MERCANTILE LAW
By payment in due course by or on behalf
MEMORY AID-Negotiable Instruments
Sec. 65 Warranty where negotiation by
delivery and so forth.—Every person
negotiating an instrument by delivery or by
delivery or by a qualified indorsement warrants:
a. That the instrument is genuine and in all
respects what it purports to be;
b. That he has good title to it;
c. That all prior parties had capacity to
contract;
d. That he has no knowledge of any fact
which would impair the validity of the
instrument or render it valueless.
But when the negotiation is by delivery only, the
warranty extends in favor of no holder other than
the immediate transferee.
The provisions of subdivision (c ) of this section
do not apply to a person negotiating public or
corporation securities other than bills and notes.
Sec. 52. What constitutes a holder in due
course.—A holder in due course is a holder who
has taken the instrument under the following
conditions:
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
was overdue, and without notice that it
has 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.
Sec. 119. Instrument; how discharged.—A
negotiable instrument is discharged:
a.
of the principal debtor;
b. By payment in due course by the party
accommodated, where the instrument is
made or accepted for his
accommodation;
c. By the intentional cancellation thereof by
the holder;
d. By any other act which will discharge a
simple contract for the payment of
money;
e. When the principal debtor becomes the
holder of the instrument at or after
maturity in his own right.
MOCK BAR
Sec. 14. Blanks; when may be filled.—
Where the instrument is wanting in any
material particular, the person in possession
thereof has a prima facie authority to
complete it by filling up the blanks therein.
And a signature in blank paper delivered by
the person making the signature in order that
the paper may be converted into a negotiable
instrument operates as a prima facie
authority to fill it up as such for any amount.
In order, however, that any such instrument
when completed may be enforced against
any person who became a party thereto prior
to its completion, it must be filled up strictly
in accordance with the authority given and
within a reasonable time. But if any such
instrument, after completion, is negotiated to
a holder in due course, it is valid and effectual
for all purposes in his hands, and he may
enforce it as if it had been filled up strictly in
accordance with the authority given and
within a reason.
Sec. 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. 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.

BIILS OF EXCHANGE

Sec. 127. Bill of Exchange, defined.—A bill of

exchange is 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 as um
certain in money to order or to bearer.