Credit Transact

CREDIT TRANSACTION
1. In a sale, this is actual delivery.
A. Execution and signing of the sale document.

B. When the goods sold are placed in the control and possession of the buyer.
C. Delivery by the seller to the buyer of the key where the goods sold are kept.
D. The buyer is already in actual possession of the goods.
2. Three (3) of the following are option money. Which is the earnest money?
A. Given when contract of sale is perfected.

B. Given when there is no contract of sale.
C. Given to bid the offer or in a unilateral promise to sell or to buy.
D. Given as a separate consideration from purchase price.
3. The buyer of a thing has the right to the fruits of the thing:
A. From the time the thing bought is delivered

B. From the time the sale is perfected
C. From the time the obligation to deliver the thing bought arises.
D. From the time the fruits are delivered.
4. Bonds which are not secured by any specific mortgage lien of pledge or corporate
property but by the general corporation are:
A. Guaranteed bonds
B. Debenture bonds
C. Income bonds
D. Redeemable bonds
5. 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.
6. 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.
7. 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.
8. A wrote a letter to B where in 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. Yes, because there was actual meeting of the minds of A’s offer
B. No, for B did not signify his acceptance of A’s offer
C. Yes, because A is already estoppels by his signed letter
D. Yes, because the period of two (2) months has not expired
9. 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. Yes, because A already signed his offer

B. No, For B never signified his acceptance of A’s offer.
C. Yes, because there was actual meeting of minds of the parties
D. Answer not any of the above.
10. Unless there is stipulation to the contrary the expenses for the execution or registration of
the
sale shall be borne by:
A. The Vendee
B. The Vendor
C. The Vendee and Vendor
D. The agent or broker
11. 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. By tradition symbolica
B. By traditio longa manu
C. By traditio brevoi manu
D. Answer not given
12. Which of the following may not be the object of sale?
A. Things having potential existence

B. The sale of a vain hope or expectancy
C. Future goods
D. Answer not given.
13. 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. C can recover the deficiency of P500 from B.

B. C can recover the deficiency of P500 even without stipulation.
C. C cannot recover the deficiency of P500 unless there is stipulation.
D. C cannot recover the deficiency of P500 even if there is stipulation.
14. 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. P200,000
B. P190,000
C. P250,000
D. P240,000
15. 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. No, under “Caveat Emptor” let the buyer beware.

B. Yes, because this is contract involving property belonging to the principal
C. No, because, May acted in her own name not of the principal.
D. No, because the contract of sale is already perfected.
16. In distinguishing Earnest Money from Option money, earnest Money is:
A. Given when there is no contract of sale,

B. Given only when there is perfected contract of sale.
C. Given to bind the offer or in a unilateral promise to sell or buy
D. Given as a separate consideration from the purchase price.
17. 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. Yes, because Mr. AB is already stopped by his written offer.

B. Yes, because the 60 days offer has not yet expired
C. No, because Mr. CD has not accepted the offer of Mr AB.
D. Yes, there was meeting of the minds
18. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the time:
A. The obligation to deliver the thing sold arises

B. The sale is perfected
C. The thing sold is delivered
D. The fruit of the thing sold is delivered.
19. This is a mode to extinguish an agency:
A. Death of the principal, but the agency is for the interest of the principal and agent.
B. Partial accomplishment of the agency.
C. Upon withdrawal of the principal.
D. Insanity of principal or agent.
20. 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. C cannot recover the deficiency of P2,000 even if there is stipulation that he can.
B. C can recover the deficiency of P2,000 even without stipulation.
C. C cannot recover the deficiency of P2,000
D. C can recover the deficiency of P2,000.
21. The distinction between a chattel mortgage and a pledge is that in chattel mortgage:
A. The delivery of the personal property is necessary

B. The registration of the property in the Registry of Property is not necessary
C. The excess over the amount due after foreclosure, goes to the debtor
22. Sale is distinguished from dation in payment in that in sale
A. There is a pre-existing obligation or credit

B. The cause is the price
C. It is a mode of extinguishing an obligation in the form of payment.
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. Contract for a piece of work.

