Sales and Credit Transactions a. Both statements are true.
b. Only Statement I is true.
1. A credit right is considered to be in litigation:
a. as soon as a complaint is filed by the creditor
against the debtor.
b. when the debtor has filed his answer to the
complaint.
c. when the case is scheduled for pre-trial
conference between the parties.
d. when the trial has started.
2. Raju owed Farhan P100,000.00. The debt is
evidenced by a promisorry note and secured by
a mortgage of Raju's lot. Before due date,
Farhan assigned his credit right to Ranchodas
by executing a deed of assignment but without
the parties informing Raju. On due date,
Ranchodas went to Raju to collect the debt at
which time Raju learned of the assignment.
a. Ranchodas cannot collect from Raju because
the latter was not informed of the assignment at
the time it was made.
b. Ranchodas can collect from Raju but if Raju
cannot pay, Ranchodas cannot foreclose the
mortgage on the lot.
c. Ranchodas can collect from Raju but if Raju
cannot pay, Ranchodas can foreclose the
mortgage which is deemed assigned together
with the credit right.
d. Ranchodas can only go after Farhan, the
assignor, since the assignment was without
Raju's knowledge.
3. What does the assignor of a credit warrant?
a. The legality and existence of the credit.
b. The solvency of the debtor.
c. Both (a) and (b).
d. Neither (a) nor (b).
4. For an assignment to be binding against third
persons if a movable property is involved, the
same must be in a public instrument and
recorded in the Registry of Property.
a. Maybe
b. True
c. False
d. Sometimes
5. Evaluate the following statements:
I. A debtor who has paid his creditor
before he learns of the assignment of his debt
shall be released from his liability to the
assignee.
II. The debtor's consent is required for
the validity of the assignment of the credit made
by his creditor to another person.
c. Only Statement II is true.
d. Both statements are false.
6. A __________ is one which is acknowledged
before a notary public or any official authorized
to administer oath, by the person who executed
the same.
a. Notice
b. Public Instrument
c. Constitutum Possessorium Agreement
d. Bill of Lading
7. I. Where the goods delivered are mixed with
goods of different description not included in the
contract, the buyer may accept those, which are
in accordance with the contract, and reject the
rest.
II. In case of indivisible subject matter of the
sale, if the seller delivers more than the quantity
contracted, the buyer may reject the whole of the
goods.
a. True, False
b. False True
c. True, True
d. False, False
8. On March 1, 2017, Wonho sold to Shownu
through a public instrument 50 sacks of rice
stored in the only warehouse of Wonho. On
March 5, 2017, Wonho delivered the keys to the
warehouse of Shownu. The delivery made is
known as:
a. Constructive delivery by legal formalities
b. Traditio longa manu
c. Tradition brevi manu
d. Symbolic delivery
9. The ownership of the thing sold shall be
transferred to the vendee upon the delivery
thereof, which may be effected in what way?
a. By actual or real delivery
b. By constructive or legal delivery
c. By delivery in any other manner signifying an
agreement that the possession is transferred to
the vendee
d. All of the above
10. The following are the requisites for
acquisition of good title by buyer EXCEPT:
a. The buyer acquires them for an amount
higher than its market value
b. The buyer acquires them before the title of the
seller has been avoided
c. The buyer acquires them without the notice of
the sellers defect of title
d. The buyer acquires them in good faith for
value
11. If a movable property is sold by the vendor to
different vendees, the ownership shall be
acquired by:
a. The vendee who pays first.
b. The vendee who first agrees to buy it.
c. The vendee who first takes possession in
good faith.
d. The vendee who claims to have paid it first.
12. If the obligation of either party is subject to
any condition and such condition is not fulfilled,
such party may:
1. Refuse to proceed with the contract.
2. Proceed with the contract, waiving the
performance of the condition.
a) Only statement 1 is true.
b) Only statement 2 is true.
c) Both statements is true.
d) Both statements is false.
