A offers to B 100 electric fans for P80,000 payable in 60 days with 12% interest per annum. B accepted the offer by telegram provided that interest is reduced to 6%. If there is a no further communication between A and B relating to the terms

a. The contract is perfected because of the acceptance by B
b. There is no contract yet between A and B because B made a counter-offer
c. The contract is perfected under the terms of A
d. There is no contract yet unless B gives earnest money

There is no contract yet between A and B because B made a counter-offer

Y sold his horse to Z for P50,000. No payment has yet been made and the sales document does not provide the date of delivery. Before delivery and payment the horse gave birth to a baby horse, which is correct?

a. Z is entitled to the baby horse which was born after the perfection of the contract
b. Y is entitled to the fruit (baby horse) as Z has not paid the price yet
c. Y is entitled to the (baby horse) because it was born before his obligation to deliver arises
d. Z should pay additional amount for the baby horse to be entitled to it

Z (buyer) is entitled to the baby horse (fruits) which was born after the perfection of the contract

A seller sold to a buyer a piece of jewelry at a price of P20,000. The contract sale provides that the buyer will pay the seller cash P8,000 and the balance, the buyer will give the seller a micro oven worth P12,000. What is the nature of the contract?

a. Sale

b. Partly sale and partly barter

c. Barter

d. Commodatum

Sale

X sold his car to Y for P50,000. No date was fixed for the performance of the obligation of the seller and the buyer. The obligation of X is

a. To deliver the car immediately because the sale is a perfected contract
b. To deliver the car only after Y writes to X demanding the delivery of the car
c. To deliver the car only after Y pays the P50,000
d. To rescind the contract because there is no time fixed for the delivery

c. To deliver the car only after Y pays the P50,000

*Since there is no stipulation on the date of delivery, delivery must be made within a reasonable time from the execution of the contract

Determine which statement/s are true or false:

Statement 1: The vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the owner at the time the thing sold is delivered.

Statement 2: The sale of vain hope or expectancy is voidable.

S1: TRUE [Right of seller to transfer ownership is at the time of delivery]

S2: FALSE [The sale of vain hope or expectancy is void, not voidable]

A stole a fountain pen from P and sold it to B Merchandise, a “store of pens”, which paid for it in good faith, not knowing it was stolen. The “store” then it sold to C, a reviewee. Which is correct?

a. C cannot be considered as the owner because the original seller (A) is not the real owner

b. P may recover the fountain pen from C without reimbursement because he is the legal owner

c. C became the owner because he purchased the pen from a merchant store

d. C became the owner regardless of whether the seller is a store for pens or not because C bought it in good faith

c. C became the owner because he purchased the pen from the merchant store.

*C purchased the pen from the store which paid for it in good faith from A. Even if A acquired the pen from P in bad faith, A does not have a transactional relationship to C, hence becoming the owner of the pen.

B imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labeled 220 volts and B sold them to the public as such. Later the customer complained that the radios have been mislabeled by the manufacturer and that they were good only for 110 volts. As a consequence:

a. B is liable to the vendees for any hidden defects even though he is not aware

b. B is not liable because he is in good faith

c. B is not liable under the principle of “caveat emptor” or let the buyer beware

d. The vendees may hold the manufacturer liable but not B because B specifically asked for 220 volts

a. B is liable to the vendees for any hidden defects even though he is not aware

*B as a vendor should ensure that the radios are free from any hidden defects before selling them to the public.

If redemption is to be made by the seller, one of the following need not given to the buyer:

a. Expenses of the contract

b. Interest on the price of the sale

c. Necessary expenses on the thing sold

d. Price of the sale

b. Interest in the price of the sale

*buyer can demand all from the seller except b.

Not an element of the sellers right of stoppage in transit:

a. The good must be in transit

b. The buyer must be insolvent

c. The seller must be in possession of the goods

d. The seller must be unpaid

c. The seller must be in possession of the goods

A, B and C are co-owners of an undivided parcel of land, A sold his 1/3 interest to B absolutely. Which is correct?

a. C may exercise his right of redemption on the interest sold by A to B
b. C cannot exercise the right of redemption because the sale was made in favor of a co-owner
c. The sale made by A to B is void because it was not made in favor of a stranger
d. C may redeem only ½ of the interest sold by A to B

b. C cannot exercise the right of redemption because the sale was made in favor of a co-owner

*The right of redemption of co-owners excludes that of adjoining owners.

A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price offered at Y’s store in Quinta Market. The price is:

a. Not certain because the price at Quinta Market is not stated
b. Certain because it has got reference to another thing which is certain
c. Certain because there is a price ceiling for price of rice
d. Not certain so the court may fix the price

b. Certain because it has got reference to another thing which is certain

*A's determined the price for the cavans of wagwag rice in reference to the price offered at Y's store in Quinta Market, hence it is certain

A sold his motor vehicle to B who bought it for P200,000. It turned out however, that A has 2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct?

a. There is no contract of sale between A and B
b. The parties may ask for interpretation or reformation
c. The parties can ask for annulment for the contract
d. B may choose between the Toyota or lancer

a. There is no contract of sale between A and B.

