REVIEWER FOR LAW

1. Statement 1: The difference between negotiation and assignment are that negotiation refers only to
negotiable instruments while assignment refers generally to an ordinary contract.

Statement 2: Negotiation is governed by Negotiable Instruments Law while assignment is governed by

the laws on assignment of credits of the new Civil Code

a. Both statements are false

b. First statement is true, second is false

c. First statement is false, second is false

d. Both statements are true

2. Three of the following are requirements of a valid indorsement. Which one is not?

a. The indorsement must be written on the instrument itself or upon a paper attached thereto

b. It must be completed by delivery

c. The indorsement should not contain any conditions or restrictions

d. It must be an indorsement of the entire instrument

3. Three of the following are the legal effects of the delivery of an order instrument without
indorsement. Which one is not?

a. The transfer operates as an ordinary assignment and the transferee acquires the instrument subject
to all defenses, real or personal

b. The transferee acquires all the rights of a holder

c. The transferee can demand from the transferor that the instrument be properly indorsed to him

d. The transferee is not a holder as defined under the Negotiable Instruments Law

4. Statement 1: In case of undelivered and incomplete instruments, a maker is still liable thereon.

Statement 2: The indorsement of a minor does not make him liable on the instrument, although such
indorsement passes title over the instrument

a. First statement is true, second is false

b. First statement is false, second is true

c. Both statements are true

d. Both statements are false

5. In three of the following, a person whose signature does not appear in the instrument, Is nonetheless
liable. Which is not?

a. Where a person signs in a trade or assumed name

b. The forger, in cases of forgery of instruments

c. A person who negotiates by delivery is liable to his immediate transferee

d. A person whose signature was forged

6. Statement 1: A holder has no right to sue on the instrument in his own name.

Statement 2: However, he may receive payment, and if the payment is in due course, the instrument
is discharged

a. Both statements are true

b. Both statements are false

c. First statement is true, second is false

d. First statement is false, second is true

7. Three of the following are personal defenses. Which one is not?

a. Want of delivery of an incomplete instrument

b. Want of delivery of a complete instrument

c. Acquisition of an instrument by unlawful means

d. Filling up of wrong date

8. When a signature in an instrument does not indicate in what capacity a person had intended to sigh,
the person whose signature appears on the instrument is deemed to be:

a. Drawer

b. Drawee

c. Indorser
d. Indorsee

9. A issued a negotiable note to B. B indorsed it to C, a minor. C indorsed to D and D to E. Who will be

liable to E if A will dishonor the note?

a. Only D being the immediate transferor

b. B, C, and D being secondary parties

c. Only B and D, C is not liable being a minor

d. Only B, being the original payee

10. One of the following is not a requisite for the negotiability of a promissory note:

a. The promissory note must be in writing and signed by the maker

b. The promissory note must be payable on demand or at a fixed or determinable future time

c. The promissory note must be payable to a specified person named therein

d. The payee of a promissory note payable to order must be named or otherwise indicated therein with
reasonable certainty

11. Which of the following instruments is non-negotiable?

a. A bill of exchange written with the use of a pencil

b. A bill of exchange written on a wall

c. A promissory note written on a piece of cloth

d. A promissory note signed with a mark

12. One of the following is not a negotiable instrument:

a. Treasury warrant

b. Bond

c. Certificate of deposit

d. Banker’s acceptance

13. Which of the following instruments is not payable with a sum certain in money and is, therefore,
non-negotiable?
a. “I promise to pay bearer 25,000 plus interest at the end of the current calendar year.” ₱

b. “Pay to P or order 25,000 in installment.” ₱

c. “I promise to pay P or order $500 with exchange at the current rate.”

d. “I promise to pay bearer 25,000 on or before December 31 of this year, with 10% attorney’s ₱fee and
costs of collection in case of default.”

