance of the will.

Correct : B. At the time of the death of the testator;

20. A executed a will in English, but did not understand the language. If the will is submitted to probate, how do you think the court will decide?

A. Deny probate because the will is void as he did not understand the language;

B. Deny because he could not have written in a language he did not understand;

C. Grant probate provided that it was explained to him in a language understood by him;

D. Deny because of the possibility of fraud.

Correct : C. Grant probate provided that it was explained to him in a language understood by him;

21. A died without leaving a compulsory heir. Before he died, he donated his properties to the church. After his death, his brothers questioned the validity of the donation. Is their act correct?

A. Yes, because they are compulsory heirs;

B. No, because they are not compulsory heirs entitled to a legitimate;

C. Yes, because while the donor can donate his properties, he must leave something to his relatives;

D. Yes, because of the close family ties of Filipinos.

Correct : B. No, because they are not compulsory heirs entitled to a legitimate;

22. A died leaving no compulsory heirs except his brothers and sisters of the full blood and a cousin. How shall his estate be partitioned?

A. The brothers and sisters and the cousin will inherit in equal shares;

B. The brothers and sisters will inherit in equal shares;

C. The cousin will get ½ of the share of each brother;

D. The cousin is not entitled to any share not being a collateral relative who is entitled under the law of intestate succession.

Correct : B. The brothers and sisters will inherit in equal shares;

23. A, the son of X and Y was indebted to B in the amounted of P10M. Should the amount be brought to collation if X and Y paid the same?

A. No, because it is the duty of the parents to support a child;

B. Yes, because it is a donation inter vivos made to A, a compulsory heir, hence, an advance inheritance;

C. No, because A is merely indebted to X and Y;

D. No, because it was not gratuitously given.

Correct : B. Yes, because it is a donation inter vivos made to A, a compulsory heir, hence, an advance inheritance;

24. X and Y sold a house and lot to their son valued at P10M for only P3M with the condition that it will be delivered after their death. After their death, should the property be brought to collation?

A. Yes, because the contract was not a sale but a donation inter vivos;

B. Yes, because it was a donation mortis causa;

C. No, because it was not acquired by gratuitous title but by onerous title; (Reyes v. CA)

D. Yes, because it was a simulated sale as the price is unusually inadequate.

Correct : C. No, because it was not acquired by gratuitous title but by onerous title; (Reyes v. CA)

25. A, while travelling in Cananda executed a will before Philippine Consul B with only two (2) witnesses. Under Canadian Law, two (2) witnesses would suffice. When he arrived in the Philippines he filed a petition for probate. How do you think the court will decide?

A. It will admit the will to probate because of the doctrine of lex loci celebrationis;

B. It will not admit the will to probate unless probated first in Canada;

C. It will deny probate because of failure to comply with the formalities under Philippine law; (Art. 17, NCC)

D. It will admit the will to probate because Canadian laws cannot apply in the Philippines if proven as facts according to the rules of evidence.

Correct : C. It will deny probate because of failure to comply with the formalities under Philippine law; (Art. 17, NCC)

26. The attestation in the will of A omitted to state that the testator signed the pages of the will in the presence of the instrumental witnesses. Can evidence aliunde be admitted to prove such fact in the probate proceeding?

A. Yes, to give due course to the petition for probate;

B. No, because such fact cannot be determined from an examination of the will itself;

C. Yes, because the will of a person is his voice even after his death; (Reyes v. CA)

D. Yes, because the court should give tender care to the will.

Correct : B. No, because such fact cannot be determined from an examination of the will itself;

27. Which is not correct in the following statements:

A. Collation is a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate;

B. Collation is the return to the hereditary estate of property disposed of by gratuitous title by the testator during his lifetime;

C. One of the purposes of collation is to secure equality among the compulsory heirs in so far as it is possible and to determine the free portion after finding the legitime so that inofficious donations may be reduce

D. (6 Manresa 406)

Correct : D. (6 Manresa 406)

28. A lent money to B in 1950 payable in 1951. Despite demand, B failed to pay. In 2011, his daughter who recently became a lawyer sent a demand for payment to B who sent a letter acknowledging the debt and asked for one (1) year to pay but failed to pay within the extended period. A filed a complaint for sum of money. How do you think the court will decide?

A. Dismiss the action due to prescription;

B. Dismiss due to laches;

C. Decide for A because there was a waiver of prescription acquired by B. (Art. 1112, NCC);

D. Dismiss on the ground of estoppel.

Correct : C. Decide for A because there was a waiver of prescription acquired by B. (Art. 1112, NCC);

29. In 1980, during the lifetime of A’s parents he executed a waiver of right over his future inheritance in favor of his brother B. A predeceased his parents. After the death of his parents in 2010, B obtained a title over the whole estate. Can A’s children recover their father’s share?

