CPA REVIEW SCHOOL OF THE PHILIPPINES

REGULATORY FRAMEWORK FOR BUBINESS TRANSACTIONS

COVERAGE: Contract of Sales

Direction: Read and select the best answer for the following questions,

1, It is a contract whereby one of the contracting parties, known as the

seller or vendor, obligates himself to transfer
the ownership of and to deliver a determinate thing, and the other party,
known as the buyer or vendee, obligates
himself to pay therefore 4 price certain in money oF Ibs equivalent

a. Contract of Sales

b. Contract of Agency

ec, Contract of Partnership

d. Contract of Pledge

2. The following are the essential elements or the requisites of the contract of
sale, except

a. Consent of the contracting parties as to determinate thing and price certain in

money or its equivalent
b, Subject matter which should be a determinate thing

c. Price certain in money or its equivalent

d. Delivery of the subject matter

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3. The following are the natural elements of the contract of sale, except

a. Warranty against eviction

b. Warranty against hidden defects
¢. Warranty against non-apparent and unregistered servitude or encumbrance
d. Warranty for merchantability
e. Warranty against sale’s talk

4. The following are only considered accidental elements in the contract of sale,
except
a, Place of delivery and payment
b. Time of delivery and payment
c. Terms or conditions of payment
d, Price certain in money or its equivalent

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5. The following are the characteristics of a contract of sale, except

Principal — It can exist by itself without being dependent upon another contract.
Bilateral — Both the contracting parties have obligations to perform.

Reciprocal — The cause of the other party is the object of the other party and vice
versa.
Onerous — Valuable considerations are given by both parties to acquire rights.
Commutative — The parties exchange almost equivalent values.
Nominate — It has special name given to it by law.

Real — It is perfected by delivery of the subject matter.

RPmeoaocgen

6. The following are distinctions between sale and dacjon en pago, exeept

a. In sale, there is no pre-existing credit, while in dacion en pago, there is pre-

existing credit.

b. A sale creates obligations while dacion en pago extinguishes obligations.

c. Insale, there is greater freedom in fixing the price, while in dacion en pago,
there is less freedom in fixing
the price because of the amount of the pre-existing credit which the parties seek
to extinguish.

d, In sale, the cause or consideration is the price from the seller’s point of
view, and the delivery of the
object from the buyer’s view point, in dacion en pago, the cause or consideration
is the extinguishment of
the obligation, from the debtor’s point of view and the delivery of the object
given in place of the credit,
from the creditor’s point of view.

e. of Acontract sale is an onerous transfer while dation en pago is considered a

gratuitous transfer.

7. What is the similarity between contract of sale and dacion en pago?

a. The law that governs them
b. The cause of obligation
c. The object of obligation
d. All of the above.

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8. The following are the distinctions between sale and Payment by cession, except

a. Assis, there is no Pre-existing credit while in payment by cession, there are

pre-oaisling credits
b. sale creates obligations while payment by cession extinguishes obliyations,

c. » sale the cause or consideration is the price trom the seller's point of view,
and the delivery of the
opject, from the buyer's point of view while in payment by cession, the cause or
consideration is the
extinguishment of the obligation from the debtor's point Of view and the assignment
of the things to be
sold from the credior’s point of view —_-

d, a nel is ooeter Ireedom in fixing the price while yn Payment by cession there is
less freedom m
ane the price because of the fixed amount of the ore |

t } a “CAIN re
extinguish | MK credits which the parties seek to

: : sr become

e ht rr the buyer becomes the owners of the property sold to them while in payment
by cession, the
creditors do not become the owners of the Property assigned to them but are merely
given the right to sell

such property and apply the proceeds ¢o their claims,

f. Contract of sale is governed by FRIA of 2010 while cession is governed by Law on

Sales

9 What is the name of the contract if it is for the delivery at a certain price of
an article which the vendor in the ordinary course of business, manufactures or
procures for the general market, whether the sare is on hand or not?

a. Contract for a piece of work

b. Contract of pledge
c. Contract of sale
d. Contract of deposit

10, What is the name of the contract if the goods are to be manufactured especially
for the customer upon his special order and not for the general market?

a. Contract for a piece of work

b. Contract of pledge
c, Contract of sale
d. Contract of deposit
1]. LA Lakers eniered into a contract with Nike Tic to provide awo pairs of
basketbal! shoes for Kobe Bryant and Andrew Bynum. No pair was, however, availabie
at the time of perfection of the contracts. Kobe wears 10” basketball shoes which
Nike normal ly menufectures for ihe generei market while Andrew wears 20”
basketball shows which will be manufactured specially for Andrew, What contracts
are entered into by the parties?

a. Both contracts of sale

b. Both contacts for a piece 07 work

c. Contract of saiz vor Kobe's shoes and contrac: for a piece of work for Andrew's
shoes
d. Contract of saie for Andrew's shoes and contract fee 1 piece of work for Kobe's
shoes barter, (because ov consideration is another thing,
vartly iy acotier money, the following are the rules to

12. In the sale, the cause or consideration is a money while in the barter, the cause or consideration is
another thing. However, where the consideration is partly in money is another money, the following
are the rules to be observed, except.

a. The contract shail be one of sic or banter depand’ng upon tie manifest intention
of the parties,
b. {f the intention of the parties does not Clearly appear. this contract |S one of
barter ifthe value of the thing
given as part of the consideration exceeds the manct: th
c. If the intention of the parties does aol clearly
consideration is more than the value of the thingy giv
d.If the intention of the parties docs net clearly eppear, the contract is one of
barter if the monetary

consideration is equal to the value of the thing give: as part of the

consideration.

13. A and B entered into a contract whereby A will deliver his laptop to B while
the latter will deliver P10,000 and a cellphone with a value of P10,000 to A. What
is the name of the contracts if tie intention of the parties does not

clearly appear?
a. Contract of Barter
b. Contract of Agency
ce. Contract of Sale
d. Contract of Pledge

14. The following are the distinctions between contract of sale and contract to
sell, except.

In contract of sale, ownership pusses to the buy cr upon deitveny Ww et ee, ice
goods does not pass to (ne buyer until some fuiure ime sad ofentunes upon payment o
price.

a.
the goods upon celivery is on the buyer, under the rule
b. In contract of sale, tie risk of toss cr dairaye yer, ;
. i contract risk is the
“res perit domino”, or the taing perished wilh ihe ey ner, while an contract te
sell, the 1 k is borne by

ig, perishes with ine owner. _—

‘on while in contract to sell, the

seller based on the same principle tit th on

In contrac: of sale, the pon-payment of Ure price is @ resolurory Cor

sot i f the price is a suspensive condiion.

etn da tube alc oogt a 7 ttc sell whe conueets cf sale are not covered by rule on
double

The rule on double sale applica to contact te nares

sale.

. Se Se ETT Oe LT
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15. The following are the distinctions between contract of sale and agency to sell,
except

D. Contract of sale is never covered by statute of fraud while agency to sell is

always covered by statute of fraud.

16. The following are the requisites of the object of a contract of sale, except

a. It must be within the commerce of men.

b, It must be not contrary to law, morals, good customs,

It must be determinate.
he vendor at the time of perfection of contract of sale.

d while agency to sell is always covered by statute of

public order or public policy

C.
d. It must be owned by the vendor at the time of perfection of contract of sale.

t be determinate or specific otherwise there 15 no sale, When is the thing

17, The object of a contract of sale must be determinate or specific otherwise

there 15 no sale, , When is the thing considered determinate?

a. When it is particularly designated or physically segregated from all others of

the same class at the time

the contract is entered into without the necessity of a new or further agreement
between the parties.

b. When it is particularly designated or physically segregated from all others of

the same class at the time

the contract is entered into with the necessity of a new or further agreement
between the parties.

c. When it is particularly designated or physically segregated from all others of

the same class at the time
the goods are to be delivered into without the necessity of a new or further
agreement between the parties.

d, When it is particularly designated or physically segregated from all others of

the same class at the time

the contract is entered into with the necessity of a new or further agreement
between the parties.

X for P50,000. § promised to deliver the car to B on

to B a specific car owned by

d delivered it to B on January 11,2012. Is the
18. On January 1,2012, S sold to B a specific car owned by
d delivered it to B on January 11,2012. Is the the car from X on January 10,2012 an
January 11,2012. S bought contract of sale between S and B valid?

a. No because there is no delivery of the car on January 1,2012 which is an

essential requisite of a contract
of sale.
owner of the thing sold at the time of perfection of contract.

b. No because the seller or vendor shall be the owner of the thing sold at the time
of perfection of contract.

c. Yes even if X is not the owner of the thing sold on January 11,

of a contract of sale.
d. Yes because the vendor need not possess the t
must have the right to transfer the ownership 0

7012 because future thing can be the object

the perfection of the contract but he

itle to the thing sold at

at the thing is to be delivered.

f the thing at the time th

gaged his land to C. On January

00,000 and as a security D mort

19. On January 1,2012, D borrowed from C Pl12. D failed to pay the loan. Is the
2,2012, D sold the same land to X for P50,000 to be delivered on January §,20
contract of sale between D and X valid?

a. No because D is no longer the owner of the land on January 2,2012.

b. No because D is no longer the owner of the land on January 5,2012.
c. Yes because D is still the owner of the land although it was mortgaged to C.
d. Yes provided D will pay the amount due to C.
ontract of sale. However, the thing

20, Future things or things having a potential existence may be the object ofac
ing a subject matter. The following must come into existence; otherwise, the sale
will not be effective for not have future things can be the object of contract of
sale, except
a. Wine that a determinate vineyard is expected to produce
b. Milk that a specific female cow may yield during the coming year
c. Next catch ofa specific fisherman’s net
d. Future inheritance of an heir

21. The following are the distinctions a, Emptio rei speratae is a sale of hope o
between emptio rei speratae and emptio spei, except

a.Emptio rei sp xpectancy while emptio spei is the sale of future thing.

b. In emptio rei speratae the thing expected will definitely come into existence,
but its quality or quantity
unknown; while in emptio spei it is not certain that the thing will exist much less
its quantity or quality.
c, Emptio rei speratae is subject to the condition that the thing should exist, so
that if it does not, there will
be no contract of sale by reason of the abgence of an essential element — subject
matter while in emptio
spei produces effects even though the thing does not come into existence because
the subject matter is the

hope itself.
d. Sale of future harvest is emptio rei speratae while sale of lottery ticket No.
113 is emptio spei.

22, In case of doubt whether the contract of sale is one of emplio rel speritae of
onc of emptio spei, how shall the contract be generally interpreted to?

a. Emptio rei speratae

b. Emptio spei
e BothAand
d. Neither A nor B

23. In emptio rei speratac or sale of future things or things having potential
existence, what is the effect to the contract

of sale ifthe said subject matter does not come into existence?
a. The contract becomes ineffective or void for want of subject matter,
b. The seller will never be liable for damages.
¢. The contract becomes unenforceable
a. The contract remains to be perfeetly valid.

24. 8 sold a lottery ticket No, 143 to B on January 2,2012. The draw was already
made on January 1,202 and ticket No. 143 did not win. Is the contract of sale
between S and B valid?

a. Yes because it involves emptio spei or sale of mere hope.

b. No because the sale of vain hope or expectancy is void.
c. No even if the ticket is considered collector's item.
d. Yes because the essential elements of contract of sale are present.

25, The following goods may become the subject of a contract of sale, except

a, Existing goods owned or possessed by the seller.

b. Goods to be manufactured, raised or acquired by the seller after the perfection

of the contract of sale or “future goods”.
Goods whose acquisition by the seller depends upon the contingency which may or may
not happen.
c. Vain hope /expectancy or future inheritance.
Things subject to resolutory condition or resolutory period.

ao

26. S is the sole owner of a condominium unit. S$ sells % undivided interest

therein to B. Is the contract of sale valid?

a. No because the object of a contract of sale must be determinate.

b. No because the object of a contract of sale must be whole interest.

C.Yes the sole owner of a thing may sell an undivided interest therein and such
sale shall produce the effect of making the seller and the buyer co-owners of the
thing sold.
d. Yes provided that the condominium unit shall be physically divided.

c.

27. There may be a sale of an undivided share of a specific mass of fungible goods
though the seller purports to sell and the buyer purports to buy a definite number,
weight or measure of the goods in the mass, and though the number, weight or
measure of the goods in the mass is undetermined. Which of the following rules is
correct?

1, If the quantity, number, weight or measure, of the mass is more than the
quantity sold, the parties shall
become co-owners of the mass.

If the quantity of the mass is less than the quantity sold, the buyer becomes the
owner of the whole mass, with

Il.
the seller being bound to make good the deficiency from goods of the same kind and
quality, unless a contrary

intent appears.

a. Tonly

b. [only

c. Neither I nor Il
d, Both] and II

28. S sells to B 200 sacks of rice from a mass stored in the warehouse of S. The
mass, however, actually consist of 300 sacks of rice. Which of the following
statements is correct’?

The sale is null and void because the object is not determinate.

