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Promissory Note Guidelines for Exams

This document contains a sample exam for a Law on Negotiable Instruments course. It includes multiple choice questions testing concepts like liability of various parties in note transfers, and essay questions on notice of dishonor requirements, renunciation by a holder, and time and place of presentment. The multiple choice section contains 5 questions testing different scenarios involving promissory notes being transferred from the maker to endorsers and holders. The essay questions ask the examinee to discuss: 1) the individual liabilities to a holder in due course of the maker, payee, and stolen note's original holder; 2) the requisites of a notice of dishonor; 3) what constitutes renunciation by a holder; and

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122 views2 pages

Promissory Note Guidelines for Exams

This document contains a sample exam for a Law on Negotiable Instruments course. It includes multiple choice questions testing concepts like liability of various parties in note transfers, and essay questions on notice of dishonor requirements, renunciation by a holder, and time and place of presentment. The multiple choice section contains 5 questions testing different scenarios involving promissory notes being transferred from the maker to endorsers and holders. The essay questions ask the examinee to discuss: 1) the individual liabilities to a holder in due course of the maker, payee, and stolen note's original holder; 2) the requisites of a notice of dishonor; 3) what constitutes renunciation by a holder; and

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attymau
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ARAULLO UNIVERSITY

PHINMA EDUCATION NETWORK


Second Periodical Exam
Law on Negotiable Instruments
Name:____________________________
Section:_____________________
I. Choose the Correct answer (2 points each)
1. A delivered to B the following instrument:

In payment of a gambling debt, a made a promissory notes which reads: I promise to pay to B P10,
000 sgd. A B indorsed the note in bank before maturity and delivered it to C for value. When due A
refused to pay and C used B. could recover from b?
a. No, C could not sue B because B did not write the name of C as indorse
b. No, the instrument is not negotiable and B is a mere assignor of credit
c. Yes, provided C gives notice of dishonour to B otherwise B is discharged from liability
d. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor of
the instrument
2. Using the preceding number, but the note is in payment of merchandise purchased by A from B
and A failed to pay due to insolvency. Could C Collect from B?
a. No, C could not sue B because B did not write the name of C as indorse
b. No, the instrument is not negotiable and B is a mere assignor of credit
c. Yes, provided C gives notice of dishonour to B otherwise B is discharged from liability
d. Yes, the endorsement will be considered as an assignment, hence B will be liable as an assignor of
credit

3. promissory note reads: I promise to pay to the order of B, P1, 000 Sgd. A then B made a qualified
endorsement to C. n maturity, A dishonours the instrument on the ground of total absence of
consideration between him and B. after giving notice of dishonour which of the following is not
correct?
a. C can collect from B, only if he is a holder in due course
b. C can collect from B, even if he is not a holder in due course
c. C can collect from B regardless of whether or not he is a holder in due course
d. C can enforce the instrument against A, if he Is a holder in due course
. 4. No. 1 The maker engages to pay according to the tenor of his acceptance.
No. 2 - The indorser warrants that the instrument is genuine only n certain cases.

(a) Both are false.
(b) Both are true.
(c) No. 1 is true; No. 2 is false.
(d) No. 1 is false; No. 2 is true.


5. Presentment is excused in the following circumstances. Except;

a. where the drawee is dead
b. when the drawee has absconded
[Link] the drawee is not a fictitious person
d. after exercise of due diligence, presentment cannot be made

II. Essay
1. A issued a promissory note payable to b or bearer. A delivered the note to B. B indorsed the note to C. C
placed the note in his drawer, which was stolen by the janitor X. X indorsed the note to D by forging Cs
signature. D indorsed the note to E who in turn delivered the note to F a holder in due course, without
indorsement. Discuss the individual liabilities to F of A, B and C. (20 points
)
2. What are the requisites of notice of dishonor? (5 points)
3. What constitutes renunciation by holder? (5points)
4. Discuss the time and place of presentment (10 points)

Godbless!!!!
-Atty. MGDR

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