Group 2 – MiCpar

Christian Jay Alolor

Lyndelle Grace Awitan
Juliet Auditor
Danica Batitang
Gielyn Balolong

NEGOTIABLE INSTRUMENTS

1. A promissory note is distinguished from a bill of exchange

a. It contains an unconditional order
b. The one who issues it is primarily liable
c. The one who issues it is secondarily liable
d. There are three (3) parties, the drawer, the payee and the drawee

2. The sum payable is a sum certain, although it is to be paid

a. With interest
b. By stated installments
c. With exchange
d. All of the above

3. Statement 1: An instrument which contains an order or promise to do any act in addition

to the payment of money is not negotiable.
Statement 2: An instrument where no time for payment is expressed is payable on
demand.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are wrong

4. The following instruments are payable to bearer, EXCEPT

a. When it is payable to a person named therein or bearer
b. When the name of the payee does not purport to be the name of any person
c. When it is payable to the order of a fictitious or non-existing person and such fact
was known to the persons making it so payable
d. None of the above

5. Which of the following is not necessary in order to make an instrument negotiable?

a. It must be in writing and signed by the maker
b. It must contain an unconditional promise or order to pay a sum certain in money
c. It must be payable on demand or at a fixed future time
d. It must be payable only to a specified person

6. Statement 1: Every negotiable instrument is deemed prima facie to have been issued for
a valuable consideration and every person whose signature appears thereon to have
become a party thereto for value.
Statement 2: An accommodation party is liable on the instrument to a holder for value,
notwithstanding such holder at the time of taking the instrument knew him to be
only an accommodation party.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are wrong

7. An instrument which is originally negotiable ceases to be negotiable when

a. Restrictively indorsed
b. Qualified indorsement
c. The last and only indorsement in blank
d. None of the above

8. An indorsement where the indorser adds the phrase “without recourse” is called:
a. Blank indorsement
b. Restrictive indorsement
c. Qualified indorsement
d. Conditional indorsement

9. An indorsement is restrictive, which either

a. Prohibits the further negotiation of the instrument
b. Constitutes the indorsee the agent of the indorser
c. Vests the title in the indorsee in trust for or to the use of some other person
d. All of the above

10. Statement 1: The drawer’s liability is primary.

Statement 2: The liability of an acceptor is secondary.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statement are correct
d. Both statement are wrong

11. Statement 1: The liability of an indorser is primary.

Statement 2: The acceptor admits the existence of the drawer, the genuineness of his
signature and his capacity and authority to draw the instrument.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statement are wrong

12. Three of the following are warranties of a qualified indorser; which is not?
a. Capacity of prior parties
b. Instrument is valid and subsisting
c. Good title
d. Instrument is genuine and in all respect that it purports to be

13. A holder in due course is a holder who has taken the instrument under the following
conditions:
a. That it is complete and regular upon its face
b. That he became the holder or if before it was overdue and without notice that it
has been previously dishonored if such was the fact
c. That he took in good faith and for value
d. All of the above

14. A check which has not been presented for payment within a reasonable time after its
issuance is a
a. Certified check
b. Stale check
c. Manager’s check
d. None of the above

15. The following are modes of discharging an instrument. Which is the exception?
a. By payment in due course by or on behalf of the principal debtor
b. By payment in due course by the party accommodated, when the instrument is
made or accepted for accommodation
c. By discharge of a prior party
d. By the intentional cancellation thereof by the holder

16. It is an unconditional order in writing addressed by one person to another, signed by

the person giving it, requiring the person to whom it is addressed to pay on demand or
at a fixed or determinable future time a sum certain in money to order or to bearer.
a. Promissory note
b. Bill of exchange
c. Check
d. Draft

17. An instrument which is payable from a specific fund or appropriation:

a. Letter of credit
b. Bill of lading
c. Warehouse receipt
d. Treasury warrant

18. It is one upon which the holder’s signature must appear twice, one to be affixed by him
at the time it is issued and the second or counter-signature, to be affixed by him in the
presence of the payee before it is paid, otherwise, it is incomplete.
b. Traveler’s check
b. Certified check
c. Memorandum check
d. Cashier’s check

