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Negotiable Instruments Law

Negotiable Instruments Law

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NEGOTIABLE INSTRUMENTS LAW Part I Preliminaries 1.

Memorize Section 1 of the Negotiable Instruments Law Answer: Legal Backup/Reference: 2. Define a negotiable instrument according to the Supreme Court of the Philippines. Answer: Legal Backup/Reference: 3. What is/are the function/s of negotiable instruments? Answer: Legal Backup/Reference: 4. What are the common forms of negotiable instruments? Answer: Legal Backup/Reference: 5. What is the important characteristic or feature of negotiable instruments? Answer: Legal Backup/Reference: 6. Define a negotiable promissory note. Answer: Legal Backup/Reference: 7. Define a negotiable bill of exchange. Answer: Legal Backup/Reference: 8. Define a negotiable check. Answer: Legal Backup/Reference: Lesson 1 – Promissory Notes 9. Define a negotiable promissory note. Answer: Legal Backup/Reference:

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Define a Certificate of Deposit. Answer: Legal Backup/Reference: 17.Bill of Exchange 15. Define a negotiable Bill of Exchange. Define a banker’s acceptance bill. Is a treasury warrant negotiable? Answer: Legal Backup/Reference: 20. Answer: Legal Backup/Reference: 12. Answer: Legal Backup/Reference: 19. Define a trade acceptance bill. Are postal money orders negotiable? Answer: Legal Backup/Reference: 2 . What is a Due Bill? Answer: Legal Backup/Reference: Lesson 2. What are the special types of promissory notes? Answer: Legal Backup/Reference: 11. Define a Bank Note. What is a Bond? Answer: Legal Backup/Reference: 13. Answer: Legal Backup/Reference: 14. Answer: Legal Backup/Reference: 18. Answer: Legal Backup/Reference: 16. Give the special types of bills of exchange.10.

Answer: Legal Backup/Reference: 27. Define a foreign bill of exchange.21. Is the holder duty bound to resort to the referee in case of need? Answer: Legal Backup/Reference: Lesson 3 – Check 30. 3 . May the bill of exchange be addressed to two or more drawees? Answer: Legal Backup/Reference: 25. Answer: Legal Backup/Reference: 22. Name the special types of checks. if the drawee does not accept the bill? Answer: Legal Backup/Reference: 24. Define an inland bill of exchange. Under what circumstances may a bill be considered a promissory note? Answer: Legal Backup/Reference: 28. Answer: Legal Backup/Reference: 26. Answer: Legal Backup/Reference: 31. Define a negotiable check. Can a payee enforce payment on the bill against the drawee to whom the bill is addressed. Who is a “Referee in case of Need”? Answer: Legal Backup/Reference: 29. What is a documentary bill? Answer: Legal Backup/Reference: 23. Define a clean bill of exchange.

Define a crossed check. Define a Memorandum check. When is a check said to be crossed generally? Answer: Legal Backup/Reference: 42. Answer: Legal Backup/Reference: 34.Answer: Legal Backup/Reference: 32. What is a traveler’s check? Answer: Legal Backup/Reference: 4 . Can both cashier’s and manager’s checks be treated as promissory notes? Answer: Legal Backup/Reference: 35. Answer: Legal Backup/Reference: 36. Define a manager’s check. Define a cashier’s check. In how many ways may a check be crossed? Answer: Legal Backup/Reference: 40. When is a check said to be crossed specially? Answer: Legal Backup/Reference: 41. Answer: Legal Backup/Reference: 33. What is the purpose of crossing a check? Answer: Legal Backup/Reference: 38. Answer: Legal Backup/Reference: 37. Who crosses a check? Answer: Legal Backup/Reference: 39.

What is a certified check? Answer: Legal Backup/Reference: 44.43. Within what time shall a check be presented for payment? Answer: Legal Backup/Reference: 50. What is the effect upon the liability of the endorser in case the check is not presented for payment within a reasonable time after its issuance? Answer: Legal Backup/Reference: 5 . When is a drawer of a check discharged from liability in the event it has become stale? Answer: Legal Backup/Reference: 52. How do you call a check which is not presented for payment within a reasonable time after its issue? Answer: Legal Backup/Reference: 51. When does a check operate as an assignment of the funds of the drawer with the drawee bank available for payment? Answer: Legal Backup/Reference: 49. What is the effect of certification of a check? Answer: Legal Backup/Reference: 45. What is the effect of certification of the check procured by the drawer? Answer: Legal Backup/Reference: 48. What is the effect if the check is certified procured by the holder? Answer: Legal Backup/Reference: 47. Who may procure a check to be certified? Answer: Legal Backup/Reference: 46.

