CONTRACT OF SALE

1.S stole the ring of O and sold the same ring to B for P500 who does not have any knowledge that the ring was stolen.

Which of the following statements is correct? *

a. B acquires title to the ring if he is a purchaser in good faith.
c. O can recover the ring from B even if he will not reimburse B for P500.
d. B will acquire title to the ring if he will not be prosecuted
b. O cannot recover the ring from B if he will not reimburse B for P500.

2. In sale of real estate for a lump sum and not at the rate of a certain sum for a unit of measure of number, the vendor
is
bound to deliver all that it is included with the boundaries stated in the contract although there be greater or less area
or
number than that stated in the contract. What amount shall be paid by the vendee or buyer? *
a. The lump sum stipulated in the contract with increase in the price if the area is greater than that stated in the
contract.
b. The lump sum stipulated in the contract with decrease in the price if the area is less than that stated in the contract.
c. The lump sum stipulated in the contract with no increase or decrease in the price although there be greater or less
area or
number than that in the contract.
3. In the absence of stipulation to the contrary, who shall bear the expenses of delivery and incidental expenses to
putting

the goods into a deliverable state? *

b. Seller
c. Buyer
a. Buyer and Seller equally
d. Government
4. This is one of the remedies of the vendee in case of breach of warranty against hidden defects, of merchantability,
of
merchantable quality or witness for a particular purpose. It refers to the withdrawal from the contract or recession. *
a. Accion quanti minoris
c. Accion Paulina
b. Accion redhibitoria
d. Accion subrogatoria
5. Which of the following statements is correct concerning the right of unpaid seller? *
c. Both A and B
b. If, however, a negotiable document of title has been issued for goods, no seller's lien or right of stoppage in transitu
shall

defeat the right of any purchaser for value in good faith to whom such document has been negotiated, whether such

negotiation be prior or subsequent to the notification to the carrier, or other bailee who issued such document, of the
seller's
claim to a lien or right of stoppage in transitu.
a. The unpaid seller's right of lien or stoppage in transitu is not affected by any sale, or other disposition of the goods
which
the buyer may have made, unless the seller has assented thereto.
d. Neither A nor B

6. Manny, a Filipino, sold his private land to Ippo, a Japanese national. The contract of sale has already been executed.
Which of the following statements is correct?
c. Ownership of the land will transfer ti Ippon and the contracts can longer be avoidedsince the contract is already
executed.
d. Manny can still recover the land by Oling an action for declaration of nullity because the principle of paridelicto is
not
applicable in the case since it will frustrate the state policy to reserve the land to Filipinos.
b. The contract of sale is unenforceable because it is violative of constitutional provision against ownership of private
land
by foreigners.
a. The contract of sale is void because it is violative of Constitutional provision against ownership of private land by
foreigners. Therefore, Manny cannot ask for declaration of nullity because of principle of paridelicto.
7. The following are the requisites for right to resale to be available to an unpaid seller, except *
a. The buyer has defaulted in the payment of the purchase price.
b. The seller has no right of lien nor has stopped the goods in transitu.
d. The grounds must be those provided by law.
c. Title to the goods has passed on the buyer
8. When are the goods still in transit which will allow the unpaid seller to exercise his right to stoppage in transitu? I.
From
the time they are delivered to the carrier or other bailee for the purpose of transmission to the buyer, until the buyer or
his
agent, takes delivery of them from such carrier or the bailee. II. If the goods are rejected by the buyer, and the carrier
or
other bailee continues in possession of them, even if the seller has refused to receive them back.
a. I only
b. II only
c. Neither I nor II

d. Both I and II
9. It is not essential to the validity of resale that notice of an intention to resell the goods be given by the seller to the

original buyer. When shall the giving of notice of an infection to resell be relevant in the exercise by the unpaid seller
of
right to resell? *
a. When the goods are of perishable nature.
d. When the buyer has been in default for an unreasonable time.
c. When the seller has expressly reserved the right to resell the goods in case the buyer should make default.
b. When the buyer becomes insolvent

10. The following are the grounds for the exercise by the unpaid seller of his possessory lien or right to retain the
goods,
except
c. Where the goods have been sold on credit, but the credit term has expired.
b. Where the goods are perishable in nature.
d. Where the buyer is insolvent.
Option 5
a. Where the goods have been sold without any stipulation as to credit.
11.Where shall the reselling be made in case the unpaid seller exercises his right of resale? *
b. Private sale
c. Either public sale or private sale
d. Neither public sale nor private sale

a. Public sale
12. When the quantity delivered is more than that which the parties agreed upon. the following are the rights of the
buyer,
except *
d. Reject the whole of the goods if they are divisible.
b. Accept the whole of the goods delivered and pay for them at the contract rate.
a. Accept the goods agreed upon and reject the rest.
c. Reject the whole of the goods if they are indivisible.

