Law on Sales
1.Unless there is stipulation to the
contrary the expenses for the
execution or registration of the sale
shall be borne by:
A. The Vendee
B. The Vendor
C. The Vendee and Vendor
D. The agent or broker
2. A offered to sell his lot to B for
P100,000. In his offer to sell it was
stated that he is given 60 days to
prepare the P100,000 and as soon as
B is ready with the money, A will
execute a deed of sale. Before the end
of 60 days, A informed B that price of
the lot was increased to P120,000.
May B, compel A to accept P100,000
offered previously by A and make him
execute the deed of sale?
A. Yes, because A already signed
his offer
B. No, For B never signified his
acceptance of A’s offer.
C. Yes, because there was actual
meeting of minds of the parties
D. Answer not any of the above.
3. A wrote a letter to B wherein A
offered to sell a piece of land to B for
P200,000. B signified his desire to buy
the land. In A’s letter he gives B a
period of two (2) months within to
produce the P200,000. After 45 days,
A told B that the price of the land is
now P250,000. Can B compel A to
accept the P200,000 first offered by A
and execute the deed of sale?
A. Yes, because there was actual
meeting of the minds of A’s
offer
B. No, for B did not signify his
acceptance of A’s offer
C. Yes, because A is already
estoppels by his signed letter
D. Yes, because the period of two
(2) months has not expired
4. Mr. AB owes Mr. CD P150,000 due
on August 1, 2010. Mr. AB executed
mortgage in favor of Mr. CD on Mr.
AB’s building to guarantee the
obligation. On August 10, 2010, the
mortgage building was totally lost due
to a strong typhoon. On August 12,
2010, Mr. CD demanded payment
from Mr. AB. Is Mr. CD’s demand valid?
A. No, the obligation is one with a
definite period, thus the creditor
cannot demand fulfillment of
the obligation as such would the
prejudicial to the rights of the
debtor.
B. No, the obligation is
extinguished because the
obligation is lost through a
fortuitous event.
C. Yes, the debt becomes due at
once because the guaranty was
lost even through a fortuitous
event. Unless the debtor can
mortgage another property that
is equally satisfactory.
D. Yes, the debt becomes due at
once because, from the tenor
benefit is given solely to the
creditor thereby giving the
creditor the right to demand
performance even before the
date.
5. Mrs. Go sold and delivered her
diamond ring to Mrs. Pat. It was
agreed upon that after ten (10) days
Mrs. Pat will name and fix the price.
On the tenth (10th) day, Mrs. Pat called
up by telephone Mrs. Go and stated
the price at P10,000. Mrs. Go agreed.
IS the sale perfected?
A. Yes, the price stated and named
by one of the contracting
parties was accepted by the
other.
B. No, at the time of the sale the
price was not fixed.
C. No, the price was left to the
discretion of one of the parties
D. No, at the time of the sale the
price is not known.
6. Mr. Sy sold a parcel of land to Mr.
Tan for P200,000. Mr. Sy delivered the
transfer Certificate of Title of the land
to Mr. Tan. Later, Mr. Tan wanted to
register the land to his name and he
needed a Deed of Sale. What can Mr.
Tan do?
A. Mr. Tan can compel Mr. Sy to
execute a Deed of Sale
B. Mr. Tan cannot compel Mr. Sy to
refund the P200,000 because
the contract is not enforceable
C. Mr. Tan can sue Mr. Sy
enriching himself at the
expense of another.
 Law on Sales
D. Mr. Tan can possess and utilize
the land as a buyer in good
faith.
7. Bonds which are not secured by
any specific mortgage lien of pledge or
corporate property but by the general
corporation are:
A. Guaranteed bonds
B. Debenture bonds
C. Income bonds
D. Redeemable bonds
8. The buyer of a thing has the right
to the fruits of the thing:
A. From the time the thing bought
is delivered
B. From the time the sale is
perfected
C. From the time the obligation to
deliver the thing bought arises.
D. From the time the fruits are
delivered.
9. Three (3) of the following are
option money. Which is the earnest
money?
A. Given when contract of sale is
perfected.
B. Given when there is no contract
of sale.
C. Given to bid the offer or in a
unilateral promise to sell or to
buy.
D. Given as a separate
consideration from purchase
price.
10. In a sale, this is actual delivery.
A. Execution and signing of the
sale document.
B. When the goods sold are placed
in the control and possession of
the buyer.
C. Delivery by the seller to the
buyer of the key where the
goods sold are kept.
D. The buyer is already in actual
possession of the goods.
11. This is a mode to extinguish an
agency:
A. Death of the principal, but the
agency is for the interest of the
principal and agent.
B. Partial accomplishment of the
agency.
C. Upon withdrawal of the
principal.
D. Insanity of principal or agent.
12. D pledged his Singer Sewing
Machine to C for P8,000. D was unable
to pay the obligation 60 days after it
was due. C sold the machine at public
auction for P6,000.
A. C cannot recover the deficiency
of P2,000 even if there is
stipulation that he can.
B. C can recover the deficiency of
P2,000 even without
stipulation.
C. C cannot recover the deficiency
of P2,000
D. C can recover the deficiency of
P2,000.
13. In a sale, the buyer is entitled
and has the right to the fruit of the
thing sold from the time:
A. The obligation to deliver the
thing sold arises
B. The sale is perfected
C. The thing sold is delivered
D. The fruit of the thing sold is
delivered.
14. Mr. AB offered in writing to sell his
house and lot for P750,000 to Mr. CD
on July 1, 2010. Mr. CD requested Mr.
AB to give him 60 days within which to
raise the P750,000. On August 15,
2010 Mr. AB informed Mr. CD that the
price is raised and now at P1,000,000.
Can Mr. CD compel Mr. AB to sell his
house and lot at P750,000 which was
offered in writing by Mr. AB?
A. Yes, because Mr. AB is already
stopped by his written offer.
B. Yes, because the 60 days offer
has not yet expired
C. No, because Mr. CD has not
accepted the offer of Mr AB.
D. Yes, there was meeting of the
minds.
15. In distinguishing Earnest Money
from Option money, earnest Money is:
 Law on Sales
A. Given when there is no contract
of sale,
B. Given only when there is
perfected contract of sale.
C. Given to bind the offer or in a
unilateral promise to sell or buy
D. Given as a separate
consideration from the purchase
price.
16. Gay appointed May to sell the
former’s car for P200,000. May sold
the car to Pam, Pam inspected the car
and found hidden defects in the car.
Can Pam file an action against Gay
even when May acted in her own
name?
A. No, under “Caveat Emptor” let
the buyer beware.
B. Yes, because this is contract
involving property belonging to
the principal
C. No, because, May acted in her
own name not of the principal.
D. No, because the contract of sale
is already perfected.
17. Mr. San authorized Mr. Soy to sell
his car for P200,000 with 5% agent’s
commission. Mr. Soy sold the car to
Mr. Dy for P250,000. For how much is
Mr. Soy accountable to Mr. San?
A. P200,000
B. P190,000
C. P250,000
D. P240,000
18. B pledged his Rolex to C for
P4,000. B failed to pay C the P4,000
on due date. C sold the Rolex watch at
a public auction to the highest bidder
at P3,500.
A. C can recover the deficiency of
P500 from B.
B. C can recover the deficiency of
P500 even without stipulation.
C. C cannot recover the deficiency
of P500 unless there is
stipulation.
D. C cannot recover the deficiency
of P500 even if there is
stipulation.
19. Which of the following may not be
the object of sale?
A. Things having potential
existence
B. The sale of a vain hope or
expectancy
C. Future goods
D. Answer not given.
20. When delivery takes place by the
mere consent or agreement of the
contracting parties as when the
vendor merely points to the thing sold
which shall thereafter be at the control
and disposal of the vended if the thing
sold cannot be transferred to the
possession of the vendee at the time
of sale, delivery is effected:
A. By tradition symbolica
B. By traditio longa manu
C. By traditio brevi manu
D. Answer not given
21. The distinction between a chattel
mortgage and a pledge is that in
chattel mortgage:
A. The delivery of the personal
property is necessary
B. The registration of the property
in the Registry of Property is not
necessary
C. The excess over the amount
due after foreclosure, goes to
the debtor
D. Answer not given.
22. Sale is distinguished from dation in
payment in that in sale
A. There is a pre-existing
obligation or credit
B. The cause is the price
C. It is a mode of extinguishing an
obligation in the form of
payment.
D. Answer not given.
23. Mr. Mar orders for his workers
1,000 pieces of T-shirt ranging in size
from small to large from RDG
Garments Mfg. Corp. The specified
sizes, although not then available, are
manufactured by said corporation and
consigned to its sales outlets
regularly. The contract entered into by
Mr. Mar with the RDG Garments Mfg.
Corp. is a:
A. Contract for a piece of work.
B. Contract subject to a resolutory
condition
 Law on Sales
C. A contract of sale Eg for accounting. Eg raised the
D. Answer not given defense that he was not validly
constituted as an agent of Mar. In the
24. Mr. Amado owes the BIR P100,000 case at bar, defense is not tenable
in delinquent taxes and penalties. In because there is:
order to evade the payment of said
liability, he executed a deed of sale of A. An actual agency
his only parcel of land valued for B. An implied agency
P200,000 in favor of his brother Pedro, C. A general agency
where P20,000 was stated as the D. Answer not given
purchase price but the BIR has
evidence that said price had never 27. Maria is authorized by Dulfo to sell
been paid, the purpose of the sale the latter’s washing machine for
being to prevent the BIR to levy upon P5,000 each at 10% commission. One
the land to satisfy the tax liability of day, Dulfo sells one washing machine
Mr. Amado. In this case: to Carla on credit (payable in 90 days)
but for a price of P6,000. If Dulfo does
A. The BIR may not levy upon the not ratify this sale on credit, he can
land because the sale is void collect cash payment from Maria:
B. The BIR without annulling the
sale may levy upon the land of A. P4,500 (P5,000 less P500
Amado pursuant to the commission)
provisions of the National B. P5,000 (the price without
Internal Revenue Code commission)
C. The BIR should first annul the C. P5,400 (P6,000 less P600)
sale before it may levy upon the D. Answer not given
land pursuant to the provisions
of the National Internal Revenue 28. Tony sold a piece of land to Rene
Code. binding himself not to sell the same to
D. Answer not given. another person. On the following day,
Tony sold the land to Carla who
25. Mr. Rene owns a mango tree immediately took possession in good
bearing fruits, ready for harvest. He faith. In the case at bar, the proper
sells all the fruits of that tree to Mr. remedy of Rene is to:
Mar who pays Mr. Rene the sum of A. Institute an action for the
P5,000. Rene tells Mar that he can just annulment of the sale to Carla
harvest the fruits anytime he likes B. Institute an action for the
pointing at the particular tree. For recovery of the land
legal purposes, Rene has fulfilled his C. Institute an action for damages
obligation to deliver the mango fruits against Tony
to Mar by: D. Answer not given

