SAINT JOSEPH COLLEGE

Pre-Final Exam

I. Essay. 5 points each.

Considering that this exam will be taken online and without

my supervision, I will not give credit points to any answer
that is directly copied from the book nor will there be any
credit points for answers without any explanation.
You are given one hour and 30 minutes to finish this exam
and sent them back to me either through private message
or through email. Whichever option you choose, please do
not forget to use your name and your section as your file
name.

1. D, debtor/mortgagor and C, mortgagee/creditor. The

subject matter of the mortgage is a parcel of land with
a market value of P1.8MM to secure a debt for P2.5MM.
D sold the property to T for P1.6MM. Subsequently, C
foreclosed the mortgage. The land was sold for
P1.8MM at the foreclosure sale. Is T liable to C for the
deficiency of P.200MM?

2. In the above problem, can D exercise his right to equity

of redemption?

3. A is due to leave abroad to join his family. He has

some properties in Maasin City, Southern Leyte, which
he intends to sell. However, it has been over a month
and he still did not receive any proposal from interested
buyers. B, a friend, advised him that he could enter
into a contract of agency so that his properties will
 continue to be offered for sale while he is gone. Explain
to A he concept of the contract of agency.

4. Persons who do not possess full capacity to contract

may become an agent. Why?

5. What is the effect of the absence of Affidavit of Good

Faith in chattel mortgage?

6. A borrowed money from B and as security, he pledged

and delivered a diamond ring valued at P200,000 for a
debt of P100,000. A promised to pay B by May 15,
2020. On May 16, 2020, A failed to pay his debt. Does
B become the owner of the diamond ring?

7. A was constituted by B as his agent to sell the latter’s

piece of land for P1million on instalment for three (3)
years. They agreed in the year 2016 and indeed, the
land was sold at P1million on 3-years instalment. In
January 2017, B died. What is the effect, if any, of B’s
death on the agency?

8. A, an agent acted in excess of the authority granted to

him by B, the principal. State two (2) situations when B
would still be liable.

9. P borrowed P10,000 from B. As a security of the debt,

P pledges his property located in Tagnipa, Maasin City,
Southern Leyte in favour of B. Moreover, P gives A the
power to sell the property. Can P or B revoke the
agency at any time?
10.
10. A wanted to borrow money from B. B would not
lend him any money unless he could present a
 collateral. A has an heirloom from his mother. Should
A pledge or mortgage such heirloom?
11. Is the contract of agency the same as a contract
of partnership?

12. A pledged his San Miguel Corporation shares of

stocks to B as collateral for a borrowed some of money.
Should San Miguel Corporation declare dividends, who
shall be entitled to such dividend, A or B?

13. P appointed A as her agent to sell a set of bakery

equipment for P50,000 with an ordinary commission of
10% and a guarantee commission of 15%. A is
authorized to sell on credit. A was able to sell, in behalf
of P, the bakery equipment for P50,000 to N who
issued a check dated 10 days after the sale. On the
10th day, however, the check was dishonoured by the
bank because N did not have sufficient funds for it. A
month later, X, who was ignorant of the revocation,
sold goods to A as P’s agent. Is P bound by the sale?

14. A pledged a cake mixer to B as collateral for a

debt of P10,000. Under the law, can B use such mixer?

15. A secured his obligation of P150,000 with B with

a real estate mortgage of his farm with fruit bearing
mango trees.

a) Who is entitled to the mangoes?

b) A argued with B that the mangoes are not included in

the mortgage as it is separate and distinct from the
land. Is A correct?
c) Considering that the property is mortgaged to B, can
the latter forbid A to sell the property?

d) Would your answer in No. c above be the same if the

parties stipulated that A cannot sell the land while it is
still under mortgage with B?

16. The laptop of A was delivered to B as collateral

for A’s debt of P20,000. While the laptop was with B,
the same was lost due to a flash flood. Who shall bear
the loss?

17. A borrowed P1MM from B which is secured by a

real estate mortgage of a land with value of P1.5MM. If
A fails to pay, should B judicially or extra-judicially
foreclose the land?

II. True or False. Right minus wrong. 2 points each.

Should your answer be False, please supply the
correct word/words or statement to make the
statement true.

1. If the agent acts in accordance with the orders of the

principal, the latter cannot set up the ignorance of the
agent as to circumstances where he himself was or
ought to have been aware.

2. A person is not obliged to make inquiry as to the

existence of an agency when he is dealing with an
agent.

3. When an agent acts beyond the authority given to him

by the Principal, he shall be directly liable to that
 person he contracted with as if the transaction as his
own.

4. An authority to make gifts must be through a Special

Power of Attorney.

5. An owner cannot be forbidden to sell his mortgaged

property.

6. A pledged property may be symbolically delivered.

7. In the contract of pledge, indivisibility of the things

pledge is affected by the fact that the debtors are not
solidarily liable.

8. Agency is a principal contract.

9. There is implied agency.

10. A contract of agency can be revoked at any time.