Sie sind auf Seite 1von 23

NEGOTIABLE INSTRUMENTS LAW [SEC. 1-23] I. FORM AND INTERPRETATION Section 1. Form of negotiable instruments.

An instrument to be negotiable must conform to t e follo!ing re"uirements# $a% It must be in !riting an& signe& b' t e ma(er or &ra!er) $b% Must contain an uncon&itional *romise or or&er to *a' a sum certain in mone') $c% Must be *a'able on &eman&+ or at a fi,e& or &eterminable future time) $&% Must be *a'able to or&er or to bearer) an& $e% - ere t e instrument is a&&resse& to a &ra!ee+ e must be name& or ot er!ise in&icate& t erein !it reasonable certaint'. Sec. .. - at constitutes certaint' as to sum. T e sum *a'able is a sum certain !it in t e meaning of t is Act+ alt oug it is to be *ai&# $a% !it interest) or $b% b' state& installments) or $c% b' state& installments+ !it a *ro/ision t at+ u*on &efault in *a'ment of an' installment or of interest+ t e ! ole s all become &ue) or $&% !it e,c ange+ ! et er at a fi,e& rate or at t e current rate) or $e% !it costs of collection or an attorne'0s fee+ in case *a'ment s all not be ma&e at maturit'. Sec. 1. - en *romise is uncon&itional. An un"ualifie& or&er or *romise to *a' is uncon&itional !it in t e meaning of t is Act t oug cou*le& !it # $a% An in&ication of a *articular fun& out of ! ic reimbursement is to be ma&e or a *articular account to be &ebite& !it t e amount) or $b% A statement of t e transaction ! ic gi/es rise to t e instrument. 2ut an or&er or *romise to *a' out of a *articular fun& is not uncon&itional. Sec. 3. Determinable future time) ! at constitutes. An instrument is *a'able at a &eterminable future time+ !it in t e meaning of t is Act+ ! ic is e,*resse& to be *a'able# $a% At a fi,e& *erio& after &ate or sig t) or $b% On or before a fi,e& or &eterminable future time s*ecifie& t erein) or $c% On or at a fi,e& *erio& after t e occurrence of a s*ecifie& e/ent ! ic is certain to a**en+ t oug t e time of a**ening be uncertain. An instrument *a'able u*on a contingenc' is not negotiable+ an& t e a**ening of t e e/ent &oes not cure t e &efect. Sec. 4. A&&itional *ro/isions not affecting negotiabilit'. An instrument ! ic contains an or&er or *romise to &o an' act in a&&ition to t e *a'ment of mone' is not negotiable. 2ut t e negotiable c aracter of an instrument ot er!ise negotiable is not affecte& b' a *ro/ision ! ic # $a% aut ori5es t e sale of collateral securities in case t e instrument be not *ai& at maturit') or $b% aut ori5es a confession of 6u&gment if t e instrument be not *ai& at maturit') or $c% !ai/es t e benefit of an' la! inten&e& for t e a&/antage or *rotection of t e obligor) or $&% gi/es t e ol&er an election to re"uire somet ing to be &one in lieu of *a'ment of mone'. 2ut not ing in t is section s all /ali&ate an' *ro/ision or sti*ulation ot er!ise illegal.

Sec. 7. Omissions) seal) *articular mone'. T e /ali&it' an& negotiable c aracter of an instrument are not affecte& b' t e fact t at# $a% it is not &ate&) or $b% &oes not s*ecif' t e /alue gi/en+ or t at an' /alue a& been gi/en t erefor) or $c% &oes not s*ecif' t e *lace ! ere it is &ra!n or t e *lace ! ere it is *a'able) or $&% bears a seal) or $e% &esignates a *articular (in& of current mone' in ! ic *a'ment is to be ma&e. 2ut not ing in t is section s all alter or re*eal an' statute re"uiring in certain cases t e nature of t e consi&eration to be state& in t e instrument. Sec. 8. &eman&# - en *a'able on &eman&. An instrument is *a'able on

$a% - en it is so e,*resse& to be *a'able on &eman&+ or at sig t+ or on *resentation) or $b% In ! ic no time for *a'ment is e,*resse&. - ere an instrument is issue&+ acce*te&+ or in&orse& ! en o/er&ue+ it is+ as regar&s t e *erson so issuing+ acce*ting+ or in&orsing it+ *a'able on &eman&. Sec. 9. - en *a'able to or&er. T e instrument is *a'able to or&er ! ere it is &ra!n *a'able to t e or&er of a s*ecifie& *erson or to im or is or&er. It ma' be &ra!n *a'able to t e or&er of# $a% A *a'ee ! o is not ma(er+ &ra!er+ or &ra!ee) or $b% T e &ra!er or ma(er) or $c% T e &ra!ee) or $&% T!o or more *a'ees 6ointl') or $e% One or some of se/eral *a'ees) or $f% T e ol&er of an office for t e time being. - ere t e instrument is *a'able to or&er+ t e *a'ee must be name& or ot er!ise in&icate& t erein !it reasonable certaint'. Sec. :. bearer# - en *a'able to bearer. T e instrument is *a'able to

$a% - en it is e,*resse& to be so *a'able) or $b% - en it is *a'able to a *erson name& t erein or bearer) or $c% - en it is *a'able to t e or&er of a fictitious or non;e,isting *erson+ an& suc fact !as (no!n to t e *erson ma(ing it so *a'able) or $&% - en *erson) or t e name of t e *a'ee &oes not *ur*ort to be t e name of an'

$e% - en t e onl' or last in&orsement is an in&orsement in blan(. Sec. 1<. Terms+ ! en sufficient. T e instrument nee& not follo! t e language of t is Act+ but an' terms are sufficient ! ic clearl' in&icate an intention to conform to t e re"uirements ereof. Sec. 11. Date+ *resum*tion as to. - ere t e instrument or an acce*tance or an' in&orsement t ereon is &ate&+ suc &ate is &eeme& *rima facie to be t e true &ate of t e ma(ing+ &ra!ing+ acce*tance+ or in&orsement+ as t e case ma' be. Sec. 1.. Ante;&ate& an& *ost;&ate&. T e instrument is not in/ali& for t e reason onl' t at it is ante; &ate& or *ost;&ate&+ *ro/i&e& t is is not &one for an illegal or frau&ulent *ur*ose. T e *erson to ! om an instrument so &ate& is &eli/ere& ac"uires t e title t ereto as of t e &ate of &eli/er'.