A. No, because of prescription;

B. No, because of laches;

C. Yes, because laches cannot be set up to resist enforcement of an imprescriptible right, hence the children can vindicate their inheritance despite the lapse of time. (Azner Bros. Realty Corp. v. Heirs of Calipan, 28 May 2004; Heirs of Roman Injug-Tiro v. Casals, 363 SCRA 435);

D. No, because they were not paties to the agreement, hence, they have no personality. (Art. 1397, NCC).

Correct : C. Yes, because laches cannot be set up to resist enforcement of an imprescriptible right, hence the children can vindicate their inheritance despite the lapse of time. (Azner Bros. Realty Corp. v. Heirs of Calipan, 28 May 2004; Heirs of Roman Injug-Tiro v. Casals, 363 SCRA 435);

30. A owes B the amount of P1M. C wrote B that he would take care of the obligation as soon as A had made shipment of copra to the USA. A failed to make the shipment. Is C liable?

A. Yes, because he assumed the obligation voluntarily;

B. No, because he did not assume but merely committed to take care of the debt;

C. No, because the suspensive condition did not happen;

D. Both B and C.

Correct : D. Both B and C.

31. A and B entered into a contract for A to manufacture boxes to be used by B for his export business. B paid the amount of P2M, but A failed to manufacture the boxes despite repeated follow-up of the immediate production of the boxes. B filed a complaint for reimbursement of the P2M.

A. The action will not prosper because of lack of demand by B for A to fulfill his obligation;

B. The action will prosper because the follow-up is the equivalent of demand to comply;

C. The action will prosper because in reciprocal obligations rescission is implied in case of non-performance;

D. The action will prosper, otherwise, A will enrich himself at the expense of B.

Correct : C. The action will prosper because in reciprocal obligations rescission is implied in case of non-performance;

32. A and B entered into a compromise agreement dated April 29, 2007 and approved on July 1, 2007. It states that A will pay B the amount of P1M within one (1) year from the execution of the agreement. What is the reckoning point of the one (1) year period?

A. From the approval of the compromise;

B. From the receipt of the judgment based on compromise;

C. From the date of the execution of the compromise;

D. 15 days after receipt of the judgment. (Santos Ventura Hocorma Foundation, Inc. v. Santos, 5 November 2004).

Correct : C. From the date of the execution of the compromise;

33. A and B entered into a contract, subject to the condition that in case the Senate will not concur in to the treaty, neither party will be liable. The Senate rejected it. Can A invoke force majeure or fortuitous event as a ground to exempt himself from liability?

A. No, because it is not an act of God;

B. Yes, because of the binding effect of contracts;

C. Yes, because while the non-concurrence is foreseeable, it is beyond their control;

D. Yes, because of the principle of liberty of contracts. (Philcomsat Corp. v. Globe Telecom, Inc. 25 May 2004; Sicam v. Jorge, 8 August 2007).

Correct : C. Yes, because while the non-concurrence is foreseeable, it is beyond their control;

34. A borrowed money from Metrobank and executed a mortgage over his house and lot as security. No period has been agreed upon on the date of payment. Before the lapse of ten (10) years, the bank foreclosed the mortgage. Is the bank correct?

A. Yes, because of delay in the payment of the obligation;

B. Yes, otherwise the action to foreclose might prescribe;

C. No, because the proper remedy is for the bank to file an action for the fixing of the perio

D. (Art. 1197, NCC, Pacific Bank v. CA, 5 May 1989);

Correct : C. No, because the proper remedy is for the bank to file an action for the fixing of the perio

35. A lent money to B with a penalty clause providing for 6% per month. In case a suit is filed, what do you think the court will do with the penalty?

A. It will declare it void because it is contrary to law;

B. It will declare it void because it is contrary to public policy;

C. It will reduce the penalty. (Art. 1229, NCC);

D. It will declare the penalty void as it is contrary to morals.

Correct : C. It will reduce the penalty. (Art. 1229, NCC);

36. Which of the following is not correct in connection with the requisites of rescission?

A. It must be gratuitous;

B. It must be accepted by the obligor;

C. The obligation must be demandable. (Art. 1270, NCC);

D. It can be unilateral.

Correct : D. It can be unilateral.

37. A owes money to B evidenced by a PN payable on A’s birthday. When A was celebrating his birthday, B put the PN inside an envelope and delivered it to A. What is the effect of B’s act?

A. Nothing as there was no intention to extinguish the obligation;

B. Nothing as B did not state his intention to condone the obligation;

C. The delivery of the PN implies the renunciation of the action which B had against A; (Art. 1271, NCC)

D. Nothing as condonation must be accepted.

Correct : C. The delivery of the PN implies the renunciation of the action which B had against A; (Art. 1271, NCC)

38. Is a stipulation in a contract of lease granting the lessee an exclusive right to renew the contract valid?

A. No, because it is violative of the principle of mutuality of contracts;

B. No, because validity or compliance cannot be left to the will of only one of the parties;

C. Yes, it is fundamentally part of the consideration in the contract. (Allied Bank v. CA, January 16, 1998)

D. No, it is contrary to law.

Correct : C. Yes, it is fundamentally part of the consideration in the contract. (Allied Bank v. CA, January 16, 1998)

39. The following enumeration is correct, except:

A. Consensual contracts are perfected by mere consent;

B. Real contracts are perfected by the delivery of the object;

C. All contracts are perfected by mere consent;

D. Even if the lessor is obliged to deliver the thing leased, it is still a consensual contract.

Correct : C. All contracts are perfected by mere consent;

40. Consent in a contract is manifested by any of the following acts, except:

A. Delivery of downpayment;

B. Delivery of earnest money;

C. Delivery of option money;

D. Delivery of a letter accepting the offer with qualification.

Correct : D. Delivery of a letter accepting the offer with qualification.

