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Notes On Negotiable Instruments 02
Notes On Negotiable Instruments 02
Section 191, of the Negotiable Instruments Law provides that, negotiation is the
transfer of the instrument, from one person to another, so as to constitute the transferee
as the holder thereof.
What is an endorsement?
1. Special;
2. Blank;
3. Restrictive;
4. Conditional;
5. Qualified;
Under Section 40, of the Negotiable Instruments Law, what is meant by a fictitious
person? Is this to be interpreted literally?
No, a person is still involved. However, that person does not have any right to the
instrument. This is what is meant by fictitious.
What determines whether a person is fictitious?
Under Section 40, of the Negotiable Instruments Law, special endorsers may be held
liable, even if the instrument is a bearer instrument. Why?
Under Section 38, of the Negotiable Instruments Law, to whom does the phrase,
without recourse, or sans recourse, refer to?
They are in reference to the qualified endorser. Thus, the holder has no recourse
against the qualified endorser.
Under Section 39, of the Negotiable Instruments Law, what is the reason why the
condition may be disregarded by the person making payment?
The reason is the relativity of contracts. The payor is a not a party to the principal
contract, which is why he may disregard the condition, and pay before it happens.
Remember that what is conditional here is the endorsement, and not the
payment. If the payment is conditional, then the instrument is not negotiable.