If the thing pledged is returned by the pledgee to the pledgor or owner, the
pledge is extinguished. Any stipulation to the contrary shall be:
a. Unenforceable
b. Void
c. Valid
d. Voidable

Void

During the existence of the Contract of Pledge, the pledgee can deposit the
thing pledged with a third person.
a. Yes. If the obligation has already been fully paid.
b. Yes. If the Pledgor deceived him/her as to the thing pledged.
c. Yes. If there is a stipulation authorizing him to do so.
d. No. the Pledgee cannot deposit the thing pledged with a third person
even if there is stipulation.

Yes. If there is a stipulation authorizing him to do so.

Elements of contracts of pledge and mortgage, except:
a. Pledge and mortgage are principal contracts.
b. Pledge and mortgage are accessory contracts.
c. Pledger or mortgagor must be the absolute owner.
d. Pledger or mortgagor must have the free disposal of the thing pledged.

Pledge and mortgage are principal contracts.

The ownership of property subject of a Contract of Pledge shall be transmitted
to the vendee or transferee as soon as _______________________.
a. Upon payment of the full selling price of the property.
b. The pledgee consents to the alienation.
c. Upon delivery of possession of the property to the Vendee or Transferee.
d. Upon fulfillment of the principal obligation for which it was instituted as
security

The pledgee consents to the alienation.

All personal properties or movables may be pledged, provided they are
susceptible of _______________?
a. Ownership
b. Appropriation
c. Registration
d. Possession

Possession

Mr. Choi executed a Real Mortgage Contract over his house and lot in favor of
Mr. Yoon to secure his obligations in the amount of Php 1,000,000.00 payable
on December 31, 2021. As part of their agreement, the possession of the
house and lot was surrendered to Mr. Yoon. Before the expiration of the term
of Real Mortgage Contract, Mr. Yoon can validly perform the following. Except?
a. Offer to buy the property of Mr. Choi at a price lower than its original
price, and appropriate the same property as his own.
b. Alienate the mortgage credit, in whole or in part, to another person.
c. Initiate the foreclosure of the property, and have it sold in a public
auction for the satisfaction of the obligation.
d. Return the physical possession of the house and lot to Mr. Choi.

Initiate the foreclosure of the property, and have it
sold in a public auction for the satisfaction of the obligation.

The following persons may be asked to pay for the fulfillment of the obligation
for which the Contract of Real Mortgage is constituted. Except?
a. The previous owner of the property before the execution of the Real
Mortgage Contract.
b. The lessee of the property who started possessing the same even prior
the execution of Real Mortgage Contract.
c. The original mortgagor of the property who subsequently sold the same
to another person during the existence of the Real Mortgage Contract.
d. A subsequent buyer of the property mortgaged.

The previous owner of the property before the
execution of the Real Mortgage Contract.

This right puts an end to the mortgage as the property is returned back to the
mortgagor after his dues are cleared.
a. Right to Return
b. Right to Redemption
c. Right to End
d. Right to Property

Right to Redemption

One of the following cannot be an object of a Real Mortgage Contract:
a. Mitsubishi Montero Sports
b. Residential Unit
c. Mango Tree
d. Fence Built over a vacant lot

Mitsubishi Montero Sports

A mortgage or pledge becomes divisible if there are two or more debts for
which the Contract of Mortgage/Pledge is constituted.
a. False. Because A Real Mortgage / Pledge Contract is divisible.
b. True. Because A Real Mortgage / Pledge Contract is generally indivisible.
c. False. Because A Real Mortgage / Pledge Contract is indivisible.
d. True. Because A Real Mortgage / Pledge Contract is generally divisible

False. Because A Real Mortgage / Pledge Contract is
indivisible.