41. The following are correct in connection with contracts of adhesion, except:

A. Prepared by only one of the parties and the other merely affixed his signature;

B. They are void as they are one sided;

C. They are binding as ordinary contracts;

D. Due to their peculiar nature, their validity is determined in light of the circumstances under which the stipulations are intended. (Sps. Ermitaño v. CA, April 21, 1999)

Correct : B. They are void as they are one sided;

42. An action pauliana is an action to rescind contracts in fraud of creditors. The following are its requisites, except:

A. Plaintiff asking for rescission has a credit prior to the alienation although demandable later. (Panlilio v. Victoria, 35 Phil. 706)

B. Debtor has made a subsequent contract conveying a patrimonial benefit to a third person.

C. Creditor has no other legal remedy.

D. The third person was not a party to the fraud.

Correct : D. The third person was not a party to the fraud.

43. A is indebted to ABC Corporation in the amount of P100M. Despite efforts to collect from A, the latter failed to pay due to business reverses as he has no more assets. In order to maintain a more accurate inventory of the worth of its current assets, ABC Corp. was forced to write-off A’s obligation. One (1) year later, A won the lotto draw in the US in the amount of $100M. Learning of the good luck of A, it demanded for payment, but A refused to pay contending that his obligation was extinguished when it was written-off. Is A correct?

A. A is correct because write-off is a mode of extinguishing an obligation.

B. A is correct because write-off is a compromise of liability.

C. A is correct because write-off is a condonation of an obligation.

D. A is not correct because in making the write-off, only the creditor takes action by removing the uncollectible account from its books even without the approval or participation of the debtor, hence, there is no extinguishment of the obligation. (Reyna, et al. v. COA, G.R. No. 167219, February 8, 2011)

Correct : D. A is not correct because in making the write-off, only the creditor takes action by removing the uncollectible account from its books even without the approval or participation of the debtor, hence, there is no extinguishment of the obligation. (Reyna, et al. v. COA, G.R. No. 167219, February 8, 2011)

44. X communicated to Y that he was selling his house and lot and gave him an option to buy the same up to the end of the month of September. Y accepted the offer with an agreement that Y will allow X to stay in his house in Los Angeles, California during Christmas time that year. Is the option binding upon X?

A. The option is not binding since no payment in the form of money was delivered to X by Y.

B. The option is not binding because no property or anything of value was delivered to X by Y.

C. The option is binding as the consideration can be in an undertaking.

D. The option is not binding or void because no consideration at all was paid.

Correct : C. The option is binding as the consideration can be in an undertaking.

45. A was employed by ABC Co. as manager in Metro Manila subject to the condition that if A will be severed from the company, voluntarily or involuntarily, he cannot get involved in any business of the same nature with ABC’s business in Metro Manila within a period of six (6) months from severance. Is the stipulation valid?

A. The stipulation is not valid because it is contrary to public policy.

B. The stipulation is not valid because it is contrary to law, as it is a restraint of trade.

C. The stipulation is valid because of the principle of mutuality of contracts.

D. The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage.

Correct : D. The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage.

46. When A’s obligation to B became due and demandable, A offered to pay, but refused to accept payment. State the remedies of A.

A. A must make a tender of payment to B.

B. A must make a tender of payment and deposit the amount in court.

C. A can go direct to court and deposit the amount due in court.

D. A must make a tender of payment, deposit the amount in court and make a subsequent notice.

Correct : D. A must make a tender of payment, deposit the amount in court and make a subsequent notice.

47. A & B entered into an oral contract of sale of A’s car worth P4.5M where the object was supposed to be delivered upon payment of the price. When A went to B’s house to pay the price, the latter refused to sell hence, a complaint for specific performance was filed by A. will the complaint prosper?

A. The complaint will not prosper because the contract is not enforceable as it is not in writing.

B. The complaint will prosper because a contract can be valid in whatever form it may be entered into.

C. The complaint will not prosper because the contract is void as it was not put into writing.

D. The complaint will prosper because of the principle of mutuality of contracts.

Correct : A. The complaint will not prosper because the contract is not enforceable as it is not in writing.

48. A is a contractor, building roads for the government which has not paid him P100M. Before he filed his income tax returns, he wrote a letter to the BIR Commissioner proposing a set-off between the State and A considering that his tax liability amounts to P10M and the State has not paid him despite demand. Is A correct?

A. A is correct because the State and A are mutually debtor and creditor of each other.

B. A is not correct because tax is the life blood of the government.

C. A is correct, otherwise, the State would enrich itself at the expense of A.

D. A is not correct because a tax is different from an ordinary debt, and they are not mutually debtors and creditors of one another.

Correct : D. A is not correct because a tax is different from an ordinary debt, and they are not mutually debtors and creditors of one another.