Sec. 11. - en &ate ma' be inserte&. - ere an instrument e,*resse& to be *a'able at a fi,e& *erio& after &ate is issue& un&ate&+ or ! ere t e acce*tance of an instrument *a'able at a fi,e& *erio& after sig t is un&ate&+ an' ol&er ma' insert t erein t e true &ate of issue or acce*tance+ an& t e instrument s all be *a'able accor&ingl'. T e insertion of a !rong &ate &oes not a/oi& t e instrument in t e an&s of a subse"uent ol&er in &ue course) but as to im+ t e &ate so inserte& is to be regar&e& as t e true &ate. Sec. 13. 2lan(s) ! en ma' be fille&. - ere t e instrument is !anting in an' material *articular+ t e *erson in *ossession t ereof as a *rima facie aut orit' to com*lete it b' filling u* t e blan(s t erein. An& a signature on a blan( *a*er &eli/ere& b' t e *erson ma(ing t e signature in or&er t at t e *a*er ma' be con/erte& into a negotiable instrument o*erates as a *rima facie aut orit' to fill it u* as suc for an' amount. In or&er+ o!e/er+ t at an' suc instrument ! en com*lete& ma' be enforce& against an' *erson ! o became a *art' t ereto *rior to its com*letion+ it must be fille& u* strictl' in accor&ance !it t e aut orit' gi/en an& !it in a reasonable time. 2ut if an' suc instrument+ after com*letion+ is negotiate& to a ol&er in &ue course+ it is /ali& an& effectual for all *ur*oses in is an&s+ an& e ma' enforce it as if it a& been fille& u* strictl' in accor&ance !it t e aut orit' gi/en an& !it in a reasonable time. Sec. 14. Incom*lete instrument not &eli/ere&. - ere an incom*lete instrument as not been &eli/ere&+ it !ill not+ if com*lete& an& negotiate& !it out aut orit'+ be a /ali& contract in t e an&s of an' ol&er+ as against an' *erson ! ose signature !as *lace& t ereon before &eli/er'. Sec. 17. Deli/er') ! en effectual) ! en *resume&. E/er' contract on a negotiable instrument is incom*lete an& re/ocable until &eli/er' of t e instrument for t e *ur*ose of gi/ing effect t ereto. As bet!een imme&iate *arties an& as regar&s a remote *art' ot er t an a ol&er in &ue course+ t e &eli/er'+ in or&er to be effectual+ must be ma&e eit er b' or un&er t e aut orit' of t e *art' ma(ing+ &ra!ing+ acce*ting+ or in&orsing+ as t e case ma' be) an&+ in suc case+ t e &eli/er' ma' be s o!n to a/e been con&itional+ or for a s*ecial *ur*ose onl'+ an& not for t e *ur*ose of transferring t e *ro*ert' in t e instrument. 2ut ! ere t e instrument is in t e an&s of a ol&er in &ue course+ a /ali& &eli/er' t ereof b' all *arties *rior to im so as to ma(e t em liable to im is conclusi/el' *resume&. An& ! ere t e instrument is no longer in t e *ossession of a *art' ! ose signature a**ears t ereon+ a /ali& an& intentional &eli/er' b' im is *resume& until t e contrar' is *ro/e&. Sec. 18. =onstruction ! ere instrument is ambiguous. - ere t e language of t e instrument is ambiguous or t ere are omissions t erein+ t e follo!ing rules of construction a**l'# $a% - ere t e sum *a'able is e,*resse& in !or&s an& also in figures an& t ere is a &iscre*anc' bet!een t e t!o+ t e sum &enote& b' t e !or&s is t e sum *a'able) but if t e !or&s are ambiguous or uncertain+ reference ma' be a& to t e figures to fi, t e amount) $b% - ere t e instrument *ro/i&es for t e *a'ment of interest+ !it out s*ecif'ing t e &ate from ! ic interest is to run+ t e interest runs from t e &ate of t e instrument+ an& if t e instrument is un&ate&+ from t e issue t ereof) $c% - ere t e instrument is not &ate&+ it !ill be consi&ere& to be &ate& as of t e time it !as issue&) $&% - ere t ere is a conflict bet!een t e !ritten an& *rinte& *ro/isions of t e instrument+ t e !ritten *ro/isions *re/ail) $e% - ere t e instrument is so ambiguous t at t ere is &oubt ! et er it is a bill or note+ t e ol&er ma' treat it as eit er at is election) $f% - ere a signature is so *lace& u*on t e instrument t at it is not clear in ! at ca*acit' t e *erson ma(ing t e same inten&e& to sign+ e is to be &eeme& an in&orser) $g% - ere an instrument containing t e !or& >I *romise to *a'? is signe& b' t!o or more *ersons+ t e' are &eeme& to be 6ointl' an& se/erall' liable t ereon. Sec. 19. @iabilit' of *erson signing in tra&e or assume& name. No *erson is liable on t e instrument ! ose signature &oes not a**ear t ereon+ e,ce*t as erein ot er!ise e,*ressl' *ro/i&e&. 2ut one ! o signs in a tra&e or assume& name !ill be liable to t e same e,tent as if e a& signe& in is o!n name.

Sec. 1:. Signature b' agent) aut orit') o! s o!n. T e signature of an' *art' ma' be ma&e b' a &ul' aut ori5e& agent. No *articular form of a**ointment is necessar' for t is *ur*ose) an& t e aut orit' of t e agent ma' be establis e& as in ot er cases of agenc'. Sec. .<. @iabilit' of *erson signing as agent+ an& so fort . - ere t e instrument contains or a *erson a&&s to is signature !or&s in&icating t at e signs for or on be alf of a *rinci*al or in a re*resentati/e ca*acit'+ e is not liable on t e instrument if e !as &ul' aut ori5e&) but t e mere a&&ition of !or&s &escribing im as an agent+ or as filling a re*resentati/e c aracter+ !it out &isclosing is *rinci*al+ &oes not e,em*t im from *ersonal liabilit'. Sec. .1. Signature b' *rocuration) effect of. A signature b' >*rocuration? o*erates as notice t at t e agent as but a limite& aut orit' to sign+ an& t e *rinci*al is boun& onl' in case t e agent in so signing acte& !it in t e actual limits of is aut orit'. Sec. ... Effect of in&orsement b' infant or cor*oration.; T e in&orsement or assignment of t e instrument b' a cor*oration or b' an infant *asses t e *ro*ert' t erein+ not!it stan&ing t at from !ant of ca*acit'+ t e cor*oration or infant ma' incur no liabilit' t ereon. Sec. .1. Forge& signature) effect of. - en a signature is forge& or ma&e !it out t e aut orit' of t e *erson ! ose signature it *ur*orts to be+ it is ! oll' ino*erati/e+ an& no rig t to retain t e instrument+ or to gi/e a &isc arge t erefor+ or to enforce *a'ment t ereof against an' *art' t ereto+ can be ac"uire& t roug or un&er suc signature+ unless t e *art' against ! om it is soug t to enforce suc rig t is *reclu&e& from setting u* t e forger' or !ant of aut orit'.

NEGOTIABLE INSTRUMENTS LAW [SEC. 24-29] II. =ONSIDERATION Sec. .3. Presum*tion of consi&eration. E/er' negotiable instrument is &eeme& *rima facie to a/e been issue& for a /aluable consi&eration) an& e/er' *erson ! ose signature a**ears t ereon to a/e become a *art' t ereto for /alue. Sec. .4. Aalue+ ! at constitutes. B Aalue is an' consi&eration sufficient to su**ort a sim*le contract. An antece&ent or *re;e,isting &ebt constitutes /alue) an& is &eeme& suc ! et er t e instrument is *a'able on &eman& or at a future time. Sec. .7. - at constitutes ol&er for /alue. - ere /alue as at an' time been gi/en for t e instrument+ t e ol&er is &eeme& a ol&er for /alue in res*ect to all *arties ! o become suc *rior to t at time. Sec. .8. - en lien on instrument constitutes ol&er for /alue. B - ere t e ol&er as a lien on t e instrument arising eit er from contract or b' im*lication of la!+ e is &eeme& a ol&er for /alue to t e e,tent of is lien. Sec. .9. Effect of !ant of consi&eration. Absence or failure of consi&eration is a matter of &efense as against an' *erson not a ol&er in &ue course) an& *artial failure of consi&eration is a &efense *ro tanto+ ! et er t e failure is an ascertaine& an& li"ui&ate& amount or ot er!ise. Sec. .:. @iabilit' of accommo&ation *art'. An accommo&ation *art' is one ! o as signe& t e instrument as ma(er+ &ra!er+ acce*tor+ or in&orser+ !it out recei/ing /alue t erefor+ an& for t e *ur*ose of len&ing is name to some ot er *erson. Suc a *erson is liable on t e instrument to a ol&er for /alue+

not!it stan&ing suc *art'.

ol&er+ at t e time of ta(ing t e instrument+ (ne! im to be onl' an accommo&ation

NEGOTIABLE INSTRUMENTS LAW [SEC. 30-50]


III. NEGOTIATION Sec. 30. What constitutes negotiation. An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the ho der thereof. If pa!a" e to "earer# it is negotiated "! de i$er!% if pa!a" e to order# it is negotiated "! the indorsement of the ho der and comp eted "! de i$er!. Sec. 3&. Indorsement% how made. The indorsement must "e written on the instrument itse f or upon a paper attached thereto. The signature of the indorser# without additiona words# is a sufficient indorsement. Sec. 3'. Indorsement must "e of entire instrument. The indorsement must "e an indorsement of the entire instrument. An indorsement which purports to transfer to the indorsee a part on ! of the amount pa!a" e# or which purports to transfer the instrument to two or more indorsees se$era !# does not operate as a negotiation of the instrument. (ut where the instrument has "een paid in part# it ma! "e indorsed as to the residue. Sec. 33. )inds of indorsement. An indorsement ma! "e either specia or in " an*% and it ma! a so "e either restricti$e or +ua ified or conditiona . Sec. 3,. Specia indorsement% indorsement in " an*. A specia indorsement specifies the person to whom# or to whose order# the instrument is to "e pa!a" e# and the indorsement of such indorsee is necessar! to the further negotiation of the instrument. An indorsement in " an* specifies no indorsee# and an instrument so indorsed is pa!a" e to "earer# and ma! "e negotiated "! de i$er!. Sec. 3-. ( an* indorsement% how changed to specia indorsement. The ho der ma! con$ert a " an* indorsement into a specia indorsement "! writing o$er the signature of the indorser in " an* an! contract consistent with the character of the indorsement. Sec. 3.. When indorsement restricti$e. An indorsement is restricti$e which either/ 0a1 2rohi"its the further negotiation of the instrument% or 0"1 3onstitutes the indorsee the agent of the indorser% or 0c1 4ests the tit e in the indorsee in trust for or to the use of some other persons. (ut the mere a"sence of words imp !ing power to negotiate does not ma*e an indorsement restricti$e. Sec. 35. Effect of restricti$e indorsement% rights of indorsee. A restricti$e indorsement confers upon the indorsee the right/ 0a1 to recei$e pa!ment of the instrument% 0"1 to "ring an! action thereon that the indorser cou d "ring% 0c1 to transfer his rights as such indorsee# where the form of the indorsement authori6es him to do so. (ut a su"se+uent indorsees ac+uire on ! the tit e of the first indorsee under the restricti$e indorsement.

