ACT NO.

2031 (a) An indication of a particular fund out of which reimbursement is to be

made or a particular account to be debited with the amount; or
February 03, 1911
(b) A statement of the transaction which gives rise to the instrument.
THE NEGOTIABLE INSTRUMENTS LAW
But an order or promise to pay out of a particular fund is not
I. FORM AND INTERPRETATION
unconditional.chan robles virtual law library
Section 1. Form of negotiable instruments. - An instrument to be negotiable
Sec. 4. Determinable future time; what constitutes. - An instrument is payable
must conform to the following requirements:chanroblesvirtuallawlibrary
at a determinable future time, within the meaning of this Act, which is
(a) It must be in writing and signed by the maker or drawer; expressed to be payable:chanroblesvirtuallawlibrary

(b) Must contain an unconditional promise or order to pay a sum certain in (a) At a fixed period after date or sight; or
money;
(b) On or before a fixed or determinable future time specified therein; or
(c) Must be payable on demand, or at a fixed or determinable future time;
(c) On or at a fixed period after the occurrence of a specified event which is
(d) Must be payable to order or to bearer; and certain to happen, though the time of happening be uncertain.

(e) Where the instrument is addressed to a drawee, he must be named or An instrument payable upon a contingency is not negotiable, and the
otherwise indicated therein with reasonable certainty. happening of the event does not cure the defect.

Sec. 2. What constitutes certainty as to sum. - The sum payable is a sum Sec. 5. Additional provisions not affecting negotiability. - An instrument which
certain within the meaning of this Act, although it is to be contains an order or promise to do any act in addition to the payment of
paid:chanroblesvirtuallawlibrary money is not negotiable. But the negotiable character of an instrument
otherwise negotiable is not affected by a provision
(a) with interest; or which:chanroblesvirtuallawlibrary
(b) by stated installments; or (a) authorizes the sale of collateral securities in case the instrument be not
(c) by stated installments, with a provision that, upon default in payment of paid at maturity; or
any installment or of interest, the whole shall become due; or (b) authorizes a confession of judgment if the instrument be not paid at
(d) with exchange, whether at a fixed rate or at the current rate; or maturity; or

(e) with costs of collection or an attorney's fee, in case payment shall not be (c) waives the benefit of any law intended for the advantage or protection of
made at maturity. the obligor; or

Sec. 3. When promise is unconditional. - An unqualified order or promise to (d) gives the holder an election to require something to be done in lieu of
pay is unconditional within the meaning of this Act though coupled payment of money.
with:chanroblesvirtuallawlibrary But nothing in this section shall validate any provision or stipulation otherwise
illegal.
Sec. 6. Omissions; seal; particular money. - The validity and negotiable (e) One or some of several payees; or
character of an instrument are not affected by the fact
(f) The holder of an office for the time being.
that:chanroblesvirtuallawlibrary
Where the instrument is payable to order, the payee must be named or
(a) it is not dated; or
otherwise indicated therein with reasonable certainty.
(b) does not specify the value given, or that any value had been given
Sec. 9. When payable to bearer. - The instrument is payable to
therefor; or
bearer:chanroblesvirtuallawlibrary
(c) does not specify the place where it is drawn or the place where it is
payable; or (a) When it is expressed to be so payable; or
(d) bears a seal; or (b) When it is payable to a person named therein or bearer; or
(e) designates a particular kind of current money in which payment is to be (c) When it is payable to the order of a fictitious or non-existing person, and
made. such fact was known to the person making it so payable; or
But nothing in this section shall alter or repeal any statute requiring in certain (d) When the name of the payee does not purport to be the name of any
cases the nature of the consideration to be stated in the instrument.
person; or
Sec. 7. When payable on demand. - An instrument is payable on
(e) When the only or last indorsement is an indorsement in blank.
demand:chanroblesvirtuallawlibrary
Sec. 10. Terms, when sufficient. - The instrument need not follow the
(a) When it is so expressed to be payable on demand, or at sight, or on language of this Act, but any terms are sufficient which clearly indicate an
presentation; or intention to conform to the requirements hereof.
(b) In which no time for payment is expressed. Sec. 11. Date, presumption as to. - Where the instrument or an acceptance or
any indorsement thereon is dated, such date is deemed prima facie to be the
Where an instrument is issued, accepted, or indorsed when overdue, it is, as
true date of the making, drawing, acceptance, or indorsement, as the case
regards the person so issuing, accepting, or indorsing it, payable on demand.
may be. chanrobles law
Sec. 8. When payable to order. - The instrument is payable to order where it
Sec. 12. Ante-dated and post-dated. - The instrument is not invalid for the
is drawn payable to the order of a specified person or to him or his order. It
reason only that it is ante-dated or post-dated, provided this is not done for an
may be drawn payable to the order of:chanroblesvirtuallawlibrary
illegal or fraudulent purpose. The person to whom an instrument so dated is
(a) A payee who is not maker, drawer, or drawee; or delivered acquires the title thereto as of the date of delivery.
(b) The drawer or maker; or Sec. 13. When date may be inserted. - Where an instrument expressed to be
payable at a fixed period after date is issued undated, or where the
(c) The drawee; or
acceptance of an instrument payable at a fixed period after sight is undated,
(d) Two or more payees jointly; or any holder may insert therein the true date of issue or acceptance, and the
instrument shall be payable accordingly. The insertion of a wrong date does Sec. 17. Construction where instrument is ambiguous. - Where the language
not avoid the instrument in the hands of a subsequent holder in due course; of the instrument is ambiguous or there are omissions therein, the following
but as to him, the date so inserted is to be regarded as the true date. rules of construction apply:chanroblesvirtuallawlibrary
Sec. 14. Blanks; when may be filled. - Where the instrument is wanting in any (a) Where the sum payable is expressed in words and also in figures and
material particular, the person in possession thereof has a prima facie there is a discrepancy between the two, the sum denoted by the words is the
authority to complete it by filling up the blanks therein. And a signature on a sum payable; but if the words are ambiguous or uncertain, reference may be
blank paper delivered by the person making the signature in order that the had to the figures to fix the amount;
paper may be converted into a negotiable instrument operates as a prima
(b) Where the instrument provides for the payment of interest, without
facie authority to fill it up as such for any amount. In order, however, that any
specifying the date from which interest is to run, the interest runs from the
such instrument when completed may be enforced against any person who
date of the instrument, and if the instrument is undated, from the issue
became a party thereto prior to its completion, it must be filled up strictly in
thereof;
accordance with the authority given and within a reasonable time. But if any
such instrument, after completion, is negotiated to a holder in due course, it is (c) Where the instrument is not dated, it will be considered to be dated as of
valid and effectual for all purposes in his hands, and he may enforce it as if it the time it was issued;
had been filled up strictly in accordance with the authority given and within a
reasonable time. (d) Where there is a conflict between the written and printed provisions of the
instrument, the written provisions prevail;
Sec. 15. Incomplete instrument not delivered. - Where an incomplete
instrument has not been delivered, it will not, if completed and negotiated (e) Where the instrument is so ambiguous that there is doubt whether it is a
without authority, be a valid contract in the hands of any holder, as against bill or note, the holder may treat it as either at his election;
any person whose signature was placed thereon before delivery. (f) Where a signature is so placed upon the instrument that it is not clear in
Sec. 16. Delivery; when effectual; when presumed. - Every contract on a what capacity the person making the same intended to sign, he is to be
negotiable instrument is incomplete and revocable until delivery of the deemed an indorser;
instrument for the purpose of giving effect thereto. As between immediate (g) Where an instrument containing the word "I promise to pay" is signed by
parties and as regards a remote party other than a holder in due course, the two or more persons, they are deemed to be jointly and severally liable
delivery, in order to be effectual, must be made either by or under the thereon.
