Escolar Documentos
Profissional Documentos
Cultura Documentos
ENDORSEMENT
MCB PF
A Check is negotiated when it is transferred from one
person to another in such a manner as to constitute
the transferee the holder thereof. If payable to order, it
is negotiated by the endorsement of the holder
completed by delivery.
Endorsement must be written at the back of the check
or on a separate paper known as detached
endorsement. Signature of the holder or endorser,
without additional words is sufficient endorsement.
ENDORSEMENT is the signature of the payee on the
back of the negotiable instrument. The original payee
becomes the endorser in negotiating the instrument.
KINDS OF ENDORSEMENT
1. Special Endorsement – applies to check payable to
order. The endorsement of the payee at the back of the
instrument is said to be special endorsement, since it is
his name specified as payee on the face of the check.
2. BLANK ENDORSEMENT – applies to checks payable
top bearer. In this case, the instrument was drawn against
no specified payee. Whoever is the holder in due course,
must endorse the check at the back for encashment.
3. RESTRICTIVE ENDORSEMENT – prohibits further
negotiation of the check when endorsement is in favor of a
particular person only. It specifies the words “ for deposits
only”. It limits further negotiation of the instrument, and
lessens the risk on the part of the payee under cases where
he makes further transfer of the instrument to another
holder. This is commonly used when the instrument issued
by a drawer is payable to bearer.
4. QUALIFIED ENDORSEMENT – constitutes the
endorser as a mere assignor of the title to the check. It
may ne done by adding word “ without recourse” or
words of similar import.
USES AND LIMITATIONS OF CHECK
1. SAFETY AND CONVENIENCE – it is safer to bring
along with you checks for the amount payable
rather than cash. If lost in the hand of the payee, he
may request for replacement from the drawer.
2. STOP PAYMENT notice. Drawer may notify bank “
for stop payment” of certain checks issued due to
some default in the performance of any obligation
on the part of the payee.
3. FOR ODD AMOUNTS – some transactions may
require odd amounts which can be easily paid by
simply indorsing a check.
4. AS A RECEIPT – acceptance and payment through
checks serve as official receipt for business
transactions, particularly when received by the drawer
together with his monthly bank statement.
5. FOR LARGE AMOUNTS – check are convenient to
use as instrument for paying large amounts of business
transactions.
CHECKS being a negotiable instrument must conform
to the following requirements.
1. It must be in writing and signed by the drawer
2. Must contain an unconditional promise or order to
pay certain amount of money.
3. Must be payable on demand, or at a fixed
determinable future time.
4. Must be payable to bearer or order and
5. Where the instrument is addressed to a drawee, the
drawee must be named with reasonable certainty.
Five Basic item we seen in check
1. The date
2. The amount
3. The drawer – the person or entity that issued
checks directing the drawee to pay the payee
named therein.
4. The drawee – is the bank who shall pay the party/
5. And the payee – is the party entitled to receive
payment.
LIABILITIES OF GENERAL ENDORSER