cG

Ú

  Ú

 
Ú
  Contains all the Does not contain all
Ú 
 Ú   requisites of Sec.
1 of the N£L
the requisites of
Sec. 1 of the N£L
Transferred by Transferred by
negotiation assignment
HDC may have Transferee acquires
Ú
Ú better rights than rights only of his
transferor transferor
Prior parties Prior parties merely
Ú
 Ú 
 Ú warrant payment warrant legality of
c title
Yc Ñritten contract for the payment of Transferee has Transferee has no
money, by its form intended as right of recourse right of recourse
substitute for money and intended to against
pass from hand to hand to give the HDC intermediate
the right to hold the same and collect parties
the sum due. 
Yc £nstruments are negotiable when they 
conform to all the requirements  Ú
 Ú 
 Ú
prescribed by the N£L
Act 2031, 03
February 1911. 1.c issue
Yc Although considered as medium for .c negotiation
payment of obligations, negotiable .c presentment for acceptance in certain bills
instruments are not legal tender
{ec. .c acceptance
60, New Central Bank Act, R.A. 7653 .c dishonor by or acceptance
Yc Negotiable instruments shall produce the .c presentment for payment
effect of payment only when they have .c dishonor by nonpayment
been encashed or when through the
.c notice of dishonor
fault of the creditor they have been .c protest in certain cases
impaired.
Art. 1249, CC BUT a CHECK 10.c discharge
which has been cleared and credited to
the account of the creditor shall be
equivalent to a delivery to the creditor of
cash. †Ú Ú
 Ú 
 Ú 

1.c 3    a 6romise to pay
Ú
 Ú 
 Ú   money
Yc unconditional promise in writing made
The N£L applies only to instruments which by one person to another signed by
conform with the requisites laid ddown by the maker
Sec1 of the law. Should any of said Yc engaging to pay on demand, or at a
requisites be absent, the instrument would fixed or determinable future time a
not be negotiable and would therefore not be sum certain in money to order or to
governed by the N£L but by the general law bearer
on contracts. Yc where a note is drawn to the maker¶s
own order, not complete until
MICHAEL A. OSMEÑA v. CITIBANK (2004) indorsed by him
{ec. 184, NIL.
Ô
c

c
 
ccc

c c

c  
c c  c c 
c  c .c   m

 an order made by one

c  c c 
 c 
cc person to another to pay money to a third
Ô c 
c c 
c   c c 
c 

c person.
 c    c  c   c c  c   c c 
c
Yc unconditional order in writing
 
c
cc 
cc

c
c


cc
addressed by one person to another
c
c
c
signed by the person giving it
Yc requiring the person to whom it is
addressed to pay on demand or at a
fixed or determinable future time a
sum certain in money to order or to
bearer
{ec. 126, NIL.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
G c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 cG

6c m V bill of exchange drawn on .c Must contain an   
 
a bank payable on demand. 3  3

Yc ere acknowledgment of a dept
not a promise  should be an express
3 Ú    m

 promise on face of instrument to pay
Unconditional Unconditional order money.
promise Yc An unqualified order or promise to
£nvolves  parties £nvolves  parties pay is unconditional though coupled
Maker primarily Drawer only withV
Sec. 3, NILV
liable secondarily liable a.c An indication of a particular fund
nly 1 presentment Generally  out of which reimbursement is to
 for payment presentments  for be made, or a particular account
acceptance and for to be debited with the amount or
payment b.c A statement of the transaction
which gives rise to the
instrument.
3
 Yc an order or promise to pay out of a
particular fund is not unconditional.
A.c As regards promissory noteV Yc Ñord 6promise6 is not absolutely
1.c Promissor/maker necessary. Any expression equivalent
.c Payee  person to whom the promise to a promise is sufficient.
to pay is made. Yc As regards pills of exchange, words
which are equivalent to an order are
B.c As regards pill of exchangeV sufficient.
1.c Drawer  person who gives the order c    command or imperative
to pay. direction the instrument, by its
.c Drawee  addressee of the order. nature, demanding a right.
.c Payee  person to whom the c A mere request or authority to
payment is to be made. pay does not constitute an order.
c Although the mere use of polite
Yc    the payee of an instrument words like 6please6 does not of
who transfers it to another by signing it itself deprive the instrument of its
at the back thereof characteristics as an order, its
Yc   person to whom the language must clearly indicate a
indorser negotiates the instrument, who, demand upon the drawee to pay.
by such negotiation, becomes the holder Yc But The promise or order to pay, to
of the instrument. be unconditional, must be

 .
Yc Mere indication of the particular fund
out of which reimbursement is to be

  Ú
 made, or an indication of a particular

 account to be debited with the
1.c Must be in
  


  m  amount will not render the order

 
Yc No person liable on the instrument
whose signature does not appear
thereon.
Yc
ne who signs in a trade or
assumed name liable to same
extent as if he had signed in his own
name.
Sec. 18, NIL
Yc Signature of party may be made by
duly authorized agent no particular
form of appointment necessary.

Sec. 19, NIL
conditional.
Yc Neither does the recital of the
transaction for which the instrument
was issued make the promise or order
conditional.
Yc The fact that the condition appearing
on the instrument has been fulfilled
will not convert it into a negotiable
one.
METROPOLITAN BANK v. CA
Ô
c


c

cc
c

cc
c
Yc 6£n writing6  includes print written Ô
c 

c 
c 
c c 
 
c c c
cccc


c
c

cccc
or typed
cc
 
ccc Ôc c
Yc Signature, binding so long it is
intended or adopted as the
signature of the signer or made with
his authority.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
G
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 cG

.c 3


must be 
 c
cc
c c

 cc

c
c
c
Yc The sum payable is a sum c

c
certain, even if
Sec. 2, NILV 
a.c Ñith interest 
b.c By stated installments .c   3
   

c.c By stated installments with Yc 3ur6oseV £nforming the holder of the
acceleration clause instrument of the date when he may
d.c Ñith exchange, whether at a enforce payment thereof.
fixed rate or at the current rate Yc An instrument may be payableV
or
e.c Ñith costs of collection or a.c  

{ec. 7. NIL
attorney's fee. 1.c Expressed to be payable on
Yc A stipulation to pay a higher rate of demand, or at sight, or on
interest if the note is not paid or a presentation
lower rate if it is paid on or before .c No time for payment is
maturity does not render the expressed
instrument nonnegotiable. .c Ñhere an instrument is issued,
Yc A sum is certain if from the face of accepted, or indorsed when
the instrument it can be overdue, it is, as regards the
mathematically computed. person so issuing, accepting, or
 indorsing it, payable on demand.
 
.c Must be3


  
Yc Capable of being transformed into
money.
Yc instrument which contains an order
or promise to do an act in addition
 
  V Holder may
call for payment any time maker has
an option to pay at any time, and the
refusal of the holder to accept
payment will terminate the running of
to the payment of money  N
T interest, if any, but the obligation to
negotiable. pay the note remains.
Yc BUT £f the order or promise gives
the holder an election to require b.c

    
something to be done in lieu of c
nly on the stipulated date, and
payment of money, an instrument not before, may the holder
otherwise negotiable would not be demand its payment.
affected thereby.
Sec. 5, NIL c Should he fail to demand
6c But if the option is with the maker payment, the instrument
or person primarily liaple, becomes overdue but remains
instrument is N
T negotiable. valid and negotiable. £t is merely
 converted to a demand
INCITTI V. FERRANTE (1933) instrument.
Ô
c

c 


ccc

cc
c 

c c 
c c  c c 

c c c.c

   

   

 
c !c c 


c 
c c   c

ccc
c
c c    

     , if
Moneyc c 

c c
 c "c c c
expressed to be payable
Sec. 4,

c  c c c #
c c  c 
c
NILV
c 
c c !
c


$
c 
c

c c %
c c 
c c
c c $ 
c
 cc cccc

c 1.c At a fixed period after date of
c 

c 
c c 
c 
c c c sight

c c 

c 
c c  c 
c 
c .c
n or before a fixed or
c c 
c c%
c c
c
c
% 
c determinable future time
c
c!c
c c
c


c specified therein
 c





cc
c
c .c
n or at a fixed period after
&


c c
cc
c 
c c c
c the occurrence of a specified
c 
c 
c 
c c c 

c 
c event which is certain to
  c
c
cc $
cc$ 
c%
cc happen, though the time of

c c 
c 

c 
c  
c c 
c c c happening be uncertain.

c 
c 


c 
c 
c c 
c c
  c $ 
c c c c 
c 
 c c £f payable upon a contingency,
c 
c
%


c c 
c $ 
c c bot negotiable, and the happening

c  c 
c c
c 

c
c c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 cGG

of the event does not cure the or indulgence for an
defect. indefinite time depending on
his will, because with or
REHABILITATION FINANCE CORP. without this provision, the
V. CA.
cc 
c $
c c
c holder may always choose to

c 
c c 
c c c 
c 
c c be indulgent.
 c

cc%
c c


c
c c    Ñhere a note with a

c '
%(c c  c 

c )c *


c fixed maturity provides that the
)+c!
c c
 c
c

cc maker has the option to extend
!
c c ’omplete settlementc c 
c
time of payment until the
 ccc
cbeforecc
c
happening of contingency,

instrument NOT negotiaple. The
d.c Effect of
 
   
time for payment may never
c £f option
absolute or
come at all.
conditional to accelerate

maturity is on the 
 , still

NEG T£ABLE.
.c    3

      
Úc Maker may pay earlier than

  Must contain  
the date fixed but this
Ú

  
option, if exercised, would
Yc 

   serve as an
be a payment in advance
expression of consent that the
of a legal liability to pay. £t
instrument may pe transferred.
is still payable on the date
c But the instrument need not
fixed, and holder has no
follow the language of the
right to enforce payment
law any term which clearly
against the maker pefore
indicates an intention to
such date.
conform with the legal
c £f option to accelerate is on the
requirements is sufficient.
m  V

Úc £f option can be exercised CALTEX v. CA
only after the happening of Ô
c ,

c cÔ
c *
c',Ô*+c 
c
a specified event/act over 
cÔ
c
c $
c c
cc
which he has no control 

c  c
c

cc
c
 c

conditional, still c  c  c c 
c 
c c 
c
NEG T£ABLE. 
 -c
c c 
c .

.c Ô
c 
c
Úc £f option is unconditional, c c c  c 
c 
 c c 
c 
c c
time of payment is rendered , c c  c 
c c 

c 
c
uncertain, NOT negotiable.

c
 cc "cc
c ther instances where Ô
c 
 c  c /
 c c c
instrument still NEGOTIABLEV  
c c


c c
c
c c
c
Úc Ñhen option given to the  
c
cÔ
ccc
c cc c
holder to accelerate the 
ccc
cc c
c 
cc
maturity of an installment $
c 

 c 

c c  c c 
c

cc
c c
c $
c
c
note upon failure of the
c
maker to pay any
Traders Royal Bank v. CA
installment when due.
c 
c
c 
c $
cc 
c
Úc Acceleration, automatic .c c  
c 0 c  
c
upon default. ,  c 
c


c 
c

.c
Úc Acceleration by operation of 1
c
 c
c 
cc
c cc
law.  
c
c


c
c 
c
cc
  
c 

c
c !c 
c  c c
e.c Provisions   
     
 c   c   c $
c 
$
c c c

 
%
cc
c c
c 
cc
c
 
  V Negotiability not 
c 

cc
 c
affected. Effect is similar with Ô
c 
c c 
 c   c
that of an acceleration clause at   

c c 

c 
c c c 
c
the option of the 
 .  
c c c 

c c   
c c c
Úc Negotiability not affected, 
c  c 
c 2

c 

c c
even if the m   is given 
 c c 
c  
c
c c 
c
the option to extend time of  
c c  
c c 
c  
c c 
c
payment py mere inaction 

c c 
 c c 
c c  c

c  
c   c 
c c  c  c c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
GGc
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 cG

 

c c 
c 

c Ô c 


c c only to the person designated

 c c  c 
c c c 


c therein and is therefore non



c c c 


c c c c c c negotiable.

c c c 

c 

c 
c
c 
c c


cc
c
.c 3
      

   m
Yc 3

    , not  

negotiaple, because it does not
contain words of negotiability.
Yc Ñhere words 6or pearer6 printed
on a check are cancelled py the
drawer, instrument
negotiaple.
a.c 
 

 
Yc Sign the instrument at the lower
right-hand corner.
b.c 3
 
not Yc Ñhen negotiating, sign at the
pack same with indorsers.
Yc 
    may be c.c 
 
negotiated by mere delivery. Yc Name usually at the lower left-
c Ñhen instrument is payable  hand corner, or across the top.

