The contract of real estate mortgage provides that a

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contract of real estate mortgage is not notarized and not registered with Registry of Deeds. The contract of real estate mortgage provides that A is prohibited from selling the mortgaged house and in case of default of A at the maturity date of the loan, B will become the automatic owner of the mortgaged house. Which of the following statements is correct? A. A may still sell the house to third person despite the prohibition in the contract of real estate mortgage. B. B becomes the owner of the mortgaged house upon default of A. C. The contract of real estate mortgage is null and void because of the stipulation of pactum commissorium which is contrary to law and public policy. D. The contract of real estate mortgage is unenforceable because it is not in public document and not registered with Registry of Deeds 29. P borrowed P1,000 from C. P pledged and delivered his specific cellphone to C as collateral for the loan. The contract of pledge provides that C may recover the deficiency as a result of foreclosure sale. P failed to pay his obligation at the maturity date which prompted C to sell the pledged cellphone at public auction. The cellphone was sold at a price of P900. Which of the following statements is correct? A. The contract of pledge is extinguished but the contract of loan is extinguished up to P900 only. B. Pledgee P may still recover the deficiency of P100 because there is stipulation to that effect. C. The contract of pledge is not extinguished. D. Both the contract of pledge and contract of loan are extinguished by the public sale. 30. D borrowed P100,000 from C and entered into a chattel mortgage involving his land to secure the payment of his loan. D failed to pay the loan at maturity date. Which of the following statements is correct? A. The contract of chattel mortgage is null and void in so far as the contracting parties are concerned because the subject matter is a land. B. C cannot foreclose the chattel mortgage over the land because the subject matter must be a movable property. C. C may still foreclose the chattel mortgage on the land on the basis of doctrine of estoppel. D. Third person directly affected by the contract of chattel mortgage is not allowed to file an action for declaration of nullity because of relativity of contract. Page 8
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INSOLVENCY LAW 31. It refers to the financial condition of a debtor that is generally unable to pay its or his liabilities as they fall due in the ordinary course of business or financial condition of a debtor when he has liabilities that are greater than its or his assets. A. Illiquidity B. Insolvency C. Bankruptcy D. Impoverishment 32. An individual debtor possesses sufficient property to cover all his debts but he foresees the impossibility of meeting them when they respectively fall due. What is the proper petition that must be filed by such insolvent individual debtor?
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