The sale is valid provided B will pay for the excess 100 sacks of corn.
c. The sale is valid, thus, $ and B will become co-owners of the whole mass to the
extent of 2/3 for B and

1/3 for S.
d. The sale is null and void because there is no consent.

poe

29. S sells to B 300 sacks of yellow corn from a mass stored in the warehouse of S.
The mass, however, actually consists of 280 sacks of yellow corn. Which of the
following statements is correct?

a. The sale is null and void because there is no consent.

b. The sale is null and void because there is no determinate object.
c. B becomes the owner of all the 280 sacks and S is bound to deliver additional 20
sacks.
d. B becomes the owner of all the 280 sacks and S is not bound to deliver the
additional 20 sacks.
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30. It is the sum stipula 8 ACUI : '40 fixing of the same tetas the equivalent of
the thing sold, and also every incident taken into consideration for the
part of the seller » put to the debit of the vendee, and agreed to by him. It is
the cause of contract of sale on the

a, Loan
b. Price
c. Debt
d, Money

31, The following are the requisites of the price in a contract of sale, except
a. It must be certain,
b. It must be real.
c. It must have possible equivalent in money.

d. It must be fictitious.
certain, otherwise, the sale is void by reason of the absence of meeting of

32. The price of the thing sold must be

riain, except

minds between the parties. The following are the instances when the price is ce
a. If the parties have agreed upon a definite amount for the sale.

b.. If it be certain with reference to another thing certain.

c. Ifthe determination of the price is left to the judgment of a specified person

or persons.

d. If the price is fixed by the court.

ce. If the price fixed is that which the thing sold would have on a definite day,
or in a particular exchange or
in such exchange or market,

market, or when an amount is fixed above or below the price on such day, or

provided said amount is certain. ;

f. If the price is fixed by one of the contracting parties and not accepted by the
other.

33. The following contracts of sale have prices which are certain and therefore
valid, except

a. Ssold to Ba specific watch for P2,500 which both parties agreed upon.
b. Ssold to B acertain ring of which the price is the salary of the faculty member
of La Salle School.
c. S$ sold to Ba specific car the price of which is subject to determination of X,
third person.
d. § sold to B 500 shares of ordinary stocks of BPI at the price equivalent to the
closing price of the ALI’s

ordinary shares on April 30,2020 at the Philippine Stock Exchange.

34. When may the court fix the price of the contract of sale if the determination
of the price is left to the judgment of a third person?

a. If the third person is unable or unwilling to fix the price.

b. Ifthe third person acted in bad faith or by mistake.
c. If the third person or persons are prevented from fixing the price or terms by
the fault of the buyer or
seller.

35. What is the effect to the contract of sale if the determination of the price is
left to the judgment of a third person and such person is unable or unwilling to
fix the price?

a. The contract of sale is voidable.

b, The contract of sale is valid and binding.
¢. The contract of sale is inefficacious unless the parties
d, The contract of sale is rescissible.

subsequently agree upon the price.

of the price is left to the judgment of a third person,

36. What is the effect to the contract of sale if the determination of the price is
left to the judgment of a third person, where such third person or persons are
prevented from fixing the price or terms by fault of the seller or the buyer?

where such third person or persons are prevented from fixing

a. The contract is voidable. |
b. The contract is unenforceable. |
c. The party not in fault may have such remedies against
buyer, as the case may be such as filing an action for damages.

d. The contract is rescissible.

the party in fault as are allowed the seller or the

37. § sold to B a specific good. The price of the good cannot be determined. The
good has been delivered to and appropriated by B. What is the obligation of B?
a, B has no obligation because the contract of sale is nul! and void having no
price.

b. Bhas no obligation because the contract of sale is inefficacious because the

price of the good cannot be
determined.
c. Bhas the obligation to rescind the contract.

d. Bhas the obligation to pay a reasonable price which depends on the circumstances
of each particular case.

38. What is the effect of gross inadequacy of price in a contract of sale?

a. Itrenders the contract of sale null and void.

b. In renders the contract of sale unenforceable.

c. It does not affect a contract of sale, except as it may indicate a defect in the
consent which makes the

contract voidable or except as it may indicate that the intention ts another

contract.
| d. It does not affect a contract of sale even if the parties really intended a
donation or some other act or

contract.
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39. What is the effect of simulated price in a contract of sale?
a. It renders the contract of sale null and void.
b. It renders the contract of sale voidable
c. It renders the contract of sale rescissible.
d. It renders the contract of sale unenforceable
ce. It renders the contract of sale as a valid donation even if the requirements of
donations or other
agreements are not complied with

40. When is a contract of sale perfected?

a. Upon delivery of the object of a contract of sale.
b. At the moment there 15 a meeting of minds upon the determinate thing which is
the object of the contract
and upon the price certain money or its equivalent,
c, Upon payment of the purchase price.
d. Upon the transfer of ownership or title.

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

a, No because the purchase price is not yet paid.

b. No because the utle is not registered to the buyer,

c. Yes because the car hus already heen delivered to Y.

d. No because the price of the sale was left to the discretion of one of the
parties, that is, the seller, and it
Was not consented by the buyer.

42, Which cf the following contracts of sale is null and void?

a. Executory oral sale of real property or any interest therein regardless of the
price.
b. Executory oral sale of goods, chattels or things in action the price of which is
P500 or more.
c. Sale ofa piece of land by the agent in the name of principal wherein his
authority is not in writing.
d. Sale of a piece of land by a third person in the name of owner but who has not
been given any authority

43, When is a contract of sale by auction perfected?

a. When the highest bidder gives his bid.
b. When the auction things has been delivered to the buyer.
c. When the auctioneer announces its perfection by the fall of the hammer or in any
other manner.
d. When the bid price has been paid.

44. The following are the rights of the parties in an auction sale, except
a. Before perfection, any bidder may retract his bid.
b. Before perfection, the auctioneer may geaerally withdraw the goods from the sale
unless the auction has
been announced without reservation by atictioneer.
c. After perfection, the wining bidder can retract his bid.

d. After perfection, the auctioneer cavnot withdraw the goods.

45. The seller may bid at the auction provided the following requisites are
present. except
a, The right to bid must have neen reserved expressly by or on behalf of the
selier.
b. The right to bid must not be prohibited by law or stipuleticn
c. Notice must be given that the saie is subject to a right to bid by or on behalf
of the seller.
d. The bid of the selier must be the lowest,

46. By bidders or puffers refer te persons employed by the seller to bid ia his
behalf, the purpose of which is to raise
the price, but the said persoss are not in themselves bound by their bids, What is
the e*fect of employment by the
seller of by-bidders or puffers without notice to the other cidders in 4 perfected
contrac ef sale by auction?

a. The sale may be cunsidered voidaole.

b. The sale is considered null and void
c. The sale is unenforceable

d. The sale is rescissible.

47. When is the ownership or title ef the thing sold tiansterred from the seller to
iae buyer?
a. Upon the perfection uf contract of sale.
b. Upon payment of the purchase price,
c. Upon actual! or consuuctive delivery of che thing sold.
d. Upon execution of private instrument ov private deed of sale.

~! 48. May the parties agree that full payment of the prices will be the act that
transfers ownership in a contract of sale?
- om a. No because it is contrary to Law on Sales.

b. Yes by reason of liberality of contract.

c. No because it will be unfair to the buye:.

d. Yes but only if there is approval by the court.

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49. which “iileeal promt ees bilateral and unilateral promise to buy and/or sell is
incorrect’?

A. Bilateral promise i takes place when one party promises to buy and other party
promises to sell a determinate things at agreed price.
determinate thing at an agreed price. Pass? promcinne ttn ne He other party
prociaoea. sall «
b. Bilateral promise is reci i is i
procally demandable since this is as good as a perfec
é , ted cont
ee promise not accepted by the promissee (policitacion) does tt produce ne
nilateral promise accepted by the promissee is binding upon the promissor even if
it is not supported by

a consideration distinct from the price.

50. It refers to the money given as part of the purchase price and as a proof of
perfection of the contract of sale

a. Option money

b. Earnest money or Arras

c. Perfect money

d, Component money

51. It refers to the consideration paid for the purpose of holding one to his
promise to buy or sell a determinate thing

for a certain period of time, which consideration is separate and distinct from the
purchase price.

a, Option money
b. Eamest money or Arras
c. Perfect money

d. Component money
r not. B accepts the

P100,000 giving B one week to decide whether to buy o}

the car, how much

52. S promised to sell his car to B for

f P1,000 for the one week period. If B decides to buy

promise and gives a consideration 0

should B pay to S?
a. P100,000 because the P1,000 is an earnest money.

b. P99,000 because the P1,000 is an option money.

c. P100,000 because the P1,000 is an option money.
d. P99,000 because the P1,000 is an earnest money.

53. B purchased the car of S for P100,000 payable within 30 days from the date of
sale. As a downpayment, B gives S
P1,000 upon the execution of their agreement. How much should B pay to $ on the 30
day?
P100,000 because the P1,000 is an earnest money.
a.
b. P99,000 because the P1,000 is an option money.

c. P100,000 because the P1,000 is an option money.

d. P99,000 because the P1,000 is an earnest money.

54, When shall the buyer or vendee acquire personal rights over the fruits of the
object of a contract of sale?

a. From the time the object should be delivered.

b. From the time of the perfection of the contract of sale.

From the time of the payment of purchase price.

From the time of the delivery of the object of the contract of sale.

55. On January 1, 2012, Seller and Buyer entered into a contract of sale of a
specific cow. The purchase price shall be
paid on January 5,2012 and the cow shall be delivered on January 10,2012. The cow
gives birth on January
4,2012. The cow and its young have been delivered on January 11,2012. Which of the
following statements is

correct?
a

b
c.
d the buyer has personal right over the young on jan 1,2012 and real right over the cow and its young on jan 11,2012

a.The buyer has real right over the cow and its young on January 1,2012.
The buyer has personal right over the young 9n January 10,2012.
The buyer has personal right over the young qn January 5,2012.
012 and real right over the cow and its young

The buyer has personal right over the young on January 1,2
on January 11,2012.

b.
c.
d.
ivery. What

ing after the perfection of contract of sale but before its del

56. The seller has the duty to preserve the thi

standard of care should be observed by the seller to preserve the object of
contract of sale?
5 the law or the stipulation of the parties

a. Diligence of a good father of a family or ordinary diligence unles:

requires another standard of care.

b. Diligence of a father of a good family unless the law or the stipulation of the
parties requires another

standard of care.
c. Extraordinary diligence of a good father of a family unless the law or the
stipulation of the parties
requires another standard of care. le
d family unless the law or the stipulation of the parties

d. Extraordinary diligence of a father of a goo

requires another standard of care.

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57. What is the effect of the complete loss of the object of the contract of sale
before the perfection of the contract of
sale or complete loss of the object of contract of sale at the exact moment of
perfection of contract of sale?
a. The seller shall always bear the risks of the loss.
b. The buyer shall pay the purchase price
c. The buyer shall be liable for the damages
d. The sale is void or inexistent because of the absence of the object

58. What shall be the remedy of the buyer in case of the partial loss of the object
of the contract of sale at the time of
the perfection of the contract of sale?

I Withdrawal from the contract or rescission,

II Demanding the remaining part and paying its proportionate price,

a. lonly
b. TL only

c. Either! or II
qd, Neither I nor II

59. After the perfection of the contract of sale, who shall bear the risk of loss
of the object of the contract of sale
before the delivery?

a. Buyer because any benefit therefrom during the same period inures to him.

b. Seller because any benefit therefrom during the same period inures to him.

c. Buyer because the ownership of the goods is transferred io the buyer after the
perfection of the contract of
Sale,
Seller because goods remain at the seller’s risk unti! the ownership of the goods
is transferred to the buyer
by actual or constructive delivery.

60. The following are the exceptional instances wherein the goods are at the
buyer's risk notwithstanding, that the

ownership is retained by the seller , except

a. If there is an agreement that the buyer shall suffer the risk of loss despite
the retention by seller of

ownership,
b. If ownership of the goods is retained by the seller merely to secure the
performance by the buyer of his

obligation under the contract.

c, When actual delivery has been delayed through the fault cf the buyer.
d. When there is actual or constructive delivery to the buyer.

61. What is the remedy of the buyer if the goods delivered do not correspond with
the sample, description or sale and
description in a sale by sample, sale by description or sale by sample and
description?
a. Ask for annulment of contract.
b. Ask for rescission of the contract of salc.
c. Ask for coilection of a sum of money.
d. Ask for declaration of nullity of the contract of sale

62. What contracts are covered by Recto Law?

a. Installment sales of personal property
b. Contract purporting to be leases of personal properiy wita option to buy
c. Either A or B
d. Neither A nor B

63. The following are the alternative remedies (selection of ong remedy excludes
the other remedies) of vendor in (1)
installment sales of persona! property (Recto Law), or (2) contcacts purporting to
be leases of personal property
with option to buy. when the lessor has deprived the lessee of the possession cr
enjoyment of the thing, except

a. Exact fulfillment of the obligation with recovery of deficiency, should the

vendee or lessee fail to pay any
installment.

b. Cancel the sale or lease shocld the vende or lessee fails to pay two or more
installments.

c. Foreclose the chattel mortgage on the thing sold, if onze bas been constituted
without right to recover any
deficiency should the vendee fails to pay two or more installments.

d. Action for quanti minaris.

64, S sold his only car to B for P100,000 payable vi 10 equal inonthiy installments
of P10,000 each. As security, B
executed a chattel morigage on the car. What is the remedy of 5 if B fails 10 pay
one installment?
a. Exact fulfillment of the obligatioa with recovery for deficiency,

b. Cancel the sale.

c. Foreclose the chattel mortgage on the thing sold, if one hes been constituved
without right to recover any

deficiency. —
d. Foreclose the chattel mortgage on the thing sold, if one has been constituted
with right to recover any

deficiency.

—~

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-_ same data in number 64, if buyer B defaulted i

65. Using the §' \ i , yer cfaulted in at least two installments after payment /
6: installments, what is the effect by the cancellation of the contract of sale by
the seller’? permet of Several
a, The buyer is still required to pay the price.
bh, The seller may still recover the unpaid price,
The buyer must retum the thing to the seller and the seller must generally return
the installments alread
received minus reasonable rent. J
d. The buyer and seller cannot agree to the forfeiture of installment already
received even if such agreement

is not unconscionable,

66. Using the same data in number 64 and assuming B fails to pay two or more
installments, can S foreclose the
chattel mortgage on the car and recover any deficiency from the foreclosure?

a. Yes S$ can foreclose the chattel mortgage but cannot recover any deficiency even
if there is stipulation for

the recovery.
No $ cannot foreclose the chattel mortgage and cannot recover any deficiency.

b.

c. Yes § can foreclose the chattel mortgage and can recover any deficiency even
without stipulation for the
recovery.

d. Yes § can foreclose the chattel mortgage and can recover any deficiency only if
there stipulation for the
recovery.

