ACT NO.

2031 b) On or before a fixed or determinable future

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

Sec. 17. Construction where instrument is Sec. 20. Liability of person signing as agent, and so
ambiguous. - Where the language of the instrument forth. - Where the instrument contains or a person
is ambiguous or there are omissions therein, the adds to his signature words indicating that he signs
following rules of construction apply: for or on behalf of a principal or in a representative
a) Where the sum payable is expressed in words capacity, he is not liable on the instrument if he was
and also in figures and there is a discrepancy duly authorized; but the mere addition of words
between the two, the sum denoted by the describing him as an agent, or as filling a
words is the sum payable; but if the words are representative character, without disclosing his
ambiguous or uncertain, reference may be had principal, does not exempt him from personal
to the figures to fix the amount;  liability. 
b) Where the instrument provides for the
Sec. 21. Signature by procuration; effect of. - A
payment of interest, without specifying the
signature by "procuration" operates as notice that
date from which interest is to run, the interest
the agent has but a limited authority to sign, and the
runs from the date of the instrument, and if
principal is bound only in case the agent in so signing
the instrument is undated, from the issue
acted within the actual limits of his authority. 
thereof; 
c) Where the instrument is not dated, it will be Sec. 22. Effect of indorsement by infant or
considered to be dated as of the time it was corporation.- The indorsement or assignment of the
issued;  instrument by a corporation or by an infant passes
d) Where there is a conflict between the written the property therein, notwithstanding that from
and printed provisions of the instrument, the want of capacity, the corporation or infant may incur
written provisions prevail;  no liability thereon. 
e) Where the instrument is so ambiguous that
there is doubt whether it is a bill or note, the Sec. 23. Forged signature; effect of. - When a
holder may treat it as either at his election;  signature is forged or made without the authority of
f) Where a signature is so placed upon the the person whose signature it purports to be, it is
instrument that it is not clear in what capacity wholly inoperative, and no right to retain the
the person making the same intended to sign, instrument, or to give a discharge therefor, or to
he is to be deemed an indorser;  enforce payment thereof against any party thereto,
g) Where an instrument containing the word  "I can be acquired through or under such signature,
promise to pay" is signed by two or more unless the party against whom it is sought to enforce
persons, they are deemed to be jointly and such right is precluded from setting up the forgery or
severally liable thereon. want of authority. 

Sec. 18. Liability of person signing in trade or II. CONSIDERATION

assumed name. - No person is liable on the
Sec. 24. Presumption of consideration. - Every Sec. 31. Indorsement; how made. - The indorsement
negotiable instrument is deemed prima facie to have must be written on the instrument itself or upon a
been issued for a valuable consideration; and every paper attached thereto. The signature of the
person whose signature appears thereon to have indorser, without additional words, is a sufficient
become a party thereto for value.  indorsement. 
Sec. 25. Value, what constitutes. — Value is any Sec. 32. Indorsement must be of entire instrument.
consideration sufficient to support a simple contract. - The indorsement must be an indorsement of the
An antecedent or pre-existing debt constitutes entire instrument. An indorsement which purports
value; and is deemed such whether the instrument is to transfer to the indorsee a part only of the amount
payable on demand or at a future time.  payable, or which purports to transfer the
instrument to two or more indorsees severally, does
Sec. 26. What constitutes holder for value. - Where not operate as a negotiation of the instrument. But
value has at any time been given for the instrument, where the instrument has been paid in part, it may
the holder is deemed a holder for value in respect to be indorsed as to the residue. 
all parties who become such prior to that time. 
Sec. 27. When lien on instrument constitutes holder Sec. 33. Kinds of indorsement. - An indorsement
for value. — Where the holder has a lien on the may be either special or in blank; and it may also be
instrument arising either from contract or by either restrictive or qualified or conditional. 
implication of law, he is deemed a holder for value
Sec. 34. Special indorsement; indorsement in
to the extent of his lien. 
blank. - A special indorsement specifies the person
Sec. 28. Effect of want of consideration. - Absence to whom, or to whose order, the instrument is to be
or failure of consideration is a matter of defense as payable, and the indorsement of such indorsee is
against any person not a holder in due course; and necessary to the further negotiation of the
partial failure of consideration is a defense pro instrument. An indorsement in blank specifies no
tanto, whether the failure is an ascertained and indorsee, and an instrument so indorsed is payable
liquidated amount or otherwise.  to bearer, and may be negotiated by delivery. 

