AN ACT ENTITLED "THE NEGOTIABLE INSTRUMENTS affecting 

negotiability. —An instrument which contains

LAW." an order or promise to do any act in f addition to the
By authority of the United States, be it enacted by the payment of money is not negotiable.   But the negotiable
Philippine Legislature, that: character of an instrument otherwise negotiable is not
affected by a provision which—
TITLE I. (a) Authorizes the sale of collateral securities in case the
instrument be not paid at maturity; or
NEGOTIABLE INSTRUMENTS  IN  GENERAL. (b) Authorizes a confession of judgment if the instrument
be not paid at maturity; or
CHAPTER I. (c)   Waives the benefit of any law intended for the
advantage or protection of the obligor; or
FORM  AND  INTERPRETATION. (d)   Gives the holder an election to require something to
be done in lieu of payment of money.
SECTION 1. Form of negotiable instrument. —An But nothing in this section shall validate any provision or
instrument to be negotiable must conform to the following stipulation otherwise illegal.
requirements:
(a)  It must be in writing and signed by the maker or SEC. 6. Omissions; seal; particular money.—The validity
drawer; and negotiable character of an instrument are not affected
(b) Must contain an unconditional promise or order to pay a by the fact that—
sum certain in money; (a)  It is not dated; or
(c) Must be payable on demand, or at a fixed or (b) Does not specify the value given, or that any value has
determinable future time; been given therefor; or
(d) Must be payable to order or to bearer; and (c)   Does not specify the place where it is drawn or the
(e) Where the instrument is addressed to a drawee, he place where it is payable; or
must be named or otherwise indicated therein with (d)   Bears a seal; or
reasonable certainty. (e)   Designates a particular kind of current money in which
SEC. 2. Certainly as to sum; what constitutes. —The payment is to be made.
sum payable sum is a sum certain within the meaning of But nothing in this section shall alter or repeal any statute
this Act, although it is to be paid— requiring in certain cases the nature of the consideration to
(a) With interest; or be stated in the instrument.
(b)  By stated installments or
(c)   By stated installments, with a provision that upon SEC. 7. When payable on demand.—An instrument is
default in payment of any installment or of interest the payable on demand—
whole shall become due; or (a) Where it is expressed to be payable on demand, or at
(d) With exchange, whether at a fixed rate or at the current sight, or on presentation; or
rate; or (b)  In which no time for payment is expressed.
(e)   With costs of collection or an attorney's fee, in case Where an instrument is issued, accepted, or indorsed
payment shall not be made at maturity. when overdue, it is, as regards the person so issuing,
SEC. 3. When promise is unconditional. —An accepting, or indorsing it, payable on demand.
unqualified order or promise to pay is unconditional within
the meaning of this Act, though coupled with— SEC. 8. When payable to order.—The instrument is
(a) An indication of a particular fund out of which payable to order where it is drawn payable to the order of a
reimbursement is to be made, or a particular account to be specified person or to him or his order.   It may be drawn
debited with the amount; or payable to the order of—
(b) A statement of the transaction which gives rise to the (a)   A payee who is not maker, drawer, or drawee; or
instrument. (b)   The drawer or maker; or
But an order or promise to pay out of a particular fund is (c)   The drawee; or
not unconditional. (d)   Two or more payees jointly; or
(e)   One or some of several payees; or
SEC. 4. Determinable future time; what constitutes. — (f)  The holder of an office for the time being.
An instrument is payable at a determinable future time, Where the instrument is payable to order the payee must
within the meaning of this Act, which is expressed to be be named or otherwise indicated therein with reasonable
payable— certainty.
(a) At a fixed period after date or sight; or
(b) On or before a fixed or determinable future time SEC. 9. When payable to bearer.—The instrument is
specified therein; or payable to bearer—
(c) On or at a fixed period after the occurrence of a (a) When it is expressed to be so payable; or
specified event, which is certain to happen, though the time (b)  When it is payable to a person named therein or
of happening be uncertain. bearer; or (c) When it is payable to the order of a fictitious
An instrument payable upon a contingency is not or person, and such fact was known to the person making
negotiable, and the happening of the event does not cure it so payable; or
the defect. (d)  When the name of the payee does not purport to be
the name of any person; or
SEC. 5. Additional provisions not
(e) When the only or last indorsement is an indorsement in been conditional, or for a special purpose only, and not for
blank, sufficient terms. the purpose of transferring the property in the instrument.
SEC. 10. Terms, when sufficient.—The instrument need But where the instrument is in the hands of a holder in due
not follow the language of this Act, but any terms are course, a valid delivery thereof by all parties prior to him so
sufficient which clearly indicate an intention to conform to as to make them liable to him is conclusively presumed.
the requirements hereof. And where the instrument is no longer in the possession of
a party whose signature appears thereon, a valid and
SEC. 11. Date, presumption as to.—Where the instrument intentional delivery by him is presumed until the contrary is
or an acceptance or any indorsement thereon is dated, proved.
such date is deemed prima facie to be the true date of the
making, drawing, acceptance, or indorsement, as the case SEC. 17. Construction where instrument is ambiguous.—
may be. Where construction. the language of the instrument is
ambiguous or there are omissions therein, the following
SEC. 12. Antedated and postdated.—The instrument is not rules of construction apply:
invalid for the reason only that it is antedated or postdated, (a)   Where the sum payable is expressed in words and
provided this is not done for an illegal or fraudulent also in figures and there is a discrepancy between the two,
purpose.   The person to whom an instrument so dated is the sum denoted by the words is the sum payable; but if
delivered acquires the title thereto as of the date of the words are ambiguous or uncertain, reference may be
delivery. had to the figures to fix the amount;
(b)   Where the instrument provides for the payment of
SEC. 13.  When date may be inserted.—Where an interest, without  specifying the date  from which interest is
instrument expressed to be payable at a fixed period after to run, the interest runs from the date of the instrument,
date is issued undated, or where the acceptance of an and if the instrument is undated, from the issue thereof;
instrument payable at a fixed period after sight is undated, (c)   Where the instrument is not dated, it will be
any holder may insert therein the true date of issue or considered to be dated as of the time it was issued;
acceptance, and the instrument shall be payable (d)   Where there is a conflict between the written and
accordingly.   The insertion of a wrong date does not avoid printed provisions of the instrument, the written provisions
the instrument in the hands of a subsequent holder in due prevail;
course; but as to him, the date so inserted is to be (e)   Where the instrument is so ambiguous that there is
regarded as the true date. doubt whether it is a bill or note, the holder may treat it as
either at his election;
SEC. 14. Blanks; when may be filled.—Where the (f) Where a signature is so placed upon the instrument that
instrument is wanting in any material particular, the person it is not clear in what capacity the person making the same
in possession thereof has a prima facie authority to intended to sign, he is to be deemed an indorser;
complete it by filling up the blanks therein. And a signature (g) Where an instrument containing the words "I promise to
on a blank paper delivered by the person making the pay" is signed by two or more persons, they are deemed to
signature in order that the paper may be converted into a be jointly and severally liable thereon.
negotiable instrument operates as a prima facie authority SEC. 18. Liability of person signing in trade or assumed
to fill it up as such for any amount. In order, however, that name.— No person is liable on the instrument whose
any such instrument when completed may be enforced signature does not appear thereon, except as herein
against any person who became a party thereto prior to its otherwise expressly provided.   But one who signs in a
completion, it must be filled up strictly in accordance with trade or assumed name will be liable to the same extent as
the authority given and within a reasonable time.   But if if he had signed in his own name.
any such instrument, after completion, is negotiated to a
holder in due course, it is valid  and effectual for all SEC. 19. Signature by agent; authority; how shown.—The
purposes in his hands, and he may enforce it as if it had signature of any party may be made by a duly authorized
been filled up strictly in accordance with  the authority agent.   No particular form of appointment is necessary for
given and within a reasonable time. this purpose; and the authority of the agent may be
established as in other cases of agency.
SEC. 15. Incomplete instrument not delivered.—Where an
incomplete instrument has not been delivered it will not, if SEC. 20. Liability of person signing as agent, and so forth.
completed and negotiated, without authority, be a valid —  Where the instrument contains or a person adds to his
contract in the hands of any holder, as against any person signature words indicating that he signs for or on behalf of
whose signature was placed thereon before delivery. a principal, or in a representative capacity, he is not liable
on the instrument if he was duly authorized; but the mere
SEC. 16. Delivery; when effectual: when presumed.— addition of words describing him as an agent, or as filling a
Every contract on a negotiable instrument is incomplete representative character, without disclosing his"principal,
and revocable until delivery of the instrument for the does not exempt him from personal liability.
purpose of giving effect thereto. As between immediate
parties, and as regards a remote party other than a holder SEC.  21. Signature by procuration; effect of.—A signature
in due course, the delivery, in order to be effectual, must by uration. "procuration" operates as notice that the agent
be made either by or under the authority of the party has but a limited authority to  sign, and the principal is
making, drawing, accepting, or indorsing, as the case may bound only in ease the agent in so signing acted within the
be; and in such case the delivery may be shown to have actual limits of his authority.
 negotiated when it is transferred from one person to
SEC. 22. Effect of indorsement by infant or corporation.— another in such manner as to constitute the transferee the
The corporation, indorsement or assignment of the holder thereof. If payable to bearer, it is negotiated by
instrument by a corporation or by an infant passes the delivery; if payable to order, it is negotiated by the
property therein, notwithstanding that from want, of indorsement of the holder completed by delivery.
capacity the corporation or infant may incur no liability
thereon. SEC. 31. Indorsement; how made.— The indorsment must
be written on the instrument itself or upon a paper attached
SEC. 23. Forged signature; effect of.—When a signature is thereto.   The signature of the indorser, without additional
forged or made without the authority of the person whose words, is a sufficient indorsement.
signature it purports to be, it is wholly inoperative, and no
right to retain the instrument, or to give a discharge SEC. 32. Indorsement must be of entire instrument.— The
therefor, or to enforce payment thereof against any party indorsement must be an indorsement of the entire
thereto, can be acquired through or under such signature, instrument.   An indorsement which purports to transfer to
unless the party against whom it is sought to enforce such the indorsee a part only of the amount payable, or which
right is precluded from setting up the forgery or want of purports to transfer the instrument to two or more
authority. indorsees severally, does not operate as a negotiation of
the instrument.   But where the instrument has been paid in
CHAPTER II. part, it may be indorsed as to the residue.

