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SALES

1. A contract whereby one of the contracting parties obligates himself

to transfer the ownership of and to deliver a determinate thing and
the other to pay therefor a price certain in money or its equivalent is
a contract of:
a. barter
b. sale
c. dacion en pago
d. mortgage

2. The following are essential elements of a contract of sale, except:

a. Consent of the contracting parties.
b. Subject matter which should be determinate.
c. Price which is certain in money or its equivalent.
d. Warranty against eviction and against hidden defects.

3. The following are the characteristics of a contract of sale, except:

a. Principal, which means that a contract of sale can stand by itself.
b. Real, which requires the delivery of the object of the contract
of sale for its perfection.
c. Onerous, where the rights are acquired in exchange of a
valuable consideration.

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d. Bilateral, which means that both parties are bound reciprocally

to each other.

4. One of the following characteristics of dacion en pago is also

a characteristics of a contract of sale. Which is it?
a. There is a pre-existing credit.
b. Obligations are extinguished.
c. There is less freedom in fixing the price.
d. Ownership of the object is transferred to the other party.

5. The following are characteristics of a contract of sale except for

one which refers to payment by cession. Which characteristics
refers to payment by cession?
a. There is no pre-existing credit.
b. The cause or consideration is the price.
c. There is more freedom in fixing the price.
d. Assignee of the property acquires the right to sell the thing
but not the ownership thereof.

6. The following items pertain to either a contract of sale or a contract

to sell.
I. Ownership of the thing sold is transferred upon delivery.
II. Ownership of the thing is transferred to the buyer at some
future time.
III. The risk of loss is on the buyer.
IV. The risk of loss is on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.

7. One of the following is not a requisite of the object of a contract

of sale. Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the ownership of the thing
at the time of sale.

8. The following items pertain to either emptio rei speratae or emptio

spei.
I. The sale of a future thing.
II. The sale of hope or expectancy.
III. The sale of a present thing.
IV. The thing sold must come into existence.

Based on the above information, which of the following is correct?

a. Items I and II pertain to emptio rei speratae.
b. Items II and III pertain to emptio spei.
c. Items II and III pertain to emptio rei speratae.
d. Items III and IV pertain to emptio spei.

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9. Santiago sells to Bermejo 500 sacks of rice at P1,000.00 per sack

from the stock then stored in the warehouse of Santiago. Unknown to
the parties, the warehouse contains only 480 sacks of rice. What is
the status of the contract between Santiago and Bermejo?
a. The sale is void since the quantity available is less than
the quantity sold.
b. The sale is valid up to 480 sacks of rice but void as to
the deficiency of 20 sacks of rice.
c. The entire sale is valid up to 500 sacks of rice. Bermejo
becomes the owner of the whole stock available and Santiago
must deliver the deficiency of 20 sacks of rice.
d. The sale is valid up to 480 sacks of rice but rescissible as to
the deficiency of 20 sacks of rice by reason of damage suffered
by Bermejo.

10. Somera sells to Buenviaje 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 Bermejo?
a. The sale is void because the quantity available is more than the
quantity sold.
b. The sale is valid up to 500 gallons of gasoline. Buenviaje
must pay for the additional 200 gallons of gasoline.
c. The sale is valid up to 300 gallons of gasoline. Buenviaje
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 lesion
of morethan ¼ of the value of the whole stock.

11. San Manuel Corporation, which maintains professional basketball

team, entered into a contract with Armstrong Rubber Company for the
latter to provide a pair of rubber shoes to the former’s two imported
basketball players, Charles Jordan and Michael Barkley. Armstrong
Rubber Company was instructed to make a pair for either or both
players in case the company did not manufacture shoes of their size.
No pair was, however, immediately available for both the players.
Charles Jordan, who is 6’5 tall and wears size 12 rubber shoes, was
given a pair the following day from the 300 pairs that Armstrong was
in the process of manufacturing for its customers at the time the
orders were received. Michael Barkley, who is 7’ tall and wears size 18
shoes, was provided three days later, with a pair that was specially
made for him since Armstrong does not make shoes of his size. What
kind of contracts were entered into for the shoes provided to the two
basketball players?
a. The contract for the pair of shoes provided to Charles Jordan is
a contract for a piece of work, while that for Michael Barkley is a
contract for sale.
b. The contract for the pairs of shoes provided to Charles Jordan is
a contract of sale, while that for Michael Barkley is a contract for
a piece of work.
c. Both contracts are contracts of sale.
d. Both contracts are contracts for a piece of work.

