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NI DISCHARGE > Chapter 9 Discharge > Flashcards

Chapter 9 Discharge Flashcards

1
Q

T/F. On what constitute PAYMENT IN DUE COURSE

Payment in Due Course is when it is made on or before maturity date of the instrument to the holder thereof in good faith and with notice that his title is defective

A

F, at or after maturity, without notice that his title is defexrion.

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2
Q

There may be payment in due course if it is made by or in behalf of the principal creditor

A

F made by or in behalf of the principal debtor

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3
Q

There is payment in due course if payment is made to the holder in due course

A

F HOLDER

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4
Q

Use of Another Instrument cannot be made as a payment as 1249 NCC provides that it does produce any effect of payment unless encashed

A

True

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5
Q

Requisites of Discharge in re-acquisition

A
  1. by the principal debtor
  2. In his own right
  3. At or after maturity
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6
Q

Payment is Discharge if its made by what party, give example

A

Primary Party, Maker or Acceptor (if not a surety for principal debtor who signed as 2ndary party)

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7
Q

Payment is discharge if payment is made on behalf of the principal debtor under what principle?

A

Law of agency

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8
Q

Can a person who make payment as 2nd party who is not the accommodated party discharge the intrument? Who are the parties secondarily liable? Except the

A

No. Sec 121 - if the instrument is paid by a 2ndary liable, it is not discharged

2ndarily liable - II, GI, IBI

Except the drawer - 121 par(a)… has been paid by the drawer

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9
Q

Is striking our of indorsement allowed?

A

Yes sec 121 - not necessary for the paying party’s title

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10
Q

Will payment made by the accommodated party (AP) discharge the instrument? Why

A

Yes. Bec AP is the principal under 2nd par of section 122

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11
Q

Can a payment made by the drawer discharge the instrument? If yes, why is it under 121 it specifically does not allow 2ndarily liable to be discharged?

A

Yes under sec 121!

Explanation: If the instrument is payable to the order of third person, the drawer is the person who is ULTIMATELY liable on the instrument even if the acceptor will pay the payee

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12
Q

T/F Acceptor has no right of recourse agains the drawer only if acceptor already received the amount if the bill from the DRAWER,

A

True

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13
Q

Can the drawer be permitted to ask for reimbursement to the from the acceptor

A

Yes - if he paid the instrument to the 3rd person

Hence 121 (a) payable to the order of the 3rd person, paid by the drawer

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14
Q

When is the payment discharge? Is it when payment is made by a third person or, to the order of the third person? Why

A

To the order of the third person. Because payment is not made by the person primarily liable.

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15
Q

Can a person who pay the holder with the intention of acquiring title over the instrument consider as THIRD PERSON?

A

No. A 3rd person must not give the intention to have right over the instrument. He only pay for or in behalf of the maker…

If want to acquire title, then assignee or a holder

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16
Q

To whom should the payment be made?

A

To the holder!

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17
Q

What is the addtl reqt under sec 88 about the payor?

A

In good faith and without notice of payor’s defective title.

The holder may rightfully enforce payment against the payor who paid with notice of the defect.

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18
Q

Can the renunciation of rights against the PDebtor affects the HDC?

A

No. In due course without notice. Renunciation must be in writing

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19
Q

T/F. There is discharge when there is cancellation. Does it need in writing?

A

True. Provided it is intentional. Not needed unlike the renunciation

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20
Q

Can an unintentional cancellation discharge the instrument?

A

No. Under 123. It is inoperative

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21
Q

What are the acts that discharge simple contracts? Give 5.

A
  1. Payment or Performance
  2. Loss of the thing due
  3. Condonation or remission of the debt
  4. Confusion or merger of the rights of C and D
  5. Compensation
  6. Novation
  7. Annulment or recission
  8. Fulfillment of resolutory condition
  9. Prescription
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22
Q

Will the replacement of a check by another check necessarily extinguish the obligation covered by the first check?

A

No. Not necessarily.

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23
Q

T/F an instrument is discharged when the principal debtor becomes the holder of the instrument at or after the maturity in his own right.

A

True

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24
Q

What is meant by “in his own right”?

A

In his own title.

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25
Q

T/F. Note is discharged when the maker becomes the holder.

A

False. Not discharged

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26
Q

True or false. The note is discharged with Maker becomes the holder as executor or administrator.

A

False

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27
Q

True or false. The maker is discharge, even if he acquired the instrument through an agent who did not disclose his principal.

A

True

28
Q

True or false.  The instrument must be surrendered to the payer, whenever discharge is by female by or in behalf of the principal debtor

A

True

29
Q

True or false.  If the instrument is not surrendered, and it fell into the hands of the holder in due course, then the instrument is not totally discharge, because the holder in due course can enforce the in the previous payment that was made.

A

True

30
Q

True or false. The person secondarily liable on the instrument or discharge buy any act which discharges the instrument

A

True

31
Q

True or false a person secondary liable in the instrument is this charge by the intentional cancellation of his signature by the holder.

A

True

32
Q

True or false a person secondary liable in the instrument is this charge of subsequent party?

A

False. Must be prior party

33
Q

True or false a person secondary liable in the instrument is discharge buy a valid, tender or payment made by a prior party

A

True

34
Q

True or false. A person secondary reliable an instrument is this charge by the release of the principal creditor, unless the holder’s right of recourse against the party secondary liable is expressly waived

A

False. principal debtor, expressly reserved.

