which the check was given as cotton ft be dscharse. == -___saza, Fhe payment of debts in money shall be a BD Te sted and ti not posse ae ancy, en nthe Curency which is Ea Pe, eye order, o Fn ils of ihe effect of payment only when they have rot es a le el ae ar Bape ben acted fom te onal Shiigaton shal be held in the abeyarice ‘while it is true that the delivery of a check produces, {the ellect of payment only when its cashed, pursuant fo Art, 1249 of the Civil Code, the rule is otherwise if thedebtoris prejudiced by the creditor's unreasonable Gelay in presentment. The acceptance of a check limples an undertaking of due diligence in presenting itfor payment, and if he from whom it is received ‘sustain loss by want of euch diligence, it will be held to operate as actual payment of the debt or obligation made at all, the drawer cannot be held liable lnmespective of loss or injury unless presentment is, otherwise excused. This is in harmony with Article 1249 of the Civil Code tunder which payment by way of check or other negotiable instrument is conditioned ‘on its being cashed, except when through the fault of ‘the creditor, the instrument is impaired. The payee of 4 check would be a creditor under this provision and if its non-payment is caused by his negligence, Payment will be deemed effected and the obligation for "Burton Gp. CAO, 85060, ue 38, 2001 2 which the check was given as conditional payment be dischargea» S*"" S#condtvonal cit 000 0 SOUTH NEGOTIABLE eTRUAMENTS LAW? 1. FORM AND INTERPRETATION ‘an instrument is negotiable if i conforms to the equirements prescribed under ‘Section of the Negotiable Instruments Law erorm of jotiable instruments. - An | ete a eae following requirements: Sen (mas ein Wigan led by he mane jumieretaatons escacctoesproasteage fe aSF OEE pres al sme coer abate nga os ueetes ies saw (2 drm oe (iter ee vacant Caer ee oe be at he certibe cee ee ees therein with reasonable certainty, To be negotiable, an instrument must conform to the lowing requirements: ry Scanned with CamScanner— ayer mane ve wie a SIH WY We Makeror . Fa cae : 4 gee ree mate na feta 8 Pe hay ey eae in one’ Owor machine, in print oF typed. The material oie ‘difference. It mi ofa evs cis wnt males no ial upon whlch pment, clot, leather or any other Ep pee te ete ine ay amt tere ane ic A ee ae ecg Maecenas instruments is that Issuance is Shermnieory note the issuer the maker, in abil Te eReange, the isuer i the drawer. A promissory Sie"munt be signed by the maker, anda bill of Exchange, by the drawer. signature fe not limite to the personal handwriting of nc namer it need not be te full name ofthe isster. het means the maker or drawer may make an {impression of his signature with « rubber stamp or ‘rer an ithe nena that by 20 doing he has signed Itean be ped or by thumbprint Signatre initials 2» instead “understood sort, but Temay be one’s thumbmarl or Initials or even numbers; it may jeaphed or photogra ‘may consist of mere be printed, engraved, litho Moreover, the om the simature_ ‘by any word, mark, oF symbol executed or adored So a person with the present intention to anne wating. POL prise ty (woman! prin) Ben fd (cael rs) {2heMust-Contain-an-Unconditional-Promise-or Order torPay-s:Sum.Certain in Money » ‘A promissory note contains a promise to pay, and a Bill contains an order to pay’ Tae ce “unconditional promise” refers to prominvory noe, and the phrase “unconditional order to bile of ‘xchange and checks, strument from cannot be made payable in goods, property, or services, or a combination thereof, with the lone ‘exceptionmundereSsetiam=sjaewhere the option “to ‘reason for this rue is to prevent ap z i Tt on ee 937) Teo Beso ht hate Racer fren 9 Re e388, 0 Scanned with CamScanner———- tiew of payment of something to be done i reais, fy granted to the hotder.