1

PRTC

Contract of Sales
1. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the
time:
a. The obligation to deliver the thing sold arises
b. The sale is perfected
c. the thing sold is delivered
d. the fruit of the thing sold is delivered
2. Ownership of the thing sold is transferred/acquired/retained:
a. Retained by the seller in "sale of return"
b. Transferred to the buyer upon constructive or actual delivery of the thing sold
c. Acquired by the buyer upon perfection of the contract
d. Transferred to the buyer upon acceptance of the price.
3. If the material used in the manufacture of the article is more valuable, it is a contract
of sale, and if the labor or skill is more valuable than the material used in the
manufacture of the article, it is a contract for a piece of work. This school of thought
followed:
a. English rule
b. Masachussets rule
c. New York rule
d. Italian rule
4. This refers to an encumbrance imposed upon an immovable belonging to a different
owner.
a. Easement or servitude
b. Real estate mortgage
c. Pledge
d. Chattel mortgage
5. The purpose of this action is to ask for a proportionate reduction of the price
a. Quanti Mincris
b. Redhibitory action
c. Replevin
d. Accion vindicatoria
6. If redemption is made, which of the following will not be paid by the seller to the buyer
a. Price made by the buyer
b. Expenses in the execution of the sales contract paid by the buyer
c. All necessary Expenses on the thing sold and to be redeemed
d. Interest on the price paid by the buyer
7. In which of these cases there no right of legal redemption?
a. Where a co-owner of an undivided immovable sells his Interest to a third person
b. Where the owner of a rural property one hectare or less sells his property to a
third person who owns other rural land or lands
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c. Where the owner of urban land which is so small and so situated that it cannot
be used for a practical purpose sells the same to a third person
d. Where the co-owner of an undivided interest to a third person
8. RR the representative of AA, an absentee, sold the corn with a value of P30, 000 and
the oalay with a value of P50, 000 harvested from AA's agriculture farm for a total price
of P50, 000. AA, whose domicile was subsequently known, was informed of the sale
made RR. Based on the foregoing facts, which of the following statements is incorrect?
a. AA may seek payment of an additional P30, 000 to recover the danages
suffered
b. AA may just seek rescission of the sale of the corn to recover danages he
sustained
c. AA may seek rescission of the sale of the part of the rice to the extent of the
danages he sustained
d. AA may seek the rescission of the total sale recover for the danages he
sustained
9. Seller and buyer orally entered into a contract whereby seller sold his one year
production of eggs in his poultry farm to buyer for P150, 000 which amount
immediately gave in cash to seller. The contract between seller and buyer is:
a. Void because the object was not existing at the time of execution of the
contract
b. Valid because future things may be the object of contract
c. Rescissible because buyer will likely suffer damage if the eggs do not come into
excistence
d. Unenforceable because the contract was not in writing
10. The justified refusal of the buyer to accept the goods produces the following effects,
except
a. Buyer has no duty to return the goods unless otherwise stipulated
b. Title to the goods does not pass on to him
c. Buyer shall not be obliged to pay the price
d. Buyer is obliged to constitute himself as depositary until he returns the goods
11. This refers to implied warranty on the part of the seller that he has the right to sell the
thing at the time when Ownership is to pass , and that the buyer from that time shall
have and enjoy legal and peaceful possession of the thing.
a. Warranty against hidden defects
b. Warranty against eviction
c. Warranty of Ownership
d. Warranty of possession
12. Goods still in transit:
a. If the buyer or his agent obtains delivery of the goods before their arrival at the
appointed destination
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b. When the carrier acknowledges possession of the goods as bailee for the buyer
after arrival of the goods at the place of destination
c. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer
or his agent
d. If the goods are rejected by the buyer, and the carrier or other bailee continues
in possession of them, even if the seller has refused to receive them back.
13. . Somera sells to Buen at P50 per gallon 300 gallons of gasoline stored in his truck's tank
which unknown to the parties contains 500 gallons gasoline. What is the status of the
contract of sale between Somera and Buen?
a. The sale is Void because the quantity is more than the quantity sold.
b. The sale is Valid up to 500 gallons of gasoline,.
c. The sale is Valid up to 300 gallons of gasoline. Buen becomes the owner of 3/5
of the whole stock while Somera becomes the owner of 2/5 thereof
d. The sale is Rescissible because Somera will suffer a lesion of more than 1/4 of
the value of the whole stock
14. Cory transferred to Doris a parcel of land for the price of P100, 000, P30, 000 to be paid
in cash and for the difference, she will convey the car worth P70, 000. What kind of
contract is this?
a. Lease of contract
b. Contract of sale
c. Obligation to sell
d. Barter
15. Baldo bought a residential house and lot from Tierra Madre Realty for P250, 000 giving
a down payment of P10, 000 and promising to pay a balance of P240, 000 in 20 years
in monthly installments of P1, 000. After paying 72 installments, Baldo defaultedin the
payment of the 73rd installments and subsequent ones. Despite the grace period he
had earned, he was not able to make any further payments. Accordingly, Tierra Madre
Realty cancelled the sale. How much cash surrender value is Baldo entitled to receive?
a. P45, 100
b. P39, 600
c. P34, 600
d. P41, 000
16. S sold to be a residential lot said to be containing an area of 1, 000 square meters at
P10, 000 per square meter. In This connection, which of these is a correct statement?
a. If the lot should contain 1, 500 square meters, B can reject the excess of 500
square meters, but if he accepts, B should pay for the excess at the contract
rate of P10, 000 per square meters.
b. If the lot should contain 950 square meters only, B can only ask for a
proportionate reduction of the price but not rescission.
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c. If the lot should contain 900 square meters, B can choose between
proportionate reduction of the price or rescission of the sale.
d. All of the above
17. One of the following is not a remedy granted to an unpaid seller:
a. Right of stoppage in transitu
b. Right of lien over the goods
c. Right of resale
d. Right to demand a security for the payment of the price
18. Three of the following are the characteristics of a contract of sale. Which is the
exception?
a. Onerous contract
b. Commutative contract
c. Accesory contract
d. Bilateral contract
19. In which of the following is there are no Warranty against hidden defects?
a. In a sale by description
b. In a sale by sample
c. In a sale of things sold as second hand
d. In a sale of goods recovered by a patent
e. Both C and D
20. Within What time should be the action to a proportionate reduction of the price or
rescission be filed if the object is immovable property?
a. Within 40 days from delivery
b. Within 6 months from delivery
c. Within 1 year from delivery
d. Within 4 years from delivery

