BLT REV MIDTERM EXAM

MULTIPLE CHOICE

1. An act of liberality whereby a creditor condones the obligation of the debtor:

a. Confusion
b .Remission
c. Compensation
d. Novation
ANS: B PTS: 1

2. A, B, C, and D, owes E, F, G and H P40,000. How much E can collect from A if there is no
agreement if their obligation is joint or solidary?
a. P2,500
b. P40,000
c. P10,000
d. P5,000
ANS: A PTS: 1

3. In the preceding number, if A, B, C and D are joint debtors while E, F, G and H are solidary
creditors, how much can E collect from A?
a. P2,500
b P40,000
c. P10,000
d. P5,000
ANS: C PTS: 1

4. The principle by which contracting parties may stipulate any legal or lawful conditions:
a. Autonomy of contracts
b. Relativity of Contracts
c. Good Faith d
d. Freedom to stipulate
ANS: A PTS: 1

5. Here, defense of a good father of a family is a proper defense:

a. Culpa Contractual
b Culpa aquiline delicto
c. Culpa Aquiliana
d. Culpa Criminal
ANS: C PTS: 1

6. 1st Statement: When a fortuitous event concurs with a person’s negligence resulting to a loss, he is
still exempt from liability.
2nd Statement: The creditor has a right to the fruits of the thing from the time ownership is transferred.
a. Both statements are correct.
b. Only the first is correct.
c. Both statements are false.
d. Only the second is correct.
ANS: C PTS: 1

7. A obliged himself to deliver to his dog, his cow, his carabao, his elephant or his crocodile. The first
two were lost due to fortuitous event and the last three lost due to A’s fault. What is A’s obligation?
a. Creditor, B may convert to cash any of them plus damages
b. Debtor A may convert to cash the value of the last one lost plus damages
c. A may rescind the contract plus damages
d. Creditor, B may convert to cash any of the last three plus damages
ANS: B PTS: 1

8. A obliged himself to deliver to B his cellphone or as a substitute he may deliver his cute kitten. After
substitution was made, the former was lost due to A’s fault
a. A is liable and must pay damages
b. A will simply deliver his cute kitten plus damages for the loss of the cellphone
c. The loss has no effect to the obligation, obligation to deliver the latter will subsist
d. Obligation was extinguished
ANS: C PTS: 1
9. A and B solidarily owe C P50,000; they issued a promissory note in favor of C. C endorsed it to D,
D endorsed it to E then endorsed it back to A who is also E’s creditor in the amount of P50,000.
a. The obligation is partially extinguished by merger
b. The obligation is extinguished and A cannot recover any amount from B
c. The obligation is extinguished but A can recover the share of B which is P25,000
d. The obligation is partially extinguished by compensation
ANS: C PTS: 1

10. Rose obliged herself to give Jack 1 dozen of eggs on January 15, 2017. When the date arrived,
Rose failed to deliver despite repeated demands from Jack. Jack’s remedy is:
a. Compel Rose to deliver eggs plus damages
b. Compel Rose to pay the amount of the eggs
c. Rescind the contract
d. Ask a 3rd person to deliver the eggs to him but chargeable to Rose.
ANS: D PTS: 1

11. Mary obliged herself to give to Crisse her BMW car on October 10, 2016 but she failed to deliver
on that date. On the following day, a lightning completely destroyed the car.
a. Mary is still liable for she is in default already
b. Mary is no longer liable there being no demand , there is no delay and the thing is lost due to
fortuitous event
c. Crisse can demand for a substitute
d. Mary is still liable even if she is in default
ANS: B PTS: 1

12. One is an incorrect distinction between solidarity and indivisibility.

a. Solidarity refers to the legal tie whereas indivisibility refers to prestation
b. Plurality of subject is indispensable in solidarity unlike in indivisibility
c. In case of breach, solidarity character of obligation remains, but the indivisible character of the
obligation is terminated
d. Solidarity refers to the parties of the obligation and the prestation whereas indivisibility
refers to the vinculum juris.
ANS: D PTS: 1

13. I will pay you P10,000 if I decide to go to USA tonight is what kind of condition
a. Casual
b Potestative resolutory
c. Potestative suspensive
d. Mixed
ANS: C PTS: 1

14. Here, consignation alone is enough to produce payment except:

a. If the creditor is unknown
b. Creditor is incapacitated
c. Creditor is reluctant to issue receipt
d. Two or more persons claim to be creditors
ANS: C PTS: 1

15. Which of the following is correct?

a. An action for rescission of contract prescribes in five (5) years counted from the execution of the
contract
b. An action to declare contract void is not subject to prescription
c. An action for annulment of contract is imprescriptible
d. An action to enforce judicially a natural obligation prescribes in 4 years
ANS: B PTS: 1

