54671739 Negotin Notes by Angel

NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 1 of 190General characteristics: the order or command to pay; drawer/maker; drawee

NOTES FOR WEEK #1 JUNE 12 - 16, 2007 INTRODUCTION TO NEGOTIABLE INSTRUMENTS PURPOSE OF CODIFICATION Chief purpose was to produce uniformity in the laws of the different states upon this important subject, so that the citizens of each state might know the rules which would be applied to their notes, checks, and other negotiable paper in every other state in which the law was enacted, since it is an absolute impossibility for the commercial purchaser Second purpose was to preserve the law as nearly as possible as it then existed LAW EMBRACES SUBTANTIVE AND ADJECTIVE LAW MOST COMMON FORMS OF NEGOTIABLE INSTRUMENTS 1. Promissory notes 2. Bills of exchange 3. Checks, which are also bills of exchange, but of a special kind PROMISSORY NOTE, SECTION 184 A negotiable promissory note, within the meaning of this act, is an unconditional promise in writing by one person to another, signed by the maker (1), engaging to pay on demand or at a fixed or determinable future time (2), a sum certain in money (3) to order or to bearer (4). Where a note is drawn to the makers own order, it is not complete until indorsed by them. Essentially a promise in writing to pay a sum certain in money The promise is to pay on demand or on a fixed or determinable future time General characteristics: amount; place where contract to pay is executed; due date; absolute promise to pay something; payable to order/bearer; payee; maker of the note BILL OF EXCHANGE, SECTION 126 A bill of exchange is an unconditional order in writing addressed by one person to another signed by the person giving it (1), requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time (2) a sum certain in money (3) to order or to bearer (4).

CHECK A bill of exchange drawn on a bank payable on demand CHECK BILL OF EXCHANGE Always drawn upon a bank or May or may not be drawn upon a banker bank Not necessary to present for Necessary acceptance Drawn on a deposit Not drawn Death of drawer revokes the Does not revoke authority of banker to pay Must be presented for payment May be presented for payment within a reasonable time after its within a reasonable time after its issue last negotiation

TO 1. 2. 3.

WHOM INSTRUMENTS MAY BE PAYABLE Bearer Order To a specified person

WHEN IS IT PAYABLE TO BEARER? 1. When it is expressed to be so payable 2. When it is payable to a person named therein or bearer WHEN IS IT PAYABLE TO ORDER? 1. When it is expressed to be payable to the order of a specified person 2. To a specified person or his order WHEN IS IT PAYABLE TO A SPECIFIED PERSON? When the instrument is payable to a specified person named in the instrument and no other PARTIES TO A PROMISSORY NOTE 1. Makerthe person who executes the written promise to pay 2. Payee, if the instrument is payable to orderthe person in whose favor the promissory note is made payable 3. Bearer, if the instrument is payable to bearer PARTIES TO A BILL OF EXCHANGE

BY: MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010

NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 2 of 1901. 2. 3. 4. Drawerthe person who executes the written order to pay Payee, if the instrument is payable to orderthe person in whose favor a bill of exchange is drawn payable Bearer, if the instrument is payable to bearer Acceptorthe drawee who signifies his assent to the order of the drawer. It is only when he accepts the bill that he becomes a party thereto and liable thereon. First delivery of the instrument, complete in form to a person who takes it as a holder

OTHER PARTIES TO NEGOTIATED INSTRUMENTS 1. Indorser and 2. Indorsee, in the case of instruments payable to order 3. Persons negotiating by mere delivery 4. Persons to whom the instrument is negotiated by delivery INDORSER AND INDORSEE When the negotiation is by indorsement completed by delivery, the parties added are the indorser and indorsee Indorserthe one who negotiates the instrument Indorseethe one to whom the instrument is negotiated by indorsement WHERE INSTRUMENT IS PAYABLE TO BEARER Where the instrument is payable to bearer, it can be negotiated by mere delivery without necessity of indorsement HOLDER The payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof If the instrument is payable to order, he who is the payee or indorsee and who is in possession thereof If the instrument is payable to bearer, he who is in possession thereof INCIDENTS IN THE LIFE OF A NEGOTIABLE INSTRUMENT 1. Issue 2. Negotiation 3. Presentment for acceptance, in certain kinds of bills of exchange 4. Acceptance 5. Dishonor by non-acceptance 6. Presentment for payment 7. Dishonor by non-payment 8. Notice of dishonor 9. Payment ISSUE

DELIVERY Consists principally of placing the transferee in possession of the instrument, but it must be accompanied by the intent to transfer title every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto NEGOTIATION Transfer of an instrument from one person to another as to constitute the transferee the holder of the instrument Mode of transferring an instrument Effect is to make the transferee the holder of the instrument HOW INSTRUMENT PAYABLE TO BEARER IS NEGOTIATED May be negotiated by mere delivery HOW INSTRUMENT PAYABLE TO ORDER IS NEGOTIATED Must be negotiated by indorsement completed by delivery Indorsement is necessary to make the transferee the indorsee and delivery is necessary to place the transferee in possession of the instrument INDORSEMENT Legal transaction, effected by the writing of ones own name on the back of the instrument or upon a paper attached thereto, with or without additional words specifying the person to whom or to whose order the instrument is to be payable whereby one not only transfers ones full legal title to the paper transferred but likewise enters into an implied guaranty that the instrument will be duly paid SPECIAL INDORSEMENT Specifies the person to whom or to whose order the instrument is to be payable BLANK INDORSEMENT One that doesnt specify the person to whom or to whose order the instrument is to be payable NEGOTIATION, INDORSEMENT, DELIVERY, COMPARED. 1. Indorsement is merely the first step in the process of negotiating an instrument which is payable to order


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 3 of 1902. Where the instrument is payable to order, neither is delivery equivalent to negotiation 3. But where the instrument is payable to bearer, delivery is equivalent to negotiation PRESENTMENT FOR ACCEPTANCE Exhibiting the bill to the drawee and demanding that he accept it, that is, signify his assent to the order or command of the drawer ACCEPTANCE Signification of the drawee of his assent to the order of the drawer DISHONOR BY ACCEPTANCE Where the bill is presented for acceptance, and acceptance is refused by the drawee, or cannot be obtained, or where presentment for acceptance is excused, and the bill is not accepted PRESENTMENT FOR PAYMENT Consists of exhibiting the instrument to the person primarily liable thereon and demanding payment form him on the date of maturity DISHONOR BY NON-PAYMENT Where the instrument is presented for payment and payment is refused or cannot be obtained, or where presentment for payment is excused and the instrument is overdue and unpaid NOTICE OF DISHONOR When an instrument has been dishonored by non-payment or nonacceptance DISCHARGE An instrument is discharged by payment in due course by or on behalf of the principal debtor PARTIES PRIMARILY AND SECONDARILY LIABLE Under the NIL, the person primarily liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same All other parties are secondarily liable IN BILLS OF EXCHANGE The acceptor is the one primarily liable He is absolutely required to pay the instrument as he engages that he will pay it according to the tenor of his acceptance

SECONDARY LIABILITY OF DRAWER By the mere drawing of the instrument, the drawer assumes liability stated in Section 61 The general tenor of the liability of the drawer is that he will pay bill if the drawee doesnt accept or pay the bill. In other words, he is not absolutely required to pay the billif drawee pays, then he is not required to pay. It is only when drawee doesnt pay that he will be required to pay.

the the the the

SECONDARY LIABILITY OF INDORSER He will pay the instrument if the person primarily liable will not pay. SECONDARY LIABILITY OF ONE NEGOTIATING BY DELIVERY By merely delivering an instrument payable to bearer, without saying anything more, the person negotiating by mere delivery assumes the liability mentioned in Section 65. Under said section, the general tenor of liability is similar to that of an indorser IN PROMISSORY NOTES The maker is primarily liable Agreement of the maker is that he will pay the instrument according to the tenor FUNCTION OF NEGOTIABLE INSTRUMENTS 1. Substitute for money 2. Increase the purchasing medium in circulation PAYMENT BY NEGOTIABLE INSTRUMENTS W/N the giving and taking of a promissory note or bill of exchange is prima facie absolute payment as in the case of money or merely a prima facie conditional payment? The delivery of the promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when, through the fault of the creditor, they have been impaired PRINCIPAL FEATURES OF NEGOTIABLE INSTRUMENTS 1. Negotiability 2. Accumulation of secondary contracts as they are transferred from one person to another NEGOTIABILITY


