2

REGULATORY FRAMEWORK for BUSINESS TRANSACTIONS

1. In relation to the preceding number, would B be liable for BP Blg 22 and Estafa?
BP Blg 22 Estafa
A. Yes Yes
B. No No
C. Yes No
D. No Yes

2. Frothy Iglesias is indebted to Marisol for P100,000. The debt became due and no payment was made by Frothy. Eventually, the right of
action prescribed before Marisol can initiate any court proceedings to compel performance. However, out of his own conscience,
Frothy eventually paid the P100,000. In this case,
A. Frothy can ask for the return of the P100,000 since the debt already prescribed.
B. Frothy can ask for the return of the P100,000 on the ground of solution indebiti.
C. Frothy cannot ask for the return of the P100,000 since Marisol has the right to retain
payment.
D. Frothy cannot ask for the return of the P100,000 since ownership passes upon delivery of the same.

3. The obligation to give support is an obligation arising from:

A. Law
B. Contract
C. Quasi-contract
D. Quasi-delict

4. Juan obliged himself to deliver a specific or determinate TV set to Pedro. If Juan fails to perform his obligation, what is/are the
remedies of Pedro?
A. Specific Performance
B. Substitute Performance
C. Both A and B
D. Neither A nor B

5. When the debtor binds himself to pay when his means permit him to do so, the obligation is deemed:
A. Subject to a suspensive condition
B. Subject to a resolutory condition
C. One with a suspensive term
D. One with a resolutory term

6. Mark, while driving recklessly the cab of his employer, hit a Meralco post and caused serious physical injuries to Mary, a passenger.
Mary can sue Mark and make him liable under:
I. Contract
II. Quasi-Contract
III. Delict
IV. Quasi-Delict
A. All of the above C. III and IV only
B. All except III D. I and IV only

7. First Statement: If an employer is sued for vicarious liability under quasi-delict, he can validly raise the defense of diligence in the
selection and supervision of the employee.
Second Statement: If an employer is made subsidiarily liable on the criminal action against his employee, he can validly raise the
defense of diligence in the selection and supervision of the employee.
A. Both statements are true
B. Both statements are false
C. Only the first statement is true
D. Only the second statement is true
 3

8. On June of 2020, S promised to sell to B, his house and lot, rented by another, should B pass the CPA Board Exams. B took and
passed the October 2020 Board Exams. Who would be entitled to the rent from the time S promised to sell to Rochelle
until the happening of the suspensive condition?
A. B, since the happening of the condition retroacts to the day of the constitution of the obligation.
B. S, because he is the owner of the house and lot during the time mentioned
C. B, because the obligation is unilateral and S is required to appropriate the rents in favor of Rochelle
D. S, because the obligation is reciprocal, thus the fruits are deemed mutually compensated

9. Ms. X, a Filipino citizen who resides in the US, instructed her bank to make a transfer of US$1,000. Mellon Bank US facilitated
the transfer but, by mistake, transferred US$1,000,000 to the account of Ms. Y in Prudential Life Philippines. Mellon
Bank now sues for the recovery of the excess US$999,000. On what ground may the recovery be allowed?
A. Contract
B. Quasi-contract
C. Delict
D. Quasi-delict

10. The civil liability arising from a crime requires: A. Proof

beyond reasonable doubt
B. Preponderance of evidence
C. An iota of evidence
D. Any of the choices

11. W, X, Y, Z are solidarily indebted to C for P40,000. When C demanded payment from W, the latter raised the following
defenses: X is a minor, Y’s share was already condoned and that Z is insolvent. How much is W required to pay C?
A. P40,000 C. P20,000
B. P30,000 D. P10,000

12. Mr. D, a driver of a jeepney owned by Mr. O, while driving recklessly, hit a pedestrian, Mr.
X and injured his passenger Mr. P. Mr. P can sue for damages against Mr. O on the ground of:
A. Delict
B. Delict and Quasi-Delict
C. Delict, Quasi-Delict and Contract
D. Delict, Quasi-Delict, Contract and Quasi-Contract

13. A potestative suspensive condition solely dependent on the will of the debtor: A. Does not affect the
validity of the obligation
B. Makes the obligation voidable
C. Makes the obligation void
D. Is void and thus the obligation is treated as a pure obligation

