DE LA SALLE LIPA

College of Business, Economics, Accountancy and Management

Accountancy Department
Business Law - Review
COVERAGE:
A. Contract of Partnership
a. Nature and as distinguished from corporation
b. Elements and kinds
c. Formalities required
d. Rules of management
e. Distribution of profits and losses
f. Sharing of losses and liabilities
g. Modes of dissolution
h. Limited partnership
B. Law on Negotiable Instruments
a. Negotiable Instruments Law
b. Negotiability of Instrument
c. Functions and kinds of negotiable instruments
d. Construction of ambiguous instrument
e. Parties and their liabilities
f. Indorsements
g. Accomodation party
h. Consideration
i. Manner and consequence of transfer of instruments
j. Dishonored instruments and its effects
k. Requisites of holder in due course
l. Defense of parties
m. Forgery and its effects
n. Discharge of negotiable instruments and the parties secondarily liable

Direction: Read and select the best answer for the following questions.
1.

The following statements concerning the designation of share in the profits and losses by a third person or by a partner are correct, except
a. If entrusted by the partners to a third person, it is binding upon the partners and may be impugned only when it is manifestly inequitable.
b. If the designation by a third person is manifestly inequitable, it can no longer be impugned by a partner who has begun to execute it.
c. If the designation by a third person is manifestly inequitable, it can no longer be impugned by any partner if three months had already
lapsed from the time he obtained knowledge thereof.
d. If entrusted to one of the partners, the designation is valid.
2. When a partner has been appointed manager in the articles of partnership, the following are the rules to be observed, except
a. The managing partner may execute all acts of administration despite the opposition of his partners unless he acts in bad faith.
b. With just or lawful cause, the revocation of the power of the managing partner with just or lawful cause can be made by the vote of the
partners owning the controlling interest.
c. Without just or lawful cause, the revocation of the power of the managing partner can be made only with the consent of all the partners
including the managing partner.
d. The managing partner decision on acts of administration may reversed by the vote of majority of the partners.
3. When a partner has been appointed manager after the partnership has been constituted, the following are the rules, except
a. The managing partner may execute all acts of administration.
b. In case of opposition to the decision of the managing partner on acts of administration, the partner owning the controlling interest may resort
to voting for his removal as manager.
c. He may be removed with just cause by the vote of the partners owning the controlling interest.
d. He may be removed without just cause by the vote of all partners including the managing partner.
4. The following are the rules when two or more partners have been appointed as managers, except
a. When there is a specification of their respective duties, each managing partner shall perform only the duties specified in his appointment.
b. When there is no specification of their respective duties or there is no stipulation that one shall not act without the consent of the others, each
one may separately execute all acts of administration.
c. When there is no specification of their respective duties or there is no stipulation that one shall not act without the consent of the others, the
decision of the majority of the managing partners shall prevail in case of opposition.
d. When there is no specification of their respective duties or there is no stipulation that one shall not act without the consent of the others, the
decision of managing partner owning the controlling interest shall prevail in case of tie in voting.
e. When there is a stipulation that none of the managing partners shall act without the consent of the others, the vote of the majority of
managing partners shall be necessary for the validity of the acts.

