QUIZ BOWLERS’ SOCIETY

RFBT (OBLICON, NEGO, PARTNERSHIP) EXAM

OBLIGATIONS AND CONTRACTS

1. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises,
however, he shall acquire no real right over it until the same has been delivered to him.

2. It is the failure to perform an obligation on time which failure amounts to violation of the
obligation.

3. Responsibility arising from fraud is demandable in all obligations while those arising from
negligence in the performance of every kind of obligation is also demandable.

4. In alternative obligation, the creditor maybe compelled to receive part of one and part of another
undertaking.

5. Solidarity may exist although the creditors and debtors may not be bound in the same manner and
by the same periods and conditions.

6. Which of the following contracts cannot be ratified?

a. Those whose cause or object did not exist at the time of the transaction.
b. Unauthorized contracts
c. Those where both parties are incapable of giving consent.
d. Those that fail to comply with the Statute of Frauds.

7. Which of the following contracts is rescissible?

a. Those where one of the parties is incapable of giving consent to a contract,
b. Those where both parties are incapable of giving consent to a contract.
c. Those which are entered into by guardians whenever the wards whom they represent suffer a
lesion of more than 1/4 of the value of the object of the contract,
d. Those which are absolutely simulated or fictitious.

8. The Statute of Frauds applies only to:

a. wholly executed contracts.
b. contracts wholly or partially executed on the part of the debtor.
c. contracts wholly or partially executed on the part of the creditor,
d. wholly executory contracts.

9. Andy is the representative of Babes, an absentee sells a house and lot valued at P1,000,000 for
only P600,000. The contract is:
a. Valid c. Unenforceable
b. Rescissble d. Voidable

10. To defraud his creditor Carlo, Melody sold his condominium unit to Jane. When Carlo is now
collecting his credit, Orlando lent Melody enough money to cover all his debt with Carlo. The sale of
the Condominium unit:
a. The sale cannot be rescinded because Carlo can collect the claim due him.
b. The sale can be rescinded because this is an act to defraud the creditor
c. The sale cannot be rescinded because there is no vices of consent.
d. The sale can be rescinded on the ground that the sale was undertaken in fraud of creditor Carlo
when the latter cannot in any other manner collect the claims due them.

11. Angelita Madaya, guardian of Nene Batambata, a minor, sold the palay harvested from the land
belonging to Nene Batambata for P39,000.00 on January 15, 2008. The palay had a value of
P80,000.00. At the time of the sale, Nene Batambata was only seventeen (17) years and 354 days
old. On July 25, 2012, Nene wants to recover the damages he suffered under the contract entered
into by his guardian. What is the remedy available to Nene Batambata?
a. Annulment because Nene Batambata was only 17 years and 354 days old at the time the sale
was made by Angelita Madaya.
b. Rescission because Nene Batambata suffered lesion of P41,000.00.
c. Both rescission and annulment at the option of Nene Batambata.
d. Nene batambata cannot rescind nor annul the contract.

12. The debtor shall lose the right to make use of the period in the following cases, except:
a. when he becomes insolvent.
b. when he violates any undertaking in consideration of which the creditor agreed to the period.
c. when the debtor attempts to abscond.
d. when he does not furnish any guaranty or security to the creditor.

13. Which of these is not a conditional obligation?

 a. D is to pay C P1,000,000 if he finishes his LL.B. at the V.P. College of law.
b. D will pay C P500,000 as soon as his financial means will permit him to do so.
c. D is to pay C P2,000,000 ten days after his 80th birthday.
d. D will pay C P1,000,000 twenty days after he passes the C.P.A. exams for October 2008.
e. None of the above.

14. A, B and C are joint and several liable to D amounting to P900,000. D allows C an extension of two
years within which to pay his portion of the indebtedness. In this case:
a. D can compel A or B to pay him the entire P900,000.
b. D can compel A or B or C to pay him P600,000.
c. D can demand only P300,000 each from A and B.
d. D can compel only A or B to pay him P600,000.