19. A bill of exchange may be treated as promissory note in the following instances, which
is the exception?
a. When the drawer and drawee are the same person
b. When the drawee is a fictitious person
c. When the drawee is an incapacitated person
d. Where the instrument is not ambiguous as to whether it is a bill or a note

20. Presentment for acceptance is excused and a bill may be treated as dishonored by
non-acceptance in the following cases. Which is the exception?
a. Where the drawee is dead, or has absconded or is a fictitious person or a person
not having capacity to contract by bill
b. Where after the exercise of reasonable diligence, presentment cannot be made
c. Where although presentment has been irregular, acceptance has been refused on
some other ground
d. Where the bill is drawn payable elsewhere than at the residence or place of
business of the drawee

Sales

1. Dacion en pago as distinguished from a contract of sale

a. There is greater freedom in fixing the price

b. Obligations are created
c. Ownership of the object is transferred to the other party
d. A pre-existing credit is extinguished
2. Action by the vendee against the vendor to nullify the sale due to some vices or
defects which render the object of sale unfit for the use intended or knowledge of
which, the vendee would not have bought the thing

a. Accion quanti minoris

b. Accion reinvidicatoria
c. Accion pauliana
d. Redhibitory action

3. The redhibitory action based on the faults or defects of animals must be brought
within
a. 30 days from delivery to the vendee
b. 45 days from delivery to the vendee
c. 40 days from delivery to the vendee
d. 6 months from delivery to the vendee
4. This serves as a proof of the perfection of the contract of sale
a. Dacion en pago b. Option money c. Delivery d. Arras

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

a. Between a minor and a deaf mute who does know how to write
b. Between two insane persons who did not act during lucid interval
c. Between first degree cousins
d. Between husband and wife

6. One of the following is not correct

a. Things subject to resolutory condition may be the object of contract of sale
b. A thing is generic when it is particularly designated or physically segregated
from all others of the same class
c. Things having potential existence may be the object of the contract of sale
d. The sole owner of a thing may sell undivided interest therein

7. A needs a size 10 of model 101 of Delicious Shoes regularly available to the

public for her boyfriend B, but the same is out of stock so she placed an order for
one. On the other hand, B placed an order for size No. 8, colored violet,
(something not ordinarily made by the company) to be given to A. Which is
correct?
a. Both are contracts of sale
b. Both are contracts for a piece of work
c. First is contract of sale, second is a contract for a piece of work
d. First is a contract for a piece of work, second is a contract of sale

8. B ordered from S a pair of shoes of the kind and style of which S has gone out of
stock. There is:
a. Contract of piece of work
b. Contract of sale
c. Contract of agency
d. Contract of lease of service

9. A contract of sale is not a(an)

a. Onerous contract
b. Accessory contract
c. Commutative contract
d. Bilateral

10. Which of the following is not constructive delivery in sale?

a. Traditio symbolica
b. Traditio constitutum possesorium
c. Tradition longa manu
d. This is place in the control and possession of the buyer

11. Emption spei as distinguished from emptio rei speratae,

a. Sale of a future thing
b. Its quantity and quality
c. Should come into existence
d. Sale of hope or chance

12. Which is not correct? In a sale by auction

a. The auctioneer may withdraw the goods before the hammer falls whether or
not the auction has been announced to be without recourse.
b. The sale is perfected when the auctioneer announces its perfection by the
fall of the hammer.
c. The seller may bid provided such right was reserved and notice was given
to the other bidders.
d. Every bidding is merely an offer, and therefore before it is accepted, it may
be withdrawn.

13. Which of the following is not a characteristic of sale?

a. Bilateral
b. Gratuitous
c. Consensual
d. Nominate

14. Silva sold Bien a land, which is owned by Canunto. Is the sale valid?
a. No, because Silva does not have the right to sell things which he does not
own.
b. No, he should first acquire the title legally from Canuto before he can sell it
to Bien.
c. Yes, it is sufficient that he be the owner at the time he is to deliver the object.
d. Yes, it is valid until annulled.

