Requisites of Negotiability(W-U-P-O-A) **Read related sections in the NIL

1. It must be in WRITING and signed by the maker or drawer.

i. Writing

a) Sec. 191.Definition and meaning of terms

Sec. 191. Definition and meaning of terms. - In this Act, unless the contract otherwise requires:chanroblesvirtuallawlibrary

"Acceptance" means an acceptance completed by delivery or notification;

acceptance refers to the promise or act of a buyer who indicates his willingness to be bound by the terms and conditions
stipulated in a seller's offer. Acceptance is a necessary element of a legally binding contract. If there is no acceptance, there is no deal.

Yung acceptance po is about the willingness to be bound in there terms and conditions. In binding contract po Wala pong deal
Kung walang acceptance na naganap

"Action" includes counterclaim and set-off;

set-off and counter-claims are the cross-claims made by the defendant and these cross-claims cannot be contested unless they
are accompanied by the written statement

A counterclaim Means the defending party may have against an opposing party.

"Bank" includes any person or association of persons carrying on the business of banking, whether incorporated or not;

Bank” means a legal entity engaged in the business of accepting deposits and using such funds either in whole or in part to
make extensions of credit or investments for the account of the bank;

"Bearer" means the person in possession of a bill or note which is payable to bearer;

A person who holds something like bill or notes

anyone holding something, such as a check, promissory note, bank draft, or bond

"Bill" means bill of exchange, and "note" means negotiable promissory note;

"Delivery" means transfer of possession, actual or constructive, from one person to another;

The formal act of transferring a deed or the giving or yielding possession or control of something to another is called delivery.
Delivery may be in the form of words or acts. A delivery can be either absolute or conditional.

"Holder" means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof;

Holder means a person entitled in his own name to the possession of a negotiable instrument and to receive the amount due on
it.

"Indorsement" means an indorsement completed by delivery;

The placing of a signature on the back of a check, bill of exchange, or other negotiable instrument so as to make it cashable or
transferable.

"Instrument" means negotiable instrument;

negotiable promissory note, within the meaning of this act, is an unconditional promise in writing by one person to another,
signed by the maker

"Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder;
 an "issue" means a point disputed by parties to a lawsuit. Legal issue may also refer to either a person's lineal descendants or a
group of securities offered for sale. An issue of law is a question of how a law is applied rather than a question of fact.

"Person" includes a body of persons, whether incorporated or not;

"Value" means valuable consideration

The estimated or appraised worth of any object or property, calculated in money.

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

ii. Signed

a) As a rule, only persons whose signature appears on an instrument are liable thereon.

b) Except:

1. Sec. 18. Liability of person signing in trade or assumed name.

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 extent as if he had signed in his own name.
2. Sec. 19. Signature by agent; authority; how shown.
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 of the agent may be established as in other
cases of agency.
3. Sec. 23. Forged signature; effect of.
Sec. 23. Forged signature; effect of. - When a signature is forged or made 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 therefor, or to enforce
payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it
is sought to enforce such right is precluded from setting up the forgery or want of authority
When a person forges or makes a signature without their authority, it is not inoperative and cannot be obtained through or
under such signature. This is usually the case when a person seeks to enforce their rights against another party.
4. Sec. 134.Acceptance by separate instrument.
Sec. 134. Acceptance by separate instrument. - Where an acceptance is written on a paper other than the bill itself, it does not
bind the acceptor except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value

2. Must contain an UNCONDITIONAL promise or order to pay a sum certain in money.

i. Unconditional promise or order

a) Sec. 3. When promise is unconditional.

Sec. 3. When promise is unconditional. - An unqualified order or promise to pay is unconditional within the meaning of this Act
though coupled with:chanroblesvirtuallawlibrary

(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

(b) A statement of the transaction which gives rise to the instrument.

But an order or promise to pay out of a particular fund is not unconditional.chan robles virtual law library

b) Payment out of a particular fund

ii. Sum certain in money

a) Sec. 2. What constitutes certainty as to sum

Sec. 2. What constitutes certainty as to sum. - The sum payable is a sum certain within the meaning of this Act, although it is
to be paid:
 (a) with interest; or

(b) by stated installments; or

(c) by stated installments, with a provision that, upon default in payment of any installment or of interest, the whole shall
become due; or

(d) with exchange, whether at a fixed rate or at the current rate; or

(e) with costs of collection or an attorney's fee, in case payment shall not be made at maturity

b) Sec. 6 (b). Omissions; seal; particular money.

