BILLS OF

NEGOTIABLE INSTRUMENTS LAW EXCHANGE

(SEC. 127, NIL)

A bill of itself does not operate as an assignment of

the funds in the hands of the drawee available for the
payment thereof, and the drawee is not liable on the
bill unless and until he accepts the same.

(SEC. 128, NIL)

A bill may be addressed to two or more drawees

jointly, whether they are partners or not; but not to
BILL OF EXCHANGE two or more drawees in the alternative or in
succession.

an unconditional order in (SEC. 129, NIL)

writing addressed by one
person to another,
An inland bill of exchange is a bill which is, or on its
signed by the person
face purports to be, both drawn and payable within
giving it, requiring the
the Philippines. Any other bill is a foreign bill. Unless
person to whom it is
the contrary appears on the face of the bill, the
addressed to pay on
holder may treat it as an inland bill.
demand or at a fixed or
determinable future time
a sum certain in money (SEC. 130, NIL)
to order or to bearer.
(SEC. 126, NIL) Where in a bill the drawer and drawee are the same
person or where the drawee is a fictitious person or
a person not having capacity to contract, the holder
may treat the instrument at his option either as a
bill of exchange or as a promissory note.

(SEC. 131, NIL)

The drawer of a bill and any indorser may insert

thereon the name of a person to whom the holder
may resort in case of need; that is to say, in case the
bill is dishonored by non-acceptance or non-
payment. Such person is called a referee in case of
need. It is in the option of the holder to resort to the
referee in case of need or not as he may see fit.
 BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE

ACCEPTANCE
The acceptance of a bill is the signification by the drawee of
his assent to the order of the drawer. The acceptance must
be in writing and signed by the drawee.
(SEC. 132, NIL)
The holder of a bill presenting the same for acceptance may
(SEC. 133, NIL) require that the acceptance be written on the bill, and, if
such request is refused, may treat the bill as dishonored.
(SEC. 134, NIL)
Where an acceptance is written on a paper other than the bill
(SEC. 135, NIL) itself, it does not bind the acceptor except in favor of a
person to whom it is shown and who, on the faith thereof,
(SEC. 136, NIL) receives the bill for value.

An unconditional promise in writing to accept a bill before it is

(SEC. 137, NIL) drawn is deemed an actual acceptance in favor of every
person who, upon the faith thereof, receives the bill for value.
(SEC. 138, NIL)

The drawee is allowed twenty-four hours after presentment

(SEC. 139, NIL) in which to decide whether or not he will accept the bill; the
acceptance, if given, dates as of the day of presentation.
(SEC. 142, NIL)
Where a drawee to whom a bill is delivered for acceptance
destroys the same, or refuses within twenty-four hours after
such delivery or within such other period as the holder may
KINDS. An acceptance is either general allow, to return the bill accepted or non-accepted to the
or qualified. A general acceptance holder, he will be deemed to have accepted the same
assents without qualification to the
orderFdghjrtjktkshetjryktklyul
of the drawer. A qualified
A bill may be accepted before it has been signed by the
acceptance in express terms varies the
drawer, or while otherwise incomplete, or when it is overdue,
effect of the bill as drawn.
or after it has been dishonored by a previous refusal to accept,
or by non payment
The holder may refuse to take a qualified
acceptance and if he does not obtain an
unqualified acceptance, he may treat the An acceptance is qualified which is:(a) Conditional; that is
bill as dishonored by non-acceptance. to say, which makes payment by the acceptor dependent
on the fulfillment of a condition therein stated;(b) Partial;
that is to say, an acceptance to pay part only of the
An acceptance to pay at a particular
amount for which the bill is drawn;(c) Local; that is to say,
place is a general acceptance unless it
an acceptance to pay only at a particular place;(d)
expressly states that the bill is to be
Qualified as to time;(e) The acceptance of some, one or
paid there only and not elsewhere.
more of the drawees but not of all. (SEC. 141, NIL)
(SEC. 140, NIL)
 BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE

Except as herein otherwise provided, the holder of a bill which is required

PRESENTMENT FOR
by the next preceding section to be presented for acceptance must either
present it for acceptance or negotiate it within a reasonable time. If he fails
ACCEPTANCE
to do so, the drawer and all indorsers are discharged. (SEC. 144, NIL)

A bill may be presented for acceptance on any day on which negotiable instruments
may be presented for payment under the provisions of Sections seventy-two and
eighty-five of this Act. When Saturday is not otherwise a holiday, presentment for
acceptance may be made before twelve o'clock noon on that day. (SEC. 146, NIL)