The principal obligation is extinguished upon the sale of the thing pledged in
a public auction.
a. Yes. Provided the thing pledged is sold at an amount that is equal to or
higher to the principal obligation.
b. Yes. Provided that the public auction is with the consent of the pledgor.
c. Yes. Provided that the pledgee is able to recover the deficiency from the
pledgor or debtor.
d. Yes. Regardless of the amount for which the thing pledged is sold during
the public auction.

Yes. Regardless of the amount for which the thing
pledged is sold during the public auction.

A chattel mortgage contract may validly be imposed upon
_________________?
a. An immovable property as long as there is stipulation between the
parties.
b. Personal properties including incorporeal rights.
c. Personal properties but not including incorporeal rights.
d. A movable property and immovable property at the option of the
parties.

Personal properties including incorporeal rights

What is the effect if the thing pledged is returned to the owner or pledgor?
a. The contract of pledged remains to be valid as long as the parties agree,
and provided the obligation has not yet been fulfilled.
b. The contract of pledge will remain valid as between the parties but not
binding anymore as against third persons.
c. The contract of pledge is extinguished. Unless there is stipulation to the
contrary because return of the thing pledged is only prima facie.
d. The contract of pledge is extinguished. Any stipulation to the contrary
is void.

The contract of pledge is extinguished. Any stipulation to the contrary is void.

It is an accessory contract whereby the creditor acquires the right to receive
the fruits of an immovable property of his debtor with the obligation to apply
them to the payment of the interest, if owing, and thereafter to the principal
of his credit.
a. Antichresis
b. Real Mortgage
c. Pledge
a. b. None of the above

Antichresis

There is Criminal responsibility if the Pledgor or Mortgagor perform one of the
following:
a. By offering the thing as unencumbered which he knew were subject of
some burden.
b. By refusing to deliver the thing after the parties have already signed the
contract of mortgage or pledge.
c. By using the thing without authority of the pledgee or mortgagee of the
thing pledged or mortgaged.
d. By misrepresenting himself to be the depositary thereof.

By offering the thing as unencumbered which he knew were subject of some burden.

A Real Mortgage Contract shall primarily be governed by ________________?
a. The Chattel Mortgage Law (Act. 1508).
b. Agreement of the Parties.
c. The provisions on the Civil Code of the Philippines.
d. Mortgage Law and Land Registration Law.

Mortgage Law and Land Registration Law

Under the law on pledge, there is a prima facie presumption that the thing
pledge has been returned by the pledgee to the owner if
_______________________.
a. The property is found in possession of the pledgee.
b. The property is found in possession of the debtor.
c. The property is found in possession of a third person by common
agreement.
d. The property is found in possession of the owner.

The property is found in possession of the owner.

Upon sale of a property subject of a Contract of Pledge, the same property
shall be __________________.
a. Delivered to the transferee or vendee. Any stipulation to the contrary is
void.
b. Returned to the Owner even before the fulfillment of the obligation since
the pledgee can no longer possess the same.
c. Replaced by the Pledgor by another thing of the same kind but not of
inferior quality.
d. Retained in possession of the Creditor, or of a third person by common
agreement.

Retained in possession of the Creditor, or of a third person by common agreement.

What is an obligation of the pledgee?
a. To use the thing even without authority from the owner
b. To advise pledgor of the result of the private auction
c. To deposit the thing with a third person absent a stipulation
d. To advise pledgor of danger to the thing

To advise pledgor of danger to the thing

Mr. Kwon wants to extinguish the contract of pledge in favor of his friend, Mr.
Lee. The problem, however of Mr. Kwon is that he can no longer find Mr. Lee
for the return of the thing pledge. Mr. Boo then advised him that a statement
in writing by the pledgee renouncing or abandoning the thing pledged is
sufficient to extinguish the pledge. Is the advice of Mr. Boo correct?
a. Correct. But there must be acceptance on the part of the pledgor, and
the thing pledged is physically returned to the owner later on. The
pledgee becoming a mere depositary.
b. Correct. But the parties must both agree and sign the statement in
writing. The pledgee becoming a mere depositary.
c. Correct. But only if the obligation has already been fulfilled by the main
debtor. The pledgee becoming a mere depositary.
d. Correct. There is no acceptance necessary, and the thing pledge need
not even be physically returned. The pledgee becoming a mere
depositary.

