Act No.

2031 But an order or promise to pay out of a particular fund is

February 03, 1911
not unconditional.chan robles virtual law library 
THE NEGOTIABLE INSTRUMENTS LAW
 
ACT NO. 2031 Sec. 4. Determinable future time; what constitutes. - An
February 03, 1911 instrument is payable at a determinable future time, within
  the meaning of this Act, which is expressed to be
THE NEGOTIABLE INSTRUMENTS LAW
I. FORM AND INTERPRETATION payable:chanroblesvirtuallawlibrary
(a) At a fixed period after date or sight; or 
Section 1. Form of negotiable instruments. - An (b) On or before a fixed or determinable future time
instrument to be negotiable must conform to the following specified therein; or 
requirements:chanroblesvirtuallawlibrary
(a) It must be in writing and signed by the maker or (c) On or at a fixed period after the occurrence of a
drawer;  specified event which is certain to happen, though the time
of happening be uncertain.
(b) Must contain an unconditional promise or order to pay a An instrument payable upon a contingency is not
sum certain in money;  negotiable, and the happening of the event does not cure
(c) Must be payable on demand, or at a fixed or the defect. 
determinable future time; 
Sec. 5. Additional provisions not affecting negotiability. - An
(d) Must be payable to order or to bearer; and  instrument which contains an order or promise to do any
act in addition to the payment of money is not negotiable.
(e) Where the instrument is addressed to a drawee, he
must be named or otherwise indicated therein with But the negotiable character of an instrument otherwise
reasonable certainty. negotiable is not affected by a provision
Sec. 2. What constitutes certainty as to sum. - The sum which:chanroblesvirtuallawlibrary
payable is a sum certain within the meaning of this Act, (a) authorizes the sale of collateral securities in case the
instrument be not paid at maturity; or 
although it is to be paid:chanroblesvirtuallawlibrary
(a) with interest; or 
(b) authorizes a confession of judgment if the instrument be
not paid at maturity; or 
(b) by stated installments; or 
(c) waives the benefit of any law intended for the
(c) by stated installments, with a provision that, upon
advantage or protection of the obligor; or 
default in payment of any installment or of interest, the
whole shall become due; or 
(d) gives the holder an election to require something to be
done in lieu of payment of money.
(d) with exchange, whether at a fixed rate or at the current
rate; or  But nothing in this section shall validate any provision or
stipulation otherwise illegal. 
(e) with costs of collection or an attorney's fee, in case
payment shall not be made at maturity.
Sec. 6. Omissions; seal; particular money. - The validity and
Sec. 3. When promise is unconditional. - An unqualified
negotiable character of an instrument are not affected by
order or promise to pay is unconditional within the
the fact that:chanroblesvirtuallawlibrary
meaning of this Act though coupled (a) it is not dated; or 
with:chanroblesvirtuallawlibrary
(a) An indication of a particular fund out of which (b) does not specify the value given, or that any value had
reimbursement is to be made or a particular account to be been given therefor; or 
debited with the amount; or 
(c) does not specify the place where it is drawn or the place
(b) A statement of the transaction which gives rise to the where it is payable; or 
instrument.
(d) bears a seal; or 
1
 person; or 
(e) designates a particular kind of current money in which
payment is to be made. (e) When the only or last indorsement is an indorsement in
But nothing in this section shall alter or repeal any statute blank.
requiring in certain cases the nature of the consideration to Sec. 10. Terms, when sufficient. - The instrument need not
be stated in the instrument.  follow the language of this Act, but any terms are sufficient
which clearly indicate an intention to conform to the
Sec. 7. When payable on demand. - An instrument is requirements hereof. 
payable on 
demand:chanroblesvirtuallawlibrary Sec. 11. Date, presumption as to. - Where the instrument or
(a) When it is so expressed to be payable on demand, or an acceptance or any indorsement thereon is dated, such
at sight, or on presentation; or  date is deemed prima facie to be the true date of the
making, drawing, acceptance, or indorsement, as the case
(b) In which no time for payment is expressed.
may be.  chanrobles law 
Where an instrument is issued, accepted, or indorsed
when overdue, it is, as regards the person so issuing,
Sec. 12. Ante-dated and post-dated. - The instrument is not
accepting, or indorsing it, payable on demand. 
invalid for the reason only that it is ante-dated or post-
dated, provided this is not done for an illegal or fraudulent
Sec. 8. When payable to order. - The instrument is payable
purpose. The person to whom an instrument so dated is
to order where it is drawn payable to the order of a
delivered acquires the title thereto as of the date of
specified person or to him or his order. It may be drawn
delivery. 
payable to the order of:chanroblesvirtuallawlibrary
(a) A payee who is not maker, drawer, or drawee; or 
Sec. 13.  When date may be inserted. - Where an
(b) The drawer or maker; or  instrument expressed to be payable at a fixed period after
date is issued undated, or where the acceptance of an
(c) The drawee; or 
instrument payable at a fixed period after sight is undated,
(d) Two or more payees jointly; or  any holder may insert therein the true date of issue or
acceptance, and the instrument shall be payable
(e) One or some of several payees; or  accordingly. The insertion of a wrong date does not avoid
the instrument in the hands of a subsequent holder in due
(f)  The holder of an office for the time being.
course; but as to him, the date so inserted is to be regarded
Where the instrument is payable to order, the payee must
as the true date. 
be named or otherwise indicated therein with reasonable
certainty. 
Sec. 14. Blanks; when may be filled. - Where the instrument
is wanting in any material particular, the person in
Sec. 9. When payable to bearer. - The instrument is payable
possession thereof has a prima facie authority to complete
to 
it by filling up the blanks therein. And a signature on a blank
bearer:chanroblesvirtuallawlibrary
(a) When it is expressed to be so payable; or  paper delivered by the person making the signature in
order that the paper may be converted into a negotiable
(b) When it is payable to a person named therein or bearer; instrument operates as a prima facie authority to fill it up as
or 
such for any amount. In order, however, that any such
(c) When it is payable to the order of a fictitious or non- instrument when completed may be enforced against any
existing person, and such fact was known to the person person who became a party thereto prior to its completion,
making it so payable; or  it must be filled up strictly in accordance with the authority
given and within a reasonable time. But if any such
(d) When the name of the payee does not purport to be the
instrument, after completion, is negotiated to a holder in
name of any 
2
due course, it is valid and effectual for all purposes in his (d) Where there is a conflict between the written and
printed provisions of the instrument, the written provisions
hands, and he may enforce it as if it had been filled up
prevail; 
strictly in accordance with the authority given and within a
reasonable time.  (e) Where the instrument is so ambiguous that there is
doubt whether it is a bill or note, the holder may treat it as
Sec. 15. Incomplete instrument not delivered. - Where an either at his election; 
incomplete instrument has not been delivered, it will not, if (f) Where a signature is so placed upon the instrument that
completed and negotiated without authority, be a valid it is not clear in what capacity the person making the same
contract in the hands of any holder, as against any person intended to sign, he is to be deemed an indorser; 
whose signature was placed thereon before delivery. 
(g) Where an instrument containing the word "I promise to
pay" is signed by two or more persons, they are deemed to
Sec. 16. Delivery; when effectual; when presumed. - Every be jointly and severally liable thereon.
contract on a negotiable instrument is incomplete and
revocable until delivery of the instrument for the purpose Sec. 18. Liability of person signing in trade or assumed
of giving effect thereto. As between immediate parties and name. - No person is liable on the instrument whose
as regards a remote party other than a holder in due signature does not appear thereon, except as herein
course, the delivery, in order to be effectual, must be made otherwise expressly provided. But one who signs in a trade
either by or under the authority of the party making, or assumed name will be liable to the same extent as if he
drawing, accepting, or indorsing, as the case may be; and, in had signed in his own name. 
such case, the delivery may be shown to have been
conditional, or for a special purpose only, and not for the Sec. 19. Signature by agent; authority; how shown. - The
purpose of transferring the property in the instrument. But signature of any party may be made by a duly authorized
where the instrument is in the hands of a holder in due agent. No particular form of appointment is necessary for
course, a valid delivery thereof by all parties prior to him so this purpose; and the authority of the agent may be
as to make them liable to him is conclusively presumed. established as in other cases of agency. 
And where the instrument is no longer in the possession of
a party whose signature appears thereon, a valid and Sec. 20. Liability of person signing as agent, and so forth. -
intentional delivery by him is presumed until the contrary is Where the instrument contains or a person adds to his
proved.  signature words indicating that he signs for or on behalf of a
principal or in a representative capacity, he is not liable on
Sec. 17. Construction where instrument is ambiguous. - the instrument if he was duly authorized; but the mere
Where the language of the instrument is ambiguous or addition of words describing him as an agent, or as filling a
there are omissions therein, the following rules of representative character, without disclosing his principal,
construction apply:chanroblesvirtuallawlibrary does not exempt him from personal liability. 
(a) Where the sum payable is expressed in words and also
in figures and there is a discrepancy between the two, the
sum denoted by the words is the sum payable; but if the Sec. 21. Signature by procuration; effect of. - A signature
words are ambiguous or uncertain, reference may be had to by "procuration" operates as notice that the agent has but a
the figures to fix the amount;  limited authority to sign, and the principal is bound only in
case the agent in so signing acted within the actual limits of
(b) Where the instrument provides for the payment of
interest, without specifying the date from which interest is his authority. 
to run, the interest runs from the date of the instrument,
and if the instrument is undated, from the issue thereof;  Sec. 22. Effect of indorsement by infant or corporation.- The
indorsement or assignment of the instrument by a
(c) Where the instrument is not dated, it will be considered
corporation or by an infant passes the property therein,
to be dated as of the time it was issued; 
notwithstanding that from want of capacity, the

