Since 1977

BUSINESS LAW ATTY. ONG/LOPEZ

BL.1303-Drill 4 – Negotiable Instruments OCTOBER 2012

1. Statement 1: A person cannot be convicted of a crime of a. Maker c. Drawee

BP 22 when the check is presented more than 90 days b. Drawer d. Acceptor
from the date of the check.
Statement 2: Prejudice or damage to the complainant is 9. The separate paper attached to an instrument on which
not a requisite for the conviction of a crime under BP 22 an indorsement or acceptance of the instrument is
(Bouncing check law). written is called:
a. First statement is true; second statement is false. a. Allonge c. enclosure
b. First statement is false; second statement is true. b. Memorandum d. attachment.
c. Both statements are true.
d. Both statements are false. 10. M makes a note payable to the order of P. P indorses the
note to A, A to B, B to C, C to D, D to E, and E back to A.
2. The crime of BP 22 or the bouncing check law which Based on the foregoing, which of the following
penalize the act of making or drawing and issuing a statements is incorrect?
check without sufficient fund or credit is: a. A may renegotiate the promissory note.
a. Malum in se b. A cannot go after B, C, D and E.
b. Malum prohibitum c. B, C, D and E enjoy temporary defense if A is the
c. Neither Malum in se nor Malum prohibitum holder.
d. Both Malum in se and Malum prohibitum d. If the instrument is renegotiated by A to F, the latter
cannot go after B, C, D and E.

m
3. Statement No. 1: A check must be presented for

er as
payment within a reasonable time after its last
11. A bill of exchange to which no document is attached
negotiation.

co
when presentment for payment or acceptance is made
Statement No. 2: A bill of exchange must be presented
eH w a. Trade acceptance
for payment within a reasonable time after its last
b. Bank acceptance
negotiation.

o.
c. Clean bill of exchange
a. True, true c. False, true
rs e
d. Documentary bill of exchange
b. True, false d. False, false
ou urc

4. A general endorser is distinguished from the irregular
endorser in that a general endorser:
a. Makes either a blank or special endorsement.
b. Indorses after its delivery to the payee.
o
12. Which of the following does not discharge the
instrument?
a. Payment in due course by the accommodated party.
b. Intentional cancellation of the instrument by the

c. Is liable to the payee and subsequent parties unless holder.

aC s

he signs for the accommodation of the payee, in c. When the principal debtor becomes the holder in his
own right before maturity.
vi re

which case he is liable only to all parties subsequent

to him. d. Payment in due course by or on behalf of the
d. Answer not given principal debtor.
y

5. The distinction between acceptance for honor and 13. Presentment for acceptance of a bill of exchange is not
ed d

ordinary acceptance is that: necessary:

a. In acceptance for honor, pretest is not required while a. Where the bill is payable after sight
ar stu

in ordinary acceptance, there must be previous
protest;
b. In acceptance for honor, the acceptor is the drawee
while in ordinary acceptance; the acceptor must be a
is
b. Where the bill is drawn payable elsewhere than at
the residence or place of business of the drawee
c. Where it is payable at a certain number of days after
date
d. Answer not given

stranger to the bill;

c. In acceptance for honor, the consent of the holder is'
required while in ordinary acceptance, such consent 14. 1st-: Where to show displeasure over a bill of exchange
Th

is not required; addressed to him, the drawee destroys the same, under
d. Answer not given the law he is deemed to have accepted it.
2nd-: Where the drawer and drawee are the same person,
6. A bill of exchange may be treated as a promissory note the bill of exchange can be regarded as a promissory
sh

a. When the drawee and the payee are the same
person
b. When the drawer and the payee are the same person
c. When the drawee and the drawer are the same
person
d. All of them
7. Protest is not necessary:
a. Upon dishonor by non-acceptance of a foreign bill
appearing on its face to be such;
b. Upon dishonor by non-payment of a foreign bill
appearing on its face to be such, if not having been
previously dishonored by non-acceptance;
c. In cases of inland bills and promissory notes
d. Answer not given
8. When negotiable instrument had been dishonored by
non-acceptance or nonpayment, notice of dishonor must
be given to the following, otherwise they are discharged.
Page 1 source
This study of 3was downloaded by 100000809350765 from CourseHero.com
www.prtc.com.ph
note.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
15. Statement No. 1: A check must be presented for
payment within a reasonable time after its last
negotiation.
Statement No. 2: A bill of exchange must be presented
for payment within a reasonable time after its last
negotiation.
a. True, true c. False, true
b. True, false d. False, false
16. A party secondarily liable is discharged through any of
the following means, except by the:
a. intentional cancellation of his signature by the
holder.
b. discharge of a prior party.
c. release of the principal debtor.
on 05-21-2021 20:42:20 GMT -05:00 BL.1303drill 4

