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Maker Drawer Acceptor Irregular Indorser by Delivery Qualified Indorser General Indorser

This document summarizes the roles and liabilities of parties involved in negotiable instruments such as makers, drawers, acceptors, and endorsers. It also outlines the requirements and processes for presentment of negotiable instruments for payment or acceptance, including when presentment is necessary, sufficient, excused or delayed. Additionally, it compares the elements and requirements of the Bouncing Checks Law (BP 22) and the crime of estafa as it relates to issuing checks without sufficient funds.

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melfabian
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33 views

Maker Drawer Acceptor Irregular Indorser by Delivery Qualified Indorser General Indorser

This document summarizes the roles and liabilities of parties involved in negotiable instruments such as makers, drawers, acceptors, and endorsers. It also outlines the requirements and processes for presentment of negotiable instruments for payment or acceptance, including when presentment is necessary, sufficient, excused or delayed. Additionally, it compares the elements and requirements of the Bouncing Checks Law (BP 22) and the crime of estafa as it relates to issuing checks without sufficient funds.

Uploaded by

melfabian
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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NEGOTIABLE INSTRUMENTS

MAKER

DRAWER

ACCEPTOR

IRREGULAR
INDORSER

Engages that he
will PAY it

Engages that, on
DUE
PRESENTMENT,
the instrument be
accepted or paid, or
both

By ACCEPTING,
he engages that he
will PAY the
instrument
according to the
tenor of his
acceptance

Admits the
EXISTENCE of the
PAYEE and his
CAPACITY to
indorse

Admits the
EXISTENCE of the
PAYEE and his
CAPACITY to
indorse

Admits the
EXISTENCE of the
1. PAYEE and his
capacity to indorse;
2. DRAWER, the
GENUINENESS of
the instrument, and
his CAPACITY and
AUTHORITY to
draw the instrument

Liable as an
indorser; RULES:
Payable to the
order of:
1. THIRD PERSON
- liable to payee
and subsequent
parties
2. MAKER/DRAWE
R - liable to all
parties subsequent
to the M/D
3. For
accommodation of
the PAYEE - liable
to all parties
subsequent to the
payee

(May insert an
express stipulation
limiting his
liability)

BY DELIVERY
QUALIFIED
INDORSER
WARRANTIES:
1. That the
instrument is
GENUINE and in
all respects what it
purports to be;
2. That he has
GOOD TITLE to it
3. That all prior
parties had
CAPACITY to
contract
4. That he has NO
KNOWDLEGE of
any fact which
would impair the
validity of the
instrument or
render it valueless

GENERAL
INDORSER
Engages that, on
DUE
PRESENTMENT,
the instrument be
accepted or paid, or
both
WARRANTIES:
(1-3)
4. That, at the time
it was negotiated to
him, it was valid
and subsisting

NEGOTIABLE INSTRUMENTS

If the instrument be
DISHONORED,
and the
NECESSARY
PROCEEDINGS on
dishonor be duly
taken, he will PAY
the amount thereof
PRESENTMENT FOR PAYMENT

BY DELIVERY immediate
transferee

If the instrument be
DISHONORED,
and the
NECESSARY
PROCEEDINGS on
dishonor be duly
taken, he will PAY
the amount thereof

LIABILITY OF THE PARTIES


PRESENTMENT FOR ACCEPTANCE

Necessary to charge secondarily liable (drawer and indorsers) (Sec 70)

When necessary (Sec 143)


1. Payable after sight; or when necessary to fix maturity date
2. Expressly stipulate
3. Payable elsewhere other than residence or place of business of drawee

Sufficient presentment - (Sec 72)


1. By holder or agent
2. At a reasonable hour on a business day
3. At a proper place as herein defined
4. To the person primarily liable or if absent or inaccessible, to any person
found at the place
1. Principal debtor is dead and no place of payment is specified ->
personal representative (Sec 76)
2. Partners and no place of payment is specified - to any one of them (sec
77)
3. Joint debtors -> to all of them(Sec 78)

How made (Sec 145) ---1. By or on behalf of the holder


2. At a reasonable hour on a business day
3. Before the bill is overdue
4. To the drawee or some other person authorized
a) Drawees not partners ---> all unless one has authority
b) Dead ---> personal representative (permissive)
c) Adjudged a bankcrupt, insolvent, assignment ---> either to him
or trustee or assignee

Every NI is payable at the time FIXED therein WITHOUT GRACE. (Sec


85)
Maturity date:
Sunday or holiday and Saturday -----> next succeeding business day
Saturday -----> if payable on demand, may be presented before 12nn when
the entire day is not holiday

Presentment may be made under Sec 72 and 85. (Sec 146)


Saturday (not holiday) ---> before 12nn

NEGOTIABLE INSTRUMENTS

Presentment is excused - (Sec 82)


