Act No.

2031 (b) by stated installments; or

February 03, 1911
THE NEGOTIABLE INSTRUMENTS LAW (c) by stated installments, with a provision that,
upon default in payment of any installment or of
interest, the whole shall become due; or

I. FORM AND INTERPRETATION (d) with exchange, whether at a fixed rate or at the
current rate; or

Section 1. Form of negotiable instruments. - An (e) with costs of collection or an attorney's fee, in
instrument to be negotiable must conform to the case payment shall not be made at maturity.
following requirements: Sec. 3. When promise is unconditional. - An
unqualified order or promise to pay is unconditional
(a) It must be in writing and signed by the maker or within the meaning of this Act though coupled with:
drawer;
(a) An indication of a particular fund out of which
(b) Must contain an unconditional promise or order reimbursement is to be made or a particular account
to pay a sum certain in money; to be debited with the amount; or

(c) Must be payable on demand, or at a fixed or (b) A statement of the transaction which gives rise
determinable future time; to the instrument.
But an order or promise to pay out of a particular
(d) Must be payable to order or to bearer; and fund is not unconditional.

(e) Where the instrument is addressed to a drawee, Sec. 4. Determinable future time; what constitutes. -
he must be named or otherwise indicated therein An instrument is payable at a determinable future
with reasonable certainty. time, within the meaning of this Act, which is
Sec. 2. What constitutes certainty as to sum. - The expressed to be payable:
sum payable is a sum certain within the meaning of
this Act, although it is to be paid: (a) At a fixed period after date or sight; or

(a) with interest; or (b) On or before a fixed or determinable future time

specified therein; or
 (a) it is not dated; or
(c) On or at a fixed period after the occurrence of a
specified event which is certain to happen, though (b) does not specify the value given, or that any
the time of happening be uncertain. value had been given therefor; or
An instrument payable upon a contingency is not
negotiable, and the happening of the event does not (c) does not specify the place where it is drawn or
cure the defect. the place where it is payable; or

Sec. 5. Ad d i t i o nal p rovi s i o ns not affec t i ng (d) bears a seal; or

negotiability. - An instrument which contains an
order or promise to do any act in addition to the (e) designates a particular kind of current money in
payment of money is not negotiable. But the which payment is to be made.
negotiable character of an instrument otherwise But nothing in this section shall alter or repeal any
negotiable is not affected by a provision which: statute requiring in certain cases the nature of the
consideration to be stated in the instrument.
(a) authorizes the sale of collateral securities in case
the instrument be not paid at maturity; or Sec. 7. When payable on demand. - An instrument is
payable on
(b) authorizes a confession of judgment if the demand:
instrument be not paid at maturity; or
(a) When it is so expressed to be payable on
(c) waives the benefit of any law intended for the demand, or at sight, or on presentation; or
advantage or protection of the obligor; or
(b) In which no time for payment is expressed.
(d) gives the holder an election to require something Where an instrument is issued, accepted, or indorsed
to be done in lieu of payment of money. when overdue, it is, as regards the person so
But nothing in this section shall validate any issuing, accepting, or indorsing it, payable on
provision or stipulation otherwise illegal. demand.

Sec. 6. Omissions; seal; particular money. - The Sec. 8. When payable to order. - The instrument is
validity and negotiable character of an instrument payable to order where it is drawn payable to the
are not affected by the fact that: order of a specified person or to him or his order. It
may be drawn payable to the order of:
 (e) When the only or last indorsement is an
(a) A payee who is not maker, drawer, or drawee; or indorsement in blank.

(b) The drawer or maker; or Sec. 10. Terms, when sufficient. - The instrument
need not follow the language of this Act, but any
(c) The drawee; or terms are sufficient which clearly indicate an
intention to conform to the requirements hereof.
(d) Two or more payees jointly; or
Sec. 11. Date, presumption as to. - Where the
(e) One or some of several payees; or instrument or an acceptance or any indorsement
thereon is dated, such date is deemed prima facie to
(f) The holder of an office for the time being. be the true date of the making, drawing, acceptance,
Where the instrument is payable to order, the payee or indorsement, as the case may be.
must be named or otherwise indicated therein with
reasonable certainty. Sec. 12. Ante-dated and post-dated. - The
instrument is not invalid for the reason only that it is
Sec. 9. When payable to bearer. - The instrument is ante-dated or post-dated, provided this is not done
payable to for an illegal or fraudulent purpose. The person to
bearer: whom an instrument so dated is delivered acquires
the title thereto as of the date of delivery.
(a) When it is expressed to be so payable; or
Sec. 13. When date may be inserted. - Where an
(b) When it is payable to a person named therein or instrument expressed to be payable at a fixed period
bearer; or after date is issued undated, or where the
acceptance of an instrument payable at a fixed
(c) When it is payable to the order of a fictitious or period after sight is undated, any holder may insert
non-existing person, and such fact was known to the therein the true date of issue or acceptance, and the
person making it so payable; or instrument shall be payable accordingly. The
insertion of a wrong date does not avoid the
(d) When the name of the payee does not purport to instrument in the hands of a subsequent holder in
be the name of any due course; but as to him, the date so inserted is to
person; or be regarded as the true date.
Sec. 14. Blanks; when may be filled. - Where the delivery, in order to be effectual, must be made
instrument is wanting in any material particular, the either by or under the authority of the party making,
person in possession thereof has a prima facie drawing, accepting, or indorsing, as the case may
authority to complete it by filling up the blanks be; and, in such case, the delivery may be shown to
therein. And a signature on a blank paper delivered have been conditional, or for a special purpose only,
by the person making the signature in order that the and not for the purpose of transferring the property
paper may be converted into a negotiable instrument in the instrument. But where the instrument is in the
operates as a prima facie authority to fill it up as hands of a holder in due course, a valid delivery
such for any amount. In order, however, that any thereof by all parties prior to him so as to make
such instrument when completed may be enforced them liable to him is conclusively presumed. And
against any person who became a party thereto prior where the instrument is no longer in the possession
to its completion, it must be filled up strictly in of a party whose signature appears thereon, a valid
accordance with the authority given and within a and intentional delivery by him is presumed until the
reasonable time. But if any such instrument, after contrary is proved.
completion, is negotiated to a holder in due course,
it is valid and effectual for all purposes in his hands, Sec. 17. Construction where instrument is
and he may enforce it as if it had been filled up ambiguous. - Where the language of the instrument
strictly in accordance with the authority given and is ambiguous or there are omissions therein, the
within a reasonable time. following rules of construction apply:

Sec. 15. Incomplete instrument not delivered. - (a) Where the sum payable is expressed in words
Where an incomplete instrument has not been and also in figures and there is a discrepancy
delivered, it will not, if completed and negotiated between the two, the sum denoted by the words is
without authority, be a valid contract in the hands of the sum payable; but if the words are ambiguous or
any holder, as against any person whose signature uncertain, reference may be had to the figures to fix
was placed thereon before delivery. the amount;

Sec. 16. Delivery; when effectual; when presumed. - (b) Where the instrument provides for the payment
Every contract on a negotiable instrument is of interest, without specifying the date from which
incomplete and revocable until delivery of the interest is to run, the interest runs from the date of
instrument for the purpose of giving effect thereto. the instrument, and if the instrument is undated,
As between immediate parties and as regards a from the issue thereof;
remote party other than a holder in due course, the
(c) Where the instrument is not dated, it will be the agent may be established as in other cases of
considered to be dated as of the time it was issued; agency.