15. If movable property should have been sold to different vendees, the ownership shall
be transferred to the person
a. Who have first taken possession in good faith
b. Who presents the oldest title in good faith
c. Who in good faith first recorded it in the Registry of Property
d. Who have paid in good faith the purchase price in full.

16. If the seller is not the owner, the sale is null and void. Which is not an exception?
a. When the owner of the goods is by his conduct precluded from denying the
seller’s authority.
b. When the goods were sold in a merchant’s store, or in fairs, or markets.
c. When the seller subsequently acquires title.
d. When the buyer acquires the property without knowledge of the bad faith of
the seller.

17. A, 17 years old, sold to B, of legal age, her necklace worth P20,000 for P15,000.
Later, B sold the necklace to C for P20,000. Which of the following statements is
correct?
a. A has got a voidable title because at the time of sale, she is a minor.
b. A can ask for rescission of the sale to C because she suffered a lesion of more
than ¼ of the value of property.
c. If C is in bad faith, C becomes the owner of the necklace upon delivery to him
but his title is voidable.
d. A can ask for the annulment of the sale to C because at the time sale she is a
minor.

18. A case where a contract of sale must not necessarily be in writing

a. Sale of 100 piculs of sugar at P400 per picul when there is partial delivery.
b. Sale where by its term cannot be performed within one year from the making
thereof.
c. Sale of land.
d. Sale at public auction

19. A offered his ring to B for 12,000. B ask for a time to have the 12,000 after one
month. Five days before the expiration of the one month period, A went to B told
her that she is no longer willing to sell the property unless the price is increased to
P15,000,000. Which is correct?
a. B may compel A to accept the P12,000,000 first offered
b. A may compel to B to pay P15,000,000
c. A and B should shoulder the P3,000,000 difference
d. B cannot compel A to accept the P12,000,000 first offered

20. Which of the following statement is incorrect?

a. In a contract of sale the full payment of the price is in the nature of
suspensive condition in that the seller is obliged 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 had
not actually 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.

Agency

1. A contrast whereby a person binds himself to render some service or to do

something in representation or in behalf of another, with the consent and authority
of the latter.

a) Contract for lease of service.

b) Contract of agency.
c) Contract for a piece of work.
d) Contract to sell.

2. One of the following is not a characteristic of the contract of agency.

a) Consensual
b) Accessory
c) Nominate
d) Preparatory

3. One of the following acts may be delegated by a principal to his agent. Which is
it?

a) Vote during the meeting of stockholders of a corporation where the principal

is a stockholder.
b) Attend meetings of the board of directors of directors of a corporation where
the principal is a director.
c) Purchase land in the Philippines of which the principal is an alien.
d) Represent the principal a marriage ceremony where the principle is a party to
the marriage proposal.

4. One of the following acts requires only general power of attorney, not a special
power of attorney, for the agent. Which is it?

a) To bind the principal in a contract of partnership.

b) To loan money of the principal.
c) To enter into a contract by which the ownership of an immovable is
transmitted or acquired gratuitously or for a valuable consideration.
d) To make such payments as are usually considered acts of administration.

5. P, the owner of the certain car, wanted to sell the car. A learned that P was selling
the car. Without the authority of P, A sold the car in his (A’s) name to B. what is
the status of the sale of the car?

a) Valid between A and B but A must be able to transfer the ownership of the car
to B at the time of the delivery.
b) Unenforceable against P because he did not authorize A to sell the car.
c) Void because A was not the owner of the car at the time of sale.
d) Voidable because the sale was without the consent of P.

6. When the two person contract with regard to the same immovable thing. One of
them with the agents, and the other with the principal., and the contracts are
incompatible with each other, ownership shall belong to the:

a) First purchaser in the good faith

b) One who first completed the payment of the price in good faith
c) One who first registered in good faith the transaction.
d) One who presents the oldest title who must be in good faith.

7. Which of the following is not a mode of extinguishing an agency?

a) Death, civil interdiction, insanity or insolvency of the principal or agent.

b) Accomplishment of the purpose of the agency.
c) Expiration of the period for which the agency was constituted.
d) Continued losses on the part of the principal or agent.