3
corporation or infant may incur no liability thereon.  holder, at the time of taking the instrument, knew him to
be only an accommodation party. 
Sec. 23. Forged signature; effect of. - When a signature is III. NEGOTIATION
forged or made without the authority of the person whose
signature it purports to be, it is wholly inoperative, and no Sec. 30. What constitutes negotiation. - An instrument is
right to retain the instrument, or to give a discharge negotiated when it is transferred from one person to
therefor, or to enforce payment thereof against any party another in such manner as to constitute the transferee the
thereto, can be acquired through or under such signature, holder thereof. If payable to bearer, it is negotiated by
unless the party against whom it is sought to enforce such delivery; if payable to order, it is negotiated by the
right is precluded from setting up the forgery or want of indorsement of the holder and completed by delivery. 
authority. 
II. CONSIDERATION Sec. 31. Indorsement; how made. - The indorsement must
Sec. 24. Presumption of consideration. - Every negotiable be written on the instrument itself or upon a paper
instrument is deemed prima facie to have been issued for a attached thereto. The signature of the indorser, without
valuable consideration; and every person whose signature additional words, is a sufficient indorsement. 
appears thereon to have become a party thereto for value. 
Sec. 32. Indorsement must be of entire instrument. - The
Sec. 25. Value, what constitutes. — Value is any indorsement must be an indorsement of the entire
consideration sufficient to support a simple contract. An instrument. An indorsement which purports to transfer to
antecedent or pre-existing debt constitutes value; and is the indorsee a part only of the amount payable, or which
deemed such whether the instrument is payable on purports to transfer the instrument to two or more
demand or at a future time.  indorsees severally, does not operate as a negotiation of
the instrument. But where the instrument has been paid in
Sec. 26. What constitutes holder for value. - Where value part, it may be indorsed as to the residue. 
has at any time been given for the instrument, the holder is
deemed a holder for value in respect to all parties who Sec. 33. Kinds of indorsement. - An indorsement may be
become such prior to that time.  either special or in blank; and it may also be either
Sec. 27. When lien on instrument constitutes holder for restrictive or qualified or conditional. 
value. — Where the holder has a lien on the instrument
arising either from contract or by implication of law, he is Sec. 34. Special indorsement; indorsement in blank. - A
deemed a holder for value to the extent of his lien.  special indorsement specifies the person to whom, or to
whose order, the instrument is to be payable, and the
Sec. 28. Effect of want of consideration. - Absence or failure indorsement of such indorsee is necessary to the further
of consideration is a matter of defense as against any negotiation of the instrument. An indorsement in blank
person not a holder in due course; and partial failure of specifies no indorsee, and an instrument so indorsed is
consideration is a defense pro tanto, whether the failure is payable to bearer, and may be negotiated by delivery. 
an ascertained and liquidated amount or otherwise. 
Sec. 35. Blank indorsement; how changed to special
Sec. 29. Liability of accommodation party. - An indorsement. - The holder may convert a blank indorsement
accommodation party is one who has signed the instrument into a special indorsement by writing over the signature of
as maker, drawer, acceptor, or indorser, without receiving the indorser in blank any contract consistent with the
value therefor, and for the purpose of lending his name to character of the indorsement. 
some other person. Such a person is liable on the
instrument to a holder for value, notwithstanding such Sec. 36. When indorsement restrictive. - An indorsement is
restrictive which either:chanroblesvirtuallawlibrary

4
 (a) Prohibits the further negotiation of the instrument; or  indorse for the others. 

(b) Constitutes the indorsee the agent of the indorser; or 

Sec. 42. Effect of instrument drawn or indorsed to a person
(c) Vests the title in the indorsee in trust for or to the use of as 
some other persons. cashier. - Where an instrument is drawn or indorsed to a
But the mere absence of words implying power to person as "cashier" or other fiscal officer of a bank or
negotiate does not make an indorsement restrictive.  corporation, it is deemed prima facie to be payable to the
bank or corporation of which he is such officer, and may be
Sec. 37. Effect of restrictive indorsement; rights of negotiated by either the indorsement of the bank or
indorsee. - A restrictive indorsement confers upon the corporation or the indorsement of the officer. 
indorsee the right:chanroblesvirtuallawlibrary
(a) to receive payment of the instrument;  Sec. 43. Indorsement where name is misspelled, and so
(b) to bring any action thereon that the indorser could forth. - Where the name of a payee or indorsee is wrongly
bring;  designated or misspelled, he may indorse the instrument as
therein described adding, if he thinks fit, his proper
(c) to transfer his rights as such indorsee, where the form of signature. 
the indorsement authorizes him to do so.
But all subsequent indorsees acquire only the title of the
Sec. 44. Indorsement in representative capacity. - Where
first indorsee under the restrictive indorsement. 
any person is under obligation to indorse in a
representative capacity, he may indorse in such terms as to
Sec. 38. Qualified indorsement. - A qualified indorsement
negative personal liability. robles virtual law library 
constitutes the indorser a mere assignor of the title to the
instrument. It may be made by adding to the indorser's
Sec. 45. Time of indorsement; presumption. - Except where
signature the words "without recourse" or any words of
an indorsement bears date after the maturity of the
similar import. Such an indorsement does not impair the
instrument, every negotiation is deemed prima facie to
negotiable character of the instrument. 
have been effected before the instrument was overdue. 

