CPA Review School of the Philippines CREDIT TRANSACTIONS Manila DELA CRUZ 1 2. PLEDGE AND MORTGAGE S, a minor, sold her bracelet to B for P8,000. Later, B, needing money to pay her daughter's tuition fee, borrowed P15,000 from C-and as a security, pledged the bracelet to the latter. B failed to pay C resulting into the auction sale of the bracelet in favor of D for P10,000 only. Which of the following statements is comect? a, The title of B over the bracelet is not valid, hence the pledge, as well as the sale of said bracelet is likewise defective. The piedgor must be the owner of the thing pledged. b, The deficiency of PS,000n may still be recovered by C trom B if there is a stipulation to this effect c. C can no longer recover the deficiency of P5,000 from B. The pledge, together with the sale is valid. ‘The voidable title of B is valid because it is not yet annalled. 4. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet from 8, ‘ownership will not pass to him (D). fn the preceding number, assuming what was executed by B in favor of C was a valid chattel mortgage which was eventually foreclosed and the bracelet was sold to D at the public auction for the same ‘amount, which statement is comect? a. The title of B over the bracelet is not valid, hence the chattel mortgage, as well as the sale of said ‘bracelet is likewise defective. The mortgagor must be the owner of the thing mortgaged. b, The deficiency of P5,000 may stil! be recovered by C from B ¢. C can no longer recover the deficiency of P5,000 from B as the mortgage, together with the foreclosure sale, was valid. The title of B was still valid 4. If D was a purchaser in bad faith as he knew of the defective title of B over the bracelet, ownership will not pass to him (D). S sold to B a specific car for P200,000 payable in four equal installments. S delivered the car to B but required B to mortgage it back to S to answer for the unpaid installments. B paid the 1 and 2° installments but he failed to pay the balance, § foreclosed the mortgaged property and sold it at public auction for P80,000. As a result, a, $ ean recover from B the balance of P20,000 . S can recover from B the balance of P20,000if there is stipulation to that effect c. S cannot recover the deficiency any more even if there is stipulation to that effect dS cannot recover the deficiency except if there is stipulation. 4, Elements of contracts of pledge and mortgage, except a. Pledgor or mortgagor mast be the absolute owner b. Pledgor or mortgagor must have the free disposal of the thing pledged c. The thing pledged or mortgaged may be appropriated if the debtor cannot pay 4d. Pledge and mortgage are accessory contracts A borrowed P100,000 ftom B with A’s ring given to B by way of pledge. It was stipulated that in case of non-payment on due date, the ring would belong to B. This forfeiture is a. caveat emptor c. pactum commisorium ', dacion en pago d., pacto de retro A borrowed P100,000 from B, and as a security. A pledged his ring to B. After the obligation falls due, A {goes fo B relinquishing ownership of the ring in favor of B. This is ‘a. caveat emptor . pactum comisorio b. dacion en pago d. pacto de retro A borrowed P30,000 from B, and as security, he pledged his ring, pair of earrings and necklace. On due date, A paid P20,000. As a result, ‘a, A can demand the retura of one (1) of the things pledged b. Accan demand the return of any two (2) of the things pledged | ¢. Aca demand the return of the ring . A cannot demand the retum of any of the things pledged8. Which of the following is not correct as regards pledge and mongage? a. The creditors can foreclose the things pledged or mortgaged in case of non-payment of the obligation bs. The things pledged or mortgaged are delivered to the creditors to seoure the fulfillment of the obligation . ¢. In case of default, the creditors cannot appropriate the things pledged or mortgaged even if stipulated 4. A pledge or mortgage cannot exist without a valid obligation . 