kupdf com test bank cpar sales

TEST BANK
SALES, AGENCY and PLEDGE

1.Unless there is stipulation to the contrary the expenses for the execution or registration of the
sale shall be borne by:
A.
B.
C.
D.

The Vendee
The Vendor
The Vendee and Vendor
The agent or broker

2. A offered to sell his lot to B for P100,000. In his offer to sell it was stated that he is given 60
days to prepare the P100,000 and as soon as B is ready with the money, A will execute a deed
of sale. Before the end of 60 days, A informed B that price of the lot was increased to
P120,000. May B, compel A to accept P100,000 offered previously by A and make him
execute the deed of sale?
A.
B.
C.
D.

Yes, because A already signed his offer
No, For B never signified his acceptance of A’s offer.
Yes, because there was actual meeting of minds of the parties
Answer not any of the above.

3. A wrote a letter to B wherein A offered to sell a piece of land to B for P200,000. B signified

his desire to buy the land. In A’s letter he gives B a period of two (2) months within to
produce the P200,000. After 45 days, A told B that the price of the land is now P250,000.
Can B compel A to accept the P200,000 first offered by A and execute the deed of sale?
A.
B.
C.
D.
4.

Yes, because there was actual meeting of the minds of A’s offer
No, for B did not signify his acceptance of A’s offer
Yes, because A is already estoppels by his signed letter
Yes, because the period of two (2) months has not expired

Mr. AB owes Mr. CD P150,000 due on August 1, 2010. Mr. AB executed mortgage in favor
of Mr. CD on Mr. AB’s building to guaranty the obligation. On August 10, 2010, the
mortgage building was totally lost due to a strong typhoon. On August 12, 2010, Mr. CD
demanded payment from Mr. AB. Is Mr. CD’s demand valid?
A. No, the obligation is one with a definite period, thus the creditor cannot demand
fulfillment of the obligation as such would the prejudicial to the rights of the debtor.
B. No, the obligation is extinguished because the obligation is lost through a fortuitous
event.
C. Yes, the debt becomes due at once because the guaranty was lost even through a
fortuitous event. Unless the debtor can mortgage another property that is equally
satisfactory.
D. Yes, the debt becomes due at once because, from the tenor benefit is given solely to the
creditor thereby giving the creditor the right to demand performance even before the date.

5.

Mrs. Go sold and delivered her diamond ring to Mrs. Pat. It was agreed upon that after ten
(10) days Mrs. Pat will name and fix the price. On the tenth (10th) day, Mrs. Pat called up by
telephone Mrs. Go and stated the price at P10,000. Mrs. Go agreed. IS the sale perfected?
A. Yes, the price stated and named by one of the contracting parties was accepted by
the other.
B. No, at the time of the sale the price was not fixed.
C. No, the price was left to the discretion of one of the parties
D. No, at the time of the sale the price is not known.


6. Mr. Sy sold a parcel of land to Mr. Tan for P200,000. Mr. Sy delivered the transfer Certificate
of Title of the land to Mr. Tan. Later, Mr. Tan wanted to register the land to his name and he
needed a Deed of Sale. What can Mr. Tan do?
A. Mr. Tan can compel Mr. Sy to execute a Deed of Sale
B. Mr. Tan cannot compel Mr. Sy to refund the P200,000 because the contract is not
enforceable
C. Mr. Tan can sue Mr. Sy enriching himself at the expense of another.
D. Mr. Tan can possess and utilize the land as a buyer in good faith.
7. Bonds which are not secured by any specific mortgage lien of pledge or corporate property
but by the general corporation are:
A.
B.
C.
D.

Guaranteed bonds
Debenture bonds
Income bonds
Redeemable bonds

8. The buyer of a thing has the right to the fruits of the thing:
A.
B.
C.
D.

From the time the thing bought is delivered
From the time the sale is perfected
From the time the obligation to deliver the thing bought arises.
From the time the fruits are delivered.

9. Three (3) of the following are option money. Which is the earnest money?
A.
B.
C.
D.

Given when contract of sale is perfected.
Given when there is no contract of sale.
Given to bid the offer or in a unilateral promise to sell or to buy.
Given as a separate consideration from purchase price.

10. In a sale, this is actual delivery.
A.
B.
C.
D.

Execution and signing of the sale document.
When the goods sold are placed in the control and possession of the buyer.

Delivery by the seller to the buyer of the key where the goods sold are kept.
The buyer is already in actual possession of the goods.

11. This is a mode to extinguish an agency:
A.
B.
C.
D.

Death of the principal, but the agency is for the interest of the principal and agent.
Partial accomplishment of the agency.
Upon withdrawal of the principal.
Insanity of principal or agent.

12. D pledged his Singer Sewing Machine to C for P8,000. D was unable to pay the obligation
60 days after it was due. C sold the machine at public auction for P6,000.
A.
B.
C.
D.

