Professional Documents
Culture Documents
Tips:
1.
2.
3.
I.
Study the Codals and memorize the important provisions. Reading the book without committing into memory the
relevant provisions is pointless. Youll simple accumulate loads of information and ending up not understanding
anything. When you stop at an important provision, memorize it right there and do not advance until you memorize
it. In the words of Ampil, theyre all connected! Only when the codal is not clear to you will you refer to the book.
Practice makes perfect. Practice on the sample exam. Now that you know the rules of the game, you have to play
until it becomes second nature.
If time permits, read the book (De Leon will suffice, refer to Agbayani only on critical provisions). Provided you
memorize the important provisions, this will be a breeze.
Section 1. Form of negotiable instruments. - An instrument to be negotiable must conform to the following
requirements:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with
reasonable certainty.
Sec. 23. Forged signature; effect of. - When a signature is forged or made without the authority of the person
whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a
discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under
such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the
forgery or want of authority.
Sec. 52. What constitutes a holder in due course. - A holder in due course is a holder who has taken the instrument
under the following conditions:
(a) That it is complete and regular upon its face;
(b) That he became the holder of it before it was overdue, and without notice that it has been previously
dishonored, if such was the fact;
(c) That he took it in good faith and for value;
(d) 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.
PAGE 1 |
Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument is materially altered without the
assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized, or
assented to the alteration and subsequent indorsers.
But when an instrument has been materially altered and is in the hands of a holder in due course not a party to the
alteration, he may enforce payment thereof according to its original tenor.
PAGE 2 |
II.
ENUMERATION
PAGE 3 |
Where a warehouseman or his agent issues a receipt which does not state the ownership of the warehouseman of
the goods
Where a warehouseman delivers the good without obtaining the receipt
Where any depositor/holder of a receipt negotiates it for value with intent to deceive and to defraud his
creditors/mortgagee
2.
3.
4.
What are the five instances when notice of dishonor need not be given to drawer?
1. Where the drawer and drawee are the same person;
2. When the drawee is fictitious person or a person not having capacity to contract;
3. When the drawer is the person to whom the instrument is presented for payment;
4. Where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument;
5. Where the drawer has countermanded payment.
What are the three instances when notice of dishonor need not be given to indorser?
1. When the drawee is a fictitious person or person not having capacity to contract, and the indorser was aware of that
fact at the time he indorsed the instrument;
2. Where the indorser is the person to whom the instrument is presented for payment;
3. Where the instrument was made or accepted for his accommodation
What are the differences between a check and an ordinary bill of exchange? (Memorize at least three)
1. A check is always drawn on a bank while an ordinary bill of exchange may or may not be drawn on a bank
2. A check is always payable on demand while an ordinary bill of exchange is payable on demand or at a fixed
determinable future time
3. A check is supposed to be drawn against previous deposit of funds, while an ordinary bill of exchange need not be
drawn against a deposit
4. A check need not be presented for acceptance while an ordinary bill is required to be present for acceptance in
certain cases
5. A check is ordinarily intended for immediate payment while an ordinary bill for circulation as an instrument of credit
6. The death of the drawer of a check with the knowledge of the bank revokes the authority of the bank to pay while the
death of the drawer of an ordinary bill does not revoke the authority of the drawee to pay
7. A check must be presented for payment within a reasonable time after its issue, while an ordinary bill must be
presented for payment within a reasonable time after its last negotiation
8. The drawer of a check not presented within a reasonable time after its issue is discharged from liability thereon to the
extent of the loss caused by the delay while the drawer of an ordinary bill is totally discharged
PAGE 4 |
When a check is accepted or certified, the drawer and indorsers are discharged from liability thereon while in an
ordinary bill, they remain liable in spite of the acceptance.
III.
OTHER REMARKS
1.
2.
PAGE 5 |