Sec. 6. Omissions; seal; particular money. - The validity and negotiable character of an instrument are not affected by the
fact that:chanroblesvirtuallawlibrary
(a) it is not dated; or
(b) does not specify the value given, or that any value had been given therefor; or
(c) does not specify the place where it is drawn or the place where it is payable; or
(d) bears a seal; or
(e) designates a particular kind of current money in which payment is to be made.
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 instrument.
c) Sec. 5 (d). Additional provisions not affecting negotiability.
Sec. 5. Additional provisions not affecting negotiability. - An instrument which contains an order or promise to do any act in
addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is
not affected by a provision which:chanroblesvirtuallawlibrary
(a) authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

(b) authorizes a confession of judgment if the instrument be not paid at maturity; or

(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 lieu of payment of money.

But nothing in this section shall validate any provision or stipulation otherwise illegal

3. Must be PAYABLE on demand, or at a fixed or determinable future time;

i. Demand

a) Sec. 7. When payable on demand.

Sec. 7. When payable on demand. - An instrument is payable on

demand:chanroblesvirtuallawlibrary

(a) When it is so expressed to be payable on demand, or at sight, or on presentation; or

(b) In which no time for payment is expressed.

Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or
indorsing it, payable on demand.

ii. Fixed time

iii. Determinable future time

a) Sec. 4. Determinable future time; what constitutes.

Sec. 4. Determinable future time; what constitutes. - An instrument is payable at a determinable future time, within the
meaning of this Act, which is expressed to be payable:chanroblesvirtuallawlibrary

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

(b) On or before a fixed or determinable future time specified therein; or

 (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.

An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect

b) Sec. 11. Date, presumption as to.

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 true date of the making, drawing, acceptance, or indorsement, as the case may be.

c) Sec. 17 (c). Construction where instrument is ambiguous.

Sec. 17. Construction where instrument is ambiguous. - Where the language of the instrument is ambiguous or there are
omissions therein, the following rules of construction apply:chanroblesvirtuallawlibrary

(c) Where the instrument is not dated, it will be considered to be dated as of the time it was issued;

d) Clauses

1. Acceleration clause. Sec. 2 (c). What constitutes certainty as to sum.

Sec. 2. What constitutes certainty as to sum. - The sum payable is a sum certain within the meaning of this Act, although
it is to be paid:chanroblesvirtuallawlibrary

(c) by stated installments, with a provision that, upon default in payment of any installment or of interest, the whole shall
become due; or

4. Must be payable to ORDER or to bearer;

i. Payable to bearer

a) Sec. 9. When payable to bearer.

Sec. 9. When payable to bearer. - The instrument is payable to

bearer:chanroblesvirtuallawlibrary

(a) When it is expressed to be so payable; or

(b) When it is payable to a person named therein or bearer; or

(c) When it is payable to the order of a fictitious or non-existing 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 any

person; or

(e) When the only or last indorsement is an indorsement in blank

ii. Payable to order

a) Sec. 8. When payable to order.;

Sec. 8. When payable to order. - The instrument is payable to order where it is drawn payable to the order of a specified
person or to him or his order. It may be drawn payable to the order of:chanroblesvirtuallawlibrary
(a) A payee who is not maker, drawer, or drawee; or
(b) The drawer or maker; or
(c) The drawee; or
(d) Two or more payees jointly; or
(e) One or some of several payees; or
(f) The holder of an office for the time being.
Where the instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable
certainty

5. Where the instrument is ADDRESSED to a drawee, he must be named or otherwise indicated therein with reasonable certainty.
i. Payee

a) Sections 8(d) and 8(e). When payable to order.

Sec. 8. When payable to order. - The instrument is payable to order where it is drawn payable to the order of a specified person
or to him or his order. It may be drawn payable to the order of:chanroblesvirtuallawlibrary

(d) Two or more payees jointly; or

(e) One or some of several payees; or

ii. Drawee

a) Sec. 128.Bill addressed to more than one drawee.

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 two or more drawees in the alternative or in succession

b) Sec. 130.When bill may be treated as promissory note.

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 person or a person not having capacity to contract, the holder may treat the instrument at his option either as
a bill of exchange or as a promissory note

When the drawer and the drawee of a bill are the same person, or when the drawee is a fictitious person or a person without
the legal capacity to contract, the holder may treat the instrument as a bill of exchange or a promissory note at his discretion.