authority of the party making, drawing, accepting, or indorsing, as the case
may be; and, in such case, the delivery may be shown to have been Sec. 18. Liability of person signing in trade or assumed name. - No person is
conditional, or for a special purpose only, and not for the purpose of liable on the instrument whose signature does not appear thereon, except as
transferring the property in the instrument. But where the instrument is in the herein otherwise expressly provided. But one who signs in a trade or
hands of a holder in due course, a valid delivery thereof by all parties prior to assumed name will be liable to the same extent as if he had signed in his own
him so as to make them liable to him is conclusively presumed. And where name.
the instrument is no longer in the possession of a party whose signature
appears thereon, a valid and intentional delivery by him is presumed until the
contrary is proved.
Sec. 19. Signature by agent; authority; how shown. - The signature of any value; and is deemed such whether the instrument is payable on demand or
party may be made by a duly authorized agent. No particular form of at a future time.
appointment is necessary for this purpose; and the authority of the agent may
Sec. 26. What constitutes holder for value. - Where value has at any time
be established as in other cases of agency.
been given for the instrument, the holder is deemed a holder for value in
Sec. 20. Liability of person signing as agent, and so forth. - Where the respect to all parties who become such prior to that time.
instrument contains or a person adds to his signature words indicating that he
Sec. 27. When lien on instrument constitutes holder for value. — Where the
signs for or on behalf of a principal or in a representative capacity, he is not
holder has a lien on the instrument arising either from contract or by
liable on the instrument if he was duly authorized; but the mere addition of
implication of law, he is deemed a holder for value to the extent of his lien.
words describing him as an agent, or as filling a representative character,
without disclosing his principal, does not exempt him from personal liability. Sec. 28. Effect of want of consideration. - Absence or failure of consideration
is a matter of defense as against any person not a holder in due course; and
Sec. 21. Signature by procuration; effect of. - A signature by "procuration"
partial failure of consideration is a defense pro tanto, whether the failure is an
operates as notice that the agent has but a limited authority to sign, and the
ascertained and liquidated amount or otherwise.
principal is bound only in case the agent in so signing acted within the actual
limits of his authority. Sec. 29. Liability of accommodation party. - An accommodation party is one
who has signed the instrument as maker, drawer, acceptor, or indorser,
Sec. 22. Effect of indorsement by infant or corporation.- The indorsement or
without receiving value therefor, and for the purpose of lending his name to
assignment of the instrument by a corporation or by an infant passes the
some other person. Such a person is liable on the instrument to a holder for
property therein, notwithstanding that from want of capacity, the corporation
value, notwithstanding such holder, at the time of taking the instrument, knew
or infant may incur no liability thereon.
him to be only an accommodation party.
Sec. 23. Forged signature; effect of. - When a signature is forged or made
III. NEGOTIATION
without the authority of the person whose signature it purports to be, it is
wholly inoperative, and no right to retain the instrument, or to give a discharge Sec. 30. What constitutes negotiation. - An instrument is negotiated when it is
therefor, or to enforce payment thereof against any party thereto, can be transferred from one person to another in such manner as to constitute the
acquired through or under such signature, unless the party against whom it is transferee the holder thereof. If payable to bearer, it is negotiated by delivery;
sought to enforce such right is precluded from setting up the forgery or want if payable to order, it is negotiated by the indorsement of the holder and
of authority. completed by delivery.
II. CONSIDERATION Sec. 31. Indorsement; how made. - The indorsement must be written on the
instrument itself or upon a paper attached thereto. The signature of the
Sec. 24. Presumption of consideration. - Every negotiable instrument is
indorser, without additional words, is a sufficient indorsement.
deemed prima facie to have been issued for a valuable consideration; and
every person whose signature appears thereon to have become a party Sec. 32. Indorsement must be of entire instrument. - The indorsement must
thereto for value. be an indorsement of the entire instrument. An indorsement which purports to
transfer to the indorsee a part only of the amount payable, or which purports
Sec. 25. Value, what constitutes. — Value is any consideration sufficient to
to transfer the instrument to two or more indorsees severally, does not
support a simple contract. An antecedent or pre-existing debt constitutes
operate as a negotiation of the instrument. But where the instrument has But all subsequent indorsees acquire only the title of the first indorsee under
been paid in part, it may be indorsed as to the residue. the restrictive indorsement.
Sec. 33. Kinds of indorsement. - An indorsement may be either special or in Sec. 38. Qualified indorsement. - A qualified indorsement constitutes the
blank; and it may also be either restrictive or qualified or conditional. indorser a mere assignor of the title to the instrument. It may be made by
adding to the indorser's signature the words "without recourse" or any words
Sec. 34. Special indorsement; indorsement in blank. - A special indorsement
of similar import. Such an indorsement does not impair the negotiable
specifies the person to whom, or to whose order, the instrument is to be
character of the instrument.
payable, and the indorsement of such indorsee is necessary to the further
negotiation of the instrument. An indorsement in blank specifies no indorsee, Sec. 39. Conditional indorsement. - Where an indorsement is conditional, the
and an instrument so indorsed is payable to bearer, and may be negotiated party required to pay the instrument may disregard the condition and make
by delivery. payment to the indorsee or his transferee whether the condition has been
fulfilled or not. But any person to whom an instrument so indorsed is
Sec. 35. Blank indorsement; how changed to special indorsement. - The
negotiated will hold the same, or the proceeds thereof, subject to the rights of
holder may convert a blank indorsement into a special indorsement by writing
the person indorsing conditionally.
over the signature of the indorser in blank any contract consistent with the
character of the indorsement. Sec. 40. Indorsement of instrument payable to bearer. - Where an instrument,
payable to bearer, is indorsed specially, it may nevertheless be further
Sec. 36. When indorsement restrictive. - An indorsement is restrictive which
negotiated by delivery; but the person indorsing specially is liable as indorser
either:chanroblesvirtuallawlibrary
to only such holders as make title through his indorsement.
(a) Prohibits the further negotiation of the instrument; or
Sec. 41. Indorsement where payable to two or more persons. - Where an
(b) Constitutes the indorsee the agent of the indorser; or instrument is payable to the order of two or more payees or indorsees who
are not partners, all must indorse unless the one indorsing has authority to
(c) Vests the title in the indorsee in trust for or to the use of some other indorse for the others.
persons.
Sec. 42. Effect of instrument drawn or indorsed to a person as
But the mere absence of words implying power to negotiate does not make
an indorsement restrictive. cashier. - Where an instrument is drawn or indorsed to a person as "cashier"
or other fiscal officer of a bank or corporation, it is deemed prima facie to be
Sec. 37. Effect of restrictive indorsement; rights of indorsee. - A restrictive payable to the bank or corporation of which he is such officer, and may be
indorsement confers upon the indorsee the right:chanroblesvirtuallawlibrary negotiated by either the indorsement of the bank or corporation or the
(a) to receive payment of the instrument; indorsement of the officer.

