Bona Fide Gain Of Rights Associated With The Negotiable Instrument

The negotiation of instruments is the soul of the commercial instrument law. Forimproving the negotiation of instruments, the commercial law has specific rules tosecure the rights of assignees. The bona fide gain system as an important way toprotect safety of business and the rights of assignees has been regulated by the lawsall around the world. The Article12of The Commercial Law of our country has anopposite rule of bona fide gain system, but it is too general therefore can not adapt tothe complicated market. This paper studies the fide gain system from thejurisprudence and comparative law angles. This paper has four main parts; the firstpart is a general introduction of the boon fide acquisition of instrumental rights. Itintroduces the content, theory basis, property and legislation models of other countries.The second part starts from the specificity of boon fide acquisition and compare itwith the goodwill acquisition system of movables and the counterplea limitationsystem of bill. The third part introduces the composition elements of the boon fideacquisition of instrumental rights including six parts:(1) the immediate prior of thesubsequent party is non-entitled party.(2) The transferor is legal holder and actualtransferor in form.(3) The assignee has goodwill and no gross negligence.(4) Theassignee gets the rights of the bill by the way regulated by the Commercial Law.(5)The bill got though the bona fide acquisition system needs to be negotiable instrument.(6) The assignee pay the reasonable consideration. The fourth part introduces the legal effect of the boon fide acquisition of instrumental rights. The bill right gets by theassignee through boon fide acquisition system is original acquisition. The originalright holder loses the right of the bill and cannot ask the assignee to return the bill.Whether he should take the responsibility of the bill depends on if the signature on thebill is a real one. Boon fide acquisition of instrumental rights is a sacrifice for the rightof the original right holder and the negotiation the bill when the rights of the originalright holder and the bona fide transferee have conflicts. For the balance and justice ofthe legal system, the law also has some rules to help the loser. Whether theunauthorized disposal person should take the responsibility also depends on if there isreal signature on the bill. The unauthorized disposal person also should take the civilresponsibility of the damage of the original right holder.