B. Contract subject to a resolutory condition
C. A contract of sale
D. 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.
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
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. An actual agency
B. An implied agency
C. A general agency
D. 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. P4,500 (P5,000 less P500 commission)
B. P5,000 (the price without commission)
C. P5,400 (P6,000 less P600)
D. 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. Void
B. Voidable
C. Valid
D. 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. X borrowed money from Y and gave a piece of land as security by way of
mortgage. It was agreed between the parties that upon nonpayment of the loan,
the land would already belong to Y. If X failed to pay the debt, would Y now
become the owner of the land?
a. Y would become the owner because it was agreed upon by them based on the principle of
autonomy of contracts.
b. Y would not become the owner because the agreement that he would become the
owner upon default of X is against the law.
c. Y would now become the owner but with right of redemption by X.
d. Y would not become the owner if X annuls the voidable agreement.
32. Not an essential requisite of real estate mortgage:
a. Mortgagee should have free disposal of the property mortgaged, and in the absence
thereof, he should be legally authorized for the purpose.
b. Subject matter of a contract must be immovable property or alienable real rights upon
immovables.
c. Mortgagor is the absolute owner of the property mortgaged.
d. Constituted to secure the performance of the principal obligation.
33. A contract by virtue of which personal property is recorded in the Chattel

Mortgage Register as a security for the performance of an obligation.
a. Pledge
b. Real Mortgage
c. Antichresis
d. Chattel Mortgage
34. Chattel is distinguished from pledge.
a. The excess over the amount due after foreclosure goes to the debtor.
b. The sale of the object in an auction distinguishes the obligation.
c. The delivery of the personal property is necessity.
d. The registration of the property in the Registry of Property is necessary.
35. Which of the following is not correct?
a. If the thing pledged will be returned by the pledgee, the contract of pledge is extinguished.
b. Any stipulation allowing the pledgee or mortgagee to appropriate the thing pledged or
mortgaged is void.
c. In case the creditor foreclosed the chattel mortgage, he cannot recover any deficiency
in case the proceeds of the foreclosure sale are less than the unpaid obligation.
d. A public document containing a clear and complete description of the property mortgaged
must be registered in the Chattel Mortgage Register, otherwise, the mortgage is not void.
36. A stipulation whereby the pledgee or mortgagee automatically becomes the owner
of the thing pledged or mortgaged.
a. Pactum commissorium
b. Consolidation of ownership
c. Conventional redemption
d. Consignation
37. 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
pledgee or mortgagee may dispose of the thing pledged or mortgaged if there is an agreement
to that effect between the parties.
d. Unless otherwise agreed upon by the parties, the sale of the mortgaged property
extinguishes in full the obligation of the mortgagor to the mortgagee.
38. The price stipulated by the parties to a mortgage contract below which the
property shall not be sold at public auction.
a. Market price
b. Current price
c. "Tipo" or Upset price
d. Selling price
39. The written abandonment of the pledge produces which the of the following
effects?
a. The principal obligation is extinguished.

b. The pledge remains unless the thing pledged is returned.
c. The pledge remains unless the debtor/pledgor has accepted abandonment in writing.
d. The pledgee becomes a depositary until he gives back the possession of the thing
pledged to the debtor/pledgor.
40. A sworn statement attesting to the fact that the chattel mortgage is made for the
purpose of securing the obligation specified in the conditions thereof, and for no
other purpose, and that the obligation is just and valid, and one not entered into
for the purpose of fraud.
a. Affidavit of good moral character

b. Affidavit of merit
c. Affidavit of good faith
d. Affidavit of trust
41. 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
42. A characteristic of the Contract of Sale which involves exchange of value, it is
A. Commutative
B. Nominate
C. Bilateral
D. Consensual
43. The leviable properties of the debtor are transferred to the creditors to be sold and from
the proceeds, the creditor are paid;
A. Pledge
B. Cession
C. Dacion en pago
D. Chattel mortgage
44. The following are requisites of Pledge except:
A. The disposal of the pledge