(b) to bring any action thereon that the indorser could bring; Sec. 43. Indorsement where name is misspelled, and so forth. - Where the
name of a payee or indorsee is wrongly designated or misspelled, he may
(c) to transfer his rights as such indorsee, where the form of the indorsement indorse the instrument as therein described adding, if he thinks fit, his proper
authorizes him to do so. signature.
Sec. 44. Indorsement in representative capacity. - Where any person is under Sec. 52. What constitutes a holder in due course. - A holder in due course is
obligation to indorse in a representative capacity, he may indorse in such a holder who has taken the instrument under the following
terms as to negative personal liability. robles virtual law library conditions:chanroblesvirtuallawlibrary
Sec. 45. Time of indorsement; presumption. - Except where an indorsement (a) That it is complete and regular upon its face;
bears date after the maturity of the instrument, every negotiation is deemed
(b) That he became the holder of it before it was overdue, and without notice
prima facie to have been effected before the instrument was overdue.
that it has been previously dishonored, if such was the fact;
Sec. 46. Place of indorsement; presumption. - Except where the contrary
(c) That he took it in good faith and for value;
appears, every indorsement is presumed prima facie to have been made at
the place where the instrument is dated. (d) That at the time it was negotiated to him, he had no notice of any infirmity
in the instrument or defect in the title of the person negotiating it.
Sec. 47. Continuation of negotiable character. - An instrument negotiable in
its origin continues to be negotiable until it has been restrictively indorsed or Sec. 53. When person not deemed holder in due course. - Where an
discharged by payment or otherwise. instrument payable on demand is negotiated on an unreasonable length of
time after its issue, the holder is not deemed a holder in due course.
Sec. 48. Striking out indorsement. - The holder may at any time strike out any
indorsement which is not necessary to his title. The indorser whose Sec. 54. Notice before full amount is paid. - Where the transferee receives
indorsement is struck out, and all indorsers subsequent to him, are thereby notice of any infirmity in the instrument or defect in the title of the person
relieved from liability on the instrument. negotiating the same before he has paid the full amount agreed to be paid
therefor, he will be deemed a holder in due course only to the extent of the
Sec. 49. Transfer without indorsement; effect of. - Where the holder of an
amount therefore paid by him.
instrument payable to his order transfers it for value without indorsing it, the
transfer vests in the transferee such title as the transferor had therein, and the Sec. 55. When title defective. - The title of a person who negotiates an
transferee acquires in addition, the right to have the indorsement of the instrument is defective within the meaning of this Act when he obtained the
transferor. But for the purpose of determining whether the transferee is a instrument, or any signature thereto, by fraud, duress, or force and fear, or
holder in due course, the negotiation takes effect as of the time when the other unlawful means, or for an illegal consideration, or when he negotiates it
indorsement is actually made. in breach of faith, or under such circumstances as amount to a fraud.
Sec. 50. When prior party may negotiate instrument. - Where an instrument is Sec. 56. What constitutes notice of defect. - To constitutes notice of an
negotiated back to a prior party, such party may, subject to the provisions of infirmity in the instrument or defect in the title of the person negotiating the
this Act, reissue and further negotiable the same. But he is not entitled to same, the person to whom it is negotiated must have had actual knowledge of
enforce payment thereof against any intervening party to whom he was the infirmity or defect, or knowledge of such facts that his action in taking the
personally liable. instrument amounted to bad faith.
IV. RIGHTS OF THE HOLDER
Sec. 51. Right of holder to sue; payment. - The holder of a negotiable
instrument may to sue thereon in his own name; and payment to him in due
course discharges the instrument.
Sec. 57. Rights of holder in due course. - A holder in due course holds the (a) The existence of the drawer, the genuineness of his signature, and his
instrument free from any defect of title of prior parties, and free from defenses capacity and authority to draw the instrument; and
available to prior parties among themselves, and may enforce payment of the
(b) The existence of the payee and his then capacity to indorse.
instrument for the full amount thereof against all parties liable thereon. robles
virtual law library Sec. 63. When a person deemed indorser. - A person placing his signature
upon an instrument otherwise than as maker, drawer, or acceptor, is deemed
Sec. 58. When subject to original defense. - In the hands of any holder other
to be indorser unless he clearly indicates by appropriate words his intention to
than a holder in due course, a negotiable instrument is subject to the same
be bound in some other capacity.
defenses as if it were non-negotiable. But a holder who derives his title
through a holder in due course, and who is not himself a party to any fraud or Sec. 64. Liability of irregular indorser. - Where a person, not otherwise a party
illegality affecting the instrument, has all the rights of such former holder in to an instrument, places thereon his signature in blank before delivery, he is
respect of all parties prior to the latter. liable as indorser, in accordance with the following
rules:chanroblesvirtuallawlibrary
Sec. 59. Who is deemed holder in due course. - Every holder is deemed
prima facie to be a holder in due course; but when it is shown that the title of (a) If the instrument is payable to the order of a third person, he is liable to the
any person who has negotiated the instrument was defective, the burden is payee and to all subsequent parties.
on the holder to prove that he or some person under whom he claims
acquired the title as holder in due course. But the last-mentioned rule does (b) If the instrument is payable to the order of the maker or drawer, or is
not apply in favor of a party who became bound on the instrument prior to the payable to bearer, he is liable to all parties subsequent to the maker or
acquisition of such defective title. drawer.

V. LIABILITIES OF PARTIES (c) If he signs for the accommodation of the payee, he is liable to all parties
subsequent to the payee.
Sec. 60. Liability of maker. - The maker of a negotiable instrument, by making
it, engages that he will pay it according to its tenor, and admits the existence Sec. 65. Warranty where negotiation by delivery and so forth. — Every
of the payee and his then capacity to indorse. person negotiating an instrument by delivery or by a qualified indorsement
warrants:chanroblesvirtuallawlibrary
Sec. 61. Liability of drawer. - The drawer by drawing the instrument admits
the existence of the payee and his then capacity to indorse; and engages (a) That the instrument is genuine and in all respects what it purports to be;
that, on due presentment, the instrument will be accepted or paid, or both, (b) That he has a good title to it;
according to its tenor, and that if it be dishonored and the necessary
proceedings on dishonor be duly taken, he will pay the amount thereof to the (c) That all prior parties had capacity to contract;
holder or to any subsequent indorser who may be compelled to pay it. But the (d) That he has no knowledge of any fact which would impair the validity of
drawer may insert in the instrument an express stipulation negativing or the instrument or render it valueless.
limiting his own liability to the holder.
But when the negotiation is by delivery only, the warranty extends in favor of
Sec. 62. Liability of acceptor. - The acceptor, by accepting the instrument, no holder other than the immediate transferee.
engages that he will pay it according to the tenor of his acceptance and
admits:chanroblesvirtuallawlibrary
The provisions of subdivision (c) of this section do not apply to a person herein otherwise provided, presentment for payment is necessary in order to
negotiating public or corporation securities other than bills and notes. charge the drawer and indorsers.
