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ACT NO. 2031 Sec. 3. When promise is unconditional.

ec. 3. When promise is unconditional. - An (a) authorizes the sale of collateral (a) When it is so expressed to be payable
February 03, 1911 unqualified order or promise to pay is securities in case the instrument be not on demand, or at sight, or on presentation;
unconditional within the meaning of this Act paid at maturity; or or
THE NEGOTIABLE INSTRUMENTS LAW though coupled
I. FORM AND INTERPRETATION with:chanroblesvirtuallawlibrary (b) authorizes a confession of judgment if (b) In which no time for payment is
(a) An indication of a particular fund out of the instrument be not paid at maturity; or expressed.
Section 1. Form of negotiable instruments. which reimbursement is to be made or a Where an instrument is issued, accepted,
- An instrument to be negotiable must particular account to be debited with the (c) waives the benefit of any law intended or indorsed when overdue, it is, as regards
conform to the following amount; or for the advantage or protection of the the person so issuing, accepting, or
requirements:chanroblesvirtuallawlibrary obligor; or indorsing it, payable on demand.
(a) It must be in writing and signed by the (b) A statement of the transaction which
maker or drawer; gives rise to the instrument. (d) gives the holder an election to require Sec. 8. When payable to order. - The
But an order or promise to pay out of a something to be done in lieu of payment instrument is payable to order where it is
(b) Must contain an unconditional promise or particular fund is not of money. drawn payable to the order of a specified
order to pay a sum certain in money; unconditional.chan robles virtual law library But nothing in this section shall validate person or to him or his order. It may be
any provision or stipulation otherwise drawn payable to the order
(c) Must be payable on demand, or at a fixed Sec. 4. Determinable future time; what illegal. of:chanroblesvirtuallawlibrary
or determinable future time; constitutes. - An instrument is payable at a (a) A payee who is not maker, drawer, or
determinable future time, within the Sec. 6. Omissions; seal; particular money. drawee; or
(d) Must be payable to order or to bearer; and meaning of this Act, which is expressed to be - The validity and negotiable character of
payable:chanroblesvirtuallawlibrary an instrument are not affected by the fact (b) The drawer or maker; or
(e) Where the instrument is addressed to a (a) At a fixed period after date or sight; or that:chanroblesvirtuallawlibrary
drawee, he must be named or otherwise (a) it is not dated; or (c) The drawee; or
indicated therein with reasonable certainty. (b) On or before a fixed or determinable
Sec. 2. What constitutes certainty as to sum. - future time specified therein; or (b) does not specify the value given, or (d) Two or more payees jointly; or
The sum payable is a sum certain within the that any value had been given therefor; or
meaning of this Act, although it is to be (c) On or at a fixed period after the (e) One or some of several payees; or
paid:chanroblesvirtuallawlibrary occurrence of a specified event which is (c) does not specify the place where it is
(a) with interest; or certain to happen, though the time of drawn or the place where it is payable; or (f) The holder of an office for the time
happening be uncertain. being.
(b) by stated installments; or An instrument payable upon a contingency is (d) bears a seal; or Where the instrument is payable to order,
not negotiable, and the happening of the the payee must be named or otherwise
(c) by stated installments, with a provision event does not cure the defect. (e) designates a particular kind of current indicated therein with reasonable
that, upon default in payment of any money in which payment is to be made. certainty.
installment or of interest, the whole shall Sec. 5. Additional provisions not affecting But nothing in this section shall alter or
become due; or negotiability. - An instrument which contains repeal any statute requiring in certain Sec. 9. When payable to bearer. - The
an order or promise to do any act in addition cases the nature of the consideration to be instrument is payable to
(d) with exchange, whether at a fixed rate or at to the payment of money is not negotiable. stated in the instrument. bearer:chanroblesvirtuallawlibrary
the current rate; or But the negotiable character of an (a) When it is expressed to be so payable;
instrument otherwise negotiable is not Sec. 7. When payable on demand. - An or
(e) with costs of collection or an attorney's fee, affected by a provision instrument is payable on
in case payment shall not be made at maturity. which:chanroblesvirtuallawlibrary demand:chanroblesvirtuallawlibrary (b) When it is payable to a person named
therein or bearer; or wrong date does not avoid the instrument in giving effect thereto. As between
the hands of a subsequent holder in due immediate parties and as regards a remote (c) Where the instrument is not dated, it
(c) When it is payable to the order of a course; but as to him, the date so inserted is party other than a holder in due course, will be considered to be dated as of the
fictitious or non-existing person, and such fact to be regarded as the true date. the delivery, in order to be effectual, must time it was issued;
was known to the person making it so payable; be made either by or under the authority
or Sec. 14. Blanks; when may be filled. - Where of the party making, drawing, accepting, or (d) Where there is a conflict between the
the instrument is wanting in any material indorsing, as the case may be; and, in such written and printed provisions of the
(d) When the name of the payee does not particular, the person in possession thereof case, the delivery may be shown to have instrument, the written provisions prevail;
purport to be the name of any has a prima facie authority to complete it by been conditional, or for a special purpose
person; or filling up the blanks therein. And a signature only, and not for the purpose of (e) Where the instrument is so ambiguous
on a blank paper delivered by the person transferring the property in the that there is doubt whether it is a bill or
(e) When the only or last indorsement is an making the signature in order that the paper instrument. But where the instrument is in note, the holder may treat it as either at
indorsement in blank. may be converted into a negotiable the hands of a holder in due course, a valid his election;
Sec. 10. Terms, when sufficient. - The instrument operates as a prima facie delivery thereof by all parties prior to him
instrument need not follow the language of authority to fill it up as such for any amount. so as to make them liable to him is (f) Where a signature is so placed upon the
this Act, but any terms are sufficient which In order, however, that any such instrument conclusively presumed. And where the instrument that it is not clear in what
clearly indicate an intention to conform to the when completed may be enforced against instrument is no longer in the possession capacity the person making the same
requirements hereof. any person who became a party thereto of a party whose signature appears intended to sign, he is to be deemed an
prior to its completion, it must be filled up thereon, a valid and intentional delivery by indorser;
Sec. 11. Date, presumption as to. - Where the strictly in accordance with the authority him is presumed until the contrary is
instrument or an acceptance or any given and within a reasonable time. But if proved. (g) Where an instrument containing the
indorsement thereon is dated, such date is any such instrument, after completion, is word "I promise to pay" is signed by two or
deemed prima facie to be the true date of the negotiated to a holder in due course, it is Sec. 17. Construction where instrument is more persons, they are deemed to be
making, drawing, acceptance, or indorsement, valid and effectual for all purposes in his ambiguous. - Where the language of the jointly and severally liable thereon.
as the case may be. chanrobles law hands, and he may enforce it as if it had instrument is ambiguous or there are
been filled up strictly in accordance with the omissions therein, the following rules of Sec. 18. Liability of person signing in trade
Sec. 12. Ante-dated and post-dated. - The authority given and within a reasonable construction or assumed name. - No person is liable on
instrument is not invalid for the reason only time. apply:chanroblesvirtuallawlibrary the instrument whose signature does not
that it is ante-dated or post-dated, provided (a) Where the sum payable is expressed in appear thereon, except as herein
this is not done for an illegal or fraudulent Sec. 15. Incomplete instrument not words and also in figures and there is a otherwise expressly provided. But one who
purpose. The person to whom an instrument delivered. - Where an incomplete instrument discrepancy between the two, the sum signs in a trade or assumed name will be
so dated is delivered acquires the title thereto has not been delivered, it will not, if denoted by the words is the sum payable; liable to the same extent as if he had
as of the date of delivery. completed and negotiated without authority, but if the words are ambiguous or signed in his own name.