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12. S and B entered into a contract whereby S transferred to B a

specific car for the price of P200,000.00 while B gave to S P90,000.00
in cash and a diamond ring worth P110,000.00. The heading of the
written contract signed by the parties reads “Contract of Sale”.
a. The contract is void because the intention of the parties is
void since the value of the diamond ring is more than the
monetary consideration given.
b. The contract is a valid contract of sale as intended by the parties
regardless of whether the monetary consideration is more or
less than the value of the property consideration.
c. The contract is a valid contract of barter since the value of
the property given is more than the monetary consideration.
The intention of the parties is immaterial.
d. The contract is partly a contract of barter and partly a contract
of sale.

13. The price in a contract of sale is certain, except:

a. When the parties have fixed or agreed upon a definite amount.
b. If the price is certain with reference to another thing certain.
c. If the fixing of the price is left to the discretion of one of the
contracting parties and the price fixed is not accepted by
the other party.
d. If the price fixed is that which the thing sold would have on a
definite day or in a particular exchange or market.

14. On January 1, S orally sold to B a specific ring for P450.00.

The parties agreed that S shall deliver the ring to B on January 5,
while B shall pay the price on January 7.
a. The contract is perfected on January 5, when the ring is
delivered by S to B.
b. The contract is perfected on January 1, when the parties had a
meeting of minds on the object and the price.
c. The contract is perfected on January 7, when the price is paid,
since both parties would by then have performed their
obligations in the contract.
d. There is no perfected contract because the sale was made orally.

15. A sum of money paid, or a thing delivered upon the making of

a contract for the sale of goods, to bind the bargain, the delivery and
acceptance of which makes the final assent of both parties to the
contract.
a. Option money
b. Earnest money
c. Reservation money
d. Down payment

16. S orally offered to sell a certain diamond ring to B for

P50,000.00. B accepted the offer and to prove that he was in
earnest, he gave S P1,000.00. The parties agreed that the delivery of
the ring and the payment of the price would be made 30 days later.
On due date:
a. S may collect from B P50,000.00.
b. S may collect from B P49,000.00.
c. S cannot enforce payment because the contract was not
reduced to writing.

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d. S cannot enforce payment because there was no contract of

sale yet.

17. On June 1, 2015, S sold to B 50 units of machines which were

scheduled to arrive from Japan the following day on board the vessel
“MT Nippon Maru”. The sale was evidenced by an invoice identifying
each machine by serial number. Each machine was priced at
P10,000.00. Unknown to the parties, 30 units were damaged beyond
repair by seawater on May 31, 2015. Based on the foregoing, which
of the following statement is incorrect?
a. B may rescind the whole contract.
b. B may demand delivery of the remaining 20 units and pay
the price therefor.
c. S may require payment of the whole shipment from B since S
was not aware of the damaged caused on the machines at
the time of sale.
d. S has no option to rescind the whole contract or require payment
of the remaining 20 units.

18. It refers to the delivery of the thing sold from hand to hand
in case of movables, or the taking of the possession with respect
to immovable, in the presence and with the consent of the vendor.
a. Actual or real delivery
b. Traditio constitutum possessorium
c. Traditio longa manu
d. Traditio brevi manu

19. On May 1,2015, S sold to B through a private instrument 20

sacks of corn stored in the only warehouse of S. On May 10,2015, S
delivered the keys to the warehouse to B. The delivery made by S to
B is known as:
a. Constructive delivery by legal formalities.
b. Symbolic delivery by traditio clavium.
c. Traditio longa manu
d. Traditio brevi manu

20. Delivery of incorporeal property may be made through any of

the following means, except:
a. Execution of a public document.
b. Placing the titles of ownership in the possession of the vendee.
c. Use by the vendee of his rights, with the debtor’s consent.
d. Execution of private instrument.

21. One of the following statements on the transfer of ownership

of the thing in “sale on trail” is incorrect. Which is it?
a. Ownership of the thing is transferred to the vendee when
he signifies his approval or acceptance to the vendor.
b. Ownership of the thing is transferred to the vendee when
he does an act adopting the transaction.
c. Ownership of the thing is transferred to the vendee if the time
fixed for the return of the thing has expired and the vendee
retains the thing without giving notice of rejection or
acceptance to the vendor.
d. Ownership of the thing is transferred to the vendee
upon delivery.

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22. On March 1,2015, S sold and delivered to B a television set for

P10,000.00 “on sale or return” giving B up to March 16,2015 within
which to return the television set or pay the price. On March 10,2015,
the television set was burned through no fault of B. Based on the
foregoing, which of the following statements is incorrect?
a. B must pay the price of the television set.
b. S must bear the loss since the time for the return of
the television set had not yet expired.
c. The ownership of the television set was transferred to B
upon delivery to him.
d. B must bear the loss of the television set.

