BL 3&4

NEGOTIABLE INSTRUMENTS
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.
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.
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. 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. 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
17. 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.
a. 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
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. 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
7. 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
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.
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.
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.
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.
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.
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.
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.
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.
Contract of Sales
1. 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 perfection of the contract
d. Transferred to the buyer upon acceptance of the price.
2. If the material used in the manufacture of the article is more valuable, it is a

contract of sale, and if the labor or skill is more valuable than the material used in
the manufacture of the article, it is a contract for a piece of work. This school of
thought followed:
a. English rule
b. Masachussets rule
c. New York rule
d. Italian rule
3. If redemption is made, which of the following will not be paid by the seller to the
buyer
a. Price made 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 on the price paid by the buyer
4. In which of these cases there no right of legal redemption?
a. Where a co-owner of an undivided immovable sells his Interest to a third
person
b. Where the owner of a rural property one hectare or less sells his property
to a third person who owns other rural land or lands
c. Where the owner of urban land which is so small and so situated that it
cannot be used for a practical purpose sells the same to a third person
d. Where the co-owner of an undivided interest to a third person
5. RR the representative of AA, an absentee, sold the corn with a value of P30, 000
and the oalay with a value of P50, 000 harvested from AA's agriculture farm for a
total price of P50, 000. AA, whose domicile was subsequently known, was
informed of the sale made RR. Based on the foregoing facts, which of the
following statements is incorrect?
a. AA may seek payment of an additional P30, 000 to recover the danages
suffered
b. AA may just seek rescission of the sale of the corn to recover danages he
sustained
c. AA may seek rescission of the sale of the part of the rice to the extent of
the danages he sustained
d. AA may seek the rescission of the total sale recover for the danages he
sustained
6. The justified refusal of the buyer to accept the goods produces the following
effects, except
a. Buyer has no duty to return the goods unless otherwise stipulated
b. Title to the goods does not pass on to him
c. Buyer shall not be obliged to pay the price
d. Buyer is obliged to constitute himself as depositary until he returns the
goods
7. This refers to implied warranty on the part of the seller that he has the right to sell
the thing at the time when Ownership is to pass , and that the buyer from that time
shall have and enjoy legal and peaceful possession of the thing.
a. Warranty against hidden defects
b. Warranty against eviction
c. Warranty of Ownership
d. Warranty of possession
8. Goods still in transit:
a. If the buyer or his agent obtains delivery of the goods before their arrival
at the appointed destination
b. When the carrier acknowledges possession of the goods as bailee for the
buyer after arrival of the goods at the place of destination
c. If the carrier or other bailee wrongfully refuses to deliver the goods to the
buyer or his agent
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.
9. Somera sells to Buen at P50 per gallon 300 gallons of gasoline stored in his
truck's tank which unknown to the parties contains 500 gallons gasoline. What is
the status of the contract of sale between Somera and Buen?
a. The sale is Void because the quantity is more than the quantity sold.
b. The sale is Valid up to 500 gallons of gasoline,.
c. The sale is Valid up to 300 gallons of gasoline. Buen becomes the owner
of 3/5 of the whole stock while Somera becomes the owner of 2/5 thereof
d. The sale is Rescissible because Somera will suffer a lesion of more than
1/4 of the value of the whole stock
10. Cory transferred to Doris a parcel of land for the price of P100, 000, P30, 000 to
be paid in cash and for the difference, she will convey the car worth P70, 000.
What kind of contract is this?
a. Lease of contract
b. Contract of sale
c. Obligation to sell
d. Barter
11. Baldo bought a residential house and lot from Tierra Madre Realty for P250, 000
giving a down payment of P10, 000 and promising to pay a balance of P240,
000 in 20 years in monthly installments of P1, 000. After paying 72 installments,
Baldo defaultedin the payment of the 73rd installments and subsequent ones.
Despite the grace period he had earned, he was not able to make any further
payments. Accordingly, Tierra Madre Realty cancelled the sale. How much cash
surrender value is Baldo entitled to receive?
a. P45, 100
b. P39, 600
c. P34, 600
d. P41, 000
12. S sold to be a residential lot said to be containing an area of 1, 000 square meters
at P10, 000 per square meter. In This connection, which of these is a correct
statement?
a. If the lot should contain 1, 500 square meters, B can reject the excess of
500 square meters, but if he accepts, B should pay for the excess at the
contract rate of P10, 000 per square meters.
b. If the lot should contain 950 square meters only, B can only ask for a
proportionate reduction of the price but not rescission.
c. If the lot should contain 900 square meters, B can choose between
proportionate reduction of the price or rescission of the sale.
d. All of the above
13. One of the following is not a remedy granted to an unpaid seller:
a. Right of stoppage in transitu
b. Right of lien over the goods
c. Right of resale
d. Right to demand a security for the payment of the price
14. In which of the following is there are no Warranty against hidden defects?
a. In a sale by description
b. In a sale by sample
c. In a sale of things sold as second hand
d. In a sale of goods recovered by a patent
e. Both C and D
15. Within What time should be the action to a proportionate reduction of the price or
rescission be filed if the object is immovable property?
a. Within 40 days from delivery
b. Within 6 months from delivery
c. Within 1 year from delivery
d. Within 4 years from delivery
Negotiable Instrument
1. I. Where the instrument is not dated, it will be considered to be dated as of time it
was issued.
II. The liability of an indorser is primary.
a. True, True
b. False, False
c. True, False
d. False, True
2. I. There is payment when a negotiable instrument is delivered and accepted by the
creditor.
II. Creditors are bound to accept checks in payment of the debtor’s obligation.
a. True, True
b. False, False
c. True, False
d. False, True
3. I. Where the instrument is payable to order, the payee must be named or otherwise
indicated therein with reasonable certainty.
II. A check if certified by a bank on which it is drawn, such certification is
equivalent to acceptance, where the holder procures a check to be certified or
accepted the drawer and all indorsers are discharged from liability thereon.
a. True, True
b. False, False
c. True, False
d. False, True
4. I. Where the instrument is negotiated back to a prior party, such as a party may
reissue and further negotiate the same but he is not entitled to enforce payment
thereof against any intervening party to whom he was personally liable.
II. The holder may at any time strike out any indorsement which is not necessary
to his title. The indorser whose signature is struck out, and all subsequent
indorsers, are hereby relieved from liability on the instrument.
a. True, True
b. False, False
c. True, False
d. False, True
5. I. The bank is not liable to the holder, unless and until it accepts.
II. A check is required to be presented for payment within reasonable time after its
issue or the drawer will be discharged from liability thereon to the extent of the
loss caused by the delay.
a. True, True
b. False, False
c. True, False
d. False, True
6. I. 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.
II. A signature by “procuration” operates as notice that the agent has a limited
authority to sign, and the principal is bound only in case the agent in so long
doing within the actual limits of his authority.
a. True, True
b. False, False
c. True, False
d. False, True
7. I. The liability of an acceptor is secondary
II. The drawer’s liability is primary
a. True, True
b. False, False
c. True, False
d. False, True
8. I. Absence or failure of consideration is a matter of defence as against any person
not a holder in due purpose.
II. The indorsement or assignment of the instrument by a corporation or by infant
passes the property therein, notwithstanding that from want of capacity the
corporation or infant may occur no liability thereon.
a. True, True
b. False, False
c. True, False
d. False, True
9. I. An order or promise to pay out of a particular fund is not negotiable.
II. An order or promise to pay is unconditional through coupled with an indication
on particular fund out of which reimbursement is to be made, or particular account
to be debited with the amount.
a. True, True
b. False, False
c. True, False
d. False, True
10. I. The following instrument is negotiable:
“Please pay to Jose Santos or bearer the sum of P60, 000”
(Sgd. Pedro Gil)
II. Fraud in inducement is a real defense.
a. True, True
b. False, False
c. True, False
d. False, True
11. I. An infant or minor’s indorsement is void.
II. In the hands of a holder in due course, valid delivery of negotiable instrument
is a disputable presumption.
a. True, True
b. False, False
c. True, False
d. False, True
12. I. A drawee can be holder in due course.
II. Material alteration just like forgery voids the instrument against any party as
arule.
a. True, True
b. False, False
c. True, False
d. False, True
13. I. Where it cannot be determined in what capacity a person signed a promissory
note, he is deemed a maker.
II. If a note for P10, 000 payable to the order of B is endorsed by B in favour of C
or D, such endorsement is valid.
a. True, True
b. False, False
c. True, False
d. False, True
16. Who among the following is the holder of a negotiable instrument originally
payable to order?
a. The original payee who has negotiated the instrument
b. The indorsee who is in possession of the instrument
c. The possessor of the instrument to whom the instrument was delivered
without any indorsement
d. The indorsee who has negotiated the instrument.
17. If the drawer and the drawee are the same person, the holder may present the
instrument for payment without need of a previous presentment for acceptance. In
such a case, the holder treats it as
a. Non-negotiable instrument
b. Promissory note
c. Letter of credit
d. Check
18. Under the NIL, if the holder has a lien on the instrument which arises either from
a contract or by implication of law, he would be a holder for value to the extent of
a. His successor’s interest
b. His predecessor’s interest
c. The lien in his favour
d. The amount indicated on the instrument’s face
19. In a signature by procuration, the principal is bound only in case the agent acted
within the actual limits of his authority. The signature of the agent in such a case
operates as notice that he has
a. a qualified authority to sign
b. a limited authority to sign
c. a special authority to sign
d. full authority to sig
Pledge
1. Ben pledged his watch to V.Y Domingo Agencia for P5, 000. On due date, Ben
failed to redeem his watch. The pawnshop sold the watch at a public auction to the
highest bidder at P4, 000.
a. The pawnshop can recover the deficiency of P1, 000 from Ben.
b. The pawnshop cannot recover the deficiency of P1, 000 unless there is a
stipulation.
c. The pawnshop cannot recover the deficiency of P1, 000 even if there is a
stipulation.
d. The pawnshop can recover the deficiency of P1, 000 even without
stipulation.
2. This is a stipulation in pledge or mortgage providing that the ownership of the
thing given as security will pass to the pledgee or mortgagee upon default of the
debtor.
a. Constitutum possesorium
b. Pactum commisorium
c. Legal Subrogation
d. Redemption
3. D borrowed P30,000 from C. To secure the debt, D pledged his ring, wristwatch,
and necklace. Before the debt could be paid, C died having X, Y, and Z as heirs.
By agreement among the heirs who inherited the credit, the ring would secure the
share of X of the credit, the wristwatch the share of Y, a necklace the share of Z.
Later, D pays X P10, 000.
a. D can demand the extinguishment of the pledge of the ring
b. X may release the pledge of the ring
c. The pledge of the ring will remain until the shares of Y and Z are paid by
D.
d. D can demand the extinguishment of the pledge of the ring, wristwatch
and necklace because has been partial payment.
4. Cesar pledged his Toyota car to Dan for P100, 000. Cesar was unable to pay the
obligation two (2) months after the obligation became due and demandable.
Wherefore, Dan sold the car at public auction for P80, 000. Can Dan recover the
deficiency of P20, 000 from Cesar?
1st answer: No, he cannot recover the deficiency even if there is a stipulation that
he can.
2nd answer: Yes, he can recover the deficiency even without stipulation.
a. 1st answer correct, 2nd answer wrong
b. Bothe answers are wrong
c. 1st answer wrong, 2nd answer correct
d. Both answers are correct
a.
7. A, B and C obtained a loan from X in the amount of P60, 000. To secure the debt,
A pledged his wristwatch, B, his necklace; and C, his diamond ring. A pays his
share of the debt amounting to P20, 000.00
I. The obligation of A, B and C is solidary
II. The obligation of A, B and C is joint
III. A may demand the return of the wristwatch after payment of his share of the
debt.
a. I and II are true c. I and III are false
b. II and III are true d. II and III are false
8. D pledged his 100 shares of stock of San Miguel Corporation to C to secure his
debt of P5, 000. On due date, D was not able to pay the debt, so C caused the sale
of the shares to sell at auction. The shares of stock were sold at P4, 500.
a. To extinguish the obligation, C may recover the deficiency of P500.00
from D if there is a stipulation to that effect
b. To extinguish the obligation, C may recover the deficiency even if there is
no stipulation to that effect
c. The obligation is extinguished even if there is a deficiency of P500.00.
Accordingly, C can no longer recover the deficiency
d. The obligation is extinguished only if the proceeds of sale amount to P5,
000 or more.
9. This refers to the right of a person to retain a thing until he receives payment of
his claim in the cases provided by law such as one who has executed work on a
movable.
a. Conventional pledge c. Legal pledge
b. Voluntary pledge d. Chattel mortgage
10. Consider the following cases:
I. D owes C P10,000. To secure the debt, D pledged his cell phone. D defaults.
The Cell phone is sold for P9,000 at the public auction.
II. D bought a car for P360,000 from C. The price, which is payable in 12 equal
monthly installments of P30,000, is secured by a chattel mortgage on the car.
After paying 2 installments, D defaults in the payment of 3 installments and the
car s sold at the public auction for P280,000.
The deficiiency is recoverable in