14. Which of the following is false regarding a facultative obligation?

A. The right to substitute is with the debtor
B. The right to substitute can be expressly granted to the creditor
C. If the principal prestation is lost due to fortuitous events, before substitution, the obligation is extinguished
D. If the substitute prestation is lost due to fortuitous events, after substitution, the obligation is extinguished

15. Armin was hired by Barbie for piano lessons which will begin 6 months after they entered the contract. 3 months prior to the
start of the contract, Armin was killed in an accident. Is Armin Jr., the son of Armin obliged to teach piano lessons to
Barbie?
A. No, if Armin Jr. is not capable of teaching piano lessons
B. Yes, because contracts take effect between the parties, their assigns and their heirs
C. No, because the contract between Armin and Barbie is personal in nature and not transmissible
D. Yes, because Armin Jr. would inherit not only the properties of Armin but also his obligations
 4

16. A promised to deliver to B his car if the latter passes the October 2020 CPA Board Exam.
On June 15, 2020, A changed the tires of the car to a more expensive brand. B passed the
CPA Board Exam, in this case:
A. A would be entitled to reimbursement for the cost of the tires with the right to withhold delivery
B. A can withhold delivery until he is paid the cost of the tires
C. A can remove the tires if he is not paid the cost of the tires even if it causes damage to the car
D. A can only remove the new tires provided it will not cause damage to the car

17. D is indebted to C for P100,000 secured by a mortgage executed by M on his lot and a guaranty by G. Which of the following
is false if M offers to pay the loan?
A. C can be compelled to accept the payment
B. M will be subrogated to the rights of C after payment is made
C. M can later on collect from G if D fails to pay M
D. If it turns out that D already paid half of the loan, M can only collect P50,000

18. D promised to deliver to C his car worth P250,000, his laptop worth P80,000 or his diamond ring worth P40,000. All
the objects were lost in the order they were mentioned through the fault of D. Which of the following is correct?
A. D is liable for P250,000, the value of the car
B. D is liable for P80,000, the value of the laptop
C. D is liable for P40,000, the value of the ring
D. D is liable for the value of whatever C chooses

19. A contract of loan was entered into where A, B, C, D and E are individually liable for
P100,000 to X and Y, joint creditors. Which of the following is correct? A. X can demand the
whole P100,000 from any one of A, B, C, D and E. B. Y can demand only P20,000 from A, B, C, D
and E, separately.
C. A may be compelled to pay P50,000 to either X or Y.
D. B may be compelled to pay P10,000 by either X or Y

20. X, crossing a pedestrian lane, did not see that the light was red. He was hit by a car driven by Z. In this case,
A. Z is not liable for damages since X was himself negligent in crossing the street
B. Z’s liability can be reduced due to the contributory negligence of X C. X’s negligence was
the direct and proximate cause of the injury
D. X can recover damages since he was not negligent

21. Ms. Lessee rented an apartment unit from Mr. Lessor. They agreed that Ms. Lessee would pay for a one-month deposit and
one-month advance and would shoulder all utility costs during the length of her possession. Ms. Lessee, without notice, left
the apartment unit and never returned, leaving an unpaid electric bill of P4,800. From whom can the electric
company collect?
A. Ms. Lessee, because they stipulated in the contract that the Lessee is liable to pay the utility bills
B. Mr. Lessor, because there was no valid substitution in the person of the debtor
C. Ms. Lessee and Mr. Lessor, equally
D. Neither Ms. Lessee nor Mr. Lessor

22. Compensation is not proper in all of the following cases, except: A. Deposit on the part
of the depositary
B. Bail as to the bailor
C. Support as to the one obliged to give support
D. Civil liability arising from a penal offense

23. Consignation alone, without tender of payment, will release the debtor from responsibility in all of the following cases,
except:
A. When the creditor is absent or unknown, or does not appear at the place of payment
B. When he is incapacitated to receive the payment at the time it is due
C. When the creditor validly refuses to give a receipt
D. When two or more persons claim the same right to collect
 5

24. A condition which suspends the efficacy of the obligation and depends upon the sole will of the debtor:
A. Makes the obligation void
B. Makes the condition void but does not affect the validity of the obligation
C. Is known as a potestative resolutory condition
D. Answer not given

25. When the service has become so difficult as to be manifestly beyond the contemplation of the parties,
A. The obligation is automatically extinguished
B. The obligation remains in force and the debtor is required to comply under all circumstances
C. The difficulty can be a valid ground for the court to release the debtor from responsibility
D. Answer not given