15. A, B and C are solidary debtors of X in the amount of P3,000.00. X renounces the share of A and A
accepts the renunciation. Thereafter, B becomes insolvent.
e. C alone will be liable for the balance of P2,000.00
f. A will be liable for P500.00, while C will be liable for P1,500.00.
g. C will be liable for his share of P1,000.00. A will no longer be laible since his share was already
renounced by X.
h. A will be liable for P1,000.00 while C will be liable for P1,000.00 for the remaining balance of
P2,000.00.

16. Consider the following statements:

I. In obligation with a penal clause, the penalty that substitute the indemnity for damages and the
payment of interest, if there is no stipulation to the contrary
II. The nullity of the penal clause in an obligation carries with it the nullity of the principal
obligation.
i. Statement I is true c. Both statements are true
j. Statement II is true d. Both statements are false

NEGOTIABLE INSTRUMENTS

1. In a signature by procuration, the principal is bound only in case the agent acted within the actual limits
of his authority. The signature of the agent in such a case operates as notice that he has: (Easy)
a. a qualified authority to sign.
b. a limited authority to sign.
c. a special authority to sign.
d. full authority to sign.

2. Under the Negotiable Instruments Law, a signature by procuration operates as a notice that the agent
has but a limited authority to sign. Thus, a person who takes a bill that is drawn, accepted, or indorsed
by procuration is duty-bound to inquire into the extent of the agent's authority by: (Average)
a. examining the agent’s special power of attorney
b. examining the bill to determine the extent of such authority
c. asking the agent about the extent of such authority
d. asking the principal about the extent of such authority.

3. To accommodate M, drawer of promissory note, A signed an indorser thereon, and the instrument was
negotiated to H, a holder for value. At the time H took the instrument, he knew A to be only an
accommodation party. When the promissory note was not paid, and H discovered M to be without funds,
he sued A. A pleads in defense the fact that he had indorsed the instrument without receiving value
therefore, and the further fact that H knew at the time he took the instrument that A had not received
any value or consideration of any kind for his indorsement. Is A liable? (Difficult)

a. No. A is not liable because he may raise a defense of lack of consideration.

b. No. A is not liable because he merely accommodate M and based on the fact stated, at the time H
took the instrument, he has knowledge that A is only an accommodation party. Hence his
knowledge amounted to such notice of infirmity of defect of title.
c. Yes, A is liable to H. Under the Negotiable Instrument Law, an accomodation party shall be liable to
a holder for value although the latter may have known that he was merely an accommodation
party.
d. Yes. A is liable to H. Under the Negotiable Instrument Law, lack of consideration is a real defense
and it is not a valid defense against a holder in due course like H.

4. If the drawer and the drawee are the same person, the holder may present the instrument for payment
without need of a previous presentment for acceptance. In such a case, the holder treats it as a; (Easy)
a. non-negotiable instrument.
b. promissory note.
c. letter of credit.
d. check.
5. Which of the following are wrong construction and interpretation of negotiable instruments? (Average)

a. Words prevail over figure

b. Written words prevail over printed provisions
c. If the instrument is undated, the instrument is deemed dated at its issue.
d. Interest stipulated runs from the date its issue.

6. Which of the following indicate negotiable instrument? (Easy)

a. The subject is goods

b. This is a mere evidence of title
c. It is in itself property with value
d. The intermediate party are not secondary liable if the document is dishonored.

7. The promise or order is conditional, hence non-negotiable? (Average)

a. "I promise to pay B or order P40.000". (Signed Y)

b. "Pay B or order P40.000". (Addressed to Z signed by Y)
c. "Pay B or order P40,000 and reimburse yourself out of my money in your possession". (Addressed
to Z signed by Y)
d. "Pay B or order P40,000 out of my money in your possession". (Addressed to Z signed by Y)

8. Placido, a bank depositor, left his checkbook on his desk at his house. Unknown to him, a visitor at the
time, noticing the same, took a check therefrom, filled it up in the amount of P3,000 and succeeded in
encashing the check on the same day. Placido’s account was thereby debited in the same amount.