13. The following are the exceptional instances wherein the ownership of goods is retained by the seller despite
delivery to
carrier or bailee for purpose of transmission to the buyer, except
d. When the seller draws on the buyer a bill of exchange for the price of the goods and transmits the bill of exchange
and

the bill of lading to the buyer to secure acceptance or payment of the bill of exchange, but the buyer dishonors such
bill of

exchange .
e. When the bill of lading is negotiated to a purchaser for value in good faith.
c. When by the terms of the bill of lading, the goods are to be delivered to the order of the buyer or his agent but the
bill of
lading is retained by the seller or his agent.
a. When there is stipulation that ownership is retained by the seller despite delivery to the carrier or bailee.

b. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent or to the order of
seller or
his agent.
14. In case the time for the delivery of goods is not stipulated, what is the time for its delivery?
d. Within reasonable time from the execution of the contract.
a. At the end of the month.
c. At the end of the day.
b. At the end of the year.
15. Using the same date in preceding number except the fact that the arrangement is a sale on trial or approval, should
B
pay the purchase price?
b. Yes even if B signifies his approval before the _____
d. Yes because B becomes the owner of the calculator upon delivery.

a. No even if the Ore is due to the fault of B.

c. No if B does not signify his approval before the Ore because B is not yet the owner.
16. Right of stoppage in transitu is exercised by obtaining actual possession of the goods or by giving notice of his
claim to
the carrier or other bailee in whose possession the goods are. The following are the effects of the exercises of right of
stoppage in transito, expect *
a. The goods are no longer in transit.
c. The carrier must deliver the goods to or according to the instructions of the seller.

b. The contract of carriage ceases and the carrier shall be liable as depositary or other bailee.
d. The carrier must deliver the goods to the buyer.
17. As a general rule, the seller shall deliver the thing sold upon perfection of contract of sale. The following are the
instances when a vendor is not bound to deliver the thing sold after the perfection of contract of sale, expect *
c. If the vendee/buyer loses the right to make use of the period such as becoming insolvent.

d. If a period has been fixed for the payment of the price

b. If no period for payment of the price has been fixed in the contract.

a. If the vendee/buyer has not paid him the price.

18. Using the same data in preceding number and suppose the ring found its way in a jewelry store and it was from
that
jewelry store that B bought the ring in good faith. Which of the following statements is true? *
d.O has better title over the ring as against b.
b. B does not acquire title over the ring because it was stolen.
a. O can recover the ring from B upon payment of purchase price.

c. B acquires title to the ring because the purchase is made from a merchant's store, fair or market.
19. The following are the grounds for the exercise of right of resale by the unpaid seller, except *
d. The buyer becomes insolvent.
c. The buyer has been in default for an unreasonable time.
b. The seller has expressly reserved the right to resell the goods in case the buyer should make default.
a. The goods are of perishable nature.
20. Using the same data in number 145, what is the remedy of the buyer if the actual area is less than by 1/10 or more
of that
stated in the contract? *
d. Ask for declaration of nullity of the contract of sale.
c. Either A or B.
b. Ask for rescission of the contract of sale.

a. Ask for proportionate reduction in the price.

21. Using the same data in preceding number but assuming B was able to purchase the stolen ring at a public sale in
good
faith for P 1,000. Which statements is correct? *
d. B will have better right than O in any instances.
c. B cannot obtain good title from the goods even if he is in good faith.
b. O can recover the ring from B but he must reimburse B for P 1,000.
a. O cannot recover the ring from B even he is willing to reimburse B for P 1,000

22. S sold his house and lot to B. A&er the sale, B leaseback the prope!y to S. What type to constructive delivery is
present?
b. Traditio longa manu
c. Traditio brevi manu
a. Traditio simbolica or clavium

d. Traditio constitutum possessorium

23. It refers to the right of the unpaid seller to resume possession of the goods at any time while they are in transit,
and he
will them become entitled to the goods as he would have had if he had never parted with the possession. This right is
available after the unpaid seller has parted with the possession of the goods and
the buyer is or become insolvent. *
d. Right to rescind the sale.
a. Possessory lien, or a lien on the goods or right to retain them while he is in
possession of them.

b. Right of stoppage in transitu.

c. Right of resale.
24. In sale on trial/approval, the ownership of the goods is transferred to the buyer under any of the following
instances,
except
a. When the buyer signiOes his approval or acceptance of the goods.
c. When the buyer does not signify his approval or acceptance of the goods but retains the goods without giving
notice of
rejection within the time Oxed in the contract or within reasonable time, and such time has expired.
b. When the buyer does an act adopting the transaction.
d. When the goods are delivered to the buyer.
25. S, a minor of 17 years, sold his watch for P1,500.00 to B, 30 years old. The guardian of S was not aware of the sale;

hence, no action for annulment has yet been filed. Subsequently, B sold the watch to T. who acquired it in good faith.
Which of the following statements is correct? *
b. T acquires good title to the watch even if he buys it in bad faith.
c. T acquires good title to the watch even if the voidable title of the seller has been avoided before the time of sale as
long
as T acquires the watch in good faith, for value and without notice of seller's defect of title.
a. T acquires no title to the watch because the seller's title is voidable.
d. T acquires good title to the watch even if the seller's title is voidable provided the same has not been avoided at the
time

of sale and T acquires the watch in good faith, for value and without notice of seller's defect of title.
26. When notice of stoppage in transitu is given by the seller to the carrier, or other bailee in possession of the goods,
he
must redeliver the goods to, or according to the directions of , the seller. Who shall pay for the expenses of the
delivery? *

c. Seller and buyer proportionately

b. Buyer
d. Carrier
a. Seller
27. Using the same data in number 145, what is the remedy of the buyer if the area is the same but a pa! of the
immovable is
not of the same quality specified in the contract and the interior value is more than 1/10 of the price agreed upon? *
b. Ask for rescission of the contract of sale.

