SALES MIDTERMS 2021

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Points:
8/-
1.The following are the obligations of the seller, EXCEPT:
To take care of the subject matter with the diligence of a good father of a family.

To transfer ownership and deliver the subject matter. 

To deliver the fruits and accessories.

To warrant the subject matter. 

All of the above. 

2.The following are NOT considered modes of delivery:

When the seller points to the buyer the location of the immovable subject matter and tells him
that he is deemed the owner thereof. 
When the tenant buys the apartment unit he is renting and the seller declares the tenant as the
owner. 
When the homeowner who is still occupying the house sells the house to the seller and he tells
the latter that he is deemed to be the owner of the house from now on. 
When the seller gives the Certificate of Shares of Stocks to the buyer. 

None of the above. 

3.In the execution of a public instrument, the subject matter is NOT deemed
delivered, except:
When the seller reserves the right to use and enjoy the property for a certain period.

When at the time of the execution of the instrument, the subject matter was in the possession
and control of a person other than the seller. 
In a sale by installment, when the subject matter is appropriated by the buyer but title is
reserved with the seller.
When a certain date is not fixed for the buyer to take possession of the subject matter. 

None of the above. 

4.Delivery is complete in the following instance:
When the seller executes a Deed of Sale over a real property which he inherited in favor of his
wife during the marriage. 
 When the seller executes a Deed of Sale over a car in favor of his friend without them knowing
that the car had been destroyed in a car wreck by the seller's son. 
When crates of fruits are delivered to the buyer by a carrier but the buyer refuses to receive
them without any apparent reason. 
When goods are shipped, and by the bill of lading the goods are deliverable to the order of the
buyer or his agent, but possession of the bill of lading is retained by the seller.
None of the above. 
5.In a sale of real estate by the unit or number, if the seller does not deliver what
is stated in the contract, the buyer can avail of the following remedies, EXCEPT:
Rescission regardless of the size of the lacking area. 

Proportional reduction of the price based on the contract price. 

Rescission if the property is of inferior quality and the buyer cannot use it for the purpose it was
intended. 
Demand for the delivery of the area as agreed upon. 

All of the above. 

6.
The obligation to deliver the thing sold includes that of:
Placing in the control of the vendee that which the seller opts to deliver regardless of the
stipulations in the contract;
Placing in the control of the vendee all that is mentioned in the contract;

Placing in the control of the vendee all that is expected of the vendor to deliver regardless of the
stipulations in the contract;
 Placing in the control of the vendee all that he demands of the vendor regardless of the
stipulations in the contract.
None of the above. 
7.
There shall be no increase or decrease of the price, although there be a greater or
lesser area or number than that stated in the contract in case of:
Sale of real estate made for a lump sum;

 Sale of an immovable with a specific area at a rate per unit;

Sale of chattel;

Sale of animals;

All of the above.

8.The following are the principles on tradition, EXCEPT: 
 Acceptance by the buyer, although an obligation on his part, is essential for delivery by the seller
to achieve its legal effects. 
An express intention on the matter by the parties to cause the delivery of the object is not
essential for tradition to produce its legal effects. 
The only way to prevent tradition to set in at the point of delivery is the express reservation to
the contrary by the parties. 
No transfer of ownership by the execution of a deed of sale in favor of a person who is a mere
dummy of the seller. 
All of the above. 

9.These are the principles when goods are delivered to a carrier, EXCEPT:
Delivery to carrier is deemed delivery to the buyer. 

Goods are deemed delivered to the buyer if they are delivered to the carrier for the purpose of
transmission. 
Once the goods are delivered to the carrier, it is no longer the obligation of the seller to ensure
the proper packing and storing of the goods with the carrier. 
It is the seller's obligation to determine if the goods that are shipped through a carrier should be
insurable or not. 
All of the above. 
10.These are the principles involving proof of delivery of goods, EXCEPT:
A bill of lading can be considered as an acknowledgment receipt. 

A factory consignment invoice is not evidence of actual delivery of goods. 

An invoice is a detailed statement of the nature, quantity and cost of the thing sold. 

Absent an express stipulation to the contrary, the place of delivery is the seller's place of
business or residence. 
All of the above. 
11.When a movable object is sold to different buyers, the ownership thereof shall
be awarded to:
The person who first dealt with the seller in good faith. 

The person who first acknowledged receipt of the object. 

The person who took possession thereof in good faith. 

The person who registered his receipt with the Registry of Property concerned in good faith. 

None of the above. 

12.When the subject matter of the sale is a real property sold to different buyers,
the ownership thereof shall be awarded to:
The person who possessed it in good faith. 

