Commercial Law, 2011 Bar — Question 13

MULTIPLE CHOICE

X executed a promissory note with a face value of Php50,000.00, payable to the order of Y. Y indorsed the note to Z, to whom Y owed Php30,000.00. If X has no defense at all against Y, for how much may Z collect from X? A) Php20,000.00, as he is a holder for value to the extent of the difference between Y's debt and the value of the note. B) Php30,000.00, as he is a holder for value to the extent of his lien. C) Php50,000.00, but with the obligation to hold Php20,000.00 for Y's benefit. D) None, as Z’s remedy is to run after his debtor, Y.

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