a. Both I and II
b. I only
c. II only
d. No deficiency is recoverable in both I and II
11. Mary Montes and Melany Manalo obtained a loan of P100,000 from Patricia
Palma. The debtors executed a promissory note which reads as follows:
WE PROMISE TO PAY PATRICIA PALMA OR ORDER P100,000 ON APRIL

30, 2016
(Sgd. ) Mary Montes (Sgd. ) Melany Manalo
To secure the loan, Mary Montes pledged her diamond ring, while Melany
Manalo executed a mortgage on her lot.
a. Mary Montes may demand the return of her diamond ring if she pays her
share of the debt, while Melany Manalo’s share remains outstanding.
b. Melany Manalo may demand the cancellation of the mortgage on her lot if
she pays her share of the debt, while Mary Montes’ share remains
outstanding.
c. Both Mary Montes and Melany Manalo must pay the total amount of the
debt before Mary Montes could demand the return of the diamond ring,
and Melany Manalo the cancellation of the mortgage on her lot.
d. Patricia Palma may demand payment of the amount of P100,000 from
either Mary Montes or Melany Manalo.
12. The creation of a lien on the property upto which, it is imposed whichever may
the possesor of the property, to the fulfillment of the the obligation for whose
security it was constittuted refers to the characteristic of a real mortgae being:
a. An accesory contract
b. An indivisible contract
c. An inseparable contract
d. A real property in itself
13. One of the following is not a characteristics of pledge and mortgage
a. Accesory
b. Consensual
c. Gratuitous
d. Onerous
14. Which of the following statements regarding pledge is not correct?
a. A pledge cannot be constituted unless the thing pledged be placed in the
possession of the creditor
b. Pledge is a real contract because it is perfected by delivery of the thing
pledged.
c. Pledge is an accesory contract because it needs a principall oblication to
exist.
d. A pledge cannot be constituted to secure the performance of a voidable or
unenforceable or even a natural obligation.
15. 1st statement. Any stipulation authorizing the pledgee to appropriate the thing
pledged is void and without effect.
2nd statement. If the thing pledged is alienated by pledger, converted by the
pledgee, the ownership and possession is transmitted to the vendee after
alienation.
a. Both are true
b. Both are false
c. 1st is true, 2nd is false
d. 1st is false, 2nd is true
Mortgage
1. This is a situation in pledge or mortgage providing that the ownership of the thing
given as security will pass to the pledgee or mortgagee upon default of the debtor.
a. Constitutum possessorium
b. Pactum commissorium
c. Legal subrogation
d. Redemption
2. It is the right to redeem the property that was mortgaged after it was sold.
a. Equity of redemption
b. Right of redemption
c. Right of subrogation
d. Right of pre-emption
3. One of the following may not be object of a real mortgage.
a. Land, buildings and construction of all kinds adhered to the soil.
b. Fertilizer actually used on a piece of land.
c. Animal houses, pigeon houses or other breeding places intended by the owner
to i.e. permanently attached to the land, including animals therein.
d. Growing fruits that have been gathered from trees planted on land.
4. Real property mortgaged
a. Generally is not possessed by the creditor
b. Cannot be required by the creditor, even if he is in possession for 30 years by
prescription
c. Mortgage cannot appropriate the property for himself, even if stipulated.
d. All of the above.
5. Real mortgage
a. May guarantee future debts
b. Objects are immovable property
c. Is an accessory contract
d. All of the above.
6. X, at Y’s request, executed a Real Estate Mortgage (REM) on his (X’s) land to
secure Y’s loan from Z. Z successfully foreclosed the REM when Y defaulted on
the loan but half of Y’s obligation remained unpaid. May Z sue X to enforce his
right to the deficiency?
a. Yes, but solidary with Y
b. Yes, since X’s deemed to warrant that his land would cover the whole
obligation
c. No, since it’s the buyer at the auction sale who would answer for the
deficiency.
d. No, because X is not Z’s debtor
7. The following is required in order that a chattel mortgage will bind third persons
a. The chattel mortgage must be accompanied by an affidavit of good faith and
recorded at the Chattel Mortgage Register.
b. The chattel mortgage must be in a public instrument showing the description
of the thing mortgaged and the date of the chattel mortgage.
c. It is sufficient that the chattel mortgage be in writing, public or private.
d. The thing mortgaged must be delivered to the creditor.
8. X constituted a chattel mortgage on a car (valued at Php 1 Million) to secure a
P500,000 loan. For the mortgage to be valid, X should have
a. The right to mortgage the car to the extent of half its value.
b. Ownership of the car.
c. Unqualified free disposal of his car.
d. Registered the car in his name.
9. A kind of mortgage which lacks the formalities required by law but nevertheless
shows the intention of the parties to secure the debt with real property is known
as:
a. Conventional mortgage
b. Voluntary mortgage
c. Equitable mortgage
d. Legal mortgage
10. A chattel mortgage may have the following as object, except:
a. Motor vehicles
b. Shares of stocks
c. Vessels
d. Floating docks and structures which are intended by their nature and object to
remain at a fixed price on a river, lake or coast.
11. Recording in the Registry of Property in the appropriate book is required for the
validity of the contract of
a. Chattel mortgage
b. Real mortgage
c. Conventional pledge
d. Antichresis
12. A real mortgage
a. Confers ownership of the mortgaged property in the mortgagee upon its
constitution
b. Creates encumbrance on real property
c. Confers ownership of the mortgaged property in the mortgagee if the principal
obligation it secures id not paid on due date
d. Confers ownership of the mortgaged property in the mortgagee upon default
of the debtor if the parties stipulated about it.
13. I. A mortgage on real property is a real property by itself.
II. Movables may be the object of real property by stipulation of the parties.
a. True, True
b. False, False
c. True, False
d. False, True
14. One of the ff. is not a characteristic of real mortgage
a. Accessory contract
b. Real contract
c. Inseparable contract
d. Indivisible contact
15. The price stipulation 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
16. In general, for a chattel mortgage to be binding between the parties, the same must
be recorded in the Chattel Mortgage of the province where the
a. Mortgagor resides
b. Mortgaged property is located
c. Mortgagor resides and where the property is located
d. Mortgagor and mortgagee resides and where the property is located
17. A sale with right to repurchase differs from real mortgage in that sale with right of
repurchase
a. There is no transfer of ownership of the property
b. A security is constituted on the property
c. The contract is indivisible
d. That is generally a transfer of possession of property
18. 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 for the
purpose of fraud.
a. Affidavit of good moral character
b. Affidavit of merit
c. Affidavit of good faith
d. Affidavit of trust
ACCTG 161 – GROUP 8