What are the rules regarding signature? Answer: Legal Backup/Reference: 6 . What are the essential requisites of a negotiable instrument? Answer: Legal Backup/Reference: 54. What is the difference between written and printed? Answer: Legal Backup/Reference: Lesson 6 – Signature 61. What are the essential requisites of a negotiable check? Answer: Legal Backup/Reference: Lesson 5 – Writing 57. What are the essential requisites of a negotiable bill of exchange? Answer: Legal Backup/Reference: 56. What are the essential requisites of a negotiable promissory note? Answer: Legal Backup/Reference: 55. What constitutes in writing? Answer: Legal Backup/Reference: 58. What is the doctrine of substantial compliance? Answer: Legal Backup/Reference: 59. For an instrument to be negotiable must it follow literally the language of the Negotiable Instruments Law? Answer: Legal Backup/Reference: 60.Lesson 4 – Requisites of Negotiability 53.

Suppose an agent signs as follows: (Sgd. What are requisites must be followed so that the agent in so signing his principal will not be personally liable? Answer: Legal Backup/Reference: 65. Define forgery. Must disclosure of the principal be made always on the signature? Answer: Legal Backup/Reference: 68. What is meant by “disclosure of the principal”? Answer: Legal Backup/Reference: 67.) Juan de la Cruz agent of Pedro Reyes: Under such signature who shall be liable? Answer: Legal Backup/Reference: 66. How is a signature per procuration made? Answer: Legal Backup/Reference: 70. What is a signature per procuration? Answer: Legal Backup/Reference: 69. Answer: Legal Backup/Reference: 7 . What is the effect of a signature per procuration? Answer: Legal Backup/Reference: 71. The question in this item was moved to Part 3 of GQ as question item 19 72. What is the general rule as to the liability of a person whose signature does not appear on the instrument? Answer: Legal Backup/Reference: 63. What are the exceptions to this general rule? Answer: Legal Backup/Reference: 64.62.

73. Who is a payee? Holder? Bearer? Answer: Legal Backup/Reference: 82. How is duress amounting to forgery done? Answer: Legal Backup/Reference: 77. Who is a maker? Answer: Legal Backup/Reference: 8 . Through this misinterpretation A obtains from X a negotiable note payable to order of Jose Reyes. What are the effects of forgery of a signature on the instrument in general? Answer: Legal Backup/Reference: 79. Is this forgery? Answer: Legal Backup/Reference: 78. Explain Fraud in Factum. Answer: Legal Backup/Reference: 76. What are the other forms of forgery? Answer: Legal Backup/Reference: 75.Parties 81. In how many ways may forgery of a signature be done? Answer: Legal Backup/Reference: 74. when in fact he is not. If a broker or agent negotiates an instrument by delivery who shall be liable? Is it the agent or the principal? Answer: Legal Backup/Reference: Lesson 7. Then A indorses the note. Supposing A represents himself to be Jose Reyes. Who are the persons precluded from setting up the defense of forgery? Answer: Legal Backup/Reference: 80. signing “JOSE REYES”.

Who is an accommodation party? Answer: Legal Backup/Reference: 88.83. What is a bank? Answer: Legal Backup/Reference: 86. Who is an acceptor? Answer: Legal Backup/Reference: 87. To whom. Is the accommodation party liable to the accommodated party? Answer: Legal Backup/Reference: 93. What is the legal position of an accommodated party? Answer: Legal Backup/Reference: 92. How many kinds of accommodation parties are there? Answer: Legal Backup/Reference: 90. Who is a drawee? Answer: Legal Backup/Reference: 85. then shall an accommodation party be liable on the instrument? Answer: Legal Backup/Reference: Lesson 7A – Liabilities of Parties 9 . Who is an accommodated party? Answer: Legal Backup/Reference: 89. Must an accommodation party not receive any consideration at all? Answer: Legal Backup/Reference: 91. Who is a Drawer? Answer: Legal Backup/Reference: 84.