Sec. 29. Liability of accommodation party. - An Sec. 35. Blank indorsement; how changed to special
accommodation party is one who has signed the indorsement. - The holder may convert a blank
instrument as maker, drawer, acceptor, or indorser, indorsement into a special indorsement by writing
without receiving value therefor, and for the over the signature of the indorser in blank any
purpose of lending his name to some other person. contract consistent with the character of the
Such a person is liable on the instrument to a holder indorsement. 
for value, notwithstanding such holder, at the time
Sec. 36. When indorsement restrictive. - An
of taking the instrument, knew him to be only an
indorsement is restrictive which either:
accommodation party. 
a) Prohibits the further negotiation of the
instrument; or 
III. NEGOTIATION b) Constitutes the indorsee the agent of the
Sec. 30. What constitutes negotiation. - An indorser; or 
instrument is negotiated when it is transferred from c) Vests the title in the indorsee in trust for or to
one person to another in such manner as to the use of some other persons.
constitute the transferee the holder thereof. If But the mere absence of words implying power to
payable to bearer, it is negotiated by delivery; if negotiate does not make an indorsement restrictive. 
payable to order, it is negotiated by the indorsement Sec. 37. Effect of restrictive indorsement; rights of
of the holder and completed by delivery.  indorsee. - A restrictive indorsement confers upon
the indorsee the right:
a) to receive payment of the instrument; 
 b) to bring any action thereon that the indorser indorsee is wrongly designated or misspelled, he
could bring;  may indorse the instrument as therein described
c) to transfer his rights as such indorsee, where adding, if he thinks fit, his proper signature. 
the form of the indorsement authorizes him to
Sec. 44. Indorsement in representative capacity. -
do so.
Where any person is under obligation to indorse in a
But all subsequent indorsees acquire only the title of
representative capacity, he may indorse in such
the first indorsee under the restrictive indorsement. 
terms as to negative personal liability. robles virtual
Sec. 38. Qualified indorsement. - A qualified law library 
indorsement constitutes the indorser a mere
Sec. 45. Time of indorsement; presumption. - Except
assignor of the title to the instrument. It may be
where an indorsement bears date after the maturity
made by adding to the indorser's signature the
of the instrument, every negotiation is deemed
words "without recourse" or any words of similar
prima facie to have been effected before the
import. Such an indorsement does not impair the
instrument was overdue. 
negotiable character of the instrument. 
Sec. 46. Place of indorsement; presumption. -
Sec. 39. Conditional indorsement. - Where an
Except where the contrary appears, every
indorsement is conditional, the party required to pay
indorsement is presumed prima facie to have been
the instrument may disregard the condition and
made at the place where the instrument is dated. 
make payment to the indorsee or his transferee
whether the condition has been fulfilled or not. But Sec. 47. Continuation of negotiable character. - An
any person to whom an instrument so indorsed is instrument negotiable in its origin continues to be
negotiated will hold the same, or the proceeds negotiable until it has been restrictively indorsed or
thereof, subject to the rights of the person indorsing discharged by payment or otherwise. 
conditionally. 
Sec. 48. Striking out indorsement. - The holder may
Sec. 40. Indorsement of instrument payable to at any time strike out any indorsement which is not
bearer. - Where an instrument, payable to bearer, is necessary to his title. The indorser whose
indorsed specially, it may nevertheless be further indorsement is struck out, and all indorsers
negotiated by delivery; but the person indorsing subsequent to him, are thereby relieved from
specially is liable as indorser to only such holders as liability on the instrument. 
make title through his indorsement. 
Sec. 49. Transfer without indorsement; effect of. -
Sec. 41. Indorsement where payable to two or more Where the holder of an instrument payable to his
persons. - Where an instrument is payable to the order transfers it for value without indorsing it, the
order of two or more payees or indorsees who are transfer vests in the transferee such title as the
not partners, all must indorse unless the one transferor had therein, and the transferee acquires
indorsing has authority to indorse for the others. in addition, the right to have the indorsement of the
transferor. But for the purpose of determining
Sec. 42. Effect of instrument drawn or indorsed to a
whether the transferee is a holder in due course, the
person as cashier. - Where an instrument is drawn
negotiation takes effect as of the time when the
or indorsed to a person as "cashier"  or other fiscal
indorsement is actually made. 
officer of a bank or corporation, it is deemed prima
facie to be payable to the bank or corporation of Sec. 50. When prior party may negotiate
which he is such officer, and may be negotiated by instrument. - Where an instrument is negotiated
either the indorsement of the bank or corporation or back to a prior party, such party may, subject to the
the indorsement of the officer.  provisions of this Act, reissue and further negotiable
the same. But he is not entitled to enforce payment
Sec. 43. Indorsement where name is misspelled,
and so forth. - Where the name of a payee or
thereof against any intervening party to whom he have had actual knowledge of the infirmity or defect,
was personally liable. or knowledge of such facts that his action in taking
the instrument amounted to bad faith. 
IV. RIGHTS OF THE HOLDER Sec. 57. Rights of holder in due course. - A holder in
Sec. 51. Right of holder to sue; payment. - The due course holds the instrument free from any
holder of a negotiable instrument may to sue defect of title of prior parties, and free from
thereon in his own name; and payment to him in defenses available to prior parties among
