UNIVERSITY

OF SAN JOSE RECOLETOS

School of Law
S.Y. 2017-2018

COURSE SYLLABUS

Course Title: NEGOTIABLE INSTRUMENTS LAW
No. of units: 3 Units/ 3 hours per week

Atty. Julius Christian Reyes

I. COURSE DESCRIPTION:

This course is a comprehensive study of the laws governing negotiable instruments, and other
commercial documents. It also includes other related laws, jurisprudence and legal principles
governing negotiable instruments and other commercial documents.

At the end of the course, the students are expected to learn the different provisions relating to
negotiable instruments. The students are expected to interpret correctly the legal provisions of the
law and apply the said learning in answering bar questions and legal problems.


II. COURSE OUTLINE

Week Topic Additional Reading Activity
Week 1 Introduction Preliminary
• Basic Principles Consideration: Memorize
• Principal Functions of a Section 1 of the
negotiable instrument • Phil. Educ. Co. Inc. Negotiable
• Kinds of Negotiable vs. Soriano, 39 Instruments
Instruments and Parties SCRA 587 Law.
• Incidents in the life of a • PAL vs. CA, 181
negotiable Instruments Law SCRA 557 Lecture
• Characteristics and Legal • BPI vs. Sps.
Tender character Reynaldo Royeca,
July 21, 2008
FORM AND INTERPRETATION OF
NEGOTIABLE INSTRUMENTS Negotiability:

Sec. 1 Requisites of Negotiability • Equitable Banking
(NIL) Corporation vs.
IAC, G.R. No.
(Memorize sections 1 to 10) 74451, May 25,
1988
• Traders Royal
Bank vs. Court of
Appeals, 269 SCRA
15
• Garcia vs. Llamas,
 417 SCRA 292
• METROBANK vs.
CA, 194 SCRA 169
• Phil. Education Co.
vs. Soriano, 39
SCRA 587
• Caltex Phil. vs. CA
212 SCRA 448
• Salas vs. CA,
January 22, 1990
• Rivera vs. Sps.
Chua, January 14,
2015


Week 2 Form and Interpretation Case: Oral Recitation
• PNB vs. Rodriguez Sec. 2 to 10.
Sections 2 to 12. G.R. No. 170325,
September 26, Case Reporting.
(Detailed discussions on the 2008
Requisites of Negotiability). • San Miguel Corp.
• Must be in writing and signed vs. Puzon, Jr.
by the maker or drawer September 22,
• Must contain an unconditional 2010.
promise or order to pay a sum
certain in money (sec. 2 and 3)
• Payable on demand or at a
fixed or determinable future
time (sec. 4 and 7
• Payable to order or bearer
(Sec. 8 and 9)
• Omissions that do not affect
negotiability (sec. 6)
• Additional provisions not
affecting negotiability (sec. 5)
• Terms, when sufficient (sec.
10)

Date: Presumption, Ante-dated and
Post dated.

Week 3 Sec. 13 When date may be inserted. Introduction to Assignment:
Sec. 14 Filling up blanks beyond defenses:
authority Compare and
Sec. 15 Non delivery of incomplete Real and Personal Contrast Real
instruments Defenses and Personal
Sec. 16 Undelivered and Delivered Defenses. Write
complete instruments it in your case
digest notebook
Week 4 Sec. 17 • State Investment Lecture
• Construction( Rules to be House, Inc. vs. CA,
followed in interpreting January 11, 1993
negotiable instruments law. • PNB vs.
Sec. 18-22 Conception Mining
• Liability of Person signing in Co., July 31, 1962
trade or assumed name
• Signature of Agent: authority
and liability.
• Signature by procuration
• Signature by infant or
corporation.

Sec. 23 Forgery
General Concept:
• Unauthorized Signature
• Inoperative Forged Signature
and Cut-off Rule
• Effect on Negotiability
Week 5 FORGERY Cases: Lecture
Graded
• Persons precluded from setting • PNB vs. Quimpo, Recitation
up forgery 158 SCRA 582 Case Reporting
o Warranty • BPI vs. Casa
o Negligence Montessori
o Estoppel and Ratification Internationale 430
• Forgery in Notes (P/N) SCRA 261
o Maker’s Signature • Samsung
o Indorser’s Signature Construction
§ Order Instrument Company
§ Bearer Instruments Philippines vs.
• Forgery in Bill of Exchange FEBTC, 436 SCRA
o Drawer’s Signature 402
o Drawee-Acceptor’s • PNB vs. CA, 256
Warranties SCRA 693
o Negligence of Drawee • BPI Family Bank
o Indorser’s Signature vs. Buenaventura,
§ Order Instruments 471 SCRA 431
§ Bearer Instruments • MWSS vs. CA 143
• Unauthorized/Incomplete SCRA 20
Signatures • Gempesaw vs. CA
Feb. 9, 2003
• Associated Bank
vs. CA January 31,
1996
• Republic vs.
Ebrada, July 31,
1975
• Metropolitan Bank
 and Trust Com. vs.
BA Finance Corp.
Dec. 4, 2009
Week 6 Consideration (Sec. 24-28) Vicky Ty vs. People,
Accommodation Party (sec. 29) September 27, 2004

Accommodation:
• Ang vs. Associated
Bank, G.R. No.
146511,
September 5, 2007
• Lim vs. Saban, G.R.
No. 163720,
December 16,
2004
PRELIM Prelim Exam SUBMIT CASE
DIGEST
Week 7 Negotiation Cases: Lecture
Sections 30-50 Graded
• Dela Victoria vs. Recitation
• Modes of Transfer Hon Burgos, 245
• Concept of Negotiation SCRA 374
(sec.30); distinguished from • Development
assignment Bank of Rizal vs.
• Ways of Negotiation Sima Wei, 219
• Indorsement SCRA 736
o Concept • Metropol
o How made (Bacolod)
o Kinds Financing vs.
o Rules on Indorsement Sambok Motors
Co., et.al 120 SCRA
864
• Sesbreno vs. CA,
May 24, 1993

