qerndition yenskenc of Gait -casuly motrants are considered nope = An inser: is conscaved Paya Bearer neo ie §5payatie tothe order t's Reaon or non-sunng pack and ch ac know tobe parson mains tse maa 8 Bain ore fie © Nort tmtrg: No. 21 ase. 4 Noaiwtatve, nz eae ie ss 8 borrowed Ppt milion fam L and offer! to hin his BH car worth Poot Millon 9s. collateral E then’ sxawated Promissory note thet reads: “lS, promise to pay tor Wastes {he amount of Pht Millon and te kews ray Beil Carne collateral) free from any other encuriurance. Sanea, Boe 5. Yes, since Ils payable to bearer. Yes; since it contains an Unconditional promise to pay a sin eta in mney. io, nee contains a {he paymant af money. Just pay a 9um af money is a Promise to de an act in addon to , debror of C, wrote a promissory note payable to the order of G:C brather, M, misrepresenting hrmsell 9s Cis soca, obtained the note thom Dy then negotigted. t to Nain forging Cs signature. N indorsed re to € wis indorsed Wes, ahalder in dus course. May F recover tom £2 9, No, since the forgery of Ce signature results in tho techarge of >. Yes, since only the forged signeture Is inoperative and © Is bound os indorser. 9s forged Yes, since the signature of Cis unmotenal, Be Beg the 16. c Consider these two statements Tan instrument’ originaly payable be converted into 9 bearer instrument converted ima an order insvomvent. a. Both statemunts are tue 3. Both Statements are fac Statement Tie ue; Statement If false GL Staternent tifa, Statament tts see to order may Drees i eee 8, Which ofthe falowng omissions an the face of an instrument villrancer fe non-nagotane> 3. The omission ofthe date of issue 5. The “omission of ‘any statement that value has been iver, he omission of the draws. 14. The omission of the signature af the maker above his ‘ypennitten name lace where the instrument was 19. 1 promise to pay to the order of x P100,000 in two equel instalment. The 2 payment is on January's. 2012. (saa 4 2." The instrument is non negotiable because tra payment ot 1" installment. was not faxed and thesctoce b. The instrument is negotlable because the payment is onsigered payabie on demand and the 2” paymens vias Mixed on January Ss S012 ©The instrument's han negotable because the instrument ‘S payable on instalment and te ate ef poyrnent oF Doth 1 and 2 instalment wae not stated 4, The instrument "cannot "be determined, whether it is negotiable or non negotiable 6 22, 6 D 7 = : = limited outhonty to sign. Thus. a parsan whe akes's Bit thor i draw aceapted, OF indersed by pracuration fy uty base {o nauite into the extort of the agents suthonty be examining the agent's special power of ataraey b. examining the bil t datermin the extent of such asking the agent avout the extent af such authorky > 'g the princloal about *he extent of Such auth. ments Law, 9 signeture by Ge That the ogent har but & ln 8 sigcature by procuration, the principal & boureé only in fase the agent acted within te Retual lots of hs auton te Tre sanate case operates wots 2.2 cual authority o sigh 5 limtea authenty ce sign © special authority te sign Due to his debt to C, © wrote 2 promissory note which is ppavable £0 the order of =. C's brathen, Hy Mlarepreseatiey himself a agent of C. obtained the rote’ from Beh wee ‘egavated the note to W after Torun the signature tC. Mey as Yes, since'D is the orincipat debtor 10 No, since the signature of was forged © Ne. since Wis C who ‘can enforce the note being ava to the ota 8. Yebyaince D, 26 mater I pinay Hable on the note Forgery of bis of exchange Aavior's signnture, shel & suthout acceptance but Owe bile pat by 1 taser with acceptance but tive bil pale by tke drawer may be subvlded into, 9) ‘an the bt anid 8) Forgery of the ray ther be with meceptane hy X found « check on the street, seown by ¥ aginst ABC Bank, with 2 payee. X forge 2s signature as an intone Gees indorsed © personally ard delivaret to Der wank, Re latter, n turn, indorseet I to ABC Bank wien cna nS, forgery a5 its defense. Wil prosper? aol, Rince the payae's sgh hes bean forged, Bas Oe ety fn te Yes, since ABC Bones Bound to Hew the cignature 1 a pramissory note whieh reads Is signed by twa ar more makers 2°°0'hn instrument hich contains on order oF promise to do any. 2et In addition to the. payment af money se noe “we promise to pay ete. the Habilty i= Joint and © Bort tater No.2 & fatce‘A ncqatiable instrument can be indorsed by way of a testnictive ingorsement, which prohibits further negobstion land constitutes the indarsee aS agen! of the indorser. As agent, the indorsee has the right, among others, £2 {demand payment of the instrument only. b. notify the drawer ofthe payment ofthe istrument 8 receive payment of the instrument, 4. astuct that paymert be made tothe drawes The rule ts that the intentional cancellation of a person Secondary liable results in the discharge of the latter. With respect to an indorser, the holde:'s night to cancel his Signatere is: 2. nithcut limitation, . not limited to the case where the indorsement necessary to is tide © limited to the case where the indorsement Is not necessary to his tite. @. ited to the case where the indorsemant is necessary to his le 16. 