Thursday, October 13, 2011

Credit Transactions MCQ (1-10)

1. X borrowed money from Y and gave a piece of land as security by way of mortgage. It was agreed between the parties that upon nonpayment of the loan, the land would already belong to Y. If X failed to pay the debt, would Y now become the owner of the land?

a. Y would become the owner because it was agreed upon by them based on the principle of autonomy of contracts.
b. Y would not become the owner because the agreement that he would become the owner upon default of X is against the law.
c. Y would now become the owner but with right of redemption by X.
d. Y would not become the owner if X annuls the voidable agreement.


2. Not an essential requisite of real estate mortgage:

a. Mortgagee should have free disposal of the property mortgaged, and in the absence thereof, he should be legally authorized for the purpose.
b. Subject matter of a contract must be immovable property or alienable real rights upon immovables.
c. Mortgagor is the absolute owner of the property mortgaged.
d. Constituted to secure the performance of the principal obligation.


3. A contract by virtue of which personal property is recorded in the Chattel Mortgage Register as a security for the performance of an obligation.

a. Pledge
b. Real Mortgage
c. Antichresis
d. Chattel Mortgage


4. Chattel is distinguished from pledge.

a. The excess over the amount due after foreclosure goes to the debtor.
b. The sale of the object in an auction distinguishes the obligation.
c. The delivery of the personal property is necessity.
d. The registration of the property in the Registry of Property is necessary.


5. Which of the following is not correct?

a. If the thing pledged will be returned by the pledgee, the contract of pledge is extinguished.
b. Any stipulation allowing the pledgee or mortgagee to appropriate the thing pledged or mortgaged is void.
c. In case the creditor foreclosed the chattel mortgage, he cannot recover any deficiency in case the proceeds of the foreclosure sale are less than the unpaid obligation.
d. A public document containing a clear and complete description of the property mortgaged must be registered in the Chattel Mortgage Register, otherwise, the mortgage is not void.


6. A stipulation whereby the pledgee or mortgagee automatically becomes the owner of the thing pledged or mortgaged.

a. Pactum commissorium
b. Consolidation of ownership
c. Conventional redemption
d. Consignation


7. Which of the following statements is true and correct?

a. Pledge and mortgage are accessory contracts because they cannot exist by themselves.
b. In both pledge and mortgage, the creditor is entitled to deficiency judgment.
c. Where an obligation is secured by a pledge or mortgage and it is not paid when due, the pledgee or mortgagee may dispose of the thing pledged or mortgaged if there is an agreement to that effect between the parties.
d. Unless otherwise agreed upon by the parties, the sale of the mortgaged property extinguishes in full the obligation of the mortgagor to the mortgagee.


8. The price stipulated by the parties to a mortgage contract below which the property shall not be sold at public auction.

a. Market price
b. Current price
c. "Tipo" or Upset price
d. Selling price


9. The written abandonment of the pledge produces which the of the following effects?

a. The principal obligation is extinguished.
b. The pledge remains unless the thing pledged is returned.
c. The pledge remains unless the debtor/pledgor has accepted abandonment in writing.
d. The pledgee becomes a depositary until he gives back the possession of the thing pledged to the debtor/pledgor.


10. A sworn statement attesting to the fact that the chattel mortgage is made for the purpose of securing the obligation specified in the conditions thereof, and for no other purpose, and that the obligation is just and valid, and one not entered into for the purpose of fraud.

a. Affidavit of good moral character
b. Affidavit of merit
c. Affidavit of good faith
d. Affidavit of trust


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