RFBT03-08 - Law On Pledge, Mortgage and Antichresis - For Discussion

No. 125 Brgy.
San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : www.icarecpareview@gmail.com
Regulatory Framework for Business Transactions
Law on Pledge, Mortgage and Antichresis
1) Which of the following contracts is not an accessory contract?

a. Contract of loan
b. Contract of pledge
c. Contract of mortgage
d. Contract of antichresis
2) Which of the following obligations may not be secured by the accessory contracts of pledge,
mortgage and antichresis?
a. Unenforceable obligation
b. Natural obligation
c. Void obligation
d. All of the above
3) In order for the contract of pledge or mortgage to be valid, what is the specific moment is the
pledgor or mortgage required to be the absolute owner of the thing pledged or mortgaged?
a. At the time the secured contract of loan is perfected
b. At the time the contract of pledge or mortgage is constituted
c. At the time of the foreclosure of the pledged or mortgaged property
d. At the time of debtor’s default in the payment of secured loan
4) D borrowed P1,000,000 cash from C. In order to secure the said loan, M mortgaged the land of
his ailing father. Which of the following statements is correct?
a. The contract of loan is void because M is not the owner of the mortgaged land.
b. The contact of mortgage is void because M is not the borrower of the secured loan.
c. The contract of loan is valid.
d. The contract of mortgage is valid because a third person may mortgage his own property
to secure the loan of another person.
5) D borrowed P100,000 cash from C. In order to secure the said loan, D mortgaged his specific car
to C. The deed of loan with mortgage provides that in case of D’s default in the payment of the
secured loan, C will become the automatic owner of the mortgaged car in full satisfaction of the
loan. Which of the following statements is correct?
a. The contract of loan is void.
b. The contract of mortgage is void.
c. C becomes the owner of the mortgaged car upon D’s default of the loan.
d. D remains to be liable to C for the loan in case he defaulted in the payment of the
secured loan.
6) D borrowed P10,000 cash from C. In order to secure the said loan, D pledged and delivered his
specific laptop to C. The deed of loan with pledge provides that in case of D’s default in the
payment of the secured loan, D has the option to dacion en pago the pledged laptop to C in full
satisfaction of the loan. At the maturity date of the loan, D defaulted in payment of the loan and
he used the pledged laptop to settle the obligation. Which of the following statements is correct?
a. The contract of loan is not extinguished by dacion en pago.
b. The stipulation in the deed of loan with pledge regarding dacion en pago is void because
it is circumvention of prohibition against pactum commissorium.
c. C becomes the owner of the pledged laptop upon D’s default of the loan.
d. C becomes the owner of the pledged laptop upon D’s exercise of dacion en pago.
7) What is the nature of contracts of pledge, mortgate or antichresis?

a. They are divisible contracts whether the secured loan is joint or solidary.
b. They are indivisible contracts whether the secured loan is joint or solidary.
c. They are divisible contracts if the secured loan is joint.
d. They are indivisible contracts if the secured loan is solidary.
1|P a g e RLACO/DSALES/NVALDERRAM A
No. 125 Brgy. San Sebastian
Mobile : 0927 283 8234
Telephone : (043) 723 8412
8) A and B wrote a promissory note which states “We promise to pay P20,000 to C.” In order to
secure the loan, A pledged his specific ring while B pledged his specific watch. A and B died. D is
the sole heir of A while E is the sole heir of B. C also died leaving F and G as his heirs. F obtained
possession of the pledged ring while G obtained possession of the pledged watch. At the maturity
date of the secured loan, D paid his predecessor’s obligation of P10,000 to F. Which of the
following statements is incorrect?
a. D may demand from F the return of the watch.
b. F may return the watch to D.
c. Both a and b
d. Neither a nor b
9) A and B wrote a promissory note which states “We promise to pay P20,000 to C.” In order to
secure their respective obligations to C, A pledged his specific laptop while B pledged his specific
cellphone. At the maturity date of the loan, B paid his obligation of P10,000 to C. Which of the
following statements is correct?
a. A may demand the return of his specific laptop from C.
b. B may demand the return of his specific cellphone from C.
c. Both A and B may demand the return of the pledged items from C.
d. Neither A nor B may demand the return of the pledged items from C.
10) It is a contract by virtue 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 fulfilment of
a principal obligation with the understanding that when the obligation is fulfilled, the thing
delivered shall be returned with all its fruits and accessions.
a. Contract of pledge
b. Contract of chattel mortgage
c. Contract of real estate mortgage
11) Which of the following is not a characteristic of a contract of pledge?