Where the holder of a bill drawn payable elsewhere than at the place of business or the
residence of the drawee has no time, with the exercise of reasonable diligence, to
present the bill for acceptance before presenting it for payment on the day that it falls
due, the delay caused by presenting the bill for acceptance before presenting it for
payment is excused and does not discharge the drawers and indorsers. (SEC. 147, NIL)

Where a bill is duly presented for acceptance and is not accepted within the prescribed time, the
person presenting it must treat the bill as dishonored by nonacceptance or he loses the right of
recourse against the drawer and indorsers. (SEC. 150, NIL)

When a bill is dishonored by no acceptance, an

immediate right of recourse against the drawer PRESENTMENT; HOW
WHEN MUST BE MADE (SEC. 145, NIL)
and indorsers accrues to the holder and no
MADE (SEC. 143, NIL)
presentment for payment is necessary. (SEC. 151,
NIL) (a) Where a bill is
(a) Where the bill is addressed to two or more
WHERE PRESENTMENT IS payable after sight, or in drawees who are not
EXCUSED (SEC. 148, NIL) any other case, where partners, presentment
presentment for must be made to them all
(a) Where the drawee acceptance is necessary unless one has authority to
is dead, or has in order to fix the accept or refuse
absconded, or is a WHEN DISHONORED BY maturity of the acceptance for all, in which
fictitious person or a NONACCEPTANCE (SEC. instrument; or case presentment may be
person not having (b) Where the bill made to him only;
149, NIL)
capacity to contract expressly stipulates that (b) Where the drawee is
by bill. it shall be presented for dead, presentment may be
(a) When it is duly acceptance; or
(b) Where, after the made to his personal
presented for (c) Where the bill is
exercise of reasonable representative;
acceptance and such an drawn payable elsewhere
diligence, (c) Where the drawee has
acceptance as is than at the residence or
presentment cannot been adjudged a bankrupt
prescribed by this Act is place of business of the
be made. or an insolvent or has
refused or cannot be drawee.In no other case
(c) Where, although made an assignment for
obtained; or is presentment for
presentment has been the benefit of creditors,
(b) When presentment acceptance necessary in
irregular, acceptance presentment may be made
for acceptance is order to render any party
has been refused on to him or to his trustee or
excused and the bill is to the bill liable.
some other ground. assignee.
not accepted.

PROTEST
Cases Necessary (SEC. 152, NIL)
How Made (SEC. 153, NIL)
By Whom Made (SEC. 154, NIL)
When to Be Made (SEC. 155, NIL)
Where Made (SEC. 156, NIL)
Both for non-acceptance and
non-payment (SEC. 157, NIL)
Before Maturity where Acceptor
Insolvent 9SEC. 158, NIL)
When Protest Dispense With
(SEC. 159, NIL)
Where Bill is Lost (SEC. 160, NIL)
BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE
Where a foreign bill appearing on its face to be such is
dishonored by non acceptance, it must be duly protested for
non acceptance, by non acceptance is dishonored and where
such a bill which has not previously been dishonored by
nonpayment, it must be duly protested for nonpayment.
(a) The time and place of presentment;
(b) The fact that presentment was made and the manner thereof;
(c) The cause or reason for protesting the
(d) The demand made and the answer given, if any, or the
fact that the drawee or acceptor could not be found.
(a) A notary public;
(b) By any respectable resident of the place where the bill is
dishonored, in the presence of two or more credible witnesses.
When a bill is protested, such protest must be made on
the day of its dishonor unless delay is excused as herein
provided
A bill must be protested at the place where it is
dishonored, except that when a bill drawn payable at the
place of business or residence of some person other than
the drawee has been dishonored by no acceptance.
A bill which has been protested for non-acceptance may
be subsequently protested for non-payment.
Where the acceptor has been adjudged a bankrupt or
an insolvent or has made an assignment for the benefit
of creditors before the bill matures, the holder may
cause the bill to be protested for better security against
the drawer and indorsers.
Protest is dispensed with by any circumstances
which would dispense with notice of dishonor.
When a bill is lost or destroyed or is wrongly detained
from the person entitled to hold it, protest may be
made on a copy or written particulars thereof.