23. In one of the following cases, delivery of the goods to a carrier

for the purpose of transmission to the buyer transfers ownership to
the latter. Which one is it?
a. When by the terms of the bill of landing, the goods are to
be delivered to the seller or his agent.
b. When by the terms of the bill of landing, the goods are to be
delivered to the order of the buyer or his agent but the
seller retains the bill of landing.
c. When the seller draws a bill of exchange on the buyer for the
price of the goods and transmits such bill of exchange and the
bill of landing to the buyer to secure acceptance or payment
of the bill of exchange and the buyer dishonours the bill of
exchange.
d. When the owner does not reserve the right of possession
or ownership of the thing sold upon delivery to the carrier.

24. In a contract of sale of personal property the price of which is

payable in installments, the vendor may exercise any of the following
remedies, except to:
a. Exact fulfillment of the obligations, should the vendee fail to
pay any number of installments.
b. Cancel the sale, should the vendee’s failure to pay cover two
or more installments.
c. Foreclose the chattel mortgage on the property if the
vendee’s failure to pay cover two or more installments and
recover any deficiency after the foreclosure sale if they have
stipulated it.
d. Foreclose the chattel mortgage on the property if the
vendee’s failure to pay cover two or more installments but he
may no longer recover any deficiency after the foreclosure
sale.

25. Baldomero bought a residential house and lot from Sta. Ana
Realty for P250,000.00 giving a down payment of P10,000.00 and
promising to pay the balance of P240,000.00 in 20 years in monthly
installments of P1,000.00. After paying 72 installments, Baldomero
defaulted in 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, Sta. Ana Realty cancelled the sale. How
much cash surrender value is Baldomero entitled to receive?
a. P45,100.00
b. P39,600.00
c. P36,000.00
d. P41,000.00

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26. S stole a ring belonging to O. Subsequently, the ring was offered

for sale at a public auction where X, who was not aware that the ring
was stolen, bought it. A few weeks later, O saw the ring and
recognized it as his. Based on the foregoing information, which of the
following statements is correct?
a. O may recover the ring from X without reimbursing X since O
was unlawfully deprived of the ring.
b. O may recover the ring from X but he has to reimburse X since
X acquired title to the ring.
c. O may no longer recover the ring even if he is willing
to reimburse X.
d. X did not acquire title to the ring since the auctioneer had
no valid title thereto.

27. Where the seller of goods has a voidable title thereto, but his title
has not been avoided at the time of the sale, the buyer acquires title
to the goods. Such acquisition of title has the following requisites,
except the:
a. Buyer must have bought the goods in good faith.
b. Buyer must have bought them for value.
c. Buyer bought them without notice of the seller’s defect of title.
d. Party from whom the seller obtained the goods must ratify
the sale.

28. An unpaid seller has the following rights, except:

a. A lien on the goods or the right to retain them for the price
while he is in possession of them.
b. In case of insolvency of the buyer, a right of stopping the
goods in transitu after he has parted with the possession of
them.
c. A right of repurchase.
d. A right to rescind.

29. An unpaid seller loses his lien on the goods in the following
cases, except:
a. When he delivers the goods to a carrier or other bailee for the
purpose of transmission to the buyer without reserving the
right of ownership in the goods.
b. When the buyer or his agent lawfully obtains possession of
the goods.
c. When the seller waives his possessory lien.
d. When he has obtained judgement for the price of the goods.

30. Three of the following are the requisites in order that an unpaid
seller may exercise his right of stoppage of transitu. Which one is not?
a. The seller is unpaid.
b. The seller has not parted with the possession of goods.
c. The goods are in transit.
d. The buyer is or becomes insolvent.

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SALES

31. A contract whereby one of the contracting parties obligates himself

to transfer the ownership of and to deliver a determinate thing and
the other to pay therefor a price certain in money or its equivalent is
a contract of:
a. barter
b. sale
c. dacion en pago
d. mortgage

32. The following are essential elements of a contract of sale, except:

a. Consent of the contracting parties.
b. Subject matter which should be determinate.
c. Price which is certain in money or its equivalent.
d. Warranty against eviction and against hidden defects.

33. The following are the characteristics of a contract of sale, except:

a. Principal, which means that a contract of sale can stand by itself.
b. Real, which requires the delivery of the object of the contract
of sale for its perfection.
c. Onerous, where the rights are acquired in exchange of a
valuable consideration.

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d. Bilateral, which means that both parties are bound reciprocally

to each other.

34. One of the following characteristics of dacion en pago is

also a characteristics of a contract of sale. Which is it?
a. There is a pre-existing credit.
b. Obligations are extinguished.
c. There is less freedom in fixing the price.
d. Ownership of the object is transferred to the other party.

35. The following are characteristics of a contract of sale except for

one which refers to payment by cession. Which characteristics
refers to payment by cession?
a. There is no pre-existing credit.
b. The cause or consideration is the price.
c. There is more freedom in fixing the price.
d. Assignee of the property acquires the right to sell the thing
but not the ownership thereof.