C cannot recover the deficiency of P2,000 even if there is stipulation that he can.
C can recover the deficiency of P2,000 even without stipulation.
C cannot recover the deficiency of P2,000
C can recover the deficiency of P2,000.


13. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the time:
A.
B.

C.
D.

The obligation to deliver the thing sold arises
The sale is perfected
The thing sold is delivered
The fruit of the thing sold is delivered.

14. Mr. AB offered in writing to sell his house and lot for P750,000 to Mr. CD on July 1, 2010.
Mr. CD requested Mr. AB to give him 60 days within which to raise the P750,000. On
August 15, 2010 Mr. AB informed Mr. CD that the price is raised and now at P1,000,000.
Can Mr. CD compel Mr. AB to sell his house and lot at P750,000 which was offered in
writing by Mr. AB?
A.
B.
C.
D.

Yes, because Mr. AB is already stopped by his written offer.
Yes, because the 60 days offer has not yet expired
No, because Mr. CD has not accepted the offer of Mr AB.
Yes, there was meeting of the minds.

15. In distinguishing Earnest Money from Option money, earnest Money is:
A.
B.
C.
D.

Given when there is no contract of sale,

Given only when there is perfected contract of sale.
Given to bind the offer or in a unilateral promise to sell or buy
Given as a separate consideration from the purchase price.

16. Gay appointed May to sell the former’s car for P200,000. May sold the car to Pam, Pam
inspected the car and found hidden defects in the car. Can Pam file an action against Gay
even when May acted in her own name?
A.
B.
C.
D.

No, under “Caveat Emptor” let the buyer beware.
Yes, because this is contract involving property belonging to the principal
No, because, May acted in her own name not of the principal.
No, because the contract of sale is already perfected.

17. Mr. San authorized Mr. Soy to sell his car for p200,000 with 5% agent’s commission. Mr.
Soy sold the car to Mr. Dy for P250,000. For how much is Mr. Soy accountable to Mr. San?
A.
B.
C.
D.

P200,000
P190,000
P250,000
P240,000

18. B pledged his Rolex to C for P4,000. B failed to pay C the P4,000 on due date. C sold the

Rolex watch at a public auction to the highest bidder at P3,500.
A.
B.
C.
D.

C can recover the deficiency of P500 from B.
C can recover the deficiency of P500 even without stipulation.
C cannot recover the deficiency of P500 unless there is stipulation.
C cannot recover the deficiency of P500 even if there is stipulation.

19. Which of the following may not be the object of sale?
A.
B.
C.
D.

Things having potential existence
The sale of a vain hope or expectancy
Future goods
Answer not given.


20. When delivery takes place by the mere consent or agreement of the contracting parties as
when the vendor merely points to the thing sold which shall thereafter be at the control and
disposal of the vended if the thing sold cannot be transferred to the possession of the vendee
at the time of sale, delivery is effected:
A.
B.
C.

D.

By tradition symbolica
By traditio longa manu
By traditio brevoi manu
Answer not given

21. The distinction between a chattel mortgage and a pledge is that in chattel mortgage:
A.
B.
C.
D.

The delivery of the personal property is necessary
The registration of the property in the Registry of Property is not necessary
The excess over the amount due after foreclosure, goes to the debtor
Answer not given.

22. Sale is distinguished from dation in payment in that in sale
A.
B.
C.
D.

There is a pre-existing obligation or credit
The cause is the price
It is a mode of extinguishing an obligation in the form of payment.
Answer not given.

23. Mr. Mar orders for his workers 1,000 pieces of T-shirt ranging in size from small to large

from RDG Garments Mfg. Corp. The specified sizes, although not then available, are
manufactured by said corporation and consigned to its sales outlets regularly. The contract
entered into by Mr. Mar with the RDG Garments Mfg. Corp. is a:
A.
B.
C.
D.

Contract for a piece of work.
Contract subject to a resolutory condition
A contract of sale
Answer not given

24. Mr. Amado owes the BIR P100,000 in delinquent taxes and penalties. In order to evade the
payment of said liability, he executed a deed of sale of his only parcel of land valued for
P200,000 in favor of his brother Pedro, where P20,000 was stated as the purchase price but
the BIR has evidence that said price had never been paid, the purpose of the sale being to
prevent the BIR to levy upon the land to satisfy the tax liability of Mr. Amado. In this case:
A. The BIR may not levy upon the land because the sale is void
B. The BIR without annulling the sale may levy upon the land of Amado pursuant to
the provisions of the National Internal Revenue Code
C. The BIR should first annul the sale before it may levy upon the land pursuant to the
provisions of the National Internal Revenue Code.
D. Answer not given.
25. Mr. Rene owns a mango tree bearing fruits, ready for harvest. He sells all the fruits of that
tree to Mr. Mar who pays Mr. Rene the sum of P5,000. Rene tells Mar that he can just
harvest the fruits anytime he likes pointing at the particular tree. For legal purposes, Rene has
fulfilled his obligation to deliver the mango fruits to Mar by:
A. Traditio brevi manu
B. Traditio longa manu