due course discharges the instrument.  themselves, and may enforce payment of the
instrument for the full amount thereof against all
Sec. 52. What constitutes a holder in due course. - A parties liable thereon.
holder in due course is a holder who has taken the
instrument under the following conditions: Sec. 58. When subject to original defense. - In the
a) That it is complete and regular upon its face;  hands of any holder other than a holder in due
b) That he became the holder of it before it was course, a negotiable instrument is subject to the
overdue, and without notice that it has been same defenses as if it were non-negotiable. But a
previously dishonored, if such was the fact;  holder who derives his title through a holder in due
c) That he took it in good faith and for value;  course, and who is not himself a party to any fraud
d) That at the time it was negotiated to him, he or illegality affecting the instrument, has all the
had no notice of any infirmity in the instrument rights of such former holder in respect of all parties
or defect in the title of the person negotiating prior to the latter. 
it. Sec. 59. Who is deemed holder in due course. -
Sec. 53. When person not deemed holder in due Every holder is deemed prima facie to be a holder in
course. - Where an instrument payable on demand is due course; but when it is shown that the title of any
negotiated on an unreasonable length of time after person who has negotiated the instrument was
its issue, the holder is not deemed a holder in due defective, the burden is on the holder to prove that
course.  he or some person under whom he claims acquired
the title as holder in due course. But the last-
Sec. 54. Notice before full amount is paid. - Where mentioned rule does not apply in favor of a party
the transferee receives notice of any infirmity in the who became bound on the instrument prior to the
instrument or defect in the title of the person acquisition of such defective title. 
negotiating the same before he has paid the full
amount agreed to be paid therefor, he will be V. LIABILITIES OF PARTIES
deemed a holder in due course only to the extent of
the amount therefore paid by him.  Sec. 60. Liability of maker. - The maker of a
negotiable instrument, by making it, engages that he
Sec. 55. When title defective. - The title of a person will pay it according to its tenor, and admits the
who negotiates an instrument is defective within the existence of the payee and his then capacity to
meaning of this Act when he obtained the indorse. 
instrument, or any signature thereto, by fraud,
duress, or force and fear, or other unlawful means, Sec. 61. Liability of drawer. - The drawer by drawing
or for an illegal consideration, or when he negotiates the instrument admits the existence of the payee
it in breach of faith, or under such circumstances as and his then capacity to indorse; and engages that,
amount to a fraud.  on due presentment, the instrument will be
accepted or paid, or both, according to its tenor, and
Sec. 56. What constitutes notice of defect. - To that if it be dishonored and the necessary
constitutes notice of an infirmity in the instrument proceedings on dishonor be duly taken, he will pay
or defect in the title of the person negotiating the the amount thereof to the holder or to any
same, the person to whom it is negotiated must subsequent indorser who may be compelled to pay
it. But the drawer may insert in the instrument an But when the negotiation is by delivery only, the
express stipulation negativing or limiting his own warranty extends in favor of no holder other than
liability to the holder. the immediate transferee. 
The provisions of subdivision (c) of this section do
Sec. 62. Liability of acceptor. - The acceptor, by
not apply to a person negotiating public or
accepting the instrument, engages that he will pay it
corporation securities other than bills and notes. 
according to the tenor of his acceptance and admits:
a) The existence of the drawer, the genuineness Sec. 66. Liability of general indorser. - Every
of his signature, and his capacity and authority indorser who indorses without qualification,
to draw the instrument; and  warrants to all subsequent holders in due course:
b) The existence of the payee and his then a) The matters and things mentioned in
capacity to indorse. subdivisions (a), (b), and (c) of the next
preceding section; and 
Sec. 63. When a person deemed indorser. - A person
b) That the instrument is, at the time of his
placing his signature upon an instrument otherwise
indorsement, valid and subsisting;
than as maker, drawer, or acceptor, is deemed to be
And, in addition, he engages that, on due
indorser unless he clearly indicates by appropriate
presentment, it shall be accepted or paid, or both, as
words his intention to be bound in some other
the case may be, according to its tenor, and that if it
capacity. 
be dishonored and the necessary proceedings on
Sec. 64. Liability of irregular indorser. - Where a dishonor be duly taken, he will pay the amount
person, not otherwise a party to an instrument, thereof to the holder, or to any subsequent indorser
places thereon his signature in blank before delivery, who may be compelled to pay it. 
he is liable as indorser, in accordance with the
Sec. 67. Liability of indorser where paper
following rules:
negotiable by delivery. — Where a person places his
a) If the instrument is payable to the order of a
indorsement on an instrument negotiable by
third person, he is liable to the payee and to all
delivery, he incurs all the liability of an indorser. 
subsequent parties. 
b) If the instrument is payable to the order of the Sec. 68. Order in which indorsers are liable. - As
maker or drawer, or is payable to bearer, he is respect one another, indorsers are liable  prima
liable to all parties subsequent to the maker or facie  in the order in which they indorse; but
drawer.  evidence is admissible to show that, as between or
c) If he signs for the accommodation of the among themselves, they have agreed otherwise. 
payee, he is liable to all parties subsequent to Joint payees or joint indorsees who indorse are
the payee. deemed to indorse jointly and severally.

