By: Armbrister S.B. No. 1297
A BILL TO BE ENTITLED
AN ACT
1-1 relating to negotiable instruments.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 1.207, Business & Commerce Code, is
1-4 amended to read as follows:
1-5 Sec. 1.207. Performance or Acceptance Under Reservation of
1-6 Rights. (a) A party who, with explicit reservation of rights,
1-7 performs or promises performance or assents to performance in a
1-8 manner demanded or offered by the other party does not thereby
1-9 prejudice the rights reserved. Such words as "without prejudice",
1-10 "under protest" or the like are sufficient.
1-11 (b) Subsection (a) does not apply to an accord and
1-12 satisfaction.
1-13 SECTION 2. Subsections (a) and (b), Section 3.102, Business
1-14 & Commerce Code, are amended to read as follows:
1-15 (a) In this chapter unless the context otherwise requires
1-16 (1) "Issue" means the first delivery of an instrument
1-17 to a holder or a remitter.
1-18 (2) An "order" is a written direction to pay and must
1-19 be more than an authorization or request. It must identify the
1-20 person to pay with reasonable certainty. It may be addressed to
1-21 one or more such persons jointly or in the alternative but not in
1-22 succession.
1-23 (3) A "promise" is a written <an> undertaking to pay
1-24 and must be more than an acknowledgment of an obligation.
2-1 (4) "Secondary party" means a drawer or indorser.
2-2 <(5) "Instrument" means a negotiable instrument.>
2-3 (b) Other definitions applying to this chapter and the
2-4 sections in which they appear are:
2-5 "Acceptance". Section 3.410.
2-6 "Accommodation party". Section 3.415.
2-7 "Alteration". Section 3.407.
2-8 "Cashier's check". Section 3.104.
2-9 "Certificate of deposit". Section 3.104.
2-10 "Certification". Section 3.411.
2-11 "Check". Section 3.104.
2-12 "Definite time". Section 3.109.
2-13 "Dishonor". Section 3.507.
2-14 "Draft". Section 3.104.
2-15 "Holder in due course". Section 3.302.
2-16 "Instrument". Section 3.104.
2-17 "Negotiable instrument". Section 3.104.
2-18 "Negotiation". Section 3.202.
2-19 "Note". Section 3.104.
2-20 "Notice of dishonor". Section 3.508.
2-21 "On demand". Section 3.108.
2-22 "Presentment". Section 3.504.
2-23 "Protest". Section 3.509.
2-24 "Restrictive Indorsement". Section 3.205.
2-25 "Signature". Section 3.401.
2-26 "Teller's check". Section 3.104.
2-27 "Traveler's check". Section 3.104.
3-1 SECTION 3. Section 3.104, Business & Commerce Code, is
3-2 amended to read as follows:
3-3 Sec. 3.104. <FORM OF> NEGOTIABLE INSTRUMENT <INSTRUMENTS;
3-4 "DRAFT"; "CHECK"; "CERTIFICATE OF DEPOSIT"; "NOTE">. (a) Except
3-5 as provided by Subsections (c) and (d), "negotiable instrument"
3-6 means an unconditional promise or order to pay a fixed amount of
3-7 money, with or without interest or other charges described in the
3-8 promise or order, if it: <Any writing to be a negotiable instrument
3-9 within this chapter must>
3-10 (1) is payable to bearer or to order at the time it is
3-11 issued or first comes into possession of a holder <be signed by the
3-12 maker or drawer>; <and>
3-13 (2) is payable on demand or at a definite time
3-14 <contain an unconditional promise or order to pay a sum certain in
3-15 money and no other promise, order, obligation or power given by the
3-16 maker or drawer except as authorized by this chapter>; and
3-17 (3) does not state any other undertaking or
3-18 instruction by the person promising or ordering payment to do any
3-19 act in addition to the payment of money, but the promise or order
3-20 may contain:
3-21 (A) an undertaking or power to give, maintain,
3-22 or protect collateral to secure payment;
3-23 (B) an authorization or power to the holder to
3-24 confess judgment or realize on or dispose of collateral; or
3-25 (C) a waiver of the benefit of any law intended
3-26 for the advantage or protection of an obligor <be payable on demand
3-27 or at a definite time; and>
4-1 <(4) be payable to order or to bearer>.
4-2 (b) "Instrument" means a negotiable instrument.
4-3 (c) An order that meets all of the requirements of
4-4 Subsection (a), other than Subdivision (1), and otherwise falls
4-5 within the definition of "check" in Subsection (f) is a negotiable
4-6 instrument and a check.
4-7 (d) A promise or order other than a check is not an
4-8 instrument if, at the time it is issued or first comes into
4-9 possession of a holder, it contains a conspicuous statement,
4-10 however expressed, to the effect that the promise or order is not
4-11 negotiable or is not an instrument governed by this chapter.
4-12 (e) An instrument is a "note" if it is a promise and is a
4-13 "draft" if it is an order. If an instrument falls within the
4-14 definition of both "note" and "draft," a person entitled to enforce
4-15 the instrument may treat it as either.
4-16 (f) "Check" means (i) a draft, other than a documentary
4-17 draft, payable on demand and drawn on a bank or (ii) a cashier's
4-18 check or teller's check. An instrument may be a check even though
4-19 it is described on its face by another term, such as "money order."
4-20 (g) "Cashier's check" means a draft with respect to which
4-21 the drawer and drawee are the same bank or branches of the same
4-22 bank.