67. Using the same data in number 64 and assuming the foreclosure of the chattel
mortgage results to excess, who
shall be entitled to the excess?

a. Buyer in the absence of contrary stipulation

b. Seller in the absence of contrary stipulation

c. Government
d. Neither Buyer or Seller

ore installments; can S cancel the contract

68. Using the same data in number 64 and assuming B fails to pay two or m

of sale?
a. NoScannot cancel the contract of sale.

b. Yes $ can cancel the contract of sale received even without

and he can retain the installments already

stipulation.

c. Yes §$ can cancel the contract of sale but he shall return the installments
already received minus
reasonable rent. oe

le and he can retain the installments already received if there is

d. Yes S can cancel the contract of sal : i‘

hall not be returned even if that stipulation is unconscionable.

stipulation that installments received s|

69. Using the same data in number 64 and assuming B fails to pay two or more
installments; can S ask for the exact
fulfillment of the obligation and recover any deficiency from the sale by
execution?
a. No $ cannot ask for the fulfillment of the contract of sale because it is
available only when one
installment is not paid.
b. Yes $ can ask for the fulfillment of the contract
execution under any circumstances.
c. Yes § can ask for the fulfillment of
execution even without stipulation.
.
d. Yes § can ask for the fulfillment of the contract of sale and can recover any
deficiency from the sale only

if there is stipulation
of sale but cannot recover any deficiency from the sale by

the contract of sale and can recover any deficiency from the sale by

70, Using the same data in number 64 and assuming B fails to pay two or more
installments; can S ask for the exact
fulfillment of the obligation and recover any deficiency from the sale by execution
through the foreclosure of
chattel mortgage on the car?

a. No S$ cannot ask for the fulfillment of the contract of

installment is not paid.

b. Yes Scan ask for the fulfillment of the contract of sale but cannot recover any
deficiency from the sale by

execution under any circumstances.

Yes § can ask for the fulfillment of the contract of sale and can recover any
deficiency from the sale by

execution only but not further through foreclose of chattel mortgage because these
are alternative

remedies.
d. Yes S can ask for the fulfillment of the contract of sale and can recover any
deficiency from the sale
'

only if there is stipulation.

sale because it is available only when one

71. Using the same data in number 64 except from the fact that the chattel mortgage
was executed over the piano of B
and not over his car. $ foreclosed the mortgage over the piano and there is
deficiency. Can S recover the
deficiency?

a, Yes provided there is stipulation to that effect.

b, Yes even without stipulation to that effect.

c. No because that will be contrary to law.

d. No even without stipulation to that effect.

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72. S sold his ring to B for PS0,000 under the following terms; down payment of
P30,000 and the balance payable at
month end. As security, B executed a chattel mortgage on the ring, [3 defaulted in
the payment of the balance. By
reason thereof, S foreclosed the chattel mortgage on the ring. However, only 15,000
was realized in the
foreclosure sale. Can S still proceed against B to collect the deficiency of
P5,0007

a. No because Recto Law prohibits recovery of deficiency,

b. Yes if deficiency has been agreed upon contrary to Recto Law,

ec. Yes because Recto Law does not apply to sale on straight term and the general
rule is that if the
foreclosure sale in chattel mortgage results in deficiency, the same may be
recovered by the creditor.

d. No because recovery of deficiency is only available in execution sale

73. Sale of real property in installments governed by RA 6552 or Maceda Law covers
the following, except
a. Sale of residential property
b. Sale of residential condominium
¢, Sale of residential apartments

d. Sale of industrial lots, commercial buildings and sales to tenants under RA 3844

74. Under Maceda Law, the following are the rights of a buyer of residential real
property in installments when he has
paid installments of less than 2 years but defaulted in the succeeding
installments, except
a. Right to a grace period of not less than 60 days from the date the installment
became due with no interest.

b. Right to additional 30 days but with interest, after the expiration of the 60-
day grace period, before the
seller can cancel the contract by notarial act,

c. Right to sell or assign his rights provided under letter A and B.

d. Right to reinstate the contract by updating the account during the grace period
and before actual
cancellation of the contract,

e. Right to pay in advance any installment or the full unpaid balance of the
purchase price any time without
interest and to have such full payment of the purchase price annotated in the
certificate of title covering
the property.

f. Right to receive the cash surrender value of the payments on the property
equivalent to 50% of the
payments made in case the contract is properly cancelled by the seller.

75. Under Maceda Law, which of the following statements concerning the rights of a
buyer of residential real

Property in installments who has paid at least 2 years installments but defaulted
in succeeding, installments is
incorrect?

a. He has the right to pay, without additional interest, the unpaid installments
due within the total grace
period earned by him which is hereby fixed at the rate of one month grace period
for every one year of
installment payments made,

b. He can exercise the right to pay within the grace period allowed by law only
once in every 5 years of the
life of the contract and its extensions, if any.

c. Ifthe contract is canceled, the buyer shall have the tight to the cash surrender
value of the payments on
the property equivalent to fifty per cent of the total payments made, and, after
five years of installments,
an additional five per cent every year but not to exceed ninety per cent of the
total payments made.

d. The actual cancellation of the contract shall take place after thirty days from
receipt by the buyer of the
notice of cancellation or the demand for rescission of the contract by a notarial
act and upon full payment
of the cash surrender value to the buyer,

e. The buyer has the right to suspend payment of any installment at any time,

76. A sold a residential house and lot at an installment price of P6,000,000

payable in 50 years at P10,000 per month
to B. After payment of total installments amounting to P180,000, B defaulted on the
next installment, What is the
grace period earned by B to pay the defaulted installments without additional
interest?

a. 60 days
b. 30 days
c. 90 days
d. 45 days

77. A sold a residential house and Jot at an installment price of P6,000,000

payable in 50 years at P10,000 per month
to B. After payment of total installments amounting to P360,000, B defaulted on the
next installment. What is the
grace period earned by B to pay the defaulted installments without additional
interest?

a, 60 days ,
b. 120 days
c. 90 days
d. 150 days
a

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79. <A ak a Sake Sanco aol AM at an . 5st AUD pavae oa) vce at POLO pag pa hy
sR After payment of total ovtaliments ane § }, B feta ned the beat oastaliesot What
othe
crue pera cummed Dy Bote pay the So“auhied moecal cevis WS Af lyon cctenvot”

“ _ dans

s “Naps

c wai >

d AD OANS
=~ aa. Scat and kot al daar cot pre) of Pate Vpavab'y oy 0 years at PLO port tt
pave tt of total ceistheents amet te PLO, AF votauttead en tha neat eal mcoct Attes
wag ts pecesuan poooadures nun by Jaw, the contract of cake re properly vatvolled
How too h east

sorrender Value cs B enttled from A>

nent price of T6,000,000 payable in 50 years at P10,000 per month

se house and ky
of total u az to P240,000, B defaulted on the next installment After
following the necessary procedures required by law, the contract of sale is
properly cancelled How much cash
surrender value is tied from A?
a P60
. .
ad P30,000
80) installment price of P6,000,000 payable in 50 years at 210,000 per month
— faulted on the next installment. After mounting to P360,000, B d
red by law, the contract of sale is properly cancelled, How much cash Jowing the
necessary pis B entitled from A?surrender valu

a Pé0,000
b. P90,000
c. P120,000
d. P180,000

82. A sold a residential house and lot at an installment price of P6,000,000

payable in 50 years at Pl 0,000 per month
to B. Afier payment of total installments amounting to P1.200,000, B defaulted on
the next installment. After
following the necessan procedures required by law, the contract of sale is properly
cancelled. How much cash

surrender value is B entitled from A?

a P900,000
b. P&40,000 840
c. P960,000
d. P1,020,000

83. A sold a residential house and lot at an installment price of P6,000,000

payable in 30 years at P10,000 per month
to B. After payment of total installments amounting to P3,000,000, B defaulted on
the next installment. After
following the necessary procedures required by law, the contract of sale is
cancelled. How much cash surrender

value is B entitled from A?

oo
Mo.

a. P2,900,000
b. 2,700,000
c. P2,850,000
d. P2,500,000

84, Under PD 957 also known as Subdivision and Condominium buyer's Protective
Decree, who shall pay the Real
estate tax and assessment on a lot or unit being developed before the passage of
title to buyer?
a. Developer or owner of the project subject (o reimbursement by the buyer.
b. Owner or developer without recourse to the buyer.
c. Buyer of the unit.
d. Developer and buyer equally.

85. Under PD 957, which of the following statements is correct when the buyer,
after due notice to the owner or
developer, desists from further payment due to the failure of the owner or
developer to develop the subdivision or
condominium project according to the approved plans and within the time limit for
complying with the same?

a. The installment already paid by the buyer shall be forfeited in favor of the
owner or developer,

b. The buyer may ask for the reimbursement of the total amount paid including
amortization interests but
excluding delinquency interests, with interest thereon at the legal rate.

¢, The buyer has no right to ask for the reimbursement already paid.

d. The seller can automatically cancel the contract of sale because of the non-
payment.

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86. Under PD 957, the owner or developer shall deliver the title of the lot of unit
to the buye
the lot or unit. What fee can be collected by the owner/developer from the buyer?
a. Only those required for the registration of the deed of sale in the Registry of
Deeds
b. All expenses of the contract of sale
&. Expenses of the contract of sale and real property taxes during the Pendency of
payment

t upon full payment of

87. PD 957 also known as Subdivision and Condominium buyer's Pro

Protection of the buyers, except

a& No owner or developer shall levy upon any lot or buyer a fee for an alleged
community benefit, Fees to
finance services for common comfort, security and sanitation may be collected only
by « properly
Organized homeowners association and only with the consent of 9 Majority of the lot
or unit buyers
actually residing in the subdivision or condominium project,

>. The owner or developer cannot deny any person free access to an
establishment located within the subdivision or which may be re
subdivision

&. The owner or dev cloper of a subdivision without access to any ex

night of way to a public road or street and such right of way must
to the requirement of the government and authorities concemed

d. The owner or dev eloper of a subdivision Project or condominium project shall

inittate the organization of
4 homeowners association among the buyers and residents of the projects for the
purpose of promoting
and protecting their mutual interest and assist in their cornmunity development.

e The owner or developer has the obligation to bay the real property taxes on the
subdivision and
condominium sold even after the transfer of ownership to the buyers.

‘ective Decree provides for the following

¥ government office of public

ached only by Passing through the

isting public road or street must secure a

be developed and maintained according

88.. What is the status of a

contract of sale entered into by persons having absolute incapacity such as minors,
insane or demented persons As a general rule, all those who may oblige themselves
May enter into a contract of sale
and deaf mutes who do not knew how to write with a capacitated person?

a Voidable

6. Rescissible

c. Unenforceable
a. Null and void

89. What is the status of a contract of sale entered into by persons having
ebsolute incapacity such as minors, insane
or demented Persons and deaf mutes who do not know how te write with another
incepacitated person?
a. Voidable
o. Rescissible
c. Unenforceable
d. Null and void

90. S, a capacitated Person, sold to B, a miner, a chicken Joy. May § dam

snd irom B the payment of the purchase

price?

2. No because the curtract Of sale is voidebls since B is an in spocttated person,

b. Yes because ever the conivack ot sale is voideble ideally, the ¢ ibjeet maiter,
fed isa necessary.
c. Yes even the orice is unreasonghle,

d. No because the contract of saie is void.

91. Asa general tule, what is the status of che conact of sate vetween a husbend
and wife?
a. Voidable because they ere suffering from absolute incapacity
b. Null and void because they are suffermg from relative incapecity.
&. Rescissible if there is lesion,
d. Unenforceable if :t is ot in writing,

92. As an exception to the general rule, when may the husband and wife validly sell
property « each other?
a. When an absolute Separation of property was agreed u pon ia the marriage
settlements.
b. When there has been a judicial sepgration of property under the Fainily Code.
c. Either A or B.
d. Neither A nor B.

93. Without the consent of the husband, the wite sold their car, a
sonjugal/communtty property to a third Person.
What is the status of the contract of sale?
a. It is unenforceable subject to ratitication,
b. It is voidable because of vitiation of consent.
©. Itis rescissible because of lesion to the husband de
d, It ig null and void because of lack of consent of husband but the coniract
constitutes 4 continuing offer to
\ the husband.

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94, A and B are legally married and governed by property regime of absolute
separation. A sold in writing his
specific car at a price of P10,000 to B after the latter pointed a gun to A. What
is the status of contract of sale?
a. Voidable
b. Void
c. Unenforceable
d, Rescissible

95. The following persons are prohibited from acquiring by purchase, even at public
or judicial auction, sales in legal
redemption, compromises or renunciation, except

a. The guardian, the property of the person or persons under his guardianship, .

b. Agents, the property whose administration or sale may have been entrusted to
them, unless the consent of
the principal has been given,

c. Executors and administrators, the property of the estate under their

administration.

d. Public officers and employees, the property of the State or GOCC under their
administration.

e. Justices, judges, prosecuting attorneys, clerks of court and other officers and
employees connected with
the administration of justice, the property and rights in litigation.

f. Wife, the exclusive or capital property of his husband if there is judicial of

separation property.

96. The following are the obligations of the vendor in a contract of sale, except
a. To transfer the ownership of the thing sold at the time of the perfection of the
contract of sale. .
b. To deliver the determinate thing sold including the accessions and accessories
in the condition in which
they were upon the perfection of the contract.
c. To warrant the thing sold against eviction and hidden defects and unregistered
encumbrances.
d, To take care of the thing sold with the diligence of a good father of a family
or ordinary diligence unless
the law or the stipulation of the parties requires another standard of care.