Sec. 65. Warranty where negotiation by delivery Sec. 69. Liability of an agent or broker. - Where a
and so forth. — Every person negotiating an broker or other agent negotiates an instrument
instrument by delivery or by a qualified indorsement without indorsement, he incurs all the liabilities
warrants: prescribed by Section Sixty-five of this Act, unless he
a) That the instrument is genuine and in all discloses the name of his principal and the fact that
respects what it purports to be;  he is acting only as agent. 
b) That he has a good title to it; 
c) That all prior parties had capacity to contract;  VI. PRESENTATION FOR PAYMENT
d) That he has no knowledge of any fact which
would impair the validity of the instrument or Sec. 70. Effect of want of demand on principal
render it valueless. debtor. - Presentment for payment is not necessary
in order to charge the person primarily liable on the
instrument; but if the instrument is, by its terms,
payable at a special place, and he is able and willing whom payment is demanded, and when it is paid,
to pay it there at maturity, such ability and must be delivered up to the party paying it. 
willingness are equivalent to a tender of payment
Sec. 75. Presentment where instrument payable at
upon his part. But except as herein otherwise
bank. - Where the instrument is payable at a bank,
provided, presentment for payment is necessary in
presentment for payment must be made during
order to charge the drawer and indorsers.
banking hours, unless the person to make payment
Sec. 71. Presentment where instrument is not has no funds there to meet it at any time during the
payable on demand and where payable on day, in which case presentment at any hour before
demand. - Where the instrument is not payable on the bank is closed on that day is sufficient. 
demand, presentment must be made on the day it
Sec. 76. Presentment where principal debtor is
falls due. Where it is payable on demand,
dead. - Where the person primarily liable on the
presentment must be made within a reasonable
instrument is dead and no place of payment is
time after its issue, except that in the case of a bill of
specified, presentment for payment must be made
exchange, presentment for payment will be
to his personal representative, if such there be, and
sufficient if made within a reasonable time after the
if, with the exercise of reasonable diligence, he can
last negotiation thereof. 
be found. 
Sec. 72. What constitutes a sufficient presentment. -
Sec. 77. Presentment to persons liable as partners. -
Presentment for payment, to be sufficient, must be
Where the persons primarily liable on the
made:
instrument are liable as partners and no place of
a) By the holder, or by some person authorized to
payment is specified, presentment for payment may
receive payment on his behalf;
be made to any one of them, even though there has
b) At a reasonable hour on a business day; 
been a dissolution of the firm. 
c) At a proper place as herein defined; 
d) To the person primarily liable on the Sec. 78. Presentment to joint debtors. - Where there
instrument, or if he is absent or inaccessible, to are several persons, not partners, primarily liable on
any person found at the place where the the instrument and no place of payment is specified,
presentment is made. presentment must be made to them all. 
Sec. 73. Place of presentment. - Presentment for Sec. 79. When presentment not required to charge
payment is made at the proper place: the drawer. - Presentment for payment is not
a) Where a place of payment is specified in the required in order to charge the drawer where he has
instrument and it is there presented;  no right to expect or require that the drawee or
b) Where no place of payment is specified but the acceptor will pay the instrument. 
address of the person to make payment is
given in the instrument and it is there Sec. 80. When presentment not required to charge
presented;  the indorser. - Presentment is not required in order
c) Where no place of payment is specified and no to charge an indorser where the instrument was
address is given and the instrument is made or accepted for his accommodation and he has
presented at the usual place of business or no reason to expect that the instrument will be paid
residence of the person to make payment;  if presented. 
d) In any other case if presented to the person to Sec. 81. When delay in making presentment is
make payment wherever he can be found, or if excused. - Delay in making presentment for payment
presented at his last known place of business is excused when the delay is caused by
or residence. circumstances beyond the control of the holder and
Sec. 74. Instrument must be exhibited. - The not imputable to his default, misconduct, or
instrument must be exhibited to the person from negligence. When the cause of delay ceases to
operate, presentment must be made with after the maturity of the payment to the holder
reasonable diligence.  thereof in good faith and without notice that his title
is defective. 
Sec. 82. When presentment for payment is excused. -
Presentment for payment is excused:
a) Where, after the exercise of reasonable
VII. NOTICE OF DISHONOR
diligence, presentment, as required by this Act, Sec. 89. To whom notice of dishonor must be given.
cannot be made;  - Except as herein otherwise provided, when a
b) Where the drawee is a fictitious person;  negotiable instrument has been dishonored by non-
c) By waiver of presentment, express or implied. acceptance or non-payment, notice of dishonor must
Sec. 83. When instrument dishonored by non- be given to the drawer and to each indorser, and any
payment. - The instrument is dishonored by non- drawer or indorser to whom such notice is not given
payment when: is discharged. 
a) It is duly presented for payment and payment Sec. 90. By whom given. - The notice may be given
is refused or cannot be obtained; or  by or on behalf of the holder, or by or on behalf of
b) Presentment is excused and the instrument is any party to the instrument who might be compelled
overdue and unpaid. to pay it to the holder, and who, upon taking it up,
Sec. 84. Liability of person secondarily liable, when would have a right to reimbursement from the party
instrument dishonored. - Subject to the provisions of to whom the notice is given. 
this Act, when the instrument is dishonored by non- Sec. 91. Notice given by agent. - Notice of dishonor
payment, an immediate right of recourse to all may be given by any agent either in his own name or
parties secondarily liable thereon accrues to the in the name of any party entitled to given notice,
holder. whether that party be his principal or not. 
Sec. 85. Time of maturity. - Every negotiable Sec. 92. Effect of notice on behalf of holder. - Where
instrument is payable at the time fixed therein notice is given by or on behalf of the holder, it inures
without grace. When the day of maturity falls upon to the benefit of all subsequent holders and all prior
Sunday or a holiday, the instruments falling due or parties who have a right of recourse against the
becoming payable on Saturday are to be presented party to whom it is given. 
for payment on the next succeeding business day
except that instruments payable on demand may, at Sec. 93. Effect where notice is given by party
the option of the holder, be presented for payment entitled thereto. - Where notice is given by or on
before twelve o'clock noon on Saturday when that behalf of a party entitled to give notice, it inures to
entire day is not a holiday.  the benefit of the holder and all parties subsequent
to the party to whom notice is given. 
Sec. 86. Time; how computed. - When the
instrument is payable at a fixed period after date, Sec. 94. When agent may give notice. - Where the
after sight, or after that happening of a specified instrument has been dishonored in the hands of an
event, the time of payment is determined by agent, he may either himself give notice to the
excluding the day from which the time is to begin to parties liable thereon, or he may give notice to his
run, and by including the date of payment.  principal. If he gives notice to his principal, he must
do so within the same time as if he were the holder,
Sec. 87. Rule where instrument payable at bank. - and the principal, upon the receipt of such notice,
Where the instrument is made payable at a bank, it has himself the same time for giving notice as if the
is equivalent to an order to the bank to pay the same agent had been an independent holder. 
for the account of the principal debtor thereon. 
Sec. 95. When notice sufficient. - A written notice
Sec. 88. What constitutes payment in due course. - need not be signed and an insufficient written notice
Payment is made in due course when it is made at or
may be supplemented and validated by verbal notice reside in the same place, notice must be given
