Negotiable Instruments Law

1. It is also known as Equitable Defense.

- Personal Defense
2. The party who is primarily liable in Bill of Exchange.
- Acceptor
3. It is the first negotiation of a Negotiable Instrument.
- Issuance
4. It is the kind of instrument that can be enforced anytime.
- Demand Instrument
5. It is a kind of instrument that can still be negotiable even if there is no identifiable
payee.
- Blank Instrument
6. What are the requisites to become a holder in due course?
- Sec 52
7. Enumerate the features of a negotiable instrument.
- Negotiability
- Accumulation of Secondary Contracts
Determine whether the instrument is negotiable or not. If it is negotiable, no need to
explain. If it is non-negotiable, explain why it is non-negotiable. 2 pts each. Wrong
answers will be deducted from the final score.
1. I promise to pay Mr. Tino Lee or order the amount of ONE MILLION US DOLLARS
(US 1,000,000.00) ten days after he gets married. Sgd. Atty. Larry Piedad.
2. Pay to Mr. Tino Lee or order ONE HUNDRED THOUSAND PESOS in one year from
March 9, 2018 in monthly installment.
To Mr. Angel Tan and Mrs. Edna Chan
Sgd. Atty. Larry Piedad
3. Pay to the order of Mr. Tino Lee ONE MILLION PESOS and reimburse yourself out of
my salary as a law professor to be claimed from Ms. Ester.
Sgd. Atty. Larry Piedad
4. As a payment for the purchase of a car, I promise to pay ONE MILLION PESOS to
Mr. Tino Lee to be payable in 36 monthly equal installments starting April 1, 2018.
Sgd. Atty. Larry Piedad

Essay
1. Alma issues a negotiable promissory note payable to Beth or bearer. After the
maturity of the instrument, Beth misplaces the note. Yola found the note and pretending
to be Beth, indorses the note to Cecille by forging the signature of Beth. Charlie
indorses the note to his minor sister, Dina. Thereafter, Dina delivers the instrument to
Eva.
a. May Alma be held liable on the note? Explain briefly.
b. Explain the liability or non-liability of each party mentioned.
2. Alvin signed a blank check with Boboy as payee. Alvin kept it in his bag. Boboy stole
the said check and filled in the amount of FIFTY THOUSAND PESOS, the indorsed it to
Cora who also qualifiedly indorsed it to Debra.
a. If the drawee bank will dishonor the check, can Debra hold Alvin liable to the
instrument? Explain briefly.
b. Would you answer the same if Debra is a holder in due course?
c. Who is/are secondarily liable to Debra? Explain the liabilities of each party.
3. …”Pay to Carol without recourse. Sgd. Benny,” Carol, afterwards, endorses the note
in blank to Dado. Dado negotiated the note by delivery to Dennis. Dennis specially
endorsed it to Eva. Then, Eva indorsed it in blank to Flora.
a. If Flora is a holder not in due course, can she enforce the instrument to Ado? Explain
briefly.
b. Assume that Flora is a holder in due course who cannot collect from Ado due to the
latter’s insolvency, to whom can Flora enforce the note?
c. If facts are different wherein Flora is HNIDC and Ado is insolvent but Ado’s signature
is forced, to whom can Flora enforce the instrument?