Sec. 37. 8ua ified indorsement. A +ua ified indorsement constitutes the indorser a mere assignor of the tit e to the instrument. It ma! "e made "! adding to the indorser9s signature the words :without recourse; or an! words of simi ar import. Such an indorsement does not impair the negotia" e character of the instrument. Sec. 3<. 3onditiona indorsement. Where an indorsement is conditiona # the part! re+uired to pa! the instrument ma! disregard the condition and ma*e pa!ment to the indorsee or his transferee whether the condition has "een fu fi ed or not. (ut an! person to whom an instrument so indorsed is negotiated wi ho d the same# or the proceeds thereof# su"=ect to the rights of the person indorsing conditiona !. Sec. ,0. Indorsement of instrument pa!a" e to "earer. Where an instrument# pa!a" e to "earer# is indorsed specia !# it ma! ne$erthe ess "e further negotiated "! de i$er!% "ut the person indorsing specia ! is ia" e as indorser to on ! such ho ders as ma*e tit e through his indorsement. Sec. ,&. Indorsement where pa!a" e to two or more persons. Where an instrument is pa!a" e to the order of two or more pa!ees or indorsees who are not partners# a must indorse un ess the one indorsing has authorit! to indorse for the others. Sec. ,'. Effect of instrument drawn or indorsed to a person as cashier. Where an instrument is drawn or indorsed to a person as :cashier; or other fisca officer of a "an* or corporation# it is deemed prima facie to "e pa!a" e to the "an* or corporation of which he is such officer# and ma! "e negotiated "! either the indorsement of the "an* or corporation or the indorsement of the officer. Sec. ,3. Indorsement where name is misspe ed# and so forth. Where the name of a pa!ee or indorsee is wrong ! designated or misspe ed# he ma! indorse the instrument as therein descri"ed adding# if he thin*s fit# his proper signature. Sec. ,,. Indorsement in representati$e capacit!. Where an! person is under o" igation to indorse in a representati$e capacit!# he ma! indorse in such terms as to negati$e persona ia"i it!. Sec. ,-. Time of indorsement% presumption. E>cept where an indorsement "ears date after the maturit! of the instrument# e$er! negotiation is deemed prima facie to ha$e "een effected "efore the instrument was o$erdue. Sec. ,.. 2 ace of indorsement% presumption. E>cept where the contrar! appears# e$er! indorsement is presumed prima facie to ha$e "een made at the p ace where the instrument is dated. Sec. ,5. 3ontinuation of negotia" e character. An instrument negotia" e in its origin continues to "e negotia" e unti it has "een restricti$e ! indorsed or discharged "! pa!ment or otherwise. Sec. ,7. Stri*ing out indorsement. The ho der ma! at an! time stri*e out an! indorsement which is not necessar! to his tit e. The indorser whose indorsement is struc* out# and a indorsers su"se+uent to him# are there"! re ie$ed from ia"i it! on the instrument. Sec. ,<. Transfer without indorsement% effect of. Where the ho der of an instrument pa!a" e to his order transfers it for $a ue without indorsing it# the transfer $ests in the transferee such tit e as the transferor had therein# and the transferee ac+uires in addition# the right to ha$e the indorsement of the transferor. (ut for the purpose of determining whether the transferee is a ho der in due course# the negotiation ta*es effect as of the time when the indorsement is actua ! made. Sec. -0. When prior part! ma! negotiate instrument. Where an instrument is negotiated "ac* to a prior part!# such part! ma!# su"=ect to the pro$isions of this Act# reissue and further negotia" e the same. (ut he is not entit ed to enforce pa!ment thereof against an! inter$ening part! to whom he was persona ! ia" e.

NEGOTIABLE INSTRUMENTS LAW [SEC. 51-59]


I4. ?IG@TS OA T@E @OBCE? Sec. -&. ?ight of ho der to sue% pa!ment. The ho der of a negotia" e instrument ma! to sue thereon in his own name% and pa!ment to him in due course discharges the instrument. Sec. -'. What constitutes a ho der in due course. A ho der in due course is a ho der who has ta*en the instrument under the fo owing conditions/ 0a1 That it is comp ete and regu ar upon its face% 0"1 That he "ecame the ho der of it "efore it was o$erdue# and without notice that it has "een pre$ious ! dishonored# if such was the fact% 0c1 That he too* it in good faith and for $a ue% 0d1 That at the time it was negotiated to him# he had no notice of an! infirmit! in the instrument or defect in the tit e of the person negotiating it. Sec. -3. When person not deemed ho der in due course. Where an instrument pa!a" e on demand is negotiated on an unreasona" e ength of time after its issue# the ho der is not deemed a ho der in due course. Sec. -,. Notice "efore fu amount is paid. Where the transferee recei$es notice of an! infirmit! in the instrument or defect in the tit e of the person negotiating the same "efore he has paid the fu amount agreed to "e paid therefor# he wi "e deemed a ho der in due course on ! to the e>tent of the amount therefore paid "! him. Sec. --. When tit e defecti$e. The tit e of a person who negotiates an instrument is defecti$e within the meaning of this Act when he o"tained the instrument# or an! signature thereto# "! fraud# duress# or force and fear# or other un awfu means# or for an i ega consideration# or when he negotiates it in "reach of faith# or under such circumstances as amount to a fraud. Sec. -.. What constitutes notice of defect. To constitutes notice of an infirmit! in the instrument or defect in the tit e of the person negotiating the same# the person to whom it is negotiated must ha$e had actua *now edge of the infirmit! or defect# or *now edge of such facts that his action in ta*ing the instrument amounted to "ad faith. Sec. -5. ?ights of ho der in due course. A ho der in due course ho ds the instrument free from an! defect of tit e of prior parties# and free from defenses a$ai a" e to prior parties among themse $es# and ma! enforce pa!ment of the instrument for the fu amount thereof against a parties ia" e thereon. Sec. -7. When su"=ect to origina defense. In the hands of an! ho der other than a ho der in due course# a negotia" e instrument is su"=ect to the same defenses as if it were nonDnegotia" e. (ut a ho der who deri$es his tit e through a ho der in due course# and who is not himse f a part! to an! fraud or i ega it! affecting the instrument# has a the rights of such former ho der in respect of a parties prior to the atter. Sec. -<. Who is deemed ho der in due course. E$er! ho der is deemed prima facie to "e a ho der in due course% "ut when it is shown that the tit e of an! person who has negotiated the instrument was defecti$e# the "urden is on the ho der to pro$e that he or some person under whom he c aims ac+uired the tit e as ho der in due course. (ut the astDmentioned ru e does not app ! in fa$or of a part! who "ecame "ound on the instrument prior to the ac+uisition of such defecti$e tit e.

NEGOTIABLE INSTRUMENTS LAW [SEC. 60-69]


4. BIA(IBITIES OA 2A?TIES Sec. .0. Bia"i it! of ma*er. The ma*er of a negotia" e instrument# "! ma*ing it# engages that he wi pa! it according to its tenor# and admits the e>istence of the pa!ee and his then capacit! to indorse. Sec. .&. Bia"i it! of drawer. The drawer "! drawing the instrument admits the e>istence of the pa!ee and his then capacit! to indorse% and engages that# on due presentment# the instrument wi "e accepted or paid# or "oth# according to its tenor# and that if it "e dishonored and the necessar! proceedings on dishonor "e du ! ta*en# he wi pa! the amount thereof to the ho der or to an! su"se+uent indorser who ma! "e compe ed to pa! it. (ut the drawer ma! insert in the instrument an e>press stipu ation negati$ing or imiting his own ia"i it! to the ho der. Sec. .'. Bia"i it! of acceptor. The acceptor# "! accepting the instrument# engages that he wi pa! it according to the tenor of his acceptance and admits/ 0a1 The e>istence of the drawer# the genuineness of his signature# and his capacit! and authorit! to draw the instrument% and 0"1 The e>istence of the pa!ee and his then capacit! to indorse. Sec. .3. When a person deemed indorser. A person p acing his signature upon an instrument otherwise than as ma*er# drawer# or acceptor# is deemed to "e indorser un ess he c ear ! indicates "! appropriate words his intention to "e "ound in some other capacit!. Sec. .,. Bia"i it! of irregu ar indorser. Where a person# not otherwise a part! to an instrument# p aces thereon his signature in " an* "efore de i$er!# he is ia" e as indorser# in accordance with the fo owing ru es/ 0a1 If the instrument is pa!a" e to the order of a third person# he is ia" e to the pa!ee and to a su"se+uent parties. 0"1 If the instrument is pa!a" e to the order of the ma*er or drawer# or is pa!a" e to "earer# he is ia" e to a parties su"se+uent to the ma*er or drawer. 0c1 If he signs for the accommodation of the pa!ee# he is ia" e to a parties su"se+uent to the pa!ee. Sec. .-. Warrant! where negotiation "! de i$er! and so forth. E E$er! person negotiating an instrument "! de i$er! or "! a +ua ified indorsement warrants/ 0a1 That the instrument is genuine and in a respects what it purports to "e% 0"1 That he has a good tit e to it% 0c1 That a prior parties had capacit! to contract% 0d1 That he has no *now edge of an! fact which wou d impair the $a idit! of the instrument or render it $a ue ess. (ut when the negotiation is "! de i$er! on !# the warrant! e>tends in fa$or of no ho der other than the immediate transferee. The pro$isions of su"di$ision 0c1 of this section do not app ! to a person negotiating pu" ic or corporation securities other than "i s and notes.