The person to whom a deed of sale was executed in good faith. 

The person who knew of the prior sale but was able to register the sale with the Registry of
Property and was consequently issued a certificate of title. 
The person who first paid the property in good faith. 

None of the above. 

13.When an unregistered land is the subject of a double sale, ownership thereof
shall be awarded to:
The person who first took possession thereof in good faith. 

The person who first registered it in good faith despite the existence of an older possessor. 

The buyer in good faith in an execution sale despite the existence of a prior sale. 

The person who first paid the property in good faith. 

None of the above. 

14.The following must exist in order to apply the provisions of Article 1544 of the
Civil Code, EXCEPT:
Two or more sales of the same property by one seller are deemed valid sales transactions. 

The buyers of the same property from one seller represent conflicting interests. 

There must only be one seller of the same property but with two or more buyers of conflicting
interests. 
One of the two sales of the same property to two or more buyers is void. 

All of the above. 

15.The following is NOT true:
The rule on double sales applies not only to an absolute contract of sale but also to contracts to
sell. 
In double sales, the buyer is presumed to be a purchaser in good faith and for value. 

Actual lack of knowledge of the flaw in the title by the seller is enough to constitute a buyer in
good faith in double sales. 
The rule on indefeasibility of a certificate of title, where the buyer is not required by law to look
beyond the face of the title, applies even to real estate brokers. 
All of the above are false. 
16.It is defined as an entry made in the books of registry, which records solemnly
and permanently the right of ownership and other real rights. 
 Affidavit of Adverse Claim

Notice of Lis Pendens

Registration 

Certificate of Title

It applies to all of the above options. 

17.A person who negotiates or transfers a document of title does not have to
warrant that:
The document is genuine;

The bailee or previous endorsers of the document shall fulfill their respective obligations;

That the goods are merchantable or fit for the purpose that they were intended;

 That he is not aware of any defect in the document.

 That he has a right to negotiate or assign the document.

18.Which of the following is correct?
A negotiable document of title must always be endorsed. 

A negotiable document may only be negotiated by the owner. 

A negotiable document obliges the bailee to honor it immediately while a non-negotiable

document must be preceded or accompanied by a notice from the transferor in order for the bailee
to honor it. 
A person who acquires a negotiable document acquires the title of the transferor while the
holder of a non-negotiable document does not acquire anything from the transferor. 
All of the above are correct. 
19.The negotiation of a document of title may not be invalidated by the
following:
That the person negotiating it deceived the owner of the document.

That the person negotiating it had stolen the document. 

That the person negotiating it had mistakenly taken it from the owner and negotiated it to a
person who is not holder in due course. 
That the person negotiating it, prior to negotiation, had not paid the value of the document to
the owner as promised. 
All of the above. 
20.The following are true in a non-negotiable document, EXCEPT:
A non-negotiable document cannot be transferred by the holder by delivery to a purchaser or
donee. 
 A non-negotiable document cannot be negotiated and its endorsement gives the transferee no
additional right. 
The mere transfer of a non-negotiable document does not oblige the bailee to hold possession
of the goods for him according to the terms of the document. 
Generally, there is no legal relationship between the assignee and the bailee until the bailee is
informed of the assignment. 
All of the above are true. 
21.When the seller is not the owner of the goods sold, nor does he have the
authority to do so, what is its POSSIBLE effect to the contract?
The contract is void.

The buyer acquires no better title to the goods. 

The contract is perfected. 

The contract is rescissible. 

All of the above are possible effects.

22.The following is NOT true in a co-ownership:
Every co-owner has the right to sell his pro-indiviso share in the co-owned property even
without the consent of the co-owners. 
A co-owner of an undivided property who sells a specific portion of the property renders the
entire sale void. 
A co-owner who sells a specific portion of the undivided property may validly sell the same
provided the buyer is aware that the property is still undivided. 
If a co-owner sells the entire undivided property, the other co-owners may demand for a
rescission of the sale with respect to their shares only.  
All of the above are true. 
23.The following are true in a co-ownership, EXCEPT:
A co-owner cannot sell more than his share.  

A co-owner cannot sell his share of an indivisible property. 

A co-owner can share a specific portion of an undivided property as long as the other co-owners
give their consent. 
A co-owned property but is registered in the name of only one person can sell the entire
property on the strength of the certificate of title issued in his name. 
All of the above are true.
24.A seller who is not an owner of the goods, nor is authorized to sell the goods,
can still transfer title to the goods provided the following is present:
 When the goods are covered by a warehouse receipt in the name of the seller. 

When the goods are sold by the Sheriff in an execution sale. 

When the goods are bought from a stall in the market. 

