Question 1 of 692 Points

A bearer instrument is converted into an order negotiable instrument if it is specially

indorsed.

Select the correct response:

● True
● False
●

Question 2 of 692 Points

Assuming all the other requisites of negotiability are present, which of the following
instruments is not payable to bearer?

Select the correct response:

● Pay to the order of CASH.

● Pay to Pedro Padernal or bearer.
● no answer
● Pay to Pedro Padernal, bearer.
● Pay to the order of Jose Rizal, national hero.

Question 3 of 692 Points

An order instrument becomes a bearer instrument if one of the several indorsements is
an indorsement in blank.

Select the correct response:

● True
● False

Question 4 of 692 Points

Where there are several persons, not partners, primarily liable on the instrument and no
place of payment is specified, presentment must be made to them all.

Select the correct response:

 ● True
● False

Question 5 of 692 Points

Fill in the blanks:

When induced to sign a note for the price of a worthless stock which was fraudulently
represented by the payee as to its value, this is an example of fraud in inducement

Question 6 of 698 Points

Match the following items with the correct choice.

Match each item to a choice:

Act No. 2031

Negotiable Instruments Law

Act No. 2137

Warehouse Receipts Law

Republic Act. No. 386

Civil Code of the Philippines

Republic Act No. 8792

Electronic Commerce Act

Choices:

Corporation Code of the Philippines

Code of Commerce

Intellectual Property Code of the Philippines

Question 7 of 692 Points

Where the name of the payee does not purport to be the name of any person, the
instrument is payable to bearer.

Select the correct response:

● True
● False

Question 8 of 692 Points

Fill in the blanks:

Where the instrument is wanting in any material particular , the person in possession
thereof has a prima facie authority to complete it by filling up the blanks therein.

Question 9 of 692 Points

If the amount due on an instrument is payable in installments, the amount and maturity
of each installment must be stated so that the negotiable character of the instrument will
not be affected.

Select the correct response:

● True
● False

Question 10 of 692 Points

Fill in the blanks:

When a signature is forged or made without the authority of the person whose signature it
purports to be, it is wholly inoperative , and no right to retain the instrument, or to give a
discharge therefor, or to enforce payment thereof against any party thereto

Question 11 of 692 Points

Fill in the blanks:

In e-commerce law, the guiding principle is the functional equivalent approach which
means that the functions of say, a document or a signature is analyzed, and if an
equivalent exist in electronic form, then it will be adopted.

Question 12 of 692 Points

The drawer may insert in the instrument an express stipulation negativing or limiting his
own liability to the holder.

Select the correct response:

● True
● False
●

Question 13 of 692 Points

An unqualified order or promise to pay is conditional.

Select the correct response:

● If coupled with an order or promise to pay out of a particular fund.

● If coupled with an indication of a particular fund out of which reimbursement is to
be made.
● If coupled with a particular account to be debited with the amount.
● If coupled with a statement of the transaction which gives rise to the instrument.
● no appropriate answer

Question 14 of 692 Points

Which of the following is a valid address to a drawee so as to make the instrument negotiable?

Select the correct response:

● To Walter Wigbert and another drawee named Wilfred.

● To Walter Wigbert and Wilfred Wong
● To Walter Wigbert, or in his absence, Wilfred Wong.
● no answer
● To Walter Wigbert or Wilfred Wong.
●

Question 15 of 692 Points

A warehouse receipt, in a technical sense, is a negotiable instrument, similar to that of a
bill of exchange or promissory note, as the Warehouse Receipts Act declares it
negotiable.

Select the correct response:

● True
● False

Question 16 of 692 Points

In the following cases, the sum payable is not a sum certain:

Select the correct response:

● It is to be paid with accountant's fee

● It is to be paid with interest
● It is to be paid by stated installments
● It is to be paid with exchange, whether at a fixed rate or at the current rate
● no appropriate answer

Question 17 of 692 Points

When there is a conflict between the written and printed provisions of an instrument, the
printed provisions will prevail.

Select the correct response:

● True
● False

Question 18 of 692 Points

The acceptor, according to the tenor of acceptance ,admits the existence of the drawer,
the genuineness of his signature, and his capacity and authority to draw the instrument
but not as to the existence of the payee and his then capacity to indorse.

Select the correct response:

● True
 ● False

Question 19 of 692 Points

"I promise to pay Paolo or his order the sum of P 10,000.00 30 days after the death of
Mr. Williams". This is an instrument payable:

Select the correct response:

● no answer
● upon the fulfillment of a condition
● at a determinable future time
● at an indefinite time hence non negotiable
● on demand

Question 20 of 692 Points

The coverage for the electronic commerce law is limited only to commercial activities.

