ACT NO.

2031 (a) At a fixed period after date or sight; or

February 03, 1911 (b) On or before a fixed or determinable future time specified
therein; or
THE NEGOTIABLE INSTRUMENTS LAW
(c) On or at a fixed period after the occurrence of a specified event
which is certain to happen, though the time of happening be
uncertain.
I. FORM AND INTERPRETATION
An instrument payable upon a contingency is not negotiable, and the
happening of the event does not cure the defect.

Section 1. Form of negotiable instruments. - An instrument to be

negotiable must conform to the following requirements:
Sec. 5. Additional provisions not affecting negotiability. - An
(a) It must be in writing and signed by the maker or drawer; instrument which contains an order or promise to do any act in
addition to the payment of money is not negotiable. But the
(b) Must contain an unconditional promise or order to pay a sum negotiable character of an instrument otherwise negotiable is not
certain in money; affected by a provision which:

(c) Must be payable on demand, or at a fixed or determinable future (a) authorizes the sale of collateral securities in case the instrument
time; be not paid at maturity; or

(d) Must be payable to order or to bearer; and (b) authorizes a confession of judgment if the instrument be not paid
at maturity; or
(e) Where the instrument is addressed to a drawee, he must be
named or otherwise indicated therein with reasonable certainty. (c) waives the benefit of any law intended for the advantage or
protection of the obligor; or

(d) gives the holder an election to require something to be done in

Sec. 2. What constitutes certainty as to sum. - The sum payable is a lieu of payment of money.
sum certain within the meaning of this Act, although it is to be paid:
But nothing in this section shall validate any provision or stipulation
(a) with interest; or otherwise illegal.
(b) by stated installments; or

(c) by stated installments, with a provision that, upon default in Sec. 6. Omissions; seal; particular money. - The validity and
payment of any installment or of interest, the whole shall become negotiable character of an instrument are not affected by the fact
due; or that:
(d) with exchange, whether at a fixed rate or at the current rate; or (a) it is not dated; or
(e) with costs of collection or an attorney's fee, in case payment shall (b) does not specify the value given, or that any value had been
not be made at maturity. given therefor; or

(c) does not specify the place where it is drawn or the place where it
is payable; or
Sec. 3. When promise is unconditional. - An unqualified order or
promise to pay is unconditional within the meaning of this Act (d) bears a seal; or
though coupled with:
(e) designates a particular kind of current money in which payment
(a) An indication of a particular fund out of which reimbursement is is to be made.
to be made or a particular account to be debited with the amount;
or But nothing in this section shall alter or repeal any statute requiring
in certain cases the nature of the consideration to be stated in the
(b) A statement of the transaction which gives rise to the instrument. instrument.
But an order or promise to pay out of a particular fund is not
unconditional.chan robles virtual law library
Sec. 7. When payable on demand. - An instrument is payable on
demand:
Sec. 4. Determinable future time; what constitutes. - An instrument (a) When it is so expressed to be payable on demand, or at sight, or
is payable at a determinable future time, within the meaning of this on presentation; or
Act, which is expressed to be payable:
(b) In which no time for payment is expressed.
Where an instrument is issued, accepted, or indorsed when overdue, Sec. 13. When date may be inserted. - Where an instrument
it is, as regards the person so issuing, accepting, or indorsing it, expressed to be payable at a fixed period after date is issued
payable on demand. undated, or where the acceptance of an instrument payable at a
fixed period after sight is undated, 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 not avoid the
Sec. 8. When payable to order. - The instrument is payable to order instrument in the hands of a subsequent holder in due course; but as
where it is drawn payable to the order of a specified person or to to him, the date so inserted is to be regarded as the true date.
him or his order. It may be drawn payable to the order of:

(a) A payee who is not maker, drawer, or drawee; or

Sec. 14. Blanks; when may be filled. - Where the instrument is
(b) The drawer or maker; or wanting in any material particular, the person in possession thereof
has a prima facie authority to complete it by filling up the blanks
(c) The drawee; or therein. And a signature on a blank paper delivered by the person
making the signature in order that the paper may be converted into
(d) Two or more payees jointly; or a negotiable instrument operates as a prima facie authority to fill it
up as such for any amount. In order, however, that any such
(e) One or some of several payees; or
instrument when completed may be enforced against any person
who became a party thereto prior to its completion, it must be filled
(f) The holder of an office for the time being.
up strictly in accordance with the authority given and within a
Where the instrument is payable to order, the payee must be named reasonable time. But if any such instrument, after completion, is
or otherwise indicated therein with reasonable certainty. negotiated to a holder in due course, it is valid and effectual for all
purposes in his hands, and he may enforce it as if it had been filled
up strictly in accordance with the authority given and within a
reasonable time.
Sec. 9. When payable to bearer. - The instrument is payable to
bearer:

(a) When it is expressed to be so payable; or Sec. 15. Incomplete instrument not delivered. - Where an
incomplete instrument has not been delivered, it will not, if
(b) When it is payable to a person named therein or bearer; or completed and negotiated without authority, be a valid contract in
the hands of any holder, as against any person whose signature was
(c) When it is payable to the order of a fictitious or non-existing placed thereon before delivery.
person, and such fact was known to the person making it so payable;
or

(d) When the name of the payee does not purport to be the name of Sec. 16. Delivery; when effectual; when presumed. - Every contract
any person; or on a negotiable instrument is incomplete and revocable until
delivery of the instrument for the purpose of giving effect thereto.
(e) When the only or last indorsement is an indorsement in blank. As between immediate parties and as regards a remote party other
than a holder in due course, the delivery, in order to be effectual,
must be made either by or under the authority of the party making,
drawing, accepting, or indorsing, as the case may be; and, in such
Sec. 10. Terms, when sufficient. - The instrument need not follow the case, the delivery may be shown to have been conditional, or for a
language of this Act, but any terms are sufficient which clearly special purpose only, and not for the purpose of transferring the
indicate an intention to conform to the requirements hereof. property in the instrument. But where the instrument is in the hands
of a holder in due course, a valid delivery thereof by all parties prior
to him so as to make them liable to him is conclusively presumed.
And where the instrument is no longer in the possession of a party
Sec. 11. Date, presumption as to. - Where the instrument or an whose signature appears thereon, a valid and intentional delivery by
acceptance or any indorsement thereon is dated, such date is him is presumed until the contrary is proved.
deemed prima facie to be the true date of the making, drawing,
acceptance, or indorsement, as the case may be. chanrobles law