In the following instrument. What kind of liability has the drawer? Answer: Legal Backup/Reference: 97. In what respect does a maker differ from the acceptor as regards their primary liability? Answer: Legal Backup/Reference: Lesson 8 – Unconditional Promise or Order 102. What kind of liability has a maker? Answer: Legal Backup/Reference: 95.) “A” Answer: 10 . What warranties does an acceptor make? Answer: Legal Backup/Reference: 101. When is a promise or order considered unconditional within the meaning of the Act? Answer: Legal Backup/Reference: 103.94. What warranties does drawer make? Answer: Legal Backup/Reference: 98. As Acceptor. What kind of liability has the drawee? Answer: Legal Backup/Reference: 99. is the promise unconditional? “I promise to pay to the order of B P1. what kind of liability does he have? Answer: Legal Backup/Reference: 100. (Sgd. What are the warranties of a maker? Answer: Legal Backup/Reference: 96.000 out of the proceeds of the sale of my car.

(Sgd.000 on Dec. (Sgd. In case of default I hereby authorize the sale of my law books I pledge as a security. 1. 1987 and reimburse yourself out of my deposit with you.Legal Backup/Reference: 104.) “A” Answer: Legal Backup/Reference: 108. Is the following instrument negotiable? “I promise to pay to the order of B. P5. What is meant by “confession of judgment”? Answer: 11 . Is the following instrument negotiable? Pay to the order of B. 1. What acts in addition to payment of money will not affect negotiability? Answer: Legal Backup/Reference: 111. will the instrument be negotiable? Answer: Legal Backup/Reference: 109. If on the face of the instrument there are additional provisions as something to be done or added.) “A” Answer: Legal Backup/Reference: 106. P5. Is the following instrument negotiable?: “I promise to pay to the order of B. 1987. What is the test to determine whether additional acts will or will not impair negotiability? Answer: Legal Backup/Reference: 110. will the promise or order remain unconditional? Answer: Legal Backup/Reference: 105.) “A” Answer: Legal Backup/Reference: 112. Suppose the fund stated on the instrument is the source of reimbursement. Will an indication of a particular account to be debited with the amount affect negotiability? Answer: Legal Backup/Reference: 107.000 on Dec. To: X (Sgd.000 in payment of the car I purchased from B. P1.

What is meant by “exchange”? Answer: Legal Backup/Reference: 12 .Legal Backup/Reference: 113. 1987.000 is payable in two equal installments”. will the instrument remain negotiable? Answer: Legal Backup/Reference: 114. will it affect negotiability? Answer: Legal Backup/Reference: Lesson 9 – Sum Certain in Money 115. If an instrument contains a confession of judgment. What constitutes sum certain in money? Answer: Legal Backup/Reference: 116. will that satisfy the stated installments as required by the law? Answer: Legal Backup/Reference: 119. If the instrument contains the following: “To pay P1. If the instrument contains the following: that the sum of P1. How does an acceleration clause affect the certainty of the sum payable? Answer: Legal Backup/Reference: 121. What is meant by the phrase “stated installments”? Answer: Legal Backup/Reference: 118. is the sum certain in money? Answer: Legal Backup/Reference: 117. In case there is an option to require something to be done in lieu of money on the instrument.000 payable in two equal monthly installments to start on August 1.” is the sum certain in money? Answer: Legal Backup/Reference: 120. Suppose the phrase is the following: “The sum of P1.000 and all other sums due”.

) A This note thogh made by A last Jan. When is an instrument said to be payable at a determinable future time? Answer: 13 . 1987 I promise to pay to the order of B. 20 2010. Does the phrase “with exchange” destroy negotiability? Answer: Legal Backup/Reference: 123. 2010 was issued by A to B only last Jan. 2010 but was only indorsed by B to C last Jan. 1. Suppose the instrument is payable in foreign currency. when is this note payable? Answer: Legal Backup/Reference: 127. will that destroy negotiability? Answer: Legal Backup/Reference: 124. 2010. 18. When is an instrument considered payable on demand? Answer: Legal Backup/Reference: 126. How does the stipulation on costs and attorney’s fees affect negotiability? Answer: Legal Backup/Reference: Lesson 10 – Demand 125. But if the note above was issued by A to B last Jan. 10. 1987. 15. when is it payale? Answer: Legal Backup/Reference: Lesson 11 – Fixed Date 128. Jan. P1. 10.000 on Jan.122. (Sgd. What are the rules regarding fixed date? Answer: Legal Backup/Reference: Lesson 12 – Determinable Future Time 129.

