THE NEGOTIABLE INSTRUMENTS LAW (ACT. NO.

Effect of designation of particular kind of current

2031) SUMMARY
Author: Hector S. De Leon 2016
Professor: Atty. Carlo Busmente
Introduction
Title I. Negotiable Instruments in General
Chapter I. – Form and Interpretation
Section 1. Form of negotiable instruments – An
instrument to be negotiable must conform to the
following requirements:
a. It must be in writing and signed by the
maker or drawer
b.
Commercial Paper Defined
Formal requirements of negotiability in general
Negotiable instrument defined
Applicability of formal requirements explained
Non-negotiable instrument defined
Nature of a non-negotiable instrument
Money defined
Money not governed by Act
Promissory note defined
Original parties to a promissory note
Bill of exchange defined
Original parties to a bill of exchange
Idea and purpose of a bill of exchange
Section 2
Certainty of sum payable
Sum to be paid with interest
Sum to be paid by stated installments
Extension clauses
Sum to be paid with exchange
Sum to be paid with costs of collection and attorney’s
fee
money payable
Section 7
When instrument payable on demand
Section 8
Standardized words of negotiability
When instrument payable to order
Persons to whom order instrument may be drawn
Effect where payee/drawee not named or described
Section 9
When instrument payable to bearer
Section 10
Substance criterion of negotiability
Section 11
Presumption as to date
Date in instrument payable at a fixed future date
Date in instrument payable on demand
Section 12
Meaning of ante-dating and post-dating
Effect of ante-dating and post-dating
Date when instrument takes place
Section 13
When date may be inserted
Effect of insertion of wrong date
Section 14
Steps in issuance of negotiable instrument
Application of Sections 14, 15, 16
Rules where instrument incomplete but delivered
Section 15
Rules where instrument incomplete but undelivered
Section 16
Rules where instrument mechanically complete

Section 3 Section 17
When a promissory note contains a promise to pay Rules of construction in case of ambiguity or omission
When bill of exchange contains an order to pay
When promise or order to pay unconditional Section 18
Indication of a particular fund out of which Persons liable on an instrument
reimbursement is to be made
Indication of a particular fund out of which payment Section 19
is to be made Signature by an authorized agent
Indication of a particular account to be debited with
the amount Section 20
Statement of transaction which gives rise to When an agent may escape personal liability
instrument Disclosure by agent of principal
Use of descriptive words without disclosure of
Section 4 principal
Certainty of time of payment
Reason for the requirement Section 21
Payable “when able” etc.; within reasonable time Meaning of procuration
Effect of procuration
Section 5
Acts in addition to payment of money Section 22
Effect of indorsement by incapacitated persons
Section 6 Effect of indorsement by a corporation
Effect of omission of date
Effect of omission of value Section 23
Effect of omission of place Forgery explained
Effect of omission of seal Application of Section 23
Cases of forgery in general
Extent of the effect of forgery
Exceptions to the general rule
Persons precluded from setting up the defense of
forgery
Right of drawee to recover payment where drawer’s
signature was forged
Right of drawee to recover payment where payee’s or
indorser’s signature was forged
Rights of parties in case of forged indorsements