35
Q

True or false a person secondary liable an instrument is discharge  by any agreement binding up on the holder to extend the time of payment, or to postpone the holders right to enforce the instrument, unless made with the assent of the party secondarily liable, or unless the right of recourse against such party is expressly reserved

A

True

36
Q

 True or false.  The cancellation of an endorsement of a personal and secondary liable in paragraph B of section 120 may result in the discharge of other parties

A

True

37
Q

True or false. The indorser who is endorsement is struck out, and all endorser. Subsequent to him are there by relieved from liability on the instrument.

A

True

38
Q

What happens when the Payee P indorses the instrument to A, then A to B, B to C, C To D, and D intentionally cancel A’s signature?

A

It discharges B and C. Section 48, in relation to par 2 of section 120

The cancellation deprived them of their right of recourse against A.

39
Q

If the holder accepted the tender of payment via prior party, then what would happen to the subsequent party

A

Discharged

40
Q

What happen if the creditor release the principal debtor? Can a persons secondary liable recourse against the principal debtor?

A

It discharges is the instrument in the person in second a reliable, have no more right of recourse against the principal debtor.

41
Q

Can a person secondarily liable be released if there is an agreement to extend the term of Payment by the principal debtor? Why?

A

Yes. Because the assurance of the drawer and the endorsers is payment, according to their tenure of instrument.

42
Q

What is the definition of a CHECK?

A

Under the negotiable instrument law, a check is a bill of exchange table on demand drawn on a bank.  Checks are used between banks in bonkers in their customers, and are designed to facilitate banking operations.

43
Q

Fill in the blank. Under section 186 within duck what time of the check must be presented. I’ll check must be presented for payment within a ______________. after its issue, or the drawer will __________ , to the extent of the loss caused by the delay.

A

Reasonable. Discharged from liability.

44
Q

Does a cheque it’s self operates as an assignment of any part of the fence to the credit of the drawer with the bank?

When is the Bank liable?

A

No.

The bank can only be held liable if it accepts or is certifies the check.

45
Q

What do you call the checks that are drawn by a bank upon itself? What is meant by upon itself?

A

 Cashiers and Manager’s check.

 The bank is both the drawer in the drawer we of the cashiers check.

46
Q

True or false.  The Banco central de Filipinas. Generally, disallows the issuance of cashiers or Manager’s check or certified checks that are payable to a BEARER

A

True

47
Q

True or false.  What are your check is certified by the bank and which it is drawn, your certification is equivalent to acceptance.

A

True

48
Q

True or false. Where the holder of a check procures it to be accepted or certified the drawer, and indorsers are not discharge from liability there on.

A

False. Discharged.

49
Q

In what section tells that the drawer and all indorsers are discharged from liability, where the holder was the one who procured the certification or acceptance of the check?

A

Section 188

50
Q

Specify the characteristic of a cross check

A

It is where the name of a bank, or a business institution is written between two parallel lines, which means that the drawee should pay only with the intervention of the company

“For payee’s account only”
“And Co”

51
Q

True or false.  If the check is crossed, then it is understood that the check may not be encash, but only deposited in the bank.

A

True

52
Q

True or false. It is understood that I check with cross may be negotiated only once. - whether or not the person has an account with the bank.

A

False - to one who has an account with the bank

53
Q

True of false. The act of crossing serves as a warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose.

A

True

54
Q

Can a managers check out a cashiers check be crossed too?

A

Yes.

55
Q

If the crossing is general, should the drawee encashed?

A

No the drawee merely accepts the crossed Check for deposit.

56
Q

True or false. Acceptance of cross checked, will not extinguished the obligation.

A

True

57
Q

True or false. The death of the drawer revokes the drawer/bankers authority to pay.

A

True. Not under NIL but sec75 of BOE act of 1882.

58
Q

______ is the process for presentment for payment of the check through the collecting bank. It is also the process of collecting the amount of the check from the Drawee bank.

A

Clearing.

59
Q

What system does PCHC use in electronic clearing? Who is PCHC

A

CICS. Check image and clearing system. Circular 924 s2016 of. bsp. PCHC is the processing agency and exclusive provider of nationwide magnetic ink character recognition (MICR)

60
Q

What is DAUD Check?

A

Drawings Against Uncollected Deposits (DAUDs)

Check is deposited in a checking account or a demand deposit. Check must be cleared first before issuing a check out of said checking account.

61
Q

Can a drawee bank refuse to pay the managers check?

A

Yes, by interposing a personal defense of the purchaser.

62
Q

Iron clad rule

A

An act of prohibiting the countermanding of payment of certified checks. 

63
Q

It is a interest bearing deposit account that
combine the payable on demand feature of checks and the investment feature of the savings account.

A

Negotiable order of withdrawal (NOW) under sx223 of MORB

64
Q

Is NOW check paid to BEARER or to CASH valid?

A

No. Payable only to a specific person

65
Q

Difference between Crossed Check and NOW checks?

A

Crossed checks may still be payable to bearer or order under sec1 of the negotiable instruments. CCs can be negotiated under NIL.

NOW can never be payable to order or bearer.
Now account cannot be negotiated if it contains minimum features

66
Q

Who may be made liable under BP22?

A

Drawer and the indorser of a check.
If corporate check, then the corporate officer who signed it may be held liable.

NI DISCHARGE (1 decks)

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