B. The absolute ownership of the property pledged
C. The thing pledge may be placed in the possession of a third person
D. To bind a third person, it must be recorded in the office of the Register of Deeds
45. If redemption is made, which of the following will not be paid by the seller to the buyer
A. Price paid by the buyer

B. Expenses in the execution of the sales contract paid by the buyer
C. All necessary expenses on the thing sold and to be redeemed
D. Interest of the price paid by the buyer
46. Ownership of the thing sold is transferred / acquired / retained:
A. Retained by the seller in “sale of return”

B. Transferred to the buyer upon constructive or actual delivery of the thing sold
C. Acquired by the buyer upon
D. Transferred to the buyer upon acceptance of the price.
47. 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. P300,000
B. P320,000
C. P285,000
D. P305,000
48. 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. A cannot sell the land to Mr. C because of the agreement not to sell
B. A can sell the land to Mr. C only if B consents in writing
C. A can sell the land to Mr. C despite the agreement not to sell (?)
D. A cannot sell the land to Mr. C unless A pays the obligation
49. Mr. A. Abad signed a letter addressed and delivered to Mr. B. Baje. The terms of the
letter are:
1. An offer to sell a 500 sq.m. lot for P300,000

2. An option time up to October 31, 2010 for Mr. Baje to raise the P300,000
3. Upon payment of the P300,000, Mr. Abad will execute and sign a Deed of Sale
4. 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. No, Mr.B. Baje did not accept the offer of Mr. A. Abad
B. Yes, Mr. A. Abad is already stopped by his sighing the letter and offer.
C. Yes, there was actual meeting of the minds.
D. Yes, the contract is perfected
50. 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. Sale
B. Partly sale and partly barter
C. Barter
D. Commodatum
51. An assignor of credit warrants:
A. Solvency of the debtor

B. Existence and legality of credit
C. Collectibility
D. Assurance of payment
52. 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. Both examples are true

B. Both examples are false
C. First example is true, but the second example is false
D. First example is false but the second example is true
53. Which of the following is not a characteristic of Sale?
A. Bilateral
B. Gratuitous
C. Consensual
D. Nominate
54. The following are the alternative remedies, except one available to the buyer in case of
breach of warranty by the seller:
A. Keep the goods and ask for damages

B. Refuse to accept the goods and ask for damages
C. Rescind the sale and retain the goods
D. Keep the goods and set up against the seller by way of recoupment in price.
55. 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.
56. 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. P10,000 from each of X, Y and Z.

B. P30,000 from X
C. P30,000 from Y and Z
D. P30,000 from either X, Y and Z
57. Pledge and Mortgage are accessory contracts because they:
A. Are meant to secure the fulfillment of a principal obligation.

B. Cannot exist if the principal obligation is void.
C. Can exist by themselves.
D. Cannot secure fulfillment of rescissible obligation.
58. 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. He may occupy the land as a buyer in good faith.

B. He cannot compel Mr. A to return the payment because the contract is unenforceable.
C. He may compel Mr. A to execute the Deed of Sale because the contract is valid.
D. 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.
59. Pacto de retro sale as distinguished from mortgage:
A. There is redemption by payment principally of the debt.

B. There is no transfer of possession of the thing sold
C. There is no foreclosure unless it is declared as an equitable mortgage.
D. There is no transfer of ownership of the thing sold.
60. 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
61. Which of the following obligations of the vendor cannot be waived:
A. To allow the buyer to examine the goods sold.

B. To transfer ownership to the buyer.
C. To pay the expenses of the deed of sale.
D. To warrant the thing sold.
62. 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. Contract of piece of work

B. Contract of service
C. Contract of agency
D. Contract of exchange
63. 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. C cannot recover the deficiency of P2,000 even if there is stipulation that he can.
B. C can recover the deficiency of P2,000 even without stipulation.
C. C cannot recover the deficiency of P2,000
D. C can recover the deficiency of P2,000.
64. This is a mode of extinguishing an agency:
A. Death of the principal, but the agency is for the interest of the principal and agent.
B. Partial accomplishment of the agency.
C. Upon withdrawal of the principal.
D. Insanity of the principal or agent.
65. In sale, this is actual delivery:
A. Execution and signing of the sales document.

