T - There is constructive or implied acceptance if the drawee destroys the bill.

F - Payment at or after maturity by a party secondarily liable cancels his own liability
and all parties prior to him.
F - A renunciation in favor of a secondary party discharges the instrument.
F - The agreement to extend the time of payment discharges a party secondarily liable.
T - Any act which would discharge a simple contract would also discharge a negotiable
instrument.
T - Discharge of Instrument renders the negotiable instrument without force and effect
and, consequently, it can no longer be negotiated.
T - Waiver of notice of dishonor written above the signature of the indorser binds the
latter only.
F - Notice of dishonor may be waived only expressly.
T - Notice of dishonor given by the holder inured to the benefit of all parties prior to the
holder and all holders subsequent to the holder giving notice.
T - Notice of dishonor may be given by the agent’s holder.
T - The requirement of notice of dishonor may be given verbally.
T - The taking of a qualified acceptance discharges the drawer and indorsers from
liability on the bill.
T - Presentment for payment may be made by or on behalf of the holder.
T - Presentment for payment can be dispensed with when the drawee is a fictitious
person.
T - Presentment for payment to charge persons secondarily liable is necessary.
T - Presentment for payment to an indorser could be dispensed when the instrument
was made or accepted for his accommodation.
F - Presentment for payment to charge persons primarily liable is indispensable.
F - Presentment for acceptance is necessary to render a party to the bill liable.
T - Where a drawee within 24 hours after delivery or within such other period as the
holder may allow, failed to return the bill accepted or non -accepted to the holder, the
drawee will be deemed to have accepted the same.
T - The check must be presented for payment within a reasonable time after its issue,
otherwise the drawer will be discharged from liability to the extent of the loss caused by
the delay.
T - Generally presentment for payment is necessary to charge persons secondarily
liable.
T - Despite failure to give notice of dishonor, the obligation based on contract may
remain although the liability under the instrument itself may be discharged.
T - The drawer and indorser are not liable based on teh instrument without protest of a
dishonored foreign bill,
T - The holder who does not obtain an unqualified acceptance may treat the bill as
dishonored by non-acceptance.
F - Failure to present the instrument for payment on time totally extinguishes the liability
based on contract.
T - In case of forgery of the indorser’s signature, the maker may or may not be liable.
T - A general indorser is liable only to parties subsequent to him.
T - A general indorser makes either a blank or special indorsement.
T - An irregular indorser has the same warranties as the general indorser.
T - Those who warrant or admit the genuineness of the signature in question are
precluded from setting up the defense of forgery,
T - Where the forged signature is not necessary to the holder’s title, the forged signature
may be disregarded.
F - An accommodation maker is only liable to a holder in due course.
T - Indorsers subsequent to the forgery are liable.
T - A material alteration is one that changes the items required to be stated under
Section 1 of the Negotiable Instruments Law.
F - In case of forged signature of an indorser in a bearer instrument, the maker is not
liable.
T - In case of forged signature of the indorser in an order instrument, the maker, payee,
and indorser whose signature was forged are not liable,
T - In case of forgery of the maker’s signature, the maker is not liable.
T - Under the Cut-Off-Rule in case of forgery, the holder can only enforce the instrument
against parties who became such after the forgery,
F - Forge signature makes the instrument wholly inoperative and no right to retain the
instrument, or to give a discharge therefore, or to enforce payment thereof against any
party thereto, can be acquired through or under such signature.
F - Real or Absolute defenses are those which are available only against a person not a
holder in due course a subsequent holder who stands in privity with him.
F - Where the instrument is wanting in any material particular, any person has a prima
facie authority to complete it by filling up the blanks therein.
T - Where the instrument is no longer in the possession of a party whose signature
appears thereon, a valid and intentional delivery by him is presumed.
T - Indorsers are liable to the holder in any order. However, they are liable in the order
in which they indorse as between or among themselves.
T - A corporation cannot act as an accommodation party.
T - It is requisite that an Agent to escape from liability in the instrument is to disclose his
principal.
T - A general endorser undertakes to pay only upon the maturity of the instrument after
certain conditions have been fulfilled.
T - Person negotiating by delivery has the same warranties as that of a qualified
endorser.
F - Like the maker, the drawer engages to pay the instrument to the party entitled to be
paid.
T - The acceptor can no longer question the genuineness of the drawer’s signature.
T - Where a check is certified by bank the latter has the same liability and warranties as
an acceptor.
T - The drawee is not liable until and unless he accepts the instrument.
NIL
T - Negotiable instruments are used as substitutes for money. That when negotiated,
they can be used to pay indebtedness.
Eight Hundred Thousand Pesos - Manuel issued a check in favor of his creditor,
Apolonio. It reads ``''Pay to Apolonio the amount of Eight Hundred Thousand Pesos
(Php80,000.00). Signed, Manuel.” What amount should be construed as true in such a
case?
F - A promissory note reads as follows: “I promise to pay Isidoro Azores P100,000.00
three years after the unconditional withdrawal of the US from its military bases in the
Philippines.” This instrument is not negotiable for being undated.
T - The holder has prima facie authority to complete an incomplete instrument by filling
up the blanks therein, including the date.
T - Holder in due course can have rights better than his transferor.
T - An accommodation party cannot raise defense of lack of consideration against the
holder for value. Hence, the accommodation party is not liable to the accommodated
party for lack of consideration.
F - A conditional endorsement makes the instrument non -negotiable.
T - A promissory note reads as follows: I promise to pay the sum of Php250,000 to
McJolly Company on or before December 31, 2022. This instrument is not negotiable
for being payable to McJolly merely and not to order or to bearer or words of similar
import.
F - A check issued on May 4, 2022 is dated May 10, 2022. This check is NOT
negotiable for bearing an incorrect date.
F - An instrument payable in Japanese yen is not negotiable.
F - Where a signature is so placed upon the instrument that it is not clear in what
capacity the person making the same intended to sign, he is to be deemed a maker or
drawer.
T - Insertion of a wrong date does not affect the negotiability of an instrument.
T - A negotiable promissory note can be either payable to order or to bearer.
F - A check reads as follows: Pay to the order of Cash. This instrument is NOT
negotiable for not being payable to order nor to bearer.
T - A bill may not be addressed to two or more drawees in the alternative or in
succession, to be negotiable. To do so makes the order conditional.
T - The promissory note gives the maker the option to make the payment either in
money or in quantity of palay of equivalent value. The instrument is NOT NEGOTIABLE.
Giving themaker the option renders the promise conditional.
T - The maker may disregard the condition in an indorsement and make payment.
F - Negotiation to a prior party prohibits further negotiation.
T - There is a presumption of due course holding under the Negotiable Instruments
Law.
T - A holder who is not a holder in due course, but he derived his title from a holder in
due course is not subject to personal defenses or free from personal defenses.
F - The date of the promissory note is “February 31, 2021”. The instrument is NOT
NEGOTIABLE considering that the given date does not exist.
F - The DRAWER is not liable until and unless the DRAWEE accepts the instrument.
T - The acceptor can NO longer question the genuineness of the drawer’s signature.
F - Real or Absolute defenses are those which are available only against a person not a
holder in due course or a subsequent holder who stands in privity with him.
T - An instrument which is payable to the bearer can still be negotiated by mere delivery
despite the presence of special endorsements.
F - The change in the serial number of a check makes the check NOT negotiable.
T - A general indorser makes either a blank or special indorsement.
T - A general indorser is liable only to parties subsequent to him.
T - The act of crossing the check serves as warning to know the definite purpose so that
the holder must inquire if he has received the check pursuant to that purpose,
otherwise, he is not a holder in due course.
F - Defense of absence of consideration can be validly interposed by the
accommodation party against a holder in due course.
T - Negotiability is the attribute whereby the instrument passes or may pass from hand
to hand, similar to money.
T - A certificate of time deposit which states, “This is to certify that the bearer has
deposited in this bank the sum of Php 1M only, repayable to the depositor 90 days after
date,” is not negotiable.
F - Where a negotiable instrument is so ambiguous that there is doubt whether it is a bill
or note is NOT negotiable.
T - When a bank honored a check, it became primarily and directly liable to the payee.
T - When the instrument is subject to a term and not a condition, it is negotiable.
T - An illicit cause or consideration does not adversely affect the negotiability of the bill.
F - A check can qualify as a negotiable instrument if the day and the month, but not the
year of its maturity is given.
Almanu is not personally liable - Almanu gives a check which he signs in this manner:
“Almanu, Agent.” Upon the dishonor of this check, is Almanu personally liable.”
T - Person negotiation by delivery has the same warranties as that of a qualified
endorser.
T - Indorsers are liable to the holder in any order. However they are liable in the order in
which they indorse as between or among themselves.

