By: Armbrister S.B. No. 1297
73R4038 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to negotiable instruments.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.207, Business & Commerce Code, is
1-5 amended to read as follows:
1-6 Sec. 1.207. Performance or Acceptance Under Reservation of
1-7 Rights. (a) A party who, with explicit reservation of rights,
1-8 performs or promises performance or assents to performance in a
1-9 manner demanded or offered by the other party does not thereby
1-10 prejudice the rights reserved. Such words as "without prejudice",
1-11 "under protest" or the like are sufficient.
1-12 (b) Subsection (a) does not apply to an accord and
1-13 satisfaction.
1-14 SECTION 2. Subsections (a) and (b), Section 3.102, Business
1-15 & Commerce Code, are amended to read as follows:
1-16 (a) In this chapter unless the context otherwise requires
1-17 (1) "Issue" means the first delivery of an instrument
1-18 to a holder or a remitter.
1-19 (2) An "order" is a written direction to pay and must
1-20 be more than an authorization or request. It must identify the
1-21 person to pay with reasonable certainty. It may be addressed to
1-22 one or more such persons jointly or in the alternative but not in
1-23 succession.
1-24 (3) A "promise" is a written <an> undertaking to pay
2-1 and must be more than an acknowledgment of an obligation.
2-2 (4) "Secondary party" means a drawer or indorser.
2-3 <(5) "Instrument" means a negotiable instrument.>
2-4 (b) Other definitions applying to this chapter and the
2-5 sections in which they appear are:
2-6 "Acceptance". Section 3.410.
2-7 "Accommodation party". Section 3.415.
2-8 "Alteration". Section 3.407.
2-9 "Cashier's check". Section 3.104.
2-10 "Certificate of deposit". Section 3.104.
2-11 "Certification". Section 3.411.
2-12 "Check". Section 3.104.
2-13 "Definite time". Section 3.109.
2-14 "Dishonor". Section 3.507.
2-15 "Draft". Section 3.104.
2-16 "Holder in due course". Section 3.302.
2-17 "Instrument". Section 3.104.
2-18 "Negotiable Instrument". Section 3.104.
2-19 "Negotiation". Section 3.202.
2-20 "Note". Section 3.104.
2-21 "Notice of dishonor". Section 3.508.
2-22 "On demand". Section 3.108.
2-23 "Presentment". Section 3.504.
2-24 "Protest". Section 3.509.
2-25 "Restrictive Indorsement". Section 3.205.
2-26 "Signature". Section 3.401.
2-27 "Teller's check". Section 3.104.
3-1 "Traveler's check". Section 3.104.
3-2 SECTION 3. Section 3.104, Business & Commerce Code, is
3-3 amended to read as follows:
3-4 Sec. 3.104. <FORM OF> NEGOTIABLE INSTRUMENT <INSTRUMENTS;
3-5 "DRAFT"; "CHECK"; "CERTIFICATE OF DEPOSIT"; "NOTE">. (a) Except
3-6 as provided by Subsections (c) and (d), "negotiable instrument"
3-7 means an unconditional promise or order to pay a fixed amount of
3-8 money, with or without interest or other charges described in the
3-9 promise or order, if it: <Any writing to be a negotiable instrument
3-10 within this chapter must>
3-11 (1) is payable to bearer or to order at the time it is
3-12 issued or first comes into possession of a holder <be signed by the
3-13 maker or drawer>; <and>
3-14 (2) is payable on demand or at a definite time
3-15 <contain an unconditional promise or order to pay a sum certain in
3-16 money and no other promise, order, obligation or power given by the
3-17 maker or drawer except as authorized by this chapter>; and
3-18 (3) does not state any other undertaking or
3-19 instruction by the person promising or ordering payment to do any
3-20 act in addition to the payment of money, but the promise or order
3-21 may contain:
3-22 (A) an undertaking or power to give, maintain,
3-23 or protect collateral to secure payment;
3-24 (B) an authorization or power to the holder to
3-25 confess judgment or realize on or dispose of collateral; or
3-26 (C) a waiver of the benefit of any law intended
3-27 for the advantage or protection of an obligor <be payable on demand
4-1 or at a definite time; and>
4-2 <(4) be payable to order or to bearer>.
4-3 (b) "Instrument" means a negotiable instrument.
4-4 (c) An order that meets all of the requirements of
4-5 Subsection (a), other than Subdivision (1), and otherwise falls
4-6 within the definition of "check" in Subsection (f) is a negotiable
4-7 instrument and a check.
4-8 (d) A promise or order other than a check is not an
4-9 instrument if, at the time it is issued or first comes into
4-10 possession of a holder, it contains a conspicuous statement,
4-11 however expressed, to the effect that the promise or order is not
4-12 negotiable or is not an instrument governed by this chapter.
4-13 (e) An instrument is a "note" if it is a promise and is a
4-14 "draft" if it is an order. If an instrument falls within the
4-15 definition of both "note" and "draft," a person entitled to enforce
4-16 the instrument may treat it as either.
4-17 (f) "Check" means (i) a draft, other than a documentary
4-18 draft, payable on demand and drawn on a bank or (ii) a cashier's
4-19 check or teller's check. An instrument may be a check even though
4-20 it is described on its face by another term, such as "money order."
4-21 (g) "Cashier's check" means a draft with respect to which
4-22 the drawer and drawee are the same bank or branches of the same
4-23 bank.
