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MULTIPLE CHOICE
Direction: Read and analyze the following statements. Write the letter of the correct answer on the space provided before the number.
1. Vi imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labeled 220 volts and Vi sold them to the public
as such. Later the customer complained that the radios have been mislabeled by the manufacturer and that they were good only for 110 volts.
As a consequence,
A. Vi is liable to the vendees for any hidden defects even though he is not aware.
B. Vi is not liable because he is in good faith
C. Vi is not liable under the principle of “caveat emptor” or let the buyer beware
D. The vendees may hold the manufacturer liable but not Vi because Vi specifically asked for 220 volts
2. X sold her specific car to V for P200,00 payable in 5 equal installments. X delivered the car to V but a mortgage was constituted on the car
to answer for the unpaid installments. V paid the first 2 installments but failed to pay the last 3 installments. X foreclosed the mortgaged
property and sold it at public auction for P100,000. Which is correct?
A. X can recover from V the balance of P20,000 even if there is no stipulation to that effect
B. X can recover from V the balance of P20,000 if there is stipulation to that effect
C. X cannot recover the deficiency except if there is stipulation to that effect
D. X cannot recover the deficiency even if there is stipulation to the contrary
3. The redhibitory action based on the faults or defects of animals must be brought within
A. 30 days from delivery to the vendee
B. 40 days from delivery to the vendee
C. 45 days from delivery to the vendee
D. 6 months from delivery to the vendee
4. D borrowed P50,000.00 from C. the obligation is secured by a mortgage of D’s house and lot. Thereafter, C assigned his credit right to T.
based on the foregoing facts, which of the following statements is incorrect?
A. The consent of D to the assignment is not required in order that T may collect from D.
B. The assignment of the credit right did not carry with it the assignment of the mortgage.
C. If D pays C before D was notified of the assignment, D is released from the liability.
D. The assignment, to bind third persons, must be in a public instrument and recorded with the Registry of Property
5. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the same car to C and immediately
affected delivery. On the day agreed upon, A did not deliver the car to B. Which is correct?
A. B can cancel the contract between A and C, because the contract between A and B was perfected ahead of the contract between A and C
B. B should make the demand to make A in default
C. A is liable to B for the value of the car plus damages after B makes a demand
D. A is liable to B for damages and is in default without need of any demand
6. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale written in the Bicolano dialect. One
week later, A sold the same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C, who was
aware of the first sale immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim
to the property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to
A. B because he has got an older title
C. C because he is the first to take possession
B. C because he is the first to register
D. No one as both sales are void
7. Brothers Antonio, Benito, Carmelo and Donato are co-owners of an agricultural lot which they inherited from their parents. Antonio sold his
undivided share in the property to Teodulfo. Either Benito, Carmelo and Donato may purchase Antonio’s share in the property from Teodulfo
by virtue of their right of:
A. legal redemption
C. conventional redemption
B. pre-emption
D. consolidation
8. I. The ownership in the thing shall not pass to the purchaser until he has fully paid the price.
II. If at the time the contract of sale is perfected, the thing which is the object of the contract has been partially lost, the contract shall be
without effect.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
9. B purchased a pair of leather shoes from the store of S. shortly after leaving the store, B decided to return and requested S, the owner, to
place a protective rubber covering on the sole of each shoe. Since the job required at least 30 minutes to complete, B left the store of S to
shop at the neighboring stores. When he returned to the store of S after 30 minutes, the pair of shoes was nowhere to be found. It turned out
that C, a sales clerk, had sold the pair of shoes that B bought to X, another customer. Which of the following is correct?
A. X acquired ownership of the pair of shoes earlier bought by B.
B. X did not acquire the ownership of the pair of shoes earlier bought by B.
C. B remained the owner of the pair of shoes that he had bought despite its sale to X.
D. S reacquired ownership of the pair of shoes when it was brought to him for additional work.
10. B visited a store selling lamps, light bulbs and similar items. He informed the seller that he was buying 2 units of a 50-watt “Phillips” bulb.
Though he intended to use the 2 bulbs for the headlight of his car, he did not inform the seller of his purpose. Thereafter, he installed the 2
units of “Phillips” bulb on his car but they did not function. Based on the foregoing, which of the following statements is incorrect?