4-23 (h) "Teller's check" means a draft drawn by a bank:
4-24 (1) on another bank; or
4-25 (2) payable at or through a bank.
4-26 (i) "Traveler's check" means an instrument that:
4-27 (1) is payable on demand;
5-1 (2) is drawn on or payable at or through a bank;
5-2 (3) is designated by the term "traveler's check" or by
5-3 a substantially similar term; and
5-4 (4) requires, as a condition to payment, a
5-5 countersignature by a person whose specimen signature appears on
5-6 the instrument.
5-7 (j) "Certificate of deposit" means an instrument containing
5-8 an acknowledgment by a bank that a sum of money has been received
5-9 by the bank and a promise by the bank to repay the sum of money. A
5-10 certificate of deposit is a note of the bank. <A writing which
5-11 complies with the requirements of this section is>
5-12 <(1) a "draft" ("bill of exchange") if it is an order;>
5-13 <(2) a "check" if it is a draft drawn on a bank and
5-14 payable on demand;>
5-15 <(3) a "certificate of deposit" if it is an
5-16 acknowledgment by a bank of receipt of money with an engagement to
5-17 repay it;>
5-18 <(4) a "note" if it is a promise other than a
5-19 certificate of deposit.>
5-20 <(c) As used in other chapters of this title, and as the
5-21 context may require, the terms "draft", "check", "certificate of
5-22 deposit" and "note" may refer to instruments which are not
5-23 negotiable within this chapter as well as to instruments which are
5-24 so negotiable.>
5-25 SECTION 4. Subchapter A, Chapter 3, Business & Commerce
5-26 Code, is amended by adding Section 3.123 to read as follows:
5-27 Sec. 3.123. INTEREST. (a) Unless otherwise provided in the
6-1 instrument:
6-2 (1) an instrument is not payable with interest; and
6-3 (2) interest on an interest-bearing instrument is
6-4 payable from the date of the instrument.
6-5 (b) Interest may be stated in an instrument as a fixed or
6-6 variable amount of money or it may be expressed as a fixed or
6-7 variable rate or rates. The amount or rate of interest may be
6-8 stated or described in the instrument in any manner and may require
6-9 reference to information not contained in the instrument. If an
6-10 instrument provides for interest, but the amount of interest
6-11 payable cannot be ascertained from the description, interest is
6-12 payable at the judgment rate in effect at the place of payment of
6-13 the instrument and at the time interest first accrues.
6-14 SECTION 5. Subchapter C, Chapter 3, Business & Commerce
6-15 Code, is amended by adding Section 3.311 to read as follows:
6-16 Sec. 3.311. ACCORD AND SATISFACTION BY USE OF INSTRUMENT.
6-17 (a) This section applies only if a person against whom a claim is
6-18 asserted proves that:
6-19 (1) the person in good faith tendered an instrument to
6-20 the claimant as full satisfaction of the claim;
6-21 (2) the amount of the claim was unliquidated or
6-22 subject to a bona fide dispute; and
6-23 (3) the claimant obtained payment of the instrument.
6-24 (b) Except as provided by Subsection (c), the claim is
6-25 discharged if the person against whom the claim is asserted proves
6-26 that the instrument or an accompanying written communication
6-27 contained a conspicuous statement to the effect that the instrument
7-1 was tendered as full satisfaction of the claim.
7-2 (c) Subject to Subsection (d), a claim is not discharged
7-3 under Subsection (b) if either of the following applies:
7-4 (1) The claimant, if an organization, proves that:
7-5 (A) within a reasonable time before the tender,
7-6 the claimant sent a conspicuous statement to the person against
7-7 whom the claim is asserted that communications concerning disputed
7-8 debts, including an instrument tendered as full satisfaction of a
7-9 debt, are to be sent to a designated person, office, or place; and
7-10 (B) the instrument or accompanying communication
7-11 was not received by that designated person, office, or place.
7-12 (2) The claimant, whether or not an organization,
7-13 proves that within 90 days after payment of the instrument the
7-14 claimant tendered repayment of the amount of the instrument to the
7-15 person against whom the claim is asserted. This subdivision does
7-16 not apply if the claimant is an organization that sent a statement
7-17 complying with Subdivision (1)(A).
7-18 (d) Subsection (c) is not applicable if the person against
7-19 whom the claim is asserted proves that within a reasonable time
7-20 before collection of the instrument was initiated, the claimant, or
7-21 an agent of the claimant having direct responsibility with respect
7-22 to the disputed obligation, knew that the instrument was tendered
7-23 in full satisfaction of the claim.
7-24 SECTION 6. Section 3.805, Business & Commerce Code, is
7-25 amended to read as follows:
7-26 Sec. 3.805. Instruments Not Payable to Order or to Bearer.
7-27 This chapter applies to any instrument whose terms do not preclude
8-1 transfer and which is otherwise negotiable within this chapter but
8-2 which is not payable to order or to bearer, except that there can
8-3 be no holder in due course of such an instrument other than a check
8-4 falling within the provisions of Section 3.104(c).
8-5 SECTION 7. The importance of this legislation and the
8-6 crowded condition of the calendars in both houses create an
8-7 emergency and an imperative public necessity that the
8-8 constitutional rule requiring bills to be read on three several
8-9 days in each house be suspended, and this rule is hereby suspended,
8-10 and that this Act take effect and be in force from and after its
8-11 passage, and it is so enacted.