 
Sec. 9, NILV Yc £f instrument addressed to
a.c Expressed to be so payable drawee, he must be named or
 exV 6£ promise to pay the indicated with reasonaple
bearer the sum«.6 certainty.
b.c Payable to a person named 
therein or bearer  ex. 
6Pay to A or bearer.6 
c.c Payable to the order of a 3
 Ú Ú Ú

fictitious person or non Ú
 ÚV
existing person, and such
fact was known to the
· c Authorizes sale of collateral securities
person making it so payable
 exV 6Pay to John Doe or
r c Authorizes confession of udgment if
instrument not paid at maturity
order.6
d.c Name of payee does not   c Ñaives the benefit of any law intended for
purport to be the name of the advantage or protection of the obligor
any person  exV 6Pay to or
cash6 6Pay to sundries.6 o c Gives holder election to require something
e.c
nly or last indorsement is to be done in lieu of payment of money.
an indorsement in blank.
if in addition to money  not N£
 Yc Negotiapility affected, when
ANG TEK LIAN v. CA (1950) instrument contains a promise or
c
!c
c
cc
c


cc c order to do any act in addition to
c c 
!c 
c c 



c c 
c !c the payment of money.
c c c c 
c 

c 


c c 
c 

c c
c


3c


c PNB v. MANILA OIL REFINING (1922)
c 
!c 
c c 



c c  
c 
c
c  c 
c 
c 
c c c 
$c  c c

cc
c  

cc&


c
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c  c c  c c 
c c c 
c 
c
c 
c 

c 
c c c 
c c .!

c  

c c 

c c 

c c




cc cc


cc



cc 
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c


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!c c   c c c 



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c 
c Ô
c ,
c

c  c c 4
c 
c c 
 c


c c $
c 
c  

c 

c c c c

$
cc ccc c cc
c
c
 
cc cccc 
c  c c c c 

c c 
c  c


c 'c c c 
+c c 5 c 4
c 
c
Yc    , negotiation c  c 
c $ c c $
c
%

c
 $
c
requires delivery and indorsement of c
the transferor.
c Ñhen instrument is payable  £n common law, two kinds of udgment by
  confessionV
a.c Drawn payable to the order Uc Judgment by 
 
  
of a specified person or to Uc Confession 

   
 
him or his order
Sec. 8, 
NIL. 
b.c Ñithout the words 6to 
order6 or 6to the order of,6 
the instrument is payable 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

 a.c immediate parties
 Ú Ú Ú
 b.c a remote party m m
 holder in
Ú

SEC. 6, NILV due course
Yc delivery, to be effectual, must be made
· c Nondating of the instrument by or under the authority of the party
r c Nonspecification of value given, or that making / drawing / accepting/indorsing
any value had been given Yc delivery may be shown to have been
conditional, or for a special purpose only,
  c Nonspecification of place where it is
and not for the purpose of transferring the
drawn or place where it is payable
property in the instrument
o c Bears a seal Yc PRESUMPT£ N  DEL£VERY
^ c Designation of particular kind of c Ñhere the instrument is no longer in
currency in which payment is to be the possession of a party whose
made signature appears thereon, a valid
 and intentional delivery by him is
 presumed until the contrary is proved
 c if it is in the hands of a HDC, the

 Ú 
Ú
SEC.17, presumption is conclusive
NILV c CamposesV Should an undelivered
 instrument come into the hands of a
· c Sum expressed in words takes holder in due course, the maker is
precedence over sum in numbers BUT liable to him regardless of any proof
where words are so ambiguous or of the lack of valid delivery.
uncertain, reference to the figures Yc PRESUMPT£
N AS T
DATE
should be made c Date is not an essential element of
r c Ñhere interest is stipulated, without negotiability
specification of the starting date, the
interest runs from the date of the
instrument, and if undated, from the
issue thereof
  c An undated instrument is considered
dated as of time issued.
c An undated instrument is considered
to be dated as of the time it was
issued
dEVELOPMENT BANK OF RIZAL VS. SIMA
WEI. & c 
c  c 
$

c c 
c 

c
o c Ñritten provisions prevail over printed 
c 
c 


c c 
c 

c 


c c 
c c
provisions  c c
c 

c#

$

c c
$

c
c
c

cc$
c

cc
c

c
^ c Ñhere the instrument is ambiguous as 
to whether it is a note or a bill, the

holder may treat it as either at his
Ú
Ú
election

 c Ñhen the capacity of signatory is not Yc Ñhen an instrument is transferred from
clear, he is to be deemed an indorser
one person to another as to constitute the
A c l£ promise to pay´ when signed by two transferee the holder thereof.
or more persons is deemed to be ointly
Yc £f payable to BEARER, negotiated by
and severally signed
delivery if payable to
RDER, negotiated

by indorsement of holder  delivery

Sec.30, NIL


Ú 
 SESBREÑO v. CA
 c 
c c 
c c 
c 

c 5 c 
c
 
c  c  

c c /
c c c 
c
 
Ú Ú  

"c c c c 
c 
c  c  

c
 
c c
%
c   c c 
c
 c 
c 
cc
c
cc
c 
c
Yc    means transfer of possession
c
of instrument by the maker or drawer,
WESTMONT BANK v. ONG (2002)
with    
  title to the
Facts : 6

c c
cc
cc
payee and recognize him as holder  c&
c 7!c)c
!c

c 
cc
c
thereof.
de la Victoria v. Burgos 
c c 6

c c c 

cc 7

c
c  c
Yc N£ incomplete and revocable until 
c  cc
c
!c c 
c8cÔ c
delivery for the   
 
 c  c c 
c  
c 9c 
c c
  thereto as between
Sec. 16, 

c 

c  c 

c 

c Ô c
NILV c  c c 
 c c c 
c c 
c $c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c



c !c  c c c 
c $ 
c c 
c c bearer, and may be negotiated by

!c  c 
c !c c  
c  c delivery

 

c
c 
c c cc
c c c
c c the holder may convert a blank

c  c
c c c :
$
c 

c indorsement into a special

 
c  c  
c c c 
c  c
;c 
c indorsement by writing over the
4
c 
!c 
c c c c 

c  c signature of the indorser in blank

c
cc
c!c

c c
any contract consistent with the
<c(c 8

c

c c
c $
cc
c

c
character of the indorsement
 c

c

cc c 
$
cc
c 

c c
c
c $
cc c
c  ccc 
c  
c
c
$
c c 
c  c  c
c c  c


c
c 
$
c 

c 
c 
c c 
c .c as to kind of title transferredV

!c c c

c c c c
c c

c  
c 2
$
c 
c $
c c 
c a.c restrictive  such indorsement eitherV

c  c c
$
c c
c 

c c 
$
c 1c prohibits further negotiation of
c 

c  c 
c c c instrument,

 cc Ô
c 
c  c  c $
c c  c c c constitutes indorsee as agent of
c
c
c c
c
ccc
 c indorser, or
cc
 
c  cc
c
c c cc c vests title in indorsee in trust
c
$
c c 
c  
c 
c c c 
c for another

c 
c $ $
c c 
c  cc
c c rights of indorsee in

c  c 
c 

c  c c 
c  
c c restrictive ind.V

$
c 
 c  c 
c 
c !c ac receive payment of

 
cc

c
c
!cc
$

cc inst.

c

c cc bc Bring any action
thereon that indorser
 could bring
Ú
 Ú cc Transfer his rights as
 such indorsee, but all
Yc The indorsement must be written on the subsequent indorsees
instrument itself or on a paper attached acquire only title of
thereto
allonge. The signature of the first indorsee under
indorser, without additional words, is restrictive
sufficient indorsement.
Sec.31, NIL indorsement
Yc £ndorser generally enters into two b.c nonrestrictive
contracts
£mplied contracts by
£ndorserV
1.c sale or assignment of instrument .c as to kind of liability assumed by indorser
.c to pay instrument in case of default a.c qualifiedconstitutes indorser as mere
of maker assignor of title
eg. lwithout
Yc £ndorsement must be of entire recourse´
{ec. 38, NIL
instrument
can¶t be indorsement of only b.c unqualified
part of amount payable, nor can it be to
two or more indorsees severally. But
okay to indorse residue of partially paid .c as to presence/absence of express
instrument
Sec. 32, NIL limitations put by indorser upon primary
obligor¶s privileges of paying the holderV

†Ú Ú
 Ú Sec. 33, a.c conditional  additional condition
NIL annexed to indorser¶s liability.
Sec.
c 39, NIL
1.c as to manner of future method of
c Ñhere an indorsement is
negotiation
{ec. 35, NILV
conditional, a party required to
pay the instrument may disregard
a.c  
 specifies the person to
the condition, and make payment
whom/to whose order the
to the indorsee or his transferee,
instrument is to be payable
whether condition has been
indorsement of such indorsee is
fulfilled or not
necessary to further negotiation.
c Any person to whom an
b.c 
  specifies no indorsee,
instrument so indorsed is
instrument so indorsed is payable to
negotiated will hold the

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

same/proceeds subect to rights note that Sec.  must be met at
of person indorsing conditionally the time of the negotiation, i.e.,
when indorsement is actually
b.c unconditional made.

.c other classificationsV .c 

       Holder

may strike out indorsements not
a.c Absolute 
ne by which the necessary to his title. The endorser
endorser binds himself to pay, upon whose endorsement was struck out, and
no other condition than the ¦ailure of all endorsers subsequent to him, are
prior parties to do so, and of due relieved from liability on the instrument
notice to him of such failure
Sec. 48, NIL
b.c Joint  Ñhere instrument payable to
the order of two or more payees or
  agent should
indorsees not partners, all must
indorse, unless the one indorsing
has authority to endorse for the
others
{ec. 41, NIL
.c     
make it plain that he is signing in behalf of
a principal otherwise he may be made
personally liable
c.c £rregular  Ñhere a person, not .c 3  
  
otherwise a party to the instrument, c Time
Sec.45, NIL  Every
places thereon his signature in blank negotiation deemed prima facie
before delivery, he is liable as effected before instrument was
indorser overdue, except where indorsement
bears date after maturity of the
instrument.
c Place
Sec.46, NIL  Every


 ÚÚ
 Ú indorsement is presumed prima facie
c made at place where instrument is
1.c     

 
 
  dated
holder deposits check with a bank other c Ñhere instrument drawn or indorsed
than the drawee, would in effect be
negotiating the check to such bank,
since he would have to indorse the
check before the bank will accept it for
deposit. £n most cases, the bank is
acting as a mere collecting agent.
.c Ú
to person as cashier
Sec.42, NIL 
deemed prima facie to be payable to
the bank or corporation of which he is
such officer may be negotiated by
either the indorsement
1 of the
bank or corporation or
 of the
officer.

      
 
  
3
      all must .c  
   Ú


 m

 
indorse, unless the one indorsing has   An N£, although overdue, retains its
authority to endorse for the others negotiability unless it has been paid or
restrictively indorsed to prevent further
.c       Ñhere negotiation
Sec. 47, NIL
holder of instrument transfers for value
without indorsing, transfer vests in
.c   
  
transfereeV c Ñhere an instrument payable to
bearer is indorsed specially, it may
a.c such title as transferor had therein, nevertheless be further negotiated by
subect to defenses and equities delivery
available to prior parties c Person indorsing specially liable as
c exV transferee can sue the indorser to only such holders as make
transferor, though he does not title through his indorsement
thereby automatically become a 
HDC
Îurpee v. Îurpee, 1936 
b.c right to have indorsement of 
transferor, after which, he becomes 
Ú 

a holder or possibly a HDC 
c or purposes of determining 

Sec. 191, NIL  Payee or indorsee
whether or not the transferee of a bill or note who is in possession of it, or
becomes a HDC after securing the bearer thereof.
the transferor¶s indorsement, 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c


$

c 
$
c c
c
!cc
$
c


 
Sec. 51, NIL $
cc c  c  
cc c c c 
c  c
  cc
ccc c cc
 c
1.c sue thereon in his own name  c c  c  c  c c 
c  
c
.c payment to him in due course 

ccc


c c
cc
discharges instrument c

cc
 c c
c

$c 
c c

5Ô6, c c 
c 


c c  
c c 
c


!c  c $ 
c
c 
c c 

c c c 
c



 c

c 
 
c c 
c 
c

      
 

 Ú
c c c 

c .
c  
c c c 

c c
 

Sec.52, NIL c $

c c  c 
c  c c c
HDC is one who has taken the instrument 

c 
$ c  
.c c c c c
under the following conditionsV !
c
c
!c.cc cc c$ 
c
c
1.c m
     
 

 ATRIUM MANAGEMENT vs CA (2001).
c
 
  
c c 
c 
c 
!c 

c  
c
Yc Ñhen is an instrument complete? £f 
!cc
 c 
c c
cc
an instrument contains all the 

3c c  c  c 
c 
c
requisites for making it a negotiable  c c 
c c 
c c  c 
c 
!c
one, it should be considered as 

c  c  c 
c  c c 

3c c
complete even if it may have blanks ,
 c
c  c c c 
c

c
as to nonessentials. c  
cc
c 
c
Yc Ñhen is an instrument £Ncomplete? c
Ñhen it is wanting in any material 2
$
c c 
c c  c c c
 c
particular or particular proper to be  c  c  c 

c 

c
inserted in a N£ without w/c the  c c c c  
c c 
c  
c  c
$c!
c
c  
c c 
c  c
same will not be complete.

c  c 
c 
c c  c 
c  c c
Yc Ñhat are material particulars? A

c c c 

c 6Ôc 2
 c  c c c
change in the ff. is considered a  

c 
 
c  c
$
c c 
c

 
alteration
Sec. 125,  
c Ô
c 
c 
c c  $
c  c c
NILV  
c c c 
c  
c c c
$
c c

c 
c
a.c The date 
b.c The sum payable, either for
Yc The ff. cannot be HDCsV
Sec. 53,
principal or interest
NIL
c.c The time or place of payment
c A holder who became such after
d.c The number or the relations of
the date of maturity of the
the parties
instrument
instrument is
e.c The medium or currency in
overdue
which payment is to be made NOTE: An overdue instrument is
f.c r which adds a place of still negotiable, but it is subject to
payment where no place of the de¦ense existing at the time
payment is specified, o¦ the trans¦er.
c £n case of demand instruments, a
£N GENERALV any other change or holder who negotiates it after an
addition which alters the effect of the unreasonable length of time after
instrument in any respect its issue
Yc An instrument is not invalid for the
reason only that it is ANTEDATED R
P STDATED provided not done for an
m

  m  
m 
  
 illegal or fraudulent purpose. The
  m
 m
   
 
 person to whom an instrument so

   enforce payment thereof dated is delivered acquires the title
according to its original tenor £ not a thereto as of the date of delivery.
party to the alteration.
Sec. 124, NIL
Sec.12, NIL