C. Traditio simbolica


D. Answer not given
26. Mar Garci, before going to Spain appointed Jc Legaspi as his agent to administer his
properties in the Philippines. Afterwards, Legaspi wrote Garci that he ( Legaspi) was
withdrawing from the agency because of failing health. Legaspi, in the same letter said that
he appointed Eg Legaspi as his substitute and that Mar should extend a new appointment to
Eg. Eg took over the duties of Jc but Mar did not bother to appoint Eg to act as his agent
until Mar’s death. Now Mar’s heirs brought an action against Eg for accounting. Eg raised
the defense that he was not validly constituted as an agent of Mar. In the case at bar, defense
is not tenable because there is:
A.
B.
C.
D.

An actual agency
An implied agency
A general agency
Answer not given

27. Maria is authorized by Dulfo to sell the latter’s washing machine for P5,000 each at 10%
commission. One day, Dulfo sells one washing machine to Carla on credit (payable in 90
days) but for a price of P6,000. If Dulfo does not ratify this sale on credit, he can collect cash
payment from Maria:
A.
B.
C.
D.

P4,500 (P5,000 less P500 commission)
P5,000 (the price without commission)
P5,400 (P6,000 less P600)
Answer not given

28. Tony sold a piece of land to Rene binding himself not to sell the same to another person. On
the following day, Tony sold the land to Carla who immediately took possession in good
faith. In the case at bar, the proper remedy of Rene is to:
A. Institute an action for the annulment of the sale to Carla
B. Institute an action for the recovery of the land
C. Institute an action for damages against Tony
D. Answer not given
29. Ces kidnapped and tortured Ed for refusing to sell his (Ed’s) land to Ces. Ed who could no
longer bear the physical pains inflicted upon him signed a document of sale in favor of Ces.
This sale is:
A.
B.
C.
D.

Void
Voidable
Valid
Answer not given

30. A sold a residential land to B. B paid the consideration. When B wanted to register the sale at
the Register of Deeds, the latter refused to register and requires the presentation of the
certificate of capital gains tax payment. What can B do?
A. B may sue A to refund the consideration paid by B under the maxim, “no one shall enrich

himself at the expenses of another.”
B. B cannot compel A to return the selling price because the contract is not enforceable
C. B may possess the residential land as a buyer in good faith
D. B may compel A to pay the capital gains tax and secure the certificate of capital
gains tax payment


31. A Seller sold to a Buyer a piece of jewelry at a price of P20,000. The contract provides that
the Buyer will pay Seller a micro wave oven worth P5,000. What is the nature of the contract?
A.
B.
C.
D.

Sale
Partly sale and partly barter
Barter
Commodatum

32. Mr. A. Abad signed a letter addressed and delivered to Mr. B. Baje. The terms of the letter
are:
1.
2.
3.
4.

An offer to sell a 500 sq.m. lot for P300,000
An option time up to October 31, 2010 for Mr. Baje to raise the P300,000
Upon payment of the P300,000, Mr. Abad will execute and sign a Deed of Sale
On October 31, 2010, Mr. A Abad sent a letter to Mr. B. Baje asking for a new price of

P350,000 for the 500 sq. m. lot.

Can Mr. B. Baje compel Mr. A. Abad to accept the P300,000 and make him sign and execute
a Deed of Sale?
A.
B.
C.
D.

No, Mr.B. Baje did not accept the offer of Mr. A. Abad
Yes, Mr. A. Abad is already stopped by his sighing the letter and offer.
Yes, there was actual meeting of the minds.
Yes, the contract is perfected

33. Mr. A mortgaged his residential land to Mr. B as a guarantee for the payment of P400,000
obligation of Mr. A. They agreed that Mr. A shall not sell the land while the obligation
exists. The maturity of the mortgaged, C offered to buy the land from Mr. A.
A.
B.
C.
D.

A cannot sell the land to Mr. C because of the agreement not to sell
A can sell the land to Mr. C only if B consents in writing
A can sell the land to Mr. C despite the agreement not to sell (?)
A cannot sell the land to Mr. C unless A pays the obligation

34. Mr. D. Dy constituted Mr. S. Sim as his authorized agent to sell the former’s Lancer car for
P300,000 and to pay him a 5% commission on the selling price. Mr. S. Sim sold the car for
P320,00. Mr. S. Sim shall remit to Mr. D Dy:

A.
B.
C.
D.

P300,000
P320,000
P285,000
P305,000

35. Ownership of the thing sold is transferred / acquired / retained:
A.
B.
C.
D.

Retained by the seller in “sale of return”
Transferred to the buyer upon constructive or actual delivery of the thing sold
Acquired by the buyer upon
Transferred to the buyer upon acceptance of the price.