*? money” ument where «creditor assigns his claim otras and orders him (debtor) to pay the oer sored to a certain payee orasignee, isnot Ginko stetge although the words “order” or ‘ear ve uted therein Inthe cae, dhe pdenionay ional. On the ‘Rand if the order is unconditional, it is seater as far as the negotiability of the instrument is concerned, that the drawer has no valid ‘iain against the drawee and has no right to draw on him. ck drawn on a bank where the drawer as no A SHEGE Such a negotiable instrument asi he had finds ttuee ie drawer, docs make an ‘ihsoaitondl demand or order upon the bank. The eres ante must be as unconditional a6 the era bl Another requirement of negotiablity is that the instrument must be for : a Sa in a noes ‘Thig paragraph is supported by Section 132 which states that in a ilbofexchange, Payable on demand means payable. es tenes aerate eee, fe eee ‘payable, or at sight, or on presentation; or in whice oo time for payment is expressed. =e Overdue > Paget me eee ca wipe vag ways; For example, a note might say that itis payable on or before a stated date; or ata fixed period after date or Sight; or at a definite time eubject to acceleration; or Ata definite time subject o extension atthe optn the holder or automaticaly However aninetumient ‘Reenngorinecentdciiaarenccss st Sometimes ills of exchange are payable a fixed ai)" Bumber of days after sight or after date, When-icha 1" — billswill become-duedis:not-fixed when the instrament ‘By-looking at the instrument one cannot tell how soon it will be due, but the holder can ‘make it become due within the given number of days Scanned with CamScanner—— ormally presenting the instrument 0 afer igh Oy fo pe rtinale behind Section 143(0) a oman ans ae ‘eouabilty, An instrument-payabletO"ORde? is one A check drawn payable to the order of “cash eck payable to Bearer ad the Sec nese 3 © for payment without the an | Meron mit Sgnieee Bats ihe “There is no drawee in ‘a promissory note. The drawee need not be specifically named, Seievenough that he is-identiiabe frder, he mstrument current mayor 2 ee ee $0.00 joint drawees, Snot matter whether the instrument reads to. er IheouderatAtor towvorordes® they mean the same where . {hing An instrument may be payable to the order of ieacaeaemeienaeenes the maker, drawer, drawee, or someone els. jhe instrument is in fa fund fia which case it is payable to the Fepresentative, to an’ office or officer, or to a partnership or unincorporated association), In determining the negotabilty ofan instrament, only ‘donegotablesinstrument'not-payablestorarpartioular —————— lave requires that emeanineetohtt ‘the value of a negotiable instrument be ascertainable “To be payable to bearer, the on its face, withoubreference:to-otherdocuments. Tt or “payable-to ‘Juan dela‘Grazor bearer’; or it may be made payable coernsetwitsetbe Jam dec om Reogpetinenpepromrinesnnccitsnrarions Se eet oe ceget ese reac FE leew | Petes ance ncaa an \ een ecm = = aecuaeh eee ces 2 Py Scanned with CamScannersppears on the instrument that itdasksoneson toad the provisions of Act No. 2031 do not govern the instrament. SS erate re ee (On the issue of whether postal-moneyrorders are negotiable instruments, the 1971 case of Philippine pput the matter to rest In that case, the Supreme Court held: "The weight of futhonity im the United States io that postman being that in establishing and operating «postal ‘money order system, the government is not engaged jn commercial transactions but merely exercises a ‘government power for the public benefit. Moreover, For instance, Such laws and regulations usually provide for not ‘more than one endorsement; payment of money orders may be withheld under a variety of “circumstances.” - What about withdrawalslips, are they negotiable instruments? Withdrawal=slips=are=non=negotiable instruments The essence of negotiability wl characterizes a negotiable paper as a credi 3s | | lad malts n nap hak Ln, Mgr instrament ties in Suet tment The nae ea Sharacter™ (On the matter of electronic messages, Court held in one case that on “he insiructons. ges te eceronic messages arenot args Sous ee ed by the ivestorcients as supponed rastee abil “of exchange, they doo cone a “unconditional order to ay a sum certain fn manty Sy the payment is supposed fo come fom s apes Rat or aeeount ofthe investor cients; and, thoy are nt payable to order or bearer but to a speclicaly Tgminiturdperge + pgeoarer ee Bee mr 5 atti) A promissory note isan unconditional promis, abil of exchange is an unconditional orden the orginal Parties fo a promissory noe are the maker and the Davee, the orginal partes toa bilef exchange are the rendoconert is apt the uric the insert iene, tna prominsorn th oa bat (into Sen: eer on Seco ‘Wable#in a bill of exchange the party p ly ea Dra Sas a Se en SP oath ee 38 Scanned with CamScannererin Omtns or.2 The drawee who accepts the bill is the accep to him becomes an acceptor. ‘when presente’ ‘liable on the instrument. ‘the maker and the acceptor are primarily