Beruflich Dokumente
Kultur Dokumente
A:
1. In writing and signed by the maker or
drawer
2. Contains an unconditional promise or
order to pay a sum certain in money
3. Payable on demand, or at a fixed or
determinable future time
4. Payable to order or to bearer (so called
badges of negotiability)
5. If addressed to a drawee, he must be
named or otherwise indicated with
reasonable certainty. (Sec. 1)
A:
As to number
of parties
As to liability
of parties
As to number
of
presentments
needed
A. REQUISITES OF NEGOTIABILITY
A:
1. Words that appear on the face of
negotiable instrument
2. Requirements enumerated in Section 1
of NIL
3. Intention of the parties by considering
the whole of the instruments
A:
1. Promissory notes (PN) An
unconditional promise in writing made
by one person to another, signed by the
maker, engaging to pay on demand, or
at a fixed or determinable future time, a
sum certain in money to order or to
bearer. (Sec. 184)
16
PROMISSORY
NOTE
Promise to
pay
2 original
parties
Maker is
primarily
liable
Only 1
presentment
(for
payment) is
needed
BILL OF
EXCHANGE
Order to pay
3 parties
Drawer is
secondarily
liable
2
presentments
(for
acceptance
and for
payment) are
generally
needed
A. INSERTION OF DATE
A:
1. Where an instrument expressed to be
payable at a fixed period after date is
issued undated, or
2. Where the acceptance of an instrument
payable at a fixed period after sight is
undated
Complete instrument
a. Delivered
i. With forgery and alteration
ii. Without
forgery
and
alteration
b. Not delivered
i. With forgery and alteration
ii. Without
forgery
and
alteration
B. COMPLETION OF BLANKS
A:
1. Incomplete instrument
a. Delivered
i. With forgery and alteration
ii. Without
forgery
and
alteration
b. Not delivered
i. With forgery and alteration
ii. Without
forgery
and
alteration
17
Q: What is delivery?
18
A:
1. Without forgery and alteration, all
parties are bound.
b. Bearer instruments
i. Bearer promissory note
- Prior parties liable;
- Forged signatory not
liable to party not holder
in due course.
3.
4.
5.
6.
7.
IV. SIGNATURE
A:
GR: Only persons whose signatures appear on
an instrument are liable thereon. (Sec. 18)
XPN:
1. Person signs in trade or assumed name
(Sec. 18 [2]) Party who signed must
have intended to be bound by his
signature.
19
B. SIGNATURE OF AN AGENT
A:
1. He is duly authorized
2. He adds words to his signature
indicating that he signs as
agent/representative
3. He discloses the name of his
principal.(Sec. 20)
A:
1. Not void. The incapacity of the infant is
not a defense which can be availed of
by prior parties. However, it does not
20
2.
3.
4.
D. FORGERY
Q: What is forgery?
A:
GR: It does NOT render the instrument void.
The signature is wholly inoperative, and no
right to retain the instrument, or to give a
discharge thereof, or to enforce payment
thereof against any party to it, is acquired
through or under such signature. (Cutoff rule)
XPN:
1. If the party against whom it is sought to
enforce such right is precluded from
setting up forgery or want of authority.
(Sec. 23)
2. Where the forged signature is not
necessary to the holders title, in which
case, the forgery may be disregarded
(Sec. 48)
MERCANTILE LAW TEAM:
ADVISER: ATTY. AMADO E. TAYAG; SUBJECT HEAD: EARL M. LOUIE MASACAYAN;
ASST. SUBJECT HEADS: KIMVERLY A. ONG & JOANNA MAY D.G. PEADA; MEMBERS: MA. ELISA J
ONALYN A. BARQUEZ, ANGELI R. CARPIO,
ANTONETTE T. COMIA, ALBAN ROBERT LORENZO F. DE ALBAN, JOEBEN T. DE JESUS, CHRIS JAR
K ACE M. MAO, ANNA MARIE P. OBIETA,
RUBY ANNE B. PASCUA, FLOR ANGELA T. SABAUPAN, GIAN FRANCES NICOLE C. VILCHES
A:
1. Those who admit/warrant the
genuineness of the signature: indorsers,
persons negotiating by delivery and
acceptor; (Sec 56)
2. Those who by their acts, silence, or
negligence, are estopped from claiming
forgery;
3. A holder of a bearer instrument who
subsequently
negotiates
such
instrument with a prior forged
indorsement (forged indorsement is not
necessary to his title it being a bearer
instrument).
