Business Law And Taxation 1

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  BUSINESS LAW & TAXATIONOCTOBER 2007 BATCH2nd PRE-BOARD EXAMS AUGUST 18,2007 (S! 7#$0-%#00 INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each item y writing a  ERTICAL LINE  corres!on ing to theletter of your choice on the answer sheet !ro#i e . STRICTL' NO ERASURES ALLOWED . Use $encil No. % or No. & only.%. The following contracts are not !erfecte until the eli#ery of the o'ect of theoligations e(ce!t: ). $le ge *. +e!osit C. Commo atum +. Sale&. $etra transferre to $e ro a !arcel of lan for the !rice of $&,,-,,, $%/,-,,, toe !ai in cash an for the i0erence- he will con#ey his car worth $1,-,,,. 2hatkin of contract is this3 ). Contract to Sell*. Contract of saleC. Oligation to sell+. *arter/. The recei!t of the !rinci!al loan y the cre itor- without reser#ation with res!ect tothe interest- shall gi#e rise to the !resum!tion that: ). +etor is- in ee - in ete to the cre itor*. Cre itor is- therefore- !ai as to the !rinci!al amountC. Sai interest has een !ai +. Sai !rinci!al has een !ai 4. Mr. Chua sol his horse for $%,,-,,, to Mr. Ng. There was no 5(e ate for the!erformance of the oligations of oth !arties. The oligation of Mr. Chua as #en or is: ). To rescin the contract ecause no time or ate is 5(e for the !erformance of their res!ecti#e oligations.*. To eli#er the horse as this is a !erfecte contract.C. To eli#er the horse after eman .+. To wait for Mr. Ng to !ay $%,,-,,, an eli#er the horse.6. Rescission of contracts can take !lace in this case: ). 2hen the things which are the o'ect of the contract are legally in the !ossessionof thir !ersons who acte in a faith*. 2hen he who eman s rescission can return whate#er he may e olige torestore C. 2hen the !arty seeking rescission can !erform only as to !art an rescin toremain er+. 2hen the seller cannot return the installment !ai to him y uyer.7. ) sti!ulation in fa#or of a thir !erson conferring a clear an elierate fa#or u!onhim an which sti!ulation is merely a !art of a contract entere into y the !arties-neither of whom acte as an agent of a thir !erson- an which fa#or can e eman e y thir !erson if uly acce!te y him efore it coul e re#oke . ). Sti!ulation !our autrui C. Ca#eat em!tor*. In !ari elicto +. $actum commissorium1. 8uan sol his !arcel of lan to Maria for only $%M although its #alue is $/M. 9etherefore su0ere lesion ue to the ina equacy of the !rice. The contract is ). oi ale *. Unenforceale C. Rescissile+. ali ;. It is an act or means y #irtue of which e0icacy is gi#en to a contract which su0ersfrom #ice of curale nullity. ). rescission *. rati5cation. C. !rescri!tion +. annulment<. +acion en !ago as istinguishe from sale: CRC-ACE REVIEW SCHOOLCRC-ACE REVIEW SCHOOL The Professional CPA Review SchoolThe Professional CPA Review School   7$-%0$1 7$-8%01  CRC-ACE/BLT_2 nd   Pre-board Exams (October 2007 Batch)Pae 2 o! #  ). the o'ect is always e(isting an s!eci5c*. there is a greater egree of free om in 5(ing the !riceC. there is no !re=e(isting oligation+. the cause is the !rice%,. Caloy o0ere to sell his house an lot for $&M to *uoy. *uoy coul not make u!his min so he aske that he e gi#en /, ays to eci e. Caloy agree . )fter %6 ays- Caloy raise the !rice to $&.6M. )ssume that *uoy eci e to uy the housean lot the following ay- can he com!el Caloy to acce!t the $&M !rice an eli#erthe house an lot3  ). No- there was no acce!tance of the srcinal o0er.*. >es- Caloy cannot change his o0er without the consent of *uoy.C. >es- there was alrea y a !erfecte contract of sale.+. No- ecause *uoy agree that Caloy may change his min later on.%%. Case % ? @ hire > for $%,,-,,, to ki na! A- an he !ai > $6,-,,, in a #ance.*efore > coul ki na! A- @ relente an sto!!e > from !erforming the contract.The court may not allow @ to reco#er from > the $6,-,,, !ai in a #ance.Case & ? @- at gun !oint- com!els > to marry him. Since the contract of marriage is #oi ale- either @ or > has the right to 5le the action for annulment. +eterminewhether: ) . *oth cases are false.