*B already bought a P200,000 motor vehicle. The additional information regarding A's Toyota and Lance has no direct relationship to A & B's earlier sale of the unnamed motor vehicle

Determine which statement/s are true or false:

S1: There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen.

S2: If the consideration of the contract consists partly in money and partly in another thing, it shall be considered a barter if the value of the thing given as part of the consideration exceeds the amount of the money or its equivalent

S1: TRUE [Goods involved in this type of contract are contingent goods which is also an agreement to sell; "may be a contract of sale']

S2: FALSE [Even if the acquisition of a thing is paid for by another object of greater value than the money component, it may still be a sale and not a barter when such was the intention of the parties]

Determine which statement/s are true or false:

S1: If the price is grossly inadequate, the sale is void.

S 2: Wherever option money is given in a contract of sale, it shall be considered as part of the price and a proof of the perfection of the contract

Both are false

S1: Gross inadequacy of price does not affect the validity of a contract of sale

S2: Earnest money is considered as part of the price and a proof of the perfection of the contract

In a contract of sale of personal property, the price of which is payable in installments, the vendor may exercise of any of the following remedies, except:

a. Exact fulfillment of the obligation, should the vendee fail to pay any installment

b. Cancel the sale, should the vendee’s failure to pay cover two or more installments

c. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure to pay cover two or more installments

d. Rescind the sale should the vendee fail to pay any installments

d. Rescind the sale should the vendee fail to pay any installments

*a, b, and c are vendor's remedies under Recto Law if the vendee fails to pay installments

The right of the seller to stop goods in transit, upon discovering that the buyer does not have the funds to pay for the goods

Right of stoppage in transit

A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale written in Bicolano dialect. One week later, A sold the same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C who was aware of the first sale, immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to:

a. B because he has got an older title

b. C because he is the first to register

c. C because he is the first to take possession

d. No one as both sales are void

a. B because he got an older title

*Although C was the first to register the deed of sale, he registered it in bad faith (C was aware of the first sale). Hence, the parcel of land shall belong to B

Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is liable to the value of the thing at the time of eviction.

a. Waiver intentionada

b. Waiver consciente

c. Waiver cursunada

d.Waiver inocente

b. Waiver consciente

*Waiver of warranty against eviction:

(1) Waiver consciente: buyer made the waiver WITHOUT knowledge of the risks of eviction; Seller IS liable to the value of the thing at the time of eviction

(2) Waiver intentionada: buyer made the waiver WITH knowledge of the risks of eviction and assume its consequences; Seller is NOT liablef

Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is no longer liable

waiver intentionada

A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the sale from the buyer within a certain period agreed upon:

a. Equitable mortgage

b. Absolute sale

c. On sale or return

d. Pacto de retro sale

d. Pacto de retro sale

A sold to B her Yamaha organ. It was agreed that A would fix the price a week later. At the agreed time, A name the price P10,000. B agreed. Was the sale perfected?

a. No, because the price was left to the discretion of one of the contracting parties

b. No, because at the time of sale the price was not fixed

c. Yes, because the price fixed by one of the parties was accepted by the other

d. Yes, because there was agreement that A would fix the price

c. Yes, because the price fixed by one of the parties was accepted by the other

*A & B agreed that only one of them would fix the price. B, then agreed to the price fixed by A. Sales is perfected since there was an acceptance/confirmation of the price

After the death of C, A, C’s son, sold his inheritance through its amount has not yet been determined to B for a consideration of P1,000,000. Which is correct?

a. The contract is valid if the value of inheritance is at least equal to P1,000,000

b. The contract is valid even though the inheritance to be turned over to B is less than P1M

c. The contract is void as future inheritance cannot be the object of sale

d. The contract is unenforceable

b. The contract is valid even though the inheritance to be turned over to B is less than P1M

Determine which of the following statement/s is true or false:

S1: Earnest money and option money both apply to perfected sale.

S2: In a contract of a personal property the price of which is payable in installment, the vendor may cancel the sale should the vendee fail to pay.