26. The debtor is deemed to have lost his right to make use of the period in all of the following instances, except:
A. When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the
debt.
B. When he does not furnish to the creditor the guaranties or securities which he has promised.
C. When by his own acts he has impaired said guaranties or securities after their establishment but not if they
disappear through a fortuitous event, in which case, he is not required to provide an equally satisfactory security.
D. When the debtor violates any undertaking, in consideration of which the creditor agreed to the period

27. D1 is indebted to C for P100,000. Prior to the due date, D1 suggested to C that D2, his brother, will be paying for the
obligation, to which C agreed. On the due date, C collected from D2, but he was insolvent. In this case,
A. D1 is liable to C since he volunteered D2 to take his place as debtor
B. D1 not liable if the insolvency of D2 is already existing and of public knowledge
C. D1 is liable only if the insolvency was already existing at the time of the substitution and was known to him
D. D1 is not liable since there was a valid novation

28. X promised to deliver his car to Y if the latter would draw a square that is at the same time a circle. In this case,
A. The obligation will be treated as a pure obligation
B. The impossible condition is deemed not written
C. The obligation is void for containing an impossible condition
D. The condition may be disregarded

29. The following are generally void contracts, except:

A. Contract of sale between the guardian and his ward concerning the property of the latter.
B. Contract of lease between the executors and administrators and the estate concerning the property of the estate under
administration.
C. Contract of sale where the buyer is a government official entrusted with the
administration of the subject property
D. Contract of loan between the principal and an agent, where the latter was authorized to borrow money.

30. The following are real contracts which require delivery for perfection, except:
A. Pledge C. Mutuum
B. Chattel Mortgage D. Deposit

31. Which of the following is a preparatory contract?

A. Lease C. Mortgage
B. Partnership D. Loan
 6

32. Juan, who is indebted to Pedro for P100,000, sold his only remaining property to Jose.
There would be a presumption that the sale was in fraud of Pedro:
A. If Juan did not reserve sufficient properties to pay all debts contracted before the sale.
B. If Juan did not reserve sufficient properties to pay all debts contracted before and after the sale.
C. When there has been some judgment obtained by Pedro issued against Juan before the sale.
D. When there has been some judgment issued against Juan before the sale even if not obtained by Pedro.

33. Which of the following can validly give consent to a contract: A. Insane persons
B. Demented persons
C. Minors
D. Deaf-mutes who are blind

34. The following contracts are unenforceable if not in writing, except

A. Sale of land worth P499
B. Sale of personal property for at least P500
C. Lease of a car with a term of more than 1 year
D. Contract for a piece of work not to be performed within a year

35. An action for annulment of a sale of registered land on the ground of fraud would prescribe in 4 years from:
A. Date of sale C. Registration of the sale
B. Discovery thereof D. Delivery

36. Which of the following contracts cannot be ratified?

A. Those whose cause or object did not exist at the time of the transaction
B. Unauthorized contracts
C. Those where one party is incapable of giving consent
D. Those that fail to comply with the Statute of Frauds

37. A orally sold his cellphone to B for P15,000, where the latter paid P499 down-payment and the balance to be paid 30 days
after. The contract entered into is:
A. Valid and enforceable C. Void
B. Rescissible D. Unenforceable

38. Juan obliged himself to deliver one of his five cars to Pedro, it was not specified which car.
In this case,
A. The contract would be interpreted following the least transmission of rights
B. The contract would be interpreted following the greatest reciprocity of interests
C. The contract is void
D. They would need to undergo reformation to clarify which car.

39. Which of the following is false with regards the person who can institute annulment of a contract?
A. Only the incapacitated or injured party or his guardian can ask for annulment.
B. Creditors of the incapacitated party can ask for the annulment of the contract entered into by their incapacitated debtor
C. Those who are capacitated cannot allege the incapacity of the other contracting party
D. Answer not given

40. Juan offered to sell his house and lot to Pedro for P1,500,000. Pedro was convinced and accepted the same. Pedro gave
P500 and was given 30 days to make good the balance of the price. Before the expiration of the 30 days, Juan
withdrew and returned Pedro’s P500 because he found a new buyer who would pay twice the original price. In this case,
A. Juan validly withdrew the offer since it is within the 30 day period.
B. Juan cannot validly withdraw the offer since there was an option money of P500 that was given.
C. Juan validly withdrew the offer since he is still the owner of the house and lot pending
delivery.
D. Juan cannot validly withdraw the offer since there was already a perfected contract of sale.
 7