be a valid contract in the hands of any uncertain, reference may be had to the
Sec. 13. When date may be inserted. - Where holder, as against any person whose figures to fix the amount; Sec. 19. Signature by agent; authority; how
an instrument expressed to be payable at a signature was placed thereon before shown. - The signature of any party may be
fixed period after date is issued undated, or delivery. (b) Where the instrument provides for the made by a duly authorized agent. No
where the acceptance of an instrument payment of interest, without specifying the particular form of appointment is
payable at a fixed period after sight is undated, Sec. 16. Delivery; when effectual; when date from which interest is to run, the necessary for this purpose; and the
any holder may insert therein the true date of presumed. - Every contract on a negotiable interest runs from the date of the authority of the agent may be established
issue or acceptance, and the instrument shall instrument is incomplete and revocable until instrument, and if the instrument is as in other cases of agency.
be payable accordingly. The insertion of a delivery of the instrument for the purpose of undated, from the issue thereof;
Sec. 20. Liability of person signing as agent, consideration; and every person whose specifies no indorsee, and an instrument so
and so forth. - Where the instrument contains signature appears thereon to have become a Sec. 30. What constitutes negotiation. - An indorsed is payable to bearer, and may be
or a person adds to his signature words party thereto for value. instrument is negotiated when it is negotiated by delivery.
indicating that he signs for or on behalf of a transferred from one person to another in
principal or in a representative capacity, he is Sec. 25. Value, what constitutes. Value is such manner as to constitute the Sec. 35. Blank indorsement; how changed
not liable on the instrument if he was duly any consideration sufficient to support a transferee the holder thereof. If payable to to special indorsement. - The holder may
authorized; but the mere addition of words simple contract. An antecedent or pre- bearer, it is negotiated by delivery; if convert a blank indorsement into a special
describing him as an agent, or as filling a existing debt constitutes value; and is payable to order, it is negotiated by the indorsement by writing over the signature
representative character, without disclosing deemed such whether the instrument is indorsement of the holder and completed of the indorser in blank any contract
his principal, does not exempt him from payable on demand or at a future time. by delivery. consistent with the character of the
personal liability. indorsement.
Sec. 26. What constitutes holder for value. - Sec. 31. Indorsement; how made. - The
Sec. 21. Signature by procuration; effect of. - A Where value has at any time been given for indorsement must be written on the Sec. 36. When indorsement restrictive. - An
signature by "procuration" operates as notice the instrument, the holder is deemed a instrument itself or upon a paper attached indorsement is restrictive which
that the agent has but a limited authority to holder for value in respect to all parties who thereto. The signature of the indorser, either:chanroblesvirtuallawlibrary
sign, and the principal is bound only in case become such prior to that time. without additional words, is a sufficient (a) Prohibits the further negotiation of the
the agent in so signing acted within the actual Sec. 27. When lien on instrument constitutes indorsement. instrument; or
limits of his authority. holder for value. Where the holder has a
lien on the instrument arising either from Sec. 32. Indorsement must be of entire (b) Constitutes the indorsee the agent of
Sec. 22. Effect of indorsement by infant or contract or by implication of law, he is instrument. - The indorsement must be an the indorser; or
corporation.- The indorsement or assignment deemed a holder for value to the extent of indorsement of the entire instrument. An
of the instrument by a corporation or by an his lien. indorsement which purports to transfer to (c) Vests the title in the indorsee in trust for
infant passes the property therein, the indorsee a part only of the amount or to the use of some other persons.
notwithstanding that from want of capacity, Sec. 28. Effect of want of consideration. payable, or which purports to transfer the But the mere absence of words implying
the corporation or infant may incur no liability - Absence or failure of consideration is a instrument to two or more indorsees power to negotiate does not make an
thereon. matter of defense as against any person not severally, does not operate as a indorsement restrictive.
a holder in due course; and partial failure of negotiation of the instrument. But where
Sec. 23. Forged signature; effect of. - When a consideration is a defense pro tanto, the instrument has been paid in part, it Sec. 37. Effect of restrictive indorsement;
signature is forged or made without the whether the failure is an ascertained and may be indorsed as to the residue. rights of indorsee. - A restrictive
authority of the person whose signature it liquidated amount or otherwise. indorsement confers upon the indorsee the
purports to be, it is wholly inoperative, and no Sec. 33. Kinds of indorsement. - An right:chanroblesvirtuallawlibrary
right to retain the instrument, or to give a Sec. 29. Liability of accommodation party. - indorsement may be either special or in (a) to receive payment of the instrument;
discharge therefor, or to enforce payment An accommodation party is one who has blank; and it may also be either restrictive
thereof against any party thereto, can be signed the instrument as maker, drawer, or qualified or conditional. (b) to bring any action thereon that the
acquired through or under such signature, acceptor, or indorser, without receiving value indorser could bring;
unless the party against whom it is sought to therefor, and for the purpose of lending his Sec. 34. Special indorsement; indorsement
enforce such right is precluded from setting up name to some other person. Such a person is in blank. - A special indorsement specifies (c) to transfer his rights as such indorsee,
the forgery or want of authority. liable on the instrument to a holder for the person to whom, or to whose order, where the form of the indorsement
II. CONSIDERATION value, notwithstanding such holder, at the the instrument is to be payable, and the authorizes him to do so.
Sec. 24. Presumption of consideration. - Every time of taking the instrument, knew him to indorsement of such indorsee is necessary But all subsequent indorsees acquire only
negotiable instrument is deemed prima be only an accommodation party. to the further negotiation of the the title of the first indorsee under the
facie to have been issued for a valuable III. NEGOTIATION instrument. An indorsement in blank restrictive indorsement.
or corporation of which he is such officer, struck out, and all indorsers subsequent to has been previously dishonored, if such
Sec. 38. Qualified indorsement. - A qualified and may be negotiated by either the him, are thereby relieved from liability on was the fact;
indorsement constitutes the indorser a mere indorsement of the bank or corporation or the instrument.
assignor of the title to the instrument. It may the indorsement of the officer. (c) That he took it in good faith and for
be made by adding to the indorser's signature Sec. 49. Transfer without indorsement; value;
the words "without recourse" or any words of Sec. 43. Indorsement where name is effect of. - Where the holder of an
similar import. Such an indorsement does not misspelled, and so forth. - Where the name instrument payable to his order transfers it (d) That at the time it was negotiated to
impair the negotiable character of the of a payee or indorsee is wrongly designated for value without indorsing it, the transfer him, he had no notice of any infirmity in
instrument. or misspelled, he may indorse the vests in the transferee such title as the the instrument or defect in the title of the
instrument as therein described adding, if he transferor had therein, and the transferee person negotiating it.