16. The following contracts should observe Statute of Frauds, except:

a. Lease of real property longer than one year
b. Representation as to the credit of a third person
c. Lease of personal property longer than one year
d. Guaranty
ANS: C PTS: 1
17. S makes an offer to B on January 1, 2016. B makes known his acceptance in a letter sent on
January 2, and received by S on January 10. Meantime, on January 5, S becomes insane.
a. The contract is unenforceable
b. The contract is not binding because there is no meeting of minds
c. There is already a meeting of minds, the contract is perfected
d. The contract is voidable because one party is insane.
ANS: B PTS: 1

18. Which of the following can be considered as feature of a void contract?

a. Subject to ratification
b. They exist
c. Action or defense for nullity is subject to prescription
d. Defense cannot be waived.
ANS: D PTS: 1

19. In three of the following defective contracts, ratification cleanses the defects. Which is the
exception?
a. Contracts entered into by a person who has been given no authority
b. Sale of a piece of land thru an agent the authority is oral
c. Sale of immovable property or interest orally entered into
d. Both parties are incapable of giving consent
ANS: B PTS: 1

20. S, a minor, owns a specific property valued P 50,000. B, capacitated, by means of fraud induced S
to sell his property to him (B) for P 10,000 which S did so. The contract is in writing.
a. The contract is void
b. The contract is rescissible because the ward suffered lesion by more than ¼ of the value
c. The contract remains unenforeceable because it falls under the Statute of Frauds
d. The contract is binding from the start
ANS: D PTS: 1

21. Type of defective contract that creates no rights and impose no obligation, but are susceptible of
ratification.
a. Void contracts
b. Rescissible contracts
c. Unenforceable contracts
d. Voidable contracts
ANS: C PTS: 1

22. The guardian of an insane person sells a house and lot belonging to the latter valued at P100,000
to B, buyer for P74,000. The contract is:
a. Rescissible
b. Voidable
c. Unenforceable
d. Valid
ANS: A PTS: 1

23. Example No. 1: W 16 years old sold his house valued at P1M for P50,000 or a lesion by more
than one-fourth of the value of the said house.
Example No. 2: G, guardian of W, sold W’s house valued at P50,000 for P37,500 or a lesion of one-
fourth of the value.
a. Voidable; Rescissible
b. Rescissible; voidable
c. No. 1 is rescissible; while No.2 is unenforceable
d. Voidable; valid perfectly
ANS: D PTS: 1

24. Which of the following contracts cannot be ratified?

a. Those whose cause or object did not exist at the time of the transaction
b. Unauthorized contracts
c. Those where both parties are incapable of giving consent
d. Those that fail to comply with the Statute of Fraud
ANS: A PTS: 1
25. On October 4, 2016, A is indebted to B for P50,000 for a 20-day period. A proposed to B that X will
pay A’s debt and that A will be free from all liabilities. B and X agree to the proposal. On October 25,
2016, X became insolvent. At the time of delegation, X was already insolvent but this was not known
to A. The insolvency is not public knowledge. So B sues A on the ground that it was A who made then
proposal that A guaranteed X’s solvency. Decide.
a. A is liable because he is presumed to have guaranteed X’s solvency.
b. A is not liable because he does not know the insolvency of X at the time of delegation and
neither was the insolvency of public knowledge.
c. A is liable because he did not exercise due diligence in determining the insolvency of X
d. A is liable because X agree to the proposal to make himself solidarity liable for the obligation.
ANS: B PTS: 1

26. When the thing deteriorates pending the fulfillment of the suspensive condition without the fault of
the debtor, the impairment is:
a. To borne by the party who caused the deterioration
b. To be borne partly by the debtor and partly by the creditor
c. To be borne by the debtor
d. To be borne by creditor
ANS: D PTS: 1

27. X enters into a contract with Y whereby X sold his land orally to Y. The land has been delivered
and the money has been paid. Decide.
a. The contract fully enforceable.
b. The contract is unenforeceable
c. The contract is not valid because the contract is not made in public instrument
d. The contract is not valid because it is not in writing as required by the Statute of Fraud
ANS: A PTS: 1

28. On September 1, 2016, A entered into a contract with B whereby A sells to B 5,000 sacks of sugar
to be delivered on the 15th and to be paid in full on the 30th. There was no agreement for rescission
based on prepayment. A did not deliver on the 15th but on the 30th, he was willing and offering to
deliver but B did not make payment on said date and so A did not like it and refused to make delivery.
Which is incorrect?
a. A cannot rescind the contract for nonpayment of the price
b. A cannot refuse to deliver the goods
c. B is not entitled to recover damages
d. A can rescind the contract for nonpayment of the price since B is at fault
ANS: D PTS: 1

