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Abstract

The holder of overdue bonds, upon advice from her financial adviser, destroyed the bonds under the belief that they were valueless. Ten years later the bonds were included in a reorganization plan and became valuable. The holder sued to recover the value of the bonds. Held: voluntary destruction of the bonds canceled and discharged the bonds under the Negotiable Instruments Law and also the obligation thereon; thus, recovery denied.

An analysis of this case requires that it be determined whether voluntary destruction of an instrument constitutes a mode of cancellation under sections 119 and 123 of the N.I.L., so as to discharge the obligation.

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