9. In real estate mortgage, the mortgagor can sell the property mortgaged a. Only if with the oral consent of the mortgagee b. Only if with the written consent of the mortgagee ©. Ifnot prohibited to sell 4d. Even without the consent of the mortgagee 10, Which of the following statements is true? a. Any stipulation in a contract of pledge authorizing the pledgec to sell the thing pledged if the pledgor cannot pay is void , In mortgage, the mortgagee is entitled to the entire proceeds of the sale of the thing mortgaged c. In morigage and in pacto de retro sale, the ttle to the property which is the subject matter of the contract is transferred to the other party 4. Real estate mortgage is an accessory contract 11, A mortgaged his residential land to B as a guarantee for the payment of P400,000 obligations to B. They agreed that A should not sell the land while the obligation exists. Before the maturity of the mortgage, C offered to buy the land from A. Which is correct? a. A cannot sell the land to C because of the agreement not to sell . A can sell the land to C only if B consents in writing” c Accan sell the land to C despite the agreement aot to sell d. A cannot sell the land to C unless A pays the obligation PLEDGE For numbers 12 to 37 write a. both are true. both are false c. only the first is true. only the second is true 12. ‘The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them, except if there is a Stipulation to the contrary. The indivisibility of a pledge or mortgage is affected by the fact that the debtors are solidarily liable. a. both are true ’b. both are false. only the first is truce d. only the second is true 13, A pledge or morgage is indivisible, except if the debt may be divided among the successors in interest of the debtor or of the creditor. In case of pledge of animals, their offspring shall pertain to the pledgec of the animals, a. both are ue b. both are false. only the first is true 4. only the second is true 14. The creditor can use the thing pledged even without the authority of the pledgor. If through the negligence or willful act of the pledge, the thing pledged is in danger of being lost or impaired, the pledge may cause the same to be sold at a public auction. ‘a, both are true . both are false ¢. orily the first is trac 4. only the second is true 15. If the thing pledged is returned by the pledgee to the pledgor or owner, the pledge is extinguished, except if there is a stipulation to the contrary. Hf subsequent to the perfection of the pledge, the thing is in the possession of the pledgor or owner there is a conclusive presumption that the same has been returned by the pledgee. a bothare true. bothare false ——_. only the first is true 4. only the second is true 16. A statement in writing by the pledge tbat he renounces or abandons the pledge is sufficient to extinguish the pledge only if accepted by the pledgor or owner and the thing pledged is retumed, At the public auction, the pledgee may also bid and his offer shall be valid even if he is the only bidder. 2, both are true, both are false. only the first is true d. only the second is true1, 18, 19. 21. 22. 23, 24. 2s. 26. The stle of the thing pledged shall extinguish the principal obligation provided the proceeds of the sale are equal to the amount of the principal obligation. If the price of the sale is more than the amount of the obligation, the debtor ih be entitled) to the excess, unless it is otherwise agreed. a. both are true b. both are false c. only the first is true d. only ithe second § true If the price of the sale is less than the amount of the obligation the creditor shall not be entitled to recover the deficiency except if there is a stipulation to the contrary. If two or more things are pledged, the pledgor may choose which he will cause e be sold, unfess there is a stipulation to the contrary. \ | a. both are true b, both arefaise —_c. only the first is true 4G. only! the second is true A pledge shall not take effect against third person if a description of the thing pledged and the date of the pledge do not appear in a public instrument i If after the auction sale, the thing pledged is not sold, the pledgee can appropriate the thing pledged. a. both are true b, both are false ¢. only the first is true d. nly the second is true A pledged his ring to B for P20,000, A failed to pay his obligation on time. B shid'the ring at a public auction for P16,000, B cannot recover P4,000 from A even if there is stipulation Using the same facts, if the proceeds of sale is P24,000. A can recover the Graces of P4,000 if stipulated. a. both are true b. both are false cc. only the first is true dd. only the second is true ln sale at publi auction, the pledgor or owner may be a bidder and shall have « beter right if he should offer the same terms as the highest bidder. Piedge is a real contract. a. both are true b, both are false ——_¢. only the first is true only the second is true MORTGAGE A stipulation prohibiting the owner from alienating the immovable mortgaged shall be void. ‘The equity of redemption refers to the right of the mortgagor to redeem the mortgaged property within a certain petiod of time after it was sold to a third person. & both are true b. both are false —_c, only the first