NEGOTIABLE INSTRUMENTS - SECTIONS 89-118

Section 89 talks about a negotiable instrument that are dishonored for non-payment of
promissory note or bill of exchange and non-acceptance of bill of exchange only. Each indorser or drawer
must be notified for the purpose of being aware that the primary liable parties failed for payment and it
will become a sign for them to be obliged for payment. In case that the dishonored note does not notify
any parties involved then they are released from the obligation to the instrument. Additionally, if the
notice letter will be given by a public official or authority person then it is called protest that will be
further explain on other sections.

Section 90 said that the dishonored instrument can be given by either the holder himself or
another person that will represents him. It can also be given to any party who can demand for payment to
those parties who are liable to them and in effect, it will further notify other parties involved as long as
they can receive payment. For example I am the holder of the instrument which has been dishonored; I
can notify Juan, my indorser on my own or someone on behalf of me and I can demand payment to him
where he can further notify other parties involved before it was passed to him.

Section 91 talks about any person who will act as an agent that will represent the holder or any
party. Unlike in Section 20 where agent must be authorized, here the agent is not required to be
authorized and such acting agent of the principal can either use his own name or the principal name
when giving the notice for dishonored instrument. This notice given by the agent to the parties will give
benefit to the principal because he can demand payment to the parties involved or notified.

Section 92 talks about the holder who will give the notice to the parties or by person who will
represent the holder that will give benefits to the holder himself and other parties who can demand
payment to those who are liable to them. For example, I am the holder and the instrument has been
dishonored. Now I can give notice to other party which is A, my indorser whom I can also demand for
payment. In effect, A can also give notice to other involved parties like B, his indorser, which also give
him the benefit to notify those who are also liable and will give advantages to these parties who can
demand payment to those who are liable to them. Where, B cannot demand payment to A because he is
the one who is liable to A and same goes to A and me as a holder.

Section 93 is connected to the previous section but here, the focus is on the party who receive the
notice from the holder who will also give notice to previous parties involved. The notice can be given to
the party itself or represents him, the act of notifying other parties will give advantages to the holder
himself because he can ensure much possible payment to him from these previous parties and not only to
his indorser. If that party wasn’t able to notify other parties involved then these parties are released and
he will be the one to be obliged to give payment to the holder.

Section 94 talks about the instrument held by an agent which has been dishonored then this
acting agent can directly notify the parties involved or to his principal. If he will directly give the notice to
his principal then it is as if that he is acting as the holder of the dishonored instrument. The day that the
instrument was dishonored which was held by agent is the day of dishonor for him but upon giving it to
the principal or directly to the parties then the day where the agent will give to them is the day, the
instrument dishonored for them.

Section 95 said that if the written notice for a particular party are not capable to show its real
purpose to notify for dishonored instrument then it can be supported by verbal information and any
written information in the notice who can lead for misinterpretation does not make the notice void unless
the parties who give notice really have the objective to mislead the notice.

Section 96 explains the form of notice which can either be in written or oral as long as the words
said or written are clear to give notice for the instrument to the liable or involved parties that the
instrument has been dishonored, even without being signed by the person who will give the notice.

In Section 97 if there is an acting agent representing the principal or party to whom the notice will
be given then he must be authorized or likely to follow the requisites in Section 20 to free himself from
possible liability by the receipt of notice to be given.

Section 98 talks about giving notice to a party who is dead in accordance with the knowledge of
the party who will be giving the notice. With that knowledge that the party is dead, he can pursue to
know some possible representatives that will took the responsibility of the dead party. He must also
prove that the person he searched can be found and if there’s no one to represent the dead party then he
can give notice to the place where the dead party lives or possible business location like in
establishments, physical store, and more.

Section 99 where in the form of business which is the partnership, when the parties to be given
the notice are partners (two, three, or more persons involve) any one of them who will receive the notice
will represent that the notice is also received by the whole partnership or business even if the partnership
will be dissolve.

