RFBT 3- LAW ON CREDIT TRANSACTIONS

Pre-test

1. The following requisites are essential to the contracts of pledge. seal estate mortgage and chattel mortgage, except
a. That they be constituted to secure the fulfillment of a principal obligation such as contract of loan.
b. That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged.
c. That the persons constituting the pledge or mortgage have the free disposal of their property, and in the absence thereof, that they
be legally-authorized for the purpose.
d. That the thing pledged or mortgaged be places in the possession of the creditor, or of a third person by common
agreement.
2. The following are kinds of principal obligations that may be secured by a contracts of pledge, of real estate mortgage or of chattel
mortgage, except
a. Pure obligations
b. Conditional obligation whether suspensive condition or resolutory condition
c. Obligations with a period whether suspensive period (ex die) or resolutory period (in diem)
d. Null and void obligations
3. When in the pledgor or mortgagor required to be the owner of the thing pledged or mortgaged for the validity of contracts of pledge, of
real estate mortgage or of chattel mortgage?
a. At the time the principal obligations is constituted.
b. At the time the contract of pledge or mortgage is constituted.
c. At the time of the failure to pay the principal obligation.
d. At the time the thing to be pledged or mortgaged is to be delivered.
4. It is a stipulation whereby the thing pledged or mortgaged shall automatically become the property of the creditor in the event of non-
payment of the debt within the term fixed.
a. Pactum credatium
b. Pactum commissonum
c. Pactum debitarium
d. Pactum crematorium
5. The following are the instances where the thing pledged or mortgaged may be sold or alienated to pay the principal obligation, except
a. If the pledgor or mortgagor fails to fulfill certain conditions and such violation would make the debt due and demandable.
b. If the debtor has lost the right to make use of the period or where there is an acceleration clause in the payment of installment.
c. Upon default to pay the obligation at maturity.
d. Before maturity of the principal obligation.
6. What is the nature of a contract of pledge, of chattel mortgage, of real estate mortgage or of antichresis?
a. It is divisible if the principal contract is joint.
b. It is indivisible if the principal contract solidary.
c. It is divisible whether the principal contract is joint or solidary.
d. It is indivisible whether the principal contract is joint or solidary.
7. It is a contract by virtues of which the debtor delivers to the creditor or to a third person a movable, or instrument evidencing incorporeal
rights for the purpose of securing the fulfillment of a principal obligation with the understanding that when the obligation is fulfilled, the
thing delivers shall be returned with all its fruits and accessions.
a. Contract of Pledge
b. Contract of Chattel mortgage
c. Contract of Real estate mortgage
d. Contract of Antichresis
8. In case the cause or consideration of the contract of pledge is not stipulated, what is the cause or consideration of a contract of pledge?
a. It has no cause or consideration.
b. The cause or consideration of the principal obligation or contract of loan.
c. The cause or consideration is the liberality of the pledgor.
d. The cause is the service remenerated.
9. The following are the characteristics of a contract of pledge, except
a. Consesual – It is perfected by mere consent.
b. Accessory – It has no independent existence of its own because there must be contract of loan.
c. Unilaterial – It creates an obligation on the part of the creditor to return the thing upon the fulfillment of the principal obligation.
d. Subsidiary – The obligation incurred does not arise until the fulfillment of the principal obligation which is secured.
10. The following are the essential requisites of conventional pledge, except
a. That it be constituted to secure the fulfillment of a principal obligation or contract of loan.
b. That the pledgor be the absolute owner of thing pledged.
c. That person constituting the pledge has the free disposal of his property,and in the absence theoref,that he be legally authorized
for the purpose.
d. That the contract of pledge be constituted in public document.
11. What is the nature of a contract to constitute a pledge?
a. Consensual contract
b. Real contract
c. Formal contract
d. Solemn contract
12. What is the legal effect of a promise or contract to constitute a pledge?
a. It is perfected by delivery of the thing pledge.