a. Accessory contract
b. Indivisible contract
c. Consensual contract
d. Nominate contract
12) Which of the following is not allowed to become the subject matter of contract of pledge?
a. Personal property
b. Incorporeal right
c. Movable property
d. Real property
13) What is the formality of contract of pledge for its validity?

a. It must be in a public instrument.
b. It must be in writing.
c. It must be registered in the Registry of Deeds.
d. None of the above.
14) What is the purpose of the execution of notarized deed of pledged indicating the description of
the thing pledged and the date of pledge?
a. For validity of contract of pledge
b. For enforceability of contract of pledge
c. To bind third persons
d. To make contract of pledge valid and binding
15) How is a contract to constitute a pledge perfected?

a. By mere consent
b. By delivery of the thing pledged
c. By notarization of the deed
d. By operation of law
Mobile : 0927 283 8234
Telephone : (043) 723 8412
16) Which of the following statements about the right of a pledgor is incorrect?
a. He can sell the thing pledged despite the absence of consent of the pledgee.
b. He can ask that the thing pledged be judicially or extra-judicially deposited if it is used
without authority or for purposes other than for its preservation.
c. He can require that the thing be deposited with a third person if it is in danger of being
lost or impaired through the negligence or wilful act of the pledgee.
d. He can demand the return of the thing pledged, upon offering another thing in pledge,
provided the latter is of the same kind and quality, if there are reasonable grounds to
fear the destruction or impairment of the thing pledged without the fault of the pledgee.
17) D borrowed P10,000 cash from C. In order to secure the said loan, P pledged and delivered his
specific dog named Husky to C. During the pendency of the contracts of loan and pledge, Husky
gave birth to Huskar. Who owns Huskar?
a. D
b. C
c. P
d. None of the above
18) Using the same data in preceding number, which is not the obligation of P?
a. To pay the loan of P10,000 plus its interest.
b. To pay damages that C may suffer by reason of the flaws of Husky, if P was aware of
such flaws but did not advise the C of the same.
c. To pay for the expenses which are necessary for the preservation of the thing Husky and
Huskar.
19) Which of the following statements about the rights of the creditor-pledgee is incorrect?
a. To use the thing pledged only if (1) he is authorized to do so, or (2) when its use is
necessary of the preservation of the thing
b. To cause the sale of the thing pledged at a public sale, if there is a danger of destruction,
impairment or diminution of value of the thing pledged without his fault provided the
pledgee has advised the pledgor, without delay, of any danger to 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 appropriate the thing pledged in case the thing pledged is not sold in the first public
auction
20) In case there are two or more things pledged, who has the right to choose the thing to be sold in
public auction in case of default in the payment of loan?
a. Generally pledgee unless granted to pledgor
b. Generally pledgor unless granted to pledgee
c. Generally principal debtor unless granted to creditor
d. Always pledgor
21) Which of the following statements about the obligations of a creditor-pledgee is incorrect?
a. To be liable for the loss or deterioration of the thing pledged unless it is due to a
fortuitous event
b. To be responsible for the acts of his agents or employees with respect to the thing
pledged
c. To retain the excess after paying his claim from what he has collected on a credit that
was pledged and which has become due before it is redeemed
d. To take care of the thing pledged with the diligence of a good father of a family
22) If the pledged property is an incorporeal right, what is the coverage of the contract of pledge in
the absence of contrary agreement?
a. Incorporeal right only
b. Interests or earnings of incorporeal right only
c. Both a and b
d. Neither a nor b
Mobile : 0927 283 8234
Telephone : (043) 723 8412
23) In case of foreclosure of the thing pledged, where shall the sale be held?
a. Public sale only
b. Private sale if stipulated
c. Either public or private sale
d. Public sale if stipulated
24) D borrowed P4,000 cash from C evidenced by a promissory note. In order to secure the said
loan, P pledged and delivered his specific tablet to C. At the maturity of the loan, C voluntarily
returned the promissory note evidencing the loan to D. Which contract is extinguished by
remission?
a. Contract of loan
c. Both a and b
d. Neither a nor b
25) Using the same data in preceding number but assuming instead of the return of promissory note,
C voluntarily returned the specific tablet to P. Which contract is extinguished by remission?
a. Contract of loan
c. Both a and b
d. Neither a nor b
26) Which of the following instances will extinguish both the contract of loan and contract of pledge?
a. Automatic appropriation by the pledgee of the thing pledged in case of default by the
debtor in the payment of the secured loan
b. Renunciation in writing by the pledgee of the pledge
c. Voluntary return by the pledgee of the thing pledged to the pledgor
d. Sale of the thing pledged in public auction at net proceeds lower than the amount of the
secured loan
loan, P pledged and delivered his specific tablet to C. At the maturity of the loan, D defaulted.
This prompted C to sell the pledged tablet in public auction at net proceeds of P5,000. Who shall
be entitled to the excess of P1,000?
a. Generally D unless granted to C.
b. Generally P unless granted to C.
c. Generally C unless granted to P.
d. Always P.
28) Using the same data in preceding number but assuming the net proceeds is P3,500, from whom
may C recover the deficiency of P500?
a. From D only
b. From P only
c. Both from D and P
d. Neither from D nor P
29) D brought his specific cellphone for repair services to C for a fee of P1,000. After the rendition of
repair services, D failed to pay the repair fee despite repeated demands from C. This prompted C
to sell the said specific cellphone in public auction which resulted to net proceeds of P1,500. Who
shall be entitled to the excess of P500?
a. D
b. C
c. Both D and C
d. Neither D nor C
30) Using the same data in preceding number but assuming the net proceeds is P900, which is true?
a. C may recover the deficiency of P100 from D despite the absence of agreement.
b. C can never recover the deficiency of P100 from D.
c. C may recover the deficiency of P100 from D if there is an agreement for recovery of
deficiency.
d. C cannot recover the deficiency unless there is contrary agreement.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
31) Which of the following stipulations is valid in a contract of pledge?

