Commercial Law, 2011 Bar — Question 3

MULTIPLE CHOICE

A writes a promissory note in favor of his creditor, B. It says: “Subject to my option, I promise to pay B Php1 Million or his order or give Php1 Million worth of cement or to authorize him to sell my house worth Php1 Million. Signed, A." Is the note negotiable? A) No, because the exercise of the option to pay lies with A, the maker and debtor. B) No, because it authorizes the sale of collateral securities in case the note is not paid at maturity. C) Yes, because the note is really payable to B or his order, the other provisions being merely optional. D) Yes, because an election to require something to be done in lieu of payment of money does not affect negotiability.

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