Negotiable Instrument
1. I. An antedated or a post-dated instrument is valid, and it does not lose its negotiability
character just because it is antedated or post-dated, provided this is not done for an
illegal or fraudulent purpose.
II. An instrument where no time for payment is expressed is payable on demand.
a. True, True
b. False, False
c. True, False
d. False, True
2. I. Where the instrument is not dated, it will be considered to be dated as of time it was
issued.
II. The liability of an indorser is primary.
a. True, True
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b. False, False
c. True, False
d. False, True
3. I. There is payment when a negotiable instrument is delivered and accepted by the
creditor.
II. Creditors are bound to accept checks in payment of the debtor’s obligation.
a. True, True
b. False, False
c. True, False
d. False, True
4. I. Where the instrument is payable to order, the payee must be named or otherwise
indicated therein with reasonable certainty.
II. A check if certified by a bank on which it is drawn, such certification is equivalent to
acceptance, where the holder procures a check to be certified or accepted the drawer
and all indorsers are discharged from liability thereon.
a. True, True
b. False, False
c. True, False
d. False, True
5. I. Where the instrument is negotiated back to a prior party, such as a party may reissue
and further negotiate the same but he is not entitled to enforce payment thereof
against any intervening party to whom he was personally liable.
II. The holder may at any time strike out any indorsement which is not necessary to his
title. The indorser whose signature is struck out, and all subsequent indorsers, are
hereby relieved from liability on the instrument.
a. True, True
b. False, False
c. True, False
d. False, True
6. I. The bank is not liable to the holder, unless and until it accepts.
II. A check is required to be presented for payment within reasonable time after its
issue or the drawer will be discharged from liability thereon to the extent of the loss
caused by the delay.
a. True, True
b. False, False
c. True, False
d. False, True
7. I. Every negotiable instrument is deemed a prima facie to have been issued for a
valuable consideration, and every person whose signature appears thereon to have
party thereto for value.
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II. An instrument which is payable to bearer is negotiated by mere delivery.