Both are false

S1: Only earnest money perfects a sale

S2: The vendor may cancel the sale if the vendee fails to pay two or more installments

Not an implied warranty in a contact of sale

a. Right to sell the thing at the time of perfection of the contract

b. Reasonably fit for the purpose they are required

c. Merchantable in quality

d. Free from charges and encumbrances not declared or known to the buyer

a. Right to sell the thing at the time of perfection of the contract

Effected when the object of sale is already in the possession of the vendee at the time of sale so that the delivery need no longer be made is

Traditio brevi manu (short-hands delivery)

Quasi-traditio is equivalent to

a. Traditio longa manu

b. Traditio brevi manu

c. Traditio constitutum possessorium

d. Execution of a public instrument

d. Execution of a public instrument

As a rule, this contract of sale involving a piece of land is void,

A. Between a minor and a capacitated person.

B. Between two insane persons who did not act during lucid interval

C. Between first degree cousins

D. Between husband and wife

d. between husband and wife

X, 17 years old, sold to Z, of legal age, her necklace worth P20,000 for P15,000. Later, Z sold the necklace to Y for P20,000. Which of the following statements is correct?

A. X has got a voidable title because at the time of sale, she is a minor

B. X can ask for rescission of the sale to Y because she suffered a lesion of more than ¼ of the value of the property.

C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his title is voidable.

D. X can ask for the annulment of the sale to Y because at the time of sale she is a minor.

C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his title is voidable.

A contract of sale is not a(an)

A. Onerous contract

B. Accessory contract

C. Commutative contract

D. Bilateral contrac

B. Accessory contract

*all other choices are characteristics of a contract of sale

Warranty against hidden defects is

A. An essential element

B. A natural element

C. An accidental element

D. An artificial element

b. a natural element

When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall be in writing, otherwise the sale is

A. Valid

B. Voidable

C. Unenforceable

D. Void

d. void

The sale of an expected thing

Emptio rei speratae

The sale of the hope itself

Emptio spei

One of the following is not correct

A. Things subject to a resolutory condition may be the object of the contract of sale.

B. A thing is generic when it is particularly designated or physically segregated from all others of the same class.

C. Things having a potential existence may be the object of the contract of sale.

D. The sole owner of a thing may sell an undivided interest therein11

B. A thing is generic when it is particularly designated or physically segregated from all others of the same class.

*should be specific, not generic

X needs a size of 10 of model 101 of Leather Shoes regularly available to the public for her boyfriend Z, but the same is out of stock so she placed an order for one.

On the other hand, Z placed an order for size No. 8, colored violet, (something not ordinarily made by the company) to be given to X. Which is correct?

A. Both are contracts of sale

B. Both are contracts for a piece of work

C. First is a contract of sale second is a contract for a piece of work

D. First is a contract for a piece of work, second is a contract of sale

C. First is a contract of sale second is a contract for a piece of work

Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the sale is

Traditio longa manu

When the owner of the thing sells it to vendee, but continues to have possession or occupation of the thing not as owner but as tenant or lessee

A. Traditio longa manu

B. Traditio brevi manu

C. Traditio constitutum possessorium

D. Traditio symbolica

c. traditio constitutum possessorium

Goods are deemed in transit

A. When the buyer accepts delivery of the goods upon arrival at destination

B. When the buyer intercepts and lawfully takes possession of the goods at any point before destination.

C. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the buyer, up to the time that the buyer or his agent takes delivery of the goods from the carrier or bailee.

D. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his agent that he is holding the goods as bailee for the latter.

C. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the buyer, up to the time that the buyer or his agent takes delivery of the goods from the carrier or bailee.

Goods are deemed no longer in transit

A. If the goods are rejected by the buyer for a valid reason and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.

B. From the time they are delivered to a carrier by land, water or air for the purpose of transmission to the buyer.

C. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer or his agent in that behalf, takes delivery of them from such bailee.

D. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf.

D. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf.

X sold to V orally a parcel of land for P200,000. X effected the delivery of the land. The payment of the price was to be made three month later. At the end of three month period

A. V may refuse to pay claiming in his defense the Statute of Frauds

B. V may return the parcel of land to X

C. X can collect from V because the contract has already been executed

D. V may refuse to pay on the ground that there is no written contract to support the sale.

C. X can collect from V because the contract has already been executed

On January 15, 2010, X sold for P2M her house and lot to V. It was agreed that delivery of the house and lot, and the payment therefore, would be made on March 10, 2010. Unfortunately, Z a stranger negligently set the house on fire on February 25, 2010, and the house was completely destroyed. Which is correct?

