COMMERCIAL LAW REVIEW

ATTY TANADA

Big three: negotiable instruments, insurance law, corporation law (NIC)

RA 8799
AMLA
Gen banking laws

Bring codal every meeting

Reference book: Villanueva and sundiang-aquino
No special exams, but there is advance exam

22 Nov 2018

Negotiable instrument law

Sec 1,7,8,9,13,14,15,16,23,29,52 in relation to 58,88,119,120: liability of

accommodation party, holder in due course, memorize
Only two kinds of negotiable instrument: promissory note and bill of exchange

Graded recitation:
Midterm: negotiable instrument and insurance
Finals: corp and other special laws

Sec 1-16 graded recitation on Thursday.

To do: Download codal for negotiable instrument tonight

Blank indorsement: no indorsee is specified and it is done by affixing the indorser’s

signature.

Special indorsement: designates the indorsee. “pay to X”

The holder may convert a blank indorsement to a special indorsement by writing
over the signature of the indorser in blank any contract consistent with the
character of the indorsement.

QUALIFIED INDORSEMENT: constitutes the indorser a mere assignor of the title to

the instrument. It may be made by adding to the indorser’s signature the words
“without recourse” o rany words of similar import. Such an indorsement does not
impair the negotiable character of the instrument.
CONDITIONAL INDORSEMENT: the party required to pay the instrument may
disregard the condition and make payment to the indorsee or his transferee
whether the condition has been fulfilled or not.

RESTRICTIVE INDORSEMENT:
a. prohibits the further negotiation of the instrument (pay to x only)
b. constitutes the indorsee the agent of the indorser (pay to X for collection)
c. vest the title in the indorsee in trust for or to the use of some other persons.
(pay to X in trust for Y)

WHAT CONSTITUTES A HOLDER IN DUE COURSE- a holder in due course is a

holder who has taken the instrument under the ff conditions: sec 52
1. that it is complete and regular upon its face
2. that he became a holder of it before it was overdue, and without notice that it
has been previously dishonored, if such was the fact
3. that he took it in good faith and for value
4. that at the time it was negotiated to him, he had no notice of any infirmity in
the instrument or defect in the title of the person negotiating it

sec 1. WUPOA
1. It must be in writing and signed by the maker or the drawer
2. It must contain an unconditional promise to pay or order to pay a sum
certain in money
3. It must be payable to order or to bearer
4. It must be payable on demand or at a fixed determinable future time
5. Where the instrument is addressed to a drawee, he must be named or
otherwise indicated therein with reasonable certainty