Sec. 39. Conditional indorsement. - Where an thinks fit, his proper signature. acquires in addition, the right to have the Sec. 53. When person not deemed holder
indorsement is conditional, the party required indorsement of the transferor. But for the in due course. - Where an instrument
to pay the instrument may disregard the Sec. 44. Indorsement in representative purpose of determining whether the payable on demand is negotiated on an
condition and make payment to the indorsee capacity. - Where any person is under transferee is a holder in due course, the unreasonable length of time after its issue,
or his transferee whether the condition has obligation to indorse in a representative negotiation takes effect as of the time the holder is not deemed a holder in due
been fulfilled or not. But any person to whom capacity, he may indorse in such terms as to when the indorsement is actually made. course.
an instrument so indorsed is negotiated will negative personal liability. robles virtual law
hold the same, or the proceeds thereof, library Sec. 50. When prior party may negotiate Sec. 54. Notice before full amount is paid. -
subject to the rights of the person indorsing instrument. - Where an instrument is Where the transferee receives notice of
conditionally. Sec. 45. Time of indorsement; negotiated back to a prior party, such party any infirmity in the instrument or defect in
presumption. - Except where an may, subject to the provisions of this Act, the title of the person negotiating the
Sec. 40. Indorsement of instrument payable to indorsement bears date after the maturity of reissue and further negotiable the same. same before he has paid the full amount
bearer. - Where an instrument, payable to the instrument, every negotiation is deemed But he is not entitled to enforce payment agreed to be paid therefor, he will be
bearer, is indorsed specially, it may prima facie to have been effected before the thereof against any intervening party to deemed a holder in due course only to the
nevertheless be further negotiated by instrument was overdue. whom he was personally liable. extent of the amount therefore paid by
delivery; but the person indorsing specially is IV. RIGHTS OF THE HOLDER him.
liable as indorser to only such holders as make Sec. 46. Place of indorsement; Sec. 51. Right of holder to sue; payment. -
title through his indorsement. presumption. - Except where the contrary The holder of a negotiable instrument may Sec. 55. When title defective. - The title of
appears, every indorsement is presumed to sue thereon in his own name; and a person who negotiates an instrument is
Sec. 41. Indorsement where payable to two or prima facie to have been made at the place payment to him in due course discharges defective within the meaning of this Act
more persons. - Where an instrument is where the instrument is dated. the instrument. when he obtained the instrument, or any
payable to the order of two or more payees or signature thereto, by fraud, duress, or force
indorsees who are not partners, all must Sec. 47. Continuation of negotiable Sec. 52. What constitutes a holder in due and fear, or other unlawful means, or for
indorse unless the one indorsing has authority character. - An instrument negotiable in its course. - A holder in due course is a holder an illegal consideration, or when he
to indorse for the others. origin continues to be negotiable until it has who has taken the instrument under the negotiates it in breach of faith, or under
been restrictively indorsed or discharged by following such circumstances as amount to a fraud.
Sec. 42. Effect of instrument drawn or payment or otherwise. conditions:chanroblesvirtuallawlibrary
indorsed to a person as (a) That it is complete and regular upon its Sec. 56. What constitutes notice of defect. -
cashier. - Where an instrument is drawn or Sec. 48. Striking out indorsement. - The face; To constitutes notice of an infirmity in the
indorsed to a person as "cashier" or other holder may at any time strike out any instrument or defect in the title of the
fiscal officer of a bank or corporation, it is indorsement which is not necessary to his (b) That he became the holder of it before person negotiating the same, the person to
deemed prima facie to be payable to the bank title. The indorser whose indorsement is it was overdue, and without notice that it whom it is negotiated must have had
actual knowledge of the infirmity or defect, or Sec. 61. Liability of drawer. - The drawer by (a) If the instrument is payable to the order holders in due
knowledge of such facts that his action in drawing the instrument admits the existence of a third person, he is liable to the payee course:chanroblesvirtuallawlibrary
taking the instrument amounted to bad faith. of the payee and his then capacity to and to all subsequent parties. (a) The matters and things mentioned in
indorse; and engages that, on due subdivisions (a), (b), and (c) of the next
Sec. 57. Rights of holder in due course. - A presentment, the instrument will be (b) If the instrument is payable to the preceding section; and
holder in due course holds the instrument free accepted or paid, or both, according to its order of the maker or drawer, or is payable
from any defect of title of prior parties, and tenor, and that if it be dishonored and the to bearer, he is liable to all parties (b) That the instrument is, at the time of
free from defenses available to prior parties necessary proceedings on dishonor be duly subsequent to the maker or drawer. his indorsement, valid and subsisting;
among themselves, and may enforce payment taken, he will pay the amount thereof to the And, in addition, he engages that, on due
of the instrument for the full amount thereof holder or to any subsequent indorser who (c) If he signs for the accommodation of presentment, it shall be accepted or paid,
against all parties liable thereon. robles virtual may be compelled to pay it. But the drawer the payee, he is liable to all parties or both, as the case may be, according to
law library may insert in the instrument an express subsequent to the payee. its tenor, and that if it be dishonored and
stipulation negativing or limiting his own Sec. 65. Warranty where negotiation by the necessary proceedings on dishonor be
Sec. 58. When subject to original defense. - In liability to the holder. delivery and so forth. Every person duly taken, he will pay the amount thereof
the hands of any holder other than a holder in negotiating an instrument by delivery or by to the holder, or to any subsequent
due course, a negotiable instrument is subject Sec. 62. Liability of acceptor. - The acceptor, a qualified indorsement indorser who may be compelled to pay it.
to the same defenses as if it were non- by accepting the instrument, engages that warrants:chanroblesvirtuallawlibrary
negotiable. But a holder who derives his title he will pay it according to the tenor of his (a) That the instrument is genuine and in Sec. 67. Liability of indorser where paper
through a holder in due course, and who is not acceptance and all respects what it purports to be; negotiable by delivery. Where a person
himself a party to any fraud or illegality admits:chanroblesvirtuallawlibrary places his indorsement on an instrument
affecting the instrument, has all the rights of (a) The existence of the drawer, the (b) That he has a good title to it; negotiable by delivery, he incurs all the
such former holder in respect of all parties genuineness of his signature, and his liability of an indorser.
prior to the latter. capacity and authority to draw the (c) That all prior parties had capacity to
instrument; and contract; Sec. 68. Order in which indorsers are
Sec. 59. Who is deemed holder in due liable. - As respect one another, indorsers
course. - Every holder is deemed prima facie (b) The existence of the payee and his then (d) That he has no knowledge of any fact are liable prima facie in the order in which
to be a holder in due course; but when it is capacity to indorse. which would impair the validity of the they indorse; but evidence is admissible to
shown that the title of any person who has Sec. 63. When a person deemed indorser. - A instrument or render it valueless. show that, as between or among
negotiated the instrument was defective, the person placing his signature upon an But when the negotiation is by delivery themselves, they have agreed otherwise.