A. Traditio brevi manu 29. Ces kidnapped and tortured Ed for

B. Traditio longa manu refusing to sell his (Ed’s) land to Ces.
C. Traditio simbolica Ed who could no longer bear the
D. Answer not given physical pains inflicted upon him
signed a document of sale in favor of
26. Mar Garci, before going to Spain Ces. This sale is:
appointed Jc Legaspi as his agent to
administer his properties in the A. Void
Philippines. Afterwards, Legaspi wrote B. Voidable
Garci that he ( Legaspi) was C. Valid
withdrawing from the agency because D. Answer not given
of failing health. Legaspi, in the same
letter said that he appointed Eg 30. A sold a residential land to B. B
Legaspi as his substitute and that Mar paid the consideration. When B
should extend a new appointment to wanted to register the sale at the
Eg. Eg took over the duties of Jc but Register of Deeds, the latter refused
Mar did not bother to appoint Eg to act to register and requires the
as his agent until Mar’s death. Now presentation of the certificate of
Mar’s heirs brought an action against
 Law on Sales
capital gains tax payment. What can B
do?
A. B may sue A to refund the
consideration paid by B under
the maxim, “no one shall enrich
himself at the expenses of
another.”
B. B cannot compel A to return the
selling price because the
contract is not enforceable
C. B may possess the residential
land as a buyer in good faith
D. B may compel A to pay the
capital gains tax and secure the
certificate of capital gains tax
payment
31. A Seller sold to a Buyer a piece of
jewelry at a price of P20,000. The
contract provides that the Buyer will
pay Seller a micro wave oven worth
P5,000. What is the nature of the
contract?
A. Sale
B. Partly sale and partly barter
C. Barter
D. Commodatum
32. Mr. A. Abad signed a letter
addressed and delivered to Mr. B.
Baje. The terms of the letter are:
1. An offer to sell a 500 sq.m. lot
for P300,000
2. An option time up to October
31, 2010 for Mr. Baje to raise
the P300,000
3. Upon payment of the P300,000,
Mr. Abad will execute and sign a
Deed of Sale
4. On October 31, 2010, Mr. A
Abad sent a letter to Mr. B. Baje
asking for a new price of
P350,000 for the 500 sq. m. lot.
Can Mr. B. Baje compel Mr. A. Abad to
accept the P300,000 and make him
sign and execute a Deed of Sale?
A. No, Mr.B. Baje did not accept
the offer of Mr. A. Abad
B. Yes, Mr. A. Abad is already
stopped by his sighing the
letter and offer.
C. Yes, there was actual meeting
of the minds.
D. Yes, the contract is perfected
33. Mr. A mortgaged his residential
land to Mr. B as a guarantee for the
payment of P400,000 obligation of Mr.
A. They agreed that Mr. A shall not sell
the land while the obligation exists.
The maturity of the mortgaged, C
offered to buy the land from Mr. A.
A. A cannot sell the land to Mr. C
because of the agreement not
to sell
B. A can sell the land to Mr. C only
if B consents in writing
C. A can sell the land to Mr. C
despite the agreement not to
sell (?)
D. A cannot sell the land to Mr. C
unless A pays the obligation
34. Mr. D. Dy constituted Mr. S. Sim
as his authorized agent to sell the
former’s Lancer car for P300,000 and
to pay him a 5% commission on the
selling price. Mr. S. Sim sold the car
for P320,00. Mr. S. Sim shall remit to
Mr. D Dy:
A. P300,000
B. P320,000
C. P285,000
D. P305,000
35. Ownership of the thing sold is
transferred / acquired / retained:
A. Retained by the seller in “sale
of return”
B. Transferred to the buyer upon
constructive or actual delivery
of the thing sold
C. Acquired by the buyer upon
D. Transferred to the buyer upon
acceptance of the price.
36. If redemption is made, which of
the following will not be paid by the
seller to the buyer
A. Price paid by the buyer
B. Expenses in the execution of
the sales contract paid by the
buyer
C. All necessary expenses on the
thing sold and to be redeemed
D. Interest of the price paid by the
buyer
37. The following are requisites of
Pledge except:
A. The disposal of the pledge
 Law on Sales
B. The absolute ownership of the the land orally. The sale is
property pledged valid
C. The thing pledge may be placed
in the possession of a third A. Both examples are true
person B. Both examples are false
D. To bind a third person, it must C. First example is true, but the
be recorded in the office of the second example is false
Register of Deeds D. First example is false, but the
second example is true
38. The leviable properties of the
debtor are transferred to the creditors 43. Which of the following is not a
to be sold and from the proceeds, the characteristic of Sale?
creditor is paid;
A. Pledge A. Bilateral
B. Cession B. Gratuitous
C. Dacion en pago C. Consensual
D. Chattel mortgage D. Nominate

39. A characteristic of the Contract of 44. The following are the alternative
Sale which involves exchange of remedies, except one available to the
value, it is buyer in case of breach of warranty by
the seller:
A. Commutative
B. Nominate A. Keep the goods and ask for
C. Bilateral damages
D. Consensual B. Refuse to accept the goods and
ask for damages
40. The principal is not liable for C. Rescind the sale and retain the
expenses incurred by the agent: goods
D. Keep the goods and set up
A. When it was stipulated that the against the seller by way of
agent would only be allowed a recoupment in price.
certain sum
B. When the agent has complied 45. Which of the following statements
with his obligations by acting is true and correct?
according to the principal’s
instructions A. In a Contract of Sale, the full
C. When the agent incurred them payment of the price is in the
with the knowledge that an nature of a suspensive condition
unfavorable result would ensue in that the seller is obligated to
and the principal was aware of transfer ownership of the thing
it sold.
D. When the expenses were B. The seller need not be the
incurred without the fault of the owner of the thing sold at the
agent perfection of the sale.
C. There may be a transfer of
41. An assignor of credit warrants: ownership over the thing even if
the seller has not delivered the
A. Solvency of the debtor thing sold to the buyer.
B. Existence and legality of credit D. In a Contract of Sale, the buyer
C. Collectibility becomes the owner of the thing
D. Assurance of payment sold upon full payment of the
purchase price.
42. A appoints B to sell his land
46. X, Y and Z were appointed by R as
Example 1. If the authority of B is his agents to administer his building
oral and B sells the which was rented by various tenants
land in writing. The sale while R was abroad for three years. In
is valid. the course of management, X cause
Example 2. If the authority of B is through his fault damage to the
in writing and B sells
 Law on Sales
building, which was assessed at
P30,000. R can claim:
A. P10,000 from each of X, Y and
Z.
B. P30,000 from X
C. P30,000 from Y and Z
D. P30,000 from either X, Y and Z
47. Pledge and Mortgage are
accessory contracts because they:
A. Are meant to secure the
fulfillment of a principal
obligation.
B. Cannot exist if the principal
obligation is void.
C. Can exist by themselves.
D. Cannot secure fulfillment of
rescissible obligation.
48. Mr. A offered to sell his land to Mr.
B for P300,000. Mr. B accepted the
offer and paid Mr. A the purchase
price. Mr. A delivered the owner’s
certificate of the Transfer certificate of
Title to the land. Mr. B wants to
register the land in his name, but the
Register of Deeds asks Mr. B for the
Deed of Sale. What can Mr. B do?
A. He may occupy the land as a
buyer in good faith.
B. He cannot compel Mr. A to
return the payment because the
contract is unenforceable.
C. He may compel Mr. A to
execute the Deed of Sale
because the contract is valid.
D. He may sue Mr. A to return the
purchase price under the legal
principle that no one may enrich
himself at the expense of
another.
49. Pacto de retro sale as
distinguished from mortgage:
A. There is redemption by
payment principally of the debt.
B. There is no transfer of
possession of the thing sold
C. There is no foreclosure unless it
is declared as an equitable
mortgage.
D. There is no transfer of
ownership of the thing sold.
50. A is authorized by B to sell the
latter’s books for P100 each. A sells 10
books to C on credit
but for a price of P120 each. After
ratifying the sale on credit, B can
collect. After ratifying
the sale on credit, B can collect
cash payment from C.
A. P1,000
B. P1,200
C. P1,080
D. P 900
52. Three of the following are
essential requisites of a contract of
mortgage. Which one is not?
A. The person instituting the
mortgage has the free disposal
of his property.
B. The contract must be in writing.
C. The mortgagor is the absolute
owner of the thing mortgaged.
D. The mortgage is constituted to
secure the fulfillment of a
principal obligation.
53. In real mortgage, the following
rules are valid, except one:
A. A stipulation in the mortgage
contract prohibiting the owner
from alienating the immovable
mortgaged is valid.
B. The mortgage may alienate the
mortgage credit or assign to a
third person in whole or in part.
C. Any stipulation allowing the
mortgage creditor to
appropriate the property
mortgaged is null and void.
D. If alienation of the mortgage
credit is not registered, it is still
valid between the parties.
54. A wrote a letter to B wherein A
offered to sell his piece of land to B for
P200,000. B signified his desire to buy
the land. In A’s letter, he gives B a
period of two (2) months within which
to produce the P200,000. After 45
days, A told B that the price of the
land is now P250,000. Can B compel A
to accept the P200,000 first offered by
A and execute the deed of sale?
A. Yes, there was actual meeting
of the minds of the parties
B. No, for B did not signify his
acceptance of A’s offer.
C. Yes, because A is already
stopped by his signed letter
 Law on Sales
D. Yes, because the period of two D. C can recover the deficiency of
months has not expired. P2,000.