B. When the goods sold are p0laced in the control and possession of the buyer.
C. Delivery by the seller to the buyer of the key where the goods are kept.
D. The buyer is already in actual possession of the goods.
66. 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. Yes. The price was stated and fixed on the date agreed upon.
B. No. The price was left to the discretion of the seller.
C. No. at the time of the sale, the price is not fixed.
D. No. The price fixed by the seller was not accepted by the buyer.
67. 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. Yes, there was actual meeting of the minds of the parties

B. No, for B did not signify his acceptance of A’s offer.
C. Yes, because A is already stopped by his signed letter
D. Yes, because the period of two months has not expired.
68. 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.
69. Three of the following are essential requisites of a contract of mortgage. Which one is
not?
A. The person instituting the mortgage has the free disposal of his property.
B. The contract must be in writing.
C. The mortgagor is the absolute owner of the thing mortgaged.
D. The mortgage is constituted to secure the fulfillment of a principal obligation.
70. I. which is the object of the sale.
II. Payment of price is essential to delivery of the thing sold.
A. Both statements are true.

B. Both statements are false
C. First statement is true, second statement is false.
D. First statement is false, second statement is true.
71. 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.
72. A stipulation whereby the pledge or mortgagee automatically becomes the owner of the
thing pledged or mortgaged:
A. Pactum commisorio
B. Consolidation of ownership
C. Conventional redemption
D. Consignation
73. 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 there is an
agreement to that effect between the parties.
D. Unless otherwise agreed upon by the parties, the sale of the mortgage property
extinguishes in full the obligation of the mortgagor to the mortgagee.
74. I. A sales contract is a real contract because no ownership is transferred unless there is
delivery.
II. A sales contract is a real contract because the seller suffers the risk of loss until the
object of the sale has been delivered.
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. A sells to B for P25,000 all the mango fruits to be harvested from the mango orchard
which
A plans to buy.
I. The sale is valid because the mango fruits have potential existence.
II. The sale is valid because the object of the contract need not exist at the time of the
contract.

76. A who plans to buy a piece of land from B, enters into contract of sale respecting the
same
land with X for the price of P100,000. The contract is in writing.
I. The sale is not valid because a seller cannot sell that which he does not own.
II. The sale is not valid because a public document is required.

77. Husband owes C. Subsequently, husband sold his car to his wife. If husband cannot pay
C
on due date:
I. C can question the sale because the sale prejudices C, a creditor.
II. C can question the sale because husband is relatively disqualified to enter into this kind of
sale.

78. A sells his TV set to B for P50,000 on sale or return. Subsequently, the TV set is lost by
fortuitous event.
I. The risk of loss pertains to the seller because the buyer is not at fault.
II. The risk of loss pertains to the seller until the buyer signifies to the seller that he accepts
the TV set.

79. A offered to sell for P500,000 his house and lot to B who was interested in buying the
same.
A gave B thirty days to raise the amount and as soon as B is ready they will sign the deed of
sale. On the 25th day, A notified B that he is no longer willing to sell the property unless the
price is increased to P550,000.
I. B can compel a to accept the P500,000 first offered because there exists a bilateral offer to
sell and to buy a definite property for a definite price.
II. B cannot compel A to accept the P500,000 because this is merely an unaccepted unilateral
promise to sell.

80. I. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.
II. An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promissor if the promise is supported by a consideration distinct from
the price.

81. A specific boat was sold to B for the price of P1 million on credit. Shortly after perfection
of
the sale but before delivery, the boat was destroyed by a fortuitous event.
I. The seller suffers the loss because at time of loss he was still the owner.
II. The buyer suffers the loss because if it were not for the fortuitous event ownership would
have transferred to him.