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 4 of 190Attribute or property whereby a bill, note or check passes or may pass from hand to hand similar to money, so as to give the holder in due course the right to hold the instrument and collect the sums payable for himself free from defense. person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer. TYPES OF BILLS OF EXCHANGE 1. Draft 2. Trade acceptance 3. Bankers acceptance 4. Treasury warrants 5. Money orders 6. Clean bills of exchange 7. Documentary bill of exchange 8. D/A bills of exchange 9. D/P bills of exchange 10. Time or usance bills 11. Bills in set 12. Inland bills 13. Foreign bills DRAFT Common term synonymously for all bills of exchange and they are used

PRIMARY PURPOSE OF NEGOTIABILITY To allow bills and notes the effect which money, in the form of government bills or notes, supplies in the commercial world ACCUMULATION OF SECONDARY CONTRACTS Most important characteristic of negotiable instruments is the accumulation of secondary contracts which they pick up and carry with them as they are negotiated from one person to another Advantage: they improve as they pass from hand to hand, as more debtors are added NEGOTIABILITY VS. ASSIGNABILITY ASSIGNABILITY More comprehensive term and pertains to contracts in general Subject to the defenses obtaining among the original parties It was necessary to allege and prove consideration to maintain an action on a common law instrument

NEGOTIABILITY Pertains only to a special class of contractsnegotiable instruments Takes it free from personal defenses available among the parties Consideration is presumed and need not be alleged and proved Indorser is not liable on his indorsement unless there be presentment for payment at maturity and prompt notice of dishonor in case of dishonor General indorser is secondarily liable for any cause for which the party primarily liable on a negotiable instrument doesnt or cannot pay. He warrants the solvency of the person primarily liable. The qualified indorser and the person negotiating by mere delivery have a limited secondary liability

IN BANK DRAFTS, DRAWER AND DRAWEE BANK ARE LIABLE TO PURCHASER OF DRAFT FOR NOT COMPLYING WITH HIS INSTRUCTIONS The drawee bank acting as payor bank is solely liable for acts not done in accordance with the instructions of the drawer bank or of the purchaser of the draft The drawee bank has the burden of proving that it didnt violate TRADE ACCEPTANCE A bill of exchange payable to order and at a certain maturity, drawn by a seller against the purchaser of goods as drawee, for a fixed sum of money, showing on its face the acceptance of the purchaser of goods and that it has arisen out of a purchase of goods by the acceptor A draft drawn by the seller on the purchaser of goods sold and accepted by such purchaser States upon its face that the obligation of the acceptor arises out of purchase of goods from the drawer Arises from credit obligations arising from the sale of goods and must have a definite maturity BANKERS ACCEPTANCE

Assignor in good faith doesnt warrant the solvency of the debtor unless it has been expressly stipulated or unless the insolvency was prior to the assignment and of common knowledge

Sec. 126. Bill of exchange, defined. A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 5 of 190Draft of which the acceptor is a bank or banker engaged generally in the business of granting bankers acceptance credit Similar to a trade acceptance Drawn against the bank instead of the buyer

TRUST RECEIPT The written or printed document signed by the entrustee in favor of the entruster containing terms and conditions substantially complying with the provisions of this decree The legal title to the matter entrusted remains in the entruster but the entruster gives to the trustee a form of title which is good and legal against everybody except the entruster Entrusteethe person having or taking possession of goods, documents or instruments under a trust receipt transaction, and any successor in interest of such person for the purpose or purposes specified in the trust receipt agreement Entrusterperson holding title over the goods, documents, or instruments subject of a TRA and any successor-in-interest of such person Sec. 184. Promissory note, defined. A negotiable promissory note within the meaning of this Act is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker's own order, it is not complete until indorsed by him. SPECIAL TYPES OF PROMISSORY NOTES 1. Certificate of deposit 2. Bonds 3. Bank notes 4. Due bills CERTIFICATE OF DEPOSIT Written acknowledgement by a bank of the receipt of money on deposit which the bank promises to pay to the depositor, bearer, or to some other person or order BONDS A promise, under seal to pay money More formal in character Runs for a longer period of time Issued under different legal circumstances

CLASSES OF BONDS 1. Mortgage bonds 2. Equipment bonds 3. Collateral trust bonds 4. Guaranteed bonds 5. Debentures 6. Income bonds 7. Convertible 8. Redeemable 9. Registered bonds 10. Coupon bonds Section 1. Form of negotiable instruments. An instrument to be negotiable must conform to the following requirements: (a) It must be in writing and signed by the maker or drawer; (b) Must contain an unconditional promise or order to pay a sum certain in money; (c) Must be payable on demand, or at a fixed or determinable future time; (d) Must be payable to order or to bearer; and (e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. REQUISITES AS TO A NEGOTIABLE NOTE 1. It must be in writing and signed by the maker 2. It must contain an unconditional promise to pay a sum certain in money 3. It must be payable on demand, or at a fixed or determinable future time 4. It must be payable to order or to bearer REQUISITES AS TO A NEGOTIABLE BILL 1. It must be in writing and signed by the maker 2. It must contain an unconditional order to pay a sum certain in money 3. It must be payable on demand, or at a fixed or determinable future time 4. It must be payable to order or to bearer 5. The drawee must be named or otherwise indicated therein with reasonable certainty


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 6 of 190THE INSTRUMENT MUST BE IN WRITING There must be a writing of some kind, for if the instrument were not in writing, there would be nothing to be negotiated or passed from hand to hand THE INSTRUMENT MUST BE SIGNED BY THE MAKER OR DRAWER Full name must be written At least the surname should appear and generally, the signature usually is by writing the signers name But, where the name is not signed, the holder must prove that what is written is intended as a signature of the person sought to be charged Commonly, it is found in the lower part of the instrument. It could also be signed anywhere as long as the maker or drawer acknowledges the signature to be his own. IF A BILL, IT MUST CONTAIN AN ORDER TO PAY It is an instrument demanding right Any words which are equivalent to order or which show the drawers will that the money should be paid, are sufficient to make the instrument a bill of exchange AN INSTRUMENT WITH AN EFFECT OF MERE AUTHORITY TO PAY It is not negotiable because it is not an order to pay I hereby authorize you to pay P1000 to Pedro Cruz EFFECT OF MERE REQUEST TO PAY The instrument is not negotiable as it is not an order to pay but a mere request to pay Please to let the bearer have P70 and place to my account and you will oblige EFFECT OF MERE WORDS OF CIVILITY The mere fact that it contains words of civility or courtesy doesnt make it non-negotiable WHERE INSTRUMENT IS A NOTE, IT MUST CONTAIN A PROMISE TO PAY 1. It is enough that words of equivalent meaning are used 2. The promise is implied from promissory words contained in the instrument THE PROMISE OR ORDER TO PAY MUST BE UNCONDITIONAL It must not be subject to a condition It must be unconditional and absolute SUM PAYABLE MUST BE DEFINITE AND CERTAIN The amount of money to be paid must be determinable by inspection and must be stated plainly on the face of the instrument, and like the denomination of money, must be started in the body of the instrument SUM MUST BE PAYABLE IN MONEY ONLY Money is the one standard of value in actual business or more stable standard of value Legal tenderthat kind of money which the law compels the creditor to accept in payment of his debt when tendered by the debtor in the right amount But if authorized by law or consent of creditor, cash may be substituted by other means, or may be check Instrument need not be payable in legal tender INSTRUMENT MUST SPECIFY DENOMINATION Instruments should express the specific denomination of money when it is payable in the money of a foreign country in order that the courts may be able to ascertain its equivalent value; otherwise, it is nonnegotiable PAYABLE ON DEMAND OR ON A FIXED OR DETERMINABLE FUTURE TIME On demand At a fixed or determinable future time WHERE NO YEAR IS SPECIFIED Neither payable on demand or on a fixed or determinable future time Time of payment is not determinable as the year is not stated THE INSTRUMENT MUST BE PAYABLE TO ORDER OR TO BEARER An instrument is not negotiable unless made payable to a person or his order or bearer or unless words of the similar or equivalent import are used such as assigns or assignees or holder WHERE PAYABLE TO THE ORDER OF BEARER Also negotiable This was held to be payable to order The payee of such an instrument is the bearer and it can only be negotiated by his indorsement WHERE PAYABLE TO A CERTAIN PERSON Where the instrument is payable to a specified person, its not payable to order Payable to a certain person or his agent


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 7 of 190Where payable to bearer B HELD: Considering the nature of the money market transaction, Article 1249 of the CC is the applicable provision should be applied. A money market has been defined to be a market dealing in standardized short-term credit instruments where lenders and borrowers dont deal directly with each other but through a middleman or dealer in the open market. In a money market transaction, the investor is the lender who loans his money to a borrower through a middleman or dealer. In the case at bar, the transaction is in the nature of a loan. Petitioner accepted the check but when he tried to encash it, it was dishonored. The holder has an immediate recourse against the drawer, and consequently could immediately file an action for the recovery of the value of the check. Further, in a loan transaction, the obligation to pay a sum certain in money may be paid in money, which is the legal tender or, by the use of a check. A check is not legal tender, and therefore cannot constitute valid tender of payment. 2 ROMAN CATHOLIC OF MALOLOS V. IAC 191 SCRA 411