Discovering the erroneous debit, Placido demanded that the bank credit him with a like amount. The
bank refused on the ground that Placido was negligent in leaving his checkbook on his desk so that he
could not put up the defense of forgery or want of authority under the Negotiable Instrument Law.

The facts disclose that even to the naked eye, there were marked differences between Placido’s
signature and the one in the check forged by the visitor. As between Placido and the bank, who should
bear the loss? (Difficult)

a. The bank should bear the loss because the bank warrants the genuineness of the signature of its
current depositor.
b. The bank is not liable because the sole cause of the loss is due to the negligence of Placido in
leaving his checkbook on his desk at his house.
c. Placido must suffer the loss because he is negligence in keeping his checkbook.
d. Placido should bear the loss because the bank exercise reasonable diligence in determining that the
signature is not forged.

9. Statement 1: The Negotiable instrument provides that a holder not in due course cannot recover on the
instruments. (Average)

Statement 2: A holder in due course who acquires a bearer instrument from a thief or finder will have a
superior right over the previous holder from whom it is stolen or who has lost it.

a. Only the 1st statement is true

b. Only the 2nd statement is true
c. Both statement are not true
d. Both statement are true

10. A as maker makes a promissory note for P500,000 payable to the order of B as payee. The note is
successively negotiated from B to C to D. D died leaving as an only heir S. S becomes the owner of the
note – (Easy)

a. By assignment c. By operation of law

b. By negotiation d. None of the above

11. A makes a promissory note payable to the order of B, but delivers it to C. Who may be considered
holder of the note? (Difficult)

a. B c. Both B and C
b. C d. Neither B nor C

12. A holder not in due course has the following rights, except: (Average)

a. He may receive payment and if the payment is in due course the instrument is discharged.
 b. He may sue on the instrument, in his own name.
c. He cannot recover on the instrument.
d. He is entitled to the instrument but holds it subject to the same defense as if it were non-
negotiable.

13. Which of the following circumstances would prevent a person from becoming a holder in due course of
an instrument (Difficult)

a. The person was notified that one of the prior indorses was discharged
b. The person was notified that payment was refused
c. The note was a collateral for a loan
d. The note was purchased at a discount

14. Identify the following indorsement (Difficult)

"Pay to A, without recourse" Sgd. P

a. Qualified c. Special qualified

b. Blank d. Qualified restrictive

15. 1st- The holder may at any time strike out any endorsement that is not necessary to his title. The
endorser whose signature is struck out, and all subsequent endorsers, is thereby relieved from liability
on the instrument.

2nd- Where the instrument is negotiated back to a prior party, such party may reissued and further
negotiate the same but he is not entitled to "enforce payment thereof against any intervening party to
whom he was personally liable, (Difficult)

a. Both are true.

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

16. M makes a note payable to the order of P. P indorses the note to A, A to B, B to C, C to D, D to E, and E
back to A. Based on the foregoing, which of the following statements is incorrect? (Difficult)

a. A may renegotiate the promissory note.

b. A cannot go after B, C, D and E.
c. B, C, D and E enjoy temporary defense if A is the holder.
d. If the instrument is renegotiated by A to F, the latter cannot go after B, C, D and E.

17. M makes a promissory note that states: “I, M, promise to pay Php5,000.00 to B or bearer. Signed, M.”
M negotiated the note by delivery to B, B to N, and N to O. B had known that M was bankrupt when M
issued the note. Who would be liable to O? (Average)
a. M and N since they may be assumed to know of M's bankruptcy
b. N, being O's immediate negotiator of a bearer note
c. B, M, and N, being indorsers by delivery of a bearer note
d. B, having known of M's bankruptcy

18. The rule is that the intentional cancellation of a person secondarily liable results in the discharge of the
latter. With respect to an indorser, the holder's right to cancel his signature is:
a. without limitation.
b. not limited to the case where the indorsement is necessary to his title.
c. limited to the case where the indorsement is not necessary to his title.
d. limited to the case where the indorsement is necessary to his title.