13. If the condition is in the nature of a promise
that it should happen, the non-performance of
such condition may be treated by the other party
as a breach of?
a) Contract
b) Condition
c) Warranty
d) Agreement
14. ____ is any representation made by the
seller of the thing with respect to its character,
quality, or ownership, by which he induces the
buyer to purchase the same relying on said
representation.
a) Care
b) Warranty
c) Promise
d) Closure
15. Chacha purchased a refrigerator from an
appliance dealer whereby Chacha would pay a
down payment of 20% upon its delivery and the
balance to be paid within 2 months from
delivery. Upon delivery of the refrigerator and
payment of 20%, a chattel mortgage was
executed by the Chacha. The parties further
agreed that upon failure to pay the balance, the
down payment would not be returned. When
Chacha failed to pay, the dealer foreclosed the
mortgage. Was the action of the dealer proper?
a. Yes, the dealer as the mortgagee has the
right to foreclose the mortgage because of the
breach committed by Chacha.
b. No, the sale is covered by the Recto Law and
forclosure can only be exercised when 2 or more
installments are not paid.
c. No, even if the sale is not covered by Recto
Law, the dealer can only exact performance
d. yes, the dealer has no other remedy but to
foreclose the mortgage
16. In the preceding question, assuming that it
was an installment sale, what is the character of
the stipulation providing forfeiture of the down
payment?
a. valid
b. void
c. unenforceable
d. recissible
17. In a contract to sell, full payment of the price
is a positive suspensive condition, what is the
effect when there is failure to pay the price?
a. breach of contract
b. the contract is inefficacious
c. such failure prevents the obligation of the
vendor to convey title to vendee
d. the vendor may deprive vendee of possession
by rescission of the contract
18. The husband and wife cannot sell property to
each other, except:
a. in case the property subject of sale is a small
value
b. when the separation of property was agreed
upon in the marriage settlement
c. in case the spouses are separated in fact
d. when the spouses have sufficient assets to
cover their liabilities and the surplus is the object
of sale.
19. If the seller promised that the condition
should happen or be performed, he buyer may
treat the non-performance of the condition as:
a. default
b. violation of a resolutory condition
c. violation of suspensive condition
d. breach of warranty
20. By this contract, one of the parties delivers to
another, either something not consumable so
that the latter may use the same for a certain
time and return it.
A. Contract of loan
B. Contract of sale
C. Contract of agency
D. Contract of pledge d. Not liable at all

21. Commodatum is essentially gratuitous. 28. When the parties to the contract know that
A. True the thing borrowed cannot be used without
B. False deterioration due to ordinary wear and tear, In
C. Maybe the absence of agreement, the depreciation is
D. None of the above borne by the
a. Bailee
22. Simple loan may not be gratuitous nor with a b. Bailor
stipulation to pay interest. c. Seller
A. True d. Buyer
B. False
C. Maybe 29. X borrows the car of Y. Would X be required
D. None of the above to pay for the gasoline, motor oil, washing,
greasing and spraying?
23. Who is the owner of the thing in a a. No. Because it should be the bailor who must
commodatum and in a simple loan respectively pay for it.
A. Borrower, bailor b. Yes, the bailee is responsible to pay for it but
B. Bailor, bailor he can ask for reimbursement.
C. Borrower, borrower c. Yes, the bailee is liable but he cannot ask for
D. Bailor, borrower reimbursement.
d. Both of them must be jointly liable for the said
24. An accepted promise to deliver something by expenses.
way of commodatum or simple loan is binding
upon parties, but the commodatum or simple 30. The depositor is obliged to reimburse the
loan itself shall be perfected even without the depositary for the expenses he may have
delivery of the object of the contract. incurred for the preservation of the thing
A. True deposited if the deposit is gratuitous.
B. False A. True
C. Maybe B. False
D. None of the above C. Maybe
D. None of the above
25. The bailee is obliged to pay for the 31. The following are the causes for a deposit to
________ expenses for the use and be extinguished, except:
preservation of the thing loaned. A. Upon the loss of the thing deposited
a. Extraordinary B. If the deposit is for compensation, upon the
b. Ordinary death of a depositor only
c. Additional C. Upon the destruction of the thing deposited
d. Essential D. In case of gratuitous deposit, upon the death
of either the depositor or the depositary
26. Why is the bailee not liable for the loss or
damage due to fortuitous event? 32. A deposit for a compensation is extinguished
a. Because the bailor retains ownership of the by the death of either party.
