Geriel I.

Fajardo
3FM2
Answers

1. No, because there are required steps to charge persons secondarily liable in bills
of exchange.
2. In this case, the ability and willingness on the part of W to pay there at maturity
are equivalent to a tender or offer of payment on his part so that if the instrument
is not paid and is overdue, he cannot be considered in delay and, therefore, not
being at fault, he is not liable for costs and interests subsequently accruing
although W is not relieved from making payment of the amount due.
3. If W, had no notice of the incident, payment by him discharges the note. This
would not be so if the payment were made before maturity or W had notice of the
incident when he made the payment.
4. Yes, because the one who make payment or Z has until the close of banking
hours of the bank where the instrument is made payable in which to pay it. If
before the close of such hours he deposits funds to the banks there enough to
pay the instrument, a demand earlier in the day is premature. Hence, the
instrument is not considered dishonored though payment has been refused
earlier in the day.

Answers

Negotiation Assignment
Mode of Transfer effected by delivery or - done by writing signed by
indorsement followed by the transferor
delivery

Terms negotiation refers only to assignment refers to

negotiable instrument
Title - the transferee becomes a
holder in due course that
takes the instrument free
from defects in the title of
transferor and subject only
to real defense.
generally to ordinary
contracts
the assignee acquires all
the rights and all defense
available against the
assignor

Liability indorser is not liable unless assignor is always liable

2. The rights of restrictive indorsement confers upon the indorsee the right:

 to receive payment of the instrument

 to bring any action thereon that the indorser could bring
 to transfer his rights as such indorsee, where the form of the indorsement
authorizes him to do so

3. Yes, there is negotiation to a payee when the first delivery of the instrument is other
than the payee such as the agent of the maker or drawer or when the instrument is
delivered back to the payee by the last holder.

4. When an instrument is payable to someone in particular and an endorsement is

necessary to transfer title, the endorsement must be in writing, and the proper place for
it is on the back of the instrument. Unless an instrument clearly indicates that a
signature is made in some other capacity, it is an endorsement.

5. Qualified indorsement refers to an indorsement that passes title to the instrument but
limits the indorser's liability to later holders if the instrument is later dishonored. Usually,
qualified indorsement is made by writing without recourse or without recourse over the
signature.

III. PROBLEMS

ANSWERS

1. It depends because generally and indorsement must be of the entire instrument

under section 32 otherwise it is not considered a valid negotiation unless the instrument
is paid in part then it may be indorsed as to the residue and be a valid negotiation.

2. If the note is payable to order originally, it may not be negotiated by mere delivery
only unless it is an indorsement in blank or in an instrument originally payable to bearer
wherein it may be negotiated by mere deliver only.

3. Yes because according to sec.36 the mere absence of words implying power to
negotiate does not make an indorsement restrictive unless there is a restrictive word
following the statement such as only which would prevent further negotiation and would
cease the negotiability of the instrument.
4. No, but he has the right on proceed from Y who would not become the owner thereof
until the condition is fulfilled as stated in section 39 wherein the party required to pay
may disregard the condition and make the payment to the indorsee or his transferee
even in the condition is not fulfilled but any person to whom an instrument so indorsed is
negotiated will hold the proceeds thereof subjects to the rights of the person indorsing
conditionally.

5. No, because under section 50, an instrument negotiated back to prior party, he is not
entitle to enforce payment thereof against all intervening party to whom he was
personally liable