The Professional CPA Review School

Main: 3F C. Villaroman Bldg. 873 P. Campa St. cor Espana, Sampaloc, Manila
 (02) 735 8901 / 0917-1332365
email add: crc_ace@yahoo.com
Baguio Davao
2nd Flr. #12 CURAMED Bldg. Marcos Highway, Baguio City 3/F GCAM Bldg. Monteverde St. Davao City
 (074) 6200710/0967-3847348  0917-1332365

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS MAY 2023 BATCH

FIRST PRE- BOARD EXAMINATION FEB 11, 2023; 12:00NN-3:00PM

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one
answer for each item by writing a SHADING corresponding to the letter of your choice on the
answer sheet .

1. To have the effect of payment, debts in money should be made in currency stipulated by the parties
or:
A. In currency which is legal tender in the Philippines.
B. By the delivery of manager’s check or cashier’s check
C. By the delivery of promissory note or bills of exchange.
D. By the delivery of a property as equivalent of payment

2. Mrs. Moh sold her car for Php2m to Mrs. Koh. There was no fixed date for the performance of the
obligations of both parties. The obligations of Mrs. Moh as vendor is:
A. To wait for Mrs. Koh to pay Php2m and deliver the car.
B. To deliver the car immediately as this is a perfected contract.
C. To deliver the car after Mrs. Koh demands for its delivery.
D. To rescind the contract because no time or date is fixed for the performance of their respective
obligations.

3. 1st Statement - The conveyance of ownership of a thing as an accepted equivalent of performance is

called dation in payment which is cumulative and governed by the law on sales
2nd Statement – A potestative condition will render an obligation void.
A. Both statements are wrong C. 1st is correct, 2nd is wrong
B. Both statements are correct D. 1st is wrong, 2nd is correct

4. Clara owes Crisistomo Php1m, guaranteed by Cecilio. Crisistomo assigned his credit to Cristina.
Cristina assigned her credit to Criselda. Criselda assigned her credit to Clara. The obligation of Clara
is extinguished because of:
A. Compensation C. Novation
B. Confusion D. Rescission

5. Fidel is indebted to Crispin in the amount of Php1m. Fidel voluntarily and even after the prescription
of the debt, paid Crispin on January 27, 2023. Now Fidel would like to recover what he paid. In this
case:
A. Fidel must institute a case for recovery under the principle of solutio indebite
B. Under the law the creditor has no right to demand payment of an obligation after it has
prescribed and therefore Crispin has unjustly enriched himself
C. Fidel cannot recover because payment is a mode of extinguishing the monetary obligation.
D. Fidel cannot recover because what he fulfilled is a natural obligation

6. Atoy, Bitoy and Caloy executed a promissory note binding themselves to pay P9,000 to Tito, Vic and
Joey. The note is now due and demandable. Can the creditors proceed against Atoy alone for the
payment of the entire debt?
A. No, each creditor can collect only P3,000 from Atoy.
B. Yes, any of the creditors can collect P9,000 from Atoy.
C. No, each creditor can collect only P1,000 from A.
D. Yes, since the promissory note is silent with respect to the rights of the creditors, the obligation
is presumed to be solidary.
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 2

7. Boy Favaya, a jeepney driver, driving recklessly, caused serious physical injuries to his passenger
Biboy and pedestrian Diday. As a result, which of the following is not correct?
A. Biboy may proceed against Boy for culpa criminal
B. Biboy may proceed against Boy for culpa contractual
C. Diday may proceed against Boy for culpa aquiliana
D. Diday may proceed against Boy for culpa criminal

8. Which of the following relative to the fruits of a determinate thing is false?

A. The creditor has a right to the fruits of the thing subject matter of the obligation from the
perfection of the contract
B. The creditor has a right to the fruits of the thing subject matter of the obligation from the time
the fruits are physically delivered to him
C. The creditor has a right to the fruits of the thing subject matter of the obligation from the
moment of the meeting of the minds
D. The creditor has a right to the fruits of the thing subject matter of the obligation from
the time the obligation to deliver the thing arises

9. Buknoy promised to give to Totoy a specific dog on Christmas day in year 2022. As of today, Buknoy
has not made the delivery. Is Buknoy in delay?
A. No, because Buknoy has no capacity to deliver
B. Yes because Buknoy’s liability is due and demandable
C. No, because Totoy has not demanded the performance of the obligation
D. Yes because the debtor loses the benefit of the period and the obligation is demandable at
once.