1987 but at the same time it was refuse acceptance by the drawee. 1987? Answer: Legal Backup/Reference: 136. 1. If a bill of exchange payable “10 days after sight” has been presented for acceptance on Aug. Can a bill of exchange be drawn payable at a fixed period after date or sight? Answer: Legal Backup/Reference: 134. Can a promissory note be made payable either at a fixed period after date or after sight? Answer: Legal Backup/Reference: 133. Is the instrument payable on a determinable future time? Answer: Legal Backup/Reference: 14 . I promise to pay to the order of B when X gets married to Y. Suppose the event mentioned is “death of a person”. 1987. can the instrument be made payable before such event? Answer: Legal Backup/Reference: 138. 1.Legal Backup/Reference: 130. 1. can the maker be compelled to pay before Dec. If an instrument is payable on or before Dec. Where the determinable future time specified on the instrument is sure to happen or is certain when it shall happen. To what does the phrase “after sight” refer? Answer: Legal Backup/Reference: 132. can the instrument be payable at a fixed period before such event? Answer: Legal Backup/Reference: 137. To what does the phrase “after date” refer? Answer: Legal Backup/Reference: 131. when shall maturity date be? Answer: Legal Backup/Reference: 135.

Does the Negotiable Instrument Law distinguish between fictitious person and a non-existing person? Answer: Legal Backup/Reference: 148. There is no question in this item as well as in item 144 in the given GQ 145.000 on demand. In how many ways may an instrument be made payable to order? 140. is the instrument payable to bearer? Answer: 15 .Lesson 13 – Order 139. When is an instrument payable to bearer? Answer: Legal Backup/Reference: 147. Is the above instrument payable to order? Answer: Legal Backup/Reference: 142. Must the payee to whose order the instrument is payable be always named? Answer: Legal Backup/Reference: 143. (Sgd. What requisites must be present so that an instrument where the payee named therein is fictitious or non-existing be considered payable to bearer? Answer: Legal Backup/Reference: 149.000 on demand. I promise to pay to Santa Claus P5. 144. I promise to pay to the order of the Treasurer P1.) “A” Here A knows that his payee is non-existing. if it is payable to the order of the maker himself? Answer: Legal Backup/Reference: Lesson 14 – Bearer 146. Can you consider the note complete. To whose order may an instrument be drawn? Answer: Legal Backup/Reference: 141.

When is an instrument considered ante-dated? Answer: Legal Backup/Reference: 156. Answer: Legal Backup/Reference: 152.Legal Backup/Reference: 150. If an instrument payable to order has been indorsed in blank. When is the instrument considered post-dated? Answer: Legal Backup/Reference: 157. can it be subsequently negotiated by mere delivery? Answer: Legal Backup/Reference: Lesson 15 – Rules on Construction 151. As of what date shall a person acquire title to an instrument which is ante-dated or post-dated but not for an illegal or fraudulent purpose? Answer: Legal Backup/Reference: 16 . When are the above rules applicable? Answer: Legal Backup/Reference: Lesson 16 – Rules Regarding Date 153. Does ante-dating or post-dating an instrument invalidate the instrument? Answer: Legal Backup/Reference: 158. What are the rules regarding date? Answer: Legal Backup/Reference: 154. State the rules of construction where the instrument is ambiguous. Is date of issuance essential for negotiability? Answer: Legal Backup/Reference: 155.

159. Will insertion of a wrong date invalidate the instrument? Answer: Legal Backup/Reference: Lesson 17 – Omissions not Affecting Negotiability 162. yet will not impair negotiability? Answer: Legal Backup/Reference: 17 . What is the authority of the holder as regards the insertion of the date? Answer: Legal Backup/Reference: 161. What factors may be omitted on the face of the instrument. Under what instances may date of issuance or acceptance be inserted in the instrument? Answer: Legal Backup/Reference: 160.

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