THE DRAWEE MUST BE NAMED Requirement that refers only to bills of exchange Drawees name may be omitted and be filled in under implied authority like any other blank An acceptance may supply the omission of the designation IMPORTANCE OF FORMALITIES Essential for the security of the mercantile transactions Distinguish the negotiable instrument from the ordinary transferrable written contract

non-

NECESSITY OF COMPLIANCE WITH PROVISIONS Where the instrument doesnt conform with the requirements laid down in Section 1, then it is not governed by NIL DETERMINATION OF NEGOTIABILITY By the provisions of the NIL, particularly Section 1 thereof By considering the whole of the instrument By what appears on the face of the instrument and not elsewhere SECTION 1: CASE DIGESTS 1 CEBU INTERNATIONAL V. CA 316 SCRA 488

FACTS: Petitioner is a quasi-banking institution involved in money market transactions. Alegre invested with petitioner P500,000. Petitioner issued then a promissory note, which would mature approximately after a month. The note covered for Alegres placement plus interest. On the maturity of the note, petitioner issued a check payable to Alegre, covering the whole amount due. It was drawn from petitioners current account in BPI. When the wife of Alegre tried to deposit the check, the bank dishonored the check. Petitioner was notified of this matter and Alegre demanded the immediate payment in cash. In turn, petitioner promised to replace the check on the impossible premise that the first issued be returned to them. This prompted Alegre to file a complaint against petitioner and petitioner in turn, filed a case against BPI for allegedly unlawfully deducting from its account counterfeit checks. The trial court decided in favor of Alegre. ISSUE: W/N NIL is applicable to the money market transaction held between petitioner and Alegre?

FACTS: Petitioner was the owner of a parcel of land. It then entered into a contract of lease agreement with Robes-Fransisco Realty for the parcel of land. The agreement was that there would be downpayment plus installments with interest. Robes-Fransisco was then in default. Knowing that it was in its payment of the installments, it requested for the restructuring of the installment payments but was denied. It then asked for grace period to pay the same and tendered a check thereafter. Such was refused and the contract was cancelled. HELD: A check whether a managers check or ordinary check is not legal tender and an offer of a check in payment of a debt is not valid tender of payment and may be refused receipt by the obligee or creditor. As this is the case, the subsequent consignation of the check didn't operate to discharge Robes-Fransisco from its obligation to petitioner. 3 FACTS: BPI EXPRESS CARD CORPORATION V. CA 292 SCRA 260


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 8 of 190Marasigan was the holder of a BPI credit card. Due to his delinquency in payment, immediate demand was given by BPI to pay account. Marasigan issued a postdated check. The check was thereafter kept in custiody by BPI and card was temporarily suspended. And on a relevant date, Marasigan after eating in Caf Adriatico tried to use his card to pay but it was dishonored. HELD: The issuance of the postdated check was not effective payment on the part of Marasigan and thus, the bank was justified in suspending temporarily his use of the credit card. A check is only a substitute for money and not money, and the delivery of such instrument doesn't itself operate as payment. 4 DEVELOPMENT BANK OF RIZAL V. SIMA WEI 219 SCRA 736 Petitioner was authorized to sell tickets of Northwest Airlines-Japan, but failed to remit the proceeds. This prompted NWA to file suit against petitioner in Tokyo and judgment was rendered in its favor. Thereafter, the RTC issued a writ of execution for foreign courts decision. The petitioner filed for certiorari, asserting it has already made partial payments. The CA lowered the amount to be paid and included in its decision that the amount may be paid in local currency at rate prevailing at time of payment. HELD: Under RA 529, stipulations on the satisfaction of obligations in foreign currency are void. Payments of monetary obligations, subject to certain exceptions, shall be discharged in the currency which is the legal tender of the Philippines. But since the law doesn't provide for the rate of exchange for the payment of foreign currency obligations incurred after its enactment, jurisprudence held that the exchange rate should be the prevailing rate at time of payment. This law has been amended, allowing payments for obligations to be made in currency other than Philippine currency but then again, it failed to state what the exchange rate that should be used. This being the case the jurisprudence regarding the use of the exchange rate at time of payment shall be used. 6 TIBAJIA V. CA 223 SCRA 163

FACTS: Sima Wei executed a promissory note in consideration of a loan secured from petitioner bank. She was able to pay partially for the loan but failed to pay for the balance. She then issued two checks to pay the unpaid balance but for some unexplainable reason, the checks were not received by the bank but ended up in the hands of someone else. The bank instituted actions against Sima Wei and other people. The trial court dismissed the case and the CA affirmed this decision. HELD: A negotiable instrument, of which a check is, is not only a written evidence of a contract right but is also a species of property. Just as a deed to a piece of land must be delivered in order to convey title to the grantee, so must a negotiable instrument be delivered to the payee in order to evidence its existence as a binding contract. Section 16 provides that every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. Thus, the payee of the negotiable instrument acquires no interest with respect thereto until its delivery to him. Delivery of an instrument from the drawer to the payee, there can be no liability on the instrument. Moreover, such delivery must be intended to give effect to the instrument. 5 FACTS: CF SHARP & CO., INC. V. NORTHWEST AIRLINES, INC. 381 SCRA 314

FACTS: Tan filed a suit against spouses Tibaija. Decision was rendered in her favor. She then filed a motion of execution for the amount deposited and the cashier of RTC was garnished for the amount deposited therein by the spouses. This prompted the spouses to deliver cash and check but Tan refused to accept. HELD: A check is not valid legal tender and the creditor may validly refuse payment by check. 7 CALTEX V. CA 12 SCRA 448

FACTS: Security bank issued Certificates of Time Deposits to Angel dela Cruz. The same were given by Dela Cruz to petitioner in connection to his purchase of fuel products of the latter. On a later date, Dela Cruz approached the bank manager, communicated the loss of the certificates and requested for a


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 9 of 190reissuance. Upon compliance with some formal requirements, he was issued replacements. Thereafter, he secured a loan from the bank where he assigned the certificates as security. Here comes the petitioner, averred that the certificates were not actually lost but were given as security for payment for fuel purchases. The bank demanded some proof of the agreement but the petitioner failed to comply. The loan matured and the time deposits were terminated and then applied to the payment of the loan. Petitioner demands the payment of the certificates but to no avail. SECURITY BANK AND TRUST COMPANY 6778 Ayala Ave., Makati No. 90101 Metro Manila, Philippines SUCAT OFFICEP 4,000.00 CERTIFICATE OF DEPOSIT Rate 16% Date of Maturity FEB. 23, 1984 FEB 22, 1982, 19____ This is to Certify that B E A R E R has deposited in this Bank the sum of PESOS: FOUR THOUSAND ONLY, SECURITY BANK SUCAT OFFICE P4,000 & 00 CTS Pesos, Philippine Currency, repayable to said depositor 731 days. after date, upon presentation and surrender of this certificate, with interest at the rate of 16% per cent per annum. (Sgd. Illegible) (Sgd. Illegible) AUTHORIZED SIGNATURES HELD: CTDs are negotiable instruments. The documents provide that the amounts deposited shall be repayable to the depositor. And who, according to the document, is the depositor? It is the "bearer." The documents do not say that the depositor is Angel de la Cruz and that the amounts deposited are repayable specifically to him. Rather, the amounts are to be repayable to the bearer of the documents or, for that matter, whosoever may be the bearer at the time of presentment. If it was really the intention of respondent bank to pay the amount to Angel de la Cruz only, it could have with facility so expressed that fact in clear and categorical terms in the documents, instead of having the word "BEARER" stamped on the space provided for the name of the depositor in each CTD. On the wordings of the documents, therefore, the amounts deposited are repayable to whoever may be the bearer thereof. Thus, petitioner's aforesaid witness merely declared that Angel de la Cruz is the depositor "insofar as the bank is concerned," but obviously other parties not privy to the transaction between them would not be in a position to know that the depositor is not the bearer stated in the CTDs. Hence, the situation would require any party dealing with the CTDs to go behind the plain import of what is written thereon to unravel the agreement of the parties thereto through facts aliunde. This need for resort to extrinsic evidence is what is sought to be avoided by the Negotiable Instruments Law and calls for the application of the elementary rule that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. The next query is whether petitioner can rightfully recover on the CTDs. This time, the answer is in the negative. The records reveal that Angel de la Cruz, whom petitioner chose not to implead in this suit for reasons of its own, delivered the CTDs amounting to P1,120,000.00 to petitioner without informing respondent bank thereof at any time. Unfortunately for petitioner, although the CTDs are bearer instruments, a valid negotiation thereof for the true purpose and agreement between it and De la Cruz, as ultimately ascertained, requires both delivery and indorsement. For, although petitioner seeks to deflect this fact, the CTDs were in reality delivered to it as a security for De la Cruz' purchases of its fuel products. Any doubt as to whether the CTDs were delivered as payment for the fuel products or as a security has been dissipated and resolved in favor of the latter by petitioner's own authorized and responsible representative himself. In a letter dated November 26, 1982 addressed to respondent Security Bank, J.Q. Aranas, Jr., Caltex Credit Manager, wrote: ". . . These certificates of deposit were negotiated to us by Mr. Angel dela Cruz to guarantee his purchases of fuel products." This admission is conclusive upon petitioner, its protestations notwithstanding. Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon 8 FACTS: TRADERS ROYAL BANK V. CA 269 SCRA 15