4-24 (h) "Teller's check" means a draft drawn by a bank:
4-25 (1) on another bank; or
4-26 (2) payable at or through a bank.
4-27 (i) "Traveler's check" means an instrument that:
5-1 (1) is payable on demand;
5-2 (2) is drawn on or payable at or through a bank;
5-3 (3) is designated by the term "traveler's check" or by
5-4 a substantially similar term; and
5-5 (4) requires, as a condition to payment, a
5-6 countersignature by a person whose specimen signature appears on
5-7 the instrument.
5-8 (j) "Certificate of deposit" means an instrument containing
5-9 an acknowledgment by a bank that a sum of money has been received
5-10 by the bank and a promise by the bank to repay the sum of money. A
5-11 certificate of deposit is a note of the bank. <A writing which
5-12 complies with the requirements of this section is>
5-13 <(1) a "draft" ("bill of exchange") if it is an order;>
5-14 <(2) a "check" if it is a draft drawn on a bank and
5-15 payable on demand;>
5-16 <(3) a "certificate of deposit" if it is an
5-17 acknowledgment by a bank of receipt of money with an engagement to
5-18 repay it;>
5-19 <(4) a "note" if it is a promise other than a
5-20 certificate of deposit.>
5-21 <(c) As used in other chapters of this title, and as the
5-22 context may require, the terms "draft", "check", "certificate of
5-23 deposit" and "note" may refer to instruments which are not
5-24 negotiable within this chapter as well as to instruments which are
5-25 so negotiable.>
5-26 SECTION 4. Subchapter A, Chapter 3, Business & Commerce
5-27 Code, is amended by adding Section 3.123 to read as follows:
6-1 Sec. 3.123. INTEREST. (a) Unless otherwise provided in the
6-2 instrument:
6-3 (1) an instrument is not payable with interest; and
6-4 (2) interest on an interest-bearing instrument is
6-5 payable from the date of the instrument.
6-6 (b) Interest may be stated in an instrument as a fixed or
6-7 variable amount of money or it may be expressed as a fixed or
6-8 variable rate or rates. The amount or rate of interest may be
6-9 stated or described in the instrument in any manner and may require
6-10 reference to information not contained in the instrument. If an
6-11 instrument provides for interest, but the amount of interest
6-12 payable cannot be ascertained from the description, interest is
6-13 payable at the judgment rate in effect at the place of payment of
6-14 the instrument and at the time interest first accrues.
6-15 SECTION 5. Subchapter C, Chapter 3, Business & Commerce
6-16 Code, is amended by adding Section 3.311 to read as follows:
6-17 Sec. 3.311. ACCORD AND SATISFACTION BY USE OF INSTRUMENT.
6-18 (a) This section applies only if a person against whom a claim is
6-19 asserted proves that:
6-20 (1) the person in good faith tendered an instrument to
6-21 the claimant as full satisfaction of the claim;
6-22 (2) the amount of the claim was unliquidated or
6-23 subject to a bona fide dispute; and
6-24 (3) the claimant obtained payment of the instrument.
6-25 (b) Except as provided by Subsection (c), the claim is
6-26 discharged if the person against whom the claim is asserted proves
6-27 that the instrument or an accompanying written communication
7-1 contained a conspicuous statement to the effect that the instrument
7-2 was tendered as full satisfaction of the claim.
7-3 (c) Subject to Subsection (d), a claim is not discharged
7-4 under Subsection (b) if either of the following applies:
7-5 (1) The claimant, if an organization, proves that:
7-6 (A) within a reasonable time before the tender,
7-7 the claimant sent a conspicuous statement to the person against
7-8 whom the claim is asserted that communications concerning disputed
7-9 debts, including an instrument tendered as full satisfaction of a
7-10 debt, are to be sent to a designated person, office, or place; and
7-11 (B) the instrument or accompanying communication
7-12 was not received by that designated person, office, or place.
7-13 (2) The claimant, whether or not an organization,
7-14 proves that within 90 days after payment of the instrument the
7-15 claimant tendered repayment of the amount of the instrument to the
7-16 person against whom the claim is asserted. This subdivision does
7-17 not apply if the claimant is an organization that sent a statement
7-18 complying with Subdivision (1)(A).
7-19 (d) Subsection (c) is not applicable if the person against
7-20 whom the claim is asserted proves that within a reasonable time
7-21 before collection of the instrument was initiated, the claimant, or
7-22 an agent of the claimant having direct responsibility with respect
7-23 to the disputed obligation, knew that the instrument was tendered
7-24 in full satisfaction of the claim.
7-25 SECTION 6. Section 3.805, Business & Commerce Code, is
7-26 amended to read as follows:
7-27 Sec. 3.805. Instruments Not Payable to Order or to Bearer.
8-1 This chapter applies to any instrument whose terms do not preclude
8-2 transfer and which is otherwise negotiable within this chapter but
8-3 which is not payable to order or to bearer, except that there can
8-4 be no holder in due course of such an instrument other than a check
8-5 falling within the provisions of Section 3.104(c).
8-6 SECTION 7. The importance of this legislation and the
8-7 crowded condition of the calendars in both houses create an
8-8 emergency and an imperative public necessity that the
8-9 constitutional rule requiring bills to be read on three several
8-10 days in each house be suspended, and this rule is hereby suspended,
8-11 and that this Act take effect and be in force from and after its
8-12 passage, and it is so enacted.