Select the correct response:

● True
● False

Question 21 of 692 Points

Where the instrument is paid by a party secondarily liable thereon, it is discharged

Select the correct response:

● True
● False

Question 22 of 692 Points

Fill in the blanks:

Electronic document refers to information or the representation of information, data,

figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by which a
fact may be proved and affirmed, which is received, recorded, transmitted, stored,
processed, retrieved or produced electronically.

Question 23 of 692 Points

Fill in the blanks:

A warehouse receipt is a bilateral contract which imports that goods are in the hands
of a warehouseman and is a symbolical representation of the property itself.

Question 24 of 692 Points

Mico makes a note payable to the order of Patrick. He delivers the note to Patrick with
the instruction that Patrick should keep the same until Mico has obtained the proceeds
of the loan from the bank. Patrick, however, disregarded the instruction of Mico and
indorsed the note to Alex, Alex to Bert, Bert to Chad and Chad to Harold, the holder.
Alex, Bert and Chad have no knowledge of Patrick's defective title. Based on the
foregoing, which of the following statements is incorrect?

Select the correct response:

● all are incorrect.

● Harold may not enforce payment against Mico if Harold is not a holder in due
course.
● Harold may enforce payment against Patrick, whether Harold is a holder in due
course or not.
● Harold may enforce payment against Mico if Harold is a holder in due course.
● Harold may not enforce payment against Alex, Bert and Chad, whether Harold is
a holder in due course or not.

Question 25 of 692 Points

Mark signs a note payable to the order of Paolo which is blank as to amount. Mark
delivers the note to Paolo with instruction to type the amount of P 20,000.00 on the
blank. Paolo however, types the amount of P 50,000.00, and negotiates the same to
Alex, Alex to Brenda, Brenda to Carlo, and Carlo to Hubert, a holder in due course.
Alex, Brenda, Carlo and Hubert had no knowledge of the wrongful completion of the
blank.

Select the correct response:

 ● Hubert may collect from Mark nothing because Paolo violated Mark's
instructions.
● no answer
● Hubert may collect from Alex, Brenda or Carlo P20,000.00 since they had no
knowledge of the wrongful completion.
● Hubert may collect from Mark P50,000.00 the amount actually placed by Paolo.
● Hubert may collect from Mark P20,000.00 the amount Mark instructed Paolo to
place on the space for the amount.

Question 26 of 692 Points

Fill in the blanks:

The maker of a negotiable instrument, by making it, engages that he will pay it
according to its tenor, and admits the existence of the payee and his then capacity to
indorse.

Question 27 of 692 Points

Fill in the blanks:

Where the holder has a lien on the instrument arising either from contract or by
implication of law, he is deemed a holder for value to the extent of his lien.

Question 28 of 692 Points

The following instruments were presented to you for evaluation:
I. "Pay to the order of Pablo Pasco P 20,000.00"
II. "Pay to the order of Pablo Pasco P 20,000.00 or deliver to him a smartphone of the
same value at his option."
III. "Pay to the order of Pablo Pasco P 20,000.00 or deliver to him a smartphone of the
same value."
IV. "Pay to the order of Pablo Pasco a computer worth P 20,000.00."

Assuming all the other requisites of negotiability are present, which of the foregoing
instruments are negotiable?

Select the correct response:

 ● II and III
● III and IV
● I and II
● all of the instruments
● none of the instruments
● I and III

Question 29 of 692 Points

Who among the following is the holder of a negotiable instrument originally payable to
order?

Select the correct response:

● the indorsee who has negotiated the instrument

● the indorsee who is in possession of the instrument
● no answer
● the possessor of the instrument to whom the instrument was delivered without
any indorsement
● the original payee who has negotiated the instrument

Question 30 of 692 Points

One of the following is not a restrictive indorsement. Which is it?

Select the correct response:

● An indorsement that vests title in the indorsee in trust for some other person.
● no answer
● An indorsement that constitutes the indorsee an agent of the indorser.
● An indorsement that constitutes the indorser a mere assignor of the title of the
instrument.
● An indorsement that prohibits the further negotiation of the instrument.

Question 31 of 692 Points

The omission of any essential terms of a warehouse receipt under Sec. 2 of the law
shall affect the validity as well as negotiability of the document.