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5. When the manner of management has not been agreed upon, the following are the rules, except
a. All the partners shall be considered agents of the partnership or all of them are managers.
b. Any of the partners may make any important alteration in the immovable property of the partnership without the consent of the others if it may
be useful to the partnership.
c. Whatever any of the partners may do alone shall bind the partnership.
d. In case of opposition of the other partners, the decision of the majority shall prevail and the decision of the partners owning the controlling
interest shall prevail in case of tie.
6. Which of the following statements is true as regards to the right of industrial partner to engage in another business?
a. An industrial partner cannot engage in a business of the same kind for himself unless the partnership expressly permits him to do so.
b. An industrial partner cannot engage in any business for himself, unless the partnership expressly permits him to do so.
c. An industrial partner may engage in any business for himself, unless the partnership expressly prohibits him to do so.
d. An industrial partner may engage in a business of the same kind for himself, unless the partnership expressly prohibits him to do so.
7. What is the remedy of the capitalist partner if the industrial partner engages in business for himself without the express permission of the
partnership?
I. Exclude him from the partnership with a right to damages
II. Avail themselves of the benefits obtained from the business he engaged in with a right to damages
a. Either I or II
b. Neither I nor II
c. I only
d. II only
8. Which of the following statements is true as regards to the right of capitalist partner to engage in another business?
a. The capitalist partner cannot engage in any business.
b. The capitalist partner can engage in a business of different kind if there is stipulation allowing him to do so.
c. The capitalist partner can engage in a business of the same kind even without stipulation allowing him to do so.
d. The capitalist partner can engage in a business of different kind even without stipulation allowing it and in a business of the same kind if there
is a stipulation allowing him to do so.
9. What is the effect if a capitalist partner engages in the same kind of business without stipulation allowing him to engage in that business?
I. The capitalist partner shall bring to the common fund any profits accruing to him from the transaction.
II. The capitalist partner shall bear all the losses.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
10. The following are the rules on sharing of partnership liabilities to third persons, except
a. The liability of the partnership shall be equally divided among the partners.
b. Each general partner, whether capitalist or industrial, shall be liable with his separate property after all the assets of the partnership have been
exhausted.
c. A stipulation exempting a general partner from pro rata and subsidiary liability after the exhaustion of partnership asset is valid as to third persons.
d. A stipulation exempting a general partner from pro rate and subsidiary liability after the exhaustion of partnership asset is valid among the
partners.
11. If there is stipulation exempting a general partner from pro rata and subsidiary liability, the following are the rules, except
a. The assets of the partnership shall first be used to pay the liabilities.
b. If the partnership assets are not sufficient, the liability shall be paid equally from the separate assets of the general partners, including industrial
partner.
c. The industrial partner is not required to share in the excess of liability of partnership over the assets.
d. The general partners not exempted from pro rata and subsidiary liability shall reimburse according to the partners profit or loss sharing agreement
or in the ratio of their capital contribution, whichever is applicable, to industrial partner and general partner exempted from pro rata and subsidiary
liability.
12. A, B and C are general partners of ABC Partnership. C is an industriall partner. The partners agreed that B shall be exempted from pro rata and
subsidiary liability to third persons. The total assets of the partnership is P80,000 and the total liabilities to third persons is P110,000. How should the
deficiency be shouldered by the partners in the point of view of third persons?
a. A P30,000
b. A P15,000 and B P15,000
c. A P15,000 and C P15,000
d. A-P10,000, B-P10,000 and C-P10,000
13. Using the same data in number 12, what should be the final settlement among the partners?
a. A shall pay B and C P10,000 each.
b. A shall pay B P5,000 and C shall pay B P5,000.
c. There is not settlement among the partners.

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d. A shall pay C P5,000 and B shall pay C P5,000.