When the real owner is estopped or lost the right to contest the sale due to his own fault. 

All of the above are true.

25.The buyer bears the loss or deterioration of the object sold, except:
Before perfection of the contract.

At the time of the perfection of the contract. 

After perfection of the contract but before delivery of the object. 

After delivery of the object. 

All of the above. 
26.Mr. A sold to Mr. B several construction equipment which are in the custody of
Mr. C. Mr. B paid the full amount then he demanded the full delivery of his
purchase ASAP. Since Mr. A could not find a truck to carry the equipment to Mr.
B's warehouse, he issued a gate pass to Mr. B to pull out the equipment from Mr.
C's warehouse. When Mr. B went to Mr. C, the latter refused to give the
equipment to Mr. B. Aggrieved, Mr. B filed an action for Specific Performance
against Mr. A and Mr. C. In his answer, Mr. C put the blame on Mr. A, who
interposed the defense that he had already delivered the equipment upon the
execution of the deed of sale. In other words, he argued that there was already a
constructive delivery of the construction equipment to Mr. B once the deed of
sale was executed between them because there was no contrary stipulation made
therein.

a) Was there a constructive delivery made by Mr. A to Mr. B? Explain. (10 pts.)
Yes there is a constructive delivery made by Mr. A to Mr. B. When Mr. A issued a
gate pass/deed of sale to Mr.B to get the supplies to Mr. C, contructive delivery
was made by their agreement.
b) Assuming that the construction equipment got lost or deteriorated while in the
custody of Mr. C, who among all the parties is liable? Explain. (10 pts.) Mr. B is
liable for the lost. When the sale is at perfection
a thing is lost or destroyed, it is lost/deteriorated to the person who was the owner of it at the time ,the seller bears the

loss.
27.In January 2019, Mr. A owned an unregistered land which was the subject of a
pending application for registration. Meanwhile, he executed a deed of sale in
favor of Mr. B who took possession thereof and introduced improvements on the
land. One month later, the pending application for registration of Mr. A was
approved and the original certificate of title was issued to him. In January 2020, a
judgment was rendered against Mr. A where the same property earlier sold to Mr.
B was levied, attached and sold at an auction sale to Mr. C who was issued by the
Sheriff a certificate of sale, duly registered with the Register of Deeds. 

Who has the better right as between Mr. B who first bought and took possession
of the land, or Mr. C who registered the sale with the Register of Deeds? Why?
(10 pts.)Mr. B has the better right who first bought and took possession of the
land. The Deed of Sale is a symbolic delivery of the land. In the absence of the required registration, the
law gives preferential right to the buyer who in good faith is first in possession.

28.

The deed of sale states that A sold to B an agricultural land consisting of 4,000
square meters at P350.00 per square meter. When a relocation survey was
conducted to determine the metes and bounds of the land, it turned out that the
total land area covered by A’s title consists of 4,400 square meters.

a. What should A do? (5 pts.)

b. What if the area turns out to be 3,600 square meters only, what may A do? (5
pts.)

What if the 4,000 square meter agricultural land as agreed upon was bought
by B at a fixed amount of one million pesos without stating the price per
square meter, and the area within the boundaries of the land covered by the
title turns out to be 4,400 square meters, what should the parties do? (5 pts.)
The boundaries of the land stated in the contract determine the effects and scope of the sale, not
the area thereof. The land included within the boundaries, regardless of whether the real area
should be greater or smaller than that recited in the deed.

c.
29.A stole a warehouse receipt over several tons of machineries from B and
negotiated it to C, who, without knowledge of A’s act, paid value therefor. When
B discovered the negotiation to C, he went to court for nullification of the
transaction between A and C. Will his prayer be granted? Why? (10 pts.)yes. B has
the right to rescind the transaction between A and C.
in a contract of sale it is essential that the seller is the owner of the property he is selling,
A void contact cannot give rise to a valid one. Art. 1422 provides that a contract which is the direct
result of a previous illegal contract is also void and inexistent.

30.Who bears the loss and deterioration or enjoys the fruits and income of the
subject matter of the sale:
a) before perfection- Owner is seller so seller bears risk of loss

b) upon perfection- when a thing is lost or destroyed, it is lost to the person who was the owner of it at the time, the seller bears

the loss

c) after perfection but before delivery-it is the buyer.

o Loss – confused state
o Paras: BUYER
o Tolentino: SELLER
o Deterioration and fruits – Buyer bears loss;

d) after delivery? Explain the reasons why. It is the buyer. o Delivery extinguishes ownership visa-
vis the seller and creates a new one in favor of the buyer
(20 points)