55. A and B are good friends. A sold
and delivered his car to B. It was
agreed and understood that on the
next Sunday A will name and fix the
price of the car. Sunday came. A
called B by phone and stated and
fixed the price at P150,000. Is the sale
perfected?
A. Yes. The price was stated and
fixed on the date agreed upon.
B. No. The price was left to the
discretion of the seller.
C. No. at the time of the sale, the
price is not fixed.
D. No. The price fixed by the seller
was not accepted by the buyer.
56. In sale, this is actual delivery:
A. Execution and signing of the
sales document.
B. When the goods sold are
p0laced in the control and
possession of the buyer.
C. Delivery by the seller to the
buyer of the key where the
goods are kept.
D. The buyer is already in actual
possession of the goods.
57. This is a mode of extinguishing an
agency:
A. Death of the principal, but the
agency is for the interest of the
principal and agent.
B. Partial accomplishment of the
agency.
C. Upon withdrawal of the
principal.
D. Insanity of the principal or
agent.
59. In a contract wherein a person
binds himself to render special service
to do something in behalf of another
with consent of the latter.
A. Contract of piece of work
B. Contract of service
C. Contract of agency
D. Contract of exchange
60. Which of the following obligations
of the vendor cannot be waived:
A. To allow the buyer to examine
the goods sold.
B. To transfer ownership to the
buyer.
C. To pay the expenses of the
deed of sale.
D. To warrant the thing sold.
61. A appoints B as his agent to sell
his land, which of the following is
valid:
A. The authority of B is in writing
and the sale of the land in favor
of C is oral.
B. The authority of B from A is by
way of letter and B sells the
land to C in writing.
C. The authority of B is oral and B
sells the land to C for P50,000 in
a written contract of sale.
D. When goods are delivered to an
agent to be sold by him and the
agent is not liable to the
manufacturer of the goods.
62. A stipulation whereby the pledge
or mortgagee automatically becomes
the owner of the thing pledged or
mortgaged:

A. Pactum commisorium
58. D pledged his Singer Sewing B. Consolidation of ownership
Machine to C for P8,000. D was unable C. Conventional redemption
to pay the obligation 60 days after due D. Consignation
date. C sold the machine at public
auction for P6,000. 63. Which of the following statements
is true and correct:
A. C cannot recover the deficiency
of P2,000 even if there is A. Pledge and mortgage are
stipulation that he can. accessory contracts because
B. C can recover the deficiency of they cannot exist by
P2,000 even without stipulation. themselves.
C. C cannot recover the deficiency
of P2,000
 Law on Sales
B. In both pledge and mortgage,
the creditor is entitled to
deficiency judgment.
C. Where an obligation is secured
by a pledge or mortgage and it
is not paid when due the pledge
or mortgagee may dispose of
the thing pledged or mortgaged
if there is an agreement to that
effect between the parties.
D. Unless otherwise agreed upon
by the parties, the sale of the
mortgage property extinguishes
in full the obligation of the
mortgagor to the mortgagee.
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64. I. A sales contract is a real
contract because no ownership is
transferred unless there is delivery.
II. A sales contract is a real
contract because the seller suffers
the risk of loss until the object of the
sale has been delivered.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
65. A sells to B for P25,000 all the
mango fruits to be harvested from the
mango orchard which A plans to buy.
I. The sale is valid because the
mango fruits have potential
existence.
II. The sale is valid because the
object of the contract need not
exist at the time of the
contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
66. A who plans to buy a piece of land
from B, enters into contract of sale
respecting the same land with X for
the price of P100,000. The contract is
in writing.
I. The sale is not valid because a
seller cannot sell that which he
does not own.
II. The sale is not valid because a
public document is required.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
67. Husband owes C. Subsequently,
husband sold his car to his wife. If
husband cannot pay C on due date:
I. C can question the sale
because the sale prejudices C,
a creditor.
II. C can question the sale
because husband is relatively
disqualified to enter into this kind
of sale.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
68. A sells his TV set to B for P50,000
on sale or return. Subsequently, the
TV set is lost by
fortuitous event.
I. The risk of loss pertains to the
seller because the buyer is not
at fault.
II. The risk of loss pertains to
the seller until the buyer signifies to
the seller that he accepts
the TV set.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
69. A offered to sell for P500,000 his
house and lot to B who was interested
in buying the same. A gave B thirty
days to raise the amount and as soon
as B is ready they will sign the deed of
sale. On the 25th day, A notified B that
 Law on Sales
he is no longer willing to sell the
property unless the price is increased
to P550,000.
I. B can compel a to accept the
P500,000 first offered because there
exists a bilateral offer to
sell and to buy a definite
property for a definite price.
II. B cannot compel A to accept the
P500,000 because this is merely an
unaccepted unilateral
promise to sell.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
70. I. A promise to buy and sell a
determinate thing for a price certain is
reciprocally demandable.
II. An accepted unilateral promise
to buy or to sell a determinate thing
for a price certain is binding upon the
promissor if the promise is supported
by a consideration distinct from the
price.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
71. A specific boat was sold to B for
the price of P1 million on credit.
Shortly after perfection of the sale but
before delivery, the boat was
destroyed by a fortuitous event.
I. The seller suffers the loss
because at time of loss he was still
the owner.
II. The buyer suffers the loss
because if it were not for the
fortuitous event ownership would
have transferred to him.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
72. I. Should fungible things be sold
for a price independently and for a
single price, the risk of loss before
perfection pertains always to the
seller.
II. Should fungible things be sold
for a price fixed according to weight,
number or measure the risk of loss
pertains to the buyer after perfection
even before delivery.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
73. Maria purchased a quantity of bed
sheets which were wrapped up in
bales. The sale was done in the
warehouse of Seller. Some bed sheets
were pulled out from the bales
displayed and fount to be all right.
Maria then purchased 100 bales and
paid the price. After delivery, Maria
discovered that some of the bed
sheets contain holes.
I. Maria can return the bed sheets
and recover the money she paid.
II. Maria cannot return the bed
sheets and recover the money she
paid because the principle
“caviat emptor” applies.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
74. A entered into a contract of sale of
his car to B for a price of P50,000. The
terms are: Upon payment of P20,000 A
shall deliver the car and the balance
to be paid after one month. B also
executed a chattel mortgage on the
car to secure the payment of the
balance. B defaulted in the payment of
the balance, therefore A foreclosed
the mortgage. The proceeds realized
in the foreclosure sale were not
sufficient to pay the entire balance.
I. A can still recover the
deficiency.
II. A cannot recover the deficiency
because the law prohibits him from
doing so.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
 Law on Sales
D. Both statements are false
75. Guardian sells the property of the
ward to X for a price certain. The
property is rural land, area 1 /2
hectare. X already owns rural land.
Guardian is an adjacent owner of 1/ 4
area and the other adjacent owner is C
of 1/ 2 hectare.
I. Guardian cannot legally redeem
because he is relatively incapacitated.
II. Guardian cannot legally redeem
because he is the owner of a lesser
area.
76. S owns 10 sacks of rice for sale in
his store. B came into the store and
buys the 10 sacks at the price of
P1,200 per sack and promised S to
pay as soon he is paid for the bags of
cement which are then being
unloaded from a truck parked opposite
the store. Upon request of B, S
ordered the loading of the sacks of
rice on the truck, continuously
watching the loading. After the sacks
of rice were loaded on the truck, B did
not appear to pay the price. So, S
again ordered the unloading of the
sacks of rice. At this moment, the
driver of the truck objected to the
unloading of the sacks of rice claiming
the he purchased the sacks of rice
from B and therefore acquired
ownership thereof.
I. S cannot order the unloading
because B acquired ownership when
the sacks or rice were
loaded on the truck.
II. S cannot order the unloading
because ownership was transferred to
the driver by B who
had ownership of the sacks of
rice.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
77. I. If seller has ownership, he can
always transfer ownership.
II. If seller has ownership but no
possession, he cannot transfer
ownership by constructive
delivery.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
78. I. A contract of “sale or return” is
a sale with a resolutory condition.
II. A contract of “sale on trial or
approval” is a sale with a suspensive
condition.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
79. I. If the bill of lading covering the
goods sold is by its terms the goods
described therein are deliverable to
the order of the seller, and retained by
the seller, the seller has reserved his
ownership over the goods.
II. If the bill of lading is by its terms
the goods described therein are
deliverable to the order of the buyer
and retained by the seller, the seller
ha reserved his right of possession of
the goods as against the buyer.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
80. B bought a pair of shoes from shoe
store and repair shop. It was later
discovered that the pair of shoes
bought by B belonged to a customer
who left it there for repair.
I. B acquired ownership provided
he acted in good faith.
II. B did not acquire ownership
because a seller cannot transfer
ownership if he himself has
no ownership.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
81. I. An unpaid seller loses his
possessory lien after he has delivered
the goods to a carrier for
 Law on Sales
the purpose of transmission to the
buyer without reserving the ownership
in the goods or the right to the
possession thereof.
II. The unpaid seller who loses his
possessory lien does not lose his lien
for the payment of the purchase price.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
82. I. Once the goods have been
accepted by the buyer, the seller is no
longerresponsible to him for any
breach of warranty.
II. Acceptance by the buyer does
not as a general rule release the
seller from liability for breach of
warranty.
A. First statement is true,
second statement is false.
B. First statement is false,
second statement is true.
C. Both statements are true.
D. Both statement are false.
83. A enters into a contract of sale
with B respecting 2 immovables for
P200,000, the boundaries are
mentioned and the area is 20,000 sq.
meters.
I. The seller shall suffer a
proportionate reduction in price
if the area delivered is less than
the area specified in the
contract even though the
boundaries were followed.
II. The seller shall also be entitled
to a proportionate increase in
price if the area exceeds the
number specified in the
contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
84. S sells his piece of land to B for
P100,000. Consequently, another
contract was entered into
between the parties whereby B leases
the land to S.
I. This contract shall be construed
as an equitable mortgage.
II. This contract is a contract of
sale with leaseback.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
85. A sold his piece of land to B last
November 10, 2009.
I. S shall repurchase the land
within 4 years from date of sale.
II. S shall have within 10 years
from date of sale to repurchase the
land so long as the period of
repurchase shall not exceed 10 years.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
86. A, B and C are co-owners of rural
land with an area of 9 hectares. A sold
his undivided interest to X who does
not own rural land.
I. B and C cannot legally redeem
because the sale was an absolute sale.
II. B and C as co-owners can
legally redeem for the purpose of
reducing the number of co-
ownership.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
87. I. Conventional redemption is a
privilege.
II. Legal redemption is a right
granted by law.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
88. A sold his piece of land to B with a
right of repurchase when A has sold
his car.
I. A can repurchase within 4
years from date of sale.
 Law on Sales
II. A can repurchase within 4
years from date of sale of his car.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
89. P authorized his agent to direct
and administer his commercial
business, among others “to
collect sums of money and exact
their payment by legal means.”
I. A can bring a court action for
collection provided he brings it
in the principal’s name
under his agency.
II. A needs a special power of
attorney to bring a court action
because the agency of A pertains only
to acts of administration.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
90. I. A special power to mortgage
includes the special power to
constitute a second mortgage.
II. A special power to mortgage
does not include the power to sell.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
91. Agent was authorized by Principal
to sell the latter’s TV set for P10,000
on the installment
plan. A was able to sell it for
P10,000 cash basis.
I. The sale is not binding upon the
principal unless the principal
ratifies it.
II. The sale is not binding upon the
principal because the agency was
performed in a manner not
included in the agency.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
92. I. An agency cannot revoked at
principal’s will if the agency depends
upon a bilateral contract.
II. An agency cannot be revoked
at principal’s will if the agency is for a
compensation.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
93. A and B were appointed
simultaneously by P as his agents.
Solidary liability of the agents
was stipulated.
I. Any one of the agents shall be
liable for any damage suffered
by the principal for
nonperformance of the agency.
II. Solidary liability will apply in
case of damages suffered by the
principal caused by the negligence of
either agent provided the agent acted
within the scope of his authority.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
94. On September 1, 2010, P owns a
piece of land gave a general power of
attorney to A. On October 1, 2010, P,
without the knowledge of A executed
in favor of C a special power of
attorney to sell said piece of land.
November 10, 2010, A as attorney-in-
fact of P executed a deed of sale over
the piece of land in favor of X. On the
same date, C under the special power
given by P, sold the same piece of
land t Y. Both purchasers acted in
good faith. X registered his sale. Y did
not.
I. The sale in favor of X must
be respected because he
registered it in good faith.
II. The sale in favor of Y must
be respected because C was
specially granted with
authority to sell.
A. First statement is true, second
statement is false.
 Law on Sales
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
95. A, B and C appointed Z as their
agent to sell their separate houses.
The appointment was
made under one special power of
authority.
I. A, B and C shall be solidarily
liable under the agency to Z
II. A, B and C shall be jointly liable
under the agency to Z even though
the appointment was made in one
common instrument because A, B and
C are not co-owners.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
96. I. The pledge extends to the
interest and earnings of the thing
pledged unless there is a stipulation to
the contrary.
II. In case of pledge of animals,
their offsprings shall be subject to the
pledge if there is a stipulation to that
effect.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
97. If there are reasonable grounds to
fear the destruction or impairment of
the thing pledged without the fault of
the pledge: First statement is true,
second statement is false.
I. The right of the pledgor to
demand the return of the thing,
upon offering another thing in
pledge, provided the latter is of
the same kind as the former
and not of inferior quality must
always be respected.
II. The right of the pledge to cause
the thing pledged to be sold at a
public sale is subordinate
to the above right of the pledgor.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
98. I. The creditor pledge cannot
appropriate the thing pledged.
II. But he can dispose of the thing
pledged with the consent of the
pledgor.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
99. I. A mortgage or pledge is
indivisible although the principal
obligation is divisible.
II. The principal obligation must
be necessarily indivisible because the
mortgage or pledge securing is
indivisible.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
100. A borrows P10,000 from B, so A
delivered his diamond ring to B as a
pledge to secure his
obligation. The contract of pledge
was executed in a public document
but the description of
the ring and the date of the
pledge did not appear thereon. A,
pledgor alienates the ring in
favor of C.
I. C has to respect the pledge
because the contract of pledge is in a
public document.
II. C has to respect the pledge if
the alienation of the pledged was
consented to by the pledge.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
101.I. A stipulation in a contract of
pledge allowing the pledge to
purchase the thing pledged at
 Law on Sales
the current purchase price if
the debt is not paid on time is valid.
II. A stipulation in a contract of
pledge allowing the pledgor to assign
the thing pledged to
the pledge in payment of the
debt due is not paid on time is valid.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
102.I. Future property cannot be the
object of a pledge or mortgage unless
there is a stipulation
to the contrary.
II. Future property cannot be the
object of a pledge or mortgage unless
there is a stipulation
to the contrary.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
103.I. Two things are prohibited in a
pledge or mortgage, which are: (a) the
appropriation by the
pledge or mortgagee of the
object of the pledge or mortgage and
(b) the disposition of
the object by the pledgor or
mortgagor.
II. Two things are prohibited in a
pledge or mortgage, which are: (a) the
disposition of the
object by the pledgee or
mortgagee and (b) the return of the
pledge or mortgage to the
pledgor or mortgagor before
debt is fully paid.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
104.A, minor borrows P10,000 from B.
To secure A’s debt, X a good friend of
A pledges his
gold watch to B.
I. The pledge is not valid
because the principal obligation is not
valid.
II. The pledge is not valid, the
thing pledged should belong to the
debtor.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
105.I. In mortgage and chattel
mortgage there is recovery of
deficiency as a general rule.
II. In pledge, absolutely, there is
no recovery of deficiency.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
106.A and B are co-owners of a piece
of land. They mortgaged their land in
favor of C. While
the mortgage debt is pending, A
and B partitioned the land between
them. On due date, A
paid his share of the debt of C.
I. The mortgage on A’s share of
the land is extinguished.
II. The mortgage on A’s share
cannot be extinguished unless B pays
his share of debt.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
107. I. Unless there is stipulation to
the contrary, the debtor mortgagor
can alienate the property
mortgage.
II. The debtor mortgagor can
alienate the property mortgaged with
the consent of the
mortgagee.
 Law on Sales
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
108. A, minor borrows money from B.
The contract although voidable is
secured by a pledge or
mortgage of A’s property.
I. A can validly constitute a pledge
or mortgage of his personal or real
property.
II. The pledge or mortgage
constituted by a minor is valid
provided he is the absolute owner
of the property pledged or
mortgaged.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
109.A, agent is authorized by Principal
to lend money of the principal.
I. A, the agent can borrow the
money provided the loan is without
interest.
II. A, the agent cannot borrow the
money if the loan is with interest.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
110.I. Agency is a nominate, principal,
unilateral, preparatory, commutative
and generally
onerous contract.
II. Agency is a nominate,
accessory, bilateral, preparatory,
commutative and generally
onerous contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
111. I. A general power of authority
may also include a special power.
II. A special power of authority
does not include a general power.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
112 I. If the third person contracts
with the agent knowing that the agent
exceeds the scope of
his authority, the contract is
void not only as against the principal
but also as between
agent and the third person.
II. If a third person contracts with
the agent knowing that the agent
exceeds the scope of his
authority the contract is void
as against the principal but valid
between the agent and the
third person.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
113.I. In mortgage the mortgagor
may alienate the property mortgaged.
II. In mortgage the mortgagee
may alienate the mortgage credit.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
SALES (cpar)
1.As a rule, this contract of sale
involving a piece of land is void,
A. Between a minor and a
capacitated person.
 Law on Sales
B. Between two insane persons
who did not act during lucid 8. The sale of an expected thing
interval
C. Between first degree cousins A. Dacion en pago
D. Between husband and wife B. Payment by cession
C. Emptiospei
2. X, 17 years old, sold to Z, of legal D. Emptio rei-speratae
age, her necklace worth P20,000 for
P15,000. Later, Z 9. The sale of the hope itself
sold the necklace to Y for
P20,000. Which of the following A. Dacion en pago
statements is correct? B. Payment by cession
C. Emptio spei
A. X has got a voidable title D. Emptio rei-speratae
because at the time of sale, she
is a minor 10. One of the following is not correct
B. X can ask for rescission of the
sale to Y because she suffered a A. Things subject to a resolutory
lesion of more than ¼ of the condition may be the object of
value of the property. the contract of sale.
C. If Y is in bad faith, Y becomes B. A thing is generic when it is
the owner of the necklace upon particularly designated or
delivery to him but his title is physically segregated from all
voidable. others of the same class.
D. X can ask for the annulment of C. Things having a potential
the sale to Y because at the existence may be the object of
time of sale she is a minor. the contract of sale.
D. The sole owner of a thing may
3. This serves as a proof of the sell an undivided interest
perfection of the contract of sale therein