Sec. 17. Construction where instrument is ambiguous. - Where the

language of the instrument is ambiguous or there are omissions
Sec. 12. Ante-dated and post-dated. - The instrument is not invalid therein, the following rules of construction apply:
for the reason only that it is ante-dated or post-dated, provided this
is not done for an illegal or fraudulent purpose. The person to whom (a) Where the sum payable is expressed in words and also in figures
an instrument so dated is delivered acquires the title thereto as of and there is a discrepancy between the two, the sum denoted by the
the date of delivery. words is the sum payable; but if the words are ambiguous or
uncertain, reference may be had to the figures to fix the amount;

(b) Where the instrument provides for the payment of interest,

without specifying the date from which interest is to run, the interest
runs from the date of the instrument, and if the instrument is thereof against any party thereto, can be acquired through or under
undated, from the issue thereof; such signature, unless the party against whom it is sought to enforce
such right is precluded from setting up the forgery or want of
(c) Where the instrument is not dated, it will be considered to be authority.
dated as of the time it was issued;

(d) Where there is a conflict between the written and printed

provisions of the instrument, the written provisions prevail; II. CONSIDERATION

(e) Where the instrument is so ambiguous that there is doubt Sec. 24. Presumption of consideration. - Every negotiable instrument
whether it is a bill or note, the holder may treat it as either at his is deemed prima facie to have been issued for a valuable
election; consideration; and every person whose signature appears thereon to
have become a party thereto for value.
(f) Where a signature is so placed upon the instrument that it is not
clear in what capacity the person making the same intended to sign, Sec. 25. Value, what constitutes. Value is any consideration
he is to be deemed an indorser; sufficient to support a simple contract. An antecedent or pre-existing
debt constitutes value; and is deemed such whether the instrument
(g) Where an instrument containing the word "I promise to pay" is is payable on demand or at a future time.
signed by two or more persons, they are deemed to be jointly and
severally liable thereon. Sec. 26. What constitutes holder for value. - Where value has at any
time been given for the instrument, the holder is deemed a holder
for value in respect to all parties who become such prior to that
time.
Sec. 18. Liability of person signing in trade or assumed name. - No
person is liable on the instrument whose signature does not appear
thereon, except as herein otherwise expressly provided. But one
who signs in a trade or assumed name will be liable to the same Sec. 27. When lien on instrument constitutes holder for value.
extent as if he had signed in his own name. Where the holder has a lien on the instrument arising either from
contract or by implication of law, he is deemed a holder for value to
the extent of his lien.

Sec. 19. Signature by agent; authority; how shown. - The signature of

any party may be made by a duly authorized agent. No particular
form of appointment is necessary for this purpose; and the authority Sec. 28. Effect of want of consideration. - Absence or failure of
of the agent may be established as in other cases of agency. consideration is a matter of defense as against any person not a
holder in due course; and partial failure of consideration is a defense
pro tanto, whether the failure is an ascertained and liquidated
amount or otherwise.
Sec. 20. Liability of person signing as agent, and so forth. - Where the
instrument contains or a person adds to his signature words
indicating that he signs for or on behalf of a principal or in a
representative capacity, he is not liable on the instrument if he was Sec. 29. Liability of accommodation party. - An accommodation party
duly authorized; but the mere addition of words describing him as an is one who has signed the instrument as maker, drawer, acceptor, or
agent, or as filling a representative character, without disclosing his indorser, without receiving value therefor, and for the purpose of
principal, does not exempt him from personal liability. lending his name to some other person. Such a person is liable on
the instrument to a holder for value, notwithstanding such holder, at
the time of taking the instrument, knew him to be only an
accommodation party.
Sec. 21. Signature by procuration; effect of. - A signature by
"procuration" operates as notice that the agent has but a limited
authority to sign, and the principal is bound only in case the agent in
so signing acted within the actual limits of his authority. III. NEGOTIATION

Sec. 30. What constitutes negotiation. - An instrument is negotiated

when it is transferred from one person to another in such manner as
Sec. 22. Effect of indorsement by infant or corporation.- The to constitute the transferee the holder thereof. If payable to bearer,
indorsement or assignment of the instrument by a corporation or by it is negotiated by delivery; if payable to order, it is negotiated by the
an infant passes the property therein, notwithstanding that from indorsement of the holder and completed by delivery.
want of capacity, the corporation or infant may incur no liability
thereon.

Sec. 31. Indorsement; how made. - The indorsement must be written

on the instrument itself or upon a paper attached thereto. The
Sec. 23. Forged signature; effect of. - When a signature is forged or signature of the indorser, without additional words, is a sufficient
made without the authority of the person whose signature it indorsement.
purports to be, it is wholly inoperative, and no right to retain the
instrument, or to give a discharge therefor, or to enforce payment
Sec. 32. Indorsement must be of entire instrument. - The Sec. 39. Conditional indorsement. - Where an indorsement is
indorsement must be an indorsement of the entire instrument. An conditional, the party required to pay the instrument may disregard
indorsement which purports to transfer to the indorsee a part only the condition and make payment to the indorsee or his transferee
of the amount payable, or which purports to transfer the instrument whether the condition has been fulfilled or not. But any person to
to two or more indorsees severally, does not operate as a whom an instrument so indorsed is negotiated will hold the same, or
negotiation of the instrument. But where the instrument has been the proceeds thereof, subject to the rights of the person indorsing
paid in part, it may be indorsed as to the residue. conditionally.

Sec. 33. Kinds of indorsement. - An indorsement may be either Sec. 40. Indorsement of instrument payable to bearer. - Where an
special or in blank; and it may also be either restrictive or qualified instrument, payable to bearer, is indorsed specially, it may
or conditional. nevertheless be further negotiated by delivery; but the person
indorsing specially is liable as indorser to only such holders as make
title through his indorsement.

Sec. 34. Special indorsement; indorsement in blank. - A special

indorsement specifies the person to whom, or to whose order, the
instrument is to be payable, and the indorsement of such indorsee is Sec. 41. Indorsement where payable to two or more persons. -
necessary to the further negotiation of the instrument. An Where an instrument is payable to the order of two or more payees
indorsement in blank specifies no indorsee, and an instrument so or indorsees who are not partners, all must indorse unless the one
indorsed is payable to bearer, and may be negotiated by delivery. indorsing has authority to indorse for the others.

Sec. 35. Blank indorsement; how changed to special indorsement. -

The holder may convert a blank indorsement into a special
indorsement by writing over the signature of the indorser in blank Sec. 42. Effect of instrument drawn or indorsed to a person as
any contract consistent with the character of the indorsement. 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
Sec. 36. When indorsement restrictive. - An indorsement is prima facie to be payable to the bank or corporation of which he is
restrictive which either: such officer, and may be negotiated by either the indorsement of the
bank or corporation or the indorsement of the officer.
(a) Prohibits the further negotiation of the instrument; or

(b) Constitutes the indorsee the agent of the indorser; or

Sec. 43. Indorsement where name is misspelled, and so forth. -
(c) Vests the title in the indorsee in trust for or to the use of some Where the name of a payee or indorsee is wrongly designated or
other persons. misspelled, he may indorse the instrument as therein described
adding, if he thinks fit, his proper signature.
But the mere absence of words implying power to negotiate does
not make an indorsement restrictive.

