The Loss Of A Negotiable Instrument The Remedy System

Losing a negotiable instrument means losing a warrant to exercise the rights on a negotiable instrument as a security with imbedded options and a presentment security. So there is system of loss of a negotiable instrument in the law system in different countries. Generally speaking, the countries and regions of the civil law system adopt the system of public summons for exhortation, while the countries of common law system adopt the system of taking proceedings. And some other countries adopt the system of reporting the loss of bills and stopping the payment besides the two main systems. Our country assimilates the practice of the countries in the two main law systems. The system of reporting the loss of bills and stopping the payment, the system of public summons for exhortation and the system of taking proceedings all together constitute the system of loss of a negotiable instrument and remedies in our country.The law on negotiable instruments differs greatly from the civil and commercial law in the general theory because of its particular technical rules. In addition, the law itself is very abstract. So there are so many controversies and inaccurate prescriptions in the field of loss of a negotiable instrument and remedies. Civil procedure law of the People's Republic of China defines the loss of a negotiable instrument by means of numeration, which is neither complete nor necessary to the loss of a negotiable instrument; The People's Bank of China once ordains that other branches of the commercial banks in the same system are surrogate drawee of the banker's draft without the record of the surrogate drawee, as a result, the stopping payment inform of public summons for exhortation can't reach the surrogate drawee; There is controversy about whether the blank negotiable instruments can be applied for reporting the loss of bills and stopping the payment and public summons for exhortation. Whether the loss of a negotiable instrument beyond the prescription of negotiable instruments could be remedied in the way of loss of a negotiable instrument still need further clarification; There is also controversy about whether theloser could exercise the right of recourse after the invalidating judgement and taking proceedings judgement. The above controversies and inaccurate prescriptions cause unnecessary damage to some interested party and some difficulties of the application of the law. The supreme people's court should supervise and standardize these issues in the form of precedent in the practice of ad judgement and should clarify the issues through judicial interpretation which need further clarification.There are some deficiencies in our present law that needs amendment. According to the Civil procedure law of the People's Republic of China, the transferee of the transferred negotiable instruments shall not enjoy the rights arising out of the instruments transferred during the period of public summons for exhortation even if the negotiable instrument is transferred legally before the public summons for exhortation. If the holder of the negotiable instrument doesn't declare rights before the invalidating judgement, the negotiable instrument will be invalidated. Therefore, this adds precautionary burden of the well-meaning transferees and legal holders. These illegitimate issues mainly result from the three illogical provisions: The transfer of the negotiable instrument during the period of public summons for exhortation is null and void (none of the countries that implement the system of public summons for exhortation and remedies has such provision); The period of public summons for exhortation is relatively short and the maturity of the negotiable instrument isn't taken into account, so this can't eliminate the defect for lack of protection for the well-meaning transferees after the invalidating judgement cause the risk of the well-meaning transferring the invalidated negotiable instruments; The publicity and influence of the notice for the public summons for exhortation is limited. The range of the object...