AMPONGAN AND ABAÑO MCQS
SALES
1. Ababao and Bancaso entered into a “contract to sell” in private writing involving
a specific parcel of land worth P2M. Bancaso paid 50% of the purchase price,
balance payable in 3 years. Ababao delivered the land to Bancaso. What is the
effect of the delivery of the land to Bancaso?
a. Bancaso is the owner because there was delivery already.
b. Bancaso can compel Ababao to execute a deed of sale in a public
instrument.
c. The partial payment made Bancaso the owner of the land.
d. Ababao is still the owner because the price is not yet fully paid.
2. Dacion en pago is distinguished from sale

a. The object is always existing and specific.
b. There is greater freedom in fixing the price.
c. There is no pre-existing obligation.
d. The cause is the price.
3. Mimmodto entered the Sugbo Restaurant and ordered a dozen fresh oysters in
their shell. While eating, Mimmodto noticed an almost perfect pearl in one of the
shells. He is about to take it when Maliksi, the restaurant owner, claims the pearl.
To whom does the pearl belong?
a. To Mimmodto because the contract of sale was already perfected.
b. To Maliksi, because Mimmodto has not yet paid the food he ordered.
c. To the State because the pearl is considered as national treasure.
d. To both Mimmodto and Maliksi, each of them being entitled to half of its
price.
4. Mr. Marical Bonifacio orders for his workers 1,000 pieces of T-shirts ranging in
size from small to large from Magellan Garments Mfg. Corp. The specified sizes,
although not available, are manufactured by said corporation and consigned to its
sales outlets regularly. The contract entered into by Mr. Bonaficio with the
Magellan 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.
5. Shaolo sold to Balo his land worth P2M for P1.5M only, thus resulting to
inadequate price. The sale is:
a. Rescissible
b. Voidable
c. Unenforceable
d. Valid
6. Sawana offered his car to Bacopa with the understanding that the price shall be at
the discretion of Bacopa. As agreed upon, Bacopa fixed the price at P350,000
although its fair market value was P250,000 only. It is clear therefore that the
price fixed is beneficial to Sawana. Before acceptance of the price by Sawana, is
there already a sale?
a. No perfected sale as there was no consent on the price.
b. There was a perfected sale, the amount was already fixed by the buyer and
will surely be accepted by the seller.
c. Yes, because the fixing of the price by Bacopa is properly authorized by
Sawana.
d. Yes but it is voidable due to mistake committed by Bacopa in the fixing of
the price.
7. Solera sold and delivered her diamond ring to Ballesteros. It was agreed upon that
within 10 days Ballesteros will state and fix the price. On the 10th day, Ballesteros
called upon by telephone Solera and stated the price P20,000 which Solera agreed.
Is the sale perfected?
a. No, at the time of the sale the price was not fixed.
b. Yes, at the time of the sale the price was already known.
c. Yes, the price as stated and fixed by the buyer was accepted by the seller.
d. No, the price was left to the discretion of one of the parties.
8. Which is not correct? In a sale by auction

e. The auctioneer may withdraw the goods before the hammer falls whether
or not the auction has been announced to be without recourse.
f. The sale is perfected when the auctioneer announces its perfection by the
fall of the hammer.
g. The seller may bid provided such right was reserved and notice was given
to the other bidders.
h. Every bidding is merely an offer, and therefore before it is accepted, it
may be withdrawn.
9. Which of the following statement is incorrect?

e. 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.
f. The seller need not be the owner of the thing sold at the perfection of the
sale.
g. There may be a transfer of ownership over the thing even if the seller had
not actually delivered the thing sold to the buyer.
h. In a contract of sale the buyer becomes the owner of the thing sold upon
full payment of the purchase price.
10. The following, except one, are the alternative remedies 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 goods.
d. Keep the goods and set up against seller by way of recoupment in price.
11. Sayangco sold a residential land to Bitao. Bitao paid the consideration. When
Bitao wanted to register the sale at the Register of Deeds, the latter refused to
register it and required the presentation of the certificate of capital gains tax
payment. What can Bitao do?
a. Bitao may sue Sayangco to refund the consideration paid by Bitao under
the maxim “no one shall enrich himself at the expense of another.”
b. Baitao cannot compel Sayangco to return the selling price because the
contract is not enforceable.
c. Bitao may possess the residential land as a buyer in good faith.
d. Bitao may compel Sayangco to pay the capital gains tax and secure the
Certificate of the Capital Gains Tax payment.
12. Statement 1: The vendor is responsible to the vendee for any hidden faults or
defects in the thing sold, even though he was not aware thereof.
Statement 2: When the price of a sale with right to repurchase is unusually

inadequate, the contract shall be presumed to be a pacto de retro.
a. True, True
b. True, False
c. False, False
d. False, True
13. Where it is stipulated that the repurchase of the property sold could be made at
any time, the repurchase shall be exercised
a. Within four years from the date of the contract.
b. Within ten years from the date of the contract.
c. After ten years from the date of the contract.
d. None of them.
14. Arines, Babagay, and Casyao are co-owners in equal shares of a parcel of land.
Casyao sold his undivided interest to his son, Dava. A week later, Arines and
Babagay served notice on Dava of their intention to redeem the portion sold.
However, Dava refused to allow redemption arguing that being the son of Casyao,
he was not a third person in contemplation of the law with respect to redemption
by co-owners. Is the refusal of Dava justified?
a. No, the refusal of Dava is not justified because he is still a third person as
regards redemption by co-owners.
b. No, Dava’s refusal is unjustified because co-owners can redeem the share
sold even if not sold to a third person.
c. Yes, justified because he is not a third person being the heir of Casyao
from whom he will eventually inherit the share in the land.
d. No, because co-owners can redeem the share even if sold to a co-owner.
1. An accessory real contract whereby one person delivers to another a movable for
the purpose of securing a principal obligation, with the understanding that when
the obligation is fulfilled the thing shall be returned by the creditor to the debtor
together with all its fruits and accessions
a. Real mortgage
b. Pledge
c. Chattel mortgage
d. Antichresis
2. Statement 1: If the thing is returned to the pledger, the principal obligation is

extinguished.
Statement 2: A contract of pledge is consensual which is perfected from the time

the thing pledged is placed in the possession of the creditor, or of a third person
by common agreement.
a. Both statements are false.
b. Both statements are true.
c. Statement 1 is true, while No. 2 is false.
d. Statement 1 is false, while No. 2 is true.
3. Which of the following is not a common requisite to pledge and mortgage?

a. Must be placed in the possession of the creditor
b. Accessory contract
c. Absolute owner of the property
d. Property may be alienated when the principal obligation becomes due for
payment to the creditor
4. Which of the following is not valid as against the contracting parties

a. Mortgage which is not registered with the Register of Deeds.
b. Pledge which does not describe in a public document the thing pledged
and the date of the pledge.
c. In a contract of pledge where there is no delivery of the movable.
d. Chattel mortgage which does not contain affidavit of good faith.
5. Abunda borrowed P90,000 from Bano secured by a pledged of his laptop

computer worth P50,000 and of his rolex watch worth P50,000. When the balance
of the debt was only P50,000, Abunda failed to pay.
a. Bano can sell either the laptop computer of the watch at the option of
Abunda.
b. Bano can sell either the laptop computer or the watch at his option.
c. Bano has to sell both the laptop computer and the watch.
d. Bano has the option to sell either of the two objects even if the contract
stipulates that he should sell only the watch.
6. A owes B P5,000 and as security, A pledged his diamond ring. Later, A borrowed
again P2,000. As a result –
a. B has a right to retain the thing until the P7,000 is paid.
b. B has a right to retain the thing until the P5,000 is paid.
c. A has a right to demand that the thing be deposited with a third person.
d. B has the right to use the thing pledged until the pledge effects payment of
the obligation.
7. Should there be reasonable ground to fear the destruction or impairment of the

thing pledged, without the fault of the pledgee, what is the obligation of the
pledgee and what then is the right of the pledger?
1st Answer – The pledgee is bound to advice the pledgor, without delay, of any
danger to the thing pledged.
2 Answer – The pledgor can demand the return of the thing upom offering
nd
another thing in pledge which of the same kind as the former and not of
inferior quality.
a. Both answer are correct

b. Both answers are wrong
c. Only the first answer is correct
d. Only the second answer is correct
8. A pledges his ring to F to secure a P10,000 obligation payable in two years. One
year thereafter, F gives a note in writing to A stating that the debt need not be
secured and that A may get the ring back at her most convenient time. As a
result –
a. The principal obligation and the contract of pledge are both extinguished.
b. Only the principal obligation is extinguished but not the contract of pledge
because A did not get back the ring.
c. Both the principal obligations and the contract of pledge are not
extinguished because A did not get back the ring.
d. The pledge is extinguished and F is constituted as a depositary.
9. Apurado borrowed P100,000 from Bayaban. The first P50,000 is secured by a

pledge of Apurado’s car while the second P50,000 is secured by a pledge of his
rolex watch. Apurado paid P50,000.
a. Apurado can demand the return of his car.
b. Apurado can demand the return either of the car or of his rolex watch at
his option.
c. Apurado cannot demand either of the car or of his rolex watch because a
contract of pledge is indivisible.
d. Apurado can demand the return either of his car or of his rolex watch at
the option of Bayaban.
10. A pledged his watch for P20,000. A failed to pay his obligation. B sold it at public
auction for P18,000. Can B recover the deficiency?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, unless there is stipulation
11. Using the preceding number, if the sale is for P22,000, can A recover the excess?
a. Yes, even without stipulation
b. Yes, if there is stipulation
c. No, even if there is stipulation
d. No, stipulation allowing recovery is void
12. Which of the following is not required a formality in an auction sale?

