Accounting 202B-Business Law

Midterm Exam

Name: LAST NAME, First Name M.I

General Instruction: Deadline of Submission will be before 5PM today

(September 4,2020). Late submissions will be deducted 10% each day.
Use this format for the title of your docx. Acctg 202A midterm exam, LAST
NAME, First Name
For those who will submit hard copies you are required to take a photo of your
exam to prove that you have answered your exams before the deadline.

PART I TRUE OR FALSE 40 points

Instruction: Write TRUE if the statement is correct and write FALSE if the
statement is wrong. If the statement is FALSE, then give a brief explanation on
what made the statement wrong. Write your answer on the space provided below
the question. (Two points each)

1. In alternative obligations, all the objects promised by the debtor to the creditor
are all due.

2. “Novation may be presumed”.

3. The debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value as, or more valuable than that which
is due.

4. A solidary creditor can assign his rights even without the consent of the other
creditors.

5. D is obliged to give C a specific ring. However, if he so desires, D may instead

give C P5,000. This is an example of an obligation with a penal clause.

6. In facultative obligations, there are two objects due but the obligor can deliver
one thing due and the obligation is extinguish.

7. “I will give you P10,000 if you pass the May 2021 CPA examination”. On the
first day, of the examination that is May 12, I poisoned you and you failed to take
the examination. The next day my obligation is extinguished because you cannot
pass the examinations anymore.

8. In an obligation that is impossible of division, the debt can be enforced only by

proceeding against all the debtors. If one of the debtors should be insolvent, the
other shall not liable for his share.

9. If a third person paid the debt of the debtor whose obligation has prescribed, A
can recover.
10. D obliges himself to give C a specific ring, upon failure, D will give C P5,000.
This is a case of facultative obligation.

11. A obliged himself to deliver to B Malagona passenger jeepney with engine No.
69 and chassis No. 88. In case A failed to deliver the jeepney, the court may
compel A to deliver the jeepney plus damages.

12. Whoever pays for another may demand from the debtor what he has paid,
except that if he paid without the knowledge or against the will of the debtor,
he cannot recover anything.

13.Payment by an incapacitated debtor or one who does not have free disposal of
the thing due is not a valid payment.

14. A minor who pays a sum of money or delivers fungibles to the creditor is not
entitled to recover of payment if the creditor had spent or consumed the same in
good faith.

15. D owes C P30,000 due on September 31. C owes D P12,000 due on

September 31. D’s obligation is guaranteed by G. On the due date D is insolvent.
G is liable to C for P30,000, G cannot set up compensation because he is not the
principal debtor.

16. Substitution of the person of the debtor should always be with that debtor’s
consent.

17. In case of conflict between a general and a special law, the general law shall
prevail.

18. “I promise to give you P23,000 bills” This is an example of a determinate

object.

19. If debtor is obliged to do and he fails to do it, creditor may sue debtor for
specific performance.

20. The indivisibility of an obligation necessarily implies joint obligation unless

solidarity is expressly stipulated in the obligation.

PART II MULTIPLE CHOICE QUESTIONS 20 Points

Instruction: Write the Letter of your answer on left side of the question. Use
CAPITAL LETTERS. (One point each)

1.A1, A2 and A3 oblige themselves solidarily to give C a specific car valued

P1,200,000. On the due date, C demanded delivery but the debtors failed to
deliver. The next day, while A1 still in possession of the car, it got lost due to
fortuitous event. The right of C is
a. None, obligation is totally extinguished
b. Proceed against any of the debtors for the value and damages
c. Proceed against A1 only, because he is the one is possession at the time it
was lost
d. Proceed against A2 or A3 but only P400,000 each.

2.I will give you a specific car if you will not marry X this year, 2020. Which of the
following statements is incorrect?
a. If on December 25, X died and no marriage took place, my obligation is
extinguished because the expected event cannot occur anymore
b. If on December 25 you marry X, my obligation is extinguished because you
violated the condition
c. If the year has ended, and no marriage took place, both parties are still alive,
my obligation becomes effective (not extinguished) because the time indicated
has already elapsed
d. If on December 25, X entered the convent, the obligation can be demanded
immediately because it is clear that the marriage will not take place anymore.

