Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
I.
Intro"uction A. #$at is is a Negoti Negotiable able Instrument Instrument% % & 2005, 1946, 1946, Bar A written contract for the payment of money intended intended as a substitute for money and it passes or may pass from one hand to another in such a manner as to give the holder in due course, the right to enforce payment against all parties pa rties liable to him. #$ile it is inten"e" as a substitute 'or money you must $a(e learne" in your )anking Laws t$at it is not legal ten"er. ). Functions unctions o' Negotiabl Negotiable e Instrument Instrument & 2012, 1951, Bar (SMC-PP) *. It o+e o+era rate tes s as a Substitute 'or money. ,. It is is a Me"ium o' e-c$ange. . It is is a Cre"it instrument t$at increases cre"it circulation. /. It inc incrrease eases s t$e t$e Purc$asing +ower in circulation. circulation. AQUINO, Negotiable Negotiable Instruments, p. 0. It is is a Proo' o' transaction 1 AQUINO, 7 !t$ey may state t$e transaction t$at gi(e rise to t$e issuance o' t$e instrument. 2. Princi+ Princi+al al 'eatures 'eatures o' Negotiable Negotiable instrum instrument ent & 1967 Bar *. Negotiability – it is t$at attribute or +ro+erty w$ereby w$ereby a bill or note or c$eck may +ass 'rom $an" to $an" similar to money3 so as to gi(e t$e $ol"er in "ue course t$e rig$t to $ol" t$e instrument an" to collect t$e sum +ayable 'or $imsel' 'ree 'rom +ersonal "e'enses.
XN Y I
. . .
,. A!"!latio# o$ Seo#%ary Co#trat& – #$en negotiable instruments are trans'erre" t$roug$ negotiation3 secon"ary contracts are accumulate" because t$e in"orsers become secon"arily liable not only to t$eir imme"iate trans'erees3 but also to any $ol"er or any +arty. +arty. !$ese in"orsers are liable to sai" $ol"er or w$oe(er may be com+elle" to +ay instruments 1 AQUINO, AQUINO, Negotiable Negotiable Instruments, pp. ""!"# ""!"# ILL4S!RA!I5N6 NOTE. I' not negotiate"3 M is +rimarily
liable. I' t$e +ayee "oes not negotiate t$e note on t$e maturity "ate $e +resents it 'or +ayment to t$e maker an" t$e maker "oes not +ay & $e "is$onors t$e note & t$ere is no ot$er +arty *7M8ILLA
Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
'rom w$om $e can "eman" +ayment. $%UN&IAN', (re!)ar *ecture NOTE: 2 +resents it 'or
+ayment to maker. I' t$e maker "is$onors or "oes not +ay3 +ro(i"e" t$e $ol"er takes +rocee"ings on "is$onors3 t$at means $e must gi(e notices to P3 A3 an" )3 t$en became liable to 2. In ot$er wor"s3 e(ery negotiation is a contract in itsel'. $%UN&IAN', (re!)ar *ecture 9. 9i:erences between negotiable "ocument 'rom negotiable instrument & 2005 Bar Negotiable 'o!"e#t ;o(erne" by t$e Negotiable Instrument Law Sub
Negotiable #&tr!"e#t ;o(erne" by t$e 2i(il 2o"e
Sub
=. 9i:erence between a +romissory note an" a bill o' e-c$ange>c$eck 1Secs. *?/ an" *?0@ & 2002, 1947 Bar Pro"i&&ory Note * Bill o$ +a#ge Promissory Note
)ill o' =-c$ange
Nature 4ncon"itional Promise 4ncon"itional 5r"er Number o' +arties ,7M8ILLA
Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
In(ol(es two 1,@ +arties
In(ol(es t$ree 1@ +arties. owe(er3 a "rawee is not a +arty until $e acce+ts t$e bill. Liability Maker is +rimarily liable 9raweeacce+tor is +rimarily liable. 9rawer is only secon"arily liable. Presentment 5nly one 1*@ +resentmentB May in(ol(e two 1,@ 'or +ayment +resentmentB *. For acce+tance 1in cases +ro(i"e" in Sec. */@ an" ,. For +ayment Rig$t to limit liability Ma.er o$ #ote "ay #ot 9rawer may insert in t$e instrument an e-+ress i#&ert a# e/re&& &ti/!latio# li"iti#g or sti+ulation limiting or #egati#g i& o# liability negating $is own liability to t$e $ol"er $NI*, %ec. +" to te ol%er (NIL, Sec. 61) Bill o$ +a#ge * Ce.