36. The following items pertain to either a contract of sale or a contract

to sell.
V. Ownership of the thing sold is transferred upon delivery.
VI. Ownership of the thing is transferred to the buyer at some
future time.
VII. The risk of loss is on the buyer.
VIII. The risk of loss is on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.

37. One of the following is not a requisite of the object of a contract

of sale. Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the ownership of the thing
at the time of sale.

38. The following items pertain to either emptio rei speratae or

emptio spei.
V. The sale of a future thing.
VI. The sale of hope or expectancy.
VII. The sale of a present thing.
VIII. The thing sold must come into existence.

Based on the above information, which of the following is correct?

a. Items I and II pertain to emptio rei speratae.
b. Items II and III pertain to emptio spei.
c. Items II and III pertain to emptio rei speratae.
d. Items III and IV pertain to emptio spei.

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39. Santiago sells to Bermejo 500 sacks of rice at P1,000.00 per sack
from the stock then stored in the warehouse of Santiago. Unknown to
the parties, the warehouse contains only 480 sacks of rice. What is
the status of the contract between Santiago and Bermejo?
a. The sale is void since the quantity available is less than
the quantity sold.
b. The sale is valid up to 480 sacks of rice but void as to
the deficiency of 20 sacks of rice.
c. The entire sale is valid up to 500 sacks of rice. Bermejo
becomes the owner of the whole stock available and Santiago
must deliver the deficiency of 20 sacks of rice.
d. The sale is valid up to 480 sacks of rice but rescissible as to
the deficiency of 20 sacks of rice by reason of damage suffered
by Bermejo.

40. Somera sells to Buenviaje 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 Bermejo?
a. The sale is void because the quantity available is more than the
quantity sold.
b. The sale is valid up to 500 gallons of gasoline. Buenviaje
must pay for the additional 200 gallons of gasoline.
c. The sale is valid up to 300 gallons of gasoline. Buenviaje
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 lesion
of morethan ¼ of the value of the whole stock.

41. San Manuel Corporation, which maintains professional basketball

team, entered into a contract with Armstrong Rubber Company for the
latter to provide a pair of rubber shoes to the former’s two imported
basketball players, Charles Jordan and Michael Barkley. Armstrong
Rubber Company was instructed to make a pair for either or both
players in case the company did not manufacture shoes of their size.
No pair was, however, immediately available for both the players.
Charles Jordan, who is 6’5 tall and wears size 12 rubber shoes, was
given a pair the following day from the 300 pairs that Armstrong was
in the process of manufacturing for its customers at the time the
orders were received. Michael Barkley, who is 7’ tall and wears size 18
shoes, was provided three days later, with a pair that was specially
made for him since Armstrong does not make shoes of his size. What
kind of contracts were entered into for the shoes provided to the two
basketball players?
a. The contract for the pair of shoes provided to Charles Jordan is
a contract for a piece of work, while that for Michael Barkley is a
contract for sale.
b. The contract for the pairs of shoes provided to Charles Jordan is
a contract of sale, while that for Michael Barkley is a contract for
a piece of work.
c. Both contracts are contracts of sale.
d. Both contracts are contracts for a piece of work.

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42. S and B entered into a contract whereby S transferred to B a

specific car for the price of P200,000.00 while B gave to S P90,000.00
in cash and a diamond ring worth P110,000.00. The heading of the
written contract signed by the parties reads “Contract of Sale”.
a. The contract is void because the intention of the parties is
void since the value of the diamond ring is more than the
monetary consideration given.
b. The contract is a valid contract of sale as intended by the parties
regardless of whether the monetary consideration is more or
less than the value of the property consideration.
c. The contract is a valid contract of barter since the value of
the property given is more than the monetary consideration.
The intention of the parties is immaterial.
d. The contract is partly a contract of barter and partly a contract
of sale.

43. The price in a contract of sale is certain, except:

a. When the parties have fixed or agreed upon a definite amount.
b. If the price is certain with reference to another thing certain.
c. If the fixing of the price is left to the discretion of one of the
contracting parties and the price fixed is not accepted by
the other party.
d. If the price fixed is that which the thing sold would have on a
definite day or in a particular exchange or market.

44. On January 1, S orally sold to B a specific ring for P450.00.

The parties agreed that S shall deliver the ring to B on January 5,
while B shall pay the price on January 7.
a. The contract is perfected on January 5, when the ring is
delivered by S to B.
b. The contract is perfected on January 1, when the parties had a
meeting of minds on the object and the price.
c. The contract is perfected on January 7, when the price is paid,
since both parties would by then have performed their
obligations in the contract.
d. There is no perfected contract because the sale was made orally.