97. It is a mode of acquiring ownership whereby the abject of the contract is

placed in the control and possession of
the vendee, either actually or constructively.
a, Delivery |
b. Payment of purchase price
c. Perfection of contract
d. Execution of document

98. The following are the examples of constructive deliveries. ;

a. Tradition by legal formalities - When the same is made through a public
document, the execution
thereof shall be equivalent to the delivery of the thing sold. It applies to both
movable and immovable
roperty.
b. Syebelie delivery (Traditio simbolica or Traditio clavium) — This is delivery
that takes place by
delivering the keys of the place or depository where the movable is stored or
kept. .
c. Traditio longa manu — It is the delivery of a movable by mere consent or
agreement of the parties if the
thing cannot be transferred to the possession of the vendee at the time of sale. /
d. Traditio brevi manu — It is a delivery that takes place when the vendee is
already in the possession of the
thing sold even before the sale and thereafter continues in possession thereof in
the concept of an owner.
It applies to movables only. . ;
e. Traditio constitutum possessorium — It)is a delivery that takes place when the
vendor continues in
possession of the thing sold after the sale but in another capacity such as that of
a lessee or depositary. It
applies to both movable and immovable property.

99. S and B entered into a contract of sale of a specific coconut. § and B pointed
over that particular coconut. What
type of constructive delivery is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio constitutum possessorium

100. S and B entered into a contract of sale of a specific watch. They executed a
public instrument over the
sale. What type of contructive delivery is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio by legal formalities

101, S and B entered into a contract of sale of a specitic car. S$ delivered the
key of the car to B. What type of
constructive delivery is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
c. Traditio brevi manu
d. Traditio by legal formalities

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102, B rented the specific truck of S. After the end of the contract, § sold the
property to B. As a result of sale,
B continues to have Possession of the property, What lype of constructive delivery
is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
¢. Traditio brevi manu
d. Traditio constitutum Ppossessorium

103. S sold his house and lot to H. After the sale, 1 le

delivery is present?
a. Traditio simbolica or clavium
b. Traditio longa manu
©. Traditio brevi manu
4, Traditio constitutum possessorium

ascback the property to S. What type of constructive

104. Intangible assets or incorporeal property cannot be the subject of actu

following are the different modes of constructive delivery of incorporeal property
or The intangible assets, except

4. By constructive traditio such as execution of public document,

b. By placing the titles or tangible of ownership in the possession of the vendee

such ag delivering the stock
certificate covering the shares of stock sold

c. Through the use by the vendee of his rights with consent of the vendor such as
when the seller authorizes
the buyer of shares of stock to vate during the stockholder’s meeting.

d. Through pledging of the shares of stocks by the pledgor to the pledzee.

al or physical delivery. The

intangible assets, except

105, In sale or return, when is the ownership of the goods transferred to the
buyer?
a, Upon payment of purchase price.
b. Upon delivery of the goods.
c. Upon approval by the buyer.
d. Upon return of the g00ds to the seller

106. In sale on triaV/approval, the ownership of the goods is transferred to the

buyer under any
instances, except

a. When the buyer signifies his approval or acceptance of the goods.

b. When the buyer does an act adopting the transaction.
¢. When the buyer dces not signify his approval or acceptance of the goods but
retains the goods without

giving notice of rejection within the time fixed in the contract or within
reasonable time, and such time
Nas expired.

d. When the goods are delivered to the buyer,

of the following

107. On January 1. $ delivered an electronic ealeulator to

May 7 to return the electron’: calculator. Befora M
purchase price?

B under a sale or retum arrangement. S gave B up to

ay 7, the calculator wag destroyed by fire. Should B pay for the

a. No because B is not yet the owner of the caleutator.

5, No because the caleulatur is destioyed through fornitous event,
c. Yes because B becomes the owner of the caleulsio: upon delivery
d. Yes if the fire is due to the fauwiof B.
108. Using the same data in Preceding Number excep: the fact that tne ‘arrangement
is a sale on trial or

approval, should B pay the purchase price?

a. No even if the fire is due ty the fault of 8.
b. Yes even ifB signifies his approval before the fire
¢. No if B does net signify his auproval before the fire because & is aot yet the
owner,
d. Yes because B becomes the owner of the calculator upon delivery.

109, When the goods are already delivered io the comer or other Seliee for purpose
of transmission to the
buyer, who owns the g00ds after the receipt by the carrier or oiier oailee as a
peneral rule?
a. Buyer
b. Seller
c. Carrier
d. Other bailee

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VEAL SS Tae

oy 34
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110.ets re eee we He excoptional instances wherein the ownership of goods is
retained by the seller
ri ey eae ailee for Purpose of transmission to the buyer, except

a. When there is stipulation

b, When by the terms of th Amen ip is retained by the seller despite delivery to

the carrier or bailes.
ae of the seller or his per of lading, the goods are to be delivered to the seller
or his agent or to the
c. en by th i i
but the bill of tad of the bill of lading, the goods are to be delivered to the
order of the buyer or his agent
a lee a te ading 18 retained by the seller or his agent.

, oichange oitean on the buyer a bill of exchange for the price of the goods and
transmits the bill of
~ nd the bill of lading to the buyer wto secure acceptance or payment of the bill
of exchange, but
uyer dishonors such bill of exchange.

111. en the bill of lading is negotiated to a purchaser for value in good faith.

a bye i ree sold and delivered by a person who is not the owner thereof, what title
is acquired by
a. He acquires no better title that the seller had.
b. He acquires a perfectly valid title,
c. He acquires a voidable title,
d, He acquires a rescissible title,

112. The following are the exceptional instances when a non-owner seller may
transfer title to the buyer,
a. When the sale is made with authority or consent of the owner.
b. When the owner is precluded by his conduct from denying the seller's authority
to sell.
c. When the sale is made under the provisions of any factor’s acts, recording laws
or any other provisions of
law enabling the apparent owner to dispose of the goods as if he were the true
owner thereof
d. When the sale is made under a statutory power of sale or under the order of
court of competent
jurisdiction.
When the purchase is made in a merchant’s store, or in fairs, or markets.
When the sale of personal property is made by a thief or robber to a purchaser in
good faith and for value.

rh oe

Oe ree

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

was stolen. Which of the following statements is correct?

a. B acquires title to the ring if he is a purchaser in good faith.
b. Ocannot recover the ring from B if he will not reimburse B for P500.
ce. Ocan recover the ring from B even if he will not reimburse B for PS500.
d. B will acquire title to the ring if he will not be prosecuted
114, Using the same data in preceding number but assuming B was able to purchase
the stolen ring at a public
sale in good faith for P1,000. Which statements is correct?
a. Ocannot recover the ring from B even he is willing to reimburse B for P1,000.
b. Ocan recover the ring from B but he must reimburse B for P1,000.
c. Bcannot obtain good title from the goods even if he is in good faith.
d. B will have better right than O in any instances.

115. Using the same data in preceding number and suppose the ring found its way in
a jewelry store and it was
from that jewelry store that B bought the ring in good faith. Which of the
following statements is true?
a. Ocan recover the ring from B upon payment of purchase price.
B does not acquire title over the ring because it was stolen.
B acquires title to the ring because the purchase is made from a merchant's store,

O has better title over the ring as against B.

b.
c. fair or market.

d.

116. Lebron is is the regitered owner of a vacant lot. Kevin stole the certificate
of title of the registered lot of
Lebron and through connivance with a notary public, he was able to execute a
notarized deed of sale through
forging the signature of Lebron. With connivance with a Registry of Deeds, Kevin
was able to transfer the title of

the lot to his name. Afterwards, Kevin sold the said lot to Carmelo who acquired
the said lot after inspecting the
title and the vacant lot. Carmelo is a purchaser in good faith and for value. Which
of the following statements 1s

correct?
a. The contract of sale between Kevin and Carmelo is void because it is the product
of a previous void
,

contract.

b. Lebron can recover the land from Carmel

without reimbursing Carmelo.

c. Lebron can recover the land from Carmelo\provi

d. Lebron cannot recover the land from Carmelo because a

registered lot, can be a root of a valid title if the title is already in

good faith.

o because the title acquired by Carmelo is that of a thief even

ded he will reimburse him for the price Carmelo paid.

forged document or deed of sale, in case of

the hand of a purchaser for value and in
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atin nai

117. Manny, a Filipino, sold his private land to Ippo, a Ja

executed. Which of the follow ing statements is correct?

4. The contract of sale is void because it is violative of Constitutional provision

a
land by foreigners. Therefore, Manny cannot ask for declaration of nullity t
delicto.

b. The contract of sale is unenforceable because it is violative of Constitutional

of private land by foreigners.

© Ownership of the land will tra

is already executed.

d. Manny can still recover the land by filing an action for declaratio
delicto is not applicable in the case since it will frustrate the State

Panesé national. The contract of sale has already been

gainst ownership of private

ecaulse of principle of pari

provision against ownership

Nsfer to Ippon and the contracts Can no longer be avoided since the contract

n of nullity because the principle of pari

policy to reserve the land to Filipinos

118. Naruto, a Filipino, sold his Private land to Hinata, a Japanese national,
Afterwards, Hinata sold the said
Private land to Kakashi, a Filipino, Which of the following statements is correct?

4 Both contracts of sale are subject to declaration of nullity because they are
violative of Constitutional
provision against Ownership of private Jand by foreigners.

b. Both contracts of sale are unenforceable because they are violative of

Constitutional provision against
ownership of private land by foreigners,

c. Ownership of the land will transfer to Kakashi and the contracts cannot be
finally with a Filipino.

d. The second contract of sale is void because it is the product of the first
contract of sale.

avoided since the land js

:500.00 to B, 30 years old, The guardian of $ was not aware

of the sale; hence, no action for annulment has yet been filed, Subsequently, B
sold the watch to T, who acquired
it in good faith. Which of the following statements is correct?

& T acquires no title to the watch because the Seller's title is voidable.
b. T acquires good title to the watch even if he buys it in bad faith,

119. d.T acquires good title to the watch even if the voidable title of the seller
has been avoided before the time
of sale as long as T acquires the watch in good faith, for value and without notice
of seller’s defect of
ttle.

gd. T acquires good title to the watch even if the seller's title is voidable
Provided the same has not been

avoided at the time of sale and T acquires the watch in good faith, for value and
without notice of seller’s
defect of title.

119. d.

120. The following are the rules on the place of delivery of the goods ina contract
of sale, except
Place stipulated in the contract.

a.
b. In case there is no stipulation as to the place of delivery, place fixed by
usage or trade.
c. In the absence of a and b, the seller’s place of business if he has one; if
none, the seller's place of

residence
d. In the case of Specific goods, the place where the goods are located at the time
of perfection of contract of
sale.
€. In the absence of a and b, the buyer's place of business if he has one: if none,
the buyer’s place of
residence,

121. In case the time for the delivery of goods is not Stipulated, what is the time
for its delivery?
a. At the end of the month.
b. At the end of the year.
c. At the end of the day.
d. Within reasonable time from the execution of the contract.

122. In the absence of stipulation to the contrary, who shall bear the expenses of
delivery and incidental €xpenses to putting the goods into a deliverable state?
a. Buyer and Seller equally

b. Seller

¢. Buyer

d. Government

; i i i cl . The following

123. As a general rule, the seller shall deliver the thing sold upon perfection of
contract of sale
are the instances when a vendor is not bound to deliver the thing sold after the
perfection of contract of sale,
except — .
\ a. If the vendee/buyer has not paid him the price.

b. If no period for payment of the price has been fixed in the contract. a
c. If the vendee/buver loses the right to make use of the period such as becoming
insolvent.
d. Ifa period has been fixed for the payment of the price.

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124. What are the rights of the buyer when the quantity or quality of goods
delivered is different from that which the seller contracted to sell?
I Reject the goods.
I. Accept the goods and pay the contract rate of the delivered goods.
a. Tonly
b. [only

c. Either I or Il
d, Neither [nor Il

125. When the quantity delivered is more than that which the parties agreed upon,
the following are the nights
of the buyer, except
Accept the goods agreed upon and reject the rest.

a.
b. Accept the whole of the goods delivered and pay for them at the contract rate.
¢, Reject the whole of the goods if they are indivisible.

d. Reject the whole of the goods if they are divisible.

126. When the seller delivers the goods agreed upon but are mixed with goods of
different description, what are the rights of the buyer?
1. Accept the goods agreed upon and reject the rest, if tho sale is divisible.
Il. Reject the whole of the goods, if the sale is indivisible.
a. Tonly
b. only
c. Neither I nor II
d, Either [ or Il

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

directly responsible for the price, or any other person who is in the position of a
seller.

a. Unpaid seller
b. Unsatisfied buyer
c. Satisfied seller
d. Satisfied buyer
128, The following are the rights of the unpaid seller, except
t to retain the goods while he is in possession of them.

Possessory lien, or a lien on the goods or righ

Right of stoppage in transitu. |
Right of resale.

Right to rescind the sale.

e. Right to declare the sale null and void.

e oa op
129. The following are the grounds for the exercise by the unpaid seller of his
possessory lien or right to retain the goods, except
a. Where the goods have been sold without any stipulation as to credit.

Where the goods are perishable in nature.

Where the goods have been sold on credit, but the credit term has expired.

Where the buyer is insolvent. |

loses his right to possessory lien on the goods in the following cases or these are
the
longer exercise his right to retain the goods, except

a. When the seller obtains judgment or decree for the price of the goods.
b. When the seller delivers the goods to a carrier or other bailce for the purpose
of transmission to the buyer

without reserving the ownership in the goods or the right to the possession
thereof.
c, When the buyer or his agent lawfully obtains possession of the goods.
d. By waiver of the possessory lien.

b.
c.
d.