and Uhconditionally liable; while the drawer and the Indorsers are secondarily and conditionally liable. Te hold he drawerand-the:indorsers-lablerthe-fllowing ‘ondione=mestmcnncar® (The note or il ‘and, ((Q) The drawersandwindorsers) otherwise they are dis a In the case of a check where the drawee is a bank, Certification eg that they have been set mart ieee easarton sd hat they shal be 80 tbplied whenever the check s presented for payment Where a chore i cere by the bank on which itis trav te ceifestion fs equlvalent 0 scceptance = Bar Questions ‘Bor Bxoms 1959, 195%, 196%, 1968, 191, 1996 ‘What ar the requisites of a nogotable rumen ? ” ar Bvam 1966 Apromissony note reads as follows: 1 ‘Slangar 10 de years pers une EO Cave eS of tn my acy aetna rane bitty or non-nepote lppines” Discuss he Repeal or onnegotey of here haya? (U) What i the testo determine whether an Ti a feet aes See poles Discuss the negotiablty or non-negtcity ofthe foasing ‘ Bases ars [py tn emu a sae A Zasaco me ise a ey ert ae {10,000 00 tn out) stant, th te ot wale, Siraiyity amendmen a ial Site rea ey Lees 2 apeacetaaaten E nrters nai Sang centgaean Coa reteay te Slowing Randipdeted notons PS Fy Scanned with CamScannerse meron esa S0S PRET FOS Ce ee ee ax 4/00 nm indi Je ate of the promissory note. When JR present Ey dae de Sct ret ee cee Ee a llc Spee alte Roel rosa cl te eee een tenet es Se a oh PS eee nen ‘Signed by MK and writen pa, ha nerhead ec es tn ae Nei oan Ear ee a fs pape Prone “450 pesos. The payee acknowledged ae ehh alas gh Terao et ee ellie Ae eicars Sarina aly Magee mean Be tap eng weal CP etn ae ete ate salen Svea Ss Sa a irs ‘Baan 2005 ‘ian negtabe instrument? Give the characterises of repeabe stmt [Seci@iiWhat constitutes certainty as to sum. - The ‘sum payable is a sum certain within the meaning of this Act, although itisitobepaid? (a) with interest; or (b) by stated installments; or (c)by stated installments, with a provision that, jon default in payment of any installment or interest, the whole shall become due; or (@) with exchange, whether at a fixed rate or at the ‘current rate; oF » sea SE apn etn a teres 14..What Constitutes Certainyas-To Sum ‘The sum, payable must be wertainsoreatteast \gacertanabledormoney: The certain is moraeeees {i}winterest - The sum payable is a sum certain although to be paid with interest. the rate of interest is fixed by-thesnstrument itself, theenct eumaien, ‘Buanutime. [interest is due but the epee nee fot stated-in-the- instrument, the euseent legal als applies. - installments, oo ieee a ———s otherwise=the=bill>wouldebe-non-negotiable because the sum payable would not he certain acascectainable inmon lation. a {PrrAcceteration Clause~ The third subsection refers to an acceleration clause whereby, under “certain ‘conditions, the date of maturity maybe advanced. The scceleration maybe in-terms automatic or itmay be tethesoptionsofethesholdes The holder may be ‘authorized to accelerate “at will oron demand ten referred to as "at his whim’), or when he “deems himself insecure," or on makers default in the Scanned with CamScannerof principal or interest, ofthe maker fils Per ay or keep scuty 00d." ‘An accepted type of ‘where ‘amen stag conned te note *Yrelause was contained in the note ional City Bank v. Erskme & Sons, Inc see pronded that i the chattel mortgage Tae las Foote was “breached” the note should FEUER atthe holders option. The court in that Prom dur the clause did ot destroy negli. cleration clause is one ‘A common type of acceleration clause is where the ena eae immeiveney or == any other objectively Gueerlainable event, It has also been ruled that ould accserate the date of maturiyRE aaa or if there be such a change {hte eonaton or afi (Enancial or otherwise) of thy of the panics as In the opinion of the holder fhercotwllincrese ite ike The power to aceclerae, eer ares, ep nant 6 Wan er. 2891950) sm tp fo mn i an rer ari ih eae mee bs aw Reve VL ‘to tarp we lures. etd se eee reach fe ras denied A promos the pint 120 monte anes OS Sieltncoualy witha mores cet stead The mortgage Contained sage aces te ae th fae fo pay taxes up tesa et thin tiny dave ater they bosmne nea as Folder of the mortgnge the option fe Cmte amount secre by the engeee e payable "The morgage reared eae ‘Seu Sa thet as eed fay tan ne Iorgnge. Subsequent, apenas sro the pain noted the ceenaene of aes scdrato ts dane eases ‘To hold that they are