THE NEGOTIABLE INSTRUMENTS LAW

I. FORM AND INTERPRETATION

SectIon 1. Form o] nego11ob1e 1ns1rumen1s. - An Instrument to be
negotIabIe must conIorm to tbe IoIIowIng requIrements:
a) It must be In wrItIng and sIgned by tbe maker or drawer;

b) Must contaIn an uncondItIonaI promIse or order to pay a sum
certaIn In money;

c) Must be payabIe on demand, or at a IIxed or determInabIe Iuture
tIme;
d) Must be payabIe to order or to bearer; and

e) Wbere tbe Instrument Is addressed to a drawee, be must be
named or otberwIse IndIcated tbereIn wItb reasonabIe certaInty.
Sec. 2. o1 oons111u1es oer1o1n1g os 1o sum. - Tbe sum payabIe Is a sum
certaIn wItbIn tbe meanIng oI tbIs Act, aItbougb It Is to be paId:
a) wItb Interest; or

b) by stated InstaIIments; or

c) by stated InstaIIments, wItb a provIsIon tbat, upon deIauIt In
payment oI any InstaIIment or oI Interest, tbe wboIe sbaII become
due; or

d) wItb excbange, wbetber at a IIxed rate or at tbe current rate; or

e) wItb costs oI coIIectIon or an attorney's Iee, In case payment
sbaII not be made at maturIty.
Sec. 3. en prom1se 1s unoond111ono1. - An unquaIIIIed order or promIse
to pay Is uncondItIonaI wItbIn tbe meanIng oI tbIs Act tbougb coupIed
wItb:
a) An IndIcatIon oI a partIcuIar Iund out oI wbIcb reImbursement Is
to be made or a partIcuIar account to be debIted wItb tbe amount; or

b) A statement oI tbe transactIon wbIcb gIves rIse to tbe
Instrument.
But an order or promIse to pay out oI a partIcuIar Iund Is not
uncondItIonaI.cban robIes vIrtuaI Iaw IIbrary

Sec. 4. De1erm1nob1e ]u1ure 11me; uo1 oons111u1es. - An Instrument Is
payabIe at a determInabIe Iuture tIme, wItbIn tbe meanIng oI tbIs Act,
wbIcb Is expressed to be payabIe:
a) At a IIxed perIod aIter date or sIgbt; or

b) On or beIore a IIxed or determInabIe Iuture tIme specIIIed
tbereIn; or

c) On or at a IIxed perIod aIter tbe occurrence oI a specIIIed event
wbIcb Is certaIn to bappen, tbougb tbe tIme oI bappenIng be
uncertaIn.
An Instrument payabIe upon a contIngency Is not negotIabIe, and tbe
bappenIng oI tbe event does not cure tbe deIect.

Sec. S. Add111ono1 prov1s1ons no1 o]]eo11ng nego11ob1111g. - An Instrument
wbIcb contaIns an order or promIse to do any act In addItIon to tbe
payment oI money Is not negotIabIe. But tbe negotIabIe cbaracter oI an
Instrument otberwIse negotIabIe Is not aIIected by a provIsIon wbIcb:
a) autborIzes tbe saIe oI coIIateraI securItIes In case tbe Instrument
be not paId at maturIty; or

b) autborIzes a conIessIon oI judgment II tbe Instrument be not paId
at maturIty; or

c) waIves tbe beneIIt oI any Iaw Intended Ior tbe advantage or
protectIon oI tbe obIIgor; or

d) gIves tbe boIder an eIectIon to requIre sometbIng to be done In
IIeu oI payment oI money.
But notbIng In tbIs sectIon sbaII vaIIdate any provIsIon or stIpuIatIon
otberwIse IIIegaI.

Sec. 6. Om1ss1ons; seo1; por11ou1or moneg. - Tbe vaIIdIty and negotIabIe
cbaracter oI an Instrument are not aIIected by tbe Iact tbat:
a) It Is not dated; or

b) does not specIIy tbe vaIue gIven, or tbat any vaIue bad been
gIven tbereIor; or

c) does not specIIy tbe pIace wbere It Is drawn or tbe pIace wbere It
Is payabIe; or

d) bears a seaI; or

e) desIgnates a partIcuIar kInd oI current money In wbIcb payment
Is to be made.
But notbIng In tbIs sectIon sbaII aIter or repeaI any statute requIrIng In
certaIn cases tbe nature oI tbe consIderatIon to be stated In tbe
Instrument.

Sec. ?. en pogob1e on demond. - An Instrument Is payabIe on
demand:
a) Wben It Is so expressed to be payabIe on demand, or at sIgbt, or
on presentatIon; or

b) In wbIcb no tIme Ior payment Is expressed.
Wbere an Instrument Is Issued, accepted, or Indorsed wben overdue, It Is,
as regards tbe person so IssuIng, acceptIng, or IndorsIng It, payabIe on
demand.

Sec. S. en pogob1e 1o order. - Tbe Instrument Is payabIe to order wbere
It Is drawn payabIe to tbe order oI a specIIIed person or to bIm or bIs
order. It may be drawn payabIe to tbe order oI:
a) A payee wbo Is not maker, drawer, or drawee; or

b) Tbe drawer or maker; or

c) Tbe drawee; or

d) Two or more payees joIntIy; or

e) One or some oI severaI payees; or

I) Tbe boIder oI an oIIIce Ior tbe tIme beIng.
Wbere tbe Instrument Is payabIe to order, tbe payee must be named or
otberwIse IndIcated tbereIn wItb reasonabIe certaInty.

Sec. 9. en pogob1e 1o beorer. - Tbe Instrument Is payabIe to
bearer:
a) Wben It Is expressed to be so payabIe; or

b) Wben It Is payabIe to a person named tbereIn or bearer; or

c) Wben It Is payabIe to tbe order oI a IIctItIous or non-exIstIng
person, and sucb Iact was known to tbe person makIng It so payabIe;
or

d) Wben tbe name oI tbe payee does not purport to be tbe name oI
any
person; or

e) Wben tbe onIy or Iast Indorsement Is an Indorsement In bIank.
Sec. 10. Terms, uen su]]1o1en1. - Tbe Instrument need not IoIIow tbe
Ianguage oI tbIs Act, but any terms are suIIIcIent wbIcb cIearIy IndIcate
an IntentIon to conIorm to tbe requIrements bereoI.

Sec. 11. Do1e, presump11on os 1o. - Wbere tbe Instrument or an
acceptance or any Indorsement tbereon Is dated, sucb date Is deemed
prIma IacIe to be tbe true date oI tbe makIng, drawIng, acceptance, or
Indorsement, as tbe case may be. chanrobles law

Sec. 12. An1e-do1ed ond pos1-do1ed. - Tbe Instrument Is not InvaIId Ior
tbe reason onIy tbat It Is ante-dated or post-dated, provIded tbIs Is not
done Ior an IIIegaI or IrauduIent purpose. Tbe person to wbom an
Instrument so dated Is deIIvered acquIres tbe tItIe tbereto as oI tbe date
oI deIIvery.

Sec. 13. en do1e mog be 1nser1ed. - Wbere an Instrument expressed to
be payabIe at a IIxed perIod aIter date Is Issued undated, or wbere tbe
acceptance oI an Instrument payabIe at a IIxed perIod aIter sIgbt Is
undated, any boIder may Insert tbereIn tbe true date oI Issue or
acceptance, and tbe Instrument sbaII be payabIe accordIngIy. Tbe
InsertIon oI a wrong date does not avoId tbe Instrument In tbe bands oI a
subsequent boIder In due course; but as to bIm, tbe date so Inserted Is to
be regarded as tbe true date.

Sec. 14. B1onKs; uen mog be ]111ed. - Wbere tbe Instrument Is wantIng In
any materIaI partIcuIar, tbe person In possessIon tbereoI bas a prIma IacIe
autborIty to compIete It by IIIIIng up tbe bIanks tbereIn. And a sIgnature
on a bIank paper deIIvered by tbe person makIng tbe sIgnature In order
tbat tbe paper may be converted Into a negotIabIe Instrument operates as
a prIma IacIe autborIty to IIII It up as sucb Ior any amount. In order,
bowever, tbat any sucb Instrument wben compIeted may be enIorced
agaInst any person wbo became a party tbereto prIor to Its compIetIon, It
must be IIIIed up strIctIy In accordance wItb tbe autborIty gIven and
wItbIn a reasonabIe tIme. But II any sucb Instrument, aIter compIetIon, Is
negotIated to a boIder In due course, It Is vaIId and eIIectuaI Ior aII
purposes In bIs bands, and be may enIorce It as II It bad been IIIIed up
strIctIy In accordance wItb tbe autborIty gIven and wItbIn a reasonabIe
tIme.

Sec. 1S. 1noomp1e1e 1ns1rumen1 no1 de11vered. - Wbere an IncompIete
Instrument bas not been deIIvered, It wIII not, II compIeted and
negotIated wItbout autborIty, be a vaIId contract In tbe bands oI any
boIder, as agaInst any person wbose sIgnature was pIaced tbereon beIore
deIIvery.

Sec. 16. De11verg; uen e]]eo1uo1; uen presumed. - Every contract on a
negotIabIe Instrument Is IncompIete and revocabIe untII deIIvery oI tbe
Instrument Ior tbe purpose oI gIvIng eIIect tbereto. As between ImmedIate
partIes and as regards a remote party otber tban a boIder In due course,
tbe deIIvery, In order to be eIIectuaI, must be made eItber by or under tbe
autborIty oI tbe party makIng, drawIng, acceptIng, or IndorsIng, as tbe
case may be; and, In sucb case, tbe deIIvery may be sbown to bave been
condItIonaI, or Ior a specIaI purpose onIy, and not Ior tbe purpose oI
transIerrIng tbe property In tbe Instrument. But wbere tbe Instrument Is
In tbe bands oI a boIder In due course, a vaIId deIIvery tbereoI by aII
partIes prIor to bIm so as to make tbem IIabIe to bIm Is concIusIveIy
presumed. And wbere tbe Instrument Is no Ionger In tbe possessIon oI a
party wbose sIgnature appears tbereon, a vaIId and IntentIonaI deIIvery by
bIm Is presumed untII tbe contrary Is proved.

Sec. 1?. Cons1ruo11on uere 1ns1rumen1 1s omb1guous. - Wbere tbe
Ianguage oI tbe Instrument Is ambIguous or tbere are omIssIons tbereIn,
tbe IoIIowIng ruIes oI constructIon appIy:
a) Wbere tbe sum payabIe Is expressed In words and aIso In IIgures
and tbere Is a dIscrepancy between tbe two, tbe sum denoted by tbe
words Is tbe sum payabIe; but II tbe words are ambIguous or
uncertaIn, reIerence may be bad to tbe IIgures to IIx tbe amount;

b) Wbere tbe Instrument provIdes Ior tbe payment oI Interest,
wItbout specIIyIng tbe date Irom wbIcb Interest Is to run, tbe
Interest runs Irom tbe date oI tbe Instrument, and II tbe Instrument
Is undated, Irom tbe Issue tbereoI;

c) Wbere tbe Instrument Is not dated, It wIII be consIdered to be
dated as oI tbe tIme It was Issued;

d) Wbere tbere Is a conIIIct between tbe wrItten and prInted
provIsIons oI tbe Instrument, tbe wrItten provIsIons prevaII;

e) Wbere tbe Instrument Is so ambIguous tbat tbere Is doubt
wbetber It Is a bIII or note, tbe boIder may treat It as eItber at bIs
eIectIon;

I) Wbere a sIgnature Is so pIaced upon tbe Instrument tbat It Is not
cIear In wbat capacIty tbe person makIng tbe same Intended to sIgn,
be Is to be deemed an Indorser;

g) Wbere an Instrument contaInIng tbe word "1 prom1se 1o pog" Is
sIgned by two or more persons, tbey are deemed to be joIntIy and
severaIIy IIabIe tbereon.

Sec. 1S. L1ob1111g o] person s1gn1ng 1n 1rode or ossumed nome. - No
person Is IIabIe on tbe Instrument wbose sIgnature does not appear
tbereon, except as bereIn otberwIse expressIy provIded. But one wbo sIgns
In a trade or assumed name wIII be IIabIe to tbe same extent as II be bad
sIgned In bIs own name.

Sec. 19. S1gno1ure bg ogen1; ou1or11g; ou soun. - Tbe sIgnature oI any
party may be made by a duIy autborIzed agent. No partIcuIar Iorm oI
appoIntment Is necessary Ior tbIs purpose; and tbe autborIty oI tbe agent
may be estabIIsbed as In otber cases oI agency.

Sec. 20. L1ob1111g o] person s1gn1ng os ogen1, ond so ]or1. - Wbere tbe
Instrument contaIns or a person adds to bIs sIgnature words IndIcatIng
tbat be sIgns Ior or on bebaII oI a prIncIpaI or In a representatIve
capacIty, be Is not IIabIe on tbe Instrument II be was duIy autborIzed; but
tbe mere addItIon oI words descrIbIng bIm as an agent, or as IIIIIng a
representatIve cbaracter, wItbout dIscIosIng bIs prIncIpaI, does not
exempt bIm Irom personaI IIabIIIty.

Sec. 21. S1gno1ure bg proouro11on; e]]eo1 o]. - A sIgnature by
"proouro11on" operates as notIce tbat tbe agent bas but a IImIted
autborIty to sIgn, and tbe prIncIpaI Is bound onIy In case tbe agent In so
sIgnIng acted wItbIn tbe actuaI IImIts oI bIs autborIty.

Sec. 22. ]]eo1 o] 1ndorsemen1 bg 1n]on1 or oorporo11on.- Tbe Indorsement
or assIgnment oI tbe Instrument by a corporatIon or by an InIant passes
tbe property tbereIn, notwItbstandIng tbat Irom want oI capacIty, tbe
corporatIon or InIant may Incur no IIabIIIty tbereon.

Sec. 23. Forged s1gno1ure; e]]eo1 o]. - Wben a sIgnature Is Iorged or made
wItbout tbe autborIty oI tbe person wbose sIgnature It purports to be, It Is
wboIIy InoperatIve, and no rIgbt to retaIn tbe Instrument, or to gIve a
dIscbarge tbereIor, or to enIorce payment tbereoI agaInst any party
tbereto, can be acquIred tbrougb or under sucb sIgnature, unIess tbe
party agaInst wbom It Is sougbt to enIorce sucb rIgbt Is precIuded Irom
settIng up tbe Iorgery or want oI autborIty.

II. CONSIDERATION

Sec. 24. Presump11on o] oons1dero11on. - Every negotIabIe Instrument Is
deemed pr1mo ]oo1e to bave been Issued Ior a vaIuabIe consIderatIon; and
every person wbose sIgnature appears tbereon to bave become a party
tbereto Ior vaIue.

Sec. 2S. Vo1ue, uo1 oons111u1es. - VaIue Is any consIderatIon suIIIcIent
to support a sImpIe contract. An antecedent or pre-exIstIng debt
constItutes vaIue; and Is deemed sucb wbetber tbe Instrument Is payabIe
on demand or at a Iuture tIme.

Sec. 26. o1 oons111u1es o1der ]or vo1ue. - Wbere vaIue bas at any tIme
been gIven Ior tbe Instrument, tbe boIder Is deemed a boIder Ior vaIue In
respect to aII partIes wbo become sucb prIor to tbat tIme.
Sec. 2?. Wben IIen on Instrument constItutes boIder Ior vaIue. - Wbere
tbe boIder bas a IIen on tbe Instrument arIsIng eItber Irom contract or by
ImpIIcatIon oI Iaw, be Is deemed a boIder Ior vaIue to tbe extent oI bIs
IIen.

Sec. 2S. ]]eo1 o] uon1 o] oons1dero11on. - Absence or IaIIure oI
consIderatIon Is a matter oI deIense as agaInst any person not a boIder In
due course; and partIaI IaIIure oI consIderatIon Is a deIense pro tanto,
wbetber tbe IaIIure Is an ascertaIned and IIquIdated amount or otberwIse.

Sec. 29. L1ob1111g o] oooommodo11on por1g. - An accommodatIon party Is
one wbo bas sIgned tbe Instrument as maker, drawer, acceptor, or
Indorser, wItbout receIvIng vaIue tbereIor, and Ior tbe purpose oI IendIng
bIs name to some otber person. Sucb a person Is IIabIe on tbe Instrument
to a boIder Ior vaIue, notwItbstandIng sucb boIder, at tbe tIme oI takIng
tbe Instrument, knew bIm to be onIy an accommodatIon party.

III. NEGOTIATION

Sec. 30. o1 oons111u1es nego11o11on. - An Instrument Is negotIated
wben It Is transIerred Irom one person to anotber In sucb manner as to
constItute tbe transIeree tbe boIder tbereoI. II payabIe to bearer, It Is
negotIated by deIIvery; II payabIe to order, It Is negotIated by tbe
Indorsement oI tbe boIder and compIeted by deIIvery.

Sec. 31. 1ndorsemen1; ou mode. - Tbe Indorsement must be wrItten on
tbe Instrument ItseII or upon a paper attacbed tbereto. Tbe sIgnature oI
tbe Indorser, wItbout addItIonaI words, Is a suIIIcIent Indorsement.

Sec. 32. 1ndorsemen1 mus1 be o] en11re 1ns1rumen1. - Tbe Indorsement
must be an Indorsement oI tbe entIre Instrument. An Indorsement wbIcb
purports to transIer to tbe Indorsee a part onIy oI tbe amount payabIe, or
wbIcb purports to transIer tbe Instrument to two or more Indorsees
severaIIy, does not operate as a negotIatIon oI tbe Instrument. But wbere
tbe Instrument bas been paId In part, It may be Indorsed as to tbe
resIdue.

Sec. 33. R1nds o] 1ndorsemen1. - An Indorsement may be eItber specIaI or
In bIank; and It may aIso be eItber restrIctIve or quaIIIIed or condItIonaI.

Sec. 34. Speo1o1 1ndorsemen1; 1ndorsemen1 1n b1onK. - A specIaI
Indorsement specIIIes tbe person to wbom, or to wbose order, tbe
Instrument Is to be payabIe, and tbe Indorsement oI sucb Indorsee Is
necessary to tbe Iurtber negotIatIon oI tbe Instrument. An Indorsement In
bIank specIIIes no Indorsee, and an Instrument so Indorsed Is payabIe to
bearer, and may be negotIated by deIIvery.

Sec. 3S. B1onK 1ndorsemen1; ou oonged 1o speo1o1 1ndorsemen1. - Tbe
boIder may convert a bIank Indorsement Into a specIaI Indorsement by
wrItIng over tbe sIgnature oI tbe Indorser In bIank any contract
consIstent wItb tbe cbaracter oI tbe Indorsement.

Sec. 36. en 1ndorsemen1 res1r1o11ve. - An Indorsement Is restrIctIve
wbIcb eItber:
a) ProbIbIts tbe Iurtber negotIatIon oI tbe Instrument; or

b) ConstItutes tbe Indorsee tbe agent oI tbe Indorser; or

c) Vests tbe tItIe In tbe Indorsee In trust Ior or to tbe use oI some
otber persons.
But tbe mere absence oI words ImpIyIng power to negotIate does not
make an Indorsement restrIctIve.

Sec. 3?. ]]eo1 o] res1r1o11ve 1ndorsemen1; r1g1s o] 1ndorsee. - A
restrIctIve Indorsement conIers upon tbe Indorsee tbe rIgbt:
a) to receIve payment oI tbe Instrument;

b) to brIng any actIon tbereon tbat tbe Indorser couId brIng;

c) to transIer bIs rIgbts as sucb Indorsee, wbere tbe Iorm oI tbe
Indorsement autborIzes bIm to do so.
But aII subsequent Indorsees acquIre onIy tbe tItIe oI tbe IIrst Indorsee
under tbe restrIctIve Indorsement.

Sec. 3S. Quo11]1ed 1ndorsemen1. - A quaIIIIed Indorsement constItutes tbe
Indorser a mere assIgnor oI tbe tItIe to tbe Instrument. It may be made by
addIng to tbe Indorser's sIgnature tbe words "wItbout recourse" or any
words oI sImIIar Import. Sucb an Indorsement does not ImpaIr tbe
negotIabIe cbaracter oI tbe Instrument.

Sec. 39. Cond111ono1 1ndorsemen1. - Wbere an Indorsement Is condItIonaI,
tbe party requIred to pay tbe Instrument may dIsregard tbe condItIon and
make payment to tbe Indorsee or bIs transIeree wbetber tbe condItIon
bas been IuIIIIIed or not. But any person to wbom an Instrument so
Indorsed Is negotIated wIII boId tbe same, or tbe proceeds tbereoI, subject
to tbe rIgbts oI tbe person IndorsIng condItIonaIIy.

Sec. 40. 1ndorsemen1 o] 1ns1rumen1 pogob1e 1o beorer. - Wbere an
Instrument, payabIe to bearer, Is Indorsed specIaIIy, It may nevertbeIess
be Iurtber negotIated by deIIvery; but tbe person IndorsIng specIaIIy Is
IIabIe as Indorser to onIy sucb boIders as make tItIe tbrougb bIs
Indorsement.

Sec. 41. 1ndorsemen1 uere pogob1e 1o 1uo or more persons. - Wbere an
Instrument Is payabIe to tbe order oI two or more payees or Indorsees wbo
are not partners, aII must Indorse unIess tbe one IndorsIng bas autborIty
to Indorse Ior tbe otbers.

Sec. 42. ]]eo1 o] 1ns1rumen1 droun or 1ndorsed 1o o person os
oos1er. - Wbere an Instrument Is drawn or Indorsed to a person as
"oos1er" or otber IIscaI oIIIcer oI a bank or corporatIon, It Is deemed
prIma IacIe to be payabIe to tbe bank or corporatIon oI wbIcb be Is sucb
oIIIcer, and may be negotIated by eItber tbe Indorsement oI tbe bank or
corporatIon or tbe Indorsement oI tbe oIIIcer.

Sec. 43. 1ndorsemen1 uere nome 1s m1sspe11ed, ond so ]or1. - Wbere tbe
name oI a payee or Indorsee Is wrongIy desIgnated or mIsspeIIed, be may
Indorse tbe Instrument as tbereIn descrIbed addIng, II be tbInks IIt, bIs
proper sIgnature.

Sec. 44. 1ndorsemen1 1n represen1o11ve oopoo11g. - Wbere any person Is
under obIIgatIon to Indorse In a representatIve capacIty, be may Indorse
In sucb terms as to negatIve personaI IIabIIIty. robIes vIrtuaI Iaw IIbrary

Sec. 4S. T1me o] 1ndorsemen1; presump11on. - Except wbere an
Indorsement bears date aIter tbe maturIty oI tbe Instrument, every
negotIatIon Is deemed prIma IacIe to bave been eIIected beIore tbe
Instrument was overdue.

Sec. 46. P1ooe o] 1ndorsemen1; presump11on. - Except wbere tbe contrary
appears, every Indorsement Is presumed prIma IacIe to bave been made at
tbe pIace wbere tbe Instrument Is dated.

Sec. 4?. Con11nuo11on o] nego11ob1e ooroo1er. - An Instrument negotIabIe
In Its orIgIn contInues to be negotIabIe untII It bas been restrIctIveIy
Indorsed or dIscbarged by payment or otberwIse.

Sec. 4S. S1r1K1ng ou1 1ndorsemen1. - Tbe boIder may at any tIme strIke
out any Indorsement wbIcb Is not necessary to bIs tItIe. Tbe Indorser
wbose Indorsement Is struck out, and aII Indorsers subsequent to bIm, are
tbereby reIIeved Irom IIabIIIty on tbe Instrument.

Sec. 49. Trons]er u11ou1 1ndorsemen1; e]]eo1 o]. - Wbere tbe boIder oI an
Instrument payabIe to bIs order transIers It Ior vaIue wItbout IndorsIng It,
tbe transIer vests In tbe transIeree sucb tItIe as tbe transIeror bad
tbereIn, and tbe transIeree acquIres In addItIon, tbe rIgbt to bave tbe
Indorsement oI tbe transIeror. But Ior tbe purpose oI determInIng wbetber
tbe transIeree Is a boIder In due course, tbe negotIatIon takes eIIect as oI
tbe tIme wben tbe Indorsement Is actuaIIy made.

Sec. S0. en pr1or por1g mog nego11o1e 1ns1rumen1. - Wbere an
Instrument Is negotIated back to a prIor party, sucb party may, subject to
tbe provIsIons oI tbIs Act, reIssue and Iurtber negotIabIe tbe same. But be
Is not entItIed to enIorce payment tbereoI agaInst any IntervenIng party
to wbom be was personaIIy IIabIe.

IV. RIGHTS OF THE HOLDER

Sec. S1. R1g1 o] o1der 1o sue; pogmen1. - Tbe boIder oI a negotIabIe
Instrument may to sue tbereon In bIs own name; and payment to bIm In
due course dIscbarges tbe Instrument.

Sec. S2. o1 oons111u1es o o1der 1n due oourse. - A boIder In due course
Is a boIder wbo bas taken tbe Instrument under tbe IoIIowIng condItIons:
a) Tbat It Is compIete and reguIar upon Its Iace;

b) Tbat be became tbe boIder oI It beIore It was overdue, and
wItbout notIce tbat It bas been prevIousIy dIsbonored, II sucb was
tbe Iact;

c) Tbat be took It In good IaItb and Ior vaIue;

d) Tbat at tbe tIme It was negotIated to bIm, be bad no notIce oI
any InIIrmIty In tbe Instrument or deIect In tbe tItIe oI tbe person
negotIatIng It.
Sec. S3. en person no1 deemed o1der 1n due oourse. - Wbere an
Instrument payabIe on demand Is negotIated on an unreasonabIe Iengtb oI
tIme aIter Its Issue, tbe boIder Is not deemed a boIder In due course.

Sec. S4. No11oe be]ore ]u11 omoun1 1s po1d. - Wbere tbe transIeree receIves
notIce oI any InIIrmIty In tbe Instrument or deIect In tbe tItIe oI tbe
person negotIatIng tbe same beIore be bas paId tbe IuII amount agreed to
be paId tbereIor, be wIII be deemed a boIder In due course onIy to tbe
extent oI tbe amount tbereIore paId by bIm.

Sec. SS. en 1111e de]eo11ve. - Tbe tItIe oI a person wbo negotIates an
Instrument Is deIectIve wItbIn tbe meanIng oI tbIs Act wben be obtaIned
tbe Instrument, or any sIgnature tbereto, by Iraud, duress, or Iorce and
Iear, or otber unIawIuI means, or Ior an IIIegaI consIderatIon, or wben be
negotIates It In breacb oI IaItb, or under sucb cIrcumstances as amount to
a Iraud.

Sec. S6. o1 oons111u1es no11oe o] de]eo1. - To constItutes notIce oI an
InIIrmIty In tbe Instrument or deIect In tbe tItIe oI tbe person negotIatIng
tbe same, tbe person to wbom It Is negotIated must bave bad actuaI
knowIedge oI tbe InIIrmIty or deIect, or knowIedge oI sucb Iacts tbat bIs
actIon In takIng tbe Instrument amounted to bad IaItb.

Sec. S?. R1g1s o] o1der 1n due oourse. - A boIder In due course boIds tbe
Instrument Iree Irom any deIect oI tItIe oI prIor partIes, and Iree Irom
deIenses avaIIabIe to prIor partIes among tbemseIves, and may enIorce
payment oI tbe Instrument Ior tbe IuII amount tbereoI agaInst aII partIes
IIabIe tbereon. robIes vIrtuaI Iaw IIbrary

Sec. SS. en sub]eo1 1o or1g1no1 de]ense. - In tbe bands oI any boIder
otber tban a boIder In due course, a negotIabIe Instrument Is subject to
tbe same deIenses as II It were non-negotIabIe. But a boIder wbo derIves
bIs tItIe tbrougb a boIder In due course, and wbo Is not bImseII a party to
any Iraud or IIIegaIIty aIIectIng tbe Instrument, bas aII tbe rIgbts oI sucb
Iormer boIder In respect oI aII partIes prIor to tbe Iatter.

Sec. S9. o 1s deemed o1der 1n due oourse. - Every boIder Is deemed
prIma IacIe to be a boIder In due course; but wben It Is sbown tbat tbe
tItIe oI any person wbo bas negotIated tbe Instrument was deIectIve, tbe
burden Is on tbe boIder to prove tbat be or some person under wbom be
cIaIms acquIred tbe tItIe as boIder In due course. But tbe Iast-mentIoned
ruIe does not appIy In Iavor oI a party wbo became bound on tbe
Instrument prIor to tbe acquIsItIon oI sucb deIectIve tItIe.

V. LIABILITIES OF PARTIES

Sec. 60. L1ob1111g o] moKer. - Tbe maker oI a negotIabIe Instrument, by
makIng It, engages tbat be wIII pay It accordIng to Its tenor, and admIts
tbe exIstence oI tbe payee and bIs tben capacIty to Indorse.

Sec. 61. L1ob1111g o] drouer. - Tbe drawer by drawIng tbe Instrument
admIts tbe exIstence oI tbe payee and bIs tben capacIty to Indorse; and
engages tbat, on due presentment, tbe Instrument wIII be accepted or
paId, or botb, accordIng to Its tenor, and tbat II It be dIsbonored and tbe
necessary proceedIngs on dIsbonor be duIy taken, be wIII pay tbe amount
tbereoI to tbe boIder or to any subsequent Indorser wbo may be
compeIIed to pay It. But tbe drawer may Insert In tbe Instrument an
express stIpuIatIon negatIvIng or IImItIng bIs own IIabIIIty to tbe boIder.

Sec. 62. L1ob1111g o] oooep1or. - Tbe acceptor, by acceptIng tbe
Instrument, engages tbat be wIII pay It accordIng to tbe tenor oI bIs
acceptance and admIts:
a) Tbe exIstence oI tbe drawer, tbe genuIneness oI bIs sIgnature,
and bIs capacIty and autborIty to draw tbe Instrument; and

b) Tbe exIstence oI tbe payee and bIs tben capacIty to Indorse.
Sec. 63. en o person deemed 1ndorser. - A person pIacIng bIs sIgnature
upon an Instrument otberwIse tban as maker, drawer, or acceptor, Is
deemed to be Indorser unIess be cIearIy IndIcates by approprIate words bIs
IntentIon to be bound In some otber capacIty.

Sec. 64. L1ob1111g o] 1rregu1or 1ndorser. - Wbere a person, not otberwIse a
party to an Instrument, pIaces tbereon bIs sIgnature In bIank beIore
deIIvery, be Is IIabIe as Indorser, In accordance wItb tbe IoIIowIng ruIes:
a) II tbe Instrument Is payabIe to tbe order oI a tbIrd person, be Is
IIabIe to tbe payee and to aII subsequent partIes.

b) II tbe Instrument Is payabIe to tbe order oI tbe maker or drawer,
or Is payabIe to bearer, be Is IIabIe to aII partIes subsequent to tbe
maker or drawer.

c) II be sIgns Ior tbe accommodatIon oI tbe payee, be Is IIabIe to aII
partIes subsequent to tbe payee.
Sec. 6S. orron1g uere nego11o11on bg de11verg ond so ]or1. - Every
person negotIatIng an Instrument by deIIvery or by a quaIIIIed
Indorsement warrants:
a) Tbat tbe Instrument Is genuIne and In aII respects wbat It
purports to be;

b) Tbat be bas a good tItIe to It;

c) Tbat aII prIor partIes bad capacIty to contract;

d) Tbat be bas no knowIedge oI any Iact wbIcb wouId ImpaIr tbe
vaIIdIty oI tbe Instrument or render It vaIueIess.
But wben tbe negotIatIon Is by deIIvery onIy, tbe warranty extends In
Iavor oI no boIder otber tban tbe ImmedIate transIeree.

Tbe provIsIons oI subdIvIsIon c) oI tbIs sectIon do not appIy to a person
negotIatIng pubIIc or corporatIon securItIes otber tban bIIIs and notes.

Sec. 66. L1ob1111g o] genero1 1ndorser. - Every Indorser wbo Indorses
wItbout quaIIIIcatIon, warrants to aII subsequent boIders In due course:
a) Tbe matters and tbIngs mentIoned In subdIvIsIons a), b), and c)
oI tbe next precedIng sectIon; and

b) Tbat tbe Instrument Is, at tbe tIme oI bIs Indorsement, vaIId and
subsIstIng;
And, In addItIon, be engages tbat, on due presentment, It sbaII be
accepted or paId, or botb, as tbe case may be, accordIng to Its tenor, and
tbat II It be dIsbonored and tbe necessary proceedIngs on dIsbonor be
duIy taken, be wIII pay tbe amount tbereoI to tbe boIder, or to any
subsequent Indorser wbo may be compeIIed to pay It.

Sec. 6?. L1ob1111g o] 1ndorser uere poper nego11ob1e bg de11verg. -
Wbere a person pIaces bIs Indorsement on an Instrument negotIabIe by
deIIvery, be Incurs aII tbe IIabIIIty oI an Indorser.

Sec. 6S. Order 1n u1o 1ndorsers ore 11ob1e. - As respect one anotber,
Indorsers are IIabIe pr1mo ]oo1e In tbe order In wbIcb tbey Indorse; but
evIdence Is admIssIbIe to sbow tbat, as between or among tbemseIves,
tbey bave agreed otberwIse. JoInt payees or joInt Indorsees wbo Indorse
are deemed to Indorse joIntIy and severaIIy. robIes vIrtuaI Iaw IIbrary

Sec. 69. L1ob1111g o] on ogen1 or broKer. - Wbere a broker or otber agent
negotIates an Instrument wItbout Indorsement, be Incurs aII tbe IIabIIItIes
prescrIbed by SectIon SIxty-IIve oI tbIs Act, unIess be dIscIoses tbe name
oI bIs prIncIpaI and tbe Iact tbat be Is actIng onIy as agent.

VI. PRESENTATION FOR PAYMENT

Sec. ?0. ]]eo1 o] uon1 o] demond on pr1no1po1 deb1or. - Presentment Ior
payment Is not necessary In order to cbarge tbe person prImarIIy IIabIe on
tbe Instrument; but II tbe Instrument Is, by Its terms, payabIe at a specIaI
pIace, and be Is abIe and wIIIIng to pay It tbere at maturIty, sucb abIIIty
and wIIIIngness are equIvaIent to a tender oI payment upon bIs part. But
except as bereIn otberwIse provIded, presentment Ior payment Is
necessary In order to cbarge tbe drawer and Indorsers.

Sec. ?1. Presen1men1 uere 1ns1rumen1 1s no1 pogob1e on demond ond
uere pogob1e on demond. - Wbere tbe Instrument Is not payabIe on
demand, presentment must be made on tbe day It IaIIs due. Wbere It Is
payabIe on demand, presentment must be made wItbIn a reasonabIe tIme
aIter Its Issue, except tbat In tbe case oI a bIII oI excbange, presentment
Ior payment wIII be suIIIcIent II made wItbIn a reasonabIe tIme aIter tbe
Iast negotIatIon tbereoI.

Sec. ?2. o1 oons111u1es o su]]1o1en1 presen1men1. - Presentment Ior
payment, to be suIIIcIent, must be made:
a) By tbe boIder, or by some person autborIzed to receIve payment
on bIs bebaII;

b) At a reasonabIe bour on a busIness day;

c) At a proper pIace as bereIn deIIned;

d) To tbe person prImarIIy IIabIe on tbe Instrument, or II be Is
absent or InaccessIbIe, to any person Iound at tbe pIace wbere tbe
presentment Is made.
Sec. ?3. P1ooe o] presen1men1. - Presentment Ior payment Is made at tbe
proper pIace:
a) Wbere a pIace oI payment Is specIIIed In tbe Instrument and It Is
tbere presented;

b) Wbere no pIace oI payment Is specIIIed but tbe address oI tbe
person to make payment Is gIven In tbe Instrument and It Is tbere
presented;

c) Wbere no pIace oI payment Is specIIIed and no address Is gIven
and tbe Instrument Is presented at tbe usuaI pIace oI busIness or
resIdence oI tbe person to make payment;

d) In any otber case II presented to tbe person to make payment
wberever be can be Iound, or II presented at bIs Iast known pIace oI
busIness or resIdence.
Sec. ?4. 1ns1rumen1 mus1 be e1b11ed. - Tbe Instrument must be
exbIbIted to tbe person Irom wbom payment Is demanded, and wben It Is
paId, must be deIIvered up to tbe party payIng It.

Sec. ?S. Presen1men1 uere 1ns1rumen1 pogob1e o1 bonK. - Wbere tbe
Instrument Is payabIe at a bank, presentment Ior payment must be made
durIng bankIng bours, unIess tbe person to make payment bas no Iunds
tbere to meet It at any tIme durIng tbe day, In wbIcb case presentment at
any bour beIore tbe bank Is cIosed on tbat day Is suIIIcIent.

Sec. ?6. Presen1men1 uere pr1no1po1 deb1or 1s deod. - Wbere tbe person
prImarIIy IIabIe on tbe Instrument Is dead and no pIace oI payment Is
specIIIed, presentment Ior payment must be made to bIs personaI
representatIve, II sucb tbere be, and II, wItb tbe exercIse oI reasonabIe
dIIIgence, be can be Iound.

Sec. ??. Presen1men1 1o persons 11ob1e os por1ners. - Wbere tbe persons
prImarIIy IIabIe on tbe Instrument are IIabIe as partners and no pIace oI
payment Is specIIIed, presentment Ior payment may be made to any one
oI tbem, even tbougb tbere bas been a dIssoIutIon oI tbe IIrm.

Sec. ?S. Presen1men1 1o ]o1n1 deb1ors. - Wbere tbere are severaI persons,
not partners, prImarIIy IIabIe on tbe Instrument and no pIace oI payment
Is specIIIed, presentment must be made to tbem aII.

Sec. ?9. en presen1men1 no1 requ1red 1o oorge 1e drouer. -
Presentment Ior payment Is not requIred In order to cbarge tbe drawer
wbere be bas no rIgbt to expect or requIre tbat tbe drawee or acceptor
wIII pay tbe Instrument.

Sec. S0. en presen1men1 no1 requ1red 1o oorge 1e 1ndorser. -
Presentment Is not requIred In order to cbarge an Indorser wbere tbe
Instrument was made or accepted Ior bIs accommodatIon and be bas no
reason to expect tbat tbe Instrument wIII be paId II presented.

Sec. S1. en de1og 1n moK1ng presen1men1 1s eoused. - DeIay In
makIng presentment Ior payment Is excused wben tbe deIay Is caused by
cIrcumstances beyond tbe controI oI tbe boIder and not ImputabIe to bIs
deIauIt, mIsconduct, or negIIgence. Wben tbe cause oI deIay ceases to
operate, presentment must be made wItb reasonabIe dIIIgence.

Sec. S2. en presen1men1 ]or pogmen1 1s eoused. - Presentment Ior
payment Is excused:
a) Wbere, aIter tbe exercIse oI reasonabIe dIIIgence, presentment, as
requIred by tbIs Act, cannot be made;

b) Wbere tbe drawee Is a IIctItIous person;

c) By waIver oI presentment, express or ImpIIed.
Sec. S3. en 1ns1rumen1 d1sonored bg non-pogmen1. - Tbe Instrument
Is dIsbonored by non-payment wben:
a) It Is duIy presented Ior payment and payment Is reIused or
cannot be obtaIned; or

b) Presentment Is excused and tbe Instrument Is overdue and
unpaId.
Sec. S4. L1ob1111g o] person seoondor11g 11ob1e, uen 1ns1rumen1
d1sonored. - Subject to tbe provIsIons oI tbIs Act, wben tbe Instrument
Is dIsbonored by non-payment, an ImmedIate rIgbt oI recourse to aII
partIes secondarIIy IIabIe tbereon accrues to tbe boIder. robIes vIrtuaI Iaw IIbrary

Sec. SS. T1me o] mo1ur11g. - Every negotIabIe Instrument Is payabIe at tbe
tIme IIxed tbereIn wItbout grace. Wben tbe day oI maturIty IaIIs upon
Sunday or a boIIday, tbe Instruments IaIIIng due or becomIng payabIe on
Saturday are to be presented Ior payment on tbe next succeedIng busIness
day except tbat Instruments payabIe on demand may, at tbe optIon oI tbe
boIder, be presented Ior payment beIore tweIve o'cIock noon on Saturday
wben tbat entIre day Is not a boIIday.

Sec. S6. T1me; ou oompu1ed. - Wben tbe Instrument Is payabIe at a IIxed

perIod aIter date, aIter sIgbt, or aIter tbat bappenIng oI a specIIIed event,
tbe tIme oI payment Is determIned by excIudIng tbe day Irom wbIcb tbe
tIme Is to begIn to run, and by IncIudIng tbe date oI payment.

Sec. S?. Ru1e uere 1ns1rumen1 pogob1e o1 bonK. - Wbere tbe Instrument
Is made payabIe at a bank, It Is equIvaIent to an order to tbe bank to pay
tbe same Ior tbe account oI tbe prIncIpaI debtor tbereon.

Sec. SS. o1 oons111u1es pogmen1 1n due oourse. - Payment Is made In

due course wben It Is made at or aIter tbe maturIty oI tbe payment to tbe
boIder tbereoI In good IaItb and wItbout notIce tbat bIs tItIe Is deIectIve.

VII. NOTICE OF DISHONOR

Sec. S9. To uom no11oe o] d1sonor mus1 be g1ven. - Except as bereIn

otberwIse provIded, wben a negotIabIe Instrument bas been dIsbonored by
non-acceptance or non-payment, notIce oI dIsbonor must be gIven to tbe
drawer and to eacb Indorser, and any drawer or Indorser to wbom sucb
notIce Is not gIven Is dIscbarged.

Sec. 90. Bg uom g1ven. - Tbe notIce may be gIven by or on bebaII oI tbe
boIder, or by or on bebaII oI any party to tbe Instrument wbo mIgbt be
compeIIed to pay It to tbe boIder, and wbo, upon takIng It up, wouId bave
a rIgbt to reImbursement Irom tbe party to wbom tbe notIce Is gIven.

Sec. 91. No11oe g1ven bg ogen1. - NotIce oI dIsbonor may be gIven by any
agent eItber In bIs own name or In tbe name oI any party entItIed to gIven
notIce, wbetber tbat party be bIs prIncIpaI or not.

Sec. 92. ]]eo1 o] no11oe on beo1] o] o1der. - Wbere notIce Is gIven by or

on bebaII oI tbe boIder, It Inures to tbe beneIIt oI aII subsequent boIders
and aII prIor partIes wbo bave a rIgbt oI recourse agaInst tbe party to
wbom It Is gIven.

Sec. 93. ]]eo1 uere no11oe 1s g1ven bg por1g en1111ed 1ere1o. - Wbere
notIce Is gIven by or on bebaII oI a party entItIed to gIve notIce, It Inures
to tbe beneIIt oI tbe boIder and aII partIes subsequent to tbe party to
wbom notIce Is gIven. chanrobles law

Sec. 94. en ogen1 mog g1ve no11oe. - Wbere tbe Instrument bas been
dIsbonored In tbe bands oI an agent, be may eItber bImseII gIve notIce to
tbe partIes IIabIe tbereon, or be may gIve notIce to bIs prIncIpaI. II be
gIves notIce to bIs prIncIpaI, be must do so wItbIn tbe same tIme as II be
were tbe boIder, and tbe prIncIpaI, upon tbe receIpt oI sucb notIce, bas
bImseII tbe same tIme Ior gIvIng notIce as II tbe agent bad been an
Independent boIder.

Sec. 9S. en no11oe su]]1o1en1. - A wrItten notIce need not be sIgned and
an InsuIIIcIent wrItten notIce may be suppIemented and vaIIdated by
verbaI communIcatIon. A mIsdescrIptIon oI tbe Instrument does not
vItIate tbe notIce unIess tbe party to wbom tbe notIce Is gIven Is In Iact
mIsIed tbereby.

Sec. 96. Form o] no11oe. - Tbe notIce may be In wrItIng or mereIy oraI and
may be gIven In any terms wbIcb suIIIcIentIy IdentIIy tbe Instrument, and
IndIcate tbat It bas been dIsbonored by non-acceptance or non-payment.
It may In aII cases be gIven by deIIverIng It personaIIy or tbrougb tbe
maIIs.

Sec. 9?. To uom no11oe mog be g1ven. - NotIce oI dIsbonor may be gIven
eItber to tbe party bImseII or to bIs agent In tbat bebaII.

Sec. 9S. No11oe uere por1g 1s deod. - Wben any party Is dead and bIs
deatb Is known to tbe party gIvIng notIce, tbe notIce must be gIven to a
personaI representatIve, II tbere be one, and II wItb reasonabIe dIIIgence,
be can be Iound. II tbere be no personaI representatIve, notIce may be
sent to tbe Iast resIdence or Iast pIace oI busIness oI tbe deceased.

Sec. 99. No11oe 1o por1ners. - Wbere tbe partIes to be notIIIed are

partners, notIce to any one partner Is notIce to tbe IIrm, even tbougb
tbere bas been a dIssoIutIon.

Sec. 100. No11oe 1o persons ]o1n11g 11ob1e. - NotIce to joInt persons wbo are
not partners must be gIven to eacb oI tbem unIess one oI tbem bas
autborIty to receIve sucb notIce Ior tbe otbers.

Sec. 101. No11oe 1o bonKrup1. - Wbere a party bas been adjudged a

bankrupt or an InsoIvent, or bas made an assIgnment Ior tbe beneIIt oI
credItors, notIce may be gIven eItber to tbe party bImseII or to bIs trustee
or assIgnee.

Sec. 102. T1me u111n u1o no11oe mus1 be g1ven. - NotIce may be gIven
as soon as tbe Instrument Is dIsbonored and, unIess deIay Is excused as
bereInaIter provIded, must be gIven wItbIn tbe tIme IIxed by tbIs Act.

Sec. 103. ere por11es res1de 1n some p1ooe. - Wbere tbe person gIvIng
and tbe person to receIve notIce resIde In tbe same pIace, notIce must be
gIven wItbIn tbe IoIIowIng tImes:
a) II gIven at tbe pIace oI busIness oI tbe person to receIve notIce, It
must be gIven beIore tbe cIose oI busIness bours on tbe day
IoIIowIng.

b) II gIven at bIs resIdence, It must be gIven beIore tbe usuaI bours

oI rest on tbe day IoIIowIng.

c) II sent by maII, It must be deposIted In tbe post oIIIce In tIme to

reacb bIm In usuaI course on tbe day IoIIowIng.
Sec. 104. ere por11es res1de 1n d1]]eren1 p1ooes. - Wbere tbe person
gIvIng and tbe person to receIve notIce resIde In dIIIerent pIaces, tbe
notIce must be gIven wItbIn tbe IoIIowIng tImes:
a) II sent by maII, It must be deposIted In tbe post oIIIce In tIme to
go by maII tbe day IoIIowIng tbe day oI dIsbonor, or II tbere be no
maII at a convenIent bour on Iast day, by tbe next maII tbereaIter.

b) II gIven otberwIse tban tbrougb tbe post oIIIce, tben wItbIn tbe
tIme tbat notIce wouId bave been receIved In due course oI maII, II
It bad been deposIted In tbe post oIIIce wItbIn tbe tIme specIIIed In
tbe Iast subdIvIsIon.
Sec. 10S. en sender deemed 1o ove g1ven due no11oe. - Wbere notIce
oI dIsbonor Is duIy addressed and deposIted In tbe post oIIIce, tbe sender
Is deemed to bave gIven due notIce, notwItbstandIng any mIscarrIage In
tbe maIIs.

Sec. 106. Depos11 1n pos1 o]]1oe; uo1 oons111u1es. - NotIce Is deemed to

bave been deposIted In tbe post-oIIIce wben deposIted In any brancb post
oIIIce or In any Ietter box under tbe controI oI tbe post-oIIIce department.

Sec. 10?. No11oe 1o subsequen1 por1g; 11me o]. - Wbere a party receIves
notIce oI dIsbonor, be bas, aIter tbe receIpt oI sucb notIce, tbe same tIme
Ior gIvIng notIce to antecedent partIes tbat tbe boIder bas aIter tbe
dIsbonor.

Sec. 10S. ere no11oe mus1 be sen1. - Wbere a party bas added an
address to bIs sIgnature, notIce oI dIsbonor must be sent to tbat address;
but II be bas not gIven sucb address, tben tbe notIce must be sent as
IoIIows:
a) EItber to tbe post-oIIIce nearest to bIs pIace oI resIdence or to
tbe post-oIIIce wbere be Is accustomed to receIve bIs Ietters; or

b) II be IIves In one pIace and bas bIs pIace oI busIness In anotber,

notIce may be sent to eItber pIace; or

c) II be Is sojournIng In anotber pIace, notIce may be sent to tbe

pIace wbere be Is so sojournIng.
But wbere tbe notIce Is actuaIIy receIved by tbe party wItbIn tbe tIme
specIIIed In tbIs Act, It wIII be suIIIcIent, tbougb not sent In accordance
wItb tbe requIrement oI tbIs sectIon.

Sec. 109. o1ver o] no11oe. - NotIce oI dIsbonor may be waIved eItber
beIore tbe tIme oI gIvIng notIce bas arrIved or aIter tbe omIssIon to gIve
due notIce, and tbe waIver may be expressed or ImpIIed.

Sec. 110. om o]]eo1ed bg uo1ver. - Wbere tbe waIver Is embodIed In tbe

Instrument ItseII, It Is bIndIng upon aII partIes; but, wbere It Is wrItten
above tbe sIgnature oI an Indorser, It bInds bIm onIy.

Sec. 111. o1ver o] pro1es1. - A waIver oI protest, wbetber In tbe case oI a

IoreIgn bIII oI excbange or otber negotIabIe Instrument, Is deemed to be a
waIver not onIy oI a IormaI protest but aIso oI presentment and notIce oI
dIsbonor.

Sec. 112. en no11oe 1s d1spensed u11. - NotIce oI dIsbonor Is dIspensed

wItb wben, aIter tbe exercIse oI reasonabIe dIIIgence, It cannot be gIven to
or does not reacb tbe partIes sougbt to be cbarged.

Sec. 113. De1og 1n g1v1ng no11oe; ou eoused. - DeIay In gIvIng notIce oI

dIsbonor Is excused wben tbe deIay Is caused by cIrcumstances beyond
tbe controI oI tbe boIder and not ImputabIe to bIs deIauIt, mIsconduct, or
negIIgence. Wben tbe cause oI deIay ceases to operate, notIce must be
gIven wItb reasonabIe dIIIgence.

Sec. 114. en no11oe need no1 be g1ven 1o drouer. - NotIce oI dIsbonor Is

not requIred to be gIven to tbe drawer In eItber oI tbe IoIIowIng cases:
a) Wbere tbe drawer and drawee are tbe same person;

b) Wben tbe drawee Is IIctItIous person or a person not bavIng

capacIty to contract;

c) Wben tbe drawer Is tbe person to wbom tbe Instrument Is

presented Ior payment;

d) Wbere tbe drawer bas no rIgbt to expect or requIre tbat tbe

drawee or acceptor wIII bonor tbe Instrument;

e) Wbere tbe drawer bas countermanded payment.

Sec. 11S. en no11oe need no1 be g1ven 1o 1ndorser. - NotIce oI dIsbonor
Is not requIred to be gIven to an Indorser In eItber oI tbe IoIIowIng cases:
a) Wben tbe drawee Is a IIctItIous person or person not bavIng
capacIty to contract, and tbe Indorser was aware oI tbat Iact at tbe
tIme be Indorsed tbe Instrument;

b) Wbere tbe Indorser Is tbe person to wbom tbe Instrument Is

presented Ior payment;

c) Wbere tbe Instrument was made or accepted Ior bIs

accommodatIon.
Sec. 116. No11oe o] non-pogmen1 uere oooep1onoe re]used. - Wbere due
notIce oI dIsbonor by non-acceptance bas been gIven, notIce oI a
subsequent dIsbonor by non-payment Is not necessary unIess In tbe
meantIme tbe Instrument bas been accepted.

Sec. 11?. ]]eo1 o] om1ss1on 1o g1ve no11oe o] non-oooep1onoe. - An

omIssIon to gIve notIce oI dIsbonor by non-acceptance does not prejudIce
tbe rIgbts oI a boIder In due course subsequent to tbe omIssIon.

Sec. 11S. en pro1es1 need no1 be mode; uen mus1 be mode. - Wbere
any negotIabIe Instrument bas been dIsbonored, It may be protested Ior
non-acceptance or non-payment, as tbe case may be; but protest Is not
requIred except In tbe case oI IoreIgn bIIIs oI excbange. robIes vIrtuaI Iaw IIbrary

VIII. DISCHARGE OF NEGOTIABLEINSTRUMENTS

Sec. 119. 1ns1rumen1; ou d1soorged. - A negotIabIe Instrument Is
dIscbarged:
a) By payment In due course by or on bebaII oI tbe prIncIpaI debtor;

b) By payment In due course by tbe party accommodated, wbere tbe

Instrument Is made or accepted Ior bIs accommodatIon;

c) By tbe IntentIonaI canceIIatIon tbereoI by tbe boIder;

d) By any otber act wbIcb wIII dIscbarge a sImpIe contract Ior tbe
payment oI money;

e) Wben tbe prIncIpaI debtor becomes tbe boIder oI tbe Instrument

at or aIter maturIty In bIs own rIgbt.
Sec. 120. en persons seoondor11g 11ob1e on 1e 1ns1rumen1 ore
d1soorged. - A person secondarIIy IIabIe on tbe Instrument Is dIscbarged:
a) By any act wbIcb dIscbarges tbe Instrument;

b) By tbe IntentIonaI canceIIatIon oI bIs sIgnature by tbe boIder;

c) By tbe dIscbarge oI a prIor party;

d) By a vaIId tender or payment made by a prIor party;

e) By a reIease oI tbe prIncIpaI debtor unIess tbe boIder's rIgbt oI

recourse agaInst tbe party secondarIIy IIabIe Is expressIy reserved;

I) By any agreement bIndIng upon tbe boIder to extend tbe tIme oI

payment or to postpone tbe boIder's rIgbt to enIorce tbe Instrument
unIess made wItb tbe assent oI tbe party secondarIIy IIabIe or unIess
tbe rIgbt oI recourse agaInst sucb party Is expressIy reserved.
Sec. 121. R1g1 o] por1g uo d1soorges 1ns1rumen1. - Wbere tbe
Instrument Is paId by a party secondarIIy IIabIe tbereon, It Is not
dIscbarged; but tbe party so payIng It Is remItted to bIs Iormer rIgbts as
regard aII prIor partIes, and be may strIke out bIs own and aII subsequent
Indorsements and agaInst negotIate tbe Instrument, except:
a) Wbere It Is payabIe to tbe order oI a tbIrd person and bas been
paId by tbe drawer; and

b) Wbere It was made or accepted Ior accommodatIon and bas been

paId by tbe party accommodated.
Sec. 122. Renuno1o11on bg o1der. - Tbe boIder may expressIy renounce
bIs rIgbts agaInst any party to tbe Instrument beIore, at, or aIter Its
maturIty. An absoIute and uncondItIonaI renuncIatIon oI bIs rIgbts
agaInst tbe prIncIpaI debtor made at or aIter tbe maturIty oI tbe
Instrument dIscbarges tbe Instrument. But a renuncIatIon does not aIIect
tbe rIgbts oI a boIder In due course wItbout notIce. A renuncIatIon must
be In wrItIng unIess tbe Instrument Is deIIvered up to tbe person prImarIIy
IIabIe tbereon.

Sec. 123. Conoe11o11on; un1n1en11ono1; burden o] proo]. - A canceIIatIon

made unIntentIonaIIy or under a mIstake or wItbout tbe autborIty oI tbe
boIder, Is InoperatIve but wbere an Instrument or any sIgnature tbereon
appears to bave been canceIIed, tbe burden oI prooI IIes on tbe party wbo
aIIeges tbat tbe canceIIatIon was made unIntentIonaIIy or under a mIstake
or wItbout autborIty.

Sec. 124. A11ero11on o] 1ns1rumen1; e]]eo1 o]. - Wbere a negotIabIe

Instrument Is materIaIIy aItered wItbout tbe assent oI aII partIes IIabIe
tbereon, It Is avoIded, except as agaInst a party wbo bas bImseII made,
autborIzed, or assented to tbe aIteratIon and subsequent Indorsers.
But wben an Instrument bas been materIaIIy aItered and Is In tbe bands oI
a boIder In due course not a party to tbe aIteratIon, be may enIorce
payment tbereoI accordIng to Its orIgInaI tenor.

Sec. 12S. o1 oons111u1es o mo1er1o1 o11ero11on. - Any aIteratIon wbIcb

cbanges:
a) Tbe date;

b) Tbe sum payabIe, eItber Ior prIncIpaI or Interest;

c) Tbe tIme or pIace oI payment:

d) Tbe number or tbe reIatIons oI tbe partIes;

e) Tbe medIum or currency In wbIcb payment Is to be made;

I) Or wbIcb adds a pIace oI payment wbere no pIace oI payment Is

specIIIed, or any otber cbange or addItIon wbIcb aIters tbe eIIect oI
tbe Instrument In any respect, Is a materIaI aIteratIon.
BILLS OF EXCHANGE

IX. FORM AND INTERPRETATION

Sec. 126. B111 o] eoonge, de]1ned. - A bIII oI excbange Is an

uncondItIonaI order In wrItIng addressed by one person to anotber, sIgned
by tbe person gIvIng It, requIrIng tbe person to wbom It Is addressed to
pay on demand or at a IIxed or determInabIe Iuture tIme a sum certaIn In
money to order or to bearer.

Sec. 12?. B111 no1 on oss1gnmen1 o] ]unds 1n onds o] drouee. - A bIII oI

ItseII does not operate as an assIgnment oI tbe Iunds In tbe bands oI tbe
drawee avaIIabIe Ior tbe payment tbereoI, and tbe drawee Is not IIabIe on
tbe bIII unIess and untII be accepts tbe same.

Sec. 12S. B111 oddressed 1o more 1on one drouee. - A bIII may be
addressed to two or more drawees joIntIy, wbetber tbey are partners or
not; but not to two or more drawees In tbe aIternatIve or In successIon.

Sec. 129. 1n1ond ond ]ore1gn b111s o] eoonge. - An InIand bIII oI

excbange Is a bIII wbIcb Is, or on Its Iace purports to be, botb drawn and
payabIe wItbIn tbe PbIIIppInes. Any otber bIII Is a IoreIgn bIII. UnIess tbe
contrary appears on tbe Iace oI tbe bIII, tbe boIder may treat It as an
InIand bIII.

Sec. 130. en b111 mog be 1reo1ed os prom1ssorg no1e. - Wbere In a bIII

tbe drawer and drawee are tbe same person or wbere tbe drawee Is a
IIctItIous person or a person not bavIng capacIty to contract, tbe boIder
may treat tbe Instrument at bIs optIon eItber as a bIII oI excbange or as a
promIssory note.

Sec. 131. Re]eree 1n oose o] need. - Tbe drawer oI a bIII and any Indorser
may Insert tbereon tbe name oI a person to wbom tbe boIder may resort
In case oI need; tbat Is to say, In case tbe bIII Is dIsbonored by non-
acceptance or non-payment. Sucb person Is caIIed a reIeree In case oI
need. It Is In tbe optIon oI tbe boIder to resort to tbe reIeree In case oI
need or not as be may see IIt.

X. ACCEPTANCE

Sec. 132. Aooep1onoe; ou mode, bg ond so ]or1. - Tbe acceptance oI a

bIII Is tbe sIgnIIIcatIon by tbe drawee oI bIs assent to tbe order oI tbe
drawer. Tbe acceptance must be In wrItIng and sIgned by tbe drawee. It
must not express tbat tbe drawee wIII perIorm bIs promIse by any otber
means tban tbe payment oI money.

Sec. 133. Ho1der en1111ed 1o oooep1onoe on ]ooe o] b111. - Tbe boIder oI a

bIII presentIng tbe same Ior acceptance may requIre tbat tbe acceptance
be wrItten on tbe bIII, and, II sucb request Is reIused, may treat tbe bIII as
dIsbonored.

Sec. 134. Aooep1onoe bg seporo1e 1ns1rumen1. - Wbere an acceptance Is

wrItten on a paper otber tban tbe bIII ItseII, It does not bInd tbe acceptor
except In Iavor oI a person to wbom It Is sbown and wbo, on tbe IaItb
tbereoI, receIves tbe bIII Ior vaIue.

Sec. 13S. Prom1se 1o oooep1; uen equ1vo1en1 1o oooep1onoe. - An

uncondItIonaI promIse In wrItIng to accept a bIII beIore It Is drawn Is
deemed an actuaI acceptance In Iavor oI every person wbo, upon tbe IaItb
tbereoI, receIves tbe bIII Ior vaIue.

Sec. 136. T1me o11oued drouee 1o oooep1. - Tbe drawee Is aIIowed twenty-
Iour bours aIter presentment In wbIcb to decIde wbetber or not be wIII
accept tbe bIII; tbe acceptance, II gIven, dates as oI tbe day oI
presentatIon.

Sec. 13?. L1ob1111g o] drouee re1urn1ng or des1rog1ng b111. - Wbere a

drawee to wbom a bIII Is deIIvered Ior acceptance destroys tbe same, or
reIuses wItbIn twenty-Iour bours aIter sucb deIIvery or wItbIn sucb otber
perIod as tbe boIder may aIIow, to return tbe bIII accepted or non-
accepted to tbe boIder, be wIII be deemed to bave accepted tbe same.

Sec. 13S. Aooep1onoe o] 1noomp1e1e b111. - A bIII may be accepted beIore It

bas been sIgned by tbe drawer, or wbIIe otberwIse IncompIete, or wben It
Is overdue, or aIter It bas been dIsbonored by a prevIous reIusaI to accept,
or by non payment. But wben a bIII payabIe aIter sIgbt Is dIsbonored by
non-acceptance and tbe drawee subsequentIy accepts It, tbe boIder, In tbe
absence oI any dIIIerent agreement, Is entItIed to bave tbe bIII accepted
as oI tbe date oI tbe IIrst presentment.

Sec. 139. R1nds o] oooep1onoe. - An acceptance Is eItber generaI or

quaIIIIed. A generaI acceptance assents wItbout quaIIIIcatIon to tbe order
oI tbe drawer. A quaIIIIed acceptance In express terms varIes tbe eIIect oI
tbe bIII as drawn.

Sec. 140. o1 oons111u1es o genero1 oooep1onoe. - An acceptance to pay

at a partIcuIar pIace Is a generaI acceptance unIess It expressIy states tbat
tbe bIII Is to be paId tbere onIy and not eIsewbere.

Sec. 141. Quo11]1ed oooep1onoe. - An acceptance Is quaIIIIed wbIcb Is:

a) CondItIonaI; tbat Is to say, wbIcb makes payment by tbe
acceptor dependent on tbe IuIIIIIment oI a condItIon tbereIn stated;

b) PartIaI; tbat Is to say, an acceptance to pay part onIy oI tbe

amount Ior wbIcb tbe bIII Is drawn;

c) LocaI; tbat Is to say, an acceptance to pay onIy at a partIcuIar

pIace;

d) QuaIIIIed as to tIme;

e) Tbe acceptance oI some, one or more oI tbe drawees but not oI

aII.
Sec. 142. R1g1s o] por11es os 1o quo11]1ed oooep1onoe. - Tbe boIder may
reIuse to take a quaIIIIed acceptance and II be does not obtaIn an
unquaIIIIed acceptance, be may treat tbe bIII as dIsbonored by non-
acceptance. Wbere a quaIIIIed acceptance Is taken, tbe drawer and
Indorsers are dIscbarged Irom IIabIIIty on tbe bIII unIess tbey bave
expressIy or ImpIIedIy autborIzed tbe boIder to take a quaIIIIed
acceptance, or subsequentIy assent tbereto. Wben tbe drawer or an
Indorser receIves notIce oI a quaIIIIed acceptance, be must, wItbIn a
reasonabIe tIme, express bIs dIssent to tbe boIder or be wIII be deemed to
bave assented tbereto.

XI. PRESENTMENT FOR ACCEPTANCE

Sec. 143. en presen1men1 ]or oooep1onoe mus1 be mode. - Presentment
Ior acceptance must be made:
a) Wbere tbe bIII Is payabIe aIter sIgbt, or In any otber case, wbere
presentment Ior acceptance Is necessary In order to IIx tbe maturIty
oI tbe Instrument; or

b) Wbere tbe bIII expressIy stIpuIates tbat It sbaII be presented Ior

acceptance; or

c) Wbere tbe bIII Is drawn payabIe eIsewbere tban at tbe resIdence

or pIace oI busIness oI tbe drawee.
In no otber case Is presentment Ior acceptance necessary In order to
render any party to tbe bIII IIabIe.

Sec. 144. en ]o11ure 1o presen1 re1eoses drouer ond 1ndorser. - Except

as bereIn otberwIse provIded, tbe boIder oI a bIII wbIcb Is requIred by tbe
next precedIng sectIon to be presented Ior acceptance must eItber present
It Ior acceptance or negotIate It wItbIn a reasonabIe tIme. II be IaIIs to do
so, tbe drawer and aII Indorsers are dIscbarged.

Sec. 14S. Presen1men1; ou mode. - Presentment Ior acceptance must be

made by or on bebaII oI tbe boIder at a reasonabIe bour, on a busIness day
and beIore tbe bIII Is overdue, to tbe drawee or some person autborIzed to
accept or reIuse acceptance on bIs bebaII; and
a) Wbere a bIII Is addressed to two or more drawees wbo are not
partners, presentment must be made to tbem aII unIess one bas
autborIty to accept or reIuse acceptance Ior aII, In wbIcb case
presentment may be made to bIm onIy;

b) Wbere tbe drawee Is dead, presentment may be made to bIs

personaI representatIve;

c) Wbere tbe drawee bas been adjudged a bankrupt or an InsoIvent

or bas made an assIgnment Ior tbe beneIIt oI credItors, presentment
may be made to bIm or to bIs trustee or assIgnee.
Sec. 146. On uo1 dogs presen1men1 mog be mode. - A bIII may be
presented Ior acceptance on any day on wbIcb negotIabIe Instruments
may be presented Ior payment under tbe provIsIons oI SectIons seventy-
two and eIgbty-IIve oI tbIs Act. Wben Saturday Is not otberwIse a boIIday,
presentment Ior acceptance may be made beIore tweIve o'cIock noon on
tbat day.

Sec. 14?. Presen1men1 uere 11me 1s 1nsu]]1o1en1. - Wbere tbe boIder oI a

bIII drawn payabIe eIsewbere tban at tbe pIace oI busIness or tbe
resIdence oI tbe drawee bas no tIme, wItb tbe exercIse oI reasonabIe
dIIIgence, to present tbe bIII Ior acceptance beIore presentIng It Ior
payment on tbe day tbat It IaIIs due, tbe deIay caused by presentIng tbe
bIII Ior acceptance beIore presentIng It Ior payment Is excused and does
not dIscbarge tbe drawers and Indorsers.

Sec. 14S. ere presen1men1 1s eoused. - Presentment Ior acceptance Is

excused and a bIII may be treated as dIsbonored by non-acceptance In
eItber oI tbe IoIIowIng cases:
a) Wbere tbe drawee Is dead, or bas absconded, or Is a IIctItIous
person or a person not bavIng capacIty to contract by bIII.

b) Wbere, aIter tbe exercIse oI reasonabIe dIIIgence, presentment

can not be made.

c) Wbere, aItbougb presentment bas been IrreguIar, acceptance bas

been reIused on some otber ground.
Sec. 149. en d1sonored bg nonoooep1onoe. - A bIII Is dIsbonored by
non-acceptance:
a) Wben It Is duIy presented Ior acceptance and sucb an acceptance
as Is prescrIbed by tbIs Act Is reIused or can not be obtaIned; or

b) Wben presentment Ior acceptance Is excused and tbe bIII Is not

accepted.
Sec. 1S0. Du1g o] o1der uere b111 no1 oooep1ed. - Wbere a bIII Is duIy
presented Ior acceptance and Is not accepted wItbIn tbe prescrIbed tIme,
tbe person presentIng It must treat tbe bIII as dIsbonored by
nonacceptance or be Ioses tbe rIgbt oI recourse agaInst tbe drawer and
Indorsers.

Sec. 1S1. R1g1s o] o1der uere b111 no1 oooep1ed. - Wben a bIII Is
dIsbonored by nonacceptance, an ImmedIate rIgbt oI recourse agaInst tbe
drawer and Indorsers accrues to tbe boIder and no presentment Ior
payment Is necessary.

XII. PROTEST

Sec. 1S2. 1n uo1 ooses pro1es1 neoessorg. - Wbere a IoreIgn bIII

appearIng on Its Iace to be sucb Is dIsbonored by nonacceptance, It must
be duIy protested Ior nonacceptance, by nonacceptance Is dIsbonored and
wbere sucb a bIII wbIcb bas not prevIousIy been dIsbonored by
nonpayment, It must be duIy protested Ior nonpayment. II It Is not so
protested, tbe drawer and Indorsers are dIscbarged. Wbere a bIII does not
appear on Its Iace to be a IoreIgn bIII, protest tbereoI In case oI dIsbonor
Is unnecessary.

Sec. 1S3. Pro1es1; ou mode. - Tbe protest must be annexed to tbe bIII or
must contaIn a copy tbereoI, and must be under tbe band and seaI oI tbe
notary makIng It and must specIIy:
a) Tbe tIme and pIace oI presentment;

b) Tbe Iact tbat presentment was made and tbe manner tbereoI;

c) Tbe cause or reason Ior protestIng tbe bIII;

d) Tbe demand made and tbe answer gIven, II any, or tbe Iact tbat
tbe drawee or acceptor couId not be Iound.
Sec. 1S4. Pro1es1, bg uom mode. - Protest may be made by:
a) A notary pubIIc; or

b) By any respectabIe resIdent oI tbe pIace wbere tbe bIII Is

dIsbonored, In tbe presence oI two or more credIbIe wItnesses.
Sec. 1SS. Pro1es1; uen 1o be mode. - Wben a bIII Is protested, sucb
protest must be made on tbe day oI Its dIsbonor unIess deIay Is excused
as bereIn provIded. Wben a bIII bas been duIy noted, tbe protest may be
subsequentIy extended as oI tbe date oI tbe notIng.

Sec. 1S6. Pro1es1; uere mode. - A bIII must be protested at tbe pIace
wbere It Is dIsbonored, except tbat wben a bIII drawn payabIe at tbe pIace
oI busIness or resIdence oI some person otber tban tbe drawee bas been
dIsbonored by nonacceptance, It must be protested Ior non-payment at
tbe pIace wbere It Is expressed to be payabIe, and no Iurtber presentment
Ior payment to, or demand on, tbe drawee Is necessary.

Sec. 1S?. Pro1es1 bo1 ]or non-oooep1onoe ond non-pogmen1. - A bIII wbIcb
bas been protested Ior non-acceptance may be subsequentIy protested Ior
non-payment.

Sec. 1SS. Pro1es1 be]ore mo1ur11g uere oooep1or 1nso1ven1. - Wbere tbe
acceptor bas been adjudged a bankrupt or an InsoIvent or bas made an
assIgnment Ior tbe beneIIt oI credItors beIore tbe bIII matures, tbe boIder
may cause tbe bIII to be protested Ior better securIty agaInst tbe drawer
and Indorsers. robIes vIrtuaI Iaw IIbrary

Sec. 1S9. en pro1es1 d1spensed u11. - Protest Is dIspensed wItb by any

cIrcumstances wbIcb wouId dIspense wItb notIce oI dIsbonor. DeIay In
notIng or protestIng Is excused wben deIay Is caused by cIrcumstances
beyond tbe controI oI tbe boIder and not ImputabIe to bIs deIauIt,
mIsconduct, or negIIgence. Wben tbe cause oI deIay ceases to operate, tbe
bIII must be noted or protested wItb reasonabIe dIIIgence.

Sec. 160. Pro1es1 uere b111 1s 1os1 ond so ]or1. - Wben a bIII Is Iost or
destroyed or Is wrongIy detaIned Irom tbe person entItIed to boId It,
protest may be made on a copy or wrItten partIcuIars tbereoI.

XIII. ACCEPTANCE FOR HONOR

Sec. 161. en b111 mog be oooep1ed ]or onor. - Wben a bIII oI excbange
bas been protested Ior dIsbonor by non-acceptance or protested Ior better
securIty and Is not overdue, any person not beIng a party aIready IIabIe
tbereon may, wItb tbe consent oI tbe boIder, Intervene and accept tbe bIII
supro protest Ior tbe bonor oI any party IIabIe tbereon or Ior tbe bonor oI
tbe person Ior wbose account tbe bIII Is drawn. Tbe acceptance Ior bonor
may be Ior part onIy oI tbe sum Ior wbIcb tbe bIII Is drawn; and wbere
tbere bas been an acceptance Ior bonor Ior one party, tbere may be a
Iurtber acceptance by a dIIIerent person Ior tbe bonor oI anotber party.

Sec. 162. Aooep1onoe ]or onor; ou mode. - An acceptance Ior bonor

supra protest must be In wrItIng and IndIcate tbat It Is an acceptance Ior
bonor and must be sIgned by tbe acceptor Ior bonor. chanrobles law

Sec. 163. en deemed 1o be on oooep1onoe ]or onor o] 1e drouer. -

Wbere an acceptance Ior bonor does not expressIy state Ior wbose bonor
It Is made, It Is deemed to be an acceptance Ior tbe bonor oI tbe drawer.

Sec. 164. L1ob1111g o] 1e oooep1or ]or onor. - Tbe acceptor Ior bonor Is
IIabIe to tbe boIder and to aII partIes to tbe bIII subsequent to tbe party
Ior wbose bonor be bas accepted.

Sec. 16S. Agreemen1 o] oooep1or ]or onor. - Tbe acceptor Ior bonor, by
sucb acceptance, engages tbat be wIII, on due presentment, pay tbe bIII
accordIng to tbe terms oI bIs acceptance provIded It sbaII not bave been
paId by tbe drawee and provIded aIso tbat Is sbaII bave been duIy
presented Ior payment and protested Ior non-payment and notIce oI
dIsbonor gIven to bIm.

Sec. 166. Mo1ur11g o] b111 pogob1e o]1er s1g1; oooep1ed ]or onor. - Wbere
a bIII payabIe aIter sIgbt Is accepted Ior bonor, Its maturIty Is caIcuIated
Irom tbe date oI tbe notIng Ior non-acceptance and not Irom tbe date oI
tbe acceptance Ior bonor.

Sec. 16?. Pro1es1 o] b111 oooep1ed ]or onor, ond so ]or1. - Wbere a
dIsbonored bIII bas been accepted Ior bonor supra protest or contaIns a
reIeree In case oI need, It must be protested Ior non-payment beIore It Is
presented Ior payment to tbe acceptor Ior bonor or reIeree In case oI
need.

Sec. 16S. Presen1men1 ]or pogmen1 1o oooep1or ]or onor, ou mode. -

Presentment Ior payment to tbe acceptor Ior bonor must be made as
IoIIows:
a) II It Is to be presented In tbe pIace wbere tbe protest Ior non-
payment was made, It must be presented not Iater tban tbe day
IoIIowIng Its maturIty.

b) II It Is to be presented In some otber pIace tban tbe pIace wbere

It was protested, tben It must be Iorwarded wItbIn tbe tIme
specIIIed In SectIon one bundred and Iour.
Sec. 169. en de1og 1n moK1ng presen1men1 1s eoused. - Tbe provIsIons
oI SectIon eIgbty-one appIy wbere tbere Is deIay In makIng presentment
to tbe acceptor Ior bonor or reIeree In case oI need.

Sec. 1?0. D1sonor o] b111 bg oooep1or ]or onor. - Wben tbe bIII Is
dIsbonored by tbe acceptor Ior bonor, It must be protested Ior non-
payment by bIm.

XIV. PAYMENT FOR HONOR

Sec. 1?1. o mog moKe pogmen1 ]or onor. - Wbere a bIII bas been
protested Ior non-payment, any person may Intervene and pay It supro
protest Ior tbe bonor oI any person IIabIe tbereon or Ior tbe bonor oI tbe
person Ior wbose account It was drawn.

Sec. 1?2. Pogmen1 ]or onor; ou mode. - Tbe payment Ior bonor supro
protest, In order to operate as sucb and not as a mere voIuntary payment,
must be attested by a notarIaI act oI bonor wbIcb may be appended to tbe
protest or Iorm an extensIon to It.

Sec. 1?3. Deo1oro11on be]ore pogmen1 ]or onor. - Tbe notarIaI act oI
bonor must be Iounded on a decIaratIon made by tbe payer Ior bonor or
by bIs agent In tbat bebaII decIarIng bIs IntentIon to pay tbe bIII Ior bonor
and Ior wbose bonor be pays.

Sec. 1?4. Pre]erenoe o] por11es o]]er1ng 1o pog ]or onor. - Wbere two or
more persons oIIer to pay a bIII Ior tbe bonor oI dIIIerent partIes, tbe
person wbose payment wIII dIscbarge most partIes to tbe bIII Is to be
gIven tbe preIerence.

Sec. 1?S. ]]eo1 on subsequen1 por11es uere b111 1s po1d ]or onor. -
Wbere a bIII bas been paId Ior bonor, aII partIes subsequent to tbe party
Ior wbose bonor It Is paId are dIscbarged but tbe payer Ior bonor Is
subrogated Ior, and succeeds to, botb tbe rIgbts and dutIes oI tbe boIder
as regards tbe party Ior wbose bonor be pays and aII partIes IIabIe to tbe
Iatter.

Sec. 1?6. ere o1der re]uses 1o reoe1ve pogmen1 supro pro1es1. - Wbere
tbe boIder oI a bIII reIuses to receIve payment supro protest, be Ioses bIs
rIgbt oI recourse agaInst any party wbo wouId bave been dIscbarged by
sucb payment.

Sec. 1??. R1g1s o] poger ]or onor. - Tbe payer Ior bonor, on payIng to
tbe boIder tbe amount oI tbe bIII and tbe notarIaI expenses IncIdentaI to
Its dIsbonor, Is entItIed to receIve botb tbe bIII ItseII and tbe protest.

XV. BILLS IN SET

Sec. 1?S. B111s 1n se1 oons111u1e one b111. - Wbere a bIII Is drawn In a set,
eacb part oI tbe set beIng numbered and contaInIng a reIerence to tbe
otber parts, tbe wboIe oI tbe parts constItutes one bIII.

Sec. 1?9. R1g1 o] o1ders uere d1]]eren1 por1s ore nego11o1ed. - Wbere
two or more parts oI a set are negotIated to dIIIerent boIders In due
course, tbe boIder wbose tItIe IIrst accrues Is, as between sucb boIders,
tbe true owner oI tbe bIII. But notbIng In tbIs sectIon aIIects tbe rIgbt oI
a person wbo, In due course, accepts or pays tbe parts IIrst presented to
bIm.

Sec. 1S0. L1ob1111g o] o1der uo 1ndorses 1uo or more por1s o] o se1 1o

d1]]eren1 persons. - Wbere tbe boIder oI a set Indorses two or more parts
to dIIIerent persons be Is IIabIe on every sucb part, and every Indorser
subsequent to bIm Is IIabIe on tbe part be bas bImseII Indorsed, as II sucb
parts were separate bIIIs.

Sec. 1S1. Aooep1onoe o] b111 droun 1n se1s. - Tbe acceptance may be

wrItten on any part and It must be wrItten on one part onIy. II tbe drawee
accepts more tban one part and sucb accepted parts negotIated to
dIIIerent boIders In due course, be Is IIabIe on every sucb part as II It were
a separate bIII.

Sec. 1S2. Pogmen1 bg oooep1or o] b111s droun 1n se1s. - Wben tbe acceptor
oI a bIII drawn In a set pays It wItbout requIrIng tbe part bearIng bIs
acceptance to be deIIvered up to bIm, and tbe part at maturIty Is
outstandIng In tbe bands oI a boIder In due course, be Is IIabIe to tbe
boIder tbereon.

Sec. 1S3. ]]eo1 o] d1soorg1ng one o] o se1. - Except as bereIn otberwIse

provIded, wbere any one part oI a bIII drawn In a set Is dIscbarged by
payment or otberwIse, tbe wboIe bIII Is dIscbarged.

XVI. PROMISSORY NOTES AND CHECKS

Sec. 1S4. Prom1ssorg no1e, de]1ned. - A negotIabIe promIssory note wItbIn

tbe meanIng oI tbIs Act Is an uncondItIonaI promIse In wrItIng made by
one person to anotber, sIgned by tbe maker, engagIng to pay on demand,
or at a IIxed or determInabIe Iuture tIme, a sum certaIn In money to order
or to bearer. Wbere a note Is drawn to tbe maker's own order, It Is not
compIete untII Indorsed by bIm.

Sec. 1SS. CeoK, de]1ned. - A cbeck Is a bIII oI excbange drawn on a bank

payabIe on demand. Except as bereIn otberwIse provIded, tbe provIsIons
oI tbIs Act appIIcabIe to a bIII oI excbange payabIe on demand appIy to a
cbeck.

Sec. 1S6. 111n uo1 11me o oeoK mus1 be presen1ed. - A cbeck must be
presented Ior payment wItbIn a reasonabIe tIme aIter Its Issue or tbe
drawer wIII be dIscbarged Irom IIabIIIty tbereon to tbe extent oI tbe Ioss
caused by tbe deIay.

Sec. 1S?. Cer11]1oo11on o] oeoK; e]]eo1 o]. - Wbere a cbeck Is certIIIed by

tbe bank on wbIcb It Is drawn, tbe certIIIcatIon Is equIvaIent to an
acceptance.

Sec. 1SS. ]]eo1 uere 1e o1der o] oeoK prooures 11 1o be oer11]1ed. -

Wbere tbe boIder oI a cbeck procures It to be accepted or certIIIed, tbe
drawer and aII Indorsers are dIscbarged Irom IIabIIIty tbereon.

Sec. 1S9. en oeoK opero1es os on oss1gnmen1. - A cbeck oI ItseII does

not operate as an assIgnment oI any part oI tbe Iunds to tbe credIt oI tbe
drawer wItb tbe bank, and tbe bank Is not IIabIe to tbe boIder unIess and
untII It accepts or certIIIes tbe cbeck.

XVII. GENERAL PROVISIONS

Sec. 190. Sor1 1111e. - TbIs Act sbaII be known as tbe NegotIabIe
Instruments Law.

Sec. 191. De]1n111on ond meon1ng o] 1erms. - In tbIs Act, unIess tbe
contract otberwIse requIres:
"Aooep1onoe" means an acceptance compIeted by deIIvery or
notIIIcatIon;

"Ao11on" IncIudes countercIaIm and set-oII;

"BonK" IncIudes any person or assocIatIon oI persons carryIng on

tbe busIness oI bankIng, wbetber Incorporated or not;

"Beorer" means tbe person In possessIon oI a bIII or note wbIcb Is

payabIe to bearer;

"B111" means bIII oI excbange, and "note" means negotIabIe

promIssory note;

"De11verg" means transIer oI possessIon, actuaI or constructIve, Irom

one person to anotber;

"Ho1der" means tbe payee or Indorsee oI a bIII or note wbo Is In

possessIon oI It, or tbe bearer tbereoI;

"1ndorsemen1" means an Indorsement compIeted by deIIvery;

"1ns1rumen1" means negotIabIe Instrument;

"1ssue" means tbe IIrst deIIvery oI tbe Instrument, compIete In Iorm,

to a person wbo takes It as a boIder;

"Person" IncIudes a body oI persons, wbetber Incorporated or not;

"Vo1ue" means vaIuabIe consIderatIon;

"r111en" IncIudes prInted, and "ur111ng" IncIudes prInt.

Sec. 192. Persons pr1mor11g 11ob1e on 1ns1rumen1. - Tbe person
"pr1mor11g" IIabIe on an Instrument Is tbe person wbo, by tbe terms oI tbe
Instrument, Is absoIuteIy requIred to pay tbe same. AII otber partIes are
"seoondor11g" IIabIe.

Sec. 193. Reosonob1e 11me, uo1 oons111u1es. - In determInIng wbat Is a

"reosonob1e 11me" regard Is to be bad to tbe nature oI tbe Instrument, tbe
usage oI trade or busIness wItb respect to sucb Instruments, and tbe Iacts
oI tbe partIcuIar case.

Sec. 194. T1me, ou oompu1ed; uen 1os1 dog ]o11s on o11dog. - Wbere
tbe day, or tbe Iast day Ior doIng any act bereIn requIred or permItted to
be done IaIIs on a Sunday or on a boIIday, tbe act may be done on tbe
next succeedIng secuIar or busIness day.

Sec. 19S. App11oo11on o] Ao1. - Tbe provIsIons oI tbIs Act do not appIy to
negotIabIe Instruments made and deIIvered prIor to tbe takIng eIIect
bereoI. chanrobles law

Sec. 196. Coses no1 prov1ded ]or 1n Ao1. - Any case not provIded Ior In tbIs
Act sbaII be governed by tbe provIsIons oI exIstIng IegIsIatIon or In deIauIt
tbereoI, by tbe ruIes oI tbe Iaw mercbant.

Sec. 19?. Repeo1s. - AII acts and Iaws and parts tbereoI InconsIstent wItb
tbIs Act are bereby repeaIed.

Sec. 19S. T1me uen Ao1 1oKes e]]eo1. - TbIs Act sbaII take eIIect nInety
days aIter Its pubIIcatIon In tbe OIIIcIaI Gazette oI tbe PbIIIppIne IsIands
sbaII bave been compIeted.

noo1ed: February 3, 1911