Negotiable Instruments

1.) 1^st statement: An instrument drawn payable to the order of the bearer is a bearer instrument.

2^nd statement: To determine whether an order instrument is negotiable, it must be endorsed and completed by delivery.

A. Only the 1^st statement is true

B. Only the 2^nd statement is true

C. Both statements are false

D. Both statements are true

2.) M makes a negotiable promissory note payable to P or order, P endorses to A but delivers it to B. Who is the holder?

A. A

B. P

C. B

D. None of the above

3.) Statement No. 1: An order instrument will always remain an order instrument.

Statement No. 2: An instrument is considered payable to bearer where it is payable to the order of fictitious or non-existing person and such fact is known to the person making it so payable.

A. Only the statement 1 is true

B. Only the statement 2 is true

C. Both statements are false

D. Both statements are true

4.) Payable to specified person.

A. Pay to B or his assigns P1,000

B. Pay to B or his endorsees P1,000

C. Pay to B or his agent P1,000

D. None of the above

5.) M makes a negotiable promissory note payable to P or order, P endorses to A but delivers it to B. Who is the holder?

A. A

B. P

C. B

D. None of the above

6. The following instruments are payable to bearer, EXCEPT

A. When it is payable to the order of a fictitious or non-existing persons, and such fact was known to the person making it so payable

B. When the name of the payee does not purport to be the named of any person

C. When it is payable to a person named therein or bearer

D. None of the above

7. Is any consideration sufficient to support a simple contract?

A. Value

B. Cash

C. Price

D. Money

8.) Not unconditional order to pay

A. To pay out of particular Fund

B. To pay and charge against a particular account

C. Both A and B

D. None of A and B

9.) One of the requisites of negotiable instrument is that it must contain an unconditional promise or order to pay a sum certain in money. Which of the following denotes non-negotiability?

A. I promise to pay the order of Y the sum of $900 at DBP Manila

B. I Promise to pay to the order of Y the sum of $600 and to deliver one - fourth of the rice harvest in my farm

C. I promise to pay E or bearer in Manila the sum of P27,000 in the Philippines pesos or U.S dollars at the options of the holder

D. Promise to pay N or bearer in Manila the sum of P18,000 in the Philippines pesos or in U.S dollars

10.) Payable to bearer

A. Pay to bearer B P1,000

B. Pay to possessor P1,000

C. Pay to B, the bearer, P1,000

D. All of the above

Answer the following and explain!