burden is on the holder to prove that he or instrument otherwise than as maker, drawer, only, the warranty extends in favor of no Joint payees or joint indorsees who indorse
some person under whom he claims acquired or acceptor, is deemed to be indorser unless holder other than the immediate are deemed to indorse jointly and
the title as holder in due course. But the last- he clearly indicates by appropriate words his transferee. severally. robles virtual law library
mentioned rule does not apply in favor of a intention to be bound in some other
party who became bound on the instrument capacity. The provisions of subdivision (c) of this Sec. 69. Liability of an agent or broker. -
prior to the acquisition of such defective title. section do not apply to a person Where a broker or other agent negotiates
V. LIABILITIES OF PARTIES Sec. 64. Liability of irregular indorser. - negotiating public or corporation securities an instrument without indorsement, he
Sec. 60. Liability of maker. - The maker of a Where a person, not otherwise a party to an other than bills and notes. incurs all the liabilities prescribed by
negotiable instrument, by making it, engages instrument, places thereon his signature in Section Sixty-five of this Act, unless he
that he will pay it according to its tenor, and blank before delivery, he is liable as indorser, Sec. 66. Liability of general indorser. - Every discloses the name of his principal and the
admits the existence of the payee and his then in accordance with the following indorser who indorses without fact that he is acting only as agent.
capacity to indorse. rules:chanroblesvirtuallawlibrary qualification, warrants to all subsequent VI. PRESENTATION FOR PAYMENT
Sec. 70. Effect of want of demand on principal (a) Where a place of payment is specified in Sec. 77. Presentment to persons liable as excused. - Presentment for payment is
debtor. - Presentment for payment is not the instrument and it is there presented; partners. - Where the persons primarily excused:chanroblesvirtuallawlibrary
necessary in order to charge the person liable on the instrument are liable as (a) Where, after the exercise of reasonable
primarily liable on the instrument; but if the (b) Where no place of payment is specified partners and no place of payment is diligence, presentment, as required by this
instrument is, by its terms, payable at a special but the address of the person to make specified, presentment for payment may Act, cannot be made;
place, and he is able and willing to pay it there payment is given in the instrument and it is be made to any one of them, even though
at maturity, such ability and willingness are there presented; there has been a dissolution of the firm. (b) Where the drawee is a fictitious
equivalent to a tender of payment upon his person;
part. But except as herein otherwise provided, (c) Where no place of payment is specified Sec. 78. Presentment to joint debtors. -
presentment for payment is necessary in order and no address is given and the instrument Where there are several persons, not (c) By waiver of presentment, express or
to charge the drawer and indorsers. is presented at the usual place of business or partners, primarily liable on the implied.
residence of the person to make payment; instrument and no place of payment is Sec. 83. When instrument dishonored by
Sec. 71. Presentment where instrument is not specified, presentment must be made to non-payment. - The instrument is
payable on demand and where payable on (d) In any other case if presented to the them all. dishonored by non-payment
demand. - Where the instrument is not person to make payment wherever he can when:chanroblesvirtuallawlibrary
payable on demand, presentment must be be found, or if presented at his last known Sec. 79. When presentment not required (a) It is duly presented for payment and
made on the day it falls due. Where it is place of business or residence. to charge the drawer. -Presentment for payment is refused or cannot be obtained;
payable on demand, presentment must be Sec. 74. Instrument must be exhibited. - The payment is not required in order to charge or
made within a reasonable time after its issue, instrument must be exhibited to the person the drawer where he has no right to
except that in the case of a bill of exchange, from whom payment is demanded, and expect or require that the drawee or (b) Presentment is excused and the
presentment for payment will be sufficient if when it is paid, must be delivered up to the acceptor will pay the instrument. instrument is overdue and unpaid.
made within a reasonable time after the last party paying it. Sec. 84. Liability of person secondarily
negotiation thereof. Sec. 80. When presentment not required liable, when instrument dishonored. -
Sec. 75. Presentment where instrument to charge the indorser. -Presentment is not Subject to the provisions of this Act, when
Sec. 72. What constitutes a sufficient payable at bank. - Where the instrument is required in order to charge an indorser the instrument is dishonored by non-
presentment. - Presentment for payment, to payable at a bank, presentment for payment where the instrument was made or payment, an immediate right of recourse
be sufficient, must be must be made during banking hours, unless accepted for his accommodation and he to all parties secondarily liable thereon
made:chanroblesvirtuallawlibrary the person to make payment has no funds has no reason to expect that the accrues to the holder. robles virtual law
(a) By the holder, or by some person there to meet it at any time during the day, instrument will be paid if presented. library
authorized to receive payment on his behalf; in which case presentment at any hour
before the bank is closed on that day is Sec. 81. When delay in making Sec. 85. Time of maturity. - Every
(b) At a reasonable hour on a business day; sufficient. presentment is excused. - Delay in making negotiable instrument is payable at the
presentment for payment is excused when time fixed therein without grace. When the
(c) At a proper place as herein defined; Sec. 76. Presentment where principal debtor the delay is caused by circumstances day of maturity falls upon Sunday or a
is dead. - Where the person primarily liable beyond the control of the holder and not holiday, the instruments falling due or
(d) To the person primarily liable on the on the instrument is dead and no place of imputable to his default, misconduct, or becoming payable on Saturday are to be
instrument, or if he is absent or inaccessible, payment is specified, presentment for negligence. When the cause of delay presented for payment on the next
to any person found at the place where the payment must be made to his personal ceases to operate, presentment must be succeeding business day except that
presentment is made. representative, if such there be, and if, with made with reasonable diligence. instruments payable on demand may, at
Sec. 73. Place of presentment. - Presentment the exercise of reasonable diligence, he can the option of the holder, be presented for
for payment is made at the proper be found. Sec. 82. When presentment for payment is payment before twelve o'clock noon on
place:chanroblesvirtuallawlibrary Saturday when that entire day is not a
holiday. dishonor may be given by any agent either in instrument, and indicate that it has been delay is excused as hereinafter provided,
his own name or in the name of any party dishonored by non-acceptance or non- must be given within the time fixed by this
Sec. 86. Time; how computed. - When the entitled to given notice, whether that party payment. It may in all cases be given by Act.
instrument is payable at a fixed period after be his principal or not. delivering it personally or through the
date, after sight, or after that happening of a mails. Sec. 103. Where parties reside in same
specified event, the time of payment is Sec. 92. Effect of notice on behalf of holder. - place. - Where the person giving and the
determined by excluding the day from which Where notice is given by or on behalf of the Sec. 97. To whom notice may be given. - person to receive notice reside in the same
the time is to begin to run, and by including holder, it inures to the benefit of all Notice of dishonor may be given either to place, notice must be given within the
the date of payment. subsequent holders and all prior parties who the party himself or to his agent in that following times:chanroblesvirtuallawlibrary
have a right of recourse against the party to behalf. (a) If given at the place of business of the
Sec. 87. Rule where instrument payable at whom it is given. person to receive notice, it must be given
bank. - Where the instrument is made payable Sec. 98. Notice where party is dead. before the close of business hours on the
at a bank, it is equivalent to an order to the Sec. 93. Effect where notice is given by party - When any party is dead and his death is day following.
bank to pay the same for the account of the entitled thereto. - Where notice is given by known to the party giving notice, the
principal debtor thereon. or on behalf of a party entitled to give notice must be given to a personal (b) If given at his residence, it must be
notice, it inures to the benefit of the holder representative, if there be one, and if with given before the usual hours of rest on the
Sec. 88. What constitutes payment in due and all parties subsequent to the party to reasonable diligence, he can be found. If day following.