(d) Where there is a conflict between the written and Sec. 20. Liability of person signing as agent, and so
printed provisions of the instrument, the written forth. - Where the instrument contains or a person
provisions prevail; adds to his signature words indicating that he signs
for or on behalf of a principal or in a representative
(e) Where the instrument is so ambiguous that there capacity, he is not liable on the instrument if he was
is doubt whether it is a bill or note, the holder may duly authorized; but the mere addition of words
treat it as either at his election; describing him as an agent, or as filling a
representative character, without disclosing his
(f) Where a signature is so placed upon the principal, does not exempt him from personal
instrument that it is not clear in what capacity the liability.
person making the same intended to sign, he is to
be deemed an indorser; Sec. 21. Signature by procuration; effect of. - A
signature by "procuration" operates as notice that
(g) Where an instrument containing the word "I the agent has but a limited authority to sign, and the
promise to pay" is signed by two or more persons, principal is bound only in case the agent in so
they are deemed to be jointly and severally liable signing acted within the actual limits of his authority.
thereon.
Sec. 22. Effect of indorsement by infant or
Sec. 18. Liability of person signing in trade or corporation.- The indorsement or assignment of the
assumed name. - No person is liable on the instrument by a corporation or by an infant passes
instrument whose signature does not appear the property therein, notwithstanding that from want
thereon, except as herein otherwise expressly of capacity, the corporation or infant may incur no
provided. But one who signs in a trade or assumed liability thereon.
name will be liable to the same extent as if he had
signed in his own name. Sec. 23. Forged signature; effect of. - When a
signature is forged or made without the authority of
Sec. 19. Signature by agent; authority; how shown. the person whose signature it purports to be, it is
- The signature of any party may be made by a duly wholly inoperative, and no right to retain the
authorized agent. No particular form of appointment instrument, or to give a discharge therefor, or to
is necessary for this purpose; and the authority of enforce payment thereof against any party thereto,
can be acquired through or under such signature, Sec. 28. Effect of want of consideration. - Absence or
unless the party against whom it is sought to enforce failure of consideration is a matter of defense as
such right is precluded from setting up the forgery or against any person not a holder in due course; and
want of authority. partial failure of consideration is a defense pro tanto,
whether the failure is an ascertained and liquidated
amount or otherwise.
II. CONSIDERATION
Sec. 29. Liability of accommodation party. - An
accommodation party is one who has signed the
Sec. 24. Presumption of consideration. - Every instrument as maker, drawer, acceptor, or indorser,
negotiable instrument is deemed prima facie to have without receiving value therefor, and for the purpose
been issued for a valuable consideration; and every of lending his name to some other person. Such a
person whose signature appears thereon to have person is liable on the instrument to a holder for
become a party thereto for value. value, notwithstanding such holder, at the time of
taking the instrument, knew him to be only an
Sec. 25. Value, what constitutes. — Value is any accommodation party.
consideration sufficient to support a simple contract.
An antecedent or pre-existing debt constitutes value;
and is deemed such whether the instrument is III. NEGOTIATION
payable on demand or at a future time.

Sec. 26. What constitutes holder for value. - Where Sec. 30. What constitutes negotiation. - An
value has at any time been given for the instrument, instrument is negotiated when it is transferred from
the holder is deemed a holder for value in respect to one person to another in such manner as to
all parties who become such prior to that time. constitute the transferee the holder thereof. If
payable to bearer, it is negotiated by delivery; if
Sec. 27. When lien on instrument constitutes holder payable to order, it is negotiated by the indorsement
for value. — Where the holder has a lien on the of the holder and completed by delivery.
instrument arising either from contract or by
implication of law, he is deemed a holder for value to Sec. 31. Indorsement; how made. - The
the extent of his lien. indorsement must be written on the instrument itself
or upon a paper attached thereto. The signature of
the indorser, without additional words, is a sufficient Sec. 36. When indorsement restrictive. - An
indorsement. indorsement is restrictive which either:

Sec. 32. Indorsement must be of entire instrument. (a) Prohibits the further negotiation of the
- The indorsement must be an indorsement of the instrument; or
entire instrument. An indorsement which purports to
transfer to the indorsee a part only of the amount (b) Constitutes the indorsee the agent of the
payable, or which purports to transfer the instrument indorser; or
to two or more indorsees severally, does not operate
as a negotiation of the instrument. But where the (c) Vests the title in the indorsee in trust for or to
instrument has been paid in part, it may be indorsed the use of some other persons.
as to the residue. But the mere absence of words implying power to
negotiate does not make an indorsement restrictive.
Sec. 33. Kinds of indorsement. - An indorsement
may be either special or in blank; and it may also be Sec. 37. Effect of restrictive indorsement; rights of
either restrictive or qualified or conditional. indorsee. - A restrictive indorsement confers upon
the indorsee the right:
Sec. 34. Special indorsement; indorsement in blank.
- A special indorsement specifies the person to (a) to receive payment of the instrument;
whom, or to whose order, the instrument is to be
payable, and the indorsement of such indorsee is (b) to bring any action thereon that the indorser
necessary to the further negotiation of the could bring;
instrument. An indorsement in blank specifies no
indorsee, and an instrument so indorsed is payable (c) to transfer his rights as such indorsee, where the
to bearer, and may be negotiated by delivery. form of the indorsement authorizes him to do so.
But all subsequent indorsees acquire only the title of
Sec. 35. Blank indorsement; how changed to special the first indorsee under the restrictive indorsement.
indorsement. - The holder may convert a blank
indorsement into a special indorsement by writing Sec. 38. Qualified indorsement. - A qualified
over the signature of the indorser in blank any indorsement constitutes the indorser a mere
contract consistent with the character of the assignor of the title to the instrument. It may be
indorsement. made by adding to the indorser's signature the
words "without recourse" or any words of similar
import. Such an indorsement does not impair the indorsement of the bank or corporation or the
negotiable character of the instrument. indorsement of the officer.

Sec. 39. Conditional indorsement. - Where an Sec. 43. Indorsement where name is misspelled, and
indorsement is conditional, the party required to pay so forth. - Where the name of a payee or indorsee is
the instrument may disregard the condition and wrongly designated or misspelled, he may indorse
make payment to the indorsee or his transferee the instrument as therein described adding, if he
whether the condition has been fulfilled or not. But thinks fit, his proper signature.
any person to whom an instrument so indorsed is
negotiated will hold the same, or the proceeds Sec. 44. Indorsement in representative capacity. -
thereof, subject to the rights of the person indorsing Where any person is under obligation to indorse in a
conditionally. representative capacity, he may indorse in such
terms as to negative personal liability. robles virtual
Sec. 40. Indorsement of instrument payable to law library
bearer. - Where an instrument, payable to bearer, is
indorsed specially, it may nevertheless be further Sec. 45. Time of indorsement; presumption. - Except
negotiated by delivery; but the person indorsing where an indorsement bears date after the maturity
specially is liable as indorser to only such holders as of the instrument, every negotiation is deemed
make title through his indorsement. prima facie to have been effected before the
instrument was overdue.
Sec. 41. Indorsement where payable to two or more
persons. - Where an instrument is payable to the Sec. 46. Place of indorsement; presumption. -
order of two or more payees or indorsees who are E xc e p t w h e r e t h e c o n t ra r y a p p e a r s , e ve r y
not partners, all must indorse unless the one indorsement is presumed prima facie to have been
indorsing has authority to indorse for the others. made at the place where the instrument is dated.