CONSIDERATION. SEC. 33. Kinds of indorsement.— An indorsement may be

either special or in blank; and it may also be either
SEC. 24. Presumption of consideration.—Every negotiable restrictive or qualified, or conditional.
instrument is deemed prima facie to have been issued for a
valuable consideration; and every person whose signature SEC. 34. Special indorsement; indorsement in blank.— A
appears thereon to have become a party thereto for value. special in indorsement specifies the person to whom, or to
whose order, the blank' instrument is to be payable; and
SEC. 25. Value, what constitutes.—Value is any the indorsement of such indorsee is necessary to the
consideration sufficient to support a simple contract.   An further negotiation of the instrument.   An indorsement in
antecedent or preexisting debt constitutes value; and is blank specifies no indorsee,  and an instrument so
deemed such whether the instrument is payable on indorsed is payable to bearer, and may be negotiated by
demand or at a future time. delivery.

SEC. 26. What constitutes holder for value.—Where value SEC. 35. Blank indorsement; how changed to special
has at any time been given for the instrument, the holder is indorsement.— The holder may convert a blank
deemed a holder for value in respect to all parties who indorsement into a special indorsement by writing over the
became such prior to that time. signature of the indorser in blank any contract consistent
with the character of the indorsement.
SEC. 27. When lien on instrument constitutes holder for
value.— Where the holder has a lien on the instrument, SEC. 36. "When    indorsement   restrictive.— An  
arising either from contract or by implication of law, he is indorsement is restrictive which either—
deemed a holder for value to the extent of his lien. (a)   Prohibits the further negotiation of the instrument; or
(b)   Constitutes the indorsee the agent of the indorser; or
SEC. 28. Effect of want of consideration.—Absence or (c) Vests the title in the indorsee in trust for or to the use of
failure of consideration is matter  of defense  as  against some other person.
any person not a holder in due course; and partial  failure  But the mere absence of words implying power to
of  consideration is  a defense pro tanto, whether the negotiate does not make an indorsement restrictive.
failure is an ascertained and liquidated amount or
otherwise. SEC. 37. Effect of restricting indorsement; rights of
indorsee.— A restrictive indorsement confers upon the
SEC. 29. Liability of accommodation party.—Au indorsee the right—
accommodation party is one who has signed the (a)   To receive payment of the instrument;
instrument as maker, drawer, acceptor, or indorser, without (b)   To bring any action thereon that the indorser could
receiving value therefor, and for the purpose of lending his bring;
name to some other person.   Such a person is liable on (c)   To transfer his rights as such indorsee, where the form
the instrument to a holder for value, notwithstanding such of the indorsement authorizes him to do so.
holder at the time of taking the instrument knew him to be But all subsequent indorsees acquire only the title of the
only an accommodation party. first indorsee under the restrictive indorsement.