14. Which of the following promissory notes payable in installment is negotiable?

a. “I promise to pay P or order 30,000 payable in (2) equal installments.” ₱

b. “I promise to pay P or order 30,000 payable in (4) quarterly installments effective to date.”₱

c. “I promise to pay P or order 30,000 payable at 500 for each installment.”₱ ₱

d. None of the foregoing

15. Which of the following instruments is not unconditional and is, therefore, non-negotiable?

a. “Pay P or order 40,000 and reimburse yourself with the proceeds of the watch you are ₱selling to
me.”

b. “Pay bearer 40,000 from my share in the profits of our partnership business.” ₱

c. “I promise to pay P or order 40,000 as payment for the ring I purchased from him.” ₱

d. “Pay bearer 40,000 and charge the payment to my account in your hands.”₱

16. Which of the following instruments is payable at a fixed or determinable future time?

a. “I promise to pay P or order 20,000 30 days before X’s demise.” ₱

b. ‘’I promise to pay P or order 20,000 upon sight.” ₱

c. ‘’I promise to pay P or order 20,000.” ₱

d. None of the foregoing

17. Which of the following instruments is still negotiable despite the additional provision thereof:

a. “I promise to pay P or order 50,000 or to paint his house, at the option of the holder.”₱

b. “I promise to pay bearer 50,000 and all the taxes that may be assessed on the mortgage ₱securing the
note.”

c. “I promise to pay P or order 50,000 and to insure the movable pledged to secure this note.”₱
d. “I promise to pay bearer 50,000 and to give him a gold ring.” ₱

18. Which of the following omissions will render the instrument non-negotiable?

a. It is not dated

b. It does not specify the value given

c. It does not specify the place where it is payable

d. None of the foregoing

19. Which of the following statements relative to instruments payable on demand is false?

a. A bill of exchange which is payable “at sight” is payable as soon as it is seen by the drawer

b. An instrument which is payable “on call” is payable on demand

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

d. An instrument which is issued, accepted or indorsed when overdue is deemed payable on demand as
regards the person so issuing, accepting or indorsing it

20. Which of the following is an order instrument?

a. “I promise to pay X or bearer.”

b. “I promise to pay Captain Barbell or order.”

c. Indorsements made at the back of an order instrument: Pay to A, (Sgd.) P; Pay to B, (Sgd.) A; Pay to C,
(Sgd.) B; (Sgd.) C.

d. None of the foregoing

21. Which of the following is a bearer instrument?

a. “Pay P the sum of 10,000 on demand.” ₱

b. “Pay to the order of P the sum of 10,000 on December 31 of this current year.”₱

c. “Pay order 10,000 upon sight.” ₱

d. None of the foregoing

22. Which of the following statements is correct?

a. The determination of the maturity date is not necessary in an instrument which is payable ata fixed
period after date

b. The date of issue of a promissory note payable on demand is essential to make the instrument
negotiable

c. An instrument which is ante-dated is an invalid instrument

d. The holder of an instrument which is payable at a fixed period after date but is issued undated may
insert therein the true date of issue

23. M made a promissory note payable to P’s order and authorized P to fill up the amount of not more
than 50,000. P filled up the amount of 75,000 and indorsed the note to A. A then ₱ ₱indorsed it to B,
present holder. Who may be held liable to B for 75,000? ₱

a. P only

b. A only

c. P and A only

d. M, P and A

24. X stole a pre-signed promissory note from M’s office cabinet. He then placed the amount of 20,000
and P’s named as the payee, then indorsed the note to A using P’s name. A then ₱indorsed the same to
B, and B to C, present holder in due course. Who may be held liable to C for 20,000?₱

a. M, P, X, A and B

b. P, X, A and B only

c. X, A and B only

d. M, P and X only

25. X stole a promissory note that is completely made by M. X indorsed the note to A, then A to B,
present holder in due course. Who may be liable to B?

a. A only

b. X only

c. X and A only

d. M, X and A
26. Which of the following statements relative to the construction of ambiguous instruments is
incorrect?

a. Where there is a discrepancy between the sum payable expressed in words and that which is
expressed in figures, the former prevails

b. Where there is a conflict between the written provisions and the printed provisions of the instrument,
the former prevails

c. Where there is a doubt whether an instrument is a bill or a note, the issuer or drawer may treat it as
either at his election

d. Where the instrument which contains the words “I promise to pay” is signed by two or morepersons,
they are deemed to be solidarily liable thereon