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 b. It is perfected through the notarization of the promise.
c. It is perfected by mere consent and gives gives rise only to a personal action between the contracting parties.
d. It gives rise to a real action over the thing pledged.
13. What is the nature of a contract of pledge?
a. Consensual contract
b. Real contract
c. Formal contract
d. Solemn contract
14. The following may become the object of a contract of pledge, except
a. All movable
b. Personal property susceptible of possession.
c. Incorporeal rights which are evidenced by negotiable instruments, bill of lading, shares of stocks, bonds, warehouse receipts and
similar documents.
d. Real or immovable properties and rights thereon.
15. What is the form of contract of pledge to bind or to affect third person?
a. It must be registered in the chattel mortgage registry.
b. It must be registered in the registry of deeds.
c. It must be in public instrument showing a description of the thing pledged and the date or the pledge.
d. It must be recorded in the Intellectual Property Office.
16. The contract of pledge shall cover the following, except
a. The thing pledged.
b. The fruits, income, dividends or interests earned or produced by the thing pledged, unless there is stipulation excluding them.
c. The offspring, when the thing pledged is an animal, unless there is a stipulation excluding them.
d. The future inheritance of the pledgor.
17. The following are the rights of the debtor-pledgor, except
a. To alienate, with the consent of the pledge, the thing pledged.
b. To continue to be the owner of the thing pledged unless it is expropriated.
c. To become the owner of the offspring of the animal pledged if there is no stipulation to the contrary but such offspring shall be
subject to the pledge.
d. To demand the return of the thing pledged despite defaulting on the payment of the secured principal obligation.
18. The following are the obligation of the debtor-pledgor, except
a. To pay the debt and its interest, with expenses, in a property case, when they are due.
b. To pay damages that the pledge may suffer by reason of the flaws of the thing pledged, if he was aware of such flaws but he did
not advise the pledge of the same
c. To pay for the expenses which are necessary for the preservation of the thing pledged
d. To warrant the thing pledged for its quality and merchantability
19. The following are the rights of the creditor-pledgee, except
a. To retain in his possession the thing pledged until the debt is paid
b. To demand reimbursement of the expenses made for the preservation of the thing pledged
c. To bring actions which pertain to the owner of the thing pledged in order to recover it from, or defend it against third person.
d. To become the automatic owner the thing pledged upon first default of debtor to pay the principal obligation at maturity
date.
20. The following are the obligation of creditor-pledgee,except
a. To take care of the thing pledged with the diligence of a good father of a family
b. To be liable for the loss or deterioration of the thing pledged unless it is due to a fortuitous event
c. To be responsible for the acts of his agents or employees with respect to the thing pledged.
d. To deposit the thing pledged with a third person even not authorized by the court
21. The following are the rights of a third person who pledges his own movable property to secure debt of another, except
a. To be indemnified by the debtor if he pays the creditor
b. To be subrogated to all the rights of the creditor against the debtor if he pays creditor
c. To be released from liability in the cases provided by law
d. To become principally liable
22. A third person who pledges his own movable property to secure the debt of another shall be released from liability in the following cases
and may ask for the return of the thing pledge from the pledge, except
a. If the creditor voluntarily accepts immovable property in payment of the debt even if the creditor thereafter loses the same by
eviction
b. If an extension of time is granted to the debtor by the creditor without pledgor’s consent
c. If through some act of creditor, the pledgor cannot be subrogated to the rights, mortgages and preferences of the creditor
d. If the debtor defaults in the payment of principal obligation on the maturity date
23. If two or more things are pledged, who has the right to choose which thing will be sold in the absence of stipulation?
a. Pledgor
b. Pledge
c. Debtor
d. Government
24. Pledge may be extinguished directly or indirectly. The following are the modes of extinguishing the contract of pledge directly, except
a. When the principal obligation secured by the pledged is extinguished
b. Return by the pledge of the thing pledged to the pledgor or owner
c. Renunciation or abandonment in writing by the pledgee of the pledge