one inst and one contract for” purposes of interpretation would allow the terms of the note to be varied by extraneous instruments contrary to the theory of negotiable instruments. In effect, the court, in this case, was of the opinion that incorporation of the mortgage provisions into the note destroyed the ‘egotiablity ofthe instrument. (@hBxchangeRates The fourth subsection pertains to So nts och aca 1 be To, Moai mama = he a fe ASHE Tba Ray aeaphcemnea esas Scanned with CamScanneremer: the meaning of mae sum ie certain within ‘guvemine though the instrument, is payable with the stat or ata fixed rate or at the current ra cast-of-Collectionsorsattorney’sr Rest - The final 6, the stm payable is likewise gubsetion igh with conta of collection or with Comey’ fe if payment is not made at maturity. Bar Questions ‘Bar Bar 1970 i nether or nthe flung instrument is nepotible, al Gas TIT Pickmatedge 1 have rctved from laze Cruz one Hous 1 ees eth o)thien Tpromise to pay on demand ori five an fet nef chery enthroned tnd then bo pnebet an intrest shall become de the fpton ofthe holder. FRO 1592) Pedr Gara ‘Bar Beam 1992 Pia baught a motorcar payable in installments from Automotive Company for P380,000 00 arth 50,000.00 downpayment. She ‘Sette promissory noe forthe Bolan whisk reader Tose eed Terni pay fiona Cmpany or At soir Legaap Cy, the um 9f P200,000.00 wth interest 4 12% por annum, payabiem equal intalments ef P20,000.00 forte 0} monhe tartng 2! October 2002, (Sad Pera anita, 21 September 2002 a beeen nr te nto Rtste which financed the purchase, Pena deta is I i above re tee (a) An indication of a particular fund ot which reimbursement is to be made (b) A statement of the transaction which gives rise to the instrument. ‘But an order or promise to pay out of a particular fund is not unconditional. ‘An_ungualified order or promise to pay is Unconditional though coupled wih a (), trindioation-of-a-partowtar-find-outof-ahich ‘eiminursement sto be nate or portaar account Dedebited-witthe amount -A promise or enter to ‘which is dependent on the existence or ruficency of ‘fund or credit s non-negotiable, but gatatementot for the sm isto be paid "egardless of whether the find or credits sufficient 9 feet the charge. Aspromisenor: order to pays * Newepaan Bar GAG Me 846 Rey 1. Unuedinie! ~neyehove st Gardyyan) ~ ey oe Scanned with CamScannerspa wir of aan Wala Cras P0;,000.00 on Fe ner 30, 2020 from my money in your hands. » Pedro Santos ‘To: Carlos Ret in the above example, the order is conditional and tnt aber: egutable forthe reason that the order dae cadet on the existence and suteney erected, Here the fund indicated (iy oh fan jan is he atet source of payment Fay to Whe orler of Juan dela. Crus PTO,000.00" on Betomber 0, 2020 and reimburse yoursl from ‘money in vour hands. ya.) Pedro Santos In the above example, the order is unconditional and therefore negotiable because the order to pay is not dependent on the existence and sufficiency of the fund indicated, Here, the fund indicated (my ‘money in your hands) is not the source of payment but only of reimbursement. In abillofexchange, ifthe drawee paid the payee frome his oven funds and afterwards pays himself from the particular fund indicated inthe instrument, the order ‘is unconditional hence the instrument is negotiable: In stich a case, the particular fund indicated is not the irect source of payment but only of reimbursement. What is conditioned upon the existence and sulficency of the particular fund indica reimbursementin favor ofthe drawee, not the ovtetng bey. not the oder fo non A atone of ae fave vac to the tnatniment doce Saas Pegotlbiy of the instrument aie eat the promise or order to pay is tmade subject (he term and conditions of tre tanonesen we snsaction that (Sod. Pedro Santo. In the above example, the transaction that gave rise to the instrument is’ the contract of sale over construction materials even that itwas given for value, since “consideration is presumed? but atthe discretion of the parties the same may be indicated. ve rise to {as in the above example), but in tilleofexchange ot “checks; the basis of the drawers obligation toward the payee is generally leftunspoken. Scanned with CamScannerJeterminable Tuture time, within the meaning of | this Act, which is expressed to be payable: {aAta fixed period after date or sight; or {H)0n or before a fixed or determinable future ‘time epecified therein; or {c) On or ata fixed period after the occurrence of [t specified event which is certain to happen, though the time of happening be uncertain. 