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  • Nego Elizalde Vs Binan Transpo

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    bernadette
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    Binan Transportation Company bought motor vehicles and signed promissory notes secured by a chattel mortgage on the vehicles. When the notes were not paid after being negotiated to Elizalde, he sued Binan. Binan claimed the notes were not negotiable because they referenced the chattel mortgage. The court held that for a reference to destroy negotiability, the promise to pay must be subject to the mortgage terms, but here the reference did not make the promise conditional on the mortgage, so the notes remained negotiable.

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    Nego Elizalde Case

    Original Title

    Nego Elizalde vs Binan Transpo

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    Binan Transportation Company bought motor vehicles and signed promissory notes secured by a chattel mortgage on the vehicles. When the notes were not paid after being negotiated to Elizalde, he sued Binan. Binan claimed the notes were not negotiable because they referenced the chattel mortgage. The court held that for a reference to destroy negotiability, the promise to pay must be subject to the mortgage terms, but here the reference did not make the promise conditional on the mortgage, so the notes remained negotiable.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    139 views1 page

    Nego Elizalde Vs Binan Transpo

    Uploaded by

    bernadette
    Binan Transportation Company bought motor vehicles and signed promissory notes secured by a chattel mortgage on the vehicles. When the notes were not paid after being negotiated to Elizalde, he sued Binan. Binan claimed the notes were not negotiable because they referenced the chattel mortgage. The court held that for a reference to destroy negotiability, the promise to pay must be subject to the mortgage terms, but here the reference did not make the promise conditional on the mortgage, so the notes remained negotiable.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    Elizalde vs Binan Transpo

    Negotiable Instruments Law Negotiable Instruments in General 58 OG 5886 Unconditional


    Promise To Pay

    Bian Transportation Company bought two motor vehicles. They signed a promissory note and
    to secure payment, they mortgaged the motor vehicles. The promissory notes were negotiated
    and were not paid. So Elizalde who was holding the promissory note sued. Bians defense was
    that the promissory note was not negotiable because it was mentioned that it was subject to
    chattel mortgage.

    ISSUE: Whether the note was negotiable.

    HELD: Yes. For reference to mortgage to destroy negotiability, the promise to pay must be
    burdened with the terms and conditions of the chattel mortgage. Since the reference to the chattel
    mortgage did not make the promise to pay burdened with the terms and conditions of the chattel
    mortgage, the promissory note was still negotiable.

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