29. A has a daughter, B; X has a son, Y. A, B, X and Y agree together that Y will marry B. The
agreement is oral. If B later on refuses to marry Y who spent for the necessary wedding preparations,
X and Y decided to bring an action against A and B, will the action prosper? Decide.
a. Between Y and B, the action will prosper because the agreement is made orally.
b. In case of A and X, the action will prosper because the agreement which was made orally in
enforceable as it is based in the consideration of marriage.
c. As to A and X, the action will not prosper because the agreement is not enforceable as it was
not they who mutually promised to marry each other.
d. The action of X and Y against A and B will prosper because the agreement is based on the
consideration of marriage other than mutual promise to marry.
ANS: C PTS: 1

30. D1, D2 and D3 borrowed from C P300,000 as a security, he mortgaged their undivided agricultural
land to C, Subsequently, D1 paid C P100,000. Is the mortgage on D1’s share of the land
extinguished?
a. No, because mortgages are considered indivisible, payment in part shall not extinguish the
obligation secured by the mortgage.
b. No. because the obligation is solidary, payment in part shall not extinguish the obligation secured by
the mortgage.
c. Yes, the obligation of the debtors is joint, D1 is answerable only for P100,000.
d. Yes, because the obligation of D1 on the debt is only P100,000.
ANS: A PTS: 1
31. B called up S by telephone, to sell his parcel of land. The land was purchased by X, but S did not
forward the money to B. Now B wants to recover the parcel of land.
a. B cannot recover because the sale is valid
b. B can recover because the sale between S and X is void, therefore there is no sale
c. B can recover only if B can return the money paid by X to S
d. Answer not given
ANS: B PTS: 1

32. D pledge his ring to C for P100,000. D failed to pay his obligation on time. C sold it at public
auction for P8,000.
a. C can recover die deficiency even without stipulation
b. C cannot recover the deficiency even there is a stipulation
c. C cannot recover the deficiency
d. C can recover the deficiency
ANS: B PTS: 1

33. Statement 1: If the agent is incapacitated, the contract between him and the third person is
binding against the principal, provided the principal is capacitated.
Statement 2: If the agent is prohibited from appointing a sub-agent absolutely all acts executed by
the latter is unenforceable, on the part of the principal.
a. Both are true
b. No.1 is true; No.2 is false
c. Both are false
d. No.1 is false; No. 2 is true
ANS: B PTS: 1

34. Which is not a characteristic of contract of sale?

a. Onerous
c. Consensual
b. Aleatory
d. Commutative
ANS: B PTS; 1

35. Special Power of Attorney is required in the following except

a. Novation
b. Lease of Real Property for one year.
c. Compromise
d. Reject or accept inheritance
ANS: B PTS: 1

36. Mr. Ong leased to Mr. Santos a 5 KVA generator for two years at a lease rental fee of P2,000 per
month and signed an option in favor of Mr. Santos to buy the generator at the end of the term of the
lease at P60,000. All rental fees are paid to be considered as partial payment of the sale. After 12
months, Mr. Santos was able to pay the rental fees for nine months and was in arrear for the three
months rental fees. Mr. Ong terminated the lease contract and repossessed the generator. The
consequence of the transaction is:
a. Mr. Ong can collect the rental fees for the three months which are in arrears.
b. Mr. Ong can collect the rental fees for the unexpired 12 months of the lease contract.
c. When Mr. Ong took possession of the generator, he has no further action against Mr. Santos.
d. Mr. Ong, in terminating the lease and repossessing the generator, is obliged to refund the nine
months rental fees paid by Mr. Santos.
ANS: C PTS: 1

37. When the period is “ on or before date”, the debtor has the benefit of the period. This benefit is lost
and the obligation becomes demandable when:
a. The debtor attempts to abscond.
b. After contracting the obligation, the creditor suspects the debtor becoming insolvent.
c. The guarantee given by the debtor is not acceptable to the creditor
d. Demand by the creditor could be useless.
ANS: A PTS: 1

38.In the following cases, the sale should be considered an equitable mortgage, except:
a. If the vendee still keeps a substantial portion of the purchase price
b. When seller paid the capital gains tax on the property sold
c. When the price is unusually low
d. When seller keeps the possession of the property.
ANS: B PTS: 1
39. S sold his car to B payable in ten (10) equal monthly installments and with a mortgage constituted
on the same property (car). For B’s failure to pay a month’s installment, which statement is correct
a. S may foreclose the mortgage on B’s car but he no longer has the right to recover the balance
should it (the car) be sold for an amount lower than what he claims from B.
b. S may seek the cancellation of the sale made to B.
c. S may seek the cancellation of the same and later on foreclose the mortgage should he find it
impossible to collect from B.
d. S may seek fulfilment of the obligation of B to pay the amount due.
ANS: D PTS; 1