36. If redemption is made, which of the following will not be paid by the seller to the buyer
A.
B.
C.
D.

Price paid by the buyer
Expenses in the execution of the sales contract paid by the buyer
All necessary expenses on the thing sold and to be redeemed

Interest of the price paid by the buyer


37. The following are requisites of Pledge except:
A.
B.
C.
D.

The disposal of the pledge
The absolute ownership of the property pledged
The thing pledge may be placed in the possession of a third person
To bind a third person, it must be recorded in the office of the Register of Deeds

38. The leviable properties of the debtor are transferred to the creditors to be sold and from the
proceeds, the creditor are paid;
A.
B.
C.
D.

Pledge
Cession
Dacion en pago
Chattel mortgage

39. A characteristic of the Contract of Sale which involves exchange of value, it is
A.
B.
C.

D.

Commutative
Nominate
Bilateral
Consensual

40. The principal is not liable for expenses incurred by the agent:
A. When it was stipulated that the agent would only be allowed a certain sum
B. When the agent has complied with his obligations by acting according to the principal’s
instructions
C. When the agent incurred them with the knowledge that an unfavorable result would ensue
and the principal was aware of it
D. When the expenses were incurred without the fault of the agent
41. An assignor of credit warrants:
A.
B.
C.
D.

Solvency of the debtor
Existence and legality of credit
Collectibility
Assurance of payment

42. A appoints B to sell his land
Example 1. If the authority of B is oral and B sells the land in writing. The sale is valid.
Example 2. If the authority of B is in writing and B sells the land orally. The sale is valid
A.
B.

C.
D.

Both examples are true
Both examples are false
First example is true, but the second example is false
First example is false but the second example is true

43. Which of the following is not a characteristic of Sale?
A.
B.
C.
D.

Bilateral
Gratuitous
Consensual
Nominate


44. The following are the alternative remedies, except one available to the buyer in case of
breach of warranty by the seller:
A.
B.
C.
D.

Keep the goods and ask for damages
Refuse to accept the goods and ask for damages
Rescind the sale and retain the goods

Keep the goods and set up against the seller by way of recoupment in price.

45. Which of the following statements is true and correct?
A. In a Contract of Sale, the full payment of the price is in the nature of a suspensive
condition in that the seller is obligated to transfer ownership of the thing sold.
B. The seller need not be the owner of the thing sold at the perfection of the sale.
C. There may be a transfer of ownership over the thing even if the seller has not delivered
the thing sold to the buyer.
D. In a Contract of Sale, the buyer becomes the owner of the thing sold upon full payment of
the purchase price.
46. X, Y and Z were appointed by R as his agents to administer his building which was rented by
various tenants while R was abroad for three years. In the course of management, X cause
through his fault damage to the building which was assessed at P30,000. R can claim:
A.
B.
C.
D.

P10,000 from each of X, Y and Z.
P30,000 from X
P30,000 from Y and Z
P30,000 from either X, Y and Z

47. Pledge and Mortgage are accessory contracts because they:
A.
B.
C.
D.

Are meant to secure the fulfillment of a principal obligation.

Cannot exist if the principal obligation is void.
Can exist by themselves.
Cannot secure fulfillment of rescissible obligation.

48. Mr. A offered to sell his land to Mr. B for P300,000. Mr. B accepted the offer and paid Mr. A
the purchase price. Mr. A delivered the owner’s certificate of the Transfer certificate of Title
to the land. Mr. B wants to register the land in his name but the Register of Deeds asks Mr. B
for the Deed of Sale. What can Mr. B do ?
A.
B.
C.
D.

He may occupy the land as a buyer in good faith.
He cannot compel Mr. A to return the payment because the contract is unenforceable.
He may compel Mr. A to execute the Deed of Sale because the contract is valid.
He may sue Mr. A to return the purchase price under the legal principle that no one may
enrich himself at the expense of another.

49. Pacto de retro sale as distinguished from mortgage:
A.
B.
C.
D.

There is redemption by payment principally of the debt.
There is no transfer of possession of the thing sold
There is no foreclosure unless it is declared as an equitable mortgage.
There is no transfer of ownership of the thing sold.

50. A is authorized by B to sell the latter’s books for P100 each. A sells 10 books to C on credit
but for a price of P120 each. After ratifying the sale on credit, B can collect. After ratifying
the sale on credit, B can collect cash payment from C.
A. P1,000


B. P1,200
C. P1,080
D. P 900
which is the object of the sale.
II. Payment of price is essential to delivery of the thing sold.
A.
B.
C.
D.

Both statements are true.
Both statements are false
First statement is true, second statement is false.
First statement is false, second statement is true.

52. Three of the following are essential requisites of a contract of mortgage. Which one is not?
A.
B.
C.
D.

The person instituting the mortgage has the free disposal of his property.
The contract must be in writing.
The mortgagor is the absolute owner of the thing mortgaged.

The mortgage is constituted to secure the fulfillment of a principal obligation.