Select the correct response:

● True
 ● False

Question 32 of 692 Points

Fill in the blanks:

In electronic commerce, there is legal recognition of electronic documents of the

document when the document has remained complete and unaltered, apart from the
addition of any endorsement and any authorized change, or any change which arises in
the normal course of communication, storage and display.

Question 33 of 692 Points

In the case of fungible goods, the warehouseman may mingle them with the goods of
the same kind and grade provided that he is authorized by agreement or custom.

Select the correct response:

● True
● False

Question 34 of 692 Points

A bill of exchange which is addressed to 2 or more drawees alternatively does not affect
the negotiable character of an instrument.

Select the correct response:

● True
● False

Question 35 of 692 Points

Fill in the blanks:

No person is liable on the instrument whose signature does not appear thereon,
except as herein otherwise expressly provided.

Question 36 of 692 Points

An instrument which is not dated will be considered dated as at the time of:

Select the correct response:

● negotation
● first indorsement
● issuance
● acceptance
● last indorsement

Question 37 of 692 Points

Consider these 2 statements:

I. An instrument originally payable to order may be converted into a bearer instrument.

II. An instrument originally payable to bearer may be converted into an order instrument.

Select the correct response:

● Statement I is true; Statement II is false.

● Statement I is false; Statement II is true.
● Both statements are false.
● Both statements are true.

Question 38 of 692 Points

An instrument payable to a specified person or his agent is payable to order.

Select the correct response:

● True
● False

Question 39 of 692 Points

An instrument that is incomplete but delivered, when completed without authority, shall
be considered to have been completed with authority in the hands of a holder in due
course.

Select the correct response:

 ● True
● False

Question 40 of 692 Points

Fill in the blanks:

The holder may at any time strike out any indorsement which is not necessary to his
title.

Question 41 of 692 Points

An instrument to be negotiable must conform to requirements, except:

Select the correct response:

● Must contain an unconditional promise or order to pay a sum certain in money.

● Must be payable to order or to bearer.
● It must be in writing and signed by the maker or drawee.
● Must be payable on demand, or at a fixed or determinable future time.

Question 42 of 692 Points

Fill in the blanks:

Signing under a belief as a witness to a deed or that a signature was procured by

fraudulent use of carbon paper are examples of forge deeds .

Question 43 of 692 Points

Presentment for payment is not required in order to charge the drawer where he has no
right to expect or require that the drawee or acceptor will pay the instrument.

Select the correct response:

● True
● False

Question 44 of 692 Points

The ante-dating or post-dating of an instrument does not render it invalid provided it is
not done for an illegal purpose.

Select the correct response:

● True
● False

Question 45 of 692 Points

Robert signs a check amounting to P50,000.00 but which is blank as to the name of the
payee. He keeps the check in his drawer, but Shiela, his secretary, steals it, places her
name as payee on the blank, and negotiates it to Andrew, Andrew to Brian, Brian to
Charlie, and Charlie to Howard.
Andrew, Brian and Charlie have no knowledge of the theft of the check and its
unauthorized completion by Shiela.
Based on the foregoing, which of the following statements is incorrect?

Select the correct response:

● Howard may not enforce of the check against Robert, whether Howard is a
holder in due course or not.
● Howard may enforce payment of the check against Andrew, Brian and Charlie ,
whether Howard is a holder in due course or not.
● all are incorrect.
● Howard may enforce payment of the check against Shiela, whether Howard is a
holder in due course or not.
● Howard may enforce payment of the check against Robert if Howard is a holder
in due course.

Question 46 of 692 Points

Where an instrument is payable to the order of a "fictitious person", the instrument is still
payable to bearer although such person is actually existing as long as he was not the
intended recipient of the payment.

Select the correct response:

● True
● False
Question 47 of 692 Points

Fill in the blanks:

Every contract on a negotiable instrument is incomplete and revocable until delivery of the
instrument for the purpose of giving effect thereto.

Question 48 of 692 Points

An instrument where no time for payment is expressed is payable on demand.

Select the correct response:

● True
● False

Question 49 of 692 Points

Fill in the blanks:

Best evidence rule means, when a document is the subject of inquiry, no evidence shall be
admissible other than the original document itself.

Question 50 of 692 Points

Fill in the blanks:

A warehouseman is a person lawfully engaged in the business of storing goods for profit.

Question 51 of 692 Points

Where an instrument payable on demand is negotiated on an unreasonable length of
time after its issue, the holder is not deemed a holder in due course.