CHAPTER III. SEC. 38. Qualified indorsement.— A qualified indorsement

constitutcs the indorser a mere assignor of the title to the
NEGOTIATION. instrument. It may be made by adding to the indorser's
signature the words "without recourse" or any words of
SEC. 30. What constitutes negotiation.— An instrument is similar import.    Such an indorsement does not impair the
negotiable character of the instrument. SEC. 49. Transfer without indorsement: effect of.— Where
the holder of an instrument payable to his order transfers it
SEC. 39. Conditional indorsement.— "Where an for value without indorsing it, the transfer vests in the
indorsement is conditional, a party required to pay the transferee such title as the transferor had therein, and the
instrument may disregard the condition and make payment transferee acquires, in addition, the right to have the
to the indorsee or his transferee whether the condition has indorsement of the transferor. But for the purpose of
been fulfilled or not. But any person to whom an instrument determining whether the transferee is a holder in due
so indorsed is negotiated will hold the same, or the course, the negotiation takes effect as of the time when the
proceeds thereof, subject to the rights of the person indorsement is actually made.
indorsing conditionally.
SEC. 50. When prior party may negotiate instrument.—
SEC. 40. Indorsement of instrument payable to bearer.— Where an instrument is negotiated back to a prior party,
Where instruments to an instrument, payable to bearer, is such party may, subject to the provisions of this Act,
indorsed specially, it may nevertheless be further reissue and further negotiate the same. But he is not
negotiated by delivery; but the person indorsing specially is entitled to enforce payment thereof against any intervening
liable as indorser to only such holders as make title party to whom ho was personally liable.
through his indorsement.
CHAPTER IV.
SEC. 41. Indorsement where payable to two or more
persons.— Where an instrument is payable to the order of RIGHTS   OF   THE   HOLDER.
two or more payees more' or indorsees who are not
partners, all must indorse, unless the one indorsing has SEC. 51. Bight of holder to sue; payment.— The holder of
authority to indorse for the others. a negotiable instrument may sue thereon in his own name;
and payment to him in due course discharges the
SEC. 42. Effect of instrument drawn or indorsed to a instrument.
person as — Where an instrument is drawn or indorsed to
a person as "cashier" or other fiscal officer of a bank or SEC. 52. What constitutes a holder in due course.— A
corporation, it is deemed prima facie to be payable to the holder in due course is a holder who has taken the
bank or corporation of which he is such officer; and may be instrument under the following conditions:
negotiated by either the indorsement of the bank or (a)  That it is complete and regular upon its face;
corporation, or the indorsement of the officer. (b) That he became the holder of it before it was overdue,
and without notice that it had been previously dishonored,
SEC. 43. Indorsement where name in misspelled, and so if such was the fact;
forth.— Where the name of a payee or indorsee is wrongly (c)   That he took it in good faith and for value;
designated or misspelled, he may indorse the instrument (d)   That at the time it was negotiated to him he had no
as therein described, adding, if he think fit, his proper notice of any infirmity in the instrument or defect in the title
signature. of the person negotiating it.
SEC. 53. When person not deemed holder in due course.
SEC. 44. Indorsement in representative capacity.— Where — Where course an instrument payable on demand is
any person is under obligation to indorse in a negotiated an unreasonable length of time after its issue,
representative capacity, he may indorse in such terms as the holder is not deemed a holder in due course.
to negative personal liability.
SEC. 54. Notice before full amount paid.— Where the
SEC. 45. Time of indorsement; presumption.— Except transferee receives notice of any infirmity in the instrument
where an indorsement bears date after the maturity of the or defect in the title of the person negotiating the same
instrument, every negotiation is deemed prima facie to before he has paid the full amount agreed to be paid
have been effected before the instrument was overdue. therefor, he will be deemed a holder in due course only to
the extent of the amount theretofore paid by him.
SEC. 46. Place of indorsement; presumption.—Except
where the contrary appears, every indorsement is SEC. 55. When title defective.— The title of a person who
presumed prima facie to have been made at the place negotiates an instrument is defective within the meaning of
where the instrument is dated. this Act when he obtained the instrument, or any signature
thereto, by fraud, duress, or force and fear, or other
SEC. 47. Continuation of negotiable; presumption.— An unlawful means, or for an illegal consideration, or when he
instrument negotiable character. negOyable in its origin negotiates it in breach of faith, or under such
continues to be negotiable until it has been' restrictively circumstances as amount to a fraud.
indorsed or discharged by payment or otherwise.
SEC. 56. What constitutes notice of defect.— To constitute
SEC. 48. Striking out indorsement.— The holder may at notice  of an infirmity in. the instrument or defect in the title
any time strike out any indorsement which is not; of the person negotiating the same, the person to whom it
necessary to Ids title. The indorser whose indorsement is is negotiated must have had actual knowledge of the
struck out, and all indorsers subsequent to him, are infirmity or defect, or knowledge of such facts that his
thereby relieved from liability on the instrument. action in taking the instrument amounted to had faith.
SEC. 57. Rights of holder in due course.— A holder in due (a) If the instrument is payable to the order of a third
course holds the instrument free from any defect of title of person, he is liable to the payee and to all subsequent
prior parties, and payee from defenses available to prior parties.
parties among themselves. and  may enforce payment of (b) If the instrument is payable to the order of the maker or
the instrument for the full amount thereof against all parties drawer, or is payable to bearer, he is liable to all parties
liable thereon. subsequent to the maker or drawer.
(c) If he signs for the accommodation of the payee, he is
SEC. 58. When subject to original defenses.— In the liable to all parties subsequent to the payee.
hands of any holder other than a holder in due course, a SEC 65.  Warranty where negotiation by delivery, and so
negotiable instrument is subject to the same defenses as if forth.—
it were nonnegotiable. But a holder who derives his title Every person negotiating an instrument by delivery or by a
through a holder in due course, and who is not himself a qualified indorsement warrants—
party to any fraud or illegality affecting the instrument, has
all the rights of such former holder in respect of all parties (a) That the instrument is genuine and in all respects what
prior to the latter. it purports to be;
(b) That he has a good title to it;
SEC.  59.  Who  deemed holder in due course.— Every (c) That all prior parties had capacity to contract;
holder is deemed prima facie to be a holder in due course; (d) That he has no knowledge of any fact which would
but when it iacourse' shown that the title of any person who impair the validity of the instrument or render it valueless.
has negotiated the instrument was defective, the burden is But when the negotiation is by delivery only, the warranty
on the holder to prove that he or some person under whom extends in favor of no holder other than the immediate
he claims acquired the title as holder in due course.    But transferee.
the last-mentioned rule does not apply in favor of a party
who became bound on the instrument prior to the The provisions of subdivision (c) of this section do not
acquisition of srich  defective title. apply to persons negotiating public or corporation
securities, other than bills and notes.
CHAPTER V.
SEC. 66. Liability of general indorser.—Every indorser who
LIABILITIES indorses without qualification, warrants to all subsequent
holders in due course—
SEC. 60. Liability of maker.— The maker of a negotiable (a)  The matters and things mentioned in subdivisions (a),
instrument by making it engages that he will pay it (&), and (c) of the next preceding section; and
according to its tenor, and admits the existence of the (b) That the instrument is at the time of his indorsement
payee and his then capacity to indorse. valid and subsisting.
And, in addition, he engages that on due presentment, it
SEC. 61. Liability of drawer.— The drawer by drawing the shall be accepted or paid, or both, as the case may be,
instru-ment admits the existence of the payee and his then according to its tenor, and that if it be dishonored, and the
capacity to indorse; and engages that on due presentment necessary proceedings on dishonor be duly taken, he will
the instrument will be accepted or paid, or both, according pay the amount thereof to the  holder, or to any
to its tenor, and that if it be dishonored, and the necessary subsequent indorser who may be compelled to  Pay it.
proceedings on dishonor be duly taken, he will pay the
amount thereof to the holder, or to any subsequent SEC. 67. Liability of indorser where paper negotiable by
indorser who may be compelled to pay it. But the drawer delivery.— Where  a person places  his  indorsement  on 
may insert in the instrument an express stipulation an  instrument negotiable by delivery he incurs all the
negativing or limiting his own liability to the holder. liabilities of an indorser.