130. The unpaid seller

instances when the unpaid seller can no loses his right to possessory lien on the
goods in the following cases or these are the
longer exercise his right to retain the goods, except

131. It refers to the right of the unpaid seller to resume possession of the goods
at any time while they are in
transit, and he will them become entitled to the goods as he would have had if he
had never parted with the
possession. This right is available after the unpaid seller has parted with the
possession of the goods and the buyer

is or becomes insolvent.
Possessory lien, or a lien on the goods or right to retain them while he is in
possession of them,

Right of stoppage in transitu.

Right of resale.
Right to rescind the sale.

ao op

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oogre

133.
of his

132. What is the ground before the unpaid selier may exercise his right in stoppage
in transity?
When the goods are perishable in nature

When the goods are sold without stipulation as to credit

When the buyer is or becomes insolvent

When the goods have been sold on credit but the erm has expired

133. of stoppage in iransitu is exorcised by obtaining actual POSsession G

f the goods or by yivi

j t ) j . . ving notice
claim to the carrier or other bailee in whose possession the goods are ‘The ned

following ave the effects of the

exercise of right of stoppage in transitu, except

a, The goods are no longer in transit

b. The contract of carriage ceases and the carrier shalt he liable as depositary or
other bailee
c. The carrier must deliver the goods to or according to the instructions of the
seller,
d. The carrier must deliver the goods to the buyer.

134, When notice of stoppage in transitu is given by the seller to the carrier, of
other bail sensi
goods, he must redeliver the goods to, or according to the directions of, the
seller. Who shall pay for the en of the
of the delivery? —
a. Seller
>. Buyer
c. Seller and buyer proportionately
d. Cactier

135, When are the goods still in transit which will allow the unpaid setler to
exercise his right to stoppage in
transitu?
L. From the time they are delivered to the carrier or other bailee for the Purpose
of transmission to the buyer
until the buyer or his agent, takes delivery of them from such carrier or other
bailee. ,
I. If the goods are rejected by the buyer, and the carrier or other baiice
continues in possession of them, even if
the seller has refused to receive them back. ,
a. Tonly
b. Honly
c. Neither] nor II
d. Both I and IT
136. The following are the instances when goods are no longer in iransit and
therefore the unpaid seller can no
longer exercise his right of stoppage in transitu, except
a. It the buyer obtains delivery of the goods before arrivel at the appointed
destination.
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he
is holding the goods in his
behalf, after arrival of the goods at their appointed destination,
c. Ifthe carrier or other bailee wrongfully refuses to deliver the goods to buyer
or his agent.
d. ifthe 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.

137. The following are the grounds for the exercise of right of resale by the
unpaid seller, except
a. The goods are of perishable nature.
b. The seller has expressly reserved the right to ceseil the goods in case the
buyer should make default,
¢. The buyer has been in default for aa unrezsonsble time,
d. The buyer becomes insolvent,

138. The following are the requisites for right of resale ta be ava‘table to an
unpaid seller, except
a. The buyer has defaulted in the payzvent of the purchase price,
b, The seller has no right of lien nor has stopped ths goods i. Lrangitu,
¢. Title to the goods has passed on to the buyer.
d. The grounds must be those provided by law

139, It is not essential to the validity of resale that notice of an intention to

resell the goods be given by the

seller to the original buyer, When shall the giving of notice of un intentiog 19
resell be celevant in the exercise by
the unpaid seller of right tu resell?

b.
c.
d,

When the goods are of perishable naiure.

When the buyer becomes insolvent

When the seller has expressly reserved the rigii to sescll dhe goods m case the
buyer should make default.
When the buyer has been on default tor an vpreasonubie time

i ; “ig ene " o

140. Where shali the reselling be made in cese ihe unpaid veller exercises his
right of resale?
Public sale
Private sale
Either public sale or private sale

. Neither public sale nor private sole

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The unpaid seller is bound to exercise reasonable care and judgment in making the
resale. He cannot,

14l. . a
directly or indirectly, buy the goods. The following are the effects of resale,
except
a. The seller shall not be liable to the original buyer for the delivery of the
goods
b. The seller may recover damages from the original buyer for any loss occasioned
by the breach of the

contract of sale.
The original buyer shall be entitled for any profit made by such resale,

The new buyer acquires a good title against the original buyer,

as

142. The following are the requisites for right to rescind the sale to be avai i

: 8a : available to an unpa c
The buyer has defaulted in the payment of the purchase price. res cmp nelehs wneags
The seller has no right of lien nor has stopped the goods in transitu.

c.Title to the goods has passed on to the buyer.

The grounds must be: 1.) The seller has expressly reserved the right to rescind the
sale in case the buyer

should make default or 2.) the buyer has been in default in the payment of the
price for an unreasonable

time.

142.

acoe

143. The following are the effect of rescission of contract of sale by the unpaid
seller, except

The seller shall not be liable to the buyer upon the contract of sale.
The seller may recover from the buyer darnages for any loss occasioned by the
breach of contract of sale.

The seller resumes ownership of the goods.

The buyer shall pay for the purchase price,

correct concerning the right of unpaid seller?

transitu is not affected by any sale, or other disposition of

the seller has assented thereto.

aos >

144. Which of the following statements is

The unpaid seller's right of lien or stoppage in

the goods which the buyer may have made, unless

b. If, however, a negotiable document of title has been issued for goods, no
seller's lien or right of stoppage

in transitu shall defeat the right of any purchaser for value in good faith to whom
such document has been
negotiated, whether such he notification to the carrier, or other

negotiation be prior or subsequent to t ¢

bailee who issued such document, of the seller's claim to a lien or right of
stoppage in transitu.
Both A and B

¢.
d, Neither A nor B

145. In a sale of real estate with a statement of its area at the rate of a certain
price per unit of measure or
number, the vendor shall deliver the area mentioned in the contract of sale. What
is the remedy of the buyer if the
actual area is less than by an area less than 1/10 of that stated in the contract?
a. Ask for proportionate reduction in the price.
b. Ask for rescission of the contract of sale. |
c. Either A or B
d. Ask for declaration of nullity of the contract of sale.

146, Using the same data in number 145, what is the remedy of the buyer if the
actual area is less than by 1/10
or more of that stated in the contract?

a. Ask for proportionate reduction in the price.

b. Ask for rescission of the contract of sale.

c. Hither A or B

4. Ask for declaration of nullity of the contrast of sale.

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

stated in the contract?

I. Accept the area stated in the contract and reject the rest.
IL. Accept the whole are and pay for them at the contract rate.

a. Tonly

b. Ionly

c. Either I or IT
d, Neither J nor II

if the area is the same but a part of

148, Using the same data in number 145, what is the remedy of the buyer
r value is 1/10 or less of the price

the immovable is not of the same quality specified in the contract and the inferio
agreed upon?

a. Ask for proportionate reduction in the price.

b. Ask for rescission of the contract of sale.

c. Either A or B
d. Ask for declaration of nullity of the contract of sale.

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149. the immovable is not of the sane quality specified in the coutract and the
Inferior value is inore than 4/10 of the
price agreed upon?

fs

an

150

the vendor is bound to deliver all that itis included with's the bound
greater of less area or number than that stated in the contract. What ot

Using the same data in number 145, what is the remedy of the buyer if the area is
the same but a part of

Ask for proportionate reduction in the price.

Ask for rescission of the contract of sale

Either A or B

Ask for declaration of nullity of the contract of sale

In sale of real estate for a lump sum and not at the rate of a certain sum for 8
unit Of measure of hurmber,

artes stated in the contract although there be

nount shall be paid by the vendee or buyer?

4 The limp sum stipulated in the contract with increase in the price if the area is
greater than thot stated in
the contract, t
b. The lump sum stipulated in the contract with decrease in the price if the area
18 less than that stated in the \
vontraet
& The lump sum sipulated in the contract with fo Increase or decrease in the price
although there be greater
or less area or number than that stated in the contract,

151, Using the same data in number 150, what js the remedy of the buyer if the
vendor does not deliver the
area within the boundaries in the contract?
1, Ask for proportionate reduction in the price
Il. Rescind the contract
a. Tonly
b. Nonly *
c. Neither 1 nor I] }
d. Either 1 or! ;

152. What is the prescriptive period for filing the legal action concerning numbers
145-15]?
a. 6 months from the date of delivery
b. 12 months from the date of delivery
¢. 3 months from the date of delivery
d. 1 month from the date of Gelivery
153. The following are the requisites oz elements of double Sale, except
a. Two or more valid contracts of sale occurred.
b. Two ot more contracts of sale ust pertain to exactly the same subject matter,
¢. Two or more buyers at odds over the rightful Ownership of the subject matter
must each represent
conflicting interests.
d. Two or taore buyers at odds over the rightful ownership of the subject matter
must each have brought
from: the very same seller,
€. Two or more buyers must have al! fully paid the price of the contract of sale,

154, Which contract will be covered by the provision ov mle on double sale?
a. Contract of sale
b. Contract to sell
¢. Both A and B
d. Neither A nor B

155, In case of double sale of personal property, who amoug the buyers sha!l be
preferred?
a. Persen who first took Possession, actually or constructively, of the property in
good faith.
b. Person who has oldest title,
¢. Person who has the latest title,
d. Person who first re gistered the property in good faith

156. S sold his ring te B who teid § that ha would cbtain delivery of the ring
after 3 days. Before the third day,
S sold the same ring to % whe immedietely tock physical possession of tie ring. X
was not aware of the previous
sale to B. Who has a better rizhi over the ring’?
a. B because he has the older title.
b. B because X has not registred the ring ir poud faivh.
c. X because he fiest took possession of the ridy in wood faith
d. X even if he took possession of the ring in good fhith
\
\
\ A
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157. § sold his watch to B in a public docume ?
4 nt. However, B informed § j ;
i$ of the watch after 3 days. The day after the same to B, § sold the same watch x
naps cae ttiivary
immediately took possession of the watch. X was not aware of the same to B Who
tisaboue teen and X
' ‘ er right over the

watch?
a. B because he has the older title,

b. B because he first took constructive possession of the watch in good faith

c. X because he first took actual possession of the watch in good faith.
d. X because X has not registered the watch In good faith,

158. In case of double sale of registered or titled immovable property, who among
the buyer shall be
' or sha

preferred?
a. Person who in good faith first registered the sale.
b. Person who first took possession in good faith.
c, Person who presents the oldest title in good faith.

d. Person who has the latest title.

159, On May 1, § sold his registered/titled lot to X. the deed of sale was in a
private instrument. On May 3, 8
sold the same lot to Y in a public instrument. On May 5, S sold again the said lot
to Z in a public instrument. Z
immediately registered the sale with Register of Deeds on May 5. X took actual
possession of the lot on May 6.
X, Y and Z were not aware of the sale made to others, Who among the buyer has the
better right?

X because he first took actual possession in good faith.

a.
b, X because he has the oldest title in good faith.
c. Y because he first took constructive possession in good faith.
d. Zbecause he is the first registrant in good faith.

160. Using the same data in number 159 but assuming Z is in bad faith, who has the
better right?
a, Z because he is the first registrant in bad faith.
b. X because he first took actual possession in good faith,
c. X because he has the oldest title in good faith.
d. Y because he first took constructive possession in good faith.

161. Using the same data in number 159 but assuming Z and Y are in bad faith, who
has the better right?
a. Z because he is the first registrant in bad faith.
b. X because he has the oldest title in good faith.
c. Y because he first took constructive possession in bad faith.
162. On March 1, S sold his unregistered lot to X. the deed of sale was in a
private instrument. On May 5, 5

private instrument, Z immediately registered the sale with Register of Deeds on

sold again the said lot to Z ina

of the sale made to others. Who

May 5. X took actual possession of the lot on May 6. X and Z were not aware
among the buyer has the better right?

a. X because he has the older title in good faith.

b. Z because he first took constructive possession in good faith.

c. Z because he is the first registrant in good faith.

163. The following are considered natural elements or implied warranties in a

contract of sale, except
Warranty against eviction

Warranty against hidden defects

Warranty against undeclared and non-apparent charge or encumbrance or servitude

Warranty for merchantability

E, Warranty for sale’s talk or usual exaggeration in trade

cao tp

164.0 The following are the effects if the suspensive condition in a contract of
sale subject to a suspensive
condition is not fulfilled, except
a. The other party may refuse to proceed with the contract.
b, The non-performance of condition may be treated as a breach of warranty.
c. The other party may waive the performance of the condition.
d. The contract of sale is perfected if the condition is suspensive.

165. ane amg persons shall not be liable for bredch of warranty in a contract of
sale, except
er

Auctioneer

Mortgagee

Pledgee

Seller

Other persons professing to sell by virtue of authority in fact or law.

meoacgop

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Regulatory Framework for Business Transactions RFBT 8504 Page 21 of 34
166. It refers to the deprivation of the vendee of the whole or a part of the thing
sold by virtue of a final
judgment based on a right prior to the sale or an act imputable to the vendor.
a. Breach of contract
b. Evasion of sentence

c, Eviction
d, Damages
167, The following are the requisites in order that the seller's warranty against
eviction may be enforced,
except

a. There must be a final judgment depriving the vendee of the whole Or part of the
thing sald,
b. The vendee must appeal from the decision or judgment depriving him of the thing
sold

¢, The deprivation is based on a right prior to the sale or an act imputable to the
vendor,

d. The vendor must have been notified of the suit for eviction at the instance of
the vendee,

168. When adverse possession of the thing subject of the contract of sale had been
commenced before the sale
but the preseriptive period is completed after the transfer, which is correct?
4. The vendor is liable for eviction on ly if there is expressed warranty for
eviction.
b. The vendor is liable for eviction even if there is no expressed warranty for
eviction.
¢. The vendor is not liable for eviction,
d, The vendor shall always be linble for eviction,

169, Which of the following are other instances when seller is liable for breach of
warranty against eviction?
I. If the property is sold for non-payment of taxes due and not made known to the
vendee before the sale,
Tl, In case of judicial sales unless otherwise decreed in the judgment.
a. Tonly
b. only
c. Both I and II
d. Neither I nor Il
170. Which stipulation is considered void?
a. Stipulation exempting a vendor from the obligation to answer for eviction even
he is in good faith.
b. Stipulation exempting a vendor from the obligation to answer for eviction if he
is in good faith.
¢. Stipulation exempting a vendor from the obligation to answer for eviction if he
acted in bad faith.
d. Stipulation exempting a vendor from the obligation to answer for eviction
because it is contrary to public
policy to waive a natural element.