41. Jose entered into a Contract to Sell with Mary concerning the former’s house and lot for P2,000,000. Immediately, Mary
took possession of the house and lot but under the Contract to Sell, ownership will not transfer until full payment of the
price. Mary was able to pay the full price 6 months after and accordingly, Jose executed a Deed of Absolute Sale.
Ownership transferred upon
A. Execution of the Contract to Sell
B. Occupancy of Mary of the house and lot
C. Full payment of the price
D. Execution of the Deed of Absolute Sale

42. S delivered 1,100 sacks of rice to B, which is 100 sacks in excess of the quantity agreed upon, the buyer has the following
options, except:
A. Accept the quantity agreed upon and reject the rest.
B. Accept the quantity delivered and pay at the contract rate. C. Reject the whole
if the contract is indivisible.
D. Reject the whole and ask for damages.

43. In order to validly exercise this right of an unpaid seller, the buyer must be insolvent: A. Possessory Lien
B. Stoppage in Transitu
C. Right of Resale
D. Right of Rescission

44. 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 purchased the thing relying thereon.
A. Condition C. Advertisement
B. Express Warranty D. Marketing Disclosure

45. A sold his land to B with a right to repurchase the same within 10 years. A died, leaving A1 and A2 as heirs, prior to the
expiration of the 10 year period. Which of the following is incorrect?
A. A1 can exercise of the right of redemption only as to half the land. B. A2 can exercise of
the right of redemption as to the whole land.
C. B can compel the heirs to redeem jointly
D. If A2 wishes to exercise his right of redemption as to half of the land, B cannot be compelled to accept a partial
redemption

46. Juan bought a condominium unit from Bellagio Development Corporation (BDC) for P15,000,000 paying P3,000,000
as down-payment and the balance payable in monthly installments of P100,000. It was agreed that should the
buyer fail to pay 2 or more installments, the contract shall automatically be cancelled and that all payments shall
th
be forfeited in favor of BDC by way of rent. After paying 26 months’ worth of installments, Juan failed to pay the 27 and
th
28 installment and BDC deemed the contract rescinded. In this case (which is incorrect)?
A. The rescission is not valid
B. Juan is entitled to 90 days grace period
C. Juan is entitled to P2,800,000 cash surrender value
D. The stipulation providing for forfeiture of the payments is void

47. S sold to B a motorcycle worth P100,000, where B is required to pay P20,000 upon execution of the sale and the
balance payable at the end of 2020. B executed a chattel mortgage on the motorcycle to secure his obligation. B, however,
failed to pay the balance of P80,000 on due date and S foreclosed the mortgage. In this case,
A. If the proceeds of the foreclosure is P70,000, S can still collect the deficiency. B. If the proceeds of the
foreclosure is P90,000, S is entitled to the excess.
C. If the proceeds of the foreclosure is P60,000, S can no longer collect the deficiency.
D. If the proceeds of the foreclosure is P100,000, S can cancel the sale and demand the return of the motorcycle.
 8

48. To defraud his creditors, S sold his land to B. B now seeks to register the land to which C, a creditor of S objected on the
ground that the sale is rescissible for being entered into to defraud S’s creditors. Can B register the land?
A. No, because the contract of sale is rescissible
B. Yes, because the contract of sale has not been rescinded yet
C. No, because the contract of sale was in fraud of creditors
D. Yes, because the contract of sale is valid and its validity cannot be attacked collaterally in a land registration proceeding

49. Under this principle, the validity and compliance of a contract cannot be left to the will of one party:
A. Relativity C. Obligatory Force
B. Mutuality D. Autonomy

50. There is fraud:

A. Usual exaggerations of in trade if the other party had an opportunity to know the facts
B. An expression of an opinion, which turned out to be false, made by an expert and the other party relied on it
C. A misrepresentation made in good faith
D. Failure to disclose facts when there is no duty to reveal them

51. Which of the following contracts of sale is generally void?

A. Between two insane persons
B. Between a minor and an insane person
C. Between husband and wife
D. Between accountant and client

