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NEGOTIABLE INSTRUMENTS LAW

MIDTERM EXAMINATION
ATTY. YAYE DOMOCMAT LARES
Name:___________________________
Course$Yr.:_______________________
I.

Score:__________________
Date:___________________

True or False. Write T if your answer is true and F if it is False.

_____1. A negotiable instrument is intended as substitute for money.


_____2. In order that an instrument to be negotiable, it must comply with Section
1 of the Negotiable Instruments Law (NIL) for short.
_____3. Negotiable Instruments Law is part of Commercial Law.
_____4. The New Civil Code applies suppletorily to NIL.
_____5. The provisions of the NIL can be applied only to non-negotiable
instruments.
_____6. If the instrument is negotiable, you cannot apply the NIL.
_____7. If the instrument is negotiable, the pertinent provisions of the Civil Code
or pertinent special laws should apply.
_____8. The NIL can be applied by analogy if the instrument is not negotiable if
there is no law that can be applied.
_____9. Act No. 2032 is otherwise known as the Negotiable Instruments Law.
_____10. Under the New Central Bank Act, only notes and coins issued by the
Bangko Sentral ng Pilipinas are considered legal tender.
_____11. Checks are not legal tender.
_____12. Negotiable Instruments are legal tender.
_____13. Check is a Bill of Exchange.
_____14. A certificate of deposit is a kind of bill of exchange.
_____15. A maker is the obligee, that is, the person who, by the terms of the note
or bill, is to receive payment.
II. Matching Type. Write the correct letter on the space provided.
A.
B.
C.
D.
E.

Maker
Negotiability
Holder
Drawer
Drawee

F. Promisory Note
G. Bill of Exchange
H. Negotiation
I. Negotiable Instruments
J. P1,000.00

K. P100.00
L. Bankers Acceptance
M. Time Draft
N. Demand Draft
O. Check

____1.Denominations of 1-Peso; 5-Peso and 10-Peso coins.


____2. Denominations of 1-Centavo; 5-Centavo; 10-Centavo and 25-Centavo.
____3. Draft that is payable at a fixed date.
____4. Draft that is payable when the holder presents it for payment.
____5. A bill of exchange drawn on a bank payable on demand.
____6. The person who draws the bill of exchange and orders the drawee to pay a
sum certain in money.
____7. The person who makes a promisory note and promises to pay the amount
stated therein.
____8. The person to whom the order to pay is addressed in a bill of exchange.
____9. It is an unconditional order in writing addressed by one person to another,
signed by the person giving it, requiring the person to whom it is addressed to pay
on demand or at a fixed or determinable future time a sum certain in money to
order or to bearer.
____10. It is an unconditional promise in writing, made by one person to another,
signed by the maker, engaging to pay on demand, or at a fixed determinable
future time, a sum certain in money to order or to bearer.

____11. It is that attribute or property whereby a bill or note or check may pass
from hand to hand similar to money, as to give the holder in due course the right
to hold the instrument and to collect the sum payable for himself free from
defenses.
____12. It is a written contract for the payment of money which is intended as a
substitute for money and passes from one person to another as money, in such a
manner as to give a holder in due course the right to hold the instrument free
from defenses available to prior parties.
____13. The transfer of an instrument from one person to another in such a
manner as to constitute the transferee a holder thereof.
____14. A time draft across the face of which the drawee has written the word
accepted.
____15. The person who is in the possession of a bearer instrument or an indorsee
of an order instrument who is in possession thereof.
III. Determine whether the instrument is NEGOTIABLE or NOT NEGOTIABLE.
1. For value received, I promise to pay to UNP, the sum of FIFTY THOUSAND
PESOS (P50,000.00), Philippine currency, the said principal amount, to be
payable in 12 monthly installments starting January 1, 2016 and every 1 st of
the month thereafter until fully paid.
__________________________
2. Pay to the order of Juan De La Cruz
_________________________
3. I promised to pay bearer Php100,000.00 within 5 days from death of Mr. Z.
__________________________
4. I promised to pay Cash as soon as my means permit me to do so
__________________________
5. Due
A.B
or
order
Php10,000.00,
payable
on
demand
______________________
6. I promised to pay bearer P1,000.00 or a sack of rice at the option of the
holder.
______________________
7. I promised to pay bearer P1,000.00 or a sack of rice at my option.
________________________
8. Due to Y or order Php12,000.00, payable in 6 installments in the amount of
Php2,000.00 per installment
______________________
9. Pay to Faydoh or order on or before February 14, 2016
___________________
10. Pay to the order of Donaire or Chloe the amount of Php100,000.00 twenty
days after sight
________________________
IV. Enumeration
1-5. Requisites of Negotiability under NIL
6-7. Two important features of Negotiable Instruments
8-9. Two kinds of Negotiable Instruments
10. Bonus
-GOOD LUCK-