Politics Negotiable Instrument Pdf


Saturday, October 19, 2019

Negotiable Instruments. Lesson Negotiable Instruments. Exchange of goods and services is the basis of every business activity. Goods are bought and. important characteristic of negotiable instruments. That is it confers a good title on the transferee, who has taken it in good faith, for value and without notice. Instrument negotiable till payment or satisfaction. CHAPTER V. Of Presentment. Presentment for acceptance. Presentment of promissory note for sight.

Negotiable Instrument Pdf

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PDF | This research paper deals with the following constellation of Characteristic features of negotiable instruments and presumptions under. NEGOTIABLE INSTRUMENTS: Similarities and Differences (C) MAJURA IBRAHIM W LL. B (Hon) University of Dodoma There are various kinds of. Payee, if the instrument is payable to order—the person in whose person to whom “every contract on a negotiable instrument is incomplete and revocable until.

If the acceptance is qualified.

If the drawee remains lost after reasonable search. If the drawee is dead or has become insolvent, and the drawer fails to present the instrument to the representative of the drawee.

Then the bill stands dishonored [6]. If there is a default in payment. If there is partial payment made and the remaining payment is still not made after the maturity date [7]. The drawer will be imprisoned for two years and would have to pay a fine of amount which is equivalent to twice the amount paid by him. Though this offense is of civil nature, a fine and penal sentence is imposed due to two reasons i. To get back the money lost by the holder [8].

The procedure to be followed by the holder in order file a case is elucidated below.

If a cheque is dishonored the bank would inform the holder about it and the bank would also mention the reason for the cheque being dishonored. The holder can send a legal notice to the drawer with the help of a lawyer within 30 days of knowledge of the issue.

The notice would make a demand to the drawer to pay the default within 15 days after the issue of notice. If the holder releases the maker, acceptor or indorser from the instrument [10]. If the payment is made to the holder [11]. If the holder allows the drawee more than 48 hours to accept the bill, then the bill is discharged [12].

When cheque is not duly presented or When the cheque is payable to order [13].

If there is a material alteration. Thus, the act governs the transaction involving negotiable instruments effectively. Dishonor of cheque for insufficiency, etc. Comment: As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears.

Section of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. Bhaskaran, Appellant v.


When cheque not duly presented and drawer damaged thereby: 1 Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or person on whose account it is drawn had the right, at the time when presentment ought to have been made, as between himself and the banker, to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of the banker to a large amount than he would have been if such cheque had been paid.

Post Views: 1, John Doe, the indorser of the note, corresponds to the drawer of the bill; the maker of the note to the acceptor of the bill. The liabilities of these assimilated parties are also identical. The maker of the note and the acceptor of the bill are the parties 'first liable to the holder.

Negotiable instrument.pdf - Negotiable instrument 1 denes a...

If these parties fail to pay, the in- dorser of the note and the drawer of the bill become liable. A mere memorandum of indebtedness without a promise to pay is not a promissory note. For example, "I. The chief points of difference between a bill of exchange and a check are the following:. By certification of a check is meant the act by which the bank admits the check to be good. No particular words ark necessary though certification is generally made by the proper bank official writing "good," or something equivalent on the face of the check.

Bank of Carson, u. Each is intended to circulate as money, and each is an abso- lute promise to pay a specific sum upon demand. The demand may be made whenever it suits the convenience of the party entitled to the stipulated payment.

This attribute they have, the transfer being effected by indorsement if the contract is payable to order, or by simple delivery if payable to bearer. A complete title passes in either case.

A thief may, however, transfer for value a negotiable instru- ment that he has stolen and thereby convey a valid title. So also may the finder of a negotiable instrument that has been lost. Marine National Bank vs. National City Bank, 59 N. They may also be transferred by operation of law as when the holder dies. In blank-signature only — John D oe. Title can pass only when A himself indorses the instru- ment ,t 3.

In full restrictive-payment to indorsee only: Pay to A only ; pay to A for me ; pay to my servant for my use — John Doe. This indorsement prohibits further nego- tiation and makes the indorsee an agent for collection. In the indorsement, "Pay to A for the use of B," the title passes to A, but he holds the instrument in trust for B and can only negotiate it subject to that trust.

Conditional indorsement: Pay to A or order if he ar- rives dX 21 pay to A or order unless before payment I give notice to the contrary — John Doe. Title does not pass unless the condition is fulfilled. Without recourse: Pay to A without recourse, or sans recourse; pay to A at the indorsee's own risk — John D oe.

This means that the indorser exempts himself from liability to indemnify the holder should the bill or note be dishonored. That is, he guarantees that he has' a good title and that the instrument is neither forged, fictitious, nor altered. Waiver : Notice of dishonor may be waived by an in- f In making indorsements of this class, especially on govern- ment checks, the indorser should exercise care to signh i S name as it is written in the previous indorsement or on the face of the instrument.

It may be payable a given time after date ; at, or a given time after, demand; or at, or a given time after, sight. To charge the drawer and indorsers, presentment for acceptance or for payment, as the case may be, followed in case of refusal by notice of dishonor, is' necessary. A bill, note, or check is presented by exhibiting it and requesting its acceptance or payment.

The holder must first seek pay- ment from the parties primarily liable. That is, -from the acceptor of a bill of exchange, the maker of a promissory note, and the drawee of a check. Presentment must be made by the lawful holder or his au- thorized agent. A failure to make due presentment for acceptance, where acceptance is necessary, deprives the holder of his remedy both on the bill itself and on the consideration for which it was given.

Negotiable instruments not payable on demand are en- titled to days of, grace," generally three, which are added to the nominal time of payment.