45. A sum of money paid, or a thing delivered upon the making of

a contract for the sale of goods, to bind the bargain, the delivery and
acceptance of which makes the final assent of both parties to the
contract.
a. Option money
b. Earnest money
c. Reservation money
d. Down payment

46. S orally offered to sell a certain diamond ring to B for

P50,000.00. B accepted the offer and to prove that he was in
earnest, he gave S P1,000.00. The parties agreed that the delivery of
the ring and the payment of the price would be made 30 days later.
On due date:
a. S may collect from B P50,000.00.
b. S may collect from B P49,000.00.
c. S cannot enforce payment because the contract was not
reduced to writing.

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d. S cannot enforce payment because there was no contract of

sale yet.

47. On June 1, 2015, S sold to B 50 units of machines which were

scheduled to arrive from Japan the following day on board the vessel
“MT Nippon Maru”. The sale was evidenced by an invoice identifying
each machine by serial number. Each machine was priced at
P10,000.00. Unknown to the parties, 30 units were damaged beyond
repair by seawater on May 31, 2015. Based on the foregoing, which
of the following statement is incorrect?
a. B may rescind the whole contract.
b. B may demand delivery of the remaining 20 units and pay
the price therefor.
c. S may require payment of the whole shipment from B since S
was not aware of the damaged caused on the machines at
the time of sale.
d. S has no option to rescind the whole contract or require payment
of the remaining 20 units.

48. It refers to the delivery of the thing sold from hand to hand
in case of movables, or the taking of the possession with respect
to immovable, in the presence and with the consent of the vendor.
a. Actual or real delivery
b. Traditio constitutum possessorium
c. Traditio longa manu
d. Traditio brevi manu

49. On May 1,2015, S sold to B through a private instrument 20

sacks of corn stored in the only warehouse of S. On May 10,2015, S
delivered the keys to the warehouse to B. The delivery made by S to
B is known as:
a. Constructive delivery by legal formalities.
b. Symbolic delivery by traditio clavium.
c. Traditio longa manu
d. Traditio brevi manu

50. Delivery of incorporeal property may be made through any of

the following means, except:
a. Execution of a public document.
b. Placing the titles of ownership in the possession of the vendee.
c. Use by the vendee of his rights, with the debtor’s consent.
d. Execution of private instrument.

51. One of the following statements on the transfer of ownership

of the thing in “sale on trail” is incorrect. Which is it?
a. Ownership of the thing is transferred to the vendee when
he signifies his approval or acceptance to the vendor.
b. Ownership of the thing is transferred to the vendee when
he does an act adopting the transaction.
c. Ownership of the thing is transferred to the vendee if the time
fixed for the return of the thing has expired and the vendee
retains the thing without giving notice of rejection or
acceptance to the vendor.
d. Ownership of the thing is transferred to the vendee
upon delivery.

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52. On March 1,2015, S sold and delivered to B a television set for

P10,000.00 “on sale or return” giving B up to March 16,2015 within
which to return the television set or pay the price. On March 10,2015,
the television set was burned through no fault of B. Based on the
foregoing, which of the following statements is incorrect?
a. B must pay the price of the television set.
b. S must bear the loss since the time for the return of
the television set had not yet expired.
c. The ownership of the television set was transferred to B
upon delivery to him.
d. B must bear the loss of the television set.

53. In one of the following cases, delivery of the goods to a carrier

for the purpose of transmission to the buyer transfers ownership to
the latter. Which one is it?
a. When by the terms of the bill of landing, the goods are to
be delivered to the seller or his agent.
b. When by the terms of the bill of landing, the goods are to be
delivered to the order of the buyer or his agent but the
seller retains the bill of landing.
c. When the seller draws a bill of exchange on the buyer for the
price of the goods and transmits such bill of exchange and the
bill of landing to the buyer to secure acceptance or payment
of the bill of exchange and the buyer dishonours the bill of
exchange.
d. When the owner does not reserve the right of possession
or ownership of the thing sold upon delivery to the carrier.

54. In a contract of sale of personal property the price of which is

payable in installments, the vendor may exercise any of the following
remedies, except to:
a. Exact fulfillment of the obligations, should the vendee fail to
pay any number of installments.
b. Cancel the sale, should the vendee’s failure to pay cover two
or more installments.
c. Foreclose the chattel mortgage on the property if the
vendee’s failure to pay cover two or more installments and
recover any deficiency after the foreclosure sale if they have
stipulated it.
d. Foreclose the chattel mortgage on the property if the
vendee’s failure to pay cover two or more installments but he
may no longer recover any deficiency after the foreclosure
sale.

