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This document provides an overview of negotiable instruments law including:
1. It defines a negotiable instrument as any instrument that complies with requirements under Section 1 of the Negotiable Instrument Law.
2. It lists the key characteristics of negotiable instruments including negotiability and the accumulation of secondary contracts.
3. It explains the theory of negotiable instruments - that by sending an instrument into the world, the maker is estopped from urging defects against a bona fide holder.
This document provides an overview of negotiable instruments law including:
1. It defines a negotiable instrument as any instrument that complies with requirements under Section 1 of the Negotiable Instrument Law.
2. It lists the key characteristics of negotiable instruments including negotiability and the accumulation of secondary contracts.
3. It explains the theory of negotiable instruments - that by sending an instrument into the world, the maker is estopped from urging defects against a bona fide holder.
This document provides an overview of negotiable instruments law including:
1. It defines a negotiable instrument as any instrument that complies with requirements under Section 1 of the Negotiable Instrument Law.
2. It lists the key characteristics of negotiable instruments including negotiability and the accumulation of secondary contracts.
3. It explains the theory of negotiable instruments - that by sending an instrument into the world, the maker is estopped from urging defects against a bona fide holder.
INTRODUCTION Q: What are the characteristics or features of a negotiable
AND instruments? A: GENERAL PROVISIONS 1. Negotiability – A negotiable instrument may pass from hand to hand similar to money, as to give Q: What is Negotiable Instrument Law? holder in due course the right to hold the instrument A: ___ and collect the sum payable for himself free from any defect in the titl of any of the parties, or Q: What is a negotiable instrument? defenses available to them among themselves. A: Any instrument that complies with the requirements [Secs. 52 & 57, NIL] imposed under Sec. 1 of the Negotiable Instrument Law. 2. Accumulation of Secondary Contracts – negotiable instruments are transferred from one person to Some Definition of Terms under Sec. 191, NIL: another. Acceptance – an acceptance completed by delivery or notification; Q: What is the theory of negotiable instruments? Action – includes counterclaim and set-off; A: By sending a negotiable instrument into the world, the Bank – any person or association of persons carrying on maker thereof is estopped from urging, as against a the business of banking, whether incorporated or not; bona fide holder who has received it from anyone in Bearer – the person in possession of a bill or note which is possession, a defect of title. The holder, though without payable to bearer; title, has the capacity to give title because he is the Bill and Note – Bill means Bill of exchange, while Note apparent owner of the instrument. [Manhattan Savings refers to Promissory Notes; vs. New York National Bank, 62 NE 1079] Delivery – the transfer of possession, actual or constructive, from one person to another; Q: What are the forms of negotiable instruments? Holder – the payee or indorsee of a bill or notes who is in a A: possession of it, or the bearer thereof; Common Special Indorsement – an indorsement completed by delivery; Promissory notes Certificates of deposits; Instrument – means negotiable instrument; Bills of exchange ** Issue – the first delivery of the instrument, complete in Bank check *** Bank notes; ** form, to a person who takes it as a holder; Due bills; ** Person – includes a body of persons, whether Bonds; ** incorporated or not; Drafts; Value – means valuable consideration; Trade acceptances; *** Written – includes printed; and and Writing – includes print. Banker’s acceptances *** Q: What is the purpose of the Negotiable Instrument Law? A: The purpose of the law is to facilitate, and not hinder or Notes: ** - Special types of promissory notes hamper the transactions of commercial papers [State *** - Special types of bills of exchange Investment House, Inc. vs. CA, 217 SCRA 32] Q: What is the generally rule when there is doubt in the Q: What are the functions or importance of a negotiable interpretation of a negotiable instruments? instrument? A: Where the meaning of the negotiable instrument is A: doubtful, the courts have shall resolve the said doubt in 1. As a substitute for money; favor of the negotiability of the instrument. The purpose 2. As a medium of exchange for most commercial is to encourage the free circulation of the negotiable transactions papers because of the admittedly indispensable function 3. As a medium of credit transactions; they perform in mercantile business transactions in any 4. As a means, in the case of check, of making given country and the world at large. [De Leon, immediate payment Philippine Negotiable Instruments Law, 2016, p. 8]
Q: Who are persons primarily liable on the instrument?
NEGOTIABLE INSTRUMENTS LAW 1
NEGOTIABLE INSTRUMENTS LAW Morillo Notes
A: These are the persons who, by the terms of the
instrument, is absolutely required to pay the negotiable instrument. All other parties are “secondarily” liable. [Sec. 192, NIL]
Q: What are the similarities and differences between