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1.

Pio Baretto vs CA, 360 scra 127 (2001)


2. Roman catholic vs IAC, 191 scra 411 (1990)
3. Traders Royal Bank vs CA 29 scra 15 (1997)
4. Inciong vs CA, 257 scra 578 (1996)
5. G.R. No. 97753 August 10, 1992 CALTEX (PHILIPPINES), INC., petitioner, vs. COURT OF
APPEALS and SECURITY BANK AND TRUST COMPANY
6. G.R. No. 148864 August 21, 2003 SPOUSES EDUARDO B. EVANGELISTA and EPIFANIA C.
EVANGELISTA, Petitioners, vs. MERCATOR FINANCE CORP., LYDIA P. SALAZAR,
LAMEC'S** REALTY AND DEVELOPMENT CORP.
7. G.R. No. 111190 June 27, 1995 LORETO D. DE LA VICTORIA, as City Fiscal of Mandaue City
and in his personal capacity as garnishee, petitioner, vs.HON. JOSE P. BURGOS, Presiding
Judge, RTC, Br. XVII, Cebu City, and RAUL H. SESBREÑO, respondents.
8. G.R. No. 88866 February 18, 1991 METROPOLITAN BANK & TRUST
COMPANY, petitioner,
vs. COURT OF APPEALS, GOLDEN SAVINGS & LOAN ASSOCIATION, INC., LUCIA
CASTILLO, MAGNO CASTILLO and GLORIA CASTILLO, respondents.
9. G.R. No. L-49188 January 30, 1990 PHILIPPINE AIRLINES, INC., petitioner,
vs. HON. COURT OF APPEALS, HON. JUDGE RICARDO D. GALANO, Court of First Instance
of Manila, Branch XIII, JAIME K. DEL ROSARIO, Deputy Sheriff, Court of First Instance,
Manila, and AMELIA TAN, respondents.
10. G.R. No. L-2516 September 25, 1950 ANG TEK LIAN, petitioner, vs. THE COURT OF
APPEALS, respondent.

1) What are the requirements to make an instrument negotiable?

2) Define, differentiate and give at least 3 kinds of the following:


a. promissory note;
b. bill of exchange; and
c. check

3) Sometime in 2019, some businessmen named ARTHUR, BARNY and CRISTOF with an advertising
starting capital totalling only P300,000.00 ask you to help organize a business firm. Subject to
legal limitations, they have future plans to invite alien investors who are agreeable to rendering
financial assistance by way of direct investments and/or loans. Because you are a branded
financial adviser, your professional assistance is solicited on the following various questions that
may arise. The Allied Bank of Tuguegarao is willing to lend the sum of P500,000.00 payable in 5
years with interest at 12% per annum, secured only by a surety bond. Prepare the promissory
note for said loan, complete in every aspect to make it negotiable.

4) State whether the following instruments are negotiable or non-negotiable.


State also the reason in a brief but comprehensive manner.

a. Certificate of deposit issued by banks, payable to the depositor or his order or to bearer
b. Trade acceptance
c. Bonds in the nature of promissory note
d. Drafts
e. Letter of credit
f. Warehouse receipt
g. Postal money order
h. Treasury warrants
i. Trust receipts
j. Bill of lading
k. Non-negotiable credits
l. Sales invoices

5) A document dated July 15, 2009 that reads: “Pay to Princess or order the sum of P5000.00 five
days after her pet, Sparquita, dies. Signed Honeybelle”. Is the instrument negotiable? Why?
6) Reynaldo issued a check for P5M which he sued to pay Segundo for killing his political enemy. Is
the instrument negotiable? Why?

7) Caritan Sur, Tuguegarao City, Cagayan


September 24, 2019
P 2,500.00
I promise to pay James Reidyna or order the sum of P 2,500.00
(sgd) Danielito Patilla

8) Centro, Amulung East, Cagayan


October 22, 2019

For value received, I promise to pay Liza Seguerra or order the sum of P 10,000.00 in five (5)
instalments, with the first instalments payable on December 1, 2019 and the other instalments
on or before the 1st day of the succedding months.

