UNIVERSITY OF SAN JOSE – RECOLETOS
School of Law
COURSE SYLLABUS
Course Title: Negotiable Instruments Law
No. of Units: 3 units
Atty. Stephanie A. Claros
I. COURSE DESCRIPTION
II. COURSE OUTLINE
WEEK TOPIC
1 Introduction to the NIL
Purpose of Negotiable Instruments
Character of Negotiable Instruments
Important Concepts of the Law
Requisites of Negotiability
Life Cycle of a Negotiable Instrument
Parties to Negotiable Instruments
2 Form and Interpretation
Requisites of Negotiability
Kinds of Indorsements
3 Indorsement continued…
 Conditional Indorsement – Sec 39
 Successive Indorsement – Sec 50 in
relation to Sec 48, Sec 121
 Irregular Indorsement –Sec 64
Completion and Delivery
Sec. 14
Sec. 15
Sec. 16
Forgery
Sec. 23
JURISPRUDENCE
 Phil. Educ. Co. Inc. v.
Soriano, 39 SCRA 587
 BPI v. Spouses Royeca, G.R.
No. 176664, July 21, 2008
 PNB v. Rodriguez, G.R. No.
170325, September 26, 2008
 Gempesaw v. Court of
Appeals, February 9, 2003
 Metropol (Bacolod) Financing
and Investment Corporation v.
Sambok Motors Company,
G.R. No. L-39641, February
28, 1983
Sec 14
• Bank of America NT & SA v.
Philippine Racing Club, G.R.
No. 150228, July 30, 2009
• Patrimonio v. Gutierrez, G.R.
No. 187769, June 4, 2014
Sec. 16
 San Miguel Corporation v.
Puzon, G.R. No. 167567,
September 22, 2010
 DEVELOPMENT BANK OF
RIZAL vs. SIMA WEI et
al, G.R. No. 85419, March 9,
1993
Forgery
Drawer –
 PNB v. Quimpo, G.R. No. L-
53194 March 14, 1988
 SAMSUNG v. FEBTC, G.R.
No. 129015. August 13, 2004
 BPI v. CASA, G.R. No.
149454. May 28, 2004
 PNB V CA, G.R. No. L-
26001, October 29, 1968
 MWSS v. CA, G.R. No. L-
62943 July 14, 1986
Payee/Indorsement
• Great Eastern Life Insurance
Co. vs. Hongkong & Shanghai
Bank, G.R. No. L-18657,
August 23, 1922
 • Gempesaw v. CA, G.R. No.
92244 February 9, 1993
• Associated Bank v. CA, G.R.
No. 107382/G.R. No. 107612,
January 31, 1996
• BPI v. CA, G.R. No. 102383
November 26, 1992
• Allied Banking Corporation v.
Lim Sio Wan and
Metropolitan Bank and Trust
Co., G.R. No. 133179, March
27, 2008

Principle of Desirable Shortcut

Westmont Bank v. Ong, G.R. No.
132560, January 30, 2002, 375 SCRA
212.
Manila Lighter Transportation, Inc. v.
CA and CHINA BANKING
CORPORATION, G.R. No. L-50373
February 15, 1990

Missing Indorsement
METROPOLITAN BANK AND
TRUST COMPANY v. BA Finance
Corp. and Malayan Insurance, G.R.
No. 179952, December 4, 2009

4 Forgery v. Material Alteration Material Alteration

Section 125  PHILIPPINE
Section 124 in relation to Sec. 14 and Sec. 62 NATIONAL BANK,
vs. COURT OF APPEALS,
CAPITOL CITY
DEVELOPMENT BANK,
PHILIPPINE BANK OF
COMMUNICATIONS, and F.
ABANTE MARKETING,
G.R. No. 107508,
April 25, 1996
 METROPOLITAN BANK
AND TRUST
COMPANY, vs. RENATO D.
CABILZO, G.R. No. 154469,
December 6, 2006
 Montinola v. PNB, G.R. No.
L-2861             February 26,
1951
 Areza v. Express Savings
Bank and Potenciano, G.R.
No. 176697, September 10,
Parties to Negotiable Instruments 2014
 Holder for Value – Sec. 24, 25, 26, 27,
 Want of Consideration – Section 28
 Accommodation Party – Section 29 Valuable Consideration
 Holder in Due Course – Sec. 51 until Sec. VICKY C. TY, vs. PEOPLE OF THE
59 PHILIPPINES, G.R. No. 149275,
 Shelter Rule – Sec. 58 September 27, 2004