A. V is not required to pay the P2M since the contract had no subject matter.

B. X must still deliver the lot but is excused from delivering the house, while V must still pay the P2M

C. X must deliver the lot while V should pay only the amount equivalent to the value of the lot.

D. X need not deliver the lot while V need not pay the P2M

B. X must still deliver the lot but is excused from delivering the house, while V must still pay the P2M

If immovable property should have been sold to different vendees, the ownership shall be transferred to the person

A. Who have first taken possession in good faith

B. Who presents the oldest title in good faith

C. Who in good faith first recorded it in the Registry of Property

D. Who have paid in good faith the purchase price in full

C. Who in good faith first recorded it in the Registry of Property

if there is a double sale on a movable property, it shall belong to the person

A. Who have paid in good the purchase price in full

B. Who in good faith first recorded it in the Registry of Property

C. Who presents the oldest title in good faith

D. Who have first taken possession in good fait

d. who have first taken possession in good faith

Action by the vendee against the vendor to nullify the sale due to some vices or defects which render the object of sale unfit for the use intended or knowledge of which the vendee should not have bought the thing

A. Accion quanti minoris

B. Accion reinvidicatoria

C. Accion pauliana

D. Redhibilitory action

d. redhibitory action

The redhibitory action based on the faults or defects of animals must be brought within

A. 30 days from delivery to the vendee

B. 40 days from delivery to the vendee

C. 45 days from delivery to the vendee

D. 6 months from delivery to the vendee

b. 40 days from delivery to the vendee

In contract of sale, if the price is absolutely simulated, the sale is

A. Unenforceable

B. Voidable

C. Void

D. Rescissible

c. void

When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the goods passes to the buyer:

A. Upon perfection of the contract

B. Upon acceptance by the buyer of the offer of the seller

C. Upon expiration of seven days

D. Upon delivery of the goods

d. upon delivery of the goods

Which of the following cannot be the object of a contract of sale?

A. Sale of credit

B. Young animal not yet conceived at the time of perfection

C. Land which the seller expects to buy

D. Future inheritance

d. sale of future inheritance

Ownership of the thing sold is

A. Retained by the seller in “sale or return

B. Transferred to the buyer upon constructive or actual delivery of the thing sold

C. Acquired by the buyer upon perfection of the contract

D. Transferred to the buyer upon acceptance of the price

B. Transferred to the buyer upon constructive or actual delivery of the thing sold

A contract of sale is in the stage of conception when

A. There is meeting of the minds

B. Negotiations are in progress

C. The parties come to an agreement

D. The contract is perfec

B. Negotiations are in progress

I. Should the vendee’s failure to pay, cover two or more installments, the vendor may foreclose the chattel mortgage on the thing sold but he shall have no further action against the purchaser to recover any unpaid balance of the price, except if there is an agreement to the contrary.

II. Sale is a consensual contract, therefore delivery or payment is not essential for perfection.

A. First statement is true, second statement is false.

B. First statement is false, second statement is true.

C. Both statements are true.

D. Both statements are fa

A. First statement is true, second statement is false.

I. The ownership of the thing sold shall be transferred to the vendee upon perfection of the contract.

II. An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissory.

A. First statement is true, second statement is false.

B. First statement is false, second statement is true.

C. Both statements are true.

D. Both statements are false

d. both statements are false

I. Any stipulation exempting the vendor from the obligation to answer for eviction shall be void.

II. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold only if he was aware thereof.

A. First statement is true, second statement is false.

B. First statement is false, second statement is true.

C. Both statements are true.

D. Both statements are false

d. both statements are false

I. If the animal sold should die within three (3) days after its purchase, the vendor shall be liable to the vendee.

II. The fixing of the price can never be left to the discretion on one of the contracting parties. However, if the price fixed by one of the parties is accepted by the other, the sale is perfected.

A. First statement is true, second statement is false.

B. First statement is false, second statement is true.

C. Both statements are true.

D. Both statements are false

B. First statement is false, second statement is true.

I. Option money is considered as part of the purchase price while earnest money is not.

II. The Maceda Law refers to the sale of personal property by installments while the Recto Law refers to the sale of real property by installments.

A. First statement is true, second statement is false.

B. First statement is false, second statement is true.

C. Both statements are true.

D. Both statements are fals

d. both statements are false

One of the distinctions between pledge and mortgage is that pledge:
a. is constituted to secure the fulfillment of a principal obligation.
b. requires absolute ownership on the part of the person constituting the security.
c. requires that the one constituting the security must have the free disposal of the thing or
be legally authorized for the said purpose.
d. requires the actual delivery of the thing given as security to the creditor or a third person
by common agreement.

d. requires the actual delivery of the thing given as security to the creditor or a third person by common agreement.

In order to bind third persons, a pledge:
a. must be recorded with the Register of Deeds.

b. must be in a public instrument showing a description of the thing pledged and the date of
the pledge.

c. is sufficient that it be in a private instrument showing a description of the thing pledged
and the date of the pledge.

d. must be accompanied by an affidavit of good faith.

b. must be in a public instrument showing a description of the thing pledged and the date of
the pledge.

The following is required in order that a chattel mortgage will bind third persons.
a. The chattel mortgage must be accompanied by an affidavit of good faith and recorded in
the Chattel Mortgage Register.
b. The chattel mortgage must be in a public instrument showing a description of the thing
mortgaged and the date of the chattel mortgage.
c. It is sufficient that the chattel mortgage be in writing, public or private.
d. The thing mortgaged must be delivered to the creditor.

a. The chattel mortgage must be accompanied by an affidavit of good faith and recorded in
the Chattel Mortgage Register.

