CHAPTER 7 - EXTINGUISHMENT

Multiple Choice
1. It takes place when the vendor reserves the right to repurchase the thing expenses sold with
of the obligation of returning to the vendee the price of the sale, the expenses of the
contract, and the necessary and useful expenses made on the thing sold.
a. Right of repurchase
b. Equity of redemption
c. Conventional redemption
d. Legal redemption
2. A, B and C are co-owners in equal shares of one-hectare rural land, the adjoining owners
to which are D and E, the latter owning the smaller area. A donated his share of the land
owned in common to X who is a rural landowner. Upon the proper notice of the sale, B, C,
D and E sought to exercise the right of legal redemption over the shares sold. Who shall
have the right to do so?
a. A and B are preferred to D and E to redeem.
b. E shall have the right to redeem because he has the smallest area.
c. None of them has the right to redeem because the land alienated was not by
onerous title.
d. The first one between A and B to request redemption shall be preferred.
3. The contract shall be presumed to be an equitable mortgage, in any of the following cases,
except:
a. When the price of a sale with right to repurchase is usually inadequate.
b. When the vendor remains in possession as lessee or otherwise.
c. When upon or after the expiration of the right to repurchase, another instrument
extending the period of redemption or granting a new period is executed.
d. When the purchaser retains for himself a part of the purchase price.
4. A, B and C are co-owners of an undivided parcel of land. A sold his 1/3 share to B. Which
is correct?
a. C may exercise his right of redemption within 40 days.
b. C cannot exercise the right of redemption since the sale was made to a co-owner.
c. The deed of sale is unenforceable because it is unauthorized.
d. C may exercise his right of redemption by operation of law.
5. The contract shall be presumed to be an equitable mortgage, in any of the following cases,
except:
a. When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed.
b. When the purchaser retains for himself a part of the purchase price.
c. When the vendee binds himself to pay the taxes on the thing sold.
d. In any other case where it may be fairly inferred that the real intention of the
parties is that the transaction shall secure the payment of a debt.
6. I. In case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage.
II. In case of doubt, courts are generally inclined to construe a transaction purporting to be
a sale as an equitable mortgage, which involves a lesser transmission of rights and interest
over property in controversy.
a. Only I is true
b. Only II is true
c. Both are true
 d. Both are false
7. A sold to X his 1/2 share of the parcel of land he co-owns with B. C owns the parcel of
land adjoining that of A and B. Both B and C want to redeem the share of A which the
latter sold to X.
a. B's right as co-owner excludes that of C, the latter being only an adjoining owner.
b. C shall be preferred to B in the redemption from X.
c. C has a better right to the redemption as an adjoining owner.
d. B and C can equally redeem the share of A.
8. One that - although lacking in some formality, forms and words, or other requisites
demanded by a statute - nevertheless reveals the intention of the parties to charge a real
property as security for a debt and contains nothing impossible or contrary to law.
a. Real mortgage
b. Equitable mortgage
c. Chattel mortgage
d. Antichresis
9. I. In conventional redemption, if there is no period of redemption agreed upon, it shall last
10 years from the date of the contract.
II. In conventional redemption, should there be an agreement, the period cannot exceed 4
years.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. I. The creditors of the vendor cannot make use of the right of redemption against the
vendee, until after they have exhausted the property of the vendor.
II. The vendor may bring his action against every possessor whose right is derived from
the vendee, even if in the second contract, no mention should have been made of the right to
repurchase.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
11. I. If several persons, jointly and in the same contract, should sell an Undivided immovable
with a right of repurchase, none of them may exercise this right for more than his
respective share.
II. If several persons, jointly and in the same contract, should sell an Undivided
immovable with a right of repurchase, the vendee may demand of all the vendors or co-heirs
that they come to an agreement upon the purchase of the whole thing sold: and should they fail
to do so, the vendee cannot be compelled to consent to a partial redemption.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
12. I. Each one of the co-owners of an undivided immovable who may have sold his share
separately, may independently exercise the right of repurchase as regards his own share,
and the vendee cannot compel him to redeem the whole property,
II. If the vendee should leave several heirs, the action for redemption cannot be brought
against each of them except for his own share, whether the thing be undivided, or it has been
partitioned among them.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
13. The vendor cannot avail himself of the right of repurchase without returning to the vendee,
except:
a. Interest
b. The price of the sale
c. The expenses of the contract
d. The necessary and useful expenses made on the thing sold
14. Is the right to be subrogated, upon the same terms and conditions stipulated in the contract,
in the place of one who acquires a thing by purchase or dation in payment, or by any other
transaction whereby ownership is transmitted by onerous title.
a. Right of repurchase
b. Equity of redemption
c. Conventional redemption
d. Legal redemption
15. It is the right to be subrogated, upon the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by:
a. Donation
b. Purchase
c. Dation in payment
d. Any other transaction whereby ownership is transmitted by onerous title
16. I. Legal redemption is intended to maximize co-ownership.
II. The rule on redemption is liberally construed in favor of the original owner of the
property and the policy of the law is to aid rather than defeat him in the exercise of his right of
redemption.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
17. I. The owners of adjoining lands shall also have the right of redemption when a piece of
urban land, the area of which does not exceed one hectare, is alienated, unless the grantee
does not own any urban land.
II. Whenever a piece of rural land which is so small and so situated that a major portion
thereof cannot be used for any practical purpose within a reasonable time, having been bought
merely for speculation, is about to be re-sold, the owner of any adjoining land has a right of
pre-emption at a reasonable price.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
18. I. In legal redemption, the right of redemption of co-owners excludes that of adjoining
owners.
II. The purpose of legal redemption is to reduce the number of participants until the
community is terminated, being a hindrance to the development and better administration of
the property.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
CHAPTER VIII – ASSIGNMENT OF CREDITS AND OTHER INCORPOREAL RIGHTS
Multiple Choice
1. Is an agreement by virtue of which the owner of a credit, known as the assignor, by a legal
cause, such as sale, dacion en pago, exchange or donation and without the consent of the
debtor, transfers his credit and accessory rights to another, known as the assignee, who
acquires the power to enforce it to the same extent as the assignor could enforce it against
the debtor.
a. Barter
b. Waiver of rights
c. Assignment of rights
d. Stipulation pour autruie
2. I. The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.
II. Assignment of credits and other incorporeal rights are perfected also at the moment
there is a meeting of minds.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
3. I. An assignment of a credit, right or action shall produce no effect as against third person,
unless it appears in a public instrument.
II. A gratuitous assignment is in essence a donation; however, it need not comply with the
formalities of a donation.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
4. I. The debtor who, before having knowledge of the assignment, pays his creditor shall be
released from the obligation.
II. The assignment of a credit excludes all the accessory rights, such as a guaranty,
mortgage, pledge or preference.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
5. I. Only notice to the debtor of the assignment of credit is required. His consent is not
required.
II. The vendor in good faith shall be responsible for the existence and legality of the credit
at the time of the sale, unless it should have been sold as doubtful; but not for the solvency of
the debtor.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
6. One of the following is not a warranty of the assignor of credit?
a. The existence of the credit at the time of assignment
b. The legality of the credit at the time of the assignment unless the assignor sold it
as doubtful
 c. If expressly stipulated or unless the insolvency was prior to the sale and of
common knowledge, the solvency of the debtor

