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COMLAW > Negotiable Instruments > Flashcards

Negotiable Instruments Flashcards

1
Q

Specifies the person to whom or to whose order the instrument is to be payable. Also known as specific indorsement or indorsement in full.

A

Specific Indorsement

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2
Q

Instrument is payable to bearer and may be negotiated by delivery;

May be converted to special indorsement by writing over the
signature of the indorser in blank any contract consistent with the character of indorsement

A

Blank Indorsement

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3
Q

The indorser binds himself to
pay:

a. upon no other condition than
failure of prior parties to do so
b. upon due notice to him of such
failure

A

Absolute Indorsement

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4
Q

Right of the indorsee is made to depend on the happening of a contingent event. Party required to pay
may disregard the conditions

A

Conditional Indorsement

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5
Q

When the instrument:

a. Prohibits further negotiation of the instrument (it destroys the
negotiability of the instrument);
b. Constitutes the indorsee the agent
of the indorser; (Sec. 36)
c. Vests the title in the indorsee in
trust for or to the use of some persons. But mere absence of words implying power to negotiate does not make an instrument restrictive.

A

Restrictive Indorsement

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6
Q

Constitutes the indorser a mere assignor of the title to the instrument. It is made by adding to the indorser’s signature words like, without recourse (serves as an ordinary equitable assignment)

A

Qualified Indorsement

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7
Q

Indorsement made payable to 2
or more persons who are not partners.

A

Joint Indorsement

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8
Q

A person who, not otherwise a party to an instrument, places thereon his signature in blank before delivery

A

Irregular

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9
Q

Indorser waives presentment and notice of dishonor, enlarging his liability and his indorsement.

A

Facultative Indorsement

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10
Q

Indorsement to two persons in succession

A

Successive Indorsement

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11
Q

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

A

Promissory Note

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11
Q

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

A

Promissory Note

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12
Q

An unconditional order in writing
addressed 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.

A

Bill of Exchange

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13
Q

Has 2 original parties

A

Promissory Note

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14
Q

Has 3 parties

A

Bill of Exchange

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15
Q

Maker is primarily liable

A

Promissory Note

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16
Q

Drawer is secondarily liable

A

Bill of Exchange

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17
Q

Only 1 presentment (for payment) is needed

A

Promissory Note

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18
Q

Only 2 presentment (for payment and for acceptance) are generally needed

A

Bill of Exchange

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19
Q

Is the counterfeit making or fraudulent alteration of any writing.

A

Forgery

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20
Q

Methods of negotiation:

a. If payable to bearer

A

Negotiated by DELIVERY

21
Q

Methods of negotiation

a. If payable to order

A

Negotiated by INDORSEMENT, completed by DELIVERY

22
Q

Those that are available against all parties, both immediate and remote, including holders in due course

A

Real Defense

23
Q

Defenses which are not available against a holder in due course. Those which grow out of the agreement or conduct of a particular person in regard to the instrument which renders it inequitable or him though holding the legal title, to enforce it against the party sought to be made liable.

A

Personal Defense

24
Q

Who are primarily liable in PN?

A

Maker

25
Q

Who are primarily liable in BOE?

A

Acceptor

26
Q

Who are secondarily liable?

A
  1. Drawer
  2. Indorser
27
Q

Primarily Liable

A

Maker

28
Q

Only secondarily liable

A

Drawer

29
Q

Can limit his liability by putting “without recourse”

A

Drawer

30
Q

Cannot limit liability

A

Maker

31
Q

Issues a BOE

A

Drawer

32
Q

Issues a PN

A

Maker

33
Q

A bill of exchange drawn on a bank on demand

A

Check

34
Q

Forms of Negotiable Instrument

A

(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with
reasonable certainty.

35
Q

What constitutes a holder in due course

A

(a) That it is complete and regular upon its face;
(b) That he became the holder of it before it was overdue, and without notice that it had been previously
dishonored, if such was the fact;
(c) That he took it in good faith and for value;
(d) 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.

36
Q

Where the sum payable is expressed in words and also in figures and there is a discrepancy between the two

A

Words shall be followed

37
Q

Payment of Interest without date

A

Basis will be from the issue thereof

38
Q

Conflict between written and printed provisions

A

Written provisions will prevail

39
Q

Doubt whether it is a bill or note

A

Holder may treat is according to his ELECTION

40
Q

Signature placed in the instrument is not clear

A

He will be deemed as indorser

41
Q

Words “I promise to pay” is signed by two or more persons

A

They are JOINTLY Liable

42
Q

Methods of Transferring Negotiable Instruments

A
  1. Issue
  2. Negotiation
  3. Assignment
43
Q

First delivery of the instrument complete in form to a person who takes it as a holder

A

Issue

44
Q

An instrument is negotiated when it is transferred from one person to another in such a manner as to constitute the transferee the holder thereof.

A

Negotiation

45
Q

Absent any express prohibition against assignment or transfer written on the face of a non‐ negotiable instrument, the same may be assigned or transferred

A

Assignment

46
Q

Can a Holder in due course hold a maker for instruments which are incomplete and undelivered supposing that the note was stolen, filled‐up, and was subsequently negotiated?

A

NO.

The law is specific that the instrument is
not a valid contract in the hands of any holder. The phrase “any holder” includes a holder in due course.

47
Q

Refers to the transfer of possession,
actual or constructive, from one person to another (Sec. 191), with the intent to transfer title to payee and recognize him as holder thereof.

A

Delivery

48
Q

Persons having knowledge of the conditions or limitations placed upon the delivery of an instrument. It means privity, and not proximity.

A

Immediate parties

49
Q

Persons without knowledge as to the
conditions or limitations placed upon the delivery of an instrument, even if he is the next party physically.

A

Remote parties

50
Q

One who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his
name to some other person.

A

Accommodation Party

COMLAW (1 decks)

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