53. In real mortgage, the following rules are valid, except one:
A. A stipulation in the mortgage contract prohibiting the owner from alienating the
immovable mortgaged is valid.
B. The mortgage may alienate the mortgage credit or assign to a third person in whole or in
part.
C. Any stipulation allowing the mortgage creditor to appropriate the property
mortgaged is null and void.
D. If alienation of the mortgage credit is not registered, it is still valid between the parties.
54. A wrote a letter to B wherein A offered to sell his piece of land to B for P200,000. B
signified his desire to buy the land. In A’s letter, he gives B a period of two (2) months
within which to produce the P200,000. After 45 days, A told B that the price of the land is
now P250,000. Can B compel A to accept the P200,000 first offered by A and execute the
deed of sale?
A.
B.
C.
D.

Yes, there was actual meeting of the minds of the parties
No, for B did not signify his acceptance of A’s offer.
Yes, because A is already stopped by his signed letter
Yes, because the period of two months has not expired.

55. A and B are good friends. A sold and delivered his car to B. It was agreed and understood
that on the next Sunday A will name and fix the price of the car. Sunday came. A called B by
phone and stated and fixed the price at P150,000. Is the sale perfected?
A.
B.

C.
D.

Yes. The price was stated and fixed on the date agreed upon.
No. The price was left to the discretion of the seller.
No. at the time of the sale, the price is not fixed.
No. The price fixed by the seller was not accepted by the buyer.

56. In sale, this is actual delivery:
A.
B.
C.
D.

Execution and signing of the sales document.
When the goods sold are p0laced in the control and possession of the buyer.
Delivery by the seller to the buyer of the key where the goods are kept.
The buyer is already in actual possession of the goods.


57. This is a mode of extinguishing an agency:
A.
B.
C.
D.

Death of the principal, but the agency is for the interest of the principal and agent.
Partial accomplishment of the agency.
Upon withdrawal of the principal.
Insanity of the principal or agent.

58. D pledged his Singer Sewing Machine to C for P8,000. D was unable to pay the obligation
60 days after due date. C sold the machine at public auction for P6,000.
A.
B.
C.
D.

C cannot recover the deficiency of P2,000 even if there is stipulation that he can.
C can recover the deficiency of P2,000 even without stipulation.
C cannot recover the deficiency of P2,000
C can recover the deficiency of P2,000.

59. In a contract wherein a person binds himself to render special service to do something in
behalf of another with consent of the latter.
A.
B.
C.
D.

Contract of piece of work
Contract of service
Contract of agency
Contract of exchange

60. Which of the following obligations of the vendor cannot be waived:
A.
B.
C.
D.

To allow the buyer to examine the goods sold.
To transfer ownership to the buyer.
To pay the expenses of the deed of sale.
To warrant the thing sold.

61. A appoints B as his agent to sell his land, which of the following is valid:
A. The authority of B is in writing and the sale of the land in favor of C is oral.
B. The authority of B from A is by way of letter and B sells the land to C in writing.
C. The authority of B is oral and B sells the land to C for P50,000 in a written contract of
sale.
D. When goods are delivered to an agent to be sold by him and the agent is not liable to the
manufacturer of the goods.
62. A stipulation whereby the pledge or mortgagee automatically becomes the owner of the thing
pledged or mortgaged:
A.
B.
C.
D.

Pactum commisorio
Consolidation of ownership
Conventional redemption
Consignation

63. Which of the following statements is true and correct:
A. Pledge and mortgage are accessory contracts because they cannot exist by
themselves.
B. In both pledge and mortgage, the creditor is entitled to deficiency judgment.
C. Where an obligation is secured by a pledge or mortgage and it is not paid when due the

pledge or mortgagee may dispose of the thing pledged or mortgaged if the��res perit domino” or the thing perishes with the owner.
48. 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 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
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 1 /2 of the interest sold by A to B
49. Using the preceding number, suppose, instead of selling his interest to B, A sold it to D, who
can exercise the right of redemption?
A.
B.
C.
D.

Both B and C
B but not C
C but not B
A, B and C

50. Which of the following cannot be the object of a contract of sale?
A.
B.
C.
D.

Sale of credit
Young animal not yet conceived at the time of perfection
Land which the seller expects to buy
Future inheritance

51. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over
the price offered at Z’s store in Cainta Market. The price is
A. Not certain because the price at Cainta 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 land
D. Not certain so court may fix the price
52. X sold his motor vehicle to V who bought it for P200,000. It turned out however, that X has
2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is
correct?
A.
B.
C.
D.

There is no contract of sale between X and V
The parties may ask for interpretation or reformation
The parties can ask for annulment of the contract
V may choose between the Toyota or Lancer

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

The contract is perfected because of the acceptance by V
There is no contract yet between X and V because V made a counter offer
The contract is perfected under the terms of X
There is no contract yet unless v gives earnest money

54. X owns 50 mango trees bearing fruits, ready for harvest. She told all the fruits of all the trees
to V who paid P100,000. X told V that he can harvest her fruits anytime he likes and
pointing at the mango trees. For legal purposes, X has fulfilled her obligation to deliver the
mango fruits to V by
A.
B.
C.
D.