82. I.Should fungible things be sold for a price independently and for a single price, the risk
of
loss before perfection pertains always to the seller.
II. Should fungible things be sold for a price fixed according to weight, number or measure
the risk of loss pertains to the buyer after perfection even before delivery.

83. Maria purchased a quantity of bed sheets which were wrapped up in bales. The sale was
done
in the warehouse of Seller. Some bed sheets were pulled out from the bales displayed and
fount to be all right. Maria then purchased 100 bales and paid the price. After delivery, Maria
discovered that some of the bed sheets contain holes.
I. Maria can return the bed sheets and recover the money she paid.
II. Maria cannot return the bed sheets and recover the money she paid because the principle
“caviat emptor” applies.

84. A entered into a contract of sale of his car to B for a price of P50,000. The terms are:
Upon
payment of P20,000 A shall deliver the car and the balance to be paid after one month. B also
executed a chattel mortgage on the car to secure the payment of the balance. B defaulted in
the payment of the balance, therefore A foreclosed the mortgage. The proceeds realized in
the foreclosure sale were not sufficient to pay the entire balance.
I. A can still recover the deficiency.

II. A cannot recover the deficiency because the law prohibits him from doing so.

85. S owns 10 sacks of rice for sale in his store. B came into the store and buys the 10 sacks
at
the price of P1,200 per sack and promised S to pay as soon he is paid for the bags of cement
which are then being unloaded from a truck parked opposite the store. Upon request of B, S
ordered the loading of the sacks of rice on the truck, continuously watching the loading.
After the sacks of rice were loaded on the truck, B did not appear to pay the price. So S again
ordered the unloading of the sacks of rice. At this moment, the driver of the truck objected to
the unloading of the sacks of rice claiming the he purchased the sacks of rice from B and
therefore acquired ownership thereof.
I. S cannot order the unloading because B acquired ownership when the sacks or rice were
loaded on the truck.
II. S cannot order the unloading because ownership was transferred to the driver by B who
had ownership of the sacks of rice.

86. I. If seller has ownership he can always transfer ownership.

II. If seller has ownership but no possession he cannot transfer ownership by constructive
delivery.

87. I. A contract of “sale or return” is a sale with a resolutory condition.

II. A contract of “sale on trial or approval” is a sale with a suspensive condition.

88. I. If the bill of lading covering the goods sold is by its terms the goods described therein
are
deliverable to the order of the seller, and retained by the seller, the seller has reserved his
ownership over the goods.
II. If the bill of lading is by its terms the goods described therein are deliverable to the order
of the buyer and retained by the seller, the seller ha reserved his right of possession of the
goods as against the buyer.

89. B bought a pair of shoes from shoe store and repair shop. It was later discovered that the
pair
of shoes bought by B belonged to a customer who left it there for repair.
I. B acquired ownership provided he acted in good faith.
II. B did not acquire ownership because a seller cannot transfer ownership if he himself has
no ownership.

90. An unpaid seller loses his possessory lien after he has delivered the goods to a carrier for
the purpose of transmission to the buyer without reserving the ownership in the goods or
the right to the possession thereof.
II. The unpaid seller who loses his possessory lien does not lose his lien for the payment of
the purchase price.

D. Both statements are false.
91. I. Once the goods have been accepted by the buyer, the seller is no longer responsible to
him for any breach of warranty.
II. Acceptance by the buyer does not as a general rule release the seller from liability for
breach of warranty.

D. Both statement are false.
92. A enters into a contract of sale with B respecting 2 immovables for P200,000, the
boundaries
are mentioned and the area is 20,000 sq. meters.
I. The seller shall suffer a proportionate reduction in price if the area delivered is less than
the area specified in the contract even though the boundaries were followed.
II. The seller shall also be entitled to a proportionate increase in price if the area exceeds the
number specified in the contract.

93. S sells his piece of land to B for P100,000. Consequently, another contract was entered
into
between the parties whereby B leases the land to S.
I. This contract shall be construed as an equitable mortgage.