8. This is an agency that compromises one or more specific transactions of the

principal?

a) Special agency.
b) General agency.
c) Agency couched in general terms.
d) Agency couched in specific terms.

9. P leads B to believe that A is his (P’s) agent. However P is not really the agent of
P. later b transacted with A believing that A is the agent of P. what kind of agency
was created here?

a) Agency by ratification
b) Agency by appointment
c) Agency by estoppel
d) Agency by necessity

10. Which of the following statements pertaining to a contract of agency is incorrect?

a) The death of the principal extinguishes the agency.

b) An agent may be a natural person or an artificial person like corporation.
c) A guarantee commission agent is not liable to the principal if he cannot collect
the price of sale from the buyers.
d) A contract of agency is presumed to be for a compensation.

11. Which of the following contract entered into by the agents is binding upon the
principal although the agent’s authority is a general power of attorney?

a) Sale of a piece of land

b) Lease of a piece of land to a third person for a period of 2 years.
c) Gifts made to employees in the business managed by the agents.
d) Contract of partnership with the principal as partner.

12. Which of the following does not extinguish an agency?

a) Dissolution of the corporation that entrusted the agency.

b) Insanity of the agent.
c) Continued business losses of the agents for at least 2 years.
d) Insolvency of the agent.
13. Which of the following is a valid delegation by the principal to his agent?

a) The purchase by the agent of a land located in manila. The principal is an

American.
b) The exercise of the voting rights in the local elections. The principal is
Filipino who is qualified voter like the agent.
c) The lease of a vehicle for the use of the principal who is a duly licensed driver
for two months.
d) The attendance at the board meetings of a corporation of which the principal is
a director.

14. Which of the following contracts entered into by the agents is binding upon the
principal although the agent’s authority is a general power of attorney?

a) Sale of a building
b) Lease of a piece of land to a third person for a period of 2 years.
c) Customary gifts to charity
d) Contract of partnership with the principal as partner.

15. Agency is a different from negotiorum gestio beacause in agency.

a) There is a meeting of minds.

b) The legal relation is created by law.
c) The one who acts follows his own judgment and the presumed will of the
owner.
d) No representation has been agreed upon.

16. The following acts require a special power of attorney, except.

a) To loan the money of the principal.

b) To borrow money in behalf of the principal.
c) To submit questions to arbitration.
d) To lease real property for one year or lease.

17. These statements are presented to you:

I. A special power to sell includes the power to mortgage
II. A special power to mortgage excludes the power to sell.

In your evaluation of the foregoing statements:

a) Both statements are true.

b) Both statements are false.
c) Only statement I is true.
d) Only statement II is true.

18. Sampaca , manufacturer of “Dreamland” beds, and Bergonio entered into a

contract with the following terms: Sampaca was to furnish beds to Bergonio who
must pay the price within 30 days from the receipt of the shipment, minus a
discount of 25%. What contract was entered into between Sampaca and Bergonio?

a) Contract of sale
b) Contract of agency of sell
c) Contract of sell
d) Contract of consignment

19. Which of the following is not a characteristic of the contract of agency?

a) Onerous, which means that an agency is presumed to be for a compensation.

b) Real, which means that the principal must deliver the object to the agent for
the perfection of the contract.
c) Principal, which means that a contract of agency can stand by itself.
d) Preparatory, which means that the a contract of agency is a means, that a
contract will be entered into.

20. The principal may delegate to an agent the performance of one of the following
acts.

a) The power to attend and vote at the meetings of directors of a corporation of

which the principal is a director.
b) The power to represent the principal in a marriage ceremony where the
principal is the groom.
c) The power to vote in the elections of officials for public office while the
principal is abroad.
d) The power to vote in the election of directors of a corporation of which the
principal is a stockholder.