SEC. 62. Liability of acceptor.— The acceptor by accepting SEC. 68. Order in which endorsers are liable.— As
the instrument engages that he will pay it according to the respects one another, indorsers are liable prim a facie in
tenor of his acceptance; and admits— the order in which they indorse; but evidence is admissible
(a)   The existence of the drawer, the genuineness of his to show that  as between or among themselves they have
signature, and his capacity and authority to draw the agreed  otherwise.   Joint payees  or joint indorsees who 
instrument; and indorse  are  deemed  to  indorse  jointly and severally.
(b)   The existence of the payee and his then capacity to
indorse. SEC. 69. Liability of an agent or broker.— Where a broker
SEC. 63. When person deemed indorser.— A person or other agent negotiates an instrument without
placing his signature upon an instrument otherwise than as indorsement, he incurs all the liabilities prescribed by
maker, drawer, or acceptor is deemed to be an indorser, section sixty-five of this Act, unless he discloses the name
unless he clearly indicates by appropriate words his of his principal and the fact that he is acting only as agent.
intention to be bound in some other capacity.
CHAPTER VI.
SEC. 64. Liability of irregular indorser.— Where a person,
not otherwise a party to an instrument, places thereon his PRESENTMENT  FOR  PAYMENT.
signature in blank before delivery, he is liable as indorsee
in accordance with the following rules: SEC. 70. Effect of want of demand on principal debtor.—
Presentment for payment is not necessary in order to liable as partners, and no place of payment is specified,
charge the person primarily liable on the instrument; but if presentment for payment may be made to any one of them,
the instrument is, by its terms, payable at a special place, even though there has been a dissolution of the firm.
and he is able and willing to pay it there at maturity, such
ability and willingness are equivalent to a tender of SEC. 78. Presentment to joint debtors.— Where there are
payment upon his part. But, except as herein otherwise several persons, not partners, primarily liable on the
provided, presentment for payment is necessary in order to instrument, and no place of payment is specified,
charge the drawer and indorsers. presentment must be made to them all.

SEC. 71. Presentment where instrument is not payable on Sec. 79. When presentment not required to charge the
demand and where payable on demand.— Where the drawer.— Presentment for payment is not required in order
instrument is not payable on demand, presentment must to charge the require drawer whereas he has no right to
be made on the day it falls due. Where it is payable on expect or require that the drawee or acceptor will pay the
demand, presentment must be made within a reasonable instrument.
time after its issue, except that in the case of a bill of
exchange, presentment for payment will be sufficient if SEC. 80. When presentment not required to charge the
made within a reasonable time after the last negotiation indorser.— Presentment for payment is not required in
thereof. order to charge an indorser where the instrument was
made or accepted for his accommodation and he has no
SEC. 72. What constitutes a sufficient presentment.— reason to expect that the instrument will be paid if
Presentment for payment, to be sufficient, must be made— presented.
(a) By the holder, or by some person authorized to receive
payment on his behalf; SEC. 81. When delay in making presentment is excused.—
(b) At a reasonable hour on a business day; Delay in making presentment for payment is excused when
(c) At a proper place as herein defined; the delay is caused by circumstances beyond the control of
(d) To the person primarily liable on the instrument, or if he the holder, and not imputable to his default, misconduct, or
is absent or inaccessible, to any person found at the place negligence.   When the cause of delay ceases to operate,
where the presentment is made. presentment must be made with reasonable diligence.
SEC.   73. Place  of presentment.—Presentment for
payment is made at the proper place,— SEC. 82.  When presentment may he dispensed with.—
(a) Where a place of payment is specified in the instrument Presentment for payment is dispensed with—
and it is there presented; (a) Where after the exercise of reasonable diligence
(b) Where no place of payment is specified, but the presentment as required by this Act can not be made;
address of the person to make payment is given in the (b) Where the drawee is a fictitious person;
instrument and it is there presented; (c) By waiver of presentment, express or implied.
(c)   Where no place of payment is specified and no SEC. 83. When instrument dishonored by nonpayment.—
address is given and the instrument is presented at the The instrument is dishonored by nonpayment when—
usual place of business or residence of the person to make (a) It is duly presented for payment and payment is refused
payment; or can not be obtained; or
(d)   In any other case if presented to the person to make (b) Presentment is excused and the instrument is overdue
payment wherever he can be found, or if presented at his and unpaid.
last known place of business or residence. SEC. 84. Liability of person secondarily liable, when
SEC. 74. Instrument must he exhibited.— The instrument instrument dishonored.— Subject to the provisions of this
must be exhibited to the person from whom payment is Act, when the instrument is dishonored by nonpayment, an
demanded, and when it is paid must be delivered up to the immediate right of recourse to all parties secondarily liable
party paying it. thereon accrues to the holder.