PARTNERSHIP

1. A partnership without a definite period of existence and which can be dissolved at any time by any of
the partners is called:
a. Universal partnership of all present property
b. Universal partnership of profits
c. Particular partnership
d. Partnership at will

2. Which of the following is considered prima facie evidence of the existence of a partnership?
a. Where payment of interest on a loan varies with the profits of the business.
b. The receipts by a person of a share of the profits.
c. The sharing of gross returns of a business.
 d. Where the parties are established as co-owners of a property.

3. True or False
A partnership can be a partner in another partnership?

4. The following are the effects of unlawful partnership except one, Which is it?
a. The contract is void ab initio and the partnership never existed in the eyes of the law;
b. The profits shall be confiscated in favor of the government;
c. The instruments or tools and proceeds of the crime shall be forfeited in favor of the government;
d. The contributions of the partners shall be confiscated in favor of the government.

5. Which of the following will not cause the automatic dissolution of a limited partnership?
a. Death of a general partner c. Insolvency of a general partner
b. Death of limited partner d. Insanity of a general partner

6. PATOK Enterprises, a partnership engaged in the business of renting out video films, is owned by
Patricia, Alice, Tina, Olga, and Kaye, with Olga and Kaye as the managers. Diana owes PATOK
Enterprises P6,000.00 and Olga, P4,000.00. Both debts are unsecured and are already due. Diana pays
Olga P4,000.00 for which Olga issues her own receipt.
a. The payment should be applied to Olga's credit only.
b. The payment should be applied to PATOK's credit only.
c. The payment should be divided proportionately between PATOK and Olga, at P2,400.00 and
P1,600.00, respectively.
d. The payment should be divided equally between PATOK and Olga at P2.000.00 each.

7. A limited partner is liable as a general partner:

I. If he is also a general partner.
II. If he participates in the management of the partnership.
III. If he allows his surname to be included in the partnership name.
The statement is true with respect to:
a. I and II c. II and III
b. I and III d. I, II and III

8. C, a partner in "C" partnership, assigns his interest in "Y" partnership to X, who is not made a partner.
After assignment X asserts the right to
1. Participate in the management of "Y" partnership.
2. C's share in the surplus profit
3. May compel the other partners that he (X) becomes a partner.
X is correct as to which of these rights?
a. 1 and 3 c. 2 only
b. 3 only d. 2 and 3

9. All partners are liable solidarity with the partnership for the purpose of making good the loss:
a. Where one partner acting within the scope of his apparent authority receives money or property of a
third person and misapplies it.
b. Where the partnership in the course of its business receives money or property of a third person
and the same is misappropriated by any partner while it is in the custody of the partnership.
c. Where by any wrongful act or omission of any partner acting in the ordinary course of the business
of the partnership or with the consent of his co-partners loss or injury is caused to any person who
is not a partner in the partnership.
d. All of the above

10. Who may file the petition for the dissolution of a partnership?
a. The partners” themselves
b. The purchaser of a partner’s interest
c. Either (a) or (b)
d. Any person, whether or not he has an interest in the partnership.

11. These statements are presented to you:

I. As a rule, a limited partner is not a proper party to proceedings by or against a partnership.
II. A limited partner may, however, be a proper party if the object of the proceeding is to
enforce a limited partner’s right against the partnership or a limited partner’s liability to the
partnership.
In your evaluation of the foregoing statements:
a. Both statements are true c. Only statement I is true
b. Both statements are false d Only statement II is true.

12. Lala, a limited partner in Blue Co., Ltd., received the amount of P100,000.00 representing his
contribution which was being returned on the date stipulated in the certificate. Partnership records,
however, showed that the firm had liabilities of P220,000.00 which arose before Lala received the
return of his contribution and assets of ony P90,000.00 after such return of contribution.
a. Lala is bound to bring back to the partnership the amount of P100,000.00 plus interest thereon
 b. Lala is bound to give the partnership P220,000.00 plus interest thereon
c. Lala is not bound to return to the partnership P130,000.00 plus interest
d. Lala is not bound to return to the partnership any amount because he received the return of his
contribution pursuant to a contractual stipulation.