The following is required in order that a real mortgage will bind third persons.
a. The real mortgage must be accompanied by an affidavit of good faith and recorded with
the Registry of Property.
b. The real mortgage must be in a public instrument showing a description of the thing
mortgaged and the date of the real mortgage.
c. It is sufficient that the real mortgage be in writing, public or private.
d. The real mortgage must be recorded in the Registry of Property.

d. The real mortgage must be recorded in the Registry of Property.

When is appropriation by the creditor of the thing given as security allowed in pledge, real
mortgage and chattel mortgage?
a. When the thing given as security in real mortgage is not sold at two public auctions.
b. When the thing given as security in pledge is not sold at two public auctions.
c. When the thing given as security in chattel mortgage is not sold at one public auction.
d. No appropriation is allowed in either pledge, real mortgage or chattel mortgage.

b. When the thing given as security in pledge is not sold at two public auctions.

This is a stipulation in pledge or mortgage providing that the ownership of the thing given as
security will pass to the pledgee or mortgagee upon default of the debtor.
a. Constitutum possessorium

b. Pactum commissorium

c. Legal subrogation

d. Redemption

b. Pactum Commissorium

D borrowed P30.000.00 from C. To secure the debt, D pledged his ring, wristwatch, and necklace. Before the debt could be paid, C died leaving X, Y and Z as heirs. By agreement among the heirs who inherited the credit, the ring would secure the share of X of the credit, the wristwatch the share of Y, and the necklace the share of Z. Later, D pays X P10,000.00.
a. D can demand the extinguishment of the pledge of the ring.

b. X may release the pledge of the ring.

c. The pledge of the ring will remain until the shares of Y and Z are paid by D.

d. D can demand the extinguishment of the pledge of the ring, wristwatch and necklace
because there has been partial payment.

c. The pledge of the ring will remain until the shares of Y and Z are paid by D.

The following may be the object of pledge, except:
a. all movables within the commerce of men which are susceptible of possession.
b. bills of lading.
c. shares of stock.
d. parcels of land.

d. parcels of land

A kind of mortgage which lacks the formalities required by law but nevertheless shows the intention of the parties to secure a debt with real property is known as:
a. conventional mortgage.

b. voluntary mortgage.

c. equitable mortgage.

d. legal mortgage.

c. equitable mortgage.

The debtor/pledgor has the following rights, except to:
a. ask for the return of the thing pledged after he has paid the debt, its interests, and with expenses in a proper case.
b. continue to be the owner of the thing pledged unless it is expropriated.
c. require the deposit of the thing with a third person if it is in danger of being impaired or lost through the negligence or willful act of the pledgee.
d. alienate the thing pledged without the consent of the pledgee.

d. alienate the thing pledged without the consent of the pledgee.

The creditor/pledgee has the following rights, except to:
a. retain the thing in his possession until the debt is paid.
b. use the thing pledged even without authority if such use is necessary for its preservation.
c. demand reimbursement of the expenses made for the preservation of the thing.
d. automatically appropriate the thing pledged upon default of the debtor in the payment of
his debt.

d. automatically appropriate the thing pledged upon default of the debtor in the payment of
his debt.

On March 1, 2014, D obtained a loan of P10,000.00 from C. To secure the debt which is payable on May 1, 2014, D pledged a promissory note amounting to P12,000.00 which was
executed in his favor by M. The promissory note is due April 25, 2014 and properly endorsed by D to C.
a. On April 25, 2014, C can collect the note of P12,000.00 from M. The entire proceeds will belong to O
b. On April 25, 2014, C can collect the note of P12,000.00 from M. However, he must give P2,000.00 to D.
c. C cannot collect from M. D is the one entitled to collect the note from M.
d. C cannot collect from M. He must sell the note at public auction at maturity if D cannot pay

b. On April 25, 2014, C can collect the note of P12,000.00 from M. However, he must give P2,000.00 to D.

A third person who pledges his property to secure another person's debt is released from liability in the following cases, except:
a. when the creditor voluntarily accepts an immovable property in payment of the debt.
b. when the creditor voluntarily accepts a movable property in payment of the debt.
c. if an extension of time is granted to the debtor by the creditor with the pledgor's consent.
d. if through some acts of the creditor, the pledgee cannot be subrogated to the rights, mortgages and preferences of the creditor.

c. if an extension of time is granted to the debtor by the creditor with the pledgor's consent.

A pledge is extinguished through any of the following, except:
a. sale of the thing pledged.
b. appropriation of the thing pledged after the thing is not sold at one public auction.
c. written abandonment of the pledge in writing.
d. return of the thing pledged.

b. appropriation of the thing pledged after the thing is not sold at one public auction.