SEC. 75. Presentment where instrument payable at bank. SEC. 85. Time of maturity.— Every   negotiable instrument
— Where Payable at bank. the instrument is payable at a is payable at the time fixed therein without grace.   When
bank, presentment for payment must be made during the day of maturity falls upon Sunday, or a holiday, the
banking hours, unless the person to make payment has no instrument is payable on the next succeeding business
funds there to meet it at any time during the day, in which day. Instruments falling due or becoming payable on
case presentment at any hour before the bank is closed on Saturday are to be presented for payment on the next
that day is sufficient. succeeding business day, except that instruments payable
on demand may, at the option of the holder, be presented
SEC.  76. Presentment where principal debtor is dead.— for payment before twelve o'clock noon on Saturday when
Where the person primarily liable on the instrument is that entire day is not a holiday.
dead, and no place of payment is specified, presentment
for payment must be made to his personal representative, SEC. 86. Time; how computed.— Where the instrument is
if such there be, and if, with the exercise of reasonable payable at a fixed period after date, after sight, or after the
diligence, he can be found. happening of a specified event, the time of payment is
determined by excluding the day from which the time is to
SEC. 77. Presentment to persons liable as partners.— begin to run, and by including the date of payment.
Where the persons primarily liable on the instrument are
SEC. 87. Rule where instrument payable at bank.— Where all cases be given by delivering it personally or through the
the instrument is made payable at a bank it is equivalent to mails.
an order to the bank to pay the same for the account of the
principal debtor thereon. SEC. 97. To whom notice may be given.— Notice of
dishonor may be given either to the party himself or to his
SEC. 88. What constitutes payment in due course.— agent in that behalf.
Payment is made in due course when it is made at or after
the maturity of the instrument to the holder thereof in good SEC. 98. Notice where party is dead.— When any party is
faith and without notice that his title is defective. dead, and his death is known to the party giving notice, the
notice must be given to a personal representative, if there
CHAPTER VII. be one, and if with reasonable diligence he can be found. If
there be no personal representative, notice may be sent to
NOTICE OF DISHONOR. the last residence or last place of business of the
deceased.
SEC. 89. To whom notice of dishonor must be given.—
Except as herein otherwise provided, when a negotiable SEC. 99. Notice to partners.— Where the parties to be
instrument has been dishonored by nonacceptance or notified are partners, notice to any one partner is notice to
nonpayment, notice of dishonor must be given to the the firm even though there has been a dissolution.
drawer and to each indorser, and any drawer or indorser to
whom such notice is not given is discharged. SEC. 100. Notice to persons jointly liable.—Notice to joint
parties who are not partners must be given to each of
SEC. 90. By whom given.—The notice may be given by or them, unless one of them has authority to receive such
on behalf of the holder, or by or on behalf of any party to notice for the others.
the instrument who might be compelled to pay it to the
holder, and who, upon taking it up, would have a right to SEC. 101. Notice to bankrupt.— Where a party has been
reimbursement from the party to whom the notice is given. adjudged bankrupt or an insolvent, or has made an
assignment for the benefit of creditors, notice may be given
SEC. 91. Notice given by agent.— Notice of  dishonor may either to the party himself or to his trustee or assignee.
be given by an agent either in his own name or in the name
of any party entitled to give notice, whether that party be SEC. 102. Time within which notice must be given.—
his principal or not. Notice may be given as soon as the instrument is
dishonored; and unless delay is excused as hereinafter
SEC.  92.  Effect of notice given on behalf of holder.— provided, must be given within the times fixed by this Act.
Where notice is given by or on behalf of the holder, it
inures for the benefit  of all subsequent holders and all SEC. 103. Where parties reside in same place.— Where
prior parties who have a right of recourse against the party the person giving and the person to receive notice reside in
to whom it is given. the same place, notice must be given within the following
times:
SEC. 93. Effect where notice is given by party entitled (a) If given at the place of business of the person to receive
thereto.— Where notice is given by or on behalf of a party notice, it must be given before the close of business hours
entitled to give notice, it inures for the benefit of the holder on the day following.
and all parties subsequent to the party to whom notice is (b) If given at his residence, it must be given before the
given. usual hours of rest on the day following.
(c) If sent by mail, it must be deposited in the post-office in
SEC. 94. When agent may give notice.— Where the time to reach him in usual course on the day following.
instrument has been dishonored in the hands of an agent, SEC. 104. Where parties reside in different places.—
he may either himself give notice to the parties liable Where the person giving and the person to receive notice
thereon, or he may give notice to his principal. If he give reside in different places, the notice must be given within
notice to his principal, he must do so within the same time the following times:
as if he were the holder, and the principal upon the receipt (a) If sent by mail, it must be deposited in the post-office in
of such notice has himself the same time for giving notice time to go by mail the day following the day of dishonor, or
as if the agent had been an independent holder. if there be no mail at a convenient hour on that day, by the
next mail thereafter.
SEC. 95. When notice sufficient.— A written notice need (b) If given otherwise than through the post-office, then
not be and an insufficient written notice may be within the time that notice would have been received in due
supplemented and validated by verbal communication.   A course of mail, if it had been deposited in the post-office
misdescription of the instrument does not vitiate the notice within the time specified in the last subdivision.
unless the party to whom the notice is given is in fact SEC. 105. When sender deemed to have given due notice.
misled thereby. — Where notice of dishonor is duly addressed and
deposited in the post-office, the sender is deemed to have
SEC. 96. Form of notice.— The notice may be in writing or  given due notice, notwithstanding any miscarriage in the
oral  and may be  given in  any  terms which  sufficiently mails.
identify the instrument and indicate that it has been
dishonored by nonacceptance or nonpayment.    It may in SEC. 106. Deposit in post-office; what constitutes.—
Notice is deemed to have been deposited in the post-office SEC. 115. When notice need not be given to indorser.—
when deposited in any branch post-office or in any letter Notice of dishonor is not required to be given to an indorser
box under the control of the post-office department. in either of the  following cases:
(a) Where the drawee is a fictitious person or a person not
SEC. 107. Notice to subsequent party; time of.— Where a having capacity to contract, and the indorser was aware of
party receives notice of dishonor, he has, after the receipt the fact at the time he indorsed the instrument;
of such notice, the same time for giving notice to (b) Where the indorser is the person to whom the
antecedent parties that the holder has after the dishonor. instrument is presented for payment;
(c) Where the instrument was made or accepted for his
SEC. 108. Where notice must be sent.— Where a party accommodation.
has added an address to his signature, notice of dishonor SEC. 116. Notice  of nonpayment  where acceptance
must be sent to that address; but if he has not given such refused.— Where due notice ot dishonor by
address, then the notice must be sent as follows: nonacceptance has been given, notice of a subsequent
(a) Either to the post-office nearest to his place of dishonor by nonpayment is not necessary, unless in the
residence or to the post-office where he is accustomed to meantime the instrument has been accepted.
receive his letters; or
(b) If he live in one place, and have his place of business in SEC. 117. Effect of omission to give notice of
another, notice may be sent to either place; or nonacceptance.— An omission to [Link] of dishonor
(c)   If he is sojourning in another place, notice may be sent by nonacceptance does not prejudice the rights of a holder
to the place where he is so sojourning. in due course subsequent to the omission.
But where the notice is actually received by the party within
the time specified in this Act, it will be sufficient, though not SEC. 118. When protest need not be made; when must be
sent in accordance with the requirements of this section. made.—  Where any negotiable instrument has been
dishonored it may be protested for nonacceptance or
SEC. 109. Waiver of notice.— Notice of dishonor may be nonpayment, as the case may be; but protest is not
waived, either before the time of giving notice has arrived required except in the case of foreign bills of exchange.
or after the omission to give clue notice, and the waiver
may be express or  implied. CHAPTER VIII.

SEC. 110. Whom affected by waiver.— Where the waiver DISCHARGE OF NEGOTIABLE INSTRUMENTS.
is bodied in the instrument itself, it is binding upon all
parties; but  where it is written above the signature of an SEC. 119. Instrument;  how  discharged.—A  negotiable
indorser, it binds him  only. instrument is discharged—
(a) By payment in due course by or on behalf of the
SEC. 111. Waiver of protest.— A waiver of protest, principal debtor;
whether in the case of a foreign bill of exchange or other (b) By payment in due course by the party accommodated,
negotiable instrument, is deemed to be a waiver not only of where the instrument is made or accepted for
a formal protest, but also of presentment and notice of accommodation;
dishonor. (c)   By the intentional cancellation thereof by the holder;
(d)   By any other act which will discharge a simple contract
SEC. 112. When notice is dispensed with.— Notice of for the payment of money;
dishonor is dispensed with when, after the exercise of (e)   When the principal debtor becomes the holder of the
reasonable diligence, it can not be given to or does not instrument at or after maturity in his own right.
reach the parties sought to be charged. SEC.  120. When persons secondarily liable on,
discharged.—A person secondarily liable on the instrument
SEC. 113. Delay in giving notice; how excused.— Delay in is discharged—
giving notice of dishonor is excused when the delay is (a) By any act which discharges the instrument;
caused by circumstances beyond the control of the holder, (b) By the intentional cancellation of his signature by the
and not imputable to his default, misconduct, or holder;
negligence.  When the cause of delay ceases to operate, (c) By the discharge of a prior party;
notice must be given with reasonable diligence. (d) By a valid tender of payment made by a prior party;
(c) By a release of the principal debtor, unless the holder's
SEC. 114. When notice need not be given to drawer.— right of recourse against the party secondarily liable is
Notice of dishonor is not required to be given to the drawer expressly reserved;
in either of the drawee following cases: (f) By any agreement binding upon the holder to extend the
(a)  Where the drawer and drawee are the same person. time of payment, or to postpone the holder's right to
(b) When the drawee is a fictitious person or a person not enforce the instrument, unless made with the assent of the
having capacity to contract. party secondarily liable, or unless the right of recourse
(c)   When the drawer is the person to whom the against such party is expressly reserved.
instrument is presented for payment. SEC. 121. Eight of party who discharges instrument.—
(d)   Where the drawer has no right to expect or require Where charging instrument is paid by a party secondarily
that the drawee or acceptor will honor the instrument. liable thereon, it is not discharged; but the party so paying
(e)   Where the drawer has countermanded payment. it is remitted to his former rights as regards all prior parties,
and he may strike out his own and all subsequent
indorsements, and again negotiate the instrument, except assignment of the funds in the hands of the drawee
— available for the payment thereof, and the drawee is not
(a) Where it is payable to the order of a third person, and liable on the bill unless and until he accepts the same.
has been paid by the drawer; and
(b) Where it was made or accepted for accommodation, SEC. 128. Bill addressed to more than one drawee.— A bill
and has been paid by the party accommodated. may be addressed to two or more drawees jointly, whether
SEC. 122. Renunciation by holder.— The holder may they are partners or not; but not to two or more drawees in
expressly  renounce his rights against any party to the the alternative or in succession.
instrument before, at, or after its maturity. An absolute and
unconditional renunciation of his rights against the principal SEC. 129. Inland and foreign bills of exchange.— An
debtor made at or after the maturity of the instrument inland bill and foreign, of exchange is a bill which is, or on
discharges the instrument. But a renunciation does not its face purports to be, both drawn and payable within the
affect the rights of a holder in due course without notice.   Philippine Islands.   Any other bill is a foreign bill.    Unless
A renunciation must be in writing, unless the instrument is the contrary appears on the face of the bill, the holder may
delivered up to the person primarily liable thereon. treat it as an inland bill.