STELCO MARKETING vs CA (1992).
T

c c c
$

c  c 5Ô6, 3c

cc
c
!c
$
c
c!cc
c 
c before 
c  
3c



c c   c Ô

c c c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

.c m
m   

mÚ  c <c 
c
c 
c 
c 
!c

  c
ccÔ
c
$

cc
 c c
  c 6$
c

c 
c
a.c 
 
    
 
!c c $
c 8c c <c
Ñhere value has at any time 
c
c 
c
 
c
c
ccc
been given for the instrument,  c 6$
c c c  
c c 
c

!cc
c 
c>
c5
c)?c
the holder is deemed a HV in
c 
c 

c
 
c c
respect to all parties who
'
+c 

c  c  
c c
become such prior to that time

c c c 
c c 


c

Sec.26, NIL and  Ñhere  c c c c 
c c c
the holder has a lien on the  
cc
c 
c
instrument, he is deemed a HV #
$
c 5
c )@c c 
c 
c
to the extent of his lien  $
c 
c 
c c

Sec.27, NIL. 
c c 5 c 
c
Yc 3
3Ú  Every N£ c
c$

cc
c

9c
is deemed prima facie 
c
 cc

cc
ccc
issued for valuable 8c c<c
consideration and every
person whose sig appears Yc Bank credit as value  Ñhen
thereon to have become a the holder of a check deposits
party thereto for value it with his bank
assuming it

Sec. 24, NIL is not the drawee bank and
Yc    any consideration the bank credits it to his
sufficient to support a account, is the bank at this
simple contract. An stage a HV?
antecedent or preexisting
debt constitutes value, c Maority View È first
whether the instrument is money in is presumed to
payable on demand or at a be the first money paid
future time.
Sec.25, NIL out
c Minority View È as long
MERCHANTS¶ NATIONAL BANK as the balance in the
OF ST. PAUL v. STA. MARIA depositor¶s account
SUGAR CO. (1914) equals or exceeds the
& ccc
c
ccc amount of the instrument

c 

c  c c 
c deposited, the latter
c c c 
c 

c  c cannot be considered as
$ 
c 
c 

 c c 26*(c c Ô
c withdrawn for the


c c c 
c 
c c purpose of treating the
 c 
c c c c c
bank as a HV.
c 
c 
c c 
c 21c  c c
c
{o ¦ar, there has been

c $
c 
c c  
c  c
no decision by the {C on
$ 
c c 7c c 
c c c


 c 

c 
!
c c this issue.

c$ 
c c $
c
c
Ô
c

 c 
ccc
c c b.c 
Ú

c 
c 

c 
c c 
 c Yc    does not require
c c 


c c  c 
c  c actual knowledge of the exact

c cc
c 
c
c fraud that was practiced
Ô
c  c 
c 
c c 
c   
c knowledge that there was
c 
c  c 
c c
c  c something wrong about the



c c 
c c c c assignor¶s acquisition of title is
 c 
c !c c c c 
c 21c sufficient. The burden is upon
 c 
c c c  
c the defendant to show that
 c
c c4
c  c notwithstanding the

c


c  c 
c  c c 
c SUSP£C£ US C£RCUMSTANCES,

cc=
c
$

c it acquired the check in actual
c good faith.
de Ocampo & Co.
BAYANI VS. PEOPLE (2004) v. Gatchalian
Ô
c 

c c

c 
  c  c c 
c  c
c 


$
c 
c c c 8c 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

VICENTE R. dE OCAMPO & CO. v. c c
cc
cc
c c

$
c
GATCHALIAN, ET. AL. (1961) 
c 
!c  c c  c  
c

c 
cc c c
c

c c 

c
cccc2*,c
!

c c cc c c c Ô
c 
c 
c c  $
c  c c  
c
c !c 
c  
c 
c c  c c c c 2*,c c c c c 
c
c  c c c c 

 c c  $
c
$
c cB&Ccc
c 
c cc$ c
 c
c

c!
c
c
%c c
%
c  c
c 
c c Ô
c  c
 c c  
c c
c c c $
c c c  
c  c c c c

c 

9c  c c 
c 
c  
c c  c 
c 

c

c c  c  c 
c 

c  
c c 4
c c 


c c c c
c 
c  c 

c c 
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c/

c
 c c 
c  9c c c
c
c   c
ccc $
c
c YANG v. CA (2003)
c 
c    c  c  c c Ô
c

c
 
cc c
c

c  c

cc 
c
!c   c
>
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c  
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c ,7c 
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c ' c @+c !
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c



c c  c  
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c c c 


c c, c c!
c4 c
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c 
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c 
c c 
c  
c  c c 
!c
 
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c  
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c 
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c
c
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c c c c  c c c 
c c  
c 
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c

c c 
c  
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c 
c 

c c c $

c c  c

!ccccÔ
c 
cc


c Ô
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c c  c c 
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c c c c  c  c

cc
c
cc
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c 
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c   c 
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c
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cc

c 
cc
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cBataan C
ar, 
c
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ccc
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c ! c $ 
c

c cc cc cc
c c 
c $
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c c  c 
c


c  c c c 
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c c 
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c  c


c
 
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c

c
 
c  c 


c c 
c  c c 
c  c 
c
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c
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c c 

c  
c  c c 
c

c  c c 
c  c  c c 

c c c  c c  c c c
 
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c c c c  
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c  
c  c  c c
 
c c c  c  c c c Bataan C
ar


c  c c De


$
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$
cc
$
cc
c O’ampo & Co v Gat’alanc
c 
c 

c 

c c
$

c Ô
c c 
ccDe O’ampoc

 cc
c
ccc c c c Bataan C
ar 
c c 

c c
c  c 
c c  c

c 

c c c 
c
STATE INVESTMENT HOUSE v. IAC  c 
c  
c 
!c 

c 
$

c
(1989). c  c 

c c *$c 
c 

c
c 
!c  c )c  
c 
c c 
c 
c 

c c c !c c
c

c
c c  
c 
c  c c 
c  c 
c  
c 
c 
c
 c  c 
c 

c c c c  c c 
c 
!c c 
c c

c $

c c  c c ,

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c

ccc
 c  
c   c c 
c


c c  c c c c Yc A ÚÚÚ
 3Ú

$ $
c 
c c c 
c 
c that is the indorsee of a note
 
9c
cc
c
!c  c
c 
c issued by a buyer payable to
c c 
c c  c c  c the seller of goods is N T a


c
c 

c c
 
c  c c holder in good faith as to the
 c 
 

c c c
 c
buyer. £n case the goods sold


c c c c c c c
c
turn out to be defective, it

c c   c c c 
c

c
cannot recover the purchase
 c 
c  
c c 
c 
!c c c c
 
ccc c price of the goods from the
6
c c c c
!(cc
c
!c buyer.
Consolidated
c 
c 

c  c 
c Ac c 
c Plywood v. IÎC
 c c c c  c c !"c c c £n installment sales, the

ccc c
c
!c
$
cc buyer usually issues a
c  c c 
c  
c  c 
c 
!c note payable to the seller
c

c 
c c c

c  
c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
 c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

to cover the purchase Yc Ñhere the transferee receives
price. notice of any infirmity in the
c Many times, pursuant instrument or defect in the
to a previous title of the person negotiating
arrangement with the the same before he has paid
seller, a finance the full amount agrees to be
company pays the full paid therefor, he will be
price of the property deemed a holder in due
sold and the note is course only to the extent of
indorsed to it by the the amount theretofore paid
seller, subrogating it to by him. DSec. 54, NIL)
the right to collect the
price from the buyer. Yc Constructive notice not
c RULE È £n such cases, sufficient Just as a
the tendency of the purchaser of a negotiable
courts is to protect the instrument is not put on
buyer against the inquiry, neither is he charged
finance company in the with notice of defenses or
event that the goods equities disclosed by public
sold turn out to be records, nor is he affected by
defective. The finance the doctrine of lis pendens.
company will be subect However, notice to an agent
to the defense of failure is chargeable against the
of consideration and principal.
cannot recover the
purchase price from the
buyer. N TEV .c m

     
 

  
Consolidated Plywood v. m m m
  
£C È rule applied 
Salas v. CA È rule not a.c any infirmity in instrument
applied b.c any defect in title of person
negotiating title    
SALAS v. CA (1990). c c  c when
Sec. 55, NILV

c  c c 
  c c 1.c instrument / signature
c c 
c 8c c 
c c 
c obtained by fraud, duress,

c


c  c force or fear or other unlawful

  c c Ô
c 8c c
means R for an illegal


c c  

cc
consideration or
Ô


c 
c  

c c c
2*,c $c !
c 
c  
c .c instrument is negotiated in

c 
c  c (c '+c breach of faith, or fraudulent
cc

c c
  cc c circumstances

"c ')+c c 

c 
c  
c


c 

c c c $

"c 'D+c Yc Ú of infirmity or defect 
c !c 
c 
c c c  c c actual knowledge of the infirmity
 c $ 
"c c '@+c 
c c c or defect R knowledge of such


c c 
c  

c 
c facts that his action in taking the

c cc
ccc c instrument amounted to bad faith
c 
c  
c  c 

c c 
c
Sec.56, NIL

cc
c
$c 
c Yc Ñhat are the rights of a
transferee who receives Ú
Yc Purchase of an instrument of any infirmity or defect  

at a  Ú does not, he has 3    amount

of itself, constitue bad faith. for the instrument? He will be
However, if the instrument deemed a HDC only to the extent
is pruchased at a heavy of the amount therefore paid by
discount, this fact together him
Sec.54, NIL
with other facts, mey be Yc Ú 
  Ú 
ex.
taken into account in notice of defenses disclosed by
deciding the issue of public records, doctrine of lis
purchase in good faith. pendens is not sufficient to

am v. eritt charge a purchaser of a N£ with

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã

c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

notice. However, notice to an

 
Ú 


Ú is chargeable against
the principal. · c to  on the instrument in his own name
Yc Notice of an Ú
Sec. 51, NIL
3
 is not notice of a defect. r c to    
  on the instrument 
Thus, an accomodation party discharges the instrument DSec. 51, NIL

one who has signed the
  c holds instrument   
    of
instrument as maker, drawer,
title of prior parties
Sec. 57, NIL
acceptor or endorser, without
receiveing value therefor, and
o c        available to prior
parties among themselves DSec.57, NIL
for the purpose of lending his
name to some other person is ^ c 
   
  of instrument for
liable on the instrument, full amount, against all parties liable
notwithstanding the fact that DSec.57, NIL
the holder knew him to be an  
BPI v. ALFREd BERWIN & CO.  cc2*,cc
accomodation party.

 
c
cc
c8c
c,7cccc
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cc'
c

+cc c
c2*,c
c*c'
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Yc The status of a holder as a HDC is not
affected by his taking under a 
 
indorsement.

 3



Ú
Yc A   
indorsement does not  

Sec.58, NIL
deprive the conditional indorsee or
subsequent holder of the rights of a
Yc
 

  £n the hands of any holder
HDC. £f he fulfills all the requisites in
other than a HDC, N£ is subect to same
Sec.  then he is immune from all the
defenses as if it were nonnegotiable.
personal defense.
Yc A     indorsement which Yc    A holder who derives title
prohibits further negotiation will not through a HDC and who is N T himself A
prevent the indorsee from being a HDC. PARTY T ANY RAUD or illegality has all
BUT, if he further indorses the rights of such former holder in respect to
instrument, then the subsequent all parties prior to the latter EVEN though
indorsee will not be a due course holder. he himself does not satisfy Sec.