6 A holder in due course holds the instrument free from any feted of title of prior parties ard free trom defense avaiable te pnor parties among themselves, An example of such a dafense is 2. traud in ineicament duress amounting to foraery su esse contractus alteration A restrictive endorsement constitules the indorser a mere assignor of the tls tothe instroment 2" A restricted indorsement- which vests ttle inthe indorsce w trust for another person renders the instrument to become non-negotiable. 2, Bath ere ue Db. Both are fase fio, 1's ue, No. 2s false @. Mo, false, No.2 i true B “Pay to € for collection onty, Sgd. 8° is an example of 2 Cy \esictive ype of endorsement bch is dlassiied as 2. Frohibitive tye 5. auency type 13 © Trust ype eL Rlof the above ‘as maker makes a promissory note for P500,000 payable to the order of B a: payee. The note is successively ‘egtiated from B to C2, D did leaving as an only hel S Uecomes the owner of '< note = a. By assignment BY operation of law sy negatiation | @. Mone of tre above 1. The her may at any time strike out any endorsement that 5 mot necessary to tis ttle. The endorser whose Signature is struck out, and all subsequent endorses, 1s thereby relieved from lability on the Instrument. 2 Where the instrument fs negotated back toa prior party, Such party may reissued and further negetate the same but he is not entitled to "enforce payment thereot against any intervening party to whom he was personally Hable, a. Both are true, 2 Both are fase, No. 11s true; No.2 is false. J. No.1 is false; No.2 is tue Statement 1: The Negobable instrument provides that a holder notin due course cannot recover on the instruments. Statement 2: A holder in due course who acquires a bearer instrument from a thief or finder wil have a superior right over the previous holder from whom it & stolen Or who has lost 16. a. Orly the 1 staroment is true Bb. Only the 2” statement ie tree © Bath statement are nat trie 4, Beth statement are true AA sssued a negotiable promissory note ta the order of B for 20,000 payable after 3) days alter date. Lator 8 indorsed i WC. Then X suole the nove fram C, forged the signature of C ‘nd neyouiated ik ta D, and D toe, € to F, the holder. On "icy ofthe note, which ofthe following statements Is not ec and vais? ® F cannot collect from C because it was C's signature whlch was forged b. Fecan collect from A because A cannot put up forgery as his deter Frcan collect tram ether bor €, because thar signature ‘are genuine and the note is operative against them &. F cannot collect fram # because Bis party prior to the forgery Lich oF the folowing sicumstarces woul! prevent a person From becoming a holler in due course ef an instrument 3. The person was nobfied hat one af the prior indorses| was Gichargedt The personas nated tha payment Was reused © The note vias collateral for 3 loan 4. The note was purchased ate oiscount Viel of the following ot Is inearroct™ 2. The Indovsoment must be uf te whol instrament, The signature of the indorser whut adtonal sors is stint. IorSers are Hable the veer i which they indore 4. WFan instrument is delivered wkhotdndorsemem ‘negotiation takes affac atthe time of sivery avon if the instrament is subscouently indore. Identity the flowing indorsement "Pay (9 &, without recourse” Sid P 2. Gualited © Special qualified D. Blonie 41 Quaid restrictive ‘A instrument payable to bearsr may be negouatt through any ofthe following means, excent 8, Special indorsement pus delivery. b. mere delwery, © lank indocsement ps delivery ie dalvery is cequirad as lng a5. there sgrssement, whether blank or special An inursement where the indorser waives the bene of any w Intended for his protection s known as 1. an absolute indersemert. ' facutative inderseren €& contional indorsement 4. a suceesswe mdorsement Hi inakes @ note payable to the order of & P speciaty indorses the nove to, specaly inorses the note ta, & indorses the note in blank and delivers i to:C, C specially Indorses the note to 0, D specially Indorses the note to hele Which of the indorsemonts may M strike out” 3, The special indorsement of P to A, The blank indoreersent of 3 mC The special ndorsement of C to 4, The special indorsement of to H. A holder not in due course has the folowing rights, except 2. He may receive payment and if the payment isin due course the instrument © dscharged b.Heimay sue on the instrument, in his ov name‘ 6 He eannt recover on the instrument, He ‘s entited to the instrument but hols it subjeet to the same defense as iit were non-negotiable. 