10. Bob promised to give his Nissan X-trail car if Baby will pass the CPA board exams on October 2022.
Before the results of the exams, the car was destroyed by typhoon “Dagit”. Baby passed the
October 2022 CPA board exams. Is Bob’s obligation extinguished?
A. Yes because the car was lost thru a fortuitous event
B. No. Bob must give another car
C. Yes if Bob will deliver the value of the car without liability to pay damages
D. No because the period was established for the benefit of the debtor

11. Which of the following is an accessory thing?

A. milk from a cow
B. mango tree
C. pendant of a necklace
D. video camera

12. Bok borrowed P10,000 from Boy secured by a mortgage contract. Without the knowledge of Bok,
Bong paid Boy P10,000 to release the debt of Bok. As a result:
A. Bong can recover what he paid from Bok.
B. Bong cannot recover what he paid from Bok because the payment was made without the
debtor’s consent
C. Bong can recover what he paid from Boy in case Bok is insolvent
D. Bong can foreclose the mortgage property of Bok

13. Mario Magulang ordered Atoy, a ten-year old boy, to climb a slippery tree, and promised to share
with him part of the fruits. The boy fell and was killed. Mario is liable for damages because of his
fault or negligence, which is referred to as a
A. Delict.
B. Contract.
C. Quasi-delict.
D. Quasi-contract.

14. When the thing improves pending the fulfillment of the suspensive condition with the expense of the
debtor, the improvement shall inure to the benefit of:
A the party who made the improvement C. the debtor
B. partly by the debtor and partly by the creditor D. the creditor
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 3

15. During the pendency of the criminal case against a thief, the car he stole was lost through an
accidental fire. Prior to the accident, several demands were made for the owner to receive the return
of the car, but the owner refused to receive the same without any reasonable ground. This will result
to:
A. extinguishment of the obligation to return the car because an accidental fire is always a
fortuitous event.
B. extinguishment of the obligation to return the car because the owner is guilty of delay
C. extinguishment of the civil obligation because the value of the car will be converted into the
number of days the thief will serve in prison.
D. liability of the accused to pay the price of the car as the obligation will not be extinguished
because the obligation proceeds from a criminal offense.

16. Fraud is distinguished from negligence:

A. Responsibility arising therefrom is demandable.
B. An action to enforce liability arising from a past act may be waived
C. There is a voluntary act
D. There is deliberate intention to cause damage or prejudice

17. If a borrower of a non-consumable lends the object to a third person, or saves his property instead of
the thing borrowed, he shall be liable even in case of fortuitous event, because
A. The nature of the obligation requires the assumption of risk.
B. The parties have expressly stipulated such liability.
C. The law expressly so provides.
D. He is automatically guilty of legal delay

18. Not a requisite of stipulation pour autrui

A. The contracting parties must have clearly and deliberately conferred a favor upon third person
B. The stipulation must be part of the contract
C. The third person communicated his acceptance to the obligor before it revocation
D. There must be an agency between either of the parties and the third person

19. Real contracts, such as deposit, pledge, and commodatum are not perfected until -
A. Acceptance of the terms of the contract.
B. Consent of the contracting parties.
C. Delivery of the object of the obligation.
D. Contract must be in a public instrument.

20. Damaso owes Tiago Php2m payable on March 26, 2023. Which of the following statements is
correct?
A. If Damaso dies before the due date, Tiago cannot collect from the heirs of Damaso
B. If Damaso dies before the due date his obligation is not extinguished
C. If Tiago dies before the due date, his heirs cannot recover from Damaso
D. If both parties die, the heirs of of Tiago will be liable to the heirs of Damaso

21. One is not a rescissible contract

A. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due them
B. Those which are entered into by guardians wherever the words whom they represent suffer
lesion by more than ¼ of the value of the things which are the object thereof
C. Those agreed upon in representation of absentees, if the latter suffer a lesion of more than ¼
of the value of the object of the contract
D. Those where one of the parties is incapable of giving consent to a contract

