WESTERN MINDANAO STATE UNIVERSITY

College of Law
Normal Road, Baliwasan, Zamboanga City
Philippines

FINAL EXAMINATION
Negotiable Instruments Law

The Facts

Jungkook Merchandise Company (JMC) is a depositor of Security Bank

(SB) Canelar Branch, under Current Account no. 00000-014344-1, against
which it draws company checks. In 1998 to 1999, JMC wrote the following
checks payable to the following payees, as follows:

DATE CHECK NUMBER PAYEE AMOUNT

01/12/1998 3010049202 Charlie Puth Php 64,284.00
10/12/1998 3010048904 Tsi Ming Choi 48,330.00
10/27/1998 3010048880 Dara Park 46,260.00
11/08/1998 3010048994 Charlie Puth 96,426.00
11/11/1998 3010048995 Charlie Puth 96,426.00
11/24/1998 3010048931 Vice Perez 70,200.00
12/10/1998 3010049229 Susan Baker 163,600.00
01/08/1999 3010049203 Charlie Puth 64,284.00
TOTAL Php 649,810.00

In an audit conducted by JMC, the above checks were found to be stolen

and encashed. These checks found their way to the KCC Branch of Land Bank,
where they were deposited to account no. 1-222-33333-4, in the name of Mina
Estero (Estero).

Estero allegedly received the checks from a certain Rona Reyes as payment
for the use of her credit card. The checks, according to Land Bank, contain the
indorsement at the back by the payees. Land Bank then required Estero to sign
a Deed of Undertaking, where she assumed full responsibility for the correctness,
genuineness and validity of all the checks and of the indorsement appearing
thereon. Thereafter, the checks were presented to Security Bank, which cleared
and authorized the payment thereof.

On April 30, 2000, Dennis Demenes (Demenes) confessed that while she
was employed as an Accountant, at JMC, he stole several company checks drawn
against JMC's Security Bank current account. The stolen checks were not
delivered to the named payee therein, but were instead given to a certain Sharon
Balutin and an unidentified bank manager with whom Demenes colluded and
connived in encashing said checks, and shared in the proceeds thereof.

Final Exam Requirement

Negotiable Instruments Law
A.Y. 2022-2023 Second Semester
Page 1 of 2
Instructions:

1. Based SOLELY on the foregoing facts of the case, come up with a case
Decision as if you are a judge complete with the facts of the case, issue/s
and the discussion on the issues to be resolved. THERE IS NO NEED TO
INCLUDE THE DISPOSITIVE PORTION OF THE CASE.

The issues that needs to be addressed in the decision shall be as follows:

a. Whether or not JMC can be held liable for the checks it issued it
being complete and regular on its face;

b. Whether or not Security Bank is Liable to JMC for the issued and
encashed check;

c. Whether or not Land Bank should reimburse Security Bank for

the encashment of the checks;

d. Whether or not Dennis Demenes may be held liable under the

negotiable instruments law for the stolen checks; and

e. Assuming that the checks bounced, whether or not JMC be

subjected to the case of Estafa and Violation of Batas Pambansa
Blg. 22

2. It is NECESSARY to include the appropriate provision applicable in each

of the foregoing issue and/or jurisprudence as the case may be.

3. As stated in item No. (1), draft a decision using the correct format in
drafting decisions in compliance with the Efficient use of Paper Rule taking
into consideration the correct margin, spacing, font style and font size as
well as the pagination of each page. After drafting the decision, convert the
same to PDF format and forward the same to delenalawoffice@gmail.com

4. The examination will start at 1:00 o’clock in the afternoon and shall be
submitted on or before 3:30 o’clock in the afternoon. Every minute of delay
shall merit a deduction of 1%.

5. The final document shall be named as

NIL_YearSection_LastName,FirstNane (Ex: NIL_2A_Delena,Ryan). The
subject that will be placed in the email shall be formatted as
NILFE_YearSection_FamilyName (Ex: NILFE_2A_Delena).

6. The examination shall be good for two and a half hours only.

7. The following shall be the basis for grading the final exam:

Format - 10%
Grammar - 10%
Content - 80% (Arguments, legal and jurisprudential basis,
Logical reasoning)
Total - 100%

Final Exam Requirement

Negotiable Instruments Law
A.Y. 2022-2023 Second Semester
Page 2 of 2