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 d. Appropriation of the thing pledged by the pledgee if the thing pledged is not sold in the first and second auctions.
25. If the thing is found in the possession of the pledgor or owner of the thing in the possession of a third person who has received it from the
pledgor or owner , which of the following is incorrect?
a. There is prima facie presumption that the contract of pledge is extinguished
b. There is prima facie presumption that pledger received the thing in good faith.
c. There is prima facie presumption that pledgee returned the thing pledged
d. There is prima facie presumption that the contract of loan is extinguished
26. Which of the following statements is incorrect in case the pledge renounces or abandons in writing the contract of pledge?
a. The contract of pledge is extinguished but the contract of loan remains
b. The acceptance by the pledgor is not necessary for extinguishing contract of pledge
c. The pledgee becomes a depositary upon renunciation if in the meantime, the thing pledged is not yet returned to the owner
d. The return of the thing pledged is necessary for extinguishing the contract of pledge for this mode of contract of pledge
extinguishment
27. The following are the formalities required for the sale of the thing pledged in case of failure of the debtor to pay the principal obligation,
except
a. It must be public auction
b. It must be through a notary public
c. There must be a notice to the debtor and the owner of the thing pledged, stating the amount for which the public sale is to be held
d. The thing pledged must be sold by the pledgee at the first auction only
28. Sale of pledged personal property in contract of pledge shall be made in
a. Public auction or sale only
b. Private auction or sale only
c. Generally public auction or sale unless there is agreement for private auction or sale
d. Generally private auction or sale unless there is agreement for public auction or sale
29. The following persons may bid at the public auction, except
a. The pledgor or owner
b. The pledgee if there are other bidders
c. Third persons
d. The pledgee even if he is the only bidder
30. In case the bids of the pledgor-owner, the pledgee and a third person are equal and considered the highest bid, who shall be preffered
among them?
a. Pledgee
b. Pledgor-owner
c. Third person
d. The auctioneer
31. If the thing pledged is not sold in the first and second public auctions, which of the following statements is incorrect in case of
appropriation by the pledge of the thing pledged?
a. The creditor may appropriate the thing pledged validly
b. The contract of pledge is extinguished if the creditor decided to appropriate the thing pledged
c. The principal obligation/contract of loan is extinguished if the creditor decided to appropriate the thing pledged.
d. The principal obligation/contract of loan is not extinguished if the creditor decided to appropriate the thing pledged.
32. It is a type of pledge which refers to the right of a person to retain a thing until he receives payment of his claim.
a. Conventional pledge
b. Voluntary pledge
c. Agreed pledge
d. Legal pledge or pledge by operation of law
33. The following are examples of legal pledge, except
a. A professor in good faith may retain the movable upon which he has incurred necessary and useful expenses until he has been
reimbursed therefore.
b. He who has executed work upon movable has a right to retain it by way of pledge until he is paid.
c. The depositary may retain the thing deposited until the full payment of what may have been due from him by reason of the
deposit.
d. A contract by virtue of which the debtor delivers to the creditor or a third person a movable, or instrument evidencing
incorporeal rights for the purpose of securing the fulfillment of a principal obligation with the understanding that when
the obligation is fulfilled, the thing delivered shall be returned with all its fruits and successions.
34. It is a contract whereby the debtor or third person secures to the creditor the fulfillment of a principal obligation, specially subjecting to
such security immovable property or real rights over immovable property in case the principal obligation is not complied with at the time
stipulated.
a. Real estate mortgage
b. Chattel mortgage
c. Pledge
d. Antichresis
35. The following are the essential requisites of a contract of real estate mortgage for its validity, except
a. That it be constituted to secure the fulfillment of a principal obligation
b. That the mortgagor be the absolute owner of the thing mortgaged.
c. That the person constituting the mortgage must have the free disposal of his property, and in the absence thereof, that he be
legally authorized for the purpose.
d. That the document in which the mortgage appears be recorded in the Registry of Property.