55. Baldomero bought a residential house and lot from Sta. Ana
Realty for P250,000.00 giving a down payment of P10,000.00 and
promising to pay the balance of P240,000.00 in 20 years in monthly
installments of P1,000.00. After paying 72 installments, Baldomero
defaulted in 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, Sta. Ana Realty cancelled the sale. How
much cash surrender value is Baldomero entitled to receive?
a. P45,100.00
b. P39,600.00
c. P36,000.00
d. P41,000.00

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56. S stole a ring belonging to O. Subsequently, the ring was offered

for sale at a public auction where X, who was not aware that the ring
was stolen, bought it. A few weeks later, O saw the ring and
recognized it as his. Based on the foregoing information, which of the
following statements is correct?
a. O may recover the ring from X without reimbursing X since O
was unlawfully deprived of the ring.
b. O may recover the ring from X but he has to reimburse X since
X acquired title to the ring.
c. O may no longer recover the ring even if he is willing
to reimburse X.
d. X did not acquire title to the ring since the auctioneer had
no valid title thereto.

57. Where the seller of goods has a voidable title thereto, but his title
has not been avoided at the time of the sale, the buyer acquires title
to the goods. Such acquisition of title has the following requisites,
except the:
a. Buyer must have bought the goods in good faith.
b. Buyer must have bought them for value.
c. Buyer bought them without notice of the seller’s defect of title.
d. Party from whom the seller obtained the goods must ratify
the sale.

58. An unpaid seller has the following rights, except:

a. A lien on the goods or the right to retain them for the price
while he is in possession of them.
b. In case of insolvency of the buyer, a right of stopping the
goods in transitu after he has parted with the possession of
them.
c. A right of repurchase.
d. A right to rescind.

59. An unpaid seller loses his lien on the goods in the following
cases, except:
a. When he delivers the goods to a carrier or other bailee for the
purpose of transmission to the buyer without reserving the
right of ownership in the goods.
b. When the buyer or his agent lawfully obtains possession of
the goods.
c. When the seller waives his possessory lien.
d. When he has obtained judgement for the price of the goods.

60. Three of the following are the requisites in order that an unpaid
seller may exercise his right of stoppage of transitu. Which one is not?
a. The seller is unpaid.
b. The seller has not parted with the possession of goods.
c. The goods are in transit.
d. The buyer is or becomes insolvent.

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AGENCY
1. A contract whereby one person binds himself to render some service
or to do something in representation or in behalf of another, with the
consent and authority of the latter.
a. Contract for lease of services
b. Contract of agency
c. Contract for a piece of work
d. Contract to sell

2. One of the following is not a characteristic of the contract of agency.

a. Consensual
b. Accessory
c. Nominate
d. Preparatory

3. P, 25 years old, appointed A, 17 years old, as his agent to sell certain

goods for P20,000.00. Thereafter, A sold the goods to B for the said
amount. P, however, learned that the price of the goods had increased to
P22,000.00 so he sought to disaffirm the sale made by A to B, and
brought an action to recover the goods from B on the ground that A’s act
was voidable, A being a minor, and hence, could not be an agent.
Decide.
a. The sale is valid because the principal is capable.
b. The sale is void, because A is a minor and therefore, cannot be
an agent.
c. The sale is voidable, because A is a minor.
d. The sale is unenforceable, because A exceeded his authority.

4. Pantaleon appointed Arturo as the manager of his coconut plantation

in Quezon Province. After managing the plantation for 10 years, Artuto
informed Pantaleon that on account of failing health, he, Arturo, was
turning over the administration of the plantation to Bartolome, an
experienced coconut planation administrator. Arturo also informed
Pantaleon that he had given a general power of attorney to Bartolome
and that if such authority were not sufficient, Pantaleon could send
Bartolome a new power of attorney or appoint a manager of his choice.
Pantaleon neither repudiated the designation of Bartolome nor appointed
a new agent. Instead, he allowed Bartolome to manage the plantation and
continued to receive the reports on the plantation from the latter without
any protest. Was Bartolome an agent of Pantaleon?
a. No, because Pantaleon himself, did not give a general power
of attorney to Bartolome.
b. No, because the designation of Bartolome as manager by
Arturo was without Pantaleon’s authority.
c. Yes, Bartolome became an agent of Pantaleon because
of Pantaleon’s failure to repudiate the agency.
d. Yes, because Bartolome was highly qualified to administer the
plantation.

5. One of the following acts may be delegated by a principal to his

agent. Which is it?
a. Vote during the meeting of stockholders of a corporation where
the principal is a stockholder.

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b. Attend meetings of the board of directors of a corporation where

the principal is a director.
c. Purchase land in the Philippines of which the principal is an alien.
d. Represent the principal in a marriage ceremony where the
principal is a party to the marriage contract.