52. H and W were to marry in 6 months time. To express his affection, H donated a house and lot to W and informed W of said
act through a love letter. W wrote back accepting the donation. Before the wedding, however, W died. May the heirs of W
be entitled to the property?
A. No, since the marriage did not take place
B. Yes, since the donation and its acceptance are in writing
C. No, since the donation and its acceptance are not in a public instrument
D. Yes, since H freely donated the property and W became the owner thereof

53. Payment to an incapacitated person is: A. Void

B. Unenforceable
C. Valid under any circumstance
D. Valid if the payee benefitted therefrom

54. Reformation is not allowed in the following, except: A. Donations

inter vivos without any condition
B. Wills
C. When the real agreement is void
D. When it resulted from mutual mistake of the parties

55. Which of the following stipulation is valid?

A. A stipulation prohibiting the real estate mortgagor from disposing the mortgaged property
B. A stipulation providing for automatic appropriation of the thing given by way of pledge/mortgage in case of non-
payment
C. A stipulation excluding a partner from sharing in the profits and losses
D. None of the choices

56. As a rule, a contract takes effect only between the parties, their assigns and their heirs.
Which of the following is not an exception to this rule? A. A contract of
real estate mortgage that is registered
B. A creditor initiating an action to rescind the fraudulent contract entered into by his
debtor
C. A person who maliciously induces another person to violate the terms of his contract
D. A third person who receives an incidental benefit from a contract
 9

57. Rachel and Ross entered into a contract where Rachel would sell her lot with an area of
100sqm, more or less, for P1,000 per sqm. It turns out that the actual area of the lot sold was only 90sqm. Which of the
following is not a valid remedy of Ross?
A. Specific Performance, if possible
B. Proportionate Reduction of the Price
C. Rescission
D. None of the choices

58. In which of the following would the risk of loss be with the transferee upon delivery by the owner?
A. Sale on approval
B. Sale or return
C. Agency to sell
D. Sale on trial or satisfaction

59. The liability of the vendor, who is in good faith, for breach of warranty against eviction, in case there is no waiver issued by
the vendee, is composed of:
I. Value of the Thing
II. Interests
III. Costs of the Suit
IV. Expenses of the Contract
V. Damages

A. All of the above C. I only

B. I, II, III and IV only D. None of the above

60. In this kind of contract of sale, ownership transfers to the buyer at the time of delivery: A. Absolute sale
C. Contract to Sell
B. Conditional sale D. Unenforceable Sale

61. One is false:

A. A price is certain with reference to another thing certain
B. A price is certain if the determination thereof be left to the judgment of a special person or persons
C. If the special person or persons be unable or unwilling to fix the price, the contract shall be inefficacious regardless if the
parties subsequently agreed on a price
D. If the special person or persons acted in bad faith or by mistake, the courts may fix the price

62. Sam and Dean entered into a contract where Sam would sell his lot with an area of 100sqm, more or less, for P100,000, a
lump sum sale. Which of the following is false?
A. If it turns out that the land only had an area of 90sqm, Dean can ask for the proportionate reduction in the
price and pay only P90,000.
B. Dean cannot ask for rescission if the actual area of the land turns out to be only 89sqm.
C. If it turns out that the land had an area of 110sqm, Sam is still required to deliver the whole area and accept the price of
P100,000 agreed upon.
D. Dean is still bound to pay P100,000 regardless of the actual area of the land.

63. Lisang sold his land to Manolo on January 1. On January 5, Lisang sold the same land to Nestor, who did not have any
knowledge of the first sale and immediately took possession of the same. On January 10, when Manolo went to visit the
land he purchased, he saw that Nestor was occupying the same. Nestor explained that he purchased the said land from
Lisang. Manolo immediately went to the Register of Deeds, but the records reflected that the land is still in the name of
Lisang. He then caused the registration of the Deed of Sale between him and Lisang. Who has a better right over the land?
A. Manolo since he is the first registrant in good faith B. Nestor since she
is the first possessor in good faith C. Lisang remains to have a better right
over the land
D. Neither Manolo nor Nestor has a right over the land
 10

64. In sale of rights, delivery may be made through the following, except: A. Execution of the
required document
B. Placing the evidence of the right in the hands of the buyer
C. Allowing the buyer to exercise the right with the consent of the seller
D. When the seller remains in possession of the same under a different capacity