22. January 2, 2023 Tasyo signed a letter addressed and delivered to Consuelo. The terms of the
former are:
a) An offer to sell a 1hectare farm lot for Php100k
b) Date of payment will be on or before Feb. 1, 2023
c) Upon payment of the Php100k, the parties will execute and sign a Deed of Sale.
On Feb. 6, 2023, Tasyo sent a letter to Consuelo asking for a new price of Php250k.
On Feb. 10, 2023 Tasyo received the letter of acceptance of Consuelo to the Jan. 2, 2023 letter of
Tasyo.
Can Consuelo compel Tasyo to accept the Php100k and make him sign and execute a Deed of
Sale?
A. No, Tasyo was able to withdraw his offer before acceptance
B. Yes, Tasyo is already estopped by his signed letter and offer.
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 4

C. Yes, there was actual meeting of the minds.

D. Yes, the contract is perfected.

23. Obligation No. 1 - X obliged himself to give to Y his brand new Omega watch if the latter can make a
circle that is at the same time a square.
Obligation No. 2 - X obliged himself to give to Y his brand new Omega watch if Juan will not rise from
the dead
A. B. C. D.
Obligation No. 1 Valid Void Valid Void
Obligation No. 2 Valid Void Void Valid

24. The right of the creditor to exercise all the rights of his debtor to satisfy his claim, except rights which
are inherent and personal on the part of the debtor.
A. accion pauliana C. accion causante
B. accion subrogatoria D. accion incidente

25. Selya sold to Delia a fake jewelry on July 1, 2020. Delivery was made on August 1, 2020. Payment
was made on September 1, 2021. On Feb 1, 2022, Delia discovered that the jewelry is fake. May
Delia ask for the annulment of the contract on Feb 14, 2026?
A. No more because the action has already prescribed.
B. No more because the period for prescription will have to be reckoned from July 1, 2020.
C. No because Leng should be considered to have been in estoppel in buying the watch.
D. Yes because the right to sue against fraud does not prescribe

26. 1st Statement – An offer must be absolute and acceptance must be certain before there can be
meeting of minds between the parties.
2nd Statement – Real contracts are not perfected by mere consent of the parties regarding the
subject matter and the cause of the contract
A. B. C. D.
1st Statement False False True True
2nd Statement False True True False

27. The expenses of consignation when properly made, shall be charged against the
A. parties C. government
B. obligor D. obligee

28. 1st Statement - Bonnie sold her ward’s house worth P5m for only P4.5m, the contract is rescissible
2nd Statement - Bobby, 17 years old, sold his house worth P1M for only P700,000, the contract is
rescissible because he suffered a lesion by more than one-fourth of the value of the said house.
A. Both statements are false. C. First false, second true.
B. Both statements are true. D. First true, second false.

29. An oral contract of sale involving an immovable property is:

A. voidable C. unenforceable
B. rescissible D. void or inexistent

30. "facio ut facias" means:

A. I give and you give C. I do and you give
B. I give and you do D. I do and you do

31. Case 1 – A hired B for P10,000 to kidnap C, and he paid B P5,000 in advance. Before B could
kidnap C, A relented and stopped B from performing the contract. A may recover from B the P5,000
paid in advance.
Case 2 – A, at gun point, compels B to sell his car to A. Since the contract is voidable, either A or B
has the right to file the action for annulment.
A. Both cases are false.
B. First case is false, second case is true.
C. Both cases are true.
D. First case is true, second case is false.

32. Fidel promised to sell to Elias his lot and house in the province if Fidel decides to live in Manila. This
is an example of what kind of condition?
A. Potestative resolutory on the part of the debtor
B. Potestative suspensive on the part of the debtor.
C. Casual condition.
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 5

D. Potestative suspensive on the part of the creditor.

33. The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation have been lost or compliance of the
obligation has become impossible. The indemnity shall be fixed taking as a basis the value of the
A. Choice of the creditor. C. Last thing which disappeared.
B. Most expensive thing. D. First thing which disappeared.

34. A, B and C solidarily bound themselves to deliver to X a Honda Motorcycle. The obligation was not
fulfilled through the fault of A. Thereupon, X filed an action in court against C and the court awarded
P36,000 to X. Which of the following situations is valid?
A. If C pays X the P36,000, C can collect from A P26,000 and B P12,000. Later, B can ask for
reimbursement from A P12,000.
B. X must collect P12,000 each from A, B and C to satisfy the court’s award of P36,000.
C. If C pays X the P36,000, C can collect from B P10,000 and from A P16,000.
D. X cannot collect the whole amount of P36,000 from C.