3.Which is not a source of obligation?

a. Law c. Culpa Contractual
b. Culpa Aquilana d. Quasi Contract

4.D obliged himself to give C a specific car if the latter cannot make a circle that is
at the same time a square.
a. The obligation is impossible, therefore void.
b. The obligation is void because the condition is outside the commerce of man.
c. D cannot be obliged to deliver at all.
d. Answer not given.

5.A-1 and A-2 are solidary debtors of B-1, B-2 and B-3, joint creditors in the
amount of P90,000. How much can B-3 collect from A-2?
a. B-3 could collect P30,000 from A-2.
b. B-3 could collect P90,000 from A-2 and give P30,000, each to B-1 and B-2.
c. B-3 could collect P45,000 from A-2 and give P13,000, each to B-1 and B-2.
d. B-3 could collect P15,000 from A-2 and P13,000 from A-1.

6. Amazed by the skill of X who can paint portraits using paint brushes inserted in
his right armpit, Y entered unto a contract with the former to have his own portrait
done and gave X P50,000 as full payment therefore. After he has started painting
the portrait but before its completion, X was sideswiped by a speeding car while
walking beside the railway causing the doctors to have his right arm amputated,
In this case what is the remedy of Y?
a. Nothing, as the service became impossible by reason of an act independent of
the will of the debtor.
b. Equivalent performance in terms of damages
c. Specific performance by compelling X to go on painting Y's portrait.
d. Substitute performance by allowing a third person to do his portrait with
expenses therefore charged to X.

7. In novation which of the following is incorrect?

a. If the new obligation is void, original obligation shall subsist
b. In expromission, the insolvency of the new debtor shall not revive, the action of
the creditor-against the original debtor
c. If the original obligation is subject to a suspensive condition, the new obligation
is not subject to the same condition unless stated
d. If the original condition is resolutory, the new is also subject to a resolutory
condition, unless otherwise stated
8. A is obliged to give B his only car on September 1, 2007. On the said date, A
did not deliver despite demand from B. On September 2, 1997, an earthquake
completely destroyed the car. Is A still liable?
a. No. Considering that no demand to deliver was made by B and the specific
thing was lost, due to fortuitous event, the obligation is extinguished.
b. No. The obligation is extinguished, even if the debtor is already in default
because the debtor can plead impossibility of performance.
c. Yes. A is already in legal delay, thus the obligation to deliver the lost specific
thing is converted into monetary claim plus damages.
d. Yes. The creditor can instead demand for a substitute of equivalent value from
the debtor.

9. With regard to the right as to the fruits of the thing, which is not correct?
a. If the obligation is subject to a suspensive condition, the obligation to deliver
arises from the moment the condition happens.
b. If the obligation is subject to a suspensive period, the obligation to deliver
arises upon the expiration of the term or period.
c. If there is no condition or term for its fulfillment, the obligation to deliver arises
from the perfection of the contract or creation of the obligation.
d. If the obligation arises from a contract of sale, the vendor has a right to the
fruits of the thing from the time the obligation to deliver arises.

10. An obligation which cannot be enforced by court action, but which is binding
on the party who makes it in conscience and according to natural justice is called
a. Civil obligation c. Pure obligation
b. Natural obligation d. Simple obligation

11. Statue of Frauds is applicable to

a. Partially executed
b. Oral contract of loan when the amount involved is less than
P500
c. Contract not to be performed within a year from the making
thereof
d. All of the above.

12. Must be in writing to be enforceable:

a. Lease of land for 12 c. Both of a and b
months
b. Lease of car for 18 months d. None of a and b

13. A conferment of a direct benefit in a contract between two persons in

favor of a third person who must accept such benefit before the same is
withdrawn is known as:
a. Policitacion c. donation propter nuptias
b. Stipulation por autrui d. Counter-offer

14. A is obliged to give B either Objects Nos. 1, 2, or 3 at B’s option. Before B

communicated his choice to A, Object No. 1 had been destroyed thru A’s fault
and object No. 2 had been destroyed by a fortuitous event. B may
a. Demand objet No. 3 only as it is still available
b. Demand the price of the object No. 1 only plus damages because it was
destroyed by A’s fault
c. Demand the value of object No. 2 as the right choice belongs to B
d. Demand either object No. 3 or the price of object No. 1 plus damages

