NEGOTIABLE INSTRUMENTS

Law on Negotiable Instruments 919

Principal Characteristics of negotiable instruments 919
Functions of Negotiable instrument 919
Incidents in the life of a negotiable instrument 920
Requisites of negotiable instrument 922
Most commons forms of negotiable instrument 922
Discussion as to section 1 of negotiable instrument
a. Instrument must be in writing and signed... 926
b. It must contain an unconditional promise 926
c.1 When instrument is payable on demand.. 928
c.2 When instrument is payable at fixed or future... 929
d.1 When instrument payable to order 929
d.2 When instrument payable to bearer 932
e. The drawee must be named or otherwise... 934
Provisions, Stipulations, omissions and other 935
factors not affecting negotiability
Mechanically incomplete but delivered instrument 946
Mechanically incomplete but undelivered inst. 949
Mechanically complete but undelivered inst... 950
Interpretation where instrument is ambiguous 953
Liability of persons whose signature does not 954
appear on the instrument
Signature by procuration 955
Effect of indorsement or assignment of infant 956
(minor) or a corporation
Forgery. Concept 957
Effect of Forgery 959
Illustrations of Forgery 959
Consideration 964
Consideration, concept 964
Two presumptions (these may be rebutted) 964
What constitutes value 965
When lien on instrument constitutes holder for 966
value
Concept, effect of want or absence, total failure, 966
or partial failure, of consideration
Accommodation party 967
Negotiation 970
Modes of transfer of negotiable instrument 970
Negotiation and assignment distinguished 971
Indorsement, concept 972
Indorsements, where and how made 972
Kinds of Indorsement 975
Indorsement of instrument originally payable to 979
bearer
Indorsement if instrument is payable to two o 979
more persons
Effect of instrument drawn or indorsed to a person 981
as cashier or other fiscal officer of a bank or a
corporation
Indorsement where name of payee or indorsee is 982
misspelled
Indorsement in representative capacity 982
Time of negotiation or indorsement, presumption 982
Place of indorsement, presumption 982
Continuation of negotiable character 982
Striking out indorsements 983
Effect of transfer without indorsement of an 988
instrument payable to order
When instrument is negotiated to prior party 988
Rights of the holder 989
Holder, concept of kinds 989
Completeness and regularity on the face of an 990
instrument
When an instrument is overdue 990
When holder has notice of dishonor 991
When holder is in good faith 991
What constitutes notice of infirmity in the 992
instrument or defect in the title of the person
negotiating
When holder takes instrument for value 992
When title to instrument is defective 993
Kinds of defenses of arties to negotiable 994
instruments
Rights of a holder 995
Rights of a holder in due course 996
Rights of a holder not in due course 996
Presumption of holder being a holder in due 997
course
Liabilities of Parties 998
Parties primarily liable 998
Parties secondarily liable 998
Liability of the maker 999
Liability of the acceptor 1001
Liability of the drawer 1001
Liability of person negotiating by delivery 1002
Liability of a qualified indorser 1002
Liability of a general indorser 1002
Liabilities of a person negotiating by qualified 1002
indorsement
To whom warranties of qualified indorser extend 1003
Liabilities of a person negotiating by delivery when 1003
instrument is payable to bearer
Liabilities of a general indorser 1004
To whom warranties of a general indorser extend 1004
Illustration of liability of qualified and general 1005
indorser
When a person is deemed an indorser 1005
Irregular or anomalous indorser 1006
Liability of indorser where instrument is negotiable 1007
by delivery
Order in which indorsers are liable 1007
Presentment for payment 1008
Concept of presentment for payment 1008
Necessity for presentment for payment 1008
What constitutes sufficient presentment 1009
Notice of dishonor 1012
Concept of dishonor 1012
Purpose of notice of dishonor 1012
Grounds for the giving of notice of dishonor 1012
Necessity of giving notice of dishonor 1012
Effect of failure to give notice 1016
Requisites of notice of dishonor 1016
Criminal liability for dishonored checks (Estafa and 1021
Bouncing checks law)
Violation of B.P. 22 or Bouncing checks law 1022
Clearing house rules on dishonored checks 1024
Discharge of negotiable instruments 1026
How a negotiable instrument is discharged 1026
How parties secondarily liable are discharged 1029
Effect of valid payment by party secondarily liable 1031
Renunciation by holder 1031
Material alteration of an instrument 1032
Immaterial alteration 1034
Spoliation 1034
Acceptance 1035
Acceptance, concept 1035
Kinds of acceptance 1035
Time allowed for drawee to give acceptance 1040
When bill may accepted 1040
Presentment for Acceptance 1041
Presentment for Acceptance, Concept 1041
When presentment for acceptance, required 1041
Option of holder when bill is required to be 1042
presented for acceptance
Requisites of Presentment for Acceptance 1043
Where presentment for acceptance is excused 1046
When bill is dishonored by non-acceptance 1046
Duty of holder if bill is not accepted 1047
Rights of holder if bill is not accepted 1047
Protest, concept 1047
When protest required 1048
Requisites of protest 1048
When protest dispensed with 1050
Instances when protest is optional 1050
Acceptance for Honor 1051
Requisites of acceptance for honor 1051
Purpose of acceptance for honor 1052
How acceptance for honor is made 1052
When acceptance for honor is deemed for the 1052
drawer
Liability of acceptor for honor 1052
Maturity of bill after sight is accepted for honor 1053
When presentment of bill for payment to acceptor 1053
for honor made
When delay in making presentment for payment 1054
to acceptor for honor excused
Dishonor of bill by acceptor for honor 1054
Payment for honor 1054
Requisites for payment of honor 1055
Procedure for payment of honor 1055
Preference of parties offering to pay for honor 1055
Preference of parties offering to pay for honor 1055
Effect when bill is paid for honor 1055
Effect of holder refuses to receive payment for 1056
honor
Bills in set 1056
Purpose of a bill in set 1057
Rights of holders where different parts are 1058
negotiated
Discharge of a bill in set 1058
Promissory note-Special types 1060
Bills of exchanges and checks 1061
Kinds of bill of exchanges 1062
Basic rules on checks 1063
Kinds of checks 1066
Distinctions between check and bill of exchange 1068
Instruments that are not negotiable 1069