Sec. ... Bia"i it! of genera indorser. E$er! indorser who indorses without +ua ification# warrants to a su"se+uent ho ders in due course/ 0a1 The matters and things mentioned in su"di$isions 0a1# 0"1# and 0c1 of the ne>t preceding section% and 0"1 That the instrument is# at the time of his indorsement# $a id and su"sisting% And# in addition# he engages that# on due presentment# it sha "e accepted or paid# or "oth# as the case ma! "e# according to its tenor# and that if it "e dishonored and the necessar! proceedings on dishonor "e du ! ta*en# he wi pa! the amount thereof to the ho der# or to an! su"se+uent indorser who ma! "e compe ed to pa! it. Sec. .5. Bia"i it! of indorser where paper negotia" e "! de i$er!. E Where a person p aces his indorsement on an instrument negotia" e "! de i$er!# he incurs a the ia"i it! of an indorser. Sec. .7. Order in which indorsers are ia" e. As respect one another# indorsers are ia" e prima facie in the order in which the! indorse% "ut e$idence is admissi" e to show that# as "etween or among themse $es# the! ha$e agreed otherwise. Foint pa!ees or =oint indorsees who indorse are deemed to indorse =oint ! and se$era !. Sec. .<. Bia"i it! of an agent or "ro*er. Where a "ro*er or other agent negotiates an instrument without indorsement# he incurs a the ia"i ities prescri"ed "! Section Si>t!Dfi$e of this Act# un ess he disc oses the name of his principa and the fact that he is acting on ! as agent.

NEGOTIABLE INSTRUMENTS LAW [SEC. 70-88]


4I. 2?ESENTATION AO? 2AGHENT Sec. 50. Effect of want of demand on principa de"tor. 2resentment for pa!ment is not necessar! in order to charge the person primari ! ia" e on the instrument% "ut if the instrument is# "! its terms# pa!a" e at a specia p ace# and he is a" e and wi ing to pa! it there at maturit!# such a"i it! and wi ingness are e+ui$a ent to a tender of pa!ment upon his part. (ut e>cept as herein otherwise pro$ided# presentment for pa!ment is necessar! in order to charge the drawer and indorsers. Sec. 5&. 2resentment where instrument is not pa!a" e on demand and where pa!a" e on demand. Where the instrument is not pa!a" e on demand# presentment must "e made on the da! it fa s due. Where it is pa!a" e on demand# presentment must "e made within a reasona" e time after its issue# e>cept that in the case of a "i of e>change# presentment for pa!ment wi "e sufficient if made within a reasona" e time after the ast negotiation thereof. Sec. 5'. What constitutes a sufficient presentment. 2resentment for pa!ment# to "e sufficient# must "e made/ 0a1 (! the ho der# or "! some person authori6ed to recei$e pa!ment on his "eha f% 0"1 At a reasona" e hour on a "usiness da!% 0c1 At a proper p ace as herein defined% 0d1 To the person primari ! ia" e on the instrument# or if he is a"sent or inaccessi" e# to an! person found at the p ace where the presentment is made. Sec. 53. 2 ace of presentment. 2resentment for pa!ment is made at the proper p ace/ 0a1 Where a p ace of pa!ment is specified in the instrument and it is there presented%

0"1 Where no p ace of pa!ment is specified "ut the address of the person to ma*e pa!ment is gi$en in the instrument and it is there presented% 0c1 Where no p ace of pa!ment is specified and no address is gi$en and the instrument is presented at the usua p ace of "usiness or residence of the person to ma*e pa!ment% 0d1 In an! other case if presented to the person to ma*e pa!ment where$er he can "e found# or if presented at his ast *nown p ace of "usiness or residence. Sec. 5,. Instrument must "e e>hi"ited. The instrument must "e e>hi"ited to the person from whom pa!ment is demanded# and when it is paid# must "e de i$ered up to the part! pa!ing it. Sec. 5-. 2resentment where instrument pa!a" e at "an*. Where the instrument is pa!a" e at a "an*# presentment for pa!ment must "e made during "an*ing hours# un ess the person to ma*e pa!ment has no funds there to meet it at an! time during the da!# in which case presentment at an! hour "efore the "an* is c osed on that da! is sufficient. Sec. 5.. 2resentment where principa de"tor is dead. Where the person primari ! ia" e on the instrument is dead and no p ace of pa!ment is specified# presentment for pa!ment must "e made to his persona representati$e# if such there "e# and if# with the e>ercise of reasona" e di igence# he can "e found. Sec. 55. 2resentment to persons ia" e as partners. Where the persons primari ! ia" e on the instrument are ia" e as partners and no p ace of pa!ment is specified# presentment for pa!ment ma! "e made to an! one of them# e$en though there has "een a disso ution of the firm. Sec. 57. 2resentment to =oint de"tors. Where there are se$era persons# not partners# primari ! ia" e on the instrument and no p ace of pa!ment is specified# presentment must "e made to them a . Sec. 5<. When presentment not re+uired to charge the drawer. 2resentment for pa!ment is not re+uired in order to charge the drawer where he has no right to e>pect or re+uire that the drawee or acceptor wi pa! the instrument. Sec. 70. When presentment not re+uired to charge the indorser. 2resentment is not re+uired in order to charge an indorser where the instrument was made or accepted for his accommodation and he has no reason to e>pect that the instrument wi "e paid if presented. Sec. 7&. When de a! in ma*ing presentment is e>cused. Ce a! in ma*ing presentment for pa!ment is e>cused when the de a! is caused "! circumstances "e!ond the contro of the ho der and not imputa" e to his defau t# misconduct# or neg igence. When the cause of de a! ceases to operate# presentment must "e made with reasona" e di igence. Sec. 7'. When presentment for pa!ment is e>cused. 2resentment for pa!ment is e>cused/ 0a1 Where# after the e>ercise of reasona" e di igence# presentment# as re+uired "! this Act# cannot "e made% 0"1 Where the drawee is a fictitious person% 0c1 (! wai$er of presentment# e>press or imp ied. Sec. 73. When instrument dishonored "! nonDpa!ment. The instrument is dishonored "! nonDpa!ment when/ 0a1 It is du ! presented for pa!ment and pa!ment is refused or cannot "e o"tained% or

0"1 2resentment is e>cused and the instrument is o$erdue and unpaid. Sec. 7,. Bia"i it! of person secondari ! ia" e# when instrument dishonored. Su"=ect to the pro$isions of this Act# when the instrument is dishonored "! nonDpa!ment# an immediate right of recourse to a parties secondari ! ia" e thereon accrues to the ho der. Sec. 7-. Time of maturit!. E$er! negotia" e instrument is pa!a" e at the time fi>ed therein without grace. When the da! of maturit! fa s upon Sunda! or a ho ida!# the instruments fa ing due or "ecoming pa!a" e on Saturda! are to "e presented for pa!ment on the ne>t succeeding "usiness da! e>cept that instruments pa!a" e on demand ma!# at the option of the ho der# "e presented for pa!ment "efore twe $e o9c oc* noon on Saturda! when that entire da! is not a ho ida!. Sec. 7.. Time% how computed. When the instrument is pa!a" e at a fi>ed period after date# after sight# or after that happening of a specified e$ent# the time of pa!ment is determined "! e>c uding the da! from which the time is to "egin to run# and "! inc uding the date of pa!ment. Sec. 75. ?u e where instrument pa!a" e at "an*. Where the instrument is made pa!a" e at a "an*# it is e+ui$a ent to an order to the "an* to pa! the same for the account of the principa de"tor thereon. Sec. 77. What constitutes pa!ment in due course. 2a!ment is made in due course when it is made at or after the maturit! of the pa!ment to the ho der thereof in good faith and without notice that his tit e is defecti$e.