thing loaned A. True
b. Because the bailor is the only one who B. False
should be liable C. Maybe
c. The bailee can never be liable D. None of the above
d. The bailee is liable in all cases even when
due to fortuitous event 33. The following are exceptions to free the
depositor from responsibility in paying the losses
27. When there are 2 or more bailees to whom incurred due to character of the thing deposited,
the thing is loaned in the same contract, they are except:
liable A. The depositor was not aware to know the
a. Jointly dangerous character of the thing.
b. Equally B. The depositor notified the depositary of the
c. Solidarily dangerous character.
C. The depositary was aware of the dangerous
character without advice from the depositor.
D. The depositor was expected to know the
dangerous character of the thing.
34. Consider the following statements on the
obligations of the depositor:
I. By the word "extinguished", the law
really means that the depositary may still be
obliged to continue with the contract of deposit.
II. The depositary may retain the thing in
pledge until the full payment of what may be due
him by reason of the deposit.
A. Both statements are true.
B. Both statements are false.
C. Statement I is true; Statement II is false.
D. Statement I is false; Statement II is true.
35. The following are essential elements of a
contract of sale except:
a. Consent of the contracting parties
b. Subject matter which should be determinate
c. Price which is certain in money or its
equivalent
d. Warranty against eviction and against hidden
effects
36. One of the following is not a requisite of the
object of a contract of sale. Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the
ownership of the thing at the time of sale.
37. The following items pertain to either emptio
rei sperati or emptio spei.
I. The sale of a future thing.
II. The sale of hope or expectancy.
Ill. The sale of a present thing.
IV. The thing sold must come into
existence.
Based on the above intormation. which of the
following is
a. Item I and II pertain to emptio rei sperati.
b. Items II and III pertain to emptio spei.
c. Iterms II and III pertain to emptio rei sperati.
d. Items III and IV pertain to emptio spei
38. The price in a contract of sale is certain,
except: .
a. when the parties have fixed or agreed upon a
definite amount.
b. if the price is certain with reference to another
thing certain.
c. if the fixing of the price is left to the discretion
of one of the contracting parties and the price
fixed is not accepted by the other party.
d. if the price fixed is that which the thing sold
would have on a definite day or in a particular
exchange or market.
39. A contract whereby one of the contracting
parties obtrgates himself to transfer the
ownership of and to deliver a determinate thing
and the other to pay therefor a once certain in
money or its equivatent is a contract of
a. barter
b. sale
c. dacion en pago
d. mortgage
40. A characteristic of a contract of sale wherein
the values exchange are almost equivalent to
each other.
a. aleatory
b. commutative
c. onerous
d. consensual
41. Which of the following may not be the object
of the contract of sale?
a. things having a potential existence
b. future goods
c. vain hope or expentancy
d. things subject to resolutory condition.
42. A contract wherein the goods are to be
manufactured especially for the customer and
upon his special order, and not for the general
market:
a. contract of sale
b. contract of agency to sell
c. contract for a piece of work
d. contract to sell
43. In a contract of sale, as distinguised from
dation in payment (dacion en pago).
a. there is no pre-existing credit
b. there is less freedom in determining the price
c. there is always a pre-existing contract
d. the delivery of the object may extinguish
completely or partially the obligation.
44. Contract of sale, as distinguished from
contract of sell
a. full payment of the price is a suspensive
condition
b. ownership is retained by the vendor
c. in case of default of and object already
delivered to the buyer, the seller, in seeking to
oust the former, is enforcing not reacinding the 50. Statement I: The hotel keeper has a right to
contract retain things brought into the hotel by the guest
d. title over the property generally passes to the as a security for credits on the account got
buyer upon delivery. lodging and supplies furnished to hotel guests.