14. Using the same data in number 12 except the fact that B is an industrial partner, how should the deficiency be shouldered by the partners in the
point of view of third persons?
a. A P30,000
b. A P15,000 and B P15,000
c. A P15,000 and C P15,000
d. A-P10,000, B-P10,000 and C-P10,000
15. Using the same data in number 12 except the fact that B is an industrial partner, what should be the final settlement among the partners?
a. A shall pay B and C P10,000 each.
b. A shall pay B P5,000 and C shall pay B P5,000.
c. A shall pay C P15,000.
d. A shall pay C P5,000 and B shall pay C P5,000.
16. A partnership shall operate under a firm name, which may or may not include the name of one or more of the partner. If a third person, not being
a member of the partnership, includes his name in a firm name, what shall be the effect?
a. The third person shall not be liable as a partner.
b. The third person shall be entitled to all rights of a partner.
c. The third person shall be subject to the joint liability of a partner and will be considered a nominal parner.
d. The third person shall be solidary liable with all the partners.
17. In the absence of stipulation to the contrart, when shall the juridical personality of the partnership begins?
a. From the moment the partners have completed their contributions.
b. From the moment of the execution of the contract.
c. From the moment of registration with the SEC.
18. In the absence of stipulation to the contrary, what is the obligation of the partners as to the contribution of capital?
a. To contribute equally to the capital of the partnership.
b. To ask the court for the amount of contribution.
c. To ask third party to designate the amount of contribution.
19. The following are the obligations of the partners with respect to contribution of property, except
a. To deliver to the partnership at the time it was constituted or on the date stipulated the property he has promised to contribute.
b. To take care of the property before its delivery to the partnership with the diligence of a good father of a family.
c. To be liable for damages in case of default.
d. To answer for eviction in case the partnership is deprived of the specific or determinate thing he has contributed to the partnership.
e. To be liable for the fruits of the thing from the time they should have been delivered with the need of any demand.
20. The following are the obligations of the partners with respect to the contribution of money, except
a. To deliver to the partnership at the time it was constituted or on the date stipulated the money he has promised to contribute.
b. To pay interest on the amount he had promised to contribute from the time he should have complied with his obligation.
c. To pay damages suffered by the partnership by reason of the default.
d. To answer for eviction.
21. The following are the obligations of the partner with respect to amount appropriated, except
a. To reimburse to the partnership the amount that he has taken from the partnership coffers.
b. To misappropriate all amounts received.
c. To pay interest on the amount he had converted for his own use from the time of conversion.
d. To pay the damages suffered by the partnership by reason of the conversion.
22. What is the obligation of a partner in case of imminent loss of the business of the partnership?
a. To contribute additional share of capital to the capital and to sell his interest to the other partners if he refuses to contribute such additional
capital unless he is an industrial partner or exempted by stipulation.
b. To sell his interest to the other partners even if he wants to contribute.
c. To dissolve the partnership.
d. To convert the partnership into a corporation.
23. The following are obligations of a partner to the partnership, except
a. To bring to the partnership capital his share of a partnership credit which he has received in whole or in part even he may have given his receipt if
the other partners have not collected their shares and the debtor becomes insolvent after the partner has received the payment.
b. To pay to the partnership for damages suffered by it through his fault but he cannot compensate them with the profits and benefits which he may
have earned for the partnership by his industry.
c. To bear the risk of specific and determinate things owned by the partnership.
d. To render on demand true and full information of all things affecting the partnership to any partner, legal representative of any deceased partner or
legal representative of any partner under disability.
d. To account to the partnership for any benefit and hold as trustee for it any profits, derived by him without the consent of the partners from any
transaction connected with the formation, conduct or liquidation of the partnership or from use by him of its property.