Sec. 66. Liability of general indorser. - Every indorser who indorses without Sec. 71. Presentment where instrument is not payable on demand and where
qualification, warrants to all subsequent holders in due payable on demand. - Where the instrument is not payable on demand,
course:chanroblesvirtuallawlibrary presentment must be made on the day it falls due. Where it is payable on
demand, presentment must be made within a reasonable time after its issue,
(a) The matters and things mentioned in subdivisions (a), (b), and (c) of the
except that in the case of a bill of exchange, presentment for payment will be
next preceding section; and
sufficient if made within a reasonable time after the last negotiation thereof.
(b) That the instrument is, at the time of his indorsement, valid and subsisting;
Sec. 72. What constitutes a sufficient presentment. - Presentment for
And, in addition, he engages that, on due presentment, it shall be accepted or payment, to be sufficient, must be made:chanroblesvirtuallawlibrary
paid, or both, as the case may be, according to its tenor, and that if it be
(a) By the holder, or by some person authorized to receive payment on his
dishonored and the necessary proceedings on dishonor be duly taken, he will
behalf;
pay the amount thereof to the holder, or to any subsequent indorser who may
be compelled to pay it. (b) At a reasonable hour on a business day;
Sec. 67. Liability of indorser where paper negotiable by delivery. — Where a (c) At a proper place as herein defined;
person places his indorsement on an instrument negotiable by delivery, he
(d) To the person primarily liable on the instrument, or if he is absent or
incurs all the liability of an indorser.
inaccessible, to any person found at the place where the presentment is
Sec. 68. Order in which indorsers are liable. - As respect one another, made.
indorsers are liable prima facie in the order in which they indorse; but
Sec. 73. Place of presentment. - Presentment for payment is made at the
evidence is admissible to show that, as between or among themselves, they
proper place:chanroblesvirtuallawlibrary
have agreed otherwise. Joint payees or joint indorsees who indorse are
deemed to indorse jointly and severally. robles virtual law library (a) Where a place of payment is specified in the instrument and it is there
presented;
Sec. 69. Liability of an agent or broker. - Where a broker or other agent
negotiates an instrument without indorsement, he incurs all the liabilities (b) Where no place of payment is specified but the address of the person to
prescribed by Section Sixty-five of this Act, unless he discloses the name of make payment is given in the instrument and it is there presented;
his principal and the fact that he is acting only as agent.
(c) Where no place of payment is specified and no address is given and the
VI. PRESENTATION FOR PAYMENT instrument is presented at the usual place of business or residence of the
person to make payment;
Sec. 70. Effect of want of demand on principal debtor. - Presentment for
payment is not necessary in order to charge the person primarily liable on the (d) In any other case if presented to the person to make payment wherever
instrument; but if the instrument is, by its terms, payable at a special place, he can be found, or if presented at his last known place of business or
and he is able and willing to pay it there at maturity, such ability and residence.
willingness are equivalent to a tender of payment upon his part. But except as
Sec. 74. Instrument must be exhibited. - The instrument must be exhibited to Sec. 82. When presentment for payment is excused. - Presentment for
the person from whom payment is demanded, and when it is paid, must be payment is excused:chanroblesvirtuallawlibrary
delivered up to the party paying it.
(a) Where, after the exercise of reasonable diligence, presentment, as
Sec. 75. Presentment where instrument payable at bank. - Where the required by this Act, cannot be made;
instrument is payable at a bank, presentment for payment must be made
(b) Where the drawee is a fictitious person;
during banking hours, unless the person to make payment has no funds there
to meet it at any time during the day, in which case presentment at any hour (c) By waiver of presentment, express or implied.
before the bank is closed on that day is sufficient.
Sec. 83. When instrument dishonored by non-payment. - The instrument is
Sec. 76. Presentment where principal debtor is dead. - Where the person dishonored by non-payment when:chanroblesvirtuallawlibrary
primarily liable on the instrument is dead and no place of payment is
specified, presentment for payment must be made to his personal (a) It is duly presented for payment and payment is refused or cannot be
representative, if such there be, and if, with the exercise of reasonable obtained; or
diligence, he can be found. (b) Presentment is excused and the instrument is overdue and unpaid.
Sec. 77. Presentment to persons liable as partners. - Where the persons Sec. 84. Liability of person secondarily liable, when instrument dishonored. -
primarily liable on the instrument are liable as partners and no place of Subject to the provisions of this Act, when the instrument is dishonored by
payment is specified, presentment for payment may be made to any one of non-payment, an immediate right of recourse to all parties secondarily liable
them, even though there has been a dissolution of the firm. thereon accrues to the holder. robles virtual law library
Sec. 78. Presentment to joint debtors. - Where there are several persons, not Sec. 85. Time of maturity. - Every negotiable instrument is payable at the time
partners, primarily liable on the instrument and no place of payment is fixed therein without grace. When the day of maturity falls upon Sunday or a
specified, presentment must be made to them all. holiday, the instruments falling due or becoming payable on Saturday are to
Sec. 79. When presentment not required to charge the drawer. - Presentment be presented for payment on the next succeeding business day except that
for payment is not required in order to charge the drawer where he has no instruments payable on demand may, at the option of the holder, be
right to expect or require that the drawee or acceptor will pay the instrument. presented for payment before twelve o'clock noon on Saturday when that
entire day is not a holiday.
Sec. 80. When presentment not required to charge the indorser. -
Presentment is not required in order to charge an indorser where the Sec. 86. Time; how computed. - When the instrument is payable at a fixed
instrument was made or accepted for his accommodation and he has no period after date, after sight, or after that happening of a specified event, the
reason to expect that the instrument will be paid if presented. time of payment is determined by excluding the day from which the time is to
begin to run, and by including the date of payment.
Sec. 81. When delay in making presentment is excused. - Delay in making
presentment for payment is excused when the delay is caused by Sec. 87. Rule where instrument payable at bank. - Where the instrument is
circumstances beyond the control of the holder and not imputable to his made payable at a bank, it is equivalent to an order to the bank to pay the
default, misconduct, or negligence. When the cause of delay ceases to same for the account of the principal debtor thereon.
operate, presentment must be made with reasonable diligence.
Sec. 88. What constitutes payment in due course. - Payment is made in due communication. A misdescription of the instrument does not vitiate the notice
course when it is made at or after the maturity of the payment to the holder unless the party to whom the notice is given is in fact misled thereby.
thereof in good faith and without notice that his title is defective.
Sec. 96. Form of notice. - The notice may be in writing or merely oral and may
VII. NOTICE OF DISHONOR be given in any terms which sufficiently identify the instrument, and indicate
that it has been dishonored by non-acceptance or non-payment. It may in all
Sec. 89. To whom notice of dishonor must be given. - Except as herein
cases be given by delivering it personally or through the mails.
otherwise provided, when a negotiable instrument has been dishonored by
non-acceptance or non-payment, notice of dishonor must be given to the Sec. 97. To whom notice may be given. - Notice of dishonor may be given
drawer and to each indorser, and any drawer or indorser to whom such notice either to the party himself or to his agent in that behalf.
is not given is discharged.