communication. A misdescription of the instrument within the following times:
does not vitiate the notice unless the party to whom a) If given at the place of business of the person
the notice is given is in fact misled thereby.  to receive notice, it must be given before the
close of business hours on the day following. 
Sec. 96. Form of notice. - The notice may be in
b) If given at his residence, it must be given
writing or merely oral and may be given in any terms
before the usual hours of rest on the day
which sufficiently identify the instrument, and
following. 
indicate that it has been dishonored by non-
c) If sent by mail, it must be deposited in the post
acceptance or non-payment. It may in all cases be
office in time to reach him in usual course on
given by delivering it personally or through the
the day following.
mails. 
Sec. 104. Where parties reside in different places. -
Sec. 97. To whom notice may be given. - Notice of
Where the person giving and the person to receive
dishonor may be given either to the party himself or
notice reside in different places, the notice must be
to his agent in that behalf. 
given within the following times:
Sec. 98. Notice where party is dead. - When any
a) If sent by mail, it must be deposited in the post
party is dead and his death is known to the party
office in time to go by mail the day following
giving notice, the notice must be given to a personal
the day of dishonor, or if there be no mail at a
representative, if there be one, and if with
convenient hour on last day, by the next mail
reasonable diligence, he can be found. If there be no
thereafter. 
personal representative, notice may be sent to the
b) If given otherwise than through the post office,
last residence or last place of business of the
then within the time that notice would have
deceased. 
been received in due course of mail, if it had
Sec. 99. Notice to partners. - Where the parties to been deposited in the post office within the
be notified are partners, notice to any one partner is time specified in the last subdivision.
notice to the firm, even though there has been a
Sec. 105. When sender deemed to have given due
dissolution. 
notice. - Where notice of dishonor is duly addressed
Sec. 100. Notice to persons jointly liable. - Notice to and deposited in the post office, the sender is
joint persons who are not partners must be given to deemed to have given due notice, notwithstanding
each of them unless one of them has authority to any miscarriage in the mails. 
receive such notice for the others. 
Sec. 106. Deposit in post office; what constitutes. -
Sec. 101. Notice to bankrupt. - Where a party has Notice is deemed to have been deposited in the
been adjudged a bankrupt or an insolvent, or has post-office when deposited in any branch post office
made an assignment for the benefit of creditors, or in any letter box under the control of the post-
notice may be given either to the party himself or to office department. 
his trustee or assignee. 
Sec. 107. Notice to subsequent party; time of. -
Sec. 102. Time within which notice must be given. - Where a party receives notice of dishonor, he has,
Notice may be given as soon as the instrument is after the receipt of such notice, the same time for
dishonored and, unless delay is excused as giving notice to antecedent parties that the holder
hereinafter provided, must be given within the time has after the dishonor. 
fixed by this Act. 
Sec. 108. Where notice must be sent. - Where a
Sec. 103. Where parties reside in same place. party has added an address to his signature, notice
- Where the person giving and the person to receive of dishonor must be sent to that address; but if he
has not given such address, then the notice must be
sent as follows:
 a) Either to the post-office nearest to his place of c) When the drawer is the person to whom the
residence or to the post-office where he is instrument is presented for payment; 
accustomed to receive his letters; or  d) Where the drawer has no right to expect or
b) If he lives in one place and has his place of require that the drawee or acceptor will honor
business in another, notice may be sent to the instrument; 
either place; or  e) Where the drawer has countermanded
c) If he is sojourning in another place, notice may payment.
be sent to the place where he is so sojourning.
But where the notice is actually received by the Sec. 115. When notice need not be given to
party within the time specified in this Act, it will be indorser. — Notice of dishonor is not required to be
sufficient, though not sent in accordance with the given to an indorser in either of the following cases:
requirement of this section.  a) When the drawee is a fictitious person or
person not having capacity to contract, and the
Sec. 109. Waiver of notice. - Notice of dishonor may indorser was aware of that fact at the time he
be waived either before the time of giving notice has indorsed the instrument; 
arrived or after the omission to give due notice, and b) Where the indorser is the person to whom the
the waiver may be expressed or implied.  instrument is presented for payment; 
c) Where the instrument was made or accepted
Sec. 110. Whom affected by waiver. - Where the
for his accommodation.
waiver is embodied in the instrument itself, it is
binding upon all parties; but, where it is written Sec. 116. Notice of non-payment where acceptance
above the signature of an indorser, it binds him refused. - Where due notice of dishonor by non-
only.  acceptance has been given, notice of a subsequent
dishonor by non-payment is not necessary unless in
Sec. 111. Waiver of protest. - A waiver of protest,
the meantime the instrument has been accepted. 
whether in the case of a foreign bill of exchange or
other negotiable instrument, is deemed to be a Sec. 117. Effect of omission to give notice of non-
waiver not only of a formal protest but also of acceptance. - An omission to give notice of dishonor
presentment and notice of dishonor.  by non-acceptance does not prejudice the rights of a
holder in due course subsequent to the omission. 
Sec. 112. When notice is dispensed with. - Notice of
dishonor is dispensed with when, after the exercise Sec. 118. When protest need not be made; when
of reasonable diligence, it cannot be given to or does must be made. - Where any negotiable instrument
not reach the parties sought to be charged.  has been dishonored, it may be protested for non-
acceptance or non-payment, as the case may be; but
Sec. 113. Delay in giving notice; how excused. -
protest is not required except in the case of foreign
Delay in giving notice of dishonor is excused when
bills of exchange.
the delay is caused by circumstances beyond the
control of the holder and not imputable to his
default, misconduct, or negligence. When the cause
VIII. DISCHARGE OF
of delay ceases to operate, notice must be given NEGOTIABLE INSTRUMENTS
with reasonable diligence.  Sec. 119. Instrument; how discharged. - A negotiable
Sec. 114. When notice need not be given to drawer. - instrument is discharged:
Notice of dishonor is not required to be given to the a) By payment in due course by or on behalf of
drawer in either of the following cases: the principal debtor; 
a) Where the drawer and drawee are the same b) By payment in due course by the party
person; accommodated, where the instrument is made
b) When the drawee is fictitious person or a or accepted for his accommodation; 
person not having capacity to contract; 
 c) By the intentional cancellation thereof by the instrument is delivered up to the person primarily
holder;  liable thereon. 
d) By any other act which will discharge a simple
Sec. 123. Cancellation; unintentional; burden of
contract for the payment of money; 
proof. - A cancellation made unintentionally or
e) When the principal debtor becomes the holder
under a mistake or without the authority of the
of the instrument at or after maturity in his
holder, is inoperative but where an instrument or
own right.
any signature thereon appears to have been
Sec. 120. When persons secondarily liable on the cancelled, the burden of proof lies on the party who
instrument are discharged. - A person secondarily alleges that the cancellation was made
liable on the instrument is discharged: unintentionally or under a mistake or without
a) By any act which discharges the instrument;  authority. 
b) By the intentional cancellation of his signature
Sec. 124. Alteration of instrument; effect of. -
by the holder; 
Where a negotiable instrument is materially altered
c) By the discharge of a prior party; 
without the assent of all parties liable thereon, it is
d) By a valid tender or payment made by a prior
avoided, except as against a party who has himself
party; 
made, authorized, or assented to the alteration and