16, DeterminableFature Time, |A determinable future time must be indicated in a negotiable instrament infer this section, the flow ‘examples indicate a “determinable future time”: = {i} Thiet days ater date sights {2} On orbefore December 30,2020; and (3) Thirty days ater the death of P's grandlather si gpa aa ae er Fora opay por HOROO es re ee conditioned upon a contingency (payee's passing the ‘bar exam. Even if P actually passes the bar exam, that Gost v Waiteate, agit Pon ee ‘would not cue the defect andthe instrument wo Sill be nom pegotatte for big enatan Protons not affecting rnegotiabiity.-An instrament which cone aee Gres or romine edo sy actin aioe ns payment of money ie not neponagee me ie otiable character ofan inntament ote iogotiable i not affected bys provisos ala {shuthorises the sale of etter secant in ase the instrument be nt paid st actin (b)authorizes a confession of judgment if the instrument be not paid at maturity; or (c) waives the benefit of any law intended for the advantage or protection of the obligor; or {@)gives the holder an election to require something to be done in leu of payment of! money. But nothing in this section shall validate any provision or stipulation otherwie illegal. (Eee areas eae A/sAdditional Provisions NotAsecting Negotiabilitp This section ‘provides that an instrument, to be ‘negotiable, must be payable only in money, among other requirements. However, its negotiabilty is not “affected by the following provisions: ~The debtor (maker oF Grawer) agrees to the sale of collateral securities G guny ennone quny Scanned with CamScanner4 « There are two types of selon of judgment: celia Cognovitis a Latin term for and Cognovit actionem means “HeoWas es the *contes authorizing the latter or his attorney to sign ‘fidgment and issue execution for a named sum. At thetime the debt ie created & debtor gies his creditor the power authorizing the clerk of court to enter Judgment against him, whenever the creditor may request. + Confession. reta verifection inthe a In a confession relicta Weatons, other procedures taken by hi debtor The debtor (maker or draw to pay his indebtedness on due date. This isan that a negotiable instrument is payable only in money. Under this paragraph, _servicestinliewofmoneye-However, if the choice is on the debtor (male or drawer), the instrament is non- negotiable for being contrary to Section 1(b).°* The chars is gent te Ceeninee> ih of the fiouing stations or se of proisoy sete afew dona apt mai ery ‘hes cthruice negate? Indete yore ge puch nl opt eee phope SS See al at Sri of he Pera, 30,002 8a Bae rep nt ey fe ‘andar arr ate Sa fos fat a it Seciresng Biel ren BAe eos Oe Seige Sh ca get NM gesihe maker pn make payment ‘ope oh qn of iy oregano iat her i payne scat of te hole for 30. gee tee ‘Seal; parélcular money. ~The ‘validity and negotiable character of an. instrument are not affected by the fact that: (a) it i not dated; or (0) does not specify the value given, or that any value had been given therefor; or {c] does not specify the place where it is drawn ‘or the place where itis payable; or (q) bears a seal; oF (c) designates a particular kind of current ‘money in which payment is to be mad But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument. 18, Permissible Omissions Scanned with CamScannervalidity and negotiabiliy of a bill or note is Fae the fact that the date and place of Tein che aaiuesgiven, and the piace of payment cxeeuton Gated herein, oF that itis payable in foveign-currency: “The placonwhere-drawn-and=the-date~are usually “wrten together on the upper right-hand comer ofthe Se mncancdate oomatantyayaeo oe hissing without aflecting she validity of the paper. The Place fpayment when not specified in the metrument JP the makers residence or place of business. When {he instrament species nomaterity-date seis peyaile, omidemad 5) pou e pymint ~ pasar befor ea en ‘The tack of date is unimportant in negotiable {Rtrament unless iis in terme payable on a certain period alter date. Ian instrument in this form were fundated, # would be an incomplete instrament which Would have tobe deat with as provided in Section 13. In some foreign jurisdictions, instruments under seal Imposing obligations upon ‘private individuals had been