65. In a contract of sale, the buyer is deemed to have accepted delivery in all of the following, except:
A. He intimates to the seller his acceptance
B. He does any act which is consistent with the ownership of the seller
C. After the lapse of reasonable time, he retains the goods without intimating to the seller that he has rejected them
D. None of the above

66. In a true pacto de retro sale, the title and ownership of the property sold are immediately vested in the vendee a retro,
subject only to a resolutory condition of repurchase by the vendor a retro within the stipulated period. This is known as:
A. Equitable mortgage C. Legal redemption
B. Conventional redemption D. Equity of redemption

67. The prescriptive period for a redhibitory action involving animals is from delivery thereof:
A. 40 days C. 4 years
B. 6 months D. 10 years

68. Naruto, while in Japan, called Boruto, his son, to sell Naruto’s land to Sasuke. A deed of absolute sale was executed by
Boruto, signing in behalf of Naruto. Sasuke immediately took possession of the said land. When Naruto came back to the
Philippines, he sold the same land to Jiraiya in a private instrument, who had no knowledge of the earlier sale made to
Sasuke. Jiraiya never caused the registration of the sale. In this case,
A. Sasuke has a better right since he first took possession in good faith
B. Jiraiya has a better right since the sale made to Sasuke is void for lack of authority to sell in writing
C. Since the sale to Jiraiya was only in a private instrument, Sasuke has a better right
D. Jiraiya has a better right because the sale to Sasuke is void since Boruto is not the owner

69. The sale of hope itself and if the thing hoped for should not come into existence, the sale remains to be effective:
A. Emptio rei speratae C. Estoppel in pais
B. Emptio spei D. Pacto de retro sale

70. If a buyer of a residential condominium unit in instalment has paid an equivalent 3 years- worth of installments, his rights
include all of the following except:
A. Grace period of 90 days
B. Cash Surrender Value of 55%
C. Right to payment of cash surrender value in case of rescission
D. Right to a notice in case of rescission

71. In legal redemption of co-owners, if there is more than one co-owner who signified his intention to redeem, who shall be
entitled to redeem?
A. The first one to signify his intention B. The one
who’s use is best justified C. The one with the
smaller lot area
D. All of them pro-rata

72. A buyer ordered 5,000 apples from the seller at P20 per apple. The fair market value thereof is only P18 per apple.
The seller delivered 4,000 apples. In case that the buyer was not aware that the seller will not be able to deliver the
deficiency,
A. He can accept all 4,000 apples and pay the seller at P20 per apple
B. He can accept all 4,000 apples and pay the P18 per apple
C. He cannot reject the delivery of the 4,000 apples since it is substantial compliance
D. All of the choices are correct
 11

73. Penelope sold her land to Schneider with a right to repurchase the same without any agreed period. What will be
the period of redemption, if any?
A. None C. 4 years
B. 30 days D. 10 years

74. S sold to B a motorcycle for P100,000, where P20,000 is payable as downpayment, while the balance is payable in equal
monthly installments of P10,000 due at the end of each month and was secured by a mortgage on the motorcycle. B
paid the first installment, but defaulted in the next 3. S foreclosed the mortgage. In this case,
A. If the foreclosure sale resulted in a deficiency, S may still collect the balance
B. If the foreclosure sale resulted in an excess proceeds, S is entitled to such
C. S can still collect from B the balance regardless of the results of the foreclosure sale
D. S can no longer cancel the sale nor recover any deficiency

75. S Realty Development Co. (SRDC) sold to B a condominium unit in installments. B was able to pay P5,000,000, equivalent to
10 years of installment and downpayment of P1,000,000. SRDC now wants to cancel the sale due to non-payment of
more than 2 installments beyond the grace period allowed by law. How much would be the cash surrender value that B is
entitled to?
A. P4,500,000
B. P3,750,000
C. P3,000,000
D. P2,500,000

76. A, B and C are co-owners of a rural land. Adjacent to said land is that of X, which has an area of 100 sqm. to the left, and to
the right is that of Y, which has an area of 150 sqm. C sold his share to Z. And Y, X and B signified their intention to redeem
the share of C, in the order they were mentioned. Who will be able to redeem?
A. All of them proportionately
B. Y because he signified his intention first C. X because
he has the smaller lot area D. B because he is a co-owner

77. A public instrument containing the description of the thing is required in a pledge in order
A. To be valid
B. To take effect against third persons
C. To be enforceable
D. To effectively transfer possession