d. Ask for declaration of nullity of the contract of sale.

c. Either A or B
a. Ask for proportionate reduction in the price.
28. Lebron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot of Lebron and
through connivance with a notary public, he was able to execute a notarized deed of sale through forging the
signature of
Lebron. With connivance with registry of Deeds, Kevin was able to transfer the title of the lot to his name.
A&erwards,
Kevin sold the said lot to Carmelo who acquired the said lot a&er inspecting the title and the vacant lot. Carmelo is a
purchaser in good faith and for value. Which of the following statements is correct? *
d. Lebron cannot recover the land from Carmelo because a forged document or deed of sale , in case of registered lot,
can
be a root of a valid title if the title is already in the hand of a purchaser for value and in good faith.

a. The contract of sale between Kevin and Carmelo is void because it is product of a previous void contact.
c. Lebron can recover the land from Carmelo provided he will reimburse him for the price Carmelo paid.
b. Lebron can recover the land from Carmelo because the title acquired by Carmelo is that of a thief even without
reimbursing Carmelo.
29. Intangible assets or incorpereal prope!y cannot be the subject of actual or physical delivery. The following are the
different modes of constructive delivery of incorporeal properly or intangible assets, except
d. Through pledging of the shares of stocks by the pledgor to the pledgee.
c. Through the use by the vendee of his rights with consent of the vendor such as when the seller authorizes the buyer
of
shares of stock to vote during the stockholder's meeting.
b. By placing the titles or tangible of ownership in the possession of the vendee such
as, delivering the stock certificate covering the shares of stock sold.
a. By constructive tradition such as execution of public document.

30. Using the same data in number 145, what is the remedy of the buyer if the actual area is more than that stated in
the

contract? I. Accept the area stated in the contract and reject the rest. II. Accept the whole are and pay for them at the
contract rate. *
a. I only
c. Either I or II
b. II only
d. Neither I nor II
31. This is one of the remedies of the vendee in case of breach of warranty against hidden defects, of merchantability,
of
merchantable quality or fitness for a partiicular purpose. It refers to demanding a proportionate reduction in the price.
b. Accion redhibitoria
a. Accion quanti minoris
d. Accion subrogatoria
c. Accion Paulina
32. What are the rights of the buyer when the quantity or quality of goods delivered is different from that which the
seller
contracted to sell? I. Reject the goods. II. Accept the goods and pay the contract rate of the delivered goods. *
a. only
c. Either I or II
d. Neither I nor II

b. II only
33. In sale or return, when is the ownership of the goods transferred to the buyer?
d. Upon return of the goods to the seller
b. Upon delivery of the goods.
c. Upon approval by the buyer.
a. Upon payment of purchase price.
34. When the goods are sold and delivered by a person who is not the owner thereof, what title is acquired by the
buyer as a

general rule? *
b. He acquires a perfectly valid title.
a. He acquires no better title that the seller had.
c. He acquires a voidable title.
d. He acquires a rescissible title.

35. When the seller delivers the goods agreed upon but are mixed with goods of different description, what are the
rights of

the buyer? I. Accept the goods agreed upon and reject the rest, if the sale is divisible. II. Reject the whole of the
goods, if
the sale is indivisible.
d. Either I nor II
c. Neither I nor II
a. I only
b. II only

36. The unpaid seller loses his right to possessory lien on the goods in the following cases or these are the instances
when
the unpaid seller can no longer exercise his right to retain the goods, except
b. When the seller delivers the goods to a carrier or other bailee for purpose of transmission to the buyer without
reserving
the ownership in the goods or the right to the possession thereof.
d. By waiver of the possessory lien.
a. When the seller obtains judgement or decree for the price of the foods.
c. When the buyer or his agent lawfully obtains possession of the goods.
37. The following are the rights of the unpaid seller,except
a. Possessory lien, or a lien on the goods or right to retain the goods while he is in possession of them.
d. Right to rescind the sale.
b. Right of stoppage in transitu.

c. Right of resale.
e. Right to declare the sale null and void.
38. S and B entered into a contract of sale of a specific car. S delivered the key of the car to B. What type of
constructive
delivery is present?
c. Traditio brevi manu
a. Traditio simbolica or clavium
b. Traditio longa manu

d. Traditio by legal formalities

39. Using the same data in number 145, what is the remedy of the buyer if the area is the same but a part of the
immovable
is not of the same quality specified in the contract and the inferior value is 1/10 or less of the price agreed upon? *
b. Ask for rescission of the contract of sale.

c. Either A or B
a. Ask for proportionate reduction in the price.

d. Ask for declaration of nullity of the contract of sale.