held to be non-negotiable. However, foreign courts have been unanimous in declaring obligations: ff corporations having attached thereto a seal as ‘negotiable on the theory that the seal was not placed there to restrain their negotiability, but rather to stamp them as genuine. Republic Act No. 8183 (June 11, 1996) allows the partes to agree that an obligation or transaction shall, be settled in any other currency at the time of payment. Section 1 of the law states: “All monetary ‘obligations shall be settled in the Philippine currency iio tae fine inch parties may agree that the obligation of transaction rey sets tenon sn eae an ore RSS, hea eae rae a ee atthe rte Sigangtnce? x ‘The negotiability of an instrument is not destroyed if it “designates a particular kind of current money in which payment is to spice = ‘Te above promissory note iemegotahe ren iit is Zot dated (no date of eaceution ot mani) does nat Specify the value given or tht any value had boon then. therefor, docs ‘not indicate he’ places af Execution and’ payment, and’ hat itis payee in foreign cre. Ifo date of execution is indicated the payee i allowed. to fill im the true date;9* valuable consideration is resumed,” ifno-date-ofmaturity is stated it means the instrument is ifnoplace.of payable on demand executions provided, it means @ bili drwm-on ay Scanned with CamScannera ‘Befmnent tated, ean the instrament is payable ‘Bar Question ‘Bar Exam 1997, Bree efexchange ora promissory nete qualify as anegatiable eet died ne date andthe month, but net the yoor of ts manuity TE peyable to cash or {Tlhnames neo aematvedrawees When payable on demand. - An {instrument is payable on demand: (a)When it is so expressed to be payable on demand, of at sight, or on presentation; or ()In which no time for payment is expressed. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the ‘seuing, accepting, or indorsing it, ble on demand. AasaPayabteomDetnaad Whi. o(t db) Je on demand means payable on demand, the payee of holder may require payment anytime after issuance of the note, and the maker or drawee has the option to ay anytime pris to demand or presentment Refusal EE oe Based on this section, the following notes are payable on demand: a rae (i) pomiae to pay tothe order of P 710,000 an (2) T promise to pay othe order of PP10,000 asi, (3) I promise to pay to the order of # F10,000' em far I promise o pay tthe order of P 10,000. Ginastera ford, 1 the time for payment i et blank fas oppencd Ye being omitted, it may properly be considered sa an ‘ompleteinirument and fae under the povtiees of Sections 15, 14, of 15, depending on whether the Inotrament is delivered raat Tyo en If the instrument is payable at a fixed time and the ‘oF hol re on. ‘supulated date and becomes pajanle on demand as to te pary who Jesued, accepted, or indorsed it) when already ee ce teereereciene ee for it When indorsed overdue, the indorsee is not a hholder in due course and takes the instrument subject {0 defences, but retains his rights against his indoreer. The indorsce has a right to treat the instrament aa the Iindorsement of a new demand note which may be Scanned with CamScanner a— hin a reasonable time after the pessented nd may charge his indoreer ifthe note escr paid on presentment. thatis payable on démandi alo called a"sight uD tas zara lone not payable on demand. ‘payable to order.- The Tnstrament| (Serer to brecr where ie amidrawn payable-to it may be drawn payable to the order of: ‘payee who is not maker, drawer, or drawee; (0) The drawer or maker; or (c) The drawee; or (4) Two or more payees jointly; or (e) One or some of several payees; or (f) The holder of an office for the time being. 20-Payable‘To-Order {An instrument payable to “A or order” or payable to the “order of A” have the same legal effect, although there is a bit of difference between them. In the latter form, strictly speaking there is no payee until A makes ‘an order to pay another person, yet legally A is the payee ae er, 36 a a a ee ip ety Sibi ss Temes ‘An instrument payable to order is negotiated by the Inorsement of the older and compited by dekvery 1 the indorace® Without te word st ones ase Based on this section, the Slowing instruments are payable to order [N) I promise to pay Payee or order P10,000.00. (2) [promise to pay Maker or order P16,000.00. (3) Pay to Drawer or order P10,000.00. (8) Pay to Drawee or order P10,000.00 {8) Pay to A and B