II. This contract is a contract of sale with leaseback.

94. A sold his piece of land to B last November 10, 2009.
I. S shall repurchase the land within 4 years from date of sale.

II. S shall have within 10 years from date of sale to repurchase the land so long as the period
of repurchase shall not exceed 10 years.

95. A, B and C are co-owners of rural land with an area of 9 hectares. A sold his undivided
interest to X who does not own rural land.
I. B and C cannot legally redeem because the sale was an absolute sale.
II. B and C as co-owners can legally redeem for the purpose of reducing the number of co-
ownership.

96. I. Conventional redemption is a privilege.

II. Legal redemption is a right granted by law.

97. A sold his piece of land to B with a right of repurchase when A has sold his car.
I. A can repurchase within 4 years from date of sale.

II. A can repurchase within 4 years from date of sale of his car.

98. P authorized his agent to direct and administer his commercial business, among others “to
collect sums of money and exact their payment by legal means.”
I. A can bring a court action for collection provided he brings it in the principal’s name
under his agency.
II. A needs a special power of attorney to bring a court action because the agency of A
pertains only to acts of administration.

99. I. A special power to mortgage includes the special power to constitute a second
mortgage.
II. A special power to mortgage does not include the power to sell.

100. Agent was authorized by Principal to sell the latter’s TV set for P10,000 on the
installment plan. A was able to sell it for P10,000 cash basis.
I. The sale is not binding upon the principal unless the principal ratifies it.
II. The sale is not binding upon the principal because the agency was performed in a manner
not included in the agency.


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1. In a sale, this is actual delivery.

A. Execution and signing of the sale document.

A. Given when contract of sale is perfected.

A. From the time the thing bought is delivered

A. Mr. Tan can compel Mr. Sy to execute a Deed of Sale

8. A wrote a letter to B where in A offered to sell a piece of land to B for P200,000. B

A. Yes, because A already signed his offer

12. Which of the following may not be the object of sale?

A. Things having potential existence

A. C can recover the deficiency of P500 from B.

A. No, under “Caveat Emptor” let the buyer beware.

A. Given when there is no contract of sale,

A. Yes, because Mr. AB is already stopped by his written offer.

A. The obligation to deliver the thing sold arises

A. The delivery of the personal property is necessary

22. Sale is distinguished from dation in payment in that in sale

A. There is a pre-existing obligation or credit

A. Contract for a piece of work.

A. Traditio brevi manu

A. Institute an action for the annulment of the sale to Carla

33. A contract by virtue of which personal property is recorded in the Chattel

34. Chattel is distinguished from pledge.

35. Which of the following is not correct?

a. The principal obligation is extinguished.

a. Affidavit of good moral character

44. The following are requisites of Pledge except:

A. The disposal of the pledge

A. Price paid by the buyer

46. Ownership of the thing sold is transferred / acquired / retained:

A. Retained by the seller in “sale of return”

1. An offer to sell a 500 sq.m. lot for P300,000

51. An assignor of credit warrants:

A. Solvency of the debtor

A. Both examples are true

53. Which of the following is not a characteristic of Sale?

A. Keep the goods and ask for damages

55. Which of the following statements is true and correct?

A. P10,000 from each of X, Y and Z.

57. Pledge and Mortgage are accessory contracts because they:

A. Are meant to secure the fulfillment of a principal obligation.

A. He may occupy the land as a buyer in good faith.

59. Pacto de retro sale as distinguished from mortgage:

A. There is redemption by payment principally of the debt.

61. Which of the following obligations of the vendor cannot be waived:

A. To allow the buyer to examine the goods sold.

A. Contract of piece of work

64. This is a mode of extinguishing an agency:

65. In sale, this is actual delivery:

A. Execution and signing of the sales document.

A. Yes, there was actual meeting of the minds of the parties

70. I. which is the object of the sale.

II. Payment of price is essential to delivery of the thing sold.

A. Both statements are true.

73. Which of the following statements is true and correct:

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

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

II. The sale is not valid because a public document is required.

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

I. C can question the sale because the sale prejudices C, a creditor.

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

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

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