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Rflib Chapter 4 - Law
Intermediate Accounting 3 (Our Lady of Fatima University)
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CHAPTER IV - OBLIGATIONS OF THE VENDOR
True or False
Part I
1. If the vendee is placed in actual possession of the property, but by agreement of the parties,
ownership of the same is retained by the vendor until the vendee has fully paid the price, the mere
transfer of the possession of the property subject of the sale is not the "delivery" contemplated in
the law sales.
2. Presumptive delivery via execution of a public instrument is negated by the reality that the vendee
actually failed to obtain material possession of the land subject of the sale.
3. Ownership does not pass by mere stipulation but only by delivery.
4. The purpose of delivery is not only for the enjoyment of the thing but also a mode of acquiring
dominion and determines the transmission of ownership, the birth of the real right.
5. Payment of the purchase price is an essential to the transfer of ownership as long as the property
sold has been delivered. (not essential)
6. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him.
7. A person who does not have actual possession of the thing sold cannot transfer constructive
possession by the execution and delivery of a public instrument.
8. As a general rule, the execution of a public instrument amounts to a constructive delivery of the
thing subject of a contract of sale.
9. In a "sale or return," the ownership passes to the buyer on meeting of the minds. (delivery)
10. In a "sale or return," the buyer may revest the ownership in the seller by returning or tendering the
goods within the time fixed in the contract.
11. In sale on trial, it depends entirely on the will of the buyer. (sale or return)
12. In sale or return, it depends on the quality of the goods. (sale on trial)
13. In all forms of delivery, it is necessary that the act of delivery, whether constructive or actual,
should be coupled with the intention of delivering the thing.
14. In order that this symbolic delivery may produce the effect of tradition, it is necessary that the
vendor shall have had control over the thing sold that at the moment of the sale, its material
delivery could have been made.
15. A stipulation designating the place and manner of delivery is controlling on the contracting
parties.
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Part II
1. The thing sold can only be understood as delivered to the buyer when it is placed in the buyer's
control and possession at the agreed place of delivery.
2. Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer
may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the seller
is not going to perform the contract in full, he must pay for them at the fair value. (Contract rate)
3. If the buyer has used or disposed of the goods delivered before he knows that the seller is not
going to perform his contract in full, the buyer shall not be liable for more than the fair value to
him of the goods so received.
4. Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the
buyer may accept the goods included in the contract and reject the rest.
5. Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, and if
the buyer accepts the whole of the goods so delivered, he must pay for them at the book value.
(Contract rate)
6. Delivery to the carrier is not delivery to the buyer, if the seller is required to send the goods to the
buyer. (deemed to be delivery)
7. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him the price,
or if no period for the payment has been fixed in the contract.
8. Goods are considered "in transit" from the time when they are delivered to a carrier for the
purpose of transmission to the buyer, until the buyer takes delivery of them from such carrier.
9. Goods are considered "in transit" if the goods are rejected by the buyer, and the carrier continues
in possession of them, even if the seller has refused to receive them back.
10. In the sale of real estate, made for a lump sum, 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. However, the
discrepancy must not be substantial.
11. In sale on trial, the risk of loss rests upon the buyer. (sale or return)
12. In sale or return, the risk of loss remains with the seller. (sale on trial)
13. In a unit price contract, the statement of area of immovable is conclusive and the price may not be
reduced or increased depending on the area actually delivered. (lump sum)
14. If a vendee in a double sale registers the sale after he has acquired knowledge that there was a
previous sale of the same property to a third party or that another person claims said property in a
previous sale, the registration will constitute a registration in bad faith and will not confer upon
him any right.
15. In a case of double sale, what finds relevance and materiality is not whether or not the second
buyer is in good faith but whether or not said second buyer registers such second sale in good
faith, that is, without knowledge of any defect in the title of the property sold.
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Part III
1. Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a
different description not included in the contract, the buyer may accept the goods which are in
accordance with the contract and reject the rest.
2. In the preceding paragraph, if the subject matter is Indivisible, the buyer may reject the whole of
the goods.
3. Where both the area and the boundaries of the immovable are declared, the area covered within
the boundaries of the immovable prevails over the stated area. In cases of conflict between areas
and boundaries, it is the latter which should prevail.
4. What really defines a piece of ground is not the area, calculated with more or less certainty,
mentioned in its description, but the boundaries therein laid down, as enclosing the land and
indicating its limits.
5. A second buyer of the property who may have had knowledge of such defect in the seller's title, or
at least was charged with the obligation to discover such defect, can be a registrant in good faith.