D pledged his 100 shares of stock of San Miguel Corporation to C to secure his debt of P5,000.00. On due date, D was not able to pay the debt, so C caused the sale of the shares at public auction. The shares of stock were sold at P4,500.00.
a. To extinguish the obligation, C may recover the deficiency of P500.00 from D if there is a stipulation to that effect.

b. To extinguish the obligation, C may recover the deficiency even if there is no stipulation to that effect.

c. The obligation is extinguished even if there is a deficiency of P500.00. Accordingly, C can no longer recover the deficiency.

d. The obligation is extinguished only if the proceeds of sale amount to P5,000.00 or more.

c. The obligation is extinguished even if there is a deficiency of P500.00. Accordingly, C can no longer recover the deficiency.

This refers to the right of a person to retain a thing until he receives payment of his claim in the cases provided by law such as one who has executed work on a movable.
a. Conventional pledge.

b. Voluntary pledge.

c. Legal pledge.

d. Chattel Mortgage.

c. Legal pledge.

One of the following may not be the object of a real mortgage:
a. Land, buildings, roads and construction of all kinds adhered to the soil.

b. Fertilizer actually used on a piece of land.

c. Animal houses, pigeon houses or other breeding places intended by the owner to be permanently attached to the land, including the animals therein.

d. Growing fruits that have been gathered from trees planted on land.

d. Growing fruits that have been gathered from trees planted on land.

D borrowed P100,000.00 from C. To secure the debt, D mortgaged his land and building in favor of C. The mortgage is registered with the Registry of Property. Sometime later, D sold the land and building to X who was not aware of the mortgage of the land and building.
Based on the above information, which of the following statements is false?
a. X must respect the mortgage although he was not a party thereto.

b. X was not bound by the mortgage because he was not aware of it.

c. If C forecloses the mortgage and the proceeds of the foreclosure sale are not enough to pay for the debt, C can recover the deficiency from D.

d. If C forecloses the mortgage and the proceeds of the foreclosure sale exceed the
amount of debt, D is entitled to the excess.

b. X was not bound by the mortgage because he was not aware of it.

It is the right of the mortgagor to redeem the property that was mortgaged after it was sold.
a. Equity of redemption.

b. Right of redemption.

c. Right of subrogation.

d. Right of pre-emption

b. Right of Redemption

A chattel mortgage may have the following as object, except:
a. motor vehicles.
b. shares of stock.
c. vessels.
d. floating docks and structures which are intended by their nature and object to remain at a fixed place on a river, lake or coast

d. floating docks and structures which are intended by their nature and object to remain at a fixed place on a river, lake or coast

D borrowed P50,000.00 from C. The obligation bears interest of 10% per annum. To secure the debt, D agreed with C that the fruits from the agricultural lot of D shall answer for the interest and the principal obligation. Assuming the form required by law was complied with, the contract entered into between D and C for the application of the fruits of the lot to the interest and principal obligation is known as:
a. antichresis.

b. pledge.

c. real estate mortgage.

d. chattel mortgage.

a. antichresis

A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the car to B and the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in the possession of B through fortuitous event and without B’s fault, before full payment of the balance. Is B obliged to pay the balance?

A. No, because the car was lost through fortuitous event and without B’s fault, hence B’s obligation is extinguished.

B. No, because the loss should be borne by the seller as this an installment sale so until the buyer pays the full amount of the price of the sale, A remains to be the owner.

C. Yes, but A must give another car to B because of the principle “genus nunquam perit” or generic thing never perishes

D. Yes, because the principle “res perit domino” or the thing perishes with the owner

D. Yes, because the principle “res perit domino” or the thing perishes with the owner

X sold her specific car to V for P200,00 payable in 5 equal installments. X delivered the car to V but a mortgage was constituted on the car to answer for the unpaid installments. V paid the first 2 installments but failed to pay the last 3 installments. X foreclosed the mortgaged property and sold it at public auction for P100,000. Which is correct?

A. X can recover from V the balance of P20,000 even if there is no stipulation to that effect

B. X can recover from V the balance of P20,000 if there is stipulation to that effect

C. X cannot recover the deficiency except if there is stipulation to that effect

D. X cannot recover the deficiency even if there is stipulation to the contrary

D. X cannot recover the deficiency even if there is stipulation to the contrary

X leased to V a 5 Freezer for two years at a lease rental fee of P1,000 per month and signed an option in favor of V to buy the freezers at the end of the term of the lease at P50,000. All rental fee paid are to be considered as partial payment of the sale. After 12 months V was able to pay the rental fee for 9 months and was in arrears for three months. X terminated the lease contract and repossessed the freezers. The consequence of the transaction is

A. X can collect the rental fees for three months which are in arrears.

B. X can collect the rental fees for the unexpired 12 months of the lease contract.

C. When X took possession of the freezer, he has no further action against V

D. X in terminating the lease and repossessing the freezer is obliged to refund the 9 months rental fee, paid by V even if there is a stipulation to the contrary

C. When X took possession of the freezer, he has no further action against V

I. The expenses for the execution and registration of the sale shall be borne by the vendee, unless there is a stipulation to the contrary.