Pledge

1. One of the distinctions between pledge and mortgage is that pledge:

A. Is constituted to secure the fulfillment of a principal obligation.

B. requires absolute ownership on the part of the person constituting the security.
C. requires that the one constituting the security must have the free disposal of the thing
or be legally authorized for the said purpose.
D. requires the actual delivery of the thing given as security to the creditor or a third
person by common agreement.

2. The following may be the object of the pledge, except:

A. all movables within the commerce of men which are susceptible of possession.
B. bills of lading.
C. shares of stock.
D. parcels of land.

3. The debtor/pledger has the following rights, except to:

A. ask for the return of the thing pledged after he has paid the debt, its interests, and with
expenses in a proper case.
B. continue to be the owner of the thing pledged unless it is expropriated.
C. require the deposit of the thing with a third person if it is in danger of being impaired
or lost through the negligence or wilful act of the pledgee.
D. alienate the thing pledged without the consent of the pledgee.

4. The creditor/pledgee has the following rights, except to:

A. retain the thing in his possession until the debt is paid.

B. use the thing pledge even without authority if such use is necessary for its
preservation.
C. demand reimbursement of the expenses made for the preservation of the thing.
D. automatically appropriate the thing pledged upon default of the debtor in the payment
of his debt.

5. A third person who pledges his property to secure another person’s debt is released
from liability in the following cases, except:

A. when the creditor voluntarily accepts an immovable property in payment of the debt.
B. when the creditor voluntarily accepts a movable property in payment of the debt.
C. if an extension of time is granted to the debtor by the creditor with pledgor’s consent.
D. if through some acts of the creditor, the pledgee cannot be subrogated to the rights,
mortgages and preferences of the creditor.

6. A pledge is extinguished through any of the following, except:

A. sale of the thing pledged.

B. appropriation of the thing pledged after the thing is not sold at one public auction.
C. written abandonment of the pledge in writing.
D. return of the thing pledged.

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

Based on the foregoing, which is false among the four statements?

A. I and III.
B. II and IV.
C. I and II.
D. II and III.

8. In a contract of pledge, the pledgee/creditor may do the following, except to:

A. use the thing pledged for purposes of preservation.

B. retain the thing pledged until the principal obligation is satisfied.
C. Ask for a substitute if he was deceived on the substance or quality of the thing
pledged.
D. sell the thing pledged without notice to the pledger/debtor.

9. The following elements are common in both pledge and mortgage, except:

A. the contract is constituted to secure the fulfillment of a principle obligation.

B. the property on which the security is constituted must be delivered to the creditor.
C. the debtor must be the absolute owner of the property pledge or mortgaged.
D. the debtor must have free disposal of the property pledge or mortgaged.

10. Pledge and real mortgage are similar in what respect?

A. The object of the contract.

B. Binding effect against third persons.
C. Recovery of deficiency.
D. The fact that third persons may pledge or mortgage their property to secure another
person’s debt.

11. D obtained a loan from C. To secure the debt, D pledged his ring to C. Before due
date, C executed a private document stating that he was abandoning the pledge. In the
meantime, C remained in possession of the ring and D has yet to express his acceptance
of the abandonment of the pledge.

A. The pledge of the ring is extinguished.

B. The pledge is not extinguished until C returns the rings.
C. The pledge is not extinguished unless D accepts the abandonment since it is an act of
generosity.
D. The pledge is not extinguished because the abandonment should be in a public
instrument.

12. Pledge is extinguished by any of the following means, except:

A. Return by the pledger of the thing pledged.

B. Written abandonment of the pledged by the pledgee who remains in possession of the
thing pledged.
C. Sale of the thing pledged for less than the amount of the debt.
D. Appropriation of the thing pledged if not sold at one public auction.

13. D pledged his ring to secure his debt to C amounting to P20,000.00 payable after 30
days. On due, D defaulted. At public auction, the ring was sold only for P18,000.00.

A. Both the debt of P20,000.00 and the pledge are extinguished.

B. Neither the debt of P20,000.00 nor the pledge is extinguished.
C. The pledge is extinguished. The debt will be extinguished when C has recovered the
deficit of P2,000.00 from D.
D. The debt is extinguished. However, the pledge will subsist.