a. A stipulation which provides that the pledge is not extinguished by the return of the thing
pledged.
b. A stipulation allowing the automatic appropriation by the pledgee of the thing pledged in
case of default of the debtor.
c. A stipulation for the recovery of deficiency in case the proceeds from the sale of the
thing pledged is less than the amount of the obligation.
d. A stipulation allowing the pledgee to appropriate the thing pledged in case the thing
pledged is not sold in at least two public auctions.
32) It is a contract whereby the debtor or third person secures to the creditor the fulfilment of a
principal obligation, specially subjecting to such security immovable property or real rights over
immovable property to foreclosure in case the principal obligation is not complied with at the
time stipulated.
33) Which of the following is not a characteristic of a contract of real estate mortgage?
a. Inseparable contract
b. Indivisible contract
c. Solemn contract
d. Accessory contract
34) It is a type of mortgage which although lacks certain formality, form or words or other requisites
provided by statute, but the facts show the intention of the parties to charge the real property as
a security for a debt and contains nothing contrary to law.
a. Conventional mortgage
b. Legal mortgage
c. Equitable mortgage
35) Which of the following is not allowed to become the subject matter of contract of real estate
mortgage?
a. Building
b. Just compensation of expropriated land
c. Shares of stocks of real estate company
d. Condominium unit
36) How is a contract of real estate mortgage perfected?