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24.The partnership shall bear the risk of loss for the following contributions of partners, except
a. Fungible things or those that cannot be kept without deteriorating.
b. Things contributed to be sold.
c. Things brought and appraised in the inventory unless there is a stipulation.
d. Specific and determinate things owned by a partner which are not fungible, contributed to the partnership so that only their use and fruits may be
for the common benefit.
25. Which of the following obligations of the partnership are the responsibility of a newly-admitted partner?
I. Obligations existing at the time of his admission but only to the extent of his contribution except if there is an agreement that his liability shall
extend to his separate property.
II. Obligations incurred after his admission and he is liable like the other partners pro rata with their separate property after the partnership assets
have been exhausted.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
26. The following are the rights of a partner in a partnership, except
a. To associate another person with him in his share.
b. To admit another person into the partnership without the consent of all the partners.
c. To have access to and inspect and copy the partnership books at reasonable hours.
d. To have formal account of partnership affairs.
27. The following are the cases when a partner may demand a formal account of partnership affairs, except
a. If he is wrongfully excluded from the partnership business or possession of its property by his co-partners.
b. If the right exists under the terms of any agreement.
c. With respect to benefits or profits derived by a partner without the consent of the partners from any transaction connected with the formation,
conduct or liquidation of the partnership or from use by him of its property.
d. When a partnership property is loss due to fortuitous event.
e. Whenever other circumstances render it just and reasonable.
28. The following statements are true as regards to the property rights of a partner in a specific partnership property, except
a. A partner is co-owner with his partners of specific partnership property.
b. A partner, except as provided by law and as agreed upon by the partners, has an equal right to possess specific partnership property for
partnership purpose.
c. This right is assignable to third person.
d. The right is not subject to attachment or execution except on a claim against the partnership.
e. The right is not subject to legal support.
29. The following statements are true as regards to the right of a partner on his interest in the partnership, except
a. The partners interest in the partnership is his share of the profit and surplus.
b. The partner cannot convey or assign his whole interest in the partnership.
c. The partners interest in the partnership may be attached for his separate debts subject to the preference for partnership creditors.
30. The following are the effects of the conveyance or assignment of a partners interest in a partnership, except
a. The conveyance or assignment dissolve the partnership.
b. The assignee does not become a partner.
c. The assignee has not right to interfere in the management of business, to require any information of partnership transactions or to inspect
partnership books.
31. The following are the rights of an assignee of partners interest, except
a. To receive the profits to which the assigning partner would otherwise be entitled.
b. To avail himself of the usual remedies in case of fraud in management.
c. In case the partnership is dissolved, to require an account from the date only of the last
d. To interfere in the management of the business.
32. The following are the rules for application of payment when a person owes separate demandable debts to the partnership and to the partner
authorized to receive credit, except
a. If the partner authorize to receive issues the receipt for the partnership, payment shall be applied to the partnership credit.
b. If the partner authorized to receive issues his own receipt, payment shall be applied to the two credits proportionately.
c . If the debt to the partnership is not yet due, the payment shall be applied to the partners credit in its entirety.
d. If the debt owed to the partnership is more onerous, the payment shall be applied to the partners credit in its entirety.
e. If the debt is owed to a partner not authorized to receive payment, the payment shall be applied to the partnership credit.
33. The following are the obligations of the partnership to the partners, except
a. To pay to the partner any amounts he may have disbursed for the partnership with interest from the time the expenses were made.