SEC 123. Cancellation; unintentional; burden of proof.— A SEC. 130.  When bill may be treated as promissory note.—
cancellation made unintentionally, or under a mistake or Where in a bill drawer and drawee are the same person, or
without the authority of the holder, is inoperative; but where where the drawee is a fictitious person, or a person not
an instrument or any signature thereon appears to have having capacity to contract, the holder may treat the
been canceled the burden of proof lies on the party who instrument, at his option, either as a bill of exchange or a
alleges that the cancellation was made unintentionally, or promissory note.
under a mistake or without authority.
SEC. 131. Referee in case of need.— The drawer of a bill
SEC. 124. Alteration of instrument; effect of.— Where a and any indorser may insert thereon the name of a person
instrument is materially altered without the assent of all to whom the holder may resort in case of need; that is to
parties liable thereon, it is avoided, except as against a say, in case the bill is dishonored by nonacceptance or
party who has himself made, authorized, or assented to the nonpayment. Such person is called the referee in case of
alteration, and subsequent indorsers. need. It is in the option of the holder to resort to the referee
in case of need or not, as he may see fit.
But when an instrument has been materially altered and is
in the hands of a holder in due course, not a party to the CHAPTER X.
alteration, he may enforce payment thereof according to its
original tenor. ACCEPTANCE.

SEC 125. What constitutes a material alteration.— Any SEC. 132. Acceptance; how made, and so forth.— The
alteration which changes— acceptance  of a bill is the signification by the drawee of his
(a) The date; assent to the order of the drawer.    The acceptance must
(b) The sum payable, either for principal or interest; be in writing and signed by the drawee.   It must not
(c)   The time or place of payment; express that the drawee will perform his promise by any
(d)   The number or the relations of the parties; other means than the payment of money.
(e)   The medium or currency in which payment is to be
made; Or which adds a place of payment where no place SEC. 133. Holder entitled to acceptance on face of bill.—
of payment is specified, or any other change or addition The holder of a bill presenting the same for acceptance
which alters the effect of the instrument in any respect, is a may require that the acceptance be written on the bill, and,
material alteration. if such request is refused, may treat the bill as dishonored.

TITLE II. SEC. 134. Acceptance  by  separate instrument.— Where 

an  acceptance is written on a paper other than the bill
BILLS   OF   EXCHANGE. itself, it does not instrument-bind the acceptor except in
favor of a person to whom it is shown and who, on the faith
CHAPTER IX. thereof, receives the bill for value.

FORM AND INTERPRETATION. SEC. 135. Promise to accept; when equivalent to

acceptance.— An unconditional promise in writing to
SEC. 126. Bill of exchange defined.— A bill of exchange is accept a bill before it is drawn is deemed an actual
an unconditional order in writing addressed by one person acceptance in favor of every person who, upon the faith
to another, signed by the person giving it, requiring the thereof, receives the bill for value.
person to whom it is addressed to pay on demand or at a
fixed or determinable future time a sum certain in money to SEC. 136. Time allowed drawee to accept.—The drawee is
order or to bearer. allowed  twenty-four hours after presentment in which to
decide whether or not he will accept the bill; but the
SEC. 127. Bill not an assignment of funds in hands of acceptance, if given, dates as of the day of presentation.
drawee.— A bill of itself does not operate as an
SEC. 137. Liability  of  drawee  retaining  or destroying  presented for acceptance; or
bill.— Where a drawee to when a bill is delivered for (c) Where the bill is drawn payable elsewhere than at the
acceptance destroys the same, or refuses within twenty- residence or place of business of the drawee.
four hours after such delivery, or within such other period In no other case is presentment for acceptance necessary
as the holder may allow, to return the bill accepted or in order to render any party to the bill liable.
nonaccepted to the holder, he will be deemed to have
accepted the same. SEC. 144. When failure to present releases drawer and
indorser.— Except as herein otherwise provided, the
SEC. 138. Acceptance of incomplete bill.—A bill may be holder of a bill which is required by the next preceding
accepted before it has been signed by the drawer, or while section to be presented for acceptance must either present
otherwise incomplete, or when it is overdue, or after it has it for acceptance or negotiate it within a reasonable time.  
been dishonored by a previous refusal to accept, or by If he fail to do so, the drawer and all indorsers are
nonpayment.   But when a bill payable after sight is discharged.
dishonored by nonacceptance and the drawee
subsequently accepts it, the holder, in the absence of any SEC. 145. Presentment; how made.— Presentment for
different agreement, is entitled to have the bill accepted as acceptance must be made by or on behalf of the holder at
of the date of the first presentment. a reasonable hour, on a business day and before the bill is
overdue, to the drawee or some person authorized to
SEC. 139. Kinds of acceptances.— An acceptance is accept or refuse acceptance on his behalf; and
either general or qualified.   A general acceptance assents (a) Where a bill is addressed to two or more drawees who
without qualification to the order of the drawer.   A qualified are not partners, presentment must be made to them all,
acceptance in express terms varies the effect of the bill as unless one has authority to accept or refuse acceptance for
drawn. all, in which case presentment may be made to him only;
(b)   Where the drawee is dead, presentment may be made
SEC. 140. What constitutes a general acceptance.— An to his personal representative;
acceptance to pay at a particular place is a general (c)   Where the drawee has been adjudged a bankrupt or
acceptance, unless it expressly states that the bill is to be an insolvent or has made an assignment for the benefit of
paid there only and not elsewhere. creditors presentment may be made to him or to his trustee
or assignee.
SEC. 141. Qualified acceptance.— An   acceptance is SEC. 146. On what days presentment may be made.— A
qualified which is— bill may be presented for acceptance on any day on which
(a) Conditional; that is to say, which makes payment by the negotiable instruments may be presented for payment
acceptor dependent on the fulfillment of a condition therein under the provisions of sections seventy-two and eighty-
stated; five of this Act. When Saturday is not otherwise a holiday,
(b) Partial; that is to say, an acceptance to pay part only of presentment for acceptance may be made before twelve
the amount for which the bill is drawn; o'clock, noon, on that day.
(c) Local; that is to say, an acceptance to pay only at a
particular place; SEC. 147. Presentment where time is insufficient.— Where
(d) Qualified as to time; the holder of a bill drawn payable elsewhere than at the
(e) The acceptance of some one or more of the drawees, place of business or the residence of the drawee has not
but not of all. time with the exercise of reasonable diligence to present
SEC. 142. Rights of parties as to qualified acceptance.— the bill for acceptance before presenting it for payment on
The holder may refuse to take a qualified acceptance, and the day that it falls due, the delay caused by presenting the
if he does not obtain an unqualified acceptance, lie may bill for acceptance before presenting it for payment is
treat the bill as dishonored by nonacceptance.   Where a excused, and does not discharge the drawers and
qualified acceptance is taken, the drawer and indorsers are indorsers.
discharged from liability on the bill, unless they have
expressly or impliedly authorized the holder to take a SEC. 148. Where presentment is excused.— Presentment
qualified acceptance, or subsequently assent thereto.   for acceptance is excused, and a bill may be treated as
When the drawer or an indorser receives notice of a dishonored by nonacceptanee, in either of the following
qualified acceptance, he must, within a reasonable time, cases:
express his dissent to the holder, or he will be deemed to (a) Where the drawee is dead, or has absconded, or is a
have assented thereto. fictitious person or a person not having capacity to contract
by bill.
CHAPTER XL (b) Where, after the exercise of reasonable diligence,
presentment can not be made.
PRESENTMENT  TOR  ACCEPTANCE. (c) Where, although presentment has been irregular,
acceptance has been refused on some other ground.
SEC. 143. When presentment for acceptance must be SEC. 149. When dishonored by nonacceptanee.— A bill is
made.— Presentment for acceptance must be made— dishonored by nonacceptanee—
(a) Where the bill is payable after sight, or in any other (a)   When  it is  duly  presented  for  acceptance  and 
case, where presentment for acceptance is necessary in such  an acceptance as is prescribed by this Act is refused
order to fix the maturity of the instrument; or or can not be obtained; or
(b)  Where the bill expressly stipulates that it shall be
(b)   When presentment for acceptance is excused, and the
bill is not accepted. SEC. 158. Protest  before  maturity where  acceptor
SEC. 150. Duty of holder where bill not accepted.— Where insolvent.— Where the acceptor lias been adjudged a
a bill is duly presented for acceptance and is not accepted bankrupt or an insolvent, or has made an assignment for
within the prescribed time, the person presenting it must the benefit of creditors, before the bill matures, the holder
treat the bill as dishonored by nonacceptanee or he loses may cause the bill to be protested for better security
the right of recourse against the drawer and indorsers. against the drawer and indorse.

