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Accounting

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1. M made a promissory note payable to P's order and authorized P to fill up the amount of not more then Php 50,000.00. P filled up the amount of Php 75,000.00 and indorsed the note to A. A then indorsed it to B, a holder in due course. Who will be liable to Mr. B and for how much? Why?

 

2. X stole a pre-signed promissory note from M's office cabinet. X then filled the amount of Php 20,000.00 and P's name as the payee, and then indorsed the note to A using P's name. A then indorsed to B, and B to C, present holder in due course.

 

Who may be held liable to C for Php 20,000.00? Why?

 

3. X stole a promissory note that is complete ( all the requisited of Section 1 of the Negotiable instruments law are present) made by M. X indorsed the note to A, then to B, a holder in due course.

 

Who may be held liable to B? Why?

 

4. M issued a promissory note to the order of P for Php 10,000.00. P indorsed the note to A. X stole the note from A, forged the signature of A and indorsed it to B. Then B to C, a holder in due course.

 

Who among the parties can be held liable to C, if any? Why?

 

5. M issued a promissory note for Php 25,000.00 payable to the order o P. P indorsed it to A as follows: "Pay A upon passing the the May 2020 CPA examinations." A flunked the examinations and the note matured.

 

5.1 Can A still pay A the Note? Why?

 

5.2 If M pays A, is M discharged from the payment of the note? Can P seek the reimbursement of the payment made by M to A?

 

6. M made a promissory note payable to P or bearer. P specially indorsed the note to A. A also specially indorsed it to B. X stole the note from B and negotiated by my delivery to C, without any indorsement.

 

Who may be held liable to C?

 

7. M issued a Promissory note payable to P or order as payment for the purchase of a 2 carat diamond ring but was in fact made of glass only. Indorsements were made as follows: P to A: A to B; B to C; and C to D, A B And D knew that P committed the fraud against M. C, however, has no knowledge of the fraud.

 

is M primarily liable to D on the note?

 

8. M issued a promissory no for Php 30,000.00 to the order of P. The following indorsement are found at the back of the note:

 

" Pay to A sans recourse. (SIGNED) P"

 

" Pay to B. (Signed) A"

 

8.1 If M cannot pay because M is insolvent is P liable to B?

 

8.2 Is A liable to B?

 

8.3 If M's signature is forged is P liable to B?

 

9. M made a promissory note payable to the order of P. Indorsements were made as follows: P to A; A to B; B to C; and C to D. The note was dishonored by M. D served a notice of dishonor to C only. P, A and B did not receive any notice of dishonor. C paid the note to D.

 

9.1 Is M liable to pay C? Why?

 

9.2 Who among the secondary parties does C have a right of recourse?

 

10. M made a promissory note for Php 100,000.00 payable to P or order. P altered the amount by increasing it to Php 150,000.00. P then indorsed it to A, then A to B, a holder in cue course. Who are the parties liable to B for Php 150,000.00? Why?