49. A is indebted to B in the amount of P2M. When the obligation became due and demandable B delivered to A his car and A accepted it. A month later A sued B for sum of money. Can B interpose the defense of dacion en pago?

A. B can interpose the defense of dacion en pago, because of the acceptance of the object.

B. B can interpose the defense of extinguishment of the obligation by way of novation.

C. B can interpose the defense of novation since the delivery of the car resulted in a change of relationship.

D. B cannot interpose the defense of novation because novation cannot be presumed, it must be expressly agreed upon.

Correct : D. B cannot interpose the defense of novation because novation cannot be presumed, it must be expressly agreed upon.

50. A called up B that he was selling his house and lot for P10M. Within one (1) hour after B accepted the offer, he invited A for dinner at the Manila Hotel where B paid the dinner in the amount of P5,000.00. They agreed that the P5,000.00 was the downpayment. A receipt for the payment of P5,000.00 for the dinner was issued. When A refused to sell, B sued for specific performance. Is B correct?

A. B is correct because the contract has been partially executed due to the agreement that the P5,000.00 paid for their dinner constituted the downpayment.

B. B is not correct since the contract is unenforceable as it was not put to writing.

C. A is wrong because the contract is unenforceable as there was no payment of the price.

D. The contract is valid because it has all the elements of a valid contract.

Correct : A. B is correct because the contract has been partially executed due to the agreement that the P5,000.00 paid for their dinner constituted the downpayment.

51. ABS-CBN entered into a contract with WR under certain terms and conditions. Both parties violated their contract, to the extent that WR transferred to another station despite the contract.

A. ABS-CBN can rescind the contract because of material breach committed by WR.

B. WR can rescind the contract due to violations committed by ABS-CBN.

C. The court will not grant rescission because of mutual breach.

D. The court will not rescind the contract, but will just temper the award of damages in its judgment.

Correct : D. The court will not rescind the contract, but will just temper the award of damages in its judgment.

52. What is the remedy if a document does not reflect the true intention of the parties?

A. File an action to annul;

B. File an action to nullify;

C. File an action for reformation;

D. File an action to enforce.

Correct : C. File an action for reformation;

53. Who may file an action to annul a contract?

A. Any person;

B. A party primarily or subsidiarily bound;

C. The State as protector of the rights of its citizens;

D. Heirs of a party.

Correct : B. A party primarily or subsidiarily bound;

54. What is the remedy of a party whose right of first refusal to buy a property was violated?

A. Action for declaration of nullity of the contract;

B. Action for rescission;

C. Action for annulment;

D. Action to declare the contract unenforceable.

Correct : B. Action for rescission;

55. In which of the following is a contract of sale not perfected?

A. Giving of downpayment;

B. Giving of earnest money;

C. Giving of option money;

D. Accepting the offer.

Correct : C. Giving of option money;

56. The following statements are correct, except:

A. A right of first refusal is without any consideration;

B. In granting a right of first refusal, the period has yet to be determined at a future time;

C. In granting a right of first refusal, the amount to be paid will be determined at a future time;

D. A right of first refusal must be supported by a consideration in the form of money to be binding. (Vasquez v. CA)

Correct : D. A right of first refusal must be supported by a consideration in the form of money to be binding. (Vasquez v. CA)

57. All the statements below are correct, except:

A. An option contract is separate and distinct from the contract of sale;

B. An option contract must be supported by consideration distinct from the price;

C. An option contract can only be supported by consideration in the form of money;

D. An option contract can be supported by consideration in the form of an undertaking.

Correct : C. An option contract can only be supported by consideration in the form of money;

58. A and B entered into a contract for A to construct a 20-door apartment for B. Payment shall start after the construction of ten (10). A subsequent agreement was entered into that payment will start after construction of seven (7). What is the effect of the subsequent agreement?

A. It is extinguished the obligation partly because of novation;

B. It is a modificatory novation as there was a change in the principal terms and conditions of the contract;

C. It is an extinctive novation as the two (2) agreements are incompatible;

D. It did not alter the relationship as it has no effect at all.

Correct : B. It is a modificatory novation as there was a change in the principal terms and conditions of the contract;

59. A entered into a contract of sale over B’s house and lot but since there is a balance which remained unpaid, A executed a mortgage over the house and lot. A failed to pay. Can B rescind the contract?

A. Yes, because of material and substantial breach;

B. Yes, because there was delay in the payment of the price;

C. No, because the relationship is no longer that of buyer and seller, but mortgagor and mortgagee.

D. No, because the remedy is to foreclose the mortgage, rescission not being the principal remedy, but merely subsidiary.

Correct : D. No, because the remedy is to foreclose the mortgage, rescission not being the principal remedy, but merely subsidiary.

60. A, was a consistent scholar at a prestigious university enjoying free tuition fees, books, clothing and housing allowances and was given a cash allowance of P25,000.00 per month. Due to some family problems, he decided to go back to General Santos City and enrolled at Holy trinity College, but before he could obtain his credentials, he was required to refund the amount of P300,000.00 equivalent to the privileges he enjoyed as that was the condition in the scholarship grant. Can he recover the amount?