a. The pledgor or owner and the pledgee must bid.
b. It must be made with the help of a notary public.
c. The debt is already due but was not paid on time.
d. Notice to the debtor and the owner of the thing pledged before and after
the public auction.
13. All of the following, except one, are formalities required to effect a valid auction
sale of the thing pledge.
a. Debt is already due.
b. Intervention of a notary public.
c. Payment of the principal debt.
d. Notice to debtor or owner stating the amount for which the public sale is to
be held.
14. The rule on pactuum commissorium does not apply to –

a. Antichresis
b. Pledge
c. Real mortgage
d. Commodatum
15. D borrowed from B P10,000. D offered his right by way of pledge. It was
expressly stipulated that upon non-payment of the debt on time, the ring would
belong to B. this forfeiture clause has traditionally not been allowed, is called
a. Pacto de retro
b. Pacto commissorio
c. Commodatum
d. Mutuum
e. None of the above
16. Statement 1: The property which has been lawfully pledged to a creditor cannot
be pledged to another as long as the first one subsists.
Statement 2: When the principal obligation becomes due, the things in which
pledge consists may be appropriated for the payment to the creditor, if the debt
is not paid in due time.
a. True, True
b. True, False
c. False, False
d. False, True
17. De Leon owes Candido P10,000. As security, De Leon pledged his horse to
Candido. While in the possession of the latter, the horse gave birth to a pony. Who
is entitled to the pony?
a. De Leon being the owner of the horse.
b. Candido because the horse delivered a pony while in his possession.
c. Candido and shall compensate the price of the pony with the expenses for
the care of the horse; the excess, if any, shall be applied to the principal.
d. De Leon shall be entitled to the pony but it shall be included as pledge in
the absence of a stipulation.
MORTGAGES
1. Statement 1: A mortgage on real property is by itself a real property also.
Statement 2: In the absence of a stipulation, a mortgage on the land will include

future houses that may be built thereon.
a. True, True
b. True, False
c. False, False
d. False, True
2. Real estate mortgage

a. has for its object movables as well as immovable.
b. is perfected the moment the contract is registered with the Registry of
Property.
c. is inseparable because the mortgage directly and immediately subjects the
property upon which it is imposed, whoever the possessor may be, to the
fulfillment of the obligation for whose security it was constituted.
d. entitles the mortgagee to the fruits of the thing mortgaged.
3. Antonio borrowed one (1) kilo of shabu from Bayrante secured by a mortgage of
his land. What is the status of the mortgage?
Amaranto obtained a debt of P10,000 from Busalla and mortgaged the coconut
land owned by Cantoria in Quezon City without the knowledge of the owner.
What is the status of the mortgage?
a. Valid, Void
b. Valid, Valid
c. Void, Valid
d. Void, Void
4. Alakdan and Barican are co-owners (in equal share) of a parcel of land. May
Barican mortgage his share in the property?
a. Yes, but he should secure consent of his co-owner.
b. Yes, even without the consent of the co-owner.
c. No, because the contract of mortgage is indivisible.
d. No, because the portion of the land owned by Barican is not identifiable.
5. Real estate mortgage as distinguished from pledge

a. The debtor is entitled to the excess of the proceeds of stipulated.
b. The debtor shall not be entitled to the excess of the proceeds.
c. The creditor is not entitled to the excess of the proceeds.
d. The creditor cannot recover deficiency.
6. D borrowed P200,000 from C, and as security, he mortgaged his parcel of land.
Unable to pay, C foreclosed the mortgage and sold it at a public auction.
Question 1: Assuming that the land was sold for P150,000 only, can C collect
deficiency from D?
Question 2: Assuming that the land was sold for P220,000, is C entitled to the
excess?
a. Yes, Yes
b. Yes, No
c. No, No
d. No, Yes
7. Basacalat bought from Salaysay a mortgaged property. If the property is

foreclosed because of Salaysay’s failure to pay, who will be responsible for the
deficiency judgment?
a. Basacalat
b. Basacalat even if he does not want to assume the obligation.
c. Salaysay of Basacalat does not want to assume the mortgage obligation.
d. Salaysay because the buyer does not generally assume the mortgage
obligation.
8. In real estate mortgage, the following rules are valid, except one:
a. A stipulation in the mortgage contract prohibiting the owner from
alienating the immovable is valid.
b. The mortgagee 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 or mortgage credit is not registered, it is still valid between
parties.
9. Which of the following is not a source of Chattel Mortgage Law?

a. Revised Penal Code
b. Civil Code
c. Chattel Mortgage Law
d. 1986 Constitution
10. Personal properties that can be mortgaged under the Chattel Mortgage Law
a. shares of stock
b. ungathered fruits or products
c. interest in business
d. all of the above
11. A chattel mortgage is valid between the parties even without an affidavit of good
faith.
The mortgagee has the right to take possession of the chattel mortgaged upon
default of the mortgagor.
a. True, True
b. True, False
c. False, False
d. False, True
12. May a leasehold improvement constructed on a rented land be the subject of a

chattel mortgage?
a. No, if the mortgagor is the lessee.
b. Yes, if the mortgagor is the lessor.
c. No, because a leasehold improvement is a real property.
d. Yes, if the mortgagor and the mortgagee agree and no third persons are
prejudiced.
13. Attila borrowed P25,000 from Borongan and delivered his ring to Borongan as
security. If the accessory contract is made orally it is a
a. Chattel mortgage
b. Pledge
c. Real mortgage
d. Antichresis
14. Chattel mortgage as 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 extinguishes the obligation.
c. The delivery of the personal property is necessary.
d. The registration of the property in the Registry of Property is necessary.
15. An oath in a contract of chattel mortgage wherein the parties severally swears that
the mortgage is made for the purpose of securing the obligation specified in the
conditions thereof, and for no other purpose, and that the same is a just and valid
obligation, and one not entered into for the purpose of fraud is
a. Oath of affirmation
b. Quaker Oath
c. Oath of office
d. Affidavit of good faith
16. Which of the following statements 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 contract is not valid.
17. A mortgaged his car to B for P200,000. A failed to pay his obligation. B sold it at
a public auction for P180,000. Can B recover the deficiency?
a. Yes, even without stipulation.
b. Yes, only if there is stipulation.
c. No, even if there is stipulation.
d. No, unless there is stipulation.
18. Using the preceding number, if the sale is for P220,000, can A recover the excess?
a. Yes, even without stipulation.
b. Yes, only if there is stipulation.
c. No, even if there is stipulation.
d. No, unless there is stipulation.
1. A check drawn by the bank upon itself and payable at a third person
a. Certified check
b. Manager’s check
c. Traveler’s check
d. Crossed check
2. Under the Negotiable Instruments Law, certificate of stock is not a negotiable

instrument because it lacks the requisites of:
a. It must contain an unconditional promise or order to pay a sum certain in
money.
b. It must be payable on demand or at a fixed or determinable future time.
c. It must be payable to order or bearer.
d. It must be in writing and signed by the maker or drawer.
3. Can a bill of exchange qualify as a negotiable instrument if –

I. It is not dated
II. The day and the month but not the year of its maturity is given.
III. It is payable to cash
IV. It names two alternative drawees
I II IIIIV
a. Yes Yes Yes No
b. Yes No Yes No
c. No No Yes Yes
d. No Yes No No
4. “I promise to pay to the order of X P10,000 30 days after date”: (Sgd) Y, dated
blank.
1st rule: The maturity date of the above promissory note will be counted 30 days
from the date of issue of the instrument.
“Pay to the order of X P10,000, 30 days after sight:” To Y (Sgd) Z, dated
10/15/16.
2nd rule: the maturity of the above promissory note will be counted 30 days from
the date of the instrument.
a. Both rules are wrong

b. Both rules are correct
c. 1st rule correct, 2nd rule wrong.
d. 1st rule wrong, 2nd rule correct
5. A check for P100,000 was drawn against drawee bank and made payable to ABC
Marketing or order. The check was deposited with payee’s account at ZYX Bank
with then sent the check for clearing to drawee bank.
May the drawee bank refuse to honor the check on ground that the serial number
thereof had been altered?
a. Yes, since the serial number is an item which is essential requisite for
negotiability.
b. Yes, because the alteration of the serial number is a material alteration.
c. No, since the serial number is not an essential requisite for negotiability
and its alteration is not a material alteration.
d. No, since the serial number is not an essential requisite for negotiability
even if its alteration is a material alteration.
6. Erika issued a negotiable promissory note and authorized Max to fill up the
amount in blank up to P50,000 only. However, Max filled it up to P75,000 and
negotiated the note to Warren, a holder in due course.
Which of the following is false?
a. Erika is liable only to Warren up to P50,000.
b. If Erika dishonors the note, Max is liable to Warren for the full amount of
the note.
c. If the note is presented to Erika, she is liable to Warren for P75,000.
d. Both Erika and Max can be held liable for the full amount of the note.
7. “Pay to Maria Ramos, notice of dishonor waived” is an example of:

a. Special indorsement
b. Facultative indorsement
d. Restrictive indorsement
8. Indorsement 1: Pay to Pepiwan and Pepito.