https://www.coursehero.com/file/17948363/1303-Drill-4-negotiable-instruments/
 EXCEL PROFESSIONAL SERVICES, INC.
d. extension of the time of payment which is
assented to by such party secondarily
liable.
17. Which of the following alteration is not
material?
a. An alteration which changes the medium or
currency which payment is to be made
b. An alteration which adds a place of
payment where no place of payment is
specified
c. An alteration which postpones the time of
payment
d. An alteration which substitutes the words
"or bearer" for the words "or orders"
e. None of the above
18. A promissory note as distinguished from a bill of
exchange.
a. It contains an unconditional order
m
b. The one who issues it is primarily liable
er as
c. The one who issues it is secondarily liable
d. There are three (3) parties, the drawer, the
co
payee and the drawee
eH w
19. Holder H altered the amount of a negotiable
o.
note from P10,000 to P110,000 then negotiated
rs e
the note to P.
ou urc
a. If P is holder in due course, he can require
the maker to pay P110,000
b. If P is not a holder in due course, he can
require the maker to pay only the original
o
sum of P10,000
c. P cannot require the maker to pay because
aC s
of forgery whether or not he is holder in due
v i y re
course
d. P10,000 if P is a holder in due course
20. If the drawee destroys the bill
a. The bill is considered accepted
ed d
b. The bill is considered dishonored
c. The bill is discharged
ar stu
d. The bill is cancelled
21. Manager's check may be treated and
considered a promissory note because
sh is
a. The drawer and drawee are the same
persons
Th
b. The drawee is fictitious
c. The instrument is ambiguous
d. All of the above
22. Any alteration which changes the following shall
be deemed to be material, except
a. The date
b. The sum payable, either principal or
interest
c. The time or place of payment
d. The number or the relation of the parties
e. None of the above
23. Ramos draws a bill of exchange payable to the
order of Palma. Palma presents the bill to
Page 2 of 3
BL.1303drill 4
This study source was downloaded by 100000809350765 from CourseHero.com on 05-21-2021 20:42:20 GMT -05:00
https://www.coursehero.com/file/17948363/1303-Drill-4-negotiable-instruments/
Wagan, drawee, for acceptance, and the latter
accepts it. Thereafter, Palma indorses the note
to Alunan, Alunan to Bernarte, Bernarte to
Hornedo, holder. On due date, Hornedo
presents the bill to Wagan for payment but
Wagan dishonors it claiming that Palma is a
minor. Wagan, Ramos, Alunan and Bernarte
claim that they did know that Palma was a
minor at the time that they transacted on the
instrument. Aside from Palma, who may claim
the defense of minority?
a. Ramos. c. Alunan and
Bernarte
b. Wagan. d. None of the four.
24. Jose Reyes signed a blank check, and in his
haste to attend a party, left the check on top of
his executive desk in his office. Later, Nazareno
forced open the door to Reyes’ office, and stole
the blank check. Nazareno immediately filled in
the amount of P50,000 and a fictitious name as
payee on the said check. Nazareno then
endorsed the check in the payee’s name and
passed it to Roldan. Thereafter, Roldan
endorsed the check to Dantes. Can Dantes
enforce the check against Jose Reyes?
a. Dantes cannot enforce the check against
Jose Reyes, who can raise the defense that
the check was incomplete and not
delivered, when only stolen and filled up by
Nazareno.
b. Dantes can enforce the check against Jose
Reyes because Dantes is presumed to be a
holder in due course.
c. Dantes can enforce the check against Jose
Reyes because Jose Reyes is presumed to
be negligence and therefore must suffer the
loss.
d. Dantes cannot enforce the check against
Jose Reyes because Jose Reyes can set up
personal defense.
25. A stranger to the instrument makes a material
alteration changing the amount thereof from
P100,000 to P400,000 - this act is known as
a. Forgery c. Spoliation
b. Material alteration d. All of the above
26. Statement No. 1: A check must be presented for
payment within a reasonable time after its last
negotiation.
Statement No. 2: A bill of exchange must be
presented for payment within a reasonable time
after its last negotiation.
a. True, true c. False, true
b. True, false d. False, false
27. A makes a promissory note payable to B or
order. B indorses the note to C, then C to D, D
to E and E to F, the holder in whose hands the
note is dishonored. F. notifies B, C, D and E
about the dishonor of the note and
www.prtc.com.ph
 EXCEL PROFESSIONAL SERVICES, INC.

subsequently indorses it to G. Which is not c. A check must be presented for payment

correct? within a reasonable time from its date of
a. The notice to C inures to the benefits of D, E issue, whereas a bill within a reasonable
and G. time from the date of last negotiation.
b. The notice given by F to B inures to the d. Where the check and the bill of exchange
benefits of C, D, E and G. are not presented for payment within a
c. The notice to E inures to the benefit of D. reasonable time as stated in choice (c) the
d. The notice to D inures to the benefits of E drawers are considered discharged
and G. absolutely.

28. In relation to checks and bills of exchange, 29. In this instrument a protest made by a notary is
which is not a correct statement? needed instead of a simple notice of dishonor -
a. A bill may be drawn addressed to any a. Inland bill of exchange
person as drawee, but a check can only be b. Foreign bill of exchange
addressed to a bank as drawee. c. Traveler's check
b. A check is always payable on demand d. Promissory note
whereas a bill may be made payable on
demand or at a fixed or determinable future
time.

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
v i y re
ed d
ar stu
sh is
Th

Page 3 of 3 www.prtc.com.ph
BL.1303drill 4
This study source was downloaded by 100000809350765 from CourseHero.com on 05-21-2021 20:42:20 GMT -05:00

https://www.coursehero.com/file/17948363/1303-Drill-4-negotiable-instruments/
Powered by TCPDF (www.tcpdf.org)