A. The seller is liable for breach of warranty of fitness for a particular purpose.
B. The seller is not liable for breach of warranty of fitness for a particular purpose because the buyer did not rely on the seller’s skill or
judgment.
C. The seller is not liable to B since the seller’s warranty is only for merchantability, or that the bulb is fit for the general purpose for which it
was intended.
D. There is no warranty of fitness for a particular purpose since the bulb was sold to B under its trade name.
11. It refers to the right which the vendor reserves to himself to repurchase the thing sold, with the obligation to reimburse the vendee of the
price, the expenses of the contract, any other legitimate payments made therefore and necessary and useful expenses on the thing sold.
A. Conventional redemption
C. Equity of redemption
B. Legal redemption
D. Right of pre-emption
12. Palmares ordered from Superstar Sportswear Company, a sportswear manufacturer, 2 dozens of jackets and jogging pants styled and
designed by Palmares for the use of his basketball team. This was not the type of sportswear normally manufactured by Superstar. The price
agreed upon by the parties was P72,000.00. After the articles were manufactured, Palmares refused to accept them and claimed that he was
not liable since the contract did not comply with the Statute of Frauds. Decide:
A. Palmares is liable although the contract was not in writing.
B. The contact is a contract of sale.
C. The contract is a contract to sell.
D. There was no contract at all because no writing was executed by the parties
13. Mr. AB owes Mr. CD P150,000 due on August 1, 2010. Mr. AB executed mortgage in favor of Mr. CD on Mr. AB’s building to guaranty the
obligation. On August 10, 2010, the mortgage building was totally lost due to a strong typhoon. On August 12, 2010, Mr. CD demanded
payment from Mr. AB. Is Mr. CD’s demand valid?
A. No, the obligation is one with a definite period, thus the creditor cannot demand fulfillment of the obligation as such would the prejudicial to
the rights of the debtor.
B. No, the obligation is extinguished because the obligation is lost through a fortuitous event.
C. Yes, the debt becomes due at once because the guaranty was lost even through a fortuitous event unless the debtor can mortgage
another property that is equally satisfactory.
D. Yes, the debt becomes due at once because from the tenor benefit is given solely to the creditor thereby giving the creditor the right to
demand performance even before the date.
14. A sold a residential land to B. B paid the consideration. When B wanted to register the sale at the Register of Deeds, the latter refused to
register and requires the presentation of the certificate of capital gains tax payment. What can B do?
A. B may sue A to refund the consideration paid by B under the maxim, “no one shall enrich himself at the expenses of another.”
B. B cannot compel A to return the selling price because the contract is not enforceable
C. B may possess the residential land as a buyer in good faith
D. B may compel A to pay the capital gains tax and secure the certificate of capital gains tax payment
15. A and B are good friends. A sold and delivered his car to B. It was agreed and understood that on the next Sunday A will name and fix the
price of the car. Sunday came. A called B by phone and stated and fixed the price at P150,000. Is the sale perfected?
A. Yes. The price was stated and fixed on the date agreed upon.
B. No. The price was left to the discretion of the seller.
C. No. at the time of the sale, the price is not fixed.
D. No. The price fixed by the seller was not accepted by the buyer.
16. Barameda bought a piece of land from Sarmiento for a lump sum of P120,000.00. Aside from mentioning the boundaries in the contract
which is required in the sale of real estate, the contract also states that the piece of land consists of 1,000 square meters. before delivery,
Sarmiento discovered that the piece of land actually contains 1,200 square meters. Which of the following is correct?
a. Sarmiento must deliver all the 1,200 square meters; Barameda must pay P120,000.00 plus an additional amount for the excess of 200
square meters.
b. Sarmiento is required to deliver only 1,000 square meters; Barameda must pay the contract price of P120,000.00.
c. Sarmiento must deliver all the 1,200 square meters; Barameda has to pay only P120,000.00.
d. Neither party is required to perform the obligation because of mistake.