e) By a release of the principal debtor unless the
subsequent indorsers.
holder's right of recourse against the party
But when an instrument has been materially altered
secondarily liable is expressly reserved;
and is in the hands of a holder in due course not a
f) By any agreement binding upon the holder to
party to the alteration, he may enforce payment
extend the time of payment or to postpone the
thereof according to its original tenor. 
holder's right to enforce the instrument unless
made with the assent of the party secondarily Sec. 125. What constitutes a material alteration.
liable or unless the right of recourse against - Any alteration which changes:
such party is expressly reserved. a) The date;
b) The sum payable, either for principal or
Sec. 121. Right of party who discharges
interest;
instrument. - Where the instrument is paid by a
c) The time or place of payment:
party secondarily liable thereon, it is not discharged;
d) The number or the relations of the parties; 
but the party so paying it is remitted to his former
e) The medium or currency in which payment is
rights as regard all prior parties, and he may strike
to be made; 
out his own and all subsequent indorsements and
f) Or which adds a place of payment where no
against negotiate the instrument, except:
place of payment is specified, or any other
a) Where it is payable to the order of a third
change or addition which alters the effect of
person and has been paid by the drawer; and 
the instrument in any respect, is a material
b) Where it was made or accepted for
alteration.
accommodation and has been paid by the
party accommodated.
BILLS OF EXCHANGE
Sec. 122. Renunciation by holder. - The holder may
expressly renounce his rights against any party to IX. FORM AND INTERPRETATION
the instrument before, at, or after its maturity. An
absolute and unconditional renunciation of his rights Sec. 126. Bill of exchange, defined. - A bill of
against the principal debtor made at or after the exchange is an unconditional order in writing
maturity of the instrument discharges the addressed by one person to another, signed by the
instrument. But a renunciation does not affect the person giving it, requiring the person to whom it is
rights of a holder in due course without notice. A addressed to pay on demand or at a fixed or
renunciation must be in writing unless the
determinable future time a sum certain in money to Sec. 133. Holder entitled to acceptance on face of
order or to bearer.  bill. - The holder of a bill presenting the same for
acceptance may require that the acceptance be
Sec. 127. Bill not an assignment of funds in hands
written on the bill, and, if such request is refused,
of drawee. - A bill of itself does not operate as an
may treat the bill as dishonored. 
assignment of the funds in the hands of the drawee
available for the payment thereof, and the drawee is Sec. 134. Acceptance by separate instrument.
not liable on the bill unless and until he accepts the - Where an acceptance is written on a paper other
same.  than the bill itself, it does not bind the acceptor
except in favor of a person to whom it is shown and
Sec. 128. Bill addressed to more than one drawee.
who, on the faith thereof, receives the bill for value. 
- A bill may be addressed to two or more drawees
jointly, whether they are partners or not; but not to
Sec. 135. Promise to accept; when equivalent to
two or more drawees in the alternative or in
acceptance. - An unconditional promise in writing to
succession. 
accept a bill before it is drawn is deemed an actual
Sec. 129. Inland and foreign bills of exchange. - An acceptance in favor of every person who, upon the
inland bill of exchange is a bill which is, or on its face faith thereof, receives the bill for value. 
purports to be, both drawn and payable within the
Sec. 136. Time allowed drawee to accept. - The
Philippines. Any other bill is a foreign bill. Unless the
drawee is allowed twenty-four hours after
contrary appears on the face of the bill, the holder
presentment in which to decide whether or not he
may treat it as an inland bill. 
will accept the bill; the acceptance, if given, dates as
Sec. 130. When bill may be treated as promissory of the day of presentation. 
note. - Where in a bill the drawer and drawee are
Sec. 137. Liability of drawee returning or destroying
the same person or where the drawee is a fictitious
bill. - Where a drawee to whom a bill is delivered for
person or a person not having capacity to contract,
acceptance destroys the same, or refuses within
the holder may treat the instrument at his option
twenty-four hours after such delivery or within such
either as a bill of exchange or as a promissory note. 
other period as the holder may allow, to return the
Sec. 131. Referee in case of need. - The drawer of a bill accepted or non-accepted to the holder, he will
bill and any indorser may insert thereon the name of be deemed to have accepted the same. 
a person to whom the holder may resort in case of
Sec. 138. Acceptance of incomplete bill. - A bill may
need; that is to say, in case the bill is dishonored by
be accepted before it has been signed by the
non-acceptance or non-payment. Such person is
drawer, or while otherwise incomplete, or when it is
called a referee in case of need. It is in the option of
overdue, or after it has been dishonored by a
the holder to resort to the referee in case of need or
previous refusal to accept, or by non payment. But
not as he may see fit. 
when a bill payable after sight is dishonored by non-
acceptance and the drawee subsequently accepts it,
X. ACCEPTANCE the holder, in the absence of any different
Sec. 132. Acceptance; how made, by and so forth. - agreement, is entitled to have the bill accepted as of
The acceptance of a bill is the signification by the the date of the first presentment. 
drawee of his assent to the order of the drawer. The Sec. 139. Kinds of acceptance. - An acceptance is
acceptance must be in writing and signed by the either general or qualified. A general acceptance
drawee. It must not express that the drawee will assents without qualification to the order of the
perform his promise by any other means than the drawer. A qualified acceptance in express terms
payment of money.  varies the effect of the bill as drawn. 
Sec. 140. What constitutes a general acceptance. - In no other case is presentment for acceptance
An acceptance to pay at a particular place is a necessary in order to render any party to the bill
general acceptance unless it expressly states that the liable. 
bill is to be paid there only and not elsewhere. 
Sec. 144. When failure to present releases drawer
Sec. 141. Qualified acceptance. - An acceptance is and indorser. - Except as herein otherwise provided,
qualified which is: the holder of a bill which is required by the next
a) Conditional; that is to say, which makes preceding section to be presented for acceptance
payment by the acceptor dependent on the must either present it for acceptance or negotiate it
fulfillment of a condition therein stated;  within a reasonable time. If he fails to do so, the
b) Partial; that is to say, an acceptance to pay part drawer and all indorsers are discharged. 
only of the amount for which the bill is drawn; 
Sec. 145. Presentment; how made. - Presentment
c) Local; that is to say, an acceptance to pay only
for acceptance must be made by or on behalf of the
at a particular place;
holder at a reasonable hour, on a business day and
d) Qualified as to time; 
before the bill is overdue, to the drawee or some
e) The acceptance of some, one or more of the
person authorized to accept or refuse acceptance on
drawees but not of all.
his behalf; and
Sec. 142. Rights of parties as to qualified a) Where a bill is addressed to two or more
acceptance. - The holder may refuse to take a drawees who are not partners, presentment
qualified acceptance and if he does not obtain an must be made to them all unless one has
unqualified acceptance, he may treat the bill as authority to accept or refuse acceptance for all,
dishonored by non-acceptance. Where a qualified in which case presentment may be made to
acceptance is taken, the drawer and indorsers are him only;
discharged from liability on the bill unless they have b) Where the drawee is dead, presentment may
expressly or impliedly authorized the holder to take be made to his personal representative; 
a qualified acceptance, or subsequently assent c) Where the drawee has been adjudged a
thereto. When the drawer or an indorser receives bankrupt or an insolvent or has made an
notice of a qualified acceptance, he must, within a assignment for the benefit of creditors,
reasonable time, express his dissent to the holder or presentment may be made to him or to his
he will be deemed to have assented thereto.  trustee or assignee.