Sec. 39. Conditional indorsement. - Where an indorsement

Sec. 46. Place of indorsement; presumption. - Except where
is conditional, the party required to pay the instrument may
the contrary appears, every indorsement is presumed prima
disregard the condition and make payment to the indorsee
facie to have been made at the place where the instrument
or his transferee whether the condition has been fulfilled or
is dated. 
not. But any person to whom an instrument so indorsed is
negotiated will hold the same, or the proceeds thereof,
Sec. 47. Continuation of negotiable character. - An
subject to the rights of the person indorsing conditionally. 
instrument negotiable in its origin continues to be
negotiable until it has been restrictively indorsed or
Sec. 40. Indorsement of instrument payable to bearer. -
discharged by payment or otherwise. 
Where an instrument, payable to bearer, is indorsed
specially, it may nevertheless be further negotiated by
Sec. 48. Striking out indorsement. - The holder may at any
delivery; but the person indorsing specially is liable as
time strike out any indorsement which is not necessary to
indorser to only such holders as make title through his
his title. The indorser whose indorsement is struck out, and
indorsement. 
all indorsers subsequent to him, are thereby relieved from
liability on the instrument. 
Sec. 41. Indorsement where payable to two or more
persons. - Where an instrument is payable to the order of
Sec. 49. Transfer without indorsement; effect of. - Where
two or more payees or indorsees who are not partners, all
the holder of an instrument payable to his order transfers it
must indorse unless the one indorsing has authority to
5
for value without indorsing it, the transfer vests in the negotiates an instrument is defective within the meaning of
transferee such title as the transferor had therein, and the this Act when he obtained the instrument, or any signature
transferee acquires in addition, the right to have the thereto, by fraud, duress, or force and fear, or other
indorsement of the transferor. But for the purpose of unlawful means, or for an illegal consideration, or when he
determining whether the transferee is a holder in due negotiates it in breach of faith, or under such circumstances
course, the negotiation takes effect as of the time when the as amount to a fraud. 
indorsement is actually made. 
Sec. 56. What constitutes notice of defect. - To constitutes
Sec. 50. When prior party may negotiate instrument. - notice of an infirmity in the instrument or defect in the title
Where an instrument is negotiated back to a prior party, of the person negotiating the same, the person to whom it
such party may, subject to the provisions of this Act, reissue is negotiated must have had actual knowledge of the
and further negotiable the same. But he is not entitled to infirmity or defect, or knowledge of such facts that his
enforce payment thereof against any intervening party to action in taking the instrument amounted to bad faith. 
whom he was personally liable. 
IV. RIGHTS OF THE HOLDER Sec. 57. Rights of holder in due course. - A holder in due
Sec. 51. Right of holder to sue; payment. - The holder of a course holds the instrument free from any defect of title of
negotiable instrument may to sue thereon in his own name; prior parties, and free from defenses available to prior
and payment to him in due course discharges the parties among themselves, and may enforce payment of
instrument.  the instrument for the full amount thereof against all
parties liable thereon. robles virtual law library 
Sec. 52. What constitutes a holder in due course. - A holder
in due course is a holder who has taken the instrument Sec. 58. When subject to original defense. - In the hands of
under the following conditions:chanroblesvirtuallawlibrary any holder other than a holder in due course, a negotiable
(a) That it is complete and regular upon its face;  instrument is subject to the same defenses as if it were
non-negotiable. But a holder who derives his title through a
(b) That he became the holder of it before it was overdue,
and without notice that it has been previously dishonored, holder in due course, and who is not himself a party to any
if such was the fact;  fraud or illegality affecting the instrument, has all the rights
of such former holder in respect of all parties prior to the
(c) That he took it in good faith and for value;  latter. 
(d) That at the time it was negotiated to him, he had no
notice of any infirmity in the instrument or defect in the Sec. 59. Who is deemed holder in due course. - Every holder
title of the person negotiating it. is deemed prima facie to be a holder in due course; but
Sec. 53. When person not deemed holder in due course. when it is shown that the title of any person who has
- Where an instrument payable on demand is negotiated on negotiated the instrument was defective, the burden is on
an unreasonable length of time after its issue, the holder is the holder to prove that he or some person under whom he
not deemed a holder in due course.  claims acquired the title as holder in due course. But the
last-mentioned rule does not apply in favor of a party who
Sec. 54. Notice before full amount is paid. - Where the became bound on the instrument prior to the acquisition of
transferee receives notice of any infirmity in the instrument such defective title. 
or defect in the title of the person negotiating the same V. LIABILITIES OF PARTIES
before he has paid the full amount agreed to be paid Sec. 60. Liability of maker. - The maker of a negotiable
therefor, he will be deemed a holder in due course only to instrument, by making it, engages that he will pay it
the extent of the amount therefore paid by him.  according to its tenor, and admits the existence of the
payee and his then capacity to indorse. 
Sec. 55. When title defective. - The title of a person who

6
Sec. 61. Liability of drawer. - The drawer by drawing the (b) That he has a good title to it; 
instrument admits the existence of the payee and his then
(c) That all prior parties had capacity to contract; 
capacity to indorse; and engages that, on due presentment,
the instrument will be accepted or paid, or both, according (d) That he has no knowledge of any fact which would
to its tenor, and that if it be dishonored and the necessary impair the validity of the instrument or render it valueless.
proceedings on dishonor be duly taken, he will pay the But when the negotiation is by delivery only, the warranty
amount thereof to the holder or to any subsequent extends in favor of no holder other than the immediate
indorser who may be compelled to pay it. But the drawer transferee. 
may insert in the instrument an express stipulation
negativing or limiting his own liability to the holder. The provisions of subdivision (c) of this section do not apply
to a person negotiating public or corporation securities
Sec. 62. Liability of acceptor. - The acceptor, by accepting other than bills and notes. 
the instrument, engages that he will pay it according to the
tenor of his acceptance and Sec. 66. Liability of general indorser. - Every indorser who
admits:chanroblesvirtuallawlibrary indorses without qualification, warrants to all subsequent
(a) The existence of the drawer, the genuineness of his holders in due course:chanroblesvirtuallawlibrary
signature, and his capacity and authority to draw the (a) The matters and things mentioned in subdivisions (a),
instrument; and  (b), and (c) of the next preceding section; and 

(b) The existence of the payee and his then capacity to (b) That the instrument is, at the time of his indorsement,
indorse. valid and subsisting;
Sec. 63. When a person deemed indorser. - A person And, in addition, he engages that, on due presentment, it
placing his signature upon an instrument otherwise than as shall be accepted or paid, or both, as the case may be,
maker, drawer, or acceptor, is deemed to be indorser according to its tenor, and that if it be dishonored and the
unless he clearly indicates by appropriate words his necessary proceedings on dishonor be duly taken, he will
intention to be bound in some other capacity.  pay the amount thereof to the holder, or to any subsequent
indorser who may be compelled to pay it. 
Sec. 64. Liability of irregular indorser. - Where a person, not
otherwise a party to an instrument, places thereon his Sec. 67. Liability of indorser where paper negotiable by
signature in blank before delivery, he is liable as indorser, in delivery. — Where a person places his indorsement on an
accordance with the following instrument negotiable by delivery, he incurs all the liability
rules:chanroblesvirtuallawlibrary of an indorser. 
(a) If the instrument is payable to the order of a third
person, he is liable to the payee and to all subsequent
Sec. 68. Order in which indorsers are liable. - As respect one
parties. 
another, indorsers are liable  prima facie  in the order in
(b) If the instrument is payable to the order of the maker or which they indorse; but evidence is admissible to show
drawer, or is payable to bearer, he is liable to all parties that, as between or among themselves, they have agreed
subsequent to the maker or drawer. 
otherwise.  Joint payees or joint indorsees who indorse are
(c) If he signs for the accommodation of the payee, he is deemed to indorse jointly and severally. robles virtual law
liable to all parties subsequent to the payee. library 
Sec. 65. Warranty where negotiation by delivery and so
forth. — Every person negotiating an instrument by delivery Sec. 69. Liability of an agent or broker. - Where a broker or
or by a qualified indorsement other agent negotiates an instrument without indorsement,
warrants:chanroblesvirtuallawlibrary he incurs all the liabilities prescribed by Section Sixty-five of
(a) That the instrument is genuine and in all respects what this Act, unless he discloses the name of his principal and
it purports to be;  the fact that he is acting only as agent. 