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b. To pay for the obligations which a partner may have contracted in good faith in the interest of the partnership business.
c. To answer for risks in consequence of its management.
d. To answer for personal obligations and expenses of the partner.
34. The following are the cases wherein the partnership shall be solidarily liable with all the partners, except
a. For loss or injury caused to a third person or any penalty is incurred by reason of the wrongful act or omission of any partner acting in the
ordinary course of business of the partnership or with the authority of his co-partners.
b. Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it.
c. Where the partnership in the course of business receives money or property of a third person and such money or property is misapplied by
any partner while it is in custody of the partnership.
d. Where the partnership liabilities exceed the partnership assets.
35. In which of the following instances shall the partnership be bound by the acts of the partners?
I. If the partner is authorized to act for the partnership whether or not the act is for apparently carrying on in the usual way the business of the
partnership.
II. If the partner is not authorized to act for the partnership but the act is for apparently carrying on in the usual way the business of the partnership
and the third person has no knowledge of the partners lack of authority.
III. When although the act is for the apparently carrying on in the usual way the business of the partnership, the partner is not authorized to act for
the partnership and the third person has knowledge of the partners lack of authority.
IV. When the partner is not authorized to act for the partnership and the act is not for apparently carrying on in the usual way the business of the
partnership whether or not the third person has knowledge of the partners lack of authority.
a. I and II
b. III and IV
c. I and III
d. II and IV
36. The following acts are not considered for apparently carrying on in the usual way of business of the partnership and may not be performed by a
partner unless he is authorized by all the other partners, except
a. Assignment of partnership property in trust for creditors or on the assignees promise to pay the debts of the partnership.
b. Disposition of the goodwill of the business.
c. Acts which would make it impossible to carry on the ordinary business of the partnership.
d. Confession of judgment.
e. Payment of the salary of partnerships employees.
f. Entering into a compromise concerning a partnerships claim or liability.
g. Submission of a partnership claim or liability to arbitration.
h. Renunciation of a claim of the partnership.
37. The following are the rules on conveyance of real property by a partner or the partners, except
a. If the title to real property is in the name of the partnership and the conveyance is executed by a partner in the name of the partnership
without authority, the conveyance passes title to the transferee.
b. If the title to real property is in the name of one or more but not all of the partners but the record does not disclose the right of the partnership
and the conveyance is without authority in the name of the partner or partners in whose name the title stands, the conveyance passes title to
the transferee.
c. If title to real property is in the name of the partnership and conveyance is executed by a partner in his own name without authority, the
conveyance does not passes title to the transferee but equitable interest passes to him if the act is for apparent carrying on in the usual way of
the business of the partnership and the third person has no knowledge of the third persons lack of authority.
d. If the title to real property is in the name of one or more or all the partners, or in a third person in trust for the partnership and the conveyance
is executed by a partner in the name of the partnership or in his name without authority, the conveyance transfers ownership to the transferee.
38. The following are the requisites in order for an admission or representation of a partner to be used as evidence against the partnership, except
a. The admission or representation must concern partnership affairs.
b. The admission must be in a public instrument.
c. The admission must be made within the scope of the authority of the partner making the admission.
d. The admission must be made during the existence of the partnership.
39. As a general rule, notice to any partner to partnership affairs is notice to the partnership. The following knowledge of a partner binds the
partnership, except
a. The knowledge of a partner acting on a particular matter if he acquires the same while already a partner.
b. The knowledge of a partner acting on a particular matter if he acquires it before his admission to the partnership provided the same was still
present on his mind.
c. The knowledge of any other partner not acting on a particular matter if he acquired the same while already a partner and he could and should
have reasonably communicated the same to the matter acting on a particular matter.
d. Notice or knowledge of a partner in case of fraud committed by the partner having notice or knowledge or consented to by such partner
having notice or knowledge.
40. The following are the rules in preference of credits of partnership creditors and partners creditors. Except