Sec. 44. Indorsement in representative capacity. - Where any person

is under obligation to indorse in a representative capacity, he may
Sec. 37. Effect of restrictive indorsement; rights of indorsee. - A indorse in such terms as to negative personal liability. robles virtual
restrictive indorsement confers upon the indorsee the right: law library

(a) to receive payment of the instrument;

(b) to bring any action thereon that the indorser could bring; Sec. 45. Time of indorsement; presumption. - Except where an
indorsement bears date after the maturity of the instrument, every
(c) to transfer his rights as such indorsee, where the form of the negotiation is deemed prima facie to have been effected before the
indorsement authorizes him to do so. instrument was overdue.

But all subsequent indorsees acquire only the title of the first
indorsee under the restrictive indorsement.
Sec. 46. Place of indorsement; presumption. - Except where the
contrary appears, every indorsement is presumed prima facie to
have been made at the place where the instrument is dated.
Sec. 38. Qualified indorsement. - A qualified indorsement constitutes
the 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 of similar import. Such an indorsement does Sec. 47. Continuation of negotiable character. - An instrument
not impair the negotiable character of the instrument. negotiable in its origin continues to be negotiable until it has been
restrictively indorsed or discharged by payment or otherwise.
Sec. 48. Striking out indorsement. - The holder may at any time strike Sec. 55. When title defective. - The title of a person who negotiates
out any indorsement which is not necessary to his title. The indorser an instrument is defective within the meaning of this Act when he
whose indorsement is struck out, and all indorsers subsequent to obtained the instrument, or any signature thereto, by fraud, duress,
him, are thereby relieved from liability on the instrument. or force and fear, or other unlawful means, or for an illegal
consideration, or when he negotiates it in breach of faith, or under
such circumstances as amount to a fraud.

Sec. 49. Transfer without indorsement; effect of. - Where the holder
of an instrument payable to his order transfers it for value without
indorsing it, the transfer vests in the transferee such title as the Sec. 56. What constitutes notice of defect. - To constitutes notice of
transferor had therein, and the transferee acquires in addition, the an infirmity in the instrument or defect in the title of the person
right to have the indorsement of the transferor. But for the purpose negotiating the same, the person to whom it is negotiated must have
of determining whether the transferee is a holder in due course, the had actual knowledge of the infirmity or defect, or knowledge of
negotiation takes effect as of the time when the indorsement is such facts that his action in taking the instrument amounted to bad
actually made. faith.

Sec. 50. When prior party may negotiate instrument. - Where an Sec. 57. Rights of holder in due course. - A holder in due course holds
instrument is negotiated back to a prior party, such party may, the instrument free from any defect of title of prior parties, and free
subject to the provisions of this Act, reissue and further negotiable from defenses available to prior parties among themselves, and may
the same. But he is not entitled to enforce payment thereof against enforce payment of the instrument for the full amount thereof
any intervening party to whom he was personally liable. against all parties liable thereon. robles virtual law library

IV. RIGHTS OF THE HOLDER Sec. 58. When subject to original defense. - In the hands of any
holder other than a holder in due course, a negotiable instrument is
Sec. 51. Right of holder to sue; payment. - The holder of a negotiable subject to the same defenses as if it were non-negotiable. But a
instrument may to sue thereon in his own name; and payment to holder who derives his title through a holder in due course, and who
him in due course discharges the instrument. is not himself a party to any fraud or illegality affecting the
instrument, has all the rights of such former holder in respect of all
parties prior to the latter.

Sec. 52. What constitutes a holder in due course. - A holder in due

course is a holder who has taken the instrument under the following
conditions: 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
(a) That it is complete and regular upon its face; shown that the title of any person who has negotiated the
instrument was defective, the burden is on the holder to prove that
(b) That he became the holder of it before it was overdue, and he or some person under whom he claims acquired the title as
without notice that it has been previously dishonored, if such was holder in due course. But the last-mentioned rule does not apply in
the fact; favor of a party who became bound on the instrument prior to the
acquisition of such defective title.
(c) That he took it in good faith and for value;

(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 V. LIABILITIES OF PARTIES
negotiating it.
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 of the payee and his then capacity to indorse.
Sec. 53. When person not deemed holder in due course. - Where an
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. 61. Liability of drawer. - The drawer by drawing the instrument
admits the existence of the payee and his then capacity to indorse;
and engages that, on due presentment, the instrument will be
accepted or paid, or both, according to its tenor, and that if it be
Sec. 54. Notice before full amount is paid. - Where the transferee dishonored and the necessary proceedings on dishonor be duly
receives notice of any infirmity in the instrument or defect in the taken, he will pay the amount thereof to the holder or to any
title of the person negotiating the same before he has paid the full subsequent indorser who may be compelled to pay it. But the
amount agreed to be paid therefor, he will be deemed a holder in drawer may insert in the instrument an express stipulation
due course only to the extent of the amount therefore paid by him. negativing or limiting his own liability to the holder.
Sec. 62. Liability of acceptor. - The acceptor, by accepting the And, in addition, he engages that, on due presentment, it shall be
instrument, engages that he will pay it according to the tenor of his accepted or paid, or both, as the case may be, according to its tenor,
acceptance and admits: and that if it be dishonored and the necessary proceedings on
dishonor be duly taken, he will pay the amount thereof to the
(a) The existence of the drawer, the genuineness of his signature, holder, or to any subsequent indorser who may be compelled to pay
and his capacity and authority to draw the instrument; and it.

(b) The existence of the payee and his then capacity to indorse.

Sec. 67. Liability of indorser where paper negotiable by delivery.

Where a person places his indorsement on an instrument negotiable
Sec. 63. When a person deemed indorser. - A person placing his by delivery, he incurs all the liability of an indorser.
signature upon an instrument otherwise than as maker, drawer, or
acceptor, is deemed to be indorser unless he clearly indicates by
appropriate words his intention to be bound in some other capacity.
Sec. 68. Order in which indorsers are liable. - As respect one another,
indorsers are liable prima facie in the order in which they indorse;
but evidence is admissible to show that, as between or among
Sec. 64. Liability of irregular indorser. - Where a person, not themselves, they have agreed otherwise. Joint payees or joint
otherwise a party to an instrument, places thereon his signature in indorsees who indorse are deemed to indorse jointly and severally.
blank before delivery, he is liable as indorser, in accordance with the robles virtual law library
following rules:

(a) If the instrument is payable to the order of a third person, he is

liable to the payee and to all subsequent parties. Sec. 69. Liability of an agent or broker. - Where a broker or other
agent negotiates an instrument without indorsement, he incurs all
(b) If the instrument is payable to the order of the maker or drawer, the liabilities prescribed by Section Sixty-five of this Act, unless he
or is payable to bearer, he is liable to all parties subsequent to the discloses the name of his principal and the fact that he is acting only
maker or drawer. as agent.