II. If the same thing should have been sold to different vendees the ownership shall be transferred to the person who may have taken possession thereof in good faith

True, False

For its validity, a contract with antichresis:
a. must be in writing, whether public or private.
b. must be in a public instrument.
c. may be in any form, whether oral or written.
d. may be inferred from the conduct of the parties

a. must be in writing, whether public or private.

D pledged his computer to secure a loan which he obtained from C. The debt which amounts to P10,000.00 is due after 60 days. Before the due date, C executed an instrument
abandoning the pledge.'
I. D's debt of P10,000.00 is extinguished.
II. The pledge of the computer is extinguished even if D has not yet accepted the renunciation of the pledge.
III. The pledge is not extinguished until C returns the ring to D.
IV. The pledge is extinguished even if C has not returned the ring to C.

Based on the foregoing, which is false among the four statements?
a. I and III. c. I and II.
b. II and IV. d. II and III.

a. I and III

In a contract of pledge, the pledgee/creditor may do the following, except to:
a. use the thing pledged for purposes of preservation.
b. retain the thing pledged until the principal obligation is satisfied.
c. ask for a substitute if he was deceived on the substance or quality of the thing pledged.
d. sell the thing pledged without notice to the pledgor/debtor.

c. ask for a substitute if he was deceived on the substance or quality of the thing pledged.

The following are the characteristics of a chattel mortgage, except:

a. the mortgagor must be the absolute owner of the property mortgaged.

b. it is an accessory contract.

c. it involves movable or immovable property.

d. the deed of chattel mortgage must be accompanied by an affidavit of good faith to be binding against third persons

c. it involves movable or immovable property.

The following elements are common in both pledge and mortgage, except:
a. the contract is constituted to secure the fulfillment of a principal obligation.
b. the property on which the security is constituted must be delivered to the creditor.
c. the debtor must be the absolute owner of the property pledged or mortgaged.
d. the debtor must have free disposal of the property pledged or mortgaged.

b. the property on which the security is constituted must be delivered to the creditor.

In the sale of the thing pledged at public auction, which of the following statements is incorrect?
a. The sale extinguishes the principal obligation regardless of the amount of the proceeds of sale.
b. The pledgee can appropriate the thing pledged if it is not sold at the first public auction.
c. The creditor has no right to recover deficiency.
d. The debtor is not entitled to the excess of proceeds unless there is an agreement.

b. The pledgee can appropriate the thing pledged if it is not sold at the first public auction.

Which of the following is a similarity of chattel mortgage and pledge?
a. Deficiency is recoverable in case of sale of the thing pledged/mortgaged.
b. The object of the contract is a movable property.
c. The excess of the proceeds of sale over the amount of the obligation belongs to the pledgor/mortgagor.
d. An affidavit of good faith is required to bind third persons.

b. The object of the contract is a movable property.

D borrowed 100,000.00 from C. The loan is secured by a mortgage of T's lot. On due date, D was unable to pay. Accordingly, C foreclosed the mortgage on the lot and during the public auction, the lot was sold for P90,000.00.
a. C can recover the deficiency from D.
b. C can recover the deficiency from T.
c. C can recover the deficiency from both D and T.
d. C can no longer recover the deficiency.

a. C can recover the deficiency from D.

Consider the following cases:
I. D owes C P10,000.00. To secure the debt, D pledged his cell phone. D defaults. The cellphone is sold for P9,000.00 at the public auction.

II. D bought a car for P360,000.00 from C. The price, which is payable in 12 equal monthly installments of P30,000.00, is secured by a chattel mortgage on the car. After paying 2 installments, D defaults in the payment of 3 installments. C forecloses the chattel mortgage and the car is sold at the public auction for P280,000.00.

The deficiency is recoverable in:
a. Both I and II.

b. I only.

c. II only.

d. No deficiency is recoverable in both I and II.

d. No deficiency is recoverable in both I and II.

D pledged his diamond ring and gold watch to C to secure a debt of P10,000.00.
a. If D defaults and the ring and watch are sold at public auction, C may recover any deficiency if the proceeds of sale amount to less than P10,000.00.
b. If D defaults, C may automatically appropriate for himself the ring and the watch.
c. If D pays C P5,000.00, D may demand either the return of the ring or the watch.
d. If C renounces the pledge in writing, the pledge is extinguished although C continues to possess the ring and the watch.

d. If C renounces the pledge in writing, the pledge is extinguished although C continues to possess the ring and the watch.