(sgd) Quinito Aqo

9) Can a bill of exchange or promissory note qualify as a negotiable instrument if:


a. It is not dated
b. The day and the month is given but not the year
c. Payable to cash
d. It names 2 alternative drawees

10) Which of the following stipulations or features of a promissory note (PN) affect or do not affect
its negotiability, assuming that the PN is otherwise negotiable? Indicate your answer by writing
the paragraph number of the stipulation feature of the PN. As shown below and your
corresponding answer, either “Affected” or “Not affected”. Explain
a. The date of the PN is February 31, 2019
b. The PN bears interest payable on the last day of each calendar quarter at a rate equal to
twenty five percent (25%).
c. The PN gives the maker the option to make payment either in money or in quantity of
palay of equivalent value.
d. PN gives the holder the option either to require payment in money or to require the
maker to serve as the bodyguard or escort of the holder for 30 days.

11) Ana, Bea and Cris signed a promissory note in favor of Xyron stating: “We promise to pay Xyron
on December 31, 2019 the sum of P5000.00”. when the note fell due, Xyron sued Ana and Bea
who put up the defense the Xyron should have impleaded Cris. Is the defense valid? Why?

12) Priscilla makes a promissory note for P5000.00 but leaves the name of the payee in blank
because she wanted to verify its correct spelling first. She mindlessly left the note on top of her
desk at the end of the workday. When she returned the following morning, the PN was missing.
It turned up later when Fidel presented it to Priscilla for payment. Before Fidel, Trishelle who
turned to have flitched the note from Priscilla’s office, had endorsed the note after inserting her
own name in the blank space as the payee. Priscilla dishonoured the note, contending that she
did not authorize its completion and delivery. But Fidel said he had no participation in or
knowledge about the alteration of the note and therefore enjoys the right of a holder in due
course.
a. Who is correct? Why?
b. What is a holder in due course?
c. Is the instrument valid?
d. What are the different instances of forgery under Negotiable instruments law?
e. What are the effects of forgery?

13) A check for P100,000.00 was drawn against drawee bank and made payable to Alpha Marketing
or order. The check was deposited with payee’s account at BPO Bank which then sent the check
for clearing to drawee bank. Drawee bank refused to honor the check on the ground that the
serial number had been altered. Alpha marketing sued drawee bank.
a. Is it proper for the drawee bank to dishonored the check for the reason that it had been
altered? Explain
b. What is material alteration?
c. Is alteration of serial number a material alteration?

14) Bingo was in desperate need of money to pay his debt to Paquito, a loan shark. Paquito threated
to take Bingo’s life and wife if he failed to pay. Bingo and Paquito when to see Senora
Santibanez, Bingo’s rich ex girlfriend and he asked if she could sign a promissory note in his favor
in the amount of P100,000.00 to pay Paquito. Fearing that Paquito would kills Bingo, her first
love, Senora acceded to the request. She affixed her signature in a piece of paper with the
assurance of Bingo that he will just fill it up later. Bingo then filled up the blank paper making a
promissory note of P200,000.00. He then endorsed and delivered the same to Paquito, who
accepted the note as a payment for the debt.
a. What is the nature of the promissory note executed by Senora?
b. Is Paquito a holder in due course?
c. What defense/s can Senora set up against Paquito?

15) Anita succeeded in making Ben affix his signature on a check without his knowing that it was a
check. At the time of signing, the check was complete in all respects. Anita intended to cash the
check the following morning but that night, it was stolen by Carlo who succeeded in negotiating
the same to Danica, a holder in due course. Danica cashed the check the following morning. Ben
refused to have the amount of the check deducted from his bank deposit.
a. Who may properly be charged with the amount of the check? Reason.
b. What is the nature of the instrument?

16) Aika signed a blank check which she inadvertently left on her desk at Pengue Ruyu office. The
same was later stolen by Bentong who filled in the amount of P22,500.00 and a fictitious name
as payee. Bentong then endorse the check in the payee’s name and passed the check to Camille.
Thereafter, Camille passed to Darwin; then Darwin to Erwan and Erwan to Francielle.
a. Can Francielle enforce the instrument against Aika? Explain
b. Suppose Francielle is a holder in due course, what will be your answer? Explain.
c. Can Francielle enforce the instrument against Bentong? Why?
d. Can Francielle enforce the instrument against Camille? Why?