Correct. There is no acceptance necessary, and the thing pledge need not even be physically returned. The pledgee becoming a
mere depositary.

Which of the following is the remedy of the Owner if the pledgee used the
thing without authority?
a. He may require that it be deposited to a third person by their common
agreement.
b. The owner may ask that the thing be deposited either judicially or extrajudicially.

c. He may require its return, and retain the thing with him until the
fulfillment of the obligation.
d. He may ask that the thing be returned to him upon offering another
thing of the same kind but not of inferior quality.

The owner may ask that the thing be deposited either judicially or extra-judicially.

All of the following may be considered as Pledge by operation of law. Except?
a. The depositary may retain the thing pledged as long as the fee due
him/her by reason of deposit has been fully paid.
b. A person who executed a work upon a movable property may retain the
thing as pledged until he is paid.
c. A thing which has been retained by the third person by common
agreement of the parties to secure the fulfillment of an obligation.
d. The thing is retained until the necessary expenses thereto has been
reimbursed.

A thing which has been retained by the third person by common agreement of the parties to secure the fulfillment of an obligation.

When a chattel mortgage is entered into as security for the purchase of personal property payable in installments, no deficiency judgment can be asked. Any agreement to the contrary shall be
a. Valid
b. Voidable
c. Unenforceable
d. None of the above

None of the above

Chan pledged his Rolex Watch to Jihoon. They want to know what is needed to make the said contract binding as against third persons. What will you advise them?
a. The Description of Pledge and the date of Pledge must appear in a Public
Instrument.
b. The Rolex Watch must be placed in the possession of the Creditor or of
a Third Person by Common Agreement.
c. The Contract of Pledge must be made known to all interested persons.
d. They need to record the instrument in the Registry of Deeds.

The Description of Pledge and the date of Pledge must appear in a Public Instrument.

The pledgor may alienate the thing pledged provided:
a. The owner consents to the sale
b. The pledgor consents to the sale
c. The pledgee consents to the sale
d. The price is not less than the amount of the loan

The pledgee consents to the sale

For failure to pay, the Rolex Watch of the pledgor was sold in a public auction. Assuming that the price for which it was sold is less than the amount of the principal obligation, can the Creditor still recover the deficiency?
a. Yes. If there is a stipulation.
b. No. Even with stipulation.
c. No. Even without stipulation.
d. Yes. Even without stipulation.

No. Even with stipulation.

The possession of a property in a Contract of Pledge must be placed in the
possession of the___________________?
a. Third person
b. Pledgor
c. Creditor
d. Debtor by common agreement of the parties.

Creditor

A Real Mortgage Contract extends to the following. Except?
a. Growing Fruits
b. Coconut Tree
c. Fence
d. Dividends

Dividends

How many auction/s should fail before the pledgee can appropriate the thing
pledged for himself?
a. 3
b. 2
c. 4
d. 1

2

Min borrowed P30,000 from Bong and pledged her necklace to secure the debt. Without being paid, Bong returned the necklace. Min then borrowed P10,000 from Kim and pledged the same necklace. How many contract/s of
pledge are existing?
a. One
b. None
c. Three
d. Two

One

A chattel Mortgage is a conditional sale of personal property as security of obligation, the condition being that the sale shall become void upon
_________________________.
a. The lapse of period agreed by the parties for the fulfillment of the
obligation.
b. The purchaser fulfilling his/her obligation to the seller.
c. The return of the thing mortgaged to the original owner or mortgagor
d. The seller fulfilling his/her obligation to the purchaser.

The seller fulfilling his/her obligation to the purchaser.