A. Dacion en pago 11. X needs a size of 10 of model 101

B. Option money of Leather Shoes regularly available to
C. Delivery the public for her
D. Arras boyfriend Z, but the same is out
of stock so she placed an order for
4.A contract of sale is not a(an) one. On the other hand, Z
placed an order for size No. 8,
A. Onerous contract colored violet, (something not
B. Accessory contract ordinarily made by the
C. Commutative contract company) to be given to X. Which
D. Bilateral contract is correct?

5.Warranty against hidden defects is A. Both are contracts of sale

B. Both are contracts for a piece of
A. An essential element work
B. A natural element C. First is a contract of sale second
C. An accidental element is a contract for a piece of work
D. An artificial element D. First is a contract for a piece of
work, second is a contract of
6. sale
7. When a sale of a piece of land or
any interest therein is through an 12. V offered to sell for P12,000,000
agent, the authority of the her house and lot to DD who was
agent shall be in writing, otherwise interested in buying the
the sale is same. In her letter to DD, V stated
that she is giving DD a period of one
A. Valid month within which
B. Voidable to raise the amount and that as
C. Unenforceable soon as DD is ready, they will sign the
D. Void deed of sale. Five days
 Law on Sales
before the expiration of the one D. Chicago rule
month period. V went to DD and told
her that she is no 17. The Realty Installment Buyer
longer willing to sell the property Protection Act applies to all
unless the price in increased to transactions involving the sale or
P15,000,000. Which is financing of real estate on
correct? installment but it excludes the
following except:
A. DD may compel V to accept the
P12,000,000 first offered. A. Sale or financing of industrial
B. V may compel DD to pay lots
P15,000,000 B. Sale or financing of commercial
C. V and DD should shoulder the building
P3,000,000 difference C. Sale to tenants under the Land
D. DD cannot compel V to accept Reform Code
the P12,000,000 first offered D. Sale of residential
condominiums
13. If the object of the contract is
specially made or manufactured at the 18. Delivery by merely pointing to the
specific order of object of sale if it cannot be delivered
another, it is a contract for a piece to the vendee at the
of work. This is time of the sale is

A. English rule A. Traditio longa manu

B. Massachusetts rule B. Traditio brevi manu
C. New York rule C. Traditio constitutum
D. Chicago rule possessorium
D. Traditio symbolica
14. If the article already exists and
subsequently acquired by another, it is
a contract of sale, and 19. Effected when the object of sale is
if the article is still to be already in the possession of the
manufactured at the instance of vendee at the time of sale
another, it is a contract for a piece so that delivery need no longer be
of work. This is made is