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 10 of 190Filriters through a Detached Agreement transferred ownership to Philfinance a Central Bank Certificate of Indebtedness. It was only through one of its officers by which the CBCI was conveyed without authorization from the company. Petitioner and Philfinance later entered into a Repurchase agreement, on which petitioner bought the CBCI from Philfinance. The latter agreed to repurchase the CBCI but failed to do so. When the petitioner tried to have it registered in its name in the CB, the latter didn't want to recognize the transfer. HELD: The CBCI is not a negotiable instrument. The instrument provides for a promise to pay the registered owner Filriters. Very clearly, the instrument was only payable to Filriters. It lacked the words of negotiability which should have served as an expression of the consent that the instrument may be transferred by negotiation. The language of negotiability which characterize a negotiable paper as a credit instrument is its freedom to circulate as a substitute for money. Hence, freedom of negotiability is the touchstone relating to the protection of holders in due course, and the freedom of negotiability is the foundation for the protection, which the law throws around a holder in due course. This freedom in negotiability is totally absent in a certificate of indebtedness as it merely acknowledges to pay a sum of money to a specified person or entity for a period of time. The transfer of the instrument from Philfinance to TRB was merely an assignment, and is not governed by the negotiable instruments law. The pertinent question then iswas the transfer of the CBCI from Filriters to Philfinance and subsequently from Philfinance to TRB, in accord with existing law, so as to entitle TRB to have the CBCI registered in its name with the Central Bank? Clearly shown in the record is the fact that Philfinances title over CBCI is defective since it acquired the instrument from Filriters fictitiously. Although the deed of assignment stated that the transfer was for value received, there was really no consideration involved. What happened was Philfinance merely borrowed CBCI from Filriters, a sister corporation. Thus, for lack of any consideration, the assignment made is a complete nullity. Furthermore, the transfer wasn't in conformity with the regulations set by the CB. Giving more credence to rule that there was no valid transfer or assignment to petitioner. 9 FACTS: INCIONG V. CA 257 SCRA 578 A promissory note was issued by petitioner together with 2 others jointly and severally, to make them liable to PBC. Thereafter was a default on the payment of the note. PBC proceeded against Inciong and in the action filed by the bank, the court decided in its favor. HELD: Where the promissory note expressly states that the three signatures therein are jointly and severally liable, any one or some or all of them may be proceeded against for the entire obligationthe choice is left to the solidary creditor to determine against whom he will enforce collection. 10 FIRESTONE TIRE V. CA 353 SCRA 601

FACTS: Fojas Arca and Firestone Tire entered into a franchising agreement wherein the former had the privilege to purchase on credit the latters products. In paying for these products, the former could pay through special withdrawal slips. In turn, Firestone would deposit these slips with Citibank. Citibank would then honor and pay the slips. Citibank automatically credits the account of Firestone then merely waited for the same to be honored and paid by Luzon Development Bank. As this was the circumstances, Firestone believed in the sufficient funding of the slips until there was a time that Citibank informed it that one of the slips was dishonored. It wrote then a demand letter to Fojas Arca for the payment and damages but the latter refused to pay, prompting Firestone to file an action against it. HELD: The withdrawal slips, at the outset, are non-negotiable. Hence, the rule on immediate notice of dishonor is non-applicable to the case at hand. Thus, the bank was under no obligation to give immediate notice that it wouldn't make payment on the subject withdrawal slips. Citibank should have known that withdrawal slips are not negotiable instruments. It couldn't expect then the slips be treated like checks by other entities. Payment or notice of dishonor from respondent bank couldn't be expected immediately in contrast to the situation involving checks. In the case at bar, Citibank relied on the fact that LDB honored and paid the withdrawal slips which made it automatically credit the account of Firestone with the amount of the subject withdrawal slips then merely waited for LDB to honor and pay the same. It bears stressing though that Citibank couldn't have missed the non-negotiable character of the slips. The essence of negotiability which characterizes a negotiable paper as a


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 11 of 190credit instrument lies in its freedom to be a substitute for money. withdrawal slips in question lacked this character. The this however, the jewelry was redeemed by a Tomasa de Leon who presented the pawnshop ticket. HELD: Having been informed by the petitioner and the police that jewelry pawned to it was either stolen or involved in an embezzlement of the proceeds of the pledge, pawnbroker became duty bound to hold the things pledged and to give notice to the petitioner and authorities of any effort to redeem them. Such a duty was imposed by Article 21 of the CC. The circumstance that the pawn ticket stated that the pawn was redeemable by the bearer, didnt dissolve this duty. The pawn ticket wasnt a negotiable instrument under the NIL, nor was it a negotiable document of title under Article 1507 of the CC. Sec. 2. What constitutes certainty as to sum. The sum payable is a sum certain within the meaning of this Act, although it is to be paid: (a) with interest; or (b) by stated installments; or (c) by stated installments, with a provision that, upon default in payment of any installment or of interest, the whole shall become due; or (d) with exchange, whether at a fixed rate or at the current rate; or (e) with costs of collection or an attorney's fee, in case payment shall not be made at maturity. WITH INTEREST The fact that the sum payable is to be paid with interest doesnt render the sum uncertain Amount can easily be computed When interest is stipulated but not specified, the legal interest shall be used Where there is no stipulation, the legal rate shall be paid when the debtor incurs delay Interest due shall earn legal interest from the time it is judicially demaned, although the instrument may be silent upon this point ESCALATION AND DEESCALATION CLAUSEFORMER VALID IF ACCOMPANIED BY THE LATTER May stipulate that the rate of interest agreed upon may be increased in the event that the applicable maximum rate of interest is increased by law or by the MB

The withdrawal slips deposited were not checks as Firestone admits and Citibank generally was not bound to accept the withdrawal slips as a valid mode of deposit. Nonetheless, Citibank erroneously accepted the same as such and thus, must bear the risks attendant to the acceptance of the instruments. Firestone and Citibank could not now shift the risk to LDB for their committed mistake. 11 SESBRENO V. CA 222 SCRA 466

FACTS: Petitioner made a placement with Philfinance. The latter delivered to him documents, some of which was a promissory note from Delta Motors and a post-dated check. The post-dated checks were dishonored. This prompted petitioner to ask for the promissory note from DMC and it was discovered that the note issued by DMC was marked as non-negotiable. As Sesbreno failed to recover his money, he filed case against DMC and Philfinance. HELD: The non-negotiability of the instrument doesnt mean that it is nonassignable or transferable. It may still be assigned or transferred in whole or in part, even without the consent of the promissory note, since consent is not necessary for the validity of the assignment. In assignment, the assignee is merely placed in the position of the assignors and acquires the instrument subject to all the defenses that might have been set up against the original payee. 12 SERRANO V. CA 196 SCRA 107

FACTS: Serrano bought some jewelry from Ribaya. Due to need of finances, she decided to have the jewelry pawned. She instructed her secretary to do so for her, which the secretary did but absconded after receiving the proceeds. It is to be noted that the pawnshop ticket indicated that the jewelry was redeemable by presentation by the bearer. Afterwards, there was a lead on where the jewelry was pawned. An investigation was done to verify the suspicion. The jewelry was to be sold in a public auction then. The petitioner and police authorities informed the pawnshop owner not to sell the jewelry as she was the rightful owner thereof. Despite of


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 12 of 190Deescalation clausestipulation in the agreement that the rate of interest agreed upon shall be reduced if the maximum rate of interest is decreased by law or by the MB SECTION 2: CASE DIGESTS 13 MEDEL V. CA 299 SCRA 481