d. The solvency of the debtor regardless of stipulation

7. I. In case the assignor in good faith should have made himself responsible for the solvency
of the debtor, and the contracting parties should not have agreed upon the duration of the
liability, it shall last for one year only, from the time of the assignment if the period has not
expired.
II. One who sells an inheritance without enumerating the things of which it is composed,
shall only be answerable for his character as an heir.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
8. When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to
extinguish it by reimbursing the assignee for
a. the price
b. the judicial costs
c. the interest on the price
d. Damages
9. I. In a contract of sale, the object is property.
II. In assignment of credit, the object is credit, incorporeal rights or rights of action.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
10. I. In a contract of sale, it need not appear in a public instrument to affect third person.
II. In assignment of credit, it must appear in a public instrument to produce effect as
against third person. In case the assignment involves real property, the instrument is recoded in
the Registry of Property.
a. Only I is true
b. Only II is true
c. Both are true
d. Both are false
CHAPTER IX - GENERAL PROVISIONS
Multiple Choice
1. Includes any bill of lading, dock warrant, "quedan," or warehouse receipt or order for the
delivery of goods, or any other document used in the ordinary course of business in the
sale or authorizing transfer of receive, or goods, purporting either as proof of the
possession or control of the goods, or authorizing or purporting to authorize the possessor
of the document to transfer or by delivery, goods represented by such document.
a. Document of title of goods
b. Document of negotiable instrument
c. Document of title of things
d. Document of non-negotiable instrument
2. Includes all chattels personal but not things in action or money of legal tender in the
Philippines.
a. Things
b. Fungible goods
c. Goods
d. Consumable goods
3. Means goods identified and agreed upon at the time a contract of sale is made.
a. Generic goods
b. Specific goods
c. Indeterminate goods
d. Quality of goods
4. A person who either has ceased to pay his debts in the ordinary course of business or
cannot pay his debts as they become due.
a. Bankrupt
b. Solvent
c. Debtor
d. Insolvent
5. When goods are in such a state that the buyer would, under the contract, be bound to take
delivery of them.
a. Deliverable state
b. Perishable state
c. Fungible goods
d. Non-fungible goods