(c) If he signs for the accommodation of the payee, he is liable to all

parties subsequent to the payee.
VI. PRESENTATION FOR PAYMENT

Sec. 70. Effect of want of demand on principal debtor. - Presentment

Sec. 65. Warranty where negotiation by delivery and so forth. for payment is not necessary in order to charge the person primarily
Every person negotiating an instrument by delivery or by a qualified liable on the instrument; but if the instrument is, by its terms,
indorsement warrants: payable at a special place, and he is able and willing to pay it there at
maturity, such ability and willingness are equivalent to a tender of
(a) That the instrument is genuine and in all respects what it payment upon his part. But except as herein otherwise provided,
purports to be; presentment for payment is necessary in order to charge the drawer
and indorsers.
(b) That he has a good title to it;

(c) That all prior parties had capacity to contract;

Sec. 71. Presentment where instrument is not payable on demand
(d) That he has no knowledge of any fact which would impair the and where payable on demand. - Where the instrument is not
validity of the instrument or render it valueless. payable on demand, presentment must be made on the day it falls
due. Where it is payable on demand, presentment must be made
But when the negotiation is by delivery only, the warranty extends in
within a reasonable time after its issue, except that in the case of a
favor of no holder other than the immediate transferee.
bill of exchange, presentment for payment will be sufficient if made
within a reasonable time after the last negotiation thereof.
The provisions of subdivision (c) of this section do not apply to a
person negotiating public or corporation securities other than bills
and notes.
Sec. 72. What constitutes a sufficient presentment. - Presentment
for payment, to be sufficient, must be made:
Sec. 66. Liability of general indorser. - Every indorser who indorses
(a) By the holder, or by some person authorized to receive payment
without qualification, warrants to all subsequent holders in due
on his behalf;
course:
(b) At a reasonable hour on a business day;
(a) The matters and things mentioned in subdivisions (a), (b), and (c)
of the next preceding section; and (c) At a proper place as herein defined;
(b) That the instrument is, at the time of his indorsement, valid and
subsisting;
(d) To the person primarily liable on the instrument, or if he is absent drawer where he has no right to expect or require that the drawee
or inaccessible, to any person found at the place where the or acceptor will pay the instrument.
presentment is made.

Sec. 80. When presentment not required to charge the indorser. -

Sec. 73. Place of presentment. - Presentment for payment is made at Presentment is not required in order to charge an indorser where
the proper place: the instrument was made or accepted for his accommodation and he
has no reason to expect that the instrument will be paid if
(a) Where a place of payment is specified in the instrument and it is presented.
there presented;

(b) Where no place of payment is specified but the address of the

person to make payment is given in the instrument and it is there Sec. 81. When delay in making presentment is excused. - Delay in
presented; making presentment for payment is excused when the delay is
caused by circumstances beyond the control of the holder and not
(c) Where no place of payment is specified and no address is given imputable to his default, misconduct, or negligence. When the cause
and the instrument is presented at the usual place of business or of delay ceases to operate, presentment must be made with
residence of the person to make payment; reasonable diligence.

(d) In any other case if presented to the person to make payment

wherever he can be found, or if presented at his last known place of
business or residence. Sec. 82. When presentment for payment is excused. - Presentment
for payment is excused:

(a) Where, after the exercise of reasonable diligence, presentment,

Sec. 74. Instrument must be exhibited. - The instrument must be as required by this Act, cannot be made;
exhibited to the person from whom payment is demanded, and
when it is paid, must be delivered up to the party paying it. (b) Where the drawee is a fictitious person;

(c) By waiver of presentment, express or implied.

Sec. 75. Presentment where instrument payable at bank. - Where

the instrument is payable at a bank, presentment for payment must
be made during banking hours, unless the person to make payment Sec. 83. When instrument dishonored by non-payment. - The
has no funds there to meet it at any time during the day, in which instrument is dishonored by non-payment when:
case presentment at any hour before the bank is closed on that day
is sufficient. (a) It is duly presented for payment and payment is refused or
cannot be obtained; or

(b) Presentment is excused and the instrument is overdue and

Sec. 76. Presentment where principal debtor is dead. - Where the unpaid.
person primarily liable on the instrument is dead and no place of
payment is specified, presentment for payment must be made to his
personal representative, if such there be, and if, with the exercise of
reasonable diligence, he can be found. Sec. 84. Liability of person secondarily liable, when instrument
dishonored. - Subject to the provisions of this Act, when the
instrument is dishonored by non-payment, an immediate right of
recourse to all parties secondarily liable thereon accrues to the
Sec. 77. Presentment to persons liable as partners. - Where the holder. robles virtual law library
persons primarily liable on the instrument are liable as partners and
no place of payment is specified, presentment for payment may be
made to any one of them, even though there has been a dissolution
of the firm. Sec. 85. Time of maturity. - Every negotiable instrument is payable at
the time fixed therein without grace. When the day of maturity falls
upon Sunday or a holiday, the instruments falling due or becoming
payable on Saturday are to be presented for payment on the next
Sec. 78. Presentment to joint debtors. - Where there are several succeeding business day except that instruments payable on demand
persons, not partners, primarily liable on the instrument and no may, at the option of the holder, be presented for payment before
place of payment is specified, presentment must be made to them twelve o'clock noon on Saturday when that entire day is not a
all. holiday.

Sec. 79. When presentment not required to charge the drawer. - Sec. 86. Time; how computed. - When the instrument is payable at a
Presentment for payment is not required in order to charge the fixed period after date, after sight, or after that happening of a
specified event, the time of payment is determined by excluding the same time as if he were the holder, and the principal, upon the
day from which the time is to begin to run, and by including the date receipt of such notice, has himself the same time for giving notice as
of payment. if the agent had been an independent holder.

Sec. 87. Rule where instrument payable at bank. - Where the Sec. 95. When notice sufficient. - A written notice need not be signed
instrument is made payable at a bank, it is equivalent to an order to and an insufficient written notice may be supplemented and
the bank to pay the same for the account of the principal debtor validated by verbal communication. A misdescription of the
thereon. instrument does not vitiate the notice unless the party to whom the
notice is given is in fact misled thereby.

