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TRUE OR FALSE

1. An instrument originally payable to order maybe converted into a bearer instrument.
2. An instrument originally payable to bearer maybe converted into an order instrument
3. If an authorized agent signs for and on behalf of his principal, the latter will be liable, as a
rule.
4. A person who signs a trade or assumed name will be liable to the same extent as if he had
signed in his own name.
5. A person who signs a trade or assumed name will be liable to the same extent as if he had
signed in his own name.
6. If a bill of exchange is accepted at the instance of the holder, the drawers and indorsers are
discharged.
7. If a check is accepted at the instance of the holder, the drawers and indorsers are discharged.
8. Minority is a real defense available against a holder in due course.
9. Prior parties of a minor indorser can set-up minority as a defense against a holder in due
course.

1. Pay to the order of B, P25,000, at sight after the arrival and discharge of 10 boxes of sardines
from Vessel X at Pier 8, Manila.

To: PNB Sgd. A

Statement No. 1. The instrument is negotiable because it is payable on demand.
Statement No. 2. The instrument is not negotiable because the order is conditional.

A. True; False
B. False; True
C. Both statements are true.
D. Both statements are false

Statement 2. “with the privilege of discharging this note by payment of principal less a discount of 5% within 30 days from the date thereof. 2009. False B.000 in current money at Manila Philippines.2. This note is negotiable because the sum is certain. P8.000 one year after date in 5 month’s installments of P1. D. The note is negotiable because although it is not dated. Statement 2.$1. The instrument is payable on a determinate future time. U. A. Statement 1. I promise to pay to the order of B. on December 10.S. one year from date will be one year from issuance thereof. Statement 2. X Statement 1. Both statements are false 4. The instrument is negotiable because it is payable on demand. . P20.600 each. I promise to pay to the order of B. Both statements are true. D. This note is not negotiable because it does not state a particular kind of current money. True C. Both statements are false 1. False B. X Statement 1.000 at such time as the promissor may choose. Both statements are true. True C. False. True. A. False. Sgd. The instrument is not negotiable because the sum is not certain. True. I promise to pay to the order of B.” Sgd.

D. Both statements are true. The instrument is incomplete. Both statements are false . The bill is not negotiable and at the same time ambiguous. Both statements are false 6. False B. The bill is negotiable but ambiguous. Pay to the order of B. A. True C. X Statement 1.000 on December 1.A. Sgd. True. False. False. False B. Statement 2.000 on _________. P20. True. Y Statement 1. True C. D. Accepted: Sgd. True C. P20. The instrument is complete and considered payable on demand. Statement 2. X Sgd. Both statements are true. Both statements are false 5. False B. A. hence not negotiable. Both statements are true. True. 2009. I promise to pay to the order of B. D. False.

Sgd. A. the payee is not specified with reasonable certainty. True C. Statement 2. Both statements are false 8. True C. X. False. False B. A negotiable note is signed in this manner: Sgd. It is Y who is liable because the words “agent of Y” is sufficient disclosure. True.000 on demand. This is negotiable provided A knows Batman is a non-existing person at the time he made the note.6. A Statement 1. True. D. Sgd. Both statements are true. Both statements are false 7. False. . A. It is X who is liable because there was no disclosure of the principal. I promise to pay to bearer or order P20. This is a negotiable note payable to bearer. This is payable to bearer. I promise to pay Batman P20.000 on demand. False B. Both statements are true. A Statement 1. agent of Y Statement 1. D. This note is negotiable because although it is payable to order. Statement 2. Statement 2.

Due to Maria Santos P5. 2009 with costs and attorney’s fees incurred for the collection of the debt. True C. D. P20. False B. Both statements are false 9. False.000 on December 1. True. Sgd. 2009. False.000 on December 1. False B. Both statements are false 11. A. Statement 2. Both statements are true.000 on demand. . True. A Statement 1. False B. Statement 2. I promise to pay to the order of B. To: SantaClaus Sgd. The instrument is not negotiable because the sum is not certain. A Statement 1.A. The bill is not negotiable because the drawee is fictitious. A. Both statements are true. Both statements are true. True C. False. True C. D. Both statements are false 10. D. The bill is still negotiable and can be treated as a promissory note. P20. True. Pay to the order of B. The instrument is negotiable because the sum certain is ascertainable on the face of the instrument.

A. True. Sgd. False B. Statement 2. Both statements are true. A Statement 1. True C. This is a negotiable bill of exchange because it does not contain a promise to pay. D. This is nevertheless a promissory note but it is not negotiable because it is payable to order. False. Both statements are false CASE ANALYSIS .

000. Supposing under the same facts. the latter knowing that Pedro is not a party for value. 2. Pedro pays the said P20. May Vilma be held liable? Explain [1996 Bar Examination].00 with BUR Bank. May Y recover from Pedro if the latter interposes absence of consideration? b. Payment was refused for lack of funds.000. Santos purchased Vera’s car for P50. Pedro makes a note for P20. Vilma. Vera presented the check to the drawee bank for payment. a.1. Vera refused to accept the check unless it is indorsed by Reyes.00. does Reyes have the right to recover from Santos? Explain [1985 Bar Examination]. may he recover the same amount from X? Explain [1998 Bar Examination]. despite its knowledge that Vilma received no part of the loan. Nora applied for a loan of P100. . but Reyes refused to pay. knowing that Reyes had not received any value for indorsing the check. Reyes indorsed Santos’ check and Vera. accepted it. Vera gave notice of dishonor to Reyes. When Nora defaulted.00 payable to the order of X who in turn negotiates it to Y.000. Santos offered to pay in check. For the purpose of lending his name without receiving value therefor. a. their mutual friend. saying that he indorsed merely as a friend. 000. Is Reyes liable to Vera? In the event Reyes voluntarily pays Vera. The next day. BUR Bank sued Vilma. a. Not having enough cash on hand. By way of accommodation. Nora’s sister.00. 3. executed a promissory note in favor of BUR Bank.