SUBJECT : BLW 302 (LAW ON NEGOTIABLE INSTRUMENTS)

Midterm Examination

TRUE OR FALSE. (Explain if your answer is False)

1. Negotiable instruments need not be in writing.

2. A negotiable promissory note is considered as a substitute for money.
3. Where the promissory note is not dated, it will be considered to be dated as of the time it
was issued.
4. A restrictive indorsement prohibits the further negotiation of the instrument.
5. A negotiable bill of exchange increases the medium of currency in circulation.
6. Where a signature is so placed upon a promissory note that it is not clear in what capacity
the person making the same intended to sign, he is to be deemed a maker.
7. A negotiable instrument is a legal tender.
8. An instrument is negotiated when it is transferred from one person to another in such
manner as to constitute the transferee the holder thereof.
9. A negotiable promissory note must be signed by the drawer.
10. Where value has at any time been given for the promissory note, the holder is deemed a
holder in due course in respect to all parties who became such prior to that time.
11. An instrument is payable on demand if it is expressed to be payable on presentation.
12. A negotiable bill of exchange must be signed by the drawee and must always be in writing.
13. A blank indorsement constitutes the indorsee the agent of the indorser.
14. A negotiable instrument must not contain a conditional promise to pay a sum certain in
money.
15. One requisite of a negotiable promissory note is that it must be payable to order or bearer.
16. Where the promissory note is addressed to a drawee, he must be named or otherwise
indicated therein with reasonable certainty.
17. The person to whom a post-dated bill of exchange is delivered acquires the title thereto as of
the date of delivery.
18. Where no time for payment is expressed, the instrument is payable on demand.
19. A special indorsement vests the title in the indorsee in trust for or to the use of some other
person.
20. Where the sum payable in a bill of exchange is expressed in words and also in figures and
there is a discrepancy between the two, the sum denoted by the figures is the sum payable.
21. A negotiable promissory note may be payable on demand.
22. Where a promissory note provides for the payment of interest, without specifying the
date from which interest is to run, the interest runs from the date of the promissory note, and
if the promissory note is undated, from the issue thereof.
23. A promissory note payable to bearer is negotiated by delivery;
24. Where a promissory note containing the words "I promise to pay" is signed by two or more
persons, they are deemed to be jointly liable thereon.
25. A holder for value is any person who has given valuable consideration for the instrument.
26. A person who has signed a promissory note as indorser, without receiving value therefor,
and for the purpose of lending his name to some other person is called an “accommodation
party”.
27. A negotiable promissory note is deemed prima facie to have been issued for a valuable
consideration; and every person whose signature appears thereon to have become a party
thereto for value.
28. A bill of exchange payable to order is negotiated by the indorsement of the holder.
29. A qualified indorsement constitutes the indorser a mere assignor of the title to the
instrument. It may be made by adding to the indorser's signature the words "without
recourse" or any words of similar import.
30. The holder of a negotiable instrument may sue thereon in his own name.