Академический Документы
Профессиональный Документы
Культура Документы
Every negotiable instrument is deemed prima facie to have been LIABILITY OF ACCOMMODATION PARTY
issued for a valuable consideration and every person whose
signature appears thereon to have become a party thereto for value. 1. Absence of consideration is not a defense.
2. Liable not only to a holder in due course but also to a holder for
VALUE value.
3. Not liable to the accommodated party.
Any consideration sufficient to support a simple contract. An
antecedent or pre-existing debt constitutes value and is deemed ACCOMMODATION PARTY vs. REGULAR PARTY
such whether the instrument is payable on demand or at a future
time. Accommodation Party Regular Party
Signs the instrument without Signs the instrument for value
HOLDER FOR VALUE receiving any consideration
Signs for the purpose of lending Signs not for purpose of lending
Where value has at any time been given for the instrument, the his name his name
holder is deemed a holder for value in respect to all parties who May show by parol evidence Cannot limit liability by parol
become such prior to that time. that he is only an evidence
accommodation party
WHEN LIEN ON INSTRUMENT CONSTITUTES HOLDER FOR VALUE Cannot avail the defense of Can avail the defense of lack of
absence of consideration consideration
Where the holder has a lien on the instrument arising either from After payment may recover May not recover from any
contract or by implication of law, he is deemed a holder for value to from the accommodated party subsequent party
the extent of his lien.
NEGOTIATION
RULES ON LIEN ON INSTRUMENT
The transfer of negotiable instrument from one person to another
When amount of instrument is more than the debt secured:
made in such a manner as to constitute the transferee the holder
The pledgee is a holder for value to the extent of his lien
thereof.
When amount of instrument is less than or equal to the debt
secured:
METHOD OF NEGOTIATION
The pledgee is a holder for value for the full amount
Party liable can set up a personal or real defense: Instrument payable to order:
Personal Defense – pledgee can collect only up to the Indorsement by the payee or present holder
extent of the debt Delivery to the next holder
Real Defense – pledgee cannot collect on the instrument Instrument payable to bearer:
Negotiated by mere delivery
EFFECT OF WANT OF CONSIDERATION
METHODS OF TRANSFER OF NEGOTIABLE INSTRUMENT
Absent of consideration
Total lack of any valid consideration By issue
Failure of consideration By negotiation
Agreed consideration did not materialize By assignment
Partial failure of consideration
Agreed consideration was not completely given or EFFECT OF DELIVERY OF ORDER INSTRUMENT WITHOUT
performed INDORSEMENT
Requisites:
Negotiation Assignment
Refers only to negotiable Refers generally to an ordinary
instrument contract
Transferee is a holder The transferee is an assignee
A holder in due course is Assignee is subject to both real
subject only to real defenses and personal defenses
A holder in due course may Assignee merely steps into the
acquire a better title than that shoes of the assignor
of a prior party
INDORSEMENT
NATURE OF INDORSEMENT
NECESSITY OF INDORSEMENT