40. Which statement is correct about extinguishments of obligation?

a. Confusion or merger rights may occur in the person of a guarantor.
b. Agency wherein novation is effected must be in writing and thru a Special Power of
Attorney.
c. Prescription is a primary mode of extinguishing an obligation.
d. Condonation is generally gratuitous.
ANS: B PTS: 1

41. S sold to B a specific car for P20,000 payable in four equal instalments. S delivered the car to B
but required to mortgage it back to S to answer for the unpaid installments. B paid the 1st instalment,
but the last three he failed to pay. S foreclosed the mortgaged property and sold it at public auction for
P13,000.
a. S can recover from B the balance of P2,000.
b. S can recover from B & balance of P2,000 if there is stipulation to that effect.
c. S cannot recover the deficiency any more even if there is stipulation to that effect.
d. None of the above.
ANS: C PTS: 1

42. When it is stipulated that the repurchase of the property sold could be made at any time, the
repurchase shall be exercised
a. Within four years from the date of the contract
b. Within ten years from the date of the contract
c. After ten years from the date of the contract
d. None of them.
ANS: B PTS: 1

43. S sold to B a parcel of land for a lump sum of P50,000 the contract states that the area is 500
square meters. Subsequently, it was ascertained that the area included within the boundaries is really
550 square meters.
a. S to deliver 550 sq. meters and B to pay same amount.
b. S or B can rescind the We because there is no meeting of minds.
c. S is bound to deliver 500 square meters and B to pay P55,000.
d. S is bound to deliver 500 square meters and B to pay P50,000.
ANS: A PTS: 1

44. Statement No. 1: If the property is sold for nonpayment of taxes due and not made known to the
vendee before the sale, the vendor is still liable for warranty against hidden defects.
Statement No. 2: In the eviction, if seller is at fault, he must reimburse to the buyer the purchase price
of the thing sold.
a. Both are true
b. No. 1 is true; No. 2 is false
c. Both are false
d. No. 1 is false; No. 2 is true
ANS: C PTS: 1

45. A, B and C are co-owners of an undivided parcel of land. B sold his 1/3 interest to C
absolutely. Which is correct?
a. A may exercise his right of redemption on the interest sold by B to C.
b. A cannot exercise the right of redemption because the sale was made in favor of a
co-owner.
c. The sale made by B to C is void because it was not made in favor of a stranger.
d. A may redeem only ½ of the interest sold by B to C.

46. Which of the statements is not true?

a. In sale or return ownership is transferred to the buyer upon delivery
b. Warranty against hidden defects is an accidental element of a contract of sale
 c. In sale the obligation of the buyer is not only the payment of the price
d. In dacion en pago, an obligation is extinguished while in contract of sale, obligation
arise.

47. A land was 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 recorded it in the Registry of Property
d. Who have paid in good faith the purchase price in full

48. S sold car for P300,000 to B. Despite his knowledge of this defect, S obtained a waiver from B
of the latter’s right under the warranty against hidden defects. Subsequently, the car was
wrecked due to the recklessness of B who only the discovered the defects when the FMV of
the car was P250, 000. Choose the best answer.
a. The liability of S remains to be P300,000 because of breach of warranty against hidden
defect.
b. S is not liable anymore because the car got loss due to recklessness of B
c. The waiver is void because S knew the defect
d. S is still liable to reimburse B P50,000 plus damages and he must pay damages.

49. Here the owner of the property became the lessee thereof so no physical delivery is still
required.
a. Traditio longa manu c. Traditio constitutum possessorium
b. Traditio brevi manu d. Traditio clarium

50. In redemption, which will not be paid by the buyer- a retro?

a. Price of the thing sold.
b. Useful expenses.
c. Necessary expenses.
d. Expenses of the sale if paid by the seller.

51. D1, D2 and D3 borrowed from C P300,000 as a security, he mortgaged their undivided
agricultural land to C, Subsequently, D1 paid C P100,000. Is the mortgage on D1’s share of
the land extinguished?
a. Yes, because the obligation of D1 on the debt is only P100,000
b. Yes, the obligation of the debtors is joint, D1 is answerable only for P100,000
c. No, because the obligation is solidary, payment in part shall not extinguish the
obligation secured by the mortgage.
d. No, because mortgages are considered indivisible, payment in part shall not
extinguish the obligation secured by the mortgage.