35. In the absence of an agreement to the contrary what shall be the basis of payment of an obligation in
case there should supervene, an extraordinary inflation or deflation of the currency stipulated?
A. The value of the currency at the time of the establishment of the obligation.
B. The value of the currency at the due date of the obligation.
C. The value of the currency shall be fixed by courts.
D. The value of the currency shall be determined by an expert from the Central Bank.

36. Sources of obligations as provided by law, except

A. Torts C. Culpa aquiliana
B. Contracts D. Solutio indebiti

37. Which of the following does not result to extinguishment of the obligation
A. Arrival of a resolutory period C. Remission
B. Annulment D. Happening of the suspensive condition

38. In Facultative obligations, if substitution has been made, which of the following is false?
A. The obligation is extinguished
B. The loss of the original prestation is immaterial
C. The obligation is converted into a simple obligation
D. The obligation ceases to be facultative

39. Which of the following is true?

A. In delagacion, the insolvency of the new debtor can never revive the original debtor’s
obligation.
B. In expromission, the insolvency of the new debtor may at times revive the original debtor’s
obligation
C. Contracts are voidable or annullable even though there may have been no damage to one of
the contracting parties.
D. The debtor losses the benefit of the period, and his obligation becomes demandable when after
contracting the obligation, the creditor suspects that the debtor is becoming insolvent

40. A and B are jointly liable to deliver a Dalmatian dog named “Spot” valued at P20,000 to C on
March1, 2023. Which is correct?
A. The prestation is indivisible making the liability of A and B solidary
B. If on March 1, 2023, A is willing to deliver the dog but B is not, C may enforce the obligation
against A
C. A is liable for a proportionate part of the obligation and will be liable also for damages if B is not
ready to comply with his obligation, even if A is willing to deliver the dog
D. The liability of A and B is joint and that damages may be assessed only against the debtor who
violated the obligation

41. Bingbong obtained a 1M pesos loan from BDO Bank. The loan was evidenced by written contract
and as a security, Bingbong executed a mortgage on his house. The house however, was
subsequently destroyed by typhoon “Taleng”. Is Bingbong still liable despite the fortuitous event?
1st answer Yes, the obligation of Bingbong was to deliver a generic thing – money.
2nd answer No, the obligation was to deliver determinate things – the house.
A. Only the 1st answer is wrong
B. Only the 1st answer is correct
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 6

C. Both answers are wrong

D. Both answers are correct

42. Digong obtained a 1M pesos loan from BPI Bank. The loan was evidenced by written contract and
as a security, Digong executed a mortgage on his house. The house however, was subsequently
destroyed by typhoon “Mocha” on Jan. 1, 2023. What will happen to the obligation if the maturity of
the loan is on July 1, 2023?
1st answer The bank should wait for the maturity before demanding payment otherwise the
case will be governed by the principle of solutio indebite.
2nd answer The bank may demand from Digong immediate payment as the debtor losses the
period if the guaranty given to secure a loan will be lost.

3rd answer The obligation is extinguished as nobody should be made liable for fortuitous
events
A. Only the 1st answer is correct C. Only the 3rd answer is correct
nd
B. Only the 2 answer is correct D. Answers 1 and 2 are correct

43. Amber promised to deliver the luxury liner M/V Princess of the 7 Seas to Angelo with a particular
Airbus 360 commercial airplane as a replacement. Amber intentionally destroyed the plane by
attaching bombs into it. In this case:
A. Angelo may demand the luxury liner plus damages
B. Angelo may demand the value of the airplane plus damages
C. Amber is liable for damages only
D. Amber is liable to give the luxury liner

44. On May 1, 2022 Angela was indebted to Megan for P500,000 for a 60-day period. Angela proposed
to Megan that Gabriel will pay Angela’s debt, and that Angela will be free from all liabilities. Megan
and Gabriel agreed to the proposal. On July 1, 2022 when Megan tries to collect from Gabriel, she
finds that Gabriel is insolvent. At the time of delegation, Gabriel was insolvent but this was not
known to Angela. The insolvency is not of public knowledge. Megan sues Angela on the ground
that it was Angela who made the proposal and that Angela really guaranteed Gabriel’s solvency.
Decide.
A. Angela is liable because she is presumed to have guaranteed Gabriel’s solvency.
B. Angela is not liable, because Angela does not know the insolvency of Gabriel at the time of
delegation and neither was the insolvency of public knowledge.
C. Angela is liable because she did not exercise due diligence in determining the insolvency of
Gabriel
D. Angela is liable because Gabriel agreed to the proposal to make himself solidarily liable for the
obligation.