)ill o' =-c$ange
2$eck
#$en +ayable May be +ayable on "eman" Always +ayable on "eman". or at a C-e" or "eterminable 'uture time. Presentment Must be +resente" 'or Nee" not be +resente" 'or acce+tance. 1NI3 Sec */@ acce+tance. owe(er3 i' t$e $ol"er request an" t$e banker "esires3 banker may acce+t. 9rawn on "e+osit Nee% N be %ra# o# a 9rawn in "e+osit3 ot$erwise3 t$ere woul" be 'rau" %e/o&it, e#e it i& #ot #ee&&ary tat te 1%UN&IAN' AQUINO, %raer o$ a bill o$ -eviewer, p "" ) 7M8ILLA
Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
ea#ge &o!l% ae $!#%& i# te a#%& o$ te %raee* (SUNDIANG & AQUINO, Reviewer, p 11) #$en +resentment ma"e May be /re&e#te% $or Must be +resente" 'or /ay"e#t iti# +ayment wit$in a reasonable rea&o#able ti"e a$ter it& time a'ter its issuance $NI*, la&t #egotiatio# (NIL, "+ sec. 71) =:ect o' acce+tance>certiCcation I' acce+te" & I' certiCe" & "rawer>in"orsers "rawer>in"orser remains are "isc$arge". liable. =:ect o' "rawerDs "eat$ 'eat o$ a %raer o$ a 9eat$ o' t$e "rawer o' a B+, it te .#ole%ge c$eck3 wit$ t$e knowle"ge o' o$ te ba#., %oe& #ot t$e bank3 re(okes t$e aut$ority o' t$e banker to reo.e, te a!tority o$ +ay. 1%UN&IAN' AQUINO, te %raee to /ay* (SUNDIANG & AQUINO, -eviewer, p "" Reviewer, p 11)
F. Parties to a +romissory note an" a bill o' e-c$ange 1Secs. *?/ an" *?0@. Pro"i&&ory Note Ma.er – +erson w$o +romises to +ay accor"ing to t$e tenor o' t$e note Payee – +erson w$o is to recei(e +ayment 'rom t$e maker. Bill o$ +a#ge 9rawer 9rawee Payee • • •
;. Li'e stages o' a +romissory note an" a bill o' e-c$ange. Pro"i&&ory Note Issue Negotiation Presentment 'or +ayment 9is$onor by non+ayment /7M8ILLA
Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
Notice o' "is$onor 9isc$arge Bill o$ +a#ge Issue Negotiation Presentment 'or acce+tance 1only t$ose cases 'alling un"er Sec. */ NIL@ 9is$onor by nonacce+tance Presentment 'or +ayment 9is$onor by non+ayment Notice o' "is$onor 9isc$arge II.
Form an" Inter+retation A. =lements>Requisites o' Negotiability 1Sec. * correlate wit$ Secs. ,3 3 /3 E3 ? an" @ & 2013, 1996, 1992, 196, 1964, 1954, 1953 Bar G4ncon"itionalH 1 2orrelate wit$ Sec. o' t$e NIL an" Art. ** o' t$e 2i(il 2o"e@ Postal money or"er3 treasury warrants not negotiable & 2005, 90, 1975 Bar Ca&e Metrobank (s. 2A3 Feb. *?3 *?*3 */ S2RA *E & treasury warrants not negotiable. 2ertiCcate o' time "e+osit3 letter o' cre"it negotiable & 1970, 1966, 1959 Bar GSum certainH 12orrelate wit$ Sec. ,@ I' sum is ca+able o' mat$ematical com+utation3 still negotiable & 2012, 2002 Bar GIn moneyH 1correlate wit$ Art. *,/ o' t$e 2i(il 2o"e@ Foreign currency (ali" & 2014, 2012 Bar #are$ouse recei+t not negotiable & 2005, 194 Bar GPayable on "eman" or at a C-e" or "eterminable 'uture timeH 12orrelate wit$ Secs. / an" @ 2009 Bar 5mission o' "ate not 'atal & 2012, 2000, 11997, 1957, Bar =rror in "ate not 'atal 2002, 1959 Bar 5mission o' year w$en t$e mont$ an" "ay is sate" 'atal & 1997 Bar Not negotiable i' "ebtor is grante" t$e o+tion to +ay in eit$er o' two "ates & 1970 Bar GPayable to or"er or bearerH 12orrelate wit$ Secs. ? an" @ & 2012 Bar 07M8ILLA
Negotiable Instruments Law Fiscal R.S. Aquino!ambasacan
Person must not be s+eciCe"B it must be or"er or bearer & 2000, 199, 19, 1966, 1959 Bar Payable to G2aseH is bearer instrument & 1997, 1960 Bar
E7M8ILLA