NEGOTIABLE INSTRUMENTS LAW [SEC. 89-118]


4II. NOTI3E OA CIS@ONO? Sec. 7<. To whom notice of dishonor must "e gi$en. E>cept as herein otherwise pro$ided# when a negotia" e instrument has "een dishonored "! nonDacceptance or nonDpa!ment# notice of dishonor must "e gi$en to the drawer and to each indorser# and an! drawer or indorser to whom such notice is not gi$en is discharged. Sec. <0. (! whom gi$en. The notice ma! "e gi$en "! or on "eha f of the ho der# or "! or on "eha f of an! part! to the instrument who might "e compe ed to pa! it to the ho der# and who# upon ta*ing it up# wou d ha$e a right to reim"ursement from the part! to whom the notice is gi$en. Sec. <&. Notice gi$en "! agent. Notice of dishonor ma! "e gi$en "! an! agent either in his own name or in the name of an! part! entit ed to gi$en notice# whether that part! "e his principa or not. Sec. <'. Effect of notice on "eha f of ho der. Where notice is gi$en "! or on "eha f of the ho der# it inures to the "enefit of a su"se+uent ho ders and a prior parties who ha$e a right of recourse against the part! to whom it is gi$en. Sec. <3. Effect where notice is gi$en "! part! entit ed thereto. Where notice is gi$en "! or on "eha f of a part! entit ed to gi$e notice# it inures to the "enefit of the ho der and a parties su"se+uent to the part! to whom notice is gi$en. Sec. <,. When agent ma! gi$e notice. Where the instrument has "een dishonored in the hands of an agent# he ma! either himse f gi$e notice to the parties ia" e thereon# or he ma! gi$e notice to his principa . If he gi$es notice to his principa # he must do so within the same time as if he were the ho der# and the principa # upon the receipt of such notice# has himse f the same time for gi$ing notice as if the agent had "een an independent ho der.

Sec. <-. When notice sufficient. A written notice need not "e signed and an insufficient written notice ma! "e supp emented and $a idated "! $er"a communication. A misdescription of the instrument does not $itiate the notice un ess the part! to whom the notice is gi$en is in fact mis ed there"!. Sec. <.. Aorm of notice. The notice ma! "e in writing or mere ! ora and ma! "e gi$en in an! terms which sufficient ! identif! the instrument# and indicate that it has "een dishonored "! nonDacceptance or nonDpa!ment. It ma! in a cases "e gi$en "! de i$ering it persona ! or through the mai s. Sec. <5. To whom notice ma! "e gi$en. Notice of dishonor ma! "e gi$en either to the part! himse f or to his agent in that "eha f. Sec. <7. Notice where part! is dead. When an! part! is dead and his death is *nown to the part! gi$ing notice# the notice must "e gi$en to a persona representati$e# if there "e one# and if with reasona" e di igence# he can "e found. If there "e no persona representati$e# notice ma! "e sent to the ast residence or ast p ace of "usiness of the deceased. Sec. <<. Notice to partners. Where the parties to "e notified are partners# notice to an! one partner is notice to the firm# e$en though there has "een a disso ution. Sec. &00. Notice to persons =oint ! ia" e. Notice to =oint persons who are not partners must "e gi$en to each of them un ess one of them has authorit! to recei$e such notice for the others. Sec. &0&. Notice to "an*rupt. Where a part! has "een ad=udged a "an*rupt or an inso $ent# or has made an assignment for the "enefit of creditors# notice ma! "e gi$en either to the part! himse f or to his trustee or assignee. Sec. &0'. Time within which notice must "e gi$en. Notice ma! "e gi$en as soon as the instrument is dishonored and# un ess de a! is e>cused as hereinafter pro$ided# must "e gi$en within the time fi>ed "! this Act. Sec. &03. Where parties reside in same p ace. Where the person gi$ing and the person to recei$e notice reside in the same p ace# notice must "e gi$en within the fo owing times/ 0a1 If gi$en at the p ace of "usiness of the person to recei$e notice# it must "e gi$en "efore the c ose of "usiness hours on the da! fo owing. 0"1 If gi$en at his residence# it must "e gi$en "efore the usua hours of rest on the da! fo owing. 0c1 If sent "! mai # it must "e deposited in the post office in time to reach him in usua course on the da! fo owing. Sec. &0,. Where parties reside in different p aces. Where the person gi$ing and the person to recei$e notice reside in different p aces# the notice must "e gi$en within the fo owing times/ 0a1 If sent "! mai # it must "e deposited in the post office in time to go "! mai the da! fo owing the da! of dishonor# or if there "e no mai at a con$enient hour on ast da!# "! the ne>t mai thereafter. 0"1 If gi$en otherwise than through the post office# then within the time that notice wou d ha$e "een recei$ed in due course of mai # if it had "een deposited in the post office within the time specified in the ast su"di$ision. Sec. &0-. When sender deemed to ha$e gi$en due notice. Where notice of dishonor is du ! addressed and deposited in the post office# the sender is deemed to ha$e gi$en due notice# notwithstanding an! miscarriage in the mai s.

Sec. &0.. Ceposit in post office% what constitutes. Notice is deemed to ha$e "een deposited in the postD office when deposited in an! "ranch post office or in an! etter "o> under the contro of the postDoffice department. Sec. &05. Notice to su"se+uent part!% time of. Where a part! recei$es notice of dishonor# he has# after the receipt of such notice# the same time for gi$ing notice to antecedent parties that the ho der has after the dishonor. Sec. &07. Where notice must "e sent. Where a part! has added an address to his signature# notice of dishonor must "e sent to that address% "ut if he has not gi$en such address# then the notice must "e sent as fo ows/ 0a1 Either to the postDoffice nearest to his p ace of residence or to the postDoffice where he is accustomed to recei$e his etters% or 0"1 If he i$es in one p ace and has his p ace of "usiness in another# notice ma! "e sent to either p ace% or 0c1 If he is so=ourning in another p ace# notice ma! "e sent to the p ace where he is so so=ourning. (ut where the notice is actua ! recei$ed "! the part! within the time specified in this Act# it wi "e sufficient# though not sent in accordance with the re+uirement of this section. Sec. &0<. Wai$er of notice. Notice of dishonor ma! "e wai$ed either "efore the time of gi$ing notice has arri$ed or after the omission to gi$e due notice# and the wai$er ma! "e e>pressed or imp ied. Sec. &&0. Whom affected "! wai$er. Where the wai$er is em"odied in the instrument itse f# it is "inding upon a parties% "ut# where it is written a"o$e the signature of an indorser# it "inds him on !. Sec. &&&. Wai$er of protest. A wai$er of protest# whether in the case of a foreign "i of e>change or other negotia" e instrument# is deemed to "e a wai$er not on ! of a forma protest "ut a so of presentment and notice of dishonor. Sec. &&'. When notice is dispensed with. Notice of dishonor is dispensed with when# after the e>ercise of reasona" e di igence# it cannot "e gi$en to or does not reach the parties sought to "e charged. Sec. &&3. Ce a! in gi$ing notice% how e>cused. Ce a! in gi$ing notice of dishonor is e>cused when the de a! is caused "! circumstances "e!ond the contro of the ho der and not imputa" e to his defau t# misconduct# or neg igence. When the cause of de a! ceases to operate# notice must "e gi$en with reasona" e di igence. Sec. &&,. When notice need not "e gi$en to drawer. Notice of dishonor is not re+uired to "e gi$en to the drawer in either of the fo owing cases/ 0a1 Where the drawer and drawee are the same person% 0"1 When the drawee is fictitious person or a person not ha$ing capacit! to contract% 0c1 When the drawer is the person to whom the instrument is presented for pa!ment% 0d1 Where the drawer has no right to e>pect or re+uire that the drawee or acceptor wi honor the instrument% 0e1 Where the drawer has countermanded pa!ment. Sec. &&-. When notice need not "e gi$en to indorser. E Notice of dishonor is not re+uired to "e gi$en to an indorser in either of the fo owing cases/

0a1 When the drawee is a fictitious person or person not ha$ing capacit! to contract# and the indorser was aware of that fact at the time he indorsed the instrument% 0"1 Where the indorser is the person to whom the instrument is presented for pa!ment% 0c1 Where the instrument was made or accepted for his accommodation. Sec. &&.. Notice of nonDpa!ment where acceptance refused. Where due notice of dishonor "! nonD acceptance has "een gi$en# notice of a su"se+uent dishonor "! nonDpa!ment is not necessar! un ess in the meantime the instrument has "een accepted. Sec. &&5. Effect of omission to gi$e notice of nonDacceptance. An omission to gi$e notice of dishonor "! nonDacceptance does not pre=udice the rights of a ho der in due course su"se+uent to the omission. Sec. &&7. When protest need not "e made% when must "e made. Where an! negotia" e instrument has "een dishonored# it ma! "e protested for nonDacceptance or nonDpa!ment# as the case ma! "e% "ut protest is not re+uired e>cept in the case of foreign "i s of e>change.