45. Bobby obliged himself to give to Ronnie his car on Dec 30, 2022. There was no delivery until Jan
10, 2023 when the garage of Bobby’s house collapsed due to a strong typhoon and the car was
totally destroyed. Is Bobby still liable?
A. No, even if Bobby was already in default, he could plead impossibility of performance.
B. Yes, the obligation to deliver the car is changed to pay the equivalent value because Bobby is in
legal delay.
C. No, because there was no demand by Sofia to deliver the car and the specific object was lost
due to fortuitous event. The obligation is extinguished.
D. Yes, because the contract is perfected.

46. The condition that some event happen at a determinate time shall _____ the obligation as soon as
the time expires or if it has become indubitable that the event will not take place.
A. Extinguish B. Suspend C. Give rise to D. Toll

47. The following are examples of obligations with a period, except:

A. “As soon as my means will permit me to pay”
B. “30 days after the death of Juan Ponce”
C. “If the sun will rise on August 1, 2023”
D. “if Bong reaches the age of 25 which is 2 years from today”

48. 1st statement - The receipt of a later installment of a debt without reservation as to prior installments,
shall give rise to a conclusive presumption that such installments have been paid.
2nd statement – The receipt of the installment shall give rise to a disputable presumption that the
principal loan has been paid.
A. True, true B. True, false C. False, true D. False, false
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 7

49. Angeline owes Heidi P100,000. Later Angeline paid Heidi P75,000 leaving a balance of P25,000.
Marcel, a suitor of Angeline and intending to surprise Angeline, paid Heidi the sum of P100,000
thinking that Angeline still owed Heidi that amount. Marcel did this without knowledge of Angeline.
Which is correct?
A. Marcel can recover P100,000 from Angeline
B. Marcel can recover P100,00 from Heidi
C. Marcel cannot recover anything from Angeline
D. Marcel can recover P25,000 from Angeline

50. Three (3) of the following contracts are void. Which is not?
A. Contract in writing contemplating and asking for impossible service.
B. Oral authority given to an agent in sale of land.
C. Oral partnership agreement where immovable property is contributed.
D. Oral partnership agreement when capital is more than P3,000.

51. "I will begin supporting you from the time your father dies of malaria" is an example of an obligation
with:
A. suspensive period C. resolutory period
B. suspensive condition D. resolutory condition

52. Choose the contracts which are voidable.

A. A Those undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due the.
B. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
C. Those whose object is outside the commerce of man.
D. Those where both parties are incapable of giving consent to a contract.

53. It takes place when the parties do not intend to be bound at all by their agreement:
A. Apparent contract C. Relatively simulated contract
B. Deed of assignment D. Absolutely simulated contract

54. 1st STATEMENT – A condition is considered fulfilled if the debtor voluntarily prevents its fulfillment.
2nd STATEMENT – If the resolutory condition depends upon the will of debtor, the obligation subject
to it is valid.
A. 1st statement is true, 2nd statement false C. Both statements are false
B. 1st statement false, 2nd statement true D. Both statements are true

55. Payment of the obligation by a solidary debtor shall not entitle him to demand reimbursement from
his co-debtors.
A. If such payment was made before the obligation is due.
B. If such payment was made after the obligation has prescribed or become illegal.
C. If such payment was made in compliance with the demand made to him by all the creditors.
D. If such payment was made after the obligation has become due and demandable and notice of
payment was made only to him.

56. Which of the following is true?

A. Application of payment is an alternative mode of payment
B. Unless the application of payment is expressly stated, the payment shall be applied to the
obligation most burdensome or onerous to the debtor.
C. The debtor has no option to apply his payment to any of his obligations to the same creditor
D. The debtor in application of payment is suffering from insolvency

57. A promissory note signed by M is worded as follows: “I promise to pay P the sum of Fifty Thousand
Pesos provided that if he should fail in the October 2023 CPA Examinations, he shall return to me
the said amount.” The above note gives rise to an obligation with:
A. Suspensive condition C. Resolutory condition
B. Casual condition D. Mixed condition

58. In which of the following situations will compensation take place?

A. Ali owes Eloy P10,000 payable on Feb 1, 2023. Eloy owes Ali four sacks of rice worth P2,500
each on Feb 1, 2023
B. Ali owes Eloy P10,000 payable on October 1, 2022. Eloy owes Ali P10,500 due on October 1,
2022
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 8