Sec. 98. Notice where party is dead. - When any party is dead and his death
Sec. 90. By whom given. - The notice may be given by or on behalf of the is known to the party giving notice, the notice must be given to a personal
holder, or by or on behalf of any party to the instrument who might be representative, if there be one, and if with reasonable diligence, he can be
compelled to pay it to the holder, and who, upon taking it up, would have a found. If there be no personal representative, notice may be sent to the last
right to reimbursement from the party to whom the notice is given. residence or last place of business of the deceased.
Sec. 91. Notice given by agent. - Notice of dishonor may be given by any Sec. 99. Notice to partners. - Where the parties to be notified are partners,
agent either in his own name or in the name of any party entitled to given notice to any one partner is notice to the firm, even though there has been a
notice, whether that party be his principal or not. dissolution.
Sec. 92. Effect of notice on behalf of holder. - Where notice is given by or on Sec. 100. Notice to persons jointly liable. - Notice to joint persons who are not
behalf of the holder, it inures to the benefit of all subsequent holders and all partners must be given to each of them unless one of them has authority to
prior parties who have a right of recourse against the party to whom it is receive such notice for the others.
given.
Sec. 101. Notice to bankrupt. - Where a party has been adjudged a bankrupt
Sec. 93. Effect where notice is given by party entitled thereto. - Where notice or an insolvent, or has made an assignment for the benefit of creditors, notice
is given by or on behalf of a party entitled to give notice, it inures to the may be given either to the party himself or to his trustee or assignee.
benefit of the holder and all parties subsequent to the party to whom notice is
Sec. 102. Time within which notice must be given. - Notice may be given as
given. chanrobles law
soon as the instrument is dishonored and, unless delay is excused as
Sec. 94. When agent may give notice. - Where the instrument has been hereinafter provided, must be given within the time fixed by this Act.
dishonored in the hands of an agent, he may either himself give notice to the
Sec. 103. Where parties reside in same place. - Where the person giving and
parties liable thereon, or he may give notice to his principal. If he gives notice
the person to receive notice reside in the same place, notice must be given
to his principal, he must do so within the same time as if he were the holder,
within the following times:
and the principal, upon the receipt of such notice, has himself the same time
for giving notice as if the agent had been an independent holder. (a) If given at the place of business of the person to receive notice, it must be
given before the close of business hours on the day following.
Sec. 95. When notice sufficient. - A written notice need not be signed and an
insufficient written notice may be supplemented and validated by verbal
 (b) If he lives in one place and has his place of business in another, notice
may be sent to either place; or
(b) If given at his residence, it must be given before the usual hours of rest on
the day following. (c) If he is sojourning in another place, notice may be sent to the place where
he is so sojourning.
(c) If sent by mail, it must be deposited in the post office in time to reach him
in usual course on the day following. But where the notice is actually received by the party within the time specified
in this Act, it will be sufficient, though not sent in accordance with the
Sec. 104. Where parties reside in different places. - Where the person giving
requirement of this section.
and the person to receive notice reside in different places, the notice must be
given within the following times: Sec. 109. Waiver of notice. - Notice of dishonor may be waived either before
the time of giving notice has arrived or after the omission to give due notice,
(a) If sent by mail, it must be deposited in the post office in time to go by mail
and the waiver may be expressed or implied.
the day following the day of dishonor, or if there be no mail at a convenient
hour on last day, by the next mail thereafter. Sec. 110. Whom affected by waiver. - Where the waiver is embodied in the
instrument itself, it is binding upon all parties; but, where it is written above
(b) If given otherwise than through the post office, then within the time that
the signature of an indorser, it binds him only.
notice would have been received in due course of mail, if it had been
deposited in the post office within the time specified in the last subdivision. Sec. 111. Waiver of protest. - A waiver of protest, whether in the case of a
foreign bill of exchange or other negotiable instrument, is deemed to be a
Sec. 105. When sender deemed to have given due notice. - Where notice of
waiver not only of a formal protest but also of presentment and notice of
dishonor is duly addressed and deposited in the post office, the sender is
dishonor.
deemed to have given due notice, notwithstanding any miscarriage in the
mails. Sec. 112. When notice is dispensed with. - Notice of dishonor is dispensed
with when, after the exercise of reasonable diligence, it cannot be given to or
Sec. 106. Deposit in post office; what constitutes. - Notice is deemed to have
does not reach the parties sought to be charged.
been deposited in the post-office when deposited in any branch post office or
in any letter box under the control of the post-office department. Sec. 113. Delay in giving notice; how excused. - Delay in giving notice of
dishonor is excused when the delay is caused by circumstances beyond the
Sec. 107. Notice to subsequent party; time of. - Where a party receives notice
control of the holder and not imputable to his default, misconduct, or
of dishonor, he has, after the receipt of such notice, the same time for giving
negligence. When the cause of delay ceases to operate, notice must be given
notice to antecedent parties that the holder has after the dishonor.
with reasonable diligence.
Sec. 108. Where notice must be sent. - Where a party has added an address
Sec. 114. When notice need not be given to drawer. - Notice of dishonor is
to his signature, notice of dishonor must be sent to that address; but if he has
not required to be given to the drawer in either of the following
not given such address, then the notice must be sent as follows:
cases:chanroblesvirtuallawlibrary
(a) Either to the post-office nearest to his place of residence or to the post-
(a) Where the drawer and drawee are the same person;
office where he is accustomed to receive his letters; or
(b) When the drawee is fictitious person or a person not having capacity to Sec. 119. Instrument; how discharged. - A negotiable instrument is
contract; discharged:chanroblesvirtuallawlibrary
(c) When the drawer is the person to whom the instrument is presented for (a) By payment in due course by or on behalf of the principal debtor;
payment;
(b) By payment in due course by the party accommodated, where the
(d) Where the drawer has no right to expect or require that the drawee or instrument is made or accepted for his accommodation;
acceptor will honor the instrument;
(c) By the intentional cancellation thereof by the holder;
(e) Where the drawer has countermanded payment.
(d) By any other act which will discharge a simple contract for the payment of
Sec. 115. When notice need not be given to indorser. — Notice of dishonor is money;
not required to be given to an indorser in either of the following
(e) When the principal debtor becomes the holder of the instrument at or after
cases:chanroblesvirtuallawlibrary
maturity in his own right.
(a) When the drawee is a fictitious person or person not having capacity to
Sec. 120. When persons secondarily liable on the instrument are discharged.
contract, and the indorser was aware of that fact at the time he indorsed the
- A person secondarily liable on the instrument is
instrument;
discharged:chanroblesvirtuallawlibrary
(b) Where the indorser is the person to whom the instrument is presented for
(a) By any act which discharges the instrument;
payment;
(b) By the intentional cancellation of his signature by the holder;
(c) Where the instrument was made or accepted for his accommodation.
