ACT NO. 2031
February 03, 1911
THE NEGOTIABLE INSTRUMENTS LAW
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) 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.
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 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. chan robles virtual law library
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. Negotiability Of Various Instruments Considered. Continued
Sec. 4. Checks
"A check Is a bill of exchange drawn on a bank, payable on demand."4 A check may be called a kind of a bill of exchange. It differs from other bills of exchange in these particulars: (1) It is drawn on a bank or banker.
(2) It is payable on demand; bills are either payable on demand or at a fixed or determinable future time. (3) It is drawn by one who thereby asserts that he is a depositor in the bank or with the banker and that he has funds there sufficient to cover the check. Checks are as far as possible governed by the same rules which govern bills of exchange. 4. Uniform Negotiable Instruments Act, Sees. 185-189 (Appendix A). (b) Special forms of the above instruments.
Sec. 5. Certificates Of Deposit
A certificate of deposit is an instrument issued by a bank reciting a deposit of a certain sum of money, payable on demand or at a fixed time. It is negotiable, if drawn properly, being a form of promissory note. Banks issue certificates of deposit, bearing interest, and payable either on demand or at a time fixed. They are negotiable if containing the elements of negotiable paper, for the simple reason that they are then negotiable promissory notes. Therefore we may say that a negotiable certificate of deposit is a promissory note made by a bank to the order of its depositor. Sec. 6. Bonds
A bond Is an evidence of Indebtedness issued by a municipal, public or private corporation payable at a date certain and is negotiable when drawn In accordance with the rules governing commercial paper. A bond is an instrument evidencing the indebtedness of a corporation, issued under the seal thereof, usually referring to some mortgage or trust deed given to secure the debt whereof it is the evidence. If it contains sufficient words of negotiability and is not clogged with any condition or stipulation rendering it conditional or uncertain, it is...
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