a. By mere consent
b. By delivery of certificate of title to mortgagor
c. By operation of law
d. By registration of deed of mortgage in registry of deeds
37) What is the operative act that will bind third parties and the whole world to the contract of real
estate mortgage?
a. Notarization of deed of mortgage
b. Registration of notarized deed of mortgage to registry of deeds
c. Execution of deed of mortgage
d. Consensual agreement of mortgage
38) It refers to the remedy available to the mortgagee by which he subjects the property mortgaged
to sale for the satisfaction of the obligation secured when the principal obligation is not paid
when due or when there is any violation of any condition, stipulation or warranty by the
mortgagor.
a. Foreclosure
b. Execution
c. Levy
d. Attachment
Mobile : 0927 283 8234
Telephone : (043) 723 8412
39) It refers to the right of the mortgagor to pay the defaulted secured loan in order to prevent the
foreclosure or public sale of the mortgaged property.
a. Equity of redemption
b. Right of redemption
c. Equity of preemption
d. Right of preemption
40) It refers to the right of the mortgagor to repurchase the foreclosed property from the highest
bidder who prevailed in the auction.
c. Equity of preemption
d. Right of preemption
41) It is a type of foreclosure made through the filling of a petition in court under Rule 68 of Rules of
Court and availed of when the deed of real estate mortgage does not contain a special power of
attorney (SPA) authorizing the mortgagee-creditor to foreclosure the mortgage extrajudicially.
a. Judicial foreclosure
b. Extrajudicial foreclosure
c. Legal foreclosure
d. Contractual foreclosure
42) Except in case of foreclosure by Banks under General Banking Law, what right is available to the
mortgagor in judicial foreclosure?
c. Both a and b
d. Neither a nor b
43) It is a type of foreclosure made in compliance with Act No. 3135 (Real Estate Mortgage Law) and
available when there is a stipulation in the mortgage contract that the mortgage may be
foreclosed extrajudicially or when such foreclosure sale is made under a special power of
attorney inserted in the contract of mortgage.
a. Judicial foreclosure
b. Extrajudicial foreclosure
c. Legal foreclosure
d. Contractual foreclosure
44) As a general rule, what is the period provided by Real Estate Mortgage Law for the mortgagor to
repurchase the property sold by virtue of extrajudicial foreclosure from the highest bidder?
a. Within 12 months from the foreclosure sale
b. Within 3 months from the foreclosure sale
c. Within 6 months from the foreclosure sale
d. Within 1 month from the foreclosure sale
45) As an exception to the general rule, what is the period provided by General Banking Law for a
juridical mortgagor to repurchase the property sold by virtue of extrajudicial foreclosure made by
a mortgagee-bank from the highest bidder?
a. Within 12 months from the foreclosure sale
b. Within 3 months from the foreclosure sale
c. Within 6 months from the foreclosure sale
d. Within 1 month from the foreclosure sale
loan, M mortgaged his land to C. At the maturity of the loan, D defaulted. This prompted C to sell
the mortgaged land in public auction at net proceeds of P500,000. Who shall be entitled to the
excess of P100,000?
b. Generally M unless granted to C.
c. Generally C unless granted to M.
d. Always C.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
47) Using the same data in preceding number but assuming the net proceeds is P350,000, which is
correct?
a. C may recover the deficiency of P50,000 from M.
b. C can never recover the deficiency of P50,000 from D.
c. C may only recover the deficiency from D is stipulated.
d. C may recover the deficiency from D unless there is an agreement to the contrary.
48) Which of the following stipulations is valid in a contract of real estate mortgage?
a. A stipulation which provides for tipo or upset price in the foreclosure sale of mortgaged
property.
b. A stipulation allowing the automatic appropriation by the mortgagee of the thing
mortgaged in case of default of the debtor.
c. A stipulation prohibiting the mortgagor from disposing or selling his property.
d. A stipulation prohibiting second mortgage on a real property registered under Torrens
System or with Certificate of Title.
49) It is a conditional sale of personal property as security for the 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 terms the mortgage and sale immediately become
void, and the mortgagee is thereby divested of his title.
50) Which of the following is not a characteristic of a contract of chattel mortgage?

b. Real contract
c. Indivisible contract
d. Inseparable contract
51) Which of the following is not allowed to become the subject matter of contract of chattel
mortgage?
a. Intangible asset
b. Condominium unit
c. Car
d. Shares of stocks
52) It is an affidavit attached to a deed of chattel mortgage which states that the parties swear that
the mortgage is made for the purpose of securing the obligations specified in the conditions
thereof, and for no other purposes, and that the same is a just and valid obligation and not one
entered into for purposes of fraud.
a. Affidavit of good faith
b. Affidavit of loss
c. Affidavit of good moral character
d. Affidavit of independence
53) How is a contract of chattel mortgage perfected?