14. Pledge, real mortgage, chattel mortgage, and antichresis are similar to one another
with respect to:

A. The kind of object of the contract.

B. Their binding effect on third persons.
C. Their being indivisible.
D. The form to make them binding between the parties.

15. The following are the indirect causes of extinguishment of pledge:

I. Written abandonment of the thing pledged.
II. Appropriation of the thing pledged if not sold at two public auctions.
III. Return of the thing pledged.
IV. Sale of the thing pledged.
Which of the above modes of extinguishment will extinguish not only the pledge but also
the principal obligation it secures?
A. I and III.
B. II and IV.
C. I and II.
D. III and IV.

16. The following stipulations between the pledger/mortgagor and the pledgee/mortgagee
are presented to you:
I. That the pledgee/mortgagee may purchase the thing pledged/mortgaged at its current
price when the debt is not paid when due.
II. That the pledgee/mortgagee may bid at the public auction of the thing
pledged/mortgaged.

Which of the foregoing stipulations is valid?

A. Both I and II.
B. I only.
C. II only.
D. Neither 1 nor 2, because they are in the nature of pactum commmissorium.

17. Statement 1: The contract of pledge, gives a right to the creditor to retain the thing in
his possession or in that of a third person to whom it has been delivered, until the debt is
paid.
Statement 2: A pledge shall not take effect against third persons if a description of the
thing pledge and the date of pledge do not appear in a public instrument.

A. Both are true.

B. Both are false.
C. No.1 is true; No. 2 is false.
D. No.1 is false; No. 2 is true.
18. Statement 1: In contracts of pledge, the pledgee is allowed to use the thing pledged.
Statement 2: In case of pledge of animals, their offspring shall pertain to the pledger of
animal pledged and are no longer subject to the pledge, unless stipulated.

A. Both are true.

B. Both are false.
C. No.1 is true; No. 2 is false.
D. No.1 is false; No. 2 is true.

19. Statement 1: In sale of the thing pledged by public auction, pledgee is not allowed to
join the bidding in the 1st auction.
Statement 2: In sale at public auction, the pledged or owner may be bid and shall have a
better right if he should offer the same terms as the highest bidder.

A. Both are true.

B. Both are false.
C. No.1 is true; No. 2 is false.
D. No.1 is false; No. 2 is true.

20. Statement 1: In contracts of pledge, the pledgee is allowed to use the thing pledged.
Statement 2: In case of pledge of animals, their offspring shall pertain to the pledger of
animal pledged and are no longer subject to the pledge, unless stipulated.

A. Both are true.

B. Both are false.
C. No.1 is true; No. 2 is false.
D. No.1 is false; No. 2 is true.

Mortgage

Mortgage
1. 1st. Pactum commisorium is valid if clearly stipulated.
2nd. Mortgage and anticheris are basically solemn contracts.

A. True, True
B. True, False
C. False, True
D. False, False

2. 1st. The subject matter of commodatum may be consumable.

2nd. The subject matter of mutuum may be non-consumable.

A. True, True
B. True, False
C. False, True
D. False, False

3. Contract whereby personal property is recorded in the chattel mortgage registered

as security for the performance of obligation is called:

A. Real Mortgage
B. Chattel Mortgage
C. Pledge
D. Antichresis
4. It is a real estate mortgage in the form of conventional redemption or absolute
sale.

A. Real Estate Mortgage

B. Antichresis
C. Equitable Mortgage
D. Chattel Mortgage

5. 1st. In chattel mortgage, the mortgagor must execute an affidavit of good faith in
order that the mortgage shall be valid against third person.
2nd. A stipulation forbidding the owner from alienating the immovable mortgage
is voidable.

A. True, True
B. True, False
C. False, True
D. False, False

6. 1st. A stipulation in a contract of mortgage stipulating an upset price, at which the

property may be sold is void.
2nd. Antichresis is void if not in a public instrument.

A. True, True
B. True, False
C. False, True
D. False, False

7. 1st Statement. Antichresis must be in writing and involves only immovables

2nd Statement. In pledge and Recto Law there is no deficiency liability.