*. Birst case is false- secon case is true. C. *oth cases are true.+. Birst case is true- secon case is false.%&. If the area was s!eci5e in the contract of sale an there is a i0erence etweenthe area an the oun ary: ) oun ary !re#ails C. there must e anothersur#ey*. area !re#ails +. contract is #oi %/. %st Statement ? O!tion money is reco#erale if the o0eree will choose not to!urchase the thing eing o0ere for sale.&n Statement = The #en or is oun to eli#er the thing sol ut not itsaccessions. ). *oth statements are wrong.C. %st statement is correct- & n statement is wrong.*. *oth statements are correct.+. % st  statement is wrong- &n statement is correct%4. %st Statement ? uar ians an agents- hol ing 5 uciary !ositions cannot !urchasethe !ro!erty of the war or the !rinci!al.&n Statement = +eli#ery is necessary to transfer ownershi! in a contract of salean ownershi! is transferre to the uyer u!on eli#ery. ). *oth statements are wrong.C. %st statement is correct- & n statement is wrong.*. *oth statements are correct.+. % st  statement is wrong- &n statement is correct%6. %st Statement ? Contracts entere into in the name of another !erson y one whohas no authority to o so is rescissile if the owner su0ere lesion of more thanone=fourth of the #alue of the !ro!erty sol . &n Statement = 2here the goo s are eli#ere to the uyer Don sale or returnD theuyer oes not ecome the owner of the goo s. ). *oth statements are wrong.C. %st statement is correct- & n statement is wrong.*. *oth statements are correct.+. % st  statement is wrong- &n statement is correct%7. The re hiitory action ase on the faults or efects of animals must e roughtwithin A. /, ays from eli#ery to the #en ee B. 4, ays from eli#ery to the #en ee C. 46 ays from eli#ery to the #en ee - more -  CRC-ACE/BLT_2 nd   Pre-board Exams (October 2007 Batch)Pae $ o! # D. 7 months from eli#ery to the #en ee%1. Ownershi! of the thing sol is transferre Eacquire Eretaine : ).Retaine y the seller in Fsale or returnG*.Transferre to the uyer u!on constructi#e or actual eli#ery of the thing sol .C.)cquire y the uyer u!on !erfection of the contract.+.Transferre to the uyer u!on acce!tance of the !rice.%;. ) groun for the e(ercise of the right of sto!!age in transitu y the un!ai seller: ). Bailure of the uyer to insure the goo s*. Insol#ency of the uyerC. Refusal of the uyer to acce!t the goo s+. Biling of a case y the uyer against the seller%<. ) contract y which one !erson transfers to another his rights an actions againsta thir !erson in consi eration of a !rice certain in money or its equi#alent is: ). Sale *. *arter C. Hease+. )ssignment of Cre it&,. ) sti!ulation stating that es!ite eli#ery- the ownershi! of the thing shall remainwith the seller until the uyer has fully !ai the !rice: ). !actum commissoriumC. frau in factum*. !actum reser#ati ominii+. constitutum!ossessorium&%. *y s!eci5c !ro#isions of law- which of the following nee not a!!ear in a !ulicinstrument3 ). ) contract of onation in#ol#ing an immo#ale.*. ) !le ge- escriing the thing !le ge an the ate of the !le ge- in or er to ee0ecti#e against thir !ersons.C. ) contract of agency- for the sale of a !iece of lan or any interest therein- inor er to consi er the sale y the agent as #ali .+. ) contriution to the !artnershi! of immo#ale !ro!erty or real rights.&&. eorge secure an Ran y grante a loan of $%M ue on +ecemer /%- &,,1.eorge e(ecute a 5rst mortgage of his resi ential house in fa#or of Ran y toguarantee the loan. On )ugust %;- &,,1 the house was totally estroye y anacci ental 5re. On )ugust /%- &,,1- Ran y eman e !ayment of the loan. Is the eman #ali 3 ).No. The oligation is one with a e5nite ate for !ayment.*.No. The o'ect of the oligation was lost through a fortuitous e#ent an theoligation was e(tinguishe .C.>es. The oligation ecame ue at once ecause the guaranty was lost througha fortuitous e#ent.+. >es. The oligation ecame ue at once ecause from the tenor ene5t- thecre itor is gi#en the right to eman !erformance e#en efore the ue atesti!ulate .