Negotiable Instruments: Bill of Exchange, Promissory Note, and Check
**Point of Change**
A negotiable instrument incorporating an unconditional order, given by whom it is issued to another person, to pay a certain sum to another party. It contains three subjects: the drawer (issuer and the person who guarantees payment), the drawee (the person to whom the payment order is directed, called after receipt and acceptance of the title), and the borrower (or holder, the person that has to pay the amount specified in the letter). It is not uncommon for the drawer and the holder to be the same.
**Promissory Note**
It is a security for which a person (called the signer) agrees to pay another (or to the order*) we call ‘beneficiary’, a certain amount of money at a time and place stated in the note itself.
* To be paid to the beneficiary or, if put into circulation, to whom they decide (endorsement).
The note contains a payment order, pure and simple, and payment is a commitment assumed by the author directly. Thus, subjects initially involved in the note are reduced to two: the author and the recipient. The note should not be accepted afterward, but it obliges the signatory from issuing it. The signer of the note, according to Article 97, responds in the same way as the acceptor in a bill of exchange.
The note is fundamentally different from a check in that there is no mandate to the bank, but that it was obligated to pay directly to the author. Also, the payment may be a delayed maturity, and a check always causes your payment to your presentation regardless of the expiration date indicated. Thus, we say the check is payable on demand.
The payment adjustment is in Articles 94 and 97 of the Exchange and Cheques Act, where a major revision to the draft is made.
**Maturity of Note**
The deadlines are the same as those of the Bill of Exchange.
**Check**
The check is an instrument that is configured as a form of payment, this being its essential purpose. It is not set, unlike the case with the letter and the note, as a tool to facilitate the flow of credit. Thus, we can define the check as the document that contains an unconditional order from your drawer to a bank to pay to view its legitimate holder a certain sum. This document, called traditionally ‘heel’, resembles the bill of exchange. However, the check must be fought necessarily the view, and the book should always be a banker, being the irrevocable payment order until maturity. Economically, the check function is to be a means of payment and not credit, such as bills of exchange. Thus, to avoid paying debts in local currency.
**Transmission Check**
Dependence of the form of issuance of the check:
A) The carrier (or leave blank indicating the ‘fork’) B) In order (mentioning a particular person or adding ‘to order’) C) Direct Nominative (person determined + ‘not to order’)
Transmission check:
- If a cashier’s check is stolen, the drawer may object to their payment notification to the bank.
- If the check is in the name of a particular person, with or without ‘to order’, it is transmitted by endorsement.
- If the check is in the name of a particular person with the clause ‘not to order’, it shall not be transferable other than by a transfer ordinary.
Cross Check and Check to be Credited
- General cross check: Two parallel bars on the front. The drawee may not pay the check rather than a bank or a customer of the book itself.
- Cross check special: Two parallel bars on the front and between them the name of a particular bank and can only afford to it.
- Check to be credited: Mentioned on the front. No cash may be paid, only by recording a payment equivalent to their accounts.
**1. Economic Role of Securities**
Title-value: Essentially transmissible document necessary to exercise the right literal and autonomous indicated therein, represents a connection between the corporeal thing (the title) and intangible (the right) and a possibility of transmission.
The main function of the securities is to facilitate the transmission of credit rights, and that by linking the document to the right which it is mentioned, it is considered a movable particularly suitable for transmission or circulation of these rights to simple rules applied under the law for the transfer of property. Securities generally lack discipline, and there are only rules on certain securities in particular.
**Classes of Securities**
Constitutive and Declarative Titles
If the ticket is issued towards the birth of a right attached to it or not.
Constitute those which give rise to a right which is incorporated in the same way (release note).
Are found that incorporate a right that arose prior to the issuance of the title (rights of a partner in a SA, which arise once established it).
Securities Issued Individually and in Series
Individually: Promissory note, check. Seriously: Shares (incorporating an economic and corporate). In the dough: Metro ticket (benefits aimed at a group anonymous).
Securities Exchange, Participation, and Tradition
Exchange: Monetary credit claim (bill of exchange, promissory notes, and checks). Of Participation: Give the holder rights and powers. (Shares, which are not a negotiable instrument). Of Tradition or Representative: Attach the holder the right to delivery of certain goods, his possession, and to dispose of them by transferring the title.
Registered Securities, to Order or Bearer
Nominee: Designated as the holder of a specific person and can not be transmitted without transmission is notified to the debtor, being necessary at times that he cooperate in some way. To order: Designate as holder of a specific person or another that it or designate successive title holders in it. Have an easier movement than nominal, but not received by the bearer facility. Al carrier: Those that legitimize the holder as holder of the rights incorporated in the document.
**Essential and Nature of the Change Point**
1. The name of Bill of Exchange in the language used for writing. 2. The pure and simple mandate to pay a specified amount in € or foreign currency convertible admitted to official listing. 3. The name of the person who has to pay, called the drawee. 4. The indication of maturity. If no content is considered payable on demand. 5. The place has to pay. Failure to contain it is deemed to be the place designated by the name of the drawee. 6. The name of the person who has to make payment or to whose order is entered. 7. The date and place where the bill is being waged. The lack of date would not be corrected, while the site would be understood as the place designated by the name of the drawee. 8. The signature of issuing the letter, called the drawer.
**Essential and Natural Reward**
1, 2, 4. 4. The place where payment is to be made. In case of need, will be the same as the place of issue of title, and if that is not marked, are holding firm in the place that appears opposite the name of the signer. 6. 6. The date and place of signing the note.
**Essential and Natural Check**
1, 2. 3. The name of the person who has to pay, called the drawee, it must necessarily be a bank.
4. The place where payment is to be made. 5. The date and place of issuance of the check. 6. The signature of issuing the check. Called drawer
**Shares of the Holder of the Check Unpaid**
- Back exchange action: Check the holder has a right of recourse against the endorsers, the drawer, and their guarantors, answering all jointly and equally with debtors in exchange bill of exchange. The trial exchange may only be used when a check is issued, exercised the exchange action. The share exchange will be back when the check has been made in his term as the non-payment and is found by a protest by the drawee.
- Causes of action: Failure to pay the check involves the exercise of causal action against the drawer or indorser against successively or simultaneously.
- Action enrichment: The LCCH recognizes the holder of the check action of unjust enrichment in case of loss of the causes of action and exchange, provided they meet the other conditions laid down in Article 65.