Negotiable Instruments Flashcards
Specifies the person to whom or to whose order the instrument is to be payable. Also known as specific indorsement or indorsement in full.
Specific Indorsement
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
Blank Indorsement
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
Absolute Indorsement
Right of the indorsee is made to depend on the happening of a contingent event. Party required to pay
may disregard the conditions
Conditional Indorsement
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.
Restrictive Indorsement
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)
Qualified Indorsement
Indorsement made payable to 2
or more persons who are not partners.
Joint Indorsement
A person who, not otherwise a party to an instrument, places thereon his signature in blank before delivery
Irregular
Indorser waives presentment and notice of dishonor, enlarging his liability and his indorsement.
Facultative Indorsement
Indorsement to two persons in succession
Successive Indorsement
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
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
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.
Bill of Exchange
Has 2 original parties
Promissory Note
Has 3 parties
Bill of Exchange
Maker is primarily liable
Promissory Note
Drawer is secondarily liable
Bill of Exchange
Only 1 presentment (for payment) is needed
Promissory Note
Only 2 presentment (for payment and for acceptance) are generally needed
Bill of Exchange
Is the counterfeit making or fraudulent alteration of any writing.
Forgery
Methods of negotiation:
a. If payable to bearer
Negotiated by DELIVERY
Methods of negotiation
a. If payable to order
Negotiated by INDORSEMENT, completed by DELIVERY
Those that are available against all parties, both immediate and remote, including holders in due course
Real Defense
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.
Personal Defense