course. - Payment is made in due course when whom notice is given. chanrobles law there be no personal representative,
it is made at or after the maturity of the notice may be sent to the last residence or (c) If sent by mail, it must be deposited in
payment to the holder thereof in good faith Sec. 94. When agent may give notice. - last place of business of the deceased. the post office in time to reach him in usual
and without notice that his title is defective. Where the instrument has been dishonored course on the day following.
in the hands of an agent, he may either Sec. 99. Notice to partners. - Where the Sec. 104. Where parties reside in different
VII. NOTICE OF DISHONOR himself give notice to the parties liable parties to be notified are partners, notice places. - Where the person giving and the
thereon, or he may give notice to his to any one partner is notice to the firm, person to receive notice reside in different
Sec. 89. To whom notice of dishonor must be principal. If he gives notice to his principal, even though there has been a dissolution. places, the notice must be given within the
given. - Except as herein otherwise provided, he must do so within the same time as if he following times:chanroblesvirtuallawlibrary
when a negotiable instrument has been were the holder, and the principal, upon the Sec. 100. Notice to persons jointly liable. - (a) If sent by mail, it must be deposited in
dishonored by non-acceptance or non- receipt of such notice, has himself the same Notice to joint persons who are not the post office in time to go by mail the day
payment, notice of dishonor must be given to time for giving notice as if the agent had partners must be given to each of them following the day of dishonor, or if there be
the drawer and to each indorser, and any been an independent holder. unless one of them has authority to no mail at a convenient hour on last day, by
drawer or indorser to whom such notice is not receive such notice for the others. the next mail thereafter.
given is discharged. Sec. 95. When notice sufficient. - A written
notice need not be signed and an insufficient Sec. 101. Notice to bankrupt. - Where a (b) If given otherwise than through the
Sec. 90. By whom given. - The notice may be written notice may be supplemented and party has been adjudged a bankrupt or an post office, then within the time that
given by or on behalf of the holder, or by or on validated by verbal communication. A insolvent, or has made an assignment for notice would have been received in due
behalf of any party to the instrument who misdescription of the instrument does not the benefit of creditors, notice may be course of mail, if it had been deposited in
might be compelled to pay it to the holder, vitiate the notice unless the party to whom given either to the party himself or to his the post office within the time specified in
and who, upon taking it up, would have a right the notice is given is in fact misled thereby. trustee or assignee. the last subdivision.
to reimbursement from the party to whom the Sec. 105. When sender deemed to have
notice is given. Sec. 96. Form of notice. - The notice may be Sec. 102. Time within which notice must given due notice. - Where notice of
in writing or merely oral and may be given in be given. - Notice may be given as soon as dishonor is duly addressed and deposited
Sec. 91. Notice given by agent. - Notice of any terms which sufficiently identify the the instrument is dishonored and, unless in the post office, the sender is deemed to
have given due notice, notwithstanding any omission to give due notice, and the waiver the instrument is presented for payment; acceptance or non-payment, as the case
miscarriage in the mails. may be expressed or implied. may be; but protest is not required except
(d) Where the drawer has no right to in the case of foreign bills of
Sec. 106. Deposit in post office; what Sec. 110. Whom affected by waiver. - Where expect or require that the drawee or exchange.robles virtual law library
constitutes. - Notice is deemed to have been the waiver is embodied in the instrument acceptor will honor the instrument; VIII. DISCHARGE OF
deposited in the post-office when deposited in itself, it is binding upon all parties; but, NEGOTIABLE INSTRUMENTS
any branch post office or in any letter box where it is written above the signature of an (e) Where the drawer has countermanded
under the control of the post-office indorser, it binds him only. payment. Sec. 119. Instrument; how discharged. - A
department. Sec. 115. When notice need not be given negotiable instrument is
Sec. 111. Waiver of protest. - A waiver of to indorser. Notice of dishonor is not discharged:chanroblesvirtuallawlibrary
Sec. 107. Notice to subsequent party; time protest, whether in the case of a foreign bill required to be given to an indorser in (a) By payment in due course by or on
of. - Where a party receives notice of dishonor, of exchange or other negotiable instrument, either of the following behalf of the principal debtor;
he has, after the receipt of such notice, the is deemed to be a waiver not only of a cases:chanroblesvirtuallawlibrary
same time for giving notice to antecedent formal protest but also of presentment and (a) When the drawee is a fictitious person (b) By payment in due course by the party
parties that the holder has after the dishonor. notice of dishonor. or person not having capacity to contract, accommodated, where the instrument is
and the indorser was aware of that fact at made or accepted for his accommodation;
Sec. 108. Where notice must be sent. - Where Sec. 112. When notice is dispensed with. - the time he indorsed the instrument;
a party has added an address to his signature, Notice of dishonor is dispensed with when, (c) By the intentional cancellation thereof
notice of dishonor must be sent to that after the exercise of reasonable diligence, it (b) Where the indorser is the person to by the holder;
address; but if he has not given such address, cannot be given to or does not reach the whom the instrument is presented for
then the notice must be sent as parties sought to be charged. payment; (d) By any other act which will discharge a
follows:chanroblesvirtuallawlibrary simple contract for the payment of money;
(a) Either to the post-office nearest to his Sec. 113. Delay in giving notice; how (c) Where the instrument was made or
place of residence or to the post-office where excused. - Delay in giving notice of dishonor accepted for his accommodation. (e) When the principal debtor becomes the
he is accustomed to receive his letters; or is excused when the delay is caused by Sec. 116. Notice of non-payment where holder of the instrument at or after
circumstances beyond the control of the acceptance refused. - Where due notice of maturity in his own right.
(b) If he lives in one place and has his place of holder and not imputable to his default, dishonor by non-acceptance has been Sec. 120. When persons secondarily liable
business in another, notice may be sent to misconduct, or negligence. When the cause given, notice of a subsequent dishonor by on the instrument are discharged. - A
either place; or of delay ceases to operate, notice must be non-payment is not necessary unless in the person secondarily liable on the instrument
given with reasonable diligence. meantime the instrument has been is discharged:chanroblesvirtuallawlibrary
(c) If he is sojourning in another place, notice accepted. (a) By any act which discharges the
may be sent to the place where he is so Sec. 114. When notice need not be given to instrument;
sojourning. drawer. - Notice of dishonor is not required Sec. 117. Effect of omission to give notice
But where the notice is actually received by to be given to the drawer in either of the of non-acceptance. - An omission to give (b) By the intentional cancellation of his
the party within the time specified in this Act, following cases:chanroblesvirtuallawlibrary notice of dishonor by non-acceptance does signature by the holder;
it will be sufficient, though not sent in (a) Where the drawer and drawee are the not prejudice the rights of a holder in due
accordance with the requirement of this same person; course subsequent to the omission. (c) By the discharge of a prior party;
section.