Sec. 146. On what days presentment may be

XI. PRESENTMENT FOR ACCEPTANCE made.  - A bill may be presented for acceptance on
Sec. 143. When presentment for acceptance must any day on which negotiable instruments may be
be made. - Presentment for acceptance must be presented for payment under the provisions of
made: Sections seventy-two and eighty-five of this Act.
a) Where the bill is payable after sight, or in any When Saturday is not otherwise a holiday,
other case, where presentment for acceptance presentment for acceptance may be made before
is necessary in order to fix the maturity of the twelve o'clock noon on that day. 
instrument; or  Sec. 147. Presentment where time is insufficient. -
b) Where the bill expressly stipulates that it shall Where the holder of a bill drawn payable elsewhere
be presented for acceptance; or  than at the place of business or the residence of the
c) Where the bill is drawn payable elsewhere drawee has no time, with the exercise of reasonable
than at the residence or place of business of diligence, to present the bill for acceptance before
the drawee. presenting it for payment on the day that it falls due,
the delay caused by presenting the bill for
acceptance before presenting it for payment is
excused and does not discharge the drawers and foreign bill, protest thereof in case of dishonor is
indorsers.  unnecessary. 

Sec. 148. Where presentment is excused. Sec. 153. Protest; how made. - The protest must be
- Presentment for acceptance is excused and a bill annexed to the bill or must contain a copy thereof,
may be treated as dishonored by non-acceptance in and must be under the hand and seal of the notary
either of the following cases: making it and must specify:
a) Where the drawee is dead, or has absconded, a) The time and place of presentment; 
or is a fictitious person or a person not having b) The fact that presentment was made and the
capacity to contract by bill.  manner thereof; 
b) Where, after the exercise of reasonable c) The cause or reason for protesting the bill; 
diligence, presentment can not be made.  d) The demand made and the answer given, if
c) Where, although presentment has been any, or the fact that the drawee or acceptor
irregular, acceptance has been refused on could not be found.
some other ground.
Sec. 154. Protest, by whom made.  - Protest may be
Sec. 149. When dishonored by nonacceptance. - A made by:
bill is dishonored by non-acceptance: a) A notary public; or
a) When it is duly presented for acceptance and b) By any respectable resident of the place where
such an acceptance as is prescribed by this Act the bill is dishonored, in the presence of two or
is refused or can not be obtained; or  more credible witnesses.
b) When presentment for acceptance is excused
Sec. 155. Protest; when to be made. - When a bill is
and the bill is not accepted.
protested, such protest must be made on the day of
Sec. 150. Duty of holder where bill not accepted. its dishonor unless delay is excused as herein
- Where a bill is duly presented for acceptance and is provided. When a bill has been duly noted, the
not accepted within the prescribed time, the person protest may be subsequently extended as of the
presenting it must treat the bill as dishonored by date of the noting. 
nonacceptance or he loses the right of recourse Sec. 156. Protest; where made. - A bill must be
against the drawer and indorsers.  protested at the place where it is dishonored, except
that when a bill drawn payable at the place of
Sec. 151. Rights of holder where bill not accepted. -
business or residence of some person other than the
When a bill is dishonored by nonacceptance, an
drawee has been dishonored by nonacceptance, it
immediate right of recourse against the drawer and
must be protested for non-payment at the place
indorsers accrues to the holder and no presentment
where it is expressed to be payable, and no further
for payment is necessary. 
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 payment. - A bill which has been protested for non-
a foreign bill appearing on its face to be such is acceptance may be subsequently protested for non-
dishonored by nonacceptance, it must be duly payment. 
protested for nonacceptance, by nonacceptance is
dishonored and where such a bill which has not Sec. 158. Protest before maturity where acceptor
previously been dishonored by nonpayment, it must insolvent. - Where the acceptor has been adjudged a
be duly protested for nonpayment. If it is not so bankrupt or an insolvent or has made an assignment
protested, the drawer and indorsers are discharged. for the benefit of creditors before the bill matures,
Where a bill does not appear on its face to be a the holder may cause the bill to be protested for
better security against the drawer and indorsers. 
Sec. 159. When protest dispensed with. - Protest is Sec. 165. Agreement of acceptor for honor. - The
dispensed with by any circumstances which would acceptor for honor, by such acceptance, engages
dispense with notice of dishonor. Delay in noting or that he will, on due presentment, pay the bill
protesting is excused when delay is caused by according to the terms of his acceptance provided it
circumstances beyond the control of the holder and shall not have been paid by the drawee and provided
not imputable to his default, misconduct, or also that is shall have been duly presented for
negligence. When the cause of delay ceases to payment and protested for non-payment and notice
operate, the bill must be noted or protested with of dishonor given to him. 
reasonable diligence. 
Sec. 166. Maturity of bill payable after sight;
Sec. 160. Protest where bill is lost and so forth. - accepted for honor. - Where a bill payable after sight
When a bill is lost or destroyed or is wrongly is accepted for honor, its maturity is calculated from
detained from the person entitled to hold it, protest the date of the noting for non-acceptance and not
may be made on a copy or written particulars from the date of the acceptance for honor. 
thereof. 
Sec. 167. Protest of bill accepted for honor, and so
forth. - Where a dishonored bill has been accepted
XIII. ACCEPTANCE FOR HONOR for honor supra protest or contains a referee in case
Sec. 161. When bill may be accepted for honor. - of need, it must be protested for non-payment
When a bill of exchange has been protested for before it is presented for payment to the acceptor
dishonor by non-acceptance or protested for better for honor or referee in case of need. 
security and is not overdue, any person not being a Sec. 168. Presentment for payment to acceptor for
party already liable thereon may, with the consent honor, how made. - Presentment for payment to the
of the holder, intervene and accept the acceptor for honor must be made as follows:
bill supra protest for the honor of any party liable a) If it is to be presented in the place where the
thereon or for the honor of the person for whose protest for non-payment was made, it must be
account the bill is drawn. The acceptance for honor presented not later than the day following its
may be for part only of the sum for which the bill is maturity.
drawn; and where there has been an acceptance for b) If it is to be presented in some other place than
honor for one party, there may be a further the place where it was protested, then it must
acceptance by a different person for the honor of be forwarded within the time specified in
another party.  Section one hundred and four.
Sec. 162. Acceptance for honor; how made. - An Sec. 169. When delay in making presentment is
acceptance for honor supra protest must be in excused. - The provisions of Section eighty-one apply
writing and indicate that it is an acceptance for where there is delay in making presentment to the
honor and must be signed by the acceptor for honor. acceptor for honor or referee in case of need. 
Sec. 163. When deemed to be an acceptance for Sec. 170. Dishonor of bill by acceptor for honor. -
honor of the drawer. - Where an acceptance for When the bill is dishonored by the acceptor for
honor does not expressly state for whose honor it is honor, it must be protested for non-payment by
made, it is deemed to be an acceptance for the him. 
honor of the drawer. 