52. B telephoned S, his sister, to sell his parcel of land. The land was purchased by X, but S did
not forward the money to B. Now wants to recover the parcel of land.
a. B cannot recover because the sale is valid
b. B can recover because the sale between S and X is void, therefore there is no
sale
c. B can recover only if B can return the money paid by X to S
d. Answer not given

53. If P leads X to believe that A is his (P’s) agent, when as a matter of fact such is not true, and A
acts on such misrepresentation, there is
a. An implied agency
b. An agency by estoppel
c. An agency by necessity
d. An express agency by words spoken

54. Which of the following statements is true and correct:

a. Pledge and mortgage are accessory contracts because they can not exist by
themselves
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 appropriate the thing pledge 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 C offered to buy the land from A.
55. An implied agency may be created by
a. Ratification
b. Lack of action by the principal
c. Silence of the principal
d. All of them

56. D pledged his ring to C for P10,000. D failed to pay his obligation on time. C sold it/at public
auction for P8,000.
a. C can recover die deficiency even without stipulation
b. C cannot recover the deficiency even if there is stipulation
c. C cannot recover the deficiency
d. C can recover the deficiency

57. Without P’s authority, S sold P’s car to B in P’s behalf

a. The transaction entered by S is unauthorized therefore unenforceable
b. The right of B is only against S as a rule
c. The contract can be ratified, hence it is considered as a validable contract
d. All of the above

58. P wrote letter authorizing A to sell his parcel of land situated in Bulacan. The land was
purchased by X, but the agent (A) did not give the money to P the sale of A to X is;
a. Void because the authority of A is not in a public instrument
b. Unenforceable because the authority of A is in a public instrument
c. Inexistent became the authority of A is in private writing
d. Valid and enforceable

59. P appointed A as his agent to borrow P10,000 from C. A borrowed P10,000 acted in his name
but gave the money to his principal, who accepted them. Upon maturity, who is liable to C?
a. A only
b. P only
c. Both A and P
d. Contract is void

60. A appoints B as his agent to sell his land , which of the following is valid?
a. The authority of B is in writing but B mortgage it also in writing
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 conduct of
sale
d. The authority of B is in writing but the sale of the land in writing was made beyond the
period expressly set forth by A.

61 P appointed A as his agent with general powers on January 1. The next day, X transacted
business with A. On January 5, P revoked the agency and published it in a newspaper of
general circulation. However, X did not read the newspaper publication. Mix 5 days, (January
10) X consummated another transaction with A. Is the additional of A binding against P.
a. Yes, because X is in good faith
b. No, because the agency is considered revoked and its publication is a sufficient
warning
c. No, because the power is general, there must also be a special power
d. Yes, because there was no special notice send to X.

62. Today, P appointed A1 as his agent covered by general power to lease his car to X for 6
months. The next day, P appointed A2 with special power to lease the same car to X for 5
months. On the third day, P directly transacted business with X leasing the car for 2 months.
What is the effect of agency between the parties?
a. The appointment of A1 is the one that is valid because it has got a prior date.
b. The appointment of A2 is the one that is valid because it is covered by a special power.
c. The agency of A1 and A2 are considered revoked because the principal directly
transacted with X.
d. None of the above.
63. P appointed A as his agent to sell his specific car in cash for P10, 000 with 10% commission. A
using persuasive skills A was able to sell it for P15, 000 on credit. After the sale but before the
payment of the buyer, choose the best action.
a. A must give P10, 000 only.
b. A must give P10, 000 minus the commission
c. A must give P15, 000 minus the commission
d. A must give P15, 000 and in turn is to give A P5, 000 as commission.

64. P the owner of a piece of residential land orally authorized A to sell the land for P500.00 with
5% commission. Today A sold the land to C. One day later P sold the same land to D.
Assuming that both buyers are in good faith, who among them is the lawful owner.
a. C, being the first buyer
b. C, because A was given authority by P.
c. D, because the sale made by A to C is void.
d. None of the above.

65. An agent without any express authority from the principal appointed a subagent to help him
carry out the agency
a. The substitution is void.
b. The substitution is valid but the agent is the only one liable for the acts of the subagent.
c. Both the agent and subagent are liable to the principal for the acts of the
subagent under the valid substitution.
d. The substitution is valid but the substitute is the only one liable for his own acts.
e. None of the above.

66. An agent with general powers of administration given to him by the principal in writing desirous
of improving the financial condition of his principal, sold two parcels of rice field, one for less
than the price appearing in the inventory prepared by the principal, and the other for double the
price that appeared in the said inventory.
a. The sale for double the price appearing in the inventory is binding upon the principal.
b. The two contracts cannot be enforced against the principal.
c. The sale for less than the price appearing in the inventory is binding upon the principal.
d. Both contracts are binding upon the principal.
e. None of the above.