BY STATED INSTALLMENTS 1. Must be stated 2. The maturity of each installment must be fixed or determinable required in order to comply with the requisite that the instrument, if not payable on demand, must be payable on a fixed or determinable future time BY STATED INSTALLMENTS, WITH ACCELERATION CLAUSE Acceleration clauseupon default in the payment of any installment, the whole sum payable shall become due It hastens the payment of the whole note WITH EXCHANGE While the rate of exchange is not always the same and while it is technically true that the resort must be had to extrinsic evidence to ascertain what it is, yet the current rate of exchange between two places at a particular date is a matter of common commercial knowledge, or at least easily ascertained by anyone so that the parties can always, without difficulty, ascertain the exact amount necessary to discharge the paper Applies only to instruments drawn in one country and payable in another EXCHANGE Difference in value of the same amount of money in different countries Current rate or fixed rate WITH COSTS AND ATTORNEYS FEES An instrument may thus stipulate that costs of collection and attorneys fees shall be paid by the debtor in addition to the principal in case the instrument shall not be paid in maturity Although the stipulation will make the sum after maturity uncertain, it will not affect the certainty of the sum payable at maturity and therefore, will not affect the negotiability of the instrument in which it is stipulated NOTES FOR WEEK 2 JUNE 18 - 23, 2007

FACTS: Four loans were involved in this case. The first loan was secured by the spouses Medel from Gonzales in the amount of P50,000 wherein P3,000 was withheld by the latter as advance interest. This was secured by a P/N. The second loan obtained was for P90,000. P84,000. The spouses only received

The third loan was for P300,000 and this was secured by a real estate mortgage. The spouses failed to pay for the aforementioned three loans. This was consolidated into one loan in the amount of P500,000. An additional P60,000 was loaned to make the payable P500,000. This was covered with a promissory note containing an accelaration clause. Again the spouses failed to pay. The appellate court modified the interest to be paid by saying that that the interest should be 5.5% per month. HELD: The interest was exorbitant, iniquitous, and unconscionable and hence, it contrary to morals, if not the law. The interest should be lowered down. 14 RADIOWEALTH FINANCE V. INTERNATIONAL CORPORATE BANK 182 SCRA 862

FACTS: The petitioner entered into a Credit Facilities agreement with Interbank. This is secured by a promissory note, trust receipts, security arrangements, which included provisions on payment of attorneys fees and costs of collection in case of default. The petitioner failed to pay. A compromise agreement was entered into by the parties but this agreement


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 13 of 190failed to include the attorneys fees and costs of collection. The trial court reduced the percentage of attorneys fees in its decision. HELD: The courts may modify the attorneys fees previously agreed upon where the amount appears to be unconscionable and unreasonable. For the law recognizes the validity of stipulations included in documents such as negotiable instruments and mortgages with respect. The fees in this case are reasonable and fair. 15 BACHRACH V. GOLINGCO 39 PHIL 139

But an order or promise to pay out of a particular fund is not unconditional. APPLICATION OF SECTION Whether or not the indication of a particular fund or particular account, or the statement of the transaction which gives rise to the instrument, would make the promise or order conditional INDICATION OF A PARTICULAR FUND First case, the particular fund is not the direct source of the payment, only the source of reimbursement Unconditionaldrawee pays the payee from his own funds and afterwards, the drawee pays himself from the particular fund indicated But an order or promise to pay out of a particular fund is not unconditionalparticular fund is the direct source of payment Conditionalwhere the payment to the payee is directly from the funds indicated, the payment is the subject to the condition that the funds indicated are sufficient

FACTS: Bachrach sold a truck to Golingco, which was secured by a promissory note and a chattel mortgage on the truck. The promissory note provided that there would be payment of 25% attorneys fees. HELD: It may lawfully be stipulated in favor of the creditor that in the event that it becomes necessary, by reason of the delinquency of the debtor, to employ counsel to enforce payment of the obligation, a reasonable attorneys fee shall be paid by the debtor, in addition to amount due of principal and interest. The legality of this stipulation, when annexed to the negotiable instrument, is recognized by the NIL. The courts have the power to limit the amount recoverable under a special provision in a promissory note, whereby the debtor obligates himself to pay a specified amount, or a certain per centum of the principal debt, in satisfaction of attorneys fees for which the creditor would become liable in suing upon the note. *Normally, if there is absence of any agreement as to attorneys fees, then the court would only grant nominal amounts. Sec. 3. When promise is unconditional. An unqualified order or promise to pay is unconditional within the meaning of this Act though coupled with: (a) An indication of a particular fund out of which reimbursement is to be made or a particular account to be debited with the amount; or (b) A statement of the transaction which gives rise to the instrument.

PARTICULAR ACCOUNT TO BE DEBITED The instrument is to be paid first and afterwards, the particular account indicated will be debited The payment is not subject to the sufficiency or adequacy of the particular account to be debited STATEMENT OF TRANSACTION Instruments are not issued without any transaction upon which they are based Generally negotiable but a statement of transaction will render the instrument non-negotiable where the promise or order to pay is made subject to the conditions and terms of the transactions stated, then the instrument is rendered non-negotiable AS PER CONTRACT NOTES The appearance of words as per contract on the face of the instruments in any position doesnt affect the negotiability of the instrument CHATTEL NOTES A promissory note given for a chattel and stipulating that the title to the chattel shall remain in the vendor-payee until the note is paid, is not conditional


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 14 of 190Gomez opened an account with Golden Savings bank and deposited 38 treasury warrants. All these warrants were indorsed by the cashier of Golden Savings, and deposited it to the savings account in a Metrobank branch. They were sent later on for clearing by the branch office to the principal office of Metrobank, which forwarded them to the Bureau of Treasury for special clearing. On persistent inquiries on whether the warrants have been cleared, the branch manager allowed withdrawal of the warrants, only to find out later on that the treasury warrants have been dishonored. HELD: The treasury warrants were not negotiable instruments. Clearly, it is indicated that it was non-negotiable and of equal significance is the indication that they are payable from a particular fund, Fund 501. This indication as the source of payment to be made on the treasury warrant makes the promise to pay conditional and the warrants themselves nonnegotiable. Metrobank then cannot contend that by indorsing the warrants in general, GS assumed that they were genuine and in all respects what they purport it to be, in accordance to Section 66 of the NIL. The simple reason is that the law isnt applicable to the non-negotiable treasury warrants. The indorsement was made for the purpose of merely depositing them with Metrobank for clearing. It was in fact Metrobank which stamped on the back of the warrants: All prior indorsements and/or lack of endorsements guaranteed Sec. 4. Determinable future time; what constitutes. - An instrument is payable at a determinable future time, within the meaning of this Act, which is expressed to be payable: (a) At a fixed period after date or sight; or (b) On or before a fixed or determinable future time specified therein; or (c) On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect. AFTER SIGHT

REFERENCE TO MORTGAGES Provisions in the mortgage doesnt affect the negotiability of the instrument it secures Where a note otherwise negotiable contains the words this note is secured by a mortgage and the mortgage contains clauses promising to do many acts other than the payment of money, it was held that the note is not rendered non-negotiable WHEN REFERENCE TO A MORTGAGE RENDERS INSTRUMENT NONNEGOTIABLE When there is uncertainty in amount or when such provisions become part of the note, even though they arent in the note itself, the instrument is also rendered non-negotiable SECTION 3: CASE DIGESTS 16 ABUBAKAR V. AUDITOR GENERAL 81 PHIL. 359

FACTS: The auditor general refuses to authorize the payment of the treasury warrant issued in the name of Placido Urbanes, now in the hands of Benjamin Abubakar. The auditor general refuses to do so because, first, the money available for redemption of treasury warrants was appropriated by law and the subject warrant doesnt fall within the purview of the law; second, one of the requirements was not complied with, which is it must be sworn that the holders of the warrant covering payment or replenishment of cash advances for official expenditures received them in payment of definite government obligations. HELD: Petitioner holds that he is a holder in good faith and for value of a negotiable instrument and is entitled to the rights and privileges of a holder in due course, free from defenses. But this treasury warrant is within the scope of the NIL. For one thing, the document bearing on its face the words payable from the appropriation for food administration, is actually an order for payment out of a particular fund, and is not unconditional, and doesnt fulfill one of the essential requirements of a negotiable instrument. 17 FACTS: METROPOLITAN BANK V. CA 194 SCRA 169


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 15 of 190After the drawee has seen the instrument upon presentment for acceptance b. It is rendered non-negotiable when the whole condition is lodged to the holdermiddle ground is so long as the basis is dependent on factors not within the control of the holder, then it would still be negotiable

I promise to pay B or his order P100 ten days after sight. Signed AACCELARATION NOTES There are certain notes which contain acceleration provisions Make it possible for the maker to pay the instrument at an earlier date or make it possible for the holder to require payment of the instrument at an earlier date

WORD USED IS AFTER The word used in the law is after and not before Sec. 5. Additional provisions not affecting negotiability. - An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which: (a) authorizes the sale of collateral securities in case the instrument be not paid at maturity; or (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 (d) gives the holder an election to require something to be done in lieu of payment of money. But nothing in this section stipulation otherwise illegal. shall validate any provision or