A:
1. Where note payable to order:
1. Party whose signature was forged
is not liable to a holder, even a
HIDC
2. Indorsement is wholly inoperative.
3.
21
2.
3.
4.
A:
1. When drawer's signature is forged
Draweebank by accepting the check
cannot set up the defense of forgery,
because by accepting the instrument,
the drawee bank admits the
genuineness of signature of drawer (BPI
Family Bank v. Buenaventura, G.R. No.
148196, Sept. 30, 2005; Sec. 23, NIL).
22
V. CONSIDERATION
Q: What is consideration?
A:
1. Fraud in the execution or fraud in
factum A person, without negligence,
has signed an instrument which was in
fact a negotiable one, but was deceived
as to the character of the instrument
and without knowledge of it (real
defense).
23
24
A:
1. Accommodation party must sign as
maker, drawer, acceptor or indorser
2. No value is received by the
accommodation party for the
accommodated party; and
3. The purpose is to lend the name.
A:
ACCOMMODATION
PARTY
Signs an instrument
without receiving
value therefore (Sec.
29)
Purpose of signing:
lend his name to
another person (Sec.
29)
May always show, by
parol evidence, that he
is only such
Cannot avail of the
defense of
absence/failure of
consideration against a
holder not in due
course
May sue
reimbursement after
paying the
holder/subsequent
party
REGULAR PARTY
Signs the instrument
for value (Sec. 24)
May avail
A:
1. Right to revoke accommodation
before the instrument has been
negotiated for value.
2. Right
to
reimbursement
from
accommodated
party
the
accommodated party is the real debtor.
Hence, the cause of action is not on the
instrument but on an implied contract
of reimbursement.
2.
3.
A:
NEGOTIATION
Only a negotiable
instrument may be
negotiated
The transferee, if he is
a HIDC may acquire
better rights than his
transferor.
The holder can hold
the drawer liable and
the indorsers liable if
the party primarily
liable does not pay.
ASSIGNMENT
Nonnegotiable
instrument may be
assigned absent of any
prohibition against
assignment written on
its face.
The transferee can
have no better rights
than his transferor; he
merely steps into the
shoes of the assignor
The transferee has no
right of recourse for
payment against
immediate parties.
25
B. MODES OF NEGOTIATION
A:
1. If payable to bearer it is negotiated by
delivery
A:
1. On the instrument itself; or
2. On a separate piece of paper attached
to the instrument called allonge. (Sec.
31)
26
A:
GR: No. Indorsement must be of the entire
instrument. (Sec. 32)
Q: What is an indorsement?
A:
1. Special (Sec. 34)Specifies the person to
whom or to whose order the
instrument is to be payable. Also known
as specific indorsement or indorsement
in full.
4.
1.
2.
4.
3.
5.
6.
7.
A:
1. To receive payment of the instrument;
2. To bring any action thereon that the
indorser could bring; and
3. To transfer his rights as such indorsee,
where the form of the indorsement
authorizes him to do so. (Sec. 37)
A:
GR: All must indorse in order for the
transaction to operate as a negotiation. (Sec.
41)
XPN:
1. Payees or indorsees are partners; and
2. Payee or indorsee indorsing has
authority to indorse for the others.
A:
1. Indorsement of part of the amount of
the instrument. (Sec. 32)
2. In cases of qualified indorsement. (Sec.
38)
3. Conditional Indorsement. (Sec. 39)
4. Transfer of an instrument payable to
order by mere delivery. (Sec. 49)
6.
7.
8.