7
 VI. PRESENTATION FOR PAYMENT Sec. 74. Instrument must be exhibited. - The instrument
Sec. 70. Effect of want of demand on principal debtor. - must be exhibited to the person from whom payment is
Presentment for payment is not necessary in order to demanded, and when it is paid, must be delivered up to the
charge the person primarily liable on the instrument; but if party paying it. 
the instrument is, by its terms, payable at a special place,
and he is able and willing to pay it there at maturity, such Sec. 75. Presentment where instrument payable at bank. -
ability and willingness are equivalent to a tender of Where the instrument is payable at a bank, presentment for
payment upon his part. But except as herein otherwise payment must be made during banking hours, unless the
provided, presentment for payment is necessary in order to person to make payment has no funds there to meet it at
charge the drawer and indorsers.  any time during the day, in which case presentment at any
hour before the bank is closed on that day is sufficient. 
Sec. 71. Presentment where instrument is not payable on
demand and where payable on demand. - Where the Sec. 76. Presentment where principal debtor is dead. -
instrument is not payable on demand, presentment must Where the person primarily liable on the instrument is dead
be made on the day it falls due. Where it is payable on and no place of payment is specified, presentment for
demand, presentment must be made within a reasonable payment must be made to his personal representative, if
time after its issue, except that in the case of a bill of such there be, and if, with the exercise of reasonable
exchange, presentment for payment will be sufficient if diligence, he can be found. 
made within a reasonable time after the last negotiation
thereof.  Sec. 77. Presentment to persons liable as partners. - Where
the persons primarily liable on the instrument are liable as
Sec. 72. What constitutes a sufficient presentment. - partners and no place of payment is specified, presentment
Presentment for payment, to be sufficient, must be for payment may be made to any one of them, even though
made:chanroblesvirtuallawlibrary there has been a dissolution of the firm. 
(a) By the holder, or by some person authorized to receive
payment on his behalf; 
Sec. 78. Presentment to joint debtors. - Where there are
(b) At a reasonable hour on a business day;  several persons, not partners, primarily liable on the
instrument and no place of payment is specified,
(c) At a proper place as herein defined;  presentment must be made to them all. 

(d) To the person primarily liable on the instrument, or if he

is absent or inaccessible, to any person found at the place Sec. 79. When presentment not required to charge the
where the presentment is made. drawer. -Presentment for payment is not required in order
Sec. 73. Place of presentment. - Presentment for payment to charge the drawer where he has no right to expect or
is made at the proper place:chanroblesvirtuallawlibrary require that the drawee or acceptor will pay the
(a) Where a place of payment is specified in the instrument. 
instrument and it is there presented; 
Sec. 80. When presentment not required to charge the
(b) Where no place of payment is specified but the address
of the person to make payment is given in the instrument indorser. -Presentment is not required in order to charge an
and it is there presented;  indorser where the instrument was made or accepted for
his accommodation and he has no reason to expect that the
(c) Where no place of payment is specified and no address
instrument will be paid if presented. 
is given and the instrument is presented at the usual place
of business or residence of the person to make payment; 
Sec. 81. When delay in making presentment is excused. -
(d) In any other case if presented to the person to make Delay in making presentment for payment is excused when
payment wherever he can be found, or if presented at his the delay is caused by circumstances beyond the control of
last known place of business or residence.
8
the holder and not imputable to his default, misconduct, or principal debtor thereon. 
negligence. When the cause of delay ceases to operate,   
presentment must be made with reasonable diligence.  Sec. 88. What constitutes payment in due course. - Payment
is made in due course when it is made at or after the
Sec. 82. When presentment for payment is excused. - maturity of the payment to the holder thereof in good faith
Presentment for payment is and without notice that his title is defective. 
excused:chanroblesvirtuallawlibrary  
(a) Where, after the exercise of reasonable diligence, VII. NOTICE OF DISHONOR
presentment, as required by this Act, cannot be made; 
 
(b) Where the drawee is a fictitious person;  Sec. 89. To whom notice of dishonor must be given.
- Except as herein otherwise provided, when a negotiable
(c) By waiver of presentment, express or implied. instrument has been dishonored by non-acceptance or non-
Sec. 83. When instrument dishonored by non-payment. - payment, notice of dishonor must be given to the drawer
The instrument is dishonored by non-payment and to each indorser, and any drawer or indorser to whom
when:chanroblesvirtuallawlibrary such notice is not given is discharged. 
(a) It is duly presented for payment and payment is   
refused or cannot be obtained; or 
Sec. 90. By whom given. - The notice may be given by or on
(b) Presentment is excused and the instrument is overdue behalf of the holder, or by or on behalf of any party to the
and unpaid. instrument who might be compelled to pay it to the holder,
Sec. 84. Liability of person secondarily liable, when and who, upon taking it up, would have a right to
instrument dishonored. - Subject to the provisions of this reimbursement from the party to whom the notice is given. 
Act, when the instrument is dishonored by non-payment,   
an immediate right of recourse to all parties secondarily Sec. 91. Notice given by agent. - Notice of dishonor may be
liable thereon accrues to the holder. robles virtual law given by any agent either in his own name or in the name of
library  any party entitled to given notice, whether that party be his
principal or not. 
Sec. 85. Time of maturity. - Every negotiable instrument is   
payable at the time fixed therein without grace. When the Sec. 92. Effect of notice on behalf of holder. - Where notice
day of maturity falls upon Sunday or a holiday, the is given by or on behalf of the holder, it inures to the
instruments falling due or becoming payable on Saturday benefit of all subsequent holders and all prior parties who
are to be presented for payment on the next succeeding have a right of recourse against the party to whom it is
business day except that instruments payable on demand given. 
may, at the option of the holder, be presented for payment   
before twelve o'clock noon on Saturday when that entire Sec. 93. Effect where notice is given by party entitled
day is not a holiday.  thereto. - Where notice is given by or on behalf of a party
   entitled to give notice, it inures to the benefit of the holder
Sec. 86. Time; how computed. - When the instrument is and all parties subsequent to the party to whom notice is
payable at a fixed period after date, after sight, or after that given.   chanrobles law 
happening of a specified event, the time of payment is   
determined by excluding the day from which the time is to Sec. 94. When agent may give notice. - Where the
begin to run, and by including the date of payment.  instrument has been dishonored in the hands of an agent,
   he may either himself give notice to the parties liable
Sec. 87. Rule where instrument payable at bank. - Where thereon, or he may give notice to his principal. If he gives
the instrument is made payable at a bank, it is equivalent to notice to his principal, he must do so within the same time
an order to the bank to pay the same for the account of the as if he were the holder, and the principal, upon the receipt