40. What is the ground before the unpaid seller may exercise his right in stoppage in transitu?
a. When the goods are perishable in nature.
b. When the goods are sold without stipulation as to credit
c. When the buyer is or becomes insolvent
d. When the goods have been sold on credit but the term has expired

41. The following are the exceptional instances when a non-owner seller may transfer title to the buyer, except *
b. When the owner is precluded by his conduct from denying the seller's authority to sell.
c. When the sale is made under the provisions of any factor's acts, recording laws or any other provisions of law
enabling
the apparent owner to dispose of the goods as if he were the true owner thereof.
e. When the purchase is made in a merchant's store, or in fairs,or markets.
d. When the sale is made under a statutory power of sale or under the order of court of competent jurisdiction.
a. When the sale is made with authority or consent of the owner.
f. When the sale of person property is made by a thief or robber to a purchaser in good faith and for value.
42. The following are the instances when goods are no longer in transit and therefore the unpaid seller can no longer
exercise his right of stoppage in
transitu, except *
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after
arrival of the goods at their appointed destination.
d. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the
seller
has refused to receive them back.
c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent.
a. If the buyer obtains delivery of the goods before arrival at the appointed destination.
43. In a sale of real estate with a statement of its area at the rate of a certain price per unit of measure or number, the
vendor

shall deliver the area mentioned in the contract of sale. What is the remedy of the buyer if the actual area is less than
by an
area less than 1/10 of that stated in the contract? *
d. Ask for declaration of nullity of the contract of sale.
a. Ask for proportionate reduction in the price.

c. Either A or B
b. Ask for rescission of the contract of sale.

44. He is one who has not been paid or tendered the whole of the price or who has received a bill of exchange or other
negotiable instruments as conditional payment and the condition under which it was received has been broken by
reason of
the dishonor of the instrument, the insolvency of the buyer, or otherwise. It includes an agent of the seller to whom
the bill
of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price, or
any

other person who is in the position of a seller.

d. Satisfied buyer
a. Unpaid seller
b. Unsatisfied buyer
c. Satisfied seller
45. B rented the specific truck of S. After the end of the contract. S sold the properly to B. As a result of sale, B
continues to
have possession of the properly. What type of constructive delivery is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio constitutum possessorium
46. The following are the rules on the place of delivery of the goods in a contract of sale, except *

e. In the absence of a and b, the buyer's place of business if he has one; if none, the buyer's place of residence.
d. In the case of specific goods, the place where the goods are located at the time of perfection of contract of sale.
a. Place stipulated in the contract.
c. In the absence of a and b, the seller's place of business if he has one; if none, the seller's place of residence.
b. In case there is no stipulation as to the place of delivery, place fixed by usage or trade.
47. The following are the requisites for right to rescind the sale to be available to an unpaid seller, except *
d. The grounds must be: 1) The seller has expressly reserved the right to rescind the sale in case the buyer should
make

default or 2.) The buyer has been in default in the payment of the price for an unreasonable time.
a. The buyer has defaulted in the payment of the purchase price.
c. Title to the goods has passed on the buyer.
b. The seller has no right of lien nor has stopped the goods in transitu.

48. The following are the effect of rescission of contract of sale by the unpaid seller, except *
d. The buyer shall pay for the purchase price.

a. The seller shall not be liable to the buyer upon the contract of sale.
b. The seller may recover from the buyer damages for any loss occasioned by the breach of contract of sale.
c. The seller resumes ownership of the goods.
49. The unpaid seller is bound to exercise reasonable care and judgment in making the resale. He cannot, directly or
indirectly, buy the goods. The following are the effects of resale, except *
a. The seller shall not be liable to the original buyer for the delivery of the goods.

d. The new buyer acquires a good title against the original buyer.
b. The seller may recover damages from the original buyer for any loss occasioned by the breach of the contract of
sale.
c. The original buyer shall be entitled for any profit made by such resale.
50. Naruto, a Filipino, sold his private land to Hinata, a Japanese national. Afterwards, Hinata sold the said private
land to Kakashi, a Filipino. Which of the following statements is correct? *
a. Both contracts of sale are subject to declaration of nullity because they are violative of Constitutional provision
against
ownership of private land by foreigners.
d. The second contract of sale is void because it is the product of the first contract of sale.
c. Ownership of the land will transfer to Kakashi and the contracts cannot be avoided since the land is finally with a
Filipino.
b. Both contracts of sale are unenforceable because they are violate of Constitutional provision against ownership of

private land of foreigners

CREDIT TRANSACTION

What is the form of contract of pledge to bind or to affect third person?

a. It must be registered in the chattel mortgage registry.
b. It must be registered in the registry of deeds.
c. It must be public instrument showing a description of the thing pledged and the
date of the pledge.
d. It must be recorded in the Intellectual Property Office.
2. What is the remedy of the pledger-owner if the thing pledged is in danger of being lost or impaired through the
negligent
or willful act of the pledgee? *

c. To ask for the extinguishment of the contract of pledge.

b. To ask for return of the thing pledged.

a. To require that it be deposited with a third person.