27. Which of the following statements relative to forgery is false?

a. It is the intent to defraud that distinguishes forgery from spoliation

b. Forgery has the effect of making the instrument void

c. Parties subsequent to a forged indorsement cannot acquire any right as against parties prior to the
forgery

d. The party whose indorsement is forged in a note which is originally payable to bearer is liable to a
holder in due course

28. Parties who are precluded from setting up forgery as a defense (Principle of estoppel) may be held
liable by the holder of a negotiable instrument despite the forged or unauthorized signature. Examples
of these parties are:

a. Acceptors

b. Indorsers and persons negotiating by delivery

c. All of the foregoing

d. None of the foregoing

29. Which of the following statements relative to forgery in negotiable instruments is false?

a. The drawee-bank can recover the payment it made to a holder in due course where the drawer’s
signature on the check is forged

b. The drawee-bank can recover the payment it made to the encasher of the check where the payee’s
signature on the check is forged
c. The drawee-bank that paid a check with a forged indorsement cannot debit or charge the drawer’s
account in the absence of negligence on the part of the drawer

d. None of the foregoing

30. Which of the following statements relative to a forged indorsement of a negotiable instrument is
true?

a. If the note is payable to order, the party whose indorsement is forged is liable only to a holder not in
due course but is not liable to a holder in due course

b. If the note is payable to bearer, the party whose indorsement is forged is liable to any holder whether
or not he is a holder in due course

c. If the bill of exchange is payable to order, the party whose indorsement is forged is liable only to a
holder not in due course but is not liable to a holder in due course

d. None of the foregoing

31. M made a promissory note to the order of P for 10,000. P indorsed the note to A. X stole the ₱note
from A, forged his (A’s) signature and indorsed it to B. B, in turn, indorsed the note to C, holder in due
course. Who among the parties can be held liable to C?

a. M, P, X, A and B

b. P, X, A and B only

c. X, A and B only

d. X and B only

32. M executed a promissory note in the sum of 100,000 to the order of P for the purchase of ₱jewelry
which P does not own or possess. P indorsed the note to A, a holder in due course. Which of the
following statements relative to the absence of consideration in the promissory note is correct?

a. A can collect 100,000 from both M and P

b. A can collect 100,000 from M only₱

c. A can collect 100,000 from P only₱

d. A can collect 100,000 from M and P₱

33. M wanted to help his friend P who needed cash desperately. In exchange for P’s valuable painting, M
executed a promissory note for 300,000 naming P as the payee therein. P then ₱indorsed the note at S
bank and received the proceeds out of the discounted note. Upon maturity date, P and S bank decided
to extend the maturity date by (6) months without the knowledge and consent of M. the grace period
also matured without the note being paid. Which of the following statements is correct?

a. M is primarily liable to S bank, whereas P is only secondarily liable to S bank

b. Only P is liable to S bank because M is released from his obligation when the period was extended
without his knowledge and consent

c. Only M is liable to S bank as an accommodation party to the note

d. None of the foregoing

34. Which of the following exemplifies negotiation within the meaning of the Negotiable Instruments
Law?

a. A promissory note executed by M in favor of P, or his order is delivered by P to A without indorsement

b. A promissory note executed by M in favor of P is indorsed and delivered by P to A

c. A promissory note is executed by M in favor of bearer is delivered by M to P for safekeeping

d. None of the foregoing

35. Which of the following is an invalid indorsement?

a. An indorsement which is contained in an “allonge” where there is still sufficient space at the back of
the negotiable instrument

b. A partial indorsement is made where part of the amount has already been paid

c. A note for 10,000 is indorsed by A for 7,000 and by B for 3,000 simultaneously₱ ₱ ₱

d. A note for 10,000 is indorsed by A and B for the full amount₱

36. Which of the following statements relative to indorsements is true?

a. A blank indorsement of an order instrument converts the instrument into a bearer instrument

b. An order instrument which is special indorsed by P can only be further negotiated by P’s special
indorsement

c. A bearer instrument cannot be negotiated by indorsement coupled with delivery

d. A special indorsement must contain the words “or order” or “to the order of’ to make it further
negotiable