9
of such notice, has himself the same time for giving notice given within the time fixed by this Act. 
as if the agent had been an independent holder.    
   Sec. 103. Where parties reside in same place. - Where the
Sec. 95. When notice sufficient. - A written notice need not person giving and the person to receive notice reside in the
be signed and an insufficient written notice may be same place, notice must be given within the following
supplemented and validated by verbal communication. A times:chanroblesvirtuallawlibrary
misdescription of the instrument does not vitiate the notice (a) If given at the place of business of the person to
receive notice, it must be given before the close of business
unless the party to whom the notice is given is in fact
hours on the day following. 
misled thereby.    
   (b) If given at his residence, it must be given before the
Sec. 96. Form of notice. - The notice may be in writing or usual hours of rest on the day following. 
merely oral and may be given in any terms which   
(c) If sent by mail, it must be deposited in the post office in
sufficiently identify the instrument, and indicate that it has time to reach him in usual course on the day following.
been dishonored by non-acceptance or non-payment. It Sec. 104. Where parties reside in different places. - Where
may in all cases be given by delivering it personally or the person giving and the person to receive notice reside in
through the mails.  different places, the notice must be given within the
   following times:chanroblesvirtuallawlibrary
Sec. 97. To whom notice may be given. - Notice of dishonor (a) If sent by mail, it must be deposited in the post office
may be given either to the party himself or to his agent in in time to go by mail the day following the day of dishonor,
that behalf.  or if there be no mail at a convenient hour on last day, by
the next mail thereafter. 
  
  
Sec. 98. Notice where party is dead. - When any party is (b) If given otherwise than through the post office, then
dead and his death is known to the party giving notice, the within the time that notice would have been received in
notice must be given to a personal representative, if there due course of mail, if it had been deposited in the post
office within the time specified in the last subdivision.
be one, and if with reasonable diligence, he can be found. If
Sec. 105. When sender deemed to have given due notice. -
there be no personal representative, notice may be sent to
Where notice of dishonor is duly addressed and deposited
the last residence or last place of business of the deceased. 
in the post office, the sender is deemed to have given due
  
notice, notwithstanding any miscarriage in the mails. 
Sec. 99. Notice to partners. - Where the parties to be
  
notified are partners, notice to any one partner is notice to
Sec. 106. Deposit in post office; what constitutes. - Notice is
the firm, even though there has been a dissolution. 
deemed to have been deposited in the post-office when
  
deposited in any branch post office or in any letter box
Sec. 100. Notice to persons jointly liable. - Notice to joint
under the control of the post-office department. 
persons who are not partners must be given to each of
  
them unless one of them has authority to receive such
Sec. 107. Notice to subsequent party; time of. - Where a
notice for the others. 
party receives notice of dishonor, he has, after the receipt
  
of such notice, the same time for giving notice to
Sec. 101. Notice to bankrupt. - Where a party has been
antecedent parties that the holder has after the dishonor. 
adjudged a bankrupt or an insolvent, or has made an
  
assignment for the benefit of creditors, notice may be given
Sec. 108. Where notice must be sent. - Where a party has
either to the party himself or to his trustee or assignee. 
added an address to his signature, notice of dishonor must
  
be sent to that address; but if he has not given such
Sec. 102. Time within which notice must be given. - Notice
address, then the notice must be sent as
may be given as soon as the instrument is dishonored and,
follows:chanroblesvirtuallawlibrary
unless delay is excused as hereinafter provided, must be

10
 (a) Either to the post-office nearest to his place of   
residence or to the post-office where he is accustomed to (c) When the drawer is the person to whom the instrument
receive his letters; or  is presented for payment; 
     
(b) If he lives in one place and has his place of business in (d) Where the drawer has no right to expect or require that
another, notice may be sent to either place; or  the drawee or acceptor will honor the instrument; 
     
(c) If he is sojourning in another place, notice may be sent (e) Where the drawer has countermanded payment.
to the place where he is so sojourning. Sec. 115. When notice need not be given to indorser. —
But where the notice is actually received by the party Notice of dishonor is not required to be given to an indorser
within the time specified in this Act, it will be sufficient, in either of the following cases:chanroblesvirtuallawlibrary
though not sent in accordance with the requirement of this (a) When the drawee is a fictitious person or person not
section.  having capacity to contract, and the indorser was aware of
that fact at the time he indorsed the instrument; 
  
Sec. 109. Waiver of notice. - Notice of dishonor may be (b) Where the indorser is the person to whom the
waived either before the time of giving notice has arrived or instrument is presented for payment; 
after the omission to give due notice, and the waiver may   
be expressed or implied.  (c) Where the instrument was made or accepted for his
accommodation.
  
Sec. 116. Notice of non-payment where acceptance
Sec. 110. Whom affected by waiver. - Where the waiver is
refused. - Where due notice of dishonor by non-acceptance
embodied in the instrument itself, it is binding upon all
has been given, notice of a subsequent dishonor by non-
parties; but, where it is written above the signature of an
payment is not necessary unless in the meantime the
indorser, it binds him only. 
instrument has been accepted. 
  
  
Sec. 111. Waiver of protest. - A waiver of protest, whether
Sec. 117. Effect of omission to give notice of non-
in the case of a foreign bill of exchange or other negotiable
acceptance. - An omission to give notice of dishonor by
instrument, is deemed to be a waiver not only of a formal
non-acceptance does not prejudice the rights of a holder in
protest but also of presentment and notice of dishonor. 
due course subsequent to the omission. 
  
  
Sec. 112. When notice is dispensed with. - Notice of
Sec. 118. When protest need not be made; when must be
dishonor is dispensed with when, after the exercise of
made. - Where any negotiable instrument has been
reasonable diligence, it cannot be given to or does not
dishonored, it may be protested for non-acceptance or non-
reach the parties sought to be charged. 
payment, as the case may be; but protest is not required
  
except in the case of foreign bills of exchange.robles virtual
Sec. 113. Delay in giving notice; how excused. - Delay in
law library 
giving notice of dishonor is excused when the delay is
VIII. DISCHARGE OF NEGOTIABLE INSTRUMENTS
caused by circumstances beyond the control of the holder
and not imputable to his default, misconduct, or
Sec. 119. Instrument; how discharged. - A negotiable
negligence. When the cause of delay ceases to operate,
instrument is discharged:chanroblesvirtuallawlibrary
notice must be given with reasonable diligence.  (a) By payment in due course by or on behalf of the
   principal debtor; 
Sec. 114. When notice need not be given to drawer. - Notice   
of dishonor is not required to be given to the drawer in (b) By payment in due course by the party accommodated,
where the instrument is made or accepted for his
either of the following cases:chanroblesvirtuallawlibrary
accommodation; 
(a) Where the drawer and drawee are the same person; 
  
  
(c) By the intentional cancellation thereof by the holder; 
(b) When the drawee is fictitious person or a person not
  
having capacity to contract; 
11
(d) By any other act which will discharge a simple contract where an instrument or any signature thereon appears to
for the payment of money; 
have been cancelled, the burden of proof lies on the party
  
(e) When the principal debtor becomes the holder of the who alleges that the cancellation was made unintentionally
instrument at or after maturity in his own right. or under a mistake or without authority. 
Sec. 120. When persons secondarily liable on the   
instrument are discharged. - A person secondarily liable on Sec. 124. Alteration of instrument; effect of. - Where a
the instrument is discharged:chanroblesvirtuallawlibrary negotiable instrument is materially altered without the
(a) By any act which discharges the instrument;  assent of all parties liable thereon, it is avoided, except as
   against a party who has himself made, authorized, or
(b) By the intentional cancellation of his signature by the
holder;  assented to the alteration and subsequent indorsers. 
   But when an instrument has been materially altered and is
(c) By the discharge of a prior party;  in the hands of a holder in due course not a party to the
   alteration, he may enforce payment thereof according to its
(d) By a valid tender or payment made by a prior party; 
original tenor. 
  