6. One of the following acts requires a special power of attorney

granted by the principal to his agent. Which is it?
a. To make gifts to employees in the business managed by the agent.
b. To borrow the money which is urgently needed to preserve
then 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.

7. One of the following acts requires only a general power of attorney,

not a special power of attorney, for the agent. Which is it?
a. To bind the principal in a contract of partnership.
b. To loan money of the principal.
c. To enter into a contract by which the ownership of an immovable is
transmitted or acquired gratuitously or for a valuable
consideration.
d. To make such payments as are usually considered acts
of administration.

8. Pedro, a Filipino who was on a business trip in Timbuktu, learned that

Federico, also a Filipino, was interested in buying his lot located in
Fairview, Quezon City. To take advantage of the opportunity, he made an
overseas call to Almario, his business associate who was in Manila, to sell
the lot in his (Pedro’s) behalf, to Federico, for P1,000,000.00 cash.
Almario thus sold the lot promptly to Federico. The contract of sale was in
a public instrument which was signed by Almario in behalf of Pedro as
seller, and Federico as buyer. The said contract of sale is:
a. Valid, because it is in a public instrument and Almario was duly
authorize to represent Pedro.
b. Void, because the authority of Almario was not in the form
required by law.
c. Unenforceable, because Pedro did not sign the contract of sale
and so he had no consent thereto.
d. Rescissible, because the contract was entered into in
the representation of an absentee.

9. 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 A 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.

10. Purefine Corporation published in the Manila Bulletin that it was

appointing Armando Arcos as its duly authorized agent for the sale of
“Purofino” flour, one of its products. With the authority, Armando sold
the “Purofino” flour to various bakeshops all over Luzon. After three
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years,

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Purefine revoked Armando’s authority giving notice of revocation to

Armando and publishing a notice of revocation to Armando and
publishing a notice of revocation in the Philippine Star. Despite the
revocation, Armando still sold 50 bags of “Purofino” flour to Barbie’s
Bakeshop, a single proprietorship owned by Barbie Barredo now wants to
have the flour she ordered delivered to her by Purefine but Purefine seeks
to set aside the sale of 50 bags of flour to Barbie’s Bakeshop.
a. Purefine is not obliged to deliver 50 bags of flour because Barbie
Barredo is deemed to have known of the revocation of
Armando’s authority.
b. Purefine is obliged to deliver 50 bags of flour to Barbie Barredo
because the latter did not read the publication of the revocation
of Armando’s authority.
c. Purefine is obliged to deliver 50 bags of flour because the
revocation was not binding upon Babie Barredo since it
was published in another newspaper.
d. Purefine is not obliged to deliver 50 bags of flour because the
notice of revocation to Armando is sufficient.

11. Precision Appliances Corporation, which is based in Metro Manila,

sent a letter with a special power of attorney, to Alberto Aguado, an
agent dealing with appliances, in the latter’s office in Cebu, appointing
Alberto as the agent of Precision to sell its new appliances. The letter,
which was sent through LBC Courier Services, was duly received by
Alberto Aguado, who signed in the logbook of LBC. Alberto, however, did
not respond to the letter. Based on the foregoing data:
a. An agency was created between Precision and Alberto by
the implied acceptance of Alberto of the agency.
b. No agency was created between Precision and Alberto
because Alberto did not respond to the letter.
c. An agency was created by the ratification of Alberto when he
duly received the letter with a special power of attorney.
d. No agency was created because of the inaction of Alberto.

12. The following statements refer either to authority or

instruction given by the principal to his agent.
I. Relates to the kind of business or transaction upon which the
agent is commissioned to act.
II. Concerns the principal and the agent.
III. Refers to the mode of action by the agent in carrying out the
agency.
IV. Third persons can require the agent to present it to them since
they are chargeable with knowledge thereof.
You are to determine whether the above statements pertain to
authority or instruction.
a. I and II refer to authority.
b. I and IV refer to authority.
c. II and IV refer to instruction.
d. III and IV refer to instruction.

13. Pamela, a professional singer based in Cebu, authorized Allona,

also a professional singer, to go to Manila to look for a nightclub where
Pamela could sing. When Allona arrived in Manila, she presented
herself, not Pamela, as the singer, to the Twinkle Night Club which
engaged her

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services to sing nightly for two months at the club. Based on the foregoing
information, which of the following statements is correct?
a. Pamela has a right of action against Twinkle Night Club.
b. Twinkle Night Club has a right of action against Pamela.
c. The contract between Allona and Twinkle Night Club is valid contract
between them, not between Pamela and Twinkle Night Club.
d. The contract between Allona and Twinkle Night Club is void because
Pamela was not the party thereto.