Sec. 42. Effect of instrument drawn or indorsed to a Sec. 47. Continuation of negotiable character. - An
person as instrument negotiable in its origin continues to be
cashier. - Where an instrument is drawn or indorsed negotiable until it has been restrictively indorsed or
to a person as "cashier" or other fiscal officer of a discharged by payment or otherwise.
bank or corporation, it is deemed prima facie to be
payable to the bank or corporation of which he is Sec. 48. Striking out indorsement. - The holder may
such officer, and may be negotiated by either the at any time strike out any indorsement which is not
necessary to his title. The indorser whose IV. RIGHTS OF THE HOLDER
indorsement is struck out, and all indorsers
subsequent to him, are thereby relieved from liability
on the instrument. Sec. 51. Right of holder to sue; payment. - The
holder of a negotiable instrument may to sue
Sec. 49. Transfer without indorsement; effect of. - thereon in his own name; and payment to him in
Where the holder of an instrument payable to his due course discharges the instrument.
order transfers it for value without indorsing it, the
transfer vests in the transferee such title as the Sec. 52. What constitutes a holder in due course. - A
transferor had therein, and the transferee acquires in holder in due course is a holder who has taken the
addition, the right to have the indorsement of the instrument under the following conditions:
transferor. But for the purpose of determining
whether the transferee is a holder in due course, the (a) That it is complete and regular upon its face;
negotiation takes effect as of the time when the
indorsement is actually made. (b) That he became the holder of it before it was
overdue, and without notice that it has been
Sec. 50. When prior party may negotiate instrument. previously dishonored, if such was the fact;
- Where an instrument is negotiated back to a prior
party, such party may, subject to the provisions of (c) That he took it in good faith and for value;
this Act, reissue and further negotiable the same.
But he is not entitled to enforce payment thereof (d) That at the time it was negotiated to him, he had
against any intervening party to whom he was no notice of any infirmity in the instrument or defect
personally liable. in the title of the person negotiating it.
Sec. 53. When person not deemed holder in due
course. - Where an instrument payable on demand is
negotiated on an unreasonable length of time after
its issue, the holder is not deemed a holder in due
course.

Sec. 54. Notice before full amount is paid. - Where

the transferee receives notice of any infirmity in the
instrument or defect in the title of the person
negotiating the same before he has paid the full
amount agreed to be paid therefor, he will be course, and who is not himself a party to any fraud
deemed a holder in due course only to the extent of or illegality affecting the instrument, has all the
the amount therefore paid by him. rights of such former holder in respect of all parties
prior to the latter.
Sec. 55. When title defective. - The title of a person
who negotiates an instrument is defective within the Sec. 59. Who is deemed holder in due course. -
meaning of this Act when he obtained the Every holder is deemed prima facie to be a holder in
instrument, or any signature thereto, by fraud, due course; but when it is shown that the title of any
duress, or force and fear, or other unlawful means, person who has negotiated the instrument was
or for an illegal consideration, or when he negotiates defective, the burden is on the holder to prove that
it in breach of faith, or under such circumstances as he or some person under whom he claims acquired
amount to a fraud. the title as holder in due course. But the last-
mentioned rule does not apply in favor of a party
Sec. 56. What constitutes notice of defect. - To who became bound on the instrument prior to the
constitutes notice of an infirmity in the instrument or acquisition of such defective title.
defect in the title of the person negotiating the
same, the person to whom it is negotiated must
have had actual knowledge of the infirmity or defect,
or knowledge of such facts that his action in taking V. LIABILITIES OF PARTIES
the instrument amounted to bad faith.

Sec. 57. Rights of holder in due course. - A holder in Sec. 60. Liability of maker. - The maker of a
due course holds the instrument free from any negotiable instrument, by making it, engages that he
defect of title of prior parties, and free from defenses will pay it according to its tenor, and admits the
available to prior parties among themselves, and existence of the payee and his then capacity to
may enforce payment of the instrument for the full indorse.
amount thereof against all parties liable thereon.
Sec. 61. Liability of drawer. - The drawer by drawing
Sec. 58. When subject to original defense. - In the the instrument admits the existence of the payee
hands of any holder other than a holder in due and his then capacity to indorse; and engages that,
course, a negotiable instrument is subject to the on due presentment, the instrument will be accepted
same defenses as if it were non-negotiable. But a or paid, or both, according to its tenor, and that if it
holder who derives his title through a holder in due be dishonored and the necessary proceedings on
dishonor be duly taken, he will pay the amount
thereof to the holder or to any subsequent indorser (b) If the instrument is payable to the order of the
who may be compelled to pay it. But the drawer may maker or drawer, or is payable to bearer, he is liable
insert in the instrument an express stipulation to all parties subsequent to the maker or drawer.
negativing or limiting his own liability to the holder.
(c) If he signs for the accommodation of the payee,
Sec. 62. Liability of acceptor. - The acceptor, by he is liable to all parties subsequent to the payee.
accepting the instrument, engages that he will pay it
according to the tenor of his acceptance and admits: Sec. 65. Warranty where negotiation by delivery and
so forth. — Every person negotiating an instrument
(a) The existence of the drawer, the genuineness of by delivery or by a qualified indorsement warrants:
his signature, and his capacity and authority to draw
the instrument; and (a) That the instrument is genuine and in all respects
what it purports to be;
(b) The existence of the payee and his then capacity
to indorse. (b) That he has a good title to it;

Sec. 63. When a person deemed indorser. - A person (c) That all prior parties had capacity to contract;
placing his signature upon an instrument otherwise
than as maker, drawer, or acceptor, is deemed to be (d) That he has no knowledge of any fact which
indorser unless he clearly indicates by appropriate would impair the validity of the instrument or render
words his intention to be bound in some other it valueless.
capacity.
But when the negotiation is by delivery only, the
Sec. 64. Liability of irregular indorser. - Where a warranty extends in favor of no holder other than
person, not otherwise a party to an instrument, the immediate transferee.
places thereon his signature in blank before delivery,
he is liable as indorser, in accordance with the The provisions of subdivision (c) of this section do
following rules: not apply to a person negotiating public or
corporation securities other than bills and notes.
(a) If the instrument is payable to the order of a
third person, he is liable to the payee and to all
subsequent parties.
Sec. 66. Liability of general indorser. - Every Sec. 69. Liability of an agent or broker. - Where a
indorser who indorses without qualification, warrants broker or other agent negotiates an instrument
to all subsequent holders in due course: without indorsement, he incurs all the liabilities
prescribed by Section Sixty-five of this Act, unless he
(a) The matters and things mentioned in discloses the name of his principal and the fact that
subdivisions (a), (b), and (c) of the next preceding he is acting only as agent.
section; and