A. No, because the contract is the law between the parties;

B. No, because of the principle of mutuality of contracts;

C. Yes, because the stipulation is contrary to morals and public policy. (Cui v. Arellano Univ., May 30, 1961; Art. 1306, NCC)

D. No, because of the principle of solution indebiti.

Correct : C. Yes, because the stipulation is contrary to morals and public policy. (Cui v. Arellano Univ., May 30, 1961; Art. 1306, NCC)

61. X brought a house and lot from Y valued at P5M. He paid P3M and for the balance, he executed a promissory note with interest at 10% to be paid within 90 days. ABC Corporation executed a surety for the balance. X failed to pay, hence, ABC paid the amount and sued X for the interest and the principal. X contended that he is not bound due to novation when Y accepted the security. Is X correct?

A. Yes, because there is complete incompatibility between the PN and the surety bond;

B. No, because the two contracts, PN and surety can stand together, the surety being merely an accessory to the original contract;

C. Yes, because of implied novation;

D. Yes, because the surety is a new and separate contract.

Correct : B. No, because the two contracts, PN and surety can stand together, the surety being merely an accessory to the original contract;

62. State the effect of illegal or immoral conditions in donations con causa onerosa. (onerous donations.)

A. The condition is considered as not imposed regardless of whether negative or positive;

B. Since the donations are governed by the law on contracts, the impossible or illicit conditions annul the obligation dependent upon the condition where the condition is positive and suspensive;

C. The illegal condition annulled the donation/contract even if the impossibility merely supervened;

D. Impossible or illegal conditions do not annul totally the obligations which depend upon them.

Correct : B. Since the donations are governed by the law on contracts, the impossible or illicit conditions annul the obligation dependent upon the condition where the condition is positive and suspensive;

63. A sent a document letter to B and obligated himself to give him P10M when he will feel like doing it. A year later, B wanted to enforce the commitment of A. What would be your advice if you were the counsel?

A. I would advice him to enforce it because the letter is akin to a contract;

B. I would advice him to enforce it because the letter is a source of a demandable obligation;

C. I would not advice him to enforce since the promise is void as the performance depends upon the sole will of A; (Art. 1182, NCC)

D. I would advice him to enforce because the letter is an express acknowledgment of an obligation.

Correct : C. I would not advice him to enforce since the promise is void as the performance depends upon the sole will of A; (Art. 1182, NCC)

64. A and B entered into a contract of sale over A’s property. The document that evidences the contract did not state how much was paid, but A delivered the property to B. What is the nature of the contract?

A. Void;

B. Valid;

C. Unenforceable;

D. Rescissible.

Correct : B. Valid;

65. A school granted scholarship to EC but subject to the condition that if he will transfer to another school, he will refund all benefits he has already enjoyed. Is the stipulation valid?

A. Yes, because of the principle of mutuality of contracts;

B. Yes, because of the principle of relativity of contract;

C. No, because it is contrary to morals and public policy;

D. No, because it is contrary to law.

Correct : C. No, because it is contrary to morals and public policy;

66. When A borrowed money from B, the latter gave him a check for P10M as it was a Sunday. Was the contract of mutuum perfected?

A. Yes, because the contract is valid in any form;

B. Yes, because the delivery of the check in an evidence of perfection;

C. Yes, because of the principle of mutuality;

D. No, unless the proceeds of the check shall have been delivered.

Correct : D. No, unless the proceeds of the check shall have been delivered.

67. A induced B to violate his contract with C resulting in damage to C. Under what rule is A liable for damages?

A. Liability is based on contract;

B. Liability is based on crime;

C. Liability is based on tort;

D. there is no basis for liability of A die to lack of privity.

Correct : C. Liability is based on tort;

68. The following are void contracts, except:

A. Where the stipulation is contrary to law, public order, public policy, morals;

B. Where the object is inexistent;

C. Where the price or consideration is not reflected in the document that evidences that contract;

D. Where the stipulation refers to an impossible condition.

Correct : C. Where the price or consideration is not reflected in the document that evidences that contract;

69. What is the nature of a contract where the buyer did not pay the price?

A. Void;

B. Rescissible

C. Voidable;

D. Unenforceable.

Correct : B. Rescissible

70. A sold his house and lot to B for P10M payable in 10 monthly installments. B paid P9M but failed to pay the last installment. What is the remedy of A?

A. Can file an action to declare the contract void;

B. Can file an action to rescind the contract;

C. Can file an action to enforce and collect the balance;

D. Can file an action to rescind.

Correct : C. Can file an action to enforce and collect the balance;

71. X, Y & Z entered into a contract of loan with A obligating themselves solidarily to pay to A without need of demand on June 16. A condoned X’s obligation; Y is insolvent. How much can A collect if the amount is P900,000.00?

A. The full amount because anyone of the solidary debtors can be required to pay.

B. P300,000.00 because of the condonation and insolvency of two (2) of the solidary debtors.

C. P600,000.00 by suing X & Z where Z will pay P300,000.00 plus P150,000.00 as his share in Y’s obligation and where X will pay P150,000.l00 as his share in Y’s obligation, but with a right of reimbursement.