14. Paramount Auto Corporation, an authorized dealer of Honda

cars, appointed Armando as its agent to sell the cars of the company. The
authority of Armando includes giving of a discount of P20,000.00 to
customers who pay in cash. One day, Carmina, a customer, went to the
company’s car center and told Armando that she wanted to buy a car
with a sales price of P600,000.00. However, as she only had P550,000.00,
she told Armando that she would take the car if Armando agreed to
discount of P50,000.00. Armando agreed and sold the car to Carmona at
P550,000.00 in behalf of the corporation. What is the status of the sale
made by Armando to Carmina?
a. Voidable at the instance of Paramount because it did not give
its consent to the sale at the discount of P50,000.00.
b. Unenforceable against Paramount, the Principal, because
Armando acted beyond the scope of his authority.
c. Void, because the additional discount of P30,000.00 given
by Armando was not authorized by Paramount.
d. Rescissible, because Paramount suffered damage of P30,000.00.

15. Perez gave Almendras a special power of attorney wherein it

was written that Almendras was being authorized to sell the two cars of
Perez. However, Perez and Almendras had an understanding that
Almendras should sell only one of the cars. Almendras sold the two cars
to Bernarte who was not aware of the instruction given by Perez to
Almendras.
a. Perez is bound by the sale of only one car in accordance with
his understanding with Almendras.
b. Perez is bound by the sale of two cars because that is what is
contained in the special power of attorney as written.
c. Perez is not bound at all by the sale of either one or both of the two
cars because Almendras violated the instruction given by Perez.
d. Perez will not be bound by the sale of one or both cars at his
opinion.

16. Ponciano gave a power of attorney to Alfonso for the sale of his
2 cars, a Toyota and a Lancer. Their agreement included, among other
provisions, the following: (1) Alfonso shall be entitled to a commission of
10% based on the actual selling price of the cars which Ponciano fixed at
a minimum of P400,000.00 for the Toyota; and P500,000.00 for the
Lancer; and (2) Alfonso need not to render to Ponciano any accounting of
his transaction as long as Alfonso turns over the actual selling price of the
cars net of the commission of 10%. Alfonso was able to sell the Toyota to
Teodolfo for P410,000.00; and the Lancer for P500,000.00 to Leoncio who
gave Alfonso a tip of P20,000.00. After the sale, Ponciano demanded from
Alfonso an accounting of the transactions that he had made but Alfonso
refused claiming that it was enough that he turned over the net selling
price of P810,000.00 (900,000 less 10% of 900,000.00 as commission) to
Ponciano as agreed to by the two of them. Decide.

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a. Alfonso need not render an accounting to Ponciano because

that was their agreement.
b. Alfonso must account and deliver to Ponciano only the sum
of P900,000.00.
c. Alfonso must account and deliver to Ponciano P910,000.00.
d. Alfonso must account and deliver to Ponciano P930,000.00.

17. The following statements pertain to either a commission agent

or a broker.
I. He has a relation not only with his principal, and the buyers
or sellers, but also with the property which is the object of the
transaction.
II. Maintains no relation with the thing he purchases or sells.
III. The goods are placed in his possession and disposal.
IV. He is merely an intermediary whose function is to bring
the parties to the transaction.
Determine whether the above statements pertain to commission agent
or broker.
a. I and III pertains to a commission agent.
b. I and IV pertains to a commission agent.
c. II and III pertains to a broker.
d. I and IV pertains to a broker.

18. The principal is not liable for the expenses incurred by the
agent in the following, except when:
a. although the agent acted in contravention of the principal’s
instructions, the principal wishes to avail himself of the
benefits derived from the contract.
b. it was stipulated that the agent would be allowed only a
certain sum.
c. the agent incurred them with the knowledge that an
unfavorable result would ensue, if the principal was not aware
thereof.
d. the expenses were due to the fault of the agent.

19. When two persons contract with regard to the same immovable
thing, one of them with the agent, and the other with the principal, and
the contracts are incompatible with each other, ownership shall belong to
the:
a. first purchaser in good faith.
b. one who first completed the payment of the price in good faith.
c. one who first registered in good faith the transaction.
d. one who presents the oldest title who must be in good faith.
Answer: If the ting is an immovable – ownership shall belong to: (1)
The first registrant in good faith (2) In the absence thereof, the first
possessor in good faith. (3) In the absence of both, the one who
presents the oldest title in good faith.

20. An agency is impliedly revoked in three of the following

cases. Which is the exception?
a. When a new agent is appointed for the same business
or transaction.
b. When the principal directly manages the business entrusted to
the agent, dealing directly with third persons.

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c. When a special power of attorney is granted to another

agent pertaining to a special matter involved in a
general power of attorney issued to a previous agent.
d. When the desire of the principal is help the agent
manage the business.