37. Which of the following is not a restrictive indorsement under the Negotiable Instruments Law?
a. “Pay to A or B.” (Sgd.) P

b. “Pay to A only.” (Sgd.) P

c. “Pay to A for collection.” (Sgd.) P

d. “Pay to A in trust for X.” (Sgd.) P

38. M made a promissory note payable to P’s order. X stole the note and forged P’s signature as indorser
to A. A indorsed the note to B as follows: “Pay to B sans recourse, (Sgd.) A.

Who among the partied shall be liable to B?

a. X, M and P only

b. X and A only

c. X and M only

d. X only

Ans. B

39. M made a promissory note for 25,000 payables to the order of P. P indorsed it to A as follows: ₱ “Pay
A upon passing the Bar Examinations next year.” (Sgd.) P. A flunked the examinations held in the
following year and the note matured. Which of the following statements is correct?

a. M may or may not pay A the sum of 25,000 and in case he does, he is discharged from his
₱obligation on the note

b. M should not pay A the sum 25,000 because the condition is not fulfilled₱

c. M and P should not pay A the sum of 25,000 because the note is not unconditional and, ₱therefore,
non-negotiable

d. None of the foregoing

40. M made a promissory note payable to P or bearer. P specially indorsed the note to A. A also specially
indorsed it to B. X stole the note from B and delivered it to C without any indorsement. Who may be
held liable to C?

a. X only

b. M and X only

c. M, P, A and X only

d. M, P, A, B and X
41. A promissory note payable to P or order contains the following indorsements at the back thereof:
(Sgd.) P; Pay to B, (Sgd.) A; Pay to C, (Sgd.) B. C is the present holder. Which of the following statements
is correct?

a. C cannot strike out any of the indorsements

b. C may strike out both P’s and A’s indorsements, but he cannot strike out B’s immediate indorsement

c. C may strike out all indorsements of P, A and B thereby converting the order instrument into a bearer
instrument

d. None of the foregoing

42. Which of the following is not a requisite of a holder in due course under the Negotiable Instruments
Law?

a. He took the instrument complete and regular upon its face

b. He became the holder of the instrument before it was overdue, and without notice that it had been
previously dishonored if such was the fact

c. He took the instrument in good faith and for value

d. That he has no knowledge of any fact which would impair the validity of the instrument or render it
valueless

43. In which of the following cases is the holder deemed to be a holder in due course?

a. The holder acquired the instrument through the indorsement of (1) of the two (2) payees

b. The holder acquired the instrument at noontime on its maturity date

c. The holder accepted the instrument from the payee under a strong and reliable warning of the latter’s
swindling activities

d. None of the foregoing

44. Which of the following defenses is a real or absolute defense which can be successfully raised
against a holder in due course?

a. Want of authority of agent

b. Want of delivery of complete instrument

c. Absence or failure of consideration

d. Acquisition of instrument by force, duress fear, or by unlawful means

45. Which of the following is a characteristic of “fraud in factum” or “fraud in esse contractus?”

a. It is fraud in the execution of the instrument

b. The person actually knows that what he signed is a negotiable instrument, but he was induced to do
so because of fraudulent representation on its consideration

c. It is a personal or equitable defense that cannot be raised against a holder in due course

d. All of the foregoing

46. M made a promissory note payable to P or order as payment for the purchase of what appears to be
a genuine diamond ring but what in fact was a mere piece of valueless glass. Indorsements where as
follows: P to A, A to B, B to C, and C to D. the parties A, B and D knew about the fraud commited by P. C,
however, has no knowledge thereto. Is M primarily liable to D on the note?

a. No, because M has a real defense that he can set up against any holder

b. No, because M has a personal defense that he can avail against D who is an immediate party to him

c. Yes, because D is deemed a holder in due course who is free from and personal defense of M.

