Sales, Credit Transactions, Insolvency and Corporate Rehabilitation Law

1. On January 1 2002, S sold his land to B with right to repurchase within seven years from January
1 2007. Until when can S redeem the property?
a. January 1 2009
b. January 1 2010
c. January 1 2012
d. January 1 2014

2. S told A to sell his 100sq. m. lot for P100,000.00. A offered the lot to B and B accepted the sale
and they made the sale in writing, which was subsequently notarized. B paid the price and A
delivered the title. Based on the facts:

a. The sale is void

b. The sale is rescisible
c. The sale is voidable
d. The sale is unenforceable

3. Which of the following must be considered first in determining the place of delivery?
a. the location of the thing
b. the domicile of the buyer
c. the agreement of the parties
d. the place of the seller

4. The purpose of the law in granting the right of redemption to co-owners is:
a. To prevent co-ownership
b. Encourage co-ownership
c. To increase taxes
d. To discourage co-ownership

5. A. Whenever an incapacitated person entered into a contract of sale it is considered voidable;

B. The sole owner of the thing may sell an undivided interest therein.
a. Only A is true
b. Only B is true
c. Both are true
d. Both are false

6. Greg borrowed the car of Mike for one week. Just a day after it was borrowed, Mike agreed to
sell the car to Greg and the latter paid the price of the car. How is the car delivered?
a. traditio longa manu
b. traditio brevi manu
c. traditio constitotum possesorium
d. actual delivery

7. On January 5, 2007, Nene sold her Big brother house and lot to Jason in the amount of P2M and
they made a contract of sale, which was notarized on said date. On January 8 Jason transferred
 to his house. On January 15 the deed of sale was registered with the register of deeds. When
was the house considered delivered?
a. On January 5 because it is the day the deed becomes public document
b. January 8 when Jason took actual possession of the house
c. On January 15 when the deed was registered
d. None of the above

8. It is the process wherein the seller a retro repurchases the property within a period of time as
agreed upon.
a. pactum commisorium
b. consolidation of ownership
c. legal redemption
d. conventional redemption

9. A contract of sale is not a

a. Principal contract c. Consensual contract
b. Nominate contract d. Real contract

10. It is the right of the mortgagor to redeem the property that was mortgaged after it was sold.
a. Equity of redemption c. Right of subrogation
b. Right of redemption d. Right of pre-emption

11. A with violence in her eyes intimidated her husband B to sell his exclusive property to her. The
contract of sale is
a. Rescissible c. Unenforceable
b. Voidable d. Void

12. A gets a loan of P 1,000,000 from B which becomes due on October 1, 2008 and mortgaged his
house as security for the debt. On June 30, 2008, the mortgaged house completely destroyed the fire
through the fault of C. A week later, B demanded payment from A. Is B’s demand valid?
a. No, the destruction of the house was not thru the fault of A.
b. No, the obligation is one with a definite period which is deemed intended for the benefit
of both the debtor and creditor
c. Yes, the debt becomes demandable unless A can give another security equally
satisfactory
d. Yes, the debt becomes demandable even if A can give another security equally
satisfactory

13. One of the following characteristics of dacion en pago is also a characteristic of a contract of
sale. Which is it?
a. There is a pre-existing credit
b. Obligations are extinguished
c. There is less freedom in fixing the price
d. Ownership of the object transferred to the other party

14. It is an affirmation of fact or any promise by the seller relating to the thing which has a natural
tendency to induce the buyer to purchase the same, relying on such promise or affirmation.
 a. Condition c. Warranty
b. False representation d. Seller’s talk

15. .Which among the following contracts is void?

a. A contract of barter between S, insane, and B, 17 years old
b. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would sign
the deed of sale
c. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign the
deed of sale
d. A contract for the sale of a cow which is suffering from a contagious disease

16. Recording in the Registry of Property in the appropriate book is required for the validity of the
contract of:
A a. Chattel mortgage c. Conventional pledge
b. Real mortgage d. Antichresis

17. A is the guardian of B, a minor, B sold his land in writing to C valued at 1M for P.7M. The sale is
a. Rescissible b. Voidable c. Void d. Unenforceable

18. A contract with a cause distinct from selling price

a. Lesion b. Cession c. Dation d. Option

19. . The state of person whose liabilities are more than his assets. The term is frequently used in
the more restricted sense to express inability of a person to pay his debts as they become due in
the ordinary course of his business.
a. bankruptcy
b. impoverished
c. insolvency
d. financially distressed

20.What are the tests to determine insolvency?

a. Equity test
b. Balance sheet test
c. Cash flow test
d. Acid test

21.It is the postponement, by court order, of the payment of debts of one who, while possessing
sufficient property to cover his debts, foresees the impossibility of meeting them when they respectively
fall due.
a. Tender of payment
b. Consignation
c. Suspension of payment
d. Assignment
22.What are the effects of filing of the petition?

A. No disposition in any manner of his property may be made by the petitioner except insofar as
concerns the ordinary operations of commerce or of industry in which he is engaged; (Sec. 3 [2])

B. No payments may be made by the petitioner except in the ordinary course of his business or
industry (Ibid.); and;

C. Upon the request to the court, all pending executions against the debtor shall be suspended
except execution against property especially mortgaged. (Sec. 6)
D. All of the above.

23. This is availed of a debtor who, having debts exceeding P1,000.00, cannot discharge all of them
with all of his existing assets and who, as a consequence, voluntarily goes to court to have
himself declared as an insolvent so that his assets may be equitably distributed among his
creditors. (Sec. 14)
a. Voluntary Solvency
b. Involuntary Solvency
c. Bankruptcy
d. Subrogation

24. Shall refer to the restoration of the debtor to a condition of successful operation and solvency, if
it is shown that its continuance of operation is economically feasible and its creditors can
recover by way of the present value of payments projected in the plan, more if the debtor
continues as a going concern than if it is immediately liquidated.
a. Rehabilitation
b. Rehabilitation Plan
c. Rehabilitation receiver
d. Secured claim
e. Secured creditor

25. Shall refer to the person or persons, natural or juridical, appointed as such by the court pursuant
to this Act and which shall be entrusted with such powers and duties as set forth herein.
a. Rehabilitation
b. Rehabilitation Plan
c. Rehabilitation receiver
d. Secured claim
e. Secured creditor

26. Shall refer to a plan by which the financial well-being and viability of an insolvent debtor can be
restored using various means including, but not limited to, debt forgiveness, debt rescheduling,
reorganization or quasi-reorganization, dacion en pago, debt-equity conversion and sale of the
business (or parts of it) as a going concern, or setting-up of new business entity as prescribed in
Section 62 hereof, or other similar arrangements as may be approved by the court or creditors.
a. Rehabilitation
b. Rehabilitation Plan
c. Rehabilitation receiver
d. Secured claim
e. Secured creditor

27. Shall refer to a claim that is secured by a lien

a. Rehabilitation
b. Rehabilitation Plan
c. Rehabilitation receiver
d. Secured claim
e. Secured creditor

28. Shall refer to a creditor with a secured claim

a. Rehabilitation
b. Rehabilitation Plan
c. Rehabilitation receiver
d. Secured claim
e. Secured creditor