a. By mere consent
b. By delivery of movable
c. By execution of solemnity required by law
54) As a general rule, where shall the deed of chattel mortgage be registered?
a. Domicile of mortgagor
b. Domicile of mortgagee
c. Both a and b
d. Neither a nor b
Mobile : 0927 283 8234
Telephone : (043) 723 8412
55) In case the collateral is a motor vehicle, where shall the deed of chattel mortgage be registered?
a. Chattel mortgage registry of the province where the mortgagor resides
b. Land Transportation Office where the car is registered
c. Both a and b
d. Either a or b
56) In case the collateral is shares of stocks of corporation, where shall the deed of chattel mortgage
be registered?
a. Chattel mortgage registry of the province where the mortgagor-stockholder resides
b. Chattel mortgage registry of the province where the principal office of corporation is
located
c. Both a and b
d. Either a or b
loan, M mortgaged his car to C. At the maturity of the loan, D defaulted. This prompted C to sell
the mortgaged car in public auction at net proceeds of P3,000. Who shall be entitled to the
excess of P100,000?
b. Generally M unless granted to C.
c. Generally C unless granted to M.
d. Always C.
58) Using the same data in preceding number but assuming the net proceeds is P150,000, which is
correct?
a. C may recover the deficiency of P50,000 from M.
b. C can never recover the deficiency of P50,000 from D.
c. C may only recover the deficiency from D is stipulated.
d. C may recover the deficiency from D unless there is an agreement to the contrary.
59) What is the grace period provided by Chattel Mortgage Law to the mortgagor to pay his
defaulted loan in order to prevent the foreclosure of the chattel mortgage on the movable?
a. 30 days from debtor’s default
b. 60 days from debtor’s default
c. 90 days from debtor’s default
d. 120 days from debtor’s default
60) In which type of accessory contract is private sale allowed for foreclosure?
b. Contract of mortgage
c. Both a and b
d. Neither a nor b
61) In which type of accessory contract may right redemption be exercised?

b. Contract of real estate mortgage
c. Contract of chattel mortgage
62) In which type of accessory is securing of future obligations not allowed?

b. Contract of real estate mortgage
c. Contract of chattel mortgage
63) 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.
Mobile : 0927 283 8234
Telephone : (043) 723 8412
64) Which of the following is allowed to become the subject matter of contract of antichresis?
a. Laptop
b. Agricultural land
c. Car
d. Shares of stocks
65) Which is not a characteristic of contract of antichresis?

b. Consensual contract
c. Indivisible contract
d. Inseparable contract
66) How is a contract of antichresis perfected?

a. By mere consent
b. By delivery of movable
c. By execution of solemnity required by law
67) What is the basis for application of the fruits to the interests and principal in the contract of
antichresis?
a. The actual market value of the fruits at the time of application to interest and then to
principal
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 maturity value of loan
d. The actual market value of the fruits at the time of perfection of loan
68) Who shall pay the real property taxes and expenses necessary for the repair and preservation of
the real property used as collateral in a contract of antichresis?
a. Generally antichretic creditor unless transferred to antichretic debtor
b. Generally antichretic debtor unless transferred to antichretic creditor
c. Always antichretic creditor
d. Always antichretic debtor
69) 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 not binding because the subject matter of real
estate mortgage should be an immovable property.
b. The contract of real estate mortgage is binding as to the contracting parties on the basis
of doctrine of estoppel 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 estate mortgage contract.
70) What is the status of contract of chattel mortgage if the property covered as collateral is a real
property instead of personal property?
a. The contract of chattel mortgage is not binding because the subject matter of chattel
mortgage should be a movable property.
b. The contract of chattel is binding as to the contracting parties on the basis of doctrine of
estoppel but the foreclosure shall be done under the procedures of real estate mortgage
law.
c. The contract of chattel mortgage will be valid to both contracting parties and even to
third persons.
d. Third persons who are not directly affected by the chattel mortgage may ask for the
declaration of nullity of the chattel mortgage contract.
“For the Glory of God”
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No. 125 Brgy.

Regulatory Framework for Business Transactions

Law on Pledge, Mortgage and Antichresis

1) Which of the following contracts is not an accessory contract?

7) What is the nature of contracts of pledge, mortgate or antichresis?

11) Which of the following is not a characteristic of a contract of pledge?

13) What is the formality of contract of pledge for its validity?

15) How is a contract to constitute a pledge perfected?

31) Which of the following stipulations is valid in a contract of pledge?

36) How is a contract of real estate mortgage perfected?

50) Which of the following is not a characteristic of a contract of chattel mortgage?

53) How is a contract of chattel mortgage perfected?

61) In which type of accessory contract may right redemption be exercised?

62) In which type of accessory is securing of future obligations not allowed?

65) Which is not a characteristic of contract of antichresis?

66) How is a contract of antichresis perfected?

“For the Glory of God”

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