17) Alberto executed a promissory note for P5000.00 payable to the order of Badette for the
purchase of a certain merchandise from Badette. Only one half of the merchandisewas
delivered; but Badette nonetheless indorse the promissory note to Cardo for value. Prior to
maturity, Cardo indorsed the note at a discount to Dalisay, who had knowledge of Badette’s
partial failure to deliver the merchandise.
a. Can Dalisay recover the full amount of the promissory note? Why?
b. If instead of being indorsed to Dalisay, the promissory note was reacquired by Badette.
Can Badette hold Dalisay on her promissory note? On what extent? Why?

18) Without receiving value for the purpose of lending his name, Arnold makes a note of P5000.00
payable to the order of Bernard who negotiates it to Carl, the latter knowing the Arnold is not a
party for value
a. May Carl recover from Arnold if the latter interposes the defense of absence or failure
of consideration? Reason?
b. Supposing Arnold received P300.00 for lending his name, will it alter the result of the
case? Why?
c. Supposing Arnold pays without objection the said P5000.00 may he recover what he
paid from Bernard?

19) Andok likes to buy the Ford car of Badong for P700,000.00 but Andok only has P200,000.00 and
so he asks for a loan of P500,000.00 from Cliff. Before giving P500,000.00 to Andok, Cliff
required Daniel and Esang to sign jointly and severally the promissory note for P500,000.00 in
favor of Cliff, which Daniel and Esang did.

Upon failure of Andok to pay P500,000.00, Cliff sued Daniel and Esang. In answering the
complaint, Daniel and Esang stated that they never received a single centavo from the
P500,000.00 which Cliff loaned to Andok and that they signed the note just to help Andok get
the loan from Cliff and this is true.
a. Will you absolve Daniel and Esang from the complaint of Cliff? Why?
b. Who is an accommodation party? Define
c. What are the rights of an accommodation party against:
i. Accommodated party
ii. Co-accommodation party

20) Fernando forged the name of Danica, manager of a Trading company, as the drawer of a check.
The Bank of the Philippine Islands, the drawee bank, did not detect the forgery and paid the
amount.
a. May the bank charge the amount paid against the account of the alleged drawer? Why?
b. What is the effect of a forged document?

21) Josefa loaned Maria some money and to evidence her indebtedness, Maria executed and
delivered to Josefa a promissory note payable to her order. Josefa indorsed the note to Pablita.
Berta fraudulently obtained the note from Pablita and indorsed it to Julia by forging Pablita’s
signature. Julia indorsed the note to Camille.
a. May Camille enforce the said promissory note against Maria and Josefa? Why?
b. May Camille go against Pablo? Why?
c. May Camille enforce said note against Julia? Why?
d. Against whom can Julia have the right to recourse? Why?
e. May Pablo recover from either Maria or Josefa? Why?

22) What are the liabilities/ warranties of the following:


a. Maker
b. Acceptor
c. Drawee
d. Drawer
e. General Indorser
f. Qualified indorser

23) Ada delivers a bearer instrument to Beth. Beth indorses it to Cath. Cath later indorses it in blank
to Deb. Elle steals the instrument from Deb and forged the signature of Deb. She successfully
negotiated it to Faye, who acquires the instrument in good faith and for value.
a. If, for any reason, the drawee bank refuses to honor the check can Faye enforce he
instrument against the drawer? Why?
b. In case of the dishonour of the check by the both drawee and drawer, can Faye hold
Beth, Cath and Deb liable solidarily on the instrument? Why?

24) Ana makes a promissory note payable to bearer and delivers it to Beth. In turn, Beth negotiates
it by mere delivery to Cris who endorses it specially to Dan. Dan negotiates it by special
indorsement to Ella who negotiates it to Faye by mere delivery. Ana did not pay. To whom Beth,
Cris, Dan and Ella liable? Explain your answer.

25) Who is a holder not in due course?

26) What are the rights of a holder in due course?

27) What are different classes of defenses? Give 5 examples each.

28) What are the requirements for a valid presentment in case of:
a. Promissory note
b. Bill of Exchange

29) What is Dishonor and notice of dishonor? Differentiate

30) Distinguish a crossed check from cancelled check

31) Differentiate the effects of following:


a. Incomplete but delivered
b. Complete and delivered
c. Incomplete and undelivered
d. Complete but undelivered

32) What is a foreign bill? Explain its effects

33) Can forgery in a check be justified? In what cases, if any?

34) What is a crossed check? What is its purpose?

35) What is a Protest? Purposes if any?

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