a. True, True
b. False, False
c. True, False
d. False, True
8. I. An accommodation party is liable on the instrument to a holder for value,
notwithstanding such holder at the time of taking the instrument knew him to be only
an accommodation party.
II. A signature by “procuration” operates as notice that the agent has a limited authority
to sign, and the principal is bound only in case the agent in so long doing within the
actual limits of his authority.
a. True, True
b. False, False
c. True, False
d. False, True
9. I. The liability of an acceptor is secondary
II. The drawer’s liability is primary
a. True, True
b. False, False
c. True, False
d. False, True
10. I. Absence or failure of consideration is a matter of defence as against any person not
a holder in due purpose.
II. The indorsement or assignment of the instrument by a corporation or by infant
passes the property therein, notwithstanding that from want of capacity the
corporation or infant may occur no liability thereon.
a. True, True
b. False, False
c. True, False
d. False, True
11. I. An order or promise to pay out of a particular fund is not negotiable.
II. An order or promise to pay is unconditional through coupled with an indication on
particular fund out of which reimbursement is to be made, or particular account to be
debited with the amount.
a. True, True
b. False, False
c. True, False
d. False, True
12. I. The following instrument is negotiable:
“Please pay to Jose Santos or bearer the sum of P60, 000”
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(Sgd. Pedro Gil)

II. Fraud in inducement is a real defense.
a. True, True
b. False, False
c. True, False
d. False, True
13. I. An infant or minor’s indorsement is void.
II. In the hands of a holder in due course, valid delivery of negotiable instrument is a
disputable presumption.
a. True, True
b. False, False
c. True, False
d. False, True
14. I. A drawee can be holder in due course.
II. Material alteration just like forgery voids the instrument against any party as arule.
a. True, True
b. False, False
c. True, False
d. False, True
15. I. Where it cannot be determined in what capacity a person signed a promissory note,
he is deemed a maker.
II. If a note for P10, 000 payable to the order of B is endorsed by B is endorsed by B in
favour of C or D, such endorsement is valid.
a. True, True
b. False, False
c. True, False
d. False, True
16. This check has drawn on its face two transversal parallel lines the effect of which is that
the check cannot be encashed but only be deposited.
a. Cashier’s check
b. Certified check
c. Crossed check
d. Memorandum check
17. Who among the following is the holder of a negotiable instrument originally payable to
order?
a. The original payee who has negotiated the instrument
b. The indorsee who is in possession of the instrument
c. The possessor of the instrument to whom the instrument was delivered without
any indorsement
d. The indorsee who has negotiated the instrument.
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18. If the drawer and the drawee are the same person, the holder may present the
instrument for payment without need of a previous presentment for acceptance. In
such a case, the holder treats it as
a. Non-negotiable instrument
b. Promissory note
c. Letter of credit
d. Check
19. Under the NIL, if the holder has a lien on the instrument which arises either from a
contract or by implication of law, he would be a holder for value to the extent of
a. His successor’s interest
b. His predecessor’s interest
c. The lien in his favour
d. The amount indicated on the instrument’s face
20. In a signature by procuration, the principal is bound only in case the agent acted within
the actual limits of his authority. The signature of the agent in such a case operates as
notice that he has
a. a qualified authority to sign
b. a limited authority to sign
c. a special authority to sign
d. full authority to sig
Pledge
1. Ben pledged his watch to V.Y Domingo Agencia for P5, 000. On due date, Ben failed to
redeem his watch. The pawnshop sold the watch at a public auction to the highest
bidder at P4, 000.
a. The pawnshop can recover the deficiency of P1, 000 from Ben.
b. The pawnshop cannot recover the deficiency of P1, 000 unless there is a
stipulation.
c. The pawnshop cannot recover the deficiency of P1, 000 even if there is a
stipulation.
d. The pawnshop can recover the deficiency of P1, 000 even without stipulation.
2. This is a stipulation in pledge or mortgage providing that the ownership of the thing
given as security will pass to the pledgee or mortgagee upon default of the debtor.
a. Constitutum possesorium
b. Pactum commisorium
c. Legal Subrogation
d. Redemption
3. D borrowed P30,000 from C. To secure the debt, D pledged his ring, wristwatch, and
necklace. Before the debt could be paid, C died having X, Y, and Z as heirs. By agreement
among the heirs who inherited the credit, the ring would secure the share of X of the
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credit, the wristwatch the share of Y, a necklace the share of Z. Later, D pays X P10,
000.
a. D can demand the extinguishment of the pledge of the ring
b. X may release the pledge of the ring
c. The pledge of the ring will remain until the shares of Y and Z are paid by D.
d. D can demand the extinguishment of the pledge of the ring, wristwatch and
necklace because has been partial payment.
4. Cesar pledged his Toyota car to Dan for P100, 000. Cesar was unable to pay the
obligation two (2) months after the obligation became due and demandable.
Wherefore, Dan sold the car at public auction for P80, 000. Can Dan recover the
deficiency of P20, 000 from Cesar?