Alpine Corporation obtained a loan amounting to P1,000,000.00 from Eastern Bank. To secure the obligation, P, the president of Alpine, mortgaged his own building in favor of the bank. The contract of loan and deed of mortgage have been signed by the parties but have
not been acknowledged before a notary public.
a. Alpine Corporation and P are one and the same person.
b. P may validly mortgage his own property to secure the obligation of Alpine to the bank.
c. The mortgage is not yet binding between the parties since it has not been notarized.
d. The mortgage contract can stand independently from the contract of loan.

b. P may validly mortgage his own property to secure the obligation of Alpine to the bank.

Pledge and real mortgage are similar in what respect?
a. The object of the contract.
b. Binding effect against third persons.
c. Recovery of deficiency.
d. The fact that third persons may pledge or mortgage their property to secure another
person's debt.

d. The fact that third persons may pledge or mortgage their property to secure another
person's debt.

D obtained an interest-bearing loan from ABC Bank amounting to P100,000.00. To secure the obligation, D mortgaged his building to ABC Bank. As added requirement of the loan, a fire insurance on the building was also obtained by D with ABC Bank as beneficiary. Before the due date of the loan, the building was razed by fire.
a. The loan of D amounting to P100,000.00 is extinguished but the security remains.
b. Only the security for the obligation is extinguished.
c. The proceeds of the insurance policy will be the new security of the loan obligation which will subsist.
d. Both the loan and the mortgage security are extinguished.

c. The proceeds of the insurance policy will be the new security of the loan obligation which will subsist.

D borrowed P20,000.00 from C. To secure the obligation, D pledged his ring to C. Before the due date, C executed a public instrument stating that he was abandoning the pledge and informed D about it. In the meantime, the ring remained in the possession of C.
a. D must accept the renunciation in order to extinguish the pledge.

b. C must return the ring to D to extinguish the pledge.

c. D's loan obligation is extinguished by reason of the abandonment of the pledge.

d. The pledge of the ring is extinguished although D does not accept the renunciation or
has not yet received the ring from C.

d. The pledge of the ring is extinguished although D does not accept the renunciation or
has not yet received the ring from C.

To bind third persons, the following contracts must comply with certain
formalities/requirements:
I. A contract of pledge must be in a public instrument showing the date of the pledge and a description of the thing pledged and recorded with the Registry of Property.
II. A contract of real estate mortgage must be recorded with the Registry of Property.
III. A contract of chattel mortgage must contain an affidavit of good faith and be recorded in
the Chattel Mortgage Register.
a. All statements are true.

b. I and II are true.

c. I and III are true.

d. II and III are true.

d. II and III are true

As a general rule, any deficiency in the foreclosure sale may be recovered in the following
contracts, except in:
a. chattel mortgage.

b. real mortgage.

c. conventional pledge.

d. antichresis.

conventional pledge

As a general rule, in case of excess of the proceeds of the foreclosure sale over the creditor's claim, the excess shall belong to the creditor in:
a. chattel mortgage.

b. real mortgage.

c. conventional pledge.

d. antichresis.

conventional pledge

D contracted the services of T, a tailor, to sew D's pair of pants with D providing the cloth for the purpose. The parties agreed that T's labor shall be P500.00. The security that T holds for the payment of the labor agreed upon is in the nature of:
a. chattel mortgage.

b. legal pledge.

c. conventional pledge.

d. antichresis.

b. legal pledge [the right of a person to retain a thing until he receives payment of his claim]

D obtained a loan of P5,000.00 from C. The obligation is secured by a pledge of D's ring which he delivered to C. Both the loan and the pledge were in a private instrument. While the loan was outstanding, D sold the ring through a public instrument to X who was not aware of the pledge. Under the deed of sale, D obliged himself to deliver the ring physically to X after a week. Before X could obtain actual delivery of the ring, he learned that D had earlier pledged the same and that C was selling the ring in a public sale because of D's default in the payment of his debt.
a. X is bound by the pledge made by D to C.
b. X is not bound by the pledge made by D to C.
c. C can sell the ring to satisfy his claim.
d. X did not acquire ownership of the ring from D.

b. X is not bound by the pledge made by D to C.

When the thing pledged is in danger of deterioration or impairment without the fault of the
pledgee, the pledgor has a right to demand the return the thing pledged by offering another
thing of the same kind and quality. At the same time, the pledgee has a right to cause the
sale of the thing pledged. Who between the pledgor and pledgee is given preferential right?
a. Pledgor
b. Pledgee
c. Either one whoever asserts first the right.
d. Neither, because the preferential exercise of the right must be stipulated.

b. Pledgee