NEGOTIABLE INSTRUMENTS LAW [SEC. 119-125]


4III. CIS3@A?GE OA NEGOTIA(BE INST?IHENTS Sec. &&<. Instrument% how discharged. A negotia" e instrument is discharged/ 0a1 (! pa!ment in due course "! or on "eha f of the principa de"tor% 0"1 (! pa!ment in due course "! the part! accommodated# where the instrument is made or accepted for his accommodation% 0c1 (! the intentiona cance ation thereof "! the ho der% 0d1 (! an! other act which wi discharge a simp e contract for the pa!ment of mone!% 0e1 When the principa de"tor "ecomes the ho der of the instrument at or after maturit! in his own right. Sec. &'0. When persons secondari ! ia" e on the instrument are discharged. A person secondari ! ia" e on the instrument is discharged/ 0a1 (! an! act which discharges the instrument% 0"1 (! the intentiona cance ation of his signature "! the ho der% 0c1 (! the discharge of a prior part!% 0d1 (! a $a id tender or pa!ment made "! a prior part!% 0e1 (! a re ease of the principa de"tor un ess the ho der9s right of recourse against the part! secondari ! ia" e is e>press ! reser$ed% 0f1 (! an! agreement "inding upon the ho der to e>tend the time of pa!ment or to postpone the ho der9s right to enforce the instrument un ess made with the assent of the part! secondari ! ia" e or un ess the right of recourse against such part! is e>press ! reser$ed. Sec. &'&. ?ight of part! who discharges instrument. Where the instrument is paid "! a part! secondari ! ia" e thereon# it is not discharged% "ut the part! so pa!ing it is remitted to his former rights as regard a

prior parties# and he ma! stri*e out his own and a su"se+uent indorsements and against negotiate the instrument# e>cept/ 0a1 Where it is pa!a" e to the order of a third person and has "een paid "! the drawer% and 0"1 Where it was made or accepted for accommodation and has "een paid "! the part! accommodated. Sec. &''. ?enunciation "! ho der. The ho der ma! e>press ! renounce his rights against an! part! to the instrument "efore# at# or after its maturit!. An a"so ute and unconditiona renunciation of his rights against the principa de"tor made at or after the maturit! of the instrument discharges the instrument. (ut a renunciation does not affect the rights of a ho der in due course without notice. A renunciation must "e in writing un ess the instrument is de i$ered up to the person primari ! ia" e thereon. Sec. &'3. 3ance ation% unintentiona % "urden of proof. A cance ation made unintentiona ! or under a mista*e or without the authorit! of the ho der# is inoperati$e "ut where an instrument or an! signature thereon appears to ha$e "een cance ed# the "urden of proof ies on the part! who a eges that the cance ation was made unintentiona ! or under a mista*e or without authorit!. Sec. &',. A teration of instrument% effect of. Where a negotia" e instrument is materia ! a tered without the assent of a parties ia" e thereon# it is a$oided# e>cept as against a part! who has himse f made# authori6ed# or assented to the a teration and su"se+uent indorsers. (ut when an instrument has "een materia ! a tered and is in the hands of a ho der in due course not a part! to the a teration# he ma! enforce pa!ment thereof according to its origina tenor. Sec. &'-. What constitutes a materia a teration. An! a teration which changes/ 0a1 The date% 0"1 The sum pa!a" e# either for principa or interest% 0c1 The time or p ace of pa!ment/ 0d1 The num"er or the re ations of the parties% 0e1 The medium or currenc! in which pa!ment is to "e made% 0f1 Or which adds a p ace of pa!ment where no p ace of pa!ment is specified# or an! other change or addition which a ters the effect of the instrument in an! respect# is a materia a teration.

NEGOTIABLE INSTRUMENTS LAW [SEC. 126-131]


(IBBS OA EJ3@ANGE IJ. AO?H ANC INTE?2?ETATION Sec. &'.. (i of e>change# defined. A "i of e>change is an unconditiona order in writing addressed "! one person to another# signed "! the person gi$ing it# re+uiring the person to whom it is addressed to pa! on demand or at a fi>ed or determina" e future time a sum certain in mone! to order or to "earer. Sec. &'5. (i not an assignment of funds in hands of drawee. A "i of itse f does not operate as an assignment of the funds in the hands of the drawee a$ai a" e for the pa!ment thereof# and the drawee is not ia" e on the "i un ess and unti he accepts the same.

Sec. &'7. (i addressed to more than one drawee. A "i ma! "e addressed to two or more drawees =oint !# whether the! are partners or not% "ut not to two or more drawees in the a ternati$e or in succession. Sec. &'<. In and and foreign "i s of e>change. An in and "i of e>change is a "i which is# or on its face purports to "e# "oth drawn and pa!a" e within the 2hi ippines. An! other "i is a foreign "i . In ess the contrar! appears on the face of the "i # the ho der ma! treat it as an in and "i . Sec. &30. When "i ma! "e treated as promissor! note. Where in a "i the drawer and drawee are the same person or where the drawee is a fictitious person or a person not ha$ing capacit! to contract# the ho der ma! treat the instrument at his option either as a "i of e>change or as a promissor! note. Sec. &3&. ?eferee in case of need. The drawer of a "i and an! indorser ma! insert thereon the name of a person to whom the ho der ma! resort in case of need% that is to sa!# in case the "i is dishonored "! nonDacceptance or nonDpa!ment. Such person is ca ed a referee in case of need. It is in the option of the ho der to resort to the referee in case of need or not as he ma! see fit.

NEGOTIABLE INSTRUMENTS LAW [SEC. 132-142]


J. A33E2TAN3E Sec. &3'. Acceptance% how made# "! and so forth. The acceptance of a "i is the signification "! the drawee of his assent to the order of the drawer. The acceptance must "e in writing and signed "! the drawee. It must not e>press that the drawee wi perform his promise "! an! other means than the pa!ment of mone!. Sec. &33. @o der entit ed to acceptance on face of "i . The ho der of a "i presenting the same for acceptance ma! re+uire that the acceptance "e written on the "i # and# if such re+uest is refused# ma! treat the "i as dishonored. Sec. &3,. Acceptance "! separate instrument. Where an acceptance is written on a paper other than the "i itse f# it does not "ind the acceptor e>cept in fa$or of a person to whom it is shown and who# on the faith thereof# recei$es the "i for $a ue. Sec. &3-. 2romise to accept% when e+ui$a ent to acceptance. An unconditiona promise in writing to accept a "i "efore it is drawn is deemed an actua acceptance in fa$or of e$er! person who# upon the faith thereof# recei$es the "i for $a ue. Sec. &3.. Time a owed drawee to accept. The drawee is a owed twent!Dfour hours after presentment in which to decide whether or not he wi accept the "i % the acceptance# if gi$en# dates as of the da! of presentation. Sec. &35. Bia"i it! of drawee returning or destro!ing "i . Where a drawee to whom a "i is de i$ered for acceptance destro!s the same# or refuses within twent!Dfour hours after such de i$er! or within such other period as the ho der ma! a ow# to return the "i accepted or nonDaccepted to the ho der# he wi "e deemed to ha$e accepted the same. Sec. &37. Acceptance of incomp ete "i . A "i ma! "e accepted "efore it has "een signed "! the drawer# or whi e otherwise incomp ete# or when it is o$erdue# or after it has "een dishonored "! a pre$ious refusa to accept# or "! non pa!ment. (ut when a "i pa!a" e after sight is dishonored "! nonD acceptance and the drawee su"se+uent ! accepts it# the ho der# in the a"sence of an! different agreement# is entit ed to ha$e the "i accepted as of the date of the first presentment.

Sec. &3<. )inds of acceptance. An acceptance is either genera or +ua ified. A genera acceptance assents without +ua ification to the order of the drawer. A +ua ified acceptance in e>press terms $aries the effect of the "i as drawn. Sec. &,0. What constitutes a genera acceptance. An acceptance to pa! at a particu ar p ace is a genera acceptance un ess it e>press ! states that the "i is to "e paid there on ! and not e sewhere. Sec. &,&. 8ua ified acceptance. An acceptance is +ua ified which is/ 0a1 3onditiona % that is to sa!# which ma*es pa!ment "! the acceptor dependent on the fu fi ment of a condition therein stated% 0"1 2artia % that is to sa!# an acceptance to pa! part on ! of the amount for which the "i is drawn% 0c1 Boca % that is to sa!# an acceptance to pa! on ! at a particu ar p ace% 0d1 8ua ified as to time% 0e1 The acceptance of some# one or more of the drawees "ut not of a . Sec. &,'. ?ights of parties as to +ua ified acceptance. The ho der ma! refuse to ta*e a +ua ified acceptance and if he does not o"tain an un+ua ified acceptance# he ma! treat the "i as dishonored "! nonDacceptance. Where a +ua ified acceptance is ta*en# the drawer and indorsers are discharged from ia"i it! on the "i un ess the! ha$e e>press ! or imp ied ! authori6ed the ho der to ta*e a +ua ified acceptance# or su"se+uent ! assent thereto. When the drawer or an indorser recei$es notice of a +ua ified acceptance# he must# within a reasona" e time# e>press his dissent to the ho der or he wi "e deemed to ha$e assented thereto.