ACCEPTANCE FOR HONOR
When a bill of exchange has been
protested for dishonor by non-
acceptance or protested for better
security and is not overdue, any person
not being a party already liable thereon
may, with the consent of the 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.
Where an acceptance for honor does not
expressly state for whose honor it is
made, it is deemed to be an acceptance
for the honor of the drawer.
The acceptor for honor, by such
acceptance, engages that he will, on
due presentment, pay the bill according
to the terms of his acceptance provided
it shall not have been paid by the
drawee and provided also that is shall
have been duly presented for payment
and protested for non-payment and
notice of dishonor given to him.
Where a dishonored bill has been
accepted for honor supra protest or
contains a referee in case of need, it
must be protested for non-payment
before it is presented for payment to
the acceptor for honor or referee in
case of need.
The provisions of Section eighty-one
apply where there is delay in making
presentment to the acceptor for honor
or referee in case of need.
BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE
WHEN (SEC. 161, NIL) An acceptance for honor supra
protest must be in writing and
indicate that it is an acceptance
for honor and must be signed by
HOW MADE
the acceptor for honor.
(SEC. 162, NIL)
The acceptor for honor is liable to
WHEN DEEMED
the holder and to all parties to the
(SEC. 163, NIL)
bill subsequent to the party for
whose honor he has accepted.
LIABILITY
(SEC. 164, NIL) Where a bill payable after sight is
accepted for honor, its maturity is
calculated from the date of the
AGREEMENT noting for non-acceptance and not
(SEC. 165, NIL) from the date of the acceptance
(a) If it is to be presented in the
place where the protest for non-
MATURITY OF BILL payment was made, it must be
PAYABLE AFTER presented not later than the day
SIGHT (SEC. 166, NIL) following its maturity.
PROTEST OF BILL (b) If it is to be presented in
(SEC. 167, NIL) some other place than the place
where it was protested, then it
PRESENTMENT must be forwarded within the
FOR PAYMENT; time specified in Section one
HOW MADE hundred and four.
(SEC. 168, NIL)
When the bill is dishonored by
WHEN DELAY
the acceptor for honor, it must
(SEC. 169, NIL)
be protested for non-payment
by him.
DISHONOR OF BILL
(SEC. 170, NIL)
 BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE

The payments for honor

supra protest, in order
Where a bill has been to operate as such and
protested for non- not as a mere voluntary The notarial act of
payment, any person payment, must be honor must be founded
may intervene and pay attested by a notarial on a declaration made
it supra protest for the act of honor which may by the payer for honor
honor of any person be appended to the or by his agent in that
liable thereon or for the protest or form an behalf declaring his
honor of the person for extension to it. intention to pay the bill
whose account it was for honor and for
drawn. whose honor he pays.

(SEC. 172, NIL)

(SEC. 171, NIL)

(SEC. 173, NIL)

PAYMENT FOR
HONOR

(SEC. 177, NIL)

(SEC. 174, NIL)

(SEC. 176, NIL) (SEC. 175, NIL)

Where a bill has been

The payer for honor, on Where two or more
paid for honor, all parties
paying to the holder the persons offer to pay a
subsequent to the party
amount of the bill and bill for the honor of
Where the holder of a for whose honor it is paid
the notarial expenses different parties, the
bill refuses to receive are discharged but the
incidental to its person whose payment
payment supra protest, payer for honor is
dishonor, is entitled to will discharge most
he loses his right of subrogated for, and
receive both the bill parties to the bill is to
recourse against any succeeds to, both the
itself and the protest. be given the
party who would have rights and duties of the
preference.
been discharged by holder as regards the
such payment. party for whose honor he
pays and all parties liable
to the latter.
 BILLS OF
NEGOTIABLE INSTRUMENTS LAW EXCHANGE

Where two or more parts of

a set are negotiated to Where the holder of a set
different holders in due indorses two or more parts
Where a bill is drawn in a set,
course, the holder whose to different persons he is
each part of the set being
title first accrues is, as liable on every such part, and
numbered and containing a
between such holders, the every indorser subsequent to
reference to the other parts,
true owner of the bill. him is liable on the part he
the whole of the parts
constitutes one bill. has himself indorsed, as if
such parts were separate
bills.

(SEC. 179, NIL)

SEC. 178, NIL) BILLS IN SET (SEC. 180, NIL)

(SEC. 183, NIL) (SEC. 181, NIL)

(SEC. 182, NIL)

The acceptance may be
Except as herein otherwise
written on any part and it
provided, where any one part
When the acceptor of a bill must be written on one part
of a bill drawn in a set is
drawn in a set pays it without only. If the drawee accepts
discharged by payment or
requiring the part bearing his more than one part and such
otherwise, the whole bill is
acceptance to be delivered accepted parts negotiated to
discharged.
up to him, and the part at different holders in due
maturity is outstanding in the course, he is liable on every
hands of a holder in due such part as if it were a
course, he is liable to the separate bill.
holder thereon.