(c) By the discharge of a prior party;
Sec. 116. Notice of non-payment where acceptance refused. - Where due
notice of dishonor by non-acceptance has been given, notice of a subsequent (d) By a valid tender or payment made by a prior party;
dishonor by non-payment is not necessary unless in the meantime the
instrument has been accepted. (e) By a release of the principal debtor unless the holder's right of recourse
against the party secondarily liable is expressly reserved;
Sec. 117. Effect of omission to give notice of non-acceptance. - An omission
to give notice of dishonor by non-acceptance does not prejudice the rights of (f) By any agreement binding upon the holder to extend the time of payment
a holder in due course subsequent to the omission. or to postpone the holder's right to enforce the instrument unless made with
the assent of the party secondarily liable or unless the right of recourse
Sec. 118. When protest need not be made; when must be made. - Where any against such party is expressly reserved.
negotiable instrument has been dishonored, it may be protested for non-
acceptance or non-payment, as the case may be; but protest is not required Sec. 121. Right of party who discharges instrument. - Where the instrument is
except in the case of foreign bills of exchange. robles virtual law library paid by a party secondarily liable thereon, it is not discharged; but the party
so paying it is remitted to his former rights as regard all prior parties, and he
VIII. DISCHARGE OF NEGOTIABLE INSTRUMENT may strike out his own and all subsequent indorsements and against
negotiate the instrument, except:chanroblesvirtuallawlibrary
(a) Where it is payable to the order of a third person and has been paid by the (f) Or which adds a place of payment where no place of payment is specified,
drawer; and or any other change or addition which alters the effect of the instrument in any
respect, is a material alteration.
(b) Where it was made or accepted for accommodation and has been paid by
the party accommodated. BILLS OF EXCHANGE
Sec. 122. Renunciation by holder. - The holder may expressly renounce his IX. FORM AND INTERPRETATION
rights against any party to the instrument before, at, or after its maturity. An
Sec. 126. Bill of exchange, defined. - A bill of exchange is an unconditional
absolute and unconditional renunciation of his rights against the principal
order in writing addressed by one person to another, signed by the person
debtor made at or after the maturity of the instrument discharges the
giving it, requiring the person to whom it is addressed to pay on demand or at
instrument. But a renunciation does not affect the rights of a holder in due
a fixed or determinable future time a sum certain in money to order or to
course without notice. A renunciation must be in writing unless the instrument
bearer.
is delivered up to the person primarily liable thereon.
Sec. 127. Bill not an assignment of funds in hands of drawee. - A bill of itself
Sec. 123. Cancellation; unintentional; burden of proof. - A cancellation made
does not operate as an assignment of the funds in the hands of the drawee
unintentionally or under a mistake or without the authority of the holder, is
available for the payment thereof, and the drawee is not liable on the bill
inoperative but where an instrument or any signature thereon appears to have
unless and until he accepts the same.
been cancelled, the burden of proof lies on the party who alleges that the
cancellation was made unintentionally or under a mistake or without authority. Sec. 128. Bill addressed to more than one drawee. - A bill may be addressed
to two or more drawees jointly, whether they are partners or not; but not to
Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument
two or more drawees in the alternative or in succession.
is materially altered without the assent of all parties liable thereon, it is
avoided, except as against a party who has himself made, authorized, or Sec. 129. Inland and foreign bills of exchange. - An inland bill of exchange is
assented to the alteration and subsequent indorsers. a bill which is, or on its face purports to be, both drawn and payable within the
Philippines. Any other bill is a foreign bill. Unless the contrary appears on the
But when an instrument has been materially altered and is in the hands of a
face of the bill, the holder may treat it as an inland bill.
holder in due course not a party to the alteration, he may enforce payment
thereof according to its original tenor. Sec. 130. When bill may be treated as promissory note. - Where in a bill the
drawer and drawee are the same person or where the drawee is a fictitious
Sec. 125. What constitutes a material alteration. - Any alteration which
person or a person not having capacity to contract, the holder may treat the
changes:
instrument at his option either as a bill of exchange or as a promissory note.
(a) The date;
Sec. 131. Referee in case of need. - The drawer of a bill and any indorser
(b) The sum payable, either for principal or interest; may insert thereon the name of a person to whom the holder may resort in
case of need; that is to say, in case the bill is dishonored by non-acceptance
(c) The time or place of payment:
or non-payment. Such person is called a referee in case of need. It is in the
(d) The number or the relations of the parties; option of the holder to resort to the referee in case of need or not as he may
see fit.
(e) The medium or currency in which payment is to be made;
X. ACCEPTANCE absence of any different agreement, is entitled to have the bill accepted as of
the date of the first presentment.
Sec. 132. Acceptance; how made, by and so forth. - The acceptance of a bill
is the signification by the drawee of his assent to the order of the drawer. The Sec. 139. Kinds of acceptance. - An acceptance is either general or qualified.
acceptance must be in writing and signed by the drawee. It must not express A general acceptance assents without qualification to the order of the drawer.
that the drawee will perform his promise by any other means than the A qualified acceptance in express terms varies the effect of the bill as drawn.
payment of money.
Sec. 140. What constitutes a general acceptance. - An acceptance to pay at a
Sec. 133. Holder entitled to acceptance on face of bill. - The holder of a bill particular place is a general acceptance unless it expressly states that the bill
presenting the same for acceptance may require that the acceptance be is to be paid there only and not elsewhere.
written on the bill, and, if such request is refused, may treat the bill as
Sec. 141. Qualified acceptance. - An acceptance is qualified which
dishonored.
is:chanroblesvirtuallawlibrary
Sec. 134. Acceptance by separate instrument. - Where an acceptance is
(a) Conditional; that is to say, which makes payment by the acceptor
written on a paper other than the bill itself, it does not bind the acceptor
dependent on the fulfillment of a condition therein stated;
except in favor of a person to whom it is shown and who, on the faith thereof,
receives the bill for value. (b) Partial; that is to say, an acceptance to pay part only of the amount for
which the bill is drawn;
Sec. 135. Promise to accept; when equivalent to acceptance. - An
unconditional promise in writing to accept a bill before it is drawn is deemed (c) Local; that is to say, an acceptance to pay only at a particular place;
an actual acceptance in favor of every person who, upon the faith thereof,
receives the bill for value. (d) Qualified as to time;

Sec. 136. Time allowed drawee to accept. - The drawee is allowed twenty- (e) The acceptance of some, one or more of the drawees but not of all.
four hours after presentment in which to decide whether or not he will accept Sec. 142. Rights of parties as to qualified acceptance. - The holder may
the bill; the acceptance, if given, dates as of the day of presentation. refuse to take a qualified acceptance and if he does not obtain an unqualified
Sec. 137. Liability of drawee returning or destroying bill. - Where a drawee to acceptance, he may treat the bill as dishonored by non-acceptance. Where a
whom a bill is delivered for acceptance destroys the same, or refuses within qualified acceptance is taken, the drawer and indorsers are discharged from
twenty-four hours after such delivery or within such other period as the holder liability on the bill unless they have expressly or impliedly authorized the
may allow, to return the bill accepted or non-accepted to the holder, he will be holder to take a qualified acceptance, or subsequently assent thereto. When
deemed to have accepted the same. the drawer or an indorser receives notice of a qualified acceptance, he must,
within a reasonable time, express his dissent to the holder or he will be
Sec. 138. Acceptance of incomplete bill. - A bill may be accepted before it has deemed to have assented thereto.
been signed by the drawer, or while otherwise incomplete, or when it is
overdue, or after it has been dishonored by a previous refusal to accept, or by XI. PRESENTMENT FOR ACCEPTANCE
non payment. But when a bill payable after sight is dishonored by non- Sec. 143. When presentment for acceptance must be made. - Presentment
acceptance and the drawee subsequently accepts it, the holder, in the for acceptance must be made:
(a) Where the bill is payable after sight, or in any other case, where eighty-five of this Act. When Saturday is not otherwise a holiday, presentment
presentment for acceptance is necessary in order to fix the maturity of the for acceptance may be made before twelve o'clock noon on that day.
instrument; or
Sec. 147. Presentment where time is insufficient. - Where the holder of a bill
(b) Where the bill expressly stipulates that it shall be presented for drawn payable elsewhere than at the place of business or the residence of
acceptance; or the drawee has no time, with the exercise of reasonable diligence, to present
the bill for acceptance before presenting it for payment on the day that it falls
(c) Where the bill is drawn payable elsewhere than at the residence or place
due, the delay caused by presenting the bill for acceptance before presenting
of business of the drawee.
it for payment is excused and does not discharge the drawers and indorsers.