1. It cannot be made after the exercise of reasonable diligence;
2. Drawee is a fictitious person
3. Waiver (express or implied)

Presentment is excused (Sec 148) --- (the bill may be treated as


dishonored)
1. Drawee is dead, absonded, fictitious or no capacity
2. After reasonble exercise of diligence, presentment cannot be made
3. Irregularity of presentment, but acceptance is refused on some other
ground

Dishonored by non-payment - (Sec 83)


1. It is duly presented for payment and payment is refused or cannot be
obtained
2. Presentment is excused and the instrument is overdue and unpaid
----> immediate right of recourse to all parties secondarily liable (Sec 84)

When dishonored by non-acceptance (Sec 149) ---1. Duly presented for acceptance and it is refused or cannot be obtained
2. Presentment is excused and the bill is not accepted
the holder has an immediate recourse against the drawer and
indorsers; **no presentment for payment is necessary (Sec 151)

Delay is excused -> circumstances beyond the control of the holder


without fault
Delay ceases to operate -> presentment must be made with reasonable
diligence (Sec 81)

Where time is insufficient (Sec 147) ------> delay is excused (drawer and
indorsers not discharged)
1. Bill drawn payable elsewhere (no.3 of Sec 143)
2. The holder has no time to present the bill for acceptance before
presenting it for payment on the day it falls due
3. With exercise of reasonable diligence

ESTAFA AND BP22


B.P. NO. 22
(BOUNCING CHECKS LAW)
Section 1. Checks without sufficient funds. - Any person who makes or
draws and issues any check to apply on account or for value, knowing at
the time of issue that he does not have sufficient funds in or credit with the
drawee bank for the payment of such check in full upon its presentment,
which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the
same reason had not the drawer, without any valid reason, ordered the

ESTAFA UNDER RPC


By postdating a check, or issuing a check in payment of an obligation
when the offender had no funds in the bank, or his funds deposited therein
were not sufficient to cover the amount of the check. (Article 315(2)(d) of
the Revised Penal Code as amended by R.A. 4885)

NEGOTIABLE INSTRUMENTS

bank to stop payment, shall be punished by imprisonment of not less than


thirty days but not more than one (1) year or by a fine of not less than but
not more than double the amount of the check which fine shall in no case
exceed Two Hundred Thousand Pesos, or both such fine and imprisonment
at the discretion of the court.
The same penalty shall be imposed upon any person who, having sufficient
funds in or credit with the drawee bank when he makes or draws and
issues a check, shall fail to keep sufficient funds or to maintain a credit to
cover the full amount of the check if presented within a period of ninety
(90) days from the date appearing thereon, for which reason it is
dishonored by the drawee bank.
Where the check is drawn by a corporation, company or entity, the person
or persons who actually signed the check in behalf of such drawer shall be
liable under this Act.
REQUIREMENTS:

REQUIREMENTS:

1. Making, drawing and issuance of any check to apply for account or for
value;
2. Knowledge of the maker, drawer, or issuer that at the time of issue he
does not have sufficient funds in or credit with the drawee bank for the
payment of such check in full upon its presentment; and
3. Subsequent dishonor of the check by the drawee bank for insufficiency
of funds or credit or dishonor for the same reason had not the drawer,
without any valid cause, ordered the bank to stop payment.

1. Postdating or issuance of a check in payment of an obligation contracted


at the time the check was issued

ESSENTIAL ELEMENT: KNOWLEDGE

ESSENTIAL ELEMENT: DECEIT

knowledge of insufficiency of funds is presumed when t is proved that the


issuer received a notice of dishonor and that within 5 days from receipt
thereof, he failed to pay the amount of the check or make arrangement for
its payment. Additionally, in BP 22, it is not a defense that upon the
issuance of check you are not motivated with malice or fraudulent intent.

2. Insufficiency of funds to cover the check, and


3. Damage to the payee thereof.
If any of these is absent, a person cannot be held liable for Estafa.

The failure of the drawer of the check to deposit the amount necessary to
cover his check within 3days from receipt of notice from the bank and/or
the payee or holder that said check has been dishonored for lack of
insufficiency of funds shall be prima facie evidence of deceit constituting
false pretense or lack of funds.

NEGOTIABLE INSTRUMENTS

Covers all kinds of checks whether present or postdated, or whether


issued in payment of a pre-existing obligation or given in mutual or
simultaneous in exchange for something of value.

The deceit causing the defraudation must be prior to or simultaneous with


the commission of the fraud.
Deceit, to constitute estafa, should be the efficient cause of the
defraudation
Deemed to exclude checks issued in payment of preexisting obligations the drawer does not derive any material benefit in return or as
consideration for its issuance. On the part of the payee, he had already
parted with his money or property before the check is issued to him, hence,
he is not defrauded, by means of any prior or simultaneous deceit
perpetrated on him by the drawer.

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