(b) That the instrument is, at the time of his

indorsement, valid and subsisting; VI. PRESENTATION FOR PAYMENT

And, in addition, he engages that, on due Sec. 70. Effect of want of demand on principal
presentment, it shall be accepted or paid, or both, as debtor. - Presentment for payment is not necessary
the case may be, according to its tenor, and that if it in order to charge the person primarily liable on the
be dishonored and the necessary proceedings on instrument; but if the instrument is, by its terms,
dishonor be duly taken, he will pay the amount payable at a special place, and he is able and willing
thereof to the holder, or to any subsequent indorser to pay it there at maturity, such ability and
who may be compelled to pay it. willingness are equivalent to a tender of payment
upon his part. But except as herein otherwise
Sec. 67. Liability of indorser where paper negotiable provided, presentment for payment is necessary in
by delivery. — Where a person places his order to charge the drawer and indorsers.
indorsement on an instrument negotiable by
delivery, he incurs all the liability of an indorser. Sec. 71. Presentment where instrument is not
payable on demand and where payable on demand.
Sec. 68. Order in which indorsers are liable. - As - Where the instrument is not payable on demand,
respect one another, indorsers are liable prima facie presentment must be made on the day it falls due.
in the order in which they indorse; but evidence is Where it is payable on demand, presentment must
admissible to show that, as between or among be made within a reasonable time after its issue,
themselves, they have agreed otherwise. Joint except that in the case of a bill of exchange,
payees or joint indorsees who indorse are deemed to presentment for payment will be sufficient if made
indorse jointly and severally. within a reasonable time after the last negotiation
thereof.
Sec. 72. What constitutes a sufficient presentment. - presented at his last known place of business or
Presentment for payment, to be sufficient, must be residence.
made: Sec. 74. Instrument must be exhibited. - The
instrument must be exhibited to the person from
(a) By the holder, or by some person authorized to whom payment is demanded, and when it is paid,
receive payment on his behalf; must be delivered up to the party paying it.

(b) At a reasonable hour on a business day; Sec. 75. Presentment where instrument payable at
bank. - Where the instrument is payable at a bank,
(c) At a proper place as herein defined; presentment for payment must be made during
banking hours, unless the person to make payment
(d) To the person primarily liable on the instrument, has no funds there to meet it at any time during the
or if he is absent or inaccessible, to any person day, in which case presentment at any hour before
found at the place where the presentment is made. the bank is closed on that day is sufficient.

Sec. 73. Place of presentment. - Presentment for Sec. 76. Presentment where principal debtor is dead.
payment is made at the proper place: - Where the person primarily liable on the
instrument is dead and no place of payment is
(a) Where a place of payment is specified in the specified, presentment for payment must be made to
instrument and it is there presented; his personal representative, if such there be, and if,
with the exercise of reasonable diligence, he can be
(b) Where no place of payment is specified but the found.
address of the person to make payment is given in
the instrument and it is there presented; Sec. 77. Presentment to persons liable as partners. -
Where the persons primarily liable on the instrument
(c) Where no place of payment is specified and no are liable as partners and no place of payment is
address is given and the instrument is presented at specified, presentment for payment may be made to
the usual place of business or residence of the any one of them, even though there has been a
person to make payment; dissolution of the firm.

(d) In any other case if presented to the person to Sec. 78. Presentment to joint debtors. - Where there
make payment wherever he can be found, or if are several persons, not partners, primarily liable on
the instrument and no place of payment is specified,
presentment must be made to them all. (c) By waiver of presentment, express or implied.
Sec. 83. When instrument dishonored by non-
Sec. 79. When presentment not required to charge payment. - The instrument is dishonored by non-
the drawer. -Presentment for payment is not payment when:
required in order to charge the drawer where he has
no right to expect or require that the drawee or (a) It is duly presented for payment and payment is
acceptor will pay the instrument. refused or cannot be obtained; or

Sec. 80. When presentment not required to charge (b) Presentment is excused and the instrument is
the indorser. -Presentment is not required in order overdue and unpaid.
to charge an indorser where the instrument was
made or accepted for his accommodation and he has Sec. 84. Liability of person secondarily liable, when
no reason to expect that the instrument will be paid instrument dishonored. - Subject to the provisions of
if presented. this Act, when the instrument is dishonored by non-
payment, an immediate right of recourse to all
Sec. 81. When delay in making presentment is parties secondarily liable thereon accrues to the
excused. - Delay in making presentment for holder.
payment is excused when the delay is caused by
circumstances beyond the control of the holder and Sec. 85. Time of maturity. - Every negotiable
not imputable to his default, misconduct, or instrument is payable at the time fixed therein
negligence. When the cause of delay ceases to without grace. When the day of maturity falls upon
operate, presentment must be made with reasonable Sunday or a holiday, the instruments falling due or
diligence. becoming payable on Saturday are to be presented
for payment on the next succeeding business day
Sec. 82. When presentment for payment is excused. except that instruments payable on demand may, at
- Presentment for payment is excused: the option of the holder, be presented for payment
before twelve o'clock noon on Saturday when that
(a) Where, after the exercise of reasonable diligence, entire day is not a holiday.
presentment, as required by this Act, cannot be
made; Sec. 86. Time; how computed. - When the
instrument is payable at a fixed period after date,
(b) Where the drawee is a fictitious person; after sight, or after that happening of a specified
event, the time of payment is determined by would have a right to reimbursement from the party
excluding the day from which the time is to begin to to whom the notice is given.
run, and by including the date of payment.
Sec. 91. Notice given by agent. - Notice of dishonor
Sec. 87. Rule where instrument payable at bank. - may be given by any agent either in his own name
Where the instrument is made payable at a bank, it or in the name of any party entitled to given notice,
is equivalent to an order to the bank to pay the whether that party be his principal or not.
same for the account of the principal debtor thereon.
Sec. 92. Effect of notice on behalf of holder. - Where
Sec. 88. What constitutes payment in due course. - notice is given by or on behalf of the holder, it inures
Payment is made in due course when it is made at or to the benefit of all subsequent holders and all prior
after the maturity of the payment to the holder parties who have a right of recourse against the
thereof in good faith and without notice that his title party to whom it is given.
is defective.
Sec. 93. Effect where notice is given by party
entitled thereto. - Where notice is given by or on
behalf of a party entitled to give notice, it inures to
VII. NOTICE OF DISHONOR the benefit of the holder and all parties subsequent
to the party to whom notice is given.