(b) When the drawee is fictitious person or a Sec. 118. When protest need not be made; (d) By a valid tender or payment made by a
Sec. 109. Waiver of notice. - Notice of person not having capacity to contract; when must be made. - Where any prior party;
dishonor may be waived either before the negotiable instrument has been
time of giving notice has arrived or after the (c) When the drawer is the person to whom dishonored, it may be protested for non- (e) By a release of the principal debtor
unless the holder's right of recourse against the holder, is inoperative but where an BILLS OF EXCHANGE contract, the holder may treat the
the party secondarily liable is expressly instrument or any signature thereon appears instrument at his option either as a bill of
reserved; to have been cancelled, the burden of proof IX. FORM AND INTERPRETATION exchange or as a promissory note.
lies on the party who alleges that the
(f) By any agreement binding upon the holder cancellation was made unintentionally or Sec. 126. Bill of exchange, defined. - A bill Sec. 131. Referee in case of need. - The
to extend the time of payment or to postpone under a mistake or without authority. of exchange is an unconditional order in drawer of a bill and any indorser may insert
the holder's right to enforce the instrument writing addressed by one person to thereon the name of a person to whom the
unless made with the assent of the party Sec. 124. Alteration of instrument; effect of. - another, signed by the person giving it, holder may resort in case of need; that is to
secondarily liable or unless the right of Where a negotiable instrument is materially requiring the person to whom it is say, in case the bill is dishonored by non-
recourse against such party is expressly altered without the assent of all parties addressed to pay on demand or at a fixed acceptance or non-payment. Such person
reserved. liable thereon, it is avoided, except as or determinable future time a sum certain is called a referee in case of need. It is in
Sec. 121. Right of party who discharges against a party who has himself made, in money to order or to bearer. the option of the holder to resort to the
instrument. - Where the instrument is paid by authorized, or assented to the alteration and referee in case of need or not as he may
a party secondarily liable thereon, it is not subsequent indorsers. Sec. 127. Bill not an assignment of funds in see fit.
discharged; but the party so paying it is But when an instrument has been materially hands of drawee. - A bill of itself does not
remitted to his former rights as regard all prior altered and is in the hands of a holder in due operate as an assignment of the funds in X. ACCEPTANCE
parties, and he may strike out his own and all course not a party to the alteration, he may the hands of the drawee available for the
subsequent indorsements and against enforce payment thereof according to its payment thereof, and the drawee is not Sec. 132. Acceptance; how made, by and
negotiate the instrument, original tenor. liable on the bill unless and until he so forth. - The acceptance of a bill is the
except:chanroblesvirtuallawlibrary accepts the same. signification by the drawee of his assent to
(a) Where it is payable to the order of a third Sec. 125. What constitutes a material the order of the drawer. The acceptance
person and has been paid by the drawer; and alteration. - Any alteration which Sec. 128. Bill addressed to more than one must be in writing and signed by the
changes:chanroblesvirtuallawlibrary drawee. - A bill may be addressed to two drawee. It must not express that the
(b) Where it was made or accepted for (a) The date; or more drawees jointly, whether they are drawee will perform his promise by any
accommodation and has been paid by the partners or not; but not to two or more other means than the payment of money.
party accommodated. (b) The sum payable, either for principal or drawees in the alternative or in
Sec. 122. Renunciation by holder. - The holder interest; succession. Sec. 133. Holder entitled to acceptance on
may expressly renounce his rights against any face of bill. - The holder of a bill presenting
party to the instrument before, at, or after its (c) The time or place of Sec. 129. Inland and foreign bills of the same for acceptance may require that
maturity. An absolute and unconditional payment:chanroblesvirtuallawlibrary exchange. - An inland bill of exchange is a the acceptance be written on the bill, and,
renunciation of his rights against the principal bill which is, or on its face purports to be, if such request is refused, may treat the bill
debtor made at or after the maturity of the (d) The number or the relations of the both drawn and payable within the as dishonored.
instrument discharges the instrument. But a parties; Philippines. Any other bill is a foreign bill.
renunciation does not affect the rights of a Unless the contrary appears on the face of Sec. 134. Acceptance by separate
holder in due course without notice. A (e) The medium or currency in which the bill, the holder may treat it as an inland instrument. - Where an acceptance is
renunciation must be in writing unless the payment is to be made; bill. written on a paper other than the bill itself,
instrument is delivered up to the person it does not bind the acceptor except in
primarily liable thereon. (f) Or which adds a place of payment where Sec. 130. When bill may be treated as favor of a person to whom it is shown and
no place of payment is specified, or any promissory note. - Where in a bill the who, on the faith thereof, receives the bill
Sec. 123. Cancellation; unintentional; burden other change or addition which alters the drawer and drawee are the same person for value.
of proof. - A cancellation made unintentionally effect of the instrument in any respect, is a or where the drawee is a fictitious person
or under a mistake or without the authority of material alteration. or a person not having capacity to Sec. 135. Promise to accept; when
equivalent to acceptance. - An unconditional particular place is a general acceptance must be made. - Presentment for (b) Where the drawee is dead,
promise in writing to accept a bill before it is unless it expressly states that the bill is to be acceptance must be presentment may be made to his personal
drawn is deemed an actual acceptance in favor paid there only and not elsewhere. made:chanroblesvirtuallawlibrary representative;
of every person who, upon the faith thereof, (a) Where the bill is payable after sight, or
receives the bill for value. Sec. 141. Qualified acceptance. - An in any other case, where presentment for (c) Where the drawee has been adjudged a
acceptance is qualified which acceptance is necessary in order to fix the bankrupt or an insolvent or has made an
Sec. 136. Time allowed drawee to accept. - is:chanroblesvirtuallawlibrary maturity of the instrument; or assignment for the benefit of creditors,
The drawee is allowed twenty-four hours after (a) Conditional; that is to say, which makes presentment may be made to him or to his
presentment in which to decide whether or payment by the acceptor dependent on the (b) Where the bill expressly stipulates that trustee or assignee.
not he will accept the bill; the acceptance, if fulfillment of a condition therein stated; it shall be presented for acceptance; or Sec. 146. On what days presentment may
given, dates as of the day of presentation. be made. - A bill may be presented for
(b) Partial; that is to say, an acceptance to (c) Where the bill is drawn payable acceptance on any day on which negotiable
Sec. 137. Liability of drawee returning or pay part only of the amount for which the elsewhere than at the residence or place instruments may be presented for payment
destroying bill. - Where a drawee to whom a bill is drawn; of business of the drawee. under the provisions of Sections seventy-
bill is delivered for acceptance destroys the In no other case is presentment for two and eighty-five of this Act. When
same, or refuses within twenty-four hours (c) Local; that is to say, an acceptance to pay acceptance necessary in order to render Saturday is not otherwise a holiday,
after such delivery or within such other period only at a particular place; any party to the bill liable. presentment for acceptance may be made
as the holder may allow, to return the bill before twelve o'clock noon on that day.
accepted or non-accepted to the holder, he (d) Qualified as to time; Sec. 144. When failure to present releases
will be deemed to have accepted the same. drawer and indorser. - Except as herein Sec. 147. Presentment where time is
(e) The acceptance of some, one or more of otherwise provided, the holder of a bill insufficient. - Where the holder of a bill
Sec. 138. Acceptance of incomplete bill. - A bill the drawees but not of all. which is required by the next preceding drawn payable elsewhere than at the place
may be accepted before it has been signed by Sec. 142. Rights of parties as to qualified section to be presented for acceptance of business or the residence of the drawee
the drawer, or while otherwise incomplete, or acceptance. - The holder may refuse to take must either present it for acceptance or has no time, with the exercise of
when it is overdue, or after it has been a qualified acceptance and if he does not negotiate it within a reasonable time. If he reasonable diligence, to present the bill for
dishonored by a previous refusal to accept, or obtain an unqualified acceptance, he may fails to do so, the drawer and all indorsers acceptance before presenting it for
by non payment. But when a bill payable after treat the bill as dishonored by non- are discharged. payment on the day that it falls due, the
sight is dishonored by non-acceptance and the acceptance. Where a qualified acceptance is delay caused by presenting the bill for
drawee subsequently accepts it, the holder, in taken, the drawer and indorsers are Sec. 145. Presentment; how made. - acceptance before presenting it for
the absence of any different agreement, is discharged from liability on the bill unless Presentment for acceptance must be made payment is excused and does not discharge
entitled to have the bill accepted as of the they have expressly or impliedly authorized by or on behalf of the holder at a the drawers and indorsers.
date of the first presentment. the holder to take a qualified acceptance, or reasonable hour, on a business day and
subsequently assent thereto. When the before the bill is overdue, to the drawee or Sec. 148. Where presentment is excused.