1st answer: No, he cannot recover the deficiency even if there is a stipulation that he
can.
2nd answer: Yes, he can recover the deficiency even without stipulation.
a. 1st answer correct, 2nd answer wrong
b. Bothe answers are wrong
c. 1st answer wrong, 2nd answer correct
d. Both answers are correct
5. The debtor/pledger has the following rights, except:
a. To ask for the return of the thing pledged after he has paid the debt, its
interests, and with expenses in a proper case.
b. To continue to be the owner of the thing pledged unless it is expropriated.
c. To require the deposit of the thing with a third person if it is in danger of being
impaired or lost through the negligence or wilful act of the pledgee.
d. To alienate the thing pledged without the consent of the pledgee.
6. D pledged his computer to secure a loan which he obtained from C. The debt which
amounts to P10, 000 is due after 60 days. Before the due date, C executed an
instrument abandoning the pledge.

I. D’s debt of P10, 000 is extinguished

II. The pledge of the computer is extinguished even if D has not yet accepted the
renunciation of the pledge
III. The pledge is not extinguished until C returns ring to D.
IV. The pledge is extinguished even if C has not returned the ring to C.
a. I and III c. I and II
b. II and IV d. II and III
7. A, B and C obtained a loan from X in the amount of P60, 000. To secure the debt, A
pledged his wristwatch, B, his necklace; and C, his diamond ring. A pays his share of the
debt amounting to P20, 000.00
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I. The obligation of A, B and C is solidary

II. The obligation of A, B and C is joint
III. A may demand the return of the wristwatch after payment of his share of the debt.
a. I and II are true c. I and III are false
b. II and III are true d. II and III are false
8. D pledged his 100 shares of stock of San Miguel Corporation to C to secure his debt of
P5, 000. On due date, D was not able to pay the debt, so C caused the sale of the shares
to sell at auction. The shares of stock were sold at P4, 500.
a. To extinguish the obligation, C may recover the deficiency of P500.00 from D if
there is a stipulation to that effect
b. To extinguish the obligation, C may recover the deficiency even if there is no
stipulation to that effect
c. The obligation is extinguished even if there is a deficiency of P500.00.
Accordingly, C can no longer recover the deficiency
d. The obligation is extinguished only if the proceeds of sale amount to P5, 000 or
more.
9. This refers to the right of a person to retain a thing until he receives payment of his
claim in the cases provided by law such as one who has executed work on a movable.
a. Conventional pledge c. Legal pledge
b. Voluntary pledge d. Chattel mortgage
10. In a contract of pledge, the pledgee/creditor may do the following, except to
a. Use the thing pledged for purposes of preservation.
b. Retain the thing pledged until the principal obligation is satisfied.
c. Ask for a substitute if he was deceived on the substance or quality of the thing
pledged.
d. Sell the thing pledged without notice to the pledger/debtor.
11. Consider the following cases:
I. D owes C P10,000. To secure the debt, D pledged his cell phone. D defaults. The Cell
phone is sold for P9,000 at the public auction.