Sec. 88. What constitutes payment in due course. - Payment is made

in due course when it is made at or after the maturity of the Sec. 96. Form of notice. - The notice may be in writing or merely oral
payment to the holder thereof in good faith and without notice that and may be given in any terms which sufficiently identify the
his title is defective. instrument, and indicate that it has been dishonored by non-
acceptance or non-payment. It may in all cases be given by delivering
it personally or through the mails.

VII. NOTICE OF DISHONOR

Sec. 97. To whom notice may be given. - Notice of dishonor may be

given either to the party himself or to his agent in that behalf.
Sec. 89. To whom notice of dishonor must be given. - Except as
herein otherwise provided, when a negotiable instrument has been
dishonored by non-acceptance or non-payment, notice of dishonor
must be given to the drawer and to each indorser, and any drawer or Sec. 98. Notice where party is dead. - When any party is dead and his
indorser to whom such notice is not given is discharged. death is known to the party giving notice, the notice must be given
to a personal representative, if there be one, and if with reasonable
diligence, he can be found. If there be no personal representative,
notice may be sent to the last residence or last place of business of
Sec. 90. By whom given. - The notice may be given by or on behalf of the deceased.
the holder, or by or on behalf of any party to the instrument who
might be compelled to pay it to the holder, and who, upon taking it
up, would have a right to reimbursement from the party to whom
the notice is given. Sec. 99. Notice to partners. - Where the parties to be notified are
partners, notice to any one partner is notice to the firm, even though
there has been a dissolution.

Sec. 91. Notice given by agent. - Notice of dishonor may be given by

any agent either in his own name or in the name of any party
entitled to given notice, whether that party be his principal or not. Sec. 100. Notice to persons jointly liable. - Notice to joint persons
who are not partners must be given to each of them unless one of
them has authority to receive such notice for the others.

Sec. 92. Effect of notice on behalf of holder. - Where notice is given

by or on behalf of the holder, it inures to the benefit of all
subsequent holders and all prior parties who have a right of recourse Sec. 101. Notice to bankrupt. - Where a party has been adjudged a
against the party to whom it is given. bankrupt or an insolvent, or has made an assignment for the benefit
of creditors, notice may be given either to the party himself or to his
trustee or assignee.

Sec. 93. Effect where notice is given by party entitled thereto. -

Where notice is given by or on behalf of a party entitled to give
notice, it inures to the benefit of the holder and all parties Sec. 102. Time within which notice must be given. - Notice may be
subsequent to the party to whom notice is given. chanrobles law given as soon as the instrument is dishonored and, unless delay is
excused as hereinafter provided, must be given within the time fixed
by this Act.

Sec. 94. When agent may give notice. - Where the instrument has
been dishonored in the hands of an agent, he may either himself
give notice to the parties liable thereon, or he may give notice to his
principal. If he gives notice to his principal, he must do so within the
Sec. 103. Where parties reside in same place. - Where the person But where the notice is actually received by the party within the
giving and the person to receive notice reside in the same place, time specified in this Act, it will be sufficient, though not sent in
notice must be given within the following times: accordance with the requirement of this section.

(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. 109. Waiver of notice. - Notice of dishonor may be waived
either before the time of giving notice has arrived or after the
(b) If given at his residence, it must be given before the usual hours omission to give due notice, and the waiver may be expressed or
of rest on the day following. implied.

(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.
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 the signature of an indorser, it binds him only.
Sec. 104. Where parties reside in different places. - Where the
person giving and the person to receive notice reside in different
places, the notice must be given within the following times:
Sec. 111. Waiver of protest. - A waiver of protest, whether in the
(a) If sent by mail, it must be deposited in the post office in time to
case of a foreign bill of exchange or other negotiable instrument, is
go by mail the day following the day of dishonor, or if there be no
deemed to be a waiver not only of a formal protest but also of
mail at a convenient hour on last day, by the next mail thereafter.
presentment and notice of dishonor.
(b) If given otherwise than through the post office, then within the
time that 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. 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 does not reach the parties sought to be
charged.
Sec. 105. When sender deemed to have given due notice. - Where
notice of dishonor is duly addressed and deposited in the post office,
the sender is deemed to have given due notice, notwithstanding any
miscarriage in the mails. 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 control of the holder and not imputable to his default,
misconduct, or negligence. When the cause of delay ceases to
Sec. 106. Deposit in post office; what constitutes. - Notice is deemed operate, notice must be given with reasonable diligence.
to have 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. 114. When notice need not be given to drawer. - Notice of
dishonor is not required to be given to the drawer in either of the
following cases:
Sec. 107. Notice to subsequent party; time of. - Where a party
receives notice of dishonor, he has, after the receipt of such notice, (a) Where the drawer and drawee are the same person;
the same time for giving notice to antecedent parties that the holder
has after the dishonor. (b) When the drawee is fictitious person or a person not having
capacity to contract;

(c) When the drawer is the person to whom the instrument is

presented for payment;
Sec. 108. Where notice must be sent. - Where a party has added an
address to his signature, notice of dishonor must be sent to that
(d) Where the drawer has no right to expect or require that the
address; but if he has not given such address, then the notice must
drawee or acceptor will honor the instrument;
be sent as follows:
(e) Where the drawer has countermanded payment.
(a) Either to the post-office nearest to his place of residence or to the
post-office where he is accustomed to receive his letters; or

(b) If he lives in one place and has his place of business in another, Sec. 115. When notice need not be given to indorser. Notice of
notice may be sent to either place; or dishonor is not required to be given to an indorser in either of the
following cases:
(c) If he is sojourning in another place, notice may be sent to the
place where he is so sojourning.
(a) When the drawee is a fictitious person or person not having (e) By a release of the principal debtor unless the holder's right of
capacity to contract, and the indorser was aware of that fact at the recourse against the party secondarily liable is expressly reserved;
time he indorsed the instrument;
(f) By any agreement binding upon the holder to extend the time of
(b) Where the indorser is the person to whom the instrument is payment or to postpone the holder's right to enforce the instrument
presented for payment; unless made with the assent of the party secondarily liable or unless
the right of recourse against such party is expressly reserved.
(c) Where the instrument was made or accepted for his
accommodation.

Sec. 121. Right of party who discharges instrument. - Where the

instrument is paid by a party secondarily liable thereon, it is not
Sec. 116. Notice of non-payment where acceptance refused. - Where discharged; but the party so paying it is remitted to his former rights
due notice of dishonor by non-acceptance has been given, notice of as regard all prior parties, and he may strike out his own and all
a subsequent dishonor by non-payment is not necessary unless in subsequent indorsements and against negotiate the instrument,
the meantime the instrument has been accepted. except:

(a) Where it is payable to the order of a third person and has been
paid by the drawer; and
Sec. 117. Effect of omission to give notice of non-acceptance. - An
omission to give notice of dishonor by non-acceptance does not (b) Where it was made or accepted for accommodation and has
prejudice the rights of a holder in due course subsequent to the been paid by the party accommodated.
omission.