17. A kind of mortgage which, although lacking some formality, form of words, or requisites prescribed by law, shows the intention of the
parties to charge real property as security for debt and contains nothing impossible or contrary to law is known as:
A. legal mortgage
C. conventional mortgage
B. equitable mortgage
D. voluntary mortgage
18. A offered to sell for P500,000 his house and lot to B who was interested in buying the same. A gave B thirty days to raise the amount and
as soon as B is ready they will sign the deed of sale. On the 25th day, A notified B that he is no longer willing to sell the property unless the
price is increased to P550,000.
I. B can compel A to accept the P500,000 first offered because of a bilateral offer to sell and to buy definite property for a definite price.
II. B cannot compel A to accept the P500,000 because this is merely an unaccepted unilateral promise to sell.
SUBJECT: R
A. First statement is true, second statement is false.
B. First statement is false, second statement is true.
C. Both statements are true.
D. Both statements are false
19. X sold his horse to Y for P40,000. No payment has yet been made and the sales document does not provide the date of delivery. Before
delivery and payment the horse gave birth to a baby horse, which is correct?
A. Y is entitled to the baby horse which was born after the perfection of the contract
B. X is entitled to the fruit (baby horse) as Y has not paid the price yet
C. X is entitled to the (baby horse) because it was born before his obligation to deliver arises
D. Y should pay additional amount for the baby horse to be entitled to it
20. X offers to V 100 electric fans for P80,000 payable in 60 days with 12 % interest per annum. V accepted the offer by telegram provided
that interest is reduced to 6%. If there is no further communication between X and V relating to the terms:
A. The contract is perfected because of the acceptance by V
B. There is no contract yet between X and V because V made a counter offer
C. The contract is perfected under the terms of X
D. There is no contract yet unless v gives earnest money
21. I. The ownership of the thing sold shall be transferred to the vendee upon perfection of the contract.
II. An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissory.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
22. I. If two or more animals are sold together, whether for lump sum or for a separate price for each of them, the redhibitory defect of one
shall give rise to the redhibition of the others.
II. There is no warranty against hidden defects of animals sold at fairs or at public auctions or of livestock sold as condemned.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
23. I. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a
good title to the goods.
II. If the vendee has renounced the right to warranty in case of eviction, and eviction should take place, the vendor shall only pay the
value which the thing sold had at the time of sale.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
24. I. The expenses for the execution and registration of the sale shall be borne by the vendee, unless there is a stipulation to the contrary.
II. If the same thing should have been sold to different vendees the ownership shall be transferred to the person who may have taken
possession thereof in good faith.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
25. X owns 50 mango trees bearing fruits, ready for harvest. She told all the fruits of all the trees to V who paid P100,000. X told V that he can
harvest her fruits anytime he likes and pointing at the mango trees. X has fulfilled her obligation to deliver the mango fruits to V by
A. Traditio longa manu
C. Traditio constitutum possessorium
B. Traditio brevi manu
D. Execution of a public instrument
26. If the redemption is to be made by the seller, one of the following need not be given to the buyer:
A. Expenses of the contract
C. Necessary expenses on the thing sold
B. Interest on the price of the sale
D. Price of the sale
27. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price offered at Z’s store in Cainta Market.
The price is
A. Not certain because the price at Cainta Market is not stated
B. Certain because it has got reference to another thing which is certain
C. Certain because there is a price ceiling for price of land
D. Not certain so court may fix the price
28. A, B and C are co-owners of an undivided parcel of land, A sold his 1/ 3 interest to B absolutely. Which is correct?
A. C may exercise his right of redemption of the interest sold by A to B
B. C cannot exercise the right of redemption because the sale was made in favor of a co-owner
C. The sale made by A to B is void because it was not made in favor of a stranger
D. C may redeem only 1 /2 of the interest sold by A to B
29. Using the preceding number, suppose, instead of selling his interest to B, A sold it to D, who can exercise the right of redemption?
A. Both B and C
C. C but not B
B. B but not C
D. A, B and C
30. Not an implied warranty in a contract of sale:
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A. Right to sell the thing at the time of perfection of the contract
B. Reasonably fit for the purpose they are acquired
C. Merchantable in quality
D. Free from charges or encumbrances not declared or known to the buyer
31. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is liable to
the value of the thing at the time of eviction.