II. D bought a car for P360,000 from C. The price, which is payable in 12 equal monthly
installments of P30,000, is secured by a chattel mortgage on the car. After paying 2
installments, D defaults in the payment of 3 installments and the car s sold at the public
auction for P280,000.

The deficiiency is recoverable in

a. Both I and II
b. I only
c. II only
d. No deficiency is recoverable in both I and II
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PRTC

12. Mary Montes and Melany Manalo obtained a loan of P100,000 from Patricia Palma.
The debtors executed a promissory note which reads as follows:

WE PROMISE TO PAY PATRICIA PALMA OR ORDER P100,000 ON APRIL 30, 2016

(Sgd. ) Mary Montes (Sgd. ) Melany Manalo

To secure the loan, Mary Montes pledged her diamond ring, while Melany Manalo
executed a mortgage on her lot.
a. Mary Montes may demand the return of her diamond ring if she pays her share
of the debt, while Melany Manalo’s share remains outstanding.
b. Melany Manalo may demand the cancellation of the mortgage on her lot if she
pays her share of the debt, while Mary Montes’ share remains outstanding.
c. Both Mary Montes and Melany Manalo must pay the total amount of the debt
before Mary Montes could demand the return of the diamond ring, and Melany
Manalo the cancellation of the mortgage on her lot.
d. Patricia Palma may demand payment of the amount of P100,000 from either
Mary Montes or Melany Manalo.
13. The creation of a lien on the property upto which, it is imposed whichever may the
possesor of the property, to the fulfillment of the the obligation for whose security it
was constittuted refers to the characteristic of a real mortgae being:
a. An accesory contract
b. An indivisible contract
c. An inseparable contract
d. A real property in itself
14. One of the following is not a characteristics of pledge and mortgage
a. Accesory
b. Consensual
c. Gratuitous
d. Onerous
15. Pledge and mortgage are accessory contracts because they
a. Are meant to secure the fulfillment od of a principal obligation
b. Cannot exist if the principal obligation is void
c. Can exist by themselves
d. Cannot secure fulfillment of rescissible obligation
16. Which of the following statements regarding pledge is not correct?
a. A pledge cannot be constituted unless the thing pledged be placed in the
possession of the creditor
b. Pledge is a real contract because it is perfected by delivery of the thing pledged.
c. Pledge is an accesory contract because it needs a principall oblication to exist.
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d. A pledge cannot be constituted to secure the performance of a voidable or

unenforceable or even a natural obligation.
17. The following are essential requisites common to the contract of pledge and mortgage,
except one
a. That they are constituted to secure the fulfillment of a principal obligation.
b. That the pledgor or mortgagor is the absolute owner of the thing pledged or
mortgaged.
c. That the contract is registered with the Register of Deeds.
d. That the person constituting the contract has free disposal of his property or
that he is authorized legallly for the purpose.
18. A pledge is extinguised through any of the following except
a. Sale of the thing pledged.
b. Appropriation of the thing pledged after the thing is not sold at one public
auction.
c. Written abandonment of the thing pledged in writing.
d. Return of the thing pledged.
19. Three of the following are considered elements of contract of pledge and mortgage,
what is the exception
a. Accesory contract
b. Pledgor or mortgagor must be the absolute owner.
c. Thing pledged may be appropriated if debtor cannot pay.
d. Pledgor or mortgagor must have a free disposal of the thing pledged.
20. 1st statement. Any stipulation authorizing the pledgee to appropriate the thing pledged
is void and without effect.