Q: I promise to pay Lenlen or order the sum of Php 250,000.00. (Sgd) Manny. Is this
negotiable?

Yes. the instrument is negotiable. All the requisites in order for an instrument to be
negotiable provided under the law are present in the case. It is signed by the maker
Manny, payable to Lenlen or order the sum of Php250,000.00. The instrument is
considered as demandable since no date of maturity is stated. Hence, it is a negotiable
instrument.
Q: For value received, I promise to pay BongBong M. the sum of Php200,000,00 n five
equal installments, with the first installment payable on October 5, 2022, and the other
installments on or before the fifth day of the succeeding months thereafter, Is this
negotiable?

No. The instrument is not negotiable. The instrument is payable to a specific person
which is BongBong M. It lacks the connotations “to the order or to bearer: which the law
requires in order to make the instrument negotiable. Hence, the instrument is not
negotiable.

Q: Zenrio loaned Alfredo Php1,000,000.00 and, to evidence his indebtedness, Alfredo

executed and delivered to Zenrio a promissory note payable to his order. Zenrio
indorsed the note to Manuel. Manuel only delivered the note, without indorsement to
Jimmu. Jimmy delivered without indorsement to Rener. To whom can Rener enforce the
promissory note, if Alfredo will not pay the instrument to Jimmy. Jimmy delivered without
endorsement to Rener. To whom can Rener enforce the promissory note, if Alfredo will
not pay the instrument?

Only Zenrio (as general indorser) and Jimmy (person negotiating by delivery)

Q: What are the requisites of a negotiable promissory note?

The requisites of a negotiable promissory note are:

It must be in writing and signed by the maker
It must contain an unconditional promise to pay a sum certain in money
It must be payable on demand, or at a fixed determinable future time
It must be payable to the bearer and must be named or otherwise indicated herein with
reasonable certainty.

Q: Norberto issued a negotiable promissory note to Zara and authorized the latter to fill
up the amount in blank with his loan account in the sum of Php100,000.00. However
Zara inserted P1,000,000.00. Which is contrary to the instruction. She negotiated the
note to Lennie who had knowledge of the infirmity. Lennie in turn negotiated said note to
Wella for value and who had no knowledge of the infirmity. Supposing Wella indorses
the note to Iska for value who has knowledge of the infirmity, can the latter nforce the
note against Norberto?

Yes, based on the shelter rule.