Professional Documents
Culture Documents
Notes On Negotiable Instruments 09
Notes On Negotiable Instruments 09
What are the distinctions of the negotiable instrument, and the negotiable document
of title?
The negotiable instrument is used for the transfer of credit or money. The
negotiable document of title is used for the transfer of goods.
1. In blank;
2. To bearer;
3. To a specified person.
Does the transfer of the negotiable document of title, result in the transfer of the title
of the goods?
Yes, the transfer of the negotiable document of title, results in the transfer of
goods. The transfer of the document, controls the transfer of the goods. The negotiation
of a negotiable document of title, has the effect of manual delivery, so as to constitute
the transferee, the owner of the goods. The direct obligation of the bailee, issuing the
negotiable document of title, to hold possession of the goods, is owed to the transferee,
from the moment of negotiation.
Suppose the document was not negotiated but merely transferred to the holder, what
are the effects?
The person to whom it has been transferred, and not negotiated, acquires against
the transferee, the title of the goods, subject to the terms of any agreement with the
transferor. The transferee may convert the plain transfer, to negotiation, by compelling
the transferor to complete the negotiation process.
What is the effect if there was, in fact, an intent to negotiate the document, but
possession of the same is retained by the transferor?
Article 1544 of the New Civil Code, or the rules on double sale cannot apply. The
law negates will of the first purchaser, and assumed that 1 willingly permitted sale
number 2.
What are the rights of a person, to whom a negotiable document of title, was duly
negotiated?
May an unpaid seller, go after the purchaser of the negotiable document of title?
No, the unpaid seller cannot pursue the purchaser of a negotiable document of
title. There is no sellers lien, or right of stoppage in transitu, that can defeat the rights of
the purchaser for value, in good faith, to whom the receipt has been negotiated.
The warehouseman is also not obliged to deliver to an unpaid seller, until and
unless the receipt is first surrendered for cancellation. The presentation of the receipt for
cancellation is important, because it is proof that the unpaid seller has validly
reacquired the receipt from the holder for value.
The general rule is that the warehouseman is not excused from liability for
refusing to deliver the goods according to the terms of the receipt. The exceptions are:
The defenses that the warehouseman may raise, for non-delivery of the goods
are: