Michael Justin Baldugo

1. The law states, a negotiable instrument is discharged by:

A) Payment in due course by or on behalf of the principal debtor.
B) Payment in due course by the party accommodated, where the instrument is made or
accepted for accommodation;
C) The intentional cancellation thereof by the holder;
D) Any other act which will discharge simple contract for the payment of money;
E) When the principal principal debtor becomes the holder of the instrument at or after
maturity in his own right.

2. The object of giving notice of dishonor is two-fold:

A) To inform the parties secondarily liable that the maker or acceptor, as the case may be, has
failed to meet his engagement.
B) To advise such parties that they will be required to make payment.
C) The notice preserves the right of the holder to recover on the instrument and enforce
liability of the drawer or indorsers thereon.

3.) An inland bill of exchange is a bill which is, or on its face purports to be both drawn and
payable within the Philippines, while a foreign bill is a bill of exchange drawn in a country other
than the Philippines arising from foreign trade operations.

Moreover, a Foreign bill, in case of dishonor either by non- payment or acceptance, is required
to be protested otherwise, the drawer and indorsers are discharged, while in an Inland bill, it is
not required.

4.)

II.

A) Presentment- is the production of a bill of exchange to the drawee of a bill of

exchange to the drawee for his acceptance , or to the drawee or acceptor for
payment or the production of a promissory note to the party liable for its
payment.
 B) Stale check- is a check which has not been presented for payment within a
reasonable time after its issue. It is valueless and thus, should not be paid. A
check becomes stale 6 months from the date of issue.
C) Crossed check- it is one which bears across its face or corner two parallel line
diagonally, usually on the upper left corner between which are either the
name of a bank or the words and company in full or abbreviated.
D) Acceptance- is the act by which the drawee manifests his consent to comply
with the request contained in the bill of exchange directed to him and it
contemplates an engagement or promise to pay.
E) Protest- is meant the formal instrument executed by notary public or other
competent person certifying that the facts necessary to the dishonor of the
instrument by non-acceptance or non- payment have taken place.

III.

In the case of Lozano vs Martinez, the Supreme Court ruled that BP 22 does not violate
the provision of the Constitution against the non-imprisonment for non-payment of debts.
The gravamen of the offense punished by BP 22 is the act of making and issuing a
worthless check or a check that is dishonored upon its presentation for payment. It is not
the non-payment of an obligation which the law punishes. The law is not intended or
designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain
of penal sanctions, the making of worthless checks and putting them in circulation.
Because of its deleterious effects on the public interest, the practice is proscribed by the
law. The law punishes the act not as an offense against property, but an offense against
public order. SC held that BP 22 does not conflict with the constitutional inhibition against imprisonment
for debt.
The Supreme Court did not find substance in the claim that the statute in question denies
equal protection of the laws or is discriminatory, since it penalizes the drawer of the check, but
not the payee. It is contended that the payee is just as responsible for the crime as the drawer of
the check, since without the indispensable participation of the payee by his acceptance of the
check there would be no crime. This argument is tantamount to saying that, to give equal
protection, the law should punish both the swindler and the swindled. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The clause does
not preclude classification of individuals, who may be accorded different treatment under the law
as long as the classification is no unreasonable or