Can a Pledgor validly sell the thing pledged?
a. No. The Pledgor cannot sell the same as long as the principal obligation has not yet been fulfilled.
b. No. The Pledgor cannot sell the same because the possession thereof
shall remain with the Pledgee.
c. Yes. Any stipulation forbidding the Pledgor to sell the same is void.
d. Yes. But only if the pledgee gives its consent.

Yes. But only if the pledgee gives its consent.

The creditor/pledgee has the following rights, except to:
a. Use the thing pledged even without authority if such use in necessary for its preservation
b. Retain the thing in his possession until the debt is paid.
c. Automatically appropriate the thing pledged upon default of the debtor in the payment of his debt
d. Demand reimbursement of the expenses made for the preservation of the thing.

Automatically appropriate the thing pledged upon
default of the debtor in the payment of his debt

The debtor/pledgor has the following rights, except to:
a. Ask for the return of the thing pledged after he has paid the debt, its
interests, and with expenses in a proper case.
b. Continue to be the owner of the thing pledged unless it is expropriated.
c. Require the deposit of the thing with a third person if it is in danger of being impaired or lost through the negligence or willful act of the
pledgee.
d. Alienate the thing pledged without the consent of the pledgee.

Alienate the thing pledged without the consent of the pledgee.

What is the degree of care required from the Pledgee over the thing pledged?
a. Ordinary or standard diligence.
b. No specific diligence is required.
c. Extra-ordinary diligence.
d. Diligence stipulated by the parties.

Ordinary or standard diligence.

Required formalities of Chattel mortgage include:
a. A required fee of P3,000 in order to effect the validity of the chattel mortgage
b. Affidavit of good faith
c. Includes A, B, and C
d. Both A and B
e. Be registered in the Chattel Mortgage Registry of the Registry of Deeds where the mortgagor resides or if he resides outside the Philippines, in
the place where the property is situated.

Both A and B

For failure to pay, the Rolex Watch of the Pledgor was sold in a public auction for a price higher than the amount of principal obligation. Who is entitled to the proceeds in excess of the principal obligation?
a. The Debtor. Any stipulation to the contrary is void.
b. The Debtor. But only if there is a stipulation between him and the Creditor.
c. The Creditor. Any stipulation to the contrary is void.
d. The Creditor. But only if there is a stipulation between him and the Debtor.

The Debtor. But only if there is a stipulation between him and the Creditor.

An agreement prohibiting the owner from selling the property that was
mortgaged shall be ______________?
a. Valid. As long as the parties consented.
b. Void. For being pactum commissorium.
c. Binding as between the parties. But may not be enforced as against third persons unless registered in the Registry of Deeds.
d. Void. Notwithstanding any stipulation to the contrary.

Void. Notwithstanding any stipulation to the contrary

When can the debtor ask for the return of the thing pledged?
a. Upon judicial demand of the debtor.
b. Upon payment of debt and interest only.
c. Upon payment of debt, interest, and expenses
d. Upon payment of debt, interest but not expenses.

Upon payment of debt, interest, and expenses

STATEMENT I. As regards third person, the real mortgage must be recorded
in the Registry of Property
STATEMENT II. If the mortgage is not recorded in the Registry of Property, it is binding between the parties.
a. Both statements are true.
b. None of the statements is true.
c. Only second statement is true.
d. Only first statement is true.

Both statements are true.

Which of the following is not an available remedy to the Pledgee, if he/she is deceived by the Pledgor as to the substance or quality of the thing pledged?
a. He may claim another thing in its stead.
b. He may deposit the same thing to a third person even without common
agreement.
c. He may ask for the immediate payment of the entire obligation.
d. He may ask for the immediate satisfaction of the obligation.

He may deposit the same thing to a third person even without common agreement.

As a general rule, the Creditor may use the thing pledged.
a. I agree. But only if there is no stipulation to the contrary.
b. I agree. But only if majority of its use is for preservation purposes.
c. I do not agree. Even if there is stipulation allowing the Creditor.
d. I do not agree. Unless there is authority given by the Owner.