D. P900,000.00 chargeable against Z but with right of reimbursement.

Correct : C. P600,000.00 by suing X & Z where Z will pay P300,000.00 plus P150,000.00 as his share in Y’s obligation and where X will pay P150,000.l00 as his share in Y’s obligation, but with a right of reimbursement.

72. X and Y executed a contract of lease, which provides as follows: “In the event that the lessee fails to pay on or before the due date of payment herein specified, the contract is deemed automatically terminated” and the lessee can be evicted without need of judicial order. Suppose that Y, the lessee fails to pay the rentals after giving a demand letter, may X, the lessor evict Y immediately?

A. No, because it is a principle in law that a person cannot take the law into his own hands.

B. No, because judicial order is required.

C. Yes, because X, as the owner has a superior right to possess the property.

D. Yes, under the principle of mutuality of contract.

Correct : D. Yes, under the principle of mutuality of contract.

73. A has in his possession B’s car. He sold it to C without the consent of B, but one day thereafter B sold the same car to B. Who is the owner of the car?

A. B because the sale by A to C is void;

B. C, because A’s title which he acquired from B passed to C by operation of law;

C. B because A could not have sold what he did not own;

D. C because of estoppel.

Correct : B. C, because A’s title which he acquired from B passed to C by operation of law;

74. A & B are married. Out of the inheritance of A in the amount of P10M, they bought a house and lot and registered it under the name of B. State the relationship between A & B?

A. B can claim to be the exclusive owner being the registered owner.

B. B is holding the property for the conjugal partnership since there is a presumption of conjugality of a property acquired by onerous title during the marriage.

C. B is holding the property in trust in favor of A.

D. B can properly contend that the property shall be divided into two(2) upon the dissolution of their marriage.

Correct : C. B is holding the property in trust in favor of A.

75. In 1990, A, B & C purchased a real property but agreed that the same be registered under the name of A. In 2009, B & C asked for partition, but A contended that he was already the exclusive owner more than 20 years on the ground of laches having lapsed since the registration of the property under his name. Is A correct?

A. A is not correct because he is merely a trustee in an express trust.

B. A is not correct because he did not repudiate the trust, it being an express trust.

C. A is correct due to laches, B & C having kept silent for so long.

D. A is correct because one year after the registration of the property, his title became indefeasible.

Correct : B. A is not correct because he did not repudiate the trust, it being an express trust.

76. A is the owner of a parcel of land covered by TCT No. 1. Through an oral agreement between B & A. A agreed that the property be registered under the name of B so that he can use it in securing a loan with Metrobank. When A sought to recover the property from B, the latter refused contending that he was the owner of the same. Is the contention of B correct?

A. B is correct because his ownership is evidenced by a title.

B. B is wrong because he is holding the property merely in trust for A.

C. B is correct because A cannot prove that there is trust considering that the same was not put into a public instrument.

D. A can recover and prove that there was trust even if not in a public instrument because the requirement is merely for purposes of convenience.

Correct : D. A can recover and prove that there was trust even if not in a public instrument because the requirement is merely for purposes of convenience.

77. With abuse of confidence, A was able to register a real property belonging B in 1990. B discovered it in 2011. Can B file an action to recover his property?

A. Yes, because the title of A is void;

B. Yes, provided that he files an action within four (4) years from the discovery of the act of A;

C. No, because the action has prescribed as 10 years have already passed since the registration of the property;

D. Yes, because there was no act of repudiation of the trust.

Correct : C. No, because the action has prescribed as 10 years have already passed since the registration of the property;

78. Which of the following statements is correct?

A. A verbal trust on immovable is void;

B. Verbal trust on immovable may be proven as the requirement that it be in writing is not for its validity but for purposes of enforceability;

C. Verbal trust on immovable cannot be waive since the law requires it to be in writing which is mandatory;

D. Verbal trust on immovable cannot be proven in court as it is covered by the Statute of Frauds.

Correct : B. Verbal trust on immovable may be proven as the requirement that it be in writing is not for its validity but for purposes of enforceability;

79. A sold a car to B on installment basis secured by a chattel mortgage over the thing and a promissory note co-signed by C. A failed to pay four (4) monthly installments. Under the contract in case of non-payment, the vendor can exercise any of the remedies under Art. 1484, NCC and in case of deficiency, the seller can recover the balance. What is the remedy of A?

A. A can file an action for the foreclosure of the mortgage and recover the unpaid balance because of the contract.

B. A can foreclose the mortgage and recover the unpaid balance because the Chattel Mortgage Law does not prohibit recovery.

C. A can foreclose the mortgage but cannot recover the unpaid balance because it is absolutely prohibited by law.

D. A can foreclose the mortgage and can recover the unpaid balance from C since B & C are solidarily liable.

Correct : C. A can foreclose the mortgage but cannot recover the unpaid balance because it is absolutely prohibited by law.

80. A entered into a contract of sale over his undivided 1/5 of the estate of his father during the pendency of the intestate proceeding with the condition that the same shall be approved by the intestate court. Is the contract valid?