13. Which of the following omissions will make a partnership formed as a limited partnership liable as a
general partnership?
I. The certificate is not signed and sworn to by all the partners.
II. The certificate is not registered with the Securities and Exchange Commission.
III. The partnership name does not include the word “Limited” or “Ltd.”, its abbreviation in the
certificate.
a. I and II c. I and III
b. II and III d. I, II and III

14. These statements are presented to you:

III. As a rule, a limited partner is not a proper party to proceedings by or against a partnership.
IV. A limited partner may, however, be a proper party if the object of the proceeding is to
enforce a limited partner’s right against the partnership or a limited partner’s liability to the
partnership.
In your evaluation of the foregoing statements:
c. Both statements are true c. Only statement I is true
d. Both statements are false d Only statement II is true.

15. A limited partner is prohibited on account of his claim against the partnership from performing the
following acts, except:
a. To receive or hold as collateral security any partnership property
b. To receive from a general partner or the partnership any payment conveyance or release from
liability, If partnership assets are not sufficient to discharge partnership liabilities to outside
creditors
c. Transact business with the partnership
d. None of the foregoing.

16. Lala, a limited partner in Blue Co., Ltd., received the amount of P100,000.00 representing his
contribution which was being returned on the date stipulated in the certificate. Partnership records,
however, showed that the firm had liabilities of P220,000.00 which arose before Lala received the
return of his contribution and assets of ony P90,000.00 after such return of contribution.
e. Lala is bound to bring back to the partnership the amount of P100,000.00 plus interest thereon
f. Lala is bound to give the partnership P220,000.00 plus interest thereon
g. Lala is not bound to return to the partnership P130,000.00 plus interest
h. Lala is not bound to return to the partnership any amount because he received the return of his
contribution pursuant to a contractual stipulation.

17. A limited partner shall be liable as general partner in 3 of the following cases. Which one is the
exception?
a. When he is a general-limited partner as stated in the certificate
b. When he takes part in the control of the business
c. When he participates in the management of the business
d. When his surname which appears in the partnership name is also the surname of a general
partner.

18. Which of the following omissions will make a partnership formed as a limited partnership liable as a
general partnership?
IV. The certificate is not signed and sworn to by all the partners.
V. The certificate is not registered with the Securities and Exchange Commission.
VI. The partnership name does not include the word “Limited” or “Ltd.”, its abbreviation in the
certificate.
c. I and II c. I and III
d. II and III d. I, II and III

19. The partnership is not bound in three (3) of the following acts of a partner after dissolution.
However, it is bound in one. Which is it?
a. Where the partner acting is insolvent.
b. When it is unlawful to carry on the business.
c. When the partner has no authority to wind up partnership affairs and the third person is a
previous creditor who had no knowledge of the partner’s lack of authority.
d. When a partner has no authority to wind up partnership affairs and the third person is a new
creditor who has not read the publication of the lack of authority of the partner in a newspaper
of general circulation in the place or places where the partnership business is carried on.

20. A, B and C are partners in ABC Company each one contributing P100,000.00 and with C as
managing partner. On April 1, 2018, A died. The following day, C, unaware of the death of A
contracted a debt of P180,000.00 to PC a previous creditor of the partnership[ who also did not
know of A’s death. Assuming that the remaining assets of the partnership amounted to
P120,000.00, PC can collect P120,000.00 from ABC Company and:
a. P60,000.00 from B or P60,000.00 from C.
b. P30,000.00 from B and P30,000.00 from C.
c. P20,000.00 from the estate of A, P20,000.00 from B and P20,000.00 from C.
d. P60,000.00 from C alone because he contracted the debt after the partnership has been
dissolved.