Holder for value

CALTEX (PHILIPPINES), INC., 
vs. COURT OF APPEALS and
SECURITY BANK AND TRUST
COMPANY, G.R. No. 97753 August
10, 1992

Accommodation Party
 Ang v. Associated Bank, G.R. No.
146511, September 5, 2007
Garcia v. Llamas, G.R. No.
154127. December 8, 2003

Holder in Due Course

 Spouses Violago v. BA
Finance Corporation, G.R. No.
158262, July 21, 2008
 CONSOLIDATED
PLYWOOD INDUSTRIES,
INC., HENRY WEE, and
RODOLFO T. VERGARA vs.
IFC LEASING AND
ACCEPTANCE
CORPORATION, G.R. No.
72593 April 30, 1987
 STATE INVESTMENT
HOUSE, INC., vs. COURT
OF APPEALS and NORA B.
MOULIC, G.R. No. 101163
January 11, 1993
 Ocampo v. Gatchalian, G.R.
No. L-15126 , November 30,
1961

Shelter Rule:
Fossum v. Fernandez Hermanos, G.R.
Avoidance of Liability No. L-19461, March 28, 1923
 Real defense v. Personal defense (Sec.
55)

Parties Primarily Liable v. Parties Secondarily

Liable

Liabilities of Parties to Negotiable Instruments

Sec. 60 until Sec. 69
Liability of Acceptor
Liability v. Warranty Far East Bank and Trust v. Gold Palace
Liability of the Maker Jewelry, G.R. No. 168274, August 20,
Liability of the Acceptor 2008
Liability of the Drawer
Liability of the Indorser
 General Indorser
 Qualified Indorser
 Irregular Indorser
 Indorser of a Bearer Note
 Order of Liability
Liability of Parties Negotiating by Mere Delivery

5 Presentment For Payment Far East Realty Investment v. Court of

Sec. 70-88 Appeals, G.R. No. L-36549, October 5,
1988
• REQUISITES OF SUFFICIENT International Corporate Bank v.
PRESENTMENT Spouses Gueco, G.R. No. 141968,
• NECESSITY OF PRESENTMENT FOR February 12, 2001
PAYMENT
• PARTIES TO WHOM PRESENTMENT
FOR PAYMENT SHOULD BE MADE
• DISPENSATION WITH
PRESENTMENT FOR PAYMENT
• DATE AND TIME OF PRESENTMENT
• DISHONOR BY NON-PAYMENT
 Notice of Dishonor
Sec. 89 to 118

• REQUISITES OF NOTICE OF
DISHONOR
• FORM OF NOTICE OF DISHONOR
• PARTIES TO BE NOTIFIED
• TO WHOM NOTICE OF DISHONOR IS
GIVEN
• NOTICE TO INDORSERS
• PARTIES WHO MAY GIVE NOTICE
OF DISHONOR
• WHEN NOTICE OF DISHONOR
GIVEN
• WHERE NOTICE OF DISHONOR IS
GIVEN
• WHO BENEFITS FROM GIVING
NOTICE OF DISHONOR
• WAIVER
• DISPENSATION WITH NOTICE
• WHEN NOTICE OF DISHONOR NOT
NECESSARY
• EFFECT OF FAILURE TO GIVE
NOTICE
• DISHONOR BY NON-PAYMENT

6 DISCHARGE
Sec 119-123
7 BILLS OF EXCHANGE Acceptance
Sec 126-131 RCBC SAVINGS BANK v. NOEL M.
Acceptance ODRADA, G.R. No. 219037, October
Sec 132-142 19, 2016
Presentment for Acceptance
Sec 143-151
Protest
Sec 152-160
8 BILLS OF EXCHANGE
Acceptance for Honor
Sec 161-170
Payment for Honor
Sec 171 to Sec 177
Bills in Set
Sec 178-183
9 Promissory Notes and Checks Crossed Check:
Sec 184-189 BANK OF AMERICA, NT & SA v.
ASSOCIATED CITIZENS BANK,
Crossed Checks BA-FINANCE CORPORATION,
Manager’s Checks MILLER OFFSET PRESS, INC.,
UY KIAT CHUNG, CHING UY
SENG, UY CHUNG GUAN SENG,
and COURT OF APPEALS, G.R. No.
141001, May 21, 2009

Manager’s Checks
RCBC SAVINGS BANK v. NOEL M.
ODRADA, G.R. No. 219037, October
19, 2016