2nd statement. If the thing pledged is alienated by pledger, converted by the pledgee,
the ownership and possession is transmitted to the vendee after alienation.
a. Both are true
b. Both are false
c. 1st is true, 2nd is false
d. 1st is false, 2nd is true

Mortgage
1. This is a situation in pledge or mortgage providing that the ownership of the thing given
as security will pass to the pledgee or mortgagee upon default of the debtor.
a. Constitutum possessorium
b. Pactum commissorium
c. Legal subrogation
d. Redemption
2. It is the right to redeem the property that was mortgaged after it was sold.
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a. Equity of redemption
b. Right of redemption
c. Right of subrogation
d. Right of pre-emption
3. One of the following may not be object of a real mortgage.
a. Land, buildings and construction of all kinds adhered to the soil.
b. Fertilizer actually used on a piece of land.
c. Animal houses, pigeon houses or other breeding places intended by the owner to
i.e. permanently attached to the land, including animals therein.
d. Growing fruits that have been gathered from trees planted on land.
4. Mortgages are accessory contacts because they
a. Are meant to secure the fulfilment of a principal obligation.
b. Cannot exist if the principal obligation is void.
c. Can exist by themselves.
d. Cannot secure fulfilment of rescissible obligation.
5. Real property mortgaged
a. Generally is not possessed by the creditor
b. Cannot be required by the creditor, even if he is in possession for 30 years by
prescription
c. Mortgage cannot appropriate the property for himself, even if stipulated.
d. All of the above.
6. Real mortgage
a. May guarantee future debts
b. Objects are immovable property
c. Is an accessory contract
d. All of the above.
7. X, at Y’s request, executed a Real Estate Mortgage (REM) on his (X’s) land to secure Y’s
loan from Z. Z successfully foreclosed the REM when Y defaulted on the loan but half
of Y’s obligation remained unpaid. May Z sue X to enforce his right to the deficiency?
a. Yes, but solidary with Y
b. Yes, since X’s deemed to warrant that his land would cover the whole obligation
c. No, since it’s the buyer at the auction sale who would answer for the deficiency.
d. No, because X is not Z’s debtor
8. In real estate mortgage the mortgagor can sell the mortgaged property
a. With the consent of the mortgagee in writing
b. Even without the consent of the mortgagee
c. Only with the consent of the mortgagee in writing or orally
d. All of the above
9. The following is required in order that a chattel mortgage will bind third persons
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a. The chattel mortgage must be accompanied by an affidavit of good faith and

