21.

If chattel mortgage:
a. C is entitled to the excess unless there is a contrary stipulation
b. D is entitled if so stipulated
c. C is entitled even in the absence of stipulation
d. D is entitled even if not stipulated

22. A constituted in 1999 a real estate mortgage on his land and a chattel mortgage on his car
to secure the payment of a debt of P.2M which he then owed to B, as well as other loans he
may receive from him in the future. A paid his debt of P.2M but not the loan of P.03M which
he obtained in 2000. Can A foreclose both mortgages for the P.03M loan obtained in 2000?
a. No, because the mortgagee can only foreclose one of the mortgages applying the Recto
Law to prevent collection of deficiency
b. No, only the mortgage on the car can be foreclosed
c. No, only the mortgage on the land can be foreclosed
d. Yes, both mortgages

23. D mortgage his land to C with the stipulation that the former cannot sell his land before
he has paid his loan to C. D sold the land to X despite such agreement. Which of the
following is correct?
a. The contract of sale is void
b. The consent of C is necessary before D can sell the land
c. The stipulation prohibiting sale of the land is void
d. The sale is valid if the buyer was not aware of the mortgage

24. D obtained a loan from C. X pledged his car as security. Which of the following is not
correct?
a. The pledge is not valid because the debtor is not the owner of the thing pledged
b. The pledgor must be the owner of the thing pledged
c. The thing pledged must be delivered to the pledgee or a third person by common consent
of the parties
d. The pledgee does not become owner of the thing pledged upon the non-payment of the
debt

25. D pledged his bicycle to c as security for a loan with the agreement that D shall remain in
possession of the said bicycle until the loan is paid. The contract is one of:
a. Pledge b. Real mortgage
c. Chattel mortgage d. Loan only

26. The following laws principally govern chatter mortgage. Which is the exception?
a. Chattel mortgage law b. New Civil Code
c. Revised penal Code d. Constitution
27. Pledge and mortgage are accessory contracts. Which of the following statements is false?
A. They are meant to secure the fulfilment of a principal obligation.
b. They cannot exist if the principal obligation is void.
c. They can exist by themselves.
d. They can secure fulfilment, it of rescissible obligation.

28. When the debt is due and remains unpaid, can the Mortgage appropriate the mortgaged
property?

1st Answer: No, the only right of the mortgagee-creditor is foreclose the mortgage.

2nd Answer: Yes, if there is a stipulation in the mortgage contract allowing the mortgagee-
creditor to appropriate the property mortgaged.

a. 1st answer correct, 2nd answer wrong

b. 1st answer wrong, 2nd answer correct
c. Both answers are wrong.
d. Both answers are correct

29. X mortgaged his lot and house to Y as collateral for the payment of his loan obligation.
The mortgage contract stipulates that X cannot sell the property while the obligation exists.
Before the maturity of the mortgage, Z offered to buy, the property from X.
a. X cannot sell the property to Z unless he pays the loan obligation,
b. X can sell the property only if Y consent to it.
c. X cannot sell the property to Z because of the agreement not to sell while the mortgage
exists.
d. X can sell the property to Z despite the stipulation in the mortgage contract not to sell.

30. In sale of the thing pledged at public auction, which of the following statements is not
true and incorrect?
a. The sale of the thing pledged extinguished the obligation
b. The pledgor or owner has a better right if he should after the same terms as the highest
bidder.
c. lf the price of the sale is less, the pledge is entitled to recover the deficiency.
d. lf the price of the sale is more than the principal, interest and expenses, the pledgor is not
entitled to the excess.

31. Which of the following is a common requisite for Pledge and Chattel Mortgage?
a. The amount of principal and interest must be in writing.
b. The property must be in possession of the creditor.
c. To bind third person they must be duly recorded in the Office of the Register of Deeds.
d. It is constituted to secure the fulfilment of a principal obligation.

32. Pacto de retro sale as distinguished from mortgage:

a. There is redemption by payment principally of the debt.
b. There is no transfer of possession of the thing sold.
c. There is no foreclosure unless it is declared as an equitable mortgage.
d. There is no transfer of ownership of the thing sold.

