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??able of Contents
Page xiii

I'rcface to the First Edition Preface to the Second Edltion Table of 4bbrcviations

xiv xv

OPENING ACCOUNTS Functional classhcation Legal o~ganization The nature o f bank accounts Kinds of accounts Opening an account Signature cards Termination of the relntion~hip

Copyright, 1965

By Frederick K . Beutel All rights reserved

1 2 5 6 7 10 11

MUTUAL DUTIES O F THE BANK .4ND DEPOSITOR

Liability of the bank for refusal to pay Stale check laws Stopping payment Identification of payees and indorsers Bearer paper Fict~tiousor non-cxlsting payees Forged checks

13
14 14 15

Alteration
Duty of the dcpositor to the bank-Monthly Depositor'\ d ~ ~ ofy due care t Instruments ksued uith blanks Ambiguous instruments Banker's hen statements

C O M M E R C I A L PAPER A N D ITS TRANSFER Types of commercial paper Money Foreign exchange Instruments payable ~n money Paper payable in com~nodities

29 29 31 31 33

Vlll

.. .

C O M M E R C l A L BANKIKC;

LAW

T A B L E OF C O N T E N T S

Warranties on presentment of negotiable paper for performance Limitation of liability by special contract Liability of agents Trustee's liability

Page 98 98 99 100

SECURITY DEVICES AND SURETYSHIP DEFENSES Types ot sccurity Simple personal security contracts Surety\hip defenses Discharge of parties prirnar~lyand secondaril) liable on negotiable paper Suretyship, guaranty and accon~modation parties on negotiable paper Pledge or collateral security agreement Duties of the pledgee The rlght to sell collateral at m:lturlty, foreclosure Nature of foreclowre proceedmgs Procedures on default ~lnderthe Uniform Cornniercial Code Transfer or redkcount before maturity Rights of transferee of principal obligation and collateral Page 131 131 132 133

HOLDERS IN DUE COURSE, BONA F I D E PURCHASERS AND DEFENSES T O NEGOTIABLE PAPER Holders in due course Requirements of holding in due course Without notice of defects or defenses Good f a ~ t h 4gency Value Bank credit as value Before ~t was overdue Purchaser of overdue or "stale" negotiable paper Kinds of detenses Defects in contract~lal relations Wrongs in contractmg and transfer Illegalit) Statutes making instruments a b d u t e l y void Capacity Lack of causation 103 103 104 106 107 107 108 110 112 112 113 114 114 115 115 117

MORTGAGES, INVESTMENT P.4PER AND NON-NEGOTIABLE SECURITIES Chattel mortgages and conditional sales as security debices Registration "Trust receipts" Bonded warehouse 5ystcmb Rcal estate mol tgages Foreclosures Ncgutlabil~ty ot nlo~tpagesand other t~tle-retamingcontrxts on negotiability and entorceabllity Contract\ 111 niortgagcs-Effect of the notcs Negotiabil~tl ot Inbestnient paper Special contracts In bonds Negotlab~hty and effect ot the stock cxchange rules Llfe insurance policies as collateral Registered bonds Aqsignment of 5pcc1al accounts and liens and other r~ghts The use of power of attorney Negotiabihty by c o n t r x t

SPECIAL CONTRACTS IN COMMERCI.4L LOANS The problem of negotiable notes Acceleration claures Promises to preserve collateral or other security Acceleration on a contingency Provision5 in mortgages Chattel paper Sealed instrument^ Devices for aiding collection Judgment notes Waiver of rights Provision for sale or holding of collateral Negotiability by mere \tatenlent 119 119 12 1 122 123 124 126 126 127 128 128 17')

157 157 158 161 161 162 163 163 164

COMMERCIAL RANKING LAW

TABLE O F CONTENTS

CHAPTER XIV COLLECTION A N D P A Y M E N T O F INSTRUMENTS The state of the law on collections Nature of deposlt for collection under the Negotiable Instruments Law Duties of the bank concerning instruments deposited for collection Liability of bank of deposit for default of sub-agents Relation of the depositor and bank under the Comn~ercialCode Choosing collecting bank Duties of the collecting bank under thc Negotiable Instruments Law and the Commercial Code Duties of collecting bank under the Commercial Code and similar statutes Medium of payment under the Commercial Code Dutie\ ot drawee or paying bank Payment In due course under the Negotiable Instruments Law Payment under the Comnlercial Code Payment by negotiable paper Duty t o cancel paqnient and recover proceeds h t r u m e n t s payable at o r through banks Page 167 168 171 172 174 175 175 177 178 179 181 182 183 185 186 PROTEST, NOTICE O F DISHONOR A N D WAIVER T H E R E O F T h e cumulative nature of requirement of formalities at maturity Requirement of protest Form of protest Time and place of protest When protest is unnecessary Notice of d i h o n o r Person giving notice Persons to receive notice Time uithin which notice must be given Addrcsslng notice of dishonor Code Notice of dishonor under the Con~mercial Cases where notlce need not be given Whcn notice ot dishonor is dispensed with Nature of waiver of diligence Construct~on of waivers Agreement for charge-back as waiver Note on the Cummerc~alCode CHAPTERXV MERCHANDISE P A P E R A N D INSTRUMENTS INVOLVED I N REMITTING FUNDS REQUIREMENTS O F PRESENTMENT FOR P A Y M E N T O R ACCEPTANCE Formalities to be mct at maturity The determinatwn of maturity Saturdays, Sundaq \ and holidays Presentment for payment Forrnalities of presentment Place of presentment Unusual cases When presentment is not required Days of grace Tender of payment Dishonor Presentment for acceptance 189 189 190 1 91 193 195 196 197 198 198 199 200 Collectmg merchandise paper Rernltt~ngf u n d \ Bank crcdlt as rcmittancc Bank's 11ab1l1ty its ov+n paper on Certificates ot depo5it Cash~er\'checks Moncy order\ and travelers' checks Acceptance of drafts and certificat~onof checks Ccrtlfqmg or x c e p t i n g forged o r altercd paper Mlstake in certlfymg Letters of c r e d ~ t Form of letter\ ot credit Requirements of uncondltlonal or clean letters of credit Effect ot conclltlon\ in letters of c r c d ~ t Rights of remitter5 Page 203 203 204 204 205 205 206 207 208 210 211 212 213 213 216 216 217

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