Traditio longa manu
Traditio brevi manu
Traditio constitutum possessorium
Execution of a public instrument

55. 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.
B.
C.
D.

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

X cannot recover the deficiency except if there is stipulation to that effect
X cannot recover the deficiency even if there is stipulation to the contrary

56. Ownership of the thing sold is
A.
B.
C.
D.

Retained by the seller in “sale or return
Transferred to the buyer upon constructive or actual delivery of the thing sold
Acquired by the buyer upon perfection of the contract
Transferred to the buyer upon acceptance of the price

57. X sold his horse to Y for P40,000. 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.
B.
C.
D.

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


58. A contract of sale is in the stage of conception when
A.

B.
C.
D.

There is meeting of the minds
Negotiations are in progress
The parties come to an agreement
The contract is perfect

59. A seller sold to a buyer a piece of jewelry at a price of P25,000. The contract provides that
the buyer will pay the seller cash, P20,000 and for the balance, the buyer will give the seller
a micro oven worth P5,000. What is the nature of the contract?
A.
B.
C.
D.

Sale
Partly sale partly barter
Barter
Commodatum

60. X, the guardian of V, sold V’s house and lot worth P480,0000 for P430,000
A.
B.
C.
D.

The contract can be rescinded because of inadequacy of price
The contract cannot be rescinded because there is no fraud, mistake or undue influence

The contract cannot be rescinded because all the elements of a contract are present
The contract can be rescinded by X.

61. 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.
B.
C.
D.

X can collect the rental fees for three months which are in arrears.
X can collect the rental fees for the unexpired 12 months of the lease contract.
When X took possession of the generator, he has no further action against V
X in terminating the lease and repossessing the generator is obliged to refund the 9
months rental fee, paid by V even if there is a stipulation to the contrary.

62. X sold his car to Z for P60,000. No date was fixed for the performance of the obligation of
the seller and the buyer. The obligation of X is
A.
B.
C.
D.

To deliver the car immediately because the sale is a perfected contract
To deliver the car only after Z writes to X demanding the delivery of the car.
To deliver the car only after Z pays the P60,000
To rescind the contract because there is no time fixed for the delivery

63. I. 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.
II. The sale of a vain hope or expectancy is voidable.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

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


II. 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 a part of the consideration
exceeds the amount of the money or its equivalent.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

65. I. If the price is grossly inadequate, the sale is void.
II. Whenever 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.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

66. I. Earnest money and option money both apply to perfected sale.
II. In a contract of sale of personal property the price of which is payable in installment, the
vendor may cancel the sale should the vendee fail to pay.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

67. 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.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

68. 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.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

69. I. The husband and the wife cannot sell property to each other, as a rule.
II. The sale of a piece of land or interest therein when made thru an agent is void unless the
agent’s authority is in writing even if the sale itself is in s public instrument and has been
registered.

A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

70. 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.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

71. 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.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

72. 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.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

73. 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.
B.

C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

74. I. If two or more animals are sold together, whether for lump sum or for a separate price for
each of them, the redhibitory defect of one shall give rise to the redhibition of the others.
II. There is no warranty against hidden defects of animals sold at fairs or at public auctions
or of livestock sold as condemned.
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
75. I. The ownership in the thing shall not pass to the purchaser until he has fully paid the price.
II. If at the time the contract of sale is perfected, the thing which is the object of the contract
has been partially lost, the contract shall be without effect.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

76. I. Where the seller of goods has a voidable title thereto, but his title has not been avoided at
the time of the sale, the buyer acquires a good title to the goods.
II. If the vendee has renounced the right to warranty in case of eviction, and eviction should
take place, the vendor shall only pay the value which the thing sold had at the time of sale.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

77. I. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by
installment.
II. In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a
sale with a right to repurchase.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

78. I. The creditors of the vendor cannot make use of the right of redemption against the

vendee, until they have exhausted the property of the vendor.
II. Sale is a real contract because delivery is necessary to transfer ownership to the buyer.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false

CREDIT TRANSACTIONS (Cpar)
PLEDGE AND MORTGAGE
1.Which of the following statements is true?
A. Any stipulation in a contract of pledge authorizing the pledge to sell the thing pledged if
the pledgor cannot pay is void.


B. In mortgage, the mortgagee is entitled to the entire proceeds of the sale of the thing
mortgaged.
C. In mortgage and in pacto de retro sale, the title to the property which is the subject matter
of the contract is transferred to the other party.
D. Real estate mortgage is an accessory contract.
2. In real estate mortgage, the mortgagor can sell the property mortgaged
A.
B.
C.
D.