15. The following are example of quasi-contracts, except:

a. Solution indebiti
b. Negotiorium Gestio
c. Implied Contract
d. Support given by a stranger without knowledge of the person obliged

16. Miss X is a passenger in a jeepney driven by Mr. D and owned by Mr. O. The
jeepney was rear-ended by another jeep owned by Mr. TP. Investigations disclosed
that the fault was due to the driver of Mr. TP. Which is not correct?
a. Miss X may sue Mr. TP under the culpa aquiliana theory.
b. Miss X may sue the driver of Mr. TP under the culpa criminal theory.
c. Miss X may sue Mr. O under a breach of contract of carriage.
d. Mr. O in a suit by Miss X for breach of contract may defend by alleging that the
proximate cause of the accident was the jeepney of Mr. TP.

17. The following are requisites of fortuitous event, except:

a. Must be independent of the will of debtor.
b. Could not be foreseen, or if foreseen, is evitable.
c. It renders it impossible for the debtor to comply with his obligation
d. Debtor is not at fault or negligent

18. Generic things never perish. Which of the following illustrates an exception to
this rule?
a. Loss of my Toyota car, when I obliged myself to deliver a Toyota car to creditor.
b. Loss of my P20,000 and wallet, when I obliged myself to deliver P20,000 to
creditor.
c. Loss of a certain box of Samsung containing 5 units of Samsung phones, when I
obliged myself to deliver 1 unit of Samsung phone from this box.
d. any of the above.

19.In this kind of delivery, the obligor remains in possession of the property,
through in another in another capacity not as an owner.
a. Traditio longa manu c. Traditio brevi manu
b. Traditio constitutum possessorium d. Quasi-traditio

20. In which of the following instances is demand from the creditor is not needed
so that debtor will incur delay?
a. When a partner fails to deliver his contributions on the period stipulated.
b. In a contract of sale, when the purchaser has already paid the price and there is
no stipulation as to the object by the seller.
c. When debtor is obliged to deliver a specific object to creditor but before the
specified date of delivery, debtor sold and delivered same object to a buyer in
good faith.
d. Any of the above.

PART 111 ESSAY 40 POINTS

Instruction: Give a brief explanation to each questions. (four points each)

1. A owes B P100,000 payable December 31 , 2020. B had two legitimate

children. B died before maturity. Can the heirs of B collect from A on maturity?

2. A owes B P10,000 payable whenever A’s means will permit him to pay. Is it a
conditional obligation or an obligation with a period? What is the remedy of the B if
A cannot pay within a reasonable period of time?

3.A to give B his car if A will go to Manila before September 21, 2020. Is the
condition valid? Explain.
4. A to give B P10,000 if A wins first prize in the Sweepstakes this month.
Suppose A wins the third prize. Can B demand the P10,000? Explain.

5. B bought from A a Lyric Piano to be delivered to B on Dec 25, 2020. Pending

delivery, the Lyric Piano deteriorates through the fault of A. What is the right of B?

6. A owes solidary creditors X,Y, and Z P30,000 payable on December 31,2020.

Suppose X, on maturity makes a demand om A to pay to him. A agreed but on his
way to pay X, he met Y, the solidary co-creditor, and A paid to him instead. Is A’s
obligation to X,Y, and Z extinguished? Explain.

7. A and B are joint creditors mancumunados of X and Y, joint debtors, for a total
sum of P90,000. A owes 1/3 of the credit, B owes 2/3 of it. But X owes 2/5 of the
debt, and Y owes 3/5 of the debt. In this case how much can A collect from X?
Show your computation and explain.

8. A owes X, Y, and Z P300,000. On maturity , A cannot pay his creditors, so he

assigns to them all of his property. A owes X 100,000, Y for 50,000 and Z for
150,000.
8.1 How it will be applied if the sales proceeds are 350,000?

8.2 How it will be applied if the sales proceeds are only 250,000?

9. A owes solidary creditors X, Y and Z P100,000. X waives the whole obligation

debt of P100,000 to A but Y and Z did not agree on the remission. What is the
remedy of Y and Z?

10. A owes B P50,000 payable Dec. 13,2020 with X as guarantor