A. Waiver intentionada
C. Waiver cursunada
B. Waiver consciente
D. Waiver inocente
32. Using the preceding number, where the seller is no longer liable
A. Waiver intentionada
B. Waiver consciente
C. Waiver cursunada
D. Waiver inocente
33. X sold his motor vehicle to V who bought it for P200,000. It turned out however, that X has 2 motor vehicles: Toyota valued at P230,000
and Lancer valued at P220,000. Which is correct?
A. There is no contract of sale between X and V
C. The parties can ask for annulment of the contract
B. The parties may ask for interpretation or reformation
D. V may choose between the Toyota or Lancer
34. I. The husband and the wife cannot sell property to each other, as a rule.
II. The sale of a piece of land or interest therein when made thru an agent is void unless the agent’s authority is in writing even if the sale
itself is in s public instrument and has been registered.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
35. I. If the animal sold should die within three (3) days after its purchase, the vendor shall be liable to the vendee.
II. The fixing of the price can never be left to the discretion on one of the contracting parties. However, if the price fixed by one of the
parties is accepted by the other, the sale is perfected.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
36. A and B are co-owners of a rural lot not exceeding 1 hectare. The lot is surrounded on is four sides as follows: on the North, by the road;
on the East, by the lot of X consisting of 2 hectares; on the South, by the lot of Y consisting of 2 ½ hectares; and on the West, by Z’s lot
consisting of 2 ¾ hectares. A sells his undivided interest in the agricultural lot to T, who owns several hectares of rural land in the area. Who
has the right of legal redemption over the undivided interest in the lot sold by A to T?
A. B
B. X
C. Y
D. Z
37. B called on S at the shoe factory of S for the latter to make a pair of shoes which B would be needing in the play “Romeo and Juliet”. B
provided S with the description of the pair of shoes that he wanted since S did not manufacture the kind of shoes that B needed. S quoted a
price of P1,000.00 which B agreed to pay upon delivery to him of the pair of shoes. Since S and B had been neighbors for a long time, their
agreement was sealed with a handshake.
A. The contract between S and B becomes enforceable if S had already completed making the pair of shoes.
B. The contract between S and B becomes enforceable if B had already paid the amount agreed upon for the work.
C. The contract between S and B is enforceable even if it is still executory.
D. The contract cannot be enforced by either party because it was not in writing.
38. S sold a specific parcel of land separately to the following persons: on July 1, 2010, to X, in a public document; on July 5, 2010 in a
private instrument to Y, who took physical possession of the land; and on July 9, 2010 to Z, who registered the sale with the Register of
Deeds. Neither X, Y, nor Z was aware of the sale made to the other two buyers. Who is the owner of the parcel of land?
A. X, because he was the first purchaser
B. Y, because he took physical possession
C. Z, because he registered the sale
D. S, because the multiple sales he made rendered each sale a void contract
39. S sold his farm lot to B with S reserving his right to repurchase the property within five years from the date of sale. Based on the foregoing
facts, which of the following statements is incorrect?
A. The sale is subject to a suspensive condition.
B. B may validly sell the lot to a third person against whom S may exercise the right to repurchase provided the right is registered.
C. B subrogated to the rights and actions of S.
D. B’s ownership of the lot becomes irrevocable if S fails to exercise his right to repurchase within the period stated.
40. When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the goods passes to the buyer
A. Upon perfection of the contract
C. Upon expiration of seven days
B. Upon acceptance by the buyer of the offer of the seller
D. Upon delivery of the goods
41. Quasi-traditio is equivalent to
A. Traditio longa manu
B. Traditio brevi manu
SUBJECT: R
C. Traditio constitutum possessorium
D. Execution of a public instrument
42. On January 1, 2010, Santos offered to sell his only diamond ring for P50,000.00 cash to Bersola who was interested in buying the same.
Santos told Bersola that he was giving the latter up to January 31, 2010 to decide whether to buy the ring or not. Bersola agreed to the option
and gave Santos option money of P500.00. On January 18, 2010, Santos found another buyer who was willing to pay P70,000.00 cash.
Santos personally visited Bersola to inform him that he was withdrawing his offer unless Bersola agreed to buy the ring for P70,000.00.