Only if with the oral consent of the mortgagee
Only if with the written consent of the mortgagee
If not prohibited to sell
Even without the consent of the mortgagee

3. Elements of contracts of pledge and mortgage, except
A.
B.
C.
D.

Pledgor or mortgagor must be the absolute owner
Pledgor or mortgagor must have the free disposal of the thing pledged.
The thing pledged or mortgaged may be appropriated if the debtor cannot pay.
Pledge and mortgage are accessory contracts

4.A borrowed P100,000 from B with A’s ring given to B by way of pledge. It was stipulated that
in case of non-payment on due date, the ring would belong to B. This for feature is
A.
B.
C.
D.

Caveat emptor
Dacion en pago
Pactum comisorio
Pacto de retro

5.A borrowed P100,000 from B, and as a security A pledged his ring to B. After the obligation
falls due, A goes to b relinquishing ownership of the ring in favor of B. This is

A.
B.
C.
D.

Caveat emptor
Dacion en pago
Pactum comisorio
Pacto de retro

6.A borrowed P30,000 from B, and as security, he pledged his ring, pair of earrings and
necklace. On due date, A paid P20,000. As a result,
A.
B.
C.
D.

A can demand the return of one (1) of the things pledged
A can demand the return of any two (2) of the things pledged
A can demand the return of the ring
A cannot demand the return of any of the things pledged

7. A mortgaged his residential land to B as a guarantee for the payment of P400,000 obligations
to B. They agreed that A should not sell the land while the obligation exists. Before the
maturity of the mortgage, C offered to buy the land from A. Which is correct?
A.
B.
C.
D.

A cannot sell the land to C because of the agreement not to sell
A can sell the land to C only if B consents in writing
A can sell the land to C despite the agreement not to sell
A cannot sell the land to C unless A pays the obligation

8. S, minor of 16 years old, sold her bracelet to B for P8,000. Later, B, needing money to pay
her daughter’s tuition fee, borrowed P15,000 from C and as a security, pledged the bracelet
to the latter. B failed to pay C resulting into auction sale of the bracelet in favor of D for
P10,000 only. Which of the following statements is correct?


A. The title of B over the bracelet is not valid, hence the pledge, as well as the sale of said
bracelet is likewise defective. The pledgor must be the owner of the thing pledged.
B. The deficiency of P5,000 may still be recovered by C from B if there is a stipulation to
this effect.
C. C can no longer recover the deficiency of P5,000 from B. The pledge together with
the sale is valid. The voidable title of B is valid because it is not yet annulled.
D. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet
from S, ownership will not pass to him (D).
9.

In the preceding number, assuming what was executed by B in favor of C was valid chattel
mortgage which was eventually foreclosed and the bracelet was old to D at the public
auction for the same amount, which statement is correct?
A. The title of B over the bracelet is not valid, hence the chattel mortgage, as well as the sale
of said bracelet is likewise defective. The mortgagor must be the owner of the thing
mortgaged.
B. The deficiency of P5,000 may still be recovered by C from B
C. C can no longer recover the deficiency of P5,000 from B as the mortgage, together with
the foreclosure sale, was valid. The title of B was still valid.

D. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet,
ownership will not pass to him (D).

10. S sold to b a specific car for P200,000 payable in four equal installments. S delivered the car
to B but required B to mortgage it back to S to answer for the unpaid installments. B paid the
1st and 2nd installments but he failed to pay the balance. S foreclosed the mortgaged property
and sold it at public auction for P80,000. As a result,
A.
B.
C.
D.

S can recover from B the balance of P20,000
S can recover from B the balance of P20,000 if there is stipulation to that effect.
S cannot recover the deficiency any more even if there is stipulation to that effect
S cannot recover the deficiency except if there is stipulation.
PLEDGE

11. I. The creditor cannot appropriate the things given by way of pledge or mortgage, or
dispose of them, except if there is a stipulation to the contrary.
II. The indivisibility of a pledge or mortgage is affected by the fact that the debtors are
solidarily liable.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.

Both statements are false.

12. I. A pledge or mortgage is indivisible, except if the debt may be divided among the
successors in interest of the debtor or of the creditor.
II. In case of pledge of animals, their offspring shall pertain to the pledge of the animals.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.


13. I. The creditor can use the thing pledged even without the authority of the pledgor.
II. If through the negligence or willful act of the pledge, the thing pledge is in danger of
being lost or impaired, the pledge may cause the same to be sold at a public auction.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

14. I. If the thing pledged is returned by the pledge to the pledgor or owner, the pledged is

extinguished, except if there is stipulation to the contrary.
II. If subsequent to the perfection of the pledge, the thing is in the possession of the pledgor
or owner there is a conclusive presumption that the same has been returned by the pledge.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

15. I. A statement in writing by the pledge that he renounces or abandons the pledge is
sufficient to extinguish the pledge only if accepted by the pledgor or owner and the thing
pledged is returned.
II. At the public auction, the pledge may also bid and his ofer shall be valid even if he is the
only bidder.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

16. I. The sale of the thing pledged shall extinguish the principal obligation provided the
proceeds of the sale are equal to the amount of the principal obligation.