17, 1%. where a negotabe instruments dosed cantina, the person ibe on the ‘nsvumene may regen Conan and egy pay te ame 22 seal posible ft 8 panto be boa hole io ue course and 2 nonoler tn due course mith vespee fk Bese natiinaemee 2. Both ae sue b: Bothare fe & Ne ett Re 2i8 ae 4. Nell tae Risa M makes a note payable te the order of Pincers the role tos, ATO, B Loe, CD, DID E, and E sacks Based on the foregoing, which of tne folowing staterrents i ‘incorrect? ‘9. Amay renegotiate the promissory nate b. A camot go after 8, ¢, D and E. © B,C, 0 and E enjoy temporary defence if Ais the holder. Uf the instrument is renegotiated by A to F, the latter cannot go after 8, C, O and E ay the ingorsee of a promissory note indorsed to him “for deposit” file a sult against the indorser? Yes, as long as the indorser recelved value for the restrictive indorsement. Yes, as jong as the indorser received value for the conditional ndersement & Yes, whether or not the indorser received value for the conditional indorcement. Yes, whether or not the indarser received value for the restetive indorsement, 8 20, 2 wrote out an instrument that states: “Pay to X the amount ‘of Phot Million for collection only, Signed, 2." x indorsed i to his creditor. ¥, to worn he owed Php milion. now wants {0 collact ond Satisfy X's debt through the Php! milion on the ‘check, May he waialy do 50? 2. Yes, since the indorsement to ¥ is for Php Mion, No, Since Zis nota party tothe lean between ¥ and ¥. No, since X is merely an agent af 2, hs only nght being to collect 4. Yes, since X owed ¥ Php Mion H makes a promissory note that states: “l, M, promise to pay Pnp§,000.00 to 8 oF bearer. Signed, H." H negotiated the note by delivery to 8, B to N, and N to O. B had known that 4 was bankrupt when M issued the note. Whe would be leble too? {5% Mand since they may be assumed to know of Hs bankruptey b. Ny being O's immediate negotiator ofa bearer note 8; Hand N, being indorsers by delivery ofa bearer note J.B, having known of M's bankruptcy 22. A ts maker of a promissory note payable to the oider of {and then successively negotiated to C to D to Eto F to S who |g the holder. G strikes out intentionally the Indorserment of c a Only cis discharged. A ane D are discharged but not & and F Al OFC, 0, & and Fare discharged; C by the striking out ot his indorsement and D, E and F by discharge o! 2 prior pany. No one ts discharged because the problem does not say that the striking out of the inéorsemant wae before oF after the maturity of the instrumest b 25. A makes promis nte payable tothe order of 8, but Gefters Rise Who maybe conde nage tr noe uss sate ana Be Rather Bor 24, Under the Negotiable Instruments Law, ifthe holder hes a lien on the instrument which arses either from a contract oF by implication of la, he wculd be 2 holdks for value to the extent of 2. his successors interest b. his predecessor's anterest © thelieninhis favor 4d, the amount indicated on the Instruments face 25. M sions a promissory note payable to the order of P which is. lank as to amount. 6 delivers the note to ? with instructs to type the antount of P20,000,00 on the blank. P, haweve! types the amount of PS0.060.00, and negotstes the same to A, AB, Bto, and Cto H, a holder in due cnurse. AS, ¢ ad also # had ne knowledge oF tne wrunef competion cl the blank 3H may collect from M nothing because P violated H's + structions >. may collect from 720,000.00 the amount M Instructed P t piace on the space for Une aro. © H may colec from M 50,000.00, the amount actual, placed by F H may collect from A, 8 ot € 920,000.00 since they hat no knowiedge of the wrongful completion, 4 26. Abholder in due course isa holder who has taken the instr ‘ment under the following conditions Po notice of any infty im the instrument or dete! the title af the persun negotiating 8. Allef the above 2, A Placido, a bank depostr, left his checkbook ai his dest at his house. Unknown to him, 2 vita at the ti, noting Sama, look 2 chack therefrom, fild # #9 the amouat 3,000 and succeeded in erashing the check on the 0 ay. Placide' scours wine thetuby debite tke am amount. Discovering the erroneous eit, Placita demand that th ‘bank credit vim with like amount. The hank rehcet 0 ground that Flscda was negigenr in feaving his chests fn his desk so that ne could not put up the defense Fargesy of want of authority under te Negotiable Instrum La ‘The facts disclose that even to the naked eye, there: wer riarked differences between Pacida’s signature wd the one Inthe check forged by the visitor, As between Placid ans the bank, who shoule ear the loss? 3. The bank should bear the loss because tne bané vwarants the genuneness of the signature vf as carer? depositor The bank is no Hable because the sole cause of the In Is due to tre nagigence of Plarklo leaving | ‘checkbook on his desk at his house © Plachio must suffer the loss because he i nenligence keeping his check , Place should bear the toss because the bank eesti reasonable diigence In determining that the signet not forged,