171. If there is stipulation exempting the vendor from the obligation to answer for
eviction and the vendor

acted in bad faith because he had knowledge at the time of the sale of the
existence of the fact, to what extent shall
the vendor be liable to the vendee in case of eviction?
Value of the thing at the time of eviction.
Income or fruits of the thing.
Cost of suit caused by eviction.
Expenses of the contract if the vendee has paid them,
Damages, interests and ornamental expenses,
I, land Il
I, TI, 1 and IV
Il, TH, IV and V
I, I, WI, IV and V

<28°

ago

172, If there is stipulation exempting the vendor from the obligation to answer for
eviction and the vendor
acted in good faith and the waiver by vendee/buyer is without the knowledge of the
risk of eviction also known as
waiver consciente, what shall be the liability of the vendor in case of eviction?

a. Vendor shall be liable for value of the things at the time of eviction plus
income or fruits.
b. Vendor shall be liable for value of the things at the time of eviction,

c. Vendor shall be liable for value of the things, income or fruits and damages and
interest,
d. Vendor shall not be liable for anything.

173, If there is stipulation exempting the vendor from the obligation to answer for
eviction and the vendor
acted in good faith and the waiver by vendee/buye? is with the knowledge of the
risk of eviction also known as
waiver intencionada, what shall be the liability of the vendor in case of
eviction? .

a. Vendor shall be liable for value of the things at the time of eviction plus
income or fruits,

b. Vendor shall be liable for value of the things at the time of eviction, ;

¢. Vendor shall be liable for value of the things, income or fruits and damages and
interest.

d. Vendor shall not be liable for anything.

oA

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“Wtory Framework for Business Transactions |'RFBT 8504
In case of doubt or ambigui ; .
174. esumed 10 be guilty, the walver by the vendee/buyer of the warranty against
eviction is
a, Waiver consciente
b, Waiver intencionada
c. Waiver sobrente
d. Waiver alluna

175. Where no warranty against eviction has been agreed , .

vendor from liability and the vendor acted in bad faith, sr obit ictal thall tae :
jo —— oxsunpting the
case of eviction? endor be liahle to the vendee in
L Value of the thing at the time of eviction,

Il. Income or fruits of the thing.

Ill. Cost of suit caused by eviction.

IV. Expenses of the contract if the vendee has paid them.

Vv. Damages, interests and ornamental expenses,

1, Hand Tl

b. 1, U, Wand IV

c. Il, Hl, lV and V

d. 1,11, Ml, IV and V

>

eon agreed upon or there was no stipulation exempting the

176. Where no warranty against eviction has |b

th, to what extent shall the vendor be liable to the vendee in

vendor from liability and the vendor acted in good fai

case of eviction?
I. Value of the thing at the time of eviction.
Il. __ Income or fruits of the thing.
IU. Cost of suit caused by eviction.
TV. Expenses of the contract if the vendee has paid them.
Vv. Damages, interests and ornamental expenses. |

a. 1, [and II

b. 1, 1, Mand IV
c. 0,1, IVandV
d. 1,01, D1, [IV and V

vendee loses, by reason of eviction, a part of the thing sold

177. What shall be the remedies of the buyer if the

d not have bought it without said part?

of such importance, in relation to the whole, that he woul

L Rescission of the contract
I. Enforcement of the vendor’s liability for eviction
a. Ionly
b. Tonly
c. Either I or II
d. Neither I nor II

178. It is an encumbrance imposed upon an immovable for the benefit of another

immovable belonging to a
different owner.
a. Easement or servitude
b. Mortgage
c. Pledge |
d. Lien |

179, The following are the requisites for vendbr’s liability should the immovable
sold be encumbered with

easement or servitude, except

a. The easement must be non-apparent.
b, It must not have been mentioned in the agreement.
c. It must be of such nature that it must be presume!
immovable had he been aware thereof.
d. It must be registered.

d that the vendee would not have acquired the

180. What is the presoriptive period for the warranty against hidden or non-
apparent burden, encumbrances or

servitude on immovable?
a. 6 months from the execution of deed of sale or discovery of encumbrance or
burden
b, 40 days from the execution of deed of sale or discovery of encumbrance or burden
c. 1 year from the execution of deed of sale or discovery of encumbrance or burden
d. 3 days from the execution of deed of sale or discovery of encumbrance or burden

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181. What are the remedies of the buyer should the immovable soké be encumbered
with any non-apparent
easement or servitude within one year from the execution of the deed of sale’?

L Rescission of the contract of sale,

I Indemnification for damages

a. lonty

b. only

Either Lor I]
Neither | nor II

182. What are the remedies of the buyer should the immovable sold he encumbered
with any
easement or servitude within one year trom the discovery uf burden or tervitude if
the one
execution of deed of sale has already lapsed?

hOf-apparent
year period from the

lL. Reseission of the contract of sale,

u Indeninification for damages within one year from discovery of casement
a lonly
b. Tonly
c. Either] or Il
d. Neither | nor I

183. Which of the following statements is incorrect?

a. Where the buyer, expressly or by implication, makes known to the seller the
particular purpose for which
the goods are acquired, and it appears that the buyer relies on the seller's skill
or judgment (whether he be
the grower or manufacturer or not), there is an implied warranty that the goods
shall be reasonably fit for
such purpose. (warranty for particular purpose)

Where the goods are brought by description from a seller who deals in goods of that
description (whether

he be the grower or manufacturer or not), there is an implied warranty that the

goods shall be of

merchantable quality. (warranty for merchantable quality)

c. In the case of a contract of sale by semple, if the seller is a dealer in goods

of that kind, there is an implied
warranty that the goods shall be free from any defect rendering them unmerchantable
which would not be
apparent on reasonable examination of the sample. (warranty for merchantability)

d. In the case of contract of sale of a specified article under its patent or other
trade name, there is warranty
as to its fimess for any particular purpose, unless there is a stipulation to the
contrary. (warranty for
particular purpose)

&

184, The following are the requisites for enforcement of vendor’s liability against
hidden defects, except

The defect must exist after the date of sale.

The defect must be hidden.

c. The defect must render the thiag unfit for the use for which it is intended or
diminishes its fitness for such
us€ to such an extent that had the vendee been aware thereof, he would not have
acquired it or would have
given a lower price for it.

d. The action to enforce it must be made within the veiled urovided by law,

rs P

hidden defects is incorrect?

cts in the thing sold, even though he

185. Which of the following statements concerning tiabili

a. The vendor shail be liable to the vendee for any hi

was not aware thereo!.

b. The vendor shall not be fighle if there is 2 stipulation exempting him from such
defects and he was not
aware thereof.

¢. The vendor shall be liavie to the verdes for any hisiden fantts ov dleigets in
the thing sold only if he was
aware thereof.

d. The vendor shall ve fiable for hidden defects even thure is stipulation
exempting him from such defects if
he was aware thereof,

186. This is one of the two remedies of the vendes in case of breach of warranties
against hidden defects, of
merchantability, of merchantable quality or fitness for @ particular purpose. it
refers te the withdrawal from the
contract or rescission.

a, Accion quanti minoris

b. Accion redhibitoria
c. Accion pauliana

d. Accion subrogatoria

187. This is one of the two remedies of the vendee in case of breach of warrantios
aginst hiiden defects, of
merchantability, of merchantable quality ov fitness for 2 particular purpese. It
refers to demanding a prop

reduction in the price.

a. Accion quanti minoris

b. Accion redhibitoria

¢. Accion pauliana

4. Accion subrogatoria

TS
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188. when the thing sold and delivered to buyer contains hidd . .
8% gainst hidden defect, when shall the seller be liable for the loss of the thine
wold aith h id walves of the warrsaty
a, The seller shall only be liable if the reason of the loss is the hidden defect
minion. deteck?
b. The seller shall only be liable if the reason of the loss is a fortuitous event.
c. The seller shall only be liable if the reason of the loss is the fault of buyer
d, The seller shall be liable regardless of the reason of the loss.
| be the extent of linbility of the vendor in case of loss of the thing with hidden
defects wh
- erein

the vendor was aware of the defect and the cause of the loss is the defect?
a. Return the price, refund the expenses of the contract and pay damages,

b. Return the price and refund expenses of the contract.

¢, Return the price, refund the expenses of the contract and pay interest of the
price.
d

Return the price.

139. What shal

190.. What shall be the extent of liability of the vendor in case of loss of the
thing with hidden defects wherein the vendor was not aware of the defects and the
cause of the loss is the defect?
a. Return the price, refund the expenses of the contract and pay damages.

b, Return the price and refund expenses of the contract.

c. Return the price, refund the expenses of the contract and pay interest of the
price.

d, Return the price.

ing with hidden defects wherein

vendar in case of loss of the thi

the fault of the vendee?

191. What shall be the extent of liability of the

f the loss is a fortuitous event or the vendor was aware of the defect and the
cause 0

a, To return the price paid and to pay damages.

b. To return the price paid less the value of the thing at the time of loss and to
pay damages.

c. Toreturn the price paid less the value of the thing at the time of loss.

d, To pay damages.
of the thing with hidden defects wherein

|
ity of the vendor in case of loss
itous event or the fault of the vendee?
192, What shall be the extent of liabil
d the cause of the loss is a fortul

the vendor was not aware of the defect an

a. Toretum the price paid and to pay damages.
b. To return the price paid less the value of the thing at the time of loss and to
pay damages.
c. Toreturn the price paid less the value of the thing at the time of loss.

d. To pay damages.

193. What is the prescriptive period of the accion redhibitoria, accion quanti
minoris or all other actions to

enforce the seller's liability for hidden defect?

a. 1 year from the delivery of the thing sold
b. | month from the delivery of the thing sold
c. 6months from the delivery of the thing sold
d. 3 months from the delivery of the thing sold

194, It refers to a defect in an animal and it is of such nature that expert

knowledge, even after a professional

inspection has been made, is not sufficient to discover it.

a. Hidden defect
b. Apparent defect
c. Known defect
d. Redhibitory defect

for a separate price for each of them,

195. If two or more animals are sold together, whether for a lump sum or
he remedies of the buyer?

the redhibitory defect of one shal! only give rise to its redhibition. What are t
L Accion redhibitoria over the defective animal. |
Il. Accion quanti minoris.
a. lonly
b. IL only
c. Neither [ nor II
d. Either I or Il

196. If the redhibitory defect of one ani ive ri ibiti i i i

fsweoeh oak, wha my © batomennr ine rise to the redhibition of all the animals
sold, including
L Acction redhibitoria
Il. Accion quanti minoris
a. lonly
b. ILonly
c. Neither I nor II
d. Either J or I

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197. What is the prescriptive period of redhlbitory action in case of animal?

a. 30 days from the delivery of animal to the vendec.
b. 20 days from delivery of animal to the vendee.
©. 40 days from delivery of animal to the vendee,
d. 10 days from delivery of animal to the vendee.

198. In which of the following sale of animals will there be na warranty for hidden
defects?
a. Sale of animals at fairs
b. Sale of animal at public auctions
ce. Sale of live stooks as condemned
d, Any of the above

199, What is the status of the contract of sale when the animals are suffering from
contagious diseases or when
the animals are found to be unfit for the use of service for which they were
acquired as stated in the contract?
a. Void
b. Voidable
c. Rescissible

d. Unenforceable

200, The following are the requisites in order for the vendor to be liable in case
the animal dies of disease,

except
a. The disease exists at the time of sale.
b. The disease is the cause of death of the animal.
c. The animal dies within 3 days from time of purchase.
d. The disease is redhibitory.

20], The vendee has the obligation to accept the delivery of the thing sold. The
following are the instances

when the buyer is deemed to have accepted the goods, except

a. When he intimates to the seller that he is accepting them.
b. When he does an act in relation to the goods which is inconsistent with the
ownership of the seller.

¢. When he pays the purchase price,

d. When he retains the goods after the lapse of a reasonable time without
intimating to the seller that he has

rejected them.

202. May the seller compel the buyer to accent delivery of goods in installments?
No, as a general rule, unless there is a stipulation for installment delivery.

No under all instances,

Yes, as a general rule, unless there is a stipulation to the contrary.

Yes under ail instances.

aos

203. If there is stipulation for installment delivery, aud the soller makes
defective deliverias in respect of one
or more installments, or the buyer neglects or refuses without Juct ceuse to take
delivery of or pay one or more
installments, what are the remedies of injured party?

. Refuse to proceed with the contract and sue {or dameges for breach of the entire
contract,

I. Claim compensation for damages if the breach is severable.

a. Either I or Il
b. Neither I nor Il
c. Tonly

d. Ionly

204, May the buyer examine the goods befove secepting them?

No, as a general rule, unless there is a stipulation for examination

No under al! instances.

Yes, as a general rule, unless the exceptional cases apply,

Yes under all instances.

BO os &

205. The following are the exceptions! instances wien the buyer cannot examine the
goods before accepting

them, except
a. When there is en agreement that the Guyer cannot exanine the goods
b. When there is stipulation that the goods shali not be delivered to the b
¢. When the goods are inarzed with the words collect on delivery
d. When the usage of wade permits exaraination,

before accepting them.

ayer until! he has paid the price.