Sec. 122. Renunciation by holder. - The holder may expressly

renounce his rights against any party to the instrument before, at, or
Sec. 118. When protest need not be made; when must be made. -
after its maturity. An absolute and unconditional renunciation of his
Where any negotiable instrument has been dishonored, it may be
rights against the principal debtor made at or after the maturity of
protested for non-acceptance or non-payment, as the case may be;
the instrument discharges the instrument. But a renunciation does
but protest is not required except in the case of foreign bills of
not affect the rights of a holder in due course without notice. A
exchange. robles virtual law library
renunciation must be in writing unless the instrument is delivered up
to the person primarily liable thereon.

VIII. DISCHARGE OF NEGOTIABLE INSTRUMENTS

Sec. 123. Cancellation; unintentional; burden of proof. - A

cancellation made unintentionally or under a mistake or without the
Sec. 119. Instrument; how discharged. - A negotiable instrument is authority of the holder, is inoperative but where an instrument or
discharged: any signature thereon appears to have been cancelled, the burden of
proof lies on the party who alleges that the cancellation was made
(a) By payment in due course by or on behalf of the principal debtor; unintentionally or under a mistake or without authority.

(b) By payment in due course by the party accommodated, where Sec. 124. Alteration of instrument; effect of. - Where a negotiable
the instrument is made or accepted for his accommodation; instrument is materially altered without the assent of all parties
liable thereon, it is avoided, except as against a party who has
(c) By the intentional cancellation thereof by the holder; himself made, authorized, or assented to the alteration and
subsequent indorsers.
(d) By any other act which will discharge a simple contract for the
payment of money; But when an instrument has been materially altered and is in the
hands of a holder in due course not a party to the alteration, he may
(e) When the principal debtor becomes the holder of the instrument enforce payment thereof according to its original tenor.
at or after maturity in his own right.

Sec. 125. What constitutes a material alteration. - Any alteration

Sec. 120. When persons secondarily liable on the instrument are
which changes:
discharged. - A person secondarily liable on the instrument is
discharged:
(a) The date;
(a) By any act which discharges the instrument;
(b) The sum payable, either for principal or interest;
(b) By the intentional cancellation of his signature by the holder;
(c) The time or place of payment:
(c) By the discharge of a prior party;
(d) The number or the relations of the parties;
(d) By a valid tender or payment made by a prior party;
(e) The medium or currency in which payment is to be made; 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
(f) Or which adds a place of payment where no place of payment is the drawer. The acceptance must be in writing and signed by the
specified, or any other change or addition which alters the effect of drawee. It must not express that the drawee will perform his
the instrument in any respect, is a material alteration. promise by any other means than the payment of money.

BILLS OF EXCHANGE Sec. 133. Holder entitled to acceptance on face of bill. - The holder
of a bill presenting the same for acceptance may require that the
IX. FORM AND INTERPRETATION acceptance be written on the bill, and, if such request is refused,
may treat the bill as dishonored.

Sec. 126. Bill of exchange, defined. - A bill of exchange is an

unconditional order in writing addressed by one person to another, Sec. 134. Acceptance by separate instrument. - Where an acceptance
signed by the person giving it, requiring the person to whom it is is written on a paper other than the bill itself, it does not bind the
addressed to pay on demand or at a fixed or determinable future acceptor except in favor of a person to whom it is shown and who,
time a sum certain in money to order or to bearer. on the faith thereof, receives the bill for value.

Sec. 127. Bill not an assignment of funds in hands of drawee. - A bill Sec. 135. Promise to accept; when equivalent to acceptance. - An
of itself does not operate as an assignment of the funds in the hands unconditional promise in writing to accept a bill before it is drawn is
of the drawee available for the payment thereof, and the drawee is deemed an actual acceptance in favor of every person who, upon
not liable on the bill unless and until he accepts the same. the faith thereof, receives the bill for value.

Sec. 128. Bill addressed to more than one drawee. - A bill may be Sec. 136. Time allowed drawee to accept. - The drawee is allowed
addressed to two or more drawees jointly, whether they are partners twenty-four hours after presentment in which to decide whether or
or not; but not to two or more drawees in the alternative or in not he will accept the bill; the acceptance, if given, dates as of the
succession. day of presentation.

Sec. 129. Inland and foreign bills of exchange. - An inland bill of Sec. 137. Liability of drawee returning or destroying bill. - Where a
exchange is a bill which is, or on its face purports to be, both drawn drawee to whom a bill is delivered for acceptance destroys the same,
and payable within the Philippines. Any other bill is a foreign bill. or refuses within twenty-four hours after such delivery or within
Unless the contrary appears on the face of the bill, the holder may such other period as the holder may allow, to return the bill
treat it as an inland bill. accepted or non-accepted to the holder, he will be deemed to have
accepted the same.

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 Sec. 138. Acceptance of incomplete bill. - A bill may be accepted
drawee is a fictitious person or a person not having capacity to before it has been signed by the drawer, or while otherwise
contract, the holder may treat the instrument at his option either as incomplete, or when it is overdue, or after it has been dishonored by
a bill of exchange or as a promissory note. a previous refusal to accept, or by non payment. But when a bill
payable after sight is dishonored by non-acceptance and the drawee
subsequently accepts it, the holder, in the absence of any different
agreement, is entitled to have the bill accepted as of the date of the
Sec. 131. Referee in case of need. - The drawer of a bill and any first presentment.
indorser 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 or non-payment. Such person is
called a referee in case of need. It is in the option of the holder to Sec. 139. Kinds of acceptance. - An acceptance is either general or
resort to the referee in case of need or not as he may see fit. qualified. A general acceptance assents without qualification to the
order of the drawer. A qualified acceptance in express terms varies
the effect of the bill as drawn.

X. ACCEPTANCE
Sec. 140. What constitutes a general acceptance. - An acceptance to
pay at a particular place is a general acceptance unless it expressly
states that the bill is to be paid there only and not elsewhere. 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 and before the bill is overdue, to the drawee or some
person authorized to accept or refuse acceptance on his behalf; and
Sec. 141. Qualified acceptance. - An acceptance is qualified which is:
(a) Where a bill is addressed to two or more drawees who are not
(a) Conditional; that is to say, which makes payment by the acceptor partners, presentment must be made to them all unless one has
dependent on the fulfillment of a condition therein stated; authority to accept or refuse acceptance for all, in which case
presentment may be made to him only;
(b) Partial; that is to say, an acceptance to pay part only of the
amount for which the bill is drawn; (b) Where the drawee is dead, presentment may be made to his
personal representative;
(c) Local; that is to say, an acceptance to pay only at a particular
place; (c) Where the drawee has been adjudged a bankrupt or an insolvent
or has made an assignment for the benefit of creditors, presentment
(d) Qualified as to time; may be made to him or to his trustee or assignee.