d. None of the foregoing

47. M made a promissory note for 100,000 in favor of P or order, the latter deceiving the former ₱that
he (P) was selling his car in A-1 condition which was in fact a piece of junk. P indorsed the note to A who
knew about the fraud. A, in turn, indorsed the note to B, a holder in due course. B further indorsed the
note to C, present holder. Which of the following statements is true?

a. M is liable to C if the latter if the latter has no knowledge of the fraud

b. M is liable to C whether or not the latter has knowledge of the fraud

c. M is not liable to C if the latter has no knowledge of the fraud

d. M is not liable to C whether or not the latter has knowledge of the fraud

48. Determine who among the following parties to a negotiable instrument is a party who is secondarily
liable:

a. Maker of a promissory note

b. Drawee of a bill of exchange

c. Acceptor of a bill of exchange

d. Drawer of a bill of exchange

49. Which of the following is not a characteristic of an irregular indorser?

a. His signature is placed on the instrument after its delivery to the payee

b. He is not a party to the instrument

c. The purpose of the indorsement is not to transfer title to the instrument

d. His warranties are the same as those of a general indorser

50. Which of the following is not among the warranties of a qualified indorser or a person negotiating an
instrument by delivery?

a. That the instrument is genuine and in all respects what it purports to be

b. That he has good title to the instrument

c. That all prior parties have capacity to contract

d. That the instrument is, at the time of his indorsement, valid and subsisting

51. Which of the following statements relative to both qualified indorser and a person negotiating a
bearer instrument by delivery is false?

a. Both parties are not liable in case of insolvency of a prior party, unless they have knowledge thereto

b. The liabilities of both parties extend to all subsequent holders of the instrument

c. Both parties are liable in case the signature of the maker of a promissory note is forged

d. None of the foregoing

52. M made a promissory note for 30,000 payable to P or order. The following indorsements are ₱found
at the back of the note:

Pay to A sans recourse.

(Sgd.) P

Pay to B.

(Sgd.) A

Which of the following statements is true?

a. In case M is insolvent, P is not liable, but A is liable to B

b. In case M is insolvent, P and A are not liable to B

c. In case M’s signature is forged, P is not liable, but A is liable to B

d. In case M is a minor, P and A are not liable to B

53. Which of the following relative to presentment for payment of negotiable instruments is false?

a. The holder of the instrument may sue the maker or acceptor for nonpayment after maturity date
without need of prior demand

b. Presentment for payment is not necessary to charge the maker or acceptor even if presentment for
payment is required and stipulated in the instrument

c. Failure to make presentment for payment to the maker or acceptor will not discharge the drawer
and indorsers from their secondary liability

d. Presentment for payment may be dispensed with where the drawee is a fictitious person

54. In which of the following cases must presentment for payment be made?

a. To the drawer, where he made a stop payment order to the drawee-bank

b. To the drawer, where he withdrew all his deposit in the drawee-bank

c. To the indorser, where the instrument was made or accepted for his accommodation and he has no
reason to expect that it will be paid if presented

d. None of the foregoing

55. Notice of dishonor must be given to:

a. Maker and acceptor

b. Qualified indorser and person negotiating by delivery

c. Payee

d. All of the foregoing

56. M made a promissory note payable to the order of P. indorsements were as follows: P to A, A to B, B
to C, and C to D. the note was dishonored by M. D served a notice of dishonor to C. However, P, A, and B
did not receive any notice of dishonor. C paid the note to D. who among the secondary parties does C
have a right of recourse?

a. P, A and B can be held liable to C

b. Only A and B can be held liable to C

c. Only B can be held liable to C

d. None of the foregoing

57. Which of the following cases constitutes material alteration of a negotiable instrument?

a. Changing the sum payable written in figures without changing the sum payable written in words

b. Insertion of the legal rate of interest where payment of interest is stipulated but without specifying
the rate

c. Placing the name of the indorsee above the indorser’s signature to convert a blank indorsement into a
special indorsement

d. None of the foregoing

58. M made a promissory note for 100,000 payables to P or order. P altered the amount by ₱increasing
it to 150,000. P then indorsed it to A, and A to B, present holder in due course. ₱Which of the following
statements is correct?