(e) By a release of the principal debtor unless the holder's   
right of recourse against the party secondarily liable is Sec. 125. What constitutes a material alteration. - Any
expressly reserved;  alteration which changes:chanroblesvirtuallawlibrary
   (a) The date; 
(f) By any agreement binding upon the holder to extend the   
time of payment or to postpone the holder's right to (b) The sum payable, either for principal or interest; 
enforce the instrument unless made with the assent of the   
party secondarily liable or unless the right of recourse (c) The time or place of
against such party is expressly reserved. payment:chanroblesvirtuallawlibrary 
Sec. 121. Right of party who discharges instrument. -   
Where the instrument is paid by a party secondarily liable (d) The number or the relations of the parties; 
  
thereon, it is not discharged; but the party so paying it is
(e) The medium or currency in which payment is to be
remitted to his former rights as regard all prior parties, and made; 
he may strike out his own and all subsequent indorsements   
and against negotiate the instrument, (f) Or which adds a place of payment where no place of
except:chanroblesvirtuallawlibrary payment is specified, or any other change or addition which
(a) Where it is payable to the order of a third person and alters the effect of the instrument in any respect, is a
has been paid by the drawer; and  material alteration.
   BILLS OF EXCHANGE
(b) Where it was made or accepted for accommodation and  
has been paid by the party accommodated. IX. FORM AND INTERPRETATION
Sec. 122. Renunciation by holder. - The holder may  
expressly renounce his rights against any party to the Sec. 126. Bill of exchange, defined. - A bill of exchange is
instrument before, at, or after its maturity. An absolute and an unconditional order in writing addressed by one person
unconditional renunciation of his rights against the principal to another, signed by the person giving it, requiring the
debtor made at or after the maturity of the instrument person to whom it is addressed to pay on demand or at a
discharges the instrument. But a renunciation does not fixed or determinable future time a sum certain in money to
affect the rights of a holder in due course without notice. A order or to bearer. 
renunciation must be in writing unless the instrument is   
delivered up to the person primarily liable thereon.  Sec. 127. Bill not an assignment of funds in hands of
   drawee. - A bill of itself does not operate as an assignment
Sec. 123. Cancellation; unintentional; burden of proof. - A of the funds in the hands of the drawee available for the
cancellation made unintentionally or under a mistake or payment thereof, and the drawee is not liable on the bill
without the authority of the holder, is inoperative but
12
unless and until he accepts the same.  whom it is shown and who, on the faith thereof, receives
   the bill for value. 
Sec. 128. Bill addressed to more than one drawee. - A bill   
may be addressed to two or more drawees jointly, whether Sec. 135. Promise to accept; when equivalent to
they are partners or not; but not to two or more drawees in acceptance. - An unconditional promise in writing to accept
the alternative or in succession.  a bill before it is drawn is deemed an actual acceptance in
   favor of every person who, upon the faith thereof, receives
Sec. 129. Inland and foreign bills of exchange. - An inland the bill for value. 
bill of exchange is a bill which is, or on its face purports to   
be, both drawn and payable within the Philippines. Any Sec. 136. Time allowed drawee to accept. - The drawee is
other bill is a foreign bill. Unless the contrary appears on allowed twenty-four hours after presentment in which to
the face of the bill, the holder may treat it as an inland bill.  decide whether or not he will accept the bill; the
   acceptance, if given, dates as of the day of presentation. 
Sec. 130. When bill may be treated as promissory note. -   
Where in a bill the drawer and drawee are the same person Sec. 137. Liability of drawee returning or destroying bill. -
or where the drawee is a fictitious person or a person not Where a drawee to whom a bill is delivered for acceptance
having capacity to contract, the holder may treat the destroys the same, or refuses within twenty-four hours
instrument at his option either as a bill of exchange or as a after such delivery or within such other period as the holder
promissory note.  may allow, to return the bill accepted or non-accepted to
   the holder, he will be deemed to have accepted the same. 
Sec. 131. Referee in case of need. - The drawer of a bill and   
any indorser may insert thereon the name of a person to Sec. 138. Acceptance of incomplete bill. - A bill may be
whom the holder may resort in case of need; that is to say, accepted before it has been signed by the drawer, or while
in case the bill is dishonored by non-acceptance or non- otherwise incomplete, or when it is overdue, or after it has
payment. Such person is called a referee in case of need. It been dishonored by a previous refusal to accept, or by non
is in the option of the holder to resort to the referee in case payment. But when a bill payable after sight is dishonored
of need or not as he may see fit.  by non-acceptance and the drawee subsequently accepts it,
  the holder, in the absence of any different agreement, is
X. ACCEPTANCE entitled to have the bill accepted as of the date of the first
  presentment. 
Sec. 132. Acceptance; how made, by and so forth. - The   
acceptance of a bill is the signification by the drawee of his Sec. 139. Kinds of acceptance. - An acceptance is either
assent to the order of the drawer. The acceptance must be general or qualified. A general acceptance assents without
in writing and signed by the drawee. It must not express qualification to the order of the drawer. A qualified
that the drawee will perform his promise by any other acceptance in express terms varies the effect of the bill as
means than the payment of money.  drawn. 
     
Sec. 133. Holder entitled to acceptance on face of bill. - The Sec. 140. What constitutes a general acceptance. - An
holder of a bill presenting the same for acceptance may acceptance to pay at a particular place is a general
require that the acceptance be written on the bill, and, if acceptance unless it expressly states that the bill is to be
such request is refused, may treat the bill as dishonored.  paid there only and not elsewhere. 
     
Sec. 134. Acceptance by separate instrument. - Where an Sec. 141. Qualified acceptance. - An acceptance is qualified
acceptance is written on a paper other than the bill itself, it which is:chanroblesvirtuallawlibrary
does not bind the acceptor except in favor of a person to (a) Conditional; that is to say, which makes payment by
the acceptor dependent on the fulfillment of a condition
13
therein stated;  Sec. 145. Presentment; how made. - Presentment for
  
acceptance must be made by or on behalf of the holder at a
(b) Partial; that is to say, an acceptance to pay part only of
the amount for which the bill is drawn;  reasonable hour, on a business day and before the bill is
   overdue, to the drawee or some person authorized to
(c) Local; that is to say, an acceptance to pay only at a accept or refuse acceptance on his behalf; and
particular place; (a) Where a bill is addressed to two or more drawees who
   are not partners, presentment must be made to them all
(d) Qualified as to time;  unless one has authority to accept or refuse acceptance for
   all, in which case presentment may be made to him only; 
(e) The acceptance of some, one or more of the drawees   
but not of all. (b) Where the drawee is dead, presentment may be made
Sec. 142. Rights of parties as to qualified acceptance. - The to his personal representative; 
holder may refuse to take a qualified acceptance and if he   
(c) Where the drawee has been adjudged a bankrupt or an
does not obtain an unqualified acceptance, he may treat
insolvent or has made an assignment for the benefit of
the bill as dishonored by non-acceptance. Where a qualified creditors, presentment may be made to him or to his
acceptance is taken, the drawer and indorsers are trustee or assignee.
discharged from liability on the bill unless they have Sec. 146. On what days presentment may be made.  - A bill
expressly or impliedly authorized the holder to take a may be presented for acceptance on any day on which
qualified acceptance, or subsequently assent thereto. When negotiable instruments may be presented for payment
the drawer or an indorser receives notice of a qualified under the provisions of Sections seventy-two and eighty-
acceptance, he must, within a reasonable time, express his five of this Act. When Saturday is not otherwise a holiday,
dissent to the holder or he will be deemed to have assented presentment for acceptance may be made before twelve
thereto.  o'clock noon on that day. 
    
