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 c.when 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)