33. Three of the following are essential element of a mortgage contract. Which one is not?
a. The person instituting the mortgage has the free disposal of his property.
b. The contract must be in writing.
c. The mortgagor is the absolute owner of the thing mortgaged.
d. The mortgage is constituted to secure the fulfilment of a principal obligation

34. In real mortgage, the following rules are valid, except one:
a. A stipulation in the mortgage contract prohibiting the owner from alienating immovable
mortgaged is valid.
b. The mortgagee may alienate the mortgage credit or assign to a third person in whole or
part.
c. Any stipulation allowing the mortgage creditor to appropriate the property mortgaged is
null and void.
d. lf alienation of mortgage credit is not registered, it is still valid between the parties.

35. Which of the following statements is wrong?

A, The contract of pledge gives a right to the creditor to retain the thing in his possession or
in that of a third person to whom it has been delivered, until the debt is paid.
b. lf through the negligence or wilful act of the pledge, the thing pledged is in danger of being
lost or impaired, the pledgor may require that it be deposited with a third person.
c. Any third person who has any right in or to the thing pledged may satisfy the principal
obligation as soon as the latter becomes due and demandable.
d. Third persons who are not parties to the principal obligation cannot give as security in
pledge their property to answer the principal obligation.

36. Which of the following statements is wrong?

a. In case of pledge of animals, their offspring shall pertain to the pledgor of the animal
pledged and are no longer subject to pledge, unless stipulated.
b. In case of diminution or impairment in the value of the thing pledged, without the fault of
the pledge, the same may be sold at a public sale, without notifying the pledger.
c. An unregistered chattel mortgage is valid upon the parties but void as to innocent third
persons.
d. The mortgagee has the right to take possession of the chattel mortgage upon default of the
mortgagor.

37. 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 c6nsent of the mortgagee in writing or orally
d. None of the above

38. Which of the following statements is correct?

a. lf the price of the sale is less, the pledgee is not entitled to recover the deficiency even if
there is stipulation to such effect.
b. Pledge is a consensual contract which is perfected from the time the thing pledged is
placed is placed in the possession of the creditor, or of a third person by common agreement.
c. In both chattel mortgage and pledge, the thing as security for the fulfilment of the principal
obligation is delivered to the creditor.
d. In mortgagee is entitled to the entire proceeds of the sale of the thing mortgaged.

39. The following requisites are essential to the contract of pledge and mortgage. Which is
the exception?
a. That they constituted to secure the fulfilment of a principal obligation.
b. That the pledge or mortgagee be the absolute owner of the thing pledged or mortgaged.
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. Answer not given

40. This is not a characteristic of pledge.

a. Bilateral
b. Nominate
c. Consensual
d. Real

41. Statement 1: Any stipulation authorizing the pledge to appropriate the thing pledged is
void and without effect.
Statement 2: If after the auction sale, the thing pledged is not sold, the pledge can appropriate
the thing pledged.
a. True, true
b. False, false
c. True, false
d. False, true

42. 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 orally
d. Only after paying his obligations to the mortgagee

43. In case of foreclosure of the personal property mortgaged, where such thing was
previously sold to the buyer on an installment basis and the proceeds of the sale at public
auction is less than the principal obligation. Can the creditor recover the deficiency?
Answer 1- No. The creditor is not entitled to recover the deficiency from the debtor.
Answer 2- Yes. If there is a stipulation to that effect in the contract of sale with mortgage.

a. Both answers are correct.

b. Both answers are false.
c. Only answer l" is correct.
d. Only answer 2 is correct.

44. Three of the following are considered elements of contract of pledge and mortgage; what
is the exception?
a. Accessory contract
b. Pledgor or mortgagor must be the absolute owner
c. Thing pledged may be appropriated if debtor cannot pay
d. Pledgor or mortagagor must have a free disposal of the thing pledged

45. D pledged his ring to C for P10,000. D failed to pay his obligation on time. C sold it at
public auction for P8,000.
a. C can recover the deficiency even without stipulation
b. C cannot recover the deficiency even if there is stipulation
c. C cannot recover the deficiency
d. C can recover the deficiency

46. In the preceding number, if the sale is P12,000

a. D cannot recover the excess
b. D can recover the excess if stipulated
c. D cannot recover the excess even if stipulated
d. D can recover the excess

47. Real estate mortgage

a. has for its object movables as well as immovables
b. is perfected the moment the contract is registered with the Registry of Property
c. is inseparable because the mortgage directly and immediately subjects the property upon
which it is imposed, whoever the possessor may be, to the fulfilment of the obligation for
whose security it was constituted.
d. entitles the mortgagee to the fruits of the thing mortgaged