Sec. 164. Liability of the acceptor for honor. - The XIV. PAYMENT FOR HONOR
acceptor for honor is liable to the holder and to all
Sec. 171.  Who may make payment for honor.  -
parties to the bill subsequent to the party for whose
Where a bill has been protested for non-payment,
honor he has accepted. 
any person may intervene and pay it supraprotest
for the honor of any person liable thereon or for the
honor of the person for whose account it was Sec. 179. Right of holders where different parts are
drawn.  negotiated. - Where two or more parts of a set are
negotiated to different holders in due course, the
Sec. 172. Payment for honor; how made.  - The
holder whose title first accrues is, as between such
payment for honor supra protest, in order to
holders, the true owner of the bill.  But nothing in
operate as such and not as a mere voluntary
this section affects the right of a person who, in due
payment, must be attested by a notarial act of honor
course, accepts or pays the parts first presented to
which may be appended to the protest or form an
him. 
extension to it. 
Sec. 180. Liability of holder who indorses two or
Sec. 173. Declaration before payment for honor.
more parts of a set to different persons. - Where the
- The notarial act of honor must be founded on a
holder of a set indorses two or more parts to
declaration made by the payer for honor or by his
different persons he is liable on every such part, and
agent in that behalf declaring his intention to pay
every indorser subsequent to him is liable on the
the bill for honor and for whose honor he pays. 
part he has himself indorsed, as if such parts were
Sec. 174. Preference of parties offering to pay for separate bills. 
honor. - Where two or more persons offer to pay a
Sec. 181. Acceptance of bill drawn in sets. - The
bill for the honor of different parties, the person
acceptance may be written on any part and it must
whose payment will discharge most parties to the
be written on one part only. If the drawee accepts
bill is to be given the preference. 
more than one part and such accepted parts
Sec. 175. Effect on subsequent parties where bill is negotiated to different holders in due course, he is
paid for honor. - Where a bill has been paid for liable on every such part as if it were a separate bill. 
honor, all parties subsequent to the party for whose
Sec. 182. Payment by acceptor of bills drawn in
honor it is paid are discharged but the payer for
sets. - When the acceptor of a bill drawn in a set
honor is subrogated for, and succeeds to, both the
pays it without requiring the part bearing his
rights and duties of the holder as regards the party
acceptance to be delivered up to him, and the part
for whose honor he pays and all parties liable to the
at maturity is outstanding in the hands of a holder in
latter. 
due course, he is liable to the holder thereon. 
Sec. 176. Where holder refuses to receive payment
Sec. 183. Effect of discharging one of a set. - Except
supra protest. - Where the holder of a bill refuses to
as herein otherwise provided, where any one part of
receive payment supra  protest, he loses his right of
a bill drawn in a set is discharged by payment or
recourse against any party who would have been
otherwise, the whole bill is discharged. 
discharged by such payment. 
 
Sec. 177. Rights of payer for honor. - The payer for XVI. PROMISSORY NOTES AND CHECKS
honor, on paying to the holder the amount of the bill
and the notarial expenses incidental to its dishonor, Sec. 184. Promissory note, defined. - A negotiable
is entitled to receive both the bill itself and the promissory note within the meaning of this Act is an
protest.  unconditional promise in writing made by one
person to another, signed by the maker, engaging to
pay on demand, or at a fixed or determinable future
XV. BILLS IN SET
time, a sum certain in money to order or to bearer.
Sec. 178. Bills in set constitute one bill. - Where a Where a note is drawn to the maker's own order, it
bill is drawn in a set, each part of the set being is not complete until indorsed by him. 
numbered and containing a reference to the other
Sec. 185. Check, defined. - A check is a bill of
parts, the whole of the parts constitutes one bill. 
exchange drawn on a bank payable on demand.
Except as herein otherwise provided, the provisions
of this Act applicable to a bill of exchange payable on "Holder"  means the payee or indorsee of a bill or
demand apply to a check.  note who is in possession of it, or the bearer
thereof; 
Sec. 186. Within what time a check must be
presented. - A check must be presented for payment "Indorsement" means an indorsement completed by
within a reasonable time after its issue or the drawer delivery; 
will be discharged from liability thereon to the "Instrument" means negotiable instrument; 
extent of the loss caused by the delay. 
"Issue"  means the first delivery of the instrument,
Sec. 187. Certification of check; effect of. - Where a complete in form, to a person who takes it as a
check is certified by the bank on which it is drawn, holder; 
the certification is equivalent to an acceptance. 
"Person"  includes a body of persons, whether
Sec. 188. Effect where the holder of check procures incorporated or not; 
it to be certified. - Where the holder of a check
"Value" means valuable consideration; 
procures it to be accepted or certified, the drawer
and all indorsers are discharged from liability "Written"  includes printed, and "writing"  includes
thereon.  print.

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

Sec. 198. Time when Act takes effect. - This Act shall

take effect ninety days after its publication in the
Official Gazette of the Philippine Islands shall have
been completed.