In Section 100 the persons who will receive the notice of dishonored instrument are jointly liable
then the party giving the notice will give it to each of them because when we say jointly they are
independent, more likely not connected to each other and have their own specific obligation in the
instrument. This section is not connected to Section 86 where if there is a liability to jointly persons then
they are solidary liable to it as a whole like being dependent from each other.

Section 101 talks about to whom notice will be the given when the party itself is, first does not
have enough funds to give if ever the holder will demand payment to him and second if the party to be
given the notice assigned the instrument to her assignee who have his right as her assignor. The party can
either send it to the party themselves or to their trustee or assignee who can also receive the notice.
 Section 102 simply states that once the instrument has been dishonored then notice may be given
to the parties on that time when the instrument dishonored in the hands of the holder unless if the notice
has been postponed but it is accepted for its reasonable defend for the postponement that happened.

Section 103 talks about the time where the notice of dishonored instrument must be delivered. If
the party who will give the notice lives in the same location to the other party that he will give the notice
then if those parties have a business from 9 AM to 5 PM then he must give it during these hours before
the business will close on that day. If it will be delivered to the place where he lives then it should be
during the hours where a person usually rest. Lastly, if the letter of notice will be send through mail in a
post-office in the time where that party who will be receiving can get it on their own post-office during
usual hours for the day.

Section 104 is connected to previous section, here parties lives in different location. The party
who will give the notice letter to the other party can either send it through mail like in the previous
section but it must not be mailed later than the day after the instrument has been dishonored. For
example, A, the holder, the instrument was dishonored on November 9, she can mail it on that day or on
November 10 only. If the office is not available on that day then it must be mailed to the day and time of
the availability of the office. Lastly, if the party wasn’t able to mail the notice letter then he can make
other possible ways as long as that party will receive the notice on the fixed date. Like in the example of
A, she must make other ways to give the notice on November 10 and he really wasn’t able to deliver it
then the party to be given will be released.

Section 105 talks about the party who will mail the notice letter on the given date and time where
he may consider that he clearly mail the letter and it will not be discharged even if the letter is not on the
hands of the party receiving it but it is ready to be mailed to that party on the post-office. If the letter of
notice have proper information of the location of the party to whom the letter will be send and the letter
has been mailed in the post-office on the given date then he correctly give the notice to that party.

Section 106 simply states about mailing the notice letter in any way or place where it is still
connected to the post-office. The notice letter can be mailed in the post-office itself, any establishment in
different location that is still connected to the post-office, and any letter box which is also in connection to
the post-office.

Section 107 talks about the time when the instrument is dishonored in the holder. If the holder
gives the notice to the party then the time when the party will receive the notice in her hand is the time
that the instrument is dishonored and not when the time that the holder have the dishonored instrument
in his hands same goes to the other parties that will be further given the notice but if they live in different
places then the time to give the notice must use the time or requisites provided in Section 104. For
example, H, the holder, instrument was dishonored on November 09 and H must give the notice to the
parties in that day or next day only. When he gave the notice to C on November 10 then it will be the time
that the instrument is dishonored for C and not on November 9. Then C can notify previous parties
involved in that day or next day only.

The Section 108 explains the places where notice of dishonored instrument must be delivered. If
the party has written his address to his signature then the notice must be sent to that place even if that
address is not his real place but when there is an absence of place of the party in the instrument then it
must be sent to such following requirements. First to either post-office nearest to the location where he
lived or any post-office where he can possibly get the notice letter, second if he lives in permanent place
or has any location where his business is established then notice can be sent to either places, and lastly if
he is a temporary resident in another place then it can be sent there.

Section 109 simply states about waiving the notice of dishonor. When we say waiver, it talks
about agreement excluding a certain activity in the obligation. Waiver can be put in the instrument in
writing or through verbal communication like putting the words (notice of dishonor waived) where
should be seen on the top of the signature of an indorser and can be made before the time to give notice
or after removing the due notice or not mailing the notice of letter on time.