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206.The following are the effects worn Ge 22327 refuses 80 accept cr
’ 3 i I) abt 22 Woo ’ .
306 the quantity 4s pot complete or the goods beang 6: cc are crs hoe tas ~
Teepe

5. Buyer has no duty to return goods to the seer unless "aT 2 4,

b, Title to the goods passes to the buyer

The buyer shall not be obliged to pay the proce

C.
d. If the buyer constitutes himself as depositary of the goods best be rt ot ae

207. The following are the effects when the buyer eer .
except
a. Title to the goods passes to the buyer from the moment the goods cre planed at
has Ne
b. The buyer shall be oblized to pay the price
to the coart aur va S trwrr 21 S97 =

c¢. The seller may consign oF deposit the determumaie Dig &

buyer.
g. The buyer shall be considered a depositary

208. The vendee has the obligation to pay the i pono ;

chall be that which is stipulated. In the absence se oh
made?

a. Atthe end of the month and st the residence of the seller

b. Atthe perfection of the contract and at the residence of the sciler
c, Atthe time and place of delivery of the thing.

209. As a general rule, the buyer is not ligble to pay interest after the delivery
of the gonds Gesp os aan eM

herein the buver shall pay interest for the pera between Oe

of the price. The following are the instances wherein

delivery of the thing and the payment of the price, except

a. If there is written stipulation or agreement for payment of interest and if the

rate ag MOE prey OAL FS
be 12% before July 1.2013 snd 6% afterwards.

If the thing sold produces fruits or income.

If the buyer is in default, from the time of judicis! or ewtrajudiocal cot

purchase price.

d. If the seller is in default in accepting psymeat

Seman] for DR PWAVITRONT ah se

210. The following ere the grounds for the suspension of the payment of the price
by the vende, except
a. Disturbance in the vendee’s possession oF ownership of the thing purchased.

b. Reasonable grounds to fear such disturbance, by a Vindicatery achon oF

foreclosure
Loss of the thing due to the fault of the vendee,

of mortgage

c
211. The following are the instances herein the right to suspend payment is not
available, except
a. Ifthe vendor gives security for the retum of the price.
b. Ifthere is reasonable grounds to fear disturbance in the veadee’s possession er
ownership,
nee of disturbance of

c. [fit has been stipulated that the vendee shall pay the price noowithstanding the
existe

danger.
g. If the disturbance is a mere act of trespass.

212.When shall the vendor be entitled or allowed to sue for immediate rescission of
the contact of sale of immovable?

a. If there are reasonable grounds to fear the loss of the immovable property sold
and its price.
b, If there are reasonable grounds to fear the loss of the immovable property sold.
c. Ifthere are reasonable grounds to fear the loss of the price.

213. In case there is reasonable ground to fear the loss of the immovable property
or its price, what shall be the
remedy of vendor? ,
a. Fulfillment of the contract with damages only.
b. Rescission of the contract with damages only.
c. Immediate rescission of the contract.
d. Fulfillment of the contract or rescission of the contract with damages in either
remedy.

214, . : . ye es
This agreement is considered void as it is against law and public policy. It reters
to an agreement between

the vendor and the vendee in the i F escissi Pri if

the weno andthe vende in ass pair es that rescission of the contract shall of right
take place if the
a. Pactum commissorium
b. Pacto de retro sale
c. Pactum agentum
d. Pacto solidarium

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\

215. May the vendee/buyer of an immovable still pay the purchase price after his
default in the due date if the

contract of sale stipulates that rescission of the contract shall of right take
place if the vendee fails to pay the price
at the time agreed upon?

a, Yes provided the payment is before the demand for rescission judicially or by
notarial act by the seller
b. No because the contract provides that rescission shall of right take place
&. Yes even if the contract is cancelled by final judgment
d, No because the buyer is already guilty of delay,

216. Which of the following are the grounds for immediate resclision of the sale of
a movable st vendor's
option?
] If at the time of the delivery of the thing, the vendee docs hot appear to
receive the thing
ll. If at the time of the delivery of the thing, the vendee having appeared, does
not pay the price, unless a longer
period is stipulated for its payment,

a. Tonly

b. Tonly

¢. Either Lor Il
d. Neither I nor Il

217. The following are the actions or remedies by the seller for breach of contract
of sale of goods committed
by the buyer, except

a. Maintain an action for the price of the goods if the buyer wrongfully neglects
or refuses to pay.

b. Maintain an action for damages if the buyer wrongfully neglects or refuses to

accept and pay for the
goods,

c. Rescind the contract if the buyer has repudiated the sale or manifested his
inability to perform his
obligation or has committed a breach of contract, where the goods have not been
delivered to buyer.

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

218. What action shall be filed by the buyer if the seller has breached the
contract to deliver specific or
ascertained goods?
a. Bring an action for declaration of nullity of contract.
b. Bring an action for specific performance.
c. Bring an action for annulment of contract.
d. Bring an action for rescission of contract.
219. In case of breach of warranty by the seller, the buyer may, at his election
brings the following actions,
except
a. Accept or keep the goods and set up against the seller the breach of warranty by
way of recoupment or
diminution or extinction of the price.
b. Accept or keep the goods and maintain an action against the seller for damages
for breach of warranty.
. Refuse to accept the goods, and maintain an action against the seller for damages
for breach of warranty.
d. Rescind the sale and refuse to receive the goods or if the goods have already
received, retum them or
offer to return them to the seller and recover the price of any part thereof which
has been paid.
e. Ask for annulment of the contract of sale plus damages.

ao

bh
NO
=

220.The following are the modes for extinguishment of contract of sale:

(ALL) No-Co-Me-Re-Pa-Lo-Pre-Re-Ful-An

. Cancellation of sale of personal property payable in installments

Resale of the goods by the unpaid seller

Rescission of the sale by the unpaid seller

Rescission by the buyer in case of partial eviction

Rescission by the buyer in case of breach of warranty against hidden defects

Rescission by the buyer of sale of animals with redhibitory defects

Rescission by the buyer of sale of land with non-apparent servitude or encumbrance

Rescission by the buyer of sale of land with lacking area or area with poor quality
By redemption, whether conventional redemption or legal redemption

oe ee

221, This type of redemption occurs when the vendor reserved the right to
repurchase the thing sold with the
obligation to return to the vendee the price of the sale, expenses of the contract
and necessary and useful expenses
made on the thing sold and to comply with othtr stipulations which may have been
agreed upon. This is
applicable in a contract of pacto de retro sale or sale with a right to repurchase.

a. Legal redemption

b. Conventional redemption

c. Redemption by operation of law

d. Judicial redemption
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222.If no period is stated in be i
te, ‘hat is the precipi pendant EN EE
~ § years from the date of the contract
B, 4 years from the date of the contract,
¢, 10 years from the date of the contract
d. 3 years from the date of the contract,

tA

223.If a period is stated in the agre i

a, enovnbl wht is the iain for the exercise of right of redemption in pacto de
retro sale of
» What is 'escriptive period allowed b 1
a, S years from the date of the contract, yew!
b. 4 years from the date of the contract.
¢, 10 years from the date of the contract,
d. 20 years from the date of the contract,

224. If judgment has been rendered by court declaring the contract to be pacto de
retro sale of immovable
instead of equitable mortgage, what is the period of redemption allowed to the
vendor a retro?
a, S years from the rendition of judgment
4 years from the rendition of judgment
10 years from the rendition of judgment
30 days from the rendition of judgment

>

af

225. In a pacto de retro sale, the following are the persons against whom the right
of repurchase may be
exercised, except 78
a, Against the vendee a retro or original vendec.
b. Against the several heirs of the vendee a retro for each heir’s share.
c. Against one heir of the vendee a retro for the whole property.
d. Against every possessor whose right is derived from the vendee a retro
the second contract of the right to repurchase and even if the right to repurchase
is not

Registry of Property.

even if no mention has made in

recorded in the

226. Ina pacto de retro sale, the following are the rules for redemption:

(ALL) a. Acco-owner of an undivided immovable which is essentially indivisible who

sells his share with a right to
repurchase to a third person who subsequently acquires the whole thereof, may be
compelled by the latter
to redeem the whole property, if the former wishes to make use of the right of
redemption.

If several persons, jointly and in the same contract, should sell an undivided
immovable with a right of
repurchase, none of them may exercise this right for more than his respective
share.
If the person who sold an immovable alone has left several heirs, each heir may
redeem only the part

which he may have acquired.

d. Incases of B and C, the vendee may demand that the co-owners or co-heirs come to
an agreement upon
the repurchase of the whole thing, and if they fail to do so, the vendee cannot be
compelled to consent to a

partial redemption.

e, Each one of the co

independently exercise the right of repurchase as regards his own share an

him to redeem the whole property.

>

-owners of an undivided immovable who may have sold his share separately, may
d the vendee cannot compel

227. In the exercise of the right of redemption or repurchase, what amount shall be
paid by the vendor a retro

to the vendee a retro? |

a. Price of the sale only |

b. Expenses of the contract and other legitimate payments by reason of the sale
only
c. Necessary and useful expenses made on the|thing sold only
d. All of the above |

228. If at the time of the execution of the pacto de retro sale there should be on
the land, visible or growing
fruits, who shall be entitled to those fruits which still exist at the time of
redemption by vendor a retro?
a. It shall inure to the benefit of the vendor a retro/redemptioner if no indemnity
was paid by the vendee a
retro when the pacto de retro sale was executed.

b. The vendor a retro/redemptioner shall reimburse the amount of the fruits to the
vendee a retro.
The fruits shall be prorated to the vendor a retro and vendee a retro based on the
prorated period of

228.

c.

possession.
d. It shall inure to the benefit of the vendee a retro considering that he has
previously obtained possession of

the goods.

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229, If at the time of the execution of the pacto de rete) sale there should be no
fruits on the land, who shall be
entitled to those fruits which still exist at the time of redemption by vendor a
retro?
a. It shall inure to the benefit of the vendor a retro/redemptioner if no indemnity
was paid hy the vendee a
retro when the pacto de retro sale was executed
b. The vendor a retro’redemptioner shall reimburse the amount of the fruits to the
vendee a retro
c. The fruits shall be prorated to the vendor a retro and vendee a retro based on
the prorated period of

possession
d. It shall inure to the benefit of the vendes a retro considering that he has
previously obtained possession of
the goods

230. Who among the following may use the right of redemption?
I Vendor a reiro or his heirs or assignees
I. Creditor of the vendor after he has exhausted the property of the vendor by
virtue of action subrogatoria
a, Lonly

b. Honly
¢. Either | or II
d. Neither | nor Il

231. This type of redemption is the right to be subrognted upon the seme terms and
conditions stipulated in the
contract, in the place of one who acquires a thing by purchave, or dation in
payment, or by any other transaction
whereby the ownership is transmitted by onerous title. This refers to the right of
a person to repurchase the
property transferred by another person by onerous title from the third person in
those exceptional instances
allowed hy law such as right of repurchase by a co-owner, adjoining rural lot owner
or adjoining urban lot owner.

a. Legal redemption

b. Conventicnal redemption
c. Voluntary

d. Judicial redemption

232, It refers to the right of adjoining urban land owner to be given the first
opportunity to purchase a piece of
urban land about to be resold which is so small and so situated that a major
portion thereof cannot be used for any
practical purpose within a reasonable time, having been bought merely for
speculation.

a, Right of legal redemption

b. Right of legal pre-emption
¢. Right of first refusal

G. Right of legal repurchase

233, The following are the three instances of logal redemption. Which of the
following pertains to legal pre-
emption?

a. A co-owner of'a thing may exercise the right of rederoption in case the shares
of all the other co-owzers
or of any cf them, are sold (o 2 third person,

B. Ifa piece of rural fand aot exc seeding one hecture is alienated, the adjoining
owner shal] have the right of
legal redemption unless the grantee does not own many rural land,

c. Ifa small piece of urben land which wes tongat fer speculation fas been resold,
the owner of the
adjoining laud has a right of vedeimption at s reasonable arice,

@. Ifa small piece of urban ‘und fs about to be resold, the nf ining owner shall be
given the right to buy the
property before it is offered to other.

234, In case there are tvvo or more 20-o-wne

the land sold by a co-owner to athi
a.
A. All the remaining co-aw rs Who want Wo exercise the right of legal redemption
for a share in
rd person, who shall be piven the tidht?

- Hers on the basis of propordonate share.

b. The first co-owner who want to exercise the right.

The co-owner with ihe smalles: share. :

d. The co-owner whose autended ose of the land in ouestioa apoears best justified,

235, In case there sre two or more co-owners WhO went to exercise the cight of
legal redemption for a share in the land sold by a co-owner te another vo-owner,
who shall be piven the right?

a. Al! the remaining co-owners on the bysts of proportionate share,

b. The firsc co-owner who want to exercize tne right.

c. The co-owner with the smaliest share,

d, None of them.