(cannot be)
6. When the thing sold is an immovable, the one who acquires it and first records it in the Registry of
Property, both made in good faith, shall be deemed the owner.
7. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are in
themselves fraudulent. (are not in themselves a fraudulent)
8. A mere expression of opinion does not import a warranty, unless the seller is an expert and his
opinion was relied upon by the buyer.
9. If the property is sold for nonpayment of taxes due and not made known to the vendee before the
sale, the vendor is not liable for eviction. (is liable)
10. Any stipulation exempting the vendor from the obligation to answer for eviction shall be void,
even if he acted in good faith.
11. The redhibitory action, based on the faults or defects of animals, must be brought within six
months from the date of their delivery to the vendee. (forty days)
12. If the animal should die within five days after its purchase, the vendor shall be liable if the disease
which cause the death existed at the time of the contract. (three days)
13. The sale of animals suffering from contagious diseases shall be void.
14. A contract of sale of animals shall also be void if the use or service for which they are acquired
has been stated in the contract, and they are found to be unfit therefor.
15. There is no warranty against hidden defects of animals sold at fairs or at public auctions, or of live
stock sold as condemned.
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Multiple Choice
Part I
1. The following are the obligations of the vendor, except:
a. To transfer ownership of the thing sold at the time of meeting of the minds
b. To deliver the thing
c. To warrant the object sold against eviction and hidden defects
d. To take care of the object sold pending delivery
2. The following are the obligations of the vendor, except:
a. To deliver the thing
b. To warrant the object sold against eviction and hidden defects
c. To take care of the object sold pending delivery
d. To pay for the expenses for the execution and registration of the contract of sale only if
stipulated
3. S sold to A in a deed of sale his parcel of land. Afterwards, S sold the same land to B in another
deed of sale who was aware of the sale to A. B thereafter took possession thereof and registered
the sale in his name. The parcel of land shall belong to:
a. A, because he has the oldest title
b. B, because the sale to him was in deed of sale
c. B, because he was the first possessor of the land
d. B, because he first registered the sale in his favor
4. S sold his only car with plate number XYZ123 to B. There was no fixed date for the performance
of their respective obligations. The obligation of S as vendor is:
a. To wait for the buyer to pay the price before he delivers
b. To deliver the car within a reasonable time
c. To deliver the car after one month
d. To pay for damages if the car was not delivered within one month
5. It is an act by which one party parts with the title to and the possession of the property, and the
other acquires the right to and the possession of the same.
a. Delivery
b. Contract of Sale
c. Eviction
d. Contract to Sell
6. S sold a parcel of land to B. Subsequently, S sold the same land to C who immediately took
possession of the land. In this case, the proper remedy of B is:
a. Ask for the rescission of the sale because it is in fraud of creditors
b. Institute an action for damages against S for breach of contract
c. File an action for rescission of the sale to C due to damage suffered by him
d. File an action in court against C to recover the land
7. Actual delivery of a thing sold occurs when it is placed under the control and possession of the
vendee.
a. Real delivery
b. Constructive delivery
c. Delivery by operation of law
d. Other kinds of delivery as intended by the parties
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8. The following are the exceptions to the general rule that ownership of the thing sold is acquired
only upon its delivery to the buyer, except:
a. When the seller and the buyer agree that the ownership shall remain with the seller until
the full payment of the purchase price
b. Contract to sell
c. Sale or return
d. Implied reservation of ownership
9. A seller sold to a buyer a specific parcel of land at a price of 1,000,000. The contract provides that
the buyer will pay the seller cash 400,000 and deliver the buyer's car worth 600,000. The contract
is:
a. barter
b. sale
c. contract to sell
d. mutuum
10. It is a delivery by operation of law.
a. Real delivery
b. Actual delivery
c. Legal delivery
d. Quasi-traditio
11. Quasi-delivery is the delivery of rights, credits, or incorporeal property which is made by:
a. Execution of public instrument
b. Placing of titles of ownership in the hands of buyer
c. Allowing buyer to make use of rights
d. Issuance of delivery receipt
12. When the sale is made through a public instrument.
a. Legal formalities
b. Symbolical tradition
c. Traditio simbolica
d. Traditio longa manu
13. A delivers B his parcel of land worth 1,000,000 in exchange for the car worth 500,000 and cash in
the amount of 500,000. The contract is:
a. barter
b. sale
c. partly barter partly sale
d. innominate contract
14. The parties use a symbol to represent the thing delivered'
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio longa manu
15. The delivery is by mere consent or agreement of the contracting parties, where the seller points
out to the buyer the object of sale without the need of actually delivering it.