In no other case is presentment for acceptance necessary in order to render
Sec. 148. Where presentment is excused. - Presentment for acceptance is
any party to the bill liable.
excused and a bill may be treated as dishonored by non-acceptance in either
Sec. 144. When failure to present releases drawer and indorser. - Except as of the following cases:
herein otherwise provided, the holder of a bill which is required by the next
(a) Where the drawee is dead, or has absconded, or is a fictitious person or a
preceding section to be presented for acceptance must either present it for
person not having capacity to contract by bill.
acceptance or negotiate it within a reasonable time. If he fails to do so, the
drawer and all indorsers are discharged. (b) Where, after the exercise of reasonable diligence, presentment can not
be made.
Sec. 145. Presentment; how made. - Presentment for acceptance must be
made by or on behalf of the holder at a reasonable hour, on a business day (c) Where, although presentment has been irregular, acceptance has been
and before the bill is overdue, to the drawee or some person authorized to refused on some other ground.
accept or refuse acceptance on his behalf; and
Sec. 149. When dishonored by nonacceptance. - A bill is dishonored by non-
(a) Where a bill is addressed to two or more drawees who are not partners, acceptance:
presentment must be made to them all unless one has authority to accept or
(a) When it is duly presented for acceptance and such an acceptance as is
refuse acceptance for all, in which case presentment may be made to him
prescribed by this Act is refused or can not be obtained; or
only;
(b) Where the drawee is dead, presentment may be made to his personal
representative; (b) When presentment for acceptance is excused and the bill is not accepted.
(c) Where the drawee has been adjudged a bankrupt or an insolvent or has Sec. 150. Duty of holder where bill not accepted. - Where a bill is duly
made an assignment for the benefit of creditors, presentment may be made to presented for acceptance and is not accepted within the prescribed time, the
him or to his trustee or assignee. person presenting it must treat the bill as dishonored by nonacceptance or he
loses the right of recourse against the drawer and indorsers.
Sec. 146. On what days presentment may be made. - A bill may be presented
for acceptance on any day on which negotiable instruments may be
presented for payment under the provisions of Sections seventy-two and
 Sec. 151. Rights of holder where bill not accepted. - When a bill is Sec. 156. Protest; where made. - A bill must be protested at the place where
dishonored by nonacceptance, an immediate right of recourse against the it is dishonored, except that when a bill drawn payable at the place of
drawer and indorsers accrues to the holder and no presentment for payment business or residence of some person other than the drawee has been
is necessary. dishonored by nonacceptance, it must be protested for non-payment at the
place where it is expressed to be payable, and no further presentment for
XII. PROTEST
payment to, or demand on, the drawee is necessary.
Sec. 152. In what cases protest necessary. - Where a foreign bill appearing
Sec. 157. Protest both for non-acceptance and non-payment. - A bill which
on its face to be such is dishonored by nonacceptance, it must be duly
has been protested for non-acceptance may be subsequently protested for
protested for nonacceptance, by nonacceptance is dishonored and where
non-payment.
such a bill which has not previously been dishonored by nonpayment, it must
be duly protested for nonpayment. If it is not so protested, the drawer and Sec. 158. Protest before maturity where acceptor insolvent. - Where the
indorsers are discharged. Where a bill does not appear on its face to be a acceptor has been adjudged a bankrupt or an insolvent or has made an
foreign bill, protest thereof in case of dishonor is unnecessary. assignment for the benefit of creditors before the bill matures, the holder may
cause the bill to be protested for better security against the drawer and
Sec. 153. Protest; how made. - The protest must be annexed to the bill or
indorsers. robles virtual law library
must contain a copy thereof, and must be under the hand and seal of the
notary making it and must specify: Sec. 159. When protest dispensed with. - Protest is dispensed with by any
circumstances which would dispense with notice of dishonor. Delay in noting
(a) The time and place of presentment;
or protesting is excused when delay is caused by circumstances beyond the
(b) The fact that presentment was made and the manner thereof; control of the holder and not imputable to his default, misconduct, or
negligence. When the cause of delay ceases to operate, the bill must be
(c) The cause or reason for protesting the bill; noted or protested with reasonable diligence.
(d) The demand made and the answer given, if any, or the fact that the Sec. 160. Protest where bill is lost and so forth. - When a bill is lost or
drawee or acceptor could not be found. destroyed or is wrongly detained from the person entitled to hold it, protest
Sec. 154. Protest, by whom made. - Protest may be made by: may be made on a copy or written particulars thereof.

(a) A notary public; or XIII. ACCEPTANCE FOR HONOR

(b) By any respectable resident of the place where the bill is dishonored, in Sec. 161. When bill may be accepted for honor. - When a bill of exchange
the presence of two or more credible witnesses. has been protested for dishonor by non-acceptance or protested for better
security and is not overdue, any person not being a party already liable
Sec. 155. Protest; when to be made. - When a bill is protested, such protest thereon may, with the consent of the holder, intervene and accept the bill
must be made on the day of its dishonor unless delay is excused as herein supra protest for the honor of any party liable thereon or for the honor of the
provided. When a bill has been duly noted, the protest may be subsequently person for whose account the bill is drawn. The acceptance for honor may be
extended as of the date of the noting. for part only of the sum for which the bill is drawn; and where there has been
an acceptance for honor for one party, there may be a further acceptance by
a different person for the honor of another party.
Sec. 162. Acceptance for honor; how made. - An acceptance for honor supra Sec. 169. When delay in making presentment is excused. - The provisions of
protest must be in writing and indicate that it is an acceptance for honor and Section eighty-one apply where there is delay in making presentment to the
must be signed by the acceptor for honor. acceptor for honor or referee in case of need.
Sec. 163. When deemed to be an acceptance for honor of the drawer. - Sec. 170. Dishonor of bill by acceptor for honor. - When the bill is dishonored
Where an acceptance for honor does not expressly state for whose honor it is by the acceptor for honor, it must be protested for non-payment by him.
made, it is deemed to be an acceptance for the honor of the drawer.
XIV. PAYMENT FOR HONOR
Sec. 164. Liability of the acceptor for honor. - The acceptor for honor is liable
Sec. 171. Who may make payment for honor. - Where a bill has been
to the holder and to all parties to the bill subsequent to the party for whose
protested for non-payment, any person may intervene and pay it supra
honor he has accepted.
protest for the honor of any person liable thereon or for the honor of the
Sec. 165. Agreement of acceptor for honor. - The acceptor for honor, by such person for whose account it was drawn.
acceptance, engages that he will, on due presentment, pay the bill according
Sec. 172. Payment for honor; how made. - The payment for honor supra
to the terms of his acceptance provided it shall not have been paid by the
protest, in order to operate as such and not as a mere voluntary payment,
drawee and provided also that is shall have been duly presented for payment
must be attested by a notarial act of honor which may be appended to the
and protested for non-payment and notice of dishonor given to him.
protest or form an extension to it.