Statement II: The right of retention recognized in
45. It is a kind of commodatum where the bailor this article is in the nature of a pledge created by
may demand the thing at will. operation of law
A. Precarium A. Only I is true
B. Mutuum B. Only II is true
C. Mortgage C. Both are true
D. Antichresis D. Both are false

46. I. The bailor cannot demand the return of the 51. The notices posted by hotel keeper to free
thing loaned till after the expiration of the period himself from responsibility, that he is not liable
stipulated, or after the accomplishment of the for the articles brought by the guests is
use for which the commodatum has been A. Valid
constituted. B. Void
II. However, if in the meantime, he should have C. Voidable
urgent need of the thing, he may demand its D. Unenforceable
return or temporary use.
A. False,True 52. Any stipulation between the hotel keeper and
B. True,False guest whereby the responsibility of the former is
C. False,False diminished shall be
D. True,True A. Valid
B. Void
47. I .The bailor shall refund the ordinary C. Voidable
expenses during the contract for the D. Unenforceable
preservation of the thing loaned.
II. Extraordinary expenses (caused by fortuitous 53. Also known as Barter,
event) arising on the occasion of the actual use A. do ut des
of the thing loaned shall be borne equally by the B. facio ut des
bailor and the bailee. C. facio ut facias
A. False,True D. do ut facias
B. True,False
C. False,False 54. One of the parties binds himself to give one
D. True,True thing in consideration of the other's promise to
give another thing
48. A deposit is necessary for the following A. Policitacion
except B. Option contract
A. It is made in compliance with a legal C. Barter
obligation D. Assignment of credit
B. Made by passengers with common carrier
C. Made by travelers in hotels or inns 55. In barter, if the consideration is partly in
D. It takes place on the occasion of any calamity money and partly in another thing, the rule/s
without causal relation to the constitution of the is/are:
deposit A. The manifest intention of the parties
B. If the intention is unclear, it shall be a barter if
49. The hotel keeper is not liable when the value of consideration exceeds the amount
A. The loss or injury is caused by a theft by a of the money
stranger without the use of firearms or irresistible C. A and B
force D. A only
B. The loss is due to the acts of the hotel keeper
C. The loss arises from the character of the 56. Dog (debtor) borrowed P50,000 from Cat
things brought into the hotel (creditor). The obligation bears interest of 10%
D. All of the above per annum. To secure the debt, Dog agreed with
Cat that the fruits from the agricultural lot of Dog
shall answer for the interest and the principal b) Judicial Deposit
obligation. Assuming the form required by law c) Necessary Deposit
was complied with, the contract entered into d) None of the above
between Dog and Cat is known as:
A. Antichresis 63. I. The depositary of the property
B. Pledge sequestrated is bound to comply, with respect to
C. Real estate mortgage the same, with all the obligations of a good
D. Chattel mortgage father of a family.
II. The depositary of property or objects
57. For its validity, the contract referred to in the sequestrated cannot be relieved of his
preceding number: responsibility until the controversy which gave
A. Must be in writing, whether public or private rise thereto has come to an end, unless the
B. Must be in a public instrument. court so orders.
C. May be in any form, whether oral or written a) Only I is true.
D. May be inferred from the conduct of the b) Only II is true.
parties c) Both are true.
d) Both are false.
58. The measurement of the application of the
fruits to the interest and principal obligation in 64. The object or subject matter of sequestration
the contract referred to in no. 1 is the actual is/are
value of the fruits at the time they are: a) Immovable property only
A. Gathered b) Movable property only
B. Applied c) May be immovable or movable property but
C. Gathered less reasonable depreciation. generally immovable property
D. Applied less reasonable depreciation d) the same object as regards to extrajudicial
deposit.
59. Where there are two or more guarantors of
the same debtor and for the same debt, the one 65. The purpose of judicial deposit is to maintain
among them who has paid may demand of each the status quo during the pendency of the
of the others the share which proportionally litigation or to insure the right of the parties in
owes him. case of a favorable judgement.
A. True a) True
B. False b) False
C. Maybe c) Maybe
D. I give up d) No answer

60. If any of the guarantors should be solvent. 66. Louraine was appointed by the court as
his share shall be borne by the others including depositary of certain goods involved in a suit
the payer, in the same proportion. between Katrina and Jeane. Has Louraine the
A. True right to resign if Katrina and Jeane have no
B. False objection?
C. Maybe a) Yes, as Katrina and Jeane have no objection.
D. I give up b) Yes, as Louraine cannot take it anymore to be
a depositary.
