1. X indorsed and delivered this check to the Mr.

B:

Account Name: PEDRO SANTOS No.

123456A
Date: June 3, 2019
PAY TO THE ORDER OF ONE HUNDRED TEN THOUSAND PESOS
ONLY (P100,000.00)
One Hundred Thousand Pesos Only.

ABC BANK
Amorsolo Branch (Sgd.) Pedro Santos
Makati City

In consideration of the above-quoted check, Mr. B in turn, delivered a

check in the amount of PhP95,000.00 to Mr. X. Is Mr. B a holder for
value?

Answer:

Yes, Mr. B is a holder for value. According to Sec 26 of the NIL, where
value has at any time been given for the instrument, the holder is deemed a
holder for value in respect to all parties who become such prior to that time.

In this case, the check has no value because it already lapsed base on the
issuance date.

Therefore, B is a holder for value.

2. Mr. M issued a negotiable promissory note to Mr. P that is payable

to the order of Mr. P on January 2, 2020. On August 5, 2019, Mr. P
delivered the promissory note to Mr. A. Mr. M refused to pay when Mr.
A demanded payment from Mr. M. Mr. M claims that Mr. P is not a
holder for value, to which Mr. P countered that he is presumed to be a
holder for value. Mr. A then demanded payment from Mr. P who also
claims Mr. A is not a holder for value. Mr. A claims that he need not
prove that he paid any amount because he is presumed to be a
transferee for value. Are the arguments of M, P and A correct?

Answer:
Mr. M’s contention is wrong as to P not being a holder for value. P is a
holder for value and is also the first issuance. P’s contention as to A not
being a holder fro value is correct. A is not a holder for value and also not a
holder in due course but A can collect to P because P is already estopped
to A. As to A’s claim is correct that he need not prove that he paid any
amount because he is presumed to be a transferee for value. It will fall
under the incomplete negotiation of order instruments because there is no
indorsement.

3. Explain with example the observation that: The concept of holder in

due course is effectively abolished in consumer transactions in the
Philippines.

The concept of holder in due course is effectively abolished because as of

to date we no longer use promissory note nor bill of exchange. We now use
credit cards or other modes of payment issued by the bank.