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a. Partnership creditors shall be paid out first out of partners separate assets.
b. Partners separate creditor shall be paid out of the share of the partner owing him if there is an excess in the partnerships assets over
partnerships liabilities.
c. The partners separate creditors have preference over the partners separate assets.
d. The partnerships creditors have preference over the partnerships assets.
41. Which of the following statements pertain to dissolution?
a. It is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying out of the business.
b. It is the process of settling the disputes or affairs of the partnership after dissolution.
c. It refers to the point when all the business or affairs of the partnership are completely wound up.
42. The following are the causes of dissolution of a partnership without violation of the agreement of the parties, except
a. By the termination of the definite term of particular undertaking specified in the agreement.
b. By the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either
before or after the termination of any specified term or undertaking.
c. By the express will of any partner who acts in bad faith when no definite term or particular undertaking is specified.
d. By the expulsion of any partner bona fide or in good faith from the business in accordance with such power conferred by the agreement of
the parties.
43. In addition to number 42, the following are the causes of dissolution, except
a. In contravention of the agreement between the partners, by the express will of any partner at anytime such as withdrawing from the
partnership.
b. When any event makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership.
c. Loss before or after delivery of property where the partner contributed only its use or enjoyment.
d. Loss before delivery of specific thing, which a partner has promised to contribute to the partnership.
e. By the death of any partner.
f. By the insolvency of any partner or of the partnership.
g. By the civil interdiction of any partner.
h. By decree of court in the cases provided by law.
i. Retirement, death, civil interdiction, insanity or insolvency of a limited partner.
44. The following are the instances wherein the partnership may be dissolved by a decree of court upon application by a partner, except
a. A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind.
b. A partner becomes in any way incapable of performing his part in the partnership contract.
c. Death of any partner.
d. A partner has been guilty of such conduct as tend to affect prejudicially the carrying on of the business.
e. A partner willfully or persistently commits a breach of the partnership contracts
f. The business of the partnership can be carried only at a loss.
g. Other circumstances that render a dissolution equitable.
45. The following are the instances when the act of a partner after dissolution binds the partnership, except
a. When the act is necessary for winding up of partnership affairs.
b. When the act is necessary to complete transactions begun before dissolution.
c. If the other party to a new transaction had extended credit to the partnership before dissolution and he had no knowledge of dissolution.
d. If the other party to the new transaction had not so extended credit but had nevertheless known of the partnership before dissolution, and the
fact of dissolution had not been advertised in a newspaper of general circulation in the place at which the business is regularly carried on.
e. Where the partner who executed the transaction has no authority to do so.
46. The following are the instances when the act of a partner after dissolution does not bind the partnership, except
a. Where the partnership is dissolved because it is unlawful to carry on the business.
b. Where the partner acting has become insolvent.
c. Where the partner had no authority to wind up partnership affairs.
d. Where the act is necessary for winding up partnership affairs.
47. In the liquidation of the general partnership, indicate the proper order of payment of partnership liabilities and equity
I. Those owing to the creditors other than partners.
II. Those owing to partners other than for capital and profits.
III. Those owing to partners in respect of capital.
IV. Those owing to partners in respect of profits.
a. I II III IV
b. I II IV III
c. II I III IV
d. II I IV III
48. Indicate the property order on priority of claims against the separate property of a debtor who is insolvent or whose estate is insolvent.
I. Those owing to separate creditors.
II. Those owing to partnership creditors.
III. Those owing to partners by way of contribution.

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a.
b.
c.
d.

I II III
II I III
III II I
I III II

49. Indicate the proper order of payment of liabilities of limited partnership in liquidation.
I. Those to creditors, including limited partners.
II. Those to limited partners by way of their share of the profits and other compensation by way of income on their contribution.
III. Those to limited partners in respect to the capital of their contributions.
IV. Those to general partners other than for capital and profits.
V. Those to general partners in respect to profits.
VI. Those to general partners in respect to capital.
a. I II III IV V VI
b. I II IV III V VI
c. I II III IV VI V
d. I II IV III VI V
50. What is the effect if there is no substantial compliance with the registration of certificate of limited partnership with the SEC?
a. The partnership contract is null and void.
b. The limited partnership exists.
c. The partnership will be considered a general partnership.
51. Which of the following statements concerning a limited partnership is incorrect?
a. Additional limited partners may be admitted after the formation by filing an amendment to the original certificate without dissolving the limited
partnership.
b. The retirement, death, civil interdiction, insanity or insolvency of a general partner dissolves the limited partnership.
c. The retirement, death, civil interdiction, insanity or insolvency of a limited partner dissolves the limited partnership.
d. An industrial partner may become a general partner but is not allowed to become a limited partner.
52. The Negotiable Instruments Law is also known as
a. Act No. 2031
b. Act No. 3021
c. Act No. 2130
d. Act No. 3120
53. The following are the functions of negotiable instruments, except
a. They are a substitute for money.
b. They increase the purchasing medium in circulation.
c. They increase credit transactions.
d. They are intended as legal tender.
54. It is an attribute of a negotiable instrument which means that as the instrument is passed from one person to another, secondary contracts are
entered into thereby increasing the chances of the holder to collect the amount payable on the instrument.
a. Accumulation of secondary contracts
b. Negotiability
c. Assignability
d. Tenderability
55. It is an attribute of a negotiable instrument which allows it to be passed from one hand to another similar to money, so as to give the holder in
due course the right to hold the instrument and collect the sum payable, for himself free from defense.
a. Accumulation of secondary contracts
b. Negotiability
c. Assignability
d. Tenderability
56. The following are the kinds of negotiable instruments, except
a. Promissory note
b. Bill of exchange
c. Checks
d. Bill of lading
57. Which of the following statements pertain to promissory note?
a. It is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or
determinable future time, a sum certain in money to order or to bearer.
b. It is an unconditional order in writing addressed by one person to another signed by the person giving it, requiring the person to whom it is
addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.
c. It is a bill of exchange drawn on a bank payable on demand.