a. M, P and A are not liable to B for the material alteration

b. M is liable to B for 100,000; P and A are liable to B for the balance of 50,000₱ ₱

c. M is not liable to B; P and A are liable to B for 150,000₱

d. M, P and A are liable to B for 150,000₱

59. The holder does not have the option to treat a bill of exchange as a promissory note in one of the
following cases:

a. The drawer and the drawee are the same person

b. The drawee is a fictitious person

c. The payee is a fictitious person

d. The drawee is incapacitated to contract

60. The maker, by making the instrument, has the following liabilities, except:

a. The engagement to pay the instrument according to its tenor

b. The admission of the existence of the payee

c. The admission of the capacity of the payee to indorse the instrument

d. The admission of the right of the holder to enforce payment of the instrument

61. Which of the following is not a characteristic of a bill of exchange?

a. Original parties are the drawer, drawee and payee.

b. Acceptance is generally required.

c. Drawer is primarily liable.

d. Contains an unconditional order to pay

62. 1st statement: A check must be presented for payment within a reasonable time after it issued of
the drawer will be discharged from a liability thereof.

2nd statement: Where the holder of a check procures it to be accepted or certified, the drawer and all
endorsers are discharged from liability thereof.

a. Only the 1st statement is true

b. Only the 2nd statement is true

c. Both statements are not true

d. Both statements are true

63. Determine who among the following parties to a negotiable instrument is a party who is secondary
liable:

a. Maker of a promissory note

b. Drawee of a bill of exchange

c. Acceptor of a bill of exchange

d. Drawer of a bill of exchange

64. Which of the following is not among the warranties of a qualified indorser or a person negotiating an
instrument by delivery?

a. That the instrument is genuine and in all respects what it purports to be

b. That he has good title to the instrument

c. That all prior parties have capacity to contract

d. That the instrument is, at the time of his indorsement, valid and subsisting
65. For the purpose of lending his name without receiving the value thereof, A makes a note for 1M
payable to the order of B who in turn negotiates it to C, the latter knowing that A is not a ₱party for
value. May C recover from A if the latter alleges absence of consideration?

a. Yes, because an accommodation party is liable to a holder for value

b. Yes, because an accommodated party is liable to a holder for value

c. No, because a holder is not a holder in due course due to his knowledge of the absence of
consideration

d. No, because absence of consideration is a personal defense

66. Statement 1: A holder is a payee or indorsee of a bill or note who is in possession of it or the bearer
thereof.

Statement 2: An instrument payable to bearer cannot be negotiated by indorsement coupled with

delivery.

a. Both statements are true

b. Both statements are false

c. First statement is true, second is false

d. First statement is false, second is true

67. A negotiable instrument once issued as negotiable will always be negotiable. An indorsement may
contain restrictions, conditions and qualifications, and the negotiable character of the instrument will
not be affected.

a. Both statements are true

b. Both statements are false

c. Only the first statement is true, second is false

d. The first statement is false, second is true

68. The payment of a check by the drawee bank is a negotiation and makes the bank the holder thereof.
There is nothing in the Negotiable Instruments Law which prevents the use of rubber stamp in the
indorsement of checks, drafts and notes.

a. Both statements are true

b. Both statements are false

c. First statement is true, second is false

d. First statement is false, second is true

69. In a note payable to the order of W, the latter merely signed his name at the back. This kind of
indorsement is called?

a. Special indorsement

b. Blank indorsement

c. Qualified indorsement

d. Restrictive indorsement

70. Which of the following statements relative to forgery in negotiable instruments is false?

a. The drawee-bank can recover the payment it made to a holder in due course where the drawer’s
signature on the check is forged

b. The drawee-bank can recover the payment it made to the encasher of the check where the payee’s
signature on the check is forged

c. The drawee-bank that paid a check with a forged indorsement cannot debit or charge the drawer’s
account in the absence of negligence on the part of the drawer

d. None of the foregoing

71. M executed a promissory note in the sum of 100,000 to the order of P for the purchase of ₱piano
which P does not own or possess. P indorsed the note to A, a holder in due course. Which of the
following statements relative to the absence of consideration in the promissory note is correct?