NEGOTIABLE INSTRUMENTS LAW [SEC. 143-151]


JI. 2?ESENTHENT AO? A33E2TAN3E Sec. &,3. When presentment for acceptance must "e made. 2resentment for acceptance must "e made/ 0a1 Where the "i is pa!a" e after sight# or in an! other case# where presentment for acceptance is necessar! in order to fi> the maturit! of the instrument% or 0"1 Where the "i e>press ! stipu ates that it sha "e presented for acceptance% or 0c1 Where the "i is drawn pa!a" e e sewhere than at the residence or p ace of "usiness of the drawee. In no other case is presentment for acceptance necessar! in order to render an! part! to the "i ia" e. Sec. &,,. When fai ure to present re eases drawer and indorser. E>cept as herein otherwise pro$ided# the ho der of a "i which is re+uired "! the ne>t preceding section to "e presented for acceptance must either present it for acceptance or negotiate it within a reasona" e time. If he fai s to do so# the drawer and a indorsers are discharged. Sec. &,-. 2resentment% how made. 2resentment for acceptance must "e made "! or on "eha f of the ho der at a reasona" e hour# on a "usiness da! and "efore the "i is o$erdue# to the drawee or some person authori6ed to accept or refuse acceptance on his "eha f% and

0a1 Where a "i is addressed to two or more drawees who are not partners# presentment must "e made to them a un ess one has authorit! to accept or refuse acceptance for a # in which case presentment ma! "e made to him on !% 0"1 Where the drawee is dead# presentment ma! "e made to his persona representati$e% 0c1 Where the drawee has "een ad=udged a "an*rupt or an inso $ent or has made an assignment for the "enefit of creditors# presentment ma! "e made to him or to his trustee or assignee. Sec. &,.. On what da!s presentment ma! "e made. A "i ma! "e presented for acceptance on an! da! on which negotia" e instruments ma! "e presented for pa!ment under the pro$isions of Sections se$ent!D two and eight!Dfi$e of this Act. When Saturda! is not otherwise a ho ida!# presentment for acceptance ma! "e made "efore twe $e o9c oc* noon on that da!. Sec. &,5. 2resentment where time is insufficient. Where the ho der of a "i drawn pa!a" e e sewhere than at the p ace of "usiness or the residence of the drawee has no time# with the e>ercise of reasona" e di igence# to present the "i for acceptance "efore presenting it for pa!ment on the da! that it fa s due# the de a! caused "! presenting the "i for acceptance "efore presenting it for pa!ment is e>cused and does not discharge the drawers and indorsers. Sec. &,7. Where presentment is e>cused. 2resentment for acceptance is e>cused and a "i ma! "e treated as dishonored "! nonDacceptance in either of the fo owing cases/ 0a1 Where the drawee is dead# or has a"sconded# or is a fictitious person or a person not ha$ing capacit! to contract "! "i . 0"1 Where# after the e>ercise of reasona" e di igence# presentment can not "e made. 0c1 Where# a though presentment has "een irregu ar# acceptance has "een refused on some other ground. Sec. &,<. When dishonored "! nonacceptance. A "i is dishonored "! nonDacceptance/ 0a1 When it is du ! presented for acceptance and such an acceptance as is prescri"ed "! this Act is refused or can not "e o"tained% or 0"1 When presentment for acceptance is e>cused and the "i is not accepted. Sec. &-0. Cut! of ho der where "i not accepted. Where a "i is du ! presented for acceptance and is not accepted within the prescri"ed time# the person presenting it must treat the "i as dishonored "! nonacceptance or he oses the right of recourse against the drawer and indorsers. Sec. &-&. ?ights of ho der where "i not accepted. When a "i is dishonored "! nonacceptance# an immediate right of recourse against the drawer and indorsers accrues to the ho der and no presentment for pa!ment is necessar!.

NEGOTIABLE INSTRUMENTS LAW [SEC. 152-160]


JII. 2?OTEST Sec. &-'. In what cases protest necessar!. Where a foreign "i appearing on its face to "e such is dishonored "! nonacceptance# it must "e du ! protested for nonacceptance# "! nonacceptance is dishonored and where such a "i which has not pre$ious ! "een dishonored "! nonpa!ment# it must "e du ! protested for nonpa!ment. If it is not so protested# the drawer and indorsers are discharged. Where a "i does not appear on its face to "e a foreign "i # protest thereof in case of dishonor is unnecessar!.

Sec. &-3. 2rotest% how made. The protest must "e anne>ed to the "i or must contain a cop! thereof# and must "e under the hand and sea of the notar! ma*ing it and must specif!/ 0a1 The time and p ace of presentment% 0"1 The fact that presentment was made and the manner thereof% 0c1 The cause or reason for protesting the "i % 0d1 The demand made and the answer gi$en# if an!# or the fact that the drawee or acceptor cou d not "e found. Sec. &-,. 2rotest# "! whom made. 2rotest ma! "e made "!/ 0a1 A notar! pu" ic% or 0"1 (! an! respecta" e resident of the p ace where the "i is dishonored# in the presence of two or more credi" e witnesses. Sec. &--. 2rotest% when to "e made. When a "i is protested# such protest must "e made on the da! of its dishonor un ess de a! is e>cused as herein pro$ided. When a "i has "een du ! noted# the protest ma! "e su"se+uent ! e>tended as of the date of the noting. Sec. &-.. 2rotest% where made. A "i must "e protested at the p ace where it is dishonored# e>cept that when a "i drawn pa!a" e at the p ace of "usiness or residence of some person other than the drawee has "een dishonored "! nonacceptance# it must "e protested for nonDpa!ment at the p ace where it is e>pressed to "e pa!a" e# and no further presentment for pa!ment to# or demand on# the drawee is necessar!. Sec. &-5. 2rotest "oth for nonDacceptance and nonDpa!ment. A "i which has "een protested for nonD acceptance ma! "e su"se+uent ! protested for nonDpa!ment. Sec. &-7. 2rotest "efore maturit! where acceptor inso $ent. Where the acceptor has "een ad=udged a "an*rupt or an inso $ent or has made an assignment for the "enefit of creditors "efore the "i matures# the ho der ma! cause the "i to "e protested for "etter securit! against the drawer and indorsers. Sec. &-<. When protest dispensed with. 2rotest is dispensed with "! an! circumstances which wou d dispense with notice of dishonor. Ce a! in noting or protesting is e>cused when de a! is caused "! circumstances "e!ond the contro of the ho der and not imputa" e to his defau t# misconduct# or neg igence. When the cause of de a! ceases to operate# the "i must "e noted or protested with reasona" e di igence. Sec. &.0. 2rotest where "i is ost and so forth. When a "i is ost or destro!ed or is wrong ! detained from the person entit ed to ho d it# protest ma! "e made on a cop! or written particu ars thereof.

NEGOTIABLE INSTRUMENTS LAW [SEC. 161-170]


JIII. A33E2TAN3E AO? @ONO? Sec. &.&. When "i ma! "e accepted for honor. When a "i of e>change has "een protested for dishonor "! nonDacceptance or protested for "etter securit! and is not o$erdue# an! person not "eing a part! a read! ia" e thereon ma!# with the consent of the ho der# inter$ene and accept the "i supra protest for the honor of an! part! ia" e thereon or for the honor of the person for whose account the "i is drawn. The acceptance for honor ma! "e for part on ! of the sum for which the "i is drawn% and where

there has "een an acceptance for honor for one part!# there ma! "e a further acceptance "! a different person for the honor of another part!. Sec. &.'. Acceptance for honor% how made. An acceptance for honor supra protest must "e in writing and indicate that it is an acceptance for honor and must "e signed "! the acceptor for honor. Sec. &.3. When deemed to "e an acceptance for honor of the drawer. Where an acceptance for honor does not e>press ! state for whose honor it is made# it is deemed to "e an acceptance for the honor of the drawer. Sec. &.,. Bia"i it! of the acceptor for honor. The acceptor for honor is ia" e to the ho der and to a parties to the "i su"se+uent to the part! for whose honor he has accepted. Sec. &.-. Agreement of acceptor for honor. The acceptor for honor# "! such acceptance# engages that he wi # on due presentment# pa! the "i according to the terms of his acceptance pro$ided it sha not ha$e "een paid "! the drawee and pro$ided a so that is sha ha$e "een du ! presented for pa!ment and protested for nonDpa!ment and notice of dishonor gi$en to him. Sec. &... Haturit! of "i pa!a" e after sight% accepted for honor. Where a "i pa!a" e after sight is accepted for honor# its maturit! is ca cu ated from the date of the noting for nonDacceptance and not from the date of the acceptance for honor. Sec. &.5. 2rotest of "i accepted for honor# and so forth. Where a dishonored "i has "een accepted for honor supra protest or contains a referee in case of need# it must "e protested for nonDpa!ment "efore it is presented for pa!ment to the acceptor for honor or referee in case of need. Sec. &.7. 2resentment for pa!ment to acceptor for honor# how made. 2resentment for pa!ment to the acceptor for honor must "e made as fo ows/ 0a1 If it is to "e presented in the p ace where the protest for nonDpa!ment was made# it must "e presented not ater than the da! fo owing its maturit!. 0"1 If it is to "e presented in some other p ace than the p ace where it was protested# then it must "e forwarded within the time specified in Section one hundred and four. Sec. &.<. When de a! in ma*ing presentment is e>cused. The pro$isions of Section eight!Done app ! where there is de a! in ma*ing presentment to the acceptor for honor or referee in case of need. Sec. &50. Cishonor of "i "! acceptor for honor. When the "i is dishonored "! the acceptor for honor# it must "e protested for nonDpa!ment "! him.

