Defenses Flashcards
How are defenses in NIL categorized?
- Personal Defenses - “equitable defenses”
2. Real Defenses- “absolute defenses”
Define real/absolute defense
is a defense that attaches to the instrument istelf and is available against all holders, whether IN DUE COURSE OR NOT
Define personal/equitable defense
is a defenses which is available only against a NOT holder due course or SUBSEQUENT holder who stands privity with him
who can raise personal and real defenses?
only the parties who are entitled to raise it such as the maker, drawer, drawee and indorser. (MI D2)
to whom personal defense be raised
- only to holder not in due course
2. or whom he has privity with
to whom can a real defense be raised
to all kinds of holder, whether in due course or not
what is the consequence after a party VALIDLY raised a defense, whether real or personal
the party can refuse payment
if a defense is validly raised against a holder, what should the holder do now?
since the instrument is dishonoured, holder may ask payment against the secondarily parties, provided a notice of dishonour or protest is given.
How can a party raise a defense
the law is silent about it.
the party raising a defense can do it orally or in writing
How to prove that a defensed has been raised?
the party raising it must put into writing and communicate it to the holder
How many personal defenses in NIL?
12.
- insertion of a wrong date
- filling out blank beyond reasonable time
- filling out blank not within the auothrity
- Non-delivery of complete instrument
- absence or failure of consideration
- Negotiation in breach of faith or under circumstances that amount to fraud
- Ante-dating or postdating for illegal or fraudulent purposes
- Mistake or innocent spoliation
- - - Ultra vires acts of a corporation
- illegal consideration
- acquisition of the instrument by unlawful means or by force duress or fear
- Fraud in inducement
How many real defenses in NIL?
12.
- Non-delivery of incomplete instrument
- forgery
- material alteration
- Minority
- prescription
- discharge in insolvency
- execution of instruments between public enemies
- Insanity
- — - Ultra vires act of corporation
- illegality for all intents and purposes
- duress amounting to forgery
- fraud in factum or esses contractus
Insertion of Wrong Date
- the space is provided for the date is blank and the holder has been authorized to supply the date of the instrument.
- HOWEVER, the holder inserted a wrong a date.
Filling out blank not within the authority given
- the holder is in possession of an incomplete instrument but there was an instruction to complete the instrument
- HOWEVER, the holder filled out the blanks not within the authority given or beyond reasonable time.
Material Alteration
if the one completing the instrument is not authorized
