Documents of Title: Arts. 1507 - 1520
Documents of Title: Arts. 1507 - 1520
Documents of Title: Arts. 1507 - 1520
• Negotiability = transferability
• But note that non-negotiable documents of title can also be transferred, but
not by negotiation, but by assignment. In this case, the transferee will have no
additional right. (Art. 1511)
When is a document of title considered
negotiable?
• Art. 1507. A document of title in which it is stated that the goods
referred to therein will be delivered to the bearer, or to the order of
any person named in such document is a negotiable document of
title.
• Order instrument
• Deliverable to the order of a specified person
• Indorsed instrument to the order of a specified person
• NOTE: even if the DoT states that it is not negotiable, its negotiability is not
affected. If it is considered a negotiable DoT under Sales Law, then it is
considered as a negotiable DoT. (Art. 1510)
How to negotiate? (Art. 1508-1509)
• Bearer instrument = delivery of the DoT
• note: A DoT which is previously an order instrument may be converted to a
bearer instrument and be negotiated by delivery.
• Prior to such notice, the right of the transferee may be defeated by:
1. the levy of an attachment of execution upon the goods by a creditor of the
transferor, or
2. by a notification to such bailee by the transferor or a subsequent purchaser from
the transferor of a subsequent sale of the goods by the transferor.
• Note that the rule is not the same in case the DoT is a negotiable DoT.