INSTRUCTIONS

1. This Questionnaire contains two pages. Check and make sure that your
Questionnaire has the correct number of pages. You may write on your Questionnaire
as you answer the questions.

Read each question very carefully and write your answers in your Examination
Notebook in the same order of the questions. Answer the essay questions legibly,
clearly, and concisely. Write your answers only on the front of every page of your
Notebook. If the front pages are not sufficient, continue at the back of the first page and
so on. Start every number on a separate page, but an answer to a sub-question under
the same number may be written continuously on the same page and on the
immediately succeeding pages until the answer is complete. Follow the numbering
sequence of the Questionnaire in your answers.

2. Your answers should demonstrate your ability to analyze the facts, apply the
pertinent laws and jurisprudence, and arrive at sound and logical conclusions. Answers
must fully explain even if the questions do not expressly require explanations. A "Yes"
or "No" answer sans explanation or discussion will not be given full credit.

3. Marking of your Notebook with your name (other than the one at the back as
instructed) or other identifying signs or symbols extraneous to the subject matter of the
questions may be considered as cheating and may disqualify you.

4. Write your name at the last page of your Notebook.

Good luck!

YOU CAN BRING HOME THE QUESTIONNAIRE.

I.

Dina Leligo issued and signed a promissory note containing the words “I promise to pay
Pedro Dela Cruz or bearer, P150,000.00 with interest on December 15, 2017.” This
note was issued on September 10, 2017. Pedro then delivered the note to Girlie Dela
Amzona on December 10, 2017. On December 15, 2017, Girlie went to Dina and
presented the note for payment. Dina refused and argued that she is only obliged to pay
Pedro because the instrument was not negotiable in the first place on the ground that
the amount payable was not certain.

(a) What are the requisites for a promissory note to be negotiable? (10%)

(b) Is the amount to be paid certain in this case? (10%)

II.

Facundo May-as issued and signed a bill of exchange worded as follows:

P120,000 January 15, 2018

Pay to Pedro Dela Cruz the amount of P120,000 with 100% interest per week
on February 15, 2017.

To: Rando M. Dude

(Sgd.) Facundo May-as

At the back, Pedro indorsed the instrument in blank and delivered the bill to Girlie Dela
Amzona. Girlie then delivered the bill to Dina Bergen. Dina went to Rando and
presented the bill for acceptance and payment.

(a) Where an instrument is addressed to a drawee, Sec. 1 of the Negotiable

Instruments Law has an additional requisite for negotiability. What is that requisite?
(2%)

(b) Rando argued that the note should be indorsed by Facundo to Girlie then
indorsed by Girlie to Dina for a valid negotiation, and not just negotiated by mere
delivery. Is Rando correct? (10%)

(c) Is the bill issued by Facundo negotiable? (8%)

III.

A promissory note was issued and signed containing the words “I promise to pay Pedro
Dela Cruz or bearer the amount of P100,000.00 if my dog Frodo will kill my cat Sauron.”
A day after the note was issued, Frodo indeed killed Sauron.

(a) Is the note negotiable? (10%)

(b) Will the killing of Sauron by Frodo have any effect on the negotiability of the
note? (5%)

(c) Suppose the note contained “I promise to pay Pedro Dela Cruz or bearer the
amount of P100,000 if my dog Frodo and my cat Sauron dies.” Will this note be
negotiable? (5%)

IV.

(a) Distinguish between an instrument payable to bearer and an instrument

payable to order. (6%)

(b) When is an instrument payable to order? (4%)

(c) When is an instrument payable to bearer? (10%)

V.

Dina Leligo issued and signed a promissory note containing the words “I promise to pay
to the order of Pedro Dela Cruz P150,000 on December 15, 2018. I am issuing this note
because I bought Pedro’s 15 cows at 10,000 each.”

(a) Is the note negotiable? (10%)

(b) How does an order or promise to pay out of a particular fund affect the
negotiability of an instrument? (10%)