I do not agree. Unless there is authority given by the Owner.

It is a contract in which the debtor guarantees to the creditor the fulfillment of a principal obligation, subjecting for the faithful compliance therewith a real property in case of non-fulfillment of said obligation at the time stipulated
a. Real Mortgage
b. Chattel Mortgage
c. Pledge
d. Antichresis

Real Mortgage

What is the status of the Real Mortgage Contract if it is not recorded in the Registry of Deed?
a. The Contract is valid until annulled.
b. The Contract is nevertheless valid as against third persons.
c. The Contract is Void ab initio and without any legal effect.
d. The Contract is nevertheless binding between the parties.

The Contract is nevertheless binding between the
parties.

Mr. Hong pledged his Shares of Stocks to Mr. Jeon. What is the responsibility of Mr. Jeon over the dividends he will receive from the same?
a. Mr. Jeon is obliged to apply the dividends to the Interests owing to him, and whatever excess thereof shall be applied to the principal obligation.
b. Mr. Jeon is obliged to apply the dividends to the principal obligation.
c. Mr. Jeon is obliged to apply the dividends to the interests owing to him.
d. Mr. Jeon is obliged to apply the dividends to the principal obligation, and whatever excess thereof shall be applied to the interests owing to him.

Mr. Jeon is obliged to apply the dividends to the
Interests owing to him, and whatever excess thereof shall be applied to the principal obligation.

All of the following may be obliged to pay the credit secured by a Real Mortgage Contract. Except?
a. Owner of the property.
b. Principal Borrower.
c. Third person in possession of the property.
d. Mortgagee in possession of the property.

Mortgagee in possession of the property.

Mingyu pledged his dog to Seungkwan. During the existence of the contract, the Dog of Mingyu gave birth to a puppy. What is the right/obligation of
Seungkwan over the puppy?
a. Seungkwan may validly ask for the possession of the puppy of the dog
provided there is a stipulation.
b. He must retain the same even though there is stipulation to the contrary, because return of the fruits of the thing pledged to the owner may extinguish the pledge.
c. He must surrender the same to the owner, Mingyu.
d. He may retain possession thereof, and consider the same as part of the pledge.

He may retain possession thereof, and consider the same as part of the pledge.

Statement I: A chattel mortgage can only cover obligations existing at the time the mortgage is constituted.
Statement II: Since a chattel mortgage is just a security, foreclosure thereof will not prevent the mortgagee from applying any deficiency that may result after applying the proceeds of the foreclosure sale to the obligation.
a. Both statements are true.
b. Only second statement is true.
c. Only first statement is true.
d. None of the statements is true.

Both statements are true.

If the debtor or pledgor fails to pay the obligation, the thing pledged may
__________________________.
a. Be sold in a public auction provided there is a stipulation expressly allowing the creditor to do so.
b. Be retained by the Creditor as his/her own even without express agreement in the contract of pledge.
c. Be used as payment for the principal obligation in a separate and subsequent contract.
d. Be appropriated outright by the Creditor if there is a stipulation in the contract of pledge allowing the creditor to do so.

Be used as payment for the principal obligation in a separate and subsequent contract.

A contract of pledge is not effective between the contracting parties until:
a. Actual delivery of the thing pledged to the creditor or to a third person by common agreement
b. The notarization of the contract
c. Constructive delivery of the thing pledged
d. The contracting parties come to an agreement

Actual delivery of the thing pledged to the creditor or to a third person by common agreement

This refers to the right of a person to retain a thing until he receives payment of his claim in the cases provided bylaw such as one who has executed work on a movable.
a. Voluntary pledge
b. Conventional pledge
c. Chattel mortgage
d. Legal pledge

Legal pledge

Statement: I A third person who is not a party to the principal obligation may mortgage his property to secure the obligation of the debtor.
Statement II: The mortgage is not indivisible.
a. Both statements are true.
b. Only first statement is true
c. None of the statements is true.
d. Only second statement is true.