SEC. 151. Rights of holder where bill not accepted.— SEC. 159.  When protest  dispensed with.— Protest is 
When a bill is dishonored by nonacceptanee, an immediate dispensed with by any circumstances which would
right of recourse against the drawers and indorsers dispense with notice of dishonor. Delay in noting or
accrues to the holder and no presentment for payment is protesting is excused when delay is caused by
necessary. circumstances beyond the control of the holder and not
imputable to his default, misconduct, or negligence. When
CHAPTER XII. the cause of delay ceases to operate, the bill must be
noted or protested with reasonable diligence.
PROTEST.
SEC. 160. Protest where bill is lost, and so forth.— When a
SEC. 152. In what cases protest necessary.— Where a bill is lost or destroyed or is wrongly detained from the
foreign bill appearing on its face to be such is dishonored person entitled to hold it, protest may be made on a copy
by nonaceeptance, it must be duly protested for or written particulars thereof.
nonacceptanee, and where such a bill which has not
previously been dishonored by nonacceptanee is CHAPTER XIII.
dishonored by nonpayment, it must be duly protested for
nonpayment. If it is not so protested, the drawer and ACCEPTANCE   FOR   HONOR.
indorsers are discharged. Where a bill does not appear on
its face to be a foreign bill, protest thereof in case of SEC. 161. When bill may be accepted for honor.— Where
dishonor is unnecessary. a bill of exchange has been protested for dishonor by
nonacceptance or protested for better security, and is not
SEC. 153. Protest; how made.—The protest must be overdue, any person not being a party already liable
annexed to the bill, or must contain a copy thereof, and thereon may, with the consent of the holder, intervene and
must be under the hand and seal of the notary making it, accept the bill supra protest for the honor of any party
and must specify— liable thereon, or for the honor of the person for whose
(a)  The time and place of presentment; account the bill is drawn. The acceptance for honor may be
(b)  The fact that presentment was made and the manner for part only of the sum for which the bill is drawn; and
thereof; where there has been an acceptance for honor for one
(c)  The cause or reason for protesting the bill; party, there may be a further acceptance by a different
(d) The demand made and the answer given, if any, or the person for the honor of another party.
fact that the drawee or acceptor could not be found.
SEC 154. Protest; by whom made.— Protest may be made SEC. 162. Acceptance for honor; how made.— An
by— acceptance for honor supra protest must be in writing, and
(a)  A notary public; or indicate that it is an acceptance for honor, and must be
(b) By any respectable resident of the place where the bill signed by the acceptor for honor.
is dishonored, in the presence of two or more credible
witnesses. SEC. 163. When deemed to be an acceptance for honor of
SEC. 155. Protest; when to be made.— When a bill is the drawer.— Where an acceptance for honor does not
protested, such protest must be made on the day of its expressly state for whose honor it is made, it is deemed to
dishonor, unless delay is excused as herein provided.   be an acceptance for the honor of the drawer.
When a bill has been duly noted, the protest may be
subsequently extended as of the date of the noting. SEC. 164. Liability of the acceptor for honor.— The
acceptor for honor is liable to the holder and to all parties
SEC. 156. Protest; where made.— A bill must be protested to the bill subsequent to the party for whose honor he has
at the place where it is dishonored, except that when a bill accepted.
drawn payable at the place of business or residence of
some person other than the drawee has been dishonored SEC. 165. Agreement of acceptor for honor.— The
by nonacceptance, it must be protested for nonpayment at acceptor for honor, by such acceptance engages that he
the place where it is expressed to be payable, and no will on due presentment  pay the bill according to the terms
further presentment for payment to, or demand on, the of his acceptance, provided it shall not have been paid by
drawee is necessary. the drawee, and provided also that it shall have been duly
presented for payment and protested for nonpayment and
SEC. 157. Protest both for nonacceptance and notice of dishonor given to him.
nonpayment.— A bill which has been protested for
nonacceptance may be subsequently protested for SEC.  166. Maturity of bill payable after sight; accepted for 
nonpayment. honor.— Where a bill payable after sight is accepted for
honor, its maturity is calculated from the date of the noting
for non-acceptance and not from the date of the SEC. 176. Where holder refuses to receive payment supra
acceptance for honor. protest.— Where the holder of a bill refuses to receive
payment supra protest, he loses his right of recourse
SEC.  167. Protest of bill accepted for honor, and so forth. against any party who would have been discharged by
— Where a dishonored bill has been accepted for honor such payment.
supra protest or contains a reference in case of need, it
must be protested for nonpayment before it is presented SEC. 177. Rights of payer for honor.— The payer for
for payment to the acceptor for honor or referee in case of honor, on paying to the holder the amount of the bill and
need. the notarial expenses incidental to its dishonor, is entitled
to receive both the bill itself and the protest.
SEC. 168. Presentment for payment to acceptor for honor,
how made.— Presentment for payment to the acceptor for CHAPTER XV.
honor must paymen be made as follows:
(a)   If it is to be presented in the place where the protest BILLS IN A SET.
for nonpayment was made, it must be presented not later
than the day following its maturity. SEC. 178. Bills in sets constitute one bill.— Where a bill is
(b)   If it is to be presented in some other place than the drawn in a set, each part of the set being numbered and
place where it was protested, then it must be forwarded containing a reference to the other parts, the whole of the
within the time specified in section one hundred and four. parts constitutes one bill.
SEC. 169. When delay in making presentment is excused.
— The provisions of section eighty-one apply where there SEC. 179. Right of holders where different parts are
is delay in making presentment to the acceptor for honor or negotiated.— Where two or more parts of a set are
referee in case of need. negotiated to different holders in due course, the holder
whose title first accrues is as between such holders the
SEC. 170. Dishonor of bill by acceptor for honor.—When true owner of the bill. But nothing in this section affects the
the bill is dishonored by the acceptor for honor it must be rights of a person who in due course accepts or pays the
protested for nonpayment by him. part first presented to him.