d. To ask the extinguishment of the contract of loan.
3. Which of the following statement is incorrect in case the pledge renounces or abandons in writing the contract of
pledge?
*
d. The return of the thing pledged is necessary for extinguishing the contract of pledge for this mode of contract of
pledge

extinguishment.
a. The contact of pledge is extinguished but the contract of loan remains.
c. The pledgee becomes the depositary upon renunciation if in the meantime, the thing pledge is not yet returned to
the
owner.
b. The acceptance by the pledger is not necessary for extinguishing contract of pledge.
4. Which of the following modes of extinguishing contract of pledge impliedly extinguish the principal obligation or
contract of loan? I. Return by the pledge of the thing pledged to the thing pledged to the pledgor or owner. II.
Renunciation
or abandonment in writing by the pledge of the contract of pledge. III. Sale of the thing pledge in public auction in
case of
default by debtor regardless of the amount of the net proceeds of sale. IV. Appropriation of the thing pledged by the
pledgee in case the thing is not sold in the "first second public auction. *

d. II and IV
a. I and II
c. I and III
b. III and IV
5. D borrowed from C P100,000 secured by a mo#gage on D's two lots (lot 1 and lot 2). D dies leaving E and F as heirs
with
E inheriting lot 1 and F lot 2. F pays P50,000 of the loan. Which of the following statements is correct? *
a. F may ask for the extinguishment of the mortgage on lot 2.

d. F cannot ask for the extinguishement of the mortgage on lot 2.

b. The contract of mortgage is extinguished.
c. The contract of loan is extinguished.
6.The following are the formalities required for the sale of the thing pledged in case of the failure of the debtor to fail
the

principal obligation, except *

c. There must be a notice to the debtor and the owner of the thing pledged, stating the amount for which the public
sale is to
be held.
a. It must be by public auction.
d. It must be sold at the First auction.
b. It must be through a notary public.

7. D borrowed P10,000 from C and pledged his ring and watch with P4,000 and P6,000 value respectively. A$er
several days,
D pays P4,000 C. Which of the following statements is correct? *
a. The contract of pledge is extinguished.
c. D cannot demand the release of his ring because a contract of pledge is indivisible.
d. D may compel C to return the ring because P4,000 of the loan is already paid.
b. The contract of loan is extinguished.
8.What is the nature of a contract to constitute a pledge? *
a. Consensual contract
c. Formal contract
d. Solemn contract
b. Real contract

9. The following are the obligations of the debtor-pledgor, except *

a. To pay the debt and interest, with expenses, in property case, when they are due.
d. To warrant the thing pledged for its quality and merchantability.
b. To pay damages that the pledgee may suffer by reason of the Saws of the thing
pledged, if he was aware of such Saws but he did not advise the pledgee of the same.
c. To pay for expenses which are necessary for the preservation of the thing pledged.
10. What is the form of contract of pledge to bind the contracting parties? *
c. It must be registered in the registry of deeds.

d. It may be in any form because it is a real contract.

b. It must be in a public instrument.
a. It must be in a private instrument
11. If two or more things are pledged, who has the right to choose which thing will be sold in the absence of
stipulation? *

c. Debtor

a. Pledgor
b. Pledgee
d. Government
12. The contract of pledge shall cover the following, except *
b. The fruits, income, dividends or interests earned or produced by the thing pledged, unless there is stipulation
excluding
them.

d. The future inheritance of the pledgor.

c. The offspring, when the thing pledged is an animal, unless there is a stipulation excluding them.
a. The thing pledged.
13. What is the remedy of the pledgor-debtor if the pledgee creditor use the thing pledged, without the authority of
the
owner or should misuse the thing in any other way? *
c. To ask for the extinguishment of the contract of pledge.
b. To ask for the return of the thing pledged.
d. To ask for extinguishment of the contract of loan.
a. To ask that it be judicially or extra-judicially deposited.

14. The following are the rights of third person who pledges his own movable property to secure debt of another,
except *

b. To be subrogated to all the rights of the creditor against the debtor if he pays the creditor.
d. To become principally liable.
a. To be indemnified by the debtor if he pays the creditor.
c. To be released from liability in the cases provided by law.
15. If the thing is found in the possession of the pledgor or owner or if the thing is in the possession of a third person
who
has received it from the pledgor or owner, which of the following is incorrect? *

b. There is prima facie presumption that pledge returned the thing pledged.
a. There is prima facie presumption that the contract of pledge is extinguished.
c. There is prima facie presumption that the contact of loan extinguished.
16. In case the cause or consideration of the contract of pledge is not stipulated, what is the cause or consideration of
the

contract of pledge? *

a. It has no cause or consideration.

d. The cause is the service remunerated.
c. The cause or consideration is the liberality of the pledgor
b. The cause or consideration of the principal obligation or contract of loan
17. The following are the characteristics of a contract of pledge, except *
a. Consensual- It is perfected by mere consent,
d. Subsidiary-- The obligation incurred does not arise until the fulfillment of the

principal obligation which is secured.

b. Accessory- It has no independent existence of its own because there must be
contract of loan.
c. Unilaterial - It creates an obligation on the part of the creditor to return the thing
upon the fulfillment of the principal obligation.
18. A and B jointly borrowed P10,000 from C. In order to secure the obligation, A pledged his cellphone while B
pledged
his laptop. At the maturity date of the loan, A paid P5,000 of the loan. Which of the following statements is correct? *
a. The contract of pledge on the cellphone is extinguished.
c. A cannot demand the release of his cellphone because a contract of pledge is indivisible.
b. The obligation of B is extinguished.
d. The contract of pledge on the laptop is extinguished.