   
 Ú 3
3ÚÚ
 

3

Sec.59, NIL Ú


Every holder is deemed prima facie to be a
Yc
 



 Prima facie presumption
in favor of holder
Yc    Burden is reversed
burden
on holder to prove that he or some
person under whom he claims acquired
title as HDC when it is shown that the
title of any person who has negotiated
instrument was defective
Yc        There will be
no reversal if the party being made
liable became bound prior to the
acquisition of such defective title
i.e.,
where defense is not his own 
holder in due course but when it is shown
that the title of any person who has
negotiated the instrument was defective, the
burden is on the holder to prove that he or
some person under whom he claims acquired
the title as a holder in due course. But the
last mentioned rule does not apply in favor of
a party who became bound on the instrument
prior to the acquisition of such defective title.
Sec.59., NIL

ASIA BANKING CORP. v. TAN SEN GUAN
(1923).
c c 
c c c c 
c
$

c 
c c
presumption in favor of holder  c c
c  cc c c c
c  

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c
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 cG

Ô
c   c  c c c 
c
$

c c 3   Ú 

cc c
c

cc
c cc
c 


c c  c c  c   c 

$

c c 
c c
% c 
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  Ú 
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Ú3  REAL defense but available

c  c


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c
only to the incapacitated party
ex. minor or


c  c c  c c 
c  c c
corporation the indorsement or assignment

c
$

cc
cc
of the instrument by a corp. or by an infant
passes the property therein, notwithstanding
that from want of capacity, the corp. or infant
may incur no liability thereon.
Sec.22, NIL

  Ú    MURRAY v THOMPSON (1916).
c c c
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c 
c  c 
c  

c c 
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c
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c  c c
 
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    attaches to instrument   cc
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Ôc 
ccc
on the principle that there was no Ô
c c c 
c  c c 
c $
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contract at all available against ALL   c 
cc
holders including holders in due course. Ô
c c 
c c c 

c c  $
c  c
They are those which attach to the 
c  

c   c 

c 
c 
c c 
c
instrument itself and generally, disclose  
c c 
c 


c c c 
c
an absence of one of the essential c  c c !
c 
c c c  

c c

$
c
c
elements of a contract.
.c 3
Ú    grows out of the 
agreement or conduct of a particular 
person in regard to the instrument which 
Ú3  Ú 
Ú 
 Ú
renders it inequitable  R H£M, though
holding the legal title, to enforce it Yc £nstrument will not, if completed and
against the party sought to be made negotiated without authority, be a valid
liable not available against a HDC.can contract in the hands of ANY holder, as
be raised only against holders not on against any person whose signature was
due course. Here, the true contract placed thereon before delivery.
Sec. 15,
appears , but for some reason , the NIL
defendant is excused from the obligation Yc Ñho may be esto66ed ¦rom raising the
to perform. real de¦ense under {ec 15?A drawee bank
whose negligent custody of the checks,
after partial execution, contributed to its
escape
  
     Ú
3

†Ú V

1.c 

  one who has legal title to the 3
Ú  Ú 
instrument may recover possession 
thereof even from holder in due course 
.c  
  may only recover from a 3  Ú 
Ú 
 Ú
holder not in due course Yc C NCLUS£VE presumption of a valid
 delivery  where the instrument is in the
 hands of a HDC
 Yc PR£MA AC£E presumption of a valid
 delivery  where the instrument is no
 longer in the possession of a party whose
 sig appears thereon
Sec. 16, NIL
 
 
 
 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

Ú3   
DSec.14, NIL business
if any with
Yc This is a personal defense only because respect to such
provision states that if any instrument instruments, and  the
so completed is negotiated to a holder in facts of the particular
due course , it is valid and effectual for case
all purposes. Yc BUT if negotiated to HDC,
Yc  Kinds of ÑritingsV may enforce it as if it had
a.c Ñhere instrument is 
 
  been filled up properly

 
 
 
 
V person Yc Ñhat details may be ¦illed u6?
in possession has prima facie  c Amount, as to a signed
authority to complete it by filing blank 6a6er
up blanks therein  c Date D{ec 13 ³« The
b.c

   
 
  insertion o¦ a wrong
delivered by person making the date does not void the
signature £N RDER that the instrument in the
paper may be C NVERTED into a hands o¦ a subsequent
N£ È operates as prima facie holder in due course«´
authority to fill up as such for any  c 3lace o¦ 6ayment
amount  c Name o¦ 6ayee
Yc The authority to fill up is
limited by the followingV 
+c Ñhen completed, it may 
be enforced upon the †Ú 
Ú DSec. 28, NIL
parties thereto only if it Yc ABSENCE or failure of consideration is a
was filled strictly in matter of defense as against any person
accordance with the not a HDC.
authority given Yc PART£AL A£LURE of consideration is a
)+c The filling up must be defense pro tanto whether the failure is an
within a reasonable time ascertained and liquidated amount or
otherwise .
NOTE: I¦ the signature on a c c
6a6er is given only ¦or c
autogra6h 6ur6oses and the c
same is converted into a NI, 

this will amount to ¦orgery, Yc £n general, a PERS NAL defense even if
constituting thus a valid CC10 provides that a contract with an
de¦ense even against a HDC illegal cause is void.

Yc This provision contemplates ROdRIGUEZ v MARTINEZ (1905).cc#!
cc
delivered instruments , so the 
c

$
c c
c ccc
c  
c
person in possesion cannot be 
c c c 
c 
c 

c c $
c 

c
a thief or a finder but a
%

c cc  c
c'

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 c c 


c  c c c  
c c c
person in lawful possession

c 
+cc
one to whom the instrument
Ô
c  
c c
c $ 
c c
c 
cc c 
c
has been delivered.  
cc2
c cc c 
c 
c c
cc
Yc £n order that any such  c 
c 
c c c   c  c 2
c 

c
instrument, when completed, 
c c c  c c 

$c 
c 
c c $ c
may be enforced against any c 
ccÔ
c!
c
$
cassuredc
c
person who became a party  
c

c
c  
c c
c
ccc
thereto prior to its c c
c ccccccc
completionV
1c must be filled up strictly Yc REAL when the law expressly provides for
in accordance w/ illegality as a real defense
Statutory
AUTH R£TY given declaration of illegality
c within a REAS NABLE
T£ME  in determining
what is reasonable
time, regard is to be
had to the
1 nature of
the instrument,

usage of trade or

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

Yc ne view holds that a forged

 signature cannot be ratified because
Yc £n general, PERS NAL defense. ratification involves the relation of
Yc REAL if duress so serious as to give rise agency and a forger does not assume
to a real defense for lack of contractual to act for another.
intent Yc Ñhere an instrument is generally
Yc CAMP SV Normally, fraud is a personal payable to  

, the holder who
defense as it is considered as a defect in did not know of the forgery can still
title under Sec . There may be cases enforce it against the drawer or
where the duress employed is so serious maker because he can cancel the
that it will give rise to a real defense forged indorsement as not being
because of the lack of contractual intent necessary to his title.
Sec. 
, N£L
. Although the signer may know what he
Yc Ñhat happens when there is
is signing , there may be wanting the
acceptance and payment of a forged
intent or willingness to be bound. Then
instrument? The rights and liabilities
it becomes a real defense.
of the parties depend on whether the
forgery pertains to the
drawer/maker¶s signature or merely of
an indorsement.
  

  3
Ú

 3Ú   3 Ú Ú


 †   Ñhat happens when a forged




Sec. 23, NILV made without
instrument is accepted and paid?
authority of person whose signature it

ac Ñhen it is the sig of the
purports to be
drawer/maker that is forgedV
Yc £n general, a REAL defenseV « 3RICE v NEAL, The drawee who
Effects had 6aid an acce6ted bill as well
1.c signature is wholly inoperative as a non-acce6ted bill, each o¦
.c ñ


ñ
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which was ¦orged, could NOT

 
 

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recover the money 6aid out on
ñ
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the bill. The neglect was on the
 
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6art o¦ the drawee.




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RP v EQUITABLE, BPI (1964).
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bc Give a discharge there for 

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PNB v CA (1968).
Yc PERS NAL if the party against
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{ec. 62, NIL 
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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Yc Overdraft occurs when a

 
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(c :unless the party against whom it is has in de6osit with the
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from setting up the forgery or want of drawee who 6ays the holder
authority.;c
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SAMSUNG CONSTRUCTION CO., INC. VS. to 6ay the check. a LE: The
FAR EAST BANK ANd TRUST CO. ANd CA drawee bank is bound to
(2004). ¦ollow the order, 6rovided it is
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

 
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a bearer instrument, because the
ñ
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after the bank has holder¶s title
certified or accepted the c £ndorsement forged by an
check, the bank is employee or agent of the drawer
under the legal duty to c £f due to the drawer¶s negligence
pay the holder and will /delay, the forgery is not
not be liable to the discovered until it is too late for
drawer for doing so. the bank to recover from the
holder or the forger
E¦¦ect O¦ Negligence O¦
De6ositor - I¦ 6roximate cause
dc m  
  
    
o¦ loss, the bank Ddrawee is m  
not liable. c £f drawee fails to act promptly ,
Yc £t is the duty of the if he delays in informing the
depositor/drawer to holder whom he paid
carefully examine bank¶s c Ñhere the instrument is
statements, cancelled originally a bearer instrument ,
checks, his check stubs, and because the indorsement can be
other pertinent records disregarded as being unnecessary
within a reasonable time to the holder¶s title
and to report any errors
without unreasonable delay.
ec    
  


Yc £f a drawer/depositor¶s   


negligence and delay should c Ñhere the negligence of the
cause a bank to honor a drawee bank is the proximate
forged check, drawer cannot cause of the collecting bank¶s
later complain should bank payment of a check with a forged
refuse to recredit his indorsement , the drawee bank
account. may be held liable to the
collecting bank .

bc Ñhen it is the 
  m    c Ñhen both are guilty of
that is forged  drawee and drawer negligence , the degree of
CAN recover vs holder negligence of each will be
a.c The drawee can recover the weighed in considering the
amount paid by him in cases amount of loss which each should
where only an indorsement has bear .
been forged . This is because 
drawee makes no warranty as 
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indorsement. (1933).c c c 
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b.c Generally, the drawee may only 
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

 Ú

Ú 

 drawer leaves spaces making it possible to
Ú 

Ú
 Ú  insert figures BUT the drawer is not
Ú †  bound to so prepare the check that
nobody else can successfully tamper with
 it
ex. a drawer cannot be expected to


Ú
Sec.124, NIL foresee that his clerk will use acid to alter
his checks,     m  
 Ú
 
1.c PERS NAL defense when used to deny 

liability according to the tenor of the c The general rule is that the drawee
instrument cannot charge against the drawer¶s
.c REAL defense when relied on to deny account the amount o¦ an altered
liability according to the altered terms. check.
.c Ñhat constitutes material alteration? c But the drawer¶s negligence , be¦ore
Review Ú or a¦ter the alteration , may esto6 him
ac change date ¦rom setting u6 alteration as a
bc sum payable, either for principal or de¦ense.
interest c Ñhere the negligence o¦ the drawer
cc time or place of payment consists in ¦ailing to discover
dc number/relations of parties alterations 6reviously made which he
ec medium/currency of payment, adds could have discovered by a
place of payment where none com6arison o¦ the cancelled checks
specified, and check stubs or by diligent
fc other change/addition altering effect observation o¦ his records and could
of instrument in any respect thus have 6revented the drawee bank
Yc The enumeration seems to be ¦rom subsequently cashing other
exclusive. Cam6oses say any other altered checks , the drawee can
alteration would be non-material charge the subsequent check against
and would not a¦¦ect the liability o¦ the negligent drawer¶s account.
any 6rior 6arty . Note that #7 is a
catch-all 6rovision such that 125 Yc Ñhere the interest rate is altered , the
may still have broad a66licability. holder in due course can recover the
 6rinci6al sum with the original rate o¦

 

 V Ñhere N£ materially altered interest
w/o the assent of all parties liable thereon it Yc m       m      A
is AV £DED subsequent indorser, because by the
  V Not avoided as against indorsement he warrants that the
1.c party who has himself made, instrument is in all respects what it
authorized or assented to alteration purports to be and that it was valid and
.c subsequent indorser because by subsisting at the time of his indorsement
indorsement he warrants that the
Sec  and 
instrument is in all respects what it Yc Ñhat happens when drawee  3 

purports to be and that it was valid 3 on the altered check? Can drawee
and subsisting at the time of his bank recover?
indorsement
 
  c Prevailing view  Yes, bec. of
1
Ú payment under mistake,
 Sec. 1
and
 Sec. in relation to Sec. 1
Yc Ñhen an instrument that has been c Minority view  No, bec. of
1
materially altered is in the hands of a estoppel,
 stability of transactions
HDC not a party to the alteration, HDC and
 bank is in a better position to
may enforce payment thereof according shoulder the loss.
to orig. tenor
Yc Alteration must N T be apparent on the ÚÚ3Ú!
face of the instrument for the holder Ô
c 
c c 
c  c :
c 8  
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then would not be a holder in due course  c 7!;c $

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Ú , before or
after the alteration, may estop him from
setting up alteration as a defense.
ex.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

HONGKONG & SHANGHAI BANK v PEOPLES !cc Ô
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BANK (1970)1 
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defense
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REPUBLIC BANK v CA Yc fraud in    / fraud in factum
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didn¶t know it was N£V REAL defense

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in determining what type of fraud

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REPUBLIC BANK v CA (1991) which the signer thinks he is signing
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cccccccccccccccccccccccccccccccccccccccc cccccccc Uc  , both note and bill
1
Affirmed the minority view that drawee cannot Uc 
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recover 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
 c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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Yc 3     
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Yc if the instrument is, by its terms, SINGSON V. BPI (1968). cÔ
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payable at a special place, and he is  c


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able and willing to pay it there at

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$
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maturity, such ability and

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willingness are equivalent to a
tender of payment upon his part. HSBC VS. CATALAN (2004):c 257,c  c

Sec. 70, NIL  c , c c c 
c c c 

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c 5
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his then capacity to indorse 2
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Yc Therefore, PRECLUDED from $ 
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minor, or a corporation
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acting ultra vires

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c 
cc c, c
funds in the hands of the c 
c
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drawee/bank, and the /
c c 
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drawee/bank is Ú on 
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the bill unless and UNT£L he/it
c
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ACCEPTS
or certifies the
,
c c c 
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same.
Sec. 127, NIL


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Yc Before payment or certification 257J9cc c !c

c
$

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by the drawee bank, drawer of , c  c 