A. Santos may validly withdraw the offer without being held liable for breach of contract since it would be unfair to him if he would receive only
P50,000.00 as the price of his ring when another person is willing to buy it at a higher amount.
B. Bersola is bound to pay P70,000.00 if he were to avail himself of his option to buy the ring.
C. Santos cannot withdraw the offer because the option is founded upon a consideration of P500.00
D. Bersola needs to pay only P49,500.00 if he decides to buy the ring since the option money of P500.00 that he paid forms part of the
purchase price.
43. Maria purchased a quantity of bed sheets which were wrapped up in bales. The sale was done in the warehouse of Seller. Some bed
sheets were pulled out from the bales displayed and found to be all right. Maria then purchased 100 bales and paid the price. After delivery,
Maria discovered that some of the bed sheets contain holes.
I. Maria can return the bed sheets and recover the money she paid.
II. Maria cannot return the bed sheets and recover the money she paid because the principle “caveat emptor” applies.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
44. S shipped FOB Manila, perishable goods worth P50,000.00 to B who is based in Cebu. B remitted a check amounting to P50,000.00 for
the price of the goods. while the carrier was on its way to Cebu, S was informed by his bank that the check issued by B was dishonored for
insufficient funds. On further inquiry, he learned that B had become insolvent. Accordingly, S obtained physical possession of the goods from
the carrier. After notifying B, S resold the goods.
Case A – if the goods are resold for P52,000.00, the profit of P2,000.00 belongs to B since title had already passed to him
Case B – if the proceeds of sale, net of incidental expenses, amounted to P47,000.00, S can recover the loss of P3,000.00 from B.
A. Both cases are true
C. Case A is true; Case B is false
B. Both cases are false
D. Case A is false; Case B is true
45. I. If the bill of lading covering the goods sold is by its terms the goods described therein are deliverable to the order of the seller, and
retained by the seller, the seller has reserved his ownership over the goods.
II. If the bill of lading is by its terms the goods described therein are deliverable to the order of the buyer and retained by the seller, the
seller has reserved his right of possession of the goods as against the buyer.
A. First statement is true, second statement is false.
C. Both statements are true.
B. First statement is false, second statement is true.
D. Both statements are false
46. A, B, and C were the co-owners of a lot in the ratio 1:2:1. A died. He was succeeded to the property by S, his son and heir. Who may
redeem the lot of A from S?
A. B, because as the owner of a bigger portion, he enjoys preference in the exercise of the right of legal redemption.
B. C, so that he and B will have an equal hare in the lot.
C. B and C, in proportion to the share of each in the lot.
D. Neither B nor C may exercise the right of legal redemption.
47. D owed C P100,000.00. The debt is evidenced by a promissory note and secured by a mortgage of D’s lot. Before due date, C assigned
his credit right to T by executing a deed of assignment but without the parties informing D. On due date, T went to D to collect the debt at
which time D learned of the assignment.
A. T cannot collect from D because the latter was not informed of the assignment at the time it was made.
B. T can collect from D but if D cannot pay, T cannot foreclose the mortgage on the lot.
C. T can collect from D but if D cannot pay, T can foreclose the mortgage which is deemed assigned together with the credit right.
D. T can only go after C, the assignor, since the assignment was without D’s knowledge.
48. A credit right is considered to be in litigation:
A. As soon as a complaint is filed by the creditor against the debtor.
B. When the debtor has filed his answer to the complaint.
C. When the case is scheduled for pre-trial conference between the parties.
D. When the trial has started.
49. The right of pre-emption differs from the right of redemption that in pre-emption
A. The action is directed against the buyer.
C. The right arises after the sale.
B. The action is directed against the seller.
D. There can be a rescission of the original sale.
50. Which of the following obligations of the vendor cannot be waived:
A. To allow the buyer to examine the goods sold.
B. To transfer ownership to the buyer.
C. To pay the expenses of the deed of sale.
D. To warrant the thing sold.
DISCUSSION
51-55. Enumerate the cases when the contract shall be presumed to be an equitable mortgage
56-60. When the warranty has been agreed upon, what should the vendee demand to the vendor?
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“Great power comes from great responsibility”
BEST LUCK FUTURE ACCOUNTANTS!
SUBJECT: R