or order P10,000.00. {6) Pay to Aor Bor order P10,000.00, {) Pay to the order of the current mayor of Manila 10,000.00. vipa ‘Where the maker is himself the payee, he becomes his. trument payable to the order of the ‘malcer himseifis not a completed instrument unailit ‘is indorsed by him to another person who becomes the -payecol the instrament, Ifthe indorsement isin blanie the instrument ‘On the other ill dram payable To the drawer’ own order 4s complete without indorsement. sdointepayees: are indicated by the conjunction “and”: ‘must indorse. Severallpayees, are any One of them may indorse. in the Sent the check aa eGo Pyws ie Being, OF. Ne. 7253 Ae Scanned with CamScannernade out to wo naviduns without specifying “and” sade oa el ily require both signares. “Wmere the instrament isspayabe-to-order, thepayer ‘The payee can be any person, Tecluding the maker, drawer, or drawee, or any two oF ‘mere. persons jointly, or ‘one or some persons everally, or he can be the holder of an office! Im that case ‘Sections 14 or 15, or tteated as payable to bearer ifthe payee appears to be 2 fictitious or non-existing person, or the name of the payee does not purport to be the name of any person. ‘Sectionsttzrcals with an instrument wanting in any ‘material particular. It says: “(W)here an instrument is ‘wanting in any material particular, the person in Possession thereof has prima facie authority. to Smite iby fling up the blanks therein Hence [a= s ' ' ' I | { ' ‘payable to bearer. The instrament is payable to bearer: (a) When itis expressed to be 20 payables oF (6) When it is payable to a person named therein of bearer; oF (c) When it is payable to the order of a fictitiow ‘or non-eristing person, and such fact was ‘known to the person making it so payable; or (@) When the name of the payee does not purport to be the name of any person; or (¢) When the only or last indorsement is an indorsement in blank. @iaPayable-To Bearer eae very negotiable instrument {ether ‘payablo-to /eeatenor toorden without exception. The diference ‘between the two is relatively simple" an instrument made ‘hte an ister paabietoorser pablo to the order of the person or party identified in the ‘Begotiabletnstrumentiteel py emie we bare ‘Based on this section, the following instruments are ayo eae to the order of bearer _ G) Payton —O (6) Pay to CASH (9) Pay to the order of CASH” (6) Pay tothe order of Por bea (2) Pay tothe order of White Lad) (8) Pay tOE= met hewn 7 tee ¢ 8 Scanned with CamScannerye wo possesses he aoe sein any ofthe Aeyone aners ie holder ofthe note. Paragraphs cio renent ‘Paragraphelennolds (Geandoherere he ierument i ape fhe teat we ns on ae aon a eta oee fctous payee but not indorsed in the peiee of such payee, i» payable to bearer. This is a Band conclusion otherwise nobody would be entitled {othe sum payable or it could give some person a bad 2otcmake a false indoreement in order to give tile | aragrapir(dpholds that when the’name of the payee “A cheeh payable to the order of “Cash” is payable to bearer, fu the Bank may pay the person, presenting i for payment without the drawer’s indorsement.0e Instrument payable to bearer is negotiated by delivery." ‘Under paragraph(ely an instrument payablestasordet (0) "When there is onlysonetindarsementwendthat _indorsement is in blank; and ‘eae non CA No L2S16, oper 251050, ° (2) When there arceuseSLinGrsetens@yand:thelast “Andorsementis in blanc s “blaniesndorsement™orantindorsementinblamie) ‘and an instrument so indore Pyar ro beer etedt and may be negotiated by mene me ai rae oe “ z perc Payable to bearer, though ihe hole, rine Se name or that of nother perenne anaes shove te indortment may change the intrest fem one pai io bearers one para oa opal ‘Special indorsement;indorsement in blank. ‘special indorsement specifies the peraon to whom, oF ta Whose order, the instrument is to be payeble, and the indorsement of such indorsee is necessary to. the {further negotiation ofthe instrument. Anindorsement ta Blank specifies no indorsee, and an instrument £0 indorsed is payable to bearer, egota ndored ic to bearer, and may be ted [SepeSEBlank tadorsement: how changed to weal ‘rdorsement. ~The holder may conser ‘a bias 'ndoraemen ini. spetalindorsenen by ring {he ignatre of the indoraer i lank ang eek consistent with the character ofthe tlorsenint 8 etn 9, Scanned with CamScannerthat an instrument originally The a rea ret a pasticular