19. The following are the rights of the debtor-pledgor, except *

e. To ask that the thing pledged be judicially deposited if it is used without authority or for a purposes other than for
its
preservation.
a. To alienate, with the consent of the pledged, the thing pledged.
f. To require that the thing be deposited with a third person if it is in danger of being lost or impaired through the
negligence or willful act of the pledgee.
h. To demand the return of the thing pledged despite defaulting on the payment of the secured principal obligation.

c. To become the owner of the offspring of the animal pledged if there is no stipulation to the contrary but such
offspring
shall be subject of the pledge.
d. To ask for the return of the thing pledged after he has paid the debt and its interest, with expenses in a proper case.
b. To continue to be the owner of the thing pledged unless it is expropriated.

g. To demand the return of the thing pledged, upon offering another thing in pledge, provided the latter is of the same
kind

of quality, if there are reasonable grounds to fear the destruction or impairment of the thing pledged without the fault
of the
pledgee. The right is without prejudice to the right of the pledgee to have the thing sold at a public sale.

20. The following may become the object of a contract of pledge, except *
a. All movable
d. Real or immovable properties and rights thereon.

c. Incorporeal rights which are evidenced by negotiable instruments, bill of lading,

shares of stocks, bonds, warehouse receipts and similar documents.
b. Personal property susceptible of possession.
21. The following persons may bid at the public auction, except *
c. Third persons
a. The pledgor is the owner
b. The pledgee if there are other bidders
d. The pledgee even if he is the only bidder
22. A and B jointly borrowed P10,000 from C. In order to secure their respective obligations, A pledged his cellphone
while
B pledged his laptop. At the maturity date of the loan. A paid P5,000 of the loan. Which of the following statements is
correct? *

b. The obligation of B is extinguished.

a. The contract of pledge on the cellphone is extinguished
d. The contract of pledge on the laptop is extinguished.
c. A cannot demand the release of his cellphone because a contract of pledge is indivisible.
23. What is the nature of a contract of pledge? *
c. Formal contract
d. Solemn contract
b. Real contract

a. Consensual contract
24. In case the bids of the pledgor-owner, the pledgee and a third person are equal and considered the highest bid,
who shall
be preferred among them? *
c. Third person

b. Pledgor-owner
a. Pledgee

25. The following statements pertaining to a promise to constitute a pledge or mortgage are correct, except *
c. It creates no real right in the property but only a right to compel the fulfillment of the promise but there is no
contract of
pledge or contract of mortgage yet.
b. The contract perfected is real contact.
d. The promissor will be criminally liable if he mortgages or pledges as unencumbered things which he knew were
subject

to some burden.
a. It gives rise only to a person action between the contracting parties.
26. In case the thing pledged is alienated by the debtor- pledgor to third person, what is the effect of the consent of the
pledgee to the alienation made by the pledgor of the thing pledged to third person? *
b. The ownership of the thing pledged is transmitted to the buyer.
c. The creditor- pledgee losses possession of the thing pledged.
a. The thing pledged remains to be owned by the debtor-pledgor
d. The contract of pledge is already extinguished.
27. What is the nature of a contract of pledge, of chattel mortgage, of real estate mortgage or of antichresis? *

b. It is indivisible if the principal contract is solidary.

c. It is divisible whether the principal contract is joint or solidary.

a. It is divisible if the principal contract is joint.

d. It is invisible whether the principal contract is joint or solidary.
28. The following requisites are essential to the contracts of pledge, real estate mortgage and chattel mortgage, except
*
a. That they be constituted to secure the fulPllment of a principal obligation such as contract of loan.
b. That the pledged or mortgagor be the absolute owner of the thing pledged or mortgaged.
c. That the persons constituting the pledge or mortgage have free disposal of their property, and in the absence
thereof, that

they be legally authorized for the purpose.

d. That when the principal obligation becomes due, the things in which the pledge or mortgage consists may be
alienated
for the payment of the creditor.
e. That the thing pledged or mortgaged be placed in the possession of the creditor, or of a third person by common

agreement
29. What is the legal effect of a promise or contract to constitute a pledge? *

b. It is perfected through the notarization of the promise.

c. It is perfected by mere consent and gives rise only to a personal action between the
contracting parties.
a. It is perfected by delivery of the thing pledge.
d. It gives rise to a real action over the thing pledged.
30. When is the pledged or mortgagor required to be the owner of the thing pledged or mortgaged for the validity of

contracts of pledge, of real estate mortgage or of chattel mortgage? *

d. At the time the thing to be pledged or mortgaged is to be delivered.
a. At the time the principal obligation is constituted.
c. At the time of the failure to pay the principal obligation.
b. At the time the contract of pledge or mortgage is constituted
31. D borrowed P10,000 from C. To secure the ful"llment of the loan, D pledged his laptop. The contract of pledge
provides
that the creditor- pledged may appropriate the laptop upon failure of the debtor-pledgor to pay the loan. On the date
of
maturity of the loan, D failed to pay the loan. Which of the following statements is correct? *
d. The contract of pledge is null and void because of pactum commissorium provision.
a. C becomes the owner of the laptop.
b. The laptop cannot be alienated for the payment of the loan.