C. Ali owes Elopy P10,000 payable on October 1, 2022. Eloy owes Ali P10,500 due on October 1,
2022, Iris filed an adverse claim against Eloy
D. Ali owes Eloy P10,000 payable on May 31, 2022 with Iris as guarantor. Eloy owes Iris P10,500
due on May 31, 2023

59. Atoy and Bitoy who are both unemancipated minors entered into a contract. The contract is
A. void C. voidable
B. valid D. unenforceable

60. The principle which states that the thing perishes with its owner.
A. caveat emptor C. res perit domino
B. pactum commissorium D. respondeat superior

61. Which of the following statements is true?

A. A guardian cannot purchase the property of the ward unless consent of ward is given
B. The husband can never sell his property to his wife.
C. A stipulation that even when the object is delivered to the buyer, ownership will not pass until
the price is fully paid is void.
D. Dacio en pago is governed by the law on sales.

62. Angelo obtained from Gabriel a loan amounting to P500,000.00, the same being secured by a
mortgage on Angelo’s house and lot. Thereafter, Gabriel assigned his credit right to Andrei after
sending notice to Angelo. Which of the following statements is incorrect?
A. Andrei can collect from Angelo even if Angelo does not give his consent to the assignment.
B. Andrei cannot collect from Angelo because the assignment of credit was without consent of
Angelo and Andrei is a third person to the contract.
C. Andrei can collect from Angelo and has the right to foreclose the mortgage on the house and lot
if Angelo will fail to pay.
D. Gabriel seized to have a right over the loan and the mortgage

63. Elsa intimidated Christ off to marry Elsa’s sister Anna.

The marriage contract is:
A. Void because marriage is a special contract
B. Valid because Elsa is not a party to the contract although she was the onewho is guilty of
intimidation
C. Valid because Christoff and Anna are both of legal ages
D. Voidable because of vitiated consent

64. Before acceptance of an offer, the offeree suffered insanity. What will be the status of the contract?
A. Still valid
B. Unenforceable
C. Void or inexistent
D. Voidable because of incapacity to give consent

65. Which of following contracts is without defect?

A. A contract where a party gave his consent while in a state of drunkenness
B. A contract where a party gave his consent because the other party threatened to sue him for an
unpaid debt
C. A contract where a party gave his consent because the other party threatened to kill the former’s
spouse
D. A contract where the wife sells her property to her husband because of intimidation

66. Contract wherein ratification is the cure:

A. Those which are entered into by guardian whenever the ward whom they represent suffer lesion
of more than ¼ of the value of the thing belonging to the ward
B. Contract of Donation between persons guilty of adultery or concubinage
C. Sale of Luneta Park in a private document
D. Oral Lease of a house and lot for a period of 2 years.

67. Which of the following is false?

A. Autonomy of contracts is the principle that contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided they are not contrary to
law, moral, public policy and public order.
B. Failure to disclose facts constitutes fraud
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 9

C. Contracts are effective only between the parties, heirs and assigns.
D. Lesion or the inadequacy of cause, like an insufficient price for a thing sold does not
automatically render the contract rescissible.

68. Pedro delivered his laptop to Jaun for the latter’s use for one whole school year without any
compensation. In this case:
A. The cause of the contract is the generosity of Pedro
B. The object of the contract is the laptop of Pedro
C. The cause of the contract is the laptop of Pedro
D. The prestation is the friendship between the parties

69. A contract giving a person the right, to enjoy the use and fruits of a thing belonging to another:
A. antichresis B. sale C. usufruct. D. commodatum

70. Which of the following is true?

A. Novation may be presumed
B. Substitution in facultative obligations will result to novation
C. Novation may be implied
D. Dacion en pago is an example of novation

71. Tom promised to give his car to Jerry with the condition that_________; hence the obligation is valid.
A. Jerry commits suicide
B. Jerry kills Spike
C. Jerry will bring a live unicorn to Tom
D. Tom’s deceased father will not rise from the dead

72. Letlet and Potpot entered into a contract wherein Potpot will receive from Letlet a year 2022 model
car worth P1m and Potpot will give to Letlet a farm lot worth P1m. Which of the following is not a
correct group of characteristics of their contract?
A. Onerous, bilateral and principal
B. Bilateral, innominate and commutative
C. Onerous, commutative and consensual
D. Nominate, principal, bilateral