A. The contract is void because the right is a mere expectancy since the estate has not yet been divided.

B. The contract is valid only if the court approves it.

C. The contract is valid because the condition that it be approved by the court is a mere condition for performance.

D. The contract is void because approval of the court must be obtained before the sale.

Correct : C. The contract is valid because the condition that it be approved by the court is a mere condition for performance.

81. A sold a parcel of land covered by TCT No. 9 to B. At the time of the sale, B knew that C has been in possession of the parcel of land as early as 10 years before the sale. B however checked with the Registry of Deeds and found the title to be clean. Is B a buyer in good faith?

A. B is a buyer in good faith because at the time of the sale, the title was clean.

B. B is a buyer in good faith because he merely relied upon the face of the title.

C. B is not a buyer in good faith because he had actual knowledge of facts and circumstances that would impel him to make inquiry into the status of the land due to the presence of C.

D. B is a buyer in good faith because there was no annotation of C’s right if there be any.

Correct : C. B is not a buyer in good faith because he had actual knowledge of facts and circumstances that would impel him to make inquiry into the status of the land due to the presence of C.

82. A is the owner of a parcel of land. He entered into a contract to sell with B with an obligation to pay the price within one (1) year. B failed to pay. State the effect of non-payment.

A. The contract is rescissible, for failure of B to pay.

B. The contract is void for failure to pay the price.

C. A does not need to perform an act of rescission because the payment of the price is a positive suspensive condition, the happening of which would result in A executing the deed of sale.

D. A can go to court and compel B to pay.

Correct : C. A does not need to perform an act of rescission because the payment of the price is a positive suspensive condition, the happening of which would result in A executing the deed of sale.

83. A & B entered into a contract of sale, A, obligating himself to deliver his house and lot to B who obligated himself to pay P2M upon delivery. B has already paid, but A has not delivered the house and lot despite demand. State the remedy of B.

A. B can sue A for rescission of the contract because of breach of contract.

B. B can sue A for rescission because of a material breach.

C. B can sue A for rescission because of lesion.

D. B can sue A for declaration of nullity of the contract.

Correct : B. B can sue A for rescission because of a material breach.

84. What is the nature of a contract which states that in case the buyer complies with the terms and conditions of the same, the seller shall execute and deliver to the buyer a deed of sale?

A. Contract of sale ;

B. Contract to sell;

C. Conditional sale;

D. Installment sale.

Correct : B. Contract to sell;

85. X and Y entered into a contract of sale over a parcel of land with an area of 4,000 square meters more or less. When the title was issued, it was 14,475 sq. meters. The buyer contended that he owned the whole lot of 14,475 sq. meters as it was sold in lump sum, hence, the seller should deliver the whole lot. Is the buyer correct?

A. The buyer is correct because in sale in lump sum, the whole property is sold regardless of the area;

B. The seller can be compelled to deliver the 14,475 sq. meters because it is covered by the phrase “more or less”;

C. The seller cannot be compelled to deliver the 14,475 sq. meters because the phrase “more or less” covers only a reasonable excess deficiency;

D. The seller can be required to deliver the 14,475 sq. meters because the numerical data are not the sole gauge of unreasonableness of the excess or deficiency in area.

Correct : C. The seller cannot be compelled to deliver the 14,475 sq. meters because the phrase “more or less” covers only a reasonable excess deficiency;

86. A, B, C, D are the co-owners of a parcel of land. A sold his undivided share to X with the knowledge of his co-owners. One (1) year after the sale, they wanted to exercise the right of legal redemption, but A and X refused. Whose contention is correct?

A. They are not entitled to exercise the right of legal redemption because the 30-day period has already lapsed as they knew of the sale;

B. They can exercise the right of legal redemption within 20-days from receipt of written notice of the sale;

C. They cannot exercise the right of legal redemption because knowledge of the sale is not equivalent to registration hence, the 30-day period has already lapsed;

D. They cannot exercise the right of legal redemption due to estoppel.

Correct : A. They are not entitled to exercise the right of legal redemption because the 30-day period has already lapsed as they knew of the sale;

87. A sold his house and lot to B worth P1M for P100,000.00. Is the sale valid?

A. Yes, even if there is gross inadequacy.

B. Voidable;

C. No, because the price is simulate

Correct : A. Yes, even if there is gross inadequacy.

88. A and B entered into a contract of sale over A’s house but did not reflect the actual purchase price. What is the nature of the contract?

A. Valid and relatively simulated contract but can be reformed.

B. Void as there is total lack of consideration.

C. Voidable due to lack of consideration.

D. Unenforceable.

Correct : A. Valid and relatively simulated contract but can be reformed.

89. A sold his house to B for an agreed price. Before it could be delivered it was hit by lightning and it was totally lost. State the effect of the loss.

