UEP COLLEGE OF LAW

FINAL EXAM IN NEGOTIABLE INSTRUMENTS

April 23, 2018 5:30-7:30PM

This questionnaire consists of twenty (21) numbers in three pages. Read

each question carefully. Answer legibly and briefly but comprehensively. Start
each number on a specific page; an answer to sub-question, under the same number
may be written continuously on the same and immediately succeeding pages until
completed. Do not repeat the question. A mere “Yes” or “No” answer without any
corresponding discussion will not be given credit.

HAND IN YOUR NOTEBOOK WITH THIS QUESTIONNAIRE.

GOOD LUCK!

1. A bank refuses to pay the payee despite availability of funds in the account
due to a material alteration in the check. Can the unpaid payee sue the bank?
(5 pts)

2. Define the following:

A. Crossed check (2 pts)
B. Cancelled check (2 pts)
C. Manager’s check (2 pts)
D. Certified check (2 pts)

3. A drew a check against her current account at BPI in favor of C and had the
check certified. Although A did not have sufficient funds, the bank honored
the check when it was presented for payment. Apparently, A conspired with
the bank’s bookkeeper so that the records would show that she still has
available funds. May the bank recover from C? (5 pts)

4. A promissory note states, on its face:

“I, X, promise to pay Y the amount of P5K five days after completion
of the on-going construction of my house. Signed, X.” Is the note
negotiable? (5 pts)

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 5. Can a bill of exchange or a promissory note qualify as a negotiable
instrument if it names two alternative drawees? (2 pts)

6. Discuss the negotiability or non-negotiability of this note:

“I promise to pay Aso or order P 1,000 in installments. Signed,
Baboy.” (5 pts)

7. Discuss the effect upon negotiability if no date is given. (2 pts)

8. Can a bill of exchange or a promissory note qualify as a negotiable

instrument if it is payable to cash? (3 pts)

9. Is this note negotiable?: “Received from Miss Pacifica Jimenez the total
amount of P10,000 payable six months after the war, without interest.
(5 pts)

10. Discuss whether this note is negotiable or not: “Due Aso – P1,000. Signed,
Baboy.” ( 5 pts)

11.X executed a promissory note with a face value of P50K, payable to the
order of Y. Y indorsed the note to Z, to whom Y owed P30K. If X has no
defense at all against Y, how much may Z collect from X? ( 5 pts)

12.May the indorsee of a promissory note indorsed to him “for deposit” file a
suit against the indorser? (5 pts)

13. X issued a promissory note which states “I promise to pay Y or bearer the
amount of HK$50K on or before December 30, 2013. Is the PN negotiable?
(5 pts)

14.Alpha induces Beta by fraud to make a note payable on demand to the order
of Alpha for P5K. Can Alpha file an action successfully against the maker
Beta for the amount of the note? ( 5 pts)

15.M makes a promissory note that states: “I, M, promise to pay P5K to B or
bearer. Signed, M.” M negotiated the note by delivery to B, B to N and N to

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 O. B had known that M was bankrupt when M issued the note. Who would
be liable to O? (5 pts)

16.What is meant by “unreasonable time” as applied to presentment? ( 5 pts)

17.A bill of exchange has T for its drawee, U as drawer, and F as holder. When
F went to T for presentment, F learned that T is only 15 years old. F wants to
recover from U but the latter insists that a notice of dishonour must first be
made, the instrument being a bill of exchange, Is he correct? (5 pts)

18.X, a drawee of a bill of exchange, wrote the words: “Accepted, with promise
to make payment within 2 days. Signed, X.” The drawer questioned the
acceptance. Is the acceptance valid? (5 pts)

19.What is the right of a party who discharges instrument? (5 pts)

20.What do you mean by renunciation? (5 pts)

21. Will the following stipulations or features of a promissory note affect or do

not affect its negotiability, assuming that the note is negotiable?

A.) The note gives the maker the option to make payment either in money or in
quantity of palay of equivalent value. ( 3 pts )

B.) The note gives the holder the option either to require payment in money or
to require the maker to serve as the bodyguard or escort to the holder for 30
days. ( 3 pts )