(e) The acceptance of some, one or more of the drawees but not of
all.
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
Sec. 142. Rights of parties as to qualified acceptance. - The holder Sections seventy-two and eighty-five of this Act. When Saturday is
may refuse to take a qualified acceptance and if he does not obtain not otherwise a holiday, presentment for acceptance may be made
an unqualified acceptance, he may treat the bill as dishonored by before twelve o'clock noon on that day.
non-acceptance. Where a qualified acceptance is taken, the drawer
and indorsers are discharged from liability on the bill unless they
have expressly or impliedly authorized the holder to take a qualified
acceptance, or subsequently assent thereto. When the drawer or an Sec. 147. Presentment where time is insufficient. - Where the holder
indorser receives notice of a qualified acceptance, he must, within a of a bill drawn payable elsewhere than at the place of business or
reasonable time, express his dissent to the holder or he will be the residence of the drawee has no time, with the exercise of
deemed to have assented thereto. reasonable diligence, to present the bill for acceptance before
presenting it for payment on the day that it falls due, the delay
caused by presenting the bill for acceptance before presenting it for
payment is excused and does not discharge the drawers and
XI. PRESENTMENT FOR ACCEPTANCE indorsers.

Sec. 143. When presentment for acceptance must be made. -

Sec. 148. Where presentment is excused. - Presentment for
Presentment for acceptance must be made:
acceptance is excused and a bill may be treated as dishonored by
(a) Where the bill is payable after sight, or in any other case, where non-acceptance in either of the following cases:
presentment for acceptance is necessary in order to fix the maturity
(a) Where the drawee is dead, or has absconded, or is a fictitious
of the instrument; or
person or a person not having capacity to contract by bill.
(b) Where the bill expressly stipulates that it shall be presented for
(b) Where, after the exercise of reasonable diligence, presentment
acceptance; or
can not be made.
(c) Where the bill is drawn payable elsewhere than at the residence
(c) Where, although presentment has been irregular, acceptance has
or place of business of the drawee.
been refused on some other ground.
In no other case is presentment for acceptance necessary in order to
render any party to the bill liable.
Sec. 149. When dishonored by nonacceptance. - A bill is dishonored
by non-acceptance:

Sec. 144. When failure to present releases drawer and indorser. - (a) When it is duly presented for acceptance and such an acceptance
Except as herein otherwise provided, the holder of a bill which is as is prescribed by this Act is refused or can not be obtained; or
required by the next preceding section to be presented for
acceptance must either present it for acceptance or negotiate it (b) When presentment for acceptance is excused and the bill is not
within a reasonable time. If he fails to do so, the drawer and all accepted.
indorsers are discharged.
Sec. 150. Duty of holder where bill not accepted. - Where a bill is payable, and no further presentment for payment to, or demand on,
duly presented for acceptance and is not accepted within the the drawee is necessary.
prescribed time, the person presenting it must treat the bill as
dishonored by nonacceptance or he loses the right of recourse Sec. 157. Protest both for non-acceptance and non-payment. - A bill
against the drawer and indorsers. which has been protested for non-acceptance may be subsequently
protested for non-payment.

Sec. 151. Rights of holder where bill not accepted. - When a bill is
dishonored by nonacceptance, an immediate right of recourse Sec. 158. Protest before maturity where acceptor insolvent. - Where
against the drawer and indorsers accrues to the holder and no the acceptor has been adjudged a bankrupt or an insolvent or has
presentment for payment is necessary. made an 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 indorsers. robles virtual law library

XII. PROTEST

Sec. 159. When protest dispensed with. - Protest is dispensed with

by any circumstances which would dispense with notice of dishonor.
Sec. 152. In what cases protest necessary. - Where a foreign bill Delay in noting or protesting is excused when delay is caused by
appearing on its face to be such is dishonored by nonacceptance, it circumstances beyond the control of the holder and not imputable
must be duly protested for nonacceptance, by nonacceptance is to his default, misconduct, or negligence. When the cause of delay
dishonored and where such a bill which has not previously been ceases to operate, the bill must be noted or protested with
dishonored by nonpayment, it must be duly protested for reasonable diligence.
nonpayment. If it is not so protested, the drawer and indorsers are
discharged. Where a bill does not appear on its face to be a foreign
bill, protest thereof in case of dishonor is unnecessary.
Sec. 160. Protest where bill is lost and so forth. - When a bill is lost or
destroyed or is wrongly detained from the person entitled to hold it,
protest may be made on a copy or written particulars thereof.
Sec. 153. Protest; how made. - The protest must be annexed to the
bill or must contain a copy thereof, and must be under the hand and
seal of the notary making it and must specify:
XIII. ACCEPTANCE FOR HONOR
(a) The time and place of presentment;

(b) The fact that presentment was made and the manner thereof;
Sec. 161. When bill may be accepted for honor. - When a bill of
(c) The cause or reason for protesting the bill; exchange has been protested for dishonor by non-acceptance or
protested for better security and is not overdue, any person not
(d) The demand made and the answer given, if any, or the fact that being a party already liable thereon may, with the consent of the
the drawee or acceptor could not be found. holder, intervene and accept the bill supra protest for the honor of
any party liable thereon or for the honor of the person for whose
account the bill is drawn. The acceptance for honor may be for part
only of the sum for which the bill is drawn; and where there has
Sec. 154. Protest, by whom made. - Protest may be made by:
been an acceptance for honor for one party, there may be a further
(a) A notary public; or acceptance by a different person for the honor of another party.

(b) By any respectable resident of the place where the bill is

dishonored, in the presence of two or more credible witnesses.
Sec. 162. Acceptance for honor; how made. - An acceptance for
honor supra protest must be in writing and indicate that it is an
acceptance for honor and must be signed by the acceptor for honor.
Sec. 155. Protest; when to be made. - When a bill is protested, such chanrobles law
protest must be made on the day of its dishonor unless delay is
excused as herein provided. When a bill has been duly noted, the
protest may be subsequently extended as of the date of the noting.
Sec. 163. When deemed to be an acceptance for honor of the
drawer. - Where an acceptance for honor does not expressly state for
whose honor it is made, it is deemed to be an acceptance for the
Sec. 156. Protest; where made. - A bill must be protested at the honor of the drawer.
place where it is dishonored, except that when a bill drawn payable
at the place of business or residence of some person other than the
drawee has been dishonored by nonacceptance, it must be
protested for non-payment at the place where it is expressed to be
Sec. 164. Liability of the acceptor for honor. - The acceptor for honor
is liable to the holder and to all parties to the bill subsequent to the
party for whose honor he has accepted. Sec. 172. Payment for honor; how made. - The payment for honor
supra protest, in order to operate as such and not as a mere
voluntary payment, must be attested by a notarial act of honor
which may be appended to the protest or form an extension to it.
Sec. 165. Agreement of acceptor for honor. - The acceptor for honor,
by such acceptance, engages that he will, on due presentment, pay
the bill according to the terms of his acceptance provided it shall not
have been paid by the drawee and provided also that is shall have Sec. 173. Declaration before payment for honor. - The notarial act of
been duly presented for payment and protested for non-payment honor must be founded on a declaration made by the payer for
and notice of dishonor given to him. honor or by his agent in that behalf declaring his intention to pay the
bill for honor and for whose honor he pays.