!c  
c

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the check may countermand the Ô c  c 
c
$
c c
c  c  
c
order, and payment thereafter 
c 
cc $
c
to the payee by the bank is
wrongful.
Yc sec. 1

when check operates .c 
    3

Sec.62,
as assignment NIL
Yc 
  person on whom a Yc Drawee is not liable unless he
bill of exchange or check is accepts the bill and in doing so,
drawn and who is ordered to he engages to pay the bill
pay it. according to the tenor of his
Yc not liable on the instrument acceptance.
until he accepts it once Yc Admits the followingV
accepted, becomes primarily a.c existence of drawer
liable under Sec. 62, NIL. b.c genuineness of his signature
 c.c his capacity and authority to
ARANETA V. BANK OF AMERICA(1971). draw the instrument
Ô cccccc
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã

c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

acceptance6 and 6the Yc But when a bill payable after sight
admission of existence of is dishonored by nonacceptance
payeeV6 and drawee subsequently accepts
Yc £nterpretations of laccording to it, the holder, in the absence of
its tenor´ diff agreement, is entitled to have
c ajority and prevailing bill accepted as of date of the 1st
viewV Ñhere alteration presentment.
 "# Ú
consists in raising the  "# Ú allows
amount payable, acceptor
 
 to be made while the
liable to HDC only as to its      .
original amount if the
alteration of payee's name, Yc Ú 
  3Ú 
paying banks cannot charge c The drawee is allowed $
drawer's account with the m after presentment to
amount of the check decide Ñ N he will accept
because its duty is to pay the bill the acceptance, if
only laccording to the order given, dates as of the day of
of the drawer.´ presentation.
Sec. 136,
c Common law ruleV NIL
Acceptor of altered check c Under the clearing house
not liable to innocent holder rules, the failure to return
except for the original within the prescribed time will
amount be deemed payment or
acceptance of the check.
Yc 

    c Ñhere the drawee
1
 3Ú     the bill, or

a.c the signification by the    within hrs or such
drawee of his assent to the other period as the holder
order of the drawer may allow,    the bill
b.c 6Acceptance6 completed by accepted or nonaccepted to
delivery or notification the holder, deemed to have

Sec. 19, NIL accepted the same.
Sec.
c.c in   
and 
  by 137, NIL
the drawee must not c Ñhere bill is duly presented
express that the drawee will and is not accepted within
perform his promise by any prescribed time, the person
other means than the presenting it must treat the

    . bill as dishonored by

Sec.132, NIL does not nonacceptance or he loses
change the implied promise right of recourse against the
of acceptor to pay only in drawer and indorsers.
Sec.
money 150, NIL
c Thus, there is no valid oral c £f there is not demand for the
or implied acceptance return of the bill and the
except in case of Sec. 1 drawee keeps it until after the

Constructive Acceptance expiration of said period
Yc holder of a bill may require that without expressly accepting
the acceptance be     or refusing it two viewsV
m  , if request refused, may a.c Constitutes constructive
treat the bill as dishonored. notice

""Ú b.c Constitutes dishonor
Yc A bill may be acceptedV because Sec.1 , N£L
a.c before it has been signed by uses the word 6refuses6
the drawer, or c Acceptance, if given, will
b.c while otherwise incomplete, retroact to date of
or presentation.
c.c when it is overdue, or
d.c after it has been dishonored
by a previous refusal to
accept, or by non payment.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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SUMCAd v. PROVINCE OF SAMAR
bc 3

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(1956).ccÔ

cc 
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c $
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c  
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c '  c c  c 
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 to pay only at a



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ec The acceptance of some, one

c c $
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Sec. 141, NIL
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Yc  3Ú  Ú   
 a qualified
3
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c   
 
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acceptance is written on a nonacceptance.

  m  m
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itself doesn¶t bind the acceptance is taken, the
acceptor except in favor of drawer and indorsers are
a person to whom it is  m

 from liability
shown and who, on the faith on the bill   they
thereof, receives the bill for have
m   the
value.
 "$ Ú holder to take a qualified
acceptance of an existing acceptance, or
bill subsequently
 
c  

 
  thereto.
unconditional promise in c Ñhen the drawer or an
writing to
 
   indorser receives notice
     
 of a qualified acceptance,
deemed an actual he must, within a
acceptance in favor of every reasonable time, express
person who, upon the faith his    to the holder
thereof, receives the bill for or he will be deemed to
value.
 " Ú have assented thereto.
acceptance of future bill
Sec. 142, NIL
c £n both cases, the

 
  
  
   a draft or bill of

   
 exchange with a definite maturity,
   m    to which drawn by a seller on a buyer for
the acceptance refers. the purchase price of goods,
 bearing across its face the
Yc †Ú    3Ú   An acceptance of the buyer always
acceptance is either
1 general states upon its face the
or
 qualified. transaction from which it arose.
 

Ú
  assents without چ
% 
 
  a
qualification to the order of the negotiable time draft or bill of
drawer.
Sec.139, NIL exchange drawn on and accepted
£ncludes acceptance to pay at a by a commercial bank.
particular place unless
expressly states that bill is to be Yc  † 
paid there only and not c A m  is an instrument in
elsewhere.
Sec. 140, NIL the form and nature of a BE,
but an unlike an ordinary bill,
   in express terms always payable on demand
varies the effect of the bill as and always drawn on a bank.
drawn.
Sec. 1, N£L c 
m %  


% 

ac   
 payment by drawn by a bank on itself and
the acceptor dependent on its issuance has the effect of
the fulfillment of a condition acceptance since the drawer
therein stated and drawee are the same, the
holder may treat it is either a
BE or PN.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

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Ã
[Ces_Sicangco/Rowena_Romero.

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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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instrument. by the holder to the drawee
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bank on which it is 

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drawn, equivalent to check, the drawee bank
acceptance extinguishes it as a
.c Ñhere m   of check negotiable instrument and
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accepted/certified, voucher.
drawer and all indorsers c       
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.c The refusal to certify a mere voucher.
check doesn¶t constitute b.c £n the case of a deposit
dishonor the holder at of a check by the holder
that stage cannot thereof in a bank other
exercise his right of than the drawee bank,
recourse against the the signature at the back
drawer and the of the check would
indorsers. constitute an
.c Ñhere the check is indorsement, unless
certified at the request otherwise indicated. The
of the holder, the bank holder in negotiating the
becomes the solidary check to the depositary
debtor and the drawer bank, which in turn will

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
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collect on the check 
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he represents for c c 
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NIL c 
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a.c Admits existence of payee and c
his then capacity to endorse BANCO ATLANTICO v AUdITOR
b.c Engages that on due GENERAL (1978), 7c  
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c
presentment instrument will be 
!c
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according to its tenor 

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c.c That if it be dishonored  
c  c c c 
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necessary proceedings on 
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dishonor duly taken, will pay the   c !c  
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amount thereof to the holder or '
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to a subsequent indorser who
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may be compelled to pay it
 
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c
Yc drawer may insert in the !c c c2

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instrument an express 
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stipulation negativing / limiting
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PNB v. PICORNELL (1922). 8 
c based on §23 on for
ery nstead of §124 on

c 
c  c 87c ,
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8 
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[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
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à [Miles Malaya.
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à [Ascheia_Yumul. 

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à [Miguel_DeJesus.



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Ã
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delivery only, warranty only

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extends in favor of immediate

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  Every person

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Sec. 64, NIL
Yc £ndorser  person placing his
signature upon an instrument
other than as a maker, drawer,
or acceptor unless he indicates
by appropriate words
intention to be bound in some
other capacity
Sec. 63, NIL
Yc Ñhere a person places his
signature on an instrument
negotiable by delivery he incurs
all the liabilities of an indorser.
DSec. 67, NIL
Yc Every person negotiating an
instrument by delivery or by a
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Sec. 65, NIL
a.c £nstrument genuine, in all
respects what it purports to
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b.c He has good title to it
[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 
Ã
Yc Ñhere a person not otherwise a
party to an instrument, places
thereon his signature in blank
before delivery, he is liable as an
his indorser, in accordance w/ these
rulesV
a.c £nstrument payable to order
of rd personV liable to payee
and to all subsequent parties
b.c £nstrument payable to the
order of maker/drawer, or
payable to bearerV liable to all
parties subsequent to
maker/drawer
c.c Signs for accommodation of
payee, liable to all parties
subsequent to payee



[Bobbie_StaMaria.  
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 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

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à [Miguel_DeJesus.



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Ã
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[Lorybeth_Baldrias.m
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à [Jam_Jacob. 

Ã
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à [Miles Malaya.  Ã
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à [Ascheia_Yumul. 
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c!c c
c  
c c AT a reasonable hour,
!
c cc
c ccc c N a business day and before
 c c  
c c 
c c c the bill is overdue,
 

F
 c c c  

c
c c
c T the drawee or some
   c 
c c
c c
person authorized to accept
Ô
c 
c  c 
c  c 
c c
or refuse acceptance on his
 c c
% 
c c 

c 

c c

$

cc


c

c
c behalf and


c 
c 

c 
c 

c Yc bill addressed to drawees


cc

ccc ccc not partners, MUST be

 c 
c  c  c 
c made to them all unless

c c c  c c
% 
c  c one has authority to

cc

c c  c c
% 
cc

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã

c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

accept or refuse been refused on some other
acceptance for all ground.
Yc drawee is dead, MAY be
made to his personal Yc  m
  
representative c  m by nonacceptanceV
Yc drawee has been a.c Ñhen duly presented for
adudged a bankrupt or acceptance  acceptance
an insolvent or has is refused or can not be
made an assignment for obtained or
the benefit of creditors, b.c Ñhen presentment for
MAY be made
1 to acceptance is excused 
him or
 to his trustee bill is not accepted. DSec.
or assignee. 149, NIL)

Yc m  

Sec. 146, NIL c m   where bill not

on any day on which N£s may accepted  must treat the bill
be presented for payment as dishonored by
underV nonacceptance or he loses
c Sec. 72, NIL  at a the right of recourse against
reasonable hour on a the drawer and indorsers.
business day DSec. 150, NIL)
c Sec. 85, NIL 
Ëc at the time fixed therein c

m  m   where bill
without grace. not accepted.  immediate
Ëc £nstruments falling due right of recourse against the
or becoming payable on drawer and indorsers and no
Saturday  next presentment for payment is
succeeding business necessary. DSec. 151, NIL)
day
Ëc EXCEPT instruments c m  of dishonor
payable on demand [at must be given  Except as
the option of the herein otherwise provided,
holderà  before twelve
1 to the drawer and
 to
o'clock noon on each indorser, and any
Saturday ÑHEN that drawer or indorser to whom
entire day is not a such notice is not given is
holiday. discharged. DSec.89, NIL)
Yc Ñhere the holder has no time, c       
 
with the exercise of reasonable   of nonacceptance 
diligence, to present the bill for does not preudice the rights
acceptance before presenting it of a HDC subsequent to the
for payment, delay is excused omission.
Sec. 117, NIL
and doesn¶t discharge the
drawers and indorsers. DSec.
147, NIL .c 3
Ú Ú
3 Ú
Yc m     
 
Sec. 70,
Yc m    DSec. 148, NIL in order to charge the
NIL Bill may be treated as drawer and indorsers
dishonored by nonacceptanceV 
a.c Ñhere the drawee is
1 Yc m  Ú  

dead,
 absconded,
 a.c to charge the person
fictitious,
 does not have primarily liable on the
capacity to contract by bill. instrument
Sec. 70, NIL
b.c Ñhere, after the exercise of b.c to charge the 
  where
reasonable diligence, he has no right to expect or
presentment can not be require that the drawee or
made. acceptor will pay the
c.c Ñhere, although instrument.
Sec. 79, NIL
presentment has been c.c to charge an   where
irregular, acceptance has the instrument was made or

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 cG

accepted for his d.c m   must be presented
accommodation and he has for payment within
no reason to expect that the reasonable time after its issue
instrument will be paid if or drawer will be discharged
presented.
Sec. 80, NIL from liability thereon to
d.c ExcusedV extent of loss caused by delay
 c Ñhere, after the c    
exercise of reasonable Ñhen payable at a
1
diligence, presentment fixed period after date,
cannot be made
 after sight, or

 c Ñhere the drawee is a after that happening of a
fictitious person specified event, exclude
 c By waiver of day from which the time
presentment, express is to begin to run, include
or implied. date of payment.
Sec.
e.c when a bill is dishonored by 86, NIL
nonacceptance  immediate
right to recourse accrues to
holder
Sec. 11, N£L
f.c in case of waiver of protest,
whether in the case of a
foreign bill of exchange or
other N£  deemed to be a
waiver not only of a formal
protest but also
presentment and notice of
 c 5

c 
c Ñhere the day, or the
last day for payment falls
on a Sunday or on a
holiday  may be done on
the next succeeding
secular or business day.