A. English rule A. Traditio longa manu

B. Massachusetts rule B. Traditio brevi manu
C. New York rule C. Traditio constitutum
D. Chicago rule possessorium
D. Traditio symbolica
15. If the material used in the
manufacturer of the article is more 20. When the owner of the thing sells
valuable, it is a contract of it to vendee, but continues to have
sale, and if the labor or skill is possession or
more valuable than the material used occupation of the thing not as
in the manufacture of owner but as tenant or lessee
the article, it is a contract for a
piece of work. This is A. Traditio longa manu
B. Traditio brevi manu
A. English rule C. Traditio constitutum
B. Massachusetts rule possessorium
C. New York rule D. Traditio symbolica
D. Chicago rule
21. Goods are deemed in transit
16. The rule observed in the
Philippines is A. When the buyer accepts
delivery of the goods upon
A. English rule arrival at destination
B. Massachusetts rule B. When the buyer intercepts and
C. New York rule lawfully takes possession of the
 Law on Sales
goods at any point before
destination.
C. From the time they are
delivered by the seller to a
common carrier or other bailee
for transmission to the buyer,
up to the time that the buyer or
his agent takes delivery of the
goods from the carrier or bailee.
D. When the carrier or bailee, upon
arrival of the goods at
destination acknowledges to the
buyer or his agent that he is
holding the goods as bailee for
the latter.
22. Goods are deemed no longer in
transit
A. If the goods are rejected by the
buyer for a valid reason and the
carrier or other bailee continues
in possession of them, even if
the seller has refused to receive
them back.
B. From the time they are
delivered to a carrier by land,
water or air for the purpose of
transmission to the buyer.
C. From the time they are
delivered to a bailee for the
purpose of transmission to the
buyer until the buyer or his
agent in that behalf, takes
delivery of them from such
bailee.
D. If the carrier or other bailee
wrongfully refuses to deliver the
goods to the buyer or his agent
in that behalf.
23. X sold to V orally a parcel of land
for P200,000. X effected the delivery
of the land. The
payment of the price was to be
made three month later. At the end of
three month period
A. V may refuse to pay claiming in
his defense the Statute of
Frauds
B. V may return the parcel of land
to X
C. X can collect from V because
the contract has already been
executed
D. V may refuse to pay on the
ground that there is no written
contract to support the sale.
24. On January 15, 2010, X sold for
P2M her house and lot to V. It was
agreed that delivery of
the house and lot, and the
payment therefore, would be made on
March 10, 2010.
Unfortunately, Z a stranger
negligently set the house on fire on
February 25, 2010, and the
house was completely destroyed.
Which is correct?
A. V is not required to pay the P2M
since the contract had no
subject matter.
B. X must still deliver the lot but is
excused from delivering the
house, while V must still pay the
P2M
C. X must deliver the lot while V
should pay only the amount
equivalent to the value of the
lot.
D. X need not deliver the lot while
V need not pay the P2M
25. If immovable property should
have been sold to different vendees,
the ownership shall be
transferred to the person
A. Who have first taken possession
in good faith
B. Who presents the oldest title in
good faith
C. Who in good faith first recorded
it in the Registry of Property
D. Who have paid in good faith the
purchase price in full
26. Using the preceding number, if
movable property, it shall belong to
the person
A. Who have paid in good the
purchase price in full
B. Who in good faith first recorded
it in the Registry of Property
C. Who presents the oldest title in
good faith
D. Who have first taken possession
in good faith
27. Action by the vendee against the
vendor to nullify the sale due to some
vices or defects
which render the object of sale
unfit for the use intended or
knowledge of which the vendee
should not have bought the thing
 Law on Sales
A. Accion quanti minoris the funds to pay for the goods
B. Accion reinvidicatoria
C. Accion pauliana A. Pre-emptive right
D. Redhibilitory action B. Appraisal right
C. Voting right
28. Action to seek a corresponding D. Right of stoppage in transit
reduction in price by reason of some
vices or defects in the 33. A sold to B a parcel of land for
thing purchased P3.8M. The sale is evidenced by a
memorandum of
A. Accion quanti minoris agreement of sale written in the
B. Accion reinvidicatoria Bicolano dialect. One week later, A
C. Accion pauliana sold the same parcel of
D. Redhibilitory action land to C for P4M. This is
evidenced by a formal deed of sale.
29. The redhibitory action based on Upon buying the property, C,
the faults or defects of animals must who was aware of the first sale
be brought within immediately took possession of the
lot. When informed of
A. 30 days from delivery to the the second sale, B subsequently
vendee registered an adverse claim to the
B. 40 days from delivery to the property. Later, C
vendee registered the deed of sale in her
C. 45 days from delivery to the favor. The parcel of land shall belong
vendee to
D. 6 months from delivery to the
vendee A. B because he has got an older
title
30. In contract of sale, if the price is B. C because he is the first to
absolutely simulated, the sale is register
C. C because he is the first to
A. Unenforceable take possession
B. Voidable D. No one as both sales are void
C. Void
D. Rescissible 34. Voluntary renunciation made by
the buyer of his right to warranty
31. In a contract of sale, of personal against eviction where in
property, the price of which is payable case the buyer is evicted, the
in installments, the seller is liable to the value of the thing
vendor may exercise any of the at the time of eviction.
following remedies, except
A. Waiver intentionada
A. Exact fulfillment of the B. Waiver consciente
obligation, should the vendee C. Waiver cursunada
fail to pay any installment D. Waiver inocente
B. Cancel the sale, should the
vendee’s failure to pay cover 35. Using the preceding number,
two or more installment where the seller is no longer liable
C. Foreclose the chattel mortgage
on the thing sold, if one has A. Waiver intentionada
been constituted should the B. Waiver consciente
vendee’s failure to pay cover C. Waiver cursunada
two or more installments D. Waiver inocente
D. Rescind the sale should the
vendee fail to pay any 36. A contract of sale whereby the
installment. seller acquires the right to redeem or
repurchase the object of
the sale from the buyer within a
32. The right of the seller to stop certain period agreed upon
goods in transit, upon discovering that
the buyer does not have A. Equitable mortgage
 Law on Sales
B. Absolute sale
C. On sale or return
D. Pacto de retro sale
37. A sold to B his car and promised
to deliver ten days later. The next day,
after the sale to B,
A sold the same car to C and
immediately affected delivery. On the
day agreed upon, A did
not deliver the car to B. Which is
correct?
A. B can cancel the contract
between A and C, because the
contract between A and B was
perfected ahead of the contract
between A and c
B. B should make the demand to
make A in default
C. A is liable to B for the value of
the car plus damages after B
makes a demand
D. A is liable to B for damages and
is in default without need of any
demand
38. X sold to V her Yamaha organ. It
was agreed that X would fix the price
a week later. At the
agreed time, X named the price
P10,000. V agreed. Was the sale
perfected?
A. No, because the price was left
to the discretion of one of the
contracting parties
B. No, because at the time of sale
the price was not fixed
C. Yes, because the price fixed by
one of the parties was
accepted by the other
D. Yes, because there was
agreement that X would fix the
price
39. Not an implied warranty in a
contract of sale
A. Right to sell the thing at the
time of perfection of the
contract
B. Reasonably fit for the purpose
they are acquired
C. Merchantable in quality
D. Free from charges or
encumbrances not declared or
known to the buyer
40. After the death of C, A, C’s son,
sold his inheritance though its amount
has not yet been
determined to B for a
consideration of P1,000,000. Which is
correct?
A. The contract is valid if the value
of inheritance is at least equal
to P1,000,000
B. The contract is valid even
though the inheritance to be
turned over to B is less than
P1M
C. The contract is void as future
inheritance cannot be the object
of sale
D. The contract is unenforceable
41. X stole a fountain pen from P and
sold it to Z Merchandise, a “store for
pens”, which paid for
it in good faith, not knowing it was
stolen. The “store” then sold it to C, a
student.Which is
correct?
A. C cannot be considered as the
owner because the original
seller (X) is not the real owner.
B. P may recover the fountain pen
from C without reimbursement
because he is the legal owner.
C. C became the owner because
he purchased the pen from a
merchant store
D. C became the owner regardless
of whether the seller is a store
for pens or not because C
bought it in good faith.
42. When goods are delivered to the
buyer on “sale or return” for period of
seven days,
ownership of the goods passes to
the buyer
A. Upon perfection of the contract
B. Upon acceptance by the buyer
of the offer of the seller
C. Upon expiration of seven days
D. Upon delivery of the goods
43. Quasi-traditio is equivalent to
A. Traditio longa manu
B. Traditio brevi manu
C. Traditio constitutum
possessorium
D. Execution of a public instrument
 Law on Sales
44. Vi imported radios from Taiwan
and asked for 220 volts radios. The
radios arrived clearly
labeled 220 volts and Vi sold them
to the public as such. Later the
customer complained that
the radios have been mislabeled
by the manufacturer and that they
were good only for 110
volts. As a consequence
A. Vi is liable to the vendees for
any hidden defects even though
he is not aware.
B. Vi is not liable because he is in
good faith
C. Vi is not liable under the
principle of “caveat emptor” or
let the buyer beware
D. The vendees may hold the
manufacturer liable but not Vi
because Vi specifically asked for
220 volts
45. If the redemption is to be made
by the seller, one of the following need
not be given to the
Buyer
A. Expenses of the contract
B. Interest on the price of the sale
C. Necessary expenses on the
thing sold
D. Price of the sale
46. Not an element of the sellers right
of stoppage in transit
A. The goods must be in transit
B. The buyer must be insolvent
C. The seller must be in possession
of the goods
D. The seller must be unpaid
47. A sold his only car to B for
P300,000 to be paid as follows:
P150,000 upon delivery of the
car to B and the balance at
P10,000 per month until full payment
of the purchase price. Later
the car gets burned in the
possession of B through fortuitous
event and without B’s fault,
before full payment of the
balance. Is B obliged to pay the
balance?
A. No, because the car was lost
through fortuitous event and
without B’s fault, hence B’s
obligation is extinguished.
B. No, because the loss should be
borne by the seller as this an
installment sale so until the
buyer pays the full amount of
the price of the sale, A remains
to be the owner.
C. Yes, but A must give another
car to B because of the principle
“genus nunquam peruit” or
generic thing never perishes
D. Yes, because the principle “res
perit domino” or the thing
perishes with the owner.
48. A, B and C are co-owners of an
undivided parcel of land, A sold his 1/
3 interest to B
absolutely. Which is correct?
A. C may exercise his right of
redemption of the interest sold
by A to B
B. C cannot exercise the right of
redemption because the sale
was made in favor of a co-
owner
C. The sale made by A to B is void
because it was not made in
favor of a stranger
D. C may redeem only 1 /2 of the
interest sold by A to B
49. Using the preceding number,
suppose, instead of selling his interest