A. A bears the risk of loss as he has not yet vested ownership to B.

B. A has to bear the risk of loss because he was in possession of the house at the time of loss.

C. B bears the risk of loss as an exception to the principle of res perit domino;

D. A has to bear the risk of loss since he was negligent.

Correct : C. B bears the risk of loss as an exception to the principle of res perit domino;

90. What is the nature of an earnest money?

A. Same as option money.

B. It is proof of an intention to buy.

C. It is actually a partial payment of the purchase price and considered as proof of the perfection of the contract. (Topacio v. CA, 211 SCRA 219; Laforteza v. Machuca, 333 SCRA 642)

D. It forms part of the consideration even if the sale is not perfected or consummated. (Chua v. CA, 401 SCRA 54)

Correct : C. It is actually a partial payment of the purchase price and considered as proof of the perfection of the contract. (Topacio v. CA, 211 SCRA 219; Laforteza v. Machuca, 333 SCRA 642)

91. A entered into a contract of sale with pacto de retro over B’s house & lot. The house is valued at P10M. B failed to exercise the right to repurchase. State the effect of B’s failure to exercise the right to repurchase.

A. B can consolidate his ownership to become the owner.

B. B need not consolidate his ownership because by the mere lapse of the period to repurchase, he became the owner.

C. B cannot consolidate his ownership because that would amount to pactum commissorium.

D. B cannot sell the property as he is the owner.

Correct : B. B need not consolidate his ownership because by the mere lapse of the period to repurchase, he became the owner.

92. A, a practicing lawyer represented B in the intestate proceedings of his father. The agreement is on a contingency basis as B did not have money to pay the services of A. To secure the payment of B’s obligation, they executed a mortgage over ¼ of what B will receive from the estate of his father. Is the mortgage valid?

A. Yes, because what is prohibited by law is sale between the client and the lawyer;

B. Yes, because it merely serves as security for the payment of an obligation;

C. No, because even if what is prohibited by law is sale, it is a circumvention of the law;

D. Yes, because of the liberty of contracts.

Correct : C. No, because even if what is prohibited by law is sale, it is a circumvention of the law;

93. A obtained a loan from B. To secure the payment of the obligation, A delivered the warehouse quedans to B and authorized him to sell the sugar in case of default. The warehouse and the sugar were burned. Who bears the loss?

A. B bears the loss because he became the owner of the sugar when the quedans were delivered to him;

B. B because of the principle of res perit domino;

C. By reason of the principle of res perit domino A bears the risk of loss;

D. B because of the constructive delivery of the sugar.

Correct : C. By reason of the principle of res perit domino A bears the risk of loss;

94. In the following, there is no need for the issuance of a license to sell, except:

A. Sale of subdivision lot resulting in the partition by co-owners;

B. Sale of the original purchaser of a subdivision lot or his heirs;

C. Sale by a subdivision developer;

D. Sale of a subdivision lot for the account of the mortgagee.

Correct : C. Sale by a subdivision developer;

95. If there is a subdivision lot buyer and there is no development and he does not pay, to what extent can he ask for reimbursement of his payments?

A. Total amount paid;

B. 25%;

C. 50%;

D. Total amount paid including interest but excluding delinquency interest at the legal rate.

Correct : D. Total amount paid including interest but excluding delinquency interest at the legal rate.

96. The following rules are correct in case the buyer of a subdivision lot fails to pay the installments, except:

A. He is given a grace period of 20 days for every year of payment;

B. He is entitled to 50% reimbursement of payment;

C. There may be cancellation of the contract 30 days after receipt of notice of cancellation;

D. All payments are forfeited.

Correct : D. All payments are forfeited.

97. A entered into a contract to sell over a residential lot. He has already paid more than 2 years installments. Thereafter, he failed to pay. What right does A have if the contract is cancelled?

A. He has the right of reimbursement of all his payments regardless of the number of years of payment;

B. He has the right to seek for a grace period of 1 month for every year of installment payments;

C. He has the right of refund of the cash surrender value of the payments on the property equivalent to 50% of the total payments made;

D. He has the right of reimbursement of 100% of his installments after payment for five (5) years.

Correct : C. He has the right of refund of the cash surrender value of the payments on the property equivalent to 50% of the total payments made;

98. If the buyer of a subdivision lot in a contract to sell under the Maceda Lawfails to pay after payment of at least two (2) years of installments, can he still pay the balance?

A. Yes, with additional interest he can pay the unpaid installments due with a grace period of one (1) month for every year of installment payments;

B. Yes, without additional interest he can pay the unpaid installments with a grace period of one (1) month for every year of installment payments;

C. Yes, provided that he pays additional amount of penalty;

D. Yes, provided that he pays the full amount of the price.

Correct : B. Yes, without additional interest he can pay the unpaid installments with a grace period of one (1) month for every year of installment payments;

99. If the seller cancels the contract to sell under the Maceda Law, when will it take effect after receipt of notice of cancellation or demand for rescission by notarial act?

A. 10 days

B. 30 days

C. 20 days

D. One (1) year

Correct : B. 30 days

100. How often can the buyer under the Maceda Law make use of the grace period of one (1) month for every year of installment payments?

A. Every 10 years of the life of the contract and its extensions if any;

B. Every five (5) years of the life of the contract;

C. Every two (2) years of the life of the contracts;

D. There is no limit.

Correct : B. Every five (5) years of the life of the contract;