XI. PRESENTMENT FOR ACCEPTANCE Sec. 147. Presentment where time is insufficient. - Where
the holder of a bill drawn payable elsewhere than at the
Sec. 143. When presentment for acceptance must be place of business or the residence of the drawee has no
made. - Presentment for acceptance must be time, with the exercise of reasonable diligence, to present
made:chanroblesvirtuallawlibrary the bill for acceptance before presenting it for payment on
(a) Where the bill is payable after sight, or in any other the day that it falls due, the delay caused by presenting the
case, where presentment for acceptance is necessary in
bill for acceptance before presenting it for payment is
order to fix the maturity of the instrument; or 
   excused and does not discharge the drawers and indorsers. 
(b) Where the bill expressly stipulates that it shall be   
presented for acceptance; or  Sec. 148. Where presentment is excused. - Presentment for
   acceptance is excused and a bill may be treated as
(c) Where the bill is drawn payable elsewhere than at the
residence or place of business of the drawee. dishonored by non-acceptance in either of the following
In no other case is presentment for acceptance necessary cases:chanroblesvirtuallawlibrary
(a) Where the drawee is dead, or has absconded, or is a
in order to render any party to the bill liable.  fictitious person or a person not having capacity to contract
   by bill. 
Sec. 144. When failure to present releases drawer and   
indorser. - Except as herein otherwise provided, the holder (b) Where, after the exercise of reasonable diligence,
presentment can not be made. 
of a bill which is required by the next preceding section to
  
be presented for acceptance must either present it for (c) Where, although presentment has been irregular,
acceptance or negotiate it within a reasonable time. If he acceptance has been refused on some other ground.
fails to do so, the drawer and all indorsers are discharged.  Sec. 149. When dishonored by nonacceptance. - A bill is
   dishonored by non-acceptance:chanroblesvirtuallawlibrary

14
 (a) When it is duly presented for acceptance and such an dishonored, in the presence of two or more credible
acceptance as is prescribed by this Act is refused or can not witnesses.
be obtained; or  Sec. 155. Protest; when to be made. - When a bill is
  
protested, such protest must be made on the day of its
(b) When presentment for acceptance is excused and the
bill is not accepted. dishonor unless delay is excused as herein provided. When
Sec. 150. Duty of holder where bill not accepted. - Where a bill has been duly noted, the protest may be subsequently
a bill is duly presented for acceptance and is not accepted extended as of the date of the noting. 
within the prescribed time, the person presenting it must   
treat the bill as dishonored by nonacceptance or he loses Sec. 156. Protest; where made. - A bill must be protested at
the right of recourse against the drawer and indorsers.  the place where it is dishonored, except that when a bill
   drawn payable at the place of business or residence of
Sec. 151. Rights of holder where bill not accepted. - When a some person other than the drawee has been dishonored
bill is dishonored by nonacceptance, an immediate right of by nonacceptance, it must be protested for non-payment at
recourse against the drawer and indorsers accrues to the the place where it is expressed to be payable, and no
holder and no presentment for payment is necessary.  further presentment for payment to, or demand on, the
  drawee is necessary. 
XII. PROTEST   
  Sec. 157. Protest both for non-acceptance and non-
Sec. 152. In what cases protest necessary. - Where a payment. - A bill which has been protested for non-
foreign bill appearing on its face to be such is dishonored by acceptance may be subsequently protested for non-
nonacceptance, it must be duly protested for payment. 
nonacceptance, by nonacceptance is dishonored and where   
such a bill which has not previously been dishonored by Sec. 158. Protest before maturity where acceptor
nonpayment, it must be duly protested for nonpayment. If insolvent. - Where the acceptor has been adjudged a
it is not so protested, the drawer and indorsers are bankrupt or an insolvent or has made an assignment for the
discharged. Where a bill does not appear on its face to be a benefit of creditors before the bill matures, the holder may
foreign bill, protest thereof in case of dishonor is cause the bill to be protested for better security against the
unnecessary.  drawer and indorsers. robles virtual law library 
     
Sec. 153. Protest; how made. - The protest must be Sec. 159. When protest dispensed with. - Protest is
annexed to the bill or must contain a copy thereof, and dispensed with by any circumstances which would dispense
must be under the hand and seal of the notary making it with notice of dishonor. Delay in noting or protesting is
and must specify:chanroblesvirtuallawlibrary excused when delay is caused by circumstances beyond the
(a) The time and place of presentment;  control of the holder and not imputable to his default,
   misconduct, or negligence. When the cause of delay ceases
(b) The fact that presentment was made and the manner to operate, the bill must be noted or protested with
thereof; 
   reasonable diligence. 
(c) The cause or reason for protesting the bill;    
   Sec. 160. Protest where bill is lost and so forth. - When a bill
(d) The demand made and the answer given, if any, or the is lost or destroyed or is wrongly detained from the person
fact that the drawee or acceptor could not be found.
entitled to hold it, protest may be made on a copy or
Sec. 154. Protest, by whom made.  - Protest may be made
written particulars thereof. 
by:chanroblesvirtuallawlibrary
 
(a) A notary public; or 
   XIII. ACCEPTANCE FOR HONOR
(b) By any respectable resident of the place where the bill is   
Sec. 161. When bill may be accepted for honor. - When a bill
15
of exchange has been protested for dishonor by non- need. 
acceptance or protested for better security and is not   
overdue, any person not being a party already liable Sec. 168. Presentment for payment to acceptor for honor,
thereon may, with the consent of the holder, intervene and how made. - Presentment for payment to the acceptor for
accept the bill supra protest for the honor of any party honor must be made as follows:chanroblesvirtuallawlibrary
liable thereon or for the honor of the person for whose (a) If it is to be presented in the place where the protest
for non-payment was made, it must be presented not later
account the bill is drawn. The acceptance for honor may be
than the day following its maturity. 
for part only of the sum for which the bill is drawn; and   
where there has been an acceptance for honor for one (b) If it is to be presented in some other place than the
party, there may be a further acceptance by a different place where it was protested, then it must be forwarded
person for the honor of another party.  within the time specified in Section one hundred and four.
   Sec. 169. When delay in making presentment is excused. -
Sec. 162. Acceptance for honor; how made. - An acceptance The provisions of Section eighty-one apply where there is
for honor supra protest must be in writing and indicate that delay in making presentment to the acceptor for honor or
it is an acceptance for honor and must be signed by the referee in case of need. 
acceptor for honor. chanrobles law    
   Sec. 170. Dishonor of bill by acceptor for honor. - When the
Sec. 163. When deemed to be an acceptance for honor of bill is dishonored by the acceptor for honor, it must be
the drawer. - Where an acceptance for honor does not protested for non-payment by him. 
expressly state for whose honor it is made, it is deemed to  
be an acceptance for the honor of the drawer.  XIV. PAYMENT FOR HONOR
    
Sec. 164. Liability of the acceptor for honor. - The acceptor Sec. 171.  Who may make payment for honor.  - Where a
for honor is liable to the holder and to all parties to the bill bill has been protested for non-payment, any person may
subsequent to the party for whose honor he has accepted.  intervene and pay it supraprotest for the honor of any
   person liable thereon or for the honor of the person for
Sec. 165. Agreement of acceptor for honor. - The acceptor whose account it was drawn. 
for honor, by such acceptance, engages that he will, on due   
presentment, pay the bill according to the terms of his Sec. 172. Payment for honor; how made. - The payment for
acceptance provided it shall not have been paid by the honor supra protest, in order to operate as such and not as
drawee and provided also that is shall have been duly a mere voluntary payment, must be attested by a notarial
presented for payment and protested for non-payment and act of honor which may be appended to the protest or form
notice of dishonor given to him.  an extension to it. 
     