person becomes er Seeet papel ‘Section 9 should be read together with Section 40 ‘which states rdoraement of strament payable Bearer Fan an rumor poyabe bere ioe ert gr i may nevertheless be further negotiated by Eivergs but the person indorsing specially is liable as ‘forest only such holders as make tite rough his indorsement “an instrument originally ‘Sections pertains to Tt holds that Teontinses to be payable to bearer noweithstanding theepetial indorsement. Section 40 further states that ‘the person indorsing specially sable as indoreer to only’ such holders’ as make’ tile through his indoreement” "The indorser of a bearer instrument tours the laity ofa regular indoreer under Seton 6 a ‘Take note of the distinction between instruments pavable to order but indorsed in blank and Instruments payable—to bearer but indorsed =e a Mlustration 1: M issues a note which states, "! promise topay to bearer P10,000."Pindorses the note specially o 10.4 lover the natrument andi found by B, who Selle beore macuny fo Gan ime ee eee Erste om the inset denn ae eee a Secilyindored fo 86 ‘Mlustration 2:M isues a note which states, “Pay to order of? P10,000." indorses the note a lacie subsequent holder, B, indorses it specially Gre loses the note and tie finder so tt a boned purchaser sand claim payment thereon ax bearer instruments A bearer instrument does not require indorsement, 60 it can be negotiated by mere delivery to the transferee, ‘who becomes a holder. The indorser's warranties are jn favor only of the person who reccives’ the instrument, not to subsequent transferees "=| ‘A negotiable instrament payable to bearer is risky for the payee than one that is payable to order. This 1s Dbecatise an instrument payable to bearer is, basically, ‘money in and of itself the document is all that 16 necessary to receive payment. Ifthe instrument were stolen, the thief would be able to use it to reccive payment thereon. Howate, bearer struments have tei own benef, ‘mostly because they are easy to use and to transfer ‘Simply handing over the document of a Bearer instrument is enough to transfer the funds involved, Tals a fortunate for case of use and also for those situations in which the party to pay is unclear. For Instance, a pre check might be made out to cash so Scanned with CamScannernat can be bestowed upon any bearer instead of @ Specie one sraments payable to order, on the other hand, ean Inet eg for payment when they have the specific one Meat of the pargy mentioned on the ingetjnent Av auch, they are generally safer than ‘Bijan to bearer instruments. Ine arava: a bearer instraen fo B.B then specially indorses kt AaeerE eer cores ttn lank fo D8 Seas the farument 2 on gh str of, succents nego Fee Late ie idinment god father slue ‘i ortng as the race bank refuses to ondr turcheck, Sue fete stent cganat he drawer? ‘Sheen fe dhonoraf the check by bathe dates cd the ae ech Foi eny of ©, © ana D table secondary onthe iran? ses ‘tee fiona Page, Aurora Page, eee Eadie to Signed: Aurora Page Later, X without endorsing the promissory noe, transfers ana ‘ela’ the came to Napalaon” "The ne “Sebaoquenty eto by Rahat Capon ay Nepoon proved Sout ‘Berton 3003 ‘A issued a promissory note payable to Bor bearer. A delivered ‘he nots BB indaraed the nate to 6. € placed tha natn ht pte whch ten by eater nds he oo Din foging Cs signanire D indorsed the noe to Esha In tm Selvered the nate tof, holder in due. cours, wath ‘ndorsement Discuss the ndualtabitie to Fof A, Band C e (BEEIOP Terms, when sufficient, - The instrament ‘need not follow the language of thie Act, but any terms are sufficient which clearly indicate ax intention to conform to the requirements hereof, ‘22eTerms When Sufficient Generally a negotiable instrument contains the UU)" promise to pay to the'rder of Jus oF (2)"T promise to pay to Juan Cruz or res” or (G) "Pay to the @#aet of Juan Cruz" or (4) “Pay tog Fu or order” However the instrument need nt follow the language of the lav, but any term which clearyindletSe es Smtention to conform to the legal sequence sufficient.1'6 Sc ee pf ing 09 Sve Hence, the word ‘promise’ maj'be"substituted with “assure"“covenant,” Shewerds “eapate "woul Wow" ete, whch carry the same crelosely sar meaning, [SRGRAIT Date, presumption aa to. ‘such date Is deemed prima | the true date of the making, drawing, ‘or indorsement, as the case may be. 23. Presumption As To Date Scanned with CamScanner