CHAPTER XIV. SEC. 180. Liability of holder who indorses two or more

parts of a set to different persons.— Where the holder of a
PAYMENT FOR HONOR. set indorses two or more parts to different persons he is
liable on every such part, and every indorser subsequent to
SEC. 171. Who may make payment for honor.— Where a him is liable on the part he has himself indorsed, as if such
bill has been protested for nonpayment, any person may parts were separate bills.
intervene and pay it supra protest for the honor of any
person liable thereon or for the honor of the person for SEC. 181. Acceptance of bills drawn in sets.— The
whose account it was drawn. acceptance may be written on any part and it must be
written on one part only. If the drawee accepts more than
SEC.  172. Payment for honor; how made.— The payment one part, and such accepted parts are negotiated to
for honor supra protest in order to operate as such and not different holders in due course, he is liable on every such
as a mere voluntary payment must be attested by a part as if it were a separate bill.
notarial act of honor which may be appended to the protest
or form an extension to it. SEC. 182. Payment by acceptor of bills drawn in sets.—
When the acceptor of a bill drawn in a set pays it without
SEC. 173. Declaration before payment for honor.— The requiring the part bearing his acceptance to be delivered
notarial act of honor must be founded on a declaration up to him, and that part at maturity is outstanding in the
made by the payer for honor or by his agent in that behalf hands of a holder in due course, he is liable to the holder
declaring his intention to pay the bill for honor and for thereon.
whose honor he pays.
SEC. 183. Effect of discharging one of a set.—Except as
SEC.   174. Preference of parties  offering to pay for honor. herein otherwise provided, where any one part of a bill
— Where two or more persons offer to pay a bill for the drawn in a set is discharged by payment or otherwise the
honor of different parties, the person whose payment will whole bill is discharged.
discharge most parties to the bill is to be given the
preference. TITLE III.

SEC. 175. Effect on subsequent parties where bill is paid PROMISSORY NOTES AND CHECKS.
for honor.— Where a bill has been paid for honor, all
parties subsequent to the party for whose honor it is paid CHAPTER XVI.
are discharged, hut the payer for honor is subrogated for,
and succeeds to, both the rights and duties of the holder as SEC. 184. Promissory note defined.— A negotiable
regards the party for whose honor he pays and all parties promissory note within the meaning of this Act is an
liable to the latter. unconditional premise in writing made by one person to
another, signed by the maker, engaging to pay on demand, "Value" means valuable consideration;
or at a fixed or determinable future time, a sum certain in "Written" includes printed, and "writing" includes print.
money to order or to bearer. Where a note is drawn to the SEC. 192. Person primarily liable on instrument.— The
maker's own order, it is not complete until indorsed by him. person "primarily" liable on an instrument is the person who
by the terms of the instrument is absolutely required to pay
SEC. 185. Chech defined.— A check is a bill of exchange the same. All other parties are "secondarily" liable.
drawn on a bank payable on demand.    Except as herein
otherwise provided, the provisions of this Act applicable to SEC. 193. Reasonable time, what constitutes.— In
a bill of exchange payable on demand apply to a check. determining what is a "reasonable time" or an
"unreasonable time," regard is to be had to the nature of
SEC. 186. Within  what  time a check must  be presented. the instrument, the usage of trade or business (if any) with
— A check must be presented for payment within a respect to such instruments, and the facts of the particular
reasonable time after its issue or the drawer will be case.
discharged from liability thereon to the extent of the loss
caused by the delay. SEC. 194. Time, how computed; when last day falls on
holiday.— Where the day, or the last day, for doing any act
SEC. 187. Certification of check; effect of.— Where a herein required or permitted to be done falls on Sunday or
check is certified by the bank on which it is drawn, the on a holiday, the act may be done on the next succeeding
certification is equivalent to an acceptance. secular or business day.

SEC. 188. Effect where the holder of check procures it to SEC. 195.  Application of Act.— The provisions of this Act
be certified.— Where the holder of a check procures it to do not apply to negotiable instruments made and delivered
be accepted or certified, the drawer and all indorsers are prior to the taking effect hereof.
discharged from liability thereon.
SEC. 196. Cases not provided for in Act.— Any case not
SEC. 189. When check operates as an assignment.— A provided for in this Act shall be governed by the provisions
check of itself does not operate as an assignment of any of existing legislation, or in default thereof, by the rules of
part of the funds to the credit of the drawer with the bank, the law merchant.
and the bank is not liable to the holder, unless and until it
accepts or certifies the check. SEC. 197. Repeals.— All Acts  and laws and parts thereof
inconsistent with this Act are hereby repealed.
TITLE IV.
SEC. 198.  Time when Act takes effect.—This Act shall
GENERAL PROVISIONS. take effect ninety days after its publication in the Official
Gazette of the Philippine Islands shall have been
CHAPTER XVII. completed.

SEC. 190. Short title.— This Act shall be known as the

Negotiable Instruments Law.

SEC. 191. Definitions and meaning of terms.— In this Act,

unless the context otherwise requires—
"Acceptance" means an acceptance completed by delivery
or notification;
"Action" includes counterclaim and set-off;
"Bank" includes any person or association of persons
carrying on the business of banking, whether incorporated
or not;
"Bearer" means the person in possession of a bill or note
which is payable to bearer ;
"Bill" means bill of exchange, and "note" means negotiable
promissory note;
"Delivery" means transfer of possession, actual or
constructive, from one person to another;
"Holder" means the payee or indorsee of a bill or note, who
is in possession of it, or the bearer thereof;
"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;