Sec. 194, NIL
of PNB v. SEETO (1952)
c Dc #

c c 87/
dishonor.
Sec. 111, NIL 5
c c 



c 
!c 
c c #
 c
Yc 
 
     
c c 87,/,
c c 87/5
c

c 
c 
!c c c ,
c 
 c c
   
)c#
 cKcc



cc
c


c
a.c 
 
    
  
!c c Ic 
 c c Ô
c 
!c c



 
   

c
c
cc

c
on the day it falls due 
c 
c c 



c 
c 
c
c if day of maturity falls
% c c 
c 


3c cc
on Sunday or a holiday,



c 5

c !
c  c 
c c 
c
the instruments falling 




c  
c
c 
c 

c c 2
c
due or becoming 

c 87c  c
c  c

c 
c
payable on Saturday $ 
cc
cc 
ccc
are to be presented for 26*(c c Ô
c 


c c  

c 
c
payment on the next  c c

c c 
c 
c c 
c
succeeding business 



c
c
c

cN?@ccc
day
{ec.85, NIL *


c c
 c c 
c
c
b.c 


   
  
c 
c 
!c 

c c
within a reasonable time 

c 
!c 
c c 
c
after its issue, 
c!c c

c

c
c at the option of the Ô
c

cc

cc
c


c


c
c 

c  c c c


c
holder, may be
  c 

c  

c c 
c
presented for payment



c
cc


cc
c
before twelve o'clock

!c
noon on Saturday when NOTE: Camposes note tat te
that entire day is not a ds’ar
e of te ndorser sould ave
holiday D{ec. 85, NIL been based on §§ 66 & 71 on
c.c  
 

  m

presentment as a ’ondton to te
 within a reasonable time ndorser's lablty & presentment for
after the last negotiation. payment of a demand bll made wtn a

{ec. 71, NIL
NOTE: reasonable tme from ts last ne
otaton
though reasonable time c
¦rom last negotiation, it may c
be unreasonable time ¦rom c
issuance thus holder may c
not be HDC under sec. 71 c
 c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

CRYSTAL v. CA (1976) 
!c c 2
$
c 
c c 
c 
!c
,  c 
c c 
!c c c 
c 

c
cc 
c


c 
cc
c 
c cc c , c &c 
c c 
c c 
c
c
%
c 
c c Ô
c $ 
c c 
c 
!c

c c c
c c
c

!c c 
$
c 

c
 
c ccc
cc  
cc
c 
c c


c c c

c 

c  
c c  c
$
c c 
c 
!c c
 c 

c 
c c Ô
c $ c c 
c 4
c c 
 c 


c  c c


ccc
ccc !cc
c
26*(c c
c 
c 
!c c 

c NOTE: Camposes note tat despte te
 
c 
c

c c $cc addton of te words "non-ne
otable" on
7c cc c  c 

c
c  c te spe’ally ’rossed ’e’s, te Court
c  c c 
c


c 
c c ’onsdered te ’e’s as ne
otable
 c 
c  c c 
 $
c c c 
c nstruments A ’e’ on ts fa’e
 c
c c 
c c normally as all te requstes of



c   cc
c$ 
cc ne
otablty, and te addton of te

c
!c c

c

c

$
c above words sould not ’an
e ts
 c
 
cc Ô

c c c c c ’ara’ter as a ne
otable nstrument
 c
c c c
c

ccc c
 c ASSOCIATEd BANK v. CA & REYES
c (1992)
Yc m     when *

c 
 
c 
c 
c
the delay is caused by  
c 
!c 
 c . c 

3c
circumstances beyond the c .c
cc#
3c<Ô&cc
control of the holder and not 5c c  c   c


c Kc

c 
c 
!c  c
imputable to his default,

c7!ccc
misconduct, or negligence
26*(cc,c5
c
$c2
c$c
,c
c
when the cause of delay ceases

cc cc
!c
(c
to operate, presentment must c 
!c c c 
c

c c
be made with reasonable  c

cc
c!"c
diligence
Sec. 81,NIL )c 
!cc
c

c c
c
//cc
c c ccc c
Yc 
 3    c!"cc
c The instrument must be Dc 
c c c  c 
c 
!c
exhibited when paid, must 
$
c c c  cc
c  
c
be delivered up to the party  c
c
!c c

c
c c
paying it.DSec. 74, NIL c

c 
cc c
cc
c Ñhat constitutes a sufficient 
c c
c c

$
c 
c
presentment.
Sec. 72, 
!c cc c 
c
NIL Ô
c

cc cc
!c

cc
c

cc


c c
c
a.c BY ÑH MV the holder,
Ô
c c
cccc 

cc
c
or by some person

c !c c  
c 
!c
authorized to receive 

c  c c  c 
c  
c c
payment on his behalf 

c
 c


cKc
  c

CHAN WAN v. TAN KIM(1960)
b.c T£MEV reasonable hour on
ÔcJc
c
 c 
c
!c
a business day

c c 

c c , c &c



c 
c 
!c  c 
c c Yc where instrument

c  

c !c c 
c 

c payable at bank. 
 
c 
c c 
c cc must be made during
, c &c 

!c
$
c c 

c banking hours,

!ccc UNLESS the person
26*(c c ,
!c  
c 
 c c to make payment has
, c 7!c   c $
c 

c no funds there to



c  c 
c c  c !c meet it at any time
c c , c&cc
 c c, c during the day, in
&c 


c 
c  c 
c which case

c 

c c c  
c presentment at any



c Kc 
c  c c c hour before the bank
 cc
c 
c
is closed on that day
7c 

c c 
c 


c c
is sufficient
Sec. 75,

 
c
 

c c , c
NIL
7!c c 
c c c 
c !c c 
c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

firm.
Sec. 77, NIL
c.c PLACEV proper place as Yc >    and
herein definedV
Sec. no place of payment
73, NIL is specified  to them
1c place of payment all
Sec. 78, NIL
specified  at place 
of payment 
c no place of 
payment specified  Ú
ÚÚ3 Ú
but address of the 
person to make Yc ÑhenV
a duly presented for payment 
payment is given in payment refused or cannot be obtained
the instrument  at or
b presentment is excused 
the address given instrument is overdue and unpaid.
Sec.
c no place of 83, NIL
payment and no Yc EffectVV [subect to N£L provsà an
address is given  immediate right of recourse to all parties
at the usual place secondarily liable accrues to the holder.
of business or
Sec. 84, NIL
residence of the
person to make
payment
c in any other case  Ú  Ú

wherever person to 
make payment can     
be
1 found, or if Yc To bring either verbally or by writing,
presented
 at his to the knowledge of the drawer or
last known place of indorser of an instrument, the fact
business or that a specified N£, upon proper
residence proceedings taken, has not been
accepted or has not been paid, and
d.c T
ÑH
MV
1 person that the party notified is expected to
primarily liable on the pay it
instrument, or if he is
absent or inaccessible,

 to any person found
at the place where the
presentment is made.
Yc where principal
Yc General ruleV   be given to
drawer and to each indorser, and any
drawer or indorser to whom such
notice is not given is discharged
Yc
m   

debtor is 
 and 
no place of GULLAS v. PNB (1935)
payment is 0 c 

c 
c 


c 

c   c
specified  to his c  c c 87c c 0 c  c 
c
personal cc c
c!ccÔ
c

cc
representative, £ 

 c  

c c 
c
 
c
any AND £ he can Ô




c c Ô
c !c 
c 
c c
be found with the  
c c c  c c 0 c   c  c
exercise of c
c
$


cc cc c
c

c
reasonable
c c c # ccÔ
c !c
c c0 3c
diligence
Sec. 76, 
c c 
c c 
c 

c c Ô c
NIL

 
c c 
c /
c c 
!c
c
c
ccc
Yc where persons
26*(ccc
cc 
cc


cc
primarily liable are  

cc


cKc c
c
 ccc

  and no c c
cc

c c
c
c
place of payment is c$
c
specified, cc


 c

cc!c cc
 cc
c
presentment for  c c 
c 
c c c c 
c 
c
to any one of them, 
c c c 


c c c c 
c
even though there 
c c c 

c c 2
$

c 

c c 
c
has been a  c c 
c c  
c Kc  c
dissolution of the c c c c 0 c 
c !c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c


c 
c c 
c 
c c c c notwithstanding any miscarriage in
c c !
c c  c 
c 
 c the mails.
Sec. 105, NIL
 cc0 cc

cc 
cKc c Ñhat constitutes l   in post

c  c c $
c

c$
cc office´  when deposited in any
c c  
c  c
c  c  
c c branch post office or in any letter


 box under the control of the post
 office department.
Sec. 106,
Yc   in writing or oral   NIL
 in any terms which sufficiently
1 Yc m  notice must be sent
Sec.
identify the instrument, and
 108, NIL.  to the address, if any,
indicate that it has been dishonored added by the party to his signature if
by nonacceptance or nonpayment address not givenV
delivered personally or through the ac to the postoffice nearest to his
mails.
Sec. 96, NIL place of residence or where he is
Yc The ff. notice still sufficientV
Sec. accustomed to receive his letters
95, NIL or

1c a written notice, not signed bc £f he lives in one place and has

c insufficient written notice, his place of business in another,
supplemented and validated by to either place or
verbal communication cc £f he is soourning in another

c instrument suffering from place, to the place where he is so
misdescription UNLESS the soourning.
party to whom the notice is But where the notice is actually
given is in fact misled thereby. received by the party within the time
specified in this Act, sufficient, though
Yc    as soon as the instrument is not sent in accordance with the
dishonored and  m  m     requirement of this section
   by N£L, unless delay excused Yc 
 in giving notice how excused.

Sec. 102, NIL  when the delay is caused by
c Ñhere parties reside in same circumstances beyond the control of
place
Sec. 103, NILV Must be the holder and not imputable to his
given w/in the ff. times« default, misconduct, or negligence.
Yc £f given at the place of business of Ñhen the cause of delay ceases to
the person to receive notice  operate, notice must be given with
before the close of business hours reasonable diligence.
"Ú
on the day following
Yc £f given at his residence  before the
Yc  m
 
usual hours of rest on the day
c
1 By or on behalf of the holder
following
or
 any party to the instrument
Yc £f sent by mail  deposited in the
who may be compelled to pay it
post office in time to reach him in
to the holder, and who, upon
usual course on the day following.
taking it up, would have a right to
c Ñhere parties reside in different
reimbursement from the party to
places
Sec. 104, NIL.V
whom the notice is given
Sec.
Yc £f sent by mail  deposited in the
90, NIL
post office in time to go by mail the
c Notice of dishonor may be given
day following the day of dishonor, or
by an agent either in his own
if there be no mail at a convenient
name or in the name of any party
hour on last day, by the next mail
entitled to give notice, whether
thereafter
that party be his principal or not
Yc £f given otherwise  within the time

Sec. 91, NIL
that notice would have been
c Ñhere instrument has been
received in due course of mail, if it
dishonored in hands of agent, he
had been deposited in the post
may either himself give notice to
office within the time specified
the 
  liable thereon, or he
above
may give notice to his   



within the same time as if agent
Yc Ñhen sender    to have given
were holder
Sec. 94, NIL
due notice.  Ñhere notice of
dishonor is duly addressed and
deposited in the post office,

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

Yc m   
  Yc m      
  m


c to his principal, in case of an 
 Sec. 114, NIL
instrument dishonored in the a.c drawer/drawee same person
hands of an agent
Sec. , b.c drawee fictitious, incapacitated
N£L c.c drawer is person to whom
c to the party himself or his agent instrument is presented for
in that behalf
Sec. 97, NIL payment
c where party is dead and death d.c drawer has no right to
known to the party giving notice expect/require that

1 MUST be given to a drawee/acceptor will honor
personal representative, if there instrument
be one, and if with reasonable e.c drawer countermanded payment
diligence, he can be found
 
no personal representative  STATE INVESTMENT HOUSE v CA (1993).
MAY be sent to the last # c 
c )c 
!c c 1 c c
residence or last place of 
 c  c 

c c 4

c c 
c  c c
business of the deceased.
Sec. c c 1 c 

c 

c
98, NIL 
!cc 5
c
$

cc c # c
c
c partners  to any one partner, c 
c 
c 4

c 
c
 
c 
c c
1 cc2
$
c
c
cc
 
$
c
c
even though there has been a

!c c # c  
c
c c  c 
c
dissolution.
Sec. 99, NIL
 

c!cc>c


c
c
!c
c persons ointly liable.  to each


c 
ccc
of them unless one of them has 26*(c c 5
c
$

c c c  
c c 
c
authority to receive such notice  
c Kc c c 4
c c 
c 
 c
for the others.
Sec. 100, NIL 


cc !cc
c
c bankrupt.  to the party Ô

ccc

cc
$
c
c 
cc
c
himself or to his trustee or c   c 

c 
c c

c  c
assignee
Sec. 101, NIL 
c  cc
c
!cc
c  c

c c 
c  c c $
c
%

c
c
Yc m 
   
  
!cc
c 
c
1.c when given by/on behalf of 
holderV inures to benefit of 

Sec. 92, NIL Yc m      
  m


a.c all subsequent holders and  Sec. 115, NIL
b.c all prior parties who have a a.c drawee fictitious, incapacitated,
right of recourse vs. the and indorser aware of the fact at
party to whom it¶s given time of indorsement
.c where notice given by/on behalf b.c indorser is person to whom
of a party entitled to give instrument presented for payment
noticeV inures for benefit
Sec. c.c instrument made/accepted for his
93, NIL accommodation
a.c holder
b.c all parties subsequent to
party to whom notice given
D.c 3
 
Yc
 
c Ñaiver of notice.  either
1 Yc definitiontestimony of some proper
before the time of giving notice person that the regular legal steps to
has arrived or
 after the fix the liability of drawer and indorsers
omission to give due notice have been taken
may be expressed or implied. Yc m    
  in case of a

Sec. 109, NIL  RE£GN B£LL appearing on its face to
c Ñhere the waiver is embodied be such protest for nonacceptance if
in the instrument itself  binding dishonored by nonacceptance 
upon all parties where written protest for nonpayment if not
above the signature of an previously dishonored by
indorser  binds him only.
Sec. nonpayment. £f not so protested, the
110, NIL drawer and indorsers are discharged.