61. The provisions of Article 2073 shall not be c) No, even if the controversy which gave rise
applicable, unless the payment has been made thereto has come to an end.
in virtue of a judicial demand or unless the d) No, unless the court so orders.
principal debtor is insolvent.
A. True 67. This refers to the right of a person to retain a
B. False thing until he receives payment of his claim in
C. Maybe the cases provided by law such as one who has
D. I give up executed work on a movable.
A. Conventional pledge
62. __ takes place when an attachment or B. Voluntary pledge
seizure of property in litigation is ordered. C. Legal pledge
a) Voluntary Deposit D. Chattel mortgage
 A. The price is inefficacious.
68. Pledge and real mortgage are similar in what B. The contract is inefficacious.
respect? C. The contract may be valid with reference to a
A. The object of the contract. certain thing.
B. Binding effect against third persons. D. The contract is void because the price must
C. Recovery of deficiency. be agreed only by the parties.
D. The fact that third persons may pledge or
mortgage their property to secure another 75. I. Option money is part of the purchase price.
person's debt. II. Earnest money is proof of perfection of the
contract of sale.
69. The following may be the object of pledge, The said statements are:
except: A. Both true.
A. All movables within the commerce of men B. Both false.
which are susceptible of possession. C. I only is true.
B. Bills of lading. D. II only is true.
C. Shares of stock.
D. Parcels of land. 76. Before perfection in a sale by auction:
I. Any bidder may withdraw his bid.
70. A pledge is extinguished through any of the II. The auctioneer may withdraw the goods from
following, except: the sale unless auction has been announced to
A. Sale of the thing pledged. be without reserve.
B. Appropriation of the thing pledged after the The statement is true for:
thing is not sold at one public auction. A. Both of them
C. Written abandonment of the pledge. B. Neither of them
D. Return of the thing pledged. C. I only
D. II only
71. Recording in the Registry of Property in the
appropriate book is required for the validity of 77. The following are causes of extinguishment
the contract of: of guaranty, except:
A. Chattel mortgage a. Performance.
B. Real mortgage b. Annulment.
C. Conventional pledge c. Novation.
D. Antichresis d. None of the above.
e. All of the above.
72. A contract of sale is perfected:
A. When the contract is signed by the parties 78. If the creditor voluntarily accepts immovable
B. At the moment there is meeting of minds in payment of debt, it is known as:
C. At the moment there is meeting of minds a. Release by payment.
upon the object and the price b. Release by conveyance of property.
D. At the moment there is meeting of minds c. Release of guarantor without consent.
upon the object, the price and delivery of the d. Release by extension of term.
object to the vendee.
79. I. An extension granted to the debtor by
73. As a rule, gross inadequacy of price does creditor without consent of guarantor
not affect a contract of sale. However, if the extinguishes the guaranty.
price is so inadequate as to be unconscionable, II. A release made by the creditor in favor of one
what is the effect? of the guarantors, without the consent of the
A. Contract of sale may be annulled. other, benefits only the said guarantor.
B. The contract may be considered a donation. a. Both are false.
C. The contract may be considered an equitable b. Both are true.
mortgage. c. Only statement I is true.
D. All of the above. d. Only statement II is true.

74. The determination of price may be left to the 80. What do you call an undertaking that is
judgment of an arbitrator, what is the effect sufficiently secured and not for cash or
should such person be unable to fix it? currency?
a. Dividends D. Sale on approval.
b. Bonds
c. Checks 87. I. Pledge is constituted on movables.
d. All of the above II. Pledge is not valid against third persons
unless a description of the thing pledged and the
81. I. A juridical bondsman can demand the date of the pledge appear on a public
exhaustion of the property of the principal instrument.
debtor. a. True, True
II. A sub-surety can also demand the b. True, False
exhaustion of the property of the surety. c. False, True
a. Both are false. d. False, False
b. Both are true.
c. Only statement I is true. 88. The following are kinds of pledge except:
d. Only statement II is true. a. Voluntary
b. Legal
82. Delivery of incorporeal property may be c. Conventional
through any of the following means, except: d. Involuntary
A. Execution of a public document.
B. Placing the titles of ownership in the 89. I. All kinds of obligation can be secured by
possession of the vendee. pledge or mortgage.