c. C does not become the automatic owner of the laptop upon D's failure to pay the loan because that provision is
considered pactum commissorium which is contrary to law and public policy.
32. D borrowed P10,000 from C and pledged his ring and watch with P4,000 and P6,000 value respectively. They
agreed that
the ring will secure P4,000 of the loan and the watch will secure the balance of the loan. A$er several days, D pays
P4,000
to C. Which of the following statements is correct? *
a. The contract of pledge on the watch is extinguished.

b. The contract of loan is fully extinguished.

c. D cannot demand the release of his ring because a contract of pledge is indivisible.
d. D may compel C to return the ring because contract of pledge on the ring is extinguished.
33. The following are the kinds of principal obligations that may be secured by a contracts of pledge, of real estate
mortgage or of chattel mortgage, except *

h. Null and void obligations

e. Rescissible obligations
f. Voidable obligations
c. Obligations with a period whether suspensive period (ex die) or resolutory period (in diem)
a. Pure obligations
b. Conditional obligations whether suspensive condition or resolutory condition
d. Natural obligations

g. Unenforceable obligations
34. It is a contract by virtue of which the debtor delivers to the creditor or to a third person a movable, or instrument
evidencing incorporeal rights for the purpose of securing the fulfillment of a principal obligation with the
understanding
that when the obligation is fulfilled, the thing delivered shall be returned with all its fruits and accessions. *
a. Contract of pledge
b. Contract of Chattel mortgage
d. Contract of Antichresis
c. Contract of Real estate mortgage
35. D borrowed P20,000 from C. To secure the fulfillment of the loan, D mortgaged a land owned by his ailing father.
Which of the following statements is correct? *
d.The contract of mortgage is null and void because the mortgagor must be the owner of the property mortgaged at
the time

it is constituted but the contract of loan remains to be valid.

b. The contract of loan is null and void because the contract of mortgage is null and void.
a. The contract of mortgage is valid because future property may be pledged or mortgaged.
c. The contract of mortgage will become valid upon the death of D's father.
36. Grace obtained a loan from jojo in the amount of PIM with Mar serving as guarantor. Rody pledged his cellphone
to
secure the debt of grace. If Rody pays the PIM loan of Grace, which is correct? *
d. Mar is not liable to Rody.

c. Rody can collect the PIM from Mar if Grace will not be able to pay Rody.
b. Rody cannot collect the PIM from Grace if the latter does not consent to the payment of Rody.
a. There will be no legal subrogation if Grace does not consent to9 the payment of Rody.
37. Which of the following direct modes of extinguishing contract of pledge do not impliedly extinguishing the
principal

obligation or contract or contract of loan? I. Return by the pledgee of the thing pledge to the pledgor or owner. II.

Renunciation or abandonment in writing by the pledgee of the contract of pledge. III. Sale of the thing pledge in
public
auction in case of default by debtor regardless of the amount of the net proceeds of sale. IV. Appropriation of the
thing
pledge by the pledgee in case the thing pledge is not sold in the first second public auctions. *
d. II and IV
c. I and III

b. III and IV
a. I and II
38. Using the same data in preceding number, suppose it is C who dies leaving X and Y as heirs. If D pays X P50,000,
which of the following statements is correct? *
b. X cannot cancel the mortgage to the prejudice of Y.
c. The contract of mortgage is extinguished.
d. The contract of loan is extinguished.
a. X may cancel the mortgage to the prejudice of Y.

29. Which of the following stipulation in a contract of pledge is null and void? I. A Stipulation which provides that
the
contract is not extinguished by the return of the thing pledge. II. A stipulation allowing the appropriation by the
pledgee of

the thing pledged in case the same is not sold in the first and second auctions. III. A stipulation for the recovery of
deficiency in case the proceeds from the sale of the thing pledged is less than the amount of the obligation. *
c. I and II
d. I and II
b. II and III
a. I and III
30. The following are the instances where the thing pledged or mortgaged may be sold or alienated to pay the
principal

obligation, except *
d. Before maturity of the principal obligation.
b. If the debtor has lost the right to make use of the period or where there is an acceleration clause in the payment of
installment.
a. If the pledgor or mortgagor fails to fulfill certain conditions and such violation would make the debt due and
demandable.

c. Upon default to pay the obligation at maturity

31. The following are the essential requisites of conventional pledge or contract of pledge, except *
c. That person constituting the pledge has the free disposal of his property, and in the absence thereof, that he be
legally
authorized for the purpose.
d. That the thing pledged be placed in the possession of the creditor, or a third person by common agreement or there
must
be delivery of the thing pledged.

a. That it be constituted to secure the fulfillment of a principal obligation or contract of loan.