Select the correct response:

● True
 ● False

Question 52 of 692 Points

One of the following can set up the defense of forgery in an instrument payable to order.
Who is it?

Select the correct response:

● no answer
● The maker, if an indorser's signature is forged.
● The acceptor, if the drawer's signature is forged.
● A person negotiating by mere delivery if a prior party's signature is forged.
● An indorser, if the maker's signature is forged.

Question 53 of 692 Points

Presentment for payment is not excused when the drawee is a fictitious person.

Select the correct response:

● True
● False

Question 54 of 692 Points

Menard makes a note payable to Phoemela or bearer and delivers the note to
Phoemela. Phoemela indorses the note to Andrea. Andrea keeps the note in her drawer
but it is stolen by Florie who negotiates the same to Brenda by forging Andrea's
signature. Brenda indorses the note to Cathy, Cathy indorses the note to Helen, a
holder in due course. Who among the following can set up the defense of forgery?

Select the correct response:

● Andrea, indorser.
● Menard, maker.
● Forgery is not available as a defense to any party to the instrument.
● Phoemela, payee.

Question 55 of 692 Points

As respect one another, indorsers are liable prima facie in the order in which they
indorse.

Select the correct response:

● True
● False

Question 56 of 692 Points

An instrument payable to bearer may be negotiated through any of the following means,
except:

Select the correct response:

● no delivery is required as long as there is an indorsement, whether blank or

special
● special indorsement plus delivery
● blank indorsement plus delivery
● mere delivery
● no answer

Question 57 of 692 Points

When an instrument provides for the payment of interest without specifying the date
from which the interest is to run, the interest runs from the date of the instrument.

Select the correct response:

● True
● False

Question 58 of 692 Points

Fill in the blanks:

For his protection, the warehouseman must bring a complaint in interpleader and
require the different claimants to litigate among themselves.

Question 59 of 692 Points

The warehouseman is not liable on the altered receipt according to its original tenor if
the alteration is immaterial.

Select the correct response:

● True
● False

Question 60 of 692 Points

Every negotiable instrument is payable at the time fixed therein without grace.

Select the correct response:

● True
● False

Question 61 of 692 Points

Mark makes a note payable to the order of Pia in the amount of P200,000.00. Pia
indorses the note to Albert as follows:
"Pay to Albert if he passes the 2014 Bar Examination."

Select the correct response:

● Mark cannot be compelled to pay even if the condition is fulfilled because the
conditional indorsement renders the instrument non-negotiable.
● no answer
● Mark may pay Albert even if the condition has not been fulfilled. The fulfillment of
the condition becomes immaterial and Albert becomes the absolute owner of the
proceeds of the note.
● Mark must wait for the condition to be fulfilled before he can pay Albert.
● Mark may pay Albert even if the condition has not been fulfilled but Albert has to
hold the proceeds subject to the rights of Pia.

Question 62 of 692 Points

The sole ground by which a warehouseman loses his lien upon the goods is by
surrendering possession thereof.

Select the correct response:

 ● True
● False

Question 63 of 692 Points

Fill in the blanks:

A qualified indorsement constitutes the indorser a mere assignor of the title to the
instrument.

Question 64 of 692 Points

Fill in the blanks:

In warehouse receipts law, conversion is the unauthorized assumption and exercise

of the right of ownership over the goods belonging to another to the alteration of their
condition or exclusion of the owner's rights.

Question 65 of 692 Points

An instrument which contains a promise or order to pay a sum of money which is
subject to a condition is negotiable as long as the condition happens.

Select the correct response:

● True
● False

Question 66 of 692 Points

Presentment for payment is not necessary in order to charge the person primarily liable
on the instrument; but if the instrument is, by its terms, payable at a special place, and
he is able and willing to pay it there at maturity, such ability and willingness are
equivalent to a tender of payment upon his part.

Select the correct response:

● True
● False
Question 67 of 694 Points

Fill in the blanks:

When a negotiable instrument has been dishonored by non-acceptance or non-

payment, notice of dishonor must be given to the drawer and to each indorser .

Question 68 of 692 Points

The negotiable character of an instrument is not affected by the fact that it is not dated.

Select the correct response:

● True
● False
●

Question 69 of 692 Points

An instrument that is complete but undelivered shall be considered validly delivered if it
is in the hands of a holder in due course.

Select the correct response:

● True
● False

Submissions
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Category Progress

Grade 93.15068493150685

None 6.849315068493155

136/146 (93%)