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio longa manu
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16. This occurs when the would be buyer had already the possession of the object even before the
contract of sale by virtue of another title which is not ownership (like a lessee in a Contract of
Lease), and pursuant to a contract of sale, he would now hold possession in the concept of an
owner (like a buyer of a house where he was a former lessee of the same house).
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio constitutum possessorium
17. On January 2, 2017 S sold to B his only car with the payment to be made on January 10, 2017.
However, on January 6, 2017, S sold the same car to C who immediately took possession thereof.
Decide:
a. B can file an action to rescind the sale
b. B may recover the car from C because the former was first buyer
c. B may claim damages from S for breach of contract of sale
d. B can file an action to annul the sale
18. This is opposite of constitutum possessorium
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio constitutum possessorium
19. The delivery consists in the owner's continuous possession of the property he had already sold to
another person but his present possession is no longer that of an owner but under another capacity,
like that of a lessee.
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio constitutum possessorium
20. S sold his land to B who began to possess it. Later, C, a stranger sold the same land to D, who
registered the sale and thus obtained the tide in his name. The owner is:
a. D is the owner for he was the first registrant in good faith
b. B is the owner because the owner is his seller
c. S remains to be the owner
d. S is still the owner because B did not register the sale
Part II
1. This is opposite of traditio brevi manu.
a. Legal formalities
b. Symbolical tradition
c. Traditio brevi manu
d. Traditio constitutum possessorium
2. Legal or constructive delivery may be had through any of the following ways, except:
a. The execution of a public instrument evidencing the sale
b. Symbolical tradition such as the delivery of the keys of the place where the movable sold
is being kept
c. Traditio longa manu or by mere consent or agreement if the movable sold cannot yet be
transferred to the possession of the buyer at the time of the sale
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d. Traditio constitutum possessorium if the buyer already had possession of the object even
before the sale
3. The following are modes of delivery of incorporeal property, except:
a. Execution of public instrument
b. The placing of the titles of ownership in the possession of the vendee
c. The use by the vendee of his rights, with the vendor's consent
d. Execution of official receipt
4. When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar
terms, the ownership therein passes to the buyer:
I.
When he signifies his approval or acceptance to the seller.
II.
When he does any other act adopting the transaction.
III.
If he retains the goods without giving notice of rejection, then if time has been fixed for the
return of the goods, on the expiration of such time, and, if no time has been fixed, on the
expiration of a reasonable time.
a. Only I is true
b. Only I and II are true
c. I, II, III are true
d. I, II, III are false
5. Also called " sale on acceptance"
a. Sale on approval
b. Sale or return
c. Sale by sample
d. Sale by description
6. There is no transfer of ownership notwithstanding delivery of the goods.
a. Sale or return
b. Sale on trial
c. Sale by sample
d. Sale by description
7. A sold his land to B, Later, A sold the same land to C. B in turn, sold the same land to D, who took
possession of the land in good faith. C, a purchaser in good faith, registered the sale in his favor.
Decide.
a. B is the owner of the land because he was the first buyer.
b. C is the owner of the land having registered the sale in good faith
c. D is the owner of the land
d. D is the owner because he is in good faith
8. The following are examples of document of title to goods, except:
a. Negotiable instrument
b. Bill of lading
c. Dock warrant
d. Warehouse receipt
9. A negotiable document of title may be negotiated by delivery:
I.
Where by the terms of the document, the carrier, warehouseman or other bailee issuing the
same undertakes to deliver the goods to the bearer.
II.
Where by the terms of the document, the carrier, warehouseman or other bailee issuing the
same undertakes to deliver the goods to the order of a specified person, and such person or a
subsequent endorsee of the document has indorsed it in blank or to the bearer.
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a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. Who can negotiate a negotiable document of title?
a. The owner of the negotiable document of title
b. Any person to whom the possession of the document has been entrusted by the owner, if
by the terms of the document the bailee issuing the document undertakes to deliver the
goods to the order of the person to whom the possession or custody of the document has
been entrusted
c. Any person to whom the custody of the document has been entrusted by the owner, if at
the time of such entrusting the document is in such form that it may be negotiated by
delivery
d. All of the above
11. The following are the warranties on negotiation of a document of title, except:
a. That the document is genuine
b. That he has a legal right to negotiate or transfer it
c. That he has knowledge of no fact which would impair the validity or worth of the
document
d.