67. A passenger bus while in motion collided with another bus. X, the conductor of the bus was bodily
injured. D, the driver, although not authorize, engaged the services of a physician in the name of
the company. In here, there is an
a. Implied agency b. Agency by estoppel c. Agency by necessity d. None of the above

68. Statement 1: The contract of pledge, gives a right to the creditor to retain the thing in his
possession or in that of a third person to whom it has been delivered, until the debt is paid.
Statement 2: A pledge shall not take effect against third persons if a description of the thing pledge
and the date of the pledge do not appear in a public instrument.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

69. Statement 1: If the agent dies, the heirs must notify the principal immediately, and must continue
the objective of the agency until it is accomplished or until the principal appoints a new agent.
Statement 2: SPA is required to represent the principal involving novations.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

70. Statement 1: If the agent is incapacitated, the contract between him and the third person is
binding against the principal, provided the principal is capacitated.
Statement 2: A broker and agent are the same.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

71. Statement 1: The agency shall remain in full force and effect even after the death of the principal,
if it has been constituted in the common interest of the latter and of the agent, or in the interest of a
third person who has accepted the stipulation in his favor.
Statement 2: If subsequent to the perfection of the pledge, the thing pledge is in the possession
of the pledgor or owner, there is a prima facie presumption that the same has been returned by
the pledgee, extinguishing the contract of pledge.
 a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

72. Statement 1: In contracts of pledge, the pledgee is allowed to use the thing pledged.
Statement 2: In case of pledge of animals, their offspring shall pertain to the pledgor of the animal
pledged and are no longer subject to the pledge, unless stipulated.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

73. Statement 1: In sale of the thing pledged by public auction, pledgee is not allowed to join the
bidding in the 1st auction.
Statement 2: In sale at public auction, the pledgor or owner may be bid and shall have a better
right if he should offer the same terms as the highest bidder.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

74. Statement 1: Should the commission agent receive, in addition to the ordinary commission,
another commission called guarantee commission, he shall bear the risk of collection and shall
pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser.
Statement 2: The responsibility of two or more agents, even though they have been appointed
simultaneously, is not solidary if solidarity has not been expressly stipulated. If solidarity has been
agreed upon, each of the agents is responsible for the non-fulfilment of the agency, and for the
fault or negligence of his fellow agents, except in the latter case when the fellow agents acted
upon beyond the scope of their authority.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

75. Statement 1: Every agent is bound to render an account of his transactions and to deliver to the
principal whatever he may have received by virtue of the agency, even though it may not be
owning to the principal. Every stipulation exempting the agent from the obligation to render an
account shall be void.
Statement 2: An agency couched in general term, comprises only acts of administration, even if
the principal should state that he withholds no power or that the agent may execute such acts as
he may consider appropriate, or even though the agency should authorize a general and
unlimited management.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

76. Statement 1: A stipulation in a contract of mortgage stipulating an upset price, at which the
property may be sold is void.
Statement 2: Antichreses is void if not in a public instrument..
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

77. Statement 1: A real mortgage may guarantee future obligation, while a chattel mortgage cannot
guarantee future obligation.
Statement 2: The mortgagee has the right to take possession of the chattel mortgaged upon
default of the mortgagor.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

78. Statement 1: In chattel mortgage, the mortgagor must execute an affidavit of good faith in order
that the mortgage shall be valid against third person.
Statement 2: An agency cannot be revoked if a bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already contracted, or if a partner is appointed manger of a
partnership in the contract of partnership and his removal from the management is unjustifiable.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

79. Statement 1: To lease real property to another person, the authority of the agent must be in a
special power of attorney, if the lease is for one year.
 Statement 2: When a sale of a piece of land is made through an agent, his authority must be in
writing otherwise, the sale is unenforceable.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

80. Statement 1: In agency, the agent represents an incapacitated person.

Statement 2: The agent if authorized to borrow money can be the lender, but generally he cannot
be the borrower if he is authorized to lend.
a. Both are true c. No.1 is true; No.2 is false
b. Both are false d. No.1 is false; No.2 is true

81. P appointed A orally as his agent to sell his car for P10, 000. A sold the car to X but he acted in
his (A’s) name. If upon the delivery the car has hidden defects, is P liable?
a. No, because the contract is unenforceable, it is orally entered into.
b. Yes, because the thing belongs to the principal and agent did not exceed his
authority.
c. No, because the agent acted in his name.
d. None of the above.

82. Agency is extinguished by any of the following causes, EXCEPT

a. By its revocation
b. By the withdrawal of the agent
c. By the death of the agent or of the principal
d. Insolvency of the agent or his heirs.

83. The principal is not liable for the expenses incurred by the agent.
a. If the agent acted in contravention of the principal instruction.
b. Expenses were due to the fault of the agent.
c. Agent incurred them knowing that an unfavourable result would ensue, and the
principal was not aware thereof.
d. All of the above.