Indorsement 2: Pay to Pepiwan or Pepito.
In the above situations, the indorsement of the instrument is valid if the endorser
is:
Indorsement 1 Indorsement 2
a. Pepiwan and Pepito Pepito
b. Pepiwan and Pepito Pepiwan and Pepito
c. Pepiwan Pepiwan and Pepito
d. Pepito Pepiwan only
9. Eva issued to Imelda a check in the amount of P50,000 postdated September 3,

2016, as a security for a diamond ring to be sold on commission. On August 15,
2016, Imelda negotiated the check to MR Investment which paid the amount of
P40,000 to her.
Eva failed to sell the ring, so she returned it to Imelda on August 29, 2016 but
Imelda is unable to retrieve the check.
a. Eva can withdraw her funds from the drawee bank so that the holder
would not encash the check
b. The bank can be advised by Eva to refuse encashment.
c. The fact that the check was issued merely as security is not a ground to
discharge the check as against MR Investment, a holder in due course.
d. The check can be discharged due to an absence of consideration.
10. Xyra obtains the signature of Ytel for autograph purposes. Xyra writes a
negotiable promissory note above Ytel’s signature. The note was validly
negotiated to Zuma who is holder in due course. What kind of defense can Ytel
avail against Zuma?
a. Personal defense
b. Real defense
c. Equitable defense
d. Qualified defense
11. Based on the preceding question, which of the following statements is wrong?
a. Ytel is not liable against Zuma because his signature is for autograph
purposes only and not for the purpose of making a promissory note.
b. Zuma can proceed against Xyra but not Ytel.
c. Xyra is liable to Zuma because of his warranty that he has good title to it.
d. Ytel can proceed against Zuma, because the fraud committed is fraud in
inducement, a defense against all hoders.
12. Which of the following is not a personal defense?

a. Absence of consideration
b. Forgery of a signature
c. Non-delivery of a complete instrument
d. Failure of consideration
13. Secondarily liable

a. Maker of a promissory note
b. Acceptor of a bill of exchange
c. Drawee
d. Drawer of a bill
14. Which of the following is not a second party?

a. Acceptor for honor
b. Drawer
c. Payor
d. Endorser
15. Domogan induces Elma by fraud to make a promissory note payable on demand
to the order of Frudo in the sum of P50,000.
Q1: Can Domogan file an action successfully against Elma for the amount of the
note?
Q2: If Domogan transfer the note to Ganting who pays P50,000 therefor and
acquires the note under circumstances that make Ganting a holder in due course,
can Ganting file an action successfully against Elma for the amount of the note?
Q3: If Elma can show that the fraud committed by Domogan is fraud in factum,
can he prevent recovery even if the holder is a holder in due course?
Q1 Q2 Q3
a. Yes No Yes
b. Yes No No
c. No Yes Yes
d. No Yes No
16. Atoy issued a bearer note to Boy. The note is negotiated by delivery by Boy to
Cris, Cris to Doc, Doc to Ely, Ely to Fe, the holder. Fe can hold liable
a. Cris b. Atoy
c. Doc d. Boy
1. When the instrument is completed but undelivered, delivery is presumed to have
been made in favor of a holder in due course, the presumption is
A Pro tanto B Prima facie C. Conclusive D. None of these
. .
2. This is not negotiable

A. I promise to pay to the order of myself P10 000. Sgd. A
B. Pay to the order of X, Y and Z P10 000. To B. Sgd. A
C. I promise to pay to order P10 000. Sgd. A
D. Pay to the order of the Commissioner of Internal Revenue P10 000. To ABC Bank. Sgd.
A
3. A holder in due course has the following rights, except

A. He holds the instrument free from defects of title of prior parties
B. Free from defenses of prior parties among themselves
C. Enforce payment against all parties liable thereon
D. Holds the instrument as if it were non negotiable
4. In a blank endorsement, the endorses renders himself

A. Primarily liable C. Solidarily liable
B. Secondarily liable D. Subsidiarily liable
5. Real and personal defenses may be raised between

A. Immediate parties C. Intervening parties
B. Remote parties D. Subsequent parties
6. M makes a negotiable promissory note for P10 000 with the name of the payable in
blank. The note is stolen by P who inserts his name as payees and then endorse the
note to A, then A to B, and B to C, who is a holder in due course. On maturity, C
cannot enforce the note against
A M B P C. A D. B
. .
7. Every negotiable instrument is presumed to have been issued for a valuable
consideration. The presumption is
A Prima facie B Conclusive C. Absolute D. Final
. .
8. Omissions that do not affect the negotiability of an instrument, except

A. It is not dated
B. Does not specify the value given
C. Does not specify the place where it is drawn
D. Does not name the payee where the instrument is payable to order
9. The endorses who simply signs his name renders himself liable to all subsequent
holders as
A. Primarily liable C. Secondarily liable
B. Solidarily liable D. Subsidiarily liable
10. There is no difference between a holder in due course and one who is not, since as
regards them, real and personal defenses may always be raised if
A. Intervening parties C. Immediate parties
B. Remote parties D. Subsequent parties
11. This is a personal defense

A. Absolute defense C. Real defense
B. Equitable defense D. National defense
12. A note reads “I promised to pay or order P1 000, 30 days after B receives the
proceeds of his loan from ABC Banks, Sgd. A.” The instrument is
A. Subject to a condition
B. Payable at a determinable future time
C. Payable on demand
D. Non-negotiable because the payment is indefinite
13. The drawee bank may not refuse to pay checks drawn if
A. If there is a “stop payment” issued by the drawer
B. If the drawer is solvent
C. If the drawer’s is deposits is insufficient
D. When the bank receives notice of the drawer’s death
14. Which of the following is not negotiable?

A. Documentary Bill of Exchange C. Certificate of deposit
B. Clean bill of exchange D. Postal money order
SALES
1. Warranties are essential elements of sales.
The unpaid seller cannot recover the thing sold from an innocent purchaser of value.
A. True, true C. False, false
B. True, false D. False, true
2. S offered his car to B for P1M and giving the latter one week to decide. B in turn
gave S P1 000.00. In this case, there is
A. Contract of sale of the car with the P1 000.00 as earnest money.
B. Contract of option with the P1 000.00 as option money.
C. Contract of sell of the car at B’s option.
D. Contract to sell of the car at S’s option.
3. A contract of sale of vain hope or expectancy is voidable at the option of the buyer
and the action for annulment brought within the perspective period provided by law.
The sale of a mere hope or expectancy is deemed subject to the condition that the
thing will come into existence.
4. A sold B’s car in his (A’s) name to C without any authority from B. The contract of
sale is
A Rescissible B Voidable C. Unenforceable D. Valid
. .
5. A sold B’s car in the name of B without any authority to C. The sale is:
. .
6. A sold B’s car with authority to sell but sold it in his (A’s) name. The contract is
. .
7. A sold his land to B verbally. The sale is:

A Rescissible B Voidable C. Unenforceable D. Void
. .
8. A, as agent of P with oral authority, sold P’s land in a public instrument. The sale is:
. .
9. With written authority from his principal, the agent sold verbally the land of the
principal. The sale is:
. .
10. Without authority from B, A sold the former’s land in B’s name. The sale is
. .
11. Without authority from B, A sold the former’s house in writing. The sale is:
. .
12. A, with oral authority from P, sold the latter’s house in writing. The sale is:
. .
13. Without authority from B, A sold the former’s house in writing. The sale is:
. .
14. In “sale or return”, the buyer becomes owner of the thing upon delivery while if “on
approval, trail or satisfaction”, after approval, express or implied.
Sale between husband and wife is void, unless there is separation of property between
them in the same way that universal partnership between them is also void.
PLEDGE
2. This is not a characteristic of pledge
A Bilateral B Nominate C. Real D. Consensual
. .
3. The pledge has a right to the reimbursement of the expenses for its preservation, and
is liable for its loss or deterioration.
If through the negligence of the pledgee, the thing pledged is in danger of being
impaired, the pledger may require the pledgee that the thing be deposited with a third
person.
4. D is indebted to C in the amount of P200 000 and delivers to C his diamond ring by
way of pledge. If D sells the same diamond ring to T, when will T acquire ownership
of the same?
A. From the time the sale is perfected between D and T
B. From the time T pays the price to D
C. From the time C consent to the sale between D and T
D. From the time T obtains actual possession of the diamond ring
8. Chattel mortgage as distinguished from pacto de retro sale

A. A principal and independent contract
B. The title and possession are transferred to the vendee
C. Cannot appropriate to himself the property mortgaged, nor dispose of it
D. Seller may exercise the right to repurchase
12. A pledge created by the agreement of the parties

A. Legal pledge
B. Equitable Pledge
C. Conventional Pledge
D. None of the above
13. A pledge created by the operation of law

A. Legal pledge
B. Equitable Pledge
C. Conventional Pledge
14. A third person may pledge his property to secure another person’s debt.
A pledge is divisible if there are several debtors who are jointly bound.
16. Incorporeal rights such as shares of stock may be the object of pledge.
Generally, the debtor/pledgor may alienate the thing pledged without the pledgee’s
consent
17. The thing pledged may be delivered to a third person by the agreement of the debtor
and creditor.
Pledge shall extend to the fruits of the thing pledged unless there is stipulation to the
contrary.
18. The character of pledge whereby a lien is created on the property pledged, which lien
continues until the obligation it secures has been fully paid.
A. Inseparability
B. Indivisibility
C. Both A and B
D. Neither A or B
19. The stipulation in conventional pledge which entitles the creditor to recover
deficiency or the debtor to claim excess from proceeds of sale of pledged item is:
A Valid B Voidable C. Unenforceable D. Void
. .
MORTGAGE
1. D mortgaged his car on C as security for a loan. Failing in the payment of the loan, C
foreclosed the chattel mortgage and sold the car at public auction. In case of
deficiency, is D liable for it?
A. Yes, in the absence of contrary stipulation
B. No, because it would be unjust enrichment on the part of the creditor
C. Yes, if so agreed upon by the parties
D. No, unless stipulated
2. D mortgaged his parcel of land to C as security for a loan. Fearing foreclosure of the
mortgage due to his inability to pay the loan, D sold the land to X without the consent
of C. 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 mortgage was notified before the sale
D. No, if there was stipulation requiring prior consent
3. 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 is the absolute owner of the property mortgaged or pledged
C. No, the mortgagor/pledger must be the debtor himself
4. A borrowed from C P1 000 000 to secure the payment of which the former verbally
agreed to deliver his 4 hectares agricultural land by way of antichresis and to pay 12%
interest per annum. The contract of loan and antichresis
A. Are both valid
B. Both null and void
C. The loan is valid but the antichresis is null and void
D. The contract of antichresis is valid, but he loan is null and void
5. A borrowed P50 000 from B and offered his land by way of a mortgage. If it is
stipulated in the contract that if A fails to pay the debt on time, B shall become the
owner of the house, the stipulation is
A. Valid if it has traditionally been allowed
B. Null and void because it is a pacto comisorio
C. Void because it is equivalent to alienation of property in favor of the creditor
D. Valid because the house would automatically serve as payment for the land
6. 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 against the law
C. Y would now become the owner but with the right to redemption by X
D. Y would not become the owner if X annuls the voidable agreement
7. Alcomendas mortgaged his house and lot in Quezon City to Bongoran. May
Alcomendas sell the house and lot to Cabalquinto?
A. No, otherwise the sale is void
B. Yes, if there is no stipulation forbidding the owner from selling the mortgaged property
C. No, if there is a stipulation forbidding the owner from selling the mortgaged property
D. Yes, even if there is a stipulation forbidding the owner from selling the mortgaged
property
8. Alfelor borrowed P50 000 from Bayani and as security for its payment mortgaged his
car to Bayani. Upon failure to pay, Bayani sold the mortgaged chattel but the
proceeds did not fully satisfy the secured debt. Can the mortgagee recover the
deficiency from the mortgagor?
A. No, the provisions of pledge prohibiting recovery will apply
B. No, the provisions of Recto Law will apply
C. Yes, there is no such prohibition under the Civil Code although prohibited under the
Chattel Mortgage Law
D. Yes, there is no such prohibition under the Civil Code and in the Chattel Mortgage Law
11. For the validity of antichresis, the contract must be

A. In writing whether public or private
B. In a public instrument
C. In any form, whether oral or written
D. May be inferred from the conduct of the parties
12. As a general rule, any deficiency in the foreclosure sale may be recovered in the
following contracts, except in:
A. Chattel mortgage
B. Real mortgage
C. Conventional pledge
D. Antichresis
17. A mortgage constituted upon an immovable to secure an obligation.

