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1
Enumerate Section 1 of NIL
It must be in writing and signed by the maker/drawer Must be Payable on demand or a fixed or determinable future time Must contain an unconditional order or promise to pay a sum certain of money Must be payable to order or to bearer When an instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty
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what Sec No. is Promissory Note
Sec. 184
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Refers to the person to whom the instrument is negotiated by delivery
Indorsee
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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
Promissory Note
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what are the functions of NIL
Substitute for money Credit Instrument
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Bonds that can, at the option of the holder, be converted into stocks
Convertible bonds
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Differentiate Promissory note and Bills of Exchange
Promissory Note: It contains unconditional promise Two parties on its face: Maker and Payee The person who signs it is the maker The primary liable is the Maker There is only one presentment for payment Bills of Exchange: It contains unconditional order There are 3 parties on its face: Drawer, Drawer, Payee The person who signs it is the drawer The drawer is secondarily liable The primary Liable is the Drawee-Acceptor There are 2 presentments: for acceptance and for payment
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Written assent of the drawee to the drawer
Acceptance
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Bonds secured by collateral deposited with a trustee
Collateral trust bonds
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Kinds of Bonds
Bottom bonds, Chattel Mortgage bonds, Collateral trust bonds, Convertible Bonds, Coupon bonds, Guaranteed bonds, Income bonds, Joint and Several bonds, Joint bond, Mortgage Bond
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the provisions of NIL were copied from AUNIL which was based largely on the
Bills of Exchange Act 1882
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A bond which has interest or principal or both guaranteed by a company other than the issuer
Guaranteed bond
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A bill of exchange drawn on a bank payable on demand.
Check defined
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Kind of Negotiable instrument
Promissory Note and Bills of Exchange
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The Law that governs negotiable instruments in this Jurisdiction
Act No. 2031
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Bonds with interest coupons attached
Coupon bonds
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Refusal to pay the maker or drawee/acceptor
Dishonor by non-payment
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A bond secured by mortgaged of ships
Bottom Bond
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Credit instrument can also be considered as _______ because they may state the transaction that gave rise to the issuance of the instrument
proof of existence of a transaction
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are Promissory Notes of the issuing bank which are payable to bearer on demand
Bank Notes
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Refers to a person who executes tge written promise to pay
Maker
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A bill of exchange to which documents are attached when presented for payment or acceptance
Documentary Bill of Exchange
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A BOE that is payable when the holder presents it for payment
Sight on Demand Draft
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Refers to the transfer of possession of the Negotiable instrument with the intent to transfer title
Delivery
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A BOE which is used in contract of sale, the seller as drawer orders the buyer to pay a sum certain to the same seller
Trade Acceptance
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Transfer from one person to another so as to constitute the transferee of a holder
Negotiation
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Bonds secured by mortgage on chattels of business
Chattel Mortgage bonds
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In other jurisdiction, A draft can either be
Inland Bill and Foreign Bill
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A bill which is, or on its face purports to be, both drawn and payable within the Philippines
Inland Bill
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In summary, the factors that affect the determination of negotiability of instruments are:
The whole of the instrument shall be considered Only what appears on the face of the instrument shall be considered The provisions of NIL, especially Section 1 thereof shall be applied
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Under what Law the Monetary Board decided to authorized the isauance of MC/CC payable to Cash, bearer, ficticious person or numbered account
Circular No. 291 Series of 2001 Resolution Number 707 dtd May 10, 2001
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A bond the principal and interest of which is guaranteed by two or more persons
Joint and several bond
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is a time draft accross the face of which the drawee bank has written the word accepted. If the seller does not trust the credit of the buyer or is not familiar with him, the seller may wish to require the bank of the buyer to accept the bill/draft
Banker's acceptance
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An unconditional order in writing addressed by one person to another, signed by one person to another, signed by the person giving it, requiring the 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
Bills of exchange
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Cashiers check and Managers check are in the nature of accepted or certified checks and that payment thereon cannot be countermanded by the payee
Iron Clad Rule
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Refers to the person in whos favor a negotiable instrument is made or drawn payable
Payee
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Incidents or stages in the life of NIL
Preparation and Signing Issuance Negotiation Presentment for Acceptance Acceptance Doshonor by non-acceptance Presentment for Payment Dishonor by non-payment Notice of Dishonor Portest Discharge
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Date written in the check is
Issue date
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kinds of Bill of Exchange
Time draft, Sight in Demand Draft, Trade acceptance, Bankers Acceptance
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First delivery of the instrument to the payee
Issuance
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NIL took effect when
July 1911
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Refusal to accept by the drawee
Dishonor by non-acceptance
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In other jurisdiction, a bill of exchange is commonly called a
Draft
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the bill of exchange shall be presented to the drawee so that the latter will signify his agreement to the order of the drawer to pay
Presentment for acceptance
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A bond secured by two or more obligors who must be joined in any action on such bond
Joint bond
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Differentiate Bills of Exchange and Checks
Bills of Exchange not necessarily on a deposit Death of a drawer of BOE with the knowledge of the bank does not revoke the authority of the banker to pay Maybe presented by payment within a reasonable time after its last negotiation if payable on demand The drawee may or may not be a bank Presentment for acceptance is necessary for certain types of bill Checks: It is necessary that a check is drawn on a deposit Death of the drawer of the check, with the knowledge of the bank, revokes authority of the banker to pay Must be presented for payment within a reasonable time after issuance The drawee is always a Bank Presentment for acceptance is not necessary
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Crimes involving checks
Estafa Check Kiting Batas Pambansa Blg. 22
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A bill which is, or on its face purports to be, both drawn and payable in any other country aside the Philippine
Foreign Bill
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Kinds of Checks
Crossed check Certified Check Memorandum Check Manager's check/Cashier's check
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Refers to the person who executes the written order to pay
Drawer
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the instrument is shown to the maker/drawer so that the said maker/drawer will pay
Presentment for Payment
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When a negotiable instrument is issued by a maker in a promisory note, or by a drawer in a bill of exchange, to the payee, there already exists a ______ between them
Contract
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In particular, the functions if NIL are:
-Substitute for Money -Medium of Exchange -Credit instrument which increase credit circulation -Increase purcahsing power in circulation -proof of transaction
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Bond secured by a mortgage on a property
Mortgage bond
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The most common form of Bill of Exchange
Check
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A form of a promissory note which is a written acknowledgement of a bank of its receipt of a certain sum with a promise to repay the same
Certificate of Deposit
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A bill to which no document is attached when presentment for payment or acceptance is made
Clean Bill of Exchange
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Notice to the persons secondarily liable that the maker/drawee refused to pay or to accept the instrument
Notice of Dishonor
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A BOE that is payable at a fixed date
Time Draft
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A promissory note or bond backed by the general credit of a corporation and usually not secured by a mortgaged or lien on any specific property
Debenture
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Under what Law is the Banks not allowed to issue MC/CC or other similar instrument payable to cash, bearer, ficticious person or numbered account
Circular No.259 Series 2000
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One drawn by a depositor upon funds to his credit in a bank which a proper officer of the bank certificates will be paid when duly presented for payment. The bank debits the drawer's account at the time of certification and set aside funds out of the drawer's control
Certified checks
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Stages of NIL complete with all the requisites provided for Section 1 of NIL
Preparation and signing
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A certificate or evidence of a debt on which the issuing company or governmental body promises to pay the boundaries a specified amount of interest for a specified length of time, and to repay the loan on the expiration date
Bonds
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Refers to the person who negotiates by Indorsement
Indorser
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Bond on which interest is payable only when earned after payment of interest upon prior mortgages
Income Bond