to B, A sold it to D, who
can exercise the right of
redemption?
A. Both B and C
B. B but not C
C. C but not B
D. A, B and C
50. Which of the following cannot be
the object of a contract of sale?
A. Sale of credit
B. Young animal not yet conceived
at the time of perfection
C. Land which the seller expects to
buy
D. Future inheritance
51. A offered for sale to B 20 cavans of
wagwag rice and fixed the price per
cavan at P10 over
the price offered at Z’s store in
Cainta Market. The price is
A. Not certain because the price at
Cainta Market is not stated
 Law on Sales
B. Certain because it has got
reference to another thing
which is certain
C. Certain because there is a price
ceiling for price of land
D. Not certain so court may fix the
price
52. X sold his motor vehicle to V who
bought it for P200,000. It turned out
however, that X has
2 motor vehicles: Toyota valued
at P230,000 and Lancer valued at
P220,000. Which is
correct?
A. There is no contract of sale
between X and V
B. The parties may ask for
interpretation or reformation
C. The parties can ask for
annulment of the contract
D. V may choose between the
Toyota or Lancer
53. X offers to V 100 electric fans for
P80,000 payable in 60 days with 12 %
interest per annum.
V accepted the offer by telegram
provided that interest is reduced to
6%. If there is no
further communication between X
and V relating to the terms
A. The contract is perfected
because of the acceptance by V
B. There is no contract yet
between X and V because V
made a counter offer
C. The contract is perfected under
the terms of X
D. There is no contract yet unless
v gives earnest money
54. X owns 50 mango trees bearing
fruits, ready for harvest. She told all
the fruits of all the trees
to V who paid P100,000. X told V
that he can harvest her fruits anytime
he likes and
pointing at the mango trees. For
legal purposes, X has fulfilled her
obligation to deliver the
mango fruits to V by
A. Traditio longa manu
B. Traditio brevi manu
C. Traditio constitutum
possessorium
D. Execution of a public instrument
55. X sold her specific car to V for
P200,00 payable in 5 equal
installments. X delivered the car
to V but a mortgage was
constituted on the car to answer for
the unpaid installments. V paid
the first 2 installments but failed to
pay the last 3 installments. X
foreclosed the mortgaged
property and sold it at public
auction for P100,000. Which is
correct?
A. X can recover from V the
balance of P20,000 even if
there is no stipulation to that
effect
B. X can recover from V the
balance of P20,000 if there is
stipulation to that effect
C. X cannot recover the deficiency
except if there is stipulation to
that effect
D. X cannot recover the deficiency
even if there is stipulation to
the contrary
56. Ownership of the thing sold is
A. Retained by the seller in “sale
or return
B. Transferred to the buyer upon
constructive or actual delivery
of the thing sold
C. Acquired by the buyer upon
perfection of the contract
D. Transferred to the buyer upon
acceptance of the price
57. X sold his horse to Y for P40,000.
No payment has yet been made and
the sales document
does not provide the date of
delivery. Before delivery and payment
the horse gave birth to a
baby horse, which is correct?
A. Y is entitled to the baby horse
which was born after the
perfection of the contract
B. X is entitled to the fruit (baby
horse) as Y has not paid the
price yet
C. X is entitled to the (baby horse)
because it was born before his
obligation to deliver arises
D. Y should pay additional amount
for the baby horse to be entitled
to it
 Law on Sales
58. A contract of sale is in the stage
of conception when
A. There is meeting of the minds
B. Negotiations are in progress
C. The parties come to an
agreement
D. The contract is perfect
59. A seller sold to a buyer a piece of
jewelry at a price of P25,000. The
contract provides that
the buyer will pay the seller cash,
P20,000 and for the balance, the
buyer will give the seller
a micro oven worth P5,000. What
is the nature of the contract?
A. Sale
B. Partly sale partly barter
C. Barter
D. Commodatum
60. X, the guardian of V, sold V’s
house and lot worth P480,0000 for
P430,000
A. The contract can be rescinded
because of inadequacy of price
B. The contract cannot be
rescinded because there is no
fraud, mistake or undue
influence
C. The contract cannot be
rescinded because all the
elements of a contract are
present
D. The contract can be rescinded
by X.
61. X leased to V a 5 Freezer for two
years at a lease rental fee of P1,000
per month and signed
an option in favor of V to buy the
freezers at the end of the term of the
lease at P50,000. All
rental fee paid are to be
considered as partial payment of the
sale. After 12 months V was
able to pay the rental fee for 9
months and was in arrears for three
months. X terminated the
lease contract and repossessed
the freezers. The consequence of the
transaction is
A. X can collect the rental fees for
three months which are in
arrears.
B. X can collect the rental fees for
the unexpired 12 months of the
lease contract.
C. When X took possession of the
generator, he has no further
action against V
D. X in terminating the lease and
repossessing the generator is
obliged to refund the 9 months
rental fee, paid by V even if
there is a stipulation to the
contrary.
62. X sold his car to Z for P60,000. No
date was fixed for the performance of
the obligation of
the seller and the buyer. The
obligation of X is
A. To deliver the car immediately
because the sale is a perfected
contract
B. To deliver the car only after Z
writes to X demanding the
delivery of the car.
C. To deliver the car only after Z
pays the P60,000
D. To rescind the contract because
there is no time fixed for the
delivery
63. I. The vendor need not be the
owner at the time the sale is
perfected. It is sufficient that he is
the owner at the time the thing
sold is delivered.
II. The sale of a vain hope or
expectancy is voidable.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
64. I. There may be a contract of sale
of goods, whose acquisition by the
seller depends upon a
contingency which may or may
not happen.
II. If the consideration of the
contract consists partly in money and
partly in another thing, it
shall be considered a barter if
the value of the thing given as a part
of the consideration
exceeds the amount of the
money or its equivalent.
 Law on Sales
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
65. I. If the price is grossly
inadequate, the sale is void.
II. Whenever option money is
given in a contract of sale, it shall be
considered as part of the
price and a proof of the
perfection of the contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
66. I. Earnest money and option
money both apply to perfected sale.
II. In a contract of sale of personal
property the price of which is payable
in installment, the
vendor may cancel the sale
should the vendee fail to pay.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
67. I. Should the vendee’s failure to
pay, cover two or more installments,
the vendor may
foreclose the chattel mortgage
on the thing sold but he shall have no
further action against
the purchaser to recover any
unpaid balance of the price, except if
there is an agreement to
the contrary.
II. Sale is a consensual contract,
therefore delivery or payment is not
essential for perfection.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
68. I. The ownership of the thing sold
shall be transferred to the vendee
upon perfection of the
contract.
II. An unaccepted unilateral
promise to buy or to sell a
determinate thing for a price certain
is binding upon the
promissory.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
69. I. The husband and the wife
cannot sell property to each other, as
a rule.
II. The sale of a piece of land or
interest therein when made thru an
agent is void unless the
agent’s authority is in writing
even if the sale itself is in s public
instrument and has been
registered.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
70. I. The expenses for the execution
and registration of the sale shall be
borne by the vendee,
unless there is a stipulation to
the contrary.
II. If the same thing should have
been sold to different vendees the
ownership shall be
transferred to the person who
may have taken possession thereof in
good faith.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
71. I. Any stipulation exempting the
vendor from the obligation to answer
for eviction shall be
 Law on Sales
void.
II. The vendor is responsible to the
vendee for any hidden faults or
defects in the thing sold
only if he was aware thereof.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
72. I. If the animal sold should die
within three (3) days after its
purchase, the vendor shall be
liable to the vendee.
II. The fixing of the price can
never be left to the discretion on one
of the contracting parties.
However, if the price fixed by
one of the parties is accepted by the
other, the sale is
perfected.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
73. I. Option money is considered as
part of the purchase price while
earnest money is not.
II. The Maceda Law refers to the
sale of personal property by
installments while the Recto
Law refers to the sale of real
property by installments.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
74. I. If two or more animals are sold
together, whether for lump sum or for
a separate price for
each of them, the redhibitory
defect of one shall give rise to the
redhibition of the others.
II. There is no warranty against
hidden defects of animals sold at fairs
or at public auctions
or of livestock sold as
condemned.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
75. I. The ownership in the thing shall
not pass to the purchaser until he has
fully paid the price.
II. If at the time the contract of
sale is perfected, the thing which is
the object of the contract
has been partially lost, the
contract shall be without effect.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
76. I. Where the seller of goods has a
voidable title thereto, but his title has
not been avoided at
the time of the sale, the buyer
acquires a good title to the goods.
II. If the vendee has renounced the
right to warranty in case of eviction,
and eviction should
take place, the vendor shall
only pay the value which the thing
sold had at the time of sale.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false
77. I. Unless otherwise agreed, the
buyer of goods is not bound to accept
delivery thereof by
installment.
II. In case of doubt, a contract
purporting to be an equitable
mortgage shall be construed as a
sale with a right to repurchase.
A. First statement is true, second
statement is false.
 Law on Sales
B. First statement is false, second
statement is true. A. Pledgor or mortgagor must be
C. Both statements are true. the absolute owner
D. Both statements are false B. Pledgor or mortgagor must have
the free disposal of the thing
78. I. The creditors of the vendor pledged.
cannot make use of the right of C. The thing pledged or mortgaged
redemption against the may be appropriated if the
vendee, until they have debtor cannot pay.
exhausted the property of the vendor. D. Pledge and mortgage are
accessory contracts
II. Sale is a real contract because
delivery is necessary to transfer 4.A borrowed P100,000 from B with
ownership to the buyer. A’s ring given to B by way of pledge. It
was stipulated that
A. First statement is true, second in case of non-payment on due
statement is false. date, the ring would belong to B. This
B. First statement is false, second for feature is
statement is true.
C. Both statements are true. A. Caveat emptor
D. Both statements are false B. Dacion en pago
C. Pactum comisorio
D. Pacto de retro
CREDIT TRANSACTIONS (Cpar)
5.A borrowed P100,000 from B, and as
PLEDGE AND a security A pledged his ring to B.
MORTGAGE After the obligation
falls due, A goes to b relinquishing
1.Which of the following statements is ownership of the ring in favor of B.
true? This is