Forgery;
Lack of good title on the part of the
indorser;
Lack of capacity to indorse on the part
of the prior parties; or
The fact that at the time of the
indorsement, the instrument was
valueless or not valid at the time of the
indorsement which fact was known to
him.
27
Q: Who is a holder?
A:
1. Holders in general (Simple Holders).
(Sec. 51)
2. Holders for value. (Sec. 26)
3. Holders in due course. (Secs. 52, 57)
A:
1. Right to sue
2. Right to receive payment (Sec. 51)
28
A: When made:
1. At or after the maturity of the
instrument
2. To the holder thereof, in good faith and
without notice that his title is defective
(Sec. 88)
2.
3.
4.
A:
GR: Every holder is deemed prima facie to be
a holder in due course;
A:
1. Hold the instrument free from defenses
available to parties among themselves
2. Hold the instrument free from any
defect of title of prior parties
3. Receive payment
4. Enforce payment of the instrument for
the full amount thereof against all
parties liable
5. Sue
A:
1. One who became a holder of an
instrument without any of the
requisites under Sec. 52
A:
1. In its acquisition When he obtained the
instrument, or any signature thereto, by
fraud, duress, or force and fear, or other
unlawful means, or for an illegal
consideration.
29
2.
30
A:
A. MAKER
A:
1. Engages to pay according to the tenor of
the instrument; and
2. Admits the existence of the payee and
his then capacity to indorse. (Sec.60)
IX. LIABILITIES OF PARTIES
A:
1. Maker in a promissory note
2. Acceptor in a bill of exchange
A:
1. Drawer
2. Indorser
A:
DRAWER
Issues a BOE
Only secondarily liable
Can limit his liability by
putting without
recourse
A:
1. That payee is a fictitious person
2. That payee was insane, a minor, or a
corporation acting ultra vires.
MAKER
Issues a PN
Primarily liable
Cannot limit liability
A:
1. The bill is presented for acceptance
(Sec. 143)
2. The bill is dishonored by non
acceptance or nonpayment (Sec. 70);
and
3. The necessary proceedings for dishonor
are duly taken. (Sec. 152)
A:
1. Promissory note maker
2. Bill of exchange drawee/acceptor
A: See Appendix B
B. DRAWER
A:
1. The holder
2. Any of the indorsers intervening
between holder and drawer who is
compelled to pay by the holder, the
drawer will be liable to that indorser so
compelled to pay
C. ACCEPTOR
D. INDORSER
Q: Who is deemed an indorser?
32
2.
33
E. WARRANTIES
A:
1. That the instrument is genuine and in all
respects what it purports to be
2. That he has good title to it
3. That all prior parties had capacity to
contract
4. That he has no knowledge of any fact
which would impair the validity of the
instrument or render it useless.
A:
GR: Instrument must be exhibited to the
person from whom payment is demanded;
when paid, it must be delivered to person
paying it. (Sec. 74)
34
Q: When is PP necessary?
A:
1. Specified place in the instrument
2. Address of the person to make the
payment if given in the instrument
3. Usual place of business or residence of
the person to make the payment
4. Wherever he can be found; or
5. At his Last known place of business or
residence (Sec. 73)
A:
INSTRUMENT
Payable at a
fixed or
determinable
future time
Promissory
note payable
on demand
Bill of
exchange
payable on
demand
35
A:
3. When caused by circumstances beyond
the control of the holder; and
4. Not imputable to his default,
misconduct, or negligence (Sec. 81).
D. DISHONOR BY NONPAYMENT
Q: When is an instrument dishonored by non
payment?
A:
1. Nonpayment upon due presentation.
Happens when:
a. The instrument is duly presented
for payment to party primarily
liable;&
b. It is either refused or cannot be
obtained.
36
A:
1. To inform parties secondarily liable that
the maker or acceptor has failed to
meet his engagement.
2. To advise them that they are required
to make payment.
1. The drawer; or
2. His agent (Sec. 97)
3. Where party is dead to a personal
representative or sent to the last
residence or last place of business of
the deceased (Sec. 98)
4. When the parties to be notified are
partners notice to any one partner
though there has been a dissolution
(Sec. 99)
6.
D. FORM OF NOTICE
A:
1. Oral; or
2. In writing
3. It may be given by personal delivery, or
by mail (Sec. 96)
4. Must contain the following:
a. Description of the instrument;
b. Statement that it has been
presented for payment or for
acceptance and that it has been
dishonored (If protest is necessary,
notice must also contain a
statement that it has been
protested).
c. Statement that the party giving the
notice intends to look for the party
addressed for payment.
A:
1. To the parties secondarily liable
Within the time fixed by Secs. 102104,
and 107, otherwise, they are discharged
A:
1. Holder
2. Another in behalf of the holder
3. Any party to the instrument who may
be compelled to pay and who, upon
taking it up, would have a right to
reimbursement from the party to whom
notice is given. (Sec. 90)
C. EFFECT OF NOTICE
E. WAIVER
A:
1. Before the time of giving notice has
arrived; or
2. After the omission to give due notice.
(Sec. 109)
A:
1. All parties (if embodied on the face of
the instrument); or
2. Particular indorser (if written above the
signature of such indorser) (Sec. 110)
37
UST GOLDEN NOTES 2011
F. DISPENSATION OF NOTICE
Q: When is notice of dishonor not necessary?
A:
1. Waiver of notice. (Sec. 109)
2. Waiver of protest. (Sec. 111)
3. When after due diligence, notice cannot
be given. (Sec. 112)
4. Drawer in cases under Sec. 114
5. Indorser in cases under Sec. 115; and
6. Where due notice of dishonor by non
acceptance has been given (notice of
dishonor by nonpayment not
necessary). (Sec. 116)
A:
1. When drawer and drawee is the same
person
2. Drawee is fictitious or does not have
the capacity to contract
3. Drawer is person to whom the
instrument is presented for payment
(he is the one who dishonored the
instrument)
4. Drawer has no right to expect or require
that the drawee or acceptor will honor
the instrument.
5. Drawer has countermanded the
payment (e.g. stop payment order)
(Sec.114)
A:
1. Drawee is fictitious or has no capacity
to contract, and indorser was aware of
these facts at the time he indorsed the
instrument;
38
2.
A:
1. GR: As soon as instrument was
dishonored (Sec. 102) Party is allowed
one entire day for the purpose of giving
notice.
2.
3.
4.
XII. DISCHARGE
Q: What is discharge?
A:
1. Payment by principal debtor:
a. By or on behalf of principal debtor
b. At or after its maturity
c. To the holder thereof
d. In good faith and without notice
that the holders title is defective
2. Payment by accommodated party
3. Intentional cancellation of instrument
by the holder (by expressly stating it in
the instrument or when the instrument
is torn up, burned or destroyed)
4. Any act which discharges a simple
contract for the payment of money
under Art. 1231 of the NCC specifically
remission, novation, and merger.
Note: Actual receipt of the party within the time
specified by law is sufficient though not sent in the
places specified above. (Sec. 108)
A:
GR: Any person to whom such notice is not
given is discharged, but he will still be liable
for breach of warranties pertaining to the
instrument.
XPN:
1. Waiver. (Sec. 109)
2. Notice is dispensed with. (Sec. 112)
3. Not necessary to drawer. (Sec. 114)
4. Not necessary to indorser. (Sec. 115)
A:
1. No acceleration clause Failure to give
notice of dishonor on a previous
installment does not discharge drawers
and indorsers as to succeeding
installments.
A:
1. Any act which discharges the
instrument;
2. Intentional cancellation of his signature
by the holder
5.
39
3.
4.
5.
6.
A:
1. Instrument is not discharged
2. It only cancels his own liability and that
of the parties subsequent to him
3. GR: Instrument may be renegotiated
XPN:
a. Where it is payable to the order
of a third person, and has been
paid by the drawer; and
b. Where it is paid by the
accommodated party
XPN:
1. Where it is payable to the order of a
third person, and has been paid by the
drawee; &
40
2.
