Kinds of Negotiable Instrument According to Method of Negotiation

 This is part of the notes for my undergraduate students on NIL. I hope you find this useful.

According to:	Kinds	Effect	Illustration
Method of nego.	Special (Sec. 34) 2 Kinds: a. Specify to whom instr. is payable: “Pay to Carlos”                             Sgd Juan Note: it does not affect negotiability b. Specify to whose order is the instr. payable: “Pay to Carlos or order”                              Sgd Juan	If the inst. is originally a bearer inst., it may be further negotiated by mere delivery even if the original bearer indorsed it specially (Sec. 40)	Originally BEARER inst. “I Promise to Pay BEARER”                                 Sgd Juan Payee is Carlos.  Carlos can negotiate inst. to Maria by mere delivery. Maria specially indorsed inst. to Joey. Joey can negotiate instrument to Tommy by MERE DELIVER. Thus: Tommy can only make Joey and Juan liable for the instrument. He cannot make Maria and Carlos liable. (Sec. 40) Suppose: Joey indorsed instrument to Tommy. Thus: Tommy can make Joey and Maria and Juan liable for the instr. (Sec. 66.
	Blank (Sec. 34) Indorsement by mere signature                               Sgd Juan	Makes instrument payable to bearer (Sec. 34)	May be converted to special indorsement (Sec. 35)