Section 110 talks about the presence of the waiver in the instrument. If the waiver is presented in
the face of the instrument then is assumed to be applicable to all the parties involved in the instrument
starting to the maker up to the indorser of the holder of the instrument but if the waiver is under the
name or signature of the indorser then the waiver is only applicable to him.

Section 111 simply states that the waiver of protest in some negotiable instruments such as
foreign bill of exchange also waive the notice of dishonor or presenting to demand of payment to primary
parties liable. When we say protest it is like to be a formal statement done by a public official in proving
for non-payment so does excluding secondary liable parties who can be involved for non-payment of
primary one’s.

Section 112 talks about the notice of dishonor will be ineffective if the party who will give the
notice won’t give it to the other party who should receive it even if through reasonable diligence (care
and attention) or mere searching to the place of the receiver, he still doesn’t deliver it then in effect the
notice of dishonor will be ineffective.

Section 113 simply states if there is a postponement in notifying parties for the dishonored
instrument it is said that the cause of postponement is defended or forgiven if it the holder is not
responsible to that postponement. For example, fortuitous events like rainstorms, earthquake, and other
events. If the cause of postponement has ended then the notice must be delivered with care or properly
planned to avoid harm in giving the notice or further delay again.

Section 114 talks about the different cases when it is not necessary to notify the drawer for notice
of dishonored instrument. First in accordance with Section 130 where the bill of exchange can be viewed
as a promissory note by the drawer who is also the drawee because when these parties are the same
person then it is like he is commanding himself to pay. Second it the drawer is a fake person who doesn’t
really exist then there is no one to receive the notice. Third if the drawer is the first person to whom the
holder demanded for payment then there is no sense to give notice of dishonor to him. Fourth is just a
common sense where if the drawer knows that he doesn’t have enough funds to the drawee then it is not
required to give notice of dishonor to him. Lastly, if the drawer commands the drawee to stop for
payment then it is expected that he have the knowledge that the instrument will be dishonored

Section 115 is similar to the previous section but it talks about the indorser on when it is not
necessary to give him the notice of dishonor. Simply if the indorser is not a real person where he cannot
be found or take his obligation to the instrument and if he already knew that there will be a dishonor of
instrument to happen. Another one is that he is the person who the holder demanded for payment so
notice of dishonor won’t be needed. Lastly, it talks about the indorser on being the accommodated party
in where he is really a debtor on the accommodation party so he is not liable, the accommodation party is
the one liable to pay him and so not needed to have a notice of dishonor.

Section 116 talks about the refusal to accept the bill of exchange then notice for non-payment
won’t be necessary to the parties involved because the drawee to refuse to accept it, he can further notify
the parties where he is liable and so on. For example, I have drawn a bill of exchange on A who indorse it
to B then to C, D, and E, the holder. If E present the bill to A for acceptance and she refuse to accept it
then it won’t be necessary for E to give notice for non-payment because in the first place it has been
refused and A can notify B, C, and D about the refusal. Also, if A gives back her decision to refuse and
accept it now but when E will demand for payment A refuse to pay. In effect, E needs to give notice of
dishonor to D or other parties involved.

Section 117 simply explains when the old holder who got a refusal for non-payment by the
drawee failed to notify the drawer for notice then the drawer will be discharged for the lack of notice. If
he, the old holder, has indorse it to a new holder in due course, the drawer who has been discharged
wont’ be effectual to be discharged because the new holder, if has been refuse for acceptance can give
notice to the drawer and old holder which are ought to be secondarily liable.

Section 118 clearly states about when protest must be created and not necessary to create. If the
instrument is in the form of foreign negotiable instrument like if the bill is created in the Philippines and
payable to country other than the Philippines. It is necessary to create a protest for non-payment or non-
acceptance because it will give a greater fact that will evidence for these actions and if it will not be done
in protest then the parties involved will be discharged. It is not necessary to other negotiable instruments
which are ordinary to us like promissory note, bill of exchange, and others but it builds greater proof or
evidence for the non-payment or non-acceptance to the holder if protest will be created.