Sec. 139. Kinds of acceptance. - An acceptance drawer or an indorser receives notice of a some person authorized to accept or - Presentment for acceptance is excused
is either general or qualified. A general qualified acceptance, he must, within a refuse acceptance on his behalf; and and a bill may be treated as dishonored by
acceptance assents without qualification to reasonable time, express his dissent to the (a) Where a bill is addressed to two or non-acceptance in either of the following
the order of the drawer. A qualified holder or he will be deemed to have more drawees who are not partners, cases:chanroblesvirtuallawlibrary
acceptance in express terms varies the effect assented thereto. presentment must be made to them all (a) Where the drawee is dead, or has
of the bill as drawn. unless one has authority to accept or absconded, or is a fictitious person or a
XI. PRESENTMENT FOR ACCEPTANCE refuse acceptance for all, in which case person not having capacity to contract by
Sec. 140. What constitutes a general presentment may be made to him only; bill.
acceptance. - An acceptance to pay at a Sec. 143. When presentment for acceptance
(b) Where, after the exercise of reasonable its face to be a foreign bill, protest thereof in further presentment for payment to, or overdue, any person not being a party
diligence, presentment can not be made. case of dishonor is unnecessary. demand on, the drawee is necessary. already liable thereon may, with the
consent of the holder, intervene and
(c) Where, although presentment has been Sec. 153. Protest; how made. - The protest Sec. 157. Protest both for non-acceptance accept the bill supra protest for the honor
irregular, acceptance has been refused on must be annexed to the bill or must contain and non-payment. - A bill which has been of any party liable thereon or for the honor
some other ground. a copy thereof, and must be under the hand protested for non-acceptance may be of the person for whose account the bill is
Sec. 149. When dishonored by and seal of the notary making it and must subsequently protested for non-payment. drawn. The acceptance for honor may be
nonacceptance. - A bill is dishonored by non- specify:chanroblesvirtuallawlibrary for part only of the sum for which the bill is
acceptance:chanroblesvirtuallawlibrary (a) The time and place of presentment; Sec. 158. Protest before maturity where drawn; and where there has been an
(a) When it is duly presented for acceptance acceptor insolvent. - Where the acceptor acceptance for honor for one party, there
and such an acceptance as is prescribed by (b) The fact that presentment was made and has been adjudged a bankrupt or an may be a further acceptance by a different
this Act is refused or can not be obtained; or the manner thereof; insolvent or has made an assignment for person for the honor of another party.
the benefit of creditors before the bill
(b) When presentment for acceptance is (c) The cause or reason for protesting the matures, the holder may cause the bill to Sec. 162. Acceptance for honor; how
excused and the bill is not accepted. bill; be protested for better security against the made. - An acceptance for honor supra
Sec. 150. Duty of holder where bill not drawer and indorsers. robles virtual law protest must be in writing and indicate that
accepted. - Where a bill is duly presented for (d) The demand made and the answer given, library it is an acceptance for honor and must be
acceptance and is not accepted within the if any, or the fact that the drawee or signed by the acceptor for
prescribed time, the person presenting it must acceptor could not be found. Sec. 159. When protest dispensed with. - honor. chanrobles law
treat the bill as dishonored by nonacceptance Sec. 154. Protest, by whom made. - Protest Protest is dispensed with by any
or he loses the right of recourse against the may be made by:chanroblesvirtuallawlibrary circumstances which would dispense with Sec. 163. When deemed to be an
drawer and indorsers. (a) A notary public; or notice of dishonor. Delay in noting or acceptance for honor of the drawer. -
protesting is excused when delay is caused Where an acceptance for honor does not
Sec. 151. Rights of holder where bill not (b) By any respectable resident of the place by circumstances beyond the control of expressly state for whose honor it is made,
accepted. - When a bill is dishonored by where the bill is dishonored, in the presence the holder and not imputable to his it is deemed to be an acceptance for the
nonacceptance, an immediate right of of two or more credible witnesses. default, misconduct, or negligence. When honor of the drawer.
recourse against the drawer and indorsers Sec. 155. Protest; when to be made. - When the cause of delay ceases to operate, the
accrues to the holder and no presentment for a bill is protested, such protest must be bill must be noted or protested with Sec. 164. Liability of the acceptor for honor.
payment is necessary. made on the day of its dishonor unless delay reasonable diligence. - The acceptor for honor is liable to the
is excused as herein provided. When a bill holder and to all parties to the bill
XII. PROTEST has been duly noted, the protest may be Sec. 160. Protest where bill is lost and so subsequent to the party for whose honor
subsequently extended as of the date of the forth. - When a bill is lost or destroyed or is he has accepted.
Sec. 152. In what cases protest necessary. - noting. wrongly detained from the person entitled
Where a foreign bill appearing on its face to be to hold it, protest may be made on a copy Sec. 165. Agreement of acceptor for
such is dishonored by nonacceptance, it must Sec. 156. Protest; where made. - A bill must or written particulars thereof. honor. - The acceptor for honor, by such
be duly protested for nonacceptance, by be protested at the place where it is acceptance, engages that he will, on due
nonacceptance is dishonored and where such dishonored, except that when a bill drawn XIII. ACCEPTANCE FOR HONOR presentment, pay the bill according to the
a bill which has not previously been payable at the place of business or residence terms of his acceptance provided it shall
dishonored by nonpayment, it must be duly of some person other than the drawee has Sec. 161. When bill may be accepted for not have been paid by the drawee and
protested for nonpayment. If it is not so been dishonored by nonacceptance, it must honor. - When a bill of exchange has been provided also that is shall have been duly
protested, the drawer and indorsers are be protested for non-payment at the place protested for dishonor by non-acceptance presented for payment and protested for
discharged. Where a bill does not appear on where it is expressed to be payable, and no or protested for better security and is not non-payment and notice of dishonor given
to him. a bill refuses to receive only. If the drawee accepts more than one
Sec. 171. Who may make payment for payment supra protest, he loses his right part and such accepted parts negotiated to
Sec. 166. Maturity of bill payable after sight; honor. - Where a bill has been protested for of recourse against any party who would different holders in due course, he is liable
accepted for honor. - Where a bill payable non-payment, any person may intervene and have been discharged by such payment. on every such part as if it were a separate
after sight is accepted for honor, its maturity is pay it supraprotest for the honor of any bill.