recorded at the Chattel Mortgage Register.
b. The chattel mortgage must be in a public instrument showing the description of the
thing mortgaged and the date of the chattel mortgage.
c. It is sufficient that the chattel mortgage be in writing, public or private.
d. The thing mortgaged must be delivered to the creditor.
10. X constituted a chattel mortgage on a car (valued at Php 1 Million) to secure a P500,000
loan. For the mortgage to be valid, X should have
a. The right to mortgage the car to the extent of half its value.
b. Ownership of the car.
c. Unqualified free disposal of his car.
d. Registered the car in his name.
11. A kind of mortgage which lacks the formalities required by law but nevertheless shows
the intention of the parties to secure the debt with real property is known as:
a. Conventional mortgage
b. Voluntary mortgage
c. Equitable mortgage
d. Legal mortgage
12. A chattel mortgage may have the following as object, except:
a. Motor vehicles
b. Shares of stocks
c. Vessels
d. Floating docks and structures which are intended by their nature and object to
remain at a fixed price on a river, lake or coast.
13. Recording in the Registry of Property in the appropriate book is required for the validity
of the contract of
a. Chattel mortgage
b. Real mortgage
c. Conventional pledge
d. Antichresis
14. A real mortgage
a. Confers ownership of the mortgaged property in the mortgagee upon its
constitution
b. Creates encumbrance on real property
c. Confers ownership of the mortgaged property in the mortgagee if the principal
obligation it secures id not paid on due date
d. Confers ownership of the mortgaged property in the mortgagee upon default of
the debtor if the parties stipulated about it.
15. I. A mortgage on real property is a real property by itself.
II. Movables may be the object of real property by stipulation of the parties.
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a. True, True
b. False, False
c. True, False
d. False, True
16. One of the ff. is not a characteristic of real mortgage
a. Accessory contract
b. Real contract
c. Inseparable contract
d. Indivisible contact
17. The price stipulation by the parties to a mortgage contract below which the property
shall not be sold at public auction.
a. Market price
b. Current price
c. “Tipo” or upset price
d. Selling price
18. In general, for a chattel mortgage to be binding between the parties, the same must be
recorded in the Chattel Mortgage of the province where the
a. Mortgagor resides
b. Mortgaged property is located
c. Mortgagor resides and where the property is located
d. Mortgagor and mortgagee resides and where the property is located
19. A sale with right to repurchase differs from real mortgage in that sale with right of
repurchase
a. There is no transfer of ownership of the property
b. A security is constituted on the property
c. The contract is indivisible
d. That is generally a transfer of possession of property
20. A sworn statement attesting to the fact that the chattel mortgage is made for the
purpose of securing the obligation specified in the conditions thereof, and for no other
purpose, and that the obligation is just and valid, and one not entered for the purpose
of fraud.
a. Affidavit of good moral character
b. Affidavit of merit
c. Affidavit of good faith
d. Affidavit of trust
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Contract of Agency
1. P is the owner of a car valued at P600, 000 which neighbor A sold to T for the same
amount without being authorized by P. A turned over the proceeds to P who knowingly
received it as the consideration for the sale of his car. The relationship of agency
created between P and A is one –
a. By appointment
b. By ratification
c. By estoppel
d. By necessity
e. By operation of law
2. A, B and C validly entered into a contract of partnership for the purpose of buying and
selling car. A or B or C as partners become that agency of ABC partnership which
created –
a. By appointment
b. By ratification
c. By estoppel
d. By necessity
e. By operation of law
3. A commission agent:
a. Has the option to act in his own name.
b. Generally, cannot sell on credit.
c. May be an agente del credere if he receives guaranty commission.
d. All of the above.
4. Bears risk of collecting from the buyer the price of the sale.
a. Commission agent
b. Delegacion
c. Quisi-traditio
d. Agente del credere
5. Which of these is not an act of ownership and therefore, need not be contained in a
special power of attorney for the agent to possess the same?
a. To make payment which are in ordinary or usual course of business.
b. To effect novations which put an end to obligations contracted before the
agency.
c. To waive an obligation gratuitously.
d. To obligate the principal as a guarantor.
6. Which of these agencies is not revocable at the will of the principal?
a. If a bilateral contract depends upon the agency.
b. If the agency is the means of fulfilling an obligation already contracted.
c. Where the agency is coupled with an interest.
d. All of the above.
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PRTC

