SANTA ISABEL COLLEGE

210 TAFT AVENUE, MANILA, PHILIPPINES

TEL. NOS.: (02) 525-94-16 to 21
FAX NO.: (02) 524-73-40
www.santaisabel.edu.ph

HIGHER EDUCATION DEPARTMENT

COURSE OUTLINE
I.

COURSE CODE

: BL103

II.

COURSE TITLE

: LAW ON NEGOTIABLE INSTRUMENTS

III.

COURSE DESCRIPTION
: This course deals with the provisions of
the law on negotiable
instruments. It includes discussions on topics on negotiability
of the instruments: functions and kinds of negotiable
instrument; construction of ambiguous instrument; forgery
and its effect ; consideration ; accommodation party; manner
and consequence of transfer of instruments; striking out
endorsements; requisites of holder in due course ; defense of
the parties ; discharge of negotiable instruments and the
parties secondarily available; liabilities of the parties ; effects
of alteration; and other kinds of instruments such as
promissory notes and bills of exchange. Some of the major
themes that will be explored in class include the process of
negotiation and collecting (i.e, paying and getting paid), loss
allocation (who pays when there is a problem), and emerging
payment systems using new technology and the Internet
( credit and debit card payments).

IV.

PREREQUISITES
Contracts

: BL 101 Law on Obligations and

BL 102- Law on Business Organizations

V.
VI.

CREDIT (NO. OF UNITS)

: THREE (3) units

LEARNING OUTCOMES
Upon successful completion of the requirements of this course,
students will be able to:
1. Understand and comprehend the law on negotiable instruments.
2. Apply and interpret the law concerning negotiable instruments to actual business
situations.
3. Explain all the provisions of the law on negotiable instruments.
4. Use the provisions of the law on negotiable instruments in solving actual business
problems.
5. Strengthen and practice the values of honesty, integrity, diligence and perseverance.
6. Demonstrates the 5Cs: critical thinking, commercial ethics, computer literacy,
communication skills, and communication services.

VII. COURSE OUTLINE

Week
Assigned Topic
1
Vision and Mission / Core Values of Santa Isabel
College-Manila
Introductory concepts
- The Negotiable Instruments Law
- Forms of negotiable instruments
- Functions and kinds of negotiable instruments
2
Requisites of negotiability
- In writing
- Signature of maker or drawer
- When promise or order is unconditional
- Determination of certainty of sum payable

3-4

6
7
8

10

11

12
13

- Time of payment as requisite of negotiability

- Whom payable
- Designation of the drawee
Negotiation
- Modes of transfer of commercial papers
- Negotiation
- Indorsement
- Kinds of Indorsements
- Special Indorsements
- Indorsement in blank
- When indorsement is restrictive
- Effect of restrictive indorsement
- Rights of indorsee
- Qualified indorsement
- Conditional indorsement
- Effect of striking out indorsement
- Effect of transfer without indorsement
Concepts of a holder in due course
- Preliminary considerations
- Holder in due course
- Kinds of defenses of parties
1. Forgery and its effects
2. Material alteration
PRELIMINARY EXAMINATION
Parties and their liabilities
Presentment for payment
- Meaning of presentment for payment
- Requisites of sufficient for payment
- When presentment for payment is unnecessary
- Effects of presentment for payment
- Other concepts
Notice of dishonor
- Meaning of notice of dishonor
- Significance of notice of dishonor
- Manner of giving notice of dishonor
- When notice of dishonor can be dispensed with and
when it is not required to be made
- Effects if notice of dishonor is required and it is not
made
- Other concepts
Acceptance
- Meaning of acceptance
- Kinds of acceptance
- Formal requisites of acceptance
- Time allowed for drawee to adopt and when
acceptance is made
- Other concepts
Presentment for acceptance
- Meaning of presentment for acceptance
- Significance of presentment for acceptance
- Manner of making presentment for acceptance
- When presentment for acceptance is excused
- Effects if presentment for acceptance is not made
- Other concepts
MID-TERM EXAMINATION
Protest
- Meaning of a foreign bill of exchange
- Protest as a requirement for foreign bills
- Other concepts
Acceptance for honor

- Meaning of acceptance for honor

- Formal requisites of acceptance for honor
- Effects of acceptance for honor
- Other concepts
14
Acceptance for honor
- Meaning of acceptance for honor
- Formal requisites of acceptance for honor
- Effects of acceptance for honor
- Other concepts
15
Payment for honor
- Meaning of payment for honor
- Purpose and function of payment for honor
- Requisites of valid payment for honor
- Effects in case bill is paid for honor
- Rights of a party who pays for honor
- Other concepts
16
Bill in a set
- Meaning of bill in a set
- Rights of holders if different parts of a set is
negotiated
- Liabilities of parties of different parts of a set
- Effects of discharging part of a set
- Liability of an acceptor who pays part of a set
17
Discharge of negotiable instruments and the parties
secondarily liable
- Meaning of discharge of a negotiable instrument
- How instruments are discharged
- When persons secondarily liable on the instrument
are discharged
- Right of party who discharges instrument
- Renunciation by holder
- Cancellation; unintentional ; burden of proof
- Effect of alteration of instrument
Emerging payment systems using new technology and
the Internet
- Credit card system
- Debit card system
18
FINAL EXAMINATION
VIII. TEXTBOOK/REFERENCES:
1. The Law on Negotiable Instruments (Latest Edition) by
Hector de Leon
2. The Law on Negotiable Instruments (Latest Edition) any
Philippine author
3. CPA Reviewer in Business Law (Latest Edition) any
Philippine author
IX.

COURSE REQUIREMENTS:
1. Regular recitation
2. Cases
3. Quizzes
4. Periodic Examination
5. Research work
6. Required textbook

X.

GRADING SYSTEM:
Computation of Periodical Grade:
30% Average Quizzes (minimum of 4 quizzes)
30% Periodical Examination
40% Class Standing
Composition of Class Standing
30% Average Assignment
30% Average Seatwork
20% Class participation/recitation

20% Project/ Research Work/Practice Set

PRELIM GRADE 30% Average Quizzes
30% Prelim Exam
40% Class Standing
MID-TERM GRADE- 1/3 Prelim Grade
2/3 Actual Mid-Term Grade
FINAL GRADE
XI.

-1/3 Mid-Term Grade

2/3 Actual Final Grade

COURSE POLICIES:
1. Cellphones should be in silent mode or turned off during the
class period.
2. Texting during the class period is not allowed.
3. All students should come time during the class period.
Provisions of the current SIC Student Handbook on
attendance/punctuality shall be applied/observed.
4. Students who caught cheating during quizzes, seatwork and
major examinations shall be subjected to disciplinary
actions as provided by the SIC Student Handbook.
5. Students should observe the proper decorum in the
classroom during the class period.
6. Students are encouraged to see their professors for
consultation during facultys consultation schedule.
7. Students are prohibited from copying for their assignments,
research projects or accounting practice set.
8. Student should be in proper SIC uniform whenever they are
inside the classroom.

Class Hours: 10:30-1:30

Name of Professor: Atty. Steven Michael D. Gala
E-mail/ Phone No: sm.gala@yahoo.com
Location/Room No.: 243

Prepared by:
Dr. William B. Baltazar, CPA, AFBE
Chair, Accoutancy Program