II. If the price of the sale is more than the amount of the obligation, the debtor shall be
entitled to the excess, unless it is otherwise agreed.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

17. I. If the price of the sale is less than the amount of the obligation the creditor shall not be
entitled to recover the deficiency except if there is a stipulation to the contrary.
II. If two or more things are pledged, the pledgor may choose which he will cause to be sold,
unless there is a stipulation to the contrary.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.


18. I. A pledge shall not take effect against third person if a description of the thing pledged and
the date of the pledge do not appear in a public instrument.
II. If after the auction sale, the thing pledged is not sold, the pledge can appropriate the thing

pledged.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

19. I. Z pledged his ring to B for P20,000. Z failed to pay his obligation on time. B sold the ring
at a public auction for P16,000. B cannot recover P4,000 from Z even if there is
stipulation.
II. Using the same facts, if the proceeds of sale is P24,000, Z can recover the excess of
P4,000 if stipulated.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

20. I. In sale at public auction, the pledgor or owner may be abider and shall have a better right
if he should offer the same terms as the highest bidder.
II. Pledge is a real contract.
A.

B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.
MORTGAGE

21. I. A stipulation prohibiting the owner from alienating the immovable mortgaged shall be
void.
II. The equity of redemption refers to the right of the mortgagor to redeem the mortgaged
property within a certain period of time after it was sold to third person.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

22. I. The right of redemption refers to the right of the mortgagor to redeem the mortgaged
property after his default in payment but before the sale.
II. The registration in the Registry of Property is necessary for the validity of a contract of
real estate mortgage.
A.
B.

C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.


23. I. Except in case of sale of personal property in installments, if the proceeds of the sale is
less than the principal obligation, the creditor-mortgagee can recover the deficiency.
II. A borrowed P100,000 from B payable in 10 equal monthly installments. To secure
payment of the loan, A executed chattel mortgage on his Mercedes Benz car. If A
violates the condition of the mortgage, and the car was foreclosed and sold at a public
auction but the proceeds is less than the collectible amount, B cannot recover the
deficiency.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

24. I. In real estate mortgage the mortgagor can sell the property mortgage even without the
consent of the mortgagee.
II. In chattel mortgage, the mortgagor cannot sell the thing mortgage even with the written
consent of the mortgagee appearing at the back of the mortgage.

A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

25. I. Chattel mortgage like pledge is a real contract.
II. In chattel mortgage like pledge the possession of the thing mortgaged is vested in the
creditor.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.
LOAN

26. D deposits his momey by way of a savings account with C Bank. The contract between D
and C is
A.
B.
C.
D.

Deposit
Agency
Commodatum
Mutuum

27. I. In mutuum or loan, one of the parties delivers to another something not consumable so
that the latter may use the same for a certain time and return it.
II.Mutuun is essentially gratuitous.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.


28. I. In commodatum one of the parties delivers money or consumable thing upon the
condition that the same amount of the same kind and quality shall be paid.
II.In commodatum and mutuum ownership of the thing loan is transferred to the borrower.
A.
B.
C.
D.

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

Both statements are true.
Both statements are false.

29. I. Commodatum and mutuum involve real and personal property.
II. The bailee in commodatum acquires the use of the thing loaned and its fruits.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

30. I. The bailee in commodatum can lend or lease the object of the contract to a third person.
II. When there are two or more bailees to whom a thing is loaned in the same contract, they
are liable jointly.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

31. I. A contract whereby one person transfers the ownership of non-fungible things to another
with the obligation on the part of the latter to give things of the same kind, quantity and

quality shall be considered a loan.
II. Precarium is a kind of mutuum where the bailor may demand the thing loaned at will.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.
DEPOSIT

32. I. An agreement to constitute a deposit is binding and is perfected from the moment there is
meeting of minds.
II. Movable and immovable things may be the object of judicial deposit.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.


33. I. A contract of deposit must be in writing.
II. The depositary can make use of the things deposited even without the express permission
of the depositor.

A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

34. I. Fixed, savings, and current deposits of money in banks and similar institutions shall be
governed by the provisions concerning simple loan.
II. The depositary can demand that the depositor prove his ownership of the thing deposited.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

35. I. Unless there is a stipulation to the contrary, the depositary cannot deposit the thing with a
third person.
II. When the depositary has permission to use the thing deposited, the contract loses the
concept of a deposit and becomes a loan or commodatum even when safekeeping is still
the principal purpose of the contract.
A.
B.

C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.

36. I. The thing deposited shall be returned with all its products, accessories and accessions.
II. A contract of deposit is perfected from the moment there is meeting of minds.
A.
B.
C.
D.

First statement is true, second statement is false.
First statement is false, second statement is true.
Both statements are true.
Both statements are false.