I promise to pay B or order P100 on or before July 1, 2007. Signed A*Type of acceleration note wherein the option to accelerate belongs to the maker, in the above case is A. EXAMPLES OR ILLUSTRATIONS OF ACCELARATION NOTES 1. That contain acceleration clauses on the makers default in payment of installments or of interest, or on the happening of an extrinsic event 2. Or contain, in notes secured by collateral, a provision that the maker shall supply additional collateral in case of depreciation in the value of the original deposit, with the holders right to declare the note due immediately on failure to make good the depreciation a. Non-negotiabletime for payment becomes uncertain and indefinite b. It doesnt render it non-negotiablethat from the standpoint of expediency as encouraging circulation and of business custom on account of their common acceptance by the commercial world, such clauses should be interpreted as not affecting negotiability 3. Or contain provisions for acceleration when holder deems himself insecure a. It is rendered non-negotiable where it is payable at a fixed and future time, but with an option on the part of the holder to declare it due and demandable before maturity whenever he deems it insecure but to hold them non-negotiable is a spurious construction of the Act

GENERAL RULE AS TO THE ADDITIONAL ACT The general rule is that an instrument must not contain an order or promise to do any act in addition to the payment of money. Otherwise, the instrument wouldnt be negotiable. FOUR EXCEPTIONS TO THE GENERAL RULE 1. SALE OF COLLATERAL SECURITIES if the instrument be not paid at maturity 2. Authorizes CONFESSION OF JUDGMENT if the instrument be not paid at maturity 3. WAIVER OF BENEFIT OF LAW for the protection and benefit of the obligor 4. Gives the HOLDER an election to require something to be done in lieu of payment of money


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 16 of 190PROMISE TO FURNISH ADDITIONAL SECURITY A promise of the maker to render additional collateral will render the note non-negotiable, as that would be an additional act to the promise to pay money However, they are to be distinguished from those instruments in which the holder may demand collateral, and failure to furnish it accelerates the instrument which are clearly negotiable, but merely accelerable on the non-performance of an optional act SALE OF COLLATERAL SECURITIES The law gives exceptions to the general rule that an instrument which contains an order or promise to do any act in addition to the payment of money is non-negotiable Sometimes, the obligation arising from the transaction which gives rise to the instrument is secured by a mortgage or pledge The additional act to be performed is to be executed after the date of maturity, when the instrument c eases to be negotiable in the full commercial sense Before date of maturity, however, the sale of collateral securities would render the instrument non-negotiable CONFESSION OF JUDGMENT Must be after the date of maturity Second exception to the rule TWO CLASSES OF CONFESSION OF JUDGMENT 1. Cognovit actionema written confession of an action by the defendant, subscribed but not sealed, and irrevocably authorizing any attorney of any court of record to confess judgment and issue execution usually for the sum named. It is given in order to save expense and differs from a warrant of attorney, which is given to an expressly designated attorney before the commencement of any action and is under seal. 2. Confession relicta verificationeconfession of judgment made after plea is pleaded WARRANT OF ATTORNEY Instrument in writing addressed to one or more attorneys named therein, authorizing them, generally to appear in court, or in some specified court on behalf of the person giving it, and to confess judgment in favor of some particular person named therein in an action for debt EFFECT OF CONFESSION OF JUDGMENT IN THE PHILIPPINES In the Philippines, a confession of judgment is considered void as it is against public policy-1. Because they enlarge the field for fraud 2. Because under this treatment, the promissory bargains away his right to a day in court 3. Because the effect of the instrument is to strike down the right to appeal accorded by statute WAIVER OF BENEFIT Waives the benefit of any law intended for the advantage and protection of the obligor Examples: presentment for payment, notice of dishonor, protest ELECTION OF HOLDER TO REQUIRE SOME OTHER ACT Fourth exception to the rule Even if there is an additional act, the instrument still remains to be negotiable provided that the right to choose between payment of money or the performance of the additional act is in the hands of the holder CASE DIGESTS: SECTION 5 18 NATIONAL BANK V. MANILA OIL REFINING 43 PHIL 444

FACTS: Manila Oil has issued a promissory note in favor of National Bank which included a provision on a confession of judgment in case of failure to pay obligation. Indeed, Manila Oil has failed to pay on demand. This prompted the bank to file a case in court, wherein an attorney associated with them entered his appearance for the defendant. To this the defendant objected. HELD: Warrants of attorney to confess judgment arent authorized nor contemplated by our law. Provisions in notes authorizing attorneys to appear and confess judgments against makers should not be recognized in our jurisdiction by implication and should only be considered as valid when given express legislative sanction. ATTY. MERCADOS QUESTIONS: 1. What are the arguments for the validity of a confession of judgment? 2. One of the arguments is that the NIL acknowledges the validity of a stipulation for a confession of judgment. Is this sufficient? The answer is no.


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 17 of 190(c) does not specify the place where it is drawn or the place where it is payable; or (d) bears a seal; or (e) designates a particular kind of current money in which payment is to be made. 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. EFFECT OF OMISSION OF DATE Even where the instrument is not dated, still the instrument is not rendered non-negotiable There are however instances, wherein the date is needed for the instrument to become negotiable When are these instances? o When it is payable in a period after date or after sight o When it is allowed to write the date (Section 13) ATTY. MERCADO: WHEN IS DATING REQUIRED TO COMPLETE THE INSTRUMENT? EFFECT OF OMISSION OF VALUE Usually, what is stated in the instrument is that it is being used for value received without specifying what that value is Nevertheless, the absence of value given, doesnt render the instrument non-negotiable PARTICULAR KIND OF MONEY Even if the money in which the instrument is to be payable is not legal tender, provided that it is current money or foreign money which has a fixed value in relation to the money in the country in which the instrument is payable, still the negotiability of the instrument is not affected, as the instrument still is considered payable in money Sec. 7. When payable on demand. - An instrument is payable on demand: (a) When it is so expressed to be payable on demand, or at sight, or on presentation; or (b) In which no time for payment is expressed.

19

TRADERS INSURANCE V. DY ENG BIOK 104 PHIL 806

FACTS: Dy Eng Giok was a provincial sales agent of distillery corporation, with the responsibility of remitting sales proceeds to the principal corporation. He has a running balance and to satisfy payment, a surety bond was issued with petitioner as guarantor, whereby they bound themselves liable to the distillery corporation. More purchases was made by Dy Eng Giok and he was able to pay for these additional purchases. Nonetheless, the payment was first applied to his prior payables. A remaining balance still is unpaid. Thus, an action was filed against sales agent and surety company. Judgment was rendered in favor of the corporation. HELD: The remittances of Dy Eng Giok should first be applied to the obligation first contracted by him and covered by the surety agreement. First, in the absence of express stipulation, a guaranty or suretyship operates prospectively and not retroactively. It only secures the debts contracted after the guaranty takes effect. To apply the payment to the obligations contracted before the guaranty would make the surety answer for debts outside the guaranty. The surety agreement didn't guarantee the payment of any outstanding balance due from the principal debtor but only he would turn out the sales proceeds to the Distileria and this he has done, since his remittances exceeded the value of the sales during the period of the guaranty. Second, since the Dy Eng Bioks obligations prior to the guaranty were not covered, and absent any express stipulation, any prior payment made should be applied to the debts that were guaranteed since they are to be regarded as the more onerous debts. Sec. 6. Omissions; seal; particular money. - The validity and negotiable character of an instrument are not affected by the fact that: (a) it is not dated; or (b) does not specify the value given, or that any value had been given therefor; or


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 18 of 190Pay the payee or the person designated by the payee

Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand. EXPRESSED TO BE PAYABLE ON DEMAND An instrument is payable on demand where it is expressed to be payable on demand, on sight, or on presentation It is payable on demand also when no date of payment is specified It is payable on demand when the time of payment is left blank or unfilled INSTRUMENT ON DEMAND ONLY AS BETWEEN THE PARTIES That after the date of maturity, the instrument can no longer be negotiated as to make the parties who acquire the instrument after the date of maturity holders in due course because they become holders thereof with notice that it is already overdue, as this can be determined from the face of the instrument itself Sec. 8. When payable to order. - The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the order of: (a) A payee who is not maker, drawer, or drawee; or (b) The drawer or maker; or (c) The drawee; or (d) Two or more payees jointly; or (e) One or some of several payees; or (f) The holder of an office for the time being. Where the instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable certainty. WORDS OF NEGOTIABILITY Among others, for an instrument to be negotiable, it should contain words of negotiability There are only 2 ways by which an instrument and the bill or note is to be paid to the person designated in the instrument or to any person to whom he has indorsed or delivered the same Without the words or order or to order of, the instrument is payable only to the person designated therein and therefore, is nonnegotiable MEANING OF THE PHRASE TO ORDER

NECESSITY OF NAMING THE PAYEE The law requires that the payee must be named or otherwise indicated with reasonable certainty Must be a person in being, whether natural or legal, and ascertained at the time of issue If there is no named payee, where the instrument is payable to order, no one could indorse the instrument. Consequently, it is useless to consider it as negotiable. WHERE THE BLANK FOR NAME OF PAYEE UNFILLED Not payable to order because the payee is not named neither is he designated with reasonable certainty Pay to Y or order the amount of P100. To: X Pay to the order of the President of Ateneo de Manila University on June 20, 2010. Sgd. A To: X Corporation Sgd. A

CASE DIGESTS: SECTION 8 20 SALAS V. CA 181 SCRA 296

FACTS: Petitioner bought a car from Viologo Motor Sales Company, which was secured by a promissory note, which was later on indorsed to Filinvest Finance, which financed the transaction. Petitioner later on defaulted in her installment payments, allegedly due to the fraud imputed by VMS in selling her a different vehicle from what was agreed upon. This default in payment prompted Filinvest Finance to initiate a case against petitioner. The trial court decided in favor of Filinvest, to which the appellate court upheld by increasing the amount to be paid.


