NIL Jay-ar S. Maguddatu 1.Consider the following promissory notes: Note 1: January 3, 2013.

I promise to pay on or before January 30, 2013 to John Martin, or to order, the amount of FIFTY THOUSAND Pesos (PHP 50,000.00). Signed: Oscar Juan; Signed: Sylvia la Torre. Note 2: January 3, 2013. We promise to pay on or before January 30, 2013 to John Martin, or to order, the amount of FIFTY THOUSAND Pesos (PHP 50,000.00). Signed: Oscar Juan; Signed: Sylvia la Torre. Is there any difference in the liabilities of Oscar Juan and Sylvia la Torre in respect to the two notes? Yes. There is a difference in both the liabilities from the 2 different notes. First note: the debtors are deemed to be jointly and severally liable. NIL provides under sec. 17 (g) that: (g) Where an instrument containing the word "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon. When two or more partners have joint and several liability for a debt, a creditor may collect from any one of the partners. If a creditor recovers full payment from one partner, that partner may pursue the other partners for their respective share of obligation. In other words, if the creditor pursued OJ for the whole amount and OJ paid for it the liability is extinguished. The creditor can no longer go after ST. However OJ can pursue the other partner for his respective share. 2nd note: Several liability is the opposite of joint liability. When two or more partners obtain a loan for which they are severally liable, each partner is only liable for their own obligation. Thus it is presumed that The 50k debt by OJ and ST are divided in two. Hence, each of them is only liable for half of the whole amount.

2.Marissa purchased a Rolex watch from Isidro for PHP 75,000.00. Both agreed, however, that Jasper, Marissas balikbayan brother would pay the purchase price. However, to assure Isidro that she was not out to deceive him, Marissa wrote out an RCBC personal check to the order of Isidro for PHP 75,000.00 and handed the check to him. The understanding was that Isidro would draw on the check only if Jasper would not pay within two weeks, which Marissa, however, was sure Jasper would do. The very next day, Isidro presents the check for payment, and when the RCBC branch informs Marissa of Isidros move, Marissa issues a stop-payment order. Isidro files a complaint against Marissa for a violation of B.P. 22. Should this criminal action prosper?

2. Criminal action (bp22) will not prosper. Issuance of the check was made only to guarantee the 75k payment of rolex in case jasper will not pay in two weeks and not to encash it immediately. It is not also evident that the check issued was dishonored due to insufficient balance or closed account. The issuance of 'stop-payment order' by Marissa is reasonable and does not constitute any of the grounds provided for by law to prosecute her under violation of BP 22. Therefore the Criminal action will not prosper. 3.Philippine National Bank. January 3, 2013. Pay to the order of CASH the amount of PHP 120,000.00. Signed: Oliver Lozano. Oliver had intended to issue the check in payment of a loan amortization. However, his gardener, Cupido, makes off with the check that Oliver carelessly leaves on the dining room table. a. Has there been issuance? Is Cupido entitled to payment on the instrument? b. Is Cupido a holder or a bearer? c. If Cupido negotiates the check by delivery to a hardware store to which he is indebted, does the owner of the hardware store have a right to payment? 3. A check payable to cash is just like cash - anybody can use it. If the check gets lost, whoever finds it can get the money unless you stop payment on the check first. Likewise, the recipient can pass the check on to somebody else. In the first question, there was no issuance by Oliver Lozano since the check was carelessly misplaced. Cupido who makes off the check is entitled for payment providedthere is no stop payment on the check by Oliver. Secondly, Cupido is a bearer since the check is payable to cash. Where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved .Lastly, If Cupido negotiates the cash to another person (owner of the hardware store) that he is indebted with the owner of the hardware store hasthe right of payment since he is a holder in good faith. The owner of the hardware store who becomes the good faith holder for value received, without knowledge of any claims against it, or that the instrument was dishonored when presented for payment, or in any way defective is also free from any liabilities in case Oliver Lozano may set up. 4.In a supermarket, a favored customer, Jessica, pays for the grocery items she purchased by delivering to the grocer a check she in turn received from her employer as a Christmas bonus: Producers Bank, Tuguegarao City. December 31, 2012. Pay to the order of CASH the amount of Four Thousand Pesos. Signed: P.J. Santos. a. Would the check be effectively negotiated were Jessica merely to hand it over to the grocer, and the grocer, to accept the same? b. What point would there be to requiring Jessica to sign on the dorsal side of the instrument?

4. Yes, the check can be effectively negotiated since jessica is a bearer and the check is payable to cash. It is also evident that the check is free from any defect and therefore negotiable. Requiring jessica of his signature at the dorsal side of the check would mean that the check was presented for payment by her and that would discharge the grocer from any liability arising from the check if there is any defect on it. On the other hand the signature of Jessica on the dorsal side of the check would make the check an order instrument. 5.The dealer of a tractor requires the customer to sign a promissory note that reads: May 23, 2013. I promise to pay to the order of XYZ Enterprise the following installments: June 23, 2013 PHP 500,000.00; August 23, 2013 PHP 500,000.00; October 23, 2013 PHP 500,000.00; and December 23, 2013 PHP 500,000.00. In the Deed of Sale, the following stipulation is found: The promissory note issued by the undersigned customer to XYZ Enterprises shall be deemed negotiated in the event of a transfer of the enterprise. Sometime in September, 2013, XYZ Enterprises enters into an agreement with Cagayan Motors for the transfer of its enterprise to the latter. Is the promissory note dated May 23, 2013 deemed negotiated to Cagayan Motors? What are the rights of Cagayan Motors? 5. No, the promissory note is not deemed negotiated to Cagayan motors. Even if it is clearly stipulated in the deed of sale that in the event of transfer of the enterprise the promissory note shall be deemed negotiated does not necessarily follow that it is deemed negotiated. A promissory note, bill of exchange or cheque payable to order is negotiable by the holder by endorsement and delivery thereof. Where instrument payable to order is transferred merely by delivery it is deemed to be assigned and not negotiated. The deed of sale is not a negotiable instrument for it to be negotiated. For negotiation to take place, indorsement and delivery must be made. The law clearly provides that: TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER. (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument. (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made. (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this Article and has only the rights of a partial assignee.

Cagayan motors right is limited only to the extent of its right as an assignee and not as a holder in due course. 6.Maurice is the holder of a check that reads: UCPB, Tuguegarao Branch. February 20, 2013. Pay to the order of Maurice Ortega the amount of Seventy Thousand Pesos. Signed: Jeffrey Cortez. On January 13, 2013, Maurice indorses the check to Preston Galvez who pays Maurice the amount of PHP 65,000.00. Despite having received the amount, Maurice demands from Jeffrey the balance of PHP 5,000.00 after February 20. Jeffrey refuses, and Maurice threatens with suit. Who should prevail? In the alternative, Maurice claims the indorsement is void because it was made prior to the maturity date of the check. 6. Jeffrey Cortez should prevail in the suit. While it is true that the indorsement was made prior to the maturity date and that the instrument is payable at the time fixed (section 85), maurice cannot raise this defense. Likewise, she cannot materially point as a defense that the indorsement was void because she already received 65k from Preston, who now becomes the holder in due course. It is however evident that Maurice indorses the check to Preston. Thus, the liability of Jeffrey to Maurice is presumed to be discharged. The right to demand for the whole amount therefore is transfered to Preston and not by Maurice.