b. That the pledgor be the absolute owner of the thing pledged.
e. That the contract of pledge be constituted in public document.
32. Pledge may be extinguished directly. The following are the modes of extinguishing the contract of pledge directly,
except *
c. Renunciation or abandonment in writing by the pledgee of the pledge.
a. When the principal obligation, secured by the pledge is extinguished.
e. Appropriation of the timing pledge by the pledgee if the thing pledged is not sold in the first and second auctions.
b. Return by the pledgee of the thing pledgor or owner.
d. Sale of the thing pledge regardless of the net proceeds
33. The following are the obligations of creditor-pledgee, except *
b. To liable for the loss or deterioration of the thing pledged unless it is due to a fortuitous event.

f. To deposit the thing pledged with a third person even not authorized by the court.
e. To deliver to debtor the surplus after paying his claim from what he has collected on a credit that was pledged and
which
has become due before it is redeemed.
c. To be responsible for the acts of his agents or employees with respect to the thing pledged.
a. To take care of the thing pledged with the diligence of a good father of a family.
d. Not to use the thing pledged except when he is authorized by the owner or when the use of the thing is necessary
for its
preservation.

34. What is remedy of the pledgor-owner if there are reasonable grounds to fear the destruction or impairment of the
thing
pledged, without the fault of the pledgee? *
d. To ask for extuinguisment of the conract of loan.
c. To ask for extinguisment of the contract of pledge.

b. To require that it be deposited with a third person.

a. To ask for the return of the thing, upon offering another thing in pledge, provided the latter is of the same kind as
the
former and not of inferior quality but subject to the right of the pledgee to sell the said pledged item in public auction.
35. A third person who pledges his own movable property to secure the debt of another shall be released from liability
in
the following cases and may ask for the return of the thing pledge from the pledgee, except *
b. If an extension of time is granted to the debtor by the creditor without pledgor's consent.

e. If the debtor defaults in the payment of principal obligation on the maturity date.
a. If the creditor voluntarily accepts immovable or other property in payment of th debt even if the creditor thereafter
loses
the same by eviction.
c. If through some act of the creditor, the pledgor cannot be subrogated to the rights, mortgage and preferences of the
creditor.
d. If the thing pledge is deteriorated on the fault of the pledgee
36. It is a stipulation whereby the thing pledged or mortgaged shall automatically become the property of the creditor
in the
event of non- payment of the debt within the term fixed. *
c. Pactum debitarium
b. Pactum commissorium
a. Pactum creditarium

d. Pactum crematorium
37. If there are reasonable grounds to fear the destruction or impairement of the thing pledged, without the fault of the
pledgee, which is correct? *
d. The contract of pledge is extinguished by the sale of the thing pledged in the public auction.
c. The right of the pledgor-owner is superior to the right of the pledgee-creditor.
b. The pledgee-creditor may cause the sale of the thing pledged at the public sale and the proceeds of the auction shall
be a
security for principal obligation in the same manner as the thing originally pledged. However, the pledgee is bound to

advise the pledgor, without delay, of any danger to the thing pledged.
a. The pledgor-owner may ask for the retuirn of the thing, upon offering another thing in pledged, provided the latter
is the
same kind as the former and not of inferior quality even it is already sold in the public auction by the pledgee-creditor.
38. The following are the rights of the creditor-pledgee, except

e. To cause the sale of the thing pledged at a public sale, if there is a danger of destruction, impairment or diminution
of

value of the thing pledged without his fault. The pledgee is bound to advice the pledgor, without delay, of any danger
to the
thing pledged.
b. To demand reimbursement of the expenses made for the preservation of the thing pledged.
d. To use the thing pledged if he is authorized to do so, or when its use is necessary of the preservation of the thing.
i. To appropriate are thing pledged in the case the thing pledged is not sold in the first and second public auctions.
j. To become the automatic owner the thing pledged upon first default of debtor to pay the principal obligation at
maturity
date.
a. To retain in his possession the thing pledged until the debt is paid.
g. If the pledge earns or produces fruits, income, dividends, or interest, the creditor shall compensate what he
receives with
those which are owing him, or insofar as the amount may exceed that which is due,he shall apply it to the principal.
Unless
there is a stipulation to the contrary, the pledge shall extend to the interest and earnings of the right pledged.
c. To bring actions which pertain to the owner of the thing pledged in order to recover it from, or defend it against
third
person.
f. To collect and receive the amount due if the thing pledged is a credit which becomes due before it is redeemed, and
to
apply the same to the payment of his claim.

h. To sell the thing pledged upon default of the debtor.

39. ABC Inc. borrowed P2,000,000 from BPI. ABC Inc. is under receivership. To secure the fulfillment of the loan,
ABC
mortgaged its administrative building. Which of the following statements is correct? *
c. The contract of mortgage is null and void because only natural person may enter in a contract of mortgage.
a. The contract of mortgage is null and void because the mortgagor has no free disposal of the thing.
b. The contract of mortgage is valid because the mortgagor is the absolute owner of the property mortgaged at the
time the
mortgage is constituted.
d. The contract of mortgage is voidable.
40. D borrowed P1,000,000 from C, G, a third person, mortgaged his land to secure the fulfillment of D's loan. Is the
contract of mortgage valid? *

c. Yes because third persons who are not parties to the principal obligation may secure the latter by pledging or
mortgaging

their own property.

a. No because D must be the owner of the mortgaged land.
d. No because G is no privy to the contract of loan.
b. Yes provided G will deliver the land to C.