is true 4. only the second is true The right of redemption refers to the right of the mortgagor to redeem the mortgaged property after his default in payment but before the sale. ‘The registration in the Registry of Property is necessary for the validity of a contract of real estate mortgage. a, both are true both are false. ¢. only the first is tue 4. only the second is true Except in case of sale of personal property in installments, if the proceeds of the sale is less than the principal obligation, the creditor-mortgagee can recover the deficiency. A borrowed P100,000 from B payable in 10 equal monthly installments, To 4echre payment of the loan, A executed a chattel mortgage on his Mercedes Benz car. if A violates the condition of the mortgage, and the car was foreclosed and sold at a public auction but the proceeds is less than the collectible amount, B cannot recover the deficiency. both are true b. both arefalse only the first is true d. only the second is true In real estate mortgage the mortgagor can sell the property mortgage even without the consent of the mortgagee In chattel mortgage the mortgagor cannot sell the thing mortgage even with the written consent of the mortgagee appearing at the back of the mortgage 2, both are tue both are false c.only the first is true ——_d. only the second is true Chattel mortgage like pledge is a real contract. In chattel mortgage like pledge the possession of the thing mortgaged is vested in the creditor. a. bothare true, botharefalse ——_c. only the first is true . only the second is true28. 30. 32. 33. 34, 38. 36. 37. LOAN | i In mutuum of loan, one of the parties delivers to another something not consumable so that tte latter may use the same for a certain ime and return it iy Mutuum is essentially gratuitous. i! d a, both are true b.bothare false. only the first is true ofly,the second if tue In commodatum one of the parties delivers money or consumable thing upon! the condition that the same amount of the same kind and quality sball be paid. i Jn commodatum and mutuum ownership of the thing loan is transferred to the yer. ‘a bothare true». bothare false c. only the first is true Ff the second is true Commodatum and mutuum involve real and personal property. 1 The bailee in commodatum acquires the use of the thing loaned and its fruits. a. both are true . both are false ¢. only the first is true «Llonty the sevend is true ‘The bailee in commodatuim ean lend or lease the object of the contract to a third f of When there are two or more bailees to whom a thing is loaned in the same contract, they are liable jointly a. botharetrue «ob. bothare false ——c. only the first is true. only the second is tue A contract whereby one person transfers the ownership of non-fungible things to another with the obligation on the part of the latter to give things of the same kind, quantity and quality shall be considered a loan, Precarium is a kind of mutuum where the bailor may demand the thing loaned at, a. botharetrue ——b. bothare false. only the first is true . ofly' the second is true DEPOSIT : An agreement to constitute a deposit is binding and is perfected ftom the moment there is meeting of minds. Movable and immovable things may be the object of judicial deposit. a, both are true b. both are false c, only the first is true d. only the second is tue A contract of deposit must be in writing, ‘The depositary can make use of the things deposited even without the express permission of the depositor. a botharetrue ib, both are false ——_¢. only the first is true 4. only the second is true Fixed, savings, and current deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan. The depositary can demand that the depositor prove his ownership of the thing deposited. 2, botharetrue —b, bothare false —_¢. only the frst is true d. only the second is ue Unless there is a stipulation to the contrary, the depositary cannot deposit the thing {vith a third person. When the depositary has permission to use the thing deposited, the contract Joses the concept of a deposit and becomes a loan or commodatum even where safekeeping is still the principal purpose.of the contract. a, both are true b. both are false, only the first is true d. only the second is true The thing deposited shall be returned with all its products, accessories and accessions, A contract of deposit is perfected from the moment there is meeting of minds. a botharetrue—b. bothare false —_c. only the first is true 4. only the second is true D deposits his money by way of a savings account with C Bank. The contract between D and C is 2, Deposit b. Agency ¢. Commodatum 4. Mure The End!!