&/. )n e(am!le of an aleatory contract is ). Sale*. $le geC. Insurance+.$artnershi!&4. ilma- guar ian of Nora sol Noras house an lot worth $&M for $%M. )s a result: ). The contract can e rescin e ecause of ina equacy of !rice.*. The contract cannot e rescin e ecause there is no frau - mistake or un ueinJuence.C. The contract cannot e rescin e ecause all the elements of a contract are!resent.+. The contract cannot e rescin e ecause it is e(!ressly !ro#i e y law as oneof the contracts that cannot e rescin e .&6. 2hich of the following woul e an e(am!le of an e(ecutory contract3  ).) customer !laces an or er for merchan ise to e !icke u! an !ai for in oneweek. - more -  CRC-ACE/BLT_2 nd   Pre-board Exams (October 2007 Batch)Pae # o! # *.) com!any sol a one=year suscri!tions to its !ulication an recei#e thesuscri!tion !rice in cash. C. ) com!any sol an a!!liance an ga#e a warranty to re!lace efecti#e !artswithin one year after sale.+. ) com!any orrowe money from a ank to !urchase a eli#ery truck.&7. ) 'uri ical relation known as negotiorum gestio takes !lace. ). 2hen a !erson #oluntarily takes charge of anothers aan one usiness or!ro!erty without the owners consent.*. 2hen something is recei#e an there is now right to eman it an it was eli#ere through mistake.C. 2hen a !erson is a!!ointe y a court to make the !ro!erty or usiness of another.+. 2hen a !erson is a!!ointe agent of another.&1. ) sol to * %,,, askets of lanKones at $7,, a asket. Thereafter- ) can only eli#er <,, askets an o0ere this numer to * an no more- ut at $1,, each.+eci e ). * can refuse to acce!t eli#ery of the <,, askets without liaility.*. * must !ay for %,,, askets ut at $6,, each.C. * can acce!t <,, askets ut !ay $66, for each.+. ) can require * to acce!t <,, at $1,, each.&;. On 8une %7- &,,1- ) olige himself to gi#e to * his motorcycle. There was no eli#ery until 8uly %6- &,,1 when the garage of the motorcycle colla!se ue to astrong ty!hoon an the motorcycle was totally estroye . Is ) still liale3 ). No- e#en if ) was alrea y in efault- he coul !lea im!ossiility of !erformance.*. >es- the oligation to eli#er the motorcycle is change to !ay the equi#alent #alue ecause 8ose C. No- ecause there was no eman y * to eli#er the motorcycle an the s!eci5co'ect was lost ue to fortuitous e#ent. The oligation is e(tinguishe .+. >es- ecause the contract is !erfecte .&<. The cre itor shall ha#e a right to in emnity for amages when- through the fault of the etor- all the things which are alternati#ely the o'ect of the oligation ha#eeen lost or com!liance of the oligation has ecome im!ossile. The in emnityshall e 5(e taking as a asis the #alue of the  ). Heast e(!ensi#e thing.C. Hast thing which isa!!eare .*. Most e(!ensi#e thing.+. )ny of the things which isa!!eare ./,. ) soli ary oligation is one in which each of the etors is liale for the entireoligation or et- an each of the cre itors is entitle to the entire cre it.Oligations shall also e consi ere soli ary un er the three following e(ce!tions.2hich oes not elong to the e(ce!tion3  ). 2hen soli arity is e(!ressly sti!ulate in the oligation.*. 2hen the !restation is in i#isile an there are two or more etors an cre itors.C. 2hen the law e(!ressly !ro#i es soli arity.+. 2hen soli arity is require from the nature of the oligation./%. )s a general rule- in assignment of cre it- the assignor in goo faith:a. 2arrants the e(istence of the cre it at the time of assignment. 2arrants the legality of the cre it at the time of assignmentc. 2arrants the sol#ency of the etor at the time of assignment. ). a an c C.  an c *. a an  +. a-  an c/&. % st  ST)TLMLNT ? If the same car shoul ha#e een sol to i0erent uyers- theownershi! shall e transferre to the !erson who may 5rst taken !ossession thereof in goo faith. & n  ST)TLMLNT ? The seller is res!onsile to the uyer for any hi en efects orfaults in the thing sol only if he was aware thereof. ).The % st  statement is true- & n statement false*.*oth statements are false - more -