NEGOTIABLE INSTRUMENT

1. An instrument which is not dated will be considered dated as at the time of:
a. Acceptance
b. First indorsement
c. Last indorsement
d. Issuance

2. “I promise to pay P or his order the sum of P10,000.00 30 days after the death of X”. This is an
instrument payable:
a. At a demandable future time
b. On demand
c. Upon the fulfillment of a condition
d. At an indefinite time, hence, non-negotiable

3. The separate paper attached to an instrument on which an indorsement or acceptance of the

instrument is written is called:
a. Allonge
b. Memorandum
c. Enclosure
d. Attachment

4. An indorsement where the indorser signs only his name at the back of the instrument is a:
a. Special indorsement
b. Blank indorsement
c. Qualified indorsement
d. Restrictive indorsement

5. An indorsement where the indorser waives the benefit of any law intended for his protection is
known as:
a. An absolute indorsement
b. A facultative indorsement
c. A conditional indorsement
d. A successive indorsement

6. Which of the following instrument is negotiable?

a. Treasury warrant
b. Postal money order
c. Letter of credit
d. Trade acceptance

7. A partly secondary liable is discharged through any of the following means, except by the:
 a. Intentional cancellation of his signature by the holder
b. Discharge of a prior party
c. Release of the principal debtor
d. Extension of the time of payment which is assented to by such party secondarily liable

8. Which of the following does not discharge the instrument?

a. Payment in due course by the accommodated party
b. Intentional cancellation of the instrument by the holder
c. When the principal debtor becomes the holder n his own right before maturity
d. Payment in due course by or on behalf of the principal debtor

9. Which of the following omissions on the face of an instrument will render it non-negotiable?
a. The omission of the date of issue
b. The omission of any statement that value has been given
c. The omission of the place where the instrument was drawn
d. The omission of the signature of the maker above his typewritten name

10. Which of the following may be raised as defense against any holder?
a. Want of consideration
b. Want of delivery of complete instrument
c. Insertion of a wrong date
d. Want of delivery of an incomplete instrument

11. The acceptor, by accepting the instrument, admits the following, except the:
a. Existence of the payee
b. Capacity of the payee to indorse
c. Genuineness of the drawer’s signature
d. Right of the holder to enforce payment of the instrument

12. Which of the following is not a promise to pay, and thus will make an instrument non-
negotiable?
a. “I agree to pay P”
b. “I bind myself to pay P”
c. “I acknowledge my debt to P”
d. “I oblige myself to pay P”

13. Which of the following indorsements is a qualified indorsement?

a. “Pay to Angelo Amores for collection”
b. “Pay to Angelo Amores in trust for Teofilo Tangco.”
c. “Pay to Angelo Amores. Indorser not holden.”
d. “Pay to Angelo Amores. Notice of dishonor waived.”
14. A check differs from a bill of exchange because a check:
a. Does not require the drawer to have funds with the drawee
b. May be drawn against a person other than a bank
c. Is always payable on demand
d. Is required to be presented for acceptance in certain cases

15. The placing of a date in an instrument is necessary in the following cases, except:
a. To fix the maturity of the instrument
b. To determine when interest is to run
c. To fix the prescriptive period
d. To make the instrument negotiable

16. A holder is still a holder in due course although:

a. He received the instrument after it has become overdue but he has no knowledge of it
b. He received the instrument after it was dishonored and he has no notice of such dishonor
c. He did not give any value for it
d. The instrument was not complete and regular on its face

17. The signification of the drawee of his assent to the order of the drawer.
a. Acceptance
b. Approval
c. Recommendation
d. Indorsement

18. The time within which the drawee is allowed to give his acceptance is:
a. 12 hours
b. 24 hours
c. 48 hours
d. 72 hours

19. Protest is required in the case of a:

a. Foreign bill of exchange
b. Inland bill of exchange
c. Foreign promissory note
d. Inland promissory note

20. An acceptance for honor which does not expressly state for whose honor it is made is deemed
to be for the honor of the:
a. Drawee
b. Drawer
c. Acceptor
d. Payee