Welcome to your Chapter 2 activity.

You must copy the content of this page and make a new page on
your Homework folder and name it 'Chapter 2 - Consideration'.  Your answers to the following will be on
that page. 

____ 

Explain or state briefly the rule or reason for your answers. 

(Note: Your score on this will be based on how you were able to understand the section supporting your
answer. You may elaborate or give specifics to add more substance to your answer in relation to the
instrument being tackled per item. Deadline: September 23, 2020) 

1. X indorses and delivers to Y as security (pledge) for X's debt in the amount of P10,000, a
promissory note for P12,000 issued by W in favor of X.  How much can Y collect from W? 

Y can collect 12,000 which is supported by section 27, Y is deemed a holder for value to the
extent of his lien.

If party liable has defenses

If the note is subject for personal defenses, Y can only collect 10,000 which is the amount of the
debt

If the note is subject to real defenses, Y cannot recover anything upon the instrument

2. A promissory note was issued by W without consideration to X who indorsed it to Y, from Y

to Z for value. Give the rights of Z. 

3. W signs a bill of exchange in favor of X for P10,000.  Give an instance when X may enforce
payment although W has not received any consideration from X for the bill.