FINAL EXAM

NEGOTIABLE INSTRUMENTS LAW

Name: Orquia, Anndhrea S. Date: May 12, 2020 Rating: ____________

I. Multiple Choice: Letters only. (No erasures)

ANSWERS:

1. C
2. A
3. C
4. D
5. D
6. B
7. D
8. A
9. B
10. D
11. A
12. A
13. C
14. C
15. C
16. D
17. A
18. A
19. B
20. D
21. A
22. B
23. D
24. C
25. A

II. Enumeration

ANSWERS:

1. What are the requisites of a negotiable instruments?

 Must be in writing
 Must be signed by the maker/drawer
 Must be a definite order to promise to pay
 Must contain unconditional promise or order
 Must be an order/promise to pay sum certain
 Must be payable in money
  Must be payable on demand or at a definite time
 Must be payable to order/bearer

2. What are the requisites of a holder in due course?

 That it is complete and regular upon its face;
 That he became the holder of it before it was overdue, and without notice that it had been
previously dishonored, if such was the fact;
 That he took it in good faith and for value;
 That at the time it was negotiated to him he had no notice of any infirmity in the instrument
or defect in the title of the person negotiating it.

3. What are the rights of a holder in due course?

 He may sue on the instrument in his own name;
 He may receive payment and if the payment is in due course, the instrument is discharged
 He holds the instrument free from any defect of title of prior parties;
 He holds the instrument free from defences available to prior parties among themselves;
and
 He may enforce payment of the instrument for the full amount thereof against all parties
liable thereon

4. What are the rights if a holder not in due course?

 He may sue on the instrument in his own name;
 He may receive payment and if the payment is in due course, the instrument is discharged;
 He is entitled to the instrument but holds it subject to the same defenses as if it were non-
negotiable; and
 He has all the rights of the holder in due course from whom he derives his title in respect of
all parties prior to such holder, provided he is not himself a party to any fraud or illegality
affecting the instrument,

5. What are the liabilities of the maker?

 Liability unconditional
 Presumption arising from signature.

6. What are the liabilities of the acceptor?

 Liability of drawee before acceptance
 Liability of drawee after acceptance
 Retraction of acceptance
 Payment of check despite stop-payment order
 Similarity to liability of maker and drawer

7. What are the liabilities of the indorsers?

 Instrument genuine, in all respects what it purports to be
 good title
 all prior parties had capacity to contract
 he had no knowledge of any fact w/c would impair validity of instrument or render it valueless
8. What are the liabilities of the general or unqualified indorsers?
 Instrument genuine, good title, capacity of prior parties.
 Instrument is at time of indorsement valid and subsisting.
 On due presentment, it shall be accepted or paid, or both, according to tenor;
 If it be dishonored, and necessary proceedings on dishonor be duly taken, he will pay the
amt. To holder, or to any subsequent indorser who may be compelled to pay it.

9. What are the liabilities of accommodation party?

 The accommodation party is liable on the instrument to a holder in value notwithstanding
such holder at any time of the taking of the instrument knew him to be only an
accommodation party.
 The accommodation part doesn’t receive any valuable consideration for the instrument he
signs but he is liable to a holder for value as if the contract wasn't for accommodation.

10. What are the liabilities of an agent?

 Personal liability
 Exemption from liability