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36. The following are the important characteristics of contract of real estate mortagage, except
a. Accessory- it cannot exist without a principal obligation
b. Indivisible- it creates a lien on the whole or all of the properties mortgaged, which lien continues until the obligation is secures
has been fully paid.
c. Inseparable- it subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation
for whose security it was constituted
d. Real contract- It is perfected by the delivery of the thing mortgaged
37. The following may become object of contract of real estate mortgage, except
a. Immovable property
b. Real property
c. Rights on immovable property
d. Personal property
38. What is the status of contract of real estate mortgage if the property covered as collateral is a personal property instead of real property?
a. The contract of real estate mortgage is always void because matter of real estate mortgage is immovable property
b. The contract of real estate mortgage may be valid as to the contracting parties on the basis of doctrine of estoppels but the third
person directly affected by said void contract may ask for its declaration of nullity.
c. The contract of real estate mortgage will be valid to both contracting parties and even third persons
d. Third persons who are not directly affected by the real estate mortgage may ask for the declaration of nullity of the real
mortgage contract
39. When a movable property is foreclosed and sold under Act No. 1508 for Chattel Mortgage, the public auction sale by a public officer shall
be made at the public place of municipality.
a. Domicile of mortgagor
b. Location of movable property
c. Domicile of mortgagee
d. Either a or b
40. Which of the following statements pertains to equitable mortgage?
a. It is one which created by the agreement of the parties
b. It is one executed pursuant, to an express requirement of a provision of law.
c. Rents and income not yet received when the obligation becomes due
d. It is one which although lacks certain formality, form of words or other requisites provided by statute, shows the
intention of the parties to charge the real property as a security for a debt and contains nothing contrary to law.
41. The contract of real estate mortgage shall cover the following, except
a. Real property mortgaged
b. Improvements
c. Natural accessions
d. Future inheritance of the mortgage
42. Indicate the proper order on how the proceeds of sale from judicial or extra-judicial foreclosure of Real Estate Mortgage shall be
distributed:
I. Cost of sale
II. Claim of the person foreclosing the mortgage
III. Claims of junior encumbrances in the order of their priority
IV. Mortgagor or his agent
a. I- II-III- IV
b. I- III- II- IV
c. II- I- IV- III
d. III- II- I- IV
43. It is a conditional sale of personal property as security for a payment of a debt, or the performance of some other obligation specified
therein, the condition being that the sale shall be void upon the seller paying to the purchaser a sum of money or doing some other act
named. If the condition is performed according to its nterms the mortgage and sale immediately become void, and the mortgagee is
thereby divested of his title.
a. Chattel Mortgage
b. Pledge
c. Real Estate
d. Antichresis
44. The following requisites of chattel mortgage for its validity, except
a. That it be constituted to secure fulfillment of a principal obligation
b. That the mortgagor be the absolute owner of the thing mortgaged
c. That the person constituting the mortgage must have the free disposal of his property, and in the absence thereof, that he be
legally authorized for the purpose
d. That an affidavit of good faith must be appended to the Deed of Chattel of Mortgage and recorded therewith in the
Chattel Mortgage Register
45. It is a conditional sale of personal property as security for a payment of a debt, or the performance of some other obligation specified
therein, the condition being that the sale shall be void upon the seller paying to the purchaser a sum of money or doing some other act
named. If the condition is performed according to its nterms the mortgage and sale immediately become void, and the mortgagee is
thereby divested of his title.
a. Chattel Mortgage
b. Pledge
c. Real Estate

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 d. Antichresis
46. The following are the important characteristics of contract of chattel mortgage, except
a. Accessory- it cannot exist without a principal obligation or contract of loan
b. Indivisible- it creates a lien on the whole or all of the properties mortgaged, which lien continues until the obligation it secures
has been fully paid
c. Inseparable- it subjects the property upon which it is imposed, whoever the possessor may be, to the fulfillment of the obligation
for whose security it was constituted
d. Real contract- it is perfected by delivery of the personal property mortgaged
47. The following may become object of chattel mortgage, except
a. Personal property
b. Movable property
c. Intangible property
d. Real or immovable property
48. It is a contract whereby the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them
to the payment of the interest, if owing, and thereafter to the principal of his credit.

a. pledge
b. Chattel Mortgage
c. Real Mortgage
d. Antichresis
49. The following are the important characteristics of contract of antichresis, except
a. Accessory- It cannot exist without the principal obligation or contract of loan
b. Indivisible- it creates a lien on the whole or all of the properties mortgaged, which lien continues until the obligation is secures has been
fully paid
c. inseparable- it subjects the property upon which it is imposed, whoever the possessor may be , to fulfillment of the obligation for whose
security it was constituted.
d. Real contract- It is perfected by the delivery of the thing mortgaged.
50. In contract of antichresis, what shall be the basis of measurement of the fruits in its application to the interest and principal of the loan?
a. The actual market value of the fruits at the time of the application.
b. The actual market value of the fruits at the time of harvest.
c. The actual market value of the fruits at the time of sale of fruits.
d. The actual market value of the fruits at the time of perfection of the contract of antichresis.

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