Sec. 152, NIL


[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

Yc  
1 annexed to the bill or 


c 
c 
c 


c c Ô
c  c c c
must contain a copy thereof, and
 


ccc
must be under the hand and seal of 26*(ccÔ
cccc
 cc
c c
the notary making it    c
% 
c  cc
c cc
$

c
c
c 


cc>

c

cc

a The time and place of


c Kc 
c c 
c 

c
presentment
b The fact that



c c 


c c



c 
c 


c
presentment was made and the 
c
manner thereof
c The cause or c
reason for protesting the bill
d NOTE: Te ruln
of te Court on protest s
The demand made and the answer merely obter d’tum
given, if any, or the fact that the
drawee or acceptor could not be
found.
Sec. 153, NIL. Yc

     deemed to be a
Yc  m 
a A notary public or waiver not only of a formal protest

b any respectable resident of the but also of presentment and notice of
place where the bill is dishonored, in dishonor.
Ú
the presence of two or more credible 
witnesses.
Sec. 154, NIL 
Yc    on the day of its dishonor 
unless delay is excused when duly E.c  3Ú   3 Ú 

noted, the protest may be Ú

subsequently extended as of the 
date of the noting.
Sec. 155, NIL Yc Ñhen bill may be
   
3

  at the place where it is m.  Ñhen a BE has been
1
dishonored, EXCEPT bill drawn
payable at the place of business or
residence of person other than the
drawee has been dishonored by
nonacceptance, it must be protested
NSENT of the
protested for dishonor by non
acceptance or protested for better
security and
 is not overdue È any
person not being a party already
liable may, with the C
for nonpayment at the place where
it is expressed to be payable, and no
further presentment for payment to,
or demand on, the drawee is
necessary.
Sec. 156, NIL
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.
Yc 3        
against the drawer and indorsers 
where the acceptor has been
adudged a bankrupt or an insolvent
or has made an assignment for the
benefit of creditors before the bill
matures
Sec. 158, NIL
Yc Ñhen 

    when
caused by circumstances beyond the
Yc The acceptance for honor may be for
part only of the sum for which the bill
is drawn
Yc 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. 161, NIL
Yc
    
      person
control of the holder and not whose name is inserted by the drawer
imputable to his default, of a bill and any indorser to whom the
misconduct, or negligence. Ñhen holder may resort in case bill is
the cause of delay ceases to dishonored by nonacceptance or non
operate, the bill must be noted or payment option of the holder to
protested with reasonable resort to the referee
Sec. 131, NIL
diligence. Ñhen   Yc 3 Ú 
 Ú
  any
    with  by any person may intervene and pay bill
circumstances which would dispense protested for nonpayment supra
with notice of dishonor.
Sec. 159, protest
Sec. 171, NIL
NIL 
 
TAN LEONCO v GO INQUI(1907).
c 

% 
c 
c 
c c 
c Ôc 
3c 
 c0c
c

cc cc
% 
c 
cc>cc>c



cc
c 

c c c


c 
c 
cc cc 

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

.c Ú 
 Ú 3 چ requiring the part bearing his
 acceptance to be delivered up to him,
BINGHAMPTON PHARMACY v FIRST and the part at maturity is
NATIONAL BANKc(1915) outstanding in the hands of a holder
Ô


cccc


c
c


ccc in due course, he is liable to the

!cKc
c!

ccc
c
ccc!(c holder thereon.
Sec. 182, NIL

c
cc ,
!c Yc Effect of  m


one of a set. 
!c Except as herein otherwise provided,
!

c c c 
c c 


c c c 
!c c the whole bill is discharged.
Sec.


 c 
c c  c 
c 

c 183, NIL

c

c  
c

c
%
c



c 



c




c c 
c  c c


c 


c 
c c 
c 

 c c 
 
c
c


c  


 c c 
c 7

 c c 
c c c 
!

c c c 
c c 
c  

c c c 
!c 
c c  c c 


c 
c 
c
 

 is the release of all parties,


c c c  c c
c  
c 


c c c
whether primary or secondary, from the
c c 
 c  
c 
c c c
obligation on the instrument renders the
c c c 

c c


c 
c
c 


 c
$
c  

c 
c 


c instrument nonnegotiable
  c c  
c c 
c  c c 
c 

c
%
c
c c 
c 
c
c

 ccc A.c    Ú 
 Ú Sec. 119, NIL
How dischargedV
1.c payment in due course by or on
behalf of principal debtor
G.c  Ú  a.c by whom made
composed of various parts being b.c at or after maturity
numbered, and containing a reference to c.c to the holder thereof
the other parts, all of which parts 
EQUITABLE BANK vs. IAC , Ô
c
constitute one bill of lading
4
c 
!c c  c c c
Yc Bills in set constitute one bill.
Sec.

$ c 7c !c 
c 
!c

c
178, NIL
:
cc6
c !c


c c F,c
Yc

m   where different ,$
c 6



c
;c 
c 

c
parts are negotiated.  the holder 

c c 
c 
c  c


c
whose title first accrues is the true 

c c  c c 
$
c c
owner of the bill. But nothing in this 
c ?c c 
c 
c Ô c c   c
section affects the right of a person 
c

cc
 )c
who, in due course, accepts or pays 
the parts first presented to him. d.c in good faith and without notice

Sec. 179., NIL that his title is defective
Yc 

  m
  who indorses .c payment in due course by party
two or more parts of a set to accommodated where party is made/
different persons.  liable on every accepted for accommodation
such part, and every indorser .c intentional cancellation by holder
subsequent to him is liable on the Yc if unintentional or under mistake or
part he has himself indorsed, as if without authority of holder,
such parts were separate bills.
Sec. inoperative where instrument or sig
180, NIL appears to have been cancelled,
Yc  
  may be written on
any part and it must be written on
one part only. £f the 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.
Sec. 181,
NIL
burden of proof on party which alleges
it was unintentional, etc.
Sec. 123,
NIL
.c any other act which discharges a simple
contract for payment of money
cccccccccccccccccccccccccccccccccccccccc cccccccc

Yc 3
   Ñhen the acceptor of a or our purpose, l payment to one of several payees or
indorsees in the alternative discharges the
bill drawn in a set pays it without
instrument«´
see p.
 of Campos

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

.c principal debtor becomes holder of a.c the party so paying it is
instrument at or after maturity in his remitted to his former rights
own right as regard to all prior parties
.c renunciation of holderV
Sec. 122, NIL b.c and he may strike out his
Yc holder may expressly renounce his own and all subsequent
rights vs. any party to the indorsements, and again
instrument, before or after its negotiate instrument, except
maturity c where it¶s payable to
Yc absolute and unconditional order of rd party and has
renunciation of his rights against been paid by drawer
PR£NC£PAL DEBT
R made at or after c where it¶s made/accepted
maturity discharges the instrument for accommodation and
Yc renunciation does not affect rights of has been paid by party
HDC w/o notice.
accommodated
Yc añ
ñ ñ



ñ
ñ



ñ
ñ 
ñ






 ñ


 ñ

.c material alteration  review Sec. 1, 

 
N£LV what constitutes material alteration 
33


Sec. 1, N£LV material alteration w/o 
assent of all parties liable avoids 
instrument except as against party to Yc  

 
   also N£s merely
alteration and subsequent indorsers special forms of either PNs or BEs also
 governed by the N£L

Yc 
 


 include commercial

paper which though not governed by the
B.c  Ú
 3
  Sec. 120,
N£L, have certain attributes of
NIL
negotiability.


1.c by discharge of instrument

.c intentional cancellation of signature
by holder
.c discharge of prior party
.c valid tender of payment by prior
party
.c release of principal debtor, unless
holder¶s right of recourse vs. ndary
party reserved
.c any agreement binding upon holder
to extend time of payment, or to
postpone holder¶s right to enforce
instrument, UNLESS
1 made with
assent of party secondarily liable, or

 right of recourse reserved.
.c ailure to make due presentment

Secs. 0, 1, N£L
.c failure to give notice of dishonor
.c certification of check at instance of
holder
10.c reacquisition by prior party
Yc where instrument negotiated
back to a prior party, such party
may reissue and further
negotiate, but not entitled to
enforce payment vs. any
intervening party to whom he
was personally liable
Yc where instrument is paid by
party secondarily liable, it¶s not
discharged, but
[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 
Ã
Ú
  Ú  

a.c as distinguished from negotiable
instruments, refer to goods and not to
money the sale of goods covered is
effected by the transfer of said document.
b.c not governed by the N£L but by the Civil
Code.
c.c includes any bill of lading, dock warrant,
lquedan´, or warehouse receipt or order
for the delivery of goods, or any other
document used in the ordinary course of
business in the sale or transfer of goods,
as proof of the possession or control of
the goods, or authorizing or purporting to
authorize the possessor of the document
to transfer or receive, either by
indorsement or by delivery, goods
represented by such document.
d.c Documents of title negotiable when goods
represented thereby are deliverable to a
specified person , to order or to bearer.
e.c valuable in commerce because it
facilitates the sale and delivery of goods.





[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
 c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

A.c †Ú  bondholders in the form of
 interest*, usually payable
1.c

 m    an agreement annually
by a warehouseman to store goods c bonds and interest coupons
and deliver them to a named person
evidences interest
or his order or to bearer. obligations*
Úc may be negotiable in
.c 

  
 
a similar contract by form, therefore governed
a carrier to ship goods and deliver by N£L
Sec 
them to the person named therein Úc both are actually
or his order or to bearer negotiable promissory notes
bill of lading is useful not only as c they run for long periods of
evidence of the receipt of the goods time, and are often sold to
by the carrier but as evidencing title the public in general
to goods covered by it. £t also c funds generated by such
facilitates the purchase of goods by bonds are used to finance
one person from another who is corporate proects and public
physically remote and probably works
unknown to him. c there is no warranty on the
Yc lstraight´ bill where the goods part of such indorser or
are to be delivered to a negotiator that prior parties
specified person, it is not had capacity to contract. The
negotiable and is called a qualified indorser 
lstraight´ bill.
therwise, it is negotiator by delivery of a
referred to as an lorder´ bill. bond do not warrant
therefore that the corporation
.c Certificate of Deposit which issued the bonds has
Yc a receipt of a bank for certain any udicial capacity to act. A
sum of money received upon general indorser thereof
deposit generally framed in however would be liable for
such 
RM as to constitute a such want of capacity.
promissory note, payable to the Yc depentures
depositor, or to the depositor or c similar to bonds except that
order, or to bearer. they are usually for a shorter
Yc it is taken when depositor does tem and may or may not be
not need his money for some accompanied by a mortgage.
extended period of time and c they are often issued on the
wants it to earn interest more general credit of the issuer
of an investment paper than a corporation
commercial paper because it is 
not attendant to a commercial
transaction the way a check or a
promissory note is.
Yc it is negotiable if it meets all
the requirements of Sec 1 N£L
.c 

         The
draft and the letter of credit are
generally used together to effect
payment in international transactions.
Yc Dra¦t a form of BE generally used
to facilitate the transactions
.c 
    between persons physically
remote from each other.
Yc Bonds
c evidences of indebtedness, Yc Letters o¦ Credit
in the nature of a PNs c one person requests some
c usually accompanied by a other person to advance
mortgage of the property of money or give credit to a
the issuer third person, and promises
c issued by the government that he will repay the same to

municipal  other public the person making the
corporations  private advancement, or accept bills
corporations drawn upon himself for the
c though not to mature for a like amount.
long time, assure some
regular income to

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã

c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

c must be issued in favor of a accuracy, genuineness,
definite person, and not to falsification or legal effect
order. of any documents, or for
c under our law, a letter of the general and/or
credit cannot be a particular conditions
negotiable instrument stipulated in the documents
because
a it may not or superimposed thereon,
contain the words of nor do they assume any
negotiability
b may be liability or responsibility for
issued for an undetermined the description, quantity,
amount. See Art 
Code weight, quality, condition,
of Commerce. packing, delivery, value or
c l£NDEPENDENCE existence of the goods
PR£NC£PLE´V Credits, by represented by any
their nature, are separate documents, or for the good
transactions from the sales faith or acts and/or
or other contract
s on omissions, solvency,
which they may be based performance or standing of
and banks are in no way the consignor, the carriers,
concerned with or bound by or the insurers of the
such contract
s, even if goods, or any other person
any reference whatsoever whomsoever.
to such contract
s is /c The independent nature of
included in the credit. the letter of credit may beV
Consequently, the
a independence in toto
undertaking of a bank to where the credit is
pay, accept and pay draft
s independent from the
or negotiate and/or fulfill ustification aspect and is a
any other obligation under separate obligation from
the credit is not subect to the underlying agreement
claims or defenses by the like for instance a typical
applicant resulting from his standby or
b
relationships with the independence may be only
issuing bank or the as to the ustification
beneficiary. A beneficiary aspect like in a commercial
can in no case avail himself letter of credit or
of the contractual repayment standby, which
relationships existing is identical with the same
between the banks or obligations under the
between the applicant and underlying agreement. £n
the issuing bank. both cases the payment
/c Thus, the engagement of may be enoined if in the
the issuing bank is to pay light of the purpose of the
the seller or beneficiary of credit the payment of the
the credit once the draft credit would constitute
and the required fraudulent abuse of the
documents are presented credit.
Transfield vs.
to it. This principle Luzon Hydro
assures the seller or the Yc Pertinent   
beneficiary of prompt provisionsV
payment independent of c &. Letters of credit 
any breach of the main issued by one merchant to
contract and precludes another for the purpose of
the issuing bank from attending to a commercial
determining whether the transaction.
main contract is actually c  #. The essential
accomplished or not. conditions of letter of credit
Under this principle, shall beV
banks assume no liability 1.c issued in favor of a
or responsibility for the definite person, and not
form, sufficiency, to order.