Sec. 166. Maturity of bill payable after sight; accepted for Sec. 173. Declaration before payment for honor. - The
honor. - Where a bill payable after sight is accepted for notarial act of honor must be founded on a declaration
honor, its maturity is calculated from the date of the noting made by the payer for honor or by his agent in that behalf
for non-acceptance and not from the date of the declaring his intention to pay the bill for honor and for
acceptance for honor.  whose honor he pays. 
     
Sec. 167. Protest of bill accepted for honor, and so forth. - Sec. 174. Preference of parties offering to pay for honor. -
Where a dishonored bill has been accepted for honor supra Where two or more persons offer to pay a bill for the honor
protest or contains a referee in case of need, it must be of different parties, the person whose payment will
protested for non-payment before it is presented for discharge most parties to the bill is to be given the
payment to the acceptor for honor or referee in case of preference. 
  
16
Sec. 175. Effect on subsequent parties where bill is paid course, he is liable on every such part as if it were a
for honor. - Where a bill has been paid for honor, all parties separate bill. 
subsequent to the party for whose honor it is paid are   
discharged but the payer for honor is subrogated for, and Sec. 182. Payment by acceptor of bills drawn in sets. - When
succeeds to, both the rights and duties of the holder as the acceptor of a bill drawn in a set pays it without
regards the party for whose honor he pays and all parties requiring the part bearing his acceptance to be delivered up
liable to the latter.  to him, and the part at maturity is outstanding in the hands
   of a holder in due course, he is liable to the holder thereon. 
Sec. 176. Where holder refuses to receive payment supra   
protest. -Where the holder of a bill refuses to receive Sec. 183. Effect of discharging one of a set. - Except as
payment supra  protest, he loses his right of recourse herein otherwise provided, where any one part of a bill
against any party who would have been discharged by such drawn in a set is discharged by payment or otherwise, the
payment.  whole bill is discharged. 
    
Sec. 177. Rights of payer for honor. - The payer for honor, XVI. PROMISSORY NOTES AND CHECKS
on paying to the holder the amount of the bill and the  
notarial expenses incidental to its dishonor, is entitled to Sec. 184. Promissory note, defined. - A negotiable
receive both the bill itself and the protest.  promissory note within the meaning of this Act is an
  unconditional promise in writing made by one person to
XV. BILLS IN SET another, signed by the maker, engaging to pay on demand,
or at a fixed or determinable future time, a sum certain in
Sec. 178. Bills in set constitute one bill. - Where a bill is money to order or to bearer. Where a note is drawn to the
drawn in a set, each part of the set being numbered and maker's own order, it is not complete until indorsed by
containing a reference to the other parts, the whole of the him. 
parts constitutes one bill.    
   Sec. 185. Check, defined. - A check is a bill of exchange
Sec. 179. Right of holders where different parts are drawn on a bank payable on demand. Except as herein
negotiated. - Where two or more parts of a set are otherwise provided, the provisions of this Act applicable to
negotiated to different holders in due course, the holder a bill of exchange payable on demand apply to a check. 
whose title first accrues is, as between such holders, the   
true owner of the bill.  But nothing in this section affects the Sec. 186. Within what time a check must be presented. - A
right of a person who, in due course, accepts or pays the check must be presented for payment within a reasonable
parts first presented to him.  time after its issue or the drawer will be discharged from
   liability thereon to the extent of the loss caused by the
Sec. 180. Liability of holder who indorses two or more parts delay. 
of a set to different persons. - Where the holder of a set   
indorses two or more parts to different persons he is liable Sec. 187. Certification of check; effect of. - Where a check is
on every such part, and every indorser subsequent to him is certified by the bank on which it is drawn, the certification
liable on the part he has himself indorsed, as if such parts is equivalent to an acceptance. 
were separate bills.    
   Sec. 188. Effect where the holder of check procures it to be
Sec. 181. Acceptance of bill drawn in sets. - The acceptance certified. -Where the holder of a check procures it to be
may be written on any part and it must be written on one accepted or certified, the drawer and all indorsers are
part only. If the drawee accepts more than one part and discharged from liability thereon. 
such accepted parts negotiated to different holders in due   

17
Sec. 189. When check operates as an assignment. - A check to pay the same. All other parties are "secondarily" liable. 
of itself does not operate as an assignment of any part of   
the funds to the credit of the drawer with the bank, and the Sec. 193. Reasonable time, what constitutes. - In
bank is not liable to the holder unless and until it accepts or determining what is a "reasonable time" regard is to be had
certifies the check.  to the nature of the instrument, the usage of trade or
  business with respect to such instruments, and the facts of
XVII. GENERAL PROVISIONS the particular case. 
    
Sec. 190. Short title. - This Act shall be known as the Sec. 194. Time, how computed; when last day falls on
Negotiable Instruments Law.  holiday. - Where the day, or the last day for doing any act
   herein required or permitted to be done falls on a Sunday
Sec. 191. Definition and meaning of terms. - In this Act, or on a holiday, the act may be done on the next
unless the contract otherwise succeeding secular or business day. 
requires:chanroblesvirtuallawlibrary   
"Acceptance" means an acceptance completed by delivery Sec. 195. Application of Act. - The provisions of this Act do
or notification; 
not apply to negotiable instruments made and delivered
  
"Action" includes counterclaim and set-off;  prior to the taking effect hereof. chanrobles law 
     
"Bank" includes any person or association of persons Sec. 196. Cases not provided for in Act. - Any case not
carrying on the business of banking, whether incorporated provided for in this Act shall be governed by the provisions
or not; 
   of existing legislation or in default thereof, by the rules of
"Bearer" means the person in possession of a bill or note the law merchant. 
which is payable to bearer; 
   Sec. 197. Repeals. - All acts and laws and parts thereof
"Bill" means bill of exchange, and "note" means negotiable
inconsistent with this Act are hereby repealed. 
promissory note; 
     
"Delivery" means transfer of possession, actual or Sec. 198. Time when Act takes effect. - This Act shall take
constructive, from one person to another;  effect ninety days after its publication in the Official Gazette
  
of the Philippine Islands shall have been completed. 
"Holder" means the payee or indorsee of a bill or note who
is in possession of it, or the bearer thereof;   
   Enacted: February 3, 1911
"Indorsement" means an indorsement completed by
delivery; 
  
"Instrument" means negotiable instrument; 
  
"Issue"  means the first delivery of the instrument, complete
in form, to a person who takes it as a holder; 
  
"Person"  includes a body of persons, whether incorporated
or not; 
  
"Value" means valuable consideration; 
  
"Written" includes printed, and "writing"  includes print.
Sec. 192. Persons primarily liable on instrument. - The
person "primarily" liable on an instrument is the person
who, by the terms of the instrument, is absolutely required
18