Nego Finals Notes

8/11/2019 Nego Finals Notes

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NEGO FINALS NOTES

Real Defenses

FF-CADE-MM-WIWI

ForgeryFraud in Factum

Ultra Vires

act of a CorporationAlterationDuress amounting to raudExecution of an instrument between public Enemies

MinorityMarriage

Wantof authority of an agentIncapacity to ContractWantof Delivery of an Incomplete InstrumentIllegal Contract

Requisites for a Bill of Exchange to be Negotiable:

WUD-N

1. It must be in writing and signed by theDRAWER

2.

Must contain an unconditional ORDERto paya sum certain in money

3. Must be payable on demand, or at a fixed,determinable future time

4. The drawee must be named or otherwiseindicated therein with a reasonable certainty

Requisites for a Promisory Note to be Negotiable:

WUD

1. It must be in writing and signed by theMAKER

2. Must contain an unconditional PROMISEtopay a sum certain in money

3. Must be payable on demand, or at a fixed,determinable future time

Requisites in order for an agent to avoid personal

liability over an instrument:

1. Indicates that he is signing as an agent2. He must be authorized3. Disclose his principal

3 Functions of a Document of Title

R-C-T

1. Evidence of Receipt2. Evidence of Contract3. Evidence of Title

Sec. 23. Forged signature; effect of.- When asignature is forged or made without the authority ofthe person whose signature it purports to be, it is

wholly inoperative, andno right to retain the instrument, orto give a dischargetherefor, or to

enforce paymentthereofagainst any partythereto,

can be acquired through or under such signature,

unlessthe party against whom it is sought to enforcesuch right is precluded from setting up the forgery orwant of authority.

Section 52. Holder in due course- has taken theinstrument under the following conditions:

[C-O-G-N]

(a) That it is complete and regular upon its face ;

(b) That he became a holder of it beforeit wasoverdue, and without noticethat it had beenpreviously dishonored, if such was the fact;

(c) That he took it in good faith and for value ;

(d) That at the time it was negotiated to him, he hadno notice of any infirmity in theinstrument or defectin the titleof the person negotiating it.

Section 88. Payment in due course

MHGN

1. At or after maturity2. To the holder3. Good faith

4. No notice of defect of title of the holder

Section 60. Maker

Undertakes: to pay the note according to its tenorWarrants: (1) payees existence; (2) payees capacity toendorse

Section 61. Drawer

Undertakes that:

1. On presentment, the bill will be accepted,paid, or both

2. If dishonored, he will pay the holder or anyendorser who is made to pay it; but he has the


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NEGO FINALS NOTES

option, by stipulation, to disclaim liability fordishonor of the bill.

Section 62. Acceptor

Undertakes that the bill will be paid accordingto its tenor of the acceptance.

Section 65. Qualified Endorses / Negotiation

by mere delivery. Warranties:

G-T-C-K

(1)

the genuineness of the instrument;(2) that he has good title to it;(3) all prior parties have capacity to contract; and

(4) he has no knowledge of any fact that wouldimpair the validity of the instrument.

But when the negotiation is by delivery only, thewarranty extends in favor of no holder other than theimmediate transferee.

*a qualified endorser does not warrant the financialresponsibility of the parties to that instrument.

Section 66. General Endorses Warranty:

G-T-C-V +P

1. the genuinenessof the instrument;2. that he has good titleto it;3. all prior parties have capacityto contract; and

4. That the instrument is, at the time of hisindorsement, validand subsisting.

5. he engages that, on due presentment, it shallbe accepted or paid or both, as the case maybe, according to its tenor, and that if it bedishonored and the necessary proceedings ondishonor be duly taken, he will pay theamount thereof to the holder, or to anysubsequent indorser who may be compelled topay it.

Presentment for Payment

Manner:

HHPP

1.

made by the holderor a person authorized2. at a reasonable houron a business day3. proper place4. to person primarilyliable on the instrument,

or if he is absent or inaccessible, to any person

found at the place where the presentment ismade.

Presentment for Acceptance

needed when: (sec 148)

1. payable after sight2. need is expressly stated3. bill is drawn payable elsewhere than at the

residence of place of business of the drawee

*to charge parties secondarily liable

Not needed when:

D-A-F-I D-OG-E

1. drawee is dead, incapacitated, absconded or afictitious person. DAFI)

2. after the exerciseof reasonable diligence,presentment cannot be made D)

3. although presentment has been irregular,acceptance has been refused on some otherground. OG)

4. he has no right to expect that the instrumentis to be paid.

relative exception: if the endorser is anaccommodated party(same asno. 4 but see sec.80)

Notice of Dishonor

*may be waived whenever (sec 111)

Section 112notice is dispensed with if afterreasonable diligence it cannot be given to or does not

reach the person sought to be charged.

Generally: Waiver and Exercise of reasonablediligence = Excuse

DRAWER-No need for notice

SFI-PEC

1. drawer and drawee are one and the sameperson;

2. drawee is afictitiousor incapacitatedperson;3. drawer is the person to whom the instrument

is presentedfor payment;


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NEGO FINALS NOTES

4. drawer has no right to expector require thatthe drawee or acceptor will honor theinstrument; and

5. where the drawer has countermandedpayment.

ENDORSER- No need for notice

FI-PA

1. drawee is a fictitious of incapacitatedpersonand the endorser is aware of such fact at thetime of his endorsement;

2.

endorser is the person to whom theinstrument is presentedfor payment; and

3. the instrument was made or accepted for hisaccommodation.

Section 116When notice of dishonor by non-acceptance has been given, notice of a subsequent

dishonor by non-payment is not necessary unless inthe meantime the instrument has been accepted.

Section 117Omission to give notice of non-acceptance does not prejudice a holder in due coursesubsequent to the omission.

Protest

Foreign bills- Protest is required

Inland billspayable and draw in ph, all others areforeign bills.

Acceptance

Actual

1. writing2. signed by drawee3. Must not express that the drawee will perform

his promise by means other than the paymentof money.

Holder may require the acceptance be written the billitself, if rejectedhe may treat the bill as dishonored.(sec. 133.)

Retention within 24 hours is equivalent to anacceptance.

Destroying the instrument = acceptance.

Late acceptance is with retroactive effect

Documents

Nego Finals Notes