Commercial Law, 2011 Bar — Question 86

MULTIPLE CHOICE

P sold to M a pair of gecko (tuko) for Php50,000.00. M then issued a promissory note to P promising to pay the money within 90 days. Unknown to P and M, a law was passed a month before the sale that prohibits and declares void any agreement to sell gecko in the country. If X acquired the note in good faith and for value, may he enforce payment on it? A) No, since the law declared void the contract on which the promissory note was founded. B) No, since it was not X who bought the gecko. C) Yes, since he is a holder in due course of a note which is distinct from the sale of gecko. D) Yes, since he is a holder in due course and P and M were not aware of the law that prohibited the sale of gecko.

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