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 19 of 190It is the contention of petitioner that since the agreement between her and the motor company was inexistent, none had been assigned in favor of private respondent. HELD: Petitioners liability on the promissory note, the due execution and genuineness of which she never denied under oath, is under the foregoing factual milieu, as inevitable as it is clearly established. The records reveal that involved herein is not a simple case of assignment of credit as petitioner would have it appear, where the assignee merely steps into the shoes of, is open to all defenses available against and can enforce payment only to the same extent as, the assignor-vendor. The instrument to be negotiable must contain the so-called words of negotiability. There are only 2 ways for an instrument to be payable to order. There must always be a specified person named in the instrument and the bill or note is to be paid to the person designated in the instrument or to any person to whom he has indorsed and delivered the same. Without the words or order or to the order of, the instrument is payable only to the person designated therein and is thus non-negotiable. Any subsequent purchaser thereof will not enjoy the advantages of being a holder in due course but will merely step into the shoes of the person designated in the instrument and will thus be open to the defenses available against the latter. In the case at bar, the promissory notes is earmarked with negotiability and Filinvest is a holder in due course. 21 CONSOLIDATED PLYWOOD V. IFC 149 SCRA 448 Thereafter, a collection suit was filed against petitioner for the payment of the promissory note. HELD: It is patent that the seller is liable for the breach in warranty against the petitioner. This liability as a general rule extends to the corporation to whom it assigned its rights and interests unless the assignee is a holder in due course of the promissory note in question, assuming the note is negotiable, in which case, the latters rights are based on a negotiable instrument and assuming further that the petitioners defense may not prevail against it. The promissory note in question is not a negotiable instrument. The promissory note in question lacks the so-called words of negotiability. And as such, it follows that the respondent can never be a holder in due course but remains merely an assignee of the note in question. Thus, the petitioner may raise against the respondents all defenses available to it against the seller. 22 GSIS V. CA 170 SCRA 533

FACTS: Two deeds of mortgages were issued by spouses Racho in favor of GSIS as security for two loans obtained by them. They also executed a promissory note. Due to the failure to comply with the terms of the mortgage, the mortgages were extrajudicially foreclosed. The foreclosure was being assailed by the spouses as they alleged that the mortgage contracts were signed not as guarantees or sureties but merely gave their common property for the sole benefit of the other spouses. Both sides of the case used the provisions on accommodation parties in the NIL. The trial court dismissed the action but this was reversed by the appellate court. HELD: Both parties rely on the NIL but this is misplaced. The promissory note and the deeds of mortgage are not negotiable instruments as they lack the fourth requisite which is it must be payable to order or bearer. 23 FACTS: PECO V. SORIANO 39 SCRA 587

FACTS: Petitioner bought from Atlantic Gulf and Pacific Company, through its sister company Industrial Products Marketing, two used tractors. Petitioner was issued a sales invoice for the two used tractors. At the same time, the deed of sale with chattel mortgage with promissory note was issued. Simultaneously, the seller assigned the deed of sale with chattel mortgage and promissory note to respondent. The used tractors were then delivered but barely 14 days after, the tractors broke down. The seller sent mechanics but the tractors were not repaired accordingly as they were no longer serviceable. Petitioner would delay the payments on the promissory notes until the seller completes its obligation under the warranty.


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 20 of 190Montinola purchased money orders from the postal office. He issued a personal check to pay for the money orders and since it is irregular to have checks as payments, he was advised to see the Chief of the Money Order Division. He didnt do so but left the office with the money orders and the check. A notice was thereafter issued to all post offices as well as the Bank of America, about the irregularly issued money orders and the order not to accept such orders. Plaintiff was one of those who received the subject money orders and encashed it with the Bank of America. At first, it was given the money but later on, his account was debited in pursuance of the letter given by the Chief. HELD: Postal money orders are not negotiable instruments. In establishing and operating a postal money order system, the government is not engaged in commercial transactions but merely exercises a governmental power for the public benefit. Moreover, some restrictions imposed money orders by postal laws and regulations are inconsistent with the character of negotiable instruments. 24 EQUITABLE BANKING V. IAC 161 SCRA 518 Equitable is not liable to Nell. Nell should bear the loss as it was through its own acts, which put it into the power of Casals and Casville Enterprises to perpetuate the fraud against it. The check wasnt initially non-negotiable. Neither was it cross-checked. The rubber-stamping transversally on the face of the check was only made the bank teller in accordance with customary bank practice, and not by Nell as the drawer of the check, and simply meant that thereafter the same check could no longer be negotiated. The payee was not indicated with reasonable certainty in contravention of Section 8. As worded, it could be accepted as deposit to the account of the party named therein after the symbols of A/C, or payable to the bank as trustee, or as an agent, for Casville with the latter being the ultimate beneficiary. Sec. 9. When payable to bearer. - The instrument is payable to bearer: (a) When it is expressed to be so payable; or (b) When it is payable to a person named therein or bearer; or (c) When it is payable to the order of a fictitious or non-existing person, and such fact was known to the person making it so payable; or (d) When the name of the payee does not purport to be the name of any person; or (e) When the only or last indorsement is an indorsement in blank. PAYABLE TO THE ORDER OF A FICTITIOUS OR NON-EXISTENT PERSON 1. The payee named must be fictitious or non-existent 2. The one making the instrument so payable must know him to be fictitious or non-existing FICTITIOUS PERSON Not limited to persons having no real existence To be a person who has no right to the instrument because the drawer or maker of it so intended, and therefore, it doesnt matter whether the name of the payee used by the drawer or drawee be that of the living or the dead, or one who never existed EXISTING PAYEE INTENDED TO RECEIVE PROCEEDS; NOT PAYABLE TO BEARER

FACTS: Nell Company issued a check to help Casals and Casville Enterprises obtain a letter of credit from Equitable Banking in connection with equipment, a garrett skidder, which Casals and Casville were buying from Nell. Nell indicated the payee as follows EQUITABLE BANKING CORPORATION A/C CASVILLE ENTERPRISES INC. Casals deposited the check with the bank and the bank teller accepted the same and in accordance with customary bank practice, stamped in the check the words non-negotiable. The amount was withdrawn after the deposit. This prompted Nell to file a case against the bank, Casals and Casville. While the instant case was being tried, Casals and Casville assigned the garrett skidder to plaintiff which credited in favor of defendants the amount of P450,000, as partial satisfaction of its claim against them. HELD:


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 21 of 190A negotiable paper made payable to the name of an existing person known or believed by the maker or drawer to be existing, with intent that he should receive it or its proceeds, or that it be paid to him or upon his indorsement, IS NOT PAYABLE TO A FICTITIOUS PAYEE OR TO BEARER, although as a matter of fact such person has no interest in the paper and it was procured by fraud of a third person or of the makers or drawers employee or agent whose knowledge or intent is not imputable to the principal or employer, and cashed by the person having possession upon the forged instrument of the payee It has been held to be payable to bearer Agbayani: estate is a juridical person in a limited way and thus it shouldnt be payable to bearer