Week 8 Right of Holder
Sections 51-59 Detail discussion on Memorize Sec.
defenses: 52
• Concept of a holder (sec. 55,56, 57)
• Holder in Due Course • Real and
(requisites) Personal
• Presumption of due course Defenses
• Right of holders in due course • Review on sec.
• Shelter Rule 13, 14, 15 and
16.
• Review on sec.
23
Cases:
• Atrium
 Management Corp.
vs. CA, Feb. 28,
2001
• De Ocampo vs.
Gatchalian, 03
SCRA 596
• Yang vs. CA, G.R.
No. 138074,
August 15, 2003
Week 9 Liabilities of Parties Cases: Lecture
(Sections 60-69) • PNB vs. Bartolome
Picornel, G.R. No.
• Parties primarily liable and 18751, September
parties secondarily liable 26, 1922
• Liability distinguished from • Far East Bank and
warranties Trust Company vs.
• Liability and Warranties: Gold Palace
o Maker Jewellery Co., G.R.
o Drawer No. 168274,
o Acceptor August 20, 2008
o Indorser • Associated Bank
§ General Indorser vs. Tan, G.R. No.
§ Qualified Indorser 156940,
§ Order of liability December 14,
o Parties negotiating by 2004
mere delivery • Ang vs. Associated
o Other cases: Bank, September
§ Irregular Indorser 5, 2007.
§ Indorser of bearer
instrument.


Week 10 Presentment for Payment Cases: Quiz No. 2
Sections 70-88 • Far East Realty
Investment, Inc.
• Parties primarily liable and vs. CA, 166 SCRA
secondarily liable 256
• Steps in enforcing liability • The Internation
o Promissory Note Corporate Bank vs.
o Bill of Exchange Sps. Gueco, G.R.
• Presentment for payment No. 141968, Feb.
o Concept 12, 2001
o Requisites for
sufficiency
o Date of Presentment
o Place of Presentment
o Presentment to the
party primarily liable
o Instances when
 presentment is excused
o When delay in
presentment excused
Midterm Exam SUBMIT CASE
DIGEST
Week 11 Notice of Dishonor Cases: Lecture
Sections 89-118 • BPI vs. Spouses
Reynaldo and
• When dishonor of the Victoria Royce,
instrument occurs G.R. No. 176664,
• Who should give notice of July 21, 2008
dishonor • Producers Bank of
• Form of notice of dishonor the Philippines vs.
• To whom notice of dishonor is Excelsa Industries,
given Inc. G.R. No.
• Time and place of notice 157071, May 8,
• When notice is excused or 2009.
unnecessary
• When delay in giving notice is
excused

Discharge of Negotiable
Instruments
Sections 119-125
• Concept
• How instrument is discharged
• Discharge of persons
secondarily liable.

Week 12 Bills of Exchange Lecture
• Form and Interpretation
(Sections 126-131)
• Acceptance (Sections 132-142)
• Presentment for Acceptance
(Sections 143-151)
• Protest (Sections 152-160)
• Acceptance for Honor (Sections
161-170)
• Payment for Honor (Sections
171-177)
• Bills in a set (Sections 178-183)

Week 13 Checks: Cases: Quiz No. 3
• Kinds • Sps. Moran vs. CA,
• Checks distinguished from G.R. No. 105836,
other Bills of Exchange March 7, 1994
• Relationship between Payee, • HSBC vs. Cecilia
Drawee and Drawer Diez Catalan, G.R.
• Collection of checks No. 159590,
 • Stopping of payment October 18, 2004;
• Firestone Tire and
Rubber Company
vs. CA, G.R. No.
113236, March 5,
2001
Week 14 Warehouse Receipts Law Lecture
Week 15 Basic: Trust Receipts Law and Lecture
Letters of Credit.

Note: These subjects are detailed
discuss in Special Commercial
Laws.
Finals SUBMIT CASE
DIGEST



III. REFERENCES AND MATERIALS

• Pasimio, Renato R. The Negotiable Instruments Law: with Warehouse
Receipts and Law on documents of Title. Mandaluyong City, Philippines
National Bookstore, 2005 ed.
• Aquino, Timoteo, B. Notes and Cases on Banking and Negotiable Instruments
Law Vol. 1. Manila, Philippines, 4th ed. 2014.
• Please note that the professor reserves the right to amend and provide
additional cases and other reading materials.

IV. GRADING SYSTEM

Students will be assessed through series of examinations and class activities, which are
divided into two (2) major components: Major Examinations and Class Standing Activities.
Major Examinations include Prelim, Midterm and Final Examinations. Class standing
activities include the following: quizzes, graded recitation, attendance and case digest.

Final Grade is computed as follows (for illustration purposes only):

Major Examination (70%)

Major Examinations Row Score (sample only) Equivalent Grade
Prelim 100/100 1.0
Midterm 100/100 1.0
Finals 100/100 1.0
Average


Class Standing (30%)

Activity Score Equivalent Remarks
Quizzes 50 Quizzes are
divided into
Prelim, Midterm
and Finals
Graded Oral 20
Examination
Case Digest 30 10 points per
period
Total 100/100 1.0

Computation of the Final Grade:

Final Grade: = Average Equivalent Grade for Major Exam * 70% (A)
= Equivalent Grade for Class Standing * 30% (B)

Final Grade = A + B.