7. Mr. Principe constituted Mr. Ajente as his authorized agent to sell the former’s Lancer
car for P300, 000.00 and pay him 5% commission on the selling price. Mr. Ajente sold
the car for P320, 000.00. Mr. Agente shall remit to Mr. Principe:
a. P300,000.00
b. P320,000.00
c. P285,000.00
d. P395,000.00
8. One of the following acts may be delegated by a principal to his agent. Which is it?
a. Vote during the meeting of the stockholders of corporation where the principal
is a stockholder.
b. Attend meetings of the board of directors of a corporation where the principal
is a director.
c. Purchase a land in the Philippines of which the principal is an alien.
d. Represents the principal in a marriage ceremony where the principal is a party
to the marriage contract.
9. The following are modes of extinguishing an agency, except:
a. Death, civil interdiction, insanity or insolvency of the principal or agent.
b. Accomplishment of the purpose of the agency.
c. Expiration of the period for which the agency was constituted.
d. Continued losses on the part of the principal or agent.
10. Three of the following requires a special power of attorney. Which is the exception?
a. Accept inheritance.
b. To waive or litigation gratuitously.
c. To bond the principal in a contract of partnership
d. Making a reasonable gift to charity.
11. An agent without any express authority from the principal appointed a sub-agent to
help him carry out the agency.
a. The substitution is void.
b. The substitution is valid but the agent is the only one liable for the acts of the
sub-agent.
c. Both the agent and the sub-agent are liable to the principal for the acts of the
sub-agent under the valid substitution.
d. The substitution is valid but the substitution is the only one liable for his own
acts.
12. A passenger bus while I motion collided with another bus. Cesar, the conductor of the
bus was bodily injured. Dado, the driver, although not authorized engaged the services
of a physician in the name of the company. In here, there is an:
a. Implied agency
b. Agency by estoppels
c. Agency by necessity
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PRTC

d. All of the above

13. The principal is not liable for the expenses incurred by the agent.
a. If the agent acted in contravention of the principal’s instruction.
b. Expenses were due to the fault of the agent.
c. Agent incurred them knowing that an unfavorable result would ensure would
ensure, and the principal was not aware thereof.
d. All of the above.
14. The “power to sell” includes three of the following. Which is the exception?
a. The power to execute the necessary transfer documents.
b. The power to sell on credit.
c. The power to receive the price, unless he was authorized to solicit orders only.
d. The power to fix the place, time and mode of delivery.
15. One of the following acts requires a special power of attorney granted by the principal
to his agent. Which is it?
a. To make gift to employees in the business managed by the agent.
b. To borrow money which is urgently needed to preserve the property of the
principal under the administration of the agent.
c. To make payments for purchases in the ordinary course of the business.
d. To lease the real property of the principal to another person for more than one
year.
16. A contract of agency has the following characteristics except:
a. A consensual contract
b. An accessory contract
c. A nominate contract
d. A bilateral contract
17. When two persons contract with regard to the same thing, one of them with the agent,
and the other with the principal ,and the contracts are incompatible with each other,
ownership shall be transferred to:
a. The first purchaser in good faith
b. The first who completed the payment of the price in good faith.
c. The first who register in good faith the transaction.
d. The one who presents the oldest title who must be in good faith.
18. P, the owner of a certain car, wanted to sell the car. A learned that P was selling the
car. Without the authority of P, A sold the car in his (A’s) name to B. What is the status
of the sale of the car?
a. Valid between A and B but A must be able to transfer the ownership of the car
to B at the time of delivery.
b. Unenforceable against P because he did not authorize to sell the car.
c. Void because A was not the owner of the car at the time of sale.
d. Voidable because the sale was without the consent of P.
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PRTC

19. Phil appointed Aldo as his agent orally to sell his parcel of land for P100, 000. Five days
after, Aldo sold to Bert the parcel of land for P80, 000 by means of public instrument
executed between Aldo and Bert. What is the effect and the status of sale between
Aldo and Bert?
a. The same is valid because it was executed in public instrument.
b. The sale is unenforceable because the agent acted beyond the scope of his
authority for selling the land less than the price instructed.
c. The sale is void because the appointment of the agent is oral.
d. The sale can be ratified although the appointment of Aldo is oral, because the
sale by Aldo is in a public instrument.
20. Pablo appointed Arnold to sell the former’s car for P300, 000. Arnold sold the car to
Juan for P300, 000 but Arnold acted in his own name. After delivery, Juan inspected the
car and found hidden defects in the car. Can Juan file an action against Pablo even
Arnold acted in his own name?
a. No under “caveat emptor” let the buyer beware.
b. Yes, because this is a contract involving property belonging to principal.
c. No, because Arnold acted in his own name not of the principal.
d. No, because the contract of sale is already perfected.