73. The cause of loss is material to determine if the obligation of the debtor will be extinguished in which
of the following cases?
A. The debtor promised to give a generic thing
B. One of the prestations in an alternative obligation was lost
C. The obligation of the debtor is to pay money and the specific thing mortgaged to secure the loan
was lost
D. The obligation is facultative and the principal object was lost before substitution

74. Which of the following is false?

A. The expenses of consignation when properly made, shall be charged against the obligee.
B. In a joint obligation, the insolvency of one shall not make the other debtors liable to pay his
share
C. The latin phrase “Facio ut des” refers to a bilateral obligation to give
D. If the debtor promised to give his house and lot to the creditor if the debtor wants to, the
obligation is void.

75. X, Y and Z are solidary debtors of Q and R in the amount of P60,000.00. Q condoned the share of Z
which the latter accepted. How much can R collect from Y if X is insolvent?
A. Zero because condonation will inure to the benefit of all debtors
B. P30,000.00
C. P20,000.00
D. P10,000.00

76. Ping owes Pong P100,000. Later Ping paid Pong P75,000 leaving a balance of P25,000. Leila,
intending to surprise Ping, paid Pong the sum of P100,000 thinking that Ping still owed Pong that
amount. Leila did this without knowledge of Ping. Which of the following is correct?
A. Leila can recover P100,000 from Ping
B. Leila can recover P100,00 from Pong
C. Leila cannot recover anything from Ping
D. Leila can recover P25,000 from Ping
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 10

77. Jane and Jenny are debtors of solidary creditors John, James and Jonathan, in the amount of
P900,000. Jane’s obligation is:
A. Pay James P100,000 C. Pay John P150,000
B. Pay John, James and Jonathan P900,000 D. Pay Jonathan P300,000

78. Jane and Jenny are debtors of solidary creditors John, James and Jonathan, in the amount of
P900,000. John can collect from Jenny:
A. P150,000 C. P450,000
B. P900,000 D. P300,000

79. Fidel promised to give Klay the following on the latter’s 18th birthday:
I. One of Fidel’s 10 horses
II. Apple MacBook Pro Laptop
III. Brand new Samsung Curve HD TV, 72 inches
IV. A black Cross ballpen
Which of the following is true?
A. Only item no. III is specific C. Items I and II are specific
B. All the objects are generic D. Only item no. III is specific

80. When the fulfillment of the condition depends upon the sole will of the:
A. debtor but it is resolutory, the obligation is void
B. debtor but it is suspensive, the obligation is valid
C. creditor even if it is suspensive, the obligation is valid.
D. debtor, it is always void

81. The alienation of the debtor of a particular property in favor of his creditor, with the latter's consent,
for the satisfaction of the former's money obligation to the latter with the effect of extinguishing the
said money obligation.
A. dation in payment
B. consignation
C. application of payment
D. novation

82. The receipt of the principal by the creditor, without reservation with respect to the interest, shall give
rise to the presumption that:
A. Said interest has been paid
B. Said principal has been paid
C. Creditor is, therefore conclusively paid as to the principal amount,
D. Creditor is, therefore presumably paid as to the principal amount

83. Mr. Zaturna, a famous couturier bound himself to deliver to Ms. Zhaza the party gown she is
supposed to wear on the celebration of her 18th birthday on January 17, 2023. Mr.Zaturna failed to
deliver and the gown was destroyed by an accidental fire on January 20, 2023. Therefore:
A. there was no delay because he was not at fault
B. there is delay already because he was in bad faith
C. he has already incurred in delay
D. there was no delay because there was no demand

84. Case No. 1. Larry promised to give his son a car if the son will marry Annie this year. If by the end of
the year, Annie is already dead or the son has not married Annie, the obligation to give a car is
effective and demandable.
Case No.2. Larry promised to give his son a car if the son will not marry Annie before the end of
2022. If on January 1, 2023, the son has not yet married Annie, or Annie has died, the obligation is
extinguished.
A Both statements are false. C. First false, second true.
B. Both statements are true. D. First true, second false.

