Libro III · Título Primero Capítulo III. De los titulos a la orden

The instruments created in favor of a determined person shall be presumed to be to order and are transmitted by endorsement and delivery of the instrument.

Any holder of an instrument to order may prevent its subsequent endorsement by an express clause, which shall have the effect that, from its date, the instrument may only be transmitted with the effects of an ordinary assignment.

The transmission of an instrument to order by a means different from the endorsement subrogates the acquirer into all the rights that the instrument confers; but it subjects him to all the exceptions that could have been asserted against the previous holders.

The endorsement must appear on the instrument itself or on a sheet attached to it, and shall meet the following requirements:

1.The name of the endorsee.

2.The class of endorsement.

3.The place and the date.

4.The signature of the endorser or of the person who signs at his request or in his name.

If, in the cases mentioned in the preceding article, the first requirement is omitted, article 387 of this Code shall apply; and if the class of endorsement is omitted, it shall be presumed that the instrument was transmitted in ownership; if the expression of the place is omitted, it shall be presumed that the endorsement was made at the domicile of the endorser; and the omission of the date shall give rise to the presumption that the endorsement was made on the day on which the endorser acquired the instrument. The lack of signature shall cause the endorsement to be considered inexistent.

The endorsement must be pure and simple. Any condition shall be deemed not to be included. The partial endorsement shall be null.

The endorsement may be made in blank, with only the signature of the endorser. In this case, any holder may complete the blank endorsement with his name or the name of a third party, or transmit the instrument without completing the endorsement. The endorsement to bearer shall produce the effects of a blank endorsement.

The endorsement may be made in ownership, for collection or by way of security.

The endorser shall assume an autonomous obligation, toward all the holders subsequent to him, but he may be released from his liability on the instrument by means of the clause, without my liability, or another equivalent, added to the endorsement.

The endorsement for collection shall be granted with the clauses: for collection, by power of attorney, for collection, or another equivalent. This endorsement shall confer on the endorsee the powers of an agent with representation to collect the instrument judicially or extrajudicially, and to endorse it for collection. The mandate that this endorsement confers does not terminate with the death or incapacity of the endorser, and its revocation shall not produce effects against third parties, except from the moment in which its cancellation is noted on the instrument or it is deemed revoked judicially.

The endorsement by way of security shall be granted with the clauses: in guarantee, in pledge, or another equivalent. It shall constitute a pledge right over the instrument and shall confer on the endorsee, in addition to his rights as pledge creditor, the powers that the endorsement for collection confers.

The pledge encumbrance of instruments does not require registration in the Property Registry.

The exceptions that could have been asserted against previous holders may not be asserted against the endorsee by way of security.

The effects of an endorsement after the maturity date are the same as those of an endorsement prior to it.

However, the endorsement after a protest for lack of payment or made after the expiration of the time limit fixed to make it produces only the effects of an ordinary assignment.

For the holder of an instrument to order to be legitimated, the chain of endorsements must be uninterrupted.

The person who pays is not obliged to ascertain the authenticity of the endorsements, nor has he the power to require that it be proven to him; but he must verify the identity of the person who presents the instrument as the last holder, and the continuity of the endorsements.

The banks that receive instruments for credit to the account of the holder who delivers them may collect those instruments even though they are not endorsed in their favor. The banks, in these cases, must note on the instrument the capacity in which they act and sign as receipt on the instrument itself or on a sheet attached to it.

The endorsements between Banks may be made with the stamp that the endorser uses for that purpose.

The negotiable instruments may be transmitted to any of the obligated parties, by receipt of the amount of the instrument written on the same document or on a sheet attached to it. The transmission by receipt shall produce the effects of an endorsement without liability.

The endorsements and the receipt annotations on a negotiable instrument that are legitimately crossed out or cancelled do not have any validity. The holder of a negotiable instrument may cross out the endorsements and receipts subsequent to the acquisition, but not those prior to it.