78. The following are essential to a contract of pledge and mortgage, except:
A. That they be constituted to secure the fulfillment of a principal obligation.
B. That the pledgor or mortgagor be the absolute owner of the thing pledged at the time the obligation to deliver the same
arises.
C. That the persons constituting the pledge or mortgage have the free disposal of their
property, and in the absence thereof, that they be legally authorized for the purpose. D. None of the above

79. An accessory contract of pledge or mortgage may secure any of the following, except: A. A pure obligation
B. An obligation with a suspensive condition
C. An obligation with a resolutory condition
D. None of the above

80. Harlequin and Diane, members of the Seven Deadly Sins, borrowed P100,000 from Meliodas, their Captain, where
their liability is joint. To secure the payment of the loan, Harlequin gave his spear Chastiefol and Diane gave her war
hammer Gideon by way of pledge. On maturity date, Harlequin paid P50,000 to Meliodas. In this case,
A. Meliodas cannot be compelled to return the Chastiefol
B. Harlequin can demand the return of his Chastiefol
C. If the Chastiefol is returned to Harlequin, the loan will be extinguished
D. Diane can demand the return of her Gideon
 12

81. Legendairy Corporation (LC) borrowed money from Goliath Bank (GB) in the amount of P100M. To secure the payment of
the loan, LC executed a real estate mortgage over its two parcels of land. On due date, LC failed to pay, and GB
caused the extrajudicial foreclosure of the mortgage. How long is the redemption period?
A. Three months from the foreclosure sale or until registration of the sale, whichever is earlier
B. Three months from the foreclosure sale
C. One year from the foreclosure sale
D. Ninety days to one hundred twenty days from the foreclosure sale or until a judicial order of confirmation of the sale

82. Teddy pledged her diamond ring to secure her debt to Bobbie amounting to P20,000.
Teddy was not able to pay the said debt on due date and Bobbie caused the foreclosure of the pledge. In this case, which of
the following is false?
A. The foreclosure sale will be conducted by a notary public.
B. If the ring sold for P25,000, Teddy would be entitled to the excess if there is stipulation to that effect
C. If the ring sold for P18,000, Bobbie would be entitled to the deficiency if there is
stipulation to that effect
D. Whether or not the ring was sold for more or less than the amount of the loan, the loan shall be extinguished.

83. The right of a mortgagor in a judicial foreclosure to redeem the mortgaged property after his default in the performance
of the conditions of the mortgage but before the confirmation of the sale by the court is known as:
A. Accion publiciana C. Right of pre-emption
B. Equity of redemption D. Right of redemption
84. In which of the following accessory contracts is delivery a requirement for perfection?
A. Pledge C. Chattel Mortgage
B. Real Estate Mortgage D. None of the above

85. The disposal of the property subject to this accessory contract, during the existence of the contract, cannot be prohibited by
the creditor-pledgee/mortgagee:
A. Pledge C. Chattel Mortgage
B. Real Estate Mortgage D. None of the above

86. The following are characteristics of a contract of pledge, except: A. Real

C. Bilateral
B. Accessory D. Subsidiary

87. D is indebted to C for P10,000 payable on November 30, 2021. To secure the obligation, D negotiated a negotiable
promissory note payable to him (D) for the amount of P15,000 due on October 30, 2021. On October 30, 2021, and C
collected on the promissory note and applied the P10,000 to the obligation of D to him. Who would be entitled to the
excess P5,000?
A. D
B. C
C. Both, equally
D. Neither

88. Which of the following is an incorrect requisite for a bill of exchange to be negotiable: A. The instrument is in
writing and signed by the maker
B. The instrument contains an unconditional order to pay a sum certain in money C. The instrument is
payable on demand, or at fixed or determinable future time D. The instrument is payable to order or bearer

89. M issued a promissory note in favor of P and authorized the latter to fill-up the note for P10,000. P, however, put the
amount P20,000 and negotiated the same to A. Which of the following is true?
A. M is not liable to A because he can validly raise the defense that the instrument was completed in breach of the
authority given
B. M is liable to A for P10,000 if A is a holder in due course
C. A can only collect P10,000 from P if he is not a holder in due course
D. A can collect P20,000 from M if he is a holder in due course
 13