A. Any stipulation in a contract of A. Caveat emptor

pledge authorizing the pledge
to sell the thing pledged if the
pledgor cannot pay is void.
B. In mortgage, the mortgagee is
entitled to the entire proceeds
of the sale of the thing
mortgaged.
C. In mortgage and in pacto de
retro sale, the title to the
property which is the subject
matter of the contract is
transferred to the other party.
D. Real estate mortgage is an
accessory contract.
2. In real estate mortgage, the
mortgagor can sell the property
mortgaged
B. Dacion en pago
C. Pactum comisorio
D. Pacto de retro
6.A borrowed P30,000 from B, and as
security, he pledged his ring, pair of
earrings and
necklace. On due date, A paid
P20,000. As a result,
A. A can demand the return of one
(1) of the things pledged
B. A can demand the return of any
two (2) of the things pledged
C. A can demand the return of the
ring
D. A cannot demand the return of
any of the things pledged

A. Only if with the oral consent of 7. A mortgaged his residential land to

the mortgagee
B. Only if with the written consent
of the mortgagee
C. If not prohibited to sell
D. Even without the consent of the
mortgagee
3. Elements of contracts of pledge
and mortgage, except
B as a guarantee for the payment of
P400,000 obligations
to B. They agreed that A should
not sell the land while the obligation
exists. Before the
maturity of the mortgage, C
offered to buy the land from A. Which
is correct?
 Law on Sales
A. A cannot sell the land to C
because of the agreement not
to sell
B. A can sell the land to C only if B
consents in writing
C. A can sell the land to C despite
the agreement not to sell
D. A cannot sell the land to C
unless A pays the obligation
8. S, minor of 16 years old, sold her
bracelet to B for P8,000. Later, B,
needing money to pay
her daughter’s tuition fee,
borrowed P15,000 from C and as a
security, pledged the bracelet
to the latter. B failed to pay C
resulting into auction sale of the
bracelet in favor of D for
P10,000 only. Which of the
following statements is correct?
A. The title of B over the bracelet
is not valid, hence the pledge,
as well as the sale of said
bracelet is likewise defective.
The pledgor must be the owner
of the thing pledged.
B. The deficiency of P5,000 may
still be recovered by C from B if
there is a stipulation to this
effect.
C. C can no longer recover the
deficiency of P5,000 from B.
The pledge together with the
sale is valid. The voidable title
of B is valid because it is not
yet annulled.
D. If D was a purchaser in bad
faith as he knew of the
defective title of B over the
bracelet from S, ownership will
not pass to him (D).
9. In the preceding number,
assuming what was executed by B in
favor of C was valid chattel
mortgage which was eventually
foreclosed and the bracelet was old to
D at the public
auction for the same amount,
which statement is correct?
A. The title of B over the bracelet
is not valid, hence the chattel
mortgage, as well as the sale of
said bracelet is likewise
defective. The mortgagor must
be the owner of the thing
mortgaged.
B. The deficiency of P5,000 may
still be recovered by C from B
C. C can no longer recover the
deficiency of P5,000 from B as
the mortgage, together with the
foreclosure sale, was valid. The
title of B was still valid.
D. If D was a purchaser in bad faith
as he knew of the defective title
of B over the bracelet,
ownership will not pass to him
(D).
10. S sold to b a specific car for
P200,000 payable in four equal
installments. S delivered the car
to B but required B to mortgage it
back to S to answer for the unpaid
installments. B paid the
1st and 2nd installments but he
failed to pay the balance. S foreclosed
the mortgaged property
and sold it at public auction for
P80,000. As a result,
A. S can recover from B the
balance of P20,000
B. S can recover from B the
balance of P20,000 if there is
stipulation to that effect.
C. S cannot recover the deficiency
any more even if there is
stipulation to that effect
D. S cannot recover the deficiency
except if there is stipulation.
PLED
GE
11. I. The creditor cannot appropriate
the things given by way of pledge or
mortgage, or
dispose of them, except if
there is a stipulation to the contrary.
II. The indivisibility of a pledge or
mortgage is affected by the fact that
the debtors are
solidarily liable.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
12. I. A pledge or mortgage is
indivisible, except if the debt may be
divided among the
 Law on Sales
successors in interest of the
debtor or of the creditor.
II. In case of pledge of animals,
their offspring shall pertain to the
pledge of the animals.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
13. I. The creditor can use the thing
pledged even without the authority of
the pledgor.
II. If through the negligence or
willful act of the pledge, the thing
pledge is in danger of
being lost or impaired, the pledge
may cause the same to be sold at a
public auction.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
14. I. If the thing pledged is returned
by the pledge to the pledgor or owner,
the pledged is
extinguished, except if there is
stipulation to the contrary.
II. If subsequent to the perfection
of the pledge, the thing is in the
possession of the pledgor
or owner there is a conclusive
presumption that the same has been
returned by the pledge.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
15. I. A statement in writing by the
pledge that he renounces or abandons
the pledge is
sufficient to extinguish the
pledge only if accepted by the pledgor
or owner and the thing
pledged is returned.
II. At the public auction, the
pledge may also bid and his ofer shall
be valid even if he is the
only bidder.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
16. I. The sale of the thing pledged
shall extinguish the principal
obligation provided the
proceeds of the sale are equal
to the amount of the principal
obligation.
II. If the price of the sale is more
than the amount of the obligation, the
debtor shall be
entitled to the excess, unless it
is otherwise agreed.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
17. I. If the price of the sale is less
than the amount of the obligation the
creditor shall not be
entitled to recover the
deficiency except if there is a
stipulation to the contrary.
II. If two or more things are
pledged, the pledgor may choose
which he will cause to be sold,
unless there is a stipulation to
the contrary.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
18. I. A pledge shall not take effect
against third person if a description of
the thing pledged and
the date of the pledge do not
appear in a public instrument.
 Law on Sales
II. If after the auction sale, the
thing pledged is not sold, the pledge
can appropriate the thing
pledged.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
19. I. Z pledged his ring to B for
P20,000. Z failed to pay his obligation
on time. B sold the ring
at a public auction for P16,000.
B cannot recover P4,000 from Z even
if there is
stipulation.
II. Using the same facts, if the
proceeds of sale is P24,000, Z can
recover the excess of
P4,000 if stipulated.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
20. I. In sale at public auction, the
pledgor or owner may be abider and
shall have a better right
if he should offer the same
terms as the highest bidder.
II. Pledge is a real contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
MORT
GAGE
21. I. A stipulation prohibiting the
owner from alienating the immovable
mortgaged shall be
void.
II. The equity of redemption refers
to the right of the mortgagor to
redeem the mortgaged
property within a certain
period of time after it was sold to third
person.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
22. I. The right of redemption refers
to the right of the mortgagor to
redeem the mortgaged
property after his default in
payment but before the sale.
II. The registration in the Registry
of Property is necessary for the
validity of a contract of
real estate mortgage.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
23. I. Except in case of sale of
personal property in installments, if
the proceeds of the sale is
less than the principal
obligation, the creditor-mortgagee can
recover the deficiency.
II. A borrowed P100,000 from B
payable in 10 equal monthly
installments. To secure
payment of the loan, A
executed chattel mortgage on his
Mercedes Benz car. If A
violates the condition of the
mortgage, and the car was foreclosed
and sold at a public
auction but the proceeds is
less than the collectible amount, B
cannot recover the
deficiency.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
24. I. In real estate mortgage the
mortgagor can sell the property
mortgage even without the
consent of the mortgagee.
 Law on Sales
II. In chattel mortgage, the
mortgagor cannot sell the thing
mortgage even with the written
consent of the mortgagee
appearing at the back of the
mortgage.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
25. I. Chattel mortgage like pledge is
a real contract.
II. In chattel mortgage like pledge
the possession of the thing mortgaged
is vested in the
creditor.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
L D. Both statements are false.
O
A 30. I.
N can lend or lease the object of the
26. D deposits his momey by way of a
savings account with C Bank. The
contract between D
and C is
A. Deposit
B. Agency
C. Commodatum
D. Mutuum
27. I. In mutuum or loan, one of the
parties delivers to another something
not consumable so
that the latter may use the
same for a certain time and return it.
II.Mutuun is essentially gratuitous.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
28. I. In commodatum one of the
parties delivers money or consumable
thing upon the
condition that the same
amount of the same kind and quality
shall be paid.
II.In commodatum and mutuum
ownership of the thing loan is
transferred to the borrower.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
29. I. Commodatum and mutuum
involve real and personal property.
II. The bailee in commodatum
acquires the use of the thing loaned
and its fruits.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
The bailee in commodatum
contract to a third person.
II. When there are two or more
bailees to whom a thing is loaned in
the same contract, they
are liable jointly.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
31. I. A contract whereby one person
transfers the ownership of non-
fungible things to another
with the obligation on the part
of the latter to give things of the same
kind, quantity and
quality shall be considered a
loan.
II. Precarium is a kind of mutuum
where the bailor may demand the
thing loaned at will.
 Law on Sales
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
DEPOSIT
32. I. An agreement to constitute a
deposit is binding and is perfected
from the moment there is
meeting of minds.
II. Movable and immovable things
may be the object of judicial deposit.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
35. I. Unless there is a stipulation to
the contrary, the depositary cannot
deposit the thing with a
third person.
II. When the depositary has
permission to use the thing deposited,
the contract loses the
concept of a deposit and
becomes a loan or commodatum even
when safekeeping is still
the principal purpose of the
contract.
A. First statement is true, second
statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.
36. I. The thing deposited shall be
returned with all its products,
accessories and accessions.

II. A contract of deposit is

perfected from the moment there is
meeting of minds.

33. I. A contract of deposit must be A. First statement is true, second

in writing. statement is false.
B. First statement is false, second
II. The depositary can make use of statement is true.
the things deposited even without the C. Both statements are true.
express permission D. Both statements are false.
of the depositor.

A. First statement is true, second

statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.

34. I. Fixed, savings, and current

deposits of money in banks and
similar institutions shall be
governed by the provisions
concerning simple loan.

II. The depositary can demand

that the depositor prove his ownership
of the thing deposited.

A. First statement is true, second

statement is false.
B. First statement is false, second
statement is true.
C. Both statements are true.
D. Both statements are false.