Sec. 89. To whom notice of dishonor must be given. Sec. 94. When agent may give notice. - Where the
- Except as herein otherwise provided, when a instrument has been dishonored in the hands of an
negotiable instrument has been dishonored by non- agent, he may either himself give notice to the
acceptance or non-payment, notice of dishonor must parties liable thereon, or he may give notice to his
be given to the drawer and to each indorser, and any principal. If he gives notice to his principal, he must
drawer or indorser to whom such notice is not given do so within the same time as if he were the holder,
is discharged. and the principal, upon the receipt of such notice,
has himself the same time for giving notice as if the
Sec. 90. By whom given. - The notice may be given agent had been an independent holder.
by or on behalf of the holder, or by or on behalf of
any party to the instrument who might be compelled Sec. 95. When notice sufficient. - A written notice
to pay it to the holder, and who, upon taking it up, need not be signed and an insufficient written notice
may be supplemented and validated by verbal
communication. A misdescription of the instrument each of them unless one of them has authority to
does not vitiate the notice unless the party to whom receive such notice for the others.
the notice is given is in fact misled thereby.
Sec. 101. Notice to bankrupt. - Where a party has
Sec. 96. Form of notice. - The notice may be in been adjudged a bankrupt or an insolvent, or has
writing or merely oral and may be given in any terms made an assignment for the benefit of creditors,
which sufficiently identify the instrument, and notice may be given either to the party himself or to
indicate that it has been dishonored by non- his trustee or assignee.
acceptance or non-payment. It may in all cases be
given by delivering it personally or through the Sec. 102. Time within which notice must be given. -
mails. Notice may be given as soon as the instrument is
dishonored and, unless delay is excused as
Sec. 97. To whom notice may be given. - Notice of hereinafter provided, must be given within the time
dishonor may be given either to the party himself or fixed by this Act.
to his agent in that behalf.
Sec. 103. Where parties reside in same place. -
Sec. 98. Notice where party is dead. - When any Where the person giving and the person to receive
party is dead and his death is known to the party notice reside in the same place, notice must be given
giving notice, the notice must be given to a personal within the following times:
representative, if there be one, and if with
reasonable diligence, he can be found. If there be no (a) If given at the place of business of the person to
personal representative, notice may be sent to the receive notice, it must be given before the close of
last residence or last place of business of the business hours on the day following.
deceased.
(b) If given at his residence, it must be given before
Sec. 99. Notice to partners. - Where the parties to the usual hours of rest on the day following.
be notified are partners, notice to any one partner is
notice to the firm, even though there has been a (c) If sent by mail, it must be deposited in the post
dissolution. office in time to reach him in usual course on the day
following.
Sec. 100. Notice to persons jointly liable. - Notice to Sec. 104. Where parties reside in different places. -
joint persons who are not partners must be given to Where the person giving and the person to receive
notice reside in different places, the notice must be Sec. 108. Where notice must be sent. - Where a
given within the following times: party has added an address to his signature, notice
of dishonor must be sent to that address; but if he
(a) If sent by mail, it must be deposited in the post has not given such address, then the notice must be
office in time to go by mail the day following the day sent as follows:
of dishonor, or if there be no mail at a convenient
hour on last day, by the next mail thereafter. (a) Either to the post-office nearest to his place of
residence or to the post-office where he is
(b) If given otherwise than through the post office, accustomed to receive his letters; or
then within the time that notice would have been
received in due course of mail, if it had been (b) If he lives in one place and has his place of
deposited in the post office within the time specified business in another, notice may be sent to either
in the last subdivision. place; or

Sec. 105. When sender deemed to have given due (c) If he is sojourning in another place, notice may
notice. - Where notice of dishonor is duly addressed be sent to the place where he is so sojourning.
and deposited in the post office, the sender is But where the notice is actually received by the
deemed to have given due notice, notwithstanding party within the time specified in this Act, it will be
any miscarriage in the mails. sufficient, though not sent in accordance with the
requirement of this section.
Sec. 106. Deposit in post office; what constitutes. -
Notice is deemed to have been deposited in the Sec. 109. Waiver of notice. - Notice of dishonor may
post-office when deposited in any branch post office be waived either before the time of giving notice has
or in any letter box under the control of the post- arrived or after the omission to give due notice, and
office department. the waiver may be expressed or implied.

Sec. 107. Notice to subsequent party; time of. - Sec. 110. Whom affected by waiver. - Where the
Where a party receives notice of dishonor, he has, waiver is embodied in the instrument itself, it is
after the receipt of such notice, the same time for binding upon all parties; but, where it is written
giving notice to antecedent parties that the holder above the signature of an indorser, it binds him only.
has after the dishonor.
Sec. 111. Waiver of protest. - A waiver of protest,
whether in the case of a foreign bill of exchange or
other negotiable instrument, is deemed to be a
waiver not only of a formal protest but also of (e) Where the drawer has countermanded payment.
presentment and notice of dishonor. Sec. 115. When notice need not be given to
indorser. — Notice of dishonor is not required to be
Sec. 112. When notice is dispensed with. - Notice of given to an indorser in either of the following cases:
dishonor is dispensed with when, after the exercise
of reasonable diligence, it cannot be given to or does (a) When the drawee is a fictitious person or person
not reach the parties sought to be charged. not having capacity to contract, and the indorser was
aware of that fact at the time he indorsed the
Sec. 113. Delay in giving notice; how excused. - instrument;
Delay in giving notice of dishonor is excused when
the delay is caused by circumstances beyond the (b) Where the indorser is the person to whom the
control of the holder and not imputable to his instrument is presented for payment;
default, misconduct, or negligence. When the cause
of delay ceases to operate, notice must be given (c) Where the instrument was made or accepted for
with reasonable diligence. his accommodation.

Sec. 114. When notice need not be given to drawer. Sec. 116. Notice of non-payment where acceptance
- Notice of dishonor is not required to be given to refused. - Where due notice of dishonor by non-
the drawer in either of the following cases: acceptance has been given, notice of a subsequent
dishonor by non-payment is not necessary unless in
(a) Where the drawer and drawee are the same the meantime the instrument has been accepted.
person;
Sec. 117. Effect of omission to give notice of non-
(b) When the drawee is fictitious person or a person acceptance. - An omission to give notice of dishonor
not having capacity to contract; by non-acceptance does not prejudice the rights of a
holder in due course subsequent to the omission.
(c) When the drawer is the person to whom the
instrument is presented for payment; Sec. 118. When protest need not be made; when
must be made. - Where any negotiable instrument
(d) Where the drawer has no right to expect or has been dishonored, it may be protested for non-
require that the drawee or acceptor will honor the acceptance or non-payment, as the case may be;
instrument;
but protest is not required except in the case of (a) By any act which discharges the instrument;
foreign bills of exchange.
(b) By the intentional cancellation of his signature by
the holder;

VIII. DISCHARGE OF NEGOTIABLE (c) By the discharge of a prior party;

INSTRUMENTS (d) By a valid tender or payment made by a prior
party;

Sec. 119. Instrument; how discharged. - A (e) By a release of the principal debtor unless the
negotiable instrument is discharged: holder's right of recourse against the party
secondarily liable is expressly reserved;
(a) By payment in due course by or on behalf of the
principal debtor; (f) By any agreement binding upon the holder to
extend the time of payment or to postpone the
(b) By payment in due course by the party holder's right to enforce the instrument unless made
accommodated, where the instrument is made or with the assent of the party secondarily liable or
accepted for his accommodation; unless the right of recourse against such party is
expressly reserved.
(c) By the intentional cancellation thereof by the
holder; Sec. 121. Right of party who discharges instrument.
- Where the instrument is paid by a party
(d) By any other act which will discharge a simple secondarily liable thereon, it is not discharged; but
contract for the payment of money; the party so paying it is remitted to his former rights
as regard all prior parties, and he may strike out his
(e) When the principal debtor becomes the holder of own and all subsequent indorsements and against
the instrument at or after maturity in his own right. negotiate the instrument, except:

Sec. 120. When persons secondarily liable on the (a) Where it is payable to the order of a third person
instrument are discharged. - A person secondarily and has been paid by the drawer; and
liable on the instrument is discharged:
(b) Where it was made or accepted for
accommodation and has been paid by the party party to the alteration, he may enforce payment
accommodated. thereof according to its original tenor.
Sec. 122. Renunciation by holder. - The holder may
expressly renounce his rights against any party to Sec. 125. What constitutes a material alteration. -
the instrument before, at, or after its maturity. An Any alteration which changes:
absolute and unconditional renunciation of his rights
against the principal debtor made at or after the (a) The date;
m a t u r i ty o f t h e i n s t r u m e n t d i s c h a r g e s t h e
instrument. But a renunciation does not affect the (b) The sum payable, either for principal or interest;
rights of a holder in due course without notice. A
renunciation must be in writing unless the (c) The time or place of payment:
instrument is delivered up to the person primarily
liable thereon. (d) The number or the relations of the parties;

Sec. 123. Cancellation; unintentional; burden of (e) The medium or currency in which payment is to
proof. - A cancellation made unintentionally or under be made;
a mistake or without the authority of the holder, is
inoperative but where an instrument or any (f) Or which adds a place of payment where no place
signature thereon appears to have been cancelled, of payment is specified, or any other change or
the burden of proof lies on the party who alleges addition which alters the effect of the instrument in
that the cancellation was made unintentionally or any respect, is a material alteration.
under a mistake or without authority. BILLS OF EXCHANGE

Sec. 124. Alteration of instrument; effect of. - Where

a negotiable instrument is materially altered without
the assent of all parties liable thereon, it is avoided,
except as against a party who has himself made,
authorized, or assented to the alteration and
subsequent indorsers.

But when an instrument has been materially altered

and is in the hands of a holder in due course not a
 IX. FORM AND INTERPRETATION 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
Sec. 126. Bill of exchange, defined. - A bill of either as a bill of exchange or as a promissory note.
exchange is an unconditional order in writing
addressed by one person to another, signed by the Sec. 131. Referee in case of need. - The drawer of a
person giving it, requiring the person to whom it is bill and any indorser may insert thereon the name of
addressed to pay on demand or at a fixed or a person to whom the holder may resort in case of
determinable future time a sum certain in money to need; that is to say, in case the bill is dishonored by
order or to bearer. non-acceptance or non-payment. Such person is
called a referee in case of need. It is in the option of
Sec. 127. Bill not an assignment of funds in hands of the holder to resort to the referee in case of need or
drawee. - A bill of itself does not operate as an not as he may see fit.
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. X. ACCEPTANCE

Sec. 128. Bill addressed to more than one drawee. -

A bill may be addressed to two or more drawees Sec. 132. Acceptance; how made, by and so forth. -
jointly, whether they are partners or not; but not to The acceptance of a bill is the signification by the
two or more drawees in the alternative or in drawee of his assent to the order of the drawer. The
succession. acceptance must be in writing and signed by the
drawee. It must not express that the drawee will
Sec. 129. Inland and foreign bills of exchange. - An perform his promise by any other means than the
inland bill of exchange is a bill which is, or on its face payment of money.
purports to be, both drawn and payable within the
Philippines. Any other bill is a foreign bill. Unless the Sec. 133. Holder entitled to acceptance on face of
contrary appears on the face of the bill, the holder bill. - The holder of a bill presenting the same for
may treat it as an inland bill. acceptance may require that the acceptance be
written on the bill, and, if such request is refused,
Sec. 130. When bill may be treated as promissory may treat the bill as dishonored.
note. - Where in a bill the drawer and drawee are
Sec. 134. Acceptance by separate instrument. - in the absence of any different agreement, is entitled
Where an acceptance is written on a paper other to have the bill accepted as of the date of the first
than the bill itself, it does not bind the acceptor presentment.
except in favor of a person to whom it is shown and
who, on the faith thereof, receives the bill for value. Sec. 139. Kinds of acceptance. - An acceptance is
either general or qualified. A general acceptance
Sec. 135. Promise to accept; when equivalent to assents without qualification to the order of the
acceptance. - An unconditional promise in writing to drawer. A qualified acceptance in express terms
accept a bill before it is drawn is deemed an actual varies the effect of the bill as drawn.
acceptance in favor of every person who, upon the
faith thereof, receives the bill for value. Sec. 140. What constitutes a general acceptance. -
An acceptance to pay at a particular place is a
Sec. 136. Time allowed drawee to accept. - The general acceptance unless it expressly states that
d raw e e i s a l l o w e d t w e n ty- f o u r h o u r s a f t e r the bill is to be paid there only and not elsewhere.
presentment in which to decide whether or not he
will accept the bill; the acceptance, if given, dates as Sec. 141. Qualified acceptance. - An acceptance is
of the day of presentation. qualified which is:

Sec. 137. Liability of drawee returning or destroying (a) Conditional; that is to say, which makes payment
bill. - Where a drawee to whom a bill is delivered for by the acceptor dependent on the fulfillment of a
acceptance destroys the same, or refuses within condition therein stated;
twenty-four hours after such delivery or within such
other period as the holder may allow, to return the (b) Partial; that is to say, an acceptance to pay part
bill accepted or non-accepted to the holder, he will only of the amount for which the bill is drawn;
be deemed to have accepted the same.
(c) Local; that is to say, an acceptance to pay only at
Sec. 138. Acceptance of incomplete bill. - A bill may a particular place;
be accepted before it has been signed by the drawer,
or while otherwise incomplete, or when it is overdue, (d) Qualified as to time;
or after it has been dishonored by a previous refusal
to accept, or by non payment. But when a bill (e) The acceptance of some, one or more of the
payable after sight is dishonored by non-acceptance drawees but not of all.
and the drawee subsequently accepts it, the holder,
Sec. 142. Rights of parties as to qualified In no other case is presentment for acceptance
acceptance. - The holder may refuse to take a necessary in order to render any party to the bill
qualified acceptance and if he does not obtain an liable.
unqualified acceptance, he may treat the bill as
dishonored by non-acceptance. Where a qualified Sec. 144. When failure to present releases drawer
acceptance is taken, the drawer and indorsers are and indorser. - Except as herein otherwise provided,
discharged from liability on the bill unless they have the holder of a bill which is required by the next
expressly or impliedly authorized the holder to take preceding section to be presented for acceptance
a qualified acceptance, or subsequently assent must either present it for acceptance or negotiate it
thereto. When the drawer or an indorser receives within a reasonable time. If he fails to do so, the
notice of a qualified acceptance, he must, within a drawer and all indorsers are discharged.
reasonable time, express his dissent to the holder or
he will be deemed to have assented thereto. Sec. 145. Presentment; how made. - Presentment
for acceptance must be made by or on behalf of the
holder at a reasonable hour, on a business day and
before the bill is overdue, to the drawee or some
person authorized to accept or refuse acceptance on
XI. PRESENTMENT FOR ACCEPTANCE his behalf; and
(a) Where a bill is addressed to two or more drawees
who are not partners, presentment must be made to
Sec. 143. When presentment for acceptance must be them all unless one has authority to accept or refuse
made. - Presentment for acceptance must be made: acceptance for all, in which case presentment may
be made to him only;
(a) Where the bill is payable after sight, or in any
other case, where presentment for acceptance is (b) Where the drawee is dead, presentment may be
necessary in order to fix the maturity of the made to his personal representative;
instrument; or
(c) Where the drawee has been adjudged a bankrupt
(b) Where the bill expressly stipulates that it shall be or an insolvent or has made an assignment for the
presented for acceptance; or benefit of creditors, presentment may be made to
him or to his trustee or assignee.
(c) Where the bill is drawn payable elsewhere than
at the residence or place of business of the drawee.
Sec. 146. On what days presentment may be made. Sec. 149. When dishonored by nonacceptance. - A
- A bill may be presented for acceptance on any day bill is dishonored by non-acceptance:
on which negotiable instruments may be presented
for payment under the provisions of Sections (a) When it is duly presented for acceptance and
seventy-two and eighty-five of this Act. When such an acceptance as is prescribed by this Act is
Saturday is not otherwise a holiday, presentment for refused or can not be obtained; or
acceptance may be made before twelve o'clock noon
on that day. (b) When presentment for acceptance is excused
and the bill is not accepted.
Sec. 147. Presentment where time is insufficient. -
Where the holder of a bill drawn payable elsewhere Sec. 150. Duty of holder where bill not accepted. -
than at the place of business or the residence of the Where a bill is duly presented for acceptance and is
drawee has no time, with the exercise of reasonable not accepted within the prescribed time, the person
diligence, to present the bill for acceptance before presenting it must treat the bill as dishonored by
presenting it for payment on the day that it falls due, nonacceptance or he loses the right of recourse
the delay caused by presenting the bill for against the drawer and indorsers.
acceptance before presenting it for payment is
excused and does not discharge the drawers and Sec. 151. Rights of holder where bill not accepted. -
indorsers. When a bill is dishonored by nonacceptance, an
Sec. 148. Where presentment is excused. - immediate right of recourse against the drawer and
Presentment for acceptance is excused and a bill indorsers accrues to the holder and no presentment
may be treated as dishonored by non-acceptance in for payment is necessary.
either of the following cases:

(a) Where the drawee is dead, or has absconded, or

is a fictitious person or a person not having capacity
to contract by bill.

(b) Where, after the exercise of reasonable diligence,

presentment can not be made.

(c) Where, although presentment has been irregular,

acceptance has been refused on some other ground.
 XII. PROTEST (a) A notary public; or
(b) By any respectable resident of the place where
Sec. 152. In what cases protest necessary. - Where the bill is dishonored, in the presence of two or more
a foreign bill appearing on its face to be such is credible witnesses.
dishonored by nonacceptance, it must be duly
protested for nonacceptance, by nonacceptance is Sec. 155. Protest; when to be made. - When a bill is
dishonored and where such a bill which has not protested, such protest must be made on the day of
previously been dishonored by nonpayment, it must its dishonor unless delay is excused as herein
be duly protested for nonpayment. If it is not so provided. When a bill has been duly noted, the
protested, the drawer and indorsers are discharged. protest may be subsequently extended as of the
Where a bill does not appear on its face to be a date of the noting.
foreign bill, protest thereof in case of dishonor is
unnecessary. Sec. 156. Protest; where made. - A bill must be
protested at the place where it is dishonored, except
Sec. 153. Protest; how made. - The protest must be that when a bill drawn payable at the place of
annexed to the bill or must contain a copy thereof, business or residence of some person other than the
and must be under the hand and seal of the notary drawee has been dishonored by nonacceptance, it
making it and must specify: must be protested for non-payment at the place
where it is expressed to be payable, and no further
(a) The time and place of presentment; presentment for payment to, or demand on, the
drawee is necessary.
(b) The fact that presentment was made and the
manner thereof; Sec. 157. Protest both for non-acceptance and non-
payment. - A bill which has been protested for non-
(c) The cause or reason for protesting the bill; acceptance may be subsequently protested for non-
payment.
(d) The demand made and the answer given, if any,
or the fact that the drawee or acceptor could not be Sec. 158. Protest before maturity where acceptor
found. insolvent. - Where the acceptor has been adjudged a
Sec. 154. Protest, by whom made. - Protest may be bankrupt or an insolvent or has made an assignment
made by: 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.
 one party, there may be a further acceptance by a
Sec. 159. When protest dispensed with. - Protest is different person for the honor of another party.
dispensed with by any circumstances which would
dispense with notice of dishonor. Delay in noting or Sec. 162. Acceptance for honor; how made. - An
protesting is excused when delay is caused by acceptance for honor supra protest must be in
circumstances beyond the control of the holder and writing and indicate that it is an acceptance for
not imputable to his default, misconduct, or honor and must be signed by the acceptor for honor.
negligence. When the cause of delay ceases to
operate, the bill must be noted or protested with Sec. 163. When deemed to be an acceptance for
reasonable diligence. honor of the drawer. - Where an acceptance for
honor does not expressly state for whose honor it is
Sec. 160. Protest where bill is lost and so forth. - made, it is deemed to be an acceptance for the
When a bill is lost or destroyed or is wrongly honor of the drawer.
detained from the person entitled to hold it, protest
may be made on a copy or written particulars Sec. 164. Liability of the acceptor for honor. - The
thereof. acceptor for honor is liable to the holder and to all
parties to the bill subsequent to the party for whose
honor he has accepted.
XIII. ACCEPTANCE FOR HONOR
Sec. 165. Agreement of acceptor for honor. - The
acceptor for honor, by such acceptance, engages
Sec. 161. When bill may be accepted for honor. - that he will, on due presentment, pay the bill
When a bill of exchange has been protested for according to the terms of his acceptance provided it
dishonor by non-acceptance or protested for better shall not have been paid by the drawee and provided
security and is not overdue, any person not being a also that is shall have been duly presented for
party already liable thereon may, with the consent of payment and protested for non-payment and notice
the holder, intervene and accept the bill supra of dishonor given to him.
protest for the honor of any party liable thereon or
for the honor of the person for whose account the Sec. 166. Maturity of bill payable after sight;
bill is drawn. The acceptance for honor may be for accepted for honor. - Where a bill payable after sight
part only of the sum for which the bill is drawn; and is accepted for honor, its maturity is calculated from
where there has been an acceptance for honor for the date of the noting for non-acceptance and not
from the date of the acceptance for honor.
 XIV. PAYMENT FOR HONOR
Sec. 167. Protest of bill accepted for honor, and so
forth. - Where a dishonored bill has been accepted
for honor supra protest or contains a referee in case Sec. 171. Who may make payment for honor. -
of need, it must be protested for non-payment Where a bill has been protested for non-payment,
before it is presented for payment to the acceptor any person may intervene and pay it supraprotest
for honor or referee in case of need. for the honor of any person liable thereon or for the
honor of the person for whose account it was drawn.
Sec. 168. Presentment for payment to acceptor for
honor, how made. - Presentment for payment to the Sec. 172. Payment for honor; how made. - The
acceptor for honor must be made as follows: payment for honor supra protest, in order to operate
as such and not as a mere voluntary payment, must
(a) If it is to be presented in the place where the be attested by a notarial act of honor which may be
protest for non-payment was made, it must be appended to the protest or form an extension to it.
presented not later than the day following its
maturity. Sec. 173. Declaration before payment for honor. -
The notarial act of honor must be founded on a
(b) If it is to be presented in some other place than declaration made by the payer for honor or by his
the place where it was protested, then it must be agent in that behalf declaring his intention to pay the
forwarded within the time specified in Section one bill for honor and for whose honor he pays.
hundred and four.
Sec. 174. Preference of parties offering to pay for
Sec. 169. When delay in making presentment is honor. - Where two or more persons offer to pay a
excused. - The provisions of Section eighty-one bill for the honor of different parties, the person
apply where there is delay in making presentment to whose payment will discharge most parties to the bill
the acceptor for honor or referee in case of need. is to be given the preference.