Where no time of payment is specified the instrument is regarded as payable on demand. But the drawer of a check is not discharged from his obligation by unreasonable delay in presentment of the check for payment, or in giving him notice of dishonor, unless he has been actually pre- judiced thereby ; but if the drawer has suffered a loss thereby as when the bank fails, he is discharged to the extent of his loss.

Checks should be presented for payment within a reason- able time. The following rules are safe: If the holder and banker are in the same place the check should be presented within one business day after its receipt. If they are in different places the check must be for- warded for presentment within one business day after its receipt, and must be presented to the banker within, one business day after its arrival at the place where the banker is located. A negotiable instrument is dishonored when acceptance or payment, as the case may be, is refused, acceptance or payment being legally required.

When an instrument is dishonored notice of that fact must be given — in case of a bill or check, to the drawer and indorsers ; in case of a note, to the indorsers. Otherwise they are discharged. NOTICE OF dishonor, unless a writing is required, may be verbal and should be given immediately after dis- honor, the' law allowing a reasonable time, determined by the "usual couse of business," to reach all the parties whom it is sought to charge.

Where the parties all reside in the same place the drawer and indorsers must be notified not later than the next business day. If they live in different places, notice must be deposited in the post office so as to be taken by the mail leaving within that time. A failure to comply with these-rules relieves the drawer and indorsers from lia- bility. If the holder is willing to rely upon the indorstr immediately preceding himself notice to this indorser alone will be sufficient.

It is better and safer, however, to notify all parties liable. Each indorser has 24 hours, or one busi- ness day, in which to notify the indorser preceding hiru.

In case of foreign bills of exchange protest is required. Protest is a written declaration by a notary, under a copy of the instrument dishonored, that acceptance or payment has been refused..

Generally, the notary takes all the steps, presentment, demand, and giving notice, necessary to fix the liability of the drawer or indors- ers. These steps are set forth in a certificate under seal, which certificate is generally accepted as evidence of the facts set forth and thus obviates the necessity of calling witnesses.

It is common to protest all dishonored negotiable instru- i8 ments in the manner described above, and foreign promissory notes when indorsed should be protested as they are then practically biils of exchange. The requirement of notice, or of protest and notice, may be waived by a statement to that effect on the face of the in- strument. This is frequently done and all parties who indorse such paper are then bound by this additional agreement.

The contract of the maker of a promissory note is indi- cated in the instrument. The contract of a drawer is virtually that of an indorser. The contract of an indorser is that he will pay the sum named in the paper upon the following conditions precedent: 1. Where presentment is for pavment or acceptance acceptance being necessary. Foreign Bill-r. Due presentment and demand: 2.

Due protest: 3. Due notice of dishonor. Inland Bill-I. Check-Same as inland bill unless regarded as a foreign bill in which case protest will also be required. Where presentment is for acceptance and acceptance is not necessary — Foreign Bill-I. Due protest : 2. This contract of an indorser is an implied contract re- sulting from the negotiable character of the instrument.

But the transfer of such an instrument is a sale thereof, and 19 the seller is, in addition, bound by the implied warranties of title and of the genuineness of the instrument as has already been shown in the case of an indorsement without recourse. After maturity the instrument loses its character of ne- gotiability and a purchaser at that time takes the title of his assignor.

Negotiable Instrument Law Philippines

But a demand note is negotiable for a reasonable time after its date. Generally a negotiable instrument given for a debt does not discharge it unless by agreement of the parties.

If, how- ever, a negotiable instrument made by a third person be in- dorsed for a contemporaneous debt, or given without in- dorsement for a precedent debt, the debt is not discharged. But the above rules are presumptions merely and may be varied by express agreement between the parties. In some States, however, when a note or bill is given on account of indebtedness payment of the debt is presumed until the con- trary is shown.

Generally negotiable paper received as. Negotiable instruments may be issued in one jurisdic- tion, indorsed in another, and payable in a third. Their construction and interpretation, therefore, 'are liable to be governed by different laws and it then becomes important to determine which law governs.

The validity of a contract is generally determined by the law where the contract is made. Contra in New York; id, p. If not usurious there it is not usurious anywhere. The contracts of the drawer, acceptor, and in- dorsers are all different and their validity will be.

The interpretation and binding force of contracts are determined, by the law of the place where the contract is to be executed. That is, the law of the place of performance governs. The rate of interest payable as damages is also de- termined by this law. The law of the place where suit is brought for breach governs the remedy, form of action, etc. A party to a negotiable instrument may interpose certain defenses in a suit brought by a holder against him, among which are the following: 1.

In this case the contract is voidable, not void. At common law a negotiable instrument made by.

This rule has been changed in many States. Statutes may avoid instruments by de- claring certain contracts void, or annexing a pen- alty to the performance of the act for which the instrument is given. Material alterations. It is doubtful whether insanity or complete intoxication is a defense against a holder for value without notice; but ultra vires is not a defense. Nor is the fact that the instru- ment was obtained through fraud or duress, or that there is a failure of consideration; or that payment has been made, a defense against a purchaser for value without notice.

If alterations are innocently made recovery can be had upon the original consideration.

Negotiable instrument

Forgery of a negotiable 21 instrument, or of an indorsement thereon, except in case of ratification or estoppel, nullifies the instrument as to all parties against, whom the forgery is committed. In case of forgery the payor can recover of the payee claiming through forgery, the recovery being based upon the warranty. But forgery does not destroy the title of the true owner of the instrument, nor the right to collect it.Rangappa v.

The sum payable must be certain. Drawee A drawee is the person on whom the bill is drawn. Is the date necessary to an instrument? B obtains the signature of A by telling A that it is only for autograph purposes or that it is for some document other than a NI then B converts the paper into a NI. This case over-ruled the case of, K.