Sec. 166. Maturity of bill payable after sight; accepted for honor. -
Where a bill payable after sight is accepted for honor, its maturity is Sec. 174. Preference of parties offering to pay for honor. - Where two
calculated from the date of the noting for non-acceptance and not or more persons offer to pay a bill for the honor of different parties,
from the date of the acceptance for honor. the person whose payment will discharge most parties to the bill is
to be given the preference.

Sec. 167. Protest of bill accepted for honor, and so forth. - Where a
dishonored bill has been accepted for honor supra protest or Sec. 175. Effect on subsequent parties where bill is paid for honor. -
contains a referee in case of need, it must be protested for non- Where a bill has been paid for honor, all parties subsequent to the
payment before it is presented for payment to the acceptor for party for whose honor it is paid are discharged but the payer for
honor or referee in case of need. honor is subrogated for, and succeeds to, both the rights and duties
of the holder as regards the party for whose honor he pays and all
parties liable to the latter.

Sec. 168. Presentment for payment to acceptor for honor, how

made. - Presentment for payment to the acceptor for honor must be
made as follows: Sec. 176. Where holder refuses to receive payment supra protest. -
Where the holder of a bill refuses to receive payment supra protest,
(a) If it is to be presented in the place where the protest for non- he loses his right of recourse against any party who would have been
payment was made, it must be presented not later than the day discharged by such payment.
following its maturity.

(b) If it is to be presented in some other place than the place where

it was protested, then it must be forwarded within the time specified
Sec. 177. Rights of payer for honor. - The payer for honor, on paying
in Section one hundred and four.
to the holder the amount of the bill and the notarial expenses
incidental to its dishonor, is entitled to receive both the bill itself and
the protest.
Sec. 169. When delay in making presentment is excused. - The
provisions of Section eighty-one apply where there is delay in
making presentment to the acceptor for honor or referee in case of
need. XV. BILLS IN SET

Sec. 178. Bills in set constitute one bill. - Where a bill is drawn in a
Sec. 170. Dishonor of bill by acceptor for honor. - When the bill is
set, each part of the set being numbered and containing a reference
dishonored by the acceptor for honor, it must be protested for non-
to the other parts, the whole of the parts constitutes one bill.
payment by him.

Sec. 179. Right of holders where different parts are negotiated. -

XIV. PAYMENT FOR HONOR
Where two or more parts of a set are negotiated to different holders
in due course, the holder whose title first accrues is, as between
such holders, the true owner of the bill. But nothing in this section
affects the right of a person who, in due course, accepts or pays the
Sec. 171. Who may make payment for honor. - Where a bill has been parts first presented to him.
protested for non-payment, any person may intervene and pay it
supra protest for the honor of any person liable thereon or for the
honor of the person for whose account it was drawn.
Sec. 180. Liability of holder who indorses two or more parts of a set Sec. 188. Effect where the holder of check procures it to be certified.
to different persons. - Where the holder of a set indorses two or - Where the holder of a check procures it to be accepted or certified,
more parts to different persons he is liable on every such part, and the drawer and all indorsers are discharged from liability thereon.
every indorser subsequent to him is liable on the part he has himself
indorsed, as if such parts were separate bills.

Sec. 189. When check operates as an assignment. - A check of itself

does not operate as an assignment of any part of the funds to the
Sec. 181. Acceptance of bill drawn in sets. - The acceptance may be credit of the drawer with the bank, and the bank is not liable to the
written on any part and it must be written on one part only. If the holder unless and until it accepts or certifies the check.
drawee accepts more than one part and such accepted parts
negotiated to different holders in 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 a bill drawn in a set pays it without requiring the part Sec. 190. Short title. - This Act shall be known as the Negotiable
bearing his acceptance to be delivered up to him, and the part at Instruments Law.
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 "Acceptance" means an acceptance completed by delivery or
discharged by payment or otherwise, the whole bill is discharged. notification;

"Action" includes counterclaim and set-off;

XVI. PROMISSORY NOTES AND CHECKS "Bank" includes any person or association of persons carrying on the
business of banking, whether incorporated or not;

"Bearer" means the person in possession of a bill or note which is

payable to bearer;
Sec. 184. Promissory note, defined. - A negotiable promissory note
within the meaning of this Act is an unconditional promise in writing
"Bill" means bill of exchange, and "note" means negotiable
made by one person to another, signed by the maker, engaging to
promissory note;
pay on demand, or at a fixed or determinable future time, a sum
certain in money to order or to bearer. Where a note is drawn to the "Delivery" means transfer of possession, actual or constructive, from
maker's own order, it is not complete until indorsed by him. one person to another;

"Holder" means the payee or indorsee of a bill or note who is in

possession of it, or the bearer thereof;
Sec. 185. Check, defined. - A check is a bill of exchange drawn on a
bank payable on demand. Except as herein otherwise provided, the "Indorsement" means an indorsement completed by delivery;
provisions of this Act applicable to a bill of exchange payable on
demand apply to a check. "Instrument" means negotiable instrument;

"Issue" means the first delivery of the instrument, complete in form,

to a person who takes it as a holder;
Sec. 186. Within what time a check must be presented. - A check
must be presented for payment within a reasonable time after its "Person" includes a body of persons, whether incorporated or not;
issue or the drawer will be discharged from liability thereon to the
extent of the loss caused by the delay. "Value" means valuable consideration;

"Written" includes printed, and "writing" includes print.

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 Sec. 192. Persons primarily liable on instrument. - The person
acceptance. "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

Sec. 196. Cases not provided for in Act. - Any case not provided for in
this Act shall be governed by the provisions of existing legislation or
in default thereof, by the rules of the law merchant.

Sec. 197. Repeals. - All acts and laws and parts thereof inconsistent
with this Act are hereby repealed.

Sec. 198. Time when Act takes effect. - This Act shall take effect
ninety days after its publication in the Official Gazette of the
Philippine Islands shall have been completed.