D. RENUNCIATION
Q: What is renunciation?
A:
1. Must be written
2. If oral, the instrument must be
surrendered to the person primarily
liable. (Sec. 122)
A:
1. Made in favor of principal debtor made
at or after the maturity (made
absolutely and unconditionally) of the
instrument discharges the instrument
(Sec. 122)
A. CONCEPT
Q: What is a material alteration?
XIV. ACCEPTANCE
A. DEFINITON
B. MANNER
A:
1. In
writing,
except
constructive
acceptance and to a foreign bill payable
in another state (unless the other state
requires for written acceptance)
2. Signed by the drawee (without it, he is
not liable)
3. Must express a promise to pay money
(not goods)
4. Delivered to the holder (before delivery
or notification, acceptor may revoke or
cancel his acceptance).
A:
1. General Assents without qualification
to the order of the drawer (Sec. 139).
A:
1. Avoids the instrument except against:
a. A party who has made the
alteration;
b. A party who authorized or
assented to the alteration; or
c. The indorsers who indorsed
subsequent to the alteration
(because of their warranties)
41
b.
c.
d.
e.
f.
2.
Constructive/implied
a. Drawee to whom the bill is
delivered for acceptance destroys
it; or
b. Drawee refuses, within 24 hours
after such delivery, or within such
time as is given him, to return the
bill accepted or nonaccepted
3.
Extrinsic the acceptance is written on
a paper other than the bill itself. To be
binding upon the acceptor:
a. Acceptance must be shown to the
person to whom the instrument is
negotiated; and
b. Such person must take the bill for
value on the faith of such
acceptance (Sec. 134).
4.
Virtual conditions:
a. Unconditional promise in writing
to accept a bill
b. Promise made before it is drawn
c. Any person who, upon faith
thereof, received the bill for value.
(Sec. 135)
42
XPN:
1. When they have expressly or impliedly
authorized the holder to take a
qualified acceptance, or
2. Subsequently assent thereto
3. Implied assent (when they did not
express their dissent to the holder
within a reasonable time when they
received a notice of qualified
acceptance). (Sec. 142)
A:
GR: PA is not necessary to render any party to
the bill liable. (par.2, Sec. 143)
2.
A:
1. Drawee is dead, or has absconded, or is
a fictitious person not having capacity
to contract by bill
2. After exercise of reasonable diligence,
presentment cannot be made; or
3. Although presentment has been
irregular, acceptance has been refused
on some other ground. (Sec. 148)
C. DISHONOR BY NONACCEPTENCE
A:
1. When it is duly presented for
acceptance and such an acceptance is
refused or cannot be obtained; or
2. When presentment for acceptance is
excused, and the bill is not accepted.
(Sec. 149)
A. TIME/PLACE/MANNER OF PRESENTMENT
A:
1. By or on behalf of the holder
2. At a reasonable hour on a business day
3. Before the bill is overdue; and
4. To the drawee or some person
authorized to accept or refuse to accept
on his behalf. When:
c.
A:
1. Right of recourse against all secondary
party accrues to the holder
2. No presentment for payment is
necessary since dishonor of the
instrument by nonpayment is to be
expected
3. If the instrument is accepted after it has
been dishonored by nonacceptance
presentment for payment is necessary
upon maturity; and
4. In case of nonpayment, holder must
give the corresponding notice of
dishonor; otherwise, secondary parties
are discharged.
A:
1. Bill drawn payable elsewhere than at
the place of business or the residence
of the drawee; and
43
2.
3.
4.
5.
6.
7.
8.
44
A. DEFINITION
Q: What is a check?
B. KINDS
A:
1. Cashiers or managers check Drawn
by the banks cashier or manager, as the
case may be, upon the bank itself and
deemed accepted by the act of
issuance.
2. Travelers check Upon which the
holders signature must appear twice,
one to be affixed by him at the time it is
issued and the second counter
signature, to be affixed by him in the
presence of the payee before it is paid,
otherwise, it is incomplete.
45