236, In case of legal redempiion \ whereby a co-owner and adjoining real or urban
land owner is present, who
shall be preferred in the exercise of red motion’?
a, Co-owner
\ b. Adjcining rural iand owner
\ ¢. Adjoining urban land ewner
\. & Owner with the smallest area

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237. A rural land owner sold hi .
7 val land, There are two _ land a exceeding | hectare (10,000 sqin) to anuther
person who owns any
wher 1! ' MOF More adjacent rural land owners who jatend to
‘ oy, Who shall be preferred? J lo exercise theis right of legal

pademptt
A.. The adjacent rural land owner with smallor area of lot
p, The adjacent rural land owner with larger area of lot
: ony ren wile . :
y, <The adjavel \ run land owner whose intended tise of the land in question
appears best justified
un ; The adjacent rura land owner Which offers the largest amount
q MJ
| land ieve of
an land owner sold a piece o hia

238. An urban I ait ; , ‘s Eland which ii 0 small so sina! and 90 situated that a
major portion
a8. ot be used for any practical purpose within a reasonable time, having been
bought merely for

argot oun ’ |
theaion. her be prefered? adjacent urban land owners who intend to pxercise the
right of legal
reve adjacent urban land owner with smaller area of lot
b rhe aljacent urban land owner with larger area of lot
C.The adjacent urban land owner whose intended use of the land in question appears
best justified
4 Phe adjavent urban land owner which offers the largest amount,

239. What is the period for the exervise of the right of legal redemption or legal
pre-emption by the co-owner,

or urban land owner?

adjoining rural li _ |
40 day’s from the notice given by the prospective vendor or vendor,

a Within 30 days.
bh. Within 60 days from the notice given by the prospective vendor or vendor.
c. Within 90 days from the notice given by the prospective vendor or vendor,
d. Within | year from the notice given by the prospective vendor or vendor.

240. In which of the following instances of legal redemption is right of legal pre-
emption available?

a, To an adjacent rural land owner when a rural Jand owner sold his land not
exceeding | hectare (10,000

sqm) to another person who owns any rural land.

b. To the co-owner when the co-owner sold a portion of the co-owned property.
To an adjacent urban land owner when an urban land owner sold a piece of land which
is so small so
small and so situated that a major portion thereof cannot be used for any practical
purpose within a
reasonable time, having been bought merely for specu lation.
d. Any of the above.
o

241. It is a contract which though lacking in formalities nevertheless shows the

real intention of the parties to create a specific property to secure the
performance of an obligation.
a. Contract of sale
b. Real estate mortgage
c. Chattel mortgage
d. Equitable mortgage

242. The following are the instances wherein a contract of sale with a right to
repurchase and other contract

purporting to be an absolute sale shall be presumed to be an equitable mortgage,

except
When the price of a sale with a right to repurchase is unusually inadequate

a.
b. When the vendor remains in possession as lessee or otherwise

c. When the period for the exercise of the right of repurchase is extended

d. When the purchaser retains for himself part of the purchase price

ec. When the vendor binds himself to pay the|real property taxes on the thing sold

f. When the real intention of the parties isithat the transaction shall secure the
payment of a debt or the

performance of any other obligation

g. When the buyer filed an action for exact fulfillment to collect the balance of
the price

243 In case of doubt in construing a contract which has the characteristics of both
sale with right to repurchase
and an equitable mortgage, what shall be the general construction of the contract?
a. Absolute sale
b. Pacto de retro sale
c. Equitable mortgage
d. Lease

244. What shall be the remedy of the injured party in cases of contracts presumed
to be an equitable mortgage?
A. Ask for rescission of contract. &

Ask for annulment of contract. .

Ask for declaration of nullity of the contract.

Ask for reformation of the instrument.

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245. It ts a contract whereby a person transfers his credit, right or action
against a third person to another
person for a consideration which is certain in Money or ity equivalent
a. Contract of sale
b. Assignment of credits
c¢. Contract of agency
d. Negotiation

246 How 1s a contract of assignment of credit perfected?

a. Lis perfected by mere consent being consensual contract,
b. Ifis perfected by delivery of the instrument ovideneing credit be
¢. Itis perfected by the Wrilten agreement being formal contract,
d.Itis perfected by execution of public document evide

IN real contract

NCINg Agreement being formal contract,

247, What is the formality required by law for Assignment

persons? ; .
a. [t must be in writing,
b. It must be ina public instrument.
c. It must be recorded in chattel Mortgage registry,
d. It must be recorded in the Reistry of Property

of credit involving Personal property to bind third

248. What is the formality required by law for assignment of credit involving re
persons? .
a. It must be in writing.
b. It must be in a public instrument.
c. It must be recorded in chattel mortgage registry,
d. It must be recorded in the Registry of Property

al property to bind third

249. UST sold its accounts receivable worth P]M from

UST in the emount of P!M. What is the effect of payment?

The students are released from the obligation if they pay UST before the know!

The students must still pay BPI the amount of PIM.

BPI can no longer recover the PIM from UST.

The basis of liability of UST to BPI is quasi-delict.

‘ts vtudents to BPI for P900,000. The students paid

edge of the assignment.

ao op

250. The following are the warranties of the fassignor) vendor in good faith in
assi gnment of credits except
Existence of the credit at the time of sale

Legality of the credit at the time of sale

¢. Solvency cf the debtor at the time of sale
oP

251, As a general rule, the assignor of credits is not Hable for che insolvency of
the debtor of the credit. When
may the assignor or vendor in assignment of credits become Mable for the insolvency
of the debtor?
a. When itis expressly stipulated that the : warrants the solvency of debtor.
b. When the insolvency of dobter was prior to the sule and of caimmoa knowledge,
c. Either A or B
d. Neither A nor B

252. In case the ‘ssignor in good saith, wer

the liability or warranty?
a. | year from the maturity date of credit or date of essigninenm whichever is
later.
b. 6 months from the inaturity date of credit cr dave of assignment whichever is
later.
¢. 40 days froin the Maturity date of eredit or date of assignment whichever is
later.
d. 3 days from the maturity date of credit oy date of assignmen whichever is later,

rants the saivensy of the debtor, what is the prescriptive period of

253, What is the main difference between the waranies of an assignor/y

endor of a non-negotiable promissory

note and general indorser of negotiable promissory sete?

a. The general indorser guaranties the solvency of maker while ar assignor does not
guaranty the solvency
of maker.

b. The gerera! indorser warrants the legality of negotiable promissory note while
an assignor does not
warrant the legality of the Pan-negotiabls promissory note,

c. The general indorser wanants the oxisteace of negotiabie pron 'ssory note while
an assignor does not
warrant the existence OF hon-nejrotiabie cromissury now,

d. All of the above,

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254. Which of the following statements concerning assignment of credits is
ineorrect?

24. : ‘a credit evcludes all the accessory right .

a. The assignment of 4 ¢ ssory rights, such as 4 guaranty, mortgage, pledge or
reference. . 5
b The vendor in bad faith shall always be answerable for the payment of all
expenses, ard for darnagéa
one who sells a inheritance Without enumerating the things of which it is comppsed,
shall only be
© inswerable for his character as an heir ;
d. Should the vendor have profited by same of the fruits or received anything from
the miheritance sold, he
shall pay the vendee thereo!, ifthe contrary has not been stipulated
sl

255. It refers to a document of tide in he me that the goods referred to in the

document will be delivered
—— | ved therein

to the bearer or to the order of any person nar

a. Negotiable promissory note
Negotiable bill of exchange

b.
c. Negotiable document of title
d. Negotiable cheek

256, When may a negotiable document of title be negotiated validly by mere

delivery?
a. Where the terms of the negotiable document of title state that the goods are to
be delivered to bearer.
bh. Where the terms of the negotiable document of title state that the goods are to
be delivered to the order of a
specified person and such person or « subsequent indorsee has indorsed it in blank.
c. Where the terms of the negotiable document of title state that the goods are to
be delivered to the order of a
specified person and such person or a subsequent indorsce has indorsed it to be
payable to bearer
d. Any of the above.

257. May a negotiable document of title which is originally a bearer negotiable

document of title be converted to an

order negotiable document of title?

No because once an originally bearer negotiable document of title is always a
bearer negotiable document of

a.
title even if it is specially indorsed.

b. Yes if there will be special indorsernent and therefore it can be negotiated

validly by special indorsement and
delivery of the negotiable document of title,

c. No because the law prohibits conversion of an original bearer negotiable

document of title to an order

negotiable document of title.

d. Yes if the bearer negotiable document of title is negotiated by mere delivery.

258. Which of the following is true as regards to the difference regarding the
negotiation of a negotiable document

of title and negotiable instrument?

a, An originally bearer negotiable instrument is always a bearer negotiable
instrument while an originally bearer
negotiable document of title may be converted to an order negotiable document of
title by special indorsement.
b. A negotiable instru:nent is always payable to bearer wile a negotiable document
of title is always payable to

order.
A negotiable instrument is always payable to order while a negotiable document of
title is always payable to

bearer.

d. An originally order negotiable docuunent of tile cannot be converted to a bearer

negotiable instrument by
blank indorseraent while an originally order negotinb’c dorement of title can be
converted to a bearer
document of title by blank incorvenvent.

t contains tne words * deliverable to bearer” or “deliverable to the

259, What is the nature of the docunient of title if)

order of a specified person” or “navabie to a specified person cr his order” if
subsequent party to the instrument placed
the words “not negotiable” or non-negotiable”?
a. The document of title is no jonger negotiable and may de assignea by the bolder
only.
b. The document of title is stil! nepotiasle and may be validly neyotiaied by the
holder either by mere delivery if
a bearer negotiable document of litle or by indorsement plus delivery it an order
negotiable document of title,
c. The document of title will become a void contract because it violates ihe law on
sales.
d. The document of title will become a negotiable ipserument under Aci No. 2031.

260. Which of the following statements is false concerming document of title?

a. An order negotiable document of title can de validly nevatiaied by its
indorsement plus delivery,
b. A bearer negotiable document of title can be validly negotisted by mere
delivery.
c. An order negotiable document of title may be transrened by the holder by mere
delivery to a purchaser or
donee but it wil] be considered ar assiznment only bul pol valid negotiation,
d. A nonnegotiable document of tithe caa be repotiated velidly and the indorsement
of such document gives the
transferee additional riphis

261. What are the rights ucquived by a person to whom a negollab!e document of tit!
has been duly negotiated?

Such title to the goods as ihe person nepotivting the document to him had or had
ability to convey to a
purchaser in pood faith tor value and also such title i the yoods us the person to
whose order the goods were
to be delivered by the terms of the document hug or had ability to convey to a
purchaser in good faith for value
b. The direct obligation of the bailec issuing (he document ty hold possession of
the goods for him according to
the terms of the cocument as fully as if such ballee hed contracted directly with
him.

C. Both A and B.
d. Neither A nor B,

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262. Whiat are the rights acquired by a person to whom @ document of title has been
Uansferred but not negotiated?
4. As against the transferor, he acquires title to the goods subject to the terms
of any agreement with the

transferor.
b. If the document is non-negotiable, such person also acquires the right to notity
the bailee who issued the

document of the transfer thereof, .

If the document is non-negotiable ,to acquire the direct obligation of such bailee
to hald possession of the

goods for him according to the terms of the document.

d, All of the above,

263. Ifa non-negotiable document of title has been transferred but not Negotiated,
what may d. tet
| re rm x ; ' ¥ defeat the title of th
transferee to the goods and the right to aequire the obligation of such ballee
Prior to the notification to such baile by

the transferor or transferee of a non-negotiable document of title?

a. By the levy of an attachment of execution upon the goods by a creditor of the
transferor

b. By a notification to such bailee by the transferor or a subsequent Purchaser

from the transferor of a subsequent
sale of the goods by the transferor. quer

c. Either A or B.

d. Neither A nor B,

264. Where a negotiable order document of title is transferred for value by

delivery, indorsement of the transferor |
Hl , cror |
essential for valid negotiation. What is the remedy of the transferee? 5
a. He may compel the transferor to indorse to him the negotiable document unless a
contrary intention eppears,

b. He has no right against the transferor. — -

c. He will have the rights as if there is valid negotiation even if there is no
indorsement,

d. He will have no rights other than that of a transferee,

264.

265. The following are by

indorsement or delivery, the warranties of & person who for value Negotiates or
transfers a document of title including one who assigns for value a claim secured
by a document of title unless a contrary

intention appears, except

a. That the document is genuine.

b. That he has a legal right to negotiate or transfer it.
c. That he has knowledge of no fact which would impair the validity of worth of the
document.

d, That he has a right transfer the title to the goods and that the goods are
merchantable or fit for a particular
purpose, whenever such warranties would have been implied if the contract of the
parties had been to transfer
without a document of title the goods represented thereby.

e. That he will answer for any failure on the part of the bailee who issued the
document or previous indorsers

thereof to fulfill their respective obligations.

266. Which of the following are considered personal defenses or circumstances that
do not impair the validity of the
negotiation of a negotiable document of title as Tegards to a person to whom the
document was negotiated or a person
to whom the document was subsequently negotiated paid value therefor in good faith
without notice of these defects?

a. The fact that the negotiation was a breach of duty on the part of the person
making the negotiation,
b. The fact that the owner of the document was deprived of the possession of the
same by loss, theft, fraud,
accident, mistake, duress, or conversion

Either A or B,

d. Neither A nor B.

267. If goods are delivered to a bailee by the owner or by a person whose act in
conveying the title to them to a
purchaser in good faith for value would bind the owner and a negotiable document of
title is issued for them, when may
the goods covered by the negotiable document of title be allowed to be attached by
garnishment or otherwise levied
under an execution sale?

a. When the negotiable document of title is first surrendered to the bailee.

b. When the negotiation of the document of title is enjoined by a court order.

c. Either A or B,

d. Neither A nor B,

268. When may the bailee of the goods covered by the negotiable document of title
be allowed to be compelled to
deliver the actual possession of the goods?
a. When the negotiable document of title is surrendered.
b. When the negotiable document of title is impouned by court.
c. Either A or B.
d. Neither A nor B.
269. What is the remedy available to a creditor whose debtor is the owner of a
negotiable document of title in
regard to property which cannot readily be attached or levied upon by ordinary
legal process?
a. He shall be entitled to such aid from courts of appropriate jurisdiction by
injunction and otherwise in attaching
such document or in satisfying the claim by means thereof as is allowed at law or
in equity.
b. He can compel the bailee to deliver the goods to him even if covered by
negotiable document of title.
¢. He can ask the court of law to directly attach\the goods covered by the
negotiable document of title.
d. He can directly obtain the goods from the bailee without surrendering the
negotiable document of title.

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