48. D1, D2 an D3 borrowed from C P300,000, and as a security, they mortgaged their
undivided agricultural land to C. Subsequently, D1 paid C P100,000. Is the mortgage on D1’s
share of the land extinguished?
a. Yes, because the obligation of D1 on the debt is only P100,000
b. Yes, the obligation of the debtors is joint. D1 is answerable only by P100,000.
c. No, because the obligation is solidary, payment in part shall not extinguished the obligation
secured by the mortgage
d. No, because mortgages are considered indivisible, payment in part shall not extinguished
the mortgage

49. Effect of sale on the thing pledged if it is less than the principal obligation
a. Creditor cannot recover the deficiency
b. Creditor can recover the deficiency
c. Creditor can recover the deficiency if there is stipulation
d. None of the above

50. D borrowed from B P10,000. D offered his ring, by way of pledge. It was expressly
stipulated that upon non-payment of the debt on time, the ring would belong to B. This
forfeiture clause, which has traditionally not been allowed, is called:
a. Pacto de retro
b. Pacto comisorio
c. Commodatum
d. Mutuum

51. In real estate mortgage, the mortgagor can sell the mortgaged property:
a. With the consent of the mortgagee in writing
b. Even without consent of the mortgagee
c. Only with the consent of the mortgagee in writing or orally
d. None of the above

52. Real mortgage

a. may guarantee future debts
b. objects is immovable property
c. is an accessory contract
d. all of the above

53. Real property mortgaged

a. generally, is not possessed by the creditor
b. cannot be acquired by the creditor, even if he is in possession for 30 years by prescription
c. mortgagee cannot appropriate the property for himself, even if stipulated
d. all of the above

54. A thing pledged

a. even if stipulated, cannot be appropriated if debt is not paid
b is indivisible even among successors in interest
c. may guarantee the debts of another person
d. may secure all kinds of obligation, be they pure or subject to a suspensive or resolutory
condition.
e. all of the above

55. Personal properties that can be mortgaged under the Chattel Mortgage Law;
a. shares of stock
b. ungathered fruits or products
c. interest in business
d. all of the above

56. It is a contract by virtue of which the debtor delivers to creditor or to a third person a
movable, or instrument evidencing corporeal rights, for the purpose of securing the fulfilment
of a principal obligation with the understanding that when the obligation is fulfilled the thing
delivered shall be returned with all its fruits and accessions.
a. Contract of pledge
b. Contract of mortgage
c. Contract of chattel mortgage
d. Equitable mortgage

57. It is a contract whereby the debtor secures to the creditor the fulfilment of a principal
obligation, especially subjecting to such security immovable property or real rights over
immovable property in case the principal obligation is not complied with at the time
stipulated
a. Contract of pledge
b. Contract of mortgage
c. Contract of chattel mortgage
d. Equitable mortgage

58. It is a remedy available to the mortgagee by which he subjects the mortgaged property to
the satisfaction of the obligation to secure which the mortgage was given through the sale of
the property at public auction and the application of the proceeds thereof to the payment of
his claims.
a. Foreclosure
b. Forfeiture
c. Appropriation
d. Alienation

59. It is an oath in a contract of chattel mortgage wherein the parties “severally swear that the
mortgage is made for the purpose of securing the obligation specified in the conditions
thereof and for no other purpose and that the same is a valid obligation and one not entered
into for the purpose of fraud”.
a. Affidavit of mortgage
b. Affidavit of undertaking
c. Affidavit of good faith
d. Affidavit of chattel mortgage

60. The following are legal effects or consequences of mortgage. Which is the exception?
a. It creates a real right
b. The mortgagee may demand payment from any possessor of the mortgaged property
c. The mortgagee may alienate or assign the mortgage credit to a third person
d. The mortgage extinguishes the title of the mortgagor (debtor) who loses his right to dispose
of the mortgaged property.

ANSWERS:
21. D 60. D
22. C
23. C
24. A
25. C
26. D
27. C
28. A
29. D
30. C
31. D
32. C
33. B
34. A
35. D
36. A
37. B
38. A
39. D
40. C
41. C
42. B
43. C
44. C
45. B
46. B
47. C
48. D
49. A
50. B
51. B
52. D
53. C
54. D
55. D
56. A
57. B
58. A
59. C