85. A, B, and C solidarily owe X and Y P30,000. X remitted the entire obligation in favor of A. The effect
is:
A. The obligation is not extinguished until A collects from B and C.
B. The obligation is not yet extinguished until Y is paid by X and Y’s share of the credit.
C. A cannot recover from B and C because remission in his favor extend to the benefit of B and C
D. A can recover from B and C their respective share of the debt.
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 11

86. The creditor may, before the fulfillment of the condition:

A. Bring the appropriate actions to protect his right.
B. Ask the court to take custody of the thing to be delivered.
C. Recover what is supposed to be paid.
D. Request the court to fix a specific duration of its fulfillment.

87. When during a fire, Asyong saved the properties of Bosyo without the latter's consent or knowledge,
Bosyo is bound to pay Asyong’s medical expenses for injuries suffered in the process of saving
Bosyo’s propert under the principle of:
A. Negotiorum gestio C. Agency
B. Quasi-contract D Solutio indebiti

88. If the obligor binds himself to perform his obligation as soon as ‘he shall obtained a loan’ from a
certain bank, this obligation is:
A. With a term
B. Conditional
C. Suspensive
D. Resolutory

89. A, B and C secured a loan from D. The promissory note which evidence the obligation states; “I
promise to pay D or order P10,000 payable on demand” (sgd) A B C. The obligation is:
A. Solidary
B. Indivisible
C. Divisible
D. Joint

90. Boy owes Bheng to debts, both of which are already due. The first debt is secured by registered
chattel mortgaged constituted over a car belonging to Boy and the second is not. Boy tells Bheng
that the payment he is now making should be applied to the second debt instead of the first, which is
correct?
A. Bheng can not refuse the application if the first debt is older than the second
B. Bheng may refuse such application on the ground that the first debt is more burdensome to the
debtor
C. Bheng may refuse such application because the payment shall be applied proportionately
D. Bheng cannnot refuse the application because the preference of the debtor must be followed

91. Dok owes Bok P100,000 due on June 30, 2023 and guaranteed by Tok. Bok owes Dok P35,000 due
on June 25, 2023. On the due date of Dok’s debt, he is insolvent. How much is Tok’s liability?
A. P100,000
B. P65,000
C. P85,000
D. P35,000

92. When the thing deteriorates pending the fulfillment of the resolutory condition without the fault of the
debtor, the impairment is to be borne:
A. by the party who caused the deterioration
B. partly by the debtor and partly by the creditor
C. by the debtor
D. by the creditor

93. Takes place when two persons in their own right, are creditor and debtor of each other:
A. Remission
B. Novation
C. Confusion
D. Compensation

94. Which of the following is incorrect?

A. In Condonation, if a creditor expressly condones the obligation of the debtor, such act must
comply with the formalities of donation
B. Condonation may be onerous
C. Condonation may be implied
D. Condonation may be oral
CRC-ACE/RFBT: First Pre-board Exams – May 2023 batch Page 12

95. Solidarity on the part of the debtors, where anyone of them can be made liable for the fulfillment of
the entire obligation.
A. active solidarity
B. mixed solidarity
C. passive solidarity
D. common solidarity

96. Which of the following is true?

A. Acquittal in the criminal case will excuse the accused from civil liability
B. Responsibility arising from fraud is demandable in all obligations and any waiver of right to sue
for damages arising from fraud is void.
C. If the obligation consists of giving a specific thing, the debtor must exercise extra-ordinary
diligence.
D. There is no delay in a negative personal obligation

97. Which of the following is false?

A. In a contract, there is the meeting of the minds or consent, whereas in a quasi-contract, there is
no consent but the law considers the parties as having entered into a contract so that one will
not be unjustly enriched or benefited at the expense of another
B. The debtor who is obligated to deliver a specific thing cannot compel the creditor to receive an
object of the same kind.
C. Those who in the performance of their obligations are guilty of fraud, negligence or delay will be
liable for damages
D. If a person obligated to give a specific thing fails to do it, the same shall be executed at his cost

98. A person obliged to give a determinate thing is also obliged to take care of the thing with:
A. The good diligence of a father of a family.
B. The diligence of a father of a good family.
C. The diligence of a good father of a family.
D. Extraordinary diligence.

99. The right of Alexa to demand the delivery of the agricultural lot and the crops from the time the
obligation to deliver the lot arose is known as:
A. Real right.
B. Personal right.
C. Civil right.
D. Natural right.

100. They include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation and similar injury.
A. Compensatory damages
B. Corrective damages
C. Exemplary damages
D. Moral damages

mrs/cde