84. A commission agent:

a. Has the option to act in his own name
b. Generally, cannot sell on credit
c. May be an agente del credere if he receives guaranty commission
d. All of the above

85. Bears risk of collecting from the buyer the price of the sale.
a. Commission agent
b. Old Debtor in delegacion
c. Guarantor
d. Agente del credere

86. In a contract of sale executed by S and B, it appears S sold his motor vehicle to B and
B bought it for P10,000. It turned out however, S has three motor vehicles. Gallant
valued P80,000: Hi- Ace van valued P70,000; and a Jeep valued P60,000. Which of the
following is correct?
a. The contract shall be reformed because there was mistake.
b. The parties can ask for interpretation because the word motor vehicle is ambiguous.
c. The parties can ask for annulment of the contract.
d. There is no contract.
87. Which of the following contracts is not rescissible?
a. Those which are entered into by guardians whenever the wards whom they represent
suffer a lesion of more than ¼ of the value of the object of the contract.
b. Those executed in representation of an absentee, if the latter suffer a lesion of more
than ¼ of the value of the object of the contract.
c. Those where one of the parties is incapable of giving consent to a contract.
d. Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them.
e. Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority

88. S sold his car to B payable in ten (10) equal monthly installments and with a mortgage
constituted on the same property (car). For B’s failure to pay a month’s installment, which
statement is correct?
a. S may foreclose the mortgage on B’s car but he no longer has the right to recover the
balance should it (the car) be sold for an amount lower than what he claims from B.
b. S may seek the cancellation of the sale made to B.
c. S may seek the cancellation of the same and later on foreclose the mortgage should
he find it impossible to collect from B.
d. S may seek fulfilment of the obligation of B to pay the amount due.
89. Which of the statements is not true?
a. In sale or return ownership is transferred to the buyer upon delivery
b. Warranty against hidden defects is an accidental element of a contract of sale
c. In sale the obligation of the buyer is not only the payment of the price
d. In dacion en pago, an obligation is extinguished while in contract of sale, obligation
arise.

90. A land was sold to different vendees, the ownership shall be transferred to the person
a. Who have first taken possession in good faith.
b. Who in good faith recorded it in the Registry of Property
c. Who presents the oldest title in good faith.
d. Who have paid in good faith the purchase price in full
1. On August 1, 2010, Samonte sent a letter to Benavidez. In the letter, Samonte
offered to sell his house and lot located at Green Valley Subdivision for
P1,200,000.00 cash and stated that the acceptance had to be received by Samonte
not later than August 15, 2010. Benavidez sent his acceptance on August 10,
2010, but due to delay in the mails, Samonte received the letter of acceptance on
August 18, 2010.
a. The contract between Samonte and Benavidez was perfected on August 10,
2010.
b. The contract between Samonte and Benavidez was perfected on August 15,
2010.
c. The contract between Samonte and Benavidez was perfected on August 18,
2010.
d. No contract was perfected between Samonte and Benavidez.
2. S sold his lot consisting of 1,000 square meters to B. However, the deed of sale
signed by the parties showed a total area of 1,200 square meters due to the
secretary’s mistake. What remedy is available to either party?
a. Annulment
b. Reformation
c. Rescission
d. Declaration of nullity of the contract.

3. D borrowed P50,000.00 from C. The debt, which is payable in one year, is secured
by a mortgage that D constituted with his lot. The mortgage is recorded in the
Registry of Property. C dies before the due date of the debt and was not able to
collect any amount of his loan receivable from D. He was survived by S, his only on
and heir. D, taking advantage of the situation, sold the lot to T who was not aware
of the mortgage constituted thereon.
a. The mortgage is not binding on T since he was not aware of it at the time he
bought the lot.
b. S, the son of C, has the right to collect the amount of the note from D, and
foreclose the mortgage if D cannot pay.
c. The mortgage is not binding on T since D was in bad faith when he sold the lot to
T.
d. The right to collect the loan was extinguished upon the death of C.
4. On March 25, 2010, Orlando and Timoteo entered into a written contract of lease
whereby Orlando as lessor leased the third floor of his building to Timoteo, lessee.
The contract provides, among other terms and conditions, the following: (a) The
lessee shall give a rental deposit of two months amounting to P40,000.00; and pay
an advance rental of one(1) month amounting to P20,000.00 upon the execution of
 the contract; (b) The lessor shall keep the leased premised in tenantable condition
throughout the period of the lease which is from April 1, 2010 to March 21, 2012; (c)
at the end of the leased period; the lessor shall return the rental deposit to the
lessee les any amount of damage that may be cause on the leased premises by the
lessee.
Timoteo pursuant to the contract, gave both the rental deposit and advance rental to Orlando
upon the execution of the contract.
The contract between Orlando and Timoteo is:
a. Bilateral, nominate, onerous and commutative.
b. Bilateral, innominate, onerous and aleatory.
c. Unilateral, nominate, gratuitous and commutative.
d. Unilateral, innominate, onerous and commutative.\