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58. The following are the parties in a promissory note, except

a. Maker
b. Payee
c. Indorsee/Indorser
d. Acceptor

59. The following are the parties in a bill of exchange, except

a. Payee
b. Drawer
c. Drawee-Acceptor
d. Maker
e. Indorser/Indorsee
60. The following are the essential requisites of a negotiable instrument: (W-U-D-O-D)
a. W It must be in Writing and signed by the maker or drawer.
b. U It must contain an Unconditional promise or order to pay a sum certain in money.
c. D It must be payable on Demand, or at a fixed or determinable time.
d. O It must be payable to Order or bearer.
e. D Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.
61. Determine whether or not the following instruments are negotiable:
a. I promise to pay B or bearer the sum of P10,000. sgd A.
b. Mr. Y will oblige X by paying Z or order P1,000 on his account. To X. Sgd Z.
c. I agree to pay to the order of B P1,000. Sgd. A
d. Good to X or order P1,000. Sgd. A.
e. Due X P1,000. Sgd. A
f. Due X or order on demand P1,000. Sgd. A
g. Pay to X or bearer P1,000 if he marries Z. To Z. Sgd. A
h. I promise to pay to B or order P1,000 ten days after the death of X. Sgd.A.
i. I promise to pay X or order P1,000 (30) days from this date, at 5% interest. Sgd. A.
j. I promise to pay to B or order P1,000 together with all sums that may be due to him on December 31,1950. Sgd A.
k. I promise to pay to B or order P1,000 in carabaos. Sgd. A.
m. I promise to pay to B or his order $1,000. Sgd. A
n. I promise to pay X or order P1,000 on or before December 2. Sgd A.
o. Pay to B or his assigns P1,000. To X. Sgd. A
p. I promise to pay to the order of bearer P1,000. Sgd. A.
q. I promise to pay to B or his agent or his collector, the sum of P1,000. Sgd. A
r. Payable to possessor P1,000 on demand. Sgd A.
s. I promise to pay to bearer B P1,000. Sgd A.
t. I promise to pay to B P1,000. Sgd. A.
62. The sum payable is sum certain for negotiable instruments although it is to be paid under the following instances
a. With interest
b. By stated installments
c. By stated installments with escalation clause
d. With exchange, whether at a fixed rate or at a current rate.
e. With costs of collections or an attorneys fee
63. Which of the following instrument is not negotiable because the sum is not certain?
a. I promise to pay to B or order P1,000 in installments.
b. I promise to pay to B or bearer P1,000 in four equal monthly installments beginning January 1,1985.
c. I promise to pay to the order of B the sum of P100 in two installments as follows: (1) P45 on Feb. 1,1985 and (2) P55 on June 1, 1985.
d. Pay to B or order $1,000 on the current exchange rate.
e. Pay to C or order P1,000 with 12%interest until paid and with collection costs and attorneys fee if not paid at maturity.
64. A promise is unconditional for negotiable instruments although coupled with the following, except
a. An indication of a particular fund out of which reimbursement is to be made.
b. An indication of a particular account to be debited with the amount.
c. A statement of the transaction which gives rise to the instrument.
d. An order or promise to pay out of a particular fund.
65. Which of the following instruments is non-negotiable because of conditional promise?
a. Pay to B or order P1,000 and reimburse yourself out of my money on your hands.
b. Pay to B or bearer P1,000 and debit the amount to my receivable.
c. Pay to B or order P1,000 out of my salary in the company.

