NATIONAL TEACHERS COLLEGE

PRELIMINARY EXAMINATION IN NIL

NAME: __________________________________ DATE: _______________

YEAR & SECTION: ________________________ ROOM: ______________

I. TRUE OR FALSE: Write T if true or F if false.

1. A person signing in an instrument as an agent is not liable thereon provided he is duly authorized,
discloses his principal, and indicates that he is signing as an agent.
2. The ante-date or post-dating of an instrument does not render it invalid provided it is not done for an
illegal purpose.
3. An instrument payable to a specified person or his agent is payable to order.
4. When an instrument is not date, it will be dated as of the time it was issued.
5. If the amount due on an instrument is payable in instalments, the amount and maturity of each
installment must be stated so that the negotiable character of the instrument will not be affected.
6. Where an instrument payable to the order of a fictitious person, the instrument is still payable to bearer
although such person is actually existing as long as he was not the intended recipient of the payment.
7. An instrument which contains a promise or order to pay a sum of money which is subject to a condition
is negotiable as long as the condition happens.
8. When an instrument is negotiated to a prior party, the prior party can go after the intervening parties for
the amount of the instrument.
9. A personal defense is available only against a holder not in due course.
10. An instrument where no time for payment is expressed is payable on demand.
11. The negotiable character of an instrument is affected by the fact that it is not dated.
12. When the name of the payee does not purport to be the name of any person, the instrument is payable
to order..
13. An instrument that is complete but is undelivered shall be considered validly delivered if it is in the
hands of a holder in due course.
14. An instrument that is incomplete but delivered, when completed without authority, shall be considered
to have been completed with authority in the hands of a holder in due course.
15. A bill of exchange which is addressed to two or more drawees alternatively does not affect the
negotiable character of an instrument.

II. Determine if NEGOTIABLE or NON-NEGOTIABLE

16.
December 16, 2017

I promise to pay Marlon Aquino or order P10,000.00 and 2 units of Samsung J7 cell
phone.

(Sgd.) Val David

17.
December 16, 2017

Pay to Charice Yuchengco or order P10,000.00 if she passes the May 2018 CPA Board
Examination.

(Sgd.) Sharon Concepcion

To: Girlie Abunda

 18. December 16, 2017

Pay to Homer Singson or order P10,000.00 representing the purchase price of the five
pieces of Kanel bags that I bought from him yesterday.

(Sgd.) Cynthia Latag

To: Bimby Cruz

19.
December 16, 2017

I promise to pay Cherrie Ogilve P10,000.00 with interest at 10% per annum.

(Sgd.) Lyn Divino

20.
December 16, 2017

Pay to the order of Jose Rizal, national hero, P10,000.00.

(Sgd.) Charmaine Narvaiza

III. ENUMERATION: Write your answer at the back of the paper.

21.23. An instrument payable at a determinable future time when:

24.28. Requisites of a negotiable instrument
29.30. Functions of a negotiable instrument

IV. MULTIPLE CHOICE: Encircle the correct answer.

31. An instrument is rendered non-negotiable by the mere fact that it is:

a. post-dated b. ante-dated c. undated d. none of the foregoing

32. Which will prevail if there is a conflict between the written and printed provisions of an instrument
a. written provision
b. printed provision
c. neither a or b because the instrument becomes non-negotiable
d. intention of the maker or drawer

33. Where a signature is so placed in an instrument that it is not clear in what capacity the person making the
same intended to sign, such person shall be liable as:
a. maker or drawer b. indorser c. guarantor d. surety

34. If an instrument is not dated:

a. It will be dated as of the date of payment
b. It will be dated as of the time it was issued
c. It will be dated as of the time it is negotiated by the payee
d. it will not be dated since it is not negotiable
35. On October 1, 2017, Y issued to X a check dated October 15, 2017. On October 1, 2017 the check is
considered:
a. Post-dated b. Ante-dated c. Current dated d. Undated

36. I promise to pay C or her order the sum of P6k 20 days after the death of B. This is an instrument payable
a. at a determinable future time c. upon the fulfilment of a condition
b. on demand d. at an indefinite time, hence, non-negotiable

37. The separate paper attached to an instrument on which an indorsement or acceptance of the instrument is
written is called
a. attachment b. enclosure c. allonge d. cognovits

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

39. The attribute of a negotiable instrument which allows it to be passed from one hand to another similar to
money, so as to give a holder in due course the right to hold the instrument free from defect of title of prior
parties, and free from defenses available to prior parties among themselves, and to enforce payment of the
instrument for the full amount thereof against all parties liable thereon is known as:
a. assignability b. negotiability c. transferability d. acceptability

40. Which of the following defenses may a party to an instrument avail himself of against any holder?
a. want of delivery of incomplete instrument
b. want of authority to complete an instrument that was delivered
c. want of delivery of complete instrument
d. want or absence of consideration.

V. ESSAY: Discuss the use of a negotiable instrument and whether or not the use of negotiable
instrument is still significant (10 pts)