A. True, True
B. True, False
C. False, True
D. False, False

8. Zeno sold to Candy a car on installment wherein the latter mortgaged the same car
as security for the price. Failing to pay the installments, the mortgage on the car
was foreclosed. Is Candy still liable for any deficiency if the seller fails to recover
in the foreclosure sale?

A. Yes, because it is only in case of pledge is the debtor not liable for any
deficiency
B. Yes, if so stipulated upon by the parties
C. No, unless agreed upon by the parties
D. No, notwithstanding any stipulation to the contrary

9. Diggle mortgaged his parcel of land to Slade as security for a loan. Fearing
foreclosure of the mortgage due to his inability to pay the loan, Diggle sold the land
to Felicity without the consent of Slade. Is the sale valid?
A. No, unless there was prior consent of the mortgage
B. Yes, stipulation prohibiting the sale without the consent of the mortgagee
shall be void
C. Yes, provided the mortgagee was notified before the sale
D. No, if there was stipulation requiring prior consent

10. D owes C a sum of money with M as mortgagor of his land to secure the loan. Is
the mortgage valid even if the mortgagor is not the debtor?
A. Yes, provided the mortgagor or pledgor in case of pledge is the absolute
owner of the property mortgaged or pledged.
B. Yes, provided it is in writing and registered
C. No, the mortgagor/pledgor must be the debtor himself
D. No, unless the mortgagor is a co-debtor

11. In case of doubt whether the contract is a Sale or Real Estate Mortgage, the contract
is a

A. Sale
B. Real Estate Mortgage
C. Sale and Real Estate Mortgage
D. Neither of the two

12. Which of the following is not an indicator that a contract is an Equitable Mortgage?

A. Tax on the property is paid by the seller.

B. Selling price is usually low
C. Possession still belongs to the buyer.
D. Period to redeem has been expire but extension is granted.

13. A stipulation in a contract of pledge, mortgage or antichresis whereby the creditor

is given the power to appropriate for himself the thing given as security of the
principal obligation is not fulfilled.
A. Pacto de retro
B. Pactum constitutum possessorium
C. Pactum commissorium
D. None of the foregoing

14. 1st. If the immovable property is sold, and the amount realized is less than the
mortgage debt, the buyer of mortgaged property is liable to pay the deficiency, if
any.
2nd. A chattel mortgage exists when the personal property is recorded in the chattel
mortgage register as a security for the performance of the obligation.

A. True, True
B. True, False
C. False, True
D. False, False

15. A gets a loan of P1M from B which becomes due on October 1, 2015 and
mortgaged his house as security for the debt. On June 30, 2015, the mortgage
house completely destroyed by fire thru the fault of C. A week later, B demanded
payment from A. Is B’s demand valid?
A. No, the destruction of the house was not thru the fault of A
B. No, the obligation is one with a definite period which is deemed intended for the
benefit of both the debtor and creditor
C. Yes, the debt becomes demandable unless A can give another security equally
satisfactory
D. Yes, the debt becomes demandable even if A can give another security equally
satisfactory

16. In real estate mortgage, the mortgagor can sell the mortgaged property

a. With the consent of the mortgagee in writing

b. Even without the consent of the mortgagee
c. Only with the consent of the mortgagee in writing or orally
d. All of the above

17. One of the following is not a characteristic of real mortgage

a. Accessory contract
b. Real contract
c. Inseparable contract
d. Indivisible contract

18. Mutuum as distinguished from commodatum

A. Essentially gratuitous
B. Loan for consumption
C. Object is generally not consumable
D. Bailor retains the ownership of the thing loaned

19. D constituted a chattel mortgage on his car as security for the loan he obtained from
C of P1M. It was further stipulated that the same mortgage shall secure the payment
of another loan which debtor D may incur in the future. Is the chattel mortgage
valid?
a. The chattel mortgage for both loans is valid.
b. The mortgage for the P1M is the only one valid.
c. The mortgage as regards the future loan is the one valid.
d. The mortgage is extinguished because of the void stipulation on the ground that it
cannot secure a future obligation.

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