Law- resa-Negotiable instrument UPDATED ACTUAL Questions and CORRECT Answers
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Law- resa-Negotiable instrument
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Law- Resa-Negotiable Instrument
Law- resa-Negotiable instrument
UPDATED ACTUAL Questions and
CORRECT Answers
A issued a note to B who did not deliver his promised consideration to A. B indorsed it to C,
who is a holder in due course. C indorsed it to D who knew of the failure of consieration. Can
D collect bfrom A?
A. No...
Law- resa-Negotiable instrument
UPDATED ACTUAL Questions and
CORRECT Answers
A issued a note to B who did not deliver his promised consideration to A. B indorsed it to C,
who is a holder in due course. C indorsed it to D who knew of the failure of consieration. Can
D collect bfrom A?
A. No because D is not a holder in due course
B. No, although D acquired the rights of C, a holder in due course
C. No, because he knew of the failure of consideration
D. Yes, because he acquired the note for a consideration - CORRECT ANSWER✔✔- D
M makes a note for P10,000 payable to the order of C who indorses it to A. F obtains
possession of the note fraudulently, forges the indorsement of A, alters amount to P70,000
and endorses it to B who in turn endorses it to C. In this case
A. C can enforce the note against A
B. C cannot enforce the note against any party to the note
C. C can enforce the note against M and O
D. C can enforce the note against B - CORRECT ANSWER✔✔- D
Which of the following is not secondarily liable?
A. Drawer
B. Indorser
C. Payor for honor
D. Acceptor for honor - CORRECT ANSWER✔✔- C
A promissory note for P2M is indorsed as follows: Which of them is not proper indorsement?
,A. Pay to A P1M and B P1M. Sgd. P
B. Pay to A and B P2M. Sgd. P
C. Pay to A or B P2M. Sgd. P
D. Pay to A P1M Sgd. P. The P1M for the residue of the note already paid - CORRECT
ANSWER✔✔- A
Which of the following is a real defense?
A. Fraud in inducement
B. Fraud in factum
C. Acquisition of the instrument by force
D. Acquisition of the instrument for illegal consideration - CORRECT ANSWER✔✔- B
Which of the following is not negotiable for the reason it is not payable at a determinable
future time?
A. One week after X passes the CPA Board Exam, I promise to pay to the order of Y P10,000.
Sgd. Z.
B. Thirty days after demand, drawer Z directs Drawee X to pay Y or order P10,000
C. Ten days after the death of X, I promise to pay to the order of Y P10,000. Sgd. Z
D. On or before Oct. 31, 1998, I promise to pay to the order of Y P10,000. Sgd. Z. -
CORRECT ANSWER✔✔- A
The following instances when a bank may refuse to honor a check drawn against it, except
one
A. Drawer has countermanded payment
B. Drawer's insufficient funds
C. Drawer becomes insolvent
D. Bank obtains knowledge of drawer's death - CORRECT ANSWER✔✔- C
,A issues a bill to the order of B. Later B, without indorsing the bill, transfers for a
consideration said bill to C. The following except one are valid effects of the transfer
A. C acquires the right to have the indorsement of B
B. The bill is merely assigned not negotiated
C. C has become a holder for value
D. The transfer vests in C such title as B had thereon in the instrument - CORRECT
ANSWER✔✔- C
An instrument is indorsed as follows: "Pay to A, for B (sgd) C. Then A indorsed the
instrument to D in payment of his personal loan obtained from the latter. Was D in good faith
as holder thereof?
A. Yes, because he is a holder in due course
B. Yes, because the instrument was negotiable when indorsed to him
C. No, because of the absence of B's consent to the negotiation to D
D. No, because of the knowledge of D that A was only a trustee in favor of B without right to
negotiate the instrument for his personal benefit - CORRECT ANSWER✔✔- D
Which of the following is not anegotiable instrument?
A. I bind myself to pay B or bearer P1M. (sgd) M.
B. I acknowledged being indebted to P for P1M (sgd) M.
C. I oblige to pay P or order P1M. (sgd) M.
D. I agree to pay P or bearer P1M on demand. (sgd) M. - CORRECT ANSWER✔✔- B
Which of the following is not a personal defense?
A. Absence of consideration
B. Forgery of a signature
C. Non-delivery of a complete instrument
D. Delivery of an incomplete instrument - CORRECT ANSWER✔✔- B
, If the drawee destroys the bill upon presentment for acceptance
A. He is deemed to have dishonored the bill
B. The holder may treat the instrument as a promisssory note
C. The holder may now go after the secondarily liable parties
D. The drawee has impliedly accepted the bill - CORRECT ANSWER✔✔- D
Which of the following instances does not discharge an instrument?
A. Payment by the maker of the promissory before the maturity date
B. Intentional cancellation of the instrument by the holder thereof
C. Payment by the party primarily liable to the holder or his agent
D. Voluntary surrender of the instrument to the party primarily liable - CORRECT
ANSWER✔✔- A
Which of the following is not negotiable?
A. X promises to pay to the order of P in dollars at the rate of exchange prevailing on October
30, 2000 the amount of P1M
B. X promises to pay to the order of P P1M with 12% interest
C. X promises to pay to the order of P P1M in installments
D. X promises to pay to the order of P P1M in two equal installmentsa, the first installment
due on Jan. 20,2000 and the second due on Jan. 28, 2001 - CORRECT ANSWER✔✔- C
A issues a bill to the order of J. J indorses it to P and P indorses it to M, M to R and R to S,
the holder now of the bill. Which of the following is not true, if S decides to strike out any
indorsement?
A. If S cancels the indorsement of P, P is relieved from liability
B. If S cancels the indorsement of J, J,P, M and R are relieved from liability
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