Kristian Weller Licup

Notice of Dishonor part

II

1. Time and Place

1.1. Sec. 102, NIL

Notice

may be given as soon as the

instrument is dishonored and within
the time fixed by NIL
unless delay is excused

1.2. Sec. 107, NIL

NOTICE

to SUBSEQUENT PARTY: Each

party who receives a notice is given
the same period of time within which
to notify prior indorsers that the last
holder had.

1.3. TIME FIXED BY THE NIL:

a. Where parties reside in same place (Sec.
103, NIL): Must be given w/in the ff. times:
1. If given at the place of business of the person
to receive notice - before the close of business
hours on the day following.
2. If given at his residence - before the usual
hours of rest on the day following.
3. If sent by mail - deposited in the post office in
time to reach him in usual course on the day
following.

MEANING OF THE SAME

PLACE
Refers

to the corporate limits of a

town or city where the presentment
is made or where the holder resides

b. Where parties reside in different places (Sec.

104, NIL):
1. If sent by mail - deposited in the post office in

time to go by mail the day following the day of

dishonor,
2. If there be no mail at a convenient hour on last
day - by the next mail thereafter
3. If given otherwise than through the post office
- within the time that notice would have been
received in due course of mail, if it had been
deposited in the post office within the time
specified above

Convenient hour
depends

on the usual hours of

opening of business houses and the
post-office

c. Delay (Sec. 113, NIL)

1. Excused: when the delay is caused by
circumstances beyond the control of the
holder and not imputable to his default,
misconduct, or negligence
2. But, when the cause of delay ceases to
operate, notice must be given with
reasonable diligence.

1.4 Sender deemed to have

given due notice (Sec. 105, NIL)
Where

notice of dishonor is duly

addressed and deposited in the post
office
notwithstanding any miscarriage in
the mails
deposit in post office when

deposited in any branch post office or in

any letter box under the control of the
post-office department. (Sec. 106, NIL)

1.5. Place where notice must

be sent (Sec. 108, NIL)
a. to the address, if any, added by the
party to his signature;
if address not given:
1. to the post-office nearest to his place of

residence or where he is accustomed to

receive his letters; or
2. If he lives in one place and has his place
of business in another, to either place; or
3. If he is sojourning in another place, to the
place where he is so sojourning.

 b.

Notice sent to place not in accord

with NIL, still SUFFICIENT
Where the notice is actually received by

the party within the time specified in this

Act

MAY NOTICE OF DISHONOR BE

GIVEN BEFORE THE DATE OF
MATURITY?
No,

such notice would be insufficient

The instrument cannot be said to be
dishonored by non-payment unless it is
overdue and unpaid
Noticeofdishonor can be given only
after the instrument has been actually
dishonored, and notice given before the
paper due is premature and insufficient,
regardless of the indorsers knowledge
that the maker was in default

PURPOSE OF PROMPT
NOTICE
Togivethepersons

secondarily
liable every opportunity to secure
themselves such as to enable the
party to be charged to preserve and
protect his rights against prior
parties

2. By Whom Given

2.1. Sec. 90, NIL

By

or on behalf of the holder; or

any party to the instrument who may
be compelled to pay it to the holder,
and who, upon taking it up, would
have a right to reimbursement from
the party to whom the notice is
given

2.2 Agent
Notice

of dishonor may 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 his principal or not (Sec. 91, NIL)
Where instrument has been dishonored in
hands of agent, he may either himself give
notice to the parties liable thereon, or he
may give notice to his principal (within the
same time as if agent were holder) (Sec. 94,
NIL)

3. To whom notice MAY

be given

3.1. IN GENERAL (Sec.

97)
1.
2.

Party himself
his agent in that behalf
An accommodation indorser is entitled to

notice
An irregular indorser must also be given
notice if he is to be charged
If notice is given to an agent, he
must be duly authorized to receive the
notice of dishonor

3.2. If given by an agent

(Sec. 94, NIL)
To

his principal, in case of an instrument

dishonored in the hands of an agent, or
To the parties liable thereon
ex: collecting bank
If the agent decides to give notice to the

principal, he must give notice within the time

allowed by law as if he were a holder
The principal has also the same time to
give notice to the persons secondarily liable

3.3. If party is dead and death

known to the party giving
notice (Sec. 98, NIL)
MUST

be given to a personal
representative, if there be one, and if
with reasonable diligence, he can be
found;
If no personal representative MAY
be sent to the last residence or last
place of business of the deceased.

3.4. To partners (Sec.

99, NIL)
Notice

to any one partner is notice to

the firm
even though there has been a
dissolution.

3.5. To joint parties(Sec. 100,

NIL)
Joint

persons who are not partners

Notice is given to each of the party
unless one of them has authority to
receive such notice for the others.

3.6. to bankrupt (Sec.

101, NIL)
Where

a party has been adjudged a

bankrupt or an insolvent, or has
made an assignment for the benefit
of creditors:
to the party himself or
to his trustee or assignee

End