END-TERM EXAMS -NEGOTIABLE INSTRUMENTS LAW
INSTRUCTION: Always support your answer with reason/s. A mere yes or no answer without the explanation will not
earn any credit. Make an illustration in your scratch paper to determine and see clearly the liabilities of parties.
1. Max executes a Promissory Note payable to Jess in the amount of P50,000.00. Jess indorses the PN to Boni and Boni
further indorses it to Clyde, a minor. Clyde indorses the PN to Brando, the last holder.
Questions:
a. Who is primarily liable in the promissory note? Why? (10 points)
Boni is the primarily liable in the promissory note. Boni indorses it to Clyde, who is a minor with no consent
b. Supposing the person primarily liable will refuse to pay, where will Brando go to enforce payment? Explain. (10
points)
It will go to Max, the one who executes a PN Brandon will to Max for the enforce payment so that he will be able
to get something in return
c. Is Jess liable to Boni? Give reason/s. (10 points)
Yes, because he was the one who indorse to Boni. And if anything happens to Boni, Jess will the one who will
face the problem.
2. As payment of the goods taken, Rodrigo issued a Promissory Note payable to Sara in the amount of P20,000.00. Sara
indorses the PN to Leny and while in the possession of Leny, Bobong steals the note and indorses it to Panfilo by
forging Leny’s signature. Panfilo further indorses the PN to Manny, a holder in due course.
Questions:
a. Can Manny enforce the payment of P20,000.00 against Rodrigo? Why? (10 points)
Yes, Because the PN was issued by Rodrigo. Rodrigo is the blueprint of the issued Pm
b. Supposing Rodrigo refuses to pay, where can Manny go to demand payment? Explain. (10 points)
If Rodrigo refused to pay then Manny will have to enforce payment with the help of authority.
c. Is Rodrigo liable to Sara? Explain fully your answer. (10 points)
Yes, due to the fact that he issued a PN to Sara, which makes him liable. What Sara will do will affect him
3. Derrick issued a Promissory Note to Ellen in payment for the goods purchased by Derrick from Ellen, but Derrick
forgot to state the amount in the PN. Ellen phoned Derrick to ask and the latter instructed her to put the amount of
P5,000.00, but, Ellen put the amount of P10,000.00 instead, and indorsed the PN to Dingdong . Dingdong indorsed it
to Marian and Marian further indorsed it to Matutina, a holder in due course.
QUESTION: How much can Matutina collect from Derrick? Why? Support your answer with reason/s. (10 points)
Matutina can collect from Derrick would be the same amount as what Ellen endorsed amount. Because,
first Derick forgot to input the amount PN. Second, because of it Ellan had the opportunity to change the PN amount. If