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d. Pay to B or order on account of contract between you and ABC Inc.

66. The following are considered determinable future time, except
a. At a fixed period after date or sight.
b. On or before a fixed or determinable future time specified therein.
c. On or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening be uncertain.
d. Payable upon a contingency upon the happening of the event.

67. Which of the following instruments is non-negotiable because it is not payable in a determinable future time?
a. 60 days after sight, pay to the order of J P1,000.
b. On or before December 31,1985, I promise to pay X or order P1,000.
c. On the death of X, I promise to B or order P1,000.
d. 10 days before death of A, I promise to pay B or bearer P1,000.
e. I promise to pay X or bearer P1,000 10 days after B passes the bar examination.
68. The following provisions do not affect negotiability, except
a. Authorization of sale of collateral securities in case the instrument be not paid at maturity.
b. Authorization of confession of judgment if the instrument be not paid at maturity.
c. Waiver of the benefit the law intended for the advantage or protection of the obligor.
d. Giving the holder an election to require something to be done in lieu of payment of money.
e. An order or promise to do any act in addition to the payment of money.
69. Which of the following instruments is non-negotiable?
a. I promise to pay to bearer P1,000 and to deliver him two carabaos.
b. I promise to pay to B or order P1,000 on December 1,1985, provided, howeber, that if this note is not paid at maturity date, the ring pledged may be
sold at public auction.
c. Six months after date, I promise to pay to B or order P1,000 waiving the right to appeal and all of valuation appraisement.
d. I promise to pay B or order P1,000 or 10 dogs at the option of holder.
e. I promise to pay B or order P1,000 or 10 dogs.
70. The validity or negotiable character of an instrument are not affected by the following, except
a. It is not dated.
b. It does not specify the value given, or than any value had been given therefore.
c. It does not specify the place where it is drawn or the place where it is payable.
d. It bears a seal.
e. It designated a particular kind of current money in which payment is to be made.
f. It is not signed by the maker or drawer.
71. The following are the instances when a negotiable instrument is payable on demand, except
a. Where it is expressed to be payable on demand, or at sight or on presentation.
b. Where it is payable at a fixed period after date or sight.
c. Where no time for payment is expressed.
d. Where an instrument is issued, accepted, or indorsed when overdue, as regards to the person issuing, accepting or indorsing it.
72. The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the
order of the following
a. A payee, who is not maker, drawer, or drawee
b. The drawer or maker
c. The drawee
d. Two or more payees jointly
e. One or some of several payees
f. The holder of an office for the time being
g. Bearer
73. The following instruments are payable to order, except
a. I promise to pay to the order of B P1,000.
b. Pay to the order of ourselves P100.00. To B.
c. I promise to pay to the order of myself.
d. I Promise to pay to yourself or order. To Y.
e. I promise to pay to A and B or order P1,000.
f. I promise to pay to the order of A or B P1,000.
g. I promise to pay to the order of cashier of DLSL.
h. I promise to pay to the order of the bearer.
74. The following are the instances when the instrument is payable to bearer, except
a. When it is expressed to be so payable to bearer.
b. When it is payable to a person named therein or bearer.
c. When it is payable to the order of a fictitious or non-existing person, and such fact was known to the person making it so payable.
d. When the name of the payee does not purport to be the name of any person.
e. When the only or last indorsement is an in indorsement in blank.

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f. When it is payable to a specified person.

75. The following instruments are payable to bearer, except
a. Pay to bearer P1,000.
b. Pay to B or bearer P1,000.
c. Pay to the order of Spiderman-Wolverine P1,000.
d. Pay to cash. Pay to the order of money. Pay to the order of cash.
e. Pay to X or order P1,000. To Y. Sgd G. Indorsement. Sgd Y.
f. Pay to bearer B P1,000.

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