12. That he has a right to transfer the possession but not title to the goods. The following are the place
of delivery, except:
a. The place of delivery agreed upon
b. If there is no agreement, it is determined by usage of trade
c. If there is no agreement and usage of trade, it is the sellers place of business if he has one,
and if not his residence
d. If there is no agreement and usage of trade, it is the buyer's place of / business if he has
one, and if not his residence
13. Who pays for the expenses of putting the goods into a deliverable?
a. Seller
b. Buyer
c. None of the above
d. All of the above
14. A sold to B in writing a parcel of land for Php 5,000.00. B now wants place the contract in a
public instrument so that Certificate B could register the sale with the Registry of Deeds and
secure the Transfer Certificate of Title in his name. Decide:
a. A may not be forced or compelled to execute the public instrument since the sale is
unenforceable.
b. A has the obligation to execute the public instrument because the contract of sale is
enforceable.
c. A cannot be required to place the contract in a notarized deed of sale because the contract
is voidable.
d. A can be required to execute the public instrument only if B has fully paid the purchase
price.
15. The seller of goods is deemed to be an unpaid seller:
I.
When the part or whole of the price has not been paid or tendered.
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II.
When a bill of exchange has been received as conditional payment, and the condition on
which it was received has been broken by reason of the dishonor of the instrument
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
16. The rights of an unpaid seller of goods are the following, except:
a. A lien on the goods or right to retain them for the price while he is in possession of them
b. In case of the insolvency of the buyer, a right of stopping the goods in transitu after he has
parted with the possession of them
c. A right of resale
d. A right to annul the sale
17. Under the following circumstances, the unpaid seller has possessory lien' except:
a. Where the goods have been sold without any stipulation as to credit
b. Where the goods have been sold on credit, but the term of credit has expired
c. Where the buyer becomes solvent
d. Where the buyer becomes insolvent
18. The unpaid seller of goods loses his lien under the following, except:
a. When he delivers the goods to a carrier or other bailee for the of transmission to the buyer
without reserving the ownership in goods
b. When the buyer or his agent lawfully obtains possession of the goods
c. By waiver
d. None of the above
19. Goods are no longer "in transit" under the following, except:
a. If the buyer obtains delivery of the goods before their arrival at the appointed destination
b. If, after the arrival of the goods at the appointed destination, the carrier acknowledges to
the seller that he holds the goods on his behalf and continues in possession of them as
bailee for the seller
c. If, after the arrival of the goods at the appointed destination, the carrier acknowledges to
the buyer that he holds the goods on his behalf and continues in possession of them as
bailee for the buyer
d. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer
20. An unpaid seller having a right of lien or having stopped the goods in transitu may resell the
goods in one of the following cases:
a. Goods are not of perishable nature
b. The seller expressly reserves the right of resale in case the buyer should make default
c. The buyer has been in default in the payment of the price for a reasonable time
d. None of the above
Part III
1. An unpaid seller having the right of lien or having stopped the transitu, may rescind the transfer of
title and resume the ownership in goods:
a. The seller did not expressly reserve the right to do so
b. The buyer has been in default in the payment of the price for unreasonable time
c. Goods are of perishable nature
d. None of the above
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2. The vendor is not bound to deliver the thing sold because the vendee has the right to make use of
the term in the following instances, except:
a. When after the obligation has been contracted, the vendee becomes insolvent, unless he
gives a guaranty or security for the debts
b. When the vendee does not furnish the guaranties
c. When by his own acts he has impaired said guaranties or Securities after their
establishment, and when through a fortuitous even they disappear, unless the vendee
immediately gives new ones equally satisfactory
d. When the vendee violates any undertaking, in consideration of which the seller agreed to
the period
3. A bought a pair of shoes from a store. The shoes did not belong to the store but a customer who
had left the same for repair. Did A acquire good title to the shoes?
a. No, because A bought it by mistake.
b. Yes, because it was bought from a store in good faith and for value.
c. No, because the seller is not the owner.
d. Yes, because the store was authorized to sell.
4. In a sale of immovable by the unit, that is, at a stated rate per unit area.
I.
If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to
deliver all that may be stated in the contract or demand for the proportionate reduction of the
purchase price if delivery is not possible.
II.