5. Casimiro filed against Delgado a complain which sought to collect Delgado’s debt
of P200,000.00 and attached Delgado’s lot at No.120 Lepanto Street, Sampaloc,
Manila. The court accordingly issued the writ of attatchment on the property against
Delgado. While the case was pending, Delgado sold his lot located at No. 95
Albano Street, Quezon City. Torres, another creditor of Delgado, now questions the
sale as fraudulent and seeks to rescind it.
a. Torres may not question the sale because it not he but Casimiro who obtained
the writ of attachment against Delgado.
b. Casimiro may not question the sale because it referred to a lot which was not the
object of attatchment
c. Either Torres or Casimiro may question the sale
d. Neither Casimiro nor Torres may question the sale
6. S placed an advertisement in the Manila Bulletin as follows. “INVITATION TO BID:
For sale, house and lot located at No 120 Roxas Boulevard, Manila.” Three persons
submitted their bids as follows: A, P2 million; B, P2.5 million; and C P3 million. After
studying the bids, S awarded the contract to B. C complained claiming that the
contract should have been awarded to him since he was the highest bidder.
a. The award of the contract to B is not valid because he was the only second
highest bidder.
b. The contract should have been awarded to C because S, as the advertiser, was
bound to accept the highest bidder.
c. S was not bound to accept the highest bidder because advertisements for
bidders are mere invitations to make proposals, unless the contrary
appears.
d. The contract should have been awarded to C because his bid was the most
advantageous to S.
7. P, the owner of a certain business, instructed A, his agent and manager of the
business to buy goods on credit from S. S issued a sales invoice where A
acknowledged the receipt of the goods by signing thereon. P called S by phone and
promised to S that he(P) would pay for the goods on due date. S was not paid on
due date. Accordingly, he sued P for the price of the goods. P raised the defense of
unenforceability under the Statute of Frauds claiming that a representation as to
credit must be in writing.
a. The promise is enforceable against P although it was not in writing.
b. The promise is unenforceable against P although it was not in writing.
c. The promise is enforceable against A because it was he who signed the invoice
d. The promise may be enforced both against P and A since they are the debtors in
the transaction.
8. B obtained delivery from S of a Nikkon camera and an unlicensed revolver which
he purchased from the latter at the price of P1500.00 and P5,000.00 respectively.
No written agreement was signed by the parties to keep the contract a secret.

a. The sale of the camera is unenforceable because it was not in writing, while that
of the revolver is void because the object is illegal.
b. The sale of the camera is valid and enforceable while that of the revolver is
void.
c. The sale of both the camera and the revolver is valid because the parties are
bound by their secret agreement.
d. The sale of both the camera and the revolver is void because the contract is
indivisible.
9. D obtained a loan of P1,000,000.00 from C. To secure the debt, D executed deed
of mortgage covering two of his lots, Lot A and Lot B, each of which is in the name
of D in the certificate of title. The mortgage of Lot A was recorded within one week
in the Office of the Register of Deeds, but that of Lot B could not be processed as
other documents were being required by the Register of Deeds. In the meantime, D
sold Lot A to X, and Lot B to Y. X knew nothing on the mortgage of lot A, but Y was
aware of the mortgage of Lot B.
a. Both X and Y are bound by the mortgage on the lot sold to each of them.
b. Both X and Y will not be bound. In the case of X, he knew nothing of the
mortgage. In the case of Y, the mortgage was not registered.
c. X is bound by the mortgage of Lot A. Y is not bound by the mortgage of Lot B.
d. X is not bound by the mortgage of Lot A. Y is bound by the mortgage of Lot B.
10. Sermonia Agri-Products, a supplier of “ZZ” fertilizer, offered in writing to sell to
Barbados Farms, 50 bags of the fertilizer at the price of P100.00 per bag. The offer
stated that the price would be good for one week during which Barbados Farms
may decide to accept the offer. Three days later and before Barbados could make
any acceptance, the general market price went up. Sermonia attempted to revoke
the offer by informing the Barbados, but Barbados claimed Sermonia could not do
so.
a. Sermonia may withdraw the offer by just informing Barbados since there
has not yet been any acceptance thereof.
b. Sermonia may not withdraw the offer since the one-week period within which
Barbados may decide had not yet been lapsed.
c. Sermonia may withdraw the offer only after the expiration of the one-week
period, unless Barbados in the meantime accepted the offer.
d. Sermonia may withdraw the offer because it would suffer a loss if the sale was
allowed to push through.