Sec. 170. Dishonor of bill by acceptor for honor. - Sec. 175. Effect on subsequent parties where bill is
When the bill is dishonored by the acceptor for paid for honor. - Where a bill has been paid for
honor, it must be protested for non-payment by him. honor, all parties subsequent to the party for whose
honor it is paid are discharged but the payer for
honor is subrogated for, and succeeds to, both the
rights and duties of the holder as regards the party
for whose honor he pays and all parties liable to the Sec. 180. Liability of holder who indorses two or
latter. more parts of a set to different persons. - Where the
holder of a set indorses two or more parts to
Sec. 176. Where holder refuses to receive payment different persons he is liable on every such part, and
supra protest. -Where the holder of a bill refuses to every indorser subsequent to him is liable on the
receive payment supra protest, he loses his right of part he has himself indorsed, as if such parts were
recourse against any party who would have been separate bills.
discharged by such payment.
Sec. 181. Acceptance of bill drawn in sets. - The
Sec. 177. Rights of payer for honor. - The payer for acceptance may be written on any part and it must
honor, on paying to the holder the amount of the bill be written on one part only. If the drawee accepts
and the notarial expenses incidental to its dishonor, more than one part and such accepted parts
is entitled to receive both the bill itself and the negotiated to different holders in due course, he is
protest. liable on every such part as if it were a separate bill.

Sec. 182. Payment by acceptor of bills drawn in sets.

XV. BILLS IN SET - When the acceptor of a bill drawn in a set pays it
without requiring the part bearing his acceptance to
be delivered up to him, and the part at maturity is
Sec. 178. Bills in set constitute one bill. - Where a outstanding in the hands of a holder in due course,
bill is drawn in a set, each part of the set being he is liable to the holder thereon.
numbered and containing a reference to the other
parts, the whole of the parts constitutes one bill. Sec. 183. Effect of discharging one of a set. - Except
as herein otherwise provided, where any one part of
Sec. 179. Right of holders where different parts are a bill drawn in a set is discharged by payment or
negotiated. - Where two or more parts of a set are otherwise, the whole bill is discharged.
negotiated to different holders in due course, the
holder whose title first accrues is, as between such
holders, the true owner of the bill. But nothing in
this section affects the right of a person who, in due
course, accepts or pays the parts first presented to
him.
 XVI. PROMISSORY NOTES AND CHECKS Sec. 189. When check operates as an assignment. -
A check of itself does not operate as an assignment
Sec. 184. Promissory note, defined. - A negotiable of any part of the funds to the credit of the drawer
promissory note within the meaning of this Act is an with the bank, and the bank is not liable to the
unconditional promise in writing made by one person holder unless and until it accepts or certifies the
to another, signed by the maker, engaging to pay on check.
demand, or at a fixed or determinable future time, a
sum certain in money to order or to bearer. Where a
note is drawn to the maker's own order, it is not XVII. GENERAL PROVISIONS
complete until indorsed by him.

Sec. 185. Check, defined. - A check is a bill of Sec. 190. Short title. - This Act shall be known as
exchange drawn on a bank payable on demand. the Negotiable Instruments Law.
Except as herein otherwise provided, the provisions
of this Act applicable to a bill of exchange payable on Sec. 191. Definition and meaning of terms. - In this
demand apply to a check. Act, unless the contract otherwise requires:

Sec. 186. Within what time a check must be "Acceptance" means an acceptance completed by
presented. - A check must be presented for payment delivery or notification;
within a reasonable time after its issue or the drawer
will be discharged from liability thereon to the extent "Action" includes counterclaim and set-off;
of the loss caused by the delay.
"Bank" includes any person or association of persons
Sec. 187. Certification of check; effect of. - Where a carrying on the business of banking, whether
check is certified by the bank on which it is drawn, incorporated or not;
the certification is equivalent to an acceptance.
"Bearer" means the person in possession of a bill or
Sec. 188. Effect where the holder of check procures note which is payable to bearer;
it to be certified. -Where the holder of a check
procures it to be accepted or certified, the drawer "Bill" means bill of exchange, and "note" means
and all indorsers are discharged from liability negotiable promissory note;
thereon.
"Delivery" means transfer of possession, actual or
constructive, from one person to another;
Sec. 194. Time, how computed; when last day falls
"Holder" means the payee or indorsee of a bill or on holiday. - Where the day, or the last day for doing
note who is in possession of it, or the bearer thereof; any act herein required or permitted to be done falls
on a Sunday or on a holiday, the act may be done on
"Indorsement" means an indorsement completed by the next succeeding secular or business day.
delivery;
Sec. 195. Application of Act. - The provisions of this
"Instrument" means negotiable instrument; Act do not apply to negotiable instruments made and
delivered prior to the taking effect hereof.
"Issue" means the first delivery of the instrument,
complete in form, to a person who takes it as a Sec. 196. Cases not provided for in Act. - Any case
holder; not provided for in this Act shall be governed by the
provisions of existing legislation or in default thereof,
"Person" includes a body of persons, whether by the rules of the law merchant.
incorporated or not;
Sec. 197. Repeals. - All acts and laws and parts
"Value" means valuable consideration; thereof inconsistent with this Act are hereby
repealed.
"Written" includes printed, and "writing" includes
print. Sec. 198. Time when Act takes effect. - This Act
shall take effect ninety days after its publication in
Sec. 192. Persons primarily liable on instrument. - the Official Gazette of the Philippine Islands shall
The person "primarily" liable on an instrument is the have been completed.
person who, by the terms of the instrument, is
absolutely required to pay the same. All other
parties are "secondarily" liable.

Sec. 193. Reasonable time, what constitutes. - In Enacted: February 3, 1911

determining what is a "reasonable time" regard is to
be had to the nature of the instrument, the usage of
trade or business with respect to such instruments,
and the facts of the particular case.