LONG QUIZ in NEGOTIABLE INSTRUMENT

Case Analysis

1. Tristan loaned Malia some money and, to evidence his indebtedness, Malia executed and delivered to Tristan a
promissory note payable to his order. Tristan endorsed the note to Daniel. Bert fraudulently obtained the note from
Daniel and endorsed it to Julian by forging Daniel‘s signature. Julian endorsed the note to Camille.
-May Camille enforce the said promissory note against Malia and Tristan? 2pts
-May Camille go against Daniel? 2pts
-May Camille enforce said note against Julian? 2pts

2. AX, a businessman, was preparing for a business trip abroad. As he usually did in the past, he signed several checks
in blank and entrusted them to his secretary with instruction to safeguard them and fill them out only when required
to pay accounts during his absence. OB, his secretary, filled out one of the checks by placing her name as the payee.
She filled out the amount, endorsed and delivered the check to KC, who accepted it in good faith for payment of
gems that KC sold to OB. Later, OB told AX of what she did with regrets. AX timely directed the bank to dishonor the
check.

Could AX be held liable to KC? Answer and reason briefly. 4 pts

Multiple Choice Question

Choose the best answer

1. Negotiable instruments are considered substitute for money, hence considered as legal tender.
A legal tender is a medium of exchange which the law compels the creditor to accept in payment for
obligations.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true

2. The original parties in a bill of exchange are the drawer, acceptor and payee.
The original parties in a promissory note are the maker and payee.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true

3. A signature by procuration operates as notice that the agent has but a limited authority to sign, and
the principal is bound only is case the agent is so doing acted within the actual limits of his authority.
A conditional indorsement renders the instrument nonnegotiable.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true

4. The drawer’s liability is secondary.

The drawee’s liability primary.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true

5. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration,
and every person whose signature appears thereon have to become a party thereto for value.
The bank is not liable to the holder, unless and until it accepts.
a. Both are true c. Only first statement is true
b. Both are false d. Only second statement is true