Sec. 166. Maturity of bill payable after sight; accepted for honor. - Where a bill
Sec. 173. Declaration before payment for honor. - The notarial act of honor
payable after sight is accepted for honor, its maturity is calculated from the
must be founded on a declaration made by the payer for honor or by his
date of the noting for non-acceptance and not from the date of the
agent in that behalf declaring his intention to pay the bill for honor and for
acceptance for honor.
whose honor he pays.
Sec. 167. Protest of bill accepted for honor, and so forth. - Where a
Sec. 174. Preference of parties offering to pay for honor. - Where two or more
dishonored bill has been accepted for honor supra protest or contains a
persons offer to pay a bill for the honor of different parties, the person whose
referee in case of need, it must be protested for non-payment before it is
payment will discharge most parties to the bill is to be given the preference.
presented for payment to the acceptor for honor or referee in case of need.
Sec. 175. Effect on subsequent parties where bill is paid for honor. - Where a
Sec. 168. Presentment for payment to acceptor for honor, how made. -
bill has been paid for honor, all parties subsequent to the party for whose
Presentment for payment to the acceptor for honor must be made as follows:
honor it is paid are discharged but the payer for honor is subrogated for, and
(a) If it is to be presented in the place where the protest for non-payment was succeeds to, both the rights and duties of the holder as regards the party for
made, it must be presented not later than the day following its maturity. whose honor he pays and all parties liable to the latter.
(b) If it is to be presented in some other place than the place where it was Sec. 176. Where holder refuses to receive payment supra protest. - Where
protested, then it must be forwarded within the time specified in Section one the holder of a bill refuses to receive payment supra protest, he loses his right
hundred and four. of recourse against any party who would have been discharged by such
payment.
Sec. 177. Rights of payer for honor. - The payer for honor, on paying to the person to another, signed by the maker, engaging to pay on demand, or at a
holder the amount of the bill and the notarial expenses incidental to its fixed or determinable future time, a sum certain in money to order or to
dishonor, is entitled to receive both the bill itself and the protest. bearer. Where a note is drawn to the maker's own order, it is not complete
until indorsed by him.
XV. BILLS IN SET
Sec. 185. Check, defined. - A check is a bill of exchange drawn on a bank
Sec. 178. Bills in set constitute one bill. - Where a bill is drawn in a set, each
payable on demand. Except as herein otherwise provided, the provisions of
part of the set being numbered and containing a reference to the other parts,
this Act applicable to a bill of exchange payable on demand apply to a check.
the whole of the parts constitutes one bill.
Sec. 186. Within what time a check must be presented. - A check must be
Sec. 179. Right of holders where different parts are negotiated. - Where two
presented for payment within a reasonable time after its issue or the drawer
or more parts of a set are negotiated to different holders in due course, the
will be discharged from liability thereon to the extent of the loss caused by the
holder whose title first accrues is, as between such holders, the true owner of
delay.
the bill. But nothing in this section affects the right of a person who, in due
course, accepts or pays the parts first presented to him. Sec. 187. Certification of check; effect of. - Where a check is certified by the
bank on which it is drawn, the certification is equivalent to an acceptance.
Sec. 180. Liability of holder who indorses two or more parts of a set to
different persons. - Where the holder of a set indorses two or more parts to Sec. 188. Effect where the holder of check procures it to be certified. - Where
different persons he is liable on every such part, and every indorser the holder of a check procures it to be accepted or certified, the drawer and
subsequent to him is liable on the part he has himself indorsed, as if such all indorsers are discharged from liability thereon.
parts were separate bills.
Sec. 189. When check operates as an assignment. - A check of itself does
Sec. 181. Acceptance of bill drawn in sets. - The acceptance may be written not operate as an assignment of any part of the funds to the credit of the
on any part and it must be written on one part only. If the drawee accepts drawer with the bank, and the bank is not liable to the holder unless and until
more than one part and such accepted parts negotiated to different holders in it accepts or certifies the check.
due course, he is liable on every such part as if it were a separate bill.
XVII. GENERAL PROVISIONS
Sec. 182. Payment by acceptor of bills drawn in sets. - When the acceptor of
Sec. 190. Short title. - This Act shall be known as the Negotiable Instruments
a bill drawn in a set pays it without requiring the part bearing his acceptance
Law.
to be delivered up to him, and the part at maturity is outstanding in the hands
of a holder in due course, he is liable to the holder thereon. Sec. 191. Definition and meaning of terms. - In this Act, unless the contract
otherwise requires;
Sec. 183. Effect of discharging one of a set. - Except as herein otherwise
provided, where any one part of a bill drawn in a set is discharged by "Acceptance" means an acceptance completed by delivery or notification;
payment or otherwise, the whole bill is discharged.
"Action" includes counterclaim and set-off;
XVI. PROMISSORY NOTES AND CHECKS
"Bank" includes any person or association of persons carrying on the
Sec. 184. Promissory note, defined. - A negotiable promissory note within the business of banking, whether incorporated or not;
meaning of this Act is an unconditional promise in writing made by one
"Bearer" means the person in possession of a bill or note which is payable to Sec. 196. Cases not provided for in Act. - Any case not provided for in this Act
bearer; shall be governed by the provisions of existing legislation or in default thereof,
by the rules of the law merchant
"Bill" means bill of exchange, and "note" means negotiable promissory note;
Sec. 197. Repeals. - All acts and laws and parts thereof inconsistent with this
"Delivery" means transfer of possession, actual or constructive, from one
Act are hereby repealed.
person to another;
Sec. 198. Time when Act takes effect. - This Act shall take effect ninety days
"Holder" means the payee or indorsee of a bill or note who is in possession of
after its publication in the Official Gazette of the Philippine Islands shall have
it, or the bearer thereof;
been completed.
"Indorsement" means an indorsement completed by delivery;
Enacted: February 3, 1911
"Instrument" means negotiable instrument;
"Issue" means the first delivery of the instrument, complete in form, to a
person who takes it as a holder;
"Person" includes a body of persons, whether incorporated or not;
"Value" means valuable consideration;
"Written" includes printed, and "writing" includes print.
Sec. 192. Persons primarily liable on instrument. - The person "primarily"
liable on an instrument is the person who, by the terms of the instrument, is
absolutely required to pay the same. All other parties are "secondarily" liable.
Sec. 193. Reasonable time, what constitutes. - In determining what is a
"reasonable time" regard is to be had to the nature of the instrument, the
usage of trade or business with respect to such instruments, and the facts of
the particular case.
Sec. 194. Time, how computed; when last day falls on holiday. - Where the
day, or the last day for doing any act herein required or permitted to be done
falls on a Sunday or on a holiday, the act may be done on the next
succeeding secular or business day.
Sec. 195. Application of Act. - The provisions of this Act do not apply to
negotiable instruments made and delivered prior to the taking effect hereof.
chanrobles law