NEGOTIABLE INSTRUMENTS LAW [SEC. 171-177]


JI4. 2AGHENT AO? @ONO? Sec. &5&. Who ma! ma*e pa!ment for honor. Where a "i has "een protested for nonDpa!ment# an! person ma! inter$ene and pa! it supra protest for the honor of an! person ia" e thereon or for the honor of the person for whose account it was drawn. Sec. &5'. 2a!ment for honor% how made. The pa!ment for honor supra protest# in order to operate as such and not as a mere $o untar! pa!ment# must "e attested "! a notaria act of honor which ma! "e appended to the protest or form an e>tension to it.

Sec. &53. Cec aration "efore pa!ment for honor. The notaria act of honor must "e founded on a dec aration made "! the pa!er for honor or "! his agent in that "eha f dec aring his intention to pa! the "i for honor and for whose honor he pa!s. Sec. &5,. 2reference of parties offering to pa! for honor. Where two or more persons offer to pa! a "i for the honor of different parties# the person whose pa!ment wi discharge most parties to the "i is to "e gi$en the preference. Sec. &5-. Effect on su"se+uent parties where "i is paid for honor. Where a "i has "een paid for honor# a parties su"se+uent to the part! for whose honor it is paid are discharged "ut the pa!er for honor is su"rogated for# and succeeds to# "oth the rights and duties of the ho der as regards the part! for whose honor he pa!s and a parties ia" e to the atter. Sec. &5.. Where ho der refuses to recei$e pa!ment supra protest. Where the ho der of a "i refuses to recei$e pa!ment supra protest# he oses his right of recourse against an! part! who wou d ha$e "een discharged "! such pa!ment. Sec. &55. ?ights of pa!er for honor. The pa!er for honor# on pa!ing to the ho der the amount of the "i and the notaria e>penses incidenta to its dishonor# is entit ed to recei$e "oth the "i itse f and the protest.

NEGOTIABLE INSTRUMENTS LAW [SEC. 178-183]


J4. (IBBS IN SET Sec. &57. (i s in set constitute one "i . Where a "i is drawn in a set# each part of the set "eing num"ered and containing a reference to the other parts# the who e of the parts constitutes one "i . Sec. &5<. ?ight of ho ders where different parts are negotiated. Where two or more parts of a set are negotiated to different ho ders in due course# the ho der whose tit e first accrues is# as "etween such ho ders# the true owner of the "i . (ut nothing in this section affects the right of a person who# in due course# accepts or pa!s the parts first presented to him. Sec. &70. Bia"i it! of ho der who indorses two or more parts of a set to different persons. Where the ho der of a set indorses two or more parts to different persons he is ia" e on e$er! such part# and e$er! indorser su"se+uent to him is ia" e on the part he has himse f indorsed# as if such parts were separate "i s. Sec. &7&. Acceptance of "i drawn in sets. The acceptance ma! "e written on an! part and it must "e written on one part on !. If the drawee accepts more than one part and such accepted parts negotiated to different ho ders in due course# he is ia" e on e$er! such part as if it were a separate "i . Sec. &7'. 2a!ment "! acceptor of "i s drawn in sets. When the acceptor of a "i drawn in a set pa!s it without re+uiring the part "earing his acceptance to "e de i$ered up to him# and the part at maturit! is outstanding in the hands of a ho der in due course# he is ia" e to the ho der thereon. Sec. &73. Effect of discharging one of a set. E>cept as herein otherwise pro$ided# where an! one part of a "i drawn in a set is discharged "! pa!ment or otherwise# the who e "i is discharged.

NEGOTIABLE INSTRUMENTS LAW [SEC. 184-189]


J4I. 2?OHISSO?G NOTES ANC 3@E3)S Sec. &7,. 2romissor! note# defined. A negotia" e promissor! note within the meaning of this Act is an unconditiona promise in writing made "! one person to another# signed "! the ma*er# engaging to pa! on

demand# or at a fi>ed or determina" e future time# a sum certain in mone! to order or to "earer. Where a note is drawn to the ma*er9s own order# it is not comp ete unti indorsed "! him. Sec. &7-. 3hec*# defined. A chec* is a "i of e>change drawn on a "an* pa!a" e on demand. E>cept as herein otherwise pro$ided# the pro$isions of this Act app ica" e to a "i of e>change pa!a" e on demand app ! to a chec*. Sec. &7.. Within what time a chec* must "e presented. A chec* must "e presented for pa!ment within a reasona" e time after its issue or the drawer wi "e discharged from ia"i it! thereon to the e>tent of the oss caused "! the de a!. Sec. &75. 3ertification of chec*% effect of. Where a chec* is certified "! the "an* on which it is drawn# the certification is e+ui$a ent to an acceptance. Sec. &77. Effect where the ho der of chec* procures it to "e certified. Where the ho der of a chec* procures it to "e accepted or certified# the drawer and a indorsers are discharged from ia"i it! thereon. Sec. &7<. When chec* operates as an assignment. A chec* of itse f does not operate as an assignment of an! part of the funds to the credit of the drawer with the "an*# and the "an* is not ia" e to the ho der un ess and unti it accepts or certifies the chec*.

NEGOTIABLE INSTRUMENTS LAW [SEC. 190-198]


J4II. GENE?AB 2?O4ISIONS Sec. &<0. Short tit e. This Act sha "e *nown as the Negotia" e Instruments Baw. Sec. &<&. Cefinition and meaning of terms. In this Act# un ess the contract otherwise re+uires/ :Acceptance; means an acceptance comp eted "! de i$er! or notification% :Action; inc udes counterc aim and setDoff% :(an*; inc udes an! person or association of persons carr!ing on the "usiness of "an*ing# whether incorporated or not% :(earer; means the person in possession of a "i or note which is pa!a" e to "earer% :(i ; means "i of e>change# and :note; means negotia" e promissor! note% :Ce i$er!; means transfer of possession# actua or constructi$e# from one person to another% :@o der; means the pa!ee or indorsee of a "i or note who is in possession of it# or the "earer thereof% :Indorsement; means an indorsement comp eted "! de i$er!% :Instrument; means negotia" e instrument% :Issue; means the first de i$er! of the instrument# comp ete in form# to a person who ta*es it as a ho der% :2erson; inc udes a "od! of persons# whether incorporated or not% :4a ue; means $a ua" e consideration% :Written; inc udes printed# and :writing; inc udes print.

Sec. &<'. 2ersons primari ! ia" e on instrument. The person :primari !; ia" e on an instrument is the person who# "! the terms of the instrument# is a"so ute ! re+uired to pa! the same. A other parties are :secondari !; ia" e. Sec. &<3. ?easona" e time# what constitutes. In determining what is a :reasona" e time; regard is to "e had to the nature of the instrument# the usage of trade or "usiness with respect to such instruments# and the facts of the particu ar case. Sec. &<,. Time# how computed% when ast da! fa s on ho ida!. Where the da!# or the ast da! for doing an! act herein re+uired or permitted to "e done fa s on a Sunda! or on a ho ida!# the act ma! "e done on the ne>t succeeding secu ar or "usiness da!. Sec. &<-. App ication of Act. The pro$isions of this Act do not app ! to negotia" e instruments made and de i$ered prior to the ta*ing effect hereof. Sec. &<.. 3ases not pro$ided for in Act. An! case not pro$ided for in this Act sha "e go$erned "! the pro$isions of e>isting egis ation or in defau t thereof# "! the ru es of the aw merchant. Sec. &<5. ?epea s. A acts and aws and parts thereof inconsistent with this Act are here"! repea ed. Sec. &<7. Time when Act ta*es effect. This Act sha ta*e effect ninet! da!s after its pu" ication in the Officia Ga6ette of the 2hi ippine Is ands sha ha$e "een comp eted. Enacted/ Ae"ruar! 3# &<&&

Das könnte Ihnen auch gefallen