A. Chattel Mortgage
B. Real Estate Mortgage
C. Antichresis
18. 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 is the absolute owner of the property mortgaged or pledged
C. No, the mortgagor/pledger must be the debtor himself
SORIANO – FINAL MCQs
NEGOTIABLE INSTRUMENT
1. An indorsement where the indorser signs only his name at the back of the
instrument is a:
a. Special indorsement
b. Blank indorsement
d. Restrictive indorsement
2. An indorsement where the indorser waives the benefit of any law intended for his
protection is known as:
a. An absolute indorsement
b. A facultative indorsement
c. A conditional indorsement
d. A successive indorsement
3. Which of the following instrument is negotiable?

a. Treasury warrant
b. Postal money order
c. Letter of credit
d. Trade acceptance
4. A partly secondary liable is discharged through any of the following means,

except by the:
a. Intentional cancellation of his signature by the holder
b. Discharge of a prior party
c. Release of the principal debtor
d. Extension of the time of payment which is assented to by such party
secondarily liable
5. Which of the following does not discharge the instrument?

a. Payment in due course by the accommodated party
b. Intentional cancellation of the instrument by the holder
c. When the principal debtor becomes the holder n his own right before maturity
d. Payment in due course by or on behalf of the principal debtor
6. Which of the following omissions on the face of an instrument will render it

non-negotiable?
a. The omission of the date of issue
b. The omission of any statement that value has been given
c. The omission of the place where the instrument was drawn
d. The omission of the signature of the maker above his typewritten name
7. Which of the following may be raised as defense against any holder?

a. Want of consideration
b. Want of delivery of complete instrument
c. Insertion of a wrong date
d. Want of delivery of an incomplete instrument
8. The acceptor, by accepting the instrument, admits the following, except the:
a. Existence of the payee
b. Capacity of the payee to indorse
c. Genuineness of the drawer’s signature
d. Right of the holder to enforce payment of the instrument
9. Which of the following indorsements is a qualified indorsement?

a. “Pay to Angelo Amores for collection”
b. “Pay to Angelo Amores in trust for Teofilo Tangco.”
c. “Pay to Angelo Amores. Indorser not holden.”
d. “Pay to Angelo Amores. Notice of dishonor waived.”
10. A holder is still a holder in due course although:

a. He received the instrument after it has become overdue but he has no
knowledge of it
b. He received the instrument after it was dishonored and he has no notice of
such dishonor
c. He did not give any value for it
d. The instrument was not complete and regular on its face
11. The time within which the drawee is allowed to give his acceptance is:
a. 12 hours
b. 24 hours
c. 48 hours
d. 72 hours
12. An acceptance for honor which does not expressly state for whose honor it is
made is deemed to be for the honor of the:
a. Drawee
b. Drawer
c. Acceptor
d. Payee
SALES
4. The following items pertain to either a contract of sale or contract to sell.

I. Ownership of the thing sold is transferred upon delivery.
II. Ownership of the thing is transferred to the buyer at some future time.
III. The risk of loss is on the buyer.
IV. The risk of loss is on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.
5. The following items pertain to either emptio rei speratae or emptio spei.
I. The sale of a future thing.
II. The sale of hope or expectancy.
III. The sale of a present thing.
IV. The thing sold must come into existence.
Based on the above information, which of the following is correct?
a. Items I and III pertain to emptio rei spearatae.
b. Items II and III pertain to emptio spei.
c. Items II and III pertain to emptio rei spearatae.
d. Items III and IV pertain to emptio spei.
6. It refers to the delivery of the thing sold from hand to hand in case of movables, or the
taking of possession with respect to immovables, in the presence and with the consent of
the vendor.
a. Actual or real delivery
b. Traditio constitutum possessorium
c. Traditio longa manu
d. Traditio brevi manu
7. In one of the following cases, the ownership of the thing object of the contract is
transferred to the other party upon delivery.
a. Contract to sell
b. Agency to sell
c. Sale or return
d. Sale on approval
8. A sum of money paid, or a thing delivered upon the making of a contract for the sale of
goods, to bind the bargain, the delivery and acceptance of which makes the final assent of
both parties to the contract.
a. Option money
b. Earnest money
c. Reservation money
d. Down payment
9. The unpaid seller, in addition to his right to retain the goods while he is in possession
of them, has the following rights, except the right:
a. of stoppage in transit
b. to resell the goods
c. to rescind the sale
d. to bid when the goods are resold
10. These statements are presented to you for evaluation:

I. Option money is part of the purchase price.
II. Earnest money is proof of the perfection of the contract of sale.
In your evaluation of the said statements:
a. Both are true.
b. Both are false.
c. Only I is true.
d. Only II is true.
11. A sale of husband and wife is valid in which of the following cases?
a. When a separation of property has been agreed upon in the marriage settlements or
when there has been a judicial separation of property.
b. When the price of the sale is a moderate amount.
c. When the object of the sale is a necessary such as food or clothing.
d. When the spouses are living separately.
12. The following are certain modes of acquisition of property:

I. Purchase
II. Dacion en pago
III. Succession
IV. Donation
Legal redemption is available when the transferee acquired the property through:
a. I or II
b. III or IV
c. I or III
d. II or IV
13. What does the assignor of a credit warrant?

a. The legality and existence of the credit.
b. The solvency of the debtor.
c. Both (a) and (b).
d. Neither (a) and (b).
14. D owed C P100,000.00. The debt is evidenced by a promissory note and secured by a
mortgage of D’s lot. Before due date, C assigned his credit right to T by executing a deed
of assignment but without the parties informing D. On due date, T went to D to collect the
debt at which time learned of the assignment.
a. T cannot collect from D because the latter was not informed of the assignment at the
time it was made.
b. T can collect from D but if D cannot pay, T cannot foreclose the mortgage on the lot.
c. T can collect from D but if D cannot pay, T can foreclose the mortgage which is
deemed assigned together with the credit right.
d. T can only go after C, the assignor, since the assignment was without D’s knowledge.
15. A credit right is considered to be in litigation:

a. as soon as a complaint is filed by the creditor against the debtor.
b. when the debtor has filed his answer to the complaint.
c. when the case is scheduled for pre-trial conference between the parties.
d. when the trial has started.
16. These statements concerning the double sale of an immovable are presented to you:
I. The first buyer who was in good faith at the time the sale was made to him,
remains in good faith notwithstanding that he subsequently obtains knowledge of the
second sale.
II. In order that the second buyer may be given preference, he must possess good
faith from the time of sale in his favor until the registration of the same.
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.
17. When is the vendor bound to deliver the thing sold?

a. If the vendee has not paid him the price.
b. If no period for the payment of the price has been fixed in the contract.
c. If the buyer has been given the benefit of the period.
d. None of the foregoing.
18. A, B and C were the co-owners of a lot in the ratio of 1:2:1. A died. He was succeeded
to the property by S, his son and heir. Who may redeem the lot of A from S?
a. B, because as the owner of a bigger portion, he enjoys preference in the exercise of the
right of legal redemption.
b. C, so that he and B will have an equal share in the lot.
c. B and C, in proportion to the share of each in the lot.
d. Neither B nor C may exercise the right of legal redemption.
19. B bought a refrigerator from S for P20,000.00 which is payable in 20 installments at

P1,000.00 per month. After paying 6 installments, B defaulted in the payment of the
seventh and eight installments. Should S decide to exact fulfillment of the obligation,
how much, as a rule, may S collect from B?
a. The total amount of installments defaulted, i.e., P2,000.00.
b. The remaining balance of P14,000.00.
c. Either (a) or (b) at the option of S.
d. Neither (a) nor (b) because S has to wait for the sale of property to third persons.
20. Necessaries include everything indispensable for sustenance, clothing and medical
attendance, and which of the following?
a. Dwelling
b. Education
c. Transportation
d. All of the foregoing.
PLEDGE
1. In order to bind third persons, a pledge:
a. Must be recorded in the register of deeds.
b. Must be in a public instrument showing the description of the thing
pledged and the date of the pledge.
c. Is sufficient that it be In a private instrument showing a description of the
thing pledged and the date of the pledge.
d. Must be accompanied by an affidavit of good faith.
2. 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.
3. When is appropriation by the creditor of the thing given as security allowed in

pledge, real mortgage and chattel mortgage?
a. When the thing a security in real mortgage is not sold at two public
auctions.
b. When the thing given as security in pledge is not sold at two public
auctions.
c. When the thing given as security in chattel mortgage is not sold at one
public auction.
d. No appropriation is allowed in either pledge, real mortgage or chattel
mortgage.
4. On March 1, 2015, D obtained a loan of P 10,000.00 from C. To secure the debt

which is payable on May 1, 2015, D pledged a promissory note amounting to
P12,000.00 which was executed in his favor by M. The promissory note is due
April 25, 2015 and properly endorsed by D to C.
a. On April 25, 2015, C can collect the note P 12,000.00 from M. The entire
proceeds will belong to C.
b. On April 25, 2015, C can collect the note of P 12,000.00 from M.
However, he must pay P 2,000.00 to D.
c. C cannot collect from M. D is the one entitled to collect the note from M.
d. C cannot collect from M. he must sell the note at public auction at
maturity if D cannot pay.
movable.
a. Conventional pledge.
b. Voluntary pledge.
c. Legal pledge.
d. Chattel mortgage.
6. D pledged his diamond ring and gold watch to C to secure a debt of P 10,000.00.
a. If D defaults and the ring and watch re sold at public auction, C may
recover any deficiency if the proceeds of sale amount to less than P
10,000.00.
b. If D defaults, C may automatically appropriate for himself the ring and the
watch.
c. If D pays C P5,000.00, D may demand either the return of the ring or the
watch.
d. If C renounces the pledge in writing, the pledge is extinguished although C
continues to possess the ring and the watch.
MORTGAGE
1. A real mortgage is binding between the parties:
a. Although it was entered into orally
b. Only if it was entered into in writing, whether public or private
c. Only if it was entered into in a public instrument.
d. Only if it was recorded in Registry of Property
2. It refers to the procedure adopted by the mortgagee to terminate the rights of the
mortgagor on the property mortgaged and includes the sale of the property.
a. Redemption
b. Repossession
c. Foreclosure
d. Repurchase
3. For binding effects between the parties:

I. A chattel mortgage must be recorded in the Chattel Mortgage Register
II. A real mortgage must be recorded in the Registry of Property
a. Both statements are true.

b. Both statements are false.
c. Only statement I is true.
d. Only statement II is true
4. The following is required in order to bind third persons in a Chattel Mortgage:

a. The chattel mortgage must be accompanied by an affidavit of good faith
and recorded in the Chattel Mortgage Register
b. The Chattel Mortgage must be in public instrument showing a description
of the thing mortgaged and the date of the chattel mortgage
c. It is sufficient that the chattel mortgage be in writing, public or private.
d. The thing mortgaged must be delivered to the creditor
5. Recording in the Registry of Property in the appropriate book is required for the
validity of the contract of:
a. Chattel Mortgage
b. Real Mortgage
c. Conventional Pledge
d. Antichresis
6. The creation of a lien on the property upon which it is imposed whoever may be
the possessor of the property, to the fulfilment of the obligation for whose security
it was constituted refers to the characteristics of a real mortgage being:
a. An accessory contract
b. An indivisible contract
c. An inseparable contract
d. A real property in itself
7. Chattel mortgage and pledge are similar in what respect?

a. Right of creditor to recover the deficiency if the proceeds of the
foreclosure sale over the amount of the obligation
b. Object of the contract
c. Right of the person constituting the security to get excess of the proceeds
of the foreclosure sale over the amount of the obligation
d. Formality required to bind third persons.
1. Notice of dishonor is not required to be given by a drawer when:
a. The drawer and the drawee are the same person

b. the drawee has countermanded payment
c. the drawee is fictitious
d. all of the above
2. Which of the following is not considered material alternation
a. changing the date

b. changing the amount
c. changing the relation of the parties
d. none of them
3. A negotiable instrument is discharged by:

a. payment in due course by or on behalf of the party primarily liable
b. payment in due course by the party accommodated
c. intentional cancellation thereof by the holder
d. none of them
4. Signification by the drawee of his assent to comply with the order of the drawer
is:
a. Indorsement c acceptance
b. delivery d. presentment for acceptance
5. Presentment for acceptance is required when
a. the bill is payable after sight

b. the bill requires it
c. the bill is drawn payable elsewhere than the residence of the drawee
d. all of them
6. Protest is required when this bill is dishonored:
a. domestic/local c. trade acceptance

b. foreign d. all of the above
7. The following are promissory notes except:
a. due bill c. certificate of deposit

b. bond d. none of them
8. The negotiable promissory note signed by M as maker for P 10,000 is payable to

Jose Cruz or bearer on May 10, 2009. M however issued the note to the payee
May 15, 2009. In this case:
a. The instrument is considered non-negotiable because the date of issue is later

than the date of payment.
b. Cruz can ask for payment at anytime
c. Cruz can require payments only on May 15, 2009
d. Cruz cannot negotiate the note
9. “Pay to Maria or order P 20,000 upon demand”, signed by A as drawer and

addressed to B. Maria negotiated the bill to C, C to D, E stole the bill from D and
indorsed it to F by forging the signature of D. F in turn indorsed the bill to G & G
to H. Which of the following is false?
a. all indorsers prior to the forgery are discharged
b. the drawer is liable to H
c. F is liable to H
d. Forgery is real defense
10. M is the maker of a note payable to J. Cruz or order for P 5,000 due July 30,
2009. Cruz borrowed P 2,000 from C payable July 31, 2009 and pledged the note
by indorsing it to C. Which of the following is correct?
a. a promissory note cannot be pledged without the consent of the maker

b. On July 30, 2009 C can collect from M only P 2,000
c. on July 30, 2009 C can collect from M P 5,000
d. partial indorsement is allowed
11. A is the drawer of a bill addressed to B, payable to C or order 10 days after

acceptance for P 8,000. C negotiated the bill to D, to E and E to F. The bill was
accepted by B when presented by F. If the signature of A is forge, which of the
following is false?
a. B is required to pay F even if the signature of A is a forgery

b. B is not required to pay F since he has the defense of forgery
c. Forgery is considered a real defense
d. If B dishonors the bill by non-payment F may give to any indorse
12. M is the maker of a note, payable to C or order for P 10,000. C negotiated the
note to D, D to E, E to F, F to G and G to H. M dishonored the note when
presented by H for payment. H gave notice of dishonor to F. Which of the
following is true?
a. all indorsers prior to F are discharged

b. only G is discharged
c. H is required to notify M
d. F in turn can give notice to G
13. “ Pay to Pedro Reyes or order P 20,000 ten days after sight
SIGNED
By A drawer as agent of B
To: B
Pedro Reyes negotiated the bill to C, C to D and D to E. B dishonored the bill by

non-payment. E gave notice of dishonor to all prior parties except B. Which of the
following is not correct?
a. The drawer is not liable to E

b. The drawer is liable to E since he was duly notified of the dishonor
c. if D paid E , C becomes liable to D
d. this bill may be considered as a note
14. M signed a promissory note payable to C or order for P 5,000 ten days after date.
C indorsed the note to D, D to E and E to F. F, without authority from the prior
parties, altered the amount to P 15,000 then indorsed the note to G.
a. the unauthorized alteration renders the note void

b. G cannot require M to pay anything
c. G can require M to pay only P 5,000 if G is a holder in due course
d. G can require M to pay P 25,000 if G is a holder in due course
15. Drawer A addressed a bill to B for P 20,000 payable to C or order 20 days after
acceptance. B made a conditional acceptance in this case:
a. the bill becomes non-negotiable

b. it is still negotiable notwithstanding the conditional acceptance
c. the holder cannot refuse to take a conditional acceptance
d. B is considered a constructive acceptor
16. M is the maker of a note for P 30,000 payable to C or bearer. C negotiated the
note to D, D to E, E to F and F to M. Which is correct?
a. the note is discharged

b. the noted is not discharged since there is no payment
c. M cannot re-issued the note
d. The indorsers are not discharged
SALES
1. A advertised in the newspaper his parcel of land wanting to sell the same for P1M.
B personally went to the former with cash in hand to buy the subject parcel of
land. In this case:
a. A cannot anymore reject B as buyer of his land;
b. A can still reject B as an offerer in the purchase of his land;
c. A can reject the offer of B unless he properly consigns with the court his
payment for the land
d. A cannot evade his obligation as seller to B.
2. A sold his car for the price of P2M to B who shall pay P.5M and deliver to S his
land as consideration for the sale. There is:
a. Partly sale and partly barter c. Innominate contract

b. Barter d. Sale
3. S sold to B his land valued at P1M only for the price of P.7M, thus resulting to
inadequate price. The sale is:
a. Rescissible c. Unenforceable
b. Voidable d. Valid
4. 1st Statement. A contract of sale of vain hope or expectancy is voidable at the

option of the buyer and the action for annulment brought within the prescriptive
period provided by law.
2nd Statement. The sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.
a. b. c. d.
1st Statement True True False False
2nd Statement True False False True
5. S sold to B his land on January 10, 2001. On January 15, an absolute deed of
sale was executed and notarized. On January 20, the sale was registered with the
Registry of Deeds. On January 20, the sale was registered with the Registry of
Deeds. On January 25, B took actual possession of the land by building a fence
thereon. When did B acquire ownership of the land?
a. On January 10 c. On January 20
b. On January 15 d. On January 25
6. S sold to B his car on January 10, 2001. On January 15, an absolute deed of sale
was executed and notarized. On January 20, the sale was registered with the
LTO. On January 25, B took actual possession of the car. When did B acquire
title to the car?
a. On January 10 c. On January 20
b. On January 15 d. On January 25
7. S sold to B his car with the agreement to deliver the same one-week after the sale
on January 10, 2001. In this case:
a. S may demand within reasonable time from the sale the payment of the
price from B
b. S can demand payment only after he has delivered the car to B.
c. B may demand delivery of the car even before the expiration of the one-week
period agreed upon once he pays the price
d. Payment and delivery shall take place only after one week from sale
8. S sold B his car with the agreement that B will pay the price one week after the
sale on January 10, 2001. In this case:
a. B may demand within reasonable time from the sale the delivery of the car
b. B may demand delivery only after he has paid the price
c. S may seek payment of the price once he delivers the car
d. Payments and delivery shall take place only after one week from sale
9. S sold his car to B. No agreement was made on the time and place of delivery
and payment. Hence:
a. The time and place of delivery shall be at the time and place of payment of
the price.
b. The time and place of delivery and payment not having been agreed upon, the
sale shall be void.
c. The seller may demand payment first before delivery of the thing sold.
d. The buyer may demand delivery first before payment of the price.
10. 1st Statement. The seller must be the owner of the property he sells but his
ownership need not exist on perfection but upon delivery of the thing.
2nd Statement. A contract of sale may be absolute; conditional, either suspensive
or resolutory; or subject to a contingency; or undivided interest on property, either
present or future except future inheritance.
a. b. c. d.
1 Statement
st
True True False False
11. A sold his land to B verbally. The sale is:

a. Rescissible c. Unenforceable
b. Voidable d. Void
12. A sold to B his dog with the agreement that delivery shall be after one week from
sale and the payment of the price after two weeks from delivery. If the dog shall
produce offspring, it shall belong to:
a. If produced before the sale, it shall pertain to the seller

b. If the puppy shall exist before the actual delivery, it shall pertain still to the
seller
c. The fruits that shall exist after delivery will only be the ones to pertain to the
buyer
d. The fruits after the sale but before delivery shall pertain to the buyer if so
stipulated by the parties to the sale
13. S offered his car to B for P1M and giving the latter one-week to decide. B in
turn gave S P1,000.00. In this case, there is:
a. Contract of sale of the car with the P1,000.00 as earnest money

b. Contract of option with the P1,000.00 as option money
c. Contract to sell of the car at B’s option
d. Contract to sell of the car at S’s option
14. 1st Statement. An oral sale of land made by its owner is unenforceable
2nd Statement. Sale of land made by an agent without written authority from the
owner thereof is void.
a. b. c. d.
1 Statement
st
True True False False
15. A, offered to sell to B 100 cartons of sardines at a specified price which was
accepted by B and subsequently delivered his letter of acceptance. In view of
the shortage of the catch or sardines, a failed to deliver the commodities it had
offered for sale. B decided to sue A. Which is correct?
a. The acceptance of the offer only created an option to buy

b. The absence of consideration distinct from the price makes the contract without
any obligatory force
c. The acceptance of the offer to sell by showing the intention to buy for a
price certain creates a bilateral contract to sell and buy
d. The acceptance of the offer to sell constitutes a binding contract of sale
provided the option was supported by a sufficient consideration
16. S sold to B a thing with waiver of warranty against eviction. Eviction took place
subsequently. Is S still liable for breach of warranty against eviction?
a. No, if it was waiver intencionada

b. No, if it were waiver consciente
c. Yes, even if it was waiver intencionada
d. No, provided the seller was in good faith in entering into the contract of waiver
of warranty against eviction
PLEDGE, MORTGAGE, AND ANTICHRESIS
1. D mortgaged his parcel of land to C as security for a loan. Fearing foreclosure

of the mortgage due to his inability to pay the loan, D sold the land to X without
the consent of C. 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
2. A gets a loan of P1M from B which becomes due on October 1, 2003 and
mortgaged his house as security for the debt. On June 30, 2003, 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
3. S sold to B 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 B 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
4. D mortgaged his car to C as security for a loan. Failing in the payment of the
loan, C foreclosed the chattel mortgage and sold the car at public auction. In
case of deficiency, is D liable for it?
a. Yes, in the absence of contrary stipulation

b. No, because it would be unjust enrichment on the part of creditor
c. Yes, if so agreed upon by the parties
d. No, unless stipulated
5. Mr. Principe constituted Mr. Ajente as his authorized agent to

sell the former’s Toyota Fortuner car for P800,000 and to pay him a
10% commission based on the selling price. Mr. Ajente sold the car for P820,000.
Mr. Ajente shall remit to Mr. Felipe:
a. P800,000 c. P718,000
b. P720,000 d. P820,000
6. An agent, authorized by a special power of attorney to sell a land belonging to the

principal succeeded in selling the same to a buyer according to the instructions
given the age nt. The agent executed the deed of absolute sale on behalf of his
principal two days after the principal died, an event that neither the agent nor the
buyer knew at the time of the sale. What is the standing of the sale?
a. Voidable c. Void
b. Valid d. Unenforceable.
7. X borrowed money from a bank, secured by a mortgage on the land of Y, his

close friend. When the loan matured, Y offered to pay the bank but it refused
since Y was not the borrower. Is the bank’s action correct?
a. Yes, since X, the true borrower did not give his consent to Y’s offer to pay.
b. No, since anybody can discharge X’s obligation to his benefit.
c. No, since Y, the owner of the collateral has an interest in the payment of the
obligation.
d. Yes, since it was X who has an obligation to the bank.
8. Asiong borrowed P1 million from a bank, secured by a mortgage on his land.
Without his consent, his friend Boyong paid the whole loan. Since
Asiong benefited from the payment, can Boyong compel the
bank to subrogate him in its right as mortgagee of Asiong's land?
a. No, but the bank can foreclose and pay Boyong back.
b. No, since Boyong paid for Asiong’s loan without his approval.
c. Yes, since a change of creditor took place by novation with the bank’s consent.
d. Yes, since it is but right that Boyong be able to get back his money and, if not,
to foreclose the mortgage in the manner of the bank.
movable.
a. Conventional pledge
b. Voluntary pledge
c. Legal pledge
d. Chattel pledge
10. Lennie bought a business class ticket from Alta Airlines. As she checked in, the
manager downgraded her to economy on the ground that a Congressman had to be
accommodated in the business class. Lennie suffered the discomfort and
embarrassment of the downgrade. She sued the airlines for quasi -delict but Alta
Airlines countered that, since her travel was governed by a contract between them,
no quasi-delict could arise. Is the airline correct?
a. No, the breach of contract may in fact be tortious as when it is tainted as in

this case with arbitrariness, gross bad faith, and malice.
b. No, denying Lennie the comfort and amenities of the business class as provided
in the ticket is a tortious act.
c. Yes, since the facts show a breach of contract, not a quasi-delict.
d. Yes, since quasi-delict presupposes the absence of a
pre-existing contractual relation between the parties.
11. X bought a land from Y, paying him cash. Since they were friends, they did not
execute any document of sale. After 7 years, the heirs of X asked Y to execute a
deed of absolute sale to formalize the verbal sale to their father. Unwilling to
do so, X’s heirs filed an action for specific performance against
Y. Will their action prosper?
a. No, after more than 6 years, the action to enforce the verbal agreement has
already elapsed
b. No, since the sale cannot under the Statute of Frauds is enforced.
c. Yes, since X bought the land and paid Y for it.
d. Yes, after full payment, the action became imprescriptible.
12. Allan bought Billy’s property through Carlos, an agent empowered with a special
power of attorney (SPA) to sell the same. When Allan was ready to pay as
scheduled, Billy called, directing Allan to pay directly to him. On learning of
this, Carlos, Billy's agent, told Allan to pay through him as his SPA provided and
to protect his commission. Faced with two claimants, Allan consigned the
payment in court. Billy protested, contending that the consignation is ineffective
since no tender of payment was made to him. Is he correct?
a. No, since consignation without tender of payment is allowed in the face of

the conflicting claims on the plaintiff.
b. Yes, as owner of the property sold, Billy can demand payment directly to
himself.
c. Yes, since Allan made no announcement of the tender.
d. Yes, a tender of payment is required for a valid consignation.
13. Upon the proposal of a third person, a new debtor substituted

the original debtor without the latter’s consent. The creditor accepted
the substitution. Later, however, the new debtor became insolvent and defaulted
in his obligation. What is the effect of the new debtor’s default upon the original
debtor?
a. The original debtor is freed of liability since novation took place and this
relieved him of his obligation.
b. The original debtor shall pay or perform the obligation with recourse to the new
debtor.
c. The original debtor remains liable since he gave no consent to the substitution.
d. The original debtor shall pay or perform 50% of the obligation to avoid unjust
enrichment on his part.
14. X and Y were to marry in 3 months. Meantime, to express his affection, X

donated a house and lot to Y, which donation X wrote in a letter to Y. Y wrote
back, accepting the donation and took possession of the property. Before the
wedding, however, Y suddenly died of heart attack. Can Y’s heirs get the
property?
a. No, since the marriage did not take place.
b. Yes, since all the requisites of a donation of an immovable are present.
c. No, since the donation and its acceptance are not in a public instrument.
d. Yes, since X freely donated the property to Y who became its owner.

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NEGOTIABLE INSTRUMENTS

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

9. An indorsement is restrictive, which either

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

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

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

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

4. This serves as a proof of the perfection of the contract of sale

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

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

11. Emption spei as distinguished from emptio rei speratae,

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

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

20. Which of the following statement is incorrect?

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

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

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

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

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

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

A. sale of the thing pledged.

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

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

A. use the thing pledged for purposes of preservation.

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

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

A. The object of the contract.

A. The pledge of the ring is extinguished.

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

A. The kind of object of the contract.

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

Which of the foregoing stipulations is valid?

A. Both are true.

A. Both are true.

A. Both are true.

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

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

4. It is a real estate mortgage in the form of conventional redemption or absolute

A. Real Estate Mortgage

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

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

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

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

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

a. With the consent of the mortgagee in writing

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

18. Mutuum as distinguished from commodatum

2. If the material used in the manufacture of the article is more valuable, it is a

The deficiiency is recoverable in

WE PROMISE TO PAY PATRICIA PALMA OR ORDER P100,000 ON APRIL

ACCTG 161 – GROUP 8

2. Dacion en pago is distinguished from sale

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

9. Which of the following statement is incorrect?

Statement 2: When the price of a sale with right to repurchase is unusually

2. Statement 1: If the thing is returned to the pledger, the principal obligation is

Statement 2: A contract of pledge is consensual which is perfected from the time

3. Which of the following is not a common requisite to pledge and mortgage?

4. Which of the following is not valid as against the contracting parties

5. Abunda borrowed P90,000 from Bano secured by a pledged of his laptop

7. Should there be reasonable ground to fear the destruction or impairment of the

a. Both answer are correct

9. Apurado borrowed P100,000 from Bayaban. The first P50,000 is secured by a

12. Which of the following is not required a formality in an auction sale?

BL 3&4

BL 3&4