calculated from the date of the noting for non- person liable thereon or for the honor of the Sec. 177. Rights of payer for honor. - The
acceptance and not from the date of the person for whose account it was drawn. payer for honor, on paying to the holder Sec. 182. Payment by acceptor of bills
acceptance for honor. the amount of the bill and the notarial drawn in sets. - When the acceptor of a bill
Sec. 172. Payment for honor; how made. - expenses incidental to its dishonor, is drawn in a set pays it without requiring the
Sec. 167. Protest of bill accepted for honor, The payment for honor supra protest, in entitled to receive both the bill itself and part bearing his acceptance to be delivered
and so forth. - Where a dishonored bill has order to operate as such and not as a mere the protest. up to him, and the part at maturity is
been accepted for honor supra protest or voluntary payment, must be attested by a outstanding in the hands of a holder in due
contains a referee in case of need, it must be notarial act of honor which may be XV. BILLS IN SET course, he is liable to the holder thereon.
protested for non-payment before it is appended to the protest or form an
presented for payment to the acceptor for extension to it. Sec. 178. Bills in set constitute one bill. - Sec. 183. Effect of discharging one of a
honor or referee in case of need. Where a bill is drawn in a set, each part of set. - Except as herein otherwise provided,
Sec. 173. Declaration before payment for the set being numbered and containing a where any one part of a bill drawn in a set
Sec. 168. Presentment for payment to honor. - The notarial act of honor must be reference to the other parts, the whole of is discharged by payment or otherwise, the
acceptor for honor, how made. - Presentment founded on a declaration made by the payer the parts constitutes one bill. whole bill is discharged.
for payment to the acceptor for honor must be for honor or by his agent in that behalf
made as follows:chanroblesvirtuallawlibrary declaring his intention to pay the bill for Sec. 179. Right of holders where different XVI. PROMISSORY NOTES AND CHECKS
(a) If it is to be presented in the place where honor and for whose honor he pays. parts are negotiated. - Where two or more
the protest for non-payment was made, it parts of a set are negotiated to different Sec. 184. Promissory note, defined. - A
must be presented not later than the day Sec. 174. Preference of parties offering to holders in due course, the holder whose negotiable promissory note within the
following its maturity. pay for honor. - Where two or more persons title first accrues is, as between such meaning of this Act is an unconditional
offer to pay a bill for the honor of different holders, the true owner of the bill. But promise in writing made by one person to
(b) If it is to be presented in some other place parties, the person whose payment will nothing in this section affects the right of a another, signed by the maker, engaging to
than the place where it was protested, then it discharge most parties to the bill is to be person who, in due course, accepts or pays pay on demand, or at a fixed or
must be forwarded within the time specified given the preference. the parts first presented to him. determinable future time, a sum certain in
in Section one hundred and four. money to order or to bearer. Where a note
Sec. 169. When delay in making presentment Sec. 175. Effect on subsequent parties where Sec. 180. Liability of holder who indorses is drawn to the maker's own order, it is not
is excused. - The provisions of Section eighty- bill is paid for honor. - Where a bill has been two or more parts of a set to different complete until indorsed by him.
one apply where there is delay in making paid for honor, all parties subsequent to the persons. - Where the holder of a set
presentment to the acceptor for honor or party for whose honor it is paid are indorses two or more parts to different Sec. 185. Check, defined. - A check is a bill
referee in case of need. discharged but the payer for honor is persons he is liable on every such part, and of exchange drawn on a bank payable on
subrogated for, and succeeds to, both the every indorser subsequent to him is liable demand. Except as herein otherwise
Sec. 170. Dishonor of bill by acceptor for rights and duties of the holder as regards the on the part he has himself indorsed, as if provided, the provisions of this Act
honor. - When the bill is dishonored by the party for whose honor he pays and all such parts were separate bills. applicable to a bill of exchange payable on
acceptor for honor, it must be protested for parties liable to the latter. demand apply to a check.
non-payment by him. Sec. 181. Acceptance of bill drawn in sets. -
Sec. 176. Where holder refuses to receive The acceptance may be written on any Sec. 186. Within what time a check must
XIV. PAYMENT FOR HONOR payment supra protest. -Where the holder of part and it must be written on one part be presented. - A check must be presented
for payment within a reasonable time after its trade or business with respect to such
issue or the drawer will be discharged from "Bearer" means the person in possession of instruments, and the facts of the particular
liability thereon to the extent of the loss a bill or note which is payable to bearer; case.
caused by the delay.
"Bill" means bill of exchange, and "note" Sec. 194. Time, how computed; when last
Sec. 187. Certification of check; effect of. - means negotiable promissory note; day falls on holiday. - Where the day, or
Where a check is certified by the bank on the last day for doing any act herein
which it is drawn, the certification is "Delivery" means transfer of possession, required or permitted to be done falls on a
equivalent to an acceptance. actual or constructive, from one person to Sunday or on a holiday, the act may be
another; done on the next succeeding secular or
Sec. 188. Effect where the holder of check business day.
procures it to be certified. -Where the holder "Holder" means the payee or indorsee of a
of a check procures it to be accepted or bill or note who is in possession of it, or the Sec. 195. Application of Act. - The
certified, the drawer and all indorsers are bearer thereof; provisions of this Act do not apply to
discharged from liability thereon. negotiable instruments made and
"Indorsement" means an indorsement delivered prior to the taking effect
completed by delivery; hereof. chanrobles law

Sec. 189. When check operates as an "Instrument" means negotiable instrument; Sec. 196. Cases not provided for in Act.
assignment. - A check of itself does not - Any case not provided for in this Act shall
operate as an assignment of any part of the "Issue" means the first delivery of the be governed by the provisions of existing
funds to the credit of the drawer with the instrument, complete in form, to a person legislation or in default thereof, by the
bank, and the bank is not liable to the holder who takes it as a holder; rules of the law merchant.
unless and until it accepts or certifies the
check. "Person" includes a body of persons, Sec. 197. Repeals. - All acts and laws and
whether incorporated or not; parts thereof inconsistent with this Act are
XVII. GENERAL PROVISIONS hereby repealed.
"Value" means valuable consideration;
Sec. 190. Short title. - This Act shall be known Sec. 198. Time when Act takes effect. - This
as the Negotiable Instruments Law. "Written" includes printed, Act shall take effect ninety days after its
and "writing" includes print. publication in the Official Gazette of the
Sec. 191. Definition and meaning of terms. - In Sec. 192. Persons primarily liable on Philippine Islands shall have been
this Act, unless the contract otherwise instrument. - The person "primarily" liable completed.
requires:chanroblesvirtuallawlibrary on an instrument is the person who, by the
"Acceptance" means an acceptance terms of the instrument, is absolutely Enacted: February 3, 1911
completed by delivery or notification; required to pay the same. All other parties
are "secondarily" liable.
"Action" includes counterclaim and set-off;
Sec. 193. Reasonable time, what
"Bank" includes any person or association of constitutes. - In determining what is
persons carrying on the business of banking, a "reasonable time" regard is to be had to
whether incorporated or not; the nature of the instrument, the usage of