Notes Ex Judgments Legal Effect

The report of the loss and the stop payment of negotiable instrument, public summons for exhortation and common action are the 3 remedies of the loss of negotiable instrument.The various countries of Continental Law System usually apply for the system of public summons for exhortation. Therefore, the Anglo-American Law System countries adopt the system of common action. The relevant laws of the People's Republic of China stipulated the above 3 remedies all. The invalidating judgment is one of the above 3 remedies - the applicant would apply to the court after the termination of the procedure for public summons exhortation. Then the court would enter a judgment of invalidating the negotiable instrument's right attached on the original one. The judgment would have either positive or negative legal effect on different parties of the negotiable instrument. Meanwhile, since the invalidating judgment cancels the right of the negotiable instrument from its original entity; it triggers the legal conflicts between the invalidating judgment and the bona fide assignees. In addition, there is the possibility of recalling an invalidating judgment under some kind of condition. The above conflicts and the possibility of recalling both have the crucial influence on the determination of the legal effect regarding invalidating judgment. However, due to the uncertain effect of the invalidating judgment, as Chinese primary subject in the negotiable instrument market, the banks need to prevent and solve the related risks while they are dealing the business related with invalidating judgment on negotiable instrument. Based on the essential content of the legal effect concerning invalidating judgment, this paper applied for the several methods such as the comparison between China and other foreign countries laws, as well as the interest measurement, made an in-depth analysis on the positive and negative legal effect regarding invalidating judgment, the conflict between the invalidating judgment and the bona fide possession of negotiable instrument, the recall of invalidating judgment, etc. At the same time, this paper also concluded the problems existing in Chinese public summons for exhortation business by combining its current laws and regulations. Using the experience of German, Japan, China Taiwan and other countries' related laws for reference, this paper proposed the improvement suggestions on Chinese public summons for exhortation and invalidating judgment ranging from the legal system to the bank business, etc.This paper is composed of 4 chapters; the details are as the follows:The 1st chapter is "The summary of the legal effect on invalidating judgment regarding negotiable instrument". It mainly illustrated the basic content of the legal effect of invalidating judgment, including its originating conditions, characters and categories on the legal effect, etc. The public summons for exhortation is the pre-requisite procedure of invalidating judgment, while the application submitted by the public summons applicant is another condition to engender the invalidating judgment. Its characters include the proceeding, the unity and un-appeal, etc. According to the different parties of the negotiable instrument, the invalidating judgment would result in different legal effects which could be divided into positive effect and negative effect based on the difference of effect nature. To the applicant, it is the positive effect to regain the right of negotiable instrument. But to the instrument's holder, in another word, the non- applicant, it is the negative effect to lose the right of negotiable instrument. Then this paper made the comparison and the analysis on the legal effect between invalidating judgment and the common action, pointing out the problems arising from the concurrence of the public summons for exhortation and common action, the remedies of Chinese's loss of negotiable instrument. Since these 2 remedies are produced on different basic theories, thus the common action is not applicable to be the remedy of Chinese's loss of negotiable instrument no matter from its basic theory or the judicial business.The 2^nd chapter is "The relationship between the legal effect of the invalidating judgment and the bona fide possession of the negotiable instrument". It discussed the concept, essence and constitutive requirements of the bona fide possession concerning the negotiable instrument. The bona fide possession of the negotiable instrument means no matter how the negotiable instrument was lost, as long as the assignee (holder) of the instrument complies with the assignment method regulated by the Law of the "People's Republic of China on Negotiable Instruments", with good faith and without gross negligence, obtains the integrity form negotiable instrument regulated by the Law of the "People's Republic of China on Negotiable Instruments" from the person without title, the assignee would acquire the right of the negotiable instrument. Its essence is the acquisition of the assets claim and the remedy of the defect right of the negotiable instrument. Its constitutive requirements include the substantial requirements such as the bona fide and without gross negligence, and the formal requirements such as the continuity of endorsement, etc. The paper made the comparison of the legal effects between the invalidating judgment and the bona fide possession, as well as discussed the solution of the conflict caused by the four different phases during the term of public summons for exhortation. Finally the paper proposed to affirm the right of priority of the bona fide possession regarding the negotiable instrument during the conflict in order to protect the bona fide assignee's interests.The 3^rd chapter is "The study of Chinese instrument's invalidating judgment business issues". Firstly the paper took the bank instrument's cases as the analytic object to discuss the problems caused by banks' dealt with the instrument's invalidating judgment and its cancellation. Secondly, the paper explored the relevant business issues on public summons for exhortation procedure and the invalidating judgment, including the term of public notice of public summons for exhortation, and the application of the blank instrument in the invalidating judgment, etc. Last the paper discussed the cancellation of the invalidating judgment system, with the further discussion of the retroaction and the conditions of the cancellation of the invalidating judgment.The 4^th chapter is "The suggestion on how to improve Chinese public summons for exhortation and invalidating judgment system". The paper submitted the personal suggestions on improving the systems of public summons for exhortation and invalidating judgment applied in the Law of the People's Republic of China on Negotiable Instrument and Civil Procedure Law of the People's Republic of China, as well as other laws. As far as the public summons for exhortation is concerned, the suggestions are composed of the verification of the commencement date of the public notice, the wisely arrangement of the term of the public notice, the delete of the relevant regulations that the instrument would be void if transferred during the term of the public summons for exhortation, the enlargement of the ranges of the applicable instruments, the solutions to solve the problems caused by the concurrence of 2 systems: the invalidating judgment and the common action. Combining with the personal professional experience, the paper proposed the suggestions on the banks that how to prevent the possible risks arising from the instrument's invalidating judgment.