SECTION 11-16

Sec. 11. Date, presumption as to. - Where the instrument or an acceptance or any indorsement thereon
is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or
indorsement, as the case may be.

When to apply:

•instrument contains issue date (true date of making or drawing)

•accepted bill of exchange where acceptance is dated (true date of acceptance)

•where instrument is indorsed, indorsement is dated (true date of indorsement)

*Sec. 12. Ante-dated and post-dated. - The instrument is not invalid for the reason only that it is ante-
dated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom
an instrument so dated is delivered acquires the title thereto as of the date of delivery.

GENERAL RULE: Ante-date and post-dated is valid

EXEMPTION: for an illegal or fraudulent purpose.

Applies when ante-dated or post-dated in accordance w/ a mutual agreement by the parties.

Ante-dated - earlier than the date of issuance/delivery

Post-dated - later than the date of issuance/delivery

When title is acquired: date of actual delivery (NOT date of issuance)

*Sec. 13. When date may be inserted. - Where an instrument expressed to be payable at a fixed period
after date is issued undated, or where the acceptance of an instrument payable at a fixed period after
sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument
shall be payable accordingly. The insertion of a wrong date does not avoid the instrument in the hands of
a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date.

GENERAL RULE: Date is NOT necessary for the negotiability of the instrument (relate to Sec. 6)
EXEMPTION: (When date is necessary) (what to insert? same as presumption)

-where interest is stipulated, to determine when interest is to run

-to determine where a party has acted w/in a reasonable time

Knowingly inserting the wrong date in an undated instrument party so inserting the wrong date = it is
VOID

holder in due course = it is VALID, date inserted = true date

2 steps in the execution of a Negotiable Instrument (Sec. 14; Sec. 15; Sec.16)

1. Act of writing completely and in accordance w/ sec. 1 of the nego instrument law (WUPPA)

2. Delivery w/ intention of giving effect to it

*Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any material particular, the
person in possession thereof has a prima facie authority to complete it by filling up the blanks therein.
And a signature on a blank paper delivered by the person making the signature in order that the paper
may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for
any amount. In order, however, that any such instrument when completed may be enforced against any
person who became a party thereto prior to its completion, it must be filled up strictly in accordance
with the authority given and within a reasonable time. But if any such instrument, after completion, is
negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may
enforce it as if it had been filled up strictly in accordance with the authority given and within a
reasonable time.

Material Particular

particular omission will render the instrument - non-negotiable:

a. name of the payee

b. name of the drawer

2. Particular omission will NOT render the instrument non-nego:

a. date
b. rate of interest

c.place of payment

Prima facie authority presumed:

-want of material particular in the instrument

-possession by person (other than the drawer or maker)

-person had auth to fill up the blank

-prima facie auth to fill up any amount

Signature on a blank paper

-person signing in blank delivers it w/ intention that the paper may be converted into a nego instrument

RULE (holder-payee,indorsee,bearer=plaintiff; debtor-maker,acceptor,drawer or indorser = defendant)

holder in due course - can enforce the instrument as completed against both prior OR subsequent
parties

holder NOT holder in due course - can enforce the instrument as completed against subsequent parties
only

Personal/equitable defense that below req is NOT met - only against holder NOT holder in due course

Requirements to hold prior parties liable (must be holder in due course NOT just holder; prior parties -
indorsers and person negotiating by delivery)

a. blank filled up in accordance w/ the authority given

b. must be filled up w/in reasonable time (relative)

*Sec. 15. Incomplete instrument not delivered. - Where an incomplete instrument has not been
delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of
any holder, as against any person whose signature was placed thereon before delivery.

*Sec. 16. Delivery; when effectual; when presumed. - Every contract on a negotiable instrument is
incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As
between immediate parties and as regards a remote party other than a holder in due course, the
delivery, in order to be effectual, must be made either by or under the authority of the party making,
drawing, accepting, or indorsing, as the case may be; and, in such case, the delivery may be shown to
have been conditional, or for a special purpose only, and not for the purpose of transferring the property
in the instrument. But where the instrument is in the hands of a holder in due course, a valid delivery
thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where
the instrument is no longer in the possession of a party whose signature appears thereon, a valid and
intentional delivery by him is presumed until the contrary is proved.

Rules Sec 15 and 16:

Delivery - essential to validity

Undelivered = incomplete = revocable = no rights

1. As between immediate parties or those in like cases, delivery must have been w/ the intention of
passing title

2. An instrument signed by the drawer or maker BUT NOT completed by him and retained in his own
custody is invalid as to him for want of delivery even though stolen and negotiated to a holder in due
course

3. Incomplete and undelivered - Defense is valid against any holder (INCLUDES holder in due course)

4. BUT when the instrument mentioned in (3) is in the hands of a holder in due course, there is prima
facie presumption of delivery which the maker or drawer may rebut by proof of non-delivery

Real defense - party who signed prior to delivery

Instrument is valid against all whose signature appear after delivery

Prove personal defenses:

-no delivery was made

-delivery was NOT authorized

-delivery was conditional or for a special purpose and NOT for purpose of transfer (Ex: safe-
keeping,security,collection)

NOTE: delivery is conditional and NOT the promise is conditional otherwise non-negotiable

5. Where the custody of the incomplete instrument has been entrusted to another, who wrongfully
completes and negotiates it to a holder in due course, delivery of agent or custodian is sufficient to bind
maker or drawer

6. Where maker or drawer executes a complete instrument found in possession of another NOT a holder
in due course, delivery is presumed prima facie

7. Where the instrument mentioned in (6) is in the hands of a holder in due course, there is a
CONCLUSIVE presumption of delivery

8. Delivery of the instrument may be made on a parol condition or for a special purpose NOT
inconsistent w/ its written terms, where the validity of the instrument is to arise out of the performance
of the condition or consummation of the purpose

Condition precedent - valid; NOT affect the rights of a holder in due course

Condition subsequent - contradicts the written terms and may NOT be set up by parol evidence

Immediate parties - knowing or being held to know the conditions or limitations placed upon the
delivery of the instrument or that it was stolen; privity NOT proximity

Remote parties - not know

Diligence of owner - to give notice of loss to all parties and inform them NOT to pay the amount to any
one except to the loser or his order

Rights of finder - no title

owner - action of replevin (writ issued to recover an item of personal property wrongfully taken)

Not discharged from liability if he pays the amount to the holder of the lost instrument before maturity
UNLESS bona fide holder for value and entitled to enforce payment

Face value - basis of penalty for theft/estafa

Estafa - defraud another by removing, concealing or destroying in whole or in part a nego instrument