a. A can collect 100,000 from both M and P₱

b. A can collect 100,000 from M only₱

c. A can collect 100,000 from P only₱

d. A cannot collect 100,000 from M and P₱

72. Which of the following statements relative to protest is false?

a. It is normally prepared and certified by a notary public

b. It requires at least (1) witness

c. It is required only in the case of foreign bills

d. It may be dispensed with in the same manner as a notice of dishonor may be dispensed with

73. Which of the following statements relative to checks is false?

a. A manager’s check operates as an assignment of funds to the credit of the payee or holder which is no
longer subject to countermand

b. A check is crossed specially can only be deposited in the bank whose name is written between the
parallel lines

c. A check is crossed generally can be deposited in any bank where the holder maintains a deposit

d. A crossed check is not a negotiable instrument

74. One of the following is not a requisite for the negotiability of a promissory note:

a. The promissory note must be in writing and signed by the maker

b. The promissory note must be payable on demand or at a fixed or determinable future time

c. The promissory note must be payable to a specified person named therein

d. The payee of a promissory note payable to order must be named or otherwise indicated therein with
reasonable certainty

75. A check is crossed generally when:

a. Only the words “and Co.” are written between the parallel lines

b. It is certified by the drawee bank

c. The name of a particular bank is written between the parallel lines

d. None of the above

76. Three of the following are special types of bills of exchange. What is the exception?

a. Bank draft

b. Due bill

c. Clean bill of exchange

d. Banker’s acceptance

77. Three of the following are not covered by the Negotiable Instruments Law. What is the exception?
a. Letters of credit

b. Treasury warrant

c. Bill of exchange

d. Bill of lading

78. A stale check is a check?

a. That cannot anymore be paid through the underlying obligation still exists

b. That cannot anymore be paid and the underlying obligation under the check is also extinguished

c. That can still be negotiated or indorsed so that whoever is the holder can

d. Which has not been presented for payment within a period of thirty (30) days

79. In payment for his debt in favour of X, Y gave X a Manager’s Check in the amount of 100,000.
₱Which phrase best completes the statement- A manager’s check:

a. Is a check issued by a manager of a bank for his own account

b. Is check issued by a manager of a bank in the name of the bank against the bank itself for the
account of the bank

c. Is like any ordinary check needs to be presented for payment also

d. Is better than a cashier’s check in terms of use and effect

80. Negotiable instruments are used as substitutes for money, which means?

a. That they can be considered legal tender

b. That when negotiated, they can be used to pay indebtedness

c. That at all times the delivery of the instrument is equivalent to delivery of the cash

d. That at all times negotiation of the instruments requires proper indorsement

81. A promissory note which does not have the words “or order” or “or bearer” will render the
promissory note non-negotiable, and therefore:

a. It will render the maker not liable

b. The note can still be assign and the maker made liable
c. The holder can become holder in due course

d. The promissory note can just be delivered, and the maker will still be liable

82. A check is ---

a. A bill of exchange

b. The same as a promissory note

c. Is drawn by a maker d. A non-negotiable instrument

83. In a negotiable instrument, when the sum is expressed both in numbers and in words and there is
discrepancy between the words and numbers---

a. The sum expressed in words will prevail over the one expressed in numbers

b. The sum expressed in numbers will prevail over the one expressed in words

c. The instrument becomes void because of the discrepancy

d. This will render the instrument invalid

84. Where a negotiable note contains the words “For value received”, a presumption of consideration
arises, and the burden of proving lack of consideration, rests on the ---

a. Indorser

b. Maker

c. Drawer

d. Drawee

85. Excluding liabilities arising from warranties on the instrument, the following are liable to any holder
or subsequent party who might be compelled to pay another except:

a. General indorser

b. Conditional indorser

c. Restrictive indorser

d. Qualified indorser
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