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 cG

.c limited to a fixed and

c c 
c c Ô
c  c 
 c
specified amount, or to  $
c c c cc 
c c c  c c
one or more 8  
c 
c c 
c
$
c c :
c
undetermined amount, c  c  c  c 

c c c 
c
but all within a  c  c c c 
c  ;c c 
c  9c
maximum the limit of 
"c c c c 
c  c 
c 

c
!c  c c c
c  c
c c c
which has to be stated
8DDH)HI)c c Ô

c c  c c 


c c
exactly.

c cc:
 
;c
c

c!c
Note: Those which do not have
Acc
c c

c
c
 cc
 c
any o¦ these last circumstances c
shall be considered as mere c
letters o¦ recommendation. NAT¶L RICE & CORN v. PAN-PHIL
Yc  !. The drawer of a letter SHIPPING.
of credit shall be liable to the Ô
c

c c 
c c c  c  c  c 
c
person on whom it was issued, 
c c 9 c <
9c  c  c 8/
for the amount paid by virtue 8  
c   c 
c 

c
 c c
thereof, within the maximum 
c

 c'0K59c  c

cc
fixed therein. 

c c 
c

c c 
c c 

c
Letters of credit may not be  cc$ c ccc
c
c
protested even if not be paid  +c c 
c  
c 4

c  c 
c
bearer cannot acquire any right 
cc
c c
9 c <
c  c c $
c 
c  c

c c
of action by reason of non

c c
c
c 
c

cccc
payment against the person

$
c

c c 
c c $ c c c
who issued it.


c  c '0K5+c 
c 
c  c c
The person paying shall has 
c 
c c 9 c <
c  c
c !c  c
right to demand the proof of the 
c
cc
c

 c'0K5+ccc
identity of the person in whose
favor the letter of credit was BPI v. dE RENY FABRIC (1970).
issued. Ô
cc c c 
cc c
c
Yc  &'. The drawer of a letter  
c c c c 
c !c 

c c 
c
of credit may annul it, informing 
c c 
 c ,
 c 

c c ,
c
the bearer and the person to 


c  c 
c !c  $
c  c 
c
whom it is addressed   cc
c

c c
cc


c
Yc  &. The bearer of a letter c   
c  c c c 
c  
cc
 

c 
c !c c 
c c  $
c 
c
or credit shall pay the amount

%

ccccc
 c!c
received to the drawer without
cc 
c
c cc c
c
delay. Should he not do so, an !c c $
c 

c  c c 

c
action involving execution may 
 
c c

c c 
c  c  c c  c
be brought to recover it, with  c 
c  c  
c  c  c
legal interest and the current c 
c  c cc 7!c c $c
exchange in the place where it c c 
 c 
c
is repaid.  c c c 
 c  c 
c  
c c
Yc  &. £f the bearer of a 
c
% 
c  c  
c c 
c  
c c
letter of credit does not make 
 c c c
c
use thereof within the
1 period
agreed upon with the drawer, or TRANSFIELd VS. LUZON HYdRO (2004).
in default of a period fixed,
 ,c 
c 

 c $!
c 
c 



c
within  months, counted from  
-cO
c
0$
c 
c 
c c

c c 
c
its date, in any point in the


9c  
P c c c  c 
c
Philippines, and within 1
c !c  c c $!
c 
c
months anywhere outside




c  
c c

c c 
P
thereof, it shall be void in fact 
c c 
c  c , c Ôc c  c 
c
and in law. 



c  
c c  c 
c $!
c
c 
c c !c  c

c  c
GREGORIO ARANETA INC. v PNB 
c  
c c   c
c

c c
c 
c
(1954). 
cc
 c ccccc
c
c 

c !cc 

c c c 



c 
c !cc
c

cc
  c 
c c c 
c 
c
%c c 
c  c
cc!cc
c

 c

ccc cc
 c
c

c 

c c 
c 
c
 
c c 
c  
c
c c
%
c  c 


c 
c  
c 
 cc

cc
 c c


c c 
c  c  c 
 c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
Gc
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c

c  c 
c 

c c 
c c !c c attorneyinfact and the
 c  c 
c 

c c 
c  
c c 
c certificate is delivered to another,
  c  cc & c 
c

c c the latter appears to be the owner

c  c 
c c !c 
c  c  c thereof. A bona fide purchaser of
 
c  c c 
c c c 
 c value without notice, will be


c
c

cc
cc
c

 c protected in his acquisition,
c c 
 c c $
c 
c 

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although such third person has


c c 
c 
c  cc c 
c
diverted the certificate from the

c c 
c 
c  c c 
c 
c
purpose for which he was
 c e c
c 

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c

c
c 
c c 
c
c 
c c 
c entrusted therewith.
Principle of



cc cc
c

cc
ccc  

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c 
c 
 c  c Yc The same rule is applicable if the

cc c  c c
c c c certificate is in bearer form.
c 
 c c  c c 
c  cc
c c Yc The rule is applicable where the
 c c
c c
c  c c c

c certificate is lost or stolen while
c 
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c

c c 
c c signed in blank. Even a
  
c
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8

9c  
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cc acquire title as against the true
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c
owner.
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c

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cc cc
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c Yc At common law, stock certificates
c
cc


c c$
c
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c are given the attributes of
c 
c c c 

c  

c negotiability only where the
=  

c c c c c 
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c 


c c

c c 
c c c wrongdoer with the possession of
 

cc c
c


ccc
c such certificate and clothed him



c
c 
cccc
/

c c with apparent ownership thereof.

c


ccc
cc

cc
ccc 

c
c c
c 
cc
c SANTAMARIA v HONGKONG & SHANGHAI
 c
c$
c
cc
c

cc
cc
c BANK (1951).
c

c c 
c c  
c  c 
c 8 c c  c c !
c 
c 

 c



c c 
c 
c c 
c  c 
c c 
$
c 
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c c c 
c  c c 
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c  !
c c   

c  c


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c c
cc  cc 
 

cc
c c  c
 
cc


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c  c

c c 
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4
c c c  c 
c c

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c

c!c
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Yc or m
     
  is the 


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c 

c c 4
c c 

$c  c
customary and convenient
c
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c  
cc 
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evidence of the holder¶s interest
c
in the corporation which issues
dE LOS SANTOS, McGRATH (1955).
it. c  
c c !c c 
c  

c c
Yc not a N£, but is included in the
 

c c 
c !c 

c 
c
term lsecurities´ bec does not  c c 
$
c c 2
$
c 
c  
c   c
contain any promise or order to c 
c $ c
%
c c 


c 
c  
c
pay money  ccc


cc
cc
c!cc
Yc described as uasi-Negotiaple 
c  c'5
cDc,  c+ccc
bec oftentimes, by application of c  c
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c  c
the principles of estoppel, and $c 

c 
c c c c
c 
c
to effectuate the ends of ustice


cc,cc2
cc
 c$ cc
and the intention of the parties, c $ c
%
c c 


c 

$
c c
c

ccc#  c c
c#c c
c
the courts decree a better title
c 
cc
c c
to the transferee than actually
   c c !c 

c c 

c
existed in his transferor, and is
 
c c /

c c 
c 

c
the same as would be reached if  c c c 
c  

c c
 

c
the certificate were negotiable. 
c c
$
c cc
c

c c
c
Yc Ñhen the shareholder signs the  
c c /

c 

c 
c
back of certificates of stock  
c 

c !
c c  c 
4
c c
without filling in the blanks
for  c  c  c 


c c 
c


c
the name of the transferee and 
c  c 
c c $
c 
c 
c c

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã
 c


%
c c c  c c  c  c  c 


c C.c

 


c4
cc
c c
cc
c 
 
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c

c 1.c m   
   

c 
c 
c c  c 
c 

c c !c Yc Under Art 1518 Civil Code, a


c c 
c 
c c #  c c Ô


c
holder of a negotiable document

c

c

c',cc2
+c

c
of title in good faith, for value and
c


c 
c 8 c c $
c


c c c 
c  
c c 
c 
c without notice is placed on the
c 
c 
c $
 c c Ô


c same level as a HDC of a
 c 
c  
c !c c

c negotiable instrument  i.e.,
c $  c  c c 
c


c personal defenses enumerated in
!  
c 
c c c   
c c said article are not available
c ccc against him. Personal defenses
c includeV negotiation was a breach
CAPCO v. MACASAET (1990). of duty on the part of the person
,

c c !c 
c 

c c making the negotiation, owner of
/

c  
c &
c 
c the document was deprived of the

c c 
 
cc
c 
c c possession of the same by loss,
c 
c  c 
c c 
c !c c
$
c theft, fraud, accident, mistake,
!c

c c cc
c !c duress or conversion.
 $
c  c 
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c c 
c  


c c
Yc Note Art 11
¶s conflict with Art

c c  c 
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c c 
c  
//c
11.
see p 1

c c 
c  c  
 
c c

c

c c 
c  c 
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 cc
cc!c

ccc .c m
   
  
N TEV see

c c
c
c

c
c
c 
c Arts 11, 11 and 11 Civil Code
 c c 
c !c c  c !c 

c
c  c  c c 
c  !c c 
c 
c a.c A person to whom a negotiable

c c !c 

c 

c 
$

c c document of title has been duly
#
c c 2

c 
c 

9c c c negotiated acquires the   of
 

c c 
$
c 

c c the person NEG T£AT£NG it as
#
c 
c  c c  c 
c c   c well as the title of the R£G£NAL

c 

c c c c
c c c 
  c c BA£L R or depositor of the goods.
#
cc
$
c
c!c

cc ex. if the original bailor had no

c c
c authority from such owner to
 deposit the goods, then the
 holder of the negotiable
 document, even if the negotiation
B.c Ú

   same as those used in to him was valid, cannot acquire
N£s to order=delivery  indorsement, title to the goods AND even if the
to bearer = delivery original bailor had authority, if the
1.c The means of negotiating a negotiation to the present
document of title are the same as holder¶s transferor was not valid,
those used in negotiable such holder, even if in good faith
instruments. and for value, does not acquire
.c £f by the terms of the document, the any right to the goods. È the
goods are deliverable to the order of holder¶s remedy if any, is against
a specified person, then it should be his transferor and/or the guilty
indorsed by such person, either party.
specially or in blank. Yc Thus, if the original bailor or
.c £f the goods are deliverable to depositor of the goods was
bearer, or the document has been not the owner thereof or had
indorsed in blank, then negotiation no authority from such owner
may be by mere delivery. to deposit the goods, then the
 holder of the negotiable
 document, even if the
 negotiation to him was valid,
 cannot acquire title to the
 goods.
 Yc n the other hand, even if
 the original bailor or
 depositor was the owner or

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.
 Ã
c
[Japee_DeLeon.


à [Ascheia_Yumul. 

à [Paul_Sorino/Judy_Ripol. 

à [Hya_Rafael/Mac_Macapagal. 

Ã
[Vivian_Tan/Justin_Mendoza.



à [Miguel_DeJesus.



 m à [Lianne_Gervasio.

Ã
[Ces_Sicangco/Rowena_Romero.


Ã
 c

had authority from the
owner, if the negotiation to
the present holder¶s
transferor was not valid,
, he warrants that he
such holder, even if in good
faith and for value, does not
acquire any right to the
goods.
Yc £n both cases, the holder¶s
remedy if any, is against his
transferor and/or the guilty
party.

b.c The person to whom the
document has been negotiated
right to negotiate it and his lack of
knowledge of any fact which would
impair its validity.
Yc As to the
has the right to transfer title thereto
and that they are merchantable.
Yc However, unlike the indorser of a N£
who is liable if the primary party fails
to pay, the indorser of a negotiable
document of title is not liable for the
failure of the bailee to fulfill his
obligation to deliver the goods.
ROMAN v ASIA BANKING CORP. (1922).
c


c


cc
c




c
c
acquires the 


  of the c c
$
c 
c c c c $c  c 
c


  
  
  to 
c
$

c c 
c


c c  c 
c c
him, as if they had contracted 

c c 
c 
c 4
c c 
c 


c c 
c
directly with each other. 

c c 




c 

c c Ô
c



cc !cc
c


c cc
$

c
1.c By issuing a negotiable
  c!c 
cc
c
cc
c
cc
c
document of title, such



c 


c
c 
cc !
c
c


c
bailee had given in advance


c c 




c 
c


c c c
his consent to hold the 
!
c:/

;c
goods for any person to c
whom such document is SIY CONG BIENG v. HSBC.
negotiated.
c
c 

c c
c c 

c 

cc $
c
.c £f document nonnegotiable, 
c 
c 
c c c 

c
notice of any transfer 


c


c
c c 
c 


c c 
c
should be given to the 

c 
c c 



c c c c




c c 
c
bailee otherwise bailee or c   c c 
c 
 

c 
c $ 
c 

c
any other person other than

c c

 c 

c 


c c 
c 
c
the transferor not bound $ cc



cc
c
cc
c

c


c
.c Thus, the transferee¶s rights
may be defeated by a levy
of attachment on the goods c
or by a notification to the
bailee of a sale of the goods
to another purchaser.
.c A sale of the goods without
the document will not
preudice a subsequent
purchaser who takes the
document in good faith and
for value.
.c The bailee¶s delivery to the
legal holder of the
document would relieve him
of any further responsibility
for the goods.



D.c 

 

Yc The indorsement of a negotiable

document of title carries with it
certain implied warranties by the
indorser.
Yc As to the  , his warranty
covers its genuineness, his legal

[Lorybeth_Baldrias.m
à [Nayna_Malayang. à [Dionne_Sanchez.

à [Jam_Jacob. 

Ã
[Bobbie_StaMaria.  
à [Miles Malaya.  Ã
c
[Japee_DeLeon. 
à [Ascheia_Yumul. 
à [Paul_Sorino/Judy_Ripol. 
à [Hya_Rafael/Mac_Macapagal. 
Ã
[Vivian_Tan/Justin_Mendoza.

à [Miguel_DeJesus.

 m à [Lianne_Gervasio.
Ã
[Ces_Sicangco/Rowena_Romero.

Ã