90. Which of the following requires the element of deceit?

A. Violation of BP Blg. 22
B. Estafa through post-dating or issuing a worthless check
C. Both
D. Neither

91. B received a check from A in payment of a pre-existing obligation. Without encashing it, B indorsed and discounted the check
to C, representing it to be a good check, for which he received 80% of its face value. Eventuall, when C deposited the check
within 90 days from its date, it was returned due to insufficiency of funds. Who may be charged with the violation
of BP Blg 22 assuming the required notice was already provided?
A. Mr. A B.
Mr. B C.
Both
D. Neither

92. D borrowed money from C amounting to P800,000 and secured the same through the execution of a real estate mortgage
over his land. Eventually, D sold the land to X. Which of the following is incorrect?
A. D cannot be prohibited by C from selling the land, even by stipulation.
B. X would be bound by the mortgage over the land if the mortgage is registered.
C. If the mortgage is registered, X would be bound by the land’s eventual foreclosure and
as such will be liable for any deficiency.
D. If X is substituted to the person of the debtor, and in case of foreclosure, he may be liable for any deficiency.

93. If a contract is gratuitous, there will be a presumption that the same was entered into fraudulently when:
A. The debtor received a judgment relative to the claim of the creditor
B. The debtor received a judgment even if it does not relate to the creditor directly
C. The debtor leaves sufficient properties to cover his debts
D. The debtor did not reserve sufficient properties to cover his debts

94. Which of the following is a negotiable instrument?

A. Pay P or order P10,000 on May 15, 2021 sgd. D
B. I promise to pay X or bearer P200,000 in two equal installments sg d. M C. I promise to pay X
P50,000 upon the death of X sgd. D
D. Pay to bearer P20,000 sgd. M to D

95. Which of the following is not negotiable?

A. I promise to pay to the order of B P10,000 in 5 equal monthly installments due at the end of each month from
issuance. However, if I miss one installment, the whole remaining amount shall become due and demandable.
Sgd. A
B. I promise to pay B or order P10,000 or deliver 5 sacks of rice. Sgd. A
C. I promise to pay bearer P10,000, 60 days from issuance, subject to a one-month extension at the option of the
maker. Sgd. A
D. I promise to pay B or bearer P10,000 with 6% interest. Sgd. A

96. Two or more can be named in the alternative: A. Payees

C. Indorsees
B. Drawees D. All of the above

97. M made a promissory note payable to A or bearer, for P10,000. A indorsed the note to B.
It was stolen by F, who forged B’s signature, when it was negotiated to C, C then delivered
the note to H, the current holder. Which of the following is true?
A. M cannot be made liable on the instrument since he is a party prior to the forgery. B. A is liable to H since he
can validly trace his title through A’s indorsement.
C. A loses equity on the instrument if H is a holder in due course.
D. If H is not a holder in due course, M, A and B can validly raise the defense of non- delivery of a complete instrument.
 14

98. On October 9, 2020, Juan purchased from Pedro P10,000 worth of goods and the latter agreed to deliver since Juan issued a
post-dated check for them claiming it to be a good check. Juan believed his brother would put in the money 2 days after
and informed Pedro of this, hence the post-dating of the check. Later on, however, Juan’s brother called and
informed him that he would not be able to make the deposit until 5 days after the date indicated in the check. Juan then
called Pedro and informed him of the said delay. Pedro nevertheless deposited the check and it bounced. In this case,
A. Juan is guilty of estafa since Pedro only parted with his goods on the expectation that the check will be funded.
B. Juan is not guilty of estafa since he was in good faith and he informed Pedro of the circumstances.
C. Good faith is not a valid defense for estafa.
D. Juan is not guilty of estafa since the check was given in payment of a pre-existing obligation.

99. A drew a check for P100,000 and issued the same to B for the payment of a pre-existing obligation. B then issued said check
to C representing the same to be a good check, and by such representation, C agreed to deliver goods to B. The check was
deposited 30 days from its date and later on dishonored for insufficient funds. Assuming that the notice
requirements were complied with and both A and B were not able to make good the check, is A guilty of violating BP Blg 22
and estafa?
BP Blg 22 Estafa
A. Yes Yes
B. No No
C. Yes No
D. No Yes

100. Non-compliance with this kind of obligation gives a right of action to compel performance.
A. Natural Obligations
B. Moral Obligations
C. Civil Obligations
D. All of the choices