If the vendor delivers more than the area stated in the contract, the vendee has the option to
accept only the amount agreed upon or to accept the whole area, provided he pays for the
additional area at the contract rate
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. The requisite of double sales are the following, except:
a. Two or more valid contract of sale
b. Two or more buyers who are at odds over the rightful ownership the object must represent
conflicting interests
c. They must pertain exactly to the same object
d. They must be bought from the different seller
6. The principle of double sale is not applicable in the following, except:
a. The two different contracts of sale are made by two different persons, one of them not
being the owner of the property sold
b. Where one of the contracts of sale is a forgery
c. Where one of the contracts of sale is genuine and the other is also genuine
d. Where one of the contracts of sale is subject to a suspensive condition which was not
complied with and the other is an absolute sale
7. The following are the rules in case of double sale of immovable property, except:
a. First registrant in good faith
b. First possessor in good faith
c. Person with the oldest title in good faith
d. Person with the oldest transfer certificate of title in good faith
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8. Is one who buys property of another without notice that some other person has a right to, or
interest in, such property and pays a full and fair price for the same at the time of such purchase,
or before he has notice of the claim or interest of some other person in the property.
a. Purchaser in good faith
b. Buyer in bad faith
c. Seller in good faith
d. Seller in bad faith
9. It is any affirmation of fact or any promise by the seller relating to the thing if the natural tendency
of such affirmation or promise is to induce the buyer to purchase the same, and if the buyer
purchases the thing relying thereon.
a. Express warranty
b. Implied warranty
c. Condition
d. None of the above
10. Is a statement or representation made by the seller of goods, contemporaneously and as part of the
contract of sale, having reference to the character, quality or title of the goods, and by which he
promises or undertakes to ensure that certain facts are or shall be as he then represents them.
a. Condition
b. Warranty
c. Exaggerations in trade
d. Expression of opinion
11. Is that which the law derives by application or inference from the nature of the transaction or the
relative situation or circumstances of the parties, irrespective of any intention of the seller to
create it.
a. Express warranty
b. Implied warranty
c. Condition
d. None of the above
12. The prescriptive period for instituting actions based on a breach of express warranty is that
specified in the contract, and in the absence of such period, the general rule on rescission of
contract. which is:
a. 4 years
b. 5 years
c. 6 years
d. 10 years
13. A sold her specific car to B for P200, 000 payable in 5 equal installments, A delivered the car to B
but a mortgage was constituted on the car to answer for the unpaid installments. B paid the first 2
installments but failed to pay the last 3 installments. A foreclosed the mortgaged property and sold
it at public auction for P 100, 000. Which is correct?
a. A can recover from B the balance of P20, 000 even if there is no stipulation to that effect.
b. A cannot recover the deficiency even if there is stipulation to the contrary.
c. A can recover from B the balance of P20, 000 if there is Stipulation to that effect.
d. A cannot recover the deficiency except if there is stipulation to that effect.
14. As for actions based on breach of implied warranty, the prescriptive period is, warranty against
hidden defects of and warranty against eviction:
a. 4 months from the date of perfection
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b. 4 months from the date of delivery
c. 6 months from the date of perfection
d. 6 months from the date of delivery
15. It shall take place whenever by a final judgment based on a right prior to the sale or an act
imputable to the vendor, the vendee is deprived of the whole or of a part of the thing purchased.
a. Eviction
b. Hidden defect
c. Redhibitory defect
d. All of the above
16. In order that a vendor's liability for eviction may be enforced, the following requisites must
concur, except:
a. There must be a final judgment.
b. The purchaser has been deprived of only the whole of the thing sold,
c. Said deprivation was by virtue of a right prior to the sale made by the vendor.
d. The vendor has been summoned and made co-defendant in the suit for eviction at the
instance of the vendee.
17. The waiver is made by the vendee without the knowledge of the risk of eviction. The vendor shall
only pay the value which the thing sold had at the time of eviction.
a. Express waiver
b. Implied waiver
c. Waiver consciente
d. Waiver intencionada
18. The waiver is made by the vendee with the knowledge of the risk and assumed its consequences.
The vendor shall not be liable'
a. Express waiver
b. Implied waiver
c. Waiver consciente
d. Waiver intencionada
19. In case eviction occurs, the vendee shall have no right to demand of the vendor one of the
following:
a. The return of the value which the thing sold had at the time of the eviction, be it greater or
less than the price of the sale
b. The income or fruits, if he has been ordered to deliver them to the party who won the suit
against him
c. The costs of the suit which caused the eviction, and, in a proper case, those of the suit
brought against the vendor for the warranty
d. The expenses of the contract, if the vendor has paid them
20. One of the following is not a requisite for breach of warranty against hidden defect:
a. The defect must be hidden.
b. The defect must exist at the time of delivery of the contract of sale.
c. The defect renders the thing unfit for the use for which it is intended.
d. It must be instituted within the prescriptive period.
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