Only first statement is true

What is the right of the pledgee if the thing pledged is in danger of destruction,
impairment or diminution without his fault?
a. To surrender the thing to the Owner and hold the latter as depositary.
b. To require the Pledgor to replace the same of another thing of the same
kind but not of inferior quality.
c. To have the thing sold in a public auction.
d. To immediately ask for the fulfillment of the obligation.

To have the thing sold in a public auction.

Statement I: Pledge or mortgage may secure all kinds of obligations whetherpure or subject to suspensive/resolutory condition or even voidable,
unenforceable or natural obligations.
Statement II: That the persons constituting the pledge or mortgage have the free disposal of the property, and in the absence thereof, that they be legally
authorized for the purpose.
a. Both statements are true
b. Both statements are false.
c. Only second statement is true.
d. Only first statement is true.

Both statements are true

Who shall be liable for the loss or deterioration of the thing pledged?
a. Creditor
b. Both the creditor and debtor
c. Debtor
d. Pledgor

Creditor

Statement I: The parties may stipulate that after-acquired properties are automatically included in the real-estate mortgage.
Statement II: A deed of real estate mortgage may expressly provide that it may secure after-incurred or future obligations.
a. Only second statement is true.
b. None of the statements is true.
c. Only first statement is true.
d. Both statements are true

Both statements are true

In order to affect third persons, a real estate mortgage must be registered with the Register of Deeds:
a. Where both the mortgagor and mortgagee reside
b. Where the subject property is located
c. Where the mortgagee resides
d. Where the mortgagor resides

Where the subject property is located

Statement I: The mortgage secures only the amount stated in the mortgage deed which may be less than the amount of the principal obligation.
Statement II: A building can be separately mortgaged from the land where it stands.
a. Only first statement is true.
b. Both statements are true.
c. None of the statements is true.
d. Only second statement is true.

Both statements are true.

In legal pledge or pledge by operation of law, after payment of the debt andexpenses, the remainder of the price of the sale
a. either a or b
b. shall be delivered to the obligor
c. None of the above
d. belongs to the obligee

shall be delivered to the obligor

If the pledgor or mortgagor is not the owner of the thing pledged or mortgaged, the contract of pledge or mortgage is:
a. Void
b. Unenforceable
c. Valid
d. Voidable

Void

Who is the ultimate liable for the expenses incurred in the safekeeping of the thing pledged?
a. Third person by common agreement
b. Pledgor
c. Mortgagor
d. Pledgee

Pledgor

Which of the following is not an essential requisite of Real Mortgage?
a. That the mortgagor must also be the absolute owner of the property.
b. That the owner constituting the mortgage must have free disposal over the property.
c. That the debtor must also be the absolute owner of the property.
d. That the purpose must secure the fulfillment of a principal obligation.

That the debtor must also be the absolute owner of the property.

Kim pledged his dog to Hoshi. During the existence of the contract, the dog of Kim gave birth to a puppy. Who owns the puppy?
a. The puppy still belongs to Kim. But the same shall become subject also of the pledge if there is no stipulation.
b. The ownership over the puppy shall belong to Hoshi as long as the obligation has not yet been fulfilled.
c. The puppy shall belong to Kim if there is a stipulation. But the possession thereof shall remain to Hoshi.
d. The puppy belongs to Kim and shall be returned to him within a reasonable period of time.

The puppy still belongs to Kim But the same shall
become subject also of the pledge if there is no stipulation.

The pledgor has the same responsibility with a __________________?
a. Bailor
b. Debtor
c. Lessor
d. Mortgagor

Bailor

Which of the following may not be a valid object of a Contract of Pledge?
a. Alienable Real Rights
b. Bonds
c. Warehouse Receipts
d. Negotiable Instrument

Alienable Real Rights