C. Use by the vendee of his rights, with the II. Promise to constitute pledge or mortgage
debtor's consent. creates real right.
D. Execution of private instrument. a. True, True
b. True, False
83. A sum of money paid, or a thing delivered c. False, True
upon the making of a contract for the sale of d. False, False
goods, to bind the bargain, the delivery and
acceptance of which makes the final assent of 90. It is a contract by virtue of which the delivers
both parties to the contract. to a third person a movable, or instrument
A. Option Money evidencing incorporeal rights for the purpose of
B. Earnest Money securing the fulfillment of a principal obligation
C. Reservation Money with an understanding that when the obligation is
D. Down Payment fulfilled, the thing delivered shall be returned with
all its fruits and accessions
84. An unpaid seller has tge following rights, a. Guaranty
except: b. Mortgage
A. A lien on the goods or tge right to retain them c. Pledge
for the price while he is in possession of them. d. Sales
B. In case of insolvency of the buyer, a right of
stopping the goods in transitu after he has 91. A stipulation whereby the thing pledged or
parted with the possession of them. mortgaged shall automatically become the
C. A right of repurchase. property of creditor in the event of nonpayment
D. A right to rescind. of term within the term fixed.
a. Precarium
85. The following may not be valid objects of a b. Pacto Comisorio
contract of sale, except: c. Force Majeure
A. Objects outside the commerce of men. d. Caveat Emptor
B. Illicit things.
C. Future goods. 92. If the obligation of either party is subject
D. Impossible service. to any condition and such condition is not
fulfilled, such part may:
86. The non-payment of the price is a negative a. Refuse to proceed with the contract
resolutory condition in: b. Proceed with the contract, waiving the
A. Contract to sell. performance of the condition
B. Contract of sale. c. Either a or b
C. Contract of agency to sell. d. Both a and b
93. An uncertain event or contingency on contrary, or unless the depositary is engaged in
the happening of which the obligation of the the business of storing goods.
contract depends. A. True , True
a. Contract of sale B. True , False
b. Guarantee C. False, True
c. Condition D. False, False
d. Warranty
99. Only __________ may be the object of a
94. Implied warranty is not applicable when deposit.
there is a A. Movable things
a. As is and Where is sale B. Immovable things
b. Sale of secondhand articles C. Movable and immovable things
c. Sale by virtue of authority in fact or law D. None of the Above
d. All of the above
100. In general, for a chattel mortgage to be
95. I. The seller is liable for his express binding between the parties, the same must be
warranties and for the implied warranties of title, recorded in the Chattel Mortgage of the province
absence of hidden effects, fitness or where the:
merchantability, description and sample. a. mortgagor resides
II. Warranty is an essential element of a contract b. mortgaged property is located
of sale and may, therefore, be increased, c. mortgagor resides and mortgaged property is
diminished, or suppressed by agreement of the located
parties. d. mortgagor resides, mortgaged property is
a. Both I and II is true located and where the mortgagee resides
b. Both I and II is false
c. Only I is true
d. Only II is true

96. When adverse possession had been

commenced before the sale but the prescriptive
period is completed after the transfer, is the
vendor liable for eviction?
a. Yes, the vendor is liable for eviction
because the vendee could easily interrupt the
running of the prescriptive period by bringing the
necessary action.
b. No, the vendor is not liable for eviction
because the vendee could easily interrupt the
running of the prescriptive period by bringing the
necessary action.
c. Either a and b
d. None of the above

97. A _________ is constituted from the moment

a person receives a thing belonging to another,
with the obligation of safely keeping it and of
returning the same.
A. Deposit
B. Loan
C. Guaranty
D. Pledge

98. Statement 1: A deposit may be constituted

judicially or extra judicially.
Statement 2: A deposit is a gratuitous contract,
except when there is an agreement to the