CASE DIGESTS: SECTION 9 25 ANG TEK LIAN V. CA 87 PHIL 383

NON-EXISTING PAYEE, OR ONE WITHOUT INTEREST, BUT BELIEVED EXISTING OR WITH INTEREST, AND INTENDED TO RECEIVE PROCEEDS; NOT PAYABLE TO BEARER NON-EXISTING PAYEE, OR ONE WITHOUT INTEREST, KNOWN OR BELIEVED NON-EXISTING NOT INTENDED TO RECEIVE PROCEEDS; PAYABLE TO BEARER PERSON TO WHOM THE FICTITIOUS OR NON-EXISTING CHARACTER OF PAYEE MUST BE KNOWN The drawer drawing a bill or the maker making a note is the person to whom the fictitious or non-existing character of the payee must be known Where the instrument is drawn or made by an agent or prepared by an employee with the maker or drawer signing only, the question arises as to whose intent should control Another difficulty: who is the person who makes the instrument payable to the payeethe clerk or the treasurer? Agbayanis view: that the signer does after all create the instrument and should determine who owns it WHERE AGENT HAS NO AUTHORITY TO EXECUTE INSTRUMENT The knowledge of the principal or employer is controlling, and if he doesnt have any knowledge of the fictitious or non-existing character of the payee, the knowledge of the employee or the agent will not avail to call into application as to fictitious payees and the instrument will not be considered as payable to bearer NAME OF PAYEE NOT NAME OF PERSON Pay to cash Pay to the order of money Pay to the order of cash WHERE PAYABLE TO THE ESTATE OF A DEAD PERSON

FACTS: Knowing he had insufficient funds, Ang Tek Lian issued a check for P4000, payable to cash. This was given to Lee Hua Hong in exchange for cash. Upon presentment of the check, it was dishonored for having insufficient funds. It is argued that the check, being payable to cash, wasnt indorsed by the defendant, and thus, isnt guilty of the crime charged. HELD: A check drawn to the order of cash is payable to bearer, and the bank may pay it to the person presenting it for payment without the drawers indorsement. Of course, if the bank is not sure of the bearers identity or financial solvency, it has the right to demand for identification and/or assurance against possible complicationsfor instance, forgery of the drawers signature, loss of the check by the rightful owner, raising the amount payable, etc. The bank therefore, requires for its protection that the indorsement of the draweror some other persons known to itbe obtained. A check payable to bearer is authority for payment to the holder. Where a check is in the ordinary form and is payable to bearer so that no indorsement is required, a bank to which it is presented for payment need not have the holder identified, and is not negligent in failing to do so. Sec. 10. Terms, when sufficient. - The instrument need not follow the language of this Act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. CASE DIGESTS: SECTION 10 26 JIMENEZ V. BUCOY 103 PHIL 40

FACTS: In the intestate of the estate of spouses Young, Jimenez presents a promissory note signed by Pacita Young for different amounts totaling P21,000. The administrator is willing to pay the promissory note on the


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 22 of 190premise that the amount be adjusted. Claimant assails the adjustment and hence, she instituted a case for collection of sum of money. *Note: 6 months after the war HELD: The administrator calls attention to the fact that the notes contained no express promise to pay for a certain amount. This is without merit. An acknowledge may become a promise to pay by the addition of words by which a promise of payment is naturally implied, such as payable, payable on a given date, payable on demand, paidwhen called for. To constitute a good promissory note, no precise words of contract are necessary, provided they amount, in legal effect, a promise to pay. Sec. 11. Date, presumption as to. - Where the instrument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or indorsement, as the case may be. APPLICATION OF SECTION 11 1. The instrument contains the date of issueprima facie the true date of the making or drawing of the instrument 2. In an accepted bill of exchange, the acceptance is datedprima facie the date of acceptance 3. An instrument is indorsed, and the indorsement is datedprima facie date of indorsement PRIMA FACIE Evidence produces for the time being a certain result but that result may be repealed by contrary evidence Apparent, as it first appears Sec. 12. Ante-dated and post-dated. - The instrument is not invalid for the reason only that it is ante-dated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. Sec. 13. When date may be inserted. - Where an instrument expressed to be payable at a fixed period after date is issued undated, or where the acceptance of an instrument payable at a fixed period after sight is undated, any holder may insert therein the true date of issue or acceptance, and the instrument shall be payable accordingly. The insertion of a wrong date does not avoid the instrument in the hands of a subsequent holder in due course; but as to him, the date so inserted is to be regarded as the true date. WHEN DATE NECESSARY Under Section 6, the insertion of date is unnecessary However, it may be necessary to determine the date of maturity In the following cases, the date is also necessary: o Where interest is stipulated, to determine when interest is to run, but not to make the instrument negotiable o To determine where a party has acted within a reasonable time, but not make the instrument negotiable INSTRUMENT PAYABLE AT A FIXED PERIOD AFTER DATE (UNDATED) I PROMISE TO PAY TO B OR ORDER P1000, 60 DAYS AFTER DATE. SGD. A

EFFECT OF INSERTION OF WRONG DATE Knowingly inserting the wrong date in an undated instrument will avoid it as to the party so inserting the wrong date It is implied that the instrument void as to the person who knowingly inserted the wrong date Also, under Section 12, it is void for ante-dating an instrument for fraudulent purposes To a holder in due course, the instrument is not void, after the instrument is indorsed to him. The insertion of the wrong date doesnt avoid the instrument in the hands of a holder in due course. CASE DIGESTS: SECTIONS 12 TO 13 27 PACHECO V. CA 319 SCRA 595

FACTS: Due to dire financial needs of petitioner spouses who were engaged in the construction business, they secured loans from Vicencio. At every loan secured, the lender compelled the spouses to issue an undated check despite the admission of spouses that their bank account has insufficient funds or as on a later date, already closed. Lender assured them that the


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 23 of 190issuance of the check was only evidence of indebtedness, that it would not be presented to the bank, and it would be for formalities only. On the date wherein there was an unpaid balance to the loans secured by the spouses, the lender had them place a date on two of the later checks issued. Surprised later on, the spouses were charged with estafa as the checks were presented for encashment and was dishonored. HELD: BY MUTUAL AGREEMENT OF THE PARTIES, THE NEGOTIABLE CHARACTER OF A CHECK MAY BE WAIVED AND THE INSTRUMENT BE SIMPLY TREATED AS PROOF OF AN OBLIGATION. There cannot be deceit on the part of the spouses because they agreed with the lender at the time of the issuance and postdating of the checks that the same shall not be encashed or presented to the bank. As per assurance of the lender, the checks are nothing but evidence of the loan or security thereof in lieu of and for the same purpose as a promissory note. Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course, it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time. ILLUSTRATION Authority was only to fill in the blank for an amount not more than P100; before it was complete, the instrument was given to B. I promise to pay B or order P400 on June 20, 2010. Sgd. A For it to be enforceable against the next holder, the completion must be strictly in accordance with the authority given and within a reasonable time.

ILLUSTRATION #2 One sees Manny Pacquiao in person and has a blank sheet of paper signed by Pacquiao. He then filled it up to show the following: I promise to pay Jonathan Nepomuceno or order P10,000. Sgd. Manny Pacquiao For the above to be a valid negotiable instrument, it should have been delivered by the person signing the instrument with the intent of converting the blank paper into a negotiable instrument.

SCOPE OF SECTION 14 There are 2 steps in the execution of a negotiable instrument o The act of writing the instrument completely and in accordance with Section 1 of the NIL o The delivery of the instrument with the intention of giving effect to it THE MATERIAL PARTICULAR REFERRED TO IN THIS PROVISION MAY BE 1. A particular the omission of which will render the instrument nonnegotiable 2. A particular the omission of which will not render the instrument nonnegotiable FACTS FROM WHICH PRIMA FACIE AUTHORITY PRESUMED 1. Want of a material particular in the instrument 2. Possession thereof by a person, a third fact 3. That such person had authority to fill up the blank THE LAW PRESUMES THE EXISTENCE OF AUTHORITY TO FILL THE INSTRUMENT UP TO ANY AMOUNT FROM THE FOLLOWING FACTS 1. A signature on blank paper 2. That the person signing in blank delivers it in order that the paper may be converted into a negotiable instrument REQUISITES TO HOLD PRIOR PARTIES LIABLE 1. The blank must be filled strictly in accordance with the authority given 2. It must be filled up within a reasonable time


NEGOTIABLE INSTRUMENTS NOTES BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES Page 24 of 190the obligations. Later, the bank instituted an action for collection of money, impleading also the two officers. The trial court held the two officers personally liable also. HELD: Canlass is solidarily liable on each of the promissory notes to which his signature appears. The promissory notes in question are negotiable instruments and thus, governed by the NIL. Under the NIL, persons who write their names in the instrument are makers are liable as such. By signing the note, the maker promises to pay to the order of the payee or any holder the tenor of the obligation. Based on the above provisions of the law, there is no denying that Canlass is one of the co-makers of the promissory note. Sec. 15. Incomplete instrument not delivered. - Where an incomplete instrument has not been delivered, it will not, if completed and negotiated without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery. APPLI

54671739 Negotin Notes by Angel

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Transcript of 54671739 Negotin Notes by Angel